Semiconductor stocks have been on quite a rollercoaster ride over the past few days.
Yesterday was all gloom. Donald Trump had rocked the industry by warning that he would not defend Taiwan from China in his second term unless Taiwan paid “insurance”, while current President Joe Biden's administration sparked a mini-meltdown by reporting it was considering major new export controls.
Specifically, the US could invoke measures known as foreign direct product rules to block major semiconductor equipment makers such as the Netherlands' ASML and Japan's Tokyo Electron from giving Chinese chipmakers any access to US technology, Bloomberg reported. The Biden administration has already pressured these companies not to sell cutting-edge products to Chinese chipmakers, but the measures being considered would end maintenance on existing machinery, which could result in it breaking down within months.
ASML's shares fell by an eighth on the news, while Tokyo Electron fell 8.7%. U.S. chip-equipment makers, who believed that applying too much pressure on the Netherlands and Japan could erode cooperation between the two companies, didn't fare much better either: Applied Materials, Lam and KLA all saw their shares fall by around 10%.
Meanwhile, shares of Taiwan's TSMC, the world's largest contract chipmaker, fell 8%, while shares of Nvidia, which relies on TSMC to make its industry-leading AI chips, also fell 6.6%. The Nasdaq as a whole fell 2.8%, giving the exchange its worst day since 2022. (Interestingly, chipmakers Intel and GlobalFoundries both fared better on Wednesday, likely because they have large manufacturing facilities in the U.S. and could benefit from Trump or Biden's policies.)
And today the sun came out, as most of the stocks that fell on Wednesday are back on the rise, with the biggest recoveries being TSMC and Nvidia, both of which rose more than 3% at one point, but are still only partially recovered.
TSMC today raised its full-year revenue outlook due to robust demand for AI chips. TSMC CEO and Chairman CC Wei, as reported by Reuters, made comments that fit perfectly with the Mugatu meme: “AI is very popular. Now everyone, all my customers, want to have AI capabilities in their devices.”
But then shares of TSMC and all the other companies fell again, plunging back into the red as investors remained nervous about the near-term course of action in the U.S.
It's a perfect illustration of the tech industry's biggest concerns this year: geopolitical uncertainty colliding with AI enthusiasm. These are moving stories that aren't likely to calm down anytime soon.
For more news, please see below.
David Meyer
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Newsworthy
Meta AI has been temporarily suspended in Brazil. Concerns are growing over Meta's use of user data to train its AI. After suspending its AI deployment in Europe, the company has now done the same in Brazil. Earlier this month, Brazil's National Data Protection Agency had already effectively blocked Meta's AI training practices after the company tried to assert the right to train its AI with users' Instagram and Facebook data. Meta is now trying to address the authorities' doubts, according to Reuters.
Samsung buys AI company. According to Reuters, Samsung will acquire British AI startup Oxford Semantic Technologies for an undisclosed amount. The company develops a “rule-based inference engine” that aims to provide the truth in a transparent way. In related news, EU antitrust regulators are reportedly looking into whether there are issues with Samsung's massive chatbot deal with Google, which includes Google's Gemini Nano model being pre-installed on Samsung's flagship smartphones.
A billion-dollar startup. “Godmother of AI” Fei-Fei Li founded a startup called WorldLab four months ago, and it's already reportedly valued at $1 billion. Financial TimesApparently WorldLab has already raised two rounds of funding from Andreessen Horowitz and Radical Ventures. About half of the startup funding has gone into its AI division in the past three months. Lee, who retired from his position as co-director of Stanford University's Human-Centered AI Lab, is trying to achieve breakthrough results by giving AI “spatial intelligence” by interpreting visual information in a human-like way.
Our Feed
“If politicians are pro-crypto, the key questions they need to ask are: Are they in it for the right reasons? Do they have a vision that aligns with yours for the direction of 21st century technology, politics and the economy? “Do they have a forward-looking vision that goes beyond short-term concerns like, 'We're going to crush the other bad tribes,'” he asks.
—Ethereum co-founder Vitalik Buterin In a blog post titled “Against choosing your political allegiance based on who is 'pro-crypto',” he issued a warning ahead of the US elections.
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Adoption of AI in advertising requires 'no choice', says Interpublic CEO Philip Krakowski, by David Meyer
New technologies such as AI are enabling companies to learn more about their customers, but they also raise privacy concerns. By Luisa Beltran
Going to the moon is a 'moral imperative' to protect humanity, space tech executives say, by Leo Schwartz
Tesla Lets Man Sell His Cybertruck Because It Won't Fit in His Garage, by Marco Quiroz Gutierrez
Zoox CEO says robotaxis are still years away from reaching the business' “holy grail”: Jessica Matthews, New York City
The End of Reliable GPS is Coming, but New Quantum Technologies Could Show the Way Forward, by Michael J. Biercu
Before you leave
Saudi Arabian trade of lilium. Electric aircraft manufacturer Lilium has signed a potentially very lucrative contract with Saudi Arabia's largest airline operator, reports The Verge. Germany's Lilium is building a $10 million, four-seater electric vertical take-off and landing aircraft (eVTOL) called Pioneer. The Saudi contract is the largest in its field to date and covers 50 Lilium jets, with an option for another tranche of the same size. Lilium said in a statement that the aircraft will “support Hajj and Umrah pilgrimages, provide quicker access to major sporting and entertainment events in Riyadh, and open up new possibilities for exploring hard-to-reach tourist destinations across Saudi Arabia.”
