WEBVTT - Chip Stocks Fall on Possible China Curbs; NY Skies Set to Darken Again

0:00:02.520 --> 0:00:03.079
<v Speaker 1>Good morning.

0:00:03.080 --> 0:00:05.920
<v Speaker 2>I'm Nathan Hager and I'm Karen Moscow. Here are the

0:00:05.960 --> 0:00:07.440
<v Speaker 2>stories we're following today.

0:00:07.680 --> 0:00:10.239
<v Speaker 3>Karen, we begin with a selloff in chip stocks. In

0:00:10.400 --> 0:00:13.159
<v Speaker 3>Vidia is leading the declines, down more than four and

0:00:13.200 --> 0:00:16.040
<v Speaker 3>a half percent in early trading. It all comes after

0:00:16.040 --> 0:00:19.599
<v Speaker 3>a Wall Street Journal report saying Washington could soon close

0:00:19.680 --> 0:00:22.759
<v Speaker 3>loopholes in the sale of powerful chips to China.

0:00:22.920 --> 0:00:25.040
<v Speaker 4>We get details from Bloomberg's Doug Prisner.

0:00:25.280 --> 0:00:28.040
<v Speaker 5>The chips are those used to train AI models, and

0:00:28.080 --> 0:00:31.720
<v Speaker 5>the restrictions are aimed at containing China's technological rise, but

0:00:31.800 --> 0:00:34.800
<v Speaker 5>the move would clearly dent sales, and Vidia gets nearly

0:00:34.840 --> 0:00:37.479
<v Speaker 5>twenty percent of its revenue from China. Its chips are

0:00:37.560 --> 0:00:41.080
<v Speaker 5>vital to the development of generative AI models such as

0:00:41.159 --> 0:00:45.159
<v Speaker 5>chat GPT. This year and Vidia produced less capable chips

0:00:45.240 --> 0:00:48.600
<v Speaker 5>below thresholds requiring a license from the Commerce Department to

0:00:48.680 --> 0:00:52.559
<v Speaker 5>export to China or other countries of concern. But Washington

0:00:52.640 --> 0:00:54.680
<v Speaker 5>is now weighing action as soon as next month to

0:00:54.760 --> 0:00:58.720
<v Speaker 5>expand the curbs to include those lower powered semiconductors. In

0:00:58.800 --> 0:01:00.720
<v Speaker 5>New York, I'm Doug Krisnerberg Daybreak.

0:01:00.800 --> 0:01:03.320
<v Speaker 3>Okay, Doug, thanks, and checking some other chip stocks this morning,

0:01:03.320 --> 0:01:05.920
<v Speaker 3>Advanced micro Devices is down three and a half percent,

0:01:05.959 --> 0:01:08.640
<v Speaker 3>Applied Materials is down one and a half percent. Intel

0:01:08.680 --> 0:01:10.280
<v Speaker 3>also down more than one percent.

0:01:10.680 --> 0:01:13.920
<v Speaker 2>Well, another major story we're following this morning, Nathan takes

0:01:13.959 --> 0:01:17.480
<v Speaker 2>us overseas. Bloomberg News has learned that UBS plans to

0:01:17.480 --> 0:01:20.240
<v Speaker 2>get more than half of the workforce and inherited from

0:01:20.280 --> 0:01:23.920
<v Speaker 2>credit suits. Bloombergsh and Aali Bosik says the job losses

0:01:24.000 --> 0:01:25.119
<v Speaker 2>will start next month.

0:01:25.319 --> 0:01:27.960
<v Speaker 6>The way that this will be done, according to people familiar,

0:01:28.160 --> 0:01:31.399
<v Speaker 6>is three rounds of job cuts this year, with the

0:01:31.440 --> 0:01:34.120
<v Speaker 6>first round expected by the end of July and two

0:01:34.160 --> 0:01:38.240
<v Speaker 6>more rounds tentatively planned for September and October. So certainly

0:01:38.400 --> 0:01:40.440
<v Speaker 6>through the end of the year there will be kind

0:01:40.480 --> 0:01:43.320
<v Speaker 6>of a lot of communication with staff, plus probably a

0:01:43.360 --> 0:01:46.640
<v Speaker 6>lot of conversations across Wall Street and global finance.

0:01:46.440 --> 0:01:49.559
<v Speaker 2>And Bloomberg and Aali Bosik says UBS intends to reduce

0:01:49.600 --> 0:01:52.920
<v Speaker 2>the total combined headcount by about thirty five thousand.

0:01:53.080 --> 0:01:55.160
<v Speaker 3>Staying in Europe, Karen, we're watching for news on the

0:01:55.200 --> 0:01:58.600
<v Speaker 3>economy and global monetary policy on this final day of

0:01:58.640 --> 0:02:02.120
<v Speaker 3>the European Central Bank four in Central Portugal. Speakers on

0:02:02.160 --> 0:02:05.840
<v Speaker 3>the agenda today include Fed Chair j Powell, ECB President

0:02:05.920 --> 0:02:09.040
<v Speaker 3>Christine Legard, Bank of England Governor Andrew Bailey, and Bank

0:02:09.080 --> 0:02:10.920
<v Speaker 3>of Japan Governor Caswell Ueida.

0:02:11.320 --> 0:02:13.640
<v Speaker 2>Well back here in the US, Nathan, the economy is

0:02:13.720 --> 0:02:16.919
<v Speaker 2>also in focus. President Biden says he thinks the US

0:02:16.960 --> 0:02:20.720
<v Speaker 2>economy can avoid a recession in the coming months. Bloomberg's

0:02:20.720 --> 0:02:23.480
<v Speaker 2>Amy Morris has details from our ninety nine one newsroom

0:02:23.480 --> 0:02:24.160
<v Speaker 2>in Washington.

0:02:24.600 --> 0:02:27.960
<v Speaker 7>President Biden told donors that after economists have predicted a

0:02:27.960 --> 0:02:30.959
<v Speaker 7>recession for the past eleven months, he doesn't think it's

0:02:31.000 --> 0:02:33.600
<v Speaker 7>going to come, citing a strong labor market and his

0:02:33.639 --> 0:02:37.400
<v Speaker 7>efforts to tamp down inflation. National Economic Council Director and

0:02:37.440 --> 0:02:40.959
<v Speaker 7>former Vice Chair of the Federal Reserve Lyle Brainerd agrees,

0:02:41.200 --> 0:02:41.680
<v Speaker 7>we are.

0:02:41.560 --> 0:02:45.720
<v Speaker 2>Going to continue to see resilience against a backdrop of

0:02:45.800 --> 0:02:50.440
<v Speaker 2>what we have referred to as more stable economic growth.

0:02:50.720 --> 0:02:54.040
<v Speaker 7>Economic Council Chair Brainard made the comments as President Biden

0:02:54.120 --> 0:02:56.880
<v Speaker 7>is set to head to Chicago today, where he'll deliver

0:02:56.960 --> 0:02:59.679
<v Speaker 7>what the White House is calling a cornerstone address on

0:02:59.680 --> 0:03:01.880
<v Speaker 7>his ex economic policy, Bidenomics.

0:03:02.120 --> 0:03:02.800
<v Speaker 4>In Washington.

0:03:02.880 --> 0:03:04.480
<v Speaker 7>I Mamy Morris, Bloomberg Daybreak.

0:03:04.600 --> 0:03:05.160
<v Speaker 4>Thanks Amy.

0:03:05.160 --> 0:03:07.320
<v Speaker 3>Now let's get to the latest on Russia following last

0:03:07.360 --> 0:03:10.720
<v Speaker 3>week's failed Wagner Group mutiny. The brief rebellion against the

0:03:10.800 --> 0:03:14.280
<v Speaker 3>Russian government could boost the Biden administration's efforts to rally

0:03:14.320 --> 0:03:18.280
<v Speaker 3>more military support for Ukraine. White House Deputy Press Secretary

0:03:18.320 --> 0:03:21.440
<v Speaker 3>Olivia Dalton announced another half billion dollar draw down from

0:03:21.440 --> 0:03:23.079
<v Speaker 3>the Pentagon stockpiles yesterday.

0:03:23.440 --> 0:03:27.520
<v Speaker 8>This package includes key capabilities that will support Ukraine's counter

0:03:27.560 --> 0:03:32.040
<v Speaker 8>offensive operations, such as mind clearing equipment, armored vehicles, and

0:03:32.160 --> 0:03:35.560
<v Speaker 8>artillery rounds. It will also strengthen air defenses to help

0:03:35.640 --> 0:03:37.960
<v Speaker 8>Ukraine protect its people from rocket attacks.

0:03:38.000 --> 0:03:41.119
<v Speaker 3>Deputy Press Secretary Dalton says there has been strong bipartisan

0:03:41.200 --> 0:03:43.839
<v Speaker 3>support for Ukraine in the past. Sources tell Bloomberg News

0:03:43.840 --> 0:03:46.200
<v Speaker 3>the White House is expecting stronger commitments as well from

0:03:46.280 --> 0:03:49.160
<v Speaker 3>NATO allies when they meet next month in Lithuania.

0:03:49.240 --> 0:03:51.840
<v Speaker 2>Well, Nathan, another story we're following this morning brings us

0:03:51.840 --> 0:03:54.400
<v Speaker 2>to the skies of New York. That's smog which blanketed

0:03:54.440 --> 0:03:57.200
<v Speaker 2>skies in the Northeast earlier this month. Maybe coming back,

0:03:57.240 --> 0:03:59.280
<v Speaker 2>could we get the latest of the Bloomberg's John Tucker

0:03:59.360 --> 0:04:00.720
<v Speaker 2>in New York, John.

0:04:00.600 --> 0:04:04.480
<v Speaker 9>And Karen Air quality should reach unhealthy levels in Western

0:04:04.520 --> 0:04:07.080
<v Speaker 9>and Central New York today, and New York City will

0:04:07.120 --> 0:04:09.960
<v Speaker 9>be enveloped tomorrow. The city in the northeast tenth some

0:04:10.000 --> 0:04:12.760
<v Speaker 9>of the worst air quality in the world. Earlier this month,

0:04:12.920 --> 0:04:16.760
<v Speaker 9>when the smoke from Quebec forest fires swirled south, Governor

0:04:16.800 --> 0:04:19.599
<v Speaker 9>Conthy Hoko says, make no mistake about it. This is

0:04:19.640 --> 0:04:21.440
<v Speaker 9>the result of climate change.

0:04:21.520 --> 0:04:24.320
<v Speaker 1>We are truly the first generation to feel the real

0:04:24.320 --> 0:04:26.640
<v Speaker 1>effects of climate change, and.

0:04:26.560 --> 0:04:29.800
<v Speaker 2>We're also the last generation to do anything meaningful about it.

0:04:30.000 --> 0:04:32.440
<v Speaker 9>Large parts of Canada from coast to coast have been

0:04:32.480 --> 0:04:35.240
<v Speaker 9>burning for weeks, currently two hundred and fifty seven fires

0:04:35.240 --> 0:04:37.360
<v Speaker 9>of burning out of control. Now, if you think it's

0:04:37.360 --> 0:04:39.320
<v Speaker 9>an excuse to work from home, keep in mind that

0:04:39.400 --> 0:04:42.680
<v Speaker 9>modern office building filtration systems to a pretty good job

0:04:42.760 --> 0:04:47.080
<v Speaker 9>cleaning out harmful particulates. New York Out and John Tucker Bloomberg.

0:04:46.640 --> 0:04:47.760
<v Speaker 4>Daybreak, John. Thanks.

0:04:47.800 --> 0:04:50.280
<v Speaker 3>While unhealthy air may stress you out, investors are also

0:04:50.279 --> 0:04:53.600
<v Speaker 3>waiting for bank stress tests this afternoon from the Federal Reserve.

0:04:53.680 --> 0:04:55.640
<v Speaker 4>We get more from Bloomberg's Charlie Pellett.

0:04:55.920 --> 0:05:00.440
<v Speaker 10>It comes as regulators explore more stringent requirements on in

0:05:00.480 --> 0:05:05.720
<v Speaker 10>the aftermath of several lender collapses. Analysts largely expect banks

0:05:05.760 --> 0:05:08.800
<v Speaker 10>to sail through the tests, which examine how lenders would

0:05:08.800 --> 0:05:12.840
<v Speaker 10>hold up in a hypothetical severe global recession in which

0:05:13.040 --> 0:05:17.080
<v Speaker 10>US unemployment peaks at ten percent, commercial real estate prices

0:05:17.160 --> 0:05:22.120
<v Speaker 10>plunge forty percent, and the dollar surges against most major currencies.

0:05:22.480 --> 0:05:25.479
<v Speaker 10>In New York, Charlie Palett Bloomberg Radio.

0:05:25.440 --> 0:05:27.120
<v Speaker 4>This is Bloomberg.

0:05:30.360 --> 0:05:30.520
<v Speaker 2>Now.

0:05:30.560 --> 0:05:31.800
<v Speaker 3>Time to take a look at some of the other

0:05:31.839 --> 0:05:33.920
<v Speaker 3>stories making news in New York and around the world

0:05:34.000 --> 0:05:35.240
<v Speaker 3>with Bloomberg's Michael Barr.

0:05:35.240 --> 0:05:37.120
<v Speaker 4>Good morning, Michael, Good morning Nathan.

0:05:37.200 --> 0:05:41.080
<v Speaker 11>The travel night mayre drags on from severe weather. After

0:05:41.240 --> 0:05:44.640
<v Speaker 11>days of flight cancelations. More than one hundred flights already

0:05:45.000 --> 0:05:47.640
<v Speaker 11>are scrapped in the New York area today. It is

0:05:47.720 --> 0:05:50.240
<v Speaker 11>left travelers at Newark Airport frustrated.

0:05:50.680 --> 0:05:53.640
<v Speaker 4>Come on, this is like the Disney World Line from hell.

0:05:53.800 --> 0:05:54.080
<v Speaker 1>Here.

0:05:54.400 --> 0:05:55.320
<v Speaker 4>I feel gross.

0:05:55.480 --> 0:05:57.839
<v Speaker 1>I feel like I want to cry, but I have

0:05:57.920 --> 0:05:58.559
<v Speaker 1>nothing left.

0:05:59.360 --> 0:06:01.719
<v Speaker 11>Some passings we're told they won't be able to reach

0:06:01.760 --> 0:06:05.560
<v Speaker 11>their destinations until next week. Daniel Penny, the man accused

0:06:05.600 --> 0:06:08.240
<v Speaker 11>in the May subway chocold death of Jordan Neely, will

0:06:08.279 --> 0:06:11.400
<v Speaker 11>be arranged day in New York. Penny's grand jury indictment

0:06:11.480 --> 0:06:14.840
<v Speaker 11>will be unsealed. Tuesday was primary day in New York City.

0:06:14.920 --> 0:06:18.479
<v Speaker 11>In a closely watched race, use of Salaam, the exonerated

0:06:18.640 --> 0:06:22.520
<v Speaker 11>Central Park five criminal justice reform activists, has won a

0:06:22.600 --> 0:06:25.880
<v Speaker 11>seat for the City Council in the ninth district. Salam

0:06:25.960 --> 0:06:28.080
<v Speaker 11>got close to fifty one percent of the vote, compared

0:06:28.320 --> 0:06:31.920
<v Speaker 11>to his closest competitor, State Assembly Member A Nis Dickens,

0:06:31.960 --> 0:06:36.560
<v Speaker 11>with just over twenty five percent. Salam replaces Kirsten Richardson Jordan,

0:06:36.800 --> 0:06:39.840
<v Speaker 11>who announced in May she would not seek reelection. In

0:06:39.960 --> 0:06:44.640
<v Speaker 11>Council District thirteen, incumbent Democrat Marjorie Velasquez easily won her

0:06:44.680 --> 0:06:49.080
<v Speaker 11>primary against three other challengers. However, the Republican primary challenger's

0:06:49.200 --> 0:06:53.520
<v Speaker 11>race is still too close to call, with Christy Mamorto

0:06:53.800 --> 0:06:59.560
<v Speaker 11>showing a slight lead over George Havnrik four percent. Brooklyn's

0:06:59.839 --> 0:07:04.240
<v Speaker 11>three was created through redistricting to reflect the area's majority

0:07:04.360 --> 0:07:09.400
<v Speaker 11>Asian population. Susan Shong won her Democratic primary with fifty

0:07:09.440 --> 0:07:13.040
<v Speaker 11>nine percent. However, the Republican primary too close to call,

0:07:13.400 --> 0:07:16.360
<v Speaker 11>with Ying Tan ahead of Vito Labella fifty two to

0:07:16.400 --> 0:07:21.680
<v Speaker 11>forty eight percent for Bronx District Attorney, Democratic incumbent Darcel

0:07:21.800 --> 0:07:24.200
<v Speaker 11>Clark easily won with more than seventy three percent of

0:07:24.240 --> 0:07:28.200
<v Speaker 11>the vote. For Queen's District Attorney, Democrat incumbent Melinda Katz

0:07:28.240 --> 0:07:30.960
<v Speaker 11>grab more than seventy one percent of the vote.

0:07:31.160 --> 0:07:35.160
<v Speaker 12>I believe a good government is good campaigning. I believe

0:07:35.720 --> 0:07:38.200
<v Speaker 12>you take the guns off the streets, the gangs off

0:07:38.240 --> 0:07:41.200
<v Speaker 12>the streets. You think of innovative ways to take care

0:07:41.200 --> 0:07:43.800
<v Speaker 12>of those are the stealing things from drug stores and

0:07:43.960 --> 0:07:47.960
<v Speaker 12>retail stores. I believe you do good government.

0:07:48.400 --> 0:07:49.560
<v Speaker 13>It's good campaigning.

0:07:50.320 --> 0:07:54.040
<v Speaker 11>Audio courtesy of q Ands. She'll run against Republican Michael

0:07:54.120 --> 0:07:57.880
<v Speaker 11>Mosa in November. Some mayor wal races were also watching.

0:07:57.920 --> 0:08:02.760
<v Speaker 11>In Yonker's Democratic incumbent My Expano easily won. In Mount Vernon,

0:08:02.800 --> 0:08:06.280
<v Speaker 11>Democratic incumbent Sean Patterson Howard beat Andre Waller seventy one

0:08:06.320 --> 0:08:09.640
<v Speaker 11>percent to twenty nine percent. Global News twenty four hours

0:08:09.640 --> 0:08:12.200
<v Speaker 11>a day, powered by more than twenty seven hundred journalist

0:08:12.200 --> 0:08:14.720
<v Speaker 11>and analysts in over one hundred and twenty countries. I'm

0:08:14.720 --> 0:08:16.640
<v Speaker 11>Michael Barrd. This is Bloomberg, Nathan.

0:08:16.680 --> 0:08:24.120
<v Speaker 3>Thanks Michael, time out for the Bloomberg Sports Update. Good morning,

0:08:24.200 --> 0:08:24.960
<v Speaker 3>John stash Out.

0:08:24.880 --> 0:08:25.560
<v Speaker 10>Good morning Nathan.

0:08:25.600 --> 0:08:27.760
<v Speaker 14>The Yankees were coming off two wins over one of

0:08:27.800 --> 0:08:30.720
<v Speaker 14>baseball's better teams. First play Texas, they went to Oakland

0:08:30.720 --> 0:08:33.640
<v Speaker 14>and then lost to a team that's on pace perhaps

0:08:33.920 --> 0:08:36.240
<v Speaker 14>have the worst season in baseball history. The A's were

0:08:36.280 --> 0:08:38.600
<v Speaker 14>twenty and sixty, but they topped the Yanks two to one,

0:08:38.600 --> 0:08:40.800
<v Speaker 14>with the only Yankee ue being a home run by

0:08:40.920 --> 0:08:43.280
<v Speaker 14>Josh Donaldson, former All Star with the A's. That's his

0:08:43.320 --> 0:08:46.600
<v Speaker 14>seventh homer. He only has two other hits at City Field.

0:08:46.880 --> 0:08:48.199
<v Speaker 14>Metts used the long ball.

0:08:48.200 --> 0:08:50.120
<v Speaker 9>One that's lined in the air at the left center

0:08:50.160 --> 0:08:52.839
<v Speaker 9>and deep Gleamer going back at the track at the

0:08:53.000 --> 0:08:54.439
<v Speaker 9>Wallie can't get it.

0:08:54.440 --> 0:08:54.920
<v Speaker 2>It's gone.

0:08:55.280 --> 0:08:56.120
<v Speaker 5>The home run.

0:08:56.480 --> 0:08:58.760
<v Speaker 14>Head to the party deck in front of a great

0:08:58.800 --> 0:09:01.199
<v Speaker 14>wall of pushing Brandon Nippo.

0:09:01.040 --> 0:09:04.160
<v Speaker 4>With an opposite field hall run his second Hall brun

0:09:04.240 --> 0:09:05.600
<v Speaker 4>of the game on WCBS.

0:09:05.640 --> 0:09:09.120
<v Speaker 14>Daniel Vogelback also homer, so did Francisco Lindor two hundredth

0:09:09.200 --> 0:09:11.240
<v Speaker 14>of his career. Mets over the Brewers seven to two.

0:09:11.240 --> 0:09:14.360
<v Speaker 14>It's just their sixth win in the last twenty two games.

0:09:14.400 --> 0:09:16.400
<v Speaker 14>And we'll see what Mets owner Steve Cohen has to

0:09:16.440 --> 0:09:20.119
<v Speaker 14>say this afternoon. He's holding a rare press conference in Anaheim.

0:09:20.160 --> 0:09:23.000
<v Speaker 14>The legend of showe Otani continues in an Angels win

0:09:23.280 --> 0:09:25.560
<v Speaker 14>web with the White Sox on the mound, O'tani gave

0:09:25.640 --> 0:09:28.120
<v Speaker 14>up just one run four heads, struck out ten at

0:09:28.120 --> 0:09:29.880
<v Speaker 14>the play two long home runs.

0:09:29.920 --> 0:09:31.400
<v Speaker 4>He leads the majors with twenty eight.

0:09:31.760 --> 0:09:34.840
<v Speaker 14>The Devils have acquired Tyler Tofole in a trade with Calgary.

0:09:34.840 --> 0:09:38.000
<v Speaker 14>He was their leading scorer. NBA free agency begains Saturday.

0:09:38.000 --> 0:09:40.440
<v Speaker 14>A lot of attentions being paid to Damian Lillard, not

0:09:40.480 --> 0:09:43.679
<v Speaker 14>a free agent, but will Portland trade the seven time

0:09:43.720 --> 0:09:46.000
<v Speaker 14>All Star. They met with Lillard yesterday said they are

0:09:46.040 --> 0:09:48.720
<v Speaker 14>committed to building a winning team around him, and that

0:09:48.840 --> 0:09:52.320
<v Speaker 14>Lillard has not asked for a trade. Ryan Mallett, star

0:09:52.440 --> 0:09:55.439
<v Speaker 14>quarterback at Arkansas then played for three NFL teams, has

0:09:55.520 --> 0:09:59.160
<v Speaker 14>died at thirty five, apparently drowned in the Gulf of Mexico.

0:10:00.160 --> 0:10:01.400
<v Speaker 4>We're Bloomberg Sports.

0:10:03.400 --> 0:10:06.400
<v Speaker 13>From coast to coast, from New York to San Francisco,

0:10:06.720 --> 0:10:11.400
<v Speaker 13>Boston to Washington, DC, nationwide on Syrias Exam, the Bloomberg

0:10:11.440 --> 0:10:13.400
<v Speaker 13>Business app, and Bloomberg dot Com.

0:10:13.640 --> 0:10:17.280
<v Speaker 4>This is Bloomberg Daybreak. Good morning.

0:10:17.280 --> 0:10:19.240
<v Speaker 3>I'm Nathan Hager, and it is a tough morning for

0:10:19.360 --> 0:10:23.000
<v Speaker 3>chip stocks this morning, led by Nvidia following a report

0:10:23.000 --> 0:10:26.000
<v Speaker 3>that the Biden administration is looking to close the loopholes

0:10:26.040 --> 0:10:29.400
<v Speaker 3>that allow China to buy the chips that power artificial intelligence.

0:10:29.960 --> 0:10:31.720
<v Speaker 4>Let's bring in Alex Web for more on this.

0:10:31.800 --> 0:10:34.920
<v Speaker 3>Alex covers all things tech for US at Bloomberg News.

0:10:35.120 --> 0:10:37.160
<v Speaker 3>We should note, Alex that this is reporting from the

0:10:37.160 --> 0:10:39.240
<v Speaker 3>Wall Street Journal. But what are the loopholes that the

0:10:39.240 --> 0:10:41.320
<v Speaker 3>White House reportedly has its eye on here?

0:10:42.440 --> 0:10:46.120
<v Speaker 15>Yeah, so there was an initial round of rules that

0:10:46.600 --> 0:10:49.559
<v Speaker 15>tried to prevent bleeding edge chips that can be used

0:10:49.559 --> 0:10:52.720
<v Speaker 15>for AI applications from being sold into China. And in

0:10:52.800 --> 0:10:54.960
<v Speaker 15>terms of Nvidia, those are known as the A one

0:10:55.080 --> 0:10:57.720
<v Speaker 15>hundred range. So when in Vidia did quite agile league

0:10:57.800 --> 0:11:02.160
<v Speaker 15>quite quickly, they range called the eight hundred, which is

0:11:02.160 --> 0:11:05.520
<v Speaker 15>slightly lower power, and if you looked at the specifications

0:11:05.520 --> 0:11:08.360
<v Speaker 15>that were laid out by the government, they were then

0:11:08.480 --> 0:11:10.800
<v Speaker 15>allowed to be sold into China. So what, according to

0:11:10.840 --> 0:11:13.719
<v Speaker 15>the journals you state, is now being reported is that

0:11:13.880 --> 0:11:17.760
<v Speaker 15>these restrictions are going to be extended, so they will

0:11:17.800 --> 0:11:22.440
<v Speaker 15>cover those new A eight hundred chips and more than that,

0:11:22.480 --> 0:11:26.959
<v Speaker 15>even they will also be covering cloud operators. There is

0:11:27.000 --> 0:11:28.840
<v Speaker 15>a world where you can imagine that if you're a

0:11:28.920 --> 0:11:33.120
<v Speaker 15>Chinese company and you can't get the right technology inside China,

0:11:33.160 --> 0:11:36.720
<v Speaker 15>well then you might buy cloud capacity which is shored elsewhere,

0:11:36.760 --> 0:11:39.600
<v Speaker 15>perhaps you know, in the region, but operated by Google

0:11:39.720 --> 0:11:42.880
<v Speaker 15>or at Microsoft Azure or AWS to get around some

0:11:42.920 --> 0:11:44.760
<v Speaker 15>of those restrictions. And it seems as though they're going

0:11:44.800 --> 0:11:46.439
<v Speaker 15>to be closing that loophole as well.

0:11:46.679 --> 0:11:49.080
<v Speaker 3>And we're seeing the impact on the stock this morning,

0:11:49.080 --> 0:11:52.600
<v Speaker 3>investors thinking this could be a pretty tough for in Vidia,

0:11:52.880 --> 0:11:57.760
<v Speaker 3>given how sizable the Chinese market is for that chip maker.

0:11:57.800 --> 0:12:00.560
<v Speaker 3>What is the potential impact for chip makes and when

0:12:00.600 --> 0:12:03.760
<v Speaker 3>it comes to their bottom line here, I mean.

0:12:03.720 --> 0:12:05.480
<v Speaker 15>I think we've got to be careful not to overstated.

0:12:05.520 --> 0:12:07.480
<v Speaker 15>You must remember the of course, that in Vidia has

0:12:07.520 --> 0:12:10.880
<v Speaker 15>a very full valuation at the moment. It is the

0:12:10.880 --> 0:12:15.960
<v Speaker 15>most expensive chip stock in the Philadelphia Semiconductor Index, training

0:12:16.000 --> 0:12:19.679
<v Speaker 15>it close to fifty times its forward earnings. That means

0:12:19.720 --> 0:12:22.960
<v Speaker 15>that any indication that there might be restrictions to its

0:12:22.960 --> 0:12:25.080
<v Speaker 15>growth potential are obviously going to be taken with a

0:12:25.080 --> 0:12:29.160
<v Speaker 15>certain amount of skittishness by investors. When it comes to

0:12:29.200 --> 0:12:33.360
<v Speaker 15>in Vidia's total revenue, you know, China is it's actually

0:12:33.400 --> 0:12:39.559
<v Speaker 15>its third biggest market, representing about twenty one percent of sales,

0:12:39.600 --> 0:12:43.360
<v Speaker 15>behind Taiwan and of course the US. Some of the

0:12:43.440 --> 0:12:45.880
<v Speaker 15>end customers might actually, you know, so it's made in Taiwan,

0:12:45.920 --> 0:12:49.600
<v Speaker 15>it might ultimately be shipped to Taiwan in a different package, sorry,

0:12:49.600 --> 0:12:53.120
<v Speaker 15>to China, in a different package. It's really about limiting

0:12:53.160 --> 0:12:56.040
<v Speaker 15>the growth here. But as if you read the fantastic

0:12:56.160 --> 0:12:58.360
<v Speaker 15>artle by our colleagues and the most recent edition of

0:12:58.360 --> 0:13:01.880
<v Speaker 15>BusinessWeek profiling in video and the CEO Jensen one, there's

0:13:01.880 --> 0:13:04.120
<v Speaker 15>currently an eight month wait to be able to get

0:13:04.480 --> 0:13:08.080
<v Speaker 15>the bleeding Edge chips. So at least in the near term,

0:13:08.200 --> 0:13:11.760
<v Speaker 15>it doesn't look as though this would have any meaningful

0:13:11.800 --> 0:13:14.679
<v Speaker 15>effect on demand. The question then starts to be if

0:13:14.720 --> 0:13:17.199
<v Speaker 15>it affects it in the medium term, as you know,

0:13:17.880 --> 0:13:21.400
<v Speaker 15>US and European cloud capacity gets filled up.

0:13:21.559 --> 0:13:23.440
<v Speaker 3>Now, I guess that raises the question as well of

0:13:23.480 --> 0:13:26.199
<v Speaker 3>whether in Vidia could continue to shore up that sizeable

0:13:26.240 --> 0:13:29.920
<v Speaker 3>market it has in China even with these kinds of restrictions.

0:13:29.960 --> 0:13:32.599
<v Speaker 3>Is there a scenario that you could see that in

0:13:32.760 --> 0:13:36.160
<v Speaker 3>Vidia could try to hold on to that Chinese market.

0:13:37.520 --> 0:13:40.600
<v Speaker 15>I mean, they've clearly managed to find a way with

0:13:40.640 --> 0:13:45.959
<v Speaker 15>the previous rules to skirt the letter of the regulations.

0:13:46.720 --> 0:13:48.800
<v Speaker 15>You know, of course they did something that was entirely legal,

0:13:48.880 --> 0:13:53.120
<v Speaker 15>but they ultimately served up a chip that wasn't as good, right,

0:13:53.160 --> 0:13:56.640
<v Speaker 15>And then the question is, well, perhaps they can innovate

0:13:56.720 --> 0:13:59.400
<v Speaker 15>further and do something similar on those lines. Even so

0:14:00.040 --> 0:14:02.600
<v Speaker 15>would mean that China is not getting stuff that is

0:14:02.640 --> 0:14:06.160
<v Speaker 15>as good as what you know US cloud operators are

0:14:06.200 --> 0:14:09.560
<v Speaker 15>able to do at the moment, at any rate in

0:14:09.640 --> 0:14:12.360
<v Speaker 15>video are the only game in town and the only

0:14:12.400 --> 0:14:14.920
<v Speaker 15>others who are close the likes of AMD, they are

0:14:14.960 --> 0:14:18.840
<v Speaker 15>also covered by these restrictions. So the only solution from

0:14:18.840 --> 0:14:20.960
<v Speaker 15>a Chinese perspective is what can they come up with

0:14:21.000 --> 0:14:24.200
<v Speaker 15>some sort of domestic competitor. The answer might be yes,

0:14:24.280 --> 0:14:26.480
<v Speaker 15>but it's not going to be anytime soon. You're looking at,

0:14:26.640 --> 0:14:29.280
<v Speaker 15>you know, years and years out, because not only can

0:14:29.320 --> 0:14:31.560
<v Speaker 15>they not buy these chips, they can't buy the equipment

0:14:31.560 --> 0:14:34.960
<v Speaker 15>that's needed to make these chips, usually made by asmls.

0:14:35.000 --> 0:14:38.680
<v Speaker 15>So it's a tough challenge for China for in VideA.

0:14:39.280 --> 0:14:41.840
<v Speaker 15>It you know, might affect them around the edges, It

0:14:41.960 --> 0:14:44.200
<v Speaker 15>isn't the lion's share of their business.

0:14:43.920 --> 0:14:46.400
<v Speaker 3>About thirty seconds left here, Alex. But you mentioned the

0:14:46.480 --> 0:14:50.800
<v Speaker 3>restrictions on cloud leases that are reported in this Biden

0:14:50.840 --> 0:14:54.040
<v Speaker 3>administration strategy. I mean, that's the kind of thing that

0:14:54.080 --> 0:14:56.360
<v Speaker 3>could hit some of the biggest tech companies in the world.

0:14:58.000 --> 0:15:01.520
<v Speaker 15>Yes, but they aren't as big inside China as they

0:15:01.560 --> 0:15:03.440
<v Speaker 15>might be. And of course this is all new. This

0:15:03.520 --> 0:15:06.760
<v Speaker 15>is like green space for them, right. The AI processing

0:15:06.800 --> 0:15:09.120
<v Speaker 15>stuff is what they're adding. That's the way of bringing

0:15:09.120 --> 0:15:11.240
<v Speaker 15>new business in. It's not something they already have. So again,

0:15:11.280 --> 0:15:14.480
<v Speaker 15>it's a that's in their growth, not necessarily affecting the

0:15:14.520 --> 0:15:17.440
<v Speaker 15>businesses they already have, and that's the key issue at

0:15:17.480 --> 0:15:17.840
<v Speaker 15>the moment.

0:15:19.920 --> 0:15:22.840
<v Speaker 1>This is Bloomberg day Break Today, your morning brief on

0:15:22.880 --> 0:15:26.440
<v Speaker 1>the stories making news from Wall Street to Washington and beyond.

0:15:26.720 --> 0:15:29.480
<v Speaker 2>Look for us on your podcast feed at six am

0:15:29.560 --> 0:15:33.200
<v Speaker 2>Eastern each morning, on Apple, Spotify, and anywhere else you

0:15:33.280 --> 0:15:34.479
<v Speaker 2>get your podcasts.

0:15:34.560 --> 0:15:37.280
<v Speaker 1>You can also listen live each morning starting at five

0:15:37.320 --> 0:15:39.960
<v Speaker 1>am Wall Street time on Bloomberg eleven three to zero

0:15:39.960 --> 0:15:42.800
<v Speaker 1>in New York, Bloomberg ninety nine to one in Washington,

0:15:42.920 --> 0:15:45.800
<v Speaker 1>Bloomberg one oh six to one in Boston, and Bloomberg

0:15:45.880 --> 0:15:47.560
<v Speaker 1>ninety sixty in San Francisco.

0:15:47.920 --> 0:15:51.080
<v Speaker 2>Our flagship New York station, is also available on your

0:15:51.120 --> 0:15:56.560
<v Speaker 2>Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty plus.

0:15:56.600 --> 0:15:59.600
<v Speaker 1>Listen coast to coast on the Bloomberg Business app, serious

0:15:59.600 --> 0:16:03.680
<v Speaker 1>Ex Channel one nineteen, the iHeartRadio app, and on Bloomberg

0:16:03.800 --> 0:16:04.400
<v Speaker 1>dot Com.

0:16:04.400 --> 0:16:06.640
<v Speaker 4>I'm Nathan Hager and I'm Karen Moscow.

0:16:06.840 --> 0:16:09.600
<v Speaker 2>Join us again tomorrow morning for all the news you

0:16:09.720 --> 0:16:12.920
<v Speaker 2>need to start your day, right here on Bloomberg Daybreak