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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Blue Big Day BAQ podcast. Good morning,

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Speaker 2: It's Thursday, the twenty third of October. I'm Caroline Hepka

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Speaker 2: in London and.

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Speaker 3: I'm Stephen Caroline Brussels. Coming up today, Oil prices jump

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Speaker 3: as the United States and EU ramp up sanctions on

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Speaker 3: Russian producers in a push for Ukraine peace talks.

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Speaker 2: Elon Musk hijacks Tesla's dismal earnings call to plead for

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Speaker 2: a one trillion dollar pay.

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Speaker 3: Package, plus China's AI push in Africa. How Deep Seek

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Speaker 3: is gaining ground among startups and innovation hubs across the continent.

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Speaker 4: Let's start with a roundup of our top stories.

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Speaker 3: The United States has sanctioning Russia's oil giants Rosneft and

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Speaker 3: Luke Oil, in a major U turn for US President

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Speaker 3: Donald Trump as he seeks to pressure Vladimir Putin to

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Speaker 3: negotiate an end to the war in Ukraine. Oil prices

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Speaker 3: immediately spiked in response to the sanctions, with Brent advancing

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Speaker 3: as much as three percent to trade above sixty four

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Speaker 3: dollars a barrel. Trump told reporters the peace process had

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Speaker 3: dragged on.

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Speaker 5: We canceled the meeting with President put and it just

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Speaker 5: it didn't feel right to me. It didn't feel like

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Speaker 5: we were going to get to the place we have

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Speaker 5: to get, so I canceled it. But we'll do it

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Speaker 5: in the future.

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Speaker 6: Mister President, can you tell us a little bit about

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Speaker 6: why you're elevating sanctions against Russia right now?

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Speaker 5: I just felt it was time. We'll waited a long time.

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Speaker 5: I thought that we'd go long before the Middle East.

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Speaker 3: The shifting policy signals the US president is running out

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Speaker 3: of patients with the Russian leader. But it's a gamble

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Speaker 3: given Trump's focus on keeping domestic gasoline prices low in

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Speaker 3: the US. But foreign policy analysts worn Russia has historically

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Speaker 3: been very good at evading these kinds of sanctions. Refiners

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Speaker 3: in India, which along with China are the biggest buyers

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Speaker 3: of Russian crewed have told Bloomberg the latest sanctions will

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Speaker 3: mean flows from Russia to them are expected to fall

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Speaker 3: to near zero.

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Speaker 2: Meanwhile, EU countries are preparing to tighten their sanctions on

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Speaker 2: Russian energy after agreeing on their nineteenth package against Moscow.

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Speaker 2: The measures will be automatically adopted this morning, barrying any

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Speaker 2: objections by EU leaders arriving in Brussels. The package targets

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Speaker 2: forty five entities that have helped Moscow evade sanctions, including

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Speaker 2: twelve companies in China and Hong Kong. It will also

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Speaker 2: include an import ban on Russian lng Titan, sanctioned bans

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Speaker 2: on two major Russian oil companies, and also target over

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Speaker 2: one hundred additional shadow fleet vessels. Arland's Minister Thomas Byrne

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Speaker 2: has told Bloomberg Radio the EU must use its power

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Speaker 2: to support Ukraine.

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Speaker 7: It is really really important that the European Union continue

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Speaker 7: to use its leverage, continue to use its unity and

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Speaker 7: indeed our power and our financial wherebithal to support Ukraine

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Speaker 7: in what they're doing, which is defending themselves and legitimately

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Speaker 7: under international law, making sure that they are keeping themselves

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Speaker 7: alive as an independent country, which they are entitled to do.

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Speaker 2: I assure a Peian Affairs Minister Thomas Burns speaking they're

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Speaker 2: ahead of the EU leaders gathering. One of the more

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Speaker 2: controversial points on their agenda includes allowing the use of

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Speaker 2: frozen Russian assets to provide loans to Ukraine.

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Speaker 3: US Treasury Secretary Scott Besson says everything is on the

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Speaker 3: table when it comes to possible tech sanctions on China.

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Speaker 3: The top whitest official was asked if America might consider

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Speaker 3: similar measures to those it has just imposed on Russia.

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Speaker 3: He told reporters the world has to retaliate against China's

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Speaker 3: policies on rare earth metals.

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Speaker 8: I will confirm that everything's on the table, that we

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Speaker 8: are going into the negotiations and with good intentions, with

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Speaker 8: great respect. The Chinese have put these export controls not

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Speaker 8: only in the US but on the whole world. And

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Speaker 8: if these export control whether it's software, engines or other things, happen,

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Speaker 8: it will likely be in coordination with our G seven allies.

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Speaker 3: Best centers of the key negotiators in the US China talks.

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Speaker 3: The America and Chinese presidents are due to meet next week.

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Speaker 3: As trade tangents keep ramping up.

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Speaker 2: Elon Musk is calling on Tesla investors to support his

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Speaker 2: one trillion dollar pay package. The billionaire CEO used the

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Speaker 2: company's earnings call to criticize the power of shareholder advisory

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Speaker 2: firms who have criticized the plan.

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Speaker 9: Like I said, I just don't feel comfortable building robot

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Speaker 9: army here and then you know, being ousted because of

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Speaker 9: some asline recommendations from Iss and Glass Lewis, who have

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Speaker 9: no frigging clue. I mean those guys are corporate terrorists.

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Speaker 2: Elon Musk, speaking there as on Tesla's call. His pitch

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Speaker 2: came as the electric vehicle maker reported a forty percent

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Speaker 2: plunge in operating profit as rising costs under cass a

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Speaker 2: record quarter of vehicle sales. Customers had rushed to buy

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Speaker 2: Tesla's before a US government tax credit expired at the

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Speaker 2: end of September.

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Speaker 3: To other earnings news, SAPs cloud third quarter revenue has

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Speaker 3: missed estimates, citing what it describes as an uncertain economic backdrop.

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Speaker 3: Europe's most valuable software company reported almost five point three

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Speaker 3: billion euros in the period on an adjusted basis, that

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Speaker 3: slightly below expectations. The news comes after Cloud Sales CEO

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Speaker 3: Christian Clin pivoted to the company away from selling traditional

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Speaker 3: software licenses to subscription services. The company's American depository seats

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Speaker 3: slid about four percent in late trading after the results

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Speaker 3: were released.

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Speaker 2: Now to the UK, which is planning a package of

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Speaker 2: emergency measures to boost house building in the capital, Bloomberg

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Speaker 2: has learned that the government's planning to cut the proportion

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Speaker 2: of affordable homes that developers have to provide from thirty

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Speaker 2: five percent currently down to twenty percent. When asked, spokespeople

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Speaker 2: said that the plans are not yet finalized, but will

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Speaker 2: give the mayor stronger levers to bring thousands of homes

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Speaker 2: forward more quickly. Here is Bloomberg's d Fulston with.

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Speaker 10: More stifling regulation, planning delays and stringent requirements for affordable

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Speaker 10: homes just a few of the problems. The Mayor of

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Speaker 10: London and the UK's Housing Secretary are looking to relieve.

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Speaker 10: Measures to boost of elopment will look at fast tracking

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Speaker 10: planning and loosening housing design rules. One proposal sees a

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Speaker 10: reduction in the number of affordable homes that providers have

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Speaker 10: to build. It's a tantalizing prospect for a paralyzed planning system,

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Speaker 10: but the government has a way to go if it

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Speaker 10: wants to build one point five million new homes this parliament.

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Speaker 10: One forecast by Molly or London says that at the

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Speaker 10: current rate, just fifteen to twenty thousand homes will be

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Speaker 10: an active construction in London by the start of twenty

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Speaker 10: twenty seven. In London, Freddie Fulston Bloomberg Radio.

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Speaker 2: So those are our top stories for you this morning.

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Speaker 2: Now in terms of the markets, Oil right now jumping

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Speaker 2: three point three percent, half of Brank reread futures at

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Speaker 2: sixty four dollars at sixty six about on the sanctions

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Speaker 2: news from the US, Asians declining. The masci Asia Pacific

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Speaker 2: Index down six tenths of one percent, so we're far

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Speaker 2: from the record high that we saw on Monday. Gold

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Speaker 2: has also stumbled this week. Gold currently down a tenth

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Speaker 2: of one percent at four thousand and ninety two dollars.

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Speaker 2: The Nazda yesterday lost one percent. Stop futures for the

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Speaker 2: USR in the green, for the ustox fifty futures in

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Speaker 2: the red down about a tenth of one percent. Two

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Speaker 2: bits of breaking news Nokia adjusted operating profit coming in

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Speaker 2: a beat versus analyst estimates. And an interesting announcement from

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Speaker 2: air Bus Leonardo and Telles signing a memorandum of understanding

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Speaker 2: for space and satellite projects. So this expected to have

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Speaker 2: a an annual revenue of six and a half billion euros.

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Speaker 2: So that announcement coming out this morning.

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Speaker 3: At a moment. More on the US moves to sanction

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Speaker 3: Russian oil plus had China's AI model, Deep Seek is

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Speaker 3: being heavily promoted to startups in Africa. But another story

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Speaker 3: that we've been reading this morning on the rise of

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Speaker 3: the wine bar in London and New York. Now, I

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Speaker 3: don't want to claim credit for this, Caroline, but I've

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Speaker 3: had this conversation with our food outitor k Creator on

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Speaker 3: many occasions how you can't move for wine bars in London,

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Speaker 3: and that I think she and I had a very

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Speaker 3: long list of places that we didn't get to try

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Speaker 3: before I moved away. So there's definitely lots of great

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Speaker 3: recommendations in her piece. But it's an interesting I suppose,

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Speaker 3: trying to explain why these small venues that have limited

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Speaker 3: menus are doing so well in places like London and

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Speaker 3: New York. Partly cost is the issue is that you know,

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Speaker 3: running a restaurant is extremely expensive, and if you're able

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Speaker 3: to do it with a smaller menu and in a

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Speaker 3: smaller venue too, that's something that can really really help

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Speaker 3: to make it work. Now, I would say that these

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Speaker 3: are obviously things that are omnipresent in cities like Brussels

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Speaker 3: where I am, or in Paris where I lived previously

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Speaker 3: as well. It's a model that's been tried and tested,

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Speaker 3: so it's interesting to see. I suppose it's rise in

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Speaker 3: popularity in other parts of the world as well.

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Speaker 2: Oh, it's just lovely to feel like a cool girl,

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Speaker 2: because one of the places that I went to lunch

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Speaker 2: up very recently was on Kate Cretor's list, so I thought, wooh,

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Speaker 2: I have stumbled across one of these popular names. But yes,

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Speaker 2: she cites in London Marjorie's Cadet and Hectors as the

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Speaker 2: sorts of places you know which have, as you say,

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Speaker 2: often very unusual wine lists as well, she points out,

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Speaker 2: is a kind of a trend.

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Speaker 4: But yes, part of it is also that.

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Speaker 2: Then the whole idea is that you make a meal

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Speaker 2: into a kind of party and it can go on forever.

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Speaker 3: Well, exactly which I think is talked about it being

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Speaker 3: a dangerous occupation, which I can identify with lots of

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Speaker 3: great recommendations in Kate Crador'speace. We'll put a link to

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Speaker 3: it in our podcast show notes. Well, that's bringing more

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Speaker 3: now in on our top story this morning. For the

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Speaker 3: first time since returning to the White House, President Trump

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Speaker 3: is rolling out sanctions against Russia's two largest oil producers,

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Speaker 3: going to the heart of the country's war economy, but

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Speaker 3: the impact may be limited in the near term. We've

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Speaker 3: certainly seen markets reacting to the news today, though. Let's

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Speaker 3: bring in Tony Halpiner leads our team covering Russia for more. Tony,

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Speaker 3: this is quite a u turn by Donald Trump. How

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Speaker 3: much will the sanctions impact Russia versus spooking the global

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Speaker 3: oil markets?

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Speaker 7: Yes, good morning.

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Speaker 6: Well, I mean these are certainly you know, the two

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Speaker 6: largest oil producers. As you've mentioned, there account for nearly

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Speaker 6: half of Russia's exports, and taxes that Russia gets from

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Speaker 6: oil and gas is something like a quarter of the

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Speaker 6: federal budget. So potentially the impact is very large on

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Speaker 6: Russia and its ability to fund the war, given that

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Speaker 6: they're already struggling with a growing budget deficit because of

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Speaker 6: the amount of money consumed by the military. But as

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Speaker 6: you've noted, it's a slow burning impact. The order gives

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Speaker 6: I think until November twenty first to unwind some of

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Speaker 6: these agreements, and traders are going to be wanting to

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Speaker 6: see whether or not the US is going to follow

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Speaker 6: up on this or whether famously President Trump makes another

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Speaker 6: zigzag and changes policy before they really begin to bite.

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Speaker 2: How do you think that Putin will react and what

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Speaker 2: does it mean therefore for the war in Ukraine.

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Speaker 6: Well, I'm Putin has really resisted changing policy under the

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Speaker 6: pressure of any sanctions, and so publicly at least he

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Speaker 6: will say that this will make no difference. But privately

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Speaker 6: the Krimin is clearly going to be very concerned about

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Speaker 6: the impact on revenues, on its ability not only to

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Speaker 6: fund the war, but to support the economy in Russia

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Speaker 6: and to prevent the kind of discontent that would threaten

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Speaker 6: their ability to continue waging war. So yes, they're going

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Speaker 6: to be watching this very carefully. They're already struggling, as

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Speaker 6: I said, to balance the budget and this is not

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Speaker 6: going to make that any easier.

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Speaker 3: The place of China and India in all of this

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Speaker 3: are interesting too. They're the big buyers of Russian and

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Speaker 3: crude or they're not being sanctioned directly, but we're already

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Speaker 3: hearing from Indian refiners that they'll essentially have their supplies

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Speaker 3: reduced to zero. How far reaching can we see these

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Speaker 3: sanctions as being Well.

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Speaker 6: These are the two big test cases, really, and India

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Speaker 6: gets about a third of its oil now from Russia,

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Speaker 6: and before the war, it was a very small purchaser,

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Speaker 6: and something like a fifth of Chinese crew from Russia

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Speaker 6: as well. But the question you've raised is the key

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Speaker 6: point whether or not these countries really consider that they

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Speaker 6: be the target of secondary sanctions. And in the case

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Speaker 6: of China, for example, the US is trying to do

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Speaker 6: a trade deal. President Trump and President Seaching being are

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Speaker 6: expected to meet soon, So whether or not the US

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Speaker 6: would really impose secondary sanctions to deter Chinese purchases is

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Speaker 6: an open question. As you've noted, though, India feels that

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Speaker 6: they're going to start moving away from Russian oil and

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Speaker 6: that's going to have a big effect on Russian income.

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Speaker 2: We do also have to layer into this though, the EU,

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Speaker 2: with this nineteenth package of new sanctions that's expected to

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Speaker 2: go through today, how much more incremental pressure will this bring.

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Speaker 1: Well.

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Speaker 6: It's targeting, particularly an import ban on liquefied natural gas,

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Speaker 6: which is something that Russia's been turning to in order

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Speaker 6: to increase its revenues. That's going to come in from

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Speaker 6: January twenty twenty seven. And it's also targeting entities that

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Speaker 6: help Russia evade the currents. So it's a tightening with

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Speaker 6: the screwis. As you say, it makes life still more

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Speaker 6: difficult for Russia. It will gradually raise the pressure, but

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Speaker 6: of course Ukraine is facing immediate pressure every day from

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Speaker 6: Russian military actions. So in some ways it's a race

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Speaker 6: against time as to which one has the bigger impact

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Speaker 6: in order to bring Russia to the table to negotiate

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Speaker 6: and enter this war.

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Speaker 3: Okay, Tony, great to have you with us. Thanks for

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Speaker 3: your ursus this morning, Tony Halpin leading our team covering Russia.

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Speaker 4: Stay with us.

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Speaker 3: More from Bloomberg Daybreak Europe coming up after this.

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Speaker 2: Huawei is promoting the Chinese AI model Deep Seek to

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Speaker 2: African startups and innovation hubs, offering it as a cheaper

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Speaker 2: alternative to American firms like Open Ai. It's a long

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Speaker 2: term bid for customers, for soft power and for the

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Speaker 2: vast troves of data that will shape the future of

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Speaker 2: artificial intelligence. And our senior reporter covering technology in Africa,

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Speaker 2: Lonnie Prince Lou is in our London studio to tell

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Speaker 2: us more. Good morning, very good to speak to. How

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Speaker 2: is Huawei promoting deep seak then in Africa?

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Speaker 1: Okay, so earlier this year, you know they were in

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Speaker 1: Kenya sitting with a bunch of startup c CTOs, and

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Speaker 1: this by executive came up and immediately started talking about

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Speaker 1: deep Sick and she basically says, you know, deepic is

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Speaker 1: so hot, no one wants to talk about anything else,

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Speaker 1: and that is of course too so so that that

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Speaker 1: executive then started pitching to this group of African startups

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Speaker 1: and the room was immediately alive and interested in what

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Speaker 1: he was saying. So yeah, so I think I think

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Speaker 1: there's definitely a lot of interest in what deep Sea

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Speaker 1: can offer startups in Africa.

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Speaker 3: How does the reception that deep Seek's getting compared to

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Speaker 3: I suppose the use of other AI models. We talk

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Speaker 3: about open AI and others.

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Speaker 1: So everyone, I mean AI, everyone's quite excited about it

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Speaker 1: when it comes from the E or the West. The

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Speaker 1: thing is in Africa, it's quite price sensitive if you

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Speaker 1: want to customize and you want to train these models,

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Speaker 1: and of course deep Stick is also open source, which

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Speaker 1: you haven't seen a lot with Western models, so you

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Speaker 1: can you can customize your your your aion model, whether

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Speaker 1: it'd be a small language model or a large language model.

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Speaker 4: So that's really the attraction.

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Speaker 1: For a lot of these start up Okay CEOs and founders. Yeah,

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Speaker 1: so so it's it's taken off. It's definitely searched in

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Speaker 1: terms of what people are using when it comes to

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Speaker 1: sort of founders on the continent.

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Speaker 2: Okay, so there's a lot of interest. But are their

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Speaker 2: concerns about the push by Deep seak because you've been

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Speaker 2: reporting on that too.

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Speaker 1: Yeah, so they are critics and people are worried that

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Speaker 1: Deep admits that the the data stored in China. According

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Speaker 1: to Chinese laws, it can be accessed.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 4: I'm Caroline Hepka and.

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Speaker 3: I'm Stephen Carroll. Join us again tomorrow morning for all

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Speaker 3: the news you need to start your day right here

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Speaker 3: on Bloomberg Daybreak Europe.