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  • Nvidia, Google, Microsoft and more head to Las Vegas to tout health-care AI tools

    Nvidia, Google, Microsoft and more head to Las Vegas to tout health-care AI tools

    Visitors check out Nvidia’s AI technology at the 2024 Apsara Conference in Hangzhou, China, on September 19, 2024.

    Costfoto | Nurphoto | Getty Images

    Nvidia, Google, Microsoft and dozens of other tech companies are descending on Las Vegas next week to showcase artificial intelligence tools they say will save doctors and nurses valuable time. 

    Sunday marks the official start of a health-care technology conference called HLTH, which is expected to draw more than 12,000 industry leaders this year. CNBC will be on the ground. Based on the speaking agenda and announcements leading up to the conference, AI tools to conquer administrative burdens will be the star of this year’s show. 

    Doctors and nurses are responsible for mountains of documentation as they work to keep up with patient records, interface with insurance companies and comply with regulators. Often, these tasks are painstakingly manual, in part because health data is siloed and stored across multiple vendors and formats. 

    The daunting administrative workload is a major cause of burnout in the industry, and it’s part of the reason a nationwide shortage of 100,000 health-care workers is expected by 2028, according to consulting firm Mercer. Tech companies, eager to carve out a piece of a market that could top $6.8 trillion in spending by the decade’s end, argue that their generative AI tools can help.

    Alex Schiffhauer, group product manager at Google, speaks during the Made By Google event at the company’s Bay View campus in Mountain View, California, Aug. 13, 2024.

    Josh Edelson | AFP | Getty Images

    Google, for instance, said it’s working to expand its health-care customer base by tackling administrative burden with AI.

    On Thursday, the company announced the general availability of Vertex AI Search for Healthcare, which it introduced in a trial capacity during HLTH last year. Vertex AI Search for Healthcare allows developers to build tools to help doctors quickly search for information across disparate medical records, Google said. New features within Google’s Healthcare Data Engine, which helps organizations build the platforms they need to support generative AI, are also now available, the company said.

    Google on Thursday released the results of a survey that said clinicians spend nearly 28 hours a week on administrative tasks. In the survey, 80% of providers said this clerical work takes away from their time with patients, and 91% said they feel positive about using AI to streamline these tasks. 

    Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.

    Dimas Ardian | Bloomberg | Getty Images

    Similarly, Microsoft on Oct. 11 announced its collection of tools that aim to lessen clinicians’ administrative workload, including medical imaging models, a health-care agent service and an automated documentation solution for nurses, most of which are still in the early stages of development. 

    Microsoft already offers an automated documentation tool for doctors through its subsidiary, Nuance Communications, which it acquired in a $16 billion deal in 2021. The tool, called DAX Copilot, uses AI to transcribe doctors’ visits with patients and turn them into clinical notes and summaries. Ideally, this means doctors don’t have to spend time typing out these notes themselves. 

    Nurses and doctors complete different types of documentation during their shifts, so Microsoft said it’s building a separate tool for nurses that’s best suited to their workflows. 

    AI scribe tools such as DAX Copilot have exploded in popularity this year, and Nuance’s competitors, such as Abridge, which has reportedly raised more than $460 million, and Suki, which has raised $165 million, will also be at the HLTH conference. 

    Dr. Shiv Rao, the founder and CEO of Abridge, told CNBC in March that the rate at which the health-care industry has adopted this new form of clinical documentation feels “historic.” Abridge received a coveted investment from Nvidia’s venture capital arm that same month. 

    Nvidia is also gearing up to address doctor and nurse workloads at HLTH. 

    Kimberly Powell, the company’s vice president of health care, is delivering a keynote Monday that will explain how using generative AI will help health-care professionals “dedicate more time to patient care,” according to the conference’s website.

    Nvidia’s graphics processing units, or GPUs, are used to create and deploy the models that power OpenAI’s ChatGPT and similar applications. As a result, Nvidia has been one of the primary beneficiaries of the AI boom. Nvidia shares are up more than 150% year to date, and the stock tripled last year. 

    The company has been making steady inroads into the health-care sector in recent years, and it offers a range of AI tools across medical devices, drug discovery, genomics and medical imaging. Nvidia also announced expanded partnerships with companies such as Johnson & Johnson and GE HealthCare in March. 

    While the health-care sector has historically been slow to adopt new technology, the buzz around administrative AI tools has been undeniable since ChatGPT exploded onto the scene two years ago. 

    Even so, many health systems are still in the early stages of evaluating tools and vendors, and they’ll be making the rounds on the HLTH exhibition floor. Tech companies will have to prove they have the chops to tackle one of health care’s most complex problems. 

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  • Amazon cloud boss says employees unhappy with 5-day office mandate can leave

    Amazon cloud boss says employees unhappy with 5-day office mandate can leave

    Amazon Web Services CEO, Matt Garman speaks during CNBC Power Lunch on July 1, 2024.

    CNBC

    Amazon‘s cloud boss on Thursday gave employees a frank message about the company’s recently announced five-day in-office mandate.

    Staffers who don’t agree with Amazon’s new policy can leave, Amazon Web Services CEO Matt Garman said during an all-hands meeting at the company’s second headquarters in Arlington, Virginia.

    “If there are people who just don’t work well in that environment and don’t want to, that’s OK, there are other companies around,” Garman said, according to a transcript viewed by CNBC. “At Amazon, we want to be in an environment where we are working together, and we feel that collaborative environment is incredibly important for our innovation and for our culture.”

    Garman’s comments were reported earlier by Reuters.

    Amazon announced the new mandate last month. The company’s previous return-to-work stance required corporate workers to be in office at least three days a week. Employees have until Jan. 2 to adhere to the new policy.

    Amazon is forgoing its pandemic-era remote work policies as it looks to keep up with rivals Microsoft, OpenAI and Google in the race to develop generative artificial intelligence. It’s one of the primary tasks in front of Garman, who took over AWS in June after his predecessor Adam Selipsky stepped down from the role.

    The move has spurred backlash from some Amazon employees who say they’re just as productive working from home or in a hybrid work environment as they are in an office. Others say the mandate puts extra strain on families and caregivers.

    Roughly 37,000 employees have joined an internal Slack channel created last year to advocate for remote work and share grievances about the return-to-work mandate, according to a person familiar with the matter.

    At the all-hands meeting, Garman said he’s been speaking with employees and “nine out of 10 people are actually quite excited by this change.” He acknowledged there will be cases where employees have some flexibility.

    “What we really mean by this is we want to have an office environment,” said Garman, noting an example scenario where an employee may want to work from home one day with their manager’s approval to focus on their work in a quiet environment.

    “Those are fine,” he said.

    An Amazon spokesperson didn’t immediately respond to a request for comment.

    Garman said the mandate is important for preserving Amazon’s culture and “leadership principles,” which are a list of more than a dozen business philosophies meant to guide employee decisions and goals. He pointed to Amazon’s principle of “disagree and commit,” which is the idea that employees should debate and push back on each others ideas respectfully. That practice can be particularly hard to carry out over Amazon’s videoconferencing software, called Chime, Garman said.

    “I don’t know if you guys have tried to disagree via a Chime call — it’s very hard,” Garman said.

    WATCH: Amazon ramps up AI chip race

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  • We’re bending our investment rules and starting positions in 2 of our Bullpen stocks

    We’re bending our investment rules and starting positions in 2 of our Bullpen stocks

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  • AI is having its Nobel moment. Do scientists need the tech industry to sustain it?

    AI is having its Nobel moment. Do scientists need the tech industry to sustain it?

    Hours after the artificial intelligence pioneer Geoffrey Hinton won a Nobel Prize in physics, he drove a rented car to Google’s California headquarters to celebrate.

    Hinton doesn’t work at Google anymore. Nor did the longtime professor at the University of Toronto do his pioneering research at the tech giant.

    But his impromptu party reflected AI’s moment as a commercial blockbuster that has also reached the pinnacles of scientific recognition.

    That was Tuesday. Then, early Wednesday, two employees of Google’s AI division won a Nobel Prize in chemistry for using AI to predict and design novel proteins.

    “This is really a testament to the power of computer science and artificial intelligence,” said Jeanette Wing, a professor of computer science at Columbia University.

    Asked about the historic back-to-back science awards for AI work in an email Wednesday, Hinton said only: “Neural networks are the future.”

    It didn’t always seem that way for researchers who decades ago experimented with interconnected computer nodes inspired by neurons in the human brain. Hinton shares this year’s physics Nobel with another scientist, John Hopfield, for helping develop those building blocks of machine learning.

    Neural network advances came from “basic, curiosity-driven research,” Hinton said at a press conference after his win. “Not out of throwing money at applied problems, but actually letting scientists follow their curiosity to try and understand things.”

    Such work started well before Google existed. But a bountiful tech industry has now made it easier for AI scientists to pursue their ideas even as it has challenged them with new ethical questions about the societal impacts of their work.

    One reason why the current wave of AI research is so closely tied to the tech industry is that only a handful of corporations have the resources to build the most powerful AI systems.

    “These discoveries and this capability could not happen without humongous computational power and humongous amounts of digital data,” Wing said. “There are very few companies — tech companies — that have that kind of computational power. Google is one. Microsoft is another.”

    The chemistry Nobel Prize awarded Wednesday went to Demis Hassabis and John Jumper of Google’s London-based DeepMind laboratory along with researcher David Baker at the University of Washington for work that could help discover new medicines.

    Hassabis, the CEO and co-founder of DeepMind, which Google acquired in 2014, told the AP in an interview Wednesday his dream was to model his research laboratory on the “incredible storied history” of Bell Labs. Started in 1925, the New Jersey-based industrial lab was the workplace of multiple Nobel-winning scientists over several decades who helped develop modern computing and telecommunications.

    “I wanted to recreate a modern day industrial research lab that really did cutting-edge research,” Hassabis said. “But of course, that needs a lot of patience and a lot of support. We’ve had that from Google and it’s been amazing.”

    Hinton joined Google late in his career and quit last year so he could talk more freely about his concerns about AI’s dangers, particularly what happens if humans lose control of machines that become smarter than us. But he stops short of criticizing his former employer.

    Hinton, 76, said he was staying in a cheap hotel in Palo Alto, California when the Nobel committee woke him up with a phone call early Tuesday morning, leading him to cancel a medical appointment scheduled for later that day.

    By the time the sleep-deprived scientist reached the Google campus in nearby Mountain View, he “seemed pretty lively and not very tired at all” as colleagues popped bottles of champagne, said computer scientist Richard Zemel, a former doctoral student of Hinton’s who joined him at the Google party Tuesday.

    “Obviously there are these big companies now that are trying to cash in on all the commercial success and that is exciting,” said Zemel, now a Columbia professor.

    But Zemel said what’s more important to Hinton and his closest colleagues has been what the Nobel recognition means to the fundamental research they spent decades trying to advance.

    Guests included Google executives and another former Hinton student, Ilya Sutskever, a co-founder and former chief scientist and board member at ChatGPT maker OpenAI. Sutskever helped lead a group of board members who briefly ousted OpenAI CEO Sam Altman last year in turmoil that has symbolized the industry’s conflicts.

    An hour before the party, Hinton used his Nobel bully pulpit to throw shade at OpenAI during opening remarks at a virtual press conference organized by the University of Toronto in which he thanked former mentors and students.

    “I’m particularly proud of the fact that one of my students fired Sam Altman,” Hinton said.

    Asked to elaborate, Hinton said OpenAI started with a primary objective to develop better-than-human artificial general intelligence “and ensure that it was safe.”

    “And over time, it turned out that Sam Altman was much less concerned with safety than with profits. And I think that’s unfortunate,” Hinton said.

    In response, OpenAI said in a statement that it is “proud of delivering the most capable and safest AI systems” and that they “safely serve hundreds of millions of people each week.”

    Conflicts are likely to persist in a field where building even a relatively modest AI system requires resources “well beyond those of your typical research university,” said Michael Kearns, a professor of computer science at the University of Pennsylvania.

    But Kearns, who sits on the committee that picks the winners of computer science’s top prize — the Turing Award — said this week marks a “great victory for interdisciplinary research” that was decades in the making.

    Hinton is only the second person to win both a Nobel and Turing. The first, Turing-winning political scientist Herbert Simon, started working on what he called “computer simulation of human cognition” in the 1950s and won the Nobel economics prize in 1978 for his study of organizational decision-making.

    Wing, who met Simon in her early career, said scientists are still just at the tip of finding ways to apply computing’s most powerful capabilities to other fields.

    “We’re just at the beginning in terms of scientific discovery using AI,” she said.

    ——

    AP Business Writer Kelvin Chan contributed to this report.

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  • HSBC exec says there’s a lot of AI ‘success theater’ happening in finance

    HSBC exec says there’s a lot of AI ‘success theater’ happening in finance

    Jaap Arriens | NurPhoto via Getty Images

     

    LONDON — Increasingly many financial services firms are touting the benefits of artificial intelligence when it comes to boosting productivity and overall operational efficiency.

    Despite bold statements, a lot of companies are failing to produce tangible results, according to Edward J Achtner, the head of generative AI for U.K. banking giant HSBC.

    “Candidly, there’s a lot of success theater out there,” Achtner said on a panel at the CogX Global Leadership Summit alongside Ranil Boteju — a fellow AI leader at rival British bank Lloyds Banking Group — and Nathalie Oestmann, head of NV Ltd, an advisory firm for venture capital funds.

    “We have to be very clinical in terms of what we choose to do, and where we choose to do it,” Achtner told attendees of the event, held at the Royal Albert Hall in London earlier this week.

    Achtner outlined how the 150-year-old lending institution has embraced artificial intelligence since ChatGPT — the popular AI chatbot from Microsoft-backed startup OpenAI — burst onto the scene in November 2022.

    The HSBC AI leader said that the bank has more than 550 use cases across its business lines and functions linked to AI — ranging from fighting money laundering and fraud using machine learning tools to supporting knowledge workers with newer generative AI systems.

    One example he gave was a partnership that HSBC has in place with internet search titan Google on the use of AI technology anti-money laundering and fraud mitigation. That tie-up has been in place for several years, he said. The bank has also dipped its toes deeper into genAI tech much more recently.

    “When it comes to generative artificial intelligence, we do need to clearly separate that” from other types of AI, Achtner said. “We do approach the underlying risk with respect to generative very differently because, while it represents incredible potential opportunity and productivity gains, it also represents a different type of risk.”

    Achtner’s comments come as other figures in the financial services sector — particularly leaders at startup firms — have made bold statements about the level of overall efficiency gains and cost reductions they are seeing as a result of investments in AI.

    Buy now, pay later firm Klarna says it has been taking advantage of AI to make up for loss of productivity resulting from declines in its workforce as employees move on from the company.

    It is implementing a company-wide hiring freeze and has slashed overall employee headcount down to 3,800 from 5,000 — a roughly 24% workforce reduction — with the help of AI, CEO Sebastian Siemiatkowski said in August. He is looking to further reduce Klarna’s headcount to 2,000 staff members — without specifying a time for this target.

    Klarna’s boss said the firm was lowering its overall headcount against the backdrop of AI’s potential to have “a dramatic impact” on jobs and society.

    “I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective,” he said at the time in an interview with the BBC. Siemiatkowski said it was “too simplistic” to say AI’s disruptive effects would be offset by the creation of new jobs thanks to AI.

    Oestmann of NV Ltd, a London-based firm that offers advisory services for the C-suite of venture capital and private equity firms, directly touched on Klarna’s actions, saying headlines around such AI-driven workforce reductions are “not helpful.”

    Klarna, she suggested, likely saw that AI “makes them a more valuable company” and was consequently incorporating the technology as part of plans to reduce its workforce anyway.

    The result Klarna is seeing from AI “are very real,” a Klarna spokesperson told CNBC. “We publicize these results because we want to be honest and transparent about the impact genAI is having in the real world in companies today,” the spokesperson added.

    “At the end of the day,” Oestmann added, as long as people are “trained appropriately” and banks and other financial services firm can “reinvent” themselves in the new AI era, “it will just help us to evolve.” She advised financial firms to pursue “continuous learning in everything that you do.”

    “Make sure you are trying these tools out, make sure you are making this part of your everyday, make sure you are curious,” she added.

    Boteju, chief data and analytics officer at Lloyds, pointed to three main use cases that the lender sees with respect to AI: automating back office functions like coding and engineering documentation, “human-in-the loop” uses like prompts for sales staff, and AI-generated responses to client queries.

    Boteju stressed that Lloyds is “proceeding with caution” when it comes to exposing the bank’s customers to generative AI tools. “We want to get our guardrails in place before we actually start to scale those,” he added.

    “Banks in particular have been using AI and machine learning for probably about 15 or 20 years,” Boteju said, signaling that machine learning, intelligent automation and chatbots are things traditional lenders have been “doing for a while.”

    Generative AI, on the other hand, is a more nascent technology, according to the Lloyds exec. The bank is increasingly thinking about how to scale that technology — but by “using the current frameworks and infrastructure we’ve got,” rather than by moving the needle significantly.

    The banking sector 'is very conservative' around competition, says Bunq CEO

    Boteju and Achtner’s comments tally with what other AI leaders of financial services have said previously. Speaking with CNBC last week, Bahadir Yilmaz, chief analytics officer of ING, said that AI is unlikely to be as disruptive as firms like Klarna are suggesting with their public messaging.

    “We see the same potential that they’re seeing,” Yilmaz said in an interview in London. “It’s just the tone of communication is a bit different.” He added that ING is primarily using AI in its global contact centers and internally for software engineering.

    “We don’t need to be seen as an AI-driven bank,” Yilmaz said, adding that, with many processes lenders won’t even need AI to solve certain problems. “It’s a really powerful tool. It’s very disruptive. But we don’t necessarily have to say we are putting it as a sauce on all the food.”

    Johan Tjarnberg, CEO of Swedish online payments firm Trustly, told CNBC earlier this week that AI “will actually be one of the biggest technology levers in payments.” But even so, he noted that the firm is focusing more of the “basics of AI” than on transformative changes like AI-led customer service.

    One area where Trustly is looking to improve customer experience with AI is subscriptions. The startup is working on an “intelligent charging mechanism” that would aim to figure out the best time for a bank to take payment from a subscription platform user, based on their historical financial activity.

    Tjarnberg added that Trustly is seeing closer to 5-10% improved efficiency as a result of implementing AI within its organization.

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  • Asia-Pacific markets fall as investors monitor Middle East tensions; Japan’s Nikkei down 1.5%

    Asia-Pacific markets fall as investors monitor Middle East tensions; Japan’s Nikkei down 1.5%

    A MLB store in the Myeongdong shopping district in Seoul, South Korea, on Saturday, March 9, 2024.

    Bloomberg | Bloomberg | Getty Images

    SINGAPORE — Asia-Pacific markets opened lower Wednesday morning, following a poor start to the trading month on Wall Street that saw major indexes fall amid rising Middle East tensions.

    Australia’s S&P/ASX 200 opened down 0.2%, while Japan’s Nikkei 225 started the trading day lower by 1.5%. South Korea’s Kospi fell 1% at the open, while the small-cap Kosdaq was down 0.8%.

    Hong Kong’s Hang Seng index futures were at 20,768, lower than the HSI’s last close of 21,133.68. Markets in Mainland China were closed Wednesday and will remain closed for the rest of the week due to the Golden Week holiday.

    Traders in Asia were assessing data on consumer inflation out of South Korea. The country’s consumer price index rose 1.6% in September from a year earlier, data showed Wednesday morning, missing expectations by economists polled by Reuters who expected a rate of 1.9%.

    In the U.S. overnight, the Dow Jones Industrial Average fell more than 173 points, while the S&P 500 and Nasdaq Composite dropped 0.93% and 1.53%, respectively. Oil prices and the CBOE Volatility Index (.VIX) jumped as Iran fired ballistic missiles at Israel. The attack followed Israel’s start of a ground operation into Lebanon as tensions escalated with Iran-backed militant group Hezbollah.

    Israeli Prime Minister Benjamin Netanyahu said Iran’s missile attacks had failed and vowed retaliation. “Iran made a big mistake tonight — and it will pay for it,” he said, according to NBC News, adding “the regime in Iran does not understand our determination to defend ourselves and our determination to retaliate against our enemies.”

    —CNBC’s Brian Evans and Alex Harring contributed to this report.

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  • Top AI business leaders meet with Biden administration to discuss the emerging industry’s needs

    Top AI business leaders meet with Biden administration to discuss the emerging industry’s needs

    WASHINGTON (AP) — Top Biden administration officials on Thursday discussed the future of artificial intelligence at a meeting with a group of executives from OpenAI, Nvidia, Microsoft and other companies. The focus was on building data centers in the United States and the infrastructure needed to develop the technology.

    White House press secretary Karine Jean-Pierre told reporters at the daily press briefing that the meeting focused on increasing public-private collaboration and the workforce and permitting needs of the industry. The computer power for the sector will likely depend on reliable access to electricity, so the utility companies Exelon and AES were also part of the meeting to discuss power grid needs.

    The emergence of AI holds a mix of promise and peril: The automatically generated text, images, audio and video could help to increase economic productivity but it also has the potential to displace some workers. It also could serve as both a national security tool and a threat to guard against.

    President Joe Biden last October signed an executive order to address the develop of the technology, seeking to establish protections through steps such as the watermarking of AI content and addressing consumer rights issues.

    Attending the meeting for the administration were White House chief of staff Jeff Zients, National Economic Council Director Lael Brainard, national security adviser Jake Sullivan, deputy chief of staff Bruce Reed, Commerce Secretary Gina Raimondo and Energy Secretary Jennifer Granholm, among others.

    Nvidia CEO Jensen Huang, OpenAI CEO Sam Altman, Alphabet President and Chief Investment Officer Ruth Porat, Meta Chief Operating Officer Javier Olivan, and Microsoft President and Vice Chairman Brad Smith were among the corporate attendees.

    Matt Garman, the CEO of AWS, a subsidiary of Amazon, also attended. The company said in a statement that attendees discussed modernizing the nation’s utility grid, expediting permits for new projects and ensuring that carbon-free energy projects are integrated into the grid.

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  • 3 ways Wall Street’s largest banks are leveraging AI to increase profitability

    3 ways Wall Street’s largest banks are leveraging AI to increase profitability

    Pedestrians walk along Wall Street near the New York Stock Exchange (NYSE) in New York, US, on Tuesday, Aug. 27, 2024.

    Bloomberg | Bloomberg | Getty Images

    Big banks are jumping headfirst into the AI race.

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  • UK competition watchdog clears Microsoft’s hiring of AI startup’s core staff

    UK competition watchdog clears Microsoft’s hiring of AI startup’s core staff

    LONDON (AP) — British regulators on Wednesday cleared Microsoft’s hiring of key staff from startup Inflection AI, saying the deal wouldn’t stifle competition in the country’s artificial intelligence market.

    The Competition and Markets Authority had opened a preliminary investigation in July into Microsoft’s recruitment of Inflection’s core team, including co-founder and CEO Mustafa Suleyman, chief scientist Karen Simonyan and several top engineers and researchers.

    The watchdog said its investigation found that the hirings amounted to a “merger situation” but that the “transaction does not give rise to a realistic prospect of a substantial lessening of competition.”

    Big technology companies have been facing scrutiny on both sides of the Atlantic lately for gobbling up talent and products at innovative AI startups without formally acquiring them.

    Three U.S. Senators called for the practice to be investigated after Amazon pulled a similar maneuver this year in a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept’s AI systems and datasets.

    The U.K. watchdog said Microsoft hired “almost all of Inflection’s team” and licensed its intellectual property, which gave it access to the startup’s AI model and chatbot development capabilities.

    Inflection’s main product is a chatbot named Pi that specializes in “emotional intelligence” by being being “kind and supportive.”

    However, the CMA said the deal won’t result in a big loss of competition because Inflection has a “very small” share of the U.K. consumer market for chatbots, and it lacks chatbot features that make it more attractive than rivals.

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  • What we know about suspected Iranian cyber intrusion in the US presidential race

    What we know about suspected Iranian cyber intrusion in the US presidential race

    NEW YORK (AP) — Details emerged over the weekend of a suspected Iranian cyber intrusion into the campaign of Republican presidential nominee Donald Trump, potentially resulting in the theft of internal campaign documents.

    The FBI is investigating the matter as well as attempts to infiltrate President Joe Biden’s reelection campaign, which became Vice President Kamala Harris’ campaign after Biden dropped out of the race.

    Here’s what we know:

    What happened?

    Trump’s presidential campaign said Saturday that it had been hacked and that sensitive internal documents were stolen and distributed. It declared that Iranian actors were to blame.

    The same day, Politico revealed it had received leaked internal Trump campaign documents by email, from a person only identified as “Robert.” The outlet said the documents included vetting materials on Republican vice presidential nominee JD Vance and Sen. Marco Rubio, who also was considered as a potential vice president.

    Two other news outlets, The New York Times and The Washington Post, also said they received leaked materials. None of them revealed details about what they had, instead describing the documents in broad terms.

    It’s still unclear whether the materials the news outlets received were related to Trump’s alleged campaign hack. Trump campaign spokesman Steven Cheung indicated they were connected, saying the documents “were obtained illegally” and warning that “any media or news outlet reprinting documents or internal communications are doing the bidding of America’s enemies and doing exactly what they want.”

    The FBI on Monday confirmed that it’s investigating the intrusion of the Trump campaign. Two people familiar with the matter said the FBI also is investigating attempts to gain access to the Biden-Harris campaign.

    Why is Trump blaming Iran?

    Trump’s campaign didn’t provide specific evidence showing Iran was behind the hack. But it pointed to a Microsoft report released Friday that detailed an Iranian attempt to infiltrate a presidential campaign in June.

    Microsoft’s report said an Iranian military intelligence unit had sent “a spear-phishing email to a high-ranking official of a presidential campaign from a compromised email account of a former senior advisor.” Spear-phishing is a form of cyberattack in which an attacker poses as a known or trusted sender, often to install malware or gather sensitive information.

    The tech company wouldn’t disclose which campaign or adviser was targeted, but said it had notified them. Since then, both Trump and a longtime friend and adviser of the former president, Roger Stone, have said they were contacted by Microsoft related to suspected cyber intrusions.

    “We were just informed by Microsoft Corporation that one of our many websites was hacked by the Iranian Government – Never a nice thing to do!” Trump wrote on his Truth Social platform on Saturday.

    Grant Smith, an attorney for Stone, said his client “was contacted by Microsoft and the FBI regarding this matter and continues to cooperate with these organizations.” He declined further comment.

    What does the government say?

    U.S. State Department officials declined to speculate on allegations that Iran was behind the hack, but a spokesperson said it would be in keeping with Tehran’s past use of cyberattacks and deception.

    What to know about the 2024 Election

    “These latest attempts to interfere in U.S. elections are nothing new for the Iranian regime,” spokesperson Vedant Patel said on Monday.

    U.S. intelligence officials declined to comment on the incident and referred questions to the FBI, which has said only that it’s investigating.

    Iran’s mission to the United Nations, when asked about the claim of the Trump campaign, denied being involved.

    “We do not accord any credence to such reports,” the mission told The Associated Press. “The Iranian government neither possesses nor harbors any intent or motive to interfere in the United States presidential election.”

    However, Iran long has been suspected of running hacking campaigns targeting its enemies in the Middle East and beyond. Tehran also has threatened to retaliate against Trump over the 2020 drone strike he ordered that killed prominent Revolutionary Guard Gen. Qassem Soleimani.

    Was Harris targeted too?

    Harris’ campaign has declined to say whether it has identified any state-based intrusion attempts, only saying it vigilantly monitors cyber threats and wasn’t aware of any security breaches of its systems.

    But two people familiar with the matter said the Biden-Harris campaign also was targeted in the suspected Iranian cyber intrusion. The people spoke on the condition of anonymity because they were not authorized to discuss the details of the investigation.

    At least three staffers in the Biden-Harris campaign were targeted with phishing emails, but investigators have uncovered no evidence the attempt was successful, one of the people said. The attempts came before Biden dropped out of the race.

    The FBI began investigating that cyber incident in June, and intelligence officials believe Iran was behind the attempts, that person said.

    Where have I heard this before?

    A suspected foreign hack-and-leak of campaign materials might sound familiar because it’s happened before — notably in 2016.

    That year, a Russian hack exposed emails to and from Hillary Clinton’s campaign manager, John Podesta. The website Wikileaks published a trove of the messages, which were reported on extensively by news outlets.

    Senate Majority Leader Chuck Schumer on Tuesday noted the repeated use of the tactic against the U.S. and said it shows foreign adversaries are “intent on sowing chaos and undermining our democratic process.”

    “So we have to stand firm to ensure our cybersecurity can withstand such intrusions as we head into November,” he said in a statement.

    Experts say that the recent apparent hack of the Trump campaign is not likely to be the last such attempt to influence the U.S. election, either through cyberattacks or online disinformation. Both Iran and Russia, for example, have begun targeting Americans with fake news websites and other social media content that appears intended to sway voters, Microsoft and U.S. intelligence officials have said.

    The nation’s former top election security official, Chris Krebs, warned on the social platform X that Americans should take this threat seriously.

    “You might not like the victim here, but the adversary gives zero Fs who you like or don’t like,” he said of the Trump campaign hack. “American voters decide American elections. Let’s keep it that way.”

    ___

    Associated Press writers Alanna Durkin Richer, David Klepper and Zeke Miller in Washington contributed to this report.

    ___

    The Associated Press receives support from several private foundations to enhance its explanatory coverage of elections and democracy. See more about AP’s democracy initiative here. The AP is solely responsible for all content.

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  • Lost in the market’s sharp rotation out of tech stocks is a really bullish call on major banks

    Lost in the market’s sharp rotation out of tech stocks is a really bullish call on major banks

    Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

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  • Trump proposes strategic national crypto stockpile: ‘Never sell your bitcoin’

    Trump proposes strategic national crypto stockpile: ‘Never sell your bitcoin’

    Republican presidential nominee and former U.S. President Donald Trump walks off stage after speaking at a campaign rally at the Van Andel Arena in Grand Rapids, Michigan, on July 20, 2024.

    Anna Moneymaker | Getty Images

    NASHVILLE — Former President Donald Trump said that if he were returned to the White House, he would ensure that the federal government never sells off its bitcoin holdings. But he stopped short of proposing a formal federal reserve of digital currency.

    “For too long our government has violated the cardinal rule that every bitcoiner knows by heart: Never sell your bitcoin,” Trump said during his keynote speech at this year’s Bitcoin Conference in Nashville, the biggest bitcoin conference of the year.

    The former president’s remarks came as the race to capture the votes and the campaign cash of America’s frontline fintech adopters takes center stage in the 2024 presidential contest.

    “This afternoon I’m laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world and we’ll get it done,” Trump said.

    But Trump’s pledge to simply maintain the U.S. government’s current bitcoin holdings was a less radical pitch to the crypto crowd relative to other proposals at the conference.

    Third-party candidate Robert F. Kennedy Jr., for instance, during his Friday Bitcoin Conference speech promised to launch a reserve of 4 million bitcoin, starting with the bitcoin holdings that the U.S. government already has stockpiled from criminal seizures. Kennedy said he would mandate the government purchase 550 bitcoin a day until the reserve reached 4 million.

    Shortly after Trump’s speech, Sen. Cynthia Lummis, R-Wy., read out her own legislative proposal to amass an official U.S. federal reserve of 1 million bitcoin over five years.

    “It will be held for a minimum of 20 years and can be used for one purpose: Reduce our debt,” Lummis said.

    The price of bitcoin briefly dipped during Trump’s speech, but recovered and was up slightly for the day, as of 5:15 p.m. E.T.

    Throughout his remarks, the former president worked to draw contrasts between the Republican Party’s growing embrace of crypto versus the hardline regulatory approach that has characterized the Biden administration.

    “The Biden-Harris administration’s repression of crypto and bitcoin is wrong and it’s very bad for our country,” Trump said. “Let me tell you if they win this election, every one of you will be gone. They will be vicious. They will be ruthless. They will do things that you wouldn’t believe.”

    Trump went on to list a series of crypto-friendly promises to a crowd of cheering bitcoin supporters, promising to dismantle what he called the “anti-crypto crusade” of President Joe Biden and Vice President Kamala Harris.

    “On day one, I will fire Gary Gensler,” Trump said, referencing the Biden-appointed chairman of the Securities and Exchange Commission who has taken an aggressive approach to crypto regulation.

    The president does not have the power to fire appointed commissioners. Even if Trump were to appoint a new SEC chairman, Gensler would remain a commissioner on the independent agency.

    The former president also pledged to create a “bitcoin and crypto presidential advisory council.”

    “The rules will be written by people who love your industry, not hate your industry,” Trump said.

    The Republican presidential nominee also held an accompanying fundraiser in Nashville, with tickets topping out at $844,600. In June, BTC Inc. CEO David Bailey, who organized the conference, pledged to raise $100 million and turn out more than 5,000,000 voters for the Trump re-election effort, as the bitcoin sector increasingly turns to the Trump camp for support.

    Trump taking the main stage to directly address the bitcoin community is the latest in a months-long campaign to appeal to the crypto contingent, including accepting donations in virtual tokens, pledging to end President Joe Biden’s “war on crypto,” and advocating that all future bitcoin be made in America. It is also quite the about-face by the Republican presidential nominee.

    Trump very publicly dismissed bitcoin when he was in the White House. In July 2019, he said he was “not a fan” of bitcoin and other cryptocurrencies. He said that tokens aren’t money, that their value was “based on thin air,” and warned that unregulated crypto assets could help facilitate the drug trade, among “other illegal activity.”

    “Bitcoin just seems like a scam,” he told Fox in a phone interview in 2021. “I don’t like it because it’s another currency competing against the dollar.”

    “I want the dollar to be the currency of the world, that’s what I’ve always said,” continued Trump in his conversation with Fox.

    But five years, a lost presidential election, and millions of dollars from the crypto lobby later, the Republican presidential nominee sung the praises of the digital currency at the biggest bitcoin conference of the year in Nashville, which kicked off on Thursday.

    “Bitcoin stands for freedom, sovereignty and independence from government coercion and control,” Trump said during his keynote speech.

    Trump’s shift on bitcoin comes as the Republican Party pledges to lift the red tape of the Biden-Harris administration, working to turn crypto regulation into a voting issue for November, especially as inflation consistently ranks as a top voter priority in polls.

    As crypto lobbyists and supporters become more of a presence in Washington, it raises questions on whether the Democratic Party will dig into the hardline regulatory approach of the past several years or ease its position.

    “Every presidential candidate needs to understand, digital asset, pro-innovation voters are here to stay,” Democratic Rep. Wiley Nickel of North Carolina told CNBC in an interview, adding that crypto regulation should not become a “partisan political football.”

    “I want to keep this as a bipartisan issue. I don’t want Donald Trump to politicize this issue,” Rep. Nickel said.

    Rep. Ro Khanna, D-Ca., echoed Rep. Nickel’s sentiment, saying that crypto should not turn into a partisan talking point but will require regulation like any technology.

    “I don’t really see why it’s partisan. Being against bitcoin is like being against cell phones. It’s like being against AI. It’s like being against laptops,” Khanna told CNBC. “It’s a technology. Have thoughtful regulation on the technology, but it’s a technology that has appreciated from about $10,000 to $80,000.”

    Reps. Khanna and Nickel were two of the only Democrats to attend the Bitcoin Conference.

    Bitcoin 2024 conference organizers say they were briefly in talks to have Vice President Kamala Harris appear at the conference, though she ultimately declined. But billionaire businessman Mark Cuban posted on X that the Harris campaign had reached out with questions about crypto, so it appears the vice president is looking into this space and potentially figuring out where her policies, if elected president, could land.

    “I think we’re going to hear from Vice President Harris soon on this. And I’m very optimistic we’re gonna get a reset. And that I think, will matter in a major way,” Rep. Nickel said. “This issue isn’t going anywhere. And we’ve got to make sure we continue to embrace this in bipartisan way.”

    Harris’ team has already begun to reach out to people close to crypto companies to set up meetings, the Financial Times reported on Saturday.

    Bitcoin surges as namesake conference welcomes Donald Trump to Nashville

    Trump’s 180 on bitcoin

    The recent thaw in Trump’s sentiment for the digital asset space has coincided with a sudden influx of interest and cash from the country’s top tech talent.

    He has raised more than $4 million in a mix of cryptocurrencies, including bitcoin, ether, the U.S. dollar pegged stablecoin USDC, and various memecoins, with contributors hailing from 12 states, including a few battlegrounds. 

    Crypto billionaire twins and venture investors Tyler and Cameron Winklevoss led the charge, each contributing 15.57 bitcoin, or just over $1 million at the time of their donation, according to a filing with the Federal Election Commission — though they received a partial refund, because contributions surpassed the $844,600 limit.

    There are a number of other venture capitalists who are pro-crypto, and they’ve pledged millions to the Trump campaign, as well.

    Venture capitalists Marc Andreessen and Ben Horowitz told employees of Andreessen Horowitz (a16z) that they plan to make significant donations to political action committees supporting  Trump’s campaign. The partners of Sequoia Capital are backing Trump, as is venture investor David Sacks, who helped the former president raise $12 million at a fundraiser he hosted in his San Francisco home. The chief legal officers for centralized crypto exchange Coinbase and blockchain giant Ripple were both there.

    These members of the tech elite are also heavily contributing to pro-crypto super PACs like Fairshake, which has raised more than $200 million dollars to elect pro-crypto candidates up and down the ballot, and on both sides of the aisle.

    But reporting from NBC News finds that the vice president’s team is looking to win over support from some of big tech’s undecided donors, many of whom remained on the sidelines while President Joe Biden remained in the race. Their tune may be changing now that the vice president is the de facto nominee for the party.

    It helps that Harris has a long track record in California. 

    She has been fundraising in the tech community for years, including from those working at Amazon, Alphabet, Microsoft and Apple.

    “The pivot that has occurred in the last three days is dramatic,” Steve Westly, a venture capitalist and one-time gubernatorial candidate for California, told NBC News. “I don’t think I’ve ever seen such a surge of enthusiasm in any campaign I’ve been involved with.” 

    This comes as Trump’s running mate for vice president, JD Vance, is set to hold a fundraiser of his own in Palo Alto on Monday. 

    — CNBC’s Rebecca Picciotto contributed to this report.

    Bitcoin 2024 conference underway: Here's what to know

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  • Nvidia supplier SK Hynix posts highest quarterly profit in 6 years on AI chip leadership

    Nvidia supplier SK Hynix posts highest quarterly profit in 6 years on AI chip leadership

    A man walks past a logo of SK Hynix at the lobby of the company’s Bundang office in Seongnam on January 29, 2021.

    Jung Yeon-Je | AFP | Getty Images

    SK Hynix, one of the world’s largest memory chipmakers, on Thursday said second-quarter profit hit its highest level in 6 years as it maintains its leadership in advanced memory chips critical for artificial intelligence computing.

    Here are SK Hynix’s second-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:

    • Revenue: 16.42 trillion Korean won (about $11.86 billion), vs. 16.4 trillion Korean won
    • Operating profit: 5.47 trillion Korean won, vs. 5.4 trillion Korean won

    Operating profit in the June quarter hit its highest level since the second quarter of 2018, rebounding from a loss of 2.88 trillion won in the same period a year ago.

    Revenue from April to June increased 124.7% from 7.3 trillion won logged a year ago. This was the highest quarterly revenue ever in the firm’s history, according to LSEG data available since 2009.

    SK Hynix on Thursday said that a continuous rise in overall prices of its memory products — thanks to strong demand for AI memory including high-bandwidth memory — led to a 32% increase in revenue compared with the previous quarter.

    The South Korean giant supplies high-bandwidth memory chips catering to AI chipsets for companies like Nvidia.

    Shares of SK Hynix fell as much as 7.81% Thursday morning.

    The declines came as the South Korea’s Kospi index lost as much as 1.91% after U.S. tech stocks sold off overnight, following disappointing Alphabet and Tesla earnings. Those reports mark investors’ first look at how megacap companies fared during the second quarter.

    “In the second half of this year, strong demand from AI servers are expected to continue as well as gradual recovery in conventional markets with the launch of AI-enabled PC and mobile devices,” the firm said in its earnings call on Thursday.

    Capitalizing on the strong AI demand, SK Hynix plans to “continue its leadership in the HBM market by mass-producing 12-layer HBM3E products.”

    The company would begin mass production of the 12-layer HBM3E this quarter after providing samples to major customers and expects to ship to customers by fourth quarter.

    Tight supply

    Memory leaders like SK Hynix have been aggressively expanding HBM capacity to meet the booming demand for AI processors.

    HBM requires more wafer capacity than regular dynamic random access memory products – a type of computer memory used to store data – which SK Hynix said is also struggling with tight supply.

    “Investment needs are also rising to meet demand of conventional DRAM as well as HBM which requires more wafer capacity than regular DRAM. Therefore, this year’s capex level is expected to be higher than what we expected in the beginning of the year,” said SK Hynix.

    “While overcapacity is expected to increase next year due to the increased industrial investment, a significant portion of it will be utilized to ramp up production of HBM. So the tight supply situation for conventional DRAM is likely to continue.”

    SK Kim of Daiwa Capital Markets in a June 12 note said they expect “tight HBM and memory supply to persist until 2025 on a bottleneck in HBM production.”

    “Accordingly, we expect a favourable price environment to continue and SK Hynix to record robust earnings in 2024-25, benefitting from its competitiveness in HBM for AI graphics processing unit and high-density enterprise SSD (eSSD) for AI-servers, leading to a rerating of the stock,” Kim said.

    High-bandwidth memory chip supplies have been stretched thanks to explosive AI adoption fueled by large language models such as ChatGPT.

    The AI boom is expected to keep supply of high-end memory chips tight this year, analysts have warned. SK Hynix and Micron in May said they are out of high-bandwidth memory chips for 2024, while the stock for 2025 is also nearly sold out.

    Large language models require a lot of high-performance memory chips as such chips allow these models to remember details from past conversations and user preferences in order to generate humanlike responses.

    SK Hynix has mostly led the high-bandwidth memory chip market, having been the sole supplier of HBM3 chips to Nvidia before rival Samsung reportedly cleared the tests for the use of its HBM3 chips in Nvidia processors for the Chinese market.

    The firm said it expects to ship the next generation 12-layer HBM4 from the second half of 2025.

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  • A Silicon Valley executive had $400,000 stolen by cybercriminals while buying a home. Here’s her warning

    A Silicon Valley executive had $400,000 stolen by cybercriminals while buying a home. Here’s her warning

    Real estate, with its large transaction sizes and frequent use of bank wires, has proven to be an especially lucrative target for cybercriminals.

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  • Microsoft, CrowdStrike IT outage hits global supply chain, with air freight facing days or weeks to recover

    Microsoft, CrowdStrike IT outage hits global supply chain, with air freight facing days or weeks to recover

    A FedEx cargo plane.

    Leslie Josephs | CNBC

    The CrowdStrike software bug that crashed Microsoft operating systems and caused the largest IT outage in history caused disruptions at U.S. and global ports, with highly complex air freight systems suffering the heaviest hit, according to logistics experts, as global airlines grounded flights.

    “Planes and cargo are not where they are supposed to be and it will take days or even weeks to fully resolve,” Niall van de Wouw, chief air freight officer at supply chain consulting firm Xeneta, said in a statement shared with CNBC. “This is a reminder of how vulnerable our ocean and air supply chains are to IT failure.” 

    Thousands of flights were grounded or delayed at the world’s largest air freight hubs in Europe, Asia and North America.

    The new issue for the global supply chain comes amid a rise in global demand, with shipments up 13% year-over-year in June. Air freight supply has increased, but only by 3% year-on-year, already causing higher costs for shippers due to the limited capacity, according to Xeneta. “Shippers already had concerns about air freight capacity due to huge increases in demand in 2024, driven largely by the extraordinary growth in e-commerce goods being exported from China to Europe and the U.S.,” van de Wouw said. “Available capacity in the market is already limited so airlines are going to struggle to move cargo tomorrow that should have been moved today.

    Pete Buttigieg, U.S. Secretary of Transportation, told CNBC on Friday morning that what the government is watching for over the course of the day, as the issue has been identified, is “the kind of ripple or cascade effects as they get everything back in their networks back to normal.”

    “These systems, these flights, they run so tightly, so back to back that even after a root cause has been addressed you can still feel those impacts throughout the day,” Buttigieg said.

    He said the FAA’s operational systems, like air traffic control or most systems within the U.S. Department of Transportation, as well as major urban transit systems, such as New York City’s MTA, were operating though there could be “spot” issues throughout the day. But “as far as the airlines themselves we are going to definitely be expecting more there,” he said.

    FedEx said in a statement that it has activated contingency plans, but added that “potential delays are possible for package deliveries” expected Friday.

    UPS said in a statement that computer systems in the U.S. and Europe were affected, but its airline continues to operate effectively, and drivers are on the roads delivering for customers. “We are continuing to work to resolve all issues as quickly as possible; there may be some service delays,” UPS stated.

    Ports, freight rails, report some issues, but normal operations

    Most rails and ports were faring better after some early morning disruptions.

    Only one major U.S. freight railroad reported issues related to the IT outage, with Union Pacific confirming in an email to CNBC that it had varying levels of impact across its network.

    “Our backup protocols enable us to communicate with our teams and dispatchers. We are doing everything possible to keep freight moving, but there have been some processing delays in customer shipments as we address targeted areas impacted on our network. We will continue to keep our stakeholders updated as we address the outage over the next 24 hours,” Union Pacific said in the emailed statement.

    Other major freight operators, including CSX, Norfolk Southern and BNSF, a subsidiary of Berkshire Hathaway said their operations are not currently affected.

    Buttigieg said that at the ports, small issues can turn into a big issue, noting that even with ships and cranes operational, gates were affected, which meant the trucks couldn’t come in or out, which led to delays at certain ports, but they are “up and running and open for business today,” he added.

    The Port of Houston, the fifth-largest port in the U.S., said it experienced “major system outages” overnight, but said that all of its systems are now up and running with “minimal delay to operations.”

    The Port of Los Angeles, the nation’s largest port, confirmed to CNBC that one of its terminals, APM Terminals, was down temporarily, but came back up in the early morning. In an email to clients, APM, a subsidiary of Maersk, notified trucking clients that the port was “able to recover rather quickly,” and it restarted operations around 2 a.m. Any drivers not able to complete their pickups were told to contact the company’s import group so they could secure a new appointment to have a demurrage waiver for those containers.

    Mario Cordero, executive director of the Port of Long Beach, said there were minimal impacts to some of its terminals, but systems are up or in the process of being restored.

    The Port of New York and New Jersey reported a delay in the opening of two terminals, but within a few hours, the terminals were back up and running.

    “The Port Authority has been working closely with impacted terminal operators since the overnight hours, assisting in their recovery while also communicating updates through a multitude of channels to the port’s vast community of stakeholders,” said Bethann Rooney, port director at the Port Authority of New York and New Jersey. She said the port was able to initiate “a quick and efficient response to get cargo moving again.”

    All marine terminals were open by 8 a.m. The Port Authority agency was not impacted by the outage.

    Not all ports use systems that incorporate CrowdStrike software, with the Port of Savannah and the Port of Virginia both reporting “normal operations.”

    Emily Stausbøll, Xeneta senior shipping analyst, told CNBC that the IT outage has the potential to cause significant disruption at ports if ships are prevented from offloading and loading containers, and that can cascade through the supply chain.

    “There are also knock-on impacts across inland supply chains if truck and rail services are unable to pick up and drop off cargo at the port,” Stausbøll said.

    She noted that In May, Charleston Port on the U.S. East Coast shut for two days due to a software failure, which resulted in a port congestion increase of 200%. “Port congestion has been a major problem during 2024. While it is now easing, there is no slack in the system and any disruption will push the needle back into the red,” she said.

    Maritime intelligence company Kpler told CNBC early indications showed the global IT outage affecting operations at global ports including Poland’s Gdansk, and Dover, Felixstowe and Liverpool in the U.K.

    Rotterdam, the largest port in Europe, informed customers on its website of possible disruptions, but In an email to CNBC, a port spokesman said critical port operations of the Harbour Master Division and nautical service providers remain operational. “However, some companies in the port, including a container terminal, are experiencing issues due to the disruption and have adjusted their processes. They are working on a solution.”

    Matt Wright, senior freight analyst at Kpler, said the outage could lead to some delays at the affected ports, but with Microsoft and Crowdstrike reporting a fix being implemented, resumption of normal operations later today would mean it is unlikely to cause any significant backlog.

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  • High-Flying Chipmakers See Worst Plunge Since 2020: Markets Wrap

    High-Flying Chipmakers See Worst Plunge Since 2020: Markets Wrap

    (Bloomberg) — The world’s largest technology companies got hammered as concern about tighter US restrictions on chip sales to China spurred a selloff in the industry that has led the bull market in stocks.

    Most Read from Bloomberg

    From the US to Europe and Asia, chipmakers came under heavy pressure. American powerhouses Nvidia Corp., Advanced Micro Devices Inc. and Broadcom Inc. drove a closely watched semiconductor gauge down almost 7% — the most since 2020. Across the Atlantic, ASML Holding NV tumbled over 10% even after the Dutch giant reported strong orders. A plunge in Tokyo Electron Ltd. led the Nikkei 225 Stock Average lower.

    Wednesday’s action reprised a recent trend in which capitalization-weighted indexes underperformed the average stock, a consequence of weakness in the megacaps that dominate them. With firms such as Apple Inc. and Microsoft Corp. each making up 7% of the S&P 500, losses are hard to offset even when most of the index’s constituents are up — as they were today.

    The Biden administration told allies it’s considering severe curbs if companies like Tokyo Electron and ASML keep giving China access to advanced semiconductor technology. The US is also weighing more sanctions on specific Chinese chip firms linked to Huawei Technologies Co.

    “This news on the chip front is the kind of UFO (UnForeseen Occurrence) that could indeed create the kind of selling that could be the catalyst for a tradable correction in the stock market,” said Matt Maley at Miller Tabak + Co. “Broad indices have become very overbought.”

    The S&P 500 fell 1.4%. The Nasdaq 100 had its worst day since 2022. A gauge of the “Magnificent Seven” giant companies slipped 3.4%. The Russell 2000 of small firms dropped 1.1%. Wall Street’s “fear gauge” — the VIX — hit the highest since early May. In late hours, United Airlines Holdings Inc. sank on a bearish outlook.

    A pair of chipmakers defied the selloff: Intel Corp. and Globalfoundries Inc. And the Dow Jones Industrial Average climbed for a sixth straight day — notching another record. Financial shares outperformed, with U.S. Bancorp surging on solid results.

    The bond market saw small moves. The Federal Reserve’s Beige Book showed slight economic growth and cooling inflation. The most-notable speaker on Wednesday was Governor Christopher Waller, who said the Fed is getting “closer” to cutting rates, but is not there yet. The yen led gains in major currencies, up almost 1.5%.

    The Biden administration is in a tenuous position. US companies feel that restrictions on exports to China have unfairly punished them and are pushing for changes. Allies, meanwhile, see little reason to alter their policies when the presidential election is just a few months away.

    “Normally, the impact of these types of headlines isn’t long-lasting, but in this case, we would note that semis have been underperforming the broader market for the last couple of weeks now,” said Bespoke Investment Group strategists. “So that’s something to watch.”

    The tech underperformance is coming after a first half which saw megacaps like Nvidia, Microsoft Corp. and Alphabet Inc. propel the market higher, stretching valuations for these names and leaving them with a tougher setup for the rest of 2024.

    Can the market keep powering ahead without tech?

    “Much of this year’s equity gains have come from a handful of names currently under direct threat from the political arena,” said Jose Torres at Interactive Brokers. “An important question is if the rest of the market, which generally lacks thrilling tales on a relative basis, can offset the waning momentum in ‘Magnificent Seven’ stocks.”

    At Goldman Sachs Group Inc., Scott Rubner says “I am not buying the dip.”

    The tactical strategist bets the S&P 500 has nowhere to go from here but down. That’s because this Wednesday, July 17, has historically marked a turning point for returns on the equity benchmark, he said, citing data going back to 1928. And what follows, he says, is August — typically the worst month for outflows from passive equity and mutual funds.

    Jonathan Krinsky at BTIG says the market is “nearing the end of the typical bullish window.”

    Sentiment remains extremely complacent on the surveys and transactional indicators, he noted.

    “While the rotation out of megacap tech into cyclicals and small-caps is encouraging, it felt a bit forced happening in such a short period of time,” Krinsky said. “Even if this is going to be a more long-lasting rotation, we likely won’t be able to see that new leadership until after we see a higher correlation correction and then see what leads coming out of that.”

    Corporate Highlights:

    • Tesla Inc. forming an autonomous taxi platform will be the catalyst for a roughly 10-fold increase in its share price, Ark Investment Management LLC’s Cathie Wood said, echoing years of bullish predictions about a business the carmaker has yet to stand up.

    • Amazon.com Inc.’s marketing portal for merchants crashed Tuesday night, according to multiple Amazon sellers and consultants, fouling up one of the online retailer’s biggest sales of the year.

    • Morgan Stanley became the latest big Wall Street bank to tap the US investment-grade market Wednesday after reporting earnings, as strong investor demand helps lenders borrow at lower yields than would have been possible at the start of the month.

    • Johnson & Johnson’s second-quarter profit beat Wall Street projections on strong pharmaceutical sales, while the company cut its full-year forecast to account for a spate of recent acquisitions.

    Key events this week:

    • ECB rate decision, Thursday

    • US initial jobless claims, Philadelphia Fed manufacturing, Conference Board LEI, Thursday

    • Fed’s Mary Daly, Lorie Logan and Michelle Bowman speak, Thursday

    • Fed’s John Williams, Raphael Bostic speak, Friday

    Some of the main moves in markets:

    Stocks

    • The S&P 500 fell 1.4% as of 4 p.m. New York time

    • The Nasdaq 100 fell 2.9%

    • The Dow Jones Industrial Average rose 0.6%

    • The MSCI World Index fell 0.9%

    Currencies

    • The Bloomberg Dollar Spot Index fell 0.3%

    • The euro rose 0.3% to $1.0936

    • The British pound rose 0.3% to $1.3008

    • The Japanese yen rose 1.4% to 156.19 per dollar

    Cryptocurrencies

    • Bitcoin fell 0.1% to $64,610.01

    • Ether fell 0.7% to $3,416.9

    Bonds

    • The yield on 10-year Treasuries was little changed at 4.15%

    • Germany’s 10-year yield was little changed at 2.42%

    • Britain’s 10-year yield advanced three basis points to 4.08%

    Commodities

    • West Texas Intermediate crude rose 2.6% to $82.89 a barrel

    • Spot gold fell 0.4% to $2,457.97 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Cecile Gutscher and Sujata Rao.

    Most Read from Bloomberg Businessweek

    ©2024 Bloomberg L.P.

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  • Our 5 top-performing stocks since June’s monthly meeting (only one is Big Tech)

    Our 5 top-performing stocks since June’s monthly meeting (only one is Big Tech)

    A trader works, as a screen broadcasts a news conference by U.S. Federal Reserve Chair Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange in New York City, U.S., June 12, 2024. 

    Brendan Mcdermid | Reuters

    It’s been another great run for stocks since the Club’s last monthly meeting in June.

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  • San Francisco’s AI boom can’t stop real estate slide, as office vacancies reach new record

    San Francisco’s AI boom can’t stop real estate slide, as office vacancies reach new record

    Artificial intelligence has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market.

    The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.

    Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.

    San Francisco is reeling from the twin challenges of bringing people back to the office after the Covid pandemic and a slowdown in the tech market that’s led to mass job cuts across the industry. Tech companies have laid off more than 530,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet, Meta, Amazon, Tesla, Microsoft and Salesforce.

    Softening the blow of late has been the soaring popularity of generative AI and the decision by fast-growing startups to open large offices in San Francisco.

    OpenAI, the market leader with a private valuation that’s topped $80 billion, announced in October that it was leasing about 500,000 square feet of space in the Mission Bay neighborhood, the biggest office lease in the city since 2018. Robert Sammons, senior research director at Cushman & Wakefield, said OpenAI is continuing to look for more space in the city.

    Also last year, OpenAI rival Anthropic subleased 230,000 square feet at Slack’s headquarters. And in May of this year, Scale AI signed a lease for a reported 170,000 to 180,000 square feet of space in Airbnb’s office building.

    “San Francisco is certainly the center of AI, but AI is not going to save the San Francisco commercial real estate market,” Sammons said. “It will help.”

    While richly capitalized AI startups are signing large leases for new space, the bigger trend is that tech companies, law offices and consulting firms are looking to reduce their footprint when existing leases come up, Sammons said, reflecting the widespread move to hybrid work.

    In many cases, companies are looking to relocate to higher quality space in more desirable parts of the city, because prices have come down and employers need to be near restaurants and shops to get staffers to come back, Sammons added.

    “The best quality trophy space continues to perform well, because tenants want to be in the best locations with the best amenities around them,” Sammons said.

    Some of the city’s top employers, including Salesforce, Uber, Visa and Wells Fargo, have brought employees back to offices for part of the week. That’s helped in the financial district, where the vacancy rate is still 34.2% on the north side and 32.7% on the south side at the end of the quarter. In SoMa, which historically was a popular area for venture-backed startups, the vacancy rate is almost 50%.

    SoMa is further away from mass transit options and has also been hurt by large retail departures. Vacant office space across San Francisco for the quarter totaled 29.6 million square feet, Cushman & Wakefield said.

    The firm said in its report that there are positive signs in the market, with absorption poised to improve in the second half and office job numbers stabilizing following a steep drop-off. But Sammons said it looks like there’s more room for rents to fall and for vacancies to rise. Uncertainty surrounding the upcoming presidential election may be a factor delaying new leases, he said.

    “Sometimes tenants postpone making decisions when there are major elections,” he said.

    WATCH: Commercial real estate vacancies in San Francisco are at an all-time high

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  • Asia-Pacific markets open higher ahead of business activity data from the region

    Asia-Pacific markets open higher ahead of business activity data from the region

    A block of industrial factories sits among newer apartment buildings along a canal in Tokyo, Japan. 

    Photo By Michael Russell | Moment | Getty Images

    Asia-Pacific markets opened higher on Wednesday, after U.S. Federal Reserve Chair Jerome Powell noted progress on inflation, but reiterated patience on cutting rates at a central banking forum.

    Traders in Asia await June business activity data from India, Japan and China which is set for release later in the day.

    Japan’s Nikkei 225 was up 0.45% extending its run above the 40,000 mark, while the broad-based Topix was up 0.11%.

    South Korea’s Kospi started the morning up 0.50%, while the Kosdaq Index rose 0.8%.

    Australia’s S&P/ASX 200 opened up 0.17% in early trade.

    Hong Kong Hang Seng index futures were at 17,764, lower than the HSI’s last close of 17,769.14.

    Overnight in the U.S., the Dow Jones Industrial Average gained 0.41%, the S&P 500 gained 0.62%, and the Nasdaq Composite jumped 0.84%. Both the Nasdaq and the S&P 500 hit record high closes.

    Tesla shares helped lift the S&P 500 after Elon Musk’s electric vehicle company beat expected deliveries for the second quarter.

    —CNBC’s Pia Singh and Sarah Min contributed to this report.

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  • Amazon is doubling value of credits for some startups to build on AWS as Microsoft cloud gains ground

    Amazon is doubling value of credits for some startups to build on AWS as Microsoft cloud gains ground

    Amazon will double the value of credits it offers some startups to use its cloud infrastructure, CNBC has learned, as the company faces heightened competition from Microsoft in artificial intelligence services.

    Starting July 1, startups that have raised a Series A round of funding in the past year will be eligible for $200,000 in credits through AWS’ Activate program, up from $100,000 before, the Amazon cloud unit said in an email to venture capitalists this week. Seed-stage startups will still be eligible for $100,000 in credits, AWS said.

    Two people briefed on the changes confirmed the credit increase, though they asked not to be named because the information is private.

    Matt Garman, who was recently promoted to CEO of AWS after running sales and marketing, was meeting with founders in Silicon Valley this week, the people said. Garman told the execs that collaborating with startups would always be a primary focus, one of the people said, adding that Garman described AI companies as AWS’ ideal customers.

    An AWS spokesperson confirmed the increase in credits and Garman’s visit to Silicon Valley. The spokesperson added that in the past, the $100,000 would expire in one year, while the $200,000 credit will now expire in three years.

    Amazon, which is best known for its massive online retail operation, derives most of its profit from AWS, a business it launched in 2006, well before rivals Microsoft and Google hit the scene. AWS leads the market, with $25 billion in revenue in the first quarter, up 17% from a year earlier.

    But Microsoft Azure and Google Cloud are growing more quickly, and are benefiting from rapidly advancing AI models. Backed by Microsoft, OpenAI launched ChatGPT in late 2022 on Azure, and has since attracted a wave of AI workloads to Microsoft from companies big and small. Google has a number of large language models, most notably Gemini.

    Amazon has been trying to catch up in generative AI and has poured billions of dollars into OpenAI challenger Anthropic.

    Last month, AWS CEO Adam Selipsky announced his resignation after three years running the business, with Garman named as his successor. During Selipsky’s time at the helm, Microsoft and Google increased their share of the cloud infrastructure market. One analyst told CNBC that Microsoft “ran laps around” AWS in generative AI.

    Startups have long been fertile ground for cloud infrastructure companies, as they try and lure ambitious founders who could be building the next multibillion-dollar business.

    In November, Microsoft announced a partnership with Silicon Valley accelerator Y Combinator that would provide participating startups with $350,000 in Azure credits and access to graphics processing units (GPUs) for training AI models, a spokesperson said. Microsoft has since extended the $350,000 credit incentive to other accelerators, including the AI Grant.

    Startups enrolled in Microsoft’s Founders Hub program, which doesn’t require previous venture funding, can receive up to $150,000 in Azure credits over four years.

    In addition to its Activate offering, Amazon has a new 10-week generative AI accelerator program. Participants will be able to access up to $1 million in cloud credits, according to the website.

    Earlier on Friday, Amazon’s head scientist, Rohit Prasad, told employees that the company has hired David Luan, co-founder and CEO of AI startup Adept, along with some of Luan’s colleagues. “Amazon is also licensing Adept’s agent technology, family of state-of-the-art multimodal models, and a few datasets,” Adept said in a blog post.

    WATCH: AWS will boost investments in Singapore’s cloud infrastructure by $9 billion

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