WEBVTT - Bloomberg Businessweek Weekend - October 31st, 2025 0:00:00.320 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.640 --> 0:00:13.000 This is Bloomberg Business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:25.960 --> 0:00:31.480 Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:31.760 --> 0:00:35.280 Hi everyone, welcome to the Bloomberg Business Wee Weekend Podcast. Yes, 0:00:35.520 --> 0:00:37.640 it was a big, big week with the FED cutting 0:00:37.680 --> 0:00:41.520 rates as expected, but surprising markets as Fedhair J. Powell 0:00:41.560 --> 0:00:45.519 said another cut in December not a given. Also, earnings 0:00:45.520 --> 0:00:49.559 from five of the mags seven Alphabet, Amazon, Apple, Meta 0:00:49.600 --> 0:00:50.400 and Microsoft. 0:00:50.520 --> 0:00:52.280 It was a lot, Tim, it was a lot. And 0:00:52.360 --> 0:00:54.560 so this hour what you need to know from the 0:00:54.600 --> 0:00:57.840 earnings of those megacap tech companies and on the massive 0:00:57.880 --> 0:01:00.360 AI build out and spend because that came Beryl is 0:01:00.400 --> 0:01:01.760 what moved to some of these stocks. 0:01:01.800 --> 0:01:05.240 Totally, totally. That was the big headlines. Also, we always 0:01:05.280 --> 0:01:07.280 love to get a read on how consumers are feeling 0:01:07.360 --> 0:01:10.440 and spending their money. We got a view from the 0:01:10.480 --> 0:01:14.440 chief financial officer at Wayfair, Kate Gulliver. She gave us 0:01:14.480 --> 0:01:17.000 a post check on a certain segment of the consumer. 0:01:17.120 --> 0:01:18.720 Are we talking about women who buy pillows? 0:01:19.160 --> 0:01:21.080 Well, more than just that, I mean people have the 0:01:21.120 --> 0:01:23.560 money to spend. Maybe some people who are actually moving 0:01:23.640 --> 0:01:26.919 right now, that's true, you know, trading in for bigger 0:01:26.920 --> 0:01:28.679 and better stuff, growing families. I don't know. 0:01:28.800 --> 0:01:29.920 And women who buy pillows. 0:01:29.959 --> 0:01:32.800 Okay, well you're speaking for yourself. You mentioned the pillows. 0:01:32.800 --> 0:01:35.080 It comes up. That's just a little tease for our 0:01:35.160 --> 0:01:37.919 chat with Kate. It actually does look like the US 0:01:38.480 --> 0:01:40.959 has a sovereign wealth fund. Now we're going to explain 0:01:41.040 --> 0:01:41.600 a little later. 0:01:41.720 --> 0:01:44.280 Have you checked who is the third biggest shareholder in 0:01:44.280 --> 0:01:44.959 Intel lately? 0:01:45.120 --> 0:01:49.400 It's interesting, Carol, because we also have a lot of debt. Yeah, 0:01:49.520 --> 0:01:51.920 and typically countries that don't have a lot of debt 0:01:52.200 --> 0:01:53.560 don't have a sovereign wealth fund. 0:01:53.800 --> 0:01:55.520 So many questions. We're going to try and answer some 0:01:55.560 --> 0:01:58.520 of them and what's going on. Plus in our second hour, 0:01:58.600 --> 0:02:01.520 over fifty five thousand runners will be participating in the 0:02:01.520 --> 0:02:04.840 New York City Marathon this weekend, including can I. 0:02:04.800 --> 0:02:07.000 Say, yeah, you can say it. You're not going to 0:02:07.040 --> 0:02:10.359 find her someone you know, someone I know? Really well, 0:02:11.680 --> 0:02:13.360 I'm not saying her name. She would not be happy 0:02:13.360 --> 0:02:14.720 about that. But our wife is running. 0:02:14.760 --> 0:02:16.120 That's why I don't say her name either. 0:02:16.440 --> 0:02:18.359 She is running the New York City Marathon. 0:02:18.400 --> 0:02:19.800 All right, Well, we're going to be talking with the 0:02:19.840 --> 0:02:23.120 CEO of the New York road Runners Club, so looking 0:02:23.160 --> 0:02:25.360 forward to that. First up, though, we start with this 0:02:25.480 --> 0:02:28.760 past week's earnings from the companies whose stocks influence US 0:02:28.760 --> 0:02:31.000 market moves more than any others. And as we said, 0:02:31.040 --> 0:02:33.480 it was a huge week for big tech earnings, Microsoft, 0:02:33.560 --> 0:02:36.480 Alphabet and Meta and many more. Couple more in fact, 0:02:36.560 --> 0:02:39.360 all showing that the AI spend is on. With a 0:02:39.400 --> 0:02:41.400 look at some of the MAGS seven reporting this week, 0:02:41.400 --> 0:02:44.640 we talked with Mark Mahaney. He's senior managing director and 0:02:44.680 --> 0:02:48.040 head of Internet Research at Evercore ISI. He's also author 0:02:48.120 --> 0:02:51.240 of Nothing but Net ten Timeless stock picking lessons from 0:02:51.240 --> 0:02:54.200 one of Wall Street's top tech analysts. 0:02:53.880 --> 0:02:56.520 Mark, I think we want to begin with Meta Platforms. 0:02:56.960 --> 0:02:59.120 Is the stock down as a result of what it's 0:02:59.120 --> 0:03:00.639 said about KAPEC next year? 0:03:01.000 --> 0:03:03.960 Yeah, that's the cappex and the total expense guidance that 0:03:04.000 --> 0:03:06.440 they for next year was more aggressive than the market 0:03:06.520 --> 0:03:09.280 wanted this company. Zuckerberg was very clear about it. He 0:03:09.320 --> 0:03:12.320 wants to be the AI leader. He's going all in 0:03:12.400 --> 0:03:15.960 on superintelligence, and investors are a little cautious and nervous 0:03:16.000 --> 0:03:16.400 about that. 0:03:16.639 --> 0:03:17.639 Why aren't they buying it? 0:03:18.160 --> 0:03:19.720 Well maybe for two or three reasons. 0:03:19.760 --> 0:03:22.640 Tim, You know you're here asking asking a really good question, 0:03:22.680 --> 0:03:24.600 which is why aren't they buying it? Well, maybe we 0:03:24.639 --> 0:03:27.240 don't really know what it is, so you know, all 0:03:27.280 --> 0:03:28.720 of us are sort of scratching our heads because I 0:03:28.720 --> 0:03:31.359 guess we're not super intelligent. I'm not trying to figure 0:03:31.400 --> 0:03:33.400 out exactly what's what's going to come out of that, 0:03:34.280 --> 0:03:36.880 Like what's what's the product going to be, what's the 0:03:36.960 --> 0:03:38.840 offering going to be, and how you're going to monetize it. 0:03:39.120 --> 0:03:41.400 That's one reason we just really don't know what super 0:03:41.440 --> 0:03:45.320 intelligence is quite yet. Second is it's very competitive. So 0:03:45.480 --> 0:03:49.000 Google's chasing it, open Aye is chasing it, and Metta isn't. 0:03:49.000 --> 0:03:52.000 There probably other companies too. I should assume Apple and 0:03:53.160 --> 0:03:55.680 Microsoft are too. And I think the market's just a 0:03:55.680 --> 0:03:58.840 little skeptical. It is skeptical that that Meta is going 0:03:58.880 --> 0:04:02.760 to be able to do this sufficiently effectively generate a 0:04:02.800 --> 0:04:05.240 good financial return. So that's why it's really those two 0:04:05.280 --> 0:04:07.480 reasons we don't know what that end market is, and 0:04:07.520 --> 0:04:09.400 we don't we don't. The market maybe is a little 0:04:09.400 --> 0:04:13.040 nervous about metas odds against that against that unknown end market. 0:04:13.200 --> 0:04:14.960 You know what's interesting too, and I've been thinking about 0:04:15.000 --> 0:04:17.359 this mark is and by the way, we're creating a 0:04:17.360 --> 0:04:20.160 super intelligence club right here at Bloomberg. So we would 0:04:20.160 --> 0:04:23.400 love for you to join in the next club meeting. Hey, 0:04:23.839 --> 0:04:26.440 you know, is part of it that, you know, the 0:04:26.480 --> 0:04:29.800 spend for Meta. It's not like they're one of the hypers, 0:04:29.839 --> 0:04:33.240 you know, they're not Microsoft or alphabet who can kind 0:04:33.240 --> 0:04:36.560 of offload some of the spending on other companies. Is 0:04:36.560 --> 0:04:37.320 that part of it? 0:04:37.800 --> 0:04:38.800 Yeah, I think that's right. 0:04:38.839 --> 0:04:41.160 I think I think you're right in saying that that 0:04:41.960 --> 0:04:46.080 Amazon sells super intelligence or can sell AI services to 0:04:46.120 --> 0:04:49.840 other companies. Microsoft does through Azure, they have cloud services, 0:04:49.839 --> 0:04:50.640 and so does Google. 0:04:50.800 --> 0:04:51.680 And there's not kind of. 0:04:51.600 --> 0:04:56.800 That obvious external you know, commercial enterprise offering. Meta doesn't 0:04:56.839 --> 0:04:58.400 have that, So the return is going to have to 0:04:58.440 --> 0:05:01.080 be on Meta itself. And so that maybe at the 0:05:01.240 --> 0:05:03.440 some level that maybe that's the third reason why the 0:05:03.440 --> 0:05:05.160 market's a little skeptical, and. 0:05:05.080 --> 0:05:08.520 So skepticism smart as we should be in any environment, 0:05:08.640 --> 0:05:10.400 especially when there's a big spend out there, you still 0:05:10.400 --> 0:05:12.720 have an outperform on Meta. So time give it a 0:05:12.760 --> 0:05:14.359 little time, right to kind of watch and see how 0:05:14.400 --> 0:05:15.000 this plays out. 0:05:15.120 --> 0:05:17.080 Yeah, I'm going to take up the opposite side of this. 0:05:17.200 --> 0:05:19.680 So this is what I've learned following Meta for a 0:05:19.720 --> 0:05:21.520 long time. But just in the last couple of years, 0:05:21.880 --> 0:05:25.680 this company aggressively invested in AI and they used it 0:05:25.680 --> 0:05:30.960 to dramatically improve their core products Instagram, WhatsApp, Facebook, And 0:05:31.040 --> 0:05:35.280 what's the evidence, Well, consumer engagement has increased materially over 0:05:35.279 --> 0:05:38.400 the last couple of years, and advertiser returns have increased 0:05:38.440 --> 0:05:39.960 materially over the last couple of years. 0:05:40.040 --> 0:05:41.000 What's the evidence of that? 0:05:41.520 --> 0:05:44.760 Meta has probably got the strongest advertising revenue growth, you know, 0:05:44.800 --> 0:05:47.880 twenty five twenty six percent at scale at two hundred billion, 0:05:47.920 --> 0:05:50.239 you know, revenue run rate. That's better growth than anybody 0:05:50.279 --> 0:05:53.400 else has in the direct competitor has in the sector. 0:05:53.440 --> 0:05:55.400 Maybe I'll be surprised by one name in there, but 0:05:55.440 --> 0:05:58.520 I doubt it. So to me, I step back and 0:05:58.560 --> 0:06:00.919 I think, well, they've actually shown a great ability to 0:06:01.000 --> 0:06:03.840 deploy AI to improve their core products. I'm going to 0:06:03.880 --> 0:06:05.840 give the benefit of the doubt that they could probably 0:06:05.880 --> 0:06:09.120 deploy AI to create new products. And you know, they 0:06:09.200 --> 0:06:11.240 just start off with so much I call them the 0:06:11.240 --> 0:06:15.600 three c's, compute, capital, and cranium, that you know that 0:06:16.080 --> 0:06:18.320 there's probably going to be more than just one winner 0:06:18.320 --> 0:06:21.280 in superintelligence, and I think metas a decent shots of 0:06:21.360 --> 0:06:23.080 winning it. And by the way, I don't have to bet. 0:06:23.080 --> 0:06:24.719 I don't have to spend too much on this. The 0:06:24.800 --> 0:06:27.760 stock trades it close to a market multiple. And this 0:06:27.800 --> 0:06:31.440 is so different Carol Vins. Three years ago when Metacore 0:06:31.520 --> 0:06:34.960 business was under attack existential risk coming from TikTok, and 0:06:34.960 --> 0:06:37.120 they were throwing money at this thing called the metaverse. 0:06:37.680 --> 0:06:41.760 This is three years later and there's no existential risk 0:06:41.800 --> 0:06:44.719 to Core Meta And in the meantime, they're throwing money 0:06:44.760 --> 0:06:48.000 into something or investing aggressively into something that some of 0:06:48.000 --> 0:06:51.160 the sharpest other technology companies are. There's probably there there 0:06:51.520 --> 0:06:55.839 If Amazon, if Google, if open Ai, Microsoft and Meta 0:06:55.880 --> 0:06:59.560 are all betting on or investing in superintelligence. 0:06:59.640 --> 0:07:01.160 I do think think about Metal Lot. You know, when 0:07:01.160 --> 0:07:04.440 they came out of their IPO and reception not necessarily 0:07:04.480 --> 0:07:06.440 so good, and the pivot in terms of was it mobile, 0:07:06.600 --> 0:07:08.160 that they needed to think about more and then the 0:07:08.240 --> 0:07:10.760 met and then you know, they moved quickly and then 0:07:10.800 --> 0:07:13.440 metaverse all in and then maybe that wasn't right, and 0:07:13.480 --> 0:07:15.720 they pivoted again, like there is something to be said 0:07:15.720 --> 0:07:18.000 that this company does. Look, you know, tim kind of 0:07:18.040 --> 0:07:20.840 what's going on and then making the necessary adjustment quickly. 0:07:20.960 --> 0:07:24.480 Well on that, Mark Mahaney, the idea of the cranium 0:07:24.520 --> 0:07:26.040 part of this, and maybe this is not what you're 0:07:26.080 --> 0:07:27.920 referring to when you said cranium, but we got to 0:07:27.960 --> 0:07:30.720 talk about face computers, this idea of the ray band, 0:07:30.800 --> 0:07:33.840 metagen two glasses, the success, the runaway success. I was 0:07:33.880 --> 0:07:36.320 surprised to see how successful, or I've been surprised to 0:07:36.360 --> 0:07:39.000 see how successful Meta has been when it comes to wearables. 0:07:39.280 --> 0:07:41.720 Ro and Mark German loves these things when he tried 0:07:41.720 --> 0:07:45.240 them a few months ago. And the user interface is 0:07:45.320 --> 0:07:47.680 the next You've covered a lot of cycles. Is the 0:07:47.720 --> 0:07:50.640 next platform for computing wearable glasses? 0:07:50.880 --> 0:07:53.520 I don't know. I guess I'm skeptical that it is. 0:07:54.040 --> 0:07:55.000 It's possible. 0:07:55.400 --> 0:07:58.720 I don't know why I doubt there's one solution out there. 0:07:59.120 --> 0:08:03.080 I think wearable glasses can be one solution. It's probably 0:08:03.120 --> 0:08:04.800 more than a niche, but I don't know that it's 0:08:04.880 --> 0:08:07.360 mass market, so I don't know what the something in 0:08:07.400 --> 0:08:09.960 the middle there. I guess I'm a little skeptical, but 0:08:10.040 --> 0:08:12.240 you know, they've certainly this is a heck of a 0:08:12.280 --> 0:08:13.720 lot of this product is a heck of a lot 0:08:13.760 --> 0:08:16.520 better than what I wasted money on with Google Glasses 0:08:16.600 --> 0:08:16.960 years ago. 0:08:17.040 --> 0:08:19.480 But all the stuff feeds on and builds on itself. 0:08:19.760 --> 0:08:22.960 Well, I'm just having trouble then understanding where superintelligence comes 0:08:23.000 --> 0:08:25.280 into this. And like you said, we haven't seen this before. 0:08:25.320 --> 0:08:26.880 But if that's what the big bet is and that's 0:08:26.880 --> 0:08:28.920 what all these companies are working on, how does that 0:08:28.960 --> 0:08:32.520 manifest in a product? Is it that Instagram just becomes 0:08:32.559 --> 0:08:34.600 that much better at knowing us and that our targeted 0:08:34.880 --> 0:08:36.880 advertising is that much better? Is that it? 0:08:37.040 --> 0:08:38.200 I hope they's do it in that. 0:08:38.520 --> 0:08:42.000 I think the vision that's been that Zuckerberger's talked about 0:08:42.280 --> 0:08:45.400 just as much as anybody else Sam Altman's talked about 0:08:45.400 --> 0:08:49.440 it is a personal digital assistant, so an AI system 0:08:49.600 --> 0:08:53.600 that would not only find information, do research for you, 0:08:53.760 --> 0:08:56.160 help you figure out how to buy a new car, 0:08:56.520 --> 0:08:59.320 what are the best running shoes for you, but also 0:08:59.400 --> 0:09:02.839 help you tasks like maybe buy that car or buy 0:09:02.920 --> 0:09:05.200 those shoes for you at the best price and get them, 0:09:05.280 --> 0:09:09.520 you know, with the fastest speed, and perform tasks for you, 0:09:09.720 --> 0:09:12.720 like help you book that family vacation, not in the 0:09:12.760 --> 0:09:15.440 average three and a half hours that most families take, 0:09:15.520 --> 0:09:17.600 but in the you know, thirty minutes or twenty minutes 0:09:17.679 --> 0:09:20.440 or fifteen minutes, and do all these tasks, you know, 0:09:20.600 --> 0:09:22.760 kind of do them for you and you can come 0:09:22.800 --> 0:09:24.839 back and have them done. So I think that's how 0:09:24.880 --> 0:09:27.600 to think about it, you know, I'm hoping that all 0:09:27.640 --> 0:09:28.240 that comes together. 0:09:28.280 --> 0:09:31.200 Look, I try, I spend a lot of time with Gemini. 0:09:31.200 --> 0:09:33.120 I've spent a lot of time with you know, chat 0:09:33.200 --> 0:09:35.760 ept and and you know, I've run it through its 0:09:35.760 --> 0:09:38.640 paces and doing projects and tasks like that. They're not 0:09:38.679 --> 0:09:40.839 they're not there yet, but I see the potential and 0:09:40.880 --> 0:09:42.920 I see the ongoing improvement. So I think that's what 0:09:42.960 --> 0:09:45.600 we're waiting for, These personal AI assistants that are going 0:09:45.679 --> 0:09:48.800 to be able to research, find information and perform tasks 0:09:48.840 --> 0:09:51.480 for us and going to do it seamlessly and quickly. 0:09:51.920 --> 0:09:54.920 And you know, that's what we're all sort of hoping for. 0:09:55.240 --> 0:09:58.160 That's Mark Mahaney, Senior Managing Director and head of Internet 0:09:58.200 --> 0:09:59.880 Research at Evercore ISO. 0:10:01.240 --> 0:10:04.200 On Thursday, both Apple and Amazon reported results. More on 0:10:04.240 --> 0:10:06.440 that ahead, We started with a look at the numbers 0:10:06.440 --> 0:10:10.440 from the world's largest online retailer with Bloomberg Intelligence senior 0:10:10.480 --> 0:10:13.280 analysts for e commerce and ath Leisure Punum Goyle. 0:10:13.600 --> 0:10:18.000 Sales were very get across the board, across all business segments, AWS, 0:10:18.040 --> 0:10:22.119 online advertising, even physical stores. So from a top line perspective, 0:10:22.240 --> 0:10:25.840 very very encouraging results. In fact, AWS was probably the 0:10:25.840 --> 0:10:29.120 bright spot here twenty percent gains. We haven't seen that 0:10:29.240 --> 0:10:32.960 in a while. On the margin side, I think AWS 0:10:33.000 --> 0:10:35.600 did really well, but then when it came to North 0:10:35.640 --> 0:10:39.079 America margins, they were weaker than we expected. So it's 0:10:39.080 --> 0:10:42.680 the only one area that I saw some skepticism, and 0:10:42.720 --> 0:10:45.439 I think that's largely due to their ability to want 0:10:45.480 --> 0:10:49.080 to maintain low prices to make sure the consumer keeps 0:10:49.080 --> 0:10:50.959 coming back and investing in its fulfillment. 0:10:51.320 --> 0:10:55.160 So you think that margins took a hit because Amazon 0:10:55.280 --> 0:10:56.640 is keeping prices low. 0:10:56.600 --> 0:10:59.520 Why, I mean, they want to drive market share gains. Right, So, 0:10:59.559 --> 0:11:01.760 if you think about what's happening in retail this year, 0:11:02.160 --> 0:11:05.920 tariffs have clearly added to costs and many retailers have 0:11:06.040 --> 0:11:10.400 decided to offset those costs through efficiencies to try to 0:11:10.520 --> 0:11:14.360 keep an hold prices steady or raise them selectively, so 0:11:14.400 --> 0:11:16.520 that could be part of the pressure. And then also, 0:11:16.600 --> 0:11:19.040 you know, Amazon has stepped up its game on shipping 0:11:19.040 --> 0:11:21.880 where it was the leader and it still is the leader, 0:11:21.960 --> 0:11:25.920 but they're continuing to invest there to get items to faster, 0:11:26.120 --> 0:11:26.880 same day, etc. 0:11:27.559 --> 0:11:29.480 So what else can you give us in terms of 0:11:29.520 --> 0:11:32.040 color on the retail side of the business, which is 0:11:32.080 --> 0:11:36.160 something that so many of us right identify very clearly 0:11:36.200 --> 0:11:37.440 with when it comes to Amazon. 0:11:37.720 --> 0:11:40.079 Yeah, I think, look, they're making all the right investments 0:11:40.120 --> 0:11:44.360 to improve profitability. In the longer term, Amazon's retail businesses 0:11:44.400 --> 0:11:46.760 finally break even too profitable. It took a long time 0:11:46.760 --> 0:11:49.400 to get here, and I think automation will be the 0:11:49.440 --> 0:11:52.760 next leg of growth to drive that further. But as 0:11:52.760 --> 0:11:57.959 I've mentioned you know earlier, AWS is driving their EBIT margins, 0:11:58.040 --> 0:12:01.840 so AWS some compensate these investments to a certain extent, 0:12:02.040 --> 0:12:05.120 and so can advertising because the margins here are just 0:12:05.200 --> 0:12:07.600 so much higher than they'll ever be able to get 0:12:07.640 --> 0:12:08.559 in the retail business. 0:12:08.840 --> 0:12:11.640 How is how is the advertising business during PUNAM It's 0:12:11.640 --> 0:12:12.320 doing really well. 0:12:12.320 --> 0:12:14.920 Like Brow twenty two, percent in constant currency in the quarter, 0:12:15.280 --> 0:12:18.000 so right where we expected. And I think, you know, 0:12:18.080 --> 0:12:20.760 that's a high profit business. It's about seventy five to 0:12:20.800 --> 0:12:24.640 eighty percent profit margins by our estimates, and that's flowing 0:12:24.720 --> 0:12:26.480 right to the bottom line. We see it going to 0:12:26.559 --> 0:12:29.840 one hundred billion dollars. So there's a lot of improvement 0:12:29.920 --> 0:12:32.120 that they can build in advertising and really drive that 0:12:32.200 --> 0:12:32.880 business higher. 0:12:32.920 --> 0:12:34.959 From here, where's that coming from? Is that coming from 0:12:34.960 --> 0:12:37.880 interstitials placed in Amazon Prime Video which cut a lot 0:12:37.880 --> 0:12:39.800 of people off guard when they started doing that. Was 0:12:39.840 --> 0:12:43.400 it last year maybe? Or yeah? Or is it or 0:12:43.400 --> 0:12:46.760 is it coming from like products that are paid for placement. 0:12:47.080 --> 0:12:49.480 I think it's a combination of both. You're absolutely right, 0:12:49.520 --> 0:12:52.199 these ads are driving incremental revenue, but if you think 0:12:52.240 --> 0:12:55.680 about the base of this revenue base, it's still coming 0:12:55.720 --> 0:12:58.960 from product advertisements. The ads do help, and they will 0:12:58.960 --> 0:13:02.239 become a larger drive as the ad business grows in size, 0:13:02.440 --> 0:13:04.760 but the core of it is still product advertising. 0:13:05.160 --> 0:13:08.000 That's Bloomberg Intelligence Senior analyst for e Commerce and ath 0:13:08.080 --> 0:13:09.559 Leisure Punham Goyle. 0:13:09.559 --> 0:13:12.640 Still ahead on Bloomberg BusinessWeek. The Trump White House continues 0:13:12.720 --> 0:13:16.200 its investment push. This time they're going nuclear. 0:13:16.120 --> 0:13:17.280 This is Bloomberg. 0:13:21.440 --> 0:13:25.600 This is Bloomberg Business Week Daily with Carol Masser and 0:13:25.679 --> 0:13:28.360 Tim Steneveek on Bloomberg Radio. 0:13:29.160 --> 0:13:32.480 The Trump administration is taking the same investment strategy it 0:13:32.520 --> 0:13:36.000 has applied to mining, steel and semiconductor companies to a 0:13:36.040 --> 0:13:38.760 new area, domestic nuclear reactors. 0:13:39.000 --> 0:13:42.000 The US will be the initial buyer for multiple reactors 0:13:42.000 --> 0:13:45.800 from Westinghouse. That's according to Simon Maine, a spokesman for 0:13:45.880 --> 0:13:49.480 Brookfield Asset Management. It's one of the manufacturer's owners now. 0:13:49.520 --> 0:13:52.040 Tim THATTT News comes just shortly after reporting that the 0:13:52.040 --> 0:13:55.520 White House is in early stage conversations with quantum computing 0:13:55.559 --> 0:13:59.120 companies to discuss potential financial support for an industry that's 0:13:59.360 --> 0:14:02.640 part of the growing race with China for technology supremacy. 0:14:03.040 --> 0:14:05.400 And after taking steaks, as you know, in a lot 0:14:05.400 --> 0:14:10.040 of other companies, we're talking about Intel, MP Materials, Trilogy Metals, 0:14:10.160 --> 0:14:11.400 and Lithium Americas. 0:14:11.800 --> 0:14:13.880 To help us make sense of what some say is 0:14:13.920 --> 0:14:16.600 a push to create a sovereign wealth fund, we caught 0:14:16.640 --> 0:14:19.760 up with a Bloomberg News economic stakecraft reporter Joe Doe 0:14:19.840 --> 0:14:22.920 and Bloomberg News Senior White House correspondent Josh Wingrove. 0:14:23.200 --> 0:14:26.880 Our reporting is that these talks are ongoing but preliminary. 0:14:27.200 --> 0:14:30.280 Remember Biden had his Chips Act and they sort of 0:14:30.280 --> 0:14:33.080 made all these pledges. Trump's administration has made clear that 0:14:33.160 --> 0:14:37.640 they are really redetermining, let's say, or reprofiling a lot 0:14:37.680 --> 0:14:39.920 of this funding. We've seen it, of course with the 0:14:39.960 --> 0:14:43.720 Intel discussions and then converting the Chips Act award into 0:14:44.280 --> 0:14:47.600 an equity stake. Frankly, Democrats wondered whether that was legal 0:14:47.680 --> 0:14:50.240 or not. And now the question is what they do 0:14:50.280 --> 0:14:52.760 with other chips AC funding, in particular on R and 0:14:52.840 --> 0:14:55.680 D funding. And our understanding is that that is what 0:14:55.800 --> 0:14:58.560 is being sort of kicked around now, not necessarily limited 0:14:58.560 --> 0:15:02.480 to quantum computing, but early stage, preliminary discussions. You know, 0:15:02.480 --> 0:15:05.240 I don't want to, you know, find myself at odds 0:15:05.240 --> 0:15:07.440 with the Wall Street Journal, but our understanding is that 0:15:07.520 --> 0:15:10.520 this is not yet proceeded to the you know, hashing 0:15:10.560 --> 0:15:13.560 out of direct stakes and that kind of stage of things. 0:15:13.920 --> 0:15:16.280 But I suppose time will tell. What is clear is 0:15:16.400 --> 0:15:18.680 essentially from all this reporting that there is a sort 0:15:18.680 --> 0:15:21.760 of a trajectory here, right the Trump administration sees quantum 0:15:22.080 --> 0:15:25.560 as a sector that it wants to bolster invest maybe 0:15:25.600 --> 0:15:28.880 add to its sort of strategic landscape, if you will, 0:15:28.920 --> 0:15:32.280 of industries that Trump is getting more and more involved 0:15:32.280 --> 0:15:35.840 in and you know, trying to support domestic development of 0:15:36.000 --> 0:15:37.800 and so whether you know how far it goes and 0:15:37.840 --> 0:15:39.840 how far it is. You're seeing some conflicting reporting on 0:15:39.880 --> 0:15:42.680 it candidly right now, but the trajectory seems to be 0:15:42.720 --> 0:15:44.720 pointing in one direction, which is the quantum is something 0:15:44.720 --> 0:15:45.560 they're sniffing around. 0:15:45.720 --> 0:15:48.240 All right, so Jojo, come on, and what you're hearing, 0:15:48.280 --> 0:15:49.920 But I also want to layer on top of that. 0:15:50.320 --> 0:15:54.480 You know, in essence, is the United States, via President Trump, 0:15:54.600 --> 0:15:58.720 kind of actually operating, if not officially, kind of a 0:15:58.760 --> 0:16:01.720 wealth fund of the United States as it continues to 0:16:02.440 --> 0:16:06.440 ponder taking positions in companies private or others, a lot 0:16:06.440 --> 0:16:09.800 of public companies already having taken stakes as well. 0:16:10.200 --> 0:16:14.200 In short, yes, listen, I think look at this quantum 0:16:14.240 --> 0:16:16.680 computing article that we have out, and you add it 0:16:16.720 --> 0:16:19.720 to some earlier reporting that Josh and I had about 0:16:19.720 --> 0:16:23.680 a tungsten deposit that the US is backing a US 0:16:23.760 --> 0:16:27.080 private company to purchase ad on top of that intel 0:16:27.400 --> 0:16:31.160 US steel imped materials. It goes on and on and on, 0:16:31.240 --> 0:16:34.120 and what we're really seeing is a United States federal 0:16:34.160 --> 0:16:37.320 government that is comfortable with having a pretty broad reaching 0:16:37.400 --> 0:16:42.440 portfolio that it is either taking active stakes in or 0:16:42.640 --> 0:16:46.680 financial backing to have some direction in terms of these 0:16:46.720 --> 0:16:50.480 companies that they believe are significant in terms of national security. 0:16:52.560 --> 0:16:54.480 And I think if I can tie it to that 0:16:54.560 --> 0:16:57.200 question of the Sovereign Wealth Fund question, if you look 0:16:57.240 --> 0:17:00.280 at this quantum computing story, as Josh has, at the 0:17:00.400 --> 0:17:04.800 very least, it points out how broad reaching the administration's 0:17:04.840 --> 0:17:08.639 idea of what is nationally significant for security purposes really is. 0:17:09.680 --> 0:17:13.160 Yeah, I think the question that I have is what happens, 0:17:13.480 --> 0:17:16.159 Josh or or yeah, Josh, I mean, what happens to 0:17:16.160 --> 0:17:20.359 the companies that do not get investments from the United States? 0:17:20.400 --> 0:17:23.520 What about competitors in the space, whether we're talking about 0:17:23.800 --> 0:17:27.199 quantum computing companies or we're talking about rare earth miners 0:17:27.200 --> 0:17:31.160 that we're talking about metal producers, like, what happens to those? 0:17:31.800 --> 0:17:34.119 I mean, this is the question of the sort of 0:17:34.200 --> 0:17:37.199 handful of conservatives who are willing to speak aloud what 0:17:37.400 --> 0:17:41.040 a larger number of conservatives have along and always believed 0:17:41.040 --> 0:17:43.000 and probably do but still believe, which is that they 0:17:43.000 --> 0:17:46.479 don't feel comfortable with presidents of either stripe picking winners 0:17:46.480 --> 0:17:48.240 and losers. Right, This used to be something that the 0:17:48.280 --> 0:17:50.720 Republican Party, you know, this was not a tree that 0:17:50.760 --> 0:17:52.520 they were barking up all that often. And so Trump 0:17:52.560 --> 0:17:55.159 has changed the calculus in so many ways. So I 0:17:55.200 --> 0:17:57.600 think there's a few things swirling here. Number one, of course, 0:17:57.640 --> 0:18:00.119 how far will it go? We just don't know. And 0:18:00.160 --> 0:18:03.920 it's also unclear whether Congress, including but not limited to Republicans, 0:18:04.320 --> 0:18:06.959 would start, you know, sticking its head up and saying, hey, 0:18:07.000 --> 0:18:09.520 wait a minute, in particular with how they're interpreting the 0:18:09.560 --> 0:18:13.520 Chips Act, which was bipartisan bill that, in the eyes 0:18:13.560 --> 0:18:15.680 of the lawmakers behind it, set out the rules of 0:18:15.760 --> 0:18:18.399 what you can and can't do. And number two is okay, well, 0:18:18.400 --> 0:18:20.280 if this is the new reality, and if the Republican 0:18:20.320 --> 0:18:23.000 Party is really moving on this, where does it go 0:18:23.040 --> 0:18:24.600 from here? And if you know, if the next president's 0:18:24.600 --> 0:18:27.719 a Democrat, decides to take it further than this, you know, 0:18:27.880 --> 0:18:30.040 or even roll it back. It's just really up in 0:18:30.040 --> 0:18:32.040 the air right now. But President Trump has made it clear, 0:18:32.520 --> 0:18:35.879 as as Secretary Lutnik, that they're both interested in this 0:18:35.960 --> 0:18:38.120 sort of idea of like getting skin in the game 0:18:38.200 --> 0:18:40.959 or getting something in exchange for taxpayer support. They call it, 0:18:41.040 --> 0:18:44.160 you know, they see it basically as a fairness issue. 0:18:44.160 --> 0:18:45.520 You do not get the support of the government if 0:18:45.520 --> 0:18:47.960 we're not getting something out of it ourselves. And so 0:18:48.000 --> 0:18:49.560 I think there's no sign that is going to slow 0:18:49.600 --> 0:18:50.879 down right now with this administration. 0:18:51.240 --> 0:18:55.840 Joe, you cover economic stakeecraft. You've spent many years covering 0:18:55.920 --> 0:18:58.440 metals and mining. You understand rare earth. This is sort 0:18:58.480 --> 0:19:01.080 of the perfect cross section of what you've been focused 0:19:01.119 --> 0:19:04.840 on for your career. But if we think about now 0:19:05.160 --> 0:19:09.160 the Trump administration taking investment in many different types of industries, 0:19:09.160 --> 0:19:13.359 from tac to metals to rare earths, what are people 0:19:13.400 --> 0:19:16.959 talking about could be next everything? I mean, I mean 0:19:17.119 --> 0:19:19.600 thro Intel in there, right, yeah, I. 0:19:19.520 --> 0:19:22.359 Mean this is the great experiment when you know, Josh 0:19:22.440 --> 0:19:26.320 and I and Ryan, we had the terrific scoop that 0:19:26.359 --> 0:19:29.880 Intel was suddenly on the map for an inequity stake, right. 0:19:30.240 --> 0:19:32.840 I think I think that really got the attention of 0:19:33.000 --> 0:19:36.679 investors in a way that like MP materials and critical 0:19:36.760 --> 0:19:39.520 minerals had not. I mean, the kind of scale you're 0:19:39.520 --> 0:19:43.800 talking about with Intel shows you how big this administration 0:19:43.960 --> 0:19:46.600 is willing to think in terms of using the full 0:19:46.640 --> 0:19:50.280 force of the United States federal government to put into motion 0:19:50.480 --> 0:19:54.280 the things it thinks are important and where we go 0:19:54.400 --> 0:19:57.720 from here. I mean the phone calls that I sometimes 0:19:57.760 --> 0:20:00.240 have with Josh and others saying, hey, we should look 0:20:00.280 --> 0:20:05.919 at this thing is wild and wild is being reportable. 0:20:06.119 --> 0:20:09.040 That was Bloomberg News Economic stakecraft reporter Joe Doe and 0:20:09.080 --> 0:20:11.920 Bloomberg News Senior White House correspondent Josh wing Grow. 0:20:12.080 --> 0:20:15.360 And speaking of Nvidia, it's also partnered with yet another company. 0:20:15.400 --> 0:20:18.160 This week, the AI chip maker took a two point 0:20:18.240 --> 0:20:21.399 nine percent stake in Nokia, using its chips to boost 0:20:21.480 --> 0:20:24.960 Nokia's software for five G and six G networks. Bloomberg's 0:20:25.040 --> 0:20:27.520 Ed Ludlow sitting down with the CEOs of both Nvidia 0:20:27.520 --> 0:20:30.720 and Nokia following that announcement, and here is some of 0:20:30.760 --> 0:20:33.920 that conversation with Jensen Wang and Justin Hotard. 0:20:34.200 --> 0:20:36.960 If we take advantage of this transition from general purpose 0:20:37.000 --> 0:20:41.240 computing to accelerated computing, from old types of all types 0:20:41.280 --> 0:20:43.679 of software to AI, we can take advantage of this 0:20:43.720 --> 0:20:47.280 transition of AI and six G for America to win 0:20:47.440 --> 0:20:51.080 back telecommunications again. It's been a long time since the 0:20:51.119 --> 0:20:54.160 American telecommunication network has been built on American technology. 0:20:54.720 --> 0:20:56.240 National security, I believe. 0:20:56.119 --> 0:20:59.080 For national security reasons, for economic reasons, our industry should 0:20:59.080 --> 0:21:01.400 be built on American technology, and for the very first time, 0:21:01.440 --> 0:21:03.280 we can do that. We have a brand new product 0:21:03.280 --> 0:21:06.560 line that takes advantage of computing, accelerated computing, and AI, 0:21:07.000 --> 0:21:09.400 and we have a great partner to help us deal 0:21:09.480 --> 0:21:10.840 with Nokia. 0:21:10.920 --> 0:21:14.000 There was a time where Nokia was already looking to America. 0:21:14.440 --> 0:21:16.399 You've been in the role since April, then may I 0:21:16.440 --> 0:21:19.399 stop by asking you what role the administration played in 0:21:19.480 --> 0:21:22.480 bringing you both together? If this is indeed a strategic priority. 0:21:23.400 --> 0:21:25.720 I don't think there was anything specific that the administration 0:21:25.920 --> 0:21:29.760 did other than they've created the environment to support innovation. 0:21:29.880 --> 0:21:32.520 I mean, Jensen's talked about manufacturing, but it's also about 0:21:32.640 --> 0:21:36.440 R and D and innovation and technology leadership. And if 0:21:36.480 --> 0:21:38.800 you think about where this world is going, and all 0:21:38.840 --> 0:21:42.840 those incredible devices are going to be built on nvidio platforms, robotics, 0:21:42.880 --> 0:21:47.480 autonomous vehicles, augmented reality, virtual reality, we need a different 0:21:47.560 --> 0:21:50.240 kind of network in the future, and that's what we realized, 0:21:50.600 --> 0:21:52.840 and that's why we wanted to forge this partnership so 0:21:52.880 --> 0:21:58.560 that we're building a network leveraging AI for AI services, 0:21:58.600 --> 0:22:00.120 and that's really the big change. 0:22:00.240 --> 0:22:02.399 And the technology is flowing both ways. I mean, what 0:22:02.480 --> 0:22:03.760 is it that you will be able to do with 0:22:03.840 --> 0:22:06.680 Nokia Jensen that you weren't able to do on your own. 0:22:06.920 --> 0:22:10.000 Well, first of all, Nokia is in all of the 0:22:10.000 --> 0:22:13.520 world's base stations, and this air scale platform of Nokia's 0:22:13.560 --> 0:22:15.919 and millions of base stations around the world. If our 0:22:15.960 --> 0:22:18.760 computers are not inside that base station doesn't help. It's 0:22:18.760 --> 0:22:21.639 no different than videos tech computing platforms not inside of 0:22:21.680 --> 0:22:23.960 cars doesn't help. And so the first thing is we 0:22:24.000 --> 0:22:26.360 need a partner to get us into the world's base stations. 0:22:26.800 --> 0:22:31.440 We also remember we're bringing AI to radio networks, AI 0:22:31.480 --> 0:22:34.880 to RAM so that we can make wireless tech communications 0:22:34.920 --> 0:22:38.960 a lot more efficient. Second, we're bringing AI for the radio, 0:22:39.080 --> 0:22:42.320 meaning on top of these radio networks and these telecommunication 0:22:42.600 --> 0:22:45.160 network we're going to be able to provide AI services, 0:22:45.400 --> 0:22:46.879 which is going to be able to make it easier 0:22:46.920 --> 0:22:49.920 for us to do robotics and autonomous vehicles and industrial 0:22:49.960 --> 0:22:53.639 automation and reach all of the different places around the world. 0:22:53.840 --> 0:22:57.040 That's kind of hard to do with Wi Fi, cellular reads, everything. 0:22:57.520 --> 0:23:00.320 And so we now have this fabric that we can 0:23:00.560 --> 0:23:05.119 deploy AI computing services on top of it. It's going 0:23:05.160 --> 0:23:06.400 to be completely revolutionary. 0:23:06.600 --> 0:23:10.240 That's in video. CEO Jensen Wong and Nokia CEO Justin 0:23:10.280 --> 0:23:13.640 Hotard speaking with Bloomberg zed Ludlow this week about their 0:23:13.680 --> 0:23:16.040 new partnership that has in Vidia taken a nearly three 0:23:16.119 --> 0:23:17.840 percent stake in Nokia. 0:23:18.240 --> 0:23:20.720 Now, I think what's interesting too. This past week, we 0:23:20.960 --> 0:23:24.680 did have a big Nvidia event, the GtC event in Washington, 0:23:24.760 --> 0:23:28.159 DC that they held, and we heard from Jensen Wong, right, 0:23:28.240 --> 0:23:30.320 the CEO of Nvidia, about a lot of stuff and 0:23:30.320 --> 0:23:32.320 a lot of things that move certainly the share price 0:23:32.359 --> 0:23:35.280 of Nvidia to the upside this past week, but a 0:23:35.280 --> 0:23:38.560 lot about relationships that it is forging and continues. But 0:23:39.119 --> 0:23:41.840 he did also say that the government has not offered 0:23:41.880 --> 0:23:44.480 to take a stake in their company and Vidia. 0:23:44.680 --> 0:23:48.119 Well, first for the moment, Carl, yes, can we afford it? 0:23:48.400 --> 0:23:50.320 Well, that's a good question. I mean, who do this 0:23:50.400 --> 0:23:51.160 movie come from. 0:23:51.240 --> 0:23:53.320 Obviously we could, we could afford it, but we're talking 0:23:53.359 --> 0:23:56.800 about a market cap company that this week hit five 0:23:56.880 --> 0:24:00.639 trillion dollars for the first time ever. It's also a 0:24:00.640 --> 0:24:04.080 little different than some of the other companies that the 0:24:04.200 --> 0:24:07.760 US has taken a stake in. It's not struggling. It 0:24:07.840 --> 0:24:11.120 basically prints cash. It has this incredible mote with its 0:24:11.200 --> 0:24:15.239 technology that AMD and Qualcom are trying to catch up 0:24:15.280 --> 0:24:19.320 with Right and others. So to me, it doesn't seem 0:24:19.359 --> 0:24:22.600 like the type of target that the US like. It 0:24:22.640 --> 0:24:23.840 doesn't need the US's help. 0:24:24.040 --> 0:24:25.280 Right doesn't need the support. 0:24:25.400 --> 0:24:25.959 It doesn't need this. 0:24:26.080 --> 0:24:30.160 It GE's doing. Didn't it hit five trillion? 0:24:30.280 --> 0:24:30.480 Yeah? 0:24:30.800 --> 0:24:33.800 Market cap this week? Yeah, I guess it's doing. Okay, Oh, 0:24:33.880 --> 0:24:35.960 you did say that. I just think it bears repeating. 0:24:36.040 --> 0:24:38.200 I'm just gonna say I do listen to you, Tim Hey. 0:24:38.200 --> 0:24:40.000 The other thing we should mention about when it comes 0:24:40.080 --> 0:24:43.240 to Nvidia, this was serious President Trump saying he didn't 0:24:43.280 --> 0:24:47.080 discuss approving sales of Nvidia's Blackwell chips to China with 0:24:47.160 --> 0:24:50.720 his counterpart, President xijimping. And that was one of the 0:24:50.760 --> 0:24:53.640 things that was part of the supposed to be part 0:24:53.720 --> 0:24:56.520 of the US China trade talks. But it was interesting. 0:24:56.560 --> 0:24:59.359 It was a big thing that was missing from whatever 0:24:59.400 --> 0:25:01.080 agreement they seem to come to. 0:25:01.560 --> 0:25:04.240 Well, speaking of trade, given the trade tensions between the 0:25:04.320 --> 0:25:06.880 US and many other parts of the world over this year. 0:25:07.240 --> 0:25:09.920 Some furniture makers have taken a big hit as a 0:25:10.000 --> 0:25:13.440 result of those tariffs, and the President says he does 0:25:13.560 --> 0:25:16.119 want to make more furniture here in the United States. 0:25:16.359 --> 0:25:18.000 That'll be good. That means I can buy more furniture. 0:25:18.000 --> 0:25:19.119 I hope my husband is listening. 0:25:19.240 --> 0:25:21.399 No, it means it's going to be more expensive, Darren. 0:25:21.680 --> 0:25:23.640 There is some beautiful stuff out of North Carolina. 0:25:23.640 --> 0:25:26.240 Though there is there always is. Hey, listen, We've got 0:25:26.240 --> 0:25:28.520 a great look at consumers spending, at least when it 0:25:28.560 --> 0:25:31.600 comes to things like couches, pillows, rugs, and all that 0:25:31.640 --> 0:25:34.640 good stuff, you know, home furnishings. The CFO of Wayfair, 0:25:34.920 --> 0:25:35.560 she joins us. 0:25:35.560 --> 0:25:39.000 Next, it still remains for us that the consumer is 0:25:39.080 --> 0:25:42.800 quite focused on promotional events, and so she you know, 0:25:42.800 --> 0:25:47.239 our consumers typically a woman, you know, mass market, and 0:25:47.320 --> 0:25:49.800 she needs those promotional events to really come in off 0:25:49.840 --> 0:25:53.159 the sidelines and get excited to shop. We've talked in 0:25:53.200 --> 0:25:55.760 the past about, you know, how the promotional events really 0:25:55.840 --> 0:25:58.760 work as a marketing banner to get someone interested in 0:25:58.800 --> 0:26:01.600 the category and to then bring them in to the site. 0:26:01.760 --> 0:26:03.919 And that is still the case. Those promotional events are 0:26:03.960 --> 0:26:07.200 pretty necessary to get the consumer engaged and excited. 0:26:07.520 --> 0:26:14.280 This is Bloomberg. This is Bloomberg Business Week Daily with 0:26:14.440 --> 0:26:18.199 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:26:19.080 --> 0:26:22.240 Assuming the Essential Bank would follow its second straight interest 0:26:22.280 --> 0:26:26.000 rate cut with another in December, that officials are divided 0:26:26.040 --> 0:26:29.240 about how much to ease as the ongoing government shutdown 0:26:29.280 --> 0:26:31.840 limits the economic data usually at the basis of the 0:26:31.920 --> 0:26:36.439 rates decision. It's not only that there's division, it's not 0:26:36.560 --> 0:26:39.600 even about how much to ease. Some think there shouldn't. 0:26:39.160 --> 0:26:42.639 Be any easy policymakers did, though, receive a delayed report 0:26:42.680 --> 0:26:45.280 last week on the consumer price index and the whole 0:26:45.320 --> 0:26:48.600 reason we got this report, Carol, social security, cost. 0:26:48.359 --> 0:26:50.600 Of living, Yeah, totally. I mean, these are employees go 0:26:50.720 --> 0:26:54.800 one off, well you know, yes, yes, but it's also 0:26:55.080 --> 0:26:58.639 like those folks are voters and so you kind of 0:26:58.640 --> 0:26:59.760 don't want to mess around with them. 0:27:00.119 --> 0:27:02.440 Did that report though, did show that underlying inflation rose 0:27:02.440 --> 0:27:05.399 in September at the slowest pace in three months. Is 0:27:05.440 --> 0:27:09.040 inflation slow and consumer spending and is it affecting earnings? 0:27:09.160 --> 0:27:11.040 Good couple of questions there. We've got a great look 0:27:11.119 --> 0:27:14.000 at one slice of how consumers are shopping. Wayfair reported 0:27:14.040 --> 0:27:17.480 third quarter results that easily topped expectations. On the call, 0:27:17.760 --> 0:27:20.760 company management gave guidance for the current quarter that topped 0:27:20.880 --> 0:27:24.520 consensus estimates, and they spent a lot of time talking 0:27:24.520 --> 0:27:28.560 with Allison investors talking about the company's efforts to use AI. 0:27:29.040 --> 0:27:31.720 We caught up with Wayfair CFO Kate Gulliver, who said 0:27:31.720 --> 0:27:34.640 that consumers are still spending money on furniture. 0:27:34.760 --> 0:27:37.280 We're obviously quite pleased with the third quarter results and 0:27:37.520 --> 0:27:40.560 the subsequent reaction to them, and I do think it shows, 0:27:40.720 --> 0:27:42.679 you know, all the work that we've been building to 0:27:42.720 --> 0:27:45.480 over the last few years and the enduring strength in 0:27:45.560 --> 0:27:47.640 the model. And so you saw that top line come 0:27:47.680 --> 0:27:51.840 in pretty nicely at eight percent nine percent adjusted for 0:27:51.920 --> 0:27:55.640 the German business, and that really is compounding share gains 0:27:55.680 --> 0:27:57.359 there on the top line, and that of course flowed 0:27:57.359 --> 0:27:59.600 through quite nicely to adjusted EBITA gains. 0:28:00.000 --> 0:28:03.400 We described the consumer, Yeah, you know. 0:28:04.280 --> 0:28:07.600 It still remains for us that the consumer is quite 0:28:07.600 --> 0:28:11.119 focused on promotional events and so she, you know, our 0:28:11.160 --> 0:28:15.600 consumers typically a woman, you know, mass market and she 0:28:15.720 --> 0:28:18.119 needs those promotional events to really come in off the 0:28:18.160 --> 0:28:21.479 sidelines and get excited to shop. We've talked in the 0:28:21.520 --> 0:28:24.200 past about you know how the promotional events really work 0:28:24.200 --> 0:28:27.080 as a marketing banner to get someone interested in the 0:28:27.119 --> 0:28:30.040 category and to then bring them into the site. And 0:28:30.080 --> 0:28:32.480 that is still the case. Those promotional events are pretty 0:28:32.520 --> 0:28:36.200 necessary to get the consumer engaged and excited. We do 0:28:36.280 --> 0:28:40.800 see relatively more strength than that higher end consumer for us, 0:28:40.800 --> 0:28:43.880 that's consumers that are transacting on our paragold site, which 0:28:43.920 --> 0:28:47.160 is our luxury brand or specialty retail brands. We've said 0:28:47.200 --> 0:28:49.920 that those are actually growing at a faster rate than 0:28:49.960 --> 0:28:52.520 the core wayfare dot com business. And you are seeing 0:28:52.560 --> 0:28:54.560 more strength in that consumer segment. 0:28:54.880 --> 0:28:57.600 Are you talked about promotions? You mentioned them. You have 0:28:57.600 --> 0:28:59.400 to get consumers excited. Do you have to get them 0:28:59.400 --> 0:29:02.960 more excited now than you did any other part of 0:29:03.000 --> 0:29:05.960 this year. We're really trying to understand the economic environment 0:29:06.040 --> 0:29:06.440 out there. 0:29:07.240 --> 0:29:10.680 You know what's interesting is this category in particular has 0:29:10.760 --> 0:29:14.840 been down for so long. So the category you know, 0:29:14.840 --> 0:29:17.480 obviously boom during COVID and then at a pretty significant 0:29:17.840 --> 0:29:22.080 significant pullback twenty two, twenty three, twenty four, So throughout 0:29:22.360 --> 0:29:25.120 you know, twenty four and twenty five for this category, 0:29:25.200 --> 0:29:29.120 promotions have been critical. You know, I would say what 0:29:29.160 --> 0:29:31.720 we have seen, you know, really throughout twenty five is 0:29:31.960 --> 0:29:34.920 there's also been some mix shift dynamics. In addition to 0:29:34.960 --> 0:29:38.640 sort of higher end consumer and mass market consumer. You 0:29:38.680 --> 0:29:41.920 do see consumers that are shopping are shopping for, you know, 0:29:42.000 --> 0:29:46.200 things like decorative accents, decors, you know, maybe things with 0:29:46.280 --> 0:29:49.320 a lower ticket than you know, buying a new couch 0:29:49.560 --> 0:29:51.760 or a new chair. And I think that's the idea. 0:29:51.840 --> 0:29:54.880 Someone wants to refresh and is excited about that, but 0:29:54.880 --> 0:29:56.800 they want to be mindful of how much they're spending, 0:29:56.800 --> 0:29:59.280 and so they're looking for the smaller pieces maybe opposed 0:29:59.320 --> 0:29:59.920 to the big piece. 0:30:00.120 --> 0:30:02.480 Well, you know, to that point, you know, Kate, I 0:30:02.480 --> 0:30:06.120 think about the pandemic. We realize that's the anomaly. I mean, 0:30:06.200 --> 0:30:08.080 I'm looking at your stock is up one hundred and 0:30:08.080 --> 0:30:10.400 forty two percent this year, which is quite a run, 0:30:10.520 --> 0:30:14.000 but it's still down about sixty nine percent from twenty 0:30:14.080 --> 0:30:17.840 twenty one. We know everyone was at home spending on 0:30:17.880 --> 0:30:20.520 their home. That's why people were working at at home, 0:30:20.840 --> 0:30:22.719 spending on their pets. There was a lot of stuff 0:30:22.760 --> 0:30:25.240 going on. So I am curious about when you look 0:30:25.280 --> 0:30:28.600 at the third quarter growth, how much came from intrinsic 0:30:28.760 --> 0:30:32.160 share capture versus category stabilization. Because it does sound like 0:30:32.360 --> 0:30:34.040 we're seeing a lot of stabilization here. 0:30:34.840 --> 0:30:38.000 It's a great question. We think the category itself is 0:30:38.120 --> 0:30:40.880 roughly flat to slightly down. So I do think the 0:30:40.920 --> 0:30:44.280 category has stabilized, and we see now we look at 0:30:44.320 --> 0:30:46.960 a variety of different data sources and you know, they're 0:30:46.960 --> 0:30:50.160 all slightly different, but they coalesce around a flatish category. 0:30:50.520 --> 0:30:52.880 This is in contrast to last year where the category 0:30:53.000 --> 0:30:55.840 was down maybe you know, mid single digits to high 0:30:55.880 --> 0:30:58.960 single digits. So that's certainly an improvement, but we don't 0:30:59.040 --> 0:31:01.960 yet see the category is having returned to growth. So 0:31:02.120 --> 0:31:04.720 when we look at sort of eight percent growth, right, 0:31:04.800 --> 0:31:08.560 that's definitely us gaining share on a category that is say, flatish. 0:31:08.920 --> 0:31:12.600 When consumers are buying from Wayfair, are they buying to 0:31:12.680 --> 0:31:16.040 replace stuff or is this trade up activity? What is 0:31:16.240 --> 0:31:18.320 what is the data telling us or telling you? 0:31:19.200 --> 0:31:21.520 Yeah, that's a that's a great question. We're certainly starting 0:31:21.560 --> 0:31:23.640 to you know, hear that a bit from folks. You know, 0:31:23.720 --> 0:31:28.200 have we hit replacement cycles? And really to the conversation 0:31:28.280 --> 0:31:30.280 we were having around the pandemic, it speaks to so 0:31:30.440 --> 0:31:32.800 much of the pull forward and demand that happened during 0:31:32.840 --> 0:31:36.600 that pandemic. Period. You know, I think we see a 0:31:36.600 --> 0:31:40.920 few things that drive you know, purchase events. One is moving, 0:31:40.960 --> 0:31:43.160 and obviously that part of the category has still been 0:31:43.280 --> 0:31:46.680 you know, quite suppressed. One would be life cycle changes. 0:31:46.760 --> 0:31:49.320 So you know, your kid, you had a baby, and 0:31:49.360 --> 0:31:51.520 now they're moving into a toddler bed, or the kids 0:31:51.600 --> 0:31:54.280 leaving the home and you're turning their betterment into an office, 0:31:54.280 --> 0:31:56.600 so sort of as your life cycle evolves, regardless of 0:31:56.600 --> 0:31:59.200 if you're moving. And then a third would be you know, 0:31:59.360 --> 0:32:03.000 replacement categories or sort of you know, juging up your room. 0:32:03.720 --> 0:32:05.680 In replacement cycles, I think a lot of folks are 0:32:05.680 --> 0:32:07.600 eager to see if you know, what was bought in 0:32:07.640 --> 0:32:10.240 twenty twenty and twenty twenty one needs to be replaced 0:32:10.280 --> 0:32:12.400 at this time. And I think what's helpful to understand 0:32:12.400 --> 0:32:15.480 there is there's this very category by category specifics. So 0:32:16.080 --> 0:32:19.840 if you bought you know, opening price point outdoor furniture 0:32:20.880 --> 0:32:23.640 and you live in the Northeast, maybe five years is 0:32:23.920 --> 0:32:26.880 you know an appropriate timeframe. But if you bought a 0:32:27.040 --> 0:32:30.160 you know, nice couch, you know you're certainly not hitting 0:32:30.160 --> 0:32:32.040 the replacement cycle on that yet. 0:32:32.280 --> 0:32:34.160 I got to say, I love Jijing. I love buying 0:32:34.160 --> 0:32:36.120 pillows but I'm afraid if I bring any more pillows home, 0:32:36.120 --> 0:32:37.960 my husband's going to divorce me because he's like, I 0:32:37.960 --> 0:32:41.160 can't even fire is bad. I can't find the bed anymore. Hey, listen, 0:32:41.200 --> 0:32:44.240 you talk Kate about the higher end brands like Paragold. 0:32:44.360 --> 0:32:47.600 You're seeing some strengths certainly in that area. I am 0:32:47.640 --> 0:32:51.280 curious too about your retail expansion, the physical store retail 0:32:51.320 --> 0:32:56.240 expansion or your loyalty program, if that's adding incremental customers 0:32:56.360 --> 0:32:59.760 versus shifting existing digital ones. What are you seeing on 0:32:59.800 --> 0:33:00.360 that front. 0:33:01.080 --> 0:33:03.920 Yeah, great question. So on the physical retail side, we 0:33:04.080 --> 0:33:07.960 are adding incremental customers. We're actually seeing in our first 0:33:08.040 --> 0:33:10.840 large format Wayfare store that's been opened for a little 0:33:10.880 --> 0:33:13.280 over a year now, more than fifty percent of the 0:33:13.280 --> 0:33:15.880 folks who are transacting in that store are actually new 0:33:15.920 --> 0:33:18.320 to the customer file. We have a one hundred million 0:33:18.360 --> 0:33:21.239 customer file right so to be getting new customers at 0:33:21.240 --> 0:33:23.880 this stage is pretty exciting. So it's definitely acting as 0:33:23.920 --> 0:33:27.600 a way into the brand Paragold. We actually just opened 0:33:27.600 --> 0:33:30.680 two stores for Paragold. So we open one in Houston 0:33:30.720 --> 0:33:33.240 in the spring or of early summer, and then we 0:33:33.400 --> 0:33:35.840 just opened in West Palm Beach in Florida a week ago. 0:33:36.440 --> 0:33:38.400 So it's very early days on those stores, but we 0:33:38.440 --> 0:33:40.880 do think that they should work as a nice customer 0:33:40.960 --> 0:33:45.600 acquisition channel. The loyalty program, which is about a year old, 0:33:45.880 --> 0:33:49.120 I would say that's acting more for existing customers to 0:33:49.160 --> 0:33:51.680 get them to be increasingly sticky with us. So what 0:33:51.720 --> 0:33:56.080 we're seeing from loyalty customers is nice incrementality, meaning you know, 0:33:56.080 --> 0:33:57.840 if they were going to purchase, you know, six or 0:33:57.840 --> 0:33:59.800 eight times a year, and maybe they're buying one to 0:33:59.800 --> 0:34:02.440 two from us. Hopefully we're getting that next purchase that's 0:34:02.480 --> 0:34:03.880 second or third purchase as well. 0:34:03.920 --> 0:34:07.400 Now, Kate on the layoffs that we've heard from other 0:34:07.440 --> 0:34:10.840 companies just in recent days. Amazon planning to eliminate roughly 0:34:10.880 --> 0:34:14.400 fourteen thousand corporate jobs. This as Andy jasse Warren that 0:34:14.440 --> 0:34:17.399 AI will shrink the company's workforce. You have a twenty 0:34:17.400 --> 0:34:20.640 five hundred person tech team. How are you thinking about headcount? 0:34:20.680 --> 0:34:24.080 Are you re allocating headcount toward AI applications or are 0:34:24.120 --> 0:34:26.520 productivity gains allowing you to do more with a similar 0:34:26.560 --> 0:34:28.080 cost base. What are the numbers there? 0:34:29.280 --> 0:34:31.839 Yeah, it's a great question. Actually, our CTO, Fiona tan 0:34:32.040 --> 0:34:34.359 was on our earnings called this morning speaking to some 0:34:34.640 --> 0:34:36.560 of what we're seeing from AI, both on the top 0:34:36.560 --> 0:34:39.279 line perspective and where we're going with you know, personalization, 0:34:39.600 --> 0:34:43.480 but also on you know efficiency. Every employee in the company, 0:34:43.840 --> 0:34:46.440 not just in tech, is actually enabled with AI you 0:34:46.480 --> 0:34:49.560 know tools and AI resources, and right now what we're 0:34:49.560 --> 0:34:52.920 seeing is really nice you know efficiency and enhancements to 0:34:53.080 --> 0:34:56.880 individual employee work. And then in different pockets throughout the company, 0:34:56.880 --> 0:35:00.000 including within tech, you know, as we use more specialized 0:35:00.200 --> 0:35:03.200 dayye tools, you see you know, uptakeing efficiency there. I 0:35:03.239 --> 0:35:05.319 frequently actually talk about our legal team, so not a 0:35:05.360 --> 0:35:07.799 tech team, but a team that you know, has been 0:35:07.840 --> 0:35:11.319 able to adopt AI quite rapidly for document review and 0:35:11.360 --> 0:35:14.160 the ability for them to sort of manage, for example, 0:35:14.200 --> 0:35:16.840 increase lease load as we've been expanding the physical retail 0:35:16.880 --> 0:35:21.520 network without having to add incremental folks has been pretty impressive, 0:35:21.960 --> 0:35:23.920 and so we certainly are seeing gains you know, from 0:35:24.000 --> 0:35:24.680 that efficiency. 0:35:24.719 --> 0:35:27.120 Internally, Hey, do you feel like, though, in this environment 0:35:27.160 --> 0:35:28.719 that you want to be lean and mean? I mean, 0:35:28.760 --> 0:35:30.360 I guess I feel like all companies want to be 0:35:30.400 --> 0:35:32.680 lean and mean, Kate, But I do wonder if you're seeing, 0:35:33.200 --> 0:35:34.919 you know, as you look down the road. We are 0:35:34.920 --> 0:35:39.200 in this funny environment funny not funny, haha, but funny 0:35:39.200 --> 0:35:42.040 difficult in that with the government shutdown, we're not getting data. 0:35:42.040 --> 0:35:44.480 So we're trying to figure out by talking to folks 0:35:44.560 --> 0:35:47.880 like you, where we are in our economy. So do 0:35:47.920 --> 0:35:50.320 you feel like there's pressure to be leaner and meaner 0:35:51.160 --> 0:35:53.759 that maybe I don't know a month ago or so, 0:35:54.040 --> 0:35:56.439 or you feel more confident about what's kind of coming 0:35:56.480 --> 0:35:57.160 down the road here? 0:35:58.480 --> 0:36:00.239 You know, I think you firmed it wellcome Beryl, and 0:36:00.239 --> 0:36:02.400 who said you should always feel you know the importance 0:36:02.400 --> 0:36:05.000 of being lean. I mean, we're a mass market retailer, right, 0:36:05.080 --> 0:36:09.080 We operate on basis points of margin, so we absolutely 0:36:09.160 --> 0:36:12.320 need to be men highly focused on cost at all times, 0:36:12.360 --> 0:36:15.080 regardless of the macro that we're operating in. And over 0:36:15.120 --> 0:36:16.960 the last several years you saw us go through a 0:36:17.040 --> 0:36:20.600 number of restructurings frankly to bring down that overhead cost 0:36:20.640 --> 0:36:23.600 pretty significantly. Our most recent restructuring was actually March of 0:36:23.600 --> 0:36:26.839 this year. We're to the conversation on tech employees. We 0:36:26.880 --> 0:36:29.160 did lay off some of our tech team as we 0:36:29.239 --> 0:36:33.120 completed our replatforming exercise, and we're able to actually increase 0:36:33.160 --> 0:36:36.319 some efficiency on that team point in more of those resources, 0:36:36.360 --> 0:36:39.239 you know, towards AI, et cetera, as they have stayed. So, 0:36:39.440 --> 0:36:41.680 you know, we continue to be quite focused on efficiency 0:36:41.719 --> 0:36:44.080 and efficiency gains. We feel good about, you know, where 0:36:44.120 --> 0:36:46.040 the team is right now and the efficiency that we're 0:36:46.040 --> 0:36:48.279 seeing from that operating team. But that comes on the 0:36:48.320 --> 0:36:51.160 heels of you know, several rounds of restructuring over the 0:36:51.239 --> 0:36:52.280 last twenty four months. 0:36:52.320 --> 0:36:54.319 Well on AI. On the consumer side, when it comes 0:36:54.360 --> 0:36:56.719 to AI, I'm wondering about the traction from use and 0:36:56.800 --> 0:37:01.359 decorify the decorating platform the new pilot. How has that 0:37:01.440 --> 0:37:05.520 been with shoppers so far? Is it driving broader consumer 0:37:05.560 --> 0:37:07.160 adoption of AI lead design? 0:37:08.600 --> 0:37:13.160 Yeah, so we've tested out a number of AI you 0:37:13.200 --> 0:37:15.719 know tooling as it relates to how the consumer can 0:37:15.800 --> 0:37:20.160 experience our website. We offer millions of different skews across 0:37:20.160 --> 0:37:22.640 thousands of suppliers, across a wide range of styles. So 0:37:22.800 --> 0:37:26.880 the holy grail is really personalization. And how do you know, 0:37:26.960 --> 0:37:28.960 all three of us maybe searching for, you know, the 0:37:29.080 --> 0:37:31.160 throw pillows for the bed that Carol was talking about, 0:37:31.320 --> 0:37:33.480 and we all may have a different aesthetic, So how 0:37:33.480 --> 0:37:35.080 do we land on the site and get to our 0:37:35.160 --> 0:37:38.920 aesthetic as fast as possible to glorify. And you know, 0:37:38.960 --> 0:37:40.720 now we have a tab on the app called Discover. 0:37:41.080 --> 0:37:44.319 These are ways for individuals to sort of browse and 0:37:44.440 --> 0:37:47.279 engage in a way that should be more personalized for them, 0:37:47.280 --> 0:37:50.080 and we do see great engagement there. But even on 0:37:50.200 --> 0:37:51.839 you know, the main part of the app, so not 0:37:51.960 --> 0:37:54.040 using one of these specialized tools or the main part 0:37:54.080 --> 0:37:56.799 of the website, we were using generative AI to make 0:37:56.800 --> 0:37:59.560 that experience better. We spoke on the call this morning 0:38:00.080 --> 0:38:04.880 about combining generator of AI from a merchandising perspective with 0:38:05.080 --> 0:38:08.800 actually human designers. And for folks that landed on those 0:38:08.880 --> 0:38:11.880 SKUs that were the combo of the boat, we saw 0:38:12.320 --> 0:38:15.360 a third uplift and sort of engagement with that skew. 0:38:15.719 --> 0:38:18.040 That's really exciting because that means that sku is probably 0:38:18.040 --> 0:38:19.960 far more relevant to you than where you were going 0:38:19.960 --> 0:38:20.680 to land before. 0:38:20.960 --> 0:38:23.960 That was wayfair cfo K Gulliver joining us from Boston. 0:38:24.360 --> 0:38:27.080 After earnings, many financial firms raise their price targets on 0:38:27.120 --> 0:38:31.040 the stock, including Goldman, Sacks, JP, Morgan, Stiefel, City, Needham 0:38:31.120 --> 0:38:31.600 and more. 0:38:31.880 --> 0:38:33.480 And that wraps up our first hour of the weekend 0:38:33.600 --> 0:38:36.480 edition of Bloomberg Business Week from Bloomberg Radio Ahead. In 0:38:36.520 --> 0:38:39.600 our next sixty minutes, Jimmy Wales, the founder of Wikipedia, 0:38:39.640 --> 0:38:43.520 on building trust in today's very skeptical world. 0:38:43.880 --> 0:38:48.600 Plus where's the beef Next? Yeah, we catch up with 0:38:48.640 --> 0:38:51.680 the founder and CEO of the jerky company Archer and 0:38:51.760 --> 0:38:52.120 the New. 0:38:52.040 --> 0:38:55.200 York City Marathon yep, it is running this weekend. An 0:38:55.239 --> 0:38:58.800 inside view from one runner and the individual behind the event. 0:38:58.920 --> 0:39:00.960 By the way, he's already were working on next year's. 0:39:01.200 --> 0:39:03.719 This is Bloomberg Business Week. I'm Carol Masser and. 0:39:03.680 --> 0:39:06.840 I'm Tim Stenovek. Stay with us. More from Bloomberg Business 0:39:06.840 --> 0:39:13.400 Week Daily coming up after this. 0:39:13.400 --> 0:39:17.759 This is Bloomberg Business Week Daily, reporting from the magazine 0:39:17.760 --> 0:39:22.360 that helps global leaders stay ahead. With insight on the people, companies, 0:39:22.400 --> 0:39:27.280 and trends shaping today's complex economy. Plus global business, finance 0:39:27.320 --> 0:39:30.879 and tech news as it happens. Bloomberg Business Week Daily 0:39:31.200 --> 0:39:36.600 with Carol Masser and Tim Stenevek on Bloomberg Radio Funny Ahead. 0:39:36.360 --> 0:39:38.440 In our second hour of the weekend edition of Bloomberg 0:39:38.480 --> 0:39:42.560 Business Week, Including protein is the New nutrition fad, We 0:39:42.600 --> 0:39:45.040 talk with the founder of a grass fed beef and 0:39:45.160 --> 0:39:48.960 all natural Turkey beef stick company say that five times fast. 0:39:49.120 --> 0:39:50.480 I was going to and then I decided not. 0:39:50.920 --> 0:39:51.799 It's a tough line. 0:39:52.480 --> 0:39:55.600 Plus it's one of the world's biggest races. The CEO 0:39:55.760 --> 0:39:58.319 of New York road Runners talks about putting on the 0:39:58.360 --> 0:40:01.560 New York City Marathon. It is how opening this weekend. 0:40:01.640 --> 0:40:04.279 It is indeed first up this hour. Wikipedia has a 0:40:04.360 --> 0:40:08.960 unique place in online culture, before AI, before chat ChiPT 0:40:09.360 --> 0:40:11.200 if you needed a quick place to get an overview 0:40:11.239 --> 0:40:15.040 on almost any topic, you go to Google, and then 0:40:15.080 --> 0:40:18.200 you'd click on Wikipedia. It's almost too good to be true. 0:40:18.200 --> 0:40:22.120 In today's world. It is built on trust and community 0:40:22.800 --> 0:40:24.080 all online. 0:40:24.560 --> 0:40:26.960 We talk about it a lot in media, in business 0:40:26.960 --> 0:40:30.400 with friends and family, and most definitely in politics. Jimmy 0:40:30.400 --> 0:40:33.040 Whale's founder of Wikipedia, knows a thing or two about trust. 0:40:33.200 --> 0:40:35.120 He's got a new book out. It's called These Seven 0:40:35.200 --> 0:40:38.080 Rules of Trust, a Blueprint for building Things that Last. 0:40:38.360 --> 0:40:40.120 We sat down with them this week in the Bloomberg 0:40:40.160 --> 0:40:43.080 Business Week Daily Studio, and we wanted to know why 0:40:43.120 --> 0:40:46.160 Wikipedia works in a world where so many people don't 0:40:46.200 --> 0:40:48.680 trust one another, and they don't trust what they see. 0:40:49.200 --> 0:40:51.520 That issue of trust is something he's been thinking about. 0:40:51.840 --> 0:40:55.520 It was a couple of years ago I had had 0:40:55.560 --> 0:41:00.040 some ideas around this, and yeah, just just started and 0:41:00.080 --> 0:41:03.560 it's obviously turned out to be quite timely, as we 0:41:03.600 --> 0:41:06.719 have a lot of issues around trust in society, and 0:41:07.560 --> 0:41:09.600 you know, I want to encourage people to let's get 0:41:09.640 --> 0:41:11.720 back to society of trust. 0:41:12.280 --> 0:41:12.440 You know. 0:41:12.480 --> 0:41:14.160 It's funny, Carolyn, I spent a lot of time talking 0:41:14.200 --> 0:41:18.080 about this ahead of the interview because Wikipedia sort of 0:41:18.080 --> 0:41:20.399 seems and look, it's had its challenges. Of course, it's 0:41:20.400 --> 0:41:25.200 had its controversies, but for things that are online, it's 0:41:25.280 --> 0:41:27.080 kind of as weird utopia. 0:41:26.840 --> 0:41:28.640 In the sense that it's kind of remarkable. 0:41:29.000 --> 0:41:33.080 It's really remarkable. I mean, we know anonymous people online 0:41:33.160 --> 0:41:35.440 are oftentimes are full of bitrio and hate. We can 0:41:35.480 --> 0:41:38.560 see that even when people use their names on social 0:41:38.600 --> 0:41:42.280 media platforms. We lock our doors when we leave the house. 0:41:42.920 --> 0:41:46.960 Why does trust work on Wikipedia? But kind of seems 0:41:47.000 --> 0:41:48.080 like nowhere else right now? 0:41:48.360 --> 0:41:50.200 Yeah, I mean I think for me, you know, one 0:41:50.200 --> 0:41:53.480 of the seven rules of trust that is most meaningful 0:41:53.520 --> 0:41:56.640 in that regard is purpose. Like Wikipedia has a very 0:41:56.640 --> 0:41:59.840 simple purpose, which is to build an encyclopedia, and we 0:41:59.840 --> 0:42:03.240 may all our decisions around that, and the rules about 0:42:03.320 --> 0:42:07.080 participation and so forth. And that's very different from social media, 0:42:07.120 --> 0:42:10.560 where there isn't a clear purpose other than free speech 0:42:10.560 --> 0:42:16.720 and openness, and therefore that toxicity really creeps in quite 0:42:16.760 --> 0:42:20.280 a lot in social media. You know, people say outrageous 0:42:20.360 --> 0:42:23.240 things because they get rewarded for it. They get more followers, 0:42:23.239 --> 0:42:26.080 they get more engagement, and they algorithms love that. 0:42:26.120 --> 0:42:27.560 You talk about clickbait all the time. 0:42:27.480 --> 0:42:30.920 Clickbait all the time, And you know, that's very different 0:42:30.920 --> 0:42:33.320 from the world of Wikipedia, where I mean, thank goodness, 0:42:33.320 --> 0:42:35.480 our headlines are so boring. 0:42:35.520 --> 0:42:36.320 There's no clickbait. 0:42:36.360 --> 0:42:39.640 You know, it's like the erical on Thomas Jefferson's called 0:42:39.840 --> 0:42:42.319 Thomas Jefferson, you know, but it does what it says 0:42:42.320 --> 0:42:43.920 on the den. You know, that's a that's a very 0:42:43.920 --> 0:42:47.279 British expression, afraid. But but yeah, I mean, I do 0:42:47.320 --> 0:42:50.040 think that that having a simple purpose is a part 0:42:50.040 --> 0:42:52.840 of what keeps us focused and keeps our community focused. 0:42:53.040 --> 0:42:56.040 How do you describe facts? How do you determine facts? 0:42:56.040 --> 0:42:59.279 And I am amazed in I mean, I've been doing 0:42:59.280 --> 0:43:03.000 this a few years and I felt like when I started, 0:43:03.040 --> 0:43:06.239 it was very clear fact versus ficion in terms of 0:43:06.600 --> 0:43:09.799 reporting and doing stories. And I feel like there's a 0:43:09.800 --> 0:43:11.480 lot of great area and I just feel like a 0:43:11.560 --> 0:43:14.120 fact is a fact. So how do you guys determine 0:43:14.160 --> 0:43:15.319 what's a fact in an entry? 0:43:15.400 --> 0:43:17.840 Yeah, I mean we're really old fashioned, Like what we 0:43:17.920 --> 0:43:21.680 look for are reliable sources. So we want, you know, 0:43:22.840 --> 0:43:28.480 sort of academic research or quality newspapers, quality magazines, quality books. 0:43:29.760 --> 0:43:34.160 Really old fashioned and you know, the idea that we 0:43:34.160 --> 0:43:37.120 should treat you know, the New England Journal of Medicine 0:43:37.160 --> 0:43:40.719 as the same as social media influence our line is 0:43:40.760 --> 0:43:43.839 obviously just wrong. Like you really want facts, and that's 0:43:43.840 --> 0:43:45.400 what people want from Wikipedia. 0:43:45.440 --> 0:43:46.360 They don't want. 0:43:47.239 --> 0:43:48.239 Sources matter us. 0:43:48.400 --> 0:43:51.920 Sources really matter, Like having a good quality source is 0:43:51.960 --> 0:43:52.720 what it's all about. 0:43:52.920 --> 0:43:56.400 But why don't sources matter to everybody? And other people 0:43:56.440 --> 0:44:01.960 will say, Okay, I believe this source is reliable, so 0:44:02.120 --> 0:44:03.920 like you know what I mean, like when we're living 0:44:03.960 --> 0:44:04.399 in like. 0:44:04.560 --> 0:44:07.239 Different worlds, I think, I think, and I think that's 0:44:07.239 --> 0:44:10.239 a huge problem. I mean, I do think, you know, 0:44:10.600 --> 0:44:13.000 it's really important. I mean one of the problems that 0:44:13.040 --> 0:44:15.759 we've seen is that a lot of the media, in 0:44:15.800 --> 0:44:20.799 response to the changing and very difficult financial model for journalism, 0:44:21.280 --> 0:44:24.680 they've chased after a really partisan audiences, and so, you know, 0:44:24.760 --> 0:44:28.680 sometimes you read something and you're like, yeah, that was 0:44:28.760 --> 0:44:30.560 that was interesting, that was good, But I'm not sure 0:44:30.640 --> 0:44:33.319 I got both sides of the story there. I live 0:44:33.360 --> 0:44:35.880 in the UK and we have a just an example, 0:44:35.960 --> 0:44:39.319 two quality newspapers, the Guardian and the Telegraph, left leaning, 0:44:39.400 --> 0:44:42.799 right leaning. They're both great newspapers. But I often read 0:44:42.800 --> 0:44:44.799 one and I'm like, oh, but and then I go 0:44:44.840 --> 0:44:46.760 read the other and I'm like, yeah, you probably should 0:44:46.760 --> 0:44:49.480 have been somewhere in the middle, both of you, and 0:44:49.520 --> 0:44:51.719 it would have been I think a better story had 0:44:51.760 --> 0:44:54.680 you said, well, you know, we got one side of 0:44:54.680 --> 0:44:56.920 the story, but we actually had to go out and 0:44:57.000 --> 0:44:59.120 find somebody to tell us a little bit about the others. 0:44:59.160 --> 0:45:02.000 And you know, you can't be to like the moon 0:45:02.160 --> 0:45:03.640 is made of rocks or is it cheese? 0:45:03.680 --> 0:45:04.040 Who knows? 0:45:04.080 --> 0:45:08.040 I don't mean that, but seriously hopefully geez. But but 0:45:08.080 --> 0:45:10.600 you know, like seriously thinking about like who are we 0:45:10.640 --> 0:45:12.200 talking to and are we are we getting to the 0:45:12.239 --> 0:45:12.799 bottom of this. 0:45:13.520 --> 0:45:16.080 With media, with trust and media here in the United 0:45:16.080 --> 0:45:18.600 States declining and having declined over the last few years, 0:45:19.239 --> 0:45:21.400 in your view, is there something that we can do 0:45:21.440 --> 0:45:23.279 better that the media can do better that it can 0:45:23.320 --> 0:45:26.200 borrow from what has worked at Wikipedia, what has worked 0:45:26.239 --> 0:45:28.640 with the trust, the methods of trust that you've studied, 0:45:28.920 --> 0:45:31.719 that can make us build trust again with our audiences. 0:45:31.880 --> 0:45:32.080 Yeah. 0:45:32.080 --> 0:45:34.480 I mean, well, the good news is that the financial press, 0:45:34.719 --> 0:45:38.200 like Bloomberg, is still among the most trusted. And I 0:45:38.200 --> 0:45:41.560 think that's because by the mandate of what you're trying 0:45:41.560 --> 0:45:44.480 to do informing business people and investors, you have to 0:45:44.520 --> 0:45:48.560 be like ruthlessly objective. You're not chasing after partisan audiences 0:45:48.560 --> 0:45:50.080 and things like that. But I do think we gets 0:45:50.120 --> 0:45:53.920 up data, big data. Data is important transparency. I think, 0:45:54.200 --> 0:45:57.840 you know, realistically, you know, one of the things that 0:45:57.840 --> 0:46:00.799 Wikipedia does that's kind of odd is we'll have a 0:46:01.080 --> 0:46:02.920 you know, at the top of a page the neutrality 0:46:02.960 --> 0:46:05.279 of this article has been disputed, and I we've all 0:46:05.320 --> 0:46:05.600 seen it. 0:46:05.760 --> 0:46:06.560 Yeah, we've all seen it. 0:46:06.560 --> 0:46:08.399 And I always say, you know, I kind of wish 0:46:08.480 --> 0:46:10.319 sometimes the New York Times would put a banner up 0:46:10.480 --> 0:46:12.120 just saying, you know, we had a big fight. 0:46:12.040 --> 0:46:12.600 In the newsroom. 0:46:12.600 --> 0:46:16.399 We weren't quite sure, so we decided to this. But yeah, yeah, 0:46:16.400 --> 0:46:18.600 but here's a little bit of their inside thinking, like 0:46:18.640 --> 0:46:20.640 we did want to report this, We're not sure we've 0:46:20.640 --> 0:46:24.000 got the full story yet, because that pretending to be 0:46:24.360 --> 0:46:27.279 perfection all the time. People see through that, and they know, 0:46:27.520 --> 0:46:30.400 of course, and I think they're willing to say, yeah, like, actually, 0:46:30.440 --> 0:46:32.799 journalism is quite hard, you know, so a little more 0:46:32.800 --> 0:46:34.000 transparency is always good. 0:46:34.360 --> 0:46:38.920 Do you get pressure a lot from companies, politicians, individuals 0:46:39.600 --> 0:46:40.919 to like change an entry? 0:46:41.080 --> 0:46:41.319 No? 0:46:41.400 --> 0:46:41.839 Not really. 0:46:41.840 --> 0:46:43.680 I mean people, Uh, you know, I meet a lot 0:46:43.680 --> 0:46:45.319 of people and people often are like, well, you know 0:46:45.360 --> 0:46:47.160 my Wikipedia entry, what about this? 0:46:47.200 --> 0:46:47.600 What about that? 0:46:48.280 --> 0:46:50.000 Yeah, send us an email, like you know, we'll have 0:46:50.040 --> 0:46:52.480 somebody look at that. That's all fine in general. Note 0:46:52.440 --> 0:46:53.240 and actually we're. 0:46:53.120 --> 0:46:55.320 Very you really to say, just send them an email 0:46:55.360 --> 0:46:56.560 and I'm not going to do anything about it. 0:46:57.000 --> 0:46:59.400 Kind of yeah, okay, but no, sometimes people have a 0:46:59.480 --> 0:47:01.480 legitimate point. They're like, oh, well, you know I did 0:47:01.520 --> 0:47:03.000 this thing and it was in the press, and you 0:47:03.080 --> 0:47:04.880 know it's like, okay, well maybe we just overlooked it, 0:47:04.920 --> 0:47:07.759 and that's that's great, But you know they at a 0:47:07.920 --> 0:47:10.680 deeper level. One of the things that's really important is, 0:47:11.560 --> 0:47:15.120 you know, we aren't funded by governments, we aren't funded 0:47:15.120 --> 0:47:18.719 by sort of major donors. We're funded by people giving 0:47:18.719 --> 0:47:21.840 their twenty dollars and that makes a big difference for 0:47:21.880 --> 0:47:25.399 our intellectual independence. We're not worried like if we've got 0:47:25.440 --> 0:47:28.400 something negative about whatever, then we might lose our donation. 0:47:28.920 --> 0:47:31.400 How is how is the fundraising going? Because I feel 0:47:31.400 --> 0:47:33.360 like I've gotten a lot of messages from you throughout 0:47:33.360 --> 0:47:37.000 the years, through the from Jimmy Wills on Wikipedia, We've 0:47:37.000 --> 0:47:38.880 all seen it. We're all is it going okay? Is 0:47:38.880 --> 0:47:39.760 funding going? Okay? 0:47:39.800 --> 0:47:40.240 It's okay. 0:47:40.320 --> 0:47:43.600 Yeah, We've we've been h you know, we're stable, We're 0:47:43.719 --> 0:47:46.280 very cautious with money, so we always try to build 0:47:46.280 --> 0:47:49.040 our reserves and so on. And then you know, recently, 0:47:49.160 --> 0:47:52.799 I don't know, Elon tweeted defund Wikipedia. I think we 0:47:52.880 --> 0:47:54.480 were about five million dollars that day. 0:47:54.560 --> 0:47:56.319 So you know, so you can text us. 0:47:56.640 --> 0:47:58.520 You know, you guys have been in touch you and say, 0:47:58.520 --> 0:47:59.399 tweet about us again. 0:48:01.239 --> 0:48:03.360 Well, you have had some convers raise money. You have 0:48:03.480 --> 0:48:06.400 had some conversations with Elon over the years. All right, 0:48:06.400 --> 0:48:08.880 we're continuing at Jimmy Wales, founder of Wikipedia. He's got 0:48:08.880 --> 0:48:11.200 a new book out, it's out tomorrow, The Seven Rules 0:48:11.200 --> 0:48:16.160 of Trust, a blueprint for building things that last. Elon Musk, 0:48:16.520 --> 0:48:19.719 You've had an ongoing relationship or text relationship with him. 0:48:19.719 --> 0:48:21.480 I've known him for years. 0:48:21.520 --> 0:48:25.440 Actually, now anything old, aren't we all? I like to think, 0:48:25.520 --> 0:48:28.480 like a fine wine just getting better. But he has 0:48:28.520 --> 0:48:31.719 talked about defunding Wikipedia, and you said, you know that 0:48:31.800 --> 0:48:33.800 has brought in a lot of money, So thank you, Elon. 0:48:34.320 --> 0:48:36.399 What are the conversations that you've had with him back 0:48:36.400 --> 0:48:36.920 and forth? 0:48:37.960 --> 0:48:41.640 I mean, you know, he believes Wikipedia has become Wikipedia, 0:48:41.840 --> 0:48:45.960 which is not true. And you know, I encourage him 0:48:46.000 --> 0:48:48.720 to sort of a better messages. 0:48:48.360 --> 0:48:50.680 To say, if you feel like Wikipedia. 0:48:50.200 --> 0:48:53.200 Has got some bias, encourage people to come and participate 0:48:53.239 --> 0:48:55.239 people who agree with you. Don't paint us as like, 0:48:55.440 --> 0:48:58.000 oh they've gone their crazy left wing activists or something 0:48:58.000 --> 0:49:01.000 we aren't. And by the way, he's so encouraging crazy 0:49:01.000 --> 0:49:03.080 lifting activists to come and bother us, and that's not 0:49:03.120 --> 0:49:07.480 good either. So you know, realistically, I can't predict what 0:49:07.680 --> 0:49:09.960 Elon's going to say or do. He's Elon. You know, 0:49:10.040 --> 0:49:10.879 he does what he likes. 0:49:10.920 --> 0:49:14.400 Well, what's he like? One on one? You were and 0:49:14.480 --> 0:49:17.239 work to be fully transparent. We listened to a podcast 0:49:17.280 --> 0:49:19.360 and I think you brought up something about like Elon 0:49:19.440 --> 0:49:22.680 one on one versus Elon. He's always been per former. 0:49:22.760 --> 0:49:24.920 Yeah, he's always been very nice to me in private 0:49:24.920 --> 0:49:27.759 and you know, civil and so forth. And I've met 0:49:27.840 --> 0:49:30.279 him in person a few times, and yeah, and then 0:49:30.320 --> 0:49:32.960 he's a huge public persona and a huge public character, 0:49:33.040 --> 0:49:35.759 and sometimes I just I slightly ignore that because I'm like, oh, 0:49:35.800 --> 0:49:38.200 he's just being elon in public. If I ran into him, 0:49:38.239 --> 0:49:39.680 I think we would have a very friendly chat. 0:49:40.680 --> 0:49:44.040 You know. Over the last twenty plus years, Wikipedia has 0:49:44.080 --> 0:49:48.719 had has kind of lived on despite massive changes with technology. 0:49:48.719 --> 0:49:50.680 We're undergoing one right now with AI and the way 0:49:50.680 --> 0:49:53.640 that people are using lms. You have said that you 0:49:53.680 --> 0:49:57.000 are building Wikipedia to last one hundred more years. How 0:49:57.000 --> 0:49:58.439 do you ensure that you do that when you don't 0:49:58.440 --> 0:49:59.879 even know what technology will be around? 0:50:00.440 --> 0:50:01.960 Well, it's true, we have no idea. 0:50:02.160 --> 0:50:06.640 So all we can do is preserve our intellectual independence, 0:50:06.760 --> 0:50:08.520 keep an eye on the finances, to make sure we're 0:50:08.520 --> 0:50:12.399 not vulnerable, uh, you know, be open and keep our 0:50:12.440 --> 0:50:15.520 community's mind open and active to say, oh, how do 0:50:15.560 --> 0:50:17.480 we adapt to new technology? Is there things here we 0:50:17.480 --> 0:50:21.040 could use? What can we do to preserve our mission, 0:50:21.040 --> 0:50:22.520 which is free knowledge for everyone? 0:50:22.719 --> 0:50:25.080 That was Jimmy Wales, the founder of Wikipedia, on his 0:50:25.320 --> 0:50:28.319 new book, The Seven Rules of Trust, a blueprint for 0:50:28.360 --> 0:50:29.480 building things that last. 0:50:29.719 --> 0:50:32.520 You're listening to Bloomberg Business Week coming up. Got to 0:50:32.560 --> 0:50:35.840 get the protein in as many ways as possible. Everybody's 0:50:35.840 --> 0:50:36.600 talking about protein. 0:50:36.600 --> 0:50:36.960 I don't know. 0:50:37.000 --> 0:50:39.160 I grew up with my family like you always had protein, 0:50:39.239 --> 0:50:41.520 Like you knew that that was part of a healthy diet. 0:50:41.560 --> 0:50:44.759 But anyway, did you see we got what protein? And 0:50:44.800 --> 0:50:45.400 pop tarts? 0:50:45.880 --> 0:50:46.160 Yeah? 0:50:46.200 --> 0:50:47.080 Well I don't even get that. 0:50:47.160 --> 0:50:48.759 Okay, we did, sorry pop tarts. But there's all that, 0:50:49.040 --> 0:50:52.760 like the even the nice like organic quote unquote organic 0:50:52.800 --> 0:50:55.879 fig bars have protein. They have a new version out 0:50:55.880 --> 0:50:58.120 with extra protein. It's all about the GLP ones. What 0:50:58.239 --> 0:50:59.960 is I know exactly we want their protein? 0:51:00.200 --> 0:51:02.799 Anyway, on this we had a great conversation. We caught 0:51:02.880 --> 0:51:05.440 up with Eugene Kang. He is founder and CEO of 0:51:05.440 --> 0:51:09.400 the meat stick company Archer Meat. I ate actually a 0:51:09.480 --> 0:51:09.960 meat sticky. 0:51:10.080 --> 0:51:12.279 You didn't get you a conversation. I went upstairs. I 0:51:12.280 --> 0:51:13.920 got meat sticks for everybody? 0:51:13.960 --> 0:51:14.200 Did. 0:51:15.080 --> 0:51:15.920 This is Bloomberg. 0:51:19.560 --> 0:51:23.759 This is Bloomberg Business Week Daily with Carol Masser and 0:51:23.800 --> 0:51:26.360 Tim Steneveek on Bloomberg Radio. 0:51:27.560 --> 0:51:31.520 Protein. In the words of Derek Zulander, so hot. 0:51:31.320 --> 0:51:33.760 Right now or Paris Hilton, that's hot. 0:51:34.480 --> 0:51:35.959 We don't know if you saw this last week, Carol, 0:51:36.000 --> 0:51:37.680 but I know you did. Actually, I know you saw 0:51:37.680 --> 0:51:40.080 this because you mentioned it earlier. I did the protein 0:51:40.120 --> 0:51:44.960 and the pop tarts. Yeah, yeah, bizarre, listen, but I 0:51:45.080 --> 0:51:46.040 protein pop tarts. 0:51:46.080 --> 0:51:48.160 But I do feel like we're turning around products and 0:51:48.160 --> 0:51:52.239 we're looking for some key things like fiber or protein 0:51:52.600 --> 0:51:54.880 or you know what I'm saying, Yeah, some vitamins or something. 0:51:54.880 --> 0:51:56.640 We are doing that by protein and everything. 0:51:56.680 --> 0:51:59.480 What PepsiCo said they have plans for a higher protein 0:51:59.560 --> 0:52:00.440 version of ritos. 0:52:00.960 --> 0:52:03.440 I mean, come on, come on. 0:52:03.640 --> 0:52:06.399 Okay, Elsewhere protein is being outed to popcorn, pasta, bread, 0:52:06.440 --> 0:52:09.919 cookie dough, ice cream, and macaroni and cheese. I kind 0:52:09.920 --> 0:52:12.200 of want to go old school though, the original source 0:52:12.239 --> 0:52:12.680 of protein. 0:52:12.760 --> 0:52:14.400 We talked about this a lot in the newsroom today. 0:52:14.920 --> 0:52:17.120 Ganga is all about this. He's found in ceo of Archer. 0:52:17.160 --> 0:52:19.520 It makes meat sticks from grass fed beef and all 0:52:19.600 --> 0:52:24.440 natural turkey. He joins us from LA talk about timing, Eugene. 0:52:24.960 --> 0:52:28.000 How are you leaning into the protein craze right now? 0:52:28.560 --> 0:52:29.240 Is this what people? 0:52:30.400 --> 0:52:30.640 Yeah? 0:52:30.680 --> 0:52:34.839 Thanks for having me on, Tim McCarroll and yeah, absolutely protein. Look, 0:52:34.880 --> 0:52:38.400 it's been around for a while, and particularly meat snacks 0:52:38.400 --> 0:52:41.040 and protein is the hottest sort of trend right now, 0:52:41.080 --> 0:52:43.239 and we're really we're really proud of the fact that, 0:52:43.280 --> 0:52:45.560 you know, meat snacks is kind of an original kind 0:52:45.560 --> 0:52:47.960 of source right of protein, and you don't have to 0:52:48.000 --> 0:52:50.120 add necessarily protein to it like some of the other 0:52:50.200 --> 0:52:51.880 innovations that you guys got to noted earlier. 0:52:52.239 --> 0:52:56.160 So we we know you are the official meat snack 0:52:56.239 --> 0:53:01.360 partner of the La Dodgers. You're a Dodger fan. Dodgers 0:53:01.400 --> 0:53:06.240 are playing tonight Game one of the World Series. Ellie 0:53:06.280 --> 0:53:09.239 Dodgers at Toronto Blue Jays your startup though, How did 0:53:09.239 --> 0:53:10.560 the partnership come together like this? 0:53:11.920 --> 0:53:14.399 Yeah, you know, we there was a couple of other 0:53:14.680 --> 0:53:17.600 consumer brands that were partnered with the Dodgers last year, 0:53:18.239 --> 0:53:20.719 most notably health Fate Kombucha, which is one of the 0:53:20.760 --> 0:53:23.600 largest kombucha brands in the country. So we had kind 0:53:23.640 --> 0:53:26.080 of reached out to the Dodgers saying, hey, look, we're 0:53:26.120 --> 0:53:30.640 looking to build potentially a bigger production facility in LA. 0:53:31.239 --> 0:53:33.880 We're growing our business pretty rapidly, doesn't make sense to 0:53:33.960 --> 0:53:36.520 kind of partner up, and they absolutely loved it. 0:53:36.560 --> 0:53:37.480 Thought it was a great idea. 0:53:37.560 --> 0:53:40.400 So I got to work quickly on a partnership framework 0:53:40.640 --> 0:53:43.560 earlier in the year around spring training, and you know, 0:53:43.680 --> 0:53:45.239 kind of summit to it right before the season starts. 0:53:45.280 --> 0:53:46.719 Do you guys pay for that or do you offer 0:53:46.760 --> 0:53:50.000 a deal on like Like I've always wondered how the 0:53:50.000 --> 0:53:51.960 finances of this stuff works. Take us into the numbers. 0:53:52.000 --> 0:53:54.640 Yeah, yeah, I know, we do pay for it, but 0:53:54.719 --> 0:53:57.880 in return, we obviously get you know, advertisement throughout the stadium, 0:53:58.280 --> 0:54:01.840 products sold in the concession stand, available in the clubhouse. 0:54:01.840 --> 0:54:04.080 So I think there's a few notable Dodgers that are 0:54:04.080 --> 0:54:09.160 probably eating our protein snacks as well. And you know, 0:54:09.200 --> 0:54:11.160 we also get to use sort of their collateral or 0:54:11.200 --> 0:54:13.640 their assets on a lot of more collateral for the 0:54:13.680 --> 0:54:17.239 broader Southern California market, whether it's displays or any kind 0:54:17.280 --> 0:54:18.200 of retail programming. 0:54:18.480 --> 0:54:21.080 Hey, talk to us more broadly, because you guys are 0:54:21.080 --> 0:54:26.040 in Costco, Whole Foods, Walmart, Starbucks, Targets seven eleven. I mean, 0:54:26.080 --> 0:54:27.440 if we're on a road trip, I mean that is 0:54:27.440 --> 0:54:30.600 certainly one of the snacks people pick up. Talk to 0:54:30.680 --> 0:54:34.000 us about the growth that you are seeing in the marketplace. 0:54:35.320 --> 0:54:36.719 Yeah, the growth has been incredible. 0:54:37.160 --> 0:54:39.400 What's incredible. We love numbers here. 0:54:39.400 --> 0:54:42.160 We're growing one hundred percent year every year. You know, 0:54:43.080 --> 0:54:45.719 you know, we're approaching close to over five hundred million 0:54:45.800 --> 0:54:48.280 revenue in the next twelve months. You know, we were 0:54:48.760 --> 0:54:51.000 a little over one hundred million two years ago. So 0:54:51.880 --> 0:54:55.799 growth has been absolutely incredible for us. You know, the category, 0:54:55.880 --> 0:54:59.640 obviously because of US, is doing incredibly well. You know, 0:54:59.680 --> 0:55:02.759 PREMI sort of better for you brands have really just 0:55:02.800 --> 0:55:05.920 taken over sort of the zeitgeist with consumers, and you know, 0:55:06.160 --> 0:55:08.400 we benefit not only from the premium better for you 0:55:08.520 --> 0:55:09.960 side of it, but also the fact that we were 0:55:09.960 --> 0:55:12.400 a portable, dense protein pack snack. 0:55:13.760 --> 0:55:15.799 You know, I'm I'm how do you? How do you 0:55:15.840 --> 0:55:19.560 do this? I'm wondering about funding and bootstrapping versus raising money. 0:55:19.640 --> 0:55:22.959 The growth the new facility that you are opening soon 0:55:24.320 --> 0:55:27.280 in Vernon, California, the one that you just opened excuse 0:55:27.320 --> 0:55:31.200 me earlier this month. Did you take on external funding 0:55:31.239 --> 0:55:31.440 for this? 0:55:32.960 --> 0:55:35.000 We took on debt, but I mean we are we're 0:55:35.000 --> 0:55:37.799 cash flowing, We're you know, we're profitable. So for us, 0:55:37.840 --> 0:55:40.360 it was you know, we weren't We didn't have to 0:55:40.360 --> 0:55:41.800 necessarily raise equity or anything. 0:55:41.840 --> 0:55:42.080 Like that. 0:55:42.280 --> 0:55:46.040 We do have a private equity growth investor that wash 0:55:46.200 --> 0:55:48.400 that came in early on in our life stage. Okay, 0:55:49.400 --> 0:55:50.799 no institutional funding as of. 0:55:51.160 --> 0:55:53.279 The private equity investor. So how much do they own? 0:55:54.920 --> 0:55:57.960 They own a minority stake in the business. You know, 0:55:58.040 --> 0:56:01.759 my partner and I still own majority steak, but there 0:56:01.960 --> 0:56:04.040 they are kind of shoulders shoulder in terms of like 0:56:04.080 --> 0:56:06.200 sort of ownership structure. 0:56:06.600 --> 0:56:09.839 I'm curious in a world of GLP one drugs and 0:56:09.920 --> 0:56:12.720 people you know, looking to lose weight, they are losing 0:56:12.760 --> 0:56:16.759 weight thinking about their diet, how is that impacting you 0:56:16.840 --> 0:56:18.440 if at all? And I'm looking at you know, you've 0:56:18.440 --> 0:56:21.640 got a grass fed beef jerky, a classic zero sugar, 0:56:21.960 --> 0:56:25.400 So I'm just curious how you're adapting and just talk 0:56:25.400 --> 0:56:27.440 to us little bit about the impact if there is any. 0:56:28.200 --> 0:56:30.480 Yeah, you know, we haven't seen an impact in a 0:56:30.520 --> 0:56:33.960 negative way. If anything's been positive. We're not able to 0:56:34.040 --> 0:56:37.719 quantitatively tie our brand performance to GLP one, but will 0:56:37.760 --> 0:56:40.040 we Studies have shown that, you know, folks that are 0:56:40.200 --> 0:56:43.040 on GLP one adopt to meet snacks at a much 0:56:43.080 --> 0:56:46.040 higher rate because they're just i think seeking a bit 0:56:46.080 --> 0:56:48.879 more protein in general on their diet. Post GLP one. 0:56:48.960 --> 0:56:50.920 So for us, we feel like it's a it's a 0:56:50.920 --> 0:56:52.800 major tail wind for our business. 0:56:53.440 --> 0:56:57.240 Got to talk beef prices. US beef prices have skyrocketed 0:56:57.239 --> 0:57:00.560 to record levels. It's challenged the President's pledged to make 0:57:00.600 --> 0:57:04.880 groceries more affordable. Earlier this week, the President attacked US 0:57:04.960 --> 0:57:07.560 cattle ranchers over their criticism of his plan to slash 0:57:07.600 --> 0:57:10.839 record beef prices by importing sydniafinitely more tara free meat 0:57:10.880 --> 0:57:14.400 from Argentina. How much have your prices gone up? Not 0:57:14.520 --> 0:57:16.840 the prices that you reflect to consumers, I'm like talking 0:57:16.920 --> 0:57:19.480 the prices you pay for the for the beef product. 0:57:20.240 --> 0:57:20.520 Yeah. 0:57:20.560 --> 0:57:22.640 So we we kind of knew early on that the 0:57:22.680 --> 0:57:24.840 beef prices were going to be as high as a were. 0:57:25.320 --> 0:57:27.440 If you look at we look at cattle reports a 0:57:27.560 --> 0:57:30.720 year out and this time last year, it was clear 0:57:30.800 --> 0:57:34.720 that the domestic cattle herd is actually kind of thinning out, 0:57:34.840 --> 0:57:36.560 just given all the record droughts that we've had in 0:57:36.600 --> 0:57:38.840 the last few years. And so if you think about 0:57:39.120 --> 0:57:42.240 you know, cattle herd thinning out, you know, potentially a 0:57:42.320 --> 0:57:44.720 trade war, it's all being going to spell disaster. Right, 0:57:44.760 --> 0:57:47.040 So we were able to hedge our commodities for the 0:57:47.080 --> 0:57:50.760 full year, so we were somewhat not going to say 0:57:50.760 --> 0:57:53.920 completely insulated, but somewhat insulated. And obviously we did see 0:57:53.960 --> 0:57:56.000 his spike in pricing for sure on the beef price. 0:57:56.040 --> 0:57:59.040 But anyone that would tell you that the beef price 0:57:59.080 --> 0:58:00.600 is from an industry respect it was coming out of 0:58:00.600 --> 0:58:03.320 his left field, is I would be very shocked to 0:58:03.360 --> 0:58:05.400 find out. I think everyone knew that this day was coming. 0:58:05.720 --> 0:58:08.040 I don't think the average consumer knew was coming, but 0:58:08.360 --> 0:58:10.320 I think most folks that were in the industry about 0:58:10.320 --> 0:58:11.919 a year ago knew that this was kind of coming 0:58:11.920 --> 0:58:12.400 down the pocket. 0:58:12.440 --> 0:58:13.640 Can you give us an idea of how much your 0:58:13.720 --> 0:58:16.520 rop costs would have gone up had you not hedge? 0:58:16.600 --> 0:58:23.240 Though we're talking record prices right now, so I think, wow, 0:58:24.160 --> 0:58:27.120 that's pretty amazing. I mean, kudos for hedging. 0:58:28.120 --> 0:58:33.000 Yeah, yeah, I'm curious about the process, Like, so you're 0:58:33.000 --> 0:58:36.800 doing this all here in the US, correct all of it? 0:58:37.160 --> 0:58:37.240 So? 0:58:37.520 --> 0:58:41.800 Is it robot robots? Is there humans involved? 0:58:41.800 --> 0:58:41.880 Like? 0:58:41.880 --> 0:58:42.880 What's what's involved? 0:58:43.200 --> 0:58:44.000 They not robots? 0:58:44.080 --> 0:58:47.360 No, I know the cares are not yet, but tell us, 0:58:47.400 --> 0:58:49.560 like what the process is because I'm just figuring out 0:58:49.560 --> 0:58:51.600 your costs? Is it is beef the biggest or give 0:58:51.680 --> 0:58:53.480 us a little bit of what the business is. 0:58:53.920 --> 0:58:56.840 By far the biggest. So we have manufacturing plants that 0:58:56.880 --> 0:58:59.400 we own, and then we also have co manufacturing partner 0:58:59.440 --> 0:59:02.560 STRUFF that throughout the country as well. I'd say there 0:59:02.600 --> 0:59:06.040 is labor involved, for sure, there is some automation depending 0:59:06.080 --> 0:59:07.800 on part of the process that I think about. We're 0:59:07.800 --> 0:59:10.240 bringing in raw beef, right, We're not doing any kind 0:59:10.240 --> 0:59:12.480 of slaughtering or anything like that. It's all just raw 0:59:12.520 --> 0:59:15.480 beef that comes into our processing plants. Everything is either 0:59:15.520 --> 0:59:19.040 grinded or cut. It's cooked in a big, big oven 0:59:19.080 --> 0:59:22.720 that you can imagine, and then from there it's packaged out, 0:59:22.720 --> 0:59:25.720 whether it's individually wrapped like a beef stick or a 0:59:25.760 --> 0:59:27.720 beef trikey that's in you know, bits and pieces in 0:59:28.160 --> 0:59:32.360 a sort of receivable pouch. You know, parts of the packaging. 0:59:32.440 --> 0:59:35.440 Most of the packaging process is automated. I would obviously 0:59:35.520 --> 0:59:38.520 say that the raw kind of processing handling of the 0:59:38.560 --> 0:59:43.120 product is still somewhat requires it' required labor, but that's 0:59:43.160 --> 0:59:45.640 also got a lot of efficiencies in machinery there. 0:59:45.680 --> 0:59:48.440 So okay, all right, interesting, you know, it's interesting, you know, 0:59:48.480 --> 0:59:50.840 as we hear you talking you talk about your growth rates. 0:59:50.880 --> 0:59:54.040 I mean there were go back a few years even 0:59:54.080 --> 0:59:56.440 before GLP one, that people were trying to cut back 0:59:57.000 --> 0:59:59.360 on their consumption of beef. And I think, you know, 0:59:59.440 --> 1:00:01.920 people even you know you shouldn't have it too often, 1:00:02.240 --> 1:00:05.640 and it feels like people are really into your product. 1:00:05.800 --> 1:00:07.440 You know, what's changed? Do you think? 1:00:08.680 --> 1:00:08.880 You know? 1:00:09.040 --> 1:00:12.320 I think I don't think anything's changed. I think it's accelerated. 1:00:12.360 --> 1:00:15.600 I think our thesis from the very beginning was, you know, 1:00:15.760 --> 1:00:19.440 we are sourcing high quality premium beef, right, so it's 1:00:19.440 --> 1:00:22.280 all one hundred percent grass fed, pasture rays. And so 1:00:22.400 --> 1:00:24.840 for us, we had this thesis like, look, if you're 1:00:24.880 --> 1:00:27.840 gonna eat protein and beef, please make sure you're you're 1:00:28.160 --> 1:00:31.040 eating the right highest quality of protein. And so I 1:00:31.080 --> 1:00:33.960 think that trend line has converged where the consumer is today, 1:00:34.000 --> 1:00:36.280 and I think folks are realizing, like, you know, hey, 1:00:36.280 --> 1:00:38.640 look there's nothing wrong with feeding animal based protein, but 1:00:38.680 --> 1:00:41.040 if you're gonna eat it, make sure you're sourcing, you know, 1:00:41.120 --> 1:00:42.880 the highest quality, because we think that's better for you, 1:00:42.920 --> 1:00:46.000 whether it's antibiotic free, free range, grass fed, et cetera. 1:00:46.560 --> 1:00:49.120 We're speaking with Eugen Kang. We're speaking with Eugene Kang. 1:00:49.200 --> 1:00:51.440 He's the founder and CEO of Archer makes meat sticks 1:00:51.440 --> 1:00:54.280 from grass fed beef and all natural turkey. Joins us 1:00:54.320 --> 1:00:58.800 from LA. What's the product pipeline look like beyond turkey, 1:00:58.840 --> 1:00:59.400 beyond beef. 1:01:00.240 --> 1:01:02.840 Yeah, Look, I think we launched a really cool bison 1:01:02.960 --> 1:01:07.880 pasture raised bison jerky and whole foods and sprouts nationwide. 1:01:07.760 --> 1:01:09.760 Kind of Beisenberger. They're kind of good. 1:01:11.120 --> 1:01:13.800 Bison's really fun. Not not a lot of source for it, so, 1:01:13.880 --> 1:01:16.800 you know, harder scale. Look, look, we're exploring other protein 1:01:16.840 --> 1:01:20.320 alternatives right other animals in whether it's the stick or 1:01:20.440 --> 1:01:24.400 meat or beef jerky or jerky format. I'd say for us, 1:01:24.640 --> 1:01:28.120 given the growth, we actually feel like a lot of 1:01:28.120 --> 1:01:30.880 our sort of white space is still in distribution. I mean, 1:01:31.240 --> 1:01:34.560 convenience channel is you know, roughly thirty to forty percent 1:01:34.560 --> 1:01:36.480 of the overall meats in that category, and we play 1:01:36.520 --> 1:01:38.160 in less than one percent of it today, So we 1:01:38.160 --> 1:01:41.440 think there's big white space there, a lot of you know, 1:01:41.520 --> 1:01:43.360 despite all the store counts that we're in today, we 1:01:43.400 --> 1:01:45.720 actually think there's still plenty of distribution to go get 1:01:45.880 --> 1:01:48.600 in our current format and then continue to innovate on 1:01:48.680 --> 1:01:51.920 the pack format, right, Like, this consumer is completely new 1:01:51.960 --> 1:01:53.840 to the category despite it being a category it's been 1:01:53.880 --> 1:01:56.520 around for twenty years. Like our consumers that we brought 1:01:56.560 --> 1:02:00.000 in through this like premiumization, this better for you position 1:02:00.720 --> 1:02:03.720 is entirely incremental, and so for us, it's like, Okay, 1:02:03.800 --> 1:02:06.800 how do we think about new unique platformats to meet 1:02:06.840 --> 1:02:09.000 the consumer where they are given the US education And 1:02:09.320 --> 1:02:11.160 that's kind of our view right now. 1:02:11.200 --> 1:02:15.160 Just very briefly. Competition, there's no shortage. You've got Chomps, 1:02:15.320 --> 1:02:19.720 You've got Vermont, that's just a couple country. You got 1:02:19.720 --> 1:02:21.680 other ones as well. I mean those are the two 1:02:21.680 --> 1:02:23.880 on the tip of my tongue. How do you stand out? 1:02:24.640 --> 1:02:27.360 Yeah, I mean we're the fourth largest in the country. 1:02:28.080 --> 1:02:31.280 You know, we are right behind the big conventional stalwarts 1:02:31.560 --> 1:02:34.520 like a jack Link's like a slim Gym. Those are 1:02:34.560 --> 1:02:38.440 more conventionally positioned and they're like legacy brands. Chomps is 1:02:38.880 --> 1:02:41.560 a phenomenal brand as well. I mean we are kind 1:02:41.600 --> 1:02:43.600 of neck and neck in terms of like size and 1:02:43.680 --> 1:02:46.320 scale and ultimately driving a lot of the growth. 1:02:46.320 --> 1:02:49.080 Frankly in the category. I would actually argue that. 1:02:49.040 --> 1:02:51.880 If you removed us in Chumps from the ecosystem, the 1:02:52.080 --> 1:02:54.160 category wouldn't be growing as fast as it would be, So. 1:02:54.320 --> 1:02:57.920 Eugene, that's really quick ten seconds. You're going to go 1:02:57.920 --> 1:02:59.560 it alone? Or are you looking for someone to buy 1:02:59.560 --> 1:03:00.280 you guys out? 1:03:02.480 --> 1:03:07.040 Like the company has been built on scalability and sustainability, 1:03:07.080 --> 1:03:10.000 and for us, you know, we're always open to options, right. 1:03:10.240 --> 1:03:13.320 That was Eugene Gang, founder and CEO of the meatstick company. 1:03:13.480 --> 1:03:16.920 Archer still Ad on Bloomberg Business Week. Over fifty five 1:03:17.040 --> 1:03:20.080 thousand runners we'll be pounding the pavement for the New 1:03:20.160 --> 1:03:23.320 York City Marathon this weekend. We talked to the CEO 1:03:23.440 --> 1:03:24.440 behind it all. 1:03:24.480 --> 1:03:25.600 This is Bloomberg. 1:03:27.960 --> 1:03:31.800 You're listening to the Bloomberg Business Week Daily Podcast. Catch 1:03:31.880 --> 1:03:35.080 us live weekday afternoons from two to five eastering. Listen 1:03:35.120 --> 1:03:38.680 on Applecarplay and Android Auto with the Bloomberg Business app, 1:03:38.840 --> 1:03:41.000 or watch us live on YouTube. 1:03:42.200 --> 1:03:45.160 This weekend, more than fifty five thousand people from all 1:03:45.160 --> 1:03:47.040 over the world, we'll take to the streets of New 1:03:47.120 --> 1:03:49.440 York City to run the more than twenty six miles 1:03:49.480 --> 1:03:51.360 through the five boroughs of the city. 1:03:51.800 --> 1:03:53.400 You know someone who's going to be running in it. 1:03:53.840 --> 1:03:55.680 My wife is doing it this year. She's wanted to 1:03:55.720 --> 1:03:57.480 do it for years. Really she is. 1:03:57.600 --> 1:03:58.760 Yeah, that's so much, is it? 1:03:59.000 --> 1:04:01.680 Kid's gotten the way of planning for this over the 1:04:01.760 --> 1:04:04.600 last two years, but she's finally making it happen. We're 1:04:04.600 --> 1:04:06.120 excited to cheer for her, and you guys should all 1:04:06.200 --> 1:04:08.560 cheer for her too when you see her running. We've 1:04:08.600 --> 1:04:12.040 got with us Rob Similcare, CEO of New York road Runners. 1:04:12.080 --> 1:04:15.680 It's the nonprofit that puts on the TCS New York Marathon. 1:04:15.760 --> 1:04:18.160 He joins us from New York. Rob, good to have 1:04:18.200 --> 1:04:20.320 you with us. The Roadrunners. You guys do stuff throughout 1:04:20.320 --> 1:04:22.760 the year, but no question. Do you pretty much start 1:04:22.760 --> 1:04:26.720 planning the marathon the Monday after the Sunday of the marathon. 1:04:27.080 --> 1:04:28.160 No, we don't wait that long. 1:04:28.240 --> 1:04:31.160 We've already been planning the twenty twenty six marathon now 1:04:31.200 --> 1:04:34.440 for several months. So yeah, we get out more than 1:04:34.440 --> 1:04:38.080 a year ahead because this is a massive operation, as 1:04:38.120 --> 1:04:41.320 you can imagine, more than fifty five thousand runners going 1:04:41.360 --> 1:04:44.800 from Staten Island to Central Park, and we've got hundreds 1:04:44.840 --> 1:04:48.960 of staff, thousands of volunteers involved in this, so it's 1:04:49.000 --> 1:04:50.560 really like a military operation. 1:04:50.800 --> 1:04:53.160 And the planning begins more than a year out. 1:04:53.200 --> 1:04:56.840 It's pretty remarkable for anyone who has not seen it. 1:04:56.840 --> 1:04:59.640 It's I think it's actually one of the best days 1:04:59.640 --> 1:05:00.720 to be New York City. 1:05:00.760 --> 1:05:02.360 It's pretty cool, right, Oh. 1:05:02.520 --> 1:05:06.560 I mean I always get I get like goosebumps when 1:05:06.600 --> 1:05:10.120 I watch because it's like everybody is so happy, even 1:05:10.120 --> 1:05:12.240 though some of them look like they're in pain. It's 1:05:12.280 --> 1:05:14.920 pretty well, we just never see. It's the way that 1:05:14.960 --> 1:05:17.600 New Yorkers come together in a way that I can't 1:05:17.600 --> 1:05:19.360 believe I'm selling this thing, but I mean I find 1:05:20.360 --> 1:05:22.480 in every year a friend who comes in every year 1:05:22.480 --> 1:05:24.520 to do it, and he runs marathons all over the world, 1:05:24.600 --> 1:05:26.760 and he's like, there is nothing like the New York 1:05:26.760 --> 1:05:27.440 City Marathon. 1:05:27.640 --> 1:05:29.320 Rob, Why do you think that is the case? 1:05:30.160 --> 1:05:32.560 I just think that, you know, he said it in 1:05:32.600 --> 1:05:35.440 a way, it's a day that New Yorkers come out 1:05:35.480 --> 1:05:38.360 to cheer for total strangers. You know, you don't see 1:05:38.360 --> 1:05:40.680 that every day in a city like New York. We're 1:05:40.720 --> 1:05:43.320 known to be pretty tough. New York can be a 1:05:43.360 --> 1:05:46.120 tough place to live, and you know, we're obviously all 1:05:46.160 --> 1:05:47.720 really tough people in New York City. 1:05:47.720 --> 1:05:49.160 That's part of what makes this New Yorkers. 1:05:49.200 --> 1:05:51.240 But it's the day that we come out, we cheer 1:05:51.280 --> 1:05:54.200 for strangers, whether they're from down the block or across 1:05:54.240 --> 1:05:58.320 the world, because I think everybody respects what it takes 1:05:58.360 --> 1:06:02.720 to run twenty six point two miles, and everybody wants 1:06:02.760 --> 1:06:05.360 them to succeed. You know, we're not rooting against anybody. 1:06:05.360 --> 1:06:07.800 We're rooting for everyone. And we may be out there 1:06:07.800 --> 1:06:10.520 to see our spouse or our colleague or our friend, 1:06:10.720 --> 1:06:13.560 but every person who passes, we're rooting for them to 1:06:13.600 --> 1:06:15.680 succeed in their goal or reaching the finish line. 1:06:15.680 --> 1:06:18.680 So fifty five thousand people all over the world, how 1:06:18.720 --> 1:06:21.880 many people like actually reach out to be a part 1:06:21.880 --> 1:06:23.640 of this. I'm assuming that there is a number that 1:06:23.680 --> 1:06:24.960 you guys just don't want to exceed. 1:06:25.280 --> 1:06:28.080 Yeah, that's right. I mean this year we had over. 1:06:27.920 --> 1:06:32.280 Two hundred thousand applications to our drawing, so that was 1:06:32.520 --> 1:06:35.240 a big number. We also have a countless number of 1:06:35.240 --> 1:06:38.880 requests coming in for people to run for charities or 1:06:39.080 --> 1:06:42.240 other organizations in the marathon. So the interest level, if 1:06:42.280 --> 1:06:44.440 you add it all up, is probably close to half 1:06:44.480 --> 1:06:47.600 a million people who would like to run the marathon 1:06:47.640 --> 1:06:48.680 and reach out to try to. 1:06:48.640 --> 1:06:49.360 Do it every year. 1:06:49.840 --> 1:06:52.880 We obviously want to keep the number to a number 1:06:52.920 --> 1:06:55.400 that we think is manageable. So this year we're going 1:06:55.440 --> 1:06:59.040 to be in that fifty five thousand plus range to 1:06:59.080 --> 1:07:00.840 make sure that everybody has a great day. But we're 1:07:00.840 --> 1:07:04.000 always looking for ways to get more people into the marathon, 1:07:04.240 --> 1:07:06.960 and the application window for next year is already open. 1:07:07.000 --> 1:07:09.280 You can already apply to be a part of our 1:07:09.320 --> 1:07:12.600 Team for Kids charity team for twenty twenty six on 1:07:12.640 --> 1:07:14.439 our website and YRR dot org. 1:07:14.640 --> 1:07:16.720 We also have a sweepstakes going on right now. 1:07:16.760 --> 1:07:20.000 You can enter to buy a chance to get free 1:07:20.160 --> 1:07:22.920 entry for you and a friend into the marathon next year, 1:07:23.000 --> 1:07:25.400 and the proceeds from that go to support our nonprofit 1:07:25.760 --> 1:07:28.000 mission to get kids and adults running in New York. 1:07:28.080 --> 1:07:30.320 Yeah, it is really it's really hard to get into, Carol. 1:07:30.320 --> 1:07:31.960 I mean my wife did because we live in New York. 1:07:32.040 --> 1:07:33.960 She did the New York road Runners. I think it's 1:07:34.040 --> 1:07:36.040 nine plus one, Is that right? Rob? 1:07:36.280 --> 1:07:36.760 That's right? 1:07:37.000 --> 1:07:38.000 But do you still do this? 1:07:38.200 --> 1:07:38.840 Do you still do that? 1:07:39.040 --> 1:07:39.960 Or yeah? We do? 1:07:40.040 --> 1:07:42.000 Okay, explain how that works for New Yorkers. 1:07:41.760 --> 1:07:43.400 You're in the Yeah, if you're in the New York 1:07:43.440 --> 1:07:45.880 area and you run nine races in a calendar year, 1:07:46.000 --> 1:07:49.160 plus volunteer at one of them, you are guaranteed entry 1:07:49.200 --> 1:07:50.440 into the next year's marathon. 1:07:50.480 --> 1:07:52.040 So that's one of the most popular. 1:07:51.680 --> 1:07:54.720 Ways to get in and obviously favors New York City 1:07:54.760 --> 1:07:55.640 area residents. 1:07:55.920 --> 1:07:57.400 And yeah, we had a lot of people get in 1:07:57.400 --> 1:07:57.680 that way. 1:07:57.720 --> 1:08:00.280 Okay, so let's talk economic impact here, because I got 1:08:00.280 --> 1:08:02.160 my buddy coming in. It comes in every year. This time, 1:08:02.160 --> 1:08:04.240 he's not coming in solo. He's bringing his two kids, 1:08:04.400 --> 1:08:07.240 he's bringing his wife. They're staying at a fancy hotel 1:08:07.720 --> 1:08:10.919 in Midtown. They're gonna make a vacation of it. He's 1:08:10.920 --> 1:08:13.720 going to drop some serious coin to do that. I 1:08:13.720 --> 1:08:16.200 imagine the New York City Marathon has a huge economic 1:08:16.200 --> 1:08:17.000 effect on the city. 1:08:17.200 --> 1:08:17.400 Yes. 1:08:17.479 --> 1:08:20.840 In fact, we just completed a study about a month 1:08:20.880 --> 1:08:24.320 ago on the economic impact of the marathon. 1:08:23.960 --> 1:08:26.519 And New York Roadrunners across the board on New York. 1:08:26.400 --> 1:08:30.280 City, and we found that the marathon contributes just about 1:08:30.320 --> 1:08:33.760 seven hundred million dollars a year to the economy of 1:08:33.800 --> 1:08:36.840 New York City. All year, New York Roadrunners, with our 1:08:36.880 --> 1:08:40.080 other races and events, contributes close to a billion dollars. 1:08:40.120 --> 1:08:43.200 And so that's actually more economic impact than all of 1:08:43.240 --> 1:08:46.759 the Mets and Yankees home games, Wow combined and. 1:08:47.280 --> 1:08:48.920 The story of your friends a big part of the 1:08:48.920 --> 1:08:49.439 reason why. 1:08:49.520 --> 1:08:52.320 Right, You've got people from all over the world who 1:08:52.360 --> 1:08:55.000 are coming to New York. They're bringing their friends, they're 1:08:55.000 --> 1:08:57.240 bringing their family. A lot of them are staying in 1:08:57.280 --> 1:09:00.559 hotels multiple nights. About forty percent of our field this 1:09:00.680 --> 1:09:03.599 year will be international. So those folks are coming in 1:09:03.640 --> 1:09:06.200 for a sustained period of time. They're staying at hotels, 1:09:06.200 --> 1:09:09.439 they're eating at restaurants, they're going to Broadway shows, they're 1:09:09.439 --> 1:09:11.320 doing all the things you do when you visit New 1:09:11.360 --> 1:09:13.600 York And so running the marathon is just kind of 1:09:13.600 --> 1:09:16.120 the centerpiece of a big trip to New York City. 1:09:16.200 --> 1:09:19.559 And let's face it, November is not peak tourist season, right, 1:09:19.600 --> 1:09:21.800 So we're bringing in a huge number of visitors to 1:09:21.840 --> 1:09:24.439 the city at a time that otherwise would be pretty quiet. 1:09:24.439 --> 1:09:26.160 Wait, Rob, how much of that spending is the car 1:09:26.240 --> 1:09:27.480 bload before the marathon? 1:09:27.600 --> 1:09:27.760 Right? 1:09:27.800 --> 1:09:30.240 Like all those restaurants offering up pasta, I mean there's 1:09:30.240 --> 1:09:31.240 a lot of that going on. 1:09:31.200 --> 1:09:31.719 Too, right. 1:09:32.479 --> 1:09:34.240 Oh yeah, this is a good week to own an 1:09:34.240 --> 1:09:36.680 Italian restaurant in New York City, And we know that 1:09:36.720 --> 1:09:40.439 they are all dialed up their pasta menus, their prefigs menus. 1:09:40.720 --> 1:09:43.479 So absolutely it's a very good week for the pasta 1:09:43.560 --> 1:09:44.200 and rice too. 1:09:44.240 --> 1:09:45.760 Rice is also good carbs. 1:09:45.600 --> 1:09:48.679 You know, Carol and I travel the week in the 1:09:48.720 --> 1:09:50.920 two days after the marathon every year, and one cool 1:09:50.920 --> 1:09:54.040 thing about New York is you see everybody who completed 1:09:54.040 --> 1:09:56.800 the marathon on the subway on the way home, they 1:09:56.840 --> 1:09:59.680 wear they're wearing the metals then throughout the week and 1:09:59.840 --> 1:10:01.439 I I just remember the lastew years because we've we're 1:10:01.439 --> 1:10:03.840 going to Schwab Impact next week, Carol. Right, it's always 1:10:03.840 --> 1:10:06.120 around this time of year. We fly on the plane, 1:10:06.160 --> 1:10:09.080 there's always people wearing their medals at the airport on 1:10:09.080 --> 1:10:11.679 the plane with us, and you know, there's this cool 1:10:11.760 --> 1:10:14.120 like moment that you have with these people who are like, congratulations, 1:10:14.200 --> 1:10:15.920 that was a lot of work you did it. 1:10:15.920 --> 1:10:18.360 It's like such a community feel. It is pretty amazing. 1:10:18.479 --> 1:10:20.840 Right, So it's not New York the New York that 1:10:20.960 --> 1:10:23.519 Rob was describing, right, like the sharp elbows, like give 1:10:23.560 --> 1:10:24.639 me some room on the subway. 1:10:24.640 --> 1:10:27.960 Here, it's really really sweet, like in a world where 1:10:28.320 --> 1:10:31.200 it feels like there's a lot coming at people. I 1:10:31.200 --> 1:10:33.679 don't know what year are you guys in doing this. 1:10:34.080 --> 1:10:37.479 Next year will be the fiftieth anniversary of the Five 1:10:37.600 --> 1:10:40.519 Borough New York City Marathon that started and starts in 1:10:40.560 --> 1:10:42.920 Staten Island and ends in New York City, So the 1:10:43.000 --> 1:10:45.640 original race was just lapsed in Central Park in the 1:10:45.680 --> 1:10:48.960 early seventies. But next year will be really a big, 1:10:49.280 --> 1:10:51.760 big anniversary because that's what people think of when they 1:10:51.760 --> 1:10:54.799 think of the marathon is crossing the Arizona Bridge, running 1:10:54.800 --> 1:10:56.719 through all five boroughs, So next year. 1:10:56.640 --> 1:10:58.680 Will be a big year with that fiftieth anniversary. 1:10:58.840 --> 1:11:00.600 I just love it. How much has the race I 1:11:00.600 --> 1:11:02.559 mean you said how it started, you know, laps around 1:11:02.560 --> 1:11:06.320 Central Park? How often? How much has the route changed 1:11:06.400 --> 1:11:07.120 over the years. 1:11:07.520 --> 1:11:10.040 It hasn't changed very much since they started that race, 1:11:10.360 --> 1:11:14.080 covering five brows. Minor changes here and there, but it 1:11:14.120 --> 1:11:16.360 really has not changed very much. That start line on 1:11:16.360 --> 1:11:18.759 the Staten Island side of the Arizona and Hours Bridge, 1:11:18.880 --> 1:11:20.960 and that finish line right a tavern on the Greens, 1:11:21.000 --> 1:11:23.439 So you're running the same course that people have been 1:11:23.520 --> 1:11:26.080 running for decades and decades, And I think that's one 1:11:26.120 --> 1:11:27.920 of the things that makes it special because you can 1:11:28.200 --> 1:11:32.000 compare your times to the times of your friends years ago, 1:11:32.200 --> 1:11:34.200 the times of yourself if you've run it a lot 1:11:34.240 --> 1:11:36.280 of years. So that's one of the things that runners 1:11:36.320 --> 1:11:39.519 love to do, is compare times, and it's you know, 1:11:39.560 --> 1:11:42.160 it's stayed pretty constant, so those comparisons hold true. 1:11:42.400 --> 1:11:45.599 Yeah, I'm wondering how much the Athletes with Disabilities program 1:11:45.640 --> 1:11:48.040 has changed in over the years, because that, to me, 1:11:48.160 --> 1:11:50.320 is one of the most special parts of the marathon. 1:11:50.400 --> 1:11:53.720 And I know that there are different physical impairments that 1:11:54.840 --> 1:11:58.120 make athletes with disabilities eligible to run in the New 1:11:58.200 --> 1:12:01.639 York City Marathon. But seeing those folks, whether they're visually 1:12:01.680 --> 1:12:04.799 impaired and they're guided by another runner, or they're using 1:12:04.840 --> 1:12:07.800 hand cycles because they've lost the use of their legs, well, 1:12:07.840 --> 1:12:11.240 that's actually a separate race, we should note. But it's 1:12:11.280 --> 1:12:13.000 pretty remarkable to see. Rob. 1:12:13.320 --> 1:12:14.640 Yeah, thank you for bringing that up. 1:12:14.680 --> 1:12:17.879 I mean, we do have a significant number of athletes 1:12:17.920 --> 1:12:20.479 with disabilities who enter our race. There are a number 1:12:20.479 --> 1:12:22.000 of ways for them to do that. They can enter 1:12:22.080 --> 1:12:24.880 directly with us. We have our own AWD as we 1:12:24.920 --> 1:12:28.800 call it program. We have a great partnership with Achilles International. 1:12:28.880 --> 1:12:31.519 I think if you've run our races or stood on 1:12:31.560 --> 1:12:33.679 the sidelines for a lot of our races, you'll see 1:12:33.880 --> 1:12:36.839 the Achilles athletes going by. They always wear this highlighter 1:12:37.000 --> 1:12:40.720 yellow shirt and they always are I think some of 1:12:40.720 --> 1:12:43.600 the stars of the marathon. People will yell out, go 1:12:43.720 --> 1:12:46.559 Achilles when they see these athletes go by. You'll see 1:12:46.600 --> 1:12:49.080 them with you know, one or sometimes two guides on 1:12:49.120 --> 1:12:51.559 either side of them, just to make sure they stay safe. 1:12:51.600 --> 1:12:54.400 And I think that's what the marathon is all about. 1:12:54.439 --> 1:12:58.280 It's what inspires people, is folks overcoming these incredible odds. 1:12:58.280 --> 1:12:58.439 You know. 1:12:58.479 --> 1:13:01.920 We just released a film that's on YouTube actually out 1:13:01.960 --> 1:13:05.280 today called twenty six point two. I recommend everybody check 1:13:05.280 --> 1:13:07.439 it out. It's a short film about thirty minutes long, 1:13:07.760 --> 1:13:10.519 and it tells the story of four runners who ran 1:13:10.560 --> 1:13:14.640 the marathon last year, and they each had significant challenges. 1:13:14.680 --> 1:13:18.479 One was overcoming cancer, one had had a stroke, one 1:13:18.600 --> 1:13:21.360 was you know, basically having to walk the marathon, you know, 1:13:21.600 --> 1:13:23.920 and they're incredible stories, and I think that's the thing 1:13:23.960 --> 1:13:25.639 that makes the marathon special. 1:13:25.840 --> 1:13:27.160 Yes, we love the fast. 1:13:26.960 --> 1:13:29.040 Runners, we love the ones who win and who run 1:13:29.080 --> 1:13:31.439 it under three or even two and a half hours, 1:13:31.640 --> 1:13:34.720 but it's those stories of overcoming struggle and challenges that 1:13:34.760 --> 1:13:35.960 I think make it really special. 1:13:36.240 --> 1:13:40.120 That's pretty cool. Yeah, a documentary, right, and just to 1:13:40.200 --> 1:13:42.760 kind of show you're right. It's the people, right, and 1:13:43.280 --> 1:13:47.599 some of them who are struggling physically and maybe even emotionally, right, 1:13:47.720 --> 1:13:50.519 but they all come together and with this common goal. 1:13:50.600 --> 1:13:53.679 It's a pretty cool thing. Rob, Thank you so much. 1:13:53.720 --> 1:13:56.680 Good luck fingers crossed. Really good weather. We've had some 1:13:56.720 --> 1:14:00.559 good weekend weather, so let's hope it continues this weekend. 1:14:00.640 --> 1:14:02.000 And good luck to your wife. 1:14:02.240 --> 1:14:02.559 Yeah. 1:14:03.080 --> 1:14:06.080 Uh, she's training, she's been training, she's excited. She's wanted 1:14:06.080 --> 1:14:07.400 to do this for years. I mean we've lived in 1:14:07.400 --> 1:14:09.400 New York for like, gosh, close to twenty years at 1:14:09.400 --> 1:14:11.240 this point. Yeah, and this is finally the year she's 1:14:11.240 --> 1:14:14.160 making it happen. So really cool. Rob Similcare CEO of 1:14:14.320 --> 1:14:17.200 New York road Runners. He's also a two time New 1:14:17.280 --> 1:14:21.960 York Marathon finisher as well. See the medals there behind him. 1:14:22.200 --> 1:14:24.280 The New York road Runners is the nonprofit that puts 1:14:24.280 --> 1:14:27.639 on the TCS New York Marathon. Rob joining us from 1:14:27.680 --> 1:14:30.599 New York, I do seriously want to encourage anybody who 1:14:30.600 --> 1:14:32.240 has never seen the marathon. It is one of the 1:14:32.240 --> 1:14:35.720 most special days here in New York. City. Go check 1:14:35.720 --> 1:14:39.200 it out. We have friends coming in from Westchester County. 1:14:39.200 --> 1:14:42.160 We have friends coming in from New Jersey. Everybody makes 1:14:42.200 --> 1:14:43.679 a day of it. They're not just coming to watch 1:14:43.720 --> 1:14:46.680 my wife. They're like, yeah, I mean I haven't done 1:14:46.680 --> 1:14:49.200 it a long time. Great thing and a little secret. 1:14:49.680 --> 1:14:53.479 Where bring the kids bikes as the last runners go through, 1:14:53.720 --> 1:14:56.960 sneak onto those closed roads and bike through. 1:14:57.720 --> 1:14:57.880 Rob. 1:14:57.880 --> 1:15:00.400 I probably shouldn't say I see Rob. He's probably don't 1:15:00.400 --> 1:15:02.960 say this to stay away from the New York City 1:15:03.000 --> 1:15:05.879 sanitation trucks that are coming to clean up everything. 1:15:06.120 --> 1:15:08.360 But the kids can just ride the roads, right, Yeah, 1:15:08.400 --> 1:15:09.639 the kids can just ride their roads. 1:15:09.840 --> 1:15:11.040 This is a special day in New York. 1:15:11.800 --> 1:15:17.160 This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, 1:15:17.280 --> 1:15:21.000 and anywhere else you get your podcasts. Listen live weekday 1:15:21.040 --> 1:15:25.040 afternoons from two to five pm Eastern on Bloomberg dot Com, 1:15:25.080 --> 1:15:29.000 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:15:29.240 --> 1:15:32.160 You can also watch us live every weekday on YouTube 1:15:32.240 --> 1:15:34.400 and always on the Bloomberg terminal