in place at the ntsb many holding over from the last administration. the active faa administrator resigned on january 20 when donald trump was sworn in. there is not someone who has been named in his place to this point. we heard that president trump was enacting a position for christopher rush low. that will put someone in that role for now. there will be a push i'm assuming. we heard the president alluded to it under question from a reporter about the actual confirmation process to make sure that ultimately an administrator is confirmed in an expert is just a matter by the u.s. senate which, this week, is preoccupied by other confirmation hearings and votes. there will be an effort to fill that road is the -- role as that is a crucial vacancy at a time a tragedy such as this has happened. sean duffy was sworn into office yesterday. it's his first full day on the job. he is be confirmed sworn in transportation secretary to help

all of these investigations see to it not just the department of transportation and the faa, as we heard everyone speaking to this morning at the news conference and in this briefing. >> kailey leinz, thank you so much. a complete recap of what we just heard from the president and what we know so far. kailey leinz, bloomberg balance of power cohost and she will be with you at the top of the next hour. we want to continue our coverage and go to tyler kendall. she's at reagan airport with the latest. this deadly crash happened last night. there is still a lot we don't know. our understanding is that right now, all 67 folks on board have perished. there are no survivors from this incident. what more have you learned this morning and this afternoon? >> officials confirmed to us reporters in a briefing earlier that it transitioned from a search and rescue mission to a search and recovery mission.

no survivors are expected from that flight. officials are trying to reassure the american public the skies are safe. you heard president trump ask that during his briefing -- asked that during his briefing. sean duffy said that this tragedy was preventer will. you also heard pete hegseth, the defense secretary, saying this was a mistake and it had to deal with an elevation issue. considering officials say the flight paths of both of these aircrafts were considered normal and they were talking with air traffic patrol, we are expecting a briefing from ntsb later this afternoon that we will be monitoring. >> in terms of the resources being deployed, being tapped to address what they can with this search and recovery mission, the search-and-rescue mission that has turned into a search and recovery mission, what can you tell us about the different agencies that are working on this? >> hundreds of law enforcement

officials are here on the ground to help with this search and recovery mission. we know this will be a multi agency effort. the lead. we know the faa is involved as well as the broader department -- transportation department and the pentagon has launched their own inquiry into this as well. we now have an acting administrator of the faa. if you checked their website minutes ago, that had yet to be updated. filling that void is considered to be crucial as this investigation continues to unfold. here at dca, we can confirm the airport has reopened, although it is operating under a limited schedule with cancellations and delays. i caught up with somebody as they were on their way to their flight, saying they were seeking answers. they were not sure if they would make it to the airport as we learn more details about this devastating crash. >> reagan airport is operational

although there might be delays for flights taking off and landing there. can you tell us about the role the weather has played? it has been cold in the washington region and the water in the potomac has been frigid if not frozen. does that factor in? >> d.c. experienced freezing temperatures that froze the potomac river which has complicated the search and recovery mission. officials told us in the briefing that high wind gusts overnight have complicated this because it has widened the search area here on the ground. they are starting to go through this. officials have confirmed that 28 bodies have been recovered from the potomac river. we know there were 64 people on the american airlines commercial flight and there were three people on the u.s. army black hawk helicopter. >> tyler kendall of bloomberg news with the latest from reagan national airport. we will be back.

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>> this is bloomberg markets, i am scarlet fu.

we are looking at an s&p 500 that has recovered from some of the losses we have seen the last few days. evidence the economy is doing fine, helping to support equities as evidenced by the latest gdp print and corporate earnings. small caps outperforming. they don't quite trade at the valuation premiums big caps do. seen as more sensitive to the economy's every move. not much movement in the bond market today. the 10 year yield basically unchanged at 4.52%. the fed kept interest rates unchanged yesterday. jay powell tried to say as little as possible about the future right path. i lost count of the number of times we will -- he said we will have to wait and see. gold futures helped by a weaker u.s. dollar. let's turn to company news and two economic bellwethers. we will start on ups. shares are plunging.

the most on an intraday basis since 2008. this comes as ups projected annual revenue below expectations. for details, let's bring in the reporter who covers ups, kelly. people will read all sorts of things into this. what did ups blame this on? >> ups, they have been having some not so good volumes lately. demand for shipping has been down. this comes down to the fact that they are trying to mix it up a little bit and actually reduce, purposefully, some of their volumes. particularly from low margin customers. this is what is leading to a bit of a lower revenue forecast. >> lower margin customers tend to order from amazon. what does that reliance or reduced reliance on amazon look like? >> amazon is their largest

customer. the ceo of ups told me on their earnings call, not the most profitable. because it is lower value and lower margin of volume at ups's network, it brings in less profit for the company. so, they will be reducing, they have agreed with amazon that they will reduce volumes from amazon by more than 50%. by 2026. and this is an acceleration of a plan that they already had underway. it is coming much quicker than expected. scarlet: where is it going to make that up? >> they are going after some higher-margin business. they are looking into the health care vertical, which they call complex logistics. it brings in a little more profit. they use more of ups services. hopefully -- they are hoping that's where they can make

up some of that revenue. >> in 2023, ups was negotiating with their workers. they avoided a strike by paying them more. labor talks forced some to move to competitors like fedex. did the customers stay with the competitors or did they move to ups? >> ups has been courting some customers, trying to bring them back. based on -- i can't say exactly, based on volumes and things like that, it's not looking like they are where they used to be. scarlet: they have not recovered completely from that episode, along with just the whole package delivery business, still normalizing after the pandemic. >> exactly. scarlet: thank you so much. be sure to turn into bloomberg's the close this afternoon. we have a conversation with the ceo of ups at 3:30 p.m. new york time. let's turn to caterpillar.

shares falling due to a revenue warning. kristin owen -- is at oppenheimer. i have heard the description of the numbers as underwhelming. what are you seeing when you look at caterpillar's financials? >> there is a lot of something for everyone in this print. certainly top-end margins, disappointed in the fourth quarter. we are seeing some deceleration in demand. that is largely being driven by the construction industries, mining a little bit weaker than expected. that's partially being offset by what we are seeing as strong data center demand. that's the story that is carrying into 2025. construction, mining a little bit weaker. you have dealers that are trying to take down their inventory

given that demand uncertainty. at the same time, you have this nice boost from data center demand and power demand that is helping to dampen the impact on the bottom line. >> we will get to data center demand in a moment. i want to focus on the construction of resource businesses which is where the weakness is. what does that tell us about where we are in the economic cycle that the construction industry and the resource industry for caterpillar is not showing signs of revival? >> it's so interesting -- what's so interesting about this point in the cycle is we are seeing construction activity is still pretty healthy. you have some swing factors to look at in 2025. mostly related to policy and the timing of how that spending will flow through the system. construction activity is still fairly good. what we are seeing reflected in this lower demand environment is the impact of there's greater availability of equipment out there than there has been before. the equipment demand has been

well saturated or well met. pricing is coming down. that was particular headwind in q4 and likely to remain a drag in q1. there's machinery out there that is available that customers can use. activity is still pretty strong. their machine demands have been met. >> that's interesting about the elevated inventories. what is the explanation? was there concern that perhaps there might be reciprocal tariffs? i'm curious whether this is a normal level of inventory they are trying to work down. >> they are at the upper end of their normal inventory range. there are a couple of factors influencing that. first is you have some slowdown in activity in other parts of the world. if you think about europe, parts of asia, that really have not been as strong.

you are seeing more of that equipment that is produced in those regions that is coming to north america. that has led to a little more inventory than what has been needed here to meet the backlogs that we are seeing with these engineering companies. that is reflected in a lot of the excess inventory that we have today. on the mining side, a little different. mining trucks are big capital purchases. you are seeing more prudence among the customer base, not willing to spend nearly as much given the high interest rate environment. that's where you are seeing a little more of that access inventory on the mining side. scarlet: thank you for explaining that. let's go to the data centers. industrials overall are seen as a beneficiary of this old up -- buildup of data centers. of course, this week, we got news about deepseek and its more efficient, cheaper ai models. how concerning is that for

caterpillar's generator business or is it still too early to say? >> that's a great question, scarlet. it was certainly a topic during the earnings call today. i think the general answer would be it is too soon to tell. they are not seeing any slowdown in their backlog build or level of interest. the company has announced it is increasing its capacity for large engines in order to be able to serve the strong demand for this market. and believes that if it had that capacity, it would be able to sell more to this end market. it helps in two ways. you mentioned the power. you are also looking at what happens in more of the energy ecosystem as we need more energy to supply to those data centers. what does that mean in terms of natural gas demand? that's another area where kat says we are looking at a little bit of incremental growth in 2025. some of that might be data

center oriented. some of that might be general power demand. >> is caterpillar going to devote more resources to producing those generators? if so, how quickly can they get that going? >> last year, they announced that they were planning to increase their large engine capacity by 100 25%. that comes on over a period of four years. we shouldn't expect major inflection in 2025 but that is a big capital commitment for a company like caterpillar, increasing 125 percent of their capacity. it is clear they see a long runway of demand in this particular in market and are putting more energy to being able to supply that. scarlet: i look at your rating on caterpillar, what do you need to see in order to upgrade to an outperform? >> we are at the stage where caterpillar is going through a shift in the investor mindset. when we just look at the

fundamentals, you have two of the end markets that represent a vast majority of their revenue, that are sort of peak is an starting to roll over. we are anticipating major decline in 2025 but we are expecting -- aren't expecting major decline in 2025 but we are expecting decline. estimates need to come down, this is maybe not the time to own the stock. that is being offset by some of the tailwind in data center. for us, the uncertainty in what looks to be a volatile year in 2025, that does not necessarily offset what is relatively small exposure to that data center and market. scarlet: something they are excited to talk about but clearly not the primary engine of their business. kristin, thank you for joining us today. kristin owen, an analyst at oppenheimer. she has a market perform rating on caterpillar. coming up on bloomberg markets,

we will focus on retirement. it is something investors are looking carefully at. not just investors but politicians and the public as well. we will talk about retirement readiness with sarah levy. she's ceo of betterment. this is bloomberg. ♪

♪ scarlet: this is bloomberg markets. i am scarlet fu. a growing number of u.s. households are becoming uncertain about their ability to live comfortably once they leave the workforce. prudential financial's cfo spoke about the importance of policy when it comes to retirement. >> there is so much in terms of an aging population, a lack of ability for the governments to continue to support retirement and a need for individuals to have the ability to save and

then generate protective income. scarlet: that brings us to our weekly segment that focuses on retirement. i would like to welcome sarah leavy. she's ceo of betterment, which serves customers with more than $55 billion in assets and other management. good to speak with you. you heard the cfo talk about policy. i want to get your take on policy in the u.s. to improve retirement security. there is something called secure to point out. and this legislation that tries to expand the number of americans that have access to sponsored retirement plans. what can you tell us about it? we have a divisive congress. we have concerns washington can't get anything done. what's the likelihood of something like secure 2.0 actually passing? >> secure 2.0 is a look in the rearview mirror. january is great for secure 2.0 because some of the policies are just coming into action now.

interestingly, i would start from the point that retirement readiness is one area where a bipartisan government is actually united and aligned and one of the few areas. that is really exciting. what secure 20 did is expand access and participation to retirement. a couple of key elements of that legislation, which has come into effect, is that it expanded the ability for small companies to offer retirement solutions for their employees, by requiring both auto enrollment and auto escalation. so basically, opt out for employees, rather than opt in, which is teaching good behavior. that is kind of the starting point. scarlet: that makes a lot of sense. thank you for clarifying that for us. what is the next step to build on that? these seem like common sense solutions at this point. >> they are very common sense

solutions. there are three opportunities we could think about from a regulatory perspective that would be advancements. the first would be take what was the goodness in secure 2.0 and expand it to all plans. secure 2.0 required elements for new plans that launched starting in late 2022. grandfathered -- they grandfathered anyone who had a 401(k) plan. think about employees in larger businesses who had access to a 401(k) plan but were not participating. there is an opportunity to re-enroll those folks. that is an important one. the second one would be a reduction in friction. right now, incumbent institutions have incentives to hold onto retirement assets, rather than giving employees access to their money when they leave companies. there is a real opportunity, what happens then is that sometimes employees retirement are left in high or nonfiduciary

-- high fee or nonfiduciary managed accounts which erodes their retirement savings. this idea of reducing friction would be powerful for the government. i think that those are probably two of the big ones. scarlet: those are things people don't think about or realized until it is time to retire and tap into those accounts. when it comes to what you're finding on the ground with people and their willingness to say their ability to manage retirement, what's interesting is the economy is growing and unemployment is relatively low. the stock market is not far off from its highs and yet there is a lot of financial anxiety in the near term. much less for retirement down the road. what did you find is driving the anxiety? >> there is short-term anxiety and long-term anxiety and you can't separate the two ideas. folks are concerned about their retirement. what they are concerned about now is high prices meaning they don't have excess spending or

they don't have excess power to put a mate -- put away money for retirement and they are missing out on the power of compounding. i think that is where there focus is, the prices of eggs. that means they don't have the excess cash to put into a retirement solution. >> there's the temptation to keep putting it off and say i will get to it next month or next quarter and that's where you lose out on the compounding. sarah, i really appreciate you joining us. sarah leavy is ceo of adamant for our retirement segment -- betterment for our retirement segment. coming up on bloomberg, we will focus on the markets including a look at credit markets which some people is -- say is priced for perfection. this on a day where the s&p 500 is moving marginally higher, up by 1/10 of 1%. the big winner is in small caps, russell 2000 gaining more than 1% at the moment. we have big earnings coming up including apple this afternoon

in four hours time. from new york, this is bloomberg. ♪ prudential has been helping protect people for generations. ♪♪ we helped the lost generation find their way. the greatest be great. we watched boomers grow. [laughing] we are x, y and z. and this january, a new generation begins. generation beta so, now what? we help protect their life's work, like no generation before. so they can live a better life longer. ♪♪

scarlet: welcome to "bloomberg markets." i'm scarlet fu. we are midday here in the u.s. trading day. i want to give you a glimpse of what is going on in the markets. not much movement, s&p 500, little change at the moment. a change in small caps. a glimpse of shows you the economy is ok. corporate earnings for the most part are beating analysts' estimates. if you dig a little bit beliefs -- beneath the numbers, a little disappointing. you can see the 10 year yield

4.52%, that is the trend amongst the curve, not much movement. a move higher in gold futures, now at 2840, a record high, helped by a weaker dollar. exciting movement, let's go to bloomberg's emily garofalo. emily: i'm happy to share the excitement, scarlet, comcast the telecom company dropping to the lowest level in about two years after reporting a surprise loss in broadband customer subscribers. they shed 139,000 broadband customers in the third quarter, citing intense competition. they also messed on peacock subscribers, their streaming service that again is a competitive business. the losses in both the straining and broadband overshadowed the company's failed and earnings

beat. hewlett-packard falling after learning the department of justice is suing the company's $14 billion acquisition of juniper networks. arguing that the deal will be harming competition for enterprise wireless equipment, and jupiter per makes some of those equipments that hospitals and universities use, making devices like routers. that is about 3% down. looking at shares of alternative asset manager blackstone fear that company down about 3.6% right now, despite a beat on a number of different metrics, including fee related earnings and a um, which came in right in line but still pretty solid here, one point one 3 trillion come up eight .4% year-over-year. as for why the stock is down after little pop after the open, they posted returns in private equity, credit, but that real of

-- real estate segment was lagging behind, perhaps due to a broader macro slump, interest rates,, but all, it was a beat on the top line metrics. scarlet: all right, emily griffey oh, thank you so much. with our movers. we want to stay with blackstone. its president and coo john gray spoke with the bloomberg open interest team. he laid out expectations for president trump's second term. take a listen. jonathan: i think that will be higher tariffs, but i think it will be fluid given some of the negotiations. i think our businesses need to be aware of the spirit our investors do. we have to wait and watch a bit to see where it settles. sonali: do you have concerns on the immigration front that some of the policies under the trump administration could cause labor market distortions that can impact your business is?

could it be inflationary? jon: you know, i think it is still early here to see what will happen. obviously there's a shift in immigration policy. the focus now is on deporting criminals. i think, again, we will have to wait and see the extent of what will happen to really understand it. on the inflation question more broadly, i was encouraged to see the new treasury secretary, his testimony when in washington, d.c., he talked about the fact that inflation was killer for working families. he talked about being committed to fighting the affordability crisis, so there's clearly a recognition that inflation is an issue. scarlet: let's bring an sonali basak now, who joins us live on set. john gray talking about how they are thinking about the second trump administration, but he talked a little to you as well about the commercial real estate market. emily was pointing out that weakness is why the stock is lower today, despite pretty

decent fourth-quarter results. sonali: yeah. you can look at the numbers, and it is interesting, most of the businesses throughout full year 2024 had gains of double-digit percentage points, so really strong gains. but when you look at opportunistic real estate, down 3.7% for the year, another 5.1% for the fourth quarter alone. that was high. interest rates really taking a bite there. with that said, you are looking at blackstone trying to seriously deploy money, we reported, and gray did not report this, but they are looking to die then to real estate. they are looking to buy a manhattan skyscraper. this is new. he sees that part of the business, starting to rebound. scarlet: this is interesting, because blackstone has been pulling back the last few years.

sonali: i did ask about the deepseek impact. they did talk to clients pretty immediately after the scare took place over the weekend. the difference between what they are seeing is these leases are about 15 years long. they have a lease for 15 years. they might see a slowdown across the industry potentially as they get more information on other private capital firms slowing down, in terms of how fast they get into the data center business. scarlet: of course blackstone, we often refer to it as a private equity firm, but it is so much more than that, right? it goes across assets, across private assets as well. there's an interesting story on the bloomberg terminal today that investment bankers who cater to pe firms offer to do deals for free because this is driving demand for leverage learns -- leverage loans. sonali: leverage loan markets have been jumping back.

private credit has been competing. for blackstone, this has been a double-edged sword. they want debt sheet come and if you don't have to pay your bankers, even better. but if you do have a private credit business competing with that leverage loan business, what we are watching is more of these is firms like blackstone going into more other areas like asset-backed financing that are not quite directly competing with leveraged loans. now might be the time to get a buyout with a zero fee. scarlet: before we let you go, blackstone recently made a key higher to head up its research business? sonali: yes. they have a very strong research arm generally. you look back at the surprises, going back to the wing, but you are seeing that expansion in research, credit research in particular, given where the market is and the bigger presence they are having in

private credit, but this research does something similar with henry mcveigh. by doing it more and more, they are making it more available in terms of institutional blackstone, thought leadership blackstone, and in a lot of ways, it looks a lot more like a bank in that regard. scarlet: blackstone hiring matt loomis, according to an internal memo. sonali, thank you so much. bloomberg's sonali bass ak, who is cohost of "bloomberg open interest." sonali pier, not to be confused with sonali basak. great to see you. sonali: thanks for having me. scarlet: the fed hit because in its credit campaign come and the only guidance we got from jay powell we will have to wait and see. he said that a number of times. largely speaking, what does higher for larger -- longer mean for credit? sonali: for credit, we got a lot

of refinancing done. likely we will see more, but it may slow because we are in a higher for longer regime, which means it is not advantageous necessarily for companies to refinance them if they had previously expected risk to come down. but what we see the most dispersion is in the triple c budget. the low portion where investors are discerning which companies are able to bear through with interest rates and lower margins and which one may not be able to. dispersion in a low quality credit will continue. i think when we think about, you know, how they can access markets, they will start to look a little more broadly. earlier, frankly, we were talking about bank loansmulti high credits, high yields. we may not see bonds being called quite as early also because the cost to refinance them have gone up or head steady

-- held steady. scarlet: credit markets seem to be priced for perfection. high heels at pre-financial levels, what are people saying about the likelihood that they will spread more? sonali: spreads are relatively tight, but what is attracting investors into all these credit asset, whether investment-grade, high-yield, bank loans, other areas as well is really round the yield opportunity. the higher level of yield can generate a fair amount of income, and it can withstand a little bit of spread widening. at this point, our forecast, when we look around the growth in the broader economy, gdp expectations, inflation expectations, you can see this type of environment lasts a lot longer than maybe historical percentages would suggest. so, yes, spreads are tight, but

the yields are still attracting inflows into these asset classes, and in terms of spread widening on the margin, people would welcome as an opportunity to have low volatility and a better return potential as a result. scarlet: i lightly say how higher yields are attracting investors on their own, even with spreads tight, but some investors would rather buy a 30-year treasury intake on duration risk rather than by more corporate credit. what is your take on the relative appeal of credit versus government debt? sonali: yeah. as the spreads compressed, certainly the pick is less and less for taking on additional corporate risk. that said, corporate fundamentals have been strong, and when we look at across, in fact with a new regime, you know, political policies also likely to change. we may see more m&a. there's catalyst for appreciation, whether potential cuts in the back half of the year, from the fed, or m&a that can lead to a change of control, for example, in a high-yield

bond or absolute spread tightening as an improved outlook. scarlet: as jay powell says, we will have to wait and see when it comes to some policy initiatives. jp morgan says corporate credit is near overbought and recommends hedging given some of the uncertainty over policy initiatives we will likely see, whether it is going to be tariffs or anything else. what is your take? is there need to buy protection? how is protection price right now? sonali: when we look at our portfolios, we want them to stand the test of time. we look at our scenario analysis and try to build robust portfolios, and as such, we are very concerned about something, we are not going to layer in more hedges. we want to cut the wrists we are concerned about. from our -- cut the risks we are concerned about. from our perspective, outlook is strong. yes, spreads are tight, maybe

look into a secured bond, find some defenses, some noncyclical's over cyclicals, rather than, you know, keeping static positioning and buying protection. many times we are selling protection because there is who are just looking for a quick way to reduce the risk. scarlet: in terms of sectors, i know that typically everyone works from bottom up, and you are doing your homework on each issue, but are there certain sectors that are better positioned right now, given the uncertainty we face when it comes to tariffs or any other policy initiatives? sonali: yeah. absolutely. sectors have the possibility of strong cash flows. they will have better positions, they won't be as difficult when they see tariffs added, or inflation, let's say, is less clear, or we are in higher for longer. we think they are poised for a better outlook. financials come out a potential friend deregulation, higher for

longer, other sectors, the consumer has been quite resilient. where on the other cycle of retail, we've already been concerned about it for a number of reasons, and then tariffs would already make the picture for margins and outlooks even more concerning. scarlet: we appreciate you joining us today. sonali pier with pimco, heading up the multisector credit as a portfolio manager. coming up on "bloomberg markets ," we go back to earnings because we have another big one today. apple is reporting. right now, the stock is down .1%. this is bloomberg. ♪

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scarlet: this is "bloomberg markets." i'm scarlet fu. time now for our stock of the hour, and we are looking at apple. the iphone maker faces headwinds in china and is playing catch up when it comes to ai. the stock is down important -- .4%. for more on what to expect, let's bring in bloomberg technology cohost caroline hyde. i guess we need to start with the positives here, because ai has not been a positive story for apple. the launch of iphone 16 was the big event that happened in the fourth quarter for apple, but they are not getting the handset numbers anymore. caroline: we had t-mobile's ceo during the show yesterday, but the weakness is in china. about $17 billion of 120 billion dollars come from greater china. we see the slow down, more competition of huawei come of the local phone makers looking

to eat in the market shares. kness will be in china when it comes to the iphone 16 rollout, and what if anything apple intelligence did, getting in on the latest phone set. it is still all about iphones, about $720 billion of it comes in from that and other parts and the ipads come about really we are expecting a record sale of revenues, 4% growth, but this is not double digit growth like were used to. scarlet: it suggests a mature technology company. price points are high, but did the volume of people come out and upgrade their phones? caroline: they are not refreshing at the pace that we use to because a lot of the handsets are still rather good. a push to the operating system and apple intelligence only being available for the latest and greatest will move people on, but i think samsung has far better intertwined, for example, the also bright on frame than apple has done.

remember they partnered with ai. maybe this cheaper intelligence large language models. scarlet: five downgrades, yeah, maybe the stock is prime for a downgrade. "bloomberg technology" cohost caroline hyde. before we go come a new headline today from bloomberg news. the owners of the world's most valuable sports team the dallas cowboys taking a step beyond football by branching into tennis. they are betting on a partnership between the dallas cowboys in the dallas open. it's also the topic of a new bloomberg podcast, the business of sports. take a listen. >> i like the first thing you are looking at when you are analyzing an event of this nature are the people that are behind it, and for us, it is all about our partnership. and, you know, we are very

comfortable in what we bring to the table, but we also know everything we don't know about partnering and being part of an event that we may not be as familiar with. so that was number one. the second is just the energy around tennis and entertainment and live event and all of that, that it all kind of was coming together for us, to see this event that has, you know, the common hp 500, so that i gave us the event, but then we thought ok, we can jump on this bandwagon, and we think we can take it to another level. a lot of that together made us think hey, we are ready for this, and we are excited to give it a try. ♪

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scarlet: this is "bloomberg markets." i'm scarlet fu. we've been talking about apple, it is all about those handset

sales, because the apple intelligence ai movement has not really taken off yet, and it's not showing up in the financials just yet. jaclyn writes nelson is the ceo of an ai enterprise company. great to see you. one of the criticisms about apple from investors is it is not a full player in the ai game it is late to the game, late to the party. as far as users are concerned, it does not do a whole lot. it has not executed, has not delivered in quite the way people would like to see. is there a reason to think that with this week's announcement of deep speak of their cheaper, more efficient ai model, that we should not be counting out apple in the ai environment? jaclyn: it is very clear that apple intelligence is big, and i don't think it is one they can't recover from. i don't think there's a lot that

changed over the last week that actually puts apple in a really interesting position and maybe even make some of their moves look a little genius in hindsight. they have not built their own large language model. it turns out there maybe a little bit of a race to the bottom there, as intelligence gets more commoditized. apple has not sunk a ton of money into these models may be a good thing. at the same time, they have invested in things that enterprises and consumers do care about, that's security, hardware, and actually they may now have hardware that is the best position for inference, and over the last week, i think really powerful models now through our -- are shrinking but still really powerful. it actually makes on device possible. there is no one better suited to do that than apple, both from mobile and a desktop perspective. scarlet: do you think this is

something they will talk, or will they go with what they've been saying all along with regard to their ai plans? jaclyn: i think this is an interesting moment for them. i'm coming in as the tech expert here rather than the public markets expert, so i don't presume to know exactly what they will do, but i would think if i were in their shoes, i would be leaning in pretty hard to this on device play and to security proposition. scarlet: i'm curious to get your take, what is the role of legacy tech in ai? oracle is one of the big players in stargate, but it feels like we cannot count them out, because there's room for them to play. jaclyn: yeah. three things have changed. a move to on device, what we just talked about with apple and is really exciting here. another is open source, and then the last is potentially on premise. and i think that is where some of the legacy companies could get interesting. scarlet: interesting. jaclyn, i'm sorry, that's all

the time we have. i printed those comments, especially as we look ahead to apple's results is afternoon. jaclyn's right -- jaclyn rice nelson's ceo of tribe ai. that does it for this hour of "bloomberg markets." keep it right here. "balance of power" is next. this is bloomberg. ♪

>> from the world of politics to the world of business, this is "balance of power."

live from washington, d.c. donald trump -- joe: donald trump blames the plane crash on d.e.i. and the last administration. the president speaks to reporters before investigators get a chance, they will do so a short time from now. i'm joe mathieu alongside kailey leinz. a tragic day in the nation's capital. we are still waiting for real details on this deadly midair collision that happened at national airport. we know the rescue operation has become a recovery operation. kailey: so far they have recovered 28 bodies from the potomac river. 68 souls are believed to be lost. we expect to hear from the ntsb at 2:45 eastern time but before we could do so, we heard from the president of the united states as well as