Will the US clamp down on AI chips?
Shares of high-flying chip makers such as Nvidia and AMD were down in premarket trading today after The Wall Street Journal reported that the Biden administration is weighing in. New restrictions on exports of artificial intelligence-related semiconductors to China,
The deliberations underscore the White House’s concerns about falling behind in the race to dominate AI and the potential for Beijing to use the technology in military applications — and they show it may be cracking down on trade to stay ahead. is ready.
Any such move would curb sales of some lower-end AI chips, According to The Journal, the Biden administration last year limited exports of most advanced semiconductors. This would include Nvidia’s A800 chips, which the company built specifically to comply with earlier restrictions set by the Commerce Department on computational performance. Those chips may now require a license to sell to Chinese companies.
The report is knocking on the shares of companies that will be affected, However, a final decision is not likely until next month, after Treasury Secretary Janet Yellen returns from a trip to Beijing. Shares of Nvidia, which has more than doubled this year due to investor enthusiasm for AI, were down more than 3.1 percent as of 7 a.m. on the report, while AMD shares were down 3.5 percent.
Chinese tech company stocks Also took a hit: Chengdu Information Technology of the Chinese Academy of Sciences fell nearly 12 percent today, while Inspur Electronic Information Industry lost 10 percent.
The goal is to disrupt China’s AI progress in the name of national security. The White House has repeatedly said it views AI as an important technology for a variety of applications, from military weapons to cyber security, and has also asked allies including Japan and the Netherlands to restrict exports to Beijing.
This has left corporate leaders in the difficult position of supporting efforts to protect American interests while protecting their businesses. (Nvidia, for example, derives about 20 percent of its revenue from China.) “I cannot stress this enough: If we treat every economic interaction as a risk, we will lose focus on them. Those really pose a threat,” Susan Clark, president of the US Chamber of Commerce, said in a speech last month.
It is not clear how Beijing will react, But the prospect of further escalation of the US-China trade war is real. Last month, the Chinese government barred domestic companies that handle critical information from buying chips made by Micron, citing “relatively serious cyber security problems”.
In other US-China news: A top Biden administration official Expressed concern to Sequoia According to The Journal, last year the venture capital firm’s China unit was reported to have made investments in local start-ups that could pose a national security risk. This month, Sequoia unveiled plans to spin off its Chinese and Indian investment arms.
What’s going on over here
Federal investigators have blamed prison mismanagement for the death of Jeffrey Epstein. A Justice Department investigation has found that gross negligence and misconduct at the now-shuttered Manhattan prison allowed a convicted sex offender and disgraced financier to die by suicide. The report found no evidence that contradicted earlier findings that Epstein killed himself.
UBS is said to be planning widespread layoffs at Credit Suisse. expect from swiss bank cut in half Its one-time rival’s 45,000-person workforce is being laid off starting next month, according to Bloomberg. UBS this month closed its government-brokered deal to buy Credit Suisse, and scrapping it will be part of an effort to reduce the bank’s costs of survival by about $6 billion.
Fidelity Reportedly Planning to Unveil a Bitcoin ETF Asset Management Titan is expected to file for approval spot bitcoin exchange-traded fund, according to The Block. That would make it the latest Wall Street giant to push for a mainstream fund built around cryptocurrencies, in hopes that the SEC will eventually approve such efforts.
A Russian general had advance knowledge of Yevgeny Prigozhin’s rebellion plans. US intelligence is still trying to determine whether General Sergei Surovikin, the former top Russian commander in Ukraine, helped the leader of the Wagner Group plan an armed insurgency.
US regulators are taking steps to tighten scrutiny of the deals. antitrust authorities have proposed want more information Disclosures on subsidies received from certain governments, including those of China, Iran and Russia, from companies planning mergers. If the potential new rules are adopted, closing deals could be delayed by several months and lead to more paperwork.
Inflation clouds loom over central bankers
Investors on both sides of the Atlantic will tune in at 8:30 a.m. Eastern today for the main event of the European Central Bank’s summer confab in Portugal: a discussion between ECB President Christine Lagarde; 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 mountain resort town of Sintra at a difficult time for the global economy, as a cost-of-living crisis looms large over North America, Europe and beyond.
Big question: Can central bankers steer their economies out of protracted recessions even as they step up their battle with inflation?
Analysts are divided. Tomorrow, HSBC Predicted That the United States would slide into recession in the fourth quarter, followed by a recession in Europe next year. Goldman Sachs economists are predicting a recession in the US more mild 35 percentBut the Fed sees a “tough road” ahead to avoid a so-called hard landing.
Most of the panelists have laid down an aggressive policy on interest rates. Combined, they have raised rates 31 times since December 2021. The Bank of England leads the pack with 13 hikes (which have had little impact on inflation), followed by the Fed (10), the ECB (eight) and Japan (zero). Low inflation persists in Japan, and the central bank hasn’t touched rates since 2016).
Further growth is expected in the US, Europe and the UK. The futures market is pricing in at least one more Fed hike this year — possibly at its July meeting. Markets see the ECB and the Bank of England as having more to do to reduce extremely high inflation.
Lagarde warned yesterday in a scathing tone that euro zone inflation has pervaded every layer of the economy. To bring prices down further, the central bank “must bring rates down to a sufficiently restrictive level and keep them there as long as necessary,” he said.
Watch for more tight talk from the Fed today. The central bank “must express its commitment to fighting inflation at any cost,” Michael Gapen, chief US economist at Bank of America, wrote in an investor note this week.
“They don’t want a normal person, a normal company. They want something extraordinary. You are not born extraordinary.”
, Spencer ShulemThe CEO of Buildbetter, on why he sometimes uses LSD. He says the drug boosts his creativity and focus, and that gives him an edge with venture capitalists looking for exceptional start-up executives in which to invest.
What happened at the PGA Tour meeting?
Becoming a PGA Tour director was never considered particularly controversial. But yesterday’s board meeting in Dearborn, Michigan was more important than most. It was the first deal since the PGA Tour tentatively agreed on June 6 to merge with the Saudi-backed LIV Golf League, a deal that most of its directors, including its player members, knew nothing about prior to its announcement .
The dealbook was there.
Hiding the board for hours On the first floor of the Henry Hotel. Wachtel’s Edward Herlihy, chairman of the board and one of the lead negotiators for the deal, was in attendance; Mary Meeker of investment firm Bond; and Randall Stephenson, former CEO of AT&T. The board’s five player representatives were also there: Rory McIlroy, Patrick Cantlay, Charlie Hoffman, Peter Malnati and Webb Simpson.
Also seen: Former White House spokesman Robert Gibbs, who was recently appointed to represent the PGA Tour as the proposed deal comes under strong criticism from Washington.
The board said the talks have entered a “new phase”. The five-page framework agreement released this week showed few details had been agreed upon, prompting some lawyers to say the proposed deal looks more like a legal agreement than an M&A transaction. But the PGA Tour reiterated after the meeting that reaching a definitive agreement “is in the best interests of our players, fans, sponsors, partners and the sport as a whole.”
Any final settlement would require board approval. Herlihy and James Dunn, a veteran dealmaker who was also involved in the negotiations, are expected to support the deal, and McIlroy reluctantly lends his support. But most other people on the board haven’t put their hand up yet.
Much of the meeting focused on finding a way to a settlement. A person familiar with the discussions told DealBook it took about three hours to figure out how to sort out some final logistics. Chief among them are: valuations, since the initial deal framework did not appoint anyone to the PGA Tour, LIV or DP World Tour, the leading men’s tournaments in Europe that would also be part of any merger.
The Tour’s bankers at Allen & Company explained its process for valuing the business, which includes sponsorship deals as well as media and digital rights, but did not put forward any specific numbers.
Also discussed was: how will the tour open up to bring back golfers who have moved to LIV.
What will happen next? Top PGA Tour and LIV officials have been invited to appear at a Senate hearing on the deal on July 11.
Oaktree CapitalThe investment giant has named Robert O’Leary and Armen Panosian as its co-CEOs (WSJ).
Trucking company Yellow may apply for bankruptcy protection amid a dispute with its union, despite receiving $700 million in pandemic-era relief from Washington. (NYT)
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