pduced in real time during grand prix around the world. ♪♪ on the next "inside track"... formula 1 is probably the largest team engineering competition in the world. what i'm doing is creating technologies and infrastructure that allow us not to produce a good car in '24, but allow us to produce a good car in 2026, '27, '28. ♪♪ a very warm welcome to squawk box europe. look at the cars today. myself, steve sedgwick, karen cho, julianna tatelbaum and arjun kharpal. what more could you want? oh, you want the headlines? okay, here they are.

>> us and chinese officials meet in london in a bid to defuze trade tensions and potentially strike a new deal on tariffs. >> the eu welcomes china's proposal to fast track rare earth exports, saying the issue is of strategic importance to the bloc, whilst beijing says it expects reciprocal measures to promote trade in high tech products. >> president trump deploys the national guard in los angeles, drawing criticism from the state governor as violent protests over federal immigration raids and deportations extend into a third day. >> the fog is building around me here at london tech week, as prime minister keir starmer and nvidia ceo jensen huang are set to take the stage. peter carl, the secretary of state for science, innovation and technology, tells me the uk, uk is the place to be for ai. >> the uk is a stable economy now. we have stable politics. we are a great place to invest and a great place to do business now and invest in the ai future that

the world is starting to embrace. >> a new round of high level trade talks between the us and china are set to kick off in london today somewhere. the meeting comes just days after us president donald trump and chinese president xi jinping held their first direct phone call since trump's return to the white house. isn't it extraordinary? it took that long as the pair looked to break an impasse over trade tariffs. now, in a sign of cooling tensions ahead of today's meeting over the weekend, china said it had granted some applications for rare earth exports but didn't actually specify exactly which countries were approved. well, like a pouncing tiger waiting to pounce, waiting to travel to the exact hidden location. i mean, julian, it shouldn't be that hard. i presume there is a vast amount of london security.

getting to one position in london where these talks are. how on earth does no one know where they are? and by the way, i'm doing your job for you here. i'm checking every bit of news to see if anyone knows where they are. >> well, good luck to you, steve, because the location has been kept extremely quiet here. we saw this in geneva, both sides keeping their cards very close to their chest. that's what's happening again here in london. we've got our eye on the london streets around us for that motorcade, but no sign of it yet. but we do know that us and chinese officials are due to meet today from the us side. you've got treasury secretary scott bessent coming alongside the us trade representative, jamison greer, and a new addition to the negotiating team new to the talks. we. he wasn't there in geneva. and that's howard lutnick, the commerce secretary. now, why is that important? well, howard lutnick has oversight over export controls for the us administration, and that's where the focus is expected to be today on export controls beyond tariffs, which is where the

focus was back in geneva in may. when it comes to china's leverage, what it's bringing to the table here in talks in london today, china dominates the rare earth metals supply chain. china mines about 70% of the world's rare earths. these are critical minerals critical to the manufacturing of autos, chips, military equipment. and so the us countries around the world need access to these rare earths. and china since early april has been slow to grant export licenses, and the us has grown frustrated with the pace at which china is approving export licenses to send these rare earths around the world. so that could be a big sticking point. a big part of the discussion today from the chinese perspective, china would like to see the us ease up on some of its restrictions around advanced chip technologies. so could we see any agreement today? that's one of the big open questions here. could we see further movement on the tariff front right now heading into the talks today? tariffs on

chinese goods coming into the us stand at 30%. the rate on us goods going into china stands at 10%. after that trade truce in geneva. when it comes to the leverage, the us has the americans coming in to today, a lot of the leverage centers on the economic impact that the tariffs are having on the chinese economy. overnight, we saw price pressures continue to weaken in the month of may for the fourth month in a row. at the same time, exports plunged in the latest data. so the chinese economy is taking a big hit as a result of the trade war. so that's something to factor into the trade talks today, guys. >> indeed, giuliana, i was just taking a look at that. i could see starbucks actually said it would lower some of the prices of its ice drinks in china by an average of ¥5, again to the deflation story. and one wonders whether it's the economy, stupid. the economy matters here. after the chinese are throwing a ton of monetary stimulus and measures at the system, or whether it's the supply chain, stupid. whether that's a new phrase we should be coining because it's upending

all different countries. and it's not just the us and china with a stake in the game today. it's also europe, isn't it? >> it absolutely is europe. and i think that applies to the rare earths issue as well. china is critical in the rare earths supply chain, not just for the us, but for countries around the world. and, you know, the us right now is conducting negotiations with countries around the world here. and we know that the us has been urging countries to try to remove china from their supply chains. if china has this leverage over countries like those in the european union, then that could also factor in here. china's use of these export controls around rare earths to try to influence how europe negotiates with the us. so the supply chain picture very complex, and china is right at the center of it with huge leverage as a result of the investments made over the last several years into these critical minerals. and just lastly, on your point around

what's happening in the chinese domestic economy, the chinese government has been trying to stimulate the economy with various measures over the last several months. at the moment, karen, you and i had a great discussion with shawn rein a couple of weeks ago around whether we're seeing any anti-american backlash in china. no sign of it yet, he said. there's absolutely no hint of backlash against us goods in china, the likes of starbucks, but rather the chinese government wants to continue looking like a friendly place for foreign companies to invest because china is so worried about its own economy and it wants to just keep people employed, which is essential to political to social stability in china, which is essential to the chinese government. >> giuliana, thank you so much for setting the scene. now, i've got to say, you'd be thinking that maybe the uk would be trying to maximize this moment and that the prime minister, sir keir starmer, would be all in in terms of welcoming trade delegations and maybe he will be later on today. but at this stage he is focused on london tech week, which gets underway today with a focus on tech and

the age of ai. we are set to hear from the uk prime minister, along with the nvidia ceo jensen huang, in just a few minutes time. arjun, a lot's been made of why this is so pivotal. having jensen huang here, the prime minister turning up to a tech event. but there's also a view that london tech week kicks off with the shadow of ys deciding to opt for the united states as its primary listing. so the departure of some tech names as the uk is constantly trying to lure them back. >> yeah, absolutely. and in my interview just a few moments ago with peter carl, the secretary of state for science, innovation and technology, he was talking about the fact that there is still a gap in terms of unlocking that later stage investment, those big funding rounds you often see in the us, which is key, i think, for many of these kind of new age ai companies, which are investing heavily in infrastructure, etc. so that's one thing i think the uk needs to address very quickly. if it's to keep companies like ys and those who are starting up now and could be big companies in a few years time here in the uk and listing

on uk markets, that's one part of the tech equation, i think sir keir starmer, the prime minister, has just started speaking here and a big part of his pitch, i suspect today is going to be about positioning the uk as a key hub for ai. they've already been some announcements overnight by the companies like anyscale, which is building a data center with 10,000 nvidia gpus expected to come online next year. you had cloud computing firm saying they're going to be using 4000 gpus on online and bringing that online as well. so a lot of investment and talk today is going to be around investment in ai infrastructure in the uk in the hope of positioning the country around this theme and also the startups here as well. so be really interesting to hear what the prime minister has to say now, of course, joined by jensen huang, the ceo of nvidia, in just a few moments time. >> karan arjun, thank you very much for that. and keir starmer on stage currently, the prime minister just handed an envelope wondering what's in that envelope, but let's listen in. >> the challenges that we face as a country and in that tech and i were absolutely central

because, as you will perhaps have seen over the last three years or more during this awful conflict in ukraine, i've been back to ukraine on a number of occasions in that three year period, to have in-depth conversations with president zelensky to make sure that our support is in the right place. but i was really struck the trip before last that i did. this was probably about 6 or 7 weeks ago. the extent to which technology and i was now having a direct impact in that conflict was huge. in three years of conflict, the way in which that war was being fought had changed profoundly. and therefore what i wanted hardwired into our defense review was a real sense of how ai and tech would be driving our defense of the future. there are so many examples across government. i've set the challenge to all of my teams to show me how they can

use ai, not just in the output of government, not just in the partnership with yourselves and others and the delivery of services, but also in the very way that we do government. how do we transform what we do? and there are so many examples of that. i spoke to a social worker in downing street at one of our receptions, and she explained to me with a smile on her face, just how ai is slashing her paperwork and her caseload. and she showed and talked me through the way in which she's now doing her work. and what she said to me was that this was helping her transform the work that she did, because she could concentrate on the human element of it. she could use ai and tech to help her with the parts that could be done more quickly using tech and ai, and that made her more human. and from that, i've always said ai and tech makes us more human. which sounds an odd thing to say, but it's true. and we need to say it. because,

look, some people out there are skeptical. they do worry about ai taking their job. and i know for an audience like this, this is a debate that's been had perhaps many times, and we need to push past it for people listening to us, they worry about will it make their lives more complicated? and even for businesses who get it, the pace of change can feel relentless. and i know you all get that and understand that. but when it comes to harnessing the power of this technology, i believe that the way we work through this together is critical, and that means a partnership and partnership is at the heart of everything that we do in government. working with you. you are the entrepreneurs who will drive this country forward. our job as partners is to create the best possible conditions for you to succeed. and that's why

events like this, conversations that we have in the margins, are so important, because we can only create the right conditions for you. if we're having that conversation about what we're doing, we're able to put your fingerprints on what you're doing because, you know, just look at the raw facts. this industry, this sector supports over 2 million jobs. that's incredible. or take this statistic in 2023, our ai sector grew 30 times faster than the rest of the economy 30 times faster. that is incredible, particularly when we're driving for economic growth. so this is about what we can achieve. it's about, to me who we are as a nation. what signal do we want to send to the rest of the world? and the signal i want to send is this a britain that once

again, after years of chaos, is a stable partner for investors that believes the future should be shaped by our democratic values, and that in this volatile world is unequivocally, unashamedly, a defiantly even open for business. and i think and hope you can see that in our approach to trade, in the new deals that we've done just in the last few months, determined as we are to create new markets, whether that's in india, in the us or europe, all areas where we've made progress recently, you can see it, i hope, in our openness to investment as well. and on that front, i am really pleased to welcome what i see as yet another vote of confidence in britain today, with the announcement that liquidity will base their european headquarters right here in london. and that's a 1.5. thank you. that is a 1.5

billion pound investment into our economy, which means better access to finance for entrepreneurs right across the country. it's a vote of confidence in our i opportunities action plan as well. and we put that plan out at the beginning of the year. we're really proud of it. 50 recommendations, all of them accepted by the government. and at the heart of it is partnership in action, and it shows our ambition that we are determined to be the best state partner for tech entrepreneurs anywhere in the world. that's the bar. >> that's prime minister sir keir starmer there, talking about big investments into the uk, but also about geopolitics and the role the uk plays here, a stable partner, democratic values. and that is something that i think a number of countries are trying to exploit at this point to attract more tech talent and attract business

investment. let's get to arjun on the back of this arjun uk clearly posturing too. and what is a very crowded space in europe from paris to berlin, lisbon, beyond of countries and cities wanting to be the next silicon valley. >> not an ai team. >> yeah, absolutely. one of the pictures from london is what you just spoke to there in sort of the world of geopolitics as it stands right now, the uk trying to show itself as a stable place to invest, where companies can put their money, invest in startups, but also build out infrastructure in the uk. i think what was interesting in some of the themes he addressed around ai in government, which is one thing they're looking at, but also the broader issue of the way ai is going to impact the jobs and society more broadly. he was saying, look, there's a lot of people who are worried about the impact on jobs. and so reskilling is another part of the conversation here as well. it's a very, very fascinating kind of talk at the moment. just ahead of setting up the appearance from jensen huang of nvidia. at this point in time

as well, there was an interesting story told about one of the receptionists at downing street explaining how her her workload has been slashed, some of the paperwork because of ai, and how she can focus on more human elements of the job. and again, that's a story that pm has been very keen to tell here around reskilling and around the kind of impact that ai is going to have on the economy as well. it's a pretty fascinating. i think one of the big pictures as well, from london, is it's leaning a lot on some of the history. deepmind, for example, which was acquired by google quite a few years ago as one of the leading ai players in the world. the universities such as oxford and cambridge and other top universities as well being able to spin out talent and startups from some of these universities. so that is all the sort of things we've heard so far from both peter carl earlier here on the channel, but also prime minister keir starmer at the moment, karen. >> arjun, we are waiting to hear from jensen fong and we want to know what's in that folder that the prime minister was handed. but the reality is jensen fong not just stopping in the uk this

week, he's also going paris this week. he will be switching focus there, but it does seem to what we are seeing from nvidia that they're trying to ink partnerships everywhere. and we just spoke to a company that is more of the startup side. nvidia obviously doing huge partnerships with massive companies as well and in various different industries and lots of different countries. is this feasible, arjun, that nvidia can do so many deals without competition regulators catching up with them and demanding some sort of change around monopolistic behavior? >> well, i think at this point, what's been really fascinating is it's prime ministers, heads of state, world leaders, who were the ones bringing in jensen, huang, nvidia into the equation to build out their infrastructure. i think it's very clear at this point in time that there's very few players who can do what nvidia is doing on the scale that nvidia can do it on. and so there are a lot of countries right now saying, well, there isn't another option for us at this point, even if we

wanted another chip partner to do gpus. you know, many have looked at amd and thought, why haven't they called up yet? so clearly, nvidia still very much central to this infrastructure build out. and it's become a case here of countries really feeling that in order to stay competitive on the technological level, it starts with the data center, with that build out. and that's happening in conjunction with not just nvidia, but also companies like amazon, like microsoft, google, the big hyperscalers as well. and their feeling is that you need the data centers in order to be able to have the compute available in the country, to then order to foster those startups and that big, broader ai ecosystem in the country. so it's been really fascinating. i think the way that jensen huang has been so hot property for countries themselves, which is something i feel has been so different to some of the other tech ceos and tech companies we've seen over the years. and so they're very much embedding themselves into the infrastructure of these countries. and the other big, i guess, buzzword phrase you hear over this next week, particularly here in the uk but also in france, is this idea of

sovereign ai that all of this ai infrastructure that is servicing a country needs to be built in that country, rather than companies and countries relying on data centers that are built elsewhere. and that's another part of the pitch, i think, from nvidia as it does this, as jensen huang does this big tour of europe this week. >> arjun, hold off a moment. we're just going to get a couple of flashes that we're hearing out of the key chinese negotiator elsewhere in london, of course, where the us and china are holding undisclosed location talks. certainly today, whether it's over the next couple of days remains to be seen. lee fang, i beg pardon. lee fang is the vice premier of china, and he's saying both sides should maintain sustained sound and stable development of china. uk economic relationship as well. both should further deepen communication and cooperation in various fields of economy, finance and economics as well. but very interesting talking about china uk economic relations at a time when, of course this is all about china,

us relations as well. and actually, i'll just do a nod to that first comment about china uk economic relations, because one thing we saw very clearly in the progress that's been made by the uk government trying to get a us deal and being right at the front of the queue, is that the signing of the deal in various sectors hasn't happened because of course it needs to be fleshed out and one of the areas where the uk has got an exemption at the moment is in the steel sector, but that is on the proviso that the chinese are shut out of the supply chain in still. now, i know we're talking about a whole multiple set of issues here, and we're tying in a lot of things here. but the fact of the matter is, this isn't just linear. it's not just a bilateral relationship between the china and the us. it's basically the us at the same time, trying to get the europeans and the united kingdom to shut china out of certain technologies, out of certain supply chains. and that makes it far more complicated of what the us wants from a trade deal with the us and indeed with the europeans. >> is there a sympathy vote now for china? because what we've seen for the last number of

years, china being punished for its very strong hand in a lot of different industries, it's been a ton of money. and autos are a great example of how far it has come in terms of development of evs. but is there now a sympathy vote because it's not just china that has been punished by us policy, it's other nations as well going through exactly the same thing. and previously it felt as though countries were being encouraged to cut some of their ties with china, reduce supply chain exposure, was the terminology we were using. but the reality now is that if you're cutting exposure to the united states because of the risks that trump is posing, you need another big, large market to sell into. and china is that ready market to sell into. so i wonder whether there's somewhat of a sympathy vote that is moving around international markets on the geopolitics. and i wonder where that leads us on technology predominantly, because to me, there was such a big split that slow the chinese down. we've seen what they're capable of in autos. let's slow them down in other areas. but i feel as though now we're moving

very quickly with the world. do we really want to cut the chinese out when it comes to an ai landscape in future, when the us may not be such a reliable partner? and even though jen-hsun huang is over here and everybody's inking deals with him around sovereign ai, i do feel as though many participants also closely watching what the chinese are doing, whether they can get something cheaper, whether there's another way of creating ai infrastructure that comes at a much lower price point than what the nvidia chips do. and don't forget, the chinese have been doing that. they're using these small clusters around ai. they're not focusing on scale and compute power. they're trying to do it a different way. >> let's take you back to another point of view. you're talking about the europeans needing to rely on the chinese, or the europeans need to rely on the us. and surely, if anything, we've learned over the last couple of years is actually it's got to be more self-help. that's what the americans are doing. that's what the chinese are doing as well. and that's what europe needs to get on board. now, look, we've got this longer term energy problem. no doubt about it. we have an energy crisis in europe where we pay

more for our energy, which means our industry is hamstrung to a certain degree. but that aside, why do we have more regulation? why don't we have more innovation? why do we have problems with our capital markets as well? so this puts it right back to, of course, the draghi in the letter report of the last 12 months as well. it's okay. fine. worries about you graphically illustrate the case. we've got worries about what we have a relationship with china and whether we're too reliant on their cheap technology. and actually we're not going to be building enough home grown technology companies. we've got concerns about the united states and what they want from any deal as well. well, then clearly the emphasis is on europe to kick itself up the backside and have more autarky and more substitution of chinese and us technologies. >> absolutely. i think what we've heard so far from starmer, though, was a focus really just on how ai can be used in government policy, that ai is cutting caseloads that are impacting the way they run government. but i think what the market is going to be looking for today, really from the starmer conversation, is what government policy can do to encourage investment. and so far what we heard was, look, that the usp here is that it's a safe harbor, that you've got so much

geopolitics happening elsewhere, but the rule of law is intact here. it's a safe place to be investing. and that does count when it comes to technology. but i think returns for some of those entrepreneurs has also been very, very important over the years. and as we talk about the departure of ys delivery, of course, in recent times when it came to the market and now it's got a takeover bid, i think the solving the issue too, around compensation for entrepreneurs, allowing those businesses to scale in the uk to get to the point where they're as big as some of the us competitors in that space. these are still issues that the uk has to solve. it needs to make that compensation worthwhile and it needs to have the capital markets intact. yeah, the compensation is the one thing. the other part is the capital markets strength. so you can grow the business. >> look, look, it's no coincidence that the west coast of the united states, forget about everywhere else has been, has had such a massive growth because you've got an ecosystem built up as well. and we do have ecosystems in paris, in london, all the places you go to as well. but they're tiny

ecosystems compared to what you have. you have ecosystems of capital, ecosystems of talent, ecosystems of technology as well. and they're all feeding off each other on palo alto. yeah, i can see them all going to stage now. is that poppy gustafsson as well i believe. who is speaking i believe it is. so why don't we listen in to what the former ceo of darktrace has to say in what i believe is her interview with jensen huang and the prime minister? >> i think we've just heard from the loud applause that i could hear from backstage. the people are in this room, are incredibly excited about the opportunity that ai presents. but when i think about the people watching at home, what's your vision about how ai can mean more security and certainty for people in their everyday lives? >> well, i think this is a really important issue. and i know, gentlemen, i were discussing this earlier on today. sometimes in these audiences, we have this conversation about what does it mean for people in their living room, in their kitchen. and

we're concerned about how they see it. because your stance on ai and tech, i think, really matters. and i always ask myself, you know, which of the two types are you? are you someone who leans in and sees these fantastic opportunities, or are you someone who leans out and says, well, this is a big risk. i'm not so sure. i think we need to lean in. i think this is brilliant, transformative across i mean, i've mentioned health because in a way that for me always brings it alive for working people who do want the security in relation to their health, but also the examples of the teachers and the social care workers overburdened, perhaps at the moment, who want to use the human bit of what they do to better affect and therefore can use ai and tech to do it, or in the defense sector. but what i said just now is really important because very many people say to me in the

conversations i have about ai and tech, it's the regulatory environment here. it's your planning, your infrastructure, the regulatory bodies that are holding us back. and that is certainly true. and the more i've tried to get stuff done as government, the more i've shared your frustration, by the way. but i do think that there's this almost cultural question, which is, how do we lead people on this path? this change is going to happen. it is going to transform our lives. we're going to look back and see this as a hugely important era. i genuinely believe that our job, our joint jobs, by the way, because i think governments can't do this alone. we have to do it with you, is to lead in this period and to show people the huge opportunity and how it will bring more security for their lives. and we must always step up to that. but we can only do it in partnership. i don't think the government can do it on its own. i don't think

entrepreneurs can do it on their own. i think it has to be done together, and it's for everybody who wants to see ai and tech go as far as we all do. we have to bear that responsibility, i think. but jensen, i know we were we were just thrashing this about about half an hour, an hour or so ago. >> well, first of all, i want to say that you hosted a terrific event yesterday, brought together the ai tech entrepreneurs, many that i work with. so many from your cabinet were there and urging them, supporting them, encouraging them, showing them your your your interest, your knowledge of the space and your commitment to helping them. and i just thought it was a fantastic day, and it was great to see demis there and eric schmidt there. my, my friends and, and alex from wave and synthesia and 11 labs and river lane and you know, there's just so many companies we work with here in the uk. and it's

really exciting to see your your commitment to them. this is this is an extraordinary moment. you're absolutely right. we have to lean in. it's an extraordinary moment. there's no no question that ai is incredible technology. yeah. and everybody talks about how it can understand information of almost any kind. it can generate information of almost any kind. i can now reason and think and solve problems and use tools. and we know for a fact that we're going to be more productive. we know for a fact that we're going to be more secure because ai is smart and because ai smart is going to be better cybersecurity agents for us. we know that we'll be safer because ai, such incredibly smart software, will keep cars more safe. and so we know we know these things. but the thing that is that is quite extraordinary and it's an incredible opportunity for the uk, is that ai is both a technology, but it is also an infrastructure. it's an infrastructure because it affects so many industries simultaneously. and it affects, of course, healthcare and

government and education and manufacturing and financial services. because this technology is so broad and so transformative to every single industry, it will be considered infrastructure, just as electricity was infrastructure, just as information. connectivity that came about because of the internet is infrastructure. now we're going to have a new infrastructure, and this new infrastructure is called artificial intelligence. and it's vital that we invest it. we invest in this infrastructure here in the uk. and with your support, we could do that. >> i think. i mean, just changing the language and the way we say it is hugely important in terms of the commitment that we make and how we work together. and as i said a moment a few moments ago, the speed at which the change is going to happen and persuading ourselves that the timeframes we would normally expect for pretty extraordinary change just have to be truncated all of the time. and you can see it, you know, right before your eyes in what we're able to do as a government, how we're looking

across all of the functions of government in each of the departments. we've got peter kyle here, who's the secretary of state, who's charged not with just running his department, but looking across all the departments. he's sort of i've asked him to go into every single department and government and take up the challenge with them of how can you use ai and tech to transform what you were doing, as well as the delivery at the other end? and i think that's a sort of statement of intent as the way that we want to operate. >> so and i love hearing about how we sort of really driving that adoption. and we've talked a little bit about that sort of investment in terms of the infrastructure that we need and the opportunity that you have within the uk. but how are we thinking about the investment in sort of skills piece? and could you talk a little bit about how we're creating the skills that will be needed? >> yeah, i'd said the a bit about this in the words just a moment ago, because i think the skills challenge operates at a number of different levels. there's obviously the sort of basic question which is, can the

sector get the skills it needs in the time it needs them? and that's why what we've been able to announce today is so important in terms of the sheer number of people that we can work with across businesses of all different sizes. and this is often more of a struggle, i think, for smaller businesses in terms of getting the right skills and the right place. so what we've set out today in relation to the 7.5 million people who will be trained from different backgrounds and different jobs in ai, hugely important. i'm personally very excited about the initiative in relation to our schools and universities and postgrads, because i think that training young people earlier on in ai and tech means that they will obviously be better skilled as they come into work, but also there'll be much better at it than us. i've got a 16 year old boy and a 14 year old girl, and

they already understand ai and tech in a way which it's really difficult to even have conceived of a decade ago, and to get them learning at school, i think, will give them that spark. a really big believer. this is my summerstown school story that you can't you know, often we ask young people, what do you want to do when you grow up? or what do you want to do, you know, for a living or a career or whatever it may be? i genuinely think it's hard for young people to answer that question if they haven't been exposed to things like ai and tech, because you can't aspire to do something if you don't really know what it is, or it's mysterious and you think it's for other people, not for me. that's one of the biggest inhibitors for me in life, by the way, is children who think that's for other children, other young people. it's not really for me. so by doing what we're doing in schools, we're opening this out not just for businesses and the sector to have the best talent coming in the pipeline, but for young people to be the brilliant

next generation and the speed it's going, we don't even get to the next generation. there have been five years and they've all already know far more than we do, but that is really exciting in its own right. >> you're absolutely right, prime minister. in fact, i would say, and this is a very important, very important concept, ai is the great equalizer. and let me explain why. you know, for the last 50 years, 60 years, computer science became a field of science and it was available to tens of millions of people out of billions of people. and this technology was hard to use. we had to learn how to we have to learn programing languages. we have to architect it. we have to design these computers that are very complicated. and so tens of millions of people were able to benefit from this particular field. but now all of a sudden there's a new programing language. this new programing language is called human. anybody. well most people don't know c plus. plus very few people know python. and everybody as you know knows

human. and the way you program a computer today to ask the computer to do something for you, even write a program, generate images, write a poem, just ask it nicely. and the thing that's really, really, quite, quite amazing is the way you program an ai is like the way you program a person. you say you are an incredible poet. you are. you are deeply steeped in shakespeare. and i would like you to write a poem to describe today's keynote. and i without without very much effort, this i would help you generate such a wonderful poem. and when it answers, when it generates it for you, you could say, i feel like you could do even better. and it would go off and think about it, and it would come back and say, in fact, i, i can do better, and it does do a better job. and so this way of interacting with computers, i think, is something that almost anybody can do. and i would just encourage everybody to engage it. and just as the prime

minister said a second ago, almost every children is already doing that for themselves, naturally. and this is going to be transformative. >> i think it's such an interesting way of looking at it. in terms of that skepticism. some people have or slight people are very it's human nature almost in terms of change, but as an equalizer and as a human equalizer. that means it can operate on different levels for different people. so i think it's a great way of looking at it. >> anybody could learn how to program an i. >> i find it incredible that the children of today, like when they become grandparents and they reflect back the earliest, most antiquated piece of the technology that they could possibly imagine is a technology that we are so excited about today. and i love that sort of pace of change and the sort of skills as we think about that transition. >> i think the other bit on skills, just before i forget it is, is being clear that here in the united kingdom, we want to attract the best talent in the world in here at that level. and i think it's really important that that's a message we're really clear about, particularly

just at the moment. and so that's a really important part of tech week as well for me. >> so let me draw on that piece a little bit more. so if we think about ai and we think about building all of this great infrastructure that we'll need to support the next generation of ai companies, something that peter chi and i get very excited about is you can't just build it, you've got to then also use it. and how do we how do we create an ai ecosystem and how do we drive the biggest impact from the opportunity that ai presents here within the uk? >> prime minister and i were talking yesterday and i use this word and i if you don't mind, i'd like to use it again. uk is in a goldilocks circumstance. in fact, uk is singular in any other region. it's singular in this condition i'm about to describe. ai uk has one of the richest ai communities anywhere on the planet. the deepest

thinkers, the best universities, oxford, cambridge, imperial college, amazing startups, deepmind. i mentioned wave and synthesia and 11 labs and incredible thinkers and computer science. really, really excellent digital biology. of course, the discovery of dna was here. incredible, incredible research community. the second is the third largest ai venture capital investment anywhere in the world. the third largest, of course, the largest of the two united states and china is fairly obvious, but the uk is the largest ai investment area anywhere else in the world. and so between these two ideas that that you're rich with great computer scientists, it's a fantastic place for vc to invest. the ecosystem is really perfect for takeoff. it's just missing one thing. it is

surprising this is the largest ai ecosystem in the world without its own infrastructure, which is the reason why we're talking about it so much, which is the reason why why prime minister's announcement of investing in computing 20 times more computing is such a big deal. if you were a particle physicist, you need a linear accelerator. if you are, as you know, astronomer, astronomer, you need a radio telescope. and so each one of these fields of science needs its own instrument. if you're in the world of ai, you do machine learning. you can't do machine learning without a machine. and so the ability to build these ai supercomputers here in the uk will naturally attract more startups. it will naturally enable all of the rich ecosystem of researchers here to be able to do their life's work. and i think it's just such an incredible, incredible place to invest. i'm going to invest here, as you know, many, many in

the in in the local. the uk is such a great place to invest because of all the things that i've just said. we're going to start our ai lab that you you mentioned prime minister and we're going to partner with uk to upskill the ecosystem of, of developers into the world of ai. we're going to invest in helping start off the ai ecosystem of infrastructure. and once we get the flywheel going, then research startups, businesses, more consumption of infrastructure infrastructure enables more research, more research, more breakthroughs, more companies that flywheel will start taking off. it's already quite large, but we've just got to get that flywheel going. >> i mean, firstly, the confidence it gives when you explain it that way, it's huge from our point of view, and

we're really pleased to be seen that way. and thank you so much for that vote of confidence in the investment. but to the wider group here, i think this question of the ecosystem, us showcasing what we have, it's very un-british to sort of showcase what you have, but we need to showcase what we have, but also to have this as a two way conversation, because that ecosystem isn't something that in a way, the government has to understand and sit on a platform and sort of say to you, it's something that is two way, almost everything we had in our action plan that we produced in january of this year was as a result of conversations with people in this room and beyond this room, nothing was plucked from the sky. it was all part of a conversation. and that, for me, is the way in which we do partnership. partnership isn't two people or two bodies, two entities trying to do the same thing. a partnership is where

two or more bodies come together, understanding how they complement each other, how they actually do different things. >> all right. what a great opportunity. i should take it quickly before the feed comes back. let's get to decide who is portfolio manager at g. i am emerging markets equities and i should by the way, say thank you for your patience because we booked you for a lot earlier. but we've been taking jensen on. now look here's the thing. jensen huang just said how great london is for all kinds of reasons for investing. and i don't need to go over those reasons. but i also know people have said very similar things to the taiwanese audience, where you've just come back from at computex. and i also know because a little birdie told me, i knew that you were in a briefing with jensen huang, and i want to know what he said there that was different from here, because of course, he's going to say he's a brilliant salesman and he's going to say wherever he goes. so what? is there anything you think that is great about london compared with taiwan, or better about taiwan or other parts of the world? because we're all competing for the same i dollars?

>> yeah. so i think from his perspective, what he's trying to really establish is ai is more than a tool. ai is an infrastructure that is something that can deepen across the way in which we behave and interact globally. so for him, you know, what he's trying to really achieve is adoption of ai technology, which kind of benefits the nvidia gpu story, which allows it to grow and flourish. what's different between taiwan and here is the ecosystem in taiwan. you have a broad ecosystem, a supply chain that allows his success to accelerate, which will noticeably improve over the next 3 to 5 years. i think what's interesting, and one of the concerns we had going to taiwan was whether the ai capex story was done. you see a lot of concern from hyperscalers about whether they're going to shrink their capex and what that means for their ai story. but actually, what we came back was very much enthused that the second wave is coming, that the ai capex story is much more than us hyperscaler capex. and that's when sovereigns and enterprise ai and also physical ai can mean

that this is now a 2 to $2.5 trillion opportunity, which is huge, right? >> we just heard then ai is not technology, it's infrastructure. and if you think about the biggest plans in europe, they were really from germany about building more infrastructure. this narrative that jensen huang is very cleverly spun this morning at london tech week is, look, it's an investment in infrastructure. if you build up more compute power, what do you make of that ability to drag fund managers in from the sidelines on infrastructure? that is really just i. >> i think one of the least talked about, but probably one of the most important topics in the next 2 to 3 years will be physical ai. so when you think of ai, it's pre-training large language models. so it's using the words that exist in the world and helping generative ai inference and reasoning. now the next leg, which we'll see over the next 2 to 3 years, will be physical ai, which is essentially using ai models to integrate with real world systems. so how you think about autonomous driving, how you think about robotics, how you think about edge devices, how you think about manufacturing. it's really using the ability to

accumulate real world data, how physical objects interact to help systems, particularly from a manufacturing perspective. now, just to give you some numbers in terms of us hyperscale capex, over the next five years, we're expecting about $1.1 trillion. but when you take on board physical ai plus enterprise and sovereign ai, which is what keir starmer is talking about, that's going to likely add another $900 billion of ai capex. so the story which we're focusing on today is pretty much half of the addressable market that we anticipate over the next five years. >> give us a trade. i mean, because i had a great argument with karen taylor last week about wise, you know, 30 times forward. and i said it's fully pretty fully priced. and yet they want to go to the states as well. so where is the best value. is it within the ai picks and shovels. is it in the software development? i mean you look at openai valuations, it seems to double every couple of months or so. so where's the trade. >> and this really introduces the emerging market opportunity. so coming from taiwan and korea these are businesses which are structurally positioned at the

bottlenecks of what's creating this ai capex story. so when you think of advanced packaging, when you think of substrate, you think of liquid cooling, when you think of power, when you think of essentially businesses which are accelerating server capacity. these businesses are based in taiwan and korea. these are part of the supply chain, which will enable jensen huang to be so successful. but these companies are trading at multiples versus us companies at 30, 40 times. >> so hang on a minute. they're only relatively cheap. >> relatively cheap versus history as well. the story the share price appreciation has really been driven by earnings upgrades rather than a rerating. so for us this creates an opportunity for global investors to think about this ai capex story beyond the us, which introduces the emerging market story at 4,050% discount versus their us peers. >> what about the robotics side here in europe? i mean, we do have robotics, for instance. is that a play where the likes of what abb and others are in the robotics space? >> so i think that's an important area of where capex

intentions will likely surprise. so as i said, we've had the first wave ai capex really driven by the us majors. the second wave will be oems, will be industrial houses, such as the companies you mentioned, which are building their own compute capacity, which creates a competitive advantage versus their peers. now, this is really interesting because these businesses haven't typically thought about capex obligations spiking to benefit from this physical ai story, but that will likely accelerate. and what this means, therefore, is the capex story will become less us centric. and i think that's important. it will diversify and it will deepen. and that creates opportunities, again, for global investors who have just focused on the same old names in the us to diversify their investments. >> yeah, i'd love to talk to you longer, but jensen still going on. so we're going to go back to that as well. but please, please, please come and join us again soon and we'll make sure it's on a day when jensen huang isn't speaking so we can get even a longer chat. but nice to see you. thank you. pleasure. kunal desai, a portfolio manager at emerging market equities. let's listen in to jensen huang.

>> deeply and quickly. >> prime minister, final minutes then can i just leave it with you in terms of how we within the uk making sure we forge that path to make sure that we are attracting companies like nvidia to come invest in the uk, but also really committing to that sort of uk ai infrastructure and ecosystem. >> well, i think this is all in a sense about posture. what do people think the government believes in? and if there's one thing i want to get across today, it is that we are leaning into this. we are excited about the potential that this could have, will have, in my view, on the lives of millions of people and making their lives better. i came into politics quite late in my career, having done other things, and i came in to try and improve the lives of working people across the country. and i can see here the huge potential to do that at scale and speed, which i didn't think would necessarily be possible. i came

into politics just ten years ago. even then, i didn't think that we'd be sitting here looking at the potential of ai. so the posture of the government, the leaning in a government that truly partners in the sense that we understand, we have a conversation, have a conversation where we actually listen to what you're saying as well. they're the conversations that matter most, having meetings where the next meeting doesn't go over what the last meeting did, and everybody repeat the same things they said last time. we've done loads of meetings like that. they're not very interesting for you or for us. so i've got a rule that all meetings can't retrace the same ground as the previous meeting. you've got to go forward, iterate, get in the spaceship if you like, but also creating the conditions and celebrating. i'm really proud of the fact that the uk is right up there when it comes to ai and tech, and you know, we're in the top three in the world. that is an incredible starting position. all countries, i think all regions are going to want to go forward

just as quickly as they can, and we happen to be in a really good position on this journey, and i'm really proud of that. i think we should make everything we can of that and continue to be a government that leans in and a government that works in the partnership way that we've described today with all of you. so again, thank you. thank you, jensen, for, for not just for what you've said on your investment, but also doing what i really enjoy, which is yesterday we had a scheduled meeting. we went i burst into peter's bit of the meeting. we then extended it afterwards because it was just so interesting in terms of where we were going with the discussion, and that they're the most impactful meetings as far as i'm concerned, where i'm developing and i ruminate, i go away and i think about what's been said to me in these meetings. and last night i was thinking about what you were saying, the way you've articulated again this morning. what does that mean? how do we change? that's the conversation i want to have with everybody in this room. conversations really

change the way we do government, and that will improve the lives of so many million people in our country. so thank you. >> thank you, prime minister. >> with that, prime minister, gentlemen, thank you very much. >> thank you very much. >> thank you. it's fantastic. thank you. thank you very much. thank you, thank you, poppy. >> thank you. i think it's absolutely fascinating how the eulogizing was on both sides, from starmer and from jensen huang. and the prime minister said extraordinary thing. he said we're in the top three globally with ai and tech. it depends what your marker is, doesn't it? because if the us and china are top one and two, putting us number three sounds very interesting, given the vast amount of investment in a whole other set of jurisdictions. >> what jumped out to me was the investment in the ecosystem, a little bit like what we were talking about with energy security over the years, that if you build a grid, then players can use that grid in this start up world, very similar with ai. if you build the ai compute power, then a whole bunch of startups and businesses, existing businesses can simply just plug in and enjoy those

benefits. and today, what we heard one of those big announcements that 1 billion pounds would be used for compute power to scale up capabilities. in addition to that, the workforce that starmer will ensure that 7.5 million workers are going to be trained in ai by 2030. and that is what we've been talking about. argent a lot the human augmentation with the technology that is not simply about ai taking over, it's about the humans being better at their own capabilities. thanks to using ai. >> yeah, there were a few things that stood out. that was certainly one of the things i think one of the big parts of the equation here was jensen huang talking about ai as infrastructure, as you were just mentioning there, similar to, say, electricity. and in order for the he even said the uk doesn't quite have that yet. but with the number of announcements made around infrastructure, it's on a good path to ramping up that that compute power that will unlock the ability for startups, academics, researchers to begin using this compute power, which then in turn will sort of spark new companies new

ideas and create this flywheel, as he called it as well. when he called the uk, steve was talking about the uk being in the top three. he did call the uk one of the richest ai communities anywhere on the planet, citing things like universities, like the companies and also the capital that is available to some of these companies in terms of the vc investment in ai firms as well. also, there was a lot of talk, as you mentioned there, about about work, about upskilling and the prime minister talking a bit about how they're looking at this from all the way from primary school through to universities as well. and of course, jensen huang also talking about this as well, saying that nvidia is going to look to help with the upskilling of workers in the uk as well. when it comes to ai, a lot of talk about how ai will augment jobs rather than replacing them. look, it's a message we've heard from all of the tech companies. all of the countries out there are still a bit skeptical, because this feels like a technology that really is something that we've not seen before. so the state of displacement and disruption could be immense. but again, it

is. wait and see how companies will implement this and how exactly people will be using this technology. but those are, i think, the key messages out out for today. and of course, keir starmer, the prime minister, talking a lot about uk as a place for investment, hoping to attract a lot more investment in to the ai ecosystem here in the uk. for now guys, back. >> to you. all right. >> nice work. thank you very much indeed. and of course karen will be joining you at that event tomorrow as well. a new round of high level trade talks between the us and china are kicking off in london today. we just don't know where. it's a big place. london. the meeting comes just days after us president donald trump and chinese president xi jinping held their first direct phone call since trump's return to the white house, an extraordinary to well over 100 days for that to take place. as the pair look to break an impasse on trade tariffs. now, in a sign of cooling tensions ahead of today's meeting over the weekend, the chinese said it had granted some applications for

rare earth exports, but did not specify which countries were approved. and there was all kinds of speculations that the europeans had got some of these rare earth. permits as well. but i mean, it's clearly a great tool that the chinese have to use not only against the us in their negotiations, but also in trying to get the europeans to warm to them as well. >> it was hiding in plain sight. we all knew that they were sitting on such an enormous stash of these critical minerals, and at some point other countries would start to run out. so the fact that this has been a negotiating tactic to get people to the table and quickly, i think that's fascinating. but as to where could the talks be held? big hotels in london. i wonder whether that's a go to. it's got to be, isn't it? it's got to. >> be something neutral. >> territory hotel, claridge's dorchester would be my premier inn. >> no. yeah, i think so. >> you get some coffee when you're there too, don't you? >> it's a good premier inn near wandsworth roundabout. >> with a costa. >> that's a travelodge. >> actually. get a costa nearby. get the full experience don't you. >> that is it for today's show

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