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Speaker 1: Good morning.

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Speaker 2: It's Monday, the eleventh of December here in London. This

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Speaker 2: is the Bloemberg Daybreacurate podcast. I'm Caroline Hepka.

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Speaker 3: And I'm Stephen Carroll. Coming up today, the CEO of

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Speaker 3: ARM tells us the government needs to make it easier

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Speaker 3: to bring talent into the country.

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Speaker 2: Central bankers in the USUK and EU are getting ready

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Speaker 2: for decisions that will set the tone for markets in

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Speaker 2: the months ahead.

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Speaker 3: Plus move over Cayman Islands. There's a new haven for billionaires.

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Speaker 3: We look at why the likes of cz A, Danny

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Speaker 3: and Dalio are flocking to Abu Dhabi.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 2: Britain's most successful tech firm says that the country needs

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Speaker 2: to make it easy to attract talent from overseas. ARMS

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Speaker 2: CEO in A hass has told Bloomberg that whoever wins

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Speaker 2: the next general election, further restrictions on skilled migration will

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Speaker 2: hurt growth.

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Speaker 4: Please make it very easy for us to attract world

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Speaker 4: class talent and attract engineers to come work for ARM,

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Speaker 4: because that is the single largest limitter that we will

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Speaker 4: have for growth is access to talent. And if that

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Speaker 4: gets any more difficult with a change in government that

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Speaker 4: you described and with the next election that would be

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Speaker 4: a headwind. I would want to would not want to

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Speaker 4: have to engage on so I would say my first

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Speaker 4: measure would be, please make it easy for us to

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Speaker 4: bring people in and hire, and if you can make

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Speaker 4: it even easier, even better.

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Speaker 2: Rene Hass also says that it's not realistic that the

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Speaker 2: UK can try and replicate the success of Silicon Valley,

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Speaker 2: but that there are ways the country can ramp up innovation.

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Speaker 2: The comments on talent come just days after the government

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Speaker 2: announced measures to reduce the level of skilled migration into

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Speaker 2: the country with an increase in the minimum salary required

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Speaker 2: for skilled worker visas. Rishie Sinak is undergrowing political pressure

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Speaker 2: from his own party to reduce net migration after it

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Speaker 2: hit a record high of seven hundred and forty five

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Speaker 2: thousand in twenty twenty two.

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Speaker 3: Mister Minuel faces questions about his handling of the COVID pandemic. Later,

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Speaker 3: Rishie Sinac's flagship Eat Out to Help Out program in

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Speaker 3: August of twenty twenty saw him dubbed doctor death by

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Speaker 3: a government official worried about the risks from COVID. This

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Speaker 3: weekend leveling up. Secretary Michael Gove defended the scheme.

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Speaker 5: It was not the case that there was a public

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Speaker 5: critique of it. It was an effective way of ensuring

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Speaker 5: that the hospitality industry was supported through a very difficult

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Speaker 5: period and it was entirely within the broad outlines of

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Speaker 5: rules about social mixing that prevailed at the time.

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Speaker 3: Despite Gove's account, the then Chief Scientific Advisor, Sir Patrick

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Speaker 3: Valence told the inquiry that Rishi Sunac would have known

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Speaker 3: health experts were worried about his policy when he was chancellor.

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Speaker 3: It marks the start of a potentially dangerous week for

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Speaker 3: Rishi Sunac, who also faces a crunch vote on his

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Speaker 3: bill to remove asylum seekers to Rwanda.

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Speaker 2: Bloomberg Economics says that global growth will slow to two

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Speaker 2: point seven percent next year, down from three point one

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Speaker 2: percent this year. Leaving aside the global financial crisis in

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Speaker 2: two thousand and nine and the COVID pandemic in twenty twenty,

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Speaker 2: that would be the slowest rate of expansion since the

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Speaker 2: dot com bubble of two thousand and one. The team

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Speaker 2: of Bloomberg Economics is also shunning the idea of a

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Speaker 2: soft landing in the US. They are forecasting a shallow

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Speaker 2: recession to start soon and stretching into early twenty twenty four.

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Speaker 3: This week could set the tone for the stock market

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Speaker 3: and the economy as we head into twenty twenty four.

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Speaker 3: Thanks to Tuesday's at US inflation print and Wednesdays Fed decision,

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Speaker 3: speculation that the Federal Reserve will start cutting rates early

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Speaker 3: next year has so far fueled a sharp drop in

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Speaker 3: treasury yields and a surge in stocks. The former US

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Speaker 3: Treasury Secretary Larry Summers says rate setters need to be cautious.

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Speaker 6: The moment they turn or announced they're going to turn,

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Speaker 6: is going to be a seismic moment, and for that reason,

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Speaker 6: they probably need to be there very deliberative and careful

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Speaker 6: about getting to that point and waiting until they see

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Speaker 6: some overwhelming evidence of inflation being locked in low or

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Speaker 6: see some real evidence of the economy turning over.

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Speaker 3: Summer's warning comes as the S and P five hundred

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Speaker 3: index has added roughly four trillion dollars in market value

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Speaker 3: since late October. Participants in Bloomberg's latest Markets Life Pulse

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Speaker 3: survey expect the index hit a record high by the

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Speaker 3: end of next year.

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Speaker 2: Now, Ukraine's vlodomu Zelenski is headed to Washington to try

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Speaker 2: and break the deadlock over age in Congress. Further US

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Speaker 2: military support has stalled as Republicans insist that changes to

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Speaker 2: the US Mexico border policy be tied to help for Ukraine.

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Speaker 2: Sex you say, Anthony Blincoln says that it's a critical

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Speaker 2: moment for the country.

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Speaker 7: Over the past year, it's taken back more than fifty

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Speaker 7: percent It's territory. It's engaged in a ferocious battle right

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Speaker 7: now along the eastern and southern fronts. We are running

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Speaker 7: out of resources already in the bank to continue to

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Speaker 7: assist them.

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Speaker 2: In October, Blincoln's administration proposed an almost one hundred and

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Speaker 2: six billion dollar emergency spending package, which included sixty one

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Speaker 2: billion dollars for Ukraine. The White House Budget Director warned

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Speaker 2: earlier this month that without a deal, the US would

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Speaker 2: run out of resources to assist Ukraine by the end

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Speaker 2: of the year.

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Speaker 3: Vladimir Putin and Benjamin nataniew who spoke at length on

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Speaker 3: Sundai amidst growing tension surrounding the latest Israel Hamas war.

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Speaker 3: According to a statement from the Israeli Prime Minister's office, Natanya,

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Speaker 3: who criticized Russia's cooperation with Iran and taking sides against

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Speaker 3: Israel at the United Nations. Thread out from Russia didn't

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Speaker 3: mention Natania Who's criticism and focused on the quote catastrophic

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Speaker 3: humanitarian situation in the Gaza Strip.

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Speaker 2: University of Pennsylvania President Liz McGan gil and the board chair,

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Speaker 2: Scott Bok have resigned. This weekend comes days after congressional

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Speaker 2: testimony in which McGill declined to say that calling for

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Speaker 2: the genocide of Jews always violates the university's code of conduct.

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Speaker 2: Pennsylvania Senator Bob Casey and Governor Josh Shapiro joined local

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Speaker 2: leaders in Philadelphia for a rally against antisemitism.

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Speaker 8: Those of us who have the authority, in this case

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Speaker 8: one legislative body, the United States Congress or two houses

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Speaker 8: of one Congress, is to get them the funds they

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Speaker 8: need so they can fully investigate and prosecute these cases

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Speaker 8: where there is a hostile environment on the campus.

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Speaker 2: Senator Casey said that reports of antisemitic incidents have increased

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Speaker 2: almost fourfold since the start of the war between Israel Hamas.

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Speaker 2: With Liz McGill's resignation, the focus has turned to the

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Speaker 2: presidents of Harvard and MIT, who were also criticized for

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Speaker 2: their responses before that Congressional committee last week.

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Speaker 3: In a moment, we'll tell you more about the emergence

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Speaker 3: of Abu Dhabi as the newest haven for billionaires. But

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Speaker 3: not the story that kotterai this morning is a piece

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Speaker 3: by Matthew Brookers, the Woomberg opinion columnist. The headline in

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Speaker 3: itself is pretty provocative. Is the UK ready to be

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Speaker 3: honest about its decline?

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Speaker 1: Oh? Declined? That is a touchstone word, isn't it.

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Speaker 3: But it's also this idea of being upfront about the

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Speaker 3: challenges the UK facesn't it. Matthew has delved into the

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Speaker 3: recent Resolution Foundation report showing the problems of the challenges

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Speaker 3: of productivity and growing the British economy and crucially how

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Speaker 3: much it's fallen behind some of its comparable peers like

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Speaker 3: France and Germany. Now it's a story that we talked

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Speaker 3: about here as well, but it also is part of

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Speaker 3: this idea of how you move on from that, and

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Speaker 3: the idea of having to accept the challenges to be

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Speaker 3: able to develop.

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Speaker 2: As of course, you know, absolutely, we spoke to the

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Speaker 2: Resolution Foundation's chief researcher, you know, one of the people

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Speaker 2: that wrote this two hundred and ninety one page document,

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Speaker 2: and Matthew brook has sort of done a deeper dive

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Speaker 2: into it, which is fascinating. I think it was a

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Speaker 2: slap in the face, I think in the UK to

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Speaker 2: realize that middle income households are twenty percent poorer than

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Speaker 2: in Germany. I think that's not commonly understood in the UK. Yes,

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Speaker 2: it's a low productivity issue, but Brooker talks about how

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Speaker 2: inertia is also a challenge. So too his magical thinking.

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Speaker 2: But perhaps some sort of signs of optimism because both

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Speaker 2: the big political parties in the UK were at the

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Speaker 2: launch or the Resolution Foundation's big documents, and maybe things

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Speaker 2: are changing. It's a really fascinating piece, not all gloomy.

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Speaker 2: Booker talking about the positive side of the UK economy

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Speaker 2: and if we can focus on those perhaps things will improve.

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Speaker 8: Yeah.

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Speaker 3: Well, let's turn into a related story now. As we

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Speaker 3: mentioned there a moment ago, the CEO of the UK

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Speaker 3: based tech firm ARM has been speaking to Bloomberg's Tom Mackenzie.

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Speaker 3: The Cambridge based firm designs chips found in some of

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Speaker 3: the world's most of the world's smartphones in fact, and

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Speaker 3: plays a key in the global semiconductor supply chain. It

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Speaker 3: was a wide ranging interview, covering everything from their listing

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Speaker 3: on the New York Stock Exchange in September to the

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Speaker 3: UK's economic ambition and the risks of AI. Rene has

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Speaker 3: oversaw as the company's fifty four point five billion dollar

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Speaker 3: IPO earlier this year, and began by discussing how that's

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Speaker 3: changed the way the firm operates.

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Speaker 4: We've been public now for a few months, so I

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Speaker 4: would say I feel like the eyes are upon me

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Speaker 4: a little bit more than they were prior. But on

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Speaker 4: the other hand, I try to think about it in

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Speaker 4: terms of the future of ARM is really not measured

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Speaker 4: in what we are today. It's what we're going to

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Speaker 4: be in a few years. I spend most of my

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Speaker 4: time thinking about where Arm's going to be three years

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Speaker 4: from now, five years from now. So on one level, yes,

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Speaker 4: it's changed because the eyes are on us. We're a

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Speaker 4: public company. We have to meet our expectations, we have

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Speaker 4: to do exactly what we say we're going to do.

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Speaker 4: But on the other hand, I'd like to think maybe

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Speaker 4: not so much change, because I'm thinking about five years away,

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Speaker 4: just like I was before the IPO, same way I'm

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Speaker 4: thinking about it today.

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Speaker 9: I want to talk a little bit about Alms Place

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Speaker 9: in the UK. Almost conceived of course here in Cambridge

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Speaker 9: in the UK. It's now obviously the majority owned by

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Speaker 9: Japanese company soft Bank, listed in the US. What role

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Speaker 9: do you see the UK playing for ARM in the

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Speaker 9: years ahead.

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Speaker 4: The UK is our home, it's our headquarters, it's we

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Speaker 4: were born and we're always going to be here. So

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Speaker 4: the UK is incredibly central to the future of ARM

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Speaker 4: in so many ways. We've had fantastic cooperation in the

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Speaker 4: two years or so that I've become the CEO from

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Speaker 4: the UK government. We've had lots and lots of interaction

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Speaker 4: with them. I have personally. They've looked for lots of

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Speaker 4: different ways to help us grow, whether it's around fast

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Speaker 4: track for talent and such, because again that's probably our

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Speaker 4: biggest bottleneck for growth is just getting talent in. But

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Speaker 4: we are very very committed to the UK, and again

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Speaker 4: the UK is going to be so critical for our future.

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Speaker 9: And the Prime Minister of the Chancellor they want to create,

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Speaker 9: they want to sit in the UK into the next

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Speaker 9: silicon valley. Is that realistic?

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Speaker 7: Run?

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Speaker 4: Really there's only one silicon valley, right, It's a unique

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Speaker 4: area in terms of its ecosystem, the universities and how

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Speaker 4: the whole how the whole section works. Does that mean

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Speaker 4: that can't be imitated or replicated on some level in

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Speaker 4: other parts of the world. No, not at all, and

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Speaker 4: I think the government here has been doing a fantastic

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Speaker 4: job around it. And Cambridge itself is a very very

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Speaker 4: rich community of small companies, incubators, the universities. There's a

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Speaker 4: lot of former arm employees who are involved in startups

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Speaker 4: here in the community. So I think I think Cambridge

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Speaker 4: in particularly and also other parts of the UK including Bristol,

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Speaker 4: are very rich for innovation.

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Speaker 9: What do you think the government today's government, but previous

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Speaker 9: governments as well have done wrong in terms of failing

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Speaker 9: to attract tech companies to actually list here in the UK?

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Speaker 4: Or is it that New York.

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Speaker 9: Just has this gravitational pool that's can't be beat.

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Speaker 4: I'm not a financial guy, I'm an engineer, so I

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Speaker 4: kind of give you just my layman's thought around that.

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Speaker 4: I think the capital markets and scale, I guess maybe

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Speaker 4: speak about the arm Our own case, very large capital market,

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Speaker 4: the access to capital is very large in New York.

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Speaker 4: I think that was one of the reasons that really

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Speaker 4: drove that in our case. But I think broadly back

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Speaker 4: to what really matters for ARM in myself is attracting

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Speaker 4: world class engineers, and the UK has always been a

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Speaker 4: fantastic place for R and D and innovation, and I

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Speaker 4: think it will continue to be that way.

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Speaker 9: Okay, you've been meeting, We meet with regulators, you meet

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Speaker 9: with the law makers of course around the world. Have

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Speaker 9: you been meeting with members of the Labor opposition party,

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Speaker 9: and if so, has your message been to them?

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Speaker 4: I have not. Yeah, so far, not yet.

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Speaker 9: Okay, if they were. The polls have the Labor Party

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Speaker 9: in a twenty point lead, there's a very good chance

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Speaker 9: that they could be in government in twelve months time

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Speaker 9: or less. Often governments set themselves one hundred days in

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Speaker 9: terms of to achieve things in the firste hundred days.

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Speaker 9: What would you say to any incoming government, whether it's

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Speaker 9: the Conservative government or a Labor Party government, that you

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Speaker 9: would want to see happen in those first one hundred

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Speaker 9: days for your sector?

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Speaker 4: Yeah, specifically for ARM as we talked about earlier, we're

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Speaker 4: very committed to the UK. This is our home we

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Speaker 4: were born here, we intend to stay here. Please make

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Speaker 4: it very easy for us to attract world class talent

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Speaker 4: and attract engineers to come work for ARM because that

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Speaker 4: is the single largest limitter that we will have for

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Speaker 4: growth is access to talent. And if that gets any

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Speaker 4: more difficult with a change in government that you described

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Speaker 4: with the next election, that would be a headwind I

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Speaker 4: would want to would not want to have to engage on.

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Speaker 4: So I would say my first message would be, please

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Speaker 4: make it easy for us to bring people in and hire,

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Speaker 4: and if you can make it even easier, even better.

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Speaker 9: We've seen the debate around risks, risks around generacy of

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Speaker 9: AIL in blow out into the open with what's happened

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Speaker 9: with open AI and Sam Altman. Where do you land

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Speaker 9: on this? I just wonder is there an element of

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Speaker 9: this story that keeps you up at night that concerns you?

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Speaker 9: What are you most worried about within the evolution of

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Speaker 9: generative AI that.

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Speaker 4: We lose control of the machines I think to some extent,

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Speaker 4: and the howser still very much being debated, obviously, of

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Speaker 4: having the fail safe mechanisms in place that humans can

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Speaker 4: override the systems, that's probably the single largest thing I

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Speaker 4: think and worry about is that if the machines can

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Speaker 4: be or the algorithms or there's being generated can be

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Speaker 4: developed in such a way that there is no fail

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Speaker 4: safe mechanism, that it can be overridden by a human,

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Speaker 4: That's what worries me.

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Speaker 8: Okay.

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Speaker 3: That was Renee Hass, the CEO of Arms, speaking there

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Speaker 3: exclusively to Bloomberg's Tom McKenzie about some of the challenges

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Speaker 3: facing his business, but also some of the areas in

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Speaker 3: which he feels optimistic about the future for the Tip designer.

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Speaker 1: Yeah, absolutely great interview.

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Speaker 2: Now and our attention though to something totally different and

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Speaker 2: new haven for the world's billionaires. So from hedge fund

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Speaker 2: billionaire Ay Dalio to the Russian still magnates Vladimir Lisin

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Speaker 2: and India's a Dhani family, they have all set up

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Speaker 2: special purpose vehicles in Abu Dhabi. Bloomberg has been sifting

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Speaker 2: through the hundreds of corporate filings to understand the moves

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Speaker 2: that have taken place this year. Bloomberg's Ben Bartenstein covers

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Speaker 2: the Middle East in Dubai and he joins us now

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Speaker 2: for more. Ben, really interesting peace, Why are so many

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Speaker 2: billionaires shifting to Abu Dhabi.

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Speaker 10: Well, part of this goes back to the COVID days.

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Speaker 10: The UEU was very successful in the early days of

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Speaker 10: COVID in keeping open for business and attracting some of

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Speaker 10: the wealthy from Europe and Asia and the US. Then

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Speaker 10: that extended to the Russian invasion of Ukraine and the

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Speaker 10: ue taking more of a geopolitically neutral stance that once

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Speaker 10: again attracted more high networth individuals and more broadly speaking,

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Speaker 10: ADGM Abudabi Global Market, which is the international financial center

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Speaker 10: in the capital, has really been sort of leveraging the

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Speaker 10: fact that the Abu Dhabi is home to so much

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Speaker 10: capital from both sovereign wealth funds and private investment firms.

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Speaker 10: To say, for investors who've previously done business with them,

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Speaker 10: if you want to continue to do business you should

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Speaker 10: really shift more of your assets and your companies here.

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Speaker 3: So who are some of those high net worth individuals

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Speaker 3: who've moved.

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Speaker 10: So everyone from cz the richest man in Crypto, the

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Speaker 10: former finance CEO, to the Adani families of the second

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Speaker 10: richest family in India, to Ry Dalio as you mentioned,

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Speaker 10: the hedge fund billionaire from the US to Vladimir Lesen,

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Speaker 10: who's the fourth wealthiest man in Russia to murtazal Lakhani,

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Speaker 10: the prominent oil trader shik Tatnun who is the UA

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Speaker 10: National Security Advisor. A number of his entities have registered

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Speaker 10: SPV and most recently, Nasu sawiras the richest man in Egypt,

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Speaker 10: told us last week that he's planning to set up

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Speaker 10: in Abudabi Global market as well.

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Speaker 2: Wow, it's becoming quite a magnet, then, isn't it so

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Speaker 2: which jurisdictions are losing out?

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Speaker 1: Do you think?

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Speaker 10: Well, it's interesting. We looked at the data from both

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Speaker 10: the BBI and the Caymans just as two examples, because

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Speaker 10: we were hearing anecdotally about a shift in wealth from

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Speaker 10: the Caribbean. It's interesting to see that their data points

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Speaker 10: to a decade low for corporate registrations. We're also hearing

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Speaker 10: about some shifting of assets from Singapore, from Mauritius and

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Speaker 10: Switzerland to Abu Dhabi as well.

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Speaker 3: What is it about Abudhabi global markets SPVs that make

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Speaker 3: them particularly appealing?

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Speaker 10: Part of it is the comfort that comes with the

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Speaker 10: legal structure. It's English common law, so that's more comfortable

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Speaker 10: and familiar to a lot of international investors. Also, just

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Speaker 10: the guarantees as far as ringfence assets. Certain folks who

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Speaker 10: may have legal challenges and other jurisdictions are given certain

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Speaker 10: guarantees as far as sort of safeguarding their assets within

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Speaker 10: Abu Dhabi. And of course it has the sort of

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Speaker 10: low taxation appeal that a lot of the Caribbean places

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Speaker 10: have had as well. And then more recently we've seen

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Speaker 10: sort of Abu Dhabi flexing its geopolitical neutrality, which is

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Speaker 10: appealing for certain individuals who may feel that they're judged

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Speaker 10: based on their nationality and maybe are less welcome in

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Speaker 10: other jurisdictions.

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Speaker 2: Wow, So borrowing from yes, a lot of other jurisdictions,

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Speaker 2: then what assets though, have you found that the SPVs

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Speaker 2: actually hold.

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Speaker 10: So a lot of these SPVs hold a mixture of

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Speaker 10: both equities, but they can also hold property assets as well.

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Speaker 10: Part of this goes back to sort of, you know,

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Speaker 10: planning for the future for individuals, you know, looking to

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Speaker 10: pass on their assets after their death, and the fact

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Speaker 10: that the UAE legal structure on shore has certain you know,

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Speaker 10: Muslim legal codes that you know codify a certain standard

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Speaker 10: for how the assets are passed along. And eighty GM

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Speaker 10: has sort of you know, its own unique structure where

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Speaker 10: you can you know, more clearly designate who in the

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Speaker 10: family or to take over the assets. But also we've

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Speaker 10: seen like an instance of Dalio where you know, family

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Speaker 10: offices are registered under the SPB structure as well.

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Speaker 3: Ben talks just about where we are in this trend.

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Speaker 3: Are we approaching a peak? What's the outlook look like

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Speaker 3: for these this movement to have a dabie from here,

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Speaker 3: that is the big question.

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Speaker 10: I mean, this year was pretty much a landmark year

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Speaker 10: for eighty GM as far as SPV creation, but just

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Speaker 10: more broadly in attracting kind of a who's who of

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Speaker 10: global players from Dalio to Brevian Howard and many others.

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Speaker 10: I guess the broader question, as we saw in the

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Speaker 10: case of the BBI and Caymans as two examples, is

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Speaker 10: you know they have traditionally been g at attracting a

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Speaker 10: number of special purpose vehicles. Ultimately that attracted greater scrutiny though,

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Speaker 10: so I guess the question is, you know, abud Ab

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Speaker 10: has been very successful in the past few years of

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Speaker 10: attracting these high networked individuals. At a certain point, just

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Speaker 10: naturally that would attract a bit more more scrutiny so

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Speaker 10: that I guess is the question going into twenty twenty

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Speaker 10: four is whether this trend will continue.

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