Huawei AI Chips Contain Advanced Parts From Rivals | Bloomberg Tech 10/3/2025

Key Concepts

• AI Chips & Supply Chain: Huawei's use of sanctioned components, China's domestic AI chip production challenges, competition with NVIDIA.
• AI Valuations: Justification of high valuations, diversification beyond NVIDIA and OpenAI, adjacent industries benefiting from AI.
• Government Shutdown Impact: Limited impact on the tech sector due to AI enthusiasm and deal flow.
• Portfolio Diversification: Importance of diversification in the AI trade, rebalancing portfolios, and allocating to adjacent sectors.
• Rivian Safety Concerns: Reworking manual door release due to potential safety issues, comparison to Tesla's door design revisions.
• Perplexity AI Browser (Comet): AI-native browser competing with Google Chrome, user engagement metrics, monetization strategy (subscriptions, Comet Plus).
• AI-Generated Misinformation: OpenAI's video creation tool and the risk of misleading videos, watermarking challenges.
• China's Investment Proposal: China's attempt to lift national security restrictions on Chinese deals in the US in exchange for a massive investment package.
• Data Centers & AI Infrastructure: BlackRock's potential acquisition of Aligned Data Centers, the growing need for data center infrastructure to support AI.
• European Tech Ecosystem: Challenges in building significant tech businesses in Europe, the need for capital formation and risk-taking.
• Vercel & AI Cloud: Vercel's AI Cloud offering, growth metrics, and response to controversy surrounding CEO's meeting with Benjamin Netanyahu.
• Taylor Swift's Album Release: Domination of charts and social media, promotional strategy, and commercial impact.

Huawei's AI Chip Supply Chain

• Main Point: Huawei's AI processors were found to include advanced components from TSMC and Samsung, despite US sanctions.
• Details:
  • Huawei is considered the most reliable competitor to NVIDIA in AI chips.
  • The Chinese government is actively encouraging domestic customers to buy from Huawei.
  • Huawei has been able to obtain HBM (High Bandwidth Memory) chips from Samsung, specifically older Generation 2E components.
  • There is a suggestion that Huawei cannot currently source these components from domestic suppliers, raising concerns about long-term supply.
  • Huawei is trying to ramp up production and focusing on domestic demand, potentially doubling chip production.
• Argument: China's reliance on foreign components highlights the limitations of its domestic AI chip supply chain.
• Executive Editor Quote: "If they cannot get them from domestic suppliers right now, that suggests maybe they are going to run out at some point."

AI Valuations and Investment Strategies

• Main Point: While AI valuations are high, they may be justified by the potential of the technology and the broad range of industries it impacts.
• Details:
  • Key investors have called the current market a "hype bubble," but Bezos describes it as "the right kind of bubble."
  • The current AI movement has unprecedented global support.
  • The adjacency circle of industries benefiting from AI is growing wider.
  • Caterpillar is cited as an example of a company benefiting from AI movements outside of just chip manufacturers.
• Investment Strategy: Investors should focus on a theme-based approach, looking beyond NVIDIA and OpenAI to adjacent industries.
• Portfolio Management: Diversification is crucial, and investors should consider rebalancing portfolios and reallocating gains to other sectors.

Rivian's Door Safety Concerns

• Main Point: Rivian is reworking the manual release of its vehicles' doors after customers raised concerns over potential safety issues.
• Details:
  • The R2 model will have a more intuitive emergency manual release.
  • A redesign in June 2024 to lower component count made the rear door release latch less intuitive.
  • Employees and anonymous complaints suggest a potential safety risk.
  • There is no current investigation into Rivian, and the company has not disclosed any accidents related to this issue.
  • Rivian acknowledges the potential safety risk and is addressing it in future designs.
• Comparison: The situation is compared to Tesla's door design revisions due to difficulties operating the manual override after accidents.

Perplexity AI's Comet Browser

• Main Point: Perplexity AI has released its AI-native browser, Comet, aiming to compete with Google Chrome by offering a better internet experience.
• Details:
  • Comet is built from the ground up as an AI-native browser, unlike Google's approach of adding AI to its existing browser.
  • Users ask 6 to 18 times more questions when using Comet compared to other browsers.
  • Millions of people were on the waitlist and are now gaining access.
• Monetization:
  • Perplexity offers subscription products like Complexity Pro and Complexity Max.
  • Comet Plus is a groundbreaking business model that compensates publishers when users and AI directly access their content.
• Competitive Advantage: Perplexity's advantage lies in its execution velocity and rapid iteration, incorporating new AI capabilities quickly.

OpenAI's AI Video Generator and Misinformation

• Main Point: OpenAI's new video creation tool raises concerns about the ease of generating misleading videos.
• Details:
  • The tool makes it extremely easy to create realistic-looking videos that depict events that did not actually happen.
  • Initially, screen recordings of draft videos did not have watermarks, making it easier to share AI-generated content without disclosure.
  • OpenAI has since fixed the watermark issue.
• OpenAI's Response: OpenAI takes the dissemination of false information seriously and is implementing measures to prevent it.
• Challenge: It is unclear whether watermarks will effectively deter the spread of misinformation, as people may not recognize them as indicators of AI-generated content.

China's Proposal to Lift Restrictions

• Main Point: China is pushing the Trump administration to roll back national security restrictions on Chinese deals in the United States, offering a massive investment package in return.
• Details:
  • China is appealing to Trump's reputation as a dealmaker.
  • The proposed investment package could be as large as $1 trillion or even larger.
  • China seeks treatment similar to other countries that have announced big investment packages in the US.
  • This would be a significant reversal of a decade of US policy, which has been bipartisan.
• Potential Impact:
  • It could open up investment in the US to Chinese companies in a much bigger way.
  • It could alleviate concerns about Chinese involvement in the US economy and national security.

BlackRock's Potential Acquisition of Aligned Data Centers

• Main Point: BlackRock's Global Infrastructure Partners is in advanced talks to buy Aligned Data Centers for about $40 billion.
• Significance: This would be a blockbuster M&A deal in the data center space, driven by the AI revolution and the need for more infrastructure.
• Aligned Data Centers: The company has data centers around Phoenix and other locations in the US.
• Trend: The deal reflects the trend of building out the power and infrastructure necessary to fuel the AI revolution.

European Tech Ecosystem Challenges

• Main Point: Goldman Sachs Chairman David Solomon highlighted the challenges of building significant tech businesses in Europe.
• Challenges:
  • Lack of scale and scope of available savings deployed into the tech risk ecosystem compared to the US.
  • Slow regulatory processes.
  • Fragmented capital markets.
• Recommendations:
  • Centralizing capital.
  • Encouraging risk-taking and capital markets.
  • Consolidating the banking system and exchange systems.
  • Operating the European Union as a true economic union.

Vercel's AI Cloud and Controversy

• Main Point: Vercel is building the AI Cloud, aiming to be the AWS of AI, while also addressing controversy surrounding the CEO's meeting with Benjamin Netanyahu.
• AI Cloud: Vercel is building the AI Cloud to enable developers and companies to deploy AI agents and improve business efficiency.
• Growth Metrics: Vercel has passed $250 million in ARR, growing north of 80% year-over-year.
• Controversy:
  • The CEO acknowledged that his post about meeting with Netanyahu caused pain and apologized to well-meaning people who were hurt.
  • He clarified that there have been no material changes to the business and no employee resignations.
• Employee Engagement: Vercel is keeping employees engaged by emphasizing its mission to build for the web and its core values.

Taylor Swift's Album Release

• Main Point: Taylor Swift's 12th studio album was released and is dominating charts and social media.
• Promotion: Swift has banked on her fame and chosen her promotional activities carefully.
• Impact: The album has already broken records for pre-saves on Spotify (5 million).
• Cross-Platform: There is also a movie out this weekend that will inject some life into movie theaters.

Conclusion

The broadcast covers a wide range of topics within the tech and business landscape. Key themes include the complexities of the AI chip supply chain, the debate surrounding AI valuations, the importance of diversification in investment strategies, and the potential risks and opportunities presented by emerging technologies like AI-powered video generation and AI-native browsers. Geopolitical factors, such as China's investment proposal and the challenges facing the European tech ecosystem, also play a significant role. The broadcast emphasizes the rapid pace of innovation and the need for investors and businesses to adapt to the evolving landscape.