1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple, Cockley and Android 4 00:00:17,160 --> 00:00:20,520 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:23,760 Speaker 1: you get your podcasts, or watch US live on YouTube. 6 00:00:25,200 --> 00:00:28,440 Speaker 2: The US threatens that the war with Iran is going 7 00:00:28,480 --> 00:00:31,600 Speaker 2: to intensify. We heard from President Trump in a post 8 00:00:31,680 --> 00:00:35,800 Speaker 2: earlier today saying that the US has unlimited ammunition and that. 9 00:00:36,159 --> 00:00:38,640 Speaker 3: The US has quote plenty of time. 10 00:00:38,720 --> 00:00:42,159 Speaker 2: This came right before a briefing from senior US officials, 11 00:00:42,159 --> 00:00:45,559 Speaker 2: including the Defense Secretary Pete Hegseth, who was confirming that 12 00:00:45,600 --> 00:00:48,520 Speaker 2: the US and Israel have hit more than fifteen thousand 13 00:00:48,640 --> 00:00:53,239 Speaker 2: targets and says that Aron's one way drone capability is 14 00:00:53,280 --> 00:00:55,160 Speaker 2: now down ninety five percent. 15 00:00:56,400 --> 00:00:59,640 Speaker 4: That the United States is decimating the radical Iranian rehim's 16 00:00:59,680 --> 00:01:02,880 Speaker 4: military in a way the world has never seen before. 17 00:01:03,880 --> 00:01:09,080 Speaker 4: Never before has a modern capable military which Iran used 18 00:01:09,080 --> 00:01:15,480 Speaker 4: to have been so quickly destroyed and made combat ineffective, devastated. 19 00:01:16,400 --> 00:01:17,880 Speaker 5: It's about to get more devastating. 20 00:01:17,880 --> 00:01:21,360 Speaker 6: According to the Secretary of Defense, this will be the 21 00:01:21,400 --> 00:01:23,360 Speaker 6: most intense day of bombing yet and if you read 22 00:01:23,360 --> 00:01:26,600 Speaker 6: the President's post on truth Social they are consistent. We 23 00:01:26,680 --> 00:01:31,440 Speaker 6: have quote unparalleled firepower, the President writes, unlimited ammunition, and 24 00:01:31,520 --> 00:01:34,520 Speaker 6: plenty of time. He says, watch what happens to these 25 00:01:34,680 --> 00:01:40,319 Speaker 6: deranged scum bags today. Jennifer Welch has been leading our 26 00:01:40,360 --> 00:01:44,840 Speaker 6: coverage here at Bloomberg Economics, our chief geoeconomics analyst, when 27 00:01:44,840 --> 00:01:47,760 Speaker 6: it comes to not only the status of the war 28 00:01:47,840 --> 00:01:50,080 Speaker 6: on the ground here, but it's impact on the economy 29 00:01:50,080 --> 00:01:52,720 Speaker 6: and of course energy prices. Jenny, it's great to see 30 00:01:52,720 --> 00:01:55,280 Speaker 6: you and welcome back to Balance of Power. What do 31 00:01:55,360 --> 00:01:57,800 Speaker 6: we make of this moment that we're in, with a 32 00:01:57,840 --> 00:02:01,960 Speaker 6: market that's fearing going long into the weekend, What might 33 00:02:02,000 --> 00:02:03,440 Speaker 6: happen in the next couple of days. 34 00:02:04,560 --> 00:02:07,440 Speaker 7: Well, I think it's really introducing questions about what President 35 00:02:07,480 --> 00:02:09,480 Speaker 7: Trump had said earlier in the week that he expected 36 00:02:09,480 --> 00:02:12,240 Speaker 7: that the war would end very soon, although he had 37 00:02:12,280 --> 00:02:15,160 Speaker 7: caveated probably not this week. It looks like it might 38 00:02:15,200 --> 00:02:17,920 Speaker 7: not be next week either. But I think what we're 39 00:02:17,960 --> 00:02:22,280 Speaker 7: seeing here is a continuation of defiance on both sides, 40 00:02:22,320 --> 00:02:24,200 Speaker 7: because not only do you have the US saying that 41 00:02:24,680 --> 00:02:28,120 Speaker 7: we're continuing to escalate strikes on Iran, that we are 42 00:02:28,200 --> 00:02:32,640 Speaker 7: continuing to move into even closer targeting of targets and 43 00:02:32,720 --> 00:02:35,200 Speaker 7: assets there, even though many of them have already been hit. 44 00:02:35,480 --> 00:02:37,520 Speaker 7: But you also have Iran coming out with this very 45 00:02:37,560 --> 00:02:41,280 Speaker 7: defiant statement from its new Supreme leader promising to keep 46 00:02:41,320 --> 00:02:44,560 Speaker 7: the Strait of Hormu's close and to open new fronts 47 00:02:44,560 --> 00:02:47,280 Speaker 7: in the conflict if the United States and Israel continue 48 00:02:47,320 --> 00:02:49,680 Speaker 7: to expand. And I think what all of that suggests 49 00:02:49,760 --> 00:02:52,799 Speaker 7: is that the timeline for this war remains very uncertain, 50 00:02:53,080 --> 00:02:55,280 Speaker 7: but it certainly doesn't look like there's an end in 51 00:02:55,360 --> 00:02:56,040 Speaker 7: sight for now. 52 00:02:57,480 --> 00:03:00,840 Speaker 2: Well, we're talking about potential escalation. We heard earlier this 53 00:03:00,880 --> 00:03:03,840 Speaker 2: week from President Trump that potentially we could see the 54 00:03:04,600 --> 00:03:08,600 Speaker 2: US hit electricity infrastructure if the Strait of Hermus remains closed. 55 00:03:08,639 --> 00:03:12,280 Speaker 2: We now have reporting that Israel is going after oil infrastructure. Jenny, 56 00:03:12,400 --> 00:03:15,480 Speaker 2: just how big of an escalation would this be if 57 00:03:15,520 --> 00:03:21,440 Speaker 2: we see continued attacks against these energy infrastructure assets. 58 00:03:21,760 --> 00:03:22,239 Speaker 3: Well, I think it. 59 00:03:22,840 --> 00:03:25,800 Speaker 7: In addition to that, there's the question that was raised 60 00:03:25,800 --> 00:03:28,600 Speaker 7: by a secretary of where Hegsas works earlier when he 61 00:03:28,639 --> 00:03:32,160 Speaker 7: commented that Iran's new Supreme leader had been injured by strikes. 62 00:03:32,160 --> 00:03:35,080 Speaker 7: So in addition to the targeting of infrastructure, there's questions 63 00:03:35,080 --> 00:03:38,440 Speaker 7: about continued targeting of the leadership and how that could 64 00:03:38,520 --> 00:03:41,640 Speaker 7: or could not harden Iran's resolve here. But I think 65 00:03:41,680 --> 00:03:44,360 Speaker 7: the other question is to what extent are the US 66 00:03:44,360 --> 00:03:47,080 Speaker 7: and Israel still aligned on the tactics of this where 67 00:03:47,160 --> 00:03:49,880 Speaker 7: we recall earlier this week there was some questioning in 68 00:03:50,040 --> 00:03:54,120 Speaker 7: Washington of those Israeli strikes on oil infrastructure in Iran, 69 00:03:54,680 --> 00:03:57,279 Speaker 7: and I think there is a risk here of divergence 70 00:03:57,320 --> 00:03:59,680 Speaker 7: between these two partners that up until now have been 71 00:03:59,680 --> 00:04:01,880 Speaker 7: operating largely in lockstep. 72 00:04:03,240 --> 00:04:07,240 Speaker 6: What would be the impact on energy prices, for instance, 73 00:04:07,360 --> 00:04:10,280 Speaker 6: I don't know what the status of the strait would be, 74 00:04:10,400 --> 00:04:13,440 Speaker 6: But if the United States feels that it's reached its objectives, 75 00:04:13,440 --> 00:04:19,440 Speaker 6: say we find that enriched uranium, or we decapitate the regime, 76 00:04:19,480 --> 00:04:23,080 Speaker 6: whatever it is that we qualify as victory, and Israel 77 00:04:23,279 --> 00:04:28,479 Speaker 6: continues its campaign, do we have the same factor for 78 00:04:28,680 --> 00:04:30,840 Speaker 6: energy prices that we have now? 79 00:04:31,760 --> 00:04:32,280 Speaker 5: I think we. 80 00:04:32,279 --> 00:04:35,320 Speaker 7: Would expect that if Israel continues fighting on which is 81 00:04:35,440 --> 00:04:38,800 Speaker 7: very plausible. You know, aims on both sides in terms 82 00:04:38,800 --> 00:04:40,919 Speaker 7: of the US and Israel have been somewhat vague, but 83 00:04:41,000 --> 00:04:43,640 Speaker 7: At both times, both leaders have talked about something as 84 00:04:43,760 --> 00:04:47,280 Speaker 7: drastic as regime change or massive instability in Iran, which 85 00:04:47,320 --> 00:04:50,000 Speaker 7: obviously hasn't happened yet. So if Israel were to continue 86 00:04:50,000 --> 00:04:52,880 Speaker 7: fighting in pursuit of that aim, then we would expect 87 00:04:52,880 --> 00:04:55,479 Speaker 7: Iran would continue to hold shipping in the strait of 88 00:04:55,480 --> 00:04:58,320 Speaker 7: her moves at risk and continue to attempt to pose 89 00:04:58,440 --> 00:05:01,440 Speaker 7: risks to other energy infrastruction sure in the region. And 90 00:05:01,520 --> 00:05:03,600 Speaker 7: what that means for oil markets is that if we 91 00:05:03,680 --> 00:05:06,960 Speaker 7: see these disruptions persist, we're already, as you mentioned, almost 92 00:05:07,000 --> 00:05:10,000 Speaker 7: fourteen days into this conflict, for several more weeks, we 93 00:05:10,040 --> 00:05:12,640 Speaker 7: could not only see oil continue to tick up where 94 00:05:12,640 --> 00:05:14,680 Speaker 7: it is now a little bit above one hundred dollars 95 00:05:14,680 --> 00:05:18,159 Speaker 7: a barreal, but rise even higher. We've estimated that if 96 00:05:18,200 --> 00:05:21,240 Speaker 7: the disruptions persist for closer to three months, you could 97 00:05:21,279 --> 00:05:24,120 Speaker 7: see oil well above one hundred and fifty dollars a barrel, 98 00:05:24,160 --> 00:05:26,360 Speaker 7: maybe even closer do we estimate around one hundred and 99 00:05:26,400 --> 00:05:27,400 Speaker 7: sixty four dollars. 100 00:05:29,160 --> 00:05:31,919 Speaker 2: What about the potential impacts of the actions that the 101 00:05:31,960 --> 00:05:35,120 Speaker 2: Trump administration is already taking to try to mitigate some 102 00:05:35,200 --> 00:05:39,080 Speaker 2: of the supply disruptions, including overnight announcing that they're going 103 00:05:39,120 --> 00:05:42,640 Speaker 2: to ease some sanctions related to Russian oil, issuing a 104 00:05:42,720 --> 00:05:46,360 Speaker 2: second temporary waiver for buyers to purchase some of those 105 00:05:46,400 --> 00:05:49,720 Speaker 2: cargoes that are already at sea, Jenny, should we expect 106 00:05:50,080 --> 00:05:53,200 Speaker 2: more of this type of action from the administration? And 107 00:05:53,240 --> 00:05:56,600 Speaker 2: I'm also wondering how our regional allies are viewing a 108 00:05:56,680 --> 00:05:59,280 Speaker 2: move like this that does ease some of that pain 109 00:05:59,360 --> 00:06:02,120 Speaker 2: when it comes to Russia. 110 00:06:02,200 --> 00:06:04,200 Speaker 7: You know, some of these moves, including the waving of 111 00:06:04,240 --> 00:06:07,920 Speaker 7: the Jones Act, the release of strategic petroleum reserves, it's 112 00:06:07,960 --> 00:06:10,200 Speaker 7: definitely going to have a cushioning effect. But in the 113 00:06:10,240 --> 00:06:12,560 Speaker 7: long run, what's really going to drive markets and drive 114 00:06:12,640 --> 00:06:16,840 Speaker 7: energy supplies is gaining access back to all of those 115 00:06:16,880 --> 00:06:19,480 Speaker 7: oil and gas supplies that are right now locked up 116 00:06:19,560 --> 00:06:22,120 Speaker 7: in the Gulf that in some cases they've turned off 117 00:06:22,160 --> 00:06:25,720 Speaker 7: production because storage tanks have become so full since they 118 00:06:25,760 --> 00:06:28,800 Speaker 7: can't export any of them. I think the other thing 119 00:06:28,839 --> 00:06:31,520 Speaker 7: to keep in mind is that those sanctions waivers were 120 00:06:31,600 --> 00:06:35,000 Speaker 7: largely into response what many countries were already starting to do. 121 00:06:35,440 --> 00:06:37,960 Speaker 7: Recognizing there's a pinsion supplies in the Middle East, they 122 00:06:37,960 --> 00:06:40,440 Speaker 7: were already starting to look to that Russian oil and 123 00:06:40,480 --> 00:06:43,359 Speaker 7: it's probably going to have limited impact here in the US. 124 00:06:43,680 --> 00:06:44,599 Speaker 3: The Jones Act. 125 00:06:44,440 --> 00:06:46,840 Speaker 7: Will probably take a few cents off, you know, the 126 00:06:46,839 --> 00:06:49,640 Speaker 7: cost of a take of gasoline, but even that will 127 00:06:49,640 --> 00:06:52,640 Speaker 7: be relatively minimal. And then the release of the strategic 128 00:06:52,640 --> 00:06:56,680 Speaker 7: petroleum reserves. The IDEA has been coordinating about four hundred 129 00:06:56,680 --> 00:07:00,280 Speaker 7: million gallons across the world. That will take time time 130 00:07:00,360 --> 00:07:03,719 Speaker 7: to hit in terms of win. Those reserves are released, 131 00:07:03,760 --> 00:07:07,000 Speaker 7: the tempo at which they are released and will only 132 00:07:07,200 --> 00:07:10,000 Speaker 7: amount to about twenty days worth of supply from the 133 00:07:10,040 --> 00:07:12,680 Speaker 7: Straight of her moves. So if this conflict ends in 134 00:07:12,720 --> 00:07:14,480 Speaker 7: the next few days, you know, before we hit the 135 00:07:14,480 --> 00:07:17,600 Speaker 7: twenty day mark, it will have a good effect. If 136 00:07:17,640 --> 00:07:19,960 Speaker 7: it extends much past that, then it will really only 137 00:07:20,000 --> 00:07:22,880 Speaker 7: be a temporary comfort, all right. 138 00:07:22,840 --> 00:07:25,960 Speaker 6: Jenny, We understand according to Bloomberg News reporting that several 139 00:07:26,000 --> 00:07:28,800 Speaker 6: back channels have opened just in the past couple of 140 00:07:28,840 --> 00:07:32,600 Speaker 6: days between Tehran and US allies. When it comes to 141 00:07:32,680 --> 00:07:37,239 Speaker 6: reopening the Strait, what could this result in an actual 142 00:07:37,360 --> 00:07:40,000 Speaker 6: cease fire or an agreement to open the Straight or 143 00:07:40,040 --> 00:07:41,960 Speaker 6: could it be an agreement to open the Straight for 144 00:07:42,000 --> 00:07:43,480 Speaker 6: only select nations. 145 00:07:44,480 --> 00:07:46,120 Speaker 7: I think at the moment, what we're probably seeing as 146 00:07:46,160 --> 00:07:48,920 Speaker 7: a mix of both. There's probably efforts to try and 147 00:07:49,120 --> 00:07:52,560 Speaker 7: breach a longer cease fire, but the two sides are 148 00:07:52,680 --> 00:07:54,520 Speaker 7: very far apart on what that would entail. You know, 149 00:07:54,560 --> 00:07:57,320 Speaker 7: for example, Iron wants to see guarantees that it won't 150 00:07:57,320 --> 00:08:00,280 Speaker 7: be reattacked, something that the US and Israel probably aren't 151 00:08:00,280 --> 00:08:02,880 Speaker 7: willing to offer, and it wants to see sanctions relief, 152 00:08:02,880 --> 00:08:05,200 Speaker 7: which I think will also be a stretch. The US 153 00:08:05,240 --> 00:08:08,000 Speaker 7: may want to see Iran make guarantees on its nuclear 154 00:08:08,040 --> 00:08:10,480 Speaker 7: missile program, which it wasn't willing to do before the 155 00:08:10,520 --> 00:08:12,559 Speaker 7: war and probably is even less willing to do now. 156 00:08:12,960 --> 00:08:14,440 Speaker 7: And in the meantime, I think we see a lot 157 00:08:14,440 --> 00:08:17,600 Speaker 7: of countries trying to engage Tehran directly to seek the 158 00:08:17,840 --> 00:08:20,520 Speaker 7: ability for their own ships or ships that are headed 159 00:08:20,560 --> 00:08:23,400 Speaker 7: towards them to gain access so that they can get 160 00:08:23,400 --> 00:08:24,440 Speaker 7: their energy supplies. 161 00:08:26,880 --> 00:08:31,440 Speaker 2: All right, Jennifer Welch, Bloomberg Economics Chief geo Economics Analysts, 162 00:08:31,480 --> 00:08:33,360 Speaker 2: thank you so much for all of your insights, and 163 00:08:33,400 --> 00:08:35,600 Speaker 2: we do want to extend the conversation by bringing in 164 00:08:35,600 --> 00:08:39,439 Speaker 2: today's political panel. That's Genie Shanzano, Democracy Visiting Fellow at 165 00:08:39,440 --> 00:08:42,960 Speaker 2: Harvard Kennedy School's Ash Center, and a Bloomberg Politics contributor, 166 00:08:43,000 --> 00:08:45,880 Speaker 2: as well as Rosemary Betchy, partner at Brownstein Height and 167 00:08:45,920 --> 00:08:48,880 Speaker 2: Republican strategist. Rosemary, I want to start with you and 168 00:08:48,920 --> 00:08:50,800 Speaker 2: pick up on what we were just discussing when it 169 00:08:50,800 --> 00:08:54,760 Speaker 2: comes to oil prices that are now hitting Americans, including 170 00:08:54,760 --> 00:08:57,440 Speaker 2: when it comes to retail gasoline. How much pressure is 171 00:08:57,480 --> 00:09:00,600 Speaker 2: there on President Trump to pull some of these other 172 00:09:00,800 --> 00:09:04,960 Speaker 2: levers beyond waving some oil sanctions on Russia, but perhaps 173 00:09:04,960 --> 00:09:09,120 Speaker 2: invoking and waving the Jones Act, maybe asking for a 174 00:09:09,120 --> 00:09:11,920 Speaker 2: federal gas tax holiday. How likely is it that we're 175 00:09:11,960 --> 00:09:14,600 Speaker 2: going to see some other moves out of the administration. 176 00:09:16,160 --> 00:09:20,400 Speaker 8: So I think that is your previous guests talked about, 177 00:09:20,480 --> 00:09:24,720 Speaker 8: you know, to the extent that this continues, you know, 178 00:09:25,200 --> 00:09:28,160 Speaker 8: more and more pressure is going to be on the 179 00:09:28,200 --> 00:09:33,000 Speaker 8: president to do to to look at other means of 180 00:09:33,600 --> 00:09:39,960 Speaker 8: reducing you know, the price at the at the pump it. 181 00:09:40,200 --> 00:09:43,720 Speaker 8: You know, the longer this continues, you know, it again 182 00:09:44,000 --> 00:09:48,160 Speaker 8: creates such pressure to do something about it. And particularly 183 00:09:48,200 --> 00:09:51,160 Speaker 8: again as we kind of get towards the midterms, right, 184 00:09:52,320 --> 00:09:55,280 Speaker 8: I think that you know, as we saw it in 185 00:09:55,320 --> 00:09:59,320 Speaker 8: the last election cycle, that you know, Americans aren't feeling 186 00:09:59,360 --> 00:10:04,760 Speaker 8: better off and that you know, they are concerned about affordability, 187 00:10:04,960 --> 00:10:08,080 Speaker 8: and so I do think that, you know, the President 188 00:10:08,080 --> 00:10:13,359 Speaker 8: and others are recognizing that, and I think that ultimately 189 00:10:13,640 --> 00:10:16,160 Speaker 8: they will be looking to do other things to. 190 00:10:16,080 --> 00:10:20,120 Speaker 3: Bring down, you know, the price of gas. Remember during 191 00:10:21,000 --> 00:10:21,839 Speaker 3: the State. 192 00:10:21,600 --> 00:10:24,320 Speaker 8: Of the Union he did talk about how low gas 193 00:10:24,360 --> 00:10:28,520 Speaker 8: prices are. So the last thing you want to see 194 00:10:28,960 --> 00:10:33,040 Speaker 8: is them, you know, climbing higher and higher. 195 00:10:34,960 --> 00:10:37,680 Speaker 6: We want to make note, by the way, that we 196 00:10:37,720 --> 00:10:40,720 Speaker 6: had an update from Sencom and from the Pentagon earlier 197 00:10:40,760 --> 00:10:45,120 Speaker 6: today to learn that two more Americans were killed in 198 00:10:45,240 --> 00:10:49,960 Speaker 6: action after a US refueling airplane crashed in western Iraq. 199 00:10:50,160 --> 00:10:54,880 Speaker 6: All six crew members have died. Initial reports were that 200 00:10:55,040 --> 00:10:57,400 Speaker 6: four of the six had been lost, and we heard 201 00:10:57,840 --> 00:11:01,160 Speaker 6: about the Americans who were this morning from the Chairman 202 00:11:01,160 --> 00:11:03,480 Speaker 6: of the Joint Chiefs of Staff, Gnee dan Kine. It's 203 00:11:03,520 --> 00:11:06,640 Speaker 6: always the first thing that he acknowledges when they hold 204 00:11:06,679 --> 00:11:09,320 Speaker 6: these morning briefings at the Pentagon, before he gets to 205 00:11:09,360 --> 00:11:11,240 Speaker 6: any of the x's and o's, or any of the 206 00:11:11,280 --> 00:11:16,000 Speaker 6: threats against Iran, before he starts taking questions. The Secretary 207 00:11:16,040 --> 00:11:20,800 Speaker 6: of Defense obviously has a very different approach here. Civilian 208 00:11:20,880 --> 00:11:23,880 Speaker 6: leadership a former Fox News personality and of course a 209 00:11:23,960 --> 00:11:27,920 Speaker 6: veteran himself. He spent quite a lengthy period of time 210 00:11:28,040 --> 00:11:31,160 Speaker 6: chastising the press that at least were assembled for this 211 00:11:31,640 --> 00:11:35,720 Speaker 6: morning event, Genie, and he even tried to rewrite some 212 00:11:35,840 --> 00:11:38,559 Speaker 6: of the headlines that he had been seeing, telling them 213 00:11:38,559 --> 00:11:40,240 Speaker 6: how to better do their jobs when. 214 00:11:40,080 --> 00:11:42,520 Speaker 5: It comes to covering the war. It was a long 215 00:11:42,559 --> 00:11:43,360 Speaker 5: time before he. 216 00:11:43,360 --> 00:11:46,800 Speaker 6: Got to Americans who had been injured or perished in battle. 217 00:11:46,800 --> 00:11:49,040 Speaker 5: What do you make of the dichotomy between these two. 218 00:11:50,600 --> 00:11:54,840 Speaker 9: It expresses their concerns right. On the one hand, you 219 00:11:54,920 --> 00:11:59,959 Speaker 9: have Kin who rightly so starts with the horrific death 220 00:12:00,280 --> 00:12:05,560 Speaker 9: and killing of these American soldiers, these American heroes. And 221 00:12:05,760 --> 00:12:08,880 Speaker 9: I listened to that as well, Joe, and his tone 222 00:12:08,960 --> 00:12:13,920 Speaker 9: is absolutely on point. These people are their families. I mean, 223 00:12:13,920 --> 00:12:17,679 Speaker 9: you just think about how horrifying this is. And then 224 00:12:17,840 --> 00:12:21,160 Speaker 9: you flip over to a secretary of Defense or war 225 00:12:21,280 --> 00:12:24,040 Speaker 9: as he likes to talk about, and you see what 226 00:12:24,200 --> 00:12:27,160 Speaker 9: he values and what is most important to him, and 227 00:12:27,240 --> 00:12:30,960 Speaker 9: that is how he and his mission are represented in 228 00:12:31,000 --> 00:12:34,400 Speaker 9: the press. This is a person who has cut off 229 00:12:34,520 --> 00:12:38,920 Speaker 9: the legacy traditional press out of the briefings, thinking that 230 00:12:38,960 --> 00:12:41,720 Speaker 9: if he did that he could control the narrative. He's 231 00:12:41,760 --> 00:12:43,640 Speaker 9: woken up to what we all knew. These are no 232 00:12:43,760 --> 00:12:48,240 Speaker 9: controlling that narrative, and now he is taken to chastising them. 233 00:12:48,600 --> 00:12:51,760 Speaker 9: But the reality is he's doing so at a time 234 00:12:52,240 --> 00:12:55,800 Speaker 9: when he should be mourning the loss of these heroes. 235 00:12:55,840 --> 00:12:59,280 Speaker 9: And I think it just reflects where his interests are 236 00:12:59,600 --> 00:13:02,400 Speaker 9: and where his focus is, and it is not where 237 00:13:02,400 --> 00:13:06,040 Speaker 9: it should be. And I applaud Dan Kine for having 238 00:13:06,240 --> 00:13:09,120 Speaker 9: the right value system and putting that front and center. 239 00:13:10,760 --> 00:13:14,120 Speaker 2: Well, thirteen US service members have been killed since the 240 00:13:14,160 --> 00:13:17,320 Speaker 2: war started. Rosemary, let's get your thoughts here on the 241 00:13:17,320 --> 00:13:21,720 Speaker 2: administration's messaging when it comes to this, but then also 242 00:13:21,880 --> 00:13:27,480 Speaker 2: about what tactical success and objectives look like on the ground, 243 00:13:27,480 --> 00:13:29,280 Speaker 2: because we've been talking about it all week here. 244 00:13:29,440 --> 00:13:30,920 Speaker 3: The markets are watching very closely. 245 00:13:31,000 --> 00:13:34,520 Speaker 2: Everybody is watching very closely on what the potential timeline 246 00:13:34,559 --> 00:13:37,120 Speaker 2: is going to be. And we've heard some mixed signals, 247 00:13:37,160 --> 00:13:39,800 Speaker 2: right President Trump saying that this could be over as 248 00:13:39,840 --> 00:13:42,200 Speaker 2: soon as he wants it to, but then also saying 249 00:13:42,600 --> 00:13:45,199 Speaker 2: in a post earlier today that the US is willing 250 00:13:45,240 --> 00:13:47,360 Speaker 2: to sustain this for as long as it takes. 251 00:13:49,640 --> 00:13:52,920 Speaker 8: So I mean, obviously you know, the goal here is 252 00:13:53,640 --> 00:13:57,280 Speaker 8: to get this over with as quickly as possible. 253 00:13:57,679 --> 00:13:58,760 Speaker 5: I mean, I don't think. 254 00:13:58,679 --> 00:14:02,000 Speaker 8: The goals have changed, tire right. I think the goals 255 00:14:02,280 --> 00:14:06,360 Speaker 8: is to get a regime change in place. 256 00:14:06,480 --> 00:14:09,920 Speaker 3: The goal is not to have boots on the ground. 257 00:14:10,040 --> 00:14:14,080 Speaker 8: And I still think that the administration and the President 258 00:14:14,280 --> 00:14:17,319 Speaker 8: are pushing for this, and I don't think the messaging 259 00:14:17,400 --> 00:14:21,040 Speaker 8: has changed. And maybe we just need to continue to 260 00:14:21,120 --> 00:14:26,760 Speaker 8: remind everybody that this is about keeping Americans safe. This is, 261 00:14:27,000 --> 00:14:31,520 Speaker 8: you know, was part of the President's agenda, and I 262 00:14:31,560 --> 00:14:35,040 Speaker 8: think that we just you know, need to be reminding 263 00:14:35,200 --> 00:14:39,720 Speaker 8: every one of that. And hopefully, you know, this will 264 00:14:39,760 --> 00:14:45,000 Speaker 8: move quickly and we will see a resolution shortly. But 265 00:14:45,040 --> 00:14:48,080 Speaker 8: I do think that there's still a commitment towards, you know, 266 00:14:48,200 --> 00:14:51,240 Speaker 8: making sure there is no boots on the ground, and 267 00:14:51,280 --> 00:14:55,600 Speaker 8: that we resolve this as quickly as possible and we 268 00:14:55,640 --> 00:14:57,040 Speaker 8: do see a regime change here. 269 00:14:58,520 --> 00:14:59,920 Speaker 5: Genny, we only have a minute left. 270 00:15:00,040 --> 00:15:03,360 Speaker 6: I'm taken by this poll from Quinnipiac University that finds 271 00:15:03,360 --> 00:15:06,520 Speaker 6: a whopping number seventy seven percent of Americans think a 272 00:15:06,600 --> 00:15:11,120 Speaker 6: terror attack is likely because of this or in response 273 00:15:11,160 --> 00:15:15,320 Speaker 6: to the military action against Iran. It's more like thirty 274 00:15:15,320 --> 00:15:19,320 Speaker 6: seconds at this point. If such an attack occurs, does 275 00:15:19,360 --> 00:15:22,800 Speaker 6: that strengthen the resolve of the American people or create 276 00:15:22,840 --> 00:15:24,200 Speaker 6: more opposition to the conflict? 277 00:15:26,080 --> 00:15:29,520 Speaker 9: You know, I think it'll strengthen their resolve to defend 278 00:15:29,600 --> 00:15:32,720 Speaker 9: the homeland, But I think it will also underscore what 279 00:15:32,840 --> 00:15:36,920 Speaker 9: a misguided situation we are in at the hands of 280 00:15:36,960 --> 00:15:40,760 Speaker 9: an administration with no clear goals or ability to achieve them, 281 00:15:40,840 --> 00:15:43,400 Speaker 9: in a war that he said he wouldn't start and 282 00:15:43,440 --> 00:15:46,440 Speaker 9: has now gotten us into. And we will have boots 283 00:15:46,440 --> 00:15:47,920 Speaker 9: on the ground because that's the only way you can 284 00:15:47,960 --> 00:15:49,880 Speaker 9: get that nine hundred pounds of uranium out. 285 00:15:51,120 --> 00:15:53,400 Speaker 5: We'll be talking about that if it happens. Genie. 286 00:15:53,520 --> 00:15:57,160 Speaker 6: Great panel, and thank you both. Genie Shanzano and Rosemary Becky. 287 00:15:57,360 --> 00:15:59,520 Speaker 6: Stay with us on Balance of Power. We'll have much 288 00:15:59,520 --> 00:16:00,720 Speaker 6: more coming up after this. 289 00:16:05,040 --> 00:16:08,520 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 290 00:16:08,600 --> 00:16:11,640 Speaker 1: us live weekdays at noon and five pm Eastern on 291 00:16:11,760 --> 00:16:15,000 Speaker 1: Apple Cockway and Android Auto with the Bloomberg Business app. 292 00:16:15,040 --> 00:16:18,080 Speaker 1: You can also listen live on Amazon Alexa from our 293 00:16:18,080 --> 00:16:22,640 Speaker 1: flagship New York station, Just say Alexa, Play Bloomberg eleven thirty. 294 00:16:23,960 --> 00:16:26,960 Speaker 2: Tyler Kendall here in Washington with Joe Matthew and as 295 00:16:27,000 --> 00:16:30,880 Speaker 2: we continue to cover the updates related to the conflict 296 00:16:30,960 --> 00:16:34,840 Speaker 2: with Iran, the idea of artificial intelligence and the battlefield 297 00:16:34,920 --> 00:16:37,880 Speaker 2: keeps coming up in conversations, and we're tracking developments in 298 00:16:37,880 --> 00:16:41,680 Speaker 2: the ongoing dispute between Anthropic and the Pentagon over the 299 00:16:41,720 --> 00:16:45,640 Speaker 2: company's demands for safeguards in exchange for the military using 300 00:16:45,680 --> 00:16:49,160 Speaker 2: its AI tools. The Trump administration moved to designate Anthropic 301 00:16:49,200 --> 00:16:53,080 Speaker 2: a supply chain risk, and Joe now the company is suing. 302 00:16:52,760 --> 00:16:54,680 Speaker 3: Over this, telling a judge earlier. 303 00:16:54,360 --> 00:16:57,480 Speaker 2: This week that it is poised to lose potentially billions 304 00:16:57,520 --> 00:16:59,960 Speaker 2: of dollars in revenue because of the decision. 305 00:17:00,080 --> 00:17:03,120 Speaker 5: Yeah, it could be a massive impact on its business. 306 00:17:03,160 --> 00:17:05,359 Speaker 6: It's a two hundred million dollar contract with the Pentagon, 307 00:17:05,400 --> 00:17:07,760 Speaker 6: but as we've discussed with Mike Shepard before, if you 308 00:17:07,920 --> 00:17:11,600 Speaker 6: unlined all of its operations with every other defense contractor 309 00:17:11,680 --> 00:17:14,200 Speaker 6: or any company that's doing business with the Pentagon. 310 00:17:13,800 --> 00:17:15,479 Speaker 5: That number gets a lot bigger. 311 00:17:15,680 --> 00:17:18,520 Speaker 6: So we did want to update things because this has 312 00:17:18,560 --> 00:17:21,600 Speaker 6: been a dicey week for Anthropic and it's a precedent 313 00:17:21,680 --> 00:17:24,640 Speaker 6: setting moment at the Pentagon and beyond when we start 314 00:17:24,640 --> 00:17:27,800 Speaker 6: looking at the use of artificial intelligence technology. Mike is 315 00:17:27,800 --> 00:17:30,960 Speaker 6: Bloomberg Senior editor for Technology and Strategic Industries, and shep, 316 00:17:30,960 --> 00:17:31,680 Speaker 6: it's great to have. 317 00:17:31,600 --> 00:17:33,840 Speaker 5: You as always here. So we've got the lawsuit. 318 00:17:33,840 --> 00:17:35,720 Speaker 6: But the fact is, as I understand it at least, 319 00:17:35,760 --> 00:17:38,600 Speaker 6: and I'd love to know what you're hearing, Anthropic is 320 00:17:38,640 --> 00:17:40,560 Speaker 6: still being used and it could be for the next 321 00:17:40,560 --> 00:17:42,840 Speaker 6: six months by the Pentagon, even as we wage war 322 00:17:42,880 --> 00:17:43,520 Speaker 6: against Iran. 323 00:17:43,800 --> 00:17:45,480 Speaker 10: It is still being used. And there really is the 324 00:17:45,520 --> 00:17:48,440 Speaker 10: conundrum in a way that the Pentagon, on the one hand, 325 00:17:48,520 --> 00:17:52,520 Speaker 10: is saying that because you won't buy by our terms, 326 00:17:52,560 --> 00:17:55,560 Speaker 10: the government's terms, you are now a supply chain risk, 327 00:17:55,920 --> 00:17:58,800 Speaker 10: and yet we need your technology for the next six 328 00:17:58,880 --> 00:18:03,040 Speaker 10: months until we find a suitable replacement. There is an 329 00:18:03,040 --> 00:18:06,440 Speaker 10: inherent contradiction, and that is one that has been highlighted 330 00:18:06,520 --> 00:18:10,159 Speaker 10: in the government's case. And there are some companies that 331 00:18:10,200 --> 00:18:12,520 Speaker 10: are not only waiting in the wings, but really stepping 332 00:18:12,560 --> 00:18:15,080 Speaker 10: forward to try to perhaps take some of that business 333 00:18:15,520 --> 00:18:19,440 Speaker 10: open AI most obviously and perhaps grazingly certainly an Anthropics 334 00:18:19,520 --> 00:18:24,480 Speaker 10: view stepped in hours after President Donald Trumpman Defense Secretary 335 00:18:24,520 --> 00:18:28,199 Speaker 10: Pete Hegseth ordered that the company be declared a supply 336 00:18:28,320 --> 00:18:32,479 Speaker 10: chain risks and debarred from federal business. They stepped in 337 00:18:32,520 --> 00:18:37,879 Speaker 10: with their own their own version of proposal for classified work. 338 00:18:38,240 --> 00:18:41,320 Speaker 10: And then we have also seen Xai Elon Musk's AI 339 00:18:41,440 --> 00:18:44,800 Speaker 10: venture step in with a plan and approval to do 340 00:18:44,840 --> 00:18:47,960 Speaker 10: classified work as well, but neither is as fully advanced 341 00:18:48,280 --> 00:18:50,600 Speaker 10: as Anthropic has been with its clawed tool. 342 00:18:50,800 --> 00:18:53,840 Speaker 2: So there's these discussions with some other AI tools and 343 00:18:53,840 --> 00:18:56,720 Speaker 2: companies in the Pentagon. There's now these two lawsuits that 344 00:18:56,760 --> 00:18:59,280 Speaker 2: Anthropic has brought, I believe one in California, one year 345 00:18:59,600 --> 00:19:03,879 Speaker 2: in Lawrington. Are there any discussions between the company and 346 00:19:04,040 --> 00:19:05,040 Speaker 2: the Pentagon that we. 347 00:19:05,080 --> 00:19:07,640 Speaker 3: Know about outside of the legal matter? 348 00:19:07,720 --> 00:19:07,840 Speaker 2: Here? 349 00:19:07,960 --> 00:19:10,840 Speaker 3: Is there another viable off ramp for Tyler? 350 00:19:11,000 --> 00:19:13,760 Speaker 10: This is really the heart of the matter because in 351 00:19:13,920 --> 00:19:17,080 Speaker 10: every single other dispute, whether it be an anti trust case, 352 00:19:17,160 --> 00:19:20,439 Speaker 10: you name it, the parties always try to talk behind 353 00:19:20,440 --> 00:19:24,520 Speaker 10: the scenes to see if they can maybe diffuse things 354 00:19:24,600 --> 00:19:26,879 Speaker 10: and not have to go all the way through the 355 00:19:26,920 --> 00:19:30,080 Speaker 10: whole rigmarole of the courts and then maybe lead to 356 00:19:30,119 --> 00:19:32,800 Speaker 10: an outcome that is less than satisfying. To be clear, 357 00:19:32,840 --> 00:19:37,000 Speaker 10: the Pentagon wants to keep using Anthropics tools. The defense 358 00:19:37,040 --> 00:19:42,360 Speaker 10: personnel who have been employing them through classified and unclassified 359 00:19:42,880 --> 00:19:47,800 Speaker 10: platforms really like them. They're adaptable in much the same 360 00:19:47,800 --> 00:19:50,200 Speaker 10: way that across the business world those tools have been 361 00:19:50,240 --> 00:19:53,879 Speaker 10: embraced in a lot of different ways. So too in 362 00:19:53,920 --> 00:19:57,960 Speaker 10: the government, and yet there is this conflict over the terms. Now, 363 00:19:58,320 --> 00:20:02,840 Speaker 10: as for talks, we interview the Pentagon official who's been 364 00:20:02,920 --> 00:20:05,640 Speaker 10: leading these discussions, and at the beginning of the week 365 00:20:05,720 --> 00:20:09,240 Speaker 10: he flatly said that Nope, talks are over. We're moving on. 366 00:20:09,520 --> 00:20:12,560 Speaker 10: But this is the Trump administration, and we know that 367 00:20:12,800 --> 00:20:15,280 Speaker 10: never really doesn't always mean never. 368 00:20:15,560 --> 00:20:18,360 Speaker 6: You know, I wonder if the Pentagon has a point, Mike, 369 00:20:18,400 --> 00:20:21,160 Speaker 6: and we get to the philosophical or sort of moral ethical. 370 00:20:22,600 --> 00:20:23,399 Speaker 5: Problem here. 371 00:20:23,920 --> 00:20:27,320 Speaker 6: They want a product that they can use as they 372 00:20:27,400 --> 00:20:29,719 Speaker 6: see fit. They don't want a company telling them how 373 00:20:29,720 --> 00:20:32,240 Speaker 6: to use it. That would be no different than Boeing 374 00:20:32,320 --> 00:20:35,400 Speaker 6: or Lockheed or General Dynamics or raytheon. Right, We're selling 375 00:20:35,480 --> 00:20:39,280 Speaker 6: you missiles, but you're going to use those missiles as 376 00:20:39,320 --> 00:20:42,359 Speaker 6: you see fit. We can't attach strings to them. Why 377 00:20:42,400 --> 00:20:43,520 Speaker 6: should AI be different. 378 00:20:43,520 --> 00:20:46,000 Speaker 10: Well, it's a great question, and I'm glad you brought 379 00:20:46,080 --> 00:20:49,800 Speaker 10: up the analogy between other defense contractors, because the ones 380 00:20:49,840 --> 00:20:53,680 Speaker 10: that are providing those sorts of armaments for kinetic purposes 381 00:20:54,119 --> 00:20:55,960 Speaker 10: like a bomb or a missile. They don't have a 382 00:20:55,960 --> 00:20:58,560 Speaker 10: little asterisks there saying you know, you got to come 383 00:20:58,560 --> 00:21:00,840 Speaker 10: back to us if this use case comes up. It 384 00:21:01,000 --> 00:21:04,320 Speaker 10: doesn't happen in this situation though, with Dario Amide, this 385 00:21:04,480 --> 00:21:08,119 Speaker 10: chief executive of Anthropic is arguing is that, look, this 386 00:21:08,240 --> 00:21:12,320 Speaker 10: technology is still so nascent and error prone, we do 387 00:21:12,400 --> 00:21:16,040 Speaker 10: not trust it for using it. Yet in fully autonomous weapons, 388 00:21:16,119 --> 00:21:19,360 Speaker 10: it's like we can't go there. And the Pentagon is saying, look, 389 00:21:19,359 --> 00:21:21,760 Speaker 10: there is no such thing. We don't do that. Yet 390 00:21:21,880 --> 00:21:24,000 Speaker 10: there is always a human involved in the chain. And 391 00:21:24,080 --> 00:21:27,640 Speaker 10: yet Anthropic is concerned that that could be a slippery slope. 392 00:21:27,720 --> 00:21:30,120 Speaker 10: And then there is the other point that Anthropic has 393 00:21:30,200 --> 00:21:32,480 Speaker 10: really drawn a red line on, and that is surveillance. 394 00:21:32,680 --> 00:21:35,520 Speaker 10: And their concern is that this technology could also be 395 00:21:35,640 --> 00:21:41,199 Speaker 10: used somehow intentionally or unintentionally to conduct domestic surveillance on 396 00:21:41,280 --> 00:21:44,240 Speaker 10: American citizens, and that's also a red line for them. 397 00:21:44,600 --> 00:21:48,640 Speaker 10: And again, so when you think about Boeing or Raytheum, 398 00:21:48,800 --> 00:21:50,919 Speaker 10: the analogy works, but only up to a point. 399 00:21:51,000 --> 00:21:52,520 Speaker 5: If you hear Dario aid. 400 00:21:53,200 --> 00:21:56,680 Speaker 2: So, given that the dispute over these use cases has 401 00:21:56,680 --> 00:21:58,920 Speaker 2: not been resolved, it's my understanding that there is now 402 00:21:58,960 --> 00:22:04,000 Speaker 2: the six month faise out for the technology. How doable 403 00:22:04,200 --> 00:22:07,000 Speaker 2: is that? And could we see the legal matter resolved 404 00:22:07,160 --> 00:22:09,520 Speaker 2: faster than that? What's the timeline we're looking at? 405 00:22:09,640 --> 00:22:13,720 Speaker 10: Well, the timeline is really fluid now because it's unclear 406 00:22:13,840 --> 00:22:16,920 Speaker 10: what happens if when one of the judges in California 407 00:22:17,040 --> 00:22:21,240 Speaker 10: we're here in Washington issues a temporary restraining order. Does 408 00:22:21,280 --> 00:22:24,240 Speaker 10: that stop the clock altogether? And then as far as 409 00:22:24,280 --> 00:22:29,560 Speaker 10: the adaptation to another provider, another technology, say open Ai 410 00:22:29,840 --> 00:22:33,440 Speaker 10: XII or even Google, which this week has been ported 411 00:22:33,480 --> 00:22:37,440 Speaker 10: on to provide unclassified work for the Pentagon, it would 412 00:22:37,480 --> 00:22:39,960 Speaker 10: take some time. We have talked to experts who do 413 00:22:40,040 --> 00:22:43,600 Speaker 10: not only procurement but specialize in technology with the Pentagon, 414 00:22:43,640 --> 00:22:46,600 Speaker 10: and they said, look, it would be a little bit messy, 415 00:22:46,640 --> 00:22:49,520 Speaker 10: but eventually you could find something that would plug in. Now, 416 00:22:49,560 --> 00:22:52,280 Speaker 10: the question, though Tyler, is would the user experience and 417 00:22:52,320 --> 00:22:55,439 Speaker 10: the effectiveness of the technology be quite the same in 418 00:22:55,480 --> 00:22:56,000 Speaker 10: this sense? 419 00:22:56,600 --> 00:22:56,960 Speaker 3: All right? 420 00:22:57,000 --> 00:23:01,480 Speaker 2: Bloomberg's Michael Sheppard, Senior editor for Technology and Strategic Industries. 421 00:23:01,520 --> 00:23:03,919 Speaker 2: He always has the latest on this mic. Thank you 422 00:23:04,320 --> 00:23:06,760 Speaker 2: and Joe. This is perhaps the perfect way to bridge 423 00:23:07,560 --> 00:23:11,080 Speaker 2: domestic and foreign policy the Pentagon is the federal government's 424 00:23:11,200 --> 00:23:14,840 Speaker 2: largest tech buyer, and as you were asking in it 425 00:23:14,920 --> 00:23:17,879 Speaker 2: that question, the Pentagon maintains that it doesn't want to 426 00:23:18,000 --> 00:23:22,240 Speaker 2: use Anthropics tools and in those ways that Anthropic is 427 00:23:22,280 --> 00:23:25,080 Speaker 2: looking for those safeguards, but at this point it's not 428 00:23:25,200 --> 00:23:26,000 Speaker 2: enough for the company. 429 00:23:26,359 --> 00:23:29,919 Speaker 6: That's absolutely right, and whether this is something that progresses 430 00:23:29,960 --> 00:23:32,040 Speaker 6: from here has yet to be seen. In the next 431 00:23:32,080 --> 00:23:36,680 Speaker 6: six months, as this technology is unwound, maybe a new 432 00:23:36,680 --> 00:23:40,159 Speaker 6: precedent will be set. But it's an interesting moment that 433 00:23:40,200 --> 00:23:43,840 Speaker 6: we're in right now with this obviously conflict with Iran 434 00:23:43,840 --> 00:23:46,679 Speaker 6: that Anthropic is now tied into. It's happening at a 435 00:23:46,720 --> 00:23:52,000 Speaker 6: time when domestic terror threats have returned to the conversation. 436 00:23:52,119 --> 00:23:54,879 Speaker 6: I alluded earlier to this Quinnipiac pull seventy seven percent 437 00:23:54,920 --> 00:23:57,919 Speaker 6: of Americans think there will be a terror attack on 438 00:23:57,960 --> 00:24:00,520 Speaker 6: American soil because of this conflict, and it's coming at 439 00:24:00,520 --> 00:24:03,320 Speaker 6: a time when the Department of Homeland Security is closed. 440 00:24:03,800 --> 00:24:07,040 Speaker 6: I believe we're at the one month mark tomorrow. The 441 00:24:07,040 --> 00:24:11,239 Speaker 6: first paycheck for TSA is being missed today. The timing here, 442 00:24:11,840 --> 00:24:14,280 Speaker 6: Tyler is potentially terrible, and. 443 00:24:14,160 --> 00:24:18,120 Speaker 2: It's two hundred and six thousand employees in the Department 444 00:24:18,160 --> 00:24:20,800 Speaker 2: of Homeland Security, and you're starting to see the calls 445 00:24:20,800 --> 00:24:23,639 Speaker 2: from Republicans in particular that they have to get a 446 00:24:23,680 --> 00:24:26,520 Speaker 2: move on when it comes to funding DHS amid as 447 00:24:26,560 --> 00:24:29,719 Speaker 2: you're outlining, there is a renewed threat when it comes 448 00:24:29,800 --> 00:24:32,640 Speaker 2: to Iran. We had President Trump earlier today one headline 449 00:24:32,680 --> 00:24:36,000 Speaker 2: crossing the terminal about sleeper cells, though he says the 450 00:24:36,119 --> 00:24:38,600 Speaker 2: US knows where they all are and they're shouldn't be 451 00:24:38,640 --> 00:24:39,000 Speaker 2: our concern. 452 00:24:39,160 --> 00:24:41,160 Speaker 6: Yeah, he was talking to Fox News, I believe about 453 00:24:41,160 --> 00:24:43,199 Speaker 6: that's first time we ever heard a number on that. 454 00:24:43,240 --> 00:24:45,359 Speaker 6: But we thought we'd compare notes with Nathan Dean before 455 00:24:45,359 --> 00:24:46,919 Speaker 6: we get into the weekend here, just to have a 456 00:24:46,960 --> 00:24:49,840 Speaker 6: sense of how long maybe this goes. He is, of 457 00:24:49,880 --> 00:24:53,600 Speaker 6: course a Bloomberg Intelligence senior US policy analyst. Nathan, it's 458 00:24:53,640 --> 00:24:55,680 Speaker 6: great to have you back here on I just wanted 459 00:24:55,680 --> 00:24:57,080 Speaker 6: to pull you in on the day that the first 460 00:24:57,200 --> 00:25:02,040 Speaker 6: full paycheck is being missed to ask this new pressure 461 00:25:02,040 --> 00:25:03,240 Speaker 6: point might make a difference. 462 00:25:03,480 --> 00:25:04,360 Speaker 5: So it's not right now. 463 00:25:04,440 --> 00:25:06,040 Speaker 11: I mean, if you go to social media, you'll see 464 00:25:06,040 --> 00:25:09,439 Speaker 11: the Senate Republicans and Senate Democrats almost say the same message. 465 00:25:09,600 --> 00:25:11,800 Speaker 11: They'll retweet a long line at airport and say that 466 00:25:11,840 --> 00:25:14,760 Speaker 11: the other party is responsible for this. Yes, and you know, 467 00:25:14,800 --> 00:25:17,119 Speaker 11: we do think that the ASA sickouts are going to 468 00:25:17,160 --> 00:25:19,480 Speaker 11: bring a resolution to this. Well, we're just not in 469 00:25:19,480 --> 00:25:21,879 Speaker 11: the stage yet of the negotiations to look there. I 470 00:25:21,880 --> 00:25:25,040 Speaker 11: haven't been really many negotiations whatsoever, and so we think 471 00:25:25,080 --> 00:25:27,040 Speaker 11: this probably takes another week, if not a little bit 472 00:25:27,080 --> 00:25:30,320 Speaker 11: longer to get to some type of resolution. But really 473 00:25:30,359 --> 00:25:34,160 Speaker 11: whatever it's not, I mean, whatever that resolution is, you know. 474 00:25:34,400 --> 00:25:36,840 Speaker 11: Essentially we think that when this is done, we should 475 00:25:36,880 --> 00:25:38,720 Speaker 11: be good through September thirtieth and that should be it 476 00:25:38,760 --> 00:25:39,640 Speaker 11: for the rest of the shutdowns. 477 00:25:40,040 --> 00:25:43,240 Speaker 2: So that's funny for DJESS. We also know that relatedly, 478 00:25:43,440 --> 00:25:46,679 Speaker 2: Congress is preparing for a supplemental request from the Pentagon 479 00:25:46,800 --> 00:25:50,240 Speaker 2: to help sustain what is happening in the Middle East. 480 00:25:50,359 --> 00:25:53,600 Speaker 2: Do we have any idea how big of a supplemental 481 00:25:53,640 --> 00:25:56,919 Speaker 2: request this is going to be and how easily or 482 00:25:57,000 --> 00:25:58,960 Speaker 2: not so easily it would get past Congress. 483 00:25:59,080 --> 00:26:01,879 Speaker 11: So Bloomberg News is reported this idea of fifty billion dollars, 484 00:26:01,920 --> 00:26:04,800 Speaker 11: and we've done some analysis showing what that would potentially 485 00:26:04,800 --> 00:26:07,360 Speaker 11: look like in terms of munitions. Some people said north 486 00:26:07,359 --> 00:26:09,320 Speaker 11: of one hundred billion, maybe one hundred and fifty billion. 487 00:26:09,320 --> 00:26:11,920 Speaker 11: But we would question clients to say, is that any 488 00:26:11,960 --> 00:26:14,119 Speaker 11: single time you see a number here, there's always going 489 00:26:14,160 --> 00:26:16,280 Speaker 11: to be somebody else saying, look, we need to attach something. 490 00:26:16,560 --> 00:26:19,240 Speaker 11: And we've seen reporting that says the fifteen billion dollars 491 00:26:19,280 --> 00:26:21,600 Speaker 11: worth of farmer Aid could be attached to this. So 492 00:26:21,640 --> 00:26:23,600 Speaker 11: where I'm going with this is that we do think 493 00:26:23,600 --> 00:26:25,399 Speaker 11: this number is going to be close to one hundred 494 00:26:25,400 --> 00:26:27,760 Speaker 11: billion or just north of one hundred billion. But the 495 00:26:27,840 --> 00:26:29,919 Speaker 11: question is is it going to go through reconciliation or 496 00:26:29,960 --> 00:26:31,840 Speaker 11: is it going to go through normal order. If this 497 00:26:31,920 --> 00:26:34,440 Speaker 11: bill is very small, say fifty to one hundred billion 498 00:26:34,480 --> 00:26:36,840 Speaker 11: farm made plus I ran supplemental, and it goes through 499 00:26:36,840 --> 00:26:39,680 Speaker 11: normal order, we think this can actually pass if it 500 00:26:39,720 --> 00:26:43,600 Speaker 11: goes through reconciliation. Every lobbyist in town, every policymaker is 501 00:26:43,600 --> 00:26:46,119 Speaker 11: going to say we'll attach something. Next thing, you know, 502 00:26:46,160 --> 00:26:48,840 Speaker 11: blows up to a trillion dollar package and with a 503 00:26:48,880 --> 00:26:51,119 Speaker 11: margin of vote of one in the House of Representatives, 504 00:26:51,119 --> 00:26:51,680 Speaker 11: we just don't. 505 00:26:51,520 --> 00:26:53,119 Speaker 5: Think that would happen. It's almost like you've seen this 506 00:26:53,119 --> 00:26:54,600 Speaker 5: happen before. Nathan. 507 00:26:54,640 --> 00:26:55,920 Speaker 6: I've got to ask you just quickly. We've got a 508 00:26:55,920 --> 00:26:58,760 Speaker 6: minute left next week Save Act. John Thune says, I'm 509 00:26:58,760 --> 00:27:00,399 Speaker 6: bringing it to the floor. It doesn't have the votes, 510 00:27:00,720 --> 00:27:04,280 Speaker 6: but we're talking about days upon days of debate probably. 511 00:27:04,359 --> 00:27:06,240 Speaker 11: I mean, look, Senator Thune has to go through the 512 00:27:06,240 --> 00:27:08,720 Speaker 11: motions of bringing it to the floor. This is something 513 00:27:08,760 --> 00:27:11,880 Speaker 11: the Republicans and especially President Trump want to have happened. 514 00:27:12,119 --> 00:27:14,280 Speaker 11: But Senator Thune obviously has said he doesn't have the 515 00:27:14,320 --> 00:27:16,280 Speaker 11: votes to change the filmbuster. And at the end of 516 00:27:16,320 --> 00:27:18,919 Speaker 11: the day, the Save Act would require sixty votes to pass, 517 00:27:19,400 --> 00:27:21,280 Speaker 11: and we just don't see that happening anytime soon. 518 00:27:21,320 --> 00:27:23,840 Speaker 6: All Right, You got it straight from Nathan Dean, and 519 00:27:23,880 --> 00:27:27,000 Speaker 6: that's the authority around here in the DC Bureau. Bloomberg 520 00:27:27,119 --> 00:27:31,280 Speaker 6: Intelligence Senior US policy analyst, Nathan, thank you trying to 521 00:27:31,280 --> 00:27:33,440 Speaker 6: get a weekend because we're going to pick this up 522 00:27:33,600 --> 00:27:36,600 Speaker 6: all over again on Monday. I'm Joe Matthew alongside Tyler 523 00:27:36,680 --> 00:27:38,960 Speaker 6: Kendall in Washington, and we appreciate your spending some time 524 00:27:38,960 --> 00:27:41,440 Speaker 6: with us here on the Friday edition of Ballots of Power. 525 00:27:41,640 --> 00:27:43,119 Speaker 5: A special conversation ahead. 526 00:27:43,160 --> 00:27:44,960 Speaker 6: We'll look at the markets as we always do with 527 00:27:45,040 --> 00:27:48,639 Speaker 6: Charlie Pellett, but a special conversation with a former CIA 528 00:27:48,800 --> 00:27:52,800 Speaker 6: agent who is getting into private enterprise to seize on 529 00:27:52,800 --> 00:27:54,720 Speaker 6: the very technology we were talking to Schep about, and 530 00:27:54,720 --> 00:27:55,760 Speaker 6: that's AI right. 531 00:27:55,600 --> 00:27:59,280 Speaker 2: From CIA to CEO. We're going to have those details 532 00:27:59,359 --> 00:27:59,920 Speaker 2: up next. 533 00:28:00,080 --> 00:28:02,080 Speaker 5: Day with us on Balance of Power. We'll have much 534 00:28:02,119 --> 00:28:03,320 Speaker 5: more coming up after this. 535 00:28:08,680 --> 00:28:12,160 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 536 00:28:12,240 --> 00:28:16,160 Speaker 1: us live weekdays at noon and five pm Eastern on Applecarclay, 537 00:28:16,200 --> 00:28:19,240 Speaker 1: and Android Auto with the Bloomberg Business App. Listen on 538 00:28:19,280 --> 00:28:22,560 Speaker 1: demand wherever you get your podcasts, or watch us live 539 00:28:22,640 --> 00:28:24,080 Speaker 1: on YouTube. 540 00:28:24,720 --> 00:28:26,600 Speaker 5: Thank you for being with us on the Friday edition. 541 00:28:26,680 --> 00:28:28,919 Speaker 6: We promised you an important conversation and we bring it 542 00:28:28,920 --> 00:28:31,359 Speaker 6: to you now with the headline on the terminal tech 543 00:28:31,440 --> 00:28:35,440 Speaker 6: savvy spies step out of the shadows and into the boardroom. 544 00:28:36,080 --> 00:28:41,480 Speaker 6: It's a fascinating moment for former CIA officers to bring 545 00:28:41,520 --> 00:28:45,240 Speaker 6: their experience in the field to bear in the private sector, 546 00:28:45,240 --> 00:28:48,400 Speaker 6: and in this case, in the market for security focused 547 00:28:48,560 --> 00:28:52,080 Speaker 6: tech firms. There's one in particular that was launched not 548 00:28:52,280 --> 00:28:56,360 Speaker 6: very long ago by Brian Karba, former CIA officer, and 549 00:28:56,680 --> 00:28:59,640 Speaker 6: it's a company that is actually harnessing the very technology 550 00:28:59,640 --> 00:29:02,400 Speaker 6: that we were discussing earlier with Mike Shepherd and that's 551 00:29:02,560 --> 00:29:05,400 Speaker 6: artificial intelligence. And a site is the name of the company, 552 00:29:05,760 --> 00:29:08,520 Speaker 6: and that former CIA officer Brian Carbos with us right now. 553 00:29:08,520 --> 00:29:10,600 Speaker 5: Brian, welcome to Bloomberg TV and Radio. It's great to 554 00:29:10,600 --> 00:29:10,920 Speaker 5: see you. 555 00:29:11,080 --> 00:29:11,760 Speaker 12: Thanks for having me. 556 00:29:12,080 --> 00:29:13,920 Speaker 5: We should start by thanking you for your service. 557 00:29:13,920 --> 00:29:16,440 Speaker 6: And I know that from the if you tell me 558 00:29:16,480 --> 00:29:18,240 Speaker 6: you'd have to kill me file, there's probably not a 559 00:29:18,280 --> 00:29:20,080 Speaker 6: lot you could tell us about your resume. But you 560 00:29:20,120 --> 00:29:23,680 Speaker 6: were part of the CIA Jawbreaker program. You're the real 561 00:29:23,760 --> 00:29:28,000 Speaker 6: deal and you had the opportunity in that experience to 562 00:29:28,080 --> 00:29:31,840 Speaker 6: realize what you didn't have but wanted. Now it's your 563 00:29:31,880 --> 00:29:35,520 Speaker 6: opportunity to create that technology to help our men and 564 00:29:35,560 --> 00:29:38,920 Speaker 6: women in the field. And a site is compiling massive 565 00:29:39,040 --> 00:29:43,160 Speaker 6: amounts of data to do what with in combat? 566 00:29:43,400 --> 00:29:45,400 Speaker 5: Yeah, I think it's a great question for me. 567 00:29:45,480 --> 00:29:48,479 Speaker 12: Going back to that experience in Afghanistan after nine to eleven, 568 00:29:48,960 --> 00:29:50,760 Speaker 12: obviously speed was essential. 569 00:29:50,800 --> 00:29:53,560 Speaker 5: We had to move very quickly. The threats were compounding. 570 00:29:53,960 --> 00:29:55,760 Speaker 12: All of us who were on those first waves in 571 00:29:55,760 --> 00:29:59,240 Speaker 12: Afghanistan knew that our country was at risk. The attacks 572 00:29:59,240 --> 00:30:02,080 Speaker 12: were going to malt apply and what mattered was trying 573 00:30:02,120 --> 00:30:04,360 Speaker 12: to get the information, not just fast enough, but also 574 00:30:04,400 --> 00:30:06,720 Speaker 12: to have the type of context that you needed to 575 00:30:06,760 --> 00:30:08,720 Speaker 12: have the type of insight that you needed to sort 576 00:30:08,760 --> 00:30:11,840 Speaker 12: of make decisions quickly and act on those decisions. And 577 00:30:11,880 --> 00:30:14,760 Speaker 12: for sure, everyone across the intelligence community and the Special 578 00:30:14,760 --> 00:30:16,920 Speaker 12: Operations Forces of which I was a member on the 579 00:30:17,000 --> 00:30:19,600 Speaker 12: Jawbreaker team was moving with the best of intentions, but 580 00:30:19,640 --> 00:30:23,200 Speaker 12: you just had massive, massive amounts of information piling up, 581 00:30:23,240 --> 00:30:25,600 Speaker 12: and again everyone was searching for that context. So we 582 00:30:25,640 --> 00:30:28,280 Speaker 12: found ourselves moving from village to village, town to town, 583 00:30:28,360 --> 00:30:31,680 Speaker 12: province to province, oftentimes acting on quick tips. But what 584 00:30:31,720 --> 00:30:35,280 Speaker 12: we needed was that sort of combine coalesce provision of 585 00:30:35,640 --> 00:30:38,640 Speaker 12: contextualize information that gave us the type of insight we 586 00:30:38,680 --> 00:30:41,480 Speaker 12: needed to act. So an Andesite to your point, we're 587 00:30:41,480 --> 00:30:44,960 Speaker 12: now using artificial intelligence to move at speed to deal 588 00:30:45,000 --> 00:30:47,280 Speaker 12: with the volumes of data that we have. So in 589 00:30:47,320 --> 00:30:49,880 Speaker 12: this case, it's not the special operations troops around the 590 00:30:49,920 --> 00:30:52,440 Speaker 12: ground as we were back after nine to eleven, but 591 00:30:52,480 --> 00:30:54,800 Speaker 12: it's the cyber defenders who are working so hard to 592 00:30:54,800 --> 00:30:57,960 Speaker 12: protect our public service and private sector institutions from the 593 00:30:58,000 --> 00:30:59,360 Speaker 12: growing threat of cyber attacks. 594 00:30:59,640 --> 00:31:03,000 Speaker 2: How much has the landscape shifted since you were on 595 00:31:03,600 --> 00:31:07,480 Speaker 2: the ground to today with the advent of AI, how 596 00:31:07,600 --> 00:31:10,720 Speaker 2: is that really changing the picture when it comes to 597 00:31:10,960 --> 00:31:14,880 Speaker 2: the US's preparedness and its response to threats dramatically? 598 00:31:14,960 --> 00:31:17,480 Speaker 12: I think in this case, now you see that AI 599 00:31:17,640 --> 00:31:21,960 Speaker 12: is really the attacker. So you're seeing those types of 600 00:31:22,080 --> 00:31:26,040 Speaker 12: either activist groups or hostile countries who are using AI 601 00:31:26,120 --> 00:31:29,600 Speaker 12: and the offense. I think that's changed the landscape quite dramatically. 602 00:31:29,920 --> 00:31:33,000 Speaker 12: And when you're dealing with entities who really aren't bound 603 00:31:33,040 --> 00:31:36,480 Speaker 12: by law, they're not bound by moral norms, they're not 604 00:31:36,600 --> 00:31:38,800 Speaker 12: bound by ethics as we are in the West, then 605 00:31:38,960 --> 00:31:41,960 Speaker 12: it's certainly AI can provide an opportunity for the attackers 606 00:31:42,000 --> 00:31:44,280 Speaker 12: to move quite quickly, and the challenge is now on 607 00:31:44,320 --> 00:31:46,040 Speaker 12: the defense. We have to move with that same type 608 00:31:46,040 --> 00:31:47,040 Speaker 12: of speed and alacrity. 609 00:31:47,200 --> 00:31:50,160 Speaker 6: Just to digress for one moment into a conversation or 610 00:31:50,160 --> 00:31:53,280 Speaker 6: a debate that's been happening in the markets here, there's 611 00:31:53,320 --> 00:31:56,200 Speaker 6: been a thought that AI might replace the need for 612 00:31:56,280 --> 00:31:59,840 Speaker 6: cyber protection, that in fact they're somehow competing with each other, 613 00:32:00,320 --> 00:32:05,480 Speaker 6: you're using them together. Isn't the onset of AI creating 614 00:32:05,520 --> 00:32:07,080 Speaker 6: more demand for cyber protection? 615 00:32:07,880 --> 00:32:10,240 Speaker 12: I think it does precisely for one of the reasons 616 00:32:10,240 --> 00:32:12,600 Speaker 12: we just mentioned we were seeing attackers who are using 617 00:32:12,680 --> 00:32:13,360 Speaker 12: AI as. 618 00:32:13,240 --> 00:32:16,280 Speaker 6: Opposed to replacing these platforms, though, how are you marrying them? 619 00:32:16,400 --> 00:32:17,240 Speaker 5: Yes, for sure. 620 00:32:17,440 --> 00:32:19,240 Speaker 12: A quick background you know my thought on that when 621 00:32:19,240 --> 00:32:21,640 Speaker 12: I look at the aspects of my time at CIA 622 00:32:21,840 --> 00:32:25,720 Speaker 12: from which I draw the most satisfaction and sort of gratification, 623 00:32:25,840 --> 00:32:27,640 Speaker 12: it was really the power of the team. So it 624 00:32:27,680 --> 00:32:30,720 Speaker 12: was that human team that was able to harness technology, 625 00:32:31,160 --> 00:32:34,120 Speaker 12: to use technology as an enabler. It was diverse teams 626 00:32:34,160 --> 00:32:37,080 Speaker 12: with different types of backgrounds that came together unified by 627 00:32:37,080 --> 00:32:40,360 Speaker 12: a mission to really solve hard problems and a site 628 00:32:40,360 --> 00:32:42,560 Speaker 12: we're taking that same approach, so we build a culture 629 00:32:42,680 --> 00:32:46,160 Speaker 12: that's really powerfully enabling that both within our company and 630 00:32:46,240 --> 00:32:48,520 Speaker 12: for our customers. We say that we think the human 631 00:32:48,560 --> 00:32:52,040 Speaker 12: beings are central to using AI to address these problems. 632 00:32:52,160 --> 00:32:53,960 Speaker 12: I think, you know, as we look at the power 633 00:32:53,960 --> 00:32:57,440 Speaker 12: and promise of AI, it offers immense opportunity and dealing 634 00:32:57,440 --> 00:33:00,000 Speaker 12: with volume. But we think even the US and two 635 00:33:00,000 --> 00:33:03,880 Speaker 12: Elegen's community, I'd seen with greater signals intelligence collection, more 636 00:33:03,960 --> 00:33:05,800 Speaker 12: volume of data, you lose context and you. 637 00:33:05,840 --> 00:33:06,680 Speaker 5: Lose that awareness. 638 00:33:07,560 --> 00:33:09,800 Speaker 12: Having the human being be at the helm is core 639 00:33:09,880 --> 00:33:12,160 Speaker 12: to what we do so that the human can use 640 00:33:12,200 --> 00:33:14,720 Speaker 12: that which is uniquely human in the end, which is 641 00:33:14,760 --> 00:33:16,640 Speaker 12: to use their judgment to make those decisions. 642 00:33:16,760 --> 00:33:19,680 Speaker 6: That's incredibly important. Will that always be the case for AI? 643 00:33:19,800 --> 00:33:21,600 Speaker 6: Or is that the space we're in right now? 644 00:33:21,840 --> 00:33:24,719 Speaker 12: I think when we look at the power of generative AI, 645 00:33:24,840 --> 00:33:27,120 Speaker 12: it's important for us to remember that as it stands 646 00:33:27,200 --> 00:33:31,280 Speaker 12: right now, it's not deterministict it. It makes mistakes, it 647 00:33:31,320 --> 00:33:34,040 Speaker 12: makes inferences that are not correct. It can say and 648 00:33:34,080 --> 00:33:36,160 Speaker 12: do things that are inaccurate. And if we're using AI 649 00:33:36,280 --> 00:33:39,000 Speaker 12: to generate a poem, that might be sort of comedic, 650 00:33:39,160 --> 00:33:41,840 Speaker 12: but when you're trying to protect your perimeter security inside 651 00:33:41,840 --> 00:33:45,440 Speaker 12: a network, it's less funny. So we think that as 652 00:33:45,480 --> 00:33:49,480 Speaker 12: the AI improves, as the accuracy and credibility improve, then 653 00:33:49,560 --> 00:33:52,640 Speaker 12: for sure within andiesite will automate more of the workflow. 654 00:33:52,920 --> 00:33:55,680 Speaker 12: But we think the right architecture, the right decision, is 655 00:33:55,720 --> 00:33:58,160 Speaker 12: to empower the human to be at the helm make 656 00:33:58,200 --> 00:34:01,280 Speaker 12: those decisions really sort of enabled and enhanced by the 657 00:34:01,280 --> 00:34:01,880 Speaker 12: power of AI. 658 00:34:02,160 --> 00:34:06,000 Speaker 2: So what sort of guard rails or safeguards would you 659 00:34:06,080 --> 00:34:08,680 Speaker 2: think would be the right way for the administration, for 660 00:34:08,920 --> 00:34:11,400 Speaker 2: the federal government to be thinking about this and I'm 661 00:34:11,440 --> 00:34:15,400 Speaker 2: also curious about who you work with the public and 662 00:34:15,440 --> 00:34:18,880 Speaker 2: the private sectors. Do they have different needs when it 663 00:34:18,920 --> 00:34:22,320 Speaker 2: comes to this and to this broader discussion about keeping 664 00:34:22,600 --> 00:34:24,040 Speaker 2: consumers of this safe. 665 00:34:24,320 --> 00:34:27,359 Speaker 12: Yeah, I think to the different needs, one thing I'd 666 00:34:27,360 --> 00:34:29,479 Speaker 12: say is we think the threat vectors are the same, 667 00:34:29,560 --> 00:34:32,480 Speaker 12: so the threat actors, the types of attacks that whether 668 00:34:32,520 --> 00:34:35,960 Speaker 12: it's public or private sector institutions, the threat is the 669 00:34:36,000 --> 00:34:40,000 Speaker 12: same and it's growing. I'm most concerned when I look 670 00:34:40,000 --> 00:34:42,600 Speaker 12: at the difference between public and private sector at where 671 00:34:42,640 --> 00:34:44,960 Speaker 12: the private sector stands in terms of risk. I think 672 00:34:45,000 --> 00:34:49,600 Speaker 12: public sector institutions have in many cases large sort of 673 00:34:49,680 --> 00:34:53,400 Speaker 12: well defended networks. There's a you know, there's a defense 674 00:34:53,440 --> 00:34:56,440 Speaker 12: in depth, there's layered cyber defenses. When I look at 675 00:34:56,480 --> 00:35:00,680 Speaker 12: private sector entities, particularly businesses with a global footprint with 676 00:35:00,920 --> 00:35:05,840 Speaker 12: potentially international, geographically dispersed supply chains, there's risk there and 677 00:35:05,880 --> 00:35:08,799 Speaker 12: I think certainly in today's environment, any businesses that are 678 00:35:08,800 --> 00:35:11,760 Speaker 12: interacting with our counterparts in Israel are at a heightened 679 00:35:11,760 --> 00:35:14,920 Speaker 12: degree of risk. So I think of the private sector, 680 00:35:14,960 --> 00:35:17,280 Speaker 12: there's real risk there, and there's also been a blurring 681 00:35:17,320 --> 00:35:20,440 Speaker 12: of the risk where you look at critical infrastructure like 682 00:35:20,480 --> 00:35:25,400 Speaker 12: hospital systems, the energy infrastructure, financial services institutions. More and 683 00:35:25,480 --> 00:35:29,000 Speaker 12: more that infrastructure is in private sector hands, so it's 684 00:35:29,000 --> 00:35:32,560 Speaker 12: not as sort of tidally categorized as to say public 685 00:35:32,600 --> 00:35:34,280 Speaker 12: and private sector, because that risk is shared. 686 00:35:34,440 --> 00:35:36,400 Speaker 5: That's really interesting, Brian. 687 00:35:36,440 --> 00:35:38,080 Speaker 6: I want to get back to where we started here, 688 00:35:38,760 --> 00:35:42,920 Speaker 6: and that's essentially a new breed of CEOs like yourself, 689 00:35:43,000 --> 00:35:46,640 Speaker 6: former CIA officers, in some cases, former members of the military, 690 00:35:46,719 --> 00:35:49,759 Speaker 6: who can take their active duty experience and apply it. 691 00:35:49,760 --> 00:35:54,440 Speaker 6: In these cases, timing is everything, and timing is apparently 692 00:35:54,480 --> 00:35:57,239 Speaker 6: on your side right here. Do you feel like you're 693 00:35:57,280 --> 00:36:01,200 Speaker 6: part of a growing community doing this with your experience 694 00:36:01,239 --> 00:36:01,760 Speaker 6: as a veteran. 695 00:36:02,719 --> 00:36:02,960 Speaker 4: I do. 696 00:36:03,080 --> 00:36:05,640 Speaker 12: I'm starting to see more and more teammates of mine, 697 00:36:05,680 --> 00:36:09,440 Speaker 12: both from CIA, the National Security Agency, the Special Operations 698 00:36:09,520 --> 00:36:12,000 Speaker 12: Forces in the US military. I think feel the same 699 00:36:12,040 --> 00:36:14,040 Speaker 12: way perhaps that I do, which is I was drawn 700 00:36:14,040 --> 00:36:16,640 Speaker 12: to public service. I spent thirty plus years in public service. 701 00:36:16,719 --> 00:36:20,040 Speaker 12: It mattered to me there's nobility in that mission. And 702 00:36:20,080 --> 00:36:22,239 Speaker 12: I think to the conversation we're having here, when you 703 00:36:22,320 --> 00:36:25,720 Speaker 12: look at the vulnerability of our energy systems or hospital 704 00:36:25,719 --> 00:36:27,560 Speaker 12: and medical systems, you look at the attack that just 705 00:36:27,600 --> 00:36:31,520 Speaker 12: happened this week, this matters, and to the extent that 706 00:36:31,840 --> 00:36:35,399 Speaker 12: we can draw from the type of cultural experiences we had, 707 00:36:35,440 --> 00:36:38,480 Speaker 12: the types of environments in which we operated to try 708 00:36:38,480 --> 00:36:42,280 Speaker 12: to apply those skills and experiences in building a business 709 00:36:42,280 --> 00:36:45,600 Speaker 12: to help address these types of attacks, then I'm absolutely 710 00:36:45,600 --> 00:36:47,319 Speaker 12: grateful for the opportunity. 711 00:36:48,200 --> 00:36:51,680 Speaker 2: Joe mentioned the timing. We're also seeing an administration that's 712 00:36:51,680 --> 00:36:54,800 Speaker 2: trying to boost defence budgets. I believe President Trump's request 713 00:36:54,880 --> 00:36:56,960 Speaker 2: for the Pentagon next year would boost it by about 714 00:36:56,960 --> 00:37:01,279 Speaker 2: fifty percent. How much is this a boon to your 715 00:37:01,520 --> 00:37:06,120 Speaker 2: industry and the support that we could see for making 716 00:37:06,120 --> 00:37:09,120 Speaker 2: sure that we're bolstering our technology and the name of 717 00:37:09,200 --> 00:37:10,160 Speaker 2: defense of the US. 718 00:37:10,560 --> 00:37:13,279 Speaker 12: I think it's a recognition that, in light of what's 719 00:37:13,280 --> 00:37:15,280 Speaker 12: happening right now and with an eye to the future, 720 00:37:15,360 --> 00:37:18,720 Speaker 12: that the threats will continue to grow, So resourcing cyber 721 00:37:18,760 --> 00:37:23,279 Speaker 12: defense systems and technologies, resourcing the public sector defense of 722 00:37:23,680 --> 00:37:26,080 Speaker 12: our cyber systems is critically important. So to be able 723 00:37:26,120 --> 00:37:28,000 Speaker 12: to play a part in that and be a part 724 00:37:28,000 --> 00:37:30,440 Speaker 12: of a team again of some pretty extraordinary people who 725 00:37:30,480 --> 00:37:33,040 Speaker 12: are part of a really powerful network, it's a great opportunity, 726 00:37:33,080 --> 00:37:34,440 Speaker 12: and certainly it's the right time. 727 00:37:34,880 --> 00:37:38,200 Speaker 2: All right, Brian Cobba, CEO and co founder of Andesite, 728 00:37:38,280 --> 00:37:40,080 Speaker 2: was so great having you here at studio. 729 00:37:40,160 --> 00:37:42,360 Speaker 6: Thank you so much for su co greshcha on your company. 730 00:37:42,640 --> 00:37:44,799 Speaker 6: We'd love to hear more about how it grows in 731 00:37:44,840 --> 00:37:46,880 Speaker 6: the New York term. You're based right here in Virginia 732 00:37:46,920 --> 00:37:48,960 Speaker 6: where we are in the nation's capital. Tyler, the President 733 00:37:48,960 --> 00:37:51,440 Speaker 6: of the United States, likes to talk about central casting. 734 00:37:51,840 --> 00:37:53,320 Speaker 6: I don't know where they found this man, but I 735 00:37:53,320 --> 00:37:55,080 Speaker 6: think he used to work for the CIA. It's great 736 00:37:55,120 --> 00:37:57,680 Speaker 6: to meet Brian, and we thank him. 737 00:37:57,600 --> 00:37:58,400 Speaker 5: For his service. 738 00:38:00,200 --> 00:38:03,399 Speaker 6: Thanks for listening to the Balance of Power podcast. Make 739 00:38:03,440 --> 00:38:06,400 Speaker 6: sure to subscribe if you haven't already, at Apple, Spotify, 740 00:38:06,480 --> 00:38:09,040 Speaker 6: or wherever you get your podcasts, and you can find 741 00:38:09,120 --> 00:38:12,360 Speaker 6: us live every weekday from Washington, DC at noontime Eastern 742 00:38:12,640 --> 00:38:14,120 Speaker 6: at Bloomberg dot com.