WEBVTT - Bonus Episode: Bloomberg Daybreak 0:00:00.200 --> 0:00:05.000 This is Tom Keane introducing you to the Bloomberg Daybreak Podcast, 0:00:05.400 --> 0:00:08.240 a roundup of the top stories from Wall Street to 0:00:08.440 --> 0:00:12.880 Washington and today. For our Bloomberg Surveillance audience, we bring 0:00:12.920 --> 0:00:15.400 you a sample of the show. Click the link in 0:00:15.480 --> 0:00:21.200 this description to subscribe to the Bloomberg Daybreak Podcast on Apple, Spotify, 0:00:21.720 --> 0:00:23.280 or anywhere you listen. 0:00:26.360 --> 0:00:29.560 Good morning, I'm Nathan Hager and I'm Amy Morris. Here 0:00:29.640 --> 0:00:32.920 are the stories we're following today. We're going to begin 0:00:32.960 --> 0:00:35.640 with the deal in the Middle East. Israel and Hamas 0:00:35.720 --> 0:00:37.920 have come to an agreement that we'll see dozens of 0:00:37.960 --> 0:00:41.280 hostages freed from Gaza in return for a four day 0:00:41.320 --> 0:00:44.159 pause in the fighting and the release of Palestinian prisoners. 0:00:44.320 --> 0:00:47.479 Bloomberg Simon Marx begins our team coverage in Tel Aviv. 0:00:48.000 --> 0:00:51.040 In the fine print of the deal, there is an 0:00:51.080 --> 0:00:56.960 opportunity for additional days of so called pause. Israel have 0:00:57.120 --> 0:01:00.760 said that for every ten additional hostages they would be 0:01:00.800 --> 0:01:04.399 willing to add an additional day of pause in the war. 0:01:05.040 --> 0:01:08.600 But at the same time, Benjamin Natanyahu, the Prime Minister, 0:01:09.120 --> 0:01:11.360 has been very clear to say this does not mean 0:01:11.360 --> 0:01:14.240 the end of the conflict, and that their original goals 0:01:14.280 --> 0:01:19.720 to eradicate Hamas and deradicalize Gaza, etc. Is still very 0:01:19.760 --> 0:01:20.600 much the state today. 0:01:20.800 --> 0:01:23.679 Bloomberg Sigmon Mark says the pause is expected to begin 0:01:23.840 --> 0:01:24.639 tomorrow morning. 0:01:25.040 --> 0:01:28.080 This temporary ceasefire was pushed for by the US and 0:01:28.120 --> 0:01:31.920 its allies. We get more from Bloomberg political contributor Genie 0:01:31.959 --> 0:01:32.600 she and Zano. 0:01:33.000 --> 0:01:36.760 It is a big, big move forward for many people 0:01:36.800 --> 0:01:40.240 because it's really the first diplomatic breakthrough we've seen since 0:01:40.319 --> 0:01:43.320 the war began after the October seventh attack. But it 0:01:43.400 --> 0:01:47.720 comes with so much trepidation and so many questions. This 0:01:47.760 --> 0:01:50.880 is not a cease fire, it's a pause. It comes 0:01:50.960 --> 0:01:54.920 also as a result of enormous pressure both inside Israel 0:01:55.040 --> 0:01:59.840 and internationally that the Israeli government has been feeling, particularly 0:02:00.040 --> 0:02:03.560 from the relatives of these two hundred and thirty six hostages. 0:02:03.880 --> 0:02:07.440 Bloomberg contributor Genie she and Zano says three Americans will 0:02:07.480 --> 0:02:09.800 be among the hostages leaving Gaza amy. 0:02:09.840 --> 0:02:12.520 Another major story we're following this morning is the return 0:02:12.680 --> 0:02:16.400 of sam Aldman to open Ai, just days after he 0:02:16.560 --> 0:02:20.040 was fired then hired by Microsoft. Sam Aldman is back 0:02:20.080 --> 0:02:23.160 as CEO, and the board at open Ai is in 0:02:23.240 --> 0:02:26.120 for an overhaul. We get more from Bloomberg Intelligence analyst 0:02:26.200 --> 0:02:27.080 Matthew Bloxham. 0:02:27.400 --> 0:02:29.640 I kind of think that the board were backed into 0:02:30.160 --> 0:02:32.040 a corner, and you know, I think they risk just 0:02:32.480 --> 0:02:35.840 seeing the company unravel. So I don't think they had 0:02:36.240 --> 0:02:38.960 really any choice. I think from Nahir, the big questions 0:02:39.000 --> 0:02:41.519 are going to be, Okay, what's the detail, what you 0:02:41.600 --> 0:02:44.240 know beyond a new board that looks more supportive of 0:02:44.320 --> 0:02:46.960 Sam Altman, are they going to be more profound changes 0:02:47.000 --> 0:02:49.679 to the structure of the company. What does this mean 0:02:49.760 --> 0:02:52.720 for the possible IPO, How they're going to kind of 0:02:52.720 --> 0:02:57.240 commercialize things like chat GPT more effectively, to kind of 0:02:57.240 --> 0:02:59.080 take advantage of the opportunity. 0:02:58.560 --> 0:03:01.800 That Matt block and with Bloomberg Intelligence says the initial 0:03:01.840 --> 0:03:04.120 board will be led by Brett Taylor, a former co 0:03:04.280 --> 0:03:08.720 CEO of Salesforce. Other directors include Quorra CEO, Adam DiAngelo, 0:03:09.000 --> 0:03:11.880 and Larry Summers, the former Treasury secretary and a paid 0:03:11.880 --> 0:03:13.560 contributor to Bloomberg. 0:03:13.440 --> 0:03:16.600 And sources say Microsoft is also likely to get representation 0:03:16.800 --> 0:03:19.920 on the new board, certainly as an observer, possibly with 0:03:20.000 --> 0:03:22.640 one or more board seats. In a post on x, 0:03:22.919 --> 0:03:27.480 Microsoft CEO Satynadella praised the changes at OpenAI, calling them 0:03:27.560 --> 0:03:30.320 quote a first essential step on a path to a 0:03:30.360 --> 0:03:33.480 more stable, well informed, and effective governance. 0:03:33.720 --> 0:03:36.480 On a very busy morning, Amy, we're also following market 0:03:36.520 --> 0:03:39.520 reaction to one of the most highly anticipated earnings reports. 0:03:40.120 --> 0:03:43.680 Shares of Nvidia are down nearly one percent in early training. 0:03:43.720 --> 0:03:47.200 That's despite an earning's blowout that went past analyst estimates. 0:03:47.320 --> 0:03:49.600 We get more on that from Bloomberg technology reporter at 0:03:49.640 --> 0:03:50.960 Ludlow in San Francisco. 0:03:51.320 --> 0:03:51.920 We go to the. 0:03:51.880 --> 0:03:55.200 Outlook for the fiscal fourth courser sales would be twenty 0:03:55.200 --> 0:03:58.520 billion dollars plus or minus two percent. And while that's 0:03:58.520 --> 0:04:01.640 a really strong outlook, there was so commentary from Nvidia 0:04:01.800 --> 0:04:05.760 that they expect sales or shipments of GPUs to China 0:04:05.840 --> 0:04:09.000 to drop in the current period or the fiscal fourth quarter, 0:04:09.440 --> 0:04:14.120 as a direct result of the expanded US technology export curves. 0:04:14.280 --> 0:04:17.440 What we're talking about is in Vidia's inability to ship 0:04:17.520 --> 0:04:20.680 the cutting edge GPUs to the Chinese market, but they 0:04:20.680 --> 0:04:24.039 were very clear that will be offset by demand from 0:04:24.040 --> 0:04:25.600 other markets around the world. 0:04:25.920 --> 0:04:29.160 Bloomberg's Ed Ludlow says another reason behind in Vidia's drop 0:04:29.279 --> 0:04:31.600 was its run up this year, and video was already 0:04:31.640 --> 0:04:34.360 hied by more than two hundred and forty percent. 0:04:34.520 --> 0:04:37.080 And a big name in the cryptocurrency space is taking 0:04:37.120 --> 0:04:41.080 a legal fall. Binance, the world's largest crypto exchange, has 0:04:41.160 --> 0:04:45.240 pleaded guilty to anti money laundering and sanctions violations. Attorney 0:04:45.279 --> 0:04:49.720 General Merrick Garland says Binance failed to stop suspicious transactions 0:04:49.760 --> 0:04:54.120 with terror groups including Hamas, and violated several laws, including 0:04:54.160 --> 0:04:55.520 the Bank Secrecy Act. 0:04:56.080 --> 0:05:00.240 These laws ensure that our financial institutions are not available 0:05:00.440 --> 0:05:06.400 to designated terrorist organizations, drug traffickers, and sanctioned nation states 0:05:06.440 --> 0:05:09.520 that threaten public safety and our national security. 0:05:09.839 --> 0:05:12.880 Attorney General Garland says Finance will pay four point three 0:05:13.000 --> 0:05:17.159 billion dollars under the deal, and its CEOCZZL will step 0:05:17.200 --> 0:05:19.839 down and pay a fifty million dollar fine. Sal could 0:05:19.839 --> 0:05:22.240 face up to ten years in prison, but is expected 0:05:22.240 --> 0:05:24.080 to serve no more than eighteen months. 0:05:24.200 --> 0:05:26.680 And on the economic front, amy investors will have to 0:05:26.720 --> 0:05:30.039 navigate a number of reports this morning. Almost all of 0:05:30.200 --> 0:05:34.440 Thursday and Friday's numbers have been compressed into today, so 0:05:34.520 --> 0:05:36.920 let's get a preview now from Bloomberg's Michael McKay. 0:05:37.279 --> 0:05:40.840 The marquee release is initial jobless claims Wall Street wants 0:05:40.880 --> 0:05:43.359 to know if last week's surprise jumped to two hundred 0:05:43.400 --> 0:05:46.120 and thirty one thousand was a one off or assigned. 0:05:46.120 --> 0:05:49.520 The labor market is starting to cool significantly October durable 0:05:49.520 --> 0:05:52.240 goods orders. Meanwhile, we'll offer the first clues to business 0:05:52.320 --> 0:05:55.400 spending plans in the fourth quarter. A drop in Boeing 0:05:55.520 --> 0:05:59.000 jet sales may depress the overall headline number, while capital 0:05:59.040 --> 0:06:03.040 goods orders oxy for business spending in GDP are forecast 0:06:03.080 --> 0:06:06.520 to eke out only a marginal gain. Finally, the University 0:06:06.520 --> 0:06:10.440 of Michigan's final reading of consumer sentiment for November may 0:06:10.560 --> 0:06:14.760 influence some investors' views of holiday season consumer spending. Michael McKee, 0:06:14.800 --> 0:06:23.000 Bloomberg Radio. 0:06:20.080 --> 0:06:22.000 All right, thank you, Nathan. Time now for a look 0:06:22.040 --> 0:06:24.520 at some of the other stories making news around the world, 0:06:24.720 --> 0:06:27.240 and for that were joined by Bloomberg's of John Tucker, 0:06:27.240 --> 0:06:28.800 Good morning John, and. 0:06:28.800 --> 0:06:32.520 Good morning Amy. The Pentagon confirming it conducted an airstrike 0:06:32.600 --> 0:06:36.360 against Iranian backed militants operating out of Iraq. Let's get 0:06:36.360 --> 0:06:38.880 more of the story this morning from Bloomberg's Ed Baxter. 0:06:39.800 --> 0:06:42.520 The Pentagon says it was in response to several short 0:06:42.640 --> 0:06:46.039 range missile attacks. Pentagon spokeswoman Sabrina. 0:06:45.640 --> 0:06:49.360 Sang Immediately following the attack, a US military AC one 0:06:49.440 --> 0:06:52.760 thirty aircraft in the area conducted a self defense strike 0:06:52.839 --> 0:06:56.120 against an Iranian backed militia vehicle and a number of 0:06:56.120 --> 0:07:00.479 Iranian backed militia personnel involved in this attack. This self 0:07:00.480 --> 0:07:03.320 defense strike resulted in some hostile fatalities. 0:07:03.560 --> 0:07:06.920 Seeingh says some US service members were injured in the attack. 0:07:07.279 --> 0:07:10.760 She also says the US conducted three additional strikes in 0:07:10.800 --> 0:07:13.200 Syria at Baxter Bloomberg Radio. 0:07:13.280 --> 0:07:17.200 Florida Governor Ron de Santis secure the endorsement of influential 0:07:17.280 --> 0:07:21.440 Iowa conservative Bob vnder Platz. Vander Platz backing is the 0:07:21.440 --> 0:07:24.560 second major endorsement for DeSantis in Iowa this month, following 0:07:24.600 --> 0:07:28.440 Governor Kim Reynolds. Both vender Plants and Renolds are influential 0:07:28.480 --> 0:07:32.960 among evangelical voters, a sizeable blanc of the state. DeSantis 0:07:33.200 --> 0:07:35.840 is making a make or break prush shit in that state, 0:07:35.960 --> 0:07:39.080 banking on a strong showing they can give him momentum 0:07:39.120 --> 0:07:42.200 to stay in the race. Pull showed Desanti's trailing Donald 0:07:42.200 --> 0:07:46.240 Trump by over forty five points for those early holiday 0:07:46.320 --> 0:07:49.960 travelers leaving before dawn to avoid the rush may work 0:07:49.960 --> 0:07:52.760 in some parts of the nation, but not in other parts. 0:07:53.000 --> 0:07:55.600 Bloomberg meteorologist Rod Carolyn. 0:07:56.040 --> 0:07:58.920 Most of the country looking good for travel on this Wednesday, 0:07:58.920 --> 0:08:01.800 ahead of the big Thanksgiving Day holiday. We have problems though, 0:08:01.800 --> 0:08:04.440 in the eastern United States with rain from North Florida, 0:08:04.440 --> 0:08:07.760 along the coastal Carolinas, and into parts of New England, 0:08:07.920 --> 0:08:10.000 especially northern New England, where we'll be dealing with some 0:08:10.080 --> 0:08:13.960 snow today. The Pacific Northwest will also deal with precipitation rain, 0:08:14.120 --> 0:08:16.280 likely at the lower elevations, with snow in the mountains. 0:08:16.480 --> 0:08:18.880 Today is one of the busiest travel days of the year. 0:08:19.240 --> 0:08:22.080 A Florida judge who's ruled Tesla's trial over a twenty 0:08:22.160 --> 0:08:26.120 nineteen fatal crash blamed on autopilot will include a claim 0:08:26.200 --> 0:08:29.760 against the company for punitive damages. The judge at Palm 0:08:29.840 --> 0:08:33.880 Beach County cited evidence that shows CEO Elon Moskin staff 0:08:33.920 --> 0:08:38.839 engineers knew its driver assistance system was defective. Global News 0:08:38.840 --> 0:08:41.160 twenty four hours a day and whenever you want it 0:08:41.160 --> 0:08:44.600 with Bloomberg News. Now, I'm John Tucker, and this is 0:08:44.640 --> 0:08:45.560 Bloomberg Amy. 0:08:45.720 --> 0:08:52.240 All right, thank you, John. Time enough for our Bloomberg 0:08:52.280 --> 0:08:54.720 Sports Update. For that we bring in John stash Hour. 0:08:55.240 --> 0:08:57.720 Aiming only two weeks to go in the college football 0:08:57.760 --> 0:09:01.920 regular season, and the College Football Playoff Committee out with 0:09:02.040 --> 0:09:05.040 its latest poll last night. Georgia remains number one, with 0:09:05.120 --> 0:09:08.840 Ohio State second Michigan third. Those two teams play each 0:09:08.880 --> 0:09:12.000 other Saturday in ann Arbor. A change at the four 0:09:12.080 --> 0:09:16.560 spot Washington moving ahead of Florida State, the Committee denying 0:09:16.640 --> 0:09:18.640 that it's due to Florida State having just lost its 0:09:18.720 --> 0:09:22.440 quarterback Jordan Travis to a season ending injury. Oregon is 0:09:22.480 --> 0:09:26.760 currently sixth, will play Oregon State on Friday. Texas is seventh, 0:09:27.000 --> 0:09:31.000 The Longhorns played Texas Tech on Friday, and Alabama is eighth, 0:09:31.040 --> 0:09:33.880 and the Crimston Tide play the Iron Bowl Game against 0:09:33.920 --> 0:09:37.160 Auburn on Saturday. College basketball, a lot of the top 0:09:37.200 --> 0:09:39.719 teams of the nation have gone to Maui. Number one 0:09:39.840 --> 0:09:43.320 Kansas lost to fourth rank Marquette seventy three p fifty nine. 0:09:43.640 --> 0:09:47.320 Second ranked Purdue a seventy one sixty seven victory over 0:09:47.400 --> 0:09:52.000 seventh ranked Tennessee in the NBA A game between Indiana 0:09:52.040 --> 0:09:55.560 and Atlanta, and both teams scored over one hundred and 0:09:55.559 --> 0:09:58.000 fifty points. That's only the seventh time that's ever happened 0:09:58.040 --> 0:10:01.240 in NBA history. The Pacers be the Hawks one fifty 0:10:01.360 --> 0:10:05.000 seven to one fifty two. Both teams shot sixty percent 0:10:05.040 --> 0:10:08.280 from the field. San Diego Padres have named Mike Schilt 0:10:08.280 --> 0:10:10.960 their new manager. He managed the Cardinals for four years, 0:10:10.960 --> 0:10:14.559 got them into the playoffs three times. He replaces Bob Melvin, 0:10:14.600 --> 0:10:18.160 who left the Padres to go to the Giants. Willie Hernandez, 0:10:18.160 --> 0:10:20.640 who won the Cy Young Award and the MVP in 0:10:20.760 --> 0:10:23.280 nineteen eighty four pitching for the Tigers, has passed away 0:10:23.559 --> 0:10:26.600 at sixty nine. Johns Dasheur Bloomberg Sports. 0:10:29.360 --> 0:10:32.360 From coast to coast, from New York to San Francisco, 0:10:32.679 --> 0:10:37.319 Boston to Washington, DC, nationwide on Syrias, exam the Bloomberg 0:10:37.360 --> 0:10:41.520 Business app in Bloomberg dot Com. This is Bloomberg Daybreak. 0:10:42.800 --> 0:10:44.120 Good morning, I'm Nathan Haker. 0:10:44.280 --> 0:10:48.480 The relentless war in Gaza since Thomas's October seventh attack 0:10:48.600 --> 0:10:52.160 on Israel looks like it's taking a pause. Both sides 0:10:52.240 --> 0:10:55.360 have reached a deal that we'll see Hamas release dozens 0:10:55.400 --> 0:10:58.880 of hostages in exchange for Palestinian prisoners and for more 0:10:58.920 --> 0:11:01.280 on this agreement. We are joined by Bloomberg News Senior 0:11:01.400 --> 0:11:04.559 editor Bill Ferries. Bill, thanks for being with us. Let's 0:11:04.559 --> 0:11:07.040 start off first with the terms of this deal. What 0:11:07.360 --> 0:11:10.880 exactly have Israel and Hamas agreed to after these days 0:11:10.920 --> 0:11:11.480 of talks. 0:11:13.040 --> 0:11:16.040 Well, what we know from both sides and from the Qataris, 0:11:16.080 --> 0:11:19.360 who have been really kind of leading the mediation efforts 0:11:19.400 --> 0:11:23.000 here is that within the next less than twenty four 0:11:23.040 --> 0:11:27.160 hours now at this point, what we call a humanitarian 0:11:27.240 --> 0:11:30.839 pause and the conflict will go into effect. Hamas has 0:11:30.880 --> 0:11:35.000 agreed to free initially fifty hostages. We expect these to 0:11:35.040 --> 0:11:38.760 be women and children who were taken when they stormed 0:11:38.800 --> 0:11:43.280 into Israel on October seventh. In return, Israel we'll begin 0:11:43.400 --> 0:11:48.480 looking at releasing perhaps dozens of Palestinian prisoners, also likely 0:11:48.520 --> 0:11:51.679 to be women and children. But the interesting thing about 0:11:51.679 --> 0:11:54.000 this is it's a four day pause, but there's a 0:11:54.080 --> 0:11:58.280 potential for an extension here if Hamas agrees to release 0:11:58.360 --> 0:12:04.600 more hostages. So for every additional ten hostages the Hamas releases, 0:12:04.679 --> 0:12:09.360 that extends the pause by a day. Remember, Israel estimates 0:12:09.360 --> 0:12:13.080 about two hundred and forty people were taken hostage during 0:12:13.080 --> 0:12:15.920 those October seventh attacks, So this has the potential to 0:12:15.960 --> 0:12:19.760 extend the deal quite a bit. In return, as I said, 0:12:19.800 --> 0:12:23.920 Hamas gets some prisoner releases from Israeli prisons. They also 0:12:24.480 --> 0:12:28.560 get an end to over flights and bombing air strikes 0:12:29.679 --> 0:12:35.560 of Gaza in that time, and really the chance to 0:12:35.640 --> 0:12:38.720 get a lot more aid flowing in in terms of 0:12:38.800 --> 0:12:43.440 medical supplies and fuel for nonprofit groups that do humanitarian work. 0:12:43.840 --> 0:12:46.600 So all sides I think had an interest at this 0:12:46.679 --> 0:12:49.720 point in getting reaching a deal. There were a lot 0:12:49.760 --> 0:12:51.760 of hiccups in the process, but it looks like it 0:12:51.800 --> 0:12:54.760 should be going into effect within the coming day. 0:12:55.720 --> 0:12:58.959 Let's talk about some of those hiccups, because, as you know, Bill, 0:12:59.080 --> 0:13:03.120 Israeli Prime Minister Benjamin Netan yahoo had said as these 0:13:03.120 --> 0:13:05.520 talks were underway that he wouldn't agree to any pause 0:13:05.600 --> 0:13:08.640 at all unless all the hostages were freed. So what 0:13:08.760 --> 0:13:11.680 did it take to get at least this kind of 0:13:11.720 --> 0:13:14.880 a deal done, the possibility that we could see more pauses, 0:13:15.320 --> 0:13:19.640 and this potential for a trickle of hostages to be 0:13:19.720 --> 0:13:20.720 released over time. 0:13:22.040 --> 0:13:23.760 Well, you're right, it wasn't clear at all that a 0:13:23.800 --> 0:13:27.480 deal would ever happen. Katar got involved soon after those 0:13:27.520 --> 0:13:31.680 October seventh attacks and started trying to find a way 0:13:31.720 --> 0:13:35.640 to focus really on hostages and getting them back the US. 0:13:35.679 --> 0:13:40.040 The Biden administration was deeply involved in these talks as well, 0:13:40.440 --> 0:13:42.760 and you're right they did. There was this push to 0:13:42.800 --> 0:13:46.360 have all hostages released at once that didn't seem to 0:13:46.400 --> 0:13:49.719 be getting much traction, and Hamas came back with an 0:13:49.720 --> 0:13:54.439 offer of fifty fifty hostages in one trench and then 0:13:54.640 --> 0:13:57.440 put potentially more in the coming days. What we know 0:13:57.600 --> 0:14:00.679 is that the leader of Katar continued to stay very 0:14:00.679 --> 0:14:05.520 engaged in this and we UH, what we what we 0:14:05.600 --> 0:14:12.040 ended up seeing was was really in agreement to kind 0:14:12.040 --> 0:14:15.240 of kind of bridge that divide with the fifty UH. 0:14:15.520 --> 0:14:19.240 President Biden had had a conversation with President Prime Minister 0:14:19.320 --> 0:14:22.200 net Yahoo at one point and they really felt like 0:14:23.320 --> 0:14:26.080 this was probably the best deal they could get for now. 0:14:26.200 --> 0:14:29.040 The US was really encouraged by the early release of 0:14:29.080 --> 0:14:32.480 a couple Americans who were taken in the October seventh 0:14:32.480 --> 0:14:35.640 grade and UH, and they basically built on that. So 0:14:35.680 --> 0:14:38.840 they went from an initial request of fifty to to 0:14:38.920 --> 0:14:42.160 what could be dozens more than that. We kind of 0:14:42.200 --> 0:14:44.440 have to see where it goes. But the priority was 0:14:44.480 --> 0:14:49.320 always on initially on women and children and the elderly civilians, 0:14:49.400 --> 0:14:53.240 and then looking more at uh at soldiers from both sides. 0:14:53.280 --> 0:14:56.000 And I think that's where talks on further releases will 0:14:56.040 --> 0:14:56.960 get more complicated. 0:14:57.720 --> 0:15:01.480 And even as we see this deal i'll get implemented, 0:15:01.520 --> 0:15:04.960 as you say, possibly as soon as after tomorrow. Prime 0:15:04.960 --> 0:15:08.080 Minister Natan Yahoo is saying that this won't mean that 0:15:08.160 --> 0:15:11.200 the war itself is coming to an end. What should 0:15:11.200 --> 0:15:14.560 we expect when it comes to the fighting and the 0:15:14.600 --> 0:15:18.680 progress that Israel wants to make against Thomas once this 0:15:19.000 --> 0:15:21.680 potentially initial pause takes effect. 0:15:22.280 --> 0:15:24.160 Yeah, I mean, I think it's important to note that 0:15:24.240 --> 0:15:27.320 all sides are calling this a pause. I think I've 0:15:27.320 --> 0:15:30.080 seen the word true, so temporary truth, things like that. 0:15:30.480 --> 0:15:33.080 No one is calling this an end to the conflict. 0:15:33.400 --> 0:15:37.120 Before they voted to accept this agreement, they've said that 0:15:37.440 --> 0:15:39.520 the war will continue. They can they want to go 0:15:39.600 --> 0:15:43.960 after eliminating Hamas and returning all the hostages, and they said, 0:15:44.000 --> 0:15:46.160 you know, when this truce ends, they will they will 0:15:46.200 --> 0:15:48.920 go back in the fighting will zoom. So it's an 0:15:48.920 --> 0:15:51.600 important significant step here, but it's not the end of 0:15:51.640 --> 0:15:53.560 the conflict as we know in Okay. 0:15:53.600 --> 0:15:57.360 Bill Ferries, Bloomberg News senior editor joining us this morning 0:15:57.520 --> 0:16:00.760 after we learned that a deal has been instruck now 0:16:00.760 --> 0:16:05.160 between Israel and Hamas to pause the fighting in exchange 0:16:05.360 --> 0:16:10.080 for hostage releases at least some of the hostages initially 0:16:10.320 --> 0:16:14.360 being released from Gaza. Now we want to turn to 0:16:14.960 --> 0:16:19.040 the latest deal at open Ai. This saga that began 0:16:19.320 --> 0:16:25.040 last Friday may be over after intense pressure from investors. 0:16:25.440 --> 0:16:29.080 Sam Altman is returning as the CEO of the chat 0:16:29.120 --> 0:16:32.880 GPT parent company, and the board at OpenAI looks like 0:16:32.960 --> 0:16:35.640 it is about to go through a serious overhaul. Let's 0:16:35.640 --> 0:16:38.720 bring in Alex Web for more on this story. Covers 0:16:38.760 --> 0:16:41.360 tech for us for Bloomberg News and has been following 0:16:41.360 --> 0:16:46.240 this since the sudden ouster last Friday and now the 0:16:46.280 --> 0:16:50.400 sudden return. Help us make sense of this, Alex, I. 0:16:50.400 --> 0:16:52.880 Mean, it's a big victory for Microsoft. Essentially, the thing 0:16:52.920 --> 0:16:55.240 that appears to have happened, and this is what's on 0:16:55.280 --> 0:16:58.400 the reporting suggests last week is that one of the 0:16:58.400 --> 0:17:01.640 reasons Sam Wilton was ousted was concerned that he was 0:17:02.040 --> 0:17:06.640 prioritizing the commercial impulses of the company over what actually 0:17:07.080 --> 0:17:10.480 is mandate, namely to improve and this genuinely is the 0:17:10.520 --> 0:17:12.960 wording it is to work for the benefit of all humanity. 0:17:14.160 --> 0:17:18.400 Now Microsoft is almost certainly going to be getting greater oversight, 0:17:18.520 --> 0:17:21.640 greater sway at a board level over what happens at OpenAI. 0:17:22.160 --> 0:17:24.080 The company is therefore going to be run ever so 0:17:24.119 --> 0:17:28.239 slightly more in the interest of Microsoft, not necessarily in 0:17:28.280 --> 0:17:32.480 the interest of all humanity. The three members have been 0:17:32.520 --> 0:17:34.840 appointed to the board Adam DiAngelo, the Sea of Quorra, 0:17:34.920 --> 0:17:37.080 who was already on there. The new ones are going 0:17:37.080 --> 0:17:40.240 to be Larry Summers, of course, former Treasury Section under 0:17:40.240 --> 0:17:45.119 Bill Clinton, and Brett Taylor, the former co CEO of Salesforce. 0:17:45.119 --> 0:17:47.399 They are going to be as many as nine additional 0:17:47.680 --> 0:17:50.840 board members. The expectation is that perhaps two of those 0:17:50.920 --> 0:17:55.359 could be representatives of Microsoft, and Altman himself could well 0:17:55.400 --> 0:17:56.120 rejoin the board. 0:17:56.400 --> 0:17:58.919 And we should note in the interest of transparency that 0:17:59.200 --> 0:18:02.720 Larry Summers, along with joining the board at open Ai 0:18:02.800 --> 0:18:06.840 as a paid contributor to Bloomberg, with these additions, at 0:18:06.920 --> 0:18:10.000 least initial additions to the board, Alex, it sounds like 0:18:10.080 --> 0:18:13.160 that could be the bigger deal here than just simply 0:18:13.520 --> 0:18:16.000 the return of Sam Altman as the CEO. 0:18:17.040 --> 0:18:19.520 Yeah, the thing we'd heard on Monday from sat in Nodella, 0:18:19.560 --> 0:18:22.520 the Microsoft CEO, in an into a Bloomberg television he 0:18:22.560 --> 0:18:26.280 had said he wanted improvements to governance at open AI. 0:18:27.160 --> 0:18:29.760 It seems as though the board composition was the sticking 0:18:29.800 --> 0:18:32.040 point and why it took a good few days to 0:18:32.040 --> 0:18:34.280 reach a resolution, given that we had heard as early 0:18:34.280 --> 0:18:38.560 as Sunday that there were moved from both sides to 0:18:38.600 --> 0:18:43.040 bring Sam Altman back into the fold. When Nadella says 0:18:43.040 --> 0:18:47.200 he wants improvements to governance, everybody more or less understood 0:18:47.200 --> 0:18:49.240 that to mean he wanted Microsoft to have better inside. 0:18:49.280 --> 0:18:52.359 Because this completely blindsided Microsoft is firing of Sam Mortman 0:18:52.440 --> 0:18:56.920 and subsequent departure of Greg Brockman, the president of the company. 0:18:57.880 --> 0:19:01.480 Microsoft had no for forewarning of that. They learned it 0:19:01.520 --> 0:19:02.960 pretty much at the same time the rest of the 0:19:03.000 --> 0:19:05.560 world did. The understanding is it was maybe a few 0:19:05.560 --> 0:19:07.440 minutes before they put the rest release out or the 0:19:07.680 --> 0:19:10.760 post on their website app. So you know, surprises for 0:19:10.800 --> 0:19:13.880 big businesses are not considered good and that's clearly something 0:19:13.920 --> 0:19:15.000 that Microsoft wanted to fix. 0:19:15.240 --> 0:19:20.000 To your point earlier about this signaling the idea that 0:19:21.520 --> 0:19:24.000 this could take the open AI in the direction of 0:19:24.600 --> 0:19:28.200 where Microsoft wants to go. As opposed to the betterment 0:19:28.320 --> 0:19:31.280 of humanity. Talk a little bit more about what this 0:19:31.440 --> 0:19:35.240 could mean for open AI and the competition, this massive 0:19:35.280 --> 0:19:38.280 competition that we're seeing between Microsoft and so many of 0:19:38.280 --> 0:19:41.320 the other players in the artificial intelligence space. What could 0:19:41.320 --> 0:19:42.360 this mean down the line. 0:19:42.840 --> 0:19:46.000 So there are basically four big players, certainly in the 0:19:46.000 --> 0:19:50.720 Western hemisphere in this in you know, advanced artificial intelligence research. 0:19:50.760 --> 0:19:53.119 There's deep Mind, which is now Google deep Mind. It 0:19:53.200 --> 0:19:55.720 is part of Google. There is Microsoft sort of Meta 0:19:55.800 --> 0:20:00.359 AI research O clearly part of Meta. There is open ai, 0:20:00.440 --> 0:20:02.520 which is very closely aligned with Microsoft. And there is 0:20:02.560 --> 0:20:06.000 also an Anthropic which was founded by a bunch of 0:20:06.040 --> 0:20:11.200 departees from open Ai a few years ago. Google, Microsoft, 0:20:11.240 --> 0:20:13.560 and Amazon are the ones really competing in the cloud. 0:20:13.600 --> 0:20:15.760 And at the moment, the real way to make money 0:20:15.760 --> 0:20:17.679 from AI is in the cloud. It is from not 0:20:17.720 --> 0:20:20.560 necessarily selling the AI services to companies to use. It's 0:20:20.600 --> 0:20:24.199 the processing power needed to run those AI services, and 0:20:24.200 --> 0:20:27.119 that's where the margin really is. Google, Microsoft fams and 0:20:27.160 --> 0:20:31.000 can compete very fiercely in that space. Microsoft has this 0:20:31.080 --> 0:20:33.679 huge benefit from the relationship with open ai, but it 0:20:33.680 --> 0:20:36.720 does not technically own open ai. And then the way 0:20:36.720 --> 0:20:39.960 that Google owns DeepMind, so that's really the lay of 0:20:40.000 --> 0:20:42.200 the land when it comes to the battlefield. This will 0:20:42.240 --> 0:20:45.840 help Microsoft potentially by hewing them more closely still to 0:20:45.920 --> 0:20:47.320 their long term business goals. 0:20:47.480 --> 0:20:50.000 Let's talk about the other AI story that everyone was 0:20:50.040 --> 0:20:52.760 waiting for even before last Friday. Of course, that's the 0:20:52.800 --> 0:20:57.080 earnings from Nvidia. Another is a solid quarter, but the 0:20:57.160 --> 0:21:00.960 shares are dropping ever so slightly that this morning. What's 0:21:01.040 --> 0:21:02.600 the disconnect? 0:21:03.320 --> 0:21:07.159 I mean, look, the expectations first Company are absolutely sky high, 0:21:07.240 --> 0:21:10.760 and there was heading into the numbers some expectation that 0:21:10.960 --> 0:21:13.480 essentially a beat is a meat, right, People were expecting 0:21:13.520 --> 0:21:16.840 them to beat expectations, and if they didn't completely blow 0:21:16.880 --> 0:21:18.879 expectations out of the water, then there might be a 0:21:18.920 --> 0:21:21.439 little bit of profit taking. That certainly looks like what 0:21:21.600 --> 0:21:24.000 is happening now that the shares have been on such 0:21:24.040 --> 0:21:26.600 a tear in recent month, there's an opportunity for you know, 0:21:26.680 --> 0:21:28.719 some investors to maybe just cash in a little bit 0:21:28.760 --> 0:21:31.640 on that. It doesn't appear to be anything particularly catastrophic. 0:21:31.640 --> 0:21:33.880 There's still a lot of growth left in this company. 0:21:34.160 --> 0:21:37.520 The only question mark hetting forward is what is the 0:21:37.560 --> 0:21:40.320 exposure to China? They want more exposure, but it looks 0:21:40.359 --> 0:21:42.520 as though the government is cracking down on some of that. 0:21:42.920 --> 0:21:44.439 How big an impact will that have? 0:21:47.600 --> 0:21:50.639 This is Bloomberg Daybreak Today, your morning brief on the 0:21:50.680 --> 0:21:54.120 story's making news from Wall Street to Washington and beyond. 0:21:54.240 --> 0:21:57.240 Look for us on your podcast be by six am 0:21:57.359 --> 0:22:01.720 Eastern each morning on Apple Spot and anywhere else you 0:22:01.800 --> 0:22:02.920 get your podcasts. 0:22:03.440 --> 0:22:06.120 You can also listen live each morning starting at five 0:22:06.200 --> 0:22:08.760 am Wall Street Time on Bloomberg eleven three to zero 0:22:08.840 --> 0:22:11.720 in New York, Bloomberg ninety nine to one in Washington, 0:22:11.800 --> 0:22:15.000 Bloomberg one oh sixty one in Boston, and Bloomberg ninety 0:22:15.000 --> 0:22:16.520 sixty in San Francisco. 0:22:17.080 --> 0:22:20.640 Our flagship New York station is also available on your 0:22:20.760 --> 0:22:26.560