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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: DAYBAC podcast, available every morning on Apple, Spotify or wherever

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Speaker 1: you listen. It's Tuesday, the twenty fifth of June in London.

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Speaker 1: I'm Caroline Hepcare and.

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Speaker 2: I'm Stephen Carroll coming up today. Four hundred and thirty

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Speaker 2: billion dollars has wiped off the value of Nvidia as

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Speaker 2: the chip maker suffers the biggest three day lass in history.

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Speaker 1: Julian Massage is to return home. The wikileague's founder agrees

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Speaker 1: a plea deal with the US that we'll see him

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Speaker 1: avoid further jail time.

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Speaker 2: Plus a housing crisis so big it would need a

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Speaker 2: city the size of London to fix it, we look

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Speaker 2: at why Britain has fallen so far behind its European

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Speaker 2: peers in delivering new homes.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Nvidia's share price has entered correction territory after four hundred

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Speaker 2: and thirty billion dollars was wiped off the AI chip

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Speaker 2: giants value in just three trading days after briefly holding

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Speaker 2: the title is the world's most valuable company. The thirteen

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Speaker 2: percent drop puts in videos valuation back below three trillion dollars,

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Speaker 2: below that of both Microsoft and Apple. According to data

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Speaker 2: compiled by Bloomberg, it is the biggest three day value

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Speaker 2: loss for any company in history. Wealth Enhancement Group portfolio

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Speaker 2: manager Ayako Yoshioka says markets are struggling to accurately value

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Speaker 2: in video right now.

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Speaker 3: I think it's really difficult to really ascertain what the

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Speaker 3: total addressable market really is for artificial intelligence. It used

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Speaker 3: to be sort of a rule of thumb when I

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Speaker 3: was growing up in this business that, you know, anything

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Speaker 3: over ten times price to sales was just too expensive.

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Speaker 3: And at twenty three times, it's well above that, and

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Speaker 3: so it does become very difficult and so and it

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Speaker 3: becomes more of a short term guessing game in terms

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Speaker 3: of supply and demand.

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Speaker 2: Ayako Yoshioka. They're speaking to Booberg Technologies ed Ludlow. Even

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Speaker 2: with the selloff over the last few days, and videos

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Speaker 2: still the second best performer on the S and P

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Speaker 2: five hundred this year, up nearly one hundred and forty percent.

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Speaker 1: Now, the Federal Reserve has shown other US regulators a

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Speaker 1: three page document of possible changes to their bank capital overhaul.

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Speaker 1: Bloomberg understands that the changes would significantly lighten the load

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Speaker 1: on Wall Street lenders. The revision is understood to walk

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Speaker 1: back key parts of the Landmark proposal and could lead

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Speaker 1: to significant reductions in how much additional capital large banks

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Speaker 1: are required to hold. Bloomberg's Banking Regulations Report of Katanga

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Speaker 1: Johnson says that the move would be seen as a

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Speaker 1: victory for Wall Street banks generally.

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Speaker 4: While there aren't any specific targets that the FED has made,

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Speaker 4: sources that we've spoken to say that if all the

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Speaker 4: changes in this term she were to take a fact,

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Speaker 4: we could see a hike of at least or as

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Speaker 4: low as five percent, as opposed to the sixteen percent

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Speaker 4: across the board.

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Speaker 1: Katanga Johnson says that US officials haven't yet reached an

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Speaker 1: agreement on the bank capital revamp, and it's still unclear

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Speaker 1: whether a revised package will get across the finish line

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Speaker 1: before the presidential election in November.

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Speaker 2: Julian Asand plans to plead guilty to leaking US national

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Speaker 2: security documents as part of a deal with the US

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Speaker 2: that will allow him to return home. The Wiki leak's

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Speaker 2: founder has spent the past five years in a British prison.

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Speaker 2: The deal with the Department of Justice will mean his

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Speaker 2: return to Australia. The current editor in chief of Wiki Leagues,

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Speaker 2: Kristin Ranson, says that Assand has left the UK.

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Speaker 5: I just came out of Belmar's prison in what I

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Speaker 5: hope is my last visit to see Julian here in

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Speaker 5: this prison where he's spent five years, two months and

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Speaker 5: two weeks. And if you're seeing this, it means he

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Speaker 5: is out.

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Speaker 2: A's Kristin Ranson there, speaking in a pre recorded statement.

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Speaker 2: The Plea Agreement seeks to end an international fight to

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Speaker 2: prosecute a sanje Over League's publication of sensitive US military documents,

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Speaker 2: including war logs and diplomatic cables in twenty ten and

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Speaker 2: twenty eleven. It was one of the largest breaches of

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Speaker 2: state secrets in US history.

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Speaker 1: France's president says that the policies of the far right

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Speaker 1: in the upcoming elections could spark a quote civil war.

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Speaker 1: Manu and Macon told the Generation Do It Yourself podcast

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Speaker 1: that the national rally parties plans tackle crime focusing on

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Speaker 1: people's religion or origins is divisive and could lead to unrest.

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Speaker 1: He also said that there were risks from far left

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Speaker 1: policies It comes after the far right leader Jordan Bardella

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Speaker 1: said that his party is ready to govern if it

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Speaker 1: wins the election.

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Speaker 6: Seven lone years of machronism have weakened the country, the

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Speaker 6: budget situation at an air bankruptcy, as well as the

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Speaker 6: security and migration disorders.

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Speaker 7: Power call for unity. The Nationality today is the only

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Speaker 7: movement capable of imp the aspirations clearly expressed by the

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Speaker 7: French people in a reasonable manner. In three words, We're ready.

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Speaker 1: That was the national rally president Jordan Bardella, speaking there

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Speaker 1: through a translator. His party is leading in the polls

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Speaker 1: head of the first round of voting on Sunday, with

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Speaker 1: one survey suggesting that the party could secure an absolute

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Speaker 1: majority in the French Parliament.

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Speaker 2: The UK's two largest parties are both warning that the

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Speaker 2: other would break the economy, as a leading think tank

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Speaker 2: says they have dubbed hard fiscal choices. Leaders Kirs Armer

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Speaker 2: and Richie Sunac have both invokes the memory of Liz

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Speaker 2: Tross as they traded barbs on tax and spend policies.

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Speaker 2: It comes as Poles suggests Sunac faces an electoral wipeout.

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Speaker 2: Conservative Kemmy Badenoch didn't rule out standing to replace Ritchie Sunac.

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Speaker 2: In a Bloomberg debate between the two potential next business secretaries.

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Speaker 8: I'm already the secual of Business and Trade and it's

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Speaker 8: actually been the job of a lifetime. We need to

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Speaker 8: focus on this lie. The choice is going to be

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Speaker 8: between us or between them. I can be afraid if

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Speaker 8: it is them, is all I would say. And we

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Speaker 8: will talk about leadership things after an election.

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Speaker 2: You can listen to the full deblate between Mmy Badenoch

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Speaker 2: and Labor's shadow business Secretary Jonathan Reynolds on YouTube or

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Speaker 2: in the Bloomberg UK Politics podcast feed. In a moment,

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Speaker 2: we'll look at the sudden drop and in video's Dark

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Speaker 2: Price and bring you new Bloomberg analysis on the size

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Speaker 2: of the whole in the UK's housing market, with both

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Speaker 2: the Tory and Labor parties promising to build more homes.

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Speaker 2: But the story that caught our eye this morning technology

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Speaker 2: colliding with the creative industries.

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Speaker 1: Yeah, this is such an interesting piece. So the biggest

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Speaker 1: record labels in the world are now suing a couple

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Speaker 1: of AI startups for their training models, using allegedly massive

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Speaker 1: amounts of copyrighted sound recordings. So it's the industry body

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Speaker 1: that's doing it, the Recording Industry Association of America. They

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Speaker 1: filed lawsuits against SONOAI and also Uncharted Labs, which is

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Speaker 1: the developer of ud Ai. It's a really interesting story.

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Speaker 1: I actually had a look online at some DJs using

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Speaker 1: Udeo to make songs. They were making them in like

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Speaker 1: sixty seconds with prompts, so it was so so quick.

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Speaker 2: We really love the example of the story. People could

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Speaker 2: go short written prompt like an electropop song about strawberries.

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Speaker 2: I want to know what that sounds like.

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Speaker 5: Well.

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Speaker 1: The reason that you do that, according to the CEO

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Speaker 1: of the business, is obviously you can't use an artist's

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Speaker 1: name or particular album, but you can just ask in

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Speaker 1: general for that music. The issue, though, is that the

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Speaker 1: trade is looking for damages. Do you want to know

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Speaker 1: how much?

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Speaker 2: It's huge?

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Speaker 1: One hundred and fifty thousand dollars per work infringed. So

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Speaker 1: this is all going to court then, yes, Creative industries

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Speaker 1: and ar clashing.

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Speaker 2: Yeah, indeed, an interesting reflection I suppose on how the

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Speaker 2: creative industries are adapting to this huge change in technology

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Speaker 2: as well and the sort of challenges that it could present.

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Speaker 2: As we you know, AI being increasingly used in different

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Speaker 2: industries and more extensively using as well. As This is

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Speaker 2: going to be a really closely watched case to see

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Speaker 2: how artists can protect their music and also crucially how

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Speaker 2: record labels can do that as well.

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Speaker 1: Now let's think about, well, the big move in US

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Speaker 1: stock markets yesterday, of course, and videos share price drop

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Speaker 1: thirteen percent since it briefly overtook Microsoft last week as

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Speaker 1: the world's most valuable company. It has pushed in Videos

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Speaker 1: shares into a technical correction and seems to have shaken

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Speaker 1: also the broad optimism about US equities, which have posted

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Speaker 1: record after record this year. Joining us to discuss is Boomberg.

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Speaker 1: Opinion columnists covering technology in Asia, Tim culprin Good Morning, Tim,

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Speaker 1: many explanations for the sudden route in Video's shares were

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Speaker 1: down on Monday alone six point seven percent. Why do

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Speaker 1: you think it's happened over these last few days.

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Speaker 9: Well, there's nothing fundamental that's actually changed in the company.

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Speaker 9: Has been outlook change or anything like that. There's been

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Speaker 9: no major announcements. It's worth putting in context that they're

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Speaker 9: estimated priced earnings ratio is forty four times, so that's

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Speaker 9: pretty high. It takes forty four years to get back

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Speaker 9: your money if you're invested in video. But there's a

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Speaker 9: few things happening kind of on the ground level that

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Speaker 9: I think shareholders, investors, fundam mentioners are starting to hear.

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Speaker 9: And one of them is that there is concerns that

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Speaker 9: those who are buying in video chips, these chips that

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Speaker 9: go into the massive AI data centers, may not be

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Speaker 9: able to install them quickly enough. And it's not easy

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Speaker 9: to install an AI data center. They suck up a

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Speaker 9: hell of a lot of energy, lots on lots of electricity,

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Speaker 9: and on the other side of that, there's a lot

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Speaker 9: of heating that needs to be dealt with. They need

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Speaker 9: to cool them down. They're using liquid cooling systems like

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Speaker 9: massive refrigerators attached to these server farms, and this is

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Speaker 9: really really difficult stuff. So what I'm hearing on the

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Speaker 9: ground in Asia, which is also a belief persistem throughout

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Speaker 9: both North America and Europe, is that the big companies,

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Speaker 9: the big cloud service providers that want to install AI

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Speaker 9: data centers are struggling to make the data centers that

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Speaker 9: can really meet these standards. And if they can't meet

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Speaker 9: those standards, they're not going to be able to buy

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Speaker 9: more in via chips going forward because they just can't

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Speaker 9: install them, they can't pew them, they can't call them,

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Speaker 9: and so forth. So that is a concern going forward,

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Speaker 9: and I do wonder whether some investors are starting to

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Speaker 9: hear those things.

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Speaker 2: Does this go as far as undermining confidence in the

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Speaker 2: AI story?

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Speaker 9: Tem No, Look, the AI boom is here. I think

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Speaker 9: we're really looking at, you know, nineteen twenties automobiles. There's

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Speaker 9: going to be some pickups. There's going to be times

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Speaker 9: where you know, cars crash or there's not enough petrol

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Speaker 9: stations or gas stations to fuel the cars, or the

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Speaker 9: roads are not that great. But you know, the long

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Speaker 9: term future of AI is definitely assured. At the belief

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Speaker 9: right now is, of course, is that in video is

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Speaker 9: the biggest winner of that. Who also the winners TSMC,

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Speaker 9: maybe Amazon, maybe Apple, and all the other companies have

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Speaker 9: their own AI plays. But the bigger thesis is absolutely intact.

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Speaker 9: It's just a matter of what bumps are going to

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Speaker 9: be on the way.

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Speaker 1: Yeah, what do you think it means?

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Speaker 8: Though?

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Speaker 1: For the wider markets, I mentioned the kind of optimism

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Speaker 1: that we've seen, is it thirty one record highs for

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Speaker 1: US equities this year.

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Speaker 9: Yeah, looks so much of what's going on in the

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Speaker 9: US is about these companies. You know, the eight largest

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Speaker 9: companies in the world, seven of them American, two of

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Speaker 9: them one is Saudi Aramco, the oil company. The eight

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Speaker 9: one is TSMC, which is in some ways de fecto American.

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Speaker 9: So you've got Apple, You've got Nvid, you've got Microsoft, Amazon.

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Speaker 9: All these companies are in the AI space. So all

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Speaker 9: the trinion dollar companies are somehow connected to AI, except

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Speaker 9: Saudi Aramco, who's oil, I guess is powering some power stations.

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Speaker 9: So you know, AI is really the big story of

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Speaker 9: tox right now, especially in the United States.

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Speaker 2: Okay, Tim Colpen, Bloomberg opinion columnists covering technology in Asia,

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Speaker 2: thank you very much for joining us with your analysis

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Speaker 2: this morning. Well, let's take you to a story here

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Speaker 2: in the UK. Now, Britain's housing crisis become so acute

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Speaker 2: that the next government will need to build the equivalent

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Speaker 2: of another city the size of London to make up

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Speaker 2: for five decades of low target construction. That's according to

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Speaker 2: Bloomberg analysis of official data. The trend has contributed to

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Speaker 2: high living costs for many and as pricing so much

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Speaker 2: of the population out of owning a home. Housing one

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Speaker 2: of the key issues in the UK election as well.

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Speaker 2: And our reporter aim And Farhart is joining us now

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Speaker 2: for more. Good morning to you, Aim and so give

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Speaker 2: us an explanation. How did you arrive at a city

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Speaker 2: the size of London? How many houses are needed in

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Speaker 2: the UK?

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Speaker 10: Yeah, exactly, I mean it's four point three million houses.

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Speaker 10: What we basically we looked at almost like the last

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Speaker 10: fifty years and we tried to compare how much the

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Speaker 10: UK was building and how much Western Europe, so countries

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Speaker 10: like France, Germany, Spain, how much they were building. And

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Speaker 10: if you kind of if we were to have kept

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Speaker 10: up with the peace of the rate of growth of

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Speaker 10: housing in Europe, we would have had four point three

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Speaker 10: million more homes. And that's what we should have. That's

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Speaker 10: what kind of research I think we should have to

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Speaker 10: have a housing market that isn't under as much pressure.

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Speaker 10: Four point three million, which is bigger than London actually

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Speaker 10: when it comes to the number of homes.

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Speaker 1: I mean, it's a staggering figure, isn't it. In terms

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Speaker 1: of the shortfall then obviously perhaps quite a number of explanations.

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Speaker 1: So why we haven't built enough over all those years?

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Speaker 10: Yeah, I mean one thing is when you talk about

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Speaker 10: the housing deficit, it's one hand about you know the

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Speaker 10: fact that we haven't had you know, the kind of

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Speaker 10: planning system that allows for the housing that we need.

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Speaker 10: It's you know, the fact that the kind of public

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Speaker 10: housing stock also has dropped quite low, especially kind of

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Speaker 10: studying in the kind of seventies eighties, and that's for

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Speaker 10: historic reasons when market Thatcher was in power. And it's

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Speaker 10: also about population growth. You know, there are some parts

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Speaker 10: of the country where the population has grown quite quickly

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Speaker 10: and there just hasn't been the housing to keep up

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Speaker 10: with it. So, you know, one hand, it's about the supply,

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Speaker 10: but also the demand for housing, which in some places

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Speaker 10: is going you know, it's about ten to one ten

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Speaker 10: people have kind of an age to the population in

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Speaker 10: some areas to every one house that has been built.

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Speaker 2: Which areas the UK are we talking about as being

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Speaker 2: the worst affected? Is this a London problem?

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Speaker 10: Aiman? I mean, it's interesting when you look at the data,

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Speaker 10: London does come up as being you know, quite bad,

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Speaker 10: but actually it's sometimes the place is kind of around

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Speaker 10: in and around London. So you know, places like Luton

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Speaker 10: comes up as being one of the worst places in UK,

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Speaker 10: Birmingham comes off as being somewhere that's quite bad. I mean,

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Speaker 10: i'd say that actually it's not just another problem. This

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Speaker 10: is some thing that's been felt across the UK. You know,

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Speaker 10: it's obvious that you know where big cities are, where

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Speaker 10: the jobs are often is where the housing is most stressed.

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Speaker 10: But even you know commuter towns places up north as well.

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Speaker 10: This is something that's being held and felt by people

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Speaker 10: across you know, from Scotland down to data south of England.

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Speaker 1: And also of course in this election campaign moment, how

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Speaker 1: the party's hoping to fix this I suppose Also why

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Speaker 1: have they not managed to fix it In the past

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Speaker 1: there has been a house building target that was then

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Speaker 1: softened by the Conservatives in office, and Labor have a

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Speaker 1: big pledge on this too.

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Speaker 10: Yeah, so whilst conceptives are an officer, was this two

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Speaker 10: in one thousand homes per year target that was never reached.

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Speaker 10: Labor now have said they're going to build one point

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Speaker 10: five million homes in the next parliament, which is also

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Speaker 10: three in one thousand homes. I mean, just to say

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Speaker 10: one thing is that all the target said about there

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Speaker 10: would not you know, remove this deficit. It would take

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Speaker 10: I think about you know, fourteen fifteen years with no

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Speaker 10: population growth at the rates that they're talking about to

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Speaker 10: remove the deficits. So it's quite difficult. I mean, it

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Speaker 10: comes down to planning. I think, I think the labor

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Speaker 10: you know, they're talking a lot about these these goals,

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Speaker 10: but it's about reforming the planning system and really getting

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Speaker 10: big number of homes you know, built that could actually

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Speaker 10: make a different and that's what really has held it

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Speaker 10: back up to now.

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Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the

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