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This is the Bloomberg day here at

podcast. Good morning. It's Monday the

20th of July. I'm Caroline Hepka in

London.

>> And I'm Steven Carol in Brussels. Coming

up today, Andy Bernham prepares to enter

Downing Street. But can Britain's

seventh prime minister in just over a

decade succeed where others have failed?

Oil prices jump as US and Iranian

attacks escalate following the deaths of

three American troops. Plus, one giant

leap for Moonshot. China's breakthrough

AI startup tells investors it's

preparing for a stock market debut after

stunning global rivals.

>> Let's start with a roundup of our top

stories. Andy Bernham will become

Britain's new prime minister today,

inheriting an intrade dominated by a

sluggish economy and pressure to tackle

the cost of living. In his first address

from Downing Street, he's expected to

say that Britain can look forward to the

future with hope and unity, but must

also be honest about the challenges it

faces. Bernham also say that he's

acutely conscious of Britain's prime

ministerial turnover, arguing that it

shows the need for more stable and

respectable politics. Speaking on

Friday, Bernham said he would grow the

economy by devolving power.

>> More power to improve your high street,

backing local businesses such as the

pubs and the shops that bring them to

life. And make no mistake, everybody, I

will be a pro business leader of the

Labor Party, as I was a pro business

mayor of Greater Manchester. Bernham

takes office with more than a million

households behind in their electricity

bills. While personal insolvenies in the

UK have climbed to their highest level

since early 2010,

>> oil has climbed to its highest level in

more than a month as the United States

and Iran exchanged increasingly fierce

attacks. Overnight, the US military

launched another wave of strikes on the

Islamic Republic after three American

soldiers were killed in Jordan and Iraq.

A week of tit fortat attacks have also

expanded beyond military targets to

include bridges, utilities, and port

facilities, suggesting little prospect

of a return to last month's fragile

ceasefire. US Secretary of State Marco

Rubio says that the White House still

wants a deal.

>> The United States always remains open to

a diplomatic solution. We've tried

multiple times with Iran and we'll

continue to try. If that door opens,

we'll be happy to see it open. But right

and and and they continue to send

signals that they want to talk that they

they want to negotiate but their

behavior is what we're responding to and

their behavior is they're they're

launching missiles and drones against

ships including tonight.

>> Rubio says the US is focused on hitting

Iranian assets that are being used to

attack commercial shipping. Kuwait again

bore the brunt of Iran's retaliation.

The country's army says that attacks on

power and desalination plants cause

fires and severe damage to what it

called vital infrastructure. The New

York Times reports the US is also

sending more fighter jets and aerial

refueling aircraft to the Middle East in

what could signal a further escalation.

>> Analysts at Morgan Stanley say a diesel

squeeze is playing out across Europe as

a slew of major supply challenges

coincide. Rubber's Euan Pots has the

details. Crude prices have topped a

one-mon high on renewed conflict in the

Middle East, but that's just one factor

driving the rise in diesel prices across

Europe. Morgan Stanley says it's

modeling points towards European diesel

inventories falling to multi-year lows

towards the year end. The market for

diesel's been tightening on a host of

factors, including the disruptions in

the straight of Hormuse, but also

Ukrainian attacks against Russian

refineries and a diesel export ban

imposed by Moscow. However, the US bank

cautions against betting on further

gains, saying the tightness is already

reflected in prices. In London, I'm Yan

Pots, Bloomberg Radio. Ukraine's foreign

minister has said that Russia unleashed

its largest ballistic missile attack

against Keev since the beginning of the

war. According to President Zalinski, at

least one person was killed and 16

wounded in attacks on the Ukrainian

capital over the weekend. He said the

strikes underline the need for further

defenses.

>> Our air defense forces and sky defenders

managed to shoot down 18 missiles and

neutralize more than 100 drones. It is

very important that our partners

understand what is happening and that we

need air defense missiles to protect

life literally every day. President

Zalinski speaking via a translator there

as Ukraine widened its attacks on

Russian warehouses and logistics

facilities. It comes as the Financial

Times reports that the EU faces

crumbling support for new Russian

sanctions. Diplomats have warned that

member states are refusing to back

measures that could harm some of their

biggest companies. China's Moonshot AI

has told investors it's preparing for an

IPO in as little as six months. That

comes after the startup's latest model,

Kimmy K3, upended industry perceptions

of the country's AI capabilities.

Sources tell Bloomberg the company's now

seeking the blessing of its backers in a

Hong Kong listing. Our China

correspondent Minlow reports from the

World AI conference in Shanghai. There

has been a lot of buzz around this Kimi

K3 model behind me because it is the

largest Chinese AI model to date with

2.8 trillion parameters and according to

the company it out ririvals most

frontier models except for anthropics

fable 5 and open AAI's GPT 5.6. So it

really stunned the tech world which

earlier this year was still thinking

that maybe Chinese models are about 12

months behind the US AI models but they

seem to be closing that gap much faster

than expected.

>> Moon's min low there as Moonshot is

reported to be wrapping up a fundraising

round valuing the startup at more than

30 billion US.

>> Now sports news Spain have won the World

Cup beating Argentina 1 nil after extra

time. Ferane Torres got the deciding

goal in the 106th minute. Argentina were

down to 10 men by that point after Enzo

Fernandez was sent off for a second

yellow card. Spain's fans have been

celebrating winning the biggest prize in

football.

>> I cannot ask for anything more,

especially surrounded by my family. It's

just surreal.

>> I feel great. This is amazing. Once in a

lifetime experience.

Okay, it's Spain's second World Cup

title after their 2010 win.

>> And in Gulf, Ryan Fox has won the Open,

sinking his final put to claim the

Claret jug by a single shot. The New

Zealander finished 10 under par at Royal

Burke Dale, one stroke clear of American

Cameron Young in a dramatic final, the

the oldest golf tournament in the world.

Fox admitted that he looked a lot calmer

than he felt.

>> I'm not sure how I hit the putt. As I

said, my hands were all over the place.

So, I was just trying to get it towards

the hole somewhere and yeah, it's

surreal that it went in.

>> That's of Ryan Fox there as England's

Tommy Fleetwood ended the tournament

tied for fourth on seven under on his

home course.

>> And those are our top stories for you

today. Looking at the markets this

morning, stock futures for Europe are up

about a tenth of 1%. We've we've had

Ryionaire profits in for the first

quarter after tax profits uh came in

below expectations 538 million euros.

This though after we have seen this a

significant uh tech selloff on Friday

really rattled markets but stocks do

seem to be stabilizing. South Korean

markets reopening though after Friday's

holiday. So you see a real catch up

there with the Cosby down by 4.2%. The

NASDAQ also slumping. Chinese shares

though are up with two major state funds

revealing more purchases of Chinese

equities. So that has propped up markets

uh in mainland China. Looking elsewhere

to the oil markets, more tensions and

strikes between the US and Iran mean

that brain crude is now trading at

$9022. So up 2.4% this morning. No cash

treasuries trading because Japan is

closed for holiday. Those are the

markets. In a moment, what to expect

from the change of prime minister in the

UK. Plus, more on how the Chinese AI

startup Moonshot is making waves as it

plans an IPO. But another story that

we've been reading this morning on how

to buy a dinosaur. In case you were

looking for a new project for your

Monday morning, Devon Pendleton has put

together a guide for one of the

strangest collectors markets where

fossil hunters, museums, billionaires,

and fine art dealers are competing for

assets originating more than 66 million

years ago. There are huge sums of money

involved here as well. A Tyrannosaurus

Rex named Gus sold for over $50 million

just this month. Although you can start

small. Dinosaur teeth can apparently

sell for as little as $20 in case you

wanted to start your dinosaur collection

now. Pretty complicated investment

though. First of all, there's the

legality of it. Fossils found in many

parts of the world can't be legally

sold. You have to verify authenticity.

And then there's also the practical

difficulties of actually keeping one of

these things. Apart from the fact that

obviously they're quite large, they

extremely heavy as they're stone and

upkeep very tricky as well. You have to

have stable temperature, humidity, no

vibrations. I suppose you don't want to

end up with a pile of bones in the

floor.

>> No. Um I did read about that T-Rex. I

mean, it is absolutely enormous. Um and

it went for a sort of huge amount of

money. Look, the criticism is that

scientists are worried that these um

skeletons and fossils are going to go

into private collections, then they

won't be there for research, which is

what they really want them for. So, yes,

it is a bit, it is interesting and

strange. Um but then, yeah, the teeth, I

mean, it's just another collection to

get dusty on the shelf, isn't it?

>> Nobody wants to be dusting the dinosaur.

Could you imagine farming that out to

one of your children, Caroline, to be

like, "Oh, it's your turn today. Off you

go. Dust the dinosaur." Yeah, step might

be dangerous.

>> It's a fascinating piece, though. We'll

put a link to it in our podcast show

notes. Well, Andy Burnham becomes

Britain's seventh prime minister in a

decade, just over a decade, I should

say, today. But as the former Greater

Manchester mayor prepares to take power,

many of his policies and his top team

remain unknown. Joining us now from

Downing Street is our UK politics

reporter, James Wilcox. James, good

morning. First of all, talk us through

how today should unfold. Well, Stephen,

it's a historic day. I mean, it's going

to be like any other sort of postgeneral

election day and that there's going to

be scaffolding. People are set up

cameras all around me in Downing Street.

Kier Stalmer, the current outgoing prime

minister, will leave Downing Street and

go to the king after making a farewell

speech. And then the new prime minister

to be Andy Bernham will come back to

Downing Street from uh seeing the king.

The problem is there hasn't been a

general election and we are but two

years after Labour won a landslide

majority and so we are having this

change of government the seventh prime

minister in little over 10 years uh once

again as the UK tries to find its new

direction.

>> What does the moment mean then for

Labour the Labor Party for Andy Burnham?

What can we really expect from are we

dubbing it Bernamism?

Well, for Labor, this is a moment of

optimism and it's also a very desperate

gamble. Um, 90% of Labour MPs backed

Andy Burnham in this leadership contest.

That is a phenomenal amount and it is

true that Andy Burnham is already seeing

an upswing in the polls for the party.

There is a hope that he can turn around

the party, win the next general

election, and there are genuine fears

inside the Labour party about reform and

Nigel Farage and what they see as a

far-right agenda. And then for Andy

Burnham, just 10 weeks ago, he was the

mayor of Greater Manchester, not even

sitting in parliament with no clear path

to power. And now he finds himself at

the apex of UK political life, ready to

reshape the world as he sees fit. I I

mean I note your skepticism about

Bernimism, Caroline, but in many ways

Andy Bern has a much clearer vision for

the UK than K star ever did. He has a

much clearer policy around devolution.

He wants to build a number 10 in the

north and we're expecting a policy blitz

in the next week or so of things like

North Sea oil drilling, uh the

nationalization of Temp's water, a

potential announcement on social care,

scrapping digital ID. But then we do not

know and I find this astonishing to say

anyone firmly in Andy Bernham's top team

there are many rumors inside the press

that Shabban Mammud is tipped to be the

chancellor but as yet we do not know and

we cannot say and that in turn sets the

policy agenda in that we cannot tell you

who is going to be running these sort of

big ministries of state and that also

means that these people will be going to

these jobs effectively blind and that

too will be interesting to see exactly

what policies exact What directions come

out of this new Burnham administration?

>> That's the arrivals, James. But let's

talk for a moment about the departure.

Uh Kier Starmer will be leaving office

after just over 2 years after winning

the general election. How will his time

in office be remembered?

>> Karma has been saying for the past week

and he's likely to say again today that

he leaves the country in a better state

than he found it. Um I although returned

to his five missions that he set out for

this government which were kickstarting

economic growth, making Britain a clean

energy superpower, raising public

confidence in police and the state and

taking back Britain streets, reforming

education, and fixing the NHS. I think

on those it's a far more mixed record

with only kind of clear success being

seen in getting down NHS waiting list

and with many others it's been a far

more rocky far more difficult

premiership that is ending far far

sooner than he could ever have hoped or

expected. It's also worth saying that

although we don't know Bernham's top

appointments, it's very likely that

Rachel Reeves will lose her job as the

UK chancellor and what that means for

her policies around fiscal rules, which

although Andy Burnham has committed to,

the idea that the first female UK

chancellor is out of her job within two

years is also amendous one. It's

interesting that there is so much

optimism in Labor now that they can turn

the page, set a better direction, and

make things back within three years of

government. But coming into this, there

is a prime minister that seems untested

with policy plans that are unclear with

a lot of optimism behind him, but as yet

we're unclear how it's going to work

out. Those are words I could have said

in 2024. It's yet to be seen if Andy

Burton can make 2026 a different year

for Labor.

>> Yeah, it's going to be absolutely

fascinating. I still think also, James,

central to all of this is for our

listeners and investors in particular

whether the Labor government is going to

be more pro business. what type of pro

business it's going to be. I mean, Andy

Berdam said only on Friday that he would

be a pro business leader. What does that

actually mean? We know very very little

about what may emerge in the budget. And

I think investors will be very focused

on that in the autumn, you know, this

major program that may emerge from burn.

What does it mean in terms of taxes and

spending? James Wilco, thank you so much

for being with us. Uh live at Downing

Street, our UK politics reporter, James

Walcock.

Stay with us. More from Bloomberg Dayb

coming up after this.

>> China's Moonshot AI has told investors

it's preparing for a stock market debut

in as little as 6 months. That's after

its latest model Kimmy K3 has sparked

much excitement among users and

investors. Our Asia technology editor

Vlad Savov joins us now for more. Vlad,

the announcement of this latest model

last week was put Moonshot at the center

of a sell-off in tech shares. Why is it

creating such a stir?

>> In a certain respect, it is evidence of

the great sensitivity that exists around

this entire industry. As we are all very

well aware, there are hundreds of

billions of dollars invested in it.

Whether we're talking about companies,

whether we're talking about

infrastructure, data centers, and so on.

So anything that may upset our

preconceptions about how money is going

to flow and how any return on all that

investment is going to come back is

going to disrupt uh the conversation not

just here in Asia but clearly it took

over the US and European AI circles as

well. I mean people such as David Saxs

the White House AI adviser was posting

and he was making a point that uh the US

should no waste time regulating its AI

industry should encourage it as much as

possible. So all of these things have

happened and to address your question

directly why um again the answer with AI

is that we're still at a very early

stage so there isn't a final product by

which we can test all these so we're

looking at synthetic benchmarks and

that's where Kim has stood out. It's a

2.8 trillion per parameter model. Uh 2.8

trillion. It's a big number. Whatever

you're looking at, it's one of the

largest. And the innovative approach for

Moonshot is that what they're doing is

they're loading a load of these

parameters, but they're trying to be

very efficient in how they address them.

So they only activate a little bit of

the AI model when they're trying to get

user queries answered. So that has

resulted in them uh getting up there

with the frontier AI models. It's

comparable to OpenAI Anthropic, their

latest and their best. And amusingly,

the company tried to show a bit of

humility as well. It said, "While we

were really excited about our new

products, while we really love what

we've just put out, uh, we're not as

good as Open AI, Anthropic, we're just a

little bit behind them."

>> Okay. So, that's really interesting

about, you know, why Moonshot and Kimmy

K3 have have made such an impact. I

mean, shares in Alibaba are getting a

boost also from their latest model.

>> That's right. And this is also

indicative of the pace at which the

competition is happening in China. Uh

like I mentioned, Kim is a 2.8 trillion

parameter model. Alibaba is releasing a

2.4 trillion parameter model. And

likewise, it's right up there in the

benchmarks. Alibaba itself a bit more

bullish. said it's only second to Fable

from Anthropic, which if if we all

remember uh Mythos and Fable from

Anthropic are the AI models that the

company itself said uh a matter of

national security. And then they had a

whole back and forth with the White

House about whether there should be

international access to these models. So

that's part of the perceived threat in

the US, whether you're talking national

security, whether you're talking

competitiveness in commercial markets.

How is China able to catch up that

quickly without having access to the

same resources uh that the US has? But

speaking of resources, this is also why

there's bullishness around Alibaba is

because it is much better resource than

Moonshot and it seems to be doing just

as well. And the other thing we can kind

of expect is that everyone else who

hasn't done a release in the past

several weeks or several months is

trying to do the same thing. All of this

is happening at a time when you know

we're we're looking at an increasing

rivalry between those US and Chinese

companies moving into this space. The

questions around accusations of one

distilling the other have resurfaced.

China's yet again denied that its models

have distilled foreign AI.

>> Yes, that's right. I mean the these

these things are going to fly back and

forth. The thing that I can say sitting

here in Hong Kong is that uh within

China itself the competition is fierce.

Everyone is competing for talent.

Everyone is investing as heavily as they

possibly can. And there is a very big

difference also in the approach that

these companies are taking. Um because

the idea in the US is still let's buy

the most capable, the most powerful and

most expensive Nvidia AI accelerators,

lean into that and build models that are

tailored to take full advantage of that.

As I mentioned with Moonshot and

Alibaba, likewise, they're using this

technique called mixture of experts

where they're leaning into efficiency.

So as much as possible, they're trying

to build um frankly a whole different

architecture about how an AI model is

addressed. So they don't need to rely on

the pure speed of the Nvidia chips that

they don't have. So they're leaning more

into using memory and so on. So the

architectural level I feel like most of

them are fundamentally different for the

most part than the US models. And then

the other thing that China leads into is

the talent. I mean this is the thing

that David Saxs and Vinod Kosler who's

one of the um famous VC investors in the

US he has stressed that the US needs to

have a more receptive visa policy so

that all these Chinese re researchers

including the moonshot founder who is US

educated would not only come to the US

but stay there and set up their

companies there. So China is leaning

into a different architecture building

that up differently and then also its

talent.

Thanks for listening to Bloomberg

Daybreak Europe.

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