WEBVTT - Apple Unveils New AI Tools, Including ChatGPT Tie-Up 0:00:02.960 --> 0:00:10.720 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.760 --> 0:00:13.960 Wait inside from the reporters and editors who bring you 0:00:14.040 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.440 --> 0:00:22.880 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:26.239 and Tim Stenebeck from Bloomberg Radio. 0:00:28.080 --> 0:00:30.440 Well, the moment of truth for Apple's AI plans and 0:00:30.480 --> 0:00:33.080 for the four hundred and seventy one billion dollar rally 0:00:33.080 --> 0:00:35.640 that has rescued the stock from adul drums. We've talked 0:00:35.640 --> 0:00:39.080 about AI being a central focus of the ww DC 0:00:39.280 --> 0:00:41.720 kicked off at one pm Wall Street time today. We've 0:00:41.720 --> 0:00:44.480 been giving you updates throughout the day on that partnership 0:00:44.479 --> 0:00:47.559 with Open Ai and everything that Apple has thus far announced. 0:00:47.560 --> 0:00:49.319 We'll continue to bring those updates as we do get 0:00:49.360 --> 0:00:52.080 them throughout the week. But first, let's talk about the 0:00:52.120 --> 0:00:55.560 stock reaction. Because Ryan Lestelica is Bloomberg News Equities reporter. 0:00:55.800 --> 0:00:58.800 He writes all about what's at stake with Apple and AI. 0:00:59.240 --> 0:01:02.040 Shares of Apple down by one point eight percent right now. 0:01:02.120 --> 0:01:06.160 Ryan joins us from the Home Bureau in Chicago. Ryan, 0:01:06.240 --> 0:01:09.640 give us what's at stake right now for Apple? Given 0:01:09.680 --> 0:01:13.160 that you know, yes, it's significantly underperformed the s andvvatpunder 0:01:13.160 --> 0:01:15.840 in the Nasdaq one hundred right now, but we've seen 0:01:15.880 --> 0:01:18.679 a rally over the last month that has investors looking 0:01:18.720 --> 0:01:19.520 pretty optimistic. 0:01:20.720 --> 0:01:23.040 Yeah. Absolutely. So the context I would say is that 0:01:23.120 --> 0:01:26.200 Apple is really facing two key concerns. One was that 0:01:26.240 --> 0:01:28.480 it just wasn't growing all that much. I think five 0:01:28.520 --> 0:01:31.319 in the past six quarters, it'saw negative revenue growth, and 0:01:31.360 --> 0:01:33.479 a lot of the other names bintech have been showing 0:01:33.800 --> 0:01:36.200 pretty robust growth, and a lot of that is due 0:01:36.200 --> 0:01:38.520 to AI, which is an area where it felt like 0:01:38.920 --> 0:01:41.119 Apple was a little bit behind the curve. It didn't 0:01:41.120 --> 0:01:44.880 really have a very articulated AI strategy. People were really 0:01:44.920 --> 0:01:47.200 hoping that today would really address both of those, that 0:01:47.240 --> 0:01:49.640 it would announce all these kinds of new AI features, 0:01:50.120 --> 0:01:52.720 especially for the iPhone, and then that would spur people 0:01:52.760 --> 0:01:55.920 to begin upgrading their phones and that would spur you know, 0:01:55.960 --> 0:01:58.160 a new leg of revenue growth for the stock. So 0:01:58.400 --> 0:02:00.520 it did come out wasn't anything I think that was 0:02:00.800 --> 0:02:03.080 too surprising as far as the new features, as far 0:02:03.120 --> 0:02:05.920 as the new you know, applications and the way that 0:02:06.000 --> 0:02:09.279 it all is being integrated across the you know, the ecosystem. 0:02:09.320 --> 0:02:11.000 But I think right now we're seeing a little bit 0:02:11.000 --> 0:02:14.079 of a pullback. Not incredibly dramatic given how much it's 0:02:14.080 --> 0:02:16.080 been coming up ahead of it, but it does seem like, 0:02:16.560 --> 0:02:17.920 you know, as far as the drecting, will this be 0:02:18.000 --> 0:02:20.280 enough for people to you know, trade in and you know, 0:02:20.360 --> 0:02:22.760 spend more than thousand dollars in a new phone. 0:02:22.880 --> 0:02:23.480 That's what I wanted. 0:02:23.639 --> 0:02:25.120 We wanted to get with you, and like we've been 0:02:25.120 --> 0:02:28.840 getting into some of the fundamentals off of the event 0:02:29.080 --> 0:02:31.960 on the West Coast around Apple. But Ryan, when you 0:02:32.000 --> 0:02:33.720 look at the share price in the bounce back that 0:02:33.720 --> 0:02:36.799 we have had, as we note this four hundred and 0:02:36.880 --> 0:02:40.280 seventy one billion dollar rally off of what the lows 0:02:41.080 --> 0:02:43.440 you know, that we've seen in Apple. You know that's 0:02:43.600 --> 0:02:45.280 even though the stock is a little change, it's had 0:02:45.360 --> 0:02:47.960 quite a bounce back. How much of or what is 0:02:48.000 --> 0:02:52.040 that enthusiasm or that bounce back reflect And as you said, 0:02:52.160 --> 0:02:54.359 Apple shares a little bit lower, but maybe not such 0:02:54.360 --> 0:02:56.360 a big deal considering the bounce back we've had. 0:02:57.400 --> 0:02:59.120 Yeah, So one thing I would say is that early 0:02:59.200 --> 0:03:01.560 in May it had its latest quarterly report and it's 0:03:01.600 --> 0:03:04.720 pretty encouraging. The forecast is seen as pretty encouraging, pointing 0:03:04.720 --> 0:03:07.520 to a return to growth kind of ease some concerns 0:03:07.560 --> 0:03:10.440 about the date of sales out of China, which is 0:03:10.480 --> 0:03:13.400 an incredibly important market for them, and there has been 0:03:13.400 --> 0:03:15.360 a lot of optimism about AI. And of course in 0:03:15.440 --> 0:03:18.240 that quarterly report, Apple did announce the largest stock buyback 0:03:18.280 --> 0:03:20.520 program in US history, one hundred and ten billion. I 0:03:20.520 --> 0:03:23.040 think that is helping to put a flaw under the 0:03:23.040 --> 0:03:25.799 stock if nothing else, you know, and certainly if you 0:03:25.919 --> 0:03:28.840 look at Apple on evaluation basis, especially with respect to 0:03:28.840 --> 0:03:30.799 the growth, that might screen as you know, somewhat pricey. 0:03:30.840 --> 0:03:32.160 But if you look at it as far as all 0:03:32.160 --> 0:03:35.120 the quality characteristics with respect to the buyback, with respect 0:03:35.120 --> 0:03:37.920 to cash flow, profitability, you know, all that kind of 0:03:37.960 --> 0:03:40.040 stuff that does screen is pretty you know, screen is 0:03:40.040 --> 0:03:41.880 pretty strong on those So I think that's also been 0:03:42.080 --> 0:03:43.720 you know, there is sort of a view that apples 0:03:43.680 --> 0:03:45.760 is safety and maybe it's not as pronounced as it 0:03:45.840 --> 0:03:49.160 was in past times. Growth is a little bit more robust, 0:03:49.240 --> 0:03:50.560 but certainly it's it's part of it. 0:03:50.440 --> 0:03:52.520 Here, all right. Apple shares down one point eighty percent. 0:03:52.600 --> 0:03:56.720 Ryan lestealka Bloomberg News equities reporter, joining us there in Chicago. 0:03:56.880 --> 0:03:57.840 We're going to stay with Apple. 0:03:58.040 --> 0:04:00.760 Let's bring in a Bloomberg News Chief Technology course, Mark German, 0:04:00.800 --> 0:04:03.480 who joins us from LA Mark. Tim Cook has wrapped 0:04:03.560 --> 0:04:06.920 up his comments. They began. The WWDC kicked off I 0:04:06.920 --> 0:04:09.240 should say, at one pm Wall Street time, so it's 0:04:09.240 --> 0:04:12.400 been a couple hours. Biggest headlines so far, give them 0:04:12.440 --> 0:04:12.720 to us. 0:04:14.080 --> 0:04:17.120 The biggest headline is probably the open AI partnership that 0:04:17.160 --> 0:04:18.760 we have been talking about for several months. 0:04:18.760 --> 0:04:21.120 I knew that because you told us about it, Mark, yes, 0:04:21.160 --> 0:04:21.719 ahead of time. 0:04:21.880 --> 0:04:23.719 That was probably the highlight. 0:04:24.160 --> 0:04:27.240 But obviously that's part of the larger AI strategy, which 0:04:27.279 --> 0:04:28.400 is Apple Intelligence. 0:04:28.640 --> 0:04:30.000 As we also talked about now. 0:04:30.200 --> 0:04:32.919 The way they explain Apple Intelligence is AI for the 0:04:32.920 --> 0:04:35.400 rest of us, right. That harkens back to the old 0:04:35.440 --> 0:04:39.320 Apple school, old school Apple line, which is a computer 0:04:39.600 --> 0:04:42.520 for the rest of us, right, And so this is 0:04:42.560 --> 0:04:45.919 a more friendly approach to AI. This is AI integrated 0:04:45.960 --> 0:04:51.800 deeply inside of applications, things like summarizing notifications, writing tools, 0:04:52.240 --> 0:04:56.200 image editing, much improved version of Siri. So the AI 0:04:56.400 --> 0:04:58.240 was the focus of the event. The other stuff sort 0:04:58.279 --> 0:05:01.359 of took you know, was pushed onto the back burner. 0:05:01.440 --> 0:05:04.520 They started off by talking about more customizable home screen 0:05:04.760 --> 0:05:08.160 on the iPhone and iPad, some new gesture controls to 0:05:08.200 --> 0:05:10.960 operate the vision pro But of course the highlights were, 0:05:11.120 --> 0:05:15.480 of course the experience coming for AI to the iPhone, 0:05:15.560 --> 0:05:17.440 the iPad of the Mac and so it's going to 0:05:17.440 --> 0:05:19.680 be quite significant for Apple. It's very clear to me 0:05:19.760 --> 0:05:22.080 that they're starting off pretty slow here. They're going to 0:05:22.120 --> 0:05:22.960 expand over time. 0:05:23.480 --> 0:05:26.080 A couple questions, so AI for the rest of us 0:05:26.160 --> 0:05:27.440 marketing our innovation in. 0:05:27.400 --> 0:05:31.159 Your view, Well, it's marketing based on what they have 0:05:31.200 --> 0:05:32.239 available to them. 0:05:32.440 --> 0:05:32.600 Right. 0:05:32.680 --> 0:05:34.400 This is as far as they could take their AI 0:05:34.440 --> 0:05:36.560 feature set for the time being, and so they're going 0:05:36.640 --> 0:05:38.920 to market around that. Their AI is not as advanced 0:05:38.960 --> 0:05:40.640 as what open ai is able to offer at this 0:05:40.680 --> 0:05:43.479 point or Google Gemini. That's why they're partnering with open 0:05:43.520 --> 0:05:47.640 Ai on integrating chat GPT into a chatbot inside of 0:05:47.680 --> 0:05:50.320 the iPhone experience. That's why they're still talking to Google 0:05:50.320 --> 0:05:53.680 Gemini and Anthropic about integrating their large language models into 0:05:53.680 --> 0:05:54.479 the iPhone as well. 0:05:54.600 --> 0:05:56.440 Do they go ahead, Carol, Well, the one thing I 0:05:56.480 --> 0:05:58.080 was going to say is, I'm a real observer. It's 0:05:58.080 --> 0:06:00.280 just kind of who I am as a personality slow 0:06:00.279 --> 0:06:03.360 and steady sometimes, but slow and steady sometimes wins the race. 0:06:03.440 --> 0:06:05.640 And do you feel that way with Apple, that you're 0:06:05.680 --> 0:06:08.159 okay that they're kind of slow going? I mean right, 0:06:08.200 --> 0:06:10.560 We often remind everybody they weren't the first out with 0:06:10.560 --> 0:06:13.279 a smartphone, but look at where they are today. So 0:06:13.640 --> 0:06:16.640 how you understand this company, how it fits into the 0:06:16.680 --> 0:06:20.679 broader kind of bigger tech world, if you will, slow 0:06:20.680 --> 0:06:25.040 and steady okay for you. 0:06:23.400 --> 0:06:24.520 Carol, here's the difference. 0:06:24.640 --> 0:06:27.320 You're right that Apple's typically not the first to a 0:06:27.320 --> 0:06:31.160 new product category, but they're also always the best. The iPhone, 0:06:31.560 --> 0:06:34.320 it wasn't the first smartphone, but it blew everything before 0:06:34.320 --> 0:06:36.240 it out of the water. You saw the same thing 0:06:36.279 --> 0:06:39.360 with the iPod before it, the iPad after the iPhone. 0:06:39.800 --> 0:06:41.720 You can even say the same thing about AirPods for 0:06:41.760 --> 0:06:44.560 earbuds and the Apple Watch for smart watches. You saw 0:06:44.720 --> 0:06:48.479 nothing today that's better than the competition. You saw nothing 0:06:48.520 --> 0:06:52.839 today that's different from the competition except marketing and a 0:06:52.880 --> 0:06:56.920 focus on privacy. Right, So that's the difference here. They're 0:06:56.960 --> 0:06:59.400 not the first, but they're also not the best, and 0:06:59.440 --> 0:07:02.919 they're not the most advance. They're here extremely late, and 0:07:02.960 --> 0:07:05.720 they showed up to the party without a gift, right, 0:07:05.880 --> 0:07:07.599 they didn't bring much new to the table here. 0:07:07.640 --> 0:07:10.000 Who's doing what they want to be doing? 0:07:10.040 --> 0:07:10.280 Mark? 0:07:10.280 --> 0:07:11.240 But better right now? 0:07:12.240 --> 0:07:13.800 Well, Google Open Ai. 0:07:14.840 --> 0:07:17.760 Samsung's AI features were pretty impressive with the S twenty four, 0:07:18.200 --> 0:07:20.000 and Apple's are pretty much in line with that. 0:07:20.600 --> 0:07:20.840 Now. 0:07:20.960 --> 0:07:23.160 The interesting part is they've really teased that this is 0:07:23.160 --> 0:07:23.960 going to improve. 0:07:23.720 --> 0:07:25.360 And get better over the next year or so. 0:07:25.520 --> 0:07:27.600 We could be having this conversation one you're from now 0:07:27.760 --> 0:07:30.200 in the series features and the AI functionality will be 0:07:30.200 --> 0:07:30.880 so much better than. 0:07:30.880 --> 0:07:31.960 This today right now. 0:07:32.000 --> 0:07:34.960 This is also only starting in US English, so there's 0:07:35.000 --> 0:07:37.360 a lot of market improvements that are going to need 0:07:37.400 --> 0:07:38.760 to make to roll this out as well. 0:07:38.880 --> 0:07:41.680 Hey, Mark gil Lorio over at d Davidson made the 0:07:41.720 --> 0:07:44.040 point to us a little earlier about the and he 0:07:44.080 --> 0:07:47.480 cited your work over the last few weeks about the 0:07:47.560 --> 0:07:51.160 iPhone fifteen pro supporting the new features, and he said 0:07:51.160 --> 0:07:54.000 this was before it was announced a little over an 0:07:54.000 --> 0:07:57.280 hour ago. Had this could be like a moment with 0:07:57.360 --> 0:08:00.680 the iPhone, the five G iPhone, and I think it 0:08:00.720 --> 0:08:03.200 was was it the twelve mark the first iPhone that 0:08:03.560 --> 0:08:06.840 did five G A sort of the precedent for a 0:08:06.880 --> 0:08:09.000 big upgrade cycle as a result of a piece of 0:08:09.040 --> 0:08:12.800 hardware that is not backwards compatible, software that's not backwards 0:08:12.800 --> 0:08:16.080 compatible with older hardware. Do did we see anything today 0:08:16.560 --> 0:08:18.280 that prompts people to go out and buy a new phone, 0:08:18.280 --> 0:08:20.240 even if they have a fourteen or a not a 0:08:20.280 --> 0:08:22.840 fifteen Pro, that will get them to buy new hardware. 0:08:23.480 --> 0:08:25.840 Well, I think when they announced the iPhone sixteen, clearly 0:08:25.880 --> 0:08:28.240 their central marketing point on the devices this fall is 0:08:28.280 --> 0:08:29.440 going to be the AI features. 0:08:29.520 --> 0:08:31.200 Right, The AI features. 0:08:30.880 --> 0:08:33.320 Are going to come out alongside the iPhone sixteen. So 0:08:33.360 --> 0:08:35.480 if you want these AI features, you're going to have 0:08:35.520 --> 0:08:37.800 to get the sixteen unless you have a fifteen Pro already. 0:08:38.040 --> 0:08:40.240 So I definitely think that this is going to be 0:08:40.400 --> 0:08:43.080 a huge sales point and it's going to spurn upgrade cycle. 0:08:43.120 --> 0:08:43.480 For sure. 0:08:43.520 --> 0:08:45.360 People are going to want the AI features. 0:08:46.679 --> 0:08:49.480 It's interesting, like I'm looking at our live blog and 0:08:49.800 --> 0:08:52.959 just you know, we take after months of mystery over 0:08:52.960 --> 0:08:55.480 Apple's AI strategy, took a step taken by nearly every 0:08:55.480 --> 0:08:58.320 other tech company integrates some open AI models into your 0:08:58.320 --> 0:09:01.000 products for features like text generation. To me, it just 0:09:01.120 --> 0:09:03.280 is like all right, everybody you wanted think AI. You 0:09:03.360 --> 0:09:06.360 got to keep thinking about open AI like that is 0:09:06.400 --> 0:09:09.439 the leader. That's the company that everybody wants to kind 0:09:09.440 --> 0:09:12.920 of play around with. I don't know, like, as you 0:09:12.960 --> 0:09:18.400 look at AI and Apple going forward, is it something 0:09:18.440 --> 0:09:20.440 that they can innovate on their own or they've got 0:09:20.440 --> 0:09:22.599 to partner along with others at this point. 0:09:23.040 --> 0:09:24.560 For now, they have to partner with others. 0:09:24.720 --> 0:09:27.160 The hope internally is within a few years they could 0:09:27.280 --> 0:09:30.679 you do this entirely on their own. I anticipate that 0:09:30.720 --> 0:09:33.439 happening eventually. They need to get their large language models 0:09:33.480 --> 0:09:35.680 up the snuff. The future of the company and the 0:09:35.679 --> 0:09:38.280 future of their hardware really depends on it. So I 0:09:38.320 --> 0:09:41.480 certainly expect them to upgrade their AI capabilities over time 0:09:41.720 --> 0:09:43.359 and move away from these partnerships. 0:09:43.679 --> 0:09:45.520 There's more stuff this week. As we were just talking 0:09:45.520 --> 0:09:47.679 with our scarlet food and she's like, you know, it's 0:09:47.720 --> 0:09:49.800 a whole week long thing. Is there anything more that 0:09:49.880 --> 0:09:52.040 you are focusing on? There's more to come or this 0:09:52.160 --> 0:09:53.760 was really kind of the big deal. 0:09:54.720 --> 0:09:57.520 Well, it is a whole week thing, right, But the 0:09:57.520 --> 0:09:59.960 rest of the week is labs and classes for developers 0:10:00.080 --> 0:10:03.079 integrate the new features and APIs into their application. 0:10:03.240 --> 0:10:04.600 So there's no more news coming. 0:10:04.960 --> 0:10:07.520 Okay, So in terms of the news that that already came, 0:10:07.559 --> 0:10:09.800 what isn't again? This is mark this is the Worldwide 0:10:09.800 --> 0:10:12.400 Developers Conference. I mean, I think it's fair to say, typically, 0:10:12.559 --> 0:10:15.000 with maybe the exception of last year when they unveiled 0:10:15.000 --> 0:10:19.400 the Vision pro, typically this is really geared toward developers 0:10:19.720 --> 0:10:22.640 and it doesn't necessarily make a ton of news outside 0:10:22.679 --> 0:10:25.960 of the developer world. What do you think we'll see 0:10:25.960 --> 0:10:29.320 from developers who are going to, you know, take advantage 0:10:29.360 --> 0:10:32.800 of what Apple's offering in terms of tools to them. 0:10:33.120 --> 0:10:34.760 Well, I think developers are going to be curious how 0:10:34.800 --> 0:10:37.600 they can integrate AI into their applications with sort of 0:10:37.600 --> 0:10:40.040 frameworks are going to be available to sort of aiify 0:10:40.160 --> 0:10:41.720 their apps? Will they be able to use the new 0:10:41.720 --> 0:10:43.520 writing tools, will they be able to use the new 0:10:43.559 --> 0:10:44.720 image generation features? 0:10:44.800 --> 0:10:45.000 Right? 0:10:45.280 --> 0:10:47.520 And the answer to many of those questions is yes, 0:10:47.640 --> 0:10:50.320 and it's going to We're really looking out to see 0:10:50.400 --> 0:10:54.079 what types of new applications will be enabled by Apple 0:10:54.160 --> 0:10:57.160 rolling out these AI features. I certainly think that there's 0:10:57.200 --> 0:10:58.960 going to be a wave of new AI apps. There's 0:10:59.000 --> 0:11:00.679 not going to be an AI app store, as some 0:11:00.720 --> 0:11:04.240 have said, but you know, Apple's here integrating AI heavily 0:11:04.280 --> 0:11:06.840 across its ecosystem, and that's a positive for the market. 0:11:07.000 --> 0:11:09.439 Okay, speaking of the ecosystem, I mentioned Vision Pro. It's 0:11:09.480 --> 0:11:12.960 been out, it's been announced for a year. Did we 0:11:12.960 --> 0:11:14.400 get updates on Vision Pro today. 0:11:15.640 --> 0:11:19.120 Yeah, so it's going international as we've been expecting. The 0:11:19.160 --> 0:11:22.600 new Vision OS two point zero, Well, there wasn't a 0:11:22.600 --> 0:11:25.440 lot to it. Some new gestures for opening control center 0:11:25.760 --> 0:11:28.360 and opening your home screen, some upgrades to some of 0:11:28.360 --> 0:11:31.840 their applications. You can airplay content into the Vision Pro, 0:11:32.679 --> 0:11:36.080 some new environments, and the ability to see your keyboard 0:11:36.559 --> 0:11:39.120 while typing if you're using a physical keyboard. That's all, 0:11:39.280 --> 0:11:42.080 you know. Exciting, nothing breakthrough AHO, A bunch of little 0:11:42.120 --> 0:11:42.800 catchup stuff. 0:11:42.840 --> 0:11:45.040 All right, I have two last questions for you. Your 0:11:45.080 --> 0:11:47.160 story that's out on the Bloomberg, which I highly recommend 0:11:47.160 --> 0:11:49.640 everybody check out. This was kind of the setting up 0:11:49.640 --> 0:11:52.600 but also the post. But it initially said Apple event 0:11:52.640 --> 0:11:54.280 will show whether it can be a force in the 0:11:54.320 --> 0:11:59.400 AI industry, Kennet, Did you get that? Did they show that? 0:11:59.480 --> 0:12:02.280 Well, it can be a force in the AI industry 0:12:02.320 --> 0:12:05.280 with the right partnerships, and they made the right partnerships 0:12:05.520 --> 0:12:07.920 and with the right applications, and with their new frameworks, 0:12:07.920 --> 0:12:10.240 they're hoping they enabled the right applications. So I'd say 0:12:10.240 --> 0:12:11.800 the answer is equivocally yes. 0:12:11.840 --> 0:12:13.959 All right, last question, you're sitting down with Tim Cook. 0:12:14.040 --> 0:12:17.120 What's the number one question this after today's event? 0:12:18.559 --> 0:12:21.200 What's the number one question for Tim Cook? Yeah? 0:12:21.240 --> 0:12:23.720 Where are all the other breakthrough new features? How are 0:12:23.760 --> 0:12:26.560 you going to get people to really buy these phones? 0:12:26.679 --> 0:12:30.240 Where's the shake up to iOS? I mean, we're getting 0:12:30.240 --> 0:12:33.400 Apple Intelligence, but the overall operating system still feels little stale. 0:12:33.760 --> 0:12:36.240 Carol, I'm going to wager that Tim Cook probably has 0:12:36.280 --> 0:12:39.200 a lot of questions for Mark Germatt based on Mark 0:12:39.240 --> 0:12:40.319 supporting over the years. 0:12:40.440 --> 0:12:42.160 Can we also ask him Mark, you know, did he 0:12:42.280 --> 0:12:45.120 do Apple intelligence like the Bloomberg Intelligence? Was he looking 0:12:45.160 --> 0:12:46.520 at us? Maybe he took a queue? 0:12:47.880 --> 0:12:50.440 No, I think they just swapped artificial with Apple. 0:12:51.160 --> 0:12:53.880 Just a marketing Well done, well done, listen, thank you 0:12:53.920 --> 0:12:55.839 so much. We know you've been busy in the lead 0:12:55.920 --> 0:12:58.040 up to this, so good to get some time with you. 0:12:58.160 --> 0:13:00.880 Of course, he is Mark German, He's our Bloomberg newschief 0:13:00.880 --> 0:13:02.640 technology correspond It be sure to check them out on 0:13:02.760 --> 0:13:05.080 the Bloomberg terminal. Also at Bloomberg dot Com. 0:13:05.800 --> 0:13:09.320 You're listening to the Bloomberg Business Week podcast. Catch us 0:13:09.360 --> 0:13:12.600 Live weekday afternoons from two to five pm Eastern Listen 0:13:12.640 --> 0:13:15.319 on applecar Play and then brout Auto with a Bloomberg 0:13:15.360 --> 0:13:20.680 Business app, or want us Live on YouTube. 0:13:22.000 --> 0:13:24.719 Remember everybody, how we keep reminding you that a top year, 0:13:25.440 --> 0:13:28.400 top risk for this year for investors and really kind 0:13:28.400 --> 0:13:32.000 of the world more broadly, geopolitics and global elections. On that. 0:13:32.120 --> 0:13:36.320 After crushing defeat in the parliament elections yesterday European Parliament 0:13:36.400 --> 0:13:41.120 election yesterday, President Emmanuel Macron plunged France into political uncertainty 0:13:41.120 --> 0:13:45.000 with a snap legislative ballot that restages his perennial battle 0:13:45.120 --> 0:13:48.160 with far right rival Marine La penn So we are 0:13:48.200 --> 0:13:50.520 watching this closely, but there's a lot more going on too. 0:13:50.440 --> 0:13:53.240 Yeah, because the election result highlights the increasing rejection of 0:13:53.240 --> 0:13:56.160 mainstream politics and left the credibility of the blocks two 0:13:56.200 --> 0:13:59.960 most important leaders in tatters economics and politics. Carol continue 0:14:00.040 --> 0:14:03.240 connect and drive outcomes they always have, but are today 0:14:03.280 --> 0:14:06.440 increasingly upbending the status quo and the expected in driving 0:14:06.480 --> 0:14:08.400 a populism wave around the world. 0:14:08.400 --> 0:14:10.760 We're seeing it happen in real time with more on 0:14:10.800 --> 0:14:13.840 the connectivity of it all. Let's bring in Bloomberg News 0:14:13.840 --> 0:14:18.280 Global Economy reporter Enda Current he is in our DC bureau. 0:14:18.679 --> 0:14:21.840 Elections around the globe, the rise and political uncertainty take 0:14:21.880 --> 0:14:24.320 France over the weekend. Much has to do with global 0:14:24.320 --> 0:14:27.120 citizens kind of having had enough of the way it 0:14:27.240 --> 0:14:31.000 is and feeling like they are being left behind. That 0:14:31.040 --> 0:14:33.280 we are seeing increasingly around the world. 0:14:34.240 --> 0:14:36.840 Yeah, absolutely right, as you say, this was you know, 0:14:37.480 --> 0:14:39.400 Pete up was the year of the elections anyway, and 0:14:39.440 --> 0:14:42.360 it really is playing out that there is a commonality 0:14:42.440 --> 0:14:47.400 of voters are resentful and they are punishing they're ruling governments. 0:14:47.480 --> 0:14:49.640 Not in every case, of course, but in some of 0:14:49.720 --> 0:14:51.680 the big cases. We had India last week not triggered 0:14:51.680 --> 0:14:54.880 a big shock in financial markets. Now we have the 0:14:54.920 --> 0:14:58.560 European Parliament elections over the weekend that swing to the right, 0:14:58.720 --> 0:15:02.720 especially in France, triggering shockwaves in financial markets, especially because 0:15:02.800 --> 0:15:06.720 mccrown is calling the legislative elections there as well. So 0:15:06.760 --> 0:15:10.640 we are now seeing the shock risk of these elections 0:15:10.640 --> 0:15:13.640 playing out, and a kind of a common underlying theme 0:15:14.080 --> 0:15:18.360 that people are expressing their discontent with governments, even in 0:15:18.400 --> 0:15:21.280 cases where broadly speaking, the economy is doing okay, which 0:15:21.280 --> 0:15:23.240 you could argue for the case of France and India, 0:15:23.720 --> 0:15:26.840 markets doing k but that's rightly wrongly not flowing down 0:15:26.840 --> 0:15:28.960 to people on the ground and they're expressing their frustration 0:15:29.040 --> 0:15:29.880 in these ballots. 0:15:30.080 --> 0:15:33.440 So where would you say, and that discontent is coming from. 0:15:33.520 --> 0:15:37.080 Does it have to do with individual's economic situation, Does 0:15:37.120 --> 0:15:39.400 it have to do with inflation, Does it have to 0:15:39.440 --> 0:15:42.720 do with immigration? Where are we hearing and seeing in 0:15:42.800 --> 0:15:45.080 polls the discontent coming from. 0:15:45.640 --> 0:15:48.840 Well, if you take France in the case there of 0:15:48.960 --> 0:15:51.960 Jordan Barbell in the national rally the La Penn opposition 0:15:52.040 --> 0:15:55.800 to Macron. During the European elections a common theme. There 0:15:55.960 --> 0:15:59.760 was opposition to European trade policy, opposition to European climate policy, 0:16:00.120 --> 0:16:04.440 and of course a harsher line on immigration, and that 0:16:04.520 --> 0:16:08.640 of course feeding in to discontent among populists everywhere in 0:16:08.720 --> 0:16:11.760 terms of the cost of living and economic pressures that 0:16:11.800 --> 0:16:15.760 they're under. Even as headline economic growth looks okay, France 0:16:16.080 --> 0:16:19.680 is doing relatively okay versus other parts of Europe. It's 0:16:19.720 --> 0:16:23.040 a pro business agenda there. Under President mccron, it's been 0:16:23.080 --> 0:16:27.440 seen as somewhat as a reasonable performer. Economic performance for France, 0:16:27.600 --> 0:16:30.200 but obviously that's not transnding down to people on the ground, 0:16:30.200 --> 0:16:31.680 and the same in India. By the way, we all know, 0:16:31.760 --> 0:16:35.440 India is famous, this global star, economical performer, one of 0:16:35.440 --> 0:16:38.680 the fastest growing in the world, an alternative to China. 0:16:38.760 --> 0:16:41.760 For foreign investment in the markets they're booming. Everyone talking 0:16:41.760 --> 0:16:44.120 about forign investment going into India. But obviously, when we 0:16:44.160 --> 0:16:47.200 saw the election results, people on the ground unhappy, and 0:16:47.240 --> 0:16:48.520 I think a lot of it is coming down to 0:16:48.600 --> 0:16:50.720 its cost of living pressures. And of course you can 0:16:50.760 --> 0:16:53.920 drop parallel with India western urban and some of the 0:16:53.960 --> 0:16:54.960 mood in the US too. 0:16:55.640 --> 0:16:58.360 So I have to say, when Tim and I are 0:16:58.440 --> 0:17:01.120 preparing in our team or preparing for today's show, this 0:17:01.200 --> 0:17:04.440 hour and really the next two hours that follow, We've 0:17:04.480 --> 0:17:08.320 got Peter Goodman coming up later on. He's global economics 0:17:08.320 --> 0:17:09.760 correspondent over at the New York Times. He's got a 0:17:09.760 --> 0:17:12.040 book How the World Ran Out of Everything, and really 0:17:12.080 --> 0:17:14.680 goes through some history lessons about kind of obviously what 0:17:14.720 --> 0:17:16.760 happened during the pandemic, but really how we got to 0:17:16.800 --> 0:17:19.560 that point where so much was made in one part 0:17:19.640 --> 0:17:23.720 of the world, China specifically, but also how it was 0:17:23.760 --> 0:17:27.040 all done on the backs of workers, and basically we 0:17:27.119 --> 0:17:30.320 got rid of some really well paying jobs, middle class 0:17:30.560 --> 0:17:34.400 working types of jobs, and two jobs that really paid 0:17:34.440 --> 0:17:36.920 a lot less. And just why there are so many 0:17:36.920 --> 0:17:40.160 individuals global citizens that are feeling kind of left out 0:17:40.680 --> 0:17:45.040 despite the market growing, you know, the global economy growing, 0:17:45.200 --> 0:17:48.520 and the wealthy getting wealthier. So you know, there's another 0:17:48.600 --> 0:17:51.800 story that our team has put out by Chris Sansty 0:17:52.080 --> 0:17:55.520 and looks at the Mexico election and talks about a 0:17:55.560 --> 0:17:57.920 warning and this looks into the new economy, but talks 0:17:57.920 --> 0:18:00.800 about populism can sometimes lead to results damage the very 0:18:00.800 --> 0:18:03.520 people who are rightfully seeking their fair share. I do 0:18:03.600 --> 0:18:08.480 wonder the pushback on globalization, the rise in populism, what 0:18:08.520 --> 0:18:12.600 that might mean ultimately, do investors look at different markets 0:18:12.600 --> 0:18:15.840 as investable not investable? I mean, what's that thinking and 0:18:16.119 --> 0:18:18.040 how you and your team are thinking about that? 0:18:19.040 --> 0:18:21.119 Absolutely right? I mean, this goes to the core of 0:18:21.160 --> 0:18:23.920 why there is such a realignment going on in if 0:18:23.920 --> 0:18:26.040 you want to call it, the Western industrialized world. That 0:18:26.119 --> 0:18:28.160 discontent on the ground that you talk about their Carol 0:18:28.320 --> 0:18:32.720 is forcing governments to either promote more industry at home 0:18:33.520 --> 0:18:38.120 poor more subsidies or tax breaks to generate investment at home. 0:18:38.119 --> 0:18:41.000 They're also looking at shaking up their supply lines for 0:18:41.160 --> 0:18:43.879 basic goods up to more higher value added goods. So 0:18:43.960 --> 0:18:46.720