AI momentum, nuclear power and policy risks shape the outlook 8/27/26

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 AI is here, transforming how we work, live, and lead.
 And the women I talked to aren't waiting for the future, they're shaping it.
 I'm Julia Borsten, senior media and tech correspondent at CNBC.
 This is CNBC Changemakers, where I talk with the female leaders transforming business.
 As AI reshapes the world.
 Follow and listen to CNBC Changemakers, Women Leading in the Age of AI,
 wherever you get your podcasts.
 I'm Dominic Chouin from Morgan Brennan, and this is your morning call.
 Good Thursday morning, Friday Eve, we'll call it.
 US equity futures right now, after a mostly lower session for stocks yesterday,
 are seeing some signs of life, although we're seeing some things pedering out just a little bit.
 The Dow has turned slightly negative in just a few moments or so, just the last few minutes.
 It's down and applied lower by 25 points.
 The S&P though, implied higher by 29 points, and the tech heavier Nasdaq 100 trade,
 boyed by what else in video, up by about 340 points.
 Now, Treasuries, with the two and 10-year yields now sitting at December 2025 highs,
 we are currently seeing a tick lower, slightly in those interest rates,
 so higher bond prices lower yields.
 The benchmark, 10-year note yield, 4.66%, the two-year note yield, 4.22%,
 and the 30-year long bond, 5.18%.
 Crypto, with Bitcoin and Solana, both on pace for their best months since November of 2024,
 we are seeing a bid to those prices again.
 Bitcoin currently $79,732, so trying to push back above that $80,000 mark,
 Ethereum prices up 2.5% to $2530, and that aforementioned Solana up 8% to 104 and change.
 Energy prices, a key focus as you're on in the US,
 still have this conflict and war going on in the Middle East right now.
 You can see US oil prices down half of 1% to $81.90,
 Brent Crude, the world gauge, $87.55 off about 1.3% of 1%.
 Note on diesel prices by the way, according to AAA,
 we're now just 19 cents away from a record high in diesel prices,
 so a lot of ripple effects there from transportation to a lot of other industries,
 we'll keep an eye on that.
 Now to our market story, the top one today.
 Shares of NVIDIA popping ahead of the opening bell
 after an initial post earnings dip,
 the chipmaker out with its biggest revenue beat in two years,
 earnings also easily topping expectations here,
 while second quarter gross margins continue to somewhat underwhelm.
 But what's really taking the street by surprise is NVIDIA breaking with tradition,
 giving a full year out guide.
 The company says it sees revenue growing by an estimated 70% next year
 versus estimates calling for a just 44% to 45% increase.
 That 70% by the way is with constrained supplies,
 meaning demand is even higher than that,
 NVIDIA just can't make enough product to meet all of the demand.
 And for all the worries about hyperscaler concentrations,
 NVIDIA says while that segments revenue more than doubled in the quarter,
 the everyone else bucket grew even faster at 138% year over year.
 Here is NVIDIA CEO Jensen Huang speaking with our own Jim Kramer on Mad Money last night.
 We're seeing AI being adopted all over the world.
 Every single country wants to get involved.
 Every country needs, every company wants to get involved.
 And so half of our business is in the hyperscalers,
 and the other half of our business is everything else,
 it's neoclouds and sovereign clouds and enterprise companies.
 And all of this is all growing at the same time.
 And this is all happening, of course,
 at a time when we're rolling out,
 Vera Rubin, our next generation product.
 It's going to be the fastest ramping product in our history.
 It's really exciting.
 All right, so among some of the other highlights from the report,
 the company continues to push back on fears of circular financing
 and says it spent $26 billion on buybacks and dividends in the quarter
 with more planned for the months ahead.
 This last quarter bought back 60%,
 and we're going to increase that going forward.
 So I think we're, we feel the same way.
 Buying back in video stock is a tremendous opportunity for us.
 All right, we're watching the reactions to Nvidia
 and the chip sector more broadly around the world.
 Let's now check in with our Karen show and Elaine U
 with the action from Europe and Asia and Karen.
 We're going to begin with you.
 Good morning, Dom.
 A lot of heavy lifting from the tech area here in Europe.
 The broader European stock, 600 index is actually trading in the red
 than about half of a percent and fairly early trade.
 There's those big blockbuster numbers though from Nvidia
 really providing a much-needed boost to the European tech stocks.
 Attention, of course, also turning to Fed Chair Kevin Warsher's speech
 from Jackson Hole, which accounts for some of the broader sentiment
 softness you're seeing today.
 It's just the DAX impulsive territory.
 But if you take a look at those European chip stocks,
 really basking in the glory of Nvidia's bumper set of the second quarter results
 and the upgraded guidance for next year that you're spelling out
 that 70% bounce in revenue.
 The likes of ST Micro, one of the big movers here in Europe,
 don't forget, it provides power management
 and sensing components for Nvidia.
 We're hearing from Jensen Huang about Vera Ruben.
 High intensity when it comes to power in that technology,
 ST Micro is seen as one of the beneficiaries.
 That stock up 4%, others also connected
 indirectly in the ecosystem all on the move today
 as well as some of the clean energy providers
 here in Europe back to you, don't.
 All right, Karen Cho, with the latest out of London there
 with the action on the chip side of things
 to the overnight action in Asia
 and our Elaine, you and Hong Kong with the latest there
 and the Nvidia ripple effects have pretty much gone global.
 That's right, Dom.
 So tech shares in Asia are mostly in the green
 after and videos results beat estimates.
 Let's start with Taiwan.
 The TIEX is up 0.3% top contract
 at Maker TSMC edge higher earlier,
 but it did close fractionally lower.
 Now Delta Electronics, another major
 Electronics manufacturer climbed 1%,
 an Apple supplier and smartphone lens maker
 Lagan precision, which partnered with TSMC
 to develop co-packaged optics for AI data centers.
 That surged nearly 10% as did Grand Petrochemical,
 which is another company that has partnered
 with a Japanese industrial gas maker
 to go into the semiconductor specialty materials.
 That also up 10%.
 Now, in terms of South Korea's reaction,
 the cost be climbed 1.5%,
 Samsung Electronics also up around that amount
 and SK Heinets up even more to 1.5% higher.
 In China, the tech heavy star 50
 climbed nearly 3.8%
 and we see the chip names benefiting as well.
 SMIC is up more than 2%
 and Hua Hong, the second biggest foundry after SMIC
 also climbing 4.5%.
 Let's look at the Chinese LLM developers
 listed in Hong Kong as well.
 Zat.ai, or also known as Jipu,
 surged 12% while its rival Mini Max
 is also up about 3.8%.
 But there's an outlier here.
 Japan's Nikkei 225 reversed early gains today
 to close in a little lower
 and the main drag is actually
 an Nvidia supplier advantage,
 which is down more than 3%.
 An analyst say that markets are still cautious here
 about the chip names,
 especially after a sharp rise in the first half.
 Back to you.
 All right, Elaine, you with the latest out of Hong Kong.
 Thank you very much for that.
 Join me now on set here as Dan Ives,
 partner and senior managing director
 over at Yorkville Ives and company.
 We obviously talked to you about all things tech these days.
 But Nvidia has been a company
 that you've keyed on for years at this point now.
 When you take a look at the results,
 we know what the numbers were,
 but it seems as though to me,
 Jensen Huang understood the assignment.
 We heard all of the quote unquote concerns
 about what Nvidia could do
 to even precipitate some kind of a stock drop
 and he addressed every single one of those concerns
 during the course of either the earnings release
 or the earnings call itself.
 Did it play out that way in your mind?
 Did he tick off all the boxes?
 Yeah, look, I think you could take that press release,
 print out and hang in the loop.
 Because to some extent, I mean,
 I think what Jensen saw is that he understood
 from a guidance perspective,
 the circuit of financing concerns.
 But Tom, I think the biggest thing is just demand.
 I mean, if you just look at the acceleration of demand
 that we're seeing in AI,
 no one has a better perch than Nvidia and Jensen.
 And I think it's almost all a jigsaw puzzle.
 You think about the hyperscalers
 and you think about some of the software companies
 I'd palantir, look at the memory players.
 But this was the Super Bowl.
 It's what does the Godfather of AI, Jensen and Nvidia say.
 And that's why this, it just puts more fuel
 in the tech rally going to the rest of the year.
 So the new concern might actually be
 that Nvidia cannot grow fast enough
 to satisfy certain investor expectations
 because it's said on the call
 that they could grow even faster,
 but for some supply chain constraints
 that are elsewhere down the system,
 is that something that we have to now worry about?
 Or do we feel as though there'll be
 an equilibrium reached over the course
 of the next few quarters or so?
 Yeah, it's great.
 Look, we don't think core equilibrium,
 you don't hit probably till early, 2029,
 maybe lead to on 28.
 Demand the supply today is called 12 to 1,
 you know, for chips.
 Because the reality for Nvidia,
 I mean, that it's a high class problem.
 Supply will clearly be an issue.
 Remember, this is without China.
 I mean, that's what's unbelievable about it.
 And I think if you look at the acceleration
 that we're seeing in demand, you put all together.
 Anyone that worried about monetization
 and circular financing,
 it comes down to what you enterprise demand,
 what does it look like?
 And that acceleration that you saw,
 I think that was really the explanation mark
 for the tech sector.
 All right.
 And just, if you just hold one second here,
 we've got a news alert right now
 with regard to some kind of headlines coming.
 This is coming from Politico, all right.
 They're saying that the Trump administration
 is weighing a new round of sweeping tariffs
 on semiconductor companies.
 The story goes on to talk a little bit about the detail.
 The administration is weighing that new round
 of tariffs on semiconductors.
 This is according to eight people familiar
 with the discussions speaking with Politico.
 The tariff approach, one tariff approach under consideration
 would dramatically expand the number of tech products,
 subject to duties, hitting not just chips,
 but potentially many of the goods made with them
 like laptops, gaming consoles,
 or servers that fill data centers.
 Interesting headlines coming out.
 This is at a time when there is a massively
 competitive dynamic developing between the US and China
 for tech and artificial intelligence supremacy.
 How exactly do you think the markets will take something
 like that into play?
 And what exactly is the administration thinking
 in your mind about why they would want to do this at a time
 when the US is trying to seek that dominance?
 Yeah, market will take in stride
 because it's a continued sort of shot across the bow
 that you're gonna see from the beltway.
 Look, the reality is is that US and China,
 they're in an arms race.
 And for the first time in 30 years,
 it's the US that actually has the lead
 because of Nvidia, because of what we see
 with the hyperscale is pounded here and others.
 But this is gonna continue to be the sort of tug of war
 that we go on.
 But the irony, and I think Jensen would talk about
 is that by not selling into China
 and you put these tariffs on,
 the one that ultimately wins is China tech
 in Huawei and what we see in terms of playing out in China.
 And now it's gonna be this balancing act,
 almost a quagmire that the administration's looking at
 because you don't wanna cut the knees off of big tech
 just like we see what's playing out in the market.
 All right, speaking of big tech,
 Nvidia's not the only story on our radar right now.
 We got other stories as well.
 Sales force, another Dow component reporting their results.
 Those shares up 11.5% earnings and revenue beat.
 It also boosted its full year sales
 and profit forecast as well.
 The company says it's expanding its AI partnership
 with Anthropic calling it quad force.
 And then by the way, there's meta platforms agreeing
 to pay as much as $18 billion over the next decade
 to settle lawsuits claiming it designed its apps
 to be addictive to children and teenagers.
 The company says it denies any wrongdoing
 and promises to tighten safeguards
 and usage limits as well.
 Meta platforms off one half of 1% in the pre-market trade.
 Sales force an earning story and outlook.
 Meta, a legal overhang being removed.
 How exactly do those two stories rate in your mind?
 Yes, maybe a little less than Nvidia
 given the market kept weight
 but they still have to carry some significance
 on tech investing sentiments.
 Goldilocks night for tech
 because sales force bending off back against the wall, right?
 And this was something very important to show.
 It's not just about chips, about software players
 that ultimately benefit from the AI revolution.
 So I think that that was a huge step forward
 that you saw there.
 Crowd strike another example on cyber security.
 Just showing that I'm second third fourth derivative
 is playing out across tech.
 And with Meta, it was a black eye moment, right?
 This was something that they definitely had to put
 this in the rear view mirror.
 That's another sort of positive for tech.
 You put this all together as a tech investor.
 You know, the bulls continue to sort of win.
 The bears, they're watching this from hibernation moon.
 They can find AI in the spreadsheets.
 And one last point here,
 we talked a lot about over the past year
 the SaaS apocalypse, this AI disruption of software companies.
 It doesn't seem as though it's playing out as much right now.
 And companies like Salesforce are trying
 to take advantage of it by partnering
 with companies like Claude and Anthropic.
 Does that help alleviate the fears
 and concerns about that SaaS apocalypse?
 Oh, clearly.
 And I think Pound Tier was another huge example of it.
 That was a fictional narrative.
 There will be software coming as distance mediated.
 But we continue to think and are, you know,
 go back to late 90s.
 It was one of the most head scratching sell-offs we've seen
 because ultimately software is going to be the part
 of the hearts and lungs of the AI revolution.
 All right, Dan Eips, you're going to stick around.
 Thank you very much for that.
 We're going to see you later on during the morning call
 crew when it assembles.
 We're going to hear more on metastatlement as well
 when the California Attorney General joins
 a squawk on the street in a first on CMBC interview
 at 10 a.m. Eastern time that's Rob Bonta.
 And then Florida's Attorney General weighs in
 on a CMBC exclusive on fast money at 5.30 p.m. Eastern time
 as well.
 A lot of top law enforcement officers in the states
 a lot more to come here on morning call including
 a cyber security stock surge for shares of Octim plus
 a peltz problem that has shares of Wendy's sinking
 ahead of the opening bill.
 And then later on, Lisa Cook responds
 to the president's latest attempt to unseat her at the Fed.
 We've got a very busy hour still ahead
 when morning call returns after this commercial break.
 A key September jobs report after the Fed's first
 rate hike in three years will the labor market show signs
 of cooling the new numbers and what they could mean
 for the economy, swap box Friday 8 30 a.m. Eastern
 and streaming on CMBC plus.
 Welcome back to morning call checking some of the big
 stock movers of the morning so far, Octa shares jumping
 around 20% after second quarter results top estimates
 as AI threats are leading to a spike in demand
 for identity security, Octa CEO telling CMBC
 that the opportunity is still very much in the early stages
 those shares up 20%.
 Urban Outfitters is lower despite reporting second quarter
 earnings and sales that were in line with expectations
 excluding one time benefits from tariff refunds.
 Stamestore sales led by its free people brand,
 which is solid wholesale growth in sales
 to specialty retailers and department stores
 is helping the case there,
 but Urban Outfitters down 3.5% pre market.
 HP is sliding as a drop in PC shipments
 and margins is overshadowing stronger revenue growth
 in the company's third quarter.
 Price increases were not enough to help HP offset rising costs
 for memory chips, those shares down 10%.
 And CrowdStrike is moving higher.
 Second quarter results beating forecast
 and the company is raising its revenue guidance
 for the year on continued demand
 for its cloud-based cybersecurity platform products.
 CrowdStrike shares up nearly 9% in the pre market trade.
 Well straight ahead on the show,
 the tiny trend in nuclear, getting a big boost
 from the Pentagon, but first, it's been a solid month
 for the market's eight of the 11 sectors in the S&P 500
 are in positive territory for August.
 Materials is the top performer up nearly 8% driven
 by a surge in precious and critical metals prices
 like gold, silver, and copper.
 The biggest gainer in the sector is Newmont,
 which is up more than 40% it's on track
 for its best months in September of 1998
 when it's soared more than 75% Newmont Corp
 just down about fractionally in the pre market trade.
 Morning call is back after this.
 A key September jobs report
 after the Fed's first rate hike in three years
 will the labor market show signs of cooling,
 the new numbers and what they could mean for the economy.
 Swat box, Friday 8.30 a.m. Eastern and streaming on CNBC Plus.
 All right, welcome back to Morning Call.
 A tiny new trend is taking shape around nuclear energy
 and it just got a big boost from the US government.
 The US currently has 94 existing nuclear reactors
 with each able to power around 1 million homes.
 But a lot of companies are looking to shrink down the size
 of these massive facilities
 like the ones you're seeing on your screen.
 Reactors that can fit on the back of a truck perhaps
 and power 500 to 1,000 homes, that's a big deal
 or even industrial and government sites.
 The US Army just yesterday selecting five companies
 to build these mini reactors at army bases
 across the country, including our next guests company.
 Tori Shivanandin is the president and COO of Radiant Nuclear.
 This is an interesting deal
 because you went through a competitive bidding process
 which implies that there are a lot of competitors out there
 who are trying to do this kind of thing.
 You were one of the companies selected
 to provide these small modular nuclear type facilities
 for an army base in particular.
 How big of a deal is a $750 million contract
 to a company like Radiant?
 I'm very excited to be here to talk about this deal.
 I'm Tori Shivanandin, president and chief operating officer of Radiant.
 What do we make? We make one megawatt
 microreactors transportable by land currency.
 And yesterday we awarded $750 million for 15 reactors.
 That's almost one third of the overall Janus project budget.
 And when I think about it,
 what is the big deal here?
 It's that the army has come out and said
 not only do we need nuclear, but we need it in a new way.
 Not only do, you know, when I think of SMRs,
 I think of them as a false category.
 A five megawatt reactor might be as big as a Walmart.
 That's not small.
 And it's certainly not modular.
 In the way that Radiant has prepped our product,
 Kaleidos, which just shipped our development unit
 to the Idaho National Abdom last week,
 it's that the entire unit can fit on a truck
 and a customer needs that.
 If you think about what it takes for a customer to buy energy,
 the asset that they're procuring,
 we can talk a lot about the state of the American energy grid,
 but you have to keep it really simpler for customers.
 And that is a reactor in a box.
 So a reactor in a box is even smaller than some of the concepts
 that people have been dealing with,
 with regard to how to power America's energy future.
 The US military wants these
 because they want independent power sources
 and the availability for access to power
 at each one of their bases.
 It could be a continuity issue.
 It could be a strategic issue.
 I wonder though, from your standpoint,
 this is the beginning of something that could grow bigger.
 What exactly is the use case for these types of products
 and what types of industries would you then move on to target
 now that you have a military feather in your cap?
 Yes, so if we talk about the American grid,
 it's really the whole use case here.
 You have generation, transmission, and utilization.
 And 45% of Americans had one power outage minimum last year.
 For a business, that can be catastrophic.
 And the Army is staring this problem straight in the face.
 And I'm very grateful for Dr. Jeff Waxman
 and the DIU director, Owen West,
 for taking a bold and fearless stance
 on how to solve this problem.
 And what we're at radiant, what we do with the reactors
 that we solve generation and transmission on the customer site.
 And for a military base, that can be everything
 from critical infrastructure.
 It can be to backup assets.
 Or it can also just be to keeping the lights on in hospitals
 and the grocery stores as many American military bases
 are large municipalities.
 But the military has energy issues here in the US
 and also abroad.
 And this bold leadership and this bold award
 are really about saying, hey, America knows we need nuclear.
 It's been a topic of conversation for a while now.
 But how we need nuclear, that's what's different
 about what we're doing here.
 We do this.
 It's an interesting juxtaposition having you here with us
 right now on the heels of NVIDIA's earnings report.
 Because much of that nuclear discussion around power
 has been around powering AI data centers.
 How exactly does that factor into your future business calculus?
 Yeah, so what I like to say is radiant is power in a box.
 However, you can use it is the real use case.
 So data centers are absolutely a part of our future.
 However, there's also 70% of the US energy market
 that aren't related to data center energy use.
 And that's a fantastic customer that also needs nuclear today.
 Energy prices continually increase.
 And it's not for lack of trying.
 It's that the system itself is broken.
 And we need to create products.
 And nuclear will be a part of the solution.
 Collidos, we'll have thousands of them one day,
 where we're addressing both generation and transmission.
 And so be at a data center, absolutely,
 or a grocery store, a hospital.
 Anyone that needs energy can use a collidos reactor.
 All right.
 Tori, Shivan Andin, thank you so much
 at Radiant, the president, and COO.
 We appreciate it, and thanks for joining us.
 Thank you very much for having me.
 I'm really excited about the future.
 All right, let's go.
 Let's still on deck for the show here.
 Reaction to Bill Gates and his dire AI warning
 and why some CEOs are pushing back
 on predictions of massive job losses
 across the global economy.
 Morning call continues after this.
 We have to do a better job of technology industry.
 The builders, and have to do a much better job
 working with the communities to get prepared
 for this AI infrastructure buildup.
 Taking a step back.
 This is America's great opportunity.
 This is an extraordinary opportunity.
 AI data centers, AI factories, are generate so many jobs
 all across America, hundreds of thousands of jobs.
 They're improving communities because they're bringing
 a lot of tax dollars and bringing a lot of economy
 into communities.
 I'm Dominic Chouin from Oregon, Brennan.
 Welcome back to morning call.
 We're going to start with US equity futures,
 which are somewhat mixed right now,
 although just slightly negative for the Dow.
 The S&P is still up about 29 points
 and plotted the opening bell.
 The tech heavier Nasdaq trade up about 330 points.
 Now the big stock story of the morning
 of course driving that tech trade is in video popping.
 Ahead of the opening bell,
 after an initial post earnings dip,
 the chipmaker out with its biggest revenue beaten two years,
 it's also guiding a full year out,
 seeing revenue growing by an estimated 70%.
 The next year, even with constrained supply chains
 versus estimates calling for a 44% rise.
 Now look at some of the other chip names
 on the back of NVIDIA's results
 and a report from Politico that the White House is weighing
 a new round of chip sector tariffs
 right now broadly to the upside here.
 Broadcom, advanced micros, Samsung, Taiwan,
 SMA, ASMR, all up roughly one to two percent
 in trading so far.
 Checking some of this morning's latest headlines now,
 Fed Governor Lisa Cook pushing back on President Trump's
 renewed threat to remove her from the central bank.
 A lawyer forecooked telling the White House
 in a five-page letter that allegations of mortgage fraud
 against her quote unquote remain unfounded and untrue.
 Noting that President Trump and other administration officials
 including Treasury Secretary Scott Bessent
 and Attorney General Todd Blanche
 have been accused of similar conduct in the past.
 NVIDIA has agreed to buy hugging face
 for around $13 billion according to multiple reports,
 the apparent deal for the open source AI model hub
 would give NVIDIA a strong position in that AI space.
 The deal reported it comes with about a month
 after hugging face was hacked by an open AI model
 that went rogue and broke out of its confines.
 And shares of Wendy's are sinking following a Reuters report
 that Nelson Peltz's tri-end fund management
 has no current plans to make a bid for the burger chain.
 The report says that tri-end has concerns
 about Wendy's performance and its current strategic direction
 as a result those Wendy shares off about 13%
 in the pre-market trade.
 Now we continue to track the fallout from Bill Gates' AI warning
 while he still sees the promise of AI.
 Gates is now shifting his tone saying
 the tech industry has crossed dangerous thresholds
 without proper guardrails.
 Gates highlighting key risks including mass job losses
 and increase in geopolitical and cyber security threats
 and psychological and educational harms as well.
 Gates is proposing potential solutions
 like taxing AI tokens and robots
 and designating certain jobs as quote unquote human reserved.
 Now speaking on CNBC yesterday andthropic CEO Dario Amade
 addressed worries about job losses tied
 to artificial intelligence specifically
 on that aforementioned in the show SASPocalypse Trade.
 We're not interested in destroying anyone.
 We think of this as a very positive something.
 That's the way markets work.
 We're creating new value here.
 And the question is just, it's not about destroying anyone.
 It's about how much of these enormous gains
 go to various people and various companies.
 All right, joining me now is XIE partner at offline research
 and a former engineering leader at both Google and Microsoft.
 This is an interesting conversation
 because what we have right now is a scenario
 where we know that there are issues with AI,
 it's deployment and there is no real plan.
 We are just trying to push full steam ahead.
 Is this going to be something that we have to
 pay more attention to and will it be enough
 to start putting more guardrails in place
 on a more formalized basis?
 So I think right now the place that we're at with AI
 and what Bill Gates was calling out in his letter
 is that we're at a moment where we have to ask ourselves
 are humans more important than the machines that we've created.
 And if we are, how much more important?
 What Bill Gates calls out in his letter
 is that in the next 10 years
 there's going to be massive disruptions to employment
 and to the system through which we exchange value
 in society, right now humans access resources
 through exchanging their labor for value
 that they use to pay for things like water, housing, et cetera.
 So if we don't have a plan and we continue moving forward
 at this pace according to him and his letter,
 what'll end up happening is we'll end up with less jobs
 than we create and end up in a position
 where we have no system of value exchange
 to support those humans actually accessing those resources.
 So he calls out folks who are already having a hard time
 having access to those resources
 are the most vulnerable with these systems.
 And so moving forward, how do we solve this?
 We do have to think about regulation in a formal way,
 the same way we did with cars.
 We can split that up in three parts.
 One, how it's built.
 We understand that if a car is built in a faulty way,
 the manufacturer is at fault, we should have that for AI as well.
 So if AI gets out on the market
 that can be used to become a bio weapon,
 the manufacturer should have some liability there.
 We regulate cars in the way that we use them, how we drive.
 If I speed through a red light, I get a ticket.
 What happens if someone uses a model to do something bad
 should be the actor's fault.
 And then the last thing is we intentionally assign liability
 in cases where responsibility overlaps.
 So if I run into the back of you,
 it's my fault in the car accident.
 So if two models end up hacking a system
 or messing a transaction up, how do we assign that liability?
 And if we look at it across all of these domains,
 medicine, education, finance, et cetera,
 that he calls out his high risk,
 taking that approach, we can find a quick way
 to start implementing guard rails
 that don't slow down innovation,
 but allow us to put some human protections in place.
 Now, that sounds fine and dandy,
 but you're talking about a closed ecosystem,
 say like one country.
 We now have multiple countries and two in particular
 in the US and China, who have maybe very different views
 about how to regulate and develop
 and at what pace and speed to do this at.
 If there is any way to make those things,
 I guess more of a consensus type decision,
 that would be great, but we know fully
 that human nature is not gonna be like that
 and governments aren't odds with each other.
 So how exactly then do you solve that problem
 if all of these countries want supremacy on their own?
 Well, I think the challenge here is not about supremacy
 in so much as it's about what are the rules
 that we agreed to by which we fight?
 I mean, technically, we could go around dropping nuclear bombs
 on each other, but there are rules of engagement
 that we've agreed to as humanity
 because we place our value as a species
 over values of powers of individual collectives or governments.
 And so we have to make those agreements now.
 Are we going to allow countries to use AI
 to develop designer bio weapons?
 It's been called out already in research papers this year
 that were published in Frontiers in Microbiology
 that AI can be used to accelerate the next pandemic
 because it can generate multiple viruses simultaneously
 and release wave after wave of infection.
 And so we have to come up and be realistic
 that yes, this technology can help us send emails faster.
 It can also help us create new vaccines
 for cancer as we're seeing.
 It also, we have to address its shadows
 and the capability that can be there to be abused.
 Part of that looks like assigning explicit liability
 and consequences, not just pointing a finger
 and saying, hey, hugging face, you know, or skit,
 you know, hey, Claude, you hacked hugging face.
 Great headline.
 No, there needs to be financial liability
 and other countries are leading in that way.
 We see Europe doing it.
 We can pull from them.
 Now, in the open source AI race
 and talking about innovation and regulation balance,
 China actually has stricter AI laws in the United States
 and arguably is remaining toe-to-toe with us
 in the open source race.
 Now, America is in the AI race.
 Now, America is not behind in the open source race.
 We're competing simultaneously, open source and closed source,
 where you see open AI releasing jalapeno and their chip.
 You have Nemo-chon releasing,
 Nvidia releasing models with Nemo-chon.
 And so we're competing on both fronts,
 simultaneously, especially with Nvidia just purchasing,
 being rumored to have purchased hugging face.
 And so we're competing on all these fronts simultaneously.
 China has demonstrated already that there can be
 certain levels of boundaries along that framework
 around documenting frontier risk,
 making sure that you're testing your models
 and still remaining competitive.
 And I think we have some lessons to learn.
 All right.
 It's a doctoral dissertation for sure.
 And by the way, we'll save the discussion next time
 for the use of AI and humanoid robots.
 That's a whole other fiasco that could be brewing as well.
 XIE, thank you very much.
 We appreciate it.
 We'll see you soon.
 Cheers.
 All right.
 An update now on that tragic story
 from the Paul China border.
 Officials there now say the death toll
 from the massive flash floods has climbed to more than 160.
 More than 1,300 people, including 65 from the United States,
 are still missing.
 The US Geological Survey says a glacial collapse
 is likely the source for the disaster.
 We will continue to follow the latest developments
 on that story, but thoughts and prayers
 to everybody affected by that Nepal-China flood situation.
 Well, a lot more to come here on warning call,
 including shares of China's Ziedad AI,
 taking off on the back of its new model apparently,
 running only on homegrown China chips.
 We're live in Beijing with a look at what it could mean
 for the country's efforts to solidify its position
 in the aforementioned global AI race.
 Morning calls back after this.
 Welcome back to morning call, another potential deep-seek moment
 for the AI trade.
 This morning shares of Chinese AI lab ZAI
 are surging after it claims its latest model
 runs on 100% Chinese chips
 and what is now the latest sign of China's efforts
 to ramp up homegrown computing capabilities.
 Our Eunice Dune joins us now from Beijing
 with the latest on that story, Eunice.
 Thanks, Tom.
 Well, the model is called GLM 5.3 Flash
 and this is the very low-cost version of ZAI's flagship AI model
 and the claim is that this model only runs on Chinese-made chips.
 So all the online traffic globally,
 the company says, is running on 100,000 Chinese chips.
 The Chinese company did not say which local chips they're using,
 but the share prices of some of the local GPU
 and CPU makers surge today.
 Hygon was up by 6%, more threads was up by 3%.
 And analysts say that Huawei's ascend is also
 likely in the mix.
 Now, the claim has sparked a lot of discussion
 around a term that translates to decoupling
 from Nvidia in inference.
 And people have been speculating, feeling very proud,
 wondering if China is getting closer and closer to a point
 when they are able to not only dominate
 when it comes to inference, but also be able to use Chinese chips
 when it comes to training.
 So they're saying there's a term that's, as I said,
 decoupling from Nvidia in inference
 and another one decoupling from Nvidia on training.
 And that's because running a model,
 Tom, takes a whole lot less computing power than training.
 And so we're going to probably get more information
 from ZAI next week when it releases its earnings
 for the first half of the year on Monday.
 All right, continuing the AI trend in today's news cycle.
 Thank you very much, Unitsune, live in Beijing
 with the latest there.
 Straight ahead on the show here,
 the morning call crew assembles,
 teaming up the training day ahead
 and fresh momentum for the AI trade on Nvidia's
 blockbuster quarter coming up.
 All right, welcome back time now for your call sheet,
 where we look at the topics driving the training day ahead.
 The crew members assemble today
 are Dan Eyes of Yorkville Lives, Michelle Caruso Cabrera
 of MCC Global Enterprises and Steve Grasso of Grasso Global.
 Michelle and Steve are both CMBC contributors.
 Now our first topic for the discussion today
 has to be in video because it's the primary driver
 in the stock market story per se.
 We just heard about the decoupling
 that China is trying to make from Nvidia
 or the kind of thematic that's developing there.
 We also heard earlier on about this political story
 that the Trump administration is weighing tariffs
 on certain semiconductor type products.
 Michelle, I'm gonna start with you on this one here.
 Nvidia is by far the most important company in the market
 because of its market cap and its influence.
 How much do we have to worry about some of the kind of
 I guess siege that's being laid to Nvidia
 because everyone wants to try to chip away at its dominance?
 So we have news that China is trying to be completely self-reliant
 when it comes to AI.
 The United States is trying to do the same.
 Politico has a story that you reported on earlier
 that the US administration is considering imposing tariffs
 on semiconductors coming into the United States.
 Why?
 Because they want them produced here.
 If this is going to be the future use of war
 and this is an important element of conducting war
 and competition, they want them produced here.
 So is it gonna be costly?
 Yes it is, but it can be done.
 I was part of a delegation
 of the council and former relations that went to the TSMC
 production facility in Arizona and it can be done.
 It's just expensive and you've got to be committed.
 There's got to be a strategic tilt
 and the US has to change.
 It's got a mentality, right?
 To want to do this and the Trump administration
 because it's in the name of national security.
 For the long term as well.
 Steve, you saw the results from Nvidia.
 We've heard some of the macro factors at play
 is Nvidia a stock that deserves to be up 7% this morning.
 It was relatively flat since the last quarter
 and how much more upside do we think it has?
 Yeah, so the setup was perfect for Nvidia.
 The stock had sold off 9% or 10% into the print
 and everyone knew the stats that six out of the last eight
 quarters, they had a stellar beats
 but then the stock did not perform after the fact.
 So everyone was hedging their bets against that.
 Hoping the shorts were hoping it would fail again
 and we didn't get that.
 Market always sets up to hurt the most amount of people
 at the very same time and that's what we saw
 and that's why you see this whip lash back in Nvidia.
 But Nvidia, this is a big week last week
 we heard from retailers.
 This week we hear from the micro
 from the micro economic front which is Nvidia
 and then we have macro at Jackson Hole.
 Market's looking for a reason to stay on track
 into rally obviously, you know, Dan's an expert on this
 and Nvidia has tremendous amount of competition
 that competition is scaling but for now
 and Nvidia's still hitting it out of the park.
 All right, you know, it's funny.
 One of my old bosses on Wall Street Dan
 back in the day said, same thing Steve said.
 Markets do tend to gravitate towards
 where the most pain is at some point.
 Now that we've kind of cleared the decks a little bit
 with regard to the tech and AI trade,
 where exactly is the pain right now?
 Is it the fear of missing out on potential upside
 or is the pain going to be, hey,
 maybe this is enough to sell the news?
 I think Grasso now that in terms of just the narrative,
 look, the reality is it's a jenga puzzle
 and you put it together, think about the hyperscalers,
 then when we saw from the memory players,
 now we see from the Godfather of AI, Jensen and Nvidia,
 the demands accelerating.
 I mean, we think demands accelerate 20% even
 the last three months.
 So I think the pain investors are gonna feel it.
 They're on the side ones, you know,
 the bears have scared many, you know,
 periods over the last few months.
 And I think this just shows.
 In the AI party, it started 9.30 pm.
 It's about 11.30 pm now.
 That party goes to 4 a.m.,
 and I think a lot of investors don't want
 to miss out on that party.
 Okay, all right, so the after party's going Michelle.
 You know, when it comes to investor sentiment,
 Nvidia is crucial, right?
 We all wait every quarter.
 So he's first, do no harm.
 The numbers when they first come out, okay,
 these are good enough so that we don't have a sell off.
 And then with the announcement of 70% expectation
 for revenue increase, year over year,
 I mean, that's the party still going.
 So this is certainly gonna help market sentiment,
 certainly no harm.
 Where is Dan for you for this one?
 Where is going to be the most direct ecosystem effect
 from Nvidia?
 We can talk about other chips,
 we've been flashing them all show,
 but are there certain particular areas
 that will be able to capitalize on this massive forecast
 for 70% revenue growth in the country in the year?
 I think it's hyperscaler and software.
 So when you look at the hyperscalers
 from Microsoft, for Alphabet, for Amazon,
 you see on the software side,
 relative to Palantir, many of those names,
 cyber security, okay, CrowdStrike,
 this speaks to the second, third, fourth derivative,
 now playing out.
 Investors are figuring out,
 scan to where the puck's going,
 that's where they're gonna be focused
 on what the next trade is.
 All right, so those are the factors
 that play with Nvidia,
 but of course Jackson Hole is coming up,
 tomorrow is the big speech from Kevin Worsh's chair,
 Steve, how are the markets set up for Worsh?
 And do we really care that much?
 Nothing real policy wise comes from Jackson Hole really ever.
 Yeah, and the market was set up
 from Chair Powell to here,
 just a sipping from a fire hose
 with all the information and all the transparency.
 And the truth is the market just sort of led the Fed
 instead of the other way around.
 And Worsh just wants to trickle that information out
 and let the market do its own thing
 versus the Fed leading them there,
 because truth is all that information
 just backs the Fed in the corner.
 You can't raise rates, you can't cut rates
 if the market already knows
 and has led you around by your head
 about where the market should be.
 So I think it just becomes more valuable information,
 but the market is going to put rates in the background
 where at all time highs,
 semiconductors are performing,
 tech is performing, the market is performing.
 Michelle, what do you think Fed Chair Kevin Worsh needs to do
 and or wants to do at Jackson Hole?
 Well, first in a new sense,
 this is the first time we're gonna hear from him
 since Bessent intervened in the curve, right?
 Does he say anything about that?
 Does he look past that?
 I mean, that's a big mystery at this point.
 The theme of the conference is financial innovation.
 You could, in theory, argue that all the money being raised
 by all the hyperscalers has crowded out the US government
 when it comes to raising money.
 I mean, do these two stories converge?
 Now, that's me speculating.
 Does he say anything about that?
 Other people have speculated as well,
 but they have been sucking up a lot of demand
 within fixed income.
 Is it gonna be a problem, Dan?
 All the issuance raised for debt for these hyperscalers?
 I think as Michelle Shoes does, she puts it together
 because I think that's to reality when it comes to tech
 because look, 20% of the data center
 in the CapEx buildout is gonna be debt driven
 and that speaks to right now this, you know,
 it's a tug of war that you're seeing play out,
 all eyes on Jackson Hole,
 but I just continue to think the tech trade,
 this is not stopping it.
 All right, a lot more to go here,
 but we've run out of time.
 Steve Grasso, Michelle Cruzacarera, Dan Ives,
 thank you very much for being part of the crew today.
 We appreciate it, guys.
 All right, well, markets are big,
 especially on the tech side of things.
 Keep an eye on that NASDAQ trade up 300 points
 applied to the bell.