WEBVTT - Bloomberg Businessweek Weekend: November 24th, 2023 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Week inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.600 --> 0:00:23.680 Hi, everyone, Welcome to this holiday weekend edition of Bloomberg 0:00:23.720 --> 0:00:27.160 Business Week. It was supposed to be a quiet, abbreviated 0:00:27.160 --> 0:00:30.120 week for markets. What we got was anything but. 0:00:30.400 --> 0:00:34.120 The investor is actually shrugged as Nvidia reported quarterly revenue 0:00:34.560 --> 0:00:38.120 that tripled from a year earlier. Then the Justice Department 0:00:38.280 --> 0:00:41.199 brought the hammer down on crypto Exchange Finance and its founder. 0:00:41.479 --> 0:00:43.720 And then, of course, Carol, there was Open Ai. 0:00:43.960 --> 0:00:46.840 As we said, anything but quiet. Well, less than five 0:00:46.960 --> 0:00:51.360 days after Sam Altman's abrupt ouster from the artificial intelligence startup, 0:00:51.640 --> 0:00:54.400 Altman was back at OpenAI, one of the world's most 0:00:54.520 --> 0:00:57.600 valuable startups, putting an end, at least for now, to 0:00:57.640 --> 0:01:01.120 the back and forth drama that transfixed Silicon Valley and 0:01:01.160 --> 0:01:02.720 the global AI industry. 0:01:03.040 --> 0:01:06.040 We'll be talking tech throughout our first hour of the program, 0:01:06.160 --> 0:01:08.200 and we begin with someone who knows quite a bit 0:01:08.200 --> 0:01:11.120 about this space and the broader implications of AI in 0:01:11.160 --> 0:01:15.440 our society. Andrew McAfee is principal research scientist at MIT, 0:01:15.880 --> 0:01:17.720 and he joins us with his take on the open 0:01:17.760 --> 0:01:18.520 AI saga. 0:01:18.959 --> 0:01:23.120 I think this is just a crystal clear case study 0:01:23.480 --> 0:01:27.919 of the importance of good old fashion, boring corporate governance 0:01:28.200 --> 0:01:31.600 and running a good board. This feels like a huge 0:01:31.840 --> 0:01:34.520 enforced error on the part of the Open AI board, 0:01:34.760 --> 0:01:36.280 and I still don't quite understand it. 0:01:36.640 --> 0:01:38.240 Yeah, I think you're not the only one who doesn't 0:01:38.280 --> 0:01:41.479 quite understand it. Doesn't sound like even Satinadella at Microsoft 0:01:41.680 --> 0:01:43.679 Carol knows why he was fired. 0:01:43.920 --> 0:01:44.120 Yeah. 0:01:44.160 --> 0:01:46.280 I mean that's what's interesting. I mean, is it important 0:01:46.280 --> 0:01:50.360 in your view, Andrew, that we know every detail in 0:01:50.440 --> 0:01:53.720 terms of how this ends, or what is ultimately the 0:01:53.760 --> 0:01:57.400 important thing that we get out of this, or how 0:01:57.440 --> 0:01:58.800 it ends in your view. 0:01:59.560 --> 0:02:01.680 I don't think we're ever going to know all the details, 0:02:01.720 --> 0:02:07.280 but we do know that if you have an extraordinarily popular, 0:02:07.840 --> 0:02:13.920 very effective CEO at growing a tech company, the board 0:02:14.120 --> 0:02:17.720 might not want to fire that person with almost with 0:02:17.800 --> 0:02:20.680 no notice, really without apparently engaging on a lot of 0:02:20.720 --> 0:02:23.840 back and forth with him, not for any fraud or 0:02:23.840 --> 0:02:27.639 misconduct or malfeasance, but because of some other kind of 0:02:27.720 --> 0:02:30.440 vague problem. If the board is going to take that 0:02:30.520 --> 0:02:35.000 fairly rash step, they probably want to alert their major investors, 0:02:35.280 --> 0:02:38.639 their biggest business partners, their employee base, and give them 0:02:38.680 --> 0:02:41.400 time to get ready. For all that, they didn't appear 0:02:41.440 --> 0:02:44.240 to do any of that, And when they were frantically 0:02:44.320 --> 0:02:47.280 negotiating over the weekend to try to bring him back, 0:02:47.800 --> 0:02:49.760 that all fell apart, And it fell apart to the 0:02:49.800 --> 0:02:53.040 extent that the huge majority of the employees of the 0:02:53.080 --> 0:02:56.880 company have signaled that they will walk away. Whatever you 0:02:56.960 --> 0:02:59.640 think the board's duty is, I can't see how it 0:02:59.919 --> 0:03:04.200 is includes destroying that much value, hollowing out the employee 0:03:04.240 --> 0:03:06.760 base of the company. And if the mission of the 0:03:06.800 --> 0:03:10.720 Open AI Foundation is to advance safe agi for humanity, 0:03:11.000 --> 0:03:13.639 I do not see how these actions support that mission 0:03:13.680 --> 0:03:14.079 at all. 0:03:14.200 --> 0:03:16.280 Hey, Business School, this is a case study of how 0:03:16.360 --> 0:03:17.679 not to do things. Basically. 0:03:17.760 --> 0:03:19.720 There are plenty of examples of that. By the way, 0:03:19.919 --> 0:03:20.639 there is plenty. 0:03:20.639 --> 0:03:23.120 They're all that right. Often usually. 0:03:24.440 --> 0:03:27.440 You know, I'm wondering. You know, Tim was really smart 0:03:27.520 --> 0:03:29.919 in terms of our discussions that we've been having around 0:03:29.919 --> 0:03:33.240 this about what seems to be maybe at odds, and 0:03:33.240 --> 0:03:36.480 that is this debate about a need for balance of 0:03:36.560 --> 0:03:41.760 pushing generative AI, this technology, expanding, exploring it to reach 0:03:41.800 --> 0:03:45.960 its potential, but with also having an ethical line because 0:03:45.960 --> 0:03:49.840 of the potential of it to do wrong. Although I 0:03:49.880 --> 0:03:52.880 would go back to you know, the Cold War and 0:03:52.960 --> 0:03:56.120 missiles and the battle to have the greatest and best 0:03:56.160 --> 0:03:58.680 in terms of military and how that could bring the 0:03:58.800 --> 0:04:02.000 end to civilization. So trying to kind of figure out 0:04:02.920 --> 0:04:05.280 what is at risk if we get this wrong? 0:04:06.400 --> 0:04:10.200 Help me hear, yeah, whatever is at risk? If your 0:04:10.360 --> 0:04:14.480 organization organization's mission is safe AI, and you believe apparently 0:04:14.520 --> 0:04:16.520 that a for profit company is not the right way 0:04:16.560 --> 0:04:20.039 to accomplish that mission, then doing things that let your 0:04:20.160 --> 0:04:23.840 CEO and again almost all of the employees wind up 0:04:23.920 --> 0:04:26.680 at an AI building for profit company that is not 0:04:26.720 --> 0:04:29.919 accomplishing the goals of your mission. I personally am not 0:04:30.120 --> 0:04:35.400 worried about the existential the alignment risk of AI. All 0:04:35.600 --> 0:04:38.080 very powerful tools bring risks and harms with them, and 0:04:38.120 --> 0:04:40.520 they demand vigilance, and we got to be careful about it. 0:04:40.800 --> 0:04:43.680 I don't think AI is any big exception to that 0:04:43.760 --> 0:04:47.440 trend or requires us to do radically different things. We 0:04:47.520 --> 0:04:49.640 just have to be vigilant. Stop the bad uses. 0:04:49.720 --> 0:04:53.440 That is really really surprising for me to hear from you, Andrew, 0:04:53.600 --> 0:04:57.280 because I hear from you know, the worst case scenario 0:04:57.360 --> 0:04:59.080 when it comes to this stuff is, okay, what if 0:04:59.400 --> 0:05:04.200 AI developed some sort of super bug or biological weapon, 0:05:04.440 --> 0:05:06.320 or in fact, you know in the Elon Musk school, 0:05:06.680 --> 0:05:10.000 become sentient and more powerful than human beings. Why does 0:05:10.040 --> 0:05:10.760 that not worry you? 0:05:11.640 --> 0:05:13.200 I mean, I read a lot of science fiction as 0:05:13.200 --> 0:05:16.960 a kid, too. I think terminator sci fi scenarios are 0:05:16.960 --> 0:05:19.839 not great guides to policy, are not great guides to 0:05:20.440 --> 0:05:24.320 I'm using this very powerful, very beneficial toolkit. I do 0:05:24.400 --> 0:05:26.599 think that there is a risk that AI, for example, 0:05:26.839 --> 0:05:30.440 could be used to as part of an effort to 0:05:30.520 --> 0:05:34.360 engineer bad bugs or bioweapons. Great, why are we focusing 0:05:34.400 --> 0:05:37.760 on a AI and not gene editing and not gene 0:05:37.760 --> 0:05:41.120 sequencing technologies? And why are we letting anybody apply to 0:05:41.240 --> 0:05:45.239 molecular biology and genetics doctoral programs and distributing that knowledge 0:05:45.320 --> 0:05:48.320 very freely. There are, again, there are risks in the 0:05:48.360 --> 0:05:51.880 modern world, let's not be naive about that. But singling 0:05:51.920 --> 0:05:54.719 out AI as the lynchpin that's going to make everything 0:05:54.760 --> 0:05:57.000 bad happen, I just think that's wrong. I think that's 0:05:57.040 --> 0:06:00.960 a misallocation of our effort. Okay, demonizing technologies that will 0:06:01.000 --> 0:06:03.679 be super beneficial to us, I think as allows the idea. 0:06:03.920 --> 0:06:06.760 Well, let's move away from the superbug concern and more 0:06:06.800 --> 0:06:09.360 to the concern that it will become a sentient being 0:06:09.400 --> 0:06:11.560 that is more powerful and smarter than us. Why does 0:06:11.600 --> 0:06:13.080 that not concern you? 0:06:13.080 --> 0:06:15.680 You know, we have so many more important things to 0:06:15.680 --> 0:06:18.279 worry about. We have to accomplish an energy transition in 0:06:18.320 --> 0:06:21.320 the twenty first century. We have too high a disease burden. 0:06:21.360 --> 0:06:24.080 There are too many people in dire poverty around the world. 0:06:24.320 --> 0:06:27.039 I believe that AI might be the most powerful tool 0:06:27.320 --> 0:06:29.760 that we've ever come up with to help us solve 0:06:29.880 --> 0:06:34.520 these global planetary challenges facing humanity. And we're sitting around 0:06:34.560 --> 0:06:36.840 worried about the terminator when there's not a shred of 0:06:36.880 --> 0:06:40.279 evidence that AI has become sentient or taken control of 0:06:40.320 --> 0:06:42.560 anything that we don't want it to. Bad sci fi 0:06:42.680 --> 0:06:44.240 mixed bad policy. 0:06:43.960 --> 0:06:46.799 And to full transparency. You're working with Google on research 0:06:46.839 --> 0:06:50.040 related to the societal impacts of generative AI. I am 0:06:50.120 --> 0:06:52.360 curious that what is the balance you all at Google 0:06:52.400 --> 0:06:56.840 are pursuing when it comes to generative AI reaching its potential, 0:06:56.880 --> 0:06:59.480 but also being smart about it and careful with it. 0:07:00.040 --> 0:07:01.640 Yeah, thanks for that, because I really want to make 0:07:01.680 --> 0:07:05.119 clear here I am just talking about my own personal views. 0:07:05.160 --> 0:07:08.280 I am not representing Google's views on this. I actually 0:07:08.800 --> 0:07:11.360 am not on top of everything that Google believes. What 0:07:11.440 --> 0:07:13.240 I do know because I read the statement like the 0:07:13.280 --> 0:07:15.600 rest of the public did, that Google stance is that 0:07:15.640 --> 0:07:18.680 we need to be bold and responsible. I think we 0:07:18.720 --> 0:07:22.200 are in danger of walking away from the bold part 0:07:22.600 --> 0:07:26.680 in an overabundance of not just caution, but fear about 0:07:26.760 --> 0:07:29.600 things that we just don't have any evidence for. I 0:07:29.600 --> 0:07:32.120 want to say this again, this is my view, not 0:07:32.200 --> 0:07:33.560 necessarily Google's view. 0:07:33.720 --> 0:07:37.840 The thing that most concerns me about generitive AI is 0:07:37.920 --> 0:07:42.560 misinformation and the ability for bad actors to use that 0:07:42.640 --> 0:07:46.920 misinformation at scale to control outcomes like happens in social media. 0:07:46.960 --> 0:07:49.400 Exactly not that different than a lot of accusations that 0:07:49.440 --> 0:07:51.320 we saw fly in the wake of twenty sixteen and 0:07:51.360 --> 0:07:53.640 twenty twenty elections here in the US. But if you 0:07:53.680 --> 0:07:58.160 thought a bot army of people, you know in Eastern 0:07:58.240 --> 0:08:01.680 Europe with social media, we're scary, then what about an 0:08:01.720 --> 0:08:05.840 actual bought army of generative AI that's able to you know, 0:08:06.480 --> 0:08:07.480 do this stuff at scale. 0:08:07.520 --> 0:08:10.720 Andrew, Now that's a harm that we should be worrying about, 0:08:10.760 --> 0:08:14.520 because these are actual challenges, and like you say, bad 0:08:14.560 --> 0:08:18.480 actors are going to weaponize generative AI to do all 0:08:18.560 --> 0:08:20.720 kinds of harm or try to do all kinds of harm. 0:08:20.840 --> 0:08:23.280 This is a real risk. It's a real harm. I 0:08:23.480 --> 0:08:27.000 have faith in our ability to deal with the harms 0:08:27.040 --> 0:08:31.640 that technology brings us. I think we can find ways 0:08:31.640 --> 0:08:34.480 to have trusted sources that will verify whether a thing 0:08:34.559 --> 0:08:36.360 is a deep fake or not. All of us have 0:08:36.440 --> 0:08:38.280 the new sources that we run to when we see 0:08:38.280 --> 0:08:40.160 something that might be true or might not be true. 0:08:40.360 --> 0:08:42.880 We can strengthen those kinds of institutions and those kinds 0:08:42.880 --> 0:08:46.120 of responses. We can also educate people to be more 0:08:46.280 --> 0:08:49.280 discerning consumers of the news. 0:08:49.440 --> 0:08:51.720 You know you talk about You know, you have faith 0:08:51.760 --> 0:08:53.920 to deal with the harms of this technology maybe will 0:08:53.960 --> 0:08:58.000 ultimately bring us, should there there be some guardrails in place, 0:08:58.600 --> 0:09:02.079 you know, Amy once you know you know, shame or 0:09:02.120 --> 0:09:04.080 full me one. Shame on you for me twice, Shame 0:09:04.120 --> 0:09:05.319 on you know you. 0:09:05.280 --> 0:09:06.319 Know what I mean? You know what I mean. 0:09:07.559 --> 0:09:08.080 George W. 0:09:08.160 --> 0:09:09.160 Bush Sutching. 0:09:11.040 --> 0:09:13.760 But I guess my point is, whether it's social media, 0:09:13.840 --> 0:09:15.960 whether it's crypto, there's a lot of things out there 0:09:15.960 --> 0:09:17.800 that it's like, Oh, I guess we should have been 0:09:17.800 --> 0:09:20.880 doing this. Is there something we should have in place 0:09:22.240 --> 0:09:24.480 at this point when it comes to generative AI. 0:09:25.720 --> 0:09:28.160 I think what we should have in place is a 0:09:28.280 --> 0:09:31.160 very agile system for becoming aware of the harms and 0:09:31.240 --> 0:09:34.280 dealing with the harms as they crop up. For example, 0:09:34.360 --> 0:09:36.960 after smartphones were out for a while, we learned that 0:09:37.000 --> 0:09:39.920 a bunch of losers were using them to take pictures 0:09:39.960 --> 0:09:41.880 of the skirts of women, you know, as they commuted 0:09:41.920 --> 0:09:44.679 to work on the subway. We didn't not love a smartphone. 0:09:44.840 --> 0:09:47.600 We didn't make smartphone makers apply for a license to 0:09:47.760 --> 0:09:50.480 use a camera. We didn't make all of us apply 0:09:50.600 --> 0:09:54.959 for a license to have a camera equipped smartphone around 0:09:55.120 --> 0:09:58.760 the states. Anyway, lots of legislatures acted really quickly to 0:09:58.800 --> 0:10:03.120 make that particular use of the phone illegal. The beast 0:10:03.200 --> 0:10:06.240 response to the harms that come up is my preferred 0:10:06.280 --> 0:10:08.880 approach for dealing with these. I don't trust me or 0:10:08.920 --> 0:10:12.160 you or anybody else to sit around right here and 0:10:12.400 --> 0:10:15.760 correctly anticipate all of the things that will happen, and 0:10:15.840 --> 0:10:17.800 all of the effective ways to head that off. I 0:10:17.920 --> 0:10:18.800 just don't our. 0:10:18.840 --> 0:10:22.640 Thanks to Andrew McAfee, principal research scientist at MIT. Check 0:10:22.640 --> 0:10:24.480 out his new book, It's called The Geek Way, The 0:10:24.559 --> 0:10:28.400 Radical Mindset that drives Extraordinary results. And stick with Bloomberg 0:10:28.480 --> 0:10:31.280 News for any future twists and turns from Open AI 0:10:31.640 --> 0:10:34.319 and the global AI race, Carol, I know that there 0:10:34.320 --> 0:10:34.840 will be more. 0:10:35.000 --> 0:10:37.520 That's one thing we can kind of say for certainty. 0:10:37.800 --> 0:10:39.520 All right, coming up, everybody, We're going to shift our 0:10:39.559 --> 0:10:43.680 focus from corporate governance to governmental regulation when it comes 0:10:43.720 --> 0:10:46.640 to cutting edge technology. It's an area in which the 0:10:46.679 --> 0:10:48.480 European Union has led the way. 0:10:48.760 --> 0:10:51.880 Former EU official and current head of France's independent public 0:10:51.880 --> 0:10:56.280 auditing body, Pierre Moscovici joins us. Next, you're listening to 0:10:56.320 --> 0:10:58.480 Bloomberg BusinessWeek. This is Bloomberg. 0:10:59.120 --> 0:11:02.679 You're listening to the Bloomberg Business Week podcast. Catch us 0:11:02.720 --> 0:11:06.080 live weekday afternoons from three to six Eastern Listen on 0:11:06.120 --> 0:11:10.200 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:11:10.440 --> 0:11:12.160 or watch us live on YouTube. 0:11:13.400 --> 0:11:16.319 Earlier this month, France, Germany, and Italy reached an agreement 0:11:16.360 --> 0:11:20.000 on how artificial intelligence should be regulated. That's according to 0:11:20.040 --> 0:11:23.720 a joint paper seen by Reuters, which reports that negotiations 0:11:23.720 --> 0:11:26.280 are set to ramp up within the European Commission, the 0:11:26.320 --> 0:11:28.880 European Parliament and the EU Council. 0:11:29.160 --> 0:11:32.559 The three governments support the concept of quote mandatory self 0:11:32.600 --> 0:11:36.320 regulation through codes of conduct for so called foundation models 0:11:36.320 --> 0:11:38.440 of AI. The paper goes on to say that the 0:11:38.520 --> 0:11:41.720 countries see risks in the applications of AI rather than 0:11:41.760 --> 0:11:43.120 in the technology itself. 0:11:43.600 --> 0:11:45.840 Europe has been at the forefront of big tech oversight 0:11:45.880 --> 0:11:49.720 with policies such as the General Data Protection Regulation, which 0:11:49.760 --> 0:11:53.200 aims to protect data and information privacy for citizens of 0:11:53.240 --> 0:11:53.640 the block. 0:11:53.840 --> 0:11:56.000 Our next guest was a member of the European Commission 0:11:56.000 --> 0:11:59.920 when GDPR was implemented. Pierre Moscovic now serves as first 0:12:00.040 --> 0:12:03.120 President of France's Court of Accounts. It's the country's supreme 0:12:03.160 --> 0:12:05.880 body for auditing the use of public funds in France. 0:12:06.280 --> 0:12:08.760 He joined Carol and Me and Studio to discuss their 0:12:08.840 --> 0:12:11.680 regulatory questions that AI now poses. 0:12:12.160 --> 0:12:16.280 The whole world is enamored with artificial intelligence. All business. 0:12:16.280 --> 0:12:20.440 Global business feels like they are enamored about it, racing 0:12:20.520 --> 0:12:23.160 toward it. What are your thoughts when you think about 0:12:23.240 --> 0:12:29.120 artificial intelligence, the importance when it comes to a country's economy, businesses, economies. 0:12:30.480 --> 0:12:33.440 Well, that's of course becoming huge and is going to 0:12:33.480 --> 0:12:37.040 be fantastic and gigantic in the future. Everybody knows that, 0:12:37.080 --> 0:12:42.040 and we all need to first invest on AI, use AI, 0:12:42.440 --> 0:12:47.800 and control AI. I chair an institution which troll is 0:12:47.840 --> 0:12:51.559 to control public finances. We are working on the strategy 0:12:51.840 --> 0:12:54.679 of the government for AI, and we are users of AI. 0:12:54.760 --> 0:12:58.319 But I think that illustrates the conflict we are facing 0:12:58.400 --> 0:13:02.040 and we will be facing between the necessary to develop AI, 0:13:02.320 --> 0:13:05.240 to invest on the I, but also to regulate AI 0:13:05.600 --> 0:13:10.640 because there are matters there of ethics about how we 0:13:10.640 --> 0:13:14.280 can control the evolution of AI, the way it will 0:13:14.360 --> 0:13:19.320 change our lives, our freedoms also, and so that's a 0:13:19.440 --> 0:13:23.000 major issue on which we must work I would say intensively, 0:13:23.080 --> 0:13:24.160 but without fantasies. 0:13:24.760 --> 0:13:26.880 So tell us about what concerns you like, what the 0:13:26.880 --> 0:13:29.640 guardrails in your opinion you think need to be in 0:13:29.720 --> 0:13:32.520 place when it comes to ethical use of AI and 0:13:32.559 --> 0:13:34.320 making sure that AI doesn't get out of control. 0:13:34.760 --> 0:13:37.760 Well, again, I'm not especially still that, but I was 0:13:37.800 --> 0:13:40.200 a U commissioner for five years and before a finance 0:13:40.240 --> 0:13:44.080 minister that means Secretary of Treasury in my country. And 0:13:44.800 --> 0:13:50.280 I see that going on and raising rapidly, and we 0:13:50.320 --> 0:13:53.200 need absolutely to have rules about that. You know, the 0:13:53.280 --> 0:13:57.120 EU is a rules based system. The US is also 0:13:57.200 --> 0:13:59.839 a rules based country, and we need to have fun 0:14:00.240 --> 0:14:02.720 rule of law, absolutely, and we need to establish a 0:14:02.800 --> 0:14:08.319 law so that the ethics limits are fixed and they 0:14:08.320 --> 0:14:12.360 are respected. And again without fantasis, let's not imagine that 0:14:12.520 --> 0:14:16.080 it's a big brother. That's not it. But we know 0:14:16.200 --> 0:14:21.840 that some uses of AI can be dangerous or threatening 0:14:22.000 --> 0:14:26.040 for our freedoms, for our lives too, and this needs 0:14:26.080 --> 0:14:29.360 to be addressed. As I said, we're a rule based system, 0:14:30.320 --> 0:14:32.880 and we are also involved in the global world, global 0:14:32.880 --> 0:14:37.280 economy and global institutions such as G twenty seven, IMF, etc. 0:14:39.520 --> 0:14:42.840 The good place where regulations should intervene is at the 0:14:42.840 --> 0:14:47.160 European level, where United in Europe. And I don't think 0:14:47.160 --> 0:14:50.800 that national regulations are the proper answer you could have. 0:14:51.560 --> 0:14:56.440 I would say a EU regulation plus national applications of 0:14:56.600 --> 0:15:00.320 the regulations, and this is something that we should also 0:15:00.720 --> 0:15:02.040 proposed to the rest of the world. 0:15:02.200 --> 0:15:05.400 Well, that's what I'm going to say. Global cooperation here 0:15:05.400 --> 0:15:06.000 in US. 0:15:07.480 --> 0:15:09.400 Because I'm a member of the Board of Editors of 0:15:09.400 --> 0:15:13.720 the United Nations. I was with the Secretary Journal Antono Guteres, 0:15:14.160 --> 0:15:17.440 and he established a high level working group on AI 0:15:17.960 --> 0:15:20.960 with precisely that purpose to have a global answer to that. 0:15:21.080 --> 0:15:22.880 Are there real fears though, like is it not a 0:15:23.000 --> 0:15:26.400 kin pre if? I may ask akin to the concern 0:15:26.480 --> 0:15:29.920 about just the data collection that has been done by 0:15:30.000 --> 0:15:32.520 so many of the global social media companies, whether it's 0:15:32.520 --> 0:15:35.800 a Google, whether it's a meta privacy concerns. Safe to 0:15:35.800 --> 0:15:38.360 say Europe has really led the way on this in 0:15:38.440 --> 0:15:41.840 terms of oversight. But is this a much bigger threat 0:15:42.040 --> 0:15:44.560 artificial or generative artificial intelligence? 0:15:45.040 --> 0:15:48.680 Probably because it's the next step in technology, but it 0:15:48.760 --> 0:15:51.400 might be as well. New companies and also these ones 0:15:51.920 --> 0:15:56.240 we must watch that. You know, we we again were 0:15:56.280 --> 0:16:01.080 pioneers in regulating that in Europe in order to protect 0:16:01.120 --> 0:16:03.840 personal freedoms. I was a member of the Commission when 0:16:03.880 --> 0:16:08.160 we launched that, and I think that it's I wouldn't 0:16:08.160 --> 0:16:10.280 say an example, but something that the rest of the 0:16:10.320 --> 0:16:14.120 world can look after. And that's why we must think 0:16:14.120 --> 0:16:17.040 about the future of AI with I would say the 0:16:17.080 --> 0:16:17.880 same optic. 0:16:18.480 --> 0:16:23.000 I wonder if there is this concern among entrepreneurs that 0:16:23.520 --> 0:16:27.880 the regulations could prevent companies from growing to their full 0:16:27.880 --> 0:16:30.800 extent in France or the EU versus other countries that 0:16:30.800 --> 0:16:32.200 don't have the same regulations and players. 0:16:32.280 --> 0:16:34.760 Yeah, that's always the debate that we have. But I 0:16:34.800 --> 0:16:37.840 think that we can strike a right balance between competitiveness, 0:16:37.840 --> 0:16:41.680 which is absolutely decisive having growing businesses and AI is 0:16:41.680 --> 0:16:46.560 a fantastic source of revenues and as well job creation 0:16:46.680 --> 0:16:50.480 of ruanan, but also job destruction under changing. 0:16:50.200 --> 0:16:52.440 Of jobs many innovative technology. 0:16:52.680 --> 0:16:56.000 But this is something that is growing rapidly and we 0:16:56.040 --> 0:16:58.520 can see that it will I wouldn't say destroy, but 0:16:58.680 --> 0:17:02.800 change the course. Again an example, I was in the 0:17:02.920 --> 0:17:07.520 un There are translators there the future. They need to 0:17:07.600 --> 0:17:10.400 keep their jobs, but probably it will move with AI, 0:17:10.440 --> 0:17:13.680 it will transform. So the proper world probably is job 0:17:13.800 --> 0:17:17.480 transformation with the I. But again we must trike the 0:17:17.560 --> 0:17:20.960 right balance between competitiveness and the protection of our freedoms, 0:17:21.320 --> 0:17:24.399 because if we don't take care of that, well, we 0:17:24.440 --> 0:17:27.520 could be in a mess a few times. And as 0:17:27.600 --> 0:17:33.400 this technology is fantastically growing and rapidly, well it could 0:17:33.440 --> 0:17:36.480 be faster than one may think. That's why I think 0:17:36.520 --> 0:17:39.120 regulation must be addressed as well. At the global level. 0:17:39.400 --> 0:17:43.640 This is UN or OCD or that kind of institutions. 0:17:43.760 --> 0:17:48.879 At the continental level, the global players in the world, 0:17:49.800 --> 0:17:53.639 the US, Europe, don't they're talking about China, India, et cetera, 0:17:54.119 --> 0:17:59.520 must certainly have their own protection. And then we must 0:17:59.560 --> 0:18:04.560 also declined that at the national level we talked about trance. 0:18:05.000 --> 0:18:06.200 This is something also that we. 0:18:06.200 --> 0:18:08.960 Can address, but not happening yet, not yet. 0:18:08.800 --> 0:18:12.520 But I can see and maybe what happened to mister 0:18:12.560 --> 0:18:17.879 Outmann is an example of that that this research of 0:18:17.920 --> 0:18:25.679 the balance between competitiveness, profitability, raising business and ethics is 0:18:25.680 --> 0:18:30.800 a matter that is important as well for public regulators, 0:18:30.840 --> 0:18:34.120 for governments, but also in companies in business. 0:18:34.280 --> 0:18:36.960 No, well said, right, because we've seen, we've seen what 0:18:37.119 --> 0:18:41.480 happens when really the business side kind of just runs. 0:18:41.560 --> 0:18:44.080 That's kind of the one mission. And I think about 0:18:44.119 --> 0:18:47.760 the data privacy issues which have come so much later, right, 0:18:47.840 --> 0:18:50.880 the oversight as these companies were building out, But maybe 0:18:50.920 --> 0:18:51.880 we just didn't realize. 0:18:51.880 --> 0:18:55.360 But that's something that again Europe was in the lead 0:18:55.520 --> 0:19:00.679 absolutely to develop. But you know this tech giants they 0:19:00.760 --> 0:19:03.720 must also, I mean, of course they must develop, but 0:19:03.840 --> 0:19:08.080 also behave I would say good citizens one another on 0:19:08.119 --> 0:19:11.120 which I concentrated or dedicated a lot of efforts when 0:19:11.119 --> 0:19:15.320 as the EU commissioned, was taxation, global taxation, And you know, 0:19:15.359 --> 0:19:18.840 there is an agreement at the OECD level signed by 0:19:18.880 --> 0:19:24.920 some one hundred and thirty countries which plans to tax properly, 0:19:25.119 --> 0:19:29.560 properly the digital sector, and it's not yet implemented, and 0:19:29.560 --> 0:19:32.240 we must do that, and probably with AI, it's a 0:19:32.359 --> 0:19:34.960 kind of parallel altitude that we must think about. 0:19:35.320 --> 0:19:38.920 That was Pierre Mascovec, first President of Francis Court of Accounts. 0:19:39.080 --> 0:19:40.919 Head on over to our podcast feed for more of 0:19:40.920 --> 0:19:43.760 our conversation with per and for his unique take on 0:19:43.800 --> 0:19:46.160 the health of the EU's second largest economy. 0:19:46.320 --> 0:19:48.639 Still ahead on Bloomberg Business Week, as we continue to 0:19:48.680 --> 0:19:52.080 moll over ethical concerns around AI, let's not forget the 0:19:52.160 --> 0:19:56.080 clear and present danger posed to businesses by cybersecurity, in 0:19:56.119 --> 0:19:59.680 part due to the rapid advancements in artificial intelligence. 0:20:00.040 --> 0:20:03.480 Wendy Thomas, the CEO of publicly traded Secure Works, stops 0:20:03.480 --> 0:20:06.159 by on the other side. This is Bloomberg. 0:20:07.200 --> 0:20:10.760 You're listening to the Bloomberg Business Week podcast. Catch us 0:20:10.800 --> 0:20:14.920 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:20:15.000 --> 0:20:18.320 the Bloomberg Business App, and YouTube. You can also listen 0:20:18.400 --> 0:20:21.520 live on Amazon Alexa from our flagship New York station 0:20:21.960 --> 0:20:24.720 Just say Alexa Play Bloomberg eleven thirty. 0:20:26.520 --> 0:20:29.160 We spoke earlier about the Open Ay drama as well 0:20:29.160 --> 0:20:32.600 as how global governments are approaching artificial intelligence from a 0:20:32.720 --> 0:20:37.320 regulatory perspective. Well, another factor to examine is AI's role 0:20:37.400 --> 0:20:41.640 in cybersecurity. Consider this prediction from tech consulting firm Gartner. 0:20:42.040 --> 0:20:45.640 By twenty twenty five, lack of talent or human failure 0:20:45.720 --> 0:20:50.280 will be responsible for over half of significant cyber incidents. Well, 0:20:50.359 --> 0:20:52.399 we've got a great voice on this issue. 0:20:52.480 --> 0:20:54.600 Our next guest participated with you, Carol in the recent 0:20:54.640 --> 0:20:57.840 nine to eleven Memorial and Museum Summit on Security. A 0:20:57.880 --> 0:21:01.080 conversation with you on cyber threats and understanding the impact 0:21:01.119 --> 0:21:02.600 that they can have on organizations. 0:21:02.640 --> 0:21:04.240 And we do want to point out the museum supported 0:21:04.240 --> 0:21:06.360 by Michael our Bloomberg of course, founder of Bloomberg Outp 0:21:06.440 --> 0:21:09.480 and Bloomberg Philanthropy. Is great to be talking once again 0:21:09.520 --> 0:21:11.960 with Wendy Thomas. She's CEO at Secure Work, She's on 0:21:12.080 --> 0:21:15.320 zoom Set the landscape. It's become kind of part of 0:21:15.359 --> 0:21:18.080 the norm of our world. But talk to us about 0:21:18.280 --> 0:21:21.080 cyber threats, the kind of trends we are seeing, where 0:21:21.119 --> 0:21:23.680 they're coming from, the typical kinds of incidents, if you will, 0:21:23.680 --> 0:21:24.640 and welcome back by the way. 0:21:25.760 --> 0:21:27.960 Look, I mean, the average cost of a breach for 0:21:28.119 --> 0:21:29.960 a business in the US here to date this year 0:21:30.000 --> 0:21:33.879 is nearly ten million dollars apiece, and the global cost 0:21:33.920 --> 0:21:36.800 of cybercrime's expected to be three x what it was 0:21:36.920 --> 0:21:39.760 just a decade ago. We're talking about a transfer of 0:21:39.800 --> 0:21:42.080 wealth in the wrong direction that's probably the greatest in 0:21:42.080 --> 0:21:44.960 our history. So when we look across the landscape, to 0:21:44.960 --> 0:21:48.440 your point, it is happening every single day. We're tracking 0:21:48.440 --> 0:21:51.359 about one hundred and thirty five active threat groups, and 0:21:51.440 --> 0:21:56.399 their activities are bucketed primarily into traditional cybercrime right just 0:21:56.440 --> 0:22:00.600 looking to extract profits, Nation state activity, which is clearly 0:22:00.960 --> 0:22:05.240 up in the wake of geopolitical events, and then activists 0:22:05.440 --> 0:22:09.320 who are concerned about those events and making their voice 0:22:09.359 --> 0:22:13.240 heard through a variety of cyber attacks. So we see 0:22:13.480 --> 0:22:17.320 those activities continuing, and as those three sets of actors 0:22:17.359 --> 0:22:22.399 continue to leverage tried and true techniques scanning for software 0:22:22.480 --> 0:22:26.359 vulnerabilities and exploiting those, stealing credentials to log in and 0:22:26.920 --> 0:22:31.080 parade as someone else, and then sending those fishing emails 0:22:31.080 --> 0:22:34.919 which we've all received around certain topics. You click on 0:22:35.000 --> 0:22:37.800 those and then you've given them access to the castle. 0:22:38.240 --> 0:22:41.680 So we just see the same actors using the same 0:22:41.720 --> 0:22:45.280 attack vectors and continuing to be successful. 0:22:45.480 --> 0:22:51.159 Wendy, is there some sort of geographical profile of these 0:22:51.600 --> 0:22:54.159 different state and non state actors, I mean, is there 0:22:54.160 --> 0:22:55.560 a part of the world that they tend to come 0:22:55.560 --> 0:22:56.840 from or is it truly global? 0:22:58.000 --> 0:23:01.680 Well, we certainly see them seeing talent around the globe, 0:23:01.880 --> 0:23:06.280 but in terms of nations. State actors and cyber crime groups, 0:23:06.800 --> 0:23:10.280 we see those coming out of China and Russia primarily respectively, 0:23:10.680 --> 0:23:14.520 but certainly Aroan, North Korea and others are active on 0:23:14.560 --> 0:23:18.359 the cyber stage. But cyber criminal groups, which are purely 0:23:18.440 --> 0:23:22.400 profit motivated, they do source talent, and unfortunately they use 0:23:22.440 --> 0:23:25.440 some of the same business models that our businesses do. 0:23:25.640 --> 0:23:30.920 Ransomware as a service, where different groups specialize in either 0:23:31.400 --> 0:23:35.399 stealing those credentials, writing the malware, or other pieces of 0:23:35.440 --> 0:23:40.920 the supplied attack chain, they are able to specialize and 0:23:41.400 --> 0:23:45.520 then create business models for easy access for less sophisticated 0:23:45.920 --> 0:23:50.920 criminals to smash and grab and extract those rents, and. 0:23:50.840 --> 0:23:53.520 They're moving more quickly right the time that they breach 0:23:53.560 --> 0:23:56.400 into your network and then the time they do some 0:23:56.520 --> 0:23:59.200 kind of attack. I remember a statistic when we talked. 0:23:59.200 --> 0:24:01.359 It's now I think, I like less than a day, 0:24:01.440 --> 0:24:02.879 less than twenty four hours. 0:24:03.560 --> 0:24:06.520 It is on average this past year. It's from the 0:24:06.560 --> 0:24:09.760 time of intrusion to the time of breach, it's less 0:24:09.760 --> 0:24:12.800 than twenty four hours. It was about five days a 0:24:12.880 --> 0:24:16.280 year ago. And what we see, unfortunately, is that in 0:24:16.359 --> 0:24:20.280 about ten percent of those cases it's less than five hours. 0:24:20.640 --> 0:24:24.919 And so when we talk to CEOs and CIOs about 0:24:24.960 --> 0:24:29.920 protecting their organization, it really is all about time, time 0:24:29.960 --> 0:24:33.760 to detect, time to respond, and that's where the power 0:24:33.920 --> 0:24:38.439 of artificial intelligence really comes into play to turn that 0:24:38.520 --> 0:24:39.800 back against the adversary. 0:24:40.320 --> 0:24:42.040 How does that work when it comes to AI, I 0:24:42.040 --> 0:24:44.640 mean take us through the process here. 0:24:46.440 --> 0:24:48.600 Sure, So when you think about how technology like secure 0:24:48.640 --> 0:24:54.520 works has where we're using artificial intelligence to really model 0:24:54.560 --> 0:24:57.360 and amplify what we see in terms of adversary of 0:24:57.440 --> 0:25:00.560 behavior inside of a network. So it's one to use 0:25:00.600 --> 0:25:04.159 software to detect when they're deploying malware in an organization, 0:25:04.640 --> 0:25:07.720 but it's another thing to know that the CEO's behavior 0:25:07.760 --> 0:25:12.639 online or accessing certain information is unusual or anomalists. AI 0:25:12.720 --> 0:25:16.800 can help you not only understand what's anomalists, but put 0:25:16.840 --> 0:25:19.199 together much more data more quickly to say that it 0:25:19.240 --> 0:25:22.600 is both anomalists and malicious. And the ability to detect 0:25:22.640 --> 0:25:25.960 that quickly, to prioritize that, to raise it up to attention, 0:25:26.600 --> 0:25:29.320 and then for the system to orchestrate the response to 0:25:29.359 --> 0:25:34.159 protect the network is incredibly important. Speed security has to 0:25:34.200 --> 0:25:36.000 move the speed of business, Wendy. 0:25:36.080 --> 0:25:39.199 When you guys have either a new client or existing client, 0:25:39.320 --> 0:25:42.800 I mean tell us are most are a lot of organizations. 0:25:42.800 --> 0:25:45.920 It could be nonprofits as well as publicly held companies 0:25:46.080 --> 0:25:51.760 or small companies, midsized companies are most institutions unprepared, under prepared. 0:25:53.440 --> 0:25:58.439 Unfortunately, most organizations are more vulnerable than they realize, and 0:25:58.520 --> 0:26:00.480 it may be that they've done a great job of 0:26:00.600 --> 0:26:05.160 protecting their own assets, but they are inextricably linked with 0:26:05.440 --> 0:26:10.680 other vendors, other suppliers, and thinking about your security as 0:26:10.840 --> 0:26:14.879 having to secure those who are interoperating with your organization 0:26:15.000 --> 0:26:17.560 and your systems as much as you secure your own 0:26:17.600 --> 0:26:21.879 castle is probably the most important. But the good news 0:26:22.040 --> 0:26:26.640 is that most cyber attacks, especially from cyber criminals, are 0:26:26.760 --> 0:26:31.720 absolutely opportunistic and so just creating some degree of friction 0:26:31.920 --> 0:26:34.360 that makes it more difficult for them to find that 0:26:34.760 --> 0:26:38.360 unlocked back door goes a long way in terms of, 0:26:38.640 --> 0:26:43.359 if not preventing breaches, absolutely mitigating the impact to the business. No. 0:26:43.480 --> 0:26:45.600 I remember when we talked and I came in kind 0:26:45.640 --> 0:26:49.800 of hot and heavy into our studio on the Monday, 0:26:49.920 --> 0:26:52.720 was after sixty Minutes had aired a report. It was 0:26:52.760 --> 0:26:54.800 about the Five Eyes and this was the five security 0:26:54.840 --> 0:27:00.000 service heads or spy chiefs from the US, UK, Canada, Australia, 0:27:00.119 --> 0:27:02.680 New Zealand and they had taken a trip to Silicon 0:27:02.800 --> 0:27:04.960 Valley and they were talking about the greatest threat to 0:27:05.000 --> 0:27:08.040 innovation in the countries of the Five Eyes, and that 0:27:08.240 --> 0:27:12.280 was the threat and specifically Chinese industrial espionage, which I 0:27:12.320 --> 0:27:15.960 think is kind of timely. But this idea of digital attacks, 0:27:16.000 --> 0:27:21.920 cyber attacks about getting into an organization industrial espionage, whether 0:27:21.920 --> 0:27:25.719 it's IP strategy at a company, I mean, is this 0:27:25.800 --> 0:27:27.280 happening more and more. 0:27:28.920 --> 0:27:29.040 So? 0:27:29.240 --> 0:27:32.639 China is absolutely the most active nation state that we 0:27:32.720 --> 0:27:36.560 see from a cyber perspective, and we watched them evolve 0:27:36.600 --> 0:27:39.399 over time. So in the past, those threat groups have 0:27:39.520 --> 0:27:43.000 had a reputation for sort of smash and grab, so 0:27:43.080 --> 0:27:47.080 steal that intellectual property around something that's important of electric 0:27:47.200 --> 0:27:52.000 battery developments or even agricultural innovation and scale, and so 0:27:52.080 --> 0:27:55.239 that emphasis was really about just achieving the objective as 0:27:55.320 --> 0:27:58.679 quickly as possible. But what we've seen more recently is 0:27:58.720 --> 0:28:01.800 that a growing number of Chinese threat groups have demonstrated 0:28:01.800 --> 0:28:06.440 an increasing focus on stealth and operational security and their intrusions, 0:28:06.920 --> 0:28:10.080 and so it is often difficult for organizations to know 0:28:10.200 --> 0:28:12.920 that the Chinese are in fact inside of their networks 0:28:13.280 --> 0:28:17.240 and able to over a sustained period of time, not 0:28:17.280 --> 0:28:21.840 only collect information, but determine what information is most valuable 0:28:21.880 --> 0:28:24.760 and important to them, and do so leaving a minimal 0:28:24.800 --> 0:28:30.280 intrusion footprint by leveraging a setup defense evasion techniques that 0:28:30.880 --> 0:28:34.240 we've seen increasingly in place. 0:28:35.040 --> 0:28:36.800 Hey, one thing, Wendy, I always like to ask people 0:28:36.840 --> 0:28:40.520 in your positions are just how you conduct yourself as 0:28:40.520 --> 0:28:45.200 a normal consumer online. You know what is possible, you 0:28:45.240 --> 0:28:47.840 know what to watch out for, of course, but you 0:28:47.920 --> 0:28:51.760 also probably do online banking and you probably have many, 0:28:51.760 --> 0:28:54.120 many passwords for consumer facing websites. 0:28:54.560 --> 0:28:55.920 How do you do it? 0:28:57.240 --> 0:29:01.720 I do have a little extra vigilize around my online 0:29:01.720 --> 0:29:05.480 activities and persona as you might imagine. First and foremost, 0:29:05.560 --> 0:29:09.960 I do use separate devices for doing things like online banking. 0:29:10.520 --> 0:29:12.800 One of the most important things you can do is 0:29:12.920 --> 0:29:17.880 absolutely difficult and unique passwords for your online activity. I'm 0:29:17.920 --> 0:29:22.000 sure all of you have received emails where your password 0:29:22.040 --> 0:29:26.200 has been stolen, and therefore if it is able to 0:29:26.240 --> 0:29:29.600 access any other application online that you're using, it's really 0:29:29.680 --> 0:29:33.400 important that you have a diversity of passwords and that 0:29:33.440 --> 0:29:37.160 you have secured the location of those passwords. No putting 0:29:37.160 --> 0:29:39.600 those in your phone notes or that type of thing 0:29:39.600 --> 0:29:40.600 when they're accessible. 0:29:40.760 --> 0:29:43.560 That was Wendy Thomas, CEO it Secure Works. Here more 0:29:43.560 --> 0:29:46.600 tips from Wendy and keeping your personal and business data safe. 0:29:46.680 --> 0:29:49.719 On our podcast feed, you're listening to Bloomberg business Week. 0:29:49.880 --> 0:29:52.280 We just heard how companies need to be vigilant about 0:29:52.520 --> 0:29:55.760 having cybersecurity systems in place as part of their IT spend. 0:29:56.080 --> 0:29:58.479 Our next guest weighs in on where those all important 0:29:58.520 --> 0:30:00.760 IT dollars are flowing at the corporate level. 0:30:00.960 --> 0:30:03.520 We speak with Ignite CEO of Venite Jane. When we 0:30:03.560 --> 0:30:05.080 come back, this is Bloomberg. 0:30:05.440 --> 0:30:09.000 You're listening to the Bloomberg Business Week podcast. Catch us 0:30:09.040 --> 0:30:12.400 live weekday afternoons from three to six Eastern Listen on 0:30:12.440 --> 0:30:16.480 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, 0:30:16.760 --> 0:30:19.040 or watch us live on YouTube. 0:30:19.320 --> 0:30:21.040 Well, let's get to our next guest. He's the co 0:30:21.120 --> 0:30:23.880 founder and CEO of Ignite. It's a software company that 0:30:23.920 --> 0:30:27.760 focuses on data security, data governance, collaboration software. The startup 0:30:27.760 --> 0:30:29.600 is rates about one hundred and forty million dollars from 0:30:29.600 --> 0:30:33.520 backers including Golden Sachs, Kleiner Perkins, Google Ventures, and it's 0:30:33.520 --> 0:30:36.000 got an annual runwrate of more than two hundred million dollars, 0:30:36.200 --> 0:30:38.680 growing between twenty five and thirty five percent. 0:30:38.840 --> 0:30:40.840 With us is with us is Vanite Jane. He is 0:30:40.880 --> 0:30:43.560 co founder and CEO of Ignite Vanit. It is so 0:30:43.680 --> 0:30:45.200 good to have you here with us. We want to 0:30:45.240 --> 0:30:48.360 talk about your business and kind of get your thoughts 0:30:48.400 --> 0:30:50.920 on some different things. But what are you guys seeing 0:30:50.960 --> 0:30:52.360 in terms of the business environment. 0:30:53.320 --> 0:30:55.600 You know why you're hearing a lot about how the 0:30:55.640 --> 0:30:59.640 spending climate is very tough for extra deal scrutiny. Every 0:30:59.680 --> 0:31:03.640 dollar spend, especially on subscription services leave aside hardware is 0:31:03.640 --> 0:31:07.320 being questioned. While all that is true, we're kind of 0:31:07.320 --> 0:31:10.120 seeing a dichotomy. There's a class of companies which are 0:31:10.160 --> 0:31:14.480 eking out respectable growth present company included, versus those which 0:31:14.520 --> 0:31:19.160 are not making the earnings or whatever the expected earnings were. 0:31:19.680 --> 0:31:23.200 So I think it is coming down to execution and 0:31:23.240 --> 0:31:26.480 the focus in terms of refining your go to market 0:31:26.640 --> 0:31:31.640 product market mix, and therefore the performance is kind of mixed. 0:31:31.720 --> 0:31:34.040 Some companies are doing very well, a lot of companies 0:31:34.040 --> 0:31:34.640 are struggling. 0:31:34.760 --> 0:31:37.880 Sa viny from your perspective advantage point, how would you 0:31:37.920 --> 0:31:38.880 describe the economy? 0:31:39.520 --> 0:31:42.720 So when I look at our target market, because my 0:31:42.760 --> 0:31:44.320 answer is going to be in the context of the 0:31:44.360 --> 0:31:46.960 market were going after both in terms of geographies and 0:31:47.000 --> 0:31:51.680 certain industries. So we are predominantly North America. Eighty eight 0:31:51.720 --> 0:31:53.920 percent of our revenue comes from North America, twelve percent 0:31:53.960 --> 0:31:57.680 from Europe. And within the US, there are three industries 0:31:57.720 --> 0:32:00.280 we're focused on specifically. One is AEC, which is an 0:32:00.320 --> 0:32:04.480 acronym for architecture entering construction. The second one is biotech 0:32:04.480 --> 0:32:08.320 life sciences. Third one is financial services AC in particular 0:32:08.720 --> 0:32:13.800 is booming. Construction companies, architecture entering firms that we speak with, 0:32:14.320 --> 0:32:16.080 they're saying they have a book of business which is 0:32:16.120 --> 0:32:19.600 filled out till end of next year. But even there, 0:32:19.800 --> 0:32:23.280 you're seeing companies focused in Florida, companies focused in Texas 0:32:23.800 --> 0:32:26.280 they're doing very well. Companies focused in New York or 0:32:26.360 --> 0:32:29.240 let's say my neck of the goods, San Francisco not 0:32:29.360 --> 0:32:33.160 so much. Biotech life sciences is taken up in terms 0:32:33.160 --> 0:32:36.360 of lack of follow funding funding being hard to come by, 0:32:36.880 --> 0:32:39.719 but financial services, on the other hand, is rocketing. So 0:32:40.200 --> 0:32:42.560 it's kind of a mixed back. So from my perspective, 0:32:42.760 --> 0:32:45.520 if something ebbs, something else flows, and we just have 0:32:45.600 --> 0:32:47.200 to figure out how to make our numbers to be 0:32:47.240 --> 0:32:49.280 in that twenty five to thirty person growth range, which 0:32:49.280 --> 0:32:52.160 has been core to our operations for the last eight years. 0:32:52.240 --> 0:32:55.040 The geographical difference is is it just because that's where 0:32:55.480 --> 0:32:58.320 certain markets are located in terms of your three different 0:32:58.360 --> 0:33:01.480 businesses or what's doing well versus not? Or is it 0:33:01.520 --> 0:33:05.840 because more expensive parts of the country to kind of 0:33:05.840 --> 0:33:09.640 live and operate for businesses and that's problematic. I'm just 0:33:09.680 --> 0:33:11.520 curious about those I thought it was interesting you said 0:33:11.560 --> 0:33:13.200 Texas doing. 0:33:12.960 --> 0:33:14.600 Well or is it secut or not? 0:33:14.720 --> 0:33:16.160 Yeah, And that's what I'm trying to get to. Is 0:33:16.160 --> 0:33:17.280 it or is it sector based? 0:33:18.320 --> 0:33:21.320 You know, it's predominantly sector based. But then when you 0:33:21.320 --> 0:33:24.720 look at biotech life sciences, it's concentrated in three areas, right, 0:33:24.760 --> 0:33:28.600 It's San Diego, South, San Francisco, and Boston. But honestly, 0:33:28.600 --> 0:33:31.040 as you said, it kind of boils down to very 0:33:31.040 --> 0:33:34.920 specific industries and within that the size of the company. 0:33:35.320 --> 0:33:38.720 Like when you look at construction engineering, the big gcs, 0:33:38.760 --> 0:33:42.800 general contractors, mid size, small sized, subcons, electrical, mechanical, they're 0:33:42.800 --> 0:33:45.600 all doing very well. But in life sciences the early 0:33:45.640 --> 0:33:48.840 stage they emerging biotech they're struggling, whereas the big guy, 0:33:48.920 --> 0:33:50.920 especially the ones if they are in the obcit drug 0:33:50.960 --> 0:33:53.840 business like you've been hearing about the monor disk Ali 0:33:53.960 --> 0:33:55.560 Lilly business is going. 0:33:56.160 --> 0:33:59.160 That's Vinet Jane, the co founder and CEO of Ignite. 0:33:59.280 --> 0:34:01.959 More from Venie on the Business Week podcast feed, including 0:34:02.000 --> 0:34:05.160 his company's prospects for an IPO, and that wraps up 0:34:05.200 --> 0:34:07.400 the first hour of the weekend edition of Bloomberg Business 0:34:07.440 --> 0:34:10.279 Week from Bloomberg Radio. Ahead in our next hour, it's 0:34:10.320 --> 0:34:13.120 a holiday weekend and we're talking food, or maybe a 0:34:13.239 --> 0:34:16.759 lack thereof. Our Business Week team explores how ozempic may 0:34:16.760 --> 0:34:19.520 have rocked Thanksgiving meals everywhere. Does that mean, Carol, I 0:34:19.560 --> 0:34:23.279 only have to bring one cheesecake rather than two cheesecakes? 0:34:23.320 --> 0:34:25.919 That just might be especially there are folks tapping into 0:34:25.920 --> 0:34:29.520 ozempic at your Thanksgiving dinner table, all right? Plus what's 0:34:29.520 --> 0:34:32.200 on the menu of fast casual dining. Pioneer ron Shake 0:34:32.640 --> 0:34:36.600 chef Emeral Lagassi's son e J carves his own culinary path. 0:34:36.640 --> 0:34:38.920 We'll hear from him as well. And a ninety year 0:34:38.960 --> 0:34:42.719 old coffee maker prepares for the future. This is Bloomberg 0:34:42.719 --> 0:34:45.319 Business Week. I'm Carol Masser and I'm hungry, and. 0:34:45.280 --> 0:34:47.680 I'm Tim Steneveek. Stay with us. Today's top stories and 0:34:47.719 --> 0:34:50.080 global business headlines are coming up right now. 0:34:51.800 --> 0:34:55.359 You're listening to the Bloomberg Business Week podcast. Catch us 0:34:55.400 --> 0:34:59.400 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:34:59.560 --> 0:35:02.520 the bloom Work Business app, and YouTube. You can also 0:35:02.600 --> 0:35:06.080 listen live on Amazon Alexa from our flagship New York station, 0:35:06.520 --> 0:35:09.520 Just Say Alexa, play Bloomberg eleven thirty. 0:35:11.000 --> 0:35:13.160 Plenty ahead in our second hour of this holiday weekend 0:35:13.239 --> 0:35:16.520 edition of Bloomberg Business Week, A very happy Thanksgiving to everybody. 0:35:16.920 --> 0:35:19.080 We've got coming up a conversation with the son of 0:35:19.120 --> 0:35:22.800 renowned chef em roal Lagasi. I'm continuing a family tradition 0:35:22.960 --> 0:35:26.040 in the kitchen, and along those same lines, the patriarch 0:35:26.080 --> 0:35:29.720 of coffee and espresso maker Elei Cafe tells us what's 0:35:29.840 --> 0:35:31.560 next for the ninety year old company. 0:35:31.840 --> 0:35:34.319 Plus o Zapick and other weight loss drugs appear to 0:35:34.320 --> 0:35:37.600 have made a big dent in Thanksgiving food consumption, while 0:35:37.640 --> 0:35:39.920 let's focus on the turkey and trimmings could be an 0:35:39.920 --> 0:35:42.520 ominous sign of what's to come for food companies. 0:35:42.560 --> 0:35:45.399 Man, it's a series of drugs that's just disrupting our 0:35:45.440 --> 0:35:48.080 world in so many ways. All right, First up this hour, 0:35:48.160 --> 0:35:50.480 we welcome back Ron Shake. He is the founder and 0:35:50.520 --> 0:35:53.480 former chairman and CEO of Panera Bread and Albon Pan 0:35:53.920 --> 0:35:57.760 and is today the chairman of Cava, Tate, Life Alive 0:35:57.960 --> 0:35:59.080 and Level ninety nine. 0:35:59.280 --> 0:36:01.800 He recently joined us to discuss his new book, Know 0:36:01.960 --> 0:36:05.319 What Matters, lessons from a lifetime of transformations in his 0:36:05.400 --> 0:36:08.120 path to becoming the father of fast casual dining. 0:36:08.800 --> 0:36:12.640 You know, we sold can Era for seven billion dollars 0:36:12.680 --> 0:36:17.280 and put it in good hands. And we're just applying 0:36:17.320 --> 0:36:21.320 the very same disciplines. We're picking the categories of the future, 0:36:21.400 --> 0:36:24.880 the categories with tailwinds, and then we're helping build the 0:36:24.920 --> 0:36:30.799 dominant brands in those categories. Mediterranean, positive eating, immersive entertainment, 0:36:31.280 --> 0:36:35.879 third wave, bakery, cafe. It's literally the same thing, transformation, 0:36:36.040 --> 0:36:38.440 over and over and over. But but you know, you 0:36:38.719 --> 0:36:42.320 asked me about fast casual. It's hard for me to imagine. 0:36:42.480 --> 0:36:48.680 I can remember nineteen ninety three, ninety four, and ninety 0:36:48.680 --> 0:36:52.160 five and we were beginning to think about what fast 0:36:52.200 --> 0:36:55.200 casual could be. It was simply a reaction to what 0:36:55.320 --> 0:36:58.200 existed at that time, fast food and fine dining, and 0:36:59.000 --> 0:37:03.839 with empathy, we we're looking at We're talking to consumers 0:37:04.280 --> 0:37:07.440 and they were saying I wanted something more, I want, 0:37:07.600 --> 0:37:09.600 you know, And we began to imagine if we could 0:37:09.640 --> 0:37:14.160 deliver real food environments that engage our customers, if we 0:37:14.200 --> 0:37:16.440 could do it with people who cared, we had the 0:37:16.480 --> 0:37:21.040 opportunity to change the currencies of that industry. The currencies 0:37:21.080 --> 0:37:22.880 of fast food were a lot of food for not 0:37:22.960 --> 0:37:25.239 a lot of money, and we began to say what 0:37:25.280 --> 0:37:29.359 we could offer is actually something that elevated people's self 0:37:29.480 --> 0:37:32.480 esteem for just a few dollars. More, what's amazing to 0:37:32.520 --> 0:37:36.600 me is that understanding, this understanding that people wanted something 0:37:36.719 --> 0:37:40.120 better has grown into, as you put it, one hundred 0:37:40.160 --> 0:37:43.560 and ninety billion dollars. And the truth of the matter 0:37:43.680 --> 0:37:47.319 is the number one thing in business is trying to 0:37:47.520 --> 0:37:52.880 understand with empathy what drives consumers, what matters to them, 0:37:53.000 --> 0:37:54.800 What are they going to care about tomorrow. 0:37:55.480 --> 0:38:00.640 Brands, you know, get caught up in politics. Your brands haven't. 0:38:00.719 --> 0:38:03.279 But it's just interesting that it's it's tough running a 0:38:03.360 --> 0:38:06.000 brand or creating a brand and making sure you're tapping 0:38:06.040 --> 0:38:11.960 in to consumers in a way that doesn't alienate right 0:38:12.160 --> 0:38:14.800 or even like whether through advertising or marketing, like, I 0:38:14.840 --> 0:38:16.120 don't know, I don't know how you think about that. 0:38:16.160 --> 0:38:19.480 You know, the companies there's been Disney targeted, Budweiser that 0:38:19.560 --> 0:38:22.360 have been targeted. It's sometimes hard being a company in 0:38:22.360 --> 0:38:23.359 today's space. 0:38:23.320 --> 0:38:26.000 Totally, and I'm glad I'm not a CEO having to 0:38:26.000 --> 0:38:29.719 make those determinations. But having said that, I'll speak to 0:38:29.760 --> 0:38:33.520 it because I have and over years I've taken positions 0:38:34.160 --> 0:38:37.719 and and and here's the point We don't want to 0:38:37.760 --> 0:38:41.160 allow our brands to be the bully pulpit for whatever 0:38:41.200 --> 0:38:46.799 political forces are playing out in society. We represent our shareholders. 0:38:46.840 --> 0:38:48.879 We need to be careful. But what we do want 0:38:48.960 --> 0:38:54.080 to do is take positions relative to issues of humanity, 0:38:54.800 --> 0:38:57.480 and that's very different than political stands. So let me 0:38:57.560 --> 0:39:01.479 let me be clear. You you need to call out 0:39:01.560 --> 0:39:06.600 the atrocity of what Hamas did simultaneously during the George 0:39:06.600 --> 0:39:10.319 Floyd instance, you need to call out the lack of 0:39:10.440 --> 0:39:14.440 humanity in what happened to George Floyd. You have to 0:39:14.480 --> 0:39:20.200 call out that the death of innocent children in Gaza. 0:39:21.040 --> 0:39:27.040 They're all issues of humanity. And my point is at 0:39:27.480 --> 0:39:32.240 the core, we have a responsibility to validate and speak 0:39:32.280 --> 0:39:36.560 to the human needs of our team members and our consumers, 0:39:37.080 --> 0:39:39.960 and in every one of those cases, they are all 0:39:40.200 --> 0:39:45.080 about humanity and calling that out in a real way. Ron. 0:39:45.320 --> 0:39:48.520 It's interesting you've used several times in our interview, which 0:39:48.520 --> 0:39:51.920 has just been a few minutes, the word empathy, and 0:39:51.960 --> 0:39:55.040 you've set humanity several times. And you know, at the 0:39:55.080 --> 0:39:58.680 end of the day, we're talking about fast casual restaurants, 0:39:59.480 --> 0:40:03.200 you know, And I'm just really interested to hear this approach, 0:40:04.080 --> 0:40:06.880 whether it you know, and how it comes to your customers, 0:40:06.880 --> 0:40:09.279 and how it comes to your employees, and how it 0:40:09.320 --> 0:40:12.560 comes to you deciding Okay, what's the next thing that 0:40:12.600 --> 0:40:14.520 a customer is going to want tomorrow? And how is 0:40:14.560 --> 0:40:15.680 empathy tied into that? 0:40:16.160 --> 0:40:18.719 You know, that's that's great, Tim, It's at the very 0:40:18.760 --> 0:40:20.280 core of everything. 0:40:20.600 --> 0:40:20.799 You know. 0:40:20.840 --> 0:40:25.000 We're in a consumer business and the most powerful skill 0:40:25.360 --> 0:40:29.560 in business, in leading these companies is to feel, is 0:40:29.600 --> 0:40:33.399 to feel the needs of our guests. The reason, the 0:40:33.400 --> 0:40:36.480 only reason to exist is to be a better competitive alternative. 0:40:36.840 --> 0:40:39.520 A lot of the discussion we have on these kinds 0:40:39.560 --> 0:40:44.560 of programs are about value creation. But value creation is 0:40:44.600 --> 0:40:47.560 not something I can make. It's a byproduct. It's a 0:40:47.560 --> 0:40:50.480 byproduct of what It's a byproduct of being a better 0:40:50.520 --> 0:40:54.880 competitive alternative. For some consumers. What is a better competitive alternative? 0:40:55.200 --> 0:40:59.080 It means I'm a place that my target customer are 0:40:59.120 --> 0:41:03.640 going to walk past my competitors and choose us. That's 0:41:03.680 --> 0:41:07.360 the essence of value. That's what creates value. So the 0:41:07.480 --> 0:41:12.120 means to that is understanding what drives my consumer, listening 0:41:12.160 --> 0:41:14.719 to them, and that's where empathy comes in, and then 0:41:14.840 --> 0:41:17.279 being able to do it So the mantra in this 0:41:17.320 --> 0:41:22.560 book is tell the truth, figure out or know what matters, 0:41:22.880 --> 0:41:25.600 and then get it done and over and over and over. 0:41:25.760 --> 0:41:26.560 That has worked. 0:41:27.840 --> 0:41:30.000 Ron is it easier to do it in a private 0:41:30.120 --> 0:41:33.719 company privately held company versus a publicly held company, And 0:41:33.760 --> 0:41:34.920 you've seen both sides of. 0:41:34.880 --> 0:41:35.800 That for sure. 0:41:36.239 --> 0:41:38.960 I mean, the less the constituents, the easier. 0:41:38.680 --> 0:41:39.839 It is for all of us. 0:41:40.320 --> 0:41:43.520 Having said that, we just were involved in the IPO 0:41:43.640 --> 0:41:47.880 of Cava. Cava is a superb public company. Deserves to 0:41:47.920 --> 0:41:51.880 be public, but not every company does. Nine of the 0:41:51.920 --> 0:41:54.839 CEOs I talk to who go public live to regret it. 0:41:54.920 --> 0:41:57.520 I don't think that's going to happen in Cava. Cava 0:41:57.680 --> 0:42:02.000 is a powerfully strong brand. It exists in a category 0:42:02.040 --> 0:42:07.800 with powerful tailwinds Mediterranean and Mediterranean is powerful. It's the 0:42:07.880 --> 0:42:10.719 number one diet in the country. It's got bold but 0:42:10.880 --> 0:42:16.399 familiar flavors, flavors that feel safe, and Covet has been 0:42:16.400 --> 0:42:19.759 built to be the dominant brand in that category. It's 0:42:19.800 --> 0:42:22.640 because of that and because it's got so much growth 0:42:22.680 --> 0:42:25.400 ahead of it, which really is what drives the multiple. 0:42:25.719 --> 0:42:29.239 So much growth ahead of it that it deserves to 0:42:29.239 --> 0:42:32.480 be a public company. It's got a management team that 0:42:32.560 --> 0:42:35.600 knows how to run a public company. It's got an 0:42:35.680 --> 0:42:39.680 organization that can run a larger organization. It's been prepared 0:42:39.719 --> 0:42:41.799 to be a public company. But the truth of the 0:42:41.840 --> 0:42:46.000 matter is many companies aren't ripe or right to be 0:42:46.040 --> 0:42:47.440 a public company. 0:42:47.920 --> 0:42:52.160 What's one fast casual chain or restaurant that you wish 0:42:52.160 --> 0:42:53.320 you were a part of, but you're. 0:42:53.160 --> 0:42:58.840 Not Freezing Cane, Chick fil A. They're all great. I honestly, 0:42:58.880 --> 0:43:01.720 I love the concepts where invested in. You know, Tate 0:43:01.960 --> 0:43:07.520 is killing it Life Alive, you know level ninety nine. 0:43:08.080 --> 0:43:09.960 I mean, we wouldn't have put our own money on 0:43:10.000 --> 0:43:11.600 the line. This is our money. 0:43:11.600 --> 0:43:12.640 We don't have LPs. 0:43:13.000 --> 0:43:15.960 We took about two hundred and fifty million and now 0:43:16.000 --> 0:43:18.680 a portfolio worth an excess of a billion dollars. 0:43:19.280 --> 0:43:19.440 Ron. 0:43:19.480 --> 0:43:23.440 What I wonder about is know what matters? Tell us 0:43:23.440 --> 0:43:25.040 about this book and why you wanted to do it, 0:43:25.120 --> 0:43:26.560 and why you wanted to do it now. 0:43:26.960 --> 0:43:30.239 You know, I wanted this book for my kids. I 0:43:30.280 --> 0:43:33.120 wanted this book for all the companies we're investing in. 0:43:33.480 --> 0:43:35.680 There's a way to do it, a better way to 0:43:35.760 --> 0:43:38.280 do it, a way to build a company of quality, 0:43:38.680 --> 0:43:43.120 and build a company that has values. And I also 0:43:43.440 --> 0:43:46.800 very much wanted to write something that broke the genre. 0:43:47.320 --> 0:43:51.360 Most of these books written by former CEOs are you 0:43:51.400 --> 0:43:54.759 know stories. They're saying I did it. You know, I 0:43:54.800 --> 0:43:57.160 did very well. You know, if you do like I do, 0:43:57.280 --> 0:44:00.600 you can do well. That's not the reality. This is 0:44:00.640 --> 0:44:03.440 tough stuff, and I wanted to speak about how do 0:44:03.520 --> 0:44:06.040 you do it, how do you figure out today what's 0:44:06.040 --> 0:44:08.640 going to matter tomorrow, how do you run a large 0:44:08.719 --> 0:44:12.680 public company? Thank you, how do you figure out what 0:44:12.760 --> 0:44:15.799 it means to be an entrepreneur? And then, most importantly, 0:44:15.800 --> 0:44:19.239 what I wanted was to speak about the humanity of 0:44:19.280 --> 0:44:21.839 the experience of running a public company. What it means 0:44:21.840 --> 0:44:24.400 when you have people's lives on the line, when you 0:44:24.400 --> 0:44:27.040 have thousands, hundreds of thousands of people that are counting 0:44:27.080 --> 0:44:30.040 on you to make the right decision, six seven eight 0:44:30.080 --> 0:44:33.839 billion dollars of investor capital on the line, and what 0:44:33.880 --> 0:44:36.760 that feels like sitting on your shoulders when you're taking 0:44:36.800 --> 0:44:40.440 these companies through massive transformation. So that, to me, is 0:44:40.480 --> 0:44:43.640 the really powerful stuff in this book, the lessons and 0:44:43.680 --> 0:44:46.319 the humanity of it, as opposed to simply. 0:44:46.000 --> 0:44:49.560 The stories that's ron shake chairman and lead investor in 0:44:49.640 --> 0:44:53.239 Kaba Tate, Life Alive and Level ninety nine. His new 0:44:53.280 --> 0:44:55.160 book Know What Matters is out now. 0:44:55.360 --> 0:44:57.640 You're listening to Bloomberg Business Week. Coming up, we go 0:44:57.719 --> 0:45:01.040 inside the kitchen with EJ. Lagassi, one of celebrity chef 0:45:01.080 --> 0:45:05.799 Emerald Agassi, who's continuing a decades long tradition of culinary greatness. 0:45:06.000 --> 0:45:08.880 You know, there's a standard that I learned as coming 0:45:08.920 --> 0:45:10.719 up and working in our family restaurants and stuff like 0:45:10.760 --> 0:45:13.040 that and just being around there that I was taught 0:45:13.080 --> 0:45:15.560 to upkeep, and I think the goal is just sort 0:45:15.640 --> 0:45:19.960 of curating that, bringing the restaurants into the next stage 0:45:20.080 --> 0:45:22.319 of their lives. You know, their restaurants that have been 0:45:22.320 --> 0:45:24.399 around for thirty three years. You can't throw a stick 0:45:24.400 --> 0:45:25.840 of dynamite in the room and cover the years and 0:45:25.880 --> 0:45:28.840 just let the place, you know, change totally. 0:45:29.000 --> 0:45:30.160 This is Bloomberg. 0:45:30.520 --> 0:45:34.080 You're listening to the Bloomberg Business Week podcast. Catch us 0:45:34.120 --> 0:45:37.440 live weekday afternoons from three to six Eastern Listen on 0:45:37.520 --> 0:45:41.560 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:45:41.840 --> 0:45:43.520 or watch us live on YouTube. 0:45:44.600 --> 0:45:46.560 Just about a year ago, Tim and I caught up 0:45:46.600 --> 0:45:49.080 with one of the iconic chefs of our time. We're 0:45:49.080 --> 0:45:51.719 talking about Emerald Lagasi. We spoke with him about his 0:45:51.840 --> 0:45:54.680 cooking show on Roku that had just come out, and 0:45:54.719 --> 0:45:58.480 also about sharing his passion with the next generation, specifically 0:45:58.520 --> 0:45:59.440 his son e J. 0:46:00.120 --> 0:46:02.440 And exactly one year to the day from when Emerald 0:46:02.440 --> 0:46:04.680 paid a visit to our New York studios, we had 0:46:04.680 --> 0:46:07.240 the pleasure of catching up with Ej too. He had 0:46:07.320 --> 0:46:10.120 just received the prestigious New Talent of the Year award 0:46:10.160 --> 0:46:13.400 from La List. It's a French ranking and restaurant's guide, 0:46:13.560 --> 0:46:16.279 and yet his attention remains solely on his craft, not 0:46:16.560 --> 0:46:17.759 when it comes to the accolades. 0:46:18.440 --> 0:46:21.239 I have a love for food myself, right that I 0:46:21.280 --> 0:46:24.560 think is independent from my father a bit, you know. 0:46:24.640 --> 0:46:28.200 I think that there's a lot of passion that I 0:46:28.320 --> 0:46:31.760 have for it. That is, that is a naturally occurring passion, 0:46:32.080 --> 0:46:36.160 but it certainly you know, exaggerated the passion having my 0:46:36.239 --> 0:46:41.279 dad be so involved and always willing to show, you know, 0:46:41.520 --> 0:46:46.080 in a sort of educational sense, show a lot about cooking, 0:46:46.160 --> 0:46:48.080 which was which was great. He did it on television 0:46:48.120 --> 0:46:50.839 for many years, showing everybody, you know, how to cook 0:46:50.880 --> 0:46:51.440 and things like that. 0:46:51.600 --> 0:46:53.120 Kind of really one of the first individuals if you 0:46:53.160 --> 0:46:53.960 think about it, I think so. 0:46:54.120 --> 0:46:56.399 Yeah, I think so, And it carried over for shore 0:46:56.480 --> 0:46:57.040 into the house. 0:46:57.080 --> 0:47:01.279 So I want to know how you felt about the 0:47:01.360 --> 0:47:05.040 desire to prove yourself in the kitchen. Yah, when you 0:47:05.160 --> 0:47:08.120 come from a family that is so well known for cooking, 0:47:08.200 --> 0:47:11.200 when somebody who might not know you might say to themselves, well, 0:47:11.200 --> 0:47:13.960 look where he is. He's only there because of who 0:47:13.960 --> 0:47:16.840 his dad is. How do you deal with that criticism? 0:47:16.840 --> 0:47:17.759 How do you push past it? 0:47:17.800 --> 0:47:19.359 Well, you know, it's something that probably comes up quite 0:47:19.360 --> 0:47:20.960 a bit that some people would throw on. 0:47:21.320 --> 0:47:21.480 Look. 0:47:21.520 --> 0:47:23.240 I mean the thing is is, I know I'm comfortable 0:47:23.239 --> 0:47:24.600 in my own skin. I know the fact that I've 0:47:24.600 --> 0:47:28.399 spent hours in the kitchens right and not ours, which 0:47:28.440 --> 0:47:29.719 is what I think the big thing was. I think 0:47:29.719 --> 0:47:32.719 had I stayed in just our kitchens and just been 0:47:32.800 --> 0:47:35.279 at Emeralds or something, that it would very easily be 0:47:36.320 --> 0:47:37.960 who pushed you to work harder? 0:47:38.040 --> 0:47:38.239 You know? 0:47:39.040 --> 0:47:41.960 I remember very early conversation with my father. I mean, 0:47:41.960 --> 0:47:43.920 you know, it's a conversation with me. I'm like thirteen, 0:47:44.000 --> 0:47:46.040 fourteen years old. He's like, you're going to have to 0:47:46.080 --> 0:47:47.920 work twice as hard as anybody in the room because 0:47:47.920 --> 0:47:51.799 of that. And really so that was I think part 0:47:51.840 --> 0:47:53.719 of the whole philosophy of me maybe leaving the nest 0:47:53.719 --> 0:47:56.080 and going and working other places. And I work here 0:47:56.160 --> 0:47:58.280 in New York for a bit, and then in London 0:47:58.280 --> 0:48:01.480 and in Stockholm as well, and so was able to 0:48:01.680 --> 0:48:04.080 see how other people did it, and and and I 0:48:04.080 --> 0:48:07.000 think that that was a big key and being confident 0:48:07.120 --> 0:48:09.879 myself to be able to push past that. And then 0:48:09.880 --> 0:48:12.520 for the you know, for the the comment that comes 0:48:12.560 --> 0:48:15.960 from that, you know, I just invite people to, you know, 0:48:16.000 --> 0:48:18.000 eat at the restaurant. That's really all I can do 0:48:18.040 --> 0:48:18.879 is cook at that point. 0:48:19.080 --> 0:48:20.799 And we want to talk about the restaurant that just 0:48:20.960 --> 0:48:24.719 is reopening after renovation in New Orleans. But you did 0:48:24.760 --> 0:48:25.600 go to culinary school. 0:48:25.640 --> 0:48:26.879 I graduated a. 0:48:26.880 --> 0:48:31.000 Year No, I graduated, uh three years ago, three years ago, 0:48:31.160 --> 0:48:31.920 twenty twenty. 0:48:31.719 --> 0:48:35.120 One one, forgive me, forgive me. And then you were 0:48:35.400 --> 0:48:37.200 what did you learn in that process of kind of 0:48:37.239 --> 0:48:39.000 you said, you like you learned different ways of people 0:48:39.040 --> 0:48:41.319 doing it. But what was that process like as you 0:48:41.360 --> 0:48:41.920 go around the. 0:48:41.920 --> 0:48:43.839 World, Well, you know the process, and did you. 0:48:43.800 --> 0:48:45.440 Have an advantage when people are like, I know that 0:48:45.520 --> 0:48:46.120 last name. 0:48:46.400 --> 0:48:49.640 No, you know, I was an art in Europe. In Europe, 0:48:49.920 --> 0:48:51.440 not really many people knew. I mean here in New 0:48:51.520 --> 0:48:53.440 York they knew and and and some of the restaurants 0:48:53.440 --> 0:48:56.040 that I worked in here it was it was really 0:48:56.120 --> 0:48:58.759 nice because some of them actually kept people from knowing that. 0:48:59.000 --> 0:49:01.480 It ended up coming out eventually anyway. But it was 0:49:01.640 --> 0:49:04.440 like sith, yeah, yeah, yeah, no, I wasn't, you know, 0:49:04.480 --> 0:49:06.799 John smithing my way through the restaurants. But it was 0:49:06.880 --> 0:49:11.040 it was. It was a process of working and learning. 0:49:11.040 --> 0:49:13.520 And it's not just actually like technique or you know, 0:49:14.040 --> 0:49:16.600 recipes or ingredients and things like that. It was how 0:49:16.640 --> 0:49:18.840 people conduct themselves in kitchens. I think that was a 0:49:18.880 --> 0:49:20.480 lot of it too, and how to conduct themselves as 0:49:20.520 --> 0:49:23.840 restaurant tours and as chefs that I think I picked up. 0:49:23.880 --> 0:49:25.879 And you know, it's like learning a language. When you're young. 0:49:26.000 --> 0:49:28.040 You're like a sponge at that point. So yeah, but 0:49:28.080 --> 0:49:30.399 you're learning. I mean, my my, my dad's an older 0:49:30.400 --> 0:49:33.919 gentleman now, and I'm he's not a younger. No, no, no, no, 0:49:34.280 --> 0:49:37.120 what is it like mid sixties. Yeah, he's like sixty four. Yeah, 0:49:37.400 --> 0:49:39.280 you know, and so hey, no, no. 0:49:39.080 --> 0:49:43.280 No, John Tucker's all upset. 0:49:44.000 --> 0:49:45.919 And and and so you know, I mean I think 0:49:45.920 --> 0:49:50.120 that there is there is that just you know, we 0:49:50.200 --> 0:49:52.600 love cooking, and and it was always going to be 0:49:52.640 --> 0:49:54.279 something that I wanted to be able to do. And 0:49:54.560 --> 0:49:56.360 that and whether I did it in the restaurants or 0:49:56.360 --> 0:49:58.239 did it for my family one day or whatever that 0:49:58.280 --> 0:50:00.319 may be, I was always going to learn how to cook, 0:50:00.360 --> 0:50:02.080 being you know, his son and that, and I think 0:50:02.080 --> 0:50:04.080 that he made sure of that, but it ended up, 0:50:04.120 --> 0:50:05.320 you know, working to my advantage. 0:50:05.480 --> 0:50:07.360 How old were you when you went to culinary school? 0:50:07.719 --> 0:50:10.719 I was seventeen, sixteen, seventeen, And how old are you 0:50:10.760 --> 0:50:11.360 know at twenty? 0:50:11.680 --> 0:50:14.759 So you're people listening might not realize how young you are. 0:50:14.840 --> 0:50:16.640 You're sure, yeah, you're I mean, even though you grew 0:50:16.719 --> 0:50:17.680 up in the in the business. 0:50:17.719 --> 0:50:20.160 I mean, you're a baby baby. 0:50:23.960 --> 0:50:27.560 It must also be difficult, though, like separating yourself. I mean, 0:50:27.560 --> 0:50:29.120 you get the same name as your dad, right, the 0:50:29.160 --> 0:50:32.560 exact sement, Yeah, separating yourself in terms of the way 0:50:32.600 --> 0:50:35.120 you think about food, the way you think about cooking. 0:50:35.600 --> 0:50:38.520 How would you say your cooking philosophy is different? Or 0:50:38.520 --> 0:50:41.200 how do you want to distinguish yourself from from your dad? 0:50:41.280 --> 0:50:43.279 You know, I I I was asked this the other 0:50:43.320 --> 0:50:45.200 day by somebody, And I don't know if there's such 0:50:45.239 --> 0:50:48.320 a need to distinguish and be different. You know, I 0:50:48.360 --> 0:50:51.279 think that there's there's a desire to continue on a 0:50:51.360 --> 0:50:55.160 legacy of stuff that's done not necessarily through food television, 0:50:55.160 --> 0:50:58.520 but through the actual restaurants themselves. And you know, there's 0:50:58.520 --> 0:51:01.680 a standard that I learned as coming up and working 0:51:01.680 --> 0:51:03.200 in our family restaurants and stuff like that and just 0:51:03.239 --> 0:51:06.319 being around there that I was taught to upkeep. And 0:51:06.400 --> 0:51:08.719 I think the goal is just sort of curating that, 0:51:08.800 --> 0:51:12.880 bringing the restaurants into the next stage of their lives. 0:51:12.880 --> 0:51:15.040 You know, their restaurants that have been around for thirty 0:51:15.040 --> 0:51:17.040 three years. You can't throw a stick of dynamite in 0:51:17.040 --> 0:51:19.160 the room and cover the years and just let the place, 0:51:19.239 --> 0:51:22.799 you know, change totally. But you know, I don't know 0:51:22.880 --> 0:51:27.160 if I focus enough personally on differentiating myself. I think 0:51:27.280 --> 0:51:30.719 it's a lot more of you know, paying homage well, 0:51:30.760 --> 0:51:34.040 trying to sort of push push things in a new 0:51:34.200 --> 0:51:35.000 contemporary direction. 0:51:35.280 --> 0:51:39.520 Let's talk about the flagship in New Orleans. Emeralds all 0:51:39.520 --> 0:51:43.279 started there what some three decades and counting three decades ago, 0:51:43.400 --> 0:51:46.360 massive renovations, But you say, how you are sticking true 0:51:46.440 --> 0:51:50.000 to your dad and his legacy in terms of food, 0:51:50.040 --> 0:51:52.280 but there are new tasting menus and you are shaking 0:51:52.280 --> 0:51:54.760 it up a bit. Talk to us about the reboot. 0:51:55.400 --> 0:51:57.520 I mean, it's been it's been really great fun. I've 0:51:57.520 --> 0:52:00.160 got a fantastic team at the restaurant. I'd say it's 0:52:00.160 --> 0:52:02.759 probably split fifty to fifty New Orleanians to people that 0:52:02.800 --> 0:52:05.080 are from around the country as well some people that 0:52:05.120 --> 0:52:07.640 I worked with beforehand that have now come and joined us, 0:52:07.640 --> 0:52:11.120 which has been a real pleasure and an honor. But 0:52:11.280 --> 0:52:13.680 you know, I think the fun thing is now Emeralds 0:52:13.680 --> 0:52:15.319 always had a tasting menu. There was the Ala Kart 0:52:15.360 --> 0:52:17.120 menu in the tasting menu. It was always I mean, 0:52:17.400 --> 0:52:20.040 I've heard stories of you know, Chef Charlie Trotter and 0:52:20.040 --> 0:52:21.759 my dad back in the day, like faxing each other 0:52:21.880 --> 0:52:23.920 tasting menus back and forth and things like that. All 0:52:23.960 --> 0:52:27.560 the great stories you hear, and you know, so we've 0:52:27.560 --> 0:52:29.279 always had a tasting menu, and so I think that 0:52:29.320 --> 0:52:31.560 when I decided to do two tasting menus, it's a 0:52:31.560 --> 0:52:33.920 classic menu and a seasonal menu. It's my take on 0:52:34.040 --> 0:52:35.960 sort of like the Greatest Hits album, if you will, 0:52:36.000 --> 0:52:39.600 with the classics menu and then with the seasonal stuff, 0:52:39.600 --> 0:52:43.040 we're really pushing something that my dad was super proud 0:52:43.080 --> 0:52:47.200 of a long time ago, which was the seasonality of 0:52:47.200 --> 0:52:49.520 the produce in Louisiana. You know, we're blessed being in 0:52:49.520 --> 0:52:51.880 the Gulf of Mexico and the Gulf South region to 0:52:51.880 --> 0:52:53.600 be able to have some of the most incredible seafood, 0:52:54.160 --> 0:52:57.200 I think personally in the world. And so it's a 0:52:57.239 --> 0:52:59.719 high utilization of that. It's a lot of local veg 0:53:00.040 --> 0:53:02.880 local produce that's coming from independent farmers and things. And 0:53:04.000 --> 0:53:05.680 you know, my dad did a lot of that, and 0:53:05.719 --> 0:53:07.640 I hear a lot of the stories of him from 0:53:07.760 --> 0:53:10.120 purveyors that are, you know, in their fifties and their 0:53:10.160 --> 0:53:12.520 forties and their sixties that are telling me, hey, I 0:53:12.560 --> 0:53:14.920 remember when your dad came to New Orleans and he 0:53:14.960 --> 0:53:17.080 did this, this, this, and this and this that and 0:53:17.160 --> 0:53:19.840 the other. And I think getting to hear those stories, 0:53:19.840 --> 0:53:23.160 it's quite fun. And you know, I say to myself, 0:53:23.160 --> 0:53:24.279 I said it to my dad the other day, this 0:53:24.480 --> 0:53:26.080 when we opened the restaurant. I said, this must have 0:53:26.120 --> 0:53:28.239 been what it felt like when you when you open 0:53:28.280 --> 0:53:30.480 the restaurant, because it was just like, I mean, knew 0:53:30.560 --> 0:53:32.680 it was just I think, you know, the opening day, 0:53:32.680 --> 0:53:35.080 we didn't open until five pm for dinner service, and 0:53:35.120 --> 0:53:36.680 I think I showed up at five am just because 0:53:36.680 --> 0:53:38.240 I couldn't sleep. I was so excited. 0:53:38.719 --> 0:53:41.440 You know, Well, why do you ask your dad about 0:53:41.480 --> 0:53:42.319 the business? 0:53:43.080 --> 0:53:44.719 I mean I call him from anything from you know, 0:53:44.840 --> 0:53:47.880 shrimp stock tips to to you know, how we're going 0:53:47.920 --> 0:53:49.640 to get labor down this month. It just depends on 0:53:50.080 --> 0:53:52.959 sort of really you know, what's needed at the moment. 0:53:53.080 --> 0:53:55.480 He's a wealth of knowledge. I've understood that since I 0:53:55.600 --> 0:53:58.799 was little. His friends are wealth of knowledge and being 0:53:58.840 --> 0:54:01.319 able to have the relationship. I mean, that is the 0:54:01.400 --> 0:54:03.160 leg up that I have is that I'm able to 0:54:03.560 --> 0:54:06.200 contact people and really ask their advice on things that 0:54:06.200 --> 0:54:08.560 I couldn't even dream of knowing the answer to. So 0:54:09.480 --> 0:54:10.880 that's a great benefit to me. 0:54:11.200 --> 0:54:13.759 That's e J Legasi, chef in Restaurant Tour and of 0:54:13.800 --> 0:54:16.440 course the son of Emerald Legasi. More of our conversation 0:54:16.480 --> 0:54:18.680 with Ej is available on our podcast feed. 0:54:18.840 --> 0:54:20.400 Just twenty years old, isn't that crazy? 0:54:20.520 --> 0:54:20.719 Yeah? 0:54:20.800 --> 0:54:23.640 I mean I don't. Yeah, he's like and he's done 0:54:23.680 --> 0:54:25.640 with culinary school and already has a restaurant. 0:54:26.320 --> 0:54:29.000 Oh my God, all right, still to come on Blueberg 0:54:29.000 --> 0:54:30.840 Business Week. Whether it's a cup of coffee in the 0:54:30.880 --> 0:54:33.560 morning or an espresso after a great meal, one name 0:54:33.600 --> 0:54:35.640 has managed to become synonymous with both. 0:54:36.000 --> 0:54:38.960 Eally, the chairman of the ninety year old family run business, 0:54:39.000 --> 0:54:42.680 breaks down the massive global market. Next, this is Bloomberg. 0:54:43.719 --> 0:54:47.279 You're listening to the Bloomberg Business Week podcast. Catch us 0:54:47.320 --> 0:54:51.360 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:54:51.560 --> 0:54:54.840 the Bloomberg Business app and YouTube. You can also listen 0:54:54.920 --> 0:54:58.040 live on Amazon Alexa from our flagship New York station. 0:54:58.480 --> 0:55:01.280 Just say Alexa to play Bloomberg eleven thirty. 0:55:02.760 --> 0:55:04.680 Well, we've been talking a lot about food on this 0:55:04.719 --> 0:55:07.240 holiday week, and we also have to acknowledge a favorite 0:55:07.239 --> 0:55:10.080 beverage for hundreds of millions of people around the world. No, 0:55:10.239 --> 0:55:13.800 we're not talking about beer or wine. We're talking about coffee, 0:55:14.080 --> 0:55:15.760 and I think it's safe to say. Our next guest 0:55:15.840 --> 0:55:18.840 is an expert on the subject. 0:55:18.320 --> 0:55:21.800 Elie Cafe chairman Andrea Eely, the grandson of Eli, founder 0:55:21.840 --> 0:55:25.359 of Francesco Ely, who started the coffee company ninety years 0:55:25.360 --> 0:55:27.359 ago in Italy. By the way, if you had any 0:55:27.360 --> 0:55:30.440 sort of espresso drink today. You can thank Andrea's grandfather 0:55:30.480 --> 0:55:33.000 because he invented the steam driven coffee maker that we 0:55:33.080 --> 0:55:35.480 now know as espresso machines. 0:55:35.719 --> 0:55:37.640 What was it like growing up with that history. 0:55:38.040 --> 0:55:41.040 Oh, I felt it was coffee was at the center 0:55:41.120 --> 0:55:45.040 of the universe because my father, as I am, was 0:55:45.080 --> 0:55:49.560 a chemist, always thinking and talking about coffee, and he 0:55:49.680 --> 0:55:52.960 started drinking coffee, sipping, let's say, coffee, when I was 0:55:53.000 --> 0:55:57.200 two and a half years old, and since then always coffee, coffee, coffee. 0:55:56.920 --> 0:55:58.160 Cofee, always coffee cofee. 0:55:58.719 --> 0:56:01.520 So there's no it's not too two is not too 0:56:01.560 --> 0:56:02.600 young to drink coffee. 0:56:02.760 --> 0:56:07.320 No, it was just sipping, you know, admiring my mother, 0:56:08.120 --> 0:56:10.960 you know, trying to prepare express with these little tiny 0:56:11.000 --> 0:56:14.920 express machines at home at the time, no capsules that 0:56:14.960 --> 0:56:20.200 were still existing, because we started the very first capsule 0:56:20.280 --> 0:56:24.279 portion fifteen years later than that, in order to you know, 0:56:24.440 --> 0:56:29.719 make it easier to produce coffee everywhere in the restaurants 0:56:29.840 --> 0:56:33.760 or offices or home. But before that it was quite difficult. 0:56:33.800 --> 0:56:36.160 You needed to be a trained barista. But in this 0:56:36.280 --> 0:56:38.200 case you need to have a cumber zomee, a big 0:56:38.239 --> 0:56:41.400 machine at home was very difficult, so and my father 0:56:41.760 --> 0:56:46.279 I nicknamed her the Engineer of Coffee, you know, was 0:56:46.280 --> 0:56:53.279 a precursor to this, you know, expertise in home express 0:56:53.320 --> 0:56:53.800 of brewing. 0:56:54.600 --> 0:56:57.400 So Andrea, how comes is there's so many bad cups 0:56:57.400 --> 0:57:00.000 of coffee out there? What makes a great cup of coffee? 0:57:00.840 --> 0:57:05.520 Well, you need good beans, first of all, and it's 0:57:05.560 --> 0:57:09.799 difficult to access them, just to tell you. In order 0:57:10.200 --> 0:57:14.560 to access to good beans with this pioneer the direct 0:57:15.600 --> 0:57:19.080 in nineteen ninety one, so we did organize ourselves to 0:57:19.120 --> 0:57:22.960 go direct, working hand in hand with coffee growers. And 0:57:23.040 --> 0:57:27.320 the second major step has been creating the University of 0:57:27.400 --> 0:57:30.960 Coffee in order to transfer knowledge to them how to 0:57:31.000 --> 0:57:36.600 elevate their agronomical practices for better sustainable quality. And this 0:57:36.800 --> 0:57:40.520 is the reason why we had this award that we 0:57:40.520 --> 0:57:43.480 are giving tomorrow to the best growers of the nine 0:57:44.040 --> 0:57:48.960 let's say origins where we sous coffee from. But producing 0:57:49.840 --> 0:57:54.880 high quality coffee is not an easy job. So direct Trading, 0:57:55.120 --> 0:57:59.000 University of Coffee Electronics sorting out every single beam. This 0:57:59.160 --> 0:58:03.680 has been one of our patents, sorting every single bean, 0:58:03.760 --> 0:58:07.440 because one defective bean can spoil up to one keylo 0:58:07.440 --> 0:58:10.479 of coffee. You know, this is an amazing. Let's say 0:58:11.240 --> 0:58:13.760 science behind and this is the reason why I'm second 0:58:13.760 --> 0:58:17.400 generation scientist, a chemist for coffee. 0:58:17.440 --> 0:58:18.320 For coffee quality. 0:58:18.360 --> 0:58:19.960 How often do you find a bad being that could 0:58:20.040 --> 0:58:21.800 spoil an entire kilo of coffee? 0:58:21.840 --> 0:58:21.880 Like? 0:58:21.960 --> 0:58:25.160 How how what is the rate of a bad being 0:58:25.200 --> 0:58:25.880 within a badge? 0:58:25.920 --> 0:58:29.720 So at the time we started sorting, it was maybe 0:58:29.800 --> 0:58:34.920 two three percent. Now is less than half a percent. Also, 0:58:34.960 --> 0:58:39.640 because in the meantime we did improve substantially agronomical practices, 0:58:40.880 --> 0:58:44.680 some of these defective beans could be invisible because maybe 0:58:44.720 --> 0:58:48.000 they have some off flavors that you cannot that you 0:58:48.040 --> 0:58:51.520 cannot find, So it can still happen. But if everything 0:58:51.600 --> 0:58:55.240 is well processed, then you can prevent that. But this 0:58:55.400 --> 0:58:57.680 is not the standard in the industry because the coffee 0:58:57.760 --> 0:59:03.080 coffee growers produce for us are specifically produced for us. 0:59:03.280 --> 0:59:08.520 We buy coffee upon our own standards. Coffee rollers like 0:59:08.680 --> 0:59:12.400 to joke about it. Eli coffee doesn't exist because it 0:59:12.440 --> 0:59:15.880 doesn't correspond to any official market standard. And this is 0:59:15.920 --> 0:59:18.800 the reason why we also pay a substantial premium for that, 0:59:19.320 --> 0:59:23.200 because on average we pay thirty percent premium on top 0:59:23.240 --> 0:59:28.200 of the best highest coffee prices in order to motivate 0:59:28.280 --> 0:59:32.040 them and reward them for the extra effort for producing 0:59:32.760 --> 0:59:33.760 superior quality. 0:59:34.480 --> 0:59:37.960 Is it harder to grow better coffee beans? 0:59:38.600 --> 0:59:42.120 It is harder. You need the right people. This is 0:59:42.160 --> 0:59:46.240 why direct sourcing because we need to really get access 0:59:46.320 --> 0:59:51.880 to the people who are, let's say, philosophically seeking the 0:59:51.920 --> 0:59:56.040 best in life. No matter how rich or how educated 0:59:56.080 --> 0:59:58.400 they are, there are some people like that. You need 0:59:58.480 --> 1:00:01.880 to find the perfect ecosystem. Yeah, you know, weather, soil, 1:00:02.200 --> 1:00:04.360 like the turire, they. 1:00:04.400 --> 1:00:06.920 Tie the I feel like I'm talking about wine. 1:00:06.880 --> 1:00:12.000 Exactly exactly the same. You need to find the right cultivar, 1:00:12.120 --> 1:00:15.240 so the right plant, and finally you need those people 1:00:15.280 --> 1:00:19.919 to process coffee in a way which is perfect. So yes, 1:00:20.000 --> 1:00:20.760 it takes quite an. 1:00:20.720 --> 1:00:24.000 Effort and increasingly sustainable, which when you talk about standards. 1:00:24.000 --> 1:00:25.760 I want to talk a little bit about this award 1:00:25.840 --> 1:00:28.600 that is being given at the United Nations, the unesto 1:00:28.760 --> 1:00:33.760 ELI International Coffee Award. It is to the individual, the 1:00:33.840 --> 1:00:38.360 farmer that produce the most sustainable coffee. And what's interesting 1:00:38.400 --> 1:00:40.560 is that we're having this conversation. I've talked with the 1:00:40.560 --> 1:00:43.040 folks over at ab and BEV like they understand the 1:00:43.080 --> 1:00:46.760 importance of water, like their business will not continue unless 1:00:46.800 --> 1:00:50.280 they have great access to water and other things. Obviously 1:00:50.320 --> 1:00:53.440 crops that go into beverages. Same thing for you guys, 1:00:53.520 --> 1:00:56.480 right in terms of the impact on the environment, Yes, 1:00:56.560 --> 1:00:59.440 your businesses, you need to make sure it's done in 1:00:59.440 --> 1:01:00.520 a sustainable so. 1:01:00.840 --> 1:01:04.600 Yes, the award is for the lest sustainable quality. So 1:01:04.840 --> 1:01:09.280 in the company was born ninety years ago upon my 1:01:09.360 --> 1:01:13.680 grandfather dreamed to offer the greatest coffee, and so as 1:01:13.720 --> 1:01:17.000 a strategy we decided to have only one because the 1:01:17.040 --> 1:01:19.560 greatest can be only one, right, and of course the 1:01:19.560 --> 1:01:23.800 greatest need only need must only not only be the 1:01:23.840 --> 1:01:26.840 best in taste, but also the best in how it 1:01:26.920 --> 1:01:30.920 is produced. Actually, as a matter of fact, sustainability and 1:01:31.080 --> 1:01:33.919 quality are two phases of the same coin. You don't 1:01:33.960 --> 1:01:34.720 have the one. 1:01:34.520 --> 1:01:35.360 Without the others. 1:01:35.600 --> 1:01:39.800 So it's not difficult for us to kind of, let's say, 1:01:39.920 --> 1:01:46.760 find find a way. And this award, this blend that 1:01:46.400 --> 1:01:51.600 we produce is made of nine origins because each origin 1:01:51.680 --> 1:01:55.080 has a different aroma profile. It's like having a nice orchestra, 1:01:55.400 --> 1:01:58.760 and the more instruments you have, the richest the orchestra. Okay, 1:01:59.000 --> 1:02:03.200 so nine and the three best growers of each of 1:02:03.240 --> 1:02:07.240 the nine origins are awarded tomorrow at the United Nations, 1:02:07.280 --> 1:02:09.640 so they would know who's the first, second, and third 1:02:10.560 --> 1:02:15.720 and go back home with extreme satisfaction and being completely 1:02:15.720 --> 1:02:21.000 boosted motivation wise, etc. Which is also helping them to 1:02:21.080 --> 1:02:23.000 sell the rest of the coffee. They don't sell too 1:02:23.040 --> 1:02:26.400 early to the rest of the market at premiums. So 1:02:27.640 --> 1:02:30.720 the company ily Cafe has been a knowledge in many 1:02:30.760 --> 1:02:36.120 countries for having contributed to transform the coffee industry in 1:02:36.160 --> 1:02:41.480 a let's say, more sustainable way, and this is we 1:02:41.560 --> 1:02:42.360 are very proud of. 1:02:42.840 --> 1:02:45.960 I want to get to climate change and the impact 1:02:46.040 --> 1:02:49.960 it has had on farmers who grow coffee beings. 1:02:50.960 --> 1:02:55.440 Yeah, coffee growing, coffee agriculture is very very sensitive to 1:02:55.480 --> 1:03:00.000 climate conditions. Do you have narrow conditions to grow coffee 1:03:00.000 --> 1:03:05.080 in terms of temperature and rain? And as a consequence 1:03:05.120 --> 1:03:08.440 of climate change, up to fifty percent of the currently 1:03:08.520 --> 1:03:12.760 suitable land will be gone by twenty fifty. Already there 1:03:12.760 --> 1:03:15.560 are some countries which are gradually exiting the market. There's 1:03:15.560 --> 1:03:19.240 a consequence of climate change, so we have to adapt 1:03:19.560 --> 1:03:23.160 as quickly as possible. And in order to adapt, there 1:03:23.200 --> 1:03:28.520 are three sequential actions to be done. First, improving the 1:03:28.520 --> 1:03:35.200 agronomical practices transitioning regenerative agriculture seems to be the most promising. 1:03:35.200 --> 1:03:41.880 One second most important move is rejuvenating the plantation themselves 1:03:41.920 --> 1:03:47.720 with younger plants, but also plants made of new varieties 1:03:47.760 --> 1:03:52.120 which are more resistant to the adverse conditions caused by 1:03:52.120 --> 1:03:56.480 climate change. And only if these to first initiatives are 1:03:56.560 --> 1:04:00.680 not enough, then you can consider moving by grating the 1:04:00.760 --> 1:04:06.439 plantation too higher latitudes or higher altitudes where you can 1:04:06.520 --> 1:04:08.840 meet at milder climates. 1:04:09.200 --> 1:04:12.840 That's Elie Cafe chairman Andrea Eely. He also told us 1:04:12.880 --> 1:04:15.439 the company is still eyeing an IPO in twenty twenty six, 1:04:15.520 --> 1:04:17.400 so we'll certainly be on the lookout for that. 1:04:17.760 --> 1:04:20.040 You're listening to Bloomberg Business Week. Coming up, we wrap 1:04:20.120 --> 1:04:23.800 up with the sobering reality facing food manufacturers and retailers. 1:04:24.080 --> 1:04:27.800 Millions of Americans are now taking appetite suppressing drugs, and 1:04:27.880 --> 1:04:31.240 that's whang on the bottom line. This is Bloomberg. 1:04:31.400 --> 1:04:34.960 You're listening to the Bloomberg Business Week podcast. Catch us 1:04:35.000 --> 1:04:38.360 live weekday afternoons from three to six Eastern Listen on 1:04:38.400 --> 1:04:42.440 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 1:04:42.720 --> 1:04:44.520 or watch us live on YouTube. 1:04:45.680 --> 1:04:48.720 Winding down on this post Thanksgiving edition of Bloomberg Business Week, 1:04:48.920 --> 1:04:51.520 our magazine team has a store that adds some irony 1:04:51.600 --> 1:04:54.200 to a holiday known for high levels of food consumption. 1:04:54.760 --> 1:04:58.800 Americans are eating less these days, actually a lot less. 1:04:59.040 --> 1:05:02.320 Prescriptions for US of drugs known as GLP one agonists 1:05:02.400 --> 1:05:06.120 such as ozempic and wegovy quadrupled from twenty twenty to 1:05:06.160 --> 1:05:08.760 twenty twenty two, and it looks like there's plenty more 1:05:08.760 --> 1:05:11.640 growth ahead for these pharmaceuticals in the US as drug 1:05:11.720 --> 1:05:15.600 maker search for even more clinical uses. Blueberg News consumer 1:05:15.640 --> 1:05:17.640 reporter Dina Shanker has more. 1:05:17.760 --> 1:05:21.760 Millions of Americans now are taking these drugs. They are 1:05:21.880 --> 1:05:26.240 up three hundred percent. They are just getting really really 1:05:26.280 --> 1:05:27.960 popular for a lot of people. 1:05:28.200 --> 1:05:31.000 It's like off the charts. It's pretty wild. I've seen 1:05:31.040 --> 1:05:33.360 it firsthand with people who are using it or taking it, 1:05:33.400 --> 1:05:36.320 and it really does reduce their appetite in a big, 1:05:36.360 --> 1:05:39.000 big way. They're just not hungry. So I think about 1:05:39.200 --> 1:05:41.520 the impact of that. Talked about some of the specific 1:05:41.560 --> 1:05:42.320 people you talk to. 1:05:42.720 --> 1:05:46.640 So I spoke to four different people that are currently 1:05:47.000 --> 1:05:51.360 taking the drugs, and everyone was really happy with the 1:05:51.840 --> 1:05:55.160 changes in their life and especially what it meant for Thanksgiving. 1:05:55.560 --> 1:05:58.440 One woman I spoke to talked about not just for herself, 1:05:58.480 --> 1:06:01.200 but also her children'een and twenty one years. 1:06:01.080 --> 1:06:04.200 Old, who have been taking these drugs. 1:06:03.760 --> 1:06:07.520 And they have just seen not just great weight loss results, 1:06:07.520 --> 1:06:10.720 which I know everybody wants when they're taking them, but. 1:06:10.920 --> 1:06:13.080 They're also just looking at their food differently. 1:06:13.200 --> 1:06:16.120 They're open to her kids are open to eating things 1:06:16.120 --> 1:06:17.400 that they weren't eating before. 1:06:18.040 --> 1:06:18.600 She was so. 1:06:18.520 --> 1:06:20.680 Excited about how now she gets to add more fruits 1:06:20.680 --> 1:06:24.360 and vegetables to the table. And everyone I spoke to 1:06:24.520 --> 1:06:28.600 is thinking about the holiday differently. Another woman I spoke 1:06:28.640 --> 1:06:31.560 with for Thanksgiving, she said she used to spend weeks 1:06:31.600 --> 1:06:34.280 in advance, you know, looking for the best recipes as 1:06:34.280 --> 1:06:36.600 she got her menu ready. But one of the things 1:06:36.600 --> 1:06:38.960 that these drugs do is they turn off the food noise, 1:06:39.000 --> 1:06:40.880 as it's called, so you're just not thinking about the 1:06:40.920 --> 1:06:43.440 food all the time. So she's like, I'll do She's 1:06:43.480 --> 1:06:45.520 still going to make everything, and she's actually even skipping 1:06:45.520 --> 1:06:48.680 her shot so that she can enjoy yourself a bit more. 1:06:49.040 --> 1:06:51.480 But she's just not thinking about food all the time. 1:06:51.600 --> 1:06:54.520 That's so interesting. I just want to cut you off here. 1:06:54.640 --> 1:06:56.480 Dina what you skipping her shot? What do you mean 1:06:56.520 --> 1:06:58.760 by that? Because these are monthly injections, right. 1:06:58.640 --> 1:07:00.000 Weekly, I believe weekly? 1:07:00.080 --> 1:07:01.520 Okay, skipping this week? 1:07:01.680 --> 1:07:05.280 So she's skipping this week, So that means she's sounds great? 1:07:05.360 --> 1:07:05.600 Is that? 1:07:05.640 --> 1:07:08.160 But is that? I mean, I know you're not a doctor, 1:07:08.320 --> 1:07:10.800 we're not doctors here, but is that? Is that how 1:07:10.880 --> 1:07:11.600 the shot works? 1:07:11.880 --> 1:07:14.120 She thinks it's going to work for her that way? 1:07:14.320 --> 1:07:18.240 I don't know that doctors would advise people to do this. 1:07:18.560 --> 1:07:22.440 But one of the interesting things about these shots and 1:07:22.480 --> 1:07:26.000 about these drugs is that they were initially actually, you know, 1:07:26.080 --> 1:07:28.440 not for weight loss. They were for diabetes, and so 1:07:29.000 --> 1:07:31.880 a lot of the uses of them are off label, 1:07:32.000 --> 1:07:34.480 so because they're being used as a weight loss drug 1:07:34.720 --> 1:07:38.800 instead of as a as a diabetes drug. So I 1:07:38.840 --> 1:07:42.160 think what we're seeing both with the people using them 1:07:42.360 --> 1:07:45.600 and at the clinical level is a lot of they're 1:07:45.640 --> 1:07:48.080 still studying it. They're still trying to find out all 1:07:48.120 --> 1:07:51.480 the different things that these drugs can do. So for 1:07:51.560 --> 1:07:56.640 some people they have just been incredible weight loss miracle drugs, 1:07:56.680 --> 1:07:59.680 as they describe them. But I should add that one 1:07:59.680 --> 1:08:03.480 of the health professionals I spoke with, a pharmacist was 1:08:03.720 --> 1:08:06.400 really quick to make sure that we didn't discount the 1:08:06.440 --> 1:08:08.440 work that the patients are doing. That it's not just 1:08:08.480 --> 1:08:11.480 like you take your injection and you're done and you 1:08:11.480 --> 1:08:13.640 never think about food again and the pounds start melting off. 1:08:13.880 --> 1:08:16.000 She was saying how it's really important that people are 1:08:16.080 --> 1:08:20.080 learning how to manage their serving sizes. They're going for 1:08:21.000 --> 1:08:25.040 that walk after dinner, they're sticking it out through. Sometimes 1:08:25.040 --> 1:08:29.719 people experience really bad side effects like nausea, and they 1:08:29.880 --> 1:08:33.280 are really taking advantage of the benefits of the drug, 1:08:33.360 --> 1:08:35.280 but they're not completely relying on the drug. 1:08:35.439 --> 1:08:38.400 That was Bloomberg News consumer reporter Dina Shanker. Check out 1:08:38.439 --> 1:08:40.640 her story online at Bloomberg dot com or on the 1:08:40.680 --> 1:08:41.599 Bloomberg terminal. 1:08:41.640 --> 1:08:44.519 And that wraps up this weekend holiday edition a Bloomberg 1:08:44.520 --> 1:08:46.840 Business Week from Bloomberg Radio. Thank you so much for 1:08:46.920 --> 1:08:47.439 joining us. 1:08:47.600 --> 1:08:49.920 Be sure to tune into Bloomberg Business Week Monday through 1:08:49.960 --> 1:08:52.519 Friday starting at three pm Wall Street Time on Bloomberg 1:08:52.640 --> 1:08:55.120 Radio and on serious XM Channel one twenty one. 1:08:55.200 --> 1:08:57.600 You can also watch our daily broadcast on YouTube. Just 1:08:57.640 --> 1:09:01.040 search Bloomberg Global News for some account on Bloomberg originals 1:09:01.120 --> 1:09:04.840 available at Bloomberg dot Com, Slash Originals, and streaming platforms 1:09:04.840 --> 1:09:08.759 such as Roku, Amazon, fireTV, Samsung TV Plus and more. 1:09:08.960 --> 1:09:12.160 Find our Bloomberg BusinessWeek podcast at Bloomberg dot com, Apple, 1:09:12.280 --> 1:09:14.960 or wherever you get your podcasts, and the latest edition 1:09:15.000 --> 1:09:17.679 of the magazine is available on newsstands now at Bloomberg 1:09:17.720 --> 1:09:20.479 dot com and always on the Bloomberg Terminal. I'm Tim 1:09:20.520 --> 1:09:21.360 Steneveek Back to. 1:09:21.360 --> 1:09:23.960 The Pie we Go. I'm Carol Masser. Have a good 1:09:23.960 --> 1:09:26.720 and safe rest of your holiday weekend. Stay with us. 1:09:26.720 --> 1:09:29.639 Today's top stories and global business headlines are coming up 1:09:29.800 --> 1:09:30.320 right now. 1:09:31.200 --> 1:09:35.880 This is the Bloomberg BusinessWeek Podcast. Avail little on Apple, Spotify, 1:09:36.000 --> 1:09:39.719 and anywhere else you get your podcasts. Listen live weekday 1:09:39.760 --> 1:09:43.360 afternoons from three to six Eastern on Bloomberg dot com, 1:09:43.439 --> 1:09:46.719 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:09:46.800 --> 1:09:49.760 You can also watch us live every weekday on YouTube 1:09:49.960 --> 1:09:51.960 and always on the Bloomberg Terminal.