Chapter 1: What is the main topic discussed in this episode?
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This is Bloomberg Tech. Coming up, the U.S. Commerce Department moves closer to allowing NVIDIA to sell its H200 AI chips to China. Plus, robotic startup Skilled AI just closed a $1.4 billion funding round, tripling its valuation in seven months. We'll discuss with the CEO, Deepak Papak. And Netflix is working to revise its bid for Warner Brothers Discovery, shifting to an all cash offer.
As you see, though, those names in the red and in general, the market on the downside. We still got geopolitical anxiety. We still got earnings coming thick and fast. And we still got an asset 100 off by one and a half percent. Not so in the world of commodities. A search for safety, a bid as the dollar falls.
We see 2.8% higher on the Bitcoin rally, so maybe a bit of catch up with digital gold, where we see spot gold and a new record high. Up 0.7%, copper, all important commodity to our world of AI and data centers, Ed. We're at a new record high on an intraday basis. We're up 0.5%, just coming off of that high on the day, but Ed, it's notable and shift of this year. Right.
Rules and requirements are changing in the world of AI chips. The U.S. Commerce Department out with clarification, which impacts NVIDIA and its H200 that it wants to ship to China, but also impacts AMD as well. AMD has been trading all over the place this morning, at one point notably higher in the session, but NVIDIA markedly down, now trading at its lowest level in around a month.
What are these new rules and what do they mean and why is this significant? Bloomberg Senior Tech Editor Mike Shepard joins us out of D.C., lay out the new rules and requirements for us. But what we're saying in the Bloomberg story is this marks a significant moment for the companies in their efforts to sell into China. Why?
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Chapter 2: What recent changes has the US Commerce Department made regarding Nvidia's H200 chips?
Mike Sheppard, thanks so much. Let's stick with what this means for NVIDIA and more broadly for semiconductors. Beth Kindig's with us, IO Fund Lead Tech Analyst. So is this a $50 billion annual revenue opportunity? Is China that for NVIDIA?
Hey, Caroline. Jensen Wang has stated it's a $50 billion per year annual opportunity. When we left off, it was about $5 billion a quarter. That's $25 billion. So somewhere between $25 billion and $50 billion, which really means that as we look into analyst estimates, they are probably too low.
And that has been something from the very beginning that we have found alpha in, is that analysts are really struggling to wrap their head around the opportunity of NVIDIA. And now here comes back the H200s. And where my firm is very focused is calendar year 2027. If you look at these estimates, they are too low as it is, let alone if China revenue resumes.
What's really interesting, though, is China's response to all of this.
You say it's too low how much might be the revenue for NVIDIA in China. But at the same time, we understand that DeepSeat's driving new models. We're seeing them use what they have in a different method that maybe Alibaba and Baidu don't need those 200,000 that they've already put efforts and offers in for. What do you make of the way in which China is going to pivot to domestic chips?
I would argue that right now, the number I had was about 2 million H200s, and there's only about 700,000 available, which means that, once again, NVIDIA's oversubscribed. I have been asked before, who is the next NVIDIA? Is it something like Huawei? You know, is it Google's TPUs? And the answer is, the next NVIDIA is NVIDIA.
They are extremely hard to disrupt, and that goes for China or even United States competitors.
Beth, taking into account the news story that Mike Shepard just brought us, Jensen Wong told us at CES that the $500 billion forecast for five fiscal quarters, it includes this one for Blackwell Rubin, could get bigger because they could factor in some H200 sales in 26. I know 27 is your year, but have you modelled for that little update that Jensen Wong gave?
Yes, so right now the analyst estimates did actually catch up. They're about 320 billion this calendar year. Let's just go with 2026. I wanna really emphasize that it's next calendar year that we're gonna start to see analyst estimates too low. That is where the alpha is at right now.
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Chapter 3: How will the new export rules affect Nvidia and AMD's sales to China?
And Ed, what was... I've covered AMD very thoroughly and we could get into the specs all day long, but OpenAI giving them that six gigawatt deal is a massive nod. I mean, that is a big nod that AMD is a contender from the leading R&D firm.
Helios AMD's first rack scale solution, but theirs in the world's first two nanometer chip inside, which they talked up in our interview last week. Beth Kindig of IOFund, great to have you back on Bloomberg Tech. Thank you very much. Now coming up, anger grows over sexually explicit, non-consensual AI generated images on X. We have the latest. This is Bloomberg Tech.
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The Supreme Court still hasn't ruled on challenges to President Trump's tariffs, leaving the world to wait until at least next week to learn the fate of his signature economic policy. Remember, my surveillance co-host Anne-Marie Horden joins us right here for more.
So we delay once again, and that timing could be awkward. It could be awkward. So the Supreme Court punts it once again. They do not come out with a decision on whether or not the majority of actually a lot of this terrifying venue we're bringing in into the United States, more than 70 percent, is tethered to the president using AIPA.
Very flexible, a blunt tool that he has used since he came back into office. And why it could be so awkward is because the president will be in Davos next week and he's going to be meeting with global leaders, the world elite. Last year, he joined on remote, really lambasted the global elite.
And at this point, potentially, we could get the decision next Tuesday or Wednesday, because that's when the justices will be meeting again. That's when potentially we can get the decision. And he could potentially be facing a Supreme Court saying you cannot use that legal authority while he's talking to all these countries that he already did trade deals with.
Bloomberg's Anne-Marie Horden, thank you very much. Another top story. The U.S. Senate unanimously passed a bill allowing victims of sexually explicit AI images to sue the creators of that content. The move is in response to growing public anger after Bloomberg reported that Elon Musk's ex has become a top site for generating pictures of people who have been non-consensually undressed by AI.
Musk posted on X that he wasn't aware of any naked, underage images generated by Grok, That's XAI's generative AI tool. Let's bring in Bloomberg's Emily Birnbaum, who covers corporate lobbying government. The Defiance Act confers on American citizens a civil right to sue. Take that information and give the rest of the details because that's the bit that's new here.
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Chapter 4: What are the specific requirements for companies exporting AI chips to China?
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I'm extremely excited, like Brian said, to bring craft to the art of deploying AI-first features and products. So I hope to be able to surprise the world with really beautiful features that they're going to love using every day. That was Airbnb's new CTO, Ahmad Aldale, weighing in on the short-term rental platform's AI efforts.
Let's get more with our own Latterly Lung, who spoke with Aldale and Airbnb CEO, Brian Chesky. I think an interesting way to start is what is Airbnb trying to solve for here by bringing in a new CTO? What is it they want to change about the platform?
So after a few years of sort of working on the plumbing of Airbnb's app, like revamping the app, they're ready to take it forward, adding AI across the app, including customer service, which they did last year. And now they're going to do more with search as well, like letting people discover listings and also cross-market some of the new services like tours and experiences going forward.
And I think you sort of put that exact question to Brian Chesky himself. Let's just take a listen to how he responded as to why they're pivoting and focusing all in on AI at this moment. Take a listen. We are at the beginning of this incredibly exciting technological transformation with AI. It's going to be a journey.
And I couldn't be more excited about Ahmed because he's one of the leading AI experts in the world, but he also brings a sense of craft to Airbnb, something we're really known for. And I think what you're going to see in Airbnb is not only AI search, but a very personalized AI experience where I think we're going to bring great design sensibility into the experience of Airbnb.
Let's talk a little bit about how they're talking of the narrative of change because they've said farewell to the previous CTO who's there for about seven years and brought in this expert from Meta. So who do they say farewell to and why is this Meta executive the best placed?
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