Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Wall Street Week. I'm David Weston bringing you
Speaker 2: stories of capitalism. The race to an AI future takes
Speaker 2: us through the obscure land of open source code, and
Speaker 2: one of those leading the charge, Lisa Sue of AMD,
Speaker 2: explains what is at stake plus, however we get there,
Speaker 2: that AI future will require a whole lot more electricity,
Speaker 2: which we'll have to include a whole lot more nuclear
Speaker 2: power than we have ever seen before. And as the
Speaker 2: holiday season approaches, we take you on a trip down
Speaker 2: memory lane to the department stores of yesterday and the
Speaker 2: efforts of one of the remaining icons, Macy's, to transform
Speaker 2: itself for the future. But we start with the FED
Speaker 2: decision this week. What we learned about where the FED
Speaker 2: is going if it knows with Glenn Hubbard of the
Speaker 2: Columbia Business School, who headed the Council of Economic Advisors
Speaker 2: under President George W.
Speaker 3: Bush Well, the decision itself isn't a surprise. David, Why though,
Speaker 3: is a good question. I don't see really an argument
Speaker 3: for cutting the fund's rate, particularly given the Fed's own
Speaker 3: macroeconomic forecasts that would have real GDP growth now higher.
Speaker 3: Next year, not lower. There are reasonable minds on both
Speaker 3: sides who are debating the employment tradeoff and the inflation
Speaker 3: tradeoff were interestingly going forward, what could the Fed do?
Speaker 3: I don't see rate cuts. If you look at the
Speaker 3: FED funds rate now, it's roughly in the range of
Speaker 3: where it should be given views about what the real
Speaker 3: Federal funds rate is and the inflation forecast the Fed
Speaker 3: itself has put out. So I don't see much more
Speaker 3: room to cut.
Speaker 2: If you believe the Fed's projections next year. In twenty
Speaker 2: twenty six, they took up the GDP growth by half
Speaker 2: a percent.
Speaker 4: That's big.
Speaker 2: How do you cut rates into a growing economy?
Speaker 3: Well, I think they would have to argue that it's
Speaker 3: about employment, not just output, but that seems very tortured
Speaker 3: as an argument. They still have time to react to
Speaker 3: labor pressures should they worsen. Remember, the Fed also lowered
Speaker 3: the unemployment rate for next year as well. That doesn't
Speaker 3: look like an economy heading toward recession. I'm not saying
Speaker 3: that will come to pass, but that is the Fed's view.
Speaker 2: Artificial intelligence is all the talk of the town, including
Speaker 2: with the chair Pale in his decision this week. How
Speaker 2: can the FED understand AI well enough to know what
Speaker 2: that will do, for example, productivity, which the chair talked about.
Speaker 3: Well, I don't think any of us, if we're honest, No,
Speaker 3: and I talk to business people in California. They're extremely optimistic.
Speaker 3: Every CEO is optimistic. Some others are more dour among economists, honestly,
Speaker 3: I think there's every reason to believe generative AI could
Speaker 3: be a big productivity boom. But there lies the rub
Speaker 3: for the FED. If you think AI is the future
Speaker 3: of productivity, that's a story for higher, not lower interest rates.
Speaker 3: The real interest rate will go up and inflation is
Speaker 3: still stuck at a higher level. If we're wrong about AI,
Speaker 3: then we've got many things to worry about because we
Speaker 3: have a lot of cap X going into AI data
Speaker 3: centers and things like that. But I don't think the
Speaker 3: AI productivity story gets the FED to low rates. This
Speaker 3: is not a replay of green Span in the nineteen nineties.
Speaker 2: What sorts of pressures could AI in success with increased
Speaker 2: productivity increase investment, as you say, put on the dual mandate,
Speaker 2: because you could have on the one said growth economic
Speaker 2: growth increased productivity radically with lower employment, so you could
Speaker 2: be on both sides of that mandate.
Speaker 5: You well could.
Speaker 3: At the moment, I'm not so sure. So we have
Speaker 3: seen obviously a weakening labor market, but I'm not sure
Speaker 3: AI is associated with it. When you look at all
Speaker 3: of the sectors that are weakening, to me, it looks
Speaker 3: more like an unwind of excess hiring during COVID. So
Speaker 3: we don't yet know, and we don't know going forward.
Speaker 3: Is AI going to be more of a compliment to you,
Speaker 3: me and everybody else in terms of the skills we
Speaker 3: have or a substitute. But if it were the case
Speaker 3: that AI displaced a lot of jobs, to me, that's
Speaker 3: less of a federal reserve challenge and more of a
Speaker 3: government challenge that the government needs to do something, have
Speaker 3: a policy to prepare people better than we did in
Speaker 3: previous waves of technological change.
Speaker 2: One of the things that Cherpeal addressed was tariff's When
Speaker 2: he was asked about the elevated well above the two
Speaker 2: percent number and inflation, he said, well, that's really a
Speaker 2: tariff thing, and we think that will dissipate. Is he
Speaker 2: right about that?
Speaker 3: In principle, yes, a tariff is if you had a
Speaker 3: once in four all tariff that should raise prices, not inflation.
Speaker 3: It only raises inflation for a period of time. The
Speaker 3: problem is we've seen tariffs come, tariffs go, rates go up,
Speaker 3: rates go down, so it becomes a little harder. My
Speaker 3: worry about the tariffs is less about inflation somewhat for
Speaker 3: the reasons Chair Powell has suggested, but more for their
Speaker 3: long run corrosive effect on the economy in productivity, in
Speaker 3: supply chains. You know again, America's imports are more than
Speaker 3: half of them, or intermediate goods. We're shooting ourselves in
Speaker 3: the foot whenever we do large across the board tariffs.
Speaker 2: What do you make of the fact we're now up
Speaker 2: to three descents, two going one way, one going the
Speaker 2: other way. We went for a long time actually with
Speaker 2: essentially no dessence in the FED. Is this a good thing,
Speaker 2: a bad thing, or something in between?
Speaker 3: I think it's It could be any of you bobs.
Speaker 3: So it's a good thing in the sense that in
Speaker 3: a healthy organization, if you and I don't have the
Speaker 3: same view, we should speak it. If we're not going
Speaker 3: to be reconciled. That said, you've got to ultimately govern
Speaker 3: the FED. We're about to have a new FED chair.
Speaker 3: The President will tell us who it is sometime in
Speaker 3: the near future, and that gentleman or lady is going
Speaker 3: to have to bring together a group of people with
Speaker 3: disparate opinions. That's where the challenge seems to hold. Your
Speaker 3: Powell has done a very good job, I think, in
Speaker 3: managing through a situation where people could reasonably hold different
Speaker 3: views about the economy and obvious political cross currents. He's
Speaker 3: been able to get through that. The new FED chair,
Speaker 3: whoever it is, will face that challenge.
Speaker 2: It's one thing to have disagreements over policy, over theory,
Speaker 2: even over what the data are telling. You don't think
Speaker 2: they have political disagreements. We tend to think that the
Speaker 2: FED should stay away from political disagreements and disagree over
Speaker 2: the merits.
Speaker 3: As it Well, that's absolutely right. You can make a
Speaker 3: case right now in the economy for different points of
Speaker 3: view about the path of interest rates. The fact that
Speaker 3: I have one point of view does not mean, for example,
Speaker 3: that Governor Waller's wrong because he is a different point
Speaker 3: of view. This is a different way of looking at
Speaker 3: the world. I respect that if your argument is based
Speaker 3: on politics, then that's not a technocratic argument for the FED.
Speaker 3: Political arguments are fine when you're talking about fiscal policy
Speaker 3: or things that the Congress does. But the FED was
Speaker 3: set up to provide independent judgment about monetary policy, and
Speaker 3: that's what it should do.
Speaker 2: To provide independent judgments and to be perceived as providing
Speaker 2: independent judgments.
Speaker 3: It's critical, David, because if people don't believe that you're independent,
Speaker 3: even if you yourself think you are, that doesn't work,
Speaker 3: and you have to ask yourself why does it not work.
Speaker 3: The bond market and capital markets depend on the perception
Speaker 3: that the FED is an independent agency.
Speaker 2: One of the things that came up more than once
Speaker 2: in the news conference, although Cherpal really refused to address it,
Speaker 2: is the question in Governor Cook's case depending before the
Speaker 2: Supreme Court, if you had to choose which is more
Speaker 2: important who the FED chair is or how the Supreme
Speaker 2: Court rules.
Speaker 3: Well, I'm going to give you a non lawyer's answer
Speaker 3: because I honestly I don't know. But to me, the
Speaker 3: Cook case is very important, and not just because it's
Speaker 3: about Governor Cook. Per sees call it about X. Whoever
Speaker 3: X is if the President can fire a member of
Speaker 3: the Federal Reserve Board for what doesn't appear to be caused,
Speaker 3: at least as an outsider. Then that speaks volumes about
Speaker 3: the Fed's independent So I think that case is one
Speaker 3: to watch. You know, I'm not a lawyer. I don't
Speaker 3: know what the outcome will be, but I wish the
Speaker 3: Supreme more well in deciding.
Speaker 2: It looking forward into twenty twenty six, which is very,
Speaker 2: very difficult obviously. Do you think there's more risks to
Speaker 2: the upside or the downside in the economy?
Speaker 3: You know, I see risks in both directions. The AI
Speaker 3: boom that we spoke about is clearly an upside risk
Speaker 3: to me. The resilience of the economy is also an
Speaker 3: upside risk. If we were having this conversation a year
Speaker 3: ago and you had told me about Liberation Day, I
Speaker 3: alone got to know that. I would have then thought
Speaker 3: the macroeconomy would do worse than it did. I would
Speaker 3: have predicted market effects, which did happen, but not the
Speaker 3: mac for economic effects. And I think part of that
Speaker 3: is the overwhelming resilience of the American economy combined with
Speaker 3: the productivity book. I think those are real upsides. The
Speaker 3: downsides I would worry about is that the labor market
Speaker 3: could weaken gradually and suddenly, and we already have a
Speaker 3: credit cycle that looks relatively mature to me, and so
Speaker 3: I would start to worry about credit accidents which could
Speaker 3: affect the bod market, So that would worry me as
Speaker 3: a downside. And then of course there are always geopolitical
Speaker 3: risks that I'm certainly not an expert in and are
Speaker 3: hard to predict. So I think there are risks on
Speaker 3: both sides. It's going to be a very interesting year
Speaker 3: for the Fed for fiscal policy, and obviously because it's
Speaker 3: an election year, a highly charged.
Speaker 4: Year coming up.
Speaker 2: Getting to an AI future, it's not just a matter
Speaker 2: of how much money is spent, it's also what the
Speaker 2: basic structure of the system looks like. AMD Lisa Sue
Speaker 2: on the critical bets being made on open source versus
Speaker 2: proprietary code. This is a story about frontemies, when to
Speaker 2: try and beat your competition, and when to share with
Speaker 2: those competitors to build a bigger overall business and compete
Speaker 2: in other ways. The competition to develop AI models could
Speaker 2: not be more fierce, with big tech companies investing record
Speaker 2: amounts of money on chips and data centers.
Speaker 6: These companies investing trillions of dollars in CAPEX.
Speaker 7: Trillions of dollars in the raise to build artificial intelligence
Speaker 7: support systems.
Speaker 3: Trillions of dollars of our tech companies investing in building
Speaker 3: data centers in America.
Speaker 2: How far AI will take us and how fast may
Speaker 2: depend in part on a basic choice about the overall
Speaker 2: approach to sharing for withholding information, a choice often mentioned
Speaker 2: in passing, but one that investors may not have identified
Speaker 2: as key.
Speaker 7: I want to see AI everywhere. You know we were
Speaker 7: such so early in the real usage of the technology.
Speaker 2: Lisa Sue is chair and CEO of a m D,
Speaker 2: the chip maker with hundreds of billions of dollars at
Speaker 2: stake in the development of AI. When it comes to
Speaker 2: the software that runs on their products, she and her
Speaker 2: company have made their choice in favor of open source
Speaker 2: technology sharing where they can.
Speaker 7: The difference with an open source or open standards is
Speaker 7: the idea that you set out a set of standards
Speaker 7: that people can follow, and then different companies can choose
Speaker 7: to implement in a different way. And you know, the
Speaker 7: whole idea is to provide platforms that the entire ecosystem,
Speaker 7: lots and lots of developers can develop, and that that
Speaker 7: you can be able to interchange sort of the best
Speaker 7: of breed from different sources.
Speaker 2: Why is there so much passion around open I mean,
Speaker 2: is it a matter of business or is there a
Speaker 2: matter of philosophy?
Speaker 7: The philosophy is, you know, do you believe that there's
Speaker 7: any one company or any one group that will have
Speaker 7: all of the best ideas in the world, or do
Speaker 7: you believe that if you have an open ecosystem where
Speaker 7: different researchers and different groups can contribute, that you will
Speaker 7: end up with a better product overall? And philosophically, I think,
Speaker 7: you know, from an am D standpoint. You know, actually,
Speaker 7: if I think about throughout my career, I look at,
Speaker 7: you know, sort of the different inflection points on technology.
Speaker 7: Things often start new ideas often start in a closed environment.
Speaker 7: But when you actually think about when they get big
Speaker 7: and when you know a lot of people adopt, you
Speaker 7: like to be an open environment. And you know that's philosophically. Now,
Speaker 7: let's talk about the business aspects of it. You know,
Speaker 7: the business aspects of it are you know, we all
Speaker 7: have to make choices of where we invest and do
Speaker 7: you want to trust you know, all of your crown
Speaker 7: jewels and all of your data in a closed ecosystem
Speaker 7: that you know, may or may not be the most
Speaker 7: competitive at any given time, or you know, may have
Speaker 7: you know, a flaw or any of those things. Whereas
Speaker 7: you know, in an open ecosystem, you have choices. You
Speaker 7: can decide who is the best at any given time.
Speaker 7: You can decide if I have my data in a
Speaker 7: cloud environment, I can easily move it to another environment.
Speaker 7: If I have my applications that are built on one chip,
Speaker 7: if there's a better chip, you know, a few years later,
Speaker 7: you can move you know, quickly. That's that's kind of
Speaker 7: the idea of both.
Speaker 2: What broadly speaking of the advantages of open and let
Speaker 2: me throw all out For example, in a new technology,
Speaker 2: is it more likely, all of the things being equal,
Speaker 2: that the technology will develop more quickly if it's open.
Speaker 7: I would say that the main advantage of an open
Speaker 7: ecosystem is that you can get many, many more developers
Speaker 7: on that ecosystem, and they will contribute, you know, sort
Speaker 7: of in their you know, special way. So you know,
Speaker 7: an example I can give you is, you know, when
Speaker 7: we think about supercomputing, like the largest supercomputers in the world,
Speaker 7: we usually like to develop them on open software stacks,
Speaker 7: so that researchers from all different labs can actually contribute
Speaker 7: to those applications and those learnings. We see that a
Speaker 7: lot in open ecosystems, which is the notion that we
Speaker 7: want more developers. Like Linux is a great example, right.
Speaker 7: Linux is one of the examples where with an open
Speaker 7: operating system, you can see that it's now really become
Speaker 7: the standard for a lot of computing going forward.
Speaker 2: For all the advantages of the open source approach to AI,
Speaker 2: many of the most important players, including most recently Meta
Speaker 2: with a new model expected to debut next year, have
Speaker 2: gone the other way, keeping much of their generative AI
Speaker 2: tech proprietary. And there are some advantages to that approach,
Speaker 2: including preventing bad actors from having access to source code
Speaker 2: that they can manipulate. That's something Sue believes can be
Speaker 2: remedied by community.
Speaker 7: I think there is a definite view that there's a
Speaker 7: place for open and then there's a place for proprietary.
Speaker 7: And when I say that, I mean, look, there are
Speaker 7: amazing groups of researchers that are working on the largest
Speaker 7: foundational models. When you think about you know, what's happening
Speaker 7: at open AI and what's happening at Google and what's
Speaker 7: happening at Anthropic, what's happening at Meta. These are phenomenal
Speaker 7: labs that are doing a tremendous research in AI. There
Speaker 7: are also a number of open models. You know open
Speaker 7: Ai has an open model, you know Meta, their Lama
Speaker 7: series as have had open models. And what you find
Speaker 7: when those models are open is there are more researchers
Speaker 7: that are able to build on top of that, and
Speaker 7: I think there's significant advantages there. So you know, our
Speaker 7: thought process in how this evolves over time is you're
Speaker 7: going to have both in the ecosystem And just like
Speaker 7: my very early example of sort of the Apple iOS
Speaker 7: ecosystem and the Google Android ecosystem, it's not like you're
Speaker 7: going to have all of one takeover all of the
Speaker 7: other takeover. But what you do see is there's value
Speaker 7: in richness in having let's call it a little bit
Speaker 7: of competition between the ecosystems. And most importantly, what we
Speaker 7: want is what's best for the consumer is to get
Speaker 7: the best overall product experience and the best overall capabilities.
Speaker 8: And you do that when you.
Speaker 7: Allow a playing field that allows good competition across the board.
Speaker 2: The debate between open source and proprietary is not a
Speaker 2: new one. This IBM seven oh five. The computer industry
Speaker 2: had to confront a similar choice long before the current
Speaker 2: rush to artificial intelligence models. Sam Palmasana was the CEO
Speaker 2: of IBM from two thousand and three through twenty eleven.
Speaker 9: How this whole thing began was basically in the late
Speaker 9: nineties and there were two different model There were proprietary
Speaker 9: models that exist at IVM and the main framed Microsoft
Speaker 9: Client Server, et cetera. They're all proprietary, and we believed
Speaker 9: that IBM that a better model was one that would
Speaker 9: drive more innovation work growth if it was open source
Speaker 9: so everybody could participate. So that led to this Linux Initiative,
Speaker 9: which was the open source in this institute that was
Speaker 9: created by the industry, which we were part of. And
Speaker 9: obviously what happened over time.
Speaker 4: Now we put a lot behind it.
Speaker 9: We made a billion dollar bet that Linux would become
Speaker 9: commercial and that in the future Linux in the patche
Speaker 9: would be kind of the operating the.
Speaker 4: Environment of the Internet.
Speaker 9: It worked out, but it could have been a mistake,
Speaker 9: but it worked out, so that gave it a lot
Speaker 9: of momentum. But the whole point was open innovation is
Speaker 9: going to win over single company proprietary approaches because they
Speaker 9: have a limited amount of resource and unlimited market. Even
Speaker 9: if they have a large share position, it's still a
Speaker 9: smaller market than the entire industry.
Speaker 2: When you made the decision to go open source with Linux,
Speaker 2: was there controversy about it? The pluses and the minuses
Speaker 2: of that decision.
Speaker 9: Huge internal debate. Think about this stuff, IBM inventative. With
Speaker 9: the history of the industry, it was all proprietary, whether
Speaker 9: that was not just in mainframe or storage and database
Speaker 9: and all those things were all invented by IBM. So
Speaker 9: there's the camp that said, hey, you guys, this is crazy.
Speaker 9: We have this proprietary model. It's very profitable. Slower growth,
Speaker 9: but it's very profitable, and it's from a business perspective.
Speaker 9: The alternative was that, no, if we can open up
Speaker 9: the opportunity and then participate in a bigger opportunity than
Speaker 9: the one we're participated in, IBM will be better off
Speaker 9: long term, and that was the decision.
Speaker 2: The IBM moved to open source for operating systems twenty
Speaker 2: five years ago helped spur what became a software revolution
Speaker 2: as firms adopted the system and built their own proprietary
Speaker 2: applications on top of it. Looking back on it now,
Speaker 2: it's hard not to conclude that it was good for
Speaker 2: the business overall and ultimately good for companies like IBM.
Speaker 2: But is history likely to repeat itself this time as
Speaker 2: the world experien ements with various generative AI approaches said, the.
Speaker 7: Chip is actually quite small. What you really we want
Speaker 7: to present a framework where we're going to get the
Speaker 7: best ideas coming out of this, and from an AMD standpoint,
Speaker 7: we'd love you to run on our chips, but more importantly,
Speaker 7: we want you to run on an open ecosystem so
Speaker 7: you can decide, you know, two years from now or
Speaker 7: four years from now, if you made a choice of AMD,
Speaker 7: that doesn't mean you're locked into our chips for the
Speaker 7: next five years. It means that you have an open
Speaker 7: ecosystem where you can benefit from all of the competitive
Speaker 7: capabilities that come on board over the next five to ten.
Speaker 2: Years, which sounds like it should be good for the
Speaker 2: business long term overall the business. Is it also good
Speaker 2: for AMD in the sense that in that world where
Speaker 2: you can switch and you don't have to be committed,
Speaker 2: you'll sell more chips over the long term.
Speaker 7: I believe we will because we are giving people the
Speaker 7: opportunity to choose, and look, we always have to be
Speaker 7: best in class, right, there's no question that it's there's
Speaker 7: so many innovations to come on board. But the idea
Speaker 7: that if you develop on AMD, you have choice and
Speaker 7: you also have the ability to work closely with us
Speaker 7: in terms of, you know, how we develop this ecosystem together,
Speaker 7: that this is a case where one plus one is
Speaker 7: going to be greater than three because you know, we're
Speaker 7: getting the smartest people from all of the ecosystem versus
Speaker 7: just you know, we're going to figure out everything on
Speaker 7: our own.
Speaker 2: And it's not just the big US tech companies making
Speaker 2: their bets on open versus a proprietary. China is casting
Speaker 2: its vote as well and perhaps ironically siding with the
Speaker 2: open approach.
Speaker 9: Where we started, it was mostly proprietary, and the winners
Speaker 9: at that point in time were Meta, Google, Open Ai, Microsoft,
Speaker 9: you know, et cetera.
Speaker 4: They were the winners.
Speaker 9: And we're growing like crazy with these large language models.
Speaker 9: Then all of a sudden, this thing happens in China.
Speaker 9: And there's two things that happen in China that are
Speaker 9: open sourced and they're based on this view that innovation
Speaker 9: will scale faster if we have an open source approach.
Speaker 9: Deep Seek it's got a lot of press, a lot
Speaker 9: of coverage. The other one's called huggy Face, which you
Speaker 9: hardly hear about. But if you look at the numbers
Speaker 9: compared to the growth before twenty twenty four, it was
Speaker 9: heavily dominated by the three companies, the hyperscalers I talked about,
Speaker 9: and then since then it's been these other companies and
Speaker 9: the China approach. So since twenty twenty four, China actually
Speaker 9: is out growing the proprietary models, but it's the open
Speaker 9: source innovation and they've gone from nothing to millions of
Speaker 9: people now using these capabilities.
Speaker 10: To your point, Sam, there's this chart that we were
Speaker 10: provided actually by you're folks out out at Stanford, which
Speaker 10: actually illustrates the competitive nature of the large amount languge
Speaker 10: models in China for the United States over time.
Speaker 9: Correct you look at at the point I was making
Speaker 9: up until twenty twenty four, it was clearly a blue
Speaker 9: curve led by the United States, the companies, but led
Speaker 9: by the United States. It flipped in twenty twenty four.
Speaker 9: I went vertical, and it's almost caught up to the
Speaker 9: United states now this thing is rocketing.
Speaker 2: As happens so often, it ultimately comes down to business,
Speaker 2: albeit business with profound ramifications well beyond the specific companies involved.
Speaker 2: Amd Su has little doubt that what works best for
Speaker 2: AI development overall will also be the best way forward
Speaker 2: for her company.
Speaker 7: The ability to collaborate actually helps us go faster because
Speaker 7: you only have to differentiate on the things that are
Speaker 7: let's call it the most secret sauce. And if we
Speaker 7: can come up with standards so that we're not doing
Speaker 7: the same work multiple times at different companies, you know,
Speaker 7: that's actually a good thing.
Speaker 2: And the secret sauce for you is in the chip.
Speaker 7: Yes, the secret sauce is in the chip. It's in
Speaker 7: how we marry the chip to what will eventually be
Speaker 7: the application. And in our world, David, what I find
Speaker 7: the most interesting is the idea that every application that
Speaker 7: we see going forward, every device that you see, is
Speaker 7: going to have AI as part of its essential element,
Speaker 7: and we want to be as much as we can
Speaker 7: the provider of that essential AI capability. From the hardware side,
Speaker 7: we've seen, you know, sort of the advent of chat
Speaker 7: GPT now turn into you know, is there a AI
Speaker 7: bubble and I say that we're just starting to see
Speaker 7: the real utility of AI. Yes, the investments are high,
Speaker 7: but why are we all so so confident that there's
Speaker 7: a payoff at the end. The way AI has been
Speaker 7: improving over the last you know, let's call it a
Speaker 7: couple of years, has been faster than any other technology
Speaker 7: that I've seen. The adoption rates have been faster than
Speaker 7: any other technology. The potential is faster than any other technology.
Speaker 7: But what I'm here to tell you is that it's
Speaker 7: nowhere near its peak capability.
Speaker 2: Up next going nuclear. However, we build the AI systems,
Speaker 2: can we run them without nuclear power? Nuclear power than
Speaker 2: we have ever seen before. This is a story about
Speaker 2: betting on the come when we have a lot on
Speaker 2: the line and really need it to work, But the
Speaker 2: outcome is far from certain. The United States and the
Speaker 2: world are facing an impending power shortage.
Speaker 11: What we know now is that the nation, the country
Speaker 11: is short of electrons and we need to build more generation.
Speaker 7: We do have an incredible demand increasing demand for energy.
Speaker 2: We are seeing fundamental growth in the demand for electricity.
Speaker 2: Why do we suddenly need so much more electricity? Well,
Speaker 2: we've all heard about AI data centers, hungry for energy
Speaker 2: that would satisfy medium sized cities. But it turns out
Speaker 2: that's only part of the story.
Speaker 5: AI data centers appear to be the sort of fastest
Speaker 5: coming and largest new source. Over the long term, reshoring
Speaker 5: of manufacturing will be incredibly important as well.
Speaker 2: Joseph Mikett is director of the Energy Security and Climate
Speaker 2: Change Program at CSIS and author of paper on Energy
Speaker 2: strategy for the Aspen Economic Strategy Group.
Speaker 5: When we look at the onshuring of manufacturing, there's a
Speaker 5: couple different sources of new demand that are going to
Speaker 5: really come to bear in the next few years. One
Speaker 5: is semiconductor manufacturing. As the US has tried to secure
Speaker 5: that supply chain. The government is making investments in public
Speaker 5: private partnerships in building leading fabrication facilities here in the US.
Speaker 5: The US for the previous decades had had very little
Speaker 5: growth in its use of electricity. We now foresee growth
Speaker 5: between twenty and one hundred percent over the next fifteen years.
Speaker 2: So where are all these electrons going to come from?
Speaker 2: If we're going to double our energy supply we're even
Speaker 2: just lifted by twenty percent over the next fifteen years.
Speaker 2: One of the sources will have to be nuclear.
Speaker 12: Nuclear is going to be a contributing factor for sure.
Speaker 12: I think we need to continually apply the right technologies
Speaker 12: where the right resources exist.
Speaker 2: Scott Strazik is president and CEO of ge Vernova, whose
Speaker 2: business includes power solutions from nuclear, natural gas, and wind.
Speaker 12: In the US, as an example, we do have very
Speaker 12: inexpensive gas. Because of that, we do want to leverage
Speaker 12: that resource. At the same time, we have a lot
Speaker 12: of good land that has good fuel in the form
Speaker 12: of wind and solar. Where those resources exist, we should
Speaker 12: use them. Where nuclear plays a really important role is
Speaker 12: where those natural resources aren't readily available, and it's especially
Speaker 12: important in places where we need what we call power
Speaker 12: dense solutions. And what I mean by that is places
Speaker 12: that need electrons that don't have a lot of space,
Speaker 12: because we can build nuclear in a fairly small amount
Speaker 12: of space, yet it creates a lot of electrons.
Speaker 2: If nuclear is going to be an important part of
Speaker 2: meeting our energy demands, it has a long way to go.
Speaker 2: The US has had commercial nuclear power plants since the
Speaker 2: late nineteen fifties, but only two have come online in
Speaker 2: the last thirty years. Today, only about twenty percent of
Speaker 2: electricity comes from nuclear generation, a number that hasn't increased for.
Speaker 12: Decades historically when we've been building nuclear plants, because they
Speaker 12: require a lot of infrastructure, they require a lot of
Speaker 12: security apparatus. We would build one plant that would be
Speaker 12: directionally a gigawot in size, and that's a lot, that's
Speaker 12: a million homes that it's powering directionally. Today, what we're
Speaker 12: working on is a small modular reactor, which is a
Speaker 12: three hundred megawa application.
Speaker 5: Historically, the US has built very large light water nuclear reactors,
Speaker 5: and while that supply chain has atrophied, we have partners
Speaker 5: who can supply that technology. It is licensed and ready
Speaker 5: to be built when it can achieve financing. Those are
Speaker 5: law large grid scale reactors. Reactors of another size of
Speaker 5: other designs still have to make it through the regulatory process,
Speaker 5: but they hold great promise both as grid serving entities,
Speaker 5: maybe running smaller microgrids, working for industrial facilities. I don't
Speaker 5: think the right question is to say which of these
Speaker 5: is going to win, but rather how do we build
Speaker 5: an ecosystem that can support both, because both will provide
Speaker 5: solid services to US consumers as well as export opportunities
Speaker 5: for the United States.
Speaker 12: One of the challenges in the nuclear industry is when
Speaker 12: we were building them at a gigwat size, each one
Speaker 12: was a little different, and with each one being a
Speaker 12: little bit bespoke and unique, the cost was always higher
Speaker 12: than desirable. By scaling to a smaller product that we
Speaker 12: can fit into many more applications, we have a much
Speaker 12: higher degree confidence that we can come down the cost
Speaker 12: curve because ultimately affordability matters, and nuclear is very attractive
Speaker 12: because it's a zero carbon electron, but early it's going
Speaker 12: to be more expensive, and we need to give the
Speaker 12: industry and our end customers confidence that we can come
Speaker 12: down the cost curve as we gain more volume, which
Speaker 12: I'm highly confident we can do.
Speaker 2: What about the fuel source? Is the fuel the same
Speaker 2: for the big gigawatt as it is for the three
Speaker 2: hundred megaway.
Speaker 12: It is, and we'll create the fuel in the same location,
Speaker 12: and we'll meet to North Carolina for our small modular
Speaker 12: reactors that continues to feed the sixty gigawatts of existing
Speaker 12: install base we have in the country.
Speaker 2: Is fuel supply a potential limiting factor as we build
Speaker 2: out nuclear?
Speaker 12: As nuclear grows, for sure, we're going to need more
Speaker 12: uranium supply. I think this is an area for growth
Speaker 12: in the US. We certainly are dependent on other countries
Speaker 12: today for more of our uranium than we are as
Speaker 12: an example with things like gas, where we can extract
Speaker 12: all of it out of the ground ourselves here. So
Speaker 12: that is going to be priority, and I think that's
Speaker 12: something that you're seeing a lot of companies lean into today.
Speaker 2: As promising as small modular reactors may be, the need
Speaker 2: for energy won't peak. US power demand is expected to
Speaker 2: outstrip peak supply by twenty twenty eight, and the fact
Speaker 2: remains that as of today, there are no small modular
Speaker 2: reactors actually up and working in the United States or
Speaker 2: anywhere outside of China and Russia, though ge Vernova hopes
Speaker 2: to change that by twenty thirty. Nicole Holmes is the
Speaker 2: company's chief commercial officer and the nuclear engineer.
Speaker 12: This is very important.
Speaker 13: If you don't remember anything else, it's that this is
Speaker 13: real and it's happening right now. A lot of people
Speaker 13: ask me when will nuclear happen? When will there be
Speaker 13: new nuclear And the answer is going on today in
Speaker 13: the Ontario province in Canada, we are building the BWX
Speaker 13: three hundred and with our partner OPG, the small modular
Speaker 13: reactor will be online by the end of this decade.
Speaker 13: So if you start today in the US, for example,
Speaker 13: we have a construction permit application with our partner, the
Speaker 13: Tennessee Valley Authority, the utility that would own and operate
Speaker 13: that reactor, in front of the Nuclear Regulatory Commission, with
Speaker 13: the timeline to get that construction permit at the end
Speaker 13: of twenty twenty six and potentially began construction as early
Speaker 13: as twenty twenty seven. In this kind of timeframe, we
Speaker 13: could have small modular reactors operating in the early twenty
Speaker 13: thirties in the United States.
Speaker 12: The time is now. The reality is after Fukushima in
Speaker 12: most of the western world, there has not been new
Speaker 12: build now. We also were living during a period of
Speaker 12: time in which electric demand growth was reasonably flat.
Speaker 14: We're past that.
Speaker 12: We're at an inflection point where we need a lot
Speaker 12: more incremental electrons for national security, for economic growth, to
Speaker 12: frankly keep the lights on, as many parts of many
Speaker 12: industries are electrifying, so when you don't have an ultimate demand,
Speaker 12: it's hard to innovate. We're now into a phase where
Speaker 12: we have a substantial amount of growth, so it's the
Speaker 12: right time for nuclear to re emerge. It's also a
Speaker 12: time where it can play an incrementally important role in
Speaker 12: the decarbon is ation the existing system in the US.
Speaker 12: A lot of the decarbonization that has happened in the
Speaker 12: US to date was really coal to gas switching because
Speaker 12: gas is two thirds less carbon intense than coal, but
Speaker 12: there's still a carbon element. The beauty of nuclear is
Speaker 12: at zero carbon, and as customers want to lower the
Speaker 12: carbon intensity of their total solutions think hyperscalers as an example,
Speaker 12: they'll pay to add nuclear into their power generation mix
Speaker 12: to meet their sustainability commitments.
Speaker 2: The increased demand for electricity is one reason the move
Speaker 2: to nuclear may accelerate. Another is government support.
Speaker 12: US government plays an incredibly important role. It starts with
Speaker 12: the Nuclear Regulatory Commission approving our ability to start construction
Speaker 12: on projects. We do expect that by the summer of
Speaker 12: twenty six. Beyond that, funding certainly is a relevant dynamic.
Speaker 12: We have a project with TVA Tennessee Valley Authority that
Speaker 12: just received four hundred million dollars dollars of funding support
Speaker 12: from the Department of Energy. We also signed one hundred
Speaker 12: billion dollar MoU with the US government earlier this quarter
Speaker 12: in October to industrialize small modular actors in the US.
Speaker 12: When President Trump and a number of business leaders were
Speaker 12: in Japan earlier in the year. That could materially move
Speaker 12: the nuclear industry sooner if we gain access to a
Speaker 12: lot of that funding right now, it's a MoU. We're
Speaker 12: working really hard right now on site selection, on terms
Speaker 12: and conditions to translate that MoU into a definitive agreement.
Speaker 12: And if we can get something done with the US
Speaker 12: government in that regard at scale, that could be a
Speaker 12: real catalyst. So Secretary Rights Secretary Lutnik are both playing
Speaker 12: very visionary leadership roles as I see it, to try
Speaker 12: to move this nuclear industry, and we're working with them
Speaker 12: every day and every week to make that a reality.
Speaker 2: Business has all sorts of uncertainties. International relations go to
Speaker 2: a degree beyond that. Yes, how confident are you in
Speaker 2: that money from Japan specifically that was talked about in
Speaker 2: the commitment for investment in the United States for Nuclear
Speaker 2: Vernova specifically.
Speaker 12: Well, in our case, one of the benefits we have
Speaker 12: is we do have a Japanese partner in our nuclear business.
Speaker 12: So it's g E Vernova Hitachi together. I mean, Hatachi
Speaker 12: is a minority partner, but a very important partner for US.
Speaker 12: So if the Japanese government is going to fund projects
Speaker 12: in the US associated of that trade deal, it certainly
Speaker 12: makes sense for it to be in arrangements where there's
Speaker 12: Japanese companies also involved, and that's one of the benefits
Speaker 12: we have. Ultimately, opining on whether the transaction happens or
Speaker 12: not with the Japanese government is probably beyond my pay grade.
Speaker 12: I'll tell you though, that when I was in Japan
Speaker 12: with the US government and many of my business peers,
Speaker 12: I found the interactions highly motivating.
Speaker 2: Nuclear energy has had a long and not always smooth
Speaker 2: path in the United States, but the coming together of
Speaker 2: much higher demand for electricity, not least because of AI
Speaker 2: data centers with bipartisan support in Washington, may mean that
Speaker 2: this time truly is different, that nuclear power will provide
Speaker 2: the card that completes that inside straight we need to
Speaker 2: pay off for us.
Speaker 13: All you know.
Speaker 12: On the topic of nuclear I think the good news
Speaker 12: right now is that's generally a topic that's agreed to
Speaker 12: on both sides of the aisle, So there's some consensus there,
Speaker 12: maybe more so than some other power generation sources. So
Speaker 12: I'm not concerned about future administrations per se when it
Speaker 12: comes to nuclear, So we needed a kickstart, and with
Speaker 12: President Trump's vision, the country has it right now on nuclear.
Speaker 12: So we do inside the company every day talk to
Speaker 12: ourselves about meeting this moment in serving that vision. Twenty
Speaker 12: twenty six is an incredibly important year for nuclear in
Speaker 12: the US, but I think we're going to get a lot.
Speaker 2: Done coming up shopping for the holidays, we look at
Speaker 2: the future of department stores and what they need to
Speaker 2: figure out to have a future. This is a story
Speaker 2: about holding on to the past. There was a day
Speaker 2: when department stores were at the very center of the
Speaker 2: American middle class experience, from the elaborate display windows to
Speaker 2: the main four cosmetics counters, all the way up the escalators,
Speaker 2: through floor after floor of everything you needed for your
Speaker 2: wardrobe and for your home. Our colleague Romaine Bostik reports
Speaker 2: on one iconic retailer with ambitious plans to make its
Speaker 2: department stores fit the new age of the American shopper.
Speaker 15: The holiday season, that time of year when the city
Speaker 15: that Never sleeps takes a moment to reflect lights twinkle
Speaker 15: up and down to avenues of New York City from
Speaker 15: the posh storefronts down and soho to the ornate window
Speaker 15: displays up along fith Avenue to the epicenter in between
Speaker 15: the miracle and magic of Macy's on thirty fourth Street.
Speaker 4: Christmas is in just today. It's a frame of.
Speaker 15: Mind American retailer sees on the season, hoping to capitalize
Speaker 15: on that frame of mind, creating something that lasts beyond
Speaker 15: just the holidays. A reflection of that effort can be
Speaker 15: found about an hour's drive away from Manhattan in the
Speaker 15: Long Island suburb of Garden City, New York, where Macy's
Speaker 15: and spearheading a broader corporate transformation.
Speaker 6: We're looking to be that neighborhood store, the place that
Speaker 6: you think of that is it really convenient, but also
Speaker 6: has special things that you can buy for the people
Speaker 6: you love.
Speaker 15: Tony Spring took over a CEO of Macy's Inc. In
Speaker 15: twenty twenty four after more than nine years of helping
Speaker 15: to refresh the company's luxury retail arm, Bloomingdale's. Now the
Speaker 15: focus is on the Macy's brand itself, a middle market
Speaker 15: department store that has been plagued by slowing sales and
Speaker 15: waning cultural relevancy. In his first month on the job
Speaker 15: Spring announced plans to close the third of US Macy's locations,
Speaker 15: a move that would free up seven one hundred and
Speaker 15: fifty million dollars of assets, money to be reinvested in
Speaker 15: the best performing stores, including here at the Roosevelt Field Mall.
Speaker 15: When it opened in the nineteen fifties, the Impai design
Speaker 15: Roosevelt Field Mall was the largest in North America and
Speaker 15: today is situated in a county whose median income is
Speaker 15: significantly higher than the US average.
Speaker 6: This is a storied retailer with incredible, rich history that
Speaker 6: we're very proud of. But we never want our rich
Speaker 6: history to get in a way of our brighter future.
Speaker 6: The optionality that the customer has that they may want
Speaker 6: to shop on their phone, they want to shop in
Speaker 6: their car, they may want to shop in the store,
Speaker 6: and we have to be able to adjust the way
Speaker 6: we work to be able to provide that convenience for
Speaker 6: the customer.
Speaker 15: But that link between department stores and the customers they target,
Speaker 15: it's largely broken down. Department stores account for less than
Speaker 15: one percent of total US retail sales, down from about
Speaker 15: sixteen percent in the early nineteen nineties. Retail historian Michael
Speaker 15: Lisicki suggests the decline stems from losing sight of the cork.
Speaker 14: These stores really excels when they were able to directly
Speaker 14: serve their immediate communities. They weren't just commercial destinations, they
Speaker 14: were social destinations, and that was so important in their
Speaker 14: general success.
Speaker 15: Department stores have long been a mirror of the American consumer,
Speaker 15: but their roots they go back centuries to the Tokyo
Speaker 15: fabric shops of the sixteen hundreds, to the more modern
Speaker 15: template established in the eighteen fifties when a French husband
Speaker 15: and wife duo transformed a small Parisian novelty shop into
Speaker 15: La beau Mache, offering at the time the widest variety
Speaker 15: of goods under one roof.
Speaker 14: They started out very modest, usually as dry goods stores,
Speaker 14: and then slowly graduated and became bigger.
Speaker 16: It really was the focal center of so many communities.
Speaker 17: What happened America race to the suburbs, and new families
Speaker 17: were not necessarily drawn to department stores. They wanted price,
Speaker 17: they wanted convenience, they wanted late hours, and though the
Speaker 17: department stores tried to chase their traditional shopper to the suburbs,
Speaker 17: the customer had changed who is the customer today?
Speaker 14: I think that's a question that these remaining department stores
Speaker 14: need to ask themselves.
Speaker 15: The middle is exactly where macy still sees promise.
Speaker 6: Let's think of the middle as the center, the center
Speaker 6: of it all, which the center gives you the opportunity
Speaker 6: to serve up and to serve down. And I think
Speaker 6: from backstage to luxury, we have the opportunity across this
Speaker 6: retail portfolio to satisfy what customers are looking for today.
Speaker 4: The customer has choices.
Speaker 11: They're not handcuffed to any mall or any downtown.
Speaker 4: They can shop literally.
Speaker 11: Anywhere, literally anywhere, and they love the freedom that they
Speaker 11: can give it.
Speaker 15: Mark Cohen is a retail veteran who worked as an
Speaker 15: executive for some of the most iconic and now defunct
Speaker 15: department stores at the golden era, Bradley's, Lord and Taylor
Speaker 15: and Sears.
Speaker 11: A store has to be neat, clean and friendly. That's
Speaker 11: sort of step one. That's old style store management, and
Speaker 11: it got lost at Macy's twenty five thirty years ago.
Speaker 16: It seems like it would be a lot easier to
Speaker 16: do that if you were a single brand store or
Speaker 16: a more curated, smaller footprint.
Speaker 11: It's easy if your Apple and you only have a
Speaker 11: handful of products to sell, and your devotion is to
Speaker 11: those products, and your store presentation is deliberately, completely simple
Speaker 11: and straightforward.
Speaker 4: It's all about the merchandise.
Speaker 15: To make matters more complicated, the divide between the haves
Speaker 15: and have nots is widening economic uncertainty, forcing middle income
Speaker 15: households to pull back.
Speaker 16: When you look at where we are in twenty twenty
Speaker 16: five heading into twenty twenty six, is there a middle
Speaker 16: market retail business model?
Speaker 11: There's a market. It's not the market that there once was.
Speaker 11: It's a market that's under tremendous pressure and challenge, but
Speaker 11: it's viable if it represents things customers really want to buy,
Speaker 11: and it treats customers well enough for customers to remain loyal.
Speaker 15: One of the ways Macy's attempted to capture the shrinking
Speaker 15: middle was through deep discounts. Tony Spring is changing that precedent.
Speaker 6: I think closing a sale with value is compelling. People
Speaker 6: do it in many walks of life, whether it's the hotel,
Speaker 6: life stay at, or the restaurant that I visit. And
Speaker 6: we're in many different loyalty programs but we shouldn't start
Speaker 6: with the value. The value should be what helps close
Speaker 6: the sale, not what helps open the sale. Let's talk
Speaker 6: about leather, Let's talk about cashmere, Let's talk about lab
Speaker 6: grown diamonds, Let's talk about fragrance. Let's talk about the
Speaker 6: things that people actually attracted to. And then if value
Speaker 6: is a way to close the sale, so be it.
Speaker 15: It's a testament to a power shift from the old
Speaker 15: days where department stores and their fashion buyers where the
Speaker 15: taste makers, to today where the customer is firmly in charge.
Speaker 15: So how does a department store meet shoppers on their terms?
Speaker 8: I mean, in America, it's not like we really need
Speaker 8: to purchase apparel or accessories. This is something you do
Speaker 8: if you have a kid and they outgrow it. But
Speaker 8: today's customer wants to be excited about buying something, and
Speaker 8: I think that's what's missing.
Speaker 15: Sean grain Carter is a branding expert and associate professor
Speaker 15: at the Fashion Institute of Technology, and was once the
Speaker 15: e commerce director for Macy's, helping launch its online strategy
Speaker 15: in the late nineteen nineties.
Speaker 8: It's the magic of wanting to shop, not having it
Speaker 8: as drudgery. It's something you have to do because of
Speaker 8: the holiday is coming up and therefore you have to
Speaker 8: give a gift. It's the excitement of finding something new,
Speaker 8: finding something that you think is sexy or interesting, or
Speaker 8: just plain you know what you want.
Speaker 15: These days, that excitement comes just as easily through a
Speaker 15: few clicks, as e commerce offers customers and online version
Speaker 15: of the everything store that department stores once were.
Speaker 8: You could go to Macy's, you could go to Marshall Fields, Garfinkel's,
Speaker 8: you know, Wannamakers, I'm Magnet, and feel that what you
Speaker 8: bought was special because these stores made you feel special
Speaker 8: and that experience made you feel special. Today it's almost
Speaker 8: as if there's no excitement in shopping, and that's the
Speaker 8: magic that's missing. I mean, we know Macy's with it
Speaker 8: Thanksgiving Day parade and that's great, but customers don't want
Speaker 8: to feel that you don't want them.
Speaker 6: People love to be taken care of, and I think
Speaker 6: with our environment, you know, to have a beauty advisor
Speaker 6: tell you that that foundation doesn't really work on your skin.
Speaker 6: To be able to mix different brands in beauty to
Speaker 6: create what is your makeup regimen? That only happens when
Speaker 6: you're working with people who will tell you the truth
Speaker 6: that looks good on you, that doesn't look good on you.
Speaker 6: And I think we learned a long time ago in
Speaker 6: kind of retail sales one oh one to tell somebody
Speaker 6: somebody looks good in something just to make a sale
Speaker 6: only means you lose a customer for life. So you're
Speaker 6: better to give them the honest opinion and find something
Speaker 6: that works for them. I kind of come back to
Speaker 6: multi brand, multi category and multiprisers. It is really an
Speaker 6: effective advantage in this environment where people really aren't sure
Speaker 6: what brand is right for them.
Speaker 15: Online shopping in the US topped one point three trillion
Speaker 15: dollars last year, but in store shopping is still the
Speaker 15: preferred method for most Americans, with almost six trillion dollars
Speaker 15: in sales, according to a report from Capital One. Bloomingdale
Speaker 15: CEO Olivia A. Braun interprets these trends as complimentary.
Speaker 18: Of course, digital will keep growing. It's a fast green
Speaker 18: channel for US, and it's been the case for many years.
Speaker 18: I think we have seen more and more transactions happening online.
Speaker 18: But for me, the best way to actually invest online
Speaker 18: is keep investing in the stores. The best branding investment
Speaker 18: we can make as a department stores is investing in
Speaker 18: the store.
Speaker 15: Bloomingdale seems to have cracked the code under the Macy's
Speaker 15: ink umbrella. The department store has leaned into its high
Speaker 15: income consumer base.
Speaker 11: Bloomingdale's emerged from the MRK of a middle ground, non
Speaker 11: differentiated store on Third Avenue in the shadow of the
Speaker 11: Third Avenue l I'm Sure showing you My age, and
Speaker 11: became a real destination by virtue of the assortments that
Speaker 11: it presented, the ambiance that created the mojo that it delivered.
Speaker 15: Tony Spring is widely credited with restoring Bloomingdale's success, serving
Speaker 15: as CEO from twenty fourteen to twenty twenty three. He's
Speaker 15: now looking to bring that same feeling to Macy's.
Speaker 6: The wonder of blooming Dale's is that you kind of
Speaker 6: come in and a lot of eye candy, You see
Speaker 6: great brands. There's the real careful precision and the curation
Speaker 6: and the editing of what you see and how it
Speaker 6: all comes to life.
Speaker 11: He did a great job as the CEO of Bloomingdale's.
Speaker 11: He's now got this enormous task of recreating, creating some
Speaker 11: form of magic that exists for real at Macy's.
Speaker 4: It's a different customer.
Speaker 11: Though at Macy's it's a different customer, but it's the
Speaker 11: same challenge. It's the same challenge. You've got to be special.
Speaker 15: So when the holiday lights come down, the Thanksgiving Day parade,
Speaker 15: loans go back into Sorge, and the New York rush resumes,
Speaker 15: Macy's is still faced with the reality of a shrinking
Speaker 15: middle class. Who is the Macy's customer today?
Speaker 6: So working woman, family, people who enjoy, I think, the
Speaker 6: nicer things in life, but also like value. And I
Speaker 6: think the balance of us as retailer is not determining
Speaker 6: this is on sale or this is not on sale,
Speaker 6: or that everything you buy is on sale, or that
Speaker 6: everything you buy is at regular price. We like to
Speaker 6: have a menu, and I think it allows you to
Speaker 6: indulge in the people that you love. We have the
Speaker 6: capacity to show retail, to show the consumer Macy's at
Speaker 6: its best. It's opposed to just trying to survive. And
Speaker 6: I think there's a fine line that you move from
Speaker 6: surviving to getting into the game, to playing to win,
Speaker 6: to making sure you're showing the customer the very best
Speaker 6: that you're capable of.
Speaker 7: Six