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President Donald Trump introduces Broadcom CEO Hock Tan prior to Tan announcing the repatriation of his company’s headquarters to the United States from Singapore during a ceremony in the Oval Office of the White House, in Washington, DC, November 2, 2017.

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When Broadcom tried to buy rival Qualcomm for $120 billion in 2018, its efforts were thwarted. Qualcomm rejected the offer and the Trump administration declared the deal a potential threat to national security. 

In March of that year, Broadcom withdrew the bid, which would’ve been the largest technology deal on record, and said, “Qualcomm was clearly a unique and very large acquisition opportunity.”

As it turns out, Broadcom didn’t need it.

Broadcom shares soared 24% on Friday, their best day ever, and lifted the company’s market cap past $1 trillion for the first time. The chipmaker became the eighth member of tech’s 13-figure club. Since abandoning its Qualcomm offer, Broadcom shares are up more than 760%, trouncing Qualcomm’s 165% gain over that stretch. The S&P 500 is up 119%.

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Broadcom vs. Qualcomm

At the time of its announced acquisition effort, Broadcom’s official headquarters was in Singapore, which played into the Trump administration’s concerns. Broadcom filed to redomicile in the U.S., but Trump blocked the deal anyway.

Still, Broadcom CEO Hock Tan wasn’t deterred from taking big swings. Far from it.

Broadcom has since closed three deals valued at $10 billion or more, and it has ventured far outside of its core semiconductor market in the process. It agreed to acquire legacy software vendor CA Technologies for $19 billion in July 2018, and snatched up security software company Symantec for $10.7 billion in August 2019.

Tan’s biggest bet came in 2022, when Broadcom said it was buying VMware for $61 billion, jumping into the market for server virtualization. The deal took 18 months to close, and it trails only Microsoft’s $68.7 billion acquisition of Activision Blizzard and Dell’s $67 billion purchase of EMC on the list of biggest tech deals ever.

Broadcom “started as a semiconductor company and over the last six years, we kind of moved into infrastructure software, and that has gone very well,” Tan told CNBC’s Jim Cramer in a September interview. “The recent acquisition of VMware was essentially another step towards the direction of creating a very balanced mix between” chips and infrastructure software geared to the enterprise, he said.

Broadcom CEO Hock Tan sits down with Jim Cramer

Broadcom reported better-than-expected profit in its latest quarterly earnings report on Thursday, even as revenue came in just shy of estimates. Broadcom’s artificial intelligence business has lifted overall growth to rates typically reserved for company’s a fraction its size.

In the fiscal fourth quarter, AI revenue increased 150% to $3.7 billion, with some of that growth coming from ethernet networking parts used to tie together thousands of AI chips.

That drove an overall increase in revenue of 51% to $14.05 billion. Broadcom’s infrastructure software division generated $5.82 billion in revenue for the quarter, nearly tripling from last year’s $1.97 billion, a number that included a big boost from VMware.

Within the AI boom, Broadcom hasn’t quite kept pace with Nvidia, whose graphics processing units are being used to power the training and running of the most powerful AI models. Nvidia’s market cap has swelled by over 170% this year to $3.3 trillion, behind only Apple and Microsoft among the most valuable public companies in the world. Broadcom has doubled in value this year.

While trailing Nvidia, Broadcom has still positioned itself for hefty growth at a time that former chip titan Intel is downsizing and restructuring. It’s also far surpassed Advanced Micro Devices, which is valued at $206 billion after dropping 14% this year.

Broadcom refers to its custom AI accelerators as XPUs, which are different than the GPUs Nvidia sells. Broadcom said it doubled shipments of XPUs to “our three hyperscale customers.” The company doesn’t name the customers, but analysts say the three are Meta, Alphabet and TikTok parent ByteDance.

“The outlook for AI looks very bright for both GPUs and XPUs,” analysts at Cantor wrote in a note after this week’s earnings report. The firm recommends buying Broadcom shares and lifted its 12-month target to $250 from $225. The stock closed on Friday at $224.80.

History of big deals

The company that exists today as Broadcom is the product of a 2015 merger of Avago, which spun out of Agilent Technologies in 2005, and Broadcom, which was started in southern California in 1991. While Avago was the acquiring entity, the combined company took the name Broadcom. Tan, who was named CEO of Avago in 2006, was tapped to lead it.

Broadcom’s revenue in fiscal 2016 was $13.2 billion, and its biggest business was semiconductors for set-top boxes and broadband access.

The company’s market cap topped $100 billion in 2018, at which point wired infrastructure was still the primary source of revenue. Broadcom changed its financial reporting in late 2019 to focus on semiconductor solutions and infrastructure software, with the former accounting for about 73% of revenue in 2020.

But with the addition of VMware, infrastructure software has jumped from 21% of revenue in the October quarter last year to 41% in the period that just ended. Even excluding VMware, Broadcom said the business grew 90% from a year earlier.

The company said it expects infrastructure software revenue to increase 41% year-over-year in the current quarter to $6.5 billion while semiconductor revenue will rise by 10% to $8.1 billion. AI revenue will jump 65% year-on-year to $3.8 billion, the company said.

Broadcom’s market opportunity continues to grow because of the compute demands for large language models being created and deployed by the biggest tech companies, Tan told Cramer in September. 

“Each new generation LLM requires multiple x — 2-3x, maybe more — of compute, each time, each year,” Tan said. “You can imagine that’s a driver towards a larger and larger compute opportunity, which is going to be taken up largely by XPUs”

Alphabet, Amazon, Meta and Microsoft spent a combined $58.9 billion on capital expenditures in the latest quarter, according to tech research firm Futuriom. That represented 63% growth and equaled about 18% of aggregate revenue.

Broadcom’s differentiator in the market is that it’s making very expensive custom chips for AI for the world’s top tech companies with the promise of helping them move 20% to 30% faster and use 25% less power, Piper Sandler analyst Harsh Kumar told CNBC’s “Squawk on the Street” on Friday.

“You have to be a Google, you have to be a Meta, you have to be a Microsoft or an Oracle to be able to use those chips,” Kumar said. “These chips are not meant for everybody.”

WATCH: Broadcom’s visibility through 2027 is the most important news from the call

Broadcom's visibility through 2027 is the most important news from call, says Piper Sandler's Kumar

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Just Eat shares soar 54% after Prosus offers to buy food delivery firm for $4.3 billion

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Just Eat shares soar 54% after Prosus offers to buy food delivery firm for .3 billion

Just Eat Takeaway said it was delisting its shares from the London Stock Exchange due to the “low liquidity and trading volumes” of its shares on the exchange.

Mike Kemp | In Pictures | Getty Images

European food delivery giant Just Eat Takeaway.com is poised to be acquired by Dutch technology investor Prosus in an all-cash deal worth roughly 4.1 billion euros ($4.3 billion).

The offer values Just Eat’s shares at 20.3 euros each, representing a premium of 63% when compared to the firm’s closing price on Friday.

Prosus, which is majority owned by South Africa’s Naspers, already holds a 28% stake in leading food delivery company Delivery Hero.

Shares of Just Eat soared as much as 54% on Monday morning, notching a new 52-week high. The stock price was last seen trading 52.8% higher on the news.

Prosus shares fell 8.3%, tumbling to the bottom of the pan-European Stoxx 600 index, while Delivery Hero rose 5.4%.

“We are very excited for Just Eat Takeaway.com to join the Prosus group and the opportunity to create a European tech champion,” Fabricio Bloisi, CEO of Prosus and Naspers group, said in a statement.

“We believe that combining Prosus’ strong technical and investment capabilities with Just Eat Takeaway.com’s leading brand position in key European markets will create significant value for our customers, drivers, partners, and shareholders,” Bloisi said.

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Just Eat

The offer comes after a rocky few years for Just Eat. Like many other food delivery companies, the company’s stock price collapsed in the wake of the coronavirus pandemic, which had initially boosted the firms as consumers turned to these platforms during lockdowns.

A stark shift in consumer habits since, however, led to a sharp deceleration in growth rates.

The Dutch multinational delisted from the London Stock Exchange late last year, citing an effort to “reduce the administrative burden, complexity and costs associated with the disclosure and regulatory requirements of maintaining the LSE listing.” The move made Amsterdam the firm’s sole trading venue.

In November, Just Eat Takeaway.com said it would sell its GrubHub arm to New York-based online takeout startup Wonder for $650 million — a huge discount compared to the $7.3 billion the firm paid for the U.S. food delivery app.

“Prosus fully supports our strategic plans and its extensive resources will help to further accelerate our investments and growth across food, groceries, fintech and other adjacencies. We are looking forward to an exciting future together,” Jitse Groen, CEO and founder of Just Eat Takeaway.com, said in a statement on Monday.

— CNBC’s Ryan Browne contributed to this report.

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Chinese medical devices are in health systems across U.S., and the government and hospitals are worried

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Chinese medical devices are in health systems across U.S., and the government and hospitals are worried

A popular medical monitor is the latest device produced in China to receive scrutiny for its potential cyber risks.  However, it is not the only health device we should be concerned about. Experts say the proliferation of Chinese health-care devices in the U.S. medical system is a cause for concern across the entire ecosystem. 

The Contec CMS8000 is a popular medical monitor that tracks a patient’s vital signs.  The device tracks electrocardiograms, heart rate, blood oxygen saturation, non-invasive blood pressure, temperature, and respiration rate.  In recent months, the FDA and the Cybersecurity and Infrastructure Security Agency (CISA) both warned about a “backdoor” in the device, an “easy-to-exploit vulnerability that could allow a bad actor to alter its configuration.”  

CISA’s research team described “anomalous network traffic” and the backdoor “allowing the device to download and execute unverified remote files” to an IP address not associated with a medical device manufacturer or medical facility but a third-party university — “highly unusual characteristics” that go against generally accepted practices, “especially for medical devices.”

“When the function is executed, files on the device are forcibly overwritten, preventing the end customer—such as a hospital—from maintaining awareness of what software is running on the device,” CISA wrote.

The warnings says such configuration alteration could lead to, for instance, the monitor saying that a patient’s kidneys are malfunctioning or breathing failing, and that could cause medical staff to administer unneeded remedies that could be harmful. 

The Contec’s vulnerability doesn’t surprise medical and IT experts who have warned for years that medical device security is too lax. 

Hospitals are worried about cyber risks

“This is a huge gap that is about to explode,” said Christopher Kaufman, a business professor at Westcliff University in Irvine, California, who specializes in IT and disruptive technologies, specifically referring to the security gap in many medical devices.

The American Hospital Association, which represents over 5,000 hospitals and clinics in the U.S., agrees. It views the proliferation of Chinese medical devices as a serious threat to the system. 

As for the Contec monitors specifically, the AHA says the problem urgently needs to be addressed. 

“We have to put this at the top of the list for the potential for patient harm; we have to patch before they hack,” said John Riggi, national advisor for cybersecurity and risk for the American Hospital Association.  Riggi also served in FBI counterterrorism roles before joining the AHA. 

CISA reports that no software patch is available to help mitigate this risk, but in its advisory said the government is currently working with Contec. 

Contec, headquartered in Qinhuangdao, China,  did not return a request for comment. 

One of the problems is that it is unknown how many monitors there are in the U.S. 

“We don’t know because of the sheer volume of equipment in hospitals. We speculate there are, conservatively, thousands of these monitors; this is a very critical vulnerability,” Riggi said, adding that Chinese access to the devices can pose strategic, technical, and supply chain risks. 

In the short-term, the FDA advised medical systems and patients to make sure the devices are only running locally or to disable any remote monitoring; or if remote monitoring is the only option, to stop using the device if an alternative is available. The FDA said that to date it is not aware of any cybersecurity incidents, injuries, or deaths related to the vulnerability.

The American Hospital Association has also told its members that until a patch is available, hospitals should make sure the monitor no longer has access to the internet, and is segmented from the rest of the network.

Riggi said the while the Contec monitors are a prime example of what we don’t often consider among health care risk, it extends to a range of medical equipment produced overseas. Cash-strapped U.S. hospitals, he explained, often buy medical devices from China, a country with a history of installing destructive malware inside critical infrastructure in the U.S.  Low-cost equipment buys the Chinese potential access to a trove of American medical information that can be repurposed and aggregated for all sorts of purposes. Riggs says data is often transmitted to China with the stated purpose of monitoring a device’s performance, but little else is known about what happens to the data beyond that. 

Riggi says individuals aren’t at acute medical risk as much as the information being collected and aggregated for repurposing and putting the larger medical system at risk. Still, he points out that, at least theoretically, is can’t be ruled out that prominent Americans with medical devices could be targeted for disruption. 

“When we talk to hospitals,  CEOS are surprised, they had no idea about the dangers of these devices, so we are helping them understand.  The question for government is how to incentivize domestic production, away from overseas,”  Riggi said. 

Chinese data collection on Americans

The Contec warning is similar at a general level to TikTok, DeepSeek, TP-Link routers, and other devices and technology from China that the U.S. government says are collecting data on Americans. “And that is all I need to hear in deciding whether to buy medical devices from China,” Riggi said. 

Aras Nazarovas, an information security researcher at Cybernews, agrees that the CISA threat raises serious issues that need to be addressed. 

“We have a lot to fear,” Nazarovas said. Medical devices, like the Contec CMS8000, often have access to highly sensitive patient data and are directly connected to life-saving functions.  Nazarovas says that when the devices are poorly defended, they become easy prey for hackers who can manipulate the displayed data, alter vital settings, or disable the device completely.  

“In some cases, these devices are so poorly protected that attackers can gain remote access and change how the device operates without the hospital or patients ever knowing,” Nazarovas said. 

The consequences of the Contec vulnerability and vulnerabilities in an array of Chinese-made medical devices could easily be life-threatening.  

“Imagine a patient monitor that stops alerting doctors to a drop in a patient’s heart rate or sends incorrect readings, leading to a delayed or wrong diagnosis,” Nazarovas said. In the case of the Contec CMS8000, and Epsimed MN-120 (a different brand name for the same tech), warning from the government, these devices were configured to allow remote code execution by the remote server.  

“This functionality can be used as an entry point into the hospital’s network,” Nazarovas said, leading to patient danger.  

More hospitals and clinics are paying attention. Bartlett Regional Hospital in Juneau, Alaska, does not use the Contec monitors but is always looking for risks. “Regular monitoring is critical as the risk of cybersecurity attacks on hospitals continues to increase,” says Erin Hardin, a spokeswoman for Bartlett.  

However, regular monitoring may not be enough as long as devices are made with poor security. 

Potentially making matters worse, Kaufman says, is that the Department of Government Efficiency is hollowing out departments in charge of safeguarding such devices. According to the Associated Press, many of the recent layoffs at the FDA are employees who review the safety of medical devices. 

Kaufman laments the likely lack of government supervision on what is already, he says, a loosely regulated industry. A U.S. Government Accountability Office report as of January 2022, indicated that 53% of connected medical devices and other Internet of Things devices in hospitals had known critical vulnerabilities. He says the problem has only gotten worse since then. “I’m not sure what is going to be left running these agencies,” Kaufman said.

“Medical device issues are widespread and have been known for some time now,” said Silas Cutler, principal security researcher at medical data company Censys. “The reality is that the consequences can be dire – and even deadly. While high-profile individuals are at heightened risk, the most impacted are going to be the hospital systems themselves, with cascading effects on everyday patients.”  

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Substack boosts video capabilities amid potential TikTok ban

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Substack boosts video capabilities amid potential TikTok ban

Rafael Henrique | SOPA Images | AP

After posting almost 200 videos, amassing hundreds of thousands of followers and racking up millions of views, Carla Lalli Music is quitting YouTube. Substack is her new focus. 

Music is a cookbook author and food content creator, and she is shifting her focus to Substack, a subscription platform that lets creators charge users subscriptions for access to their content. Music told CNBC she came to that decision after earning more in one year of using Substack, nearly $200,000 in revenue, than she did by posting videos on YouTube since 2021. 

Music is the exact kind of content creator that Substack is trying to lure to its platform as TikTok’s future in the U.S. remains in limbo. 

San Francisco-based Substack launched in 2017 as a tool for newsletter writers to charge readers a monthly fee to read their content. The platform allows creators to connect to their followers directly without having to navigate algorithmic models that control when their content is shown, as is the case on TikTok, Google’s YouTube and other social platforms. Substack has raised about $100 million, most recently at a post-money valuation of more than $650 million, the company told CNBC.

This year, Substack has broadened its focus beyond newsletters, and on Thursday, it announced that creators can now post video content directly through the Substack app and monetize these videos.

“There’s going to be a world of people who are much more focused on videos,” Substack Co-founder Hamish McKenzie told CNBC. “That is a huge world that Substack is only starting to penetrate.”

Substack began this push after the social media landscape was thrown into flux as a result of the effective ban of TikTok in January that caused the popular Chinese-owned service to go offline for a few hours. TikTok was also removed from Apple and Google’s app stores for nearly a month. 

The disruption to TikTok in January happened as a result of a law signed by former President Joe Biden to force a sale of the Chinese-owned app or have it effectively banned in the U.S. On his first day in office, President Donald Trump signed an executive order extending TikTok’s ability to operate in the U.S., but that order expires on April 5. 

Days after TikTok went offline, Substack launched a $20 million fund to court creators to its platform.

“If TikTok gets banned for political reasons, there’s nothing to do with the work you’ve done, but it really affects your life,” McKenzie said. “The only and surefire guard against that is if you don’t place your audience in the hands of some other volatile system who doesn’t care about what happens to your livelihood.”

Moving beyond newsletters

McKenzie says that they are going after creators on competing social media platforms to start sharing their video content on Substack.

“Video-first creators, people who are mobile oriented, there’s a whole lot of new possibility waiting to be unlocked once they meet this model in the right place,” McKenzie said. 

Already, Substack has more than 4 million paid subscriptions with over 50,000 creators who make money on the platform, the company said. Substack says that 82% of its top 250 revenue-generating creators have already integrated audio or video into their content, reflecting a growing emphasis on multimedia content.

Prior to the video announcements, Substack allowed creators to post videos on the app to Notes, which is the platform’s front-facing feed format. But the feature did not allow creators to publish video content behind Substack’s paywalls. 

The update enables creators to put video content behind a paywall and it provides data on estimated revenue impact. It also allows them to track viewership and new subscribers.

Carla Lalli Music is a cookbook writer and food creator.

Carla Lalli Music

Our base case for TikTok is that it gets banned in the U.S.: Lead Edge Capital's Mitchell Green

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