November 18, 2025 • 21 mins
Nvidia, the world's most valuable company, is set to deliver a quarterly report Wednesday that could assure Wall Street that the AI computing boom continues apace — or fuel fears that the tech industry is in a bubble. Chief Executive Officer Jensen Huang said late last month that he has orders that will deliver $500 billion of revenue over the next few quarters and that spending on new equipment is increasingly paying off for customers. Still, the bubble fears have contributed to a recent stock selloff, with investors fretting that capital spending on artificial intelligence infrastructure will create a glut. For a preview, we speak to Jed Ellerbroek, Portfolio Manager at Argent Capital Management.
Plus - the New Economy Forum in Singapore has begun. Bloomberg had the chance to catch up with top business names. That includes Bob Diamond, Atlas Mechant Capital founding partner and CEO and former Barclays CEO. He spoke to Bloomberg's Shery Ahn and Avril Hong.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. So
the moment of truth is less than twenty four hours away.
That's when in Video will report its results tomorrow after
the closing bell in the States. Now on Tuesday, it shares.
We're down two point eight percent, bouncing right off their
one hundred day moving average. In Vidia's market cap is
now about four point four trillion dollars. That is larger
(00:32):
than the energy, the materials, and the real estate sectors combined.
So calling this report critical may be an understatement. For
a closer look, Now, I'm joined by Jed Ellbrook. He
is portfolio manager at Argent Capital Management. Jed, thank you
so much for making time. Are you optimistic on this
in Video story?
Speaker 3 (00:50):
Still? Yeah?
Speaker 4 (00:52):
I am. I think in Vidia is going to report
outstanding earnings tomorrow evening. I think everybody knows that. Biggest
question is where does revenue guidance for next quarter end up?
I think something over sixty three billion would probably get
a green light from investors. But just stepping back, the
company continues to grow at an incredible rate. The demand
(01:13):
for their products is enormous. Their competitive advantage over their
peers remains wide, and the company is leading. Their products
are the infrastructure that's that's allowing for this AI revolution
to unfold.
Speaker 2 (01:27):
So Microsoft and Nvidia today kind of announced the commitment
to invest a combined fifteen billion dollars in Anthropic, which
is obviously a rival firm to open Ai, And at
the same time we learned that Anthropic is intending to
buy thirty billion dollars in cloud computing power from Microsoft's
Azure service. This seems to feel a little like circular financing,
(01:50):
does it not? And I'm wondering whether that concerns you
a bit.
Speaker 4 (01:54):
Yeah, there is an aspect of circular financing to a
lot of these deals. It doesn't concern me terribly. I
think that all the models are going to be available
on all the clouds. We've pretty much reached that stage
at this point, with open Ai available on AWS and
now Anthropic available soon on Azure. In video, chips are
(02:15):
exceptionally important for all the hyperscalers. They're buying them aggressively.
They'll buy a lot more next year than they did
this year. The circular financing doesn't concern me terribly because
in videos, doing it with their profits. They're using cash flow.
It's a debt free balance sheet, and they're just taking
their profits, their annual cash flow and investing it back
in the ecosystem to try to accelerate AI growth. They're
(02:39):
making wise investments. Their investment in core Weed, for example,
from two or three years ago, has turned out very well.
I think their investment in a lot of these leading
model players like open ai and Anthropic and many of
the other AI ecosystem companies will be more successful than not.
So it's an aggressive strategy, certainly you can criticize, but
(03:00):
I think it's it's prudent business and seating the ecosystem,
and I think it's worked well for Nvidia thus far.
And the company has a debt free balance.
Speaker 2 (03:07):
Sheet, so some of the hyperscalers have been using debt
as a way of financing this buildout. I think in total,
they've sold so far this year high grade notes totaling
around one hundred and twenty one billion in US dollar terms.
That seems like a phenomenal amount, many times what we
have seen over the last five years. I think that
five year average over each of the last five years
(03:31):
is around twenty eight billion dollars and I understand the
appetite for the buildout, yes, but financing through debt is
that a concerned at all?
Speaker 4 (03:39):
Yeah? I think it is. I think that you just
have to acknowledge the AI build out up through you know,
say mid year this year, mid year twenty twenty five
was financed almost entirely with the operating cash flows of
the big tech companies in America. Now we have pivoted,
you know, we were spending on that. Now in some
(04:01):
cases and you know, now a decent chunk, maybe a
quarter of the next year's buildout will be financed with debt.
These big tech companies, though, remain their balance sheets remain
in a net cash position in all but one or
two circumstances. Oracle is obviously an outlier on the aggressive side.
They have you know, debt to ebitdad north of three times,
(04:23):
which is you know, reasonably high Coreweave is pretty aggressively financed.
They have a lot of debt, but Amazon, Google, Microsoft
remain in a net cash position. They are borrowing some,
but they remain in a net cash position overall. Meta,
I think is on the aggressive side too. They're spending
super aggressively to build data centers for their own use,
(04:45):
and they are doing some off balance sheet financing to
fund that. And they're smaller than Google, Microsoft, and Amazon
in terms of annual cash flows, so they need to
they need to rely on borrowing some. But I think
the core three Amazon, Microsoft and Google remain in a
net cash position. They borrow occasionally just to manage their
(05:06):
balance sheet, but they remain an exceptionally strong competitive positions,
exceptionally strong cash flow, and their cash flows are growing
north of fifteen percent per year.
Speaker 2 (05:15):
Are you concerned at all about the level of concentration
when we look at some of these big tech names
and the degree to which they are influencing so much
of the markets behavior.
Speaker 3 (05:26):
Yeah.
Speaker 4 (05:27):
Absolutely. We are in a very different investing landscape in
large cap US equities today compared to five, ten, twenty,
or thirty years ago. The big tech companies are, you know,
more than a third of the S and P five
hundred in Nvidia is over eight percent I believe of
(05:47):
the S and P five hundred today, Microsoft and Apple
aren't far behind. So yeah, the rising market concentration amongst
US equities is different, and it does bring about some risks,
and it's something investors need to weigh carefully. You know,
investors want returns, of course, but they also want balance
(06:09):
and diversification, and the S and P five hundred large
CAPUS equities are becoming less diversified, less balanced by the month.
Speaker 2 (06:17):
No doubt, these megacap companies have been really, really innovative
in terms of creating new technologies. Obviously AI is a
big part of the story. But I'm wondering, if you
look off shore to a place like China, are you
concerned about maybe an unknown unknown there that could deliver
a level of competition that the market's not prepared for.
Speaker 4 (06:40):
Yeah, I think that. You know, Chinese LM developers are
just a couple months behind the leading US labs, and
that gap has been shrinking over the last two years.
You know, we've seen some big events like deep Seek
and the new Kimmi model that are big steps up
for the Chinese models. So yeah, there is intense competent.
(07:00):
China has plenty of power, but not great supply of chips.
United States not enough power, plenty of chips. So they
each have their strengths, they each have their weaknesses. They're
both working to shore up their weaknesses as quickly as
they can, and it's intensely competitive, and that's going to
remain the case. And then, of course you've got Taiwan,
which exports most of the most advanced accelerator chips that
(07:23):
are relied on for AI use cases. So that is
another flashpoint.
Speaker 2 (07:27):
I read an article a couple of weeks back about
a new analog chip produced in China that was reportedly
a thousand times more efficient than some of the most
advanced chips that Nvidia has designed. I mean, when you
hear a story like that, you have to be a
little concerned that maybe there is something happening that we're
(07:47):
not completely aware of that could cause major disruptions. Does
that eat up any of your thinking at all?
Speaker 4 (07:55):
Yeah, sure it has to. You have to pay attention
to some of the outlier rests. I would want it
before I put a lot of credence in that particular story,
I would want to see those chips performing out in
the wild, out in data centers, you know, outside of
outside of China, just just to verify and confirm that
and see it for myself. So a little skeptical and
(08:19):
waiting for some demonstrations of use cases.
Speaker 2 (08:23):
Is there a way that you're playing this trade that
may be a little counterintuitive, or are you just kind
of following I don't want to say following the herd necessarily,
but adopting pretty much a mainstream approach in applying capital
to this segment of the market.
Speaker 4 (08:38):
I think what we're trying to do is a little
bit different. We are focused on investing in companies that
we believe will be you know, outperformers, whether AI achieves
the most wild you know, aggressive predictions or not. So
for example, Amazon, we're we're we're confident. We believe that
if AI becomes all that all that the technologists hope
(09:00):
and expect over the next five years, that Amazon will
be a successful, outperforming business. But if AI falls short,
if AI development is a couple of years behind the
timelines people project and expect, Amazon's going to do well
in that scenario too, because their existing businesses are performing
really well. They've got a lot of non AI revenue.
So we're trying to cover our bases as much as possible,
(09:20):
and we're trying to acknowledge that there are a lot
of future growth paths for AI.
Speaker 2 (09:27):
Jed will leave it there, thank you so very much.
Jed Elbroki's portfolio manager at Argent Capital Management. Joining us
here on the Daybreak Asia podcast. Welcome back to the
Daybreak Asia Podcast. I'm deg Chrisner. There was a defensive
tone in US DOC trading in the last session in
(09:49):
front of those earnings from Nvidia. We had shares dropping
about two point eight percent, bouncing right off their one
hundred day moving average. In Vidia's market cap is now
four point four trill dollars. That is larger than the energy,
the materials, and the real estate sectors combined. So calling
the earnings report critical maybe an understatement. Now, the recent
(10:10):
selling that we have seen in shares, not only in Nvidia,
but other tech giants, has reignited this debate on AI
and whether the industry is generating enough revenue or profit
to justify this massive buildout in infrastructure. Gorilla Technology Group
is a full stack builder and operator of sovereign AI infrastructure.
(10:31):
Here is Gorilla CEO J Chendon On one of the
major challenges facing the industry during this current buildout.
Speaker 5 (10:39):
The biggest challenge we have today is that there are
no standards or protocols that can be adopted today. The
world is building to it. The problem being that different
nations are building at different paces today. The issue we
have today is that we don't have one uniformed platform
that we can subscribe too. And what Gorilla is doing
(11:02):
is that we're working with governments across the organizations today.
We're making sure that we're able to support and build
these infrastructure platforms so that we can have a unified
protocol across the region today.
Speaker 2 (11:16):
That's Jay Chanden. He is the CEO of Gorilla Technology Group. Now,
the outlook from Nvidia in particular could have significant impact
on markets. The bar has been getting higher for this
chip maker to convince investors that the billions spent on
AI will pay off. So we got some perspective from
the market side from Bob Diamond. He is the former
(11:38):
CEO of Barclays, and he spoke with Bloomberg TV host
Sherry On and Avril Hon at the Bloomberg New Economy
Forum in Singapore.
Speaker 3 (11:46):
We're repricing risk in a way.
Speaker 6 (11:49):
It's equities, it's AI, it's fitcoin, it's really across the piece.
So I don't think this is specifically about crypto or
digital assets. I think for us, what's really interesting is
we're a big investor in Hype, the native token of
hyper Liquid. Hyper Liquid, as you know, is developed right
(12:09):
here in Singapore by Jeffynn and his team, and it's
a decentralized, non custodian exchange and its native token, Hype,
over the last seven days is up a bit, where
Bitcoin and most of the other tokens are down.
Speaker 3 (12:26):
But I would say that's rare. It's unusual.
Speaker 6 (12:28):
Really across the piece, we've seen risk assets be repriced.
In my sense, this is a healthy correction, not something
that's turning into a bear market. So I think for
many reasons. I was just at the GIC Insights over
the last day. Anybody associated with GIC, you know, appreciates
who they've bring together once a year to talk about
(12:51):
these trends, and you know, one of the things we
were talking about there was the big numbers in AI.
I mean the billions here, trillions there, billions here, data centers,
and I think the most people have a hard time
really processing it, and that doesn't really work against the
fact that we can be really really positive on AI
(13:13):
over the next five to ten years and the impact
it's going to have.
Speaker 5 (13:16):
But the big.
Speaker 1 (13:16):
Numbers are scary. A period of time when they continue
to invention right place, and these concerns about a circular
deal about whether this is just a bubble, so you
don't buy into that, will there be the amount down
the line.
Speaker 3 (13:31):
What I feel comfortable in is taking a two three,
five year view of the impact of AI.
Speaker 6 (13:38):
I think it will be a real positive in dampening inflation.
I think it's going to be incredibly important in terms
of productivity in the global economy. And I think some
people are confused right now over the valuations. And many
people say this they look back, you know to the
Internet bubble in two thousand, right had a real bubble
(13:58):
because there was some some you know, some fringe equities
that probably weren't legitimate as much as kind of the core,
but nothing stopped the development of the Internet over the
next ten, fifteen, twenty years. And I think the consensus
over the last day has been where really we the
group are very very positive on what AI can bring
(14:19):
in terms of productivity, dampening inflation, global growth.
Speaker 3 (14:23):
Really comfortable.
Speaker 6 (14:24):
So I think this is a correction in risk assets
across the piece. And I think, you know, AI partly
because there's so many big numbers out there that people
really don't understand yet, in particularly around data centers.
Speaker 7 (14:39):
Yeah, I think it's hard to decipher. And to your
point about the Internet economy, it was also about sifting
out the froth at that stage early on in the game.
When it comes to digital assets, you look at tokenization,
as you highlighted earlier, as a key driver. How are
you viewing, say, stable coins and how that might be
(15:02):
shaping the financial system.
Speaker 6 (15:03):
Well, that's the other big investment we made at Atlas
Merchant Capital. We're an early investor in Circle in twenty
twenty one. We've worked with Jeremy Laire and his team
very closely over the years. They have a tremendous relationship
here in Singapore with the Monetary Authority of Singapore and
the developments that they've had, and I think we've learned
(15:25):
so much about the impact of blockchain in terms of
we believe will be a real source of the underlying
foundation of financial services over the.
Speaker 3 (15:35):
Next two three five years.
Speaker 6 (15:38):
Stable coins are really here to stay, and I think
the acceptance of Circle as the most regulated, the most conservative,
really has reserves behind it that are managed by Blackrock.
Speaker 3 (15:53):
As you know.
Speaker 6 (15:54):
So I think the best of the best in stable coins,
a Circle highly regulated, want to be highly regulated, They
want to be an occ bank in the US. So
I think the developments there are very strong, and I
think what we've seen this year is a sea change
in the US in terms of tailwinds with this administration
(16:15):
with Scott Bessant in the Treasury, with Paul Atkins, and
the SEC with Jake Clayton. This team is so highly
respected and so supportive of regulation that covers both digital
assets and financial services, not two separate regulatories.
Speaker 7 (16:35):
In your mind, in terms of deliverables left to go
on these regulatory guard rails for the environment.
Speaker 6 (16:43):
Well, I think the most important thing from my point
of view is we look as we look at stable coins,
is the increase.
Speaker 3 (16:51):
In institutional use, you know.
Speaker 6 (16:53):
A move from crypto traders using staple coins and using
digital currencies two treasures to Visa and MasterCard to the
big banks like JPM Morgan and Vaa developing it. We're
certainly seeing in the Middle East with some of the
best banks in Abu Dhabi in Dubai already developing use
(17:14):
cases for blockchain and in stableok win, particularly dollar stableok wins,
particularly USDC.
Speaker 3 (17:20):
So.
Speaker 1 (17:20):
I know that you talked about perhaps the US regional
banks and the consolidation.
Speaker 4 (17:25):
In that sector.
Speaker 1 (17:26):
Right What scares me right now is all the fraud
not only in the crypto space. But of course we
talked about tech and the build up and around artificial intelligence.
Where do you go to hide when you could potentially
see Jamie Diamond said cockroaches one means more. And you've
seen even around banks in the US where you had
isolated incidents with Tricoler of first brand. So is there
(17:48):
a hedging mechanism at the moment.
Speaker 6 (17:51):
Well, I think there's two different questions there. In terms
of the comment on cockroaches. I mean, I think it
was a statement of credit. Credit and if we're being
very very honest with ourselves, you know, we had twelve
years of zero infrast rates after the Great Financial Crisis
in two thousand and eight, then we had a steep
increase from zero to five and a half percent. I
(18:13):
would have thought back then we would have seen cracks
and credit because it was such a long period of
credit was really very very available. And I think today
it would be unsurprising to me, given how tight credit
spreads are, that we see some correction in credit spreads.
Speaker 1 (18:31):
To a lot of people say that credit bit spreads
are type right now because they're not really thinking about
the fiscal risk that's already baked in. Because you can't
even really count on sovereigns at the moment with their
building debt level that they're actually safe.
Speaker 6 (18:45):
Well you have I think, Sherry, what you just brought
up is the darkest cloud overhanging the markets.
Speaker 3 (18:51):
Which are the debt levels.
Speaker 6 (18:52):
You know, we're talking about the credit markets, but what
you're referring to now is sovereign credit and in particular
from the US US and the much higher debt levels,
and that is the dark cloud hanging over the market.
Speaker 7 (19:05):
For what about Pe? How are you approaching fundraising going
into making You.
Speaker 6 (19:10):
Know, with all this volatility, it makes what we do
in private equity even more sustainable. And I think when
you look at you know, the correction in equities, for
example in the US, it's primarily around those seven or
eight or nine equities in tech that.
Speaker 3 (19:28):
Have really been leading the rally.
Speaker 6 (19:30):
You move from that to the smaller companies in the index,
and then you.
Speaker 3 (19:35):
Move from that to the private companies.
Speaker 6 (19:37):
We're seeing very very good opportunities in private equity. We
focus on financial services. We do a lot in the US.
One of the things that we see is a terrific
opportunity is consolidation in regional and community banks, their ability
to pull costs out to create cost synergies almost immediately
(19:58):
with consolidation. I mean particularly here, when I mentioned to
people that there's four and a half thousand banks in
the US, they usually look at me, like, what United
States is four and a half thousand banks and they're
really good and it's Scott Besson, the Secretary of the Treasury,
has pointed out many times about half of the lending
to small businesses in the US come from regional and
(20:19):
community banks, not from kind.
Speaker 3 (20:21):
Of the big four.
Speaker 6 (20:22):
So there are a lot of great opportunities out there
in private markets.
Speaker 2 (20:26):
That is Bob Diamond, the former CEO of Barclays, in
conversation with Bloomberg TV host Sherry On and April Hong
at the Bloomberg New Economy Forum in Singapore. Here on
the Daybreak Asia podcast. Thanks for listening to today's episode
of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we
(20:46):
look at the story shaping markets, finance, and geopolitics in
the Asia Pacific. You can find us on Apple Spotify,
the Bloomberg Podcast YouTube channel, or anywhere else you listen.
Join us again tomorrow for insight on the mark market
moves from Hong Kong to Singapore and Australia. I'm Doug
Prisoner and this is Bloomberg
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Welcome to the Daybreak Asia podcast. I'm Doug Krisner. So
the moment of truth is less than twenty four hours away.
That's when in Video will report its results tomorrow after
the closing bell in the States. Now on Tuesday, it shares.
We're down two point eight percent, bouncing right off their
one hundred day moving average. In Vidia's market cap is
now about four point four trillion dollars. That is larger
(00:32):
than the energy, the materials, and the real estate sectors combined.
So calling this report critical may be an understatement. For
a closer look, Now, I'm joined by Jed Ellbrook. He
is portfolio manager at Argent Capital Management. Jed, thank you
so much for making time. Are you optimistic on this
in Video story?
Speaker 3 (00:50):
Still? Yeah?
Speaker 4 (00:52):
I am. I think in Vidia is going to report
outstanding earnings tomorrow evening. I think everybody knows that. Biggest
question is where does revenue guidance for next quarter end up?
I think something over sixty three billion would probably get
a green light from investors. But just stepping back, the
company continues to grow at an incredible rate. The demand
(01:13):
for their products is enormous. Their competitive advantage over their
peers remains wide, and the company is leading. Their products
are the infrastructure that's that's allowing for this AI revolution
to unfold.
Speaker 2 (01:27):
So Microsoft and Nvidia today kind of announced the commitment
to invest a combined fifteen billion dollars in Anthropic, which
is obviously a rival firm to open Ai, And at
the same time we learned that Anthropic is intending to
buy thirty billion dollars in cloud computing power from Microsoft's
Azure service. This seems to feel a little like circular financing,
(01:50):
does it not? And I'm wondering whether that concerns you
a bit.
Speaker 4 (01:54):
Yeah, there is an aspect of circular financing to a
lot of these deals. It doesn't concern me terribly. I
think that all the models are going to be available
on all the clouds. We've pretty much reached that stage
at this point, with open Ai available on AWS and
now Anthropic available soon on Azure. In video, chips are
(02:15):
exceptionally important for all the hyperscalers. They're buying them aggressively.
They'll buy a lot more next year than they did
this year. The circular financing doesn't concern me terribly because
in videos, doing it with their profits. They're using cash flow.
It's a debt free balance sheet, and they're just taking
their profits, their annual cash flow and investing it back
in the ecosystem to try to accelerate AI growth. They're
(02:39):
making wise investments. Their investment in core Weed, for example,
from two or three years ago, has turned out very well.
I think their investment in a lot of these leading
model players like open ai and Anthropic and many of
the other AI ecosystem companies will be more successful than not.
So it's an aggressive strategy, certainly you can criticize, but
(03:00):
I think it's it's prudent business and seating the ecosystem,
and I think it's worked well for Nvidia thus far.
And the company has a debt free balance.
Speaker 2 (03:07):
Sheet, so some of the hyperscalers have been using debt
as a way of financing this buildout. I think in total,
they've sold so far this year high grade notes totaling
around one hundred and twenty one billion in US dollar terms.
That seems like a phenomenal amount, many times what we
have seen over the last five years. I think that
five year average over each of the last five years
(03:31):
is around twenty eight billion dollars and I understand the
appetite for the buildout, yes, but financing through debt is
that a concerned at all?
Speaker 4 (03:39):
Yeah? I think it is. I think that you just
have to acknowledge the AI build out up through you know,
say mid year this year, mid year twenty twenty five
was financed almost entirely with the operating cash flows of
the big tech companies in America. Now we have pivoted,
you know, we were spending on that. Now in some
(04:01):
cases and you know, now a decent chunk, maybe a
quarter of the next year's buildout will be financed with debt.
These big tech companies, though, remain their balance sheets remain
in a net cash position in all but one or
two circumstances. Oracle is obviously an outlier on the aggressive side.
They have you know, debt to ebitdad north of three times,
(04:23):
which is you know, reasonably high Coreweave is pretty aggressively financed.
They have a lot of debt, but Amazon, Google, Microsoft
remain in a net cash position. They are borrowing some,
but they remain in a net cash position overall. Meta,
I think is on the aggressive side too. They're spending
super aggressively to build data centers for their own use,
(04:45):
and they are doing some off balance sheet financing to
fund that. And they're smaller than Google, Microsoft, and Amazon
in terms of annual cash flows, so they need to
they need to rely on borrowing some. But I think
the core three Amazon, Microsoft and Google remain in a
net cash position. They borrow occasionally just to manage their
(05:06):
balance sheet, but they remain an exceptionally strong competitive positions,
exceptionally strong cash flow, and their cash flows are growing
north of fifteen percent per year.
Speaker 2 (05:15):
Are you concerned at all about the level of concentration
when we look at some of these big tech names
and the degree to which they are influencing so much
of the markets behavior.
Speaker 3 (05:26):
Yeah.
Speaker 4 (05:27):
Absolutely. We are in a very different investing landscape in
large cap US equities today compared to five, ten, twenty,
or thirty years ago. The big tech companies are, you know,
more than a third of the S and P five
hundred in Nvidia is over eight percent I believe of
(05:47):
the S and P five hundred today, Microsoft and Apple
aren't far behind. So yeah, the rising market concentration amongst
US equities is different, and it does bring about some risks,
and it's something investors need to weigh carefully. You know,
investors want returns, of course, but they also want balance
(06:09):
and diversification, and the S and P five hundred large
CAPUS equities are becoming less diversified, less balanced by the month.
Speaker 2 (06:17):
No doubt, these megacap companies have been really, really innovative
in terms of creating new technologies. Obviously AI is a
big part of the story. But I'm wondering, if you
look off shore to a place like China, are you
concerned about maybe an unknown unknown there that could deliver
a level of competition that the market's not prepared for.
Speaker 4 (06:40):
Yeah, I think that. You know, Chinese LM developers are
just a couple months behind the leading US labs, and
that gap has been shrinking over the last two years.
You know, we've seen some big events like deep Seek
and the new Kimmi model that are big steps up
for the Chinese models. So yeah, there is intense competent.
(07:00):
China has plenty of power, but not great supply of chips.
United States not enough power, plenty of chips. So they
each have their strengths, they each have their weaknesses. They're
both working to shore up their weaknesses as quickly as
they can, and it's intensely competitive, and that's going to
remain the case. And then, of course you've got Taiwan,
which exports most of the most advanced accelerator chips that
(07:23):
are relied on for AI use cases. So that is
another flashpoint.
Speaker 2 (07:27):
I read an article a couple of weeks back about
a new analog chip produced in China that was reportedly
a thousand times more efficient than some of the most
advanced chips that Nvidia has designed. I mean, when you
hear a story like that, you have to be a
little concerned that maybe there is something happening that we're
(07:47):
not completely aware of that could cause major disruptions. Does
that eat up any of your thinking at all?
Speaker 4 (07:55):
Yeah, sure it has to. You have to pay attention
to some of the outlier rests. I would want it
before I put a lot of credence in that particular story,
I would want to see those chips performing out in
the wild, out in data centers, you know, outside of
outside of China, just just to verify and confirm that
and see it for myself. So a little skeptical and
(08:19):
waiting for some demonstrations of use cases.
Speaker 2 (08:23):
Is there a way that you're playing this trade that
may be a little counterintuitive, or are you just kind
of following I don't want to say following the herd necessarily,
but adopting pretty much a mainstream approach in applying capital
to this segment of the market.
Speaker 4 (08:38):
I think what we're trying to do is a little
bit different. We are focused on investing in companies that
we believe will be you know, outperformers, whether AI achieves
the most wild you know, aggressive predictions or not. So
for example, Amazon, we're we're we're confident. We believe that
if AI becomes all that all that the technologists hope
(09:00):
and expect over the next five years, that Amazon will
be a successful, outperforming business. But if AI falls short,
if AI development is a couple of years behind the
timelines people project and expect, Amazon's going to do well
in that scenario too, because their existing businesses are performing
really well. They've got a lot of non AI revenue.
So we're trying to cover our bases as much as possible,
(09:20):
and we're trying to acknowledge that there are a lot
of future growth paths for AI.
Speaker 2 (09:27):
Jed will leave it there, thank you so very much.
Jed Elbroki's portfolio manager at Argent Capital Management. Joining us
here on the Daybreak Asia podcast. Welcome back to the
Daybreak Asia Podcast. I'm deg Chrisner. There was a defensive
tone in US DOC trading in the last session in
(09:49):
front of those earnings from Nvidia. We had shares dropping
about two point eight percent, bouncing right off their one
hundred day moving average. In Vidia's market cap is now
four point four trill dollars. That is larger than the energy,
the materials, and the real estate sectors combined. So calling
the earnings report critical maybe an understatement. Now, the recent
(10:10):
selling that we have seen in shares, not only in Nvidia,
but other tech giants, has reignited this debate on AI
and whether the industry is generating enough revenue or profit
to justify this massive buildout in infrastructure. Gorilla Technology Group
is a full stack builder and operator of sovereign AI infrastructure.
(10:31):
Here is Gorilla CEO J Chendon On one of the
major challenges facing the industry during this current buildout.
Speaker 5 (10:39):
The biggest challenge we have today is that there are
no standards or protocols that can be adopted today. The
world is building to it. The problem being that different
nations are building at different paces today. The issue we
have today is that we don't have one uniformed platform
that we can subscribe too. And what Gorilla is doing
(11:02):
is that we're working with governments across the organizations today.
We're making sure that we're able to support and build
these infrastructure platforms so that we can have a unified
protocol across the region today.
Speaker 2 (11:16):
That's Jay Chanden. He is the CEO of Gorilla Technology Group. Now,
the outlook from Nvidia in particular could have significant impact
on markets. The bar has been getting higher for this
chip maker to convince investors that the billions spent on
AI will pay off. So we got some perspective from
the market side from Bob Diamond. He is the former
(11:38):
CEO of Barclays, and he spoke with Bloomberg TV host
Sherry On and Avril Hon at the Bloomberg New Economy
Forum in Singapore.
Speaker 3 (11:46):
We're repricing risk in a way.
Speaker 6 (11:49):
It's equities, it's AI, it's fitcoin, it's really across the piece.
So I don't think this is specifically about crypto or
digital assets. I think for us, what's really interesting is
we're a big investor in Hype, the native token of
hyper Liquid. Hyper Liquid, as you know, is developed right
(12:09):
here in Singapore by Jeffynn and his team, and it's
a decentralized, non custodian exchange and its native token, Hype,
over the last seven days is up a bit, where
Bitcoin and most of the other tokens are down.
Speaker 3 (12:26):
But I would say that's rare. It's unusual.
Speaker 6 (12:28):
Really across the piece, we've seen risk assets be repriced.
In my sense, this is a healthy correction, not something
that's turning into a bear market. So I think for
many reasons. I was just at the GIC Insights over
the last day. Anybody associated with GIC, you know, appreciates
who they've bring together once a year to talk about
(12:51):
these trends, and you know, one of the things we
were talking about there was the big numbers in AI.
I mean the billions here, trillions there, billions here, data centers,
and I think the most people have a hard time
really processing it, and that doesn't really work against the
fact that we can be really really positive on AI
(13:13):
over the next five to ten years and the impact
it's going to have.
Speaker 5 (13:16):
But the big.
Speaker 1 (13:16):
Numbers are scary. A period of time when they continue
to invention right place, and these concerns about a circular
deal about whether this is just a bubble, so you
don't buy into that, will there be the amount down
the line.
Speaker 3 (13:31):
What I feel comfortable in is taking a two three,
five year view of the impact of AI.
Speaker 6 (13:38):
I think it will be a real positive in dampening inflation.
I think it's going to be incredibly important in terms
of productivity in the global economy. And I think some
people are confused right now over the valuations. And many
people say this they look back, you know to the
Internet bubble in two thousand, right had a real bubble
(13:58):
because there was some some you know, some fringe equities
that probably weren't legitimate as much as kind of the core,
but nothing stopped the development of the Internet over the
next ten, fifteen, twenty years. And I think the consensus
over the last day has been where really we the
group are very very positive on what AI can bring
(14:19):
in terms of productivity, dampening inflation, global growth.
Speaker 3 (14:23):
Really comfortable.
Speaker 6 (14:24):
So I think this is a correction in risk assets
across the piece. And I think, you know, AI partly
because there's so many big numbers out there that people
really don't understand yet, in particularly around data centers.
Speaker 7 (14:39):
Yeah, I think it's hard to decipher. And to your
point about the Internet economy, it was also about sifting
out the froth at that stage early on in the game.
When it comes to digital assets, you look at tokenization,
as you highlighted earlier, as a key driver. How are
you viewing, say, stable coins and how that might be
(15:02):
shaping the financial system.
Speaker 6 (15:03):
Well, that's the other big investment we made at Atlas
Merchant Capital. We're an early investor in Circle in twenty
twenty one. We've worked with Jeremy Laire and his team
very closely over the years. They have a tremendous relationship
here in Singapore with the Monetary Authority of Singapore and
the developments that they've had, and I think we've learned
(15:25):
so much about the impact of blockchain in terms of
we believe will be a real source of the underlying
foundation of financial services over the.
Speaker 3 (15:35):
Next two three five years.
Speaker 6 (15:38):
Stable coins are really here to stay, and I think
the acceptance of Circle as the most regulated, the most conservative,
really has reserves behind it that are managed by Blackrock.
Speaker 3 (15:53):
As you know.
Speaker 6 (15:54):
So I think the best of the best in stable coins,
a Circle highly regulated, want to be highly regulated, They
want to be an occ bank in the US. So
I think the developments there are very strong, and I
think what we've seen this year is a sea change
in the US in terms of tailwinds with this administration
(16:15):
with Scott Bessant in the Treasury, with Paul Atkins, and
the SEC with Jake Clayton. This team is so highly
respected and so supportive of regulation that covers both digital
assets and financial services, not two separate regulatories.
Speaker 7 (16:35):
In your mind, in terms of deliverables left to go
on these regulatory guard rails for the environment.
Speaker 6 (16:43):
Well, I think the most important thing from my point
of view is we look as we look at stable coins,
is the increase.
Speaker 3 (16:51):
In institutional use, you know.
Speaker 6 (16:53):
A move from crypto traders using staple coins and using
digital currencies two treasures to Visa and MasterCard to the
big banks like JPM Morgan and Vaa developing it. We're
certainly seeing in the Middle East with some of the
best banks in Abu Dhabi in Dubai already developing use
(17:14):
cases for blockchain and in stableok win, particularly dollar stableok wins,
particularly USDC.
Speaker 3 (17:20):
So.
Speaker 1 (17:20):
I know that you talked about perhaps the US regional
banks and the consolidation.
Speaker 4 (17:25):
In that sector.
Speaker 1 (17:26):
Right What scares me right now is all the fraud
not only in the crypto space. But of course we
talked about tech and the build up and around artificial intelligence.
Where do you go to hide when you could potentially
see Jamie Diamond said cockroaches one means more. And you've
seen even around banks in the US where you had
isolated incidents with Tricoler of first brand. So is there
(17:48):
a hedging mechanism at the moment.
Speaker 6 (17:51):
Well, I think there's two different questions there. In terms
of the comment on cockroaches. I mean, I think it
was a statement of credit. Credit and if we're being
very very honest with ourselves, you know, we had twelve
years of zero infrast rates after the Great Financial Crisis
in two thousand and eight, then we had a steep
increase from zero to five and a half percent. I
(18:13):
would have thought back then we would have seen cracks
and credit because it was such a long period of
credit was really very very available. And I think today
it would be unsurprising to me, given how tight credit
spreads are, that we see some correction in credit spreads.
Speaker 1 (18:31):
To a lot of people say that credit bit spreads
are type right now because they're not really thinking about
the fiscal risk that's already baked in. Because you can't
even really count on sovereigns at the moment with their
building debt level that they're actually safe.
Speaker 6 (18:45):
Well you have I think, Sherry, what you just brought
up is the darkest cloud overhanging the markets.
Speaker 3 (18:51):
Which are the debt levels.
Speaker 6 (18:52):
You know, we're talking about the credit markets, but what
you're referring to now is sovereign credit and in particular
from the US US and the much higher debt levels,
and that is the dark cloud hanging over the market.
Speaker 7 (19:05):
For what about Pe? How are you approaching fundraising going
into making You.
Speaker 6 (19:10):
Know, with all this volatility, it makes what we do
in private equity even more sustainable. And I think when
you look at you know, the correction in equities, for
example in the US, it's primarily around those seven or
eight or nine equities in tech that.
Speaker 3 (19:28):
Have really been leading the rally.
Speaker 6 (19:30):
You move from that to the smaller companies in the index,
and then you.
Speaker 3 (19:35):
Move from that to the private companies.
Speaker 6 (19:37):
We're seeing very very good opportunities in private equity. We
focus on financial services. We do a lot in the US.
One of the things that we see is a terrific
opportunity is consolidation in regional and community banks, their ability
to pull costs out to create cost synergies almost immediately
(19:58):
with consolidation. I mean particularly here, when I mentioned to
people that there's four and a half thousand banks in
the US, they usually look at me, like, what United
States is four and a half thousand banks and they're
really good and it's Scott Besson, the Secretary of the Treasury,
has pointed out many times about half of the lending
to small businesses in the US come from regional and
(20:19):
community banks, not from kind.
Speaker 3 (20:21):
Of the big four.
Speaker 6 (20:22):
So there are a lot of great opportunities out there
in private markets.
Speaker 2 (20:26):
That is Bob Diamond, the former CEO of Barclays, in
conversation with Bloomberg TV host Sherry On and April Hong
at the Bloomberg New Economy Forum in Singapore. Here on
the Daybreak Asia podcast. Thanks for listening to today's episode
of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we
(20:46):
look at the story shaping markets, finance, and geopolitics in
the Asia Pacific. You can find us on Apple Spotify,
the Bloomberg Podcast YouTube channel, or anywhere else you listen.
Join us again tomorrow for insight on the mark market
moves from Hong Kong to Singapore and Australia. I'm Doug
Prisoner and this is Bloomberg
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