WEBVTT - Consumer Confidence, AI, Media, and ChatGPT (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:05.280 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moving news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:17.360 --> 0:00:20.480 you listen to podcasts, and at Bloomberg dot com slash podcast. 0:00:21.040 --> 0:00:23.919 What a take a look at some eco data coming 0:00:23.920 --> 0:00:26.320 at here. I'm looking at the leading Economic indicators. 0:00:26.840 --> 0:00:28.080 Let me see what I pop it up on my 0:00:28.120 --> 0:00:29.320 ECO screen, which. 0:00:29.160 --> 0:00:32.640 Gives you all the economic data out there. The Leading 0:00:32.680 --> 0:00:36.800 Economic Index came in. It negative zero point six percent. I 0:00:36.840 --> 0:00:38.960 guess the bad news is it's it's a negative number, 0:00:38.960 --> 0:00:41.000 but it's in line with expectations and it's better than 0:00:41.040 --> 0:00:43.479 the prior month. But let's get some perspective on what 0:00:43.560 --> 0:00:47.400 this leading economic indicator means. Dana Peterson, she's a chief 0:00:47.440 --> 0:00:49.960 economist at the Conference Board. She joins us here. So 0:00:50.080 --> 0:00:53.000 Dana put this number in perspective for us. 0:00:54.280 --> 0:00:56.640 Sure, I mean this number is just in a string 0:00:56.720 --> 0:01:00.840 of really bad numbers of negative LAI prints the last year, 0:01:01.000 --> 0:01:03.280 and it continues to suggest when you look at the 0:01:03.320 --> 0:01:07.440 year over year measure of this that there's a recession. 0:01:08.240 --> 0:01:11.120 It's probably starting right about now. And indeed, when we 0:01:11.160 --> 0:01:13.479 look at the components, most of the components have been 0:01:13.560 --> 0:01:16.600 very weak, not only in the last month but over 0:01:16.640 --> 0:01:20.040 the last six months. And certainly credit conditions have been tightening, 0:01:20.280 --> 0:01:25.440 consumer confidence has been weaker, housing and activities been on 0:01:25.480 --> 0:01:29.080 the downturn. The only areas that have been somewhat better 0:01:29.720 --> 0:01:32.560 were certainly the labor market indicators even leading it. But 0:01:32.640 --> 0:01:35.800 even JABOS claims, which are leading indicators, have been picking 0:01:35.880 --> 0:01:38.360 up a little bit as the labor market is showing 0:01:38.400 --> 0:01:39.880 some signs of cracks. 0:01:40.800 --> 0:01:43.400 So, I mean, give us a sense, though, Dana, how 0:01:43.480 --> 0:01:46.360 is the trend here? You know, it's tough to read here, 0:01:46.360 --> 0:01:47.560 but what are you seeing in some of the data? 0:01:47.840 --> 0:01:49.880 Is you kind of do a three month or six 0:01:49.920 --> 0:01:51.880 months kind of trailing kind of look at this thing. 0:01:53.320 --> 0:01:56.600 Sure, so definitely a year on years down eight percent, 0:01:57.800 --> 0:02:00.760 so that's not great. And when we look at the 0:02:01.960 --> 0:02:06.600 six months that's down eight point seven percent, and so 0:02:06.960 --> 0:02:12.480 both these measures are pretty weak. Certainly three months, looking 0:02:12.520 --> 0:02:15.799 at three months, it's still down. So no matter what 0:02:15.960 --> 0:02:18.919 gauge or transformation you do on these data, it's telling 0:02:19.000 --> 0:02:22.280 us the same story that the economy is weakening, it's flowing. 0:02:23.400 --> 0:02:27.720 We've already seen housing activity cool. Businesses are investing less. 0:02:28.080 --> 0:02:30.440 But the key thing is the labor market and consumer 0:02:30.480 --> 0:02:33.480 spending on services. We saw in the retail sales data 0:02:33.600 --> 0:02:36.400 that consumers are still pleased to go out and go 0:02:36.520 --> 0:02:40.360 to restaurants and they are interested in services. And also 0:02:41.040 --> 0:02:43.639 the jobs market is holding up. But like I said, 0:02:43.680 --> 0:02:47.840 there are some signs of weakness, certainly amongst those former 0:02:47.880 --> 0:02:51.880 pandemic darlings that are restructuring at this time. But you 0:02:51.960 --> 0:02:54.480 still have a lot of those services industries where you 0:02:54.560 --> 0:02:57.960 have to physically show up to work still hiring. So 0:02:58.600 --> 0:03:02.440 that's the challenge certainly for our CEI, which is the 0:03:02.480 --> 0:03:06.799 current economic indicator, and that has not moved really, it's 0:03:06.800 --> 0:03:09.239 continuing to sow strength because two out of the four 0:03:09.320 --> 0:03:11.280 measures are from the labor market. 0:03:12.200 --> 0:03:14.920 So at the conference board, what is your kind of 0:03:14.960 --> 0:03:17.920 economic outlook in terms of recession? 0:03:18.080 --> 0:03:19.959 Are we having one? Are we in one? 0:03:20.120 --> 0:03:22.000 How deep will it be, how prolonged will it be? 0:03:22.040 --> 0:03:23.560 Where are you guys as you take a look at 0:03:23.600 --> 0:03:24.000 your data. 0:03:25.000 --> 0:03:27.600 Sure, we do believe a recession is going to happen. 0:03:27.639 --> 0:03:30.320 It will be short and shallow. We're thinking that we're 0:03:30.360 --> 0:03:32.880 probably going to see negative GDP growth in the second 0:03:32.919 --> 0:03:35.520 quarter where we are right now, and then it'll deepen 0:03:35.560 --> 0:03:37.920 in the third quarter, be a little less bad in 0:03:37.960 --> 0:03:39.760 the fourth quarter, and then by the beginning of next 0:03:39.840 --> 0:03:42.640 year we'll be coming out of it. So not too bad, 0:03:42.880 --> 0:03:45.160 but certainly a recession nonetheless. 0:03:45.040 --> 0:03:47.840 So in terms of inflation, that's clearly what our Federal 0:03:47.880 --> 0:03:50.760 Reserve is looking at here. And we heard comments from 0:03:51.640 --> 0:03:53.360 some FED members just over the last couple of days 0:03:53.360 --> 0:03:56.880 they were down in Amelia Island, Florida at the Atlanta 0:03:56.880 --> 0:04:01.320 FED conference Amelia Island, Florida. I mean, have a not Cleveland, John, 0:04:01.400 --> 0:04:04.760 I mean, who's kidding who here? But so, what do 0:04:04.800 --> 0:04:06.320 you think the FED is going to do with some 0:04:06.360 --> 0:04:07.640 of this data we're seeing here? 0:04:07.720 --> 0:04:07.960 Dana? 0:04:07.960 --> 0:04:10.200 Do you think this Fed's going to pause here? Do 0:04:10.240 --> 0:04:13.080 you think they even maybe even think about raising rates? 0:04:13.400 --> 0:04:15.080 Or where do you think we are here with a FED? 0:04:15.840 --> 0:04:18.040 Sure they're looking at everything. If they're looking at the 0:04:18.120 --> 0:04:22.479 leading indicators, yes, that does signal recession. But they have 0:04:22.600 --> 0:04:25.839 indicated that they are prepared for some quote unquote pain, 0:04:26.000 --> 0:04:29.520 which would be a mild recession. It's necessary to bring 0:04:29.560 --> 0:04:32.600 out inflation. And when we look at inflation, certainly last 0:04:32.600 --> 0:04:37.560 week we received the CPI, we saw some positive momentum downward, 0:04:37.839 --> 0:04:39.920 but still in all, both the headline and the core 0:04:39.920 --> 0:04:43.359 are pretty elevated. And the key drivers of underlying inflation 0:04:43.480 --> 0:04:46.520 right now are food prices on the good side, but 0:04:46.920 --> 0:04:50.000 on the services side, it's still housing in the form 0:04:50.040 --> 0:04:52.680 of rent. We should start seeing that come off in 0:04:52.720 --> 0:04:57.360 a couple of months, reflecting what's happened in home price valuations, 0:04:57.400 --> 0:05:01.839 but it's still those services, especially for travel and hotels 0:05:01.839 --> 0:05:05.760 and restaurants and healthcare, that are still very sticky, and 0:05:05.839 --> 0:05:09.200 that's what that's being challenged by. So against that backdrop, 0:05:09.240 --> 0:05:11.840 I would imagine the Fed would still look to raise 0:05:11.880 --> 0:05:15.000 interest rates at least one more time, and then once 0:05:15.040 --> 0:05:18.880 they're finished raising rates to keep them there elevated for 0:05:18.960 --> 0:05:19.920 the balands of this year. 0:05:20.680 --> 0:05:23.760 Dana Creadiegupta in New York here kind of hopping into 0:05:23.760 --> 0:05:27.680 this conversation. You're an economist by trade, of course, but 0:05:27.839 --> 0:05:30.520 from a markets perspective that doesn't seem to be priced 0:05:30.560 --> 0:05:33.120 in at all. It feels like the markets are looking 0:05:33.160 --> 0:05:35.559 ahead to cuts, are essentially just saying that the federal 0:05:35.560 --> 0:05:36.839 reserve is done hiking. 0:05:37.080 --> 0:05:39.400 And the core of that thesis is. 0:05:39.360 --> 0:05:41.560 Not only the recession call that you all were talking 0:05:41.600 --> 0:05:44.080 about at the beginning of the segment, but also the 0:05:44.120 --> 0:05:48.279 idea that the lags still haven't fully taken effect. Are 0:05:48.279 --> 0:05:50.240 you in that camp that we haven't seen the full 0:05:50.320 --> 0:05:54.520 effect of the tightening thus far, Well. 0:05:55.120 --> 0:05:57.520 No, we haven't seen the full effect because the lags 0:05:57.520 --> 0:06:00.760 are variable. It depends on what you're talking about. So 0:06:00.880 --> 0:06:04.440 certainly the housing market that's the first area of the 0:06:04.480 --> 0:06:07.800 economy to experience weakness when interest rates rise, and we've 0:06:07.800 --> 0:06:11.240 seen that. Also, businesses have pulled back on investments and 0:06:11.279 --> 0:06:14.840 capex and equipment. They're still spending on intellectual property that's 0:06:14.920 --> 0:06:18.000 kind of the digital transformation angle, but certainly businesses have 0:06:18.040 --> 0:06:21.719 pulled back. Consumers have also pulled back on durables. First 0:06:21.760 --> 0:06:24.760 of all, they're more focused on services, but also durables 0:06:24.760 --> 0:06:27.159 that anything that needs to be financed is more expensive. 0:06:27.480 --> 0:06:29.799 So the last piece of the puzzle really is services. 0:06:29.800 --> 0:06:32.640 So we're still waiting for that shoe to fall. But 0:06:32.800 --> 0:06:36.200 regarding what markets are anticipating, yes, you're right, markets are 0:06:36.480 --> 0:06:40.120 pricing in either I think most likely, you know, some 0:06:40.240 --> 0:06:43.520 kind of recession and thinking that if GDP numbers go 0:06:43.640 --> 0:06:49.359 negative or jobless or i'm sorry, jobs really weakened, that 0:06:49.400 --> 0:06:51.440 the Fed's going to blink. But I think the FED 0:06:51.480 --> 0:06:54.800 would only blink if it's really bad. And also, inflation 0:06:54.920 --> 0:06:58.039 gauges we're moving in the right direction right now, They're 0:06:58.080 --> 0:07:01.039 still very sticky, and I think the FED will would 0:07:02.160 --> 0:07:06.800 tolerate a mild recession in favor of addressing inflation. Inflation 0:07:06.920 --> 0:07:08.440 is the biggest problem in their view. 0:07:09.400 --> 0:07:12.800 All right, So I'm thinking about the labor market here 0:07:13.320 --> 0:07:15.000 and again we had a little bit better and expected 0:07:15.200 --> 0:07:18.880 jobs claims today. Where do you think the unemployment rate goes? 0:07:18.920 --> 0:07:20.840 I mean, I guess maybe just more broadly, are you 0:07:20.920 --> 0:07:22.800 kind of surprised that the labor market is as strong 0:07:22.840 --> 0:07:25.720 as it is and do you expect it to weaken 0:07:25.800 --> 0:07:26.760 materially going forward. 0:07:28.040 --> 0:07:30.280 I'm not surprised the labor market is as strong as 0:07:30.280 --> 0:07:34.600 it is, because the big difference between this potential recession 0:07:34.600 --> 0:07:38.680 and others is labor shortages. We have millions of baby 0:07:38.680 --> 0:07:42.120 boomers leaving the market the labor market, and there are 0:07:42.320 --> 0:07:45.840 enough younger people to work and replace them, and so 0:07:46.000 --> 0:07:50.040 businesses are caught in the mind. So they are many 0:07:50.080 --> 0:07:53.320 of them, according to our own survey, are hoarding workers. 0:07:53.400 --> 0:07:55.600 So they're not letting people go because they think if 0:07:55.600 --> 0:07:58.040 there is a recession, we'll be short, it will be shallow. 0:07:58.520 --> 0:08:00.600 And by the way, we don't want to everyone go 0:08:00.680 --> 0:08:02.440 and then have to bring them back at a higher 0:08:02.840 --> 0:08:07.040 pricing point. So that's why the labor market is showing 0:08:07.680 --> 0:08:10.400 signs of resiliency. It's not that it's out of step 0:08:10.480 --> 0:08:15.240 with weakness in the economy. It's because you have these 0:08:15.240 --> 0:08:16.560 severe labor shortages. 0:08:17.760 --> 0:08:21.080 When java severe labor shortages, Dana in just three thirty seconds, 0:08:21.120 --> 0:08:23.720 excuse me, are you worried at all about some sort 0:08:23.760 --> 0:08:27.760 of bifurcation when we're talking about kind of higher income 0:08:27.920 --> 0:08:31.200 lower income jobs or bisectors thirty seconds? 0:08:31.240 --> 0:08:33.760 Is that a concern for you at all? 0:08:33.920 --> 0:08:37.280 Well, I mean you're seeing it really is bisector So 0:08:37.360 --> 0:08:41.000 again the pandemic darlings, they are letting people go. The 0:08:41.320 --> 0:08:43.560 industries where you have to physically show up to work, 0:08:43.600 --> 0:08:45.720 they are hiring people, and everyone else in the middle, 0:08:45.760 --> 0:08:48.160 which is a lot, is not doing anything. So you 0:08:48.240 --> 0:08:50.280 are seeing this segmentation in the labor market. 0:08:51.440 --> 0:08:53.520 All right, Dana, thank you so much. We really appreciate it. 0:08:53.600 --> 0:08:57.320 Dan Peterson, chief Economists for the Conference Board, joining us today. Again, 0:08:57.360 --> 0:08:59.840 the leading economic indicator released by the Conference Board came 0:08:59.880 --> 0:09:03.680 in negative zero point six percent, in line with expectations. 0:09:04.280 --> 0:09:04.559 I don't know. 0:09:04.600 --> 0:09:06.840 I guess the good news is it's it's better than 0:09:06.920 --> 0:09:09.680 last month. But the bad news is it's still negative 0:09:09.679 --> 0:09:13.560 and consistently negative. So looking for turn there. Certain parts 0:09:13.559 --> 0:09:16.160 of the consumer remained very strong, as Dana was mentioning, 0:09:16.200 --> 0:09:20.599 but again the Conference Board calling for a shallow recession. 0:09:22.120 --> 0:09:25.520 You're listening to the team Can's are live program Bloomberg 0:09:25.559 --> 0:09:28.920 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:09:29.000 --> 0:09:32.160 the iHeartRadio app and the Bloomberg Business app, or listen 0:09:32.240 --> 0:09:34.480 on demand wherever you get your podcasts. 0:09:36.320 --> 0:09:38.360 You know what we've been mentioning just more and more 0:09:38.400 --> 0:09:40.640 and more and more over the last several months, is 0:09:40.880 --> 0:09:44.600 artificial intelligence. The kids call it AI. It's on the 0:09:44.600 --> 0:09:49.360 tip of every CEO's tongue. Doesn't matter what business they're in, 0:09:50.040 --> 0:09:52.200 where they are they a tech company, a non ten company. 0:09:52.400 --> 0:09:55.120 Everybody's talking about it AI. I'm convinced it's just a 0:09:55.160 --> 0:09:58.720 gooster stock multiple but we'll see what how real this is? 0:09:59.160 --> 0:10:01.360 It is real. It's see how this scene plays out. 0:10:01.760 --> 0:10:03.760 Now, when you think about AI, you think about there's 0:10:03.760 --> 0:10:05.600 got to be an ETF for AI, right. 0:10:05.480 --> 0:10:06.640 I mean, there's an ETF for everything. 0:10:06.679 --> 0:10:07.640 There's an ETF for everything. 0:10:07.760 --> 0:10:10.080 We've got the folks who have one of these ETFs. 0:10:10.160 --> 0:10:13.640 Chris Natividad, he's a co founder in CIO and Art Amador, 0:10:13.920 --> 0:10:18.679 co founder and COO of Equbot. Equbot has it? Am 0:10:18.679 --> 0:10:21.040 I going right there? That's right equbot boom hit that? 0:10:22.160 --> 0:10:22.440 All right? 0:10:22.480 --> 0:10:24.760 So do you guys have an AI powered e t 0:10:24.960 --> 0:10:29.360 F A I e Q is the ticker art tell 0:10:29.440 --> 0:10:31.200 us about what's going on there? 0:10:31.679 --> 0:10:31.920 Yeah? 0:10:31.960 --> 0:10:32.560 Absolutely? 0:10:33.080 --> 0:10:36.040 So what we what we do with aiq's It leverages 0:10:36.080 --> 0:10:39.400 IBM Watson's natural language processing and we analyze millions of 0:10:39.480 --> 0:10:42.360 news articles, social media posts, all of this unstructured data, 0:10:42.800 --> 0:10:45.320 and then we marry it with traditional data things like 0:10:45.400 --> 0:10:50.880 financials macro oh sorry, financials macro data. In order to 0:10:51.000 --> 0:10:55.360 make predictions on different prices, AIQ analyzes about five thousand 0:10:55.480 --> 0:10:59.760 US companies and then invest in about one hundred and 0:10:59.760 --> 0:11:02.359 twenty five and fifty names that have the highest opportunity 0:11:02.360 --> 0:11:05.200 for appreciation based on those those market signals. 0:11:06.160 --> 0:11:08.160 So all right, so talk to us about a little 0:11:08.200 --> 0:11:10.679 bit about kind of what are some of the names 0:11:10.720 --> 0:11:14.000 you guys have in there, and kind of how do 0:11:14.000 --> 0:11:16.400 you screen to put names in there, because again, there 0:11:16.400 --> 0:11:19.400 seems to be so many people that are really looking 0:11:19.400 --> 0:11:19.599 at this. 0:11:19.720 --> 0:11:20.000 Chris. 0:11:20.360 --> 0:11:23.520 Yeah, So when we think about AI, it's pattern recognition 0:11:23.559 --> 0:11:25.400 and that's what our system's doing. And some of the 0:11:25.400 --> 0:11:27.600 top names that we actually see are are AI related. 0:11:27.720 --> 0:11:28.520 So names like. 0:11:28.600 --> 0:11:33.120 Pollunteer and Google. I mean, these are are heavily referenced 0:11:33.120 --> 0:11:36.680 in a lot of the unstructured data that aren't mentioned. 0:11:36.720 --> 0:11:39.280 And when we think about it, you know, do we 0:11:39.280 --> 0:11:41.200 think there are going to be more instances of folks 0:11:41.240 --> 0:11:43.840 coming on social media and talking about companies and moving 0:11:43.840 --> 0:11:46.240 stock prices more in the future or less? And I 0:11:46.240 --> 0:11:47.760 definitely think it's pointing to that more. 0:11:48.000 --> 0:11:48.680 I think you're right. 0:11:48.840 --> 0:11:50.800 I just want to read a red headline just coming 0:11:50.800 --> 0:11:54.480 across the tape. Equity Residential founder and chairman Samuel Zell 0:11:55.080 --> 0:11:56.200 he dies at age eighty one. 0:11:56.200 --> 0:11:57.679 Will at more reporting on that coming up. 0:11:57.880 --> 0:12:00.559 Yeah, it's a pretty significant story. Of course, when we're 0:12:00.559 --> 0:12:05.040 talking about his group, the equity Office I believe purchased 0:12:05.040 --> 0:12:07.760 by Blackstone right about Yeah, I'm not. 0:12:07.720 --> 0:12:10.520 Sure if I know Samzell has been mister real estate, 0:12:10.559 --> 0:12:11.080 mister Reed. 0:12:11.360 --> 0:12:12.600 Yeah, absolutely decades. 0:12:12.640 --> 0:12:14.960 We're going to get Shanlie bassek in here asapt to 0:12:15.000 --> 0:12:17.440 cover that. But let's stick with the AI story for now. 0:12:18.360 --> 0:12:21.240 Let's start with the idea of whether or not AI 0:12:21.320 --> 0:12:25.240 is actually overpriced. It feels like the majority of the 0:12:25.280 --> 0:12:27.840 games in the last few months or so, especially in 0:12:27.840 --> 0:12:30.720 the tech market, have come from this AI mentioned as 0:12:30.960 --> 0:12:33.079 Paul said, is there any concern that this is kind 0:12:33.080 --> 0:12:34.440 of the end of it, this is peak AI? 0:12:35.280 --> 0:12:38.200 Absolutely not. And what just came out a few minutes 0:12:38.240 --> 0:12:41.240 ago is Goldman talking about the potential of AI rallying 0:12:41.320 --> 0:12:44.320 equity markets thirty percent the coming year. This morning we 0:12:44.400 --> 0:12:47.800 hear about news coming from the US government about putting 0:12:47.800 --> 0:12:51.200 in AI regulatory bodies, right, and so what we see 0:12:51.200 --> 0:12:53.280 from the data is that there's an AI arms race. 0:12:53.400 --> 0:12:58.280 You know, people the big players, Apples, the Googles, IBM, 0:12:58.360 --> 0:13:01.160 all of these large tech companies are investing in AIS. 0:13:01.200 --> 0:13:03.920 So there's going to be more data. It's coming and 0:13:03.960 --> 0:13:06.120 come quicker, and it's going to help us have the 0:13:06.120 --> 0:13:09.040 opportunity to really grow our businesses and what we do 0:13:09.080 --> 0:13:10.040 in our daily lives. 0:13:10.520 --> 0:13:12.800 So I found out. I was wondering about these two guys. 0:13:12.880 --> 0:13:13.680 Now I figured it out. 0:13:14.200 --> 0:13:15.679 They both got NBA from Berkeley. 0:13:16.559 --> 0:13:20.719 I mean, some smart dudes at Berkeley Outstanding School. So 0:13:21.320 --> 0:13:23.400 talk to us about like kind of what you think 0:13:23.520 --> 0:13:25.960 the future of AI is, and maybe let let's start 0:13:25.960 --> 0:13:29.400 with generative AI. Can you explain what generative AI is 0:13:29.440 --> 0:13:32.280 because I think that's when I think of A, that's 0:13:32.360 --> 0:13:34.520 what I think is really really AI. 0:13:36.360 --> 0:13:39.840 Yeah, so generative AI is is all the all the 0:13:39.880 --> 0:13:41.800 hot rage right now on our partner. I've being with 0:13:41.840 --> 0:13:45.520 Watson actually just came out with just just came out 0:13:45.520 --> 0:13:49.960 with Watson X, which leverages generative AI, which is leveraging transformers. 0:13:50.000 --> 0:13:51.920 But the way that we think about generative AI is 0:13:51.960 --> 0:13:53.679 it helps put things in context. Right, So, if you're 0:13:53.760 --> 0:13:56.280 using chat GBT, you ask it a question, it gives 0:13:56.280 --> 0:13:58.440 you an answer, Then you ask it another question and 0:13:58.480 --> 0:14:02.240 it gets the context right of the of the previous 0:14:02.320 --> 0:14:05.559 the previous question, uh for the next answer right. 0:14:05.600 --> 0:14:07.679 So it really helps put context around things. 0:14:08.040 --> 0:14:10.480 And so when we think about how we're using how 0:14:10.480 --> 0:14:13.640 we're using it, we have something called a convolutional knowledge 0:14:13.679 --> 0:14:16.360 graph that helps combine structure and unstructured data and so 0:14:16.679 --> 0:14:19.840 when we analyze news article, social media posts, it's not 0:14:19.920 --> 0:14:22.120 just about the sentiment, it's about the intent, right, how 0:14:22.120 --> 0:14:25.600 things are connected. And so what generate AI is going 0:14:25.680 --> 0:14:27.560 to do is going to provide more context which could 0:14:27.640 --> 0:14:31.000 lead to better predictions, whether it's markets or whether you're 0:14:31.040 --> 0:14:33.760 applying it to whatever particular problem you're you're trying to attack. 0:14:34.720 --> 0:14:37.080 When you talk about so that's generative AI. It feels 0:14:37.080 --> 0:14:40.160 like AI falls into a lot of different types of 0:14:40.440 --> 0:14:42.960 of usable things. Paul, like I said, Paul says this 0:14:43.040 --> 0:14:45.960 every day he goes pets dot Com could be could 0:14:46.000 --> 0:14:46.440 be using AI. 0:14:46.480 --> 0:14:49.680 There's dog food companies that are using AI, but there 0:14:49.720 --> 0:14:52.560 are different types. Can you walk us through just kind 0:14:52.560 --> 0:14:53.800 of the other use cases for it? 0:14:54.960 --> 0:14:59.000 Yeah, so you think about image recognition, right, how you know, 0:14:59.160 --> 0:15:02.600 thinking about medical discovery and how it's impacting and positively 0:15:02.640 --> 0:15:06.880 helping folks live better, healthier lives. Right, helped us discover 0:15:07.080 --> 0:15:10.600 the vaccines and treatments related to COVID more recently. Right, 0:15:10.760 --> 0:15:12.840 it helped me out this past Mother's Day, what do 0:15:12.880 --> 0:15:14.000 I need to be buying my mother? 0:15:14.320 --> 0:15:14.520 Right? 0:15:14.560 --> 0:15:15.760 And you know there are. 0:15:15.720 --> 0:15:18.160 Other folks at all stages of life that AI can 0:15:18.200 --> 0:15:21.200 really help you put things in front of you that 0:15:21.240 --> 0:15:24.160 you're not thinking about pattern recognition. Again, when we see 0:15:24.480 --> 0:15:27.920 the evolution of the hardware right with quantum computing, we 0:15:28.000 --> 0:15:31.720 truly see some great opportunities. And especially as our e 0:15:31.800 --> 0:15:33.920 t fai e Q improves on some of the different 0:15:33.920 --> 0:15:36.240 forms of trade timing. I think the best days are 0:15:36.280 --> 0:15:39.000 still ahead for a lot of these different players in 0:15:39.040 --> 0:15:40.280 the AI investment space. 0:15:40.720 --> 0:15:43.720 Right talk to us about the actual ETF here, How 0:15:43.800 --> 0:15:46.840 much is in that fund, how did the launch go? 0:15:47.480 --> 0:15:48.640 How big you think it can get? 0:15:49.680 --> 0:15:53.760 Yeah, so the opportunities tremendous. So AIQ was the first 0:15:53.800 --> 0:15:55.920 AI powered exchange trade or fund. It was the first 0:15:55.920 --> 0:15:58.680 time anyone was willing to kind of publicly put in 0:15:58.920 --> 0:16:01.480 you know, AI algram out there in the in the marketplace. 0:16:01.960 --> 0:16:04.080 And as of today, it's about one hundred million dollars 0:16:04.480 --> 0:16:09.240 in assets. But we have different indices out there that 0:16:09.280 --> 0:16:13.360 are being leveraged in banking products and insurance products, and 0:16:13.480 --> 0:16:16.760 in total, Equbot's got about five billion dollars in tracking 0:16:17.600 --> 0:16:21.960 AI indices and strategies, and so we think ai EQ 0:16:22.200 --> 0:16:25.160 could easily be over over a billion dollars and be 0:16:25.200 --> 0:16:27.200 one of the marquye AI funds and I think right now, 0:16:27.200 --> 0:16:29.080 I think it is the largest AI fund. 0:16:29.320 --> 0:16:31.760 Hey, Christy, I see like you know Palenteer, I'm sure 0:16:31.880 --> 0:16:34.520 looking at your top ten holdings, Palenteer, cloud Fair, dat Data, Dog, 0:16:34.680 --> 0:16:38.520 I get all that stuff, McKesson and Albemarle, you know 0:16:38.600 --> 0:16:41.920 kind of there's a healthcare company, a chemicals company. Why 0:16:41.920 --> 0:16:43.640 are they in that in your ETA? 0:16:43.720 --> 0:16:46.800 Yeah, you think about AI. It's pattern recognition, right. You 0:16:46.800 --> 0:16:49.040 think about some of the different things that can impact 0:16:49.080 --> 0:16:52.720 a stock price, the unstructured data about that our released 0:16:52.760 --> 0:16:55.960 from from news reports, syndicate research. You think about some 0:16:56.000 --> 0:16:58.080 of the technicals we may not be looking at, you know, 0:16:58.560 --> 0:17:01.400 the stochastics and mac and how are these impacting different 0:17:01.440 --> 0:17:03.360 stock prices? That The thing I'm trying to get to 0:17:03.520 --> 0:17:07.439 is different data points drive different stocks, right, And so 0:17:07.800 --> 0:17:11.440 having a neural network helping you supercharge your investment portfolio 0:17:11.520 --> 0:17:15.639 and understand and look at the data unbiased because quite honestly, 0:17:15.680 --> 0:17:17.439 us humans have a lot of different bias when we 0:17:17.520 --> 0:17:21.200 invest and select these stocks. Saying, hey, if I'm looking 0:17:21.240 --> 0:17:24.639 at all this data, which are the highest companies that 0:17:24.680 --> 0:17:26.760 are going to have that highest chance of market appreciation? 0:17:27.040 --> 0:17:29.080 And that's what it excites us. Again, we see the 0:17:29.119 --> 0:17:33.399 investment companies improving, the algorithms themselves improving, and so we 0:17:33.440 --> 0:17:35.680 still feel the fund's best days are still ahead. 0:17:35.760 --> 0:17:39.080 But album moral, for example, we don't have about a 0:17:39.080 --> 0:17:41.600 minute left. It's a lithium company, isn't it, or like 0:17:41.600 --> 0:17:44.520 a lithium mining company. From a fundamental perspective, how does 0:17:44.560 --> 0:17:46.679 that flow into the AI story or is this purely 0:17:46.720 --> 0:17:47.520 stock performance? 0:17:47.960 --> 0:17:51.280 Now again, fundamentals are just a single component, and those 0:17:51.320 --> 0:17:53.520 are just data points. You need to think about all 0:17:53.560 --> 0:17:56.159 of these structured data that you're talking about, all the 0:17:56.200 --> 0:17:59.240 different namonics that we're using on Bloomberg, but the unstructured 0:17:59.320 --> 0:18:02.000 data as well, and so you know that's really the 0:18:02.040 --> 0:18:04.400 opportunity how to look at it in aggregate. 0:18:04.800 --> 0:18:08.640 All right, that's extraordinarily interesting because I've been talking everybody's 0:18:08.680 --> 0:18:10.320 been talking about it AI pretty I mean, it's not 0:18:10.400 --> 0:18:14.159 just us, but everybody's talking about AI. Everybody's talking about ETFs. 0:18:14.359 --> 0:18:17.520 So why not have an AI E t F and these. 0:18:17.520 --> 0:18:19.880 Marriage of them both exactly what Katie Grafeld. 0:18:20.080 --> 0:18:21.560 Exactly exactly right? All right. 0:18:22.040 --> 0:18:26.240 Artm Amador COO and co founder of Qubot and Chris Natividad, 0:18:26.680 --> 0:18:28.840 cio of e Equalbot they joining us both here in 0:18:28.880 --> 0:18:30.320 a Bloomberg Interactive Broker studio. 0:18:30.359 --> 0:18:33.879 We appreciate that talking about AI e Q. 0:18:34.560 --> 0:18:37.679 You're listening to the tape Cat's are live program Bloomberg 0:18:37.720 --> 0:18:41.320 Markets weekdays at ten am Eastern on Bloomberg Radio, the 0:18:41.400 --> 0:18:44.600 tune in app, Bloomberg dot Com, and the Bloomberg Business App. 0:18:44.640 --> 0:18:47.480 You can also listen live on Amazon Alexa from our 0:18:47.480 --> 0:18:52.520 flagship New York station, Just Say Alexa play Bloomberg eleven thirty. 0:19:14.200 --> 0:19:16.919 The news that just broke was really interesting, particularly for 0:19:16.960 --> 0:19:19.520 folks that you know, play a lot in the real 0:19:19.600 --> 0:19:23.919 estate business. Think about the real estate investment trust business. 0:19:23.960 --> 0:19:26.439 Sam Zel passed away at the age of eighty one. 0:19:26.520 --> 0:19:29.320 Shelley Basic joints us here she covers all things Wall Street. 0:19:29.920 --> 0:19:31.960 Chanelie, what's your sense here? 0:19:32.240 --> 0:19:35.399 Sam Zel again, just a giant in the real estate business, 0:19:35.400 --> 0:19:38.600 in the investment business, in global finance business, A big. 0:19:38.480 --> 0:19:42.000 Name, certainly a shock to anybody who knew him. I'm 0:19:42.080 --> 0:19:45.720 messaging with some folks in the investment community now, and 0:19:46.440 --> 0:19:48.440 it's just very sad news. He was only really eighty 0:19:48.480 --> 0:19:52.120 one years old and very much was you know, very 0:19:52.200 --> 0:19:54.919 active very recently. I mean, we've had him pretty recently 0:19:54.960 --> 0:19:58.359 on Bloomberg television as well. Remember, yes, why is he 0:19:58.480 --> 0:20:02.800 so well known? He book a residential you know, real 0:20:02.920 --> 0:20:07.840 estate company public and that was really kind of a 0:20:07.880 --> 0:20:11.000 novel thing when it was happening. I remember he had 0:20:11.040 --> 0:20:13.560 been the founder and chairman of Equity Residential. That's a 0:20:13.600 --> 0:20:17.520 ticker EQR. He was founder and chairman. And so really 0:20:17.680 --> 0:20:20.040