December 12, 2025 • 21 mins
Your morning briefing, the business news you need in just 15 minutes.
On today's podcast:
(1) President Donald Trump said the US would be willing to contribute assistance to Ukraine as part of a security agreement to end the war with Russia, but continued to express frustration with the pace of talks.
(2) The seizure of an enormous oil supertanker off the coast of Venezuela on Wednesday is just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against Nicolas Maduro, according to people familiar with the operation.
(3) The premium Britain pays to finance its debts has narrowed thanks to Chancellor of the Exchequer Rachel Reeves shoring up the public finances in her budget last month, and a helping hand from her central bank.
(4) Broadcom, a chip company vying with Nvidia for AI computing revenue, suffered a stock slide after its sales outlook for the red-hot market failed to meet investors’ lofty expectations.
(5) China Vanke, the last big survivor of the country’s yearslong property crunch, sent investors an innocuous-looking announcement about a $3.1 billion loan agreement with a state-owned shareholder. But the Nov. 2 statement contained a twist: Shenzhen Metro Group, which had given unwavering support to the developer for nearly two years, now set a cap on any further financing.
Podcast Conversation: Bob Iger Just Got the Better of Sam Altman: Dave Lee
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg DBAK podcast. Good Morning is find
at the twelfth of December. I'm Caroline Hepkat in London.
Speaker 1 (00:15):
And I'm Stephen Carolin Brussels. Coming up today. US President
Donald Trump says America would help with Ukraine's security as
he expresses frustration over a lack of progress on ending
the war.
Speaker 2 (00:27):
Traders say the UK's borrowing penalty, sparked by the Liz
Trust mini budget crisis, is starting to fade.
Speaker 1 (00:35):
Plus how the European company underpinning the global AI boom
is planning to keep its irreplaceable status.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 1 (00:45):
Ukraine and the United States are pitching new compromises in
an attempt to make progress on talks to end Russia's war.
President Vladimir Zelenski has proposed a referendum that would let
Ukrainians vote on whether to hand the Donbass region to Russia.
That's part of the eastern territories the Russian military has
failed to capture in its nearly four year invasion. US
(01:06):
President Donald Trump told reporters Ukrainians would back the peace
plan he proposed after talking with Russia.
Speaker 3 (01:14):
I thought that we were very close with Russia to
having a deal. I thought we were very close with
Ukraine to having a deal. In fact, other than President
Zelensky's people loved the concept of the deal.
Speaker 4 (01:25):
You know, we threw.
Speaker 3 (01:25):
Something out of the four of our dealer. Well, there's
four or five different parts. It's a little bit complicated
because you're cutting up land in a certain way. It's
that the easiest thing is sort of like a complex
real estate deal times one thousand, right.
Speaker 1 (01:37):
The US president added he would be willing to provide
security assistance to Kiev to get an agreement over the line,
but without specifics. Whether the Ukraine gives up land has
become a key sticking point among its backers, with the
rift between America and its European allies becoming increasingly apparent.
Ukraine and several European countries are meeting over the weekend
(01:59):
to discuss that as US offer, but it's unclear if
an American representative will attend, with Trump branding the talks negative.
Speaker 2 (02:08):
The US has sanctioned six oil tankers, as well as
three of Venezuelan President Nicolas Maduro's nephews. It comes after
the seizure of a crude supertanker on Wednesday, which sources
tell Bloomberg is just the start of a new US campaign.
White House Press Secretary Caroline Levitt was asked by reporters
if more vessels will be seized.
Speaker 5 (02:30):
We're not going to stand by and watch sanctioned vessels
sail the seas with black market oil, the proceeds of
which will fuel narco terrorism, of rogue and illegitimate regimes
around the.
Speaker 2 (02:40):
World, Caroline Levitt, speaking there. The US actions aim to
put pressure on Maduro, deny him oil revenue and force
of Venezuelan's strongman from office. It comes after Donald Trump
ordered a massive US military build up in the region.
US officials have made the case that change in government
and in Venezuela could have a transformative impact across Latin America.
Speaker 1 (03:06):
The premium paid by the UK government to finance its
debt has narrowed after Chancellor Rachel Reeves increased her fiscal
buffer in last month's budget. The rate the government pays
to borrow for ten years has fallen twelve basis points
in the past three months, as the US, Germany, France
and Italy have seen increases. Guilty halls have become unusually
politicized since the twenty twenty two mini budget crisis that
(03:27):
forced out then Prime Minister Liz Tross. Since then, there
have been repeated sudden yield spikes on fiscal jitters. Speaking
to Bloomberg, former Prime Minister Teresa May acknowledged her party's
fiscal mistakes.
Speaker 6 (03:40):
You wouldn't use a term like VI indicate. What I
would say is I think that we, unfortunately as a
conservative party, was seen to have lost our value of
integrity and our economic competence.
Speaker 1 (03:53):
Teresa May there speaking to Bloomberg's leaders with Francine laqueb
The UK still has the highest bond yields among a
group of seven nations, but the shift is a boost
for the government after seventeen months in power, marreged by
missteps and policy u turns that have occasionally spooked bond markets.
Speaker 2 (04:12):
Shares in the chip firm Broadcom fell by more than
four percent in post market trading after its sales outlook
failed to meet investor expectations. CEO Hocktan said the company,
which competes with Nvidia, has a backlog of seventy three
billion dollars in AI product orders, disappointing some investors, later
clarifying the figure as a minimum. Bloomberg Intelligence is senior
(04:35):
analyst Kunjun Sabani says the market reaction is surprising.
Speaker 7 (04:40):
There seems to be an overall fatigue coming into the
AI space, but fundamentally, when we just look at Broadcom,
this was one of the most strongest AI semes report
this quarter. I mean they beat the AI revenue numbers
for next quarter their fiscal one queue by almost one
point four billion, which is in twenty sent upside to
(05:01):
what the street was.
Speaker 2 (05:03):
That was Counjasabani from Bloomberg Intelligence. Bootcom has held off
on giving an annual AI revenue forecast, with CEO Tan
saying it was a moving target.
Speaker 1 (05:15):
One of China's biggest homebuilders is racing to averted default
on nearly two billion dollars worth of local debt. Chinavanka
is seeking to delay two payments are payments on two
bonds that are due this month. The company is one
of the few major Chinese developers that hasn't defaulted. In
the past, Vanka has relied on financial lifelines from its
largest state shareholder, but recently that company's shifted its stance
(05:37):
and titened financing terms, adding to the developers stress. Bankers
and fund managers are now rushing to weigh the damage
of what could be one of the biggest corporate restructurings
in China's history. More than seven billion dollars of the
firm's debts are held by lenders and bond investors overseas.
Speaker 2 (05:56):
And lastly, in football, there has been criticism of FIFA's
price of tickets for the World Cup next year. The
Football Supporter's europe Fan Group described the current prices as
extortionate and a monumental betrayal. According to the BBC, tickets
for FIFA's show piece event are as much as seven
times more expensive than the twenty twenty two World Cup,
(06:17):
which took place in Kuta. For England fans, watching all
eight matches through to the final will cost a minimum
of about twenty five pounds from one four hundred and
sixty six pounds in twenty twenty two. FIFA has not
yet commented on its pricing decisions. According to the BBC.
Speaker 1 (06:37):
Those are your top stories on the markets. Themsciosh Pacific
Index one point three percent higher this morning. The topics
in Tokyo's up by two percent. European stock features looking
much stronger as well, up six tenths of one percent.
At the moment, the tenure treasury yield holding steady at
four point one six percent.
Speaker 2 (06:53):
Now in a moment, we'll bring you the latest on
efforts to end Russias war in Ukraine, plus a special
report on the future of ASML, the Dutch company underpinning
the global AI boom. But before we get to that,
something else is caught our Rye. This Friday, our opinion
columnist Davelye's been writing about the mega deal between Disney
and open Ai.
Speaker 1 (07:14):
So it's licensed around two hundred characters to for use
on open AI's Sora video apps, so Lilo and Stitch, Aerial,
Simba all the favorites. They can be used then for
generating AI videos in response to user prompts. Soone exchange,
Disney gets fees and a one billion dollar stake in
open Ai. Davely points out though, well, well, this looks
like a great deal for Disney. Open Ai gets the
(07:36):
ability to make these short clips of characters, but they
won't be able to talk. That's part of the deal.
So he also points out that this app is for
over thirteens, and perhaps the people who might be most
interested in seeing these characters might be under thirteens. But
if you look at the long game of all of this,
he says that essentially it's good for open AI because
they're trying to make sure they hold on to those
(07:57):
younger AI, your chatch ebt users. Essentially they have a
lead over their rivals on as well. And he says
it's also a win for the creative industries because it
essentially sends the message to that if you want to
use these sorts of characters created by human ingenuity, you
have to pay for them, And that's the part that
he thinks we should take away from this deal.
Speaker 2 (08:18):
Yeah, I think it's a really fascinating moment. I just
think that with the unpredictable world of AI, it's not
actually clear who's going to end up being the winner
or the loser in these sorts of deals, because I
think it's it's so unforeseeable what the future of consumption
is really going to look like. But I think, yeah,
(08:40):
it's very very interesting that you're going to be able
to interact with these I mean hugely meaningful characters to
so many people. Yeah, that's a great piece you can find.
Speaker 1 (08:50):
At bloomberok dot com. Slash Opinion will put a link
to it on our podcast show notes as well. Let's
bring you more though on our top story in President
Trump saying the US being would be offered, would be
willing to contribute to Ukraine's security, but showing signs of
frustration with the talks over the country's future. Let's discuss
with Bloomberg Tony howpit it leads our coverage of Russia's
economy and government Tony. President Trump is dramatically scaled back
(09:13):
direct military aid to Ukraine and seems deeply frustrated by
not being able to force peace on the country quickly enough.
Speaker 8 (09:22):
Why good morninge Well, yes, essentially, President Trump, if you remember,
in his election campaign, said he would come to parent
and finish this war quickly, even within a day, and
almost a year later, that hasn't happened. So that's leading
somewhat to the frustration levels that's being expressed from the
White House, and he's focused some of his ire on
(09:43):
President Zelensky. He seems to take an issue with Zelenski's
insistence on things like security guarantees on a refusal to
concede territory to Russia that Russia insists that it must
have as part of any peace steal. And it's really
quite no notable that he doesn't apply the same sort
of pressure on President Putin, who, after all, was responsible
(10:05):
for the invasion and could end the war tomorrow simply
by declaring a cease fire and pulling back troops from
Ukrainian territory. So essentially, President Trump would like to get
on and do business deals with Russia and with Ukraine.
He sees a very little American interest in the territory
that's being fought over, and so he wants to get
(10:26):
a deal done basically in any way possible. And when
he sees people objecting to particular details of a plan,
that leads to frustration in the White House quite quickly.
Speaker 2 (10:38):
Despite Russia's size and scale or so, President Putin hasn't
succeeded on the battlefield, but there is a huge battle
about the narrative of the war. I mean, is Ukraine
losing that narrative?
Speaker 8 (10:53):
Yeah, this is a key issue, I think, because Russia
wants to present the idea that inevitably it will win
and that that somehow therefore influences President Trump's view about
the need to pressure President Zelenski into a deal to
end the war on Russia's terms, and of course Ukraine
takes issue with that. They would point out correctly mostly
that Russia has made very little advance since it was
(11:17):
pushed back in late in twenty twenty two, after advancing
almost as far as Kiev. The war has essentially been
limited to areas of eastern and southern Ukraine, and that
frontline hasn't changed a great deal. We're talking you know,
kilometers here and there. But Ukraine is a very large country.
So it's difficult for President put into assert that he
(11:39):
is won the war in the sense that Ukraine has capitulated.
In Ukraine clearly isn't capitulating. But it's equally difficult for
Ukraine to claim that it's managing to push back Russian
forces because the frontline isn't showing that the front line
is showing a kind of gradual Russian advance, and it's
quite difficult for Ukraine to hold the line. But we're
talking here about you know, kilometers, twenty to thirty kilometers
(12:00):
over a period of a year, and so both sides
are really bogged down and they're trying to persuade Trump
that really that means that they have the advantage and
that the other side should be pressured into a deal
on their terms.
Speaker 1 (12:13):
How should we consider the proposal from the Ukrainian president
of a referendum on the Donbas region as well? Is
this something that could help to advance the conversation in Ukraine?
Speaker 8 (12:27):
Yeah, this is interesting because President's Antico until now has
basically said that he doesn't have the right to sign
away Ukrainian territory. By constitution, he doesn't have the right
and as president he's not entitled to do it. And
so now he's floating the idea of a referendum in
some ways to say, well, okay, if this forms any
part of a piece deal that I can agree to,
it's still going to need the endorsement of the Ukrainian
people in order to stick. And he's come under some
(12:50):
criticism from the US, in particular that Ukraine hasn't held
elections presidential elections simply because martial law is in force
and Ukraine is at war. And so he said that,
you know, well, the referendum on the Dombas region could
be one way forward, or it could be put to
the people in elections themselves. But there are all kinds
(13:11):
of questions here about how this would actually be implemented.
I mean, if you imagine that these areas have large populations,
you know, how would you enforce these people? Basically if
they voted against being part of Russia or being part
of some demilitarized zone, you know, you're essentially compelling them.
The rest of Ukraine will been compelling them if they
voted yes. And what happens if Ukraine votes not, you know,
(13:34):
does that actually then negate the whole of the deal?
So there are lots of questions, but it's an interesting
development that he's actually now floating this idea that it
should be something that the people should decide on.
Speaker 2 (13:46):
What about the meeting this weekend? The White House non
committal about sending a US representative to these talks between
Ukraine and European leaders. And there's still the question of
the frozen Russian assets, you know that Europe has yet
to decide on.
Speaker 8 (14:02):
Yeah, so there are two elements. One of the key
elements for Ukraine is getting clarity on what security guarantees
it would receive in the event of any peace steel
because the Budapest Memorandum of long ago was supposed to
assure its security and it was shown not to do so,
and they don't want to repeat of that exercise. So
there was a big meeting between Zelenskin and top US
(14:24):
officials yesterday on this very subject. There'll be more talks
over the weekend to try and hammer out some clarity
on what security guarantees would actually mean. And from the
Europeans perspective, they're trying to say, okay, well, you know,
if push comes to shod, we're ready to continue funding
Ukraine and to support its defense, and that involves Russian assets,
and they've already they're due to make a decision today.
(14:45):
In fact, that would allow them to lengthen the time
between when they have to approve a continued freeze on
these assets, because they're concerned that one member country could
simply object and that that would then undo the freeze
and threaten the eusability to make use of those assets.
But the big test will come next week when they
have to make a decision about a big loan secure
(15:07):
on these assets, which is essential from Ukraine's point of
view for continuing to fund basic government and defense operations.
Early next year, Tony.
Speaker 1 (15:17):
Thank you very much for joining us Tony halberin leading
our coverage of Russia's economy and government. Will be watching
for developments out of those meetings in Brussels today. Stay
with us more from Bloomberg Daybreak Europe coming up after this.
Speaker 2 (15:34):
Now to a European company at the heart of the
AI boom. SML is the foundation on which much of
the tech industry has been built over the past few years,
and today we're taking a deep dive into the company's
future with an exclusive conversation with the CEO, Christophe Fouquet.
Our reporter Sarah Jacob joins us now for more. Sarah,
good to speak to. SML has a monopoly when it
(15:56):
comes to the machines for these very advanced chip making powers,
the ones that obviously are on the underpinning of the
AI development. How serious is their competition though, and can
they keep their grip then on this industry?
Speaker 4 (16:14):
Good morning, Yes, ASML manufactures the machines that are needed
to produce the most advanced chips you know, for Nvidia,
which in turn run the artificial intelligence models for firms
such as open Ai. They're the only maker of these
cutting edge machines in the world, and it you know,
it wasn't easy to develop their so called extreme ultra
Violet lithography or EUV machines. It took them decades of research,
(16:39):
then fine tuning these machines with a network of suppliers
and close collaboration with chip makers to create breakthroughs in lasers,
glass and other components. In fact, we spoke to Chris Miller,
the author of the book Chip War for the story,
and he says, ASML is irreplaceable. But it's true, you know,
geopolitical tensions are asking other regions are pushing to develop
(17:03):
their own ship industries and in lithography. Take for instance,
in China's Shanghai Microelectronics Equipment has received government backing to
compete in the space. But we understand that those machines
lag asmls by ten to fifteen years. Then there's a
startup in San Francisco called Substrate, which raised money from
(17:23):
Peter Thl but it's also years away for production. So
certainly there are many players that are attempting to rival
a SML. But as ASML CEO Christopher Fuke says, the
you know, the entire ecosystem is very dependent, they have
locked in suppliers, they have loyal customers, and Fuku says
(17:43):
that it's still a very challenging technology to be able
to replace.
Speaker 1 (17:48):
So what does ASML then need to achieve in their
technological development to stay on top?
Speaker 2 (17:53):
Serrah.
Speaker 4 (17:55):
Yeah, Fuka was very clear, you know when he said
that a SML most knows what it wants to do
for its customers in the next ten to fifteen years.
They're working on the three axes of better resolution, better accuracy,
and productivity of their lithography machines for many years. His
next big test, and we write this in the story,
(18:16):
is whether he can lead a transition from EUV to
high ANAEUV machines. Now high ANAA is aimed at enabling
customers to move to chips below two nanometers, so the
smaller the circuits on chips that means better performance, lower
heat and less power consumption. So it's working with intels
(18:37):
and other customers on this who they are experimenting with
the high NA machines, which would make chips even more
capable of running advanced applications in AI and our fears
a SML will work with its customers and getting these
high name machines to the point that they can operate
with minimal downtime through next year, and it expects to
(18:58):
achieve high volume manufacturing in twenty twenty seven and twenty
twenty eight, sometimes next decade. ASML also plans to introduce
an even more advanced technology technology sorry called the hyper Eda.
Speaker 2 (19:11):
Okay, so that's for the future. But what about the
market in China which has been a massive growth driver
for the company in recent years, and the big question
about whether political pressures become more challenging for SML.
Speaker 4 (19:27):
Yes, China has been ASML's largest market. In the third quarter,
it accounted for about forty two percent of net system sales.
ASML has said previously that it expects sales in China
to be significantly lower in twenty twenty six. The company
basically faces curbs and what it can sell to China.
(19:48):
It has never been allowed to sell its EUV machines
as a result of export controls. The Dutch government also
plays restrictions on some of its most advanced DUV machines.
So if the current political climate sort of persists, the
company will remain subject to these kind of curbs or
export controls. But growth must come from elsewhere as well.
(20:10):
So the global market for semiconductors is projected to rise
twenty two percent this year and more than twenty five
percent next year. And chip makers that ESML delivers its
machines to are diversifying their geography. So the US government
is offering billions of dollars in incentives to TSMC, Samsung
and others to build factories for chips in the US.
(20:32):
And the more fabs that are being built, the more
machines from ASML that are needed. So that's how we
see that market the other markets growing from here.
Speaker 1 (20:43):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:49):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (20:55):
You can also listen live each morning on London DAB Radio,
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Speaker 2 (21:01):
Our flagship New York station is also available on your
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Speaker 1 (21:09):
I'm Caroline Hepka and I'm Stephen. Carol. Join us again
tomorrow morning for all the news you need to start
your day. Right here on Bloomberg day Break, Europe
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:09):
This is the Bloomberg DBAK podcast. Good Morning is find
at the twelfth of December. I'm Caroline Hepkat in London.
Speaker 1 (00:15):
And I'm Stephen Carolin Brussels. Coming up today. US President
Donald Trump says America would help with Ukraine's security as
he expresses frustration over a lack of progress on ending
the war.
Speaker 2 (00:27):
Traders say the UK's borrowing penalty, sparked by the Liz
Trust mini budget crisis, is starting to fade.
Speaker 1 (00:35):
Plus how the European company underpinning the global AI boom
is planning to keep its irreplaceable status.
Speaker 2 (00:42):
Let's start with a roundup of our top stories.
Speaker 1 (00:45):
Ukraine and the United States are pitching new compromises in
an attempt to make progress on talks to end Russia's war.
President Vladimir Zelenski has proposed a referendum that would let
Ukrainians vote on whether to hand the Donbass region to Russia.
That's part of the eastern territories the Russian military has
failed to capture in its nearly four year invasion. US
(01:06):
President Donald Trump told reporters Ukrainians would back the peace
plan he proposed after talking with Russia.
Speaker 3 (01:14):
I thought that we were very close with Russia to
having a deal. I thought we were very close with
Ukraine to having a deal. In fact, other than President
Zelensky's people loved the concept of the deal.
Speaker 4 (01:25):
You know, we threw.
Speaker 3 (01:25):
Something out of the four of our dealer. Well, there's
four or five different parts. It's a little bit complicated
because you're cutting up land in a certain way. It's
that the easiest thing is sort of like a complex
real estate deal times one thousand, right.
Speaker 1 (01:37):
The US president added he would be willing to provide
security assistance to Kiev to get an agreement over the line,
but without specifics. Whether the Ukraine gives up land has
become a key sticking point among its backers, with the
rift between America and its European allies becoming increasingly apparent.
Ukraine and several European countries are meeting over the weekend
(01:59):
to discuss that as US offer, but it's unclear if
an American representative will attend, with Trump branding the talks negative.
Speaker 2 (02:08):
The US has sanctioned six oil tankers, as well as
three of Venezuelan President Nicolas Maduro's nephews. It comes after
the seizure of a crude supertanker on Wednesday, which sources
tell Bloomberg is just the start of a new US campaign.
White House Press Secretary Caroline Levitt was asked by reporters
if more vessels will be seized.
Speaker 5 (02:30):
We're not going to stand by and watch sanctioned vessels
sail the seas with black market oil, the proceeds of
which will fuel narco terrorism, of rogue and illegitimate regimes
around the.
Speaker 2 (02:40):
World, Caroline Levitt, speaking there. The US actions aim to
put pressure on Maduro, deny him oil revenue and force
of Venezuelan's strongman from office. It comes after Donald Trump
ordered a massive US military build up in the region.
US officials have made the case that change in government
and in Venezuela could have a transformative impact across Latin America.
Speaker 1 (03:06):
The premium paid by the UK government to finance its
debt has narrowed after Chancellor Rachel Reeves increased her fiscal
buffer in last month's budget. The rate the government pays
to borrow for ten years has fallen twelve basis points
in the past three months, as the US, Germany, France
and Italy have seen increases. Guilty halls have become unusually
politicized since the twenty twenty two mini budget crisis that
(03:27):
forced out then Prime Minister Liz Tross. Since then, there
have been repeated sudden yield spikes on fiscal jitters. Speaking
to Bloomberg, former Prime Minister Teresa May acknowledged her party's
fiscal mistakes.
Speaker 6 (03:40):
You wouldn't use a term like VI indicate. What I
would say is I think that we, unfortunately as a
conservative party, was seen to have lost our value of
integrity and our economic competence.
Speaker 1 (03:53):
Teresa May there speaking to Bloomberg's leaders with Francine laqueb
The UK still has the highest bond yields among a
group of seven nations, but the shift is a boost
for the government after seventeen months in power, marreged by
missteps and policy u turns that have occasionally spooked bond markets.
Speaker 2 (04:12):
Shares in the chip firm Broadcom fell by more than
four percent in post market trading after its sales outlook
failed to meet investor expectations. CEO Hocktan said the company,
which competes with Nvidia, has a backlog of seventy three
billion dollars in AI product orders, disappointing some investors, later
clarifying the figure as a minimum. Bloomberg Intelligence is senior
(04:35):
analyst Kunjun Sabani says the market reaction is surprising.
Speaker 7 (04:40):
There seems to be an overall fatigue coming into the
AI space, but fundamentally, when we just look at Broadcom,
this was one of the most strongest AI semes report
this quarter. I mean they beat the AI revenue numbers
for next quarter their fiscal one queue by almost one
point four billion, which is in twenty sent upside to
(05:01):
what the street was.
Speaker 2 (05:03):
That was Counjasabani from Bloomberg Intelligence. Bootcom has held off
on giving an annual AI revenue forecast, with CEO Tan
saying it was a moving target.
Speaker 1 (05:15):
One of China's biggest homebuilders is racing to averted default
on nearly two billion dollars worth of local debt. Chinavanka
is seeking to delay two payments are payments on two
bonds that are due this month. The company is one
of the few major Chinese developers that hasn't defaulted. In
the past, Vanka has relied on financial lifelines from its
largest state shareholder, but recently that company's shifted its stance
(05:37):
and titened financing terms, adding to the developers stress. Bankers
and fund managers are now rushing to weigh the damage
of what could be one of the biggest corporate restructurings
in China's history. More than seven billion dollars of the
firm's debts are held by lenders and bond investors overseas.
Speaker 2 (05:56):
And lastly, in football, there has been criticism of FIFA's
price of tickets for the World Cup next year. The
Football Supporter's europe Fan Group described the current prices as
extortionate and a monumental betrayal. According to the BBC, tickets
for FIFA's show piece event are as much as seven
times more expensive than the twenty twenty two World Cup,
(06:17):
which took place in Kuta. For England fans, watching all
eight matches through to the final will cost a minimum
of about twenty five pounds from one four hundred and
sixty six pounds in twenty twenty two. FIFA has not
yet commented on its pricing decisions. According to the BBC.
Speaker 1 (06:37):
Those are your top stories on the markets. Themsciosh Pacific
Index one point three percent higher this morning. The topics
in Tokyo's up by two percent. European stock features looking
much stronger as well, up six tenths of one percent.
At the moment, the tenure treasury yield holding steady at
four point one six percent.
Speaker 2 (06:53):
Now in a moment, we'll bring you the latest on
efforts to end Russias war in Ukraine, plus a special
report on the future of ASML, the Dutch company underpinning
the global AI boom. But before we get to that,
something else is caught our Rye. This Friday, our opinion
columnist Davelye's been writing about the mega deal between Disney
and open Ai.
Speaker 1 (07:14):
So it's licensed around two hundred characters to for use
on open AI's Sora video apps, so Lilo and Stitch, Aerial,
Simba all the favorites. They can be used then for
generating AI videos in response to user prompts. Soone exchange,
Disney gets fees and a one billion dollar stake in
open Ai. Davely points out though, well, well, this looks
like a great deal for Disney. Open Ai gets the
(07:36):
ability to make these short clips of characters, but they
won't be able to talk. That's part of the deal.
So he also points out that this app is for
over thirteens, and perhaps the people who might be most
interested in seeing these characters might be under thirteens. But
if you look at the long game of all of this,
he says that essentially it's good for open AI because
they're trying to make sure they hold on to those
(07:57):
younger AI, your chatch ebt users. Essentially they have a
lead over their rivals on as well. And he says
it's also a win for the creative industries because it
essentially sends the message to that if you want to
use these sorts of characters created by human ingenuity, you
have to pay for them, And that's the part that
he thinks we should take away from this deal.
Speaker 2 (08:18):
Yeah, I think it's a really fascinating moment. I just
think that with the unpredictable world of AI, it's not
actually clear who's going to end up being the winner
or the loser in these sorts of deals, because I
think it's it's so unforeseeable what the future of consumption
is really going to look like. But I think, yeah,
(08:40):
it's very very interesting that you're going to be able
to interact with these I mean hugely meaningful characters to
so many people. Yeah, that's a great piece you can find.
Speaker 1 (08:50):
At bloomberok dot com. Slash Opinion will put a link
to it on our podcast show notes as well. Let's
bring you more though on our top story in President
Trump saying the US being would be offered, would be
willing to contribute to Ukraine's security, but showing signs of
frustration with the talks over the country's future. Let's discuss
with Bloomberg Tony howpit it leads our coverage of Russia's
economy and government Tony. President Trump is dramatically scaled back
(09:13):
direct military aid to Ukraine and seems deeply frustrated by
not being able to force peace on the country quickly enough.
Speaker 8 (09:22):
Why good morninge Well, yes, essentially, President Trump, if you remember,
in his election campaign, said he would come to parent
and finish this war quickly, even within a day, and
almost a year later, that hasn't happened. So that's leading
somewhat to the frustration levels that's being expressed from the
White House, and he's focused some of his ire on
(09:43):
President Zelensky. He seems to take an issue with Zelenski's
insistence on things like security guarantees on a refusal to
concede territory to Russia that Russia insists that it must
have as part of any peace steal. And it's really
quite no notable that he doesn't apply the same sort
of pressure on President Putin, who, after all, was responsible
(10:05):
for the invasion and could end the war tomorrow simply
by declaring a cease fire and pulling back troops from
Ukrainian territory. So essentially, President Trump would like to get
on and do business deals with Russia and with Ukraine.
He sees a very little American interest in the territory
that's being fought over, and so he wants to get
(10:26):
a deal done basically in any way possible. And when
he sees people objecting to particular details of a plan,
that leads to frustration in the White House quite quickly.
Speaker 2 (10:38):
Despite Russia's size and scale or so, President Putin hasn't
succeeded on the battlefield, but there is a huge battle
about the narrative of the war. I mean, is Ukraine
losing that narrative?
Speaker 8 (10:53):
Yeah, this is a key issue, I think, because Russia
wants to present the idea that inevitably it will win
and that that somehow therefore influences President Trump's view about
the need to pressure President Zelenski into a deal to
end the war on Russia's terms, and of course Ukraine
takes issue with that. They would point out correctly mostly
that Russia has made very little advance since it was
(11:17):
pushed back in late in twenty twenty two, after advancing
almost as far as Kiev. The war has essentially been
limited to areas of eastern and southern Ukraine, and that
frontline hasn't changed a great deal. We're talking you know,
kilometers here and there. But Ukraine is a very large country.
So it's difficult for President put into assert that he
(11:39):
is won the war in the sense that Ukraine has capitulated.
In Ukraine clearly isn't capitulating. But it's equally difficult for
Ukraine to claim that it's managing to push back Russian
forces because the frontline isn't showing that the front line
is showing a kind of gradual Russian advance, and it's
quite difficult for Ukraine to hold the line. But we're
talking here about you know, kilometers, twenty to thirty kilometers
(12:00):
over a period of a year, and so both sides
are really bogged down and they're trying to persuade Trump
that really that means that they have the advantage and
that the other side should be pressured into a deal
on their terms.
Speaker 1 (12:13):
How should we consider the proposal from the Ukrainian president
of a referendum on the Donbas region as well? Is
this something that could help to advance the conversation in Ukraine?
Speaker 8 (12:27):
Yeah, this is interesting because President's Antico until now has
basically said that he doesn't have the right to sign
away Ukrainian territory. By constitution, he doesn't have the right
and as president he's not entitled to do it. And
so now he's floating the idea of a referendum in
some ways to say, well, okay, if this forms any
part of a piece deal that I can agree to,
it's still going to need the endorsement of the Ukrainian
people in order to stick. And he's come under some
(12:50):
criticism from the US, in particular that Ukraine hasn't held
elections presidential elections simply because martial law is in force
and Ukraine is at war. And so he said that,
you know, well, the referendum on the Dombas region could
be one way forward, or it could be put to
the people in elections themselves. But there are all kinds
(13:11):
of questions here about how this would actually be implemented.
I mean, if you imagine that these areas have large populations,
you know, how would you enforce these people? Basically if
they voted against being part of Russia or being part
of some demilitarized zone, you know, you're essentially compelling them.
The rest of Ukraine will been compelling them if they
voted yes. And what happens if Ukraine votes not, you know,
(13:34):
does that actually then negate the whole of the deal?
So there are lots of questions, but it's an interesting
development that he's actually now floating this idea that it
should be something that the people should decide on.
Speaker 2 (13:46):
What about the meeting this weekend? The White House non
committal about sending a US representative to these talks between
Ukraine and European leaders. And there's still the question of
the frozen Russian assets, you know that Europe has yet
to decide on.
Speaker 8 (14:02):
Yeah, so there are two elements. One of the key
elements for Ukraine is getting clarity on what security guarantees
it would receive in the event of any peace steel
because the Budapest Memorandum of long ago was supposed to
assure its security and it was shown not to do so,
and they don't want to repeat of that exercise. So
there was a big meeting between Zelenskin and top US
(14:24):
officials yesterday on this very subject. There'll be more talks
over the weekend to try and hammer out some clarity
on what security guarantees would actually mean. And from the
Europeans perspective, they're trying to say, okay, well, you know,
if push comes to shod, we're ready to continue funding
Ukraine and to support its defense, and that involves Russian assets,
and they've already they're due to make a decision today.
(14:45):
In fact, that would allow them to lengthen the time
between when they have to approve a continued freeze on
these assets, because they're concerned that one member country could
simply object and that that would then undo the freeze
and threaten the eusability to make use of those assets.
But the big test will come next week when they
have to make a decision about a big loan secure
(15:07):
on these assets, which is essential from Ukraine's point of
view for continuing to fund basic government and defense operations.
Early next year, Tony.
Speaker 1 (15:17):
Thank you very much for joining us Tony halberin leading
our coverage of Russia's economy and government. Will be watching
for developments out of those meetings in Brussels today. Stay
with us more from Bloomberg Daybreak Europe coming up after this.
Speaker 2 (15:34):
Now to a European company at the heart of the
AI boom. SML is the foundation on which much of
the tech industry has been built over the past few years,
and today we're taking a deep dive into the company's
future with an exclusive conversation with the CEO, Christophe Fouquet.
Our reporter Sarah Jacob joins us now for more. Sarah,
good to speak to. SML has a monopoly when it
(15:56):
comes to the machines for these very advanced chip making powers,
the ones that obviously are on the underpinning of the
AI development. How serious is their competition though, and can
they keep their grip then on this industry?
Speaker 4 (16:14):
Good morning, Yes, ASML manufactures the machines that are needed
to produce the most advanced chips you know, for Nvidia,
which in turn run the artificial intelligence models for firms
such as open Ai. They're the only maker of these
cutting edge machines in the world, and it you know,
it wasn't easy to develop their so called extreme ultra
Violet lithography or EUV machines. It took them decades of research,
(16:39):
then fine tuning these machines with a network of suppliers
and close collaboration with chip makers to create breakthroughs in lasers,
glass and other components. In fact, we spoke to Chris Miller,
the author of the book Chip War for the story,
and he says, ASML is irreplaceable. But it's true, you know,
geopolitical tensions are asking other regions are pushing to develop
(17:03):
their own ship industries and in lithography. Take for instance,
in China's Shanghai Microelectronics Equipment has received government backing to
compete in the space. But we understand that those machines
lag asmls by ten to fifteen years. Then there's a
startup in San Francisco called Substrate, which raised money from
(17:23):
Peter Thl but it's also years away for production. So
certainly there are many players that are attempting to rival
a SML. But as ASML CEO Christopher Fuke says, the
you know, the entire ecosystem is very dependent, they have
locked in suppliers, they have loyal customers, and Fuku says
(17:43):
that it's still a very challenging technology to be able
to replace.
Speaker 1 (17:48):
So what does ASML then need to achieve in their
technological development to stay on top?
Speaker 2 (17:53):
Serrah.
Speaker 4 (17:55):
Yeah, Fuka was very clear, you know when he said
that a SML most knows what it wants to do
for its customers in the next ten to fifteen years.
They're working on the three axes of better resolution, better accuracy,
and productivity of their lithography machines for many years. His
next big test, and we write this in the story,
(18:16):
is whether he can lead a transition from EUV to
high ANAEUV machines. Now high ANAA is aimed at enabling
customers to move to chips below two nanometers, so the
smaller the circuits on chips that means better performance, lower
heat and less power consumption. So it's working with intels
(18:37):
and other customers on this who they are experimenting with
the high NA machines, which would make chips even more
capable of running advanced applications in AI and our fears
a SML will work with its customers and getting these
high name machines to the point that they can operate
with minimal downtime through next year, and it expects to
(18:58):
achieve high volume manufacturing in twenty twenty seven and twenty
twenty eight, sometimes next decade. ASML also plans to introduce
an even more advanced technology technology sorry called the hyper Eda.
Speaker 2 (19:11):
Okay, so that's for the future. But what about the
market in China which has been a massive growth driver
for the company in recent years, and the big question
about whether political pressures become more challenging for SML.
Speaker 4 (19:27):
Yes, China has been ASML's largest market. In the third quarter,
it accounted for about forty two percent of net system sales.
ASML has said previously that it expects sales in China
to be significantly lower in twenty twenty six. The company
basically faces curbs and what it can sell to China.
(19:48):
It has never been allowed to sell its EUV machines
as a result of export controls. The Dutch government also
plays restrictions on some of its most advanced DUV machines.
So if the current political climate sort of persists, the
company will remain subject to these kind of curbs or
export controls. But growth must come from elsewhere as well.
(20:10):
So the global market for semiconductors is projected to rise
twenty two percent this year and more than twenty five
percent next year. And chip makers that ESML delivers its
machines to are diversifying their geography. So the US government
is offering billions of dollars in incentives to TSMC, Samsung
and others to build factories for chips in the US.
(20:32):
And the more fabs that are being built, the more
machines from ASML that are needed. So that's how we
see that market the other markets growing from here.
Speaker 1 (20:43):
This is Bloomberg Daybreak Europe, your morning brief on the
stories making news from London to Wall Street and beyond.
Speaker 2 (20:49):
Look for us on your podcast feed every morning, on Apple, Spotify,
and anywhere else you get your podcasts.
Speaker 1 (20:55):
You can also listen live each morning on London DAB Radio,
The Bloomberg Business and Bloomberg dot Com.
Speaker 2 (21:01):
Our flagship New York station is also available on your
Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.
Speaker 1 (21:09):
I'm Caroline Hepka and I'm Stephen. Carol. Join us again
tomorrow morning for all the news you need to start
your day. Right here on Bloomberg day Break, Europe
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