Bloomberg Technology 04/12/2024

Bloomberg Technology discusses the latest in the tech world, including China's push for domestic semiconductor production, Apple's plans for an AI-focused Mac processor, and the rise of AI in various industries. They also delve into the geopolitical risks affecting markets and the impact on technology stocks, highlighting the importance of deglobalization and supply chain improvements in the tech sector.

Takeaways

• 📱 Apple is planning an overhaul of its Mac lineup with an AI-focused processor, aiming to release updated computers by late 2024 to early 2025.
• 💡 Adobe's AI model, Firefly, was partly trained on AI-generated content, including images from its AI rivals, raising questions about the ethical use of synthetic images in training AI.
• 🌐 China reportedly instructed telecom providers to phase out foreign chips by 2027, an effort to onshore their semiconductor industry and reduce reliance on U.S. chipmakers.
• 💹 The semiconductor sector is under pressure, with major indexes like the Philadelphia Semiconductor Index in the red, reflecting broader market concerns and geopolitical tensions.
• 📈 Despite a general downturn in tech stocks, Apple's stock价格上涨了0.7%, potentially signaling a market shift towards more established tech companies.
• 🏦 Bank earnings are mixed, with major banks like JP Morgan and Citigroup seeing declines, while underwriting businesses and IPOs show signs of recovery.
• 🌐 Iran and Israel's geopolitical risks heightened, impacting public markets and leading to a search for safety in investments.
• 💼 DocuSign is unveiling a new platform aimed at expanding beyond e-signatures to offer a full suite of agreement management solutions.
• 🚀 SpaceX and other innovative companies like OpenAI and Reliance Therapeutics are part of a broader investment thesis by ARK Investment Management, focusing on foundational models and future growth.
• 💰 ARK's Brett Winton suggests that investors should be cautious about getting access to innovative companies like OpenAI, emphasizing the importance of value and not paying a premium for exposure.
• 🌟 Kevin Ryan's AlleyCorp, after years of investing in small businesses and startups, has raised $250 million from external investors for the first time, signaling a growth in NYC's tech scene.

Q & A

What is the main focus of the Bloomberg Technology show on this particular date?

The main focus of the Bloomberg Technology show on this date is the semiconductor market, AI advancements, and the financial performance of major tech companies like Apple and Adobe.

What is the reported action of China regarding foreign chips in their telecom networks?

China has reportedly instructed telecom providers like China Mobile to stop using foreign chips in their core networks by 2027, as part of their effort to onshore their semiconductor industry.

How is Apple planning to boost its computer sales?

Apple plans to boost its computer sales by overhauling its Mac line with an AI-focused processor, aiming to release the updated computers late this year to early next year.

What is the significance of the investment made by ARK Investment Management in OpenAI?

The investment by ARK Investment Management in OpenAI signifies their belief in the potential of AI software to revolutionize knowledge work and their expectation of significant returns from the AI industry.

What is the role of Adobe's Firefly AI model in content creation?

Adobe's Firefly AI model is used for content creation, and interestingly, it was trained in part on AI-generated content, including images from AI rivals like Mid Journey.

What is the impact of geopolitical risks on the current market situation?

The heightened geopolitical risks, particularly between Iran and Israel, have led to increased risk aversion among investors, causing tech stocks to decline and money to move into safer assets like bonds and the US dollar.

How is the semiconductor industry responding to the challenges posed by China's policies?

The semiconductor industry is facing challenges due to China's policies of favoring domestic chips over foreign ones. However, the industry is also working on improving supply chain standards and focusing on manufacturing at scale to maintain competitiveness.

What is the significance of the partnership between Google andAlleycorp?

The partnership between Google and Alleycorp is significant as it highlights the growing interest and investment in AI and technology startups, particularly in the fields of material science and healthcare.

What are the key areas of focus for Kevin Ryan's investment strategy at Alleycorp?

Kevin Ryan at Alleycorp focuses on key areas such as AI, healthcare, mental health, and psychedelics, aiming to start and invest in companies that recognize and build upon technological innovations.

What is the potential market cap expected from the AI industry according to ARK's thesis?

According to ARK's thesis, the AI industry has the potential to reach a market cap of around $16 trillion by 2030, representing a significant portion of the expected enterprise value footprint.

How is the New York tech scene evolving according to Kevin Ryan?

According to Kevin Ryan, the New York tech scene is evolving rapidly, with New York already employing as many people in tech as San Francisco. He predicts that in 10 years, New York will be an even bigger center for tech employment and host some of the largest tech companies.

Outlines

00:00

📺 Introduction to 'Bloomberg Technology'

The segment begins with the hosts, Caroline Hyde and Ed Ludlow, introducing the 'Bloomberg Technology' show from their respective locations in New York and San Francisco. They discuss a range of topics including China's directive to telecom providers to use domestic chips, Apple's plans to overhaul its Mac line with an AI-focused tech process, and market trends indicating a search for safety amidst geopolitical risks and economic indicators.

05:02

🌐 China's Semiconductor Strategy

The conversation shifts to focus on China's efforts to onshore its semiconductor industry, with a specific timeline given for major telecom carriers to swap out foreign chips. The hosts discuss the implications for U.S. chipmakers that have historically derived significant revenue from China. They also touch on the tit-for-tat dynamic between U.S. export curbs and China's export restrictions, and how these may impact the global technology landscape.

10:05

💡 The Future of Technology Stocks

The summary delves into the future of technology stocks with a focus on the impact of artificial intelligence and semiconductor industries. The discussion includes insights from Alison, a portfolio manager, who highlights the importance of manufacturing as a competitive advantage and the potential for deglobalization in the tech supply chain. Apple's position in AI and its plans to boost computer sales with an overhaul of its Mac line are also explored.

15:08

🚀 Apple's AI-Focused Mac Lineoverhaul

This segment provides detailed information about Apple's strategy to accelerate its Mac lineup overhaul with an AI-focused processor. Mark Gurman, a journalist from Bloomberg, shares insights into Apple's timeline for releasing new iMac, Mac Mini, and Mac Pro models. The conversation emphasizes the significance of in-device chips and Apple's unique approach to AI compared to other tech companies.

20:12

📈 Docusign's New Platform and Strategy

Docusign's CEO, Allan Thygesen, discusses the company's new platform aimed at streamlining the entire agreement journey, from sales to legal compliance. The platform intends to solve problems associated with each stage of agreements, leveraging generative AI for summarization and ensuring theme alignment. Thygesen talks about the transition beyond e-signatures and the company's vision to become a leading firm over the next 20-25 years.

25:16

🤖 Investing in AI: The Future Landscape

Brett Winton, ARK's Chief Futurist, shares the thesis around foundation models in AI and their potential to revolutionize knowledge work. He discusses the expected market cap and the role of companies like OpenAI in this landscape. Winton emphasizes the importance of investing in a diverse portfolio that includes exposure to AI and other technology platforms to achieve significant returns.

30:21

💼 AlleyCorp's Fundraising and NYC Tech Scene

Kevin Ryan, the founder and CEO of AlleyCorp, talks about the company's recent fundraising efforts and decision to take on external investors. Ryan shares his vision for AlleyCorp as a leading firm in the next 20-25 years and the company's focus on starting and investing in businesses across various sectors, including AI, healthcare, and technology. He also discusses the growing NYC tech scene and its potential to become a major tech employment center.

35:25

🖼️ Adobe's Firefly and AI Training

The segment discusses Adobe's use of AI-generated content, including images from its AI rivals, to train its own AI model, Firefly. It is revealed that Adobe was aware of the sources of the training data and had even paid a bonus to contributors, including those who provided AI-generated images. The story highlights the complexities and ethical considerations in AI training and development.

Keywords

Semiconductor

Semiconductors are materials that have electrical conductivity values between those of insulators and conductors. They are the foundation of modern electronics, including computers, smartphones, and other digital devices. In the context of the video, the script mentions a 'semiconductor slide' indicating a possible decrease in the performance or value of companies in the semiconductor industry. This relates to the main theme of the video, which includes discussions on technology and market trends.

AI-focused tech processor

An AI-focused tech processor is a specialized type of computer chip designed to optimize the performance of artificial intelligence (AI) applications. These processors are built to handle the complex computations required for machine learning tasks, such as image and speech recognition. In the video, the mention of 'overhauling the line of Mac computers to add an AI-focused tech processor' suggests that Apple is looking to integrate advanced AI capabilities into its products, enhancing their performance and智能化水平.

Geopolitical risks

Geopolitical risks refer to the potential threats or uncertainties that arise from political events, conflicts, or tensions between countries. These risks can affect global markets, trade, and investment decisions. In the context of the video, heightened geopolitical risks between Iran and Israel are mentioned, which could impact investor sentiment and market stability.

Equities

Equities, also known as stocks or shares, represent ownership interests in a company. Investors buy equities with the expectation that their value will increase over time, providing capital gains and potentially dividends. In the video, the movement of equities in the opposite direction of the bond market indicates a shift in investor preferences between different asset classes.

Bitcoin

Bitcoin is a decentralized digital currency that operates without a central authority or government. It was the first cryptocurrency and remains one of the most well-known and widely used. In the context of the video, Bitcoin's price stability is contrasted with the volatility seen in other financial markets, particularly as the US dollar strengthens.

Bank earnings

Bank earnings refer to the profits that banks report during a specific financial period, usually a quarter or a year. These earnings are important indicators of a bank's financial health and performance, and they can influence the bank's stock price and investor confidence. In the video, the discussion of bank earnings is tied to the overall health of the financial sector and the economy.

AI and banks

The integration of AI into banking refers to the use of artificial intelligence technologies by financial institutions to improve services, enhance customer experience, and optimize operations. AI can be applied in various areas within banking, such as fraud detection, risk management, and personalized financial advice. The video discusses AI as a significant theme for banks, indicating a trend towards increased adoption of AI technologies in the financial sector.

Supply chain

A supply chain is the network of organizations, people, activities, information, and resources involved in the production and distribution of a product or service. It includes the sourcing of raw materials, manufacturing, and the delivery of finished products to customers. In the context of the video, the mention of the supply chain relates to the semiconductor industry and the challenges posed by geopolitical tensions and the need for self-sufficiency.

Deglobalization

Deglobalization is the process of reducing global connectivity and interdependence, often in the realms of trade, investment, and technology. This can involve countries or companies pulling back from international partnerships and focusing more on domestic production and resources. In the video, deglobalization is discussed in the context of technology and supply chain strategies, emphasizing the importance of local manufacturing and self-reliance.

Stock pickers market

A 'stock pickers market' refers to a situation where investors focus on selecting individual stocks for investment rather than relying on broad market trends or passive investment strategies. This approach requires in-depth analysis and active decision-making, as investors seek to identify undervalued or high-potential stocks that can outperform the market. In the video, the concept is used to describe a period where active management and stock selection are crucial for investment success.

Highlights

Bloomberg Technology discusses the semiconductor slide on reports that China told telecom providers to drop foreign chips.

Apple is reportedly overhauling the line of Mac computers to add an AI-focused tech processor.

The chatgpt boom continues with a stake in OpenAI, indicating a search for safety in publicly traded markets.

Geopolitical risks heightened between Iran and Israel, causing a squaring away of certain volatility in the market.

Equities are moving opposite of the bond market, with money moving into havens as the 10-year yield falls.

Bitcoin shows no volatility on a day-to-day basis, with dollar strength affecting its value.

Apple's stock rose 0.7% after a 4% jump, indicating a complete overhaul of the Mac line.

Alphabet, the parent of Google, shows increased optimism in AI, with a focus on enterprise or commercial use cases.

Bank earnings kick off, with mixed fortunes and key focus on AI's role in banking.

Semiconductor sectors under pressure, with Intel and IMD among the worst performers.

China's efforts to onshore their semiconductor industry includes a deadline for telecom carriers to swap out foreign chips.

Chinese export curbs pose more risk than U.S. export curbs at the moment, affecting the global semiconductor industry.

Deglobalization and national security concerns are leading to a focus on improving supply chain standards and ESG standards in technology.

Apple's role in AI is yet to be defined, with the company focusing on in-device chips and privacy-centric AI solutions.

DocuSign unveils a new platform for intelligent agreement management, expanding beyond e-signatures.

ARK Investment Management gains access to OpenAI, expecting a transformation of the tech landscape by AI industry.

New York-based AlleyCorp raises $250 million, focusing on AI, healthcare, and technology startups.

Adobe's AI model Firefly was trained on Adobe stock images and partly on AI-generated content, including from rivals.