1 00:00:02,520 --> 00:00:07,440 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,320 --> 00:00:09,800 Speaker 2: Tech stocks leading gains this morning after a week of 3 00:00:09,840 --> 00:00:13,040 Speaker 2: mixed earnings and news of China's Deep Seek AI breakthrough. 4 00:00:13,280 --> 00:00:16,320 Speaker 2: Norie Rabini of NYU Stern and Hudson Bay Capital taking 5 00:00:16,360 --> 00:00:19,040 Speaker 2: a bullish stance posting on X earlier this week. In 6 00:00:19,079 --> 00:00:22,280 Speaker 2: my modest opinion, the Deep Seek surprise is counterintuitively over 7 00:00:22,360 --> 00:00:25,439 Speaker 2: time bullish for US and global stocks, as it is 8 00:00:25,480 --> 00:00:29,160 Speaker 2: another positive global aggregate supply shock that increases US and 9 00:00:29,200 --> 00:00:34,000 Speaker 2: global potential growth and makes exponential AI even more exponential. 10 00:00:34,200 --> 00:00:36,280 Speaker 2: Noria Jones is now for more, always going to see it. 11 00:00:36,320 --> 00:00:39,080 Speaker 2: Buddy John Most pick up on that theme. Why do 12 00:00:39,120 --> 00:00:40,920 Speaker 2: you think this is good news? And do you believe 13 00:00:40,920 --> 00:00:44,240 Speaker 2: it is the real deal? Export compliant only costs five 14 00:00:44,320 --> 00:00:45,280 Speaker 2: six million dollars. 15 00:00:46,120 --> 00:00:50,120 Speaker 3: No, of course, in spite of their restrictions, probably got 16 00:00:50,200 --> 00:00:54,920 Speaker 3: more GPU Navidia and otherwise the INDUS five k probably 17 00:00:54,920 --> 00:00:57,800 Speaker 3: one hundred thousand are in the costs where much more 18 00:00:58,120 --> 00:01:00,320 Speaker 3: and so on and so on. It's still it's not 19 00:01:00,360 --> 00:01:03,240 Speaker 3: the twenty X improvement. Maybe it's two or three X. 20 00:01:03,720 --> 00:01:06,760 Speaker 3: But my point was that if this is true even 21 00:01:06,800 --> 00:01:09,319 Speaker 3: to a two three X extent, is one of the 22 00:01:09,319 --> 00:01:15,240 Speaker 3: biggest total factor productivity increases in human history literally and 23 00:01:15,280 --> 00:01:18,920 Speaker 3: should be increasing potential growth, not just in China. The 24 00:01:18,920 --> 00:01:22,400 Speaker 3: reinforce learning can be used by everybody's open source. It's 25 00:01:22,400 --> 00:01:24,600 Speaker 3: going to use it, and it's going to increase also 26 00:01:24,680 --> 00:01:27,880 Speaker 3: not only the productivity of those who are producer of eyes, 27 00:01:27,959 --> 00:01:30,440 Speaker 3: but more importantly of the consumers of the ice. So 28 00:01:30,480 --> 00:01:33,080 Speaker 3: if it's really true, and I think it's an iterative process, 29 00:01:33,319 --> 00:01:35,240 Speaker 3: we all learn from each other, we all distilled from 30 00:01:35,240 --> 00:01:38,960 Speaker 3: each other within the US, within China and US and others. 31 00:01:39,280 --> 00:01:41,280 Speaker 3: It increases the fact that the I is going to 32 00:01:41,360 --> 00:01:43,160 Speaker 3: change the world for the better. There will be a 33 00:01:43,200 --> 00:01:47,000 Speaker 3: significant increase in potential growth in the United States and 34 00:01:47,040 --> 00:01:50,080 Speaker 3: also globally. So over the medium term that should be 35 00:01:50,080 --> 00:01:53,800 Speaker 3: actually positive for US and global stock markets, not negatives. 36 00:01:53,920 --> 00:01:57,600 Speaker 3: So the reaction I think initially a Monday was totally excessive, 37 00:01:57,840 --> 00:02:00,280 Speaker 3: and the fact that now there's been some retracing over 38 00:02:00,280 --> 00:02:03,120 Speaker 3: the week as people are digesting the news and saying, 39 00:02:03,320 --> 00:02:04,960 Speaker 3: this is not the shock that we thought. 40 00:02:05,000 --> 00:02:07,760 Speaker 2: It was positive stocks, positive for the economy, Yeah, for 41 00:02:07,800 --> 00:02:10,120 Speaker 2: economic growth. I think it's positive for society. 42 00:02:12,280 --> 00:02:14,919 Speaker 3: Well, you know, there's been a huge debate about what 43 00:02:14,960 --> 00:02:19,200 Speaker 3: are the risks of AI as opposed to the benefits 44 00:02:19,320 --> 00:02:22,000 Speaker 3: of AI? I think, in part is a political and 45 00:02:22,040 --> 00:02:26,679 Speaker 3: philosophical question. We know the information, this information, the risk 46 00:02:26,760 --> 00:02:31,440 Speaker 3: of increase cyber warfare eventually is to humanity and so on. 47 00:02:31,480 --> 00:02:34,919 Speaker 3: But I would say on net AI, like any other 48 00:02:34,960 --> 00:02:37,960 Speaker 3: techological innovation, is going to lead to an increase in 49 00:02:38,160 --> 00:02:41,600 Speaker 3: both proditiviy growth, potential growth, and human welfare. We may 50 00:02:41,639 --> 00:02:44,320 Speaker 3: be able to live until not ninety hundred hundred and 51 00:02:44,320 --> 00:02:48,359 Speaker 3: twenty longevity helped you name it. So it's a benefit 52 00:02:48,400 --> 00:02:52,280 Speaker 3: to society overall. And there are side consequences and problems 53 00:02:52,320 --> 00:02:54,600 Speaker 3: and risk and where to manage them. And I think 54 00:02:54,639 --> 00:02:56,640 Speaker 3: that the regulation of the EYE is going to be 55 00:02:56,760 --> 00:02:59,280 Speaker 3: very complicated. Probably like the Internet, We're going to do 56 00:02:59,320 --> 00:03:01,799 Speaker 3: it little too late, and then we're going to realize 57 00:03:01,800 --> 00:03:02,600 Speaker 3: there are some mistakes. 58 00:03:02,639 --> 00:03:04,640 Speaker 2: If I cliped what you just said and use some 59 00:03:04,680 --> 00:03:07,000 Speaker 2: AI and took out some words and replaced the I 60 00:03:07,160 --> 00:03:10,000 Speaker 2: with globalization, yeah, when we send the same thing a 61 00:03:10,000 --> 00:03:10,880 Speaker 2: few decades ago. 62 00:03:11,840 --> 00:03:15,720 Speaker 3: Well, globalization that is being bashed right now by everybody 63 00:03:16,280 --> 00:03:19,400 Speaker 3: led to an increase in huge amounts of welfare for 64 00:03:19,520 --> 00:03:21,959 Speaker 3: business of people around the world. Two precisely on changeans 65 00:03:22,240 --> 00:03:24,720 Speaker 3: and others and so on, and even in advanced economies 66 00:03:24,800 --> 00:03:28,040 Speaker 3: so great and globalization and technology are the same. Thing 67 00:03:28,200 --> 00:03:31,720 Speaker 3: is the ways of increasing productivity growth. There'll be a backlash, 68 00:03:31,760 --> 00:03:34,440 Speaker 3: But I think that the backlash is going to come 69 00:03:34,520 --> 00:03:36,520 Speaker 3: on AI is that there will be massive amounts of 70 00:03:36,640 --> 00:03:41,120 Speaker 3: job displacement. Job augmentation will be initially, but then jobs well, 71 00:03:41,160 --> 00:03:43,600 Speaker 3: this is what is going to be, and then there'll 72 00:03:43,640 --> 00:03:45,840 Speaker 3: be UBI or other things to result it. 73 00:03:45,920 --> 00:03:49,640 Speaker 2: AI do the services. What globalization did to manufacturing is 74 00:03:49,640 --> 00:03:52,440 Speaker 2: a question. I keep going back to how many people 75 00:03:52,440 --> 00:03:55,560 Speaker 2: are going to be satisfied with just UPI I don't 76 00:03:55,560 --> 00:03:57,280 Speaker 2: want to sit at home, do nothing and get paid 77 00:03:57,280 --> 00:04:00,880 Speaker 2: by the government. We aspire as human beings to be better, 78 00:04:01,160 --> 00:04:04,080 Speaker 2: to improve, to climb the social ladder. 79 00:04:04,480 --> 00:04:06,720 Speaker 3: A lot of people, let's do it much In a 80 00:04:06,760 --> 00:04:09,640 Speaker 3: world of scarcity, of course, the dignity of life was 81 00:04:09,680 --> 00:04:12,560 Speaker 3: to provide for yourself and for your family and go 82 00:04:12,600 --> 00:04:15,320 Speaker 3: and look for water, food shelter every day. In a 83 00:04:15,360 --> 00:04:18,359 Speaker 3: world in which scarcity becomes less of a constraint, we 84 00:04:18,440 --> 00:04:20,479 Speaker 3: have to produce see less because the robots are going 85 00:04:20,520 --> 00:04:23,000 Speaker 3: to do it and we can consume more. You're right 86 00:04:23,000 --> 00:04:25,400 Speaker 3: that you guys saying what's the meaning of life in 87 00:04:25,440 --> 00:04:28,880 Speaker 3: that situation? It's a philosophical question. And John Manachizin at 88 00:04:28,880 --> 00:04:32,160 Speaker 3: thirty said, once we get this technology innovation, it's going 89 00:04:32,160 --> 00:04:34,160 Speaker 3: to work only ten hours than sixty hours, and we 90 00:04:34,200 --> 00:04:37,680 Speaker 3: all become poets, artists, creators and whatever not. Maybe the 91 00:04:37,760 --> 00:04:39,960 Speaker 3: nature of life is going to change. Maybe with AGI, 92 00:04:40,080 --> 00:04:42,000 Speaker 3: we have to merge with the machine, because if we 93 00:04:42,040 --> 00:04:44,880 Speaker 3: don't merge with the machine, become hyper intelligent and we 94 00:04:44,960 --> 00:04:47,440 Speaker 3: become obsolete, and then they's going to be a new species. 95 00:04:47,480 --> 00:04:49,839 Speaker 3: It's not going to be almost appiens, but a more robot. 96 00:04:49,839 --> 00:04:53,440 Speaker 3: Because it's going to take decades. That's an important philosophical question. 97 00:04:53,480 --> 00:04:56,719 Speaker 3: But I would argue provocatively that twenty years from now, 98 00:04:57,040 --> 00:05:01,280 Speaker 3: potential growth probably could be eighty percent, sorry eight percent. 99 00:05:01,800 --> 00:05:04,840 Speaker 3: An unemployment rate could be eighty percent. We are going 100 00:05:04,880 --> 00:05:06,760 Speaker 3: in that direction over time, and then we have to 101 00:05:06,800 --> 00:05:09,359 Speaker 3: manage the council and UBI, by the way, cannot be 102 00:05:09,400 --> 00:05:11,640 Speaker 3: only national because the winners and losers are going to 103 00:05:11,960 --> 00:05:15,479 Speaker 3: be only internal, but so across countries. Does we innovate 104 00:05:15,640 --> 00:05:18,320 Speaker 3: get better off compared to those who don't innovate. Can 105 00:05:18,360 --> 00:05:20,600 Speaker 3: we have a system of global governance that has a 106 00:05:20,640 --> 00:05:25,320 Speaker 3: cross border UBI. I mean, those are big issues global governance, well, 107 00:05:25,400 --> 00:05:29,880 Speaker 3: a form of global governance cooperation actually, But if. 108 00:05:29,800 --> 00:05:32,800 Speaker 1: You use deep sea today you can't even find out 109 00:05:32,800 --> 00:05:35,520 Speaker 1: things about the Chinese Communist Party, things like tenements square. 110 00:05:35,600 --> 00:05:38,040 Speaker 1: How are we supposed to have global governance with these 111 00:05:38,120 --> 00:05:38,880 Speaker 1: kinds of countries. 112 00:05:39,880 --> 00:05:42,279 Speaker 3: I think what's going to happen is that over time, 113 00:05:42,440 --> 00:05:46,080 Speaker 3: given the geopolitical divisions within US and China, the Wall 114 00:05:46,200 --> 00:05:48,480 Speaker 3: is going to be divided in two. There'll be a 115 00:05:48,520 --> 00:05:51,560 Speaker 3: group of countries US with its friends and allies and 116 00:05:51,640 --> 00:05:55,240 Speaker 3: others in the global ceuth who prefer the economic, monetary, social, 117 00:05:55,279 --> 00:05:58,280 Speaker 3: political geopolical system of the US and the West. Someone 118 00:05:58,360 --> 00:06:00,800 Speaker 3: the globals are going to go with us, and there'll 119 00:06:00,839 --> 00:06:02,559 Speaker 3: be other going to go with the model of China, 120 00:06:03,080 --> 00:06:07,640 Speaker 3: but model economic trade in state, capitalist geopolitical security via 121 00:06:07,720 --> 00:06:10,719 Speaker 3: right technology and whatever not, and there'll be a split world. 122 00:06:11,000 --> 00:06:14,080 Speaker 3: But within the West, if there are and those friends 123 00:06:14,120 --> 00:06:17,320 Speaker 3: and allies, if there are winners and losers within countries 124 00:06:17,360 --> 00:06:20,120 Speaker 3: or across countries, we'll have a system of transfers. I mean, 125 00:06:20,120 --> 00:06:23,920 Speaker 3: we've been subsidizing the defense of our friends and allies 126 00:06:24,120 --> 00:06:26,880 Speaker 3: from Asia to Europe for now eighty years because it 127 00:06:26,960 --> 00:06:29,000 Speaker 3: was in the global interests of the United States. So 128 00:06:29,040 --> 00:06:32,440 Speaker 3: if we need to do global UBI across friends and 129 00:06:32,440 --> 00:06:34,640 Speaker 3: allies and others part of our system, we're going to 130 00:06:34,680 --> 00:06:36,520 Speaker 3: do it. But that's the world we're going. And China 131 00:06:36,600 --> 00:06:38,719 Speaker 3: is doing the same thing. We have to subsidize our 132 00:06:38,760 --> 00:06:39,800 Speaker 3: friends and they'll do the same. 133 00:06:39,920 --> 00:06:42,120 Speaker 2: Unpatch a fund of the world to described nothing to 134 00:06:42,120 --> 00:06:42,440 Speaker 2: do with it. 135 00:06:42,560 --> 00:06:46,080 Speaker 1: And this is not here, and it's essential. Lisa is 136 00:06:46,120 --> 00:06:48,440 Speaker 1: not even here, and it's gone very existential. This conversation 137 00:06:49,040 --> 00:06:53,440 Speaker 1: when it comes to this idea of our global regulation 138 00:06:53,880 --> 00:06:57,360 Speaker 1: on AI, do you think Trump will use AI right 139 00:06:57,360 --> 00:06:59,560 Speaker 1: now in the next four years as a bargaining chip 140 00:06:59,600 --> 00:07:02,360 Speaker 1: as you try to work on global realignment. 141 00:07:01,960 --> 00:07:05,520 Speaker 3: When it comes to trade, it will actually buy them. 142 00:07:05,600 --> 00:07:09,559 Speaker 3: Right before he left in early January, this new AI 143 00:07:09,640 --> 00:07:13,600 Speaker 3: diffusion rule that divides essentially the world in the three 144 00:07:13,600 --> 00:07:17,280 Speaker 3: group of countries Tier one, Tier two, Tier three. If 145 00:07:17,320 --> 00:07:21,360 Speaker 3: you're part of the global technological order of the United 146 00:07:21,360 --> 00:07:23,840 Speaker 3: States and you accept all the rules and the security, 147 00:07:24,200 --> 00:07:28,400 Speaker 3: you have access to unlimited amounts of advanced chips of 148 00:07:28,520 --> 00:07:31,840 Speaker 3: Navidian others. You have access to all the AI models 149 00:07:31,880 --> 00:07:34,400 Speaker 3: you can have access to building the data center, and 150 00:07:34,440 --> 00:07:37,640 Speaker 3: you're part of our own technological sphere, and we set 151 00:07:37,800 --> 00:07:41,680 Speaker 3: the rule of essentially within that type of Tier one, 152 00:07:41,880 --> 00:07:45,080 Speaker 3: we are deciding utterly. It's not a question about regulating 153 00:07:45,120 --> 00:07:48,520 Speaker 3: AI but with our friend and ally and even within NATO. 154 00:07:48,800 --> 00:07:53,000 Speaker 3: There are only so far eighteen countries that qualify for tierue, 155 00:07:53,080 --> 00:07:56,240 Speaker 3: not all NATO countries. Of course, the countries in the 156 00:07:56,280 --> 00:07:59,080 Speaker 3: Big Big Five I are part of some of the 157 00:07:59,120 --> 00:08:02,360 Speaker 3: other NATO members, plenty of countries are not. Tier two 158 00:08:02,440 --> 00:08:05,240 Speaker 3: is mostly the Global South and everybody else. Of course, 159 00:08:05,360 --> 00:08:08,800 Speaker 3: China arrivals are three and so on. So the US 160 00:08:08,880 --> 00:08:11,880 Speaker 3: is going to set the rules of the global technological order, 161 00:08:12,160 --> 00:08:14,600 Speaker 3: and it's going to do it totally unilatterly. And it's 162 00:08:14,640 --> 00:08:17,600 Speaker 3: either you're with me, because I'm setting those technologies and 163 00:08:17,600 --> 00:08:19,760 Speaker 3: I'm the one who's advancing those technologies, and then you 164 00:08:19,800 --> 00:08:22,400 Speaker 3: can use the chips, you can develop the application, you 165 00:08:22,400 --> 00:08:24,920 Speaker 3: can do the data center with me, or otherwise you're 166 00:08:25,040 --> 00:08:25,760 Speaker 3: in the doghouse. 167 00:08:25,960 --> 00:08:28,120 Speaker 2: I wanted to squeeze one more questions or pains would 168 00:08:28,120 --> 00:08:30,400 Speaker 2: be us we ever set it. Europeans would be deeply 169 00:08:30,480 --> 00:08:32,480 Speaker 2: upset with this conversation showing no, but. 170 00:08:32,640 --> 00:08:35,520 Speaker 3: They already accepted it. The same thing happened with data centers, 171 00:08:35,600 --> 00:08:38,760 Speaker 3: right they tried to find an alternative, they were not successful. 172 00:08:39,080 --> 00:08:42,199 Speaker 3: And the hyper scalers are providing those data centers in Europe, 173 00:08:42,600 --> 00:08:46,600 Speaker 3: and maybe they are technically in Europe, but they are 174 00:08:46,640 --> 00:08:50,760 Speaker 3: controlled by WUS and Microsoft and you name it. That's 175 00:08:50,760 --> 00:08:51,640 Speaker 3: already the world we're in. 176 00:08:51,679 --> 00:08:53,560 Speaker 2: I wanted to squeeze in a word on Stephen Moran 177 00:08:53,720 --> 00:08:56,680 Speaker 2: just quickly worked alongside the Hudson By Capital who you represent? 178 00:08:57,000 --> 00:08:59,320 Speaker 2: This morning published a really interesting pay for the end 179 00:08:59,320 --> 00:09:04,319 Speaker 2: of last year activist treasury issuance ITI. Now he's in 180 00:09:04,360 --> 00:09:07,440 Speaker 2: power now in the White House, working alongside Donald Trump, 181 00:09:07,480 --> 00:09:09,600 Speaker 2: is an incomp adviser. What's going to happen now if 182 00:09:09,600 --> 00:09:12,679 Speaker 2: you believe that yan In the former Treasury secretary with 183 00:09:12,960 --> 00:09:17,400 Speaker 2: issuing treasuries actively at the front end to have different objectives, 184 00:09:17,720 --> 00:09:19,400 Speaker 2: how do we unwind that this time around to even 185 00:09:19,440 --> 00:09:20,840 Speaker 2: try well. 186 00:09:20,960 --> 00:09:24,440 Speaker 3: Scott Bsingt in his confirmation hearing was asked about this 187 00:09:25,000 --> 00:09:28,440 Speaker 3: and he already said that effectively, given the impact on 188 00:09:28,520 --> 00:09:31,480 Speaker 3: long term interest rates, if you phase it out right away, 189 00:09:32,080 --> 00:09:33,840 Speaker 3: it's going to be a shock to long bond yials 190 00:09:33,840 --> 00:09:37,120 Speaker 3: already going higher. In our paper estimated the shock could 191 00:09:37,160 --> 00:09:38,800 Speaker 3: be for the next two or three years or at 192 00:09:38,920 --> 00:09:41,959 Speaker 3: least fifty business points. So then all that so they're 193 00:09:42,000 --> 00:09:44,120 Speaker 3: going to have to wait and phase it out one 194 00:09:44,240 --> 00:09:49,000 Speaker 3: gradually and two interview when bond yields are going lower, 195 00:09:49,320 --> 00:09:52,400 Speaker 3: either going lower because maybe growth is slower or because 196 00:09:52,480 --> 00:09:56,760 Speaker 3: inflation is lower. So they'll have to opportunistically gradually phase 197 00:09:56,840 --> 00:09:59,280 Speaker 3: it out over time. But it's not going to happen overnight. 198 00:09:59,520 --> 00:10:01,000 Speaker 3: There already, said Noriel. 199 00:10:01,040 --> 00:10:02,640 Speaker 2: It's always going to see a sir lost to think 200 00:10:02,640 --> 00:10:05,880 Speaker 2: about scaring me about the future. Noriel Rabini off NYU 201 00:10:05,920 --> 00:10:08,920 Speaker 2: Stern in Hudson Bay Capital. I want absolutely nothing to 202 00:10:08,960 --> 00:10:09,320 Speaker 2: do with that.