Speaker 1: Good morning.
Speaker 2: I'm Brian Curtis and I'm Doug Krisner. Here are the
Speaker 2: stories we're following today.
Speaker 3: Well tomorrow, we'll see if November's employment report in the
Speaker 3: United States shows more evidence of a cooling labor market.
Speaker 3: We'll get the numbers around eight thirty in the morning.
Speaker 3: Wall Street Time, Bloomberg's Michael McKee, how's a preview.
Speaker 4: We should be seeing signs of a slowing economy in
Speaker 4: the labor market, but economists say not just yet. The
Speaker 4: consensus forecast is November saw the pace of hiring pick
Speaker 4: up while unemployment was unchanged. About thirty thousand jobs won't
Speaker 4: be new, They will just reflect the return of auto
Speaker 4: workers to pay rolls after the UAW strike, But hiring
Speaker 4: in healthcare, leisure and hospitality, and government should keep healthy numbers.
Speaker 4: Beyond manufacturing, markets are pricing a lower than anticipated number, however,
Speaker 4: so strength could lead to higher rates as investors worry
Speaker 4: the FED may not yet be done with rate hikes.
Speaker 1: Michael McKee, Bloomberg Radio.
Speaker 2: We go next to Teszla's Dojo supercomputer pro. Now the
Speaker 2: head of the project, ganesh Venta Katraman, has left the company.
Speaker 2: The Dojo system if you don't know as a supercomputer
Speaker 2: made to train machine learning models behind Tesla's self driving systems.
Speaker 2: Here's Bloomberg's Mark German.
Speaker 5: They have put a new person in charge named Peter Bannon.
Speaker 5: He was a former mid double chip executive at Apple.
Speaker 5: He's now leading the program. And obviously when the head
Speaker 5: of the program leaves, that means there is some sort
Speaker 5: of strategy rethink going on, and it is a bit
Speaker 5: of a blow to the effort. So this is extraordinarily
Speaker 5: significant news, both within Tesla as well as in the
Speaker 5: modern processor and AI community.
Speaker 2: That is Bloomberg's Mark German. There By the way, Tesla's
Speaker 2: CEO Elon Musk was saying the company is planning to
Speaker 2: invest more than a billion dollars on Project Dojo by
Speaker 2: the end of twenty twenty four. Shares in Tesla today
Speaker 2: brian up one point three percent in New York Training.
Speaker 3: Well, let's take a closer look, doug at Broadcom's earnings.
Speaker 3: This stock in after hours had been down, but it's
Speaker 3: back to essentially unchanged.
Speaker 1: Here.
Speaker 3: Broadcomposted it's slow most sales growth since twenty twenty, as
Speaker 3: the chip maker tried to pull out of an industry
Speaker 3: wide slump.
Speaker 1: Let's get the story from Bloomberg's Charlie Pillett.
Speaker 6: Broadcom just completed the acquisition of VMware for more than
Speaker 6: sixty billion dollars. Revenue grew four percent to nine point
Speaker 6: three billion dollars in the fiscal fourth quarter. Broadcom also
Speaker 6: predicted that its twenty twenty four revenue would be at
Speaker 6: least fifty billion dollars including VMware, a number that appears
Speaker 6: to be below the two companies combined sales estimates. Broadcom
Speaker 6: has suffered accelerating growth brought on by sluggish demand for
Speaker 6: computers and smartphones in New York. Charlie Pellett Bloomberg Radio.
Speaker 2: The US in Mexico will be beating up screening of
Speaker 2: foreign investments because of concerns over China. The story from
Speaker 2: Bloomberg's and Kates.
Speaker 7: The Biden administration of Mexico agreed to boost cooperation with
Speaker 7: a rush of Chinese investors into the southern US neighbor,
Speaker 7: stoking concerns about national security risks in the supply chain,
Speaker 7: without mentioning China by name. The Chargery Apartments, as a
Speaker 7: group formed with Mexico, will conduct investment reviews, especially in
Speaker 7: certain technologies critical infrastructure and sensitive data. Treasury Secretary Janet
Speaker 7: Yellen says working together on financial and regulatory policy can
Speaker 7: further increase trade and investment and the benefits they bring.
Speaker 7: In Washington and Kate's Bloomberg Radio.
Speaker 3: US Trade Representative Catherine Tie says the US and Taiwan
Speaker 3: are looking to build on a deal reached earlier this year.
Speaker 3: The deal covers issues like regulatory practices, customs, and corruption,
Speaker 3: but it excludes anything about terraff reductions traditionally called market access.
Speaker 3: These are thorny issues that are difficult to resolve given
Speaker 3: tensions between the US and China. Tai spoke about negotiations
Speaker 3: with Taiwan earlier with Bloomberg.
Speaker 8: We are negotiating another set of disciplines right as we speak.
Speaker 8: We've been making excellent progress, and we will continue to
Speaker 8: look at building out those agreements to have an arrangement
Speaker 8: with the Taiwan economy that is fit for the times,
Speaker 8: and the times are very challenging.
Speaker 3: Tai did not rule out a free trade agreement with Taiwan,
Speaker 3: but she said that the US is not seeking what
Speaker 3: she called very comprehensive, maximally liberalizing deals with any country
Speaker 3: at the moment.
Speaker 2: Chinese President Chichinping told European Union leaders that he wants
Speaker 2: these two sides to be key trading partners capable of
Speaker 2: building trust or when it comes to supply chains. President
Speaker 2: She met with European Commissioned President Urzula vonder Land along
Speaker 2: with European Council President Charles Michel. Vonder Land said she
Speaker 2: had a good and candidate exchange with Chichin Ping.
Speaker 9: China is the EU's most important trading partner, but there
Speaker 9: are clear imbalances and differences that we must address. We
Speaker 9: both recognize the importance of de risking and strengthening the
Speaker 9: resilience of our economies, and that is why the European
Speaker 9: Union is working to ensure the security of supplied chains,
Speaker 9: critical infrastructure and technological and industrial basis.
Speaker 2: That is EC President or as A Lavanderley and by
Speaker 2: the way, state media in China said that President She
Speaker 2: and those EU leaders also discussed the Belton Road initiative.
Speaker 2: During their meeting, She teleg officials his nation was willing
Speaker 2: to connect his initiative with the EU's Global Gateway. Now.
Speaker 2: The European program is an infrastructure plan. It's aimed at
Speaker 2: competing with China in the areas of strategic regionality.
Speaker 3: Brian, it's time for global news. Let's get right over
Speaker 3: to Ed Baxter in the nine to sixty news room
Speaker 3: in San Francisco.
Speaker 10: Ed, all right, Brian, thank you. Israeli Prime Minister Benjamin Nette,
Speaker 10: Yahoo is threatened to devastate by Root of Hezbollah opens
Speaker 10: up a second front. That Yahoo made the warning during
Speaker 10: a visit to the IDF and Northern Command. He says
Speaker 10: a second front would lead to Beyroot and also southern Lebanont.
Speaker 10: Bloomberg's Nick Wadams says, complete devastation is the threat.
Speaker 11: There is a strategy here and that is essentially deterrence.
Speaker 11: The last thing Israel wants right now is for the
Speaker 11: shelling and back and forth that has happened on the
Speaker 11: border of Lebanon to turn into a wire conflict that
Speaker 11: would divert more of its resources away from its campaign
Speaker 11: in Gaza.
Speaker 10: And Bloomberg's Anthony Squasine says the campaign in Gaza itself
Speaker 10: is going to take months. Five hundred more tunnels to destroy.
Speaker 12: In total, they believe there are five hundred kilometers, which
Speaker 12: is about three hundred and eleven miles of tunnels. I
Speaker 12: don't know what that translates to but they feel there
Speaker 12: are still many tunnels that they have to find.
Speaker 10: And says there's no timeline actually spelled out. Meanwhile, the
Speaker 10: presidents of Harvard University of Pennsylvania are walking back comments
Speaker 10: indicating hesitancy and calling for genocide of Jews, violating school policy.
Speaker 10: Penn president Liz McGill says she was focused in the
Speaker 10: moment on our school's policy to not punish speech alone.
Speaker 13: I want to be clear, a call for genocide of
Speaker 13: Jewish people is threatening deeply. It is intentionally meant to
Speaker 13: terrify a people who have been subjected to programs and
Speaker 13: hatred for centuries and were the victims of mass genocide
Speaker 13: in the Holocaust.
Speaker 10: Harvard's Claudine Gay meanwhile released a statement saying genocide threats
Speaker 10: have no place at Harvard. My deministration's top Envoid to
Speaker 10: Asia says North Korea has spurned all outreach. Kurt Campbell
Speaker 10: says difficult need even getting then address a letters sent to.
Speaker 7: Them AID for Ukraine.
Speaker 10: The debate on deadline, NSC spokesman John Kirby says time
Speaker 10: is running out.
Speaker 14: We've got a few more weeks here and then we're
Speaker 14: out of slit when it comes to help in Ukraine
Speaker 14: with this kind of security as systems that we've been
Speaker 14: able to provide, and that's just that that should be
Speaker 14: unacceptable to everybody.
Speaker 10: That Senator Lindsay Graham says, the southern border has to
Speaker 10: be addressed.
Speaker 14: Secure the border before we get attacked, Secure the border
Speaker 14: before the next terrorist attack happens.
Speaker 10: Yeah. Meanwhile, LKS Women for the White House Koreane Jean
Speaker 10: Pierre says, Congress does have the recess coming up, and
Speaker 10: this is embarrassing.
Speaker 15: It's stunning that we have gotten to this point and
Speaker 15: that Republicans in Congress willing to give Putin a gift,
Speaker 15: the greatest gift that Putin could hope for. That's what
Speaker 15: we're seeing, and so they are playing chicken with our
Speaker 15: national security.
Speaker 16: Yeah.
Speaker 10: Meanwhile, President Putin has a pledge in closer ties with
Speaker 10: Iran after his golf visit. Russia and Iran have been
Speaker 10: building a very close military tie. Global News twenty four
Speaker 10: hours a day and whenever you want it with Bloomberg
Speaker 10: News now in San Francisco. I'm at Baxter and this
Speaker 10: is Bloomberg.
Speaker 1: All right, Let's bring in Ian King.
Speaker 3: Bloomberg News US Semiconductor Reporter for a closer look at
Speaker 3: Broadcom's earnings and how that feeds into some of the
Speaker 3: euphoria that we saw on artificial intelligence.
Speaker 1: Ian, thanks very much so.
Speaker 3: The broadcon earning earnings for a little bit lackluster, revenue
Speaker 3: only up four percent, and the forecast, as we heard
Speaker 3: there from Charlie, and as you pointed out in your story,
Speaker 3: the forecast for sales only fifty billion, which isn't all
Speaker 3: that impressive given the addition of VMware, But the CEO
Speaker 3: did sound optimistic about AI.
Speaker 1: So it's kind of steady as she goes, I guess.
Speaker 16: And there are a lot of moving parts here, as
Speaker 16: you would expect from a company that just acquired another
Speaker 16: one for the size of VMware. So there were some
Speaker 16: explanations on the core which I think help and you
Speaker 16: sort of stock come back a little bit in after
Speaker 16: I was trading. The forecast looked light, and how the
Speaker 16: company explained this was like, look, we're going to get
Speaker 16: about twelve billion dollars of revenue buy ating VMware in
Speaker 16: our next financial year. ESTIMATESIC calls for about fourteen, so
Speaker 16: where's a two billion going? And what he said was, look,
Speaker 16: we're going to spin off a couple of units that
Speaker 16: we don't think fit with our overall portfolio. Those two
Speaker 16: units account for about two billion of sales, so we've
Speaker 16: not included them in our forecast, and I think that
Speaker 16: helped people get a little bit more comfortable with what
Speaker 16: was going on overall. But yeah, obviously there was a
Speaker 16: lot of explaining that needed to be done about AI
Speaker 16: and some of the other areas that they were that
Speaker 16: they're working on as well.
Speaker 2: So Ian connect the dots for me. So you have
Speaker 2: Broadcom the acquisition of VMware, How does that all fit
Speaker 2: with this theme of artificial intelligence?
Speaker 16: VMware does not. That's you know what. You know, the
Speaker 16: AI was definitely a focus on the call, and there
Speaker 16: was definitely some excitement. What they said was, look, you
Speaker 16: know our networking gear. These are the switch chips which
Speaker 16: control the flow of data between computers in the data center.
Speaker 16: They're doing great. You know, all of those powerful projections
Speaker 16: such as the one that we saw yesterday from am D,
Speaker 16: they're true. We're seeing the same thing. You know, that
Speaker 16: particular portion has gone from like fifteen percent has gone
Speaker 16: as high as fifteen percent of our semiconductor revenue, and
Speaker 16: it's going to go considerably higher than that, So yes,
Speaker 16: you know, they take full of the boxes on that
Speaker 16: the side of the fence, But at the same time,
Speaker 16: that's only a certain percentage and has a limited impact
Speaker 16: on what's going on overall, which includes enterprise software, which
Speaker 16: includes virtualization software from VMware, It includes networking chips that
Speaker 16: go into the iPhone and you name it, and storage
Speaker 16: and everything else that Broadcom does as well. So yes,
Speaker 16: it's great, Yes, fantastic. We should be excited about AI,
Speaker 16: but bear in mind it's only a part of the story.
Speaker 1: In a sense.
Speaker 3: The additional uh you know, acquisition of VMware, adding more
Speaker 3: software in the picture would sort of seem to smooth
Speaker 3: out the earnings path of the company, wouldn't it, Because
Speaker 3: semiconductors are volatile, quite cyclical in nature, and really famous
Speaker 3: for going up and down a lot, whereas software would
Speaker 3: be steadier.
Speaker 1: Wouldn't it.
Speaker 16: Well, this is this is back to you know, Hocktan's
Speaker 16: core thesis, and you're right to focus on that idea
Speaker 16: is that the semiconductor industry is not cyclical anymore. It's stable,
Speaker 16: and we should start acting like that. What's happened over
Speaker 16: the last couple of years has been sort of an anomaly,
Speaker 16: but yes, software also fix that. He said, a lot
Speaker 16: of these companies are out there chasing growth like idiots.
Speaker 16: Basically he didn't say it, but he kind of implies it.
Speaker 16: And when he talks about these other companies, he uses
Speaker 16: the word sensible and you know, if you stop doing
Speaker 16: that and you just concentrate on what you're good at,
Speaker 16: which he's going to do with VMware, and he says
Speaker 16: he's done with previous acquisition. Yeah, you don't see this
Speaker 16: huge growth spurt, but at the same time, you have
Speaker 16: fabulous level of cash generation, you have a fabulous level
Speaker 16: of profitability. We're going to give you investors a lot
Speaker 16: of returns and that's a sensible way. That's the way
Speaker 16: that these companies should be run. You know, once they
Speaker 16: wake up and smaller conflicts and stop chasing these crazy
Speaker 16: you know, these crazy things that they're never going to
Speaker 16: get to. That's his thesis, and that's what he sees
Speaker 16: is the is how the industry is. So yes, there
Speaker 16: are all these balancing factors, but you know, he's sticking
Speaker 16: to this view of the world is only growing, you know,
Speaker 16: a small increment on top of GDP minus what's going
Speaker 16: on with AI right now, because that's a new new thing.
Speaker 2: Oh well, speaking of AI yesterday, Ian, of course, we
Speaker 2: were talking about the announcement from Advanced micro Devices the
Speaker 2: new MI I three hundred accelerator chip. Kind of a
Speaker 2: delayed reaction when you look at the stock today, AMD
Speaker 2: shares were up ten percent. Is this this new chip
Speaker 2: capable of competing with the one from Nvidio when it
Speaker 2: comes to running AI software?
Speaker 16: AMD said it was, and you know, I mean it's
Speaker 16: got two right that. You know. They Lisa through the CEO,
Speaker 16: and we had a couple of conversations and say yesterday,
Speaker 16: She's like, look, it's important that we can compete with
Speaker 16: them on training, which is a big market right now.
Speaker 16: But when it comes to actually implementing this software and
Speaker 16: running it, we've got to be good at that, and
Speaker 16: we are going to be better at that than they
Speaker 16: are because that's a bigger market. And it took a
Speaker 16: while for people to sort of get their head around that,
Speaker 16: but I think they did. I think the big headline
Speaker 16: from yesterday was she talked about the market as being
Speaker 16: with four hundred billion dollars of total revenue for the
Speaker 16: X alertis bear in mind the total chip industry was
Speaker 16: only worth five hundred and ninety billion last year, so
Speaker 16: that's a massive amount of growth that she's proecting. And
Speaker 16: she said, she looked to me said, Ian, you know me.
Speaker 16: You know I don't get carried away with these things.
Speaker 16: I'm telling you this. I believe it all right.
Speaker 3: Well, thanks very much, Ian, We love having you on
Speaker 3: the show. Ian King, Bloomberg News US Semiconductor Reporter. This
Speaker 3: is Bloomberg Daybreak Asia. Your morning brief on this story
Speaker 3: is making news from Hong Kong to Singapore and Wall Street.
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Speaker 1: I'm Brian Curtis.
Speaker 2: And I'm Doug Chrisner. Join us again tomorrow for all
Speaker 2: the news you need to start your day, right here
Speaker 2: on Bloomberg day Break Asia