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Hello and welcome to World Business Report from the BBC World Service. I'm Roger Hearing, and on this edition, one of the world's richest companies, NVIDIA, beats expectations on its earnings despite the tariff wars, but could a bigger hit to its profits be on the way? Also a rift in Trump world. Elon Musk isn't happy with the president's big, beautiful finance bill. A German court case sets a precedent for climate change impact to be laid at the door of fossil fuel companies.
And fancy a slice of bear? Slovakia legalises the selling of meat from the endangered brown bear. But will anyone actually eat it? But let's start with Nvidia. Huge success in the tech world. The chipmaker vying with Apple for the position of the world's richest company. So its latest quarterly earnings have been awaited with some interest, especially in this period of tariff chaos.
In fact, the company beat expectations despite export controls, a $4.5 billion hit from US tariffs being less than feared. Nvidia said it made a profit of $18.8 billion on a revenue of $44.1 billion.
causing shares to rise nearly 4% in aftermarket trading. But it does seem that the biggest hit could be yet to come. Let's speak now to our New York business correspondent, Michelle Flurry. Michelle, this was better than people had expected, but the feeling is this is only half the story.
Yeah, so in some ways it confirmed that there is this massive demand for their product and that they are able to meet it for the most part. But one area where they're struggling is the sale of H20 chips to China. These are specially designed...
to try and meet Biden era restrictions on ship sales to China. But within the last few weeks, the Trump administration imposed curbs on that. And so as a result, that has affected both their revenue projections for this quarter and also going forward.
And I think that was sort of the area that investors have been very concerned about. And in fact, it was something that Jensen Huang was asked about during the call just now with investors. So was he giving any kind of reassurance? Was he kind of suggesting that there is a way through this? Because the big hit is very big if it does come.
So they took – they say it's going to hurt revenue by about $8 billion, which is substantial when you think that they're talking about a revenue for the next quarter of around $45 billion. It's not nothing, but it's not everything either.
But here's the thing. Jensen Huang said to investors that the platform that wins China is positioned to win globally, that China's AI moves will carry on with or without US chips. And so he, as the CEO of Nvidia, is worried about kind of being left behind and worried that foreign competitors will move in. The
The problem is he's got to deal with Donald Trump, who feels quite strongly on this issue. And so it's unclear whether or not, you know, there will be any change in this policy. And at the same time, NVIDIA is looking in other areas. It's not just China. The Middle East seems to be quite fruitful at the moment for them.
Well, and I think, you know, as we're talking, this call is going on with investors. And I'm sure there will be questions about how much will some of the losses from the China market be offset by some of the gains you're making in other parts of the world? Obviously, we saw that splashy announcement when he was with the president last week, the other week, obviously.
on that Middle East trip and talking about, you know, the role they're playing in helping the Middle East build their AI infrastructure and AI infrastructure of the future. So those are the positives. The question is kind of the big long term. And I think that's what Jensen Huang was trying to get at with that comment about being left out of China. Clearly, it's something the company is concerned about, but it's not necessarily within their control.
And so at the moment, the key thing we're seeing is they're still doing very well in the markets they have. And importantly, in data centers, that business continues to grow 73 percent growth. Thanks so much. Indeed, Michelle, Michelle Flurry there joining us online from New York. Let's talk to Dylan Patel. He's chief analyst at Semi Analysis, a semiconductor research firm in the San Francisco Bay Area. Dylan, thanks for being with us here on World Business Report.
Were you surprised that they managed to ride out NVIDIA the first quarter reasonably unscathed? You know, this was what the debate was all about was, hey, how much of this China write-down, this China banning would negatively impact NVIDIA, right? And it's sort of a tale of two stories. Everyone knew NVIDIA was completely sold out, but the question was how much of that negative
sold out business was now kneecapped because the new round of China restrictions that have been happening sort of on an annual cadence almost in both the past and current administrations would impact this, impact them. And so there was a lot of fears that it would be, you know, really big, right? They wrote down four and a half billion dollars worth of products that they were making for China
And so the fears were, you know, given NVIDIA's margins are so high, hey, that's 15, 20 billion dollars of revenue that could go away over the course of this year. But instead, it's looking like it's still a pretty big deal, right? Two and a half billion dollars hit this quarter, another eight billion dollars next quarter, right? That's over 10 billion dollars of revenue hit, but not nearly as bad as sort of the expectations were.
Well, yeah, but I mean, the 8 billion, you know, isn't obviously massively in advance of what they've just gone through. I mean, does it keep going like that? Do we see more of that in the next quarter and the next quarter? Is there any way back from this?
Yeah. So, I mean, when you think about the natural state of, uh, chip sales to China, right before the tit for tat and this, uh, you know, sort of the global trade war, the new cold war, however you want to call it, China would have been 30 to 40% of chip sales. Right. And the U S would have been 30 to 40% of chip sales. And then the rest of the world is what's left. Right. Um, you know, even, even when Nvidia was making these China specific chips, uh,
They were only getting to, you know, the 20% range, right, if they had no restrictions, right? So it's kind of regardless, you know, they were already pretty badly hit by prior restrictions. And now these new restrictions further clamp them down, right? So how large would the impact be if there were no restrictions? Well, maybe NVIDIA's numbers would be 30% higher, right? Yeah.
Well, it's possible. And I suppose the other thing is I want to put to you what I was putting in, Michel. This new market, if you like, the Middle East, not entirely new, but their advance move into it, the deal they've cut, this 10 square mile data center site in the UAE. I mean, is this the way forward for them if they've got all this problem between Beijing and Washington?
Right. So this is the interesting aspect, right? The prior administration wanted to limit chip sales to the whole world under this complicated diffusion three-tier system where allies like the UK and a lot of Western Europe and Canada and such would get unfettered access to GPUs. And then there would be tier three countries that don't get any GPUs like China and Russia.
But then there was this huge set of second tier of countries, which included friendly countries like Singapore and India, but also the Middle East and many other countries like Portugal, oddly, that were limited in access to GPUs. Now, this current administration, they've ramped up the pressure on direct sales to China. They banned this China-specific GPU to the tune of $8 billion next quarter. But they've also relaxed the restrictions on this sort of
tier two set of countries, uh, which has meant that there's a significant build out by the middle East, uh, by Malaysia, um, by Vietnam, uh, by India, by Latin America, by all of these other areas of the world that weren't going to buy, uh, so we're going to be able to buy so many GPUs under the diffusion rules. Uh, the biggest chief among them, of course, is the UAE and Saudi Arabia. Um, and that, that is, you know, uh, it is a large amount of GPUs, uh,
Well, if you do the math, right, on how many GPUs the UAE is allowed to buy each year from what the Trump administration has said, that only amounts to something like 10% of NVIDIA's revenue. So it doesn't close the hole of...
China. Right. Indeed, it can't balance that out. It's too big. Dylan, thanks so much for your analysis on that. Dylan Patel there. Let me finally bring in Susan Schmidt briefly, Portfolio Manager at Exchange Capital Resorts in Chicago. Susan, we're going to talk to you a bit more in a moment about other things. But first of all, what has been the impact on the share price of all this? Well, the shares are trading up in the aftermarket. So investors are clearly taking this well. They've again exceeded expectations. And even with the...
about curtailment from export to China, they are riding a wave of, I think, enthusiasm from the market given what's possible in the Middle East. So forward expectations are right in line with what investors are thinking. And it seems to be that the company is well on track managing guidance and managing investors well.
We'll see how it all plays out. Interesting to hear that. Stay with us, Susan. We'll come back to you in just a moment. But let's stay in Washington for a minute because Elon Musk, the billionaire and co-founder and CEO of Tesla, has been a strong backer of President Donald Trump since well before his re-election. And he's had a big hand in the administration, cutting back on government staff and expenditure. So it was something of a surprise that he's been expressing doubts about the president's new finance bill.
Elon Musk told CBS News he was disappointed by what the president has called his big, beautiful bill. It includes multi-trillion dollar tax breaks and a pledge to increase defence spending. Mr Musk said it undid the work of his Department of Government Efficiency, or DOGE, which was created by Donald Trump to cut government spending. You know, I was, like, disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and it reminds the work that the DOGE team is doing.
Elon Musk, the bill has still to get through the Senate. So I asked Julia Manchester, national political reporter with The Hill magazine, was this reaction something of a shock? It is certainly emblematic of a major division. We saw not only in the House of Representatives when they were looking to pass this bill, we saw a number of what we would call fiscal conservative hawks who were against the bill originally because they thought, like you said it, like Elon Musk says, I should say, added too much to the deficit. And now in the Senate,
You have a number of Republicans who feel the same way. Senators like Ron Johnson from Wisconsin, Rick Scott from Florida, they are very much pushing back against this. The problem, though, is that you have another group of Republicans and you saw a group of Republicans like this in the House and you see a group of Republicans like this in the Senate who think
the bill cut too much from government programs like Medicaid, for example. Susan Collins, a senator from Maine, Tom Tillis, a senator from North Carolina. Those are the big players really pushing, you know, for not as deep of cuts. And we know that Democrats are already targeting senators like Tillis and Collins ahead of the 2026 midterms. But just to add in sort of a wild card into all of this,
You also have Missouri Senator Josh Hawley, who is what you would consider normally a fiscal conservative, conservative on most issues. But he's even saying he won't support this bill because the cuts to Medicaid are too much. So I think what you heard Elon Musk saying is a reflection of the division we've seen within the Republican Party. And it's interesting to see how Donald Trump's responded at the moment, saying he plans to negotiate aspects of the bill like some bits of it, doesn't like others, which is
A bit of a change of tune, isn't it? It is a change of tune, but it's something he has to do to sort of get it through Capitol Hill. Remember, we saw the first version of the bill pass through the House of Representatives. Now it has to pass through the Senate. And then an identical piece of legislation needs to pass through the House again before it ends up at Donald Trump's desk. So right now...
He and Republican leadership Speaker Mike Johnson and majority leader in the Senate, John Thune, have to walk a very, very fine line between these different factions within their party. This is really interesting that what we'd seen as a pretty united front of the of the GOP, the Republican Party behind Donald Trump now seems to be splitting on some pretty major financial issues.
Absolutely. And I think, you know, part of the reason why we've seen such a united front the first 100, 150 days of President Trump's presidency so far was because, you know, he was able to get a lot of his agenda through by executive order. He could just do it with the stroke of a pen, his signature. Now comes the hard part with getting that legislation through Capitol Hill. And you are seeing that, you know, even though
Trump and Republican leaders have been very good about whipping their members into place when it comes to supporting President Trump and getting behind him politically. When it comes to this legislation, it's difficult. And I think, you know, a lot of this also plays into next year's midterms. Like I said, you already see Democrats targeting a lot of these vulnerable senators, vulnerable House members on this issue of potential Medicaid cuts.
Now, there's part of Trump world in his supporters who are quite keen on taxing the richest, taxing the billionaires. I suppose people like Elon Musk. Is that part of what's going on? A fear that that might be the way this is going, that although he has the support of billionaires, they won't like it if it does move towards taxing them.
I think that's part of it. And we've seen from President Trump's language in the past that he would be open to something like that. But the Republican language you're seeing on the bill and the talking points you saw coming out of the House of Representatives when it was passed last week was, you know, this talking point that this legislation represents a tax cut for Americans across the board. And what they mean by that is the extension of the
Trump's 2017 tax cuts. So that's how they're using this to promote this bill. And that language, you would think, would be palatable to most voters. However, if there ends up being taxes on certain income brackets or higher taxes on certain income brackets, there's going to be some backlash there. Julia Manchester there.
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You're with World Business Report from the BBC World Service. Now, a case involving a Peruvian farmer and a giant German energy company has come to an end after over a decade in a courtroom in the German town of Ham. And on the surface, the farmer seems to have lost. The judge found against Sao Luciano Ulloa's claim that the RWE company should help pay for his flood defences at his home in Peru because the global carbon emissions it was contributing to had made flooding there more likely.
But the court's judgment has, in fact, established an important precedent. As I heard from Noah Walker-Crawford of the London School of Economics, an advisor to German Watch, which has been helping Mr. Lujia. The judgment today is a victory. It's a real legal milestone.
What the court did today is establish a precedent. They established the legal principle that companies can be held liable for climate damages. The court concluded that in this specific case, the risk to the person bringing the claim wasn't quite high enough, the risk of flooding caused by glacier retreat. But they said that in principle, these kinds of claims are possible.
which means a lot of other people who face even higher climate risks, who face even more damaging impacts of climate change around the world, now have a tool in their hands that they can use to make claims against polluting companies. Yeah, so just to clarify, they said that the risk to the plaintiff's house was about 1% and it wasn't enough to take the case further. So he's not going to get whatever it was, $17,000 or so that he claimed.
The case establishes the principle of corporate climate liability, but in this case, there's not going to be a payout. But of course, the payout that the plaintiff was demanding, the 17,000 euros, was just a very small symbolic amount, which is just small change to a big company like this. And so what this case was really about from the very beginning was establishing the precedent. And that's exactly what's been achieved. And so what we can expect is that
there are going to be many other cases building on this. And of course, the potential payouts aren't going to be around 17,000 euros, but we could imagine in the billions or even the trillions because there are potentially infinite amount of climate damages around the world.
Well, RWE in this case obviously wasn't held responsible in this particular case. They say they operate in accordance with applicable laws and climate policy and that any changes in that should be resolved at a political, not a legal level.
So the court addressed this question very clearly because they said that even if climate change is a political issue that needs political solutions, that doesn't exclude companies like RWE from liability. The court also said that even if
RWE was operating its power plants in line with regulations, if they had all the permissions, that also does not exclude them from liability. So even if they're following all the rules, they still have a responsibility to address climate change. And what the court said very clearly is that
we've known about climate change for a long time. They said there is a responsibility since the 1960s, even since 1958, when we have had the first scientific insights on global warming. And so they said that since then, uh, reasonably informed, uh, company like RWE should have known that they were contributing to climate harms in the long run. So what happens next? I mean, the farmer, Mr. Luya, he can't take his case any further, I guess. Uh,
Are other companies going to be prosecuted? How is it going to work? So there are many more people around the world facing climate harms, facing risks even higher than Mr. Luciano Uria, the plaintiff in this case. He essentially lost this case because he lives 20 meters too far away from the river and up the hill where a flood would come down.
And because of this, the court found that the risk wasn't high enough to him. But even in the city of Huaraz, where he lives, there are many thousands of people who live right by the river who are affected by a much higher risk of flooding. So even there, according to the court-appointed experts, people are affected by illegally relevant activities.
So the people, Sao Lucia and Yuya's neighbors have already expressed interest, have already said that they would like to move this claim forward in another way. Of course, that has to be examined in a lot of detail. Now, this is something that needs to be looked at.
But they, like many others in the world, want to use this precedent, want to use this legal principle that's been established to hold these major polluters liable. Noah Walker Crawford there. Well, let's go back to Susan Schmidt, Exchange Capital Resources in Chicago. Susan, thanks for being with us again. First of all, I mean, are there going to be some of these energy companies looking rather worriedly at that judgment from Germany?
There definitely will be. And energy companies are already hearing about these issues, potential risk, what they might be liable for from the investor base. Shareholders are looking at this and getting a better and broader understanding of the environmental damage that companies might do with their activities. And they're taking that into account when evaluating the risks of investment.
That lowers the share price, and therefore companies are seeing their share price fall as a result of these concerns. It's becoming a much bigger topic. Interesting, isn't it? That's the effect of what seemed a fairly obscure court judgment, but interesting that it's having that effect. Let's talk, though, Susan, about something quite important, the Fed Minutes. The Minutes of the meeting of the Federal Reserve, the U.S. Federal Reserve, gives an insight into their thinking about interest rates and inflation and inflation.
really suggests that some of the people on the Fed board have great worries about the uncertainty as much as anything under Donald Trump.
That's right. And that uncertainty is caused by tariffs. And so, so much so that they're mentioning tariffs in the minutes of the Fed meeting. And that is quite extraordinary that the Fed would choose and pick out exactly one act coming from the Trump administration. But tariffs do cause great risk of future inflation. And the Fed has to balance that with
a slowdown or potential slowdown in the economy, they have two jobs, keeping inflation under control, but also supporting a healthy labor market and keeping employment at healthy levels. It makes it for a very difficult position. And the minutes show that the Fed feels the risks are on both sides.
And they're not willing to take any action yet because they don't know what those tariffs will end up as and they don't know, therefore, what they will do. Yeah, it's a really interesting moment, isn't it, where the central bank is just really not quite sure what the best thing is in order to make sure that it actually gets it right in terms of interest rates and inflation. Really interesting to get that insight. Thanks so much for being with us, Susan. Susan Schmidt there, Portfolio Manager at Exchange Capital Resources in Chicago.
Now, the meat of brown bears, a protected species in the European Union, could soon be available to eat in Slovakia after the populist government there approved plans for its sale. Now, last month, the Cabinet authorised a plan to shoot about a quarter of the country's 1,300 brown bears in response to some recent fatal encounters. The state-authorised slaughter has been criticised by conservationists and opposition politicians, including in the European Parliament.
Now, the brown bear is listed as near-threatened species in the EU by the World Conservation Union. But Slovakia's government's forging ahead with the plan. And this week announced that meat from culled bears will be sold to the public to prevent waste. Next week, organisations under the Environment Ministry can offer the meat for sale, provided all legal and hygiene conditions are met.
But is there even a market for bear meat? I've been speaking to Linda Metezova, a food tour guide and founder of Bratislava Food Tours Company. I ate the meat once, but it's not something that would be very common here, maybe among hunter community, but not really as a, not even as a considered as a delicacy or anything. You say you've eaten it. What does it taste like? Yeah, it's kind of the meat I've eaten. It was in a goulash with stewed meat, so it was kind of sweet.
I've heard the taste is based on what the bear actually eats. So it was rather sweet or sweeter than the traditional beef goulash. So the meat tastes like whatever the bear has been eating. So he's been eating something sweet. Yes.
then the meat is sweet. Yeah, yeah, yeah. Like they say, like after the summer when the beer has been eating fruits and berries, then it's more sweet. So what I remember from the goulash, the only thing it was maybe eight years ago was the sweetness. The goulash was much more sweet.
sweeter than usual. But it may be also on the process of preparation, how the cooks on that specific event prepared it. Now, you take tourists around in Slovakia. Do tourists like to eat bear meat or not? No, no, no, really, we've never had it. The restaurants aren't even allowed to offer it. We had a thing last year when restaurants in the mountains offered
But now the government has said it's approved, you can have it.
In a restaurant. Yeah. So do you expect in the future maybe the tourists will be offered bear meat? Yeah, yeah, bear meat. Maybe some restaurants will try to use it as their marketing advantage.
But it was never considered as a traditional specialty in Slovakia. Something we would be driving for, like the grandmas dish or something you would be remembering from your childhood. I think it's more of a marketing thing. Yeah, I don't think it's really that we will have some huge brown bear market or anything. So...
There's no tradition, really, in Slovakia of eating pear, then? No, not really. No, no, not really. It's like among hunter community or in something like this, but not nothing that we would ever... I've never even mentioned brown bear meat in our food tours. Yeah, it's just not really a thing. So we have different meals there. And based traditional Slovak cuisine is based on...
flour, potatoes, and then like those non-expensive meals that were easy to make in the past and meat would be reserved for special occasions such as holidays, Christmas, and so on. So it's not really a thing. Okay, so Linda, supposing I was there with you in Bratislava and I wanted to have some proper Slovakian meat, what would I, what should I have?
You should definitely like our national meal is considered to be brinzove halushki. So it's dumplings with sheep cheese, with traditional sheep cheese on the outside. And then we also have sheep cheese spiorgi. That's something that can be also found in Polish or Russian or Ukrainian cuisine. And then definitely we have lots of soups. And among our most popular meals is the sauerkraut soup.
that we usually eat for Christmas and New Year's Eve and so on. So this is what you should definitely have. Much better than a bear then. Definitely. And from those maybe wild meats, what we have for a special occasion is roasted duck or roasted goose with potato pancakes called laksa and stewed cabbage. But there is no brown beer is nowhere around.
And I rather think Linda rather approved the fact that it wasn't around on the cuisine. She didn't seem very keen on eating bear meat, but it's going to be available, apparently. So I suppose if you want to taste it, you should go to Slovakia. But my thanks to Linda Metisova of the Tour Garden founder of the Bratislava Food Tours Company. That's it from World Business Report. Bye-bye.
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