Anthropic Gets a Warning, SpaceX Shares Fall on Fourth Day

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up. Anthropic gets a warning from the US. Commerce Secretary saying it needs government permission to grant foreign nationals access to its most advanced AI models. Plus, after three days of soaring, SpaceX shares come back down to earth and drop for the first time in the company's fourth trading day. And Bloomberg reports Apple's upcoming camera-equipped AirPods will launch in late 2027 as part of a flurry of new releases. There is a lot going on in the world of technology, and that's playing out in equity markets. The NASDAQ 100 has seen a lot of churn and chop. We're up modestly a few tenths of a percent. Chip stocks are rebounding, but we had a really big drop in yesterday's session. But remember, as an index, as a bucket, chip stocks are up like 90% year today. And SpaceX, that's a pretty reasonable pullback. Down to $193 per share, down 4%, but had added $930 billion of market cap in the first three days of its life as a public company. Let's get to the new stories and an extraordinary escalation in Washington's conflict with Anthropic. Bloomberg has obtained a copy of the letter from Commerce Secretary Howard Lutnick dated last Friday, warning that Anthropic faces severe civil and criminal penalties if it grants foreign nationals access to its most advanced AI models. Bloomberg's editor in DC, Mike Sheppard, is with us for more. So what did we learn from the letter? Let's start there.

**Mike Sheppard** (1:53)
Well, one of the things we actually didn't learn, Ed, was the rationale. What was the underlying security concern that drove Howard Lutnick and the US government to take such a drastic step as to order and impose export controls on shipments and sharing of this sensitive technology? But what we did learn, Ed, was this, that the government is using authorities that are typically reserved for dual use technology, that is, products that could be applied for both civilian and military purposes. And the government is invoking these authorities in a way to try to prevent foreign nationals, perhaps, from leaking either intentionally or unintentionally these wares, these products, the top two AI models from Anthropic to foreign adversaries of the US. And they are preparing to impose these export controls and have them in place until further notice. And they're warning, Ed, of criminal penalties and civil penalties if Anthropic fails to comply.

**Ed Ludlow** (2:52)
Shep, just very quickly, let's recap the reporting of the show yesterday.
Technical staff of Anthropic went to DC. They met with the administration. What do we know?

**Mike Sheppard** (3:03)
Well, we haven't seen any further signs of progress in the negotiations between the two sides.
We do, however, have today at the G7 Summit in Evian, Dario Amadei, the Anthropic CEO, and President Donald Trump in the same room for an AI lunch hosted by French President Emmanuel Macron. Now, at the lunch, the two men did not sit anywhere near each other, and it's unclear whether they had any interactions or sidebars. But after his bilateral meeting with Indian Prime Minister Narendra Modi, President Donald Trump was asked, Well, how are things going at the Anthropic? And all he could say was going fine. We may hear more from the president on this, but clearly it's something that's on the mind of G7 leaders. And Macron himself is pushing this idea of trusted partners for sensitive technologies like Anthropic's AI models, in which these partners, allied countries, would be vetted by security authority so that they too could perhaps regain access to sensitive tech like these two models.

**Ed Ludlow** (4:03)
Bloomberg's Mike Sheppard, thank you very much. I want to go deeper on that story. The G7 is underway in Evian, France this week. And beyond geopolitical and economic debates, AI is in the spotlight. The chief executives of OpenAI, Anthropic and Google, all on hand joining world leaders to discuss the global future of AI. The conversation comes as the US government indicates its willingness to use emergency powers, forcing private developers into compliance over national security threats. The President of the United States also in Evian, we expect to hear from him today, Bloomberg's Kayleigh Lyons, co-host of Balance of Powers with us. Such an interesting dynamic, right? Power players, world leaders, AI leaders.
Recap.

**Kayleigh Lyons** (4:47)
Yeah, well, and Mike spoke to some of this incredibly well, Ed. Basically, what we have here is countries who are all calling for a regulatory regime around AI. The German Chancellor Friedrich Merckx talked about the need for an intensive discussion around that, while also saying that all countries need to have access to this technology. He is admitting, Friedrich Merckx did, that Europe needs to play catch up. And that's really what's at issue here, as we consider Anthropic and these export controls being slapped on in particular, is that Europe doesn't have its own AI juggernaut, such as those in the United States. This is somewhere, and we heard President Trump speak to this earlier as well, that the United States is leading in, and Europe wants to be able to trust that it can access the technology, thus the push to have Europe considered some of these trusted partners who would be able to access this technology, versus adversaries like China, for example, when we're considering things like Mythos and Fable 5 So this is obviously an active discussion. We could hear more from President Trump about this, but it also feeds into another issue that was raised at the G7 Summit, and as we consider the technology questions that leaders are grappling with, it is also inputs into certain technologies like rare earths and permanent magnets. We actually saw the G7 countries agreeing today to cap their imported supply from China to 60% of rare earths and permanent magnets by the year 2030 The ultimate goal, as soon as possible, is to get those imports down to 50%, and they're going to, by the end of this year, have a separate discussion around other critical minerals. But the idea is reducing the dependence on China, which has shown a willingness to restrict exports of this market in which they are dominant, not just in terms of mining these rare earths, but also in the refining of them. This is going to be a really ambitious target for these countries to meet, Ed, is they have to work on their own supply chains. Even officials at the G7 are admitting that may mean imposing quotas on certain industries, like defense, for example. But this is actually one of the big tangible items that is emerging from the G7 summit, the 60% cap on rare earths from China again by 2030