WEBVTT - US & Iran Wrangle Over Deal Terms to End War 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.360 --> 0:00:29.840 So honored Ted Wade Lee with us here in an 0:00:29.960 --> 0:00:30.600 historic week. 0:00:30.720 --> 0:00:32.680 Always in diplomacy. 0:00:32.760 --> 0:00:34.839 She is a black rock and a wonderful think of 0:00:34.880 --> 0:00:40.360 their chief investment strategist Wally. This is not Nixon to China. 0:00:40.760 --> 0:00:43.800 This is not Henry Kissinger's secretly hanging out of the 0:00:43.800 --> 0:00:47.760 Piece hotel in Shanghai to get things started. If this 0:00:47.800 --> 0:00:50.920 is not Nixon to China, what is this visit? 0:00:52.840 --> 0:00:57.560 Well, the summit points to a push to preserve near 0:00:57.640 --> 0:01:03.040 to stability. There are incentive on both sides to manage 0:01:03.360 --> 0:01:08.560 tension given the deep supply disruption in the Middle East 0:01:08.600 --> 0:01:12.880 and also the interconnectedness in global trade right and of 0:01:12.920 --> 0:01:18.040 course technology remains at the center of the strategic competition. 0:01:18.760 --> 0:01:22.440 You know, with what's happening in the China AI models. 0:01:22.480 --> 0:01:25.880 They are catching up in terms of performance of those 0:01:25.880 --> 0:01:28.959 in the US, and they are also competing on cost 0:01:29.319 --> 0:01:33.800 and efficiency. The energy system, power system in China is 0:01:33.959 --> 0:01:37.920 large and less constraint, so lots going on, and I 0:01:37.959 --> 0:01:42.360 think some of that is reflected in markets as well well. 0:01:42.440 --> 0:01:44.440 Ye, we just had the S and P just have 0:01:44.520 --> 0:01:49.200 its best April Vois twenty twenty, and the backdrop is 0:01:49.280 --> 0:01:51.840 kind of strong earnings here. What do you make of 0:01:51.920 --> 0:01:57.120 this market, this earning cycle we're seeing and these valuations. 0:01:57.360 --> 0:02:02.160 Well, valuations look more attractive compared to this time last 0:02:02.240 --> 0:02:05.080 year because of the very strong earnings that have been 0:02:05.480 --> 0:02:08.840 coming through. And I would say that the backdrop is 0:02:08.880 --> 0:02:12.000 a is an interesting backdrop, right, because the strait of 0:02:12.040 --> 0:02:17.040 Hormus is still closed in terms of the accrude damage. 0:02:17.040 --> 0:02:21.480 We're talking about zero point five to global GDP this 0:02:21.600 --> 0:02:25.440 year and pushing up inflation higher as well. That also 0:02:25.520 --> 0:02:28.160 have been pushing up rates. But when it comes to 0:02:29.440 --> 0:02:32.639 valuing risk assets, it's a discounting. 0:02:32.080 --> 0:02:32.919 Future cash flow. 0:02:33.000 --> 0:02:36.440 So even though R is going higher, if g is 0:02:36.480 --> 0:02:40.200 going faster and higher, still we can still have a 0:02:40.600 --> 0:02:43.079 rosy market, which is what we have had so far. 0:02:43.240 --> 0:02:47.040 But it's very concentrated up until now. In tech, right 0:02:47.080 --> 0:02:50.519 you look at attach those large type earnings in terms 0:02:50.560 --> 0:02:54.640 of delivery for this quarter, it's tracking three times higher 0:02:54.760 --> 0:02:57.720 versus expectation at the beginning of the quarter. So the 0:02:57.760 --> 0:03:02.280 AI theme is off setting, in fact more than offsetting 0:03:02.320 --> 0:03:05.280 in risk market the disruption from the Middle East. 0:03:05.560 --> 0:03:08.080 So we did have wayley it's certainly in the US 0:03:08.120 --> 0:03:11.120 broader market. It's kind of a rotation late last year 0:03:11.320 --> 0:03:13.520 maybe out of some of those tech names into some 0:03:13.560 --> 0:03:14.919 more evaluation. 0:03:15.919 --> 0:03:16.359 Areas. 0:03:16.400 --> 0:03:18.959 Small and mid cap stocks even had some good performance. 0:03:19.080 --> 0:03:21.560 Was that just a short term trade and now we're 0:03:21.560 --> 0:03:23.800 back to kind of where we've been for many years, 0:03:23.840 --> 0:03:27.200 which is a tech driven, AI driven marketplace. 0:03:28.560 --> 0:03:30.640 Well, we saw a bit of rotation, and I think 0:03:30.919 --> 0:03:35.440 that came also of the back of worries about the 0:03:35.800 --> 0:03:40.040 unprecedented kopex spent. If you look at the speed of 0:03:40.240 --> 0:03:45.120 copex spent by these hyperscalers word tracking actually even faster 0:03:45.240 --> 0:03:48.320 than Industrial Revolution, right, so you look at the contribution 0:03:48.440 --> 0:03:51.480 of AI related spent to GDP, I mean, it's all 0:03:52.000 --> 0:03:55.880 AI right now for Q one, So they would worry 0:03:56.200 --> 0:04:00.240 about the regional investments for this kopex spent, which is 0:04:00.280 --> 0:04:04.320 why tech was taking a back seat and underperforming and 0:04:04.360 --> 0:04:06.280 the rest of the market were catching up. But if 0:04:06.320 --> 0:04:08.720 you look at kind of revenue ramp I'm not just 0:04:08.800 --> 0:04:12.880 talking about the earnings of big tech companies that have reported, 0:04:12.920 --> 0:04:15.920 but also the model builders. You look at Anthropic, they're 0:04:16.760 --> 0:04:19.160 arr revenue ramp at the end of last year was 0:04:19.240 --> 0:04:23.159 nine billion, and you know in March got to thirty 0:04:23.160 --> 0:04:26.920 billion dollars a year and now tracking forty two forty 0:04:26.920 --> 0:04:27.960 four billion. 0:04:27.680 --> 0:04:28.360 Dollars a year. 0:04:28.400 --> 0:04:33.039 So this speed of revenue ramp is also unprecedented one hundred. 0:04:33.040 --> 0:04:35.040 That's that's why I'm feeling a bit more comfortable. 0:04:35.480 --> 0:04:40.640 Really, you're prodigious mathematics and also a sense of history. 0:04:41.040 --> 0:04:45.279 Do you have an analog to this tech dominant moment? 0:04:45.400 --> 0:04:48.360 We're all living in the halves of tech and the 0:04:48.520 --> 0:04:52.479 have nots. Is there a wayly analog besides maybe you 0:04:52.560 --> 0:04:55.479 brush against ninety ninety two thousand and one, or do 0:04:55.520 --> 0:04:56.320 you go back further? 0:04:57.760 --> 0:05:00.000 I would say that this is not quite ninety nine 0:05:00.120 --> 0:05:04.080 in two thousand, because the revenues are coming through and 0:05:04.200 --> 0:05:08.400 earnings are coming through. Evaluations are not as stretched as 0:05:08.480 --> 0:05:11.520 things were looking back then. And I would also say 0:05:11.520 --> 0:05:15.680 that if history is anything to go by, it would 0:05:15.680 --> 0:05:20.520 be too early to call who are the automate winners 0:05:20.800 --> 0:05:24.839 versus the automate losers of the AI transformation. In fact, 0:05:24.920 --> 0:05:27.800 the winners and losers may not even be in public 0:05:28.400 --> 0:05:31.919 market just ye it right. And I say that because 0:05:31.960 --> 0:05:34.520 if you think about kind of the application of AI 0:05:34.960 --> 0:05:38.320 in other sectors, I think it's still unclear if it 0:05:38.440 --> 0:05:42.119 is the provider of compute and model on the one hand, 0:05:42.279 --> 0:05:44.479 that are going to win, or if it is the 0:05:44.560 --> 0:05:48.880 provider of data IP and patterns that are going to win. 0:05:49.000 --> 0:05:51.640 So it's still too early to say, even though market 0:05:51.800 --> 0:05:53.599 narratives swing wildly, as you know. 0:05:53.839 --> 0:05:55.599 Really, thank you for the brief for the black Rock 0:05:55.640 --> 0:05:59.720 this morning. Greatly, greatly appreciate that. Stay with us. More 0:05:59.800 --> 0:06:02.720 from Bloomberg Surveillance coming up after this. 0:06:10.000 --> 0:06:13.560 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:06:13.640 --> 0:06:16.760 weekday afternoons from seven to ten am Eastern Listen on 0:06:16.880 --> 0:06:20.279 Apple Karplay and Android Otto with the Bloomberg Business app, 0:06:20.440 --> 0:06:21.800 or watch us live on. 0:06:21.720 --> 0:06:23.240 YouTube in studio. 0:06:23.360 --> 0:06:27.400 Today, one of our leaders in thinking about the messes 0:06:27.600 --> 0:06:30.599 we are in Leslie vin Ja Murray, joins as President's 0:06:30.600 --> 0:06:34.080 CEO of Chicago Council on Global Affairs. 0:06:34.600 --> 0:06:36.760 You wrote an intelligent. 0:06:36.200 --> 0:06:40.600 Blurb for a book that is absolutely spectacular. Iran's Grand 0:06:40.680 --> 0:06:43.360 Strategy Valley Nasa. You're going to hear a lot about 0:06:43.400 --> 0:06:46.560 this book from me, folks. Iiken Green's book on currencies, 0:06:46.600 --> 0:06:48.880 my book of the summer, but Vali NASA's book is 0:06:49.400 --> 0:06:52.120 outstanding as well. What's the number one thing in that 0:06:52.279 --> 0:06:55.320 book that we misunderstand about Iran? 0:06:55.520 --> 0:06:58.080 I mean, I think that you know, the eyes on 0:06:58.160 --> 0:06:59.960 the prize is that you know, you've got to kind 0:07:00.040 --> 0:07:03.520 true that's thinking very strategically about its future. And I 0:07:03.520 --> 0:07:05.120 think this is you know, if you if you look 0:07:05.120 --> 0:07:08.839 at Valley Nassar's analysis of the of the current conflict, 0:07:09.000 --> 0:07:12.200 you know, it's very clear Iran's got its eyes on 0:07:12.200 --> 0:07:16.440 the prize. It's in a winning position, It's used its 0:07:16.560 --> 0:07:20.320 leverage very effectively. What we thought was very asymmetric has 0:07:20.360 --> 0:07:25.160 turned to feel less asymmetric than you might think. And 0:07:25.320 --> 0:07:27.920 we're seeing that. And you know, as those as President 0:07:27.920 --> 0:07:30.440 Trump sort of throws up his hands and says that 0:07:30.800 --> 0:07:32.520 the deal's not good enough or he doesn't like what 0:07:32.560 --> 0:07:37.480 they what they wish to have, Iran looking unfortunately quite powerful, 0:07:37.560 --> 0:07:40.920 and the US, as President Trump goes to China looking 0:07:41.160 --> 0:07:42.239 not very strong. 0:07:42.960 --> 0:07:45.880 What do you think the best the US can get 0:07:45.880 --> 0:07:49.280 out of any type of negotiated piece with Iran is 0:07:49.280 --> 0:07:51.040 at this point. 0:07:51.240 --> 0:07:53.760 You know, I think that the real concern is that 0:07:53.760 --> 0:07:56.840 that's straight, that leverage that Iran has is going to 0:07:56.920 --> 0:08:02.760 continue to hover over President Trump's head over all of US. 0:08:04.000 --> 0:08:07.520 I guess the best deal would be to, you know, 0:08:07.920 --> 0:08:10.160 sort of maybe not have a deal, but to get 0:08:10.200 --> 0:08:13.920 some sort of ongoing cease fire and some sort of 0:08:14.040 --> 0:08:17.200 opening of that straight. Kick the can down the road 0:08:17.760 --> 0:08:21.680 on negotiating a deal when it comes to the nuclear issue, 0:08:21.680 --> 0:08:25.400 because that's not going to be resolved anytime soon. But 0:08:25.520 --> 0:08:28.360 if you know, if he could perhaps offer to lip 0:08:28.520 --> 0:08:33.600 some sanctions tough thing to do, unblock some assets for 0:08:33.760 --> 0:08:38.320 in exchange for a deal in which you know this 0:08:38.559 --> 0:08:42.000 UK French led proposal to help open the straight, keep 0:08:42.040 --> 0:08:45.000 the straight open. You know, I think for the US 0:08:45.120 --> 0:08:49.600 president the number one thing is really the straight, not 0:08:50.080 --> 0:08:52.120 the nuclear issue, which you know, let's be fair, it 0:08:52.120 --> 0:08:55.040 hadn't been a big issue in reality leading up was open. 0:08:56.200 --> 0:08:59.800 The straight was open ten weeks ago. Decades it has 0:09:00.160 --> 0:09:03.200 now the game has fundamentally changed in the straight of Hormus. 0:09:03.440 --> 0:09:05.920 Can can I ask a dumb question. We put a 0:09:05.960 --> 0:09:09.400 man on the moon, why are we having trouble with this. 0:09:09.559 --> 0:09:11.719 What is the where we have an adversaries? 0:09:12.000 --> 0:09:12.400 What is it? 0:09:12.480 --> 0:09:14.040 I mean, I feel like Robert D. Kaplan. 0:09:14.080 --> 0:09:21.200 What's the geographical constraint for us applying what we need 0:09:21.200 --> 0:09:24.320 to do to open the straight other than our will? 0:09:24.960 --> 0:09:29.640 Yeah, look, they're there, We're very far away. It's a 0:09:29.800 --> 0:09:33.280 tiny little passage way. They have all the will in 0:09:33.320 --> 0:09:35.760 the world. It's their one source of leverage. 0:09:35.960 --> 0:09:37.000 Didn't we know this? 0:09:37.600 --> 0:09:40.880 Of course we did. Our foreign policy experts have gamed 0:09:40.880 --> 0:09:43.520 this out for a very long time. They were very 0:09:43.600 --> 0:09:47.680 well aware that this was the scenario to be aware of. 0:09:48.720 --> 0:09:52.720 And this US administration has simply not been taking that advice. 0:09:52.800 --> 0:09:55.199 It hasn't been thinking through I think President Trump, I 0:09:55.240 --> 0:09:57.000 mean we know this by now, he thought. 0:09:56.760 --> 0:10:00.079 He could go in. He could you remove the to 0:10:00.160 --> 0:10:00.680 your ships. 0:10:01.120 --> 0:10:03.200 You could create then, you know, the US and to 0:10:03.240 --> 0:10:06.080 be fair and Israel thought they could create the conditions 0:10:06.760 --> 0:10:08.920 that would allow the people of Iran to rise up. 0:10:08.960 --> 0:10:12.960 Clearly a very shallow analysis of this regime. And it's 0:10:14.000 --> 0:10:17.120 you know, it's its embeddedness across the entirety of the country. 0:10:18.000 --> 0:10:20.600 You just have relocated from London. Give us just a 0:10:20.640 --> 0:10:23.280 sense of how our and I can use air quotes here. 0:10:23.360 --> 0:10:28.000 Our allies are traditional allies view the US now simply 0:10:28.000 --> 0:10:30.440 in the context of this Iran venture here. 0:10:30.760 --> 0:10:32.440 I mean, we know it's not good, but you know, 0:10:32.480 --> 0:10:36.240 you can you can separate it out right. Obviously, British 0:10:36.280 --> 0:10:39.920 and European elites are struggling to engage and try to 0:10:39.960 --> 0:10:42.800 diversify away from their dependents on the US because they're 0:10:43.520 --> 0:10:47.880 i think so ongoing shock but realization that the US 0:10:48.000 --> 0:10:50.320 under this leadership and even going forward, isn't coming back. 0:10:50.640 --> 0:10:51.560 But look at the people. 0:10:51.679 --> 0:10:55.120 Sixty eight percent of Brits pold last month thought that 0:10:55.200 --> 0:10:59.200 the US was, you know, doing doing nothing good for 0:10:59.280 --> 0:11:01.800 the world. To put it in a nutshell, you go pulling. 0:11:02.120 --> 0:11:04.560 I mean that's extraordinarily high. It was up eleven percent 0:11:04.720 --> 0:11:08.800 month from the month previously. So our soft power, our 0:11:08.840 --> 0:11:13.840 public diplomacy. But the elites, right, the foreign policy elites 0:11:13.920 --> 0:11:17.760 and leaders in our allied countries in Europe are really 0:11:17.800 --> 0:11:19.880 trying to find ways to not have to work with 0:11:19.960 --> 0:11:21.559 US and to not be dependent on us. But what 0:11:21.880 --> 0:11:23.679 they are doing, they're meeting today the UK and the 0:11:23.720 --> 0:11:26.280 French and forty other nations to try and come up 0:11:26.280 --> 0:11:28.520 with a proposal so that if there is a deal, 0:11:29.360 --> 0:11:32.960 they can enforce, help to enforce, you know, and and 0:11:33.120 --> 0:11:35.320 ensure an opening of that straight So that is you know, 0:11:35.360 --> 0:11:35.760 that's a win. 0:11:36.080 --> 0:11:36.920 If it happens, it's going. 0:11:36.880 --> 0:11:39.160 To be very spending Leslie Vnja Murray. 0:11:39.160 --> 0:11:42.200 Where this is Chicago Council and Global Affairs with all 0:11:42.240 --> 0:11:44.240 our work in England, I have to ask, I've been 0:11:44.320 --> 0:11:46.719 bringing this up just to get our guests to get 0:11:46.960 --> 0:11:48.000 the room ras. 0:11:47.760 --> 0:11:49.800 S up as well. Are we going to have Prime 0:11:49.840 --> 0:11:50.920 Minister Farage? 0:11:51.480 --> 0:11:54.000 I mean, look, it was not it's not been a 0:11:54.000 --> 0:11:56.360 good few days for the Labor Party. Cure Starmer is 0:11:56.440 --> 0:11:56.719 you know. 0:11:57.040 --> 0:11:59.840 Should thread and should step aside. 0:12:00.120 --> 0:12:03.200 Politics is never about a single choice. It's always about 0:12:03.240 --> 0:12:05.559 an alternative. And this is the main reason that he's 0:12:05.600 --> 0:12:08.120 still there, that that you know, there hasn't been an 0:12:08.120 --> 0:12:11.160 effective leadership challenge yet you know, wait and see what 0:12:11.200 --> 0:12:14.400 happens today and tomorrow. Is that there's there's not a 0:12:14.440 --> 0:12:17.079 clear alternative. Andy Burnham's not got to you know, people 0:12:17.120 --> 0:12:22.040 talk about him. He's not got a seat in Parliament. No, 0:12:22.679 --> 0:12:24.840 and folks don't want to see you know, they don't 0:12:24.840 --> 0:12:27.760 want to seeatives. 0:12:27.800 --> 0:12:30.040 So you didn't answer. This is a typical. 0:12:33.400 --> 0:12:36.840 I don't think so. And remember the general elections in 0:12:36.880 --> 0:12:38.920 the UK are still several years out. This is not 0:12:38.960 --> 0:12:41.400 a short term thing. And you know, you know the 0:12:41.400 --> 0:12:44.119 phrase Tom a week is a long time in politics. 0:12:45.440 --> 0:12:47.600 The question is how long we're going to have Stormer? 0:12:47.679 --> 0:12:50.880 I don't think this Prime Minister sadly gets you know, 0:12:51.000 --> 0:12:53.920 stays in position very much longer. And what does the 0:12:53.960 --> 0:12:54.600 next person do? 0:12:54.720 --> 0:12:55.000 Can they? 0:12:55.040 --> 0:12:57.480 Can they meet the challenge of you know that what 0:12:57.520 --> 0:13:00.120 we saw in the local elections were you know, we're 0:13:00.160 --> 0:13:03.360 not happy people going for the Lib Dems, but especially 0:13:03.400 --> 0:13:06.040 going for Reform and the Green Party. We're not happy, 0:13:06.040 --> 0:13:09.040 but we didn't see a consolidated opposition. 0:13:09.240 --> 0:13:13.400 What's it like is a brit out of Wesleyan University caecut? 0:13:13.640 --> 0:13:15.520 I am, by the way, until citizen now. 0:13:16.000 --> 0:13:18.040 Very dubul Okay, what is it like? 0:13:18.120 --> 0:13:22.520 As Paul mentioned earlier, parachuting into Chicago, White Sox are Cubs. 0:13:23.120 --> 0:13:26.720 Look, you never choose my daughter's white Sox. You know 0:13:27.160 --> 0:13:29.679 my first game was white Sox versus Cubs. The Pope 0:13:29.760 --> 0:13:32.120 is white Sox, and I love the Pope to speak 0:13:32.480 --> 0:13:34.840 at the Chicago Council. But I'll tell you Tom, the 0:13:35.040 --> 0:13:40.800 fascinating thing about Chicago. World class economists and elected representatives, 0:13:41.200 --> 0:13:45.560 deeply concerned about the stability of our international trade order, 0:13:45.679 --> 0:13:49.560 about these tariffs now the bread basket of the world, 0:13:49.679 --> 0:13:52.800 deeply concerned about the impact of the closure of the 0:13:52.880 --> 0:13:56.880 Strait on food, on fertilizer prices, and so, you know, 0:13:57.120 --> 0:14:00.400 many things to watch, but we're all watching US and China. 0:14:00.520 --> 0:14:04.280 This meeting coming up, and whether you know President Trump's 0:14:04.720 --> 0:14:08.000 efforts to lean on g will do anything to get 0:14:08.040 --> 0:14:08.560 that straight. 0:14:08.800 --> 0:14:10.800 Did she did she answer a question? 0:14:12.760 --> 0:14:13.960 Never answer a question. 0:14:14.240 --> 0:14:19.520 The Chicago Council is independent and partisan, you know, sport based. 0:14:19.600 --> 0:14:21.000 So never take a sign and. 0:14:21.240 --> 0:14:22.480 One of these to see you in the studio. 0:14:22.600 --> 0:14:27.920 Leslie Vengerburi or President's CEO at Chicago Council of Global Affairs. 0:14:28.480 --> 0:14:29.200 Stay with us. 0:14:29.440 --> 0:14:32.680 More from Bloomberg Surveillance coming up after this. 0:14:39.920 --> 0:14:43.480 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:14:43.560 --> 0:14:46.720 weekday afternoons from seven to ten am Eastern Listen on 0:14:46.800 --> 0:14:50.480 Applecarplay and Android Otto with the Bloomberg Business app, or 0:14:50.600 --> 0:14:52.200 watch us live on YouTube. 0:14:52.320 --> 0:14:54.840 He's a Pinata on Wall Street. He's also been right. 0:14:54.920 --> 0:14:57.600 Dan Ives joins US Global head of tech research at 0:14:57.640 --> 0:15:01.600 Webbush Securities. Daniel, I lifted your call on Apple. I 0:15:01.600 --> 0:15:03.960 believe it was on Friday. I saw that tweet as 0:15:04.080 --> 0:15:05.520 you listed it went through compliance. 0:15:05.560 --> 0:15:06.239 The tweet. 0:15:07.600 --> 0:15:13.640 Is well state to us how the persistency has developed 0:15:14.280 --> 0:15:18.120 at Apple, the persistency of cash flow that allows for 0:15:18.200 --> 0:15:22.680 share buybacks. Where in their machinery does that come from. 0:15:23.840 --> 0:15:26.560 I mean, look, to some extent, I don't think there's 0:15:26.640 --> 0:15:29.560 been a tech company, or maybe a company in the 0:15:29.600 --> 0:15:32.000 world that's don a better job from a cask flow 0:15:32.840 --> 0:15:37.600 capito allocation perspective than Apple. Now you know, if you 0:15:37.640 --> 0:15:40.400 look at it, I think the criticism would be cap 0:15:40.440 --> 0:15:43.520 backs and what they've done from an AI perspective. And 0:15:43.600 --> 0:15:46.800 tom My whole point is they are now going to 0:15:46.840 --> 0:15:51.560 be in the winner circle when it comes to ascension, monetizing, 0:15:51.600 --> 0:15:55.880 the consumer AI revolution that all starts to WWDC when 0:15:55.880 --> 0:15:57.080 they unvol their strategy. 0:15:57.320 --> 0:15:59.800 Okay, they're going to unveil their strategy, but everything sudden. 0:16:00.400 --> 0:16:03.920 It's our strategy is to avoid the capex build up 0:16:04.720 --> 0:16:08.840 that we've seen in AI. How smart are they that 0:16:08.880 --> 0:16:13.160 they're not forced to do a euro Canadian yen debt 0:16:13.280 --> 0:16:14.600 issuance like Google. 0:16:16.360 --> 0:16:18.840 Look they're so because right now they're in a position 0:16:18.880 --> 0:16:21.920 of strength, and I think when you look at Turnus 0:16:22.520 --> 0:16:25.760 now as CEO, I think the big focus is going 0:16:25.800 --> 0:16:28.560 to be doubling down services, but it's going to be 0:16:28.600 --> 0:16:32.320 about unleashing the AI strategy because it's my view, it's 0:16:32.360 --> 0:16:35.880 a trillion dollars of incremental value when it's all said done, 0:16:35.920 --> 0:16:37.720 seventy five hundred dollars per share. 0:16:38.400 --> 0:16:40.640 As they mindize AI, that. 0:16:40.560 --> 0:16:45.240 Could be fifteen billion per year annually services and it 0:16:45.400 --> 0:16:48.640 starts off what's going to be probably an AI enabled 0:16:48.680 --> 0:16:50.320 phone as we go into next year or two. 0:16:51.840 --> 0:16:53.520 Dan, I think I'm like the rest of the market. 0:16:53.640 --> 0:16:56.320 I don't know what Apple's AI strategy is. What do 0:16:56.360 --> 0:16:56.960 you think it is? 0:16:58.120 --> 0:17:00.440 I mean, Paul, in my view, and you have one 0:17:00.480 --> 0:17:04.879 point five billion iPhones and two point five billion iOS devices. 0:17:04.920 --> 0:17:09.760 It's now laying out what essentially will be a subscription service. 0:17:09.800 --> 0:17:11.800 I mean, you're going to be able to have models. 0:17:11.920 --> 0:17:15.520 Gemini will be the first one that they'll talk about WWDC, 0:17:16.040 --> 0:17:20.000 You'll have Claude, You'll have you know, Chat, GPT. It's 0:17:20.040 --> 0:17:23.479 going to really become the foundation for consumers. You'll have 0:17:23.560 --> 0:17:26.440 the models in there. The apps are going to get developed, 0:17:26.920 --> 0:17:29.440 you know, from an AI perspective, over the next. 0:17:29.280 --> 0:17:31.520 Year, they're going to get a slice of the pie. 0:17:31.920 --> 0:17:34.000 I mean that's that's really the key. 0:17:34.119 --> 0:17:38.480 I mean the services perspective, they'll be the storage, they'll 0:17:38.480 --> 0:17:43.000 be the consumer foundation for AI. That's twenty percent of 0:17:43.040 --> 0:17:47.199 consumers in the world will access AI through an Apple device. 0:17:47.480 --> 0:17:49.040 Is that what we're going to see at the developer 0:17:49.080 --> 0:17:51.320 conference or is this something that is going to be 0:17:51.359 --> 0:17:53.240 an announced or develop over time. 0:17:54.080 --> 0:17:55.400 Well, I think it starts off. 0:17:55.520 --> 0:17:59.480 I mean, finally, all the Apple intelligence features that they'll 0:17:59.520 --> 0:18:03.040 actually veil, JEM and I will be the first in 0:18:03.160 --> 0:18:06.240 terms of what we talk about as the big partnership. 0:18:06.240 --> 0:18:07.880 And it's all gonna plug in. 0:18:08.400 --> 0:18:10.760 When you think about the next version of iOS, I mean, 0:18:10.800 --> 0:18:14.880 this is really gonna plug in to the Apple ecosystem. 0:18:14.960 --> 0:18:16.919 Everything we've been waiting for the last two years is 0:18:16.960 --> 0:18:20.520 now here. The enterprise AI revolution has been here, the 0:18:20.560 --> 0:18:22.920 consumer hasn't been and now it starts. 0:18:23.400 --> 0:18:27.520 So will this be you know, chat ept Claude, whomever 0:18:27.600 --> 0:18:31.200 it is saying Apple saying hey, if you want to 0:18:31.200 --> 0:18:32.720 be on my system, I'm going to take a cut 0:18:32.720 --> 0:18:34.480 of any subscription revenue. 0:18:34.520 --> 0:18:35.159 Is at the model. 0:18:35.960 --> 0:18:38.400 Well, I think at first that's not gonna be it, right, 0:18:38.440 --> 0:18:40.040 but eventually the storage. 0:18:41.160 --> 0:18:44.520 The thing about the amount of storage, that's ultimately going 0:18:44.560 --> 0:18:46.200 to mean the where's that's going to go through. It's 0:18:46.240 --> 0:18:47.320 going to go through the cloud. 0:18:48.200 --> 0:18:52.280 It's gonna you're gonna see in Essentially, apps develop their 0:18:52.320 --> 0:18:55.840 AI enabled on the app store, Apple gets a peace. 0:18:56.640 --> 0:18:59.720 So what starts to happen is as more consumers around 0:18:59.720 --> 0:19:05.040 the world world start to use AI in everyday setting, 0:19:05.920 --> 0:19:09.400 it's going to happen through an Apple device, and that 0:19:09.840 --> 0:19:13.040 is how they're going to monetize on AI. 0:19:14.080 --> 0:19:17.320 So is this does this suggest that they will, you know, 0:19:17.520 --> 0:19:21.680 unlikely make the types of large language model investments and 0:19:21.760 --> 0:19:24.520 data center investments that we've seen some other technology companies. 0:19:24.600 --> 0:19:26.359 That is not going to be their model. They're going 0:19:26.359 --> 0:19:27.520 to do an asset light model. 0:19:28.440 --> 0:19:30.840 And it's an asset lives not because they don't need 0:19:30.880 --> 0:19:33.240 to do it, because they have the install based they're 0:19:33.280 --> 0:19:35.920 not a hyperscaleur right, I mean, they're not spending that 0:19:36.000 --> 0:19:38.560 type of hours and this some extent. 0:19:38.640 --> 0:19:41.639 By them not spending like that, they now are in a. 0:19:41.680 --> 0:19:45.520 Position of strength to finally execute on the strategy. And 0:19:45.560 --> 0:19:48.040 that's why I think the baton's getting handed to turn 0:19:48.200 --> 0:19:52.679 is at this time, especially you know as you you 0:19:52.800 --> 0:19:55.879 basically have the surprise upgrade cycle that's helped them this year. 0:19:56.160 --> 0:19:57.280 How does this end? 0:19:57.560 --> 0:20:00.480 I mean it denies as we stagger through this, I 0:20:00.520 --> 0:20:04.240 mean the narrowness here, there's no analog to what we've 0:20:04.280 --> 0:20:08.840 seen here. Does this broaden out into other AI stocks? 0:20:09.520 --> 0:20:12.400 Do I have Apple with a fifty multiple? Where are 0:20:12.400 --> 0:20:13.360 we heading. 0:20:14.200 --> 0:20:15.160 It broadens out? 0:20:15.800 --> 0:20:15.960 Look? 0:20:16.000 --> 0:20:18.240 It's my look. We're top of the third. 0:20:17.960 --> 0:20:23.480 Inning, one out man on second in terms of AI game, 0:20:24.280 --> 0:20:26.119 and I think what's going to happen is it's going 0:20:26.200 --> 0:20:30.400 to expand out to software, expand out on the consumer side. 0:20:30.520 --> 0:20:33.359 You've obviously seen the expansion within chips in terms of 0:20:33.440 --> 0:20:35.520 Intel and others. And then I think it's going to 0:20:35.640 --> 0:20:38.320 expand to energy and we talk about you know, other 0:20:38.440 --> 0:20:41.679 sort of subsectors. That's why it's our view we'll be 0:20:41.720 --> 0:20:44.080 talking NAZAC thirty thousand by the end of the. 0:20:44.119 --> 0:20:47.600 Year, Dan, Microsoft's been one of the names that you've 0:20:47.600 --> 0:20:48.680 talked about for a long time. 0:20:48.720 --> 0:20:51.879 What's the current call on MSFT. 0:20:53.040 --> 0:20:57.760 It's the most undervalued large cap technique out there, am 0:20:57.800 --> 0:21:00.560 I view? I mean, just given where my view on prize, 0:21:00.960 --> 0:21:02.360 what's happened on Azure. 0:21:03.440 --> 0:21:04.920 I think in. 0:21:04.880 --> 0:21:09.159 Terms of the execution, it's one where investors, you know, 0:21:09.240 --> 0:21:13.160 have definitely significant dismounted relatively what's happening with Google and others. 0:21:13.280 --> 0:21:16.399 I think the two you'll get Apple and Microsoft, or 0:21:16.440 --> 0:21:19.080 the two table pounders on large cap relative to where 0:21:19.080 --> 0:21:19.919 they're trade today. 0:21:20.680 --> 0:21:25.159 I look Dan at the the AI upheaval. 0:21:24.680 --> 0:21:27.000 And I'll be honest, folks, I really don't follow all 0:21:27.080 --> 0:21:30.680 this executive stuff. Is must gonna win in all this? 0:21:31.280 --> 0:21:33.399 I mean, Dan, do you have eight thousand shares? I 0:21:33.400 --> 0:21:36.320 mean you know the IPO? I mean are you front 0:21:36.359 --> 0:21:39.159 running this? I mean, does Musk win in all this? 0:21:40.400 --> 0:21:44.680 I think in the case, I think ultimately all I think, 0:21:45.200 --> 0:21:47.879 I don't think must wins against all men in open A. 0:21:48.000 --> 0:21:49.760