The Exchange from the New Statesman. Weekly, in-depth, long-form interviews with guests, including Salman Rushdie. Would you say you are in the 11th Hour of Life? I hope I'm only in about the 9th or 10th. Ai Weiwei. So if you were to put on an exhibition called Ai Weiwei, The Last Work, we shouldn't believe it. Actually, you shouldn't believe anything I said. And Masha Alyokina from Pussy Riot. Is there a world in which you could ever go back to Russia? Politically, we exist there. Physically, we do not exist there. Covering politics. The most governmentally illiterate Labour Prime Minister in history. Culture. I'm not in the mood to take any risks lately. Society. Should education be a commodity? No. And philosophy. Sex is both personal and political in public. Listen wherever you are listening to this. Bloomberg Audio Studios. Podcasts. Radio. News. This is the Bloomberg Daybreak here at Podcast. Good morning. It's Monday the 20th of July. I'm Caroline Hepker in London. And I'm Stephen Carroll in Brussels. Coming up today, Andy Burnham 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 Burnham will become Britain's new Prime Minister today, inheriting an in-trade dominated by a sluggish economy and pressure to tackle the cost of living. In his first address from Denning 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. Burnham would 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, Burnham 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 Labour Party as I was a pro-business mayor of Greater Manchester. Burnham takes office with more than a million households behind on their electricity bills while personal insolvencies 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 U.S. military launched another wave of strikes on the Islamic Republic after three American soldiers were killed in Jordan and Iraq. A week of tit-for-tat 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. U.S. 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. And they continue to send signals that they want to talk, that they want to negotiate, but their behavior is what we're responding to. And their behavior is 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. Bloomberg's Ewan Potts has the details. Crude prices have topped a one-month 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 its modelling points towards European diesel industries falling to multi-year lows towards the year end. The market for diesel has been tightening on a host of factors, including the disruptions in the Strait of Hormuz, 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 Ewan Potts, Bloomberg Radio. Ukraine's foreign minister has said that Russia unleashed its largest ballistic missile attack against Kiev since the beginning of the war. According to President Zelensky, 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 defences. 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 Zelensky 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 moonshot AI has told investors it preparing for an IPO in as little as six months That comes after the startup's latest model, Kimi K3, upended industry perceptions of the country's AI capabilities. Sources tell Bloomberg the company is now seeking the blessing of its backers in a Hong Kong listing. Our China correspondent Min Min Lo 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 outrivals most frontier models except for Anthropics, Fable 5 and OpenAI's GPT 5.6. So it really stunned the tech world, which earlier this year, we're still thinking that maybe Chinese models are about 12 months behind the US AI models, but they seem to be closing their gap much faster than expected. Moonbrick's Min Min Lo there as Moonshot is reported to be wrapping up a fundraising round valuing the start-up at more than US$30 billion. Now, sports news. Spain have won the World Cup, beating Argentina 1-0 after extra time. Ferran Torres got the deciding goal in the 106th minute. Argentina were down to 10 men by that point after Enzo Fernandes 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 surrounding my family. It's just surreal. I feel great. It's amazing. Once in a lifetime experience. Viva España! Que viva! OK, it's Spain's second World Cup title after their 2010 win. And in golf, Ryan Fox has won the Open, sinking his final putt to claim the claret jug by a single shot. The New Zealander finished 10 under par at Royal Birkdale, one stroke clear of American Cameron Young in a dramatic final, 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. I was just trying to get it towards the hole somewhere. And yeah, it's surreal that it went in. That's 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 had Ryanair profits in. For the first quarter after tax, profits came in below expectations, 538 million euros. This, though, after we have seen this significant tech sell-off 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 COSPI down by 4.2%. The COSDAQ also slumping. Chinese shares, though, are up with two major state funds revealing more purchases of Chinese equity. So, that has propped up markets in mainland China. Looking elsewhere to the oil markets, more tensions and strikes between the US and Iran. mean that Brent crude is now trading at $90.22, 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 collector's 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, extremely heavy as their 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 on the floor. No, I did read about that T-Rex. I mean, it is absolutely enormous and went for sort of huge amount of money. Look, the criticism is that scientists are worried that these skeletons and fossils are going to go into private collections and 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. 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 bladder 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 Woolcock. 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 post-general election day in that there's going to be scaffolding. People are setting up cameras all around me in Downing Street. Keir Starmer 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 Burnham will come back to Downing Street from 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, once again as the UK tries to find its new direction. What does the moment mean then for Labour, the Labour Party, for Andy Burnham? What can we really expect from, are we dubbing it Burnhamism? Well, for Labour, this is a moment of optimism and it's also a very desperate gamble. 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 mean I know your skepticism about Burnhamism Caroline but in many ways Andy Burnham has a much clearer vision for the UK than Keir Starmer 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, the nationalisation of Thames water, a potential announcement on social care, scrap and digital ID but then we do not know and I find this astonishing to say anyone firmly in Andy Burnham's top team. There are many rumours inside the press that Shobhan Mahmood 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, exactly what directions come out of this new Burnham administration. That's the arrivals, James. but let's talk for a moment about the departure. Keir Starmer will be leaving office after just over two years after winning the general election. How will his time in office be remembered? Keir Starmer 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. I, although, return to his five missions that he set out for this government, which were kick-starting economic growth, making Britain a clean energy superpower, raising public confidence in the police and the state and taking back Britain's 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 lists. 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 Burnham'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 a momentous one. It's interesting that there is so much optimism in Labour 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 Burnham can make 2026 a different year for Labour. 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 Labour government is going to be more pro-business, what type of pro-business it's going to be. I mean, Andy Burnham 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 programme that may emerge from Burnham. What does it mean in terms of taxes and spending? James Walcock, thank you so much for being with us. Live at Downing Street, our UK politics reporter, James Walcock. Stay with us. More from Bloomberg Daybreak Europe coming up after this. This week on Leaders with me, Francine Lacqua. I speak to tennis legend Rafa Nadal about how he stayed competitive despite injury. I was able to enjoy the victories probably more than if I will not have this issue. One iconic match. In my mind was, I am almost dead. And whether he misses playing. I don't miss tennis because there was nothing else to offer. Listen and watch Leaders with me, Francine Lacqua, on Bloomberg Television or wherever you get your podcasts. China's Moonshot AI has told investors it's preparing for a stock market debut in as little as six months. That's after its latest model, Kimi 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 centre of a sell-off in 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 talking about companies whether we 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 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 Sachs, the White House AI advisor, was posting, and he was making a point that 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? 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 Kimmy has stood out. It's a 2.8 trillion parameter model. 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 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're really excited about our new products, while we really love what we've just put out, we're not as good as OpenAI Anthropic. We're just a little bit behind them. Okay, so that's really interesting about, you know, why Moonshaw and Kimi K3 have made such an impact. But 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. Like I mentioned, Kimi 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, is said it's only second to Fable from Anthropic, which, if we all remember, Mythos and Fable from Anthropic are the AI models that the company itself said are 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 U.S., 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 that the US has. But speaking of resources, this is also why there's bullishness around Alibaba is because it is a 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 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, these things are going to fly back and forth. The thing that I can say sitting here in Hong Kong is that 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, 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, 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 at 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 Sachs and Vinod Kostler, who's one of the 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 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. If you're enjoying the podcast, give us a follow, leave a rating or review and maybe send it to that one friend or colleague who's always trying to keep up with the news. 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