Broadcom Boom, Intel Bust Tell Two Chipmaking Tales | Bloomberg Businessweek

In a Bloomberg Business Week podcast, hosts Carol Messer and Tim Stenc discuss the semiconductor industry's pivotal year in 2024, highlighting the contrasting fortunes of companies like Nvidia, Broadcom, and Intel. Semiconductor expert Ian King joins to explore Intel's leadership challenges and potential restructuring, while Broadcom's growth strategy under CEO Hawk Tan is examined. The conversation shifts to AI's growing influence across sectors, with Zeno Mercer from Verifi emphasizing AI's transformative impact on industries and the economy. Economist Lauren Zidel Baker discusses the U.S. economic outlook, noting resilience despite potential geopolitical and inflationary challenges. The podcast also reflects on the legacy of former President Jimmy Carter, with insights from Barbara Perry of the University of Virginia's Miller Center.

• The semiconductor industry saw significant growth in 2024, with companies like Nvidia and Broadcom reaching new heights.
• Intel faced challenges, experiencing a decline due to losses and a grim forecast.
• The future of Intel is uncertain, with questions about its leadership and potential restructuring.

"2024 was a benchmark year for the semiconductor industry, companies including Nvidia and Broadcom reaching new highs."

• The year marked significant achievements for key players in the semiconductor sector.

"Intel as we know a story we talked throughout the year falling sharply in 2024 as the company contended with losses and Grim forecast."

• Intel struggled throughout 2024, dealing with financial losses and an uncertain future.

• Intel does not currently have a CEO, adding to the uncertainty of its future direction.
• The decision on a new CEO will impact whether Intel remains intact or undergoes restructuring.
• The leadership choice will indicate the board's vision for Intel's future.

"It doesn't even have a CEO remember, we still don't even know who is going to lead this company forward."

• The absence of a CEO highlights the leadership vacuum at Intel.

"If they look perhaps bringing an outsider... maybe that's because they see it as a breakup situation at this point."

• An outsider CEO might suggest a potential breakup or significant restructuring of Intel.

• Broadcom experienced a significant resurgence, marked by a 25% increase in one day.
• CEO Hawk Tan has successfully transformed Broadcom by leveraging strong franchises.
• Broadcom's growth is driven by its design work for major companies like Google.

"We waited all year long and then suddenly Broadcom had this resurgence and 25% move in one day alone."

• Broadcom's sudden growth highlights its strategic successes in 2024.

"Hawk Tan the CEO there who's made this kind of company out of sort of the leftover parts of other companies."

• Hawk Tan's leadership has been pivotal in Broadcom's transformation and success.

• Nvidia acquired Israeli software company Run:AI, enhancing its data center capabilities.
• The acquisition helps Nvidia optimize data center infrastructure and software utilization.
• Despite concerns, Nvidia successfully closed the deal, indicating its continued influence in the industry.

"This software from this Israeli startup helps owners of data centers to get the best out of their infrastructure."

• Run:AI's software is crucial for maximizing data center efficiency, benefiting Nvidia's operations.

"Nvidia perhaps still has room to do deals and to be able to sort of make moves and influence the industry externally."

• Nvidia's ability to close the deal demonstrates its ongoing capacity to shape the industry.

• The AI semiconductor cycle may not differ significantly from previous cycles, despite industry claims.
• Historical patterns suggest that claims of a unique cycle are often unfounded.
• The cycle typically involves periods of high demand followed by oversupply.

"I've been listening to CEOs telling me this time is different for most of those 25 years and that's never been the case."

• Historical skepticism towards claims of a unique cycle in the semiconductor industry.

• The Global X Artificial Intelligence and Technology ETF saw a 26% increase in 2024.
• This follows a 55% gain in 2023, raising questions about its performance sustainability.
• The ETF's growth reflects the broader trend of AI's increasing influence in the tech sector.

"If you look at the $2.6 billion Global X funds Global X artificial intelligence and Technology ETF it's up about 26% year to date."

• The ETF's performance underscores the strong market interest and investment in AI technologies.

• AI is becoming integral across various sectors including consumer, enterprise, government, and industrial spaces.
• The proliferation of AI involves advancements beyond traditional interfaces, integrating into real-time human-tech interactions.
• Challenges and roadblocks remain in AI deployment and implementation, necessitating new safeguards and addressing automation challenges.

"AI is coming down the pipeline in every facet of society; it's not just chat and interfaces, it's advanced autonomous vehicles, logistics, and human-tech interaction."

• AI is expanding into diverse areas, indicating its widespread impact on society.

"We're starting to see the 'AI-ification' of everything."

• The pervasive influence of AI is transforming various aspects of life and industries.

• AI and Robotics companies are expected to see accelerated growth in their top and bottom lines.
• Markets driven by AI and Robotics are anticipated to grow rapidly, potentially dominating GDP.
• Sub-sectors such as sensors and automation are crucial for further development and adoption.

"Projected top and bottom lines for AI and Robotics companies are both projected to continue to accelerate next year."

• Financial growth is expected for AI and Robotics companies, indicating strong investment potential.

"We're talking about the majority of GDP starting to be AI and Robotics-driven."

• AI and Robotics are set to become significant contributors to economic growth.

• AI and Robotics will influence daily life, from food deliveries to home automation and personal assistance.
• Advanced interfaces and sensors could enhance navigation and interaction with environments, benefiting various demographics.
• Personal AI assistants are expected to become more impactful, integrating with personal data and devices.

"Some of it will be less obvious behind the scenes, like how food and deliveries get to you."

• AI will streamline and optimize logistical processes, affecting everyday conveniences.

"Personal AI assistants will start to take off in a more impactful way."

• AI assistants will become more integrated and useful in personal and professional contexts.

• Various public and private companies are entering the AI and Robotics space, working on diverse applications and technologies.
• The development of humanoid robots and other form factors is underway, with potential breakthroughs expected.
• A diversified investment approach in companies involved in AI sub-sectors is recommended due to the rapid pace of innovation.

"There are certainly a lot of companies putting their hat in the ring."

• Many companies are investing in AI, indicating a competitive and dynamic market landscape.

"We probably will have an iPhone-like moment or ChatGPT moment in the next year or two."

• Significant technological advancements and market disruptions are anticipated in the near future.

• The concept of AI having its own agency, operating independently without human intervention, is under discussion.
• The development of autonomous agents could transform interactions and responses in various applications.

"Do we make the leap of AI having its own agency, basically AI not needing human intervention?"

• The potential for fully autonomous AI raises questions about future capabilities and ethical considerations.

• AI agents are expected to significantly advance by 2025, with both open-source and directed AI models contributing to this progress.
• The integration of AI into various sectors is anticipated to increase, potentially transforming industries and daily life.
• Concerns about AI's role in personal life management are emerging, such as AI assistants influencing purchasing decisions.

"AI agents and mixture of experts, we're going to see a lot of advances here. AI can start to solve problems on its own."

• This quote highlights the anticipated advancements in AI technology, particularly in problem-solving capabilities, indicating a future where AI plays a more autonomous role.

"I'm not looking forward to the agent or the personal AI assistant that says do you really need those new shoes."

• This reflects concerns about AI's potential to intrude into personal decision-making, suggesting a need for balance between AI assistance and personal autonomy.

• The US economy is expected to show resilience, with foundational strengths supporting growth.
• Concerns are primarily centered around potential Black Swan events, such as geopolitical tensions or trade wars, which could disrupt economic stability.
• Inflationary pressures are anticipated to resurface, potentially influencing Federal Reserve policies on interest rates.

"Overall the foundational pieces are in place for a very resilient economy so I don't see any underlying cracks."

• The quote underscores confidence in the US economy's strength, despite potential challenges, indicating a positive outlook for economic stability.

"Later into 2025, that's when we at ITR economics do see inflation starting to build again."

• This points to the expectation of rising inflation, which could impact monetary policy and economic planning.

• Tariffs and trade policies could play a significant role in shaping economic conditions, potentially leading to inflation and affecting global trade dynamics.
• The shift from globalization to nationalism presents both opportunities and challenges for US manufacturers and global trade relations.

"If we get reciprocal tariffs on some broad-based US tariffs, that could hinder some global trade activities."

• This highlights the potential negative impact of tariffs on global trade, suggesting that protectionist measures could have unintended economic consequences.

"Tariffs do tend to be inflationary. We have really good case studies historically."

• The quote emphasizes the inflationary effect of tariffs, supported by historical evidence, indicating a risk of increased costs for consumers and businesses.

• Recent rises in treasury yields are attributed to increased term premiums, linked to deficit concerns rather than economic growth.
• The US remains a strong business environment, but long-term deficit issues need addressing to maintain economic stability.
• Potential measures to address the deficit include cutting programs, raising taxes, or other fiscal strategies.

"The rise in yields is about the term premium going up and that's because of deficit concerns."

• This explains the relationship between treasury yields and deficit concerns, indicating that fiscal issues are influencing financial markets.

"We really have to do something about this debt level something about this deficit."

• The quote stresses the urgency of addressing the US deficit, suggesting that without action, economic stability may be threatened in the future.

• The U.S. economy is grappling with a high debt burden and growing deficits, exacerbated by rising interest rates.
• Interest payments on the national debt are becoming a significant and increasing issue, contributing to the deficit.
• No simple solutions exist to address these economic challenges given the current fiscal situation.

"None of those would be pain-free for the US economy; some would be clearly more painful than others, but at this point with our debt burden being so high with our deficit really growing year after year after year contributing to more and more debt with higher interest rates today, just the mere interest payments on our national debt are a huge and growing problem."

• The quote highlights the complexity and severity of the economic challenges faced by the U.S. due to high debt and deficits.

• Jimmy Carter is remembered as an extraordinary leader and humanitarian, with his presidency marked by both achievements and challenges.
• Carter was the first president to be voted for by Barbara Perry, who reflects on his journey from a relatively unknown figure to winning the presidency in 1976.
• His presidency is noted for initiatives in energy conservation, education, and defense upgrades during the Cold War.

"President Biden said he'll order a state funeral in the capital for Jimmy Carter, calling the former Democratic president who died Sunday an extraordinary leader, statesman, and humanitarian."

• This quote underscores Carter's recognition as a significant figure in American history and the respect he garnered for his contributions.

"He got out of the limousine, and he and Rosalynn walked hand in hand from the Capitol all the way to the White House with their family behind them, and that was the first time the president had done that."

• The quote illustrates Carter's effort to connect with the American people and his symbolic gesture of being "of the people."

• Carter's post-presidency is often viewed more favorably, with his humanitarian efforts and moral leadership being highlighted.
• Despite challenges during his presidency, his legacy includes a focus on decency and moral values, influencing current politicians like Joe Biden.

"There was a side to him maybe that came from his Christian background that was sort of a dark side and a light side, and His Dark Side was tended to be a little bit lecturing and hectoring of the American people."

• This quote reflects on Carter's complex personality, which included both positive moral leadership and a tendency to lecture, which was not always well-received.

"I do think that there were many positives from The Carter Administration, but there were just some unlucky events that he either mishandled or wasn't able to handle and that brought Ronald Reagan to power."

• The quote acknowledges Carter's accomplishments but also the challenges and events that led to his electoral defeat.

• Jimmy Carter's emphasis on decency and moral values is seen as influential in the political landscape, with Joe Biden being a notable figure carrying on this legacy.
• The discussion highlights the importance of moral leadership in a politically divided environment.

"I do, and it's Joe Biden, and as he said yesterday, decency, decency, decency, that's what he took from Jimmy Carter, and that is Joe Biden."

• This quote emphasizes the continuity of Carter's values in current political figures, particularly President Joe Biden.

"It's just something to really think about in this current environment, reflect on."

• The quote suggests the importance of reflecting on Carter's values of decency and moral leadership in today's political climate.