WEBVTT - Bloomberg Businessweek Weekend - March 14th, 2025 0:00:00.280 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.760 --> 0:00:12.800 This is Bloomberg Business Week Insight from the reporters and 0:00:12.960 --> 0:00:16.960 editors that bring you America's most trusted business magazine, plus 0:00:17.160 --> 0:00:20.959 global business, finance and tech news. The Bloomberg Business Week 0:00:20.960 --> 0:00:25.880 Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio. 0:00:27.000 --> 0:00:29.920 Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast. 0:00:30.200 --> 0:00:33.120 Tim is on assignment this weekend. Well, this past week 0:00:33.240 --> 0:00:36.879 a global selloff and overall volatility in stocks thanks to 0:00:36.920 --> 0:00:40.160 tariffs and trade wars, fedchair J Powell saying the US 0:00:40.200 --> 0:00:44.240 economy is fine, favorable US inflation prints. We also got 0:00:44.320 --> 0:00:49.080 US airlines warning about weakening demand, and many many headlines 0:00:49.120 --> 0:00:52.760 out of Washington, and that included continuing efforts by DOGE, 0:00:52.840 --> 0:00:55.920 the Department of Government Efficiency run by Elon Musk, in 0:00:56.000 --> 0:00:59.760 what may be a remaking of the US federal government. 0:01:00.200 --> 0:01:02.160 And so we're going to kick off this hour with 0:01:02.200 --> 0:01:04.800 a deep dive into the changes President Trump is making 0:01:04.880 --> 0:01:09.000 and policies he's pursuing, and ask what is his possible 0:01:09.160 --> 0:01:13.040 endgame domestically and globally. One view in just a moment, 0:01:13.200 --> 0:01:15.120 and got to say it kind of went a little viral. 0:01:15.640 --> 0:01:19.280 Also this hour, the chief financial officer of on Semiconductor, 0:01:19.360 --> 0:01:22.440 on Tariff's the macro and going public on a big deal, 0:01:22.920 --> 0:01:25.800 plus the rise in power demands and possible wider use 0:01:25.800 --> 0:01:29.360 of nuclear power, and Zach Dell, co founder of base Power, 0:01:29.560 --> 0:01:32.760 and yes, the son of Michael Dell, on backup power 0:01:32.840 --> 0:01:36.319 for stressed out grids. All of that to come first up, though, 0:01:36.520 --> 0:01:38.640 with a steady stream of headlines out of the White 0:01:38.640 --> 0:01:42.240 House regarding Tariff's, geopolitics and more, we've got a deep 0:01:42.280 --> 0:01:44.880 dive into how the United States relationship with the world 0:01:45.000 --> 0:01:49.160 may be changing short term and even possibly longer term. 0:01:49.640 --> 0:01:52.320 We wanted to try and suss out what President Trump's 0:01:52.480 --> 0:01:54.840 endgame may be when it comes to the United States 0:01:54.840 --> 0:01:58.000 and democracy. And to that end we turn to Ed Price, 0:01:58.280 --> 0:02:01.520 a former British trade official Non Residents senior fellow at 0:02:01.560 --> 0:02:04.440 and Why You. Ed has advised members of the European 0:02:04.440 --> 0:02:08.440 and British parliaments and writes often about politics, economic policy, 0:02:08.639 --> 0:02:09.160 and more. 0:02:09.440 --> 0:02:13.200 In my view, he is a good thing for America, 0:02:13.240 --> 0:02:16.600 the nation and America the democracy, because everybody's talking about 0:02:16.840 --> 0:02:19.919 America and the democracy and we're sitting here doing this again, 0:02:20.919 --> 0:02:22.680 and he is potentially a very bad thing for the 0:02:22.680 --> 0:02:25.200 Republic and the Union and the United States. And it 0:02:25.280 --> 0:02:29.320 might seem strange to make that distinction, because as things stand, 0:02:29.360 --> 0:02:31.600 we very often think of those things as the same. Right, 0:02:31.639 --> 0:02:35.520 we will say USA and we'll say America interchangeably. And 0:02:35.560 --> 0:02:37.200 as I try to argue in this column, I may 0:02:37.200 --> 0:02:41.360 be wrong. I think that Trump's absolute structural purpose, is 0:02:41.400 --> 0:02:45.080 foundational purpose, is to split those two things in half, 0:02:45.160 --> 0:02:46.919 to get them away from one from the other. 0:02:47.880 --> 0:02:50.440 Explain how he does that and what that means. People 0:02:50.520 --> 0:02:52.760 might hear you and say, wait a second, these things 0:02:52.760 --> 0:02:55.040 sound like something that are inextricably bound. 0:02:55.200 --> 0:02:58.960 So they're not, in my opinion, right, Seventeen seventy six 0:02:59.200 --> 0:03:02.040 is the moment that the American nation was born, and 0:03:02.080 --> 0:03:04.079 it was born of breaking the law and defying a king. 0:03:04.360 --> 0:03:06.679 So that's the rebelliousness, right, That's the flags on the 0:03:06.720 --> 0:03:10.519 back of pickups. It's great, It's all American. Seventeen eighty nine, 0:03:10.520 --> 0:03:13.600 when the Constitution is ratified, is the moment that we 0:03:13.800 --> 0:03:16.519 chose to be legalists and chose to be a republic. 0:03:16.760 --> 0:03:19.960 Alexander Hamilton in that intermigrament was saying, look, should we 0:03:19.960 --> 0:03:22.320 have a king right, and they were arguments about how 0:03:22.360 --> 0:03:26.160 powerful the president should be. These arguments have never been resolved. 0:03:26.240 --> 0:03:29.720 And we saw with Nixon, we saw with Kennedy the 0:03:29.800 --> 0:03:33.440 imperial presidency. Because again, we haven't decided as a nation 0:03:33.680 --> 0:03:38.520 what exactly our republic is fought. So if President Trump 0:03:38.680 --> 0:03:42.840 truly wanted to create a presidency with unlimited powers, he 0:03:42.840 --> 0:03:45.520 wouldn't be able to do it within the existing seventeen 0:03:45.600 --> 0:03:49.360 eighty nine United States framework. He would have to somehow 0:03:49.360 --> 0:03:52.960 appeal to the seventeen seventy six animal spirits to misuse 0:03:53.000 --> 0:03:53.920 the term of the nation. 0:03:54.760 --> 0:03:56.960 So is that where Doge comes in? 0:03:57.640 --> 0:04:01.400 Doge goitness me? So Elon Musk is supposed to be 0:04:01.400 --> 0:04:04.120 a genius. He doesn't realize he's the full guy, right, 0:04:04.360 --> 0:04:07.160 He's the four guy. He's going to be ousted at 0:04:07.160 --> 0:04:10.880 some point when Doge goes too far, which it will 0:04:11.080 --> 0:04:13.520 probably into entitlements, Trump will need. 0:04:13.400 --> 0:04:15.920 Which is what they are dealing with, which is what they. 0:04:15.880 --> 0:04:18.880 Want to do as we speak. Trump is going to 0:04:18.880 --> 0:04:22.120 need someone that wasn't affirmed by the confirmed by the 0:04:22.120 --> 0:04:24.440 Senate to get rid of quickly, and that's Musk. And 0:04:24.480 --> 0:04:26.120 I think we saw Musk on Fox the other day 0:04:26.160 --> 0:04:28.320 sweating it a little bit with Kudlog because it looked 0:04:28.360 --> 0:04:30.680 like he's starting to realize that maybe he's in trouble. 0:04:30.800 --> 0:04:33.880 His businesses aren't doing very well and so on. So 0:04:34.240 --> 0:04:36.000 Doze is the kind of battering ram. It's like the 0:04:36.080 --> 0:04:39.840 vanguard that's seeing how far, like a test balloon, how 0:04:39.880 --> 0:04:42.880 far this stuff can go. And when challenged, Musk will 0:04:42.920 --> 0:04:44.080 be quite easy to peel off. 0:04:44.520 --> 0:04:46.400 Well when is I just you know, because I think 0:04:46.400 --> 0:04:49.640 it's safe to say that some have thought government has 0:04:49.680 --> 0:04:52.560 gotten really big, and there's some security in that in 0:04:52.600 --> 0:04:54.640 that you don't move fast and break things that maybe 0:04:54.680 --> 0:04:57.800 shouldn't be broken. But at the same time, it's very 0:04:57.800 --> 0:05:01.719 easy to get lazy over existing structure, and waste does 0:05:02.160 --> 0:05:05.120 get created, and you know whether it's you know, So, 0:05:05.520 --> 0:05:10.720 what's the balance between good efficiency and disruption, especially in 0:05:10.760 --> 0:05:12.600 a government like the United States. 0:05:13.120 --> 0:05:14.200 Well, I guess there's two points. 0:05:14.240 --> 0:05:14.320 Right. 0:05:14.400 --> 0:05:17.120 One is that whether or not the American people want 0:05:17.120 --> 0:05:19.520 a big government is debatable. That's why we have elections. 0:05:20.040 --> 0:05:22.680 Whether or not the Americans want an all powerful government 0:05:22.720 --> 0:05:27.680 was already decided at the aforementioned Constitutional Congress, Right, So 0:05:28.960 --> 0:05:33.719 I'm very careful to try and prize away an efficient 0:05:33.880 --> 0:05:36.600 government from the size of the government. Donald Trump wants 0:05:36.600 --> 0:05:39.560 a smaller government, which he then says is more efficient. 0:05:39.600 --> 0:05:40.840 So those of us who are worried, and this is 0:05:40.839 --> 0:05:42.240 the second point, those of us who are worried about 0:05:42.240 --> 0:05:45.040 fiscal and debt, will go, Okay, that makes sense, But 0:05:45.080 --> 0:05:47.560 that's disingenuous because what he actually wants is a more 0:05:47.640 --> 0:05:48.839 powerful government. 0:05:48.880 --> 0:05:50.039 He wants a concentration of power. 0:05:50.160 --> 0:05:53.920 Scentration of power. So Lord Acton famously says that power corrupts, 0:05:53.920 --> 0:05:57.560 and absolute power corrupts absolutely. I think power accumulates as well, 0:05:57.839 --> 0:05:59.360 and this is what we should be watching for. 0:06:00.000 --> 0:06:01.320 I want to go back to what you said about 0:06:01.320 --> 0:06:03.640 Elon and Doge, because I think a lot of people 0:06:03.680 --> 0:06:06.800 have been proven wrong over the past few months when 0:06:06.839 --> 0:06:09.680 they said this is a honeymoon that is going to 0:06:09.760 --> 0:06:14.640 end badly. These two look pretty close at this point. 0:06:15.200 --> 0:06:20.320 And given Elon's status as the wealthiest person in the world, 0:06:20.760 --> 0:06:24.839 he proved in this election cycle that he's incredibly powerful 0:06:25.560 --> 0:06:26.920 with helping to elect people. 0:06:27.680 --> 0:06:29.720 And you're saying he might be there longer than I think. 0:06:29.760 --> 0:06:33.200 I think I am, yeah, just because he has the resources, 0:06:33.839 --> 0:06:35.840 and you know, he has said he wants to use 0:06:35.880 --> 0:06:38.640 these in other parts of the ballot. 0:06:39.200 --> 0:06:42.640 So the president with respect has a long and storied 0:06:42.640 --> 0:06:45.520 history of using and discarding people. And I don't think 0:06:45.520 --> 0:06:47.480 that Elon Musk rule of his wealth is I. 0:06:47.400 --> 0:06:49.400 Mean, there are many books written by those people who 0:06:49.560 --> 0:06:51.520 want there's described. 0:06:52.160 --> 0:06:54.120 There is a library of people that have been have 0:06:54.160 --> 0:06:57.520 been let down by the president. Should we say, I 0:06:57.520 --> 0:06:59.560 guess I'm contending. I mean, I can see too that 0:06:59.600 --> 0:07:02.800 maybe the time is something I couldn't possibly forecast. But 0:07:02.880 --> 0:07:05.280 I think the function of putting Musk into this thing 0:07:05.360 --> 0:07:09.159 called doge is that he's easy to get rid of. 0:07:09.240 --> 0:07:11.160 He's easy to point out later and say, this guy 0:07:11.280 --> 0:07:14.560 made these mistakes, not me right, and at that point 0:07:14.720 --> 0:07:15.320 he's gone. 0:07:15.720 --> 0:07:20.000 So when you hear things like Canada and this is 0:07:20.000 --> 0:07:22.560 something I think we all too are asking ourselves. You 0:07:22.560 --> 0:07:26.280 know again, what is the endgame here? Do you think 0:07:26.520 --> 0:07:27.840 in terms of President Trump? 0:07:29.520 --> 0:07:31.720 Honestly, I mean I might regret saying this. Okay, maybe 0:07:31.720 --> 0:07:33.680 this is my last appearance on your show. I don't know. 0:07:34.200 --> 0:07:36.640 I think he's serious. I think he's serious. 0:07:36.640 --> 0:07:39.360 Canadians are if we if it ever comes off kind 0:07:39.360 --> 0:07:41.960 of jokey on air, I'll be honest with you We've 0:07:42.000 --> 0:07:44.000 had people reach out and say, hey, this is serious. 0:07:44.040 --> 0:07:45.400 We don't think this is a I think. 0:07:45.240 --> 0:07:49.160 It's dead serious. I think Donald Trump's vision is a 0:07:49.160 --> 0:07:52.800 big sharpie around the entire of North America, including Greenland, 0:07:53.320 --> 0:07:55.800 with Trump Land written on it. And I think that 0:07:55.880 --> 0:07:59.560 there's some strategic sense to this, right because of the 0:07:59.600 --> 0:08:01.960 world of you know, you look at the Second World War, 0:08:02.000 --> 0:08:03.640 it was just who can get the biggest load of 0:08:03.680 --> 0:08:06.640 resources in one place. And if you look at Russia 0:08:06.680 --> 0:08:09.800 and China, they kind of have Eurasia on lock. So 0:08:09.840 --> 0:08:12.880 it would strategically make sense for the America, the North 0:08:12.880 --> 0:08:16.320 Americans to converge together, if not for the fact that 0:08:16.360 --> 0:08:19.080 we don't behave like that. And the very reason for 0:08:19.120 --> 0:08:21.680 this country is law, as I said seventeen eighty nine. 0:08:21.800 --> 0:08:24.480 So the seventeen eighty nine edition of the United States 0:08:24.520 --> 0:08:27.520 cannot annex Canada. It tried, it failed, It just it 0:08:27.560 --> 0:08:30.640 didn't work. But the sort of pre seventeen seventy six 0:08:30.720 --> 0:08:35.200 bubbling rebelliousness of the nation might And I feel that he's, 0:08:35.440 --> 0:08:36.480 as I say, dead serious. 0:08:36.880 --> 0:08:40.800 If he's dead serious, are you saying or predicting that 0:08:41.640 --> 0:08:45.040 he might in fact try to make Canada the fifty 0:08:45.080 --> 0:08:45.520 first state. 0:08:46.520 --> 0:08:47.960 I don't know that he would make it the fifty 0:08:48.000 --> 0:08:50.360 first state. I feel like that's a meme, but I 0:08:50.400 --> 0:08:51.160 think he would try to. 0:08:51.160 --> 0:08:52.000 Bring He talks about it. 0:08:52.240 --> 0:08:53.920 He talks about it all the time in Hue. Might 0:08:54.120 --> 0:08:55.880 or be it. I imagine that the Republicans would never 0:08:55.920 --> 0:08:58.040 be elected again because all of my Canadian friends are 0:08:58.040 --> 0:09:01.080 pretty liberal. I don't know how that works, right, but 0:09:01.200 --> 0:09:05.240 I think that what he wants is some control over 0:09:05.320 --> 0:09:08.640 the North American hemisphere. It's almost like the Monroe Doctrine 0:09:08.720 --> 0:09:11.520 is being extended north and being extended north at the 0:09:11.520 --> 0:09:15.120 expense of these polities that already exist, in particular Denmark 0:09:15.120 --> 0:09:15.720 and Canada. 0:09:15.800 --> 0:09:17.800 If we go along with your thinking, and some others 0:09:17.840 --> 0:09:21.520 think that he too is not kidding. Is it something 0:09:21.559 --> 0:09:24.840 that could happen without US military action? 0:09:25.960 --> 0:09:29.520 Well, I mean at some point the Canadians would not 0:09:29.520 --> 0:09:31.920 be happy about this, right, I mean, you can't tell 0:09:31.920 --> 0:09:34.920 a sovereign state you now belong to us. Others have 0:09:35.000 --> 0:09:39.360 tried that in history, Napoleon Stalin Hitler, and it never 0:09:39.440 --> 0:09:42.439 ends well. So I think that the US military would 0:09:42.480 --> 0:09:47.160 have to at some point invade. I mean this again, 0:09:47.160 --> 0:09:50.880 it's like amazing to hear yourself say this on a livestream, 0:09:51.200 --> 0:09:52.319 So I don't think Canada. 0:09:52.600 --> 0:09:54.360 But to be fair, the president has talked about it. 0:09:54.400 --> 0:09:56.280 So we start kind of carrying it out, like how 0:09:56.280 --> 0:09:56.960 this might happen. 0:09:57.000 --> 0:09:59.280 Sure, sure, I think it's not impossible. I mean, you 0:09:59.320 --> 0:10:01.120 could come in from green We have bases. 0:10:00.840 --> 0:10:04.480 There, we're Bloomberg. We got to talk markets, big picture 0:10:05.000 --> 0:10:08.120 and the way that they have responded to big picture 0:10:08.360 --> 0:10:10.560 President Trump's policies over the last few weeks, or what 0:10:10.600 --> 0:10:13.480 they view as his policies. Uh, do you think it's 0:10:13.480 --> 0:10:16.360 fair to say that the equity and bond markets have 0:10:16.480 --> 0:10:18.960 not necessarily been a check on the president? 0:10:19.559 --> 0:10:21.640 He said to himself, to him, right, you don't look 0:10:21.640 --> 0:10:22.680 at the stop market anymore. 0:10:22.760 --> 0:10:25.640 Yeah, but I mean he's said a lot of things. 0:10:24.600 --> 0:10:28.120 He said, you take that to heart. 0:10:27.440 --> 0:10:31.599 I think he's unrestrained. I think at this point he's 0:10:31.640 --> 0:10:34.280 he's not thinking about popularity in the way that he 0:10:34.320 --> 0:10:37.240 has previously. Something has changed in his demeanor. 0:10:37.400 --> 0:10:38.719 He's not running for reelection, so. 0:10:39.400 --> 0:10:41.600 Or well, I mean, you respect. 0:10:41.320 --> 0:10:42.800 That he's not supposed to. 0:10:42.960 --> 0:10:45.200 He's not supposed to run for reelection. Again, there's his 0:10:45.200 --> 0:10:48.160 whole thing, whole thing. 0:10:48.400 --> 0:10:49.120 This is this whole thing. 0:10:50.000 --> 0:10:53.800 I think he's fundamentally trying to reshape North America. I 0:10:53.800 --> 0:10:57.079 think Russia is a distraction. Of course, we have to 0:10:57.080 --> 0:10:58.760 talk about markets, right, so I don't want to pivot 0:10:58.760 --> 0:11:01.720 away from that. Yeah, but the question for me is China. 0:11:01.800 --> 0:11:05.280 Is he getting ready to hand Taiwan over py Ukraine? 0:11:06.000 --> 0:11:09.640 And full credit to our producer Ceci because she said, 0:11:10.040 --> 0:11:12.800 you know, as we were planning for this about how 0:11:12.840 --> 0:11:15.560 Trump and his cabinet have signaled that their content to 0:11:15.600 --> 0:11:18.840 sit back on Taiwan and China. You have Treasury Secretary 0:11:18.880 --> 0:11:21.040 Pssent even said he doesn't see China taking action against 0:11:21.080 --> 0:11:23.720 Taiwan in this term. So what does this messaging tell 0:11:23.760 --> 0:11:26.760 you is the seating ground on global democracy? Should we 0:11:26.760 --> 0:11:29.560 feel confident that Trump's presence is enough of a deterrent 0:11:30.600 --> 0:11:32.559 only got about forty five to fifty seconds. 0:11:33.080 --> 0:11:37.240 Democracy is okay because we voted for him. The Republic 0:11:37.320 --> 0:11:39.320 might not be. And this is what I mean. It 0:11:39.400 --> 0:11:41.880 might be that there's a period of massive populism in 0:11:41.880 --> 0:11:44.920 this country, including the seating of Taiwan, and democracy in 0:11:44.960 --> 0:11:47.000 Taiwan is in trouble. But in this country it's doing 0:11:47.080 --> 0:11:49.840 pretty well. And that's a real head scratcher right, because 0:11:49.840 --> 0:11:52.520 we may choose to abandon democratic allies. 0:11:53.840 --> 0:11:55.440 But democracy would continue here. 0:11:55.800 --> 0:11:58.800 Democracy here, I think for a while. Yep, I'm going to. 0:11:58.800 --> 0:12:01.440 Squeeze in one more question because your column ends with 0:12:02.720 --> 0:12:05.560 all of this political disruption doesn't necessarily mean the end 0:12:05.600 --> 0:12:08.360 of an era, but rather the beginning of one. Twenty 0:12:08.400 --> 0:12:10.320 five seconds said it before. 0:12:10.480 --> 0:12:13.120 Trump wants some sort of empire, some sort of imperium. 0:12:13.160 --> 0:12:14.760 I don't know if you would brand it like that. 0:12:14.880 --> 0:12:16.680 I don't know if you would be honest like that. 0:12:17.280 --> 0:12:21.200 But at core, he wants to solidify power, move himself 0:12:21.240 --> 0:12:24.040 to center stage, and create some kind of Autakia in 0:12:24.040 --> 0:12:24.680 North America. 0:12:25.200 --> 0:12:27.800 That was Ed Price, a former British trade official now 0:12:27.840 --> 0:12:31.360 non resident senior fellow at NYU. Coming up on Bloomberg 0:12:31.360 --> 0:12:35.800 Business Week, A sector that always bears close watching semiconductors. 0:12:36.160 --> 0:12:39.600 The CFO of on Semi is next. This is Bloomberg. 0:12:40.120 --> 0:12:43.679 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:43.760 --> 0:12:47.199 live weekday afternoons from two to five pm Eastern Listen 0:12:47.240 --> 0:12:50.800 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:12:50.960 --> 0:12:53.600 or watch us live on YouTube. 0:12:54.679 --> 0:12:58.000 Intel got a new CEO this past week. TSMC sales 0:12:58.080 --> 0:12:59.959 quickened in the first two months of the year, driven 0:13:00.080 --> 0:13:03.160 by resilient demand for AI chips. Just a few of 0:13:03.200 --> 0:13:05.560 the headlines out of the semi world this past week 0:13:05.960 --> 0:13:09.320 and earlier this month, the chip company on Semiconductor made 0:13:09.360 --> 0:13:14.000 its pursuit of a Legro Microsystems public, disclosing an unsolicited 0:13:14.040 --> 0:13:16.920 bid valuing the company at six point nine billion dollars 0:13:16.960 --> 0:13:20.200 including debt. Now. That followed news last month that the 0:13:20.240 --> 0:13:22.679 company plans to cut about twenty four hundred jobs this 0:13:22.760 --> 0:13:25.720 year as part of a restructuring plan, and take related 0:13:25.800 --> 0:13:29.320 charges of fifty to sixty million dollars mostly this year. 0:13:29.600 --> 0:13:31.560 Here to talk about all of this, tariffs and the 0:13:31.600 --> 0:13:35.240 macro environment is the chief financial officer of on Semiiconductor, 0:13:35.360 --> 0:13:38.520 Thad trent along with Bloomberg News Senior editor Nina Trentman 0:13:38.920 --> 0:13:42.080 that is featured in the recent Bloomberg CFO Briefing newsletter 0:13:42.120 --> 0:13:45.680 can be found online at Bloomberg dot com slash CFO Briefing. 0:13:45.880 --> 0:13:48.400 Also sign up to get it there. Nina joins us 0:13:48.440 --> 0:13:50.640 here in the studio. Fad joins us from Phoenix. 0:13:51.000 --> 0:13:51.200 Fad. 0:13:51.240 --> 0:13:53.160 We want to start with you top of mind. I 0:13:53.160 --> 0:13:56.280 think for everybody is the macro, the jobs market, tariffs. 0:13:56.480 --> 0:13:59.200 How would you describe the US economy, the global economy, 0:13:59.320 --> 0:14:00.880 and the macro and vironment right now. 0:14:01.400 --> 0:14:04.280 Yeah, so, first of all, thanks for having me on look. 0:14:04.440 --> 0:14:07.480 In terms of the terraffs, there's definitely an impact that's 0:14:07.520 --> 0:14:10.280 happening out there right now. I would say what we're 0:14:10.320 --> 0:14:12.920 seeing from our perspective, and it's really been happening for 0:14:12.960 --> 0:14:16.920 the last three or four months, is a pause. Customers 0:14:17.160 --> 0:14:19.760 are really slowing down, trying to figure out what to do, 0:14:19.920 --> 0:14:22.320 what's the impact on the terraffs, and how they're going 0:14:22.360 --> 0:14:25.560 to adjust their supply chain to adjust to these terrorfs. 0:14:26.200 --> 0:14:30.120 Right now, what's happening with the uncertainty is that pause 0:14:30.360 --> 0:14:32.760 and customers just saying we're going to run kind of 0:14:32.800 --> 0:14:34.920 hand the mouth. We're going to be very very cautious 0:14:34.960 --> 0:14:37.800 in the short term until we get clarity. So I 0:14:37.840 --> 0:14:40.120 think clarity is really what we need for this to 0:14:40.160 --> 0:14:44.480 get kind of back to a growth environment again, given that, 0:14:45.240 --> 0:14:47.760 given that just the uncertainty around the globe. But what 0:14:47.760 --> 0:14:50.320 we're hearing from our customers is they're looking for alternatives, 0:14:50.560 --> 0:14:52.720 and we're in a spotted on SIDI where we can 0:14:52.760 --> 0:14:55.000 offer alternatives to our customers. We have a very large 0:14:55.040 --> 0:14:58.520 manufacturing footprint, a large manufacturing footprint in the United States, 0:14:58.880 --> 0:15:01.080 and we can offer our custom from res alternatives based 0:15:01.080 --> 0:15:04.000 on where they're located, where they're manufacturing is and hopefully 0:15:04.000 --> 0:15:07.400 help them navigate through the tariffs. But to answer your question, 0:15:07.440 --> 0:15:08.720 it's mostly a pause right now. 0:15:08.840 --> 0:15:11.640 It's a pause. Love that word to describe it. You said, 0:15:11.680 --> 0:15:16.800 tariff's definitely having an impact. This pause. Customers really slowing down. 0:15:16.920 --> 0:15:19.160 I'm looking at some of your biggest customers, the supply 0:15:19.280 --> 0:15:23.680 chain function on the Bloomberg WT Microelectronics, Arrow Electronics, Abnet, 0:15:23.880 --> 0:15:28.040 Hyundai Motor Tesla BYD you play a lot, Volkswagen, you 0:15:28.080 --> 0:15:30.200 play a lot into the automotive sector, but also the 0:15:30.240 --> 0:15:33.760 industrial space. All of them pausing, all of them slowing 0:15:33.760 --> 0:15:35.720 down or is it largely the automotive sector. 0:15:36.000 --> 0:15:38.400 Yeah, so you know, eighty over eighty percent of our 0:15:38.400 --> 0:15:41.360 business is automotive industrial, so that's where we focus. What 0:15:41.400 --> 0:15:45.280 we're seeing on both sides is a slowing in auto 0:15:45.320 --> 0:15:48.760 and industrial. If you think about those customer bases have 0:15:48.960 --> 0:15:53.320 really complex manufacturing and complex supply chains, and the pause 0:15:53.360 --> 0:15:56.080 is happening across the board and across all gields right now, 0:15:56.680 --> 0:15:58.760 we're seeing pockets of shoots of kind of green shoots 0:15:58.800 --> 0:16:00.960 that are looking good. But general I would say people 0:16:01.000 --> 0:16:03.400 are looking for certainty right now in terms of the 0:16:03.440 --> 0:16:06.440 geopolitical situation and where the dust is going to land 0:16:06.480 --> 0:16:07.840 on the tariffs and. 0:16:07.880 --> 0:16:11.600 That How does this impact your current situation at the company, 0:16:12.080 --> 0:16:16.160 Carol mentioned, you're restructuring, you're making job cuts, you're making 0:16:16.240 --> 0:16:18.520 changes sort of. How does this affect you? 0:16:19.000 --> 0:16:22.520 Yeah, So look for us directly, we don't think there's 0:16:22.560 --> 0:16:24.880 a huge impact or a material impact from the tariffs 0:16:24.880 --> 0:16:27.840 directly in terms of our business, but our in customers 0:16:27.840 --> 0:16:30.240 are being impacted by the tariffs right so the big 0:16:30.240 --> 0:16:32.880 concern is what does in demand do and what does 0:16:32.880 --> 0:16:35.760 the macro do as a result of these terraffs in 0:16:35.800 --> 0:16:39.640 the geopolitical situation. For us, there is a slowdown in 0:16:39.640 --> 0:16:42.600 the industry. Autos are soft right now. So you know, 0:16:42.640 --> 0:16:45.600 as you mentioned, we announced restructuring. We're looking at this 0:16:45.800 --> 0:16:48.320 is not just a cost reduction, but are restructuring. How 0:16:48.320 --> 0:16:50.480 do we take cost out of the company that's permanent. 0:16:51.520 --> 0:16:54.320 So we've been going through a transformation here at a 0:16:54.440 --> 0:16:56.560 semi for a number of years here and a lot 0:16:56.600 --> 0:16:59.520 of this is structural nature, where when we think about 0:16:59.600 --> 0:17:02.200 the market recovering, these are cost savings that are with 0:17:02.280 --> 0:17:02.720 us forever. 0:17:03.560 --> 0:17:06.880 Dad, you said autos are slowing down. Is that because 0:17:06.920 --> 0:17:10.919 of tariff concerns and automaker problems and issues or is 0:17:10.920 --> 0:17:12.000 it because of the consumer? 0:17:12.920 --> 0:17:13.320 Are both? 0:17:13.359 --> 0:17:16.439 Oh, it's a consumer, It's more consumer now Now, I 0:17:16.440 --> 0:17:19.400 would say what's been happening over time is consumer based, right, 0:17:19.480 --> 0:17:21.960 I think the demand for autos has been coming down 0:17:22.040 --> 0:17:24.320 for a period of time now. The short term, what 0:17:24.359 --> 0:17:26.280 I've been talking about over the last couple of months 0:17:26.359 --> 0:17:30.600 has definitely been tariff based, where if you're an automaker 0:17:30.640 --> 0:17:36.280 and you're importing from Mexico or Canada, you're seriously considering 0:17:36.400 --> 0:17:39.320 what that supply chain looks like, what that manufacturing footprint 0:17:39.400 --> 0:17:41.520 looks like, and that is causing a pause right now 0:17:41.520 --> 0:17:42.359 with those customers. 0:17:42.480 --> 0:17:44.720 You've got manufacturing sites around the globe. You mentioned what 0:17:44.720 --> 0:17:47.000 you do here in the US. The investments that are 0:17:47.000 --> 0:17:50.080 being announced in this semi area. TSMC to spend an 0:17:50.080 --> 0:17:53.080 additional one hundred billion dollars in US plants to boost 0:17:53.080 --> 0:17:56.840 semiconductor manufacturing in the US. How is that going. 0:17:56.680 --> 0:17:57.399 To impact you? 0:17:57.600 --> 0:18:00.560 Will it impact you? Directly? Will it impact you in directly? 0:18:01.240 --> 0:18:03.000 Look, it's not going to have a direct impact for 0:18:03.119 --> 0:18:06.520 US because we manufacture about sixty five percent of our 0:18:06.560 --> 0:18:09.880 products in house, so we have a large manufacturing footfront ourselves. 0:18:09.880 --> 0:18:12.359 So a TSMC coming into the United States isn't going 0:18:12.400 --> 0:18:15.880 to impact us directly. But it's really good for the industry. 0:18:15.960 --> 0:18:18.240 The more manufacturing we can get into the United States 0:18:18.359 --> 0:18:20.840 is going to be great for obvious reasons national security. 0:18:21.160 --> 0:18:23.359 So I think for the industry, the supply chain, given 0:18:23.400 --> 0:18:26.000 what's going on for our customers, I think it's all good. 0:18:26.720 --> 0:18:30.160 Even though it may not impact us directly. Our customers 0:18:30.200 --> 0:18:34.600 buy other products from our peers that have manufacturing and TSMC, 0:18:34.680 --> 0:18:38.240 so the more that we can have a diverse supply 0:18:38.359 --> 0:18:40.119 chain is going to be great for the industry. So 0:18:40.160 --> 0:18:43.560 I think these investments are great overall for our customers 0:18:43.560 --> 0:18:45.040 and for the semiconductor industry. 0:18:45.119 --> 0:18:47.960 Should we expect more investments from you in the US? 0:18:48.080 --> 0:18:50.440 I know that you're investing more in the Czech Republic 0:18:50.480 --> 0:18:52.960 where you already have a site and you're building that out, 0:18:53.000 --> 0:18:55.720 But what is your CAPEC strategy entail with regards to 0:18:55.920 --> 0:18:56.840 US investments. 0:18:57.280 --> 0:18:59.960 Yeah, we've been making big investments over the last three years, 0:19:00.600 --> 0:19:03.560 I would say, and that's in manufacturing capacity. A lot 0:19:03.600 --> 0:19:06.120 of that investment phases behind us at this point. We've 0:19:06.119 --> 0:19:09.080 made big investments in the United States. We acquired a 0:19:09.119 --> 0:19:12.280 fab in East Fishfield, New York. We have a large 0:19:12.680 --> 0:19:16.800 manufacturing site in New Hampshire. So we've been making big 0:19:16.840 --> 0:19:19.879 investments over the last several years. You brought up the 0:19:19.920 --> 0:19:23.800 Czech Republic. When we think about investments in our footprint, 0:19:24.080 --> 0:19:26.680 it's what we call brownfield investments. It's not a greenfield 0:19:26.720 --> 0:19:31.200 investment that becomes a capital light investment for us, so 0:19:31.760 --> 0:19:34.320 it saves about forty percent capital When we think about 0:19:34.359 --> 0:19:37.320 a brownfield investment investing in a site where we already 0:19:37.320 --> 0:19:40.480 have a location, already have the infrastructure. So in the 0:19:40.520 --> 0:19:43.080 Czech Republic, we have a large site there that we 0:19:43.119 --> 0:19:46.560 are expanding. We are going to continue to invest in 0:19:46.600 --> 0:19:49.879 that site over time, but that investment is a lower 0:19:49.880 --> 0:19:52.199 capital and it's also faster time to market, so we 0:19:52.200 --> 0:19:55.520 can get to market two years faster with a brownfield 0:19:55.520 --> 0:19:57.120 investment than a greenfield investment. 0:19:57.240 --> 0:19:59.080 All right, So you've done a lot of investments around 0:19:59.080 --> 0:20:03.080 the world, and in terms of your manufacturing sites, you 0:20:03.119 --> 0:20:05.280 also spend money sometimes when it comes to a deal. 0:20:05.440 --> 0:20:06.960 I know you might be limited in what you can 0:20:07.000 --> 0:20:10.040 talk about, but that takeover offer for a Legro microsystem 0:20:10.119 --> 0:20:13.399 unsolicited bid values the company about six point nine billion 0:20:13.440 --> 0:20:17.200 dollars that includes debt. Offers are not often made public 0:20:17.359 --> 0:20:19.800 sometimes though done to kind of put some pressure on 0:20:19.840 --> 0:20:23.920 shareholders on the target. What can you tell us about 0:20:23.960 --> 0:20:27.000 this deal moving any closer to being a done deal? 0:20:28.480 --> 0:20:30.440 Yeah, Look, we put out a press release that I 0:20:30.480 --> 0:20:33.520 think details really are sequence of events that have gotten 0:20:33.560 --> 0:20:36.200 us to this point. Let me start with the strategic 0:20:36.280 --> 0:20:39.719 rationale of why this is compelling for on Semi. So 0:20:39.760 --> 0:20:43.520 in on Semi we focus on intelligent power intelligence sensing 0:20:43.560 --> 0:20:46.240 as we talked about for auto industrial and the AI 0:20:46.359 --> 0:20:51.080 data center. Allegro Microsystems has got a great portfolio of 0:20:51.160 --> 0:20:56.880 sensing products that sell into automotive industrial, very very consistent market, 0:20:57.359 --> 0:21:00.480 and we believe with our scale and our go we 0:21:00.520 --> 0:21:03.600 can take that product broader and create innovative products for 0:21:03.640 --> 0:21:07.399 our customers. Both companies have a culture of innovation, so 0:21:07.440 --> 0:21:10.320 I think we're going to be combining companies that have 0:21:10.480 --> 0:21:13.480 common themes of innovation and it allows us to bring 0:21:13.480 --> 0:21:16.280 more value to our customers. That's really the strategic value 0:21:16.280 --> 0:21:19.480 of this in terms of what we're wanting to happen 0:21:19.520 --> 0:21:22.119 here is we're wanting to get some meaningful engagement with 0:21:22.280 --> 0:21:24.600 their board, hoping to get some dialogue. At this point, 0:21:24.600 --> 0:21:27.159 we haven't gotten that. Thus we went public with our 0:21:27.200 --> 0:21:29.520 offer to say we're here and we're hoping that we 0:21:29.560 --> 0:21:31.240 get some engagement from this point forward. 0:21:31.680 --> 0:21:34.080 Yeah, it's interesting that you're pursuing this deal at a 0:21:34.119 --> 0:21:37.040 time when dealmaking was supposed to pick up, but we 0:21:37.080 --> 0:21:39.360 haven't really seen it, and many companies are saying, well, 0:21:39.400 --> 0:21:41.280 the current environment is just so uncertain. 0:21:41.400 --> 0:21:42.640 So talk to us. 0:21:42.520 --> 0:21:45.360 About how the company came to this conclusion that now 0:21:45.400 --> 0:21:46.320 is actually a good time. 0:21:47.960 --> 0:21:51.440 Yeah. You know, when you think about a strategic deal 0:21:51.520 --> 0:21:53.639 for us, it's got to click a few boxes, right. 0:21:53.680 --> 0:21:55.399 I mean, you've got to have the strategic nature, the 0:21:55.520 --> 0:21:58.240 rationale in terms of what we can bring to our customers, 0:21:58.520 --> 0:22:00.840 and then you have to have the financial side of 0:22:00.880 --> 0:22:03.560 the things. So you know, we think about the creative deals, 0:22:03.600 --> 0:22:06.480 how quickly we can get to accretion and the shareholder 0:22:06.560 --> 0:22:09.679 value that we can create over time. The element that 0:22:09.720 --> 0:22:12.440 you have to take into consideration is the regulatory environment 0:22:12.440 --> 0:22:14.920 and that is the unknown right now. I don't think 0:22:14.960 --> 0:22:17.680 the regulatory environment has really changed much, you know, from 0:22:17.920 --> 0:22:21.199 administration to administration. So when you think about this, the 0:22:21.280 --> 0:22:23.920 hurdle is higher when you think about you're going to 0:22:24.000 --> 0:22:26.119 go to bat for something like this, but you have 0:22:26.160 --> 0:22:28.320 to have conviction that it's going to make sense and 0:22:28.359 --> 0:22:32.159 that you can get through that regulatory environment. When we 0:22:32.200 --> 0:22:34.199 look at it, we don't compete head to head on 0:22:34.240 --> 0:22:37.600 any of those products, and we've analyzed everything that we 0:22:37.680 --> 0:22:40.439 can see publicly, and we don't believe there's going to 0:22:40.440 --> 0:22:42.199 be a barrier. It may take some time, but we 0:22:42.280 --> 0:22:44.000 believe we can get this one across the line. 0:22:44.160 --> 0:22:46.320 That if you cannot get this one across the line, 0:22:46.359 --> 0:22:48.240 if you have to walk away, or if the deal 0:22:48.280 --> 0:22:50.320 falls through, if it doesn't work out for some reason, 0:22:51.160 --> 0:22:52.240 who do you pursue next? 0:22:53.160 --> 0:22:56.480 Well, look, that's hard to say. Right this one has 0:22:56.520 --> 0:22:58.920 a lot of strategic value to us. We're committed to 0:22:58.960 --> 0:23:01.120 the proposal that we have on the table. We're hoping 0:23:01.160 --> 0:23:04.480 to get that board and management team engaged and get 0:23:04.480 --> 0:23:05.840 in a room and talk about how we can get 0:23:05.840 --> 0:23:06.760 a combination together. 0:23:06.960 --> 0:23:09.000 Could the price go up and are you willing to 0:23:09.240 --> 0:23:11.320 raise the price if necessary to get the deal across 0:23:11.359 --> 0:23:12.159 the finish line. 0:23:13.640 --> 0:23:15.840 Look, that's to be determined. At this point. Everything that 0:23:15.880 --> 0:23:18.040 we've been able to look at is based on publicly 0:23:18.080 --> 0:23:22.000 available information. We want to get together with that management team, 0:23:22.080 --> 0:23:24.679 understand the true value, and then we'll make determinations. At 0:23:24.720 --> 0:23:27.720 that point. We have a very compelling offer. There's it's 0:23:27.720 --> 0:23:30.240 a fifty seven percent premium to the unaffected price. 0:23:30.720 --> 0:23:34.400 That was on Semiconductor CFO Thad trent along with Bloomberg 0:23:34.440 --> 0:23:37.359 News Senior editor Nina Trettman. That was featured in a 0:23:37.400 --> 0:23:40.679 recent Bloomberg CFO Briefing newsletter, which can be found at 0:23:40.680 --> 0:23:43.920 Bloomberg dot com slash CFO Briefing. A new one comes 0:23:43.920 --> 0:23:47.520 out on Sunday. Still ahead on Bloomberg BusinessWeek, two views 0:23:47.640 --> 0:23:50.359 on the energy space, one on the surge and interest 0:23:50.400 --> 0:23:54.760 in nuclear the other a startup providing backup power. That's next. 0:23:54.920 --> 0:23:55.760 This is Bloomberg. 0:24:01.520 --> 0:24:05.280 This is the Bloomberg Business Week Podcast. Listen live each 0:24:05.320 --> 0:24:08.600 weekday starting a two pm Eastern on Applecarplay and the 0:24:08.680 --> 0:24:11.520 Android Auto with the Bloomberg Business app. You can also 0:24:11.680 --> 0:24:15.000 listen live on Amazon Alexa from our flagship New York station. 0:24:15.480 --> 0:24:18.080 Just say Alexa played Bloomberg eleven thirty. 0:24:19.480 --> 0:24:22.280 Shares in nuclear power stocks rose this past week after 0:24:22.320 --> 0:24:25.399 technology and energy companies pledged to support wider use of 0:24:25.480 --> 0:24:28.919 nuclear power to cater to surging demand from data centers 0:24:28.920 --> 0:24:34.080 and factories. Amazon Meta Platforms, Occidental Petroleum and Now are 0:24:34.119 --> 0:24:37.320 among the initial members of the Large Energy Users Group, 0:24:37.560 --> 0:24:40.240 which is backing a global effort announced in twenty twenty 0:24:40.280 --> 0:24:44.040 three to triple the world's nuclear capacity by twenty fifty. 0:24:44.560 --> 0:24:47.760 It's all about meetings surging US demand for electricity, which 0:24:47.800 --> 0:24:50.719 will surge almost sixteen percent over the next five years, 0:24:50.960 --> 0:24:53.679 more than triple the estimate from a year ago, driven 0:24:53.720 --> 0:24:56.000 by new data centers and factories that are going to 0:24:56.040 --> 0:24:58.600 suck up power. That's according to the energy consulting group 0:24:58.760 --> 0:25:02.320 Grid Strategies. To hear more about the role nuclear power 0:25:02.359 --> 0:25:05.000 will play in meeting that demand, Tim and I spoke 0:25:05.040 --> 0:25:08.439 with the president and CEO of ANI. The Nuclear Energy Institute, 0:25:08.640 --> 0:25:12.160 Maria korsnik Anyi, is the lobbying arm of the nuclear 0:25:12.200 --> 0:25:15.480 power industry. She began with a near term forecast for 0:25:15.600 --> 0:25:16.240 the industry. 0:25:16.800 --> 0:25:21.000 In the next two years, we're expecting at least four 0:25:21.240 --> 0:25:26.359 grid scale applications for four different sites, a handful of 0:25:26.440 --> 0:25:32.359 microreactor applications, five sites with construction activities in flight, and 0:25:32.440 --> 0:25:37.359 two microreactor startups. So when I say that nuclear is moving, 0:25:37.920 --> 0:25:40.760 I just want you to feel that not only is 0:25:40.800 --> 0:25:43.160 the R and D, which we're going to be very 0:25:43.160 --> 0:25:46.000 thankful to, our national labs have brought a lot of 0:25:46.000 --> 0:25:49.520 different ideas to the marketplace, but you're actually now seeing 0:25:49.520 --> 0:25:54.720 it go into site applications and construction applications to get 0:25:54.720 --> 0:25:55.359 things moving. 0:25:55.720 --> 0:25:58.240 What would you say is the difference between the Biden 0:25:58.280 --> 0:26:03.119 administration's approach to nuclear energy versus the Trump administration's approach 0:26:03.119 --> 0:26:05.280 to nuclear energy? How did things change in January? 0:26:05.760 --> 0:26:08.119 So that's interesting. You know, this is maybe one of 0:26:08.160 --> 0:26:10.280 the only things, but one of the very few things 0:26:10.280 --> 0:26:14.520 that gets bipartisan support. And interesting if you think about 0:26:14.600 --> 0:26:18.040 nuclear right and you say, hey, well, it's very reliable. 0:26:18.400 --> 0:26:22.720 You know, it's clean, it's carbon free, it has jobs. 0:26:22.920 --> 0:26:25.439 You know, like, there's enough in there to love. On 0:26:25.560 --> 0:26:28.639 both sides of the aisle. On the Democrat side, you're 0:26:28.680 --> 0:26:31.440 going to get it more for the carbon free aspect 0:26:31.520 --> 0:26:33.800 of it. On the Republican side, you're going to get 0:26:33.840 --> 0:26:38.040 it more for the energy security, national security, high reliability 0:26:38.040 --> 0:26:41.640 of the energy source, and both sides love the jobs. 0:26:42.359 --> 0:26:44.200 So talk a little bit more about the build out. 0:26:44.240 --> 0:26:46.160 You know, you kick things off with, you know, things 0:26:46.160 --> 0:26:49.440 that are happening now. Realistically, a lot of folks said, 0:26:49.600 --> 0:26:52.960 when we really think about nuclear energy while the US 0:26:53.080 --> 0:26:56.359 is active, that it's still a very small portion of 0:26:56.400 --> 0:27:00.600 our electricity generation right in terms of a power provider, 0:27:00.840 --> 0:27:03.520 that that build out might be eight to ten years away. 0:27:03.960 --> 0:27:06.960 You're in it, you're talking to the players that are 0:27:07.000 --> 0:27:09.960 in it. What is the realistic timeframe that it is 0:27:10.000 --> 0:27:14.280 a substantial or more substantial part of a generation of 0:27:14.359 --> 0:27:15.760 power here in the United States. 0:27:16.119 --> 0:27:19.760 So today nuclear is about twenty percent, just under twenty 0:27:19.800 --> 0:27:23.320 percent of the generation. But to your point, let's talk 0:27:23.359 --> 0:27:26.600 about all of that demand. And you mentioned earlier the 0:27:26.640 --> 0:27:30.040 AI demand that's really getting into the marketplace. 0:27:30.160 --> 0:27:32.800 But you know, it's not just AI, it's. 0:27:32.640 --> 0:27:36.920 Also ensuring, manufacturing. It's also the fact that you want 0:27:36.960 --> 0:27:41.000 to build out the clean energy supply that we have today, 0:27:41.480 --> 0:27:44.520 and so all of that together is really driving this 0:27:44.640 --> 0:27:47.679 demand much higher than what we had imagined even just 0:27:47.720 --> 0:27:50.800 a few years ago. The next few years, you're going 0:27:50.880 --> 0:27:54.040 to see ones and twos of things built. Think pilot 0:27:54.119 --> 0:27:57.000 projects over the next few years, and I think in 0:27:57.040 --> 0:28:01.400 the twenty thirties and the twenty forties of very significant buildout. 0:28:01.400 --> 0:28:03.400 And I want to add, it's not just a build 0:28:03.440 --> 0:28:06.720 out in the United States. The conversation we're having about 0:28:06.800 --> 0:28:09.440 nuclear it's happening around the globe. 0:28:09.800 --> 0:28:11.240 Well, and why is it so important? 0:28:11.480 --> 0:28:14.360 Look at Europe, look at France, look at China, look 0:28:14.440 --> 0:28:18.280 at various nations in terms of their percentage of power 0:28:18.359 --> 0:28:21.399 generation being larger than what it is in the United States. 0:28:21.440 --> 0:28:22.280 If the US. 0:28:22.080 --> 0:28:26.320 Doesn't have a role in this area, what does that mean? 0:28:26.920 --> 0:28:29.040 Yeah, so let's just try that on for size. 0:28:29.080 --> 0:28:32.320 Who is interested in building a lot of commercial nuclear 0:28:32.640 --> 0:28:36.720 Russia and China, And they're not only interested in building 0:28:36.760 --> 0:28:40.160 it in their own country. Today, right now Russia is 0:28:40.160 --> 0:28:43.160 building nuclear plants in ten other countries. 0:28:43.800 --> 0:28:44.800 And why is that? 0:28:44.960 --> 0:28:47.760 Well, it wasn't too long ago where we saw Russia 0:28:47.880 --> 0:28:51.080 turn off the gas supply to Europe. So I would 0:28:51.080 --> 0:28:54.720 tell you there's a geopolitical strategy on some countries that 0:28:54.800 --> 0:28:59.120 would like to control other countries energy supply, and why 0:28:59.120 --> 0:29:02.800 should we fall for that. So we have fantastic technology, 0:29:03.200 --> 0:29:06.320 we have the ability to really help our allies and 0:29:06.480 --> 0:29:10.719 in that way we protect them from this kind of behavior. 0:29:11.120 --> 0:29:14.440 And it would be sad to see this replicated in 0:29:14.520 --> 0:29:17.040 ten to twenty years we look back and say, oh, 0:29:17.200 --> 0:29:20.320 why do they have the power over commercial nuclear industry? 0:29:20.360 --> 0:29:22.440 Why do they have the power over all of these 0:29:22.440 --> 0:29:25.240 different countries. We shouldn't let ourselves get there. So from 0:29:25.280 --> 0:29:29.560 a national security perspective, from an energy security perspective, the 0:29:29.640 --> 0:29:33.240 United States needs to lead in commercial nuclear power. 0:29:33.520 --> 0:29:36.720 That's the president and CEO of ANYI, the Nuclear Energy Institute, 0:29:36.840 --> 0:29:40.200 Maria Korsnik. While on the subject of power, you might 0:29:40.240 --> 0:29:43.640 recall back in February, more than one hundred million people 0:29:43.680 --> 0:29:47.520 faced frigid conditions across the eastern and central US, including 0:29:47.520 --> 0:29:51.080 the entire state of Texas, as an arctic blast threatened 0:29:51.080 --> 0:29:54.280 to break low temperature records. Someone who knows a bit 0:29:54.360 --> 0:29:57.040 about Texas and the Texas State grid is Zach Dell, 0:29:57.160 --> 0:29:59.560 who is co founder and CEO of Based Power Company. 0:30:00.040 --> 0:30:02.440 You joined Tim and me from Houston, kicking off our 0:30:02.520 --> 0:30:05.719 chat with a reminder of Texas's place in the US 0:30:05.840 --> 0:30:06.520 energy space. 0:30:06.960 --> 0:30:10.240 Texas is the energy capital of the country. It leads 0:30:10.280 --> 0:30:14.320 to the country in renewable generation. We have more wind 0:30:14.360 --> 0:30:17.200 and more solar than almost anywhere in the country, and 0:30:17.240 --> 0:30:19.360 that's because Texas is the middle of the wind corridor, 0:30:19.400 --> 0:30:21.080 it's in the middle of the sun Belt, and it's 0:30:21.080 --> 0:30:24.280 a great place to develop energy infrastructure. It's a free market, 0:30:25.000 --> 0:30:27.440 it's a deregulated energy market for the most part. Or 0:30:27.520 --> 0:30:31.560 Coat is one of the largest electricity markets in the country, 0:30:31.720 --> 0:30:34.080 and so it's a great place to build energy technology. 0:30:34.240 --> 0:30:36.680 That's why we've decided to start the company here in Texas. 0:30:37.440 --> 0:30:39.400 But it's also a part of the country that's seen 0:30:39.400 --> 0:30:43.480 incredible population growth, it's seen incredible growth in heavy industry, 0:30:43.800 --> 0:30:45.520 and that's put a lot of stress on the grid. 0:30:45.720 --> 0:30:49.720 And so we started the company to increase our capacity 0:30:49.720 --> 0:30:52.320 for energy consumption and add resources to the power grid 0:30:52.360 --> 0:30:55.760 in the form of distributed battery storage to help absorb 0:30:55.840 --> 0:30:59.040 some of that growth, absorb from that demand, and set 0:30:59.080 --> 0:31:03.000 us up for a future of energy abundance and human 0:31:03.040 --> 0:31:04.040 prosperity here in the state. 0:31:04.240 --> 0:31:07.080 Zach explain where exactly the company lives on the grid 0:31:07.120 --> 0:31:10.080 in the sense of Okay, it's not necessarily a utility, 0:31:10.120 --> 0:31:12.800 it's not necessarily an energy provider. 0:31:13.160 --> 0:31:16.320 How do you define it exactly, So we are a 0:31:16.360 --> 0:31:19.840 distributed energy technology company. So we deploy our storage assets 0:31:20.080 --> 0:31:23.200 on the grid edge on site with our customers. So 0:31:23.840 --> 0:31:27.640 we install batteries on homes today. Customers sign up for 0:31:27.680 --> 0:31:30.080 base Power, we go install our battery on their home. 0:31:30.160 --> 0:31:31.720 When the grid is up and running. We use that 0:31:31.760 --> 0:31:34.000 battery to support the power grid in times of high demand. 0:31:34.320 --> 0:31:36.440 When the grid goes down. The customer gets that battery 0:31:36.440 --> 0:31:37.880 to protect their home from power averages. 0:31:38.640 --> 0:31:40.280 Well and tell us about it. Like a customer that 0:31:40.360 --> 0:31:42.960 signs up, Zach, exactly what are they getting. They're getting 0:31:42.960 --> 0:31:45.880 batteries right, and there's installation that's involved. I'm curious about 0:31:46.160 --> 0:31:48.240 how it works. What they get. My understanding is the 0:31:48.240 --> 0:31:50.400 batteries are big. What it costs? Give me give us 0:31:50.440 --> 0:31:50.880 an idea. 0:31:51.760 --> 0:31:54.440 Yes, So customers sign up and pay four ninety five 0:31:54.520 --> 0:31:57.560 upfront and sixteen dollars a month and get all the 0:31:57.600 --> 0:32:00.480 benefits of home backup protection without the high up cost 0:32:00.520 --> 0:32:04.240 of buying a large generator or buying a traditional home battery. 0:32:04.240 --> 0:32:06.680 So we install a battery that's twenty five kill a 0:32:06.680 --> 0:32:09.040 wide hours for one system, and you can get two 0:32:09.040 --> 0:32:11.280 systems installed, which gets you to fifty kill a lot hours, 0:32:11.480 --> 0:32:13.880 which will protect your home for up to one to 0:32:13.920 --> 0:32:15.720 two days, depending on the size of the home and 0:32:15.800 --> 0:32:17.760 the event of a power out. So you get a 0:32:17.840 --> 0:32:20.920 really large battery for really low upfront cost and a 0:32:20.920 --> 0:32:23.240 low monthly fee, cheaper than a gym membership, cheaper than 0:32:23.240 --> 0:32:27.040 a Netflix subscription, cheaper than Amazon Prime. And when the 0:32:27.040 --> 0:32:30.880 grid's up and running, you're buying your electricity from us. 0:32:31.000 --> 0:32:32.680 We're able to save you ten to twenty percent a 0:32:32.680 --> 0:32:34.640 month on power. And when the grid goes down, you 0:32:34.680 --> 0:32:37.280 get to protect your home, keep that fridge going, keep 0:32:37.280 --> 0:32:39.880 your ac running, keep your lights on, and keep your 0:32:39.880 --> 0:32:40.520 family safe. 0:32:40.680 --> 0:32:40.880 Zach. 0:32:40.880 --> 0:32:43.040 We're talking about this in the context of Texas, of course, 0:32:43.040 --> 0:32:45.520 and a lot of focus has been on Texas's grid. Also, 0:32:45.600 --> 0:32:48.640 California is grid another state that comes into focus. Any 0:32:48.640 --> 0:32:52.600 plans to expand to California. 0:32:51.120 --> 0:32:52.880 Absolutely, I mean, we hope to be in all fifty 0:32:52.880 --> 0:32:55.920 states over the next couple of years, and we're working 0:32:55.920 --> 0:32:58.400 to partner with some of the regulated utilities in states 0:32:58.440 --> 0:33:01.640 like California that don't have a regulated energy market. Texas 0:33:01.720 --> 0:33:03.840 is an amazing place to start the business because the 0:33:03.920 --> 0:33:06.720 vast majority of the state, about eighty percent, is deregulated, 0:33:06.760 --> 0:33:09.600 So we are actually a retail actor provider and a 0:33:09.640 --> 0:33:12.320 battery developer, So we sell power directly to the homeowner 0:33:12.320 --> 0:33:14.240 and then we own and operate the batteries on site. 0:33:14.360 --> 0:33:17.520 In a state like California, you have regulator utilities like 0:33:17.680 --> 0:33:23.160 LEDWP and PGNE that have kind of geographic monopolies over 0:33:23.160 --> 0:33:25.640 certain areas, and so we'll partner directly with those regulated 0:33:25.720 --> 0:33:29.120 utilities provide our hardware and software to them to enter 0:33:29.160 --> 0:33:29.760 those markets. 0:33:29.920 --> 0:33:32.040 And from what I understand too, Zach, that the success 0:33:32.040 --> 0:33:34.320 of the company's contingent on more and more people right 0:33:34.440 --> 0:33:37.080 signing up, right, you need to kind of have a network. 0:33:38.520 --> 0:33:42.560 Well, not necessarily. We're able to operate our batteries at 0:33:42.600 --> 0:33:45.400 the individual level, so we don't necessarily there's not like 0:33:45.440 --> 0:33:48.080 traditional network effect benefits to more people signing up. But 0:33:48.120 --> 0:33:51.680 obviously businesses benefit from scale and we benefit from scale 0:33:51.720 --> 0:33:54.280 in the same ways. But it's not like the system 0:33:54.280 --> 0:33:56.000 doesn't work well if a couple of people in the 0:33:56.000 --> 0:33:59.400 neighborhood have it. There's really no meaningful difference if you're 0:33:59.440 --> 0:34:01.200 the only one in your neighborhood or everyone in your 0:34:01.200 --> 0:34:03.600 neighborhood has base power, all right. 0:34:03.480 --> 0:34:06.000 So if you're as an individual, there's no difference. But 0:34:06.840 --> 0:34:09.480 what do you get out of building that scale. 0:34:10.840 --> 0:34:13.440 Well, we benefit from scale, just like most businesses benefit 0:34:13.520 --> 0:34:15.360 from scale. So we have economies of scale on the 0:34:15.360 --> 0:34:19.040 supply chain side, on the engineering side, building out our team, 0:34:19.080 --> 0:34:22.640 our resources. The larger we get, the lower the cost 0:34:22.680 --> 0:34:24.920 that we can provide to the customer. So our goals 0:34:24.920 --> 0:34:27.440 of business is to develop a compounding cost advantage to 0:34:27.520 --> 0:34:30.319 vertical integration. So we develop our own batteries, we develop 0:34:30.320 --> 0:34:32.520 our own software, we manage the insolution, we sell power 0:34:32.600 --> 0:34:34.759 directly with the homeowner, and by doing all those things, 0:34:34.760 --> 0:34:37.040 we can drive the cost down for the customer and 0:34:37.080 --> 0:34:39.520 deliver the most affordable and most reliable power. 0:34:39.560 --> 0:34:41.719 Right because from what I understand too, you're monitoring what 0:34:41.800 --> 0:34:44.160 the prices of energy and so when it goes down, 0:34:44.239 --> 0:34:46.799 you guys are filling up the batteries. Correct, that's right. 0:34:47.160 --> 0:34:49.600 If a power company sees what you're doing right now 0:34:49.640 --> 0:34:51.479 and says, wait a second, that's a really good idea. 0:34:51.600 --> 0:34:54.879 What's to stop con ED or PGNE on California from 0:34:55.000 --> 0:34:57.080 basically replicating what you're doing, but they already have the 0:34:57.120 --> 0:34:58.240 relationship with the customer. 0:34:58.440 --> 0:35:00.720 Well, it's very hard. You have to become an expert 0:35:00.880 --> 0:35:05.359 in battery hardware engineering, power electronics, supply chain operations. You 0:35:05.360 --> 0:35:07.080 have to deploy these batteries on site, you have to 0:35:07.080 --> 0:35:08.800 interface directly with the customers, you have to build a 0:35:08.800 --> 0:35:12.520 consumer brand. There's a lot of interesting and challenging distributed 0:35:12.520 --> 0:35:14.520 system software problems that you have to solve to deploy 0:35:14.560 --> 0:35:17.080 this technology. So we're really excited to partner with those 0:35:17.160 --> 0:35:20.880 utilities and help them deploy battery technology in their service territories. 0:35:21.239 --> 0:35:23.520 As you guys know, these investor own utilities are not 0:35:23.760 --> 0:35:26.040 incentivized to invest money in op X in R and 0:35:26.120 --> 0:35:28.440 D their cap X driven businesses. They earn a regulated 0:35:28.440 --> 0:35:30.800 way of return on their CAPEX, and so their incentive 0:35:30.840 --> 0:35:33.440 is really to deploy CAPEX and their service territory and 0:35:34.800 --> 0:35:37.239 they add that into their rate base and that kind 0:35:37.239 --> 0:35:39.680 of influences what they end up charging the end consumer. 0:35:39.960 --> 0:35:41.080 Our business is a little bit different. 0:35:41.120 --> 0:35:42.280 We're an R and D driven business. 0:35:42.280 --> 0:35:44.800 We develop technology and we bet that that technology is 0:35:44.800 --> 0:35:47.600 going to benefit the customer and we benefit downstream of that, 0:35:47.719 --> 0:35:50.040 and so we think that we're an obvious partner or 0:35:50.080 --> 0:35:51.960 some of these regulated utilities as kind of an R 0:35:51.960 --> 0:35:54.759 and D partner where we can develop technology and then 0:35:54.760 --> 0:35:56.920 we can go deploy that technology in their service territory. 0:35:57.200 --> 0:35:59.600 They benefit, we benefit, and the homeowner benefits as well. 0:36:00.000 --> 0:36:02.200 So curious, are you profitable or how many states do 0:36:02.239 --> 0:36:04.720 you think you have to reach out to or expand 0:36:04.719 --> 0:36:06.160 to before you are profitable. 0:36:06.400 --> 0:36:09.040 I don't think about it as a number of states number. 0:36:09.080 --> 0:36:11.560 It's really about building the fleet and getting to scale. 0:36:11.680 --> 0:36:14.200 And so we started the company a little under two 0:36:14.280 --> 0:36:16.400 years ago. We launched a product in May. We've been 0:36:16.440 --> 0:36:18.720 scaling rapidly. We're doing on the order of twenty battery 0:36:18.719 --> 0:36:21.200 installation of the day. We'll continue to scale up at 0:36:21.200 --> 0:36:24.200 a faster and faster rate and move outside of Texas 0:36:24.200 --> 0:36:26.160 and states like California. And you know, we think there's 0:36:26.160 --> 0:36:28.680 a really attractive kind of economic proposition for the business 0:36:29.360 --> 0:36:29.880 going forward. 0:36:30.080 --> 0:36:33.040 Zachdale, co founder and CEO based Power Company. And that 0:36:33.080 --> 0:36:34.920 wraps up our first hour of the weekend edition of 0:36:34.920 --> 0:36:38.200 Bloomberg Business Week from Bloomberg Radio. Ahead in our next hour, 0:36:38.320 --> 0:36:42.799 Melinda Gates Venture arm NBA, Students Lord Overseas and how 0:36:42.840 --> 0:36:46.600 to challenge segregation enacted under the color of law. We 0:36:46.640 --> 0:36:49.200 look at the state of fair housing. This is Bloomberg 0:36:49.239 --> 0:36:51.719 Business Week. I'm Carol Master along with Tim Stenoveek. 0:36:52.200 --> 0:36:55.560 You are listening to the Bloomberg Business Week podcast. Catch 0:36:55.600 --> 0:36:58.840 us live weekday afternoons from two to five pm Eastern 0:36:59.000 --> 0:37:01.480 Listen on Apple cart Play and Android Auto with the 0:37:01.480 --> 0:37:05.680 Bloomberg Business app, or watch us live on YouTube. 0:37:05.920 --> 0:37:07.879 Plenty Ahead in our second hour of the weekend edition 0:37:07.880 --> 0:37:10.440 of Bloomberg Business Week, Tim just a reminder is on 0:37:10.560 --> 0:37:13.879 assignment this weekend. Now for the next sixty minutes, we 0:37:13.920 --> 0:37:17.520 will touch upon the world of MBAs, including studying overseas 0:37:17.719 --> 0:37:21.080 and this year's NBA job market, Plus where the VC 0:37:21.200 --> 0:37:25.040 firm founded by Melinda French Gates is finding opportunities, and 0:37:25.120 --> 0:37:27.400 the state affair housing in the United States with the 0:37:27.440 --> 0:37:31.120 author of How to Challenge Segregation Enacted under the Color 0:37:31.160 --> 0:37:33.719 of Law. First up this hour and update from the 0:37:33.719 --> 0:37:34.840 world of venture capital. 0:37:35.120 --> 0:37:35.239 Well. 0:37:35.320 --> 0:37:37.279 Quite a few of the companies that Pivotal Ventures has 0:37:37.320 --> 0:37:40.480 invested in are familiar to our viewers and listeners. Elvest 0:37:40.520 --> 0:37:43.480 and Little Otter, to name just a couple. Those founders 0:37:43.520 --> 0:37:46.160 and CEOs have been on our air. Other investments include 0:37:46.239 --> 0:37:50.200 Hugh Founder's First Capital Partners, Millie Monamie, Summer Health, and more. 0:37:50.640 --> 0:37:52.920 Pivot Ventures was found in nearly a decade ago by 0:37:52.960 --> 0:37:56.000 Melinda French Gates, and it seeks to, in its own words, quote, 0:37:56.320 --> 0:38:01.919 accelerate social progress through high impact investments, bilanthrope partnerships, and advocacy. 0:38:02.239 --> 0:38:05.600 The companies also invested in nearly two dozen funds. We've 0:38:05.680 --> 0:38:08.680 got with us. Aaron Harkless Moore, Senior director of Investments 0:38:08.719 --> 0:38:13.200 at Pivotal Ventures. She joins us from Washington, DC, erin, 0:38:13.200 --> 0:38:15.839 when you're looking out over the investment landscape, what are 0:38:15.880 --> 0:38:19.839 the boxes that the companies or the funds you want 0:38:19.840 --> 0:38:22.960 to invest in, or you are looking to invest in, 0:38:23.400 --> 0:38:24.759 what are the boxes they have to check? 0:38:26.719 --> 0:38:28.839 Tim, Carol, thanks for having me on today. It's great 0:38:28.880 --> 0:38:33.440 to be with you. We're excited about this market opportunity 0:38:33.840 --> 0:38:38.120 that we see in investing in innovators that are building 0:38:38.200 --> 0:38:40.520 the next generation of companies that are tackling some of 0:38:40.560 --> 0:38:45.520 the biggest challenges facing our society in caregiving and women's 0:38:45.560 --> 0:38:50.200 health and mental health. So we want to see founders 0:38:50.239 --> 0:38:53.560 that have lived experience in building in the areas that 0:38:53.600 --> 0:38:57.600 they're targeting, and that are taking advantage of huge market opportunities. 0:38:57.760 --> 0:39:00.920 Our strategy at Pivotal is to invest in both funds 0:39:01.239 --> 0:39:05.640 and directly into startups that are again innovating in what 0:39:05.640 --> 0:39:07.680 they're doing, and so we're looking for founders that are 0:39:07.680 --> 0:39:10.839 going to bring game changing technologies to the table and 0:39:10.920 --> 0:39:13.279 also backing the investors that are going to capitalize them 0:39:13.320 --> 0:39:13.640 as well. 0:39:15.320 --> 0:39:17.279 Aaron, we love size and scope here at Bloomberg. Give 0:39:17.320 --> 0:39:20.719 me an idea of how much stuff gets pitched to you, 0:39:20.800 --> 0:39:23.400 how much comes across your desk, whether it's a startup 0:39:23.880 --> 0:39:27.759 or a fund that says, help, we're doing something good, 0:39:27.880 --> 0:39:31.719 but we need either some funding or some assistance to 0:39:31.840 --> 0:39:33.800 even you know, increase our impact. 0:39:34.960 --> 0:39:38.160 Sure, our pipeline is very robust, and I think it's 0:39:38.160 --> 0:39:40.640 a it's a hallmark of our strategy that we try 0:39:40.640 --> 0:39:43.080 to do a couple of things differently. You know, when 0:39:43.160 --> 0:39:46.279 we're accessible, we don't need a warm intro. So if 0:39:46.320 --> 0:39:50.680 founders can find us, you know, on LinkedIn, at conferences, 0:39:50.760 --> 0:39:53.600 at events, we're happy to take those meetings and get 0:39:53.640 --> 0:39:55.800 to know get to know them and what they're trying 0:39:55.840 --> 0:39:59.640 to build. We also want to invest early when we can. 0:39:59.800 --> 0:40:02.920 You know, typically for fund managers on that side of 0:40:02.960 --> 0:40:07.280 the table, you will focus a lot on emerging managers, 0:40:07.320 --> 0:40:10.000 those that are often first time funds. And I actually 0:40:10.040 --> 0:40:11.719 like to think of them in a different frame, is 0:40:12.120 --> 0:40:16.000 its next generation managers that are finding new patterns and 0:40:16.120 --> 0:40:18.920 new types of founders and innovations that they can back. 0:40:19.400 --> 0:40:22.600 So our pipeline is robust and we're excited to be 0:40:22.680 --> 0:40:24.720 deploying capital in this market environment. 0:40:25.400 --> 0:40:27.239 Well, how would you describe the market environment right now? 0:40:27.280 --> 0:40:29.560 Because so much of what we talk about is about 0:40:29.560 --> 0:40:33.359 investment in AI. I mean, there's even a headline from 0:40:33.440 --> 0:40:37.240 our Bloomberg News team Anthropic finalizes three point five billion 0:40:37.280 --> 0:40:39.800 dollar funding around at a sixty one point five billion 0:40:39.800 --> 0:40:42.719 dollar valuation. Do you feel like you're you're missing out 0:40:42.719 --> 0:40:45.479 at all because of a lack of AI investments right now? 0:40:46.880 --> 0:40:47.399 Not at all. 0:40:47.480 --> 0:40:50.239 We are investing in AI. Our fund managers are you 0:40:50.320 --> 0:40:53.440 mentioned Little Otter as well at the top of the 0:40:53.480 --> 0:40:57.240 introduction one of our newer investments. You know, they raised 0:40:57.760 --> 0:41:00.560 a little over nine million dollars to continue to bring 0:41:00.680 --> 0:41:04.200 AI into their behavioral health and mental health platform to 0:41:04.239 --> 0:41:08.640 support children and families and caregivers. And so you know, 0:41:08.719 --> 0:41:12.000 AI is present in our strategy and the funds and 0:41:12.040 --> 0:41:15.040 the companies that we're investing in, and we think AI 0:41:15.160 --> 0:41:19.720 is essential to modernize our healthcare system, our caregiving and infrastructure, 0:41:20.080 --> 0:41:24.239 foundational industries like manufacturing and supply change, wealth tech. It's 0:41:24.239 --> 0:41:27.560 showing up across our fun portfolio, in our and directly 0:41:27.560 --> 0:41:30.560 in some of the companies we're backing. So it's important 0:41:30.560 --> 0:41:32.000 in something that we're spending a lot of time in 0:41:32.040 --> 0:41:32.880 at Pivotal Ventures. 0:41:32.960 --> 0:41:34.880 Yeah, I should note Rebecca Edgar, the co founder and 0:41:34.960 --> 0:41:37.080 CEO of Little Otter, was on our program that was 0:41:37.160 --> 0:41:39.960 back on Valentine's Day Carols just a little over a 0:41:40.000 --> 0:41:40.439 week ago. 0:41:40.560 --> 0:41:42.800 It was a great conversation. Yeah, it was a really 0:41:44.480 --> 0:41:47.680 rewarding conversation. I feel like eye opening for all of us. 0:41:48.560 --> 0:41:52.319 I am curious too about the caregiving component that you 0:41:52.320 --> 0:41:54.279 guys are investing in. I feel like that comes up 0:41:54.400 --> 0:41:57.680 more and more in terms of, you know, if it's 0:41:57.680 --> 0:41:59.560 a book on like how to lead, how to manage, 0:41:59.560 --> 0:42:01.120 how to move ahead, you got to think about the 0:42:01.480 --> 0:42:04.840 caregiving component in your personal life, but also have society 0:42:04.840 --> 0:42:07.279 at large talk to us about how you approach caregiving 0:42:07.640 --> 0:42:10.960 and what you see as the biggest kind of struggles 0:42:11.000 --> 0:42:13.719 that we need to really invest in and overcome. 0:42:14.120 --> 0:42:17.680 Sure, just to give a shout out to all the caregivers. 0:42:17.680 --> 0:42:20.560 We're all caregivers at some point in our lives, you know, 0:42:20.600 --> 0:42:23.960 whether you're caring for young people, the aging, your own 0:42:24.000 --> 0:42:27.680 family members, your spouse, a friend, a neighbor. We've supported 0:42:27.719 --> 0:42:30.759 some research at Pivotal Ventures that size the care economy 0:42:30.920 --> 0:42:34.160 is a six hundred and forty eight billion dollar market. 0:42:34.600 --> 0:42:38.000 That's huge. It's actually bigger than the pharmaceutical industry. And 0:42:38.560 --> 0:42:41.920 we need that modern caregiving system to support women and 0:42:41.960 --> 0:42:45.239 families in all of us to be able to, you know, 0:42:45.320 --> 0:42:50.440 do our work and be productive and active contributors to society. So, 0:42:50.840 --> 0:42:53.080 you know, we think that those investments in those systems, 0:42:53.080 --> 0:42:57.839 whether it be from childcare all the way through to 0:42:57.840 --> 0:43:00.600 tools to optimize the home and caregiving in the home, 0:43:01.239 --> 0:43:05.120 to the eldercare space and in the aging side of 0:43:05.160 --> 0:43:09.000 the spectrum, all are huge opportunities. We have funds and 0:43:09.040 --> 0:43:11.840 companies in our portfolio that we're tracking that are innovating 0:43:11.880 --> 0:43:14.680 in those spaces, and we think it's a big market 0:43:14.680 --> 0:43:17.359 and others should be paying attention and deploying capital there 0:43:17.400 --> 0:43:17.759 as well. 0:43:18.560 --> 0:43:20.880 Where do the funds of funds come in here versus 0:43:20.920 --> 0:43:22.960 the direct investments? Like how do you think of when 0:43:22.960 --> 0:43:24.719 to make an investment in a company versus when to 0:43:24.760 --> 0:43:26.880 deploy capital to a fund of funds. 0:43:27.480 --> 0:43:31.000 Yeah, both are pillars of our strategy. Our portfolio of 0:43:31.080 --> 0:43:35.799 fund investments is essential to changing the face of our 0:43:35.800 --> 0:43:40.680 investment ecosystem and the venture capital sector in particular. There's 0:43:40.719 --> 0:43:43.799 been some data, you know, pitch Book is put out 0:43:43.920 --> 0:43:47.560 and others. You know, about seventeen percent of decision makers 0:43:47.600 --> 0:43:50.840 at US venture capital firms right now are women. That 0:43:50.920 --> 0:43:53.719 number is almost doubled in the last decade, but we 0:43:53.760 --> 0:43:56.080 still have a long way to go, and so as 0:43:56.120 --> 0:43:58.759 part of our strategy, we think it's incredibly important to 0:43:58.960 --> 0:44:03.480 back these women investors who are deploying capital and finding 0:44:03.480 --> 0:44:08.080 great founders in every sector, whether that be supply chain 0:44:08.080 --> 0:44:10.839 and manufacturing as I mentioned, and the tech that's innovating there, 0:44:10.960 --> 0:44:14.160 to digital health, to the consumer space. You know, we 0:44:14.200 --> 0:44:17.640 want to find women leaders and investors of all stripes 0:44:17.640 --> 0:44:20.719 that are that are deploying capital across those sectors. And 0:44:20.760 --> 0:44:24.439 our direct investing strategy is complements that. It's not really 0:44:24.520 --> 0:44:26.839 an either or. I think it's a both and and 0:44:26.880 --> 0:44:30.440 we see opportunities again in this care economy thesis. Women's 0:44:30.480 --> 0:44:34.879 health as well maternal health, menopause, and care around those 0:44:34.920 --> 0:44:37.759 themes is a huge opportunity. So you know, with our 0:44:37.760 --> 0:44:40.880 direct investing, we try to flex and focus on areas 0:44:40.880 --> 0:44:44.080 that are aligned back to our broader mission at Pivotal 0:44:44.480 --> 0:44:47.320 to get more power to more people, especially women. 0:44:47.800 --> 0:44:50.640 I did mention the Pivotal Ventures was founded close to 0:44:50.680 --> 0:44:53.239 a decade ago by Melinda French Gates. Just clear clear 0:44:53.320 --> 0:44:55.359 something up for us. Is there other money in there 0:44:55.400 --> 0:44:57.719 right now or is this all money from Melinda French Gates? 0:44:57.719 --> 0:44:58.360 Do you have other. 0:44:58.360 --> 0:45:05.160 LPs capital solely from Melinda? Again, she started Pivotal about 0:45:05.160 --> 0:45:08.720 a decade ago in twenty fifteen, really with a mission 0:45:08.920 --> 0:45:14.080 to advance social progress and advance women's power and influence, 0:45:14.080 --> 0:45:17.160 get more power. As I said before, two more people. 0:45:17.600 --> 0:45:20.600 And one thing that was innovative when Melinda set this 0:45:20.719 --> 0:45:23.640 up was this idea that you need multiple tools to 0:45:23.760 --> 0:45:27.080 advance this objective and to see our mission, and that 0:45:27.160 --> 0:45:30.920 includes philanthropy, that also includes the investing and the investment 0:45:30.920 --> 0:45:32.040 capital that we're deploying. 0:45:32.480 --> 0:45:36.120 Do you think that gives you more leeway in terms 0:45:36.120 --> 0:45:39.799 of timing there's not as much pressure for returns over 0:45:39.840 --> 0:45:41.800 a certain period of time. Do you think it changes 0:45:42.280 --> 0:45:45.360 your investment strategy because there is this patient capital. 0:45:46.560 --> 0:45:49.839 Our strategy is long term, as you noted, and I 0:45:49.880 --> 0:45:54.719 do agree that having that ability to see the full 0:45:54.760 --> 0:45:57.960 picture and deploy multiple tools in our tool get as 0:45:58.000 --> 0:46:00.759 a platform is huge to drive our mission and the 0:46:00.800 --> 0:46:03.479 type of change that we want to see in the world. 0:46:03.560 --> 0:46:05.680 But let me be clear, this is a strategy that 0:46:05.760 --> 0:46:10.080 is centered on achieving best in class financial return by 0:46:10.200 --> 0:46:12.680 investing in these funds and some of the themes that 0:46:12.719 --> 0:46:15.640 we've discussed like care economy and women's health and AI, 0:46:16.080 --> 0:46:19.000 we think there's a great potential to deliver you know, 0:46:19.040 --> 0:46:22.000 best in class market rate returns again over the long term. 0:46:22.160 --> 0:46:25.000 But we do have that patience in our in our 0:46:25.040 --> 0:46:27.600 with our founder alongside us to do just that. 0:46:27.880 --> 0:46:31.480 Aaron, do you feel like that the establishment, the financial establishment, 0:46:31.600 --> 0:46:35.000 especially when it comes to women founders and funders, are 0:46:35.080 --> 0:46:37.640 still kind of forgotten and overlooked. 0:46:39.840 --> 0:46:43.400 It's easy to stick with the patterns that that one notes. 0:46:43.480 --> 0:46:47.120 I've been investing in funds and for close to two 0:46:47.120 --> 0:46:50.000 decades now, and you know, I think that it's it's 0:46:50.600 --> 0:46:53.640 no one gets fired for sort of following the same playbook. 0:46:54.000 --> 0:46:57.000 What excites me about what we're doing at Pivotal Ventures 0:46:57.120 --> 0:47:01.560 is we're recasting a different playbook that that I think 0:47:01.600 --> 0:47:05.520 will show other investors and other stakeholders and the financial 0:47:05.520 --> 0:47:08.680 ecosystem and the investment industry that there is real value 0:47:08.719 --> 0:47:11.320 to be had by bringing different perspectives to the table, 0:47:11.760 --> 0:47:14.800 looking at opportunities like this care economy that are huge 0:47:14.840 --> 0:47:17.960 against six hundred and forty eight billion dollar market. That's 0:47:18.000 --> 0:47:20.080 the type of paradigm shifting we want to see. And 0:47:20.120 --> 0:47:23.440 it's really it comes back to, you know, having that 0:47:23.520 --> 0:47:27.239 patience and time horizon to play it out and being 0:47:27.239 --> 0:47:28.120 long term focused. 0:47:28.520 --> 0:47:30.719 What is your time horizon for an investment. 0:47:32.280 --> 0:47:35.960 It's a typical it's an early stage and investor timeline. 0:47:36.000 --> 0:47:39.719 You know, we're deploying capital year over year, and you know, 0:47:39.760 --> 0:47:44.040 on our funds their typical venture early stage fund that 0:47:44.120 --> 0:47:46.560 will be investing over a three to four year time 0:47:46.600 --> 0:47:50.560 period and then harvesting the gains beyond that. So you know, 0:47:50.600 --> 0:47:53.480 it's it's a long time horizon. I'd say, you know, 0:47:53.560 --> 0:47:57.280 decade plus that we're really looking to drive the results 0:47:57.280 --> 0:47:59.320 that we want to see both in our funds and 0:47:59.719 --> 0:48:02.520 with our companies. If they return capital sooner, that's great, 0:48:03.000 --> 0:48:06.040 but you know, not at the sacrifice for your building. 0:48:06.080 --> 0:48:08.880 I think an enduring platform as a fund manager or 0:48:08.920 --> 0:48:10.240 a business as a founder. 0:48:10.440 --> 0:48:13.400 That was Aaron Harkless Moore, Senior director of Investments at 0:48:13.440 --> 0:48:17.080 Pivotal Ventures. Coming up on Bloomberg Business Week, the NBA 0:48:17.239 --> 0:48:20.880 jobs market, and more. That's coming up next. This is Bloomberg. 0:48:26.560 --> 0:48:30.319 This is the Bloomberg Business Week Podcast. Listen live each 0:48:30.360 --> 0:48:33.319 weekday starting at two pm Eastern on Apple car Play 0:48:33.440 --> 0:48:36.080 and the Android Auto with the Bloomberg Business app. You 0:48:36.120 --> 0:48:39.320 can also listen live on Amazon Alexa from our flagship 0:48:39.360 --> 0:48:43.440 New York station, Just Say Alexa played Bloomberg eleven thirty. 0:48:44.160 --> 0:48:46.520 The story from our Bloomberg News team getting our attention. 0:48:46.960 --> 0:48:50.400 At business schools across the US, graduation fast approaching the mood. 0:48:50.440 --> 0:48:54.600 Though subdued NBA programs that once offered a glide path 0:48:54.600 --> 0:48:57.320 to lucrative jobs are finding fewer and fewer seats on 0:48:57.360 --> 0:48:59.960 Wall Street and in corporate America for their graduates. At 0:49:00.120 --> 0:49:02.200 every one of the nation's top schools known as the 0:49:02.719 --> 0:49:04.360 mag seven. I didn't know this, they were known as 0:49:04.360 --> 0:49:04.840 the Maxie. 0:49:04.840 --> 0:49:05.359 I didn't either. 0:49:05.680 --> 0:49:07.960 Job blason and outcomes have declined since twenty twenty one, 0:49:08.000 --> 0:49:10.520 and this year is looking no better. No joke, Carol. 0:49:10.640 --> 0:49:12.800 You can attest to this. As I was writing this intro, 0:49:13.040 --> 0:49:17.040 I got an email from Dean mclaris at Columbia. 0:49:16.640 --> 0:49:19.000 Business School, right grad grad. 0:49:19.440 --> 0:49:23.240 The subject says hire CBS and it's like an email 0:49:23.320 --> 0:49:24.240 talking about recruiting. 0:49:24.320 --> 0:49:27.080 All right, So that is the view from schools inside 0:49:27.120 --> 0:49:29.480 the United States. Let's go outside the US to France. 0:49:29.520 --> 0:49:32.720 We've got Emmanuel mctay, dean of the French Business School 0:49:32.760 --> 0:49:36.319 Etic Business School with us, as well as Dimitri Cassanides, 0:49:36.320 --> 0:49:40.160 Bloomberg New Senior editor. She spearheads our global business coverage 0:49:40.280 --> 0:49:43.160 business school coverage, I should say for Bloomberg Business WEEKND. 0:49:43.160 --> 0:49:47.200 They're both here in our Bloomberg Interactor Broker studio. Welcome, Welcome, 0:49:47.280 --> 0:49:51.480 Nice to have you here. Hello, Dean Mattay. Before we 0:49:51.520 --> 0:49:53.799 get going, we want to ask you about what you 0:49:53.880 --> 0:49:57.719 are hearing and seeing from other business school deans during 0:49:57.719 --> 0:50:00.160 your visit here to the United States and other as 0:50:00.160 --> 0:50:02.320 the schools. How much is the job market a topic 0:50:02.400 --> 0:50:03.400 right now? 0:50:04.520 --> 0:50:09.080 What is striking here is, as always, I mean, the 0:50:09.120 --> 0:50:15.640 power of the higher education institutions, their entrepreneurial spirit, the 0:50:15.680 --> 0:50:19.200 amount of resources that they have to reach their ambitions. 0:50:19.840 --> 0:50:24.440 But also I could feel some kind of anxiety about 0:50:24.520 --> 0:50:31.880 you know, research funding, about the capacity of welcoming foreign students, 0:50:31.920 --> 0:50:36.960 foreign researchers, foreign professors. So I could feel that it 0:50:37.040 --> 0:50:40.480 was kind of mixed feelings as always, and I mean, 0:50:40.520 --> 0:50:43.720 the best educational system in the world, especially for business, 0:50:44.040 --> 0:50:50.040 but at the same time, some question about tomorrow, uncertainty 0:50:50.040 --> 0:50:50.680 about tomorrow. 0:50:51.480 --> 0:50:52.880 I know, you know, I don't want to use the 0:50:52.920 --> 0:50:55.680 term frenemies, but you are also competitive with these schools. 0:50:56.480 --> 0:50:59.680 Is this only good news for you if there's an 0:50:59.719 --> 0:51:03.120 in the United States that's not as conducive to attracting 0:51:03.160 --> 0:51:07.040 foreign students foreign professors, Is it just great news for UNFL. 0:51:06.680 --> 0:51:08.719 But I mean bad news for the US is bad 0:51:08.760 --> 0:51:13.160 news for US. And of course, if I was really egoistic, 0:51:13.280 --> 0:51:15.400 I would say, yes, it's good news for US. We 0:51:15.440 --> 0:51:19.920 will have more foreign students coming to US and probably 0:51:19.960 --> 0:51:25.040 will have opportunity to recruit talented professors and researchers from 0:51:25.120 --> 0:51:27.719 the US market. But no, I think it's not good 0:51:27.760 --> 0:51:30.440 news because we tend to see US in a very 0:51:30.600 --> 0:51:33.920 global market, in a very global higher education system, and 0:51:34.440 --> 0:51:39.680 we see more and more countries I mean turning in 0:51:39.800 --> 0:51:43.760 onto themselves, not only the US, I mean the UK, Canada, 0:51:43.760 --> 0:51:47.400 I mean, you name them Scandinavian countries and they want 0:51:47.520 --> 0:51:52.120 less and less immigration and including foreign students, and it's 0:51:52.160 --> 0:51:54.920 not good news at all. I mean, I visited a 0:51:54.960 --> 0:51:57.080 lot of countries all around the world, and what we 0:51:57.120 --> 0:51:59.479 can see is that when there is a country which 0:51:59.760 --> 0:52:04.040 you know, try to decrease immigration, and especially a students immigration, 0:52:04.120 --> 0:52:07.359 it's a disaster for the country and for the schools. 0:52:08.120 --> 0:52:08.480 Wow. 0:52:08.680 --> 0:52:11.160 Yeah, that's not surprising. And I think I'm hearing very 0:52:11.239 --> 0:52:13.200 much the same from other people that we're talking to. 0:52:13.320 --> 0:52:16.200 I mean, I think it's of great concern because of 0:52:16.400 --> 0:52:20.000 just the points that Dematase is making, and I think 0:52:20.200 --> 0:52:22.480 there is a big concern. Sometimes we think, oh, it's 0:52:22.520 --> 0:52:26.000 a problem for students in terms of the immigration challenges 0:52:26.040 --> 0:52:28.280 that we're confronting, but I think it is a huge 0:52:28.280 --> 0:52:31.279 concern on the research and faculty front. When we've seen 0:52:31.320 --> 0:52:34.759 the shifts in education on global business schools over the 0:52:34.800 --> 0:52:37.920 last decade or two decades, one big thing we've noticed 0:52:38.040 --> 0:52:40.640 is a lot of talent coming to this country to 0:52:40.719 --> 0:52:42.920 our business schools. Look at the deans of a lot 0:52:42.960 --> 0:52:45.840 of our business schools and where they've come from. So 0:52:46.120 --> 0:52:48.440 it's a challenge on many fronts. And I think that 0:52:48.560 --> 0:52:52.600 there is definitely. You know, however openly they're sort of 0:52:52.640 --> 0:52:54.960 airing this anxiety. There is a great deal of anxiety 0:52:55.040 --> 0:52:57.560 right now and really just kind of wait and see 0:52:57.600 --> 0:52:58.800 and where is this all going. 0:52:59.040 --> 0:53:01.000 I have to say one of the things, my daughter 0:53:01.080 --> 0:53:03.120 is just finishing up an undergraduate degree, but spent a 0:53:03.200 --> 0:53:05.880 year over in London at the Lendon School of Economics, 0:53:06.160 --> 0:53:10.360 and it was such a great combination of US versus 0:53:10.360 --> 0:53:14.400 being overseas for a full year. The importance of partnerships 0:53:14.440 --> 0:53:17.640 for you in linking up with US business school. Talk 0:53:17.640 --> 0:53:18.520 to us a little bit about that. 0:53:18.560 --> 0:53:19.400 How important that is? 0:53:19.400 --> 0:53:23.560 Definitely. I mean, we want our students, wherever they are from, 0:53:23.719 --> 0:53:26.279 we want them to go to the best schools all 0:53:26.320 --> 0:53:29.040 around the world. So we have here in the US. 0:53:29.800 --> 0:53:32.960 Basically we have three hundred partners academic partners all around 0:53:33.000 --> 0:53:37.200 the world, mostly for exchanges double degrees. But we have 0:53:37.320 --> 0:53:41.920 among these three hundred ten, let's say, strategic partners, including 0:53:41.960 --> 0:53:44.799 one here in the US. So Berkeley has Business School 0:53:44.920 --> 0:53:49.200 in California with whom we have launched a joint degree 0:53:49.560 --> 0:53:53.040 for quite a large cohort of students or a Master 0:53:53.160 --> 0:53:56.680 in Management, and students spend time in Paris, first on 0:53:56.800 --> 0:53:59.919 at a campus and then they go to Seoul core 0:54:00.080 --> 0:54:03.120 are So at a SKK business school, and then they 0:54:03.160 --> 0:54:08.160 spent one year at Berkeley Hearts. And yes, the graduates 0:54:08.160 --> 0:54:11.960 from this programmer I mean great people and fine easily 0:54:12.000 --> 0:54:14.719 good positions on the job market. So this is why 0:54:14.760 --> 0:54:18.719 we are here today on the Eastern Court Coase to 0:54:18.760 --> 0:54:20.360 find another strategy partner. 0:54:21.080 --> 0:54:23.319 And who's that strategic partner going to day? I mean, 0:54:23.320 --> 0:54:24.160 who do you want that to be? 0:54:29.120 --> 0:54:31.400 So we have already partners here of course, as you 0:54:31.400 --> 0:54:33.200 can guess in New York, in Boston we have a 0:54:33.200 --> 0:54:36.480 double degree agreement with the MI T, we have Pittsburgh. 0:54:36.880 --> 0:54:39.520 So we are talking to all of them and will 0:54:39.920 --> 0:54:43.880 I mean find the best partner here just to I 0:54:43.920 --> 0:54:49.600 mean join lounge joint program to probably lounge initiatives in 0:54:49.680 --> 0:54:52.799 terms of entrepreneurship artificial intelligence. So we want to do 0:54:52.840 --> 0:54:54.399 more than just exchange and. 0:54:54.880 --> 0:54:59.279 Yeah, meter to do more students, more NBA students in 0:54:59.280 --> 0:55:02.239 the United seeing that they want a program that is 0:55:02.280 --> 0:55:04.239 not just US based. Do they want to have some 0:55:04.320 --> 0:55:05.320 exposure overseas? 0:55:05.400 --> 0:55:07.799 I mean, anecdotally, we are hearing that I don't have 0:55:07.840 --> 0:55:09.839 a lot of the data on that, But in interviewing 0:55:10.080 --> 0:55:11.680 a lot of the students in the last few months 0:55:11.719 --> 0:55:14.279 about any number of issues that we've been reaching out on, 0:55:14.760 --> 0:55:17.279 that is definitely something that they're seeing. And I think 0:55:17.360 --> 0:55:20.360 that there's probably something about what's going on in the 0:55:20.360 --> 0:55:22.520 world right now and in our country with the government 0:55:22.560 --> 0:55:26.400 and the new administration that's making students and prospective students consider, 0:55:26.480 --> 0:55:27.960 you know, it might be that I'm not going to 0:55:27.960 --> 0:55:29.840 be working in the US, maybe I will want to 0:55:29.840 --> 0:55:32.600 go work abroad. What you know, where are the kinds 0:55:32.600 --> 0:55:34.880 of programs that are going to really position me the best? 0:55:34.920 --> 0:55:38.160 And I think that some of what Dean Matase is 0:55:38.160 --> 0:55:41.040 describing with their partnerships also is something that's seen as 0:55:41.040 --> 0:55:43.439 an if you're a student that's coming out having done 0:55:43.440 --> 0:55:46.279 one of those programs, there is a competitive advantage to that. 0:55:46.520 --> 0:55:48.600 I also think about oh, please jump in. 0:55:48.880 --> 0:55:52.239 Oh, I mean we now welcome every year something like 0:55:52.280 --> 0:55:54.600 one hundred American students at EDEK. 0:55:55.480 --> 0:55:57.719 This is how big is your student base? 0:55:58.000 --> 0:56:02.120 All ten thousands, okay, from all over the world, so 0:56:02.480 --> 0:56:05.359 one hundred and twenty countries. What they are looking for 0:56:05.480 --> 0:56:08.160 is probably a good retail on investment because of course 0:56:08.160 --> 0:56:10.439 suits and fees in France are not the same as 0:56:10.880 --> 0:56:14.400 the one in the US. Also probably lifestyle. And also 0:56:14.440 --> 0:56:17.880 something which is very important these days is that, I 0:56:17.920 --> 0:56:20.160 mean the purpose of the school is to put business 0:56:20.239 --> 0:56:23.080 at the service of common good and this is something 0:56:23.120 --> 0:56:25.840 maybe that these days in the US is going to 0:56:25.880 --> 0:56:28.640 be i mean put into questions. So we have a 0:56:28.640 --> 0:56:32.360 lot of research on climate finance, on ESG, on sustainability, 0:56:32.600 --> 0:56:35.400 and this is something that they're going to learn still 0:56:35.480 --> 0:56:39.040 learn in Europe and in France especially, which I suspect 0:56:39.080 --> 0:56:41.080 will be less a bit less the case in the 0:56:41.160 --> 0:56:41.759 US this day. 0:56:41.840 --> 0:56:43.759 Right That is definitely one piece of it. Is there 0:56:43.880 --> 0:56:46.680 some pulling away from some commitments that we see with 0:56:46.719 --> 0:56:49.440 our government right now, and that throwing into question where 0:56:49.440 --> 0:56:51.840 we saw business school students wanting to go over the 0:56:51.880 --> 0:56:54.600 last decade, wanting to do more good with what they're doing, 0:56:54.600 --> 0:56:56.879 and now suddenly you find yourself in an environment where 0:56:56.920 --> 0:56:59.560 it's like is that going to be prioritized? Are the 0:56:59.600 --> 0:57:01.759 companies going to be prioritizing that? Like what are the 0:57:01.760 --> 0:57:05.640 opportunities for that? So I think that the other thing 0:57:05.680 --> 0:57:08.120 I wanted to quickly touch on, Dematist was you had 0:57:08.360 --> 0:57:10.719 mentioned a number of the rise and the number of 0:57:10.760 --> 0:57:14.080 American students studying now leaving the US to study business. 0:57:14.120 --> 0:57:16.720 Is there a number you can attach to that. I mean, 0:57:16.760 --> 0:57:19.320 what have you seen over the last couple of years 0:57:19.400 --> 0:57:21.880 in terms of not just specific to a deck, but 0:57:22.200 --> 0:57:23.920 you know, broadly speaking, you. 0:57:23.880 --> 0:57:27.040 Mean in terms of American students moving to Europe. Yeah, yeah, 0:57:27.080 --> 0:57:30.280 so's it's been increasing in France. I mean we are 0:57:30.320 --> 0:57:34.520 now welcoming I think four thousand and five hundred American students, 0:57:35.120 --> 0:57:39.320 I mean amongst four hundred and fifty thousand students. So 0:57:39.360 --> 0:57:43.000 it's not so many of them. I remember that twenty 0:57:43.040 --> 0:57:46.440 to thirty years ago we barely could see American students 0:57:46.680 --> 0:57:49.760 in our schools. I mean it's the American students wanted 0:57:49.800 --> 0:57:52.320 to stay here. And year after year we can see 0:57:52.320 --> 0:57:56.120 that the number are increasing, and in all of the programs, 0:57:56.200 --> 0:57:59.360 so including in the bachelor program. So we have a 0:57:59.400 --> 0:58:01.960 young student moving from the US to Europe and to 0:58:02.080 --> 0:58:06.200 France to study I mean business. It's the case for 0:58:06.280 --> 0:58:10.560 the masterin Management and also at the NBA level. So yeah, 0:58:10.640 --> 0:58:12.520 I think over the past two years we have increased 0:58:12.520 --> 0:58:15.160 the number of American students by twenty five persons. 0:58:15.160 --> 0:58:15.440 Wow. 0:58:16.120 --> 0:58:18.640 The inserted regions of the US. Different business schools are 0:58:18.680 --> 0:58:21.560 known for different specialties. If we go to Silicon Valley, 0:58:21.560 --> 0:58:24.320 we'll talk to a lot of Stanford graduates. For example, 0:58:24.360 --> 0:58:26.360 here in New York, you know, the Wall Street sort 0:58:26.400 --> 0:58:30.400 of feeds from NYU and from Colombia. Is there an 0:58:30.400 --> 0:58:32.240 industry that your business school feeds into? 0:58:32.960 --> 0:58:36.200 Finance and asset management? I mean, this is we were 0:58:36.240 --> 0:58:40.160 talking about that just before. I mean and in a 0:58:40.240 --> 0:58:42.440 very special way. Because we have a kind of recipe, 0:58:42.480 --> 0:58:46.000 good recipe to monetize the results of our research. So 0:58:46.560 --> 0:58:50.000 we launch a research center in asset management twenty years ago, 0:58:50.360 --> 0:58:53.960 and the story ended up with EDEK selling a spin 0:58:54.000 --> 0:58:57.680 off in finance for two hundred million euros at the 0:58:57.720 --> 0:59:00.400 stock Extende of Singapore. So we have to compete with 0:59:00.520 --> 0:59:03.840 American business just what you teach, Yeah exactly, Yeah, we 0:59:04.120 --> 0:59:06.360 have to compete with you guys and you I mean, 0:59:06.360 --> 0:59:09.480 schools here are a lot of resources, huge endowments. We 0:59:09.560 --> 0:59:12.440 don't reach the same amount, So we have to find 0:59:12.560 --> 0:59:14.600 other ways to find resources. 0:59:14.760 --> 0:59:19.760 That's fascinating, and so that helped to finance the school education. 0:59:20.040 --> 0:59:23.560 It goes to the foundation, to the ed Foundation, and 0:59:23.680 --> 0:59:27.200 thanks to this money, we we launch Aventure fund for 0:59:27.400 --> 0:59:31.800 impact startups. We are financed a research center on climate finance. 0:59:32.000 --> 0:59:35.040 That was Emmanuel Mattey, dean of the French business school 0:59:35.320 --> 0:59:39.640 Edek Business School, along with Dimitri Cassanin's Bloomberg News senior editor, 0:59:40.160 --> 0:59:43.120 Still Ahead on Bloomberg Business Week a blueprint for undoing 0:59:43.200 --> 0:59:45.000 segregated housing in the US. 0:59:45.320 --> 0:59:49.000 It debunked this myth of de facto segregation and showed 0:59:49.320 --> 0:59:52.120 that the segregation of our communities which still persists today, 0:59:52.720 --> 0:59:56.640 was created by intentional government policy, and those policies were 0:59:56.640 --> 0:59:58.960 in violation of the Constitution, and so we have an 0:59:58.960 --> 1:00:02.760 obligation to remedy the ongoing impacts of those policies. 1:00:03.000 --> 1:00:03.840 This is Bloomberg. 1:00:05.680 --> 1:00:09.439 This is the Bloomberg Business Week Podcast. Listen live each 1:00:09.480 --> 1:00:12.480 weekday starting a two pm Eastern up on Apple CarPlay 1:00:12.560 --> 1:00:15.200 and the Android Auto with the Bloomberg Business app. You 1:00:15.240 --> 1:00:18.440 can also listen live on Amazon Alexa from our flagship 1:00:18.480 --> 1:00:22.280 New York station, Just say Alexa Play Bloomberg eleven thirty. 1:00:23.360 --> 1:00:26.040 Well, we got some news in the world of real 1:00:26.160 --> 1:00:29.440 estate affordable housing. To be specific, millions of dollars in 1:00:29.520 --> 1:00:33.080 federal contracts for affordable housing were canceled after a Department 1:00:33.120 --> 1:00:37.120 of Government Efficiency Review of Nonprofits website and LinkedIn profiles 1:00:37.120 --> 1:00:40.080 for terms associated with DEI. That's according to current and 1:00:40.080 --> 1:00:43.160 former staff at the US Department of Housing and Urban Development. 1:00:43.560 --> 1:00:46.560 That canceled awards Carroll include ongoing projects in more than 1:00:46.600 --> 1:00:51.520 one thousand communities to address homelessness, disaster recovery, persistent poverty, 1:00:51.520 --> 1:00:53.440 and other housing issues. This according to a list seen 1:00:53.480 --> 1:00:54.640 by Bloomberg City Lab. 1:00:54.800 --> 1:00:56.960 And this came from our own reporter Kristen Camps, who 1:00:56.960 --> 1:01:00.960 covers housing and design housing policies, something that Leah Rothstein 1:01:01.200 --> 1:01:04.160 knows very well. She's a housing expert and author author 1:01:04.320 --> 1:01:08.000 of Just Action, How to Challenge Segregation Enacted under the 1:01:08.040 --> 1:01:11.480 Color of Law, which she co wrote with her father, Richard. 1:01:11.720 --> 1:01:15.400 She joins us now from Oakland, California. So great to 1:01:15.440 --> 1:01:19.960 have you here with us, and really timely topical, Leah. 1:01:20.000 --> 1:01:21.760 This book is a fall up to your dad's book, 1:01:21.840 --> 1:01:25.120 The Color of Law, which explored how housing became so segregated. 1:01:25.840 --> 1:01:29.440 For those who maybe don't really understand kind of some 1:01:29.520 --> 1:01:33.200 of the history here or have forgotten, perhaps remind us 1:01:33.520 --> 1:01:35.919 kind of how housing became so segregated. 1:01:36.240 --> 1:01:38.280 Sure, well, you know the subtitle of the Color of 1:01:38.360 --> 1:01:41.680 Law is a forgotten history of how government segregated America. 1:01:41.760 --> 1:01:45.200 So it's not uncommon to have forgotten this particular fact 1:01:45.240 --> 1:01:47.840 of our history. You know, we have an idea in 1:01:47.880 --> 1:01:51.280 this country that we've adopted that the racial segregation of 1:01:51.280 --> 1:01:54.120 our communities is a form of de facto segregation, a 1:01:54.200 --> 1:01:58.280 kind of segregation that was created by private actors or 1:01:58.280 --> 1:02:03.320 personal preferences, or economic conditions, or by accident. And what 1:02:03.400 --> 1:02:06.520 the Color of Law shows, with detail after detail of 1:02:06.840 --> 1:02:11.480 government policy from decades of this country's history, government policy 1:02:11.520 --> 1:02:16.240 from local, state, and federal levels that intentionally, explicitly and 1:02:16.320 --> 1:02:22.080 purposely created racially segregated communities. So it debunked this myth 1:02:22.200 --> 1:02:25.600 of de facto segregation and showed that the segregation of 1:02:25.640 --> 1:02:29.560 our communities, which still persists today, was created by intentional 1:02:29.560 --> 1:02:33.440 government policy, and those policies were in violation of the Constitution. 1:02:33.680 --> 1:02:36.680 And so we have an obligation to remedy the ongoing 1:02:36.720 --> 1:02:38.120 impacts of those policies. 1:02:38.240 --> 1:02:41.400 And that's exactly where your book picks up just action 1:02:41.480 --> 1:02:44.960 how to challenge segregation and acted under the color of Law. 1:02:45.280 --> 1:02:48.520 So what is the solution here, Well. 1:02:48.360 --> 1:02:51.280 There's no one solution, just like there wasn't one policy 1:02:51.320 --> 1:02:55.320 that created segregation. It was many, many actions and policies 1:02:55.360 --> 1:02:56.080 of governments. 1:02:56.240 --> 1:02:59.560 Well, can we go there, just remind us of the policies, 1:03:00.120 --> 1:03:02.080 As you said, it wasn't just one policy, Like what 1:03:02.160 --> 1:03:03.920 were some of those specific policies. 1:03:04.720 --> 1:03:08.800 Sure, there was redlining policies which determined where banks could 1:03:09.480 --> 1:03:12.880 or would give loans for mortgages and small business lending, 1:03:12.920 --> 1:03:16.280 and it determined that neighborhoods where African Americans lived were 1:03:16.320 --> 1:03:21.320 not good places to provide loans to homeowners or business owners, 1:03:21.720 --> 1:03:25.000 and so African Americans in those neighborhoods had no access 1:03:25.040 --> 1:03:28.280 to mortgages and couldn't buy homes and build wealth. That's 1:03:28.320 --> 1:03:31.720 one example. Another, the most powerful example is how the government, 1:03:31.960 --> 1:03:35.600 the federal government subsidized the suburbanization of our country in 1:03:35.640 --> 1:03:38.400 the mid twentieth century after World War II, when we 1:03:38.440 --> 1:03:40.439 didn't have a lot of suburbs in this country. Most 1:03:40.440 --> 1:03:43.560 people lived in urban centers, and the federal government, through 1:03:43.600 --> 1:03:47.480 the Federal Housing Administration, helped to subsidize developers to build 1:03:47.640 --> 1:03:50.880 the suburbs that we are used to today, and did so 1:03:51.080 --> 1:03:53.800 on the condition that those developers only sell their homes 1:03:53.840 --> 1:03:57.560 to whites and This was explicit government policy written into 1:03:57.640 --> 1:04:00.720 the FHA manual, written into the d of the homes 1:04:00.720 --> 1:04:03.560 that these developers built, saying that the home could only 1:04:03.560 --> 1:04:06.400 ever be owned or occupied by whites. Now, those homes, 1:04:06.720 --> 1:04:09.160 when they were first built and sold, they were affordable 1:04:09.240 --> 1:04:12.480 for working families of any race. The white families that 1:04:12.520 --> 1:04:14.600 got into those homes got into home ownership when it 1:04:14.600 --> 1:04:18.320 was affordable. And those homes and suburban areas around the 1:04:18.360 --> 1:04:21.560 country are no longer affordable to working families. So the 1:04:21.600 --> 1:04:24.160 white families that got into them when they cost one 1:04:24.240 --> 1:04:27.480 hundred thousand dollars in today is money built up wealth 1:04:27.520 --> 1:04:30.280 as those homes accumulated in value. Now there were several 1:04:30.880 --> 1:04:33.600 hundred thousand dollars, in some places over a million dollars, 1:04:34.240 --> 1:04:37.560 and so those white families accumulated wealth through the increased 1:04:37.640 --> 1:04:40.440 value of their homes, while African American families, who were 1:04:40.440 --> 1:04:44.320 explicitly prohibited from getting into home ownership when it was affordable, 1:04:45.040 --> 1:04:47.080 weren't allowed to build wealth in the same way. So 1:04:47.120 --> 1:04:49.640 we have a wealth gap today that exists because of 1:04:49.640 --> 1:04:51.200 those past government policies. 1:04:51.320 --> 1:04:53.960 Is it fair to say that the explicit things that 1:04:54.000 --> 1:04:57.120 you and that your dad talked about in his first book, 1:04:57.640 --> 1:05:00.200 those are no longer enacted current. 1:05:01.480 --> 1:05:04.680 Many of them are no longer enacted as explicitly as 1:05:04.720 --> 1:05:08.040 they were. There's many policies and programs that have a 1:05:08.160 --> 1:05:12.800 racially discriminatory impact, if not an explicit intent, that are 1:05:12.880 --> 1:05:16.600 still you know, in place today. But you know the 1:05:16.640 --> 1:05:20.600 example I gave about the subsidized suburban homes. So you know, 1:05:20.680 --> 1:05:23.560 since then we've passed the Fair Housing Act, which says 1:05:23.600 --> 1:05:26.240 we can no longer discriminate in the sale and rental 1:05:26.280 --> 1:05:28.800 of housing. Those restrictive covenants on the deeds of the 1:05:28.880 --> 1:05:33.040 homes are no longer legally enforceable. But even those though 1:05:33.080 --> 1:05:38.240 those laws have changed, the situation doesn't just resolve itself. 1:05:38.360 --> 1:05:43.080 When the homes and suburbs that were created through government subsidies, 1:05:43.600 --> 1:05:46.400 you know, are no longer affordable to families who don't 1:05:46.440 --> 1:05:49.920 have intergenerational wealth. So they're not affordable to African American 1:05:49.920 --> 1:05:52.919 families who were denied the opportunity to build the same 1:05:52.960 --> 1:05:56.000 wealth that whites could. So this is how, even when 1:05:56.000 --> 1:06:02.320 those racially explicit policies get changed or revoked, the consequences 1:06:02.440 --> 1:06:06.160 are ongoing unless we take intentional action to change them. 1:06:06.280 --> 1:06:09.200 Okay, So that brings us up to speed to essentially today. 1:06:09.240 --> 1:06:12.720 And you know you said mainly the explicit policies are 1:06:12.760 --> 1:06:16.720 no longer there, But there are these implicit policies I 1:06:16.800 --> 1:06:21.960 think that many would argue still do prevent homes from 1:06:22.000 --> 1:06:26.840 being built in certain areas and do perhaps prevent more 1:06:26.840 --> 1:06:29.320 people from living in certain areas. And a lot of 1:06:29.320 --> 1:06:31.520 those happen on the local levels, such as zoning. How 1:06:31.520 --> 1:06:32.120 do you look at that? 1:06:32.360 --> 1:06:36.600 Yep, yeah, Well, in just Action, we focus explicitly on 1:06:36.680 --> 1:06:39.800 local policies and programs because that's where we can have 1:06:39.880 --> 1:06:45.520 an impact as residents, as organized activists, as voters. And 1:06:45.640 --> 1:06:48.680 that's also what can have the biggest impact on challenging segregation. 1:06:48.760 --> 1:06:50.920 Even though the federal government had a large role to 1:06:50.920 --> 1:06:54.920 play in creating segregation, once it's established, laws like zoning, 1:06:55.640 --> 1:07:02.400 like you know, housing development subsidies, Section eight, program administration, 1:07:02.480 --> 1:07:04.320 all of these happen on the local level. So there's 1:07:04.320 --> 1:07:06.880 a lot that can be done locally to challenge the 1:07:06.920 --> 1:07:09.160 segregation that was set up by the federal government. So 1:07:09.240 --> 1:07:12.920 zoning is a perfect example. Passed by local city councils, 1:07:13.000 --> 1:07:18.480 planning commissions, and zoning has enforced segregation by ensuring that 1:07:18.640 --> 1:07:22.560 in more affluent, whier areas. Those areas tend to be 1:07:22.680 --> 1:07:25.840 zoned only to allow single family homes, so that ensures 1:07:26.160 --> 1:07:29.960 that homes in those areas remain unaffordable to only the 1:07:30.000 --> 1:07:33.560 most affluent people because as demand increases, you can't build 1:07:33.560 --> 1:07:36.360 more homes to meet that demand. You're limited by how 1:07:36.360 --> 1:07:38.280 many lots there are in that community because you can 1:07:38.320 --> 1:07:41.600 only build one home per lot. So some communities are 1:07:41.800 --> 1:07:44.959 challenging single family only zoning to allow more than one 1:07:45.000 --> 1:07:47.880 home per lot, which can open up access to that 1:07:47.920 --> 1:07:51.080 community to a broader range of households because there's a 1:07:51.080 --> 1:07:54.520 broader range of housing sizes and affordability options created. 1:07:54.920 --> 1:07:58.120 How does the division politically within this nation, you know, 1:07:58.520 --> 1:08:05.000 either to prevent seeing more equality when it comes to 1:08:05.720 --> 1:08:08.680 housing and more diversity when it comes to housing. 1:08:10.480 --> 1:08:14.280 Yeah, great question. It's cyclical, right. So when we live 1:08:14.320 --> 1:08:17.479 around people who only look like us and have similar 1:08:17.479 --> 1:08:21.600 life experiences than us, we tend to not support policies 1:08:21.600 --> 1:08:24.720 that we see as helping other people. And when we 1:08:24.760 --> 1:08:27.360 live in neighborhoods that are more integrated and we have 1:08:27.520 --> 1:08:31.519 more access and more exposure to people who are different 1:08:31.560 --> 1:08:35.439 from us, there's less polarization. We understand each other's life 1:08:35.520 --> 1:08:39.320 experiences and hopes and dreams. We understand we're not that different, 1:08:39.760 --> 1:08:43.080 and people tend to support policies that help a broader 1:08:43.160 --> 1:08:46.240 range of people when they have personal relationships with people 1:08:46.240 --> 1:08:50.360 who they think of as other. So the segregation of 1:08:50.360 --> 1:08:53.439 our communities keeps us polarized because we don't have we 1:08:53.479 --> 1:08:56.599 don't have natural social contact with people who are different 1:08:56.600 --> 1:08:59.759 from us, and then we tend to continue to support 1:09:00.360 --> 1:09:01.480 that maintain that segregation. 1:09:03.360 --> 1:09:06.639 You mentioned that you focus on the local level because 1:09:06.640 --> 1:09:09.000 that's where people can have an impact, from voting to 1:09:09.120 --> 1:09:12.600 zoning and more. Can you share with us some examples 1:09:12.760 --> 1:09:15.960 of communities in certain areas of the country that you 1:09:16.040 --> 1:09:18.320 think are doing this well and why they're doing it well, 1:09:18.320 --> 1:09:19.280 how they're doing it well. 1:09:21.360 --> 1:09:23.920 Sure, so, you know, in our book we give dozens 1:09:23.920 --> 1:09:27.599 of examples of strategies and programs that local communities can adopt, 1:09:27.640 --> 1:09:29.320 and for each one we give an example of a 1:09:29.360 --> 1:09:32.240 community somewhere in the country that successfully adopted that. So 1:09:32.280 --> 1:09:34.960 there isn't I would say, one that's doing everything, because 1:09:35.000 --> 1:09:37.759 there's so many pieces to this puzzle, but there's many 1:09:37.800 --> 1:09:42.320 communities that are doing something. Zoning changes have been you know, 1:09:42.880 --> 1:09:45.679 catching on around the country to meet the affordable housing 1:09:45.720 --> 1:09:48.360 crisis that the whole country is now feeling. And there's 1:09:48.400 --> 1:09:52.240 some success stories around the organizing for zoning changes. There's 1:09:53.600 --> 1:09:57.160 an example I love is a community land trust model, 1:09:57.200 --> 1:10:01.839 which is a locally formed nonprofit organization that creates permanently 1:10:01.880 --> 1:10:07.000 affordable home ownership opportunities in areas with housing costs that 1:10:07.040 --> 1:10:10.280 are rapidly rising. So we wrote about a group in Durham, 1:10:10.320 --> 1:10:14.200 North Carolina that was a predominantly African American community that 1:10:14.320 --> 1:10:18.320 was gentrifying and you know, it was near Durham, Sorry, 1:10:18.320 --> 1:10:20.960 it was near Duke University, which was increasing enrollment and 1:10:21.040 --> 1:10:23.880 investors were buying at properties and the longtime residents were 1:10:23.880 --> 1:10:27.280 being displaced. And in that time, the residents there started 1:10:27.280 --> 1:10:29.360 going door to door talking to each other about what 1:10:29.400 --> 1:10:32.400 they wanted to do to improve conditions in their neighborhood. 1:10:32.920 --> 1:10:36.719 You know, simple beginning community organizing, right. They were talking 1:10:36.720 --> 1:10:38.800 to their neighbors. They decided they wanted a park in 1:10:38.840 --> 1:10:41.559 their neighborhood because they didn't have a park. Kids were 1:10:41.560 --> 1:10:44.280 playing in the street, and so they advocated that the 1:10:44.320 --> 1:10:46.679 city turn a vacant lot into a park, and they won. 1:10:47.080 --> 1:10:49.439 They started to see, oh, we can really make change here. 1:10:49.760 --> 1:10:52.400 They learned about the community land trust model and started. 1:10:52.439 --> 1:10:56.200 They crowdfunded to buy two vacant lots and built homes 1:10:56.200 --> 1:11:00.240 on them and sold them at affordable prices to and 1:11:00.240 --> 1:11:04.000 moderate income families. In the land trust model, in the 1:11:04.000 --> 1:11:06.719 home sale, the land trust retains ownership of the land 1:11:06.840 --> 1:11:10.040 underneath the home, so only the home is sold, so 1:11:10.080 --> 1:11:12.040 it's more affordable than if you were buying the home 1:11:12.080 --> 1:11:16.560 and the land. And when the homeowner wants to resale 1:11:16.920 --> 1:11:19.479 resell the home, they have to adhere to a maximum 1:11:19.560 --> 1:11:22.800 resale price, and that ensures that the home is affordable 1:11:22.800 --> 1:11:25.640 every time it's resold. So this group that started by 1:11:25.640 --> 1:11:27.519 going door to door to get a park in their 1:11:27.560 --> 1:11:30.960 neighborhood now has a land trust with over three hundred 1:11:30.960 --> 1:11:34.760 properties all around the city. They've prevented a lot of 1:11:34.760 --> 1:11:38.800 displacement in this neighborhood by creating affordable homes in an 1:11:38.840 --> 1:11:41.840 area that home prices were increasing really fast that people 1:11:41.840 --> 1:11:45.080 couldn't keep up with one great example, but there's over 1:11:45.120 --> 1:11:47.400 three hundred communities around the country with a land trust 1:11:47.439 --> 1:11:50.280 and they're growing rapidly. It's a great model, a great 1:11:51.080 --> 1:11:53.200 tool in the toolbox for addressing these issues. 1:11:53.479 --> 1:11:56.919 That's Leah Rothstein, author of Just Action, How to Challenge 1:11:56.960 --> 1:12:00.479 Segregation Enacted under the Color of Law, wraps up the 1:12:00.479 --> 1:12:03.280 weekend edition of Bloomberg BusinessWeek from Bloomberg Radio. Thank you 1:12:03.320 --> 1:12:05.559 so much for joining us. Be sure to tune into 1:12:05.560 --> 1:12:08.320 Bloomberg Business Week Monday through Friday starting at two pm 1:12:08.360 --> 1:12:11.479 Wall Street Time on Bloomberg TV, Bloomberg Radio, and on 1:12:11.560 --> 1:12:14.679 Series XM Channel one twenty one. You can also listen 1:12:14.720 --> 1:12:18.000 to us on Applecarplay and Android Auto. It's free in 1:12:18.040 --> 1:12:20.920 the Apple App Store or on Google Play. You can 1:12:21.040 --> 1:12:23.879 also watch our daily broadcast on YouTube. Just search Bloomberg 1:12:23.920 --> 1:12:27.519 Global News, where simulcast on Bloomberg Originals available at Bloomberg 1:12:27.560 --> 1:12:32.080 dot com, Slash Originals, and streaming platforms including Roku, Amazon, fireTV, 1:12:32.280 --> 1:12:35.880 SEMSI TV Plus and more. Find our Bloomberg BusinessWeek podcast 1:12:35.920 --> 1:12:38.880 at Bloomberg dot com, Apple, or wherever you get your podcasts. 1:12:39.240 --> 1:12:41.880 And the latest edition of the Bloomberg BusinessWeek magazine is 1:12:41.920 --> 1:12:45.120 available on newsstands now, at Bloomberg dot com and always 1:12:45.200 --> 1:12:48.439 on the Bloomberg terminal. For Tim Stanebek, I'm Carol Masser. 1:12:48.720 --> 1:12:49.799 Have a good and safe weekend. 1:12:49.840 --> 1:12:55.480 Everyone, This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:12:55.600 --> 1:12:59.320 and anywhere else you get your podcasts. 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