Tech titans in trouble: Microsoft outage and Nvidia scandal

The consequences of two simultaneous crises in the tech industry are rippling through Wall Street, Washington, and all across the world. First, a Microsoft outage has crippled essential services for millions of people, along with the businesses and governments that they support, all the way from Australia to here in the United States. And then we have that espionage scandal at NVIDIA. That has started a blame game here in Washington over who's responsible for crucial data chips that would be sent from the U.S. To China. Let's start with the problems at Microsoft and the sheer scale of what has just happened. Now, it began more than 24 hours ago on Thursday when Microsoft first confirmed the outages. Common business services went offline, including email, video calls and scheduling programs. It has caused disruptions for as many as 450 million users in at least 74 different countries. It has hit everything from the National Health Services in the United Kingdom. Major airlines in India and Australia's own spy agency. We have correspondents in Arlington, Virginia and Wall Street. Let's start with our Matthew Torres, who is outside some of Microsoft's offices here near the nation's capital. Matthew, one of the major questions is how so much of the world relies on services from just this one company. Right, and it puts into question if we need to diversify services, Alex. Microsoft is now having to apologize for the disruptions. And as you have mentioned, hundreds of millions of users in more than 70 countries have been impacted. And in a new update announced within the last 45 minutes, the tech giant says it has identified the problem. And that restoring services are happening gradually. They say the issue is not related to a cybersecurity actor or AI agents, rather, quote, a network capacity upgrade that surfaced following a recent network change. And in simpler terms, from one of their other updates, Microsoft says that servers just unexpectedly went down. This is one of the longest outages in Microsoft's history. It's also the second time this year we have seen this type of disruption from the company impacting a lot of people in everyday services. Analysts say this also comes as Microsoft has offered 60,000 employees buyouts across several departments as it looks to tap into more AI infrastructures. Yeah, Matthew, tell us more about the scale, because that really cannot be overstated. What else was hit? Right. So when we say global disruptions, that is the reality. But frankly, it could be an understatement as well. Every really a lot of sectors across the world experiencing some sort of issue, whether that be the National Pharmacy Association in the UK warning a delay in picking up prescriptions, whether that's how courthouses handle their cases. We've heard of one case where a trial had to be put on pause because of this, as well as police force saying they're unable to or people being able to report online and so this is wide-reaching across the globe. One of the more recent examples is the COP 31 climate conference in Turkey. Delegates and advisors saying they are unable to access emails, documents and to properly communicate. It's just made it really difficult to access negotiating documents and share updates. The reality is that we assume that these things are always going to be there and are always going to work well, and then when they don't, it really exposes the vulnerability that we have. I just didn't know what to expect coming in this morning, but with teams still around it's been okay, but yeah, some colleagues have had a lot of chaos where their work is mostly on Outlook. Not receiving emails meaning Not executing any document, not receiving any confirmation from your counterparties. Basically, you know, you just sit and wait at your desk. Yeah, it's a waiting game. Now to the latest on that AI giant NVIDIA and the blame game that is now unfolding here in Washington. Top officials in the Trump administration have accused each other of failing to do more to prevent NVIDIA from giving information and access to its biggest rival, China. It follows the revelations that co-founder Jensen Huang's affair with an alleged Chinese spy and thrusting the country's tech rivalry again into the spotlight. I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H100s and so any leakage is very frustrating because it hurts our great companies and the AI race gives the Chinese an advantage. Now, NVIDIA says that tough U.S. export controls have largely shut it out of China's booming AI market. But there was an investigation by Reuters which revealed that around $3.2 billion worth of projects in China involved restricted NVIDIA processors. And it paints a picture of just how deeply embedded the company is in the Chinese market. It reaches beyond the largest tech firms to local government-backed projects, universities, and computing centers In the regional Chinese provinces now, the projects in China that were identified by Reuters have not been linked to these allegations involving the now former CEO, Jensen Huang. I want to go to our Kristin Salumi, who is in Wall Street. So, Kristin, the knives really are coming out here in Washington. How do we expect this to play out? Yeah, really hard to say, but clearly there's infighting in the U.S. administration. The Treasury Secretary, Scott Bessent, there, not only saying that he was critical of Commerce Secretary Howard Lutnick and his decision not to put Megaspeed on an export blacklist. In that same interview, he was also saying that the Pentagon, the U.S. trade representative, and the State Department also had favored putting Megaspeed on a blacklist, Megaspeed being the company that was run by Alice Wan. The Singapore-based company run by Alice Wan, the alleged Chinese spy who had an affair with Jensen Huang of NVIDIA, investigators in the United States, now looking at whether or not they were funneling those chips to China through them. And so now we have Lutnick agreeing to testify before the Senate about What he knows, but that's not going to happen until December after President Donald Trump goes to China to meet Chinese President Xi Jinping next week at a summit. Thank you very much. Thank you very much. Clearly, there's tension possible there. Yeah, Kristen, there's also whiplash on Wall Street. Are NVIDIA's rivals trying to take advantage of this and cash in? Yeah, I'm just looking down at the latest numbers. You know, the NASDAQ's still down less than a percent. NVIDIA keeps falling. But the indices, broadly speaking, are actually on track to have a positive week. The NASDAQ is more up than down overall, while NVIDIA has lost about 8 percent this week, down some 30 percent from highs about a month ago. This does seem to be an opening for rival chip makers, AMD, Advanced Micro Devices, and Broadcom. They're two other chip makers who've seen their stock surge about 11 percent this week, although most of those gains were yesterday. Clearly, investors are looking for new places to put their money. But NVIDIA are some big shoes to fill. They were considered the gold standard. All right, Kristen Salumi on Wall Street and Matthew Torres outside Microsoft's offices in nearby Arlington, Virginia. Thank you both very, very much. And just over a week after Democrats took control of the U.S. Senate for the next Congress, an internal fight is heating up for who should lead the Democratic members. When they come back in January, Maryland Senator Chris Van Hollen is challenging New Yorker Chuck Schumer for that top job. Now, Schumer has been the party's Senate leader for almost a decade. And if Van Hollen now wins, it would represent a major ideological shift. In a tweet on Thursday, Van Hollen said that in the midterms, voters sent a loud and clear message saying, quote, we cannot return to business as usual in Washington. We need to meet the moment with a bold agenda to deliver for working people. While the Democrats battle over who will lead them in Congress, there's still one Senate race that has not yet been called. It is a real nail-biter. It is in Alaska, where the Democrat is up against the incumbent Republican, who happens to have the same name as the independent candidate. Our Alex Baird breaks it down for us. Alex? Yes, the drama that keeps on giving Alaska, and you're going to have to potentially, Alex, wait quite some time. We're having it tipped to be a November 25th or later election because because of a number of reasons. Now, let's have a quick zoom in. You've got... Mary Peltola, the Democratic candidate, she is leading and her margin has been increasing. 88% of the votes counted now, so we're getting there. But there's one key part of Alaska's voting system. You need to pass 50% to take the seat home. Now, at the same time, Alaska uses something called ranked choice voting. It basically means that you have four names on the ballot, including another Dan Sullivan. Now, the president had been concerned that people might vote for that other Dan Sullivan. Now, the way ranked choice voting works is that Lower ranked candidates, ones who are losing quite badly, get knocked off and their votes get reallocated. So potentially, those votes could get reallocated to this incumbent senator right here and he could take this home. But at the same time, Mary Peltola is doing extremely well. But you're going to have to wait a lot longer, Alex, because this is going to take quite some time. Yeah, one of the funny parts of the American electoral process. Alex Baird, thank you very much. So that would take the Democrats from 55 seats to 50 seats. But as Alex said, it could continue for quite some time. For now, I want to hand it back to our global headquarters in Doha.