U.S.-China Tech Tensions: NVIDIA's Market Impact and Investigations

NVIDIA faces scrutiny from China amid escalating tech tensions, impacting its market value and global operations.

### Escalating Tech Tensions: NVIDIA's Probe and Quantum Computing Advances
* 💥 "China opens an antitrust investigation into NVIDIA, impacting its market cap by **$80 billion**, amidst rising tensions in the **global tech war**."
* 📉 NVIDIA's market capitalization has **decreased by 3%**, reflecting concerns over a deal made in 2020 and the ongoing **U.S.-China tech conflict**.
* 🔍 The probe focuses on NVIDIA's acquisition of Mellanox, which included conditions for **providing Chinese customers access to specific information**.
* ⚖ The U.S. Justice Department is also investigating NVIDIA for potential legal violations, highlighting the **broader implications of U.S.-China relations** on tech companies.
* 🌐 Meanwhile, Alphabet has unveiled advancements in quantum computing, showcasing a new chip that **significantly reduces error rates** and **enhances computational speed**.
* ⏱ This new quantum chip reportedly performs computations in **five minutes** that would take classical supercomputers **10 trillion years**, indicating a **major leap forward**.
* 💡 Quantum computing is set to revolutionize various fields, including healthcare and energy, by **solving complex problems that involve quantum phenomena**.
* 📈 The tech landscape is shifting, as companies are increasingly integrating **AI and quantum technologies**, demonstrating the potential for **transformative advancements** in the industry.

> FROM THE HEART OF
INNOVATION, MONEY AND POWER COLLIDE. THIS IS "BLOOMBERG TECHNOLOGY". CAROLINE:
THIS IS "BLOOMBERG TECHNOLOGY." CHINA OPENS NVIDIA PROBE AS THE
GLOBAL TECH WAR ESCALATES.

WE GET THE MARKET IMPACT.
ALPHABET REVEALS NEW DETAILS ON ITS PROGRAM IN MADE IN QUANTUM
COMPUTING. FIRST WE CHECK WITH NVIDIA,
SHAVING OFF $80 BILLION IN MARKET CAPITALIZATION FOR THE
MOST VALUABLE COMPANY LISTED IN

THE UNITED STATES, DOWN 3%.
WORRIES ABOUT AN INVESTIGATION FOCUS ON CHINA AND
A DEAL IT MADE IN 2020, BUT IT FITS INTO THE CONTEXT OF GLOBAL
TIT-FOR-TAT BETWEEN THE U.S.

AND CHINA.
GOING INTO THIS INVESTIGATION REGARDING A DEAL MADE YEARS AGO.
>> THIS WAS A BIT OF A SURPRISE. WE GOT THIS LAST NIGHT FROM
STATE TELEVISION IN CHINA WHERE CCTV SAID THE AGENCY HAS
OPENED A PROBE INTO NVIDIA WITH

AN ANTITRUST/MONOPOLIES INVESTIGATION INTO
PARTICULAR BEHAVIOR. IT IS A DEAL THEY DID FOUR
YEARS AGO TO BUY A COMPANY CALLED MELANOX IN ISRAEL THAT MAKES
NETWORKING EQUIPMENT. CHINA HAD TO APPROVE IT, AND
THEY DID IN 2020, BUT THEY DID

SO WITH SEVEN DIFFERENT CONDITIONS
ABOUT NVIDIA’S BEHAVIOR, INCLUDING GIVING CUSTOMERS IN
CHINA ACCESS TO INFORMATION FROM MELANOX AND NVIDIA’S OWN CHIPS.
IT IS NOT CLEAR WHAT THEY WILL DIG INTO, BUT AS YOU NOTED,
NVIDIA HAS BEEN AT THE HEART OF

THE U.S.-CHINA CONFLICT OVER TECHNOLOGY. WASHINGTON HAS CUT OFF NVIDIA’S ABILITY TO SELL ITS MOST ADVANCED CHIPS IN CHINA; THAT IS THE HEART OF THE CONFLICT. CAROLINE: THE JUSTICE DEPARTMENT IS ALSO

LOOKING FOR INFORMATION ON NVIDIA AND VIOLATING LAWS.  It's not the only country, but it sets the context for what other companies are experiencing because of the difficulty with its relationship in China. IT DOES SEEM TO BE AROUND THE

CHINA TRYING TO ONE-UP AND RESPOND TO THE U.S. LIMITATIONS ON TECHNOLOGY INTO ITS COUNTRY. >> AS YOU SAY, THE ANTITRUST CONCERNS AROUND NVIDIA ARE QUITE BROAD. IT IS NOT JUST CHINA; THE

UNITED STATES AND FRANCE ARE LOOKING AT IT BECAUSE THEY HAVE ESSENTIALLY A 100% SHARE, ALMOST, IN THE MOST ADVANCED CHIPS TO TRAIN A.I. MODELS. BUT THERE IS THIS BROADER TRADE

CONFLICT THAT CREATES PROBLEMS FOR COMPANIES BETWEEN THE U.S. AND CHINA. NVIDIA SELLS A LOT OF CHIPS INTO CHINA, BUT TWO YEARS AGO WE GOT WORD WASHINGTON WAS GOING

TO CUT OFF THEIR ABILITY TO SELL THE MOST HIGH-END AI CHIPS. THOSE RESTRICTIONS HAVE BEEN TIGHTENED, SO NVIDIA SUFFERED BECAUSE OF THAT, BUT IT'S CLIP EQUIPMENT MAKERS, RESTRICTED ASML IN EUROPE. SO, I THINK  [inaudible] TOOK A

NUMBER OF ACTIONS, SEEING THEM RETALIATE IN WAYS WHERE THEY CUT OFF A COUPLE OF MINERALS THAT ARE IMPORTANT TO THE CHIP INDUSTRY AND THE DEFENSE INDUSTRY IN PARTICULAR: GALLIUM

AND GERMANIUM. SO THEY ARE SHOWING THEY HAVE CARDS TO PLAY. CAROLINE: THANK YOU SO MUCH. LET'S STICK WITH CHINA AND THE U.S. WE HAVE PRESIDENT-ELECT TRUMP SAYING HE HAD AN EXCHANGE WITH

THE CHINESE LEADER IN RECENT DAYS. THE FIRST CLEAR INDICATION OF DIRECT CONTACT BETWEEN THE TWO SINCE HIS RE-ELECTION. HERE HE IS WITH "MEET THE PRESS." >> I HAD AN AGREEMENT WITH PRESIDENT XI, AND WE WERE GOING

TO GIVE THE DEATH PENALTY TO ANYBODY SENDING DRUGS INTO THE UNITED STATES. CAROLINE: LET'S GET OUT TO MIKE SHEPHERD IN WASHINGTON. THAT WAS A NOTABLE CONVERSATION

HAS ALREADY STARTED, AND THE ENVIRONMENT WHERE WE SEE CHINA HAVING TO RESPOND TO ITS OWN ECONOMIC ISSUES AS THEY HAVE TO LOOK TO WHAT TRUMP MIGHT DO TO THEIR ECONOMY COME 2025.

>> IT HIGHLIGHTS THE UNCERTAINTY AROUND THE U.S.-CHINA RELATIONSHIP AS WE ENTER THIS CHANGE IN WASHINGTON. ON THE ONE HAND, TRUMP COMES IN WITH A VERY MUCH HAWKISH AGENDA

TOWARD CHINA. WHEN YOU LOOK AT HIS PROMISES DURING THE CAMPAIGN, IT INVOLVED IMPOSING TARIFFS AS MUCH AS 60%, AND HIS PROMISE TO PUT 10% TARIFFS ON CHINESE GOODS, OVER THE FLOW OF FENTANYL

FROM CHINA INTO THIS COUNTRY. AT THE SAME TIME, BEIJING IS SORT OF LOOKING TO THE CHANGE IN ADMINISTRATION AS POSSIBLY A WAY TO ENGAGE WITH AN INCOMING PRESIDENT WHO HAS SHOWN A

TENDENCY TO BE MORE TRANSACTIONAL. MAYBE THEY CAN ENGAGE IN A WAY THEY HAVE NOT WITH PRESIDENT JOE BIDEN AND HIS TEAM. SO THEY HAVE SIGNALED, WHEN YOU WERE TALKING NOW WITH PETER ABOUT SOME OF THE RESTRICTIONS

CHINA RECENTLY IMPOSED ON SOME OF THOSE SENSITIVE, CRITICAL MINERALS. THEIR STATEMENT INCLUDED AN OVERTURE. WE DON’T KNOW WHO IS RESPONSIBLE FOR ITS CAPTION CONTENT AND ACCURACY.

WAY THIS WILL GO, BUT THE DIRECTION OF TRAVEL BASED ON THE PEOPLE IN TRUMP’S TEAM LOOKS PRETTY TOUGH. CAROLINE: LISTEN TO WHAT HE SAID ON TARIFFS.

>> I CAN’T GUARANTEE ANYTHING. I CAN’T GUARANTEE TOMORROW, BUT I CAN SAY THAT IF YOU LOOK AT MY, JUST PRE-COVID, WE HAD THE GREATEST ECONOMY IN THE HISTORY OF OUR COUNTRY, AND I HAD A LOT

OF TARIFFS ON DIFFERENT
COUNTRIES, BUT PARTICULARLY CHINA, AND WE HAD NO INFLATION.
CAROLINE: YOU ARE LOOKING AT THAT WITH
CONSUMER IMPACT, BUT BUSINESSES ARE EYEING THIS CLOSELY TOO.

THEY SHOULD BE, BECAUSE THEY
ARE CONSUMERS OF A LOT OF THOSE GOODS FROM CHINA AS KEY INPUTS
TO THEIR INDUSTRIES, LIKE COMPONENTS.
AND AN INCREASE IN TARIFFS WOULD NOT JUST HIT CONSUMERS AT
THE END OF THE SUPPLY CHAIN; IT

WOULD HIT BUSINESSES, AND THEY
WOULD HAVE TO THINK, WELL, WHAT DO WE DO WITH OUR COSTS?
DO WE PASS THEM ALONG? FROM THAT INTERVIEW, YOU GET A
SENSE TRUMP IS NOT INCLINED TO BACK AWAY FROM ANY OF THOSE
PLEDGES.

HE WAS PRESSED DURING THE
INTERVIEW ABOUT THE IMPACT ON CONSUMERS, AND HE INSISTED THAT
NO, THERE WAS NO COST TO CONSUMERS.
HE WAS ASKED THAT AND SAID SO TWICE DURING THE INTERVIEW:
THERE’S NO COST, AND HE TRIED TO

DOWNPLAY THE BITS OF IT.
MOREOVER, HE POINTED TO TARIFFS AS A WAY TO GAIN IN OTHER AREAS
WITH NON-ECONOMIC POLICY. SO, IT WILL BE INTERESTING TO
SEE HOW HE APPROACHES THIS, NOT

ONLY AS AN ECONOMIC TOOL,
BUT TO GAIN LEVERAGE IN OTHER POLICY AREAS, INCLUDING
IMMIGRATION AND WHO KNOWS WHAT ELSE. CAROLINE:
MIKE, WE APPRECIATE IT. ALL OF THIS; WE HAVE NOT
MENTIONED SYRIA.

THERE'S ANOTHER STICKY INFLATION PRINT IN THE U.S., WHICH IS SENDING TECH STOCKS LOWER, AND THE STIMULUS POTENTIAL FROM CHINA. LET'S GET A MARKET TAKE. YOUR READ ON THE TREND ON ANY OF THESE LATEST ISSUES, NVIDIA,

CHINA, GIVING YOU PAUSE, BRIAN? >> IN TERMS OF TECHNOLOGY, WE HAD A VERY HEAVY LEANING TOWARD TECHNOLOGY EARLIER. MORE THAN 50% OF THE PORTFOLIO WAS

IN I.T. AND COMMUNICATION SERVICES TYPES OF NAMES. WE HAVE SEEN A LOT OF HYPE IN THE TECH NAMES. WE HAVE ADJUSTED AND GOTTEN MORE OF A NEUTRAL POSTURE. SO, BACK TO NVIDIA, THEY SEEM TO

OF ECONOMICS IN THIS CYCLE. I THINK YOU'RE SEEING THAT IN THE POWER OF THEIR ABILITY TO CAPTURE THE MARKET AND CIRCLE THE WAGONS. WITH REGARD TO CHINA, THEY HAVE A SLIGHTLY REDUCED EXPOSURE TO CHINA.

THEY HAVE DONE THAT IN RECENT YEARS, AND YOU'RE SEEING THE OVERALL STRENGTH WHERE THEY'RE SELLING DOWN 15% OR 16%, BUT THIS IS LESS OF AN ISSUE THAN A COUPLE OF YEARS AGO WITH SOME OF

RESTRICTIONS, PULLING BACK NVIDIA'S ABILITY TO SELL TO CHINA. CAROLINE: ULTIMATELY, THE VALUATIONS, WHEN WE SEE NVIDIA IN EXCESS OF $3 TRILLION, THAT IS VINDICATED BY THE OPPORTUNITY DESPITE THE

ISSUES WITH CHINA. >> You look at NVIDIA and the hardware implications and technology they have, and they have a better mousetrap with the GPUs they are selling. We are seeing that in terms of

strength of business. What is underappreciated is the software that gives them longer tail in terms of the ability to continue to sell through. That software angle pulls up the margin structure of NVIDIA

over time. We will talk about the base software layer and stacks they are building on top, creating a system-wide approach, and it's hard to drop that phrase, really good, but I think there’s plenty of headroom for them to grow.

It is more stickiness to some peers in the GPU space. Caroline: Take us to software more broadly. We have seen a shift of chip stocks, semiconductors, into the software space, thinking how

generative AI will make. Is that the right way to go? >> In terms of the software names, sweep multiples inflate with expectations going up in terms of their ability to capture the economics from Gen AI. I think we are in the early

stages. We need to see where the impacts are going and where people with money are, otherwise, of how generative AI works. I think enterprise is slower to adopt. Where we see it more

IMMEDIATELY IS ADVERTISING SPACE. WE ARE SEEING THAT BY USING STRUCTURED DATA TO PREDICT WHAT PEOPLE WANT TO SEE AND BUY IN TERMS OF ADVERTISING AND MATCHING THAT MEDIA CONTENT WITH THOSE

ADVERTISING AREAS. WE ARE SEEING REAL RETURNS. THE ECONOMICS ARE GOING THAT DIRECTION, SO THAT IS MORE OF WHERE OUR FOCUS HAS BEEN ON A YEAR-TO-DAY BASIS AND WHERE WE ARE POSITIONED IN THE

PORTFOLIO AT THE MOMENT. CAROLINE: WE HAVE SEEN OTHERS OUTPERFORM. WHAT IS SO INTERESTING ABOUT—WITH YOU SAID EARLIER YOU HAVE GONE MORE NEUTRAL. ARE YOU PUTTING ALLOCATION INTO OTHER A.I.

TANGENTIAL GROUPS AND NOT ALL ABOUT SEMICONDUCTORS AND SOFTWARE? >> WHEN I DESCRIBED THE NEUTRAL POSTURING, THAT IS THE OVERALL POSTURE. WE HAVE SEEN SOME DECENT SIZING. I KNOW THIS IS A TECH SHOW, BUT

WE ARE SEEING SOME MORE INTERESTING AREAS AND MORE BORING AREAS OF THE ECONOMY. SO CONSUMER STAPLES, TO SOME EXTENT, UTILITIES, BECAUSE THEY ARE A LITTLE BIT

LESS TRENDY. THE MULTIPLES ARE MORE ATTRACTIVE AND YOU'RE GETTING MORE BANG FOR YOUR BUCK IN TERMS OF RETURNS, WITH THE DIVIDEND YIELD ON TOP FOR A REASONABLE MULTIPLE. YOU DON’T HAVE TO WORRY ABOUT IT, SO IT IS LIKE A BARBELL

APPROACHING HAVING PUNCHIER names and higher conviction names, and we are seeing the economics coming through and other things where you get some good quality compounding at a

reasonable price. CAROLINE: Thank you. I appreciate it. Let's just check in on Super Micro shares jumping earlier. We are up to 2%, but all of this off the server maker's Nasdaq.  It has granted the firm

more time to comply with listing moves regarding what they have time to serve their filings, saying the company is given until February 26 to file its financial report.

Coming up: major advancements in computing. The founder of the QuEra Quantum is next. CAROLINE: Alphabet is revealing new details on the progress in quantum computing, the potential

advancements with a new chip. How to overcome some of the biggest challenges. Next is coming up with real-world use of the theoretical power. We have the Vice President of Engineering at Google and

founder. The biggest challenge is error correction. Can you talk us through what you have just achieved? >> Yes, the big news for today is that we developed a

NEW HIGH-QUALITY QUANTUM CHIP. THIS ENABLED A BREAKTHROUGH IN COMPUTATION. ONE IS ERROR CORRECTION. WE SHOW THAT AS WE USE MORE QUBITS, THE ERROR RATE COMES DOWN EXPONENTIALLY. THE SECOND IMPORTANT

ACHIEVEMENT/BREAKTHROUGH IS THAT WE DID A BENCHMARK COMPUTATION THAT TOOK FIVE MINUTES WITH THE NEW CHIP. THAT WOULD TAKE THE TOP SUPERCOMPUTER 10 TRILLION YEARS WITH ONE

WITH 25 ZEROS. CAROLINE: AND IT TOOK FIVE MINUTES. WHAT I WANT TO UNDERSTAND IS WHAT THIS BENCHMARK TEST IS. BENCHMARK RANDOM CIRCUIT. WHAT DOES IT PROVE? >> THIS BENCHMARK PROBLEM, WE

PEOPLE ON MAIN STREET HAVE YET TO SOLVE. BUT IT IS A SUITABLE BENCHMARK TO COMPARE DIFFERENT PROCESSES TO EACH OTHER.  WE'RE TESTING CHIPS AGAINST

CLASSICAL COMPUTERS. CAROLINE: WHAT IS SO MIND-BOGGLING ABOUT

QUANTUM COMPUTING IS THAT WE HAVE BEEN TALKING ABOUT IT FOR DECADES, BUT IT

ALWAYS SEEMED TO BE ANOTHER FIVE OR 10 YEARS AWAY. IS THIS DIFFERENT THIS TIME? >> YES. THERE IS STEADY

PROGRESS, AND OUR NEW CHIP WE JUST RELEASED WILL FORM THE BASIS TO START FOR COMPUTATIONS THAT WILL ENABLE US TO SOLVE PROBLEMS THAT HUMANITY HAS

CAROLINE:
LET'S TALK ABOUT THE PROBLEMS. EVERYONE IMMEDIATELY
GOES TO HEALTHCARE, DRUG DISCOVERY.
IS THAT THE MOST OBVIOUS PLACE WHERE COMPUTING WILL BE HELPFUL?
>> DEFINITELY. WELL UNDERSTOOD.

APPLICATION OF QUANTUM COMPUTING
IS TO MONITOR SYSTEMS WHERE QUANTUM PHENOMENA ARE
IMPORTANT. THAT IS MORE OFTEN THAN YOU MAY
THINK. IF YOU WANT TO UNDERSTAND HOW
DRUGS, PHARMACEUTICALS BIND TO

CELLS, OR DESIGN A NUCLEAR FUSION
REACTOR, OR DESIGN AND IMPROVE THE BATTERIES FOR
AN ELECTRIC CAR, ALL THESE ENGINEERING CHALLENGES INVOLVE
QUANTUM PHENOMENA, AND IT

IS THE TOOL OF CHOICE TO
SOLVE THOSE PROBLEMS. CAROLINE: TO PUT IT IN PERSPECTIVE, GIVEN
THE RISE OF AI, THE HYPE OUR AUDIENCE HAS HAD THE
PAST COUPLE OF YEARS, WHAT DOES

QUANTUM COMPUTING MEAN FOR THAT?
IS IT SUPERIOR TO AI, AND DOES IT SUFFER THE SAME ISSUES LIKE
ENERGY AND INFRASTRUCTURE? >> I WOULDN'T COMPARE IT IN
THOSE TERMS. AI AND QUANTUM

COMPUTING WILL BE THE
MOST TRANSFORMATIVE TECHNOLOGIES OF OUR TIME, BUT THERE'S A LOT OF
CROSS-FERTILIZATION BETWEEN AI AND QUANTUM COMPUTING, SO IT
CAN HELP QUANTUM COMPUTING CHIPS

WORK BETTER, AND VICE VERSA. THERE ARE MANY COMPUTATIONS IN A.E. WHERE A QUANTUM CHIP WOULD BE A TOOL OF CHOICE. >> PLEASE COME AS YOU APPLY THE CALCULATION OF THIS.

COMING UP, WE WILL DISCUSS THE LIMITS OF HOW THEY ARE RUNNING UP AGAINST BIG TECH AND WALL STREET IN JAVIER AI AND CHECKING SOME KEY STORIES; ONE OF THOSE UP BY 7%, KEY DROPS ON

THE S&P AT THE MOMENT AND NASDAQ SHARES SLIDING THIS AFTER THE COMCAST C.E.O. IS SAYING HIS PROJECT'S BROADBAND LOST MORE THAN 100,000 IN THE FOURTH QUARTER.

WE ARE ALSO LOOKING AT VIVENDI AS THEY LOOK TO BREAK ITSELF APART, SAYING IT IS LIKELY IT WOULD DROP OUT OF THE CAC 40 AFTER IT DID APPROVE THAT DECEMBER 16TH.

CAROLINE: TIME FOR TALKING TECH. THE ALLEGATIONS THAT ONE OF ITS FACILITIES IN ILLINOIS IS USING MIGRANT TEAM LABOR. THERE IS AN INVESTIGATION BY THE LABOR DEPARTMENT WITH THE

STAFFING AGENCY THAT HIRED EMPLOYEES FOR THE FACILITY. QUITE THE FUTURE IS BRIGHT FOR CRYPTO, ENCOURAGING OTHER COUNTRIES TO FOLLOW THE LEAD OF THE U.S. >> WE HAVE A VERY CRYPTO-FRIENDLY PRESIDENT AND HE WILL

APPOINT AN AI CZAR. THIS REPRESENTS THE BEST TECHNOLOGY FOR THE FUTURE. CAROLINE: JACK MARR APPEARED TO MARK THE 20TH ANNIVERSARY AND ACKNOWLEDGED CHALLENGES AND HYPE AROUND THE AI-POWERED

PRODUCT. LET’S TALK ABOUT AI MORE. Blackstone HAS BEEN A BIG INVESTOR, AND NOT EVERYONE IS. IT TURNED IT INTO A MAJOR PROFIT DRIVER, BUT AROUND FAYETTEVILLE, GEORGIA, IT HAS

CREATED DIFFICULTY. TO DELIVER THIS STRUCTURE IMPACTS REAL PEOPLE, REAL CITIZENS. >> PEOPLE IN FAYETTEVILLE WERE UNHAPPY WHEN THE LOCAL POWER COMPANY CAME AROUND AND STARTED KNOCKING ON DOORS, SAYING

THEY WANTED TO RUN BIG TRANSMISSION LINES THROUGH THEIR YARDS BECAUSE THESE DATA CENTERS TAKE SO MUCH POWER. THE ONE QTS IS BUILDING WILL TAKE AS MUCH POWER AS A MILLION HOMES. CAROLINE:

WHAT DOES IT MEAN IN TERMS OF SCALING IT, BECAUSE IT IS JUST ONE DATA CENTER? >> IT IS NOT EVEN ONE OF THE HOT SPOTS. IT’S NOT ARIZONA. SO IT MEANS THERE WILL BE MORE OF THIS, MORE POWER

INFRASTRUCTURE BEING BUILT ALL OVER THE U.S., AND FEW PEOPLE ARE HAPPY WITH POWER LINES RUNNING ACROSS THEIR PROPERTY. AT THE SAME TIME, DATA CENTERS AND A.I. ARE SOMETHING WE ALL USE ALL THE TIME, SO THERE’S CERTAINLY NO INDICATION

IT WILL SLOW DOWN. CAROLINE: IS THERE A PRICE POINT, OR JUST MONEY? WHAT HAPPENS? >> IT SEEMS LIKE SYSTEMS ARE BUILT FOR DATA CENTERS TO BE BUILT FASTER. POWER COMPANIES HAVE A LOT OF

POWER TO BUILD TRANSMISSION LINES IN ORDER TO PROVIDE ELECTRICITY. SO IT SEEMS LIKE MOST OF OUR SYSTEMS AND PROFIT INCENTIVES ARE SET UP TO HAVE MORE DATA CENTERS AND TRANSMISSION LINES AT A PRETTY RAPID PACE.

CAROLINE: AND MORE DISCORD PERHAPS AMONG COMMUNITIES. GREAT REPORTING. I URGE YOU TO READ THIS IN FULL. REDDIT LAUNCHES ITS OWN POWER CHANNEL. THIS IS "BLOOMBERG TECHNOLOGY."

CAROLINE: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I'M CAROLINE HYDE IN NEW YORK. WE HAVE SEEN A BUILDUP IN RISK AVERSION SURROUNDING TECH, OFF BY 0.7%. ALL FIXATION ON THE INFLATION

REPORT WEDNESDAY IN THE UNITED STATES. WHAT DOES THAT MEAN FOR FED POLICY GOING FORWARD? WHAT ABOUT THE GEOPOLITICAL RISKS AFFECTING NVIDIA? A NEW PROBE ANNOUNCED BY CHINA, THE TIT-FOR-TAT CREATING

ANXIETY. WE ARE AT THE 98,000 LEVEL. A BIT OF A SELLOFF AS WE GET TO THE RISKIER ASSETS. PDD, I DON'T REMEMBER, BUT THERE IS OPTIMISM WITH CHINA AND FISCAL

POLICIES TO MISS. SOME OF THE MOST POSITIVE WE HAVE SEEN IN MORE THAN A DECADE, ACCORDING TO MORGAN STANLEY, UP FROM 11% AS CHINESE NAMES DO WELL, OFFSETTING HITS FROM THE

POLITBURO. WE HAVE NEW ANNOUNCEMENTS OF WHO IS IN AND OUT OF THE NEXT S&P 500 REORG. IT WILL MAKE THE S&P 500 -- IT IS DOWN 40%. LET'S TALK ABOUT REDDIT AS WELL, TESTING A NEW AI-POWERED

CHATBOT CALLED REDDIT ANSWERS TO SERVICE DISCUSSIONS FROM ACROSS THE PLATFORM'S FORUMS. I FEEL, AS A USER, YOU AND I USE GENERATIVE AI.  GOOGLE'S; I GET REDDIT CITATIONS AND I'M

BEING PUSHED TO REDDIT MORE AND MORE. THIS IS ABOUT KEEPING PEOPLE WITHIN THE PLATFORM. >> ABSOLUTELY. YOU SEARCH ON GOOGLE AND YOU END UP ON REDDIT. I SEARCH GOOGLE SPECIFICALLY SO IF I'M

TRYING TO FIND LI VERSUS SAN FRANCISCO, I SEARCH FOR THAT AND ADD REDDIT AT THE END. ON REDDIT'S SITE, IT CAN BE DIFFICULT TO FIND THINGS. WITH THIS NEW CHATBOT, YOU CAN

SEARCH ON THE REDDIT SITE AND FIND ALL THE THINGS YOU WERE LOOKING FOR AND IT WILL GIVE YOU A SUMMARY. IT MAKES THE EXPERIENCE A LOT EASIER. CAROLINE: REDDIT HAS BEEN SIGNING DEALS WITH GENERATIVE AI COMPANIES,

Google, for example, is getting money for its own website and data to be used by generative AI large language models. What are they doing in terms of their own LLMs to build its products?

Diagnostic, using what – are they agnostic, using one or a couple? Aisha: They use models from OpenAI and Google. They have interesting partnerships where they're

using large language models, like we mentioned. If you go on Google and find a Reddit result, that is because of a partnership they had with Google. It is a mix of those different things.

They're differently building their own models and using some from these other companies. Caroline: More to the business model. Aisha Counts, great to have you. TikTok's parent company

ByteDance faces a ban in the U.S. next month as a result of a federal appeals court decision on Friday. The ruling has sparked opposition from civil liberties

China Probes Nvidia, Geopolitical Risks Weigh on Tech | Bloomberg Technology

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Bloomberg Technology

China's investigation into NVIDIA caused an $80 billion drop in market capitalization.

Concerns focus on a 2020 deal and the broader US-China tech conflict.

The probe was announced by Chinese state television, CCTV.

The investigation centers on NVIDIA's 2020 acquisition of Mellanox.

The US Justice Department is also investigating NVIDIA for potential law violations.

Trump's Potential Impact on US-China Relations

President-elect Trump's conversation with President Xi signals a potential shift in US-China relations.

Trump's hawkish stance towards China includes potential tariffs and restrictions.

Trump's campaign promises involved imposing high tariffs on Chinese goods.

China may view the change in administration as an opportunity for engagement.

Trump downplayed the potential impact of tariffs on consumers.

Market Analysis and Investment Strategies

A portfolio manager discusses a shift towards a neutral posture on technology stocks.

NVIDIA's market strength is highlighted despite China-related issues.

NVIDIA's software capabilities are seen as a key factor for long-term growth.

The shift of chip stocks into the software space due to generative AI is discussed.

A barbell approach to investing, including less trendy sectors, is mentioned.

Alphabet reveals details on progress in quantum computing with a new chip.

A breakthrough in error correction and a benchmark computation are highlighted.

The benchmark test is explained as a comparison between different processes.

The potential applications of quantum computing are discussed, including healthcare and drug discovery.

Quantum computing is discussed in relation to AI and its potential applications.

The impact of inflation reports and geopolitical risks on tech stocks is discussed.

TikTok's parent company, ByteDance, faces a potential ban in the US.

Legal issues and the government's arguments regarding national security are analyzed.

Past court cases involving national security concerns and free speech are examined.

The government's efforts to make the case for a TikTok ban and public perception are discussed.