Nvidia’s Huang Wins China Reprieve in Rare Trade War Reversal

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1:56and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, we're going to continue with AI because shares of NVIDIA and AMD just surging. NVIDIA up 4%, as is AMD. Actually, AMD, excuse me, up 6.3 % now. This after the company's plan to resume sales of some AI chips in China after securing Washington's assurances that such shipments would get approved. It's a dramatic reversal from the Trump administration's earlier stance on measures designed to limit Beijing's AI ambitions. Ian King is Bloomberg News U.S. semiconductor and networking reporter.

2:36He joins us from our Bloomberg Newsroom and Bureau in San Francisco. Ian, what is this reversal? The news crossing late last night, obviously good for shareholders who are along these companies. What was the reversal? all? Yeah, I mean, in a broader sense, the trend for these companies has been sort of bad to worse, which means, you know, access to their largest potential market. China has been becoming tighter and tighter, and it's becoming more difficult for them to do business. What they were told was, and this is the U.S. Commerce Department, which was actually, look, these licenses, these applications that you've put in for permission to ship some of these chips to China, Guess what?

3:18We're going to take a positive look at them. So this was really kind of a pleasant surprise if you're a shareholder where the expectation has been that this situation was going to get worse and worse. A pleasant surprise and somewhat of an about face, right, when it comes to the presidential administration's policies here. What does this about face really signal about the negotiations going on between China and the U.S. when it comes to semis? Yeah, I mean, I think you nailed it in terms of negotiations, because as we've seen from senior administration officials who've been on our TV and been on other media sort of talking about this issue today, they've said, oh, yeah, we sort of made this deal a while ago when we were asking the Chinese to give us access to rare earth minerals and magnets, and we sort of told them that this might be a thing.

4:09So what we're kind of learning here is it's clearly a quid pro quo. type situation and obviously implies that going forward, if we're going to see more of these trade type deals and perhaps AI exports to China are on the table in a way that we thought they perhaps weren't. At issue are these H20 chips. You mentioned different officials on our air. One of those officials, Treasury Secretary Scott Besson, he was on Bloomberg surveillance a little earlier today. Here's what he said about those NVIDIA H20 chips. It would be a judgment that the Chinese indigenous manufacturers already have an equivalent chip.

4:48So if there's an equivalent chip, then the NVIDIA H20 could be sold. One thing that we do not want is a digital belt and road springing up around the world because other countries or China are substituting for our American chip manufacturers. That was Treasury Secretary Scott Besson on Bloomberg surveillance earlier. I'll repeat a little bit of what he said. He does not want a digital Belt and Road springing up around the world. That, of course, referring to what China's been able to do physically around the world when it comes to trade, when it comes to ports, when it comes to building roads throughout the entire world or almost the entire world, much of the developing world, I should say, and exerting its own influence on countries around the world that way.

5:35Is there already a digital Belt and Road initiative? that China has been exerting on the rest of the world, Ian? In this particular area in AI, not yet. But what Jensen Wang, the CEO of NVIDIA, has argued and some of his peers have argued is like, look, if you don't let the U.S. technology become the absolute center, the base layer of this giant AI build-out around the world, somebody else will. Who will that somebody be? Most likely China. Right now, they're not as good as we are. Right now, they're way behind us. But guess what? If you give them the chance, they'll catch us up. That's been the kind of, hey, you need to let us be out there and propagate our AI kind of argument that they've made.

6:21And this is clearly something that we've seen administration officials kind of parrot or adopt, if you like, in terms of their explanation of why they're going to let NVIDIA and AMD sort of play in China to a greater extent than we thought they would. I'm wondering how this development, I guess what it means for U.S. tech and AI companies now versus companies, I'm thinking DeepSeek in China, that are also trying to kind of get ahead in the AI arms rates. Does this level the playing field? No, it doesn't. I mean, you know, it's still a very distorted, if you like, situation. U.S. companies are not going to be allowed to sort of absolute free access.

7:09You know, the U.S. administration officials were very clear to point out that, hey, we're only letting them have these access to these older chips. Right. That nothing new, nothing state of the art is going to be allowed there. So those Chinese companies that are actually developing, they will have access to some perhaps U.S. technology, but nothing state of the art. So they've kind of got to make their own way still. And that's obviously a hard road. How are they doing in that? It depends who you speak to. Those that want to argue for more freedom, that want to argue that the U.S. is at risk, are saying the Chinese are finding a way.

7:47Huawei is doing really well. DeepSeek is doing really well. And they're making do and mend with very little. So guess what? If they, over time, they're going to get better. Others are saying, no, no, they're way behind us here. this is our chance to really hold them back and the U.S. is forging ahead. So, you know, the argument tends to shift according to who's making it and what the motivations are. What the reality is will be determined by the market and the use of these systems worldwide. Ian, just 10 seconds on sort of the next question when it comes to what NVIDIA and AMD and the like cannot still export.

8:22What is it? Yeah, I mean, the next question is how many of these licenses are they going to get and what does that mean materially for them? And the answer is we don't really know yet how quickly these licenses will come, how quickly they'll be able to ship and how much demand there will be, whether it'll restore the lost revenue that they've already had to point to. Well, there's certainly demand for shares of these companies today. NVIDIA up 4%, AMD up 6.4%. Ian King, Bloomberg News, U.S. semiconductor and networking reporter. Always love it when you join us on Bloomberg Businessweek Daily.

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11:04So that's a look at three of the big banks which we're interested in not just for their results but also for their macro commentary. J.A.T. Bardwaj is also watching this commentary closely. She's director in FX and EM strategy at TD Security. She joins us here in the Bloomberg Businessweek studio. I want to shift gears a little bit and talk capital flows, because that's certainly under your purview in this new tariff regime. We've got a great story on the Bloomberg about the maker of Kerrygold Butter, a favorite of pretty much everybody, has slowed its U.S. investment as it waits for more clarity on President Trump's trade settlement with the EU.

11:38Just about an hour ago, we heard from Embraer's CEO. He said he may revisit its business plan due to U.S. tariffs. It's an evolving situation, certainly. But how do you see tariffs changing the flow of capital big picture? I think the biggest thing is that they have injected a lot of uncertainty into markets. And I think last week was that wake-up call because markets had become a little too sanguine on tariff risks. And we came back with multiple letters. And that uncertainty crept back up. And that's why the dollar is getting the bounce that we're seeing. You're also seeing the change in capital allocation, which you rightly mentioned.

12:11The biggest mover and the first mover actually has been Europe, because they have been very quick to repatriate and they've been very quick to bring money back home into local equities, which is actually what's boosting the currency at this point. I want to jump in, because as I was asking you that question, we got a red headline crossing the Bloomberg terminal. The president says that Indonesia will buy 50 Boeing jets in a trade deal. How do you look at a U.S. manufacturer, a massive U.S. manufacturer, as a bargaining chip when it comes to these negotiations? The thing is we've seen with Trump is that we've seen a lot of frameworks or skeletons of a trade deal.

12:46But right now, you know, we're still figuring out a lot of the specifics. Even with the U.K., we don't know what the specifics are. That's why markets are in a very uncertain mode. That's why you've not seen markets rally on all of these trade deals the way you would expect otherwise. There's still a lot of uncertainty, especially to the degree that tariffs are being used as leverage to extract a lot of concessions from the rest of the world. The one interesting headline which came out a few days ago is that the European Union is now talking to its other non-U.S. trading partners to come up with a joint trading alliance and take a stronger stance to the U.S.

13:19I think those are also the things which are interesting because while the U.S. is a very strong dominant power in the geopolitical space, it is actually forcing the rest of the countries to step up and do a lot more fiscal spending and also a lot more trade amongst themselves. Let's zoom out and talk about how all of that impacts the direction of the dollar. We've seen a lot of weakness this year when it comes to the dollar. What do you see the catalysts next, at least for the direction of dollar strength right now? I would say that in the very short term, I think there's going to be a tug of war between just short term technicals, which tell you that the dollar is very cheap from any historical standpoint.

13:58which is why you will see sometimes when the dollar is trying to bounce back higher but structurally I think this is as convincing a time to sell the dollar for more structural reasons than you would have received. For the longest time everyone would tell you that the dollar is overvalued but you could never come up with good enough reasons or catalysts for that dollar you know weakness to sustain but after a very long time I can now come up with a lot of reasons for why the dollar you know weakness will sustain unidirectionally in the remainder of the year. The capital allocation, that's definitely one which we've seen in Europe.

14:29It remains to be seen if other countries follow. But another very interesting bit is that the global investors of the world have been overweight U.S. equities, but they were actually doing that unhedged. They were not hedging their currency risk at all because the dollar would rally and give their portfolio a boost. But that's changing, and that's why the dollar is structurally seeing that pressure downwards. What about the Fed here? If we only get one cut this year, does that change the calculus of just how much we see the dollar weaken for the rest of the year? Not a whole lot, because actually what's interesting is that the correlation between U.S.

15:04rates and the dollar has actually been broken. The correlation between the U.S. dollar and a lot of factors are broken. You would see yields have backed up, commodity prices have backed up, equities have backed up, But the dollar is the only asset class unidirectionally heading lower. So that correlation, which you rightly pointed out, would have been very strong at one point. It does not matter anymore because the structural factors are proving to be stronger, a lot more than this correlation to rates. JT, what happens to the value of the dollar if Fed Chair Powell is somehow ousted? It is definitely a question we've been discussing a lot, you know, and it's definitely topical with all the headlines.

15:45You know, there are a lot of questions around the legality of all of this, but it definitely is. The more conversation we're having about this, the more I think it's edging dollars. I mean, it's daily from the president. Yes. I think it will definitely be injecting a lot of risk premium into markets. And I think even Besant and Trump are careful about that. That's why whenever they're asked, you know, straight up, are you going to fire Powell? Till date, they've said no, because they know that the minute that answer shifts to yes, markets will, you know, price in. And, you know, Treasury is going to sell off and the dollar is also going to massively sell off.

16:17So is the dollar a bigger guardrail or is our Treasuries a bigger guardrail? Treasuries are a bigger guardrail because to date, we've not seen any active signs of investors selling Treasuries. So that has still been intact with Treasuries being the global safe haven of the world. The dollar correlation is already, you know, it's scraping away already. So I think Treasuries is still the more intact one, which I think you need to preserve. And I think that's why Besant and Trump have been very guarded in their comments about power. JT Bardwaj, always good to see you. Thanks for joining us on Bloomberg Businessweek Daily, director in FX and EM strategy over at TD Securities.

16:56This is the Bloomberg Businessweek Daily podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. Well, he wanted to become an investment banker, but after arriving at the University of Pennsylvania's Wharton School in 2007, he realized he was lousy at accounting and detested Excel. So he settled on startups. He eventually found himself in the direct-to-consumer healthcare business. We're talking about Andrew Dudum, CEO of the telehealth company Hims and Hers, which for more than a year has been selling GLP-1s, America's most coveted weight loss drugs.

17:40I'm reading from a story in the forthcoming issue of Bloomberg Businessweek magazine. It's the August issue, but you can read the story now on Bloomberg.com and on the Bloomberg Terminal. Madison Muller and Devin Leonard wrote the story. We've got Madison Muller with us right now. She's Bloomberg News health reporter, and she joins us here in the Bloomberg Interactive Brokers Studio. I think a lot of people are familiar. Well, I would say there are two different types of people who are familiar, maybe three, with him and hers. there's the investing audience who followed the ups and downs the roller coaster yes of this stock there are the folks who are customers perhaps of the company and then maybe there are the folks who are looking at the glp ones and looking for alternative ways to find this medicine how did he get on your radar yeah so i mean hymns we've known about the company for a while because of their very splashy advertisements, which I feel like a lot of people have seen.

18:40So it's not just us in the subways? It's not just New Yorkers? Not just New Yorkers in the subway. I mean, sure, I talk about weight loss drugs a lot, so I do think I get targeted ads. But most people I talk to have seen a hims and hers ad on Instagram or on Hulu. They advertise a lot. So people are familiar with the brand. They had this huge Super Bowl ad back in February about their weight loss drugs. And so it's been on people's radars. But I would say that the last year after HIMSS launched a compounded or copycat GLP-1 drug for a fraction of the price of what the companies Novonordis and Eli Lilly sell their drugs for, it really put them on the map.

19:21I mean, their stock rose a ton in that time. They've experienced enormous growth. They're now worth$11 billion as of the last time I checked. And that is like really what got people talking about them the last year. They are sort of unafraid to be really loud and vocal in their marketing, sort of push the boundaries a little bit. They want people to be talking about their advertisements, be talking about what the company is doing. So that sort of like catapulted them, I think, into the conversation and obviously got them on my radar when they started offering these GLP-1 drugs. How did they actually manage to offer drugs in such a competitive landscape?

20:05Would you say now that they're a direct competitor to these giant pharmaceutical companies that are also in on the GLP-1 space? Yeah, no, that's a really good question because these telehealth companies, you know, we did see pharmaceutical giants like Eli Lilly and Novo Nordisk start to see some of these telehealth companies like HIMSS as competitors because they were offering their drugs at a lower price point when Lilly and Novo were struggling with shortages and patients couldn't get the company's branded drugs. And then we saw these telehealth companies crop up offering copycat versions that were allowed during the shortages and really like start to steal market share from them.

20:44And then we saw Novo and Lilly, you know, a few months ago, start partnering with these companies and actually utilizing the platforms and the customer bases that they've built to get their drugs out there to more patients. We had a partnership, but then at least the Novo Nordisk partnership with HIMSS, that kind of exploded. Yeah. What happened? Well, then there's been so many twists and turns and ups and downs with this saga over the last few months. I mean, it was a surprise, I think, to a lot of people that Novo Nordisk, huge pharmaceutical company, would choose to partner with a telehealth company that was selling essentially copycat or knockoff versions of their brand name drugs for a fraction of the price alongside the real ones.

21:24And so it was sort of a surprise back then. But, you know, the him CEO was saying that the two companies were really culturally aligned and promising, you know, that he saw a future for them even beyond weight loss. And then, you know, less than two months after this partnership was announced, we saw Novo Nordisk terminate the deal, sort of accuse him of some sketchy behavior. And since then, there's just been this public back and forth between the two companies sort of playing out on social media and playing out in the media, giving interviews to different outlets and sort of like going back and forth, accusing each other of different things.

22:02So it's like a really unique situation where we have these two companies duking it out, like in a very public way. You reported on this for months, said that you've been working on the story for a long time and spent quite a bit of time with Andrew Dedum, the founder of HIMS. I'm wondering if you could talk a little bit just about kind of his his style as a leader, as a founder, his background and how that's helping him become like a legit competitor in in this very high stakes weight loss drug race. Yeah. I mean, so him's even though it's been around for a few years, I mean, the company started in 2017, went public in 2021.

22:47And Andrew's very young. He's been he hasn't really stepped away from this like founder CEO role. He's still, you know, very involved in sort of the day to day. He's the one that's coming up with new ideas for the company to pursue, bringing them up in, you know, board meetings, things. And like he is he is the one driving the company. And sometimes, you know, we see CEOs like step back a little bit at this point. But he has three kids, you know, three little kids. He's still very, very involved. His vision is sort of where the company goes. and he has this interesting background as well going to Wharton where it was sort of like a breeding ground for a lot of direct-to-consumer companies and he wasn't at school.

23:30Yeah like Warby Parker. Yes. Harry's Razors I think too like there's a few examples that we name in the story and I don't think Andrew was at school with them but there we sort of see this type of company emerging from Wharton which is interesting and Andrew was involved in a lot of different startups He was at a startup incubator before going into HIMSS full time. So he has experience with launching companies, sort of knows what it takes to do that. You know, you've been in the weight loss beat for, what, two years now? It's like what you live and breathe, essentially, when it comes to your reporting.

24:09And I think it's fair to say, based on what you've told us, this is more than a fad. It's more than just a trend. But it also is a huge money-making opportunity for a lot of different companies. That said, this stuff changes very quickly. A company like Hims and Hers, as you detail in the piece, has pivoted over its history. What does it do now that it's sort of on the outs with Novo? There isn't the shortage anymore, so they're not really allowed to compound anymore, right? Well, so that's actually what they're betting on, is that they will be able to keep compounding, even though the shortage is over.

24:47Why will they be able to do that? So there is this, I mean, we'll call it a loophole. There's some argument over whether or not it's actually a loophole in the FDA legislation that says that these compounding pharmacies can continue to tailor, make, or personalize, customize these drugs for patients who can't take the versions that are commercially available from pharmaceutical companies. So essentially what HIMSS is doing is they're tweaking the dosages, the strengths of the drugs and giving patients lower dose version or titrating, you know, stepping up the amount of drug that they're giving patients more slowly, sort of to mitigate the side effects that are quite common with these drugs like nausea, vomiting.

25:30And so they're saying that, you know, these patients are not available, you know, they're not able to take the commercially available drugs because they have these side effects. And so they need these personalized versions. And by doing that, they're technically allowed to continue compounding. But the FDA hasn't really stepped in and ruled or said much about this yet. So and we have a new FDA commissioner now. So we're kind of waiting to see what happens. Can you talk a little bit about how he's ingratiated himself in the company with the Trump administration and with RFK specifically? Yeah. So him's donated a million dollars to Trump's inauguration fund back in January.