Chapter 1: What is the main topic discussed in this episode?
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This is Bloomberg Tech. Coming up, TSMC posts a strong forecast and results lifting peers, a sign that demand related to AI remains robust. This is OpenAI focuses on its infrastructure, striking a deal with Cerebras for compute and hunting for hardware partners across data centers and consumer devices.
And the mayor of New York City is suing a delivery tech company, accusing it of breaking local worker protection laws. We'll get into that in a moment. But first, we check in on where the markets are. And actually, we're managing to rally in the NASDAQ 100 after two days of losses.
It's all about that TSMC headline that you were just discussing, Ed, and the rejuvenation in maybe wading back into these key AI names. NVIDIA, indeed, one of the key points rides is higher. Bitcoin, though, not feeling much of the love. There's also a delay to a key Senate markup on the market structure bill. So that's putting some pressure on the ecosystem more generally. But watch for crypto.
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Chapter 2: What were TSMC's earnings and forecast indicating about AI demand?
NVIDIA is just buying chips from them. As is Apple. It makes its chips via TSMC, one of its biggest revenue drivers, and is also trying to steer us as to where the memory story goes as well. Peter, how did you hear about whether or not that's going to impact high-end phones at least? Yeah, you touched on a very important point.
There has been a shortage of memory chips, especially for some of these consumer electronics, smartphones and the like. That's partly because there's so much demand for the AI to pair the memory chips with AI that that's squeezing up a lot of the capacity that's out there from Samsung and SK Hynix and Micron in particular.
Chapter 3: How is OpenAI expanding its hardware partnerships?
So that's driving up prices. CC Wei was asked about that. He said that he thinks it's going to be manageable going forward. That is a big issue, though, especially for smartphones and consumer electronics. Peter, a lead-edge chip fab is a fixed cost, $15 to $25 billion. It takes several years to come online, and you can't know what the demand will be when it does come online, right?
No one has a crystal ball. But a part of this is geopolitics. TSMC is at the heart of trade talks between the U.S. and Taiwan and is under pressure to put more capacity in this country, the United States.
Chapter 4: What legal actions is NYC Mayor taking against delivery tech companies?
You're touching on a very important point. Maybe let's start with the company challenge here. Historically, TSMC has done all of its important manufacturing in Taiwan. It's easier. It's a very contained location where their engineers can share intelligence across the country, across the island. And now they're trying to also build in the United States, and they're building more and more fabs.
So right now, the U.S. and Taiwanese officials are talking about a trade deal that would lower some of the tariffs for Taiwanese goods going into the United States. As part of that deal, we understand that TSMC will probably step up its investments in the United States. They're talking about adding four or five fabs on top of the existing ones that they already plan to build.
So TSMC has said we don't want to do our most cutting-edge chips in the United States, but they are increasing capacity there. That'll be part of this deal we anticipate that could come out publicly over the next week or so. Bloomberg's Peter Elstrom, thanks so much for the breakdown. Let's turn our attention to New York City Mayor now, Zoran Mamdani.
He's keeping his promise on focusing on better working conditions and pay for food delivery drivers. Now, the city is accusing DoorDash and Uber of depriving workers of more than $550 million in tips. due to changes in their apps.
But NYC is even looking to shut down a company called Motoclick, a behind-the-scenes delivery tech company that works with these big platforms, accusing it of breaking local worker protection laws. Remax Miles Miller has the latest. And Motoclick is the focus for you. What's it been up to? Yeah.
According to the mayor's office, Monoclick has not been paying the required minimum wage rate and has been deducting canceled and refund orders directly from these workers paycheck. The city filing a lawsuit in a state Supreme Court here in New York City and say that these practices left.
some of these couriers owing money to the company, and they say that they work with Uber and Grubhub and DoorDash. What is central here is that this is the new focus of the new mayor, primarily focused on the gig economy and food and delivery tech, and really making sure that these new laws that protect these workers, whether it be wages or
whether it be other fairness issues, are top of mind and front and center. That is what he is announcing today. And he is putting the onus on these companies doing really an education campaign to make sure that these companies know how they should protect their workers. What we know is that this company in particular, Motoclick, integrates their point of service program or
point-of-sale programs to generate orders from photographs of receipts, really the last mile of that delivery until it gets to your home. We know that this is really a focus of the mayor's office because he's appointed a former head of the enforcement division of the FTC, as well as Julie Hsu, the former labor commissioner, and he's been labor secretary for a President Biden.
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Chapter 5: What insights do analysts provide regarding TSMC's market impact?
The main thing the audience needs to know is that come January 26th, in that city at least, there is new laws. It's codified the set of rules that protect the issue that Miles has just been outlining. Yeah, Motoclick is one issue and quite a significant step that even a city would look to shut a company down.
But also what's been reported on is the fact that DoorDash and Uber made changes to their own apps. And when you pay a tip, many would say it's rational to pay the tip after the service. But it's meant that those tips have come way down for some of these drivers. And they're being accused of costing drivers about $550 million in tips.
It's something that they're going to have to navigate and narrate as the story continues. We asked, what would New York's new mayor do with the tech industry? This is the sort of early play of what his intentions are. Now, coming up on Bloomberg Tech, OpenAI ramps up its real-world ambitions, looking to shore up US hardware supply chains for future devices. We have more on that next.
This is Bloomberg Tech.
Chapter 6: How does TSMC's capital expenditure affect the chip industry?
OpenAI, well, it's looking to bolster its U.S. hardware supply chain. Its company looks to find partners for its push into consumer devices, into robotics, and also, of course, into data centers. And the ChatGP team maker has put out requests for proposals from various component companies in the United States. Bloomberg's Seth Feigman, who covers OpenAI, joins us some more.
This is about a local supply chain, but this is all about signaling where the future revenue is going to be coming from for the company, right?
It's true. Some of this is in keeping with the data center expansion that we've, of course, talked about before, but the idea of getting into robotics and supply chains for that is a little bit of a new development here. We know that OpenAI has made some key hires on the robotics front.
They haven't really said too much about it in recent months, and this is the first real signal in a while that they're serious about it and serious about focusing manufacturing for it in the U.S. Now, I will say what's interesting is there's the hardware element of it, but also they're focusing a lot on the software and building the brains behind these AI robots.
Are we looking for clues, Seth, of what a consumer-facing device looks like from OpenAI? What form factor is? As far as I can tell, we're still a little bit in the dark there.
I think we are, and to be honest, it feels like OpenAI might also still be a little bit in the dark here. I mean, the last remarks that we heard from Jonny Ives since his company was acquired by them is that there's a dozen or more different design possibilities here for it, and he's almost overwhelmed by the different possibilities here.
But it seems like it might be a subtle device, and I think most folks are expecting something in the next year.
Bloomberg's Seth Figerman, who's our AI editor leading the team there. Thank you so much. Let's stay with OpenAI. The company has signed a multi-year hardware deal with Cerebrus, giving OpenAI access to 750 megawatts of computing power. According to sources, the agreement is valued at more than $10 billion and would expand OpenAI's efforts in AI infrastructure build-out.
Let's get to Bloomberg's senior tech editor, Mike Shepard. Mike, what do we need to know?
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