WEBVTT - Bloomberg Businessweek Weekend - January 17th, 2025 0:00:02.759 --> 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. 0:00:26.880 --> 0:00:30.319 Hi, everyone, Welcome to the Bloomberg Business Weekend Podcast. This 0:00:30.440 --> 0:00:33.920 coming week a new chapter in American politics, as Donald 0:00:33.920 --> 0:00:36.440 Trump will be sworn in as the forty seventh President 0:00:36.479 --> 0:00:39.559 of the United States, his second term, and one that 0:00:39.600 --> 0:00:42.199 the technology community will be watching, whether it's about the 0:00:42.280 --> 0:00:45.800 US China tech war and access to advanced technology, to 0:00:45.920 --> 0:00:50.000 rules around autonomous driving cars, or oversight in policies on 0:00:50.240 --> 0:00:51.320 artificial intelligence. 0:00:51.360 --> 0:00:53.680 Tim, it's a lot, There's a lot in the global 0:00:53.720 --> 0:00:56.920 tech world that could be affected. Time will certainly tell 0:00:56.960 --> 0:01:00.800 regarding what policies actually come down from the Trump White 0:01:00.800 --> 0:01:04.320 House in the meantime. Ourt take this week includes whether 0:01:04.360 --> 0:01:07.600 the pullback and autonomous driving by GM is a cautionary 0:01:07.600 --> 0:01:10.240 tale about the bigger investment play in AI. 0:01:10.480 --> 0:01:13.520 And speaking of AI, the company who's chatchipt kicked off 0:01:13.560 --> 0:01:16.440 the AI craze over two years ago. We are of course, 0:01:16.480 --> 0:01:20.360 talking about open Ai co founder and CEO Sam Altman 0:01:20.480 --> 0:01:24.240 on the company's first two years, getting fire elon and more. 0:01:24.600 --> 0:01:29.080 Plus US China relations around American technology and really advanced 0:01:29.120 --> 0:01:32.760 global technology overall have led to a US China tech 0:01:32.800 --> 0:01:35.360 war and race. A company that has found itself at 0:01:35.400 --> 0:01:38.039 the center of it all, Huaweih. We get into the 0:01:38.080 --> 0:01:40.840 secret history of China's most powerful company, and. 0:01:40.800 --> 0:01:42.920 Then later on in our second hour, the founder of 0:01:42.959 --> 0:01:46.559 Libby Wines on going all in on non alcoholic options, 0:01:47.040 --> 0:01:49.320 also what to spend your bonus on. 0:01:49.400 --> 0:01:50.120 You got a bonus? 0:01:52.120 --> 0:01:52.680 No comment? 0:01:53.240 --> 0:01:57.160 And the CEO of the experiential hospitality company Pursuit on 0:01:57.280 --> 0:02:01.080 sky Lagoon and Iceland or riding the gondola in amph Canada. 0:02:01.160 --> 0:02:03.480 We'll also talk with one of the daughters of the 0:02:03.640 --> 0:02:07.600 late Martin Luther King Junior about his legacy, Donald Trump, 0:02:07.960 --> 0:02:09.520 and the state of racial equality. 0:02:09.760 --> 0:02:11.560 All of that to come. We begin with a column 0:02:11.600 --> 0:02:14.440 by Bloomberg Business Week's Max Chafkin on the shift in 0:02:14.480 --> 0:02:17.880 the mood around self driving cars despite billions of dollars 0:02:18.000 --> 0:02:18.839 in investments. 0:02:19.320 --> 0:02:22.200 Carol, I took my first ride in a WEIMO. You 0:02:22.320 --> 0:02:24.720 were so excited back in November in San Francisco. 0:02:25.080 --> 0:02:25.920 I was blown away. 0:02:26.000 --> 0:02:27.920 You were You just couldn't stop talking about I still. 0:02:27.720 --> 0:02:28.120 Talk about it. 0:02:28.120 --> 0:02:30.160 That's like boring for our audience because I keep talking 0:02:30.160 --> 0:02:31.760 about it. Max. Have you been on Have you been 0:02:31.800 --> 0:02:32.079 in one? 0:02:32.160 --> 0:02:32.400 I have? 0:02:32.560 --> 0:02:32.800 Yes. 0:02:33.000 --> 0:02:33.600 What'd you think? 0:02:34.040 --> 0:02:37.760 I think it's very impressive. I think that there are real. 0:02:37.680 --> 0:02:41.040 Questions about just how widely we're going to see these 0:02:41.080 --> 0:02:42.760 things be deployed and. 0:02:42.720 --> 0:02:45.960 Whether it's a profitable business anywhere in the near term. 0:02:46.160 --> 0:02:48.960 So a few weeks after I took that ride in 0:02:49.040 --> 0:02:53.320 the Weimo, Mary Bara at GM basically shuts down the 0:02:53.400 --> 0:02:55.680 cruise division at General Motors. 0:02:55.960 --> 0:02:56.160 Yeah. 0:02:56.200 --> 0:02:59.280 This was the GM's version of Weimo. It was GM's 0:02:59.600 --> 0:03:02.120 robot taxi business. And the thing about this that was 0:03:02.200 --> 0:03:05.480 kind of surprising. This happened in December. Uh. There were 0:03:05.960 --> 0:03:08.680 lots of warning signs. There had been UH there had 0:03:08.720 --> 0:03:11.400 been a very serious accident involving a cruise vehicle in 0:03:11.400 --> 0:03:14.840 San Francisco. The company had been tangling with regulators. There 0:03:14.840 --> 0:03:18.800 were reasons to think something like this is coming. On 0:03:18.840 --> 0:03:23.120 the other hand, we're talking about a major AI effort 0:03:23.280 --> 0:03:27.919 at a major American company getting essentially killed just at 0:03:27.960 --> 0:03:31.960 the time when everybody in the world, You and and 0:03:32.160 --> 0:03:33.800 all the guys in Silicon Valley and everyone else are 0:03:33.800 --> 0:03:36.760 talking about how great these these self driving cars aren't 0:03:37.400 --> 0:03:41.760 and also how you know, AI chatbots are gonna be 0:03:41.800 --> 0:03:44.760 doing customer service and maybe writing news articles and taking 0:03:44.760 --> 0:03:46.400 all of our jobs. And so so you got to 0:03:46.440 --> 0:03:48.480 ask yourself, like, what is going on here? Is there 0:03:48.640 --> 0:03:51.680 is there just a sort of a unique problem at GM, 0:03:51.760 --> 0:03:54.880 which is an explanation that you've seen offered, or maybe 0:03:54.880 --> 0:03:59.320 there are things here that, despite GM's problems, signal challenges 0:03:59.320 --> 0:04:01.200 ahead for all of these companies. And that's kind of 0:04:01.200 --> 0:04:03.280 the argument that I make in this business. 0:04:03.320 --> 0:04:03.960 We call them that. 0:04:04.360 --> 0:04:06.400 Yeah, like you could look at this and say, wow, 0:04:06.440 --> 0:04:08.160 great news for weimo their main. 0:04:08.040 --> 0:04:10.680 Competitor has just given up. 0:04:11.360 --> 0:04:14.320 On the other hand, I would argue that the challenges 0:04:14.360 --> 0:04:17.560 that Cruz faced, which you know there there was, there 0:04:17.600 --> 0:04:19.039 was definitely some mismanagement. 0:04:19.240 --> 0:04:21.800 There was a very bad accident, and I think. 0:04:21.839 --> 0:04:24.560 What you know, pretty much everyone would agree was a 0:04:24.600 --> 0:04:27.520 poor response to that accident actually led to a criminal 0:04:27.600 --> 0:04:31.039 admission of criminal behavior on the part of GM, but 0:04:31.400 --> 0:04:35.600 that they also had massive losses and a pretty small fleet. 0:04:35.640 --> 0:04:39.479 I mean Cruz spent GM spent ten billion dollars over 0:04:40.080 --> 0:04:42.600 about a decade, a little less than a decade, getting 0:04:42.680 --> 0:04:45.920 a few hundred cars in a very small number of places. 0:04:46.080 --> 0:04:49.279 And if you look at Weaimo, as great as those 0:04:49.400 --> 0:04:52.760 rides are, and you know, Weymo's, especially in San Francisco, 0:04:52.760 --> 0:04:54.279 have become something of a tourist attraction. 0:04:54.360 --> 0:04:55.080 People go there. 0:04:55.120 --> 0:04:57.360 Oh yeah, and they wanted to you know, they want 0:04:57.440 --> 0:05:01.480 to like enjoy the they're in Silicon Valley. That aside, 0:05:01.720 --> 0:05:04.359 we're still talking about a very small fleet in a 0:05:04.400 --> 0:05:08.640 limited way. And Google Alphabet the parent company of Google, 0:05:08.680 --> 0:05:12.000 which also owns Waymo. They don't break out the finances 0:05:12.040 --> 0:05:14.599 of Weimo, but if you look at their other Vets division, 0:05:14.640 --> 0:05:17.520 which is of which Weimo is like the main the 0:05:17.520 --> 0:05:22.520 most famous one, probably the most substantial operation, it has 0:05:22.600 --> 0:05:27.120 burned through thirty seven billion dollars over period. So again 0:05:27.160 --> 0:05:30.840 we're talking about rides that almost certainly cost a lot 0:05:30.880 --> 0:05:31.880 more than they bring in. 0:05:32.000 --> 0:05:33.120 Mine was twenty nine dollars. 0:05:33.600 --> 0:05:36.000 Well, and you know what's kind of crazy is you 0:05:36.040 --> 0:05:38.640 are such a safety net totally and so like I thought, 0:05:38.680 --> 0:05:40.400 oh my god, you're going to be freaking out like 0:05:40.440 --> 0:05:42.040 you were in the car for half hour. 0:05:42.200 --> 0:05:44.000 Yeah, it's about half hour ride, which I didn't know 0:05:44.000 --> 0:05:45.520 you could take a half hour drive in San Francisco 0:05:45.560 --> 0:05:46.440 and still be in San Francisco. 0:05:46.480 --> 0:05:48.000 But you were totally comfortable. 0:05:48.080 --> 0:05:50.800 Yeah, totally comfortable. I was excited about it, And in fact, 0:05:50.800 --> 0:05:53.960 I was visiting a friend who lived outside of the 0:05:54.160 --> 0:05:56.600 She lived just north of the city, and she drove 0:05:56.680 --> 0:05:59.520 me back into the city, specifically to a place just 0:05:59.560 --> 0:06:01.279 after the edge where I could actually get into a 0:06:01.279 --> 0:06:04.479 Weimo and she said, we had some friends visiting recently 0:06:04.560 --> 0:06:06.760 and their kids really wanted to ride on the trolley. 0:06:07.120 --> 0:06:08.880 So we went into the city and we decided instead 0:06:08.920 --> 0:06:10.760 of riding on the trolley, we'll all get in a way. 0:06:11.680 --> 0:06:13.720 So that you're absolutely right Max about these things. 0:06:13.560 --> 0:06:15.120 It's it's like a cable car. 0:06:15.200 --> 0:06:17.839 And I mean, you're bringing up a couple of issues 0:06:17.839 --> 0:06:20.440 that I think should give people pause, especially if you're, 0:06:20.600 --> 0:06:23.240 you know, building a financial model like I think it's. 0:06:23.080 --> 0:06:25.600 Important to say that what Weimo has done. 0:06:25.440 --> 0:06:28.000 And honestly, a lot of what Creus did was very 0:06:28.000 --> 0:06:31.440 impressive technically impressive. They have managed, as you said, to 0:06:31.600 --> 0:06:35.960 take humans mostly out of the loop and drive safely 0:06:36.400 --> 0:06:39.679 in a very difficult urban environment. But doing that requires 0:06:39.760 --> 0:06:43.000 all sorts of compromises. It creates all sorts of costs. 0:06:43.400 --> 0:06:45.400 You know, these these vehicles are very expensive. They have 0:06:45.440 --> 0:06:48.960 these huge sensor arrays. You have large staffs of people 0:06:49.440 --> 0:06:52.200 making sure they don't do anything bad and then sitting 0:06:52.240 --> 0:06:55.279 around responding to customer complaints. You know, when a car 0:06:55.279 --> 0:06:57.200 gets stuck in a parking lot or something, there's a 0:06:57.200 --> 0:06:59.120 button you have to press on the WEIMO and a 0:06:59.160 --> 0:07:03.120 customer service PAS to essentially like troubleshoot your You're supposedly 0:07:03.160 --> 0:07:03.840 driverless car. 0:07:04.000 --> 0:07:06.480 So it's like, so there are a bunch of issues 0:07:06.480 --> 0:07:08.320 that are are problematic. 0:07:08.360 --> 0:07:11.640 I think if you're seeing this as some investors are, 0:07:11.760 --> 0:07:14.560 as a real replacement for like uber or lyft. On 0:07:14.600 --> 0:07:17.360 the other hand, as a thing you can do when 0:07:17.400 --> 0:07:20.720 you're done riding a cable car, it seems really really fun. 0:07:20.880 --> 0:07:23.920 So what's going on and why Mary Barr and others 0:07:23.920 --> 0:07:27.280 may be rethinking it? Expectations too high timing issue, the 0:07:27.320 --> 0:07:31.320 infrastructure not there yet, technology not completely there, So like 0:07:31.440 --> 0:07:32.040 what is it? 0:07:32.280 --> 0:07:32.480 Yeah? 0:07:32.520 --> 0:07:35.240 Absolutely so I think it's all. It's basically all the 0:07:35.240 --> 0:07:38.040 things you mentioned now. Now the most important thing is 0:07:38.080 --> 0:07:41.760 that in twenty twenty three, a cruise vehicle got into 0:07:41.760 --> 0:07:46.160 an accident, actually hit a pedestrian, ran a pedestrian over. 0:07:46.760 --> 0:07:50.480 It wasn't the initial impact was actually not really the 0:07:50.560 --> 0:07:53.240 fault of the driverless car. It was the pedestrian was 0:07:53.280 --> 0:07:55.880 hit by a human driver, knocked in the path of 0:07:55.920 --> 0:07:59.000 the cruise, the cruise breaked, and then what happened next 0:07:59.080 --> 0:08:01.320 is what was really trying bubbling. You know, a normal 0:08:01.440 --> 0:08:03.760 person hits somebody on the road, they get. 0:08:03.600 --> 0:08:04.640 Out, they make sure they're okay. 0:08:04.680 --> 0:08:08.680 Hopefully in this case, the crews just drove to the 0:08:08.720 --> 0:08:12.320 side of the road, dragging this woman twenty feet along 0:08:12.320 --> 0:08:14.720 with it. And so you're you're talking about an incident 0:08:14.760 --> 0:08:18.400 that doesn't happen in a normal car and doesn't and 0:08:18.440 --> 0:08:21.520 you know, you're there there. There have been reports on 0:08:21.560 --> 0:08:24.120 this that this led to a huge back and forth 0:08:24.160 --> 0:08:28.560 with cruise and federal regulators and California regulators. Fines were paid, 0:08:28.560 --> 0:08:31.640 as I said, so so, so there's that, and then 0:08:31.640 --> 0:08:34.640 there's the fact that GM had been making these huge 0:08:34.679 --> 0:08:36.800 promises about this thing. I mean, what was so stunning 0:08:36.880 --> 0:08:39.520 is Mary Barra at this like as recently as twenty 0:08:39.520 --> 0:08:41.800 twenty three was saying this is gonna be a fifty 0:08:41.880 --> 0:08:43.839 billion dollar a year business, and like. 0:08:44.120 --> 0:08:46.280 Just over a year later, Yeah, they pulled the plug. 0:08:46.160 --> 0:08:48.040 So so right, so and and so. 0:08:48.200 --> 0:08:50.640 Part of it, of course is the is the sense 0:08:50.679 --> 0:08:53.120 that there maybe there's a breach of faith, right, the 0:08:53.440 --> 0:08:57.200 like relationships with the regulators are really important, but also 0:08:57.600 --> 0:09:01.360 losing huge amounts of money and having already moving probably 0:09:01.360 --> 0:09:03.800 not as quickly as they wanted, and now with this 0:09:04.200 --> 0:09:07.320 latest thing having to move potentially even slower. I just 0:09:07.360 --> 0:09:11.480 think the economics here are not that great, and and so, 0:09:11.800 --> 0:09:14.360 and the accident created a bunch of pressure on the 0:09:14.480 --> 0:09:16.600 on the division that wasn't there maybe would have been 0:09:16.679 --> 0:09:20.360 able to go go along for a lot longer. WEAMO 0:09:20.480 --> 0:09:23.520 was a little different, partly because Google is a much 0:09:23.559 --> 0:09:25.959 you know, is a very profitable company and and way 0:09:26.000 --> 0:09:31.480 MOO benefits from an essentially unlimited cash uh cash cushion 0:09:31.559 --> 0:09:33.520 or or as as it's you know, it's up to 0:09:33.520 --> 0:09:37.480 the CFO of alphabet. But but you know, a relatively 0:09:37.600 --> 0:09:41.680 generous situation. WEAMO also, unlike Cruz, has moved a little 0:09:41.720 --> 0:09:44.760 bit more slowly in terms of like commercial adoption. They 0:09:44.880 --> 0:09:46.560 you know, I think I think people in the industry 0:09:46.840 --> 0:09:50.040 think that Cruz was operating somewhat more aggressively and in 0:09:50.040 --> 0:09:50.480 that sense. 0:09:50.640 --> 0:09:52.520 But but if you talk to experts in the. 0:09:52.480 --> 0:09:55.960 Self driving car world, right, they all expect that there 0:09:56.000 --> 0:09:58.960 will be additional incidents like this because it's just a 0:09:59.040 --> 0:10:01.840 numbers game, right. As you said, humans create a lot 0:10:01.840 --> 0:10:04.760 of car crashes. Even if robots are much much better 0:10:04.800 --> 0:10:07.480 than humans, you're still going to see some very messy 0:10:07.720 --> 0:10:11.160 situations and that's going to create further uncertainty. 0:10:11.600 --> 0:10:14.360 Enter Elon Musk has entered the chat and he's entered 0:10:14.360 --> 0:10:16.000 the White House as well as the New York Times 0:10:16.080 --> 0:10:19.200 reports he's going to have some potentially some office space 0:10:19.520 --> 0:10:22.320 at the White House where he gets things done. He 0:10:22.360 --> 0:10:26.359 has the ear of the President. The Robotaxi that he promises, 0:10:26.880 --> 0:10:29.000 he says, has built a better mouse trap for cheaper 0:10:29.080 --> 0:10:31.000 than weimo. Can he pull it off? 0:10:31.120 --> 0:10:33.640 Well? I mean the question is, Kenny, what do you 0:10:33.640 --> 0:10:34.480 want him to pull off? 0:10:34.520 --> 0:10:36.760 And I think I should say one thing Mary Barratt 0:10:37.400 --> 0:10:40.400 said when she folded the robotax thing that they were 0:10:40.400 --> 0:10:43.559 going to roll the cruise technology into their existing vehicles, 0:10:43.679 --> 0:10:45.839 which is more or less what Elon Musk has done. Right. 0:10:46.000 --> 0:10:48.320 I think if you look at Tesla, they have a 0:10:48.360 --> 0:10:51.880 great aid ass that stands for like an assistant a 0:10:51.960 --> 0:10:54.880 driver assistant system, a system where it can take control 0:10:54.880 --> 0:10:56.600 of the car, but you're there, You've got your hands 0:10:56.840 --> 0:10:58.720 ready to grab the wheel at any times. 0:10:58.760 --> 0:11:00.520 It's very much not a robot taxi. 0:11:00.720 --> 0:11:03.680 And Elon Musks bet is that they can somehow by 0:11:03.760 --> 0:11:09.000 some combination of extreme you know, hardcore Elon Musk style 0:11:09.440 --> 0:11:13.559 technical prowess and you know, putting pressure on or maybe 0:11:13.600 --> 0:11:16.760 just asking the Trump White House to change the regulator environment, 0:11:16.800 --> 0:11:20.120 they'll be able to get to you know, full robotaxis 0:11:20.520 --> 0:11:23.000 really quickly, you know, as quickly as this year. And 0:11:23.040 --> 0:11:26.800 I think when you look at where Waymo and Cruse 0:11:26.840 --> 0:11:29.920 are and how long they've spent and how many miles 0:11:29.960 --> 0:11:32.640 they've done in terms of driving without a steering wheel, 0:11:32.840 --> 0:11:36.119 you got to ask yourself, is Elon Musk being realistic? 0:11:36.160 --> 0:11:39.240 I mean, no amount of no relationship with President Trump, 0:11:39.520 --> 0:11:42.920 can you know, magically make a technology that isn't ready 0:11:42.920 --> 0:11:44.320 for primetime ready for primetime? 0:11:44.559 --> 0:11:47.640 That was Max Chafkin, columnist for Bloomberg business Week and 0:11:47.679 --> 0:11:50.320 the co host of the Elon Inc. Podcast, also the 0:11:50.360 --> 0:11:53.480 author of the contrariant Peter Teel and Silicon Valley's Pursuit 0:11:53.520 --> 0:11:53.960 of power. 0:11:54.120 --> 0:11:56.040 You know, it's kind of interesting, right in terms of 0:11:56.120 --> 0:11:58.480 really the shift that we have seen in terms of 0:11:58.600 --> 0:12:01.880 self driving cars, right. I mean it's staggering the amount 0:12:01.880 --> 0:12:04.360 of money GM. But you think about something like Alphabet right, 0:12:04.400 --> 0:12:07.800 Google that they have spent on self driving cars. It's 0:12:07.840 --> 0:12:10.000 a lot of money. And yet you are feeling a 0:12:10.040 --> 0:12:11.679 dialing down. And maybe it's just I don't know, our 0:12:11.679 --> 0:12:14.040 infrastructure not quite there. Tim, I don't know. You took 0:12:14.080 --> 0:12:15.640 a ride and we're blown away. 0:12:15.840 --> 0:12:17.520 Yeah, I thought it was amazing. But Max brought up 0:12:17.559 --> 0:12:20.360 some good points that this is a really contained environment 0:12:20.600 --> 0:12:23.360 in a small section of a city. 0:12:23.480 --> 0:12:23.680 Right. 0:12:23.720 --> 0:12:26.959 It only works in San Francisco in you know, in 0:12:27.320 --> 0:12:29.600 that area. Yes, there are way mos in other parts 0:12:29.600 --> 0:12:32.840 of the country, but can you imagine a vehicle like 0:12:32.880 --> 0:12:35.760 that here in New York City. Max also bringing up 0:12:35.760 --> 0:12:39.160 the point that Uber is really efficient. It's like cheap 0:12:39.240 --> 0:12:42.679 to get somebody up on your smartphone, ring Lyft as well, 0:12:43.280 --> 0:12:44.959 and it's quick and you know they give you a 0:12:45.040 --> 0:12:47.840 ride somewhere like that system works pretty well right now. 0:12:47.640 --> 0:12:49.719 And I will agree that all these this technology makes 0:12:49.880 --> 0:12:52.720 driving much more safer, all right? Coming up, Sam Altman 0:12:52.800 --> 0:12:56.680 on Chat GPT's first two years, Elon and artificial intelligence 0:12:56.760 --> 0:12:57.559 under Donald. 0:12:57.320 --> 0:13:00.360 Trump, Bloomberg BusinessWeek sat down with the open aa co 0:13:00.480 --> 0:13:03.800 founder for a wide ranging interview. You're listening to Bloomberg 0:13:03.840 --> 0:13:05.800 Business Week. This is Bloomberg. 0:13:11.320 --> 0:13:14.920 You're listening to the Bloomberg Business Week podcast. Catch us 0:13:14.960 --> 0:13:18.439 live weekday afternoons from two to five pm Eastern. Listen 0:13:18.480 --> 0:13:22.000 on Applecarplay and Android Auto with the Bloomberg Business app, 0:13:22.160 --> 0:13:23.960 or watch us live on YouTube. 0:13:25.160 --> 0:13:27.000 It's more than two years since things were kind of 0:13:27.040 --> 0:13:29.400 quiet over at open a high wage back in November 0:13:29.400 --> 0:13:31.680 of twenty twenty two. Is a startup so small and 0:13:31.760 --> 0:13:34.760 sleepy that the owners didn't bother tracking their web traffic, 0:13:35.160 --> 0:13:38.280 so reminds us and writes Josh Tyrangle, who caught up 0:13:38.280 --> 0:13:40.760 with the open AI co founder and CEO Sam Altman 0:13:40.840 --> 0:13:43.720 to talk about his infamous four day firing, how he 0:13:43.880 --> 0:13:47.720 runs the company, thoughts on another co founder, e Elon Musk, 0:13:47.760 --> 0:13:49.840 of course, and the impact of a Trump presidency on 0:13:49.880 --> 0:13:52.760 AI and more. It's all in the conversation. We welcome 0:13:52.760 --> 0:13:56.400 Bloomberg BusinessWeek freelance contributor Josh Tieringele. He is, of course, 0:13:56.440 --> 0:13:58.640 former editor of Bloomberg Business week and he joins us 0:13:58.640 --> 0:14:01.520 from New York City. Hey, Gosh, great to have you 0:14:01.600 --> 0:14:03.360 here with us. I have to say, this has to 0:14:03.400 --> 0:14:06.040 be one of the most sought after individuals to talk to. 0:14:06.240 --> 0:14:08.640 When he does an interview, we all kind of sit 0:14:08.720 --> 0:14:11.000 up and listen. How did this come together and why 0:14:11.000 --> 0:14:12.120 did he want to talk now? 0:14:12.760 --> 0:14:14.600 You know, I've spoken to him a bunch of times 0:14:14.600 --> 0:14:17.240 over the last couple of years, and he reached out 0:14:17.240 --> 0:14:20.000 basically saying, look, it's been two years since GPT launched, 0:14:20.080 --> 0:14:23.040 it's been about a year since the board firing. I 0:14:23.040 --> 0:14:24.920 think he was eager to kind of put a bunch 0:14:24.920 --> 0:14:27.560 of this stuff behind him. It's probably tired of being 0:14:27.640 --> 0:14:29.680 asked questions about it, so he invited me to come 0:14:29.720 --> 0:14:33.080 out and really talk through it all and do it 0:14:33.160 --> 0:14:36.720 at some considerable length. You know, we spent two and 0:14:36.800 --> 0:14:40.000 a half hours together just really rehashing it and did 0:14:40.040 --> 0:14:41.120 a past present future. 0:14:41.200 --> 0:14:44.120 So it was really his initiative. 0:14:43.720 --> 0:14:45.240 You talked about, and I think one of the most 0:14:45.280 --> 0:14:48.720 interesting takeaways for me Josh was the drama that occurred 0:14:48.720 --> 0:14:50.720 when he was briefly outed as CEO. We're going to 0:14:50.760 --> 0:14:53.240 get to that in just a few minutes before we 0:14:53.280 --> 0:14:56.520 get there though, is the origin story of the company. 0:14:56.560 --> 0:14:59.320 Not everyone knows how it was started, who started it, 0:14:59.360 --> 0:15:02.160 who was involve what was top of mind when you 0:15:02.200 --> 0:15:03.200 sat down within to talk. 0:15:03.800 --> 0:15:05.800 You know, I think he was in a reflective mood. 0:15:06.440 --> 0:15:09.760 Anniversaries are pretty arbitrary. Some people observe them and get 0:15:09.800 --> 0:15:12.480 sentimental around them, some people don't. I think that he 0:15:12.600 --> 0:15:14.280 was feeling very much like, you know, this is a 0:15:14.280 --> 0:15:18.480 different company today than it was two years ago. You know, 0:15:18.520 --> 0:15:21.120 when we talked about the sort of founding myth, you know, 0:15:21.240 --> 0:15:23.760 companies that are successful get you know, it sort of hardens, 0:15:23.760 --> 0:15:25.280 and there's this belief that there was this kind of 0:15:25.280 --> 0:15:28.320 founding dinner at Open AI where all the founders came 0:15:28.360 --> 0:15:31.840 together declared their intent and that was the beginning. And 0:15:32.080 --> 0:15:33.840 in fact, what he wanted to correct the record on 0:15:33.960 --> 0:15:38.440 is it really started because he was a deep AI nerd, 0:15:38.920 --> 0:15:40.360 you know, a decade and a half ago when it 0:15:40.440 --> 0:15:44.520 was not particularly cool. As he was monitoring progress, he 0:15:44.560 --> 0:15:48.960 really pursued Elijah Sutzkyer, who was you know, he's co 0:15:49.040 --> 0:15:52.760 founder and who was a researcher who was really pretty 0:15:54.160 --> 0:15:59.080 deep into you know, pursuing artificial intelligence. Sam Relaid pursued him, 0:15:59.120 --> 0:16:00.920 and he just wanted to say that the first thing 0:16:00.960 --> 0:16:02.880 for him was this dinner the two of them had, 0:16:03.400 --> 0:16:05.280 and that dinner produced a lot of the sort of 0:16:05.280 --> 0:16:10.400 philosophical research driven take that's still very much at the 0:16:10.400 --> 0:16:11.200 core of Open AI. 0:16:11.840 --> 0:16:15.000 Josh did they have at that time, and as you know, 0:16:15.000 --> 0:16:16.960 if there were kind of multiple dinners these guys had 0:16:17.440 --> 0:16:19.320 and starting to think about the concept I guess of 0:16:19.320 --> 0:16:20.840 the company or what they wanted to do. But did 0:16:20.880 --> 0:16:22.920 they have any idea a kind of what they were 0:16:22.920 --> 0:16:26.520 dealing with? As you note in the story that Sam 0:16:26.520 --> 0:16:29.800 Altman said, even thinking about doing this was like cancelbal 0:16:30.440 --> 0:16:32.800 cancel the ball, So you know, it was kind of 0:16:32.840 --> 0:16:35.800 not something anybody was considering doing. But did they have 0:16:35.880 --> 0:16:39.280 any concept that two years later like this is might 0:16:39.600 --> 0:16:41.320 kind of been where we would be. 0:16:42.000 --> 0:16:44.480 It's a sort of eight year overnight success, right. I 0:16:44.480 --> 0:16:47.640 think that they felt like they could scale artificial intelligence. 0:16:47.920 --> 0:16:50.320 They didn't quite know, you know, what that journey would 0:16:50.320 --> 0:16:52.200 look like, but they were pretty confident that they were 0:16:52.200 --> 0:16:55.840 going to be able to make AI happen and make AI. 0:16:55.680 --> 0:16:57.520 Happen for ordinary consumers. 0:16:57.880 --> 0:17:00.880 Obviously there's tons of twists and turns, but yeah, they 0:17:01.280 --> 0:17:03.080 did have a pretty strong sense this is what they're 0:17:03.080 --> 0:17:04.640 going to be able to do, and they actually saw 0:17:04.680 --> 0:17:07.520 their the size of the company, which was quite small, 0:17:08.000 --> 0:17:10.000 as a distinct advantage in those days. 0:17:10.359 --> 0:17:12.360 Yeah, one of those twists and turns I promised you'd 0:17:12.359 --> 0:17:15.920 get to it was his revouster from the company explain 0:17:16.400 --> 0:17:19.520 how it went down differently than what's been reported. What's 0:17:19.520 --> 0:17:20.600 the inside story there. 0:17:21.240 --> 0:17:24.800 The key component is just that there's been complete opacity 0:17:24.840 --> 0:17:26.920 around exactly what happened. You know, there was this sort 0:17:26.920 --> 0:17:30.840 of four day hostage taking where nobody quite knew what 0:17:30.960 --> 0:17:32.879 the future of the company was going to be. We 0:17:32.920 --> 0:17:35.199 knew that the basic details, which are that he had 0:17:35.240 --> 0:17:37.040 been fired and the board had fired him for what 0:17:37.119 --> 0:17:39.520 they had termed is not being consistently candid. 0:17:40.200 --> 0:17:43.000 Didn't know what about, didn't know what they were referring to. 0:17:43.760 --> 0:17:46.000 He says, still he's not totally. 0:17:45.600 --> 0:17:47.520 Sure what they're referring to, and I think, you know, 0:17:47.560 --> 0:17:49.360 in the piece, I kind of challenge him a little bit. 0:17:49.920 --> 0:17:51.640 I think ultimately what it comes. 0:17:51.480 --> 0:17:54.040 Down to, and what he talks about is that, you know, 0:17:54.080 --> 0:17:59.000 the company was founded with this very you know, noble 0:17:59.440 --> 0:18:02.560 and pure ideas about AI research. 0:18:03.080 --> 0:18:04.600 What they determined along the way. 0:18:04.480 --> 0:18:05.879 Is that if you're going to be competitive in the 0:18:05.920 --> 0:18:08.280 field of AI, and if your product is going to 0:18:08.320 --> 0:18:10.240 be meaningful, you need to be able to pivot. 0:18:10.440 --> 0:18:12.000 You need to be able to devote. 0:18:12.080 --> 0:18:15.359 Very large sums to compute, which is the you know, 0:18:15.400 --> 0:18:18.920 the process of actually training these AI models, and that 0:18:19.040 --> 0:18:20.639 there was a divorce coming. 0:18:20.400 --> 0:18:21.000 With that board. 0:18:21.840 --> 0:18:25.879 The board was genuine in its convictions that AI needed 0:18:25.880 --> 0:18:28.880 to be monitored a certain way. There was some sort 0:18:28.880 --> 0:18:31.600 of schism coming. It feels like that schism was inevitable. 0:18:32.040 --> 0:18:34.800 Sam in the interview says he probably should have been 0:18:34.800 --> 0:18:37.280 aware that there was greater risk of that schism than 0:18:37.280 --> 0:18:39.400 he actually was. He says he doesn't have great EQ 0:18:39.640 --> 0:18:42.040 on these things. But you know what we really get 0:18:42.160 --> 0:18:44.760 out of the piece is just him telling us, moment 0:18:44.800 --> 0:18:48.600 by moment, what those four days were about. The negotiations 0:18:48.640 --> 0:18:50.879 to come back, the brief window where it looked like 0:18:50.880 --> 0:18:52.720 he was coming back and there would be no issues. 0:18:52.800 --> 0:18:54.560 Then the board named Emma Cheer. 0:18:54.440 --> 0:18:57.439 As a CEO, and ultimately, you know, the kind of 0:18:57.440 --> 0:19:00.560 rebellion from within the company that brought him back and 0:19:00.640 --> 0:19:04.399 I think led to changes that were probably inevitable. In 0:19:04.440 --> 0:19:06.320 the future, we may look back on this and say, 0:19:06.960 --> 0:19:09.440 you know, this was a company that could have done 0:19:09.480 --> 0:19:11.000 all of these things over the course of a couple 0:19:11.000 --> 0:19:12.480 of years, and they ended up doing them over the 0:19:12.480 --> 0:19:14.240 course of a couple of months as a result, So 0:19:14.560 --> 0:19:16.960 it may have turned out to be a blessing. At 0:19:16.960 --> 0:19:20.120 the same time, he you know, clearly it's a strange 0:19:20.119 --> 0:19:23.680 and traumatic experience to be not only fired in public, 0:19:24.119 --> 0:19:26.280 but then to be dangling for four days in public 0:19:26.320 --> 0:19:29.560 while there are reporters outside your door, reporters outside the 0:19:29.560 --> 0:19:32.439 door of your former company. So I think he was 0:19:32.840 --> 0:19:35.600 trying to put that in perspective, and I believe we 0:19:35.680 --> 0:19:37.600 got more information on it than has ever been out 0:19:37.600 --> 0:19:38.159 there before. 0:19:39.040 --> 0:19:41.720 Just put a very strange episode. Even looking back. 0:19:41.520 --> 0:19:43.439 On it now, Yeah, it's like watching you know, I 0:19:43.440 --> 0:19:45.359 feel like a streaming series when we were reading or 0:19:45.400 --> 0:19:47.480 going through it. Having said that, does he feel like 0:19:47.600 --> 0:19:50.359 Josh that the board that the company is but find 0:19:50.880 --> 0:19:53.159 is behind him, does he feel kind of comfortable or 0:19:53.160 --> 0:19:55.080 does he feel like he's sot obsessed to look over 0:19:55.119 --> 0:19:57.760 his shoulder and kind of gauge where everybody is. 0:19:58.640 --> 0:20:00.600 Well, it's a completely new bor that he had a 0:20:00.680 --> 0:20:04.359 large role in composing. I think that the brief firing 0:20:04.440 --> 0:20:06.479 was an occasion to basically say, look, are you in 0:20:06.520 --> 0:20:08.240 with the new vision or are you going to leave? 0:20:08.800 --> 0:20:11.159 They've had a bunch of attrition, some of it high profile, 0:20:11.240 --> 0:20:14.920 some of the lower profile. He seems completely at home 0:20:14.960 --> 0:20:19.400 inside the company, completely comfortable. I think that they are 0:20:19.440 --> 0:20:21.840 on the right trajectory as far as he sees it, 0:20:22.760 --> 0:20:24.400 So I don't think there's discomfort there. 0:20:24.480 --> 0:20:26.879 What about moving forward in the future, You know, the 0:20:27.080 --> 0:20:29.600 illly is not there anymore. Elon Musk, of course, isn't 0:20:29.600 --> 0:20:33.640 there anymore. Microsoft has made huge investments in open AI, 0:20:33.760 --> 0:20:37.680 but has also doing their own thing. Anthropic is out there. 0:20:37.800 --> 0:20:42.160 You got Meta Platforms doing its own thing as well. 0:20:42.200 --> 0:20:44.640 What does the landscape look like from Sam Allman's perspective? 0:20:44.720 --> 0:20:45.080 Right now? 0:20:45.359 --> 0:20:50.240 Competitive? It's super competitive. You know, there's trillions of dollars 0:20:50.359 --> 0:20:54.320 in profits to be made by AI by the identification 0:20:54.440 --> 0:20:58.080 of AI. Everybody is seeing the same thing. At some 0:20:58.160 --> 0:21:01.200 point the marketplace will diversify, but they kind of choose 0:21:01.280 --> 0:21:03.560 more of a lane. But right now they're all competing 0:21:04.000 --> 0:21:08.080 with these very large models of AI to get to 0:21:08.160 --> 0:21:10.200 the to the brass ring. You know, I think they 0:21:10.200 --> 0:21:12.879 feel very comfortable that because they were there first, and 0:21:12.920 --> 0:21:16.160 because they're pretty disciplined about what they're actually pursuing, which 0:21:16.160 --> 0:21:21.040 is as a research focused company getting to artificial intelligence 0:21:21.040 --> 0:21:24.520 and artificial general intelligence whatever may come beyond, they are 0:21:24.560 --> 0:21:27.640 able to attract talent there. You know, there are other 0:21:27.680 --> 0:21:31.520 companies have beer warchest. They are successfully getting talent. But 0:21:31.720 --> 0:21:33.240 it's going to be a battle, and I think it's 0:21:33.240 --> 0:21:34.760 going to be a three to five year battle to 0:21:34.800 --> 0:21:39.399 determine who really owns the AI space, what pieces of 0:21:39.440 --> 0:21:42.080 it do they own. And he's determined that not only 0:21:42.080 --> 0:21:44.679 does open Ay want chat cheapt to be a very 0:21:44.720 --> 0:21:47.960 successful product within it, but that that product is not 0:21:48.080 --> 0:21:51.000 the end goal. The end goal is advanced technology, even 0:21:51.040 --> 0:21:54.280 beyond what we're seeing now. So he's pretty clear what 0:21:54.359 --> 0:21:55.399 he sees for their company. 0:21:55.480 --> 0:21:57.399 What does that look like though, And that's one area 0:21:57.440 --> 0:21:59.680 that I'm having trouble envisioning. And maybe it's because I'm 0:21:59.760 --> 0:22:01.680 not in the heart of Silicon Valley, maybe it's because 0:22:01.680 --> 0:22:06.080 I'm not necessarily using chat GPT to its full potential. 0:22:06.400 --> 0:22:08.639 But what does that world of AGI look like or 0:22:08.720 --> 0:22:11.000 that world of AI in the next three to five years, Like, 0:22:11.000 --> 0:22:12.439 how are our lives going to be different? 0:22:12.760 --> 0:22:14.840 Well, look you're not wrong. I mean, this is one 0:22:14.840 --> 0:22:18.800 of the confounding aspects of being alive during AI is 0:22:18.800 --> 0:22:22.760 that the people pursuing AI are research scientists for the 0:22:22.760 --> 0:22:26.119 most part, but they speak like preachers, right, They speak 0:22:26.119 --> 0:22:29.399 with this sort of evangelizing faith about what's coming. But 0:22:29.480 --> 0:22:31.480 when you ask them, you know, as I asked Sam, like, 0:22:31.560 --> 0:22:35.840 what in your mind is artificial general intelligence? What he 0:22:35.920 --> 0:22:40.040 gave me was a sort of decent definition, and at 0:22:40.080 --> 0:22:42.320 the end of it he said, and if we achieve that, 0:22:42.320 --> 0:22:46.000 that would be AGI ish, right, And so there is 0:22:46.040 --> 0:22:49.280 a lack of precision in our terms when we talk 0:22:49.320 --> 0:22:52.240 about what AI is and what we talk about AGI, 0:22:52.880 --> 0:22:56.080 and so it's confounding, it really is. It is not 0:22:56.119 --> 0:22:58.720 on you, though, It is on the industry to ultimately 0:22:58.800 --> 0:23:00.719 come up with these definitions of what it is so 0:23:00.720 --> 0:23:03.680 that people can figure out what it means for their lives. 0:23:03.760 --> 0:23:07.439 This is not standard technology. This is way more disruptive. 0:23:07.480 --> 0:23:10.160 And I think, you know, there's a ripple between these 0:23:10.160 --> 0:23:14.000 companies and the potential consumers. I don't think it's the 0:23:14.040 --> 0:23:16.640 consumers who are to blame for that. Were not yet 0:23:16.680 --> 0:23:20.040 at a place where everybody agrees on what these things are. 0:23:20.680 --> 0:23:23.360 Josh it sounds like he thinks, based on the interview, 0:23:23.400 --> 0:23:26.399 that he thinks Elon could be continue to be trouble 0:23:26.440 --> 0:23:28.560 for them going forward. 0:23:28.920 --> 0:23:32.240 I simultaneously think Sam is very sincere and certainly not 0:23:32.280 --> 0:23:35.400 above being tactical, and so knowing full well. 0:23:35.240 --> 0:23:38.040 That our interview would be read far and wide. 0:23:38.800 --> 0:23:42.120 I'm certain that he said things knowing other people would 0:23:42.160 --> 0:23:45.840 read them, and so the idea that maybe he was 0:23:45.840 --> 0:23:48.560 creating some distance between his view of the Trump administration 0:23:48.680 --> 0:23:50.520 Elon Musk would certainly. 0:23:50.280 --> 0:23:53.960 Benefit open AI. You know, he knows Elon better than us. 0:23:54.119 --> 0:23:57.000 I think that I've heard from many people that Elon 0:23:57.160 --> 0:23:59.960 is very sincere about his concerns about artificial intelligence. 0:24:00.920 --> 0:24:01.080 Yeah. 0:24:01.080 --> 0:24:03.719 Also, I can't deny he has an artificial intelligence company 0:24:03.920 --> 0:24:08.840 that competes with open AI. So I took that answer 0:24:08.840 --> 0:24:10.440 in particular to be fairly tactical. 0:24:10.880 --> 0:24:13.240 He said he thought he could get more lawsuits and 0:24:13.320 --> 0:24:15.159 might be dropped from Elon, but he also thought he 0:24:15.200 --> 0:24:19.560 didn't think Elon would abuse his political power in the end. 0:24:19.920 --> 0:24:21.560 Yeah, and many people have told me the same thing, 0:24:21.560 --> 0:24:25.080 which is it Elon is one hundred percent sincere when 0:24:25.080 --> 0:24:28.400 it comes to technology, but that when it comes to. 0:24:28.680 --> 0:24:30.240 Competitive corporate warfare. 0:24:30.280 --> 0:24:33.440 He'll do anything, and so I think Open AI, much 0:24:33.520 --> 0:24:35.840 like everybody else in the space, is kind of prepared 0:24:35.920 --> 0:24:40.639 for anything so long as Elon is, you know, in 0:24:40.680 --> 0:24:44.040 a position to influence the Trump administration's policies. 0:24:44.640 --> 0:24:46.920 Something that Elon has talked about has been the dangers 0:24:46.920 --> 0:24:50.720 associated with AI and with AGI. What did Sam Altman 0:24:50.800 --> 0:24:53.280 tell you about dangers that could come up as a 0:24:53.280 --> 0:24:54.560 result of this technology? 0:24:55.080 --> 0:24:58.600 You know, he has been fairly consistent that he thinks 0:24:58.600 --> 0:24:58.840 in the. 0:24:58.760 --> 0:25:03.919 Short term, you know, there's biological weaponry concerns, that the 0:25:03.960 --> 0:25:07.880 ability for AI to be used in creating small time 0:25:07.880 --> 0:25:11.240 proliferation of weaponry. He thinks it's likely to happen and 0:25:11.280 --> 0:25:13.560 we need to be on the lookout for it, and 0:25:13.600 --> 0:25:17.200 that in the longer term, we don't know what AI 0:25:17.320 --> 0:25:21.600 is capable of. You know, his feeling very strongly again 0:25:21.720 --> 0:25:23.760 coincides with his self interest. Is it the only way 0:25:23.800 --> 0:25:26.040 to move this forward is to actually make a product, 0:25:26.520 --> 0:25:30.160 test it regulated, as opposed to be concerned about things 0:25:30.200 --> 0:25:34.160 that you don't know regarding AI and its capabilities. So, yeah, 0:25:34.160 --> 0:25:36.600 that's what he sees. That's it's you know, a pretty 0:25:36.640 --> 0:25:39.720 standard view from the industry. There are still people at 0:25:39.720 --> 0:25:43.240 the edges who believe that the risk of existential risks 0:25:43.240 --> 0:25:45.960 from AI is as high as twenty percent. I think 0:25:46.000 --> 0:25:48.120 that's a little bit of an outlier, but people think 0:25:48.160 --> 0:25:49.960 that we're going to be in for it for sure, 0:25:50.119 --> 0:25:52.520 as people come up with new and nefarious uses. 0:25:52.240 --> 0:25:52.720 For the tech. 0:25:53.040 --> 0:25:55.400 Josh only got about a minute left. You get into 0:25:55.440 --> 0:25:59.120 so much, including energy demands of AI and the data 0:25:59.160 --> 0:26:02.080 centers and impact climate. But I am curious in these 0:26:02.119 --> 0:26:06.280 final seconds what stood out for you in this conversation. 0:26:06.880 --> 0:26:09.159 I'm really interested in how people run companies like this. 0:26:10.040 --> 0:26:12.199 I did not know how granular he really is. 0:26:13.200 --> 0:26:14.960 You know, they now have a couple of thousand employees, 0:26:15.400 --> 0:26:18.560 they have hundreds of millions of users, and he is 0:26:18.760 --> 0:26:21.800 in on those research meetings. He's in the slack channels, 0:26:23.080 --> 0:26:24.720 and they are parts of the company that he that 0:26:24.760 --> 0:26:28.879 he really delegates other people to handle. That's interesting. It's 0:26:28.880 --> 0:26:30.959 a it's a different kind of style from other folks. 0:26:30.960 --> 0:26:34.040 He's also very reflective and analytical. You know, he came 0:26:34.040 --> 0:26:37.439 from y Combinator, which was largely this uh, you know, 0:26:37.720 --> 0:26:38.960 nurturing fund. 0:26:38.760 --> 0:26:41.600 Which scouted CEOs. It's very aware of what he's good 0:26:41.600 --> 0:26:42.239 at and bad at. 0:26:42.280 --> 0:26:46.159 As a CEO, and that kind of reflection is not 0:26:46.280 --> 0:26:49.280 common in many of the CEO interviews I've done, so 0:26:49.480 --> 0:26:51.680 you know, I was both impressed by it and I 0:26:51.760 --> 0:26:54.200 found that to be, you know, relatively abnormal. 0:26:54.600 --> 0:26:57.480 Well, thank you so much, Josh, really appreciate the time. Josh, 0:26:57.560 --> 0:27:01.520 of course, is Bloomberg BusinessWeek freelance contributor and also former 0:27:01.640 --> 0:27:04.080 editor of BusinessWeek, and you can catch the whole story 0:27:04.359 --> 0:27:08.120 in the issue current issue of Bloomberg Business Week, also 0:27:08.160 --> 0:27:11.760 online and on the Bloomberg terminal. This is Bloomberg BusinessWeek. 0:27:13.680 --> 0:27:17.440 This is the Bloomberg Business Week Podcast. Listen live each 0:27:17.480 --> 0:27:20.440 weekday starting at two pm Eastern up on applecar Play 0:27:20.560 --> 0:27:23.199 and the Android Auto with the Bloomberg Business app. You 0:27:23.240 --> 0:27:26.400 can also listen live on Amazon Alexa from our flagship 0:27:26.480 --> 0:27:30.240 New York station Just Say Alexa played Bloomberg eleven thirty. 0:27:31.880 --> 0:27:34.800 Our next guest says, it's quote the most powerful technology 0:27:34.800 --> 0:27:36.639 company that China has ever built. 0:27:36.760 --> 0:27:39.440 No, we're not talking about ten Cent, which this month 0:27:39.560 --> 0:27:42.600 was blacklisted by the Biden administration for alleged links to 0:27:42.640 --> 0:27:45.919 the Chinese military. Nor are we talking about Ali Baba 0:27:46.119 --> 0:27:48.040 or JD dot Com or Matswan. 0:27:48.240 --> 0:27:51.120 We're talking about Huawei, the privately held maker of telecom 0:27:51.160 --> 0:27:54.080 equipment that came into focus in twenty eighteen when the 0:27:54.119 --> 0:27:58.520 company's chief financial officer, menguan Zhou, was arrested in Canada 0:27:58.920 --> 0:28:01.959 at the request of the United States. And it's an 0:28:01.960 --> 0:28:05.720 incident that's set off a diplomatic uproar and complicated relations 0:28:05.720 --> 0:28:07.920 between the United States, China, and Canada. 0:28:08.280 --> 0:28:10.239 For a deep dive on the company, we caught up 0:28:10.240 --> 0:28:14.200 with Eva Doe, technology policy reporter at the Washington Post 0:28:14.600 --> 0:28:17.160 and the author of the new book House of Huawei, 0:28:17.440 --> 0:28:20.040 The Secret History of China's Most Powerful Company. 0:28:20.320 --> 0:28:24.000 I think to many people where they've heard of Huawei 0:28:24.040 --> 0:28:27.080 is from their smartphones, which for years has been one 0:28:27.119 --> 0:28:30.560 of the largest smartphone brands in the world. But really 0:28:30.600 --> 0:28:33.920 the reason it's become such a policy concerns it's also 0:28:34.000 --> 0:28:37.680 the largest maker of the equipment that goes into phone 0:28:37.720 --> 0:28:40.800 and internet networks around the world. And of course these 0:28:40.840 --> 0:28:45.800 networks they carry all sorts of information, you know, phone calls, emails, 0:28:46.720 --> 0:28:52.120 internet traffic, and from that perspective, it's become something that 0:28:52.200 --> 0:28:56.640 policymakers have become very concerned about. Is this one company 0:28:57.080 --> 0:29:02.760 and its global footprint. It's far head and shoulders the 0:29:02.840 --> 0:29:08.800 dominant supplier in developing nations around the world, and even 0:29:08.400 --> 0:29:12.800 in Europe is a dominant supplier in many countries. 0:29:13.280 --> 0:29:14.640 You know, one thing we want to ask you. You know, 0:29:14.640 --> 0:29:16.240 we've spent a lot of time over the last few 0:29:16.320 --> 0:29:19.640 years talking with Andy Purty, who was the chief security 0:29:19.680 --> 0:29:23.640 officer for Huawei America. You would come in every few months, Yeah, 0:29:23.640 --> 0:29:25.200 and we would talk to him about kind of the 0:29:25.200 --> 0:29:29.400 strained er growing strained relationships certainly in the tech environment. 0:29:29.040 --> 0:29:34.960 About Huawei not being a security risk to the United States. 0:29:34.760 --> 0:29:39.000 Right exactly. And so I am wondering in this environment 0:29:40.840 --> 0:29:45.000 access to an administration you've got Elon Musk, you know, 0:29:45.040 --> 0:29:49.080 a certainly high profile member of the tech community. I mean, 0:29:49.680 --> 0:29:55.200 what are your expectations of Huawei having a strong communication 0:29:55.400 --> 0:30:00.520 line with the incoming Trump administration and maybe it's future 0:30:01.240 --> 0:30:04.320 changing in a more favorable way here when it comes 0:30:04.400 --> 0:30:05.440 to the United States. 0:30:06.120 --> 0:30:09.680 I think if that happens, that they make this kind 0:30:09.680 --> 0:30:12.640 of rebounding communications in the United States, that would be 0:30:13.040 --> 0:30:18.040 defying expectations in that the incoming Trump administration. If you 0:30:18.120 --> 0:30:24.840 look at who is in Trump's team, there's there there's 0:30:24.920 --> 0:30:27.960 a lot of security hawks, a lot of people have 0:30:28.000 --> 0:30:32.160 been vocal critics of China for many years, and so 0:30:32.640 --> 0:30:35.160 I think what we can expect is for policy to be, 0:30:35.360 --> 0:30:38.920 you know, even more stringent than it has been in 0:30:39.000 --> 0:30:42.720 recent years as far as control of technology being transferred 0:30:42.760 --> 0:30:46.320 to China. And from that point of view, I would 0:30:46.320 --> 0:30:49.600 say it's it's hard to see where the bright spot 0:30:49.680 --> 0:30:54.200 is for Huawei in the US market and the foreseeable future. 0:30:54.800 --> 0:30:56.400 Oh that's interesting, okay. 0:30:56.480 --> 0:30:59.640 So I have a few questions around this, one of 0:30:59.680 --> 0:31:03.600 them being the opportunity for Huawei outside of the US, 0:31:04.160 --> 0:31:06.800 because you know, we've talked a lot in the past 0:31:06.800 --> 0:31:12.000 few years about China's growing influence with the Belton Road initiative, 0:31:12.000 --> 0:31:15.360 and I'm wondering from a cybersecurity perspective, from a telecom 0:31:15.400 --> 0:31:18.520 infrastructure perspective, are they able to use that as a 0:31:18.600 --> 0:31:19.960 lever in any way? 0:31:20.400 --> 0:31:23.200 Well, I think so, And part of that is just 0:31:23.720 --> 0:31:27.480 there have been so few alternatives in this market. There's 0:31:27.640 --> 0:31:30.280 very few players, and so the question is if you 0:31:30.320 --> 0:31:34.400 don't use Huawei, what do you use for these developing countries. 0:31:34.840 --> 0:31:38.080 And so that's sort of been what officials in many 0:31:38.120 --> 0:31:41.040 of these countries have been saying, which is, you know, 0:31:41.080 --> 0:31:44.120 the United States wants US to take Huawei equipment out, 0:31:44.160 --> 0:31:46.840 but what do we do then? Sort of the only 0:31:47.560 --> 0:31:52.840 comparable vendors for the most part have been European companies 0:31:53.080 --> 0:31:56.880 whose equipment is far more expensive, and that's just outside 0:31:56.880 --> 0:32:01.440 of the budget for many countries to do. So. Part 0:32:01.480 --> 0:32:04.400 of the US policy under the Biden administration has been 0:32:04.520 --> 0:32:09.200 to programs to develop new competitors making this kind of 0:32:09.240 --> 0:32:13.000 gear so that countries do have an alternative if they 0:32:13.360 --> 0:32:15.560 if they actually want to switch EVA. 0:32:15.680 --> 0:32:17.560 I am curious, you know, you really get into the 0:32:18.240 --> 0:32:22.720 details of the history of this company that I think 0:32:22.800 --> 0:32:24.880 most people didn't even think about until we had the 0:32:24.920 --> 0:32:27.760 problems and the issues right of a few years ago. 0:32:27.960 --> 0:32:31.920 Why is it important to understand the history of this 0:32:32.720 --> 0:32:37.560 company in light of the security considerations that many global 0:32:37.600 --> 0:32:40.440 leaders are concerned about when it comes to this company. 0:32:40.520 --> 0:32:44.240 Yeah, I think part of it is just understanding how 0:32:44.280 --> 0:32:47.160 we got to this point where the US and China 0:32:47.320 --> 0:32:54.680 are so acrimonious and there's so much distrust, especially regarding 0:32:54.720 --> 0:32:59.000 the technology industry now, and so I think Huawei is 0:32:59.040 --> 0:33:02.360 such a good case and that it was one of 0:33:02.360 --> 0:33:06.000 the very first private tech companies founded in China in 0:33:06.040 --> 0:33:08.880 the early eighteen hundreds, and it's been on the front 0:33:08.920 --> 0:33:14.560 waves of these changing sentiments. You know, China's globalization, that 0:33:14.640 --> 0:33:18.360 heady period where China was very much embraced by the 0:33:18.400 --> 0:33:22.120 world and these tech companies were embraced by the world 0:33:23.080 --> 0:33:28.520 and moving towards you know, this current moment when you know, 0:33:28.600 --> 0:33:33.680 the fear that China is a real rival and adversary, 0:33:33.720 --> 0:33:37.560 capable adversary to the United States is so on the 0:33:37.640 --> 0:33:41.040 front forefront of policy decision making today. 0:33:41.240 --> 0:33:45.360 Okay, So bring us to twenty eighteen. When the company 0:33:45.520 --> 0:33:48.920 CFO Menguanzhou was arrested in Canada. It set off that 0:33:49.080 --> 0:33:54.640 unprecedented diplomatic uproar. She was held for years as this 0:33:54.720 --> 0:33:57.280 played out in the courts. What happened there? 0:33:57.840 --> 0:34:00.800 Yeah, So that that was the moment and the rubber 0:34:01.480 --> 0:34:05.120 kind of hit the road. So for years there have 0:34:05.200 --> 0:34:08.560 been these concerns bubbling up in the United States and 0:34:08.600 --> 0:34:12.839 other Western countries about Huawei, but it really was that 0:34:12.880 --> 0:34:15.920 moment when the CFO was detained and at the same 0:34:15.960 --> 0:34:20.520 point the Trump administration put these sort of unprecedented sanctions 0:34:20.600 --> 0:34:25.240 on Huawei that sort of moved us to a new 0:34:25.920 --> 0:34:28.000 sort of Cold War esque era. 0:34:28.640 --> 0:34:29.080 In a sense. 0:34:29.080 --> 0:34:30.960 It's a big part of the story is about the 0:34:31.000 --> 0:34:34.680 shift in China over the years that Huawei has existed. Listen, 0:34:35.000 --> 0:34:40.240 you did a ton of research on this, interviews, archival research, 0:34:40.680 --> 0:34:45.200 You have reported from China, You've reported from Taiwan during 0:34:45.239 --> 0:34:48.720 your career. Can you answer the question for us whether 0:34:48.840 --> 0:34:53.120 or not Huawei is a security risk to the United States? 0:34:53.800 --> 0:34:59.400 A security risk, I would say probably, and that's something 0:35:00.080 --> 0:35:03.959 that's outside strictly the company's control, and that what we've seen. 0:35:04.520 --> 0:35:07.359 I think the clearest evidence we've seen has come out 0:35:07.440 --> 0:35:13.319 in Edward Snowden's leaks, which is that tech company's equipment 0:35:14.160 --> 0:35:17.759 can be used by and is used by intelligence agencies 0:35:18.160 --> 0:35:21.200 who find backdoors or build back doors into them even 0:35:21.280 --> 0:35:25.719 without the company's knowledge. So in a way, it's not 0:35:26.000 --> 0:35:29.640 entirely in Huawei's executives' hands. They can say, you know, 0:35:29.719 --> 0:35:33.040 our equipment is safe. We're doing everything that we can, 0:35:33.719 --> 0:35:36.760 but it's not entirely the company's control. 0:35:37.320 --> 0:35:39.759 I am curious just for size and scope, something we're 0:35:39.840 --> 0:35:43.360 very into certainly here at Bloomberg. What are the capabilities? 0:35:44.000 --> 0:35:45.719 I mean, how should we be thinking about them? In 0:35:45.800 --> 0:35:50.400 terms of Huawei surveillance systems, which are used by governments 0:35:50.440 --> 0:35:50.920 all over. 0:35:51.320 --> 0:35:56.759 So this has very much become something that's part like 0:35:56.840 --> 0:36:00.880 a new business line, these sort of citywide survey lens systems. 0:36:00.920 --> 0:36:04.160 That has to do with you know, data networks becoming 0:36:04.200 --> 0:36:07.400 fast enough that you can transmit huge amounts of data, 0:36:07.440 --> 0:36:11.960 so you can have video cameras and other sorts of 0:36:12.000 --> 0:36:16.879 sensors all across the city that are just streaming all 0:36:16.920 --> 0:36:21.440 sorts of information. And there's a number of governments around 0:36:21.440 --> 0:36:25.520 the world that are using these systems from Huawei. Yeah, 0:36:25.560 --> 0:36:29.960 and it's very controversial. Huawei is not the only company 0:36:29.960 --> 0:36:34.200 that supplies them. IBM was actually the US company was 0:36:34.239 --> 0:36:39.680 actually the first company that started supplying these kinds of systems. 0:36:40.280 --> 0:36:44.920 But yeah, it's very much a debate, ongoing debate about 0:36:45.000 --> 0:36:50.000 just how much data governments should be collecting and to 0:36:50.080 --> 0:36:53.200 what degree citizens have privacy or not. 0:36:54.080 --> 0:36:56.040 You know, Tim and I we spend a lot of 0:36:56.040 --> 0:36:58.320 time I'm sure you do too, as we know, talking 0:36:58.360 --> 0:37:02.839 about large language models, generative AI. What's next in terms 0:37:02.880 --> 0:37:06.440 of the impact continuing to track, So I think about 0:37:06.480 --> 0:37:09.440 what you are saying, what you have learned in the 0:37:09.440 --> 0:37:13.520 context of Huawei. You know, their role, whether it come, 0:37:13.719 --> 0:37:16.440 whether it's five g in terms of communications. Are AI 0:37:16.560 --> 0:37:21.560 technologies the AI races on. We know that. So I'm 0:37:21.600 --> 0:37:25.160 just wondering, how are you thinking about that next chapter 0:37:26.080 --> 0:37:30.279 and the concerns that we should have considering Huawei's dominance. 0:37:30.760 --> 0:37:34.520 Yeah, so Huawei is going to continue to be in 0:37:34.560 --> 0:37:39.239 the in the conversation for this AI era. So they 0:37:39.280 --> 0:37:44.799 are China's most advanced company for designing these chips that 0:37:46.200 --> 0:37:52.080 drive these AI systems, and so China has been importing 0:37:52.200 --> 0:37:55.640 huge amounts of US chips for years to build you know, 0:37:55.680 --> 0:38:00.799 their big data centers for large language models, and US 0:38:00.880 --> 0:38:04.680 sanctions have really been tightened in the past couple of years, 0:38:04.680 --> 0:38:09.040 which means they're more reliant on Huawei tips than ever before. 0:38:09.480 --> 0:38:12.120 So are they being hurt by these restrictions and maybe 0:38:12.200 --> 0:38:14.239 not having access and you know, we continue to see 0:38:14.280 --> 0:38:17.160 headlines about what this means for Nvidia being able to 0:38:17.239 --> 0:38:21.560 share you know, it's higher and technology. I mean, are 0:38:21.640 --> 0:38:24.520 they is China is Huawei being hurt as a result 0:38:24.520 --> 0:38:26.640 of all of this or does it just make them 0:38:26.640 --> 0:38:29.560 double down? From what you have learned, does it just 0:38:29.680 --> 0:38:33.040 make China and Huawei double down to make sure that 0:38:33.080 --> 0:38:35.080 they have the best and greatest. 0:38:35.080 --> 0:38:38.799 Well certainly they've very much been hurt in that. If 0:38:38.840 --> 0:38:42.880 you look at their trajectory before these sanctions began, they 0:38:42.920 --> 0:38:47.279 were growing year after year at enormous clip, and now 0:38:47.480 --> 0:38:51.480 that growth has stopped. I think the question during the 0:38:51.480 --> 0:38:56.439 first Trump administration was, you know, can they survive? And 0:38:56.560 --> 0:39:00.439 so the question, so the answer to that is clear 0:39:00.520 --> 0:39:04.319 now that you know they're too important to China that 0:39:04.400 --> 0:39:07.239 China is not going to let this company die. It's 0:39:07.280 --> 0:39:10.880 going to do everything possible for it to survive. That 0:39:11.000 --> 0:39:14.560 being said, yeah, they've very much been sort of hurt 0:39:14.640 --> 0:39:20.000 and slowed down by by these growing restrictions from the 0:39:20.080 --> 0:39:22.200 United States. 0:39:22.239 --> 0:39:24.320 It's interesting too, because it's not a publicly held company. 0:39:24.360 --> 0:39:28.319 It's a privately held company. Ownership structure, what is it? 0:39:28.360 --> 0:39:30.640 Who owns it? And do they remain Does it remain 0:39:30.840 --> 0:39:32.960 a private company for the foreseeable future. 0:39:33.440 --> 0:39:37.839 Yeah, so it's privately held, but with the shares dispersed 0:39:37.960 --> 0:39:43.400 among numerous current and former Huawei employees. And that for 0:39:43.520 --> 0:39:47.120 years has been a major part of the incentive program 0:39:47.719 --> 0:39:52.600 of how Huawei's founder and they got engineers to work 0:39:53.320 --> 0:39:57.279 incredibly hard towards this cause, which was part of their compensation. 0:39:58.160 --> 0:40:00.680 Was in the dividends they would receive even from the 0:40:00.719 --> 0:40:07.080 company's performance. Since it's privately owned, that means it does 0:40:07.120 --> 0:40:10.800 not have much of the scrutiny of a publicly owned company. 0:40:10.960 --> 0:40:15.640 There's definite, definitely limitations of what they have to disclose 0:40:15.680 --> 0:40:19.320 to the public. And they also aren't at the winds 0:40:19.400 --> 0:40:23.960 of the stock market. And so that's been actually part 0:40:24.000 --> 0:40:26.880 of their success and that they've been able to execute 0:40:27.000 --> 0:40:30.520 really long term plans and sort of long term expensive 0:40:30.680 --> 0:40:36.680 investments that you know, short term investors would not necessarily 0:40:36.719 --> 0:40:40.200 be on board with. And so at at this point, 0:40:40.280 --> 0:40:44.120 it's hard to see why Huawei would go public. They 0:40:44.120 --> 0:40:50.719 have plenty of funding China's state policy banks are very 0:40:50.760 --> 0:40:55.280 supportive when they need funding for their projects, and so 0:40:55.320 --> 0:40:58.960 it's probably going to remain private for the foreseeable future. 0:40:59.200 --> 0:41:01.680 I think about you know, people who are listening. I 0:41:01.680 --> 0:41:04.839 mean when the Bloomberg audience, right, there's obviously investors, there's consumers, 0:41:05.280 --> 0:41:07.040 you know, and they continue to look at their goods 0:41:07.040 --> 0:41:09.360 and their security breaches and so on and so forth, pecially 0:41:09.360 --> 0:41:12.920 when it comes to telecom. How I mean the consumer 0:41:12.960 --> 0:41:16.560 based do they they need to be concerned right? And 0:41:16.600 --> 0:41:19.520 they I assume you're going to say they want their 0:41:19.560 --> 0:41:23.640 governments to make sure that they're overseeing global technology because 0:41:23.760 --> 0:41:26.320 this is the new world order. And to be fair, 0:41:26.480 --> 0:41:30.399 I mean, can we say that US companies I mean, 0:41:30.680 --> 0:41:32.759 I mean, obviously I would assume the US government is 0:41:32.800 --> 0:41:35.080 not involved in those technologies. I mean, it's not apples 0:41:35.080 --> 0:41:37.920 to apples. It's different, right when it's China and the 0:41:38.000 --> 0:41:40.320 Chinese government when it comes to some of their big companies, 0:41:40.360 --> 0:41:41.760 particularly tech companies. 0:41:42.239 --> 0:41:46.840 So one thing is just that technology systems are hacked 0:41:46.880 --> 0:41:50.200 all the time, and probably hacked more than the average 0:41:50.239 --> 0:41:54.840 consumer would would realize. And so to an certain extent, 0:41:55.000 --> 0:42:00.200 it is just what is your risk level if you 0:42:00.239 --> 0:42:03.120 work for the government, if you work for you know, 0:42:03.320 --> 0:42:08.800 certain sensitive industries, Yeah, you probably want to think twice 0:42:08.960 --> 0:42:12.320 about exactly what kind of equipment you're using. And in fact, 0:42:12.360 --> 0:42:17.120 your employer probably has already guidelines in place. For the 0:42:17.280 --> 0:42:21.880 average consumer, you know, there is a certain risk that 0:42:21.960 --> 0:42:28.719 your data could be hacked, but that probably existed whether 0:42:28.800 --> 0:42:29.480 you knew it or not. 0:42:29.840 --> 0:42:31.680 Even just one last question, got about a minute and 0:42:31.719 --> 0:42:34.440 a half here, what was the most revealing thing to 0:42:34.600 --> 0:42:37.920 you in writing this book, doing the deep dive, going 0:42:38.000 --> 0:42:40.640 into the archive, talking to so many different voices. What 0:42:40.880 --> 0:42:44.560 was again the most revealing thing in this process for you. 0:42:45.040 --> 0:42:47.440 I think one of the most fun parts for me 0:42:47.680 --> 0:42:52.080 was just seeing all the places and all the historical 0:42:52.160 --> 0:42:55.719 moments where Huawei popped up while I was sort of 0:42:55.760 --> 0:42:59.520 researching in archives in the US and China and around 0:42:59.560 --> 0:43:05.160 the world, and it really gave me an appreciation of 0:43:06.120 --> 0:43:11.120 companies like this just all plugged in how they are 0:43:11.160 --> 0:43:16.120 affected and how they affect events going on around the globe. 0:43:17.000 --> 0:43:20.160 You know, in China, for the Hong Kong the historic 0:43:20.160 --> 0:43:24.319 Hong Kong Handover, when Hong Kong was returned from being 0:43:24.360 --> 0:43:28.360 a British colony to China, Huawei was there and helping 0:43:28.440 --> 0:43:34.520 to do the service of video surveillance for it. You know, 0:43:34.600 --> 0:43:38.720 for the Arab Spring, the Iraq War, uh, Huawei. 0:43:38.480 --> 0:43:39.280 Was on the ground. 0:43:40.160 --> 0:43:40.319 Uh. 0:43:40.360 --> 0:43:43.080 So they were there far more than a consumer company. 0:43:43.200 --> 0:43:48.120 When you supplied the phone and internet networks, it was 0:43:48.160 --> 0:43:52.920 our crucial and the first thing that you're you're expected 0:43:52.920 --> 0:43:55.800 to be furred on the ground with anything big happening. 0:43:56.280 --> 0:43:58.560 Listen, great stuff, and so glad we got so much time. 0:43:58.600 --> 0:44:02.080 Even though she's take Dnology policy reporter at Washington Post. 0:44:02.280 --> 0:44:03.720 Her new book House of Wahwei. 0:44:08.680 --> 0:44:12.239 You're listening to the Bloomberg Business Week podcast. Catch us 0:44:12.320 --> 0:44:15.760 live weekday afternoons from two to five pm Eastern Listen 0:44:15.800 --> 0:44:19.360 on Applecarplay and Android Auto with the Bloomberg Business app, 0:44:19.520 --> 0:44:22.160 or watch us live on YouTube. 0:44:22.719 --> 0:44:24.759 Plenty Ahead in our second hour of the weekend edition 0:44:24.760 --> 0:44:27.920 of Bloomberg Business Week, including the CEO of Attractions and 0:44:27.960 --> 0:44:33.799 hospitality company Pursuit on the demand and costs of outdoorsy experiences. 0:44:33.280 --> 0:44:35.960 Plus a daughter of Martin Luther King Junior on her 0:44:36.000 --> 0:44:39.799 father's legacy, racial equity, and the upcoming Trump presidency. 0:44:40.040 --> 0:44:42.400 First up this hour, you or your friends maybe partaking 0:44:42.440 --> 0:44:45.040 in the trend known as dry January. That's where you 0:44:45.080 --> 0:44:47.520 put down booze for the month last weekend. You might 0:44:47.560 --> 0:44:50.239 recall our Bloomberg Pursuits team even gave us some of 0:44:50.239 --> 0:44:54.080 the best mocktails to try, and we are already seeing 0:44:54.120 --> 0:44:56.759 declines in alcohol consumption. We've talked about those trends a 0:44:56.800 --> 0:44:59.400 lot on air and at the same time arise in 0:44:59.480 --> 0:45:00.960 non alcohol options. 0:45:01.320 --> 0:45:04.880 Two years after launching low alcohol products, the California based 0:45:04.880 --> 0:45:08.880 wine maker Libby Wines is now shifting its entire focus 0:45:09.120 --> 0:45:12.640 to non alcoholic beverages. Grant Hemingway is co founder and 0:45:12.760 --> 0:45:15.399 CEO of Libby Wines. He stopped by it to chat 0:45:15.400 --> 0:45:18.400 a share a glass or two about Libby's latest offerings. 0:45:18.880 --> 0:45:21.320 John my now co founder, and I actually were connected 0:45:21.360 --> 0:45:24.080 through some mutual friends and yes, a beer guy and 0:45:24.120 --> 0:45:27.120 a winemaker getting together. John did cut his teeth in 0:45:27.120 --> 0:45:30.000 that sessionable category, but I think it was one of 0:45:30.000 --> 0:45:33.160 those early indicators for him and for me watching from afar, 0:45:33.320 --> 0:45:39.120 that this moderation wave was was forthcoming and we really 0:45:39.200 --> 0:45:40.319 wanted to lean into my way. 0:45:40.560 --> 0:45:42.640 Did you really see this moderation. 0:45:42.480 --> 0:45:43.879 Wave coming one hundred percent? 0:45:44.040 --> 0:45:45.080 What were you seeing specific? 0:45:45.160 --> 0:45:48.040 I mean, the crystal ball that we saw was which 0:45:48.040 --> 0:45:50.640 we couldn't have predicted was going to be this self 0:45:50.680 --> 0:45:54.000 regulating meaning there are a lot of people out there 0:45:54.200 --> 0:45:58.320 and there's these buzzword terms zebra striping or bookending. 0:45:57.719 --> 0:45:58.800 Which is what that means. 0:45:58.840 --> 0:46:01.279 So a session, it's like a drinking session or a 0:46:01.360 --> 0:46:05.280 socializing session in which you have a full fledged cocktail 0:46:05.360 --> 0:46:07.000 or a glass of wine and then you mix over 0:46:07.080 --> 0:46:08.600 to a non alcoholic. 0:46:08.320 --> 0:46:10.720 Okay, So it seems to me that this. 0:46:10.640 --> 0:46:13.920 Is the consumption pattern happening for those that still are 0:46:13.960 --> 0:46:18.560 consuming not the abstainers, which seem to be growing also 0:46:18.560 --> 0:46:19.000 by the day. 0:46:19.080 --> 0:46:21.239 What can I ask you while you I know you 0:46:21.320 --> 0:46:23.960 had talked about it because you don't really drink. You 0:46:24.080 --> 0:46:25.520 used to drink some alcohol. 0:46:25.320 --> 0:46:27.040 Yeah, and even you know, to be fair, I did 0:46:27.040 --> 0:46:30.759 have a sip of like a really nice stout that 0:46:30.840 --> 0:46:32.799 my wife opened the other night. I get really bad 0:46:32.840 --> 0:46:35.719 headaches when I drank, and when what I found was 0:46:35.760 --> 0:46:38.520 that the less I drank when I did drink, the 0:46:38.560 --> 0:46:41.279 worse the headaches got. With less alcohol. Yeah, and I 0:46:41.320 --> 0:46:43.680 thought to myself, you know, it's not worth after drinking 0:46:43.719 --> 0:46:46.719 one beer to wake up and have my my day 0:46:46.800 --> 0:46:49.560 the next day completely ruined. So I don't know if 0:46:49.560 --> 0:46:52.040 it's like an allergy or something, but it was. Unfortunately, 0:46:52.040 --> 0:46:53.959 it was very easy for me to stop drinking because 0:46:53.960 --> 0:46:56.800 I wasn't drinking that much anyway. But what I noticed 0:46:56.840 --> 0:46:59.760 grant and maybe it's just kind of like a bias 0:46:59.800 --> 0:47:01.200 of where I am in life, but a lot of 0:47:01.239 --> 0:47:04.280 my friends were having kids, they were getting into their forties. 0:47:04.560 --> 0:47:06.080 They were like, if I, you know, if I need 0:47:06.080 --> 0:47:08.879 to be up early, I can't be staying out late. 0:47:08.960 --> 0:47:12.080 I need to be prioritizing rest and sleep and this 0:47:12.200 --> 0:47:13.640 was how they were dealing with that, and. 0:47:13.600 --> 0:47:15.680 That's our exact experience. To my wife and I. 0:47:15.960 --> 0:47:19.920 We have two kids back in California, and really started 0:47:19.960 --> 0:47:23.239 to almost like this self awareness or observation that we 0:47:23.239 --> 0:47:26.000 were just not drinking wine as much and it was 0:47:26.400 --> 0:47:27.239 a lifestyle thing. 0:47:27.360 --> 0:47:29.800 We know, had young kids and we were. 0:47:29.640 --> 0:47:33.000 Managing careers and alcohol was kind of getting in the 0:47:33.040 --> 0:47:35.480 way of that. And so it was kind of that 0:47:35.520 --> 0:47:37.880 moment that light bulb were kind of set out and 0:47:38.200 --> 0:47:42.719 surveyed the competitive set and nothing was really enticing from 0:47:42.719 --> 0:47:46.040 a qualitative perspective. But I had been eighteen years in 0:47:46.080 --> 0:47:48.600 wine making and this was a big loss, Like, why 0:47:48.640 --> 0:47:49.640 am I not drinking. 0:47:49.440 --> 0:47:51.560 The product that's supporting our career? 0:47:51.680 --> 0:47:53.719 Well, what are your friends in the wine industry say, 0:47:53.760 --> 0:47:55.600 Because they're getting hit hard right now. 0:47:55.480 --> 0:47:56.280 We're getting hammered. 0:47:56.880 --> 0:48:00.440 It's concerning, I mean the downward and you just reported 0:48:00.480 --> 0:48:03.920 on the Surgeon General like that's there's an anti alcohol movement, 0:48:03.960 --> 0:48:06.400 which I don't know that I'm all for in our business, 0:48:06.480 --> 0:48:09.960 I would say I'm four, But generally speaking, this moderation 0:48:10.160 --> 0:48:13.000 is a cultural movement, and I think the wine is 0:48:13.040 --> 0:48:16.479 she's really waking up to it and look no further 0:48:16.560 --> 0:48:17.800 than the results at the register. 0:48:18.440 --> 0:48:21.000 Yeah, and you know it's funny to watch, you know, 0:48:21.080 --> 0:48:24.120 kind of old television where people are constantly smoking and 0:48:24.239 --> 0:48:26.200 had a cocktail. I even think of like my dad 0:48:26.239 --> 0:48:28.840 coming up from work and had kind of a serious 0:48:29.080 --> 0:48:33.399 you know, spirits and cocktail, you know, fairly regularly when 0:48:33.440 --> 0:48:35.800 we were younger, and then eventually all of that stuff 0:48:36.000 --> 0:48:39.440 started to go away, even with his generation and easing 0:48:39.480 --> 0:48:39.759 of it. 0:48:39.880 --> 0:48:41.360 Have you heard of California sober? 0:48:41.960 --> 0:48:42.720 What is it now? 0:48:43.040 --> 0:48:43.520 What is it? 0:48:44.239 --> 0:48:44.799 California? 0:48:44.800 --> 0:48:47.520 And so yes, California fairly California sober as you abstained 0:48:47.520 --> 0:48:50.200 from alcohol, but you partake in to see. 0:48:50.560 --> 0:48:52.560 Or everything else, everything else? 0:48:52.600 --> 0:48:54.800 Wait wait is he flushing? 0:48:55.200 --> 0:48:55.399 No? 0:48:55.760 --> 0:48:57.879 Well no, this is just the bronzing that I get 0:48:57.880 --> 0:48:59.440 from being a California. 0:49:00.040 --> 0:49:02.120 So let's let's talk about because you brought us a 0:49:02.120 --> 0:49:05.759 couple of sparkling You brought us a sparkling white and 0:49:05.800 --> 0:49:08.640 a sparkling Rose, and I'm curious about I'm going to 0:49:08.680 --> 0:49:10.560 pour some and you can kind of walk us through it. 0:49:10.560 --> 0:49:13.200 But like, tell us, because Tim and I have actually 0:49:13.239 --> 0:49:17.360 tried some non alcoholic beverages and some better than others, 0:49:17.400 --> 0:49:19.960 we can say, so tell us about how what went 0:49:20.000 --> 0:49:20.560 into making this. 0:49:20.680 --> 0:49:22.160 I think that was shared around. 0:49:22.200 --> 0:49:24.560 Yeah, the biggest white space for me was was trying 0:49:24.560 --> 0:49:28.440 to take a wine maker's perspective with a wine drinking expectation. 0:49:28.560 --> 0:49:29.760 Please, it's our expert. 0:49:30.880 --> 0:49:33.319 And so I really tried to deconstruct the whole wine 0:49:33.360 --> 0:49:35.560 making process. So where the grapes growing, when are we 0:49:35.640 --> 0:49:39.040 picking them, how are we fermenting them, making sure that 0:49:39.400 --> 0:49:42.560 the non alcoholic was the end result, and so the 0:49:42.920 --> 0:49:44.120 whole process. 0:49:44.080 --> 0:49:45.279 Oh, do you have a glass? Do you already have 0:49:45.360 --> 0:49:48.920 or did you ready past the glass? Folks, you're the sausage, 0:49:49.239 --> 0:49:52.000 the sausage and non alcoholic wine is being made great, 0:49:52.160 --> 0:49:52.879 so go ahead, please. 0:49:53.440 --> 0:49:57.440 So the whole process for me was trying to appeal 0:49:57.480 --> 0:50:01.239 to a wine drinker's expectations. And so the dealcalization or 0:50:01.280 --> 0:50:05.840 alcohol removal process is very aggressive. It's not as exact 0:50:05.880 --> 0:50:09.520 as we'd like, and hopefully technology keeps improving. But you 0:50:09.640 --> 0:50:11.880 remove a lot of the aromatics, the texture, and certainly 0:50:11.960 --> 0:50:15.200 the alcohol, which is a massive component to the integration 0:50:15.320 --> 0:50:19.800 of the overall wine experience. So you're limiting, eliminating fourteen 0:50:20.480 --> 0:50:21.759 roughly fourteen percent. 0:50:21.520 --> 0:50:22.120 Of your product. 0:50:22.600 --> 0:50:24.520 That's the thing that really interesting. We spoke to Duncan 0:50:24.560 --> 0:50:28.200 far earlier, not yet of Bloomberg Intelligence. He's a consumer 0:50:28.239 --> 0:50:31.120 products analyst, and he talked about this at the top 0:50:31.120 --> 0:50:35.160 of our program today, that the technology to remove alcohol 0:50:35.200 --> 0:50:37.600 has gotten so much better in recent years. He mentioned 0:50:37.640 --> 0:50:40.600 caliber when he was a kid being a terrible alternative 0:50:40.640 --> 0:50:42.640 to like it was like the alcohol freak Guinness. He 0:50:42.719 --> 0:50:45.640 called it drain back up what I don't know what 0:50:45.719 --> 0:50:47.840 he can right now, like it was draino or something, 0:50:48.360 --> 0:50:50.080 And so what is the technology and how has it 0:50:50.080 --> 0:50:51.680 gotten so good? Like how do you do it? 0:50:51.320 --> 0:50:54.160 It's a filter or there are various ways that you're 0:50:54.160 --> 0:50:56.879 doing alcohol removal, but it basically is a molecular weight. 0:50:56.960 --> 0:50:57.640 It's pretty nice. 0:50:57.840 --> 0:50:58.680 Thank you, This is good. 0:50:58.719 --> 0:50:59.239 I appreciate it. 0:50:59.280 --> 0:50:59.960 And we're a tough craft. 0:51:02.239 --> 0:51:06.120 The process though, it's very extracted on weight and it's selective, 0:51:06.160 --> 0:51:09.600 but it's not perfect. And so the the the imperfections 0:51:09.640 --> 0:51:12.920 are the removal of aromatics and then removal of varietal character. 0:51:13.320 --> 0:51:15.080 And so that's why some of you know, some of 0:51:15.120 --> 0:51:17.000 the early entrants you might have seen are adding a 0:51:17.040 --> 0:51:20.320 lot back to try and replace, but it's not adequate. 0:51:20.400 --> 0:51:23.320 And so with this like it's very bright, it's very refreshing. 0:51:23.640 --> 0:51:25.920 I gotta be honest. When Grant walked in with it, 0:51:26.040 --> 0:51:27.759 I saw it and you opened it up. I was 0:51:27.760 --> 0:51:29.759 thinking to myself, Am I going to be drinking Martin 0:51:29.800 --> 0:51:30.759 Ellie's right now? 0:51:30.880 --> 0:51:31.080 Yeah? 0:51:31.080 --> 0:51:31.400 That's what it? 0:51:31.760 --> 0:51:32.000 Right? 0:51:32.120 --> 0:51:32.920 Yeah, and I'm not. 0:51:33.040 --> 0:51:33.600 I mean, this is. 0:51:33.520 --> 0:51:34.879 Martin Ellie's the apple juice right. 0:51:34.760 --> 0:51:37.239 That we get your your kid New Year's Eve? Yeah, 0:51:37.560 --> 0:51:40.600 this is not the sparkling apple juice. This is something different. 0:51:40.640 --> 0:51:42.280 It is closer to wine for sure. 0:51:42.360 --> 0:51:44.440 So is it essentially and forgive me because I was 0:51:44.520 --> 0:51:46.440 kind of running around pouring and stuff, but so is 0:51:46.480 --> 0:51:49.160 it wine just with the alcohol pulled out one hundred percent? 0:51:49.239 --> 0:51:52.960 It's it's fully fermented grapes from California, right, that we 0:51:53.360 --> 0:51:56.439 reduce or eliminate the alcohol from and then go through 0:51:56.480 --> 0:52:01.399 the uh you know, flavor composition or formula and then 0:52:01.440 --> 0:52:04.319 carbonated up to basically a prosecco level. So it's it's 0:52:04.400 --> 0:52:07.160 really meant to replace that spark perseco level. 0:52:07.239 --> 0:52:07.479 Yep. 0:52:08.160 --> 0:52:09.239 Yeah, what does. 0:52:09.120 --> 0:52:11.759 Your consumer research told you about when people buy this 0:52:11.800 --> 0:52:14.040 and they drink it, if they drink more than they 0:52:14.080 --> 0:52:17.279 drink of the counterpart with alcohol in it? 0:52:17.400 --> 0:52:19.640 I mean, my own consumer research is telling me I 0:52:19.680 --> 0:52:23.240 drink much more of it because there's not the guilt 0:52:23.280 --> 0:52:25.040 or the shame of knowing like oh I have to 0:52:25.160 --> 0:52:28.799 be tempered or tall it like temper my consumption on 0:52:28.840 --> 0:52:32.040 this because of what I have on the horizon. So 0:52:32.080 --> 0:52:35.279 there's I think what you mentioned athletic at the top 0:52:35.320 --> 0:52:38.000 of the call. They have done such a phenomenal job 0:52:38.040 --> 0:52:42.560 on matching quality that people don't have to compromise anymore 0:52:43.040 --> 0:52:45.839 on what they want for a beer occasion. That needs 0:52:45.840 --> 0:52:48.560 to happen in the wine category, and I think there 0:52:48.600 --> 0:52:50.920 is a massive wake up call. We talked about the 0:52:51.600 --> 0:52:52.720 downtick in wine sales. 0:52:52.719 --> 0:52:53.719 Please, I'm gonna, I'm gonna. 0:52:53.760 --> 0:52:57.440 I'm gonna start pouring the rose. So what's the different 0:52:57.600 --> 0:52:58.759 same process for. 0:52:58.680 --> 0:53:01.600 The same exact process, just different grapes produced in a 0:53:01.800 --> 0:53:05.400 kind of in a rose style. You hear that clanking, 0:53:05.400 --> 0:53:07.279 that's the swing top we've got on the bottle so 0:53:07.320 --> 0:53:08.359 that you can so you. 0:53:08.280 --> 0:53:10.280 Can put a close it, pop it back in the fridge. 0:53:10.280 --> 0:53:12.560 Would you like, I'm okay, you're good, Yeah, ok I've 0:53:12.560 --> 0:53:15.080 got a drive very funny. 0:53:15.320 --> 0:53:16.799 So you close it, pop it back in the fridge, 0:53:16.800 --> 0:53:17.400 and it stays. 0:53:17.719 --> 0:53:20.600 Yes, that was one of our learnings from Like I 0:53:20.600 --> 0:53:23.480 think in terms of trying to be innovative around the 0:53:23.480 --> 0:53:25.440 wine category is like, you're never going to see a 0:53:25.480 --> 0:53:27.319 champagne bottle with a swing top on it or a 0:53:27.320 --> 0:53:28.080 proscco bottle. 0:53:28.080 --> 0:53:29.280 They're etched in tribution. 0:53:29.480 --> 0:53:33.120 This is nice to try this, and so with the 0:53:33.360 --> 0:53:36.719 addition of the swing top, we wanted to really do preservation. 0:53:37.280 --> 0:53:39.799 Can you do can you softer touch a little bit? 0:53:39.840 --> 0:53:40.879 Right? Yeah? 0:53:41.000 --> 0:53:41.320 Nice? 0:53:41.400 --> 0:53:41.840 Yeah? 0:53:41.880 --> 0:53:44.840 Are you planning to do any non carbonated versions? 0:53:44.880 --> 0:53:48.840 Absolutely? Yeah, R and D. I'll admit sparkling was more 0:53:48.880 --> 0:53:52.200 in my repertoire and our wheelhouse easier to do. 0:53:52.360 --> 0:53:53.719 I would say it's easier. 0:53:53.360 --> 0:53:55.719 To replicate or replace a sparkling. 0:53:56.200 --> 0:54:00.879 But the still wine category, I think is very It's 0:54:00.920 --> 0:54:04.720 a huge opportunity for the category if we're to nail 0:54:04.760 --> 0:54:07.160 a Chardonnay or a savingon Blanc or a pan and 0:54:07.239 --> 0:54:09.920 a war a lot of drinkers out there, and you 0:54:09.960 --> 0:54:13.040 talked about who is this consumer, It is definitely the 0:54:13.360 --> 0:54:15.480 wine consumer that is self moderating. 0:54:15.760 --> 0:54:20.960 What I'm also finding is bars, restaurants, parties, social events, 0:54:21.040 --> 0:54:26.040 professional events have increasingly non alcoholic options that are not soda. 0:54:26.200 --> 0:54:29.719 Huge real estate being being garnered by the mocktails and 0:54:30.320 --> 0:54:33.880 commanding quite a price. But I think it's about, you know, 0:54:34.080 --> 0:54:38.880 more options for inclusive occasions, making sure that everyone is 0:54:39.480 --> 0:54:44.759 able to participate and not feeling sheepish or needing to 0:54:45.080 --> 0:54:47.799 you go with the line in a Seltzer water as 0:54:47.840 --> 0:54:48.480 the chameleon. 0:54:48.640 --> 0:54:50.680 All right, So you introduce this October? 0:54:50.840 --> 0:54:51.640 Is that October? 0:54:51.680 --> 0:54:53.920 All right? So I know this, but we're bloomberg. So 0:54:53.960 --> 0:54:56.560 give us any indications of the kind of demand you're 0:54:56.600 --> 0:54:58.360 anticipating or maybe already seeing. 0:54:59.160 --> 0:55:01.440 So in eighteen years in wine and this would be 0:55:01.480 --> 0:55:05.440 the fifth startup for me, I've never seen something like this. 0:55:05.960 --> 0:55:07.759 And to your point, October, we didn't have a lot 0:55:07.800 --> 0:55:10.160 of data behind us. Yeah, but we have gotten so 0:55:10.400 --> 0:55:15.279 many fortunate retail programs in anticipation of dry January. Big 0:55:15.280 --> 0:55:21.120 moment and timing could not be you know, we're blowing 0:55:21.160 --> 0:55:24.160 aware goals and obviously the proof will be in the 0:55:24.200 --> 0:55:27.480 pudding with repeat business and velocity. But the early adoption 0:55:27.560 --> 0:55:28.120 has been through the. 0:55:28.160 --> 0:55:32.319 Roof funding, self funded, raised money, have you done it? 0:55:32.600 --> 0:55:34.880 Raised? A fair bit of money, went to the outside 0:55:34.880 --> 0:55:37.400 for the first time, but John and I actually self funded. 0:55:37.400 --> 0:55:41.719 The initial wine is very capital intensive business. You guys 0:55:41.880 --> 0:55:45.600 likely know this, but we feel like the. 0:55:45.600 --> 0:55:49.240 Category is not a fad. This thing is here to stay. 0:55:49.440 --> 0:55:50.560 It's going to keep growing. 0:55:50.960 --> 0:55:53.279 The retailers are now starting to get behind it, which 0:55:53.320 --> 0:55:54.480 is a massive win. 0:55:55.120 --> 0:55:58.080 Well, Happy Drid January. Yes, promised to come back soon 0:55:58.120 --> 0:56:00.640 and listen. Thos are going grant having co founder and 0:56:00.680 --> 0:56:03.560 chief executive officer of Libby Wines. This is Bloomberg. 0:56:05.600 --> 0:56:09.239 This is the Bloomberg Business Week Podcast. Listen live each 0:56:09.280 --> 0:56:12.680 weekday starting at two pm Eastern on Applecarplay and Android 0:56:12.719 --> 0:56:15.760 Auto with the Bloomberg Business App. You can also listen 0:56:15.840 --> 0:56:19.080 live on Amazon Alexa from our flagship New York station. 0:56:19.640 --> 0:56:22.320 Just say Alexa play Bloomberg eleven thirty. 0:56:23.320 --> 0:56:25.839 How does a trip to Banff to do some gondola 0:56:26.200 --> 0:56:30.360 riding or cycling sound or visiting fjords in Alaska to 0:56:30.440 --> 0:56:32.520 gaze upon Glacier's wales and sea lions. 0:56:32.640 --> 0:56:36.320 It sounds amazing. How about also maybe a whitewater rafting 0:56:36.360 --> 0:56:39.720 trip in Montana. Got to say yep, sign us all 0:56:39.920 --> 0:56:42.520 up for all of it, and you can experience all 0:56:42.600 --> 0:56:45.799 of them courtesy of a company known as Pursuit. The 0:56:45.800 --> 0:56:49.600 company calls itself a pure play hospitality and attractions company. 0:56:49.800 --> 0:56:53.040 David Berry is president and CEO of Pursuit. He stopped 0:56:53.040 --> 0:56:55.799 by our studio to talk about the demand and the 0:56:55.840 --> 0:56:57.760 growing demand for outdoor travel. 0:56:57.960 --> 0:57:01.239 What's unique about our business in sites, seeing and attractions 0:57:01.239 --> 0:57:04.279 and hospitality is everyone in the world loves a beautiful view. 0:57:04.360 --> 0:57:05.480 Doesn't matter where you're from. 0:57:05.640 --> 0:57:08.239 It doesn't matter what language you speak, doesn't matter whether 0:57:08.280 --> 0:57:10.520 you can ski or golf, or you have any athletic 0:57:10.600 --> 0:57:11.399 ability at all. 0:57:11.560 --> 0:57:13.560 All you have to do is love a beautiful view. 0:57:13.800 --> 0:57:16.919 Well, it's interesting, what does the environment the you know, 0:57:17.120 --> 0:57:19.880 for tourism. We've talked about coming off the pandemic. All 0:57:19.880 --> 0:57:21.760 people want to do is experience things and go out 0:57:21.800 --> 0:57:22.920 and do things. They want to get out of their 0:57:22.960 --> 0:57:25.400 house to do things. Is that continuing or give us 0:57:25.400 --> 0:57:27.400 some perspective versus what you've seen over the last couple 0:57:27.440 --> 0:57:27.800 of years. 0:57:27.880 --> 0:57:30.360 Well, what's everyone looking for? And then my opinion, they're 0:57:30.400 --> 0:57:34.040 looking for authenticity. So no one goes to Iceland to 0:57:34.160 --> 0:57:38.800 experience Alaska. They're going for very unique things around the world, 0:57:38.840 --> 0:57:41.720 and so buy less stuff, do more things. 0:57:42.120 --> 0:57:44.560 Life is precious. This is no dress rehearsal Right. 0:57:44.560 --> 0:57:46.800 You might as well go and see and do the 0:57:46.840 --> 0:57:49.680 amazing things that you would like to do. And that's 0:57:49.760 --> 0:57:52.760 really what makes our business model work, and that you know, 0:57:52.800 --> 0:57:55.080 we're in a rather unique position. We have a ten 0:57:55.160 --> 0:57:58.040 year head start, a ten year track record of great 0:57:58.120 --> 0:58:01.480 investments that have driven shareholder value, and it's a way 0:58:01.520 --> 0:58:04.720 for us to position ourselves into the future, continue to 0:58:04.760 --> 0:58:08.840 grow and think of iconic, unforgettable and inspiring experiences. 0:58:08.880 --> 0:58:11.960 So, David, the demand though, continues at the pace you've 0:58:11.960 --> 0:58:13.480 seen over the last year or two, like, give us 0:58:13.520 --> 0:58:15.200 an idea in terms of what consumers are up to. 0:58:15.880 --> 0:58:17.160 I think consumers are excited. 0:58:17.400 --> 0:58:20.919 And yes, there are certain segments of the consumer base 0:58:20.960 --> 0:58:23.400 that are more pro sensitive, but in the markets that 0:58:23.440 --> 0:58:26.160 we're dealing with, folks are ready to go and spend 0:58:26.240 --> 0:58:29.120 money on great experiences, and you've just got to work 0:58:29.160 --> 0:58:31.480 hard to deliver to people's expectations. 0:58:32.120 --> 0:58:36.640 Fourteen attractions around the world, twenty eight lodges, fifty one 0:58:37.240 --> 0:58:40.520 restaurants and other dining experience. You've got fifty one retail stores. 0:58:40.920 --> 0:58:42.880 How do they all come together to offer sort of 0:58:42.880 --> 0:58:46.160 a package. Because when I see some of these experiences, 0:58:46.200 --> 0:58:47.959 I say, Okay, this is a good one off here. 0:58:48.240 --> 0:58:51.000 But how do you get to control the entire experience 0:58:51.040 --> 0:58:52.040 with these assets? 0:58:52.440 --> 0:58:55.080 So think of pursuit as a house of brands, not 0:58:55.160 --> 0:58:59.000 a branded house. So think of human behavior. And you 0:58:59.040 --> 0:59:01.760 had mentioned Banff. Might you know you're planning a cycling 0:59:01.800 --> 0:59:04.200 trip to BAMF with your buddies. Sounds good, you're planning 0:59:04.200 --> 0:59:06.800 there common so he knows Tim a little bit, do 0:59:06.880 --> 0:59:10.280 some searching and upcoms, and you search BAMF as a destination, 0:59:10.680 --> 0:59:12.320 and then the next thing you enter in the search 0:59:12.360 --> 0:59:15.600 bar is great things to do in bamp Damn Up 0:59:15.600 --> 0:59:18.880 it comes Lake Minlwauka, boat tours or the BAMF gondola 0:59:19.040 --> 0:59:20.520 or any of our different experiences. 0:59:20.840 --> 0:59:21.680 So we're lucky. 0:59:21.720 --> 0:59:24.200 We get to surf behind the power of the destination, 0:59:24.720 --> 0:59:26.640 which drives search results and drive. 0:59:26.760 --> 0:59:29.280 But all those things are your assets that you mentioned. Correct, Okay? 0:59:29.440 --> 0:59:31.760 So I want to bring in Elizabeth Sedrin's comment from 0:59:31.760 --> 0:59:32.640 a little earlier today. 0:59:32.640 --> 0:59:34.000 She was one of our producers. 0:59:34.000 --> 0:59:34.800 Here's one of our producers. 0:59:34.840 --> 0:59:36.920 She said, are they trying to compete with a company 0:59:36.960 --> 0:59:39.000 like Veil Resorts? And I said to myself, Oh, I 0:59:39.040 --> 0:59:41.080 said to Elizabeth, I don't think they are. But now 0:59:41.160 --> 0:59:43.520 after hearing you say that, you remind me of what 0:59:43.520 --> 0:59:45.640 happened over the last twenty years. And I think Elizabeth 0:59:45.680 --> 0:59:49.880 was right when Vale Resorts bought Colorado Mountain Express and 0:59:49.920 --> 0:59:53.160 now rebranded at Epic Express, or especially Sports Ventures, the 0:59:53.320 --> 0:59:55.560 chain of rental shops where you rent skis and stuff, 0:59:55.600 --> 0:59:58.720 so then they control every different aspect of a tourist 0:59:58.760 --> 0:59:59.600 dollar that comes out. 1:00:00.080 --> 1:00:02.720 So I spent three decades in skiing in a former life, 1:00:03.000 --> 1:00:04.480 and I can tell you the one thing that's very 1:00:04.480 --> 1:00:07.720 different in our world is we're not getting involved in skiing. 1:00:07.800 --> 1:00:09.920 So I don't need snow and I don't need anyone 1:00:09.960 --> 1:00:11.960 with an ability to ski. So all you have to 1:00:11.960 --> 1:00:14.800 do to enjoy our experiences is enjoy a beautiful view. 1:00:15.240 --> 1:00:18.480 And so we have a simple strategy refresh, build, buy, 1:00:19.000 --> 1:00:22.520 So refresh existing experiences, build things that are unique and 1:00:22.560 --> 1:00:25.720 connected for guests to visit and enjoy, and then buy 1:00:25.760 --> 1:00:27.480 things that we think fit our platform. 1:00:27.720 --> 1:00:29.600 But the idea is you want a customer to go 1:00:29.640 --> 1:00:33.080 to one of your locations or one of your experiences 1:00:33.120 --> 1:00:34.920 and hopefully continue to do other experience. 1:00:34.920 --> 1:00:38.000 It's correct, Yeah, you want a guest to really think 1:00:38.000 --> 1:00:40.920 about when they're visiting a destination. How do they connect 1:00:40.960 --> 1:00:43.880 with what is authentic in that destination and what is 1:00:44.000 --> 1:00:46.360 unique and different because so much of the world is 1:00:46.400 --> 1:00:49.640 the same when you travel, So if you can create uniqueness, 1:00:49.920 --> 1:00:52.520 a guest then enjoys going from one experience to another. 1:00:52.600 --> 1:00:55.480 Okay, not apples to apples. Our Charlie Pellett is a 1:00:55.480 --> 1:00:57.840 big cruiser, a lot of cruise ships. We talked to 1:00:58.240 --> 1:01:00.840 the Carnival CEO. I'm like, I'm saying, not apples to apples. 1:01:00.880 --> 1:01:04.000 But there are often repeat customers and I've done pieces 1:01:04.000 --> 1:01:06.120 where I'm on a cruise ship and they're like, yeah, 1:01:06.120 --> 1:01:08.280 this is my thirteenth cruise or my twentieth cruise. If 1:01:08.320 --> 1:01:10.200 you will, how many of the people who do some 1:01:10.440 --> 1:01:14.240 one of your experiences come back and do others. 1:01:14.400 --> 1:01:16.480 I do think we have less frequency than the cruise 1:01:16.520 --> 1:01:20.200 industry in terms of that really devoted, participative type visitor. 1:01:20.560 --> 1:01:22.560 But what we do have is folks that really enjoy 1:01:22.600 --> 1:01:25.080 an experience, say in the Canadian Rockies, and the next 1:01:25.160 --> 1:01:27.480 year they're looking to go to Alaska and experience that, 1:01:28.080 --> 1:01:30.920 or they've somehow gotten onto the Pursuit website through a 1:01:31.000 --> 1:01:33.000 variety of different things, and they realize we have an 1:01:33.040 --> 1:01:37.080 amazing attraction in Iceland called sky Lagoon, And so they 1:01:37.120 --> 1:01:39.680 weren't really planning to go to Iceland through US, but 1:01:39.680 --> 1:01:41.280 all of a sudden they're going to Iceland and have 1:01:41.320 --> 1:01:44.080 an experience that they know, Wow, the BAF Gondola is 1:01:44.120 --> 1:01:46.680 so much fun. I'm pretty sure sky Lagoon's going to 1:01:46.680 --> 1:01:46.960 be fun. 1:01:47.280 --> 1:01:49.960 Do people know that the Jasper Skytram or that BAMF 1:01:49.960 --> 1:01:51.840 Gondola is owned by Pursuit? 1:01:52.440 --> 1:01:53.439 Some do, some don't. 1:01:53.480 --> 1:01:56.600 We brand everything sort of an experience by Pursuit, but 1:01:56.640 --> 1:01:59.240 we want the experience in Jasper to be very unique 1:01:59.240 --> 1:02:00.400 and connected to Asper. 1:02:00.480 --> 1:02:01.960 Jasper is a very unique place. 1:02:02.320 --> 1:02:04.600 If you told a citizen in Jasper that we want 1:02:04.640 --> 1:02:06.400 you to be like BAMF, you know they would come 1:02:06.440 --> 1:02:09.120 for you with the pike and the muskets. Right, It's 1:02:09.120 --> 1:02:12.240 not what they want. They want their experience in Jasper 1:02:12.280 --> 1:02:16.200 to be truly unique. So uniqueness and authenticity is. 1:02:16.160 --> 1:02:17.040 The order of the day. 1:02:17.240 --> 1:02:22.200 Is expansion of where you offer up new locations, David, 1:02:22.360 --> 1:02:24.600 are you thinking very carefully about You want to make 1:02:24.640 --> 1:02:27.880 sure that while it's a different experience, the level is 1:02:27.960 --> 1:02:30.760 the same, so that people understand the Pursuit brand stands 1:02:30.800 --> 1:02:31.280 for something. 1:02:31.480 --> 1:02:34.000 Yeah, I can cover our criteria for acquisition and growth 1:02:34.040 --> 1:02:37.320 really quickly. So one, is it iconic, is it unforgettable? 1:02:37.400 --> 1:02:40.800 Is it inspiring? Does it have perennial demand? Are there 1:02:40.840 --> 1:02:44.680 big barriers to entry? Is it an ebitdal margin that's attractive? 1:02:44.720 --> 1:02:47.520 So we run at thirty percent ebadal margin before public 1:02:47.560 --> 1:02:49.000 company costs, which a great margin. 1:02:49.520 --> 1:02:51.080 Do we want to go down to fourteen? Well? No, 1:02:51.160 --> 1:02:52.320 it's got to be something. 1:02:52.040 --> 1:02:54.200 That we think is going to be able to be improved. 1:02:54.440 --> 1:02:56.400 And then finally we look for good neighborhoods. What I 1:02:56.440 --> 1:03:00.280 mean by that is Gudrula law, good property protection, good 1:03:00.320 --> 1:03:03.280 places to do business in that our investments will be 1:03:03.280 --> 1:03:04.440 well protected. 1:03:04.200 --> 1:03:07.240 Where you thinking about expanding to or buying assets in. 1:03:07.680 --> 1:03:10.320 So firstly, I mean we're very lucky and that we've 1:03:10.320 --> 1:03:12.919 identified a couple of growth leavers. One is internally within 1:03:12.960 --> 1:03:15.080 the business where we can invest and make things better, 1:03:15.400 --> 1:03:17.800 and we've put about two hundred million dollars aside for 1:03:17.840 --> 1:03:20.440 that growth over between now and twenty twenty nine. But 1:03:20.520 --> 1:03:22.520 on the acquisition side, what are we looking for. It's 1:03:22.840 --> 1:03:25.040 got to be iconic, it's got to be unforgettable, got 1:03:25.040 --> 1:03:28.560 to be inspiring. So Dona's pretty iconic place, a good example. 1:03:28.600 --> 1:03:30.640 Well, what could you acquire in a place like that 1:03:30.640 --> 1:03:32.160 that would add to your portfolio? 1:03:32.360 --> 1:03:34.000 You know, I'm not sure I would say even if 1:03:34.040 --> 1:03:38.640 I knew, but I think the opportunities we have are 1:03:38.680 --> 1:03:42.840 really global in nature. We're very concentrated North America Q 1:03:42.880 --> 1:03:45.720 two Q three, So the benefit of being doing something 1:03:45.760 --> 1:03:49.160 counter seasonal if we could. You know, we're very weighted 1:03:49.200 --> 1:03:51.960 to the calendar of Q three in North America, so 1:03:52.000 --> 1:03:55.280 we've got opportunity counter seasonally and that leads you to 1:03:55.320 --> 1:03:57.880 different locations around the world. So yeah, if we could 1:03:57.880 --> 1:03:59.520 be busy December to April, that'd be even better. 1:03:59.600 --> 1:04:02.800 Soolobal acquisitions at some point absolutely. 1:04:02.880 --> 1:04:05.880 Now, I mean the benefit of this transformation of the 1:04:05.920 --> 1:04:08.640 sale of GS and the repositioning of Pursuit and our 1:04:08.680 --> 1:04:11.600 new clean, strong balance sheet is guess what, We've got 1:04:11.600 --> 1:04:14.080 a great pipeline, we've got a great plan, we've got 1:04:14.080 --> 1:04:17.120 a great strategy, and now we've got great drive powder 1:04:17.160 --> 1:04:17.920 to go do somethings. 1:04:17.920 --> 1:04:18.600 So we're excited. 1:04:18.640 --> 1:04:21.760 So I'm going to say yes, global acquisitions, man, So 1:04:21.880 --> 1:04:24.080 talk to us about pricing. David. I'm just curious, and 1:04:24.120 --> 1:04:25.640 I know we talked a little bit in the break 1:04:25.640 --> 1:04:28.000 before we got back here live on air, but I'm 1:04:28.040 --> 1:04:31.000 just curious, what is give us an idea of range 1:04:31.120 --> 1:04:32.960 kind of things. So we have an idea. 1:04:33.080 --> 1:04:35.280 It really depends on the experience. So we have some 1:04:35.360 --> 1:04:39.280 attraction products that are very accessible for people, and you 1:04:39.320 --> 1:04:41.920 can do that based on time of day, tim how old. 1:04:41.800 --> 1:04:44.200 Are kids two and six? 1:04:44.280 --> 1:04:46.160 Let's say, all right, so you travel from the East 1:04:46.160 --> 1:04:48.240 Coast to Banff and at eight o'clock in the morning, 1:04:48.280 --> 1:04:50.320 your kids are wide away because it's ten o'clock New 1:04:50.400 --> 1:04:52.720 York time, and they're bouncing around the hotel room looking 1:04:52.760 --> 1:04:55.400 for something to do. You, my friend, are a prime 1:04:55.520 --> 1:04:58.280 character to take a breakfast program and a gondola ride 1:04:58.280 --> 1:04:58.919 with little kids. 1:04:59.000 --> 1:05:01.040 Yeah, that sounds about it like Carol, maybe a little 1:05:01.040 --> 1:05:02.120 more relaxed. 1:05:03.720 --> 1:05:05.320 As Yeah. 1:05:05.680 --> 1:05:08.160 So there's the sleeping crowd, and there's the early morning crowd, 1:05:08.200 --> 1:05:09.960 my friend, and you're part of the early morning crowd. 1:05:10.040 --> 1:05:13.120 So there's a good example of your pricing and providing 1:05:13.160 --> 1:05:16.080 an experience that's well suited to someone at that particular 1:05:16.120 --> 1:05:17.240 time of day is part of. 1:05:17.200 --> 1:05:19.200 The business strategy to make sure that you've got different 1:05:19.200 --> 1:05:19.840 price points. 1:05:20.160 --> 1:05:22.800 You bet and your price dynamically, and you also work 1:05:22.840 --> 1:05:25.240 hard to provide value. So we get asked all the time, 1:05:25.240 --> 1:05:27.760 you're going to continue to take price. Real question is 1:05:27.760 --> 1:05:30.400 are you going to continue to improve experiences? Because when 1:05:30.400 --> 1:05:33.760 you improve experiences, you have pricing power. It's not just 1:05:33.840 --> 1:05:35.720 taking price and making everybody angry. 1:05:36.280 --> 1:05:38.600 Work something on sale or offering a discount or something 1:05:38.640 --> 1:05:38.880 like that. 1:05:39.160 --> 1:05:42.400 You're always going to have channels a distribution where you're potentially, 1:05:42.440 --> 1:05:44.000 if you have a time of day that you want 1:05:44.000 --> 1:05:46.680 to move more folks into, you're going to price that advantageously. 1:05:47.120 --> 1:05:49.760 But can you create an amazing product that people are 1:05:49.760 --> 1:05:51.640 going to feel comfortable paying a fair price. 1:05:51.440 --> 1:05:55.120 For I I You said earlier that the a big 1:05:55.160 --> 1:05:57.840 difference between you and the ski industry and the big 1:05:57.880 --> 1:06:00.400 conglomerates out there now is that you're not focused at 1:06:00.400 --> 1:06:02.640 all on skiing. Does that make you less concerned about 1:06:02.640 --> 1:06:03.480 climate change? 1:06:03.720 --> 1:06:05.960 Well, I think the benefit for us is where we're 1:06:05.960 --> 1:06:09.040 not focused on any particular athletic skill that you need 1:06:09.080 --> 1:06:11.400 to enjoy a product. All you need to do is 1:06:11.480 --> 1:06:15.120 enjoy a beautiful view. So in our summer destinations, climate 1:06:15.200 --> 1:06:18.640 change is less of a factor, but we're very sensitive 1:06:18.680 --> 1:06:20.600 to We have one planet, and we want to make 1:06:20.640 --> 1:06:22.600 sure that we do everything we can to protect this. 1:06:22.640 --> 1:06:24.240 Planet and be mindful. 1:06:24.320 --> 1:06:26.120 And if you go to our website, you'll see a 1:06:26.160 --> 1:06:28.760 thing called Promise to Place where we talk about sustainability, 1:06:29.040 --> 1:06:31.600 respect and community. Those are the three things we spend 1:06:31.680 --> 1:06:36.000 a lot of time on. We report very candidly. Sometimes 1:06:36.000 --> 1:06:38.760 it makes us uncomfortable, but we tell the truth about 1:06:38.760 --> 1:06:41.160 what we're doing and what's working and what's not working, 1:06:41.200 --> 1:06:42.640 and what we're going to do to make it better. 1:06:43.520 --> 1:06:45.960 So I am curious in terms of running a business, 1:06:47.200 --> 1:06:50.600 labor like hospitality, we talk about it a lot, and 1:06:50.680 --> 1:06:53.360 access to enough workers. Do you guys have all the 1:06:53.360 --> 1:06:54.280 workers that you need? 1:06:54.640 --> 1:06:55.040 We do. 1:06:55.240 --> 1:06:58.680 And what makes that happen is people want to voice. 1:06:59.280 --> 1:07:01.120 They want to work in a place where their opinion 1:07:01.160 --> 1:07:05.680 is respected and heard. They want to understand what is 1:07:05.720 --> 1:07:09.640 the greater purpose of this organization. We do multiple team 1:07:09.680 --> 1:07:12.160 member surveys in a year. The amount of comments we 1:07:12.200 --> 1:07:15.280 get are incredible. I do a live town hall broadcast 1:07:15.320 --> 1:07:19.120 every month where people can ask questions anonymously, and they do. 1:07:19.600 --> 1:07:22.520 And so it's all those things that work to create culture. 1:07:22.680 --> 1:07:25.440 So a culture of respect, a culture of innovation, a 1:07:25.440 --> 1:07:29.120 culture of great leadership and genuine interest in others will 1:07:29.240 --> 1:07:31.320 drive great hospitality experiences. 1:07:31.560 --> 1:07:35.240 Okay, what's an experiential trend that you're seeing happen right 1:07:35.280 --> 1:07:37.760 now that you haven't tapped into yet, Like, what what 1:07:37.840 --> 1:07:39.760 do you see out there? Like I want to go 1:07:39.880 --> 1:07:41.840 do that because that looks really cool. I've never done 1:07:41.840 --> 1:07:43.000 it before. We don't offer it. 1:07:44.000 --> 1:07:46.720 I think that there are things that involve winter product 1:07:46.880 --> 1:07:51.640 in exotic destinations that people are experimenting with, and so 1:07:51.720 --> 1:07:53.800 that might be any gluo in the northern lights, and 1:07:54.160 --> 1:07:56.440 you know in Iceland at sky Lagoon, we will get 1:07:56.440 --> 1:07:58.080 complaints every once in a while, like I came for 1:07:58.160 --> 1:07:59.720 the northern lights and they did not appear. 1:07:59.800 --> 1:08:00.680 Can you make that happen? 1:08:00.760 --> 1:08:01.560 Nay, Mother Nature? 1:08:01.600 --> 1:08:04.200 You just smile and you know, I'm only God's assistant. 1:08:04.280 --> 1:08:06.880 I can only do so much. But the benefit of 1:08:07.440 --> 1:08:10.160 looking at how do you continue to innovate? And we're 1:08:10.280 --> 1:08:14.360 lucky we work in a vibrant, relentless, restless culture that 1:08:14.480 --> 1:08:17.200 always wants to innovate, and so we have teams. Every 1:08:17.280 --> 1:08:19.719 day they're waking up with a great idea. So there's 1:08:19.760 --> 1:08:21.760 not one thing, specifically, tim that I would say. I 1:08:21.760 --> 1:08:23.840 would just say There's a thousand things the team's working 1:08:23.840 --> 1:08:25.320 on right now that are exciting. 1:08:25.600 --> 1:08:27.960 Starting out as a ski instructor, it worked out pretty well. 1:08:28.640 --> 1:08:29.519 You're pretty happy, right. 1:08:29.560 --> 1:08:31.479 I'm pretty like somehow I made it here, I don't 1:08:31.520 --> 1:08:33.599 know on your show, so I'm could cross my fingers 1:08:33.600 --> 1:08:35.000 and try not to say anything dumb. 1:08:34.920 --> 1:08:38.160 Well really fun. Let us know has the year progresses, 1:08:38.200 --> 1:08:39.240 and let us know how things are going. 1:08:39.280 --> 1:08:40.200 You bet, Thank you so much. 1:08:40.320 --> 1:08:42.240 Love to hear back from you. David Barry, He's president 1:08:42.280 --> 1:08:45.599 and CEO of Pursuit, joining us right here in studio. 1:08:52.320 --> 1:08:55.960 This is the Bloomberg Business Week Podcast. Listen live each 1:08:55.960 --> 1:08:59.000 weekday starting at two pm Eastern on Apple, Cofflay, and 1:08:59.000 --> 1:09:02.040 Android Otto with the Bloomberg Business App. You can also 1:09:02.160 --> 1:09:05.800 listen live on Amazon Alexa from our flagship New York station, 1:09:06.360 --> 1:09:09.000 Just say Alexa play Bloomberg eleven thirty. 1:09:10.240 --> 1:09:12.360 Well, as all of you know, Monday is Martin Luther 1:09:12.439 --> 1:09:15.599 King Junior Day, a federal holiday that celebrates the life 1:09:15.600 --> 1:09:18.320 and legacy of Martin Luther King Junior. 1:09:18.880 --> 1:09:21.479 Right, And just a reminder, of course, Martin Luther King 1:09:22.160 --> 1:09:24.439 Day also happens to fall on January twentieth, which is 1:09:24.479 --> 1:09:27.240 the day that President elect Donald Trump will be inaugurated 1:09:27.280 --> 1:09:30.080 this Monday. We Tim and I will be doing a 1:09:30.080 --> 1:09:33.920 special edition of Bloomberg BusinessWeek that afternoon looking at the 1:09:33.960 --> 1:09:37.880 new incoming administration and all the policies that may come down. 1:09:38.320 --> 1:09:40.080 So we want to get into that and more with 1:09:40.120 --> 1:09:45.000 our next guest, who has a certain very personal story 1:09:45.040 --> 1:09:47.800 and attachment of course to Martin Luther King Day. We 1:09:47.840 --> 1:09:50.719 are joined by Reverend doctor Bernice King. She's the chief 1:09:50.720 --> 1:09:53.280 executive officer of the Martin Luther King Junior Center for 1:09:53.360 --> 1:09:57.160 Nonviolent Social Change, which is also known as the King Center. 1:09:57.520 --> 1:10:00.320 She is the daughter of Martin Luther King, Junior and 1:10:00.320 --> 1:10:02.800 her mom, Coretta Scott King, founder of the King Center. 1:10:02.840 --> 1:10:06.280 Doctor King, so nice to have you here with us. 1:10:06.560 --> 1:10:09.679 You know, Monday for many it's a holiday. Well, nice 1:10:09.720 --> 1:10:11.800 to have you here. For many more, it's also a 1:10:11.840 --> 1:10:15.920 reminder of our difficult past around race relations and discrimination. 1:10:16.560 --> 1:10:19.479 What does the day mean to you? Honoring your dad? 1:10:22.160 --> 1:10:27.960 Well, it's an opportunity, obviously for us to not just 1:10:28.479 --> 1:10:33.320 commemorate his life, but to really look further into his teachings. 1:10:34.600 --> 1:10:37.040 He was not just a civil rights leader, he was 1:10:37.040 --> 1:10:41.200 a teacher. He left us a blueprint as to how 1:10:41.240 --> 1:10:44.639 to create a just, humane, equitable, and peaceful world. 1:10:45.120 --> 1:10:46.320 And every year. 1:10:47.960 --> 1:10:50.240 One of the things that I encourage is that we 1:10:50.320 --> 1:10:53.920 study him more because he spoke about things that we 1:10:54.160 --> 1:10:58.439 as a nation and world needed to do to fight 1:10:58.479 --> 1:11:01.600 against what he saw as a trip with poverty, racism, 1:11:02.200 --> 1:11:06.360 and militarism as a threat to our humanity. And so 1:11:06.520 --> 1:11:08.960 here we are once again this year, and as we 1:11:09.120 --> 1:11:10.400 inaugurate a new president. 1:11:10.439 --> 1:11:14.400 Those teachings don't change, they stay the same. What we 1:11:14.479 --> 1:11:14.880 have to. 1:11:14.840 --> 1:11:18.280 Do is to connect to them and to connect to 1:11:18.320 --> 1:11:20.600 the spirit of that movement so we can continue to 1:11:20.640 --> 1:11:22.320 move our nation and world forward. 1:11:22.720 --> 1:11:24.559 I was going to ask you just to follow up. 1:11:24.640 --> 1:11:26.760 You said, you know, your dad leaving us a blueprint. 1:11:26.800 --> 1:11:29.800 How would you think he's doing how we are doing 1:11:29.840 --> 1:11:31.600 today with that blueprint? 1:11:33.120 --> 1:11:35.680 Well, you know, he said to us, and where do 1:11:35.720 --> 1:11:36.400 we go from here? 1:11:36.520 --> 1:11:39.559 Chaos the community in nineteen sixty seven, the book that 1:11:40.000 --> 1:11:46.000 he published then that we must find a way to 1:11:46.120 --> 1:11:51.799 live together as brothers, and he meant humanity as brothers 1:11:51.800 --> 1:11:55.120 and sisters, or together we would be forced to perish 1:11:55.240 --> 1:11:55.959 as foods. 1:11:57.240 --> 1:12:01.040 And I think we've not found the way to do that. 1:12:01.200 --> 1:12:05.559 I think he further divided around different ideologies instead of 1:12:05.640 --> 1:12:09.800 trying to spend time learning in spite of our differences. 1:12:10.120 --> 1:12:11.439 How do we live together? 1:12:11.600 --> 1:12:15.360 How do we create a coexistence where we don't co 1:12:15.400 --> 1:12:17.080 annihilate one another? 1:12:17.400 --> 1:12:17.600 You know? 1:12:17.720 --> 1:12:23.280 How do we create a world where everyone has decent 1:12:23.320 --> 1:12:26.840 and affordable housing and access to healthcare? 1:12:27.120 --> 1:12:27.320 You know? 1:12:27.400 --> 1:12:30.479 How do we ensure that people who may end up 1:12:30.520 --> 1:12:33.280 in the homeless population, how do we ensure that that 1:12:33.400 --> 1:12:36.639 is short lived and we create a pathway to people 1:12:36.680 --> 1:12:42.519 to reclaim their lives. How do we create a fair 1:12:42.600 --> 1:12:45.800 distribution of wealth in this nation? He talked about having 1:12:45.800 --> 1:12:48.920 a radical redistribution of wealth. He didn't talk about it 1:12:48.960 --> 1:12:51.799 in the sense that we just have to remove wealth 1:12:51.800 --> 1:12:54.680 from someone else, but we have to figure out how 1:12:54.720 --> 1:12:58.439 do we balance our economy so that people can have 1:12:58.680 --> 1:13:02.360 enough to do well. And then, of course he talked 1:13:02.400 --> 1:13:05.320 about how do we respect who we are from different 1:13:05.320 --> 1:13:10.639 cultures and different backgrounds. We'll never all agree on everything, 1:13:10.960 --> 1:13:14.000 and will never all like each other, We'll never all 1:13:14.080 --> 1:13:18.360 think alike, but we certainly can spend time learning how 1:13:18.400 --> 1:13:21.960 to live together. So that takes a lot of listening, curiosity, 1:13:22.000 --> 1:13:23.720 It takes a lot of courage, It takes a lot 1:13:23.760 --> 1:13:24.480 of humility. 1:13:25.439 --> 1:13:26.520 It takes compassion. 1:13:26.560 --> 1:13:28.439 These are all the things that he taught us through 1:13:28.439 --> 1:13:31.360 the spirit and the heart of nonviolence that he led 1:13:31.400 --> 1:13:32.120 that movement in. 1:13:32.439 --> 1:13:35.000 Well, it's that last point that I want to talk about, 1:13:35.640 --> 1:13:39.599 doctor King, because we've been talking about over the last 1:13:39.640 --> 1:13:44.519 few months the dismantling of DEI programs at many companies. 1:13:44.560 --> 1:13:47.840 If I just look at the stories that are one 1:13:47.840 --> 1:13:50.080 of our reporters, Jeff Green, has written in recent months, 1:13:50.120 --> 1:13:53.080 here's some headlines. Walmart under fire from investors for cutting 1:13:53.080 --> 1:13:57.920 DEI programs, Meta retreats from diversity and inclusion, appeasing Trump. 1:13:58.479 --> 1:14:02.440 Amazon is halting some of its diversity and inclusion programs. 1:14:02.880 --> 1:14:06.960 McDonald's walks back DEI goals in the latest corporate retreat. 1:14:07.680 --> 1:14:10.759 Other companies including Deer and more. 1:14:12.120 --> 1:14:15.360 And we talked about Corporate America, you know, did hire 1:14:15.400 --> 1:14:18.120 more black workers for a while and then it stopped. 1:14:18.560 --> 1:14:20.799 How do you like, how do you in an environment 1:14:20.840 --> 1:14:24.800 such as this where seeing things seem to not necessarily 1:14:24.840 --> 1:14:29.360 be going in that direction? How do you have optimism? 1:14:29.720 --> 1:14:33.320 Well, always have optimism because there are always people, you know, 1:14:33.680 --> 1:14:37.760 like Target and Costco and others who who choose to 1:14:38.160 --> 1:14:41.280 follow the pathway that we all know is for the 1:14:41.320 --> 1:14:44.720 best of our nation and our world. But if we 1:14:44.800 --> 1:14:48.960 don't have an inclusive economy as a nation, then we're 1:14:48.960 --> 1:14:51.440 not going to survive in the global economy. 1:14:51.920 --> 1:14:53.439 And so I think there are going to be some. 1:14:53.360 --> 1:14:56.160 Hard realities we're going to be faced with in a 1:14:56.200 --> 1:15:01.519 few years. If what those who have ought to remove 1:15:01.640 --> 1:15:04.840 DEI have done, you know. 1:15:05.120 --> 1:15:06.760 It's going to show certain results. 1:15:07.240 --> 1:15:13.639 I think it's up to certain courageous leaders to combine forces. 1:15:13.280 --> 1:15:15.080 And stand against this. 1:15:15.960 --> 1:15:17.960 It really, at the end of the day, it's really 1:15:18.040 --> 1:15:21.040 not about the language anyway, you know, It's about who 1:15:21.080 --> 1:15:23.040 we are as a people. Do we have a love 1:15:23.120 --> 1:15:27.160 centered way of leading our cultures? In corporate America, you know, 1:15:27.439 --> 1:15:31.639 in our educational institutions when we look a lot around 1:15:31.920 --> 1:15:34.799 at our different cultures, do we have everyone that's needed 1:15:35.600 --> 1:15:38.840 in terms of representation at the table. You know, whether 1:15:38.880 --> 1:15:41.080 you call it DEI, you call it representation, or you 1:15:41.120 --> 1:15:44.240 call it a belonging culture or for us, the beloved community. 1:15:44.280 --> 1:15:47.320 How do we create beloved community cultures? Because at the 1:15:47.439 --> 1:15:50.320 end of the day, it's about the outcomes. So if 1:15:50.360 --> 1:15:54.680 they remove the names, they remove what they call DEEI, 1:15:55.040 --> 1:15:59.120 But then they are still committed to getting to certain outcomes. 1:15:58.680 --> 1:15:59.960 Then maybe there's no problem. 1:16:00.240 --> 1:16:03.360 But if removing it also means that we're not going 1:16:03.439 --> 1:16:06.640 to ensure that we have cultures that reflect who we 1:16:06.800 --> 1:16:10.840 are as a nation and even as a world, then 1:16:10.920 --> 1:16:13.200 it just means those of us who practice non violence 1:16:13.240 --> 1:16:15.559 are going to have to organize and stratle our chives 1:16:15.760 --> 1:16:18.679 and come up with plans to put pressure where is needed. 1:16:18.800 --> 1:16:21.280 Doctor King, what do you think white Americans still don't 1:16:21.360 --> 1:16:23.719 understand about Black America today and what do you believe 1:16:23.760 --> 1:16:26.920 it will take to achieve true racial equality. 1:16:28.240 --> 1:16:30.679 Well, the first thing is Black America is not trying 1:16:30.680 --> 1:16:32.160 to take anything from anybody. 1:16:32.520 --> 1:16:34.920 I think that's the first thing people need to understand. 1:16:35.600 --> 1:16:39.280 There's this threat, like you know, if Black America were 1:16:39.320 --> 1:16:40.720 in charge, they will remove. 1:16:40.479 --> 1:16:42.200 Us and nothing to be further from the truth. 1:16:42.240 --> 1:16:45.639 If you study the history of our race, we've always 1:16:45.720 --> 1:16:48.759 been holistically. It doesn't mean there are exceptions in every 1:16:50.080 --> 1:16:52.920 racial grouping, but if you study as a whole, we're 1:16:53.040 --> 1:16:53.920 very forgiving people. 1:16:53.960 --> 1:16:56.080 We are very inclusive culture. 1:16:56.800 --> 1:16:59.800 We tend to stand, you know, with what is right 1:16:59.840 --> 1:17:03.439 and what is fair and what is just. And I 1:17:03.479 --> 1:17:06.799 think there's a misnomer that if we are in these roles, 1:17:06.840 --> 1:17:09.160 we may do what others do. I think there's a 1:17:09.160 --> 1:17:12.000 misnomer as to who we are that you know, we 1:17:12.200 --> 1:17:16.160 just get jobs or we get opportunities just because we're black. 1:17:16.240 --> 1:17:17.400 No, we're very qualified. 1:17:18.040 --> 1:17:20.320 If you spend any time on social media, you see 1:17:20.360 --> 1:17:22.719 the number of young children out of the black community 1:17:22.840 --> 1:17:27.200 who are finishing college and getting PhD degrees when they're 1:17:27.200 --> 1:17:28.160 not even fifteen yet. 1:17:28.200 --> 1:17:29.360 They're not even fourteen yet. 1:17:29.720 --> 1:17:35.680 So we have a very intelligent, very skilled community. And 1:17:35.720 --> 1:17:38.760 it doesn't take anything away from anybody else's community who 1:17:38.760 --> 1:17:42.920 has intelligent and skilled individuals. And so the biggest thing 1:17:43.000 --> 1:17:45.880 Daddy says a little very powerful. He said, people hate 1:17:45.920 --> 1:17:47.639 each other because they don't know each other. 1:17:47.680 --> 1:17:49.600 They don't know each other because they don't communicate with 1:17:49.600 --> 1:17:50.000 each other. 1:17:50.120 --> 1:17:53.280 They don't communicate with each other because they're separated from 1:17:53.360 --> 1:17:56.360 each other. And so as long as we keep division 1:17:56.439 --> 1:17:59.920 and separation, then the myths can continue to be the truth. 1:18:00.280 --> 1:18:02.760 So we have to find a way, as I said, 1:18:02.840 --> 1:18:05.479 to learn to live together and cross some of these 1:18:05.960 --> 1:18:10.000 boundaries and not allow whatever every other commentary may say 1:18:10.040 --> 1:18:12.960 about you know, any community to rule the day. 1:18:13.439 --> 1:18:16.000 I need to come and connect with you. I need 1:18:16.040 --> 1:18:17.000 to learn more about it. 1:18:17.240 --> 1:18:19.439 I need to spend time with you, I need to 1:18:19.479 --> 1:18:22.760 experience your culture. It doesn't mean I may embrace all 1:18:22.800 --> 1:18:25.200 of it, but I have a greater understanding of it. 1:18:25.479 --> 1:18:28.040 And I think that's what a love centered person, a 1:18:28.080 --> 1:18:31.639 compassionate person, a curious person. Right, we're doing a person 1:18:31.720 --> 1:18:34.000 more importantly, who wants to see a better world. 1:18:34.120 --> 1:18:36.040 Well, you know, we we think about We've only got 1:18:36.040 --> 1:18:37.800 about a couple of minutes left here, but we are 1:18:37.840 --> 1:18:41.960 thinking about Martin Luther King Day on inauguration Day, incoming 1:18:42.320 --> 1:18:46.200 President Donald Trump and what his administration might bring in 1:18:46.280 --> 1:18:48.519 terms of policies and what it means for Black Americans 1:18:48.520 --> 1:18:51.599 in equality in the United States. You know, we kind 1:18:51.600 --> 1:18:54.479 of get the sense that your dad, you know, tried 1:18:54.479 --> 1:18:57.960 to engage power to influence change. She seemed very pragmatic 1:18:58.040 --> 1:19:01.920 and yet took those risks. Do you think your father 1:19:01.960 --> 1:19:05.080 would try to engage with the right, the conservative right, 1:19:05.160 --> 1:19:07.439 to get them to better understand the implications of their 1:19:07.479 --> 1:19:10.120 positions or is that not even possible? And again, only 1:19:10.120 --> 1:19:11.240 about a minute and a half here. 1:19:12.000 --> 1:19:15.440 Oh, it's always possible. Non violence believes in the impossibility. 1:19:15.520 --> 1:19:19.760 Non violence actually can help overcome what seems to be impossible. 1:19:20.000 --> 1:19:21.360 So through strategy and plan. 1:19:21.439 --> 1:19:24.280 When he went to see Johnson and Johnson said, look, 1:19:24.520 --> 1:19:26.360 I've done as much as I come the civil rights 1:19:26.439 --> 1:19:28.439 Right now, I can't get the votes on voting rights. 1:19:28.600 --> 1:19:30.360 Daddy went back and said, well, we're gonna have to 1:19:30.360 --> 1:19:32.080 get him some power. We're going to have to help 1:19:32.120 --> 1:19:34.559 him figure that out. So in this administration, we got 1:19:34.560 --> 1:19:36.760 to figure out where are the connection points. You know, 1:19:36.840 --> 1:19:38.840 who are the people in the administration we might be 1:19:38.920 --> 1:19:41.800 able to have access to who may understand that can 1:19:41.920 --> 1:19:43.360 then translate the message. 1:19:43.520 --> 1:19:46.559 It's about strategy, and nonviolence helps you with that. 1:19:46.720 --> 1:19:51.120 Do you have faith in the Trump administration helping out? 1:19:51.120 --> 1:19:52.320 I have the Black community. 1:19:53.080 --> 1:19:55.760 I have faith in God, and I believe in the 1:19:55.840 --> 1:20:00.400 power of a collective conscience that is committed to freedom, 1:20:00.600 --> 1:20:01.519 justice and quality. 1:20:01.560 --> 1:20:02.920 And I believe it is possible. 1:20:02.960 --> 1:20:07.519 That's why our theme is, you know, mission Possible, protecting freedom, 1:20:07.680 --> 1:20:11.559 justice and equality. Excuse freedom, justice and democracy through the 1:20:11.560 --> 1:20:14.160 spirit of non violence three sixty five, which is Kingy 1:20:14.240 --> 1:20:16.719 and non violence is taught and demonstrated by my father. 1:20:17.000 --> 1:20:18.160 That's what I have faith. 1:20:17.960 --> 1:20:20.560 In, doctor King. Just twenty five seconds left here, What 1:20:20.560 --> 1:20:22.599 do you hope every American kind of thinks about when 1:20:22.640 --> 1:20:25.280 it comes to our country here. 1:20:25.960 --> 1:20:29.880 I want them to remember that as a humanity, we 1:20:30.040 --> 1:20:32.960 have been to these places before. Maybe not literally us, 1:20:33.200 --> 1:20:37.559 but human beings have been in difficult, challenging times. We 1:20:37.680 --> 1:20:42.080 come from those individuals, and we too have the capacity 1:20:42.439 --> 1:20:44.880 to rise to the occasion and meet the challenges and 1:20:44.920 --> 1:20:46.240 move our nation and worl for. 1:20:46.600 --> 1:20:48.720 Thank you so much for finding time for us. Our 1:20:48.720 --> 1:20:51.919 thoughts with you, certainly as we prepare for the holiday 1:20:52.040 --> 1:20:54.719 and to mark his memory and his legacy on Monday. 1:20:54.920 --> 1:20:58.120 That is Reverend Doctor Bernice King, chief executive Officer of 1:20:58.160 --> 1:21:02.080 the King Center, joining us from Atlanta. This is Bloomberg. 1:21:09.520 --> 1:21:14.360 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:21:14.479 --> 1:21:18.200 and anywhere else you get your podcasts. Listen live weekday 1:21:18.240 --> 1:21:22.240 afternoons from two to five pm Eastern on Bloomberg dot Com, 1:21:22.280 --> 1:21:26.200 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:21:26.439 --> 1:21:29.240 You can also watch us live every weekday on YouTube 1:21:29.439 --> 1:21:31.559 and always on the Bloomberg terminal