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17:53
PDT

NVIDIA's new PC launch emphasizes AI integration.

NVIDIA Jensen Huang MediaTek Taiwan AI PC CPU ICT NVDA

– Taiwan's ICT ecosystem is well-prepared for AI advancements.

– Economic growth in Taiwan is projected over 10% this year.

– The demand for AI technologies is increasing.

– Companies are focusing on AI to drive innovation.

AI integrationTaiwan tech growth

▸ Full transcript

So in the future, I will imagine that more and more people will use more AI and more and more companies and organizations will use generative AI. Well, let me put it to you. The demand is really there. Well, Jensen Huang today talked about launching this new PC with a MediaTek CPU. He's saying that they're going to essentially reinvent the PC. You know, the ICT backbone of Taiwan is the wind-tell monopoly, right? How does this announcement by NVIDIA and Jensen Huang reinvent the backbone of what was the tech sector in Taiwan? Well, we welcome the opportunity and the challenge. You asked me why this year's compute tax is essential. It's because of AI industries. I have to say that first we are lucky that, as you indicated earlier, we are going to achieve more than 10% economic growth this year. But it's not sheer luck. Our entire industry has been working very hard in the last three decades to build the most complete ICT ecosystem and supply chain right here in Taiwan. And that's exactly why when AI comes, we are ready. Taiwan is ready.

Analysis

NVIDIA's Jensen Huang announced a new PC with a MediaTek CPU, claiming it will reinvent the PC, highlighting the growing demand for AI technologies. Taiwan's robust ICT ecosystem positions it well for significant economic growth, projected to exceed 10% this year, as the country prepares for the AI industry's expansion.

17:50
PDT

AI literacy is becoming crucial for job seekers.

Cynthia Cottrell Mercer Deloitte EY Parthenon APAC Rob Heller AI Workforce Solutions Leader Hong Kong Bloomberg Australia PRIVATE AAPL

– Fear of job loss due to AI has increased significantly.

– Organizations are restructuring, not solely due to AI.

– Creativity and critical thinking remain essential skills.

– Employee satisfaction is at a historic low.

AI literacyjob market dynamicsemployee sentimentworkforce restructuring

▸ Full transcript

have even been embarrassed or even discouraged from using these tools throughout their educational experience. And then we're effectively making hiring decisions about these graduates based on their AI literacy and how well they use these tools. So if you are a student just finishing up your program or your studies, my advice would be to absolutely learn the tools. Learn the tools. And at the same time, continue to hone those skills of creativity, of judgment, of critical thinking. All right, Cynthia, that's all we have time for. But thanks so much for joining us, Cynthia Cottrell, Workforce Solutions Leader at Mercer. And we have more on Australia ahead. This is every Tuesday, 10:40 a.m. if you're watching in Sydney, 8:40 a.m. in Hong Kong. You can also tune into the Bloomberg Australia podcast and you can find that on Apple, Spotify or Bloomberg.com. This is Bloomberg.

Analysis

Cynthia Cottrell from Mercer emphasizes the importance of AI literacy for graduates, advising them to learn AI tools while also developing creativity and critical thinking skills. The rising fear of job loss due to AI, now at 44% among surveyed employees, highlights a significant shift in workforce sentiment and the need for organizations to adapt to these changes.

Smart money should note that while AI is perceived as a threat to jobs, it is also driving productivity gains and necessitating a shift in skill sets among new graduates. The ongoing restructuring in organizations, with 98% planning changes this year, indicates a broader trend of adaptation to market volatility and technological advancements.

17:48
PDT

Emphasis on productivity gains through advanced educational tools.

Cynthia Mercer

– Young graduates should specialize in technology-related fields.

– Concerns about job market volatility due to AI integration.

– Potential for educational institutions to lead in tech adoption.

– Need for graduates to adapt to changing job requirements.

educational technologyAI job market impact

▸ Full transcript

Through both a recognition of our productivity gains and being able to drive much more usage of those tools into education, into being able to equip our graduates as they come out of the pipeline with those tools. We actually see that as potentially more advanced here than in other parts of the world. Cynthia, there may be a sense of despondency among a number of young people who are either about to enter university or graduate from it. What would your message be to those young people about what they should be specializing in and what they should be doing?

Analysis

The discussion highlights the importance of equipping graduates with advanced tools to enhance productivity in education, suggesting a potential edge in this area compared to other regions. Young people facing uncertainty about their future careers should focus on specialization that aligns with evolving job markets influenced by technology and AI.

17:46
PDT

98% of organizations plan restructures this year.

Mercer Deloitte Rob Heller AI Global Talent Trends

– Employee satisfaction is at a decade low, now at 44%.

– Fear of AI job loss has increased significantly.

– Restructuring is part of broader business model changes.

– AI's impact on jobs is a growing concern among employees.

AI impact on jobsemployee satisfactionorganizational restructuring

▸ Full transcript

Thanks for having me. I think that ultimately the headlines, and certainly when we do see organizations make these workforce reduction decisions as a result of AI, we are seeing a combination of things happening. One, yes, there are restructurings happening according to our study that we just conducted and released this year. 98% of the organizations we interviewed are planning on restructures this year. Not all of them are doing that as a result of AI. So I think we need to sort of put into perspective that as part of business model change, as part of the volatility in the market, organizations are restructuring, changing, and growing at any rate. When it comes to AI and job loss, you know, the facts are there, and particularly for employees, we found that the thriving of our employee workforce certainly has dropped dramatically. It's actually at its lowest ever point in the 10 years that Mercer's been running the Global Talent Trends. So it's now at 44 percent of the workforce that we interviewed during this research. We also found that the fear of AI job loss across that same employee group that we interviewed has jumped up significantly as well from 28 percent in 2020.

Analysis

Organizations are restructuring significantly, with 98% planning changes this year, though not all are due to AI. Employee satisfaction has dropped to its lowest point in a decade, with fears of AI-induced job loss rising sharply from 28% in 2020.

17:44
PDT

Mercer survey predicts 20% job loss in Australian companies due to AI.

Mercer Deloitte Rob Heller Australia APAC EY AI CEO

– Deloitte claims AI boosts productivity by up to 30%.

– Job roles are being redesigned rather than simply replaced.

– Uneven access to AI tools contributes to employee dissatisfaction.

– AI's integration into supply chains is enhancing efficiency.

AI impact on jobsproductivity enhancementlabor market dynamics

▸ Full transcript

In a world of seismic change, will your business shape the future or be shaped by it? How will we capture the imagination of tomorrow's consumers? Overcome operational constraints to focus on future growth and unlock economic and social prosperity through environmental responsibility. With EY Parthenon and EY's full spectrum of services, we're reimagining the enterprise to shape the future with confidence. A recent survey by Mercer suggests most Australian companies expect AI to take away about 20% of jobs within two years. Their talent trend study also found a big drop in the number of employees who feel they are thriving at work, with uneven access to AI training and tools adding to dissatisfaction. Deloitte says otherwise though. APAC's CEO Rob Heller told us that AI is already boosting productivity by up to 30%, with jobs being redesigned rather than simply replaced. Technology is changing the way work is done. I'm a little more cautious that we're actually seeing the evidence of job losses. AI is getting embedded in the way a programmer redesigns an activity or an outcome for someone to deliver. And AI is getting embedded in the supply chain to make it more efficient, but you.

Analysis

The discussion highlights the contrasting views on AI's impact on employment, with a Mercer survey indicating a potential 20% job loss in Australian companies, while Deloitte's Rob Heller asserts that AI is enhancing productivity by up to 30%. This divergence suggests a complex landscape where AI is not merely replacing jobs but also reshaping roles and processes across industries.

Smart money should note the potential for AI to drive efficiency gains while simultaneously creating dissatisfaction among workers due to uneven access to training. This duality may influence investment strategies, particularly in sectors heavily reliant on labor and technology integration.

17:40
PDT

Investors are encouraged to stay invested during market contractions.

Bloomberg SBI Korea Taiwan India S&P 500 gold S&P 500

– Low-cost investment strategies are becoming more prominent.

– Thematic and sector ETFs are gaining traction among investors.

– There is a noticeable shift towards dividend-related products.

– Geopolitical issues are influencing investment flows and strategies.

investment strategygeopolitical riskETF trendsdividend focus

▸ Full transcript

To really benefit from the growth of a particular segment of the industry, either by sector ETFs or thematic ETFs. So we are more concentrated on index exposure than single countries, single themes, or single companies. I think your comments about pricing and low cost being a driver are really interesting ones, right? You talk about the concern as to what happens when the market starts to crack. What do you think the risks are there? There are always risks associated with investment. We always look at the compounding effect associated with investments in financial markets. We have seen market cycles and different market crises, whether it is during the global financial crisis or different market bubbles. But what we have observed is that markets always come back. And we think it's really important to tell clients to remain invested because these types of market cycles are not uncommon. Market contractions can be scary, but if you look at the performance of the S&P 500, for example since inception, if you missed five or ten of the biggest and the most successful trading days just because you pulled out of the market, you would have lost the benefits of the company.

Analysis

Market participants are advised to remain invested despite potential market contractions, as historical trends show that markets tend to recover over time. The emphasis on low-cost investment strategies and index exposure over single-country or single-theme investments highlights a shift towards more diversified and resilient portfolios.

Smart money should note the growing trend towards thematic and sector ETFs, which may provide better exposure to emerging markets and sectors like AI and gold. Additionally, the focus on dividend-related products indicates a shift in investor behavior towards seeking steady revenue streams amid geopolitical uncertainties.

17:38
PDT

Korea and Taiwan have overtaken India in market size.

Korea Taiwan India AI SBI GC=F

– Gold is stabilizing, not trending downwards.

– Investors are increasingly focused on dividend-related products.

– Aging populations are driving demand for steady income streams.

– Passive investment strategies are being emphasized.

emerging marketsgold stabilizationdividend strategiesdemographic trends

▸ Full transcript

Classes there are different cycles through which that asset class is going. So the current correction is not seen as the beginning of a downside trajectory for gold; rather, gold is just stabilizing. When looking at the seismic shifts in market composition in some sectors, AI plays a significant role, particularly with Korean markets gaining a larger share of the regional and global pie. Taiwan, for example, has just had Korea and Taiwan surpass India to become the fifth and sixth largest markets, with Taiwan being fifth and Korea sixth. Does this change your business strategy in terms of how much resources, staffing, and attention you're paying to these rising markets? We usually look at everything. We are mainly a passive investment firm, so we don't focus on market-specific, idiosyncratic events. We look at how we can provide exposure to these types of strategies or opportunities for our clients. We usually assess our lineup and how we can enable our clients to participate in the growth of the markets.

Analysis

Korean and Taiwanese markets have surpassed India, becoming the fifth and sixth largest markets, indicating a significant shift in regional market dynamics. This change may prompt investment firms to reassess resource allocation and strategies to capitalize on emerging market growth.

The ongoing stabilization of gold prices amidst geopolitical tensions suggests that investors are using gold as a hedge rather than a speculative asset. Additionally, the focus on dividend-related products reflects a broader trend towards seeking steady income streams in response to demographic shifts, particularly in aging populations.

17:36
PDT

Brent crude prices are just below $95 a barrel.

President Trump Iran Brent Japan S&P 500 ETFs Annie GC=F PRIVATE DXY

– Investors are shifting focus towards equities and gold.

– There is a notable lack of interest in emerging markets and fixed income.

– Aging demographics are driving demand for steady revenue streams.

– Healthy flows observed in option-based overlay ETFs.

geopolitical riskequity market trendsdemographic shifts

▸ Full transcript

The flows are in the range of $10 to $10.2 billion. This is more than the entire flows in Japanese equities in 2024. We do think that there is definitely a trend towards equities. There is a trend towards gold as a geopolitical hedge, but there is also another trend around income. We hear from clients that because of the trending aging issue affecting not only Japan but also other markets, people are looking for very certain and more steady revenue streams, which can be achieved with equity products and derivatives. We have seen an option-based overlay, the ETFs, having very good and healthy trades and healthy flows from Japanese investors and outside of Japan. However, we have also seen a focus on dividend-related products. We have not seen really great flows into emerging markets, emerging markets debt, or global equity. Likewise, we have not seen any healthy flows into fixed income, but we think that this is related to the geopolitical issues we are facing and may change with different market cycles. Annie, you did mention gold there, and I know you spoke to Bloomberg back in March.

Analysis

Crude prices are easing slightly, with Brent just below $95 a barrel, amid ongoing negotiations for a potential agreement involving President Trump and Iran. Investors are increasingly focusing on equities and gold as a geopolitical hedge, while showing less interest in emerging markets and fixed income products.

The trend towards equities and gold reflects a shift in investor behavior, particularly as aging demographics drive demand for steady revenue streams. This indicates a potential opportunity for equity products and dividend-related investments, while geopolitical tensions continue to influence market flows.

17:34
PDT

Tokyo Stock Exchange partners with SBI to enhance market access.

Tokyo Stock Exchange SBI Iran AI gold S&P 500 ETF ID GC=F S&P 500

– Focus on low-cost segments and digital wealth trends.

– Ongoing conflict in Iran is impacting energy prices.

– AI rally is driving interest in chip stocks.

– Gold is being used as a hedge by investors.

market accessETF flowsgeopolitical riskinvestment trends

▸ Full transcript

Democratizing access to financial markets, giving clients exposure to low-cost segments of the markets. We are planning on launching a number of products together. We are looking at client behaviors and client trends; digital wealth and retail investors' access to financial markets is becoming a trend. So we are hoping that through this partnership with SBI, we will be able to really unleash opportunities and new potential segments of the market for Japanese investors. Can I ask you about some of the trends that you're seeing around some of these big macro themes? Because of course, on the one hand, we have the conflict in Iran continuing to drag on, putting upward pressure on energy prices, and then on the other, this seemingly relentless AI rally, particularly around those chip names. How are you seeing these trends reflected in ETF flows? Always follow the money because every time we follow the money, we think this is the best way to assess client interest and client behavior when it comes to these macro trends. Last year, we introduced five local ETFs to Japanese investors, and they spanned across gold, S&P 500, and S&P 500 ID dividends. What we have found out is that investors use gold as a way to...

Analysis

The Tokyo Stock Exchange is partnering with SBI to democratize access to financial markets, focusing on low-cost segments and digital wealth trends among retail investors. This collaboration aims to unlock new opportunities for Japanese investors amidst ongoing macroeconomic pressures, particularly from the conflict in Iran and the AI rally in chip stocks.

Investors are increasingly using gold as a hedge, reflecting a shift in behavior towards safer assets amid geopolitical tensions. The introduction of local ETFs targeting gold and U.S. equities indicates a growing interest in diversifying portfolios in response to these macro trends.

17:25
PDT

Brent crude prices are just below $95 per barrel.

President Trump Iran Israel Lebanon ABC News Jeff Mason Brent gold ABC For Zabasaja Lesotho Highlands Truth Social PRIVATE CL=F GC=F

– President Trump expresses optimism about agreements in the Middle East.

– Past rhetoric from Trump has often led to market pullbacks.

– Gold prices are still significantly off their January highs.

– Geopolitical developments are influencing oil price movements.

geopolitical riskoil market dynamics

▸ Full transcript

For Zabasaja in the Lesotho Highlands, and this is Bloomberg. Let's take a look at how the oil price is tracking at the moment because we have had news while President Trump is saying negotiations are continuing. He has signaled on Truth Social that there could be some sort of agreement due in the coming week, but we've got crude prices easing off a little. Perhaps as a result of that, Brent is just below $95 a barrel. Take a quick look at the gold prices. Well, just ticking up very slightly, but we're still about 70% off the high that we posted towards the end of January. President Trump and Israel have offered differing accounts of an agreement to curb fighting in Lebanon, something that Iran insists must be part of a wider peace deal. Trump has told ABC News he believes an agreement with Tehran could be reached over the next week. Let's get to our Washington and White House correspondent, Jeff Mason. Jeff, this all sounds terribly optimistic. That one has a sense we've heard something like this before; it could have been different this time. Well, I was just going to say, it sounds optimistic. It also sounds familiar, doesn't it? Because this is the same sort of rhetoric and, I don't know, optimism that the president has been expressing in Truth Social posts for a long time and also saying when he speaks to reporters, then yet he ends up pulling back or around pulls back, and this has been going on for weeks and months.

Analysis

Crude prices are easing off slightly, with Brent just below $95 a barrel, amid President Trump's optimistic signals regarding potential agreements in the Middle East. However, this optimism feels familiar, as past statements have often led to pullbacks in expectations, indicating a cautious approach is warranted.

Smart money should note the persistent volatility in oil prices, which may be influenced by geopolitical developments rather than fundamental supply-demand dynamics. The ongoing negotiations and the rhetoric surrounding them could lead to significant market reactions, especially if agreements are reached or falter.

17:20
PDT

Tokyo Stock Exchange reports strong market performance.

Tokyo Stock Exchange JFSA NISA US

– NISA accounts have surged to nearly 30 million.

– TSE is working with JFSA to expand ETF offerings.

– Increased ETF trading volume indicates growing investor interest.

– Regulatory changes could enhance capital efficiency.

ETF market expansionJapanese retail investmentregulatory changes

▸ Full transcript

Especially the US market, we slightly expand and we also talk with the JFSA to slightly change the regulation and the rules to ease the listing of very different types of activities. What does the Apio pipeline look like for Japan? Yes, so that the U.S. and also that the NISA is a new tax exemption program started two years ago. The number of NISA accounts is dramatically increasing, almost close to 30 million accounts in total. This shows that about one fourth of Japan's people have a NISA account. Into this NISA account, the ETFs that can be invested in are slightly limited right now. But we also talk with the JFSA to expand the appropriate ETFs into this NISA account in the near future, so that we hope people can easily invest using this NISA account to invest in a variety of ETFs. You recently noted a push to improve capital efficiency.

Analysis

The Tokyo Stock Exchange is experiencing significant growth, with a notable increase in NISA accounts, now close to 30 million, indicating a growing interest in ETFs among Japanese investors. The TSE is actively engaging with the JFSA to expand the types of ETFs eligible for NISA accounts, which could enhance capital efficiency and broaden investment options for retail investors.

Smart money should note that the expansion of ETF offerings in Japan, particularly through NISA accounts, could lead to increased liquidity and market participation. The TSE's focus on regulatory changes to facilitate diverse ETF listings suggests a strategic move to attract more international investment and enhance the overall market structure.

17:17
PDT

TSE has over 400 ETFs listed.

Tokyo Stock Exchange Bank of Japan ETFs international investors BOJ ETF TSE

– ETF trading volume has nearly doubled in two years.

– BOJ's slow asset sell-off has minimal impact on the ETF market.

– TSE aims to expand offerings with active ETFs.

– Corporate governance reforms are gaining traction in Japan.

ETF market expansioncorporate governance reform

▸ Full transcript

Of course, we understand that the BOJ owns a huge number of ETFs, but the change to sell their assets related to the ETF is very slow, so it has not had much impact on the whole ETF market or cash market side. So, we at TSE are very focused on how we can improve or expand the ETF market, especially in Japan. Right now, we have more than 400 ETFs listed on the Tokyo Stock Exchange, and the trading volume of ETFs has almost doubled compared to two years ago. We understand there's more room for expanding the ETF market in Japan, exceeding the BOJ's ownership or the slow sell-off to the market. Now, in terms of expanding your offerings, you are hoping to get regulatory approval for active ETFs to trade non-listed instruments by this June. Well, it's June, and I'm wondering if you can give us a progress report on that. Yes, exactly. The variety of the ETFs is one of the key factors for us to expand the market.

Analysis

The Tokyo Stock Exchange (TSE) is focused on expanding the ETF market in Japan, with over 400 ETFs listed and trading volumes nearly doubling in the past two years. The Bank of Japan's slow asset sell-off has not significantly impacted the ETF market, indicating potential for further growth.

Smart money should note that the TSE is seeking regulatory approval for active ETFs to trade non-listed instruments, which could diversify offerings and attract more international investors. This move reflects a broader trend of corporate governance reform in Japan, which may enhance investor confidence and market participation.

17:15
PDT

Nikkei 225 index up 20%, TOPIX index up 10%.

Japan Nikkei 225 TOPIX TSC corporate governance

– Increased volume and value in Japanese markets.

– Strong corporate governance reforms are attracting international interest.

– Focus on corporate governance changes over the past three years.

– Potential for long-term foreign capital inflows.

Japanese market performancecorporate governance reform

▸ Full transcript

日本の市場はとても良いです。インデックスは近くの高い場所です。225%が増えると20%が増える。トピックは10%が増える。ボリュームが増える。バリューは10-30円に近くなります。April and Mays also. So far I really understand that Japan's market is going very well. How is international interest going then? What are you seeing in terms of interest from international investors? TSC in these years is going very much focus on the company's reform. 特にコープレートカバナーの変化を集めることができる。この3年間、コープレートカバナーの変化は非常に強い。特にインスタジオの人々の方々が非常に正面で見ることができる。このような変化が日本の企業にある。

Analysis

Japan's market is performing strongly, with the Nikkei 225 index up 20% and the TOPIX index up 10%. International interest in Japanese companies is increasing, driven by significant corporate governance reforms over the past three years.

The shift in corporate governance is attracting attention from international investors, indicating a potential long-term trend in Japan's market. This could lead to increased foreign capital inflows, enhancing market liquidity and supporting further growth in Japanese equities.

17:13
PDT

Nikkei 225 down 0.5% amid pullback.

Nikkei 225 S&P 500 Bank of Japan Tokyo Stock Exchange Jonathan Lisa Ann Marie Mike Rasko Yokoyama AI ETF CEO S&P 500 PRIVATE

– S&P 500 sees longest winning streak since May 2025.

– AI trade continues to drive market performance.

– Japanese assets show muted response despite AI boom.

– Bank of Japan's policy stance remains a key focus.

AI tradeJapanese market dynamicsBank of Japan policy

▸ Full transcript

This Friday, Jonathan, Lisa, Ann Marie, and Mike will bring you crucial data and expert analysis at terminal speed. Things really are not deteriorating in the labor market; will we see firms have a smaller footprint when it comes to employees? The May jobs report Friday on Bloomberg. We're seeing a little bit of pullback when it comes to trading here in Asia, and just the first 15 minutes or so of trade in Japan, we are seeing the Nikkei 225 down by about half a percent. This is broadly the region that's easing from record highs, with that second straight record high being set on account of the AI trade that we saw yesterday for Asia more broadly, but Japanese assets are a little bit muted at this point where the S&P 500 notches its eighth straight advance overnight. That's the longest winning streak since May 2025, with this AI boom continuing to trade quite well. The dollar again at just shy of that 160 level is not really doing a whole lot, but we are watchful for what the Bank of Japan wants to see, though that weakness is really a market-implied verdict on the policy stance there, back near that 160 level, and intervention efforts, of course, have failed to take any sort of sustainable effect with the currency. Let's head back now to the S&P Dow Jones Indices Japan ETF conference, where we're now joined exclusively with Rasko Yokoyama, who's the CEO at the Tokyo Stock Exchange.

Analysis

The Nikkei 225 is down about half a percent as trading in Asia pulls back from record highs driven by the AI trade. Meanwhile, the S&P 500 has achieved its longest winning streak since May 2025, reflecting ongoing strength in the AI sector.

Smart money should note the muted response of Japanese assets despite the broader AI boom, indicating potential underlying weakness or caution among investors regarding future policy actions from the Bank of Japan. Additionally, the failure of intervention efforts to stabilize the currency suggests ongoing volatility in the forex market, which could impact global trade dynamics.

17:10
PDT

Nvidia down 0.3%, Samsung up nearly 2%.

Nvidia Samsung Electronics SK Hynix Goldman Sachs Kospi SK NVDA PRIVATE GC=F

– Samsung gained 10% on Monday after Goldman Sachs re-rating.

– SK Hynix shows downside despite Kospi rally.

– Divergence in semiconductor stock performance noted.

– Investor sentiment may be shifting within the sector.

semiconductor performanceanalyst ratingsmarket volatility

▸ Full transcript

We saw in the previous session that gains when it comes to that Nvidia play there as well. Still pairing some of the gains that were saw in the previous session, down about three-tenths of one percent. Samsung Electronics, though, still adding about close to two percent but already off those session highs, I should say they did gain about ten percent in the Monday session as they got re-rated to the upside by Goldman Sachs there. A little bit of a downside for the likes of SK Hynix; these are stocks that have climbed significantly in the Kospi rally, though. More ahead on the Asia trade, this is Bloomberg. Defense is more complex than ever. We have more advanced threats, fewer resources, and we have a vast amount of space to potentially monitor. As technology is adopted across nearly every facet of our lives, we need more advanced, more technologically savvy solutions.

Analysis

Nvidia's stock is experiencing a slight pullback, down about three-tenths of a percent, while Samsung Electronics is up nearly two percent after a significant ten percent gain on Monday following a positive re-rating by Goldman Sachs. Meanwhile, SK Hynix is facing some downside despite the overall rally in the Kospi index, indicating a divergence in performance among semiconductor stocks.

Smart money should note the mixed performance among semiconductor stocks, particularly the contrast between Nvidia's slight decline and Samsung's gains, suggesting a potential shift in investor sentiment. Additionally, the re-rating of Samsung by Goldman Sachs could signal a broader confidence in the semiconductor sector, but the struggles of SK Hynix may indicate underlying challenges that could affect future performance across the industry.

17:08
PDT

Geopolitical tensions in the Middle East may increase market volatility.

Middle East Federal Reserve AI US GC=F FEDFUNDS

– Investors should diversify portfolios with gold, treasuries, and alternatives.

– Current treasury levels indicate a potential 'danger zone' for volatility.

– No Fed rate hike is currently anticipated before year-end.

– Supply chain disruptions could affect earnings and market stability.

geopolitical riskmarket volatilityportfolio diversification

▸ Full transcript

Deals as well and more of those stocks coming to the market at free float increasing. But I think there is that liquidity in the equity market, there is the liquidity in the bond market as well. But one thing that I would say is that, of course, we can't just talk about the tailwind of AI, we also still have the cyclical headwind from the uncertainty around the Middle East. What I think that will do is lead to market volatility, not an equity market correction, but we have to be fully prepared for the old inflation or growth number or illustrations from companies that their supply chains are being interrupted to lead to some market volatility. We are at a level where we call the danger zone, where that treasury level when you get more volatility that then feeds through into equity market volatility. So people need to prepare for that, but they need to continue to be exposed to the market upside and how do you balance those two things, by building resilient portfolios with gold, with treasuries, with hedge funds, with alternative assets and by trying to have some sector diversification as well. You mentioned a few volatility factors there. I want to inject one more potential risk to this bull run. Where do you place the chances of a Fed rate hike before the end of the year? We don't have a federated high penciled in and to some extent that is because in the US.

Analysis

Market volatility is anticipated due to geopolitical uncertainties in the Middle East, which could impact supply chains and lead to fluctuations in equity markets. Investors are advised to build resilient portfolios that include gold, treasuries, and alternative assets to balance exposure to market upside while preparing for potential volatility.

The current environment is characterized by a 'danger zone' for treasury levels, suggesting that increased volatility could spill over into equity markets. Smart money should note the lack of a penciled-in Fed rate hike, indicating a cautious approach to monetary policy amidst these uncertainties.

17:05
PDT

Upcoming AI IPOs may attract significant investor interest.

Unpropic OpenAI Alphabet Google SpaceX Magnificent Seven AI IPO And Space GOOGL

– Historical IPOs have minimal impact on overall market indices.

– New tech entrants have different risk profiles than established giants.

– AI integration is expected to drive earnings growth across sectors.

– Diversification within the tech ecosystem is crucial.

AI investmentIPO market dynamicstech sector diversification

▸ Full transcript

They can also benefit from that AI to bigger software, more powerful. There's obviously a huge wave of AI and big tech, IPOs and deals that are almost upon us. We've had Unpropic having that first mover IPO edge by filing first, OpenAI to come. We had the big fundraising from Alphabet and Google overnight as well. And SpaceX, how much interest do you think there's going to be to be when it comes to your clients for being able to get access to these deals? Yeah, there will certainly be interest but I think there is a lot of speculation in the market about whether this would hurt the index overall because of sort of a supply, you know, effective vacuum cleaner, effective, some call it, you know, historically the impact on the market tends to be very, very small if you look back at very important IPOs. So it's important to look at the free float, right? Which is a small section. I think a lot of those companies have a different risk profile than the Magnificent Seven. So it's not necessarily a one for one and comparable. So people won't necessarily take money out of those Magnificent Seven or other stocks to go into that. So I think the AI will need to be driven higher by those earnings. So as long as you believe as we do that more and more companies are installing that more and more consumers are using it that.

Analysis

The market is anticipating significant interest in upcoming AI-related IPOs, particularly from companies like Unpropic and OpenAI, which could influence investor behavior. However, historical data suggests that the impact of major IPOs on overall market indices tends to be minimal, indicating a potential disconnect between speculation and actual market movement.

Investors should note that the risk profiles of these new entrants differ from established tech giants, suggesting that capital may not shift directly from the 'Magnificent Seven' to these new IPOs. The ongoing integration of AI across various sectors is likely to drive earnings growth, reinforcing the importance of diversification within the tech ecosystem.

17:03
PDT

Invest in the entire AI ecosystem, including chips and energy stocks.

NVIDIA Jensen Huang ASML Russia Ukraine AI

– Diversification across sectors is crucial for managing risk.

– Energy security is increasingly important due to geopolitical tensions.

– Software companies are expected to thrive in the AI landscape.

– Hiring trends indicate a positive outlook for the tech sector.

AI investmentenergy securitysector diversification

▸ Full transcript

Off on that tech thing. I mean your most recent report talks about the importance of investing in an AI-led future, but if we drill into that, what does that mean specifically? Are you buying chip makers, are you buying ASML, energy stocks, all of the above, or is there something else in there that investors should be looking at? All of the above. You know we need to invest in that, you know, the ecosystem which is of course, AI, chip makers, but also the enablers as well as the adopters. But I think it's very important to try to at least have a little bit of sector diversification and style diversification by also going to the rest of the ecosystem which feeds that, i.e., the energy security theme. The reason why we call it energy security is of course because of the conflict and even the Russian-Ukraine war as well. We saw that countries want to invest in that energy independence and of course the demand for energy is further enhanced by AI. So that's important because so much of the economy and of earnings is driven by AI that you don't just want to be in one single sector. Just getting back to that all of the above theme, we heard from Jensen Huang yesterday he was talking about software companies and how they won't go out of business because of AI. He said it's actually an incredible time to be a software company. Do you buy into that narrative? Well, we see that for example in the hiring as well, so amongst economists there's a lot of discussion.

Analysis

Investors are encouraged to diversify their portfolios by investing in the entire AI ecosystem, including chip makers, energy stocks, and software companies. The ongoing demand for energy, driven by AI advancements and geopolitical conflicts, underscores the importance of energy security in investment strategies.

Smart money should recognize that the AI sector's growth is not limited to hardware but extends to software and energy independence, which are crucial for sustained economic performance. The narrative from industry leaders like Jensen Huang highlights a robust outlook for software companies, suggesting that they will thrive alongside AI developments.

16:59
PDT

Geopolitical tensions in the Middle East are a key focus for investors.

President Trump Lebanon Anthropic Google PM AI Katie Breithel Romaine Bostic The Close Haslinda Anand Marie Hordern Asia Trade PRIVATE GOOGL

– President Trump hints at a potential deal in the region soon.

– AI advancements by Anthropic and Google are gaining attention.

– The Lebanon situation remains a sticking point in the Middle East.

– Market themes are diverging, with tech and geopolitics operating in separate spheres.

geopolitical riskAI investment

▸ Full transcript

4 PM. A holistic approach to covering financial markets. If it matters to your life, we're covering it. I'm Katie Breithel. And I'm Romaine Bostic. And this is The Close. Every weekday from 3 to 5 Eastern. Only on Bloomberg. Context changes everything. Key investors, top executives, global innovators. Join me for in-depth conversations with the biggest newsmakers on the day's top stories. Insight with Haslinda Anand only on Bloomberg. You up to the minute geopolitical news wherever and whenever it happens. I'm Anne-Marie Hordern in Guayaquilacodor and this is Bloomberg. This is the Asia Trade. We're counting down to the region's major market opens and of course really the focus is twofold. We're still looking at that stalemate when it comes to the Middle East right with President Trump saying that we could expect a deal in the next week or so at the same time the Lebanon situation looks like it's going to be sort of a sticking point and on the other hand of course it is all about AI with Anthropics move ahead of as well as Google's efforts at another round of fundraising as well. Yeah, two very distinct themes here and both of them completely ignoring each other as if they exist in different universes.

Analysis

The focus remains on geopolitical tensions in the Middle East, with President Trump suggesting a potential deal could emerge soon, while the situation in Lebanon poses ongoing challenges. Concurrently, advancements in AI are highlighted, particularly with Anthropic and Google's fundraising efforts, indicating a strong push in the tech sector despite external conflicts.

Investors should note the divergence in market themes, as geopolitical risks may overshadow tech advancements, yet the AI sector continues to attract significant capital. This could lead to a bifurcation in market performance, where tech stocks may thrive while broader market sentiment remains cautious due to geopolitical uncertainties.

16:54
PDT

LG Electronics is up 10% in pre-market trading after a limit-up rally.

LG Electronics NVIDIA Bank of Korea Cosby South Korea AI LG Asia Equities Yuk Jung Lee Yuk Jung The Cosby PRIVATE CL=F

– Investors are anticipating a potential interest rate hike from the Bank of Korea next month.

– Inflationary pressures are being driven by chip exports and consumer spending.

– The collaboration between South Korean firms and NVIDIA is boosting market sentiment.

– The Cosby index is showing positive momentum ahead of the market open.

chipflationAI demandinterest rates

▸ Full transcript

They account for more than 50% of the cost-based market weight at the moment. If you include some other proxies, that's even higher. So that's been one corner of concern. Speaking of inflation, which some people call chipflation because of the huge chip exports and the spending by consumers who made a lot of money from the stock market, that could be increasing, giving more pressure to inflation. It's all coming from this chip and AI-driven demand. So investors are paying closer attention to whether the Bank of Korea will hike interest rates for the first time in a while next month. There has definitely been a signal. I think stock investors will definitely pay more attention to the Bank of Korea rate decision next month. All right, Bloomberg. Asia Equities reporter Yuk Jung Lee there. Let's take a quick look at how markets are tracking ahead of the open at the top of the hour. Once again, it looks like the Cosby is setting up for a pretty positive day. Yuk Jung mentioned LG Electronics there. I mean, it's already up about 10% in the pre-market after jumping limit up, as she mentioned yesterday. So that tech-related rally in South Korea just keeps on rolling. The Cosby futures at the moment are better by half of 1%. Nikkei futures, meanwhile, are looking pretty flat at the moment. If we look ahead to Sydney futures as well, it looks like we're setting up for some modest declines of half of 1%. We did see the oil price.

Analysis

The South Korean stock market is experiencing a rally, particularly in tech stocks like LG Electronics, driven by expectations of collaboration with NVIDIA in AI infrastructure. Investors are also closely monitoring the Bank of Korea's potential interest rate hike next month, influenced by inflationary pressures from chip exports and consumer spending.

Smart money should note that the 'chipflation' phenomenon is creating a unique market dynamic, as demand for chips and AI technology continues to surge. This could lead to increased volatility in tech stocks and a shift in investor sentiment depending on the Bank of Korea's monetary policy decisions.

16:52
PDT

Investors are looking for new AI winners post-chip stocks.

NVIDIA Chen Zenghuang Taipei South Korea LG NAVER SK Hynix LG Electronics Naver AI SK South Korean NVDA

– NVIDIA's upcoming meetings in South Korea are boosting local stocks.

– LG Electronics and Naver have seen significant price rallies.

– Expectations of collaboration with NVIDIA are driving market enthusiasm.

– The AI sector's dynamics are shifting towards South Korean companies.

AI investmentSouth Korean techmarket dynamics

▸ Full transcript

Sure, so investors have been looking for the next winners after the chip stocks because some of the gains in the Kospi have been looking a little bit stretched, and that's when the physical AI came in. I think there are two things at play: investors are hunting for the next winners in this AI race, and then there were reports in local media that NVIDIA's Chen Zenghuang, after his visit to Taipei for computer tests, will come to South Korea later this week and meet with the executives in the country, including LG, NAVER, and SK Hynix. That news has set up expectations that South Korean companies will increasingly play a more important role in NVIDIA's global AI infrastructure expansion. This news has been setting off a huge rally in companies such as LG Electronics, which posted two days straight of gains by the daily limit of 30%, and in other companies such as Naver, whose executive is also expected to meet just in one. So there is this NVIDIA effect, expectation for collaboration between the physical AI companies in South Korea and NVIDIA that has been triggering this rally in the physical AI stocks in this market.

Analysis

Investors are actively seeking the next winners in the AI sector, particularly following NVIDIA's anticipated meetings with South Korean executives, which has sparked a significant rally in local stocks like LG Electronics and Naver. This NVIDIA effect highlights the growing importance of South Korean companies in the global AI infrastructure expansion, suggesting a shift in market dynamics towards these players.

The excitement around NVIDIA's collaboration with South Korean firms indicates a potential pivot in AI investment strategies, as investors may need to reassess their portfolios to include these emerging leaders. The rapid gains in stocks tied to AI infrastructure underscore the urgency for investors to stay ahead of technological trends and regional developments.

16:47
PDT

Japan's ETF assets hit a record 792 billion, primarily from institutional investors.

Catherine Clay S&P Dow Jones Indices Japan NISA ETF S&P 500

– NISA programs are enhancing retail investor access to markets.

– There is a growing demand for transparency and rules-based benchmarks.

– Governance reforms in Japan are positively impacting investor sentiment.

– Index providers may need to reconsider methodologies to include mega cap companies.

ETF growthretail investor accessindex methodology

▸ Full transcript

The committees right now are deciding whether or not this is something that we're going to be amending the S&P 500 methodology to do. Cathy, on the ground in Japan, what sort of energy are you getting in terms of how that market is coming along? Obviously, we've had a huge uptick and almost a transformative effect with some of these governance, I should say, progress being made in this market. What is interesting to you in terms of what Japanese institutional and retail investors are looking at at the moment? Yeah, so if you look at the assets tied to the ETF industry here in Japan, we're at a record 792 billion in assets tied, and that's mostly institutional money. What's really encouraging and exciting is that the NISA programs will democratize access to investing for millions of Japanese households and have really come center stage. They are of great interest, especially as an index provider, to bring rules-based benchmarks, transparency, and comparability into the NISA accounts for the investors in Japan. That's really super exciting, and I've heard a lot of excitement from those on the ground here in Japan about all of the reforms, but particularly the NISA accounts are making a major difference. Do you find that investors are demanding different things of index providers at different times because, on the one hand, there's obviously...

Analysis

Japan's ETF industry has reached a record 792 billion in assets, driven largely by institutional investments and the NISA program aimed at democratizing access to investing for households. This shift indicates a growing interest in rules-based benchmarks and transparency among Japanese investors, particularly in light of recent governance reforms.

The enthusiasm surrounding the NISA accounts suggests a significant transformation in retail investment behavior in Japan, which could lead to increased demand for innovative index products. As institutional money flows into the market, index providers may need to adapt their methodologies to accommodate the evolving landscape and investor preferences.

16:44
PDT

Indices are evolving to remain relevant amid large IPOs.

S&P Dow Jones Indices Catherine Clay Dow Jones S&P 500 Dow Jones Industrial Average

– Debate exists on inclusion criteria for mega cap companies.

– Consultation on S&P 500 inclusion reflects market demand.

– Potential for increased volatility with new listings.

– Institutional and retail investors are seeking access to mega caps.

index evolutionmega cap IPOsmarket relevanceinvestor access

▸ Full transcript

For 130 years, we have celebrated the Dow Jones Industrial Average anniversary of 130 years last week. Over that 130 years, there have been changes to the Dow, starting with 10 stocks in 1892, moving up to 20 stocks, and now at 30 stocks. So over time, there are changes to indices that more reflect the times that we're in and the market relevance. It is obviously important that indices remain fit for purpose, but there have been some concerns expressed about how the changes are being made to accommodate these large IPOs, including changes to seasoning rules, changes around the free float requirement, weightings, etc. Can you share with us any thoughts that you have on those things? I think the debate has been quite healthy on both sides of the equation, quite frankly. On the one hand, as you mentioned, we want to make sure that the indices remain relevant for the longer term and not just for a specific moment in time. And so there is the debate about changing the rules for inclusion. On the other hand, there is the demand from the audiences, the retail audience and institutional audiences that want access to these very large mega cap companies. The consultation that we have run and subsequently closed really is a very narrow redetermination of if we should include these mega caps in the S&P 500. Other index providers have done similar things and made similar decisions, but I'm not sure if I'm going to be able to do that.

Analysis

The discussion highlighted the ongoing evolution of indices, particularly the S&P 500, in response to the influx of mega cap IPOs and the need for relevant inclusion criteria. There is a healthy debate on balancing the demand for access to these large companies with the long-term relevance of indices, indicating potential shifts in market structure.

Smart money should note the implications of changing inclusion rules, as they may lead to increased volatility and trading volume around mega cap listings. The consultation process reflects a broader trend of adapting market frameworks to accommodate significant shifts in capital flows and investor interest.

16:42
PDT

Strong enthusiasm for transformation in Japanese capital markets.

Catherine Clay S&P Dow Jones Indices Tokyo Japan U.S.CEO AI Dow Jones Indices United States

– Focus on private markets and decentralized finance is increasing.

– Upcoming mega cap IPOs in the U.S. are a hot topic.

– Potential reevaluation of listing rules to meet demand.

– Decentralized finance could disrupt traditional asset management.

Japanese capital marketsdecentralized financemega cap IPOs

▸ Full transcript

Role indexes and ETFs play across asset classes and investor strategies. Joining us now exclusively from the conference is Catherine Clay, who's the CEO at S&P Dow Jones Indices. Cathy, really great to have you with us. We appreciate your time. Tell us what's top of mind for you and clients and partners at the moment. What are you being asked more about? Is it the AI trade? Is it sort of the wave of mega tech IPOs that we're looking ahead to? Or is it more the sort of geopolitical implications of the war? I think the first thing that has really struck me being on the ground here in Tokyo is that there is a lot of enthusiasm for the transformation that is underway in the Japanese capital markets. That's really number one. Many of the topics that we're covering both here at the conference and in my client visits are the things that you might imagine, the questions around private markets, the questions around decentralized finance and the impact on asset management and trading and investing, as well as, as you mentioned, these mega cap IPOs that are coming to market in the United States. All of these are up for discussion and really topical for this conference which is in its 18th year here in Tokyo. Well, I know that there's sort of a concentration period about speeding up the entry of mega cap companies. Are these kind of rules, if not being rewritten, at least being reconsidered to deal with, you know, what is sort of presumably going to be unprecedented demand for a lot of these listings and deals.

Analysis

Catherine Clay, CEO at S&P Dow Jones Indices, highlighted the enthusiasm for transformation in Japanese capital markets during her conference in Tokyo. Key topics include private markets, decentralized finance, and the upcoming mega cap IPOs in the U.S., indicating a shift in investor focus and strategy.

The discussions suggest a potential reevaluation of listing rules to accommodate unprecedented demand for mega cap companies, which could reshape market dynamics. Investors should note the growing interest in decentralized finance as it may impact traditional asset management and trading practices significantly.

16:38
PDT

ABB Robotics is enhancing robot intelligence and versatility.

ABB Robotics Jensen Wong Qualcomm NVIDIA China Covid UME

– The company has re-tooled supply chains for resilience.

– Humanoid robots have not yet seen significant industrial application.

– Demand for robotics is increasing in data centers.

– ABB is active in the co-bot space.

supply chain resiliencerobotics automationAI integration

▸ Full transcript

Exponential growth in the robotic space. So we haven't quite seen the same pressures on supply chain that you might have seen coming from, say, the compute side in electronics. Yes. Yet. Now definitely it's something to keep a close eye on. The good part is as we went through the Covid time, we retooled many of our supply chains to become more resilient to possible supply chain shortages. So this resilience is certainly, we believe, going to stand us in good stead should they become a tighter supply market. Could that be exacerbated by the exponential interest in humanoid robots? I know you do industrial robots primarily. You do have a division, I think, called UME, which is looking at sort of co-bots. Absolutely. Yeah, so we are active in the co-bot space. But also we are very active in trying to make our robots more intelligent and essentially utilize many of the characteristics that you see out of a humanoid. We just haven't seen the volume application of the humanoid form factor in the industrial space. We've seen a slightly different form factor. We see... It's not as necessary unless you need dexterous hands for sorting and things like that in warehouses, right? Yeah, it's not. But you can still achieve that dexterity by putting your robot platform on wheels, and you can come up with much higher payloads. Now some of these technologies from humanoids are great, but from a supply chain perspective, we're not seeing those volumes and those volume use.

Analysis

ABB Robotics is adapting its industrial robots to be more intelligent and versatile, leveraging advancements in AI and simulation technology to enhance operational efficiency. The company is also monitoring supply chain resilience amid growing interest in humanoid robots, although the industrial sector has not yet seen significant volume applications for humanoid forms.

Smart money should note that ABB's focus on enhancing robot capabilities with AI could position them favorably in the evolving automation landscape, especially as demand for robotics in data centers surges. Additionally, the company's proactive supply chain adjustments may mitigate potential disruptions, providing a competitive edge in a tightening market.

16:35
PDT

Semiconductor industry growth projected to reach $1 trillion soon.

ABB NVIDIA Jensen Huang Taiwan China Bloomberg Computex Vera Rubin IFR AI USDCNH

– Increased automation in data centers is driving demand for robotics.

– ABB Robotics has a strong foothold in the Chinese market.

– Collaboration with NVIDIA enhances robotics capabilities.

– Synthetic data generation is improving accuracy in robotic applications.

automation technologyrobotics marketAI revolutionsemiconductor growth

▸ Full transcript

How are new installations for you guys looking this year? I mean, the electronics space specifically is going through a super cycle. I think there's been a lot of activity on the consumer electronics side, but also more recently the AI compute side has reached volume levels that have justified robotization. Many of these systems up until now were only partially automated because of the lower volumes compared to consumer electronics. But I think you've all seen the headlines on data centers and how that market is growing exponentially. And with that comes the robotization of that space. What's your strategy for China? Because they have their own infrastructure and their own indigenous innovation in robotics. Yes, I've seen a lot of automobile factories with ABB robots. No doubt they're going dark factories and the like. But again, I think the cost basis because of their distinct supply chain is about 40% of what, I mean you're at the high end really, ABB. But what is your strategy for China as they go up the value chain on their industrialization? Oh absolutely, I think China is 50% of the world's robot market if you look at the IFR data. So they are obviously the dominant player in robotic automation from a market perspective. And we've been there for the last 20 years. And we've built one of our main production facilities in China. And we've got a long history of helping Chinese system integrators in the ecosystem.

Analysis

The semiconductor industry is experiencing unprecedented growth, with projections suggesting it could reach one trillion dollars in value soon, driven by the AI revolution and increased demand for automation in data centers. ABB Robotics is strategically positioned in China, which dominates the global robotics market, leveraging its long-standing presence and production facilities to capitalize on the country's industrialization efforts.

Investors should note the significant shift towards automation in the electronics and AI compute sectors, as traditional systems are now being fully robotized due to rising volumes. The collaboration between ABB and NVIDIA to enhance robotics through synthetic data generation indicates a transformative approach that could redefine operational efficiencies and time-to-market in industrial applications.

16:33
PDT

ABB Robotics achieves 99% accuracy in virtual robot motion simulation.

ABB Robotics NVIDIA Jensen Huang SIM Vera Rubin NVDA

– Collaboration with NVIDIA enhances synthetic data generation for industrial applications.

– Significant reduction in simulation-to-reality gap improves product development timelines.

– Potential for cost savings and efficiency gains in robotics applications.

– Shift towards reliable synthetic data could transform prototyping processes.

AI in roboticssynthetic data generationindustrial automation

▸ Full transcript

They have the new infrastructure with Vera Rubin in full production right now. But you also use NVIDIA in a way to sort of virtually game out a scenario for a client, virtually so they don't have to necessarily have a physical prototype. Tell us about that. Yeah, so if you look up until now, synthetic data generation hasn't been accurate enough for robotics. Many of these applications are 50 to 60% accurate. And when it comes to systems that need to operate safely at speed and at scale in an industrial, hardened environment, it hasn't been achievable. Over the last year and a bit, and we announced in March our collaboration with NVIDIA, we've really merged their capabilities in accelerated compute and their abilities with wide world simulation, with our industrial knowledge, our digital twin capability, and of course our robotics to address the SIM to real gap. In a number of applications, most notably in the electronic space, we managed to shrink that SIM to real gap to a very, very close correlation. So we can, with a 99% accuracy now, recreate robot motion in the virtual space when compared to the real space. So what kind of cost savings are we talking about? And also, more importantly, perhaps is time to market. Absolutely. You can now reimagine how you bring product to market.

Analysis

ABB Robotics has successfully merged NVIDIA's accelerated computing capabilities with its own industrial knowledge, achieving a 99% accuracy in recreating robot motion in virtual environments. This advancement significantly reduces the simulation-to-reality gap, enabling faster product development and cost savings for clients.

The collaboration highlights a critical shift in robotics, where synthetic data generation is now reliable enough for industrial applications, potentially transforming how companies approach prototyping and product launches. Smart money should note that this could lead to increased efficiency and reduced time-to-market across various sectors reliant on robotics.

16:31
PDT

ABB Robotics has been evolving its robots for over 50 years, now focusing on autonomy and versatility.

ABB Robotics Craig McDonald Jensen Huang Qualcomm AI ABB CEO Steven Engel Craig Mc Jensen Wong

– Agentic AI is seen as a key driver for the next phase of AI adoption and profitability.

– The integration of AI into industrial robotics could significantly enhance operational efficiency.

– Investors should monitor the impact of AI on traditional industries and robotics.

– The shift towards intelligent robotics may redefine competitive landscapes in automation.

AI integrationindustrial roboticsautomation technology

▸ Full transcript

AI, chips and robotics. Let's get back to Steven Engel in Taipei where he's standing by with our next guest, Steve. Yeah, and one of the big themes here at Computex this year is physical AI, and of course, robotics is a key part of that, not just the humanoid ones but industrial robotics. No better person to talk about that than Craig McDonald, ABB Robotics, business line managing director, robot industries. It's a long title. You have an important role, obviously. So how is AI being infused? I mean, Jensen Wong and everyone else here from Qualcomm CEO, all talking about agentic AI as the next new springboard for the adoption and investment and profitability of AI. How is agentic AI being infused into a traditional industrial tool like you have that's been around since the 1970s? How is it being improved? So ABB started in robotics in 1974. I think we were the first to introduce microprocessor controls into the robotic space. And over the next 50 years, we've come up with a very wide range of industrial, collaborative, and mobile robots. And we spent probably the last 20 years evolving that system now into robots that can operate more autonomously and in a more versatile manner. So think of robots with intelligent eyes. I think of robots with hands.

Analysis

ABB Robotics is integrating agentic AI into traditional industrial robotics, enhancing their capabilities for more autonomous and versatile operations. This evolution reflects a significant shift in the robotics industry, moving from basic automation to intelligent systems that can adapt and learn in real-time.

The infusion of AI into industrial tools like those from ABB signifies a broader trend where established technologies are being redefined through advanced AI capabilities. Smart money should recognize that this transformation could lead to increased productivity and profitability in sectors reliant on automation, potentially reshaping competitive dynamics in the market.

16:26
PDT

Semiconductor industry growth projected to reach one trillion dollars soon.

Taiwan Vince Bloomberg Steven Angle Computex AI PRIVATE DXY

– Concerns of a bubble in data centers exist, but fundamentals remain strong.

– AI revolution likened to the early internet era, suggesting long-term growth.

– Tier one hyperscalers are driving demand in the semiconductor space.

– Sustainable value creation expected despite potential short-term volatility.

AI revolutionsemiconductor growthinvestment riskdata center demand

▸ Full transcript

The semiconductor industry has now taken us from single-digit compound annual growth to multiple-digit compound annual growth. We are going to see potentially one trillion dollars in value, probably this year or next year. Without knowing the exact data, Taiwan is experiencing its heyday, an unprecedented growth here in technology, and it is probably the center of the high-tech world now because of the AI revolution. There is also a lot of talk about a possible bubble forming due to over-investment in data centers and the like, as this area is entering uncharted territory. I think there are many similarities between this growth and the introduction of the internet. There is certainly a lot of investment going on, and there will probably be some busts, but I believe we are at the beginning of the AI revolution. I definitely think there will be some sustainable value created here, and most of the customers we are working to get today are tier one hyperscalers. I feel very good about the fundamentals of the business we are pursuing, and I think we are pretty set at least through the 2030 horizon. This was Vince speaking exclusively to Bloomberg's Steven Angle at Computex in Taipei.

Analysis

The semiconductor industry is poised for unprecedented growth, potentially reaching one trillion dollars in value within the next year, driven by the AI revolution. Despite concerns of a bubble due to over-investment in data centers, the fundamentals remain strong, particularly among tier one hyperscalers, suggesting sustainable value creation ahead.

Smart money should note that while there may be short-term volatility, the current phase of AI development mirrors the early internet era, indicating a long-term growth trajectory. The focus on tier one customers highlights a robust demand foundation, which could mitigate risks associated with potential market corrections.

16:24
PDT

Data center business expected to reach $2 billion this year.

NVIDIA Jensen Huang TAM AI Data Center DXY

– Potential to capture 10-15% of a $70-80 billion TAM.

– AI is viewed as a job creator, not a destroyer.

– Growth in sectors like Automotive, IoT, and Wearables.

– Increased demand for roles in AI-enhanced businesses.

AI job creationdata center growthtechnology investment

▸ Full transcript

We're going from basically almost zero a year ago to two billion dollars this year and then much larger as we ramp our first big design into full year production next year. Twelve billion, I hear. Is that the number that's fancied about? Well, I won't make a speculation on how big it will be next year, but let's just say it will be a very large part of the 70 to 80 billion dollar TAM that we see. We think we can grab 10 to 15 percent of that. And we need to work very hard to execute, but it's going to be very large for us. We've been covering a lot of dialogue about jobs and AI, and a number of banking executives are talking about the ramifications of the development of AI. But we heard Jensen Huang today talk about, well, actually, he said that AI is going to kill off jobs as nonsense. And the proof is in his pudding, obviously. But again, what kind of jobs and hiring do you think you're going to need for your data center business? So, as Jensen mentioned, AI is not going to kill jobs. It's actually going to create jobs. And I think one of the things we're seeing is our business is taking off on a number of fronts and a number of new businesses like Automotive, IoT, Data Center, and Wearables. Our existing businesses are also increasing in future momentum because of the introduction of more AI capabilities to change the user.

Analysis

The data center business is projected to grow significantly, with expectations of reaching $2 billion this year and potentially capturing 10-15% of a $70-80 billion total addressable market (TAM). Jensen Huang asserts that AI will create jobs rather than eliminate them, indicating a robust demand for new roles in various sectors including Automotive, IoT, and Wearables.

Smart money should note that the narrative around AI's impact on employment is shifting, with executives emphasizing job creation amidst technological advancements. This suggests a potential for increased investment in AI-driven sectors, as companies adapt to leverage new capabilities and expand their workforce accordingly.

16:19
PDT

Israel's military campaign in Lebanon is set to persist despite claims of a ceasefire.

Israel Hezbollah Iran Trump Prime Minister Netanyahu

– Iran may be strategically delaying negotiations with the U.S. until after the midterms.

– Trump's confidence in negotiations contrasts with Iran's public stance, indicating potential volatility.

– The geopolitical landscape remains uncertain, affecting regional stability and investor sentiment.

– Market reactions may be influenced by developments in U.S.-Iran relations and Middle Eastern conflicts.

geopolitical riskU.S.-Iran relations

▸ Full transcript

Israel and Hezbollah have agreed to stop the fighting, but Prime Minister Netanyahu indicated that their campaign within Lebanon would continue to some extent. Meanwhile, Iran has said that they've paused talks with the U.S., while Trump has stated that he hasn't heard that from Iran and that talks are going well, suggesting a potential deal within the next week. Analysts suggest that Iran may be motivated to wait out the U.S. until after the midterms, which could change the dynamics of negotiations.

Analysis

Israel and Hezbollah have reportedly agreed to stop fighting, but Prime Minister Netanyahu indicated that Israel's campaign in Lebanon would continue. Meanwhile, conflicting reports emerge regarding Iran's negotiations with the U.S., with Trump suggesting talks are progressing despite Iran's claims of a pause.

16:16
PDT

MediaTek's stock rose significantly due to AI chipset announcements.

MediaTek Anthropic OpenAI Jensen Huang Qualcomm SoftBank ABB Robotics Dell Lenovo SAP Stephen Engle Michael Hutter PRIVATE DXY

– Anthropic is filing for an IPO, aiming to outpace OpenAI.

– The software sector is experiencing a resurgence alongside AI chip rallies.

– Taiwanese tech players face limitations in stock price increases.

– Jensen Huang's influence is boosting sentiment in the software market.

AI advancementsIPO competitionsoftware sector recoveryTaiwanese market dynamics

▸ Full transcript

you win it. Bloomberg Treadie MS. Expect more from your execution management system. I've had to sum the future of money to others. We see cryptos trillion dollar swings. While others follow the noise, we follow the money. Understanding what's actually happening, markets are the best way to glean signal from noise and that is what we try to do every morning. This is Bloomberg Surveillance. Well, the president, as well as Israel, have offered differing accounts of an agreement to co-fighting in Lebanon. In the meantime, something Iran insists must be part of a wider peace deal. Trump has told ABC News that he believes an agreement with Tehran could be reached over the next week. Let's get to Washington.

Analysis

The AI sector is experiencing significant momentum, with companies like MediaTek and Anthropic making headlines. MediaTek's stock surged following announcements of its new AI chipsets, while Anthropic's confidential IPO filing positions it ahead of OpenAI in the competitive landscape.

Investors should note the strong rotation within hardware and software tech, driven by AI advancements. The positive sentiment in the software sector, as indicated by rising stock prices, suggests a potential shift in market focus that could favor companies executing well in this space.

16:12
PDT

Semiconductor and software sectors are gaining traction.

Dell Lenovo NVIDIA Jensen Huang SAP Indian software sector Taiwan AI US

– Dell and Lenovo have seen significant moves due to AI advancements.

– The 'Jensen effect' is positively impacting software stocks globally.

– SAP and Indian software stocks reported notable gains.

– Market dynamics may be shifting towards software firms.

AI transformationsemiconductor rallysoftware sector resurgence

▸ Full transcript

The space has been absolutely on fire. We saw a big move in Dell and Lenovo earlier, and this space has caught up with the US semiconductor space in just one shot. Ironically, in Taiwan, the players in computer tech that are so bullish cannot catch up with these values just because Taiwan is a limit-up market. So you can only increase by 10% every day. This is the kind of problem investors are dealing with in Taiwan; they can't chase fast enough. So it's quite a strong setup for the Taiwanese server players and Lenovo and other kinds of names in Asia. But you can see the rotation within hardware tech now is coming really fast and furious. It's also software; we're seeing the Jensen effect, right? Are we expected to see that play out across Asia too? So this has flown under the radar a little bit, right? But the US expanded software index is now back to flat on the year after a very sharp drawdown in January that happened alongside the AI chip rally. That's been quite impressive. Jensen Huang again managed to move this space yesterday, saying that the software space is actually a pretty good time to be a software company. There's a lot of data automation, and there's a lot of AI transformation happening, and that got software going across the world. SAP was up 8% in Europe, and the Indian software sector was up 3% yesterday. So this is a new leg in the rotation. How long it lasts and who the winners and losers are is probably up for debate a lot more than the hardware space because you do have to execute.

Analysis

The semiconductor and software sectors are experiencing significant momentum, with notable gains in companies like Dell and Lenovo, driven by AI advancements. The 'Jensen effect' from NVIDIA's Jensen Huang is catalyzing a broader software rally, indicating a potential shift in market dynamics favoring software firms amidst AI transformation.

Investors should note that while hardware is currently leading, the software sector's resurgence could indicate a longer-term rotation in tech investments. The recent performance of SAP and Indian software stocks suggests that the AI-driven transformation is not just a hardware story, but a comprehensive tech evolution that could redefine competitive landscapes.

16:08
PDT

Anthropic files for IPO, competing with OpenAI.

Anthropic OpenAI Google SoftBank ABB Robotics Rene Haas Stephen Engle Michael Hutter ABB AI IPO US GOOGL PRIVATE DXY

– Valuation of Anthropic approaches one trillion dollars.

– AI sector liquidity is increasing with major fundraising rounds.

– First-mover advantage could benefit Anthropic significantly.

– Investor interest in AI technologies remains high.

AI sector competitionIPO market dynamics

▸ Full transcript

Chip set essentially. So that will be a very interesting discussion to see how we get more details on how Arm Holdings, which of course, you know, Major Backer is SoftBank as is ABB Robotics, was purchased by SoftBank. Essentially, get Rene Haas' assessment of why they are going as well into their own dedicated chip sector. I chief North Asia correspondent Stephen Engle there in Taipei and let's get some more in the AI space with Anthropic, of course, filing confidentially for an IPO, setting up the high stakes race with rival OpenAI. The move comes just days after a massive funding round valuing the company at nearly one trillion dollars as both AI firms rushed to hit public markets. Let's bring up Bloomberg US deals editor Michael Hutter for more and Michael, I guess a couple of things that we're looking at. One is, I guess, the liquidity for this sector in the market because we've also seen Google going ahead with its latest round of fundraising as well, right? Is there a sense of the sort of early bird mover advantage here? Oh absolutely. It's a case of Anthropic getting out in front of OpenAI. There's a lot of competition. Obviously, they are in general rivals and by going first, I think Anthropic is looking to catch a lot of the attention. You get all the hype, you get the media focus on it. You also get investors making their first move into the market too. So there's a whole pool of people wanting to...

Analysis

Anthropic has confidentially filed for an IPO, positioning itself ahead of rival OpenAI in a competitive AI market. This move follows significant funding that has valued Anthropic at nearly one trillion dollars, highlighting the urgency for AI firms to capitalize on market momentum.

Smart investors should note that by going public first, Anthropic aims to capture investor attention and media hype, potentially leading to a favorable valuation and increased liquidity in the AI sector. The race to the public markets underscores the growing importance of AI technologies and the competitive landscape among leading firms.

16:06
PDT

NVIDIA's new SOC features a unified memory architecture optimized for AI workloads.

NVIDIA Jensen Huang MediaTek Qualcomm Mr. Amon Star Trek SOC AI AISIC Steve Jensen Huang

– MediaTek anticipates $2 billion in business this year from its AI chipset initiatives.

– Projected revenue for MediaTek's AI chipset business could reach $12 billion by 2027.

– Qualcomm's CEO emphasized the inevitability of agentic AI as the future direction.

– NVIDIA's keynote was a major highlight, indicating strong market interest in AI technologies.

AI technology advancementsemiconductor growthhigh-performance computing

▸ Full transcript

A new kind of SOC allows for much greater AI capability. It's going to be a great laptop for high-end users, gamers, and creators, but it's going to be perfect for the agentic AI era because of its unified memory architecture and other performance attributes that allow it to be very good for AI workloads. He mentioned the agentic AI era, which is something Jensen Huang talked about a lot yesterday. He says that this will drive the adoption of AI as well as the profitability of AI. Mr. Amon from Qualcomm also gave a keynote yesterday afternoon. He said, and he likes to borrow the term from Star Trek, that resistance is futile. Agentic AI is the way forward. Back on MediaTek, its stock surged on this news. It was highly anticipated, but again, a big jolt for MediaTek, which has been rising. They expect to bring in about $2 billion in business this year for its AISIC new endeavor to go into chipsets, or system on chips, and its own chips for servers and data centers, with up to $12 billion in reported revenue by 2027 for that side of the business. Steve Jensen Huang's keynote on day one was obviously a major highlight. So what are we expecting for day two?

Analysis

NVIDIA's new SOC is set to enhance AI capabilities, targeting high-end users and gamers, which is expected to drive AI adoption and profitability. MediaTek's stock surged following the announcement, with projections indicating significant revenue growth from its new AI chipset endeavors.

16:04
PDT

NVIDIA's RTX Spark laptop targets Intel and AMD.

NVIDIA MediaTek ARM Holdings Intel AMD Vera Rubin RTX Spark CPU GPU ARM RTX AI MSFT NVDA

– Vera Rubin architecture is now in full production.

– MediaTek is a key CPU partner for NVIDIA.

– Market reaction has been positive, especially in Taiwan.

– AI-enabled laptops are gaining traction.

AI technologylaptop market competitionCPU architecture

▸ Full transcript

The latest architecture, the Vera Rubin architecture, which he says is now under full production, essentially moving from the Blackwell chip architecture to Vera Rubin, with Vera being the CPU part of it and Rubin being the GPU side. The demand and buzz here have been quite palpable and noticeable, including that announcement that sent some stocks higher, particularly in media tech here in Taiwan, as well as ARM Holdings. What we talked a little bit about yesterday was the preview of what he was likely to announce, and he did come through with that. This RTX Spark new laptop is really taking on Intel and AMD in a space that Windows and Microsoft tried a few years ago with co-pilot AI-enabled laptops, but now with the backing of the latest architecture, including that from ARM Holdings. They believe that they can take a bite out of the stranglehold that Intel has in that space. Let's hear from MediaTek, which is going to be a big CPU partner for these new laptops. I talked to Vince Koo, who is in charge of both the new RTX Spark project with NVIDIA as well as their new server business chips.

Analysis

NVIDIA's new RTX Spark laptop, leveraging the Vera Rubin architecture, aims to challenge Intel and AMD's dominance in the CPU market. The palpable demand and positive market reaction, particularly in Taiwan's media tech sector, highlight the potential for significant market share disruption.

Smart money should note that MediaTek's partnership with NVIDIA for CPU production could enhance competitive dynamics in the laptop segment, potentially reshaping market leadership. The integration of ARM Holdings' architecture further positions NVIDIA to capitalize on the growing AI-enabled laptop trend, suggesting a shift in consumer preferences towards more advanced computing solutions.

16:00
PDT

AI sector continues to drive market optimism.

Michael McKee Heidi Stroblox Paul Allen President Trump Anthropic OpenAI Alphabet Video Intel AMD Tokyo Stock Exchange Ryosuke Yokoyama PRIVATE GOOGL

– Anthropic's IPO filing indicates competitive dynamics in AI.

– Alphabet's significant funding request highlights ongoing investment in AI technology.

– Video shares rise with new chip announcement, signaling competitive pressure on Intel and AMD.

– Japanese ETFs and IPOs are set for discussion with new Tokyo Stock Exchange CEO.

AI investmentIPO dynamicstech competition

▸ Full transcript

Business and financial news whenever and wherever it happens. I'm Michael McKee at Mount Everest, and this is Bloomberg. This is the Asia Trade. I'm Heidi Stroblox. And I'm Paul Allen. The top stories this are: A positive lead in for Asia with renewed AI enthusiasm extending record Wall Street highs. President Trump also touting progress towards an Iran truce. Anthropic files confidentially for an IPO, potentially getting to market before key rival OpenAI. Alphabet, meanwhile, seeking another $80 billion for AI spending. Video shares jump as it unveils a new PC chip to take on Intel and AMD. It will be live at Copytex and Taipei. And we get the exclusive outlook for Japanese ETFs and IPOs with the new Tokyo Stock Exchange CEO, Ryosuke Yokoyama.

Analysis

Asia is poised for a positive trading session, buoyed by renewed enthusiasm for AI, which has contributed to record highs on Wall Street. Notably, Anthropic has confidentially filed for an IPO, potentially positioning itself ahead of its rival OpenAI, while Alphabet seeks an additional $80 billion for AI investments.

15:55
PDT

Action items are crucial for effective meetings.

John Gray Steve Jobs

– Individual accountability is preferred for final decisions.

– Encouraging an entrepreneurial mindset can unlock potential.

– Innovation should be fostered across all roles.

– Clarity in objectives drives better outcomes.

leadership accountabilityentrepreneurial mindset

▸ Full transcript

I think having an action item so when the meeting's over. Meetings that end with just a lack of clarity of where you're going, to me that's not good. So what you want is the meeting's over and the takeaway is we're going to go do this for this client or we're going to go do this due diligence on this company and then we're going to come back. Action is the thing that matters. Would you rather lead on your own or by committee? On my own but I still think of some things like investing I prefer the committee but in terms of final decisions I think one person has to have responsibility. Top tip for motivating people. I think giving people a sense that there is no limit to what they can achieve that their potential is enormous and really encouraging people to be entrepreneurial. It's not just Steve Jobs in the garage. You can be an entrepreneur as an investor, as a fundraiser, frankly, as an accountant, as a lawyer, you can think about how can I do things better? How can I innovate? You want to encourage people that there's tons of opportunity wherever they are in the organization and they should think like an entrepreneur. John Gray, thank you so much for joining us. Francine, it was great. Thank you.

Analysis

The discussion emphasized the importance of clarity and actionable outcomes in meetings, highlighting that effective leadership often requires individual accountability. Additionally, fostering an entrepreneurial mindset within teams can unlock significant potential across various roles in an organization.

Smart money should note the focus on individual responsibility in decision-making, which may lead to more agile and responsive investment strategies. Encouraging innovation at all levels could enhance competitive advantage and drive performance in a rapidly changing market environment.

15:53
PDT

The firm canceled its Christmas party but created a humorous video to engage employees and clients.

Blackstone John Gray Bloomberg Wall Street New York PRIVATE

– The video has become popular among clients, showcasing the firm's human side.

– Daily routines include extensive meetings and staying updated on global markets.

– Maintaining a relatable corporate culture can strengthen client relationships.

– Humor and self-deprecation can be effective tools in corporate communication.

corporate cultureclient engagement

▸ Full transcript

I will have canceled the Christmas party. So we need to do something that is more fun and make up for this. We decided to do this video. Originally, it was just internal, and it sort of got out, and people thought it was really funny. Again, it was like, hey, this works. The element of this that's helpful is it shows the humanity of the firm that we can make fun of ourselves, that it's not just tough Wall Street investors. Now it's become a thing, and our clients love it. Tell me a John Gray day. So is it, you know, what time do you start? I get up around six in the morning, try to read the newspapers, Bloomberg of course. Always. Always. I get a sense of what's happening in the world, catch up if I'm in New York on the Asia and Europe emails that have come in overnight. I probably read some stuff that I didn't get through the night before, prepping for the day ahead. I get to the office, and it's chock-a-block with meetings: investment committees, internal meetings, client meetings, policy makers, running through the day. If I'm not traveling, I like to go home for dinner, and then I do emails and calls and read documents, committee documents at night, and then I tend to read a lot of investment committee.

Analysis

The firm has embraced a lighthearted approach to internal culture, using humor to connect with clients and showcase its humanity. This strategy has resonated well, transforming a simple video into a client engagement tool that reflects the firm's personality beyond traditional Wall Street stereotypes.

Smart money should note that fostering a relatable corporate culture can enhance client relationships and brand loyalty. The ability to adapt and innovate in communication methods may provide a competitive edge in attracting and retaining clients in a challenging market environment.

15:46
PDT

Leadership during crises requires strong communication and empathy.

Blackstone Steve Schwarzman Wesley

– Employee loyalty can be strengthened through supportive corporate culture.

– Aligning personal investments with client interests builds trust.

– Navigating trauma effectively can showcase a firm's humanity.

– Crisis management can differentiate firms in competitive markets.

crisis managementemployee well-being

▸ Full transcript

call Wesley and to be in the office one day and to have this kind of horrific mass shooting and then also the trauma of a lot of people who were in the building for hours with the highest degree of uncertainty. That was a really hard thing, and there's no playbook for that sort of thing. And so I think the key learning from that was just the importance of being sort of who you are and everybody was in pain at that point, and then having as much communication. And then trying to find your footing, how do you get back to work? We have a lot of responsibility, but also something really traumatic has happened. That was hard finding the balance. That was definitely the toughest thing, and I certainly hope I never experience anything like that again. I remember you, it felt like you were quite close to employees. How did you do that? How did you learn how to do that? How did you know that that was the right thing? You know, I think for both Steve and myself, it was just a natural thing to connect with human beings. You know, we met everybody as we reopened the building when we had people come back. We did a bunch of sessions. And one of my colleagues here in London actually said it was the worst of times, but the best of Blackstone. It really showed a humanity that again made me proud in a very, very difficult situation.

Analysis

The recent traumatic experience of a mass shooting at Blackstone highlighted the importance of human connection and communication in leadership during crises. This situation revealed the firm's commitment to its employees and the culture of support that fosters resilience in challenging times.

Smart money should note that the ability to navigate crises effectively can enhance employee loyalty and trust, which are critical for long-term performance. The emphasis on aligning personal investment with client interests also signals a strong commitment to transparency and accountability in the investment space.

15:43
PDT

Blackstone invested personal capital to align interests with investors.

Blackstone B-CRED North Star

– Trust and performance are central to Blackstone's investment philosophy.

– The firm's culture encourages personal contributions from employees.

– Investor confidence may be bolstered by Blackstone's commitment to client alignment.

– Market noise can be mitigated through demonstrated personal investment.

trust in investmentclient alignment

▸ Full transcript

There's been obviously a lot of noise around private credit. One of the things that's really important to us is that our investors recognize that we're aligned with them. So what we did recently was put up some capital from the individuals of the firm because we wanted to show that alignment. The key is you're in the investing business; it's a trust business. When there's a lot of noise and people are saying this is that, there's nothing more powerful than sort of putting some money in and saying, 'Hey, look, I'm aligned with you, this is my money, I believe in what I'm saying.' In the fullness of time, again, investors will look back and say, 'Hey, they did a good job.' For us, focusing on that North Star, which is performance and building trust with our clients, that's what really matters. But was it difficult to convince other employees to join in, or is it again just part of the culture? I think it's part of the culture. I mean, obviously when you're asking people to make personal contributions, that's something. But I do think it's part of who we are. I do think people recognize that being seen as caring deeply about your clients and being aligned matters. I mean, what was the most, you've had difficult times. Yes. What was your most difficult? Oh, well, definitely the most difficult would have been last summer. We had this horrible shooting.

Analysis

Blackstone's commitment to aligning interests with investors is underscored by their recent decision to invest personal capital from firm members into their private credit fund, B-CRED. This move emphasizes the importance of trust and performance in the investment business, especially amidst market noise.

The cultural aspect of Blackstone, where employees are encouraged to contribute personally, reflects a deep commitment to client alignment and care. This could signal to investors that the firm is not only focused on returns but also on building long-term relationships, which may enhance investor confidence in turbulent times.

15:41
PDT

Blackstone's B-CRED fund is significant at $82 billion.

Blackstone Ayokomatsu TGRHAS F1 CRED

– Corporate culture focused on shared values and risk-taking is emphasized.

– Adaptation in industries like motorsport indicates broader market trends.

– Encouraging diverse opinions can enhance investment resilience.

– Talent retention is a personal mission for leadership.

corporate cultureprivate creditrisk managementtalent retention

▸ Full transcript

If you have people who share your values, who share the drive, and they're the ones who are succeeding, then the younger people are gonna look around and say, oh, that person who took a risk, they moved to a new place, they found this new way to invest capital, oh, I want to follow them. And I think that in many ways is the best way to model things and also just the way you act. You know the way you conduct yourself sends a powerful signal to others. As motorsport pivots to a new hybrid era, the math has changed. Ayokomatsu and his TGRHAS F1 team are here to create a winning formula. In order to do that, people cannot be afraid of failure. Everyone needs to put their opinion on the table. It doesn't matter if I don't agree. What you do, I think a lot of people work in financial services because they view it as a path to wealth. This is a great country. You will find the money or the money will find you. Blackstone's flagship $82 billion private credit fund, B-CRED, made headlines in March.

Analysis

Blackstone's B-CRED fund, valued at $82 billion, is gaining attention as it navigates the evolving financial landscape. The emphasis on hiring individuals who share core values and the importance of risk-taking in investment strategies signal a shift in corporate culture that could attract top talent and drive innovation.

The mention of a hybrid era in motorsport reflects a broader trend of adaptation and innovation across industries. Smart money should note that the willingness to embrace failure and encourage diverse opinions may lead to more resilient investment strategies in uncertain markets.

15:37
PDT

Blackstone prioritizes a culture of loyalty and excellence.

Blackstone Steve Schwarzman

– Growth opportunities are crucial for retaining young talent.

– Employee satisfaction is linked to firm performance.

– The firm aims to attract the best talent in the industry.

– Larger firms may offer better career advancement compared to smaller ones.

employee retentionfirm culturetalent acquisition

▸ Full transcript

Part of it may be your nature or your fundamental optimism, but part of it is having experience and understanding that these crises have another side, and you have to make decisions. Keeping that in mind, your life at Blackstone for 34 years plus four years, is that what you want from your staff as well? Loyalty? Well, if they love what they're doing and the people they're doing it with, then yes. I think the culture that Steve Schwarzman has really created is a place where people are striving for excellence, trying very hard to deliver for our underlying clients, where people treat each other well, and ultimately if you do a great job, you get rewarded. Your hope is that you can attract the best and the brightest, and that they're going to want to stay and grow. And I'm very blessed to work with people who've been at the firm for decades. At the same time, I think what's important at a firm is that it grows. Because one of the problems with some of the smaller firms is there's not a space; you know, that smaller tree can't get sunlight. And so what's great about this firm is this push to grow gives young people a chance to say, even though I'm joining a bigger firm today, I still have a lot of opportunity. How do you think about retaining talent? Do you see it as a personal mission? And actually, what do people want? I think it's a personal mission for sure.

Analysis

Blackstone's culture emphasizes loyalty and excellence, fostering an environment where employees are motivated to stay and grow within the firm. The focus on growth provides opportunities for young talent, contrasting with smaller firms that may stifle career advancement due to limited resources.

The emphasis on retaining talent as a personal mission highlights the importance of employee satisfaction in driving firm success. This approach may lead to better performance outcomes and a competitive edge in attracting top talent in the private equity space.

15:34
PDT

Timing is crucial for investment success.

Hilton Blackstone Steve Schwartzman

– Focus on business quality over price.

– Identifying strong management teams is key.

– Logistics and data centers are promising sectors.

– Market dynamics can evolve over 5 to 10 years.

investment timingreal estate trendslogistics sector growth

▸ Full transcript

Thinking because sometimes you may have made a really bad decision. In the case of Hilton, we actually had invested in a great company. Our timing was terrible. But if we had the staying power to get to the other side, we thought we could make it. So stay calm. The second thing as an investor, which has really informed how I think about deploying capital is so often in my training, I'd focus on whether I pay 98 or 100 for something, a footnote on page 52 says in the investment memo, but it's really that first paragraph. What is the basis? How good of a business is it? The biggest thing on the investing side is it led to this idea of what are the best neighborhoods to invest in? There's a shortage of global housing or consumers are moving to buying things from stores to online, so logistics will do well. Recently the importance of data centers and fabs and energy and thinking about investing in not necessarily just the individual we're gonna price everything but we've got a better chance of success if we pick better neighborhoods, better management teams and in this case we felt great about the business and the neighborhood but timing is everything so you can see how the world evolves but you don't know whether it's five years or ten years. Yeah, I'd say timing is very important because it can impact your returns.

Analysis

The discussion highlighted the importance of timing in investment decisions, particularly in the context of the Hilton investment, where despite a strong business model, poor timing led to significant challenges. Investors are encouraged to focus on the quality of the business and its environment rather than just the price paid, emphasizing the need to identify favorable neighborhoods for investment.

15:32
PDT

Blackstone paid a 30% premium for acquisitions amid market turmoil.

Blackstone Hilton Hilton Garden Hampton Waldorf United States

– The financial crisis led to a 20% revenue decline and 40% cash flow drop for the acquired company.

– Confidence in the travel sector's long-term growth remains strong despite short-term setbacks.

– An additional $800 million investment was made to weather the financial storm.

– The branded hotel business is seen as a key growth area beyond the U.S.

acquisition strategytravel sector growth

▸ Full transcript

And what we were looking for was how could we buy great real estate or operating businesses at reasonable prices? There was so much debt in the market fueling private real estate values that we found we could buy the public companies at better prices. So we ended up paying a big premium, 30 plus percent over where the company was trading. We committed in July of '07, we closed in late October. By early '08, things were going badly. The financial crisis really picked up, and the company had a 20% decline in revenue and a 40% decline in cash flow. We put a lot of debt on it. I would say at that moment it did feel like it was career shortening and that I shouldn't be sitting here today. Did you think, what have I done? Or did you think, we'll get through it? I think there was part of me that was, what have I done? But there was also part of me that was, this is a great business. We still thought that travel was a long-term growth business and that the core of the company, the branded hotel business, where you manage and franchise hotels, Hilton, Hilton Garden, Hampton, Waldorf, that that business could grow a lot beyond the United States. And then we just had to weather this storm. And so we ended up putting in an extra $800 million at the bottom. By the way, we wrote off. It was quite a storm. It was quite a storm. We wrote down the.

Analysis

Blackstone's acquisition strategy focused on buying public companies at better prices due to excessive debt in the market, despite facing significant challenges during the financial crisis. The company demonstrated resilience by investing an additional $800 million to stabilize operations, indicating confidence in the long-term growth potential of the travel sector.

15:30
PDT

Ryanair's cost structure enables competitive pricing.

Ryanair John Gray Blackstone Steve Schwartzman Wall Street Week PRIVATE

– Lack of low-cost carriers in the U.S. presents an opportunity.

– Leadership and hiring practices shape organizational direction.

– Blackstone's assets have tripled under John Gray's leadership.

– Mentorship plays a crucial role in career development.

low-cost carriersprivate equity growth

▸ Full transcript

Ryanair will continue to dominate the short-haul space in Europe because we have much lower fares and much lower costs. The problem for the last 20 years in the States is that there's really been no low-cost carriers anymore. If you had a real low-fare carrier here in the States, as Ryanair is in the U.S., there would still be very strong demand. Don't miss Bloomberg's surveillance live every weekday. Join me each week on Wall Street Week for stories of capitalism from business, markets, economics, tech, and climate. More than what you need to know, it's what you need to think about. People often think, you know, how do I get an organization to head in a certain direction? And it's not by putting plaques up on the wall with mottos. Who you hire, who you fire, who you promote. Then the younger people are going to look around and say, oh, that person who took a risk, oh, I want to follow them. And I think that in many ways is the best way to model things. This week I'm speaking to John Gray, the president and chief operating officer of the private equity giant Blackstone. A so-called lifer, he joined the company in 1992 at just 22 years old. Under the mentorship of chair and chief executive Steve Schwartzman, Gray began on the real estate side of the business, helping it become the largest private equity real estate investor in the world. And since assuming his current role in 2018, Blackstone says its assets have nearly tripled to over $1.3 trillion. So at a time of global upheaval, I was keen to catch up with...

Analysis

Ryanair is set to maintain its dominance in the European short-haul market due to significantly lower fares and costs compared to competitors. The absence of low-cost carriers in the U.S. market suggests that a similar model could thrive if introduced, indicating strong demand potential.

15:25
PDT

Leadership effectiveness is tied to context and adaptability.

London

– There is a growing need for organizations to focus on human behavior in management.

– The speaker has no immediate plans to retire, indicating ongoing leadership stability.

– Teaching leadership may become a priority for the speaker, reflecting a shift in focus.

– Resilience in organizations is crucial for navigating external challenges.

leadership developmentorganizational resilience

▸ Full transcript

When I said something, people would look at me with blank eyes. What is he talking about? Today, I don't need to say a lot. I need to give the context and people are in action. Are you ready for rapid-fire questions? Yes. There are always reports that someone could be retiring, including you. If you were to retire, where would your dream retirement destination be? I'm not sure. I want one destination. I would like to have multiple places. One probably is a sort of a little bit sunny place. I love London. I will retire in London, definitely. But with some summer sort of sunny place in the backup. But no plans to retire? Not any time soon. You said you were a university lecturer. If you were to go back, what subject would you like to teach? Probably I would teach more leadership-related stuff right now. I was teaching at that time micro and macroeconomics, but given my career, I think I would do something different. We've heard you're a keen reader. So is there one book you've returned to multiple times? So I read history books. Why history books? Because that tells a lot about human behaviors to me. Because yes, times change.

Analysis

The speaker emphasizes the importance of context in leadership, noting that previously, their ideas were met with confusion, but now they inspire action. They express a desire to teach leadership rather than economics, highlighting a shift in focus towards human behavior and its implications for effective management.

The insight here is the recognition that leadership is evolving, with a greater emphasis on adaptability and understanding human dynamics. This suggests that organizations may benefit from fostering environments that prioritize leadership development and resilience, especially in the face of external challenges.

15:23
PDT

Rolls-Royce emphasizes resilience and preparation to handle external challenges.

Rolls-Royce Tyler Kendall Bloomberg Europe SMR EPC

– A strong mindset and agile response capabilities are critical for success.

– Action-oriented approaches are preferred over explanation-oriented ones.

– Modular manufacturing processes can enhance efficiency and adaptability.

– Companies should learn from Rolls-Royce's proactive strategies.

resilience strategymodular manufacturingpolitical risk management

▸ Full transcript

SMR, 85% manufacturing process, you learn. You learn and it is modular; it is standard rather than every nuclear project being a bespoke EPC project in a way, right? Anything could happen in the world of politics, as we've seen. How do you deal with politics, with events outside your events? Even here, you could see a change in government with reform coming into power. Yeah, I have a principle in business. I always tell people, once you get into trouble, it is too late. So you need to prepare the company before you get into trouble. So what does that mean? Like we are actually living with it as we speak, and last year we lived with tariffs. But first of all, make the company very resilient. That was our drive. We did that. So external shocks, we actually deal with a lot better. Mindset is more important than anything else. You need to have the mindset and the response capability in the company. You need to develop that before you are in trouble because it takes some time, right? And then you need to be agile using that capability. And then the last thing you are going to do, you are going to be action-oriented, not explanation-oriented.

Analysis

Rolls-Royce's approach to resilience and agility in the face of external challenges is highlighted, emphasizing the importance of preparation before crises arise. The focus on developing a strong mindset and response capability within the company is crucial for navigating political and economic uncertainties.

Smart money should note that Rolls-Royce's strategy of modular manufacturing and proactive resilience can serve as a blueprint for other companies facing similar external pressures. This mindset shift towards action orientation over explanation could redefine operational strategies across industries, particularly in sectors vulnerable to geopolitical shifts.

15:21
PDT

Non-compromising leadership is crucial for organizational success.

Rolls-Royce Europe BP

– 360-degree performance management enhances employee retention.

– Growth creates more career opportunities than shrinking companies.

– A focus on talent development is key to long-term sustainability.

– Innovation in energy solutions, like small nuclear reactors, is essential for net-zero targets.

talent managementperformance managementenergy innovation

▸ Full transcript

It is about 50,000 people. I am non-compromising for that. You may say blunt or whatever, but non-compromising. Mediocrity at that level kills organizations, but also good people. Then you need to develop them and have a great career in this. How do you manage good people? What do they want? Effectively, you want people in your organization who are highly marketable, but they want to stay with you. Right? Right. So that's what that's the secret sauce. Exactly. That's what you want. Right. That is almost 360 performance management in my mind. And 360 performance management always, if you want to close the circle, it finishes with reward and recognition. And then grow the company, because that creates all sorts of career opportunities. Shrinking companies have fewer opportunities. Grow the company that actually feeds itself. Right. I mean, every time I see you, we speak about small nuclear reactors. Yes. Because it's not a 360 view. It's very granular; it's almost problem-solving. It's engineering. I always go to the big picture before I come to the small picture. Europe cannot do without it. What needs it for net zero?

Analysis

Rolls-Royce's leadership emphasizes a non-compromising approach to talent management, advocating for a culture that rewards high performance to drive company growth. The focus on 360-degree performance management is seen as essential for creating career opportunities and sustaining organizational success.

The insight here is that fostering a culture of accountability and recognition can lead to a self-sustaining growth cycle within companies. This approach not only retains top talent but also positions the organization to adapt and thrive in challenging market conditions, particularly in sectors like energy where innovation is critical for achieving net-zero goals.

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