So the US is looking at some of these Middle East nations because we know they're throwing a lot of money behind II. Previously, US officials were looking at China and capping export of chips to them. What do we know about this latest initiative about blocking access to the accelerators? Yeah, I mean, this is obviously the key choke point. The one thing that Washington can do to really control what happens, who gets what capabilities. The concern is, as you said, about China, but what will the Middle East do in terms of allowing access to these capabilities to China on a remote basis? All kinds of considerations, all kinds of concerns with these export controls up until now. Now we're looking at perhaps a more broader blanket approach for our audience and Bloomberg Technology. Sometimes they struggle to understand what it is the US is trying to prevent. An accelerator is a high-performance chip, and it goes into a data center.

How is it that any government can say to a company, Okay, we cannot allow you to sell your best thing to any market? That's basically what they're trying to do. Right. That's exactly it. It's trying to basically place a cap on the capabilities of a country or a company and stopping them from having the ability to develop an advanced AI model, which, as we know, can have all kinds of capabilities. And once it's out there in the wild, who knows what happens with it? Okay. Let's get to the breaking news of the last 30 minutes. ASML, which is Europe's most valuable company, but also a leading maker of chip equipment. Chipmaking equipment has given us earnings and a pretty ugly forecast. It has cut its gross bookings outlook for fiscal 25 to a much more narrow range. And as we can see on the screen, its shares have reacted very negatively. What do we learn through that metric? Yeah, I mean, bookings are really the

the way that a company says, hey, this is roughly what our revenue is going to be, and there's a given point. It's a lead indicator. These machines, as we know, are absolutely enormous. They take a long time to make. So it's very much a leading indicator of demand for the whole of the industry. Let's look at some of the other names that are impacted. So ASML makes the machines which manufacture the chips. It doesn't make the chips themselves. Why is it then that names like M Video and AMD Intel saw their own declines accelerate? What is it that we're learning about the sector as a whole? A couple of things here. One might be more ASML specific, but in general, chip equipment is the leading indicator. You buy equipment, particularly ASML, is way ahead of time thinking about what you're going to be doing this time next year. But ASML's look at that customer base.

Basically, they have three customers. Two of those customers, Samsung and Intel, right now are in cutback mode. They're in trouble mode. There is a link between the first story we covered and ASML, which is the United States along with allies, has also looked at the mechanism of controls on chip-making equipment. And ASML has been at the center of that in the context of extreme ultraviolet lithography. Please take it from there and just explain why these machines are so critical and why governments want to control them. Yeah, I mean, you've got a production line, lots of different machines made by lots of different companies. Applied Materials here, KLA TenCore here, Tokyo Electron. But the keystone piece of equipment is ASML. If you want to make an advanced chip, you need their EUV machine. And they're not allowed to export those to China because at least Washington doesn't want China to have that.

capability. And interesting in all of this, and I kind of mentioned a moment ago, this is Europe's most valuable company. They are a Dutch company, but with a footprint here in Silicon Valley, customers here in America. Where are they doing business? Principally, where are their biggest customers for everything advanced? I mean, they have basically 60% of their revenue comes from Intel, Samsung, and more importantly, TSMC. So, all over the world where these factories are, but really concentrated in these companies that want to make the world's most advanced.

US Could Cap Sales of Nvidia AI Chips to Some Countries

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US Could Cap Sales of Nvidia AI Chips to Some Countries

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