WEBVTT - Meta Signs Multi-Gigawatt Nuclear Deals for AI Data Centers 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 1>Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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<v Speaker 1>Eastern on Apple, Cocklay and Android Auto with the Bloomberg

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<v Speaker 1>or watch us live on YouTube.

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<v Speaker 2>Let's go back to the tech sector. We can't stray

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<v Speaker 2>too far from it ever, when we talk about the

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<v Speaker 2>market and take a look at some of the mag

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<v Speaker 2>seven names. Alphabet this week has moved ahead of Apple

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<v Speaker 2>in terms of market cap, and Met us signing this big,

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<v Speaker 2>big power generation deal with this company called Vistra, which

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<v Speaker 2>has had a really futile week. Let's bring in Man

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<v Speaker 2>Deep sing right now. Man Deep is our global tech

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<v Speaker 2>research head at Bloomberg Intelligence, and Man Deep just put

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<v Speaker 2>into context for us this multi gigawatt nuclear deal that

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<v Speaker 2>Meta has signed for its AI data centers. How should

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<v Speaker 2>we think about this?

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<v Speaker 3>Yeah, I mean, the best way to frame it is

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<v Speaker 3>how how these companies are spending their capex? And we

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<v Speaker 3>know roughly, you know, one gigawa of AI data center

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<v Speaker 3>capacity costs about fifty billion dollars. Again depends on the region,

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<v Speaker 3>the source of energy and land et cetera. But that's

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<v Speaker 3>the rough ballpark. So when you think about six point

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<v Speaker 3>six gigawat, and we already know open Ai has committed

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<v Speaker 3>to you know, about twenty six gigawatts, So clearly these

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<v Speaker 3>companies have big ambitions. And what it suggests is a

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<v Speaker 3>company like Meta, which will very well spend over one

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<v Speaker 3>hundred billion dollars in capex this year in twenty twenty six,

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<v Speaker 3>may stay on that path for at least the next

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<v Speaker 3>three to four years because they believe, you know, they

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<v Speaker 3>have a lot of applications when it comes to their

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<v Speaker 3>own consumption of AI data centers, and they seem to

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<v Speaker 3>be confident about their own model, which has so far

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<v Speaker 3>trailed the likes of open Ai and Tropic and Gemini

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<v Speaker 3>in terms of abilities. But it sounds like they want

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<v Speaker 3>to make sure they have the capacity to deploy AI.

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<v Speaker 3>And that's where nuclear is an interesting choice because a

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<v Speaker 3>lot of the other hyperscalers have gone for more natural

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<v Speaker 3>gas turbines, but we know there is a big backlog

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<v Speaker 3>with someone like ge Vernola for their natural gas turbines,

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<v Speaker 3>So from that perspective, nuclear is an interesting choice, you know,

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<v Speaker 3>as an alternate.

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<v Speaker 4>What are the big tech companies, these big AI companies

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<v Speaker 4>saying about their confidence in the reliability of power in

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<v Speaker 4>the next five, ten, twenty years, because a lot of

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<v Speaker 4>folks are saying that really could be the gating issue

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<v Speaker 4>for the development and evolution of AI.

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<v Speaker 3>Yeah, I mean, look, I was at CEES where Jensen highlighted,

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<v Speaker 3>you know, the reason why companies would upgrade quickly to

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<v Speaker 3>the latest Rubin architecture is because they give I mean,

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<v Speaker 3>Ruben will give them more tokens per unit of power,

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<v Speaker 3>which is really a way to emphasize the efficiency of

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<v Speaker 3>how you utilize your available power. And so from that perspective,

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<v Speaker 3>everyone sees very long lead times when it comes to

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<v Speaker 3>adding new power, and they want to maximize, you know,

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<v Speaker 3>the usage and utilization of whatever they have right now.

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<v Speaker 3>And look, you could argue, you know, there are some

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<v Speaker 3>other sources which may have shorter lead times, like solar

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<v Speaker 3>or battery packs. But in this case, given the size

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<v Speaker 3>of power that these companies need for running we're talking

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<v Speaker 3>about one gigawatt data center, it's very hard to think

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<v Speaker 3>about too many sources of energy that will give you

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<v Speaker 3>that sort of power, and you know that's where the

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<v Speaker 3>lead times are so long.

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<v Speaker 5>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 5>Let's get to the restaurant business here.

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<v Speaker 4>You know, the flu season which is upon us, and

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<v Speaker 4>it's you know, a little bit more harsh than average.

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<v Speaker 5>It's impacting a lot of folks.

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<v Speaker 4>Obviously, it's also impacting some businesses, like the restaurant business.

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<v Speaker 5>I didn't think of that.

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<v Speaker 4>Michael Halen, He thinks of it. Senior restaurant and food

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<v Speaker 4>service analysts for Bloomberg Intelligence Mike talk to us about

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<v Speaker 4>recent trends in the restaurant bizz.

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<v Speaker 6>Yeah, it was a tough fourth quarter, you know, especially December.

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<v Speaker 6>December was hurt by cold weather, snow, and an earlier

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<v Speaker 6>flu season. It's the worst flu season so far in

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<v Speaker 6>twenty five years. This mad some issues with you know,

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<v Speaker 6>the vaccines not covering the current trains that.

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<v Speaker 5>Are out there, and so was pretty rough.

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<v Speaker 6>You know. Quick service and fast casual did better. Quick

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<v Speaker 6>service sales were down slightly. You know, fast food chains

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<v Speaker 6>like McDonald's and were as fast casual like Chipotle, Shakeshack,

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<v Speaker 6>they were up slightly in December. It was the full

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<v Speaker 6>service chain, so casual diners like Chili's and family dining

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<v Speaker 6>like ihop that struggled the most, Which makes sense. If

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<v Speaker 6>it's really cold or if it's snowing, you're less likely

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<v Speaker 6>to go out to a restaurant and dine in. You're

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<v Speaker 6>more likely to order dominoes, and so it all kinds

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<v Speaker 6>of makes sense. But you know, these trends are gonna

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<v Speaker 6>flip pretty pretty nicely into January. We've seen a huge

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<v Speaker 6>squeeze in restaurant stocks to open up this year, and

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<v Speaker 6>we think it's going to continue.

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<v Speaker 2>So what do these casual dining chains do to change

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<v Speaker 2>the trajectory of what seems like a pretty stet trend

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<v Speaker 2>at this point.

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<v Speaker 6>Well, the casual dining chains had a really nice year

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<v Speaker 6>in twenty twenty five.

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<v Speaker 5>We you know, they have.

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<v Speaker 6>But because of that, they have tougher comparisons to LAP right,

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<v Speaker 6>and so for that reason, we think, you know, and

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<v Speaker 6>we think USR stands to benefit more from from tax

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<v Speaker 6>reform as well as like a ten percent ish decline in.

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<v Speaker 5>Oil prices, So we don't expect a.

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<v Speaker 6>Bad year at a casual dining. We think they'll continue

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<v Speaker 6>to do pretty well. They're gonna you know, they're not

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<v Speaker 6>gonna receive as much of a boost.

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<v Speaker 5>From Chili's, which had a, you.

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<v Speaker 6>Know, an unbelievable year in twenty twenty five. But we

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<v Speaker 6>think casual dining can have a solid year here in

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<v Speaker 6>twenty six. But it's the casual dining names and some

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<v Speaker 6>of the fast casual names we cover, like Cava and Winkstop,

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<v Speaker 6>that we think can have a really nice bounce here,

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<v Speaker 6>especially in the first half of twenty twenty six.

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<v Speaker 4>Mike, we got some labor data, takes some jobs data,

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<v Speaker 4>unemployment rate ticks down a little bit here.

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<v Speaker 5>I got to think that's that's important for US companies.

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<v Speaker 6>Yeah, you know, labor has been tough for restaurants. You know,

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<v Speaker 6>we've seen a four percent ish wage rate inflation in

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<v Speaker 6>our in this industry, you know, going back to before

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<v Speaker 6>the pandemic, you know, so labor continues to be kind

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<v Speaker 6>of an issue. There's still some talk about restaurants being

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<v Speaker 6>understaffed right now, so that obviously impacts service levels negatively

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<v Speaker 6>and hurts the customer experience. So obviously something we look

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<v Speaker 6>at pretty closely.

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<v Speaker 2>In terms of names that you like, and I know

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<v Speaker 2>we don't do buy hold cell recommendations at Bloomberg Intelligence,

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<v Speaker 2>but the kinds of companies that are best positioned in

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<v Speaker 2>twenty twenty six. What are you looking for?

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<v Speaker 6>Oh yeah, so you know, for us, we're looking at

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<v Speaker 6>chains that we think can outperform you know, same store

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<v Speaker 6>sales estimates on the street with some chains that we think,

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<v Speaker 6>you know, other analysts are just not bullish enough on.

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<v Speaker 6>You know, McDonald's is coming up against some really easy

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<v Speaker 6>comparisons due to e Coli once they report the four

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<v Speaker 6>Q and the one Q, Winstock, Brinker. These are some

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<v Speaker 6>of the names that we've written about.

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<v Speaker 5>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 4>By this, transition to electric vehicles is proving very costly

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<v Speaker 4>for automakers around the world. We had the big twenty

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<v Speaker 4>plus billion dollar right off from four to a couple

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<v Speaker 4>of weeks ago. Now General Motors will take another six

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<v Speaker 4>billion dollars in charges tied to production cutbacks.

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<v Speaker 5>In its electric vehicle and battery operations.

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<v Speaker 4>Let's break it down with Craig Trudell, gloom Global Autos

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<v Speaker 4>editor for Bloomberg News. He joins us from our London office. Craig,

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<v Speaker 4>what's GM telling us here about kind of their transition

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<v Speaker 4>to evs.

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<v Speaker 1>Yeah.

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<v Speaker 7>I think, you know, this is like a sort of

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<v Speaker 7>ongoing toll that they're reporting, and I don't know that

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<v Speaker 7>they're necessarily done. We heard them report actually some months

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<v Speaker 7>back that you know, sort of rethinking their production capacity

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<v Speaker 7>and pairing that back in response to the way electric

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<v Speaker 7>vehicle demand and you know, battery supply was shaking out,

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<v Speaker 7>that that was going to set them back more than

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<v Speaker 7>a billion dollars. So this is you know, an incremental

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<v Speaker 7>amount of money on top of that, and there was

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<v Speaker 7>some warning in the AK last night that actually, you know,

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<v Speaker 7>there may be more to come. So you know, I

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<v Speaker 7>think this is part of a broader sort of rationalization

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<v Speaker 7>taking place in the US, where you know, an industry

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<v Speaker 7>was trying to to respond to an administration that was

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<v Speaker 7>you know, banging the drum in a much different way

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<v Speaker 7>than the Trump administration is now.

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<v Speaker 4>You know, I look at this trailing twelve month performance

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<v Speaker 4>of General Motors. It's up sixty one percent, and that

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<v Speaker 4>kind of tells me you can take as many charges

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<v Speaker 4>as you want here, I want you to pair back

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<v Speaker 4>your transitions to ev Is that kind of what you're hearing.

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<v Speaker 7>You know, it's it's fascinating because on one hand, you're

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<v Speaker 7>seeing you know, electric car leader or at least former

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<v Speaker 7>electric car leader Tesla taking off and doing so in

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<v Speaker 7>spite of the fact that their sales are slowing down.

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<v Speaker 7>The outlook for EVS and their home market is pretty bleak.

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<v Speaker 7>And yet you also in Unison, have you know, sort

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<v Speaker 7>of the contrarian play taking off in GM. I think,

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<v Speaker 7>you know, it's maybe not quite that simple, and that

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<v Speaker 7>you know, GM does have I think David Welch's story

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<v Speaker 7>on last night the News does have, you know, sort

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<v Speaker 7>of the context that they have quite quite a lot

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<v Speaker 7>of electric vehicles available. They're going to continue to have

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<v Speaker 7>a pretty broad range of cars, and Mary Barrow has

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<v Speaker 7>talked about how EVS is their quote north star and

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<v Speaker 7>that that's not going to change. So I think there's

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<v Speaker 7>going to be a little bit more stick toitiveness on

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<v Speaker 7>GM's part than Ford, and yet I think this is

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<v Speaker 7>also an indication that the market is saying, you know what,

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<v Speaker 7>the way this company makes money is it's full sized

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<v Speaker 7>pickups and SUVs. The more of those that they can

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<v Speaker 7>make in this new paradigm, the merrier.

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<v Speaker 4>So I guess give us a sense of In the US,

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<v Speaker 4>I think we have an idea that this transition to

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<v Speaker 4>EV's is going to take longer than maybe we we

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<v Speaker 4>initially thought that's not the case, it seems like in Europe.

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<v Speaker 5>Tell us how the adoption is going in Europe.

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<v Speaker 7>Yeah, I think actually last year it may be surprising

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<v Speaker 7>to people because we ended the year with these headlines

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<v Speaker 7>about the EUS sort of backing off of its combustion

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<v Speaker 7>engine PAN for twenty thirty five. That being said, we

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<v Speaker 7>actually had a nice pickup in momentum for electric vehicles

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<v Speaker 7>last year. A lot of that was driven by the

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<v Speaker 7>Chinese manufacturers. I think that is part of where the

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<v Speaker 7>concern is here that you know, the the you know,

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<v Speaker 7>local manufacturers in Europe. Some of them are doing better

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<v Speaker 7>than they were, but it's it is patchy. I think

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<v Speaker 7>it's also patchy, you know, sort of country by country,

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<v Speaker 7>but we did see, you know, a roughly thirty percent

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<v Speaker 7>increase in battery electric vehicles sales last year in spite

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<v Speaker 7>of the fact that a big player in Tesla had

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<v Speaker 7>a really tough twenty twenty five.

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<v Speaker 5>That's interesting, you know, talk to those about hybrids here.

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<v Speaker 4>I just caved at least a hybrid form my number

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<v Speaker 4>four offspring because he goes to school in California where

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<v Speaker 4>the gas prices are just ridiculously high.

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<v Speaker 5>A the technology seemed really cool to me.

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<v Speaker 4>The car drove great, and it seems like a nice

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<v Speaker 4>mix between or a nice compromise between going full EV

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<v Speaker 4>and full ice.

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<v Speaker 5>How do you think about it?

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<v Speaker 7>Yeah, I mean this was the supposed bridge technology, and

0:13:00.120 --> 0:13:03.280
<v Speaker 7>the bridge is going for a lot longer than I think.

0:13:03.280 --> 0:13:06.560
<v Speaker 7>A lot of people reckoned, you know, I remember, uh,

0:13:06.760 --> 0:13:10.200
<v Speaker 7>you know, uh covering Toyota being based in Japan for

0:13:10.240 --> 0:13:12.760
<v Speaker 7>a few years. Uh, you know, Toyota taking a lot

0:13:12.760 --> 0:13:15.920
<v Speaker 7>of heat for sort of clinging to uh. You know,

0:13:16.000 --> 0:13:18.960
<v Speaker 7>this technology that it's sort of pioneered with the Prius

0:13:19.280 --> 0:13:21.920
<v Speaker 7>and you know, not sort of jumping with both feet

0:13:22.000 --> 0:13:25.439
<v Speaker 7>in fully electric vehicles that has very much turned out

0:13:25.480 --> 0:13:28.480
<v Speaker 7>to be to be the play and I think we're seeing, uh,

0:13:28.520 --> 0:13:31.160
<v Speaker 7>you know, a lot of the excess battery capacity that

0:13:31.200 --> 0:13:34.920
<v Speaker 7>got built in response to Biden administration's push for uh,

0:13:34.960 --> 0:13:37.360
<v Speaker 7>you know, more of a battery uh you know sector

0:13:37.400 --> 0:13:39.120
<v Speaker 7>to be built in the US. A lot of that

0:13:39.240 --> 0:13:41.480
<v Speaker 7>is going to get soaked up by these hybrids, whether

0:13:41.840 --> 0:13:45.000
<v Speaker 7>they're whether they're plug in vehicles or not. If you

0:13:45.000 --> 0:13:48.439
<v Speaker 7>can make you know, the the bigger pickups and SUVs

0:13:48.480 --> 0:13:51.240
<v Speaker 7>that are already popular in the US more efficient, you

0:13:51.320 --> 0:13:53.080
<v Speaker 7>get sort of the both the best of both worlds.

0:13:53.200 --> 0:13:55.520
<v Speaker 7>Even if there's a little bit of incremental costs on

0:13:55.559 --> 0:13:58.120
<v Speaker 7>the front end, these vehicles are going to be much

0:13:58.200 --> 0:14:01.960
<v Speaker 7>cheaper to to refuel and and you know, better to run.

0:14:02.920 --> 0:14:07.599
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