WEBVTT - BlackRock CEO Larry Fink Talks AI Bubbles

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<v Speaker 1>Bloomberg Audio Studios, podcasts.

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<v Speaker 3>In many ways, it's fulfilling the work that everybody has done.

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<v Speaker 3>I mean taking on the responsibility was something that I

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<v Speaker 3>was It was pretty daunting for me to do that

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<v Speaker 3>with my full time day job, but the amazing team

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<v Speaker 3>behind behind Davos really assisted with me and helped me out.

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<v Speaker 3>I have an amazing coachair And importantly, though, I think

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<v Speaker 3>I think everybody was in need of having a conversation.

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<v Speaker 3>You know, we as a board, we talked about that

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<v Speaker 3>we wanted to move the conversation and have a much

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<v Speaker 3>more open, robust conversation, and that's how we came up

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<v Speaker 3>with the spirit of dialogue as.

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<v Speaker 2>The foundation of today.

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<v Speaker 3>But I think the confluence of so many things going

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<v Speaker 3>on globally, I think, you know, we were able to

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<v Speaker 3>be at the right moment, in the right spot. And importantly,

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<v Speaker 3>let me start over with the foundational issues. I mean,

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<v Speaker 3>the fifty five years of claud Schwab was a foundation

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<v Speaker 3>of what we were being able to build upon. But

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<v Speaker 3>no place other than the World Economic Forum in Davos

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<v Speaker 3>has the combination of world leaders and we had eighty

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<v Speaker 3>four I think the only other place where you have

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<v Speaker 3>eighty four world leaders in one place.

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<v Speaker 2>Is that the EU one in New York.

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<v Speaker 3>But we had over eight hundred CEOs and share, we

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<v Speaker 3>had civil society. We had so many different people here,

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<v Speaker 3>and I think it was that conversation, that spirit that

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<v Speaker 3>really made it.

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<v Speaker 1>I guess it was touch and go because at times

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<v Speaker 1>people were bracing for a belligerent speech from President Trump.

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<v Speaker 1>So I don't know how you look at geopolitics and

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<v Speaker 1>geoeconomics given what we've learned so far.

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<v Speaker 3>I think because of all that, everybody wanted to hear.

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<v Speaker 3>I think Tuesday was just as important. The conversations we

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<v Speaker 3>had with Europeans, with Mark Karney, with Emmanuel Macron. They

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<v Speaker 3>were great, honest, open conversations. I think Mark Karney delivered

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<v Speaker 3>an incredible conversation. I may not have agreed with everything

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<v Speaker 3>he said. That's not what we're here for. We're here

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<v Speaker 3>to have that conversation, but I really do believe the

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<v Speaker 3>openness of those conversations on Tuesday led obviously to a

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<v Speaker 3>large conversation with the President of the United States yesterday,

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<v Speaker 3>and then we had the Piece edition this morning. But

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<v Speaker 3>my conversation even Wednesday morning with Jensen on the role

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<v Speaker 3>of Navidio and what does that mean for all of AI?

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<v Speaker 3>And you to me, I learned a lot of that conversation.

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<v Speaker 1>Do you worry about AI bubbles? I mean, this is

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<v Speaker 1>the thing that worries the markets. If you put your

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<v Speaker 1>black rock hat on for a second, it's AI and

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<v Speaker 1>it's geopolitics. Which one's more uncertain.

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<v Speaker 3>I don't think there's any uncertainty about A. There's no

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<v Speaker 3>question hundreds of billions of dollars is needed to build

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<v Speaker 3>this out. The capex is going to dry war global growth,

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<v Speaker 3>how that is going to be dispersed, and where it's

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<v Speaker 3>going to be. It's gonna be really dependent on each

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<v Speaker 3>and every government. But I'm sincerely believe there is no

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<v Speaker 3>bubble in the AI space. That being said, like in

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<v Speaker 3>everything else in capitalism, there's gonna be some big failures.

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<v Speaker 2>Okay, we always see a rotation and there's gonna be

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<v Speaker 2>some huge winners and some losers.

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<v Speaker 3>But do I believe the needed capital to build out

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<v Speaker 3>AI is.

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<v Speaker 2>One of the great opportunities for the world to come.

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<v Speaker 3>When you think about the hundreds of billions of dollars

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<v Speaker 3>that infrastructure that's necessary, Countries are gonna have to rebuild

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<v Speaker 3>their grids, we're gonna have to source new powers of energy.

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<v Speaker 3>Last night at a dinner, we had an amazing conversation

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<v Speaker 3>on how AI is gonna change science and how it's

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<v Speaker 3>going to improve human lives in terms of medicine. But importantly,

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<v Speaker 3>there is a strong foundational belief that AI is going

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<v Speaker 3>to accelerate new sources of power and if we can

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<v Speaker 3>have cheap sources of power, abundant cheap sources of power,

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<v Speaker 3>maybe things that we can't even think of today through AI.

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<v Speaker 3>Imagine how that could lift the rest of the world.

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<v Speaker 1>You announced a big actually partnership with Microsoft that you've

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<v Speaker 1>raised twelve point five billion as part of this, you know,

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<v Speaker 1>pardnership to Bank World Data Center. Yes, Like, when are

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<v Speaker 1>you hitting thirty million?

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<v Speaker 2>Thirty billion?

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<v Speaker 1>Yeah, thirty billion, when's that coming?

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<v Speaker 3>Well, we raised twelve twelve and a half, were actively

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<v Speaker 3>raising more money we did. We did already making it

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<v Speaker 3>an acquisition and aligned data centers. Total enterprise value was

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<v Speaker 3>forty billion dollars. But not only is Microsoft our partners

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<v Speaker 3>MGX of Abu Dhabi, the video is one of our

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<v Speaker 3>partners XAI is one of our partners, and so we

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<v Speaker 3>have an incredible partnership group in building this out, and

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<v Speaker 3>we are seeing more and more opportunity working alongside some

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<v Speaker 3>of the best hyperscalers, and so we see nothing but opportunity,

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<v Speaker 3>and that you know, we have to be judicious and

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<v Speaker 3>we have to be thoughtful about it. But I'm very

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<v Speaker 3>encouraged about what AI can do for humanity.

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<v Speaker 1>I mean, the way we've covered World Economic Forum is

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<v Speaker 1>also trying to figure out whether there was a move

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<v Speaker 1>away from US assets. Do you see that at all

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<v Speaker 1>or is it a conversation that you had with the

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<v Speaker 1>Trump administration.

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<v Speaker 3>So if I go back to early DeVos last year,

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<v Speaker 3>I would say the average world investor had unbelievable overallocation

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<v Speaker 3>in dollar at based assets, and I think over the

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<v Speaker 3>course of last year we saw probably a five percent reallocation.

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<v Speaker 2>And that's fine.

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<v Speaker 3>I mean, when your liability is another currents and you're

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<v Speaker 3>investing in dollar, I mean the value of the dollar

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<v Speaker 3>is an important consideration in your total return. Could there

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<v Speaker 3>be more reallocation of the dollar? I think the US because.

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<v Speaker 2>Of where we are at AI and the amount of

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<v Speaker 2>capitalism means. But I think I think we have a

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<v Speaker 2>you know, the US economy is really growing fast.

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<v Speaker 3>I mean we estimated it'll be over five percent, you know,

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<v Speaker 3>in the first quarter, So we are you know, the

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<v Speaker 3>key is now, don't just focus on GDP because GDP

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<v Speaker 3>is heavily oriented.

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<v Speaker 2>To all the cap X on AI and technology. The

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<v Speaker 2>key is.

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<v Speaker 3>In that in that economic condition, are we creating enough

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<v Speaker 3>great jobs and so so to me, that is what

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<v Speaker 3>what we need to be focused on, not just GDP

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<v Speaker 3>anymore because GDP is going to be powerful. And that's

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<v Speaker 3>one of the reason why I am still you know,

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<v Speaker 3>I do believe in the United States is one of

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<v Speaker 3>the great places to invest, and it will remain to

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<v Speaker 3>be one of the great places to invest. But having

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<v Speaker 3>a diversification, you know that we've seen a little bit

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<v Speaker 3>live here and there. I'm very relaxed about it. I

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<v Speaker 3>think there's too much noise about that.

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<v Speaker 1>What have you learned here in Davos. I mean you've

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<v Speaker 1>spoken to everyone. Are people nervous about the relationship between

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<v Speaker 1>the US and the EU is a little bit better

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<v Speaker 1>than it was? What do we do with China? What's

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<v Speaker 1>been the most surprising conversation you've had?

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<v Speaker 3>How needed people needed to be here to have a conversation.

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<v Speaker 3>I think people came here with a lot of trepidation.

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<v Speaker 3>I think they came here with a lot of fears,

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<v Speaker 3>and I do believe we're going to be leaving Dabbas

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<v Speaker 3>with less geopolitical fears.

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<v Speaker 2>I believe we have.

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<v Speaker 3>You know, if there can be peace in Ukraine, which

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<v Speaker 3>I'm heavily involved in and Black Rocks heavily involved in

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<v Speaker 3>working on the Prosperity Fund, I.

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<v Speaker 2>Mean, think about that. If we could have that, that's a.

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<v Speaker 3>Foundation of a more global economic growth. When you think

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<v Speaker 3>about when we entered twenty twenty five where we had

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<v Speaker 3>a war in Caza, we had all these different skirmishes,

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<v Speaker 3>and you know, we may be more nervous and focusing

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<v Speaker 3>on all these issues, but the reality the world is

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<v Speaker 3>becoming safer, not less safe in my mind. And the

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<v Speaker 3>last thing I want to say related to volatility, which

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<v Speaker 3>if you look at the ten year treasury on January first,

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<v Speaker 3>twenty twenty five, April first, and October first, and then

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<v Speaker 3>January first this year, if you're looking at use those

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<v Speaker 3>four points of data at the ten year treasury, the

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<v Speaker 3>ten year treasury moved three bases points.

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<v Speaker 2>Okay, yes, we've had a lot of.

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<v Speaker 1>Volatility, There isn't a lot of volatileny.

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<v Speaker 3>But my point is the way I want to talk

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<v Speaker 3>about that when you look at those wider points, there

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<v Speaker 3>has been no volatility, and the key and the message

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<v Speaker 3>that we need to be telling people who were watching.

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<v Speaker 3>It's not about the moment. It's not about the noise.

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<v Speaker 3>I mean, it is about long term investing. You know,

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<v Speaker 3>when I think back, if you invested a dollar in

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<v Speaker 3>the S and P on January first, two thousand and

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<v Speaker 3>a year later, you had a thirty percent downdraft because

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<v Speaker 3>of the dot Com bloind but over that twenty five

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<v Speaker 3>years you made over an eight percent compoundent return, better

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<v Speaker 3>than almost any other investment. Again, I think there's just

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<v Speaker 3>not enough narrative, not enough conversation about we got to

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<v Speaker 3>just walk away from the noise.

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<v Speaker 2>And if you believe.

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<v Speaker 3>That we can be better, if you believe that your government,

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<v Speaker 3>your economy is going to grow, you need to grow

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<v Speaker 3>with it. I said something in one of my meetings

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<v Speaker 3>earlier today, I don't remember which one now, and this

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<v Speaker 3>one very powerful person in AI came up to me

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<v Speaker 3>yesterday and he said, you're right. And what I said was,

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<v Speaker 3>we need to make sure if this AI transformation is real.

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<v Speaker 3>I think we need to make a responsibility getting more

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<v Speaker 3>people to be investing alongside of it.

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<v Speaker 2>Not watching.

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<v Speaker 3>And I always say, if you believe in your country,

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<v Speaker 3>if you believe in your country, why aren't you investing

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<v Speaker 3>with your country? And the best way of investing is

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<v Speaker 3>in a broad index in your country. And I think

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<v Speaker 3>one of the foundational problems of Europe has been the underinvestment.

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<v Speaker 2>The lack of capital markets in Europe.

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<v Speaker 3>When you think about the success in the last twenty

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<v Speaker 3>four months in Japan, it started when the then Prime

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<v Speaker 3>Minister Kashita doubled the size of the NISA account.

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<v Speaker 2>Which is a self directed retirement account.

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<v Speaker 1>Larry, does that change after the threats and warnings from

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<v Speaker 1>President Trump for Europe? Is this the time where they focus?

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<v Speaker 3>But I heard Christine Legard talk about, you know, Europe

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<v Speaker 3>needs a capital markets, the unified capital markets. I think

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<v Speaker 3>that's an important message for Europe, you know, I you know,

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<v Speaker 3>I think President Trump's prompting Europe to take more responsibility.

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<v Speaker 2>And defense in NATO. All these things are really wonderful.

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<v Speaker 3>I think I actually am bullish on Europe because finally

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<v Speaker 3>I'm starting to see Europe doing these long term things

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<v Speaker 3>to build vitality for the future.

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<v Speaker 1>Larry, are you moving weft to Detroit?

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<v Speaker 3>There has been no There has never been a formal

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<v Speaker 3>conversation or a conversation at the level or at the

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<v Speaker 3>governance committee about any movement of Davos. There has been

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<v Speaker 3>a broad conversation, how can we bring the vitality of

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<v Speaker 3>the World Economic Forum.

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<v Speaker 2>In Davos to other locations.

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<v Speaker 3>I will be in Istanbul with the World Economic Forum

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<v Speaker 3>this spring in Istanbul. There is a spring World Economic

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<v Speaker 3>Forum now in Jetta in April, and so we need

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<v Speaker 3>to have this foundation of conversation not just here in Switzerland,

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<v Speaker 3>but we need to have it in other locations. And

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<v Speaker 3>to me, that is going to be the essence you know,

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<v Speaker 3>of having these things, having more deliberate conversations, and it

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<v Speaker 3>doesn't have to always be in Switzerland.

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<v Speaker 2>But Davos as Davos.

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<v Speaker 3>It is a great town, the weather is magnificent, The

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<v Speaker 3>hospitality of the Swiss government has been amazing. I think

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<v Speaker 3>the having this Congress center has really allowed us to have,

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<v Speaker 3>you know, intimate conversations, brilliant conversations and importantly open conversations.