Asia Stocks Rally as Anthropic IPO Boosts Chip Shares

Author: Bloomberg Television · Watch on YouTube

Video authored by the channel shown, not by IANIA; all rights belong to the creator. Transcript and summary generated automatically; the original-language content is preserved.

Original language: English

Original video: Asia Stocks Rally as Anthropic IPO Boosts Chip Shares · Channel: Bloomberg Television · 1:34:08 · Watch on YouTube

Topics: AI infrastructure and hardware, Markets and economy, AI models, AI safety

Summary

Bloomberg examines the market response to Anthropic’s IPO filing, which has revived enthusiasm for AI-linked stocks and chipmakers across Asia. The filing shows rapid revenue growth, a widening enterprise customer base and positive operating cash flow, while also warning of slowing growth, rising compute costs and serious AI-related risks. Guests discuss the capital needs behind the AI buildout, opportunities in semiconductors and financing, and pressure on bond markets. The program also covers Brazil’s post-election market selloff, South Korea’s chip-driven fiscal plans, and the power, water and community challenges facing Australian data-center projects.

Key points

Anthropic’s filing reports rapid revenue growth and a broader enterprise customer base, alongside positive operating cash flow in the first half.
The filing highlights slowing sequential growth, substantial computing costs and risks ranging from liability to potentially catastrophic AI outcomes.
The IPO news helped lift Asian technology shares, with South Korean and Japanese chip-related stocks among the beneficiaries.
Analysts warn that continued AI investment depends on sustained results and that large fundraising needs could compete for capital and strain credit markets.
BNY’s CFO describes an AI strategy focused on broad adoption and employee upskilling rather than using AI to cut jobs.
Brazilian markets fell after Lula da Silva’s reelection, as investors questioned the government’s fiscal direction and the scope for interest-rate cuts.
South Korea is considering placing semiconductor-driven tax revenue into a future response fund, including reserves and government-bond issuance reductions.
Upcoming results from major Asian chipmakers are seen as important evidence of AI demand, with memory pricing a key indicator.
Australian data-center plans face power constraints, community opposition, water concerns and tougher financing conditions.

Chapters

Start	Chapter	Summary
00:15	Asia markets and Anthropic’s IPO filing	The hosts introduce Anthropic’s planned IPO, the AI trade’s influence on Asian stocks and the day’s broader market risks.
02:28	What Anthropic’s filing reveals	Reporters discuss the company’s revenue growth, expanding enterprise customer base, cash generation and extensive AI risk disclosures.
06:47	Margins, customers and AI risks	Analysts assess Anthropic’s improving inference margins, reliance on cloud providers and exposure to risks shared by frontier AI companies.
10:42	AI fundraising and market expectations	Mark Cranfield says IPO enthusiasm may fade unless major technology companies deliver earnings and outlooks that meet investor expectations.
14:41	South Korea’s growth and global headlines	The program reports strong South Korean GDP growth led by semiconductor demand before turning to geopolitical and trade developments.
16:54	Brazil’s post-election fiscal uncertainty	Bloomberg Economics discusses the lack of clarity over Lula’s fiscal plans and the difficult choices facing Brazil’s central bank.
22:55	BNY’s approach to AI adoption	BNY’s CFO describes a firmwide AI strategy centered on employee skills, client service, cybersecurity and careful model selection.
34:49	Asian markets and chip-sector prospects	Market analysts weigh the potential flow of AI investment into Asian semiconductor supply chains and discuss Korean shareholder returns.
39:17	Apple’s foldable iPhone concerns	A Bloomberg editor considers reports of cracked foldable displays and what the issue could mean for Apple’s product and revenue plans.
43:00	Investor views on Anthropic and AI financing	Bruce Richards argues that capital markets can fund Anthropic while distinguishing more secure AI-related financing from riskier exposures.
46:55	Asian market reaction and IPO details	The program reviews the rise in Korean and Japanese shares and revisits Anthropic’s financials, customer concentration and dependence on partners.
1:00:09	Corporate fundraising and bond-market opportunities	The show covers fundraising by Microsoft, Meta and SpaceX before BlackRock’s Rick Rieder discusses yields and investment opportunities.
1:11:09	Asian stocks and chipmaker earnings	Analysts connect AI financing news to Asian markets and explain why upcoming results from major chipmakers will help gauge demand.
1:20:02	South Korea’s proposed future response fund	South Korea’s budget minister outlines plans for semiconductor-related tax revenue, fiscal reserves and potential reductions in bond issuance.
1:26:04	Australian data centers face infrastructure hurdles	Bloomberg examines power access, community resistance, water constraints and financing challenges confronting Australia’s data-center ambitions.
1:32:28	Asian market close and China’s divergence	The hosts summarize gains in South Korea and Japan, contrast them with subdued Greater China markets and close the program.

Quotes

Anthropic grew revenue more than 1300% in the first half of this year — 03:03

the possibility AI could resist its own shutdown, conceal information — 05:13

AI for everyone, everything, everywhere. — 27:17

the best way to deal with that is through having the best defense. — 31:05

the ones that survive are the ones that will show they can scale power, that they can manage community relations. — 1:31:02

Concepts and entities

Anthropic, Claude, IPO, AI, inference margins, hyperscalers, BNY, Eliza, SK Hynix, BlackRock, Luiz Inácio Lula da Silva, data centers

Full transcript (original language)

00:15 >> THIS IS THE ASIA TRADE. I AM PAUL ALLEN IN SYDNEY. >> I AM HAIDI STROUD-WATTS. >> ANTHROPIC FILES, HEADING TOWARDS BECOMING THE FIRST ADVANCED AI MODEL MAKER TO LIST. INVESTORS SAID TO BE TARGETING IN FACT – A VALUATION OF $1.5 TRILLION. >> ASIAN STOCKS SET TO FOLLOW SUIT. INVESTORS WAITING MORE BIG TECH EARNINGS AND THE FED RATE DECISION. >> BRAZILIAN ASSETS SELLOFF AS THE SURPRISE REELECTION OF PRESIDENT LULA DA SILVA BLOWS UP BETS ON A SWING TO THE RIGHT.

00:46 >> LET’S TAKE A LOOK ACROSS ASIA AND WE DO HAVE THE TECH TAILWINDS LOOKING TO SUPPORT THAT SENTIMENT AS WE HEAD INTO TRADING IN THE NEXT HOUR PARTICULARLY ACROSS THE LIKES OF JAPAN AND KOREA AND AS WE GET INTO THE CREATING – TRADING OF GREATER JAPAN COME ANTHROPIC FILING FOR THE IPO WITH INCREASINGLY COMPETITIVE GLOBAL RACE. THIS IS GOING TO BE REALLY ONE OF THE SUPPORT OF ELEMENTS AS WE GET INTO THE START OF TRADING, TRACKING GAINS ON WALL STREET IS THE EXPECTATION. KOSPI FUTURES UP BY 2.6% AS THE

01:20 REVIVAL FOR THE ENTHUSIASM FOR THE AI TRADE THEME IS GOING TO BE WHAT WILL BE – WE WILL BE WATCHING, THE LONG-AWAITED F1 MOVING CLOSER FOR ANTHROPIC TO BECOME THE MOST PUBLICLY TRADED COMPANY FOCUSED PRIMARILY ON THE DEVELOPMENT OF ADVANCED AI. S&P FUTURES LOOKING FLAT SO THANK YOU. A QUESTION AS TO HOW LONG THIS INITIAL PART OF THE RALLY WILL LAST IN THE ANCIENT SESSION BUT ALSO WATCHING OUT FOR SOME OF THE OTHER ELEMENTS AS WELL, THE DECLINE WE HAVE BEEN WATCHING WHEN IT COMES TO OIL PRICES AS THE ELEMENTS OF POTENTIAL DIPLOMACY, TALK POTENTIALLY COULD GIVE A BIT MORE SUPPORT.

01:54 BRENT CRUDE LOWER BY .8%. LOOKING TO EXTEND THOSE DISCUSSIONS AT A TIME WE HAVE SEEN BRENT SEARCHING BY ALMOST 90% THIS YEAR AS WE CONTINUE TO WASH THE DISRUPTIVE FLOWS. ELSEWHERE, WE ARE SEEING NOT A GREAT DEAL OF MOVE WHEN IT COMES TO TREASURIES AT THE MOMENT BUT ALSO THE U.S. DOLLAR JUST LOOKING PRETTY FLAT AT THE MOMENT. >> LET’S GET BACK TO THE BIG STORY ON ANTHROPIC FILING FOR

02:28 ITS IPO WHILE WARNING INVESTORS OF SLOWING REVENUE GROWTH, RISING COMPUTING COSTS, AND POTENTIALLY CATASTROPHIC OR EXISTENTIAL AI RISKS. LET’S GET TO OUR TEAM. ASIA TECH CORRESPONDENT ANNABELLE DROULERS JOINS US NOW ALONG WITH BLOOMBERG INTELLIGENCE GLOBAL HEAD OF TECH RESEARCH, MANDEEP SINGH. LET’S START WITH YOU. WE WILL GET TO EXISTENTIAL RISKS IN A MOMENT. WHAT IS THE BIGGEST THING WE HAVE LEARNED? >> EXISTENTIAL RISKS, AROUND 100 PAGES BUT WHAT WE ARE INTERESTED TO SEE AS WELL IS JUST THE FINANCIAL FIGURES

03:03 BECAUSE WE HAD BEFORE REVENUE RUN RATE FIGURES LEAKED TO THE PRESS. IT’S AUDITED. BLACK-AND-WHITE ESSENTIALLY AND WHAT WE SAW WAS ANTHROPIC GREW REVENUE MORE THAN 1300% IN THE FIRST HALF OF THIS YEAR SO 16.3 BILLION DOLLARS AND THEN IN THE THIRD QUARTER ALONE, 16 POINT $8 BILLION SO MORE THAN THE ENTIRE FIRST HALF IN A SINGLE QUARTER. THE OTHER THING THAT JUMPS OUT IS THIS ISN’T JUST A HANDFUL OF BIG TECH CLIENTS PROPPING UP THE NUMBERS. WE ARE SEEING AND EXPANDING CUSTOMER BASE. MORE THAN 250 CUSTOMERS ACCORDING TO THE FILING NOW

03:37 SPEND AT LEAST $10 MILLION A YEAR WITH ANTHROPIC SO IT’S A REAL ENTERPRISE BUSINESS IS WILL IT IS BECOMING AS OPPOSED TO SOMETHING WITH A CONCENTRATION WITH JUST A HANDFUL OF COMPANIES. QUICKLY – CRITICALLY AS WELL, ANTHROPIC GENERATING NEARLY $4 BILLION IN POSITIVE OPERATING CASH FLOW IN THE FIRST HALF. THERE WAS A HEADLINE THAT LOSS OF AROUND $80 BILLION AND THAT DOES SOUND ALARMING BUT IT’S ACTUALLY MORE OF A COUNTING FACTOR AS OPPOSED TO CASH GOING OUT THE DOOR. THE UNDERLYING BUSINESS IS CASH POSITIVE OR GENERATIVE.

04:10 >> YOU KNOW WHAT IS ALARMING IS THE RISKS THAT ARE PRESENTED FROM CATASTROPHIC IMPACT ON HUMANITY TO SOME OF THE MORE BREAD-AND-BUTTER LIABILITY RISKS. >> THERE WAS CERTAINLY A LARGE PORTION OF THIS FILING DEDICATED TO DETAILING THESE RISKS AND AHEAD BUT YES, THERE ARE TWO THINGS STANDING OUT AND YOU HAVE THE FINANCIAL ONES AND AS HE SAID, MORE EXISTENTIAL ONES BUT ON THE FINANCIAL SIDE, WE ARE SEEING GROWTH. ITS STRONG GROWTH YEAR-OVER-YEAR BUT QUARTER-OVER-QUARTER IS WHERE

04:41 IT GETS A LITTLE MORE INTERESTING. WHAT WE ARE SEEING AT THAT POINT IS THE SEQUENTIAL STEP UPS FROM QUARTER ONE TO TWO TO THREE ARE GETTING SMALLER SO THAT IS A COMPANY OR CONCERN FOR A COMPANY THAT IS LIKELY PRICING IN EVALUATION OVER THE HUNDREDS OF BILLIONS OF DOLLARS ESSENTIALLY SO THAT TRAJECTORY IS REALLY IMPORTANT AND THE OTHER AS YOU SAID AROUND CAPITAL SAYING THEY MAY NEED TO RAISE SOONER THAN ANTICIPATED PLUS YOU HAVE THE EXISTENTIAL SIDE AND THIS IS WHERE ANTHROPIC GETS INTO A LOT OF

05:13 THESE CONCERNS WE HAVE SEEN REFLECTED IN THE MEDIA OVER RECENT MONTHS BUT IT THE POSSIBILITY AI COULD RESIST ITS OWN SHUTDOWN, CONCEAL INFORMATION, POSE A CATASTROPHIC RISK TO HUMANITY, WE HAVE NOT SEEN THIS BEFORE. IT’S OBVIOUSLY A FIRST FOR INVESTORS TO BE PRICING AS WELL. >> BEFORE THE WORLD ENDS, THERE WILL BE NEW BILLIONAIRES. CAN YOU TELL US ABOUT THEM? >> THAT’S RIGHT. EXACTLY. SOME PEOPLE ARE GOING TO BE ENDING THEIR LIVES REALLY WILLFULLY BECAUSE WE HAVE THE

05:45 CEO AND HIS SISTER, DANIELA, THE PRESIDENT OF THE BUSINESS. THEY COFOUNDED ANTHROPIC AFTER LEAVING OUT – OPENAI IN 2021 BASED ON THE VALUATION RANGE THAT IS BEING DISCUSSED. THEY ARE GOING TO BE MULTIBILLIONAIRE’S ESSENTIALLY. BEYOND THE FOUNDERS THAT YOU CAN SEE HERE THAT ARE GOING TO BE WORTH MORE THAN $13 BILLION EACH AT LEAST, THE IPO DOES CRYSTALLIZE FOR A LOT OF INSTITUTIONAL BACKERS SO YOU HAVE GOT AMAZON, GOOGLE, BOTH SIGNIFICANT INVESTORS.

06:16 SINGAPORE, ICONIC CAPITAL. THEY ALL PILED IN EARLIER THIS YEAR AND THEN THE STRUCTURE OF THIS IS NOTABLE AS WELL. 5% OF SHARES ARE GOING TO BE GOING TO A PUBLIC BENEFIT FUND TO ADDRESS THAT SOCIETAL IMPACT THAT IS DETAILED IN THE FILING AND THAT INCLUDES JOB DISPLACEMENTS. SO THERE IS A SENSE THAT YOU ARE GOING TO BE CREATING EXTREME WEALTH FOR RELATIVELY – VERY SMALL COHORT OF PEOPLE BUT THERE COULD BE SOME LARGE SOCIETAL IMPACTS HERE IN TERMS OF JOB DISPLACEMENT. ANTHROPIC IS NOT INTO THAT AS

06:47 WELL. >> ANNABELLE DROULERS THERE. ANTHROPIC’S PUSH TO USE COMPUTING POWER MORE EFFICIENTLY COULD HELP SUSTAIN MARGINS WHILE BROADER ENTERPRISE ADOPTION COULD REDUCE CUSTOMER CONCENTRATION RISK. LET’S GET FURTHER ANALYSIS IN NEW YORK. WE HEARD HER COVER OFF JUST SOME OF THE RISKS AND POTENTIAL CHALLENGES THAT ARE ADDRESSED IN THIS FILING. WHAT WAS INTERESTING TO YOU AND DO YOU THINK THERE ARE ANSWERS THAT ANTHROPIC HAS IN TERMS OF BEING ABLE TO MEET THESE CHALLENGES?

07:21 >> LOOK, FROM A MARGIN PERSPECTIVE, THEY HAVE A REALLY GOOD STORY TO TELL AND WHAT WE SAW IN THIS ONE IS THE INFERENCE MARGINS EXPANDED FROM 12% TO 85% OVER THE COURSE OF 12 MONTHS AND YOU KNOW, WHEN YOU THINK OF THE SCALE AT WHICH THEY ARE OPERATING, THIS IS THE NUMBER ONE THING THAT INVESTORS CARE ABOUT FROM A UNIT ECONOMICS PERSPECTIVE. WHAT ARE THEIR MARGINS? FROM THAT PERSPECTIVE, IT’S OBVIOUS THAT WITH SCALE, THEY HAVE BEEN ABLE TO IMPROVE THEIR

07:54 MARGIN PROFILE AND THEY HAVE RAISED A TON OF CASH AROUND 141 BILLION DOLLARS EVEN BEFORE THE IPO SO FROM THAT PERSPECTIVE, IT’S A VERY POSITIVE SIGNAL THAT THEY ARE ALREADY AT POSITIVE MARGINS. >> MANDEEP, ANTHROPIC IS PRETTY DEEPLY EMBEDDED IN THIS CIRCLE ARE CLEAR – CIRCULAR DEALMAKING ECOSYSTEM. CAN YOU GIVE US WHICH CONCENTRIC RING THEY ARE IN? >> LOOK, EVEN WHEN YOU PARSE IT, THEY GENERATE 48% OF THEIR

08:28 SCALES FROM THE HYPERSCALE CLOUD PROVIDERS MARKETPLACES SO THERE IS THAT ASPECT THAT IT RELIES ON THE HYPERSCALERS FOR PROVIDING THE COMPUTE FOR THEIR PLATFORM TO GET THE DISTRIBUTION. AND ON TOP OF THAT, YOU KNOW, WHETHER IT IS BROAD OR AMD, THEY DO HAVE BIG AGREEMENTS WITH THEM. THE CIRCLE OF FINANCING IS THERE. WHEN THEY HAVE OVER 11,000 CUSTOMERS NOW AND THOSE CUSTOMERS HAVE GROWN IN A BIG

09:03 WAY, YOU ARE SERVICING A LOT OF CUSTOMERS. I THINK THAT AGAIN IS A NICE DATA POINT THEY CAN SHOWCASE DURING THE IPO ROAD SHOW THAT THE CUSTOMER CONCENTRATION HAS GONE DOWN IN A BIG WAY AND NOW THEY ARE SERVICING A LOT OF LARGE ENTERPRISES WHICH I THINK IS A POSITIVE SIGN. >> SOME OF THE BIGGER RISKS HIGHLIGHTED IN THE FILING ARE NOT UNIQUE NECESSARILY TO JUST ANTHROPIC, RIGHT? IT IS SOMETHING WE ARE GRAPPLING WITH IN TERMS OF ALL OF THESE MORE SOPHISTICATED AI MODELS BUT IT TALKS ABOUT THE POTENTIAL FOR FINANCIAL HARM, THE POTENTIAL FOR SCIENTIFIC

09:38 BIOHAZARDOUS HARM DEPENDING ON WHAT THE APPLICATIONS ARE. AT THE HEART, DO YOU THINK THESE EXISTENTIAL CHALLENGES ARE GOING TO BE A BIG DEAL FOR COMPANIES LIKE ANTHROPIC? >> YOU BRING UP A VERY GOOD POINT THAT WE ARE IN UNCHARTED TERRITORY IN TERMS OF ASSESSING A BUSINESS MODEL LIKE THAT WHERE WHEN WE TALK ABOUT AGENTIC FUNCTIONALITY, THERE IS A LOT THAT COULD GO WRONG AND WE HAVE SEEN SOME OF THE CYBERATTACKS AND THE AGENTS. FROM THAT PERSPECTIVE, THE

10:11 LIABILITY RISK IS THERE. YOU KNOW, IF THERE IS WIDESPREAD ADOPTION THAT WE ARE STARTING TO SEE THAT MY SENSE IS AT SOME POINT, LEADERS SHOULD STEP IN AND SET RULES AND ALL THESE MODEL PROVIDERS HAVE TO ABIDE BY THE RULES. DIFFERENT IN TERMS OF, YOU KNOW, HOW IT EXPOSES ANTHROPIC VERSUS OPENAI OR ANY OTHER FRONTIER MODEL. >> GLOBAL HEAD OF TECHNOLOGY RESEARCH, MANDEEP SINGH, THANK

10:42 YOU. ANTHROPIC’S IPO FILING IS REVIVING ENTHUSIASM AROUND THE AI TRADE, HELPING TO LIFT U.S. TECH STOCKS AND CHIPMAKERS. MARK CRANFIELD JOINS US NOW WITH THE MARKETS IMPLICATIONS. POTENTIAL HERE FOR A RISING TIDE TO LIFT ALL BOATS BUT ALSO A HUGE POTENTIAL TO SUCK A LOT OF CAPITAL OUT OF THE MARKET SO WHAT SORT OF REACTION ARE WE EXPECTING? >> NOT JUST ANTHROPIC AS WELL. RAISING HUGE AMOUNTS OF MONEY AS WELL.

11:17 IT’S ONE OF THE BIGGEST EVER DEAL DAYS FOR WALL STREET. IN TERMS OF FUNDRAISING FOR VARIOUS COMPANIES PARTICULARLY IN THE PRIVATE SPACE. THERE IS A MASSIVE OVERHANG HERE ON MARKETS. THE EUPHORIA THAT YOU ARE SEEING RELATED TO ANTHROPIC IS PARTLY AT RELIEF, THE FACT THAT THERE IS SO MUCH INVESTED IN THE WHOLE AI THEME AND THAT THEY ARE STILL GOING TO GO AHEAD WITH THEIR IPO AND THERE WERE SOME CONCERNS MAY BE THE CONDITIONS WERE NOT EVEN BE GOOD ENOUGH FOR THEM TO DO THAT BUT THERE IS THE TALK OF THE SPACEX TIED UP AND OPENAI TO COME AS WELL SO WE ARE KEEPING

11:49 THE BANDWAGON ROLLING IN TERMS OF THAT. PEOPLE FORGET ABOUT IT PRETTY QUICKLY. IF THEY DON’T COME OUT WITH RESULTS AND PROJECTIONS WHICH ARE SATISFYING TO INVESTORS, WE WILL PRETTY SOON FORGET ABOUT ANTHROPIC AND THE MOVE THAT WE HAD YESTERDAY TO HELP LIFT MARKETS AND THAT WOULD BE DISAPPEARING PRETTY FAST BECAUSE PEOPLE IN THE END NEED TO DELIVER ON RESULTS. DON’T FORGET THAT PEOPLE LIKE ANTHROPIC ARE NOT MAKING MONEY YET AND THEY ARE NOT GOING TO BE MAKING ACTUAL REAL CASH

12:22 EARNINGS FOR SOME TIME TO COME YET AND THAT IS WHAT INVESTORS – THEY HAVE A COMMITTEE SHORT FUSE WHEN IT COMES TO SEEING DELIVERABLES IN TERMS OF THEY WANT TO SEE THOSE LANDING WHICH THEY ARE GETTING FROM THESE MAJOR COMPANIES AND PEOPLE LIKE NVIDIA, DELIVERING FANTASTIC RESULTS BUT A LOT OF THAT IS PRICED INTO THE MARKET ALREADY. SO WE DO STILL NEED TO SEE EXCELLENT RESULTS IN VERY POSITIVE OUTLOOKS FROM THE MAJOR COMPANIES THAT ARE DELIVERING THIS WEEK. OTHERWISE, WE WILL SOON FORGET ABOUT THE IDEA THAT ANTHROPIC IS GOING TO SAVE THE WORLD.

12:57 >> IS INTERESTING BECAUSE ABOVE THE HOOD, IT’S A LOT OF ENTHUSIASM. IF YOU TAKE A LOOK BELOW, THE THEME IS FOR ANTHROPIC AND REVENUE GROWTH IS COOLING. WE ARE SEEING THAT REINFORCED BY THE EARNINGS AS WELL. PROJECTED TO KEEP DECELERATING AS WELL FROM THE PACE WE ARE SEEING. GIVEN THAT, THIS IS A MIXED CATALYST BEFORE GETTING INTO A NUMBER OF THE RISKS WHEN IT COMES TO AI THAT WE HAVE JUST BEEN TALKING ABOUT. >> IN THE END, THESE COMPANIES ARE BURNING THROUGH AN ENORMOUS AMOUNT OF CASH, SPENDING MONEY VERY QUICKLY AND THAT IS WHY

13:30 THEY ARE RAISING MONEY VERY FAST. OF COURSE, PEOPLE ALSO TALK ABOUT ANTHROPIC WILL NEED TO BORROW A LOT OF DEBT AS WELL. ONCE THE IPO IS OUT OF THE WAY, YOU CAN EXPECT THEM TO GO INTO THE BOND MARKS AND TO BORROW LARGE AMOUNTS AS WE HAVE SEEN FROM THE OTHER HYPERSCALERS AS WELL. IT’S NOT THE END OF THE STORY BY ANY MEANS. THE SPENDING WILL CONTINUE. THE PROJECTIONS ARE ENORMOUS NOT JUST FOR ANTHROPIC BUFFER SPACEX , OPENAI AS WELL WELL INTO 2027 AND 2028. THERE IS A HUGE RUNWAY, A

14:05 COUPLE OF TRILLIONS OF DOLLARS WORTH AS WE HAVE BEEN TALKING ABOUT ON BLOOMBERG MANY TIMES BEFORE AND THAT NEEDS TO BE FUNDED. IT WILL CONTINUE TO PUT STRAINS ON THE BOND MARKET. THEY ARE ALREADY EXTREMELY WIDE IN THE CREDIT DEFAULT MARKET AND THEY CANNOT GO THAT MUCH FURTHER BEFORE SOMETHING STARTS TO BREAK. IT NEEDS CONTINUOUS POSITIVE MOMENTUM AND IS NOT EASY TO SUSTAIN THAT UNLESS THE MAJOR COMPANIES ARE PRODUCING STELLAR RESULTS. SO FAR, THAT HAS BEEN THE STORY IS PRETTY GOOD BUT EVERY EARNINGS SEASON GETS A HIGHER

14:41 AND HIGHER BAR SO THIS WEEK’S RESULTS ARE VERY IMPORTANT FOR THE NEAR TERM OUTLOOK IN THE MARKET. >> ALL RIGHT. MARK CRANFIELD, THANK YOU. WHILE WE WERE TALKING ABOUT ANTHROPIC, SOUTH KOREA RELEASED GDP NUMBERS FOR THE THIRD QUARTER AND IMPRESSIVE NUMBERS THEY WERE. 3.4% GROWTH ON YEAR. THAT HANDLED THE EXPECTATIONS OF 3.1% GROWTH. THAT WAS A 1% RISE FOR THE THIRD QUARTER. DIGGING INTO THE DATA WAS FAIRLY IMPRESSIVE AS WELL. GOVERNMENT SPENDING ALSO

15:18 INCREASED QUICKLY BUT IT WAS REALLY DEMAND FOR SEMICONDUCTORS AND THE BLOWOUT EXPORTS WE HAVE SEEN PUSHING THAT GROWTH RATE HIGHER. THE BANK OF KOREA SAID LAST WEEK SAID GROWTH IS LIKELY TO BLOW THROUGH ITS AUGUST FORECAST. WE ARE ALREADY PAST THAT. THE POTENTIAL FOR FURTHER TIGHTENING FROM THE BANK OF KOREA. MORE ON THE ANTHROPIC IPO. THE AI BUILD OUT AN IMPACT ON GLOBAL MARKETS. WE WILL SPEAK EXCLUSIVELY WITH THE GLOBAL CFO AND LATER, BLACKROCK’S GLOBAL FIXED INCOME

15:49 CEO, RICK. THIS IS BLOOMBERG. >> THE TOP GLOBAL HEADLINES WE ARE FOLLOWING THIS HOUR AND TOP OFFICIALS FROM SAUDI ARABIA, PAKISTAN, AND TURKEY MET

16:22 IRANIAN LEADERS IN EFFORTS TO DE-ESCALATE TENSIONS AND ENCOURAGE TALKS WITH THE U.S. AND IT COMES AS WASHINGTON IS CONSIDERING RESUMING A BOMBING CAMPAIGN AFTER MONTHS OF DEADLOCK. PRESIDENT TRUMP HAS REPEATEDLY SAID HE’S CONSIDERING ACTION AFTER THE U.S. MIDTERM ELECTIONS. BLOOMBERG HAS LEARNED TO THE EUROPEAN UNION IS PLANNING TO USE SAFEGUARD MEASURES TO CUT IMPORTS OF CHINESE PRODUCTS INCLUDING CHEMICALS, FURNITURE, AND MACHINERY. IT MAY BE PRESENTED AS SOON AS THE FIRST QUARTER OF 2027 AND COULD COME AS EITHER IMPORT CAPS OR TARIFFS. THE LATEST ACTION IS PART OF A

16:54 BROAD PUSH TO REDUCE ITS MASSIVE TRADE DEFICIT WITH BEIJING. >> BRAZILIAN MARKETS CRATERED AS THE ECONOMIC REALITY OF LULA DA SILVA’S WIN CAME TO THE FORE AND INVESTORS UNWOUND BULLISH BETS THAT HIS RIFLE WOULD PUT AN END TO THE GOVERNMENT’S MASSIVE BUDGET DEFICIT. LET’S GET TO SAO PAULO NOW AND OUR DEPUTY CHIEF EMERGING MARKETS ECONOMIST AT BLOOMBERG ECONOMICS, ADRIANA. THANKS FOR JOINING US. BRAZIL IS STILL WITH THE SAME PROBLEMS TODAY THAT IT HAD TWO DAYS AGO. HIGH RATES, RECORD DEBT, SO

17:26 WHAT IS THE PLAN AS HE EMBARKS ON HIS FOURTH TERM? >> GOOD MORNING, EVERYONE. THANKS FOR HAVING ME. THERE IS NO PLAN. THE REALITY IS THAT WE ARE IN THE DARK. WE DON’T KNOW HOW THE GOVERNMENT IS GOING TO TACKLE IT. LARGE PRIMARY DEFICIT BUT IT’S A VERY HIGH FISCAL DEFICIT IN TOTAL. THE INTEREST RATE BURDEN ON THE DEBT IS MASSIVE.

17:58 TO BE VERY FAIR, THERE WAS A PLAN EITHER FROM THE OTHER CANDIDATES SO THE TRUTH IS THERE IS SHIFTING EXPECTATIONS, DIFFERENCE IN EXPECTATIONS WITH INVESTORS GIVING THE DEFEATED CANDIDATE A LOT MORE CREDIT THAN HIS PROPOSALS WARRANTED. GUATEMALA DOES NOT GET THE SAME BENEFIT BECAUSE HE HAS BEEN IN POWER FOR THE PAST FOUR YEARS AND HAS NOT DELIVERED THE FISCAL ADJUSTMENT AS FAST AS THE MARKET WANTED HIM TO.

18:29 >> I LOVE THAT YOU PUT IT VERY BLUNTLY THAT THERE IS NO PLAN AND WE ARE IN THE DARK. WHAT ARE THE IMPLICATIONS FOR THE CENTRAL BANK? THERE IS MORE HEAVY LIFTING TO BE DONE BY THE CENTRAL BANK? ARE THEY GOING TO HAVE TO SEE HOW THIS GOES AS WELL? >> THE CENTRAL BANK IS IN A VERY DELICATE POSITION BECAUSE THE MONETARY POLICY IS VERY TIGHT IN BRAZIL. WE ARE TALKING ABOUT A COUNTRY WHERE THE NOMINAL INTEREST RATE IS 13.75%. IT WAS ON A VERY GRADUAL

19:02 DISSENT WITH INTEREST RATES OF 20 FIVE BASIS POINTS PER MEETING. IN REAL TERMS, EIGHT POINT 7% WHICH IS STILL A LOT CONSIDERING THE NEUTRAL RATE IS SOMETHING AROUND 5% TO 6%. ’S CENTRAL BANK IS IN A TIGHT SPOT. THE BIGGEST PROBLEM FOR THEM IS TWOFOLD ACTUALLY. NUMBER ONE IS WHAT THEIR OWN FORECASTS ARE GOING TO SHOW FOR INFLATION. WE THINK THAT THIS FORECAST IS SENSITIVE TO WHAT HAPPENS TO THE EXCHANGE RATE AND THE EXCHANGE RATE AT 8%.

19:37 WITH THE EXCHANGE RATE AT 5.5% WHICH IS MORE OR LESS WHERE WE TRADED MOST OF TODAY, THIS MEANS THE CENTRAL BANKS FORECAST IS GOING TO BE WAY ABOVE THE CENTER OF THE TARGET. IT’S HARD FOR THEM TO JUSTIFY A LOT OF RATE CUTS. AT THE SAME TIME, THEY HAVE A PROBLEM WITH INFLATION EXPECTATIONS PRECISELY BECAUSE EVERYBODY IS IN THE DARK. YOU HAVE THIS HUGE DISPERSION OF INFLATION FORECASTS BECAUSE INVESTORS DON’T KNOW WHAT TO EXPECT IN TERMS OF HOW MUCH FISCAL IMPULSE WILL BE INTRODUCED IN THE FOLLOWING

20:13 YEARS. BECAUSE OF THAT, THAT MAKES AS YOU PUT IT – THIS IS HUGE LIFTING FOR THE CENTRAL BANK. THEY NEED MONETARY PART – POLICY TIGHTER THAN THEY WOULD OTHERWISE AND IT’S A PROBLEM FOR THE INTEREST RATE CUT PATH THAT THEY HAD IN MIND. HAVING SAID THAT OF COURSE, THINGS COULD GET A LOT BETTER IF PRESIDENT LIM MADE A SIGNAL THAT THEY ARE GOING TO DO SOMETHING IN TERMS OF THE FISCAL DEFICIT. I THINK THAT HE WILL. NOT SURE HE WILL DO IT IN TIME AFTER THE NEXT POLICY MEETING.

20:45 >> WE KNOW THE FINANCIAL RISK IS NO LONGER JUST AN ABSTRACT CONCERN WHEN IT COME TO THE BRAZILIAN ECONOMY NOW. WHEN YOU TAKE A LOOK AT HOUSEHOLDS DROWNING IN DEBT AND BUSINESS SENTIMENT, WHAT IS SORT OF THE GRASSROOTS CHALLENGES AT THE MOMENT DO YOU THINK? >> THE CENTRAL BANK NEEDS TO WEIGH ALL THESE RISKS BECAUSE IT’S NOT JUST THAT THE PUBLIC SECTOR – WE ALSO HAVE A PRIVATE SECTOR. WE HAVE THAT DYNAMIC THAT IS

21:18 VERY COMPLICATED BECAUSE WE ARE TALKING ABOUT A VERY HIGH INTEREST RATE. MOMENTS ARE GETTING IN WITHOUT ANY KIND OF INTEREST RATE RELIEF. RIGHT NOW, WE DON’T HAVE SIGNS OF BANK STRESS, FOR INSTANCE, BUT I THINK THIS IS SOMETHING THE CENTRAL BANK IS GOING TO BEAR IN MIND AND IT’S ONE OF THE REASONS WHY ABDUL EXPECTS PERHAPS THE BAR HAS RISEN FOR ANOTHER RATE CUT, I DON’T THINK THAT THE CENTRAL BANK WILL GO

21:49 AS FAR AS HIKING THE INTEREST RATE AS A RESPONSE TO TODAY’S MARKET ROUT. THE CENTRAL BANK IS VERY CONSERVATIVE IN TERMS OF POLICYMAKING BUT ALSO IN THE SENSE NOT ONLY OF BEING HAWKISH BUT ALSO OF BEING VERY PATIENT SO THEY MIGHT BE ON A WAIT AND SEE MODE TO SEE IF AT MOOD EXTENDS FURTHER INTO NEXT WEEK. >> DEPUTY CHIEF EMERGING MARKETS ECONOMIST AT BLOOMBERG ECONOMICS HERE WITH US JOINING US FROM SAO PAULO.

22:20 TODAY’S BIG TAKE FOCUSES ON THE INTERPLAY BETWEEN BRAZILIAN POLITICS AND THE COUNTRY’S FINANCIAL RISK. YOU CAN CHECK OUT THAT STORY ON THE TERMINAL AND IT WILL ALSO BE UP ON BLOOMBERG.COM LATER TODAY. MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. >> LET’S GET THE LATEST FROM THE CORPORATE FRONT.

22:55 META IS LOOKING TO RAISE $95 BILLION TO SUPPORT AI INVESTMENTS. THE COMPANY IS OFFERING $35 BILLION OF STOCK AND PLANS TO RAISE $60 BILLION THROUGH THE AT THE MARKET SHARE SALE PROGRAM. NVIDIA, AMD AND BROADCOM HAVE AGREED TO BUY SOME OF THE SHARES. SPACEX SIGNED A LEASE WITH APOLLO TO PAY FOR THE CHIPS NEEDED TO FUEL ITS AI AMBITIONS. MORE IN A MOMENT. THIS IS BLOOMBERG. ♪

23:38 >> THIS IS THE ONE EVERYONE HAS BEEN WAITING FOR. WE NOW AI IS THE MEGA TREND OF THE NEXT SEVERAL DECADES AND THIS IS THE FIRST OPPORTUNITY TO TRULY GET SOFTWARE EXPOSURE. >> THIS IS A TREMENDOUS MILESTONE. >> TO HAVE A COMPANY GOING PUBLIC LIKE THIS IS EXTRAORDINARY FOR ALL POTENTIAL PUBLIC MARKET INVESTORS AS THEY THINK ABOUT WHERE TO PUT THEIR MONEY AROUND AI. >> THE KEY IN TERMS OF INVESTMENTS IS THE NUMBERS ARE EXTRAORDINARY, THEY WILL CONTINUE TO GROW, BUT THEY ARE

24:10 MONETIZING INVESTMENTS. >> THE GROSS MARGINS AND LOTS OF CASH ON THE BALANCE SHEET, AND WE WILL HAVE MORE. >> THEY WILL FINANCE THEMSELVES AND CAPITAL MARKETS WILL FUND THEM LIKE THEY FUNDED OTHER COMPANIES. >> OUR GUESTS ARE REACTING TO ANTHROPIC’S IPO FILING. TODAY, IT LOOKS LIKE A POSITIVE SENTIMENT, REVIVING THE TEPID ENTHUSIASM OR OVERRIDING CONCERNS OVER THE AI TRADE.

24:42 DOES IT FIX THOSE CONCERNS? IF YOU DIG INTO THE FILING, THE PAGE IS DEDICATED TO THE RISKS SUGGEST WE SHOULD BE PAYING MORE ATTENTION TO THE RISKS. I WONDER, WHEN YOU TALK ABOUT THE BIG SOUND OF FUNDS GETTING VACUUMED THROUGH THE MARKET, IT’S NOT JUST ANTHROPIC. YOU GOT SPACEX, META, TOM – BROADCOM. THAT CHALLENGE, COMPETING FOR CAPITAL AS WELL AS COMPETING

25:13 FOR COMPUTING POWER CONTINUES. PAUL: THE RISKS GO BEYOND THE FINANCIAL AND REGULATORY. THERE IS SPACE DEDICATED TO EXISTENTIAL RISK, SO A UNIQUE SECTION OF THE FILING. IN TERMS OF WHAT THAT MEANS FOR MARKETS, MOSTLY GOOD STUFF AT THE MOMENT. KOREA SEEING UPSIDES FOR THE KOSPI AT THE OPEN OF TRADE. OTHER GOOD NEWS FOR KOREA, THE GDP NUMBERS, FOR THE THIRD

25:45 QUARTER, 3.4% ON YEAR, A HANDY BEAT. SK HYNIX IS PREPARING TO ANNOUNCE ADDITIONAL SHAREHOLDER RETURNS. AFTER GETTING BEATEN UP OVER THE PAST FEW WEEKS, WE SHOULD SEE A DECENT BOUNCE FOR THE KOSPI. EXPECTING TO SEE AN INCREASE FOR THE NIKKEI, FUTURES BETTER BY 1.2% AND RELIEF FOR OIL PRICES AS WELL, SAUDI, PAKISTANI AND TURKISH LEADERS ARE ON THEIR WAY TO ME TO DIFFUSE TENSION. BRENT CRUDE AROUND $115 PER BARREL. HAIDI:

26:16 THIRD QUARTER PROFITS BEAT ESTIMATES ON THE BACK OF HIGH INTEREST RATES. THE S&P, AFFIRMING THE BANKS A RATING. THE BNY ADOPTS AI AS PART OF ITS STRATEGY. JOINING US IS A BNY GLOBAL CFO. GREAT TO HAVE YOU WITH US. LET’S START WITH THE AI PIECE. IT IS TOP OF MIND.

26:46 HOW HAS THAT ADOPTION WITHIN YOUR ORGANIZATION PLAYED OUT FOR THE PAST FEW YEARS? >> MORNING AND IT’S A PLEASURE TO BE BACK IN HONG KONG. A LOT OF ENERGY IN THE REGION SO IT IS EXCITING TO BE HERE. ON THE AI JOURNEY AS IT RELATES TO BNY, WE HAVE BEEN ON THIS STORY FOR A LITTLE OVER THREE YEARS. OUR CHAIRMAN AND CEO IDENTIFIED

27:17 EARLY ON THE AI FOR FINANCIAL SERVICES AND INDUSTRY WRIT LARGE WOULD BE A TRANSFORMATIVE TECHNOLOGY. WE HAVE BEEN EMBARKING ON THIS QUITE INTENSELY OVER THE LAST THREE YEARS. WE HAVE A STRATEGY AND THE FIRM CALLED AI FOR EVERYONE, EVERYTHING, EVERYWHERE. IT HAS BEEN ABOUT DEMYSTIFYING AI, GIVING TOOLS AND SKILLS TO OUR PEOPLE. WE DON’T TALK ABOUT IT IN RELATION TO EFFICIENCY YOUR JOB CUTS. WE TALK ABOUT IT IN RELATION TO UPSCALING AND TRYING TO DO BETTER THINGS, INNOVATE AND BE MORE FOR CLIENTS AND CREATE

27:49 CAPACITY TO DO MORE THINGS. AI WITHIN THE HALLOWED WALLS OF BNY IS VIEWED AS AN OPTIMISTIC THING RATHER THAN A LOT OF THE ADVERSE PUBLICITY THAT IS GARNERS IN THE BROADER MARKET. WE ARE PLEASED WITH WHERE WE ARE AT. WE FEEL IT IS GOING TO REALLY POWER A LOT OF INITIATIVES FOR US GOING FORWARD ON OUR CUTE THREE EARNINGS CALL – Q3 EARNINGS CALL. WE TALKED ABOUT HAVING AGENTS IN PRODUCTION.

28:21 WE ARE EXCITED ABOUT THE TRANSFORMATIVE NATURE OF THE TECHNOLOGY, AND NOT IN A WAY THAT GETS WRITTEN ABOUT IN THE MEDIA. HAIDI: ONE OF THE WAYS IT GETS WRITTEN ABOUT UNFORTUNATELY FROM YOUR SIDE, IS THAT IT IS TRANSFORMATIVE FOR LABOR FORCES. WE HAVE SEEN BANKS, INCLUDING IN AUSTRALIA, ANNOUNCING LAYOFFS AS A RESULT OF AI. DO YOU SEE THAT IN YOUR ORGANIZATION? IF SO, WHAT ROLES DO YOU THINK WILL BE TRANSFORMED OR ELIMINATED? DERMOT:

28:55 SO – SO WE SET OUT THREE STRATEGIC PILLARS IS A COMPANY A COUPLE YEARS AGO. THE MORE FOR CLIENTS, RUN OUR COMPANY BETTER AND POWER OUR CULTURE. THE MOST IMPORTANT OF THOSE THREE PILLARS IS POWER OUR CULTURE. WITHIN THAT, IT HAS BEEN ALL ABOUT UPSCALING, COMMUNICATION, GIVING OUR EARLY CAREERS TALENT, I THINK WE HIRED ROUGHLY 1000 PEOPLE THIS YEAR FROM UNIVERSITIES AND THEY COME WITH AI TOOLS AND SKILLS AND PROFICIENCIES.

29:30 SO YOU CAN’T THINK AI, YOU HAVE TO MOVE FORWARD WITH IT AND EMBRACE IT IN THE BEST WAY POSSIBLE. WE DON’T THINK ABOUT IT IN TERMS OF EFFICIENCY AND JOB CUTS. THREE YEARS AGO, BNY WAS ROUGHLY A 52,000 HEADCOUNT ORGANIZATION GLOBALLY. TODAY WE ARE 46,000, 47,000. BUT THAT IS NOT REALLY IN RELATION TO AI. THAT IS JUST ABOUT RUNNING THE COMPANY BETTER, DOING MORE WITH THE DOLLARS WE HAVE. AI PLAYS A ROLE IN THAT, BUT WE ARE NOT USING AI TO CUT JOBS.

30:02 THAT IS NOT OUR STRATEGY. PAUL: THERE ARE CONCERNS AROUND AI. ANOTHER CONCERN IS THE RISK OF AUTONOMOUS AGENTS GOING ROGUE. THERE IS A NEED FOR ROBUST GUARDRAILS. WHAT ARE YOU EXPLORING IN THAT RESPECT? DERMOT: BNY BEING AROUND FOR 242 YEARS HAS WEATHERED A LOT OF DIFFERENT STORMS, POLITICAL, ECONOMIC OR OTHERWISE. RESILIENCY IS AT THE CORE OF

30:34 EVERYTHING WE DO. RESILIENCE FIRST FOR EVERYTHING. SO WE KIND OF TAKE A RESPONSIBILITY IN THIS AREA VERY SERIOUSLY. WE HAVE A LOT OF SAFEGUARDS IN PLACE. WE WERE ONE OF THE EARLY ADOPTERS OF6. WE WERE PART OF PROJECT GLASS WING. WE HAVE A STRONG CYBER SECURITY POLICY SO IT IS SOMETHING WE TAKE SERIOUSLY. IT IS FAIR TO ACKNOWLEDGE THAT CYBER RISKS ARE HIGHER AS A RESULT OF AI, AND THE BEST WAY

31:05 TO DEAL WITH THAT IS THROUGH HAVING THE BEST DEFENSE. WE INVESTED HEAVILY IN DEFENSIVE STRATEGIES IN RELATION TO THE AI THREAT. BUT GOING BACK TO THE EARLIER QUESTION ABOUT JOB LOSSES. THE INTERNET 26 YEARS AGO ALSO HAD A LOT OF THAT NARRATIVE AROUND IT. AND YOU CAN SEE TODAY WHERE ANTHROPIC IS FILING FOR AN IPO, WHERE IT IS MAKING MONEY, IT IS CASH GENERATIVE. IN THE YEARS TO COME I CAN SEE OTHER INDUSTRIES AND A LOT OF

31:37 JOBS BEING CREATED ON THE BACK OF THIS BOOM. I THINK THERE ARE LOTS OF THINGS TO LOOK FORWARD TO, THAT WE HAVEN’T THOUGHT ABOUT YET. PAUL: ALIGNED TO THAT POINT, DO YOU FEEL THE AMOUNT BEING SPENT ON AI AT THE MOMENT REFLECTS THE VALUE THAT COULD BE EXTRACTED FROM IT? DERMOT: TIME WILL TELL I THINK. NOBODY REALLY KNOWS THE ANSWER TO THAT. AS THE CFO, I GET ASKED A LOT OF QUESTIONS AROUND TOKEN MX.,

32:10 AI SPEND, AND HOW YOU MEASURE IT. IT IS LIKE ASKING IF I LOOK AT THE ELECTRICITY BILL AS IT RELATES TO CLOUD COMPUTING COSTS. IT IS AN INPUT FOR US. WE ARE A COMPANY THAT SPENDS $4 BILLION PER YEAR ON TECHNOLOGY. AI IS A MODEST BUT IMPORTANT PART OF THAT. OVER TIME, WE LOOK AT, DOES THE PROJECT, THE INITIATIVE WE ARE TRYING, MAKE SENSE? AND WHAT OTHER INPUT COSTS?

32:42 IT IS NOT MEASURE AI FOR AI’S SAKE. THAT IS NOT HOW WE SET ABOUT GOING TO DO IT BUT OVER TIME, WE WILL SEE. A LOT OF TALK ABOUT THE HYPERSCALERS PUTTING A LOT OF MONEY INTO DATA CENTERS AND IS THE RETURN WORTH IT? AT THE END OF THE DAY I THINK IT WILL COME BACK TO, IS THE DEMAND FOR INTELLIGENCE, WHICH IS WHAT AI IS, OVER THE NEXT DECADE, THERE? MOST PEOPLE WOULD SAY FUNDAMENTALLY YES, AND THE QUESTION IS HOW DO YOU CREATE THE SUPPLY TO MEET THAT DEMAND?

33:16 HAIDI: AS AN ORGANIZATION, ARE YOU AGNOSTIC TO WEAR THESE AI MODELS COME FROM IN TERMS OF CAPABILITY AND COST? THE CHINESE MODELS ARE GETTING CHEAPER AND MORE CAPABLE. IS THAT SOMETHING YOU WOULD CONSIDER, OR ARE YOU USING THAT? DERMOT: WE ARE VERY PROUD OF OUR AI STRATEGY. WE HAVE OUR PLATFORM CALLED ELIZA, AND IT HAS BEEN UP AND RUNNING FOR TWO AND A HALF, THREE YEARS. IT IS NAMED AFTER ALEXANDER HAMILTON’S WIFE, THE FOUNDER OF

33:47 BNY. OUR PLATFORM IS LLM AGNOSTIC SO WE USE MODELS FROM HYPERSCALERS, WE USE OPEN-WEIGHT MODELS, AND AS WE FACTOR IN SUPPLY AND DEMAND, WE USE THE RIGHT MODELS FOR THE RIGHT PROJECT OR THE RIGHT INITIATIVE. WE DON’T HAVE LOYALTY TO ANY ONE PARTICULAR MODEL. OVER TIME, AS COSTS COME INTO PLAY AND WE DON’T USE EXPENSIVE

34:18 MODELS FOR CHEAP QUERIES OR INITIATIVES, WE HAVE BECOME QUITE DISCIPLINED AND DEVELOPED SOPHISTICATED TELEMETRY TO TRACK HOW WE ARE USING OUR TOKENS. PAUL: BNY GLOBAL CFO. WE APPRECIATE YOUR TIME. STILL TO COME, SOUTH KOREA CONSIDERS USING SEMICONDUCTOR DRIVEN TAX GAINS TO REDUCE GOVERNMENT BOND YIELDS. WE HEAR ABOUT THOSE PLANS FROM THE BUDGET MINISTER IN THE NEXT

34:49 HOUR. THIS IS BLOOMBERG. ♪ PAUL: ASIAN MARKETS WILL BE TRADING ABOUT THE AI CAPEX TRADE AS U.S. COMPANIES RAISE MONEY. LOCAL INVESTORS IN KOREA ARE LIKELY TO CHEER REPORTS OF SHAREHOLDER RETURN PROGRAM. OUR MARKETS WERE ORDERED JOINS US NOW. LOOKING AT THE ASIA SET UP, HOW

35:26 MUCH OF A TAILWIND ARE WE ANTICIPATING FROM THE ANTHROPIC I.E. – IPO ANNOUNCEMENT? >> IT IS THE HISTORIC NATURE OF THE CAPITAL RACES. WE HAD ANTHROPIC, META, BROAD, AND SPACEX AND THE SIGNIFICANT CHUNK OF THE MONEY WE’LL HEAD TO ASIA. GIVEN THE COMPETITION, WE HAVE SEEN THAT IN THE ANTHROPIC FILING. HOW MUCH THEIR COMPUTING BILL IS BALLOONING AT THIS LEVEL. WE SAW THAT WITH THE AMBITION

35:57 AROUND META, CLEAR THAT THEY WANT TO CHASE THE AGENTIC AI THEME AND THAT WILL SPILL OVER IN ASIA WHETHER THERE YOU TALK ABOUT MEMORY IN KOREA, SEMICONDUCTORS AND JAPAN, TSMC FOR THE FOUNDRY BUSINESS AND EVEN THE COMPUTATIONAL STUFF IN TAIWAN. WE ARE GOING TO HAVE A LOT OF THAT MONEY COMING INTO ASIA AND WE HAVE EXPECTED THAT IN TERMS OF ANALYST ESTIMATES, BUT THE CERTAINTY IS GOING TO BE A REALLY FOR THE MARKET THAT HAD BEEN REPRICING OPTIMISM. SO IT WAS INTERESTING TO SEE

36:32 SPACEX RETRACE A LITTLE BIT, MORE CALM RETURNING TO THE MARKET, AND IN TERMS OF POSITIONING, WE HAVE SEEN FOREIGNERS REALLY UNWIND TO TECH TRADE IN ASIA, KOREA AND TAIWAN AND THE POSITIONING LOOKS EXTENDED NOW. WE ARE SEEING ON THE EARLY PRICING STRONG FUTURES IN JAPAN, A DECENT START IN KOREA. SO IT IS LOOKING UP AFTER A TURNING SENTIMENT OVERNIGHT. HAIDI: IS IT A COMPLETE NARRATIVE FLIP, GIVEN THAT AS YOU POINT OUT, CAPITAL IS GOING TO END UP IN KOREA? ANTHONY: FOR SURE.

37:08 THERE WAS SKEPTICISM AROUND HOW FAR THE TORRENT OF MONEY WOULD BE ABLE TO BE RAISED. WE HAD GUESTS ON THE PROGRAM YESTERDAY TALKING ABOUT HOW CAPITAL WAS THE NEXT SHORTAGE. THE SHORTAGE OF CAPITAL OVERCAME THE SHORTAGE OF COMPUTATIONAL POWER AND CHIPS. AND NOW WE SEE THE FLIP A LITTLE BIT. IN KOREA, WE ARE HEARING AT LEAST SK HYNIX IS LISTENING TO THE VOICE OF THE MARKET. WE CONTINUE TO HEAR LOCAL REPORTS OF SHAREHOLDER RETURN PROGRAMS PUTTING THE EARNINGS

37:38 OF SAMSUNG AND SK HYNIX IN A SPOTLIGHT. IT IS NOT JUST THE AMERICANS THROWING MONEY INTO AI. WE NEED THE KOREANS TO TAKE THE MONEY AND RETURN IT TO SHAREHOLDERS. IN TERMS OF PROFITABILITY AND MARGINS. THERE IS SOME SIGN THAT MIGHT BE HAPPENING. TODAY WE WILL WATCH FOR AND BUYING, WHETHER THAT HAS TURNED AROUND, GO ALONGSIDE THE RESILIENCE LOCAL INVESTOR BASE. PAUL: TELL US ABOUT ELEMENTAL, MIGHT BE HAVING A MOMENT, A COMPANY

38:12 SPECIALIZING IN NUCLEAR ENERGY, SEEKING TO RAISE $750 MILLION. WE HEARD A LOT ABOUT SMALL MODULAR NUCLEAR REACTORS, BUT THEY ARE NOT THAT COMMON. IS THIS AN IDEA WHOSE TIME HAS FINALLY COME? ANTHONY: IT APPEARS THAT WAY WITH POWER APPEARING AS A KEY CONSTRAINT IN TERMS OF THE BUILDOUT IN AI. IN KOREA, THEY HAVE THE SKILL SET AND THE WILLINGNESS TO DEPLOY THAT TECHNOLOGY AND IT WILL BE INTERESTING TO WATCH HOW THE KOREAN NUCLEAR SUPPLIERS TRADE TODAY. OVERNIGHT IN THE U.S. WE HAD A STRONG PERFORMANCE FROM THAT SECTOR. BLOOM ENERGY HAS BEEN TRADING

38:47 BACK AND FORTH, AND THAT NAME WAS STRONG. GE, SIEMENS WAS STRONG. THE POWER, LAND AND SHELL TEAM HAS BEEN PERCOLATING IN THE MARKET. IT HAS BEEN OUTPERFORMING. THIS COMPANY HAS HAD – IS ABLE TO RAISE A BIG AMOUNT OF MONEY FROM VENTURE CAPITAL AND SAMSUNG CMT, WHICH IS A SUBJECT MATTER SPECIALIST. THAT SHOULD REASSURE INVESTORS. HAIDI:

39:17 ANTHONY STEPHENS WITH US. THE IPHONE, ONE OF APPLES NEW PRODUCTS, IS GROWING – DRAWING COMPLAINTS AFTER THE FOLDABLE DISPLAYS CRACKED. LET’S BRING IN OUR EDITOR. I HAVE TO SAY THE VIDEOS I HAVE SEEN LOOK SLEEK AND COMPELLING, BUT PERHAPS THIS HASN’T BEEN THE CONSISTENT USER EXPERIENCE. >> I THINK THIS IS THE MINORITY OF USERS THAT HAD THIS HAPPEN TO THEM. WE DON’T KNOW WHAT PERCENTAGE,

39:52 BUT APPLE DESCRIBED IT AS THE MINORITY OF PEOPLE. AND ANOTHER COMMENT THEY MADE WHEN THEY CONFIRMED THIS WAS AN ISSUE, USUALLY IF YOU HAVE THIS PROBLEM, YOU CAN TELL FAIRLY QUICKLY IN TERMS OF HOW LONG YOU HAVE HAD THE IPHONE. I THINK THAT IS KIND OF REASSURING TO SOMEBODY WHO HAS USED IT FOR A FEW DAYS AND HASN’T SEEN ISSUES. THAT RAISES THE QUESTION OF WHETHER APPLE CAN IDENTIFY THE UNITS BEFORE THEY SELL THEM THAT HAVE THE PROBLEM. PAUL:

40:25 HOW SERIOUS IS THIS GOING TO BE LONG-TERM FOR APPLE? I REMEMBER WHEN THE IPHONE 6 CAME OUT EVERYBODY WAS LOSING THEIR MINDS OVER THE FACT THAT IT BENT. I DOUBT ANYBODY REMEMBERS THAT. COULD THIS GO THE SAME WAY? NICK: THERE WAS AN EARLIER PROBLEM WITH AN ANTENNA WHERE IF YOU PUT, IF YOU HELD IT A CERTAIN WAY THE RECEPTION WOULD GO DOWN. APPLE IN BOTH OF THOSE CASES FIXED THE PROBLEM. IT WAS NOT A HUGE ISSUE IN THE LONG TERM. HERE, THE ONLY CAVEAT IS YOU

40:56 ARE DEALING WITH A PHONE THAT IS VERY EXPENSIVE. IT STARTS AT $2000. MAYBE THAT ELEVATES EXPECTATIONS. BUT I THINK IF APPLE CAN REPLACE THE UNITS THAT ARE DEFECTIVE, ENSURE THAT THERE ARE NO MORE DEFECTIVE UNITS GOING OUT INTO INVENTORY AT LEAST OVER THE NEXT FEW MONTHS, I THINK THEY COULD PUT THIS IN THE REARVIEW MIRROR. BUT THAT IS A BIG IF. HAIDI: A HIGH ARE THE STAKES FOR THIS

41:27 PRODUCT? ? THIS IS A MASSIVE DESIGN CHANGE FOR A STALWART PRODUCT. DOES IT MAKE AN IMPACT WHEN IT COMES TO REVENUE PROJECTIONS? THEY WERE DISMISSIVE ABOUT THE COMPETITION AS WELL. NICK: I DO THINK THIS WILL RAISE THE SELLING PRICE OF THE IPHONE. THE IPHONE IS ALREADY APPLE’S BIGGEST MONEYMAKER. IT COUNTS DEPENDING ON WHAT QUARTER, THE MAJORITY OF THEIR SALES AND A LOT OF QUARTERS.

41:58 THIS WILL BE THE KIND OF THING THEY WANT TO HELP PRESERVE GROWTH IN THE NEXT FEW QUARTERS. IPHONE GROWTH HAS ALREADY BEEN STRONG FOR A PRODUCT THAT IS ALMOST 20 YEARS OLD. SO THIS IS KIND OF, IT IS A PRETTY BIG HIGH-STAKES ISSUE, MAKING SURE THEY GET THIS RIGHT. THERE IS ALSO, THERE IS A FAIR AMOUNT OF STRENGTH WITHIN THE DIVISION IN TERMS OF THE IPHONE 18 PRO AND PRO MAX AND THE OTHER PHONES THEY ARE PLANNING TO RELEASE IN THE COMING MONTHS. SO I WANT TO GET THIS RIGHT,

42:29 BUT IT’S ONE OF SEVERAL PHONES THEY HAVE. PAUL: SENIOR TECH EDITOR NICK TURNER THERE. WE HAVE MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. ♪ PAUL: CBC MARATHON MANAGING PARTNER

43:00 BRUCE RICHARDS BELIEVES CAPITAL MARKETS WILL CONTINUE TO FUND ANTHROPIC AND EXPECTS THE COMPANY TO ACHIEVE PROFITABILITY WITH ITS CLOSED AI MODEL AFTER ANTHROPIC FILED FOR IPO. >> ANTHROPIC WILL DO JUST FINE. THE LAST TIME WE SAW A $1 TRILLION MARKET CAP COMPANY COME TO MARKET, SPACEX, ANTHROPIC $2.5 TRILLION. WHATEVER THE NUMBER IS WE WILL SEE. $100 BILLION IN THE IPO RAISED. THEY WILL DO FINE. IT IS A SOLID COMPANY. THEY ARE GROWING RAPIDLY. THEY HAVE NICE REVENUE

43:32 TRAJECTORY. SO THEY WILL BE ABLE TO FINANCE THEMSELVES IN THE CAPITAL MARKETS WILL FUND THEM LIKE THEY FUNDED OTHER TRILLION DOLLAR COMPANIES. LET’S NOT FORGET THAT. THE QUESTION IS, OPEN-WEIGHT VERSUS CLOSED WEIGHT MODELS. THE SOFTWARE INDUSTRY, WE HAVE SEEN OPEN AND CLOSED WORK OUT WELL. THEY COEXIST TOGETHER.

44:04 SO YOU HAVE ANDROID BEING SUCCESSFUL, BUT THE PROPHETS ACCRUED TO THE CLOSED WEIGHTS OR THE CLOSED BOTTLES. SO APPLE, MICROSOFT AND IN THIS CASE ANTHROPIC WILL CAPTURE PROFITABILITY. THEY WILL BOTH BE ABLE TO COEXIST. THERE IS A HUGE SHORTAGE OF COMPUTE AND A SHORTAGE OF THE NEED FOR THIS. SO GENERALLY, RATHER CONSTRUCTIVE WHEN IT COMES TO ANTHROPIC.

44:35 I THINK YOU HAVE TO BREAK OUT THE AI SPACE, GIVEN THE $10 TRILLION SPEND IN THE UNITED STATES BETWEEN NOW AND THE NEXT FOUR YEARS. THESE ARE MORGAN STANLEY’S NUMBERS. YOU HAVE TO LOOK AT THE DATA CENTER CONSTRUCTION, HYPERSCALERS, THE NEO-CLOUDS, AND THE GPU AND ASSET-BASED FINANCING. THEY ARE DIFFERENT ELEMENTS OF RISK. SOME ARE GOOD AND SOME ARE NOT. >> LET’S TALK ABOUT THE NOT SUCH GOOD RISK. I THINK YOU MIGHT AGREE WITH MR. MUSK. HE PUT OUT A MESSAGE YESTERDAY SAYING THAT MARKETS HAVE ENTIRELY SHUT OFF HER

45:09 COMPANIES THAT DON’T HAVE SUBSTANTIAL REVENUE THAT ARE INDEPENDENT OF AI DATA CENTERS, WARNING THESE NEO-CLOUDS MIGHT CEASE TO BE BUSINESSES BECAUSE THEY WON’T BE ABLE TO RAISE DEBTS. OUR DEBT MARKETS PUSHING BACK? >> THERE ARE TWO ELEMENTS OF NOT SO GOOD. ON THE GOOD I LIKE THE GPU FINANCING AND SECURED FINANCING AGAINST THE PICKS AND SHOVELS AND YOU HAVE THAT COLLATERAL. I LIKE THE HYPERSCALER RISK. THEY ARE AA AND I.T. RATED AND GENERATING HUGE AMOUNTS OF FREE CASH FLOW AND

45:45 ABLE TO TAP, YOU SAW META, ABLE TO TAP EQUITY MARKETS AND FINANCING MARKETS WITH THE RATINGS. THOSE ARE THE RISKS THAT MAKE SENSE TO LEAN INTO. HAIDI: THE CBC MARATHON PARTNER ON INTEREST. HOW WE ARE SETTING UP, EXPECTING ANTHROPIC EXUBERANCE TO AT LEAST STAGE OF SHORT-TERM REVIVAL WHEN IT COMES TO THE AI TRADE, WHICH CAME UNDER PRESSURE. IT IS NOT JUST ANTHROPIC.

46:19 WE SPOKE ABOUT THIS ORCHESTRATED STORM OF FINANCING EFFORTS WE ARE SEEING FROM META, BROADCOM, SPACEX AS WELL. A LOT OF THAT UNDER THE HOOD ELEMENTS MAY SUGGEST FUTURE RISK OR AI BUT A SOLID START FOR THE SESSION TODAY. THE MARKET OPENS OUR NEXT. ♪

46:55 HAIDI: DOES THE ASIA TRADE COUNTING DOWN TO ASIA’S MAJOR MARKET OPENS AND A STRONG TAILWIND WHEN IT COMES TO THE REVITALIZATION OF THE AI AMTEK PARADE, WHEN IT COMES TO SEMICONDUCTORS IN JAPAN, CHIP NAMES IN KOREA. SOME OF THOSE COMPANIES MIGHT BENEFIT FROM THE CAPITAL CURRENTLY RAISED BY ANTHROPIC GOING INTO THE IPO AND META, BROADCOM, SPACEX ALL IN THE SPACE OF COMPETING FOR CAPITAL. PAUL:

47:26 A LOT OF ENTHUSIASM AND TAKING A BACKSEAT IS THE RISKS. 90 PAGES OF THE FILING ARE DEVOTED TO RISKS. EXISTENTIAL, CATASTROPHIC RISKS. BUT IT IS NOT GETTING IN THE WAY OF THE ENTHUSIASM. HAIDI: SOME OF THE QUESTIONS, DO YOU HAVE ENOUGH INSURANCE POLICY TO BE ABLE TO COVER THE EXISTENTIAL RISK OF A CATASTROPHIC IMPACT ON HUMANITY? AS WELL AS BREAD ISSUES ANTHROPIC FLAGGED, OCCLUDING CONCERNS OVER SECURITY, FINANCIAL TRANSACTIONS, EVEN

47:57 THE IMPACT ON SCIENTIFIC WORLDS AS WELL. DESPITE THAT, THIS IS THE ENTHUSIASM AT THE OPEN. A BIT OF UPSIDE AS THE NIKKEI TWO ONLINE. JAPAN UP BY ZERO 15%, DOLLAR-YEN 157 POINT 54, THE BLOOMBERG DOLLAR INDEX NOT DOING MUCH BUT HEADED TOWARD THE BANK OF JAPAN DECISION. GIVEN HOW SUPPORT OF THE DATA HAS BEEN IN TERMS OF ENTRENCHING THE 2% INFLATION UNDERLYING EXPECTATION, DOES THE BANK OF JAPAN HAVE THE ABILITY TO PICK UP THE PACE? THE YEN HAS EDGED LOWER WITH

48:31 JGB’S FALLING. YOU’RE WATCHING IN TERMS OF HOW MUCH BUZZ WE SEE FROM THE ANTHROPIC DETAILS AS WELL AS SK HYNIX’S SHAREHOLDER RETURN PROGRAM. WE HAVE SEEN THE ABILITY OF THE MARKET TO TRY TO DEAL WITH EXTRAORDINARY FEW MONTHS WHEN IT COMES TO FOREIGN INSTITUTIONAL SELLING. THE KOSPI COMING ONLINE BY 3.5%. WATCHING SK HYNIX, OUT OF THE

49:03 GATE HIGHER BY 6%. BLOOMBERG’S EXECUTIVE EDITOR JOINS US WITH A VIEW ON IMPLICATIONS OF ANTHROPIC’S IPO FILING. THE TOP TAKE AWAY, THIS IS INJECTING ENERGY INTO THIS TRADE AND IT IS NOT JUST ANTHROPIC. IT ALL FEELS VERY ORCHESTRATED. LONGER-TERM, DOES THIS LAND CONFIDENCE TO THE BROADER QUESTION? >> GOOD MORNING. I DEFINITELY THINK WHAT WE HAVE

49:38 SEEN OVER THE PAST 24 HOURS IS QUITE A BIG STEP FORWARD FOR THE AI STORY. THE AMOUNT OF FUNDING THAT HAS COME TOGETHER. WE HAVE NOT ONLY CONFIRMATION THAT WE WILL GO AHEAD WITH THE ANTHROPIC IPO BUT MASSIVE DEALS WITH BROADCOM, META, AND SPACEX FOR CHIPS, ALL GOING THROUGH, CLEARING QUITE A LOT OF THE HANGOVER WE HAD BEEN NERVOUS ABOUT IN TERMS OF AI FUNDING.

50:09 THERE IS PLENTY THAT HAS BEEN WOBBLING IN RECENT DAYS AND WEEKS, SOME OF THE AUSTRALIAN IPOS FALTERING ON THE WAY FOR THE NEO-CLOUD COMPANIES. THIS SHOULD INJECT CONFIDENCE. IF YOU LOOK, ON TOP OF THE FIRST SOUTH KOREA IN PARTICULAR, GDP BEAT AND THE NEWS ABOUT THE SK HYNIX SHAREHOLDER RETURN PROGRAM. SOUTH KOREA DOESN’T HAVE AN UPDATE WITH ALL OF THIS OUT THERE TODAY, I WOULD BE WORRIED ABOUT THAT MARKET.

50:40 PAUL: WILL BE A LOT OF ENTHUSIASM FOR THE ANTHROPIC IPO. WHERE WILL THE MONEY COME FROM? COULD WE SEE CAPITAL GETTING SUCKED OUT OF AREAS OF THE MARKET? >> OF COURSE IT’S POSSIBLE. IT WILL TAKE UP A LOT OF THE MARKET SPACE, THE CAPACITY FOR FUNDING WILL TIE UP A LOT OF FUNDS FOR A FEW DAYS. I DON’T THINK THERE ARE LOTS OF PEOPLE WHO WANT TO GET INVOLVED IN THE IPO PIPELINE COMING AROUND AT THE SAME TIME AS THE

51:11 HUMONGOUS DEAL. ANTHROPIC HOPES IT DRAWS ENTHUSIASM FROM DIFFERENT INVESTORS. IF YOU WANT TO INVEST IN ONE OF THE BIG AI COMPANIES, THAT IS DRIVING FORWARD A LOT OF ECONOMIC EXPECTATIONS AND AMBITIONS AROUND THE WORLD, LEANING TOWARDS THAT SPENDING AND INVESTMENT UP AND DOWN THE SUPPLY CHAIN AND IN TERMS OF INNOVATION, THIS IS THE MOMENT. THIS IS THE OPPORTUNITY. THAT IS THE WAY THEY WILL PITCH IT. THAT IS THE WAY THEY WILL BE

51:48 COMMUNICATING AND HOPEFULLY WHIPPING UP ENTHUSIASM AMONG RETAIL INVESTORS AS MUCH AS THEY ARE TARGETING INSTITUTIONAL INVESTORS AND THE BIGGEST TREND FOLLOWERS AROUND THE MARKET. HAIDI: LET’S NOT FORGET, WE HAVE CENTRAL BANK DECISIONS TO LOOK TO. THEY ARE IN THE BACKGROUND AT THE MOMENT TODAY AT LEAST IN TERMS OF THE NEWS FLOW. HOW IMPACTFUL WILL THIS BE FOR BROADER MARKETS? >> GOOD QUESTION. I’M NOT TERRIBLY EXCITED ABOUT THE CENTRAL BANK MEETINGS

52:21 BECAUSE ALL OF THEM ARE EXPECTED TO BE ON HOLD. WE WANT TO KNOW HOW FAST THEY WILL HIKE IN THE FUTURE, WHETHER WE CAN NAIL DOWN MORE NEWS BY THE END OF THE YEAR AND PRICE THAT IN. WE HAVE SEEN IN TERMS OF COMMUNICATION, IT HAS STILL BEEN HAWKISH FROM THE BOJ AND FED. BUT THE MARKET IS PAYING ATTENTION TO OTHER THINGS, WHAT THE MIDTERM ELECTIONS WILL BE LIKE, TENSIONS IN THE MIDDLE EAST, WHERE THE PRICE OF CRUDE

52:54 OIL IS GOING. IF ALL CENTRAL BANKS WILL TAKE A SKIP AWAY UNTIL THOSE THINGS HAVE CLEARED, THE MARKET WILL PROBABLY NOT PAY A LOT OF ATTENTION TO THE MESSAGING FROM THE CENTRAL BANKS. THEY OCCUPY AN IMPORTANT PART IN THE AGENDA, BUT THERE IS MORE GOING ON. PERHAPS THAT TAKES A BACKSEAT. PAUL: EXECUTIVE EDITOR FOR ASIAN MARKETS PAUL DOBSON THERE. LET’S STICK WITH ANTHROPIC AND DIG INTO THE DETAILS FROM THE FILING. ANNABELLE DROULERS JOINS US

53:26 WITH MORE. VERY BIG REPORT. WHAT STOOD OUT THE MOST? >> WHAT STOOD OUT WAS ESSENTIALLY GETTING MORE DETAILS INTO HOW THE COMPANY IS PERFORMING FINANCIALLY BECAUSE MUCH BLACK-AND-WHITE. BEFORE THIS WE HAD DETAILS DRIFT THROUGH DIFFERENT LEAKS BUT WE SEE ANTHROPIC REVENUE BY 1300% IN THE FIRST HALF OF THE YEAR. COMING IN AT $16.3 BILLION IN

54:02 THE THIRD QUARTER IT DID $16.8 BILLION SO MORE THAN THE ENTIRE FIRST HALF OF THIS YEAR IN A SINGLE QUARTER. IT SHOWS THE GROWTH TRAJECTORY. THE OTHER THING THAT JUMPS OUT, THEIR CUSTOMER BASE IS EXPANDING. THIS HAS BEEN A CONCERN, THE RELIANCE ON A HANDFUL OF BIG TECH COMPANIES. YOU ARE SEEING AT LEAST 250 CUSTOMERS ARE SPENDING AT LEAST $10 MILLION PER YEAR WITH ANTHROPIC, SO IT IS BECOMING AN

54:33 ENTERPRISE BUSINESS. YOU CAN SEE AS WELL, 1900 PLUS CUSTOMERS GENERATING $1 MILLION PLUS IN REVENUE. THE EXPANDING CUSTOMER BASE AND WE STARTED TO SEE THE FREE OPERATING CASH FLOW, POSITIVE OPERATING CASH FLOW IN THE FIRST HALF. THERE WAS A HEADLINE LOSS OF AROUND $80 BILLION IN THE FIRST HALF, WHICH WAS MORE OF AN ACCOUNTING METRIC, NON-CASH ACCOUNTING ADJUSTMENTS ON FINANCIAL INSTRUMENTS. NOT SO MUCH CASH OUT THE DOOR. THE UNDERLYING BUSINESS IS BECOMING CASH GENERATIVE. HAIDI: DON’T KNOW IF WE HAVE ENOUGH TIME TO COVER THE RISKS, BUT

55:08 THEY SPAN FROM EXISTENTIAL TO FINANCIAL TO BEYOND THAT. ANNABELLE: EXACTLY. 100 PAGES ON THE EXISTENTIAL SIDE, AND THAT IS UNUSUAL. BUT ON THE FINANCIAL SIDE, AS I MENTIONED THERE IS EXTRAORDINARY GROWTH. YOU ARE STARTING TO SEE IT SLOWING. FROM Q1 TO Q2 TO Q3, THE STEP UPS ARE GETTING SMALLER. THAT IS A CONCERN WITH THE COMPANY LIKELY TO PRICE AT A VALUATION HUNDREDS OF BILLIONS OF DOLLARS.

55:40 THE TRAJECTORY IS IMPORTANT. YOU ARE LOOKING AT EXISTENTIAL RISKS THAT ARE FLAGGED. NEARLY 100 PAGES DEDICATED TO RISK FACTORS THAT INCLUDE THE POSSIBILITY THAT IT’S OPENAI COULD RESIST SHUT DOWN, CONCEAL INFORMATION, POSE CATASTROPHIC RISKS TO HUMANITY. WE HAVE DISCUSSED THIS, AND ANTHROPIC IS NODDING TO THE JOB LOSSES PART BECAUSE THE STRUCTURE IS NOTABLE, 5% OF SHARES WILL GO INTO PUBLIC

56:12 BENEFIT FUNDS TO ADDRESS SOCIETAL IMPACTS OF AI. PAUL: CERTAINLY AN HISTORIC MOMENT. HOW ABOUT THE OTHER RISKS FROM CIRCULAR DEALS ARE FINANCING? ANNABELLE: YOU STARTED TO SEE MORE. IT HAS BEEN A CONCERN FOR QUITE A WHILE BUT WHAT YOU SEE IN THE PROSPECTUS IS A GROWING RELIANCE ON THE COMPANY’S ANTHROPIC COMPETES WITH. GOOGLE, AMAZON, MICROSOFT ARE NOT ONLY INVESTORS, CLOUD

56:43 SUPPLIERS AND DISTRIBUTION. THE DISTRIBUTION PARTNERS. SO THESE COMBINED ACCESS TO CLAUDE THROUGH THEIR EXISTING CLAUDE ACCOUNTS. THE HYPERSCALERS ARE TAKING A CUT AND THE ARRANGEMENT IS BECOMING A BIGGER SLICE OF ANTHROPIC REVENUE. IT IS A CLASSIC RATION DYNAMIC. BUT IT IS A KEY RISK FACTOR FLAGGED IN THE FILING.

57:14 YOU ALSO SAW NOT JUST A RELIANCE ON GOOGLE, AMAZON AND MICROSOFT. BROADCOM IN THE MARKETS OVERNIGHT ARRANGING FINANCING, $60 BILLION DEAL TO PUT AI CHIPS IN ANTHROPIC’S HANDS. EVEN WITH HYPERSCALER BACKING, IT NEEDS MORE FIREPOWER. THE QUEST FOR COMPUTE POWER AND THE COST OF COMPUTE POWER IS A RISK MOVING FORWARD. HAIDI: ANNABELLE DROULERS. LET’S LOOK AT THE MOVERS IN THE EARLY PART OF THE SESSION. A FEW STORIES.

57:48 THE OVERALL STORY IS THE EXCITEMENT AND IMPACT TO THE UPSIDE FROM THE ANTHROPIC FILING AS IT HEADS TOWARD THE MEGA IPO. OTHER STORIES WE ARE WATCHING, SK HYNIX UP 6.5%, THE PROSPECT OF A HEFTY DIVIDEND PAYOUT RELATED TO THE STAKE IN JAPAN’S KEY AUXIER HOLDINGS SO THEY WILL DISTRIBUTE THE BULK OF THE GAIN IT BOOKED FROM THE KIOXIA STAKE. THEY ARE CONSIDERING A PACKAGE

58:19 WITH THE POTENTIAL BUYBACK TO RETURN CASH TO SHAREHOLDERS. WATCHING KIOXIA, ALSO SEEING UPSIDE, 5.8%. AS WE LOOK INTO WEEK THAT HOLDS EARNINGS FOR MANY COMPANIES, THIS WILL BE A TEST AS TO WHETHER THE FEARS OVER AI SPENDING WILL RESUME AT THE TOP OF THE CONCERNS FOR INVESTORS, OR WHETHER MORE OF THAT OVER FUTURE DEMAND IS COMING BACK

58:49 INTO PLAY. PAUL: WE HAVEN’T MENTIONED IT, BUT THERE IS A FED MEETING THIS WEEK. WE AREN’T EXPECTING ANY CHANGE BUT LET’S CHECK WHAT’S HAPPENING IN THE BOND SPACE. THE YIELD ON THE 10 YEAR TICKING UP, A SHADE BELOW 5%. TWO YEAR YIELD 4.70, NOT A LOT OF CHANGE. SLIGHTLY SOFT DEMAND ON THE RECENT TO YOUR AUCTION AHEAD OF THE FED DECISION, SIX DAYS BEFORE THE MIDTERMS. THIS IS – CRUDE PRICES, LITTLE RELIEF,

59:23 $115 PER BARREL. IT WERE TREATED SLIGHTLY. SAUDI ARABIAN, PAKISTANI AND TURKISH OFFICIALS ARE MEETING IN TEHRAN TO DEFUSE TENSIONS AND REVIVE PEACE TALKS. WE WILL ZERO IN ON FIXED INCOME MARKETS AHEAD OF THE FED RESCISSION – DECISION WITH RICK. MORE AHEAD ON THE ASIAN TRADE. THIS IS BLOOMBERG.

1:00:09 PAUL: TOP CORPORATE STORIES, MICROSOFT OFFERING BUYOUTS TO ABOUT 60,000 WORKERS AS PART OF EFFORTS TO TRIM COSTS AND RETOOLED THE WORK FORCE FOR THE AI ERA. THE COMPANY SAYS SOME PERSONNEL IN THE U.S., CANADA, INDIA AND THE U.K. ADVICE PRESIDENT LEVEL OR BELOW WILL BE ELIGIBLE. SOME DIVISIONS, INCLUDING XBOX AND FINANCE. , ARE PARTICIPATING FULLY. META IS LOOKING TO RAISE $95 BILLION IN EQUITY TO EARN INVESTMENTS IN AI.

1:00:42 THEY ARE OFFERING $35 BILLION OF COMMON AND PREFERRED STOCK. THERE ARE PLANS TO RAISE AS MUCH AS $60 BILLION THROUGH THEIR SALE PROGRAM. NVIDIA, AMD AND BROADCOM AGREED TO BUY AS $5 BILLION IN AGGREGATE. SPACEX SIGNED A $40 BILLION EQUIPMENT LEASE WITH APOLLO TO PAY FOR THE CHIPS NEEDED YOU’LL ITS AI AMBITIONS. THE DEAL IS EXPECTED TO CLOSE BEFORE YEAR END WITH LISA STARTED IN NEXT YEAR. SPACEX HAS SEEN ITS OWN DEBT

1:01:15 TUMBLE IN RECENT WEEKS. HAIDI: I’VE ALMOST BEEN LOOKING – WE HAVE ALMOST BEEN LOOKING WITH LESS OF THE DEGREE OF SIGNIFICANCE IN THE FEDERAL DECISION – THE FED DECISION BUT THE QUESTION IS WHETHER WE WILL HEAR FED WILL CHAIR MARSH – FED CHAIR WARSH TALK ABOUT CREDIBILITY AND THE COMMITMENT TO KEEPING INFLATION IN CHECK. AT THE MOMENT WE ARE NOT SEEING A LOT OF MOVES ACROSS THE CURVE

1:01:46 WHEN IT COMES TO TREASURIES. LET’S LOOK AT THE OUTLOOK FOR GLOBAL BOND MARKETS. JOINING US IS LACK ROCKS – BLACKROCK’S RICK. LET’S START WITH TREASURIES. WE ARE IN AN ENVIRONMENT WHERE THE 10 YEAR YIELD IS ABOUT 5%, NOT GETTING A LOT OF DEMAND. DOES THAT MAKE YOU SCRATCH YOUR HEAD? RICK: I THINK WE LIVE IN A WORLD, THIS IS ONE OF THE MOST

1:02:18 EXCITING INVESTMENT PERIODS I HAVE EVER SEEN. YOU TALK ABOUT THE FINANCING OVER THE PAST FEW DAYS, BEFORE GETTING ON THE PLANE I SPENT THE WEEKEND LOOKING AT TRANSACTIONS PARTICIPATING IN A SIGNIFICANT WAY IN SOME OF THESE TRANSACTIONS. THE 10-YEAR NOTE HAS TAKEN A BACKSEAT TO WHAT IS HAPPENING IN THE FINANCING MARKETS PROBABLY. AND I THINK ONE OF THE KEY THINGS THAT IS SO EXCITING TODAY IS, YOU CAN GET A YIELD WITHOUT OWNING A 10 YEAR NOTE. YOU CAN STAY IN THE FRONT OF THE CURVE. THERE ARE ASSETS YOU CAN BUY. WE CREATE 7% YIELDING

1:02:53 PORTFOLIOS, STAYING IN THE THREE YEAR PART OF THE CURVE ON AVERAGE AND I HAVE SPENT MUCH OF MY CAREER WAITING FOR 7% YIELDS. THE 10 YEAR YIELD – NOTE IS INTERESTING BUT SO MUCH HAS MADE IT MORE SOMETHING TO WATCH, AND A BAROMETER OFTEN FOR THE EQUITY MARKET MORE THAN ANYTHING ELSE. HAIDI: WE SPENT TIME TALKING ABOUT THE GRADUAL DEMISE OF 6040 AND

1:03:24 OTHER ALTERNATIVES THAT ARE MORE COMPELLING. IF YOU LOOK AT DIFFERENT OPPORTUNITIES ACROSS THE CURVE, WHAT IS COMPELLING TO YOU AND THAT SPACE? AND IS IT NECESSARILY TREASURIES? ARE YOU LOOKING ACROSS OTHER MARKETS? EMS HAVE BEEN ROARING AT THE EXPENSE OF TREASURIES. RICK: 6040 IS SOMEWHAT ARCHAIC TODAY. YOU CAN BUILD A PORTFOLIO, WE TALK ABOUT STAYING SHORTER

1:03:56 ADDENDUM ON THE YIELD CURVE. YOU DON’T NEED AS MUCH OF THE LONG AND. LOOKING AT THE HEDGE FUND EXPOSURE, THAT IS A 6040 IS A THING OF THE PAST FOR THE MOST PART. I THINK THERE ARE OPPORTUNITIES AROUND THE WORLD. WE LIKE RATES AND LONG RATES IN JAPAN. THERE ARE OPPORTUNITIES ACROSS EM. ONE THING I LEARNED ABOUT EM, BRAZIL, YOU HAVE A ELECTIONS AND YOU HAVE EXCITEMENT AROUND IT.

1:04:27 BUT ONE OF THE YIELDS AVAILABLE ARE ATTRACTIVE. SECURITIZED ASSET ENVIRONMENT IS EXCITING. AND WE TALKED ABOUT BEFORE, SOME OF THE FINANCING COMING TO FINANCE TECHNOLOGY THAT IS SECURED SINGLE A RATED OFTENTIMES WITH A LOT OF YIELD, HAS BECOME A BIG PART OF THE INVESTMENT SUITE. THE AMOUNT OF SIZE SOME OF THESE COMPANIES WILL ISSUE FOR

1:04:59 GPU DATA CENTERS HAS MADE IT AN ATTRACTIVE OPPORTUNITY TO TAKE ADVANTAGE OF. PAUL: SCRIBE FRENCH YIELDS AS ATTRACTIVE AT THE MOMENT? DO YOU DEAL LIKE – FEEL LIKE THE SELLINGS MIGHT BE A BIT OF A DEAD? RICK: ANYONE WHO IS INVESTED IN FRANCE, THAT MARKET LAID AN EGG IN TERMS OF PERFORMANCE OVER THE LAST – BY THE WAY, NOT JUST ON THE O.A.T. SIDE BUT ON THE, IN TERMS OF CREDIT MARKETS INCLUDING THE EUROPEAN BANKS.

1:05:30 WE ARE BEING REASONABLY CAUTIOUS. WE HAVE BEEN TACTICAL AROUND SOME OPPORTUNITY. ATS AND SOME PORTFOLIOS. THERE ARE OPPORTUNITIES AROUND THE WORLD TO GET YIELD. ONE THING PEOPLE SHOULD FOCUS ON, THERE ARE FISCAL DYNAMICS THAT ARE CHALLENGING IN SOME PARTS OF THE WORLD. THE OPPORTUNITY IN PARTS OF THE CREDIT MARKET, THE SECURITIZATION MARKET, WE TALKED ABOUT FINANCING IN TECHNOLOGY. I THINK THERE IS BETTER VALUE

1:06:01 THAN TAKING GOVERNMENT RISK IN A BUNCH OF OPPORTUNITIES WE TAKE ADVANTAGE OF TODAY. IT GOT PRETTY AGGRESSIVELY SOLD OVER THE LAST FEW WEEKS. MY SENSE IS THAT IT WILL BE VOLATILE FROM HERE. WE WILL BE TACTICAL BUT IT WON’T BE A BIG PART OF THE PORTFOLIO. PAUL: I DON’T WANT TO INVITE MORE HILARITY SO I WOULD LIKE YOUR VIEW ON THE YUAN DOMINATED – DENOMINATED DEBT. RICK:

1:06:36 THERE ARE, BECAUSE THOSE YIELDS ARE NOT THAT ATTRACTIVE FOR US AND WE DON’T SEE A BIG RETURN PLAY ON IT. NOT THAT MUCH. THERE ARE SOME THEY SPOKE FINANCING – BEST SPOKE FINANCING, AND WE LOOKED AT PARTS OF THE MARKET INEQUITIES BUT NOT SO MUCH IN THE RIGHT SIDE. THERE HAVE BEEN RATE OPPORTUNITIES. WE TALKED ABOUT KOREA HAS BEEN INTERESTING. SOME PLACES WE HAVE BEEN PLAYING IT. BUT NOT SO MUCH IN CHINA AT THIS POINT. HAIDI:

1:07:12 IT IS INTERESTING, WE HAVE SEEN HIGH-GROWTH BOND SALES BEING WHERE THE ACTION IS WHEN IT COMES TO AI FUNDRAISING. WE HAVE TALKED ABOUT HURTLING TOWARDS THE ANTHROPIC IPO WITH FUNDRAISING FROM META, SPACEX AND BROADCOM OVER THE PAST FEW DAYS. WHAT DO YOU MAKE OF THIS ACTIVITY AT A TIME WHEN THERE IS FIERCE COMPETITION FOR CAPITAL, HIGHER RATE ENVIRONMENT, INCREASING INVESTOR CONCERNS ABOUT THE VIABILITY OF THE AI THESIS OVERALL? ARE WORRIES THERE?

1:07:43 RICK: I HAVE NEVER SEEN ANYTHING LIKE IT IN TERMS OF THE FINANCING. AND DEBT MARKETS AND EQUITY MARKETS. ONE THING THAT WILL BE INTERESTING NEXT YEAR, THE COST OF DEBT HAS EQUILIBRIUM AIDED THE COST OF EQUITY. LIKE YOU ARE SEEING NOW, SOME OF THESE COMPANIES ON THE DEBT SIDE HAVE COME INTO THE EQUITY MARKET. YOU HAVE TO SEPARATE AI AND LOOK AT, FROM MY’S PERSPECTIVE, YOU WANT TO BE IN PLACES THAT ARE MORE MATURE, HAVE CASH FLOW

1:08:18 COMING FROM MANY DIFFERENT WAYS, SECURED. EQUITIES, I TAKE MORE RISK ON EQUITY PORTFOLIOS IN PLACES WHERE WE THINK THERE IS UPSIDE, PARTICULARLY PLACES LIKE COMPUTE, AND THE SEMI MARKET GENERALLY. THE MULTIPLES ARE REASONABLE. I LIKE OWNING SOME OF THAT IN EQUITY. ON THE DEBT SIDE, THE HYPERSCALER FINANCE, WHEN IT IS COMING IN SIZE AND IS PRICED

1:08:49 REASONABLY, I WOULD SAY EARLIER THIS YEAR, WHEN YOU WEREN’T GETTING THIS SORT OF SUPPLY, THE MARKET WASN’T VERY ATTRACTIVE BUT NOW SOME OF THESE DEALS THAT ARE COMING THAT HAVE TO PRICE RELATIVE TO THE SIZE THEY HAVE TO DO MORE REFLECTIVE OF THE SIZE THEY HAVE TO DO I THINK IS PRETTY INTERESTING AND IT BECOMES VERY COMPELLING RELATIVE TO SOME OF THE TRADITIONAL ASSETS LIKE AGENCY AND PARTS OF THE HIGH-YIELD MARKET, THEY ARE COMING OUT MORE ATTRACTIVE LEVELS. HAIDI: HIGH-STAKES. AND TO THAT POINT, HOW CRUCIAL IS IT FOR THE U.S.

1:09:21 TO FORGE AHEAD AND WIN THE AI RACE? HOW IMPORTANT IS THAT POTENTIAL WHEN IT COMES TO CONTINUED FUNCTIONING OF THESE MARKETS THAT ARE CLOSELY TIED TO THAT STORY? RICK: I DON’T, PREDICTING WHO WILL WIN THE GLOBAL RACE I THINK IS A PRETTY, IS OUTSIDE THE SCOPE OF WHAT I THINK I CAN FIGURE OUT COME OUR TEAMS CAN FIGURE OUT TODAY. BUT I THINK WHAT WE HAVE TO FIGURE OUT AND WHAT WE ARE TRYING TO DETERMINE, WHAT ARE THE COMPANIES WITHIN IT?

1:09:52 MY SENSE IS THAT WHETHER IT IS CHINA OR THE U.S. THERE WILL BE WINNERS IN BOTH REGIONS. BUT WHICH COMPANIES, THE REASON WHY MANY OF THESE COMPANIES ARE DOING SO MUCH IN THE WAY OF FINANCING TODAY IS THAT RACE TO – YOU HAVE TO PROVIDE FOR GPU, POWER, INFRASTRUCTURE BROADLY, AND QUITE FRANKLY I SEE SOME OF THESE COMPANIES WITH AN INCREDIBLE BUSINESS MODEL, THAT CASH FLOW EXTREMELY WELL. . I HAVE HEARD PEOPLE COMPARE THIS TO THE INTERNET BUBBLE. THESE COMPANIES ARE THROWING OFF REAL REVENUE, REAL CASH

1:10:26 FLOW AND OFTEN TIMES HAVE PARTS OF THEIR BUSINESS THAT ARE CONTRIBUTING TO THE OVERALL BUSINESS. WE SPEND EVERY DAY TRYING TO FIGURE OUT THE WINNERS AND LOSERS. I WOULD SAY LESS OF A REGIONAL ORIENTATION THEN, WE SEE COMPANIES WE THINK ARE LEVERAGED TO THE UPSIDE ON THE EQUITY MARKET TO TRY TO TAKE ADVANTAGE OF THAT. PAUL: ALL RIGHT. THANK YOU SO MUCH. THE GLOBAL FIXED INCOME CIO AT BLACKROCK. THE ASIA TRADE. THIS IS BLOOMBERG. ♪

1:11:09 PAUL: TOP SECURITY OFFICIALS FROM SAUDI ARABIA, PAKISTAN AND TURKEY MET IRANIAN LEADERS IN TEHRAN IN EFFORTS TO DE-ESCALATE TENSIONS AND ENCOURAGE TALKS WITH THE UNITED STATES. WASHINGTON IS CONSIDERING RESUMING BOMBING OF IRAN AFTER MONTHS OF DEADLOCK. PRESIDENT TRUMP HAS REPEATEDLY SAID HE IS CONSIDERING ACTION AFTER THE U.S. MIDTERMS. LET’S TAKE A LOOK AT BRENT PRICES, AROUND $115 PER BARREL. MORE AHEAD. THIS IS BLOOMBERG.

1:11:50 >> THIS IS THE ONE EVERYONE HAS BEEN WAITING FOR. WE KNOW AI IS THE MEGATREND OF THE NEXT SEVERAL DECADES, AND THIS IS THE FIRST OPPORTUNITY TO GET PURE PLAY SOFTWARE EXPOSURE. >> THIS IS A TREMENDOUS MILESTONE TODAY. >> TO HAVE A COMPANY GOING PUBLIC THAT’S GROWING 10X AT THIS SCALE IS EXTRAORDINARY FOR ALL POTENTIAL PUBLIC MARKET INVESTORS AS THEY THINK ABOUT WHERE TO PUT THEIR MONEY AROUND AI. >> THE KEY IS THE NUMBERS ARE EXTRAORDINARY.

1:12:22 THEY WILL CONTINUE TO GROW, BUT THEY ARE MONETIZING THESE INVESTMENTS. >> LOTS OF CASH ON THE BALANCE SHEET AND THEY WILL HAVE MORE BY THE END OF THIS YEAR. >> CAPITAL MARKETS WILL FUND THEM JUST LIKE THEY HAVE FUNDED OTHER TRILLION DOLLAR COMPANIES. >> GUESTS ARE REACTING TO ANTHROPIC’S FILING. THE TAKE AWAY IS POSITIVE IN TERMS OF INJECTING MORE FERVOR INTO THIS AI TRADE THAT HAS BEEN CALLED INTO QUESTION BY A SHEER AMOUNT OF INVESTMENT

1:12:53 VERSUS THE PACE OF RETURN. INVESTORS HAVE BEEN GETTING INCREASINGLY CONCERNED ABOUT THAT, PARTICULARLY WHEN IT COMES TO MARKETS LIKE KOREA. WE HAD THE INSTITUTIONAL MARKET OF FOREIGN SELLING. 4% HIGHER WHEN IT COMES TO THE KOSPI, THE NIKKEI 225 UP BY 8% ON THE MESSAGING THAT THE MESSAGING FROM ANTHROPIC, BROADCOM, SPACEX IS GOING TO END UP ON THESE TECH ECOSYSTEMS. AUSTRALIA GOING THE

1:13:25 OPPOSITE DIRECTION. MARKETS IN ASIA TRADING STRONGLY WHEN IT COMES TO THE FLOOD OF CAPITAL FROM U.S. HYPERSCALERS INTO ASIA. CHINA STANDS TO MISS OUT AS THE VALUE RALLY SHOWS INVESTORS ARE STILL IN CAUTION MODE. WE CONTINUE TO SEE THAT BIFURCATION NOT BENEFITING CHINA IN THE CURRENT SENTIMENT SET UP THAT WE SEE. >> ABSOLUTELY. THE NORTH ASIAN MARKETS ARE UNDER THE HOOD OF JAPAN, YOU HAVE MULTIPLE 5% MOVES HIGHER

1:13:57 IN THE SEMICONDUCTOR EQUIPMENT SPACE. A LOT OF THOSE BOTTLENECK TRADES HAVE ROLLED BACK, GIVEN THAT THE AMERICANS HAVE, IN ELON MUSK’S WORDS, SECURED FINANCING FOR THIS MASSIVE AI RAMP UP. YOU GET A RETRACEMENT OF DOUBTS AROUND SOME FINANCING. ASIAN MARKETS DON’T PARTICULARLY CARE WHETHER ASIAN AMERICANS GET ROI ON THIS INVESTMENT. THE VISIBILITY OF THE CASH FLOW IS BEING TRADED HERE. ON TOP OF THAT, YOU HAVE BETTER

1:14:30 CORPORATE BEHAVIOR FROM THE KOREANS, WHO ARE LOOKING TO GIVE MORE MONEY BACK TO THE SHAREHOLDERS. LET’S SEE HOW THAT STORY DEVELOPS. WE SEE HUGE GAINS FROM HIGH NEXT AND OTHER COMPANIES. THAT’S GOING TO ANCHOR KOREA FOR THE REST OF THE SESSION. WE LOOK FORWARD TO THE TAIWANESE REOPEN. A LOT OF STOCKS ARE IN PLAY, ESPECIALLY WITH META-AND ITS CPU LED AGENTIC AI BUILDUP. A LOT OF POSITIVE SIDES FOR ASIA ON THAT FRONT. ON THE GOVERNMENT SIDE, WE ARE

1:15:04 HEARING SUPPORTIVE NOISES FROM KOREA. WE HAVE THIS FUTURE FUND LOOKING TO BRIDGE THE GAP BETWEEN VENTURE CAPITAL AND PRIVATE MONEY. KOREA CLEARLY GOING ALL IN ON THE AI TRADE. ASIDE FROM LOCAL RETAIL BUYING THE STOCKS, NOW YOU HAVE GOVERNMENTS SUPPORTING THE FUNDAMENTAL LONG-TERM CAPITAL SIDE. PAUL: IS THIS RALLY GOING TO EXTEND TO THE CHINEX AND BROADER CHINA MARKETS? THE CHINEX INDEX IS OFF 40%

1:15:40 FROM ITS JUNE PEAK. WE ANTHONY: SOME OF THAT WEAKNESS, BECAUSE WE CONTINUE TO SEE DOWNGRADES IN THIS ETF. THAT FELL OFF A CLIFF AFTER EARNINGS AND TO THE ANALYST COMMUNITY CONTINUES TO GET MORE BEARISH. GIVEN THE TRADE TENSIONS CHINA HAS WITH EUROPE, OUTSIDE THAT, YOU CAN SEE THE CAUTION OF PEOPLE BUYING VALUE. THEY ARE BUYING ESSO EASE.

1:16:11 AS SO E*TRADE HAS OUTPERFORMED THE CHINESE TECH TRADE. THAT HAS COME OFF SHARPLY, SECURING TRILLIONS IN MARKET VALUE WHILE THE CHINESE SOE’S, THE BANKS, INSURERS, OIL SECTOR, HAS DONE REASONABLY WELL. LET’S USE THE EXAMPLE OF THE OPTICAL TRADE. EVERY STRONG OVERNIGHT IN KOREA AND JAPAN, BUT UNLIKELY TO FOLLOW IN CHINA BECAUSE THERE IS THIS THREAT THAT CHINA GETS CUT OUT OF THE U.S. MARKET. THAT’S A TREND WE ARE SEEING IN

1:16:43 U.S. MARKETS. THESE CAPITAL CURBS POTENTIALLY FROM THE U.S. CONTINUES TO BE A HEADACHE FOR INVESTORS. DOMESTICALLY MARGINS ARE LOW, COMPETITION IS HIGH, AND MONETIZATION OF TECHNOLOGICAL ADVANCE REMAINS A STRUGGLE. PAUL: THE WORLD’S BIGGEST CHIPMAKERS REPORTED EARNINGS THIS WEEK AS THEY SEEK TO EASE FEARS AI SPENDING IS OUTPACING DEMAND. ASIA EQUITIES REPORTER WINNIE HSU JOINS US FROM HONG KONG.

1:17:15 GIVE US A SENSE OF THE IMPORTANCE OF THIS SET OF RESULTS. WINNE: FAIRLY IMPORTANT. WE HAVE SK HYNIX REPORTING TOMORROW, FOLLOWED BY SAMSUNG ELECTRONICS, THEN JAPAN’S KEY OX EF AND CHINA’S SEE XMT. ALL FOUR ACCOUNT FOR ABOUT $2 TRILLION IN MARKET CAP, AND THE COMPONENTS THEY MAKE ACCOUNT FOR ABOUT 30% OF ALL THE DATA CENTER SPENDING OF THESE HYPERSCALERS, SO A LOT IS AT

1:17:46 STAKE. WHEN IT COMES TO AI DEMAND, SOME STRATEGISTS ARE SAYING MEMORY PRICING IS PRETTY MUCH THE MOST IMPORTANT INDICATOR, BECAUSE PRICING CHANGES EVERY DAY. YOU CANNOT FAKE THOSE NUMBERS. THESE ARE VERY IMPORTANT BECAUSE IT GIVES US AN INDICATION OF HOW FAR GOING FORWARD THE AI DEMAND IS. ALTHOUGH RIGHT NOW, A BIGGER QUESTION MIGHT BE AROUND FUNDING. WE DO HAVE A POSITIVE SENSE AROUND THAT SUSTAINABILITY TODAY GIVEN THE MOVES WE SEE IN

1:18:20 MARKETS. OVERALL, THE SET OF EARNINGS ARE GOING TO PROVIDE PERHAPS NOT THE AUTOMATIC QUESTION IF WE HAVE REACHED THE AI BUBBLE OR NOT. IF THE AI DEMAND IS STILL GROWING STRONG ON REAL ORDERS. HAIDI: HOW BIG OF A THREAT IS C XMT? WINNIE: WE HAVE BEEN HEARING THEY ARE

1:18:53 DEFINITELY A REAL PLAYER IN THE SPACE THAT’S AGGRESSIVELY EXPANDING, AND THEY RIGHT NOW ACCOUNT FOR ABOUT 10% OF THE GLOBAL DRAM REVENUE. HOWEVER, WHAT WE ARE SEEING NOW IS THEY HAVE THIS LATEST TECHNOLOGICALLY ADVANCEMENT OF THEIR 4F ARCHITECTURE, AND THAT SPOOKED INVESTORS BECAUSE IT SHOWING HOW THE GAP BETWEEN CHINESE AND GLOBAL COMPETITORS IS NARROWING FASTER THAN INVESTORS ORIGINALLY EXPECTED. HOWEVER, AT THIS STAGE THERE ARE STILL LINGERING CONCERNS,

1:19:27 WHETHER IT’S AROUND THE YIELD PRODUCTION AT SCALE OR THE POTENTIAL EXPORT CONTROLS, OR IF THEY CAN GET THESE ORDERS FROM THE GLOBAL HYPERSCALERS. THE INVESTORS SEE CXMT AS MORE OF A LONGER-TERM THREAT INSTEAD OF A SHORT-TERM IMMEDIATE THREAT FOR THESE OTHER ASIAN SUPPLIERS. HAIDI: BLOOMBERG’S ASIA EQUITIES REPORTER WINNIE HSU. SOUTH KOREA IS CONSIDERING USING A NEW FUND BY CHIP DRIVEN TAX GAINS TO FURTHER REDUCE GOVERNMENT BORROWING.

1:20:02 THE COUNTRY’S GOVERNMENT – BUDGET MINISTER DISCUSSED HOW THE RESPONSE FUND COULD SERVE AS A FISCAL DAM AGAINST HIGHER RATES. >> [TRANSLATED] KOREA IS CURRENTLY BENEFITING FROM AN EXTRAORDINARY SEMICONDUCTOR BOOM AND TAX REVENUES ARE VERY STRONG. THIS YEAR, IN ADDITION TO THE 25,000,000,000,001 WE HAVE DISCUSSED PREVIOUSLY, WE EXPECT AROUND 56,000,000,000,001 IN ADDITIONAL DOMESTIC TAX REVENUE. NEXT YEAR WE EXPECT DOMESTIC TAX REVENUE TO BE MORE THAN 190

1:20:35 TRILLION WON HIGHER THAN THIS YEAR. OF THAT WE PLAN TO PLACE AROUND 162 TRILLION WON INTO THE FUTURE RESPONSE FUND AND MANAGING IT THROUGH THE FUND. OF THE 162 TRILLION WON, AROUND 45 TRILLION WILL BE USED FOR PROJECTS IN FOUR AREAS. ANOTHER 12 TRILLION WON WILL BE USED TO REDUCE GOVERNMENT BOND ISSUANCE. THE REMAINING 104 TRILLION WON WILL BE MANAGED AS RESERVE ASSETS. IN OTHER WORDS, THE AMOUNT OF

1:21:08 GOVERNMENT BOND ISSUANCE FOR NEXT YEAR HAS ALREADY BEEN SET SEPARATELY THROUGH THE BUDGET. THE 104 TRILLION WON WILL BE MANAGED AS RESERVE ASSETS WITHIN THE FUND. WE PLAN TO ESTABLISH A PROFESSIONAL ASSET MANAGEMENT FRAMEWORK WITH THE OBJECTIVE OF GENERATING RETURNS ABOVE THE INTEREST RATE THE GOVERNMENT PAYS ON ITS DEBT. AS I MENTIONED, THOSE RESERVE ASSETS HAVE TWO PURPOSES. THE FIRST IS TO SERVE AS A FISCAL STABILIZATION MECHANISM. IF REVENUE CONDITIONS DETERIORATE IN THE FUTURE, WE

1:21:39 CAN USE THE RESERVES WE HAVE ACCUMULATED. THAT’S THE FIRST SUBJECT, TO CREATE A BUFFER. THE SECOND IS IN THIS AREA OF THE AI REVOLUTION, THERE ARE AREAS WHERE KOREA NEEDS MORE PROACTIVE AND AMBITIOUS INVESTMENT TO SECURE FUTURE GROWTH. THE FUND IS ALSO BEING CREATED SO WE CAN DEPLOY CAPITAL PRODUCTIVELY INTO THOSE AREAS. >> WOULD YOU CONSIDER BUYING BACK SOME OF THE EXISTING GOVERNMENT BONDS? >> [TRANSLATED] THIS YEAR WE ARE REDUCING THE

1:22:10 AMOUNT OF NEW ISSUANCE. WE HAVE ALSO BEEN MANAGING BUYBACKS THROUGH THE MINISTRY OF FINANCE AND ECONOMY. FOR NEXT YEAR IF NECESSARY, THE OVERALL FINANCING PLAN INCLUDES NOT ONLY NEW ISSUANCE BUT ALSO BUYBACKS AND REFINANCING, ALL INCORPORATED INTO THE ROUGHLY 223 TRILLION WON FIGURE MENTIONED EARLIER. >> NOW LET’S TALK ABOUT HOW YOU PLAN TO USE THESE RESERVES. HOW WOULD YOU SPLIT THAT MONEY AMONG STOCKS, BONDS, AND OTHER

1:22:43 ASSETS? >> [TRANSLATED] THE LEGISLATION HAS NOT YET PASSED, SO WE ARE CURRENTLY MAKING INTERNAL PREPARATIONS ON THE ASSUMPTION THAT THE LAW WILL BE APPROVED IN DECEMBER. WE INTEND TO DEVELOP A RATE OF CUSTOMIZED PORTFOLIOS BECAUSE THE ASSETS NEED TO BE MANAGED SAFELY WHILE GENERATING THE HIGHEST POSSIBLE RETURNS. WE ARE APPROACHING THIS BY SEEKING ADVICE FROM PRIVATE SECTOR EXPERTS. NATURALLY WE WILL HAVE DIVERSIFICATION ACROSS RISKY

1:23:17 AND SAFE ASSETS. LONG, MEDIUM, AND SHORT INVESTMENTS, AND EQUITIES AND BONDS. WE EXPECT A PORTFOLIO TO BE DEVELOPED ALONG THOSE LINES. IT HAS NOT YET BEEN DECIDED WHETHER WE WILL MANAGE THE ASSETS THROUGH THE EXISTING PENSION FUND INVESTMENT POOL OR SELECT A SEPARATE ASSET MANAGER. SOME PEOPLE SUGGESTED THAT FOR SHORT-TERM PRODUCTS, IT MAY BE PREFERABLE INITIALLY TO USE THE PENSION FUND INVESTMENT POOL, BECAUSE A SEPARATE ORGANIZATION WOULD REQUIRE TIME AND

1:23:50 PROCEDURES. THE POOL ALREADY HAS A SYSTEM FOR MANAGING ASSETS IN A SIMILAR WAY, SO SOME SUGGESTED USING IT WOULD ALLOW US TO BEGIN OPERATIONS MORE QUICKLY. WE ARE REVIEWING THOSE OPTIONS COMPREHENSIVELY. >> YOU SAID IT HASN’T BEEN FINALIZED YET, BUT CAN YOU GIVE US A ROUGH IDEA OF HOW THIS MONEY WILL BE ALLOCATED? >> [TRANSLATED] BECAUSE THIS IS STILL UNDER INTERNAL REVIEW AND NOTHING HAS BEEN FINALIZED, IT’S DIFFICULT FOR ME TO GIVE DETAILS IN ADVANCE.

1:24:24 AS I MENTIONED EARLIER, THE PRIMARY PURPOSE OF THESE RESERVE ASSETS IS NOT SIMPLY TO GENERATE INVESTMENT RETURNS. THE PRIORITIES ARE TO SERVE AS A SAFEGUARD FOR FISCAL SOUNDNESS AND SUPPORT STRATEGIC INVESTMENT FOR THE FUTURE RATHER THAN SIMPLY LEAVING THE FUND VITAL. WE NATURALLY WANT TO EARN A RETURN ABOUT THE COST OF GOVERNMENT BORROWING, BECAUSE THE GOVERNMENT WILL CONTINUE TO ISSUE TREASURY BONDS. SUPPOSE WE KNOW WE WILL NEED 10 TRILLION WON FOR FISCAL PURPOSES THREE YEARS FROM NOW. WE COULD PUT THAT 10 TRILLION WON INTO A THREE-YEAR

1:24:56 INSTRUMENT IN THE U.S. BOND MARKET AND RECOVER IT THREE YEARS LATER. WE COULD USE BOTH THE PRINCIPAL AND THE INVESTMENT RETURN TO FINANCE A MAJOR INVESTMENT. WE WILL LOOK AT ALL THOSE FACTORS, REINSULATE. – FACTORS COMPREHENSIVELY. IF WE INVEST HEAVILY IN A DOMESTIC MARKET, PARTICULARLY KOREAN EQUITIES, THE FUND COULD HAVE A SIGNIFICANT IMPACT ON THE DOMESTIC STOCK MARKET. SO WE WILL DESIGN THE STRATEGY BY CONSIDERING SAFETY, THE

1:25:29 IMPACT ON THE MARKET, INVESTOR RETURNS, THE TIMING OF WHEN THE FUNDS WOULD NEED TO BE RECOVERED. PAUL: THAT IS SOUTH KOREA’S BUDGET MINISTER SPEAKING EXCLUSIVELY WITH BLOOMBERG IN SEOUL. WE HAVE MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. ♪

1:26:04 HAIDI: ANTHROPIC’S IPO FILING REVEALED CONCERNS OF THE BUILDOUT OF DATA CENTERS. IT’S EXPECTING TO FACE HEIGHTENED SCRUTINY OVER HOW IT TACKLES ENVIRONMENTAL AND SOCIAL TENSIONS ASSOCIATED WITH AI INFRASTRUCTURE. PAUL: THOSE CHALLENGES ARE ON DISPLAY IN AUSTRALIA, WHERE A BILLION DOLLAR DATA CENTER PUSH IS RUNNING INTO GROWING PRESSURE FROM STRETCHED POWER GRIDS AND LOCAL OPPOSITION. GOODMAN DEMANDED A $1.2 BILLION AUSTRALIA PROJECT AFTER HUNDREDS OF EJECTIONS – OBJECTIONS.

1:26:40 THE CEO IS NOW GIVING UP HIS 2027 BONUSES AS THE COMPANY WORKS TO REBUILD INVESTOR CONFIDENCE. CORRESPONDENT ANNABELLE DROULERS IS BACK WITH US FOR MORE. THE SCALE OF THIS PROBLEM IS BECOMING CLEAR. THE COMMUNITY PUSHBACK IS SOMETHING TO BEHOLD AS WELL. ANNABELLE: THE PUSHBACK IS ONE OF THE CHIEF CONCERNS OR RISKS FOR THESE PROJECTS. WE CAN GET MORE ON THAT IN A MOMENT. THIS IS A $70 BILLION AMBITION FOR AUSTRALIA.

1:27:12 BUT THE SCALE OF THE PROBLEM IS NOW BECOMING CLEAR. THERE ARE 40 PLUS DIFFERENT PROJECTS, OR LARGE DATA CENTERS, BEING PLANNED AROUND SYDNEY OR MELBOURNE. THAT’S PROXIMITY TO POWER SUPPLY AND THAT’S WHY THEY ARE NEAR DENSE URBAN AREAS. BUT THREE QUARTERS OF THOSE ARE AT RISK, AND THAT POINTS TO FOUR DIFFERENT PROBLEMS. POWER CONSTRAINTS, COMMUNITY OPPOSITION, WATER CONCERNS, A CHOPPY FINANCING ENVIRONMENT. JUST 23% OF THOSE PROJECTS HAVE

1:27:44 CONFIRMED THEY HAVE SECURED POWER CONNECTIONS. IT IS LOOKING SHAKY RIGHT NOW. HAIDI: LET’S TALK ABOUT THE POWER PROBLEM IN MORE DETAIL, BECAUSE IT COMES AT A TIME WHEN HOUSEHOLDS AND BUSINESSES IN AUSTRALIA ARE BEING PUSHED TOWARD MORE ELECTRIFICATION. YOU HAVE COMPETING CHALLENGES. FOUR NEXT D.C., IT CAME DOWN TO THIS TUSSLE OVER POWER SOURCING. ANNABELLE: EXACTLY. THIS PROJECT IN PARTICULAR WAS

1:28:17 LOCATED IN THE MELBOURNE AREA, AND 15 METERS AWAY FROM DIFFERENT RESIDENTIAL PROPERTIES. THERE WAS COMMUNITY PUSHBACK. THE CONCERN WAS PLANS FOR THE POWER COMPANY TO INSTALL 22 METER HIGH CONCRETE POWER POLES, NEARLY THREE TIMES THE HEIGHT OF STANDARD WATER POWER POLES, TO DELIVER ADDITIONAL ELECTRIC CAPACITY. NEXTDC IS THE CLEAREST EXAMPLE OF WHAT HAPPENS WHEN THAT POWER PROBLEM, GIVEN THE PROJECT WAS HALTED, STOPS BEING THEORETICAL.

1:28:54 THE RESULT WAS THAT NEXT D.C. SLASHED THEIR INVESTOR GUIDANCE FROM $110 MILLION AUSSIE DOWN TO $60 MILLION AUSSIE AT THE TOP AND INSTEAD. SHARES DROPPED, A DECLINE OF 40%. THAT’S THE SINGLE BIGGEST SALE FOR THE BUSINESS SINCE IT LISTED BACK IN 2010. THAT ALSO POINTS TO A SECOND ORDER ISSUE, WHICH IS NOT ONLY DO YOU HAVE CONCERNS ABOUT THE ENERGY SECURITY, YOU HAVE GOT THAT COMPETITION DIRECTLY WITH THIS PUSH TOWARD RENEWABLES IN

1:29:25 AUSTRALIA AS WELL. REALLY COMPETING FOR THE SAME CAPITAL RIGHT NOW. PAUL: HOW ABOUT THE RESPONSE FROM CAPITAL MARKETS? ANNABELLE: THIS HAS BEEN QUITE A CHALLENGE. WE HAVE SEEN A NOTICEABLE SOURING IN SENTIMENT FOR THE SECRETARY. YOU SAW AIR TRUNK DELAYING ITS PLANNED $1.5 BILLION IPO IN SINGAPORE, CITING HIGH INTEREST RATES, MARKET VOLATILITY. FIRMNESS, AN NVIDIA BACK BUSINESS, EVEN THOUGH NVIDIA

1:29:57 HAS SAID THEY ARE GOING TO PUSH AHEAD WITH BACKING THE BUSINESS, YOU STILL DID SEE THEM PULLING BAMA THEY SYDNEY BASED IPO AROUND CONCERNS OVER EVALUATION. THE MESSAGE FROM EQUITY MARKETS SEEMS TO BE CONSISTENT THAT INVESTORS ARE GETTING PICKIER AT A FASTER RATE. HAIDI: IS THERE ANY GOOD NEWS? ANNABELLE: THERE HAS BEEN SOME GOOD NEWS THIS WEEK. ERINTRUNK STANDS OUT.

1:30:29 THIS IS A BLACKSTONE OWNED BUSINESS. THEY JUST SECURED A MORE THAN $4 BILLION DOLLARS AUSSIE GREEN LOAN, ROUGHLY $3 BILLION U.S., TO FIND ONE OF THEIR CAMPUSES IN SYDNEY. IT’S BACKED BY A CONSORTIUM OF FINANCIAL INSTITUTIONS UNDERWRITTEN BY 14 BANKS, INCLUDING BNP PARIBAS, HSBC, DEUTSCHE. THAT IS A SIGNIFICANT BOAT OF CONFERENCE AND DOES SHOW FOR THE RIGHT PROJECT – GREEN LABELED, INVESTMENT-GRADE TENANTS, LONG-TERM LEASES – THE CAPITOL IS THERE.

1:31:02 THE QUESTION IS, HOW MANY OTHERS CAN FOLLOW? IS THIS DREAM STILL ALIVE FOR AUSTRALIA? IT IS, BUT IT’S BEING STRESS TESTED ON MULTIPLE DIFFERENT FRONTS. THE ONES THAT SURVIVE ARE THE ONES THAT WILL SHOW THEY CAN SCALE POWER, THAT THEY CAN MANAGE COMMUNITY RELATIONS. ONE OF THE BIG CHALLENGES IN AUSTRALIA, ACCESS TO WATER IS A BIG CHALLENGE AND THERE IS A DROUGHT. ALSO CAPITAL MARKETS. YOU HAVE TO MANAGE ALL THESE DIFFERENT CHALLENGES TO SUCCEED.

1:31:37 FOR THE MAJORITY OF THOSE 40 PLUS PROJECTS IN THE PIPELINE, A LOT OF THOSE PROBLEMS STILL REMAIN UNRESOLVED. HAIDI: BLOOMBERG’S ASIA TEXT CORRESPONDENT ANNABELLE DROULERS. YOU CAN TUNE INTO THE BLOOMBERG AUSTRALIA PODCAST, DELVING INTO THE BIGGEST STORIES SHAPING THE COUNTRY’S ROLE IN GLOBAL BUSINESS. WE DO HAVE MORE TO COME. EVERY TUESDAY AT 10: 40 AM IN SYDNEY, 8:40 AM IN HONG KONG. MORE AHEAD HERE ON THE ASIA TRADE. THIS IS BLOOMBERG. ♪

1:32:28 PAUL: LET’S LOOK AT HOW THE ASIA BENCHMARKS ARE TRACKING. PRETTY WELL ON THE NEWS OF THE ANTHROPIC IPO. IT WAS A PRETTY HEFTY FILING FILLED WITH TALES OF DREAD AND EXISTENTIAL RISK, BUT ALSO TALES OF TREMENDOUS PROFIT TO BE MADE AND A LOT OF DEMAND AROUND THAT AND THE DOWNSTREAM BUSINESS THAT’S GOING TO ATTRACT. KOSPI GETTING A MUCH-NEEDED BREAK AFTER A COUPLE OF DIFFICULT WEEKS. IT’S BETTER BY 4%. SK HYNIX PUSHING HIGHER. KIOXIA, SOFTBANK DOING WELL IN

1:33:03 THE NIKKEI, WHICH IS BETTER BY 2%. NASDAQ FUTURES PUSHING HIGHER ALSO. A LOT OF ENTHUSIASM AROUND THIS ANTHROPIC HIGHLIGHTING – FILING. WILL BE LISTED AS ANT ON THE NASDAQ AND MIGHT BEAT THE SPACEX IPO. HAIDI: LET’S LOOK AT HOW WE ARE SETTING UP WHEN IT COMES TO TAIWAN AND GREATER CHINA. THERE ARE LINGERING CONCERNS ON SOME STOCKS NOT NECESSARILY GOING TO BENEFIT FROM THE EXCITEMENT FROM ANTHROPIC AND SOME OF THE OTHER FUNDRAISING ANNOUNCEMENTS.

1:33:35 HONG KONG TECH FUTURES LOOKING PRETTY FLAT. HANG SENG BROADLY LOOKING VERY FLAT AND A 50 CHINA FUTURES NOT DOING MUCH. THE STATE LED FUNDS IN CHINA STEPPED INTO THE MARKET WITH THE BIGGEST ROUND OF BUYING SINCE APRIL 2025. AUTHORITIES RAMPING UP EFFORTS TO STEM THE MARKET FREEFALL, BUT THE VERDICT IS OUT AS TO WHETHER THERE IS MORE SELLING TO GO, PARTICULARLY AS YOU CONTRAST HOW THE BIFURCATED AI SYSTEMS ARE COPING. THAT IS IT FOR THE ASIA TRADE. MARKETS COVERAGE CONTINUES.

1:34:08 LOOKING AHEAD TO THE START OF TRADING. THE CHINA SHOW IS NEXT. THIS IS BLOOMBERG. ♪