Will the US strengthen its cordon around AI chips?
Shares of fast-growing semiconductor makers such as Nvidia and AMD are ahead of the market today after The Wall Street Journal reported that the Biden administration is considering new restrictions on exports of artificial intelligence-related semiconductors to China. fell in trading.
The deliberation underscores the White House’s concerns about falling behind in the race for AI supremacy and the potential for Beijing to use the technology for military applications, giving China the upper hand. It indicates a willingness to tighten the screws of the trade to keep
Such a move would stifle sales of some low-end AI chips. After the Biden administration restricted exports of cutting-edge semiconductors last year, the Journal reported. That would include his Nvidia’s A800 chip, which the company specifically developed to comply with previous limits set by the Department of Commerce on computing performance. A license may be required to sell these chips to Chinese companies.
The report has plunged the stock prices of the companies that would be affected. Even though a final decision will likely not be made until next month when Treasury Secretary Janet Yellen returns from a visit to Beijing. Nvidia shares, which have more than doubled this year on investor enthusiasm for AI, were down more than 3.1% as of 7 a.m. ET, according to the report, while AMD shares were down 3.5%.
Chinese tech stocks also took a hit, with the Chinese Academy of Sciences Chengdu Information Technology down nearly 12% today and Insper Electronic Information Industry down 10%.
The aim is to cripple China’s AI progress in the name of national security. The White House has repeatedly said it sees AI as a key technology for a variety of uses, from military weapons to cybersecurity, and has called on allies, including Japan and the Netherlands, to limit exports to Beijing. ing.
That puts corporate leaders in the difficult position of supporting efforts to protect American interests while protecting their own businesses. (Nvidia, for example, gets about 20% of its revenue from China.) “I can’t stress this enough. Treating every economic exchange as a risk loses focus on what really poses a threat.” It’s going to be,” Suzanne says. Clark, president of the U.S. Chamber of Commerce, said in a speech last month.
It is unclear how the Chinese government will react. But the possibility of a further escalation in the US-China trade war is real. Last month, the Chinese government blocked a domestic company handling sensitive information from buying Micron chips, citing “relatively serious cybersecurity issues.”
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Other U.S.-China news: Senior Biden administration officials last year expressed concern over Sequoia’s investments in local startups by the China arm of the venture capital firm, which could pose national security risks, according to the Journal. the paper reported. Sequoia earlier this month announced plans to separate its investment arm in China and India.
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Federal investigators blame prison mismanagement for Jeffrey Epstein’s death. A Justice Department investigation found that a convicted sex offender and dishonored financier committed suicide due to gross negligence and misconduct in a now-closed Manhattan prison. The report found no evidence to contradict previous conclusions that Epstein committed suicide.
UBS is said to be planning large-scale layoffs at Credit Suisse. Bloomberg reports that from next month Swiss Bank will cut more than half of its former rival’s 45,000 jobs. UBS signed a government-brokered deal to buy Credit Suisse earlier this month, and the exit is part of an effort to save the surviving bank about $6 billion in costs.
Fidelity Reportedly Plans to Launch Bitcoin ETF According to The Block, the wealth management giant plans to apply for approval for a spot bitcoin exchange-traded fund. If so, it would be the latest Wall Street giant to push for the establishment of a mainstream fund built around cryptocurrencies in hopes that the SEC will eventually approve such an effort.
Russian generals knew in advance of Yevgeny Prigozhin’s rebellion plans. US intelligence agencies are still trying to figure out if former Russian Supreme Commander in Ukraine, General Sergei Slovikin, aided the Wagner Group leader’s plans for an armed uprising.
U.S. regulators are stepping up scrutiny of transactions. Antitrust officials have suggested asking companies planning to merge for more information, including disclosure of subsidies received from some governments, including China, Iran and Russia. Potential new rules, if adopted, could delay the completion of deals by months and lead to increased paperwork.
Inflation clouds loom over central bankers
Investors on both sides of the Atlantic will be watching the main event of the European Central Bank’s summer meeting in Portugal, the debate between ECB President Christine Lagarde and ECB President Christine Lagarde, starting today at 8:30 am ET. I plan to. Fed Chairman Jay Powell. Andrew Bailey, Governor of the Bank of England. and Kazuo Ueda of the Bank of Japan.
The world’s top monetary policymakers have descended on the hilltop resort of Sintra at a difficult time for the global economy as the cost of living crisis hits North America, Europe and beyond.
Big question: Will central bankers be able to navigate their economies out of a prolonged slump while stepping up their fight against inflation?
Analysts are divided. Yesterday, HSBC predicted that the US would plunge into recession in the fourth quarter, followed by Europe next year. Economists at Goldman Sachs put a relatively modest 35% chance of a U.S. recession, but believe the Fed has a “hard road” to avoid a so-called hard landing. there is
Most of the panelists set aggressive policies on interest rates. In total, there have been 31 rate hikes since December 2021. The Bank of England leads with 13 rate hikes (with little impact on inflation), followed by the Fed (10), the ECB (8) and Japan (nil). Inflation remains low in Japan, and the central bank has had no impact on interest rates since 2016).
Further increases are expected in the US, Europe and the UK. Futures markets are pricing in at least one more rate hike by the Fed this year, likely at its July meeting. The market thinks more must be done by the ECB and the Bank of England to curb stubbornly high inflation.
In a hawkish tone, Lagarde yesterday warned that inflation in the euro zone is taking root at all levels of the economy. To push prices down further, the central bank “must raise interest rates to a sufficiently restrictive level and keep them there for as long as necessary,” he said.
Watch for even tougher statements from the Fed today. Bank of America’s chief U.S. economist Michael Gaipen said in a note to investors this week that central banks need to “convey their resolve to fight inflation at all costs.”
“They don’t want ordinary people or ordinary companies. They want something special. You weren’t born special.”
— Spencer Schremm, the BuildBetter CEO talks about why he occasionally uses LSD. He said the drug boosts creativity and focus, giving him an edge in the race against venture capitalists looking for good start-up managers to invest in.
What Happened at the PGA Tour Meeting
Being a PGA Tour director wasn’t supposed to be particularly controversial. But yesterday’s board meeting in Dearborn, Michigan, was more important than most. It is the first time since June 6 that the PGA Tour agreed to a tentative merger involving the Saudi-backed LIV golf league, and most of the board members, including player members, had no knowledge of the merger prior to the announcement. I didn’t.
I had a DealBook.
The bulletin board was stuck for hours Located on the ground floor of the Henry Hotel. In attendance was Edward Herlihy of Wachtel, Chairman of the Board and one of the lead negotiators on the transaction. Mary Meeker of investment firm Bond. And former AT&T CEO Randall Stevenson. Five players representatives from the board were also present: Rory McIlroy, Patrick Cantlay, Charlie Hoffman, Peter Mulnati and Webb Simpson.
Also spotted is former White House press secretary Robert Gibbs, who was recently hired to head the PGA Tour, which has come under a lot of scrutiny from Washington over the proposed deal.
The Council said negotiations had entered a “new stage”. Few details were agreed in a five-page framework agreement released this week, with some lawyers saying the proposed deal was more like a legal settlement than an M&A deal. But the PGA Tour reiterated after the meeting that reaching a final agreement “is in the best interest of the players, fans, sponsors, partners and the game as a whole.”
A final agreement is subject to board approval. Veteran trader James Dunn, who was also involved in negotiations with Herlihy, is expected to back the deal, and McIlroy has been reluctant to back it. However, most other members on the board have yet to reveal their hands.
Most of the meeting focused on finding a path to agreement. About three hours were spent trying to figure out how to settle the final logistics, a person familiar with the discussion told DealBook. The most important of these is valuation. The original contractual framework did not allocate either to the PGA Tour, LIV or DP World Tour, the leading European men’s competitions that would be part of the merger.
Tour bankers at Allen & Company described the business’s evaluation process, which includes media and digital rights and sponsorship deals, but did not provide specific numbers.
It was also discussed how the Tour would begin to bring back exiled golfers to the LIV.
what’s next? Top PGA Tour and LIV executives were invited to attend Senate hearings on the deal on July 11.
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Investment giant Oaktree Capital names Robert O’Leary and Armen Panosian as co-CEOs (WSJ)
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Trucking company Yellow, which received a $700 million bailout from Washington during the pandemic, could file for bankruptcy protection amid a dispute with labor unions. (New York Times)
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