More Chip Curbs on China and Joby Shares Pop

From markhard of where Innovation, Money and Power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

I met Ludlow in San Francisco. Caroline hies off today. This is Bloomberg Technology coming up on the program in video. Takes a hit as the US plans more AI chip

Expand test flights here in the US.

We have the exclusive conversation with the CEO later this hour talks about the chip sector. The Wall Street Journal reporting that the US is considering tightening curbs on the export of chips to China to increase lower power chips. This is in the context of AI, of course, of which Nvidia has been the real leader in this space. It is off by nine tens to one percent. Other players will lower AMD actually now higher half a percentage point.

Let's find out what's going on. Let's understand the.

Impact of this industry with Bloomberg Intelligence analysts Paula Penkell.

So that's the reporting.

The US is going to tighten the restrictions to include sort of lower powered chips that Nvidia have moved to introduce to get around the original curbs.

To your mind, what is the impact.

Here, Well, at this stage, I think the impact on Nvidia initially is roughly five billion dollars on their top line which could potentially go away. That is their exposure to China, which is twenty percent of their roughly twenty eight billion of revenues expected for twenty twenty three. But on a broader scale, look, AI is expect AI chips. AI itself is expected to grow roughly twentyfold by twenty thirty.

What's so interesting about this story is we're not talking about H one hundred, the sort of cutting edge of GPU. What Nvidia did was design chips that fell below the threshold to require US license to export to China. But it brings into focus China is a consumer, right Paula talk to us about broadly the semiconductor industry and how much US design chip is going into products assembled there or into Chinese products.

Well, first of all, I mean in terms of assembly, if you look at Apple, I mean they're trying to expand to India with their assembly operations. But the reality is China is a significant market. As I said before testing assembly, it's the leader in testine assembly.

It does not make the AD it.

Has very low exposure to the advanced chips, but again it's a growing market and companies are sort of, you know, in the middle of the US and China's trade tensions because they want the exposure they want to partake in that growth in the China market.

Another chip name here in the US that's confronting the China issue is Micron reporting after the bell, what are you expecting from Micron and how they communicate their handling of this situation.

Yes, well, Micron already announced their double digit revenue hit by the sanction most recent sanctions implemented by the US government or by the China government, and so I expect that will not impact this particular quarter. But this quarter is going to be really bad just because you've had you know, sluggish demand and PC and PCs and computers, and you have you know, really low and depressed Reacher prices. But many believe that this could be a trough for

We're talking d ram We're talking nan Bloomberg Intelligence. Is Paula Penkell saying it's gonna be bad after the bell twenty four hours time, tune in Bloomberg Technology, and I guess we will find out. Paula Penkell, BI, thank you so much. Now in today's Big Take, Bloomberg Big Take. China's tech sector has a new obsession competing with the US and its titans like Google Microsoft in the battle for dominance in artificial intelligence. Bloomberg's Jan Jang has more from Hong Kong.

China's tech sector has a new obsession competing with US giants in the global AI race.

Fifteen billion dollars.

That's amount China is expect to spend on AI this year. Big tech players in China from Baydo, Alba, and System have launched their own large language models in the span of just several months being in their entrepreneurs one shall Trend, the founder of search engine Sogo, and maje one co founder one we one are also powering money into their

Bloomberg's Jane Jung with the Bloomberg Big Take, thank you for that reporting. Sticking with artificial intelligence, another story, we're watching black Rock joining the AI mania on the promise of productivity gains from the technology. The firm just introduced a bullish call on AI following the rally that's already driven the best ever first half of the year for the Nasdaq one hundred index. It picked out semiconductor makers companies with vast sets of data or high potential for

The company cut jobs.

At Mapping service Ways, the tech giants' latest move to trim its operations amid a drive for efficiency in Silicon Valley. Some positions focused on advertising it ways, and they were eliminated after unit began transitioning to using Google's advertising technology.

A Google spokesperson told us on Tuesday, this is Bloomberg.

Let's head over to Toronto where the Techmedia Collision Conference is underway, and surprise, surprise, AI is top of mind. John Erlickman on standby for us with a very special guest, a leader in the AI field, jump.

Ed, great to be with you.

Yes, AI is all the rage here in Toronto at the Collision conference, and obviously a lot of people are trying to figure out where we go from here now. For Google Deep Mind, they have been thinking about the promise of AI for more than a decade. Colin Murdoch is the chief business officer of Google Deep Mind, and he's here at Collision it joins us.

Now, Colin, thanks very much for joining us.

Hey you wilcome. It's fantastic to be here.

In fact, great a being Canada in Toronso, my first time to Toronto.

Well it's a huge gathering for a city like Toronto to have thirty six thousand people come here. And as Ed was alluding to, the focus is AI AI AI. When you come to an event like this, what's the message that you're trying to bring to the table.

Well, you know, I think it is all about AI. In the last six to twelve months, I think the real world has really working out with the potential, the potential for huge impact in the world. So the message I'm trying to get out there is that I think AI can have huge impact on some of the society's biggest challenges.

Maybe explain that in a greater degree because the Deep Mind team is working on the research possibility we tease before the break, whether it's dealing with climate change or cancer.

How So that is a great example.

So let's take climate change, a huge issue for society. What I think AI can have a huge benefit. One example is we're using AIS can take weather much more accurate weather traditions to help communities and companies around the world adapt to it increasingly extreme weather and the devastating impact that can have. Another example actually is our digital society.

If we can do that, then we've.

Almost got a limitless source of energy, which I think will have a profound impact.

On so sets Deep Mind is for those who were curious about Google's curiosity on AI. We've known that for a long time. I mentioned but going back to two thousand and ten. But because Alphabet has become a AI first company. Sometimes there is some confusion about what Google deep Mind relationship is to the parent company.

How does that work when you're focused on research?

I mean, why is it beneficial to have this research arm of the company.

So our particular focus in Google deemlind is staying at the forefront of AI research and then translating that into the products across the alphabet gury and it's really valuables to gather together a like minded people so you can

So you would be in a good position to understand the opportunities and the risks of fast changing technology. I think one of the biggest questions for your parent company or any big.

Technology company betting on AA right now is are we moving too quickly?

What do you think about the speed of adoption in AI today? Considering the deep mine's been thinking about this for more than a decade.

While zeeming out.

You're absolutely right, it's incredibly important that we pawn a responsivey. We tite careful steps as we developing mistology. It's an extremely powerful technology, so we have to take an exceptional caun.

So we've been thinking about this from.

The beginning, even from the beginning of DEMI report. It pawning responsively. We have to make sure that there's we do our we're taking the right mitigation steps, we're getting the right reviews, and we're involving.

The right people every step of the way.

On the regulatory front, because that's another big issue and it has been this week. We actually just spoke to the Innovation Minister here in Canada who has legislation on the table to try to at least have some regulation around AI.

And I wonder how you think about the.

Right regulation or working with different governments on regulation.

This is aursox up pick. We're spending a lot of time working on thinking about across the glibe.

Actually, we want to make sure we're sharing our insights so we can really.

Help regulators think about the most effects of regulation.

And by that I mean regulation that I think.

Allows innovation allows these amazing great fears, but importantly uside mitigates the potential.

Racis the really important talk.

So do you feel then, because you're working on.

Some very profound potential change for society, then sometimes we get caught up in the what ifs because they'll seem pretty worrisome as well.

Yeah, you know, it is really important to make sure we are addressing the risks and making sure we're building a positive future for everyone. How don't we have to remember? But it's to a point that in y end, this is an incredibly powerful tendrigy I think is going to do an immense good for society. I'm not going to be part of them buy as well. We can't lose that. In the discussion stuss important.

So you mentioned that the research you do can ultimately not just be shared with partners and governments, but can be implemented into the different products that the parent company is focused on.

Right now, how does that work? What's the time for?

When do you know that the research you've done is really worth passing on and sharing with the rest of the team and ultimately might be something consumers or companies conceived.

Well, let me give you an example of health, which I think is an incredible example proteins and the building blocks of us that will keeping you and I working right now. And we've developed some technology that understands proteins at a much deeper level, which has been used by

And we're leading forms of liver cancer.

That's an amazing example of how we've taken AI that was kind of being developed in the lab and we've brought it and we've worked with a partner here.

In Toronto to do something which is really profound and powerful.

And are you finding talent here as well for your team?

We are based here in Toronto, actually Anna Montreal, and you're on a great team members here in Canada and I love I love the country.

All right, Oh, thanks very much for them.

We're an actually business officer of Google Deep Mind and I'll send it back.

To you in the studio.

Yeah, fascinating AI developed in the lab and then taken out to commercialize with partners. Colin Murdock, Google Deep Mind chief business officer, and of course thenn's John Erlikman out there in Toronto. Thanks to you both, time for talking tech. First up, Samsung amping up its chip foundry business by advancing its manufacturing techniques. The South Korean company said it we'll introduce a two nanometer production for mobile phone parts

As we know ever, since FTX filed for bankruptcy last year.

So usually a pretty reasonable question is why a crypto exchange would invest money in an AI startup in the first place.

That's a great question if you look at the portfolio that Sam backman Free has built up before his firm collapse. They actually invested in a variety of startups across different sectors. We reported that mining is a sector that they had that big in, and then AI is another sector that they have also made multiple stakes. And of course they

We had Amy wu On, formerly the head of FTX Adventures quite recently. She's now at Menlo focused more on the consumer and gaming side, but it reminded us that FTX was deploying capital investing in technologies from a bigger picture perspective with anthropic what do we think is going to happen next? I mean, they've put this on hold, but is the long term goal to still divest or sell off.

The steak, So that's yet to be seen. We note that FTX has also been looking into potentially restarting the international exchange, so there are multiple moving parts here, and we've reported that there are parties that are interested in beating for a potential restart of the FTX exchange. So going back to antheropic steak. I don't think the story ends here, and I'm sure there will be more actions on how to deal with that particular steak.

Bloombas Yang will keep us up to date with the latest Bloomberg reporting. Welcome back to Bloomberg Technology, Ed Ludlow here in San Francisco's Check the markets Quickly, Technology is a part of the story, and as that one hundred modestly higher two tens and one percent some outperformance. We had all the great leaders of world central banks in

We talked about this earlier in Bloomberg Technology.

Right the Wall Street, your journal reports that the US is going to tighten restrictions on the export of chips to China, that impacting. In video, one of the names moving to the downside was soft by seven tens percent on the socks and a quick check on bitcoin, one of our favorite risk assets. We are now sort of heading lower one percent lower on bitcoin thirty three hundred US dollars per token we had since buoyancy in recent days tied to the momentum around ETFs A filing from

We're up forty percent right now.

We are very close to the biggest gain on record, depending on where we close. We need to find out why. So joining us for an exclusive interview is Joby's CEO, Joe Ben Bevett, down in Central Cow Marina, California. Joe Ben, the news you've received FAA certification to test air test fly. Basically, what are units and production units flying off the production line? How big a moment is this for your company?

First, thank you so much, good morning, wonderful to be with you. This is a huge moment. The Jobe team has been working really, really hard, and we've been flying prototypes of our aircraft since twenty seventeen, full scale prototypes. But this is the first time that an aircraft that's come off our pilot manufacturing line has received certification from the FA to begin flight test.

And this is a pivotal moment.

As you can see, I'm standing here at our pilot manufacturing line, and not only do we have the first one coming off the line, but we've gotten multiple coming along behind us.

Okay, so give me some numbers. How many do you think you will build in the remainder of twenty twenty three and how many in twenty twenty four.

So this we're still in the carawl phase of this journey. This pilot manufacturing line here has the potential to build a few tens of aircraft per year. So this is just a first step of a really exciting journey. Another piece that we're announcing today is that President and CEO of Toyda North America Tedagawa, is joining the Jobe Board. And this is Toyda joined as our largest external investor in twenty nineteen, and they've been continuing to lean in.

The curve for me of this of this production line, we're calling it a pilot line. When does I come sort of serial production, you know, saleable units beyond your existing deal with the military, which we'll get to in a moment.

Yeah. So we are working with states across the country UH to put UH and UH support packages together and we're going to be selecting a site for our phase one manufacturing, which will give us the capacity to build hundreds of aircraft per year UH in in the next few months, and so that will will mark a really important UH step as we scale. But even before we can go into volume production, we need certification with the FA.

This new technology.

Joe Ben, every time an executive like you comes in the show, I go to Twitter and I say, jobin's coming on the show, what would you ask? And lots of people have a very reasonable question for the average Twitter user, when will they be able to get into a job aircraft that has nothing to do with the military that kind of meets your goals of a broader flying taxi service.

So our target is to launch our commercial service here in the US in twenty twenty five. We have an amazing partnership with the team at Delta Airlines and that recently I've had the opportunity to go to JFK, LaGuardia and LAX where Delta has invested more than ten billion

Yes, Joe Ben, the stocks up forty What do you make of that?

Stocks go up, stocks go down. The team here at JOBY is lazer focused on is doing what we do best, which is delivering. That's exactly what we're doing today. We

So the deliveries to the military the Air Force starting twenty twenty four. A lot of questions I get for you are about business model. You think about New York City as an example, you can take a helicopter ride for around two hundred dollars. How are you going to price a service in the future. How do you get competitive with basically what already exists, which is a helicopter with the pilot.

Yeah. So our goal is to actually be competitive with the cost of ground transportation, but to deliver you to your destination multiple times faster, five times faster, and with a dramatically better experience. Being able to see these beautiful cities like New York from the area is an amazing way to start your day.

Job.

Aviation Founder CEO joe Ven Bevitt, thank you so much for your time. That stock up almost thought for percent in this morning session following that news.

Thank you, Thank you so much. Wonderful to see you now coming out.

We're talking about a new product using AI to travel, this time with Priceline CEO Bret Keller.

This is Bloomberg Technology.

Price Line unveiling a new product using AI to help make summer travel plans easier. The online travel agency launching Trip Intelligence, a suite with over forty new booking tools, one of which includes Penny price Lines proprietary genitive AI chatbot. Let's bring in Priceline CEO Bret Keller for more. Brett, tell me about Penny. What's it like using Penny?

Sure?

Well, Penny is a very specific and trained chat model based on the hotel booking experience. So as you come into price line and you begin sharping for a hotel, we have built a tool which will help you to answer all the types of questions you might have about your booking experience. You know, if you want to know something about the hotel and what's nearby, right if you're looking for a walking path or running path, vegan food.

We're showing images on the screen of how Penny works and the experience of using it. I guess the next question is why why did you feel you needed to do this?

Well, you know, customers always have more and more questions about travel and things are become more complex.

Take a trip overseas right.

Consumers are more and more looking to travel to new locations, places they've never been before. They don't know anything about the area, they don't know anything about the hotel that they're staying in. And this gives a consumer much broader access to information real time to answer questions. And so that's the primary motivation is to give the consumer more intel on their stay and answer the questions that are specific and unique to them. If you're traveling with a family,

Yeah, Brad, what kind of advantage to you feel this gives you? It is right around the corner from summer, but a challenging macro environment. You think about Airbnb and what they're doing to improve the UX experience on their platform, both app and website, the integration of AI. It's all about winning eyeballs and converting them into bookings. Do you think that Penny is going to help you do that?

We do think it will help us to do that, along with all of the other features we've just release and many more to come on our new tech platform. We've been in the hotel accommodation's business for twenty five years. We invented many of the innovative ways for people to save money on this platform. This new technology laid on top of that access to really great pricing now just makes it, I think, more compelling, especially in the hotel accommodation space, which is one of our specialties.

Price Line CEO Brett Keller talking about Penny, the new generative AI tool.

Thank you so much for your time.

Microsoft CEO sat in Adela during court today to defend the company's proposed sixty nine billion dollar takeover of Activision Blizzard against an attempt by federal regulators to block the deal. Bloomberg's Malathey Nayak joins us from the courtroom.

Malathi, what's the latest?

So it is it's a big deal for Microsoft. They've brought in Activision CEO Bobby Kotik, who was just at the stand a few minutes ago when I stepped out of the courtroom and set in Adella will be testifying in the afternoon. So they've brought their executives to come out here and defend this deal and try to push back against the FTC's argument that the deal isn't good for a competition in the console gaming market.

How key is this case?

Is this a in everything or nothing situation where if the companies can't convince the.

Court, the FTC will be able to block the deal.

So the FTC currently is seeking an injunction that would block the deal while it's legal challenge to the deal is spending. So this would be sort of the first step, and this would actually get in the way of the July eighteenth closure deadline that the deal has. So Microsoft really wants to get this done as soon as possible. They need to win this first hurdle, which basically would allow them to at least go ahead and close the

Bloomberg's Malasti Nayak, thank you so much from the courtroom in San Francisco.

Let's stick with gaming video games.

Keep a conversation going with a wider look at the e sports landscape with Evil Genius is CEO Nicola point Jamison, who's joining me from New York. Everyone that watches Boomberg Technology knows we go big on gaming, but esports is at a really interesting moment. Talk to me about how you see your industry right now, the health of it.

Yes, thanks for having me.

Esports is at a really interesting intersection right now. As we've always been a digital product that bridges and straddles sports and entertainment, but now with more eyes on advanced technologies like AI and sports analytics and all the deriatives of such, we're really seeing the professionalization as well as the awareness of esports as a product at a rate

It's also interesting to talk about the content side of this story. And when you think about evil geniuses, you guys, you think about YouTube or Twitch, A lot of what you're doing is going out there for free. So how are you going to make some money and take that free content and turn it into merchandising or are the ways of building revenue streams?

Yes, this is the existential rub of esports organizations like ourselves, where we are content machines, billions of minutes a year of produced content, whether it's in game, athletics, competition moments too, behind the scenes social engagement. And we know we have the eyes and hearts of especially gen Z and Gen Alpha audiences. EG on its own can eclipse over twenty

To a team.

And so if you continue to look at how brands are aware that the gaming content and community is valuable and their purchasing power is increasing. We're hoping the competition and thus the media rights values will continue to increase as time goes on.

We're just showing some interesting data about your userbase, your audience sixty four percent aged eighteen to thirty four. So take that demographic. Who are you competing with other players in the space or other forms of content? Like are you also competing directly with Twitch?

As an example, I wouldn't say we're direct competitors of a Twitch or you Tube because we leverage those platforms to engage and reach in our community. Esports organizations in particular, we're more of the platform. Think of us if you're very unfamiliar as the actual athletic team that creates the competitive moments. But the hub and spoke model of our community,

Nicole, how difficult is your day job right now? Think about the news in April about the roster changes. I think you guys have done a few rounds of layoffs this year as well.

How's running that business?

Yes, sports continuing from the sports monetization model, transforming into more of that entertainment. We just like many other businesses in tech and advertising, the macroeconomic climate earlier this year was hard. As traditional sponsorship sales as much of our current revenue stream. It required us to be really judicious and pivot on our feet quickly around what is valuable inventory, what is the valuable market rate of talent? And much of what we had to do was course correct to

Nicole quickly, what is the one thing to your mind that's going to put some energy back.

Into esports, that's going to put sorry some energy, some momentum back into this industry.

Back into the industry.

I would say there's so much energy in esports right now when you look at TikTok, where forty billion views of gaming related content month over month, consistently in person arenas selling out for events. Last year, League of Legends had a North American road show culminating and Chase Center in San Francisco selling out. I think what will continue to drive energy is more multi generational audiences being aware of this is the power of gaming, and gaming is here to stay.

Evil genius is CEO Nicole the point Jamison, So good to catch up, Thank you, thank you for your time.

All right, So that.

Does it to this edition of Bloomberg Technology. A lot to recap. Gosh, it's been a bus week so far. Don't forget the podcast. Then Apple, Spotify, iHeart, and of course on all of the Bloomberg platforms. Some really big moves discussed during this show. Keep an eye on Joby on track potentially for its biggest jump on record, all things flying Taxi, a story we're going to keep following this week is, of course, what's happening in the chip sector.