微软全球宕机致业务受阻，NVIDIA高管离职引发中美芯片博弈

YESTERDAY IT WAS NVIDIA, TODAY IT IS MICROSOFT. IT IS ONE TOUGH WEEK FOR THE TECH TRADE. AT LEAST IT IS FRIDAY. I'M VONNIE QUINN, ISABELLE LEE IN FOR DANI BURGER. THIS IS BLOOMBERG "OPEN INTEREST." VONNIE: COMING UP, MICROSOFT RACES TO RECOVER FROM A MAJOR OUTAGE THAT IS DISRUPTING THE USERS AROUND THE WORLD. ISABELLE: INVIDIOUS CRISIS SETS UP A U.S.-CHINA CHIPS SLOW DOWN AS TRUMP AND XI ARE PREPARED TO MEET NEXT WEEK.

VONNIE: FUTURES PREPARED TO CLIMB. BOSTON FED PRESIDENT SUSAN COLLINS WILL JOIN US FOR AN EXCLUSIVE INTERVIEW. ISABELLE: LET'S TAKE A LOOK AT SOME OF THE STOCKS TO WATCH. FOR NOW IT IS NVIDIA. THIS IS THE BIG STORY OF THE DAY AND C SHARES TAKING A STOCK SEEING RELIEF, BUT THAT IS AFTER A HUGE SELLOFF YESTERDAY. AFTER SINKING AS MUCH AS 14%, MAYBE INVESTORS ARE TREATING THE TURMOIL AS COMPANY-SPECIFIC. FULLY BACK ONLINE.

WORKING AFTER ONE OF ITS LONGEST YESTERDAY, DISRUPTING ONLINE THIS WOULD BE A MAJOR PROBLEM FOR MICROSOFT. ISABELLE: THIS IS A LOT OF -- A TOPIC A LOT OF TRADERS ARE TALKING ABOUT. YOU ARE THINKING GOVERNMENT AGENCIES AND BUSINESSES. LET'S DISCUSS THIS OUTAGE WITH ED LUDLOW. WHAT IS THE REASON BEHIND THIS AND WHAT IS TAKING SO LONG TO FIX THIS? ED: THE REASON BEHIND IT IS THERE WAS A CORE PROCESS ON A SPECIFIC SET OF SERVERS THAT BECAME OVERWHELMED, AND BASICALLY THOSE SYSTEMS STOPPED RESPONDING.

ONE OF THE SOLUTIONS MICROSOFT CAME UP WITH WAS TO REBOOT THE SERVERS AND THAT PROCESS IS ONGOING. THE UPDATE IS THAT MICROSOFT IS STILL WORKING TO FULLY RESTORE OUTLOOK AND THE OTHER PLATFORMS IMPACTED, LIKE TEAMS IN SHOCK -- IN SOME JURISDICTIONS. IN NORTH AMERICA THEY REPORT IMPROVEMENT. IN ASIA AND PACIFIC THEY ARE -- THERE ARE ENCOURAGING SIGNALS. SPARE A THOUGHT FOR THE I.T. MANAGER ANYWHERE IN THE WORLD AND THE IMPACT ON GLOBAL WALL STREET.

SO INTERESTING, BECAUSE YOU TAKE THE EMAIL AWAY, THE BLOOMBERG REPORTING THAT IN JAPAN THEY WENT BACK TO FAX TO TRANSMIT. IF YOU ARE WATCHING, A BLOOMBERG TERMINAL CLIENT, DID YOU SEND A FACTS? THAT IS THE REAL TERM -- REAL-TIME IMPACT THIS OUTAGE IS HAVING. IT IS PROBABLY THE BIGGEST ONE IN MY SHORT LIVING MEMORY SO FAR. VONNIE: SUMMER EARNINGS HAVE HAD BEEN -- HAVE BEEN DELAYED. SOME EARNINGS CONVERSATIONS ARE NOT BEING HAD.

PPH, FOR EXAMPLE, SOME PEOPLE HAVE THEM YET. ED: THEY WERE GOING TO DO WORKFORCE REDUCTION IN THAT PARTICULAR CASE STUDY AND NOW THEY CAN'T BECAUSE THE EMAILS CANNOT BE SENT OUT. ON A SERIOUS NOTE, IN THE UNITED KINGDOM THE NATIONAL HEALTH SERVICE WAS IMPACTED IN A OR POSTPONED. CLINICAL WORK WAS ABLE TO CARRY ON. PREMARKET. THAT IS MORE OF A SEVERE DECLINE FOR MICROSOFT THEN WE SAW IN THE AFTERMARKET YESTERDAY. WE ARE NOW HERE ON FRIDAY MORNING.

IT IS A GLOBAL OUTAGE. THE EFFECTS OF IT ARE REAL. VONNIE: ED LUDLOW. JEN-HSUN HUANG'S EXIT IS FORCING INVESTORS TO RECALIBRATE THE CHINA-U.S. AI RACE. HERE IS HOW DAN IVES IS LOOKING AT THE RACE WITHOUT JENSEN HUANG IN THE PICTURE. DAN: TWO OR THREE YEARS AHEAD OF ANY COMPETITION IN THE U.S. WITH JENSEN HUANG RON THAT EVENS THE PAIN -- THE PLAYING FIELD. FOR WHOEVER THE NEXT CEO IS, THAT IS GOING TO BE THE CHALLENGE.

I BELIEVE A TIM COOK, THERE ARE OTHERS, EXTERNAL CANDIDATES BECAUSE OF HOW IMPORTANT IT IS. VONNIE: THE CONVERSATION CONTINUES AROUND SUCCESSION AND LOTS MORE. BLOOMBERG SENIOR EDITOR MIKE SHEPARD JOINS US. MIKE, I WANT TO DRAW YOUR ATTENTION TO SOME COMMENTS THAT SCOTT BESSENT MADE IN THE LAST HOUR, SAYING TREASURY AND LOTS OF OTHER DEPARTMENTS, INCLUDING STATE AND DEFENSE, WANTED TO BLACKLIST MEGASPEED FOR MONTHS, BUT IT WAS CONGRESS' DECISION AND THEY DIDN'T DO IT.

HE SEEMS TO BE DISTANCING HIMSELF FROM HOWARD LUTNICK, IF NOT HANGING HIM OUT TO DRY. MIKE: VERY MUCH SO, AND WE READ AS MUCH INTO THE COMMENTS AS WE WERE TRACKING THEM IN REAL TIME. IT WAS STRIKING TO SEE HIM AIR THIS PUBLICLY AND LAY OUT THAT, LOOK, THE ADMINISTRATION HAD PLANS OR DISCUSSIONS TO PUT ON AN ENTITY LIST THAT WOULD BAR IT FROM DOING BUSINESS WITH ANY U.S. COMPANY. THAT IS THE COMPANY WHERE ALICE WONG HAD WORKED, AND THAT FIRM IS ALSO UNDER U.S.

INVESTIGATION FOR POSSIBLE EXPORT CONTROL VIOLATIONS. THE FACT THAT THE ENTITY LISTING WAS HELD UP HAS RAISED NEW QUESTIONS ABOUT HOWARD LUTNICK'S COMMERCE DEPARTMENT. HE IS ALSO FACING SOME UNCOMFORTABLE QUESTIONS NOW FROM U.S. LAWMAKERS. THEY HAVE SUMMONED HIM FOR A HEARING. WE HAVE SEEN TIM SCOTT, THE HEAD OF THE BANKING COMMITTEE, ASKING THE COMMERCE SECRETARY TO SHOW UP FOR A HEARING NEXT MONTH. THE COMMERCE SECRETARY, HOWARD LUTNICK, SAID HE HAS AGREED TO APPEAR, BUT THERE WILL BE A LOT MORE PUBLIC AND AWKWARD QUESTIONS FOR HIM TO ANSWER ABOUT HOW THEY HANDLED EXPORT CONTROLS, WHETHER THEY LOOKED THAT WAY IN CERTAIN EXPORT CONTROL INVESTIGATIONS AND WHETHER THEY GAVE JEN-HSUN HUANG A PASS IN TRYING TO PUSH FOR A RELAXATION OF RESTRICTIONS THAT ALLOW THE COMPANY'S H 100 CHIPS -- CHIPS TO BE SOLD TO CERTAIN CHINESE CUSTOMERS.

ISABELLE: I FEEL LIKE THAT IS THE MOST UNEXPLORED ANGLE. THE CONTROVERSY HAS BEEN INTERTWINED WITH U.S. NATIONAL SECURITY AND THE GOVERNMENT'S ABILITY TO POLICE THESE CHIPS. YOU THINK THIS WILL GIVE CONGRESS LEVERAGE TO BECOME MORE TOUGH WHEN IT COMES TO THEIR CHIP EXPORT CONTROLS? MIKE: LAWMAKERS ARE CERTAINLY SEIZING ON THE EPISODE OF THIS WEEK TO REALLY TRY TO ACCELERATE THEIR PUSH TO GET THREE DIFFERENT MEASURES IN DENYING CHINA ADVANCED TECHNOLOGY BEFORE THE END OF THE YEAR.

ONE OF THESE WOULD RESTRICT CHIP SALES OVERALL. ANOTHER ONE WOULD RAIN IN SOME SMUGGLING IN THE VERSION OF THE CHIPS THAT NEWS REPORTS AND GOVERNMENT INVESTIGATIONS HAVE TURNED UP. FINALLY, IT WOULD ALSO SEEK TO DENY CHINA ACCESS TO MORE OF A SEMI MANY EQUIPMENT THAT IS PRIMARILY MADE BY ASML, THE JUDGE-BASED PIONEER IN THE MOST ADVANCED SEMICONDUCTOR-MAKING MACHINES. DENY CHINA ACCESS TO THAT SO THAT ITS HOMEGROWN SEMICONDUCTOR COMPANIES WILL NOT BE ABLE TO GAIN GROUND ON NVIDIA AND OTHER AMERICAN LEADERS.

ISABELLE: MIKE, THANKS FOR KEEPING US ON TOP OF ALL THINGS WASHINGTON AND NVIDIA. TREASURIES CLIMBING AFTER PPI CAME IN COOLER THAN EXPECTED FOLLOWING A HOT CPI PRINT EARLIER THIS WEEK. JOINING US NOW TO DISCUSS THAT AND MORE IS BLOOMBERG MACRO STRATEGIST MICHAEL BALL. TALK TO US ABOUT THE TRADE THIS WEEK SO FAR. HONESTLY, IT HAS BEEN SUCH A LONG WEEK. ARE YOU SEEING DIP BUYERS COME BACK AGAIN?

WE SAW THAT MONDAY WITH THAT MASSIVE MOVE, AND WE SAW A STALL TUESDAY AND WEDNESDAY. YESTERDAY, EVEN WITH THE NVIDIA NEWS, MASSIVE STOCK BUYING OF THAT NAME PARTICULARLY, BUT ALSO MORE BROADLY AND SECTOR-SELLING, WHICH IS WHY THE INDEX ITSELF WAS MORE MUTED, WHEREAS THE UNDERNEATH TURN WAS BIG. I THINK PEOPLE ARE JUST HAVING NVIDIA. IT IS THE OPPORTUNITY OF A LIFETIME VERSUS HOW MUCH IT HAS DRAWN DOWN VERSUS THIS WINDING OUT OF THE FED TO BED.

OBVIOUSLY INTEREST RATES HAVE PICKED UP. 30 BASIS POINTS ON THE WEEK. VONNIE: A SIGH OF RELIEF. MICHAEL: IS OBVIOUSLY WHAT THE FED LOOKS AT, WAS WEAKER THAN EXPECTED. NOW IT IS TRYING TO MODEL OUT TO AGAIN ON THE MONTH, WHICH IS IN LINE WITH THIS WALL OR TARGET, BUT AT LEAST IT WAS NOT OVER. IF IT WAS A STRONGER PPI DEFEAT WOULD HAVE BEEN STRONGER AND WE WOULD HAVE HAD TO CONTINUE TO SELL OFF IN TREASURIES AND BE A HEADWIND FOR BROADER RISK.

VONNIE: IT HELPS WITH FED CREDIBILITY AS WELL. MICHAEL, THANK YOU SO MUCH. MICHAEL BALL WILL BE BACK WITH US LATER. IN THE NEXT HOUR WE HAVE A -- WE HAVE AN EXCLUSIVE INTERVIEW WITH SUSAN COLLINS AS WELL. A CHECK ON MARKETS. WE HAVE FUTURES POINTED HIGHER TODAY. WE DEFINITELY HAVE S&P FUTURES AND NASDAQ 100 FUTURES, MANY OF THE STOCKS THAT MOVED YESTERDAY ARE REVERSING TODAY. IF YOU GAINED YESTERDAY, YOU ARE LOSING TODAY, BUT NOT MASSIVE MOVES.

FROM MICROSOFT. TAKE A LOOK THERE AT THE TREASURY YIELDS CURVE. WE HAVE THE 10-YEAR YIELD JUST ABOUT UP A BASIS POINT AND A HALF. THE LONGER END ADDING A COUPLE OF BASIS POINTS IN TERMS OF YIELD. AT THE FRONT END WE ARE TAKING OUT EVER SO SLIGHTLY THOSE INTEREST RATE EXPECTATIONS. GOLD, 38 HUNDRED AND CHANGE, AND BITCOIN IS BELOW $70,000 A COIN IF THAT IS