WEBVTT - Asian Stocks Ease from Record Highs, Computex 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast. I'm Charlie Pelle. Doug

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<v Speaker 2>Chrisner has the day off. Asian shares eased from records,

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<v Speaker 2>oil held gains as efforts to revive a peace deal

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<v Speaker 2>with or On showed little progress, even as the AI

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<v Speaker 2>driven rally continues to propel equities to records. Financial markets

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<v Speaker 2>have been whipsawed by geopolitical headlines after an escalation in

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<v Speaker 2>Middle East hostilities jeopardized peace negotiations. For more on the markets,

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<v Speaker 2>we heard from Willem Sell's global CIO at HSBC Private

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<v Speaker 2>Bank and Premiere Wealth, and he spoke to Bloomberg TV

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<v Speaker 2>hosts Paul Allen and Heidi Stroud Watts.

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<v Speaker 3>I want to start off on that tic theme. I mean,

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<v Speaker 3>your most recent report talks about the importance of investing

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<v Speaker 3>in an AI LID future. But if we drill into that,

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<v Speaker 3>what does that mean Specifically, you're buying chip makers, you're

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<v Speaker 3>buying ASML energy stocks, all of the above, or is

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<v Speaker 3>there something else in there that that investors should be

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<v Speaker 3>looking at.

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<v Speaker 4>All of the above. You know, we need to invest

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<v Speaker 4>in in that, you know, the the ecosystem, which is

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<v Speaker 4>of course AI chip makers, but also the enablers as

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<v Speaker 4>well as the adopters. But I think it's very important

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<v Speaker 4>to try to at least have a little bit of

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<v Speaker 4>sector diversification and style diversification by also going to the

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<v Speaker 4>rest of the ecosystem which feeds that, ie the energy.

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<v Speaker 4>The energy security theme. The reason why we call it

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<v Speaker 4>energy security is of course because of the conflict and

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<v Speaker 4>even the Russia Ukraine War as well, we saw that,

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<v Speaker 4>you know, countries want to invest in that energy independence,

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<v Speaker 4>and of course the demand for energy is further enhanced

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<v Speaker 4>you know, buy AI. So that's important because so much

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<v Speaker 4>of the economy and of earnings is driven by I

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<v Speaker 4>that you don't just want to be in one single sector.

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<v Speaker 3>Just getting back to that all the above theme where

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<v Speaker 3>we heard from Jensen Huang yesterday. He was talking about

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<v Speaker 3>software companies and how they won't go out of business

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<v Speaker 3>because of AI. He said, it's actually an incredible time

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<v Speaker 3>to be a software company. Do you buy into that narrative?

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<v Speaker 4>Well, we see that for example into hiring as well.

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<v Speaker 4>So amongst economists there's a lot of discussion as to

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<v Speaker 4>whether you know, people will be laid off at this

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<v Speaker 4>point in time, there's actually a lot of demand and

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<v Speaker 4>you know for software developers, for consultants as well, who

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<v Speaker 4>can install that AI into you know, into the corporate sector.

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<v Speaker 4>I think within the software business it's very very important

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<v Speaker 4>to try to differentiate. There are indeed some businesses that

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<v Speaker 4>don't have demods, that don't have the competitive advantage fees

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<v Speaker 4>have VEI, but there's a lot of them that are

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<v Speaker 4>very well integrated with their clients, that have a lot

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<v Speaker 4>of proprietary data, and therefore it's very difficult to push

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<v Speaker 4>those out of business. They are going to do very well.

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<v Speaker 4>They need to be integrated and they can be enhanced

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<v Speaker 4>as well in their capability by AI. They not just

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<v Speaker 4>the potential casualty, they can also benefit you know, from

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<v Speaker 4>that day it to big their software more powerful.

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<v Speaker 1>Well, there's obviously a huge wave of AI and big

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<v Speaker 1>tech IPOs and deals that are almost upon us. We've

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<v Speaker 1>had on Propit having that first mover up your edge

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<v Speaker 1>by filing first Open II to come. We had the

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<v Speaker 1>big fundraising from Alphabet, Google Overnight as well and SpaceX.

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<v Speaker 1>How much interest do you think there's going to be

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<v Speaker 1>when it comes to your clients for being able to

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<v Speaker 1>get access to these deals.

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<v Speaker 4>Yeah, there will certainly be interest, But I think there

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<v Speaker 4>is a lot of speculation in the market about whether

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<v Speaker 4>this would hurt the index overall because of sort of

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<v Speaker 4>a supply you know effect, vacuum cleaner effact, there's some

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<v Speaker 4>call it.

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<v Speaker 5>You know.

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<v Speaker 4>Historically, these the impact on the market tends to be

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<v Speaker 4>very very small if you look back at very important IPOs. Also,

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<v Speaker 4>it's important to look at the free float, right you know,

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<v Speaker 4>which is which is a small section. I think a

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<v Speaker 4>lot of those companies have a different risk profile, you

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<v Speaker 4>know than the Magnificent seven, so it's not necessarily one

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<v Speaker 4>for one, you know, and comparable. So people won't necessarily

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<v Speaker 4>take money out of those Magnificent seven or other stocks

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<v Speaker 4>to go to go into that. So I think the

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<v Speaker 4>the the AI will need to be driven higher by

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<v Speaker 4>those earnings. So as long as you believe, as we do,

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<v Speaker 4>that more and more companies are installing, that more and

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<v Speaker 4>more consumers are using it, that companies are monetizing it,

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<v Speaker 4>you know, through subscription advertising in others, you know, that

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<v Speaker 4>that earning tailwind you know, will continue to drive up,

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<v Speaker 4>you know, the sector.

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<v Speaker 1>There is that risk in terms of being first to

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<v Speaker 1>tap the market that that test of particularly the US market,

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<v Speaker 1>for for depth, for liquidity, for the investor appetite that

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<v Speaker 1>you allude to, and I'm sure that's the case when

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<v Speaker 1>it comes to Asian investors as well. Right, do you

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<v Speaker 1>think in the short or medium term there is that

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<v Speaker 1>risk that some of that interest will get sucked out

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<v Speaker 1>of other assets and other names, and should we prepare

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<v Speaker 1>for some volatility?

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<v Speaker 4>So I think there's still a lot of liquidity on

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<v Speaker 4>the sidelines. I think the initial i pls will will

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<v Speaker 4>not be big enough to to to drain the liquidity

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<v Speaker 4>out of the market. And the question is obviously do

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<v Speaker 4>you get secondary you know deals as well and more

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<v Speaker 4>of those stocks coming to the market that free float increasing.

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<v Speaker 4>But I think there is that liquidity, and the equity

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<v Speaker 4>marketer is the liquidity in the bond market as well.

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<v Speaker 4>But one thing that I would say is that, of

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<v Speaker 4>course we can't just talk about the tailwind of AI.

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<v Speaker 4>We also still have the cyclical headwind from the uncertainty

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<v Speaker 4>around you know, the Middle East. What I think that

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<v Speaker 4>will do is lead to market to market volatility, not

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<v Speaker 4>an equity market correction. But we have to be fully

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<v Speaker 4>prepared for you know, the odd inflation or growth number

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<v Speaker 4>or illustrations from companies that their supply chains are being

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<v Speaker 4>interrupted to lead to some mark to market volatility. We

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<v Speaker 4>are with the treasury at a level where you know

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<v Speaker 4>what we call the danger zone, where that Treasury level,

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<v Speaker 4>when you get more volatility, that then feeds through into

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<v Speaker 4>equity market volatility. So people need to prepare for that,

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<v Speaker 4>but they need to be continued to be exposed to

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<v Speaker 4>the market up site. And how do you balance those

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<v Speaker 4>two things well, by building resilient portfolios with gold, with treasuries,

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<v Speaker 4>with hedge funds, with alternative assets, and by trying to

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<v Speaker 4>have some sexor diversification as well.

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<v Speaker 3>You mentioned a few volatility factors there. I want to

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<v Speaker 3>inject one more potential risk to this goal run. Where

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<v Speaker 3>do you place the chances of a FED rate hike

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<v Speaker 3>before the end of the year.

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<v Speaker 4>We don't have a federate high penciled in, and to

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<v Speaker 4>some extent that is because in the US the natural

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<v Speaker 4>gas prices, for example, have gone much much less than

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<v Speaker 4>in Europe, so the effect that you see around the

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<v Speaker 4>world is differentiated. The other thing, obviously, is that looks

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<v Speaker 4>at both inflation and ed growth, So in our view,

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<v Speaker 4>you don't get that federate hike and that obviously to

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<v Speaker 4>some extent is an anchor for markets if we're right

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<v Speaker 4>about that, and probably one of the things that helps

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<v Speaker 4>the markets have that resilience as well that we see

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<v Speaker 4>at this current stage.

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<v Speaker 2>Well them sells Global CIO at HSBC, Private Bank and

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<v Speaker 2>Premier Well speaking to Bloomberg TV hosts highly Stround Wants

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<v Speaker 2>and Paul Allen. Up next, we'll take you to type

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<v Speaker 2>A where COMPUTEXT twenty twenty six is underway. That's coming

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<v Speaker 2>up on the Daybreak Asia podcast. Welcome back to the

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<v Speaker 2>Daybreak Asia podcast. I'm Charlie Pellett. Doug Chrisner has the

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<v Speaker 2>day off. We take you to type Ay where COMPUTECHS

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<v Speaker 2>twenty twenty six is underway. It is Asia's largest tech showcase.

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<v Speaker 2>CEOs from the world's leading technology companies are gathering to

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<v Speaker 2>discuss the outlook for AI, robotics and chips and this

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<v Speaker 2>is where we have the chance to speak to Craig

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<v Speaker 2>McDonald abb Robotics business Line Managing Director, robot Industries, and

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<v Speaker 2>he spoke to Bloomberg Steven Engel.

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<v Speaker 5>So how is AI being infused? I mean Jensen along

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<v Speaker 5>and everyone else here from Qualcom CEO all talking about

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<v Speaker 5>agentic AI is the next new springboard for the adoption

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<v Speaker 5>and investment and profitability of AI. How is agentic AI

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<v Speaker 5>being infused into a traditional industrial tool like you have?

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<v Speaker 5>This's been around since the nineteen seventies. How is it

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<v Speaker 5>being improved?

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<v Speaker 6>So ABB started in robotics in nineteen seventy four. I

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<v Speaker 6>think we were the first introduced microprocessor controls into the

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<v Speaker 6>robotic space, and over the next fifty years we've come

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<v Speaker 6>up with a very wide range of industrial, collaborative and

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<v Speaker 6>mobile robots. And we spent probably the last twenty years

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<v Speaker 6>evolving that system now into robots that can operate more

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<v Speaker 6>autonomously and versatile versus in a more versatile manner. So

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<v Speaker 6>think of robots with intelligent eyes, think of robots with

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<v Speaker 6>hands and ability to manipulate, and also think of robots

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<v Speaker 6>that now have a brain. But these are evolving to

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<v Speaker 6>a point where ultimately simulation becomes more and more important

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<v Speaker 6>because you're e merging so many different technologies. The ability

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<v Speaker 6>to create hyper realistic synthetic data to recreate these environments

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<v Speaker 6>is truly bringing these technologies together and is really the

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<v Speaker 6>next step that we're working on.

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<v Speaker 5>So, how are you then as well partnering within video

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<v Speaker 5>because A Video stole all the headlines yesterday, no doubt,

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<v Speaker 5>with their new laptop to take on the likes of

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<v Speaker 5>Intel and AMD. But of course we all know that

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<v Speaker 5>they the orchestrac architecture to go into those big data

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<v Speaker 5>centers and they have the new infrastructure with Vera Rubin

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<v Speaker 5>in full production right now. So you also use Nvidia

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<v Speaker 5>in a way to sort of virtually game out a

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<v Speaker 5>scenario for a client virtually so they don't have to

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<v Speaker 5>necessarily have a physical prototype. Tell us about that.

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<v Speaker 6>Yeah, So if you look up until now, synthetic data

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<v Speaker 6>generation hasn't been accurately enough for robotics. Many of these

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<v Speaker 6>applications are fifty to sixty percent accurate, and when it

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<v Speaker 6>comes to systems that need to operate safely, at speed

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<v Speaker 6>and at skill in an industrial hardened environment, it hasn't

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<v Speaker 6>been achievable over the last year and a bits, and

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<v Speaker 6>we announced in March our collaboration within video. We've really

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<v Speaker 6>merged their capabilities in accelerated compute and their abilities with

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<v Speaker 6>wide world simulation with our industrial knowledge, our digital twin capability,

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<v Speaker 6>and of course our robots to address this sym to

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<v Speaker 6>real gap, and in a number of applications, most notably

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<v Speaker 6>in the electronic space, we managed to shrink that sim

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<v Speaker 6>to real gap to a very very close correlation. So

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<v Speaker 6>we can with a ninety nine percent accuracy now recreate

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<v Speaker 6>robot motion in the virtual space when compared to the

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<v Speaker 6>real space.

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<v Speaker 5>So what kind of cost savings are we talking about?

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<v Speaker 5>And also more importantly perhaps is time to market?

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<v Speaker 2>Oh?

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<v Speaker 6>Absolutely, you can now reimagine how you bring product to market.

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<v Speaker 6>So think if you're sitting in Taiwan right now, you're

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<v Speaker 6>designing a product here, you're having to apply it in China,

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<v Speaker 6>apply it in India, apply it in Vietnam. You need

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<v Speaker 6>to be able to in a concurrent way generate those

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<v Speaker 6>production systems, but also train them for all these manufacturing

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<v Speaker 6>edge cases so that you can then concurrently engineer, taking

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<v Speaker 6>probably out about fifty percent out of your time to market,

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<v Speaker 6>but also at the same time take about forty percent

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<v Speaker 6>of your total cost out because from day one you've

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<v Speaker 6>pre trained for all those manufacturing edge cases, so you

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<v Speaker 6>can hit productivity much more earlier than traditional systems.

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<v Speaker 5>So through this or just the big uptick obviously in

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<v Speaker 5>physical AI, how are new installations for you guys looking

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<v Speaker 5>this year.

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<v Speaker 6>I mean the electronics space specifically is going through a supercycle.

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<v Speaker 6>I think there's been a lot of activity on the

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<v Speaker 6>consumer electronics side, but also more recently, the AI compute

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<v Speaker 6>side has got to volume levels that have justified robotization.

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<v Speaker 6>Many of these systems up until now we're only partially

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<v Speaker 6>automated because of the lower volumes compared to the consumer electronics.

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<v Speaker 6>But I think you've all seen the headlines on data

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<v Speaker 6>centers and how that market is growing exponentially and with

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<v Speaker 6>that comes the robotization of that space.

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<v Speaker 5>What's your strategy for China because they have their own

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<v Speaker 5>infrastructure and their own indigenous innovation in robotics. Yes, I've

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<v Speaker 5>seen a lot of automobile factories with ABB robots. No

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<v Speaker 5>doubt they're going dark factories and the like. But again,

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<v Speaker 5>I think the cost basis because of their stem to

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<v Speaker 5>stern supply chain is about forty percent of what. Yeah,

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<v Speaker 5>I mean you're at the high end really, ABB. But

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<v Speaker 5>what is your strategy for China as they go up

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<v Speaker 5>the value chain on their industrialization?

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<v Speaker 2>Oh?

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<v Speaker 6>Absolutely, I think China is fifty percent of the world's

0:13:26.400 --> 0:13:29.000
<v Speaker 6>robot market. If you look at the IFR data so

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<v Speaker 6>they are obviously the dominant player in robotic automation from

0:13:33.800 --> 0:13:36.280
<v Speaker 6>a market perspective, and we've been there for the last

0:13:36.320 --> 0:13:39.800
<v Speaker 6>twenty years, and we've built our one of our main

0:13:39.840 --> 0:13:43.600
<v Speaker 6>production facilities in China, and we've got a long history

0:13:44.040 --> 0:13:48.560
<v Speaker 6>of helping Chinese system integrators and the ecosystem they evolve

0:13:48.720 --> 0:13:52.920
<v Speaker 6>and become more robots capable. Now, there's no doubt it's

0:13:52.920 --> 0:13:56.920
<v Speaker 6>a competitive space, but at the same time, we are

0:13:57.160 --> 0:14:00.200
<v Speaker 6>deeply present in China, and we are also using i

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<v Speaker 6>think the deeply integrated supply chain on the cost side,

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<v Speaker 6>but also on the system deployment side, this ecosystem of

0:14:08.679 --> 0:14:11.640
<v Speaker 6>fantastic value providers to come up with many of these solutions.

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<v Speaker 6>So we're active there.

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<v Speaker 5>A number of different parts makers in the whole IT

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<v Speaker 5>supply chain are talking about key component crunt right now

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<v Speaker 5>and prices obviously for memories going way up. How is

0:14:25.240 --> 0:14:27.400
<v Speaker 5>that impacting you? What are you seeing now?

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<v Speaker 6>I think in the global market of robotics. Actually we've

0:14:31.880 --> 0:14:35.200
<v Speaker 6>seen for the last few years, we haven't seen exponential

0:14:35.240 --> 0:14:38.280
<v Speaker 6>growth in the robotic space, so we haven't quite seen

0:14:38.360 --> 0:14:41.160
<v Speaker 6>the same pressures on supply chain that you might have

0:14:41.360 --> 0:14:44.200
<v Speaker 6>been seen coming from say the compute side and electronics

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<v Speaker 6>yet yet now definitely it's something to keep a close

0:14:48.280 --> 0:14:51.760
<v Speaker 6>eye on. The good part is, as we went through

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<v Speaker 6>the COVID time, we retooled many of our supply chains

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<v Speaker 6>to become more resilient to possible supply chain shortages. Resilience, certainly,

0:15:01.200 --> 0:15:03.000
<v Speaker 6>we believe is going to stand us in good stead

0:15:03.280 --> 0:15:05.280
<v Speaker 6>should they become a tighter supply market.

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<v Speaker 5>Could that be exacerbated by the exponential interest in humanoid robots?

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<v Speaker 5>I know you do industrial robots primarily, you do have

0:15:12.320 --> 0:15:15.360
<v Speaker 5>a division I think called you ME which is looking

0:15:15.400 --> 0:15:16.840
<v Speaker 5>at sort of cobots.

0:15:17.080 --> 0:15:20.920
<v Speaker 6>Absolutely. Yeah, so we are active in the cobot space,

0:15:21.840 --> 0:15:25.240
<v Speaker 6>but also we are very active in trying to make

0:15:25.240 --> 0:15:28.440
<v Speaker 6>our robots more intelligent and essentially utilize many of the

0:15:28.520 --> 0:15:31.560
<v Speaker 6>characteristics that you see out of a humanoid. We just

0:15:31.640 --> 0:15:35.640
<v Speaker 6>haven't seen the volume application of the humanoid form factor

0:15:36.200 --> 0:15:39.680
<v Speaker 6>in the industrial space. We've seen a slightly different form factor.

0:15:40.120 --> 0:15:42.920
<v Speaker 5>We see it's not as necessary it unless you need

0:15:43.120 --> 0:15:47.600
<v Speaker 5>dexterous hands for sorting and things like that in warehouses.

0:15:47.680 --> 0:15:51.120
<v Speaker 6>Right, yeah, yeah, it's not. But you can still achieve

0:15:51.160 --> 0:15:54.720
<v Speaker 6>that dexterity by putting your robot platform one wheels and

0:15:54.800 --> 0:15:57.640
<v Speaker 6>you can come up with much higher payloads. Now, some

0:15:57.680 --> 0:16:00.440
<v Speaker 6>of these technologies from humanoids are great await from a

0:16:00.440 --> 0:16:03.800
<v Speaker 6>supply chain perspective, We're not seeing those volumes and those

0:16:03.840 --> 0:16:06.480
<v Speaker 6>volume use cases yet impact our supply Chack.

0:16:06.400 --> 0:16:12.120
<v Speaker 2>Craig McDonald ABB Robotics, Business Line Managing Director, robot Industries,

0:16:12.480 --> 0:16:16.640
<v Speaker 2>speaking to Bloomberg Steven Engel from the sidelines of Computechs

0:16:16.720 --> 0:16:20.240
<v Speaker 2>in Taipei, and we are bringing their conversation to you

0:16:20.320 --> 0:16:27.360
<v Speaker 2>here on the Daybreak Asia Podcast. Thanks for listening to

0:16:27.360 --> 0:16:32.320
<v Speaker 2>today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday,

0:16:32.360 --> 0:16:36.280
<v Speaker 2>we look at the story shaping markets, finance, and geopolitics

0:16:36.280 --> 0:16:39.560
<v Speaker 2>in the Asia Pacific. You can find us on Apple, Spotify,

0:16:39.720 --> 0:16:43.200
<v Speaker 2>the Bloomberg Podcast YouTube channel, or anywhere else you listen.

0:16:43.640 --> 0:16:46.520
<v Speaker 2>Join us again tomorrow for insight on the market moves

0:16:46.600 --> 0:16:51.120
<v Speaker 2>from Hong Kong to Singapore and Australia. I'm Doug Prisoner

0:16:51.280 --> 0:16:52.680
<v Speaker 2>and this is Bloomberg