WEBVTT - Nvidia Slides on Chip Curbs; China Open to US Dialogue

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

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<v Speaker 2>Good morning, I'm John Tucker.

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<v Speaker 3>And I'm Karen Moscow. Here are the stories we're following

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<v Speaker 3>today and.

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<v Speaker 2>Karen, futures are dropping on heels. A warning from in Vidia,

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<v Speaker 2>the chip giant says it's going to have to report

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<v Speaker 2>about five and a half billion dollars in write downs

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<v Speaker 2>during the current quarter. That's because the Trump administration has

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<v Speaker 2>barred in video from selling its H twenty chip in China.

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<v Speaker 2>And Bloomberg's Mike Shepherd says the government is concerned the

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<v Speaker 2>chip could be used in or diverted to a supercomputer

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<v Speaker 2>in China.

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<v Speaker 4>And that is one of the concerns that the US

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<v Speaker 4>government has, is that, in fact, by using a different

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<v Speaker 4>package or stack of these Age twenty chips. And remember

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<v Speaker 4>the H twenty chip has already been modified and scaled

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<v Speaker 4>down for the China market, and that's owing to restrictions

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<v Speaker 4>going back to twenty twenty two. And Nvidia has been

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<v Speaker 4>on the cross heres since the Biden administration for the

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<v Speaker 4>advanced chips produces and sells and have been selling into

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<v Speaker 4>the China market, and they have been looking to make

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<v Speaker 4>sure that China doesn't get its hands on the best.

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<v Speaker 2>Stuff, Bloomberg's Mike Shepherd in Washington. Shares of Nvidia right

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<v Speaker 2>now down more than five percent in early trading.

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<v Speaker 3>Well John also adding it to weakness to chip stocks.

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<v Speaker 3>This morning, a disappointing report from Dutch ship equipment maker

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<v Speaker 3>ASML Holding. The company reported orders for the first quarter

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<v Speaker 3>that were more than one point one billion dollars less

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<v Speaker 3>than expected. ASML is also warning that it doesn't know

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<v Speaker 3>how to quantify the impact from recent tariff announcements, which

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<v Speaker 3>are threatening to upend the semiconductor industry, and shares of

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<v Speaker 3>ASML are down more than five percent in Europe.

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<v Speaker 2>And Karen Tesla reportedly suspending plans to ship components from

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<v Speaker 2>China with cybercab and semi electric trucks in the US.

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<v Speaker 2>Reuter says Elon Musk was prepared to absorb the additional

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<v Speaker 2>costs when President Trump imposed the thirty four percent tariff

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<v Speaker 2>on Chinese goods, but could not do so when the

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<v Speaker 2>terraf went beyond that. Shares of Tesla them more than

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<v Speaker 2>three percent at early trading.

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<v Speaker 3>Now, John, let's get the latest on the escalating trade

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<v Speaker 3>war between the US and China. Bloomberg News has learned

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<v Speaker 3>China wants to see a number of steps from President

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<v Speaker 3>Trump's administration before agreeing to trade talks, that include showing

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<v Speaker 3>more respect by reigning in disparaging remarks by members of

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<v Speaker 3>his cabinet. Meanwhile, President Trump is calling on China to

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<v Speaker 3>reach out for trade negotiations. And here's White House Press

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<v Speaker 3>Secretary Caroline Lovitt.

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<v Speaker 5>The ball is in China's court. China needs to make

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<v Speaker 5>a deal with us. We don't have to make a

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<v Speaker 5>deal with them. There's no difference between China and any

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<v Speaker 5>other country, except they are much larger. And China wants

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<v Speaker 5>what we have. What every country wants what we have

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<v Speaker 5>the American consumer, or to put in another way, they

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<v Speaker 5>need our money.

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<v Speaker 3>White House Press Secretary Caroline Levitt, speaking yesterday, sources now

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<v Speaker 3>Bloomberg that Beijing also wants the US to appoint a

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<v Speaker 3>point person for talks who has the President's support and

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<v Speaker 3>can help prepare a deal that Trump and Chinese leader

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<v Speaker 3>Shieshin Pin can sign when they meet.

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<v Speaker 2>And we have fresh economic data out of China. The

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<v Speaker 2>economy there grew via faster than expected five to four

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<v Speaker 2>zero point four percent in the first three months of

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<v Speaker 2>the year. The surprising strength in the world's second largest

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<v Speaker 2>economy comes as concerns mount over the potential impact of

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<v Speaker 2>one hundred and forty five percent US tariffs on Chinese goods.

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<v Speaker 3>Well, John is investors await the latest tariff developments. They

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<v Speaker 3>will have a key speech by j Powell to digest,

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<v Speaker 3>and we get a preview with the Bloomberg's Michael McKee.

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<v Speaker 6>Corporate leaders, economists, investors, and FED officials all have the

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<v Speaker 6>same problem. Nobody knows what Donald Trump is actually going

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<v Speaker 6>to do on tariffs. FED Governor Chris Waller said Monday,

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<v Speaker 6>it's impossible now to forecast how the economy will develop,

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<v Speaker 6>which makes FED Chairman Jay Powell's job much harder. Today,

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<v Speaker 6>in his Chicago speech, the chair will attempt to reassure

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<v Speaker 6>jiterary markets that no matter what happens, the Central Bank

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<v Speaker 6>will be on the job, able to raise rates if

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<v Speaker 6>Trump's new taxes increase inflation, or cut rates if they

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<v Speaker 6>lead the economy just slow significantly. He said all that before.

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<v Speaker 6>Of course, it's not clear what he could add to

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<v Speaker 6>that message today. Michael McKee, Bloomberg Radio.

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<v Speaker 3>All right, Michael, thank you, Well, Bloomberg will bring you

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<v Speaker 3>Jay Powell's full remarks from the Economic Club of Chicago.

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<v Speaker 3>Coverage begins at one thirty Wall Street time on Bloomberg Radio,

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<v Speaker 3>Bloomberg Television, and the Bloomberg Podcast page on YouTube.

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<v Speaker 2>And looking over in Europe now, UK inflation slipped for

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<v Speaker 2>a second straight month. A consumer prices rose just two

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<v Speaker 2>point six percent of the twelve months to March. This

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<v Speaker 2>was driven by cheaper computer games, falling fuel prices, and

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<v Speaker 2>unchanged food costs.

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<v Speaker 3>Well back here in the US, John it appears the

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<v Speaker 3>move to increase taxes for the ultra wealthy as gaining

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<v Speaker 3>traction among lawmakers, including Republicans, and Bloomberg's Amy Morris has

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<v Speaker 3>more from Washington.

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<v Speaker 7>Republicans in the White House, the Senate and the House

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<v Speaker 7>are considering a new tax bracket for the wealthiest Americans,

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<v Speaker 7>with the House proposal setting a forty percent rate for

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<v Speaker 7>those earning one million dollars or more per year. These

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<v Speaker 7>talks are part of the effort to pay for a

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<v Speaker 7>sweeping tax bill by the end of this year, with

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<v Speaker 7>options including offsetting the cost of an expanded state and

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<v Speaker 7>local tax deduction with a millionaire's bracket. A White House

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<v Speaker 7>official tells Bloomberg President Trump is open to the idea

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<v Speaker 7>of a new top tax bracket, but for an income

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<v Speaker 7>greater than a million dollars. In Washington, Amy Moore as

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<v Speaker 7>Bloomberg Radio Right.

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<v Speaker 2>Thanks Amy. The government's anti trust trial seeking to break

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<v Speaker 2>up Meta Platforms that continues today. In testimony yesterday was

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<v Speaker 2>revealed seven years ago, Mark Zuckerberg considered spinning off Instagram

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<v Speaker 2>from Facebook, fearing the company might be broken up in

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<v Speaker 2>the next five to ten years. With the Federal Trade

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<v Speaker 2>Commission is now suing Meta to break it up. Alludging

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<v Speaker 2>its acquisitions of Instagram at WhatsApp created a social media monopoly,

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<v Speaker 2>while Meta argues it faces many competitors.

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<v Speaker 3>And John the White House is starting a new media

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<v Speaker 3>policy that restricts wire services access to the president. That

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<v Speaker 3>move blocks a traditional press pools that served billions of readers.

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<v Speaker 3>It comes after a judge ruled the White House and

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<v Speaker 3>violated the Associated Press's free speech by banning it because

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<v Speaker 3>it disagreed with the outlet's decision not to rename the

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<v Speaker 3>Gulf of Mexico. The White House says it will ultimately

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<v Speaker 3>give Press Secretary Caroline Lovett the final say over who

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<v Speaker 3>gets to question her boss. Time now for a look

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<v Speaker 3>at some of the other stories making news in New

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<v Speaker 3>York and around the world. And for that we're joined

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<v Speaker 3>by Bloomberg's Michael Barr Michael, Good Morning.

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<v Speaker 8>Good Morning Karen. A federal judge says she will order

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<v Speaker 8>sworn testimony by Trump administration officials to determine if they

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<v Speaker 8>complied with their orders to facilitate the return of Kilmar

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<v Speaker 8>Abrego Garcia, the Maryland man was mistakenly deported to a

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<v Speaker 8>notorious L. Salvador prison last month. The US Supreme Court

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<v Speaker 8>ordered the Trump administration to return him, but the administration

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<v Speaker 8>has so far refused, claiming he's in the MS thirteen gang.

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<v Speaker 8>White House spokesperson Caroline Lovett, there.

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<v Speaker 5>Is never going to be a world in which this

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<v Speaker 5>is an individual who's going to live peaceful life in

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<v Speaker 5>Maryland because he is a foreign terrorist and MS thirteen

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<v Speaker 5>gang member.

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<v Speaker 8>Abrego Garcia's attorneys deny the gang allegations and say he

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<v Speaker 8>was never charged with a crime. Abrego Garcia's wife, Jennifer Pasquez, sura,

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<v Speaker 8>as we continue.

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<v Speaker 9>Through Holy Week, my heart aches for my husband, Whosha

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<v Speaker 9>had been here leading our Easter prayers. Instead, I find

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<v Speaker 9>myself pleading with the Trump administration and the Buchel administration

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<v Speaker 9>to stop playing political games with the life of Kilmar.

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<v Speaker 8>Harvey Weinstein is back in the New York court as

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<v Speaker 8>jury's selection begins for his retrial on sexual assault charges.

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<v Speaker 8>The legal representative for one of his accusers spoke outside

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<v Speaker 8>court Tuesday, attorney Lindsay Goldbrum.

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<v Speaker 3>Over the next several weeks, these women will testify about

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<v Speaker 3>these heinous acts that have been committed against them, and

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<v Speaker 3>intimate details of their lives will come out.

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<v Speaker 8>New York's highest court over turned Weinstein's conviction in his

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<v Speaker 8>twenty twenty trial. Finally, we've lost a game show legend,

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<v Speaker 8>and now.

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<v Speaker 6>From Television City in Hollywood, here's your host, Don Gambit,

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<v Speaker 6>Wink Martin Dale.

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<v Speaker 10>Thank you very much.

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<v Speaker 8>Weak Martindale, host of such hit game shows as Gambit,

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<v Speaker 8>which debut in nineteen seventy two and Tiktak Dooe, has died.

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<v Speaker 8>Martin Dale began his career in radio. This publicist says

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<v Speaker 8>Martindale died after battling lampoma for a year. Wink Martindale

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<v Speaker 8>was ninety one Global News, twenty four hours a day

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<v Speaker 8>and whatever you wanted with Bloomberg News. Now, I'm Michael Barr,

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<v Speaker 8>this is Bloomberg.

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<v Speaker 3>Karen All right, Michael Barr, thank you time now for

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<v Speaker 3>the Bloomberg Sports Update. Here's John Stashaur John, Good morning

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<v Speaker 3>morning here.

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<v Speaker 11>Max Freed was the Yankees big free agent signing so

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<v Speaker 11>far as good as advertised. He's three and I was

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<v Speaker 11>era is under two at the stadium, the Yanks field

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<v Speaker 11>to support him against Kansas City into wilda sixth inning

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<v Speaker 11>infield single, three straight walks and they had a run

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<v Speaker 11>in and three on for Jason Domingo.

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<v Speaker 10>So one to two, blind Dragons pas down the lu

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<v Speaker 10>field Live Chisham scores, ful, Py scores, they're a leaving

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<v Speaker 10>home wells who well scores. That's up faces clearing double

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<v Speaker 10>for Dominguez and the Yankees have taken a four two leads.

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<v Speaker 11>Yeah, that was the final over the Royals. Yes Network

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<v Speaker 11>to call in Minnesota, Metsica that home runs from both

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<v Speaker 11>the Alonzo and Juan Soto. Alonzo's fifth of the season

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<v Speaker 11>came first inning. Soto now homers and back to back games,

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<v Speaker 11>but the Twins scored in five straight innings and they

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<v Speaker 11>won six to three. The Red Sox won seven to

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<v Speaker 11>four at Tampa Bay. Alex Bregman two home runs, five hits,

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<v Speaker 11>four RBIs Nationals behind Jake Irvin won three nothing at Pittsburgh.

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<v Speaker 11>The NBA postseason is underway pair of wins by home

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<v Speaker 11>teams or Orlando by twenty five over Atlanta, so the

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<v Speaker 11>Magic advance to play the Celtics. The Hawks now head

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<v Speaker 11>home to play Friday against the winner of tonight's Miami

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<v Speaker 11>Chicago game. The Warriors got to combine seventy five points

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<v Speaker 11>from Jimmy Butler and Steph Curry one twenty one to

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<v Speaker 11>one sixteen over Memphis. It'll be Golden State now against Houston. Dallas.

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<v Speaker 11>Tonight plays Sacramento the Winter Place Friday in Memphis. Devil's

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<v Speaker 11>won five to four in overtime at Boston. Devil's finished

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<v Speaker 11>third place of the division. They'll have a first round

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<v Speaker 11>playoff series with Carolina. The Islanders last home game of

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<v Speaker 11>three to one loss to the Capitals. The Giants at

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<v Speaker 11>the third pick of next week's draft. They are heading

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<v Speaker 11>to Boulder to watch a private workout by Colorado quarterback

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<v Speaker 11>Shadorah Sanders, Johns Stashankler, Bloomberg.

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<v Speaker 7>Sports Karen Jones.

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<v Speaker 1>Coast to coast on Bloomberg Radio, nationwide on Sirius XM,

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<v Speaker 1>and around the world on Bloomberg dot Com and the

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<v Speaker 1>Bloomberg Business app. This is Bloomberg Daybreak.

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<v Speaker 2>And among our lead stories this morning, it involves the

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<v Speaker 2>tech sector, the Trump administration of posing new restrictions on

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<v Speaker 2>Nvidia chip exports to China. Let's get more on this

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<v Speaker 2>story this morning with Pretty Gupta, host of Bloomberg Radio TV,

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<v Speaker 2>but joining us from our London studios. Pretty good morning

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<v Speaker 2>to you, Thanks for being with us. In video shares

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<v Speaker 2>that should say, among the most actively traded this morning,

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<v Speaker 2>down about five point three percent now in Vidia and

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<v Speaker 2>even TSMC. We're pledging closer relationships with the Trump administration.

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<v Speaker 12>When happened, well, they're still kind of there. I mean, look,

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<v Speaker 12>this is coming twenty four hours after a big investment

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<v Speaker 12>that Nvidia had announced in the United States and specifically

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<v Speaker 12>in some of the southern states like Texas and Arizona,

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<v Speaker 12>to the tune of five hundred billion dollars. But John,

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<v Speaker 12>to your point, the sentiment has completely taken a different

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<v Speaker 12>tone now to reporting a five and a half billion

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<v Speaker 12>dollar hit because the US is clamping down when it

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<v Speaker 12>comes to the exports of some of Nvidia's chips, specifically

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<v Speaker 12>the Age twenty chip, which in Vidia, by the way,

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<v Speaker 12>has created as kind of a watered down version of

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<v Speaker 12>the traditional AI chip that is specifically catered to kind

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<v Speaker 12>of circumvent and address some of the concerns from the

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<v Speaker 12>US government, first under Biden, now under Trump, and still

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<v Speaker 12>being able to serve their Chinese clientele. But it looks

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<v Speaker 12>like even that is coming across some pretty severe restrictions

0:12:08.640 --> 0:12:09.760
<v Speaker 12>under the Trump administration.

0:12:09.920 --> 0:12:13.800
<v Speaker 2>Okay, so this clamping down even predates the Trump administration,

0:12:14.320 --> 0:12:16.080
<v Speaker 2>Can we say it doesn't really have anything to do

0:12:16.160 --> 0:12:17.960
<v Speaker 2>with the trade war that's taking place.

0:12:18.520 --> 0:12:20.560
<v Speaker 12>It's definitely a piece of it, it feels like it.

0:12:20.600 --> 0:12:22.640
<v Speaker 12>But remember Jensen Wong has spent quite some time at

0:12:22.679 --> 0:12:27.040
<v Speaker 12>mar Lago before even even Donald Trump was elected, and

0:12:27.120 --> 0:12:30.320
<v Speaker 12>since then, right ahead of Nvidia this announcement to kind

0:12:30.320 --> 0:12:32.360
<v Speaker 12>of make sure like a lot of the tech CEOs

0:12:32.360 --> 0:12:34.600
<v Speaker 12>are there on the winning side of this. So so that

0:12:34.640 --> 0:12:38.320
<v Speaker 12>domestic investment is very much coming in that same vein.

0:12:38.480 --> 0:12:41.120
<v Speaker 12>Remember they're also choosing not to spend that five hundred

0:12:41.120 --> 0:12:43.600
<v Speaker 12>million dollars investment in Asia, so that very much is

0:12:43.720 --> 0:12:46.680
<v Speaker 12>a reaction function to the trade war. But this is

0:12:46.720 --> 0:12:50.559
<v Speaker 12>actually one that has been happening again under the Biden administration.

0:12:50.640 --> 0:12:50.880
<v Speaker 3>This eg.

0:12:50.960 --> 0:12:54.360
<v Speaker 12>Twenty chip that Nvidia has developed is the third iteration

0:12:55.040 --> 0:12:58.520
<v Speaker 12>of a chip to circumvent government restrictions. Like I said,

0:12:58.559 --> 0:13:01.120
<v Speaker 12>not just under the Trump administration, but this entire effort

0:13:01.360 --> 0:13:03.480
<v Speaker 12>started under the Biden administration and the chip that the

0:13:03.520 --> 0:13:05.000
<v Speaker 12>Chips Act and the restrictions there.

0:13:05.480 --> 0:13:08.440
<v Speaker 2>This news we got, this came in a regulatory filing.

0:13:08.760 --> 0:13:11.080
<v Speaker 2>It's not like it was an announcement from the Trump administration.

0:13:11.960 --> 0:13:13.720
<v Speaker 12>This isn't a yes, you're one hundred percent right. This

0:13:13.800 --> 0:13:16.400
<v Speaker 12>was a regulatory filing from Nvidia. This did not come

0:13:16.440 --> 0:13:18.800
<v Speaker 12>unto the Trump administration. But in Vidia going ahead and

0:13:18.840 --> 0:13:20.920
<v Speaker 12>talking about a five hundred five excuse me, five and

0:13:20.960 --> 0:13:23.880
<v Speaker 12>a half billion dollar hit to their bottom line, we

0:13:23.920 --> 0:13:27.240
<v Speaker 12>should just mention there are reports of other from other

0:13:27.280 --> 0:13:31.200
<v Speaker 12>media that are suggesting about seventeen to eighteen billion worth

0:13:31.320 --> 0:13:35.160
<v Speaker 12>of Age twenty chips that were already developed from and video.

0:13:35.240 --> 0:13:36.880
<v Speaker 12>So the key kind of phrase that you need to

0:13:36.920 --> 0:13:39.480
<v Speaker 12>keep an eye on in this filing is inventory, purchase

0:13:39.520 --> 0:13:42.080
<v Speaker 12>commitments and related reserves because a lot of these chips

0:13:42.240 --> 0:13:44.520
<v Speaker 12>have already been produced. So it's a question of if

0:13:44.559 --> 0:13:47.080
<v Speaker 12>they don't go to China, where did they go? Given

0:13:47.080 --> 0:13:48.679
<v Speaker 12>that they are kind of this water down version.

0:13:48.840 --> 0:13:52.200
<v Speaker 2>Okay, the H twenty water down version. Again, this is

0:13:52.960 --> 0:13:58.280
<v Speaker 2>this is a chip that specifically trains AI models.

0:13:58.840 --> 0:14:01.280
<v Speaker 12>It does it specifically has to do with inference. And

0:14:01.320 --> 0:14:04.360
<v Speaker 12>so the big concern from the Biden administration and the

0:14:04.400 --> 0:14:06.800
<v Speaker 12>Trump administration has been that so much of AI is

0:14:06.840 --> 0:14:10.359
<v Speaker 12>being used not just in things like consumer electronics like iPhones,

0:14:10.360 --> 0:14:14.080
<v Speaker 12>like washing machines, but ultimately to things like military intelligence

0:14:14.760 --> 0:14:18.160
<v Speaker 12>and more sophisticated technology. Now, if the US is able

0:14:18.240 --> 0:14:21.560
<v Speaker 12>to export that critical piece or kind of help to

0:14:21.640 --> 0:14:24.560
<v Speaker 12>that military technology to the likes of China given the

0:14:24.600 --> 0:14:28.480
<v Speaker 12>geopolitical tensions, that's where their concern lies. So Nvidia's solution

0:14:28.640 --> 0:14:32.000
<v Speaker 12>to that was to create this chip that still helps

0:14:32.160 --> 0:14:36.160
<v Speaker 12>these kind of consumer electronics and helps cater to a

0:14:36.160 --> 0:14:39.480
<v Speaker 12>clientele in that safe space, but isn't as advanced to

0:14:39.520 --> 0:14:41.880
<v Speaker 12>the point that you can use them in military technology.

0:14:41.880 --> 0:14:44.400
<v Speaker 12>And that's the difference here between the AH twenty chip

0:14:44.720 --> 0:14:47.000
<v Speaker 12>relative to some of the other products Nvidia offers.

0:14:47.360 --> 0:14:49.840
<v Speaker 2>Remember, like before the trade war, one of the big

0:14:50.080 --> 0:14:54.600
<v Speaker 2>concerns for investors had been AI investments, whether these were

0:14:54.600 --> 0:14:57.480
<v Speaker 2>going to pay off in the long term, and the

0:14:57.520 --> 0:15:00.600
<v Speaker 2>capital expenditures with respect to that. That's sort of faded

0:15:00.640 --> 0:15:03.560
<v Speaker 2>to the background. Isn't that back with us as a

0:15:03.600 --> 0:15:04.920
<v Speaker 2>concern for technology?

0:15:05.640 --> 0:15:07.960
<v Speaker 12>It is a little bit of a conservative technology because remember,

0:15:08.040 --> 0:15:09.880
<v Speaker 12>not so long ago, we were also talking about this

0:15:09.960 --> 0:15:12.800
<v Speaker 12>big Deep Seek kind of crash that had happened when

0:15:12.800 --> 0:15:15.600
<v Speaker 12>it comes to the cost of innovation around AI as well.

0:15:15.640 --> 0:15:17.280
<v Speaker 12>And this is where Nvidia's kind of stuck between a

0:15:17.360 --> 0:15:19.480
<v Speaker 12>rock and a hard place because so much of that

0:15:19.520 --> 0:15:23.520
<v Speaker 12>technology and that sourcing and that physical manufacturing is happening

0:15:23.520 --> 0:15:27.240
<v Speaker 12>abroad because it's cheaper to happen abroad. On top of that,

0:15:27.360 --> 0:15:29.280
<v Speaker 12>China has already proven they're able to come up with

0:15:29.320 --> 0:15:32.600
<v Speaker 12>technology that is almost eye to eye to what's being

0:15:32.600 --> 0:15:35.560
<v Speaker 12>developed in Silicon Valley and do it at a fraction

0:15:35.720 --> 0:15:37.840
<v Speaker 12>of the cost. Now, if that continues that they are

0:15:37.840 --> 0:15:40.600
<v Speaker 12>able to kind of really pull down those costs, that's

0:15:40.600 --> 0:15:43.160
<v Speaker 12>a big deal because Nvidia developing those chips in the

0:15:43.240 --> 0:15:46.200
<v Speaker 12>United States increase increases the cost of those chips.

0:15:47.000 --> 0:15:49.920
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