WEBVTT - Bloomberg Businessweek Weekend - March 3rd, 2023 0:00:01.280 --> 0:00:05.600 This is Bloomberg business Week inside from the reporters and 0:00:05.840 --> 0:00:09.400 editors who bring you America's most trusted business magazine, plus 0:00:09.480 --> 0:00:13.640 global business, finance and tech news. The Bloomberg Business Week 0:00:13.680 --> 0:00:18.640 Podcast with Carol Masser and Tim Stenebec from Bloomberg Radio. 0:00:20.000 --> 0:00:21.680 You know, we've talked a lot about the one year 0:00:21.720 --> 0:00:24.959 anniversary of that Russian invasion of Ukraine, and Carol, I 0:00:25.000 --> 0:00:27.560 did not know about this until reading this story. But 0:00:27.880 --> 0:00:31.080 President Vladimir Putin he begins the war. A network used 0:00:31.160 --> 0:00:34.920 throughout Europe, including by the Ukrainian military, then faced an 0:00:35.040 --> 0:00:38.160 unprecedented cyber attack, and it's one that everyone is finally 0:00:38.200 --> 0:00:39.640 talking about. Yeah. I feel like it went from no 0:00:39.720 --> 0:00:42.040 One to everyone, and they should be. The story is 0:00:42.040 --> 0:00:43.919 coming up in the new issue of Bloomberg Business Week 0:00:43.960 --> 0:00:47.480 on newstands tomorrow, already online at Bloomberg dot com, slash 0:00:47.520 --> 0:00:49.959 business Week, and of course on the Bloomberg Let's get 0:00:49.960 --> 0:00:52.200 to it with Bloomberg News Cyber and Emerging tech reporter 0:00:52.280 --> 0:00:55.480 Katrina Manson. She joins us via zoom in New York City. 0:00:55.720 --> 0:00:57.680 And of course you've got the editor of Bloomberg Business Week, 0:00:57.720 --> 0:01:00.760 Deil Webber, right here in our Bloomberg Interactive Poker Studio. 0:01:00.880 --> 0:01:05.600 So tell us about this hack in my ongoing propaganda 0:01:05.640 --> 0:01:11.679 for rto messaging m. Katrina and I found ourselves in 0:01:11.760 --> 0:01:15.240 the Washington DC bureau and Katrina was like, have you 0:01:15.280 --> 0:01:16.800 heard of this company vias that? And I was like, 0:01:16.800 --> 0:01:18.680 what are you talking about? She was like a satellite company. 0:01:18.720 --> 0:01:21.039 I was like, I don't know anything you're talking about. 0:01:21.080 --> 0:01:24.280 And it turns out that there was a hack at 0:01:24.280 --> 0:01:27.880 the beginning of the Russian invasion, and no one initially 0:01:27.920 --> 0:01:32.920 attributed that to Russia. But as the weeks passed and 0:01:33.520 --> 0:01:37.160 Western governments, you know, finally got around to pointing a finger. 0:01:37.360 --> 0:01:41.119 They pointed that figure a finger out Russia, which obviously 0:01:41.200 --> 0:01:45.760 Russia says that we're innocent. But what it really revealed 0:01:46.120 --> 0:01:48.840 was something that I thought was worthy of further exploration. 0:01:48.840 --> 0:01:50.840 And Katrina did a great job on this. And it 0:01:50.840 --> 0:01:55.120 turns out satellites are really unsecure and that is a 0:01:55.120 --> 0:01:57.880 little frightening when you think about the amount of data 0:01:57.960 --> 0:02:02.400 that is sent there um. And so this virset hack 0:02:02.480 --> 0:02:05.360 that you read about, Katrina tell us why it ended 0:02:05.440 --> 0:02:08.360 up being a much overdue wake up call for the 0:02:08.400 --> 0:02:13.520 satellite industry. Well, I think tracking it down was so fascinating. 0:02:13.919 --> 0:02:15.880 Reports came out in drifts and drabs. There were other 0:02:15.960 --> 0:02:18.799 journalists who are very obsessed with this issue, who were 0:02:18.919 --> 0:02:21.040 of course covering it, but it was very hard to 0:02:21.040 --> 0:02:25.959 put together the overall picture. And some cybersecurity researchers did 0:02:26.080 --> 0:02:29.600 incredible work really trying to encourage the company to talk 0:02:29.600 --> 0:02:33.200 about this in public. And when I say cybersecurity researchers, 0:02:33.280 --> 0:02:36.360 I mean hackers. They have been trying to hack Space 0:02:36.520 --> 0:02:41.520 for a decade clubs for white hat reasons. That's classically 0:02:41.520 --> 0:02:44.200 known as for good to share their information so other 0:02:44.240 --> 0:02:46.920 people improve. But it's a really sensitive area. And so 0:02:46.960 --> 0:02:48.959 one of the main people I spoke to for the story, 0:02:49.080 --> 0:02:52.520 Ruben Santa Marta, he's been warning since twenty fourteen that 0:02:52.680 --> 0:02:55.960 Space is insecure. And he said to me that page 0:02:56.000 --> 0:02:58.680 ten and eleven of one of these very esenteric papers 0:02:58.680 --> 0:03:02.200 that he'd written actually essentially predicted exactly what happened to 0:03:02.240 --> 0:03:06.680 the Ukrainian military, which relies on commercial satellite in remote 0:03:06.680 --> 0:03:09.639 places to get their Internet connections. That's essentially how they 0:03:09.680 --> 0:03:15.680 want to link frontline troops to commander control, to control drones, 0:03:15.800 --> 0:03:17.520 all the things that you would need to respond to 0:03:17.560 --> 0:03:20.320 a very swift or what was intended to be a 0:03:20.440 --> 0:03:24.320 very swift lightning invasion by the Russians. So the stakes 0:03:24.320 --> 0:03:26.560 were incredibly high, and it came down to a lot 0:03:26.600 --> 0:03:30.000 of researchers who've been clanging the bell for this for 0:03:30.080 --> 0:03:32.760 so many years. Another one I spoke to called James 0:03:32.800 --> 0:03:38.200 Parvell for the story. He intercepted satellite data transmissions that's 0:03:38.240 --> 0:03:41.040 from the satellite down to in this case, ships that 0:03:41.080 --> 0:03:43.960 were relying on satellite connections, and he got hold of 0:03:43.960 --> 0:03:48.280 the crew manifests, passport details, credit card details. It is 0:03:48.320 --> 0:03:51.640 extraordinary how much out there in space there's not encrypted, 0:03:51.720 --> 0:03:53.440 and how easy it is to get hold of it. 0:03:53.560 --> 0:03:54.840 I see, And I was still hoping she was going 0:03:54.880 --> 0:03:56.880 to talk about Captain Midnight, but we'll get to that later. 0:03:57.520 --> 0:04:01.120 I have to I wonder if you can talk a 0:04:01.160 --> 0:04:04.000 little bit about the US intelligence on this. The US 0:04:04.080 --> 0:04:06.560 looks into it gleans that the Russians were prepared to 0:04:06.560 --> 0:04:10.240 take significant diplomatic and strategic risks, which feels like something 0:04:10.320 --> 0:04:13.040 that you could have told us before the US intelligence 0:04:13.080 --> 0:04:15.720 looked into that, Katrina. But I wonder if you can 0:04:15.880 --> 0:04:19.040 talk about how much the US knows as we stand 0:04:19.200 --> 0:04:23.520 today and maybe the extent to which we don't know. Well, 0:04:23.560 --> 0:04:25.719 I can tell you what I know, which is definitely 0:04:25.720 --> 0:04:28.960 not everything. But I think the US worked very quickly 0:04:29.000 --> 0:04:31.440 within about four weeks to work out that they thought 0:04:31.480 --> 0:04:35.000 it was the GRU that's responsible. That's Russian military intelligence. 0:04:35.040 --> 0:04:38.800 They have allegedly done lots of hacking, according to the 0:04:38.920 --> 0:04:41.480 US in the past. And what was interesting about that 0:04:41.640 --> 0:04:45.839 was that it was coordinated with the invasion. Now, once 0:04:45.880 --> 0:04:49.000 they established that, they then spent six weeks trying to 0:04:49.040 --> 0:04:51.240 commence the Europeans that they were right. And I think 0:04:51.279 --> 0:04:53.680 it has interesting echoes for the rest of how the 0:04:53.800 --> 0:04:56.799 US approached the Ukraine invasion, which was to flag early 0:04:56.839 --> 0:04:58.760 on to the Europeans, look, this is going to happen. 0:04:58.839 --> 0:05:01.400 We have the intel, and the Europeans, namely the French 0:05:01.440 --> 0:05:04.720 and German, said no, we don't think so. And there 0:05:04.839 --> 0:05:07.080 in the case of the satellite hack, the US actually 0:05:07.120 --> 0:05:10.400 went above and beyond and shared additional intel I'm told 0:05:10.520 --> 0:05:13.760 by a European official with the French and the Germans 0:05:13.800 --> 0:05:17.120 to try and convince them not only that this had happened, 0:05:17.480 --> 0:05:21.280 but that it was really important to blame Russia in public. 0:05:21.760 --> 0:05:25.240 And that's something the countries simply don't usually do well. 0:05:25.279 --> 0:05:27.080 As you say, at the end of the story, you 0:05:27.160 --> 0:05:29.120 have a quote from a source who says it is 0:05:29.160 --> 0:05:33.360 super super repeatable. So that's that's distressing. I was going 0:05:33.400 --> 0:05:35.000 to say, the good news is that this will never 0:05:35.080 --> 0:05:39.920 happen again. I may well be invited back. I'm sorry 0:05:39.920 --> 0:05:43.440 to say, so. Walk us through what has to happen 0:05:43.640 --> 0:05:48.000 in order for this to not happen again. I think 0:05:48.040 --> 0:05:50.240 at the most extreme end, some groups in the US 0:05:50.279 --> 0:05:55.120 are calling to make space systems um a critical infrastructure sector. 0:05:55.200 --> 0:05:56.919 I mean, that is terrible job, and I'm sorry to 0:05:56.960 --> 0:05:59.640 even introduce it, but it's essentially to say, give this 0:05:59.720 --> 0:06:07.440 sect way more prominent government support and essentially potentially regulation. 0:06:07.560 --> 0:06:10.600 That's something satellite companies mostly don't want, and I think 0:06:10.600 --> 0:06:12.760 the US government isn't going to do that. It would 0:06:12.760 --> 0:06:14.760 require Congress to step in. It's part of a five 0:06:14.839 --> 0:06:16.520 year review. I mean, it's just going to get sucked 0:06:16.560 --> 0:06:19.880 into all sorts of bog down into stuff. But the 0:06:20.600 --> 0:06:22.960 easiest thing to do is to set standards. And that's 0:06:22.960 --> 0:06:25.680 actually what the source who said this is super super 0:06:25.680 --> 0:06:29.359 repeatable it's doing. He wants international countries to agree. Well, 0:06:29.400 --> 0:06:31.919 how do we run our satellite systems. What do we 0:06:31.960 --> 0:06:34.279 do with the satellite up in space? How do we 0:06:34.320 --> 0:06:37.240 control the link, what goes into the ground network. And 0:06:37.279 --> 0:06:40.400 as you have more and more satellites going up into space, 0:06:40.440 --> 0:06:44.760 I mean the numbers are kind of these numbers look 0:06:44.800 --> 0:06:48.280 like yeah, I mean, it's from about five thousand active 0:06:48.839 --> 0:06:51.720 satellites in orbit at the moment to within the next 0:06:51.720 --> 0:06:54.359 seven years. But my end predictions are one hundred thousand. 0:06:54.760 --> 0:06:57.760 That's because satellites are getting smaller. Launch is getting easier. 0:06:57.880 --> 0:07:02.159 Everyone's into this new blow or low Earth orbit, which 0:07:02.200 --> 0:07:04.800 is much closer, so easier to get to. The satellite 0:07:04.800 --> 0:07:07.839 that got hacked was a geostationary satellite way higher, So 0:07:07.839 --> 0:07:10.080 you're going to see way more satellites in which means 0:07:10.080 --> 0:07:12.200 that if one gets hacked, there are others you can 0:07:12.200 --> 0:07:15.000 rely on. But I think what's key is establishing standards 0:07:15.040 --> 0:07:18.000 and working out what goes into that gloom and protecting 0:07:18.040 --> 0:07:21.440 ground networks. I mean, that's actually what the entry was 0:07:21.560 --> 0:07:26.160 in this hack. And there are really convoluted chains between 0:07:26.680 --> 0:07:29.880 the different operators of a satellite network, and it seems 0:07:29.880 --> 0:07:31.960 that the ball got dropped in that case, there was 0:07:32.000 --> 0:07:35.440 a third party operator that's whose speech. Then it went 0:07:35.520 --> 0:07:37.160 all the way to buy that. It's our new kind 0:07:37.160 --> 0:07:39.200 of warfare, right, cyber warfare, and it like you think 0:07:39.200 --> 0:07:41.840 about nuclear deterrance, Like how we create that kind of 0:07:41.840 --> 0:07:46.120 deterrence when it comes to global satellites. Incredible story. Katrina Manson, 0:07:46.200 --> 0:07:49.040 Cyber and Emerging Tech reporter at Bloomberg News via zoom 0:07:49.080 --> 0:07:51.760 Joel Weber, editor at Bloomberg BusinessWeek. This story in the 0:07:51.800 --> 0:07:55.080 new issue at Bloomberg business Week Magazine. You're listening to 0:07:55.160 --> 0:07:59.040 the Bloomberg Business Week podcast just Live week days from 0:07:59.040 --> 0:08:02.400 two to five pm Easter on Bloomberg Radio, the Bloomberg 0:08:02.480 --> 0:08:05.440 Business a band You two. You can also listen live 0:08:05.560 --> 0:08:09.160 to our flagship New York station, Just Say Alexa play 0:08:09.240 --> 0:08:13.360 Bloomberg eleven thirty. All right, So, getting to a clean 0:08:13.520 --> 0:08:16.600 energy world, it is already up ending the establishment. It 0:08:16.640 --> 0:08:18.440 costs a lot of money, and it requires a whole 0:08:18.520 --> 0:08:20.840 lot of new infrastructure. So Carol, this is going to 0:08:20.880 --> 0:08:23.080 bring us to our next big story in the upcoming 0:08:23.160 --> 0:08:26.040 issue of Bloomberg business Week. This story takes us to 0:08:26.120 --> 0:08:30.520 a two hundred and eleven mile road in the Alaskan wilderness. Yeah. 0:08:30.560 --> 0:08:33.000 The new issue of Bloomberg Business Week, out on newstands 0:08:33.080 --> 0:08:35.160 later on this week. Already on the Bloomberg this story 0:08:35.160 --> 0:08:37.240 you can find it and also at Bloomberg dot com 0:08:37.320 --> 0:08:39.720 slash business Week. So let's get to it with us. 0:08:39.840 --> 0:08:42.720 Is David Wollman, Bloomberg Business Week contributor, joining us via 0:08:42.800 --> 0:08:45.640 zoom in Hawaii along with the editor of Bloomberg Business 0:08:45.640 --> 0:08:47.760 Week till web where he's here in our Bloomberg Interactive 0:08:47.760 --> 0:08:50.400 Broker studio. The story fits into another conversation we just 0:08:50.520 --> 0:08:55.040 had about energy infrastructure and all that it entails. Don't 0:08:55.080 --> 0:08:57.960 tell us about it. What really stood out to us 0:08:58.080 --> 0:09:02.280 when David pitched us the story was that it starts 0:09:02.320 --> 0:09:04.719 to look like how the US will will try and 0:09:04.840 --> 0:09:07.920 become energy independent. There's a lot of stuff that we 0:09:08.120 --> 0:09:11.520 need to achieve that, and you know, we're gonna need 0:09:11.559 --> 0:09:14.360 to continue to import stuff for the foreseeable future. But 0:09:14.559 --> 0:09:17.120 a little place called Alaska happens to have a lot 0:09:17.200 --> 0:09:20.560 of resources. But in order to get there, we might 0:09:20.640 --> 0:09:23.439 need to build a road, um like two hundred and 0:09:23.440 --> 0:09:27.719 eleven miles into the wilderness. And it really speaks to 0:09:27.880 --> 0:09:31.599 what a complicated idea energy and dependence actually is. It 0:09:31.760 --> 0:09:33.959 sounds great and then it's like, oh, right, how do 0:09:34.000 --> 0:09:37.040 you get that stuff out of the ground and into 0:09:37.480 --> 0:09:41.640 you know, electric batteries for cars? And David, what does 0:09:41.679 --> 0:09:44.400 that look like in Alaska? And how have we come 0:09:44.480 --> 0:09:47.160 to a moment where we might be willing to, uh, 0:09:48.000 --> 0:09:53.040 you know, compromise some wilderness to get some new cars. Yeah. 0:09:53.080 --> 0:09:55.480 I first learned of this story because a guy in 0:09:55.559 --> 0:09:59.679 this tiny truck stop of called Coldfoot Camp up there 0:09:59.679 --> 0:10:02.400 about sixty miles north of the Arctic Circle. He sent 0:10:02.480 --> 0:10:04.559 me a direct message on Twitter and he said, you know, 0:10:04.640 --> 0:10:06.520 there are these helicopters flying in and out of this 0:10:06.640 --> 0:10:09.200 place all the time right now, doing all this prep 0:10:09.240 --> 0:10:12.599 work for this very controversial road that would cross some 0:10:12.679 --> 0:10:15.800 two hundred and eleven miles through the wilderness to access 0:10:15.920 --> 0:10:19.719 this long sought after mining district called the Ambler. And 0:10:20.040 --> 0:10:22.240 he just was trying to sound the alarm about it, saying, 0:10:22.320 --> 0:10:24.840 you know, nobody really knows this is happening. There are 0:10:24.840 --> 0:10:28.720 a lot of these controversial infrastructure projects related to mining 0:10:29.120 --> 0:10:31.920 in Alaska. This one just you know, doesn't have any 0:10:31.960 --> 0:10:35.439 Trump family members who are making news about it. And 0:10:35.520 --> 0:10:38.520 so he felt like I gotta tell someone, and so 0:10:38.679 --> 0:10:40.839 I flew up there just before the snow in the 0:10:41.000 --> 0:10:44.280 fall to see this with my own eyes, and you know, 0:10:44.440 --> 0:10:48.520 like a lot of these big infrastructure debates, you know, 0:10:48.679 --> 0:10:51.959 it's just as thorny as you could possibly imagine. We 0:10:52.080 --> 0:10:55.320 absolutely need these minerals out of the ground for green 0:10:55.400 --> 0:11:00.600 tech future, and it would be absolutely destructive to an 0:11:00.679 --> 0:11:03.880 invaluable piece of wilderness. And so you know, then the 0:11:04.000 --> 0:11:07.440 question becomes where do we land on this particular one 0:11:07.679 --> 0:11:11.760 versus that particular one or Bristol Bay, because we do 0:11:12.080 --> 0:11:16.320 need to develop more domestic sources for the supply chain. 0:11:16.920 --> 0:11:22.040 But you know, mining doesn't exactly have the most impressive 0:11:22.120 --> 0:11:26.200 track record when it comes to careful extraction of these materials, 0:11:26.280 --> 0:11:29.520 and so that that was sort of them again, the 0:11:29.640 --> 0:11:32.559 really thorny issue I wanted to go see firsthand. So 0:11:32.720 --> 0:11:37.800 what's the status of the Ambler Access project currently? Yeah, 0:11:37.880 --> 0:11:39.839 it was really like a kind of pipe dream for 0:11:39.920 --> 0:11:43.760 a long time. You know, geologists have known about this 0:11:44.440 --> 0:11:48.839 impressive mineral resource out there for generations now, but it's 0:11:48.880 --> 0:11:51.960 just way way too remote for anyone to take seriously 0:11:52.440 --> 0:11:55.040 when it came to the economics of extracting it. Then, 0:11:55.120 --> 0:11:57.920 about ten or fifteen years ago, this idea of building 0:11:58.000 --> 0:12:03.360 a road connecting the famous Dalton Highway to the to Ambler, 0:12:03.679 --> 0:12:06.800 it began to get a little more grown up attention, 0:12:06.880 --> 0:12:11.960 I would say, And now that there's momentum from Biden's 0:12:12.000 --> 0:12:17.280 Infrastructure Bill, the Inflation Reduction Act, and of course Alaska's 0:12:17.679 --> 0:12:21.920 kind of pro mining senators, the road has really gotten 0:12:22.320 --> 0:12:26.160 gotten more of a push. And so now there are 0:12:26.240 --> 0:12:29.240 some mining firms that have claims both in the mind 0:12:29.360 --> 0:12:32.880 the Ambler Mining District and then all along the proposed 0:12:32.960 --> 0:12:35.480 route as well, that are just trying to keep inching 0:12:35.559 --> 0:12:38.319 this thing forward, inching it forward, trying to please all 0:12:38.360 --> 0:12:43.040 the various stakeholders, you know, critical among them, I should add, 0:12:43.160 --> 0:12:46.360 are the Alaska Native corporations, which are you know, very 0:12:46.480 --> 0:12:49.920 powerful up there and also own some of the land 0:12:50.080 --> 0:12:53.320 that the road would would travel through. So right now 0:12:53.360 --> 0:12:57.680 they're doing kind of preliminary groundwork with like studying animal habitat, 0:12:57.880 --> 0:13:02.920 building helicopter landing zones, and trying to get this environmental 0:13:03.000 --> 0:13:07.440 impact statement finally permitted so that they can they can 0:13:07.480 --> 0:13:10.040 press forward with the thing. David, can you talk about 0:13:10.120 --> 0:13:12.559 how the American consumer plays into this. I know in 0:13:12.600 --> 0:13:16.280 your story you talk about how increased demand for evs 0:13:16.440 --> 0:13:20.800 might actually be a helpful solution here. Yeah, I'm glad 0:13:20.840 --> 0:13:23.079 you asked that, because this stuff gets so dizzying with 0:13:23.160 --> 0:13:25.000 the like should we build it? Should we not? Should 0:13:25.000 --> 0:13:27.960 we drill it? Should we not? And I paused at 0:13:28.040 --> 0:13:30.320 some point and just thought about my own life frankly, 0:13:30.440 --> 0:13:33.920 and my children saying, hey, you know, can we get 0:13:33.960 --> 0:13:36.400 an electric vehicle already? Like we should? We should be 0:13:36.559 --> 0:13:40.480 doing this thing. They're worried about climate change like everyone else. 0:13:41.080 --> 0:13:45.000 And you know, we noticed this is more me and 0:13:45.120 --> 0:13:48.160 my wife than me and my kids. But the tax 0:13:48.240 --> 0:13:53.679 incentives now, thanks to recent legislation, so that the everyday 0:13:53.720 --> 0:13:57.200 consumer is gonna get a nice rebate if they buy 0:13:57.840 --> 0:14:01.719 an EV But there are various those evs have to 0:14:02.040 --> 0:14:06.720 be produced or I think the specifics are some percentage 0:14:06.760 --> 0:14:09.560 of the materials, and the manufacturing has to happen within 0:14:09.600 --> 0:14:12.199 the United States in order from the consumer to get 0:14:12.280 --> 0:14:16.679 that rebate. And so now suddenly, like beyond Alaska Native corporations, 0:14:16.800 --> 0:14:21.760 beyond the mining companies, even beyond the legislators, the really 0:14:21.840 --> 0:14:25.360 the big push to access these materials might just come 0:14:25.440 --> 0:14:28.920 from everyday people like me who want to replace you know, 0:14:29.040 --> 0:14:34.520 the families mini suv with an EV and I think, 0:14:34.720 --> 0:14:37.560 you know, that's one of those sort of demand wins 0:14:37.720 --> 0:14:40.600 kind of kind of conversations. David just got about thirty 0:14:40.640 --> 0:14:43.720 seconds left here, So it sounds, you know, we understand 0:14:43.760 --> 0:14:45.600 the demand and the need for this, at the same 0:14:45.640 --> 0:14:48.040 time it sounds like it could be a mess and 0:14:48.160 --> 0:14:51.960 impact the climate negatively as a result of building this road. 0:14:52.040 --> 0:14:53.960 So thirty seconds, that's a big deal, and that's a 0:14:54.000 --> 0:14:56.840 big part of this story. It is, you know. And 0:14:56.920 --> 0:14:59.920 then the pace i'd ad is the time horizon puzzle, 0:15:00.000 --> 0:15:03.840 because even if they greenlit this thing tomorrow, no OAR 0:15:04.000 --> 0:15:05.520 is going to be coming out of the ground any 0:15:05.560 --> 0:15:07.720 sooner than a decade from now. So the question is, like, 0:15:08.000 --> 0:15:11.240 will our critical minerals ten to fifteen, twenty years from 0:15:11.280 --> 0:15:14.280 now be the same critical minerals we're talking about today. 0:15:14.440 --> 0:15:17.400 It's an incredible attention to people end on right like 0:15:17.520 --> 0:15:19.960 the future, like this seems like the future, but like 0:15:20.680 --> 0:15:23.320 the future changes. That's right. Ten years is a long time, 0:15:23.480 --> 0:15:26.560 certainly when you're talking about this incredible story. Deep Dive 0:15:27.000 --> 0:15:29.840 highly recommend people check it out online or on the 0:15:29.880 --> 0:15:31.840 Bloomberg or pick up the magazine later on this week. 0:15:31.920 --> 0:15:34.400 David woman. Thank you so much. Rider joining us via 0:15:34.560 --> 0:15:36.960 zoom from Hawaiian. Of course, our thanks to the editor 0:15:36.960 --> 0:15:39.560 of Bloomberg Business Week, Joel Webber. As we said, that 0:15:39.640 --> 0:15:42.920 new issue out later on this week. This is Bloomberg Radio. 0:15:43.760 --> 0:15:47.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:15:47.320 --> 0:15:49.920 live week days from two to five pm Eastern on 0:15:50.120 --> 0:15:53.560 Bloomberg Radio, the Bloomberg Business app band you two. You 0:15:53.680 --> 0:15:56.600 can also listen live to our flagship New York station 0:15:57.040 --> 0:16:01.640 Just Say Alexa play Bloomberg e Love and Dirty. So 0:16:01.800 --> 0:16:03.840 much has come out of US lawmakers. You've got the 0:16:03.880 --> 0:16:07.040 infrastr Structure Investment in Jobs Act that's more than half 0:16:07.040 --> 0:16:09.400 a trillion dollars in spending, the Chips in Science Act 0:16:09.440 --> 0:16:12.320 that's almost three hundred billion, The Inflation Reduction Act that 0:16:12.440 --> 0:16:16.520 again is another half trillion for healthcare, climate energy. We know, Maddie, 0:16:16.560 --> 0:16:19.960 the US government has put forth some major, major spending initiatives. 0:16:20.240 --> 0:16:22.640 So with that in mind, we wanted to talk to 0:16:22.680 --> 0:16:26.080 our next guest about what he is seeing, specifically delighted 0:16:26.120 --> 0:16:28.360 to have with us. Bob Pragata. He is CEO at 0:16:28.400 --> 0:16:30.640 the nearly fifteen and a half billion dollar market cap 0:16:30.680 --> 0:16:35.360 company Jacob solutions. They do engineering, construction services, specialty consulting, 0:16:35.520 --> 0:16:39.640 and clients really across industries and across the world. They're 0:16:39.640 --> 0:16:41.600 based in Dallas, but he is here in our Bloomberg 0:16:42.000 --> 0:16:44.440 Interactive Broker's studio. Bob, good to have you here with 0:16:44.560 --> 0:16:47.320 Maddie and myself. First up, Always good to talk with 0:16:47.440 --> 0:16:50.320 someone like yourself because you see so much. How would 0:16:50.360 --> 0:16:54.440 you describe the economic and business environment right now? I 0:16:54.480 --> 0:16:58.280 would say that it's what we're seeing. You talked about 0:16:58.280 --> 0:17:01.920 the legislative kind of undercurrent right now really to stimulate 0:17:01.960 --> 0:17:05.320 the economy. We're seeing it robust. It's a generational kind 0:17:05.320 --> 0:17:09.600 of opportunity for companies like ours to take advantage of 0:17:10.000 --> 0:17:14.159 long history and success within the infrastructure world, the advanced 0:17:14.200 --> 0:17:18.200 facilities specifically semiconductor and life sciences, as well as all 0:17:18.280 --> 0:17:22.560 that's going in the whole energy transition environment today. So 0:17:22.760 --> 0:17:26.320 this is in my career, Caroline, I've never seen anything 0:17:26.440 --> 0:17:29.560 of this magnitude. Really, how do you decide what to 0:17:29.680 --> 0:17:32.720 do in that situation when you do have that much opportunity? 0:17:32.840 --> 0:17:35.680 What's your thinking behind like capital allocation and things like that, 0:17:36.720 --> 0:17:42.080 First and foremost a balanced capital allocation program, But really 0:17:42.119 --> 0:17:44.760 this is an opportunity for us to grow organically. You know, 0:17:44.880 --> 0:17:48.320 we made some big transformational moves within our portfolio and 0:17:48.359 --> 0:17:50.879 the end markets that we serve, the services that we're 0:17:50.880 --> 0:17:53.760 going to concentrate in on some digital platforms that we've 0:17:53.800 --> 0:17:57.040 invested in, and so we're feeling really strong strongly that 0:17:57.720 --> 0:17:59.440 this is the time for us to take advantage of 0:17:59.480 --> 0:18:02.000 some of these tailwinds that were that we're seeing, and 0:18:02.160 --> 0:18:05.760 so it's exciting times. It does sound exciting, So talk 0:18:05.760 --> 0:18:07.359 to us about tailwinds because one of the things I 0:18:07.520 --> 0:18:09.000 love to do, and this is why I also love 0:18:09.040 --> 0:18:11.240 to play. I know we focus on public markets, but 0:18:11.280 --> 0:18:13.560 I love private markets. Get an idea of the trends 0:18:14.119 --> 0:18:17.080 that are really taking hold as a result of whether 0:18:17.119 --> 0:18:19.919 it's the government money or private money. What trends are 0:18:19.960 --> 0:18:22.879 you guys working with or working on or involved in 0:18:23.040 --> 0:18:25.480 that you say, Okay, this is the future or these 0:18:25.520 --> 0:18:26.960 are the things we're going to all be talking about 0:18:26.960 --> 0:18:30.640 a lot in the future. First and foremost, climate change 0:18:31.040 --> 0:18:35.320 and what we describe as climate response. Obviously in a 0:18:35.440 --> 0:18:38.640 lot of press on this, it is the global disruptor 0:18:38.720 --> 0:18:40.760 of all global disruptors and the way that that then 0:18:40.840 --> 0:18:47.199 transcends down into the transportation world, the water world, everything 0:18:47.240 --> 0:18:50.920 about the environment, energy transition, and just how it affects 0:18:51.280 --> 0:18:55.800 all of our lives globally. Is the number one second 0:18:55.960 --> 0:18:59.000 that we've really been focused in on is digital enablement. 0:18:59.359 --> 0:19:02.040 So we don't want to turn into a technology company 0:19:02.520 --> 0:19:04.960 or a tech company. We're going to stay core to 0:19:05.119 --> 0:19:09.479 our intellectual horsepower and our science based consulting. But digital 0:19:09.640 --> 0:19:13.359 enablement is now turning our whole world upside down, is 0:19:13.400 --> 0:19:16.320 really enhancing the solutions that we can provide today. Favor 0:19:16.480 --> 0:19:20.520 before you go further digitally, what does that mean though specifically? 0:19:20.520 --> 0:19:22.000 Because I feel like we've been living in a digital 0:19:22.040 --> 0:19:24.080 world for some time and I know it can explode 0:19:24.280 --> 0:19:27.880 in a lot more ways. So what does it mean specifically? 0:19:27.920 --> 0:19:29.919 If you could, why don't it be specific? And then 0:19:29.960 --> 0:19:33.960 I'll give an example. Yeah, so right now in the 0:19:34.040 --> 0:19:37.600 broadest sense, is the use of software platforms combined with 0:19:37.760 --> 0:19:42.640 our intellectual horsepower in our services in order to facilitate 0:19:42.760 --> 0:19:46.920 and enable a more productive or efficient solution. Before all 0:19:47.000 --> 0:19:49.720 of that would be done, Yeah, with just us and 0:19:50.520 --> 0:19:53.000 what we knew about the domain knowledge we had around 0:19:53.359 --> 0:19:57.239 different facilities or infrastructure, etc. Today, with software we can 0:19:57.640 --> 0:20:02.680 expedite that that no how and use those algorithms even 0:20:02.760 --> 0:20:05.680 enhance the solution. And here's an example. We've been in 0:20:05.760 --> 0:20:09.919 the operations in maintenance world for water facilities, water treatment, 0:20:10.000 --> 0:20:14.879 wastewater treatment forever. These facilities generate a ton of data. 0:20:17.119 --> 0:20:20.280 Conventional means would we'd take that data and then in 0:20:20.359 --> 0:20:24.200 the field we would make decisions on treatment methodologies, what 0:20:24.359 --> 0:20:27.720 to do with some of the energy byproducts, etc. We're 0:20:27.760 --> 0:20:30.879 in partnership today with a company called Palenteer, and with 0:20:31.040 --> 0:20:35.240 Palentier as well as our own unique and proprietary algorithms 0:20:35.320 --> 0:20:40.720 that we've developed, we're enhancing worker productivity by fifty percent 0:20:41.359 --> 0:20:44.440 on having the data right in front of you that's 0:20:44.440 --> 0:20:48.600 already analyzed and ready to go, and our people in 0:20:48.640 --> 0:20:51.000 the field are able to capitalize on that. So's it 0:20:51.200 --> 0:20:54.520 expedites things, makes it smarter, quicker, all that good stuff 0:20:55.280 --> 0:21:02.080 and smarter on the smarter front, less efficiencies or defects. Okay, 0:21:02.640 --> 0:21:05.399 is there anything within all of the government spending that 0:21:05.480 --> 0:21:07.920 we mentioned at the top that's helping you achieve some 0:21:08.040 --> 0:21:10.840 of the goals that you've talked about specifically? And what 0:21:10.880 --> 0:21:13.040 would you say is maybe the single biggest thing that 0:21:13.200 --> 0:21:17.000 something like the IRA has enabled you to do. Specifically, 0:21:17.040 --> 0:21:20.359 on the IRA, I would say what it still probably 0:21:20.400 --> 0:21:23.879 three to four months out from being out. Public's what 0:21:24.200 --> 0:21:26.960 the effect that it's having in our environmental as well 0:21:27.000 --> 0:21:30.680 as potentially in the energy transition components. So those programs, 0:21:31.160 --> 0:21:34.159 whether it be grid modernization or everything that's doing to 0:21:34.640 --> 0:21:39.240 electrify the world, even to include the electric vehicle ecosystem, 0:21:39.760 --> 0:21:42.640 that's having a big effect on our business, even prior 0:21:42.720 --> 0:21:46.280 to the real funds fluent. The other one's a Chips ACT. Yeah, yeah, 0:21:46.480 --> 0:21:48.920 which is which is a big one, and the Chips 0:21:48.960 --> 0:21:52.600 ACT is in real time. But what companies, specifically large 0:21:52.720 --> 0:21:55.840 US companies have done is they've already announced and have 0:21:56.080 --> 0:21:59.800 started the design of these facilities. We've been involved with 0:21:59.840 --> 0:22:01.960 that from from the beginning. So the Chips ACT is 0:22:02.000 --> 0:22:05.240 going to do nothing but continue to facilitate that growth. 0:22:05.280 --> 0:22:08.080 So you're talking about the actual factories, the buildings and 0:22:08.160 --> 0:22:11.400 all that and manufacture the chips. Okay, how far along 0:22:11.480 --> 0:22:13.200 are we on the impact of both of those? I 0:22:13.280 --> 0:22:15.639 know you mentioned I already taking a couple more months. 0:22:16.520 --> 0:22:18.199 Like if we're in a football game, what quarter are 0:22:18.240 --> 0:22:21.320