TSMC Earnings Beat; Anthropic Says It's Now Profitable

Author: Bloomberg Television · Watch on YouTube

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Original language: English

Original video: TSMC Earnings Beat; Anthropic Says It’s Now Profitable · Channel: Bloomberg Television · 46:52 · Watch on YouTube

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

Summary

Markets are under pressure after hotter-than-expected U.S. inflation drove expectations of further rate hikes, with Asian stocks and technology shares hit particularly hard. TSMC reported third-quarter net income above estimates, though investors were still looking for its outlook and capital-spending guidance. Anthropic told potential investors that third-quarter revenue reached nearly $17 billion and that it was profitable on an adjusted basis, ahead of a possible IPO. The program also covers EU trade tensions with China, Volkswagen’s U.S. ambitions, platinum demand, and Ericsson’s earnings and strategy.

Key points

A global selloff hit Asian equities, with trading in Korea’s Kospi halted after a drop of more than 8%; hotter U.S. inflation increased rate-hike concerns.
Markets saw a greater chance of a Federal Reserve hike in December, while Bloomberg’s market analyst said an October increase was unlikely.
Anthropic reported third-quarter revenue of $16.8 billion, positive free cash flow, and adjusted profitability; it could begin marketing an IPO as soon as the week of November 9.
TSMC’s third-quarter net income exceeded estimates, while gross margin was slightly below estimates; investors awaited guidance on demand, margins, and capital expenditure.
Germany is seeking stronger measures to address the EU’s trade deficit with China, marking a shift from its traditional support for open trade.
Nvidia CEO Jensen Huang said AI safety and containment should be integrated into AI systems and said he would consider cutting off customers building unsafe AI.
Volkswagen is looking to expand in the U.S. with vehicles including Scout models and larger SUVs, but faces weak results in China and a highly competitive market.
Platinum-group metals producer Valterra Platinum sees potential long-term demand support from slower EV adoption, emissions requirements, AI, and emerging technologies.
Ericsson beat third-quarter earnings expectations on solid mobile-network demand, while warning that component costs could pressure margins into 2027.
Ericsson announced organizational changes focused on Asia and enterprise connectivity, and said it is investing heavily in network security.

Chapters

Start	Chapter	Summary
00:00	Market selloff and opening headlines	The program opens with a sharp Asian market decline, hotter U.S. inflation, Anthropic’s reported growth, and Ericsson’s earnings.
03:18	Asian tech losses and AI financing concerns	A markets reporter discusses the selloff in Asian technology stocks and concerns about credit, AI borrowing, and CoreWeave.
05:24	Anthropic results and Federal Reserve outlook	Anthropic’s revenue and profitability are reported as analysts weigh the implications of inflation for future Fed rate decisions.
08:08	EU trade policy and China	The discussion examines Germany’s changing stance on trade with China, possible EU measures, and the automotive industry’s perspective.
10:22	Ukraine and the EU summit	Coverage turns to Ukraine’s place on the Brussels summit agenda and questions about European support and the U.S. role.
12:27	New Delhi forum and labor platform	At Bloomberg’s New Economy Forum, a founder explains a platform intended to formalize labor markets and use data and robotics to support workers.
20:33	Jensen Huang on AI safety	Nvidia’s CEO discusses falling AI costs, the importance of safety and containment, and the possibility of refusing service to unsafe AI developers.
23:56	TSMC earnings and AI demand	TSMC reports net income above estimates, while investors focus on its forthcoming guidance, margins, customer demand, and capital expenditure.
27:46	Mercedes on EU-China trade and Volkswagen in the U.S.	The Mercedes-Benz chief discusses fair trade and European competitiveness before a report explores Volkswagen’s plans to grow in the U.S.
34:24	Platinum-group metals demand	Valterra Platinum’s strategy and the long-term outlook for platinum-group metals are discussed, including potential demand from vehicles and technology.
38:15	Ericsson earnings and strategy	Ericsson’s CEO explains the earnings beat, component-cost pressures, organizational changes, China exposure, and network security.
44:41	Markets wrap-up	The program reviews rate-hike expectations, equity and technology-stock movements, CoreWeave credit concerns, and the New Economy Forum’s closing address.

Quotes

I don’t feel any urgency toward taking further action at this point. — 06:31

We do more than 60,000 bookings per day. — 15:10

First of all, safety is paramount. — 21:44

Ultimately, it’s up to the EU to improve its competitiveness. — 28:19

Over time, we need to have more structural actions. — 39:50

Concepts and entities

TSMC, Anthropic, CoreWeave, Jensen Huang, NVIDIA, Ericsson, Volkswagen, Federal Reserve

Full transcript (original language)

00:00 STEPHEN: LIVE FROM BRUSSELS, THIS IS BLOOMBERG DAYBREAK: EUROPE. THE GLOBAL SELLOFF DEFENSE. – DEEPENS. THE NIKKEI HALTED AFTER IT PLUMMETS BY MORE THAN 8% AS INVESTORS PRICE MORE RATE HIKES AFTER U.S. INFLATION COMES IN HOT. ANTHROPIC HAS TOLD POTENTIAL INVESTORS THAT THIRD QUARTER REVENUE HIT $17 BILLION AHEAD OF A BLOCKBUSTER IPO EXPECTED AS SOON AS NEXT MONTH. EU LEADERS TO MEET AS GERMANY

00:36 PUSHES FOR MORE LIMITS ON CHINESE IMPORTS TO TACKLE THE BLOCKS RECORD TRADE DEFICIT. BREAKING EARNINGS NEWS THIS MORNING. THIS FROM ERICKSON. THIRD QUARTER ADJUSTED EARNINGS COMING IN AT OVER 10 BILLION SWEDISH KRONA. HIGHER THAN HAD BEEN EXPECTED BY THE CONSENSUS ESTIMATES. WE ARE LOOKING AT THE MOVES THIS MORNING IN TERMS OF AN ANNOUNCEMENT OF REORGANIZATION. 17% MARGIN. IT’S WITHIN THE LONG-TERM GOAL

01:08 TO BE WITHIN THE RANGE. ESTIMATE WAS 14.3%. THIS IS THE FIRST EARNINGS REPORT UNDER THE NEW CEO AS WE ARE LOOKING AT THE OPERATING MARGINS COMING IN STRONGER-THAN-EXPECTED. THROUGHOUT – 23.1%. THE ESTIMATE HAD BEEN FOR 19.4%. THAT’S THE LATEST MOVEMENT THAT WE HAVE. WE WILL BE DIGGING INTO THOSE NUMBERS WITH THE CEO A LITTLE LATER IN THE SHOW.

01:39 LET’S TAKE A LOOK AT THE BROADER MOVES ON MARKETS THIS MORNING. SELLOFF IN ASIA. MSCI INDEX DOWN OVER 2%. IT HAD BEEN 3% LOWER IN THE SESSION, ON TRACK FOR ITS LOWEST CLOSE SINCE JULY. EUROPEAN STOCK FUTURES SHARPLY LOWER. NASDAQ FUTURES ALSO IN THE RED. THE CHIP FOCUSED SELLOFF PARTICULARLY HITTING THE NASDAQ INDEX. FUTURES ARE OFF THE LOWS WE HAD EARLIER IN THE SESSION.

02:10 WE’VE GOT OIL PRICES LOWER TODAY. BRENT CRUDE TRADING OVER 104 DOLLARS AS YOU CAN SEE DESPITE THE NEWS OF A CONTAINER SHIP SINKING IN THE STRAIT OF HORMUZ. THE EURO GETTING SUPPORT FROM A WEAKER DOLLAR. U.S. I PRINT. WE HAVE EURO BOUNCING BACK A LITTLE TODAY. THE 10 YEAR TREASURY YIELD RALLYING STRONGLY TODAY. A PUT – BASIS POINTS THE 10 YEAR. YIELD AT 5.1%.

02:42 7:00 U.K. TIME. INDUSTRIAL PRODUCTION GDP FIGURES FOR THE U.K.. EU SUMMIT TAKING PLACE IN BRUSSELS. COMPETITIVENESS TRADE AND THE BUDGET ON THE AGENDA. LATER ON, WE GET U.S. RETAIL SALES. JOBLESS NUMBERS AND PPI ALL TO COME. LET’S GET YOU SET UP FOR THE DAY AHEAD.

03:18 KOSPI PLUMMETED AS MUCH AS A PERCENT, SET FOR ITS WEAKEST CLOSE SINCE APRIL. LET’S GET AN UPDATE FROM OUR MARKETS REPORTER ANTHONY STEPHENS. HI ANTHONY. ANTHONY: WE NEED TO GET OUR HEAD AROUND THE NEWEST CORRELATION IN THE TECH TRADE. THAT IS THE BLOWUP IN THE CREDIT SPACE VERSUS THE DRAWDOWN IN EQUITIES THE KOSPI. WE HAD THIS CONCERN GROWING AS THE STRUGGLE TO RAISE MONEY. THIS IS THE CREDIT CONCERN THAT WILL HARM NEW AI DEBT.

03:50 IT WILL BE INTERESTING TO SEE WHAT THE CALENDAR LOOKS LIKE. WHILE THERE IS KNOWN NEW AI DEBT, YOU CANNOT HAVE CAPITAL EXPENDITURE. FLIP THE BOARD. YOU CAN SEE THE EXTENT OF THE DAMAGE ACROSS ASIA. DOUBLE-DIGIT LOSSES ACROSS A RANGE OF VERY BIG CAP NAMES. WHETHER YOU ARE TALKING ABOUT KOREA OR SAMSUNG, DOWN ALMOST 9%. LENOVO IN HONG KONG. FINALLY THE ONE COMPANY THAT COULD BAIL US OUT IS TSMC.

04:20 IT HAS RESULTED IN A COUPLE HOURS. THE GUIDANCE WILL BE INTERESTING. SO WILL THE CAPEX. IT’S ALL IN THE HANDS OF TSMC AS TRADERS LOOK TO RISK MANAGER AGGRESSIVELY. WE ARE SEEING SIZABLE SELLING IN KOREA TO START THE DAY. STEPHEN: WHAT WAS IT ABOUT THE COREWEAVE STORY THAT HAS SEEN SUCH A BIG HIT TO SENTIMENT? PARTICULARLY THE MOVE IN THEIR BONDS. >> IT TIES TOGETHER A COUPLE OF NARRATIVES IN THE MARKET.

04:51 MARKETS ARE WORRIED ABOUT HIGHER RATES. IT’S DOWN THE RISK CURVE IN TERMS OF AI TRADE. NOW THEY ARE FACING COMPETITION FROM THE LIKES OF GOOGLE AND MICROSOFT THAT HAVE THESE MODELS THAT COMPETE WITH ITS MAIN CUSTOMER. THE MARKET IS NOT IMPRESSED BY THE REVENUE PACE AT OPENAI OR ANTHROPIC. THAT’S FEEDING MOST AGGRESSIVELY INTO BORROWING MONEY TO LEND COMPUTE OUT TO THOSE. THAT DYNAMIC IS STARTING TO GET

05:24 CIRCULAR IN A VICIOUS CYCLE. STEPHEN: ANTHONY STEPHENS, THANK YOU FOR BRINGING US UP-TO-DATE ON A DAY WHERE WE ARE SEEING SHARP DROPS ON EQUITY MARKETS. ANTHROPIC’S REVENUE HIT $16.8 BILLION IN THE THIRD QUARTER, TURNING THE COMPANY PROFITABLE ON AN ADJUSTED BASIS. THE COMPANY IS NOW GENERATING POSITIVE FREE CASH FLOW, STRENGTHENING ITS PITCH TO INVESTORS AHEAD OF A PLANNED IPO. ANTHROPIC COULD BEGIN MARKETING ITS IPO AS SOON AS THE WEEK OF NOVEMBER 9. THE U.S.

05:58 CONSUMER PRICES HAVE ADVANCED AT THE FASTEST PACE IN FIVE MONTHS, DRIVEN BY A SURGE IN FUEL COSTS. THE READING IS FEELING CONCERNS OVER FURTHER INTEREST RATE HIKES. THE CHICAGO FED PRESIDENT SAYS HE FOUND THE NUMBERS DISCOURAGING. THE FED VICE CHAIR BELIEVES THERE’S CURRENTLY NO NEED FOR ACTION. >> I THINK WE HAVE TIME TO WAIT AND SEE HOW FINANCIAL CONDITION AND THE ECONOMY EVOLVES BEFORE WE DECIDE THAT WE NEED TO TAKE ANYMORE ACTION. I DON’T FEEL ANY URGENCY TOWARD

06:31 TAKING FURTHER ACTION AT THIS POINT. STEPHEN: LET’S BRING IN VEN RAM FOR MORE. THE VERGING VIEWS FROM FED OFFICIALS. KEVIN WARSH EXPECTED TO SPEAK LATER TODAY. WHAT WILL INVESTORS BE LOOKING OUT FOR TO INDICATE THE FED’S NEXT STEPS? >> GOOD MORNING. I DON’T THINK KEVIN WARSH OR ANY OTHER FED OFFICIAL IS GOING TO GIVE THE GAME AWAY IN TERMS OF WHAT THEY SHOULD EXPECT FOR OCTOBER. THE MARKETS ARE THINKING, THERE’S A 25% CHANCE THAT THEY

07:04 WILL GO IN OCTOBER. THEY WILL RAISE RATES IN OCTOBER. THEY WERE PRICING IN HARDLY ANY CHANCE OF A HIKE IN OCTOBER PRIOR TO THE INFLATION DATA. THE MARKETS ARE THINKING, IS THAT INFLATION GOING TO BE HOT ENOUGH FOR THE FED TO BE RAISING RATES IMMINENTLY? I DON’T THINK THEY WILL RAISE RATES IN OCTOBER. IT’S MORE LIKELY THAT THEY WILL GO IN DECEMBER. IF YOU LOOK AT THE DOT PLOT, THEY VINDICATED ONE MORE RATE INCREASE FOR 2026. IF THEY RAISE RATES THIS MONTH,

07:37 WE’VE GOT TWO MORE INFLATION PRINTS COMING DOWN THE YEAR IN THE REMAINDER OF THE YEAR. THAT WOULDN’T LEAVE THEM WITH MUCH ROOM BECAUSE THEY WILL HAVE DELIVERED WHAT THEY PROMISED IN THE DOT PLOT. I THINK THAT THEY WILL HOLD FIRE IN OCTOBER AND GO IN DECEMBER. STEPHEN: OK. THANK YOU VERY MUCH FOR JOINING US. EUROPEAN LEADERS ARE GATHERING IN BRUSSELS FOR A TWO DAY SUMMIT , ONE OF THE EU’S KEY FOCUS AREAS WILL BEGET YOU

08:08 TRADE DEFICIT WITH CHINA AS YOUR ME PREPARES. MORE IMPORTS FROM BEIJING. NOW HERE’S OUR CHIEF EUROPE CORRESPONDENT FOR MORE ON THE STORY. THE TRADE COMMISSIONER WAS IN CHINA LAST WEEK AND CAME AWAY WITH A WAY – A RANGE OF DEALS. WHAT DOES GERMANY WANT MORE NOW ON TOP OF THOSE DEALS? >> YOU SEAL THE 180 DEGREES FROM THE GERMAN POSITION VERSUS ITS HISTORIC POSITION WHICH HAS ALWAYS BEEN FOR FREE MARKET OPEN TRADE PARTICULARLY WITH CHINA.

08:42 YOU ARE SEEING A REAL SHIFT FROM THE GOVERNMENT AND AN INCREASINGLY SHIFT FROM THE AUTO INDUSTRY ITSELF. THERE’S A FRACTURE WITHIN THE INDUSTRY ITSELF. THERE’S THE VOLUME PLAYERS WHO WANT TO DEFEND THE EUROPEAN MARKET FROM A LOT OF THESE LOWER-COST EV’S. THEN YOU HAVE LUXURY ADDITIONS, THINGS LIKE MERCEDES THAT ARE MORE CONCERNED WITH KEEPING TRADE OPEN ACROSS THE WORLD. IT’S A SIGNIFICANT SHIFT. WHEN YOU HAVE THE FRENCH AND GERMANS SINGING FROM THE SAME SHEET ON TRADE, YOU MIGHT GET PROGRESS. TRYING TO DEVELOP THIS NEW TOOL

09:18 THAT WOULD MIRROR THE SO-CALLED AMERICAN 301 TARIFF REGIME WHICH WOULD GIVE THEM THE ABILITY TO MOVE MUCH FASTER ON OTHER AREAS. THE GERMANS WOULD LIKE TO, – PHARMACEUTICALS AND MACHINERY. THESE ARE THE HISTORIC PLACES THAT GERMANY HAS BEEN STRONG. WE CAUGHT UP WITH THE CEO OF MERCEDES-BENZ YESTERDAY, THE HEAD OF THE LOBBY GROUP FOR THE EUROPEAN AUTO SECTOR. HAVE A LISTEN TO WHAT HE HAD TO SAY ABOUT THE HYBRID DEAL.

09:50 >> WE THINK IT’S A PRAGMATIC AGREEMENT TO CREATE A LEVEL PLAYING FIELD HERE AND HAVE A LITTLE BIT OF A PAUSE IN THE MARKET DEVELOPMENT. SO WE WELCOME THIS AGREEMENT. BUT ULTIMATELY, IT’S UP TO THE EU TO IMPROVE ITS COMPETITIVENESS. WHAT I THINK WILL HAPPEN OVER TIME IS THAT OEMS FROM OTHER COUNTRIES THAT WANT TO DO BUSINESS IN EUROPE, THEY WILL LOCALIZE THEIR ACTIVITIES HERE AS WELL AS WE HAVE DONE IN MARKETS AROUND THE WORLD FOR A LONG TIME INCLUDING CHINA. STEPHEN:

10:22 THAT’S THE PERSPECTIVE FROM THE EUROPEAN AUTO INDUSTRY. I THINK THE HYBRID DEAL IS WHACK-A-MOLE ON ONE SPECIFIC THING. IT’S NOT GOING TO CAUSE THE DEFICIT. THEY NEED TO GET MEASURES IN PLACE IN CASE THEY CANNOT GET WHERE THEY NEED TO GET ON THE OTHER SECTOR. NOW THAT THE GERMANS ARE ON MESSAGE WITH THE REST OF THE EUROPEANS, THE CHANCE OF THAT HAPPENING IS MUCH HIGHER. THE BUDGET IS AMONG THEM. WHAT SHOULD WE BE WATCHING OUT FOR? >> LET’S LEAVE THE BUDGET FOR ANOTHER TIME. IT’S IMPORTANT.

10:54 WE ARE TALKING ABOUT THE EU TRYING TO GET TO $2 TRILLION OVER THE NEXT SEVEN YEARS. IT’S IMPORTANT. MORE AND MORE, UKRAINE WILL BE THE FOCUS OVER THE NEXT COUPLE DAYS. PRESIDENT ZELENSKYY WILL BE HERE. ALL THE ACTIVITY THAT WE’VE HAD FROM THE TRUMP ADMINISTRATION, SAYING THERE IS THIS ENERGY CEASE-FIRE. THE UKRAINIANS ARE NO LONGER RESPECTING IT. ANOTHER INTERVIEW THAT HE GAVE TO THE FINANCIAL TIMES, TO

11:25 ILLUSTRATE THE DANGEROUS RHETORIC BETWEEN THE UKRAINIANS AND THE AMERICANS. SPEAKING OF TRUMP REGARDING HIS VIEW OF AUTHORITARIAN LEADERS. THAT FROM SPEAKS ABOUT IT OPENLY AND LOUDLY. HE RESPECTS SUCH PEOPLE. FOR HIM, PEOPLE WHO CAN BE LEADERS FOR 30 YEARS, IT MEANS THEY CAN BE STRONG. SPEAKING VERY CANDIDLY, DIFFICULT COMMENTS ABOUT THE PRESIDENT OF THE UNITED STATES AS THERE ARE QUESTIONS ABOUT WHETHER THE AMERICANS WILL CUT OFF INTELLIGENCE TO THE

11:55 UKRAINIANS. WHETHER THEY HAVE LIMITED THE BANDWIDTH OF STARLINK. THAT HAS SERIOUS IMPLICATIONS ON THE BATTLEFIELD AND THOSE SORTS OF THINGS. FOR THE EUROPEANS, THE QUESTION WILL BE HOW MUCH MORE OF THE BURDEN THEY ARE WILLING TO SHOULDER AND HOW MUCH THEY CAN DO. THAT WILL BE PART OF THE CONVERSATION IN BRUSSELS. STEPHEN: THANK YOU VERY MUCH. WE WILL HEAR FROM YOUR INTERVIEW A LITTLE BIT LATER IN THE PROGRAM. LET’S TAKE YOU LIVE TO NEW DELHI. BLOOMBERG’S NEW ECONOMY FORUM WHERE THEY AMBASSADOR TO INDIA

12:27 IS IN CONVERSATION WITH BLOOMBERG. >> ENSURING THAT WE PROTECT OUR AMERICANS THAT COME HERE. THERE’S NEVER A DULL MOMENT WHEN SOMEBODY LOSES THEIR PASS OR ON A TIGER SAFARI. >> THANK YOU SO MUCH BEING HERE. FOR MY GUESTS, THANK YOU FOR HAVING HIM. ♪

13:00 STEPHEN: WELCOME BACK TO BLOOMBERG DAYBREAK ERA. WE ARE IN NEW DELHI FOR BLOOMBERG’S NEW ECONOMY FORUM WHERE AI’S TRAJECTORY SUPPLY CHAINS AND CONCERNS ABOUT ENERGY SECURITY HAVE DOMINATED THE PAST TWO DAYS OF DISCUSSING. >> HI. CALL ME THE BEARER OF GOOD NEWS TODAY. WE ARE TALKING ABOUT A NAP THAT WILL HELP YOU WITH YOUR HOUSEHOLD CHORES. YAY. WE HAVE THE FOUNDER WITH US TODAY. GOOD TO HAVE YOU WITH US. TELL US WHAT IT’S ALL ABOUT.

13:36 >> THE BROADER MISSION IS TO FIX BROKEN LABOR MARKETS. HOW THAT MANIFESTS IS THAT WE ARE A LABOR ORGANIZATION PLATFORM. THE THOUGHT IS THAT THERE WERE HUNDREDS OF MILLIONS OF WORKERS IN INDIA AND ACROSS THE DEVELOPING WORLD WHERE THEY ARE UNEMPLOYED OR UNDEREMPLOYED FOR MANY MONTHS OF THE YEAR. ON THE OTHERS OF IT, YOU HAVE EMPLOYERS LOOKING FOR HIGH QUALITY, SAFE RELIABLE LABOR. THE PROBLEM ISN’T SOLVED BY

14:07 SUPPLY DEMAND MATCHING. IT NEEDS TO BE SOLVED BY A PLATFORM WHICH SOLVES THE GAP BETWEEN WHAT IT COSTS FOR THE LABOR ON THE AXIS OF QUALITY, SAFETY, RELIABILITY AND WHAT THESE SERVICE PROVIDERS AIM TO DO ON THEIR OWN. >> YOU HAVE SPEED – SEEN EXPLOSIVE GROWTH – EXPLOSIVE GROWTH. WHY? HOW DO YOU JUSTIFY THAT? >> THERE’S A BROAD OATH – BROADER THEME WITHIN INDIA. THE ECONOMY IS MOVING TOWARDS FORMALIZATION.

14:38 THERE’S A HUGE NUMBER OF INDUSTRIES WHICH ARE POPPING UP. THE LAST FIVE YEARS, WE’VE SEEN GROW SURELY – GROCERY FORMALIZED BY COMMERCE. I SAW HOW SERVICES BEING SPENT EVERY YEAR. ALMOST ALL OF IT IS INFORMAL AND DISORGANIZED. >> IN TERMS OF BOOKINGS, WHAT ARE YOU SEEING? WHAT IS THE TRAJECTORY IN THE NEXT THREE TO FIVE YEARS? >> WE DO MORE THAN 60,000 BOOKINGS PER DAY.

15:10 WE HEAR FROM 3000 BOOKINGS A DAY TO 60,000 A DAY IN A MATTER OF SIX OR SEVEN MONTHS. THE GROWTH HAS BEEN INTENSE. WE EXPECT THAT TRAJECTORY TO CONTINUE OVER THE NEXT FEW ORDERS. >> IT’S NOT JUST ABOUT HELPING PEOPLE WITH HOUSEHOLD CHORES. YOU ARE A ROBOTICS COMPANY IN A WAY. A DATA COMPANY. HOW DOES THAT FIT INTO WHAT YOU’RE DOING? >> THE BROADER MISSION IS FIXING LABOR MARKETS. THE PROBLEM IS AROUND STRUCTURAL ISSUES WHERE THERE

15:42 ISN’T LABOR TO MEET THE NEEDS THAT WE HAVE. WE DON’T HAVE DOCTORS. WE DON’T HAVE LABOR FOR ADVANCED MANUFACTURING. THAT GETS SOLVED THROUGH DEPLOYMENT OF ROBOTICS. ALSO UNDERSTANDING HOW TO USE DATA. THAT WAS A PROBLEM WE FELT WE COULD SOLVE USING OUR OPERATIONS BUSINESS. THE IDEA IS, WE ARE ABLE TO BRING BLUE-COLLAR WORKERS IN INDIA INTO THE AI VALUE CHAIN.

16:20 FOR A DOMESTIC WORKER IN INDIA, WAGES HAVE BEEN STAGNANT FOR 20 YEARS. REAL WAGES ARE DECLINING BY 5%. WE ARE ABLE TO USE DATA THAT WE CAPTURE FROM PRONTO AND WE WORK WITH LABS AND TRAIN OUR OWN MODELS. THAT HELPS US SUSTAINABLY INCREASE THE WAGES FOR OUR WORKERS. >> I’M WONDERING IF THE AI ELEMENT OF PRONTO THAT IS HELPING YOU TO GATHER YOUR CAPITAL. IT TOOK 20 MINUTE CONVERSATION FOR YOU TO SECURE $20 MILLION FROM A SILICON VALLEY INVESTOR.

16:52 >> I THINK IT’S BOTH. PEOPLE ARE UNDERWRITING THE TRANSFORMATION OF LABOR ACROSS THE WORLD AND THAT’S TRUE OF EVERY PART OF OUR BUSINESS. EVERYTHING WE DO ALIGNS WITH THAT MISSION. >> WHAT’S THE PLAN FOR GROWTH? ASKING THAT ADMITS COMPETITION. QUICK COMMERCE IN INDIA. EXPONENTIAL. YOU ARE SEEING COMPETITION IN YOUR SPACE AS WELL. >> OF COURSE. I THINK OUR MISSION IS SO DIFFERENT THAT WE ACTUALLY DON’T SEE THEM AS COMPETITORS.

17:24 FOR US, BECAUSE THE FOCUS IS ON ROBOTICS AND THE RESEARCH THAT WE DO, THE BYPRODUCT OF THAT IS CASH WHICH WE CAN USE TO GROW THE OPERATIONS BUSINESSES AND THE FORMALIZATION OF THE ECONOMY . WE DON’T SEE THEM AS COMPETITORS. WE WANT EVERYONE TO WIN. BUT THEY ARE PLAYING A DIFFERENT GAME. >> RIGHT NOW, THREE OF THEM. >> WE HAVE SUCH A DIFFERENT STRATEGY. WE ARE NOT INDEXED IN THE EXACT MARKET SHARE.

17:56 I WOULD SAY THAT ARE LONGER TEAM – TERM SUSTAINABILITY IS LINKED WITH THAT. WE HAVE TO REBUILD IT HE THAT NO ONE ELSE REALLY HAS. HASLINDA: WHEN E-COMMERCE CAME TO THE MARKET, THERE WAS CONCERN ABOUT HOW IT MIGHT HOLLOW OUT. ARE THERE LESSONS TO BE LEARNED FROM THE E-COMMERCE PLAYERS? >> THE LESSON THAT WE TAKE AWAY FROM THEM IS THAT BLANKET IS ONE OF THE MOST FANTASTIC BUSINESSES THAT HAS BEEN BUILT IN INDIA FOR A WHILE. IT’S AT THE STANDARD FOR WHAT

18:26 CAN BE POSSIBLE. WE TAKE A LOT OF INSPIRATION. A LOT OF OUR TEAM MEMBERS USED TO WORK THERE. YOU CAN ALSO GROW THE INDUSTRY LARGER THAN IT USED TO BE BEFORE. INDIA IS NOT A ZERO-SUM PLACE. HASLINDA: YOU CAN TAKE IT TO THE WORLD? >> NOT NECESSARILY THE WORLD. COMMERCE IN GENERAL HAS GROWN RATHER THAN THEM TAKING SHARE FROM TRADITIONAL BUSINESSES.

18:58 HASLINDA: ANY FURTHER FUNDRAISING PLANS? MIGHT IPO BE IN THE PIPELINE? >> NO IPO ANYTIME SOON. HASLINDA: IPO SOMETIME IN THE FUTURE? IS THAT PART OF THE LONGER-TERM PLAN? >> WE WILL SEE. I LOVE THE IDEA OF STAYING PRIVATE FOREVER. HASLINDA: WHY? >> BROADLY, RIGHT FIT MARKETS DON’T TRADE THE QUARTER. THAT’S PRETTY NICE. WE ARE MISSION ORIENTED COMPANY. MISSION ORIENTATION REVOLVES AROUND LONG-TERM THINKING.

19:31 YOU MIGHT SACRIFICE THINGS IN THE SHORT TERM IN ORDER TO PRESERVE THE MISSION. PRIVATE MARKETS IN GENERAL TEND TO RECOGNIZE THAT BETTORS IN PUBLIC MARKETS. IF YOUR CAPITAL IS ALSO TRADING THE QUARTER, IT’S TOUGH. EVERY QUARTER MATTERS. YOU HAVE TO MAKE MORE SHORT-TERM DECISIONS. HASLINDA: YOU CALLED YOURSELF AND AI COMPANY. DEVELOPMENT IS HAPPENING TOO FAST. WHAT IS YOUR VIEW ON THAT? >> ALIGNMENT IS AN IMPORTANT CONVERSATION. IT IS IN A CONVERSATION THAT

20:02 WE’VE HAD IN ROBOTICS. I THINK WHAT WILL BECOME INCREASINGLY IMPORTANT AS POLICIES IMPROVE, OBVIOUSLY WE NEED A LOT OF CORONATION ACROSS THE INDUSTRY IN ORDER TO MAKE IT HAPPENS. HASLINDA: THANK YOU FOR YOUR TIME. THE CONVERSATIONS OUT OF THE BLOOMBERG NEW ECONOMY FORUM HAPPENING HERE IN NEW DELHI. STEPHEN: THANK YOU VERY MUCH. REALLY INTERESTING CONVERSATION. THE FORMER ECB PRESIDENT MARIO DRAGHI’S CO-CHAIR OF

20:33 BLOOMBERG’S NEW ECONOMY FORUM. DELIVERING THE CLOSING ADDRESS IN NEW DELHI AT 8:00 LONDON TIME, HERE. THE VIDEO CEO ON WHY HE’S PREPARED TO CUT OFF SOME CUSTOMERS. ARRAY EXTRUSIVE INTERVIEW WITH JENSEN HUANG IS NEXT. THIS IS BLOOMBERG. ♪

21:11 STEPHEN: NVIDIA CEO SAYS SAFETY AND CONTAINMENT MUST BE INTEGRATED INTO AI SYSTEMS. SPEAKING WITH EMILY CHANG, HE ALSO SAID HE WOULD CONSIDER CUTTING OFF ANY CUSTOMERS THAT BUILDS UNSAFE AI. >> THE COST OF AI, THE COST OF THE TOKEN IS REDUCING BY 30, 40 TIMES PER YEAR. SO I THINK THAT THE COST OF TOKENS IS DECREASING. THE COST OF INTELLIGENCE IS DECREASING.

21:44 THE BENEFITS TO THE CUSTOMERS ARE GOING UP EXPONENTIALLY. EMILY: AI IS DEEPLY UNPOPULAR AND PEOPLE ARE SCALED – SCARED. YOU HAVE BEEN VERY CONSISTENT IN YOUR OPTIMISM. WHAT DO YOU SEE THAT THEY DON’T? HOW CAN THEY BE SO WRONG? >> FIRST OF ALL, SAFETY IS PARAMOUNT. IN ORDER FOR US TO REALIZE THE INCREDIBLE POTENTIALS AND THE OPTIMISTIC FUTURE THAT WE ALL HOPE FOR AND BELIEVE IN, WE

22:16 HAVE TO DEVELOP THE TECHNOLOGY SAFELY AND RESPONSIBLY. I BELIEVE WE HAVE AGENCY AND HOW THIS TECHNOLOGY ADVANCES. WE SHOULD ACCELERATE THE DEVELOPMENT. WE SHOULD ACCELERATE THE INTEGRATION OF THIS CONTAINMENT TECHNOLOGY INTO AI SYSTEMS. WE SHOULD ACCELERATE THE DEVELOPMENT OF MONITORING TECHNOLOGY AND AI’S THAT MONETARY EYES. WE SHOULD ACCELERATE AI TECHNOLOGY. I THINK THAT THERE’S A FALLACY.

22:50 IT IS IN FACT A MISTAKE TO SEPARATE AI CAPABILITY AND AI SAFETY AS IF IT IS TO CONVERSATIONS. EMILY: IF ONE OF THE LABS WAS DOING SOMETHING TOO DANGEROUS, WOULD NVIDIA STOP SELLING TO THEM? >> IT’S A HYPOTHETICAL BUT OF COURSE, YEAH. BEFORE YOU DO SO, YOU WOULD HAVE A CONVERSATION. WE DON’T RUN OTHER PEOPLE’S COMPANIES. AND THERE’S A LIMIT TO THE JUDGMENT BY WHICH WE APPLY TO OTHER COMPANIES USING OUR

23:24 TECHNOLOGY. OUR TECHNOLOGY IS GENERAL-PURPOSE. SO IMPOSING OUR VALUES ON SOME OTHER PEOPLE’S COMPANIES. FOR INSTITUTIONS IN COUNTRIES, THAT’S LARGELY OUT OF BOUNDS. STEPHEN: JENSEN HUANG SPEAKING EXCLUSIVELY TO BLOOMBERG. COMING UP, PIVOTING TO AMERICA. WHY VOLKSWAGEN HAS DECIDED THAT THE U.S. IS A MARKET IT CAN’T IGNORE. OUR BIG TECH STORY IS NEXT. THIS IS BLOOMBERG.

23:56 ♪ STEPHEN: LIVE FROM BRUSSELS, THIS IS BLOOMBERG DAYBREAK: EUROPE. THE GLOBAL SELLOFF DEEPENS. THE NIKKEI DROPPED 4.5 PERCENT, TRADING ON KOREA’S KOSPI HAS HALTED AFTER IT PLUMMETS BY MORE THAN 8% AS INVESTORS PRICE

24:27 MORE RATE HIKES AFTER U.S. INFLATION COMES IN HOT. BLOOMBERG LEARNS THAT ANTHROPIC HAS TOLD POTENTIAL INVESTORS THAT THIRD QUARTER REVENUE HITS ALMOST $17 BILLION A HEAD A BLOCKBUSTER IPO EXPECTED AS SOON AS NEXT MONTH. EU LEADERS MEETING IN BRUSSELS AS GERMANY PUSHES FOR MORE LIMITS ON CHINESE IMPORTS TO TACKLE RECORD TRADE DEFICITS. LET’S BRING YOU THE LATEST NOW FROM TSMC, ONE OF THE KEY PLAYERS IN THE GLOBAL AI STORY. THIRD QUARTER NET INCOME FOR

25:03 TSMC AT JUST OVER 763 BILLION TAIWANESE DOLLARS. THAT’S A BEAT ON THAT FIGURE FROM TSMC AS WE ARE LOOKING AT THE NUMBERS COMING IN NOW. GROSS MARGIN AT 66%, SLIGHTLY BELOW ESTIMATES BUT BROADLY IN LINE. THE WORLD’’S BIGGEST FOUNDRY, A KEY EFFORT TO TRY TO MOVE THE AI SENTIMENT THAT HAD TURNED SOUR DURING YESTERDAY’S TRADING SESSION. THESE NUMBERS COMING IN WITH A BEAT ON THE NET INCOME FIGURE FOR THE THIRD QUARTER. LET’S BRING IN ANTHONY STEPHENS FOR MORE ON THIS.

25:36 WE ARE GOING INTO THESE NUMBERS WITH VERY FRAGILE SENTIMENT IN THE AI SPACE. IS THIS GOING TO GIVE MARKETS THE BOOST WHEN WE COME TO THE OUTLOOK FOR AI TRADE? >> LOOK. IT’S ANOTHER SET OF GREAT NUMBERS. GUIDANCE COMES OUT IN THE NEXT HALF AN HOUR WHEN THE CONFERENCE STARTS AT 2:00 HONG KONG TIME. IT WILL BE INTERESTING TO SEE WHAT THEY SAY ABOUT THE MARGINS, WHAT’S BEEN IMPACTING THE MARGINS. WHETHER THERE’S A SUPPLY CHAIN

26:08 CRUNCH IN TERMS OF MATERIALS AND ACCESS TO MACHINES FROM ASML AND THE LIKE. ALSO, WHAT DOES THE CUSTOMER MIX LOOK LIKE? THEY’VE BEEN ASKED BY SO MANY PRODUCERS OF CUSTOM AI CHIPS TO BE THE FOUNDRY OF CHOICE. HOW ARE THEY DISTRIBUTING THE WORKLOAD? WHAT ARE THEY SEEING IN TERMS OF THE GO FORWARD DEMAND FOR THE FOUNDRY SPACE? LASTLY, ANY GUIDANCE IN TERMS OF NVIDIA. CAPITAL EXPENDITURE WILL BE IN FOCUS.

26:40 TAIWAN’S MARKET FEEDS OFF TSMC. TSMC’S 40% OF THE MARKET. CAPEX MAKES UP THE REST OF THE INDEX. RETAIL IS EXTREMELY LONG. THEY WILL BE LOOKING FOR GUIDANCE IN TERMS OF STUFF LIKE CHEMICALS, MATERIALS, PACKAGING, AND SO ON. IN THE REST OF THE REGION, THEY WILL BE LOOKING AT WHAT TSMC WORKS AS FINAL DEMAND. THE MEMORY TRADE IN KOREA. THOSE PLAYERS WILL BE LOOKING CLOSELY AT THE RESULT. IT’S INTERESTING TO SEE THE ABSOLUTE LACK OF REACTION

27:12 ACROSS THE TECH SPACE TO THOSE GOOD NUMBERS. MASTEC FUTURES NOT DOING MUCH AND NEITHER IS THE KOREAN MARKET. STEPHEN: OK. THANK YOU VERY MUCH FOR BRINGING US CONTEXT FOR THOSE BREAKING NUMBERS FROM TSMC. USERS CAN FOLLOW ALL THE DEVELOPMENTS FROM TSMC’S EARNINGS AND CONFERENCE CALL ON TLIV . THE PRESIDENT OF THE EUROPEAN AUTO LOBBY HAS WELCOMED THE RECENT DEAL TO CAP THE IMPORTS OF CHINESE HYBRID VEHICLES TO THE EU. THE CEO OF MERCEDES-BENZ GROUP

27:46 CALLED FOR A LEVEL PLAYING FIELD AND FOR THE EU TO INCREASE ITS COMPETITIVENESS. HE’S BEEN – SPEAKING TO OLIVER CROOK HERE IN BRUSSELS. >> ARE REACTING – OUR REACTION TO THIS AGREEMENT, WE THINK IT’S A PRAGMATIC AGREEMENT TO CREATE SOME LEVEL PLAYING FIELD HERE AND MAYBE HAVE A LITTLE BIT OF A PAUSE IN THE MARKET DEVELOPMENT. SO WE WELCOME THIS AGREEMENT. BUT ULTIMATELY, IT’S UP TO THE EU TO IMPROVE ITS

28:19 COMPETITIVENESS. WHAT I THINK WILL HAPPEN OVER TIME IS THAT OEMS FROM OTHER COUNTRIES THAT WANT TO DO BUSINESS IN EUROPE, THEY WILL LOCALIZE THEIR ACTIVITIES HERE AS WELL AS WE HAVE DONE IN MARKETS AROUND THE WORLD FOR A LONG TIME INCLUDING CHINA. >> YOU’VE BEEN A BIG DEFENDER OF FREE MARKETS AND LIBERAL ECONOMICS IN TERMS OF GETTING FREE TRADE. NOW IT SEEMS THAT GERMANY WHO HAS BEEN A STRONG ADVOCATE FOR THAT SEEMS TO BE SHIFTING. I WOULD LIKE TO GET YOUR VIEW

28:52 OF HOW YOU CEU POLICY IN TRADE SHIFTING TOWARDS CHINA. WHAT DOES A SUSTAINABLE ONE LOOK LIKE? >> IMPROVED COMPETITIVENESS OF EUROPE. THAT’S WHY WE ARE CALLING UPON POLICYMAKERS TO CREATE AN ENVIRONMENT WHERE THE COMPETITIVENESS OF EUROPE HAS IMPROVED. THAT’S WHAT WE DO EVERY DAY IN OUR BUSINESSES. GLOBAL COMPANIES LIVE OFF OF GLOBALIZATION AND FREE TRADE. THERE’S NO QUESTION. THE REALITIES OF WHAT WERE SEEING IN THE WORLD ON TRADE POLICY IS, IT’S NOT ALWAYS A LEVEL PLAYING FIELD. FROM TIME TO TIME, POLICYMAKERS

29:26 NEED TO STEP IN AND LEVEL UP THE PLAYING FIELD. I THINK THAT’S WHAT THE AGREEMENT LAST FRIDAY WAS ALL ABOUT. >> EU LEADERS WILL BE DESCENDING NEXT DOOR FOR THE NEXT FEW DAYS TO DISCUSS TRADE MEASURES GOING FORWARD. DO YOU THINK EUROPE IS AT RISK OF GETTING TO PROTECTION MYSTIC ON THE QUESTION OF CHINA? DO YOU THINK THEY ARE RESPONDING ACCURATELY TO SOME OF THE IMBALANCES IN THE TRADING SYSTEM DO YOU FEAR FOR RETALIATION? WHAT COULD THAT LOOK LIKE?

29:57 >> BOTH EU AND CHINA OVER THE LAST DECADES, AND IN THE DECADES TO COME, WILL BENEFIT FROM COOPERATION. IT NEEDS TO BE FAIR AND A LEVEL PLAYING FIELD. WE WILL INVEST MORE IN CHINA. THEY WILL INVEST MORE HERE. SO COOPERATION NEEDS TO BE I THINK THE SPIRIT OF NEGOTIATIONS THAT ARE ONGOING. IN THE POLITICAL REALITIES THAT WE LIVE IN, I’M SURE THAT THERE WILL ALSO BE POLICYMAKING THAT TAKES IN THE LEVEL PLAYING FIELD INTO ACCOUNT. STEPHEN:

30:29 THAT’S THE PRESIDENT OF THE EUROPEAN AUTO LOBBY AND THE CEO OF THE MERCEDES-BENZ GROUP. PRESSURE MOUNTING ON VOLKSWAGEN TO ONCE AGAIN ATTEMPT TO CRACK THE U.S. MARKET DESPITE DECADES OF STRUGGLES. BUSINESS IN CHINA DECLINES. THE CARMAKER CEO IS HELPING A NEW U.S. ENCOURAGEMENT, A BIG GROWTH OPPORTUNITY. THE STORY IS TODAY’S BIG TAPE DEEP DIVE. I’M JOINED BY ELISABETH BEHRMANN. WHAT IS THE CEO OLIVER BLOOM

31:02 PROPOSING TO BRING TO THE U.S. MARKET THIS TIME? >> THANK. CLEARLY THEY WERE SAYING IN THE STORY, THEY ARE GOING TO TRY TO TACKLE THE VERY LUCRATIVE BUT ALSO VERY COMPETITIVE SEGMENT OF MIDSIZE SUVS AND ALSO PICKUPS. A COUPLE OF THINGS WE KNOW ABOUT, SOME DETAILS. THERE’S THE REVIVAL OF THE SCOUT BRAND. LONG ASSOCIATED WITH OFF-ROAD VEHICLES AND BUILDING A PLANT IN SOUTH CAROLINA FOR THAT.

31:36 THEN THERE’S ALSO THE PLAN TO BRING BIGGER SUVS TO THE BRAND. THERE’S THE Q NINE WHICH WOULD BE QUITE POPULAR WITH CUSTOMERS. WHERE IT’S GETS MORE INTERESTING NOW IS THOUGHTS AND PUSH FOR THE VW BRAND. THEY DON’T REALLY HAVE ANY PRODUCTS TO COMPETE WITH THE LIKES OF THE TOYOTA TACOMA, THE JEEP WRANGLER, OR THE FORD BRONCO. THAT’S THE SAME WHEN THEY TACKLE THINGS. IT WOULD BE EXCITING AND INTERESTING TO SEE IF THEY CAN PULL THAT OFF. IT’S A REALLY COMPETITIVE

32:07 SEGMENT. STEPHEN: WHY IS THERE SUCH A NARROW WINDOW FOR VW TO GET THIS RIGHT? HOW COULD IT BE ACHIEVED? >> YES. IF YOU LOOK AT SOME OF THE RECENT RESULTS AND EXPECTATIONS, THEY’VE HAD A MAJOR PROFIT MORNING. THIS YEAR, THEY EXPECT OPERATING MARGIN OF NO MORE THAN 1%. THEY WANT TO GET TO A MINIMUM OF 8% BY THE END OF THE DECADE.

32:42 WHILE THEIR KEY MARKETS ARE REALLY STRUGGLING. CHIEF AMONG THEM OF CHINA. JUST HAVE SOME MORE CELL NUMBERS THEREFROM VW. DOWN 39% IN THE THIRD QUARTER. OUTPACING THE LOSSES IN THE MARKET WHICH IS QUITE WEAK. IN EUROPE, THEY ARE FACING COMPETITIVE ISSUES WITH ALSO CHINESE CARMAKERS LIKE BYD, GETTING INTO THE FRAY. THEN ALSO THEIR OWN COST ISSUES AT THE EUROPEAN PROMPTS. THEN TURNING TO THE U.S.. I THINK THE MOST INTERESTING

33:16 PART TO POINT OUT, WHERE WE SEE THE MOST MOVEMENT WILL BE ON THE VW BRAND. ONE AREA WHERE THEY COULD TRY TO TACKLE THIS IS GETTING A PARTNER. WE’VE ALREADY REPORTED MYTHS ABOUT THEM SEEKING TALKS OR COOPERATION WITH THEIR EXISTING PARTNER FORD. BUT FORD HAS TOLD US FOR NOW, THERE’S NOT MUCH TO REPORT. ALSO THE FEELING AT FORD IS THAT THEY DON’T REALLY WANT TO GET SOMEBODY ELSE TO CANNIBALIZE THEM ON THEIR OWN HOME TURF. THE OTHER INTERESTING PART IS

33:50 THE UPCOMING FACTORY SCOUT THAT I JUST MENTIONED IN SOUTH CAROLINA. SHIPMAN’S FROM THE PLANTER SUPPOSED TO START IN 2028. BOTH THE MODELS THERE ARE ELECTRIC OR RANGE EXTENDER ELECTRIC. IT IS CONCEIVABLE THAT VW COULD CONSIDER ADDING AUDI MODELS AT THAT SIZE. AUDI CURRENTLY DOESN’T HAVE ANY PRODUCTION IN THE U.S. AND THAT IS SETTING THEM UP FOR A BIG HIT ON THE U.S. TARIFFS. STEPHEN: OK. ELISABETH BEHRMANN THERE THIS MORNING. THANK YOU FOR BRINGING US DETAILS OF THE STORY.

34:24 VOLTERRA PLATINUM IS THE WORLD’S LARGEST MINOR OF PLATINUM GROUP METALS. IT LAUNCHES A STANDALONE COMPANY LAST YEAR, SPINNING OFF FROM A GLOW AMERICAN. THE SOUTH AFRICAN FIRM IS LOOKING TO BUILD ITS MARKET FOR METALS AS BATTERY ELECTRIC VEHICLES THREATENS THEIR PRIMARY AREA OF DEMAND. IN THE LATEST EPISODE OF BLOOMBERG T FUTURE OFFICER, JENNIFER ZABASAJJA SPOKE WITH THE CFO ON SHAPING THE FIRMS STRATEGY. >> FOR ME, IT’S REALLY ABOUT, HOW CAN WE DO SOMETHING IN THE

34:55 MOST COST-EFFECTIVE WAY? HOW DO WE ENSURE THAT WE GET ADDITIONAL ANSWERS THAT WE BRING INTO THE MARKET? AND AT THE SAME TIME, ALL OF OUR ASSETS ARE FIRMLY POSITIONED IN THE FIRST HALF OF THE CURVE. WE ARE A COMMODITY BUSINESS. WE ARE CYCLICAL. IT’S ABOUT ENSURING THAT WE ARE RESILIENT THROUGH THE CYCLE AND WE CAN GENERATE ALL OF OUR ASSETS THROUGH THE CYCLE. STEPHEN: GERMAN – JENNIFER ZABASAJJA

35:26 JOINS US NOW. HOW DOES THE COMPANY VIEW THE DEMAND OUTLOOK THEN FOR THESE METALS? >> IF YOU SPEAK TO CRAIG, THE CFO AND THE CEO, THEY ARE BULLISH ON WHAT THEY SEE AS THE LONG-TERM DEMAND FOR PGI. ESPECIALLY IT’S IMPORTANT TO TAKE A LOOK AT WHEN THEY SPUN OFF FROM ANGLO AMERICAN. WE DID SEE PLATINUM PRICES REALLY SKYROCKETING. NOW THEY STABILIZED A BIT, ESPECIALLY IF YOU TAKE A LOOK AT THE YEAR TO DATE PRICES. WHAT THEY SEE AS LONGER-TERM

35:59 DEMAND IS UNDERPINNED BY A FEW AREAS. THEY SEE THE SLOWER TRANSITION TO ELECTRIC VEHICLES AS SUPPORTING THE PGM DEMAND. TAKE A LOOK AT INTERNAL COMBUSTION ENGINES. SO AS CONSUMERS CONTINUE TO SLOWLY TRANSITION TO ELECTRIC VEHICLES, STILL USING HYBRID VEHICLES, THAT’S A NEED FOR IT THERE. THERE’S ALSO STRICTER EMISSIONS GLOBALLY THAT HAVE INCREASED

36:31 THE REQUIRED LOADINGS OF PGM’S. ALSO SUPPORTING LONGER-TERM STRATEGY. FINALLY, THEY ARE BULLISH ON THE DEMAND OUTLOOK FOR THE AI ECONOMY AND HOW PGM’S COULD FACTOR INTO THAT. ALSO EMERGING TECHNOLOGIES SUCH AS FIBERGLASS. ALSO THE HYDROGEN SECTOR WHICH COULD SUPPORT WHAT THEY SEE AS A LONGER-TERM OUTLOOK FOR THEIR MINDS AND THEIR MINERALS. THEY DO NEED THIS FOR THE COMPANY.

37:03 FILTER A PLATINUM RIGHT NOW. IN SOUTH AFRICA MORE BROADLY, VERY MUCH A DOMINANT PLAYER IN THE INDUSTRY. ESPECIALLY IF YOU LOOK AT GLOBALLY. SOUTH AFRICA HOLDS ALMOST 80% OF THE PLATINUM RESERVES. IT’S IMPORTANT FOR THE COMPANY, FOR THE COUNTRY TO ENSURE THAT THERE’S A BIT OF STABILITY. THE COMPANY IS BEING QUITE CONSERVATIVE AND A BIT MORE RESILIENT AS I WOULD SAY JUST TO ENSURE THAT THE DEMAND PICTURE IS THERE FOR THE NEAR

37:34 TERM, MEDIUM TERM, LONGER-TERM PICTURE AS THEY CONTINUE TO GROW AS A STANDALONE COMPANY. STEPHEN: OK. JENNIFER ZABASAJJA IN JOHANNESBURG FOR US THIS MORNING. YOU CAN WATCH MORE FROM THE CONVERSATION ON BLOOMBERG CHIEF YOU’VE – T FUTURE OFFICER COME OUT NOW AND AVAILABLE TO BLUE – VIEW ON YOUTUBE. SOLID MOBILE NETWORK DEMAND SEES ERICKSON EARNINGS BEAT EXPECTATIONS. WE BREAK DOWN THE NUMBERS WITH THE COMPANY’S CHIEF EXECUTIVE, NEXT. THIS IS BLOOMBERG. ♪

38:15 STEPHEN: WELCOME BACK TO BLOOMBERG DAYBREAK: EUROPE. ERICSSON BEAT ANALYST EARNING EXPECTATIONS FOR THE THIRD QUARTER DUE TO SOLID DEMAND FOR MOBILE NETWORK EQUIPMENT. THE COMPANY NOTED THE COMPONENT COST WILL PRESSURE MARGINS NEXT YEAR. JOINING ME NOW IS THE CEO. GREAT TO HAVE YOU ON THE PROGRAM THIS MORNING. I’M INTERESTED IN THE EXPLANATION BEHIND THE DRIVE HIGHER ON THIS BEAT IN EARNINGS TODAY.

38:46 THE LAST TIME AROUND, THE STORY WAS ABOUT MARGIN PRESSURES. WHAT HAS DRIVEN GROWTH THIS TIME AROUND? >> THANKS FOR HAVING ME. YES. WE REPRESENT A STRONG REPORT TODAY. WE BE THE EXPECTATIONS. WE SEE SOLID DEMAND FROM CUSTOMERS. WE SEE THAT WE ARE WELL POSITIONED IN THE MARKET. AS YOU SAID, THERE’S A HEADWIND ON COMPONENTS. WE’VE BEEN WORKING WITH TACTICAL ACTIONS IN ORDER TO MITIGATE THAT SO WE HAVE SOLID GROSS MARGINS.

39:19 WE ALSO SEE THAT THERE’S AN ELEMENT OF CUSTOMERS BUYING MORE. WE SEE THAT ON THE COMMODITY MIX. OUR CUSTOMERS ARE TRYING TO MATURE – MAKE SURE THEY BUY BEFORE THE PRICES ARE INCREASED. STEPHEN: YOU HAVE WARNED ABOUT THE COST PRESSURES COMING IN 2027 ON MARGINS. HOW DO YOU EXPECT THAT TO PLAY OUT? CAN YOU DO – STILL DO ANYTHING TO MITIGATE THE EFFECTS OF IT? >> WHAT YOU SEE IS THAT WE HAVE BEEN SUCCESSFUL IN THIS QUARTER.

39:50 TACTICAL ACTIONS. FOR EXAMPLE, APP SELLING, MAKE SURE WE DO PRODUCT SUBSTITUTIONS FOR PRODUCTS THAT ARE MORE BENEFICIAL. OVER TIME, WE NEED TO HAVE MORE STRUCTURAL ACTIONS. WE NEED TO INCREASE PRICES AND WORK ON OUR SIDE. WE SEEM TO SEE THAT THE DEMAND AROUND AI AND DATA CENTERS THAT WILL PREVAIL INTO 2027 AS WELL. MEANING WE WILL HAVE THIS COST PRESSURE FOR SOME TIME. WE CANNOT AFFORD THESE COSTS. WE NEED TO WORK INTO NEXT YEAR.

40:23 IT TAKES A BIT OF TIME IN OUR INDUSTRY. THE LONG TRACK WITH OUR SUPPLIERS AND CONTRACT WITH OUR CUSTOMERS. BEFORE THAT, THERE’S A LITTLE BIT OF TIME. STEPHEN: WHAT SORT OF LEEWAY DO YOU HAVE WITH YOUR CUSTOMERS TO RENEGOTIATE CONTRACTS? WHAT SORT OF PRICE INCREASES SHOULD YOUR CUSTOMERS BE EXPECTING? >> WE TYPICALLY SIT WITH LONGER CONTRACTS FOR THREE TO FIVE YEARS WITH OUR CUSTOMERS. WHEN WE SIGN A CONTRACT, WE

40:56 SIGNED THEM ON THE EXISTING PORTFOLIO. WE CONTINUOUSLY COME OUT WITH NEW PRODUCTS. WHEN WE ADD NEW PRODUCTS TO THE CONTRACTS, WE HAVE TO MAKE SURE THAT THOSE REFLECT THE COST STRUCTURE THAT WE HAVE. IN THAT WAY, WE ARE MITIGATING THE COST INCREASE. NO CUSTOMER IN THE END LIKES TO SEE COST INCREASES. YOU SEE THIS IN MANY INDUSTRIES NOW. I THINK THERE’S A REALIZATION IN THE MARKET THAT PRICES WILL GO UP. IN THE END, IT WILL HAVE TO BE

41:28 PASSED ON TO END CONSUMERS. STEPHEN: WHAT IS YOUR FIRST STRATEGY UPDATE THIS MORNING? WHY DID YOU FOCUS ON ASIA FOR THIS PARTICULAR UPDATE? WHAT DOES IT MEAN FOR YOUR BUSINESS IN CHINA? >> WE ARE ANNOUNCING TO CHANGES IN OUR STRUCTURE TODAY. ONE IN RELATION TO OUR MARKET AREAS. WE ARE COMBINING INTO OUR ASIA MARKET AREAS. THIS IS ACTUALLY TO FOCUS EVEN MORE ON ASIA.

42:01 WE SEE VERY IMPORTANT MARKETS THERE. INDIA, JAPAN. WE WANT TO MAKE SURE WE HAVE A GOOD BALANCE AND A STRONG REPRESENTATIVE FOR THE AREA. WE SUPPORT OUR CUSTOMERS AS WELL. WE WILL CONTINUE TO STRENGTHEN THE COUNTRY DIMENSION. MAKING SURE THAT WE HAVE ENOUGH POTENTIAL IN A PACKED, GIVEN THE IMPORTANCE OF IT. WE MADE SOME CHANGES ON THE ENTERPRISE SIDE. WE SEE CONDUCTIVITY BECOMING EVEN MORE IMPORTANT. NOT THE LEAST WITH SPACEX ENTERING THE INDUSTRY. WE WANT TO MAKE SURE THAT WE HAVE THE BEST POSSIBLE ON THE

42:34 R&D SIDE. WE HAVE A STRONG MACHINE THAT CAN HANDLE GOOD SOLUTIONS. WITH SATELLITE COMING IN, WE BELIEVE HAVING THIS EXPERIENCE WILL BECOME EVEN MORE IMPORTANT. STEPHEN: WE’VE BEEN REPORTING ON THE EFFORTS MADE TO REDUCE THE TRADE DEFICIT WITH CHINA. ARE YOU CONCERNED THAT ANY RAMPING UP OF TENSIONS IN THAT RELATIONSHIP COULD AFFECT YOUR BUSINESS IN CHINA? >> WE ARE TODAY A VERY SMALL PLAYER IN CHINA.

43:07 WE STILL HAVE A FACTORY IN CHINA. WE HAVE MANY COMPONENTS COMING FROM CHINA. MORE ON THE PASSIVE SIDE. WE WORK A LOT WITH SUPPLY RESILIENCE. WE ARE CONFIDENT WE CAN HANDLE INCREASED TENSION IN RELATIONS. WE ARE ALREADY A VERY SMALL PLAYER. LOW SINGLE-DIGIT MARKET SHARE IN CHINA. WE ARE MUCH MORE FOCUSED ON NORTH AMERICA, INDIA, JAPAN FOR EXAMPLE. STEPHEN: I WANT TO ASK YOU ABOUT ANOTHER

43:40 BIG ISSUE FACING THE CONSULATE OF EUROPE, THE RISE IN HYBRID ATTACKS. GIVEN THE NATURE OF THE NETWORK INFRASTRUCTURE THAT YOU PROVIDE, HAVE YOU ADAPTED YOUR SECURITY PROVISIONS? ARE YOUR CUSTOMERS WORRIED ABOUT THE POTENTIAL FOR THESE KINDS OF ATTACKS? >> WE ARE INVESTING HEAVILY IN SECURITY IN OUR NETWORKS. WE HAVE INCREASED OUR SPENDING ON SECURITY THE PAST COUPLE YEARS. WHEN IT COMES TO PRODUCTS, WHAT

44:11 WE NEED TO MAKE SURE IS THAT WE GET SOFTER PATCHES OUT QUICKLY IN THE NETWORKS. WE TYPICALLY TALK ABOUT VULNERABILITIES AND MAKING SURE THAT YOU PATCH THOSE VERY QUICKLY. OTHERWISE YOU ARE MORE EXPOSED FOR ATTACKS. I TOTALLY AGREE WITH YOU. THIS IS MORE IMPORTANT GOING FORWARD. THAT IS SOMETHING WE WORK VERY CLOSELY WITH OUR CUSTOMERS. STEPHEN: OK. THANK YOU VERY MUCH FOR JOINING US FOR YOUR FIRST EARNINGS INTERVIEW AS CEO OF THE COMPANY.

44:41 PLENTY MORE COMING UP. STAY WITH US. THIS IS BLOOMBERG. ♪ STEPHEN: WELCOME BACK TO BLOOMBERG DAYBREAK: EUROPE. TAKING A LOOK AT SOME CHARTS TO HELP US TRACK THE MARKET MOVEMENTS WE ARE FOLLOWING FOR YOU THIS MORNING. LOOK AT WHAT’S BEEN HAPPENING TO FEDERAL RESERVE RATE HIKE CAP’S – BETS.

45:14 IF WE ARE LOOKING AT THE DECEMBER LINE HERE IN YELLOW, THAT IS THE INDICATION THAT WE DO HAVE MARKETS PRICING IN A GREATER INDICATION OF A HIKE COMING THERE. WE DID SEE PULLING BACK OF THE INITIAL REACTIONS PARTICULARLY IN RELATION TO THE OCTOBER MEETING. ALL EYES FOCUSED ON DECEMBER FOR THE NEXT FED MEETING. THE MOVES AFTER THE CPI PRINT IN FOCUS AS WE LOOK AHEAD TO THE LATEST JOBLESS CLAIMS NPP I DATED TO COME LATER TODAY. STOCK REACTION ECLIPSED IN TERMS OF THE SELLOFF AND SHIP STOCKS AS WELL. INTERESTING TO NOTE WE HAVE

45:48 STOCKS RETREATING FROM THOSE HIGHS AS THE TENURE YIELD HIGH HOLDS. ALL THE FOUR MAJOR U.S. INDEXES FINISHED IN THE RED YESTERDAY SMALL CAPS HIT BY ZACH. THE RUSSELL 2000 LAGGING ALL MAJOR INDEXES THIS MONTH. IT’S IN CORRECTION TERRITORY AS WELL. IMPORTANT TO THINK ABOUT THE BROADER EFFECT OF THIS WHILE YIELDS REMAIN AT THESE CURRENT LEVELS AS WELL. ON THE AI STORY. WE ARE LOOKING AT COREWEAVE CLOSELY.

46:20 PARTICULARLY ITS DEFAULT SWAPS SOARING. GOING HIGHER THAN THAT AS WELL AFTER WE DID HAVE THE LATEST COMMENTS FROM THE CEO YESTERDAY. COMPETITION RISING AS WELL. THIS IS SOMETHING WE ARE KEEPING AN EYE ON FOR YOU LATER TODAY. BLOOMBERG’S NEW ECONOMY FORUM IN NEW DELHI DRAWS TO A CLOSE LATER TODAY. MARIO DRAGHI WILL BE DELIVERING THE CLOSING ADDRESS AT 8:00 LONDON TIME, 9:00 IN BRUSSELS. THE OPENING TRADE IS UP NEXT. THIS IS BLOOMBERG.

46:52 ♪