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Unknown A
Some interesting news on the economic front as companies are trying to get on Donald Trump's good side. One of them is Apple. Tim Cook, who's always been the master of this. Let's put this up there on the screen, Tim. Apple, Tim. Apple. He says, as a proud American company, we're thrilled to continue to make significant investments in the US today, we are announcing a $500 billion commitment to support American innovation, advanced manufacturing and high tech job creation. In theory, it sounds amazing. In practice, it's basically a bid to avoid tariffs because if you do the math on the number of jobs that they're claiming to produce, it would be $25 million per job. So something else is going on here. And don't take it from me, take it from the Wall street guru, Andrew Ross Sorkin. Here's what he had to say.
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Unknown B
It is a bit of a down payment potentially on trying to get some relief from tariffs from the work that they're doing in China later on. So I think one of the things we're seeing here is the President and Tim Cook, for example, meeting last week, Tim Cook telling him about these plans in hopes that when in fact there is a decision finally made on what tariffs look like for goods being imported from China, that perhaps some of that gets some kind of relief, a carve out or something else. I think you're going to be seeing a lot of these kinds of announcements, I should say some of them are very real and I don't want to discount them. But for example, in, even in this $500 billion number, and it's not all new, if you will, for example, the production of films and TV shows on Apple plus is part of that number.
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Unknown B
So there's going to be a lot of different sort of squishy elements to this. And to put it in context, for example, Microsoft has committed to spend $80 billion a year on its AI development and it says it needs that as well. So there are sort of necessities. I don't, I wouldn't say that Apple is doing this simply to placate the President or anybody else. They actually do need to be spending a large part of this money. Of course, where they spend it was up for debate.
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Unknown A
Yeah. So that actually came on the anniversary of Steve Jobs, his death. And that's why it's also kind of interesting to consider this great company or what was once a great company, some might say. Have you upgraded your phone to Apple Intelligence? No. I highly recommend that you do not. It is one of the most overhyped pos products I have ever seen. Really, it's insane because I bought this phone on the promise of AI and Apple Intel. They're like, it's been designed for Apple intelligence and I'm an idiot. So I bought it. And so far what it does is it summarizes. For example, you know we have a work group chat, right?
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Unknown C
Yeah.
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Unknown A
And it will summarize those text messages, except the AI summaries are horrible and they're. And they're actually unintelligible. And so instead of being able to like scroll your notifications, you actually have to open up the text messages and then read them for yourself. So they added an extra step because their AI is so shitty. More the email suggestions. They will rank your emails and how they think it's important as opposed to the priority of delivery. In theory, great. In practice, doesn't work. You know, it's like there's so much stuff where I can't even believe they shipped it. It's insanely bad.
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Unknown C
It's also creepy because then you're like, oh, this AI is reading my emails and my group chats and whatever. And we know the way that they ingest that and feed it into their.
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Unknown A
LLM so maybe one day it'll be good. I just needed to take this opportunity to dunk on Apple, which is so bad. Marquis Brownlee rule, which is never buy a product in the future. Promise of he's totally vindicated. I'm the sucker. So let me just put that out there. The point actually gets to the technology companies which we wanted to focus on, where they're trying to both juice their valuations and justify their current stock price and also deal with the current administration. So Apple, that's why we wanted to lead with it. But you have to also take a look here at Microsoft. Let's take a look at this where Microsoft just yesterday actually quote, reiterated its Plan to invest 80 billion in AI but may adjust our infrastructure in some areas. And so what does that mean? It means that they have canceled data center leases, which is actually a huge deal because not only did Microsoft shares fall on the news, but what it showed is that they are trying to recalibrate both their AI spend.
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Unknown A
Perhaps in reaction to deep seek, I don't know, maybe reaction to this Future partnership with ChatGPT Something. But a huge part of their current enterprise value is the hope of this big AI dream paying off for their customers. And kind of a nightmare scenario is oh, actually there was a little bit of hype around all of this which is happening and that is propping up a massive part of the overall U.S. economy. And when we get, we'll move on a little bit to Starbucks. But the point is that if you look elsewhere at the non tech sectors, things are not going so great right now. So we are on the precipice of a very shaky situation. We covered it yesterday with the whole Warren Buffett situation.
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Unknown C
Yeah. And just to go back briefly to Apple, you shouldn't believe any of these companies like investment announcements until they actually happen. We've just seen far too many of the big problems of Foxconn in Wisconsin, which never amounted to anything. There was a big Trump promise, Remember the like, don't sell your homes, don't leave the Youngstown area over the Lordstown auto plant. That never came to fruition. So, you know, I think for, for like Tim Cook is smart here. I'm so close to calling him Tim Apple every time. He probably has that in my head. But in any case, Tim Cook is playing it smart here in terms of the politics because Trump mostly just wants the announcement. Like, he doesn't care to like follow up and make sure you did the thing that you're gonna say that you said you were gonna do. He just wants to be able to claim, like, look at these companies investing in America, coming back to America, creating all these jobs, et cetera, et cetera.
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Unknown C
And we've seen the way that all of these Silicon Valley, many of these Silicon Valley Valley billionaire types have been just blatantly sucking up to Trump because they are worried about the way that he'll use the federal government to block whatever deals, mergers, et cetera, put tariffs on them. Apple, the tariffs thing is super real for them in particular. And so they're trying to curry favor however they possibly can. And this is part of that. And I don't have any doubt that they're probably invest some money and there'll be some jobs or whatever, but I just don't believe any corporate PR hype until it actually comes to fruition. With the Microsoft thing, you know, there's a lot of pieces of that that are important. There's a reason they freaked out when this analyst put out the information that they had canceled some of their datacenter leases because exactly as Sagar was saying, like, this has been so central to the valuations that are justified with these tech companies and so central to the economy, especially central to the stock index, that any pullback in that is a really troubling sign.
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Unknown C
Microsoft has the partnership with open AI, so this, you know, is significant. They've been kind of, Sam Altman has been kind of at war with Microsoft in pushing for more spend on these data centers because his analysis has been that's been the way to win the AI game is just by like throwing as much money as you possibly can at these massive data centers. Deep Seek may have changed some of the calculus on that. They also were involved in the big Stargate investment announcement from Trump as well. So there's a lot of things to keep your eye on here and you know, a reason why this was a big deal in the business world when this analyst revealed that they were pulling back on their data center.
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Unknown A
Yeah, I mean it's very worrisome. And let's go to the next part because this is what I was talking about earlier. Starbucks actually just laid off 1100 corporate employees. It's one of the largest cuts in Starbucks history at the corporate level. And they have currently 16,000 corporate support employees worldwide. But that includes employees who aren't impacted. So what this tells us is that there is some trouble like in the higher levels at the corporate level of some of these consumer facing retail companies. And I think it's interesting for a variety of reasons, but the main one is that there are other non technology companies which are all showing signs of cutting and or financial precarity. So what they list here is you have Starbucks, you have Southwest Airlines last week said it would actually reduce 15% of its corporate workforce. The tire maker Bridgestone actually just closed a plant, laid off 700 workers there.
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Unknown A
So looking outside of technology, there's signs of both the Federal Reserve's monetary policy but also of just consumer pullback which we have seen broadly with consumer sentiment and more. And it's worrisome when you put that all together because all you would need is just like one tech stock or one part of the sector just go off of a cliff and it could drag down everything else. And it's not like the Federal Reserve could catch up in time if any of that were to happen. So you could have a stock market crash. You could still have high interest rates, you could have high unemployment. It's really just, it's a disaster all the way around.
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Unknown C
Yeah.
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Unknown A
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Unknown C
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Unknown A
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