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Speaker 3: Surely that is the discussion here, how to understand what
Speaker 3: national security is, how to correctly regulate technology at a
Speaker 3: time where people are talking about the potential influence of
Speaker 3: artificial intelligence. We turn out to someone who is brave
Speaker 3: enough to make the commute directly from the inauguration festivities
Speaker 3: in Washington, DC to the alpine vistas of Davos, Switzerland,
Speaker 3: Arkansas Governor Sarah Huckabee Sanders joining us now here in Davos.
Speaker 4: I am wondering, Governor.
Speaker 3: Sanders, given the fact that a lot of people didn't
Speaker 3: decide to make that journey, are acting like an ambassador
Speaker 3: fielding a lot of questions.
Speaker 4: What are some of the questions people have for you?
Speaker 5: Certainly don't need an ambassador. President Trump will address the
Speaker 5: group here today, although he can't be here in person,
Speaker 5: certainly dominating almost every conversation.
Speaker 6: But not just here across the globe. I think there
Speaker 6: is so.
Speaker 5: Much excitement, so much optimism about him coming back into
Speaker 5: the White House.
Speaker 6: People across the world are excited to see what he's
Speaker 6: going to do.
Speaker 5: And he's hit the ground running and gotten a lot
Speaker 5: done in a short amount of time. This is somebody
Speaker 5: who now is coming in as a seasoned veteran. He
Speaker 5: has been there before, and there's no learning curve. He
Speaker 5: is getting a lot of things done and in short order,
Speaker 5: and the people are excited to see what's happening.
Speaker 3: Henry was just talking about some of the discussions around
Speaker 3: TikTok last night on Fox News and this question around
Speaker 3: what is Nash security. How do you adequately regulate big
Speaker 3: tech when you have also this focus on celebrating the
Speaker 3: national champions of US tech companies.
Speaker 4: You're here to talk about tech, how.
Speaker 5: Do you reconcile that you know, one of the things
Speaker 5: that we're looking at, and certainly one of the places
Speaker 5: that we're leading in Arkansas and as governor is you
Speaker 5: can protect national security, you can look at continuing to
Speaker 5: grow some of the technology and innovation. But one of
Speaker 5: the places I think that we have to do a
Speaker 5: better job is on our young people. We've seen a
Speaker 5: mental health crisis take place and nobody is immune from it.
Speaker 5: And so one of the things that we can do
Speaker 5: is a better job protecting the young people from constant
Speaker 5: access and infiltration of NonStop device in their hand. They
Speaker 5: still need to get outside, they still need to pay
Speaker 5: attention in class. That's one of the things we've been
Speaker 5: doing in Arkansas. One of the things that we've talked
Speaker 5: about here, and I think one of the things.
Speaker 6: That I hope to see the United States lead on.
Speaker 3: And someone who sees a lot of children, and I
Speaker 3: think there are a lot of people who would agree
Speaker 3: with you.
Speaker 4: There is this large attention.
Speaker 3: Though, and last night we really saw that in display
Speaker 3: when President Trump was talking about they're just a bunch
Speaker 3: of kids looking at some silly videos.
Speaker 4: Do we really need to care about that so much?
Speaker 4: Do you agree with that premise or is this.
Speaker 3: Something that goes to national security but also.
Speaker 4: The heart of something else.
Speaker 3: About what it means to have appropriate technology.
Speaker 5: Certainly, there can be a great resource in technology. It's
Speaker 5: a tool that a lot of us use to I
Speaker 5: think one of the reasons that Donald Trump became president
Speaker 5: is because he was able to use technology to get
Speaker 5: his own message out and go around the mainstream media
Speaker 5: and talk directly to the people.
Speaker 6: And so I think it can be a great tool.
Speaker 5: However, it can't be something that our kids are spending
Speaker 5: ten hours a day doing, and that's one of.
Speaker 6: The things I think that we have to look at.
Speaker 5: One of the things we're talking about a lot, the pressure,
Speaker 5: the anxiety, the depression, the suicide rates that have skyrocketed
Speaker 5: in large part because a total access and connection to
Speaker 5: social media, and so protecting kids I think has to
Speaker 5: be one of the big topics of conversation.
Speaker 4: Do you think the President Trump agrees?
Speaker 5: You know, that's a conversation I haven't had with them,
Speaker 5: but it's something certainly that I look forward to talking
Speaker 5: about with him as he takes the reins here at
Speaker 5: the White House.
Speaker 3: Do you think there is clarity about what national security
Speaker 3: is and what is it?
Speaker 5: I think there are some big differences in kids versus
Speaker 5: national security, and whether or not they can focus in
Speaker 5: the classroom, and whether or not other countries are taking
Speaker 5: all of our data. Those are very different conversations. This
Speaker 5: is a president who I know cares a lot about
Speaker 5: protecting American interest and is always going to do what
Speaker 5: is necessary to protect our country. You've seen him taking
Speaker 5: action on day one, so I have no doubt, no
Speaker 5: concern over that.
Speaker 6: One of the things I do think that has.
Speaker 5: To be a greater part of the discussion is the
Speaker 5: mental health impact that it.
Speaker 6: Is having on young people.
Speaker 4: You're on two panels. One of them is talking about this.
Speaker 3: The other one is with Kentucky Governor Andy Basheer, who
Speaker 3: is a Democrat, and I believe you guys are staying
Speaker 3: in a similar place and imagining the sharks of.
Speaker 4: Jets walking past each other.
Speaker 3: It's a panel about the role of governors and states
Speaker 3: in a presidential transition and implementing policy. And this comes
Speaker 3: at a time where President Trump has basically said get
Speaker 3: on board or face the consequences.
Speaker 4: Do you think that that is the right way to
Speaker 4: get states on board.
Speaker 6: I have a great partnership.
Speaker 5: I want Arkansas to be one of the leaders of
Speaker 5: a lot of the initiatives of the President is pushing
Speaker 5: we're going to be one of the biggest champions, and
Speaker 5: I want us to be a place of innovation and
Speaker 5: use Arkansas as a pilot for some of the programs
Speaker 5: that we're rolling out. I think on healthcare, there is
Speaker 5: a lot of opportunity to do things in a better
Speaker 5: way than what we've done, and I think this is
Speaker 5: a president that's going to be able to do that.
Speaker 5: A good relationship with the states is a good thing.
Speaker 5: We shouldn't be in constant battle between the federal government
Speaker 5: and our state governments, and I think that's one of
Speaker 5: the things that you'll see both of us talk about
Speaker 5: how we can have good cooperation and get things done
Speaker 5: that benefit the people that we govern.
Speaker 3: It's a good precedent for funding to be withdrawn though
Speaker 3: from states that.
Speaker 4: Don't comply with certain orders from the president.
Speaker 5: Look, I am in agreement with where the President is
Speaker 5: and the things that he's trying to do, and I
Speaker 5: think we're going to be able to not only improve
Speaker 5: things happening in Arkansas, but hopefully things happening in all
Speaker 5: fifty states. This is a president who's coming in with
Speaker 5: a huge mandate. People want to see his policies enacted.
Speaker 5: They know exactly what they signed up for because they've
Speaker 5: seen his leadership style, and he won in an overwhelming margin,
Speaker 5: and that's what people are hoping. He's going to come
Speaker 5: in and deliver on all the things that he's been
Speaker 5: talking about over the last couple of years.
Speaker 4: Have you talked with Governor VISHERI yet.
Speaker 5: I haven't yet, but I'm looking forward to spend some
Speaker 5: time with him this afternoon.
Speaker 3: But you guys both are the children of governors, I believe,
Speaker 3: and you both are coming to the stage, but from
Speaker 3: opposite sides, one Democrat yourself a Republican.
Speaker 4: Do you expect it to be collegial?
Speaker 3: Do you expect it to be a working together kind
Speaker 3: of feeling, or do you feel like that divide is
Speaker 3: getting more entrenched?
Speaker 6: Absolutely?
Speaker 5: I think that you know, governors have a unique perspectiveive,
Speaker 5: and certainly I want to promote and bring the business
Speaker 5: and economic development to my state. I know he wants
Speaker 5: to do the same. But there's some common threads and
Speaker 5: some common challenges that we're both dealing with. I think
Speaker 5: that we'll have a great conversation. I'm really looking forward
Speaker 5: to it.
Speaker 3: One other reason why you're here is to meet with
Speaker 3: all these business leaders about potentially investing in Arkansas. Are
Speaker 3: there specific projects that you would like to see finance,
Speaker 3: There's specific streams of business that you think would be
Speaker 3: helpful to get international investment.
Speaker 5: Certainly, one of the biggest areas of growth in our
Speaker 5: state is aerospace and defense.
Speaker 6: It's now the number one export from Arkansas.
Speaker 5: Arkansas has the best economic growth of any state in
Speaker 5: the country over the last year. We're the number one
Speaker 5: state for people to move into anywhere in the country.
Speaker 5: There's a lot of great things happening in our state.
Speaker 5: We like to teut that we are home to fortune,
Speaker 5: one little retailer you may have heard of called Walmart.
Speaker 6: So we're not.
Speaker 5: Afraid of big business and success stories in Arkansas. And
Speaker 5: we have the opportunity to meet with a lot of
Speaker 5: companies and let them know that we're open and we're
Speaker 5: ready for them to invest and make Arkansas their home
Speaker 5: as well.
Speaker 3: How many meetings are you having me how much did
Speaker 3: you get just an influx of people who wanted to
Speaker 3: meet with you, And did anyone surprise you or any
Speaker 3: places surprise you where they came from.
Speaker 5: It's certainly a busy couple days and look forward to
Speaker 5: making them a really productive few days with a lot
Speaker 5: of good things to take back home to Arkansas.
Speaker 3: Are you concerned though, that there's this feeling that maybe
Speaker 3: the US is putting itself first of the loss of
Speaker 3: other countries.
Speaker 4: Not at all.
Speaker 6: I think it's important.
Speaker 5: Everybody is going to be competing for the people that
Speaker 5: they either governor or lead, and that's exactly what you're
Speaker 5: going to get in Donald Trump. It's somebody he hasn't
Speaker 5: been shy about the fact that he wants.
Speaker 6: America to win.
Speaker 5: There's nothing negative about wanting the best for your country
Speaker 5: and the people that you lead, and I think that
Speaker 5: people want to see him do that, and that's why
Speaker 5: he won reelection in such.
Speaker 6: A big way.
Speaker 3: Governor Sanders, really appreciate your time and you're making the
Speaker 3: trek from Washington, d C too, Davos. Not many people
Speaker 3: that Arkansas Governor Sarah Hockeyby Sanders.
Speaker 7: Did blood block.
Speaker 2: Jamanabaschi leading our coverage added Bay with us here in Davios,
Speaker 2: Switzerland and sitting down with a special guest, Hey, Jamana, Hi.
Speaker 8: Guys, Yeah, good morning to you.
Speaker 9: So yeah, sitting with me right now, is this Excellency
Speaker 9: Mohammad al Jadan, the Saudi Finance Minister. Really good to
Speaker 9: be talking to you, my colleagues in the US. We're
Speaker 9: just talking about the excitement many people, many industry leaders
Speaker 9: feel about.
Speaker 8: The prospects of the US economy this year.
Speaker 9: But my question to you is how does the rest
Speaker 9: of the world feel about it. What do you think
Speaker 9: the return of Trump means and his talk of taris
Speaker 9: for global growth.
Speaker 10: Thank you very much for having me, and I think
Speaker 10: a very strong US economy is a good thing for
Speaker 10: the world and the world economy. The same applies to
Speaker 10: other major economies. If they go south, the whole world
Speaker 10: would really feel it.
Speaker 11: So we are excited the world gets called exactly.
Speaker 10: I mean, we are excited about the US new administration,
Speaker 10: and we are excited about the US economy.
Speaker 11: We think the.
Speaker 10: Next few years would actually show strength and the US
Speaker 10: economy and that.
Speaker 11: Will be good for the whole world.
Speaker 10: Obviously, we need to be watchful, we need to make
Speaker 10: sure that we also support cooperation and multilateral institutions. But
Speaker 10: I am confident that the US economy would be positive
Speaker 10: and I think that I m F and their latest
Speaker 10: report showed that the US is on the upside.
Speaker 9: It seems like His World Highness the Crown Frience had
Speaker 9: a constructive call with President Trump yesterday. A lot of
Speaker 9: reports this morning saying that Saudi plans to invest up
Speaker 9: to six hundred billion dollars in the US over the
Speaker 9: next four years. For people not familiar with those figures,
Speaker 9: that's about fifty five percent of Saudi GDP. You're the
Speaker 9: finance minister or are you going to get that money?
Speaker 10: This is I mean Saudi Press Agency actually issued a
Speaker 10: sesatement on this. We enjoy a very strong relationship with
Speaker 10: the US over the years. I mean we have a
Speaker 10: relationship that spans over eight decades, very strategic based on economic,
Speaker 10: economy and trade and will continue. I mean we have
Speaker 10: currently we have over seven hundred and seventy billion dollars
Speaker 10: of investments in the US, So this is not really new.
Speaker 10: This is a combination of investments and procurements. We have
Speaker 10: very ambitious plans in Saudi Arabia. Saudivision twenty thirty is
Speaker 10: moving on plan and our relationship budde Is with the US,
Speaker 10: with Europe, with China will continue to be flourishing. As
Speaker 10: part of that reform that we are doing.
Speaker 9: I guess I just think about it from a funding perspective,
Speaker 9: because there are mega projects that Saudi Auba has committed to,
Speaker 9: and we've talked about the reprioritization of and the redirection.
Speaker 8: Of funds over the last year.
Speaker 9: But then there are new projects that Saudi is taking
Speaker 9: on as well. The World Cup, for example, Cutter spent
Speaker 9: two hundred billion dollars on that. So the question I
Speaker 9: think from the investment community is if you are planning
Speaker 9: on borrowing more, how much balance sheet deterioration are you
Speaker 9: willing to tolerate.
Speaker 10: We have in Soba have a very strong actually fiscal
Speaker 10: buffers very strong, and we are very very careful about
Speaker 10: what we spend, how we spend it. Undred ten on
Speaker 10: that spend, we have a very clear plan. We moved
Speaker 10: from just three years fiscal plan and to actually a
Speaker 10: long term fiscal plan. We've concluded this last year, so
Speaker 10: we know exactly what we are going to spend, where
Speaker 10: are we going to get that money from, how we
Speaker 10: are going to make sure that it helps the economy
Speaker 10: and not.
Speaker 11: Cloud out the private sector.
Speaker 10: That is a long term plan and all of these
Speaker 10: projects will fall in place within that context. We recalibrated
Speaker 10: what we need to do, and we wanted to make
Speaker 10: sure that we prioritize what would make matters. We wanted
Speaker 10: to make sure that we don't overheit the economy, so
Speaker 10: we extended some of these projects over an extended period
Speaker 10: of time, and we wanted to make sure that our
Speaker 10: private sector benefits.
Speaker 11: So if we do too much.
Speaker 10: At a short period of time, the private sector will
Speaker 10: not catch up, so we will have a lot of
Speaker 10: leakage from our economy by importing a lot of things.
Speaker 10: So we wanted really to balance it, and that's what
Speaker 10: we did in the long term plan. I think if
Speaker 10: you want to see how this actually is reflecting in Saudi,
Speaker 10: you will need to see what is happening with the
Speaker 10: people in sauda Abia. They are embracing this change. I
Speaker 10: mean if you visit and you could see it, they
Speaker 10: are really part of that change. You could see it
Speaker 10: in the PMI and the Purchasing Managers Index, which is
Speaker 10: very high.
Speaker 9: I'll get to the growth question in a second, but
Speaker 9: I do just want to ask on the funding. Can
Speaker 9: we expect further sales of the government's taken ARAMCO.
Speaker 10: There is no extra funding than what we have planned
Speaker 10: for the long term plan. And you know Aramco or
Speaker 10: other assets is bart of a plan, so there's nothing
Speaker 10: immediate to talk about. But this is actually bart of
Speaker 10: a long term plan that we started in sixteen.
Speaker 8: Yeah.
Speaker 9: On the growth, IMF actually marginally downgraded the Saudi estimate
Speaker 9: for this year, looking to three point three percent for
Speaker 9: twenty twenty five, and partially on back of Saudi's lower
Speaker 9: oil production, and of course this was a decision taken
Speaker 9: by OPEK plus. And I just wonder how long you
Speaker 9: think Saudi Arabia can continue with producing less and yet
Speaker 9: continuing to achieve those non oil GDP figures that you target.
Speaker 10: This is actually a very good question, spot on, And
Speaker 10: I think the whole idea behind Saudivision twenty thirty is
Speaker 10: exactly this is to deal with these things. We were
Speaker 10: an economy that is totally dependent. When a commodity and
Speaker 10: the voluntility of that commodity impacts the economy, it's the
Speaker 10: boom and bust. We are decoupling the Saudi economy from
Speaker 10: the oil economy, okay, And you could see that and
Speaker 10: actual numbers, I mean numbers does not lie. The NANOILGDB
Speaker 10: bar to the economy is now about fifty two percent.
Speaker 10: The private sector investment as a percentage of GDB has
Speaker 10: seen a structural change. You don't see private sector investment
Speaker 10: as a percentage of GDB changing very quickly in any economy.
Speaker 10: We are seeing that in Saudaibia jumped from about seventeen
Speaker 10: percent now it is twenty four percent. That is a
Speaker 10: serious shift in the economy. The consumption is very strong.
Speaker 10: I mean you look at the confidence both at the
Speaker 10: business side but also at the consumer side.
Speaker 11: It's strong.
Speaker 8: Yeah, your excellency, just around things up.
Speaker 9: Saudi Arabia for so long has been a place where
Speaker 9: investors from around the world have come to receive funding,
Speaker 9: to receive capital. How successful has the Kingdom been in
Speaker 9: terms of mobilizing these funds domestically and encouraging the international
Speaker 9: community to actually invest into Saudi Arabia.
Speaker 11: Very important point.
Speaker 10: A lot of focus on f THEI. I'll cover f THEI,
Speaker 10: but I will cover actually prerequisite for the FDI.
Speaker 11: For FDI to.
Speaker 10: Come, you need to make sure that actually you attract
Speaker 10: your own local investors to invest in your economy. These
Speaker 10: are their colleagues, their friends, their partners elsewhere in the world.
Speaker 10: And if you are not able to convince your local
Speaker 10: investors to invest, you will not be able to convince
Speaker 10: their foreign investors. And we are achieving both. I think
Speaker 10: we are seeing significant growth and local investments in Saudi
Speaker 10: Arabia and we are seeing I think Misa, your investment
Speaker 10: published a few weeks back, what is the targets under
Speaker 10: the Saudi National Investment Strategy over the last four years
Speaker 10: and what have we achieved in terms of FDI And
Speaker 10: every year, without failm we came ahead of the target and.
Speaker 11: That is continuing.
Speaker 10: I think Saudi offers significant opportunities for investors local and
Speaker 10: international in multiple years of space where we have competitive advantage.
Speaker 8: You're acceeny. I'm going to leave it there.
Speaker 9: Thank you very much for sharing your perspectives about the
Speaker 9: outlook for the Saudi economy and funding as the kingdom
Speaker 9: continues to implement Saudi twenty thirty.
Speaker 2: State paliucasat down with us and Lisa linds in and
Speaker 2: goes apart from sports.
Speaker 4: Okay, okay, hold on a second.
Speaker 12: You've been talking about at Alerta for like about three
Speaker 12: years now, and you're so excited, and I know that
Speaker 12: the whole thing is going to be about Atlanta, and
Speaker 12: I think that that's wonderful, but it's a.
Speaker 3: Lot of teles in a lot of places.
Speaker 4: Really, you're going to do.
Speaker 2: This in the capital private equity Senior advice that joins
Speaker 2: us now Thine Steve, Hello, good to see you.
Speaker 11: Great to be here.
Speaker 7: Let's start with sports.
Speaker 11: I thought it was in ESPN.
Speaker 7: We had to get on that night because that's Atlanta
Speaker 7: five NOL. What a story for that team this year.
Speaker 11: You know, I'm still pinching myself.
Speaker 13: It's just incredible and very happy for the team and
Speaker 13: the coach and the Procrassi family. It's been great for
Speaker 13: Bergermon and Milan and it's just really exciting.
Speaker 2: I don't need to get too excited, but can you
Speaker 2: win the league this year?
Speaker 13: You know the old adage take it one game at
Speaker 13: a time, so we just was going to do. We've
Speaker 13: got to get healthy. We got a couple of guys
Speaker 13: that are hurt, but they're playing fantastic.
Speaker 2: It's amazing to see Barcelona up next and maybe straight
Speaker 2: qualification to the not the next round, but the one
Speaker 2: after that, right big, that would be a big big
Speaker 2: for European would go to Barcelona.
Speaker 7: That's the football. Okay, I to the basketball. You should
Speaker 7: do best.
Speaker 4: Actually, there's a lot of.
Speaker 2: Reports that you're after majority ownership of the Boston outtakes.
Speaker 7: How much can you tell us this morning?
Speaker 11: I can't comment, as you know, on any deals, including.
Speaker 7: That deal, okay that one specifically?
Speaker 2: Can we talk more broadly about the NBA franchises and
Speaker 2: what's happening there, because I have nights at the audience
Speaker 2: levels TV audience levels have fallen off in some parts.
Speaker 7: What do you think is behind that?
Speaker 13: You know, I think I think it's fragmentation of viewing,
Speaker 13: and I think the viewing leaderships are really good when
Speaker 13: they can count it correctly and really find out who's
Speaker 13: watching where. So I don't think there's a concern there
Speaker 13: in the league is really strong and has more stars
Speaker 13: than ever, and you know, it's been fantastic, So I
Speaker 13: think that's a that's kind of a bump in the room.
Speaker 3: So we've covered football, we've covered basketball, any other sports
Speaker 3: that you're going to buy a team in.
Speaker 11: No, I'm not in a cricket so I'm good.
Speaker 1: Well, there's I mean, honestly, there's actually a lot to
Speaker 1: talk about it and whether you're going to buy another team?
Speaker 4: Are you going to buy another team?
Speaker 11: Who knows.
Speaker 3: Okay, All right, well let's move on because right now
Speaker 3: we talk about Davos and it hall has been dominated
Speaker 3: by incredible optimism. America is going to boom, and Donald
Speaker 3: Trump what's he going to do?
Speaker 4: Of course, there's also overlay of artificial.
Speaker 3: Intell what's been your biggest takeaway about what people are
Speaker 3: concerned about with the Trump administration?
Speaker 13: Well, I think first of all, this Estavos is all Trump,
Speaker 13: all AI. That's all people are talking about. And the
Speaker 13: Trump issue is, you know, what's going to happen with tariffs.
Speaker 13: You know, Europe's worried about tariffs everyways, worried about tariffs,
Speaker 13: What's going to happen with the Ukraine, What's going to
Speaker 13: happen with the American economy and protectionism? That's that's their worry.
Speaker 11: And on AI, you know, AI is for real.
Speaker 13: It feels a little bit like you're in nineteen ninety
Speaker 13: nine Internet boom.
Speaker 11: So there's a lot of hype, but there's a lot
Speaker 11: of reality in AI, and AI is going to change everything.
Speaker 13: I view AI as almost building the railroads and the interstate.
Speaker 11: Highway system in the US.
Speaker 13: We're going to need to have that over the next
Speaker 13: twenty years or we're going to fall behind. So I
Speaker 13: think it's a legitimate discussion on AI, and they came
Speaker 13: out with the Stargate program, which I think is fantastic
Speaker 13: because other countries are getting ahead. Is investing billions, UE
Speaker 13: is investing billions, Sauda's investing billions. I think the US
Speaker 13: has to get out ahead of that trend and it's
Speaker 13: going to affect everything over the next twenties.
Speaker 11: I'm really excited about it.
Speaker 7: As an investor. What's your approach to one of this?
Speaker 2: How do you think about the opportunities you mentioned the
Speaker 2: late nineties, it took a while to find out who
Speaker 2: the ultimate winners would be. Are you expected something similar
Speaker 2: this time around?
Speaker 13: It's going to be a little different because because I
Speaker 13: look at AID, you had winners like Google that were
Speaker 13: kind of natural monopolies. There can be many variants of
Speaker 13: large language models, so there can be a global large
Speaker 13: language model, there can be probably four or five of those.
Speaker 13: But now the real use is going to be vertical ones,
Speaker 13: so tailoring models with the data specific data for say healthcare,
Speaker 13: specific models for transportation with transportation.
Speaker 11: Data in it.
Speaker 13: So I think vertical AI models will be the ones
Speaker 13: that start to impact the economy, and then the other
Speaker 13: ones are going to grow and we need that infrastructure,
Speaker 13: and then what's going to happen is from that you
Speaker 13: need power. Fusion is being talked about and is around
Speaker 13: the corner all the fuse and comp I look at
Speaker 13: or getting close to actually generating energy. The models are
Speaker 13: showing soon they're going to generate energy and build these
Speaker 13: large tokmacs that's going to have to power all the
Speaker 13: centers with all to get also the GPUs, because if
Speaker 13: you look at the power users of AI, it could
Speaker 13: be the entire power.
Speaker 11: Right now in the United States.
Speaker 13: So I think this stargate program or program like it
Speaker 13: is needed and we've got to match those other countries,
Speaker 13: and that is going to create a virtual sloop of
Speaker 13: spending building the infrastructure and be great for America and
Speaker 13: revolutionized healthcare healthcare as well.
Speaker 3: I know that you've been very active in that space,
Speaker 3: in particular, particularly in the speed that it will take
Speaker 3: to put new prescription drugs on the market using different
Speaker 3: machine learning techniques. I'm just wondering, is that your main
Speaker 3: focus right now of investment when it comes to AI
Speaker 3: or the other regions that you think are promising in
Speaker 3: the application in the near term, not just that there's
Speaker 3: these long term goals.
Speaker 13: Well, I'm focused on the healthcare because I think that's
Speaker 13: the number one. But it'll be helpful in energy and
Speaker 13: finding energy and processing energy.
Speaker 11: It'll be helpful in transportation, It'll be helpful. It's going
Speaker 11: to be embedded in every business.
Speaker 13: And I think, like liquid AI, we're invested in that
Speaker 13: doesn't require it's built. As we talked about last year,
Speaker 13: they studied a worm's brain in MIT, Like, who would
Speaker 13: do that?
Speaker 11: There's three hundred neurons in a worm's brain.
Speaker 4: I think it's fout.
Speaker 11: I mean neurons do you think is in your brain?
Speaker 4: Three hundred and one? I'm just kidding.
Speaker 13: The average person has eighty six billion, You guys probably
Speaker 13: eighty seven each.
Speaker 4: But you can come on again.
Speaker 11: If they come out with an.
Speaker 13: AI system that requires eighty percent less power to load it,
Speaker 13: and that means you can put it on edge device,
Speaker 13: so to be on your phone. So you're going to
Speaker 13: have you know, your assistant on your phone. This is
Speaker 13: going to start to be in all the phones. It's
Speaker 13: going to kind of revolutionize the way our lives are.
Speaker 3: One aspect of this Davos. It's so interesting is that
Speaker 3: there's some real tensions that need to be resolved, especially
Speaker 3: as everyone's talking about artificial intelligence. On the flip side,
Speaker 3: Donald Trump talking about national security. He's talking about the
Speaker 3: chips in the US that could potentially transmit data back
Speaker 3: to China or one of our other adversaries or competitors.
Speaker 3: And I'm just wondering as an investor, how you understand
Speaker 3: what's national security and what Well.
Speaker 11: It's difficult.
Speaker 13: You got to follow the government and it changes all
Speaker 13: the time. I think in general, we do need national security,
Speaker 13: but it has to be focused, it has to have
Speaker 13: a purpose, and hopefully they'll have rational people that decide,
Speaker 13: you know what that is.
Speaker 2: Do you worry that some voices we'll get a bigger
Speaker 2: say in the future in the private sector.
Speaker 13: Uh No, I don't worry because we have a system
Speaker 13: that I think will work in the long term.
Speaker 11: And there's going to be a lot of it.
Speaker 13: There always has been fighting of different companies for different things,
Speaker 13: and so so we'll get through it and hopefully we
Speaker 13: will do the right thing. We've got to Congress, we've
Speaker 13: got we've got the court system. So the United States
Speaker 13: is very stable. So I do think we need cybersecurity
Speaker 13: and we need security in general. Hopefully we can have
Speaker 13: a datant with China so we don't don't have that
Speaker 13: going on. And I think Trump, you know, wants to
Speaker 13: cut deals, you.
Speaker 11: Know, to move the economy forward, and I think that'll
Speaker 11: be a good thing.
Speaker 2: I'm sure a lot of Europeans have asked you on
Speaker 2: your opinion on what the next four years is going
Speaker 2: to look like.
Speaker 7: What have you told the Europeans when you ask that question?
Speaker 11: You know, I think the next four years you're opions.
Speaker 13: I've been in many meetings here with health ministers and
Speaker 13: all sorts of ministers, and what they say is the
Speaker 13: EU really isn't a full unions. They use the same money,
Speaker 13: but there's not an integrated capital market.
Speaker 11: There's not integrated in anything.
Speaker 13: In terms of starting a business, you need to fill
Speaker 13: out one hundred pages of forms in Germany and different
Speaker 13: ones in Portugal. So many of them talk to me
Speaker 13: and say they need to create a twenty eighth state
Speaker 13: with a set of rules, a virtual state with one
Speaker 13: set of rules to start a business and one set
Speaker 13: of of a bankruptcy.
Speaker 11: Bankruptcy is different in every country.
Speaker 13: You can't have a great capital market if you're dealing
Speaker 13: with twenty seven different bankruptcy kills or twenty different ways
Speaker 13: of doing things. So I think it's a great idea
Speaker 13: to start a twenty eighth virtual European state, and businesses
Speaker 13: can opt to be in that or be in one
Speaker 13: of the twenty seven. But it's hard to be in
Speaker 13: both of those at the same time. So the big
Speaker 13: advantage the US has is it is one market. It
Speaker 13: is has one set of regulations, so we have a
Speaker 13: let up and hopefully we will make that even better
Speaker 13: in the next four years.
Speaker 3: I want to return to where we began, which is sports,
Speaker 3: and my sport, which is auctions.
Speaker 1: I'm looking at bond auctions, which I think is right
Speaker 1: to caut a time. Well, I know, hold on a second, No,
Speaker 1: I'm serious because I wonder how much you're watching what
Speaker 1: so many people here are worried about, which is that
Speaker 1: all of this optimism, all of this you know, happy
Speaker 1: talk about getting together and really focusing on growth could
Speaker 1: get really styn made if you start to see bond
Speaker 1: yields climb and you start to see the fiscal pressures
Speaker 1: really come into play.
Speaker 4: How concerned are you about that?
Speaker 11: I'm very concerned.
Speaker 13: You know, all the data would show when you have
Speaker 13: an increase in the money supply as big as it's
Speaker 13: been in the last five years and a large deficit,
Speaker 13: that's going to cause higher interest rates and inflation. Those
Speaker 13: kind of go hand in hand. So my biggest worry
Speaker 13: is is inflation going to get out of control and
Speaker 13: keep those interests up there. I think house mortgages are
Speaker 13: costing seven percent. We definitely have to increase the supply,
Speaker 13: and they're looking at programs to do that. But with
Speaker 13: seven percent mortgages, that's not great for growth.
Speaker 3: You mentioned ninety nine, and we all know what happened
Speaker 3: after nineteen ninety nine, and there is this feeling that
Speaker 3: there needs to be a washout and some of the
Speaker 3: startup companies to say deal with technology that continues to evolve.
Speaker 3: Is that the big concern that this kind of increase
Speaker 3: in rates could really catalyze that kind of washout is
Speaker 3: that what you're keeping your eye on.
Speaker 13: Increase in rates definitely catalyzes washouts because when money is free,
Speaker 13: there are no washouts.
Speaker 11: Right, we had free money for a long period of time.
Speaker 13: Now, the good news is for most of my life
Speaker 13: too long life, most of my life. Regist rates have
Speaker 13: been t bills have been five percent, five and a
Speaker 13: half percent, so it's not anomalists.
Speaker 11: But yeah, that is the fear.
Speaker 13: We've already seen a lot of the company's valuations go
Speaker 13: down and good White does, so I think we're.
Speaker 11: Kind of through that.
Speaker 13: I think there is a lot of hype on AI
Speaker 13: and probably some fundings at very high levels, but I
Speaker 13: don't see it like it was in ninety nine, where
Speaker 13: everything across the board was crazy.
Speaker 11: I used to walk into a room San Francisco.
Speaker 13: They give me a term sheet and they say, we
Speaker 13: have a company that's going your internet company is going
Speaker 13: to reduce the supply chain cost of medical equipment.
Speaker 11: That we're valuing the company in a one hundred million
Speaker 11: and has no revenues.
Speaker 13: Is this is the idea and you have two hours
Speaker 13: to decide do you want to invest ten million one hundred
Speaker 13: million valuation?
Speaker 7: I'll pass.
Speaker 11: I was. I was fall out of my chair. This
Speaker 11: is a real story. I said, thank you very much.
Speaker 13: And n ninety nine of those went bankrupt, and then
Speaker 13: we had Google and a few other ones that did well.
Speaker 11: That's not that's not the situation we're in right now.
Speaker 2: Stay you know, John, it's going to say great to
Speaker 2: see you, Good luck to all your sports teams, as
Speaker 2: we say for without a doubt Steve Paliuca a bank
Speaker 2: capital and force Amelia so well from Damos, Switzerland to
Speaker 2: the World Economic Forum, the big event, Ted pick the
Speaker 2: Morgan Stanley chairman and.
Speaker 14: See fantastic good one year in the city. Yes, I'm
Speaker 14: by one year and three weeks. How does it feel amazing?
Speaker 7: Yeah?
Speaker 14: You know, you come into this job and you you
Speaker 14: want to do good, but you discovered is the quality
Speaker 14: underlying franchise and the people, and it's a wonderful franchise.
Speaker 14: I got the keys to a great car and the
Speaker 14: partnership is alive and well now you've got.
Speaker 7: To hit the ground running.
Speaker 11: Yeah.
Speaker 2: American bankers running around CEO very very very happy here
Speaker 2: in Davas, Switzerland, the CEOs and American bankers and you
Speaker 2: one of them.
Speaker 7: Are you optimistic about this year ahead?
Speaker 2: And what is it about the incoming administration that gives
Speaker 2: you that confidence?
Speaker 11: Jonathan?
Speaker 14: I am positive because it is definitely a change in tone.
Speaker 14: It just feels like the overall framework is one where
Speaker 14: more interaction between the public and the private sectors. Well,
Speaker 14: you guys were talking about the last couple of minutes.
Speaker 14: It can't be state actors alone, and it can't be
Speaker 14: private companies alone.
Speaker 7: So the fact that.
Speaker 14: There's real dialogue building, I think that's a huge plus.
Speaker 14: And on the European question, sort of interesting comment too,
Speaker 14: because I think there may be some catalysts to some
Speaker 14: now reflection. You know, there were the droggy papers and
Speaker 14: people read it, they kind of read it, but there
Speaker 14: was nothing capital markets, union, banking union, kind of European
Speaker 14: sort of self strength. Maybe this is a cattle some
Speaker 14: real conversations. So in that sense, I think it's positive too.
Speaker 3: Are you hearing about actual business activities stemming from that
Speaker 3: change in tone in Europe or is it just sort
Speaker 3: of a conversation at this point.
Speaker 14: Well, I mean we're like, what twenty five basis points
Speaker 14: into the new administration, right, We're just getting going. But yeah,
Speaker 14: hell of a lot more than you would expected two
Speaker 14: or three weeks ago. One thing, it's you know, it's constructive.
Speaker 3: One thing in your earnings that really stood out as
Speaker 3: a stock trading revenues that really boomed. And I'm wondering
Speaker 3: this has been a discussion about how risk on things
Speaker 3: have been feeling certainly at Davos. But through the last
Speaker 3: couple of months, do you see that waning at all
Speaker 3: or is it just continuing to amp up in terms
Speaker 3: of risk taking.
Speaker 14: Well, you know, when you become a CEO, one thing
Speaker 14: is for sure. All of your children are equally beautiful.
Speaker 14: But our equities business is one of our more beautiful
Speaker 14: children that I adore. And yes, they put up some
Speaker 14: great numbers, and I think that is a reflection on
Speaker 14: just the quality of the underlying franchise, but also a
Speaker 14: sense that people want to allocate to a little more risk,
Speaker 14: but importantly they kind of want to get beyond the
Speaker 14: index level. You guys talk about this a lot, right,
Speaker 14: sort of index level equity risk premium relative to sectors.
Speaker 14: And I think one of the positives here is we're
Speaker 14: talking about deregulation the energy space and energy transition. We're
Speaker 14: talking about the financial services space, and yes, you need
Speaker 14: to own the six because they are money machines and
Speaker 14: great companies, but how about the rest of the four
Speaker 14: hundred and ninety three four hundred and ninety four. And
Speaker 14: I think some of that dispersion getting kind of allocated
Speaker 14: across teams and sectors and around the world. I think
Speaker 14: that's a multi year trend. I think we're early on
Speaker 14: that it.
Speaker 2: Concentration is certainly a risk factor that a lot of
Speaker 2: people are considering. Another one is the deficit and the
Speaker 2: cost of interest payments for the US government, for you,
Speaker 2: for the capital market business. Is that a risk more
Speaker 2: generally that you've take even the team of focused on.
Speaker 14: Yeah, you've been talking about that a lot, and I'm sure,
Speaker 14: and I think it's important because if you don't talk
Speaker 14: about it, it sort of says, you know, there's no
Speaker 14: canary in the coal mine, right. But I do think
Speaker 14: there is the fact that there has been so much
Speaker 14: attention given to this, and you have folks like Best
Speaker 14: and coming in who know the bond market. It has
Speaker 14: a sort of reaffirmation that we got to look at
Speaker 14: on that Simpson balls, you know, here we are these
Speaker 14: years later that hasn't even said, you know, term premium
Speaker 14: is still pretty narrow, so like we haven't seen the
Speaker 14: long bond really move. So there's an underlying confidence. I
Speaker 14: think the question is what kind of growth can we generate?
Speaker 14: I think so the conversation that one would have is
Speaker 14: which comes first, sort of the potential inflationary effect of
Speaker 14: tars or the positive deregulatory effect. And I think that's
Speaker 14: going to be one of the things we know is
Speaker 14: that there's going to be an ongoing dialectic. You know
Speaker 14: which policy function can be transmitted more quickly than the other,
Speaker 14: and I think that pivoting and transitioning, and that's as important.
Speaker 2: Do you think it holds back activity that degree of
Speaker 2: uncertainty given how confident everyone is, and Lisa, especially me too,
Speaker 2: we get nervous when everyone in Davos gets ready.
Speaker 14: Yes, contra indicator.
Speaker 7: Does it hold.
Speaker 2: Back activity without having the clarity on what these changes
Speaker 2: are going to look like?
Speaker 14: I think part of the dilemma is that the vernacular
Speaker 14: of whether we're really moving with animal spirits as whether
Speaker 14: we see a bunch of M and A prints like
Speaker 14: where are those m and announcements? And the reality is,
Speaker 14: over the last number of years, we've had I think
Speaker 14: two major uncertainties, right the end of financial oppressions zero
Speaker 14: and zero. Is that finally passes and do we kind
Speaker 14: of know where rates are going to be and we
Speaker 14: can focus on the detail of whether there'll be you know,
Speaker 14: one or two moves or none at all, But at
Speaker 14: least we generally know that for the next period of time,
Speaker 14: the US for history rate is somewhere in the mid forest,
Speaker 14: and then you can apply discount rates for country risk
Speaker 14: and the company and the rest of it.
Speaker 11: So that's kind of pass us. So that's an uncertainty that's.
Speaker 14: Taken off the table if you're a CFO and you're
Speaker 14: a board room. The second set of uncertainty has been
Speaker 14: around sort of the end of the end of history,
Speaker 14: which is the resumption of nation states and the like.
Speaker 14: And one could argue, well, there's a lot of uncertainty
Speaker 14: in the world. I would argue the combination we're having
Speaker 14: some sense of a rate framework and having some sense
Speaker 14: that things are gonna happen in the US, in Europe,
Speaker 14: around the world. I think it galvanizes the corporate community.
Speaker 14: And so the question is how much does the market
Speaker 14: discount of how fast will that be? And I do
Speaker 14: think important catalysts to this will be there are the
Speaker 14: better part of nineteen hundred companies in the private equity
Speaker 14: space that have a billion of aggregate value five years
Speaker 14: of life on average. Those companies need to move so
Speaker 14: at some level I couldn't tell you exactly the pacing
Speaker 14: of that activity. But we've been below trend line in
Speaker 14: the M and A market. We talked a couple of
Speaker 14: years from now. I think we'll be a trend line
Speaker 14: or higher. I'm pretty confident.
Speaker 4: I think it's going to be M and A. I
Speaker 4: think it's going to be IPOs and everything.
Speaker 14: I think we've been talking about. You've talked about so
Speaker 14: much the sort of paucity of investable names, especially when
Speaker 14: you get past the Big seven companies and they're sort
Speaker 14: of small cap orphans without research. I think there's a Yes,
Speaker 14: it can be painful starbox for a young company to
Speaker 14: be public, but you get enduring long term value from
Speaker 14: shareholders that actually can also add some value, and you
Speaker 14: can use that currency to make other acquisitions. I think
Speaker 14: the IPO product is alive well, and I think only
Speaker 14: what's happened as a sort of financialization of the markets
Speaker 14: is the intersection of private and public that's come of age.
Speaker 14: So maybe you don't go public in the classic Nasdaq
Speaker 14: and New York IPO at the first. Maybe you do
Speaker 14: some hybrid capital for a while, and then you go
Speaker 14: public alla over a full capital structure.
Speaker 3: One area that you've brought in one of your babies
Speaker 3: that's very beautiful.
Speaker 4: That I'm sure you talk about is your wealth management unit.
Speaker 11: And I'm serious, it's a big baby.
Speaker 4: It's a big baby, big beautiful baby.
Speaker 3: One of the drivers of revenues for a very long time.
Speaker 3: What's been the challenge in accumulating assets in the wealth
Speaker 3: management growing assets to degree that you really have wanted to?
Speaker 14: Well, you have a massive denominator, right, And I think
Speaker 14: what's happened is we were now the better part of
Speaker 14: a trillion of au M between wealth and investment manager.
Speaker 14: And if you look at sort of point to point,
Speaker 14: what have assets done? And obviously markets higher markets, health,
Speaker 14: the assets in one year went up by a trillion
Speaker 14: three So people say, okay, you raised two fifty Well
Speaker 14: that's a huge number. And for me at LEASTA, what's
Speaker 14: really important is how is our funnel working? Like think
Speaker 14: about our wealth business is sort of having three parts
Speaker 14: self directed e.
Speaker 11: Trade.
Speaker 14: We're seeing transaction activity really kicking up. That's clearly a
Speaker 14: positive signal part of what you're asking about. In the
Speaker 14: sort of pure equity space, we have this workplace business.
Speaker 14: I want your stock plan business because then I can
Speaker 14: do factory floor to CEO and then the fee based
Speaker 14: advisor fifty based points per annum, and the fee based
Speaker 14: advisory growth is quite impressive, quite impressive, and it's going
Speaker 14: to continue for years to come, especially if clients need
Speaker 14: to allocate across sectors.
Speaker 3: You've made a lot of acquisitions in the past, any
Speaker 3: in the pipeline planning any further types of tie ups yourself.
Speaker 14: You know, it's interesting we see stuff, but I really
Speaker 14: love the durable growth organically that we have in the
Speaker 14: two major major business in the investment bank and the
Speaker 14: wealth and investment manager. But over time we'll continue to
Speaker 14: look at stuff as we a Cree Capital.
Speaker 2: You've got one minute left on the places in Have
Speaker 2: you spoken to the president?
Speaker 7: I have not, not recently.
Speaker 2: Right if you have the opportunity too, and Davis will
Speaker 2: today to throw a question at the incoming president the comment,
Speaker 2: President Donald Trump, what would you ask him?
Speaker 14: I like the I like the quality of the questioners
Speaker 14: you have I do.
Speaker 11: I like the quality of the question.
Speaker 2: And I was in the mix and you had one
Speaker 2: what would that question?
Speaker 14: I think the question I would ask is one where
Speaker 14: it would give him the opportunity to sort of speak
Speaker 14: to the possibility that he's thinking about a lot of
Speaker 14: different possibilities on a lot of different issues, something along
Speaker 14: the lines of are you open to taking idea flow
Speaker 14: around a whole bunch of different spaces and give examples.
Speaker 14: And I think my guess is the answer that he
Speaker 14: would give is yes, and I'll give.
Speaker 11: You examples of that.
Speaker 14: And the reason that's important is because I think we're
Speaker 14: so early in this administration, people are trying to sort
Speaker 14: of weigh how much is tactical versus how much is baked.
Speaker 14: I think there's a lot of discussion and people it
Speaker 14: wouldn't be so much for him, but people understanding this
Speaker 14: is a real conversation taking place on a whole bunch
Speaker 14: of important issues and we're only five days in. I
Speaker 14: think people hearing that will give confidence that we are
Speaker 14: in the early stages of the dialectic and there's more
Speaker 14: to come.
Speaker 2: Ted, I appreciate your time, Thanks us for having you guys,
Speaker 2: Thank you sir.
Speaker 7: Safe travels back to New.
Speaker 14: York now, Avid listener and watcher, We.
Speaker 7: We appreciate that.
Speaker 4: Than you got to come on again soon.
Speaker 2: Ted Pick, the chairman of CEO of Morgan Stanley. This
Speaker 2: is the Bloomberg Surveillance podcast, bringing you the best in
Speaker 2: markets economics, angio politics. You can watch the show live
Speaker 2: on Bloomberg TV weekday mornings from six am to nine
Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify, or
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Speaker 2: Terminal and the Bloomberg Business Amp.