Trump–Xi Summit, Space Data Center Debate, Inflation Up | Diet TBPN

The big news this week and I I'm sure what uh you know everyone will be focused on is of course on the cover of the Wall Street Journal. That's the Trump Cunping Summit that's happening in Beijing. Uh Trump and Cunping Vifer wins at summit. They're duking it out. And uh Trump brought they both brought a big crew with them a team. Uh yeah, Trump brought >> geopolitics >> a couple couple >> sport couple political people that we won't even care about, but the business leaders are what is particularly interesting. So we got Elon Musk from Tesla, Tim Cook from Apple, Jensen from Nvidia, Kelly Ortberg from Boeing. A little flex there because Boeing has been able to maintain the lead in manufacturing large planes for a very long time. Uh DJI has not been able to scale up and make a 747. What's going on over there? David Solomon from Goldman Sachs, Steven Schwarzman from Blackstone, Larry Frink from Black Rockck, Jane Fraser from City, and Dena Pal McCormack from Meta. Uh, so we should read through the stakes of the Trump sean ping summit in the Wall Street Journal from the Wall Street Journal. Let's get into the more important stuff, which is >> do you think Jensen was always coming on the trip? Right. There's been some speculation. He got on uh he got on the plane in Alaska. Oh yeah. >> Was that just the most convenient place for him to get on or was he a late addition? >> I don't know. Why would he have been a late edition? I I don't know. It seems >> because there was there was reporting earlier this week. >> He runs the largest company in the in America. >> I know. But but there had been statements made from what I saw that he wasn't going. >> Yes. Well, so Trump had a truth social post that said CNBC incorrectly reported that the great Jensen Hang of Nvidia was not invited, but then he he corrected it. He said he did invite him personally. >> I don't know. These schedules move around. It's got to be really really difficult if you're the leader of the biggest company in the world to move things around and and commit to this. I don't know. >> I know. But what's more important for Jensen and his objectives? >> No, of course it's critical importance. But uh at the same time, there might have just been other moving pieces of like, okay, when can he go, where will he arrive from? Where will he get picked up from? I don't know. These things always like shift. I I don't have a good thesis. I mean, other than the fact that like that is the company that has maybe the most tension between the trade deals with China, like Apple obviously does a ton of business in China, but uh has been much less of a focus in the chip sanctions and so having Jensen there is a little bit more of a discussion point. What do you think? >> I mean, I think on China like the Nvidia stuff seems like pretty fine now, but but yeah, but Meta I think has like some conflict, right? Because I mean Manis Yeah, maybe it's like not that big of an acquisition on like market cap wise, but >> yeah. Yeah, they're blocking it. >> A lot of these things, you know, we say in the in the context of Silicon Valley, it's like a $2 billion deal or a company that's doing 40 billion in revenue and then you get over there and the stakes are like, you know, a trillion dollar oil market or like all the rare earths in the world and uh and it's your, you know, geopolitical conflict, which is obviously a much bigger deal. And so there might be more reporting that comes out about uh Jensen's goals there, what actually happened, uh how he found his way onto uh Air Force One, but that was confirmed by Elon Musk, right? He said that uh Elon Jensen and Trump were all on Air Force One together flying over. Um I certainly want wouldn't want to get there. I would want to arrive on the cool plane. Can we play the video? Trump arrives in Beijing with Elon Musk and Jensen in tow. I guess the rest of the business leaders came separately. their arrival with uh are those cheerleaders or something? I don't know what that they they seem to be waving. Oh, flags. They're waving flags. That makes sense. Well, there they go walking down the red carpet. Air Force One is truly stately. There's It's so It's so disappointing that the economics of the airline industry didn't just get bigger and bigger and so you find yourself very rarely on 747s unless you're flying across the world. uh because they do have such a presence and they're spacious inside. Uh but we we we have been ref uh you know cramped down into the 730 videos pretty much everything >> where they they give a proper tour of Air Force One or is it kind of locked down? >> I think they've done tours. I mean there are several Air Force ones I believe that are on display at presidential libraries and so you can go and tour them. There might be one at the Smithsonian. I'm not exactly sure but uh I'm pretty sure you can go walk around old ones. I wouldn't be surprised if they keep the the current spec like somewhat secretive. Uh there we go. This is very grainy footage. It looks like Oh, maybe it's just uh the middle. >> It reminds me of uh Dune. >> Dune Iraqis. That's Taiwan, though. Anyway, let's go through Jensen's pack list. He was having trouble thinking of what was he going to bring. Of course, he landed on just a ton of leather jackets. The back >> and even the sneakers I feel like are pretty iconic. Yeah, like the uniform is really starting to compound where it used to just be the jacket. Soon we will know the exact brand and specs of the of the pants as well as the shoes and uh the whole Jensen uniform will be out in full force. >> Yeah, the clothing industry doesn't want you to know this, but um wearing just just getting a few pieces of clothes that you like and then wearing them until they fall apart is incredibly underrated. Not saying that's what Jensen's doing, but it's pretty funny. Uh I I tend to wear almost the exact same thing. Yep. >> Every day. And so sometimes people on the team will come in and be like, "Oh, we're matching today." Like every day you dress like this, you will match with me. >> Yeah. That's right. That's right. Um there's obviously a personal brand benefit to adopting a uniform. We've seen it with Jensen. Steve Jobs with the black turtleneck. Palmer Lucky with the uh with the Hawaiian shirt. Big news from Anderol today. New round series. Are they running out of letters? Series H >> H series H 51 61 billion something like that. Uh fantastic progress. You adopt the uniform, you become more iconic, you become more recognizable outside of your face. And that builds your personal brand, your lore, and it helps you sort of differentiate and stand out, right? The flip side, the thing you got to watch out for is that if you are always dressed exactly the same and you never switch your wardrobe, clips of you saying something a decade ago can go viral. And if you're not, if you're aging gracefully, it will look like you said them just yesterday. And that can be a big problem if say you're an AI CEO who a decade ago was reading some sci-fi and thinking like, man, there's something to this Terminator thing. And then maybe in the past decade, you've done a lot of work. You've investigated the systems. You have a more informed position and opinion. Well, the old video of you still looks like you today. And so, uh, there might be something to leveling up the wardrobe and changing the wardrobe over time that actually creates more distance between, oh, well, clearly that was so this is indirect way of saying you want Jensen to be in a leather sort of like, you know, sort of trench coat eventually, like flowing robes. >> Well, the easiest thing to do is go bald. That's what Jeff Bezos did. If he was saying some crazy stuff back when he was building Amazon in the '90s and he's changed his opinion, it will be very evident from new clips that oh that's an old one because it's very it's very iconic his older look now his new look he looks transformed. He looks very different. >> I I don't think Justin has to go bald but he can do the the Bezos playbook which is just get like get really jacked. >> Get really jacked. >> So as he gets more jacked you'll just see Oh yeah, there's I mean he's looking like 320 lean right there. >> There you go. >> Like that must be pretty decent. 3 320 >> Jensen at 320 would be electric. Uh well, he's >> uh we have a video of the Air Force One Golden Palace. Pull it up. >> What is the Golden Palace? >> That's the >> Is that what they call the interior these days? >> The the Air Force One that was gifted by Qatar. >> Okay. And that one is never going to be in use, but going to go straight to the library, I think. Is that the idea, or is it going to get flown around? Well, let's uh let's watch the >> Presumably, it's going to be used. >> Golden Palace. really particular aesthetics here. It looks like a normal 747 on the outside. >> Looks like a yacht. >> I feel like isn't there a big uh there's a big swing in in uh fuel efficiency based on the color of the plane. If you paint your plane black cuz you think it looks cool, it will attract more heat and you will burn a lot more fuel. And so most companies go with white. Uh Spirit Airlines went yellow. I don't know if that had anything to do with their downfall, but uh you would think is there a chance is there some weird economic logic where if you paint it gold, the gold will reflect the sunlight and increase fuel efficiently the exterior is not. >> So you should wrap your plane in like a mirror like >> Yeah, maybe. But yeah, I don't know if that actually that would probably reflect the most, right? Mirrored plane. There are some silver there are some silver bombers and and jets that are in service across the United States Air Force. I can't call upon it right now. >> This really is a sky yacht >> chessboard. You think anybody's played chess on there? >> 40 chess. >> Yeah, the whole plane is actually used for 40 chess, John. >> 40 chess. Uh AI is being put to good use visualizing seizing Donald Trump. Elon Musk and Tim Cook having a beer and I guess a cigarette as well in uh in China somewhere. And then look who pulled up. If you scroll down, Jensen coming in from the back. Looking pretty good. Looking pretty good. Maybe not 320 lean, but he's certainly up there. Let's go through the Wall Street Journal's report and the ed what the editorial board had to say about the stakes of this summit. What what's actually at stake? So the United States wants stability uh but Chinese communist leader has larger ambitions says the Wall Street Journal journal's editorial board. President Trump visits visits Chinese President Cinping in Beijing on Thursday and the premeating US spin is a search for stability in quotes. Uh it's a nice idea as long as Mr. Trump doesn't think personal rapport can overcome Mr. Cinping's anti-American purposes says the Wall Street Journal. The agenda ranges from trade to technology to Iran. Uh on trade, the best outcome may be ratifying the status quo. A truce on tariffs with a promise from Beijing not to hold the world's rare earth supply hostage again. The markets, business leaders, no one wants chaos. Everyone can sort of work around a tariff plan if it's going to for a long time >> for Trump to be coming in being like, "Look guys, all I'm asking for is a little stability here." Yes. >> I just want >> stability. I want calmness. Yes. I don't I don't want any conflict. >> Yes. Didn't he famously call himself a stable genius that he stability has been part of his brand for a long time. Uh at least the one that he projects. Uh Mr. Xihinping on the other on the other hand uh China's weak economy is an incentive for him to cooperate and he'll hope to plate Mr. Trump with promises of buying more farm goods. uh we talked about this previously more aircraft and uh other things uh but Mr. Cinping has made that promise before and US farmers have never regained their lost market share in China. Rare earth's ransom offer uh the rare earth's ransom offer may be more US advanced chip exports to China. Cinping views artificial intelligence as a decisive theater in Beijing's competition with the United States and he is trailing though not by much maybe six months by most people's estimates. Uh the administration wants to talk with Beijing about AI guard rails and by all means keep the phone lines open. Uh but don't expect much from AI arms control. Uh and the best deterrent is US dominance on models and computing power. Beijing will be happy to make pronouncements about responsible stewardship and then pursue its own interests with little regard for norms or laws. Beijing is is engaging in quote industrialcale theft of American AI models. The Trump administration warned this year and don't forget the Justice Department's indictment this year of a technology executive and associates allegedly running a sophisticated operation to divert high-end chips to China. That was uh >> super micro. >> Super micro. Yeah, they were doing the the the heater. What was it? the haird dryer. Hair dryer. >> Yeah, they were putting the the fake shipping labels on there. >> Fake shipping labels. Noticeably absent from this trip are the key leaders of the top AI labs. Um I mean Elon Musk is there. Yes. And Jensen is there obviously deeply involved in AI as as are many of the other folks. Uh Dina Pal McCormack at Meta, but you don't have Demis from Google. You don't have Sundar from Google uh DeepMind. Uh you don't have Daario from Enthropic or Sam Alman from OpenAI. And each one of those leaders has their own complicated relationships with the federal government and the Trump administration. Uh so it's not shocking that they aren't there, but uh it does feel like there's a little bit of a disconnect between the conversation that's happening in Silicon Valley and the conversation that's happening on the global geopolitical stage at the highest levels. And so uh if you were looking for answers to some of the biggest questions uh posed about how super intelligence will play out in the global stage, the AI 2027 scenario, the China wakes up scenario, uh you're going to have to keep waiting because uh that's not really what this this uh this is about. It's about uh maybe a little bit of semiconductor supply chain details and export restrictions, but not answering the big questions about uh what a USChina relationship looks like in a post AGI world, a post ASI world, a post uh you know a fast takeoff scenario. >> OTP says why is Meta there at all? Good question. All Meta platform products have been banned for quite a long time. I don't think that will change, but they have this manis thing. I think it might just be to show some friendliness, some presence there. Again, I'd be shocked if there's any time between Xi and Trump that gets dedicated to Manis because like $2 billion is really a rounding error when you look at all of these other issues. >> Um but uh >> but it is a big question for both economies. Not not only can American companies acquire Chinese companies that have relocated to Singapore and have sort of moved out like how how strict will China be around maintaining talent and restricting exports of whole companies and technologies uh there even like a single sentence on it from this talk will clearly resound throughout the industry. And so uh the Venus fly trap that Cinping is setting for Mr. Trump is on Taiwan. Cinping wants veto power over arm sales from the United States to Taiwan and he is pressing for the United States to formally oppose Taiwanese independence as opposed to the current posture of not supporting it. Cinping will argue the tweak is of no great consequence to Americans and stoke uh and stroke Mr. Trump's ego that he can bring peace to one more troubled region. Yet that change would disrupt decades of US policy that for all its delicate diplomatic wording has held the peace. Taiwan is not the aggressor in the Taiwan Strait. Uh Cian Ping fiction that opposing indiv independence would indulge. Mr. Trump might may not care about Taiwan's freedom or its example that a prosperous Chinese democracy is possible. Uh but the president doesn't want a crisis on his watch which would be an economic and geopolitical catastrophe. That's 100% accurate. >> He would never want an economic geopolitical catastrophe. >> No. >> On his watch. >> Uh Cinping will be looking to see if Mr. Trump's suggests he won't defend Taiwan in the clutch. Uh Trump's diplomacy is above all personal and no one can predict what he'll do in the room. Japan and others in the region are watching with anxiety. A reminder that US support for Taipei is an interest that informs America's alliances around the world. One mistake would be not stop not stopping in Tokyo to advance Beijing in in advance of Beijing as a signal of solidarity with Japan. Trump has said he'll bring up the case of political prisoner Jimmy Lie. But Cinping won't move to release the 78-year-old publisher who was convicted of bogus charges in Hong Kong unless he believes Trump's request is more than a token gesture. Uh the US wants China's help on Iran and it would be an improvement if China at least stopped actively helping the enemy. Uh, retired Navy Rear Admiral Mark Montgomery suggested last week that Mr. Trump should ask Cunping directly if he's helping Iran with intelligence. And the Wall Street Journal goes on to say, "The larger context for the summit is that the CCP continues to be the main financier and industrial base for the world's bad actors from Russia to Iran to North Korea. The first Trump administration understood China as a strategic adversary, military, economic, and ideological. The second Trump admin is searching for detent. the and Mr. Trump is the chief dove. Uh, this has some merit if America spends the interlude diversifying its rare earth supply chain and passing a 1.5 trillion dollar defense budget to rearm says the Wall Street Journal editorial board. Anyway, >> yeah. And a lot of people are speculating that uh there's already been significant deals that have been made and that this whole thing is ceremonial because if if you bring if you make this you know huge trip and you bring all these leaders of industry and then you don't come away with some significant progress like it just feels like a even bigger. >> Uh in somewhat related news uh Anthropic has granted mythos access to three major Japanese banks. Uh, Japan's three mega banks are set to gain access to Claude Mythos, the powerful artificial intelligence model developed by US startup Anthropic as soon as the end of May. Uh, the banks MUFG Bank, Sumitomo, Mitsui Banking Corp, and Mizuo Bank were likely informed of the move by the US Treasury Secretary Scott Besson in a meeting in Japan on Tuesday. This will mark the first time that a company from the East Asian nation has been granted access to Mythos. The AI model, which can discover and exploit software security laws far faster than earlier tech, had been restricted to just 50 or so corporates and organizations worldwide, including US firms, US banks, and UK government organizations. So, this isn't the first international expansion since the UK did have access, but now Japan does. Japanese Prime Minister Sane Takichi had instructed cabinet members to ramp up efforts to find cyber security weaknesses in Japan's infrastructure and minimize risks posed by cuttingedge AI models like Mythos. Access to Mythos was likely mentioned in her meeting with Bessant on Tuesday. And so Chris Magcguire says, "Tonight the uh secretary of the Treasury is personally vetting and approving uh each company that gets access to the most advanced US AI model because the risks of the model being misused to hurt US national security are so high." Also tonight, Jensen Wong is flying on Air Force One with President Trump to Beijing to sell China the AI chips it will use to develop its own mythos level AI model as soon as possible. The administration the administration's AI policy remains inconsistent and incoherent. it is impossible to justify these two approaches simultaneously and um yeah I I'm I'm still sympathetic to the the the export control take at the same time I feel like there's a larger negotiation that's going on so I can sort of see both sides but uh the interesting question that I've been noodling on that I haven't fully gotten to the bottom of is uh you know Daario has said that uh you know the the open-source community China is maybe six months behind mythos uh and that seems to fall in line with the progress that we're seeing from all the American labs. And so the interesting question is what would the uh mythos moment look like in China because in America there was a showdown with the department of war and Daario going back and forth and a meal Michael and there was threat of a supply chain designation which it doesn't feel like ever really went anywhere uh because the business is still cooking and it's available on all the hyperscaler clouds and the model's being granted to Japan and so uh it feels like the the the administration has backed off of that. Um but it was a really tense moment and it did call into question all these all these debates around what rules and what authority should rest with the private sector versus the government. Uh and America handled it in sort of a democratic way loosely uh sort of evaluating the technology uh having the option to sort of nationalize and there's this bigger discussion around that. In China, we've seen many times where tech companies have gotten really big and it feels like the the CCP is applying pressure to the CEOs and Highflyer is uh the the company behind Deepseek is in a very unique position where the founder has an immense amount of control and uh you know no matter what you think of >> two billion of his own money in the really low dilution round. >> Yeah. And I'm pretty sure he's a solo founder who like owns probably like majority control at least majority voting control if not majority economic control and that's wildly different than anthropic where Daario had like 15 co-founders tons of dilution from uh from different uh funding rounds and you know we had talked about the SPV thing yesterday like there are lots of people on the cap table like anthropic is going the way of like a typical American company where there are lots of different stakeholders. They might be a public company soon, which means the government has more oversight as the SEC controls a lot of what they will do. And so you're in this odd scenario where you you could have a similar level of technology deployed in China from a very closely held private company that is up against a much more aggressive uh government. if deepseek is able to catch up, you know, there's some there's some some evidence that like China's on a on a slightly shallower growth trajectory, but still, you know, if you take Daario's claim of six months, even if you extend that to a year, like something is going to happen there where China is going to have their own mythos moment and what that looks like and what we learn about it, I I think is going to be dramatic and interesting. And also it's just it's just odd that like there's this backdrop of all this stuff that's happening in AI in America and then there's going to be you know talks over like you guys want to buy more apples. >> Tyler, do you have any uh any thoughts on on this? Am I directionally correct on the timeline or you know this concept? >> Like there's the graph that shows that uh open source is increasingly getting like further and further away from frontier models. But yeah, I don't It's just like so hard to to like what's actually going on in China like what Yeah. Like what what happens when the CCP starts to to have, you know, more control over a company? Like what does it actually look like? Yeah. >> In in instantiation, >> can they continue to be pro competition if they need to consolidate all of the black wells that are coming into the country into one data center, this network together that can actually train a mythos level model, >> right? That's uh that's that's a big question. >> SpaceX, Google are in talks to launch data centers in orbit. Deal between the two tech titans would give a boost to SpaceX business ahead of a historic public listing. Google is in talks for a rocket launch deal as a search giant expands its own efforts to put orbital data centers in space. Launch deal would put the two companies in partnership as they gear up to compete on orbital data centers, an unproven technology that SpaceX CEO Elon Musk has said is the next frontier for his rocket company. Google is also in discussions about a potential deal with other rocket launch companies. Um, they got to at least have a stocking horse. >> How are we not talking about blimp data centers yet? Sergey Brin has a blimp company. You know, Bezos has a rocket launch company. So, there's a very logical line from AWS to space data centers through Blue Origin, but we got to put some GPUs on the blimps. We got to start ma mass manufacturing the blimps. This could be the thing. I I mean no no there's no nimiism in the middle of the Pacific Ocean if there's just a bunch of blimp data centers floating around in a circle. >> Well, I think if you're already in the ocean, you should go down as well. You know, Atlantis map. >> Yeah. I feel like none of the ocean guys that are working on ocean robotics are thinking about like putting at the bottom of the ocean. >> Yeah. I mean, it feels easier than than uh space data center instruments. The space is free, the land is free. You don't run into the regulatory stuff. Energy a little bit tricky down there. >> Geothermal. >> Geothermal maybe. I don't know. >> No, there's there's oil and natural gas reserves on the >> oxygen there cuz how do you burn the oil in the natural gas under water? >> Big uh >> diving bell tube. Yeah. Scuba scuba tanks or something. Anyway, >> speculative technology has been at the center of SpaceX's pitch to investors ahead of its planned IPO this summer. >> Uh which is anticipated to be the largest IPO of all time. Last year, Google announced its own plans to launch prototype satellites by 2027 as part of a moonshot initiative called Project Suncatcher. It's working with another company, Planet Lab, >> to build those satellites, tiny racks of machines, and have them in satellites, test them out, and then start scaling from there, says Sundar. There's no doubt to me that a decade or so away, we'll be viewing it as a more normal way to build data centers. Uh, a little bit of an interesting timeline there. like I thought we were >> there's no doubt to me that a decade or so away will be viewing it as a more normal way. >> Yeah. >> A decade or so away. >> He's being a little cautious in his language and his timelines. But >> Google was an early investor in SpaceX and owns 6.1% of the company. >> Yeah, >> not bad. Um the other the other funny dynamic from SpaceX is deal making recently is given that the OpenAI startup fund was uh an early investor in I believe cursor's seed round. True $8 million round openai at least the startup fund will have some meaningful exposure to SpaceX. >> Yeah. SpaceX an open AAI backed company that's the way people will introduce it. OpenAI backed SpaceX IPO. >> Yeah. I thought it was it was quite interesting having that happen while the whole trial was going on. >> Everyone owns everything. Everyone has diversified into every every company at this point. Basically, we can flip over to the other financial news that's making headlines on the cover of the Wall Street Journal. Inflation accelerated 3.8% last month. Not good news. Uh Joe Weisenthal has a couple posts, but uh one is just man and he says uh the headline US April producer prices rose 6% year-over-year. The estimate was 4.8%. So obviously the closure of the straight of Hormuz is having an effect. We were talking about Diet Cokes. You would think that the uh the caffeine doesn't come from the Middle East. The the delicious caramel flavor, whatever else they put in this uh does not come from the Middle East. Aluminum actually there are smelters in the Middle East. Aluminum is in shorter supply because of the closure of the straight of Hermuz and so Diet Coke is rapidly going out of stock and so you need to load up if you're prepared. >> How many you got? Four or five pallets. >> I have not actually gotten any. I'm not stockpiling Diet Coke yet, but who knows? Maybe prices go up. That's what inflation represents and Wall Street is getting more anxious about it. So, we can read through this. Surging enterp energy prices have pushed investors inflation expectations to multi-year highs. Tuesday's hot readout on consumer prices is intensifying Wall Street's anxiety about inflation. Uh, even before the latest release of the consumer price index, inflation expectations had been climbing, a potential trouble spot in the market where stocks have largely shrugged off the US Iran conflict and the resulting energy shock. And so investors bet on inflation by buying and selling both ordinary US treasuries and those that hedge the risk of inflation called TIPS uh treasury inflation protected securities. The gaps between the yields of those two types of bonds known as the break even rate recently hit the highest level since October of 2022 according to Federal Reserve data suggesting that investors expect annual inflation to average around 2.7% over the next 5 years. Now, that's not entirely doom and gloom, but the risk here is that the AI boom, the the GDP numbers are sort of concentrated in AI capex and data centers. It's not evenly distributed. The real economy is only growing at 0.1%. While the real economy is suffering from 2.7% inflation over the next 5 years, that's a recipe for stagflation, stagnation plus inflation. Uh, a very rough thing for any economy to go through. and something that uh the market and the economy and the politicians should be focused on >> in some ways. You know, who who knows how how history will view Powell, but like he landed he landed the plane >> and then you know, we get war in the Middle East and uh and now Kevin Walsh in some ways looks like he'll have just as tough of a job >> potentially. Potentially. >> So, leave us five stars on Apple Podcast and Spotify. Sign up for the newsletter at tbn.com and we will see you tomorrow at 11 11:00 a.m. Pacific sharp. >> We love you. >> Goodbye. >> Goodbye.