Nvidia's AI Future; Trump Aims to Block Key Report
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with NVIDIA. CEO Jensen Wong has announced a range of new chips, software, and services as the company looks to maintain its lead in artificial intelligence. Jensen Wong spoke to a packed arena at the opening of the Consumer Electronics Show in Las Vegas. And so when you see application after applications that are AI-driven, AI-native, AI-driven,

At the core of it, this fundamental concept is there. Machine learning has changed how every application is going to be built, how computing will be done, and the possibilities beyond. And you can hear more from NVIDIA CEO Jensen Wang later this morning. We're going to speak live with the CEO in Las Vegas, and you can catch that conversation at 1130 this morning, Wall Street time on Bloomberg Radio and Television.

Well, Nathan Wong's Nvidia begins the day at an all-time high. The stock surged almost 3.5% yesterday. Lori Calvacina, the head of U.S. equity strategy at RBC Capital Markets, says it is a key for the markets for other stocks to participate in the rally.

I think a lot of people want this market to broaden out. You can count myself in that camp. That being said, I think we have to understand why we have had so many head fakes so far. And it is simply because the value part of the market, the rest of the S&P, whatever you want to call it, has just not put up superior earnings growth.

RBC's Lori Calvacina notes a gauge of the magnificent seven mega caps outperformed the broader markets, climbing 2%. Well, another major market story we're following this morning, Karen, involves geopolitics. The U.S. is targeting the world's biggest gaming publisher and top electric vehicle battery maker in a surprise move weeks before Donald Trump takes office. The Pentagon has blacklisted Tencent Holdings.

and Contemporary Amprex Technology, or CATL, for alleged links to the Chinese military. We get more from Bloomberg's Rebecca Chung-Wilkins in Hong Kong. This Pentagon list of companies with these alleged links to the Chinese military doesn't...

actually necessitate any kind of actual sanctions or immediate restrictions on these companies but it is essentially a form of sort of discouragement to US entities and to US companies from dealing business or trading these names so you know we'll really wait to see whether the long-term consequences follow through important to note that Tencent among those other names have pushed back quite

quite firmly on this allegation. They say that their inclusion on this list is a mistake. Bloomberg's Rebecca Chung-Wilkin says China's foreign ministry is vowing to defend its company's rights.

Meanwhile, Nathan, Treasury Secretary Janet Yellen has raised serious concern about malicious cyber activity with China's Vice Premier, Holly Fung. The Treasury Department says the two leaders met virtually yesterday, and Yellen warned of consequences for Chinese companies that support Russia's war in Ukraine, as well as Chinese industrial overcapacity that she says is harming U.S. business. The exchange comes a week after the U.S. said Chinese state-sponsored hackers had breached about 100 Treasury Department computers.

is likely to be Yellen's final direct contact with the Chinese government.

And Karen, we continue to follow the political turmoil in Canada. Hours after Justin Trudeau announced his plans to resign as Prime Minister, Mark Carney, former Governor of the Bank of England and Bank of Canada, said he's considering entering the race to be Canada's new leader. Carney is currently chair of Bloomberg's Board of Directors. He says he is encouraged by support from Liberal Party lawmakers and backers. Yesterday, Trudeau cited his own inability to unite the Liberal Party. I have always been driven by my...

Love for Canada by my desire to serve Canadians and by what is in the best interest of Canadians. And Canadians deserve a real choice in the next election. And it has become obvious to me with the internal battles that I cannot be the one to carry the Liberal standard into the next election. Justin Trudeau will remain Canada's Prime Minister until a new leader is selected. That will likely be in March.

Well, Nathan, with less than two weeks until Donald Trump returns to the White House, the president-elect is making a move to keep the special counsel's report against him from becoming public. Trump's lawyers are asking a federal judge in Florida to block Attorney General Merrick Garland from releasing Jack Smith's final report in the classified documents case. They say it accuses the president-elect of engaging in an unprecedented criminal effort

And there's reason to believe Garland plans to release it within the next few days. The filing confirms Smith is close to finalizing and may have already finished his report. Smith dropped his case against Trump after the election, citing longstanding Justice Department policy against prosecuting sitting presidents. McCarran, a big supporter of Donald Trump has been added to the board at Meta Platforms. It's Dana White, the CEO of Ultimate Fighting Championships.

White is a friend of Metta CEO Mark Zuckerberg. He has expanded UFC into one of the world's most popular sports and entertainment businesses. Zuckerberg is an avid mixed martial arts fan and recreational fighter. Well, Nathan, a U.S. stockbroker's union and their employer group will meet today with just over a week to hammer out a deal on a new labor contract. And let's find out more with Bloomberg's John.

John Tucker and John, here we go again. Potentially, Karen, the International Longshoremen's Association and the U.S. Maritime Alliance are meeting in New Jersey. They're going to try to negotiate a new labor contract with a deadline of January 15th to avoid a strike

that could halt half the country's container volumes. The main point of contention, the use of semi-automated cranes at port terminals, with the USMX seeking to improve productivity. Now, you'll recall back in early October, the ILA reached a tentative deal on a 62% wage increase over six years. That suspended a three-day strike, but left the technology issue unresolved.

Retailers like Home Depot, Dollar General, and Gap say with just 10 days until the deadline for an agreement, they're now implementing contingency plans and working to try to keep inventory moving and limit the impact of any strike on consumers. In New York, I'm John Tucker, Bloomberg Radio. It's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. In New Orleans...

President Joe Biden attended a prayer service to offer condolences and pledge federal support to the families of the victims of the New Year's Day attack. Biden was accompanied by the First Lady and other officials. My wife Jill and I are here to stand with you, to grieve with you, to pray with you, to let you know you are not alone.

the rest of the nation is looking at you as well. Biden promised to make every resource available to complete the investigation and provide additional security for upcoming events in the city. The attack along Bourbon Street, which killed 14 people and injured over 30, is believed to have been carried out by a lone individual inspired by ISIS who was killed in a shootout with police.

A strong earthquake has shaken a mountainous region in western China near Nepal, killing at least 53 people. More than 60 others were hurt. China says the earthquake registered a magnitude 6.8.

The epicenter was about 50 miles northeast of Mount Everest, which straddles the border. Today is catch-up day for U.S. Airlines as this week's winter weather has led to thousands of flight cancellations and delays. Kathleen Bangs is with flight tracking company FlightAware. What we saw were over 4,000 flights.

canceled Sunday and Monday, and delayed flights almost up to 20,000. That sounds like a lot. We've had winter storms, however, where they were far worse, but this is definitely the most impactful that we've seen so far this winter season. Flying to Air's Kathleen Bang says today winds are going to be gusting potentially up to 45 or 50 miles an hour, slowing down ground operations. Meanwhile, bitter cold will hit the southern U.S. today.

Finally, Donald Trump has nominated a state court judge from Long Island to be U.S. attorney for the Eastern District of New York. Trump says Joseph Nocella Jr. served as a district judge in Nassau County. If confirmed, he would replace Breon Peace, a Brooklyn native who was appointed by U.S. Attorney and then President Joe Biden in 2021.

Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr. This is Bloomberg, Karen. All right, Michael Barr, thank you. The new year means new health goals, not just for your body, but your finances too. But did you know financial health is directly related to identity protection? You need LifeLock because your personal info is in endless places that are outside of your control.

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That's BloombergLive.com slash invest. Time now for the Bloomberg Sports Update brought to you by Tri-State Audi. Here's John Stashower. John, good morning. Good morning, Karen. Three NFL teams, the Jets, Bears, and Saints fired their coach during the season. Two others, the Patriots and Jaguars, have let their coach go since the season ended. But the Giants are sticking with Brian Dayball and general manager Joe Shane despite a

three and 14 nightmare season. Most losses in the 100 year history of the team. Owner John Mara cited that it was only two years ago that Dayball was coach of the year. Said he liked Shane's most recent draft class. He admitted his decision would not be popular in what he called Giants land. There had been two straight home games where a plane was rented carrying a sign imploring Mara to clean house.

I didn't need planes flying over me to tell me how upset the fans are. I hear from them every day. So that really did not have much of an effect. I get how upset they are. I try to respond to them.

Nobody was more upset than I am about how we performed in recent years. And, you know, I have to stand up here and take the heat for that. Mara admitted the Giants need to find a quarterback. Said it's up to Shane and Dave Earl to do that. Another team that may fire its coach is Dallas. Mike McCarthy says he wants to stay. His contract expires next week, so he could become a quarterback.

free agent coach, Chicago, reportedly wants to interview McCarthy. The Jets talking to several candidates, including Rex Ryan. He was the Jets head coach the last time they went to the playoffs back in 2010. At the Garden, bad loss for the Knicks, though they were without Carl Anthony Towns due to a knee injury. Orlando was without its top four scorers that already lost to the Knicks

Three times this season, the Magic won 103-94. Knicks made only four of 22 three-pointers. Nets at Barclays lost to Indiana 113-99. Devils a 3-2 win at Seattle. Capitals lost in a shootout at Buffalo. Rutgers beaten by Wisconsin 75-63. The Mets announced they will retire David Wright's number five on July 19th. John Staschauer, Bloomberg Sports, Karen Nathan.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager. The company that has been at the forefront of artificial intelligence architecture for a couple years now is looking to cement that position for years to come. NVIDIA CEO Jensen Huang unveiled a range of new chips, software, and services today.

in front of a packed audience last night at the CES trade show in Las Vegas, including an update to the processor for Nvidia's traditional customer base of gamers, the GeForce. GeForce enabled AI to reach the masses, and now...

AI is coming home to GeForce. And for more on what we heard last night from NVIDIA and its CEO, Jensen Wong, we are pleased to be joined this morning by Bloomberg's Tom McKenzie. Tom, good morning. GeForce was really just the tip of the iceberg, wasn't it? Jensen Wong gave a lot for investors to chew on.

Yeah, look, he stood there on the stage in his sparkly leather jacket and not there to Vegas. It was a packed auditorium, as you can imagine, the keynote speaker. And as you say, look, he hit on a number of different topics and a number of different unveils as well for the business. So, yes, G-Force.

As you mentioned as well, a bit of a nod back to the past, the foundations of that business, of course, NVIDIA starting 30 years ago or so as a gaming company building chips for gaming. And then, of course, those were repurposed for AI, as we know. The GeForce is interestingly built on AI infrastructure now, the Blackwell infrastructure. So that, the proposition is, will supercharge gaming. So if you're a hardcore gamer, that's good news. They get about $10 billion, $11 billion in terms of revenues from gaming still. So not insignificant, but pales in comparison in terms of what they're getting

in terms of revenues from the data center of the business with those AI accelerators. That's expected to be about $100 billion this year in terms of revenues. But nonetheless, still a significant component is gaming. There was also the software piece as well. And it's a reminder that NVIDIA doesn't just do the hardware, it doesn't just do the chips, it does the software around that as well, with CUDA, for example, that accompanies those Blackwell chips. But they also announced a foundation model in terms of helping developers to start to embed data

into physical property, so robots and cars. And that was a big push by Jensen Huang. He's obviously looking for other segments to grow the business, and he thinks that physical AI is going to be, quote, a multi-trillion dollar opportunity for his business and others within the space. Yeah, the aspect of that was really interesting, particularly with this partnership that Jensen Huang announced last night with Toyota on self-driving cars, particularly when we're hearing from a number of analysts now saying that

Tesla is a pure AI play. This could put NVIDIA into even further direct competition in the self-driving vehicle space.

Absolutely. And you just see every time Jensen Huang mentions a partner company, you see the move in the stock price. You saw that with MediaTek. You saw that with Toyota, as you said, that rallied on the back of this news. So they're going to be partnering with Toyota. Autonomous vehicles is going to be part of the push. And you can see a future where your interactions with your car are going to be much more seamless. They're going to be, for example, doing things like facial recognition, make sure you're not falling asleep at the wheel, giving you more updated data in terms of driving conditions, the road surface, all that kind of thing.

as part of that autonomous driving package as well. Obviously, you won't be driving. It will be autonomous, but you'll be sitting there making sure that things stay on track. In terms of what else happens with the embed of AI, generative AI, into some of these physical attributes, Bank of America, you nodded to some of the concerns, maybe some of the cautionary notes coming through from Anas. Bank of America saying, look, they've got to make sure that they are cheap enough, these propositions, the components they're building around AI.

embedding AI into robotics and autonomous cars. They're going to be cheap enough, pervasive enough, and efficient enough to really be a new business proposition for Nvidia. So maybe that's still a question mark for them, but clearly this is a CEO and a team that's determined to push beyond data centers to continue that growth. In our last minute, Tom, with this vision laid out last night, how important was it for Jensen Wang to overperform in terms of what the market's looking for, particularly after that last earnings report that seemed to underwhelm investors?

There's always a mismatch. Always. There has been a mismatch, hasn't there? The concern has been there's going to be a mismatch in terms of the expectations from the markets versus what has delivered. And, of course, in historic recent quarters, bar that one, the most recent quarter, NVIDIA managed to outperform those expectations. Now the expectations are just so high. For many analysts, they're saying that is the concern. How does NVIDIA continue to meet those expectations? Microsoft delayed some of those fears, of course, a couple of days ago when it announced it was going to be spending about $80 billion U.S.,

on data centers just this year alone and of course nvidia will be a key part of that build out and that spend and satya nadela speaking in india earlier today talked about the partnership between microsoft and nvidia but also the partnership between microsoft and amd and that's where the competitive question comes into play for nvidia amd still only has a marginal slice and fraction of the market share when it comes to ai accelerators but they are obviously determined to kind of close that gap

and obviously a number of their customers, Nvidia's customers, the hyperscalers, are already spending on R&D to develop their own chips. And that underscores Gens 1's determination to go beyond data centers into sovereign AI and now increasingly into quote-unquote physical AI.

This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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