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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Day baqure At podcast. Good Morning,

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Speaker 2: It's Monday, the twentieth of July. I'm Caroline Hepkitt in

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Speaker 2: London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today, Andy Burnham prepares

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Speaker 3: to enter Downing Street. But can Britain's seventh Prime minister

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Speaker 3: in just over a decade succeed where others have failed.

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Speaker 2: Oil prices jump as US and Iranian attacks escalate following

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Speaker 2: the deaths of three American troops.

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Speaker 3: Plus one giant leap for Moonshot, China's breakthrough AI startup

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Speaker 3: tells investors it's preparing for a stock market debut after

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Speaker 3: stunning global rivals.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 3: Andy Burnham will become Britain's new Prime Minister today, inheriting

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Speaker 3: an intrade dominated by a sluggish economy and pressure to

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Speaker 3: tackle the cost of living. In his first address from

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Speaker 3: Downing Street, he's expected to say that Britain can look

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Speaker 3: forward to the future with hope and unity, but must

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Speaker 3: also be honest about the challenges it faces. Burnham wan

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Speaker 3: also say that he's acutely conscious of Britain's prime ministerial turnover,

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Speaker 3: arguing that it shows the need for more stable and

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Speaker 3: respectable politics. Speaking on Friday, Burnham said he would grow

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Speaker 3: the economy by devolving power.

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Speaker 4: More power to improve your high street, backing local businesses

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Speaker 4: such as the pubs and the shops that bring them

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Speaker 4: to life, and make no mistake everybody. I will be

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Speaker 4: a pro business leader of the Labor Party as I

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Speaker 4: was a pro business layer of Greater Manchester.

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Speaker 3: Burnham takes office with more than a million households behind

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Speaker 3: in their electricity bills. While personal and solvencies in the

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Speaker 3: UK have climbed to their highest level since early twenty ten.

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Speaker 2: Oil has climbed to its highest level in more than

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Speaker 2: a month, as the United States and Yvon exchanged increasingly

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Speaker 2: fierce attacks. Overnight, the US military launched another wave of

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Speaker 2: strikes on the Islamic Republic after three American soldiers were

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Speaker 2: killed in Jordan and Iraq a week of tip for

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Speaker 2: attacks have also expanded beyond military targets to include bridges,

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Speaker 2: utilities and port facilities, suggesting little prospect of a return

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Speaker 2: to last month's fragile cease. Far US sector of Saint

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Speaker 2: Marco Rubio says that the White House still wants a deal.

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Speaker 5: The United States always remains open to a diplomatic solution.

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Speaker 5: We tried multiple times with Iran, and we'll continue to try.

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Speaker 5: If that door opens, we'll be happy to see it open.

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Speaker 5: But right and they continue to send signals that they

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Speaker 5: want to talk, that they want to negotiate, But their

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Speaker 5: behavior is what we're responding to, and their behaviors. They're

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Speaker 5: launching missiles and drones against ships, including Tonight.

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Speaker 2: Rubio says the US is focused on hitting Iranian assets

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Speaker 2: that are being used to attack commercial shipping. Kuwait again

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Speaker 2: bore the branch of Iran's retaliation. The country's army says

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Speaker 2: that attacks on power and desalination plants cause fires and

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Speaker 2: severe damage to what it called vital infrastructure. The New

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Speaker 2: York Times supports the US is also sending more fighter

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Speaker 2: jazz and aerial refueling aircraft to the Middle East in

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Speaker 2: what could signal a further escalation.

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Speaker 3: Adalys that Morgan Stanleys say a diesel squeeze is playing

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Speaker 3: out across Europe as a slip of major supply challenges coincide.

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Speaker 3: Remember Ewan Parts has the details.

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Speaker 6: Crude prices have topped a one month high on renewed

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Speaker 6: conflict in the Middle East, but that's just one factor

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Speaker 6: driving the rise in diesel prices across Europe. Morgan Stanley

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Speaker 6: says it's modeling points towards European diesel inmustries falling to

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Speaker 6: multi year lows towards the year end. The market for

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Speaker 6: diesel's been tightening on a host of factors, including the

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Speaker 6: disruptions in the Strait of hor Moose, but also Ukrainian

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Speaker 6: attacks against Russian refineries and a diesel export ban imposed

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Speaker 6: by Moscow. However, the US Bank cautions against betting on

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Speaker 6: further gains, saying the tightness is already reflected in prices

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Speaker 6: in London. I'm un pots Bloomberg Radio.

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Speaker 2: Ukraine's foreign minister has said that Russia unleashed its largest

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Speaker 2: ballistic missile attack against Kiev since the beginning of the war.

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Speaker 2: According to President Zelinsky, at least one person was killed

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Speaker 2: and sixteen wounded in attacks on the Ukrainian capital over

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Speaker 2: the weekend. He said the strikes underline the need for

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Speaker 2: further defenses now.

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Speaker 7: I'm still on our air defense forces and sky defenders

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Speaker 7: managed to shoot down eighteen missiles and neutralize more than

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Speaker 7: one hundred drones. It is very important that our partners

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Speaker 7: understand what is happening and that we need air defense

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Speaker 7: missiles to protect life literally every.

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Speaker 2: Day, President Zelinski, speaking via a translator there as Ukraine

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Speaker 2: widened its attacks on Russian warehouses and logistics facilities. It

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Speaker 2: comes as the Financial Ties reports that the EU faces

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Speaker 2: crumbling support for new Russian sanctions. Diplomats have worn that

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Speaker 2: member states are refusing to back measures that could harm

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Speaker 2: some of their biggest companies.

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Speaker 3: China's Moonshot ai is told investors it's preparing for an

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Speaker 3: IPO and as little as six months. That comes after

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Speaker 3: the startup's latest model, kimmy K three, upended industry perceptions

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Speaker 3: of the country's AI capabilities, sources tell Bloomberg. The companies

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Speaker 3: now seeking the blessing of its backers in Hong Kong

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Speaker 3: listing are China. Correspondent Min Minlow reports from the World

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Speaker 3: Ai Conference in Shanghai.

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Speaker 2: There has been a lot.

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Speaker 8: Of buzz around this KIMK three model behind me because

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Speaker 8: it is the largest Chinese AI model today with two

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Speaker 8: point eight trillion parameters, and according to the company, it

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Speaker 8: outrivals most frontier models except for Anthropics Fable five and

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Speaker 8: Open ais GPT five point six. So it really stunned

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Speaker 8: the tech world, which earlier this year. We're still thinking

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Speaker 8: that maybe Chinese models are about twelve months behind the

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Speaker 8: USAI models, but they seem to be closing. They get

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Speaker 8: much faster then expected.

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Speaker 3: Briggs Man Menlo there as moonshad is reported to be

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Speaker 3: wrapping up a fundraising round valuing the startup but more

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Speaker 3: than thirty billion US dollars Now.

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Speaker 2: Sports News, Spain have won the World Cup, beating Argentina

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Speaker 2: one nill after extra time. Faran Torre has got the

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Speaker 2: deciding goal in the one hundred and sixth minute. Argentina

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Speaker 2: were down to ten men by that point after Enzo

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Speaker 2: Fernandez was sent off for a second yellow card. Spain's

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Speaker 2: fans had been celebrating winning the biggest prize in football.

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Speaker 4: I'm gonna ask word a bit more, especially my family.

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Speaker 2: Yes, s real, I feel read.

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Speaker 1: It's amazing, last in a lifetime experience.

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Speaker 2: Okay, it's Spain's second World Cup title after their twenty

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Speaker 2: ten win.

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Speaker 3: And in golf, Ryan Fox has won the Open, sinking

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Speaker 3: his final pot to claim the Cleric Jog by a

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Speaker 3: single shot and thew Zelander finished ten hundred part Royal Birkdale,

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Speaker 3: one stroke clear of American Cameron Young and a dramatic

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Speaker 3: fi the oldest golf tournament in the world. Fox admitted

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Speaker 3: that he looked a lot calmer than he felt.

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Speaker 5: I'm not sure how I had the part as I

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Speaker 5: see in my hands were all over the place.

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Speaker 7: I was just trying to get it towards the hole somewhere.

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Speaker 2: And yeah, it's surreal that are winning.

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Speaker 3: That's of Ryan Fox there as England's Tommy Fleetwood ended

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Speaker 3: the tournament tied for fourth on seven under on his

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Speaker 3: home course.

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Speaker 2: And those are top stories for you today. Looking at

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Speaker 2: the markets this morning, stop futures for Europe up about

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Speaker 2: a tenth of one percent. We've had Ryanair profits in

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Speaker 2: for the first quarter after tax. Profits came in below

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Speaker 2: expectations five hundred and thirty eight million euros. This though,

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Speaker 2: after we have seen this significant text sell off on

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Speaker 2: Friday really rattled markets. But stocks do seem to be stabilizing.

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Speaker 2: South Korean markets reopening though after Friday's holiday, so you

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Speaker 2: see a real catch up there with the Cosby down

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Speaker 2: by four point two percent, the Kozdak also slumping y

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Speaker 2: shares though, are up with two major state funds revealing

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Speaker 2: more purchases of Chinese equity, so that has popped up

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Speaker 2: markets in mainland China. Looking elsewhere to the oil markets,

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Speaker 2: more tensions and strikes between the US and I ran

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Speaker 2: I mean that brain fruit is naturally at ninety dollars

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Speaker 2: twenty two, so up two point four percent this morning.

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Speaker 2: No cash treasuries trading because Japan is closed for holiday.

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Speaker 2: Those are the markets in a moment.

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Speaker 3: What to expect from the change of Prime Minister in

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Speaker 3: the UK, Plus more on how the Chinese AI startup

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Speaker 3: Moonshot is making waves as it plans an ipo. But

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Speaker 3: another story that we've been reading this morning on how

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Speaker 3: to buy a dinosaur In case you're looking for a

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Speaker 3: new project for your Monday morning, Devin Pendleton has put

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Speaker 3: together a guide for one of the strangest collector's markets,

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Speaker 3: where fossil hunters, museums, billionaires, and fine art dealers are

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Speaker 3: competing for assets originating more than sixty six million years ago.

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Speaker 3: There are huge sums of money involved here as well.

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Speaker 3: A Trannosaurus Rex named Gos sold for over fifty million

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Speaker 3: dollars just this month. Although you can start small dinosaur

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Speaker 3: teeth can apparently sell for as little as twenty dollars

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Speaker 3: in case you want to start your dinosaur collection. Now

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Speaker 3: pretty complicated investment though. First of all, there's the legality

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Speaker 3: over at fossils founder many parts of the world can't

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Speaker 3: be legally sold. You have to verify authenticity. And then

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Speaker 3: there's also the practical difficulties of actually keeping one of

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Speaker 3: these things, apart from the fact that obviously they're quite large,

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Speaker 3: extremely heavy as their stone and upkeep very tricky as well.

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Speaker 3: You have to have stable temperature, humidity, no vibrations.

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Speaker 2: I suppose you.

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Speaker 3: Don't want to end up with a pile of bones

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Speaker 3: and the floor.

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Speaker 4: No.

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Speaker 2: I did read about that t rex. I mean it

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Speaker 2: is absolutely enormous and went for a sort of huge

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Speaker 2: amount of money. Look, the criticism is that scientists are

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Speaker 2: worried that these skeletons and fossils are going to go

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Speaker 2: into private collections. Then they won't be there for research,

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Speaker 2: which is what they really want them for. So yes,

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Speaker 2: it is a bit it is interesting and strange, but

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Speaker 2: then yeah, the teeth, I mean, it's just another collection

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Speaker 2: to get dusty on the shelf, isn't it.

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Speaker 3: Nobody wants to be dusting the dinosaur. Could you imagine

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Speaker 3: what you imagine farming that out to one of your children,

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Speaker 3: Caroline to be like, oh it's your turn today if

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Speaker 3: you go dust the dinosaur.

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Speaker 2: Yeah, step Flaoden might be dangerous.

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Speaker 3: It's a fascinating piece though. We'll put a link to

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Speaker 3: it in our podcast show Notes. Well, Andy Burnham becomes

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Speaker 3: Britain's seventh Prime Minister in a decade, just over a decade,

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Speaker 3: I should say today, But as the former Greater Manchester

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Speaker 3: mayor prepares to take param many of his policies and

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Speaker 3: his top team remain unknown. Joining us now from Downing

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Speaker 3: Street is our UK Politics reporter James Wilcock. James, good morning.

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Speaker 3: First of all, talk us through how today should unfold. Well, Stephen,

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Speaker 3: it's a historic day. I mean it's going to be

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Speaker 3: like any other sort of post general election day in

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Speaker 3: that there's going to be scaffolding. People are set up

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Speaker 3: cameras all around me in Downing Street, kissed Arma. The

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Speaker 3: current outgoing Prime Minister will leave Downing Street and go

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Speaker 3: to the King after making a farewell speech, and then

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Speaker 3: the new Prime Minister to be Andy Burnham will come

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Speaker 3: back to Downing Street from seeing the King.

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Speaker 9: The problem is there hasn't been a general election and

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Speaker 9: we are but two years after Labour won a landslide majority,

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Speaker 9: and so we are having this change of government, this

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Speaker 9: seventh prime minister in little over ten years, once again

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Speaker 9: as the UK tries to find its new direction.

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Speaker 2: What does the moment mean then for Labor, the Labor Party,

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Speaker 2: for Andy Burnham, what can we really expect from are

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Speaker 2: we dubbing it Burnhamism?

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Speaker 9: Well, for Labor this is a moment of optimism and

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Speaker 9: it's also a very desperate gamble. Ninety percent of Labor

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Speaker 9: MPs back to Andy Burnham in the leadership contest. That

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Speaker 9: is a phenomenal amount. And it is true that Andy

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Speaker 9: Burnham is already seeing an upswing in the polls for

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Speaker 9: the party. There is a hope that he can turn

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Speaker 9: around the party win the next general election. And there

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Speaker 9: are genuine fears inside the Labor Party about reform and

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Speaker 9: Nigel Ferrage and what they see as a far right agenda.

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Speaker 9: And then for Andy Burnham, just ten weeks ago he

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Speaker 9: was the mayor of Greater Manchester, not even sitting in Parliament,

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Speaker 9: with no clear path to power, and now he finds

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Speaker 9: himself at the apex of UK political life, ready to

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Speaker 9: reshape the world as he sees fit. I mean, I

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Speaker 9: know your skeptics about Burnhamism, Carolyn, but in many ways

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Speaker 9: Andy Burnam has a much clearer vision for the UK

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Speaker 9: than the case Starmer ever did. He has a much

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Speaker 9: clearer policy around devolution. He wants to build a number

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Speaker 9: ten in the North. And we're expecting a policy blitz

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Speaker 9: in the next week or so of things like north

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Speaker 9: Sea oil drilling, the nationalization of Thames Water, a potential

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Speaker 9: announcement on social care scrap and digital ID. But then

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Speaker 9: we do not know and I find this astonishing to

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Speaker 9: say anyone firmly in Andy Burnham's top team. There are

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Speaker 9: many rumors inside the press that Shabon Mamood is tipped

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Speaker 9: to be the Chancellor, but as yet we do not

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Speaker 9: know and we cannot say, And that, in turn, that's

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Speaker 9: the policy agenda, in that we cannot tell you who

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Speaker 9: is going to be running these sort of big ministries

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Speaker 9: of states. And that also means that these people we

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Speaker 9: go into these jobs effectively blind, and that too will

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Speaker 9: be interesting to see exactly what policy is, exactly what

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Speaker 9: directions come out of this new Burnham administration.

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Speaker 3: That's the arrivals James. But let's talk for a moment

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Speaker 3: about the departure. Kiir Starmer will be leaving office after

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Speaker 3: just over two years after winning the general election. How

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Speaker 3: will his time and office be remembered?

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Speaker 9: Kis Starmer has been saying for the past week, and

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Speaker 9: he's likely to say again today that he leaves the

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Speaker 9: country in a better state than he found it. I

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Speaker 9: although returned to his five missions that he set out

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Speaker 9: for this government, which were kickstart economic growth, making Britain

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Speaker 9: clean energy superpower, raising public confidence in the police and

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Speaker 9: the States, and taking back Britain streets, reforming education and

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Speaker 9: fixing the NHS. I think on those it's a far

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Speaker 9: more mixed record, with only kind of clear success being

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Speaker 9: seen in getting down NHS waiting lists and with many others.

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Speaker 9: It's been a far more rocky, far more difficult premiership

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Speaker 9: that is ending far far sooner than he could ever

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Speaker 9: have hoped or expected. It's also worth saying that although

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Speaker 9: we don't know Burnham's top appointments, it's very likely that

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Speaker 9: Rachel Reees will lose her job as the UK Chancellor,

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Speaker 9: and what that means for her policies around fiscal rules, which,

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Speaker 9: although Andy Burner has committed to the idea that the

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Speaker 9: first female UK Chancellor is out of her job within

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Speaker 9: two years, is always a momentous one. It's interesting that

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Speaker 9: there is so much optimism in Labour now that they

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Speaker 9: can turn the page, send a bad direction and make

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Speaker 9: things back within the three years of government. But coming

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Speaker 9: into this there is a Prime Minister that seems untested,

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Speaker 9: with plans that are unclear, with a lot of optimism

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Speaker 9: behind him, but as yet we're unclear how it's going

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Speaker 9: to work out. Those are words I could have said

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Speaker 9: in twenty twenty four. It's yet to be seen if

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Speaker 9: Andy Burne can make twenty twenty six a different year

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Speaker 9: for labor.

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Speaker 2: Yeah, it's going to be absolutely fascinating. I still think, also, James.

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Speaker 2: Central to all of this is four our listeners and investors,

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Speaker 2: in particular whether the Labor government is going to be

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Speaker 2: more pro business. What type of pro business it's going

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Speaker 2: to be. I mean Andy Burnham said only on Friday

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Speaker 2: that he would be a pro business leader. What does

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Speaker 2: that actually mean. We know very very little about what

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Speaker 2: may emerge in the budget, and I think investors will

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Speaker 2: be very focused on that in the autumn. You know

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Speaker 2: this major program that may emerge from Burnham. What does

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Speaker 2: it mean in terms of taxes and spending? James Walcock,

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Speaker 2: thank you so much for being with us live at

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Speaker 2: Downing Street, Our UK Politics reported James Walcock, Stay with

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Speaker 2: us more from Bloomberg daybaqube coming up after this.

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Speaker 3: China's Moonshot AI has told investors it's preparing for a

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Speaker 3: stock market debut and as little as six months. That's

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Speaker 3: after its latest model, Kimmy K three, has sparked much

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Speaker 3: excitement among users and investors. Our Asia Technology editor of

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Speaker 3: Ladsavov joins us now for more Vlad.

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Speaker 2: The announcement of this.

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Speaker 3: Latest model last week were Moonshot at the center of

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Speaker 3: a sell off and tex shares. Why is it creating

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Speaker 3: such a stir?

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Speaker 1: In a certain respect, it is evidence of the great

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Speaker 1: sensitivity that exists around this entire industry. As we are

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Speaker 1: all very well aware there are hundreds of billions of

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Speaker 1: dollars invested in it, whether we're talking about companies, whether

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Speaker 1: we're talking about infrastructure, data centers and so on. So

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Speaker 1: anything that may upset our preconceptions about how money is

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Speaker 1: going to flow and how any return and all that

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Speaker 1: investment is going to come back is going to disrupt

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Speaker 1: the conversation not just here in Asia, but clearly it

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Speaker 1: took over the US and European AI circles as well.

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Speaker 1: I mean people such as David Sachs, the White House

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Speaker 1: AI advisor, was posting and he was making a point

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Speaker 1: that the US should no waste time regulating in SAI industry,

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Speaker 1: should encourage it as much as possible. So all of

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Speaker 1: these things have happened. And to drest your question directly,

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Speaker 1: why again, the answer with AI is that we're still

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Speaker 1: at a very early stage, so there isn't a final

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Speaker 1: product by which we can test all these so we're

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Speaker 1: looking at synthetic benchmarks and that's where Kimmi has stood out.

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Speaker 1: It's a two point eight trillion parameter model. Two point

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Speaker 1: eight trillion, it's a big number whatever you're looking at,

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Speaker 1: it's one of the largest. And the innovative approach for

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Speaker 1: Moonshot is that what they're doing is they're loading a

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Speaker 1: load of these parameters, but they're trying to be very

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Speaker 1: efficient in how they address them, so they only activate

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Speaker 1: a little bit of the AI model when they're trying

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Speaker 1: to get user queries answered, So that has resulted in

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Speaker 1: them getting up there with the frontier AI models. It's

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Speaker 1: comparable to Open ai Anthropic, their ladies and their best.

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Speaker 1: And amusingly, the company tried to show a bit of

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Speaker 1: humidity as well. Is said, while we were really excited

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Speaker 1: about our new products, while we really love what we've

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Speaker 1: just put out, we're not as good as Open Aianthropic.

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Speaker 1: We're just a little bit behind them.

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Speaker 2: Okay, So that's really interesting about you know why Moonshot

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Speaker 2: and Kimmy K three have made such an impact. I mean,

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Speaker 2: Shares and Ali Barber are getting a boost also from

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Speaker 2: their latest model.

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Speaker 1: That's right, and this is also indicative of this pace

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Speaker 1: in which the competition is happening in China. Like I mentioned,

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Speaker 1: Kimmy is a two point eight trillion parameter model, Ali

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Speaker 1: Baba is releasing a two point four trillion parameter model,

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Speaker 1: and likewise it's right up there in the benchmarks. Ali

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Speaker 1: Baba itself a bit more bullish, Is said, it's only

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Speaker 1: second to Fable from Anthropic, which, if we all remember

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Speaker 1: Mythos and Fable from Anthropic. The AI models that the

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Speaker 1: company itself said are a matter of national security, and

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Speaker 1: then they had a whole back and forth with the

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Speaker 1: White House about whether they should be international access to

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Speaker 1: these models. So that's part of the perceived threat in

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Speaker 1: the US, whether you talk in national security, where you're

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Speaker 1: talking competitiveness in commercial markets. How is China able to

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Speaker 1: catch up that quickly without having access to the same

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Speaker 1: resources that the US has. But speaking of resources, this

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Speaker 1: is also why bullishness around Alibaba is because it is

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Speaker 1: much better resource than Moonshot and it seems to be

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Speaker 1: doing just as well. And the other thing we can

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Speaker 1: kind of expect is that everyone else who hasn't done

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Speaker 1: a release in the past several weeks or several months

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Speaker 1: is trying to do the same thing.

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Speaker 3: All of this is happening at a time when you know,

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Speaker 3: we're looking at an increasing rivalry between those US and

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Speaker 3: Chinese companies moving into this space. The questions around accusations

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Speaker 3: of one distilling the other have resurfaced. China's yet again

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Speaker 3: denied that its models have distilled foreign AI.

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Speaker 1: Yes, that's right, I mean, these these things are going

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Speaker 1: to vibe back and forth. The thing that I can

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Speaker 1: say sitting here in Hong Kong is that within China itself,

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Speaker 1: the competition is fierce, everyone is competing for talent, everyone

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Speaker 1: is investing as heavily as they possibly can. And there

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Speaker 1: is a very big difference also in the approach that

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Speaker 1: these companies are taking, because the idea in the US

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Speaker 1: is still let's buy the most capable, the most powerful,

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Speaker 1: and most expensive Nvidia A accelerators, lean into that and

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Speaker 1: build models that are tailored to take full advantage of that.

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Speaker 1: As I mentioned with Moonshot and Ali Baba, likewise, they're

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Speaker 1: using this technique called mixture of experts where they're leaning

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Speaker 1: into efficiency, so as much as possible, they're trying to build, frankly,

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Speaker 1: a whole different architecture about how an AI model is addressed,

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Speaker 1: so they don't need to rely on the pure speed

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Speaker 1: of the video chips that they don't have, so they're

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Speaker 1: leaning more into using memory and so on. So at

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Speaker 1: the architectural level, I feel like most of them are

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Speaker 1: fundamentally different for the most part than the US models.

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Speaker 1: And then the other thing that channel leads into is

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Speaker 1: the talent. I mean, this is the thing that David

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Speaker 1: Sachs and Vinard Cosla, who's one of the famous VS

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Speaker 1: investors in the US, he has dressed that the US

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Speaker 1: needs to have a more receptive visa policy so that

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Speaker 1: all these Chinese researchers, including the Moonshot founder who is

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Speaker 1: US educated, would not only come to the US, but

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Speaker 1: stay there instead of their companies there. So China is

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Speaker 1: leaning into a different architecture, booting that up differently. And

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Speaker 1: then also it's talent.

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Speaker 3: Thanks for listening to Bloomberg Daybreak Europe.

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