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Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Yes,
Speaker 1: we had a FED meeting this week, signaling three rate
Speaker 1: cuts likely this year. Despite the FED lifting the forecast
Speaker 1: for core inflation, stocks ralling on the news, sending the
Speaker 1: SMP to a record close about fifty two hundred for
Speaker 1: the first time, folks. You can read more about it
Speaker 1: and what the FED is up to at Bloomberg dot Com.
Speaker 3: Tech talks outperforming right after that FED decision, and the
Speaker 3: world of technology is where we are focusing this hour,
Speaker 3: including talks about Apple and Google getting more deeply involved
Speaker 3: with one another, this time on our artificial intelligence. And
Speaker 3: you know her for her podcasts and chronicling of the
Speaker 3: individuals and companies that have dominated the tech landscape for
Speaker 3: the past thirty years. Kara Swisher on her new book
Speaker 3: It's called burn Book, a Tech love story All of.
Speaker 1: That to coll and we begin with the doubling down
Speaker 1: on a relationship that's already existed for years between two
Speaker 1: very well known giants in the tech space. We are
Speaker 1: talking about Apple and Alphabet.
Speaker 3: The story by Bloomberg's chief technology reporter Mark German caught
Speaker 3: the attention of investors, sending both stocks hire. Earlier this week,
Speaker 3: Mark joined us along with bloomberg new Senior executive editor
Speaker 3: for Global Technology, Tom Giles, giving us all the details
Speaker 3: Apple and.
Speaker 4: Google are and talks for Apple to license Gemini, that's
Speaker 4: Google's top generator of AI, large language model for integration
Speaker 4: into the iPhone and iOS eighteen and the iPad later
Speaker 4: this year. Apple has its own homegrown AI, including some
Speaker 4: Jenai that will be based into the device. Those will
Speaker 4: be models that run on the phone themselves, but with
Speaker 4: a lot of consume. Are clamoring for our Gemini Microsoft
Speaker 4: Copilot Chat GBT the ability to type in a short
Speaker 4: prompt and get an essay, a letter, or an image
Speaker 4: or what not created for you that's very reliant on
Speaker 4: the cloud. It's a very expensive endeavor obviously that comes
Speaker 4: with a lot of challenges in scrutiny as well, and
Speaker 4: so Apple felt like going with a partner at least
Speaker 4: this year, isn't its best interest. It has talked to
Speaker 4: open AI and it has talked to Google. The open
Speaker 4: AI talks happened recently, but the Google talks are active,
Speaker 4: and it appears both Google and Apple are keen on
Speaker 4: getting something done by June. Obviously this could still fall apart,
Speaker 4: but this is what's happening right now, the two being
Speaker 4: in discussions.
Speaker 3: Hey, Mark, does it also tell us a story? Does
Speaker 3: it tell you a story about where Apple is when
Speaker 3: it comes to its progress on AI right now or
Speaker 3: lack there? Yeah, and that's the real question.
Speaker 4: It tells us that Apple has not made as much
Speaker 4: progress as it would need to on the generative AI
Speaker 4: and cloud based generator of AI front specifically. I do
Speaker 4: think they have made a lot of progress on on
Speaker 4: device AI in day to day usability, but either it
Speaker 4: has not made progress or it doesn't feel like it
Speaker 4: needs to make progress on cloud based GENETAI specifically based
Speaker 4: on short prompts. I would imagine it does come down
Speaker 4: to the fact that they need They know they need
Speaker 4: to get this out this year. They know Google's the
Speaker 4: best why not expand that search deal, maybe make some
Speaker 4: money off of it too, while having far less liability
Speaker 4: than they would if they went in house.
Speaker 1: Yeah, I do feel like the pressure is on all
Speaker 1: of the big tech names to kind of really move
Speaker 1: forward when it comes to AI. Tom Giles come on
Speaker 1: in on this, because I feel like when you hear
Speaker 1: Apple and Google get together on anything, I feel like
Speaker 1: exponentially the impact And I think about regulators just being like, wait,
Speaker 1: what are you two doing now again.
Speaker 5: As we saw this story coming together, the wheels in
Speaker 5: my head started turning. Immediately. My thinking is, DOJ and
Speaker 5: FTC are going to look at this this agreement should
Speaker 5: it come together with great interest? As we all know,
Speaker 5: DJ is already looking into that relationship between Apple and
Speaker 5: Google that gives Apple, that gives Google added prominence on
Speaker 5: the iPhone.
Speaker 1: When it comes to search right, when it comes.
Speaker 6: To search right.
Speaker 5: But so if you see something that deepens the relationship
Speaker 5: between two of the most powerful companies in the world,
Speaker 5: you're gonna want to make sure that that's not something
Speaker 5: that's gonna thwart competition or in any way hurt the
Speaker 5: consumer somehow keep competitors from getting into this space. So
Speaker 5: there's lots of questions that they have that they're going
Speaker 5: to ask and already the FTC is looking at the
Speaker 5: relationship when it comes to AI between Microsoft and open Ai.
Speaker 5: So these kinds of things they're gonna.
Speaker 1: They're gonna be why whiteboard, I'm assuming you guys had
Speaker 1: this massive white.
Speaker 5: We're gonna want to look at the find at the details,
Speaker 5: the fine print.
Speaker 3: So Mark, it's funny when you when you talk about
Speaker 3: Apple and Alphabet, you know they're certainly competitors to the
Speaker 3: extent that Alphabet has the Android operating system, which you know,
Speaker 3: is the biggest operating system in competition with Apple's iOS.
Speaker 3: But at the same time they are partners and Apple
Speaker 3: has had partnerships with once rivals in the past. I
Speaker 3: think back to this event in twenty fifteen, when I
Speaker 3: think it was an iPhone event or maybe an iPad event,
Speaker 3: where a Microsoft executive was on stage, and it was
Speaker 3: such a big deal that like a Microsoft executive was
Speaker 3: actually on stage at this event. If this partnership comes
Speaker 3: to fruition, is it that big of a deal or
Speaker 3: is it not that big of a deal because Apple
Speaker 3: and Google have had a partnership in the past.
Speaker 4: I certainly remember that iPad pro announcement that was in
Speaker 4: September twenty fifteen, and Microsoft at the time, under their
Speaker 4: new CEO, sought in Nadela. At the time, their goal
Speaker 4: was to get their software and services everywhere. Apple's goal
Speaker 4: at the time was to make the iPad more of
Speaker 4: an office device, and so there was some mutual benefit there.
Speaker 4: Getting Office on the iPad would be good for both parties.
Speaker 4: In this case, getting Gemini built into the iPhone would
Speaker 4: also be.
Speaker 7: Good for both parties.
Speaker 4: Apple would be able to push new AI features that
Speaker 4: everyone's claiming for to its two billion users, and Gemini
Speaker 4: would be gaining many more users and a stronghold on
Speaker 4: one of the most popular devices of our lifetimes. Right,
Speaker 4: and I want one more thing.
Speaker 6: I want to add.
Speaker 4: Tom's point is excellent about the FTC and the doj
Speaker 4: our thinking on this is that in order to combat
Speaker 4: those concerns, Apple probably will have to have an API
Speaker 4: or some sort of short or feature for other generative
Speaker 4: AI providers, maybe open Ai, maybe Anthropic, maybe someone else
Speaker 4: to be able to integrate themselves into iOS as an alternative.
Speaker 4: And better yet, Apple probably would have to let users
Speaker 4: choose when you boot up the phone for the first time,
Speaker 4: who you want your generative AI provider to be or
Speaker 4: as Tom said, the DOJ and FTC are going to
Speaker 4: be smelling around pretty quickly.
Speaker 1: I also do wonder about Gemini Apple Google, who gets
Speaker 1: I mean, who benefits more. You just said mark Gemini
Speaker 1: into the iPhone. It's good for both parties. Did one
Speaker 1: of them need to do this more than the other?
Speaker 1: Was the pressure on Apple?
Speaker 6: You know you move in?
Speaker 4: Yeah, you know, I would say the easy answer is
Speaker 4: the pressure is more so on Apple. But I think
Speaker 4: there's pressure on both companies.
Speaker 6: Right Google.
Speaker 4: You know, Search obviously is down. Google is looking for,
Speaker 4: you know, new areas of growth and getting its you know,
Speaker 4: next big thing on the world's biggest or second biggest platform.
Speaker 4: You know, it's a big deal for them. They're already
Speaker 4: owning their own in house platform, they'll own number one,
Speaker 4: and now they could own number two on AI as well.
Speaker 4: So I think the pressure is probably equal on both,
Speaker 4: maybe more so on Google, because I think if Apple
Speaker 4: didn't do anything this year on the A front, if
Speaker 4: they didn't do this, it would be a bad look.
Speaker 4: We'd certainly criticize them heavily for it. But would their
Speaker 4: revenue drop significantly? Would people stop buying iPhones, probably not so. Certainly,
Speaker 4: maybe the pressure is more on Google, but certainly on both.
Speaker 5: From the investor point of view, you have to look
Speaker 5: at the perception that there are some players that are
Speaker 5: far further ahead when it comes to generative AI. A
Speaker 5: lot of people are giving a lot of props to
Speaker 5: Sachi Nadella and Microsoft for getting in on that relationship
Speaker 5: with open Ai at an early stage, making a big investment,
Speaker 5: and being seen as leaders. There's a lot of criticism
Speaker 5: about Google, on the other hand, as being something of
Speaker 5: a lagorty. They should have been way ahead of the
Speaker 5: game when it comes to AI. They've got deep mind,
Speaker 5: they had their own AI team at work. Sometimes those
Speaker 5: two teams worked at loggerheads with each other. They're getting
Speaker 5: that better, but they are seen as being behind Microsoft
Speaker 5: and its relationship with open Ai. You see Meta coming
Speaker 5: from out of left field with its lms. It's open
Speaker 5: sourcing them. There's a lot of momentum behind that, and
Speaker 5: Zuck is putting a big push behind that, and Apple
Speaker 5: of those big players.
Speaker 6: You really would like to see see Apple.
Speaker 5: Being in that conversation. It's not in those conversations. It's
Speaker 5: not being mentioned in the same breath Microsoft, Open AI,
Speaker 5: and even Google.
Speaker 1: It does feel like today's news has kind of changed that, right,
Speaker 1: like all of a sudden the conversation maybe, all right,
Speaker 1: I don't know that Apple all of a sudden, we're
Speaker 1: looking at differently a little bit.
Speaker 5: Potential that it that it has a strong relationship with
Speaker 5: Google and it's going to capitalize on that and weave
Speaker 5: more of those open those AI features into the iPhone,
Speaker 5: providing a huge platform and a huge validation for what
Speaker 5: Google has been doing. Both have the potential to benefit
Speaker 5: tremendously from this, And.
Speaker 1: Tim, I think about how much we've talked about Google,
Speaker 1: right and the criticism of Gemini specifically in terms of
Speaker 1: some of the biased concerns.
Speaker 3: Yeah, so talk a little bit about that, Mark, because
Speaker 3: it was just a couple of weeks ago that we
Speaker 3: were talking about all the challenges that Alphabet was facing
Speaker 3: in its AI ambitions and the CEO of the company
Speaker 3: had to essentially come out and say, well, you know,
Speaker 3: wait a second, this is not acceptable to us, and
Speaker 3: we're working on this to try to make it better.
Speaker 4: Yeah, and over those familiar with some controversy on Twitter
Speaker 4: and other social media about you know, which races were
Speaker 4: portrayed in an historical context. This is my understanding. My
Speaker 4: understanding is that Google would provide the Gemini underlying model
Speaker 4: to Apple right, which apparently did not have the issue.
Speaker 4: And this particular issue that soon Darbar Chai, as you said,
Speaker 4: commented on and was at the center of the controversy
Speaker 4: was related to the end user interface of the Google chatbot.
Speaker 4: So it's apparent that, or apparently from what I'm told,
Speaker 4: this issue wouldn't have been replicated on the iPhone integration.
Speaker 1: You know, it's really interesting, Tim and I are both
Speaker 1: reading Caris Switscher's book that kind of takes you through
Speaker 1: so much in the technology world.
Speaker 8: Now.
Speaker 1: I know our own team has really just chronicled it
Speaker 1: so well over the last couple of decades or the
Speaker 1: last decade and a half. But I just think about, how,
Speaker 1: you know, Tom, there are companies that were so much
Speaker 1: seemingly at the forefront that all of a sudden they weren't.
Speaker 1: And I do feel like you see this jocking among
Speaker 1: especially some of the establishment, of like we got to
Speaker 1: be on this because this is what we all think
Speaker 1: is the next wave.
Speaker 5: Well, I'm really struck by if you look at the
Speaker 5: share price of these companies. I mean, Apple rocketed ahead,
Speaker 5: became the world's most valuable company, but at stock has
Speaker 5: kind of, you know, taken a turn for the worst.
Speaker 5: By contrast, I'm fascinated by you. Look at the share
Speaker 5: price for Meta on the other hand. A couple of
Speaker 5: years ago, Meta was on the ropes. We were talking
Speaker 5: about the existential threat posed by companies like TikTok, for example.
Speaker 5: We were talking about the things that Apple has done,
Speaker 5: sort of changing and making it harder for you to
Speaker 5: monetize advertising on the iPhone, and that really hurt Facebook.
Speaker 5: A couple of years ago, their stock was tanking as
Speaker 5: a result of all these things. Now look at how
Speaker 5: Meta's performing visa the Apple. The story has changed dramatically.
Speaker 3: Well, Tom, I'm curious about this idea of a landgrab
Speaker 3: or AI going on right now, because each of these
Speaker 3: big megacap companies has their own identity, right Facebook, Meta
Speaker 3: owns social networking, Apple owns the iPhone and the mobile
Speaker 3: operating system, at least at the high end. Right, you
Speaker 3: have Alphabet that owns search. You have Microsoft, which would
Speaker 3: say that it owns productivity, but it plays in a
Speaker 3: lot of different areas. And now they're all going after
Speaker 3: what is essentially the same thing. Is there any sort
Speaker 3: of historical corollary for this when you have so many
Speaker 3: companies that are known for their own thing kind of
Speaker 3: going after a new thing.
Speaker 5: Yeah, and some of them do better than others. I
Speaker 5: mean the Internet, some of them you know, built themselves
Speaker 5: on that, and others got left behind. Microsoft comes to mind,
Speaker 5: for example, when it comes to mobile telephony. You know,
Speaker 5: Apple sprinted ahead and really has owned that space. Google
Speaker 5: came in and with Android has done very very well.
Speaker 5: But if you look at dominance of the hardware and
Speaker 5: of the US market, Apple is kind of really run
Speaker 5: away with that. Microsoft went nowhere.
Speaker 1: So Mark come back in on because I think about
Speaker 1: just the last is it week or so or two
Speaker 1: weeks or so? Apple give it up on the car
Speaker 1: after ten years and now this potential deal. It looks
Speaker 1: like with Google moving kind of all in pretty aggressively.
Speaker 1: It feels like with artificial intelligence, how are you kind
Speaker 1: of looking at Apple holistically right now on this news?
Speaker 4: The presence of new artificial intelligence software and capabilities doesn't
Speaker 4: change the underlying idea that Apple's a hardware company that
Speaker 4: makes seventy five percent to eighty percent of their annual
Speaker 4: revenue from hardware. So even if they fix this underlying
Speaker 4: problem with the lack of artificial intelligence, or even when
Speaker 4: they do as I should say, doesn't fix the underlying
Speaker 4: notion that they don't necessarily have a next generation hardware
Speaker 4: product to make money off of. Now here's where those
Speaker 4: two things come together. AI could enable all sorts of
Speaker 4: new hardware products in the future.
Speaker 3: What do you mean very.
Speaker 6: Core of that?
Speaker 4: Well, the car was an AI product right at self
Speaker 4: driving cars AI hardware, and now that AI hardware is
Speaker 4: no longer happening. So they're going to have to figure
Speaker 4: out some sort of new hardware category, whether it's based
Speaker 4: on AI, probably or not, to really move the needle
Speaker 4: revenue wise. The iPhone has completely plateaued, the iPad has
Speaker 4: been sinking, the Mac has plateaued. Some of their other
Speaker 4: products AirPods, Apple Watch, et cetera. Those are growing, right,
Speaker 4: but those are not meaningful contributors to the bottom line.
Speaker 4: The jury is still out on the vision pro. There
Speaker 4: are some other future categories that they're working on, so
Speaker 4: I'll mention now and some I won't, including AirPods with cameras,
Speaker 4: augmented reality glasses. But those don't really change the fundamental story.
Speaker 4: The question is what is the next big thing that
Speaker 4: could bring as much revenue and interest in as a
Speaker 4: car And I think even for Apple right now, it's
Speaker 4: a little unclear.
Speaker 5: Hey, Mark, and I've got a question for you in
Speaker 5: the last few seconds. Can you talk about where and
Speaker 5: how Apple might use this for Vision Pro.
Speaker 1: And real quick? Mark about there?
Speaker 4: Ye know, that's yeah, yeah, sure, that's a great question.
Speaker 4: So there is some AI in the Vision Pro, but
Speaker 4: nothing like you've seen from what Meta has been able
Speaker 4: to do with their headsets integrating AI. There is a
Speaker 4: future I see where the vision pro cameras could tap
Speaker 4: into this new generative AI that they're getting for Google
Speaker 4: and their in house to unite those two things. You
Speaker 4: could be walking around a grocery store. The artificial intelligence
Speaker 4: compare with those cameras tell you more about a food
Speaker 4: item you're looking at, or you look at a player
Speaker 4: at an NBA game. The AI combined with those cameras
Speaker 4: can tell you their stats or what their three point percentages,
Speaker 4: depending on where they're standing behind the r.
Speaker 1: All right now, I totally kind of get it, all right,
Speaker 1: We so appreciate it. Markerman, Bloomberg News Chief Technology Report
Speaker 1: and of course, Bloomberg News Senior Executive editor for Global Technology,
Speaker 1: Tom Giles joining us in studio.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm. Easter Listen
Speaker 2: on Apple, card Play and the Bright Auto with a
Speaker 2: Bloomberg Business at or watch us live on YouTube.
Speaker 3: It is Bloomberg BusinessWeek. That's Carol Master. I'm Tim Staneveek,
Speaker 3: and you all know our next guests from the podcast
Speaker 3: on with Kara Swish and Pivot. You see her on CNN,
Speaker 3: where she's a contributor. She's also a former contributing opinion
Speaker 3: writer for The New York Times. She co founded the
Speaker 3: tech news site Recode, and then, earlier in her career,
Speaker 3: she was also a reporter for The Wall Street Journal,
Speaker 3: where she founded the tech news site All Things D
Speaker 3: and she was a reporter at the Washington Post.
Speaker 1: All right, everybody. Her new book is burn Book, a
Speaker 1: Tech love Story. It details her more than thirty years
Speaker 1: covering the tech industry. We are delighted to have with
Speaker 1: US journalist and author Kara Swisher joining us now from Chicago. Hello, Hello,
Speaker 1: to say that we love the book. As an understatement,
Speaker 1: I think Tim and I both listened to it as
Speaker 1: audio books, so it was fun to hear you narrate it.
Speaker 1: We want to get into the book you, but we'd
Speaker 1: be You're welcome, we'd be remiss not to kind of
Speaker 1: ask you about kind of the broader I don't know,
Speaker 1: tech outlook if you will, and some of the stories,
Speaker 1: whether it's the redded ipo, whether it's TikTok banning in
Speaker 1: the US, whether it's Apple and Google getting together on AI.
Speaker 1: What is it that you kind of find really really
Speaker 1: interesting right now and that you think investors in like
Speaker 1: a Bloomberg audience or the audience at large, should really
Speaker 1: be paying attention to.
Speaker 7: Sure, Interestingly, i'd have to tell you something about that book.
Speaker 7: The audio version is selling the double the amount of
Speaker 7: the print version. Wow, he's the bestseller list. So it's
Speaker 7: really interesting. So that to me, since my last book,
Speaker 7: which was twenty five years ago, is a really interesting trend. Obviously,
Speaker 7: I do podcasts, so people like listening to me.
Speaker 3: So did you narrate your other books though, Caro, I did.
Speaker 7: I did, but nobody was listening. So I wonder if
Speaker 7: if I wonder if it is there is no iPhone.
Speaker 7: Just remember this.
Speaker 3: You know it's funny. So I listened to it on Spotify,
Speaker 3: which you can now listen to. So you can listen
Speaker 3: to it for free on Spotify if you're a subscriber.
Speaker 3: Carol bought it on a different service. Does it matter
Speaker 3: to you how someone listens to it?
Speaker 7: I get paid, no matter what paid.
Speaker 3: That's all we care about.
Speaker 7: Okay, yeah, that's all I care about my content, which
Speaker 7: is why I'm kind of a media entrepreneur. But the
Speaker 7: bigger picture, I mean all the above that you were
Speaker 7: talking about, whether it's a I interviewed Steve Hoffman this
Speaker 7: morning for a rather long interview which we're not going
Speaker 7: to publish all after the company goes publiics for obvious reasons.
Speaker 7: And you know, I've been following a reddit for nineteen years.
Speaker 7: I just realized I've known him for nineteen years when
Speaker 7: he was a kid. Actually, and so or Steve sam Altman,
Speaker 7: who I recently had on stage in San Francisco, also
Speaker 7: someone I met when he was nineteen years old. But
Speaker 7: you know, I'm everything Ald is new again in a
Speaker 7: weird way. But I'm paying a lot of attention to
Speaker 7: climate change tech, to AI obviously and where it's going
Speaker 7: and the bit there's a lot of machinations around that
Speaker 7: and lots of different permutations. I'm spending a lot of
Speaker 7: time thinking about healthcare tech and the impact of AI
Speaker 7: on that, and obviously the big companies and what's going
Speaker 7: to happen to them in media everybody you know at
Speaker 7: the end of media as we know what kind of
Speaker 7: the story. This has been going on for three decades.
Speaker 3: Now, Okay, so let's get to some of those things.
Speaker 3: I do want to start with with Reddit, and you
Speaker 3: know your conversation with Steve today, not notwithstanding, does does
Speaker 3: Reddit have what it takes to compete with the meta platforms?
Speaker 3: The alphabets? Yeah, the amazons? Now when it comes to
Speaker 3: tour I mean this is how it makes its money.
Speaker 7: Yeah, no, yeahs it does. Okay, I mean I think
Speaker 7: they're just toy but I get so confused when they
Speaker 7: try these things. They're not profitable in a traditional sense,
Speaker 7: but they I think they have cash flow, which I
Speaker 7: think is what you need. They're remind me more of Snapchat,
Speaker 7: but a different service, a very different kind of service.
Speaker 7: I mean, their business is small, five hundred I guess
Speaker 7: five hundred million, users seventy six million daily users. I
Speaker 7: think that's the one they want to push people towards.
Speaker 7: I think it was eight hundred million dollars in advertising.
Speaker 7: It's a drop in the bucket to what the other
Speaker 7: companies are doing. So it's a small social media site.
Speaker 7: Its strength is the decentralization of the content, moderation and
Speaker 7: the decentralization of the service. It makes it a stronger
Speaker 7: and more enjoyable service. A lot more young people are
Speaker 7: on it. I have lots of kids, but my older
Speaker 7: kids who are eighteen, nineteen and twenty one and use
Speaker 7: Reddit all the time and YouTube, that's pretty much it.
Speaker 7: They don't use any of those other sites. That's how
Speaker 7: they consume video because they like the decentralized part of it,
Speaker 7: and they don't like what everyone's dumped in the same
Speaker 7: stew and have to yell at each other and point finders,
Speaker 7: and they're not interested. So I think it's an interesting business.
Speaker 7: I don't know if it's a huge business. They're they're
Speaker 7: starting to try to license data. That was a slightly
Speaker 7: controversial selling Google the data feeds, but that's everyone's going
Speaker 7: to do that, so I'm not sure why we pick
Speaker 7: on them.
Speaker 1: Particularly it's interesting what you say too about your your
Speaker 1: kids and a younger generation. I mean, as Twitter tries
Speaker 1: to find out what it wants to be when it
Speaker 1: don't call it Twitter, Carol.
Speaker 7: What X wants to be, you can call it whenever
Speaker 7: you want. That is true.
Speaker 1: I mean, does that give does that give redded an
Speaker 1: opening in your view? Like I'm trying to figure out
Speaker 1: what's the role.
Speaker 7: Of It's been the same service. Twitter is now become
Speaker 7: a toxic waste dump really pretty much and a place
Speaker 7: where a billionaire works out all his childhood traumas in
Speaker 7: front of us in real time, and and so and
Speaker 7: they're very and his ugly character at this point. But no,
Speaker 7: I think it's different. It's it's it's very it's a
Speaker 7: little more like TikTok if you think about it. It's interests,
Speaker 7: like you're interested in skins or you're interested in video games.
Speaker 7: It's decentralized, and so that's a power. That's a very
Speaker 7: powerful thing to do, to be in this time when
Speaker 7: there where again there's these central feeds of which you
Speaker 7: can't really pick and choose. So in that way, TikTok
Speaker 7: it's more akin to TikTok in that regard where and
Speaker 7: also the advertising is context it's that contextual advertising, not
Speaker 7: the kind that's creepy and gross. So they're gonna make
Speaker 7: less money because they're not as creepy and gross as
Speaker 7: other services. So I like the service. I think it's
Speaker 7: quite good. I don't think it's a huge business. They
Speaker 7: might try commerce, he was talking. I mean, they've been
Speaker 7: talking in their in their filings about commerce, but that's
Speaker 7: a nascent business. But it makes sense to try.
Speaker 1: You mentioned TikTok. We've all been, you know, talking about TikTok,
Speaker 1: as you would guess everybody has over the last week
Speaker 1: or so. Should it be banned in the US? What's
Speaker 1: the future?
Speaker 2: What is?
Speaker 1: And I don't know.
Speaker 7: I have talked about this for years, so it's I'm like, oh, yeah,
Speaker 7: you're talking about this now. I wrote a column in
Speaker 7: The New York Times a couple of years ago saying
Speaker 7: I thought it was one of the best new products
Speaker 7: I had seen in a while, and this is when
Speaker 7: it before it got really popular, but that I use
Speaker 7: it on a burner phone because of the Chinese commedi
Speaker 7: party and the potential for spying, and not just spying,
Speaker 7: because more more propaganda and abuse by by a foreign adversary,
Speaker 7: and so I was trying to call attention to the
Speaker 7: fact that Now, look, I think I really do believe
Speaker 7: the TikTok executives when they say they're not up in
Speaker 7: our grill at the same although there's been instances of
Speaker 7: them being up in the grill of certain things, but
Speaker 7: I don't care at this point because they could be.
Speaker 7: They could be in every Chinese tech company I covered
Speaker 7: has the Chinese Communist Party up in their grill. They're
Speaker 7: just it just has happened. And honestly, why wouldn't they be.
Speaker 7: I mean, that would that makes sense for, you know,
Speaker 7: even to use the platform to their purposes. If we
Speaker 7: had reciprocity in China, I might have a different point
Speaker 7: of view. And by the way, they're not going to
Speaker 7: let us because guess what we do. We propagandaze and
Speaker 7: we'd we'd surveil, I mean obviously. So I'm not sure
Speaker 7: I think it's a national security issue. I've I've seen
Speaker 7: enough proof of it, and I do you know, I
Speaker 7: don't think you necessarily trust the government saying it is.
Speaker 7: But there's no question that we would not allow China
Speaker 7: to buy CNN much smaller, considerably smaller. It's a broadcast network,
Speaker 7: and it should be regulated like a broadcast now, yea.
Speaker 3: And even before tick is media, yeah, even yeah, before
Speaker 3: he bought.
Speaker 7: You know, and then he did his endless damage on
Speaker 7: the American democracy. But he had to be an American
Speaker 7: to do it.
Speaker 3: Okay, we'll get to media more media in just a bit.
Speaker 3: I do want to stick with with TikTok and go
Speaker 3: bigger picture here. You make an interesting point in your
Speaker 3: book at the end of the book, the whole book
Speaker 3: about technology and your role covering technology over the last
Speaker 3: thirty years, about looking away from our phones, looking up
Speaker 3: from our phones, and spending less time on them. And
Speaker 3: it makes me think about the several issues that I
Speaker 3: talk to people that they have about TikTok. One is
Speaker 3: that you know, of course, all the stuff that you
Speaker 3: brought up with national security concerns. But two, it's that
Speaker 3: you know they can't get their teenagers away from it.
Speaker 3: So I'm wondering how you think this stuff should be regulated.
Speaker 7: Well, you know, I've talked about age gating quite a bit,
Speaker 7: like we age gate a lot of things. Having having
Speaker 7: so many kids, I spend a lot of time thinking
Speaker 7: about it, but my kids weren't particularly I think there's
Speaker 7: a I think the people that really got a problem
Speaker 7: with they are thirty to fifty. They're the crazy ones.
Speaker 7: In the middle, they're the addicted ones. Younger people twenty
Speaker 7: five and under, maybe twenty two and under to you know,
Speaker 7: eighteen to twenty really have it together. I think in
Speaker 7: a lot of ways they have a real sense of
Speaker 7: how to use it because they've grown up with it.
Speaker 7: And it kind of reminded me when I was a
Speaker 7: kid where everybody's I watched a lot of television and
Speaker 7: they said, oh, it's you're going to become an idiot.
Speaker 7: It's the boob toobe. That's what they called it. That's right,
Speaker 7: and they did. And you know, like my dad helt
Speaker 7: your brain. Yeah, I don't watch the boob tube. And
Speaker 7: you know, was that time wasted? I don't know. I
Speaker 7: don't know. Video games didn't turn out to be as bad.
Speaker 7: You know, they're addictive. I think this this stuff is
Speaker 7: very addictive in a different way from either of those
Speaker 7: two things. And I think it isolates and other things.
Speaker 7: So we need to understand what's happening by getting data
Speaker 7: from these companies, which they don't want to share unless
Speaker 7: whistleable or gives it to us. But I think the
Speaker 7: I think they remind me a little bit of cigarettes,
Speaker 7: So I think there should be warnings. I think there
Speaker 7: should be age gating. I think it has elements of cigaret.
Speaker 7: If you took cigarettes and television and mashed them together
Speaker 7: and then you couldn't, then you had it strapped on
Speaker 7: your face, you know the television, that would be what
Speaker 7: it is.
Speaker 1: Well, you could almost see the commercial, right giving a
Speaker 1: kid a cigarette, right or like you see it, like
Speaker 1: you know, but would you you know? Then you give
Speaker 1: them a phone?
Speaker 7: Right, we see it. It's it's it's media on steroids,
Speaker 7: and so we have to think about it. And of
Speaker 7: course we're addicted ourselves parents, so it's not the whole.
Speaker 7: And more importantly, you need to have it to work.
Speaker 7: You can't not have it, so it's it's it's a
Speaker 7: cigarette you cannot not smoke, right, So, and.
Speaker 1: Kids increasingly need it for school, Like you can't even
Speaker 1: pull it away because so much it's been done. Caro,
Speaker 1: Let's get to the book The Burn. And we were
Speaker 1: thinking Tim and I were like, how do we want
Speaker 1: to start with our how how do we want to
Speaker 1: start with there. If you were interviewing yourself, sitting in
Speaker 1: your red steelcase chairs, what would be your first question
Speaker 1: to yourself? And you sometimes come out tough first.
Speaker 7: Yes I do. I always, not always. Sometimes I'm a charmer,
Speaker 7: that's true. I think, why why do you still love it?
Speaker 7: Why do you still well? No, if you want to
Speaker 7: be tough to me? Are you obsessed with Elon Musk?
Speaker 1: Are you so? Are you?
Speaker 7: He's obsessed with No, he's obsessed with me. He's the
Speaker 7: one that listen. Did you see the blurbs on the blurb?
Speaker 2: We did?
Speaker 1: Yes, we did?
Speaker 7: Yeah, Well I don't know.
Speaker 9: Them.
Speaker 1: We can't say them all, which is why everybody knows
Speaker 1: to read the book.
Speaker 7: I know what I did is I replaced blurbs with
Speaker 7: nasty things tech boys say about me, and I use
Speaker 7: them for marketing, because if they they want to straight
Speaker 7: for woman, right, I'll use it for selling my book.
Speaker 7: That sounds good to me. But you know they're trying
Speaker 7: to as if I'm going to be some delicate flower
Speaker 7: and melt at their insults.
Speaker 1: Why don't well, you know what's interesting about Elon and
Speaker 1: your book? And you like make these points of that.
Speaker 1: There's parts of him that how can you not be
Speaker 1: kind of a little bit enamored where he's, you know,
Speaker 1: trying to do a solar trying to do work on
Speaker 1: really serious problems. Right, it's not like I said, how
Speaker 1: do I download music again? Like kind of thing and
Speaker 1: you do your p twop ratio, which you can't say.
Speaker 1: People have to read the book to understand what it is.
Speaker 1: This is a clean show. But so how do you
Speaker 1: cross like these people who think differently and yet there
Speaker 1: are some real body concerns.
Speaker 7: Well, he's he's a case study and someone who's lost,
Speaker 7: you know, lost the narrative or other's significantly.
Speaker 1: Why do we lose it? Do you think?
Speaker 7: I don't know. I'm not his mama. I think he uh.
Speaker 7: I think COVID played a part in it. I think
Speaker 7: these these he's a perfect example of that age range
Speaker 7: sort of. I guess it's thirty to sixties, a little
Speaker 7: older than that, which makes you wonder how how he
Speaker 7: loves the boob jokes at that age, at fifty two
Speaker 7: or fifty three, Who he is? I think that I
Speaker 7: think that he was doing things that were amazing. I
Speaker 7: have to say the cars, and he didn't invent Tesla,
Speaker 7: but He certainly is a business genius, and same thing
Speaker 7: with SpaceX business genius. He's taken the challenge of other
Speaker 7: people and himself and made it into really interesting businesses.
Speaker 7: Even the tunnel to Game one is cooled in away.
Speaker 7: Hyperloop is a great idea. So he had big ideas.
Speaker 7: And I'll tell you that's what attracted me to him
Speaker 7: because everyone else was doing, you know, a digital dry
Speaker 7: cleaning service that digital is just they was so god exhausting.
Speaker 1: Should we should we continue to take him seriously?
Speaker 7: I wish we could, because but he's sort of given
Speaker 7: into he's indulged himself in his manias, and so every
Speaker 7: day he's tweeting hateful things, and not every day he's
Speaker 7: doing every minute he's doing that. He's not inventing the future.
Speaker 7: You know, he's inventing. He's he's reinventing hate. Just what
Speaker 7: he's doing grievance. He's reinventing grievance.
Speaker 3: At the same time we are seeing Starship reach new highs.
Speaker 7: Sure yeah, well sure, but he's getting to you know,
Speaker 7: he's getting to experiment on the US dime. That's he's
Speaker 7: having US contracts, which is thank you Federal government. Yes,
Speaker 7: that's right, he is doing that. But there's other people there.
Speaker 7: I think we attribute because we have an idolatry of innovators.
Speaker 7: We think he's the only one, like he's a Willy
Speaker 7: Wonka in there making all the candies. Not you know,
Speaker 7: And so I have a great regard for Gwen Shopwell name.
Speaker 7: You don't hear very often, right, the president SpaceX, she
Speaker 7: runs SpaceX. Let's be clear. I mean she will stand
Speaker 7: aside for him, but from when I understand, she's the
Speaker 7: driving force of that company and Tesla the same way.
Speaker 7: There's a lot of executives there by the way, they're
Speaker 7: under a great deal of stress now given all the
Speaker 7: competition and the fall off and computer you know, the
Speaker 7: fall off and consumer sentiment in general and in particular
Speaker 7: with him.
Speaker 3: Hey care, I do want to one more on Elon
Speaker 3: and then we're gonna move on. Sure, hopefully.
Speaker 7: You know it's the character of the moments. He really is.
Speaker 3: And you know you've known him for years, and you
Speaker 3: write about in the book that you've you knew him
Speaker 3: in the early years that the PayPal when he had
Speaker 3: when he.
Speaker 7: Had his nut PayPal, he wasn't PayPal, He didn't create PayPal.
Speaker 7: He created x Outcome right right, people don't know says
Speaker 7: he founded PayPal. He did not found PayPal.
Speaker 3: Obviously evolved since then, and I'm wondering.
Speaker 7: He had a company called god he finished. He had
Speaker 7: a company called zip too that was a Yellow Pages
Speaker 7: online thing. Then he went to x dot com and
Speaker 7: then he started doing the more interesting things.
Speaker 3: So he evolved obviously since then, and he's evolved to
Speaker 3: where he is now. Are you optimistic that this evolution
Speaker 3: could continue and you could see a different Elon Musk
Speaker 3: in a few years.
Speaker 7: No, I don't. I don't. I think he's well passed
Speaker 7: the cell by day at this point. You know, he's devolved,
Speaker 7: is what's happened. He was really interesting. It's interesting. I
Speaker 7: get a lot of a flak for liking, and then
Speaker 7: it was a lot to like. There's a lot to like,
Speaker 7: especially compared to other people. And I know he had
Speaker 7: his problems. I'm aware. We wrote about them extensively on
Speaker 7: our site. The issues around sexual harassment and racial issues
Speaker 7: at the factories. Again, it was a problem throughout siliconbal
Speaker 7: We also wrote about Uber. But no, I think he's
Speaker 7: just in love with himself and his fans, and he's
Speaker 7: got people slavishly licking him up and down all day.
Speaker 7: And I think rich people, the deleterious effects of wealth
Speaker 7: on your psyche in this case, and also the radicalization
Speaker 7: of online right wing conspiracy swamps has really gotten a
Speaker 7: hold of them. I don't know how he's going to
Speaker 7: get out.
Speaker 1: Hey, hey, carop. Before we go any further into the book,
Speaker 1: you know, in the book you talk a lot about
Speaker 1: obviously the tech industry, the folks you've reported on talked to,
Speaker 1: but you also talk about your dad and his passing
Speaker 1: and you were very young, how that shaped you. You
Speaker 1: also talk about your conversations with Steve Jobs. A lot
Speaker 1: of this just kind of resonated with me and really
Speaker 1: struck me, just you know, the idea of facing mortality
Speaker 1: in general, how that both of those obviously not apples
Speaker 1: to apples, but how that shaped you as an individual
Speaker 1: and your professional life and maybe how you approach things
Speaker 1: and even report on things.
Speaker 7: Very much. I know this is a real selling point,
Speaker 7: but the book is about death and about life, you know,
Speaker 7: creation and destruction, which is what the tech industry is about,
Speaker 7: that things go, come and go, and my own life
Speaker 7: I have that resident with my dad dying at a
Speaker 7: young age, my wonderful father dying at a young age,
Speaker 7: and the impact had on me, which gave me an
Speaker 7: early sense of mortality that stuck with me, which meant
Speaker 7: I had no time to waste. I must get things done,
Speaker 7: I must change and grow and shift, because I didn't
Speaker 7: have that kind of time. And I think Steve Jobs
Speaker 7: had a similar resentiment in general and then in particular
Speaker 7: when he got sick. Most of the things he created
Speaker 7: that we think of him as famous world though it
Speaker 7: goes he had a long career, was in that last
Speaker 7: few years he lived, you know, the iPhone. Just a
Speaker 7: lot of stuff got created when he was when his
Speaker 7: mortality was weighing on him. He gave a great speech
Speaker 7: at Stanford about that. So I think we really did,
Speaker 7: we did spark on that issue of times a wasting.
Speaker 7: Let's get going.
Speaker 3: Did you know you spend a lot of time in
Speaker 3: the book talking about Steve Jobs, and he's not one
Speaker 3: of the characters that you write about him in a
Speaker 3: in a way that I like him, really liked him.
Speaker 7: I did like very clear in the he would think
Speaker 7: difficult guy. Difficult guy by the way, often only on
Speaker 7: product that I ever saw him be difficult, but he
Speaker 7: had he had his words. There's no question.
Speaker 3: What would you think about where we are today politically?
Speaker 7: Oh, you know, he was much he was much more liberal,
Speaker 7: but in the traditional sense. I think he always was
Speaker 7: trying to reach out. He spent a lot of time
Speaker 7: talking to Rupert Murdoch trying to get him to stop
Speaker 7: being so Rupert murdocky. You know, he reached He always
Speaker 7: was trying to find I wouldn't say he's a peaceful person,
Speaker 7: because that's clearly not the case, but I do think
Speaker 7: he was. He was a seeker. As you know, he
Speaker 7: was widely read. He one of the things I liked
Speaker 7: about him was read widely, and he had other experiences
Speaker 7: that had nothing to do with tech. And he had
Speaker 7: a a sense of design and a very big respect
Speaker 7: for privacy, that's for sure, you know. And he also
Speaker 7: could see around corners, like he talked about podcasting with
Speaker 7: me very first of all. He talked about privacy with
Speaker 7: me very early. Talked about the problems of social media
Speaker 7: being being a really toxic business model early on, and
Speaker 7: it wasn't in his self interest. I think he thought that.
Speaker 7: I think he would have hated much of some of
Speaker 7: what's going on some of it. He would have.
Speaker 1: Liked stories that didn't make the book were they're a
Speaker 1: lot lots.
Speaker 7: It's largely if everyone's asked me that I have a lot,
Speaker 7: and they as I'm on this book tour, I'm like, oh,
Speaker 7: remember that, or someone will write me, do you remember
Speaker 7: when I was like, yeah, I don't know. I don't know.
Speaker 7: I just you know, I feel like if I've forgotten them,
Speaker 7: they weren't important, right, or you know, I don't have
Speaker 7: a lot about Yahoo. I wrote a lot about Yaho's
Speaker 7: ups and downs over the years, and I just didn't
Speaker 7: think it mattered at this point, Like I put in
Speaker 7: the amount that I thought mattered certain companies. There was
Speaker 7: a company someone mentioned the other day and I wrote
Speaker 7: a lot about it, and I was like, oh, yeah,
Speaker 7: like that, Like I run thousands and thousands of stories
Speaker 7: and interviewing thousands of people, and so you know, I
Speaker 7: don't know, I just know it's gone.
Speaker 1: It's sorry, no, that's okay. But like we talked about Elon,
Speaker 1: Steve Jobs, Mark Zuckerberg's in the book, Sheryl Sandberg, Dave Goldberg,
Speaker 1: Bill Gates, readA Hoff, and everybody who's anyone in the
Speaker 1: tech industry over the last couple of decades and then
Speaker 1: some If you had one person that you could just
Speaker 1: sit down and just go everywhere and anywhere, alive or not,
Speaker 1: who would it be?
Speaker 7: It still be Steve. He was the most interesting interview
Speaker 7: I did. There's a lot of interesting ones I really enjoy.
Speaker 7: You know, it's deep pends it's not you Nadella. I
Speaker 7: find really interesting because he's had a very interesting life
Speaker 7: being an immigrant. He has family challenges as two of
Speaker 7: his kids have learning issues and quite severely. You know,
Speaker 7: he's a person I think. I'm trying to think if
Speaker 7: I always like talking to Barry Diller. He's just fantastic,
Speaker 7: and he's a summa change the right shifts. Yeah, not
Speaker 7: just that he's so smart. A lot of stuff he said,
Speaker 7: when I go back and look at it is spot on.
Speaker 7: I just did an interview with him about copyright and
Speaker 7: AI and he was the first of that, you know,
Speaker 7: understanding that. I just think he's funny. I just think
Speaker 7: he's smart. I think he thinks about a lot of things.
Speaker 7: I always enjoyed talking to him. I'm trying to think
Speaker 7: of who in tech, you know, I like talking to
Speaker 7: Sam Altman He's got a very quick mind, and he
Speaker 7: always did and it's really developed. I like anyone who
Speaker 7: develop I have to say someone living Mark Cuban, he's
Speaker 7: a gas. He's interested change.
Speaker 1: I'm a little obsessed with Yeah.
Speaker 7: Beyond that, he's a really thoughtful person and smart.
Speaker 9: He was.
Speaker 7: He did a whole thing on DEI on Twitter and
Speaker 7: I literally was like, godspeed, Mark, Like these people are
Speaker 7: just going to call you names, including Alamos. You's like
Speaker 7: you're a moron, You're a reader. He's very thoughtful and
Speaker 7: has has progressed.
Speaker 3: Kara, I do want to We only have a couple
Speaker 3: of minutes left and I wanted to get a few
Speaker 3: more questions in. And you didn't talk at all about
Speaker 3: this in the book, but politics in San Francisco. I
Speaker 3: know in the past you toyed with the idea of
Speaker 3: running for mayor of San Francisco. You were very serious
Speaker 3: about it at a certain point. Given what's going on
Speaker 3: in San Francisco now and your prominence, your love for
Speaker 3: the city, would you ever consider that again?
Speaker 7: No, I got to have two kids during COVID instead
Speaker 7: two more kids, So no, I don't have the time
Speaker 7: to do that. I have two Toddler's you know going
Speaker 7: on in San Francisco. Actually san Francisco solving the problem.
Speaker 7: Other cities are now suffering from what San Francisco initially.
Speaker 7: San Francisco is always first, good or bad, right, and
Speaker 7: so they're doing some innovative things. They're trying to change things.
Speaker 7: Most cities are suffering because of COVID and the fall
Speaker 7: off and commercial real estate and the changes in work,
Speaker 7: and San Francisco got to hit first. And I think
Speaker 7: it's look, guess what's happening in San Francisco right now?
Speaker 7: All the AI companies are there now, all the important
Speaker 7: ail done there. Oh yeah they are. Oh the guys
Speaker 7: who just kicked it in the teeth and then ran off,
Speaker 7: they're back. Because it's the best place on earth for
Speaker 7: innovation still. And so it's the most beautiful place. And
Speaker 7: we have our problems. We're not running away from it,
Speaker 7: but we also have the ben It is a magical
Speaker 7: place and it always has been, you know, through the
Speaker 7: Summer of Love to the you know, the gold Rush,
Speaker 7: to everything else. It's a physically beautiful place. It's always
Speaker 7: has ideas and I do believe in analog in some
Speaker 7: place I have to say in history. It will go
Speaker 7: down as one of the great important cities of humanity.
Speaker 1: All Right, we just have thirty seconds.
Speaker 7: I'm running for.
Speaker 1: Mayor now, no, I come on, we just want to headline.
Speaker 1: You know that. Hey thirty now, I'm sorry, No thirty seconds.
Speaker 1: How would you advise a Kara Swisher just beginning her
Speaker 1: career today because media has changed dramatically very quickly, and
Speaker 1: forgive me for not giving you more time.
Speaker 7: That's okay, be exactly who you were and are. That's
Speaker 7: what I would say. You're pretty good.
Speaker 1: Amen's sister, Amen, listen, good luck. We really enjoyed the read,
Speaker 1: and thank you so much for giving us such a
Speaker 1: big chunk of time. So appreciate it. Karra Swisher, everybody,
Speaker 1: thank you. Her new book is burn Book, a Tech
Speaker 1: Love Story. Got to say, there's so many great tidbits
Speaker 1: about being in the green room with individuals, being on
Speaker 1: stage with Mark Zuckerberg and others, and just getting into
Speaker 1: a lot of the topics that we you and I
Speaker 1: talk about a lot day to day.
Speaker 3: Also just interesting on the business side, hearing how the
Speaker 3: audiobook is outselling the print book.
Speaker 1: I love this podcast effect Walk the Dogs.
Speaker 2: You're listening to the Bloomberg Business Week Podcast. Listen live
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Speaker 7: Funny Ahead in.
Speaker 1: Our second hour of the weekend edition of Bloomberg Business Week,
Speaker 1: including building robots. Yeah, kind of easiest for me, but
Speaker 1: they're out there. I gotta say, what is this? Maybe
Speaker 1: be tough for building a software brain for robots? Not
Speaker 1: so easy. One company they're working to do just that.
Speaker 1: And it's CEO giving his first interview to our Ashley Vance, plus.
Speaker 3: The startup airline that's luring flyers away. Also the London
Speaker 3: trader turned founder of Natterjack Whiskey and going for the
Speaker 3: godshot of espresso at home?
Speaker 1: Did you even know what that is?
Speaker 3: So I'm guilty as charged with being like this article
Speaker 3: spoke to me because I have some of this equipment
Speaker 3: at home. I've never heard of the godshot.
Speaker 1: I didn't either, anyway, we were all a kind of googling. Anyway,
Speaker 1: you will hear more about it later on. All right,
Speaker 1: First up, this hour. We want to get to a
Speaker 1: story that's about the AI craze, but with a bit
Speaker 1: of a twist. Turns out, yeah, making robots smart well
Speaker 1: not so easy. Enter Physical Intelligence, giving its first public
Speaker 1: interview since founding the company, giving that interview to our
Speaker 1: Ashley Vance, Bloomberg Business Week Features writer.
Speaker 3: Ashley is also the author of Elon Musk, Tesla, SpaceX,
Speaker 3: and the Quest for a Fantastic Future and When the
Speaker 3: Heavens went on Sale, the Misfits and Geniuses racing to
Speaker 3: put space within reach. He's our go to for a
Speaker 3: peek into our world's future.
Speaker 10: Every science fiction world I think we've ever encountered usually
Speaker 10: has very smart computers and very smart androids and other
Speaker 10: robots walking around. But our world has been different. These
Speaker 10: large language models that have become so famous from open
Speaker 10: ai and Google and others, you know, they're stuck on
Speaker 10: our computers and our robots and factories and even in
Speaker 10: the home have lagged behind this new, more general purpose
Speaker 10: form of intelligence.
Speaker 1: All right, So then take us to Physical Intelligence, the
Speaker 1: company that you write about and the CEO that you
Speaker 1: got to talk to the first interview since these guys
Speaker 1: were founded Telsa, who they are and what they're up to,
Speaker 1: because they're trying to change this.
Speaker 10: Yeah, I mean it's it's it's a collection of robotics
Speaker 10: and AI experts. A bunch of them come from Google.
Speaker 10: Google's had this this robotics team for a long time.
Speaker 10: And then and then there's some professors and some entrepreneurs
Speaker 10: in this group. And the big problem here is that
Speaker 10: the AI that were used to these chatbots, they get
Speaker 10: fed with all of the billions and trillions of words
Speaker 10: on the Internet and books we've written, and so the
Speaker 10: quest is how do you feed robots enough data to
Speaker 10: train them on these these AI models? And and this
Speaker 10: group of researchers they just think this time has come
Speaker 10: where we can gather enough data in the right way
Speaker 10: to make a general purpose robotics brain. So not not
Speaker 10: software for one robot, but a type of operating system
Speaker 10: that you could apply to any machine and it would
Speaker 10: have this this base level of intelligence to perform tasks.
Speaker 3: How do you teach Ashley, a robot to tie a shoe,
Speaker 3: for example, to do a basic task? Yeah, this part's cool.
Speaker 10: So you know the way this has been done for
Speaker 10: the last like five or ten years is you buy
Speaker 10: a bunch of robotic arms, or you build them and
Speaker 10: you have them tie a shoe about a million or
Speaker 10: ten million times until that you tell it what it's
Speaker 10: doing a bad job and what it's doing a good job,
Speaker 10: and eventually this little robot handk ti shoe. What these
Speaker 10: guys are talking about is this new era where you
Speaker 10: do actually take the language AI models and infuse it
Speaker 10: into these physical models. And so now already today this
Speaker 10: is happening where you can tell one of these robots
Speaker 10: tie a shoe. And because of these language models, it
Speaker 10: probably and you know, all of our image and video models,
Speaker 10: it has a pretty good idea of what the concept
Speaker 10: of a shoe is, what the shoelaces are. There's probably
Speaker 10: a lot of videos on the Internet of people teaching
Speaker 10: kids to tie shoes, and so it sort of comes
Speaker 10: in with this knowledge. Same sort of thing. If you said,
Speaker 10: you know, pick the coke can off the table, it
Speaker 10: will know what a coke can is and be able
Speaker 10: to separate that object from other objects. So they're trying
Speaker 10: to piggyback on this base level of general intelligence and
Speaker 10: then build the mechanical parts into it.
Speaker 3: Actually, when this processing is happening in real time, is
Speaker 3: it happening separate from the cloud. That is, is the
Speaker 3: actual brain of something with physical intelligence, like is the
Speaker 3: is the vision for that actual brain to be physically
Speaker 3: inside the robot versus that actually that processing happening off
Speaker 3: site in the cloud, independent from you know, the physical thing.
Speaker 10: Yeah, like to to a degree. All these models have
Speaker 10: to get trained in the cloud because they require tens
Speaker 10: of thousands of these these graphics chips to do the training.
Speaker 10: But we're seeing more and more even with like a
Speaker 10: language model. You know, you can ask chat GPT questions
Speaker 10: on your cell phone and have them answered. So the
Speaker 10: part where you've trained the model happens off in the
Speaker 10: cloud and these huge data centers. But but the robots
Speaker 10: will have this kind of local intelligence.
Speaker 1: Just like just like we do, you know, talking to
Speaker 1: chech GPT to create a poem or something. Is that
Speaker 1: easier than actually, you know, getting the next generation AI
Speaker 1: to teach someone to physically do something? And I guess
Speaker 1: what's the data sets on that? Are there less data
Speaker 1: sets on that to actually teach these physical capabilities?
Speaker 7: Absolutely?
Speaker 10: Yeah, I don't want to make it sound like this
Speaker 10: is a done deal.
Speaker 1: It's sort of I just want someone at home to
Speaker 1: do my laundry other than me. That's what I'm talking about, Ashley.
Speaker 10: We're we're got close, We're got clothes. I mean, it's
Speaker 10: funny because robotics, I think we've had these sort of
Speaker 10: like false hopes so many times where it seems like
Speaker 10: they're about to do all these incredible things and they
Speaker 10: never seem to do it. And the challenges here are real.
Speaker 10: I mean, this gathering of the data is still a problem.
Speaker 10: Physical Intelligence's plan is to most of the companies so
Speaker 10: far they've built their own robot and it's a single thing,
Speaker 10: and they train that single thing really well. Physical Intelligence
Speaker 10: wants to buy robots from everybody, smart machines from everybody,
Speaker 10: train this general purpose data set. So there's going to
Speaker 10: buy them, run their AI software through it, and gather
Speaker 10: this data. But then they also think we are because
Speaker 10: of the advances that have happened in AI the last
Speaker 10: four years, that we're at a new spot where a
Speaker 10: new era of robotics is possible. But you know, all
Speaker 10: of this is theoretical. They're not the only company trying
Speaker 10: to do this. It's a bit of a race now
Speaker 10: that has just begun this year, and you know, we'll
Speaker 10: see if somebody can actually solve this problem.
Speaker 3: Our go to for a peek into the future of
Speaker 3: this world. Ashley Advanceloomberg Business Week Features writer actually also
Speaker 3: the author of Elon Musk, Tesla, SpaceX and the Quest
Speaker 3: for a Fantastic Future And when the Heavens went on sale,
Speaker 3: the misfits and geniuses racing to put space within reach.
Speaker 1: All right, everybody, as we wait for robots to possibly
Speaker 1: possibly disrupt the airline industry, I mean, computers already doing
Speaker 1: a lot of the work when it comes to flying,
Speaker 1: to be fair, But there is one airline upstart that's
Speaker 1: already shaking things up. It is JSX, a Dallas based
Speaker 1: airline beloved by work travelers for offering convenience, such as
Speaker 1: a chartered plane at near business class prices.
Speaker 3: Instead of flying from packed hubs, it flies from sparse
Speaker 3: private hangars in exchange for the amenities of a big airport.
Speaker 3: Passengers get convenience in lieu of long TSA baggage screening lines,
Speaker 3: they get their bags swabbed for explosives, and they walk
Speaker 3: through a weapons detector.
Speaker 1: But JASX is only able to exist thanks to what
Speaker 1: some airline rivals say is an FAA loophole. The founder
Speaker 1: and CEO counters that they're just annoyed he's treading on
Speaker 1: their turf. To check it out, we caught up with
Speaker 1: Alex Wilcox. He's founder and CEO of JSX, along with
Speaker 1: Mary Schlangenstein. She is Bloomberg News US airlines reporter who
Speaker 1: recently wrote about the airline that's drawn a cult following.
Speaker 9: They put together two different types of certified air carriers
Speaker 9: and they were able to mix, you know, a public
Speaker 9: charter with what becomes a private charter with two different
Speaker 9: types of airlines and airline certifications, and basically it lets
Speaker 9: them fly in aircraft with more seats, but they don't
Speaker 9: have to have the normal TSA scanning, they don't have
Speaker 9: to have pilots that are younger than sixty five, They
Speaker 9: can have pilots with less flight experience, and so taking
Speaker 9: advantage of those rules is what's raised some objections to
Speaker 9: JSX and other carriers like it, but it's also allowed
Speaker 9: them to operate.
Speaker 1: Alex, come on in on this because regulators, you know,
Speaker 1: knew what you were doing. They signed off. What do
Speaker 1: you say to some of these these critics who talk
Speaker 1: about you maybe taking advantage of a loophole.
Speaker 8: Well, I mean, I guess one person's loophole is another
Speaker 8: person's law, and it is just law. It's forty to
Speaker 8: forty five year old established law. It's law that even
Speaker 8: American Airlines does you know, it operates under.
Speaker 2: And they're they're the.
Speaker 8: Biggest complainer of the group here. American Airlines has a
Speaker 8: co chair with Contour, which is another Part one thirty
Speaker 8: five air carrier that operates exactly under the exact same rules,
Speaker 8: with the exact same pile experience requirements. They also sell
Speaker 8: tickets as in American Airlines, but you actually wind up
Speaker 8: flying on Contour or Envoy or sky West or japan
Speaker 8: Airlines or Goal in Brazil, which only has a two
Speaker 8: hundred fifty hour captain you know rating requirement. So this
Speaker 8: is the pot calling the kettle black. They just don't
Speaker 8: like us, and every argument they make against us is
Speaker 8: hypocritical when it comes to operations, and a lot of
Speaker 8: the people that are commenting about safety and security really
Speaker 8: are not qualified to do so. So we're very proud
Speaker 8: of our achievements, are near decade of flawless operations, and
Speaker 8: we see this purely as competitive competitive anxiety.
Speaker 1: Alex having said that your success. Sometimes success brings a
Speaker 1: lot more eye balls, including those of regulators. Are regulators
Speaker 1: coming out to you and saying, well, wait a minute,
Speaker 1: maybe we need to rethink this.
Speaker 8: No, I mean there's been because of the efforts of
Speaker 8: two Dallas based competitors and their trade unions. They've been
Speaker 8: begging the regulators to pay attention to us. They went
Speaker 8: through the DOT, they got turned away. They went to
Speaker 8: the FAA, eighty thousand of our customers came out in
Speaker 8: strong defense of us, turned them away. They went to
Speaker 8: the US Congress in connection with the current FAA Reauthorization Act,
Speaker 8: and they tried to get us outlawed under the reauthorization
Speaker 8: and politicians from both sides of the aisle rallied to
Speaker 8: our support.
Speaker 7: Again.
Speaker 8: Now they're trying to TSA. They're trying to do with
Speaker 8: sub Rosa, with the TSA, with all kinds of baseless
Speaker 8: threats about security and terrorism and very irresponsible things that frankly,
Speaker 8: as an industry, we've always agreed we would never compete
Speaker 8: on safety and security matters. And so Southwest and excuse me,
Speaker 8: Southwest and American airlines have crossed that line.
Speaker 7: And that is a.
Speaker 8: Dangerous line of because it actually makes the entire industry
Speaker 8: less safe because it makes people unwilling to talk about
Speaker 8: safety and security in an open way, which is the
Speaker 8: way we make the system better.
Speaker 9: Alex I wanted to ask you if you've heard anything
Speaker 9: from the FAA, if you've gotten any feedback from them
Speaker 9: in terms of the timing of their decision, and then
Speaker 9: also if you've heard anything from the TSA, which was
Speaker 9: expected to issue some proposed recommendations fairly soon.
Speaker 8: Thanks Mary. Now, the FAA has not communicated they're going
Speaker 8: to be taking any action. They've got to read through
Speaker 8: those seventy thousand comments first and obviously respond to the
Speaker 8: concerns rates and those things, and then if they're going
Speaker 8: to make a rule change, they're going to have to
Speaker 8: go through the regular administrative process to do so, so
Speaker 8: it'll be an NPRM, a noticeable posed rule making that
Speaker 8: actually addresses whatever rule they may or may not make.
Speaker 8: We believe that if they are are going to be
Speaker 8: new rules, they will actually be modeled upon how we
Speaker 8: operate today. We go well above and beyond many of
Speaker 8: the rules that do apply to us already. In some cases,
Speaker 8: we go above and beyond the rules that apply to
Speaker 8: the major airlines as well. With respect to the TSA,
Speaker 8: they will respond to real threats from real bad guys
Speaker 8: and not from retired airline executives who are taking potshots.
Speaker 3: That's Alex Wilcox, founder and CEO of JSX, and Mary Schlangenstein,
Speaker 3: Bloomberg News US Airlines reporter.
Speaker 1: You're listening to Bloomberg Business Week. Still to come a
Speaker 1: London trader turned whiskey entrepreneur.
Speaker 3: Yeah, I was actually out on this day. You are
Speaker 3: you missed a lot.
Speaker 1: I know it's two different kinds of whiskey resampled.
Speaker 3: Well, okay, we'll make up for it. The founder of
Speaker 3: Natterjack Whiskey coming up next. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple car Play and then Broun Auto with a
Speaker 2: Bloomberg Business act or watch us live on YouTube.
Speaker 1: Safe to say there was a fair amount of whiskey
Speaker 1: recently consumed during last weekend Saint Patrick's Day celebrations. Bloomberg
Speaker 1: News noting late last year that the global market for
Speaker 1: whiskeys is valued at approximately one hundred and forty million dollars.
Speaker 3: Carol You and Bloomberg Wall Street reporter Shanali Basik got
Speaker 3: an inside, a look and a few SIPs. It was Friday,
Speaker 3: after all. You caught up with Aiden Meghan, founder of
Speaker 3: natter Jack Whiskey, who stopped by the studio. You started
Speaker 3: by asking how a London trader got into the whiskey business.
Speaker 11: That's a super question, right, So back in kind of
Speaker 11: twenty sixteen, I wanted I.
Speaker 6: Was a great career trading. I loved it.
Speaker 11: I had an amazing team and I learned so much.
Speaker 11: But it's kind of abstract, right, So you're you're looking
Speaker 11: at a screen. You don't actually hold what you're creating.
Speaker 11: You're creating wealth or you know, and you're working really hard.
Speaker 6: For something you never actually hold it.
Speaker 11: And I was like, I wanted to go away, and
Speaker 11: I wanted to build something that I could hold, right,
Speaker 11: And that was just a very base level and I
Speaker 11: was I figured, Gie.
Speaker 1: But why whiskey you could hold pair of shoes? You
Speaker 1: could hold absolutely well?
Speaker 6: Do you know? Interestingly?
Speaker 11: Right, my granddad owned bars Jacklashing years ago, right, and
Speaker 11: I went to see him when I was working. I
Speaker 11: always worked in restaurants, and that was always my favorite job.
Speaker 11: Waiting tables was amazing. Being a bartender amazing. And I
Speaker 11: said to him, and I'm thinking about opening a bar,
Speaker 11: and he was in his eighties. He's like, don't open
Speaker 11: a bar. Sell the beer to the bar, and I
Speaker 11: was like, okay. So when I was trading, I was like, okay,
Speaker 11: Well my background was hospitality before trading, so what would
Speaker 11: I do. So I've looked at all the different like
Speaker 11: maybe a winery would have been amazing, but I mean,
Speaker 11: I I'm Irish. Who's going to be like, like, what
Speaker 11: do I know about running a winery?
Speaker 7: Right?
Speaker 11: So figured, well, exactly, But I figured Irish whiskey had
Speaker 11: missed me. I had a favorite bourbon, but he didn't
Speaker 11: have a favorite Irish whiskey. So it's like, if it
Speaker 11: missed me, maybe it's missed a load of people. So
Speaker 11: I went off on this kind of mad year and
Speaker 11: a half journey learning how to make whiskey.
Speaker 1: And and you actually learned how to make it?
Speaker 11: Oh yeah, yeah, I went and I went and worked
Speaker 11: in Breckenridge in Colorado with Jordan Vya, who's still our
Speaker 11: master distiller because he's much better than me.
Speaker 6: So but I went and learned.
Speaker 11: I stayed with him for a month working double shifts
Speaker 11: at the distillery and kind of built a relationship there,
Speaker 11: and then built a team and came up with a
Speaker 11: brand and we launched in twenty nineteen.
Speaker 1: How hard of a learning curve was it for you?
Speaker 6: It's interesting, it was. The terminology was the hardest.
Speaker 2: Right.
Speaker 6: So when you when you go.
Speaker 11: And you go into a distillery, people talk about different things.
Speaker 11: And the one thing I could never work out was
Speaker 11: when people said they pitch the yeast right.
Speaker 6: I couldn't work it out. It's is it a temperature thing?
Speaker 11: Is it the is it the it means throw the
Speaker 11: east Okay, that's it.
Speaker 6: Okays American term you pitch the east right.
Speaker 1: It sounds easy, but it's not.
Speaker 11: It actually is really easy. You just need to know
Speaker 11: the amount. So there's a huge amount of science behind it.
Speaker 11: But I learned the kind of the art of it
Speaker 11: as well, and the art of coming up with the
Speaker 11: flavor profiles and really working on what flavor profiles I
Speaker 11: wanted to create.
Speaker 1: Well, let's go there, because, like you, I like bourbon
Speaker 1: versus whiskey. But so tell me, like, how did you
Speaker 1: figure out where you wanted to go in terms of
Speaker 1: the taste profile.
Speaker 11: So Jordan and I would sit down with samples of
Speaker 11: what we were going to be able to blend with
Speaker 11: and we would he you know, he, we just talk
Speaker 11: about it. It's very olfactory, right, So it's what what
Speaker 11: is it you want more of? Do you want more
Speaker 11: mid palate sweetness? Do you want more length? And all
Speaker 11: of these things, And we we worked the blend. I'd
Speaker 11: fly over with the samples because I was in Ireland
Speaker 11: at the time it fly over. I'd meet Jordan largely
Speaker 11: in New York and we'd work on it that way,
Speaker 11: and eventually we come up with what we what we
Speaker 11: what we wanted as flavor profile from the base spirit.
Speaker 11: Jordan's genius was He's like, we need to put this
Speaker 11: into virgin American oak and we need to really ramp
Speaker 11: up the jar. So what we did was with Natterjack
Speaker 11: blend one which will taste in a second is we
Speaker 11: put it into expurban barrels for three and a half years,
Speaker 11: which basically barrel is it it is That's.
Speaker 6: Where the color and the flavor comes from.
Speaker 11: Right Well, now, the base spirit adds a huge amount
Speaker 11: of depth and complexity as well, but for me, it's
Speaker 11: it's a lot about the wood. And so we put
Speaker 11: it for a year into Virgin Oak chur number four,
Speaker 11: which we sourced from from segu Moreau and NAPA, and
Speaker 11: we actually took like this is back in twenty nineteen
Speaker 11: and Fay and I took our son Gussie to segra
Speaker 11: Moreau and there's we have pictures of him as a
Speaker 11: one year old with these all these flames around the place.
Speaker 11: Just amazing scenes and the smells, the smells of coop
Speaker 11: bridges and distilleries are just amazing.
Speaker 12: So you launched in twenty nineteen, twenty twenty global pandemic.
Speaker 6: Right, what was that?
Speaker 11: Like, it's a misery, right, So twenty nineteen was amazing.
Speaker 11: By the end of it, we were by the end
Speaker 11: of our first year, which was only kind of ten
Speaker 11: months of trading, we were in six US markets and
Speaker 11: four global markets, right, and just the world was incredible.
Speaker 11: And I went on this ten day, five market trip
Speaker 11: in the States and it came back from it. I
Speaker 11: did Washington, Chicago, New Hampshire, Florida, and New York.
Speaker 2: Right.
Speaker 11: I came back and I was like, hey, we need
Speaker 11: to go to the States, Like that's this is where
Speaker 11: this is going to live and die. The entrepreneurial spirit
Speaker 11: of tell me more about your brand exists here very
Speaker 11: viscerally in a way. I didn't find it in Ireland.
Speaker 6: So I was like, let's go. And this is the
Speaker 6: end of twenty nineteen. We're like, let's go.
Speaker 1: We're going to sample a little bit before we do,
Speaker 1: and I'm going to tweet it out and maybe I
Speaker 1: can show it for those folks. There's a frog on
Speaker 1: your label. It's really kind of a cool looking frog.
Speaker 1: It's a spirited toad.
Speaker 6: Actually right it is.
Speaker 11: Yeah, it's the only tone indigenous to Ireland. But it's
Speaker 11: a very Irish toad. It can't hop, it walks, it
Speaker 11: can't swim at rounds. It does things its own way
Speaker 11: to survive, much like ourselves.
Speaker 6: But interesting.
Speaker 11: It has a gestation period from toadlet which is a
Speaker 11: baby toad to fully grown total of three years. Irish
Speaker 11: whiskey takes three years to become whiskey from new make
Speaker 11: it has so you thought about this, Oh absolutely, it
Speaker 11: has amazing call that can we heard two kilometers away
Speaker 11: like some of the best whiskey drinkers, and it's not
Speaker 11: turned like all the best whiskey drinkers.
Speaker 1: As you said, you've really thought about the brand and
Speaker 1: the packaging. I'm going to open it up and pour
Speaker 1: some were there's a thing tell us about, though, tough
Speaker 1: time because you guys were around during COVID.
Speaker 6: Yes, we all actually before we do that.
Speaker 1: What are we trying?
Speaker 11: Oh, you're trying to get matter Jack Blend number one,
Speaker 11: which is our kind of our flagship product. It is
Speaker 11: triple distilled, finished for a year in Virgin oak, so
Speaker 11: three and a half years experbon, one year Virgin Oak.
Speaker 11: And it's it's eighty proof and is the smoothest, easiest
Speaker 11: drink and whiskey you're ever going to come across. As
Speaker 11: a friend of mine said, it's great drink.
Speaker 6: And whiskey eighty proof.
Speaker 1: Man, we only have five minutes to go, girl, you okay,
Speaker 1: so talk to us about COVID where you probably could
Speaker 1: have used a lot of this, because that's a tough
Speaker 1: time exactly. So it's also pretty amazing lockdown. This smells
Speaker 1: like a lot of bourbon yet, but I kind of
Speaker 1: almost sweeter.
Speaker 11: There's a little bit of sweetness on the on the nose.
Speaker 11: I completely agree. Yeah, and it goes incredibly into Manhattan.
Speaker 1: So if you're drinking, I was thinking whiskey sour, which
Speaker 1: my dad used to make a lot growing up.
Speaker 6: Yeah.
Speaker 11: So so yeah, twenty twenty right, things shut down and
Speaker 11: are like I give an example, our biggest client in
Speaker 11: Ireland was the airport. Flights are gone right, So immediately
Speaker 11: your business in Ireland's gone right. Business in the US
Speaker 11: we to pivot from the on prem to the off prem.
Speaker 11: That involved changing, you know, or packaging that sort of thing.
Speaker 11: And so what happens is over the time period of
Speaker 11: the first few months of COVID, you're not having any revenue,
Speaker 11: your your fixed costs remained the same.
Speaker 6: We still let staff and.
Speaker 1: There's nothing coming in.
Speaker 6: There's nothing coming in.
Speaker 11: And so we tried our best to stay afloat. And
Speaker 11: then obviously after a while, investors don't want to hear
Speaker 11: that COVID is the problem, like you know that a
Speaker 11: problem was like Superna, Ricar or Diagio. Their numbers were
Speaker 11: quite good during COVID because as far as I could
Speaker 11: see it, they owned every point on the shelf from
Speaker 11: a ten dollar bottle to an eighty dollars bottle. We
Speaker 11: only had one SKU, which is what we're drinking right now,
Speaker 11: one product?
Speaker 6: How much is this cost? That is in New York
Speaker 6: thirty eight dollars?
Speaker 12: Okay, So how do you define that? Who is buying it?
Speaker 12: Or do you find it at a bar?
Speaker 6: Do you find it fun at bars?
Speaker 2: Yeah?
Speaker 11: So we priced it very much for the cocktail list
Speaker 11: in bars because that's where people people will see it
Speaker 11: on the menu, and that's a really important part of
Speaker 11: the sales strategy.
Speaker 1: I would say, for an eighty proof, it's really nice.
Speaker 12: It doesn't go down hard, No, it's very it's it's
Speaker 12: not sweet, but it's kind of a softer exactly.
Speaker 11: A triple distillation of Iris whisky does make it smooth,
Speaker 11: but then the virgin oak really rounds off those edges.
Speaker 1: All right, I'm gonna take the glasses back. You're going
Speaker 1: to tell us about the second bottle and I'll pour it.
Speaker 11: And so this this is a this is our our
Speaker 11: cast strength, right, and the idea behind this is going
Speaker 11: to be true cast strength lessing around right. So it's
Speaker 11: it's what comes out of the barrel. It goes through
Speaker 11: a sieve and it goes into the bottle. That's it.
Speaker 11: This is truly what's in the barrel. So I get
Speaker 11: a phone call in December and it's from them, Jim
Speaker 11: Murray of the Whiskey Bible, and he got and I
Speaker 11: didn't recognize the number, and I answered the phone and
Speaker 11: he said, Hi, it's Jim Murray and I was like, yeah,
Speaker 11: of course it is.
Speaker 6: Why would Jim Murray be calling me?
Speaker 11: Who is Jim Murry has the Whiskey Bible. He's very
Speaker 11: famous in the in the industry, so cool reviewing. And
Speaker 11: I was like, this is one of my mates. Like,
Speaker 11: there's no way Jim Murray's calling me. So he's like, no,
Speaker 11: it's it is Jim Murray.
Speaker 6: And I was like, somebody get me. Jim Murray's normal.
Speaker 1: This is the Arris Whiskey of the Year for twenty twenty.
Speaker 6: Twenty twenty four.
Speaker 11: Ye beat out, It beat out all of our friends. Middleton,
Speaker 11: thirty year old.
Speaker 1: I feel like you're a little bit of a connoss
Speaker 1: war okay, more than me. You're gonna laugh at me,
Speaker 1: you like the other one.
Speaker 2: No.
Speaker 12: But in college when I didn't want to go out,
Speaker 12: I used to tell people I'm hanging out with my
Speaker 12: boyfriends Jack and Jim.
Speaker 1: Did you really high shirted? We're newspeople. We like to
Speaker 1: write and Bloomberg. There's a definite difference.
Speaker 6: Though, huge.
Speaker 11: Yeah, and the mouth feel is different. There's loads of
Speaker 11: butterscotch on this, Yeah, And we were just were just amazed.
Speaker 11: So eventually I worked out that it was Jimmery on
Speaker 11: the phone. He said, you've won Irish Whisky of the Year.
Speaker 11: It's the best Irish whiskey I've tasted in years and years.
Speaker 11: What you've done is incredible, And I was like, this
Speaker 11: is amazing.
Speaker 1: Yeah, so more inclined for people to drink it as
Speaker 1: is versus the other one.
Speaker 6: So actually that one I put over a big cube
Speaker 6: of ice.
Speaker 11: I'll drink it over an hour and it as the
Speaker 11: as it dilutes, it tells the story all of its own.
Speaker 6: So I think it's amazing.
Speaker 1: It's really lovely. I am not a whiskey drinker, but
Speaker 1: this is really lovely. How do you distinguish yourself, as
Speaker 1: we talked about, like some of the giants man they
Speaker 1: have you know, they can go with a bunch of
Speaker 1: different varieties. How do you kind of get yourself noticed?
Speaker 1: So the market that has a lot of choices.
Speaker 11: So you've got to do something different, right, if that
Speaker 11: whiskey if we called it Whiskey eight and Megan's Whiskey.
Speaker 11: The three of us wouldn't be sitting here today, right,
Speaker 11: I'd probably be back in a different job. So natter
Speaker 11: Jack stood out the toads.
Speaker 1: Doudsly as simple as the name that.
Speaker 11: The whiskey has to be good. I'll tell you back
Speaker 11: when we were seeing people at the start, loads of
Speaker 11: people told us, don't worry about what's in the bottle,
Speaker 11: it's only the brand. But that's actually not true, because
Speaker 11: people really come.
Speaker 6: The first sale. You'll get second sale.
Speaker 1: It's got to be cool, buye because the battle looks cool,
Speaker 1: and then you'll take it home and say never get exactly.
Speaker 12: I'm going to ask the most Wall Street question ever,
Speaker 12: the investment banking reporter for years, of course, is going
Speaker 12: to ask you this, what are your bigger ambitions? Is
Speaker 12: the idea here to get rolled up by the likes
Speaker 12: of a Diagio one day?
Speaker 11: Maybe one day and on our investors will want to return,
Speaker 11: right but realistically so we're in fourteen global markets in
Speaker 11: sixteen US markets now. Right from the back of being
Speaker 11: out of money at the end of twenty twenty two,
Speaker 11: it's been an amazing transformation. We have an incredible board
Speaker 11: of investors who support us. So honestly, my passion and
Speaker 11: drive for this is to create a global brand. And
Speaker 11: what I sell it in the morning, maybe but maybe not.
Speaker 11: It just depends, right, Like you look at Tito's, they
Speaker 11: haven't sold, right, So it just depends on what happens
Speaker 11: at a certain time. But look, I was a trader.
Speaker 11: Everything has a price, right, that's true. Well said, if
Speaker 11: someone comes in with the big bid, you hit the bid.
Speaker 11: That's it, right. So so but it's been it's been amazing,
Speaker 11: and the growth is going incredibly And just before I
Speaker 11: walked in we got national We got national order from
Speaker 11: one of the big chains in the country. So Patty
Speaker 11: Stay Weekend is looking good already.
Speaker 1: So that's a big deal. Huge Is there more choices
Speaker 1: to come? Like do you build this out?
Speaker 2: Yeah?
Speaker 11: So I'll tell you there's it real quickly, very quickly.
Speaker 11: We've got something called Natterjack the mistake because I left
Speaker 11: one hundred barrels in barrel for a year two long.
Speaker 11: I completely screwed up. It says it on the back,
Speaker 11: and the label's a mistake and.
Speaker 6: We're launching it. In April, who launched a Narris whiskey
Speaker 6: in April. It's a mistake. The whole thing's a mistake.
Speaker 3: That was Aiden Meghan, a founder of Natterjack Irish Whiskey,
Speaker 3: with Carol and a Bloomberg Wall Street reporter, Snelly Bassett.
Speaker 1: It was really fun. We'll have to have them come back.
Speaker 3: I'm booking another. I'm booking another alcohol guests. Don't worry, Okay,
Speaker 3: I just sack an email.
Speaker 1: Or it's still ad on Bloomberg Business Week. Making the
Speaker 1: perfect espresso at home.
Speaker 3: Finally, something I know about.
Speaker 1: Getting an espresso. It sounds like the espresto side I
Speaker 1: didn't realize for you.
Speaker 3: Yeah, it's a long story. We'll get into it with
Speaker 3: Chris Rows. There also something I don't know much about,
Speaker 3: stepping out of Rolex's long shadow.
Speaker 1: Yeah, this is an interesting story. I know Chris will
Speaker 1: know a lot about that. Also, getting rid of pesky desmite.
Speaker 1: It's curtains for you, Rocky, It's curtains.
Speaker 3: That's all ahead on Bloomberg Pursuits. This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 1: All right, everyone, it's time for Bloomberg Pursuits and for
Speaker 1: all of you home barristas. We've got how to get
Speaker 1: the godshot of expresso, which is going to be one
Speaker 1: of the first things. We're going to ask Chris Rouser
Speaker 1: what the heck is that? But we'll get to that
Speaker 1: in a.
Speaker 3: Moment, because there's more to get to. Also, the watch
Speaker 3: that's along been relegated to a spot in Rolex's shadow.
Speaker 3: It's having though it's moment in time.
Speaker 1: It's shining. So too is the suite of the Moment,
Speaker 1: which was previously unattainable but can now be delivered to
Speaker 1: your front door for like a million dollars. But we'll
Speaker 1: talk about that later.
Speaker 3: We're gonna have a lot more. Let's get to it
Speaker 3: with the editor of Pursuits, Chris Rouser. He's here in
Speaker 3: our studio. Chris so excited about talking espresso here.
Speaker 13: I know, I know you're excited about it. I'm excited
Speaker 13: to talk to you.
Speaker 3: Finally, something in Bloomberg Pursuit that like I can say, yeah,
Speaker 3: excuse to me. So a few years ago, the height
Speaker 3: of the pandemic, for the holidays of twenty twenty, my
Speaker 3: whole family got together behind my back and they bought
Speaker 3: me a full prosumer set up for espresso, so the
Speaker 3: grinder and of course the espresso machine. And since then
Speaker 3: I've been trying to get the god shot.
Speaker 13: Your life has been ruined.
Speaker 3: It's get there?
Speaker 1: Did you get there?
Speaker 3: You know, I'm not as as I'm not as focused
Speaker 3: on that as some of the other folks are. Like
Speaker 3: I like the process and I just love the taste
Speaker 3: of what we can do home.
Speaker 1: First of all, can you do a little bit of
Speaker 1: a like definition here? A prosumer and also godshot?
Speaker 13: Yes, So a prosumer espresso machine is one is one
Speaker 13: that's like basically like a professional one that you would
Speaker 13: see in a cafe but at your house, a pro
Speaker 13: consumer kind of professional consumer.
Speaker 1: Yeaht it.
Speaker 13: And then the god shot is this mythical shot of
Speaker 13: espresso that people tend to only have once in their life.
Speaker 13: A lot of the people we talked to in our
Speaker 13: story can remember where they were and they remember the
Speaker 13: coffee beans that were ground for it, and they have
Speaker 13: spent the rest of their life searching to replicate the godshot.
Speaker 13: And so I guess Tim, you're on that mission.
Speaker 3: I am how long have you been on that mission?
Speaker 3: Since twenty twenty, Since December twenty twenty.
Speaker 1: Long time.
Speaker 3: Yeah, it's great though, I mean we make What's fun
Speaker 3: about it is we make we can make good coffee
Speaker 3: at home, and I love making coffee for other people too.
Speaker 3: So I have the Bizara besy ten and a Bizara
Speaker 3: grinder as well. And you know you mentioned in the
Speaker 3: piece whole Late Love, it's basically where you a distributor. Yeah,
Speaker 3: the distributor where you go for all this stuff. They're
Speaker 3: in New York State, and you can also call them
Speaker 3: with questions because like everybody has questions about this stuff.
Speaker 13: They're like the butterball turkey people.
Speaker 3: They're like full turkey people.
Speaker 13: So this so it's funny you've got that in twenty
Speaker 13: twenty because this really boomed during the pandemic. Fancy espresso
Speaker 13: machines are not new. This has been a trend for
Speaker 13: a long time among certain kind of people who have
Speaker 13: the kind of money and kind of time to devote
Speaker 13: to it. But since twenty nineteen, the amount of money
Speaker 13: spent on pro sumer models, which are the really high
Speaker 13: end models, has tripled.
Speaker 9: Wow.
Speaker 13: People have really really gotten into this since the pandemic,
Speaker 13: including our writer whose friend gave him a beat up
Speaker 13: old machine like you, Tim, His friend was like, I
Speaker 13: think you would beat into this. I know you love cappuccino.
Speaker 13: You got some extra time, And since then the writer
Speaker 13: has just been on this quest to make not even
Speaker 13: a godshot, like an okay shot.
Speaker 3: Well, the thing about this is that there's so many
Speaker 3: variables that make it difficult to make a really good shot.
Speaker 3: So you don't just have the beans, you know. That's
Speaker 3: also that's really important. The grind is so important, so
Speaker 3: you have to have the exact right type of grind.
Speaker 3: It can't be too fine, it can't be too coarse.
Speaker 3: And then you also have to have the right tamping pressure.
Speaker 3: You have to make sure the grounds are level. In
Speaker 3: the Tampa, they need.
Speaker 1: A cup of coffee to make it.
Speaker 3: It is kind of a joke around the house, like yeah,
Speaker 3: and then a scale to make sure you have the
Speaker 3: right right amount of beans, and then also that you're
Speaker 3: pulling it for the right amount of time. Yes, all
Speaker 3: of those things, you guys, want to come up for
Speaker 3: a guy.
Speaker 13: I didn't really know this because I go to a
Speaker 13: coffee shop almost every morning and I get a cappuccino
Speaker 13: and I see them do all of this really fast.
Speaker 13: So I didn't realize that the reason they're able to
Speaker 13: do it so fast is because they've done it thousands
Speaker 13: of times and they have it practiced. But in your
Speaker 13: own home, even the tamping, like you said, if you
Speaker 13: get it uneven, if you tamp that like.
Speaker 1: Puck, this is this is when they pound it together.
Speaker 13: Yeah, when they put it in the I don't even Tim,
Speaker 13: what's the words.
Speaker 3: That's called a porta filter.
Speaker 13: Filter, and then they tamp it down to get it flat.
Speaker 13: If you don't tamp it down, the water can come
Speaker 13: through and create channels through the through the espresso kind
Speaker 13: of going around it, and then it'll be watery. So
Speaker 13: our writer Rob can't get the tamping right. But Tim,
Speaker 13: I think you sounds like you.
Speaker 3: Have no not every time. But I'm also not. I
Speaker 3: won't throw away a shot. It's rare that I'll throw
Speaker 3: away a shot like it'll get drunk and it's okay
Speaker 3: if it's not perfect, it is, Yeah, it still tastes
Speaker 3: good there are a lot of variables, but it's still
Speaker 3: even if it's not perfect, it's still good. It's still okay. Yeah,
Speaker 3: at least for my pack.
Speaker 1: I feel so low rent with mine espresso.
Speaker 7: I'm just gonna say it right now. Don't look away
Speaker 7: from me.
Speaker 3: No, you can come over. You can come over any
Speaker 3: up until then, come over for coffee anytime.
Speaker 1: Guys, what are these things cost? Like, give us an
Speaker 1: idea and like and you said like sales were kind
Speaker 1: of like growing a lot or have grown a lot.
Speaker 13: Yeah, So the if you want to start like a
Speaker 13: starting model an Evo Pro, it's like four hundred and
Speaker 13: fifty dollars, and then they get up into the two
Speaker 13: thousand and three thousand and four thousand dollars level. So
Speaker 13: the one that we shot that our writer has is
Speaker 13: Lilt Bianca, which is three thousand dollars.
Speaker 3: Just reminder my whole family to get me the grind
Speaker 3: or a machine. Hey. Since then, two sets of friends
Speaker 3: have come over and gotten really into espresso, and like
Speaker 3: now they have their own machinery. You were so into espresso, Yeah,
Speaker 3: I believe my dad years ago, he got a machine
Speaker 3: years ago and then during the and I was just
Speaker 3: obsessed with it.
Speaker 13: One of the people we talked to, a distinguished chopware
Speaker 13: engineer at Google, which is a real title, bought a
Speaker 13: machine for those who are distinguished. He went on an
Speaker 13: eighteen month road trip because it was the pandemic and
Speaker 13: he could work from anywhere, and he took his three
Speaker 13: thousand dollars espresso machine around with him in like a
Speaker 13: gun case. That was the whole time, a huge expresssh
Speaker 13: That's how devoted people are.
Speaker 6: That is sorry.
Speaker 3: I've moved with it once and then I had to
Speaker 3: take it to get to get reconditioned once and I'm
Speaker 3: never picking that thing up again.
Speaker 1: All right, Should we talk about watches? Can we talk
Speaker 1: about watches? Because I feel like the poor sister child
Speaker 1: to the.
Speaker 13: Rolicks, so we Andy Hoffman are Swiss watch industry reporter
Speaker 13: engineer has a great story. The watch brand Tutor is
Speaker 13: a sister brand into a Rolex. They operate on the
Speaker 13: same campus and until recently they were kind of made
Speaker 13: of the same stuff. And Andy got the first ever
Speaker 13: ever interview with the managing director of this company. He's
Speaker 13: not even usually publicly identified, but they've really been trying
Speaker 13: to step out from the shadow of Rolex, which is
Speaker 13: the most famous watch company in the world, and they've
Speaker 13: done an incredible job. Their five year sales growth has
Speaker 13: been the fastest in the industry, among the fastest. They've
Speaker 13: done a ton of marketing, They've got really cool celebrity partnerships.
Speaker 13: And it went from this brand where they look kind
Speaker 13: of like Rolex as the watches a little less now.
Speaker 13: But so I always thought they were cool. But for example,
Speaker 13: my husband would say, why would you get that watch?
Speaker 13: People are just gonna assume it's a Rolex, and then
Speaker 13: see it's not a Rolex, and see they realize you
Speaker 13: didn't spend the amount of money on it that you
Speaker 13: would have spent on a Rolex. They started almost half
Speaker 13: the price, and now Tutor has turned that sort of
Speaker 13: affordability and funky difference from Rolex into something really appealing
Speaker 13: on its own, and it's one of the hottest watch brands.
Speaker 3: Do they still kind of look like Lexes?
Speaker 6: They do?
Speaker 13: They do. I mean there's not a huge variety of
Speaker 13: the watches. They have got these black Bay watches which
Speaker 13: have a bezel. They look like a Tutor sub mariner,
Speaker 13: I mean a Rolex sub mariner. But now I feel
Speaker 13: like you can tell the difference when you look between
Speaker 13: the two.
Speaker 3: And you said about half the price, So what is that?
Speaker 13: Well, so they start, we probably get a Tutor. They
Speaker 13: started around eighteen hundred Swiss francs. Most people are buying
Speaker 13: models of Tutor that are about four thousand and five
Speaker 13: thousand US dollars and a Rolex model starts at like
Speaker 13: nine or ten, and then they go way up and
Speaker 13: Tutor watches don't really go.
Speaker 1: There's a cute little tidbit too in the story. I'm
Speaker 1: not going to give it away about Rolex's logo versus
Speaker 1: a Tutor logo, but what.
Speaker 13: Yeah, which I didn't even know, and I've covered watches
Speaker 13: for ten years, I never really thought about it. Logo
Speaker 13: is a crown, probably the most famous watch logo there is,
Speaker 13: and the Tutor logo is a shield. And it's because
Speaker 13: the shield defends the crown, and by operating in the
Speaker 13: lower price space, Tutor makes it so that Rolex doesn't
Speaker 13: have to make watches in those space and can pursue
Speaker 13: the high high end.
Speaker 1: None feel like I'm watching something else BBC or something.
Speaker 3: I'm just going to turn out there. You could buy
Speaker 3: a Tutor, or you could buy an Espresso machine and
Speaker 3: grinder that absolutely true.
Speaker 1: Or a piece of melon or a single piece of fruit,
Speaker 1: can you tell us.
Speaker 7: A great story?
Speaker 1: Tell us about this melon that can be really expensive.
Speaker 13: You may know about Japanese fruit. There's a certain kinds
Speaker 13: of very special Japanese fruit that take a lot of
Speaker 13: time to grow. They're very specially remember the square water
Speaker 13: melons that were like very big a long time ago.
Speaker 13: Used to be very difficult or impossible to get that
Speaker 13: fruit in the United States. And just recently the Farmer's
Speaker 13: Trade Group in Japan started actually setting up companies that
Speaker 13: will distribute the fruit here in the United States because
Speaker 13: fruit consumption of this these specialized fruits is going down
Speaker 13: in Japan and the trying to grow the market and
Speaker 13: also fewer people are getting into farming, and so these
Speaker 13: melons which can be one hundred and twenty dollars.
Speaker 3: For a single melllon.
Speaker 13: Okay, that's funny, which they are grown in this Basically
Speaker 13: these fruit are so special because they're grown in an
Speaker 13: especially careful way and they're very concentrated in flavor and beauty.
Speaker 3: To be honest, maybe they're massaged sometimes too. They or
Speaker 3: wear a little hat.
Speaker 13: When we received a melon to shoot for this story.
Speaker 13: It arrived on a pillow.
Speaker 3: Did you eat it?
Speaker 13: Someone ate?
Speaker 6: I didn't.
Speaker 13: So like the melons, for example, are grown, there's just
Speaker 13: like one little melon tree, one fruit per tree.
Speaker 9: Wow.
Speaker 13: They don't let it grow, more like they concentrate all
Speaker 13: the energy into this one fruit. And strawberries are a
Speaker 13: big thing that are are being imported now. Also some
Speaker 13: citrus too, but the strawberries can be very expensive for
Speaker 13: a pound, like eighty nine dollars a pound.
Speaker 1: Your daughters had something.
Speaker 13: Well, So this trend of Japanese who come to the
Speaker 13: United States didn't actually start with importing. There is a
Speaker 13: vertical farm in New Jersey where a Japanese farmer came
Speaker 13: to the United States and built this vertical farm. And
Speaker 13: they now sell the or strawberries through Whole Foods. They're
Speaker 13: like fifteen dollars for what you would normally you know,
Speaker 13: pay six taste differently, yes, they if you get them
Speaker 13: from Whole Foods. They come in these like little individual buckets,
Speaker 13: I guess in the container and they're very beautiful. Some
Speaker 13: are white, some are bright red, and they taste extremely delicious.
Speaker 1: Curtains for dust mites talk about this busy plus streamer.
Speaker 13: So steamers. You may use a steamer. You may have
Speaker 13: a steamer to use on your clothes oftentimes when you're traveling.
Speaker 13: It's great if they have it in a hotel, just
Speaker 13: get rid of the wrinkles really fast. There's a new
Speaker 13: steamer that you can get for your house, but like
Speaker 13: also like a pro sumer model by the Swiss housers
Speaker 13: company Lara Star, and it not only will steamer clothes
Speaker 13: at with like a three hundred and two degrees steam
Speaker 13: at sixty five miles an hour. Think about that if
Speaker 13: it also kills dust mites, so you can just like
Speaker 13: spray it over your pillows and your mattresses and you
Speaker 13: know you're sleeping with a lot of dust mites and
Speaker 13: other gross tests. Steam just kills it.
Speaker 3: Did not know we had so many dust.
Speaker 1: Mites in our home, like an allergy test, and it's
Speaker 1: like like I have no allergies except for dust mites
Speaker 1: because they're everywhere.
Speaker 3: Well, you got to get one of these, uh steamers, Carol.
Speaker 13: You know how your pillow gets heavier over the years,
Speaker 13: it's mites. Really, Yeah, that's why you gotta change around
Speaker 13: or use this steamer.
Speaker 1: Okay, everybody's gonna go home your pillow. Chris, thank you
Speaker 1: so much, really appreciate it.
Speaker 3: That's the editor of Bloomberg Pursuits, Chris Rodser. Check out
Speaker 3: more from Pursuits in the entire Businesswek team by heading
Speaker 3: to Bloomberg dot com.
Speaker 2: This is the Bloomberg Business Week Podcast, Apple, Spotify, and
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