China Fights Back, South Korea Declares Martial Law | Bloomberg Technology

South Korea Declares Martial Law

• The South Korean government has declared martial law for the first time in 44 years due to a deadlock over the budget between the minority party and the majority Democratic Party in the nation's parliament (2m30s).
• The declaration of martial law has caught members of the president's own party off guard, and it is uncertain where things are going from here, with troops reported to be in the National Assembly building (2m36s).
• The South Korean parliament has passed a request to lift the martial law, and lawmakers will vote on the matter, with dozens of lawmakers having managed to enter the main hall of the National Assembly (3m4s).
• The martial law declaration has an effect on liquidity in the markets, despite efforts to ensure liquidity, and is a concern for technology companies such as Samsung, which are already worried about the new US administration and potential tariffs on their exports (3m33s).

US Chip Export Curbs and Market Volatility

• The US has announced chip export curbs, and the incoming administration has threatened tariffs on imports to the US, adding to the volatility for key companies like Samsung (3m51s).
• It is uncertain whether the South Korean stock markets will open on Wednesday, according to YTN TV (4m27s).
• China has taken a significant move to counter the US chip export curbs, imposing limitations on key metals for technology use, in the latest development in the US-China tit-for-tat (4m51s).
• The situation in South Korea and the US-China tensions are having an impact on the global markets, with the Nasdaq 100 off and Apple reaching a new record high (1m1s).

SpaceX Valuation and AT&T Profit Predictions

• SpaceX is considering a new offer that could boost its valuation to $350 billion (45s).
• AT&T's CEO predicts double-digit profit gains in 2027 (54s).

US-China Tensions over Key Minerals

• The Biden administration has announced new limits on imports and exports to the US from China of key minerals, including gallium and germanium, which are used in semiconductors, satellites, and night vision goggles (4m55s).
• These minerals are significant despite being traded in small amounts, and the US is taking the move in stride, with the industry having adapted to earlier restrictions imposed by China about a year ago (5m17s).
• The world has grown dependent on China as the top supplier of these minerals due to their low cost and abundance, but the industry has been able to find alternate sources of supply from their own inventories and other places outside China (6m5s).

Impact on Chipmakers and Intel

• The US limits on exports to China have ramifications for chipmakers, with ASML, a European chipmaker, saying US authorities are imposing restrictions on manufacturers that will become effective immediately, but not expecting long-term demand to be impacted (6m14s).
• Intel shares have been affected, with the company's CEO departing unexpectedly, opening the door for the company to consider more deal options, including M&A, with plenty of reporting around what could be spun off and who would be buyers (6m53s).
• Intel has been at the heart of deal talks, having lost ground in the chip industry to competitors like NVIDIA and TSMC, with discussions and deals having taken place, and the company's subsidiaries, including Alta Terra, potentially being considered for spinoffs (7m18s).
• The board needs to find a new CEO for Intel, with the company paying a significant amount to the exiting CEO, Pat Gelsinger, who departed last weekend and was not expected to stick around to train the new CEO (8m22s).

AT&T's Growth Strategy and Fiber Investment

• AT&T is seen sustaining profit growth for the next three years, including double-digit gains, with the company's CEO, John Stankey, joining to discuss the company's prospects, including its expectations for 2029 (9m36s).
• A goal of 50 million plus total locations with fiber is being targeted, with a focus on fiber due to its success and customer satisfaction, as well as its ability to drive better value into the business and facilitate the sale of multiple products into fiber households (10m0s).
• Four out of every 10 subscribers also subscribe to the wireless service, and this number is increasing, with data consumption expected to increase by 80% over the next five years, making fiber a crucial investment for the future (10m20s).
• Fiber has symmetrical bandwidth characteristics that will facilitate AI and the sending of more data into a network, making it a great investment for the long haul (10m40s).
• South Korean lawmakers have voted to request lifting martial law, with the situation being closely monitored (10m57s).
• Innovative partnerships, such as the one with BlackRock, are being used to fuel investment in infrastructure rollout, with a focus on owned and operated infrastructure where 100% of the economics are taken (11m32s).
• Private capital markets provide a bit of insulation from public markets, allowing for a balance of portfolio and relationships with partners like BlackRock, which has been a successful investment (11m54s).
• The company has proven it can operate effectively outside of its traditional territory, and BlackRock has been willing to put more investment in, which will be used to grow the footprint over time (12m8s).
• AI demand and the resulting strains on energy infrastructure are significant, with power consumption expected to be really important moving forward, and the company is working to shut down its century-old copper infrastructure and move traffic to fiber, which uses less power (12m50s).
• The company believes that getting more traffic over to fiber will help offset some of the increase in data demand and AI, and that this is a really important policy dynamic that the country needs to work through (13m7s).
• The company is giving money back to investors through derivatives or buybacks, with a focus on returning value to shareholders, and feels comfortable with its debt position, which is why it is making this announcement (13m58s).
• The company has structured its balance sheet properly, with attractive interest rates from its portfolio debt, allowing it to make this announcement and return value to shareholders (14m8s).
• AT&T's business strategy involves reinvesting capital in assets they hold, with a leverage structure that feels comfortable to them, and they have not gone back to reduce the share account despite a dividend yield of over 5% (14m53s).
• The company expects to grow cash flow by a billion dollars a year, even without Direct TV, as they move through their planning process, and they see acceleration in their EBS (15m32s).
• Direct TV has provided a lot of cash coverage, and the company did a nice job of managing the asset down to this point, but now it's time to focus on building a world-class connectivity business (15m43s).
• Many analysts believe that AT&T is getting back to what they do best, which is telecoms, with clarity given on the numbers, including $40 billion of anticipated shareholder returns and $50 billion of financial capacity (16m20s).

SpaceX Valuation and Insider Share Sales

• SpaceX is aiming for a valuation of $350 billion, which could make it Elon Musk's company the most valuable startup, as the company aims to sell insider shares (18m56s).
• Secondary market activity is underway, allowing insiders such as employees and existing venture capitalists to sell their shares to new investors, with a huge jump in valuation to $350 billion, up from $255 billion last month (19m31s).
• The recent success of the Starship launch and Elon Musk's ties to Trump have created more investor enthusiasm, making it a record for the most valuable startup in the world (19m54s).
• This secondary market activity is unlikely to be a sign of an imminent IPO, as it would reduce demand from institutional investors, and instead may be a sign that the company is planning to spin out its satellite internet provider, Starlink, which could go public in the future (20m22s).

Tesla, Elon Musk, and Legal Battles

• Tesla's delivery from its Shanghai factory was down, following the Chinese government's increase in subsidies to entice more consumers to buy electric vehicles (20m53s).
• A Delaware judge has struck down Elon Musk's record-setting pay package for the second time, ruling that Tesla's board was improperly influenced by Musk when adopting the package in 2018 (21m15s).
• Elon Musk reacted to the news on X, calling it "absolute corruption," and Tesla plans to appeal the decision, which could have significant implications for the company's future (21m25s).
• If the ruling stands, Tesla's board would need to come up with a new proposal, and there is a risk that Elon Musk could step away from the company to focus on his AI package and government work (22m4s).
• Tesla is the biggest contributor to the downside on the Nasdaq, and there are concerns about the impact of Elon Musk's potential departure on the company's self-driving ambitions and stock price (22m13s).
• The lawsuit that sparked the debate over Elon Musk's pay package was brought by a key shareholder, and the lawyers involved received a huge payout for their work (23m10s).
• The case has raised questions about the future of Delaware as a domicile for companies, with some prominent investors discussing the implications of the ruling on X (23m39s).
• Elon Musk has suggested that companies should follow him out of Delaware, which could create uncertainty and a cloud over the state's business environment (23m55s).

South Korea Market Stabilization Efforts

• South Korean officials are working to stabilize financial markets, with the currency showing some signs of stabilization, and lawmakers are voting to request the lifting of martial law (24m39s).
• The Nasdaq has been pulled lower but is now up 0.1%, with Tesla putting the US lower, while Palantir has soared 5.5% after getting a new deal to sell its products (25m36s).

Market Updates and Social Media Platforms

• Meta is up 2.5%, with reports suggesting Mark Zuckerberg would be open to contributing to technology lawmaking under the next administration (26m0s).
• Social media platforms like Threads and Bluesky have seen an influx of new users seeking alternatives to Elon Musk's right-leaning platform X (26m19s).
• Rose Wang, COO of Bluesky, reports that the platform has seen over 10 million new US users join since the election, with global growth also coming from Japan, Brazil, the UK, and Canada (26m52s).
• Bluesky's infrastructure has been strained due to the sudden growth of users, but the company's engineers have worked to ensure the app stays online with minimal downtime (27m31s).
• Bluesky's protocol is built for scale, having been originally designed for Twitter, and the company is now focused on its end-users and launching subscriptions to provide more features (27m43s).
• The company is not currently focused on raising more money, instead prioritizing its users and providing a safe and fun experience, with subscriptions offering additional features like custom icons and longer video uploads (28m38s).
• Bluesky has benefited from users leaving X, but Rose Wang does not feel that the label of "anti-Elon Musk network" or "left-leaning network" is what the company is going for, instead attributing it to people's reactions to events (29m26s).
• Blue Sky is an open infrastructure platform that allows users to have engaging conversations and build their own spaces, regardless of their political viewpoints or geographical locations (29m52s).
• The platform has users from all over the world, including Japanese and Brazilian users, and is not U.S.-centric or left-leaning (29m42s).
• Blue Sky allows users to subscribe to or turn off political content, and users can label speculative information without waiting for central authority or a parent company (30m8s).
• The platform has seen activity from Korean users, with a reporter posting live from Korea and only on Blue Sky, making it a place for real-time discussions (30m31s).
• Blue Sky has guards against speculative information, allowing users to label posts and decide how they want to experience content and interact with others (30m49s).
• The platform's approach to state-affiliated media organizations is to give users the tools to decide how they want to interact with such content, rather than labeling or restricting it (31m30s).
• Blue Sky prioritizes the end-user experience and gives users the tools to decide how they want to take in news or interact with different accounts (31m53s).
• The platform has rules and community guidelines that heads of state must follow, and it has different jurisdictions for different countries (32m7s).
• Blue Sky prioritizes safety and trust over growth, with a moderation team in place and a focus on stackable moderation that gives users control over their experience (32m34s).
• The platform allows users to label speculative information and other users can subscribe to those labels, making social media more democratic and user-driven (33m32s).
• Bluesky is a remote team with a global presence, having people in Europe, Asia, and the U.S., and they plan to continue being a remote team to cater to the needs of their global audience (34m21s).
• There is no technical headquarters for Bluesky, and the team aims to be reactive to the different needs of their global audience (34m38s).

AI and Future Technological Advancements

• Technological advances in AI are expected to boom in the next year, drawing interest and investment, with Sequoia Capital Partner Konstantine Ruler at the forefront (35m23s).
• Konstantine Ruler believes that artificial intelligence is a very important macro trend, akin to the Industrial Revolution, and that his company will continue investing in it for decades, regardless of the hype cycle (36m0s).
• According to Konstantine Ruler, AI changes over time, and 2024 has been the year of agents, which are AI systems that complete tasks, such as Expo, a portfolio company that developed AI that can outperform some of the best penetration testers in the world (37m3s).
• Konstantine Ruler predicts that 2025 and beyond will likely be about swarms of AI agents, networks of agents working together and competing against each other to achieve results (37m57s).
• The swarm of AI agents is expected to cross-contaminate and work against each other, with some winning and some losing, as companies like Salesforce and portfolio companies like Rox focus on developing AI agents (38m28s).
• Konstantine Ruler believes that the promise of AI completing tasks is impactful, and people are excited about agents because they want AI to do the work (38m38s).
• Konstantine Buhler mentions an example of a company that uses an AI agent that includes a human in the loop, called ROX, which empowers sellers with an agent that does research and prepares them for meetings, rather than cutting out the human element (38m46s).
• ROX originally developed technology that would auto-draft emails, but found that keeping the human in the loop resulted in triple the performance (39m17s).
• There are companies where the AI agent will do the entire task, likely in the cybersecurity space, and companies where the AI agent will augment human work, like ROX (39m30s).
• Konstantine Buhler believes that artificial intelligence has huge opportunities, particularly in healthcare and education, where AI can help reduce costs and improve services (40m14s).

Amazon, Salesforce, and AI Agents

• Amazon's cloud unit is developing new components to make data centers run more efficiently, which could help address the growing strain on the electrical grid (41m21s).
• Salesforce is scheduled to report its third-quarter earnings, and investors are watching to see if the company's new AI agent strategy is paying off (41m42s).
• Salesforce's share price is high, but it remains to be seen if the numbers will bear it out, as the company's pivot to AI agents is still being tested (41m50s).
• The adoption of Salesforce's AI agents is expected to be a key topic in the earnings report, with investors looking for updated figures and proof of concepts (42m36s).
• The revenue from Salesforce's AI agents is expected to take time to ramp up, as it is a consumption-based product (42m58s).
• The cost base for Salesforce's AI agents is also a concern, with an initial cost of two dollars per use (43m24s).

South Korea Martial Law and Market Impact

• South Korea's president has declared martial law in an emergency address, citing an unspecified reason for the decision (43m42s).
• South Korea's opposition lawmakers have voted to request the president to withdraw martial law, which was declared to protect freedom and constitutional order, amidst accusations that the opposition is trying to paralyze the administration (43m53s).
• The market is waiting to see if the president complies with the request, and investors are looking for announcements from authorities, such as the finance ministry and central bank, for reassurance (44m21s).
• The central bank has stated that it would provide unlimited liquidity if needed, which has been a comfort for investors (44m36s).
• Samsung shares listed in London have lost 7.5% after the headlines on martial law, while those listed in the US have fallen as much as 7% (44m52s).
• ETFs of Korean companies listed in London have also lost value but have pared some of those losses since the central bank's statement (45m8s).
• Investors are looking for details and hoping for support, which is typical in such situations (45m15s).
• There are concerns about the impact of martial law on key exporters, such as Samsung Electronics, which could be at risk of new tariffs from the United States (45m29s).
• The US tariffs, part of the so-called "Trump trade," have been a key concern for investors, as they could cause the region to slow down and hit the currency (45m49s).
• The current political environment, including foreign policy, will be a significant factor in what happens in Korean markets (46m18s).