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17:54
PDT

Lenovo prioritizes sustainability through partnerships.

Lenovo Winston Cheng PIF Middle East ESG KSA CFO Hang Mi Bloomberg Invest Hong Kong PRIVATE

– CFO downplays short-term share price concerns.

– Focus on ESG compliance may attract investors.

– Long working hours indicate strong commitment to growth.

– Market volatility is not a primary concern for leadership.

sustainabilityESG compliance

▸ Full transcript

You know, whether it's ESG related as well. I think that's also important. And that's why we build a factory in partnership with PIF a lot in the Middle East, because to use sustainable energy, right, in terms of doing this and really to have the hopes of supplying this and exporting out of the KSA in the future for ESG related matters as well. So I think from that perspective, really being compliant, being ahead, particularly in visionary, like a sustainability effort like this, I think it's important for us. And I don't want to take up your time for lunch, but are you not worried about the share price? Is it too hot right now? It's a down day today, but do you think this consolidation is rather healthy? Well, I never really look at the day-to-day, because I think 180% of my, I work probably 18, 19 hours a day, right? I think about it. Lenovo CFO Winston Cheng speaking to our colleagues, Hang Mi-Chad, Bloomberg Invest, Hong Kong, and take a look at some of the big movers across Asia's session. Of course, we're.

Analysis

Lenovo's CFO Winston Cheng emphasized the importance of sustainability in their operations, particularly through a partnership with the Public Investment Fund (PIF) in the Middle East. He downplayed concerns about share price volatility, suggesting that day-to-day fluctuations are not a priority for him as he focuses on long-term growth and compliance with ESG standards.

Smart money should note that Lenovo's commitment to sustainable practices could position it favorably in an increasingly ESG-focused investment landscape. Additionally, the CFO's long working hours indicate a strong dedication to navigating the competitive tech environment, which may signal confidence in future growth despite current market pressures.

17:52
PDT

Airlines are under pressure due to rising energy prices.

JAL Qantas Lenovo SpaceX Super Micro Bloomberg WTI AI CFO IPO Middle East And Lenovo CL=F WTI GOOGL PRIVATE USDCNH

– JAL and Qantas are down 0.5% and 2.5%, respectively.

– Lenovo plans to raise additional capital for growth.

– The U.S.-China AI race is intensifying.

– Strong demand for capital in the tech sector is evident.

Middle East tensionsAI investmentenergy prices

▸ Full transcript

Take a look at one of the other sectors that we're watching given this increased escalation of Middle East hostilities. Airlines are on the way down for multiple reasons, still a half percent low when it comes to JAL and Qantas is down by two and a half percent there as well. This also as we see energy prices continuing to cause pressure for a lot of these fuel-sensitive sectors. We're seeing oil to the upside of close to three percent. It depends on whether you're watching Brent or WTI and of course the session. But those gains are being held as we continue to see these new strikes from the U.S. on Iran as the ceasefire negotiations continue to fall apart. At the same time, we're also watching some of the de-risking pressures when it comes to AI and tech at the moment. And Lenovo says it will also need to raise additional capital to fuel growth as the U.S.-China AI race intensifies. Speaking at Bloomberg in Best Hong Kong, CFO Winston Chung told us that the current fundraising rush led of course by SpaceX is driven by real growth opportunities. The IPOs that are coming you see then the alphabet coming to the market ahead of these two to really get their share first and you of course we had we see the SpaceX IPO this week as well. So I think from that perspective I think overnight you also see super micro also raising so I think there's a lot of capital demand for the space because but that demand is underpinned by growth opportunities.

Analysis

Airlines are experiencing downward pressure, with JAL down 0.5% and Qantas down 2.5%, as energy prices rise due to escalating Middle East hostilities. Meanwhile, Lenovo is seeking additional capital to fuel growth amid intensifying U.S.-China AI competition, indicating strong demand for investment in the tech sector despite current market volatility.

The ongoing conflict in the Middle East is creating a ripple effect in fuel-sensitive sectors, particularly airlines, while the tech sector is seeing a fundraising rush driven by growth opportunities. Smart money should note the potential for capital inflows into AI and tech as companies like Lenovo and Super Micro seek to capitalize on the competitive landscape, suggesting a divergence in sector performance amid broader market uncertainty.

17:48
PDT

PIMCO anticipates higher credit losses in lower quality borrowers.

PIMCO Morgan Stanley Mike Wilson Cosby Aura Bloomberg Superreturn Conference Iran Santos Bank of America PWC JLP

– Morgan Stanley expects stock market recovery by year-end.

– Cosby index shows extreme volatility, indicating investor uncertainty.

– Aura plans IPO, capitalizing on wearable health tech demand.

– Private equity firms may face contraction and smaller fund sizes.

credit market risksequity market recoveryhealth tech investmentprivate equity contraction

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You know, this sort of time-poor and energy-poor situations that a lot of people are in when it comes to actually doing something about their health. Yeah, and that's exactly the remit of our clinical team. We are all a lot of MDs by training and we are building lots of relationships with clinicians on the ground. One of the things that we hear is the way clinical medicine is practiced today, you have point-in-time vitals. So when your patient comes to see you, we might take a blood pressure, we might look at your heart rate, but that's really only giving you a snapshot of how your patient is doing. But there is so much rich data that you can get from wearables and the longitudinal trends of how a patient has been doing in between visits. And I think that's where wearables can be extremely powerful, giving that continuous stream of information so that when you do go in to see your clinical team, they can see not just how you're doing today, but how your body has really been doing for the months beforehand. That leads to a more precise signal in that visit of what to do about your health concerns. And we also hope that that strips away a lot of the noise and the need-finding during that clinical visit where if you have 20 minutes, we really want to make sure it's the most effective and efficient 20 minutes possible. One of the most fast-changing and I think interesting spaces for medical data at the moment is what we're seeing with JLP-1 medications and the effect.

Analysis

PIMCO warns that a credit loss cycle has begun, predicting higher losses in lower quality credit due to heavy AI spending. Meanwhile, Morgan Stanley's Mike Wilson sees stocks rising into year-end, viewing current market weakness as a correction rather than a change in trajectory.

The ongoing volatility in the market, particularly in the Cosby index, suggests a significant shift in investor sentiment, with potential capitulation in private equity firms leading to smaller fund sizes. The rise of wearable tech, exemplified by Aura's upcoming IPO, indicates a growing trend towards health monitoring, which could reshape healthcare investment strategies.

17:44
PDT

Cosby index down nearly 3% amid extreme volatility.

Cosby Korean won Aura Bloomberg Tanvi Jayaram FX IPO Smart Ringmaker Aura The Finnish PRIVATE

– Annualized volatility suggests potential for significant price swings.

– Korean won slightly rebounded from a historical low.

– Aura plans IPO, targeting $1.5 billion in revenue.

– Wearable tech popularity driving Aura's market debut.

market volatilitywearable tech growthcurrency interventions

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It's still pretty early, but we're seeing some downside, especially led by the Cosby, which is down almost 3%. Of course, we've seen a lot of volatility for the Cosby this week. We had losses of more than 8% just on the Monday session, triggering the circuit breaker as we have the global tech sell-off. Cosby volatility has been especially extreme. The swings over the past 10 sessions equated to roughly 84 percent annualized volatility, which statistically means the index could be expected to rise or fall by roughly the same amount over the course of a year. Of course, we're also contending with downside pressure on the Korean won, which has slightly rebounded from a 2009 low, with authorities mounting that rhetoric of oversight in the FX space. One company that we're also following today, Smart Ringmaker Aura, finally confidentially filed last month for an IPO. Bloomberg has been told they plan to make their stock market debut later this year, looking to cash in on the growing popularity of wearable tech. The Finnish company says it's aiming to top $1.5 billion in revenue this year. It's also just released a new smaller ring offering health tracking features designed to detect early signs of conditions such as high blood pressure and sleep apnea.

Analysis

The Cosby index is experiencing significant downside pressure, currently down almost 3%, following a week of extreme volatility that included an 8% loss triggering a circuit breaker. The annualized volatility of the index suggests potential for substantial price swings, indicating a turbulent market environment.

Smart money should note the heightened volatility in the Cosby, which reflects broader market instability, particularly in tech. Additionally, the rebound of the Korean won from a 2009 low amidst regulatory rhetoric hints at potential currency market interventions that could impact investor sentiment and capital flows.

17:39
PDT

Private equity IRRs are declining due to extended hold periods.

Apollo Asset Management Scott Coleman Danny Berger Superreturn Conference Australia Apollo Asset Management Co President Scott Coleman PRIVATE

– Expect smaller fund raises and potential firm closures in the industry.

– Capitulation in private equity could lead to consolidation.

– Energy sector in Australia is experiencing significant upside.

– Investors may need to adjust strategies in response to market shifts.

private equity contractionenergy sector performance

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For making new investments in private companies, you're approaching that target, Mohawk. Now your hold period has extended, and so that's impacting IRRs, and you are seeing IRRs come down in the industry for that 17 to 22 vintage. But no, the passage of time you'll see it, but yeah, folks are going to have to start capitulating for sure. What does capitulation look like? Is it painful? Is it a reckoning? Well, I think you will see a shrinking of just the expansion of private equity firms that you saw over the last 10, 15 years. You'll see firms raise smaller funds. You'll see some firms go away. That's just the nature of the cycle. Yeah, for sure. Apollo Asset Management Co-President Scott Coleman, they're speaking to Bloomberg's Danny Berger at the Superreturn Conference in Berlin. Take a look at one of the rare sectors that we are seeing upside, and it's pretty significant upside actually. Here in Australia, we're seeing energy names trading high by close to 2%, really buckling.

Analysis

Private equity firms are facing a contraction, with expectations of smaller fund raises and potential firm closures as IRRs decline. This cycle indicates a significant shift in the private equity landscape, suggesting that investors may need to adjust their strategies accordingly.

The current environment signals a potential capitulation phase for private equity, which could lead to a consolidation in the industry. Smart money should be aware of the implications of shrinking fund sizes and the potential for increased volatility in private equity investments as firms adapt to changing market conditions.

17:37
PDT

PIMCO expects higher losses in lower quality credit due to AI spending.

PIMCO Morgan Stanley Mike Wilson China AI memory chip makers analysts CIO As Bloomberg Julie Ren USDCNH PRIVATE

– Morgan Stanley views current market volatility as a correction.

– Analysts are downgrading earnings forecasts for major companies.

– China needs to accelerate index composition to support AI market sentiment.

– Memory chip makers are showing profitability amidst broader market concerns.

credit market trendsAI investment risksstock market correctionsChina market dynamics

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Actually, the big memory chip makers are coming to market with profitability. But if you look at everything else, like analysts, even onshore analysts, they have been downgrading their 2026 and 2027 earnings. These companies, over time, I mean, of course, if you just leave the index as it is, these companies are going to become a smaller part of the index. But if China really wants to showcase a bullish market that China is going somewhere with this AI trade, then they need to speed up the index composition. As Bloomberg opinion columnist Julie Ren there with the latest on the Chinese markets, let's actually get some more calls when it comes to the broader markets, especially on the bond side of things. PIMCO is warning that a credit loss cycle has begun as heavy AI spending could widen economic outcomes and hit lower quality borrowers. It expects significantly higher losses in lower quality credit such as leveraged and private direct lending. PIMCO advocates owning intermediate-dated bonds as they appear well compensated. Morgan Stanley's chief U.S. equity strategist and CIO Mike Wilson sees stocks rising into year-end. Wilson believes current weakness in the market is a correction, not a change in trajectory. She told Bloomberg the recent market volatility is part of an ongoing rotation among cyclical and commodity sectors. There's a deceleration.

Analysis

PIMCO warns that a credit loss cycle has begun, driven by heavy AI spending that could negatively impact lower quality borrowers. Meanwhile, Morgan Stanley's Mike Wilson sees current market weakness as a correction rather than a change in trajectory, suggesting a potential rise in stocks into year-end.

The downgrading of earnings forecasts for 2026 and 2027 by analysts indicates a cautious outlook for the broader market, particularly in the context of AI investments. Smart money should note the divergence in market sentiment, as the rotation among cyclical and commodity sectors may present both risks and opportunities for strategic positioning.

17:33
PDT

TSMC's ADRs fell 4.5% despite strong sales growth.

Taiwan TSMC Hong Kong China Jirapur Minimax HSI US AI Hong Kong China So Jirapur Blambeke Mankas USDCNH

– Foreign investors are selling off Taiwanese stocks heavily.

– Local retail investors in Taiwan are increasingly leveraged.

– Hong Kong's market shows resilience with HSI futures up.

– The AI sector in China is experiencing significant volatility.

Taiwan market dynamicsAI sector volatilityForeign investment trends

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Toes in and buy on the dip, and it looks like they've decided to play for the safe names. What about the setup for China and Taiwan, Anthony? Yeah, that's going to be a very interesting session. Taiwan, TSMC was down 4.5% overnight in the ADRs despite a 30% bump in sales, and that's because the so-called whisper number in the Taiwanese market was for 35% to 40%. So you can see the hurdle rate for further gains in that market is quite high. Taiwan's been on an incredible streak of five days of selling. That's not many days, but each day has been over $2 billion worth of selling. So there is punchy pressure there from foreign investors calling time on that rally just as local retail has ramped up their use of leverage. So local retail is looking very long in Taiwan and a bit vulnerable. Hong Kong China is a bit different. They're a bit insulated from this US macro story, and HSI futures were actually up overnight. But that being said, the AI trade within China has been struggling. So Jirapur, Minimax, these kinds of things are almost 30% off the highest, and are really struggling here as they look to list in the starboard. Meanwhile, the starboard itself has lost a little bit of a buzz as the chip sector turns very volatile to see who can actually monetize these China stimulus plans in the AI sector. So a little bit more choppy session in China, I would say, than the rest of the region with very differentiated winners and losers. I'm Blambeke Mankas, reporter Anthony Steeve.

Analysis

Taiwan Semiconductor Manufacturing Company (TSMC) saw a significant drop of 4.5% in its American Depository Receipts (ADRs) despite reporting a 30% increase in sales, as market expectations were set even higher at 35% to 40%. This reflects a challenging environment for Taiwanese stocks, with over $2 billion in selling pressure from foreign investors amid local retail leveraging their positions.

The divergence in market sentiment between Taiwan and Hong Kong highlights a critical shift; while Taiwan faces selling pressure, Hong Kong's Hang Seng Index (HSI) futures were up, indicating a potential resilience in the region. However, the AI sector in China is struggling, with companies like Jirapur and Minimax down nearly 30% from their highs, suggesting that the anticipated benefits from stimulus plans may not materialize as expected.

17:31
PDT

Iran shows willingness to negotiate a ceasefire.

President Trump Iran Hezbollah Asia markets NK225 Australia Anthony Stevens AI CPI Fox News Wall Street CL=F

– Asian markets are mixed, with tech stocks declining.

– Energy-related stocks are gaining traction.

– Investors are rotating away from unprofitable tech investments.

– Inflation concerns are impacting market dynamics.

geopolitical tensionsmarket rotationinflation concerns

▸ Full transcript

We're also hearing from President Trump speaking to Fox News, saying that the Iranian side has reached out about stopping these strikes and wants that to happen. But all in, we're still at the situation where this fragile ceasefire, which hasn't really been much of a ceasefire for the last few days, continues to hang on by just a thread as President Trump, of course, continues to try and work towards this ceasefire, which has a lot of complicated, deeper issues as well even if you get beyond some of the surface issues like Hezbollah, part of the truce and like the more complex issues when it comes to nuclear. But take a look at what we're seeing with Asia markets at the moment. A lot of declines when it comes to the cost being the NK225. We're also seeing that impact of that continued de-risking in the tech-AI trade. Australia was off by 0.8% of 1%, but Sherry, I should point out Australia, some of these markets including Japan as well, are actually seeing some big gains close to 2% when it comes to energy-related stocks. We continue to see that rotation theme playing out in some of those more diversified markets. Let's bring back market reporter Anthony Stevens for a look at what's really moving today because of course we continue to get that downside pressure from tech coming from the overnight session on Wall Street as well. Yeah, so this continued pressure on the oil price higher is following through on the concerns of the CPI overnight and that continues to set up this bifurcation in equity markets where people are selling their riskiest parts of the AI trade, the stuff that is not making money in the here and now.

Analysis

President Trump indicated that Iran has expressed interest in halting strikes, but the ceasefire remains tenuous amid ongoing geopolitical tensions. Asian markets are experiencing declines, particularly in tech and AI sectors, while energy-related stocks show gains, reflecting a rotation in investment strategies.

The bifurcation in equity markets highlights a shift where investors are offloading riskier tech assets that lack immediate profitability. This trend suggests a cautious approach as inflation concerns continue to pressure oil prices and overall market sentiment.

17:29
PDT

Robots are increasingly being utilized to complement human work.

Bloomberg OpenAI Watch Bloomberg Tech Wall Street Week Asia Bloomberg Deal Bloomberg This Weekend Bloomberg Television PRIVATE

– Mobile private networks enable remote operation of robots.

– There is a societal push for technology that serves the greater good.

– Investors should consider the ethical implications of AI and robotics.

– The integration of robotics may lead to operational efficiencies.

automationroboticsethical AI

▸ Full transcript

Rather than replace us, can they help us? Through mobile private networks with ultra-low latency, a technician can operate a robot. We are able to mirror human behavior. They can go where humans shouldn't or can't. Now we have robots delivering technology for good in our society. Good morning, this is Bloomberg surveillance. Welcome back to the opening trade. Watch Bloomberg Tech. This is the Asia trade. This is Wall Street Week. Welcome to Balance of Power. You're watching Bloomberg deals. Welcome to Bloomberg. This is the Asia Bloomberg Deal. Welcome to Bloomberg This Weekend. This is Bloomberg Television.

Analysis

The discussion highlighted the potential of robots in enhancing human capabilities, particularly through mobile private networks with ultra-low latency. This technology allows technicians to operate robots in environments that are unsafe or inaccessible for humans, indicating a shift towards automation in various sectors.

Investors should note the growing integration of robotics in operational frameworks, which could lead to significant efficiency gains. The emphasis on technology for societal good suggests a potential market for companies focused on ethical AI and robotics, which may attract socially responsible investments.

17:27
PDT

Oracle's shares declined due to higher-than-expected capital expenses.

Oracle OpenAI Henry Hear China U.S.CFO AI Bloomberg Art Laws Joe Weiss Thorland Tracy Hong Kong USDCNH PRIVATE

– The company is raising up to $40 billion for AI expansion by fiscal 2027.

– China-linked accounts are reportedly stirring opposition to U.S. data centers.

– OpenAI's posts related to rising electricity costs did not gain wide reach.

– CFO emphasizes the need for balanced growth and investment in AI.

AI investmentgeopolitical riskcapital expenditure

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Higher growth than the market. However, my cat-backs is not seeing kind of double even third multiple times. So I think the way of resolving that is as a CFO or as a management team of a heavy cat-backs invested AI tech company right now need to find a way on one hand really drive the growth but also keep the density of the investment into AI in a reasonable pacing. By due CFO Henry Hear speaking with Bloomberg Art Laws host Joe Weiss and Thorland Tracy in Hong Kong. And these are some of the other top corporate reports that we were tracking. Oracle shares fell in extended trading after fourth-quarter capital expenses had been higher than estimated, overshadowing AI growth. Oracle has refashioned itself as a provider of AI computing power, embarking on a massive build-out of data centers for OpenAI and other customers. It plans to raise up to $40 billion in equity and debt by fiscal 2027 to fund further expansion. OpenAI says China-linked accounts used ChatGPT to stir opposition to U.S. data centers. It says the accounts generated English language posts raising concerns about rising electricity costs and were probably tied to a private Chinese tech firm that they didn't name. OpenAI says the postings did not have a wide reach. This is Bloomberg.

Analysis

Oracle shares fell in extended trading after fourth-quarter capital expenses exceeded estimates, overshadowing its AI growth narrative. The company plans to raise up to $40 billion in equity and debt by fiscal 2027 to fund further expansion, indicating a significant commitment to AI infrastructure despite current financial pressures.

Smart money should note that while Oracle is pivoting towards AI, the higher-than-expected capital expenses may signal challenges in balancing growth with investment density. Additionally, the mention of China-linked accounts stirring opposition to U.S. data centers highlights geopolitical risks that could impact tech investments.

17:23
PDT

IPO priced at $135 per share.

Michael Hython Saudi Arabia SpaceX IPO

– Strong retail and institutional demand observed.

– Saudi Arabia's public investment fund involved.

– Order books have closed, shares trading starts Friday.

– No pricing uncertainty typical of IPOs.

IPO dynamicsinstitutional investmentmarket sentiment

▸ Full transcript

Why brace for the biggest public debut ever? Let's get the latest with our deal editor Michael Hython. Even here in Japan, we actually saw the funding target being raised by a quarter or so to $2.5 billion given the enthusiasm. Tell us a little bit about how we're going into this IPO. Yes, the enthusiasm is there. There are a lot of buyers in Japan, one of the only Asian countries where you can buy shares directly. They can also buy them elsewhere in Australia nearby. But there's demand. That's the retail portion, which is 30%. The institutional investors have chimed in. We've reported earlier today that the public investment fund in Saudi Arabia, Naktari funds, et cetera, are also buying one to five billion share blocks to buy them. The process now is that the order books have closed. It goes on to essentially the allocation of shares tomorrow and the official pricing of the IPO because it's that set price at $135 a share. A lot of the drama that normally goes with this stage is removed. There's none of this will it price at the bottom of the range or the top of the range. It's going to be $135 that appears. And that will be the announcement tomorrow, presumably. And then the shares start trading on Friday, and then we're going to see what happens. Yeah, I mean given all of this interest we have seen SpaceX using its market power.

Analysis

The IPO for a major company is set to debut at a fixed price of $135 per share, with strong demand from both retail and institutional investors, including Saudi Arabia's public investment fund. The order books have closed, and shares will start trading on Friday, indicating a significant market event ahead.

Smart money should note the absence of typical pricing drama, as the fixed price reflects strong confidence in demand. The involvement of large institutional players suggests a bullish sentiment that could influence market dynamics post-IPO.

17:21
PDT

U.S. military strikes on Iran are heightening geopolitical tensions.

Bloomberg Tyler Kendall KKR Henry McVeigh U.S.Iran Federal Reserve Trump CPI This White House Laurie Logan Henry Mc PRIVATE FEDFUNDS

– Inflation data shows a rise in headline CPI driven by energy prices.

– Core CPI missed expectations, indicating mixed economic signals.

– The Fed is likely to maintain a cautious stance in upcoming meetings.

– Market volatility is expected as geopolitical risks and inflation concerns persist.

geopolitical riskinflation trendsFed policy

▸ Full transcript

Moment is there a ceasefire? Is there not a ceasefire? Markets are up, markets are down. Count on Bloomberg for up-to-the-minute reporting. Breaking news this morning, breaking news in the last few minutes on the ground perspective. Cooking chew from the bomb shelter. This White House is still pushing, and the analysis you need to make informed decisions fast. Clearly, nothing is final until it's well-introduced. The really important question is whether we'll get second-round effects. Nobody covers geopolitics like Bloomberg, bringing you up-to-the-minute geopolitical news whenever and wherever it happens. I'm Tyler Kendall in Beijing, and this is Bloomberg. The new Fed chair, what they'll try to do is do no harm in June, right? This is probably not the time to make a massive pivot one way or the other. But my gut is that I thought Laurie Logan and others were right when they moved to a more neutral posture. We have 150 to 200 companies around the world. We have a great headlight system on what you're seeing and prices going up around the world. KKR's Henry McVeigh speaking on Bloomberg surveillance after U.S. inflation picked up in May to a three-year high, and we're talking about the headline numbers, more than half of it coming from energy prices. Still, when it came to core CPI, it missed to the downside. So CPI was soft enough to sort of avoid panic in the markets but not soft enough to remove that Fed rate hike.

Analysis

Markets are reacting to geopolitical tensions, particularly the U.S. military strikes on Iran, which have contributed to fluctuations in energy prices. The Fed's upcoming decisions are under scrutiny as inflation data shows mixed signals, with core CPI missing expectations while headline numbers rise due to energy costs.

Smart money should note the potential for increased volatility in energy markets as geopolitical risks escalate, particularly if military actions continue. Additionally, the Fed's cautious approach may signal a prolonged period of uncertainty for equity markets, as they balance inflation concerns with economic growth prospects.

17:17
PDT

Military tensions are impacting energy supply concerns.

U.S.Israel Iran Korean authorities Trump Euro stocks 50 German DAX FX DAX

– Foreign selling and tighter financial conditions are pressuring equities.

– Korean authorities are monitoring the FX situation closely.

– The U.S. and Israel's military campaign shows no signs of resolution.

– Geopolitical risks may remain elevated, affecting market sentiment.

geopolitical riskenergy supplyFX market intervention

▸ Full transcript

Threats of additional military strikes happening around the region raise questions about how energy supply will be impacted. Remember, back when the U.S. and Israel launched this campaign in February, Trump was saying it would be resolved within weeks; we are now months in without a clear understanding of when exactly this struggle will end. We are experiencing a feedback loop where foreign selling, weaker currencies, and tighter financial conditions are applying more pressure to the equity space. More rhetoric and action are coming from Korean authorities to monitor the FX situation. Take a look at what we're watching: Euro stocks 50 futures are showing downside, and German DAX futures are also softer.

Analysis

The ongoing military tensions in the region are raising concerns about energy supply impacts, particularly as the U.S. and Israel's military campaign continues without resolution. The feedback loop of foreign selling and tighter financial conditions is putting additional pressure on equity markets, prompting Korean authorities to take action on the FX situation.

Smart money should note the increasing rhetoric and military actions, which suggest a prolonged period of instability that could affect energy prices and market sentiment. The lack of clarity on a peace deal indicates that geopolitical risks may remain elevated, influencing investor behavior and market dynamics.

17:14
PDT

Brent crude prices increased by 2.5%.

Brent crude U.S.Iran President Trump Bloomberg Jill Deesus PRIVATE

– U.S. military strikes on Iran are ongoing.

– President Trump expresses frustration over stalled peace talks.

– The ceasefire from April appears ineffective.

– Inflation concerns are heightened due to rising energy prices.

geopolitical riskenergy pricesinflation

▸ Full transcript

Gains that we've seen for most of the session are reacting to that news, with Brent crude coming online stronger by almost two and a half percent at this point. The U.S. military is launching strikes on multiple targets, with President Trump accusing Iran of dragging out these talks on the interim peace deal. U.S. futures are also sitting lower. Let's get to Jill Deesus, who's Bloomberg managing editor. Jill, we have really seen things ramp up again over the past couple of days after what has felt like weeks of not much in the way of developments? Yes, that's right, Heidi. At this point, it's really difficult to say that the ceasefire announced back in April is even still really in effect. You've seen maybe not the extensive U.S.-Israeli bombing campaign that you saw at the beginning of the war, but what you have seen over the past couple of days, in particular, are these strikes back and forth between the U.S. and Iran. This latest round, which the U.S. is calling self-defense strikes, is happening on Wednesday into today, Thursday. What you are seeing here suggests that there's growing impatience on the part of Trump that there still hasn't been a peace deal reached. Remember, he's been oscillating between the idea that the peace deal between the U.S. and Iran is coming imminently within days, within weeks, to this more aggressive posturing.

Analysis

Brent crude prices surged by nearly 2.5% amid escalating military tensions between the U.S. and Iran, with President Trump accusing Iran of delaying peace talks. The situation reflects a growing impatience from the U.S. administration as military strikes continue, undermining the previously announced ceasefire.

The ongoing geopolitical instability is likely to keep energy prices elevated, impacting inflation and consumer spending power in the U.S. Investors should be cautious of the potential for further volatility in oil markets and the broader implications for inflationary pressures on the economy.

17:08
PDT

Bank of Japan expected to hike rates amid inflation concerns.

Bank of Japan Ueda Uchi Japan Iran Brent crude WTI Bank of America JGB South Korea GDP The Bank

– GDP growth forecast cut to 0.5%, indicating economic fragility.

– Governor's hospitalization adds uncertainty to the upcoming meeting.

– Market anticipates a dovish hike, potentially damaging for the yen.

– Careful messaging required from BOJ deputies during press conference.

BOJ policyyen volatilitygeopolitical tensionsinflation concerns

▸ Full transcript

Two boxes have been taken. The Bank of Japan is expecting inflation to move higher in the last meetings. The second box is the urgency box, also being ticked because the yen is getting to such a low level. If you're asking whether the hike will solve the Japanese yen's problems permanently, I would say it's probably unlikely. I think it will support the yen temporarily. However, one fact here is that the runway for the Bank of Japan to keep hiking is actually quite short. They are cutting the GDP growth rate moving forward to only 0.5% for the coming year, which means that the Japanese economy, in the Bank of Japan's eyes, cannot survive at a higher rate. So, more likely cases probably indicate a dovish hike, and now the market is taking this as just a one-and-done hike, which will even put more damage to the yen. The risk is high right now, given that this could also be a very unusual meeting with the governor hospitalized. We have one of his deputies chairing the meeting, and another one of his deputies actually carrying out the press conference, which necessitates very careful messaging. Yes, exactly right. I think there's quite a key word, and it's something to echo what happened back in August 2024. This time, the Bank of Japan has to be very careful about how they're going to deliver a message. If they're trying to hike, if they're just putting on the questions, I squeal.

Analysis

The Bank of Japan is expected to hike rates, but the effectiveness of this move in stabilizing the yen is questionable, as the GDP growth forecast has been cut to just 0.5%. The upcoming meeting is particularly sensitive due to the governor's hospitalization, necessitating careful messaging from deputies during the press conference.

Smart money should note that while a rate hike may provide temporary support for the yen, the Bank of Japan's limited runway for further hikes suggests a dovish approach may be more likely. This could lead to increased volatility in the yen and impact market sentiment around Japanese equities and bonds.

17:03
PDT

Brent crude prices are rising amid U.S. military actions in Iran.

Brent crude WTI Iran U.S.Press TV Treasury Sydney Hibi-Chan Vantage Markets TV Middle East FEDFUNDS GC=F

– U.S. inflation has reached a three-year high, impacting consumer spending.

– Geopolitical tensions are causing disruptions in Middle East shipments.

– Gold prices are falling for the third consecutive day.

– Sydney shares opened down nearly 1%.

geopolitical riskinflation pressuresenergy market volatility

▸ Full transcript

Take a look at what we're setting up for as we see Brent surging coming online, and we are already seeing that gain really mirroring the gains that we've seen in WTI as well. Brent crude is reacting to this ongoing geopolitical uncertainty, with the U.S. launching fresh strikes for a second day on Iran. We have this back and forth regarding the state of Hormuz. We had heard from Iranian media, Press TV, reporting that no vessels, including commercial vessels, were passing through, while the U.S. now contends that to be untrue. So we're still continuing to wait for further developments there, all at a time when energy prices continue to be pushed higher by this ongoing disruption to Middle East shipments. These concerns over slowing economic growth and inflation are also present. If you take a look at the U.S. inflation numbers, they have picked up to a three-year high, raising questions about the erosion of spending power and whether it makes sense to pare back to that core number, given the impact of higher energy prices on American households. Treasury is caught between that uncertainty regarding the war and the inflation numbers, as well as Fed expectations. We're also looking at gold falling for the third day amidst the escalation of tensions in the Middle East. Sydney shares coming online are seeing a downside of close to 1% in just the first few minutes of trading. Let's bring in now for some analysis, here's Hibi-Chan, who's a senior market analyst at Vantage Markets. Hibi, great to have you with us.

Analysis

Brent crude prices are surging due to ongoing geopolitical tensions, particularly the U.S. strikes on Iran, which are disrupting Middle East shipments. This escalation is contributing to inflationary pressures and concerns over economic growth, as evidenced by rising U.S. inflation numbers reaching a three-year high.

Smart money should note that the interplay between energy prices and consumer spending power is critical, as higher energy costs could lead to a reevaluation of core inflation metrics. Additionally, the market's reaction to these geopolitical events may create volatility in both energy and equity markets, particularly in regions sensitive to Middle Eastern stability.

17:01
PDT

Nikkei opens down 1% after prior losses.

Bank of Japan Ueda Uchi Nikkei Japanese yen South Korea Bank of America oil prices BOJ JGB The Japanese Japan Governor Ueda CL=F

– Oil prices are rising due to renewed tensions.

– Japanese yen remains at 160 level.

– Potential for yen selling if BOJ hike is dovish.

– South Korea's exports rose 85.9% year-on-year.

currency interventionenergy market dynamicsJapanese monetary policy

▸ Full transcript

Media earlier saying that the Iranian side wants the strikes to stop. But we haven't seen a lot of progress so far. We'll be watching anything energy-related in the Asian session today. Of course, we have oil prices gaining a little bit of ground today, given the renewed tensions around that ceasefire that is again at this point in name only. But take a look at how the Nikkei is opening downside of about 1 percent and this, of course, following losses already in the previous session. The Japanese yen is still stuck at that 160 level. We have heard from Bank of America saying that if we do actually get a dovish hike or it is perceived as a dovish rate hike next week from the BOJ, we could actually see more yen selling and perhaps authorities intervening in the markets around that 161 to 164 level. We might get a very unique meeting next week given that Bank of Japan Governor Ueda has been hospitalized. His deputy Uchi will be actually carrying out the press conference, and we will be watching for any rhetoric and tone in that presser as well. JGB is looking like this for the 10-year to 70. Of course, we had very weak demand for the latest 30-year option. So we're watching the pressure on the bond space as well. Take a look at how South Korea is opening right now. We're just getting the export numbers for the first 10 days of this month, rising 85.9 percent year-on-year. Imports also rising.

Analysis

Oil prices are gaining ground amid renewed tensions surrounding a ceasefire, while the Nikkei is opening down about 1% following previous losses. The Japanese yen remains around the 160 level, with potential for increased selling if the Bank of Japan's upcoming rate hike is perceived as dovish, possibly prompting market intervention.

16:57
PDT

are in the next few minutes. This is Bloomberg. Nuvine invests with the foresight and vision that come from navigating more than 125 years o…

PRIVATE

▸ Full transcript

are in the next few minutes. This is Bloomberg. Nuvine invests with the foresight and vision that come from navigating more than 125 years of market cycles. Unlocking the potential of public and private markets, spanning real estate to private credit, and infrastructure to natural capital. Finding opportunity today to shape how portfolios are built for tomorrow. Nuvine, invest like the future is watching. Equity indices built on opinions? That's the old way. The new way is Bloomberg Equity Indices, built using transparent rules-based methodologies that are more responsive to changes in the markets, powered by 450 billion daily data points, and backed by research from hundreds of global experts, delivering benchmarks driven by the markets, not opinions. Bloomberg Equity Indices, Get evolved benchmarks for today's equity markets. This is it. The trade that will make your day. This is what it's all been for.

16:54
PDT

BOJ expected to raise rates in October.

Bank of Japan Ueda Japan BOJ US But Ueda Brian Fowler

– Inflation concerns are dominating investment strategies for Japanese companies.

– Yen remains above the 160 level, indicating potential volatility.

– Market sentiment is shifting towards inflation rather than growth.

– Investors should monitor BOJ's policy decisions closely.

BOJ policyinflation concernscurrency volatility

▸ Full transcript

With expected back in July for that meeting, what are the broader questions when it comes to BOJ continuity for the rate pattern, even his tenure itself? Yeah, well, I mean, so first of all, the Iran situation just does not seem to be settling down at all. So that's going to be something they're going to have to flick at. They're going to have to talk about the possibility of that weighing on growth. And that could complicate the process. But Ueda has been very clear recently in saying that he's more worried about the impact on inflation right now than he is about the impact on growth. He said that anecdotal evidence suggests that Japanese companies also are, when they think about their investment plans, what they're most worried about is inflation, more so than a slowdown in economic growth. So I think the trajectory remains upward, even after the hike next week that we expect. And the question is timing. The economists we've spoken to would expect the BOJ to wait a few months to assess the impact of the latest move, but maybe a move in October would be something to look for. The magazine editor Brian Fowler, there's uncertainty continues to swell when it comes to the Bank of Japan and policy setting there. The yen, of course, pretty happily above that 160 level, but take a look at how we're setting as we get into the start of equity sessions getting underway in the next under five minutes time the US military launching these strikes against multiple.

Analysis

The Bank of Japan (BOJ) is expected to maintain an upward trajectory in interest rates, with a potential hike in October as inflation concerns outweigh growth worries. Recent comments from BOJ Governor Ueda indicate that Japanese companies are more focused on inflation when planning investments, suggesting a shift in economic sentiment.

Smart money should note that the BOJ's cautious approach to rate hikes may lead to increased volatility in the yen, particularly if inflation pressures continue to mount. This could create opportunities for traders to capitalize on currency fluctuations as the market reacts to BOJ policy decisions.

16:48
PDT

TDK's acquisition focuses on enhancing data center efficiency.

TDK Fabric 8 Labs Samsung SK Hynix Lanhee Chen Brunswick Group Bloomberg PWC Oracle OpenAI Jim Tran United States PRIVATE

– The South Korean market is facing extreme volatility.

– Investors should prepare for potential large price swings.

– Energy costs are a significant concern impacting political fortunes in the US.

– Public sentiment around the economy will influence upcoming elections.

data center efficiencymarket volatilityenergy costsUS-China relations

▸ Full transcript

Yes, that is one of the reasons why we're doing this. Also, the US is still the home of innovation. This 3D printing technology that we're acquiring is part of that strategy of looking for a specific technology that will enhance TDK's portfolio. What are the targets when we're talking about the percentage or ratio of revenue? What are the goals set in place, especially with this new acquisition? We don't have anything stated publicly yet. We still need to close the deal. We signed the deal and we're going through all the process and paperwork in the U.S. to close. So we'll be announcing that afterwards. Jin Tran, CEO of TDK-USA, really good to have you with us with that latest acquisition in the United States. And of course, we're setting up for the markets trading across South Korea very closely. We had seen another down day in the previous session. Of course, it's been a roller coaster ride for the South Korea market. The volatility has been so extreme that in the past 10 sessions, it equated to roughly 84 percent of annualized volatility. And what that means is that the benchmark could be expected to rise or fall by roughly that amount over the course of a year. You can see big moves in Samsung and SK Hynix the next day. This is Bloomberg.

Analysis

TDK is acquiring US startup Fabric 8 Labs to enhance its portfolio with innovative 3D printing technology, aiming to improve data center cooling systems. The deal is part of TDK's broader strategy to integrate advanced technologies that can reduce power consumption in AI data centers.

The South Korean market is experiencing extreme volatility, with recent sessions reflecting 84% of annualized volatility, indicating potential for significant price movements in major stocks like Samsung and SK Hynix. This heightened volatility suggests that investors should be cautious and closely monitor market trends as they could lead to sharp trading opportunities.

16:46
PDT

TDK to acquire Fabric 8 Labs for $400 million.

TDK Fabric 8 Labs Jim Tran AI US CEO USA Fabricate Labs United States

– Acquisition aims to enhance data center cooling systems.

– Focus on reducing power consumption in AI data centers.

– TDK's strategy aligns with growing demand for AI-related hardware.

– Shift towards sustainability in semiconductor sector.

AI infrastructureenergy efficiencysemiconductor market

▸ Full transcript

I think you're going to see some of that. That's not what we're trying to do as a firm, particularly we have a leading infrastructure franchise. We do a lot in AI and the data center build-out, but we're trying to be disciplined around that. Japanese electronics components maker TDK is set to spend up to $400 million to acquire US startup Fabric 8 Labs, which has developed technology that can enhance data center cooling systems. The deal is part of the Japanese company's broader push into AI-related hardware. Joining us now exclusively is the CEO of TDK USA, Jim Tran. Jim, good to have you with us. How does this actually fit into the broader TDK strategy? Thanks for having me on, Sherry. Yeah, so TDK, we deal with a lot of material science and process technologies, and by bringing the eCAM technology from Fabricate Labs into the warehouse, we can combine that with our technology to help them scale to bring this type of manufacturing to allow these co-plates that we will be generating to reduce the temperature that's been the bottleneck of the AI data centers today. And we believe we can reduce the power consumption as a result of bringing this technology into the data centers. Why buy it in the United States? Why does that make sense as part of a broader expansion?

Analysis

TDK is set to acquire US startup Fabric 8 Labs for up to $400 million, aiming to enhance data center cooling systems as part of its broader push into AI-related hardware. This acquisition aligns with TDK's strategy to reduce power consumption in AI data centers by integrating innovative cooling technologies.

Smart money should note that TDK's focus on material science and process technologies positions it well to capitalize on the growing demand for efficient AI infrastructure. The move reflects a strategic shift in the semiconductor and electronics sector towards sustainability and energy efficiency, which could influence future investment trends.

16:44
PDT

Retail investors in Asia are actively seeking SpaceX exposure ahead of its IPO.

SpaceX Oracle AI South Korea Australia IPO ETF Japan Equity Capital Markets But Oracle

– Discussions in South Korea focus on buying ETFs that will include SpaceX shares.

– Oracle's shares fell after higher-than-expected capital expenses overshadowed AI growth.

– The excitement around SpaceX indicates a shift in retail investor engagement.

– Oracle's challenges suggest caution in tech stock investments.

IPO excitementAI investment challenges

▸ Full transcript

Because retail investors have direct access to the IPO through online brokers. But when we look at Korea, they discuss how to get SpaceX exposure. So some of the idea is that they buy SpaceX, space-related ETF that will have to buy SpaceX shares when the company listed. So they tried to sort of get exposure in any way. So there's a lot of discussions in South Korea. Also when we look at the, in Australia, people are sort of asking if they can get, you know, slides of SpaceX IPO and there's a lot of excitement in Asian markets. Yes, thank you Tamura. I was Japan Equity Capital Markets reporter with all of that excitement around SpaceX here across Asia as well and of course we could potentially become a $1.8 trillion valuation company right? Yeah, there's other corporate headlines that we're following as well not just SpaceX. So let's get you caught up with some of those we'll be back to SpaceX in no time. But Oracle shares we're looking at those. They fell in extended trading after fourth quarter capital expenses came in higher than estimated overshadowing AI growth. Oracle has refashioned itself as a provider of AI computing power embarking on a massive build out of data centers for open AI and other customers. It plans to raise up to $50 million.

Analysis

Retail investors in Asia are eagerly seeking exposure to SpaceX ahead of its IPO, with discussions in South Korea about purchasing space-related ETFs that will include SpaceX shares. Meanwhile, Oracle's shares fell in after-hours trading due to higher-than-expected capital expenses, overshadowing its AI growth narrative.

The excitement around SpaceX reflects a broader trend of retail investor engagement in high-profile IPOs, indicating a potential shift in market dynamics as these investors seek innovative ways to participate. Oracle's struggles, despite its pivot to AI, highlight the challenges tech companies face in balancing growth investments with financial performance, suggesting a cautious approach to tech stocks in the current environment.

16:37
PDT

Energy costs are a major concern for voters.

U.S.Republicans Middle East America US USDCNH CL=F

– Republicans may face challenges due to rising living costs.

– U.S. allies are questioning America's strategic commitments.

– Public sentiment on the economy will be crucial for election outcomes.

– Geopolitical dynamics in the Middle East may shift.

energy crisisU.S. electionsgeopolitical dynamics

▸ Full transcript

The US-China relationship. We did have an announcement regarding some additions to the entity list, the 1260H list a few days ago. But putting that aside, overall it's been a period of relative tranquility. Public interest in the US ahead of elections is always focused on economic issues. It has been for as long as I've been a part or involved in American politics, the pocketbook issues, how people are feeling about their personal economies. That continues to be the most significant issue for Americans as they look toward who they want to support in an election. So if we're thinking about the barometer of how Republicans are going to do in November, we need to look no farther than what is the state of the U.S. economy, how do people feel about cost of living issues. And I will tell you right now, particularly around energy, there are deep, deep concerns about how that cost of energy is impacting the political fortunes of Republicans. I wanted to go back to something you mentioned. So you're in region, you're speaking with partners and policymakers and governments. What's the feeling because, yes, the energy crisis has roiled so many economies. It's also the U.S. distraction in the Middle East has frayed alliances in this part of the world as well. What are you hearing this in? Yeah, it's a great question. I'm hearing a lot of feedback from, you know, I've been all over the region the last couple of days. Many of the friends and partners and allies of America are wondering and questioning how America views those strategic relationships, these relationships that have been so important to building the post-war.

Analysis

The U.S. economy remains a critical focus for voters ahead of the elections, with rising energy costs significantly impacting political fortunes, particularly for Republicans. Concerns about the energy crisis and its effects on strategic relationships in the Middle East are also being voiced by U.S. allies, indicating a potential shift in geopolitical dynamics.

Smart money should note that public sentiment around economic issues, especially energy prices, could heavily influence electoral outcomes. The questioning of America's commitment to its strategic alliances may lead to a reevaluation of U.S. foreign policy, which could have broader implications for global markets.

16:35
PDT

Trump's political strategy remains focused on executive actions.

President Trump Republicans Iran Bill Cassidy Iran War Republican Party

– Republican support is crucial for midterm election outcomes.

– The Iran War's impact on domestic politics is significant but may not be urgent for Trump.

– Trump's dominance in the Republican Party persists despite challenges.

– Political dynamics may shift as midterms approach.

political pressureexecutive actionmidterm elections

▸ Full transcript

On spending requests, he's getting pushed back on immigration, and we're seeing refunds now being processed for his tariff wall efforts. How much pressure is President Trump under? Because at the same time, he's also said he doesn't care about midterms. I mean, in some respects, he is a lame-duck president for the rest of the story. There is political pressure that comes from Republicans, from his partisans in Congress, who will see the impact of the Iran War in terms of the outcome of the midterm elections. I think the president also is saying, you know, sort of speaking truthfully when he says he doesn't necessarily care because for he himself the politics of this are somewhat removed from the politics of Republicans in Congress. Of course, he'd love a Republican majority in Congress. Of course, he would love to not have to deal with Democrats investigating him all day long. But I think he's come to accept the reality that he's gonna have to go it alone on a lot of these things. So the pressure he's feeling there certainly is political pressure, but it may not be as acute as many people on the outside would think, because the reality is the president has always been a go-it-alone president. He's done executive action since day one. I would expect that to continue. And we're sort of halfway through the primary season as well, Lanny. What's been your take so far of how President Trump is viewed at the moment? Well, with the Republican Party, the president continues to be the dominating force. If you look at his ability to knock off incumbents who have been opposed to him in small ways, even people like Bill Cassidy, the longtime senator from Louisiana.

Analysis

President Trump faces political pressure from Republicans regarding the Iran War and its potential impact on midterm elections, despite claiming he doesn't care about them. His go-it-alone approach may lessen the perceived urgency of this pressure, as he continues to rely on executive actions to navigate challenges.

16:32
PDT

Oil prices up 3% amid Iran conflict escalation.

Iran U.S.President Strait of Hormuz New York traded crude Fox News New York Stanford University Hoover Institution Brunswick Group DXY CL=F

– U.S. President suggests bombing will stop soon.

– No vessels passing through the Strait of Hormuz.

– Inflation print higher than expected affecting U.S. futures.

– Geopolitical tensions could lead to market volatility.

geopolitical riskoil market volatility

▸ Full transcript

Point until the helicopter incident, of course. We've seen the president sort of taking almost a fairly patient approach, saying that it will be done, it will be done soon, oil prices will go down, but we haven't seen much substantive progress being made, and it seems like that situation is worsening. It is interesting; we're hearing from the president on Fox News saying that the Iran bombing will stop shortly. Officials from Iran have asked him to stop bombing. In the meantime, though, no vessels, according to Iran, are passing through the Strait of Hormuz. We are seeing that reaction holding in that oil price up by 3% in New York traded crude. We're seeing that return of sort of dollar and U.S. assets to premises as well. That inflation print that came through a little bit hotter than expected is also weighing in there, and U.S. futures are to the downside, as is the rest of Asia as we head into the start of trading in the next half an hour. Let's get more on the geopolitical situation. The re-escalation of the Iran war with He's a fellow at Stanford University's Hoover Institution and a partner at the Brunswick Group, a global business advisory firm and, of course, someone we chat with quite often. It's such a pleasure to have you here in person in Sydney. What do you make of this situation? I'm particularly interested in what must be going through the President's mind right now, given that it has been a prolonged period where not a lot has happened, and all of a sudden things have heated up again. Yeah, we've been told for several weeks that a deal was very close, that a deal to end the conflict was very close. And then the president got quite a bit of pushback on what that deal might look like, particularly from domestic constituents.

Analysis

Oil prices rose by 3% in New York traded crude amid escalating tensions in the Iran conflict, with the U.S. President indicating that bombing will cease shortly. The geopolitical situation remains precarious, with no vessels passing through the Strait of Hormuz, suggesting potential supply chain disruptions.

Smart money should note that the inflation print came in hotter than expected, which could further pressure U.S. futures and influence market sentiment. The prolonged conflict and lack of substantive progress may lead to increased volatility in oil prices and U.S. assets as investors react to geopolitical risks.

16:28
PDT

SpaceX's IPO is heavily oversubscribed, raising $75 billion.

SpaceX Elon Musk OpenAI Anthropic Bloomberg Intelligence Mandy Singh Michael Haitham Saudi Arabia Kuwaiti Investment Authority AI For Open Bloomberg Intelligence Global Head PRIVATE

– Shares are priced at $135 each, with institutional investors accounting for 70% of the IPO.

– The company's growth potential is linked to its AI and satellite operations.

– Confidence in SpaceX persists despite ongoing financial losses.

– Upcoming AI IPOs may draw additional liquidity into the market.

IPO market dynamicsAI sector growthspace industry potential

▸ Full transcript

AI IPOs that we're still waiting for? That's a very good question. For OpenAI and Anthropic, they are coming up perhaps this year and they have a simpler bet in a way too, though they really are much, obviously, their AI. They don't have a rocket launch system involved or plans to go to other places in the solar system. At the same time, there is so much liquidity that's going to be drawn in the market, and that's going to be an issue. Bloomberg Intelligence Global Head of Technology Research, Mandib Singh, our deals editor, Michael Hyth are there with us on SpaceX. More ahead here on the Asia Trade. This is Bloomberg.

Analysis

SpaceX's IPO is set to raise $75 billion, with shares priced at $135 each, indicating strong investor interest despite the company's current losses. The excitement surrounding the IPO is fueled by the potential growth from its AI and satellite businesses, alongside the established rocket launch operations.

Investors are showing confidence in SpaceX's future despite its financial losses, driven by the large addressable market in the space sector and the anticipated revenue from its Starlink service. The upcoming IPOs from OpenAI and Anthropic may also attract significant liquidity, impacting market dynamics.

16:26
PDT

SpaceX's IPO is heavily oversubscribed at $75 billion.

SpaceX Elon Musk Saudi Arabia's Public Investment Fund Kuwaiti Investment Authority IPO AI DXY

– Shares are priced at $135, with institutional investors accounting for 70% of the IPO.

– Investor confidence is driven by SpaceX's potential in the space and AI sectors.

– The company is currently losing billions but claims to be pursuing investment-grade ratings.

– Valuations in the space sector differ significantly from traditional telecom companies.

IPO enthusiasmspeculative investmentsspace sector growthAI potential

▸ Full transcript

Mandeep, despite the exuberance around the IPO and, of course, the growth potential here, SpaceX is still a company that's losing billions of dollars, and yet it's going around telling investors that it's lined up investment-grade ratings. What's the reason right now that we're seeing so much confidence in this company, and how does that compare to the rest of the tech sector, AI sector, space sector, or whatever you can actually compare it to? Actually, when you think about the space sector, the dominant company there is SpaceX. So that's where, when you look at the addressable market, it is large. And you could say the telecom company is traded at a much lower valuation. But the potential that SpaceX has is huge. To your point, look, you know, you need to have a leap of faith in terms of their ability to expand, you know, add more satellites, and be able to translate that into revenue the way they have done it with Starlink and then hope the, you know, the cursor acquisition would really revive the AI side of things. So there is a lot of future growth that you can see down the horizon. But at the same time, there's always a conglomerate discount with entities like this. And that's where it would be interesting to see how far.

Analysis

SpaceX's IPO is generating significant enthusiasm, with a valuation of $75 billion and shares priced at $135. Despite its current losses, investor confidence is buoyed by the company's potential in the space sector and its existing revenue streams from Starlink.

Smart money should note that while SpaceX's valuation reflects optimism about future growth, it also carries inherent risks due to its conglomerate structure and reliance on speculative technologies like AI. The contrasting valuations between SpaceX and traditional telecom companies highlight the market's appetite for high-risk, high-reward investments in emerging sectors.

16:24
PDT

Company's revenue surge from compute deals enhances growth outlook.

Elon Musk Saudi Arabia's public investment fund Kuwaiti Investment Authority Starlink AI Jim Chay The China Saudi Arabia USDCNH

– Valuation driven by enthusiasm rather than solid fundamentals.

– Institutional investors committing $1 to $5 billion each.

– Existing rocket and Starlink businesses provide a strong foundation.

– AI component adds potential but raises valuation concerns.

AI investmentspeculative valuation

▸ Full transcript

The compute and revenue generation is great for the near term and improves sentiment around growth prospects because this wasn't a fast-growing company if you look at the growth rates. But suddenly, once you layer on that $25 billion in revenue from the compute deals, it becomes a growth company, and that's what I think would be exciting for investors to look at. Michael, exciting but also definitely polarizing, right? Jim Chay is not saying that the valuation is being fueled by, quote, hopes and dreams, but certainly enthusiasm for Elon Musk and the AI trade broadly as opposed to perhaps any sort of specificity about the business right now. Right. I think Elon Musk has his detractors and fans in equal measure, it seems. The China story is very interesting. Yes, the company is getting a very high multiple, but a lot of things are special with the company. It has this existing rocket business, a rocket launch business. Starlink is up and running. These are certainly strong plans and have growth potential. The AI component is coming on. Obviously, going to Mars is a bit out there still, but there are investors who are willing to put a lot of money into it, starting with the institutional investors that we reported today, that Saudi Arabia's public investment fund and the Kuwaiti Investment Authority each putting in $1 to $5 billion.

Analysis

The recent surge in interest around a company linked to Elon Musk is driven by a significant $25 billion in revenue from compute deals, transforming it into a growth prospect. However, the valuation appears to be buoyed more by enthusiasm for Musk and the AI sector rather than concrete business fundamentals, raising questions about sustainability.

Investors, including major institutional players like Saudi Arabia's public investment fund and the Kuwaiti Investment Authority, are willing to commit substantial capital, indicating a strong belief in the company's potential despite its polarizing nature. The combination of existing rocket and Starlink businesses alongside emerging AI components presents a unique investment opportunity, albeit with inherent risks tied to speculative valuations.

16:22
PDT

SpaceX IPO priced at $135 per share.

SpaceX Elon Musk Bloomberg Intelligence Michael Haitham Mandy Singh IPO PRIVATE

– Total raise expected to be $75 billion.

– IPO heavily oversubscribed with institutional investors accounting for 70%.

– Allocations to institutional investors will be revealed soon.

– Stable pricing suggests a clear entry point for investors.

IPO market dynamicsinstitutional investment trends

▸ Full transcript

At the latest with our deals editor Michael Haitham and Bloomberg Intelligence global head of tech research, Mandy Singh. Michael, let me start with you. I mean, this is huge, perhaps the biggest market story of the week. Give us the latest on where we're headed with this IPO, which is already heavily oversubscribed. Right. And of course, it's the biggest IPO ever, $75 billion. So we got a lot of superlatives here. Yeah, we're thinking the process is pretty clear right now at this point. There's not a whole lot of drama like there isn't a lot of other IPOs because of that set price. The shares are being sold for $135 a piece. It will raise $75 billion with the shares being sold and the orders are in, the books are closed. The only drama might be tomorrow that the allocations will be made to the institutional investors who account for 70% of the IPO. And they'll find out what shares they get, how big of a allotment. Of course, there's the never say never. This is SpaceX and Elon Musk and things might be surprising at some point and perhaps an upsize that seems unlikely or a change in the share price also unlikely. But between now and the start of trading of the shares on Friday, it looks like pretty clear sailing. Mandy, it's a pretty basic question, but what are investors actually putting their money into?

Analysis

The IPO of SpaceX is set to be the largest ever, raising $75 billion with shares priced at $135 each. The offering is heavily oversubscribed, indicating strong institutional interest, with allocations to be determined soon.

Investors are betting on the potential of SpaceX under Elon Musk's leadership, but the lack of drama in the pricing process suggests a stable entry point. Smart money should note that while the IPO is oversubscribed, the actual trading dynamics may still hold surprises given Musk's history of volatility in his ventures.

16:17
PDT

30-year debt yields have dropped below 3%.

Japan US Australian dollar Sterling JGBs 30-year debt Federal Reserve DXY CL=F

– Weaker demand for JGBs is bearish for the yen.

– The dollar remains strong against major currencies.

– Australian dollar and Sterling are under pressure.

– Investors are seeking higher yields outside Japan.

currency pressureUS exceptionalismbond market dynamics

▸ Full transcript

30-year debt yesterday. The average in the last 12 months is around 3.4. It's come under 3. Now, yields have actually dropped in recent sessions. So you kind of go, okay, those dip buyers, those people looking to lock in those juicy, higher yields, well, they've sort of flooded to the edges. As a result, we did get a weaker auction. And again, remember, inflows do matter. Bids on bonds do matter when it comes to supporting the currency, in this case the yen. So definitely on that front as well it's bearish for the yen because people just aren't buying as much JGBs. Yeah, who else is losing when it comes to currencies around the world given the rise of the US exceptionalism narrative again? Yes, they should be. We're looking at a conversation that we're having at the start of the year. The dollar is king for a reason. Undisputedly, the world's reserve currency. Virtually every single currency in the world right now is under pressure. The major currencies against the dollar, especially on the back of the latest tensions. Look at the Aussie, a risk-on currency below 70 US cents at the moment. And if you look at Sterling, for example, in the European session, it's under the 135 handle. Basically, people are going, what do I do in this environment? Look, US rates are really high. You know, one of the biggest exporters when it comes to oil in the world as well. So just block the king dollar where everything else looks uns...

Analysis

The recent drop in yields for 30-year debt, now under 3%, indicates a weaker auction and reduced demand for Japanese Government Bonds (JGBs), which is bearish for the yen. The dollar's strength continues to pressure virtually every other currency, with the Australian dollar and Sterling notably struggling against the backdrop of rising US rates and geopolitical tensions.

Smart money should note that the current environment favors the dollar as the world's reserve currency, leading to a flight from riskier currencies. The lack of demand for JGBs suggests a broader trend of investors seeking higher yields elsewhere, which could exacerbate yen weakness and impact global currency dynamics.

16:14
PDT

BOJ rate hike expected next week.

Bank of Japan Endak Kurren Ruth Carson Bank of America U.S.Tokyo BOG BOJ ENDA Federal Reserve Chief Asia FEDFUNDS

– Dovish hike could accelerate yen selling.

– Traders betting against the yen despite interventions.

– Strong U.S. inflation numbers impacting global rates.

– Market expectations for BOJ are high.

BOJ policycurrency dynamicsglobal inflation

▸ Full transcript

And maybe that's going to be the bigger challenge for Mr. Washington in the near term. It's no longer about him trying to push through to rate cuts that people kind of had expected he would have; maybe his challenge now might be holding off the Hawks in terms of, you know, jumping up support for a rate hike in the near term. Federal Reserve and Economy reporter Endak Kurren. They're a little bit of a different story to the Fed here in Japan when it comes to next week's BOG policy decision. The expectation is for a rate hike. But still, the Bank of America is saying that if the BOJ delivers a dovish hike, the yen selling could accelerate. It's now falling back below that $160 level, and intervention risk is firmly back on the table. But traders continue to bet against a currency despite Tokyo's attempts to stop them. For more, let's bring in our Chief Asia effects and rates correspondent Ruth Carson. It's really about the global rate backdrop as well for the BOJ. We're talking to ENDA right now, and of course, we have seen the very strong inflation numbers out of the U.S. overnight. Yes, absolutely. There are so many factors working against the yen right now. It doesn't help in a way as well that traders are already expecting the BOJ to hike. Anything less than a firm hike and probably hawkish commentary from the BOJ would mean even more selling pressure.

Analysis

The Bank of Japan is expected to hike rates next week, but a dovish approach could lead to accelerated yen selling, which is already under pressure. Traders are betting against the yen despite Tokyo's intervention attempts, highlighting a challenging global rate backdrop influenced by strong U.S. inflation numbers.

Smart money should note that any less-than-hawkish commentary from the BOJ could exacerbate selling pressure on the yen, indicating a potential shift in currency dynamics. The market's high expectations for a firm rate hike may leave little room for error, suggesting that the BOJ's communication will be critical in shaping investor sentiment.

16:12
PDT

U.S. inflation driven by rising oil prices.

Iran U.S.Kevin Warsh President Trump Fed AI Bloomberg CL=F FEDFUNDS

– Core inflation remains below Fed's target.

– Geopolitical tensions in Iran impacting energy prices.

– Market expectations for Fed rate hikes may be tempered.

– AI's disinflationary narrative faces challenges.

inflation riskgeopolitical tensionsFed policy

▸ Full transcript

The fastest increase, as you mentioned, is in three years, with more than half of that attributed to oil. On the back of the war, we saw prices come off for some staples like new cars. Interestingly enough, medical insurance and beef prices have decreased; these have been the usual suspects over the past few months. Service prices are somewhat subdued, and of course, core inflation on a month-to-month basis came in at 0.2%, just a touch below expectations, but on a year-over-year basis, core inflation is at 2.9%, which is certainly well above the Fed's target. These numbers do not scream that the Fed has to walk into their meeting next week and raise interest rates either this month or in the near term, but it does remind us that inflation is resurgent in the U.S. again, and a lot of it has to do with the energy story, which is still hanging on Iran. We saw the news on Iran today. Where does this leave Kevin Warsh? He obviously went into the Fed with a very clear mandate on what President Trump thinks he should do. The numbers are not good for the Kevin Warsh narrative. Mr. Warsh, in the lead-up to getting that nomination to become the Fed chairman, was pushing a narrative around a roadmap or path to lower interest rates. One of those subplots was the idea that the AI boom will be disinflationary now.

Analysis

U.S. inflation is resurging, primarily driven by rising oil prices amid ongoing tensions in Iran, which complicates the Fed's interest rate strategy. Core inflation remains subdued, but the energy sector's volatility suggests that the Fed may not need to raise rates imminently despite pressure from political narratives.

Smart money should note that the inflationary pressures are closely tied to geopolitical events, particularly in the Middle East, which could lead to increased volatility in energy markets and broader economic implications. The narrative around AI's potential disinflationary effects is also under scrutiny as inflation persists, challenging previous assumptions about tech's role in the economy.

16:08
PDT

Asian tech stocks are facing downward pressure due to U.S. market struggles.

Supermicro SpaceX Google TSMC Bank of Japan Kazua Wada Iran U.S.IPO The Asian Anthony Stevens The Bank GOOGL

– Supermicro's stock plummeted 28% after a failed fundraising attempt.

– TSMC's strong sales growth was overshadowed by a 5% stock decline.

– High inflation and geopolitical tensions are impacting investor sentiment.

– Investors are likely to prioritize high-conviction stocks over speculative ones.

inflation riskgeopolitical tensionstech sector volatility

▸ Full transcript

The energy input into inflation continues to be very high. This is a technical debate that has significant political and economic repercussions for the U.S. Where are we going to see the pain points in the Asia session today? The Asian tech session is challenged by a U.S. tech session that struggled with the confluence of inflation and liquidity factors. The company Supermicro decided to try to raise money ahead of SpaceX and after Google and got slammed for that. It was down 28%. That is one of the liquidity drivers alongside the SpaceX IPO that weighed on tech overnight. There is no liquidity support ahead of the SpaceX IPO while inflation remains high. Lastly, for our region, TSMC came up with some very solid sales numbers, up 30%, but was down 5% as that kind of came in a shadow below what the market was expecting. This just shows you the high expectations that are baked into tech stocks across the region. The margin for error is really low with this inflation backdrop and the Iran war continuing. The margin for error for tech investors is also very low. People are going to stick to their high conviction names and look to trim more of the speculative excess as we have seen this entire week. What a week it's been. Our markets reporter Anthony Stevens there setting up the session for us and still to come on the Asia trade. The Bank of Japan governor, Kazua Wada, is set to miss next week's policy meeting after being taken to the hospital. Details are coming up next.

Analysis

Asian tech stocks are under pressure as the U.S. tech sector struggles with high inflation and liquidity concerns, highlighted by Supermicro's 28% drop after its fundraising attempt. TSMC reported solid sales growth of 30%, yet its stock fell 5%, indicating that high expectations in the tech sector leave little room for error amidst ongoing geopolitical tensions and inflationary pressures.

The current market environment suggests that investors are likely to focus on high-conviction stocks while trimming speculative positions. The combination of high inflation and geopolitical instability, particularly related to the Iran conflict, is creating a challenging backdrop for tech investors, emphasizing the need for caution and selectivity in stock picking.

16:06
PDT

U.S. oil prices are increasing due to military actions in Iran.

Iran U.S.President Trump Bloomberg Laura Davidson Anthony Stevens CPI White House Wall Street CL=F PRIVATE FEDFUNDS

– President Trump is frustrated with the lack of progress in negotiations with Iran.

– Half of the recent inflation increase is attributed to energy costs.

– Core CPI remains soft, indicating changes in consumer spending habits.

– Tensions in the Strait of Hormuz are a key risk factor for oil supply.

geopolitical riskinflation dynamicsenergy market volatility

▸ Full transcript

Helicopters are moving through various passageways near and around the Strait of Hormuz. We have seen at least some oil come out of the Strait of Hormuz, according to some data and reporting from Bloomberg. This remains a key point of tension, and really, Trump all he wants at this point is to get the Strait of Hormuz open and some sort of broader deal. He suggested he'd be willing to wait for Iran to agree to not pursue a nuclear weapon at a later date. But right now, everything is completely in flux. It looks like the military campaign is ramping up, including Trump having a meeting at the White House earlier today where he was talking with advisors about potentially having some sort of even bigger military campaign, short-lived but very strong. Following the latest attacks on Iran, we're now seeing U.S. oil prices jumping. We actually got the inflation numbers overnight from Wall Street, and what was interesting was that about half of the headline inflation number came from energy alone, although core CPI still was soft. So what's weighing on the markets right now? We have to dig into the details a little bit. We are setting up for quite a debate here between the Fed and real people. The core CPI was dragged down by people cutting back on items such as new autos or home furnishings.

Analysis

U.S. oil prices are rising following renewed military actions against Iran, with President Trump expressing frustration over stalled negotiations. The situation in the Strait of Hormuz remains tense, impacting oil supply and prices as military campaigns escalate.

Smart money should note that half of the recent inflation data was driven by energy costs, indicating potential volatility in markets as geopolitical tensions affect supply chains. The core CPI remains soft, suggesting consumer spending is shifting, which could influence Fed policy discussions moving forward.

16:03
PDT

U.S. strikes on Iran have resumed, indicating rising tensions.

Iran U.S.President Trump Strait of Hormuz Governor Ueda In Washington And Iran

– President Trump is frustrated with the lack of progress in negotiations.

– Iran has closed the Strait of Hormuz to all vessels, impacting oil supply.

– High gas prices are a concern as summer approaches.

– The midterm elections may influence U.S. foreign policy decisions.

geopolitical riskenergy market volatility

▸ Full transcript

Japan with Governor Ueda hospitalized and expected to miss that June policy meeting now. Let's get to the latest. In Washington, we'll bring up on both politics, as it's always ever since. So, Laura, after what seemed to be quite a bit of patience over the past few days and weeks from President Trump, what has changed? Because it feels like very much the tone has changed, particularly with the second day of strikes. Yes, the term ceasefire really has ceased to have any meaning here. We've seen sort of a volley of strikes back and forth between Iran and the U.S. with just about an hour ago or so, the U.S. announcing a new round of strikes on Iran. We've seen President Trump really get more angry and angry that Iran isn't coming to the table to strike a deal, or at least the deal that Trump wants to see happen. So this is where we're essentially sort of seeing Trump in real time react to his patience running out. He wants to see some sort of progress. The midterms are getting closer. Gas prices continue to be high and elevated as we're headed into these summer months. And there's just really no progress has been made, despite Trump saying several times, including as recently as over the weekend, that a deal could come together in the coming days. We just have not seen that happen. And Iran has continued to deny that there was a deal at hand that they could agree to sign on to in the next couple of days. And of course, the question is around the Strait of Hormuz, right? Iran now saying that the strait is completely closed to all types of vessels according to local media there.

Analysis

The U.S. has resumed strikes on Iran, escalating tensions and signaling President Trump's frustration with the lack of progress in negotiations. The situation is exacerbated by high gas prices and the approaching midterms, which may pressure the administration to achieve a deal soon.

Smart money should note that the closure of the Strait of Hormuz by Iran could significantly impact oil supply chains and prices, as this is a critical shipping route for global oil. The ongoing conflict may lead to increased volatility in energy markets, particularly if strikes continue and negotiations fail.

16:01
PDT

U.S. strikes in Iran are escalating tensions.

Iran President Trump SpaceX Brent crude New York traded crude U.S. military AI IPO TV Hadi Stradwas As Sherry Middle East S&P 500 CL=F

– S&P 500 hits a five-week low amid tech sell-off.

– Oil prices are rising due to Middle East conflict.

– SpaceX IPO demand exceeds available shares by four times.

– Asian markets are set for losses.

geopolitical riskoil price volatilitytech sector performance

▸ Full transcript

Sees fire close to collapse with new U.S. strikes on multiple targets in Iran. President Trump accusing Tehran of dragging out talks. Asian stocks set for losses with a renewed tech sell-off driving the S&P 500 to a five-week low. Oracle falling in late trade on worries about AI spending. Order books closing on the SpaceX IPO, with demand set to be more than four times the available shares as the company touts investment-grade credit ratings. I'm Hadi Stradwas in Sydney. Take a look at the setup for trading across Asia. As Sherry alluded to, this is all about the revival of the conflict in the Middle East as we see the U.S. resuming these further strikes. American forces starting new strikes in Iran, putting further strain on an already fragile ceasefire that's dragged on for weeks, threatening to prolong the conflict in the region. We saw the U.S. military launching these strikes against multiple targets in Iran for a second day in a row, President Trump accusing Iran of dragging out the interim peace deal talks. We have also just heard from Iran, Press TV, reporting that Iran's Khatam al-Ambia Central Headquarters is saying that the Strait of Hormuz has been completely closed to all types of vessels, including commercial ships. So this stalemate continues, and it appears to be worsening when it comes to this conflict between the two sides. We are seeing that jump in oil prices; Brent crude is up 1.8% in the last trade, but New York traded crude.

Analysis

U.S. military strikes in Iran are escalating tensions, with President Trump accusing Tehran of delaying peace talks. This renewed conflict is contributing to a tech sell-off, pushing the S&P 500 to a five-week low and impacting Asian markets.

Smart money should note the potential for rising oil prices as the situation in the Middle East deteriorates, which could further influence market volatility. Additionally, the demand for SpaceX's IPO, reportedly four times the available shares, indicates strong investor interest despite broader market concerns.

15:55
PDT

Ohanian advocates for authenticity in community-driven platforms.

Alexis Ohanian Paul Graham Dig Reddit

– Founders must recognize their responsibility in product impact.

– The principle of creating what people want remains crucial.

– Consumer demand is shifting towards genuine interactions.

– Ethical business practices may become a key investment theme.

community engagementethical business practices

▸ Full transcript

Trust breaks down real quick. There clearly needs to be some other version of, you know, if you just want to show up and find a community of people who love cameras, where do you go to get authentic real human reviews of those things? In a world increasingly crowded by bots and algorithms, Ohanian is once again betting on community. On the pitch, the track, in our cities, and even in social media, the question now becomes, can a master of marketing sell us back on authenticity? What advice would you give founders today that's different than what you got back then? The biggest advice which Paul Graham put on everyone's shirt, and I think it still holds true, which is make something people want. In 20 years now I can say having started multiple companies and seeded many, many more, that founding principle never goes away. I think the founders for today need to know just how much responsibility they have. So I would say move decisively, move earnestly, be aware of what you're building and know that this responsibility starts right now for building something that is going to have a very big impact on the world.

Analysis

Ohanian emphasizes the importance of authenticity in a digital landscape dominated by bots and algorithms, suggesting that community-driven platforms can regain consumer trust. He advises founders to recognize their responsibility in building impactful products, echoing the timeless principle of creating something people want.

Smart money should note that the shift towards community-focused platforms may signal a growing consumer demand for genuine interactions, potentially reshaping social media dynamics. The emphasis on responsibility among founders indicates a trend towards more ethical business practices, which could influence investment strategies in tech startups.

15:53
PDT

Ohanian criticizes toxic communities on Reddit, highlighting the need for better content moderation.

Ohanian Reddit Dig Kevin Rose CEO Watch People Die

– Reddit banned 'Watch People Die' and 2,000 other communities for violating policies on hateful content.

– Ohanian is reviving Dig with a focus on community and humanity.

– There is a growing demand for social media platforms that prioritize ethical content.

– The success of Dig could influence the future of social media engagement.

social media ethicscontent moderationcommunity engagement

▸ Full transcript

Because I know this community is full of snuff videos, suicide videos, murder videos, mostly of people in the developing world, because that's how that video footage gets leaked out. And there are millions of people on Reddit who come to this and discuss it and share and bond. And that feels vile. That feels wrong. It's not something I'm proud of. But when you're told, and the room is very obviously against you and told, no, no, no. No, it's, don't worry about it, you're wrong. It was a weird, very surreal experience. Serena clocked it real quick. She was like, no, those people are crazy. 'Watch People Die' is a horrible community and you are absolutely right. And thank God I had one person in my life who at least was able to call that bull. And I feel very fortunate that I'm never gonna have to be in a room like that again. Reddit said in a statement that it was widely agreed upon to ban 'Watch People Die' in 2019 and that 2,000 other communities were banned for violating Reddit's policy on hateful content in 2020, the year Ohanian left the company. Lessons learned, Ohanian is now taking another stab at social media. He and the former CEO of Dig, Kevin Rose, once arch rivals, are teaming up to revive Dig. I mean, I really just liked you for a long time. And... Rightfully so. And it was great. Which has been rebranded as a community with humanity at its core. But humanity doesn't seem to attract eyeballs much these days. If the engine of virality...

Analysis

Ohanian reflects on the toxic communities on Reddit, particularly criticizing the 'Watch People Die' group, which he believes fosters vile discussions. He emphasizes the importance of community standards and his commitment to creating a more humane social media platform with the revival of Dig.

Smart money should note that Ohanian's return to social media with a focus on community values could attract users disillusioned with current platforms. The shift towards more responsible content moderation may signal a broader trend in social media, potentially impacting user engagement and advertising revenue.

15:50
PDT

Ohanian resigned from Reddit in 2020 due to concerns over toxic communities.

Alexis Ohanian Reddit George Floyd IPO While Reddit Watch People Die And Reddit

– He returned as executive chair to address these issues but left before the IPO.

– His resignation was a public statement advocating for better community standards.

– Ohanian believes there are more IPO opportunities ahead.

– The conversation around corporate responsibility in tech is becoming more prominent.

corporate governancesocial responsibilitytech accountability

▸ Full transcript

The platform that enabled this kind of trolling discussion. On the social media side, look, the same reason that I felt a responsibility to step away when I did the way I did is the reason why I have so much peace moving the way that I move now, because I can't change the past, but I can learn from it and I can do better. And so that's my job. While Reddit achieved steady growth in the years after Ohanian and Huffman sold, it was increasingly plagued by hate groups and toxic communities. In 2014, Ohanian was brought back as executive chair to write the ship. But he left in 2020, four years before Reddit went public. A lot was made of the fact that you weren't at the IPO. Was it? Yes. Really? Why weren't you there? Well, I wasn't invited. I did not expect to be invited though, given the fact that I resigned in protest in 2020. You know, that was a very public statement in order to get the company to finally ban some of these communities I'd already had opposition about, communities like Watch People Die and some of these really violent and racist communities. And yeah. So there is some bad blood or hurt feelings or bruised egos. Not for me, but here's the thing. You know the way I look at it, I've got plenty more IPOs to go to. Ohanian's resignation came on the heels of the George Floyd protests. In his public statement, he urged the company to replace him with a Black board member. And Reddit did.

Analysis

Alexis Ohanian's departure from Reddit and his subsequent return as executive chair highlight the ongoing challenges of managing online communities plagued by toxic behavior. His resignation in 2020, following the George Floyd protests, underscores the complexities of corporate governance and social responsibility in tech.

Smart money should note that Ohanian's focus on community standards and ethical leadership may influence investor sentiment towards tech companies grappling with similar issues. The narrative around social media platforms is shifting towards accountability, which could impact valuations and investment strategies in the sector.

15:48
PDT

Rising consumer inflation expectations signal potential market fragility.

Sierra Ohanian Athlos Guy Johnson Anna Edwards Tom McKenzie Blame back AI Tom Mc Wall Street As Athlos For Ohanian DXY

– Cryptocurrency volatility continues to be a concern for investors.

– AI sector hype may not align with underlying financial fundamentals.

– Investors should focus on consumer sentiment trends.

– Market pricing may not reflect true inflation expectations.

consumer sentimentinflation expectationscryptocurrency volatilityAI sector investments

▸ Full transcript

We see crypto's trillion-dollar swings, the end of jobs, or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money. And that's the concern that we continue to have because we're starting to see a little bit of fragility in the consumer. If we look at consumer inflation expectations, they're much higher than what the market is pricing in. Don't miss number and brief live every weekday. Trading day is about to start, and you're already looking for that edge. The opening trade brings you everything you need to know as markets open across Europe. I'm Guy Johnson. I'm Anna Edwards, and I'm Tom McKenzie. This is your opening trade only on Blame back. 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. As Athlos comes to a close, Sierra takes the stage, and the city that never sleeps is already moving on to tomorrow's headlines. For Ohanian, it means a new chance to promote his projects and go toe-to-toe against the internet's trolls. Just a week before Athlos, he found himself in the crosshairs after speaking out against immigration raids. I have, I think, 10 million people saying, I mean...

Analysis

Consumer inflation expectations are rising, indicating potential fragility in consumer sentiment, which could impact market stability. The ongoing volatility in cryptocurrencies and the AI sector highlights the need for investors to focus on underlying financial fundamentals rather than hype.

Smart money should note the disconnect between consumer inflation expectations and market pricing, suggesting a potential mispricing in equities. Additionally, the fragility in consumer sentiment could lead to shifts in spending patterns, affecting sectors reliant on consumer discretionary spending.

15:46
PDT

Noah Lyles sees potential in Athlos to transform track and field.

Noah Lyles Athlos Grand Slam Track Michael Johnson Gabby Thomas GC=F

– Athletes face significant challenges in achieving fair compensation.

– Athlos aims to differentiate itself with instant payouts to athletes.

– Grand Slam Track is facing financial difficulties and athlete complaints.

– The success of Athlos will depend on its ability to innovate and engage audiences.

athlete compensationsports innovationwomen's sports growth

▸ Full transcript

Good answer. What about Papa? You're not an athlete. That's true. That's very true. But this guy is. Noah Lyles is best known for capturing gold in the 100 meters at the 2024 Olympics. How pumped are you to be here? I'm pretty excited. I ain't gonna lie. I love a spectacle. That's what I'm here for. What's your take on Athlos? Like, do you think this is an inflection point for track and field? It's up to Athlos to decide, to be honest. Right now it's kind of an all-star meet with the ability to turn into something. It's gonna be up to them to really push the boundaries of what it can be. How hard is it to get paid what you're worth as a professional athlete? Um, in my sport, very hard. Very hard. I still don't think I get paid what I'm worth. By sunset, the talking's done, the stage is set, and the crowd is primed to see Olympic-level competition. Yo, Kara! I've never been to a track and field meet, but this is really cool. Like to see these athletes up close doing their thing, like these are the fastest women in the world and it is pretty incredible. So I get it, like I get how this could be a thing. Don't ever doubt yourself. There are endless possibilities in this world. Just give yourself a chance. All right.

Analysis

Noah Lyles, the Olympic gold medalist in the 100 meters, expressed excitement about the Athlos event, highlighting its potential to redefine track and field. He emphasized the importance of Athlos pushing boundaries to elevate the sport, while also noting the challenges athletes face in receiving fair compensation for their talents.

The conversation underscores a critical moment for Athlos as it seeks to establish itself in a competitive landscape. The commitment to instant payouts for athletes could differentiate it from competitors like Grand Slam Track, which has struggled with financial issues and athlete dissatisfaction.

15:43
PDT

Athlos offers instant payouts to athletes, enhancing its competitive edge.

Athlos Grand Slam Track Michael Johnson Gabby Thomas Bill Ackman GST Times Square GC=F

– Grand Slam Track struggles with funding and athlete compensation issues.

– Athlos aims to elevate track and field's profile through high-profile events.

– The model of immediate payment could attract more athletes and sponsors.

– Operational efficiency is critical for success in sports ventures.

athlete compensationsports investmentoperational efficiency

▸ Full transcript

And I was like, I want to see that long jump as sexy as the 100 meter dash. And he asked me what's my dream. I told him my dream is street meets. I told him, you know, it would be cool to jump in Times Square. And he was like, Times Square. And I said, Times Square. What does this event mean to you, being not just an athlete here, but an owner? It means everything. I mean, for athletes to listen to me and hear what I have to say. And I'm so, so thankful. I'm so, so blessed for everything that has come my way, including this crown and including 60K in my account. We've already been paid. I haven't even finished cooling down yet and I've been paid. Instant payouts to athletes put some ground between Athlos and Grand Slam Track. GST, which is backed by gold medalist Michael Johnson and a venture firm chaired by Bill Ackman, promised prizes up to $100,000 for winners but limped out of the gate, plagued by low attendance, loss of backers and complaints that prize money was slow in making its way to athletes, including a reported $180,000 owed to Gabby Thomas. Michael Johnson tried to do this with Grand Slam Track. Yeah. You famously tweeted, please pay me. Because I'm serious about that, right? We dedicate so much to sport and we put so much out there. I expect payment. Yeah. And so, Athlos is committed to making that happen instantly. Grand Slam Track has since secured more funding with reports it's planning to reboot the league and has begun to pay money owed to athletes.

Analysis

Athlos is positioning itself as a disruptive force in track and field by offering instant payouts to athletes, contrasting sharply with competitors like Grand Slam Track, which has faced significant operational challenges. The commitment to immediate financial rewards could attract top talent and enhance the overall appeal of the sport, especially in high-visibility locations like Times Square.

The ongoing issues with Grand Slam Track highlight the importance of reliable financial backing and operational efficiency in sports ventures. Athlos's model not only addresses these pain points but also sets a new standard for athlete compensation, potentially reshaping expectations across the industry.

15:41
PDT

Ohanian's Athlos aims to innovate track and field with a Formula One model.

Alexis Ohanian Athlos Tiffany Tara Davis-Woodhall WNBA soccer Formula One Times Square Tara Davis To Randall New York City GC=F

– Women's sports are gaining traction but face leadership and sustainability challenges.

– Revenue streams for Athlos will include broadcast rights, sponsorships, and merchandise.

– The success of Athlos will depend on effective marketing and execution.

– Controversies in women's sports could impact future investments.

women's sports investmentventure capital trends

▸ Full transcript

volleyball team. And we haven't even gotten to Athlos. What's Athlos, you say? The future of track and field, really like a Formula One type model. Building is a Formula One for track and field. Let's build a Formula One of track and field. In case you missed that, Athlos is Ohanian's take on Formula One meets track and field, part racing, part spectacle, and definitive proof that Alexis Ohanian's marketing muscle is everything, everywhere all at once. From a launch party at Tiffany, which made sparkling crowns for the winners, to an electrifying long jump qualifier in Times Square, featuring gold medalist Tara Davis-Woodhall. To Randall's Island in New York City, where all roads lead to the second annual Athos event, a track meet Ohanian wants to take on the road and around the world. Women's sports are having a moment. You know, we're seeing what's happening with soccer, the WNBA is having a moment, but also there's a lot of controversy around these sports. And so there's a question about what happens when you fast-track a league to prominence. How do you have the correct leadership and the correct vision in place to sustain that momentum? Can you explain the various revenue streams, the broadcast rights, the sponsorships, the merch, the ticket sales, the athletes getting a cut? How does it all work together?

Analysis

Alexis Ohanian is launching Athlos, a new venture that aims to revolutionize track and field by adopting a Formula One-style model, blending racing and spectacle. This initiative highlights the growing momentum in women's sports, but raises questions about sustainable leadership and vision in fast-tracked leagues.

Smart investors should note that while Athlos leverages Ohanian's marketing prowess, the success of such ventures hinges on effective revenue generation strategies, including broadcast rights and sponsorships. The current landscape of women's sports presents both opportunities and challenges, necessitating careful navigation of controversies and leadership dynamics.

15:36
PDT

Mid-tier VC firms face significant challenges in the current market.

Alexis Ohanian Y Combinator Initialized Capital Gary Tan Instacart Coinbase 776 Doji Mast VC But Ohanian Olympic Games

– Larger firms continue to attract more capital and dominate late-stage deals.

– 776 aims to succeed by focusing on early-stage investments.

– There is potential for high returns in innovative startups.

– The venture capital landscape is increasingly competitive.

venture capital dynamicsearly-stage investmentmarket competition

▸ Full transcript

But in hindsight, a pittance for a company that today is valued at close to $35 billion. Ohanian went on to become a partner at Y Combinator, where he mentored startups and co-founded Initialized Capital with Gary Tan, a firm that backed companies like Instacart and Coinbase. But Ohanian decided to go it alone, starting his own venture firm 776, named after the date of the first Olympic Games. What's your snapshot on where venture capital is at the moment? It's been a really difficult environment. What's your take? There's a middle of VC firms that are just, as the kids would say, mid, that are probably going to have a really hard time because they can't get into the deals that the biggest and baddest firms can easily get into and have the capital to get into. And I think you're in a business where there are these outsized mega firms, right? the Sequoias, the Andreessen's, but also the sort of newer generations like the Thrive's. And they will continue to get more and more capital as they clearly are, you know, the big dogs with the war chest that can double down on those big winners at the later stage. And at the early stage, there are firms, I like to believe 776 is one of them, that can win against all comers and that have a clear value proposition and want to be the best early. Through 776, Ohanian has backed an eclectic portfolio including companies like Doji, which lets users virtually try on clothes. Mast, a forest restoration company.

Analysis

Ohanian highlights the challenges facing mid-tier venture capital firms, which struggle to compete with larger firms that dominate the market. He emphasizes that while the landscape is tough, his firm 776 aims to carve out a niche by focusing on early-stage investments with a clear value proposition.

The current venture capital environment favors established players with significant capital, but there remains an opportunity for firms like 776 that can identify and support innovative startups. Investors should note the potential for outsized returns from early-stage ventures that can differentiate themselves in a crowded market.

15:34
PDT

Ohanian's early experiences with technology shaped his entrepreneurial journey.

Ohanian Steve Huffman Y Combinator Paul Graham Sam Altman Mark Zuckerberg YC With Sam Altman The Twitch Justin Nimit

– Y Combinator played a crucial role in fostering startup culture.

– The perception of startups has shifted significantly since 2005.

– Innovative ideas can emerge from unexpected places.

– The entrepreneurial spirit remains vital in the tech industry.

startup cultureentrepreneurial spirittech innovation

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I managed to talk to my parents into getting me a computer. It was a big investment. And then an internet connection. Even though they had no idea what I was doing on that computer, I found strangers on the internet willing to help me with learning how to code. That feeling that software provided and then the access to the knowledge freely given by experts to me, a dorky kid in my parents' house, was life-changing. Fast forward to Ohanian's senior year at the University of Virginia, where he and his roommate Steve Huffman pitched tech incubator Y Combinator on a mobile food app. But YC founder Paul Graham encouraged them to work on something else, a startup that could serve as the front page of the internet. You were in the inaugural Y Combinator class. Yeah. 2005 with... 21 years ago, almost 20 years ago. 20 years ago. With Sam Altman. That's a good crew. Steve Huffman, your co-founder at Reddit. That's right. The Twitch guys. Twitch guys Justin Nimit. In 2005, it was an eclectic group of folks in that first YC batch. It was not normal to want to do a startup in 2005. And that was the genius of YC. They realized this opportunity before everyone else did. Let's give, for us, it was $12,000 for two college kids to go build a company. Maybe it could one day be worth billions. You know, Sam is the one exception. I think he had a roadmap to what tech could be in the world. Speaking for myself, I was just happy to not have a boss. I was just happy to, you know, build something that I cared about every day and build something that just seemed fun. This was just one year after Mark Zuckerberg.

Analysis

Ohanian reflects on the transformative power of technology and the early days of Reddit, emphasizing the importance of innovation and the entrepreneurial spirit fostered by Y Combinator. He highlights the shift in perception around startups, noting that in 2005, it was not common to aspire to create a startup, a contrast to today's environment where tech entrepreneurship is mainstream.

Smart money should recognize the potential for new startups to emerge from unconventional ideas, as demonstrated by Ohanian's journey from a mobile food app concept to creating a platform that became the front page of the internet. The evolution of tech incubators like Y Combinator has paved the way for a new generation of entrepreneurs who are willing to take risks and innovate in a rapidly changing landscape.

15:32
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Ohanian co-founded Reddit and is a notable early-stage investor.

Ohanian Reddit Serena Williams Olympia AMA Bay Area

– He has played a significant role in the growth of professional women's sports.

– His public identity fluctuates between being recognized for tech achievements and personal connections.

– Navigating personal branding is crucial in competitive industries.

– Adaptability to emerging trends is key for sustained success.

venture capitalwomen's sportspersonal branding

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For two decades, Ohanian has amassed a fortune betting on ideas others overlook. He co-founded Reddit when social media was in its infancy, found success as an early-stage investor, and has helped launch the recent boom in professional women's sports. But there have been hurdles along the way. There was a messy exit from Reddit, a venture partnership dissolved, and a power struggle over a soccer team. All on top of the pressures of being Mr. Serena Williams and his determination to lean into his role as the father of two young girls. Do you get recognized? Nah. It depends on the context. Like, in the Bay Area, more often, ironically, just because of the whole tech scene thing. You know, certainly there's still folks who are like, hey, Reddit guy. There's obviously plenty of folks who are like, hey, Serena's husband. There's even a few who are like, Olympia's dad, which is wonderful. It's also a little weird; she's eight. She hasn't done anything yet. He's built a reputation on Reddit nostalgia and tech idealism. But in the cutthroat worlds of venture capital and sports, is that enough to get you over the finish line? Are you ready for your AMA? Bring it, yeah. Oh, yeah. We are on our way uptown to meet Alexis. We're going to start our day at a sneaker store.

Analysis

Ohanian's journey reflects the challenges and triumphs of navigating the tech and sports industries, highlighting his dual identity as both a tech entrepreneur and a public figure. His recognition varies by context, revealing the complexities of personal branding in a competitive landscape.

Smart money should note that Ohanian's success is not solely based on nostalgia or past achievements; it also hinges on his ability to adapt and leverage emerging trends, particularly in women's sports. This adaptability may signal opportunities in sectors that are currently undervalued or overlooked by traditional investors.

15:30
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Company expects to reach $15 billion revenue target soon.

Bloomberg Tyler Kendall Wall Street Bloomberg Surveillance Bloomberg Tech New York PRIVATE

– Demand for compute resources is stable and long-term.

– Transformational growth opportunity identified.

– Confidence in revenue growth amidst market volatility.

– Focus on women's sports gaining traction among investors.

long-term growthtech investmentwomen's sports

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By the time when policy in Washington is driving Wall Street, we draw a distinction between the rhetoric and the action, bringing you market-moving guests and original reporting. This is Bloomberg Surveillance. Bringing you up to the minute geopolitical news whenever and wherever it happens, I'm Tyler Kendall in Beijing and this is Bloomberg. In case you missed it on Bloomberg Tech. This is not perishable demand. It's not something that if a window closes, there's not going to be a need for compute. So we are thinking about this in the long game. We are very confident that we are on track to that $15 billion number in a very, very short time, which is quite transformational for the company relative to the size of opportunity and the amount of revenue that we'll deliver. Don't miss Bloomberg Tech, live every weekday. Track and Field takes New York, the fastest women on the planet, a crowd to witness history. An event your capitalists betting that women sports have achieved. Escape velocity.

Analysis

Bloomberg reports a strong confidence in achieving a $15 billion revenue target, indicating a transformational opportunity for the company. The commentary suggests that the demand for compute resources is expected to remain robust, signaling a long-term growth outlook.

Smart money should note that this confidence in revenue growth amidst a stable demand environment could position the company favorably against competitors, especially in sectors reliant on advanced computing capabilities. The emphasis on a long-term strategy suggests a potential shift in investment focus towards companies that can sustain growth beyond immediate market fluctuations.

15:25
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AI will improve diagnostic accuracy in medicine.

Anthropic Oppenheimer Leo Zillard AI The Making Atomic Bomb

– Human interaction in healthcare will become more critical.

– The shift towards AI may create new job categories focused on interpersonal skills.

– Fields like medicine will pivot towards enhanced human-to-human interaction.

– AI's impact on jobs will vary across industries.

AI in healthcarejob transformationhuman interaction

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The human-to-human interaction will never fully go away. The example I often reach for is what will happen in medicine. Today, we hire doctors who are expert diagnosticians. I think AI is going to soon be pretty good at telling you what the suite of options of things that are wrong with you and what tests to run, and you won't need a doctor to do that. But an AI can't physically examine you and say, hey, does it hurt when I press here? They can't have a bedside manner with you that says, like, tell me how you're feeling about this. How are you coping with going through this process? And I think we're going to pivot something like medicine to be much more focused on the interpersonal because the diagnostic tools are going to become much better. But the interpersonal human part, that's not going to change. AI is a technology that touches almost every part of life. So there's more to get into, a lot more. Next time, AI and the future of warfare, anthropic scarily powerful new model mythos and riding the exponential while avoiding dystopia. I understand one of your favorite books is The Making of the Atomic Bomb. That is correct. Do you see parallels between yourself and Oppenheimer? The figure I most identified with was Leo Zillard, who was the one who first had the idea that there could be a chain reaction. Look, my view is we're not gonna get through this with like larger than life personalities or like figures who try and be at the center of everything. In some ways, I actually see Oppenheimer as a failure case, as what sh...

Analysis

AI is poised to transform fields like medicine by enhancing diagnostic capabilities, but the human element in patient care will remain irreplaceable. This shift suggests that while AI can automate many tasks, the demand for interpersonal skills will increase, creating new roles focused on human interaction.

15:23
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70% of Americans fear AI will eliminate jobs.

Anthropic Dario Amade Silicon Valley AI

– Anthropic predicts management, finance, and legal jobs will evolve due to AI.

– The economic 'pie' is expected to expand, creating new job opportunities.

– Concerns about high unemployment could lead to societal unrest.

– AI's rapid advancement may outpace job creation in certain sectors.

AI impact on jobseconomic expansionjob market evolution

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Is it self-cheat marketing? I think it's part of the disease of Silicon Valley. It's been caught up in this social media world of three seconds. And so my message is just definitely not doom is coming. My message is like this is something that we should see coming, that we're worried about, and that we need to actually respond to positively. Beyond the software industry, the potential impact of AI on jobs seems harder to predict. Anthropic has published a paper estimating which fields could make the most use of AI in the near future. If its predictions are right, management, finance, and legal jobs could soon look very different. Which jobs go away? Who gets replaced? And what new jobs are created? So no one knows for sure. Because you know the economy is unpredictable. The thing that we have going for us here is the pie is going to expand a lot. And so because the pie is going to expand a lot, there are probably going to be places where people can go. It's just a matter of finding them fast enough. So play this out for me a little bit. You know, you wake up in five years. You know, what does this country look like? What are those people doing? Because if there's that much unemployment, is that not how revolutions start? Yeah, no. This is the outcome we want to prevent. This is absolutely the outcome we want to prevent. I think there's a few places. None of them are guaranteed. We're not sure, but there's the physical world. We need a lot of more people to...

Analysis

Anthropic's recent insights suggest that AI's impact on jobs will be profound, particularly in management, finance, and legal sectors, potentially reshaping these fields significantly. The expansion of the economic 'pie' due to AI could create new opportunities, but the transition may lead to significant unemployment if not managed properly.

15:21
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AI is automating a significant portion of software engineering tasks.

Anthropic Dario Amade Jensen Huang AI

– Concerns about job displacement are rising, with 70% of Americans fearing AI will eliminate jobs.

– The productivity gains from AI may not be evenly distributed across all workers.

– There is a growing need for societal dialogue on the implications of AI on employment.

– Investors should monitor both the growth of AI technologies and the potential for regulatory pushback.

AI productivityJob displacementRegulatory scrutiny

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AI is making people more productive, but that's the usual hump. You automate 90% of the job? Great, people are 10 times more productive in the other 10%, because they're 10 times more leveraged. But eventually, it gets close to 100%. Now, the sequel to that is, well, then you have to find something else for them to do. Right now, AI makes the software engineers more productive, even though AI writes all the code or almost all the code. But we're already starting to see the beginning of like, you know, there may be some people that it's not making more productive, that it's better for the AI to just do the thing. How does that sit with you? It's very uncomfortable. And I think this is the reason why I chose to go to Anthropic. And I think this is the reason that a lot of people here chose to go here is artificial intelligence is this force that is far bigger than we are. But here we can hopefully make it go a little bit better. Do you feel like it's your job to do something about that or is that someone else's problem? I think it's a thing that we have to talk about. We have to advocate for it. Ultimately, it's up to society to solve it. This is bigger than one company. There has been a lot of pushback on, you know, you're, and I know you've said you're trying to warn people, but that, you know, you're, you know, Jensen Huang said you're conflating tasks with jobs. AI is creating jobs. Anybody who is saying that AI is wiping out jobs is scaring people. Other folks have said this, you know, it's sort of doom marketing. That benefits Anthropic. So I want to be really clear and push back hard against this.

Analysis

AI is significantly enhancing productivity among software engineers, with many tasks now being automated. However, this raises concerns about job displacement, as some roles may become obsolete if AI continues to take over more functions.

The conversation highlights a critical tension in the AI landscape: while AI creates new efficiencies, it also poses a risk of job loss, leading to societal implications that extend beyond individual companies. Investors should be aware of the potential for both growth in AI-related sectors and the backlash against job losses that could influence regulatory responses.

15:19
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70% of Americans believe AI will lead to job losses.

Dario Amade Bloomberg AI GDP Bloomberg Crypto Anne Insou Silicon Valley PRIVATE

– Dario Amade predicts high GDP growth alongside high unemployment.

– Public sentiment may lead to increased regulatory scrutiny of AI.

– Companies in AI may face backlash affecting their operations.

– Economic instability could arise from the disconnect between growth and employment.

AI job impactEconomic growth vs unemployment

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Bloomberg is covering all things crypto, the people, the transactions, and the technology. Bloomberg Crypto, Tuesdays only on Bloomberg. Bringing you up to the news whenever and wherever it happens, I'm Sherri-Anne Insou, and this is Bloomberg. Silicon Valley may have AI fever, but elsewhere, the mood is less upbeat. Seventy percent of Americans think AI will kill jobs, and nearly a third worry theirs will be one of them. Dario Amade has been outspoken about this issue, and some of his predictions don't exactly sound reassuring. I think we could have this very unusual combination of very fast GDP growth and high unemployment, or at least under...

Analysis

Silicon Valley's enthusiasm for AI contrasts sharply with public sentiment, as 70% of Americans fear job losses due to AI advancements. Dario Amade's predictions suggest a troubling scenario of rapid GDP growth coupled with high unemployment, indicating potential economic instability.

Smart money should note the disconnect between technological progress and labor market health, as this could lead to increased regulatory scrutiny and public backlash against AI deployment. The implications for companies heavily invested in AI could be significant, as they may face challenges in public perception and potential legislative hurdles.

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