>> this is bloomberg technology with caroline hyde and ed ludlow. caroline: coming up the magnificent seven is in the red

as trump's trade wars on the horizon. plus, a new partnership. advertisers returned to x. we will bring you those exclusive numbers next, but first we check in on the market currently nasdaq 100 up by .9%. we see the magnificent seven all trading lower. we will look at what is under the hood as we try to digest what happens with tariffs and where valuations should be for big tech. we see the downward trajectory bode ill for the company. we are looking at fundamentals under pressure and nvidia is off by 4%.

the legal titat s still going on with arm and qualcomm. let's get to it. this is another day of stress on the valuations of the magnificent seven. let's go to nvidia and the reasons we are seeing the selloff from a macro perspective. is this about the economy? >> broadly speaking. there is uncertainty about tariff policy and implications for overall economic growth, the outlook for the consumer and businesses. we are seeing signs of businesses pulling back on investments because they are not sure what the tariff situation is going to be and all of that uncertainty is causing people to take profits if they still have them and take a pause and step back. >> when you step back, you look at the fundamentals and amazon has not been treating at these

sorts of levels in years. >> some of these names -- at the start of the year, there were concerns about valuations. those concerns are smaller now, so in the case of amazon they had pretty strong earnings growth. they have and focusing on cost cutting and improving profitability, really driving multiples down. it is cheaper than apple now and a few years ago apple was several times cheaper than amazon, so that is quite the flip in narrative when it comes to tech valuations. amazon is cheaper than walmart and costco. people continue to have optimistic views about his long-term growth potential. it would not surprise me if you see people look at any like this and say fundamentals look intact, still a lot earnings growth potential ahead even in a

rocky economic climate. caroline: but who is taking a look at a stock like this? you get so much inbound in response to your stories. are people wanting to catch what seems like a falling line? falling knife? >> people feel these are safe companies. the story is not broken even if some of the air gets let out an multiples come down more. i do not think people are concerned about long-term prospects. they are still containers -- considered dominant in their field. it would not surprise me if we saw amazon consolidate its market share in online retail. cloud business remains strong. the ad business is growing. there are positives even if we see more volatility in the short term. caroline: just take a look at arm and qualcomm as arm is

trading lower today. qualcomm has begun a global antitrust campaign against the chip designer, alleging meetings that arm is competitive -- is guilty of uncompetitive behavior. it becomes a question of what a distraction this is. this is qualcomm feeling and stating that arm is getting competitive with them and therefore stopping access to their technology and designs. >> especially when it comes from one of your top two customers, it is never easy. arm did bring the lawsuit back in 20 24, which they ended up losing against qualcomm and it reminds me of what qualcomm faced against apple.

in 2019, they had the back-and-forth and qualcomm did go with getting more royalties from apple, so i think arm is in a weak position given qualcomm is using all the ip that arm has to offer and paying for it. they may the acquisition, but they are still using arm and it is hard to prove qualcomm is doing anything wrong so i'm not surprised they are all in with this but i think arm is in a good position. caroline: qualcomm making complaints to the european commission. qualcomm has declined to comment. arm says it is confident it will prevail.

they say they remain focused on enhancing innovation. does innovation generally dip when companies are locked in what may be a years long legal dispute? >> especially with the ai market moving so fast. everyone is trying to come up with new designs, so you are right. it is a distraction. qualcomm have expressed interest in even intel, which has a new ceo now, but clearly qualcomm has ambitions and they want to do more beyond smartphones, so to your point about distraction, all the back-and-forth and lawsuits seem like a distraction. caroline: many people want to go beyond the smartphone in this environment. we will hear from ceos of

anthropic on new policies and more. this is bloomberg technology. ♪ only the servicenow platform connects every corner of your business, putting ai to work for people. - hr? - yeah. - it? - yeah. - r&d? - yup. omg? uh... oh, i see. uh... yeah. that's the department i work in. alright, enough of that.

caroline: data breaks and anthropic announced a partnership. it is bringing anthropic's models to 10,000 companies. we discuss what this means for their customers. >> it means we can use securely anthropic inside databricks and

get all that intelligence, especially all the programmability. these models are good at programming and you can use that together with all the data we have. how do you build a arm that can reason? we are excited for that. >> what are you getting out of it? >> we are excited to bring claude to a wide range of enterprise customers. claude models are growing fast. the api revenue is growing. want to make sure our models can meet requirements that customers have and we can do this with the help of databricks. we can take our models and use

databricks tools to operate on customer data and work together to secure customer data and make sure customers can be assured they get the proper security experience. both companies value things that enterprise customers value. the fastest area of growth is code. claude models are better than anything out there. we power a large number of players in the space, including cognition and others and we are starting to build an ecosystem around this area. we also have partners in other areas, in the financial space

and scientific research space. so it is pretty broadly spread but among those areas code has been growing fastest. >> i am curious about your views on the and ministration and what we have seen out of washington. what does he mean for your business? >> i think it is early days, so working together to figure out what is the best way to bring value to our customers. we have get -- given feedback on ai policy and other things so >> >> we are excited. we are in touch with the administration.

ai has been debt -- big implications for society so it is important to be about policy and not politics. we do not care which -- regardless of which administration is in office, we have a set of things we think it is good to do in ai policy. we have told the same thing to the trump administration we told to the biden administration. we have delivered the same message. we them to be consistent and offer our view of how to make the industry best. >> what should the u.s. government role be? >> i think that was a couple weeks ago things we have emphasized include export

controls on chips to china, testing of models first -- for security risks. the government should have a role in as much energy as possible. we are concerned about sick -- security is part of the partnership but another kind of security, we are worried about models and technology being stolen. those are areas where the government can have a constructive role. caroline: anthropic and databricks' ceo's. it is top of mind for u.s. tech companies because ever since deepseek launched the chinese tech industry has been flooding the world with more ai models. it feels like every day there is a new update or release from deepseek and others.

>> it has been almost every day that we have been seeing new ai services and models introduced from chinese companies. we count at least 10 of them over the past two weeks and those are just the major companies. really they are putting pressure on profit models in silicon valley where they are providing open-source ar services people can use and incorporate to be able to use all of the ai models without paying prices you would have to pay if you went to more premium models. they are putting downward pressure on those companies. they have been mostly focused on the china market. caroline: this feels as if it is

a rerun of what we have seen in plenty of industries. they have driven down costs, but what is the implicate -- implication? >> if you look at ev's or solar panels, they are negative implications for other countries. it is not clear how this is going to play out. they are driving down profits in certain areas but shifting competition to other areas like execution and who can build services to connect ai know how with consumer needs and you will see innovation out of silicon valley and china. overall, it is probably good for the ai market. you get lower prices and robust competition and the will probably lead to more innovation. caroline: certainly tim cook has

been going to that home of innovation. advertisers reacting to elon musk's power in washington by returning to x. that is next. meanwhile, check in on microsoft . analyst are saying the cut -- company has walked away from new datacenter projects and is attributing it to an oversupply of clusters of compute that power ai. that sent shockwaves back in february as well. this is bloomberg technology. ♪

caroline: first, google's gemini gets an upgrade. the company is releasing version 2.5 of its ai model that it says is capable of disease -- of reasoning before responding. plus, openai is making it simpler to edit images in chatgpt. during a live stream, the company showed how users can now refine images. according to openai, the program will be able to better create diagrams and logos for professional use. elon musk's clock -- grok is making waves in india. it has made controversial responses around indian politics, including criticizing the prime minister. grok's replies have set off a

political firestorm in the indian government. let's stick with elon musk because for the first time since he acquired x the social media platform is on pace to see advertising revenue grow according to a research firm. you brought us this research exclusively. where to the data come from? how are you tracking the increase? >> the data is from our proprietary forecasts and we have a multisource methodology where we have a team of forecasters that goes through a variety of sources from third-party research firms to interviews with advertisers and look set broader digital advertising trends to put together these forecasts. >> those advertisers that are returning, are they coming back with a desire to spend or something else? >> this is a recovery, not a

rebound. even with the growth we are projecting, x's ad business in 2025 will still be slower than twitter ad business in 2019. some of this growth is actually being driven by fear. there advertisers out there now who see spending on x as kind of the cost of doing business to mitigate potential legal or financial repercussions. the problem is that fear is not a sustainable motivator. luckily for x, it is not just fear driving the growth. it has been able to secure a new base of advertisers, including small and medium-size businesses, which is something twitter struggled with. the problem is the advertisers have less money to spend, so while they are helping prop up growth we are still not seeing spending levels reach the same heights as they were prior to elon musk's takeover.

>> what is that versus before the acquisition and where does it go from there? >> though it is smaller than it was and twitter saw strong growth, like other businesses during the pandemic, which means pretty much all the growth it gained is lost. we are still expecting the ad business to continue growing in 2026 and 2027, but we have less visibility into those years because the situation is volatile. there is still concern about safety among -- branded safety among advertisers. as attitudes evolve, we could see shifts in spending. there is also economic uncertainty as well as the uncertainty at tiktok, so there are different moving parts that could change how advertisers spend their budgets.

>> when you talk of advertisers coming back, have the main ones come back? has disney come back? >> we do not have an exact list. we know many of the big tech advertisers have returned. there were reports that apple has returned. there is evidence to show many of these companies are returning to spend, though not at the same levels as previously. caroline: i like how you brought in tiktok as well. would x benefit from tiktok being taken off the scene? >> the biggest beneficiaries of tiktok disappearing would be meta and youtube. they are the most natural fits. in january, we released analysis

that showed about 50% of reallocated tiktok ad dollars in the u.s. would go to meta and youtube. there would be spending to other platforms, but mostly to other social platforms like snapchat and even pinterest. as well as other players, competitors to tiktok in other industries, thinking about retail media like amazon or streaming services because tiktok touches so many aspects of our digital lives. caroline: the competitors to x, are they thriving or not? >> there has been a resurgence in growth in some of these competitors. we saw after the election that threads in blue skies saw new users coming onto the platform and that seems to be sticking.

even as x has lost users, those platforms remain smaller. caroline: coming up, crypto legislation moving through d.c.. this is bloomberg technology. ♪

caroline: welcome back to bloomberg technology. we are selling some of the moves we have seen in the last couple days's after monday stellar charge higher. really it is the magnificent seven that dug lower, up by 1.8% on this particular index and it

is the likes of nvidia which are off by a significant amount. we know the bulls remain in this name but we are currently off by almost 4%. and a dramatically good day monday pushing up more than 9%, 10%. we got worries about european sales. rivian off by .3%. there is interesting news of a spin off and it comes to smaller forms of transport. let's get to that work with david welch. i want to go to the news on rivian in particular. we understand they are investing up to $100 million. this is about small mobility. where is there a gap in the market for that? >> there is a market for smaller urban vehicles that do not need to go as far on a charge as

bigger vehicles. one of the issues rivian hats is right now they are selling expensive pickup trucks and suvs that happen to be electric and people like them. they are a unique style compared to what ford and general motors cell, but still pricey and it is tough for them to get scale to drive costs down just selling those vehicles. they have other models coming that would have more mass appeal, but something like this -- you are selling more vehicles and keeping costs down, which is how these companies are going to get profitability. they have to get costs down and you cannot sell it -- do it selling 50,000 trucks and suvs. caroline: it is rivian and a vc firm who will help finance this. the competition does seem fierce .

globally, all eyes on more efficient and cheaper models. compare what is happening with tesla and why pressure is continuing on the stock. >> tesla is an interesting case. is it political pressure because of his closeness to donald? that is probably true. more than that there is not data that tells us how much of that is true, but ev sales were flattening even before he became essentially part of the trump administration, so they were already using growth rates -- losing growth rates as a company. they have good products. that includes tesla. there is political pressure in europe causing a boost in sales and they are changing to the model y. that always cuts sales for any

car company. then the thing you just mentioned, competition. in europe, we have all the european automakers coming on pretty strong. in the u.s., you have kia selling a lot of new product. general motors is wrapping up production, so there's competition that was not here three years ago that tesla has to deal with and the model y is being changed over but this is a product line that is pretty stale with the exception of cybertruck and cybertruck is too quirky to sell in big numbers. caroline: let's go to another key stock, gamestop, having a stellar day, up since june of last year as bitcoin is off by 1.25%. game stock -- gamestop is up because they announced they are

going to move forward with having bitcoin on their balance sheet cannot get another company doing it. many others have done it. bitcoin is currently off by 1.25%, but this comes in the context of a major crypto summit underway in d.c. and legislation regarding digital assets is making its way through congress. 20 us now is the blockchain association ceo. i want to start on the idea of companies storing bitcoin or other crypto on the balance sheet. is that because regulation is creeping through? >> i think we have had such progress in washington that it is clear across institutions and traditional companies and those who are managing treasuries that digital assets are something they should think about.

i was up in new york last week at the digital assets summit and the amount of enthusiasm and excitement among institutional investors was great and i think that is extending to companies so i think it is smart, something a lot companies are looking at and we will see more announcements like this. >> it is smart because gamestop gets a pop in its stock when its revenues are down. tell us fundamentally how this helps businesses and how you see regulation supporting crypto now. >> i think the regulatory clarity is key. this is something the industry has been talking about for many years. we are seeing progress. we have seen actions taken to undo damaging policies put in place and we are seeing congress

do a lot of work to establish and put legislation in place that we need. it seems like every week in washington we have another vote on crypto. two weeks ago we had the senate banking committee have a vote on stablecoin legislation. we are expecting a house committee to do the same next week. we have the final vote to undo the tax policy that president biden put out at the last days of his term, going to be repealed by congress this week. there is still a lot of work to do, but i think we have the white house and leaders in the house and senate all communicating, all talking together, and they all want to get this done. it is a cornerstone of the administration and congress's priorities for making the u.s. more competitive and modern, so i think that does give companies

comfort that they can look at these assets as something that will be welcome and that they need to think about going forward. caroline: what is not being tackled that you would like to see tackled? >> they are really covering the list. the first step is undoing policies in the past. we have seen the sec dismissed litigation across the board and in the industry. we are seeing congress fix this irs rule enacted late in the administration and we are seeing agencies undo some of the letters and interpretive guidance they had put in place that made it difficult for crypto to integrate with the banking world and we need a stablecoin framework. we need a market structure

framework but there is also interesting things going on with tokenization. the sec announced yesterday a series of roundtables on various topics and trying to figure out what they have that they can do to help make this space more competitive, so we are excited. i think everyone in the crypto policy space feels ready for a vacation, but we have a lot of work to get done and potentially a short time to do it. once it is in place, i think it will be lasting and something that will allow the u.s. to be competitive for decades to come. caroline: is enough being done to get rid of the tarnishing effect? when you have -- gamestop getting in on bitcoin and some sense -- it is not factual, but there is a sense from those out there that people are benefiting

from crypto doing well at the administration. is enough being done to tackle that? >> i think that is an interesting question. david sachs took steps that were appropriate by selling off his positions and investments. that is a smart thing to do. i do think there are folks within the trump family that are interested in this space. this is important work we need to get done and get across the finish line and i think there are a lot of policymakers across the agencies that are committed to doing this and this is something that should benefit everyone who wants to participate in the ecosystem, including corporations and institutional investors so i think this is a space that is only going to grow and we will see more innovation built on top

of these blockchain networks. caroline: always great to have you. coming up, mercury hits a $3.5 billion valuation. we will speak with the ceo next. this is bloomberg technology. ♪ i earned my degree online at southern new hampshire university. it's possible to raise a family, to pursue other things and still further your education.

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caroline: you are looking at a live shot of the principal room. two into night for a new episode of the david rubenstein show. this is bloomberg. mercury has announced funding. the latest round is helping push company valuation to $3.5 billion. here to discuss is the mercury ceo.

i understand there are new products coming along. >> we have been profitable for the last 10 quarters. we did 500 million dollars in revenue last year so we are seeing this money as helping us invest in new products were also giving us a cushion for future acquisitions and things like that. last year, we launched new products, including accounts payable mercury personal. we are expanding from serving just businesses to consumers as well. >> where would you want to do inorganic as well as organic growth? >> we will see. we made an acquisition last year in the accounting space but we have not announced anything else. the interesting thing about banking is there are a lot of places to expand so we've expanded from startups to e-commerce and professional services as well as new

products. we want to reimagine banking so it is not just an account that does not do anything. we want to help with finances and help them run their company in the easiest way possible. >> it is reported sequoia capital was impressed by the way you handled the influx of demand. and certainly mercury was everywhere. that amount appliance deposits that came in, how have you managed to build from that? >> we had to billion dollars basically in that one week period. we have grown since then, so last year we grew transaction volume. we are bigger than even two years ago. caroline: you are not technically a bank, so how are you thinking about broadening

relationships with underlying banks that give you ability to help with these products? how are we going to say this is what mercury is in five years? >> we think about reimagining banking someone of the benefits is we work with a network so we provide everyone insurance so the majority of the deposits we have our fdic insured and we work with two main partner banks right now and we kind of think if there was a software company that built great software for banking, what would it be? that is only think about broadening out the suite and redefining banking. banking should not just be a bank account. it should be more. it will be weird to do businesses -- invoices not just from a bank account. caroline: you are using funds to

help give liquidity to your workforce. but many will be thinking, where is the next step? in 10 years, will mercury be publicly listed? will you be bought by someone? will you have bought others? >> want to run this company for the next 20 years or there is a lot we can and will do. i think being public along the way as part of the journey. we only launched six years ago, so i still think of us as a young company but it is important for employees to have access to some liquidity rather than waiting another 10 years until we go public so we wanted to provide that as an option. i'm sure lots of them want to buy houses or do nice things for themselves and i think as we are profitable and makes sense to make that available to our employees.

>> great speaking with you. scientists are laying the foundation for a field that may blur the lines between the biological and synthetic. it is called bio computing. hume on -- human neurons are merged with chips. could the living human brain cells in-depth powering ai? the latest bloomberg original series takes a deep dive into this. >> this is a simulation of pong, where you use this paddle to stop this ball from getting past you. it is a pretty simple game for humans to learn and recently computers can learn it too. but today it has a new kind of player, not a computer or human. a cluster of living human brain cells can play.

researchers in a lab taught neurons to play this videogame. but it is more than just a game. some believe merging elegy with computing could upend our approach to artificial intelligence. ai is a massive, often volatile global market, with people looking all over for a competitive edge. in 2020 five, private sector companies teamed up to invest in ai infrastructure. but what if the building blocks of the infrastructure include living human brain cells with promises and challenges of our own biology? we are kind of on our way. >> i love thinking about the hollywood stuff. are we really computers? our computers really human? >> life has been focused on how to elicit intelligence from

brain cells in a dish. caroline: tune in tomorrow for the second episode of primer. coming up, the atlantic releases the transcript of the signal group chat where u.s. officials discussed military strikes on yemen. we will take a look. this is bloomberg technology. ♪

caroline: u.s. officials are not permitted to use the messaging app signal to share sensitive information, yet the atlantic has released a near complete transcript of a signal chat where top u.s. officials discuss lee terry plans. let's bring in my shepherd for the technology angle of all of this. -- mike sheppard for the technology angle of all of this. we are getting more information on what was said in the conversation. >> this is an episode that is not going away, much to the trump administration's chagrin. they are seeing this carry on three days and in many ways it is a jaw-dropping blunder according to many lawmakers on capitol hill who really pushed hard back at the top intelligence officials in the

u.s. government who were appearing before them for a hearing. the question is why were these officials using this app to discuss something so sensitive? we can see from the full transcript that this was sensitive and potentially classified information about details of strikes that were to be waged against rebels in yemen. this raises questions about operational hygiene and security hygiene put forth by senators including the top democrat on the intelligence committee. caroline: many intelligent people and experts were attending. go back to signal because this all came to light because the wrong person was in the chat. but why would it not be appropriate to be used in this sensitive manner? what is the worst >> that can happen? >>we are getting an example.

let's say was not jeffrey goldberg of the atlantic, someone widely known across town and who i worked with many years ago. let's say it was instead somebody from the houthi side who saw those plans and could alert the rebels about what might be coming. it could also be another u.s. adversary that had a window into operational planning. if they are using signal for this, what else are they using it for? there is a reason why beyond just adding the wrong person to the chat, which may be we are all guilty of doing at one time or another, but there is a risk that your phone could be infected with spyware or compromised in a fashion that would allow observation of message traffic and information and this is why the defense department and u.s. intelligence agencies require sensitive conversations to be carried internally on secured networks

in secured spaces. caroline: that does it for this edition of bloomberg technology. you do not want to forget to check out our podcast on the terminal and online. this is bloomberg technology. ♪ only the servicenow platform connects every corner of your business, putting ai agents to work for people. like secret agents? no, more like autonomous minions that you control. to do what? well, jim's agents resolve simple customer issues. and patty's agents flag network problems. - proactively. - yup. i'm lovin' my agents. wait, you all have agents? oh yeah. and on the servicenow platform, everyone's agents work together so everything works better. can i have agents? maybe. ♪♪

>> welcome to "bloomberg markets." i'm scarlet fu. we're looking at declines of s&p equities. it was pretty short-lived. blame it on big tech. all seven of the mag seven members are lower. yields also moving up, the 10 year yield gaining almost three basis points. and a quick mention of the st