WEBVTT - Oracle’s Huge Bond Sale, Musk Eyes SpaceX and xAI Combo 0:00:02.520 --> 0:00:13.640 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:13.680 --> 0:00:17.520 from coast to coast with Caroline Hyde in New York 0:00:17.760 --> 0:00:20.920 and ever though in Sent Francisco. 0:00:21.960 --> 0:00:23.440 This is Bloomberg Tech coming up. 0:00:23.440 --> 0:00:26.360 Disney shares sinking after giving a tepid growth outlook that 0:00:26.400 --> 0:00:28.479 says the market of waits news on who will be 0:00:28.880 --> 0:00:32.320 it's new leader. Plus Oracle raising more debt as a 0:00:32.360 --> 0:00:34.640 software giant looks to raise forty five to fifty billion 0:00:34.680 --> 0:00:36.920 dollars in bonds, an equity for additional cloud in the 0:00:36.920 --> 0:00:40.519 structure capacity and sources, say Elon musk Is in advanced 0:00:40.520 --> 0:00:44.440 talks to combined SpaceX with XAI. Will have all the details, 0:00:44.479 --> 0:00:46.599 but first we check in on these markets. Then in 0:00:46.920 --> 0:00:51.120 certain areas breathe some size of relief after selloff on 0:00:51.120 --> 0:00:52.879 the NASZAC on the s and P five hundred, we're 0:00:52.880 --> 0:00:54.440 actually seeing a bit more of the buying of the 0:00:54.480 --> 0:00:56.319 dip when it comes to stocks, not so much when 0:00:56.320 --> 0:00:59.080 you're looking at commodities rob percent when you're looking at 0:00:59.120 --> 0:01:02.280 the NASAK. Now Bitcoin bounces, but boy did it feel 0:01:02.320 --> 0:01:04.040 the pain. Over the course of the weekend. We're only 0:01:04.080 --> 0:01:07.360 training at seventy eight thousand, so still the pressure on 0:01:07.360 --> 0:01:09.280 on so called digital gold as we actually see that 0:01:09.319 --> 0:01:13.200 continued strain on gold and silver that really catalyzed on 0:01:13.280 --> 0:01:15.399 Friday and the decision of who will be the next 0:01:15.440 --> 0:01:17.640 FED chair. Move on to the individual stocks in video 0:01:17.760 --> 0:01:19.800 is one of the biggest points drags to the downside 0:01:19.800 --> 0:01:21.720 to day off by one point four percent. We're going 0:01:21.760 --> 0:01:24.360 to dig into what really its relationship with Opening Eye 0:01:24.360 --> 0:01:26.280 and how much it's committing to funding. It is going 0:01:26.280 --> 0:01:28.800 to look like we're looking at Oracle now up two 0:01:28.800 --> 0:01:32.240 percentage points. It's selling a whole wealth of debt and equity. 0:01:32.560 --> 0:01:34.840 But does this steady the nerves that it would in 0:01:34.880 --> 0:01:37.880 some way temp junk status on its debt. We're getting 0:01:37.880 --> 0:01:39.479 into that a little bit later. Move on there, because 0:01:39.480 --> 0:01:42.160 then the here and now we're looking at earnings and it 0:01:42.280 --> 0:01:45.720 was tepid growth more broadly that we saw for Disney, 0:01:45.959 --> 0:01:48.800 and that particular seems to be being pointed forward to 0:01:48.920 --> 0:01:51.120 this fiscal quarter that we look at what is the 0:01:51.160 --> 0:01:54.480 worry about people not traveling towards many of the parks 0:01:54.520 --> 0:01:56.680 in the year to come. We're currently off by four 0:01:56.720 --> 0:01:59.320 percent to say, on the interry day basis, but interesting 0:01:59.360 --> 0:02:01.600 news over the course of a weekend as well. About management. 0:02:02.000 --> 0:02:04.840 Felix Chillette joins us. Now, just going to the fundamentals 0:02:04.840 --> 0:02:08.320 of the business. The quarter they just reported was strong, 0:02:08.480 --> 0:02:10.799 particularly in streaming, but it seems to be where we're 0:02:10.840 --> 0:02:13.000 going in parks, which is a slight nervousness. 0:02:13.480 --> 0:02:17.160 Yeah, I mean, they just reported record sales and parks 0:02:17.200 --> 0:02:19.840 for the previous quarter. They hit ten billion dollars of 0:02:19.840 --> 0:02:22.160 sales in the quarter for the first time. But they 0:02:22.200 --> 0:02:24.200 offer this outlook today that said, you know, in the 0:02:24.240 --> 0:02:28.000 current quarter, there are some concerns. There's all this you know, 0:02:28.840 --> 0:02:32.720 volatility in terms of the international market. Are they going 0:02:32.760 --> 0:02:35.359 to have as many international visitors to the parks. They're 0:02:35.360 --> 0:02:38.079 going to shift some of their marketing to try and 0:02:38.320 --> 0:02:41.560 attract more domestic visitors to the domestic parks. There's also 0:02:41.720 --> 0:02:45.200 increased costs. They're launching a new cruise ship. They have 0:02:45.240 --> 0:02:48.480 a new Frozen exhibit opening in the parks in France. 0:02:48.919 --> 0:02:52.160 So yeah, the park's outlook for this quarter is not 0:02:52.200 --> 0:02:54.200 as good coming off a very strong quarter. 0:02:54.720 --> 0:02:57.840 Interesting time for parks though, and it's leadership because we 0:02:57.919 --> 0:03:00.000 understand there's a key vote going on at the boarderlane 0:03:00.200 --> 0:03:00.640 this week. 0:03:00.760 --> 0:03:03.280 Yeah, so the ward is meeting they're expected to vote 0:03:03.320 --> 0:03:06.880 on Bob Isereiger's successor. We've been watching this for three 0:03:06.960 --> 0:03:10.240 years now. They are leaning towards Josh Tomorrow, who's the 0:03:10.280 --> 0:03:13.160 head of Parks, and we're expecting to see that vote 0:03:13.160 --> 0:03:15.800 this week. Disney previously said they're going to announce a 0:03:15.800 --> 0:03:18.760 successor for Bob Biger sometime before the end of March. 0:03:19.320 --> 0:03:21.160 So things are moving forward and it makes sense that 0:03:21.200 --> 0:03:23.000 Josh Tomorrow would be in the lead at this point. 0:03:23.320 --> 0:03:26.760 The Parks and Cruise division is providing the vast amounts 0:03:26.760 --> 0:03:29.120 of profit at this company, and it sort of reflects 0:03:29.360 --> 0:03:32.760 where things are at. The experience is really working well 0:03:32.840 --> 0:03:36.000 for consumers right now, and we've talked about the home 0:03:36.120 --> 0:03:39.240 entertainment is still somewhat tumultuous as we make this transition 0:03:39.360 --> 0:03:40.440 from cable to streaming. 0:03:40.680 --> 0:03:43.560 Felix Junette with the best run up. We so appreciate it. 0:03:43.560 --> 0:03:45.960 Thank you. Meanwhile, Disney CEO Bob Byga. 0:03:46.200 --> 0:03:48.440 Didn't talk about their IP, saying there's no rush to 0:03:48.480 --> 0:03:49.520 acquire any more of it. 0:03:49.680 --> 0:03:51.040 Here he is in Today's Enny's Cool. 0:03:51.880 --> 0:03:53.960 I think we have a great hand. I don't really 0:03:54.000 --> 0:04:00.120 feel that we have a need to buy more iping 0:04:00.160 --> 0:04:01.320 to continue to create our. 0:04:01.240 --> 0:04:05.440 Own and we've got an unbelievable bedrock of stories already 0:04:05.480 --> 0:04:06.440 told to grow. 0:04:06.240 --> 0:04:09.520 From sticking to Disney, streaming landscape and more with Daniel 0:04:09.520 --> 0:04:12.920 Payne his slate Stone Wealth CIO. Just for a moment, 0:04:12.960 --> 0:04:15.160 we're just talking about how important the parks are. But 0:04:15.240 --> 0:04:18.239 from the streaming side, it had a really good innings 0:04:18.240 --> 0:04:21.159 in terms of profitability. Finally, in terms of the previous 0:04:21.200 --> 0:04:23.000 court are just reported on that push us forward. 0:04:23.760 --> 0:04:27.520 Yeah, really good from the entertainment standpoint, and that's where 0:04:27.520 --> 0:04:30.160 they see a lot of their operating leverage leverage. 0:04:29.760 --> 0:04:30.480 In the company. 0:04:31.000 --> 0:04:34.200 But we do believe moving forward there are a few 0:04:34.240 --> 0:04:37.680 catalysts out there on the experiences, which is their parks 0:04:37.720 --> 0:04:40.400 and cruises over the course of the year that really 0:04:40.440 --> 0:04:43.200 could be beneficial to shareholders. 0:04:44.200 --> 0:04:44.400 You know. 0:04:44.440 --> 0:04:46.919 The near term concerns which they mentioned for the first 0:04:47.000 --> 0:04:51.360 quarter because of international travel, you know, might be pressuring 0:04:51.400 --> 0:04:53.960 the stock today along with the management changing. So there's 0:04:53.960 --> 0:04:56.919 a lot going there, you know, under the hood. But 0:04:57.200 --> 0:05:00.480 bottom line is we got massive stimulus and down to 0:05:00.560 --> 0:05:04.320 pipe in this country with the tax cuts, with the 0:05:04.360 --> 0:05:06.320 one big beautiful bill, We're going to have about one 0:05:06.400 --> 0:05:10.839 hundred and fifty billion dollars of tax refunds for consumers, 0:05:11.000 --> 0:05:14.120 and the US consumer they've proven over and over again 0:05:14.560 --> 0:05:16.960 that if they're halfway confident with their job and they 0:05:16.960 --> 0:05:19.480 have excess money in their pocket, they're going to spend it. 0:05:19.760 --> 0:05:22.080 So that could be a catalyst moving forward once we 0:05:22.120 --> 0:05:25.160 get into summer. And another thing that nobody's really talking 0:05:25.200 --> 0:05:28.440 about is that this summer we have a few events 0:05:28.480 --> 0:05:30.960 that are kind of unique for this country. We have 0:05:31.200 --> 0:05:33.640 the World Cup here this summer, and we have the 0:05:33.640 --> 0:05:36.840 two hundred and fiftieth anniversary of our country, which. 0:05:36.680 --> 0:05:38.680 Is going to be a lot of steamless in and 0:05:38.720 --> 0:05:39.239 of itself. 0:05:39.560 --> 0:05:42.840 I've seen some projections that the World Cup is going 0:05:42.880 --> 0:05:47.000 to generate about six point five people coming for the event, 0:05:47.480 --> 0:05:51.159 it's going to generate roughly seventeen billion in GDP for 0:05:51.200 --> 0:05:53.800 this country. And you know, with those kind of visitors, 0:05:54.200 --> 0:05:55.960 who's not to say they might stay a little bit 0:05:56.000 --> 0:05:58.320 longer and bolt on a trip to one of the 0:05:58.360 --> 0:06:02.040 Disney parks moving forward, So I think longer term, there 0:06:02.080 --> 0:06:04.719 could be some catalyst to get this stock out of 0:06:04.720 --> 0:06:06.560 the fund that has been in over the past four 0:06:06.640 --> 0:06:09.000 years under the current management. 0:06:09.400 --> 0:06:12.120 We'll talk about management and current management, how do you 0:06:12.160 --> 0:06:14.599 feel about maybe the person who's helped drive the park's 0:06:14.640 --> 0:06:16.599 business becoming the CEO of the whole business again. 0:06:17.800 --> 0:06:21.520 Well, that could be the reason why we've seen some 0:06:21.560 --> 0:06:23.640 weakness today because it could be like, you know, here 0:06:23.680 --> 0:06:26.240 we go again, because if you remember back in twenty twenty, 0:06:26.600 --> 0:06:30.039 we had the same thing happen when I Eiger, you know, 0:06:30.120 --> 0:06:34.839 placed his hand picked successor, Bob Chappick, in control, and 0:06:35.080 --> 0:06:37.840 you know, unfortunately for Chapick, he was put in control 0:06:38.320 --> 0:06:41.320 of the entire operations in February of twenty twenty, so 0:06:41.480 --> 0:06:44.479 we know exactly what happened a month or two later. 0:06:45.360 --> 0:06:47.880 It's kind of hard to run a company when the 0:06:47.960 --> 0:06:51.360 whole economy shuts down and discretionary spending comes to a halt. 0:06:51.400 --> 0:06:54.039 So you know, that might be kind of unfair to 0:06:54.160 --> 0:06:57.000 judge Chappick on that, but there could be some nervousness 0:06:57.000 --> 0:07:00.200 with investors by doing the same thing once again, putting 0:07:00.720 --> 0:07:03.480 the head of the experiences, which again is parts and 0:07:03.560 --> 0:07:06.480 cruise line and gaming ahead at the charge of the company. 0:07:07.080 --> 0:07:08.600 So there might be some hesitancy there. 0:07:08.600 --> 0:07:11.440 But I will say Disney over the past four years 0:07:11.480 --> 0:07:15.160 has nearly doubled their EPs, but yet the stock has 0:07:15.160 --> 0:07:19.480 been essentially flats. We've had massive valuation contraction. And if 0:07:19.520 --> 0:07:21.560 they get the right person in charge that can pull 0:07:21.640 --> 0:07:26.200 the various levers of this company, you know, we can 0:07:26.280 --> 0:07:30.800 have a premium brand once again trading at a premium valuation. 0:07:30.960 --> 0:07:34.600 So right now the stock trades at roughly seventeen times 0:07:35.520 --> 0:07:39.560 to twenty twenty six earn exestimus about six sixty. You know, 0:07:40.040 --> 0:07:43.000 if a market multiple is placed upon this premium brand, 0:07:43.080 --> 0:07:45.120 you know the stock could get into the mid one 0:07:45.240 --> 0:07:47.119 fifties with pretty much ease. 0:07:47.160 --> 0:07:49.720 And so that is significant. 0:07:49.320 --> 0:07:52.040 Upside potential if the right person can make the right 0:07:52.040 --> 0:07:53.080 decisions moving forward. 0:07:54.000 --> 0:07:56.560 If we hear it's Josh, and we know the board 0:07:56.640 --> 0:07:59.160 is voting this week and then they've promised us that 0:07:59.200 --> 0:08:02.240 we would hear by the end of March. If that's 0:08:02.280 --> 0:08:04.720 the case, then where do you think they can drive 0:08:05.400 --> 0:08:08.240 the realization that their IP is worth so much more 0:08:08.280 --> 0:08:10.480 that the spending isn't having to just go up into 0:08:10.520 --> 0:08:13.680 the right when they're trying to market the latest Avatar movie, 0:08:13.800 --> 0:08:16.200 or when they're having to really pay top dollar for 0:08:16.240 --> 0:08:18.000 sporting events. I mean, you just went at length and 0:08:18.040 --> 0:08:20.560 what the soccer means for the US more broadly, but 0:08:21.000 --> 0:08:22.600 when you're trying to stream it or show it, it 0:08:22.640 --> 0:08:23.640 gets very expensive. 0:08:24.760 --> 0:08:27.080 And that's the problem with that side of the business. 0:08:27.400 --> 0:08:31.440 There's significant operating leverage with the variable cost and you know, 0:08:31.520 --> 0:08:34.320 you spend all that variable cost money up front and 0:08:34.840 --> 0:08:35.720 it's almost. 0:08:35.520 --> 0:08:38.000 Like you build it and you hope they show up. 0:08:38.440 --> 0:08:41.440 And so you know, if you get the formula right, 0:08:41.640 --> 0:08:45.400 you spend the money on the content and it's success, 0:08:45.720 --> 0:08:48.840 then that significant leverage for the earnings growth of the company. 0:08:48.840 --> 0:08:52.040 And that's kind of the factor that investors are weighing 0:08:52.120 --> 0:08:54.800 right now with especially with this change in leadership. Could 0:08:54.800 --> 0:08:57.480 it just adds uncertainty to the stock but you know, 0:08:57.559 --> 0:09:02.880 once again, you know, and uncertainty lead to opportunity, and 0:09:02.920 --> 0:09:05.240 their opportunities how you make money in the stock over 0:09:05.720 --> 0:09:06.360 market cycle. 0:09:06.600 --> 0:09:08.360 Daniel Payne a Slate Stone Wealth. 0:09:08.440 --> 0:09:11.760 I appreciate it coming on today and coming up the US. 0:09:11.800 --> 0:09:13.199 It aims to slash. 0:09:12.840 --> 0:09:16.160 Its reliance on Chinese rare earths and other metals. We'll 0:09:16.160 --> 0:09:17.720 tell you all about the plans for the first of 0:09:17.720 --> 0:09:20.280 its kind stockpile for the US private sector. 0:09:20.600 --> 0:09:22.199 That's next as a blomleg tech. 0:09:29.960 --> 0:09:32.360 President Trump, Well, it's set to launch a twelve billion 0:09:32.400 --> 0:09:36.280 dollar stockpile of strategic critical minerals. The move set to 0:09:36.280 --> 0:09:39.600 count US lance on Chinese rare earth but send prices 0:09:39.640 --> 0:09:42.600 for related companies higher. But it's all according to sources 0:09:42.640 --> 0:09:45.160 thus far. Let's bring in Bloomberg's tech editor in DC, 0:09:45.320 --> 0:09:47.480 Mike Shephard, tell us about this first of its kind 0:09:47.760 --> 0:09:51.280 store for US private sector. What do we know is 0:09:51.320 --> 0:09:53.360 set to potentially be announced here, Mike. 0:09:54.400 --> 0:09:57.120 Well, what we're looking for is the US Export Import 0:09:57.160 --> 0:10:00.520 Bank to take a vote later today on approving this package. 0:10:00.559 --> 0:10:02.839 The private sector will kick in about one point six 0:10:02.840 --> 0:10:06.000 to seven billion dollars as part of this seed money, 0:10:06.200 --> 0:10:09.080 and the US Export Import Bank will kick in another 0:10:09.200 --> 0:10:12.640 ten billion dollars, and this would be the biggest such 0:10:12.720 --> 0:10:15.960 deal in the Bank's history by far. And it really 0:10:16.000 --> 0:10:18.360 is a sign of just how much the administration is 0:10:18.440 --> 0:10:21.200 pushing in this area of rare roots and critical minerals 0:10:21.440 --> 0:10:24.560 and trying to wean the US from its dependence on 0:10:24.800 --> 0:10:29.200 China as a key source for these inputs. They're so 0:10:29.520 --> 0:10:33.800 essential to the private sector, to autos, to iPhones, to 0:10:34.640 --> 0:10:39.320 gas turbines even and without access to them, we risk 0:10:39.800 --> 0:10:44.240 seeing a manufacturing supply chain disruption akin to what we 0:10:44.320 --> 0:10:48.720 risk experiencing earlier last year when the Chinese government started 0:10:48.720 --> 0:10:51.920 to impose some of those export controls on rare earth. 0:10:51.960 --> 0:10:54.840 So the US is trying to diversify around it and 0:10:55.000 --> 0:10:57.920 ensure both pricing stability and supply stability. 0:10:57.960 --> 0:10:58.160 Here. 0:10:58.200 --> 0:11:04.359 Caro administration officials have been detailing what could be announced. 0:11:04.760 --> 0:11:07.839 But what's interesting, Mike is through which countries are we 0:11:07.920 --> 0:11:10.559 going to be sourcing from and what sort of backstops 0:11:10.559 --> 0:11:14.679 do these The export import back need to know that 0:11:14.720 --> 0:11:18.120 they can sell this on correctly and not be landed 0:11:18.160 --> 0:11:19.240 with an awful lot of minerals. 0:11:20.360 --> 0:11:24.040 Well, the idea is to ensure that US manufacturers have 0:11:24.200 --> 0:11:27.040 this access, and it would create this stockpile akin to 0:11:27.080 --> 0:11:31.400 the Strategic Petroleum Reserve here that manufacturers here in the 0:11:31.480 --> 0:11:34.280 US could access is needed, they would have to pay 0:11:34.320 --> 0:11:37.160 into it to be able to eventually make purchases and 0:11:37.200 --> 0:11:40.040 then promise to replenish it down the road. But this 0:11:40.120 --> 0:11:43.080 is just one of several steps in the area of 0:11:43.160 --> 0:11:45.559 rare earth that the US government is taking right now. 0:11:45.800 --> 0:11:48.439 Later this week there will be meetings with dozens of 0:11:48.480 --> 0:11:51.960 foreign ministers here in Washington to agree on trying to 0:11:52.000 --> 0:11:55.960 find some way to create a mechanism to stabilize prices 0:11:56.040 --> 0:11:58.720 and supply around the world, not just here in the US, 0:11:58.720 --> 0:12:01.880 but with allies, so that collectively they can reduce some 0:12:01.960 --> 0:12:05.240 of their dependence on China and increase extraction, mining and 0:12:05.280 --> 0:12:08.439 refining in a number of other countries. While we call 0:12:08.520 --> 0:12:11.120 them rare earths, they are actually fairly common. It is 0:12:11.280 --> 0:12:14.319 just that they are not extracted or exploited in as 0:12:14.320 --> 0:12:17.480 many places as they are, and to the extent that 0:12:17.600 --> 0:12:20.560 China has come to dominate the market and cara. The 0:12:20.559 --> 0:12:23.800 clock is ticking. Remember that the trade truths that the 0:12:23.840 --> 0:12:29.360 President signed with Shijinping late last year, it's only good 0:12:29.400 --> 0:12:32.000 for one year, so they have to start making these 0:12:32.040 --> 0:12:35.840 moves to ensure that supply won't be as disrupted as 0:12:35.840 --> 0:12:40.680 a risk being facing earlier last year before the trade agreement. 0:12:40.960 --> 0:12:43.360 I'll see how project vaulted it is known continues being 0:12:43.360 --> 0:12:46.240 by to Smack Shepherd. Thanks for detailing all of this. 0:12:46.640 --> 0:12:49.600 Let's get the broader economic picture now to well what's 0:12:49.640 --> 0:12:52.080 moving tech stocks in particular Natal Gallagher's with US principal 0:12:52.120 --> 0:12:53.480 economists and director at Board. 0:12:53.679 --> 0:12:56.679 Just going back to that rarer suggestion, is. 0:12:56.640 --> 0:12:59.760 That positive do we need is supply chain, real headache 0:12:59.800 --> 0:13:01.080 for the this is out there right now. 0:13:02.120 --> 0:13:02.360 Yeah. 0:13:02.400 --> 0:13:04.840 Absolutely, you know what we're seeing as a fundamental shift 0:13:04.880 --> 0:13:08.160 in how the US has really been addressing supply chain 0:13:08.160 --> 0:13:11.200 resilience over the past few years and absolutely top of 0:13:11.240 --> 0:13:14.920 mind following the export control measures by China back in 0:13:14.960 --> 0:13:17.880 twenty twenty five. You know what, in essence we're doing 0:13:17.960 --> 0:13:20.760 is we're creating a strategic preserve of rare earth menerals 0:13:20.840 --> 0:13:23.200 for the digital economy, which means that we're less at 0:13:23.200 --> 0:13:26.959 the behest of foreign entities as we try to continue 0:13:26.960 --> 0:13:30.080 to move forward right in AI innovation and all the 0:13:30.120 --> 0:13:32.440 potential for the economy that that really houses. 0:13:33.080 --> 0:13:36.319 A lot of the focus has been not so much 0:13:36.360 --> 0:13:38.360 on supply chain of rare US as well as that, 0:13:38.520 --> 0:13:40.680 but also really just the bottlenecks that we see in 0:13:40.760 --> 0:13:43.400 delivering the AI hope and euphoria that is built into 0:13:43.440 --> 0:13:46.760 the market, whether that's power, that's energy, whether it's land. Natalie, 0:13:46.800 --> 0:13:49.560 where do you stand in terms of the reality of 0:13:49.640 --> 0:13:52.200 AI and what has been thus far driving a lot 0:13:52.240 --> 0:13:54.760 a lot of stock share and shares high this year? 0:13:55.880 --> 0:13:56.120 Yeah? 0:13:56.160 --> 0:13:59.440 Absolutely, I mean twenty twenty five we saw a really 0:13:59.520 --> 0:14:03.840 intense increase in valuations there's a lot of hope in 0:14:04.080 --> 0:14:06.840 what AI can deliver. We heard that at the DeVos 0:14:06.920 --> 0:14:11.040 Economic Forum, also allowed and clear by many key tech 0:14:11.160 --> 0:14:14.280 and political leaders as well. Now, in order for these 0:14:14.320 --> 0:14:16.199 valuations to hold in twenty twenty six, and what we're 0:14:16.240 --> 0:14:17.520 really going to have to see and it's going to 0:14:17.559 --> 0:14:20.520 sort of earmark the year, is a close right in 0:14:20.600 --> 0:14:23.720 the gap between how much is being spent on AI 0:14:24.000 --> 0:14:26.920 and the ROI that we're actually going to achieve. If 0:14:26.920 --> 0:14:30.280 we get those productivity gains, then this is absolutely a 0:14:30.280 --> 0:14:34.040 great story of foresight. If we don't see those productivity gains, 0:14:34.040 --> 0:14:36.600 then we're going to have a conversation much more housed 0:14:36.640 --> 0:14:38.000 around capital misallocation. 0:14:38.240 --> 0:14:39.920 But now, Sie, how's that going to show up? As 0:14:40.000 --> 0:14:43.800 an economist? You looking at job's data? I mean, because 0:14:43.800 --> 0:14:46.480 at the moment, all we're seeing is jobs cuts upon 0:14:46.600 --> 0:14:48.560 jobs cut, which in some way seems to be going 0:14:48.600 --> 0:14:49.120 back to AI. 0:14:50.160 --> 0:14:52.040 Yeah, I mean, it's fascinating right what we're seeing in 0:14:52.080 --> 0:14:54.480 the overall jobs data. I'll first sort of approach that 0:14:54.520 --> 0:14:56.760 and then tell you as an economist what I'm looking at. 0:14:57.040 --> 0:14:59.000 We look at the jobs data, there's not a whole 0:14:59.040 --> 0:15:03.000 lot of evidence that the jobs that are currently being 0:15:03.040 --> 0:15:03.600 cut is. 0:15:03.600 --> 0:15:04.440 Due to AI. 0:15:04.680 --> 0:15:07.000 Right, we know that that's what companies are saying. At 0:15:07.000 --> 0:15:08.760 the same time, it's not really showing up in a 0:15:08.800 --> 0:15:10.080 clear way in the data. 0:15:11.040 --> 0:15:11.960 On the other hand, what. 0:15:11.880 --> 0:15:15.160 We do really need to see is almost a discontinuous 0:15:15.760 --> 0:15:18.840 jump in the productivity data. Right, So if we're sort 0:15:18.840 --> 0:15:21.840 of on this level increase, what we really want to 0:15:21.840 --> 0:15:24.520 see with AI is we're jumping up and then we're 0:15:24.520 --> 0:15:27.040 on a totally new level playing field when we see that, 0:15:27.080 --> 0:15:29.479 and there should be early adopters in some key industries. 0:15:30.120 --> 0:15:34.120 I'm thinking, you know, healthcare, consulting, finance, we should see 0:15:34.120 --> 0:15:36.160 those early signals and they should be showing up in the. 0:15:36.120 --> 0:15:38.680 Data as soon as twenty twenty six. You think. 0:15:39.960 --> 0:15:42.800 That, I firmly believe that's going to need to happen 0:15:42.840 --> 0:15:46.320 in twenty twenty six in order for these valuations to 0:15:46.400 --> 0:15:47.400 be deemed worthwhile. 0:15:47.760 --> 0:15:50.240 We're going to be getting into these big stories that 0:15:50.280 --> 0:15:52.080 are in the market today of how. 0:15:51.960 --> 0:15:54.560 At the moment we continue to fuel. 0:15:54.480 --> 0:15:57.800 The ever needing expansion of AI infrastructure, whether it's oracles 0:15:57.800 --> 0:16:00.960 selling debt and equity, whether it's well whether or not 0:16:01.000 --> 0:16:02.320 in video is going to be giving up to one 0:16:02.360 --> 0:16:05.320 hundred billion dollars or not to open AI. How are 0:16:05.400 --> 0:16:08.240 you seeing that narrative continue in twenty twenty six, and 0:16:08.240 --> 0:16:09.640 we're going to have to see a pullback in the 0:16:09.640 --> 0:16:11.440 amount that the companies are committing. 0:16:12.160 --> 0:16:14.440 You know, I think it's more so we're really going 0:16:14.520 --> 0:16:16.880 to have to see the ROI in a meaningful way 0:16:16.920 --> 0:16:19.720 that we can go back to. And again that gets 0:16:19.760 --> 0:16:22.680 back to productivity, and the risk really is as we 0:16:22.720 --> 0:16:24.400 sort of pull all of these levers and they get 0:16:24.440 --> 0:16:27.560 more and more complex, it becomes a much more opaic environment, 0:16:27.720 --> 0:16:30.040 right for investors to really operate in, and so the 0:16:30.160 --> 0:16:34.080 risk of those valuations maybe being artificially bolstered goes up. 0:16:35.120 --> 0:16:39.520 Just from your perspective, the narrative of circular deals is 0:16:39.560 --> 0:16:42.480 that actually, in many ways we often put it in 0:16:42.480 --> 0:16:45.440 a negative context, but that's exactly what in VIDEOS should 0:16:45.440 --> 0:16:48.200 be doing, investing in its own clients to be able 0:16:48.240 --> 0:16:50.320 to foster the potential ROI that we might see in 0:16:50.360 --> 0:16:51.680 this locks that jump. 0:16:52.760 --> 0:16:54.160 Yeah, I mean absolutely right. 0:16:54.200 --> 0:16:57.960 So if we see this truly meaningful transformation in the 0:16:58.000 --> 0:17:01.240 economy that's sort of promised with AI, then. 0:17:01.200 --> 0:17:02.320 We're in a great spot, right. 0:17:02.360 --> 0:17:07.040 These circular investing schemes that is excellent foresight by these companies. 0:17:07.920 --> 0:17:10.400 If we don't see that, right, that's the real risk 0:17:10.520 --> 0:17:14.480 of pretty significant market correction, right because that investing scheme, 0:17:14.560 --> 0:17:17.119 it is bolstering the overall revenue numbers that we're seeing. 0:17:17.480 --> 0:17:19.240 What therefore are some more of the headwinds. 0:17:19.320 --> 0:17:23.720 Other than waiting for ROAI, we're also still tackling tariffs, 0:17:23.720 --> 0:17:26.280 We're still worried about South Korea's relationship with the United States, 0:17:26.280 --> 0:17:28.399 for example in the here and now, let alone China. 0:17:28.440 --> 0:17:30.640 What could be the headwind that you're looking out for? 0:17:32.240 --> 0:17:35.120 You know, one head wind I'm particularly interested in tracking 0:17:35.400 --> 0:17:38.320 is actually jobs. Right, So we're in a labor market overall. 0:17:38.320 --> 0:17:41.080 When we talk about the macroeconomy that's quite soft. But 0:17:41.320 --> 0:17:45.879 when we speak specifically to AI, machine learning, sort of 0:17:45.880 --> 0:17:48.240 these high powered tech jobs, we have a little bit 0:17:48.280 --> 0:17:50.840 of a bottleneck there. And so something really interesting that 0:17:50.880 --> 0:17:53.520 came out of the US Taiwan trade deal just a 0:17:53.520 --> 0:17:57.720 few weeks ago was this goal, right of onshoring significant 0:17:57.800 --> 0:18:00.679 supply chain efforts from Taiwan to the US. 0:18:00.720 --> 0:18:02.720 In order to do that, we're also. 0:18:02.480 --> 0:18:06.320 Going to need significant changes in our workforce development. And 0:18:06.359 --> 0:18:09.000 there's a risk there, right, because We've had meaningful policy 0:18:09.080 --> 0:18:10.640 changes over the last year alone. 0:18:10.800 --> 0:18:14.000 Fascinating Take Massady Gaga come back soon, we hope. Principal 0:18:14.000 --> 0:18:18.359 economist over at Board coming up, elamsk will is in 0:18:18.359 --> 0:18:22.040 advanced talks to combine SpaceX with Xai. Will have all 0:18:22.040 --> 0:18:33.240 the details. Next, this is Broombed Tech checking on on 0:18:33.280 --> 0:18:37.320 Tesla shares well. We're seeing the impact of European sluggishness again. 0:18:37.440 --> 0:18:39.760 You saw it throughout twenty twenty five, but down two. 0:18:39.640 --> 0:18:40.120 And a half percent. 0:18:40.200 --> 0:18:42.920 As we understand, European car sales of Tesla's in particular 0:18:43.240 --> 0:18:47.240 slumped into twenty twenty six, in particular absolutely plummeting French 0:18:47.240 --> 0:18:49.480 shells down forty two percent. They only sold six hundred 0:18:49.480 --> 0:18:53.320 and sixty one cars. Norway registrations plunging eighty eight percent. 0:18:53.359 --> 0:18:54.119 But that says we. 0:18:54.200 --> 0:18:57.160 Hear specific changes in policy over in Noise in particular, 0:18:57.240 --> 0:19:01.919 but look generally Evy registrations going higher in Europe, but 0:19:02.160 --> 0:19:04.840 just not the Tesla, whether it's a political read across 0:19:04.920 --> 0:19:06.960 or whether indeed it continues to be something around the 0:19:06.960 --> 0:19:10.680 brand and a slower adoption of older models versus the 0:19:10.760 --> 0:19:13.159 Chinese one. But let's move on to other areas of 0:19:13.160 --> 0:19:16.399 Elon Musk's empire right now, because we understand that he 0:19:16.520 --> 0:19:20.560 is in advanced talks to combine SpaceX with Xai, according 0:19:20.560 --> 0:19:22.760 to sources, a deal that would combine, of course, two 0:19:22.760 --> 0:19:24.920 of the largest closely held companies in the world. I 0:19:25.040 --> 0:19:28.320 just think XAAA is valued two hundred billion dollars. SpaceX 0:19:28.600 --> 0:19:30.640 is currently worth eight hundred billion dollars at the last 0:19:30.640 --> 0:19:33.520 Camp and their Deals Team Managing editor Ianna Baker joins 0:19:33.560 --> 0:19:35.960 us some more, there's been a lot of conversation about 0:19:36.000 --> 0:19:39.760 somehow his empire combining forces, whether it's Tesla and SpaceX 0:19:39.840 --> 0:19:42.000 or Xai and SpaceX. It looks like the latter is 0:19:42.200 --> 0:19:43.160 the more likely at the moment. 0:19:43.320 --> 0:19:46.000