Crypto News: Crazy videos

Good morning. Donald Trump downplays the national security risk from China spying on "young kids watching crazy videos." Elon Musk and Sam Altman clash (again) over AI spending. And the maker of Jimi Hendrix's favorite amp is changing hands. Listen to the day's top stories.

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Donald Trump isn't so worried any more about the national security threat posed by TikTok, saying all products made in China could carry a spying risk. "Is it that important for China to be spying on young people, on young kids, watching crazy videos?" he told Fox News. Though he's not showing up in person, the president is the talk of the town at the World Economic Forum in Davos, Switzerland, where the most coveted seats will be in the plenary today when Trump delivers a remote address to attendees.

Trump Looms Large Over Davos

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Elon Musk and Sam Altman clashed over Trump's promise of hundreds of billions of dollars for AI infrastructure, with Musk questioning whether companies such as SoftBank can follow through on their spending promises. Altman disputed that and said Musk was upset because the Stargate pact could rival the billionaire's own AI efforts. Bloomberg's Odd Lots podcast examines what's actually happening at the corporate level.

House Republicans are in talks over raising the cap for state and local tax deductions after winning pledges from Trump and congressional leaders to include the measure in a must-pass tax bill this year. Lawmakers are hoping to come up with a figure for the deduction cap in the coming weeks, with one GOP House representative saying a hike to $20,000 wouldn't be enough.

Marco Rubio criticized Beijing's "dangerous and destabilizing" actions in the South China Sea, as he discussed the contested waterway with counterparts from the Philippines and Indonesia. The newly confirmed secretary of state plans to travel to Panama as soon as next week, a person familiar said, underscoring Trump's seriousness about taking back that waterway.

The logos of Bitcoin, Ethereum, and Tether outside a cryptocurrency exchange in Turkey. Photographer: David Lombeida/Bloomberg

Ethereum has struggled to keep pace with other cryptocurrencies since Trump's election victory. Now its founder Vitalik Buterin is throwing his weight behind Etherealize, a startup that hopes to market Ether as the best cryptocurrency for Wall Street.

Deep Dive: The Southern Border

Photographer: Stefani Reynolds/Bloomberg

The Pentagon is sending 1,500 troops to the southwest border, and several military transport aircraft are already on their way to help deport more than 5,000 migrants put in detention by the Biden administration, defense officials said.

The new deployments come just two days after Trump issued a national emergency declaration ordering the military to boost border control.
The crackdown on immigration is facing another lawsuit, this time over expanding fast-track deportation for people who can't prove their long-term residency in the country.
And for a better understanding of the issues, read our QuickTakes on how sanctuary cities are preparing for another showdown and what the mass deportation orders mean for immigrants.

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Members of the Mexican Navy guard and Joaquin Guzman Loera, alias "El Chapo," in Mexico City in 2014. Photographer: David de la Paz/Xinhua via Getty Images

Designating drug cartels as terrorists—as Trump proposed—would add significant collateral risks, Juan Pablo Spinetto writes. Anyone who has contacts with narcos, knowingly or not, could be accused of collaborating with terrorists, creating a phenomenal challenge for corporate compliance systems, particularly for financial institutions.

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Before You Go

Jimi Hendrix in Stockholm in 1967. Source: Svenska Dagbladet/AFP/Getty Images

Turn it up a notch. The company behind the favored guitar amp of musicians from Jimi Hendrix to Lana del Rey is heading to private equity. HongShan Capital is nearing a deal to acquire Stockholm-based Marshall Group in a transaction worth about $1.1 billion, people familiar said.

A Couple More