Speaker 1: From Mahard.
Speaker 2: We're Innovation of Money and Power Collie in Silicon Vallet NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Now from New York and San Francisco. This is Bloomberg
Speaker 3: Technology coming up. Taiwan accusing China of illegally poaching talent
Speaker 3: from its tech firms.
Speaker 4: We dig into the trade tensions.
Speaker 5: An X goes dark in Brazil.
Speaker 6: Judge is confirming a country wide suspension on the platform
Speaker 6: formerly known as Twitter.
Speaker 3: And short sellers are circling some of AI's biggest question
Speaker 3: marks as earning season in marches on analysis coming up,
Speaker 3: But first a check in on the pressure on the markets.
Speaker 3: It is a risk of day to kick off September.
Speaker 3: It is a month that generally is hard at work
Speaker 3: if you're long stocks. But certainly and as that one
Speaker 3: by two point three percent edited is the worst day
Speaker 3: since the beginning of August.
Speaker 4: And you're looking at the reasons why.
Speaker 6: Yeah, there's a lot of downward pressure on the chip sector.
Speaker 6: In fact, that's probably an understatement. The socks down six percent,
Speaker 6: it is biggest drop since August. First and that name
Speaker 6: there is a big reason why. And video down eight
Speaker 6: percent on track intra day for its biggest drop in
Speaker 6: about a month, although actually at times in the session
Speaker 6: it's biggest dropped since April. There isn't really a clear catalyst.
Speaker 6: There may be some hangover from earnings. Ian King and
Speaker 6: I writing about how Jensen one's often resounding message didn't
Speaker 6: quite get through last week. But maybe there's some macros
Speaker 6: things going on here. We also have chip earnings to
Speaker 6: come Carrot we.
Speaker 3: Do, and let's just look broader for a moment ed
Speaker 3: in the world of chips and to one Ian King
Speaker 3: to help us, because Taiwan says Chinese chip companies are
Speaker 3: quote illegally poaching talent and trade secrets and are scoring
Speaker 3: a heated global rivalry that is developing the key technology
Speaker 3: used in phones and cars in ai Let's bring in
Speaker 3: inking and look, perhaps unsurprising, the tit for tat continues.
Speaker 4: What did you make of it?
Speaker 7: Yeah, I mean this is a recurring theme. We've seen
Speaker 7: US companies kind of dragged into this. And the biggest
Speaker 7: concern is this island is obviously a huge concentration of talent,
Speaker 7: very important talent in this industry. If you can't get
Speaker 7: the equipment, like a lot of the Chinese companies can't
Speaker 7: these days because of US trade sanctions, maybe they can
Speaker 7: get the expertise and build their own and that is
Speaker 7: a continuing concern. So you're see in companies like Nara
Speaker 7: in China and equivalent of applied materials being accused.
Speaker 6: The narrow case study outlined is that Narra supplies China's
Speaker 6: biggest chip maker or contract manufacturer, which is Semiconductor Manufacturing
Speaker 6: International or SMIC or SMICK. Extrapolate on that case study
Speaker 6: why this would be of particular a grievance to Taiwan.
Speaker 7: Yeah, I mean it's a way around their strengths because
Speaker 7: Snake is obviously a massive well would be COMPETITIVESMC. It's
Speaker 7: probably the best Chinese contract manufacturer. So what Taiwan really
Speaker 7: doesn't want is an erosion of its own talent based
Speaker 7: flowing into mainland China. And this is obviously a concern
Speaker 7: for the US as well.
Speaker 5: Well.
Speaker 6: That bigger concern for the US it's labeled as being
Speaker 6: China's potential access to technology that would give them an
Speaker 6: advantage from the military context. Is that kind of the
Speaker 6: core of US policy around.
Speaker 7: This it is, I mean, that's what it all started
Speaker 7: with under the Trump administration. The argument is that we
Speaker 7: need to stop China from getting access to advanced semiconductors
Speaker 7: because of what it will do for its military capabilities.
Speaker 7: But obviously since then it's flowed into other areas and
Speaker 7: made this a real focus of economic competition between the
Speaker 7: two countries, and.
Speaker 3: Not just two countries embroiled in because the US is
Speaker 3: leaning on others.
Speaker 7: Yeah, no, you're absolutely right, Carol. And what we've discovered
Speaker 7: along the way, and it's been along two or three years,
Speaker 7: is that unless Japan, unless the Netherlands in the form
Speaker 7: of ASML, restrict access to China of their key technologies,
Speaker 7: and perhaps there are workarounds, there are workarounds that China
Speaker 7: can make. And obviously what we're seeing with this Taiwanese
Speaker 7: situation is another attempt at work around. And if you Chinese,
Speaker 7: it's a legitimate thing to do. Would they want the
Speaker 7: technology for their economy, But obviously from the Western perspective,
Speaker 7: this is a worrying development.
Speaker 5: Bloomberg's in king, thank you very much. Now.
Speaker 6: With Taiwan's growing dominance in advanced chips, Bloomberg News took
Speaker 6: a deep dive into how the boom in that sector
Speaker 6: is affecting its economy.
Speaker 5: More broadly, have a listen.
Speaker 8: Taiwan is the home of our treasured partners.
Speaker 9: This is, in fact, where everything in video does begins.
Speaker 2: It's become a lynchpin of the global economy. Taiwan's dominance
Speaker 2: in advanced chips grown through the AI boom, creating fortunes
Speaker 2: in the process local industry billionaires and ninety percent riches
Speaker 2: since the introduction of CHATCHIBT November twenty twenty two. While
Speaker 2: stocks in Taipei have searched, property prices hit a record
Speaker 2: high in March, with the biggest gains in the city
Speaker 2: of Sinchu, the home of semiconductor giant TSMC. That wealth
Speaker 2: boom is raising fears some will be left behind.
Speaker 4: There is.
Speaker 10: A worsening of income distribution across the board, and I
Speaker 10: don't see any any measure to improve this at the
Speaker 10: current juncture. Parents take the brand I have in their
Speaker 10: kids buying apartments, and somebody's not sustainable because the next generation.
Speaker 4: Won't be able to do this.
Speaker 2: Taiwan's government, though, has set ambitious growth goals, seeking a
Speaker 2: one trillion dollar economy by twenty twenty eight, with GDP
Speaker 2: per capita set to surpass that of South Korea next year.
Speaker 2: Anna belt Ruler's Bloomberg News Now.
Speaker 4: More on geopolitics.
Speaker 3: China's top easy makeer BYD says it won't announce plant
Speaker 3: investment in Mexico until at least after the US election.
Speaker 4: It's all according to.
Speaker 3: Sources, this as shifting American policy forces global businesses into
Speaker 3: weight and C mode. That's keet the technology investors reaction
Speaker 3: and erathments with ours CIOC this investment advisory services.
Speaker 4: This is a theme manner.
Speaker 3: More companies feeling a lack of clarity from the US
Speaker 3: right now.
Speaker 1: Yes, it's a bit unusual to be this far into
Speaker 1: the election cycle with the election actually just around the corner,
Speaker 1: especially if you account voting not at the boot early voting,
Speaker 1: it can now have any clarity on the economic policies.
Speaker 1: And certainly our partners outside of the US are nervous,
Speaker 1: just as we may be here.
Speaker 3: Let's talk about what you've been seeing domestically. There is
Speaker 3: a lack of clarity because the election has not happened,
Speaker 3: but the policy leanings that we're hearing, for example, from
Speaker 3: now the Democratic ticket. All you've feeling that companies all
Speaker 3: you yourself as an investor changing how you look at
Speaker 3: companies based on US wanting well more geopolitical tension with
Speaker 3: China not less.
Speaker 1: Well, you know, China, I think is a special topic.
Speaker 1: I don't think it's I think it's party agnostic. I
Speaker 1: think that's one topic that Washington can agree on is
Speaker 1: being a bit hawkish towards China. And it has been
Speaker 1: this way for many years. So you know, when companies
Speaker 1: like Buid say that they want to wait until election
Speaker 1: is over, I wonder to myself if some of that
Speaker 1: is just the company saying that the election itself is
Speaker 1: a bit of an uncertainty for the markets, or if
Speaker 1: it truly is it believes that there's going to be
Speaker 1: a policy difference, because from where I sit, I don't
Speaker 1: think there is Both the Democratic parties, certainly it wasn't
Speaker 1: Harris at the time, it was President Biden as well
Speaker 1: as the Trump campaign. They've both been very hawkish, especially
Speaker 1: on evs that may be coming over from Mexico. So
Speaker 1: I think this is more noise than it is actually
Speaker 1: something that could be solidified into one party versus another
Speaker 1: being favorable to view Id or any other companies.
Speaker 5: And you see that the Chinese issues by partisan.
Speaker 6: Difficult, But is there a clear pro tech policy platform
Speaker 6: or pro tech investment for either outcome of this presidential
Speaker 6: election in the US.
Speaker 1: And I think that's the hard part is that we
Speaker 1: don't know. It's the hard part. There is some policy
Speaker 1: generalities that we've heard of from either actually both parties,
Speaker 1: but there are any specifics that could make investors say, Okay,
Speaker 1: this is pro tech. If anything, I think there's increased
Speaker 1: pressure on tech with AI and certainly chips right AI
Speaker 1: enabled enabling chips.
Speaker 5: There's a lot of.
Speaker 1: National suitcurity concerns and we've seen this in the last
Speaker 1: few years. This is not anything new, and I don't
Speaker 1: think it's going to be something that's going to be
Speaker 1: new after this election is over.
Speaker 6: In markets, there is seldom just one single headwind nor
Speaker 6: tail when at any one time there are multiple. Which
Speaker 6: is the greater focus for you right now? Central bank
Speaker 6: policy or November?
Speaker 11: For US?
Speaker 1: Right now, it is definitely central bank policy because there's
Speaker 1: so much uncertainty. There's a lot of noise we're trying
Speaker 1: to ignore. The FED, I think is more on the
Speaker 1: closer docket, especially with the September rate cuts at the
Speaker 1: market seem to be expecting. We are definitely expecting it.
Speaker 1: We've never been in the fifty basis point camp. We're
Speaker 1: still in the twenty five basis point camp. But we
Speaker 1: think that could be a start of a cycle. Twenty
Speaker 1: five basis points isn't that big, so you know, it's
Speaker 1: not going to make or break a company that needs
Speaker 1: to borrow, but a certainly a cycle would be a
Speaker 1: signal to the markets.
Speaker 5: And that could be the tie that lifts all boats
Speaker 5: tech certainly, but.
Speaker 1: Not just tech, but other areas of the market that
Speaker 1: have been suppressed for about eighteen months now.
Speaker 3: And all boats are not rising today in faederal falling.
Speaker 4: But ship's the hardest.
Speaker 3: Do you invest in AI and chips at this moment?
Speaker 1: I think that depends on your time frame. If you're
Speaker 1: a long term investor like US, Chips definitely has a
Speaker 1: place because this AI thing is not over. It is
Speaker 1: not a hype. It needs to get cleaned up over time.
Speaker 1: But if you're a long term investor, that's the infrastructure
Speaker 1: that is at the center of how you develop AI.
Speaker 4: So I think it can be.
Speaker 1: An exciting expect It might be a buying opportunity, but
Speaker 1: certainly for the long term.
Speaker 6: And there is anxiety in the market this morning, we're
Speaker 6: showing it on the screen. Were you left from Nvidia's
Speaker 6: earnings with confidence or are you still looking for more
Speaker 6: data on how long this investment cycle has to run.
Speaker 1: Certainly more data, But I wasn't pessimistic about it. Look,
Speaker 1: I mean they beat right, it was just not good
Speaker 1: enough for the market. That tells you more about the
Speaker 1: valuations of the markets than about the company itself. So
Speaker 1: we're not pessimistic. But at the same time, you sort
Speaker 1: of wonder how long.
Speaker 4: Does this have to go?
Speaker 5: Right?
Speaker 1: And they have great market share right now, but when
Speaker 1: do the companies like Facebook and other companies that they
Speaker 1: rely on for their revenues say enough is enough? And
Speaker 1: that is the uncertainty that I think is coming down
Speaker 1: the line, maybe in twenty twenty five, twenty twenty.
Speaker 6: Six, Anna Rathan COIOCBIS Investment of Advisory Services.
Speaker 5: Thank you very much so.
Speaker 6: Coming up on the show, Brazilian judges ruling against Mask,
Speaker 6: upholding a nationwide ban against his social media platform X.
Speaker 6: We have the reports from the ground next and take
Speaker 6: a look at Intel.
Speaker 1: Cara.
Speaker 6: Investors are basically bracing for more information the chip makers
Speaker 6: presenting the city Global Technology Conference tomorrow and the options
Speaker 6: market pricing in a swing of around five percent in
Speaker 6: either direction on whatever's said.
Speaker 5: Reminded. Last week, Bloomberg reported that intels.
Speaker 6: Us its bankers to find strategic options like separating out
Speaker 6: its foundry business to start caught up with the chip
Speaker 6: slump down more than six percent in the session.
Speaker 5: We'll be right back. This is Bloomberg Technology.
Speaker 3: Quick check on the markets for you, because we are
Speaker 3: in sell off mode once again, as we were on
Speaker 3: August the first. We are down significantly on the Nasdaq
Speaker 3: and indeed across some key chip players. We are wiping
Speaker 3: off one hundred and ninety billion dollars in market cap
Speaker 3: from and Video.
Speaker 4: At the moment, the worst.
Speaker 3: Day since August the first, Broadcom has its earnings. All
Speaker 3: eyes were down more than four and a half percent.
Speaker 3: Apple off by more than one let's call it almost
Speaker 3: two percent, but pressure across the market.
Speaker 4: We will keep you attuned to it. But let's dig into.
Speaker 3: Some individual stories for you in the technology world. And
Speaker 3: Brazil Supreme Court upheld in order to banning on Mousqu's
Speaker 3: social network X as part of efforts to combat fake
Speaker 3: news and hate speech. Now Brazil joins China, Russia and
Speaker 3: North Korea in banning access to certain social networks mean
Speaker 3: most Daniel Cavallo is with us covering from Brazil and look,
Speaker 3: this really is Supreme Court winning out here at the moment, Daniel.
Speaker 11: Yes, well, happic days here in Brazil. Let me tell
Speaker 11: you how this story started and beginning since the beginning
Speaker 11: of the year. Morai is a justice from the Supreme
Speaker 11: Court Periance zim edition. Maris has ordered the block of
Speaker 11: some X accounts that were spread in hate speech and mask.
Speaker 11: He wouldn't comply with this disorder. Disorder so WHATRA has
Speaker 11: begun to impose fines on X. They didn't pay, so
Speaker 11: Brazil's justice was looking for who was the legal representative
Speaker 11: of the company in Brazil. I'm surprised there was nobody
Speaker 11: and this position. So last week, just as Maria said
Speaker 11: that Twitter would have twenty four hours to nominate someone
Speaker 11: for this position, it didn't happen. So Friday night he
Speaker 11: ordered the block of X in Brazil.
Speaker 6: There are some outstanding questions Daniel about one of Elamus's
Speaker 6: other companies, which is SpaceX and it's starlink satellite based
Speaker 6: internet service. What are the considerations from the courts around
Speaker 6: Starlink and what they might do.
Speaker 11: Well, what I has ordered the block of bank accounts
Speaker 11: of Starlink because as X wasn't paying for the fines
Speaker 11: that was that were in posed for the company. What
Speaker 11: I said, Okay, so we're going to block the accounts
Speaker 11: of another company in the country. And it's very controversial
Speaker 11: here in Brazil because there are two different companies. Yesterday,
Speaker 11: the panel of the Supreme Court, they confirmed the order
Speaker 11: to ban X in Brazil, but they didn't discuss the
Speaker 11: startling part of the problem. It's yet to come.
Speaker 6: Bloomberg, Daniel Carvalio, thank you very much for some on
Speaker 6: the ground reporting. Another big story we're tracking is in
Speaker 6: the world of smartphones. Next week, Apple unveils its latest
Speaker 6: iPhone lineup, another new tech, but only a few hours later,
Speaker 6: Huawei will do exactly the same for its products, setting
Speaker 6: the stage for a smartphone few Let's discuss with Bloomberg
Speaker 6: Technology editor Dana Wohlman and in the Technology report a
Speaker 6: toolkit events are key. The difference with Huawei is that
Speaker 6: this is about products largely for the Chinese market. But
Speaker 6: my goodness, the timing is curious, isn't it.
Speaker 12: It is and normally, this is the sort of move
Speaker 12: that Apple would take scheduling really cheekly scheduling an event
Speaker 12: right on the heels of a competitors event. So for
Speaker 12: Huawei to do that to Apple is almost like Huawei
Speaker 12: out appling Apple in this case.
Speaker 3: Talking of out appling, they talk about an epolk making product,
Speaker 3: everyone thinks it's going to be a several times folding phone.
Speaker 3: How much does that play to the Chinese market for Huawei?
Speaker 12: So this would really be building on some tremendous momentum
Speaker 12: for Huawei. According to IDC data from the most recent quarter,
Speaker 12: Huawei made it into the top five for Chinese smartphone shipments,
Speaker 12: knocking out Apple, which was quite extraordinary. And so this
Speaker 12: would really be building on Huawei's success in its home country.
Speaker 12: And as you say, the device is rumored to have
Speaker 12: foldable creases in not just one spot, but two spots,
Speaker 12: and that would be a really interesting form factor. It
Speaker 12: would be a first of its kind that ships to
Speaker 12: the public. And what that really means in Layman's terms,
Speaker 12: is you can get a much bigger, more tablet laptop
Speaker 12: size screen that can compress compactly when folded into the
Speaker 12: size of a reasonably sized smartphone.
Speaker 6: I've been invited to the Apple event which is here
Speaker 6: in California on September ninth. It had been, according to
Speaker 6: our reporting September tenth, but you've got the first US
Speaker 6: presidential debate on the tenth, so it's a choco block calendar.
Speaker 6: Just recap the Apple side, what we expect from them,
Speaker 6: and what Bloomberg's reporting tells us about the product lineup.
Speaker 12: So according to my colleague Mark German, the devices will
Speaker 12: not physically, in an exterior way look much different from
Speaker 12: previous iPhones, and to some consumers that may come as
Speaker 12: a disappointment. The iPhone hasn't seen a major redesign since
Speaker 12: twenty twenty, so a lot of people would think the
Speaker 12: iPhone is due for something just more striking looking. But
Speaker 12: indeed one of the biggest selling points will be the
Speaker 12: suite of new AI features, and even those, according to Mark,
Speaker 12: will have a slower rollout than consumers may have liked
Speaker 12: and possibly even Apple would have preferred.
Speaker 4: Dana Wollman keeping us up to speed.
Speaker 3: Hewlett Packard Enterprise HPE says it intends to pursue the
Speaker 3: four billion dollar damages claim in London against the estate
Speaker 3: of the recently deceased British tech tycoon Mike Lynch. I
Speaker 3: mean most Jonathan Browning is here with more. This is
Speaker 3: a controversial and difficult decision, I.
Speaker 5: Imagine it is.
Speaker 6: And yet Hewlett Packard Enterprise, which is the entity that
Speaker 6: has responsibility for the British case, has said that it
Speaker 6: intends to pursue this claim to the end. Just to
Speaker 6: distinguish between the two cases, there was a US criminal
Speaker 6: case that Mike Lynch was found not guilty in, and
Speaker 6: then there was the British case in London.
Speaker 5: And in the London.
Speaker 6: Case, Hewlett Packard sued Mike Lynch and his former chief
Speaker 6: financial officer over the collapse of Autonomy, the software company,
Speaker 6: and they found and the judge found that Mike Lynch
Speaker 6: had fraudulently boosted the value of Autonomy. We are now
Speaker 6: at the point where we are waiting to see whether
Speaker 6: those damages can be collected, and HP yesterday said they
Speaker 6: intend to do so. It is little more than one
Speaker 6: week since Mike Lynch's body and that of his daughter
Speaker 6: were recovered from the sunken yacht off the coast of Italy.
Speaker 6: That it's an extraordinary story. Jonathan, could you just explain
Speaker 6: kind of procedurally, what is happening at the moment with
Speaker 6: the investigation of what happened and now this legal challenge
Speaker 6: at the same time. Yeah, So in Italy the prosecutor
Speaker 6: has opened the preliminary inquiry. They are looking at potential
Speaker 6: manslaughter charges relating to the foundering of this luxury yacht,
Speaker 6: the Asian, that sank in such a short period of time,
Speaker 6: when when severe weather struck, and they'll be looking at
Speaker 6: human error and an all host of other issues. But
Speaker 6: as you say, it's it's it's just a few days
Speaker 6: since that happened. And then and then HPE comes out
Speaker 6: with their own statement that in in London they will
Speaker 6: they will carry on the case. And lawyers will tell
Speaker 6: you that in a in a in a British case,
Speaker 6: the claim can fall to the estate in the event
Speaker 6: of a death.
Speaker 5: And so in this case.
Speaker 6: HPE will be pursuing the claim against the estate of
Speaker 6: Mike Clinch, that is his recently bereaved widow who was
Speaker 6: on the boat and managed to escape, as well as
Speaker 6: his his daughter who wasn't on board.
Speaker 3: And as your story says, that men like you to
Speaker 3: face criticism going ahead with the claim, but Hewlett Packard
Speaker 3: Enterprise has its earnings.
Speaker 4: Hate to bring it back to that, but has its
Speaker 4: earnings this week.
Speaker 3: They were likely to face questions, Jonathan, So maybe they're
Speaker 3: getting ahead of that.
Speaker 5: Yes.
Speaker 6: I think that's probably the likely the likely reason why
Speaker 6: we know this now because the simple fact is that
Speaker 6: the actual court case is still weeks from conclusion. Bloomberg,
Speaker 6: Jonathan Browning, thank you very much for your reporting.
Speaker 3: Welcome back to Bloomberg Technology. I'm Caroline Hide in New
Speaker 3: York and.
Speaker 5: I'm Ed Ludlow in San Francisco.
Speaker 3: And it is a down day to start this month
Speaker 3: of September, post Labor Day, the jolt comes back.
Speaker 4: We are risk off.
Speaker 3: We're just going to move on from this board to
Speaker 3: what is happening on the Nasdaq more broadly at the moment,
Speaker 3: because we are off by more than two percent at
Speaker 3: the moment on the Nasdaq one hundred and in life
Speaker 3: large part it is the chip names that are dragging
Speaker 3: us lower. I'm looking at a sell off that means
Speaker 3: risk aversion that means money pours into the bomb market.
Speaker 3: Tenure yields come down some five basis points. Bitcoin as
Speaker 3: well suffering from the risk pushback. We're down by two
Speaker 3: percentage points. Move on the individual moves that I'm having
Speaker 3: a quick look at for you are some European names. Look,
Speaker 3: Europe has just closed and we have seen SAP under
Speaker 3: pressure not that much off by eight ten percent.
Speaker 4: The CTO steps.
Speaker 3: Down for some inappropriate behavior we understand had a previous role.
Speaker 3: We see Delivery Hero down by one point three percent. Again,
Speaker 3: this is German company, but actually has a Middle.
Speaker 4: Eastern unit that it's looking to.
Speaker 3: Well, maybe IPO in Dubai and bankers have been talked to.
Speaker 3: In video though front and center ed. We must keep
Speaker 3: showing this the fact that the Invidium name is down
Speaker 3: by seven percent, worst day since August the first the socks.
Speaker 4: Nearly every player is on the.
Speaker 6: Downside, right and given in Video's market cap or waiting
Speaker 6: in indexes, it's important come back to me on the
Speaker 6: other megacap names though, because it's a similar story kind
Speaker 6: of bias so.
Speaker 5: And broad my anxiety.
Speaker 6: They're the biggest points drag after in Video on the
Speaker 6: Nasdaq one hundred at least, I.
Speaker 5: Don't see any news out there. I don't see any catalysts.
Speaker 6: The lead of the Bloomberg Global Markets RAP is firmly
Speaker 6: on Nvidia. But these are noteble declines, and of course
Speaker 6: we just talked about Apple in its event next week.
Speaker 6: Probably expect some volatility in the interim. Let's get to
Speaker 6: one of the top stories on the Bloomberg terminal. Wall
Speaker 6: Street is getting into shorts as traders hunt for winners
Speaker 6: and losers in the AI race. Check out super Micro,
Speaker 6: Lumen and Symbiotic. They were hit by various research reports
Speaker 6: questioning their valuations and the ches as a results of
Speaker 6: getting punished. Bloomberg's Bilea Lipshaltz has been writing about this
Speaker 6: and fresh in the mind because we covered it so
Speaker 6: deeplyyond the show. But Hindenburg's short sellers report on super
Speaker 6: Micro is kind of the latest high profile example. But
Speaker 6: just explain what you're trying to outline in your piece.
Speaker 8: Well, and when you mentioned super Micro, this is a
Speaker 8: company that went from just about two billion dollars in
Speaker 8: market cap up to sixty six billion dollars in market
Speaker 8: cap in just about two years. So we're seeing a
Speaker 8: number of these AI beneficiaries, whether it's super Micro with
Speaker 8: their business. Symbolic is a company that makes warehouse automation
Speaker 8: robots and has a play or at least they pitched
Speaker 8: themselves as of AI related company. Lumin Technologies has seen
Speaker 8: shares rally over the last few months given their positioning
Speaker 8: within the AI trade as well. And we're just seeing
Speaker 8: to an extent a number of activist shorts, whether it's Hindenburg,
Speaker 8: Carasdale and some of the others, just kind of calling
Speaker 8: out and diving deeper into these companies, into their operations,
Speaker 8: into what they're actually doing. And that's something that it
Speaker 8: seems like with these manias, whether it's Bitcoin, whether it's
Speaker 8: pot stocks or AI, we see Wall Street more than
Speaker 8: happy to pile into the number of these stocks, a
Speaker 8: lot of these very good companies, and we've seen that
Speaker 8: with Nvidia over the last few years. But when the
Speaker 8: scrutiny kind of gets ramped up in maybe a risk
Speaker 8: off tone like we've seen today, that's when a number
Speaker 8: of these companies can fall under pressure. And that's really
Speaker 8: what those short reports have called out again, four companies
Speaker 8: for very different reasons for their bearish reports, but nonetheless
Speaker 8: each pretty much down more than twenty percent since those
Speaker 8: reports were published.
Speaker 3: Is anyone willing to buy the dip here, because actually
Speaker 3: super Magu is on the up today only but a
Speaker 3: percentage point.
Speaker 5: It's up one point four percent.
Speaker 8: Again, the concerns from last week from the Hindenburg report,
Speaker 8: from the delayed filing kind of just caused people to
Speaker 8: rethink and recalibrate some of those bets. Has the company
Speaker 8: come too fast, too high, too quickly?
Speaker 5: Again?
Speaker 8: It was trading north of six hundred and twenty five
Speaker 8: bucks just a few weeks ago and still only at
Speaker 8: four forty six right now. We're searching for or separating
Speaker 8: winners and losers, is one of the quotes in the story.
Speaker 8: I think we've dwelled on the losers. Who the winners
Speaker 8: out there? Have you been able to find them?
Speaker 5: Bailey?
Speaker 8: Well, we've seen a number of them met Right Even
Speaker 8: with Nvidia's fall off today of seven percent, if you
Speaker 8: bought in really at any point for the most part
Speaker 8: over the last two year years, the stock is absolutely ripped.
Speaker 8: We're still it seems, and I know I think you
Speaker 8: would probably know better than I. It still seems like
Speaker 8: investors right now are teasing out the picks and shovels,
Speaker 8: if you will. We see on the private markets the
Speaker 8: open AI latest funding around, that's a tremendous valuation for
Speaker 8: a company.
Speaker 5: So the big concern, at least when.
Speaker 8: I talk to folks, whether it's later stage investors or
Speaker 8: those growth and crossover investors, is where are you finding
Speaker 8: that value? And as we see companies stay longer or
Speaker 8: say private long for longer and raise some pretty eye
Speaker 8: popping valuations, that's where people are putting money to work.
Speaker 8: But we're also still seeing with the super micros of
Speaker 8: the world and in videos of the world AMDs, that
Speaker 8: there still.
Speaker 5: Is a lot of money to be made.
Speaker 8: The big question is where what is the proper valuation
Speaker 8: and when do you, as Carol put it by the
Speaker 8: dip and how does that kind of fit into a
Speaker 8: broader portfolio?
Speaker 4: Any lipshiwz. That's a great story. We thank you.
Speaker 3: Meanwhile, though, look, a key question still out there for
Speaker 3: investors is regulation. In California, the legislature has actually approved
Speaker 3: a controversial AI safety bill last week, which requires companies
Speaker 3: to make sure their technology doesn't cause major harm.
Speaker 4: It now faces its biggest test.
Speaker 3: In front of California Governor Gavin Newsom, who has stated
Speaker 3: he doesn't want to overregulate the state's dominant AI sector.
Speaker 3: The bill has drawn both criticism and praise from a
Speaker 3: series of national figures Wheny Gonzalez is with us to
Speaker 3: discuss this.
Speaker 4: She is the CEO of.
Speaker 3: SAMA, which provides high quality training data to power AI technology.
Speaker 3: And I would have thought you've been doing well as
Speaker 3: all companies suddenly want to be able to label their
Speaker 3: data and use large language models. What do you make
Speaker 3: of this regulation going through California?
Speaker 13: So AI can be a force for good, but it
Speaker 13: does need some safety guards and some guardrails put in place.
Speaker 13: I think this is really a signal that the unregulated
Speaker 13: era of AI is over. I think that first step
Speaker 13: was with the eu AT that happened and was ratified
Speaker 13: overwhelmingly last year by the majority of the year union.
Speaker 4: The worry for.
Speaker 3: Some in the market open AI has been a voice
Speaker 3: for this Wendy, is that the regulation coming through will
Speaker 3: harm in particular smaller companies and also open source large
Speaker 3: language models.
Speaker 4: Is that something that you agree with or is this the.
Speaker 3: Necessary step taken to ensure that AI remains for good.
Speaker 13: Well, it's a tricky regulation to put in place. There's
Speaker 13: always this balance of ensuring that we're not stifling innovation
Speaker 13: while trying to reduce harm and to create transparencing in AI.
Speaker 13: Within the SB ten forty seven regulation itself. There are
Speaker 13: some parameters related to the amount invested in AI, so
Speaker 13: they're trying to find a little bit of a balance
Speaker 13: of if it is a large scale model that is
Speaker 13: that has you know, over one hundred million of investment
Speaker 13: or ten million dollars to deploy that, that is what
Speaker 13: would be subject to this as well as AI that
Speaker 13: could be used to enable cyber attacks to critical infrastructure
Speaker 13: such as energy, you know, nuclear, you know, chemicals as
Speaker 13: an example.
Speaker 4: So it's about NDY.
Speaker 6: We spoke to academics who said they were consulted but
Speaker 6: didn't like the content of the bill. We spoke to
Speaker 6: Senator Scott Wiener who said he spoke to everyone he
Speaker 6: could and tried to get input from as many people
Speaker 6: as possible.
Speaker 5: Then you have Meta that's against it.
Speaker 6: From the open source perspective, why couldn't we find a
Speaker 6: bill that basically worked for a broad coalition given all
Speaker 6: the talk about it.
Speaker 13: It's true that it is someone incomplete. I think one
Speaker 13: of the best things that can be done is that
Speaker 13: public private partnership where you know, companies like Meta open
Speaker 13: A I know there's are really on the leading edge
Speaker 13: of developing this technology, and I think there were a
Speaker 13: few things that were basically incomplete in this. One was
Speaker 13: that there, you know, is the notion of kill switches.
Speaker 13: The other is this notion of having third parties tests. Well,
Speaker 13: that becomes really difficult for proprietary AI right yourself up
Speaker 13: to a third party, and that's a reason why companies
Speaker 13: may not want to participate. Then there's some other important
Speaker 13: items like sandboxes, So an AI research and development is
Speaker 13: a critical part of this. If we don't have some
Speaker 13: content around how sandboxes can be leveraged to test out
Speaker 13: whether there are actual harms, I think it could become
Speaker 13: very challenging. So really, at the end of the day,
Speaker 13: what I think everybody's wasting some concern on is we
Speaker 13: don't want to have any unintended consequences, whether it is
Speaker 13: IP stifling of invation ye. At the same time, I
Speaker 13: think we could all agree, and most Californias probably do
Speaker 13: agree that some safeguards for this pervasive technology are necessary.
Speaker 6: Wendy Summer provides data labeling and evaluates models. How is
Speaker 6: the bill and its content is going to impact you
Speaker 6: in practice?
Speaker 13: Well, one of the most critical things about developing responsible
Speaker 13: AI is having some human centric validation. So I believe
Speaker 13: that this will ultimately drive forward some additional measures for
Speaker 13: both human centric validation, quality and management systems. So I
Speaker 13: think there could be an increase ultimately over time. But
Speaker 13: what we do see is that a lot of companies,
Speaker 13: including big tech, probably do a little bit more than
Speaker 13: maybe the public is aware of in terms of trying
Speaker 13: to provide these safeguards. Now it's really about putting forth
Speaker 13: a regulation that balances that and really create some transparency.
Speaker 13: So we've seen it happen before, certainly, whether it was
Speaker 13: green emission standards set up by California or you know,
Speaker 13: laws like GDPR in Europe where they did set forth
Speaker 13: a wave of actions that ultimately companies had to comply with.
Speaker 13: So well, I wouldn't say it, you know, we're seeing
Speaker 13: it droves right now. I do think over time companies
Speaker 13: are going to need to think about this because, as
Speaker 13: I mentioned before, I think the unregulated era is coming
Speaker 13: to an end.
Speaker 3: Mindy Gonzade is great test in time with the CEO
Speaker 3: of Sama. Now we want to stick on the theme
Speaker 3: of AI. But the set off thing that we're currently
Speaker 3: seeing in the markets ed this is of the start
Speaker 3: of August all over again. We're down by two percent
Speaker 3: on the NASAQ one hundred we're looking at in video
Speaker 3: being the biggest points drag once again, obviously when it's
Speaker 3: worth so much two hundred billion dollars being wiped off
Speaker 3: on one day alone in its market cap.
Speaker 6: At least in the first week of August, there was
Speaker 6: something to point towards right the unwinding of the yen
Speaker 6: carry trade central banks. There just seems to be a
Speaker 6: lot of anxiety for no specific reason or catalysts in
Speaker 6: the market. In the global wrap on the Bloomberg points
Speaker 6: out that, like you said, Caro, August in September historically
Speaker 6: pretty tough. Yeah, chip makers are doing badly, but there
Speaker 6: are other sectors at play, like the energy sector. I
Speaker 6: don't know where else we could look.
Speaker 3: Yeah, oil down sub seventy five dollars if you're looking
Speaker 3: at Brent. But it's notable that Tiro have come out
Speaker 3: a particular fund manager there saying, look, I am worried
Speaker 3: once again about a yen shock, seeing another one coming.
Speaker 4: Maybe it is the same cause.
Speaker 3: Of anxieties that we saw in September, always being a
Speaker 3: pretty tough month if.
Speaker 4: Your long equities.
Speaker 3: We're going to stick on this theme throughout, but coming
Speaker 3: up another busy slate of earnings with AI and focus
Speaker 3: there too, looking ahead to results. Broadcom from HP Enterprise
Speaker 3: that conversation, I'm next, this is Broo Meg Technology.
Speaker 6: Okay, time for talking tech and first up in the news.
Speaker 6: DirectTV says customers lost access to what Disney programming today
Speaker 6: after the company's failed to reach a new licensing pack.
Speaker 6: The company also says Disney sought a waiver to all
Speaker 6: claims that its behavior is anti competitive as part of
Speaker 6: any new deal. Plus, South Korean startup Rebellions is planning
Speaker 6: to go public as early as the end of twenty
Speaker 6: twenty five, seeking to capitalize on booming demand for the
Speaker 6: chips used to power generative AI. Plans to select global
Speaker 6: banks for a domestic listing around March. And Airbnb is
Speaker 6: urging New York City officials to scale back a local
Speaker 6: regulation that outlawed most of its short term rental listings
Speaker 6: when it came into effect nearly a year ago, citing
Speaker 6: impacts on travelers and hosts. The company says the regulation
Speaker 6: has quote failed to deliver on the promise to combat
Speaker 6: the housing crisis.
Speaker 5: Caroline and let's.
Speaker 3: Just return our attention to earnings because there are still
Speaker 3: some to come. Believe it or not, HPE and Broadcoms
Speaker 3: set to reveal actually pretty healthy growth in quarterly reports
Speaker 3: this week. That will also be sifted for clues on
Speaker 3: the longevity of pretty heavy corporate spending on AI. Let's
Speaker 3: break it all down, men intelligence analyst man needs saying.
Speaker 3: I'm going to start with Broadcom. The market is anxious today.
Speaker 3: It seems to be a report coming from the Semiconductor
Speaker 3: Industry Association showing below seasonal trends. But what will we
Speaker 3: dissect from Broadcom more broadly?
Speaker 9: Look, they are a pretty diversified company, and you look
Speaker 9: at their two main segments. You know, the software side
Speaker 9: is recurring in nature. They tend to focus a lot
Speaker 9: more on cybersecurity, and as we know from the crowd
Speaker 9: strike outage, cybersecurity spending actually has done pretty well, and
Speaker 9: in fact our survey suggest it should there should be
Speaker 9: an uptick as a result of their outage on the
Speaker 9: semiconductor side. Look, every hyperscaler has told us they're overinvesting
Speaker 9: right now in AI infrastructure build up. And granted, you
Speaker 9: know sixty percent of the dollars are going to Nvidia,
Speaker 9: but the remainder. I would say Broadcom, Marvel. We saw
Speaker 9: the print from Marvel was pretty strong because all these
Speaker 9: hyperscalers are focusing on custom chips. I mean, at the
Speaker 9: end of the day, whether it's Amazon or Google, they
Speaker 9: want to do their in house chips as well as
Speaker 9: a lot of the enterprises that are focused on compliance
Speaker 9: aspects of jen AI. They don't want to build everything
Speaker 9: on the cloud. So to my mind, a company like
Speaker 9: Broadcom that's giving you all the you know, the basic
Speaker 9: infrastructure you need, whether it's on the networking side or
Speaker 9: the custom chip development, they should benefit from the trend
Speaker 9: and the capexpen vire seeing.
Speaker 6: And BROADCM may not say it explicitly, but Broadcom helps
Speaker 6: Google with its Tea EU. What about Hewlett Packard Enterprise.
Speaker 6: It's kind of like at this stage and earning season
Speaker 6: historically might have been hard to get yourself kind of
Speaker 6: pumped up for this, Mandy, but look at the anxiety
Speaker 6: in the market.
Speaker 5: It's another print we need to watch well.
Speaker 9: So I look at it this way. All the companies
Speaker 9: that require you know, AI ready servers, there aren't many
Speaker 9: places they can go to. It's still I mean SMCI,
Speaker 9: albeit all the things that happened, you know, with their
Speaker 9: ten K filing, but an HPE and I think all
Speaker 9: these companies have razor tin margins when it comes to
Speaker 9: the AI servers, but still it's the growing part of
Speaker 9: their business. And right now we have heard from every
Speaker 9: semiconductor maker that you know, the market is under supply,
Speaker 9: and that's why you know, whether you're a server company
Speaker 9: or chip company, you still write this trend. Now, what
Speaker 9: you know the new black Bell release will do, who knows,
Speaker 9: but clearly you know we know for fact that all
Speaker 9: these companies are looking to build their AI infrastructure, and
Speaker 9: I think because these companies fit in the supply chain,
Speaker 9: they should benefit from that trend.
Speaker 3: There's been much said of bulls versus bears. Now some
Speaker 3: of the bearish line of argument is just valuation. MANDI
Speaker 3: what do you make of some of these valuations on
Speaker 3: these companies.
Speaker 9: Look, I think with Nvidia you could argue the multiple
Speaker 9: is rich, But can you find another company that's growing
Speaker 9: sales at fifty percent plus? And so that's where you know,
Speaker 9: as long as they keep beating and raising the way
Speaker 9: they have, it's hard to be bearish on valuation. At
Speaker 9: the same time, there is a risk that when the
Speaker 9: growth tapers, and it will taper, everyone expects that. It's
Speaker 9: a question of when it will happen, and when that happens,
Speaker 9: the multiple will be cut into half or even more so.
Speaker 9: Right now we are in that phase where nobody knows
Speaker 9: how these llms will keep scaling. There will be a
Speaker 9: plateau in terms of, you know, the scaling for the llms,
Speaker 9: but we haven't hit that yet, and the market will
Speaker 9: look ahead it will look twelve to eighteen months ahead,
Speaker 9: but right now the bed is it's not twelve to
Speaker 9: eighteen months ahead. It's probably a little further along. And
Speaker 9: I think until then the valuation is sustainable because with tech,
Speaker 9: you pay a premium for growth, and these are the
Speaker 9: growth pockets.
Speaker 5: Within that tech sector many real quick.
Speaker 6: If Capitol extend, it shows was the watch word for
Speaker 6: the hyperscalers? Which metric do you watch for? Those are
Speaker 6: the names left to report?
Speaker 9: Well, So, look, I think when it comes to Broadcom
Speaker 9: or HP Broadcom is more diversified, but top line growth
Speaker 9: is what you care about and gross margins. With Nvidia,
Speaker 9: what everyone was scared about was that peak and gross margins.
Speaker 9: So with Broadcom, if we hear a similar story, then
Speaker 9: that's when you get worried because gross margins are very
Speaker 9: important for hardware companies.
Speaker 6: Blimberg Intelligence senior analyst Man Deep saying thank you very much.
Speaker 3: Fans of Oasis, they're looking back in anger. You get
Speaker 3: it at Ticketmaster thanks to prices at skyrocketing for the
Speaker 3: group's highly anticipated reunion tour. Now the ticket platform was
Speaker 3: using dynamic pricing to set ticket prices, which of course
Speaker 3: ad just prices based on real time demand from the market.
Speaker 3: Price is jumped by multiples when tickets went on sale,
Speaker 3: prompting hundreds of complaints to advertising regulators.
Speaker 4: Bloomberg's Charlie Wells.
Speaker 3: Joins us, now you are the voice when it comes
Speaker 3: to personal finance, and you'd been embracing for this people
Speaker 3: playing the system ahead of it.
Speaker 14: Charlie, Oh yes, I have. I have been covering this
Speaker 14: story since last week. I've been talking to fans up
Speaker 14: and down the UK and it's striking how the energy
Speaker 14: has changed from last week, when there was a sense
Speaker 14: of jubilation. I was talking to fans who were willing
Speaker 14: to do anything to get their hands on these tickets,
Speaker 14: to frustration. This week, those same fans unable to get
Speaker 14: them due to some tech issues and of course some
Speaker 14: of those dynamic pricing issues as well.
Speaker 6: That frustration is playing out on instagram x formerly known
Speaker 6: as for I literally see Liam and Old Gallada's faces
Speaker 6: everywhere which lakes we think about technology. Is there nothing
Speaker 6: that they could have done from a tech perspective to stop.
Speaker 5: This or is tech to blame?
Speaker 14: That's a really interesting question. I mean, on one hand,
Speaker 14: there's a sort of communications and marketing side to this,
Speaker 14: where you know, dynamic pricing is newer here in the
Speaker 14: UK than it is in the US as far as concerts,
Speaker 14: but when you think about things like Uber, of course
Speaker 14: there's surge pricing here. So there's an argument that the
Speaker 14: band or that ticket master could have been clear that
Speaker 14: this was going to happen. But I've actually been talking
Speaker 14: to a number of fans, you know, after the weekend,
Speaker 14: and they said that some tech glitches were actually.
Speaker 5: Almost more frustrating.
Speaker 14: So women named Nikki Bentley here in Essex said that
Speaker 14: she was accused of being a bot by the website.
Speaker 14: And then I also spoke with someone in Brighton, Rob Harlowe,
Speaker 14: and he said he made it to the front of
Speaker 14: that digital queue, but by the time he got there
Speaker 14: he was then kicked out, oh and ended up at
Speaker 14: number two hundred and fifty thousand in line. So a
Speaker 14: mix of that kind of communications issue, but also some
Speaker 14: tech quitch.
Speaker 6: Is here, bloom bags, Charlie Wells all over this story
Speaker 6: for a little while, Thank you very much, Carro.
Speaker 5: We go straight to markets. We have to.
Speaker 6: I don't know where to look other than at the
Speaker 6: index level NASDEK one hundred.
Speaker 5: Tech is under pressure.
Speaker 6: That's an understatement in video is the problem at the
Speaker 6: index level from a points drag perspective. But when you
Speaker 6: see a name like Apple down more than two percent,
Speaker 6: then you start to ask, Okay, what's the bigger thing
Speaker 6: that's happening here, And it's probably the chips, right.
Speaker 4: And ed, we are in back to school mode.
Speaker 3: We've got volumes actually higher when compared to previous cellos.
Speaker 3: At the moment, we're up some seven percent in volumes
Speaker 3: on the Nasdaq, and you're so right, it is chips,
Speaker 3: chips and chips again, we're down by seven percent on
Speaker 3: in VideA. The broad semiconductor indexes under pressure. I think
Speaker 3: only one name was in the green. Were seen by
Speaker 3: five point eight percent. We're off of our lows on
Speaker 3: the day ed, but it's important that we look ahead
Speaker 3: to Broadcom in terms of its earnings.
Speaker 5: Yeah. Intel speaking tomorrow at that City conference as well.
Speaker 3: That does it for this edition of Bloomberg Technology.
Speaker 6: Short a week, but my goodness, a lot to talk
Speaker 6: about and recap.
Speaker 5: You know, the podcast.
Speaker 6: You find it on Apple, Spotify, the Bloomberg platforms, Buckle up.
Speaker 6: I think it's going to be a busy one. This
Speaker 6: is Bloomberg Technology.