1 00:00:02,560 --> 00:00:10,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the. 2 00:00:10,240 --> 00:00:13,880 Speaker 2: Bluemberg Day BAQ podcast, available every morning on Apple, Spotify 3 00:00:13,960 --> 00:00:16,880 Speaker 2: or whatever you listen. It's Wednesday, the eleventh of June. 4 00:00:16,880 --> 00:00:17,520 Speaker 3: Here in London. 5 00:00:17,600 --> 00:00:19,040 Speaker 2: I'm Caroline Hepcare and. 6 00:00:19,000 --> 00:00:22,200 Speaker 1: I'm Stephen Carroll. Coming up today, the UK's Chancellor, Rachel 7 00:00:22,239 --> 00:00:25,280 Speaker 1: Reeves prepares to unveil her plan for hundreds of billions 8 00:00:25,320 --> 00:00:27,880 Speaker 1: of pounds of government spending and investment. 9 00:00:28,160 --> 00:00:31,640 Speaker 2: The US and China agree moves to ease trade tensions 10 00:00:31,680 --> 00:00:34,040 Speaker 2: between the world's two biggest economies. 11 00:00:34,240 --> 00:00:38,120 Speaker 1: Plus more than an academic exercise. Publishers scramble for AI 12 00:00:38,320 --> 00:00:40,519 Speaker 1: partnerships as funding drives up. 13 00:00:40,720 --> 00:00:42,840 Speaker 2: Let's start with a roundup of our top stories. 14 00:00:43,280 --> 00:00:46,280 Speaker 1: The UK's Chancellor, Rachel Reeves, will unveil plans for trillions 15 00:00:46,280 --> 00:00:48,880 Speaker 1: of pounds in public spending and a speech later today. 16 00:00:49,159 --> 00:00:51,879 Speaker 1: The Spending Review will decide the three year budgets for 17 00:00:51,920 --> 00:00:54,960 Speaker 1: all government departments and see the Chancellor potentially allocate an 18 00:00:55,000 --> 00:00:57,880 Speaker 1: extra one hundred and thirteen billion pounds she has available 19 00:00:57,880 --> 00:01:01,160 Speaker 1: for investment. She says the government is going to actively 20 00:01:01,160 --> 00:01:02,480 Speaker 1: invest to create growth. 21 00:01:03,120 --> 00:01:06,120 Speaker 4: This government is going for growth because that is the 22 00:01:06,160 --> 00:01:09,200 Speaker 4: best way to create jobs, boost wages, lift people out 23 00:01:09,240 --> 00:01:12,600 Speaker 4: of poverty, and sustainably fund our schools and our hospitals 24 00:01:12,720 --> 00:01:16,080 Speaker 4: and all the public services re rely on. And we're 25 00:01:16,120 --> 00:01:21,640 Speaker 4: doing things differently because, unlike the Tories, I don't think 26 00:01:21,640 --> 00:01:23,440 Speaker 4: that the only good thing that a government can do 27 00:01:23,520 --> 00:01:26,360 Speaker 4: is get out of the way. I believe in an 28 00:01:26,400 --> 00:01:27,280 Speaker 4: active government. 29 00:01:28,640 --> 00:01:31,480 Speaker 1: But Reeves's plans are also likely to include real terms 30 00:01:31,520 --> 00:01:35,000 Speaker 1: cuts to some departments outside of protected spending on health, 31 00:01:35,120 --> 00:01:39,399 Speaker 1: education and defense. Since taking power, Revesa's popularity ratings have 32 00:01:39,480 --> 00:01:41,840 Speaker 1: fallen to the same levels as those of former Tory 33 00:01:41,959 --> 00:01:45,440 Speaker 1: Chancellor Quasi Quarteng after his disastrous mini budget in twenty 34 00:01:45,520 --> 00:01:48,080 Speaker 1: twenty two, according to surveys from IPSOS. 35 00:01:49,040 --> 00:01:52,280 Speaker 2: Now, let's talk about Blackstone, which plans to invest as 36 00:01:52,360 --> 00:01:55,760 Speaker 2: much as five hundred billion dollars in Europe over the 37 00:01:55,800 --> 00:01:59,560 Speaker 2: next decade. The world's largest alternative asset manager is already 38 00:01:59,600 --> 00:02:03,160 Speaker 2: the law just fund manager in European real estate chairman 39 00:02:03,200 --> 00:02:06,960 Speaker 2: Steve Schwarzman has told Bloomberg the continent is becoming attractive 40 00:02:07,000 --> 00:02:08,040 Speaker 2: to investors. 41 00:02:08,400 --> 00:02:13,160 Speaker 5: They're starting to change their approach here, which we think 42 00:02:13,200 --> 00:02:18,160 Speaker 5: could result in in higher growth rates. So this has 43 00:02:18,200 --> 00:02:21,200 Speaker 5: worked out amazingly well for US. 44 00:02:21,840 --> 00:02:25,080 Speaker 2: Schwartzman also said that the UK government had been really 45 00:02:25,080 --> 00:02:28,320 Speaker 2: helpful and really focused on enabling investment. The firm has 46 00:02:28,360 --> 00:02:31,919 Speaker 2: about one hundred billion dollars invested in Britain already, making 47 00:02:31,919 --> 00:02:34,520 Speaker 2: it one of the largest foreign investors in the country. 48 00:02:35,280 --> 00:02:37,800 Speaker 1: The United States and China have agreed on a preliminary 49 00:02:37,840 --> 00:02:41,720 Speaker 1: plan to ease trade tensions. American and Chinese negotiators in 50 00:02:41,760 --> 00:02:44,440 Speaker 1: London said both sides agreed on a framework for how 51 00:02:44,480 --> 00:02:47,520 Speaker 1: to implement the consensus they reached in the prior round 52 00:02:47,560 --> 00:02:51,040 Speaker 1: of talks. Here's US Commerce Secretary Howard Lutnik speaking to 53 00:02:51,120 --> 00:02:53,160 Speaker 1: reporters after the negotiations ended. 54 00:02:54,080 --> 00:02:58,600 Speaker 6: The two largest economies in the world have reached a handshake, 55 00:02:59,240 --> 00:03:01,560 Speaker 6: right for a frame work. We're going to start to 56 00:03:01,600 --> 00:03:05,800 Speaker 6: implement that framework upon the approval of President Trump and 57 00:03:05,919 --> 00:03:09,639 Speaker 6: the Chineese will get their President Cheese approval and that's 58 00:03:09,720 --> 00:03:12,560 Speaker 6: the process. So once the President's approve it, we will 59 00:03:12,560 --> 00:03:14,000 Speaker 6: then seek to implement it. 60 00:03:15,080 --> 00:03:18,200 Speaker 1: Howard Lutnick speaking there. While full details of the agreement 61 00:03:18,280 --> 00:03:22,000 Speaker 1: haven't yet been made available, US negotiators said they absolutely 62 00:03:22,080 --> 00:03:26,080 Speaker 1: expected that issues around shipments of rare earth minerals and 63 00:03:26,200 --> 00:03:29,920 Speaker 1: magnets would be resolved. The Chinese Foreign Ministry and Ministry 64 00:03:29,919 --> 00:03:32,920 Speaker 1: for Commerce didn't immediately respond to requests for comment on 65 00:03:32,960 --> 00:03:34,320 Speaker 1: the nature of the agreement. 66 00:03:35,160 --> 00:03:38,640 Speaker 2: Meanwhile, a US federal appeals court has ruled that President 67 00:03:38,680 --> 00:03:42,080 Speaker 2: Trump can continue to enforce his global tariffs. The order 68 00:03:42,200 --> 00:03:45,480 Speaker 2: extends an earlier short term reprieve and delivers a win 69 00:03:45,600 --> 00:03:50,400 Speaker 2: for one of the administration's signature economic policies. Tuesday's order 70 00:03:50,480 --> 00:03:53,960 Speaker 2: comes a month before Trump's own night day pause on 71 00:03:54,080 --> 00:03:56,840 Speaker 2: most of his tariffs is set to expire on the 72 00:03:56,920 --> 00:04:00,920 Speaker 2: ninth of July. US tariff rates will increase rastically for 73 00:04:01,120 --> 00:04:04,840 Speaker 2: many nations, with the EU facing a fifty percent levee 74 00:04:05,120 --> 00:04:08,680 Speaker 2: if a deal can't be struck and no extension is offered. Well. 75 00:04:08,720 --> 00:04:11,760 Speaker 1: Meanwhile, the European Central Bank President Christine Leguard is warning 76 00:04:11,840 --> 00:04:15,160 Speaker 1: against the use of what she calls coercive trade policies. 77 00:04:15,440 --> 00:04:18,240 Speaker 1: She was speaking at an event in China's global uncertainty 78 00:04:18,240 --> 00:04:20,840 Speaker 1: around trade remains at an all time high. Bloomberoks team 79 00:04:20,839 --> 00:04:21,840 Speaker 1: at a BAIO has more. 80 00:04:22,360 --> 00:04:25,479 Speaker 7: Christine Legard didn't mention Donald Trump by name, but his 81 00:04:25,640 --> 00:04:29,359 Speaker 7: tariffs loomed over her speech. The ECB president told an 82 00:04:29,400 --> 00:04:32,560 Speaker 7: audience at China's Central Bank that there's no longer term 83 00:04:32,600 --> 00:04:36,400 Speaker 7: advantage to being a bully on trade. She warned against 84 00:04:36,480 --> 00:04:41,520 Speaker 7: mutually damaging protectionist policies, instead urging countries to work together. 85 00:04:42,320 --> 00:04:45,640 Speaker 7: Her comments come as a chorus of European central bankers 86 00:04:45,680 --> 00:04:49,360 Speaker 7: have been highlighting the opportunity to boost the international role 87 00:04:49,400 --> 00:04:53,599 Speaker 7: of the euro amid the upheaval in US policy. In London. 88 00:04:53,640 --> 00:04:56,720 Speaker 3: To you add a Bio Bloomberg Radio, the. 89 00:04:56,880 --> 00:05:00,680 Speaker 2: U S Secretary of State has criticized the UK, Canada, Norway, 90 00:05:00,800 --> 00:05:05,160 Speaker 2: New Zealand and Australia for imposing sanctions on two Israeli 91 00:05:05,200 --> 00:05:08,520 Speaker 2: cabinet members. In a statement, Marco Rubio said that the 92 00:05:08,560 --> 00:05:12,360 Speaker 2: move doesn't advance US led efforts to achieve a cease far. 93 00:05:12,800 --> 00:05:16,320 Speaker 2: The comments come after the countries chose to sanction Israeli 94 00:05:16,400 --> 00:05:20,919 Speaker 2: National Security Minister Ismar ben Gvir and the Finance Minister 95 00:05:21,200 --> 00:05:27,160 Speaker 2: a Bazilil Shmotrich in their personal capacity for inciting violence 96 00:05:27,240 --> 00:05:31,600 Speaker 2: against Palestinian communities last year. Smutrich suggested it may be 97 00:05:32,040 --> 00:05:36,880 Speaker 2: justified and moral to starve Garzan's while ben Vere earlier 98 00:05:36,960 --> 00:05:40,839 Speaker 2: praised violent settlers suspected of murdering a teenager in the 99 00:05:40,880 --> 00:05:42,640 Speaker 2: West Bank as quote heroes. 100 00:05:43,520 --> 00:05:46,400 Speaker 1: The mayor of Los Angeles has imposed a nighttime curfew 101 00:05:46,440 --> 00:05:50,080 Speaker 1: as officials attempt to stop vandalism and looting following protests 102 00:05:50,160 --> 00:05:53,160 Speaker 1: over immigration raids. Almost three hundred and eighty people have 103 00:05:53,160 --> 00:05:55,719 Speaker 1: been arrested in the area since the weekend, amid clashes 104 00:05:55,760 --> 00:05:59,600 Speaker 1: between police and demonstrators. Mayor Karen Bass says the restrictions 105 00:05:59,600 --> 00:06:01,640 Speaker 1: will be in force in the downtown area of the 106 00:06:01,680 --> 00:06:03,960 Speaker 1: city and will be repeated in the coming days. 107 00:06:04,480 --> 00:06:06,880 Speaker 8: So my message to you is, if you do not 108 00:06:07,080 --> 00:06:11,560 Speaker 8: live or work in downtown La, avoid the area. Law 109 00:06:11,640 --> 00:06:14,680 Speaker 8: enforcement will arrest in the visuals who break the curfew 110 00:06:15,120 --> 00:06:16,560 Speaker 8: and you will be prosecuted. 111 00:06:17,720 --> 00:06:20,520 Speaker 1: The move by LA Mayor Karen Bass comes after marines 112 00:06:20,520 --> 00:06:24,000 Speaker 1: deployed by President Trump arrived in the Los Angeles area 113 00:06:24,080 --> 00:06:28,159 Speaker 1: with orders to protect federal property and officers. California's Governor 114 00:06:28,200 --> 00:06:31,320 Speaker 1: Gavin Newsom has accused Trump of misusing his power by 115 00:06:31,360 --> 00:06:34,320 Speaker 1: mobilizing the troops and warned other states to prepare for 116 00:06:34,480 --> 00:06:35,839 Speaker 1: similar unrest. 117 00:06:36,360 --> 00:06:39,400 Speaker 2: Those are our top stories for you this morning. Let's 118 00:06:39,440 --> 00:06:41,479 Speaker 2: think about the market. Then, after a couple of days 119 00:06:41,520 --> 00:06:44,039 Speaker 2: of US China trade talks, they seem to have diffuse 120 00:06:44,120 --> 00:06:47,720 Speaker 2: some tensions, although few details actually about what the agreement 121 00:06:48,040 --> 00:06:50,800 Speaker 2: is really going to mean. Practically, stock futures for the 122 00:06:50,920 --> 00:06:52,680 Speaker 2: US are in the red on the S and P 123 00:06:52,760 --> 00:06:55,200 Speaker 2: five hundred emanies down three tenths of one percent. US 124 00:06:55,360 --> 00:06:58,359 Speaker 2: fifty futures also down four tens of one percent. This morning, 125 00:06:58,400 --> 00:07:01,920 Speaker 2: the dollar is strengthening against most currency's number of ECB 126 00:07:02,040 --> 00:07:06,320 Speaker 2: officials making a play for the euro, including the Greek 127 00:07:06,360 --> 00:07:08,560 Speaker 2: Central Bank governor Yannis Sornaras. 128 00:07:08,920 --> 00:07:10,320 Speaker 3: Also today, you've got. 129 00:07:10,120 --> 00:07:14,160 Speaker 2: The US inflation data to US rate cuts now expected 130 00:07:14,200 --> 00:07:17,720 Speaker 2: for this year. Tenure treasury yields right now trading flat 131 00:07:17,800 --> 00:07:19,760 Speaker 2: at four forty seven. Those are the market. 132 00:07:19,840 --> 00:07:20,200 Speaker 3: Stephen. 133 00:07:20,760 --> 00:07:22,840 Speaker 1: In a moment, we'll tell you what to expect from 134 00:07:22,840 --> 00:07:26,320 Speaker 1: today's UK government spending review. Plus that deals with AI 135 00:07:26,480 --> 00:07:29,120 Speaker 1: companies that are providing a new wave publishing firms to 136 00:07:29,160 --> 00:07:32,120 Speaker 1: make money. But another story that Carter II this morning, 137 00:07:32,400 --> 00:07:34,880 Speaker 1: counting down to the start of Wimbledon nineteen days away 138 00:07:35,040 --> 00:07:36,640 Speaker 1: by my rough calculation. 139 00:07:36,560 --> 00:07:38,800 Speaker 2: Yes, it's always the last week in June, first week 140 00:07:38,800 --> 00:07:39,160 Speaker 2: in July. 141 00:07:39,440 --> 00:07:43,360 Speaker 1: So Tennis present, strawberries and cream present, but not present. 142 00:07:43,800 --> 00:07:46,520 Speaker 1: Referees are well line judges. 143 00:07:46,160 --> 00:07:50,160 Speaker 2: Yeah lie yeah, Linemen and line women will not be 144 00:07:50,360 --> 00:07:54,200 Speaker 2: there in their traditional garb. It's very unusual, but it 145 00:07:54,360 --> 00:07:57,640 Speaker 2: has been something that has been coming for a number 146 00:07:57,640 --> 00:08:01,520 Speaker 2: of years. This is the fact that Sony's Hawkie is 147 00:08:01,560 --> 00:08:05,000 Speaker 2: going to be used now exclusively to decide whether the 148 00:08:05,040 --> 00:08:07,560 Speaker 2: ball is in or out. So they're going to use 149 00:08:07,560 --> 00:08:10,280 Speaker 2: twelve on court cameras for this. It's already in use 150 00:08:10,360 --> 00:08:13,320 Speaker 2: in the Australian Open, the US Open, and it has 151 00:08:13,360 --> 00:08:15,840 Speaker 2: been at Wimbledon for a long time. But now actually 152 00:08:15,880 --> 00:08:19,320 Speaker 2: the human element is going to disappear, which, yeah, it's 153 00:08:19,360 --> 00:08:21,840 Speaker 2: sort of the end of a tradition, but perhaps more 154 00:08:21,920 --> 00:08:23,440 Speaker 2: acagecy maybe yeah. 155 00:08:23,440 --> 00:08:26,080 Speaker 1: And actually there's some benefits being yielded also for a 156 00:08:26,080 --> 00:08:29,000 Speaker 1: long investment by Sony in this area of technology as well. 157 00:08:29,040 --> 00:08:32,000 Speaker 1: So interesting to see how people will feel about that. 158 00:08:32,360 --> 00:08:36,640 Speaker 1: A notable absence from the sidelines at Wimbledon this year. Well, 159 00:08:36,720 --> 00:08:38,760 Speaker 1: let's turn to our top story now and the Chancellor 160 00:08:38,760 --> 00:08:41,200 Speaker 1: of Rachel Reeves will deliver the government's spending Review this 161 00:08:41,280 --> 00:08:44,760 Speaker 1: afternoon with detailed plans for public spending until the end 162 00:08:44,920 --> 00:08:47,200 Speaker 1: of the decade. For more details, our UK politic supporter 163 00:08:47,200 --> 00:08:49,720 Speaker 1: of James Wilcock is here. James good mornings. The government 164 00:08:49,720 --> 00:08:53,040 Speaker 1: has already announced a lot of infrastructure and investment spending. 165 00:08:53,080 --> 00:08:56,160 Speaker 1: What do we know so far about what we'll hear today. 166 00:08:56,160 --> 00:08:59,520 Speaker 9: Well, yes, they've announced one hundred and thirteen billion pounds 167 00:08:59,640 --> 00:09:01,960 Speaker 9: is going to be announced here in terms of capital spending. 168 00:09:01,960 --> 00:09:04,760 Speaker 9: Of that, thirty ten billion in housing, fifteen billion in rail. 169 00:09:05,280 --> 00:09:07,840 Speaker 9: That's what they want to talk about. That's the fun stuff, 170 00:09:07,840 --> 00:09:10,800 Speaker 9: that's the new goodies. The other side of this, though, 171 00:09:11,040 --> 00:09:13,200 Speaker 9: is that this is where we hear more than six 172 00:09:13,280 --> 00:09:15,640 Speaker 9: billion pounds a year is going to come in annual 173 00:09:15,640 --> 00:09:17,559 Speaker 9: spending in all the government departments. I mean, that's roughly 174 00:09:17,600 --> 00:09:19,400 Speaker 9: a fifth of the UK economy. Just to put it 175 00:09:19,400 --> 00:09:23,000 Speaker 9: in perspective. Now we know some of those figures already. 176 00:09:23,400 --> 00:09:25,440 Speaker 9: We know the NHS is going to get two hundred 177 00:09:25,480 --> 00:09:29,720 Speaker 9: billion pounds per year, Education ninety four, Defense thirty nine billion. 178 00:09:30,559 --> 00:09:33,679 Speaker 9: But all of this is to say that in some 179 00:09:33,720 --> 00:09:36,920 Speaker 9: ways this is cafting a political die because for the 180 00:09:37,000 --> 00:09:40,400 Speaker 9: next general action, the economics of what the public sector 181 00:09:40,480 --> 00:09:42,720 Speaker 9: looks like. We find that out today. 182 00:09:43,520 --> 00:09:46,920 Speaker 2: Yeah, because as you say, education, health and defense are 183 00:09:46,920 --> 00:09:50,080 Speaker 2: there ring fence departments the ones that get the money, 184 00:09:50,160 --> 00:09:55,280 Speaker 2: whereas everybody else is facing a massive squeeze and the 185 00:09:55,320 --> 00:09:58,640 Speaker 2: government's finances are very very tough so in terms of 186 00:09:58,679 --> 00:10:01,160 Speaker 2: the real term spending cut, so it's going to be difficult. 187 00:10:01,280 --> 00:10:03,520 Speaker 9: Yeah, and education and health are two of kissed armas 188 00:10:03,559 --> 00:10:06,400 Speaker 9: sort of big missions for government in labor, but there 189 00:10:06,400 --> 00:10:10,000 Speaker 9: are other ones crime, migration, and it'd be very intened 190 00:10:10,080 --> 00:10:12,480 Speaker 9: to see. They've said roughly that one point two percent 191 00:10:12,600 --> 00:10:14,719 Speaker 9: is the amount departments have got to work with increases. 192 00:10:15,080 --> 00:10:17,800 Speaker 9: If health, which is by far the biggest department coloss 193 00:10:17,920 --> 00:10:20,680 Speaker 9: or spend, is getting that much of an increase, you 194 00:10:20,720 --> 00:10:24,000 Speaker 9: are going to see potentially even double digit cut percentage 195 00:10:24,120 --> 00:10:27,120 Speaker 9: cuts in other departments and we'll be watching to see 196 00:10:27,120 --> 00:10:29,839 Speaker 9: where those come. Another side of the caroline just in terms 197 00:10:29,880 --> 00:10:32,120 Speaker 9: of like where this money is going, is a lot 198 00:10:32,160 --> 00:10:33,920 Speaker 9: of it's going to be spent outside London. In terms 199 00:10:33,920 --> 00:10:37,040 Speaker 9: of the infrastructure investment, Rachel Reeves is pushing rail investment 200 00:10:37,080 --> 00:10:39,440 Speaker 9: in the North and the other side as well. The 201 00:10:39,480 --> 00:10:42,559 Speaker 9: ft reporting one in ten civil servants jobs could be 202 00:10:42,600 --> 00:10:44,960 Speaker 9: on the line as they seek to make things more efficient. 203 00:10:45,720 --> 00:10:49,079 Speaker 9: It's not a small review. The last one happened during COVID. 204 00:10:49,120 --> 00:10:51,880 Speaker 9: This is kind of where we see how the shape 205 00:10:51,880 --> 00:10:54,720 Speaker 9: of the UK state evolves for the next sort of 206 00:10:54,760 --> 00:10:55,760 Speaker 9: three to five years. 207 00:10:56,600 --> 00:11:00,000 Speaker 1: Yeah, indeed Alva's been reporting our colleague on how long 208 00:11:00,120 --> 00:11:03,520 Speaker 1: and Thecaeity, the London Mayor isn't happy about how the 209 00:11:03,720 --> 00:11:06,720 Speaker 1: spending is going to go in his direction. Anyway. Let's 210 00:11:06,720 --> 00:11:08,800 Speaker 1: talk about though, what this means for the Chancellor of 211 00:11:08,880 --> 00:11:10,760 Speaker 1: Rachel Reeves of course, has been at the forefront of 212 00:11:10,880 --> 00:11:13,679 Speaker 1: some of the most difficult decisions this Labor government has 213 00:11:13,720 --> 00:11:14,439 Speaker 1: had to make. 214 00:11:14,520 --> 00:11:17,280 Speaker 9: Completely and if to put it in perspective, ipsos are 215 00:11:17,280 --> 00:11:19,520 Speaker 9: polled this week, So the Chancellor is now as unpopular 216 00:11:19,880 --> 00:11:23,040 Speaker 9: as former Chancellor Kazi Quateng after he delivered the mini 217 00:11:23,040 --> 00:11:26,439 Speaker 9: budget that is an expressive low and the party are 218 00:11:26,480 --> 00:11:29,360 Speaker 9: aware that it's very rare for the little party to 219 00:11:29,360 --> 00:11:33,520 Speaker 9: become so unpopular so quickly. So this moment for the 220 00:11:33,640 --> 00:11:35,960 Speaker 9: Chancellor ract of Reeves is the party has pinned its 221 00:11:35,960 --> 00:11:39,200 Speaker 9: hopes on gross and unlike the Conservatives, Labour see the 222 00:11:39,200 --> 00:11:43,240 Speaker 9: government taking an active role in driving growth forward. I 223 00:11:43,240 --> 00:11:46,600 Speaker 9: think today we find out what the comeback plan is, 224 00:11:47,000 --> 00:11:49,600 Speaker 9: what the government actually sees as its priorities when it's 225 00:11:49,600 --> 00:11:51,840 Speaker 9: forced to put its money where its mouth is, and 226 00:11:51,880 --> 00:11:55,400 Speaker 9: if they are big spenders, many economists would say today 227 00:11:55,840 --> 00:11:59,280 Speaker 9: may make taxizers in the autumn start to look inevitable. 228 00:12:00,080 --> 00:12:03,400 Speaker 2: Yeah, that's certainly thinking about the next few months. James, 229 00:12:03,400 --> 00:12:05,680 Speaker 2: thank you so much for being with us this morning. 230 00:12:05,720 --> 00:12:08,200 Speaker 2: Are UK Politics? Report to James Wallcock then on what 231 00:12:08,320 --> 00:12:12,160 Speaker 2: to expect twelve thirty lunchtime today, the chance of Rachel 232 00:12:12,200 --> 00:12:13,840 Speaker 2: reeves with the spending review. 233 00:12:14,840 --> 00:12:17,880 Speaker 1: Now the face of artificial intelligence, publishers are both fighting 234 00:12:17,920 --> 00:12:21,360 Speaker 1: against and joining forces with AI companies. A number of 235 00:12:21,400 --> 00:12:24,959 Speaker 1: academic publishers have signed or are looking at licensing deals 236 00:12:24,960 --> 00:12:28,199 Speaker 1: to provide access to their libraries and generate new revenue. 237 00:12:28,240 --> 00:12:30,079 Speaker 1: Joining us now for details of this story, it is 238 00:12:30,520 --> 00:12:33,040 Speaker 1: EMEA Earning Specials. Choe, Mela Chloe, good morning, great. 239 00:12:32,840 --> 00:12:33,280 Speaker 8: To see you. 240 00:12:33,679 --> 00:12:37,080 Speaker 1: So where do licensing deals between publishers and AI companies 241 00:12:37,240 --> 00:12:39,800 Speaker 1: come from and what exactly do these partnerships entail. 242 00:12:40,120 --> 00:12:42,440 Speaker 10: So what we've seen over the last few months is 243 00:12:42,480 --> 00:12:45,199 Speaker 10: academic publishers making and as you say, also exploring those 244 00:12:45,240 --> 00:12:46,440 Speaker 10: deals with AI companies. 245 00:12:47,000 --> 00:12:48,160 Speaker 3: Those are licensing deals. 246 00:12:48,200 --> 00:12:50,560 Speaker 10: So what that means is that the academic publisher is 247 00:12:50,640 --> 00:12:54,040 Speaker 10: essentially giving access to their library so that AI companies 248 00:12:54,080 --> 00:12:58,120 Speaker 10: can train their AI chatbots on that content. We've seen 249 00:12:58,120 --> 00:13:01,280 Speaker 10: Taylor and Francis, which is part of informed UK listed company, 250 00:13:01,559 --> 00:13:04,400 Speaker 10: making seventy five million dollars last year from those licensed 251 00:13:04,440 --> 00:13:07,319 Speaker 10: in deals. Over in the US, Wiley has made about 252 00:13:07,320 --> 00:13:11,880 Speaker 10: fifteen million to date, and Bloomsbury also recently said in 253 00:13:11,920 --> 00:13:15,720 Speaker 10: its slightest set of results that they were exploring those deals. 254 00:13:16,360 --> 00:13:18,080 Speaker 10: So it seems to be happening kind of across the 255 00:13:18,080 --> 00:13:19,479 Speaker 10: board For academic publishers. 256 00:13:20,000 --> 00:13:21,560 Speaker 3: A key thing to note is that, as you say. 257 00:13:21,440 --> 00:13:23,680 Speaker 10: These agreements are part of a broader trend of a 258 00:13:23,760 --> 00:13:28,199 Speaker 10: really hot and cold relationship between AI companies and publishers. 259 00:13:28,400 --> 00:13:30,079 Speaker 3: If we go beyond academic. 260 00:13:29,679 --> 00:13:32,079 Speaker 10: Publishing, for instance, and we look at a news publisher 261 00:13:32,360 --> 00:13:34,920 Speaker 10: like The New York Times, it recently reached a deal 262 00:13:34,960 --> 00:13:39,040 Speaker 10: to license its editorial content to Amazon while also having 263 00:13:39,080 --> 00:13:43,760 Speaker 10: spent years fighting open Ai in core as a copyright infringement. 264 00:13:43,880 --> 00:13:47,840 Speaker 10: So we've seen those deals happen as the publishers across 265 00:13:47,840 --> 00:13:50,400 Speaker 10: the board are really trying to prevent AI companies from 266 00:13:51,000 --> 00:13:54,040 Speaker 10: scraping the web without providing that fair compensation. 267 00:13:54,920 --> 00:13:55,679 Speaker 3: The idea is. 268 00:13:55,640 --> 00:13:57,520 Speaker 10: That licensing is a kind of a way out of 269 00:13:57,559 --> 00:14:00,480 Speaker 10: litigation and making everyone, or at least you know, more 270 00:14:00,520 --> 00:14:04,480 Speaker 10: than one party. Happy AA companies get the content that 271 00:14:04,520 --> 00:14:06,319 Speaker 10: they need and the publishers get the money. 272 00:14:07,160 --> 00:14:07,360 Speaker 7: Yeah. 273 00:14:07,440 --> 00:14:10,679 Speaker 2: Although what I found striking about this story is actually, 274 00:14:11,960 --> 00:14:14,320 Speaker 2: when we're talking about the billions going into AI, that 275 00:14:14,400 --> 00:14:17,360 Speaker 2: these deals don't sound enormous in terms of millions of 276 00:14:17,400 --> 00:14:20,960 Speaker 2: dollars in terms of Also the other angle to this, 277 00:14:21,600 --> 00:14:25,600 Speaker 2: President Trump's war effectively on academia, how is that kind 278 00:14:25,600 --> 00:14:28,400 Speaker 2: of maybe fueling some of these decisions also maybe to 279 00:14:28,480 --> 00:14:32,120 Speaker 2: pursue the aideals amongst these academic publishers. 280 00:14:32,440 --> 00:14:32,640 Speaker 3: Yeah. 281 00:14:32,640 --> 00:14:36,200 Speaker 10: Absolutely, So the research funding cuts that the Trump administration 282 00:14:36,280 --> 00:14:40,120 Speaker 10: is pushing for really adds another layer. Obviously, the cut 283 00:14:40,160 --> 00:14:43,440 Speaker 10: to that research budget is something that will affect academic publishers, 284 00:14:43,720 --> 00:14:47,880 Speaker 10: but those aideals could provide an offset. So William Larwood, 285 00:14:47,880 --> 00:14:51,080 Speaker 10: who's an analyst at Berenberg, calculated that about a forty 286 00:14:51,120 --> 00:14:54,600 Speaker 10: percent cut to the budget for the National Institute of Health, 287 00:14:55,320 --> 00:14:57,880 Speaker 10: which is the cut that the administration is pushing for, 288 00:14:57,920 --> 00:15:00,160 Speaker 10: would result in a forty five million dollar head and 289 00:15:00,400 --> 00:15:02,280 Speaker 10: revenue head to win for Taylor and Francis, which is 290 00:15:02,280 --> 00:15:07,440 Speaker 10: obviously not negligible, but he said that as those aids 291 00:15:07,480 --> 00:15:10,520 Speaker 10: could provide that that offset if we look at the numbers, 292 00:15:10,560 --> 00:15:13,760 Speaker 10: the underlying revenue growth for Taylor and Francis was fifteen 293 00:15:13,800 --> 00:15:16,920 Speaker 10: percent in twenty twenty four, and that's up way up 294 00:15:16,920 --> 00:15:18,960 Speaker 10: from three percent the year prior, and he said that 295 00:15:19,000 --> 00:15:21,360 Speaker 10: without those aideals, it would have been closer to three 296 00:15:21,360 --> 00:15:24,760 Speaker 10: point five. So this points to perhaps more academic publishers 297 00:15:24,760 --> 00:15:26,880 Speaker 10: seeing this and rushing to carve out this kind of 298 00:15:27,000 --> 00:15:30,720 Speaker 10: new and quite lucrative revenue stream to counteract the impact 299 00:15:30,720 --> 00:15:31,880 Speaker 10: of the funding cuts. 300 00:15:32,040 --> 00:15:33,600 Speaker 3: I mean, what when we're. 301 00:15:33,440 --> 00:15:35,520 Speaker 1: Thinking about these deals with AI companies as well, is 302 00:15:35,520 --> 00:15:36,880 Speaker 1: it a bit of a deal with the devil for 303 00:15:36,960 --> 00:15:39,600 Speaker 1: these publishing companies as well? How are they kind of 304 00:15:39,640 --> 00:15:41,320 Speaker 1: addressing some of the challenges around them. 305 00:15:41,560 --> 00:15:44,520 Speaker 10: Yeah, So the problem here is that obviously not everyone 306 00:15:44,760 --> 00:15:45,400 Speaker 10: is delighted. 307 00:15:46,160 --> 00:15:48,840 Speaker 3: There's the ideals. I've received a lot of. 308 00:15:48,800 --> 00:15:52,400 Speaker 10: Backlash from academic authors, in particular on two key points, 309 00:15:52,560 --> 00:15:55,880 Speaker 10: consent and compensation. So authors have said that they were 310 00:15:55,880 --> 00:15:59,240 Speaker 10: not asked for permission and that they were not given 311 00:15:59,280 --> 00:16:03,040 Speaker 10: fair payments in some cases. So we know what authors 312 00:16:03,080 --> 00:16:06,520 Speaker 10: have gotten from certain deals. So Microsoft offered HarperCollins five 313 00:16:06,560 --> 00:16:10,120 Speaker 10: thousand dollars per title, half of which went to the author, 314 00:16:10,800 --> 00:16:13,320 Speaker 10: but I spoke to Mary Raisenberger, who's the CEO of 315 00:16:13,720 --> 00:16:15,800 Speaker 10: the Author's Guild, and she said that this kind of 316 00:16:15,840 --> 00:16:18,680 Speaker 10: known ballpark in terms of what authors can expect, and 317 00:16:19,120 --> 00:16:21,640 Speaker 10: an author was page just ninety seven dollars for example 318 00:16:21,680 --> 00:16:26,600 Speaker 10: for their book recently by Darian Francis. The problem is 319 00:16:26,600 --> 00:16:30,320 Speaker 10: the more existential problem of academic publishers kind of accelerating 320 00:16:30,360 --> 00:16:31,760 Speaker 10: their own placement by AI. 321 00:16:33,080 --> 00:16:35,800 Speaker 1: This is Bloomberg Daybreak Europe, your morning brief on the 322 00:16:35,880 --> 00:16:38,920 Speaker 1: stories making news from London to Wall Street and beyond. 323 00:16:39,200 --> 00:16:43,200 Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify, 324 00:16:43,280 --> 00:16:45,240 Speaker 2: and anywhere else you get your podcasts. 325 00:16:45,280 --> 00:16:48,320 Speaker 1: You can also listen live each morning on London DAB Radio, 326 00:16:48,320 --> 00:16:51,040 Speaker 1: the Bloomberg Business app, and Bloomberg dot Com. 327 00:16:51,080 --> 00:16:53,840 Speaker 2: Our flagship New York station is also available on your 328 00:16:53,880 --> 00:16:58,600 Speaker 2: Amazon Alexa devices. 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