1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,000 Speaker 1: us live on YouTube. 6 00:00:27,120 --> 00:00:29,920 Speaker 2: Trsten slocked his bulletproof economics. He does it with a 7 00:00:30,000 --> 00:00:33,440 Speaker 2: continental europe feel out of Copenhagen and of courses work 8 00:00:33,479 --> 00:00:36,839 Speaker 2: at Princeton as well iconic and definitive, i should say, 9 00:00:36,840 --> 00:00:40,559 Speaker 2: at Deutsche Bank and now at Apollo Global Management. Torsten 10 00:00:40,680 --> 00:00:45,600 Speaker 2: give us an update on real and nominal GDP in 11 00:00:45,720 --> 00:00:49,080 Speaker 2: the United States of America. It's become a blur with 12 00:00:49,159 --> 00:00:52,400 Speaker 2: the cacophity of the news twelve months forward. Where are 13 00:00:52,440 --> 00:00:56,120 Speaker 2: you on real GDP? Where are you on a nominal statistic? 14 00:00:56,880 --> 00:00:59,960 Speaker 3: Well, the US is having three very important ail instagrow 15 00:01:00,160 --> 00:01:02,760 Speaker 3: at the moment, one coming from the AI boom, another 16 00:01:02,800 --> 00:01:04,640 Speaker 3: coming from the one big bit of a bill, and 17 00:01:04,720 --> 00:01:07,520 Speaker 3: another tailwind also coming from the industrial renaissance, meaning the 18 00:01:07,560 --> 00:01:10,720 Speaker 3: political interest in bringing back production to the USS of 19 00:01:10,760 --> 00:01:13,880 Speaker 3: manufacturing capacity. And were beginning to see all these three 20 00:01:13,920 --> 00:01:17,679 Speaker 3: engines really fire very, very significantly because the AI boom 21 00:01:17,720 --> 00:01:19,880 Speaker 3: obviously is very strong. We also had the one big 22 00:01:19,920 --> 00:01:21,880 Speaker 3: bit of a bill especially for the next two to 23 00:01:21,920 --> 00:01:24,759 Speaker 3: three quarters, is very strong. And we're also seeing ISSM 24 00:01:24,760 --> 00:01:27,839 Speaker 3: manufacturing begin to accelerate in the last six months because 25 00:01:27,880 --> 00:01:30,440 Speaker 3: now the trade more uncertainty is more behind us, and 26 00:01:30,480 --> 00:01:33,040 Speaker 3: now we're beginning to see the positive effects. So therefore 27 00:01:33,080 --> 00:01:36,000 Speaker 3: GDP over the next twelve months should be growing in 28 00:01:36,080 --> 00:01:39,680 Speaker 3: nominal terms roughly around five percent, and in real terms 29 00:01:39,680 --> 00:01:41,920 Speaker 3: we should have GDP growth at roughly two two and 30 00:01:41,959 --> 00:01:42,520 Speaker 3: a half percent. 31 00:01:42,680 --> 00:01:44,959 Speaker 2: Is it just a set of stimuli. 32 00:01:47,120 --> 00:01:48,960 Speaker 3: Well, the key issue is of course that the AI 33 00:01:49,000 --> 00:01:52,160 Speaker 3: spending boom plays such a significant role, and that's very 34 00:01:52,200 --> 00:01:54,280 Speaker 3: important both because it plays a course of role in 35 00:01:54,320 --> 00:01:56,200 Speaker 3: the data center build out but also the associated the 36 00:01:56,280 --> 00:01:58,440 Speaker 3: energy build out. And that's why the AI boom is 37 00:01:58,440 --> 00:02:01,200 Speaker 3: so interesting from a fit and an inflation perspective, because 38 00:02:01,240 --> 00:02:04,320 Speaker 3: the AI boom is certainly inflationary initially. 39 00:02:04,120 --> 00:02:06,440 Speaker 4: Because we are spending a lot of dollars. 40 00:02:06,200 --> 00:02:08,400 Speaker 3: About seven hundred billions from the hyper skill as alone 41 00:02:08,800 --> 00:02:11,959 Speaker 3: on the buildout, and that of course means more pricing 42 00:02:12,080 --> 00:02:15,440 Speaker 3: and more therefore higher inflation when it comes to semiconductor prices. 43 00:02:15,440 --> 00:02:17,400 Speaker 3: When it comes to labor, when it comes to energy, 44 00:02:17,400 --> 00:02:20,720 Speaker 3: when it comes to construction workers. So initially it is 45 00:02:20,880 --> 00:02:22,880 Speaker 3: something that is not just driven by the one big 46 00:02:22,919 --> 00:02:25,240 Speaker 3: bill of a bill, but it's also important driven by 47 00:02:25,720 --> 00:02:28,280 Speaker 3: ultimately how long time you think the AI boom will continue. 48 00:02:29,480 --> 00:02:32,120 Speaker 5: What is your inflation call here at Torsten? Is it 49 00:02:32,680 --> 00:02:36,480 Speaker 5: a transitory energy driven inflation or is there something more 50 00:02:36,480 --> 00:02:36,880 Speaker 5: out there? 51 00:02:37,440 --> 00:02:40,120 Speaker 3: Yeah, you know, this is the fast debate that they 52 00:02:40,120 --> 00:02:42,120 Speaker 3: don't like the word transitoris and now they call it 53 00:02:42,160 --> 00:02:44,760 Speaker 3: temporary instead. Okay, And this is of course why this 54 00:02:44,919 --> 00:02:47,400 Speaker 3: is of course the dangerous game, because well, what if 55 00:02:47,440 --> 00:02:50,200 Speaker 3: this boom in particular of course when it comes to 56 00:02:50,240 --> 00:02:53,360 Speaker 3: the AI spending is going to last several years, and 57 00:02:53,400 --> 00:02:55,480 Speaker 3: if at the same time you also have seen terrorsts 58 00:02:55,480 --> 00:02:58,160 Speaker 3: put up by pleasure and inflation, you've also seen of 59 00:02:58,240 --> 00:03:01,160 Speaker 3: course ultimately energy price is also putting off by pressure 60 00:03:01,160 --> 00:03:04,320 Speaker 3: on inflation. So that's why if you're tied ECFC, go 61 00:03:04,440 --> 00:03:06,880 Speaker 3: on your bluebelg streen I look at the quarterly profile. 62 00:03:07,000 --> 00:03:09,680 Speaker 3: You will see, as you all know, that the inflation 63 00:03:10,000 --> 00:03:12,799 Speaker 3: levels both for headline and for coll infation is going 64 00:03:12,800 --> 00:03:14,880 Speaker 3: to be about three at least for the next twelve 65 00:03:14,919 --> 00:03:17,000 Speaker 3: months and that's of course the call problem for the 66 00:03:17,040 --> 00:03:19,640 Speaker 3: twelve voting members on their form. See namely that eleven 67 00:03:19,680 --> 00:03:21,760 Speaker 3: of them have said that we're not cutting interest rates 68 00:03:21,760 --> 00:03:24,440 Speaker 3: and infavation is going up. It becomes pretty complicated for 69 00:03:24,520 --> 00:03:26,320 Speaker 3: them to lower interest rates in this environment. 70 00:03:26,400 --> 00:03:28,360 Speaker 2: Turston. I don't want you to get in trouble with 71 00:03:28,400 --> 00:03:31,040 Speaker 2: compliance folks, and we don't take cheap shots, particularly with 72 00:03:31,160 --> 00:03:34,519 Speaker 2: someone like doctor Slock. Here's a headline, and I want 73 00:03:34,520 --> 00:03:36,520 Speaker 2: to make clear I'm not going to be snarky here 74 00:03:36,840 --> 00:03:41,560 Speaker 2: and go directly to this Blackstone, not related to doctor Slock. 75 00:03:42,120 --> 00:03:48,160 Speaker 2: Blackstone private credit fund caps investor redemptions at five percent. Okay, 76 00:03:48,160 --> 00:03:52,080 Speaker 2: that headline just came out. That's like a huge deal, Torston. 77 00:03:52,200 --> 00:03:56,080 Speaker 2: Forget about that headline. But when you're sitting there, Torston, 78 00:03:56,760 --> 00:03:59,720 Speaker 2: looking at your World Cup card and what Denmark's going 79 00:03:59,800 --> 00:04:04,200 Speaker 2: to do, I mean, where are the Torsten Slock shadows 80 00:04:04,240 --> 00:04:07,400 Speaker 2: out there in leverage or ill liquidity. 81 00:04:08,440 --> 00:04:12,760 Speaker 3: Yeah, so Denmark didn't qualify unfortunately for the work. So 82 00:04:12,880 --> 00:04:15,720 Speaker 3: I will be having a very relaxed sumwhe here. But 83 00:04:15,960 --> 00:04:18,400 Speaker 3: you're right, Tom So it's frankly in terms of the 84 00:04:18,520 --> 00:04:21,000 Speaker 3: risks to the outlook, the key risk of course, Number 85 00:04:21,000 --> 00:04:22,720 Speaker 3: one is that we still need to get the straight 86 00:04:22,760 --> 00:04:24,640 Speaker 3: up a moose open in some form so that OLI 87 00:04:24,720 --> 00:04:27,440 Speaker 3: prices are not at risk of suddenly spiking higher if 88 00:04:27,440 --> 00:04:30,239 Speaker 3: some tank runs dry somewhere in the world, in particular 89 00:04:30,440 --> 00:04:33,080 Speaker 3: somewhere in Europe. So the risk of higher ALIL prices 90 00:04:33,120 --> 00:04:35,320 Speaker 3: at absolutely the number one risk to the outlook at 91 00:04:35,320 --> 00:04:35,679 Speaker 3: the moment. 92 00:04:35,880 --> 00:04:37,839 Speaker 4: The second risk is this issue of inflation. 93 00:04:38,279 --> 00:04:40,600 Speaker 3: Because there's the strait of a moose remains closed, then 94 00:04:40,600 --> 00:04:43,640 Speaker 3: there's even more upside risk to infasion than my ECFC 95 00:04:43,680 --> 00:04:45,200 Speaker 3: ghostcreen is telling me at the moment. 96 00:04:45,400 --> 00:04:47,599 Speaker 4: And the last thing that's also a risk is, of course, 97 00:04:47,600 --> 00:04:48,520 Speaker 4: what's happening with AI. 98 00:04:49,120 --> 00:04:51,039 Speaker 3: AI is a risk in the sense that if it 99 00:04:51,120 --> 00:04:54,200 Speaker 3: is successful, it will create new challenges. If it's not successful, 100 00:04:54,279 --> 00:04:56,920 Speaker 3: it will also create new challenges. So these three things 101 00:04:56,960 --> 00:04:59,880 Speaker 3: they need enterprises, what's happening with inflation, and what's hap 102 00:05:00,200 --> 00:05:02,360 Speaker 3: with AI. Those are the three areas that we spend 103 00:05:02,360 --> 00:05:04,880 Speaker 3: a lot of time looking at Tourson. 104 00:05:04,960 --> 00:05:08,920 Speaker 5: With the current immigration policy, population and growth in the 105 00:05:09,040 --> 00:05:15,000 Speaker 5: US is essentially stalled. Can I guess the performance of AI. 106 00:05:15,120 --> 00:05:17,599 Speaker 5: Can that improve productivity to the point where this economy 107 00:05:17,600 --> 00:05:18,159 Speaker 5: can still grow? 108 00:05:19,080 --> 00:05:21,159 Speaker 3: But It's probably going to take a longer time because 109 00:05:21,200 --> 00:05:24,200 Speaker 3: initially the AI spending boom is going to be inflationary 110 00:05:24,240 --> 00:05:27,560 Speaker 3: and we will probably not see much initial productivity gains. 111 00:05:27,760 --> 00:05:30,239 Speaker 4: This is why this transition period that we're going through. 112 00:05:30,520 --> 00:05:33,520 Speaker 3: What is the world ultimately going to look like once 113 00:05:33,560 --> 00:05:36,560 Speaker 3: AI has been fully implemented and installed. Is it going 114 00:05:36,600 --> 00:05:39,440 Speaker 3: to be dramatically higher productivity or is only going to 115 00:05:39,440 --> 00:05:42,080 Speaker 3: be modestly higher productivity? It will be positive for sure, 116 00:05:42,440 --> 00:05:45,400 Speaker 3: but the question becomes what is the level of investment 117 00:05:45,440 --> 00:05:48,440 Speaker 3: that deployed today relative to what the end result is? 118 00:05:48,480 --> 00:05:50,600 Speaker 3: And if that's the case that this is the discussion, 119 00:05:50,640 --> 00:05:53,120 Speaker 3: then executly to your question here, well, then we do 120 00:05:53,240 --> 00:05:55,880 Speaker 3: need to think about, well, if that endpoint becomes so important, 121 00:05:56,000 --> 00:05:57,720 Speaker 3: what is that endpoint going to look like? 122 00:05:57,880 --> 00:06:02,680 Speaker 2: So is our efficiency or product activity now not AI? 123 00:06:03,680 --> 00:06:07,119 Speaker 2: And is it something else going on? Including Nicholas booth 124 00:06:07,200 --> 00:06:11,839 Speaker 2: Out at Stanford saying work from home is an efficiency 125 00:06:12,040 --> 00:06:14,880 Speaker 2: and productivity boost, what are your thoughts on that? 126 00:06:15,400 --> 00:06:17,320 Speaker 3: Yeah, this has been a very important debate in the 127 00:06:17,400 --> 00:06:20,200 Speaker 3: academic literature and Nick Bloom has been absolutely in front 128 00:06:20,240 --> 00:06:22,840 Speaker 3: of all this because the discussion has been you would 129 00:06:22,839 --> 00:06:26,000 Speaker 3: normally have the logical conclusion, Well, if people work for home, 130 00:06:26,080 --> 00:06:27,919 Speaker 3: they don't work too much, they relax, they go and 131 00:06:27,960 --> 00:06:30,279 Speaker 3: have a cup of coffee. But he is actually shown 132 00:06:30,320 --> 00:06:32,880 Speaker 3: in a series of papers exactly what you're saying, Tom, 133 00:06:33,040 --> 00:06:35,920 Speaker 3: namely that people working from home actually increases productivity. 134 00:06:36,160 --> 00:06:38,240 Speaker 4: So you're right, it's not only about AI, or. 135 00:06:38,240 --> 00:06:40,240 Speaker 3: You can call that a version of AI, but it's 136 00:06:40,240 --> 00:06:42,360 Speaker 3: also a lot of other factors that really are all 137 00:06:42,400 --> 00:06:44,760 Speaker 3: about how are capsul and labor working together. 138 00:06:45,040 --> 00:06:47,840 Speaker 4: In other words, with capuson and labor. Ultimately, the way they. 139 00:06:47,760 --> 00:06:50,240 Speaker 3: Work together creates, as you know very well, total factor 140 00:06:50,240 --> 00:06:53,480 Speaker 3: of productivity, and total factor productivity can be higher if 141 00:06:53,480 --> 00:06:54,480 Speaker 3: you give the tools to. 142 00:06:54,480 --> 00:06:56,120 Speaker 4: Capusul and labor to work better together. 143 00:06:56,160 --> 00:06:58,920 Speaker 3: And AI is exactly one of those tools that does 144 00:06:59,120 --> 00:07:01,760 Speaker 3: do increase total factor of productivities in Europe. 145 00:07:01,960 --> 00:07:03,960 Speaker 2: Do what you just said. 146 00:07:04,080 --> 00:07:06,760 Speaker 3: I mean, the challenge for Europe is that they are 147 00:07:06,800 --> 00:07:09,360 Speaker 3: not enjoying the AI boom that we're seeing in the US. 148 00:07:09,360 --> 00:07:11,440 Speaker 3: And this is very important. Normally, my job is easy. 149 00:07:11,720 --> 00:07:13,760 Speaker 3: If the US is good, Europe is good. If the 150 00:07:13,840 --> 00:07:16,160 Speaker 3: US is bad, Europe is bad. But at the moment, 151 00:07:16,200 --> 00:07:18,840 Speaker 3: the three tailwinds to the US, the AI boom they 152 00:07:18,840 --> 00:07:20,880 Speaker 3: wan't to be beautiful Bill the industrial renaissance. 153 00:07:21,080 --> 00:07:23,160 Speaker 4: None of these tailwinds exist in Europe. 154 00:07:23,240 --> 00:07:25,360 Speaker 3: And as a footnote, remember also none of these tailwinds 155 00:07:25,400 --> 00:07:27,080 Speaker 3: that are growth enhancing in the US. 156 00:07:27,160 --> 00:07:28,920 Speaker 4: They are not sensitive to interest rates. 157 00:07:29,080 --> 00:07:31,520 Speaker 3: In other words, it's really unique that the US is 158 00:07:31,600 --> 00:07:34,320 Speaker 3: driven by factors that are not particularly sensitive to whether 159 00:07:34,400 --> 00:07:37,120 Speaker 3: rates go up or down. Those sectors in the economy 160 00:07:37,160 --> 00:07:39,600 Speaker 3: that are senteni to that is housing and autos, they 161 00:07:39,640 --> 00:07:41,880 Speaker 3: are not doing very well because they are very interest 162 00:07:41,960 --> 00:07:44,080 Speaker 3: rates sensitive. But the sources of growth in. 163 00:07:44,080 --> 00:07:47,000 Speaker 4: The US are really unique in the US at the moment, and. 164 00:07:46,960 --> 00:07:49,960 Speaker 3: We don't have them in Europe, Canada and Australia unfortunately 165 00:07:50,000 --> 00:07:50,920 Speaker 3: for the rest of the world. 166 00:07:51,480 --> 00:07:57,400 Speaker 5: Torson how is Europe missing this AI story? Here one 167 00:07:57,440 --> 00:08:00,560 Speaker 5: could argue they miss just the technology, the boom of 168 00:08:00,560 --> 00:08:04,840 Speaker 5: the last thirty years. How can they afford to miss 169 00:08:05,160 --> 00:08:08,160 Speaker 5: this AI boom which is reshaping the planet. 170 00:08:08,680 --> 00:08:10,880 Speaker 3: I would suggest that this is exactly a topic for 171 00:08:10,960 --> 00:08:16,760 Speaker 3: Scarlet and Tom's Money Show, because here we have a 172 00:08:16,880 --> 00:08:19,160 Speaker 3: very critical thing. Maybe why is it Europe is falling 173 00:08:19,200 --> 00:08:22,280 Speaker 3: behind so much an AI? And there are several oecd 174 00:08:22,360 --> 00:08:24,480 Speaker 3: answers to this. Number one, they do not have a 175 00:08:24,560 --> 00:08:27,480 Speaker 3: very flexible label market. It's very difficult to hire people, 176 00:08:27,640 --> 00:08:29,240 Speaker 3: it's very difficult to fire people. 177 00:08:29,440 --> 00:08:32,400 Speaker 4: That means that risk taking among entrepreneurs is a. 178 00:08:32,320 --> 00:08:35,280 Speaker 3: Lot lower because it becomes much more expensive if you 179 00:08:35,360 --> 00:08:38,160 Speaker 3: go out and hire and fire people. That's particularly pronounced 180 00:08:38,160 --> 00:08:40,320 Speaker 3: in Germany and France. But this has been a problem 181 00:08:40,320 --> 00:08:43,000 Speaker 3: for decades. The second thing that's also very critical for 182 00:08:43,040 --> 00:08:46,040 Speaker 3: Europe is that we need much more access to capucul, 183 00:08:46,320 --> 00:08:49,040 Speaker 3: much more access to venture capusil, much more access to 184 00:08:49,080 --> 00:08:52,679 Speaker 3: long term capitul, and financial markets are simply not as developed. 185 00:08:52,880 --> 00:08:53,840 Speaker 4: It's difficult if. 186 00:08:53,760 --> 00:08:56,400 Speaker 3: You want an entrepreneur to find financing in Europe, where 187 00:08:56,400 --> 00:08:57,720 Speaker 3: it's really easy to do. 188 00:08:57,800 --> 00:08:58,360 Speaker 4: In the US. 189 00:08:58,480 --> 00:09:01,000 Speaker 2: Okay, so, folks of Vignette here to set this up. 190 00:09:01,040 --> 00:09:03,480 Speaker 2: I'm in Davos and it's like the Blur and it's 191 00:09:03,520 --> 00:09:07,240 Speaker 2: the beautiful people and all that, and my my fourth espresso. 192 00:09:07,320 --> 00:09:10,760 Speaker 2: I'm standing by the bar. Torsten comes up to me 193 00:09:10,840 --> 00:09:15,960 Speaker 2: with some guy and he introduces me to somebody nobody knew, 194 00:09:16,080 --> 00:09:19,880 Speaker 2: Christian Saving, who at the time is retail German banking 195 00:09:19,920 --> 00:09:21,959 Speaker 2: with Deutsche Bank, and all of a sudden he's running 196 00:09:22,000 --> 00:09:26,920 Speaker 2: the ship. Torsten slam it forward. Simon Foy Florian Miller 197 00:09:27,679 --> 00:09:30,920 Speaker 2: in the Ft last week, how Deutsche Bank Torsten slacks 198 00:09:30,960 --> 00:09:36,200 Speaker 2: Deutsche Bank learned to stop chasing America. That's the heart 199 00:09:36,240 --> 00:09:40,120 Speaker 2: of the matter, isn't it. It's not chase America, but 200 00:09:40,280 --> 00:09:43,480 Speaker 2: do it within like soft Bank in France or the 201 00:09:43,520 --> 00:09:46,040 Speaker 2: Deutsche Bank revolution and the continent right. 202 00:09:46,800 --> 00:09:49,480 Speaker 3: Well, I think the Europeans o beginning to recognize that 203 00:09:49,559 --> 00:09:52,920 Speaker 3: something needs to change, especially in financial markets solvency two. 204 00:09:53,320 --> 00:09:56,320 Speaker 3: The rules are simply so rigid that they're not very 205 00:09:56,320 --> 00:09:59,640 Speaker 3: supportive fault growth, and that's a real chinnese for the Europeans. 206 00:10:00,600 --> 00:10:03,280 Speaker 3: They can also use last language models, that's all very helpful, 207 00:10:03,400 --> 00:10:06,199 Speaker 3: but they should themselves really begin to realize more. 208 00:10:06,240 --> 00:10:08,000 Speaker 4: And I think that is where we are going. 209 00:10:08,200 --> 00:10:11,199 Speaker 3: That they need to also themselves invent the new anthropics 210 00:10:11,200 --> 00:10:13,360 Speaker 3: and open AI in spasics. And the only way to 211 00:10:13,400 --> 00:10:15,560 Speaker 3: do that is to get a more flexible label market 212 00:10:15,679 --> 00:10:17,439 Speaker 3: and to change rules in cavisel let. 213 00:10:17,400 --> 00:10:19,840 Speaker 2: Me ask one more question, is Paul's got fourteen questions 214 00:10:19,880 --> 00:10:22,240 Speaker 2: of being route towards to the heart of the matter, 215 00:10:22,280 --> 00:10:25,600 Speaker 2: And this is like a Noi Rabini question. It's old world, 216 00:10:25,679 --> 00:10:30,200 Speaker 2: new world. We have a heritage of failure, bankruptcy and 217 00:10:30,240 --> 00:10:34,160 Speaker 2: a hyachien clearing of the market, and they do not. 218 00:10:34,600 --> 00:10:36,760 Speaker 2: It's as simple as that, isn't it. 219 00:10:36,760 --> 00:10:38,720 Speaker 4: It is indeed quite as simple as that. 220 00:10:38,800 --> 00:10:41,280 Speaker 3: It is very important that bankruptcy laws also in the 221 00:10:41,360 --> 00:10:44,680 Speaker 3: US give you quote unquote a second chance. Bankruptcy laws 222 00:10:44,760 --> 00:10:47,760 Speaker 3: in most of European countries do not give you a 223 00:10:47,800 --> 00:10:51,280 Speaker 3: second chance. That's all these issues about recalls non recalls. 224 00:10:51,400 --> 00:10:53,480 Speaker 3: If I go bankrupt in the US, I can have 225 00:10:53,520 --> 00:10:55,480 Speaker 3: a clean slate, I can start a new business. In 226 00:10:55,520 --> 00:10:58,200 Speaker 3: many European countries, if I go bankrupt, I owe people 227 00:10:58,240 --> 00:11:01,080 Speaker 3: money for decades. So that's why this whole issue about 228 00:11:01,120 --> 00:11:03,400 Speaker 3: how quickly can you come out of bankruptcy codes? Can 229 00:11:03,400 --> 00:11:06,199 Speaker 3: you start a new business? How dynamic issue economy? All 230 00:11:06,200 --> 00:11:08,560 Speaker 3: these things are really important for the Europeans, and I 231 00:11:08,559 --> 00:11:10,320 Speaker 3: think they're moving in the right direction on a number 232 00:11:10,320 --> 00:11:13,640 Speaker 3: of different fronts. But unfortunately it's just not moving fast enough, 233 00:11:13,800 --> 00:11:15,719 Speaker 3: because as we all know, and as we exactly talk 234 00:11:15,760 --> 00:11:18,480 Speaker 3: about here, the US is just ahead, especially in this 235 00:11:18,559 --> 00:11:20,360 Speaker 3: case when it comes to AI and Torsten. 236 00:11:20,440 --> 00:11:23,360 Speaker 5: I mean, you know, Ai, Tom and I were forcing 237 00:11:23,360 --> 00:11:27,200 Speaker 5: ourselves to learn AI, to adapt AI to our workflows. 238 00:11:27,559 --> 00:11:30,320 Speaker 5: The young people here, it's just part of their life. 239 00:11:30,720 --> 00:11:32,880 Speaker 5: How about the young people in Europe. Aren't they pushing 240 00:11:32,960 --> 00:11:36,720 Speaker 5: for change? Aren't they pushing for adaptation of new technologies? 241 00:11:37,520 --> 00:11:39,480 Speaker 3: I think they are, and that's also why there is 242 00:11:39,559 --> 00:11:44,199 Speaker 3: also an emerging venture capitul and small business and entrepreneur 243 00:11:44,880 --> 00:11:46,880 Speaker 3: ara industry in Europe. 244 00:11:47,040 --> 00:11:48,960 Speaker 4: But the issue is still that there's a lot of 245 00:11:49,080 --> 00:11:50,000 Speaker 4: visited interests. 246 00:11:50,200 --> 00:11:52,280 Speaker 3: There's a lot of balances between On the one hand, 247 00:11:52,280 --> 00:11:54,640 Speaker 3: we want a dynamic economy, but we don't want to 248 00:11:54,880 --> 00:11:57,680 Speaker 3: dismantle trade unions. We don't want to make all the 249 00:11:57,840 --> 00:12:00,480 Speaker 3: existing structures that we have, we don't want to dismanted 250 00:12:00,520 --> 00:12:03,560 Speaker 3: them completely. So that's why this transition to go from 251 00:12:03,679 --> 00:12:05,680 Speaker 3: the old world that Europe has been for a long 252 00:12:05,720 --> 00:12:08,000 Speaker 3: time to the new world where they can also contribute 253 00:12:08,120 --> 00:12:12,200 Speaker 3: with GDP growth, new technologies, new innovations in renewable energy. 254 00:12:12,280 --> 00:12:14,760 Speaker 3: They I ahead on a number of fronts, but broadly speaking, 255 00:12:14,800 --> 00:12:17,440 Speaker 3: you're right, it is indeed this which is the key issue. 256 00:12:17,600 --> 00:12:20,560 Speaker 2: Turch and slock Apollo of Global Management, thank you for 257 00:12:20,600 --> 00:12:24,840 Speaker 2: the correct conversation. Stay with us. More from Bloomberg Surveillance 258 00:12:24,920 --> 00:12:26,240 Speaker 2: coming up after this. 259 00:12:33,520 --> 00:12:37,080 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch US live 260 00:12:37,160 --> 00:12:40,280 Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on 261 00:12:40,400 --> 00:12:44,080 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 262 00:12:44,200 --> 00:12:45,720 Speaker 1: watch us live on YouTube. 263 00:12:45,760 --> 00:12:49,160 Speaker 2: This is beyond Time. Lindsay Newman steps in. Now she's 264 00:12:49,320 --> 00:12:53,400 Speaker 2: with Chathamhouse and we're told that she could join this morning. Lindsey, 265 00:12:53,400 --> 00:12:55,960 Speaker 2: what are you writing into the weekend giving the chaos 266 00:12:56,000 --> 00:12:56,440 Speaker 2: out there? 267 00:12:57,880 --> 00:12:59,960 Speaker 6: Yeah, thanks so much, Tom. I just have to plug 268 00:13:00,080 --> 00:13:02,520 Speaker 6: for England. We can't forget England harcane going for a 269 00:13:02,559 --> 00:13:04,360 Speaker 6: bellow and day or in the World Cup. It would 270 00:13:04,360 --> 00:13:07,240 Speaker 6: be really missing me not to raise that. So look, 271 00:13:08,760 --> 00:13:12,120 Speaker 6: there has been so much speculation and back and forth 272 00:13:12,200 --> 00:13:15,200 Speaker 6: about what's going on with the conflict in Iran. At 273 00:13:15,200 --> 00:13:17,440 Speaker 6: any given moment, it's hard to tell whether we're inching 274 00:13:17,520 --> 00:13:20,680 Speaker 6: forward towards a resolution of this conflict or actually, in fact, 275 00:13:20,720 --> 00:13:25,200 Speaker 6: we're inching backwards towards resumption of wider hostilities. We know 276 00:13:25,320 --> 00:13:28,680 Speaker 6: that President Trump and the US administration want the American 277 00:13:28,720 --> 00:13:31,680 Speaker 6: people and they want markets to feel as though there's 278 00:13:31,760 --> 00:13:34,400 Speaker 6: optimism that they're going to reach a deal. That this 279 00:13:34,520 --> 00:13:37,880 Speaker 6: memorandum of understanding that's been floating out there for a 280 00:13:37,960 --> 00:13:42,120 Speaker 6: couple of weeks now is actually nearly resolved. But this 281 00:13:42,160 --> 00:13:45,079 Speaker 6: is not a reality television show we are watching. This 282 00:13:45,240 --> 00:13:48,040 Speaker 6: is reality. While we all want to sort of stream 283 00:13:48,120 --> 00:13:50,600 Speaker 6: to the next episode where we find out what happens. 284 00:13:50,640 --> 00:13:53,640 Speaker 6: It's not the case that Trump can control all eventualities, 285 00:13:53,640 --> 00:13:56,400 Speaker 6: you know, he tweeted earlier, he posted earlier this week 286 00:13:56,600 --> 00:13:58,680 Speaker 6: that we should just sit back and relax and let 287 00:13:58,679 --> 00:14:01,840 Speaker 6: things resolve. They always do. But it's not that he 288 00:14:01,920 --> 00:14:05,120 Speaker 6: has control over everything. There are misalignments and mistrust that 289 00:14:05,240 --> 00:14:08,160 Speaker 6: runs rife between these parties and has been going that 290 00:14:08,240 --> 00:14:10,680 Speaker 6: way since all the way back to last year. So 291 00:14:11,080 --> 00:14:13,559 Speaker 6: I don't personally have a ton of optimism at this moment. 292 00:14:13,600 --> 00:14:17,200 Speaker 6: We know that Iron's form. Minister Ragi said that there 293 00:14:17,200 --> 00:14:21,640 Speaker 6: has basically been no further progress on negotiations and we 294 00:14:21,680 --> 00:14:23,960 Speaker 6: still have a lot of runway ahead of us before 295 00:14:24,000 --> 00:14:26,360 Speaker 6: we're going to actually see some sort of deal here. 296 00:14:27,160 --> 00:14:29,480 Speaker 5: Do we have a sense of kind of who on 297 00:14:29,520 --> 00:14:32,280 Speaker 5: the US side is kind of driving the conversation for 298 00:14:32,880 --> 00:14:35,560 Speaker 5: Is it the administration, is it the State Department, which 299 00:14:35,920 --> 00:14:37,840 Speaker 5: I think that's their job, or is it a couple 300 00:14:37,920 --> 00:14:40,880 Speaker 5: of lawyers from New York Well, Paul, I. 301 00:14:40,880 --> 00:14:43,520 Speaker 6: Mean, I think we always have to resort to mean 302 00:14:43,600 --> 00:14:46,280 Speaker 6: here that it is Donald Trump and the Donald Trump Show. 303 00:14:46,520 --> 00:14:49,040 Speaker 6: We of course saw a Secretary of State Marco Rivio 304 00:14:49,480 --> 00:14:53,520 Speaker 6: involved in testimony yesterday, and he is obviously driving the 305 00:14:53,560 --> 00:14:58,240 Speaker 6: state departments as emphasis and efforts in that way. But 306 00:14:58,440 --> 00:15:01,320 Speaker 6: in terms of the negotiations selves, we know that last 307 00:15:01,360 --> 00:15:04,720 Speaker 6: week Trump called his cabinet and said, I want to 308 00:15:04,760 --> 00:15:07,080 Speaker 6: review the deal that's on the table. I have some 309 00:15:07,160 --> 00:15:09,320 Speaker 6: further comments that I want to raise with the Iranian 310 00:15:09,360 --> 00:15:13,480 Speaker 6: delegation around Iran's nuclear program, around the Strait of Hormuse, 311 00:15:13,520 --> 00:15:17,000 Speaker 6: these major outstanding issues, and it seems as though neither 312 00:15:17,080 --> 00:15:19,720 Speaker 6: the US nor Iran are eager to be the first 313 00:15:19,760 --> 00:15:21,680 Speaker 6: one to raise their hand and say we will approve 314 00:15:21,720 --> 00:15:24,800 Speaker 6: this deal. And that's really where things stand. It is 315 00:15:24,840 --> 00:15:28,600 Speaker 6: this mistrust and miscalculation. The two sides have not agreed 316 00:15:28,680 --> 00:15:32,920 Speaker 6: upon these open issues, either the sort of near term 317 00:15:32,960 --> 00:15:34,960 Speaker 6: pressing ones like the straight of Hoe Moose, nor the 318 00:15:35,000 --> 00:15:38,160 Speaker 6: longer term ones that have been outstanding forever, like Aron's 319 00:15:38,240 --> 00:15:42,200 Speaker 6: nuclear program, what happens with its enriched uranium. And they 320 00:15:42,280 --> 00:15:44,560 Speaker 6: also don't even agree about whether they're willing to talk 321 00:15:44,600 --> 00:15:48,480 Speaker 6: about certain issues right hearing anymore about Iran's missile program. 322 00:15:48,680 --> 00:15:51,960 Speaker 6: Trump last week said that Gulf states need to sign 323 00:15:52,080 --> 00:15:54,480 Speaker 6: up to the Abraham Accords. That went over like a 324 00:15:54,560 --> 00:15:57,720 Speaker 6: lead balloon. So we are continuing to see that these 325 00:15:57,720 --> 00:16:00,880 Speaker 6: two sides are really talking past each other, even though 326 00:16:01,520 --> 00:16:03,800 Speaker 6: the market forces want there to be a deal, and 327 00:16:03,880 --> 00:16:06,760 Speaker 6: even though the administration wants market to believe that a 328 00:16:06,800 --> 00:16:07,600 Speaker 6: deal is impending. 329 00:16:09,480 --> 00:16:12,200 Speaker 2: I've been so waiting for you, Lindsey, to come on 330 00:16:12,280 --> 00:16:16,320 Speaker 2: at Chathamhouse in London, because the Telegraph in London a 331 00:16:16,400 --> 00:16:20,280 Speaker 2: number of days ago did an extraordinary article. This is 332 00:16:20,360 --> 00:16:25,200 Speaker 2: Conser Rabbi and Sai Goldcar talking about the two new 333 00:16:25,560 --> 00:16:31,240 Speaker 2: unknown leaders of the IRGC and within that without going 334 00:16:31,240 --> 00:16:35,440 Speaker 2: into this incredibly intense article about the new future of 335 00:16:35,480 --> 00:16:39,840 Speaker 2: the Iranian military. From where you sit, do you have 336 00:16:40,480 --> 00:16:44,360 Speaker 2: a knowledge base of the new leadership of the IRGC. 337 00:16:46,000 --> 00:16:47,920 Speaker 6: Yeah, I mean what we know, Tom, I mean, obviously 338 00:16:47,920 --> 00:16:51,640 Speaker 6: I should say caveat that. Sunanvakil at Chathamhouse is our 339 00:16:51,720 --> 00:16:54,280 Speaker 6: lead expert on Iran and she's best positioned to talk 340 00:16:54,320 --> 00:16:56,640 Speaker 6: about that. But what we do know is that Auran 341 00:16:56,760 --> 00:16:59,440 Speaker 6: took away a lot of lessons learned from last year's 342 00:16:59,520 --> 00:17:03,520 Speaker 6: June operation against it, also led by Israel and the 343 00:17:03,640 --> 00:17:06,840 Speaker 6: US and quickly and sort of look to do a 344 00:17:06,960 --> 00:17:11,080 Speaker 6: very intensive post mortem and reorganized various components, including the ERGCY, 345 00:17:11,080 --> 00:17:14,760 Speaker 6: including its military capabilities, including its leadership structure and plans 346 00:17:14,760 --> 00:17:17,919 Speaker 6: going forward. And we've seen that in action over the 347 00:17:18,000 --> 00:17:21,640 Speaker 6: course of Operation Epic Fury. Right. So, the fact that 348 00:17:21,880 --> 00:17:24,880 Speaker 6: the US has pursued all of this degradation on Iran's 349 00:17:24,920 --> 00:17:28,720 Speaker 6: missile capabilities, perhaps some of its nuclear capabilities, its naval 350 00:17:28,760 --> 00:17:33,479 Speaker 6: capabilities has not necessarily translated, as we know, into Iran 351 00:17:33,560 --> 00:17:37,720 Speaker 6: being overall degraded. The regime remains very much intact, although 352 00:17:38,240 --> 00:17:40,440 Speaker 6: what we know is it's been sort of more diversified, 353 00:17:40,480 --> 00:17:43,640 Speaker 6: dispersed across the country. It's sort of in a moret 354 00:17:43,680 --> 00:17:47,920 Speaker 6: of guerrilla style approach. It has also been maybe perhaps 355 00:17:48,280 --> 00:17:52,880 Speaker 6: de emphasizing some of the more ideological components instead of 356 00:17:52,920 --> 00:17:56,840 Speaker 6: pursuing this new leadership structure pursues more of sort of 357 00:17:56,960 --> 00:18:00,440 Speaker 6: nationalistic approach to leadership. And what that means is Iran 358 00:18:00,480 --> 00:18:04,280 Speaker 6: has been able to develop and pursue very intensive tools 359 00:18:04,280 --> 00:18:08,240 Speaker 6: of leverage, including over the Strait of Hormuz, which sort 360 00:18:08,240 --> 00:18:10,680 Speaker 6: of is its new tool going forward beyond even its 361 00:18:10,720 --> 00:18:14,399 Speaker 6: new capabilities, even as we think that perhaps rob Is 362 00:18:14,440 --> 00:18:16,480 Speaker 6: didn't continue to pursue its nuclear program. 363 00:18:16,640 --> 00:18:18,960 Speaker 2: Just one more quick questions. We've got confabs, we got 364 00:18:19,200 --> 00:18:23,280 Speaker 2: I think Paul NATO's in Turkey. Yeah, there's G sevens 365 00:18:24,600 --> 00:18:28,879 Speaker 2: give us Lindsey an allied update in their relationship, the 366 00:18:29,119 --> 00:18:33,760 Speaker 2: traditional allies relationship with the President of the United States. 367 00:18:34,720 --> 00:18:36,600 Speaker 6: Yeah, so we know that Trump has said that he 368 00:18:36,800 --> 00:18:40,320 Speaker 6: is going to the G seven meetings in just a 369 00:18:40,359 --> 00:18:43,199 Speaker 6: couple weeks time. It will be an interesting dance that 370 00:18:43,200 --> 00:18:45,159 Speaker 6: we're going to be watching. We know, of course that 371 00:18:45,240 --> 00:18:48,760 Speaker 6: the relationships there have been strained. There hasn't actually been 372 00:18:48,840 --> 00:18:54,160 Speaker 6: a lot of sort of news breaking public facing conversations 373 00:18:54,200 --> 00:18:56,960 Speaker 6: between the sides of late. It's all sort of been 374 00:18:57,040 --> 00:18:59,960 Speaker 6: mostly back channeling. But there is tension there that has 375 00:19:00,119 --> 00:19:04,479 Speaker 6: not been resolved. It's interestingly enough, we see today that 376 00:19:04,520 --> 00:19:08,040 Speaker 6: the UK, Germany and France are talking about developing their 377 00:19:08,040 --> 00:19:11,960 Speaker 6: own track to conversations with Puchin about resolving the war 378 00:19:12,119 --> 00:19:15,040 Speaker 6: with Ukraine. That just shows that Europe is getting the 379 00:19:15,040 --> 00:19:17,760 Speaker 6: message that the US is not going to be participating 380 00:19:17,760 --> 00:19:20,880 Speaker 6: in the same way that has always been historically participating. 381 00:19:20,920 --> 00:19:23,360 Speaker 6: Since the post Cold War period and that facts are 382 00:19:23,520 --> 00:19:26,399 Speaker 6: moving on. And that doesn't mean that Europe is willing 383 00:19:26,440 --> 00:19:31,320 Speaker 6: to jump into supporting Trump and the US administration in Iran, 384 00:19:32,080 --> 00:19:34,639 Speaker 6: but it does mean that we should be watching us 385 00:19:34,760 --> 00:19:36,840 Speaker 6: very closely to see how this dance plays out. 386 00:19:37,080 --> 00:19:39,760 Speaker 2: Lindsey, thank you so much. Lindzie Newman with Chathamhouse, stay 387 00:19:39,800 --> 00:19:43,680 Speaker 2: with us. More from Bloomberg Surveillance coming up after this. 388 00:19:50,920 --> 00:19:54,520 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch US Live 389 00:19:54,560 --> 00:19:58,080 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple, 390 00:19:58,119 --> 00:20:01,480 Speaker 1: Karplay and Android Otto with the work Business up, or 391 00:20:01,640 --> 00:20:03,040 Speaker 1: watch US live on YouTube. 392 00:20:03,240 --> 00:20:08,439 Speaker 2: Juliet Cornado joins US right now, hugely competent, definitive in 393 00:20:08,480 --> 00:20:13,880 Speaker 2: the crisis at BMP. Perry about Julia link tomorrow's jobs 394 00:20:13,960 --> 00:20:18,600 Speaker 2: report to how the newly minted chairman will think. 395 00:20:20,720 --> 00:20:23,280 Speaker 7: Yeah, I mean, before I go there, tom I just 396 00:20:23,359 --> 00:20:27,919 Speaker 7: want to say Ghostpurs go. I will be at the 397 00:20:27,960 --> 00:20:32,640 Speaker 7: game tomorrow, So season ticket holder. 398 00:20:33,359 --> 00:20:35,400 Speaker 2: Which color shirt are you're gonna wear? 399 00:20:36,000 --> 00:20:40,240 Speaker 7: I mean, well, the Fiesta colors are only for game one, 400 00:20:40,440 --> 00:20:43,240 Speaker 7: So if you've been paying attention to the Spurs, every 401 00:20:43,320 --> 00:20:47,240 Speaker 7: game one features the Fiesta colors. I know that the 402 00:20:47,280 --> 00:20:49,840 Speaker 7: Knicks fans were struggling with that last. 403 00:20:49,680 --> 00:20:50,200 Speaker 2: Night, but. 404 00:20:51,760 --> 00:20:57,480 Speaker 7: We proudly fly our Fiesta flag. So but tomorrow night 405 00:20:57,480 --> 00:20:58,720 Speaker 7: they will be black T shirts. 406 00:21:00,880 --> 00:21:01,280 Speaker 2: Juliett. 407 00:21:01,600 --> 00:21:04,680 Speaker 5: We're going to get some important jobs numbers tomorrow. Give 408 00:21:04,720 --> 00:21:07,080 Speaker 5: us your thoughts. What are you looking for tomorrow and 409 00:21:07,119 --> 00:21:09,360 Speaker 5: what's your view of this labor market here? 410 00:21:10,240 --> 00:21:13,240 Speaker 7: So there's a lot of conflicting signals in this labor market. 411 00:21:13,280 --> 00:21:15,080 Speaker 7: I mean, one thing I think we can say is 412 00:21:15,119 --> 00:21:18,280 Speaker 7: that we've left labor hoarding behind us, so we get 413 00:21:18,400 --> 00:21:23,920 Speaker 7: things that are send mixed signals like pretty elevated challenger 414 00:21:24,000 --> 00:21:28,280 Speaker 7: layoff announcements, lots of layoffs in tech, and yet you 415 00:21:28,400 --> 00:21:32,840 Speaker 7: still see a low unemployment rate and some okay jobs numbers. 416 00:21:32,880 --> 00:21:36,840 Speaker 7: So you know, I think we see more chern there's 417 00:21:36,880 --> 00:21:42,080 Speaker 7: more hiring, more firing. It is a low amplitude labor market. 418 00:21:42,160 --> 00:21:46,000 Speaker 7: The break even rate of labor supply is probably close 419 00:21:46,040 --> 00:21:48,520 Speaker 7: to zero, somewhere between zero and fifty thousand, So we 420 00:21:48,560 --> 00:21:50,960 Speaker 7: don't really need to create a lot of jobs to 421 00:21:51,000 --> 00:21:56,120 Speaker 7: keep the unemployment rate steady. There isn't, you know, inflationary 422 00:21:56,160 --> 00:22:00,000 Speaker 7: pressures coming from the labor market. They're coming from elsewhere. 423 00:22:00,080 --> 00:22:02,560 Speaker 7: Real and they are persistent, but they are not being 424 00:22:02,640 --> 00:22:03,960 Speaker 7: generated by wage growth. 425 00:22:04,040 --> 00:22:06,600 Speaker 2: I help us. This is so important. I think of 426 00:22:07,600 --> 00:22:10,439 Speaker 2: there's a school, Julia called Texas A and M. I 427 00:22:10,480 --> 00:22:12,840 Speaker 2: think you maybe familiar with. I think a time as 428 00:22:12,840 --> 00:22:18,840 Speaker 2: savings work down there in others. So you say, statistically 429 00:22:18,880 --> 00:22:22,199 Speaker 2: we're sub one hundred thousand non farm payrolls, and I 430 00:22:22,240 --> 00:22:28,560 Speaker 2: get mathematically, that's like cute to our audience. It's not cute. No, 431 00:22:29,000 --> 00:22:33,760 Speaker 2: it's one hundred and fifty. Politically, it's sub hundred thousand 432 00:22:33,800 --> 00:22:38,440 Speaker 2: non farm payrolls. Acceptable for the president or for the chairman. 433 00:22:39,840 --> 00:22:41,800 Speaker 7: Well, it's a great question, Tom, I mean, it is 434 00:22:41,840 --> 00:22:45,160 Speaker 7: a new environment. It is an environment that comes from 435 00:22:45,200 --> 00:22:49,480 Speaker 7: two big factors. One is an aging population. The boomers 436 00:22:49,520 --> 00:22:53,399 Speaker 7: are moving into retirement in great numbers. It is a 437 00:22:53,600 --> 00:22:56,600 Speaker 7: drag on labor force participation. It is a drag on 438 00:22:56,680 --> 00:23:00,240 Speaker 7: labor supply. And if anything, the booming stock market is 439 00:23:00,280 --> 00:23:05,439 Speaker 7: facilitating earlier retirements, so that's depressing labor supply. And then, 440 00:23:05,480 --> 00:23:09,520 Speaker 7: of course the other big factor is immigration. The US 441 00:23:09,640 --> 00:23:13,280 Speaker 7: has been for decades a country that grants about a 442 00:23:13,400 --> 00:23:19,720 Speaker 7: million people legal immigration status every year. That has dropped precipitously. 443 00:23:20,240 --> 00:23:24,520 Speaker 7: That's a policy choice, and that means fewer workers, fewer jobs. 444 00:23:24,920 --> 00:23:28,879 Speaker 7: It does mean less income generation in the economy. And 445 00:23:28,960 --> 00:23:33,480 Speaker 7: here's where we get to this strange market, strange economy 446 00:23:33,480 --> 00:23:38,760 Speaker 7: that we are in, where it's increasingly narrowly concentrated in 447 00:23:38,920 --> 00:23:42,800 Speaker 7: GDP and investment on AI, in the labor market, on 448 00:23:42,920 --> 00:23:47,520 Speaker 7: healthcare jobs, and really outside those sectors, there's not a 449 00:23:47,560 --> 00:23:52,159 Speaker 7: lot of dynamism going on, and there's a lot of 450 00:23:52,200 --> 00:23:56,760 Speaker 7: frictions and supply shocks that sectors and firms have to 451 00:23:56,800 --> 00:23:59,680 Speaker 7: deal with. So it's not an economy that you look 452 00:23:59,720 --> 00:24:02,119 Speaker 7: at it and say, wow, this is fantastic, and you 453 00:24:02,200 --> 00:24:05,480 Speaker 7: see that in pretty sour consumer sentiment. So is it 454 00:24:05,520 --> 00:24:10,000 Speaker 7: good enough? You know, it's it's a different environment. It 455 00:24:10,040 --> 00:24:12,920 Speaker 7: doesn't feel great in a lot of ways, even though 456 00:24:13,119 --> 00:24:16,000 Speaker 7: it's stable in the aggregate. 457 00:24:16,920 --> 00:24:20,560 Speaker 5: So, Julia, the other aspects of this economy that the 458 00:24:20,560 --> 00:24:23,480 Speaker 5: FED is focusing on is inflation, and this warn Iran 459 00:24:23,520 --> 00:24:27,960 Speaker 5: has really kicked up energy costs for everyone. Yes, yes, 460 00:24:28,080 --> 00:24:28,919 Speaker 5: how do you think about that? 461 00:24:30,040 --> 00:24:33,639 Speaker 7: Well, we're going to get inflation data next week for 462 00:24:33,720 --> 00:24:36,399 Speaker 7: May and it's going to show, you know, yet another 463 00:24:36,480 --> 00:24:41,600 Speaker 7: burst of energy inflation and yet another acceleration in headline inflation, 464 00:24:42,280 --> 00:24:45,840 Speaker 7: And what we know as macro economists is that when 465 00:24:45,840 --> 00:24:49,320 Speaker 7: you get hit with a supply shock, the inflation comes 466 00:24:49,359 --> 00:24:53,359 Speaker 7: first and then comes the hit to demand. And so 467 00:24:53,560 --> 00:24:56,080 Speaker 7: this is where I think we're seeing caution at the FED. 468 00:24:56,440 --> 00:24:57,960 Speaker 2: In On the one. 469 00:24:57,800 --> 00:25:02,480 Speaker 7: Hand, you've got a veryasonable judgment that, look, inflation's been 470 00:25:02,480 --> 00:25:04,880 Speaker 7: too high for too long, it's going in the wrong direction. 471 00:25:05,000 --> 00:25:07,159 Speaker 7: We need to we may need to do something about it. 472 00:25:07,680 --> 00:25:10,439 Speaker 7: On the other hand, if you know your macro you 473 00:25:10,520 --> 00:25:13,000 Speaker 7: know that there's a demand hit that's very likely going 474 00:25:13,040 --> 00:25:15,040 Speaker 7: to commolate Q two, Q three. 475 00:25:15,880 --> 00:25:16,000 Speaker 1: Uh. 476 00:25:16,400 --> 00:25:20,440 Speaker 7: The real disposable income growth is negative. Consumers are losing 477 00:25:20,520 --> 00:25:24,199 Speaker 7: purchasing power. They are having to dip deeper and deeper 478 00:25:24,200 --> 00:25:27,919 Speaker 7: into savings to finance spending. There's probably going to be 479 00:25:27,960 --> 00:25:31,680 Speaker 7: at least some moderation in that pace of spending as 480 00:25:31,720 --> 00:25:35,199 Speaker 7: the year progresses. The tax cuts will be fading and 481 00:25:35,480 --> 00:25:37,040 Speaker 7: consumers are going to be squeezed. 482 00:25:37,720 --> 00:25:41,280 Speaker 2: I mean, Julia, I look at where we are, and 483 00:25:41,320 --> 00:25:43,840 Speaker 2: I get this feeling. No one's talking about the FED. 484 00:25:44,680 --> 00:25:46,800 Speaker 2: Are you Are we going to get a ce change 485 00:25:46,840 --> 00:25:50,919 Speaker 2: to labor day on how the FED communicates with the world. 486 00:25:51,680 --> 00:25:53,880 Speaker 7: Yeah, I think so, Tom. I think. I think when 487 00:25:53,920 --> 00:25:58,560 Speaker 7: we hear Chair worsh talk about regime change, when we 488 00:25:58,680 --> 00:26:03,240 Speaker 7: hear him, you know, talk about reform, when he brings 489 00:26:03,280 --> 00:26:09,040 Speaker 7: in senior outside advisors who have written the chapter in 490 00:26:09,240 --> 00:26:13,160 Speaker 7: Project twenty twenty five on FED reform, you should expect 491 00:26:13,240 --> 00:26:16,240 Speaker 7: him to at least put his money where his mouth 492 00:26:16,920 --> 00:26:19,080 Speaker 7: is to some degree, you know this is not just 493 00:26:19,200 --> 00:26:21,119 Speaker 7: blustered ju He wants to change things. 494 00:26:21,200 --> 00:26:25,160 Speaker 2: Julie Rivet script we gotta go. Spike from the fanciest 495 00:26:25,200 --> 00:26:29,920 Speaker 2: hotel in San Antonio just emailed in Tom Love the Show. 496 00:26:30,359 --> 00:26:33,320 Speaker 2: Does Julie have a ticket for me tomorrow? Can you 497 00:26:33,400 --> 00:26:36,720 Speaker 2: help them? Let's spike in some thousand a night hotel 498 00:26:36,800 --> 00:26:38,199 Speaker 2: and sends in Antonio. 499 00:26:40,400 --> 00:26:43,359 Speaker 7: I have no extra tickets to provide anybody. 500 00:26:43,400 --> 00:26:45,400 Speaker 8: I have two for me and my son. 501 00:26:45,480 --> 00:26:47,399 Speaker 2: We will be going to the game together. Shay on 502 00:26:47,520 --> 00:26:50,320 Speaker 2: the Spike. Thank you so much. Course, Spike Lee definitive 503 00:26:50,359 --> 00:26:53,919 Speaker 2: for the next Juliet Carnado, the Spike Lee of the 504 00:26:54,000 --> 00:26:59,320 Speaker 2: San Antonio Spurs. Stay with us. More from Bloomberg Surveillance 505 00:26:59,400 --> 00:27:00,639 Speaker 2: coming up after this. 506 00:27:08,000 --> 00:27:11,560 Speaker 1: You're listening to the Bloomberg Surveillance podcast Catch us Live 507 00:27:11,640 --> 00:27:14,800 Speaker 1: weekday afternoons from seven to ten am Eastern, listen on 508 00:27:14,880 --> 00:27:18,560 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 509 00:27:18,680 --> 00:27:20,200 Speaker 1: watch us live on YouTube. 510 00:27:20,240 --> 00:27:23,520 Speaker 2: So here's the way it works. Usually one person transforms 511 00:27:23,560 --> 00:27:27,399 Speaker 2: a university, and I have the clearest memory of Indiana 512 00:27:27,520 --> 00:27:31,840 Speaker 2: University being a complete backwater. Purdue rocking it I mean, 513 00:27:31,880 --> 00:27:36,760 Speaker 2: Paul Purdue was rocking it in. Herman Wells single handedly 514 00:27:36,880 --> 00:27:40,639 Speaker 2: turned around Indiana University. One of the beneficiaries is the 515 00:27:40,680 --> 00:27:44,240 Speaker 2: Wells scholar from IU, Rebecca home Kiss, who has gone 516 00:27:44,240 --> 00:27:48,679 Speaker 2: on to absolutely sterling academics at the London Business School 517 00:27:48,880 --> 00:27:52,320 Speaker 2: and wandering by Duke University from time to time. She 518 00:27:52,400 --> 00:27:56,160 Speaker 2: joins us this morning on our growth economics. Is our 519 00:27:56,200 --> 00:28:00,399 Speaker 2: growth model now original? Or is AI a bull done 520 00:28:00,840 --> 00:28:04,040 Speaker 2: to everything we've seen? You know from Herman Wells on 521 00:28:04,240 --> 00:28:05,760 Speaker 2: is it just another growth story? 522 00:28:06,200 --> 00:28:09,600 Speaker 9: AI is a different growth story, but it is changing 523 00:28:09,600 --> 00:28:11,920 Speaker 9: some of the math about how we think about investment 524 00:28:11,960 --> 00:28:15,960 Speaker 9: returns inside organizations. But it is still very very early days. 525 00:28:16,560 --> 00:28:19,640 Speaker 9: The majority of organizations that are bringing AI in are 526 00:28:19,680 --> 00:28:22,119 Speaker 9: not really seeing growth gains. They're seeing a bit of 527 00:28:22,119 --> 00:28:25,520 Speaker 9: productivity or cost reduction, but we're not really seeing a 528 00:28:25,560 --> 00:28:27,919 Speaker 9: lot of the use case that are generating detrimental revenue 529 00:28:28,000 --> 00:28:30,760 Speaker 9: or value creation for organizations. Again, we're early days, but 530 00:28:31,240 --> 00:28:32,720 Speaker 9: you know, the last couple of months are showing a 531 00:28:32,760 --> 00:28:34,679 Speaker 9: little bit more doubt about how much these investments are 532 00:28:34,680 --> 00:28:35,960 Speaker 9: going to translate into returns. 533 00:28:36,320 --> 00:28:38,280 Speaker 5: So when you talk to your C suite of clients, 534 00:28:39,040 --> 00:28:41,680 Speaker 5: are they looking to embrace AI? Are they still in 535 00:28:41,680 --> 00:28:44,120 Speaker 5: a stage of what is AI? And is it a friend? 536 00:28:44,160 --> 00:28:44,720 Speaker 7: Me to me? 537 00:28:45,000 --> 00:28:45,760 Speaker 8: How do I think about it? 538 00:28:45,760 --> 00:28:46,840 Speaker 5: What's the conversation you're having? 539 00:28:46,880 --> 00:28:48,720 Speaker 9: So I love this question because there's been a transition. 540 00:28:48,880 --> 00:28:50,960 Speaker 9: So we went from kind of twenty twenty three, I'd 541 00:28:50,960 --> 00:28:54,320 Speaker 9: say it was doubting. CEOs did not want to jump 542 00:28:54,360 --> 00:28:56,520 Speaker 9: on another trend that was not going to pan out. 543 00:28:56,920 --> 00:29:00,200 Speaker 9: Then we went into dabbling right use cases, throwing called 544 00:29:00,240 --> 00:29:03,640 Speaker 9: pilot licenses at people. We are very slowly transitioning into 545 00:29:03,640 --> 00:29:06,800 Speaker 9: what I call deliberate actually bringing AI into strategy, but 546 00:29:07,000 --> 00:29:09,880 Speaker 9: relatively early days, the majority of companies are still dabbling. 547 00:29:09,960 --> 00:29:13,320 Speaker 9: So while AI adoption is very high, it is incredibly shallow. 548 00:29:13,640 --> 00:29:15,520 Speaker 9: You now only kind of ten to fifteen percent of 549 00:29:15,560 --> 00:29:17,960 Speaker 9: business work is being done in any form with AI, 550 00:29:18,040 --> 00:29:20,280 Speaker 9: and any kind of cross team, cross functional use cases 551 00:29:20,280 --> 00:29:22,000 Speaker 9: are relatively small. 552 00:29:22,160 --> 00:29:24,160 Speaker 5: What is the as we step back here and think 553 00:29:24,160 --> 00:29:26,120 Speaker 5: about some of all the economic data we've been getting 554 00:29:26,120 --> 00:29:27,960 Speaker 5: over the last several weeks, and including this week, we'll 555 00:29:27,960 --> 00:29:31,000 Speaker 5: get some more on the labor front here. What's the 556 00:29:31,040 --> 00:29:34,280 Speaker 5: conversations you're having today with your clients about the economy? 557 00:29:34,280 --> 00:29:36,239 Speaker 5: What are you hearing? What's the conversation now? 558 00:29:36,280 --> 00:29:38,880 Speaker 9: It's funny is that the market gets bored of topics 559 00:29:38,960 --> 00:29:40,440 Speaker 9: when it goes on too long. You know, we're kind 560 00:29:40,440 --> 00:29:41,840 Speaker 9: of a board of the IRN war, We're a board 561 00:29:41,840 --> 00:29:44,480 Speaker 9: of the k shaped economy. CEOs don't have the luxury 562 00:29:44,520 --> 00:29:46,880 Speaker 9: of getting bored. Just because a trend has been going 563 00:29:46,880 --> 00:29:48,440 Speaker 9: on for a couple of months doesn't mean that. 564 00:29:48,400 --> 00:29:49,320 Speaker 8: It affects strategy. 565 00:29:49,800 --> 00:29:51,680 Speaker 9: So I'd say, look, we're looking at the IRN War, 566 00:29:51,920 --> 00:29:54,480 Speaker 9: we are looking at the economy, especially the lower end, 567 00:29:54,560 --> 00:29:57,120 Speaker 9: and tariffs are back in play as of yesterday. And 568 00:29:57,160 --> 00:29:59,200 Speaker 9: again we might be tired of talking about terrorifts, but 569 00:29:59,240 --> 00:30:01,480 Speaker 9: they're real economic in cap and companies trying to make 570 00:30:01,520 --> 00:30:02,440 Speaker 9: some of these decisions. 571 00:30:02,720 --> 00:30:06,880 Speaker 2: The Pennsylvania Railroad was religion in my family, arking across 572 00:30:06,920 --> 00:30:10,240 Speaker 2: to Chicago. I mean, it's what came out of the 573 00:30:10,320 --> 00:30:14,240 Speaker 2: three tobaccles of railroads going back to eighteen ninety the 574 00:30:14,400 --> 00:30:17,640 Speaker 2: analog to the railroads in AI. Where are we in 575 00:30:17,640 --> 00:30:18,880 Speaker 2: that path right now? 576 00:30:19,560 --> 00:30:22,880 Speaker 9: Very early days? The difference is eighteen ninety ish. The 577 00:30:22,960 --> 00:30:25,520 Speaker 9: difference is tom when we laid some of the early 578 00:30:25,600 --> 00:30:28,680 Speaker 9: railroads or the kind of the cable infrastructure in the nineties, 579 00:30:28,720 --> 00:30:31,040 Speaker 9: there was nothing really going on them or through them 580 00:30:31,080 --> 00:30:34,160 Speaker 9: in the early days. We do not have a demand 581 00:30:34,200 --> 00:30:36,360 Speaker 9: issue right now like this is very much. We are 582 00:30:36,400 --> 00:30:39,400 Speaker 9: still lower supply than we have demand. So demand is high. 583 00:30:39,400 --> 00:30:41,200 Speaker 9: It is increasing at a nonlinear rate and it will 584 00:30:41,240 --> 00:30:43,880 Speaker 9: continue to but we are going to see a very 585 00:30:44,000 --> 00:30:46,200 Speaker 9: volatile market when it comes to AI. We're seeing a 586 00:30:46,240 --> 00:30:48,600 Speaker 9: shock the last couple of weeks because a lot of 587 00:30:48,640 --> 00:30:50,760 Speaker 9: the vendors are changing how they're pricing, which is why 588 00:30:50,800 --> 00:30:52,960 Speaker 9: compute cost and token max and all of those. 589 00:30:52,800 --> 00:30:54,320 Speaker 8: Things are coming into the conversation and. 590 00:30:54,440 --> 00:30:57,160 Speaker 2: Bro listening to people like you, do you feel like 591 00:30:57,200 --> 00:31:00,200 Speaker 2: they're in a vacuum and their earnestness and their eight 592 00:31:00,240 --> 00:31:04,240 Speaker 2: dollars on the West Coast? Are they actually listening to 593 00:31:04,320 --> 00:31:07,800 Speaker 2: bring Jolson or hummus about what's actually going on? 594 00:31:08,120 --> 00:31:11,320 Speaker 9: You know, if you look at the differences between the 595 00:31:11,360 --> 00:31:14,600 Speaker 9: impact that both economists, academics, and tech firms think that 596 00:31:14,640 --> 00:31:17,200 Speaker 9: AI will have on productivity. The range is between point 597 00:31:17,200 --> 00:31:19,560 Speaker 9: one percent and eighty percent. Like that is one hundreds 598 00:31:19,560 --> 00:31:22,120 Speaker 9: of order magnitude difference, Like we will eventually need to 599 00:31:22,200 --> 00:31:24,920 Speaker 9: ladder out somewhere. It'll be higher than we've seen another 600 00:31:24,960 --> 00:31:27,800 Speaker 9: tech booms. But at this point, I think we're dramatically 601 00:31:27,880 --> 00:31:30,880 Speaker 9: overestimating the near to short term impact that AI will 602 00:31:30,880 --> 00:31:31,840 Speaker 9: have on productivity. 603 00:31:32,160 --> 00:31:35,640 Speaker 5: Well, because I mean that's probably that's a non consensus view, 604 00:31:35,800 --> 00:31:37,760 Speaker 5: I would argue because I think most people that come 605 00:31:37,760 --> 00:31:39,120 Speaker 5: into the studio with Tom and. 606 00:31:39,080 --> 00:31:40,360 Speaker 2: I suggest that. 607 00:31:40,920 --> 00:31:43,560 Speaker 5: I mean, you got electricity at the top of the compendium, 608 00:31:43,880 --> 00:31:45,040 Speaker 5: and right below. 609 00:31:44,760 --> 00:31:45,520 Speaker 4: That is AI. 610 00:31:46,120 --> 00:31:48,680 Speaker 5: Well below that is the Internet. That's kind of where 611 00:31:48,720 --> 00:31:50,280 Speaker 5: people kind of weigh this thing because. 612 00:31:50,080 --> 00:31:52,160 Speaker 9: Adoption was so much higher. You know, we reach fifty 613 00:31:52,200 --> 00:31:54,440 Speaker 9: percent of global adoption in three years. The Internet was 614 00:31:54,480 --> 00:31:58,200 Speaker 9: seven to ten. The difference is what is happening inside organizations. 615 00:31:58,240 --> 00:32:00,000 Speaker 9: It is very I don't want to say easy, because 616 00:32:00,120 --> 00:32:03,280 Speaker 9: nothing's easy, but it is very approachable to get productivity 617 00:32:03,280 --> 00:32:06,280 Speaker 9: booms at a team or function level. So engineering team 618 00:32:06,320 --> 00:32:09,280 Speaker 9: at scale thirty percent, productivity, customer service support thirty to 619 00:32:09,280 --> 00:32:12,320 Speaker 9: fifty cent productivity. What we do not have is cross team, 620 00:32:12,440 --> 00:32:15,800 Speaker 9: cross functional, organizational wide productivity, which is something you will 621 00:32:15,800 --> 00:32:18,680 Speaker 9: see as an external. And the reason is getting those 622 00:32:18,760 --> 00:32:21,280 Speaker 9: kind of gains does not take throwing AI on top 623 00:32:21,320 --> 00:32:24,520 Speaker 9: of work. It takes actually redesigning workflows, and that is 624 00:32:24,600 --> 00:32:27,360 Speaker 9: really hard work that takes time. So we'll get there 625 00:32:27,480 --> 00:32:30,600 Speaker 9: maybe slash probably, but short to near term we are 626 00:32:30,640 --> 00:32:31,640 Speaker 9: looking at change. 627 00:32:32,040 --> 00:32:34,600 Speaker 2: Paul's too polite, so I'm going to ask Seed blunt, 628 00:32:34,720 --> 00:32:39,959 Speaker 2: it's just another corporate education program. Polonio's fuqua the future 629 00:32:40,000 --> 00:32:44,120 Speaker 2: of leadership. Now, what's the distinction about duke corporate education 630 00:32:44,720 --> 00:32:47,920 Speaker 2: versus another soiree to look buff and beautiful. 631 00:32:48,720 --> 00:32:51,200 Speaker 9: I think all forms of corporate education, whether it's lend 632 00:32:51,200 --> 00:32:53,120 Speaker 9: of a business school, are duke. We are trying to 633 00:32:53,160 --> 00:32:56,479 Speaker 9: help deliver impact and value creation and really understanding not 634 00:32:56,560 --> 00:32:58,520 Speaker 9: just the topics, but how they can practically apply it 635 00:32:58,560 --> 00:32:59,640 Speaker 9: inside their day to day work. 636 00:33:00,120 --> 00:33:03,040 Speaker 8: Can do math all the time, This is cool. 637 00:33:03,160 --> 00:33:05,440 Speaker 9: Get get I get when I put up charts, I 638 00:33:05,440 --> 00:33:07,360 Speaker 9: always ca it and it's going to be a chart if. 639 00:33:07,240 --> 00:33:10,800 Speaker 2: You do corporate education. To sponsor me my first sponsor. 640 00:33:10,920 --> 00:33:13,880 Speaker 2: The first people that said the idiot with the bow tie. 641 00:33:14,000 --> 00:33:17,000 Speaker 2: Let's throw money at them. Stern School of Business, n 642 00:33:17,120 --> 00:33:20,960 Speaker 2: y U and one of the students showed me their math. Paul, 643 00:33:21,760 --> 00:33:24,680 Speaker 2: it was like, are you kidding me? That's the energy 644 00:33:24,720 --> 00:33:25,720 Speaker 2: that's in these programs. 645 00:33:25,920 --> 00:33:27,840 Speaker 8: Math still matters, Tom, Math still matters. 646 00:33:28,360 --> 00:33:31,760 Speaker 5: She can come back size exactly exactly how do you 647 00:33:31,800 --> 00:33:34,600 Speaker 5: put how do you put AI into the curriculum here? 648 00:33:34,600 --> 00:33:37,040 Speaker 4: Because I would think that would be a question. 649 00:33:37,160 --> 00:33:40,200 Speaker 5: I'm anybody north of twenty eight, twenty nine years old. 650 00:33:40,480 --> 00:33:42,120 Speaker 4: I need to be educated on AI. 651 00:33:42,640 --> 00:33:44,160 Speaker 8: So there is plenty of education. 652 00:33:44,240 --> 00:33:46,200 Speaker 9: I look at the vendor front as well on what 653 00:33:46,240 --> 00:33:49,600 Speaker 9: we call hands on keyboard education, and that's fine, but 654 00:33:49,680 --> 00:33:52,120 Speaker 9: that's not what leadership teams need. Leadership teams need to 655 00:33:52,120 --> 00:33:55,680 Speaker 9: actually understand how do I retrain my teams? How do 656 00:33:55,760 --> 00:33:58,400 Speaker 9: I hold people accountable for AI? And not to kind 657 00:33:58,400 --> 00:34:00,959 Speaker 9: of overwhelm on jargon, but most companies are great at 658 00:34:01,000 --> 00:34:03,680 Speaker 9: tracking the outputs of AI. How many use cases are 659 00:34:03,680 --> 00:34:06,240 Speaker 9: in play, how many people have licenses, how many tokens 660 00:34:06,280 --> 00:34:10,080 Speaker 9: are used. Organizations get nothing from those output measures. What 661 00:34:10,120 --> 00:34:12,880 Speaker 9: we really need is kind of this organization why, leadership, 662 00:34:12,880 --> 00:34:15,280 Speaker 9: why training, and how to deliver outcomes from AI versus 663 00:34:15,280 --> 00:34:15,960 Speaker 9: just outputs. 664 00:34:16,239 --> 00:34:17,719 Speaker 2: How about the ethics of AI? 665 00:34:17,920 --> 00:34:21,360 Speaker 5: I mean I speaking to the malts and consulting recently 666 00:34:21,400 --> 00:34:23,120 Speaker 5: and they say, before they engage with a client who 667 00:34:23,200 --> 00:34:26,240 Speaker 5: wants to quote unquote implement AI into their business model, 668 00:34:26,480 --> 00:34:28,279 Speaker 5: they want to get buy off at the c suite 669 00:34:28,400 --> 00:34:32,200 Speaker 5: level and the board level on ethical implementation of AI. 670 00:34:32,239 --> 00:34:33,239 Speaker 5: How does that figure into it? 671 00:34:33,560 --> 00:34:34,319 Speaker 8: Absolutely does. 672 00:34:34,360 --> 00:34:36,880 Speaker 9: And for full disclosure of an advisor at BCG as well, 673 00:34:37,000 --> 00:34:38,920 Speaker 9: is that if you think about the first of all, 674 00:34:38,960 --> 00:34:41,440 Speaker 9: it's much not a senior leadership thing as well, younger 675 00:34:41,440 --> 00:34:44,200 Speaker 9: employees are very very concerned about the ethical use as well. 676 00:34:44,239 --> 00:34:46,920 Speaker 9: If you ploy younger excuse me, pull younger employees, that's 677 00:34:46,920 --> 00:34:49,400 Speaker 9: what they want to talk about as well. The challenge 678 00:34:49,440 --> 00:34:52,799 Speaker 9: is there's three or four simultaneous planks you need to 679 00:34:52,840 --> 00:34:54,800 Speaker 9: work on. If you want to get benefits from AI. 680 00:34:55,320 --> 00:34:58,239 Speaker 9: You need to do organizational while upskilling. You need to 681 00:34:58,239 --> 00:35:01,000 Speaker 9: focus on the governance ethics response AI. You need to 682 00:35:01,000 --> 00:35:05,399 Speaker 9: build your tech infrastructure data platform. Most established organizations don't 683 00:35:05,440 --> 00:35:08,000 Speaker 9: have data in a way that they can actually leverage 684 00:35:08,000 --> 00:35:09,160 Speaker 9: it using these the eye tools. 685 00:35:09,320 --> 00:35:10,799 Speaker 8: And then you've got to link it to outcomes. 686 00:35:11,040 --> 00:35:13,480 Speaker 9: So doing those four things at the same time we 687 00:35:13,520 --> 00:35:15,759 Speaker 9: call it parallel pathing is very difficult, but if you 688 00:35:15,800 --> 00:35:18,440 Speaker 9: don't have the governance, responsible AI in place, you're not 689 00:35:18,520 --> 00:35:21,920 Speaker 9: going to move. The irony is that boundaries give folks freedom. 690 00:35:22,280 --> 00:35:25,120 Speaker 9: So organizations that are moving the fastest are those that 691 00:35:25,160 --> 00:35:28,319 Speaker 9: have the clearest boundaries and governance and responsible AI. When 692 00:35:28,320 --> 00:35:29,880 Speaker 9: the rules are clear, people move faster. 693 00:35:31,000 --> 00:35:33,200 Speaker 2: We're becka, thank you so much. You're backing on because 694 00:35:33,480 --> 00:35:36,239 Speaker 2: with us, with the London Business School, all sorts of 695 00:35:36,280 --> 00:35:40,239 Speaker 2: other efforts. Original Department from LC and from Indiana. 696 00:35:40,360 --> 00:35:45,160 Speaker 1: This is the Bloomberg Surveillance podcast, available on apples, Spotify, 697 00:35:45,280 --> 00:35:49,560 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 698 00:35:49,719 --> 00:35:53,160 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 699 00:35:53,239 --> 00:35:57,279 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 700 00:35:57,320 --> 00:36:00,360 Speaker 1: can also watch us live every weekday on YouTube Tube 701 00:36:00,600 --> 00:36:09,880 Speaker 1: and always on the Bloomberg terminal. Mm HM