Taiwan Eyes China AI Chip Sales Curbs; OpenAI Files for IPO

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.

**Caroline Hyde** (0:21)
This is Bloomberg Tech. Coming up, Taiwan weighs some of its toughest restrictions yet on AI chip sales to China. We'll have the details. Plus the AI IPO race that heats up with OpenAI joining its rivals with plans for a potential public listing later this year.
And Apple lays the foundation for the AI era. But how soon will it come as it hints that the company's upcoming foldable iPhone is on deck? But first, a check on those markets. We're off by eight tenths of a percent. We have been optimistic to start trade, and then suddenly we've turned quite a leg lower into negative territory. And it is tech chip stocks in particular that drag us lower, but it's also the key player that is Apple, key player that is Nvidia, that drag us down from a points perspective. I shine a light on what's happening in terms of hardware, the Philly Semiconductor Index, the SOX as we call it, 1.8% lower on the day. After having reprieved some of the Friday sell-off, yesterday's trade, Apple off again, the juggernaut off by 2.7%. That's important in terms of points. It's important to the overall index, and it drags the S&P 500 lower as well. I suppose there's some anxiety as to when, really, we will get Siri AI in our hands. But first, we also talk Taiwan. And it is weighing some of its toughest restrictions yet on AI chip sales through China. A move that will bring it closer in line with Washington amid mounting US concern over technology leakage and national security.
For more on what it means for the AI race and the US-China tech tensions, we're joined by Bloomberg's global tech editor, Peter Elstrom. Is this significant, this move?

**Peter Elstrom** (1:51)
It's certainly significant. The most sophisticated chips in the world are made in Taiwan by TSMC, of course. And what we understand from our sources is that the Taiwanese government is now weighing these restrictions on making it a crime to export advanced AI chips to China. Now, as you mentioned, this is in line with US restrictions already, where Nvidia can't sell its most advanced AI chips to China, for example. But why is this important for Taiwan? It is because they hold that place as the manufacturer of these key chips. But also, Taiwanese authorities will be able to use more tools to be able to enforce these restrictions within Taiwan. They did detain their first person because of these export restrictions a while ago, but they had to do it because of falsifying documents, not because it's a crime right now to smuggle chips out of the country. So it gives them a few more tools to be able to enforce these restrictions. It's a sign that President Lither in Taiwan is taking a much harder line against China.

**Caroline Hyde** (2:48)
And what does that mean for relationships between the US and China? What does that mean in terms of more bellious conversation coming from the leadership in China against Taiwan?

**Peter Elstrom** (2:57)
Well, you're alluding to the complexity of the situation. I mean, we just saw President Trump go and visit Xi in China. They talked about these very issues. There was a lot of discussion about many different things, including trade and technology in particular. So, it's a moving playing field at this point. And the Trump administration has signaled that it would allow NVIDIA to sell the H200 chips, for example, into China. China isn't sure that it wants that.
They also would like to develop their own domestic semiconductor industry. They want to support Huawei and other companies like that that are trying to build in this area. So, it's a complicated task. It certainly does mean that there are tensions that remain between the two countries when it comes to these kinds of technologies. And there's not a resolution in the near future.

**Caroline Hyde** (3:43)
We just saw, in fact, China preparing 2 trillion yuan of spending to really focus on its own domestic AI build out, whether that be data centers. In many ways, that's going to be a focus on its own chips. But Peter, we also got that sort of interesting news that the Pentagon is really, once again, reamping some of the concerns about Chinese companies, tech companies and their relationship with the military.
All of this spells that antagonism just remains.

**Peter Elstrom** (4:10)
Yeah, the first story you mentioned is a very important one. Again, a people familiar story that we wrote about how China is weighing this plan to invest two trillion won, roughly $300 billion into data centers in the country. This is kind of the missing piece in the Chinese AI industry at this point. As we saw with DeepSeek, Alibaba's work with Gwen in particular, they've been quite successful at developing advanced models, but they've made nowhere near the kinds of investments in infrastructure and data centers that we've seen in the US. Now, $300 billion works out to about $60 billion a year over five years. It's not nearly as much as the four hyperscalers are spending. They're aiming for $725 billion this year. So it's a 10-to-1 ratio. But these data centers are much less expensive in China, and it's a sign that they're going to compete on this infrastructural level as well as the model level. So that's a big step for them.