WEBVTT - AMD Says Oracle Is Pledging Widespread Use of New AI Chips 0:00:02.759 --> 0:00:10.600 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.640 --> 0:00:14.600 Bloomberg Intelligence podcast. Catch us live weekdays at ten am 0:00:14.640 --> 0:00:17.880 Eastern on Apple Coarclay, and Android Auto with the Bloomberg 0:00:17.960 --> 0:00:21.080 Business app. Listen on demand wherever you get your podcasts, 0:00:21.400 --> 0:00:23.680 or watch us live on YouTube. 0:00:24.000 --> 0:00:27.360 Oracle will deploy a large batch of AMD's forthcoming m 0:00:27.440 --> 0:00:29.240 I four fifty chips next year. 0:00:29.440 --> 0:00:31.800 It's kind of like our AI story of the day. 0:00:31.840 --> 0:00:33.440 It seems like every day we've got one of these 0:00:33.640 --> 0:00:36.240 stories of these tech companies doing business with one another 0:00:36.240 --> 0:00:38.240 and maybe even involving some investments in each other. 0:00:38.400 --> 0:00:40.879 Honorag Rana, it's his job to. 0:00:41.000 --> 0:00:43.000 Keep it all straight here. He's a technology aneist to 0:00:43.040 --> 0:00:47.280 Bloomberg Intelligence. Honurag If you're Oracle, if you're AMD, is 0:00:47.320 --> 0:00:48.720 this just business as usual? 0:00:48.800 --> 0:00:51.080 Why? Or is this something new and unusual? 0:00:52.440 --> 0:00:54.800 The slight and usual part is that the AMD chip 0:00:54.880 --> 0:00:57.160 seems to be doing at parity at what and video 0:00:57.240 --> 0:01:00.240 chips are for this particular case. Now, I do not 0:01:00.320 --> 0:01:02.639 know what kind of workloads Oracle will put on it, 0:01:02.880 --> 0:01:05.520 so you really can't do an apples to apples comparison. 0:01:05.560 --> 0:01:08.920 But the story at this point is Oracle has a 0:01:08.959 --> 0:01:12.479 massive backlock of orders and it needs to invest money 0:01:12.520 --> 0:01:15.679 to get them converted into revenue. They need to open 0:01:15.720 --> 0:01:18.800 more data centers or rent out more data centers. They 0:01:18.840 --> 0:01:21.960 need to buy more chips, buy more hardware, and combine 0:01:22.000 --> 0:01:24.080 all that together and eventually then they're going to get 0:01:24.120 --> 0:01:26.319 paid for all that stuff. So they're going anywhere they 0:01:26.360 --> 0:01:28.400 can find chips right now, and you know, it seems 0:01:28.440 --> 0:01:30.000 that AMD is their next stop. 0:01:30.680 --> 0:01:32.479 So there are a couple of threads to pull on there. 0:01:32.520 --> 0:01:35.959 It feels like AMD is increasingly the number one alternative 0:01:36.000 --> 0:01:37.280 to invidious chips. 0:01:37.360 --> 0:01:38.720 We can talk about that a little bit. 0:01:38.800 --> 0:01:42.120 But what struck me is that there's no dollar amount 0:01:42.160 --> 0:01:47.319 disclosed in this deal or partnership or promise. The previous 0:01:47.640 --> 0:01:50.920 deal that AMD struck with open Ai just said tens 0:01:50.960 --> 0:01:52.600 of billions of dollars in new revenue. 0:01:52.920 --> 0:01:56.520 Why are firms keeping it so vague, Well. 0:01:56.360 --> 0:01:58.600 Because they do not know how many chips they would 0:01:58.600 --> 0:02:01.600 need at what point, at whatcity. This is a you know, 0:02:01.680 --> 0:02:05.000 it's not you know, it's it's more so signaling that 0:02:05.040 --> 0:02:08.000 we are not just truly dependent on in video, we 0:02:08.080 --> 0:02:11.320 have other options as well. It helps them with navigating 0:02:11.360 --> 0:02:13.680 in terms of pricing from in video. Also, you know, 0:02:13.720 --> 0:02:16.000 we know in video chips are getting expensive over the 0:02:16.080 --> 0:02:19.079 last few years, so there is there could be one reason. 0:02:19.360 --> 0:02:21.040 The other thing we don't know is what kind of 0:02:21.080 --> 0:02:24.560 workloads there are. Because we know, for the absolute best 0:02:24.600 --> 0:02:27.200 of the best, you you have to use in video chips. 0:02:27.320 --> 0:02:29.600 That's what we know as of today. Whether all of 0:02:29.639 --> 0:02:32.120 that changes in twelve to eighteen months, we don't know. 0:02:32.520 --> 0:02:35.000 But there are other workloads that may not require that 0:02:35.080 --> 0:02:37.720 amount of you know, firepower or horse power you could say. 0:02:38.400 --> 0:02:40.880 For that you may use you know, AMD chips or 0:02:40.919 --> 0:02:42.079 something even more inferior. 0:02:43.080 --> 0:02:45.919 And even yet another announcement in your space today on 0:02:46.160 --> 0:02:48.320 rock Salesforce, a company you've been talking to us about 0:02:48.320 --> 0:02:51.400 for many, many years, Salesforce and open Ai today announced 0:02:51.400 --> 0:02:53.799 an expanded strategic partnership. 0:02:55.400 --> 0:02:56.280 What's going on there? 0:02:57.480 --> 0:03:00.360 Yeah, So for me, this is actually a bar bigger 0:03:00.440 --> 0:03:04.280 news and has more ramifications in the long run. If 0:03:04.320 --> 0:03:07.000 you see what's been happening in the software landscape over 0:03:07.000 --> 0:03:10.520 the past two years, the threat is that Opening I 0:03:10.600 --> 0:03:13.640 will come and it will take away you know, basically 0:03:13.639 --> 0:03:16.560 the businesses of all the application software vendors, you know, 0:03:16.600 --> 0:03:21.040 whether that's Adobe workday, Salesforce, HubSpot, you name it. Because 0:03:21.400 --> 0:03:26.160 open ai has shown capabilities that their model can help 0:03:26.200 --> 0:03:30.880 out in functions such as finance, human resources, sales automations, 0:03:30.880 --> 0:03:36.120 et cetera. This integration between the world's biggest CRM software vendor, 0:03:36.200 --> 0:03:38.960 which is Salesforce, and open Ai shows that both of 0:03:39.000 --> 0:03:41.560 them will be working together and you know, it'll be 0:03:41.600 --> 0:03:46.320 easier for enterprises to go inside open Ai chargpt ask 0:03:46.440 --> 0:03:49.560 for what they want that gets connected to the data 0:03:49.600 --> 0:03:53.240 that resides in Salesforce. Makes it very easy for the 0:03:53.360 --> 0:03:56.360 enterprise customers to do their work as well rather than 0:03:56.560 --> 0:03:58.920 just going into you know, Salesforce. So I think this 0:03:59.000 --> 0:04:01.600 is a bigger news in the law run, but you 0:04:01.600 --> 0:04:03.720 know we are all talking about Oracle as well. 0:04:04.080 --> 0:04:04.640 Yeah. 0:04:04.880 --> 0:04:07.920 Open Ai announces a new deal with someone every day, Paul, 0:04:07.960 --> 0:04:10.160 This is kind of what you're you're getting back to. 0:04:10.480 --> 0:04:13.320 And this really both of these announcements are the latest, 0:04:13.720 --> 0:04:15.880 uh in this string of big tech building more computing 0:04:15.880 --> 0:04:19.160 infrastructure and meeting this demand, this and satual demand. I've 0:04:19.160 --> 0:04:22.840 really lost track of the permutations, Anra. What worries you 0:04:23.000 --> 0:04:27.400 about these back and forth announcements and partnerships and you know, 0:04:27.640 --> 0:04:29.920 the billions of dollars that may or may not change hands. 0:04:31.200 --> 0:04:33.039 Do do we think that these are just announcements that 0:04:33.160 --> 0:04:36.520 may not come to fruition if circumstances change, for instance, 0:04:36.520 --> 0:04:37.600 in the next six months. 0:04:38.720 --> 0:04:40.760 See from a salesforce point of view, and which is 0:04:40.760 --> 0:04:42.839 what I was. You know, you would say most of 0:04:42.920 --> 0:04:45.719 us are worried about also legacy software names. It's a 0:04:45.760 --> 0:04:48.400 good thing because Opening Eye is a new channel of 0:04:48.400 --> 0:04:51.520 communication with you know, the rest of the world. If 0:04:52.040 --> 0:04:54.719 you can integrate your product with them, it kind of 0:04:54.760 --> 0:04:57.839 saves you from getting disrupted. The question is in the 0:04:57.920 --> 0:04:59.960 long run and then we'll find out what happens is 0:05:00.520 --> 0:05:03.520 will Opening I have that much level of funding to 0:05:03.760 --> 0:05:06.320 keep up with all the promises that they have. They 0:05:06.320 --> 0:05:09.720 have given very high revenue estimates for the next few years. 0:05:10.080 --> 0:05:11.680 But at the same time, I mean, the rest of 0:05:11.720 --> 0:05:14.800 the bigger you know, tech vendors are not you know, 0:05:15.320 --> 0:05:17.760 just sleeping. At that point, I would say, we'll find 0:05:17.800 --> 0:05:20.440 out whether Opening I will be able to gain market 0:05:20.440 --> 0:05:23.799 share from the likes of you know, Microsoft, Apple, Google 0:05:24.000 --> 0:05:28.240 and Meta or Amazon, or this is going to be 0:05:28.320 --> 0:05:30.000 just an expansion of the overall market. 0:05:31.000 --> 0:05:33.440 Stay with us. More from Bloomberg Intelligence coming. 0:05:33.320 --> 0:05:40.359 Up after this, you're listening to the Bloomberg Intelligence podcast. 0:05:40.720 --> 0:05:44.080 Catch us live weekdays at ten am Eastern on Applecarplay 0:05:44.120 --> 0:05:47.080 and Android Auto with the Bloomberg Business App. Listen on 0:05:47.160 --> 0:05:50.400 demand wherever you get your podcasts, or watch us live 0:05:50.480 --> 0:05:51.120 on YouTube. 0:05:52.160 --> 0:05:54.520 Speaking of an industry that's kind of I don't know, 0:05:54.839 --> 0:05:57.080 in transition, that's probably the polite way to say it 0:05:57.160 --> 0:06:00.640 is the auto industry. And saw General Motors today incurring 0:06:00.680 --> 0:06:03.560 a one point six billion dollars in charges related to 0:06:03.640 --> 0:06:07.919 pairing back electric vehicle productions plans due to flagging federal 0:06:07.960 --> 0:06:09.080 support for plug in vehicle. 0:06:09.120 --> 0:06:09.960 Steve Man joins us. 0:06:10.160 --> 0:06:13.920 He covers the global autos and industrials industry for Bloomberg Intelligence. 0:06:14.520 --> 0:06:17.960 Steve tell us what's in this charge? Why is GM 0:06:18.000 --> 0:06:19.560 doing this? And why is it and why is GM 0:06:19.600 --> 0:06:20.200 doing this now? 0:06:21.360 --> 0:06:25.359 Look, Paul, I used to work at GM prior to 0:06:25.600 --> 0:06:29.440 being an analyst on the South Side, And look, I 0:06:29.480 --> 0:06:32.280 think what GM is doing today is a little bit 0:06:32.360 --> 0:06:38.040 unprecedented because they're actually changing shifting that changing the direction 0:06:38.080 --> 0:06:42.520 of that ship around fairly quickly. You know, once you know, 0:06:42.560 --> 0:06:46.680 when they in the seventy five hundred dollars subsidy expire. 0:06:47.680 --> 0:06:51.320 You know, they knew they had a portfolio that was 0:06:52.120 --> 0:06:55.120 not congruent with with what they think sales is going 0:06:55.200 --> 0:06:58.479 to be, So they're going to have to rationalize that 0:06:58.480 --> 0:07:02.760 that that portfolio. They've been the most aggressive, if not globally, 0:07:03.120 --> 0:07:05.599 but amongst the top you know, the big three in 0:07:05.680 --> 0:07:09.039 Detroit in rolling out new evs. So you know they're 0:07:09.040 --> 0:07:13.000 gonna have to review that portfolio, maybe even ween out 0:07:13.080 --> 0:07:17.680 some of the lower sales not less profitable EV's going 0:07:17.880 --> 0:07:18.560 going forward. 0:07:18.840 --> 0:07:21.240 Yeah, what surprised me about this action? Like you said, 0:07:21.280 --> 0:07:24.160 they've been pretty aggressive on the EV front. Is Ford 0:07:24.600 --> 0:07:28.000 has delayed or scrapped some plug in models and definitely 0:07:28.000 --> 0:07:29.280 moved money away. 0:07:29.000 --> 0:07:31.480 From the EV business, which it's been losing money on. 0:07:31.760 --> 0:07:34.160 And it seemed like General Motors was taking the stance 0:07:34.200 --> 0:07:36.240 of like, no, that's not us, we are going forward 0:07:36.280 --> 0:07:39.720 with this. Is GM simply catching up to the economic 0:07:39.800 --> 0:07:42.920 realities that Ford has already acknowledged, or is there a 0:07:42.920 --> 0:07:44.320 different strategy at play here. 0:07:45.360 --> 0:07:48.800 I think it's really hard to foresee. These policies are 0:07:48.880 --> 0:07:52.840 changing so fast. You know, with Biden in the administration, 0:07:53.040 --> 0:07:55.280 there was a huge push you know, not just GM, 0:07:55.320 --> 0:07:58.720 but a lot of autumn, Makers was pushing evs. You 0:07:58.800 --> 0:08:02.680 had new startupsbian like Lucid pushing evs. But you know, 0:08:02.760 --> 0:08:07.560 things have changed, and look GM is reacting to it. 0:08:07.560 --> 0:08:10.119 It's interesting you brought up Ford and now actually Ford, 0:08:10.440 --> 0:08:13.600 Chris Farley looks actually pretty good, right, he looks like 0:08:13.640 --> 0:08:17.080 he made the right call. But I think you know, 0:08:17.240 --> 0:08:19.880 if you look at the bigger picture, what GM is 0:08:19.920 --> 0:08:23.840 doing today is probably just the beginning. We'll probably hear more, 0:08:23.960 --> 0:08:27.640 not just from GM, but from the other makers in 0:08:27.760 --> 0:08:30.160 terms of their ev plans going forward. 0:08:30.400 --> 0:08:35.560 Has this changed the way you're viewing the evolution to 0:08:35.679 --> 0:08:38.760 evs that hey, maybe it's not going to be as 0:08:38.800 --> 0:08:40.680 far as we thought or as quick as we thought. 0:08:40.840 --> 0:08:42.400 How should we think about that? Because it seems to 0:08:42.440 --> 0:08:43.679 have lost steam. 0:08:43.679 --> 0:08:44.880 And I'm not sure if it's just tied to this 0:08:44.960 --> 0:08:47.960 administration and it's policies and names, or is it more 0:08:48.000 --> 0:08:48.640 market driven. 0:08:49.640 --> 0:08:52.600 Well, I think it's it's up in the air. You know, personally, 0:08:52.800 --> 0:08:56.080 I still think there is a market for EV's, not 0:08:56.120 --> 0:09:00.000 necessarily in the US. You know, the Chinese are still 0:09:00.160 --> 0:09:04.600 pushing evs. The Europeans the certain extents are a certain 0:09:04.640 --> 0:09:08.720 extent are also pushing ev I think, you know, with 0:09:08.880 --> 0:09:14.960 the current policies of no subsidies, no penalties for you know, 0:09:15.040 --> 0:09:19.640 selling gas guzzlers. Uh and and you know us consumer 0:09:20.440 --> 0:09:23.360 still loving the gasoline engine. I think it's just going 0:09:23.440 --> 0:09:25.680 to take a little bit more time to shift to 0:09:25.960 --> 0:09:29.640 a greater penetration EV. Look, there is demand, right because 0:09:29.679 --> 0:09:32.480 if you look just before the expiration of the seventy 0:09:32.480 --> 0:09:37.440 five hundred dollars subsidy, we did see a spike in 0:09:37.520 --> 0:09:40.880 EV sales, be EV sales. So there is a certain 0:09:40.920 --> 0:09:44.120 segment of the consumer that is looking for evs and 0:09:44.160 --> 0:09:46.480 I think a lot of people who have driven EV's 0:09:46.960 --> 0:09:51.360 love them. So, look, it's just going to take time, right, 0:09:51.360 --> 0:09:54.520 It's going to take time to get there. There's there's 0:09:54.520 --> 0:09:57.280 still other hurdles that the EV industry has to has 0:09:57.360 --> 0:10:00.880 to overcome, for example, the charging the structure, you know 0:10:01.000 --> 0:10:02.439 that that needs to be built out. 0:10:03.280 --> 0:10:04.360 Yeah, no, no kidding. 0:10:05.120 --> 0:10:07.800 Which legacy automaker, not just in the US, but around 0:10:07.880 --> 0:10:11.800 the world has figured out, you know, the best approach 0:10:11.880 --> 0:10:14.760 to EV's, you know, gotten the balance correctly. 0:10:15.600 --> 0:10:18.160 Yeah, I just take a step back. I think GM 0:10:18.400 --> 0:10:22.840 is probably the best because they actually have even with 0:10:22.880 --> 0:10:28.920 this about face, yes, because they're reacting to reality fairly quickly. Look, 0:10:28.960 --> 0:10:33.520 they're they're cutting back on the US UH EV capacity 0:10:33.760 --> 0:10:38.080 potentially EV product offering, but they're actually doing fairly well 0:10:38.320 --> 0:10:42.400 in China. They do have plug in hybrids, they do 0:10:42.480 --> 0:10:45.000 have extended range evs, which I think we talked about 0:10:45.000 --> 0:10:48.280 it here before. And uh they also have battery electric 0:10:48.360 --> 0:10:51.400 vehicles in China, and you know, sales have been improving 0:10:51.840 --> 0:10:53.560 over the past few quarters over there. 0:10:54.360 --> 0:10:57.520 Stay with us. More from Bloomberg Intelligence coming up after this. 0:11:01.400 --> 0:11:05.120 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:11:05.200 --> 0:11:08.559 weekdays at ten am Eastern on Applecarplay and Android Auto 0:11:08.679 --> 0:11:11.760 with the Bloomberg Business app. Listen on demand wherever you 0:11:11.800 --> 0:11:15.200 get your podcasts, or watch us live on YouTube. 0:11:16.200 --> 0:11:18.400 I think back in the pandemic, we all became, whether 0:11:18.400 --> 0:11:20.600 we wanted to or not, we became experts on the 0:11:20.640 --> 0:11:24.520 global supply chain and how fragile that is. And that 0:11:24.640 --> 0:11:28.400 is no more evident than in the airline business and 0:11:28.480 --> 0:11:32.320 aircraft manufacturing business. Apparently, it's not an easy thing to 0:11:32.400 --> 0:11:36.480 build a jet aircraft here, and you need specialized skills 0:11:36.480 --> 0:11:39.520 and people with those skills. That's still rippling through the 0:11:39.600 --> 0:11:44.920 aviation and aerospace industries Boeing and Airbus are suffering quote 0:11:45.000 --> 0:11:49.640 unprecedented delays and certifying delivering aircraft, stiffing airlines growth and 0:11:49.679 --> 0:11:51.359 plans to decarbonized. 0:11:51.360 --> 0:11:53.640 Customers are saying George Ferguson joints us here. 0:11:53.800 --> 0:11:57.040 He's a senior aerospace, Defense and airlines anamals for Bloomberg Intelligence. 0:11:57.440 --> 0:12:00.000 George, it's we're well passed the pandemic here. 0:12:00.320 --> 0:12:03.800 I know you've educated us and explaining to us how 0:12:03.880 --> 0:12:07.040 just how intense these supply chains are and how complicated 0:12:07.080 --> 0:12:09.520 they are. Give us an update on the ability of 0:12:09.559 --> 0:12:12.720 Airbus and Boeing to deliver aircraft to their customers. 0:12:13.360 --> 0:12:16.319 Yeah, so, I think the update would be that Boeing 0:12:16.440 --> 0:12:19.400 is converging, I think on air Bus as far as 0:12:19.440 --> 0:12:23.440 delivery numbers. You know, Airbus sort of came out of 0:12:23.440 --> 0:12:27.480 the pandemic with supply chains I think, in relatively better shape, 0:12:28.520 --> 0:12:32.200 and they were doing better at deliveries because of that. 0:12:32.360 --> 0:12:35.840 But recently things have stagnated, and so Airbus has been 0:12:35.920 --> 0:12:40.640 having problems getting engines from specifically ge which is making 0:12:40.720 --> 0:12:43.800 hard for them to deliver their bread and butter aircraft, 0:12:43.840 --> 0:12:47.439 the A three twenty. During the month of they delivered 0:12:47.480 --> 0:12:50.280 fifty nine a three twenties not bad, but they want 0:12:50.280 --> 0:12:53.720 to be at seventy five a month by twenty twenty seven, 0:12:54.400 --> 0:12:56.160 and they have months where they're in the forties and 0:12:56.240 --> 0:12:59.120 so very sporadic. Again, I think a lot of it 0:12:59.160 --> 0:13:01.640 has to do with that g supply chain. So it 0:13:01.720 --> 0:13:05.439 was an okay month, I think for Airbus in an 0:13:05.440 --> 0:13:07.520 okay quarter, they have a lot of work to do 0:13:08.000 --> 0:13:09.800 to get to their targets. For the end of the year. 0:13:10.880 --> 0:13:15.719 Boeing just reported deliveries. They're in the fifties. Most importantly, 0:13:16.559 --> 0:13:20.160 seven thirty seven's are around forty I think it was 0:13:20.200 --> 0:13:23.120 for the month, which is a pretty good number. It's 0:13:23.120 --> 0:13:26.199 been it's a little bit less than August, but has 0:13:26.240 --> 0:13:29.640 been improving. That's how they're going to drive cash flow 0:13:29.679 --> 0:13:33.760 and profitability, better cash flow and profitability. So it looks 0:13:33.800 --> 0:13:37.199 like Boeing really starting to get there through poo in 0:13:37.360 --> 0:13:40.920 the factory sort of in hand and working well and 0:13:40.960 --> 0:13:44.360 starting to deliver some of that inventory aircraft, which will 0:13:44.400 --> 0:13:47.760 reduce some of the drag of on their earnings. 0:13:48.120 --> 0:13:52.960 So at a recent investor or industry conference, Ben Smith 0:13:53.000 --> 0:13:56.480 of Air France KALM said, for some long haul airplanes, 0:13:56.520 --> 0:13:58.960 we've been waiting for certification for seven or eight years, 0:13:59.000 --> 0:14:00.000 which is unprecedented. 0:14:01.679 --> 0:14:04.079 What's going on with with some of those wide body jets. 0:14:04.920 --> 0:14:07.000 Yeah, I mean the Triple seven is I think he's 0:14:07.040 --> 0:14:09.040 referring to Triple seven right. Boeing has been trying to 0:14:09.040 --> 0:14:11.400 get the Triple seven X, their latest version of the 0:14:11.440 --> 0:14:15.600 Triple seven certified, and it just keeps pushing, and recently 0:14:16.120 --> 0:14:19.000 it pushed from a twenty twenty six initial delivery to 0:14:19.640 --> 0:14:23.000 a twenty twenty seven. I think you know a lot 0:14:23.000 --> 0:14:26.200 of these airlines, you know, they're looking for this airplane 0:14:26.200 --> 0:14:27.720 because it's going to be it's going to be the 0:14:27.760 --> 0:14:30.680 biggest in the sky, right since the seven forty seven 0:14:30.920 --> 0:14:34.760 and the A three eighty have been retired, this is 0:14:34.800 --> 0:14:36.680 going to be the sort of the biggest seat count 0:14:36.680 --> 0:14:39.760 you can get. So it's really good for driving sea 0:14:39.840 --> 0:14:43.760 cost efficiencies at airlines. It's still though a small portion 0:14:44.560 --> 0:14:47.280 of Boeing's business. I mean the backlogs I think around 0:14:47.360 --> 0:14:50.680 four hundred, so it's not huge. The biggest backlogs are 0:14:50.680 --> 0:14:54.680 to the Middle East, to Emirates and to Katar And 0:14:54.960 --> 0:14:58.040 my guess is that as Boeing manages challenges in the 0:14:58.080 --> 0:15:02.720 engineering workforce, Unfortunately. I think Triple seven sometimes maybe get 0:15:02.760 --> 0:15:06.400 some short shrift, and so certification sort of keeps getting 0:15:06.440 --> 0:15:06.840 pushed on. 0:15:06.840 --> 0:15:11.680 That one US government shutdown can't be helping this industry 0:15:11.680 --> 0:15:13.560 in terms of getting a certification and things like that. 0:15:13.640 --> 0:15:16.920 Are any of the companies calling that out as a challenge. 0:15:16.840 --> 0:15:18.160 Not Yeah, I mean we're about to go in an 0:15:18.160 --> 0:15:20.960 earning season, right, so they're all in quiet period. I 0:15:21.000 --> 0:15:25.600 think we'll hear. But I think you're right. The FAA, 0:15:25.720 --> 0:15:29.320 i'm sure is not working at you sort of full 0:15:29.360 --> 0:15:31.960 gallop at this point given the government shutdown. There's some 0:15:32.000 --> 0:15:35.120 folks I'm sure that still have to work, but it's 0:15:35.160 --> 0:15:39.400 not gonna help certification. We'll see how much longer it lasts. Again, 0:15:39.960 --> 0:15:43.880 Triple seven we'd like to see certified and delivered. We 0:15:43.920 --> 0:15:48.400 think Boeing still can keep that line open well into 0:15:48.440 --> 0:15:50.240 twenty twenty seven. They have a lot of orders for 0:15:50.280 --> 0:15:54.880 the freighter still. But you know, companies like Emirates Air 0:15:54.880 --> 0:15:57.520 France KLM cut to our chomping at the bit to 0:15:57.520 --> 0:15:59.600 get that airplane in the portfolio. Leftons too. 0:16:00.000 --> 0:16:02.600 What's the labor situation in the aerospace business. You explained 0:16:02.640 --> 0:16:03.360 to us that the. 0:16:03.280 --> 0:16:06.240 Industry lost a lot of talented skilled people during the pandemic, 0:16:06.280 --> 0:16:09.000 and it's kind of hard to retrain find these people 0:16:09.000 --> 0:16:10.040 and retrain them. 0:16:10.400 --> 0:16:13.680 Yeah, it's getting better, and I think you could sort 0:16:13.680 --> 0:16:17.480 of look at some of those those labor indicators, like 0:16:17.560 --> 0:16:21.560 the you know these surveys that show jobs, jobs open, 0:16:21.560 --> 0:16:24.520 and people looking for jobs. During the pandemic, there were 0:16:24.600 --> 0:16:26.920 a lot more jobs open than people looking for jobs 0:16:27.320 --> 0:16:33.680 that sense crisscrossed. So that will improve stability in the 0:16:33.720 --> 0:16:36.880 air space supply chain. I guess it's not as an 0:16:36.880 --> 0:16:39.760 exciting career as it maybe it was back when I 0:16:39.800 --> 0:16:41.520 was a boy, I guess for a long time ago. 0:16:42.440 --> 0:16:45.160 And so you know, there's people that would love to 0:16:45.160 --> 0:16:47.400 be able to work at home. You can't really do 0:16:47.520 --> 0:16:51.160 that when you're manufacturing airplanes. So they've had a hard 0:16:51.160 --> 0:16:54.200 time sort of backfilling a lot of the baby boomers 0:16:54.200 --> 0:16:58.040 that left, and the new workforce just isn't as I 0:16:58.080 --> 0:17:01.120 would say, I don't know if it's fair adept with 0:17:01.240 --> 0:17:04.679 their hands maybe as the boomers. And so they're bringing 0:17:04.720 --> 0:17:08.080 people in that haven't worked manufacturing and trying to teach 0:17:08.119 --> 0:17:10.400 them how to do that kind of business, which makes 0:17:10.400 --> 0:17:13.760 it even harder to train up. But it is improving again, 0:17:13.800 --> 0:17:15.760 We're seeing it. I think in the throughput we're getting 0:17:15.760 --> 0:17:19.639 out of Boeing. The delivery numbers today are indicator of it. 0:17:19.680 --> 0:17:23.080 And as we see the you know, the uh what 0:17:23.200 --> 0:17:25.800 we call it, the employment situation, get back and balance 0:17:25.800 --> 0:17:26.320 it all out. 0:17:27.200 --> 0:17:30.280 Stay with us. More from Bloomberg Intelligence coming up after this. 0:17:33.800 --> 0:17:37.480 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:37.560 --> 0:17:40.640 weekdays at ten am Eastern on Apple, Coarclay, and Android 0:17:40.680 --> 0:17:43.959 Auto with the Bloomberg Business App. Listen on demand wherever 0:17:44.040 --> 0:17:47.160 you get your podcasts, or watch us live on YouTube. 0:17:48.040 --> 0:17:50.159 There's a million important things we can talk about, but 0:17:50.200 --> 0:17:53.639 I have to lead off with this. Keleanova offering a 0:17:53.720 --> 0:17:56.639 version of pop Tarts with higher protein content starting in 0:17:56.720 --> 0:18:00.640 early November. This follows Pepsi's plans for higher protein version 0:18:00.680 --> 0:18:03.359 of do Ritos. How do you know what protein is 0:18:03.440 --> 0:18:06.440 and how you added into something? Jen, what's going on here? 0:18:07.119 --> 0:18:10.439 Yeah, hi, Paul. So really what we're seeing is a 0:18:10.480 --> 0:18:12.760 lot of these package free companies are tapping into this 0:18:12.880 --> 0:18:16.480 protein trend. It's something that consumers are really looking for. 0:18:16.880 --> 0:18:18.400 And at the end of the day, when it comes 0:18:18.440 --> 0:18:21.000 to PepsiCo or it comes to Kelenova, This is really 0:18:21.040 --> 0:18:24.840 about making people feel marginally better about eating food that 0:18:24.960 --> 0:18:28.119 is bad for them. Right, Let's let's just be honest 0:18:28.160 --> 0:18:30.840 about it, right. So you know, when you put protein 0:18:30.880 --> 0:18:33.160 on the package, people feel like, even if they're making 0:18:33.160 --> 0:18:35.320 a bad choice, it's not as bad as it could 0:18:35.359 --> 0:18:37.440 have been. And that's really what's behind this. 0:18:37.760 --> 0:18:41.280 It's like the equivalent of vanity sizing at retailers. Right, 0:18:41.320 --> 0:18:43.199 you know, you're actually size six, but we're going to 0:18:43.200 --> 0:18:45.160 tell you you're a size two so you feel better 0:18:45.160 --> 0:18:48.520 and buy more clothes. Is this as simple, jen as 0:18:48.720 --> 0:18:52.720 just adding protein powder on top of the Kellogg's pop tarts? 0:18:52.760 --> 0:18:54.320 Excuse me, Kelenova pop arts. 0:18:54.960 --> 0:18:57.720 Yes, so what they've done is they've they've added protein 0:18:57.760 --> 0:19:01.119 into the pastry part of the pop tarts and that 0:19:01.280 --> 0:19:03.400 changes the texture and the taste just a little bit. 0:19:04.160 --> 0:19:06.679 But what's really interesting is the consumer trend behind it. 0:19:06.760 --> 0:19:09.760 You know, we ran a proprietary protein study back in 0:19:09.800 --> 0:19:12.280 the middle of the summer, and what we saw was 0:19:12.280 --> 0:19:16.800 that almost forty percent of consumers eat something with protein enhanced, 0:19:17.119 --> 0:19:19.720 whether it's a snack or a beverage, on a weekly basis. 0:19:20.520 --> 0:19:23.199 And you know, at least thirty eight percent said that 0:19:23.240 --> 0:19:27.760 they're eating more protein enhanced products in the last three months. 0:19:27.920 --> 0:19:30.800 So clearly there's a consumer uptake, there's interest in this, 0:19:31.000 --> 0:19:33.040 and that's what these companies are really tapping into. 0:19:33.320 --> 0:19:35.600 Do I want more protein? Do I need more protein? 0:19:35.680 --> 0:19:38.280 I'm eating more egg whites, but that's because it's available 0:19:38.280 --> 0:19:38.640 at work. 0:19:38.800 --> 0:19:39.440 What are you doing? 0:19:39.800 --> 0:19:42.760 I don't know the same thing of your goldfish? 0:19:42.760 --> 0:19:44.120 Do not have extra protein. 0:19:43.840 --> 0:19:47.600 On the goldfish? Have extra protein? 0:19:47.840 --> 0:19:49.919 Neither of you are on GLP one drugs, right, But 0:19:50.000 --> 0:19:52.679 protein is a big solution for people who are on 0:19:52.760 --> 0:19:55.800 those drugs because you tend to lose muscle mass as 0:19:55.800 --> 0:19:58.600 a side effect of those drugs, and so as the 0:19:58.680 --> 0:20:01.520 uptake of GLP one goes up, there's more and more 0:20:01.560 --> 0:20:03.399 demand for these protein and Harry products. 0:20:03.480 --> 0:20:04.240 That's what I needed. 0:20:04.280 --> 0:20:06.800 Okay, now I'm at a cocktail party and I need 0:20:06.840 --> 0:20:08.280 to sound smart on proteins. 0:20:08.280 --> 0:20:08.960 Now I got my line. 0:20:08.960 --> 0:20:12.080 But apparently fiber is the new protein and jen Is. 0:20:12.119 --> 0:20:14.119 Didn't the PepsiCo CEO say something about this? 0:20:15.160 --> 0:20:18.479 Yeah, you know, whether it's anything that helps kind of 0:20:18.560 --> 0:20:22.040 enhance the product. So when you're talking about Dorito's that 0:20:22.119 --> 0:20:26.200 they have additional milk protein being added you know, higher 0:20:26.240 --> 0:20:29.000 fiber products. All of these things are things that people, 0:20:29.359 --> 0:20:32.560 the average consumer perceives as having a health or wellness benefit, 0:20:33.119 --> 0:20:35.600 and people are trying, in small steps to be a 0:20:35.640 --> 0:20:36.879 little bit better about their health. 0:20:37.359 --> 0:20:39.080 All right, let's get to another story I thought was 0:20:39.200 --> 0:20:43.440 really interesting. Walmart partners with open Ai to offer shopping 0:20:43.840 --> 0:20:45.119 on chat GPT. 0:20:45.560 --> 0:20:49.199 This sounds like a natural what's going on here? 0:20:49.240 --> 0:20:52.520 Jen, Yeah, this is an interesting move, but I think 0:20:52.560 --> 0:20:55.240 it really illustrates sort of that trend of what's happening 0:20:55.280 --> 0:20:59.119 across retail in general. Walmart's really been very good about 0:20:59.600 --> 0:21:02.600 doing it experimentation and kind of checking out what the 0:21:02.600 --> 0:21:07.080