1 00:00:02,520 --> 00:00:10,119 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,119 --> 00:00:13,880 Speaker 1: Bloomberg Balance of Power podcast. Catch us live weekdays at 3 00:00:13,920 --> 00:00:17,119 Speaker 1: noon and five pm Eastern on Apple Coarckley and Android 4 00:00:17,160 --> 00:00:20,560 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 5 00:00:20,600 --> 00:00:24,600 Speaker 1: you get your podcasts, or watch us live on YouTube. 6 00:00:25,360 --> 00:00:26,960 Speaker 2: Great to have you with us here on the Wednesday 7 00:00:27,080 --> 00:00:29,720 Speaker 2: edition of Balance of Power on Bloomberg TV and Radio. 8 00:00:29,760 --> 00:00:33,680 Speaker 2: With breaking news from Washington. Multiple reports now about a 9 00:00:33,720 --> 00:00:37,960 Speaker 2: Pentagon watchdog report into the Signal Gate scandal, finding that 10 00:00:38,000 --> 00:00:41,720 Speaker 2: Defense Secretary Pete Hegseth violated some of the department's regulations 11 00:00:42,000 --> 00:00:45,000 Speaker 2: when he shared sensitive information from his cell phone on 12 00:00:45,159 --> 00:00:49,800 Speaker 2: signal and in fact may have endangered troops in the process. 13 00:00:49,840 --> 00:00:51,559 Speaker 2: We're going to have a lot more on this when 14 00:00:51,560 --> 00:00:54,120 Speaker 2: we spend some time with Nick Wadhams, and coming up 15 00:00:54,160 --> 00:00:56,640 Speaker 2: as well, Jane Harmon will join us in studio with 16 00:00:56,680 --> 00:01:00,280 Speaker 2: our eyes on tomorrow's testimony from the admiral that ordered 17 00:01:00,320 --> 00:01:02,760 Speaker 2: the second strike on the alleged drug boat coming out 18 00:01:02,800 --> 00:01:05,280 Speaker 2: of Venezuela. This was, of course, a big topic of 19 00:01:05,319 --> 00:01:09,080 Speaker 2: conversation as President Trump held his final cabinet meeting of 20 00:01:09,120 --> 00:01:12,480 Speaker 2: the year, yesterday, and sitting right next to him was 21 00:01:12,480 --> 00:01:15,280 Speaker 2: the Defense Secretary Pete Hegseth, who made clear that he 22 00:01:15,400 --> 00:01:18,399 Speaker 2: was not in fact the one who ordered that second strike, 23 00:01:18,440 --> 00:01:20,720 Speaker 2: and while he was watching the attack live on a 24 00:01:20,760 --> 00:01:24,920 Speaker 2: live video feed, he had left the room before it 25 00:01:24,959 --> 00:01:26,959 Speaker 2: was clear that there were survivors in the water who 26 00:01:27,000 --> 00:01:30,280 Speaker 2: were then killed by the second strike. President Trump was 27 00:01:30,319 --> 00:01:33,600 Speaker 2: asked about this before heg Seth even got into details, 28 00:01:33,600 --> 00:01:36,759 Speaker 2: and clearly not concerned about the way this all unfolded. 29 00:01:36,800 --> 00:01:38,800 Speaker 3: Here's what the Commander in chief had to say. 30 00:01:39,640 --> 00:01:43,120 Speaker 4: I would say this, they had a strike. 31 00:01:43,600 --> 00:01:46,000 Speaker 5: I hear the gentleman that was in charge of that 32 00:01:46,080 --> 00:01:50,520 Speaker 5: as extraordinary, as extraordinary personal a peach speak about him. 33 00:01:51,160 --> 00:01:55,640 Speaker 5: But who said Pete didn't know about second attack? Having 34 00:01:55,680 --> 00:02:00,040 Speaker 5: to do two people, and I guess p would I 35 00:02:00,080 --> 00:02:02,280 Speaker 5: have to speak to it. I can say this, I 36 00:02:02,320 --> 00:02:04,800 Speaker 5: want those boats taken out, and if we have to, 37 00:02:04,840 --> 00:02:07,720 Speaker 5: will attack on land also just like we attack on see. 38 00:02:09,120 --> 00:02:12,720 Speaker 2: Hegseth said, We're just beginning attacks like these tomorrow. As 39 00:02:12,760 --> 00:02:17,120 Speaker 2: I mentioned, Admiral Frank Bradley, who ordered that second strike, 40 00:02:17,200 --> 00:02:21,480 Speaker 2: will testify before the Senate Armed Services Committee. As members 41 00:02:21,480 --> 00:02:25,040 Speaker 2: of Congress try to get answers that were not delivered 42 00:02:25,120 --> 00:02:27,920 Speaker 2: yesterday in the cabinet meeting. Nick Wahams, who runs our 43 00:02:27,960 --> 00:02:30,359 Speaker 2: national security coverage here in Washington, is with us in 44 00:02:30,440 --> 00:02:31,880 Speaker 2: studio with more on this. 45 00:02:31,960 --> 00:02:32,160 Speaker 3: Nick. 46 00:02:32,160 --> 00:02:35,200 Speaker 2: When you add everything up here, the questions about Venezuela, 47 00:02:35,280 --> 00:02:39,200 Speaker 2: the testimony tomorrow, this signal gate IG report that just dropped, 48 00:02:39,680 --> 00:02:41,800 Speaker 2: this is probably not a fun day for Pete Hegseth. 49 00:02:41,840 --> 00:02:44,200 Speaker 2: By the way, he's lighting the Pentagon Christmas tree a few. 50 00:02:44,040 --> 00:02:47,160 Speaker 6: Hours right, and we will be watching that one. I mean, listen, 51 00:02:47,200 --> 00:02:48,760 Speaker 6: there are a couple of things going on here. One, 52 00:02:48,840 --> 00:02:51,480 Speaker 6: it is undeniable that he has had a series of 53 00:02:51,520 --> 00:02:56,440 Speaker 6: controversies and mishaps dating back to even before the administration 54 00:02:57,040 --> 00:03:01,160 Speaker 6: took office. His confirmation hearing was fraud he cleared by 55 00:03:01,160 --> 00:03:04,760 Speaker 6: a single vote. There were a lot of reports about 56 00:03:04,840 --> 00:03:11,280 Speaker 6: alcohol use, allegations of assault, all sorts of unsavory things 57 00:03:11,320 --> 00:03:14,200 Speaker 6: in there, and that's been followed by a repeated string 58 00:03:14,240 --> 00:03:17,800 Speaker 6: of things, the signal situation, and then this argument that 59 00:03:17,880 --> 00:03:20,840 Speaker 6: he essentially was not there to see the second strike 60 00:03:20,919 --> 00:03:24,400 Speaker 6: on this vessel that killed some survivors in what some 61 00:03:24,880 --> 00:03:27,280 Speaker 6: experts are saying as war crime. At the same time, 62 00:03:27,880 --> 00:03:31,880 Speaker 6: President continues, at least publicly to say he remained satisfied 63 00:03:32,120 --> 00:03:35,320 Speaker 6: with Pete Hexath and what you have. What the President 64 00:03:35,400 --> 00:03:39,400 Speaker 6: has in his defense. Secretary is an official who has 65 00:03:39,440 --> 00:03:44,400 Speaker 6: been unstintingly loyal, has really pushed the MAGA agenda, has 66 00:03:44,760 --> 00:03:50,400 Speaker 6: gone after DEI and woke what he sees as woke policies, 67 00:03:50,840 --> 00:03:54,920 Speaker 6: has been on board with the President's push to revamp 68 00:03:55,080 --> 00:04:00,200 Speaker 6: procurement budgeting. All sorts of stuff within the Pentagon are 69 00:04:00,240 --> 00:04:04,200 Speaker 6: at least it appears that President Trump believes that the 70 00:04:04,760 --> 00:04:07,760 Speaker 6: positives outweigh the negatives when it comes to Secretary exits. 71 00:04:07,800 --> 00:04:13,120 Speaker 2: Wow, will we see a clarified policy when it comes 72 00:04:13,160 --> 00:04:17,200 Speaker 2: to Venezuela. Following these investigations go Armed Services committees in 73 00:04:17,240 --> 00:04:20,200 Speaker 2: both chambers looking into this. Once they get the Admiral's 74 00:04:20,240 --> 00:04:22,520 Speaker 2: take on this, I assume there'll be some sort of 75 00:04:22,560 --> 00:04:24,040 Speaker 2: report what follows. 76 00:04:24,440 --> 00:04:27,000 Speaker 6: Well, you know, I think you actually have seen a 77 00:04:27,040 --> 00:04:30,560 Speaker 6: more clear policy in the sense of what hasn't happened 78 00:04:30,600 --> 00:04:33,480 Speaker 6: because after that initial strike, that was the first strike 79 00:04:33,920 --> 00:04:38,680 Speaker 6: that the US did on September second, and the reporting 80 00:04:38,800 --> 00:04:41,839 Speaker 6: we have gleaned since then, and what officials have confirmed 81 00:04:41,920 --> 00:04:43,960 Speaker 6: is that there were two at least two hits maybe 82 00:04:44,000 --> 00:04:47,240 Speaker 6: even more on that boat, one to take it out 83 00:04:47,279 --> 00:04:49,960 Speaker 6: of action, and then a second to fully destroy the 84 00:04:50,000 --> 00:04:53,280 Speaker 6: boat and also kill survivors. What we do know since 85 00:04:53,320 --> 00:04:58,320 Speaker 6: then is that they have not done secondary or tertiary 86 00:04:58,360 --> 00:05:02,719 Speaker 6: strikes to kill survive. So you had the case some 87 00:05:02,880 --> 00:05:07,000 Speaker 6: weeks ago where they actually then went in and collected 88 00:05:07,000 --> 00:05:09,800 Speaker 6: people who had survived the animal strike and sent them home. 89 00:05:10,279 --> 00:05:15,680 Speaker 6: So that was based on we we don't know what 90 00:05:16,480 --> 00:05:20,360 Speaker 6: happened there exactly what, but putting together those two events, 91 00:05:20,440 --> 00:05:24,560 Speaker 6: the experts we have spoken to suggest that would indicate 92 00:05:25,279 --> 00:05:28,440 Speaker 6: a change in policy, that there may have been a 93 00:05:28,520 --> 00:05:35,000 Speaker 6: recognition that the initial version got them into very very 94 00:05:35,040 --> 00:05:41,599 Speaker 6: thorny legal trouble, moral trouble. Geneva conventions explicitly say you 95 00:05:41,839 --> 00:05:45,080 Speaker 6: cannot do this, that that is a violation of international law. 96 00:05:46,240 --> 00:05:49,200 Speaker 6: So just based on the actions that they have taken, 97 00:05:49,279 --> 00:05:52,320 Speaker 6: we did not we have not seen a pattern that 98 00:05:52,440 --> 00:05:55,800 Speaker 6: was repeated, at least publicly that we know of based 99 00:05:55,839 --> 00:05:57,279 Speaker 6: on what happened on that September. 100 00:05:57,320 --> 00:05:59,200 Speaker 2: Second, just to be clear, it's important what you just said, 101 00:05:59,240 --> 00:06:01,559 Speaker 2: and everyone is a little bit too cool for school 102 00:06:01,560 --> 00:06:05,040 Speaker 2: walking around Washington talking about this double tap strike, right, 103 00:06:05,080 --> 00:06:07,440 Speaker 2: you've got survivors in the water that a double tap 104 00:06:07,520 --> 00:06:08,800 Speaker 2: violates the Geneva Convention. 105 00:06:09,720 --> 00:06:12,120 Speaker 6: Yes, I mean, so what's happened is there? I mean 106 00:06:12,160 --> 00:06:14,599 Speaker 6: and the whole And there is an argument that any 107 00:06:14,680 --> 00:06:18,240 Speaker 6: strike whatsoever on these boats is a violation of international 108 00:06:18,320 --> 00:06:21,560 Speaker 6: law because they there's a real challenge of the president's 109 00:06:21,640 --> 00:06:24,320 Speaker 6: argument that these posse in a threat to the United States, 110 00:06:24,400 --> 00:06:27,400 Speaker 6: And for years the US has interdicted these boats, arrested 111 00:06:27,440 --> 00:06:31,000 Speaker 6: the people on them, sees the drugs. Now the President 112 00:06:31,040 --> 00:06:33,880 Speaker 6: says they pose a mortal threat to the United States 113 00:06:33,920 --> 00:06:36,479 Speaker 6: and he has the right to. He calls the people 114 00:06:36,480 --> 00:06:39,920 Speaker 6: on the boat's narco terras. So there's the broad umbrella 115 00:06:40,000 --> 00:06:41,800 Speaker 6: of the fact that there are a lot of very 116 00:06:41,920 --> 00:06:44,200 Speaker 6: serious questions about whether these strikes are legal in the 117 00:06:44,200 --> 00:06:46,560 Speaker 6: first place. But there is very little doubt that if 118 00:06:46,600 --> 00:06:49,640 Speaker 6: you take out the boat, it is no longer a threat, 119 00:06:49,720 --> 00:06:52,680 Speaker 6: and you have survivors clinging to the boat. Yes, it 120 00:06:52,720 --> 00:06:55,280 Speaker 6: would be the same thing as you would see in war, 121 00:06:55,440 --> 00:06:58,560 Speaker 6: where the laws of war prevent you from going around 122 00:06:58,560 --> 00:07:02,760 Speaker 6: and executing the people who have been wounded in your attacks. 123 00:07:03,800 --> 00:07:08,960 Speaker 6: You can't do that. So that's how we now find 124 00:07:09,000 --> 00:07:11,160 Speaker 6: ourselves in this situation. 125 00:07:12,400 --> 00:07:14,320 Speaker 3: He's going to have some interesting things to say as well. 126 00:07:14,480 --> 00:07:16,920 Speaker 6: He is, and it'll be really interesting to see the 127 00:07:16,960 --> 00:07:19,400 Speaker 6: line he walks, because you've seen this from the President 128 00:07:19,400 --> 00:07:22,400 Speaker 6: and also from Pete Hexath in his repeated commentary where 129 00:07:22,440 --> 00:07:25,680 Speaker 6: he says, hey, I wasn't there. I didn't see that happen, 130 00:07:25,920 --> 00:07:29,960 Speaker 6: so sort of distancing himself but also saying I support 131 00:07:30,800 --> 00:07:33,120 Speaker 6: the guy who made the order. He did the right thing. 132 00:07:34,080 --> 00:07:36,520 Speaker 6: So he's walking a very fine line. So Bradley, it'll 133 00:07:36,520 --> 00:07:38,520 Speaker 6: be really interesting to see what he says tomorrow in 134 00:07:38,600 --> 00:07:42,320 Speaker 6: terms of hey, I was just following orders. Will he 135 00:07:42,480 --> 00:07:46,320 Speaker 6: say I believe this order may have been legally questionable. 136 00:07:46,320 --> 00:07:47,840 Speaker 2: We just don't that be made public or we don't 137 00:07:47,880 --> 00:07:49,280 Speaker 2: know that that testimony. 138 00:07:49,720 --> 00:07:52,360 Speaker 6: I'm not sure at this point, we don't know. I 139 00:07:52,480 --> 00:07:54,760 Speaker 6: don't think there will be a public here everything that 140 00:07:54,880 --> 00:07:55,840 Speaker 6: it may have to open up. 141 00:07:55,880 --> 00:07:57,560 Speaker 3: Yeah, thank you, Nick, see it. 142 00:07:57,640 --> 00:08:00,000 Speaker 2: As always, Nick Watams got his hands full these days 143 00:08:00,080 --> 00:08:03,440 Speaker 2: running our national security team here in Washington, with much 144 00:08:03,440 --> 00:08:05,480 Speaker 2: more to consider here. We're going to bring Jane Harmon 145 00:08:05,520 --> 00:08:08,480 Speaker 2: in on this conversation coming up next. But there's an 146 00:08:08,480 --> 00:08:11,840 Speaker 2: important story in the Washington Post today that I'll point 147 00:08:11,880 --> 00:08:15,200 Speaker 2: you to. It might get some eye rolls from folks 148 00:08:15,280 --> 00:08:19,840 Speaker 2: who support what's going on in the Caribbean right now. 149 00:08:19,880 --> 00:08:22,360 Speaker 2: But the family of a Colombian man who is killed 150 00:08:22,360 --> 00:08:26,720 Speaker 2: in a strike September fifteenth has filed a complaint with 151 00:08:26,800 --> 00:08:30,000 Speaker 2: the Inter American Commission on Human Rights alleging the US 152 00:08:30,000 --> 00:08:33,880 Speaker 2: committed human rights violations in an extra judicial killing. I 153 00:08:33,960 --> 00:08:36,120 Speaker 2: just mentioned this because it's the first time a name 154 00:08:36,160 --> 00:08:41,040 Speaker 2: has been attached to any of this. Alejandro Andres Karana Medina, 155 00:08:41,120 --> 00:08:43,920 Speaker 2: forty two year old, a fisherman killed, as I mentioned, 156 00:08:43,960 --> 00:08:48,040 Speaker 2: in the strike off the Colombian coast on September fifteenth. 157 00:08:47,440 --> 00:08:50,720 Speaker 2: He's got a family, turns out, and they've got a lawyer, 158 00:08:51,000 --> 00:08:54,280 Speaker 2: grieving family left without their chief breadwinners. As we read 159 00:08:54,320 --> 00:08:58,960 Speaker 2: here Carranza's family seeking compensation. I guess he had kids. 160 00:09:00,200 --> 00:09:01,920 Speaker 2: Very unclear to see if they have the power to 161 00:09:02,040 --> 00:09:06,439 Speaker 2: enforce any recommendations that are made. I told you Jane 162 00:09:06,480 --> 00:09:08,600 Speaker 2: Harmon was coming, and she's with us in studio today, 163 00:09:08,840 --> 00:09:13,200 Speaker 2: former Democratic congresswoman from California, importantly former ranking member of 164 00:09:13,240 --> 00:09:14,640 Speaker 2: the Intelligence Committee. 165 00:09:15,040 --> 00:09:18,080 Speaker 3: And it's great to see you in the flesh. You too, Joe, 166 00:09:18,160 --> 00:09:19,240 Speaker 3: So if you were. 167 00:09:19,240 --> 00:09:22,600 Speaker 2: Running the Intel Committee right now, either as chair or 168 00:09:22,679 --> 00:09:27,199 Speaker 2: ranking member, what questions would you be asking about what 169 00:09:27,280 --> 00:09:29,600 Speaker 2: is happening in the waters off Venezuela. 170 00:09:30,000 --> 00:09:31,520 Speaker 3: And would you even get a briefing? 171 00:09:31,559 --> 00:09:34,880 Speaker 2: Because as the Democrat on that panel, from what I 172 00:09:35,000 --> 00:09:37,400 Speaker 2: understand now, you still would not have heard from the administration. 173 00:09:37,840 --> 00:09:41,720 Speaker 7: Well, I think Mark Warner said they got very unsatisfying briefings. 174 00:09:41,800 --> 00:09:43,959 Speaker 7: He was the chair, he's now the ranking member on 175 00:09:44,000 --> 00:09:46,480 Speaker 7: the Senate side. I'm not sure what's happened on the 176 00:09:46,480 --> 00:09:48,000 Speaker 7: House side. 177 00:09:48,480 --> 00:09:51,280 Speaker 8: But what would I be doing. I would be raising hell. 178 00:09:51,440 --> 00:09:54,439 Speaker 7: I think Congress not only has a right to be briefed, 179 00:09:54,760 --> 00:09:57,800 Speaker 7: but I think Congress is abdicating its role. I would 180 00:09:57,880 --> 00:10:01,560 Speaker 7: give good marks to three Republicans, at least that I 181 00:10:01,559 --> 00:10:04,680 Speaker 7: can think of, Rand Paul I guess he's a libertarian. 182 00:10:05,400 --> 00:10:08,480 Speaker 7: Roger Wicker, chair of the Senate Armed Services Committee, and 183 00:10:08,520 --> 00:10:12,240 Speaker 7: Mike Rogers, who chairs the House Armed Services Committee. And 184 00:10:12,320 --> 00:10:16,000 Speaker 7: they have been pushing back. But where's the rest of Congress. 185 00:10:16,040 --> 00:10:18,600 Speaker 7: Congress is on trial here, and Congress is really on 186 00:10:18,679 --> 00:10:20,480 Speaker 7: trial with respect to Ukraine. 187 00:10:20,520 --> 00:10:22,680 Speaker 8: That's why I wore my scarf carried back from Kiev. 188 00:10:22,800 --> 00:10:25,040 Speaker 2: Yeah, well, I'd like to get into that in a moment, 189 00:10:25,120 --> 00:10:28,199 Speaker 2: because these are both evolving, both of these stories before 190 00:10:28,200 --> 00:10:29,880 Speaker 2: our eyes here report. 191 00:10:30,440 --> 00:10:32,000 Speaker 3: Well, there's another one for you. 192 00:10:32,080 --> 00:10:34,520 Speaker 2: But in terms of the admiral who ordered this second strike, 193 00:10:34,559 --> 00:10:36,360 Speaker 2: based on what you understand, what's he going to tell 194 00:10:36,400 --> 00:10:39,520 Speaker 2: these committees when he goes to testify tomorrow? How damaging 195 00:10:39,520 --> 00:10:40,520 Speaker 2: could that be? 196 00:10:40,760 --> 00:10:41,360 Speaker 8: I think he. 197 00:10:42,960 --> 00:10:45,520 Speaker 7: Should have followed the advice of the six Democrats who said, 198 00:10:45,559 --> 00:10:47,440 Speaker 7: never follow an illegal order. 199 00:10:48,080 --> 00:10:49,040 Speaker 3: That was an illegal order. 200 00:10:49,440 --> 00:10:52,520 Speaker 7: I believe it was, and I believe he should have 201 00:10:52,559 --> 00:10:55,360 Speaker 7: known that. I'm not sure what he did. Let's be 202 00:10:55,440 --> 00:10:58,000 Speaker 7: sure we know what the timeline is. It's a little 203 00:10:58,000 --> 00:11:04,360 Speaker 7: bit to me to believe that hegseeth, didn't give the 204 00:11:04,480 --> 00:11:07,880 Speaker 7: order and wasn't was too busy to see it executed 205 00:11:08,240 --> 00:11:11,600 Speaker 7: in a case like this, Yeah, surprise, surprise. 206 00:11:11,840 --> 00:11:14,160 Speaker 3: What do you make of that? Yesterday? Pentagon's a busy place. 207 00:11:14,200 --> 00:11:15,079 Speaker 3: I had to get to a meeting. 208 00:11:15,080 --> 00:11:18,680 Speaker 7: He said, Yeah, it is a busy place, and maybe 209 00:11:18,720 --> 00:11:20,840 Speaker 7: he needs to get a little busier about being on 210 00:11:20,880 --> 00:11:24,760 Speaker 7: top of the workload there. Just saying that that rumors 211 00:11:24,760 --> 00:11:29,200 Speaker 7: are rampant doesn't mean they're true, that his days are 212 00:11:29,280 --> 00:11:31,920 Speaker 7: numbered and that Trump maybe doesn't want to do the 213 00:11:31,920 --> 00:11:36,120 Speaker 7: deal personally and wants it somehow to evolve. But I 214 00:11:36,160 --> 00:11:39,560 Speaker 7: think it is He's not well liked in the building, 215 00:11:39,880 --> 00:11:43,600 Speaker 7: he's not well respected, and I think former military and 216 00:11:43,640 --> 00:11:47,320 Speaker 7: I talked to lots of them, are really pretty pretty 217 00:11:47,360 --> 00:11:50,200 Speaker 7: worried about the civilian leadership at the Pentagon. 218 00:11:50,240 --> 00:11:51,880 Speaker 2: A lot of folks pointed out the fact that he 219 00:11:52,040 --> 00:11:55,920 Speaker 2: was not sent to Kiev or Russia for that matter. 220 00:11:55,960 --> 00:11:59,800 Speaker 2: The Army Secretary was in Kiev, Dan Driscoll, talking with Ukrainians. 221 00:12:00,600 --> 00:12:03,240 Speaker 2: But we're still waiting Jane for a readout on this 222 00:12:03,360 --> 00:12:05,800 Speaker 2: meeting with Vladimir Putin, and I want everyone to hear 223 00:12:05,840 --> 00:12:08,040 Speaker 2: first what Marco Rubio, the Secretary of State, had to 224 00:12:08,080 --> 00:12:12,160 Speaker 2: say about this negotiation in the President's Cabinet meeting yesterday. 225 00:12:12,200 --> 00:12:12,679 Speaker 4: Let's listen. 226 00:12:13,240 --> 00:12:15,760 Speaker 9: Every day is a challenge, but it's been driven personally 227 00:12:15,760 --> 00:12:18,040 Speaker 9: by the president. It's the reason why we're involved in 228 00:12:18,040 --> 00:12:20,880 Speaker 9: the soul of Ukraine Russia conflict. That's not our Award's 229 00:12:20,880 --> 00:12:21,719 Speaker 9: not the president's war. 230 00:12:21,760 --> 00:12:23,679 Speaker 3: This war started. It never would have happened if you've 231 00:12:23,679 --> 00:12:24,240 Speaker 3: been president. 232 00:12:24,320 --> 00:12:27,560 Speaker 9: Even as we speak to you now, Steve Woodkoff is 233 00:12:27,600 --> 00:12:29,960 Speaker 9: in Moscow trying to find a way to end this 234 00:12:30,040 --> 00:12:32,640 Speaker 9: war to save lives of eight nine thousand people, mister 235 00:12:32,640 --> 00:12:35,520 Speaker 9: Presidents to are dying every week. More people are dying 236 00:12:35,600 --> 00:12:37,840 Speaker 9: a week in that war than have died in the 237 00:12:38,000 --> 00:12:40,920 Speaker 9: entirety of the US's involvement in Afghanistan. And I rock 238 00:12:41,040 --> 00:12:43,559 Speaker 9: just think about that, how bloody and destructive it is. 239 00:12:44,800 --> 00:12:46,839 Speaker 2: But here's what we've not heard from the White House 240 00:12:47,000 --> 00:12:50,000 Speaker 2: anything about the meeting. Russians have said a lot, but 241 00:12:50,080 --> 00:12:54,160 Speaker 2: there's no readout from the administration, which is extremely unusual. 242 00:12:54,400 --> 00:12:55,320 Speaker 3: How do you read into it? 243 00:12:55,400 --> 00:12:57,480 Speaker 8: Well, a couple of comments. First about Rubio. 244 00:12:57,880 --> 00:13:01,240 Speaker 7: I was in Halifax at the Halifax Security Forum a 245 00:13:01,280 --> 00:13:04,520 Speaker 7: couple of weekends ago when the Codell, led by Jean 246 00:13:04,600 --> 00:13:07,480 Speaker 7: Shaheen but also having Republican members, got a. 247 00:13:07,520 --> 00:13:10,240 Speaker 8: Call that evening the evening that the twenty eight. 248 00:13:10,120 --> 00:13:19,200 Speaker 7: Point plan surfaced from Rubio saying, well, it's just a draft, it's. 249 00:13:17,360 --> 00:13:18,200 Speaker 8: Not cooked yet. 250 00:13:18,960 --> 00:13:20,640 Speaker 7: He wasn't in the room, He had nothing to do 251 00:13:20,679 --> 00:13:22,959 Speaker 7: with it, or probably had nothing to do with it. 252 00:13:23,320 --> 00:13:25,480 Speaker 7: And I think it's dead on arrival. I mean, I 253 00:13:26,679 --> 00:13:28,520 Speaker 7: just want I brought some props. I don't want to 254 00:13:28,559 --> 00:13:31,760 Speaker 7: surprise you. But this was from Senator Mitch McConnell when 255 00:13:31,760 --> 00:13:35,800 Speaker 7: that plan was released. Quote Putin has spent the entire 256 00:13:35,880 --> 00:13:37,760 Speaker 7: year trying to play President Trump. 257 00:13:37,600 --> 00:13:38,040 Speaker 6: For a fool. 258 00:13:38,120 --> 00:13:38,679 Speaker 3: This is a tweet. 259 00:13:39,120 --> 00:13:42,319 Speaker 7: This is a tweet from Mitch McConnell on X And 260 00:13:42,360 --> 00:13:44,880 Speaker 7: this one was from Roger Wicker, whom I just mentioned 261 00:13:44,920 --> 00:13:47,520 Speaker 7: as chair of the Senator Armed Services Committee. 262 00:13:47,640 --> 00:13:47,960 Speaker 3: Quote. 263 00:13:48,000 --> 00:13:50,520 Speaker 7: Any suggestion that we can pursue arms control with a 264 00:13:50,559 --> 00:13:53,400 Speaker 7: serial liar and killer like Putin should be treated with 265 00:13:53,440 --> 00:13:59,640 Speaker 7: great skepticism. So I think that Rubio's trying to make 266 00:13:59,640 --> 00:14:01,960 Speaker 7: his best case. He is the Secretary of State. He 267 00:14:02,120 --> 00:14:04,839 Speaker 7: is the one who should be leading the negotiations. This 268 00:14:04,960 --> 00:14:08,199 Speaker 7: other team. I'm not saying they're terrible people. I'm sure 269 00:14:08,200 --> 00:14:10,079 Speaker 7: they're trying to make a deal, and wouldn't it be 270 00:14:10,160 --> 00:14:13,520 Speaker 7: nice for the war to end? But let's remind everybody 271 00:14:13,520 --> 00:14:16,920 Speaker 7: that Russia was the aggressor and Ukraine is the victim, 272 00:14:17,280 --> 00:14:21,120 Speaker 7: and rewarding Russia and punishing Ukraine is the wrong outcome. 273 00:14:21,160 --> 00:14:23,160 Speaker 2: Well, everything in that plan looks like it would be 274 00:14:23,240 --> 00:14:25,640 Speaker 2: a reward, right, So what do you trust Steve Witkoff 275 00:14:25,680 --> 00:14:27,680 Speaker 2: and Jared Kushner running this conversation? 276 00:14:27,800 --> 00:14:30,200 Speaker 7: Well, I don't want to talk about trust, but the 277 00:14:30,440 --> 00:14:34,120 Speaker 7: plan has explained to me, looked like there was some 278 00:14:34,200 --> 00:14:37,680 Speaker 7: oops in there. There was some bad translation from the Russia. 279 00:14:38,120 --> 00:14:41,640 Speaker 7: Looks like exactly what Mitch McConnell said that Putin is 280 00:14:41,680 --> 00:14:44,440 Speaker 7: playing Trump and if we're not talking about it, then 281 00:14:44,800 --> 00:14:48,640 Speaker 7: I'm betting nothing very much good came today except for 282 00:14:49,080 --> 00:14:55,760 Speaker 7: Russia blasting Europe and threatening some action against Europe. The 283 00:14:55,840 --> 00:15:00,680 Speaker 7: sadness is NATO's meeting today. Rubio has for the first 284 00:15:00,680 --> 00:15:02,320 Speaker 7: time in this century or something. 285 00:15:02,360 --> 00:15:04,200 Speaker 3: What do you make blown off? Sent a deputy. 286 00:15:04,560 --> 00:15:08,040 Speaker 8: I think it's it's a message to NATO and it's. 287 00:15:07,920 --> 00:15:10,680 Speaker 3: A Russia or Europe will have no input on the 288 00:15:10,680 --> 00:15:11,280 Speaker 3: how this ends. 289 00:15:11,200 --> 00:15:13,840 Speaker 7: It's a very bad well, let's see, it's a very 290 00:15:13,880 --> 00:15:15,320 Speaker 7: bad message to NATO. 291 00:15:15,480 --> 00:15:16,720 Speaker 8: Were member of NATO. 292 00:15:16,840 --> 00:15:20,440 Speaker 7: We're not a bystander here, We're a leader of NATO. 293 00:15:20,640 --> 00:15:23,080 Speaker 7: And I think that's a terrible message. And one more 294 00:15:23,120 --> 00:15:26,880 Speaker 7: point I said, Congress is on trial. Congress is on trial. 295 00:15:27,320 --> 00:15:32,040 Speaker 7: There is a Graham Blumenthal bill to impose secondary sanctions 296 00:15:32,080 --> 00:15:33,320 Speaker 7: on all countries. 297 00:15:33,360 --> 00:15:35,920 Speaker 3: All isn't Lindsay Graham talking to Trump about this on the. 298 00:15:36,240 --> 00:15:40,480 Speaker 7: That the deal with Russia, it has eighty five plus 299 00:15:40,520 --> 00:15:43,840 Speaker 7: co sponsors in the Senate. That is a veto proof majority, 300 00:15:43,960 --> 00:15:47,080 Speaker 7: which means if Lindsay Graham, I'm sure Bloomenthal would like 301 00:15:47,280 --> 00:15:51,040 Speaker 7: to do this calls up that bill, that bill passes, 302 00:15:51,520 --> 00:15:54,640 Speaker 7: and it will I'm guessing past the House too, and 303 00:15:54,760 --> 00:15:58,800 Speaker 7: then that is real pressure on Putin. Is Congress for 304 00:15:59,000 --> 00:16:03,120 Speaker 7: Ukraine or is congre just again hiding and out of 305 00:16:03,120 --> 00:16:04,760 Speaker 7: the game the Republicans in Congress. 306 00:16:04,760 --> 00:16:08,080 Speaker 2: Well, let's see if the president feels like he's being 307 00:16:08,120 --> 00:16:11,560 Speaker 2: strung along by Putin enough to greenlight that sanctions bill. 308 00:16:12,040 --> 00:16:15,040 Speaker 2: Jane Harmon, I love that you printed out the ex person. 309 00:16:15,120 --> 00:16:17,800 Speaker 2: I'm picturing you back in Congress with the easels set 310 00:16:17,880 --> 00:16:19,840 Speaker 2: up in the jury. This one did Jee, we still 311 00:16:19,880 --> 00:16:21,880 Speaker 2: had time to do that. Oh no, I saw that 312 00:16:22,000 --> 00:16:27,040 Speaker 2: column this morning. A moral slum that's conservative. George Will Yeah, 313 00:16:27,200 --> 00:16:30,080 Speaker 2: this is quite something she's made for television and radio. 314 00:16:30,240 --> 00:16:33,479 Speaker 2: There's only one Jane Harmon, former Democratic congresswoman from California. 315 00:16:33,480 --> 00:16:35,600 Speaker 3: Thank you, Jane for the insights. I'm Joe Matthew. This 316 00:16:35,640 --> 00:16:37,840 Speaker 3: is Bloomberg. Stay with us on Balance of Power. We'll 317 00:16:37,840 --> 00:16:39,440 Speaker 3: have much more coming up after this. 318 00:16:44,840 --> 00:16:48,320 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 319 00:16:48,400 --> 00:16:51,840 Speaker 1: us live weekdays at noon and five pm Eastern on Apple, 320 00:16:51,880 --> 00:16:55,240 Speaker 1: Cocklay and Android Auto with the Bloomberg Business App. Listen 321 00:16:55,320 --> 00:16:58,440 Speaker 1: on demand wherever you get your podcasts, or watch us 322 00:16:58,480 --> 00:17:01,280 Speaker 1: live on YouTube. 323 00:17:00,920 --> 00:17:04,440 Speaker 2: With our Eyes on Tennessee in Republican Matt Van Epps. 324 00:17:04,720 --> 00:17:08,080 Speaker 2: He had the endorsement of Donald Trump and had the 325 00:17:08,160 --> 00:17:11,640 Speaker 2: full weight and thrust of the Republican Party behind him. 326 00:17:11,680 --> 00:17:14,639 Speaker 2: The Speaker of the House was their stumping' and the 327 00:17:14,680 --> 00:17:17,160 Speaker 2: Republican Party put a lot of money into this race. 328 00:17:17,760 --> 00:17:21,199 Speaker 2: Congratulations on truth Social to Matt Van Epps and his 329 00:17:21,280 --> 00:17:24,960 Speaker 2: big congressional win in the Great State of Tennessee President 330 00:17:25,000 --> 00:17:28,240 Speaker 2: Trump last evening. But if you talk to a Democrat, 331 00:17:28,280 --> 00:17:30,440 Speaker 2: they see this a lot differently because he won by 332 00:17:30,480 --> 00:17:33,480 Speaker 2: single digits, and this was a district that Donald Trump 333 00:17:33,520 --> 00:17:35,960 Speaker 2: won by twenty two points. You wouldn't know it by 334 00:17:36,000 --> 00:17:39,040 Speaker 2: listening to mister Van Epps, who addressed supporters after the 335 00:17:39,119 --> 00:17:40,119 Speaker 2: race was called last night. 336 00:17:40,160 --> 00:17:44,439 Speaker 10: Listen tonight, you've sent a message loud and clear. The 337 00:17:44,520 --> 00:17:46,879 Speaker 10: people of Middle Tennessee stand. 338 00:17:46,800 --> 00:17:48,600 Speaker 3: With President Donald J. Trump. 339 00:17:48,640 --> 00:17:52,639 Speaker 10: To President Donald J. Trump, thank you, sir. Tonight we 340 00:17:52,760 --> 00:17:57,879 Speaker 10: showed running from Trump is how you lose. Running with 341 00:17:58,040 --> 00:18:00,840 Speaker 10: Trump is how you win. President Trump was all in 342 00:18:00,880 --> 00:18:04,520 Speaker 10: with us, and it made the difference in Congress. 343 00:18:05,119 --> 00:18:08,600 Speaker 3: I'll be all in with him, all right. 344 00:18:08,680 --> 00:18:12,240 Speaker 2: So there you go, plus one for Mike Johnson. But 345 00:18:12,400 --> 00:18:14,679 Speaker 2: if you're a Democrat looking at the road to the 346 00:18:14,680 --> 00:18:18,240 Speaker 2: midterms here, you're looking at this very differently because the 347 00:18:18,280 --> 00:18:20,960 Speaker 2: fact of the matter is Democrats cut the margin here. 348 00:18:21,640 --> 00:18:23,720 Speaker 2: I already told you do the math. Cut the margin 349 00:18:23,800 --> 00:18:27,320 Speaker 2: by fifteen percentage points, right, Trump one by twenty two, 350 00:18:27,480 --> 00:18:28,760 Speaker 2: van EPs one by nine? 351 00:18:29,200 --> 00:18:31,200 Speaker 3: Is this the problem? Is it? Even at Bellweather? 352 00:18:31,640 --> 00:18:33,760 Speaker 2: Because you're going to hear a lot of national Democrats 353 00:18:33,760 --> 00:18:35,479 Speaker 2: and Republicans talk about this today. 354 00:18:35,880 --> 00:18:37,160 Speaker 3: How about our panel right now? 355 00:18:37,320 --> 00:18:40,040 Speaker 2: Rick and Kaitlin are back with us Bloomberg Politics contributor 356 00:18:40,119 --> 00:18:44,600 Speaker 2: Rick Davis, Republican strategist partner at Stone Court Capital, alongside 357 00:18:44,600 --> 00:18:48,719 Speaker 2: Democratic strategist Kaitlyn Legacky, senior fellow at Third Way. How 358 00:18:48,800 --> 00:18:51,320 Speaker 2: you looking at this, Caitlin? Is it a moral victory 359 00:18:51,320 --> 00:18:52,080 Speaker 2: for Democrats? 360 00:18:53,680 --> 00:18:57,159 Speaker 11: I don't believe in moral victories. I do think that 361 00:18:58,160 --> 00:19:01,000 Speaker 11: it's a very positive sign for the part that the 362 00:19:01,040 --> 00:19:03,359 Speaker 11: district swung as much as it did. There are currently 363 00:19:03,359 --> 00:19:09,560 Speaker 11: about forty other Republicans that are sitting in House seats 364 00:19:09,680 --> 00:19:12,600 Speaker 11: that they won by less than the eight point margin 365 00:19:12,760 --> 00:19:15,359 Speaker 11: that we saw last night, so all of those seats 366 00:19:15,359 --> 00:19:18,919 Speaker 11: should now be considered gettable. But I do think as 367 00:19:19,000 --> 00:19:22,320 Speaker 11: well that you know, the candidate in this race on 368 00:19:22,359 --> 00:19:26,399 Speaker 11: the Democratic side did not benefit from nationalizing this race, 369 00:19:26,960 --> 00:19:31,480 Speaker 11: and it really underscored the importance of Democrats nominating candidates 370 00:19:31,920 --> 00:19:34,919 Speaker 11: who are aligned with the views and the beliefs of 371 00:19:34,960 --> 00:19:38,520 Speaker 11: the districts they're running in, and to really focusing on 372 00:19:38,600 --> 00:19:41,480 Speaker 11: the local issues that matter rather than trying to turn 373 00:19:41,560 --> 00:19:46,159 Speaker 11: everything into you know, cable TV fodder or what's going 374 00:19:46,240 --> 00:19:48,360 Speaker 11: to play best with the Twitter audience. 375 00:19:49,640 --> 00:19:53,040 Speaker 2: Interesting, Rick, I'm curious if you're going as far down 376 00:19:53,040 --> 00:19:56,760 Speaker 2: the road as some political strategists are. After last evening, 377 00:19:56,840 --> 00:19:59,760 Speaker 2: I was struck by the quote from Matt Whitlock, Republican 378 00:20:00,400 --> 00:20:03,080 Speaker 2: in Politico this morning quote, if every house district in 379 00:20:03,160 --> 00:20:06,040 Speaker 2: the country shifted left by this same amount, we would 380 00:20:06,080 --> 00:20:09,560 Speaker 2: be looking at a blue wave far worse than twenty eighteen. 381 00:20:09,800 --> 00:20:10,280 Speaker 3: Is he right? 382 00:20:11,840 --> 00:20:12,040 Speaker 12: You know? 383 00:20:12,080 --> 00:20:14,199 Speaker 4: I think he's close to being right. I think Caitlin 384 00:20:14,280 --> 00:20:14,679 Speaker 4: nailed it. 385 00:20:16,520 --> 00:20:19,240 Speaker 12: You'd rather win than anything, So kudos are the Republicans 386 00:20:19,280 --> 00:20:22,639 Speaker 12: were pulling out a victory here with the margins they 387 00:20:22,680 --> 00:20:23,160 Speaker 12: have in the House. 388 00:20:23,200 --> 00:20:24,720 Speaker 4: It's really important too. 389 00:20:26,080 --> 00:20:29,040 Speaker 12: The only way to calculate this midterm is looking at 390 00:20:29,080 --> 00:20:32,720 Speaker 12: what Trump vote doesn't show up consistently, both in the 391 00:20:33,000 --> 00:20:37,240 Speaker 12: elections you know last you know, November, this last November, 392 00:20:37,600 --> 00:20:40,960 Speaker 12: and then in this election. I mean solidly, a minimum 393 00:20:41,000 --> 00:20:44,200 Speaker 12: of ten percent of the Republican Party doesn't show up 394 00:20:44,400 --> 00:20:47,000 Speaker 12: unless Donald Trump's on the ballot. And Donald Trump won't 395 00:20:47,000 --> 00:20:49,680 Speaker 12: be on the ballot in twenty six So I would 396 00:20:49,760 --> 00:20:53,080 Speaker 12: actually even expand the margin. It's not just eight percent. 397 00:20:54,760 --> 00:20:58,360 Speaker 12: You know, where if the district was plus Republican eight 398 00:20:58,520 --> 00:21:00,000 Speaker 12: you've got you got a horse race. 399 00:21:00,400 --> 00:21:03,480 Speaker 4: I'd say it's ten to fifteen, because. 400 00:21:03,240 --> 00:21:07,720 Speaker 12: There are now plenty of precedents to show that there 401 00:21:07,880 --> 00:21:11,880 Speaker 12: is half the Republicans in these districts will only show 402 00:21:11,920 --> 00:21:14,320 Speaker 12: up when Donald Trump's on the ballot. So buddy in 403 00:21:14,359 --> 00:21:17,440 Speaker 12: the House, you're on your own. And I would say 404 00:21:17,480 --> 00:21:20,560 Speaker 12: that her advice, Caitlin's advice to the Democrats is exactly right. 405 00:21:21,119 --> 00:21:23,040 Speaker 12: Don't get candidates who are just going to run against 406 00:21:23,080 --> 00:21:25,800 Speaker 12: Donald Trump. His vote's not shown up anyway. Get candidates 407 00:21:25,800 --> 00:21:28,280 Speaker 12: who can actually make a case in their district, and 408 00:21:28,320 --> 00:21:31,320 Speaker 12: then you got something to work with, you. 409 00:21:31,359 --> 00:21:35,560 Speaker 2: Know, President Trump said she despises country music. Caitlin, it 410 00:21:35,600 --> 00:21:40,080 Speaker 2: could have been as simple as that, but enter political strategists. 411 00:21:41,160 --> 00:21:44,960 Speaker 2: Ron DeSantis, the governor of Florida, on ex producer James 412 00:21:45,000 --> 00:21:45,840 Speaker 2: just put this in front of me. 413 00:21:46,280 --> 00:21:47,119 Speaker 3: This is remarkable. 414 00:21:47,359 --> 00:21:50,600 Speaker 2: Ron DeSantis writes, special off year and midterm elections historically 415 00:21:50,640 --> 00:21:53,520 Speaker 2: benefit the party out of power because its voters are 416 00:21:53,560 --> 00:21:56,760 Speaker 2: motivated to vote, while voters of the incumbent party become 417 00:21:56,760 --> 00:21:58,720 Speaker 2: more complacent. He goes on to write, this is more 418 00:21:58,760 --> 00:22:02,000 Speaker 2: glaring for today's geo because a chunk of voters who 419 00:22:02,080 --> 00:22:04,399 Speaker 2: put them in power in twenty twenty four are Trump 420 00:22:04,520 --> 00:22:08,359 Speaker 2: specific voters. They will vote gop down ballot when Trump 421 00:22:08,400 --> 00:22:10,800 Speaker 2: is running, but won't turn out to vote for a 422 00:22:10,840 --> 00:22:15,040 Speaker 2: typical congressman in a midterm when Trump isn't running. Caitlin 423 00:22:15,160 --> 00:22:18,479 Speaker 2: is like Ronda Santists was channeling Rick Davis. What are 424 00:22:18,480 --> 00:22:20,280 Speaker 2: Republicans then do in the midterms. 425 00:22:22,359 --> 00:22:25,840 Speaker 11: I mean, their goal is, if they're in a state 426 00:22:25,960 --> 00:22:28,440 Speaker 11: or a district that favors Trump, is to bear hug 427 00:22:28,520 --> 00:22:31,240 Speaker 11: him and do everything they can to nationalize this race, 428 00:22:31,280 --> 00:22:35,000 Speaker 11: to make it about Donald Trump, to turn out his voters. 429 00:22:35,119 --> 00:22:37,600 Speaker 11: But I think the reality of the situation is that 430 00:22:38,359 --> 00:22:41,720 Speaker 11: Trump's approval ratings keep going down. That's becoming an even 431 00:22:41,800 --> 00:22:45,840 Speaker 11: riskier proposition and it's going to just be harder for 432 00:22:47,400 --> 00:22:49,720 Speaker 11: a lot of members to fight those waves. And so 433 00:22:50,400 --> 00:22:53,480 Speaker 11: the question for Democrats then becomes, how do you actually 434 00:22:53,600 --> 00:22:56,760 Speaker 11: leverage that and put forward candidates who are in a 435 00:22:56,760 --> 00:22:59,640 Speaker 11: position to win and represent these districts. 436 00:23:02,400 --> 00:23:05,200 Speaker 2: Well, I'll tell you what, Rick, when it comes to strategy, 437 00:23:06,160 --> 00:23:09,359 Speaker 2: if you were launching a campaign, and granted a lot 438 00:23:09,400 --> 00:23:10,880 Speaker 2: of them are waiting to find out what the maps 439 00:23:10,880 --> 00:23:13,199 Speaker 2: are going to be for the midterms, how would you 440 00:23:13,840 --> 00:23:18,640 Speaker 2: take last night's lessons in Tennessee and try to exploit 441 00:23:18,720 --> 00:23:20,160 Speaker 2: them next November. 442 00:23:22,040 --> 00:23:25,119 Speaker 12: Yeah, so I think you know, Republicans need to take 443 00:23:25,119 --> 00:23:27,880 Speaker 12: the same advice Kaitlin was giving to Democrats. You can't 444 00:23:27,920 --> 00:23:31,480 Speaker 12: rely on the Donald Trump vote to turn out. You've 445 00:23:31,480 --> 00:23:34,800 Speaker 12: got to be very granular on the issues. You really, 446 00:23:34,800 --> 00:23:38,280 Speaker 12: in this case, want to localize the election as much 447 00:23:38,320 --> 00:23:41,359 Speaker 12: as possible. You don't have much to run on the 448 00:23:41,359 --> 00:23:45,439 Speaker 12: big beautiful bill, which is your signature. Legislative accomplishment is 449 00:23:45,560 --> 00:23:50,680 Speaker 12: not popular, and as Caitlin said, Trump's approval rating isn't 450 00:23:50,680 --> 00:23:53,680 Speaker 12: going to get better between now and next November. There's 451 00:23:53,720 --> 00:23:55,879 Speaker 12: just nothing on the horizon that shows that he's going 452 00:23:55,920 --> 00:23:58,760 Speaker 12: to have a big win somewhere. So the reality of 453 00:23:58,800 --> 00:24:01,000 Speaker 12: it is is you're on your own, and you better 454 00:24:01,080 --> 00:24:02,960 Speaker 12: find votes the old fashioned way. 455 00:24:03,359 --> 00:24:03,600 Speaker 4: You know. 456 00:24:03,760 --> 00:24:06,240 Speaker 12: I'd go to the ground, knock on doors. I would 457 00:24:06,320 --> 00:24:11,359 Speaker 12: find issues locally, education, health, things that are not typical 458 00:24:11,760 --> 00:24:15,879 Speaker 12: Trump related issues that you can find common cause with, 459 00:24:16,520 --> 00:24:21,360 Speaker 12: especially suburban voters. The rural voters will likely be there 460 00:24:21,359 --> 00:24:24,159 Speaker 12: for you, just not in the same margins as a 461 00:24:24,160 --> 00:24:25,280 Speaker 12: presidential election year. 462 00:24:26,280 --> 00:24:28,960 Speaker 2: Interesting, this really does make me look forward to campaign season. 463 00:24:29,000 --> 00:24:31,680 Speaker 2: Talking this out with you guys is always fascinating to me. 464 00:24:31,760 --> 00:24:34,880 Speaker 2: But let's talk about the immediate impact, Caitlin. Mike Johnson 465 00:24:34,920 --> 00:24:37,879 Speaker 2: now has two hundred and twenty House Republicans again, so 466 00:24:37,960 --> 00:24:41,720 Speaker 2: it's like we're starting the year all over, and obviously 467 00:24:41,760 --> 00:24:45,120 Speaker 2: we've got a long time before we're talking about actual 468 00:24:45,359 --> 00:24:50,040 Speaker 2: midterm races. So this brings us immediately to the congressional agenda, 469 00:24:50,680 --> 00:24:52,560 Speaker 2: and it might have just gotten a little more difficult 470 00:24:53,560 --> 00:24:57,359 Speaker 2: for Democrats in the House to pass any extension of 471 00:24:57,480 --> 00:24:58,880 Speaker 2: Obamacare subsidies. 472 00:24:59,160 --> 00:25:02,480 Speaker 3: What do you think, I think. 473 00:25:02,280 --> 00:25:05,240 Speaker 11: That you're increasingly going to see a number of Republicans 474 00:25:05,240 --> 00:25:08,119 Speaker 11: who are looking for ways to show their independence from 475 00:25:08,400 --> 00:25:11,320 Speaker 11: both House leadership and Donald Trump as part of an 476 00:25:11,359 --> 00:25:15,320 Speaker 11: effort to kind of stanch the bleeding in the midterms. 477 00:25:15,400 --> 00:25:20,760 Speaker 11: So I actually think that last night's results actually may 478 00:25:21,440 --> 00:25:24,600 Speaker 11: give Democrats a couple of spots to work with Republicans 479 00:25:24,600 --> 00:25:27,320 Speaker 11: who are in the suburban districts where ACA is very 480 00:25:27,359 --> 00:25:31,240 Speaker 11: popular to get some of these key provisions across the 481 00:25:31,280 --> 00:25:34,359 Speaker 11: finish line, simply because I think a lot of members 482 00:25:34,359 --> 00:25:37,560 Speaker 11: in these frontline districts they're either going to retire or 483 00:25:37,600 --> 00:25:39,920 Speaker 11: they're going to look for ways to separate themselves from 484 00:25:39,960 --> 00:25:42,879 Speaker 11: the national Party. And this is a really easy way. 485 00:25:42,720 --> 00:25:43,120 Speaker 8: To do it. 486 00:25:44,359 --> 00:25:47,280 Speaker 2: Interesting, what do you think about that, Rick, Does this 487 00:25:47,320 --> 00:25:49,760 Speaker 2: additional seat matter for Mike Johnson? 488 00:25:51,480 --> 00:25:55,879 Speaker 12: Look, everything matters with these slim margins, and it's just 489 00:25:55,960 --> 00:25:57,399 Speaker 12: more leverage that he gets. 490 00:25:57,520 --> 00:26:00,440 Speaker 4: It's incremental, but it's a good thing, right. 491 00:26:01,280 --> 00:26:04,840 Speaker 12: I think Republicans really have to figure out how to 492 00:26:04,880 --> 00:26:08,280 Speaker 12: get out of this trap, because the trap is they 493 00:26:08,280 --> 00:26:13,359 Speaker 12: look like they are stopping healthcare from reaching Americans without 494 00:26:13,400 --> 00:26:16,200 Speaker 12: a plan to replace it with anything. And as much 495 00:26:16,200 --> 00:26:19,760 Speaker 12: as I like Senator Cassidy, uh the idea that we're 496 00:26:19,800 --> 00:26:22,960 Speaker 12: going to just you know, give people another health account 497 00:26:23,119 --> 00:26:25,720 Speaker 12: is not going to cover it with the with the voters. 498 00:26:25,760 --> 00:26:29,679 Speaker 12: So if I were Republican strategists, I'd be finding an 499 00:26:29,720 --> 00:26:32,439 Speaker 12: exit door fast to get this done before the end 500 00:26:32,480 --> 00:26:35,520 Speaker 12: of the year so that you can look at next 501 00:26:35,560 --> 00:26:37,800 Speaker 12: year without having to talk about this all day long. 502 00:26:38,840 --> 00:26:42,359 Speaker 2: Well, that sounds like an opportunity for Democrats. Kalen, what 503 00:26:42,359 --> 00:26:42,879 Speaker 2: do you think? 504 00:26:43,359 --> 00:26:43,879 Speaker 8: I agree? 505 00:26:44,440 --> 00:26:47,240 Speaker 11: I think Rick should take over all strategy for the 506 00:26:47,280 --> 00:26:48,400 Speaker 11: Republican Party these days. 507 00:26:50,480 --> 00:26:51,200 Speaker 4: That didn't work out. 508 00:26:51,760 --> 00:26:56,760 Speaker 3: An endorsement Rick he had that I agree with everything. 509 00:26:58,960 --> 00:27:03,160 Speaker 3: Let's not go too far in our remaining moment. 510 00:27:03,200 --> 00:27:06,080 Speaker 2: Caitlin, the point that you made with regard to Tennessee 511 00:27:06,240 --> 00:27:10,199 Speaker 2: about nationalizing the race, The fact is the Democrat in 512 00:27:10,240 --> 00:27:14,119 Speaker 2: this case, Afton Baine, was called the AOC of Tennessee. 513 00:27:14,640 --> 00:27:19,159 Speaker 2: President Trump said she hated country music and she despised Christians. 514 00:27:20,520 --> 00:27:22,119 Speaker 3: Isn't that national politics? 515 00:27:23,880 --> 00:27:24,240 Speaker 8: Yeah? 516 00:27:24,320 --> 00:27:26,960 Speaker 11: And I think you know, part of what's challenging is 517 00:27:26,960 --> 00:27:28,520 Speaker 11: that when you look at the Senate map and you 518 00:27:28,520 --> 00:27:33,280 Speaker 11: look at some of these frontline districts, you have, you know, 519 00:27:33,440 --> 00:27:37,560 Speaker 11: either primaries or candidates where you're choosing between somebody with 520 00:27:37,760 --> 00:27:40,240 Speaker 11: local roots and local experience where the people know then 521 00:27:40,240 --> 00:27:42,600 Speaker 11: they know what they stand for, and candidates that are 522 00:27:42,600 --> 00:27:44,680 Speaker 11: more popular online and we should be re opting for 523 00:27:44,720 --> 00:27:45,159 Speaker 11: the former. 524 00:27:46,800 --> 00:27:47,399 Speaker 3: Well, this is a. 525 00:27:47,400 --> 00:27:50,359 Speaker 2: Great conversation and I appreciate both of your insights. Caitlin 526 00:27:50,480 --> 00:27:53,680 Speaker 2: Lagaki and Rick Davis together as our great panel today 527 00:27:53,680 --> 00:27:56,440 Speaker 2: for the Wednesday audition. Stay with us on Balance of Power. 528 00:27:56,440 --> 00:27:58,240 Speaker 2: We'll have much more coming up after this. 529 00:28:02,560 --> 00:28:06,040 Speaker 1: You're listening to the Bloomberg Balance of Power podcast. Catch 530 00:28:06,119 --> 00:28:09,199 Speaker 1: us live weekdays at noon and five pm Eastern on 531 00:28:09,280 --> 00:28:12,520 Speaker 1: Apple Coplay and Android Auto with the Bloomberg Business app. 532 00:28:12,560 --> 00:28:15,600 Speaker 1: You can also listen live on Amazon Alexa from our 533 00:28:15,640 --> 00:28:20,159 Speaker 1: flagship New York station Just Say Alexa played Bloomberg eleven thirty. 534 00:28:21,480 --> 00:28:23,280 Speaker 2: It's great to see you. Welcome to the early edition 535 00:28:23,359 --> 00:28:26,919 Speaker 2: on this Wednesday. As we turn our attention to the 536 00:28:26,920 --> 00:28:30,879 Speaker 2: AI race, talk of a bubble being renewed today or 537 00:28:30,920 --> 00:28:34,920 Speaker 2: at least maybe a little bit of a slowdown. We're 538 00:28:34,960 --> 00:28:37,480 Speaker 2: going to get to this report about Microsoft at a 539 00:28:37,480 --> 00:28:40,000 Speaker 2: moment when we spend some time with Caroline Hyde. But 540 00:28:40,040 --> 00:28:43,760 Speaker 2: I want to start with something called game AI. This 541 00:28:43,840 --> 00:28:46,960 Speaker 2: is not a new AI company, it's not a new 542 00:28:47,000 --> 00:28:49,760 Speaker 2: mining company. It's actually a piece of legislation that would 543 00:28:49,760 --> 00:28:53,760 Speaker 2: limit foreign exports of high tech chips. Look no further, 544 00:28:53,800 --> 00:28:56,400 Speaker 2: of course than Nvidia, which is trading a bit lower 545 00:28:56,440 --> 00:28:59,600 Speaker 2: today along with Microsoft. These two stories collide in a 546 00:28:59,600 --> 00:29:03,120 Speaker 2: tough way for high tech in today's market. Of course, 547 00:29:03,640 --> 00:29:05,760 Speaker 2: Nvidia is pretty close to the White House. Jensen Wong 548 00:29:06,360 --> 00:29:09,320 Speaker 2: calls Donald Trump a friend. The President says the same 549 00:29:09,360 --> 00:29:12,440 Speaker 2: about him, and the White House is not too sure 550 00:29:12,560 --> 00:29:16,640 Speaker 2: about gain AI or its inclusion in the annual Defense 551 00:29:16,720 --> 00:29:19,840 Speaker 2: Authorization bill that's making its way through Congress right now. 552 00:29:20,040 --> 00:29:22,920 Speaker 2: Jensen Wong has made his way back to Washington today. 553 00:29:23,160 --> 00:29:26,440 Speaker 2: He's actually in the Capitol meeting with members of the 554 00:29:26,520 --> 00:29:30,200 Speaker 2: Senate Banking Committee who are looking at this legislation right now. 555 00:29:30,240 --> 00:29:31,840 Speaker 3: This is not a full blown hearing. You're not going 556 00:29:31,880 --> 00:29:33,000 Speaker 3: to watch it on c SPAN, and. 557 00:29:32,920 --> 00:29:34,880 Speaker 2: I'll be very curious to hear if he does any 558 00:29:34,920 --> 00:29:37,880 Speaker 2: public facing interviews or anything else around this, because he's 559 00:29:37,880 --> 00:29:40,400 Speaker 2: trying to make a point here, of course, with the 560 00:29:40,440 --> 00:29:42,840 Speaker 2: idea of export controls already in the background when it 561 00:29:42,880 --> 00:29:45,320 Speaker 2: comes to China. This is where we start with Caroline High, 562 00:29:45,400 --> 00:29:48,080 Speaker 2: the co host of Bloomberg Tech, is with us from 563 00:29:48,120 --> 00:29:50,640 Speaker 2: world headquarters in New York, Caroline, It's always my great 564 00:29:50,640 --> 00:29:54,160 Speaker 2: pleasure to see you. And I'm wondering how persuasive Jensen 565 00:29:54,200 --> 00:29:56,000 Speaker 2: Wang can be in this room today. 566 00:29:56,200 --> 00:29:56,720 Speaker 3: What do you think? 567 00:29:56,760 --> 00:29:58,520 Speaker 8: He's a persuasive guy, isn't he? 568 00:29:58,600 --> 00:30:01,719 Speaker 13: And we've seen him really we try to persuade before 569 00:30:01,960 --> 00:30:05,080 Speaker 13: that to win the AI race, the answer is not 570 00:30:05,160 --> 00:30:08,720 Speaker 13: to ban the most sophisticated technology from China. It's in fact, 571 00:30:08,760 --> 00:30:12,720 Speaker 13: to allow him to export his sophisticated chips, because then 572 00:30:12,800 --> 00:30:16,880 Speaker 13: China becomes ever more dependent on his infrastructure rather than 573 00:30:16,920 --> 00:30:19,680 Speaker 13: main push to build that of Huawe for example. There's 574 00:30:19,720 --> 00:30:22,080 Speaker 13: a real tussle at the top within the administration and 575 00:30:22,080 --> 00:30:24,880 Speaker 13: who's got the ear of the president as to which 576 00:30:24,920 --> 00:30:27,200 Speaker 13: side of are you? Are you hawkish? Are you saying 577 00:30:27,240 --> 00:30:30,280 Speaker 13: more broadly that no, none of our US technology should 578 00:30:30,280 --> 00:30:32,120 Speaker 13: be allowed in the hands of the Chinese and you 579 00:30:32,160 --> 00:30:37,240 Speaker 13: should should fulfill the demand of homegrown cloud data infrastructure first. 580 00:30:37,520 --> 00:30:40,200 Speaker 13: That's why you've seen some of the kid big hyperscalers 581 00:30:40,200 --> 00:30:42,720 Speaker 13: actually say we kind of like this gain AI act. 582 00:30:42,760 --> 00:30:44,800 Speaker 13: We kind of want to have first dims on in 583 00:30:44,960 --> 00:30:47,640 Speaker 13: Vidia's most sophisticated chips before you start exporting them out 584 00:30:47,640 --> 00:30:50,959 Speaker 13: to China. Now remember at the moment video CEO has 585 00:30:50,960 --> 00:30:54,280 Speaker 13: said that they get zero, one, big fat zero percent 586 00:30:54,320 --> 00:30:56,800 Speaker 13: of any revenue from China thus far, so he hasn't 587 00:30:56,800 --> 00:30:59,560 Speaker 13: been able to export, even with the idea that that 588 00:30:59,560 --> 00:31:02,200 Speaker 13: fifteen percent revenue share could be going to the government 589 00:31:02,200 --> 00:31:04,640 Speaker 13: for him in AMD to be able to export those 590 00:31:04,720 --> 00:31:08,840 Speaker 13: dumbed down chips that aren't Blackwell architecture but previous architecture. 591 00:31:08,880 --> 00:31:11,400 Speaker 13: He couldn't even get that to be interesting to the 592 00:31:11,480 --> 00:31:14,960 Speaker 13: Chinese government. He hoped his Blackwell architecture if indeed just 593 00:31:15,040 --> 00:31:18,920 Speaker 13: restricted to fit current current export limitations, maybe he could 594 00:31:18,960 --> 00:31:21,240 Speaker 13: then get China to buy in, because the big tech 595 00:31:21,320 --> 00:31:24,320 Speaker 13: giants do want his chips, but the government doesn't. So 596 00:31:24,360 --> 00:31:26,160 Speaker 13: thus far he's got a lot of persuading to do, 597 00:31:26,280 --> 00:31:28,760 Speaker 13: not only of lawmakers, and as you say, it's the 598 00:31:28,760 --> 00:31:31,440 Speaker 13: banking committee that signs off on these export controls. Can 599 00:31:31,440 --> 00:31:33,400 Speaker 13: he persuade them that it's better to win the AI 600 00:31:33,440 --> 00:31:35,960 Speaker 13: race with his chips, and what sort of limitations that 601 00:31:36,000 --> 00:31:38,080 Speaker 13: he would put in place to allow us demand to 602 00:31:38,120 --> 00:31:41,160 Speaker 13: be satisfied, but also to gain access to what wants 603 00:31:41,400 --> 00:31:43,280 Speaker 13: his most important market in many ways. 604 00:31:44,160 --> 00:31:46,680 Speaker 2: Well, you bring up a great point. The stock has 605 00:31:46,680 --> 00:31:50,280 Speaker 2: already priced in no China business. Right, so a pretty 606 00:31:50,360 --> 00:31:53,680 Speaker 2: muted response here. It's done about a half percent. Right now. 607 00:31:53,720 --> 00:31:57,000 Speaker 2: Why is Jensen Wang so concerned about this legislation when 608 00:31:57,000 --> 00:31:58,840 Speaker 2: Donald Trump is probably going to have the final say 609 00:31:58,840 --> 00:31:59,560 Speaker 2: on this anyway, right? 610 00:31:59,680 --> 00:32:02,280 Speaker 3: White House wants to be able to dictate this, not Congress. 611 00:32:02,920 --> 00:32:04,880 Speaker 13: I'm sure that they would like to be able to 612 00:32:04,920 --> 00:32:07,200 Speaker 13: dictate many things. And I think that really for the 613 00:32:07,200 --> 00:32:09,720 Speaker 13: White House, they have time and time again shown their 614 00:32:09,800 --> 00:32:12,640 Speaker 13: focus on AI infrastructure, on the buildout look. Just this 615 00:32:12,720 --> 00:32:14,720 Speaker 13: week we had the news that they're taking helping have 616 00:32:14,760 --> 00:32:17,880 Speaker 13: one hundred and fifty million dollars being allocated towards Pat 617 00:32:17,920 --> 00:32:20,720 Speaker 13: Gelsinger's new startup, which is all about taking on ASML, 618 00:32:20,800 --> 00:32:24,320 Speaker 13: the European chip equipment manufacturer, and with light X, it's 619 00:32:24,360 --> 00:32:27,760 Speaker 13: all about lasers. We're seeing at the moment more broadly, Joe, 620 00:32:27,800 --> 00:32:30,160 Speaker 13: whether that would be a part of the supply chain 621 00:32:30,160 --> 00:32:32,080 Speaker 13: here in the United States. But we know that they've 622 00:32:32,120 --> 00:32:34,040 Speaker 13: wanted to put money into rare earth. We know they 623 00:32:34,120 --> 00:32:35,880 Speaker 13: want to put money into quantum. They know that they 624 00:32:35,920 --> 00:32:39,600 Speaker 13: want to win what they see on national security real 625 00:32:39,840 --> 00:32:43,080 Speaker 13: races upon their hands. They would like to ensure that 626 00:32:43,160 --> 00:32:45,880 Speaker 13: really Jensenwangen and video remain the number one talk of 627 00:32:45,920 --> 00:32:48,240 Speaker 13: the town, and it really is a tussle between the 628 00:32:48,280 --> 00:32:51,080 Speaker 13: hawks and those that do feel that maybe to have 629 00:32:51,160 --> 00:32:54,000 Speaker 13: access to China is important in this overall AI race. 630 00:32:55,280 --> 00:32:58,479 Speaker 2: You have to understand how fun it is for a 631 00:32:58,520 --> 00:33:01,360 Speaker 2: political wonk like me and Washington to talk lasers with 632 00:33:01,400 --> 00:33:02,120 Speaker 2: Caroline Hive. 633 00:33:02,680 --> 00:33:05,560 Speaker 3: So let's talk about this Microsoft report. 634 00:33:05,680 --> 00:33:07,600 Speaker 2: You know, everyone's looking for an excuse to bail on 635 00:33:07,640 --> 00:33:09,520 Speaker 2: the whole narrative here, right, That's been the story for 636 00:33:09,560 --> 00:33:12,760 Speaker 2: the past couple of weeks. So in this case, the 637 00:33:12,800 --> 00:33:16,400 Speaker 2: information shows up and everybody freaks out. Here, Microsoft has 638 00:33:16,440 --> 00:33:20,760 Speaker 2: lowered expectations for getting business customers to spend money on 639 00:33:21,200 --> 00:33:24,200 Speaker 2: the cloud unit's marketplace for AI models and agents. 640 00:33:24,680 --> 00:33:26,120 Speaker 3: You frame that as you want. 641 00:33:26,280 --> 00:33:28,040 Speaker 2: We've got a little bit of a warning here, and 642 00:33:28,200 --> 00:33:30,600 Speaker 2: you know, anyone tied to open AI right now, and 643 00:33:30,640 --> 00:33:33,600 Speaker 2: there's no bigger name really than Microsoft there seems to 644 00:33:33,640 --> 00:33:37,800 Speaker 2: be getting a second look. Does this simply confirm the 645 00:33:37,800 --> 00:33:39,160 Speaker 2: worries that we're already out there? 646 00:33:39,400 --> 00:33:40,600 Speaker 3: How should we be looking at this? 647 00:33:40,760 --> 00:33:43,440 Speaker 13: I really think that on any other given day when 648 00:33:43,440 --> 00:33:46,560 Speaker 13: we're not in perhaps lower liquidity holiday trading, and if 649 00:33:46,560 --> 00:33:49,400 Speaker 13: AI anxiety wasn't still looming, we'd kind of a battered 650 00:33:49,400 --> 00:33:51,400 Speaker 13: this report off. But at the moment, as you say, 651 00:33:51,400 --> 00:33:54,480 Speaker 13: everyone's looking for breadcrumbs that feed into the thesis that 652 00:33:54,600 --> 00:33:58,720 Speaker 13: AI productivity isn't there, we've got this whole bubble narrative 653 00:33:58,800 --> 00:34:02,280 Speaker 13: and circular finance narrative continuing. Then are we spending too 654 00:34:02,360 --> 00:34:04,800 Speaker 13: much on AI infrastructure if people don't want to use 655 00:34:04,840 --> 00:34:06,560 Speaker 13: it and they don't want to spend to use it. 656 00:34:06,760 --> 00:34:09,160 Speaker 13: This report coming from the Information is really putting a 657 00:34:09,239 --> 00:34:12,600 Speaker 13: highlight on say Carlisle Group, big private equity player that 658 00:34:12,719 --> 00:34:15,640 Speaker 13: has a deal we understand with Microsoft to use Copilot 659 00:34:15,680 --> 00:34:18,640 Speaker 13: within its offerings to be able to scrape data from 660 00:34:18,719 --> 00:34:21,240 Speaker 13: all of its other software and be able to build 661 00:34:21,600 --> 00:34:24,480 Speaker 13: and churn out Microsoft Excel reports that much easier. The 662 00:34:24,520 --> 00:34:26,880 Speaker 13: problem is it's hard to access the data. Maybe you've 663 00:34:26,880 --> 00:34:28,520 Speaker 13: got some of it in Salesforce, suddenly you've got it 664 00:34:28,520 --> 00:34:31,080 Speaker 13: in some of our other pockets. How are we seeing 665 00:34:31,080 --> 00:34:36,080 Speaker 13: these companies managing to walk companies through, handhold them as 666 00:34:36,080 --> 00:34:39,239 Speaker 13: to how to make productivity gains. Carlisle basically just said, look, 667 00:34:39,239 --> 00:34:41,239 Speaker 13: we want to cut our costs on AI, and we're 668 00:34:41,239 --> 00:34:43,239 Speaker 13: perhaps going to move away a little bit from what 669 00:34:43,400 --> 00:34:46,200 Speaker 13: have been some of our overall spending. This then feeds 670 00:34:46,200 --> 00:34:49,320 Speaker 13: out written large How much are we seeing sales members 671 00:34:49,400 --> 00:34:52,920 Speaker 13: in Microsoft trying to sell GitHub or Copilot? Are they 672 00:34:52,920 --> 00:34:54,480 Speaker 13: having to catail what they thought was going to be 673 00:34:54,480 --> 00:34:59,160 Speaker 13: stratif enormous demand. We just had Octa CEO on. Now 674 00:34:59,200 --> 00:35:02,000 Speaker 13: Octo CEO build basically a way in which your agents 675 00:35:02,040 --> 00:35:04,000 Speaker 13: will be known by the company to be the right 676 00:35:04,040 --> 00:35:06,640 Speaker 13: agent accessing the right data at the right time. Now 677 00:35:06,640 --> 00:35:09,040 Speaker 13: he's saying, look, he's never seen scale like it, adoption 678 00:35:09,239 --> 00:35:11,680 Speaker 13: like it, interest like it. From the moment, they're stuck 679 00:35:11,719 --> 00:35:13,520 Speaker 13: because you are getting these pools of data in different 680 00:35:13,520 --> 00:35:15,600 Speaker 13: places and everyone needs to work together. So is it 681 00:35:15,640 --> 00:35:17,600 Speaker 13: a question that you just need more help for your 682 00:35:17,640 --> 00:35:19,840 Speaker 13: clients or is it actually that people aren't willing to 683 00:35:19,880 --> 00:35:23,000 Speaker 13: spend We'll get salesforce after the bell today, big question 684 00:35:23,080 --> 00:35:26,920 Speaker 13: mark is their agent force actually able to drive revenue? 685 00:35:26,920 --> 00:35:29,120 Speaker 13: Are people willing to spend a lot more for it? Joe, 686 00:35:29,120 --> 00:35:30,960 Speaker 13: I think that's a key question, and it becomes a 687 00:35:31,000 --> 00:35:32,720 Speaker 13: key question and whether you still want to be building 688 00:35:32,760 --> 00:35:34,000 Speaker 13: out AI infrastructure quite the. 689 00:35:33,960 --> 00:35:36,879 Speaker 2: Clip you are well, so you're pointing is to use 690 00:35:36,920 --> 00:35:41,200 Speaker 2: cases here, right, And this comes just days after Gemini 691 00:35:41,480 --> 00:35:44,400 Speaker 2: jumped off the page here and became the greatest thing 692 00:35:44,440 --> 00:35:48,240 Speaker 2: you're talking about salesforce, the Benioff tweet that went around 693 00:35:48,280 --> 00:35:51,400 Speaker 2: the world, and it's coming at the expense of Open Ai, 694 00:35:52,040 --> 00:35:57,160 Speaker 2: which just yesterday saw chief executive officer Sam Altman declare 695 00:35:57,160 --> 00:36:00,439 Speaker 2: a code read. When you see Altman, after all these 696 00:36:00,480 --> 00:36:03,319 Speaker 2: deals in what I'm assuming are hundreds of billions now 697 00:36:03,880 --> 00:36:07,560 Speaker 2: in announced investments, declare a code read, are we getting 698 00:36:07,600 --> 00:36:08,320 Speaker 2: over our skis? 699 00:36:08,920 --> 00:36:10,799 Speaker 13: I think it just shows you how competitive this whole 700 00:36:10,840 --> 00:36:13,759 Speaker 13: space is, Joe, because this is a company that has 701 00:36:13,880 --> 00:36:17,799 Speaker 13: eight hundred million weekly users of chat GPT, and it's 702 00:36:17,840 --> 00:36:21,720 Speaker 13: worried about Gemini three, it's worried about the latest innovations. Remember, 703 00:36:21,880 --> 00:36:24,680 Speaker 13: we've just had Runway, which is a New York based 704 00:36:24,800 --> 00:36:27,759 Speaker 13: generative AI video company, come out and it's top of 705 00:36:27,800 --> 00:36:30,480 Speaker 13: the leaderboard with its own AI video generator and the 706 00:36:30,560 --> 00:36:34,560 Speaker 13: latest iteration of models. Their argument is that David's can 707 00:36:34,640 --> 00:36:36,839 Speaker 13: beat goliaths out here. At the moment, people are going 708 00:36:36,880 --> 00:36:40,399 Speaker 13: to want ever more specific, unique types of models. Are 709 00:36:40,440 --> 00:36:42,840 Speaker 13: we going to a become commoditized when it comes to 710 00:36:42,880 --> 00:36:46,040 Speaker 13: our large language model providers or is there really winner 711 00:36:46,120 --> 00:36:49,480 Speaker 13: takes all. Here we see sam Uman being realizing that 712 00:36:49,520 --> 00:36:53,920 Speaker 13: he needs to stop being perhaps distracted by subscription focus 713 00:36:54,239 --> 00:36:57,880 Speaker 13: or advertising models that might substantiate his revenue growth and 714 00:36:57,920 --> 00:36:59,759 Speaker 13: actually get the product right. And I think that's why 715 00:36:59,800 --> 00:37:03,040 Speaker 13: his calling this so called code read reassign some of 716 00:37:03,120 --> 00:37:06,960 Speaker 13: the resources that he has to stop going into different 717 00:37:06,960 --> 00:37:09,439 Speaker 13: directions and come back to what is their key core 718 00:37:09,520 --> 00:37:13,080 Speaker 13: product CHATCHYPT that needs to work effectively and win out 719 00:37:13,160 --> 00:37:17,279 Speaker 13: versus Gemini or indeed Anthropics, Claude or whoever else that 720 00:37:17,320 --> 00:37:19,840 Speaker 13: you might lean on. With perplexity as well, there really 721 00:37:19,880 --> 00:37:21,680 Speaker 13: is quite fierce competition out there. 722 00:37:22,760 --> 00:37:25,240 Speaker 2: Well, with the apologies to Jack Nicholson, is the code 723 00:37:25,280 --> 00:37:28,360 Speaker 2: read about simply making a better product to better compete 724 00:37:28,400 --> 00:37:31,319 Speaker 2: with Gemini and the others, or is it about taking 725 00:37:31,400 --> 00:37:36,240 Speaker 2: a different look at this and favoring maybe business to business, 726 00:37:36,680 --> 00:37:41,080 Speaker 2: the industrial applications over the consumer facing ones. 727 00:37:41,520 --> 00:37:43,800 Speaker 13: I think they've really been trying to talk up about 728 00:37:43,800 --> 00:37:47,600 Speaker 13: the adoption in companies a million companies that are currently 729 00:37:47,680 --> 00:37:51,680 Speaker 13: using CHATCHYBT and open AI's large language models. There is 730 00:37:52,600 --> 00:37:55,640 Speaker 13: really that's where the enterprise and the growth and the 731 00:37:55,640 --> 00:37:57,600 Speaker 13: money is likely to be coming from, and that's really 732 00:37:57,600 --> 00:38:00,799 Speaker 13: where Anthropic has been winning. Claude has always been much 733 00:38:00,840 --> 00:38:04,440 Speaker 13: more focused on the business sales, particularly on coding and 734 00:38:04,480 --> 00:38:07,960 Speaker 13: its prowess there, and that's managed to keep investors, vcs 735 00:38:08,000 --> 00:38:11,359 Speaker 13: and others very interested. Can we see open Ai now 736 00:38:11,400 --> 00:38:14,799 Speaker 13: being put into Amazon Bedrock. Will that give it the 737 00:38:14,840 --> 00:38:16,640 Speaker 13: scale that it needs to go into more B to 738 00:38:16,719 --> 00:38:19,279 Speaker 13: B offerings? Will it be able to work with partnerships 739 00:38:19,280 --> 00:38:21,239 Speaker 13: our companies adopting it in the scale that they'd like 740 00:38:21,280 --> 00:38:23,120 Speaker 13: to see. I think you're really right that this is 741 00:38:23,160 --> 00:38:25,200 Speaker 13: a code read of just trying to understand for now, 742 00:38:25,400 --> 00:38:27,720 Speaker 13: how does the core product work, how does it compete 743 00:38:27,920 --> 00:38:29,680 Speaker 13: and will they end up winning versus some of the 744 00:38:29,680 --> 00:38:32,279 Speaker 13: other competition. From a revenue perspective, it looks as though, 745 00:38:32,280 --> 00:38:35,000 Speaker 13: in a way, Samonltman's kind of putting that debate on 746 00:38:35,120 --> 00:38:37,759 Speaker 13: ice by saying, look, let's not focus on advertising, but 747 00:38:37,840 --> 00:38:41,480 Speaker 13: let's focus on making the core competency that is chatchbt 748 00:38:41,920 --> 00:38:45,920 Speaker 13: just insurmountable, just unbeatable. And I think that's why he's 749 00:38:45,920 --> 00:38:46,960 Speaker 13: really doubling down there. 750 00:38:48,080 --> 00:38:50,399 Speaker 3: Wow, are we in a world now? 751 00:38:50,480 --> 00:38:56,440 Speaker 2: Then it's Microsoft and open ai versus Google and Broadcom 752 00:38:56,480 --> 00:38:59,000 Speaker 2: and Nvidia just takes money from everybody. 753 00:38:59,480 --> 00:39:02,360 Speaker 3: How do we look at these alliances frenemies. 754 00:39:02,640 --> 00:39:04,720 Speaker 13: I think this is one big game of frenemies, because 755 00:39:04,719 --> 00:39:06,800 Speaker 13: remember we've just had that, as I say, the Jolt 756 00:39:07,160 --> 00:39:11,760 Speaker 13: with Alphabet suddenly showing its prowess from its vertically integrated company. 757 00:39:12,000 --> 00:39:14,200 Speaker 13: It not only has great models, but it trains them 758 00:39:14,200 --> 00:39:16,439 Speaker 13: on its own in house chips, and it's then able 759 00:39:16,480 --> 00:39:18,080 Speaker 13: to give it to you and I via Gemini. 760 00:39:18,160 --> 00:39:19,000 Speaker 8: Or whether even we're. 761 00:39:18,880 --> 00:39:22,239 Speaker 13: Using a pixel phone that suddenly becomes music to other 762 00:39:22,239 --> 00:39:24,440 Speaker 13: people's ears. Maybe it's a meta who suddenly wants a 763 00:39:24,480 --> 00:39:27,480 Speaker 13: TPU because it's slightly cheaper than an Nvidio. But remember 764 00:39:27,719 --> 00:39:30,040 Speaker 13: that's quick to say we still wanted video chips. We 765 00:39:30,080 --> 00:39:31,719 Speaker 13: still want to be able to use that in our 766 00:39:31,760 --> 00:39:34,520 Speaker 13: Google Cloud offering. So I do think there's an element 767 00:39:34,560 --> 00:39:37,799 Speaker 13: that all can win, and we'll get more specific for 768 00:39:37,880 --> 00:39:40,279 Speaker 13: what chips we want in which scenario, which model we 769 00:39:40,320 --> 00:39:43,279 Speaker 13: want in which scenario, and eventually that will give us 770 00:39:43,280 --> 00:39:46,120 Speaker 13: a productivity games we all keep wittering on about. But 771 00:39:46,200 --> 00:39:49,160 Speaker 13: for now it is a question of Marvel doing well today. Look, 772 00:39:49,200 --> 00:39:52,000 Speaker 13: earnings came out yesterday. This is a company that makes 773 00:39:52,080 --> 00:39:56,840 Speaker 13: chips for application specific uses they make Trainium three with Amazon, 774 00:39:56,880 --> 00:39:58,960 Speaker 13: for example. There are gonna be many winners in this, 775 00:39:59,080 --> 00:40:01,200 Speaker 13: but we're still going to question and quite the size 776 00:40:01,200 --> 00:40:01,640 Speaker 13: of the winning. 777 00:40:02,719 --> 00:40:05,239 Speaker 2: God, we didn't even get to Amazon. Can you come 778 00:40:05,239 --> 00:40:07,359 Speaker 2: on every day? Can I ask producer James to make 779 00:40:07,400 --> 00:40:09,719 Speaker 2: that happen? I would appreciate it if we could do this, 780 00:40:10,320 --> 00:40:12,880 Speaker 2: I'm sure. Caroline. It's great to see you. Thank you 781 00:40:12,920 --> 00:40:16,120 Speaker 2: for your readout on this fascinating moment in time when 782 00:40:16,160 --> 00:40:18,640 Speaker 2: we keep our eyes on the AI space. Caroline Hide 783 00:40:18,640 --> 00:40:23,799 Speaker 2: only on Bloomberg. Thanks for listening to the Balance of 784 00:40:23,840 --> 00:40:27,360 Speaker 2: Power podcast. Make sure to subscribe if you haven't already, 785 00:40:27,360 --> 00:40:30,680 Speaker 2: at Apple, Spotify, or wherever you get your podcasts, and 786 00:40:30,760 --> 00:40:33,359 Speaker 2: you can find us live every weekday from Washington, DC 787 00:40:33,520 --> 00:40:36,280 Speaker 2: at noontime Eastern at Bloomberg dot com.