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Speaker 4: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast.
Speaker 4: Happy New Year. It's our first week of twenty twenty five,
Speaker 4: and as we enter the new year, we wanted to
Speaker 4: take a look into some of the key developments that
Speaker 4: could shape the next half decade, from US policy under
Speaker 4: a second Trump term, aised insatiable demand for electricity harming
Speaker 4: the climate, to the decades long battle to control what
Speaker 4: has emerged as the world's most critical resource, semiconductors.
Speaker 5: So ahead on the program, we'll examine the year ahead,
Speaker 5: touching on Bloomberg Business Week's annual fifty Companies to watch,
Speaker 5: the next stage of aiuse and adoption, and he taught
Speaker 5: Feuds That'll define twenty twenty five.
Speaker 4: Accept everybody, because they're going to come at you. Plus,
Speaker 4: our Bloomberg Pursuits team has the ultimate travel guide for
Speaker 4: the next twelve months with help from the folks over
Speaker 4: at Kayak who gathered billions, yes billions, of data points
Speaker 4: to give you personalized, month by month estimates for the
Speaker 4: destinations of your choice.
Speaker 5: All that to come, we begin, though, with the Bloomberg
Speaker 5: Business Week Year Ahead issue for twenty twenty five. Each year,
Speaker 5: the Bloomberg Business Week team provides a comprehensive outlook on
Speaker 5: the most important economic, business, technological, and geopolitical trends expected
Speaker 5: to shape the coming year.
Speaker 4: According to Mariam Webster you know the Dictionary, twenty twenty
Speaker 4: four was the year of polarization. Political divisions affected not
Speaker 4: only the state of affairs within the United States, but
Speaker 4: safe to say, also around the world. However, it's optimism
Speaker 4: that Bloomberg Business Week editor Bradstone wanted to focus on.
Speaker 5: In the opening remarks of the Year Ahead issue, Brad
Speaker 5: gives us the optimist guide to a chaotic world. We
Speaker 5: ask Brad why he chose to be hopeful for twenty
Speaker 5: twenty five.
Speaker 6: It was a little.
Speaker 7: Tricky because, you know, we had just subjected our readers
Speaker 7: to months and months of our political coverage, including our
Speaker 7: December issue, which was we produced the week after the
Speaker 7: result in the US election, with a full complement the
Speaker 7: stories about what the Trump victory meant. And so as
Speaker 7: we looked ahead in our annual year head package, really
Speaker 7: I wanted to stretch our arms a little bit to
Speaker 7: get beyond the politics story.
Speaker 8: You know.
Speaker 7: So we've got this collection of stories about, for example,
Speaker 7: an interview with the Property Brothers, these great the influencer
Speaker 7: real estate influencers, this massive infrastructure project to keep Karp
Speaker 7: out of the Great Lakes, you know, just all these stories.
Speaker 7: There's another good one from Tom Orleck, our chief economists,
Speaker 7: on you know what the Trump agenda means for the
Speaker 7: global economy and how it might not necessarily mean lower growth.
Speaker 6: So anyways, you know, taking a little bit of a
Speaker 6: different approach than we had in the past.
Speaker 7: And then you know which, and this informed my opening
Speaker 7: remarks trying to maybe be a little bit more optimistic.
Speaker 7: I mean, if the new year isn't a time for optimism,
Speaker 7: than what is?
Speaker 4: I love that.
Speaker 5: Well, okay, so once you thought all this through for
Speaker 5: the year ahead issue, you do give us this optimist
Speaker 5: guide to a chaotic world. And you spoke to Harvard
Speaker 5: psychologist Stephen Pinker, who kind of says, like this is
Speaker 5: all our fault. As journalists and writers of headlines.
Speaker 6: Well, no, I mean, am I.
Speaker 5: Am I projecting here? Am I projecting here?
Speaker 7: He acknowledges that, you know, the job of the news
Speaker 7: is to cover things that are happening, and things that
Speaker 7: are happening that deviate from the norm, you know, can
Speaker 7: be negative things.
Speaker 6: But the point was that the norm is pretty good, you.
Speaker 7: Know, and that there's no greater time to be alive.
Speaker 7: And you look at numbers like vaccines reducing mortality by
Speaker 7: forty percent over the past half century, or Africa infectious
Speaker 7: disease deaths decreasing forty two percent since twenty fifteen, you know,
Speaker 7: even good news in terms of carbon emissions lowering.
Speaker 6: That these are things that we should pay attention to.
Speaker 7: And so that you know, that was sort of the
Speaker 7: framework that you know, however one feels about political changes
Speaker 7: in the US or in Western Europe, that you know,
Speaker 7: there's a backdrop that is actually pretty pretty rosy.
Speaker 4: Yeah, you know what's kind of interesting. I have to say,
Speaker 4: reading through your column, I thought about sometimes I get
Speaker 4: into a cab, typically in New York City, and it
Speaker 4: often is somebody from that wasn't born here, and we
Speaker 4: started having a conversation, they're like, you have no idea
Speaker 4: how great this country is. And like we'll talk about
Speaker 4: division or something and they're like, you have no idea
Speaker 4: how great it is.
Speaker 5: Why you're uberrating is one star? No, I'm just kidding.
Speaker 4: I'm just saying, but I do think that's what you
Speaker 4: get to And you know, when you when we cut,
Speaker 4: it's so easy for us to be in it day
Speaker 4: to day. And sometimes Tim and I go through a
Speaker 4: show Man and we're like, wow, that was dark. But
Speaker 4: if you broadened out right the lens, like you right,
Speaker 4: we have made some really great advancements on a lot
Speaker 4: of different front spread.
Speaker 7: And by the way, you know, I didn't want to
Speaker 7: be completely a political I mean it is a time
Speaker 7: to be optimistic about a new presidential administration. I think
Speaker 7: we should get give every incoming president the benefit of
Speaker 7: the doubt.
Speaker 6: And so you know, when it comes to you know.
Speaker 7: Regulating nuclear energy, you know, a technology that has historically
Speaker 7: made a lot of people squeamish.
Speaker 6: You know, that's that's perhaps something to look forward to.
Speaker 9: You know.
Speaker 5: Robert I. F.
Speaker 7: Kennedy Junior gets a lot of attention for his unorthodox show.
Speaker 7: We say view on vaccines or fluoride in the drinking water.
Speaker 7: But you know, rethinking public health guidelines, looking again at
Speaker 7: ultra processed foods in the in the food chain. You know,
Speaker 7: I was in the mood to see the silver lining,
Speaker 7: let's say, and I think it's a good time to
Speaker 7: do that.
Speaker 5: We'll talk a little bit about this sort of the
Speaker 5: Silicon Valley angle here with Elon Musk and the Department
Speaker 5: of Government Efficiency and what that could actually do well.
Speaker 7: I mean, look, let's you know, at this point, take
Speaker 7: them at their word that they're trying to get make
Speaker 7: government more efficient, boost business activity, roll back the regulations
Speaker 7: that have made it difficult to build infrastructure, say, roll
Speaker 7: out high speed trains. You know, there there isn't any
Speaker 7: reason to be complacent about the status quo in the
Speaker 7: United States when we look at how quickly other countries
Speaker 7: are able to do big things, and so you know
Speaker 7: we should be you know, give give Elon the benefit
Speaker 7: of the doubt. I mean, he's behaved a little bit
Speaker 7: like a blunt force instrument. But you know, I I
Speaker 7: was listening to Mark Andriesen on a on a podcast recently,
Speaker 7: and there has been a lot of frustration in Silicon
Speaker 7: Valley about their ability.
Speaker 6: To develop new technologies.
Speaker 7: And so look there there, their candidate was elected, and
Speaker 7: you know, we're going to see if if they can
Speaker 7: make a difference.
Speaker 4: I just want to know, though, did you originally when
Speaker 4: you started thinking about it, and you're like, I'm going
Speaker 4: to ride a column that you know, there's a lot
Speaker 4: of questions and it feels a little dark, And then
Speaker 4: do you're like, well, wait a minute, glasses half full,
Speaker 4: glasses half empty. I'm just curious if you did two
Speaker 4: versions of this, Brad.
Speaker 6: I gave myself.
Speaker 7: I gave myself the challenge of writing a story with
Speaker 7: the headline, you know, the search for optimism or a
Speaker 7: guide to optimism. I just felt and I don't know
Speaker 7: where the notion came from. You know, you guys know
Speaker 7: I'm here in the Bay Area, so excuse me. So
Speaker 7: you know, there there is the there was a lot
Speaker 7: of hiding under the dining room table in my community,
Speaker 7: and so I wanted to look at things from a
Speaker 7: little bit of a different perspective.
Speaker 4: Yeah, I love it.
Speaker 5: I want to hear a little bit about your thoughts
Speaker 5: on the tech firms kind of making the pilgrimage tomorrow lago,
Speaker 5: just in recent weeks. We had Jeff Bezos down there
Speaker 5: earlier this week. There's probably nobody who knows more about
Speaker 5: Jeff Bezos than you. How would you describe a meeting
Speaker 5: like that with President Trump? And sort of the context
Speaker 5: around that President like Trump opportunistic.
Speaker 7: I mean, look, there's no mystery around how to work
Speaker 7: with the federal government when Donald Trump is president.
Speaker 6: Then you know, you go and you kiss.
Speaker 7: The ring, so to speak, and he responds to that,
Speaker 7: and so we're seeing one CEO after the other go
Speaker 7: do that now. In Jeffs case, it was interesting because
Speaker 7: Elon Musk shows up at his table, maybe to his
Speaker 7: no doubt considerable surprise. But you know, Jeff has a
Speaker 7: lot writing on this administration. He's got his company, Blue Origin,
Speaker 7: has the new Glen orbital rocket sitting on the launch
Speaker 7: pad at Cape Canaveral waiting, waiting to be approved, and
Speaker 7: so you know he he needs a partnership with this
Speaker 7: federal government and probably not the kind of acrimony that
Speaker 7: existed between him and Trump during Trump's first term. And
Speaker 7: look and shoot Chew, the CEO of TikTok also going
Speaker 7: down there as he faces a deadline for Byte Dance,
Speaker 7: the Chinese company, the cell TikTok.
Speaker 6: All these leaders know that the path to getting what
Speaker 6: they want is.
Speaker 7: A little bit of sycofancye, and so that is why
Speaker 7: they are in Margot bar Lago.
Speaker 4: Well, great stuff as always, Happy New Year, Happy holidays, Brad.
Speaker 4: Always good to check in with you, looking forward to
Speaker 4: the new issue. Bradstone, Editor of Bloomberg BusinessWeek, author of
Speaker 4: many books, including Amazon Unbound. You are listening to Bloomberg Radio.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
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Speaker 2: or watch us Live on YouTube.
Speaker 4: When we think about the year ahead, one storyline worth
Speaker 4: paying attention to the escalating trade war between the United
Speaker 4: States and China over the future of advanced semiconductor manufacturing.
Speaker 5: Virtually everything from missiles to microwaves runs on chips, including cars, smartphones,
Speaker 5: the stock market, even the electric grid. In twenty twenty four,
Speaker 5: the Biden administration limited further advancements of China's semiconductor industry
Speaker 5: by blocking several companies from receiving exports of certain chip
Speaker 5: technology from China. Beijing responded by banning exports of critical
Speaker 5: minerals to the US.
Speaker 4: Feels a bit frosty, to say the least. This tit
Speaker 4: for tap between the two global superpowers is set to
Speaker 4: grow even further in twenty twenty five, at least that's
Speaker 4: the expectations this as President elect Donald Trump has promised
Speaker 4: tariffs on Chinese goods. All of this while companies around
Speaker 4: the world try to adjust their supply chains. Needless to say,
Speaker 4: the stakes are high.
Speaker 5: Someone who knows the semiconductor space well as Chris Miller.
Speaker 5: He's Associate Professor of International history at Tufts University, and
Speaker 5: he's the author of the book on chips, the New
Speaker 5: York Times bestseller Chip War, The Fight for the World's
Speaker 5: Most Critical Technology. He ties it to today's US China rivalry.
Speaker 9: There are two big shifts happening simultaneously right now. One
Speaker 9: is the served of spending on AI infrastructure, which means
Speaker 9: lots of very expensive AI accelerators in high powered data
Speaker 9: sens And two is the ratcheting up of tension around
Speaker 9: the US and China, with the new administration in the
Speaker 9: US planning to increase tariffs and controls on China's semiconductor industry.
Speaker 9: So those two trends are intersecting in ways that impact
Speaker 9: pretty much every company in the sector.
Speaker 4: Where are we going to see that kind of line
Speaker 4: in the sand when it comes to selling technology to China?
Speaker 4: And then the big tech company is saying, but wait
Speaker 4: a minute, this starts to impact our business because China
Speaker 4: is a massive market.
Speaker 9: I think we talked to any CEO or executive off
Speaker 9: the record, and they'll say that my biggest problem is
Speaker 9: that China is both my largest customer and my number
Speaker 9: one competitor in most cases, and that, I think structures
Speaker 9: how the industry deals with this issue and tries to
Speaker 9: lobby the US government. They all sort of understand the
Speaker 9: logic of the US government, understand that chips are key
Speaker 9: for AI, understand that AI is key to national security
Speaker 9: as well as economic prosperity. But they all also realize
Speaker 9: that they have really substantial markets in China. And so
Speaker 9: wherever you look the supply chain of the makers of
Speaker 9: the tools that make chips, the manufacturers of chips themselves,
Speaker 9: they're all going to lobby, and they all have lobbied
Speaker 9: very successfully to keep their ability to sell to China open,
Speaker 9: and the national security apparatus, the Pentagon, the Commerce Department,
Speaker 9: the intelligence agencies are pushing for more restrictions than companies
Speaker 9: themselves want, and that a balancing act that any president
Speaker 9: of got a balance. I think we've seen the Biden
Speaker 9: administration end up with a more lapse approach than one
Speaker 9: might have expected given their early tough rhetoric on this issue,
Speaker 9: and it'll be interesting to watch how the Trump administration
Speaker 9: addresses this balance. There will certainly be voices of administration saying,
Speaker 9: let's focus on continue to export to China of technology.
Speaker 9: It's important economically, But there will also be voices on
Speaker 9: the opposite side saying, if you export advanced technology to China,
Speaker 9: you're only giving China the capability to learn how to
Speaker 9: manufacture high end ships domestically and eventually replace US firms
Speaker 9: in the Chinese market.
Speaker 4: Chris, with your understanding and knowledge of this world, are
Speaker 4: we right, us, the United States, right to be concerned
Speaker 4: about exporting technology to China. We've certainly seen this play
Speaker 4: out where things get exported the technology and China becomes
Speaker 4: really good at doing things. We're seeing it kind of
Speaker 4: play out in the EV market as we speak. So
Speaker 4: I'm curious how concerned should we that we will export
Speaker 4: our expertise, our knowledge and lose control of another industry.
Speaker 3: You know.
Speaker 9: I think it's worth noting that China only imports a
Speaker 9: couple of types of manufactured goods semiconductors semiconductor manufacturing equipment.
Speaker 9: Those are the two largest categories of China's manufactured good imports,
Speaker 9: because China can produce everything else that needs domestically when
Speaker 9: it comes to manufactured goods, and I think that speaks
Speaker 9: to China's capabilities in this sphere, which means that the
Speaker 9: more capabilities you give to China, the more you're be
Speaker 9: able to use those to replace Western firms. And they're
Speaker 9: desire to replace Western firms, and I think eminently well documented.
Speaker 9: It's evidence in the fact that they don't buy anything
Speaker 9: abroad unless they absolutely have to. And I think sem
Speaker 9: conductor companies are all worried that their market share is
Speaker 9: going to decline over time, and I think they all
Speaker 9: realize that the more chip making tools that are hould
Speaker 9: the China accelerates that process.
Speaker 5: Just remind everybody sort of in the chip ecosystem and
Speaker 5: the world of chip ecosystems, where broadcomplays.
Speaker 9: Broad comes one of the biggest designers of semiconductors. They
Speaker 9: don't manufacture, but they do the design process, and they've
Speaker 9: been focusing in particular on designing AI chips for other companies,
Speaker 9: some of the big hyperscalers that are investing in their
Speaker 9: own ship designs. Those are often done in partnership today
Speaker 9: with Broadcom.
Speaker 5: So looking across the ecosystem, who does Broadcom have to
Speaker 5: be most worried about? Because we got that report from
Speaker 5: the information about Apple working with Broadcom. These two companies
Speaker 5: have sort of done this dance of scorpions where they
Speaker 5: sting each other. But also then well he was saying,
Speaker 5: it was like, what mating scorpions? Is that right?
Speaker 4: Yes? Or two scorpions mating?
Speaker 5: Yeah, we're there.
Speaker 4: You know, it's not easy. I wants a little complicated.
Speaker 5: I won't describe it, but let's just use the term
Speaker 5: frenemies instead.
Speaker 4: Perfect.
Speaker 9: You know, I think that's that's a great analo. Broad
Speaker 9: companies is a really wide range of products, and so
Speaker 9: they simultaneously cooperate and compete with a bunch of different
Speaker 9: companies in the technology space. I think if you focus
Speaker 9: on the AI portion of their portfolio, in some ways
Speaker 9: they're competing with in Nvidia because a lot of the
Speaker 9: in house design processors that the Hyperscalers are designing right
Speaker 9: now are intended to be replacements for invidious products, at
Speaker 9: least to a certain degree. And so I think investors
Speaker 9: going to look at this result and ask, what does
Speaker 9: this mean for the process of bringing more chip design
Speaker 9: in house at some of the big hyperscalers.
Speaker 5: Hey, Chris, can I have to leave it there? I
Speaker 5: always love it when you take the time to join us.
Speaker 5: Do appreciate that very much. Chris Miller Associate Professor of
Speaker 5: International History at Tufts University. He's the author of the
Speaker 5: New York Times best selling book Chip War, The Fight
Speaker 5: for the World's most Critical Technology.
Speaker 2: This is the Bloomberg Business Week podcast, live each weekday
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Speaker 2: Just Say Alexa played Bloomberg eleven thirty.
Speaker 8: Well.
Speaker 4: The US, in case you hadn't noticed, is experiencing a
Speaker 4: surge and power demand, with electricity consumption expected to climb
Speaker 4: almost sixteen percent over the next five years.
Speaker 10: Why you may.
Speaker 5: Ask a few factors. Is it because we're all getting
Speaker 5: EV's I don't think so. I could have seen to
Speaker 5: do with it. A few factors and drivers of that demand,
Speaker 5: including data centers, evs AI. Welcome everybody to the New
Speaker 5: economy with more on what maybe the next supply demanded balance.
Speaker 5: Are two killer members of our Bloomberg News team who
Speaker 5: reported out this story. They are Bloomberg News Power and
Speaker 5: Renewable Energy editor Will Wade, also with Bloomberg News Energy
Speaker 5: and Climate Disasters reporter Josh Saul, both here in our
Speaker 5: Bloomberg BusinessWeek studio. Will I want to start with you
Speaker 5: and get an idea for consumption and where it exactly
Speaker 5: is coming from. Is it all AI or the push
Speaker 5: to move away from natural gas or heating and cooling?
Speaker 5: Is that part of it? You know where's coming from?
Speaker 11: It's all of it, and it's all happening all of
Speaker 11: a sudden. So we've seen cloud computing. You know, everyone
Speaker 11: wants to put all your photos and your files up
Speaker 11: in the cloud. That's driving data centers, a lot of
Speaker 11: data centers, and then all of a sudden, the same
Speaker 11: big tech companies are starting to do AI, and that's
Speaker 11: an enormous use of power. So we've got data centers,
Speaker 11: and then AI data centers, and then we've got the
Speaker 11: push to electrify everything. We want to use electric heating
Speaker 11: in your house instead of gas, we want to use
Speaker 11: electricity for your cars instead of gasoline. Where you've got
Speaker 11: factories that are trying to use electricity for industrial heat
Speaker 11: instead of gas or coal.
Speaker 4: So it's just.
Speaker 11: Coming from every direction. But the crazy thing is we
Speaker 11: didn't really see this coming until about year ago. So
Speaker 11: the utilities that build power plants, which takes years, weren't
Speaker 11: really planning for it that effectively. So now there's a
Speaker 11: potential looming shortage of electricity.
Speaker 4: Which makes me wonder should we just stop talking about
Speaker 4: the promise of AI and basically because we're not going
Speaker 4: to have enough power to meet the demand, Like, should
Speaker 4: we just stop it already because the expectations, the euphoria
Speaker 4: will is not going to be able to be met
Speaker 4: so easily or quickly, you know what the power demands.
Speaker 11: I'm not so worried about running out of power, like
Speaker 11: you turn on the light switch and there's no electricity
Speaker 11: for the lights. What I'm worried about is people not
Speaker 11: working for clean energy. So We're going to see electricity
Speaker 11: from anywhere.
Speaker 5: They can get it.
Speaker 11: We got people building more gas plants than we've seen
Speaker 11: in a long time. We got people that promise to
Speaker 11: shut down coal plants. Now they're going, let's keep those
Speaker 11: open a little longer. Yeah, Joshua, about the gas plants
Speaker 11: a lot, we'll tell.
Speaker 12: Us about that, right. So, there's a concept I wanted
Speaker 12: to bring up because I want to get I want
Speaker 12: to get listeners from with it.
Speaker 5: And it's baseload power.
Speaker 12: So the deal with wind and solar power is that
Speaker 12: it's intermittent, right, It's when when the wind is blowing,
Speaker 12: when the sun is up. And it's very complicated to
Speaker 12: arrange a grid with a lot of clean energy sources
Speaker 12: because you have to balance the grid at all times.
Speaker 12: And when people wake up in the morning, they need
Speaker 12: the electricity running so they can run their appliances and
Speaker 12: get ready for their day. And sometimes if the sun
Speaker 12: isn't up at that point, that makes it tougher. What
Speaker 12: gas is really good at a big gas power plant
Speaker 12: is that it's baseload power just produces pretty close to
Speaker 12: the same amount of power all the time. Gas also
Speaker 12: produces carbon, which makes it a climate issue, which is
Speaker 12: what Will's talking about. But we had the CEO of
Speaker 12: g Vernova in recently and he basically says, yeah, our
Speaker 12: windsails are pretty flat, but our gas business is going
Speaker 12: bananas because they build the big gas turbines that that
Speaker 12: power plants use to generate generate the power, and they've
Speaker 12: increased manufacturing and they're selling huge amounts of these gas
Speaker 12: turbines because that's what data centers. He told us. Yeah,
Speaker 12: nobody's planning for anything other than twenty four to seven
Speaker 12: power usage.
Speaker 5: Is there a way that we can offload and by we,
Speaker 5: I mean the United States can offload some of this
Speaker 5: electricity usage, Josh outside of the country where electricity is
Speaker 5: more abundant in the sense, build some of these server
Speaker 5: farms in other places where there isn't an issue on
Speaker 5: the grid.
Speaker 12: It's it's complicated and it's hard to do. I mean
Speaker 12: with with data centers. It's hard because some things that
Speaker 12: are operating on the data center is certainly any anything
Speaker 12: related to national security, and even lots of companies they
Speaker 12: want their they want their data in the US, even
Speaker 12: in you know, you imagine the.
Speaker 4: Near shoring on shoring is like certainly something that you
Speaker 4: see with the data centers, they want it nearby.
Speaker 12: Yeah, I mean imagine a healthcare company. They don't want
Speaker 12: all their data stored in some country that they don't
Speaker 12: necessarily trust, so you run into issues with that. And
Speaker 12: as far as moving other users of power, can't really
Speaker 12: move homes overseas without moving the family there. Obviously, that's complicated.
Speaker 12: And then a big factor. You know, we want the
Speaker 12: big factory here because we want the jobs and we
Speaker 12: want the stuff produced here, so those power demands are
Speaker 12: also on shore.
Speaker 4: There's so many things that are coming to mind. Remind
Speaker 4: us guys about the rules and regulations that are in
Speaker 4: place in terms of carbon emissions, that the kind of
Speaker 4: commitments that companies and individuals or institutions have to abide
Speaker 4: by under the current administration or under the current rules,
Speaker 4: and how a new administration might change some of that.
Speaker 11: Okay, Well, when Biden came into office, he said he
Speaker 11: wanted to have a clean power grid by twenty thirty five,
Speaker 11: and they set a twenty fifty net zero target. But
Speaker 11: these aren't really binding.
Speaker 3: These were goals, and.
Speaker 11: I'm seeing increasing pessimism about reaching those goals, and.
Speaker 5: They don't even seem very close in the sense of
Speaker 5: years like those are pretty far.
Speaker 11: Up anyway, right, Yeah, but yeah, And we had so
Speaker 11: many companies, especially in like maybe the last five five years,
Speaker 11: come out with their own internal net zero goals, and
Speaker 11: a lot of them are like really impressive and really ambitious.
Speaker 11: We're going to you know, utilities that promise to stop
Speaker 11: burning coal, big tech companies that said all of our
Speaker 11: operations are going to be carbon free.
Speaker 5: Yeah that was before chat GPT.
Speaker 11: That's the problem. So these things were not binding, and
Speaker 11: now we're seeing a lot of companies kind of going
Speaker 11: radio silence on their goals, or some of them are
Speaker 11: just straight out saying, yeah, we're not going to make that.
Speaker 4: Doesn't matter if it's a global company in other words,
Speaker 4: because it's got a deal by global rules and global
Speaker 4: regulations or no, not necessarily in terms of hitting carbon emissions,
Speaker 4: you know, reductions.
Speaker 12: The utilities, so the power companies actually producing their power,
Speaker 12: they're here, so their goals are here. We're already seeing
Speaker 12: those get kind of a little eroded around the edges,
Speaker 12: you know, companies saying well, we said we're going to
Speaker 12: be done with coal by twenty thirty, we're actually going
Speaker 12: to be running these coal plants a little longer, but
Speaker 12: we're still sticking to our twenty fifty net zero goal.
Speaker 12: We're kind of seeing those eroded a little bit. But
Speaker 12: the way one energy analyst put it to me recently,
Speaker 12: as he said, I mean, unless unless the company's goals
Speaker 12: are tied some kind of state law, they're not really
Speaker 12: worth the paper they're written on, because they'll just keep
Speaker 12: getting eroded, and then as it gets closer to twenty fifty,
Speaker 12: they'll get you know, maybe maybe completely tossed out the window.
Speaker 5: Hey will what about nuclear? Where does nuclear come into this?
Speaker 4: Which is something like I feel like in the last
Speaker 4: two years, we all of a sudden here everybody talking
Speaker 4: about nuclear.
Speaker 5: Yeah, but I mean you've spent a lot of times
Speaker 5: short career facilities not so easy to just put a
Speaker 5: whole put a shovel in the ground and build one.
Speaker 12: No, nuclear is great.
Speaker 11: I mean, Josh was talking about baseload power. You know,
Speaker 11: it's even better for baseload nuclear it runs like ninety seven,
Speaker 11: ninety eight, ninety nine percent of the time over the
Speaker 11: course of a year. You know, it's not great about
Speaker 11: nuclear takes years to build. So we've got all of
Speaker 11: these companies seriously like the last couple of months, a
Speaker 11: lot of the big temp, big tech companies have announced
Speaker 11: these really big deals to use nuclear power to power
Speaker 11: their data centers in twenty thirty something when they're built,
Speaker 11: because there aren't any extra nuclear power plants laying around,
Speaker 11: and it's going to take years to build them, and
Speaker 11: they're working with companies that are developing new technologies, so
Speaker 11: they hope they'll be ready in the next five years,
Speaker 11: but it's you know, there's always the chance they can
Speaker 11: get delayed, so in the meantime, there's gonna be a
Speaker 11: lot of gas.
Speaker 4: It's kind of ironic, right, The move to clean energy
Speaker 4: is kind of complicating this process, right in terms of wanting,
Speaker 4: as you said, the electrification of so much that it's
Speaker 4: making it difficult to kind of hit these targets. And
Speaker 4: I'm looking at, you know, a headline from today California
Speaker 4: reeling from extreme weathers, the wildfire risks return, and they
Speaker 4: also talk about another atmospheric river up in northern California.
Speaker 4: I mean, as we are talking about this, we continue
Speaker 4: to see it firsthand and increasingly the impact of climate change.
Speaker 4: So I just wonder kind of where this all leads us.
Speaker 11: Yeah, that's the right question, and the answer is, we
Speaker 11: don't know. We are seeing climate disasters in real time.
Speaker 11: In the summer, it's too hot now in the fall,
Speaker 11: in the winter, we're getting too much rain.
Speaker 4: Wildfires are like you're ering city, which are like unheard of,
Speaker 4: Like yeah, make for great sunsets, but it smells bad
Speaker 4: and it Yeah, we're seeing the climate really has been affected.
Speaker 11: And that's the right question to ask, because yeah, all
Speaker 11: these factories are trying to decarbonize, but then where do
Speaker 11: you get the electricity? You know, the people to point out, Oh,
Speaker 11: you think you're so green because you've got an EV,
Speaker 11: but you're powering it with coal power. So there's a
Speaker 11: lot that has to happen. It's not an easy switch.
Speaker 5: Well, Josh, this is your beat, I mean, your energy
Speaker 5: and climate disasters reporter. So what is the fundamental connection
Speaker 5: between these two things?
Speaker 6: I see it.
Speaker 12: I see it that of course, the factories that produce
Speaker 12: the things we need for clean energy require power, but
Speaker 12: anything that we produce requires power. So I think overall
Speaker 12: that transition is still good for decarbonization, is still good
Speaker 12: for putting less carbon into the atmosphere, and hopefully at
Speaker 12: least not accelerating those kinds of wildfires and those other
Speaker 12: things we're talking about, and I think that's more important.
Speaker 5: Okay, so we'll come on in here because you mentioned
Speaker 5: the grid, and this is something that we haven't spent
Speaker 5: a lot of time talking about the health of the grid,
Speaker 5: and it's sort of this patchwork at least here in
Speaker 5: the United States, where you know you have Texas always
Speaker 5: comes to mind, for example, given the freeze that they
Speaker 5: saw a few years ago in the failure of the grid.
Speaker 5: Where does the stability of the grid come into the conversation?
Speaker 11: That's another huge issue. A lot of the grid is
Speaker 11: not so stable. You know, a lot of the wires
Speaker 11: have been in standing there for years and when a
Speaker 11: hurricane comes through, they get knocked down. The utilities say
Speaker 11: they want to underground the wires because it's more reliable,
Speaker 11: which is a great idea, but expensive. You use the
Speaker 11: word patchwork. I think that's a pretty good word, especially
Speaker 11: because it's multiple systems operated by so many different companies
Speaker 11: and so many different jurisdictions with different rules. It's complicated.
Speaker 4: Well, we know it's like that, Josh. I also do
Speaker 4: wonder is there something else within the all the energy
Speaker 4: space or new energy space that we're not talking about.
Speaker 4: My husband constantly is like, what about hydrogen fuel cells?
Speaker 4: Like that makes sense to me. Like, I'm just curious,
Speaker 4: is there something that I don't know, whether it's in
Speaker 4: the next year, next six months, or next two years,
Speaker 4: that we start talking about that might help the situation.
Speaker 12: I think a lot of a lot of those things, fusion, hydrogen,
Speaker 12: a lot of those things are pretty far off. I
Speaker 12: think right now it kind of is just back to
Speaker 12: the basics that wind and solar takes a lot of
Speaker 12: takes some pressure off of the grid, and but yeah,
Speaker 12: right now, it just looks like the next year looks
Speaker 12: like just more gas.
Speaker 5: That was Bloomberg News Power and Renewable Energy editor Will Wade,
Speaker 5: along with Bloomberg News Energy and Climate Disasters reporter Josh Saw.
Speaker 4: You know, Tim, I think about right after two years
Speaker 4: of doing nothing about AI investing and focusing on Nvidia
Speaker 4: and everybody spending and so on and so forth and
Speaker 4: doing kind of their build out, all of a sudden,
Speaker 4: it's like breaks on because people are saying, wait a minute,
Speaker 4: we got to have the power to fuel all the
Speaker 4: AI computations that are necessary.
Speaker 5: I thought a lot about this when I was out
Speaker 5: for the holiday break, because I was on the central
Speaker 5: coast of California and Diablo Canyon Nuclear Power Plant is
Speaker 5: right on the central coast where I was, and we
Speaker 5: actually went to the beach right where the nuclear power
Speaker 5: plan is. I thought to myself, incredible to see the
Speaker 5: attention on this facility as a result of power demand.
Speaker 5: And this power plan on the central coast of California
Speaker 5: was set to be shut down right and Governor Gavin
Speaker 5: Newsom extended it as a result of power demand.
Speaker 4: Get ready, folks, for a lot more on this front
Speaker 4: to come. Twenty twenty five. Still ahead on Bloomberg Business Week.
Speaker 4: Our Bloomberg Intelligence team has done the research, the work,
Speaker 4: and they have the fifty companies to keep your eye
Speaker 4: on this year.
Speaker 5: Hey, they did the work, but we get to share
Speaker 5: the findings. That's next. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or live on YouTube.
Speaker 4: Artificial intelligence was, yeah, no doubt about it. A big
Speaker 4: factor to watch for in the twenty twenty four year
Speaker 4: ahead issue of the Bloomberg BusinessWeek Fifty Companies to Watch
Speaker 4: that was one year ago. We know how the AI
Speaker 4: revolution played out this past year continued to play out.
Speaker 4: For the companies and trends to keep an eye on.
Speaker 4: For twenty twenty five, we turned to the annual list
Speaker 4: we love to highlight.
Speaker 5: The list comes courtesy of Bloomberg Intelligence and its analysts,
Speaker 5: who track some two thousand companies and sectors ranging from
Speaker 5: finance to food, who have once again come out with
Speaker 5: its annual list of companies that weren't a closer look,
Speaker 5: which you can read now on the Bloomberg terminal and
Speaker 5: at Bloomberg dot com Slash BusinessWeek, as well as the
Speaker 5: January issue of Bloomberg BusinessWeek magazine.
Speaker 4: To help break down some of the top names to watch,
Speaker 4: we spoke with Bloomberg Intelligence Senior European strategist and Director
Speaker 4: of Research Content, Tim Craighead.
Speaker 8: The fifty Companies to Watch are based largely off of
Speaker 8: a group of companies that we have as focus ideas,
Speaker 8: and our focus ideas are where our analysts around the
Speaker 8: globe on a bottom up basis, sector by sector, are
Speaker 8: looking for fundamental situations where they have a really strong view,
Speaker 8: a high conviction view that they think is out of consensus,
Speaker 8: that's differentiated from what the market is thinking. And we
Speaker 8: zero in on fifty out of that broader list that
Speaker 8: have specific catalysts in twenty twenty five in this case
Speaker 8: that we think will bring the bring the market around
Speaker 8: to our point of view. And you know, it's pretty
Speaker 8: balanced across sectors. About half our US or America is oriented.
Speaker 8: The other fifty percent are sort of equally split between
Speaker 8: Europe and Asia about twenty percent or negative, about eighty
Speaker 8: percent or positive. So there's a good balance around. And
Speaker 8: you know, there's lots of different drivers, you know, company
Speaker 8: about company and sort of theme by theme.
Speaker 4: And there are some buckets tam that they fall into,
Speaker 4: whether it's cyclical recovery AI related, which tends to hit
Speaker 4: a lot of companies nowadays. But give give us a
Speaker 4: little bit of context on that.
Speaker 8: Yeah, it's an interesting thing because if I actually juxtaposed
Speaker 8: this year versus last AI was a big deal a
Speaker 8: year ago, but it was a lot of the big
Speaker 8: AI companies, the software companies, the LLM guys and whatnot.
Speaker 8: This year it's more geared towards the semiconductors and enabling
Speaker 8: technologies behind it. We can get into some of those.
Speaker 8: China was a big deal last year, but it was
Speaker 8: all negative about the property crisis. This year, the list
Speaker 8: has changed complexion from a China perspective, and it's more
Speaker 8: positive oriented about a cyclical recovery because of the stimulus
Speaker 8: that's coming through, you know. And you can also look
Speaker 8: at other topics such as a broader based cyclical recovery
Speaker 8: in Europe or the US because of lower interest rates.
Speaker 8: There's a lot of innovation and new product stories in
Speaker 8: there as well, and some other factors.
Speaker 4: All right, we want to get into some of the names.
Speaker 4: I know it's alphabetical, but we got to get into
Speaker 4: first of all, Broadcom. Why are you guys highlighting it?
Speaker 8: Well? Broadcom is interesting because you think of this as
Speaker 8: a semiconductor company, but it's much more than a simic
Speaker 8: inductor company because it's gotten into infrastructure software and it's
Speaker 8: one of the few companies that combines semiconductors and software.
Speaker 8: And importantly, it's part of the AI theme because a
Speaker 8: lot of what it's doing feeds into the whole AI story,
Speaker 8: whether it's with Google or Meta or what have you.
Speaker 8: So you know, it's a pretty intriguing story. And you
Speaker 8: know software business came from you know, their acquisition of
Speaker 8: VMware a couple of years ago.
Speaker 5: Why is Tesla on the list this year?
Speaker 8: So Tesla is there, and I'm going to bring in
Speaker 8: one other company at the same time. This falls into
Speaker 8: that category of new products, innovation and whatnot. Obviously, Tesla
Speaker 8: is all about electric vehicles, but importantly, as we look
Speaker 8: into next year, there's new vehicles that are coming through
Speaker 8: an important refresh of their their core cars, and we
Speaker 8: think that that's an opportunity for a lift. Similarly, Porsche, Uh,
Speaker 8: you know, we all like Porsches. I think we all
Speaker 8: like Porsches. I'd like to like a Porsche they got.
Speaker 4: Well, I'm going to tell you you can like it.
Speaker 4: It's just right about ownership, right, yeah.
Speaker 8: Well it's funny because back in the day, you know,
Speaker 8: these were relatively well, relatively affordable. The way that Porsche
Speaker 8: has driven its business pun intended is to go higher
Speaker 8: and higher end to where you know, the the average
Speaker 8: selling price of their cars are quite significant. And essentially
Speaker 8: what they're trying to do is attain a Ferrari like
Speaker 8: profit margin. And and they've got number of products, whether
Speaker 8: it's hybrid related or other, that should help propel the
Speaker 8: company along in its profits and its margins along, interestingly,
Speaker 8: and it flies a little bit in the face of
Speaker 8: Tesla clearly that's pure battery electric vehicle. There has certainly
Speaker 8: been a palls in the US and in Europe about
Speaker 8: that whole sort of transition to electric vehicles, and Borsh's
Speaker 8: core combustion engine business is doing better than what a
Speaker 8: lot of people thought it was going to do.
Speaker 5: Tim, I want to stick with the transportation theme here
Speaker 5: and talk Airbus because a lot has happened with this
Speaker 5: duopoly over the last year, including at the beginning of
Speaker 5: this year that a door panel blowing out on that
Speaker 5: seven thirty seven Max that Alaska Airlines jet and that
Speaker 5: sort of sent Boeing into its most recent struggles and
Speaker 5: new executive there and the like why air Bus on
Speaker 5: the list.
Speaker 8: Yeah, So there's a couple of elements that play in.
Speaker 8: Part of it is just pure cyclical recovery. You know,
Speaker 8: there is continued recovery and air traffic. There's continued recovery
Speaker 8: and order flow for airlines. And at the same time
Speaker 8: there's been a real constraint on supply on the supply
Speaker 8: channel going into the airline or airframe business. We think
Speaker 8: both of these elements are in play for twenty twenty five.
Speaker 6: And to the degree that Airbus, we.
Speaker 8: Think continues to gain relative market share versus Boeing. You know,
Speaker 8: there's an host of factors that play into a pretty
Speaker 8: positive view here.
Speaker 4: All Right, I like planes too, but I also like makeup.
Speaker 4: I'm just going to put trains that.
Speaker 5: There is a train company on the list, a railroad
Speaker 5: on the list, right, Steve Tas.
Speaker 4: All right, all right, we're going to get back to
Speaker 4: that in a moment.
Speaker 8: St.
Speaker 4: Latter I want to bring that one. It's been under pressure.
Speaker 4: It's a well known company, I kind of company in
Speaker 4: the cosmetic business. If you go back to STI Latter
Speaker 4: who created it. It has gone through some changes. It's
Speaker 4: down I think more than forty percent this year, but
Speaker 4: it's been on quite a rally since kind of mid November,
Speaker 4: up about thirty percent. You guys highlighted it. Are you
Speaker 4: expecting some kind of not liquidation, but some kind of
Speaker 4: I don't know event that maybe changes the fortunes going forward?
Speaker 8: Yeah? Well so stay Lotder is an interesting one because
Speaker 8: you have to love the brands that make up Stay Lotder,
Speaker 8: you know, whether it's Stay Lotder itself or.
Speaker 2: Mac or.
Speaker 8: Clinique what have you. But it really does seem like
Speaker 8: they've lost a bit of an edge in some of
Speaker 8: their brands. They're also particularly skewed towards airline I should
Speaker 8: say airport travel related retail, which continues to be under pressure.
Speaker 8: Notwithstanding air travel coming back spending all duty free has
Speaker 8: continued to remain a pressure point. We think Stay Laughter
Speaker 8: continues to have some potential for disappointment in the first
Speaker 8: half of the year before maybe things then come around.
Speaker 8: They've announced a big restructuring that will happen. We think
Speaker 8: actually that restructuring charge that they'll take could actually be
Speaker 8: even more with a new with new CEO who's coming
Speaker 8: in place, So stay tuned. By the end of next
Speaker 8: year there could be an interesting recovery. But it's a
Speaker 8: rough road in between now and then.
Speaker 5: All right, I'm getting back to transit and get to say,
Speaker 5: planes makeup and trains. Yeah, Planes make up and Trains
Speaker 5: doesn't have the same ring to it with the John
Speaker 5: Candy film Norfolk Southern. What's going on with Norfolk Southern?
Speaker 8: So it's an interesting story. I have a long long
Speaker 8: standing association with Norfolk Southern previously Norfolk and Western. My
Speaker 8: dad worked there for over forty years to rest his soul.
Speaker 6: And.
Speaker 8: They've had issues over the last couple of years. Unlike Union,
Speaker 8: which actually was on our list last year, that had
Speaker 8: really gotten moving with precision rail to be very precise
Speaker 8: in the logistics and it's really good for customers and
Speaker 8: it's great for the margins and efficiency. Norfolk Southern had
Speaker 8: been lagging. They have a new CEO who's in, They're
Speaker 8: bringing management in who's much more geared towards this precision transportation.
Speaker 8: We think this is a recovery story in two thousand
Speaker 8: and twenty five, somewhat akin to what we had seen
Speaker 8: at U and P last year.
Speaker 4: You said twenty percent negative eighty percent positive stories. Is
Speaker 4: it always that mix or does it tell you anything
Speaker 4: about kind of sentiment or what's going on in the market.
Speaker 8: No, you know, we try to have a balance of
Speaker 8: you know, this standard view is looking at glass half full,
Speaker 8: but we tried to keep an eye out towards where
Speaker 8: do we see expectations that have run too far too fast?
Speaker 8: And you know, our ideas range from a couple of banks,
Speaker 8: to some consumer product companies, to tech companies.
Speaker 5: So yes, that's Tim Craighead, Senior European strategist and director
Speaker 5: of Research content for Bloomberg Intelligence. Check out the full
Speaker 5: list online at Bloomberg dot com, slash BusinessWeek, and on
Speaker 5: the Bloomberg terminal.
Speaker 4: And we should point out, you know, one other company
Speaker 4: we talked about with Tim Craighead that was in that
Speaker 4: interview was Broadcom. You know the earnings. Broadcom's last earnings report,
Speaker 4: which came out after the publishing of Business Weeks fifty
Speaker 4: Companies to Watch, really supported why this company made the
Speaker 4: list in the first place. Broadcom's twenty twenty four revenue
Speaker 4: in the last quarter tim increased forty four percent year
Speaker 4: over year to a record fifty one point six billion,
Speaker 4: and largely due to a strong demand for AI chips.
Speaker 4: And then the stock swored to a one trillion dollar
Speaker 4: market evaluation on the news it's share price more than
Speaker 4: doubling this past year. It is now, I believe Tim,
Speaker 4: because these things move around a little bit, the second
Speaker 4: most valuable chip company behind Nvidio.
Speaker 5: Look, this is why you should pay attention to what
Speaker 5: Bloomberg Intelligence and Tim Craighead and the team. Right, here's
Speaker 5: what they wrote about ahead of those numbers. They right
Speaker 5: that it provides a unique combination of advanced semiconductors and
Speaker 5: infrastructure software, and it's positioned this year for accelerated growth.
Speaker 5: It's among the leading suppliers of semiconductors used in advanced
Speaker 5: networks that connect AI computers and data centers, and it
Speaker 5: has a growing business selling custom AI chips to Yes,
Speaker 5: Google and meta platforms.
Speaker 4: I love that, so spot on right, And again that
Speaker 4: was ahead of Broadcom's earnings, which showed that momentum. Hey,
Speaker 4: another company that Tim mentioned you just heard about it though,
Speaker 4: was Tesla. But Tesla also came out with some news
Speaker 4: after we talked with Tim. Tesla's annual vehicle sales dropping
Speaker 4: for the first time in more than a decade, despite
Speaker 4: a year and push that sent deliveries to a record
Speaker 4: in the fourth quarter. And we did see Tesla's shares
Speaker 4: dropping specifically on that news. All Right, that wraps up
Speaker 4: our first hour of the weekend edition of Bloomberg Business
Speaker 4: Week from Bloomberg Radio. Coming up in our next hour,
Speaker 4: a former healthcare CEO on the importance of paying workers
Speaker 4: a living wage and why he says that is good
Speaker 4: for business.
Speaker 5: Plus Blue Sky versus Okay, Elon versus Altman, Sure, and
Speaker 5: Paddington Bear versus dog Man.
Speaker 13: What.
Speaker 5: I don't know what's going on here, but we're gonna
Speaker 5: break down the feuds that are going to define twenty
Speaker 5: twenty five something.
Speaker 4: It sounds like that Max Chofkin would talk about, So
Speaker 4: he's coming up in the next hour. Totally, totally. Plus,
Speaker 4: travel was back in a big way in twenty twenty four.
Speaker 10: You know that.
Speaker 4: So have we all hit the hotspots? Nope, says our
Speaker 4: Bloomberg Pursuits team. We have the best cities, resorts, restaurants,
Speaker 4: and museums to visit in the year ahead, courtesy of
Speaker 4: our Pursuits team. And even better, we've compiled the costs
Speaker 4: of each and every trip. All you need to do
Speaker 4: is pack your bags.
Speaker 2: This is the Bloomberg Business Week Podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Apple car Play
Speaker 2: and Android Auto with the Bloomberg Business App. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station. Just say Alexa play Bloomberg eleven.
Speaker 4: Thirty Play ahead in our second hour of our first
Speaker 4: weekend edition of Bloomberg Business Week of twenty twenty five,
Speaker 4: we continue our look ahead, including the feuds that will
Speaker 4: define the new year. Some beefs we knew, others we
Speaker 4: probably don't see coming.
Speaker 5: Plus our Bloomberg Pursuits team, in collaboration with Kayak, out
Speaker 5: with a list of the best places worth checking out
Speaker 5: this year. This time, they've got an interactive breakdown of
Speaker 5: the costs at your fingertips. You are not going to
Speaker 5: believe so cool. This tool tells you when to go,
Speaker 5: how much it's going to cost you. And even though
Speaker 5: it's in Pursuits, Carol, there are some affordable destinations.
Speaker 4: Yeah, and some of them don't require a passport. That's all.
Speaker 4: I'm going to put it out there, some of them,
Speaker 4: some of them first up this hour. It's something we
Speaker 4: talk a lot about here on Business Week, and that
Speaker 4: is the gap between how much executives make versus those
Speaker 4: on the front lines. Check this out. According to the
Speaker 4: Economic Policy Institute, CEO compensation rose by one eighty five
Speaker 4: percent between nineteen seventy eight and twenty twenty three, while
Speaker 4: the typical workers compensation only rose twenty four percent. The
Speaker 4: Economic Policy Institute also notes that in twenty twenty three,
Speaker 4: CEOs made two hundred and ninety times as much as
Speaker 4: the typical worker, compared to twenty one times as much
Speaker 4: back in nineteen sixty five. Times have changed him.
Speaker 5: This may be a surprise to you, but not to
Speaker 5: our next guest too, says we need to quote pay
Speaker 5: the People. John Driscoll is the former CEO of care Centrix.
Speaker 5: It was bought by Walgreens Boots Alliance more than two
Speaker 5: years ago. He currently chairs Magnet Global, and international staffing
Speaker 5: company that manages over seven hundred thousand employees.
Speaker 4: John is also author of the book Pay the People.
Speaker 4: Why fair pay is good for business and great for America.
Speaker 1: I'm really focusing on making the case that it's good
Speaker 1: for business and it's good for America if we can
Speaker 1: get to a living wage. We lost the string a
Speaker 1: while ago. Between the nineteen thirties and nineteen eighty, median
Speaker 1: productivity United States went up by about ninety seven percent
Speaker 1: and the median wages went up by about ninety percent.
Speaker 1: Since nineteen eighty two, today, product he's gone up another
Speaker 1: ninety percent, but wages median wages have only gone up
Speaker 1: by nine the gap. It's inconceivable that we should sort
Speaker 1: of push working class folks farther and farther away from
Speaker 1: being able to take part in this great capitalist adventure
Speaker 1: that's working for.
Speaker 3: So many of us.
Speaker 1: But you know, there's forty million people in America who
Speaker 1: aren't earning a living wage.
Speaker 5: Do you think the incentives are misaligned? Because if we
Speaker 5: think about and you've been part of publicly traded companies before,
Speaker 5: what do investors care about? They care about the top line,
Speaker 5: and they care about the bottom we.
Speaker 4: Never talk about. Okay, so they'll you know how much?
Speaker 5: Yeah, how much?
Speaker 4: Did you know the people on the front lines make you.
Speaker 5: Know what they care? They care about automation and increasing margins.
Speaker 8: Yeah.
Speaker 1: But I think though that you're starting to see things
Speaker 1: change you at my own.
Speaker 5: Companies is twenty eighteen with the economic roundtable. Well, it's
Speaker 5: only gotten work.
Speaker 1: I think that the Well, first of all, the trend's
Speaker 1: been horrible for the last thirty years, as I.
Speaker 3: Just pointed out.
Speaker 1: But at my own company, when we froze executive salary
Speaker 1: and double minimum wage twelve years ago, retention went up,
Speaker 1: engagement went up, but productivity also went up by about
Speaker 1: thirty percent.
Speaker 3: And you're starting to.
Speaker 1: See some of the most successful companies in America, Bank
Speaker 1: of America JP Morgan also raised their wages to a
Speaker 1: living wage. They did it as part of that business
Speaker 1: Roundtable commitment. But what they found is that it lowered
Speaker 1: the number of people who were leaving their jobs. Because
Speaker 1: people who are working in minimum wage jobs are often
Speaker 1: working two jobs, they're not as engaged. They found that
Speaker 1: productivity went up. What they invested in kind of a
Speaker 1: if you want a fair or social contract, they found
Speaker 1: they had a more successful and profitable business. I think
Speaker 1: the most important thing is we get the story out
Speaker 1: that it is a productivity gain and a win for
Speaker 1: the companies, and also that I don't think that capitalism
Speaker 1: can easily be sustained if the bottom third of the
Speaker 1: workforce isn't really part of If the company wins.
Speaker 4: You win, So why don't we do it? Then you
Speaker 4: lay out a really good an argument, why isn't it
Speaker 4: that more companies don't do that?
Speaker 1: Well, That's what I am focused right now, Carol, on
Speaker 1: selling that story and telling that story, because even for
Speaker 1: the executives that have done it, they're surprised at how
Speaker 1: it increases how long folks stay at jobs. It increases
Speaker 1: their productivity. But that's not a story that many people
Speaker 1: have told, and they certainly haven't told it with very
Speaker 1: specific examples. You know, our ability to pay claims grew
Speaker 1: by thirty percent, people stated our company for longer. We
Speaker 1: had fewer people quietly quitting or quitting very quickly, and
Speaker 1: so I think it's selling and telling that story. I
Speaker 1: also think that we're getting the message in a lot
Speaker 1: of different ways.
Speaker 3: I think the reason why we have so.
Speaker 1: Much rancor anger and discontentment in working class voters of
Speaker 1: all races and backgrounds is they're not really feeling like
Speaker 1: they're part of business, of an America that works, where
Speaker 1: business is clearly working and being successful.
Speaker 10: Chaus Johnny.
Speaker 4: One of the things Tim and I have talked about
Speaker 4: it a lot, and you write about the restaurant in
Speaker 4: Association and the restaurant industry that I feel like, first
Speaker 4: of all, we feel like there's a tip jar everywhere,
Speaker 4: and to me, it just says we're not paying workers enough.
Speaker 4: And I like, why aren't companies paying workers? Why do
Speaker 4: I have like I would rather pay more for an
Speaker 4: item and just ensure that these workers are getting paid.
Speaker 4: I think about the restaurant industry that you know, right,
Speaker 4: they expect that they're going to be tips, Like, how
Speaker 4: do we kind of rework that?
Speaker 1: Well, I think we have to actually tell the story,
Speaker 1: sell the story, and then organize. But there are plenty
Speaker 1: of examples. Danny Meyers has been a leader and a
Speaker 1: supporter of the movement that we're working on, which is
Speaker 1: to eliminate kind of the tipped minimum wage, which is
Speaker 1: still at three dollars and twenty five cents. It's unbelievable,
Speaker 1: and you start think if you're we're not talking about Danielle,
Speaker 1: we're talking about most people are working at Denny's. And
Speaker 1: when you increase the minimum wage and you get to
Speaker 1: a fair wage. You know, California raise the fast food minimum.
Speaker 3: Wage to twenty an hour.
Speaker 1: I thought it was an odd thing to do, but
Speaker 1: there was a lot of complaints that that would harm
Speaker 1: the industry. There's thousands more fast food jobs.
Speaker 5: Now, why did you think it was an odd thing
Speaker 5: to do?
Speaker 1: Well, I think it was odd to just bring it
Speaker 1: up for one category. For me, the most important thing
Speaker 1: is to eliminate minimum wage across the board and get
Speaker 1: to a living wage.
Speaker 3: Get to I mean again, you've got.
Speaker 1: Forty million people where they're working full time jobs, and
Speaker 1: one job doesn't afford them enough to live independently and
Speaker 1: pay their bills.
Speaker 5: What do you think of the most wealthy people in
Speaker 5: the world right now, someone like Elon Musk, for example,
Speaker 5: whose fortune has increased by roughly two hundred million dollars
Speaker 5: just since the election. What do you make of the
Speaker 5: concentration of wealth at the very top.
Speaker 1: Well, I think one of the things that we actually
Speaker 1: got me excited about patriotic millionaires is that we I
Speaker 1: was deeply offended by the notion of the elimination the
Speaker 1: reduction of taxes on the most wealthy and the reduction
Speaker 1: of the estate tax, because I think the the threat
Speaker 1: of intergenerational oligarchic wealth of massive scale, intentionally or unintentionally
Speaker 1: disdistorting the politics of the moment is a real challenge.
Speaker 1: And that was twenty years ago when I started, when
Speaker 1: I worked started working with patriotic millionaires. But I don't
Speaker 1: think the biggest problem we have is the massive accumulation
Speaker 1: at the top, because part of that's related to technology.
Speaker 3: It's the fact that we.
Speaker 1: Cut off the bottom third of workers in America, and
Speaker 1: that's not going to be good for the economy. If
Speaker 1: more and more people feel like they're not part of
Speaker 1: the American dream.
Speaker 3: We're the only.
Speaker 1: Country that dream is associated with the country. Our country
Speaker 1: is held together by this notion that we're in it together.
Speaker 1: If that, if the bottom third of America does, from
Speaker 1: a wages and wealth perspective, doesn't feel like they're part
Speaker 1: of it, I worry about democracy.
Speaker 3: I think there are plenty of things you could do
Speaker 3: in tax.
Speaker 1: Policy to increase to certainly make sure that, as Warren
Speaker 1: Buffett says, he isn't paying a lower percentage of taxes
Speaker 1: than his assistant. I think we should have a fair
Speaker 1: inheritance SAX so we don't have these massive concentrations of wealth.
Speaker 1: But the urgent problem of today is to pay people
Speaker 1: who are working hard, leaning in people who are at
Speaker 1: at the bottom third of the wage scale, who are really,
Speaker 1: you know, running up a down escalator of costs, particularly
Speaker 1: a time of inflation.
Speaker 4: So how do we get executives to start thinking about it.
Speaker 4: We have many conversations with CEOs. We often do hear
Speaker 4: about having to pay up for talent, but I'm assuming
Speaker 4: they mean executives and folks kind of higher up in
Speaker 4: their company and not necessarily everyone how do we get
Speaker 4: them to think about that all across all of the
Speaker 4: workers that they pay for.
Speaker 1: Well, I don't know how we convince them, but the
Speaker 1: voters are already there. Raising the minimum wage to a
Speaker 1: higher level has won in almost I think it's I
Speaker 1: think it's nineteen out of twenty states it's been put
Speaker 1: on the ballot in the last election cycle. Raising the
Speaker 1: minimum wage won by six points in Missouri, it went
Speaker 1: easily in Alaska. Those are both Trump plus ten or
Speaker 1: twenty states.
Speaker 3: And the and the the.
Speaker 1: Republican attempt to reduce the raise raising the tip minimum
Speaker 1: wage actually was defeated at the ballot box in Arizona.
Speaker 1: So the voters are already there. I think the only
Speaker 1: way we're going to get there today is politically, because
Speaker 1: the if you have to convince one executive at a time,
Speaker 1: will be here forever through voters. We have to we
Speaker 1: have to put it on the ballot, we have to
Speaker 1: get it through Congress.
Speaker 3: And I think, what's what's what?
Speaker 1: What what's remarkable to me is the Republican voters are
Speaker 1: already there.
Speaker 5: Is it a zero sum game? Like? Is it if
Speaker 5: to pay workers more, do executives have to earn less?
Speaker 1: Not not at all.
Speaker 3: I mean there is.
Speaker 1: I mean the most recent example of raising fast food
Speaker 1: minimum wage and creating more fast food jobs is the
Speaker 1: example of the last couple of years. But when the
Speaker 1: restaurant associations we talk about in the book actually pulled
Speaker 1: its members, not its lobbyists in d C, they found
Speaker 1: that many of them actually wanted to increase those wages.
Speaker 1: There's a Nobel Prize winning economist who studied what happened
Speaker 1: when New York raised its wages in hospitality and Pennsylvania didn't.
Speaker 1: And what found is what they found is that the
Speaker 1: New York businesses actually grew faster, which means those business
Speaker 1: owners made more money even though the wages that they
Speaker 1: had to pay were higher.
Speaker 5: Well, do you think raising the minimum wage in one
Speaker 5: sector like restaurants does raise minimum wage across other sectories too?
Speaker 5: You don't think so. So you don't think like, if
Speaker 5: you're getting paid twenty dollars an hour to work at McDonald's,
Speaker 5: then the warehouse owner has to raise their wages to
Speaker 5: that or else their employees are going to go work
Speaker 5: at McDonald's.
Speaker 4: When is the burger going.
Speaker 5: To go up?
Speaker 8: I'm going to go up?
Speaker 1: I Well, the reality is the percentage of labor that
Speaker 1: goes into the Big Mac is actually pretty trivial. Probably
Speaker 1: to pay a living wage at McDonald's it would probably
Speaker 1: go by four to five cents per burger. So I
Speaker 1: think it's not it's deminimous.
Speaker 4: I'm playing a little bit Devil's advocate here.
Speaker 1: No, absolutely, But where I was going with is we're
Speaker 1: moving too slowly. It's time to actually change the laws,
Speaker 1: change the rules, and make sure that everybody at the
Speaker 1: bottom end of the pay scale is paid a living wage.
Speaker 1: And that's true for folks. We've got to eliminate the tip,
Speaker 1: minimum wage. I would eliminate the discount for disabled workers.
Speaker 1: We have to get to the point where all executives
Speaker 1: who believe in the dignity of work start paying wages
Speaker 1: that are equivalent to dignified pay.
Speaker 5: We have this terminal function on the Bloomberg terminal where
Speaker 5: we can look up executive compensation. So forgive me for
Speaker 5: being fresh, but you are part of a group that
Speaker 5: does argue that many people should be getting paid more
Speaker 5: and executives sometimes should be getting paid less than twenty
Speaker 5: twenty three, your total compensation was over eleven million dollars.
Speaker 5: Was that too much? Were you paid too much?
Speaker 1: I have been the beneficiary of a capitalist system that
Speaker 1: overpays the top and isn't paying enough at the bottom.
Speaker 1: But I am absolutely certain and I'm that we could,
Speaker 1: we could raise get to a living wage level and
Speaker 1: it would have it would make no big dent on
Speaker 1: the comp at the top.
Speaker 3: But let me also say that, as a.
Speaker 1: Patriotic millionaire, I am on the record as saying I
Speaker 1: think we should increase taxes on people like me and
Speaker 1: increase the state tax for.
Speaker 3: All of us.
Speaker 5: How high should they be? Because if you go back
Speaker 5: in history, I mean, the top marginal tax rate used
Speaker 5: to would shock you know, fifty sixty years ago, would
Speaker 5: shock people today. Yeah, I mean it was.
Speaker 1: It was insanely high.
Speaker 5: It was insanely high.
Speaker 1: Let's start by not approving, not extending the tax cuts
Speaker 1: that Trump put in place when he was in office.
Speaker 1: Let's start by getting to a level that we were
Speaker 1: paying during the Clinton administration, which was one of the
Speaker 1: greatest periods of prosperity, and we were actually paying down
Speaker 1: the debt. We have a one point seven trillion dollar
Speaker 1: debt sit this year. It is not going to be
Speaker 1: news to anyone who can do math that all of
Speaker 1: us are going to be paying taxes, and I think
Speaker 1: it should be very clear that people like me should
Speaker 1: be paying more taxes than most.
Speaker 4: Yeah, but we've been hearing this for a couple of years.
Speaker 4: I mean I remember being out at Milkin a few
Speaker 4: years ago and people saying, Yep, it's time for us
Speaker 4: to pay more taxes, really wealthy individuals, and yet here
Speaker 4: we are. One thing I want to ask you, because
Speaker 4: we're running out of time, is that if we believe
Speaker 4: in a free market, I'm looking at your book about
Speaker 4: some of the myths that are out there that if
Speaker 4: we pay people a living wage. You know, some of
Speaker 4: the myths that you kind of address, And one is
Speaker 4: this isn't an issue for the government because the free
Speaker 4: market will naturally take care of it. We saw wages
Speaker 4: go up during the pandemic and out of it because
Speaker 4: there was a shortage of workers and so supplied demand.
Speaker 4: Free market it was at work. But I don't know
Speaker 4: that that will continue. Will the free market kind of
Speaker 4: help bring this about?
Speaker 1: Well, I think if you look at where wages are
Speaker 1: right now, even during the pandemic, while there was a
Speaker 1: slight bump in wages at the bottom costs went up
Speaker 1: at twice the rate that wages went up, and so no,
Speaker 1: the free market has failed.
Speaker 3: And by the way, it worked when we.
Speaker 1: Actually had a minimum wage that was closer to reflecting
Speaker 1: a living wage, which drove the greatest period of economic
Speaker 1: success the world has ever seen between the forties and
Speaker 1: the eighties. We unhooked that the bottom third of the
Speaker 1: workforce at that point, and I think we've got a
Speaker 1: pretty angry, unhappy electorate and a lot of people living.
Speaker 3: In near poverty and that's just not fair.
Speaker 4: We just had a conversation with was it the CEO
Speaker 4: of Feeding in America, Yeah, and just talked about, you know,
Speaker 4: the people who just don't have enough food on their table.
Speaker 5: Food and security in this country.
Speaker 4: Insecurity just incredible, the percentages and.
Speaker 1: One out of three or four kids, one out of
Speaker 1: five households.
Speaker 3: That is unacceptable.
Speaker 1: And by the way, paying a living wage is not
Speaker 1: going to cost capitalism, it's actually going to improve our
Speaker 1: markets and business.
Speaker 4: In thirty seconds, Is a living wage the same in
Speaker 4: every state, in every city, It's got to be depending
Speaker 4: on the locale.
Speaker 1: No, I think that the FEDS should set a living
Speaker 1: wage at the national median okay, and then you can
Speaker 1: vary it up or down based on I mean vary
Speaker 1: it up rather based on what the true costs. The
Speaker 1: costs in LA and New York are very different than
Speaker 1: the cost in Jackson, Mississippi, or you know, or West Texas.
Speaker 3: You have to vary it.
Speaker 1: But the old minimum is so low right now as
Speaker 1: to be insulting to workers. I yeah, I.
Speaker 4: Feel like you're preaching to the choir. John Driscoll, come
Speaker 4: back soon. This was an important conversations. Of course, former
Speaker 4: CEF care centric his new book, Pay the People, Why
Speaker 4: fair pay is good for business and great for America.
Speaker 2: This is the Bloomberg Business Week podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Apple car Play
Speaker 2: and the Android Auto with the Bloomberg Business app. You
Speaker 2: can also listen live on Amazon Alexa from our flagship
Speaker 2: New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 10: In one corner, we.
Speaker 4: Have the world richest man, electric car and rocket Titan
Speaker 4: and self proclaimed first buddy of Don Trump. In the
Speaker 4: other corner, Open AI's chief executive officer, whom Elon Musk
Speaker 4: has accused in a lawsuit of hijacking the venture in
Speaker 4: pursuit of profit. This feud, as you now know, is
Speaker 4: between Elon and Sam Altman.
Speaker 5: That's just one of the many feuds that Bloomberg BusinessWeek
Speaker 5: columnist Max Chafkin writes about in the yearhead issue of
Speaker 5: Bloomberg Business Week. Max is also co host of the
Speaker 5: Elon Inc. Podcast and the author of the book The
Speaker 5: Contrarian Peter Thiel and Silicon Valley's Pursuit of Power. Max
Speaker 5: breaks down the characters for the top feuds in twenty
Speaker 5: twenty five with Carrol and Bloomberg's Emily GRIFFEO.
Speaker 14: Well, you know, business Week is forecasting all the trends
Speaker 14: we anticipate in twenty twenty five, you know, markets and
Speaker 14: so on that'll be up and what'll be down. But
Speaker 14: of course feuds, you know, who's going to be fighting
Speaker 14: with who is always a fun question. And I think
Speaker 14: you know, during a during the soon to be Trump presidency,
Speaker 14: we'll probably be seeing more of those, right. This is
Speaker 14: a president elect who who loves a good you know,
Speaker 14: public bruhaha. And we've got quite a few characters, you know,
Speaker 14: who are connected to the administration, who are in the
Speaker 14: middle of fights of their own.
Speaker 4: And it sounds like Elon pops into a couple of
Speaker 4: these feuds, which is no surprise since he kind of
Speaker 4: is popping up everywhere.
Speaker 14: Yeah, he's he feuds with a lot of folks. The
Speaker 14: one we picked on to focus on is Sam Altman,
Speaker 14: the CEO of open ai, which is, you know, the
Speaker 14: basically the market leading artificial intelligence chat pop platform. Elon
Speaker 14: Musk has been beefing with Sam Altman for years, dating
Speaker 14: all the way back to the founding this company. To
Speaker 14: give you the sort of quick version of it, basically,
Speaker 14: it was started as a nonprofit and has kind of
Speaker 14: morphed into something else. Elon Musk is not.
Speaker 5: Happy about that.
Speaker 14: Partly, he says, you know, just because of the principle,
Speaker 14: but also, oh, by the way, he happens to own
Speaker 14: a significant competitor to open ai. So there's a there's
Speaker 14: sort of a business dispute and an ethical dispute, and
Speaker 14: of course a potential regulatory dispute because the Trump administration,
Speaker 14: the next Trump administration will be seeking to change the
Speaker 14: AI regulatory framework and Elon Musk could have a voice there.
Speaker 4: You didn't you let that the good part what Elon
Speaker 4: has called Sam.
Speaker 14: Right, Yes, Elon has adopted the Trump thing of giving
Speaker 14: everyone nickname, so he called Sam Altman Swindley Sam. So,
Speaker 14: you know, given how much Elon Musk tweets, and also
Speaker 14: the kind of merging between Elon Musk and Trump, I
Speaker 14: think that would be another thing to look out for
Speaker 14: other nicknames, other people who might earn an epithet.
Speaker 13: Okay, So I want to get to the other feuds.
Speaker 13: But weren't they weren't Sam Altman and Elon Musk didn't
Speaker 13: they initially work together like they were first going to
Speaker 13: be business partners, and now this has fallen into such
Speaker 13: a feud.
Speaker 14: They were co founders of Open AI, right, and you
Speaker 14: know that is the that's kind of the source of
Speaker 14: this because Elon Musk gave a bunch of money to
Speaker 14: start this thing up. I think at the time he
Speaker 14: saw it as a philanthropic donation. And over the years
Speaker 14: it's become clear that Open AI, whatever it's philanthropic mission,
Speaker 14: you know, which has to do with, you know, keeping
Speaker 14: the world safe from AI apocalypse, is going to be
Speaker 14: a potential threat to some of Elon Musk's companies. Tesla,
Speaker 14: of course, is embarking on this pivot to AI. Musk
Speaker 14: has also launched this competing AI chatbot through Xai, which
Speaker 14: is kind of vaguely related to his two x which
Speaker 14: you know, formerly known as Twitter. So they've basically gone
Speaker 14: from being partners yet to being frenemies.
Speaker 4: Maybe maybe he's just cranky because we're going to start,
Speaker 4: you know, not talking about tweets anymore, but talking about skeets.
Speaker 4: And this gets to another few that you guys write
Speaker 4: about that you include in your list.
Speaker 1: You know, this is interesting.
Speaker 14: Blue Sky, which is one of the competitors to Twitter.
Speaker 14: Over the last couple of years, we've seen a bunch
Speaker 14: of these come and go. Remember there's a Facebook the
Speaker 14: Facebook version Threads, there was something called Mastodon. They're also
Speaker 14: the conservative or alternatives Parlor, and of course the president
Speaker 14: of lex own company Truth Social. Blue Sky is really
Speaker 14: the first one to take off in a big way.
Speaker 14: That feels organic. Threads had a lot of users, but
Speaker 14: they were all kind of coming from Instagram essentially, users
Speaker 14: reasons sort of put there, whether they liked it or not.
Speaker 14: What we've seen with Blue Sky over the past few
Speaker 14: months as the service has gotten sort of more fully
Speaker 14: featured and as users perhaps they're because they're turned off
Speaker 14: by the owner of ex Elon Musk support of president
Speaker 14: like Donald Trump, or perhaps it's just because under Elon Musk,
Speaker 14: X has changed. We're seeing huge explosions of growth, especially
Speaker 14: in some of those cohorts of user that had really
Speaker 14: made Twitter now X vibrant. So talking about sort of
Speaker 14: media figures, celebrities, even some politicians, even some sports.
Speaker 3: Folks, it's it's really it feels real.
Speaker 14: I mean, it's much smaller than the other social networks
Speaker 14: at the moment, but it does feel like, you know,
Speaker 14: it is a potential thread. And of course on Twitter
Speaker 14: you've got tweets. Even though it's called X, we still
Speaker 14: call them tweets for some reason, and on Blue Sky
Speaker 14: they are called whether you like.
Speaker 3: It or not skeets.
Speaker 4: I want to do kind of a Twitter or X
Speaker 4: poll because just in our informal control room, I'm getting
Speaker 4: all these things in our ib chat skeets. Skeets really
Speaker 4: kind of sounds a little whiskey.
Speaker 14: I don't make the I don't make terms. I just
Speaker 14: I just report on them.
Speaker 13: But so does X. I mean I have to say,
Speaker 13: I still type in Twitter dot com, I do it
Speaker 13: into my browser and then it like populates to X.
Speaker 13: But I'm not typing in X dot com.
Speaker 4: But I'm slowly using X more than I'm using Twitter,
Speaker 4: Like I find myself Scott.
Speaker 10: More than Twitter.
Speaker 4: No, I mean saying xy yes, No, but I feel
Speaker 4: like I'm getting solicited a lot about Blue Scott.
Speaker 14: Even even Elon Musk sometimes still calls it Twitter. We've
Speaker 14: joked on the Eline podcast that we should call tweets
Speaker 14: exes instead of tweets, but it has.
Speaker 12: Yet to take off.
Speaker 13: Okay, So, staying with kind of the tech realm, you
Speaker 13: also write about a fight against the DOJ and its
Speaker 13: anti trust head or new head, Gail Slater, versus Google
Speaker 13: and Google Chrome.
Speaker 14: Yeah, so this is in certain ways a continuation of
Speaker 14: a feud that was kind of heating up during the
Speaker 14: Biden administration. You've You've had the Department of Justice, you know,
Speaker 14: take on a bunch of big tech companies, including Google
Speaker 14: and Apple, uh trying right now or asking a court
Speaker 14: to potentially even break up Google. When when he announced
Speaker 14: his new head of the Department of Justices Anti Trust division,
Speaker 14: Gail Slater, Trump you know took adopted a pretty uh,
Speaker 14: standoffish tone, talked about sort of big tech having run wild,
Speaker 14: you know, basically leaving little doubt that this is not
Speaker 14: going to go away. The DOJ and the DOJ's Anti
Speaker 14: Trust Division under the sort of Trump leadership is probably
Speaker 14: not going to just completely back off these tech companies. Now,
Speaker 14: we'll see what happens with the FTC. Trumps has nominated
Speaker 14: someone there and they're two. There is a suggestion that
Speaker 14: at least in tech, the Trump administration doesn't want to
Speaker 14: sort of go easy, doesn't want to adopt a pose
Speaker 14: that's like completely friendly to industry. So this fight we've
Speaker 14: seen we're in for years, looks looks safe to continue.
Speaker 4: I feel like we're covering the really important ones, and
Speaker 4: that has to do with dog Man and Paddington Bear,
Speaker 4: and also Kendrick Lamar and Drake.
Speaker 12: Yeah.
Speaker 14: I mean, I think the dog Man Paddington dispute is
Speaker 14: the one that all everyone on Wall Street will be
Speaker 14: watching come January and February.
Speaker 4: Get the live blog ready, Get the live blog ready.
Speaker 10: When the movies come out.
Speaker 14: I mean, you know again, these are two children's movies,
Speaker 14: you know, one a continuation of the Paddington franchise. One
Speaker 14: the beginning the first dog Man film, and you couldn't
Speaker 14: have two more different superheroes. One is very well spoken
Speaker 14: and well dressed. The other is nonverbal and have a toilet.
Speaker 14: So my children are excited about it. And of course
Speaker 14: you know there is a potential business story here. Both
Speaker 14: of these could be pretty big movies. And so not
Speaker 14: a direct feud, but a feud for mind.
Speaker 13: Share, okay, and then kenchall Lamar and Drake. I thought
Speaker 13: that feud was a twenty twenty four what's happening next year?
Speaker 14: So the feud in twenty twenty four was sort of
Speaker 14: playing out on Spotify and on YouTube, and it was
Speaker 14: kind of an artistic feud, a rap battle or a
Speaker 14: series of rap battles.
Speaker 10: What we have now is a.
Speaker 14: Potential for a courtroom feud, which is maybe not as
Speaker 14: fun as the as a rap version, but Drake filing
Speaker 14: in a court basically announcing his intention to go after
Speaker 14: both Spotify and UMG, the record label. And the idea
Speaker 14: here is that UMG was improperly promoting Hendrick's side of
Speaker 14: the feud. It's a potential racketeering thing. I don't know
Speaker 14: how realistic this is from a legal perspective and how
Speaker 14: how likely courts are are going to be to go
Speaker 14: along with this, but just to say that this dispute
Speaker 14: is not going anywhere, all right.
Speaker 4: It is the FED meeting this week, we get our
Speaker 4: last FED decision of twenty twenty four, so we kind
Speaker 4: of saved the very timely few that could happen in
Speaker 4: twenty twenty five. And that of course is between the
Speaker 4: President elect and j Powell. Fed share that's on your list.
Speaker 14: Yeah, just kind of a long simmering feud that we
Speaker 14: saw play out during the last Trump presidency. You know,
Speaker 14: Trump campaigned on having really low interest rates. You wouldn't
Speaker 14: believe how low these interest rates are going to be.
Speaker 14: And Powell meanwhile has basically been signaling that whatever interest
Speaker 14: rate cuts are going to happen, you know, the FED
Speaker 14: still thinks there's inflation, you know, and it seems almost
Speaker 14: inevitable that there's going to be at least continued tension
Speaker 14: if not something hotter.
Speaker 4: Can I just ask you, did you leave a lot
Speaker 4: on the cutting table? Like were there feuds where people like.
Speaker 14: You're watching many other feuds And I'll just throw a
Speaker 14: few others out. You've got Zin the tobacco pouch versus
Speaker 14: ALP Tucker Carlson's anti wol pouches.
Speaker 6: You've got of.
Speaker 14: Course, sports betting against sports washing, watching crocs against Birkenstocks,
Speaker 14: Love Is Blind cast members against Love's blond producers. I
Speaker 14: could keep going, but as I said, it's going to
Speaker 14: be a feud filled twenty five.
Speaker 4: Hey listen before you go. Yeah, I can feel it
Speaker 4: already in the air. Having said that, before we go,
Speaker 4: The current Elon Inc. Podcast is out, and we mentioned
Speaker 4: it in the introduction. Mister Musco's to Washington and to
Speaker 4: Paris and to mar A Lago. It's so funny. Was
Speaker 4: it a football game over the weekend and there was
Speaker 4: a picture of Elon and his pick for Defense Secretary
Speaker 4: and then there was I think Elon and it almost
Speaker 4: looked like his head was pasted in. It almost didn't
Speaker 4: look real, But I believe he was there.
Speaker 3: Yeah, Yeah, he was there.
Speaker 14: And he has been basically going most of the places
Speaker 14: that Trump goes.
Speaker 10: And you know, for a month or two we've.
Speaker 14: Been sort of speculating on and you know, Kenny's two
Speaker 14: guys with these huge egos, Uh, you hang out with
Speaker 14: each other, can they stand being not the not the
Speaker 14: biggest fish in the room? And and it seems like
Speaker 14: the answer is yes. You know, Elon Musk so far
Speaker 14: anyway has has been able to hang with Trump and
Speaker 14: and play second fiddle, and Trump has been able, uh
Speaker 14: to put up with you know what amounts to a
Speaker 14: like a new house guest or a new a new
Speaker 14: guest who's just sort of always hanging around and who's
Speaker 14: offering support, cheerleading and I suppose uh some policy ideas.
Speaker 4: All right, interesting stuff, great lit list, made for a
Speaker 4: fun read and a fun discussion. Max, so appreciate it.
Speaker 4: Max Chafkin, columnist at Bloomberg Business, Beeak co host and
Speaker 4: the Elon Inc.
Speaker 10: Podcast.
Speaker 4: Catch it wherever you find your podcast. You can also
Speaker 4: find it uh at Bloomberg dot com, and as we mentioned,
Speaker 4: Max is the author of the contrarian Peter Teel and
Speaker 4: Silicon Valley's Pursuit of Power.
Speaker 2: This is the Bloomberg Bus Business Week podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Applecarplay and
Speaker 2: the Android Auto with the Bloomberg Business app. You can
Speaker 2: also listen live on Amazon Alexa from our flagship New
Speaker 2: York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 4: We wrap up our year ahead look with something that
Speaker 4: garnered a lot of attention last year, Travel and tourism interested.
Speaker 4: Globe trotting is at an all time high, but so
Speaker 4: is over tourism. There have been local protests in Barcelona,
Speaker 4: Venice and Majorca, Spain, while Sicily is facing a tourism
Speaker 4: induced water crisis. It's not only where one can go,
Speaker 4: but really where one should go.
Speaker 5: We'll get into where you should go in just a bit,
Speaker 5: but first, before booking any trip, the first thing worth
Speaker 5: looking at, I think for a lot of people is
Speaker 5: how much is it going to cost? Kayak is one
Speaker 5: company that has all that data at its fingertips. For more,
Speaker 5: we were joined by the CEO of Kayak, Steve Hafner.
Speaker 15: For twenty twenty five. Search interest on Kayak is about
Speaker 15: equal to twenty two twenty four, which is a relieving
Speaker 15: thing for everyone in the history because twenty twenty four
Speaker 15: was a really great year in the travel business, and
Speaker 15: going into the back half of this year, a lot
Speaker 15: of people were nervous about what twenty twenty five would
Speaker 15: look like.
Speaker 5: But so far, our.
Speaker 15: Travel demand is held firm. Airfares are down a little bit,
Speaker 15: so price is a little bit down and that's helping
Speaker 15: to prop up demand. But the overall headline is it's
Speaker 15: good news. Two other friends underneath that. The first is
Speaker 15: just business class or premium seats are up nineteen percent
Speaker 15: year every year, which tells you that consumers are willing
Speaker 15: to pay up. And then in terms of where people
Speaker 15: are going, Asia is on sale and it's on fire.
Speaker 15: You know, three of the top ten destinations on Kayak
Speaker 15: right now are in Asia.
Speaker 4: Where specifically is Japan still pretty hot?
Speaker 5: It's Japan, So Carol, you got it. Japan is on sale.
Speaker 15: So if you look at exchange rates, I'm kind of
Speaker 15: an exchange rate junkie. There's one hundred and fifty four
Speaker 15: y in too the US dollar right now two years
Speaker 15: ago one hundred and five, So basically everything's thirty five
Speaker 15: percent off, including air. So you know, if you look
Speaker 15: at travel and ted Soporo is up thirty one percent
Speaker 15: on Kayak. In terms of query volume, Osaka twelve percent.
Speaker 15: And it's not just the exchange rate, it's social media.
Speaker 15: So if you're on TikTok or Instagram, which I admittedly
Speaker 15: am not, you cannot escape seeing a great video of
Speaker 15: someone enjoying themselves in Japan, and that's driving a lot
Speaker 15: of consumer interest to go there.
Speaker 4: Hey, I am curious how deep you dig steve into
Speaker 4: your demographic data because you mentioned that really strong in
Speaker 4: terms of travel trends, and you say business class tickets,
Speaker 4: premium class tickets that people are paying up for. Is
Speaker 4: it because they're getting a deal or because they're paying
Speaker 4: up for it? So I'm just trying to get an idea,
Speaker 4: is that they're really wealthy that are traveling and it's
Speaker 4: not across the board.
Speaker 15: No, I think people are just splurging more on experiences.
Speaker 15: We do see a little bit of a difference between
Speaker 15: millennials and Gen Z versus older generations in terms of
Speaker 15: how they travel. So millennials and Gen Z they're much
Speaker 15: more likely to have flexibility in their travel planning, and
Speaker 15: they're willing to use tools like Kayak Explore, which less
Speaker 15: you set a budget and find travel dates and save
Speaker 15: money on airfare that way and reinvest that into the
Speaker 15: actual in market experience, whereas older generations like me families,
Speaker 15: we have fixed travel dates. We want to make sure
Speaker 15: that flying experience is perfect, so that means, hey, we
Speaker 15: want to know where we're siding, we want to board first,
Speaker 15: we want extra leg room, we want a good at
Speaker 15: airport experience. You know, that's kind of where that growth
Speaker 15: is coming from on the premium side.
Speaker 13: What about the older generations and it's just how they
Speaker 13: use technology to plan their vacations. What are the biggest
Speaker 13: changes that you're seeing in that, Well.
Speaker 15: I think the older technology, So the older generations buy
Speaker 15: and large if they're affluent, are still using travel agents.
Speaker 15: You know, there's still over twenty thousand travel agents who
Speaker 15: do bespoke travel planning for those people. Everyone else has
Speaker 15: already migrated online, and not just online, but they're starting
Speaker 15: to migrate tour is these AI assistants, which is what
Speaker 15: everyone in the travel industry now is kind of holding
Speaker 15: their breath to see how that changes, because up until
Speaker 15: now you've had to download an app or go to
Speaker 15: a website like kayak and do a search yourself. Now,
Speaker 15: to be able to speak to intelligent AI agent and
Speaker 15: have them do all the work for you, it's pretty awesome, So,
Speaker 15: you know, and I think we're a lot closer to
Speaker 15: that than than you know, a lot of people believe there.
Speaker 4: Was a period I feel like where sustainability and thinking
Speaker 4: about trips and their impact on the environment was appealing
Speaker 4: eco tourism. Are you continue to see people book those
Speaker 4: kinds of trips.
Speaker 15: You know, there's a lot more people who say they're
Speaker 15: impacted by that than what we actually observe on the
Speaker 15: on the website and on the app, you know. So
Speaker 15: we do show people what's an eco friendly flight for example,
Speaker 15: that you know, it's point of a newer airplane, but
Speaker 15: people don't seem to be willing to pay more.
Speaker 5: For those flights.
Speaker 15: So they're still mainly driven by the price point of
Speaker 15: the air airfare or the experience. But I think there
Speaker 15: is a demographic that that's very important to them, pically
Speaker 15: on hotels. So we do have sustainability badges on hotels
Speaker 15: do we think do a good job right limiting their
Speaker 15: footprint and people do seem, you know, where they're going
Speaker 15: to stay, someplace to change their booking behavior to one
Speaker 15: that's more sustainable.
Speaker 4: Hey, Steve, before we go, Emily kind of nailed it.
Speaker 4: You're in a boat, aren't you.
Speaker 5: Well, I'm on my floating office here in Miami yet.
Speaker 4: Okay, we're just having some fun with you. That would
Speaker 4: be my ideal office from a boating and that view. Yeah, exactly, Steve. V. Well,
Speaker 4: Happy New Year and happy holiday. CEO of Kayak, Steve
Speaker 4: Hafner joining us there from Miami. Yeah, I think it's
Speaker 4: interesting you hear and still continue to see a lot
Speaker 4: of people traveling post pandemic.
Speaker 13: That Japan is incredible. I have multiple friends that are
Speaker 13: going or have gone in the last year.
Speaker 4: And you're like, yeah, I know about that exchange rate stuff.
Speaker 12: Yeah, it's just a little bit.
Speaker 2: This is the Bloomberg Business Week Podcast. Listen live each
Speaker 2: weekday starting at two pm Eastern on Applecarplay and the
Speaker 2: Android Auto with the Bloomberg Business app. You can also
Speaker 2: listen live on Amazon Alexa from our flagship New York
Speaker 2: station Just Say Alexa played Bloomberg eleven thirty.
Speaker 4: Okay, so we just learned that Kayaks applied our pursuits
Speaker 4: team some two and a half billion custom polled data
Speaker 4: points to help create an immersive feature to calculate the
Speaker 4: costs for flights and hotels on the twenty five best
Speaker 4: places to check out this year. It's all in the
Speaker 4: Year Ahead issue of Bloomberg BusinessWeek magazine, which you can
Speaker 4: check out on the Bloomberg and at Bloomberg dot com.
Speaker 5: It's a record setting nineteen pages in the magazine with
Speaker 5: a beautiful immersive feature on Algeria. Two new hotspots to
Speaker 5: prioritize in Spain, an unlikely story about a billionaire creating
Speaker 5: a new system for conservation, and some decadent hotels on
Speaker 5: the island of Principe. Ideas for your next great coolcasion
Speaker 5: and the next great museums to travel for cat.
Speaker 4: Me and let's go now, all right. Nikki Eckstein is
Speaker 4: the travels are for Bloomberg Pursuits, and she first breaks
Speaker 4: down the partnership with Kayak.
Speaker 10: This is a multi year effort. I kid you not.
Speaker 16: I've been trying to make this happen for forever, and
Speaker 16: finally this year I convinced Kayak to give us their
Speaker 16: greatest minds in their data science department, who turned no
Speaker 16: fewer than two point five billion data points.
Speaker 10: That's amazing.
Speaker 16: All of them are pricing insights on both hotels and
Speaker 16: flights that allow you to go to our digital interactive,
Speaker 16: choose your nearest airport and figure out what it will
Speaker 16: cost you to visit all twenty five of these places
Speaker 16: every month of the year from your hometown.
Speaker 5: Okay, my flight prices are set for New York City.
Speaker 16: So you should be able to see both accurate month
Speaker 16: by month estimates on what it will take to fly
Speaker 16: to any one of our twenty five destinations, including suggested
Speaker 16: layovers in places where that's required, as well as month
Speaker 16: by month hotel pricing estimates for luxury hotels, because we
Speaker 16: know that's how we roll.
Speaker 4: Oh my god, this is so cool.
Speaker 10: Thank you guys.
Speaker 4: All right, so we can play around with this, we
Speaker 4: can figure out what it's going to cost us. Tell
Speaker 4: us about the list this year. Because you are looking
Speaker 4: at all the time. You usually come up with like
Speaker 4: kind of an annual review right like you do this.
Speaker 16: We are cracking hotel openings, restaurant openings, museum openings, cultural events,
Speaker 16: infrastructure investments, I mean, you name it. We're tracking it
Speaker 16: year round. And whatever is most inspiring, whatever is most significant,
Speaker 16: most game changing, is what rises to the top this
Speaker 16: year's twenty five places, and it's almost every.
Speaker 10: Continent, not Onntarctica.
Speaker 16: But we are really well spread geographically around the world
Speaker 16: with lots of inspiration no matter where you're from.
Speaker 5: Where is a place that you can go on a budget.
Speaker 5: We're talking Bloomberg pursuits here, so we're not always watching.
Speaker 10: The wall at How adventurous are you dad?
Speaker 5: As well?
Speaker 10: I've got two ideas for you, right hear.
Speaker 16: The Colombian Amazon is a place where your money can
Speaker 16: go very.
Speaker 10: Far because there's not a lot out there.
Speaker 16: But there is a small company called Nomad that's starting
Speaker 16: to create these community owned, revenue shared model lodges.
Speaker 10: The first of ten.
Speaker 16: Is just opening now, and it's these beautiful treehouse style bungalows,
Speaker 16: really modern construction, super lux but at the same time
Speaker 16: bare bones and immersed in nature. If all of those
Speaker 16: things can possibly be true at the same time, I
Speaker 16: promise you they are.
Speaker 10: And you go, you know, kayaking.
Speaker 16: Down tributaries of the Amazon to look for pink dolphins
Speaker 16: and you can hang in a hammock to sleep it
Speaker 16: all off when you're too tired, and it just seems
Speaker 16: so dreamy.
Speaker 10: But the prices are very reasonable. It's like less than
Speaker 10: three hundred dollars a night.
Speaker 5: Yeah, I'm looking the best time to go May in June, November,
Speaker 5: and December. December is of course going to be pricey,
Speaker 5: but yeah, three hundred bucks for a hotel per night,
Speaker 5: and the flight price is cheap two three hundred ninety
Speaker 5: dollars to get there.
Speaker 10: I mean, there you have it.
Speaker 16: That's your budget, your budget idea, right then, and there,
Speaker 16: and then if you want to go a little bit
Speaker 16: farther away, may I propose the island of Princypay, which
Speaker 16: we mentioned up top. Where it's people talk about it
Speaker 16: like Africa's Galapagos, okay, but.
Speaker 10: Most people don't even know where it is. Right.
Speaker 16: It's off the western coast of Africa, equatorial so you know,
Speaker 16: a little bit farther north than your average safari, warm weather,
Speaker 16: temperate year round, a lot of marine activity.
Speaker 10: So like tropical fish apparently, fish that.
Speaker 16: Walk on land, what like relics of the dinosaur era.
Speaker 16: It's this place is absolutely wild to the landscapes.
Speaker 10: You would not believe.
Speaker 5: She called Charles Darwin fish that walk on land. January February.
Speaker 4: You know the fish is yeah.
Speaker 10: Sorry, yeah, it's all of those things.
Speaker 5: Very cool. January February. At the Times to go a
Speaker 5: medium price to hotel two hundred and eight dollars average
Speaker 5: flight price. That's the hard part. It's going to be
Speaker 5: pricey eighteen.
Speaker 16: Hundred books depending on where you're coming from. Depending where
Speaker 16: you're coming from, excuse me, that's from New York. Yeah,
Speaker 16: I mean if you're flying from like Madrid or something,
Speaker 16: it's going to be.
Speaker 10: A lot cheaper good points.
Speaker 5: It's in New York Center.
Speaker 4: Love the south of France. You've got something on there.
Speaker 10: Yeah, I don't know.
Speaker 4: Can we go there cheaply? I'm like looking around, I
Speaker 4: guess there are times we can go.
Speaker 16: Well, I'll tell you it's going to be a lot
Speaker 16: more affordable than Sand Trapez. And the place that we're
Speaker 16: talking about is Cap Ferrey and it is a beautiful
Speaker 16: kind of imagine what Montak would have been like decades ago.
Speaker 4: I used to go to Montalk like, so you can
Speaker 4: tell me exactly what I love. I said, it was
Speaker 4: really sleepy and lovely and it was so sweet.
Speaker 16: So that's exactly what you're going to get in this
Speaker 16: In this little we're talking about the Bay of Arachnan.
Speaker 16: I may be pronouncing that completely wrong, and I'm so
Speaker 16: sorry to the French people who are listening, if so,
Speaker 16: but it's a small community on inlet with fishermen huts
Speaker 16: and colorful houses and places where you can eat seafood
Speaker 16: that's just been plucked out of the sea. Little boutique
Speaker 16: hotels that are terribly spelled you'll see in the package.
Speaker 16: We even call them out for their ridiculous stylings of
Speaker 16: their names I'm not even gonna dare pronounce.
Speaker 10: And a new company called Iconic.
Speaker 16: House that does really really cool villa rentals for way
Speaker 16: less than.
Speaker 10: You would spend in classic rivi or a destination.
Speaker 5: It kind of looked like they were named by Grimes
Speaker 5: and Elon Musk.
Speaker 16: You know, when they name their it's like the parentheses
Speaker 16: and accent marks all over the place, which is why
Speaker 16: I won't try to say.
Speaker 10: What they are called.
Speaker 4: Love Love, Love where else? What's your What was a
Speaker 4: surprise to you as you were putting this list together
Speaker 4: that you think my was.
Speaker 16: A lot of funk a place that might surprise a
Speaker 16: lot of folks. Well, you know, we've got places on
Speaker 16: this list that are kind of humble in my mind,
Speaker 16: like Lexington, Kentucky, which we're calling as kind of the
Speaker 16: next Nashville. And then we have places that just really
Speaker 16: kind of elude the common radar, like the Seychelles, which
Speaker 16: are actually, if you're in the know, a very classic
Speaker 16: luxury destination where hotels command really high for figure prices.
Speaker 16: But there's a spate of new openings there that are
Speaker 16: drying kind of new appeal, new flight access, things like
Speaker 16: that that are really kind of putting that on the
Speaker 16: map for a wider number of travelers than before. Seychelles
Speaker 16: is super high on my list, and if you look
Speaker 16: at the pictures in the digital package you'll know why.
Speaker 10: Yeah, books out of.
Speaker 5: This world, Carol. If you don't want to fly anywhere,
Speaker 5: you can step out of this building. You can turn
Speaker 5: right to walk a few blocks in the north and
Speaker 5: you can go to the upper east side, which yes,
Speaker 5: is on the list.
Speaker 10: Here, Nikki, call me crazy?
Speaker 6: Help?
Speaker 3: Are you crazy?
Speaker 4: Help?
Speaker 10: I know? Well, here's the thing, you guys.
Speaker 16: The Frick Museum is reopening. The hotel scene is getting
Speaker 16: a major glow up. The Surrey has just been brought
Speaker 16: back to life by Corinthia, which is top, top notch
Speaker 16: with an import from Miami called Casatua. It's a restaurant
Speaker 16: that is like the hottest place.
Speaker 10: On earth right now. So dare to correct me, but
Speaker 10: I'm pretty sure it's right.
Speaker 4: And the era the flights are really cheap.
Speaker 10: Zero Dodgar.
Speaker 16: There for one hundred bucks, right, But don't dare at
Speaker 16: the price of dinner right there is that.
Speaker 4: No hotels are not cheap.
Speaker 10: No, not around here. But I promise you'll have a
Speaker 10: great night out.
Speaker 4: Where do you want to go in twenty twenty five
Speaker 4: real quickly.
Speaker 16: Ooh, you know what, strange but true. I really want
Speaker 16: to go to Rotterdam. New museums that are opening there
Speaker 16: looks just like Amsterdam, but way under the radar.
Speaker 10: It looks fabulous.
Speaker 4: You are fabulous. Nicki Xtein Travels are here at Bloomberg Pursuits.
Speaker 4: I highly recommend you head to Bloomberg dot com and
Speaker 4: check this out. Nikki, thank you so much.
Speaker 10: This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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