US AI Action Plan Targets Rapid Data Center Growth | Bloomberg Tech 7/23/2025

Key Concepts

• Tech Earnings: Focus on earnings reports from companies like Texas Instruments (TI), AT&T, Alphabet (Google), and Tesla.
• Tariffs: The impact of global tariffs on company performance, particularly for TI.
• AI (Artificial Intelligence): The White House AI Action Plan, AI's impact on Google's business (Gemini model), and the AI race between the U.S. and China.
• Regulatory Overhang: Potential regulatory challenges facing Alphabet, including antitrust concerns and potential divestitures.
• Robotaxi: Tesla's robotaxi plans and their importance to the company's valuation.
• Cybersecurity: Microsoft SharePoint hack affecting numerous organizations, including the U.S. National Nuclear Security Administration.
• AppleCare: Apple's new device insurance plan covering multiple devices.
• Open Source AI: The importance of open-source AI for innovation and U.S. leadership in AI.
• Compliance: Vanta's role in helping businesses comply with data storage regulations.

Texas Instruments (TI) Earnings

• Stock Drop: TI experienced its worst stock fall since 2008, down 12.3%.
• Tariff Impact: The company's inability to clearly articulate the impact of tariffs on its business was a major concern for analysts and investors.
• Inventory Concerns: TI couldn't identify which customers were pulling inventory forward, raising concerns about real demand versus inventory buildup.
• Automotive Sector: TI indicated that the automotive sector, a key growth area for the chip industry, hasn't improved as expected, with potential pull-forward in China.
• Analyst Perspective: Analysts are concerned about how much of TI's growth is real and sustainable.

AT&T Earnings

• Flat Performance: AT&T's stock remained flat after reiterating a profit forecast that fell short of estimates.
• Subscriber Growth: The company added 401,000 wireless phone subscribers due to increased perks and incentives.
• Inflated Expectations: AT&T became a victim of inflated Wall Street expectations after Verizon posted strong numbers and updated its full-year forecast.
• Investment in Fiber: AT&T is committed to investing in its fiber network, with plans to invest an extra billion dollars per year.
• Tax Savings: The company is looking at tax savings from the "big beautiful bill" and considering how to spend them, including contributions to the employee pension plan.

Alphabet (Google) Earnings Preview

• Strong Fundamentals: Expected to print upside numbers due to strong checks through the quarter.
• Regulatory Concerns: The upcoming ruling in the antitrust case is a significant overhang, creating anxiety among investors.
• AI Competition: While Google is expected to position AI as a positive for its business, the competitive threat from ChatGPT, Perplexity, and other AI companies remains a concern.
• Gemini Model: The integration of the Gemini model across Google's businesses is crucial, particularly in AI Overviews.
• Value Distribution: There are concerns about the equitable distribution of value from AI, with the potential for value to accrue to only a few companies.
• Potential Divestitures: Possible outcomes of the antitrust case include restrictions on placement on default search, opening up data to competitors, and the divestiture of Chrome.

White House AI Action Plan

• Focus on Infrastructure: The plan emphasizes the rapid buildout of data centers and the energy needed to power them.
• American Tech Stack: A key pillar is building AI on the American tech stack.
• Lighter Touch Regulation: The administration aims for a lighter touch in AI regulation compared to Europe.
• Export Promotion: The plan includes steps to enhance the deployment and export of American technology, including chips and software.
• Open Source Emphasis: The plan encourages open-source and open-weight AI to foster innovation.
• Trust and Adoption: The plan recognizes that slow adoption due to a lack of trust is a bottleneck to harnessing AI's potential.
• Moonshot Moment: The AI Action Plan is seen as a moonshot moment for the U.S. to continue leading in AI.

Microsoft SharePoint Hack

• Breach Scope: Approximately 400 entities, including the U.S. National Nuclear Security Administration, have been breached due to a Microsoft SharePoint hack.
• Information Stolen: Hackers have obtained sign-in credentials, usernames, passwords, and other information used for secure systems.
• Limited Classified Information: No sensitive or classified information was taken from the nuclear agency.
• Chinese State-Backed Groups: At least two Chinese state-backed hacking groups are behind some of the attacks.
• Vulnerable Servers: Thousands of servers globally were made vulnerable by the attack.
• Microsoft's Response: Microsoft rolled out patches to address the vulnerability, but security researchers emphasize the need to search for and understand if systems were compromised.

AppleCare Update

• New Subscription Plan: Apple is launching a new $20/month AppleCare plan covering up to three devices.
• Coverage: The plan protects against spills, accidents, and cracked screens, and includes 24/7 I.T. help and battery replacements.
• Subscription Play: This is a major subscription play for Apple, aiming to increase revenue from its services division.
• Diagnostic Testing: To insure older devices, customers need to undergo diagnostic testing to ensure the devices are in good condition.

Tesla Earnings Preview

• Revenue Decline: Expected to report the biggest drop in revenue in a decade.
• Robotaxi Focus: Musk is likely to emphasize the robotaxi messaging and AI story to distract from the company's fundamental challenges.
• Car Business Shrinking: The car business is not growing and is actually shrinking substantially.
• Regulatory Credit Revenue: There are concerns about the future of regulatory credit revenue due to changes in fuel economy standards and EPA regulations.
• Future Bets: A significant portion of Tesla's valuation is based on its future bets, particularly robotaxis.
• Musk's Focus: Investors are concerned about Musk's focus on Tesla given his involvement with other companies and potential political activities.

Vanta Funding Round

• Series D Funding: Vanta raised $150 million in its Series D round, raising its valuation to over $4 billion.
• Compliance Startup: Vanta helps businesses comply with rules and regulations around storing customer data.
• AI Agents: Vanta launched AI agents earlier this year to automate manual security compliance workflows.
• Government Expansion: Vanta is looking to expand its services to governments and government agencies.
• Talent Acquisition: Talent acquisition, particularly in AI and government-related skills, is a key focus for Vanta.

IBM Earnings Preview

• Software and Services: IBM has been focused on software and services, and investors are starting to buy into this idea.
• Software Growth: The software picture is the real star, led by the acquisition of Red Hat.
• Consulting Business: IBM has booked a lot of business in consulting for Gen AI products.
• Global Trade Issues: Global trade issues and concerns about consultancy spending are potential headwinds.

Conclusion

The tech sector is currently navigating a complex landscape of earnings reports, regulatory challenges, and emerging technologies. Companies like Texas Instruments are grappling with the impact of tariffs, while AT&T is focused on investing in its fiber network. Alphabet faces antitrust concerns and competition in the AI space, while Tesla is betting on robotaxis to drive future growth. The White House AI Action Plan aims to promote U.S. leadership in AI through infrastructure development, deregulation, and open-source initiatives. Cybersecurity remains a critical concern, as highlighted by the Microsoft SharePoint hack. Apple is expanding its services offerings with a new AppleCare subscription plan, and companies like Vanta are helping businesses navigate the complexities of data compliance. Overall, the tech industry is characterized by both opportunities and challenges as it adapts to a rapidly changing global environment.