WEBVTT - Wall Street Bets on If, When AI Bubble Will Pop 0:00:02.520 --> 0:00:13.520 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:13.560 --> 0:00:17.400 from coast to coast with Caroline Hide in New York 0:00:17.640 --> 0:00:19.599 and Eva Low in Sent Francisco. 0:00:23.120 --> 0:00:26.360 This is Bloomberg Tech coming up, Well Tech. 0:00:26.520 --> 0:00:29.600 As you can see, trades lower as AI anxiety kicks 0:00:29.640 --> 0:00:32.960 off the last full trading week of the year, our investors. 0:00:32.520 --> 0:00:34.040 Doubling down or bracing for a pop. 0:00:34.280 --> 0:00:37.560 We discuss plus big deals in big tech with Service 0:00:37.600 --> 0:00:41.680 Now and Intel in advanced talks to spend billions on startups, 0:00:42.159 --> 0:00:45.360 and as stable coin Giant wants a soccer team, why 0:00:45.440 --> 0:00:49.159 Teather is bidding more than a billion for Italy's Juventus. 0:00:49.560 --> 0:00:52.559 But first a check in on these markets. We want 0:00:52.560 --> 0:00:54.160 to talk soccer, but we're talking what the markets are 0:00:54.240 --> 0:00:54.400 up to. 0:00:54.440 --> 0:00:56.240 Under pressure by a quarter of percent on the Nasdaq 0:00:56.280 --> 0:00:58.640 one hundred is you'll see, we're off of our lows 0:00:58.640 --> 0:01:00.840 of the day, but still in the last full training 0:01:01.000 --> 0:01:03.600 week ahead of the end of the year. Are people 0:01:03.640 --> 0:01:06.160 taking some risk off the table? They're certainly taking risk off. 0:01:06.280 --> 0:01:08.960 In the crypto space, we're down sub ninety thousand once again, 0:01:09.000 --> 0:01:12.399 eighty nine and twenty four or off by another couple 0:01:12.400 --> 0:01:14.840 of percentage points after a downdraft over the course of 0:01:14.880 --> 0:01:19.080 the weekend. So the moon music again speaking to AI anxiety, 0:01:19.200 --> 0:01:21.240 speaking to some nervousness. 0:01:20.800 --> 0:01:24.000 Around valuation is today's picture. But take a look at 0:01:24.000 --> 0:01:26.120 some of the individual names. Service Now is off by 0:01:26.160 --> 0:01:26.880 more than ten percent. 0:01:26.959 --> 0:01:29.720 Is maybe we still see companies spending in terms of 0:01:29.880 --> 0:01:32.440 M and A. There is service Now potentially in talks 0:01:32.440 --> 0:01:35.759 to buy cybersecurity Unicorn armists being reported over the course 0:01:35.800 --> 0:01:37.600 of the weekend could valuate about. 0:01:37.360 --> 0:01:38.160 Seven billion dollars. 0:01:38.160 --> 0:01:40.759 That would be the biggest ever deal for Service Now 0:01:40.800 --> 0:01:44.200 if these reports come true from Bloomberg, and indeed we 0:01:44.240 --> 0:01:47.280 could see it just delving ever more deeply into cybersecurity. 0:01:47.319 --> 0:01:49.280 Intel off by five ten percent as it too is 0:01:49.320 --> 0:01:52.320 in advanced talks. We understand to buy an AI chip 0:01:52.360 --> 0:01:54.880 start up that's sam Manova Systems for about one point 0:01:54.920 --> 0:01:56.320 six billion dollars and. 0:01:56.320 --> 0:01:58.160 Tesla avan record high. 0:01:58.280 --> 0:02:00.440 Will we close this day at the first record for 0:02:00.480 --> 0:02:04.040 Tesla since December twenty twenty four. The catalysts, well, we're 0:02:04.080 --> 0:02:06.960 bush going more overweight on the stop once again. But 0:02:07.040 --> 0:02:10.240 other than that, no clear fundamental driver that is what 0:02:10.320 --> 0:02:12.440 we're looking at on the day. Let's look at just 0:02:12.480 --> 0:02:16.680 the course of Chatchipat and since twenty twenty two, I 0:02:16.680 --> 0:02:18.680 want to show you the growth of the nazdat one 0:02:18.840 --> 0:02:23.160 hundred phenomenal up more than one hundred percentage points. It's 0:02:23.160 --> 0:02:26.639 more than doubled, of course, but doubts about the AI trade. 0:02:26.440 --> 0:02:27.519 They're starting to grow too. 0:02:27.919 --> 0:02:31.440 Now. Bluebgg's market reporter Randalstelica could set us up for 0:02:31.520 --> 0:02:34.720 what the end of this week, Anxiety is saying about 0:02:34.760 --> 0:02:37.519 the belief in this one hundred percent rallies. It's November 0:02:37.560 --> 0:02:41.000 twenty twenty two. Is it's Chatchybaut first burst onto the scene? Ryan, 0:02:41.240 --> 0:02:43.560 We are having yet more and more concerns about the 0:02:43.600 --> 0:02:45.440 valuations of the run up in certain companies. 0:02:46.200 --> 0:02:48.360 Hey, good morning, thanks for having me so. Yeah, a 0:02:48.400 --> 0:02:50.839 lot of these concerns have been just sort of percolating 0:02:50.880 --> 0:02:52.960 throughout the mark and every so often we'll see them 0:02:53.000 --> 0:02:55.040 sort of, you know, e merge and we come go 0:02:55.120 --> 0:02:55.880 to the forefront. 0:02:56.080 --> 0:02:57.720 That is sort of what we're seeing right now. 0:02:57.760 --> 0:02:59.720 It does seem like there is a lot more skeptics, 0:02:59.760 --> 0:03:04.520 as a lot more caution about valuations, about growth prospects, 0:03:04.680 --> 0:03:06.720 about when we are going to start seeing a more 0:03:06.760 --> 0:03:10.560 pronounced return on all of this AI spending, and maybe 0:03:10.600 --> 0:03:12.320 just because it's sort of like the end of the 0:03:12.400 --> 0:03:14.760 year people are looking to close out their books. Maybe 0:03:14.800 --> 0:03:17.520 people are taking a reassessment right now of all the 0:03:17.520 --> 0:03:19.519 big games that we've seen in a number of AI 0:03:19.600 --> 0:03:21.840 stocks and just sort of considering where they might be 0:03:21.840 --> 0:03:23.040 going in twenty twenty six. 0:03:24.360 --> 0:03:26.359 I mean, there really is some of the most read 0:03:26.400 --> 0:03:28.440 stories throughout the course of the weekend, and indeed on 0:03:28.440 --> 0:03:30.320 this day is the one that Wall Street sees AI 0:03:30.400 --> 0:03:33.440 bubble coming and is betting on when it pops, if 0:03:33.480 --> 0:03:35.400 indeed it does. The eye of the storm of in 0:03:35.480 --> 0:03:38.520 companies like Oracle, even in Video, which has been the 0:03:38.680 --> 0:03:40.640 pin up for this year and still remains so in 0:03:40.720 --> 0:03:43.080 terms of a twelve month training basis, but of late 0:03:43.120 --> 0:03:45.160 has taken a hit to market capitalization. Are there any 0:03:45.240 --> 0:03:48.800 particular areas that we're seeing the most pain right well. 0:03:48.840 --> 0:03:50.880 One interesting theme that we wrote about I think about 0:03:50.880 --> 0:03:53.320 a week ago is sort of a consolation of stocks 0:03:53.320 --> 0:03:55.800 that are more associated with open ai as opposed to 0:03:55.840 --> 0:03:58.880 the ones that are more associated with alphabet And for 0:03:59.400 --> 0:04:02.119 much of this year, any company connected with open ai 0:04:02.280 --> 0:04:05.320 saw pretty strong stock gains. A lot of companies rallied 0:04:05.320 --> 0:04:08.720 when they would announce deals with the company with the startup, 0:04:08.960 --> 0:04:11.200 and now we are really seeing that reverse. There's a 0:04:11.320 --> 0:04:14.320 lot more skepticism about is open ai going to be 0:04:14.320 --> 0:04:16.840 able to grow fast enough in order to meet all 0:04:16.880 --> 0:04:19.520 of these sort of deals and obligations that it's announced. 0:04:19.920 --> 0:04:23.480 As skepticism around that has grown, you have seen companies 0:04:23.520 --> 0:04:27.200 connected to open ai stort to really come under pretty 0:04:27.200 --> 0:04:31.719 pronounced weakness. You mentioned Oracle, but also in the sense Microsoft, Nvidia, 0:04:31.880 --> 0:04:34.480 Core Weave, companies like this, Whereas companies that are more 0:04:34.520 --> 0:04:38.040 connected to Alphabet and Jim and I, which is currently 0:04:38.080 --> 0:04:40.960 seen as sort of the stronger AI play, those companies 0:04:41.000 --> 0:04:42.640 have been doing, you know, continuing to hold up in 0:04:42.640 --> 0:04:43.679 a lot better fashion. 0:04:45.560 --> 0:04:49.320 Ron Vastedika, You're continuing to write upon all of these 0:04:49.360 --> 0:04:50.120 themes as we. 0:04:50.120 --> 0:04:52.640 Tie up twenty twenty five. Fantastic to have you kick 0:04:52.680 --> 0:04:55.640 off the show. We thank you. Let's keep this discussion going. 0:04:55.760 --> 0:04:57.880 Let's delve a little bit deeper into the signals in 0:04:57.920 --> 0:05:00.400 the economy what that's doing in terms of trickling into business. 0:05:00.440 --> 0:05:04.160 Nothing Gallagher's with us principal economists and director at Board. Now, 0:05:04.160 --> 0:05:07.600 that's an aipowered enterprise planning platform. You provide macro analysis. 0:05:07.600 --> 0:05:11.080 You provide strategic guidance to global companies on business investment, 0:05:11.080 --> 0:05:13.600 on economic policy. And what's really interesting is you're sort 0:05:13.600 --> 0:05:16.640 of telling us and pointing towards your expertise, showing that 0:05:16.640 --> 0:05:19.239 twenty twenty six is really going to be a prove 0:05:19.360 --> 0:05:20.000 to me moment. 0:05:20.240 --> 0:05:20.520 Right. 0:05:20.600 --> 0:05:22.880 For twenty twenty five, it's been about picks and shovels 0:05:22.880 --> 0:05:26.080 and infrastructure. Twenty twenty six, we need the economic upside, 0:05:26.080 --> 0:05:27.400 We need the productivity gains. 0:05:28.440 --> 0:05:31.120 Yeah, absolutely, I mean so far right, we've had really 0:05:31.240 --> 0:05:34.599 broad based adoption of AI, about fifty five percent of 0:05:34.640 --> 0:05:38.200 American workers, for example, say that they're utilizing AI. We 0:05:38.279 --> 0:05:41.240 haven't seen it translate into the productivity numbers, right, And 0:05:41.279 --> 0:05:43.240 this isn't just with the government data. It's also with 0:05:43.400 --> 0:05:46.440 private studies as well, in university studies as well. So 0:05:46.440 --> 0:05:48.839 as we get into twenty twenty six, to really validate 0:05:48.880 --> 0:05:51.480 the underlying fundamentals, we're not only going to have to 0:05:51.520 --> 0:05:53.360 see that breadth, we're going to have to see really 0:05:53.400 --> 0:05:55.279 meaningful depth of adoption as well. 0:05:56.600 --> 0:05:59.680 Natalie, When you're pouring over the data, what is the 0:05:59.760 --> 0:06:01.120 data that we're going to need? Is it going to 0:06:01.120 --> 0:06:04.719 be the earnings of healthcare companies in financial institutions that 0:06:04.800 --> 0:06:07.280 actually start to see margin improvement because of AI adoption. 0:06:07.360 --> 0:06:08.400 How do you get that? Tell? 0:06:09.600 --> 0:06:09.880 Yeah? 0:06:09.920 --> 0:06:12.039 Absolutely, I mean the first place we'll probably see it 0:06:12.040 --> 0:06:15.520 as in earnings release, right, The government data often lags behind. 0:06:15.880 --> 0:06:18.720 You know, We've seen a lot of earnings releases where 0:06:18.839 --> 0:06:21.720 CEOs have said, hey, we're utilizing AI. We're seeing these 0:06:21.760 --> 0:06:24.240 productivity gains. At the same time, we're not seeing them 0:06:24.279 --> 0:06:27.280 show up in as meaningfully as a way as we're 0:06:27.279 --> 0:06:30.240 going to need to really justify the valuations that are 0:06:30.279 --> 0:06:32.760 out there, really confirm right that we are seeing that 0:06:32.800 --> 0:06:37.560 productivity growth or that return on the transformational promise of AI. 0:06:38.680 --> 0:06:42.120 What we have seen show up is the AI investment 0:06:42.200 --> 0:06:45.760 numbers driving GDP figures. Many would say that basically twenty 0:06:45.839 --> 0:06:49.440 twenty five's economic growth entirely hinges on a few big 0:06:49.520 --> 0:06:53.880 names in tech making some extraordinary big investment plans. How 0:06:53.960 --> 0:06:57.560 wide could the economic shakeout be if indeed we did 0:06:57.600 --> 0:07:01.599 see a pullback and a questioning of productivity. 0:07:01.720 --> 0:07:04.559 Yeah, I mean it could be really significant, right, twenty 0:07:04.600 --> 0:07:08.520 twenty five AI spending, CAVIX spending, it's really served as 0:07:08.560 --> 0:07:12.800 a macroeconomic stabilizer a macroacademic anchor, even as we've seen 0:07:13.160 --> 0:07:16.360 other parts of the economy really meaningfully stagnate. Right, It's 0:07:16.400 --> 0:07:19.040 really been this promise that's continued to lead growth to 0:07:19.120 --> 0:07:24.160 not only deliver but really surpass expectations in twenty twenty five. 0:07:25.000 --> 0:07:26.760 And that's definitely true, right, it continues to be an 0:07:26.760 --> 0:07:28.680 anchor in twenty twenty six. So if we see a meaningful, 0:07:29.120 --> 0:07:32.320 meaningful pullback, if we see AI not deliver and sort 0:07:32.360 --> 0:07:35.880 of that translate or cascade through the economy, I mean, 0:07:35.920 --> 0:07:39.800 the economic implications are really really broad based. Well, outside 0:07:39.800 --> 0:07:42.400 of tech, how. 0:07:42.240 --> 0:07:44.760 Broad based do you think the economic implications have been 0:07:45.240 --> 0:07:50.040 of China and US and this technology war? Really we're 0:07:50.160 --> 0:07:52.640 seeing at the heart of it, how much has that 0:07:52.800 --> 0:07:54.520 implicated US businesses? 0:07:54.640 --> 0:07:55.880 And in the longer term do you. 0:07:55.800 --> 0:07:58.720 Think it's been fascinating? 0:07:58.800 --> 0:07:58.920 Right? 0:07:58.960 --> 0:08:02.800 Because US businesses, even with sort of this this headwind 0:08:02.920 --> 0:08:07.000 of overall trade uncertainty back and forth with China, they've 0:08:07.040 --> 0:08:08.760 really continued to deliver. 0:08:08.840 --> 0:08:10.440 And so that's really positive to see. 0:08:10.640 --> 0:08:10.920 You know. 0:08:11.000 --> 0:08:13.200 On the other hand, right, if we do get more 0:08:13.240 --> 0:08:17.200 and more to coupling with China, the economic implications are also. 0:08:17.040 --> 0:08:18.240 Broad based there as well. 0:08:18.240 --> 0:08:20.960 We have a reduction in revenue translates to a reduction 0:08:21.000 --> 0:08:23.160 in R and D, and so of course the economic 0:08:23.160 --> 0:08:26.560 implications based on what direction we take can be. They 0:08:26.600 --> 0:08:28.880 can be quite extensive. Now, at the same time, if 0:08:28.920 --> 0:08:32.480 it leads to sort of a benefit when we look 0:08:32.520 --> 0:08:35.719 at the competition dynamics, then maybe it's a little bit 0:08:35.760 --> 0:08:37.840 of a win win for the US. 0:08:39.679 --> 0:08:43.000 What's interesting is while we've got perhaps a questioning of 0:08:43.080 --> 0:08:46.360 valuations in the market, some still manage to rise on 0:08:46.440 --> 0:08:49.560 absolutely no fundamentals at all. And Tesro is currently maybe 0:08:49.679 --> 0:08:51.320 closing in yet new record high. 0:08:51.320 --> 0:08:53.400 The first one is be seen since December twenty to 0:08:53.400 --> 0:08:53.880 twenty four. 0:08:54.160 --> 0:08:56.319 Now, maybe that's a bit of moon music coming from 0:08:56.360 --> 0:08:59.560 an extraordinary valuation being given to the private company that 0:08:59.600 --> 0:09:03.200 is Space Sex elsewhere in Ela Musk's realm, Natalie, what 0:09:03.360 --> 0:09:05.240 you think about some of the froth in the area 0:09:05.280 --> 0:09:09.280 is particularly in the private area. 0:09:08.559 --> 0:09:10.640 It's been really interesting to see. 0:09:10.679 --> 0:09:13.000 Right, whenever you know, as an economist, what I look like, 0:09:13.160 --> 0:09:15.880 what I look at is cashields, right, and whenever we 0:09:16.160 --> 0:09:19.640 end a rate cut cycle, or you know, debatably end 0:09:19.640 --> 0:09:22.439 a rate cut cycle like we are right now, cashields 0:09:22.440 --> 0:09:25.200 become less attractive. And what we need to really carefully 0:09:25.200 --> 0:09:30.400 watch is are we seeing meaningful investment in actual infrastructure 0:09:30.400 --> 0:09:35.959 and that's what's really driving these these extremely high elevated. 0:09:36.320 --> 0:09:38.320 Excuse me, these elevated. 0:09:37.840 --> 0:09:43.239 Valuations, or are we seeing investors go towards alternative investments 0:09:43.360 --> 0:09:47.480 because cashields are quite quite impacted, and so we're going 0:09:47.559 --> 0:09:50.959 to really need to see these valuations be meaningful, right, 0:09:50.960 --> 0:09:52.559 We're gonna need to see that the proof is in. 0:09:52.520 --> 0:09:56.400 The pudding that it is worth eight hundred billion dollars. 0:09:56.720 --> 0:09:59.240 Natha Gallagher with the macro and the micro for us, 0:09:59.280 --> 0:10:03.480 We so appreciate to principal economist at Board. Now coming up, 0:10:03.840 --> 0:10:05.800 Juventus shares. Have you been watching them? 0:10:05.920 --> 0:10:10.199 They are rallying after excell rejected and unsolicited takeover bid 0:10:10.559 --> 0:10:15.120 from cryptogiant Tether bagg into that one plus Netflix makes 0:10:15.120 --> 0:10:17.760 its case for Warner Brothers after Paramount, of course, goes 0:10:17.760 --> 0:10:20.120 public with its own hostile offer. What did the co 0:10:20.240 --> 0:10:41.640 CEOs manage to say? This is Bloomberg Tech shares of 0:10:41.640 --> 0:10:44.920 Italian football club Juventus. You might call it a soccer club, 0:10:44.960 --> 0:10:47.720 I call it football. When they jumped after crypto company 0:10:47.760 --> 0:10:50.480 Tether made a take of a bid for one point 0:10:50.520 --> 0:10:52.959 one billion euros about one point three billion dollars now. 0:10:52.960 --> 0:10:55.280 The offer was swiftly rejected by the holding company of 0:10:55.320 --> 0:10:58.360 the Agnelli family, which owns a controlling stake in what 0:10:58.520 --> 0:11:00.160 is one of Italy's most. 0:11:00.080 --> 0:11:01.360 Distinguished football clubs. 0:11:01.800 --> 0:11:03.720 Let's kept more on all of There's a Brembag editor 0:11:03.720 --> 0:11:07.160 in Milan, Tomaso ev Haart fascinating this family. 0:11:07.200 --> 0:11:08.839 The Agnelly family. 0:11:08.640 --> 0:11:11.679 Have held a controlling state for years in this team 0:11:11.840 --> 0:11:15.960 and indeed earned Ferrari and other big auto sectors. But Tomaso, 0:11:16.360 --> 0:11:19.440 what does Tether have in terms of its game plan. 0:11:21.520 --> 0:11:24.360 It's a very fascinating story here from Italy, you know, 0:11:24.559 --> 0:11:29.760 is like new money versus old money. Interesting enough, Tether 0:11:30.160 --> 0:11:34.680 founders are originally from Turin, the city where you went 0:11:34.720 --> 0:11:37.920 to was born and they support you went to, so 0:11:38.480 --> 0:11:41.959 they started as a fan. And Ardoino, the Sea of 0:11:42.040 --> 0:11:44.200 Tether told us in a interview a few months ago 0:11:44.280 --> 0:11:46.040 that he has been a fan of You Wentus forever 0:11:46.679 --> 0:11:49.040 and Tether both a ten percents taking You went to 0:11:49.040 --> 0:11:52.959 a few months ago was the first football team where 0:11:52.960 --> 0:11:56.040 a kip cryto a company in both a significant state. 0:11:56.120 --> 0:11:59.320 They also have a board seat in a U went 0:11:59.400 --> 0:12:03.000 to and how they arrive with the bid Friday night 0:12:04.040 --> 0:12:08.760 for the controlling mistake to the Annually family, italy most 0:12:08.760 --> 0:12:12.079 important industrial plan. But the Elli family said no, no, no, 0:12:12.080 --> 0:12:14.360 no way. We're not going to sell to Teta. We're 0:12:14.400 --> 0:12:18.240 not going to sell to anyone. Juventus. They've had Juventus 0:12:18.480 --> 0:12:22.960 far over a century. So so far no news but 0:12:23.200 --> 0:12:26.880 shares move. They didn't get up to the level of 0:12:27.000 --> 0:12:30.199 the price offered to the annially, but there was more 0:12:30.240 --> 0:12:33.560 than fourteen percent today in the in the Italian market 0:12:33.679 --> 0:12:36.680 in a very difficult moment on the pitch for Juventus. 0:12:37.040 --> 0:12:38.720 They're not doing that greater this year. 0:12:39.960 --> 0:12:40.160 Yeah. 0:12:40.280 --> 0:12:43.400 Is that the argument coming from these lifelong fans that 0:12:43.559 --> 0:12:47.199 tether that they could in some way manage the business 0:12:47.320 --> 0:12:48.840 of football or soccer better. 0:12:51.240 --> 0:12:53.480 That's a good question. For sure. They have a lot 0:12:53.520 --> 0:12:57.360 of cash and in the bid they said we're also 0:12:57.559 --> 0:13:02.479 we're also ready to invest one bid euros in a Juventus. 0:13:02.760 --> 0:13:06.920 But this is not enough for the Annealist. Saturday afternoon, 0:13:07.000 --> 0:13:09.440 John Elkin made the video. John Elka is the leader 0:13:09.480 --> 0:13:13.440 of the Anneally family nowadays, made the video online say 0:13:14.000 --> 0:13:16.719 you know, we have defended the Juventus value for over 0:13:16.760 --> 0:13:19.920 a century. We want to stay close to Juventus. We've 0:13:19.960 --> 0:13:22.960 been with Juventus in the bed and in the good 0:13:23.000 --> 0:13:27.200 times and will stick with the data. Interesting enough, is 0:13:27.240 --> 0:13:30.760 a very delicate and sensitive moment for the Anially family. 0:13:30.800 --> 0:13:34.559 Why because they are reshaping their portfolio. You know, they're 0:13:34.600 --> 0:13:37.520 the biggest investor in the Lantes. The automotive industry is 0:13:37.559 --> 0:13:42.439 facing a disruptive moment generally have sold some assets recently, 0:13:42.840 --> 0:13:47.280 including their truck company Iveko to Tata in India. They 0:13:47.320 --> 0:13:49.560 are now in talks to sell the media asset in 0:13:49.600 --> 0:13:52.679 Italy to a Greek company. So there's a lot of 0:13:52.760 --> 0:13:56.000 interest and also a lot of political debate on what 0:13:56.040 --> 0:13:59.520 the Annually families are doing with their Italian holdings. 0:14:00.880 --> 0:14:03.720 Yes, some pushback against Greece's Antenna Group for wanting to 0:14:03.760 --> 0:14:04.840 have that Italian asset. 0:14:04.920 --> 0:14:07.800 Meanwhile, Tedther's been investing in plenty of Italian assets. 0:14:07.840 --> 0:14:10.319 It looks like more across the board, whether it's genomics 0:14:10.360 --> 0:14:13.880 companies or even in media companies as well. Tomaso is 0:14:13.920 --> 0:14:16.200 so great catching up with the Snaks, staying a little 0:14:16.200 --> 0:14:19.160 bit late in Italy. Tomaso Ebhart there from Milan. Look, 0:14:19.200 --> 0:14:22.000 let's pivot into a different world of entertainment now. The 0:14:22.080 --> 0:14:24.880 co CEOs of Netflix, they've been making their case for 0:14:24.920 --> 0:14:28.680 requiring Warner Brothers Discovery to their own employees. Let's get 0:14:28.720 --> 0:14:31.720 the latest with Bloomberg's entertainment editor Lucas Shaw, who's been 0:14:31.720 --> 0:14:34.800 across this M and A story that is just fueling 0:14:34.920 --> 0:14:38.200 everyone's attention in Hollywood at the moment. So what is 0:14:38.240 --> 0:14:40.240 it that the co CEOs can put across their employees 0:14:40.280 --> 0:14:41.520 to calm their own nerves. 0:14:42.640 --> 0:14:45.880 It was a Q and A of sort. They first 0:14:45.880 --> 0:14:48.680 of all stated they're the rationale for doing the deal, 0:14:49.120 --> 0:14:51.680 and then tried to address some of the five, six, 0:14:51.800 --> 0:14:54.040 seven biggest questions that there are out there. You know, 0:14:54.160 --> 0:14:56.080 is this going to kill Hollywood? What do they think 0:14:56.120 --> 0:14:58.360 of the paramount hostile bid? Do they actually think they 0:14:58.400 --> 0:15:01.520 can get this deal approved? And the kind of the 0:15:01.520 --> 0:15:04.200 big one about movie theaters. It was as much for 0:15:04.680 --> 0:15:06.760 the public, I think as employees. You know, they put 0:15:06.760 --> 0:15:08.960 it in a filing so that the world could see it. 0:15:09.000 --> 0:15:11.880 They've obviously been keeping their employees apprize to the best 0:15:12.120 --> 0:15:14.240 of their ability over the last couple of weeks, and 0:15:14.600 --> 0:15:16.520 the ones I've spoken with have said it's been pretty 0:15:16.560 --> 0:15:17.720 status quo at the company. 0:15:19.200 --> 0:15:21.680 Meanwhile, of course, what we'll wait for In the entertainment 0:15:21.680 --> 0:15:24.920 world on a Sunday is your note to drop of 0:15:25.080 --> 0:15:28.040 screen Time and lucas you've been writing in particular about 0:15:28.480 --> 0:15:31.560 amid all of this fury about concern about consolidation in 0:15:31.560 --> 0:15:34.880 the sector, is also AI, which is looming large in 0:15:35.000 --> 0:15:37.480 many executive's head and employees. 0:15:37.560 --> 0:15:39.280 What do you make of the AI threat right now? 0:15:40.120 --> 0:15:44.600 Well, Hollywood is is very conflicted, you know. You see 0:15:44.600 --> 0:15:47.760 certain filmmakers come out and say I've interviewed a couple 0:15:47.840 --> 0:15:50.680 of them and say it's the future. We might as 0:15:50.680 --> 0:15:53.200 well figure out how to use it and integrate it 0:15:53.240 --> 0:15:56.040 into our workflow. And then there are others like Germo 0:15:56.080 --> 0:15:59.920 del Toro and Ryan Johnson who basically said they'd rather 0:16:00.640 --> 0:16:02.560 than use AI or that they will do anything that 0:16:02.560 --> 0:16:04.960 they can to stop it. You saw a very strong 0:16:05.040 --> 0:16:08.160 negative reaction last week when Disney announced a deal with 0:16:08.160 --> 0:16:10.120 Open Ai, where a lot of the unions and a 0:16:10.120 --> 0:16:12.680 lot of workers wondered what the company was doing. 0:16:14.760 --> 0:16:16.600 Well reading it with interest. 0:16:16.680 --> 0:16:19.200 It's also featured in Business Weeks the Year Ahead for 0:16:19.200 --> 0:16:21.280 twenty twenty six. Go look at it. Grapple with the 0:16:21.320 --> 0:16:24.840 future of Hollywood. All Things AI from Lucashaw thank you 0:16:24.920 --> 0:16:26.840 very much for keeping us up to speed. Meanwhile, President 0:16:26.920 --> 0:16:30.000 Donald Trump's knew one hundred thousand dollars fee on h 0:16:30.040 --> 0:16:32.840 one b hires and it's set to deliver the biggest 0:16:32.840 --> 0:16:36.240 blow to it outsourcing and staffing companies. According to analysis 0:16:36.240 --> 0:16:40.880 done by Bloomberg, businesses like Tutter, Consultancy Services, and Emphasis, 0:16:41.040 --> 0:16:43.560 they're likely to be hit harder than say US tech 0:16:43.560 --> 0:16:47.120 giants like Amazon and Google, but still all impacted. Let's 0:16:47.120 --> 0:16:49.680 dig into the broader impact with Hibbert Anvia. She is 0:16:49.800 --> 0:16:52.680 a partner at ericson Immigration Group, working around the clock 0:16:52.760 --> 0:16:55.400 on issues such as this. I'm sure, and the context 0:16:55.560 --> 0:16:59.400 is companies that take the financial hit, but also state 0:16:59.520 --> 0:17:01.360 that tried to push back on it. And the latest 0:17:01.400 --> 0:17:04.200 is that we understand a group of states are actually 0:17:04.400 --> 0:17:07.959 suing to block this in particular. Do you think that 0:17:07.960 --> 0:17:09.399 that's going to gain any traction. 0:17:11.320 --> 0:17:13.480 I do think that it's going to gain traction because 0:17:13.520 --> 0:17:16.080 what the states are doing that's different than some of 0:17:16.080 --> 0:17:19.640 the lawsuits that have already been filed is they're making 0:17:20.280 --> 0:17:24.320 a legal argument based on their specific state economies, which 0:17:24.359 --> 0:17:26.440 I think is a really important argument because it goes 0:17:26.480 --> 0:17:29.879 directly against the claim that a lot of opponents to 0:17:29.880 --> 0:17:31.840 the H one B visa have that the H one 0:17:31.880 --> 0:17:35.000 B visa is actually harmful for the US economy. The 0:17:35.080 --> 0:17:37.920 lawsuit that was filed by California and the nineteen additional 0:17:37.960 --> 0:17:41.400 states essentially argues that this one hundred thousand dollars fee 0:17:41.440 --> 0:17:44.760 is going to worsen labor shortages within other important sectors 0:17:45.160 --> 0:17:47.959 that exist within the state economy by making it more 0:17:47.960 --> 0:17:52.159 difficult to fill spots for occupations that are already experiencing shortages, 0:17:52.440 --> 0:17:56.240 such as physicians or researchers or teachers nurses, for example. 0:17:56.560 --> 0:17:58.800 And so I think that this lawsuit puts states in 0:17:58.840 --> 0:18:01.800 a position where they can actually show harm in a 0:18:01.840 --> 0:18:04.280 way that's more effective than some of the lawsuits that 0:18:04.280 --> 0:18:05.199 have already been filed. 0:18:06.840 --> 0:18:11.640 Their argument is that no presidential administration can rewrite immigration law. 0:18:11.600 --> 0:18:12.320 Is what they're taking. 0:18:12.359 --> 0:18:14.320 And I think it's the third challenge at least that 0:18:14.320 --> 0:18:17.399 we've seen to this particular fee increase. But on the 0:18:17.400 --> 0:18:20.560 flip side, the president and the administration would say we 0:18:20.640 --> 0:18:22.919 need this fee because H one B is being abused. 0:18:23.320 --> 0:18:25.880 What evidence is there for that? From your perspective, hire. 0:18:27.000 --> 0:18:29.320 I think the more important evidence is when you take 0:18:29.320 --> 0:18:31.679 a look at the H one B filing process in 0:18:31.720 --> 0:18:34.920 and of itself, it actually has several checks and balances 0:18:34.920 --> 0:18:38.879 that are already built in to ensure that the H 0:18:38.920 --> 0:18:41.359 one B visa is not being abused or misused in 0:18:41.400 --> 0:18:44.960 any way. And in particular, one of the core components 0:18:44.960 --> 0:18:47.040 of filing an H one B visa is to be 0:18:47.080 --> 0:18:49.760 able to demonstrate back to the government that the filing 0:18:49.800 --> 0:18:52.879 of this visa is not going to displace a qualified 0:18:53.040 --> 0:18:55.800 US worker. So I think that what's more important to 0:18:55.800 --> 0:18:58.640 focus on are the checks and balances and the safeguards 0:18:58.640 --> 0:19:01.080 that are already in place for the HI visa to 0:19:01.200 --> 0:19:06.639 prevent the fraud and misuse, because the highly restrictive policies 0:19:07.119 --> 0:19:09.679 for folks that are actually proponents of the AGE one 0:19:09.800 --> 0:19:13.000 V visa create a new category of risk, which is 0:19:13.040 --> 0:19:16.440 that this is actually going to hamper and diminish the 0:19:16.680 --> 0:19:20.399 American innovation and the US companies leading the charge on 0:19:20.440 --> 0:19:21.200 global innovation. 0:19:22.720 --> 0:19:25.719 Now we take it to another extreme, and what's interesting 0:19:25.760 --> 0:19:29.159 is there's actually blowback not coming from Democrat states who 0:19:29.160 --> 0:19:33.520 are suing, but actually conservative lawmakers who are saying that 0:19:33.600 --> 0:19:37.960 in some ways Trump is supporting yet more legal migration 0:19:38.640 --> 0:19:41.879 and immigration into the country. They're criticizing President Trump for 0:19:41.880 --> 0:19:45.240 supporting more visas in particular to allow the entry of. 0:19:45.520 --> 0:19:47.200 High skilled foreign workers. 0:19:47.760 --> 0:19:52.040 Is there any mounting fervor around this that you're hearing 0:19:52.080 --> 0:19:54.960 him or something that companies are worried about that names 0:19:55.040 --> 0:19:58.639 like Republican Chip Roy would actually manage to prevent legal 0:19:58.680 --> 0:20:00.000 immigration at this time. 0:20:01.359 --> 0:20:03.800 I think, you know, I think that the concern in 0:20:03.840 --> 0:20:06.919 the industry is more so based on the data. I 0:20:06.920 --> 0:20:10.399 think that we're far out enough from the beginning of 0:20:10.400 --> 0:20:12.560 the year to be able to actually measure the data 0:20:12.600 --> 0:20:15.360 in an effective way. And I think that what we're 0:20:15.359 --> 0:20:18.359