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Speaker 2: Disappointing retail sales last month, adding to a concern of
Speaker 2: a pullback in consumer spending in the US, while a
Speaker 2: pair of business surveys suggested a growing caution, retail sales
Speaker 2: rising by less than forecast in February, and the prior
Speaker 2: month was revised down to mark the biggest drop going
Speaker 2: all the way back to July of twenty twenty one.
Speaker 2: Combined with separate data on Monday, had show to drop
Speaker 2: off in New York state manufacturing activity and a weaker
Speaker 2: home builder sentiment. The reports are consistent with expectations for
Speaker 2: slower economic growth. We got with us Michael McKees, Bloomberg
Speaker 2: News Economics and Policy correspondent. He joins us in the
Speaker 2: Bloomberg BusinessWeek Studio Mike week. Spending on goods is what
Speaker 2: we got today? Is it seasonal? Is it more than seasonal?
Speaker 3: It's a little bit of all of it. The seasonal
Speaker 3: of factors for February this year, we're very very generous,
Speaker 3: and so we were expecting a rise in maybe a
Speaker 3: better than expected rise in the core component, which is
Speaker 3: what we got. But it really only netted out with
Speaker 3: a negative one percent to revise down a figure for January.
Speaker 3: So for the first two months of the year it
Speaker 3: was flat. Of course, the headline numbers were not very
Speaker 3: good at all, which may have something to do with
Speaker 3: the weather. We just don't know at this point, but
Speaker 3: we'll keep an eye on that going into March. And
Speaker 3: Emily and I were talking about how we know you're
Speaker 3: going to go over to Gharadelli and bring us back
Speaker 3: some nice chocolate.
Speaker 4: Do your shot for you, Mike?
Speaker 5: Yeah, yes, What about e commerce activity? That's obviously something
Speaker 5: you can't buy the Gearedelli factory.
Speaker 4: Yeah no, well I bet you could.
Speaker 3: But that was the one good spot of two point
Speaker 3: four percent during the month. And what that may be
Speaker 3: related to is the weather, the flu, the fact that
Speaker 3: people were inside more than usual, and we did see
Speaker 3: a decline in food and drinking places down one point
Speaker 3: five percent, and that's that's the most discretionary of things,
Speaker 3: So it tells you maybe that people were holding back,
Speaker 3: but also, do you want to go out when it's
Speaker 3: four degrees.
Speaker 2: I Mike, yeah, I mean I don't that sometimes you
Speaker 2: have to, but you don't necessarily have to go buy
Speaker 2: a new car and look at cars on the lot
Speaker 2: when it's you know, four degrees. I think the big
Speaker 2: question a lot of people have is we continue to
Speaker 2: get more and more data that is kind of pointing
Speaker 2: to at least a pullback or maybe a slow down
Speaker 2: when it comes to the consumer and your view, how
Speaker 2: is the consumer doing? Is the consumer doing much different
Speaker 2: than we were doing just six months ago.
Speaker 3: Well, it's pretty obvious that the consumer is not in
Speaker 3: a good move. But this is the first hard data
Speaker 3: we've had on it, and it does suggest that maybe
Speaker 3: people pulled back some, but it's not enough to really
Speaker 3: give us a firm feeling on it because of the
Speaker 3: strength of the internet purchases during the month. So we've
Speaker 3: got to get some more data on that. I can
Speaker 3: tell you. The Atlanta Fed updated their GDP NOW numbers
Speaker 3: for the first time since that negative two point four
Speaker 3: earlier this month. That got everybody all excited, and they
Speaker 3: came up with negative two point one.
Speaker 4: Now they admit.
Speaker 3: This is distorted by all the gold shipment into the
Speaker 3: United States, and they ran a model on that two
Speaker 3: point four number and came up with the fact that
Speaker 3: it would be a zero point four percent gain for GDP,
Speaker 3: so essentially zero during the month if today was the
Speaker 3: end of the quarter. And Chris Low of FHN Financial
Speaker 3: ran the same model today and said, what you did
Speaker 3: up with is negative one tenth of a percent. So
Speaker 3: any way you look at it, the numbers we've had
Speaker 3: up to this point are not good. But we've got
Speaker 3: another month, two months of data to go.
Speaker 2: Really well, remind everybody what goes in we're gonna talk
Speaker 2: about the Federal Minute, but remind everybody that goes into
Speaker 2: that GDP now forecast and how it is this sort
Speaker 2: of snapshot in time.
Speaker 3: Well, they just incorporate the data as it comes out.
Speaker 3: So what we've got is January data, and now we've
Speaker 3: got February data up through the retail sales report, but
Speaker 3: there's still new home sales, existing home sales, and other
Speaker 3: things like that to come yet. So we've got also
Speaker 3: the PCE spending numbers, so there's a lot of data
Speaker 3: for February still out there, and then we got to
Speaker 3: get March data before they can give you a number
Speaker 3: that actually will resemble anything like what the GDP number is.
Speaker 3: But it doesn't suggest that the first two months of
Speaker 3: the quarter have started off well.
Speaker 5: So, Mike, in light of all of that, what are
Speaker 5: we going to get from the Fed this week? Is
Speaker 5: this going to be another one of those meetings where
Speaker 5: Powell says we're still in weight and see mode, we
Speaker 5: have to wait for that data to come in.
Speaker 6: Or is there going to be a little bit more action?
Speaker 3: You nailed it, that's what we're going to get. It's
Speaker 3: not going to be any action this time in the
Speaker 3: sense of guidance on for future rate moves. We will
Speaker 3: get a new dot plot, and my guess is it
Speaker 3: will still have two dots on there. Two rate moves
Speaker 3: this year, simply because they don't have evidence one way
Speaker 3: or another to change that. Not enough that the economy
Speaker 3: is failing to add, and not enough that inflation's coming
Speaker 3: down to subtract. So at this point, status quo is
Speaker 3: going to be the word. It'll be interesting to see
Speaker 3: what kind of economic projections they make in the Summary
Speaker 3: of Economic Projections, because last time was December, and we've
Speaker 3: obviously seen a big change in at least consumer attitude
Speaker 3: since then, but there doesn't seem to be a collapse
Speaker 3: in the labor market. So do they change unemployment, do
Speaker 3: they change GDP? And where do they think inflation is?
Speaker 3: My guess is this will be a meeting where we
Speaker 3: see very little change in almost anything they do, and
Speaker 3: they'll just go home and wait for the next one.
Speaker 2: But it does sound like it's the easiest job around.
Speaker 2: As the President said when he was running, you know,
Speaker 2: you just flip a coin and decide whether to move
Speaker 2: rates higher or lower.
Speaker 4: I'm not going to have you weigh in on that, Mic,
Speaker 4: but I do want to know.
Speaker 2: I do want to know about what the FED is
Speaker 2: dealing with now versus what they dealt with at their
Speaker 2: last meeting. Their dual mandate is certainly, you know, maximum
Speaker 2: employment and stable prices. Which would you say that they're
Speaker 2: more focused on one now than the other.
Speaker 3: They're more focused on inflation, but that's been true for
Speaker 3: a couple of meetings because the labor market has been
Speaker 3: so stable. They want to make sure that inflation continues
Speaker 3: to go down, and we're getting mixed readings on that.
Speaker 3: CPI went down, PPI went up a little bit, and
Speaker 3: then some of the all of the inputs into PCE
Speaker 3: that we have gotten from those two indicators suggests the
Speaker 3: PCE is going to go up. So you've got mixed
Speaker 3: news on what's happening with inflation. None of it suggesting
Speaker 3: that inflation is going one way or the other very quickly,
Speaker 3: but it's something they have to keep an eye on,
Speaker 3: so they'll operate as if inflation were just sticky, staying
Speaker 3: where it was, and that makes for a good reason
Speaker 3: to just leave rates unchanged.
Speaker 4: All right.
Speaker 2: Perhaps that's a perfect segue to move on to a
Speaker 2: bigger discussion about the fat or Thanks to Michael McKee,
Speaker 2: Bloomberg News International Economics and Policy correspondent, Mike, I've got
Speaker 2: plenty of time to go to the Jaredelli store and
Speaker 2: get you some chocolate on the way back from San Francisco,
Speaker 2: so we'll see what you get for Saint Patrick's Day.
Speaker 4: Appreciate you joining us.
Speaker 2: Hey, speaking to the FED drum, Powell does face that
Speaker 2: tricky task this week of both the shuring investors and
Speaker 2: the economy that remains on solid footing. Will also conveying
Speaker 2: policymakers and stand ready to step in if necessary. On that,
Speaker 2: Treasury Secretary Scott Besson was asked on Meet the Press
Speaker 2: on NBC on Sunday whether he can guarantee the American
Speaker 2: people are there that there would be no recession on
Speaker 2: President Trump's watch.
Speaker 4: Here's what he had to say.
Speaker 7: You know that there are no guarantees who would have
Speaker 7: predicted COVID, right, so I can predict that we are
Speaker 7: putting in robust policies that will be durable and could
Speaker 7: there be an adjustment because I tell you that this
Speaker 7: massive government spending that we'd had, that if that had
Speaker 7: kept going, we have to wean our country all of that.
Speaker 7: And on the other side, we are going to invigorate
Speaker 7: the private sector.
Speaker 2: That was Treasury Secretary Scott Besson on Meet the Press
Speaker 2: on Sunday. Liz McCormick is Bloomberg News Chief correspondent for
Speaker 2: Global macro Markets, and she and Jenelle Marte write about
Speaker 2: Powell's balancing act. She joins us in the Bloomberg A
Speaker 2: Business Week A studio. Liz, what is the message that
Speaker 2: Powell needs to get across this week?
Speaker 8: Yeah?
Speaker 9: First, can I say I think Mike McKee set me
Speaker 9: up for a long Day Wednesday, because every time we
Speaker 9: say nothing's going to happen, something happens. But now I
Speaker 9: never questioned his judgment, but I think, yeah, from the markets,
Speaker 9: I mean, everyone in the markets knows Chairman Pal is
Speaker 9: going to be very cautious. He's got a balancing act.
Speaker 9: He's not going to say, oh, I'm worried about the
Speaker 9: stock market.
Speaker 8: But you know, they want.
Speaker 9: To see if he will because like Mike said, of
Speaker 9: course no one expects any rate change, but the consensus
Speaker 9: seems to be that they keep that dot plot which
Speaker 9: shows two cuts as far as the last quarterly update
Speaker 9: in December for this year, that it probably stays the same,
Speaker 9: but that people in markets are thinking maybe in the
Speaker 9: press or he could give just kind of a stronger
Speaker 9: nod to something he's been saying, but just kind of
Speaker 9: more forcefully somehow that like, if things worsen, if the
Speaker 9: economy starts to show more signs of trouble, we stand
Speaker 9: ready to do whatever we need to do, meaning if.
Speaker 8: They have to cut rates a lot, they will.
Speaker 9: Of course he's said that before, but I think some
Speaker 9: in markets are saying, you know, with the ten percent
Speaker 9: correction and we're bond yield to fallen from their peaks
Speaker 9: this year, kind of that fear of recession, and some
Speaker 9: like Mike laid out at least the soft data has
Speaker 9: been a bit troublesome, especially with the survey data.
Speaker 8: That could Shairman Pal at least.
Speaker 9: Give a little bit more of a nod to, you know,
Speaker 9: don't worry, We've got this.
Speaker 8: You know, we'll take care of it if they need to.
Speaker 2: Well, well, Liz, you mentioned what's happening in the bond market,
Speaker 2: or what has happened in the bond market, but also
Speaker 2: what's happened in the equity market last time I checked.
Speaker 2: Taking you know, paying attention to a sell off in
Speaker 2: the equity market is not necessarily part of that dual
Speaker 2: mandate when it comes to inflation and stable prices. What
Speaker 2: is your view on this and to what extent the
Speaker 2: Fed actually cares about what happens in the equity market.
Speaker 8: Yeah, absolutely correct.
Speaker 9: It's that it's just financial conditions, you know, And I've seen.
Speaker 8: Some good stories.
Speaker 9: I forget all the writers they're Fromberg who wrote them
Speaker 9: about how these financial conditions bleed into they could into
Speaker 9: the real economy. When people look at, you know, their
Speaker 9: investment assets and they're going down. You could kind of
Speaker 9: stomach that for a while, but do you feel like, oh,
Speaker 9: I better keep it a little closer to the vest,
Speaker 9: you know, let me spend a little less because the
Speaker 9: money I had is you know, a fifth of what
Speaker 9: it was, you know, or went down by a fifth.
Speaker 9: Let's say that maybe people start to spend less or
Speaker 9: a little more concerned. Does it kind of bleed into
Speaker 9: because one thing about expectations, like the FED taught has
Speaker 9: laid out very clearly about like let's talk about inflation
Speaker 9: expectations that they feel like expectations can bleed into like, oh,
Speaker 9: you think inflation is.
Speaker 8: Going to get worse, so you change your behavior. So
Speaker 8: you're right.
Speaker 9: They're not gauging the stock market. That's not part of
Speaker 9: their thing. But I think someone is probably gonna ask them,
Speaker 9: like markets seem to be pricing more risk of recession?
Speaker 9: Is that a concern? But so I think that's why
Speaker 9: it has to be like a clever dance around showing
Speaker 9: of course we're watching, we're aware, we look.
Speaker 8: At financial conditions.
Speaker 9: But you know, right now our dual midate the inflation
Speaker 9: is not where they want it. They do not see
Speaker 9: a major problem in the economy the labor market. Like
Speaker 9: the Jolts data, the recent jobs data wasn't bad. They
Speaker 9: really don't have the data, like Mike was saying, to
Speaker 9: really kind of do anything, you know.
Speaker 8: Anna Wong reached out.
Speaker 9: To me on that story to say, hey, listen, Liz,
Speaker 9: I don't think the Fed's going to do that, you know,
Speaker 9: So I never kind of cross her. So she's saying
Speaker 9: she doesn't think Pal's going to sound any different. So
Speaker 9: we'll watch Anna, You're probably right, but we'll say, you know.
Speaker 5: Well, Liz, do you think that Powell does have a
Speaker 5: more difficult job this week trying to convey that balancing
Speaker 5: act just because of.
Speaker 6: What's happened in markets.
Speaker 9: Yeah. I think it's gotten a little bit worse in markets, right,
Speaker 9: So he knows because people get concerned, and I think
Speaker 9: he always wants to talk to main street, right, you know,
Speaker 9: not just he doesn't care about investors and how they're
Speaker 9: doing in positions and losses. But it's main street if
Speaker 9: they're worried about oh, you know, it's the economy going
Speaker 9: to get worse.
Speaker 8: You know.
Speaker 9: We hear of all these job cuts from DOGE and
Speaker 9: companies saying they're kind of you know, hiring less and
Speaker 9: they start to worry and their spending habits change. So
Speaker 9: I think he's always trying to like maybe he'll show
Speaker 9: up on sixty minutes one.
Speaker 8: Of these days. It's usually when he's.
Speaker 9: Talking to main Street, but to say, like, you know,
Speaker 9: you know, inflation is top of mind. Inflation hurts everyone,
Speaker 9: he always says, but that you know, he's aware. And
Speaker 9: if it's you know, starts to bleed into the real economy,
Speaker 9: there's a lot they can do right now, you know,
Speaker 9: just standing pat is the best policy. He doesn't want
Speaker 9: to weed into politics, right so he said, you know,
Speaker 9: you know, we're looking at these policies.
Speaker 8: They don't know exactly like the market.
Speaker 9: Some of the tariffs have been laid out, others haven't,
Speaker 9: so they don't exactly know what you know, how long
Speaker 9: the degree.
Speaker 8: And so they're starting to try to model that.
Speaker 9: But you kind of can't until you you know, we
Speaker 9: have April second coming with President Trump laying out a
Speaker 9: new round.
Speaker 8: So I think, like Neil.
Speaker 9: Judas says, they don't want to be the story this week,
Speaker 9: that doesn't want to be the story. So I think
Speaker 9: Chairman Powell will have a lot of notes and he's
Speaker 9: going to have a lot of scripts that he's.
Speaker 8: Going to try to stick to.
Speaker 9: But yeah, I think it's gotten a little harder since
Speaker 9: he talked last. Because you know, you're you're an equity
Speaker 9: wizard over me. The market is a little bit worrisome.
Speaker 5: Yeah, we've seen, you know, a significant drop since the
Speaker 5: last bed meeting. You know, you mentioned inflation. That's something
Speaker 5: that obviously Main Street cares a lot about. But from
Speaker 5: your angle, you're watching the bond market. What is the
Speaker 5: bond market telling us about expectations for inflation.
Speaker 9: Yeah, so bond market break even inflation levels. If you
Speaker 9: look at them, they're not really out of bounds. I
Speaker 9: keep looking to at like the Fed likes the long
Speaker 9: run ones that smooth things out. If you look at
Speaker 9: the so called five year five year forward, it's going
Speaker 9: to like five year inflation five years from now. That
Speaker 9: is not at a troublesome level, so I think. But
Speaker 9: the University of Michigan, which was a survey of course
Speaker 9: that was really the long run ones, really really jolted higher.
Speaker 8: They don't like to see that.
Speaker 9: But I don't think the bond market is screaming inflation
Speaker 9: concern either, So you know, they do have some room
Speaker 9: to wait and we know when if they need to move,
Speaker 9: they can go fast.
Speaker 8: Right, So I think he feels like, hey, we can
Speaker 8: do this.
Speaker 9: But I don't think the bomb market screaming, especially because
Speaker 9: yields are coming down, kind of leaning on the growth concerns.
Speaker 5: All right, well, Liz McCormick, Bloomberg News, Chief correspondent for
Speaker 5: Global macro.
Speaker 6: Markets, thank you so much.
Speaker 5: As always, we'll be waiting for that FED meeting coming
Speaker 5: up soon.
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Speaker 2: Jensen Wong looks like he's on top of the world.
Speaker 2: He's held babies, He's signed countless autographs. He's thrown out
Speaker 2: first pitches at MLB games. He's led tech conference crowds
Speaker 2: in chance. He's appeared on stage with CEOs from the
Speaker 2: likes of Goldman, Sachs, Meta Platform, Salesforce, and more. He's
Speaker 2: also chatted privately at the White House with President Donald Trump.
Speaker 2: Oh yeah, he's also one of the wealthiest people in
Speaker 2: the world. Yet he's well aware that corporate fortunes can change,
Speaker 2: and he's watched them do with brutal speed in the
Speaker 2: semiconductor industry. Here's a history of booms and bus for
Speaker 2: tech infrastructure companies because their products tend to become commoditized,
Speaker 2: so right. Joshua Brustine and Ian King for Bloomberg Business Week.
Speaker 2: Joshua is a Bloomberg BusinessWeek Technology editor. Indian King is
Speaker 2: Bloomberg News at US Semiconductor and networking reporter. Check out
Speaker 2: their story on the Bloomberg Terminal and at Bloomberg dot
Speaker 2: com slash at BusinessWeek. Joshua joins our program this afternoon
Speaker 2: in New York. Ian is here in our San Francisco bureau.
Speaker 2: Ian King, I want to start with you. What do
Speaker 2: you think keeps Jensen Wong up at night?
Speaker 4: Right now?
Speaker 10: What's always kept him up at night?
Speaker 11: Right?
Speaker 10: I mean? He you know, he tries to run this
Speaker 10: company like all of the cliches are worth thirty days
Speaker 10: away from going out of business. But that really really
Speaker 10: drives him. What everybody thinks is, oh, he's the top
Speaker 10: of the world. But you've got to remember this company
Speaker 10: spent most of its career, it's thirty years in existence.
Speaker 10: Under the shadow of intel, under this permanent threat that
Speaker 10: what it does is going to be taken away. And
Speaker 10: that's really his mentality. Yes, this is great, this is
Speaker 10: the moment, but he's already looking for the next thing.
Speaker 10: He's already looking to extend that run. And he's always
Speaker 10: already looking at what might go wrong. That's who he
Speaker 10: is and that's how he does things.
Speaker 5: Joshua, describe what drives the Nvidia CEO, because you guys
Speaker 5: have this great line in the BusinessWeek story. Wong's tendency,
Speaker 5: even when he's away from the office and noticeably tipsy,
Speaker 5: is to always be closing.
Speaker 6: Talk about that more.
Speaker 11: Yeah, Jensen Wong is always referred to as Jensen is
Speaker 11: a real sort of force of nature personality. He's very
Speaker 11: intense and he's always sort of evangelizing for right now,
Speaker 11: it's for artificial intelligence and the things that you'd really
Speaker 11: need a lot of invidio chips for. And so you'll
Speaker 11: see him constantly telling you why the future is going
Speaker 11: to revolve around these enormous data centers full of invidio chips.
Speaker 5: And Ian talk a little bit more about just the
Speaker 5: expansion here. What is the next phase of growth? Ian
Speaker 5: for this company.
Speaker 10: Well, the expansion is AI has to be everywhere for
Speaker 10: this to work. Right now, you have a very small
Speaker 10: group of companies, whether it's Microsoft or a as, that
Speaker 10: are buying the majority of the gear, putting the majority
Speaker 10: of these capabilities in place. What really needs to happen
Speaker 10: is that it has to get out there in the wild.
Speaker 10: It has to get out there in the economy. Companies
Speaker 10: have to use it, consumers have to use it. It has
Speaker 10: to be part of factories, It has to be part
Speaker 10: of vehicles, It has to be part of everything to
Speaker 10: justify that massive spend that we've seen and to keep
Speaker 10: that massive spend going.
Speaker 2: Is it still, though ian about AI inference and training
Speaker 2: AI models or is it about something bigger for in
Speaker 2: video moving forward? Is it about the driverless cars? Is
Speaker 2: it about humanoid robots? Is it about that next gen
Speaker 2: thing that Jensen's watching that we don't know about yet.
Speaker 10: Well, you refer to training and inference. Some experts will
Speaker 10: tell you that the training, the actual creation of the
Speaker 10: core of AI has kind of happened or is close
Speaker 10: to being sort of complete. What we need now are
Speaker 10: models that are more specific and tightly focused, models that
Speaker 10: can drive your car models that can tell you factory
Speaker 10: robots where to go and not to bang into each other,
Speaker 10: and to do things in the most efficient way. That
Speaker 10: what we need, and that is where inference comes in,
Speaker 10: because then you have these more specific models that say,
Speaker 10: find the way around a factory. They have to know
Speaker 10: then and infer in the moment, Hey there's something coming
Speaker 10: towards me, I need to stop, or hey there's a
Speaker 10: human being there coming around the corner, I need to
Speaker 10: not run them over. That's what we'll get into now.
Speaker 10: Right now, a lot of AI out in the wild
Speaker 10: is kind of the chatbots. It's reacting to a very
Speaker 10: limited set of stimulus text or voice. And what we
Speaker 10: need is AI to be inferring more meaning from the
Speaker 10: world around it, and that's still a work in progress.
Speaker 5: Joshua, what is physical AI and how is Nvidia expanding
Speaker 5: into it, because you guys mentioned that a number of
Speaker 5: times in your article.
Speaker 11: Sure, physical AI is basically, instead of chatbots, AI that's
Speaker 11: operating in the real world. The most obvious example of
Speaker 11: it right now is autonomous vehicles, something that in Vidia
Speaker 11: has been working on for a decade and has actually
Speaker 11: said would be solved many years ago, but it's also
Speaker 11: looking at robots, automated factories, basically anything where the AI
Speaker 11: is moving something around the world and in video. Is
Speaker 11: very bullish on this because it needs as many applications
Speaker 11: as possible, and if it can unlock factories and cars
Speaker 11: and everything, that's a lot bigger than just doing something
Speaker 11: on the internet.
Speaker 2: Joshua, You've been covering technology for years, and I'm just
Speaker 2: curious contextually for you to describe this moment to us
Speaker 2: as a technology editor. Is this a bigger deal than
Speaker 2: the rise of the browser in the nineties, Is it
Speaker 2: bigger than the rise of social media in the early
Speaker 2: two thousands, Is it on par with the rise of mobile?
Speaker 7: Like?
Speaker 4: Where is this in your view as a tech editor.
Speaker 11: I think what we're looking at right now is that
Speaker 11: we've seen the sort of laying the groundwork phase of
Speaker 11: the artificial intelligence intelligence era, and now we're waiting to
Speaker 11: see that this is going to be the size of
Speaker 11: social media, that this is going to be the size
Speaker 11: of the browser, that the vision that in Nvidia and
Speaker 11: other AI companies have laid out is actually going to
Speaker 11: sweep the economy with the force that they say it's
Speaker 11: going to, or if it's going to be something more modest,
Speaker 11: and as Ian said, considering how valuable in Vidia is,
Speaker 11: this can't just be a pretty big deal. It has
Speaker 11: to be an enormous deal for Nvidia to justify the
Speaker 11: amount of money it's worth.
Speaker 5: Right now, Ian, I imagine that you know, while you
Speaker 5: were writing this, the idea of deep Seek and other
Speaker 5: competitors came up in your reporting process. Can you talk
Speaker 5: a little bit more about just how in Vidia is
Speaker 5: reacting to the competition and these companies that are saying
Speaker 5: that they can do AI cheaper.
Speaker 10: Yeah, I mean, it's important to note that for the
Speaker 10: fundamentals of what's going on, in Video really doesn't have
Speaker 10: any competition right now. If you want to train a
Speaker 10: large language model, you're going to do it on in
Speaker 10: Video's gear. At the same time, the enormous expense of
Speaker 10: doing that, and then the expense or the possible expense
Speaker 10: of deploying that in the real world has got everybody
Speaker 10: thinking is there a better way to do this? Is
Speaker 10: there a faster way to do this? And Deep Seek
Speaker 10: is arguably the most poignant example so far that raises
Speaker 10: the question, perhaps we can do this more cheaply, or
Speaker 10: perhaps we can sort of diffuse a little bit of
Speaker 10: what we've already done, and you snap that off and
Speaker 10: use that in a cheaper way. So there's so much energy,
Speaker 10: there's so much at stake here, and I think is
Speaker 10: really an example of that. And in Video's reaction was great,
Speaker 10: this makes it cheaper. This means it's going to be
Speaker 10: everywhere at all, too good for us. And that's a
Speaker 10: typical Jensen response. You know, don't deny reality, don't look back,
Speaker 10: look forward.
Speaker 4: Yeah, as you right, and as you and Joshua right.
Speaker 2: There's this history of booms and boss for the tech yeah,
Speaker 2: infrastructure companies because their products tend to become commoditized in
Speaker 2: that's not happening yet within video.
Speaker 10: Yeah, and yet is is a very powerful word in
Speaker 10: this sentence. Everybody is reacting like, oh, in videos the
Speaker 10: king of the world, and they've been, you know, at
Speaker 10: this for years they kind of have. But look at
Speaker 10: the numbers, right, only like three years ago, gaming graphics
Speaker 10: chips were the biggest part of their revenue. This has
Speaker 10: happened really really quickly and very dramatically. There's been a
Speaker 10: massive transfer of wealth. The key question is can that
Speaker 10: transfer of wealth become self sustaining and that's what they're
Speaker 10: working on right This This isn't an Intel that's been
Speaker 10: around for decades and in this dominant position. This is
Speaker 10: something that's happened really quickly and is a very quickly
Speaker 10: evolving situation.
Speaker 5: Joshua and Videous stock is down ten percent year today.
Speaker 5: It's obviously up a ton in the last few years.
Speaker 5: But what do you think Jensen thinks about the recent
Speaker 5: moves in this company or.
Speaker 6: Does he not think about that stock price at all.
Speaker 11: I'm sure he thinks about the stock price, because everyone
Speaker 11: in the world seems to think about the video stock price.
Speaker 11: You know, there's a lot of headwinds that Jensen Wong
Speaker 11: has been well aware of for quite some time, and
Speaker 11: they're all coming to a head, you see, with tariffs
Speaker 11: and other barriers on international trade, including a US China
Speaker 11: trade war that could have national security implications that will
Speaker 11: restrict chips specifically. I think the rise of deep Seek,
Speaker 11: while he will say that's a great thing, also shows
Speaker 11: that maybe some of the assumptions about how many chips
Speaker 11: are going to be needed for each subsequent step in
Speaker 11: the AI development. You know, maybe those assumptions aren't as
Speaker 11: ironclad as they thought, and That is why you see
Speaker 11: him sprinting ahead and trying to get to the next phase,
Speaker 11: to have these applications start to bear fruit and to
Speaker 11: have a new story to tell, to keep to keep
Speaker 11: that moving, that momentum moving.
Speaker 10: And to what Josh said there, if Jensen has a genius,
Speaker 10: it's it's his ability to never sit still, to always
Speaker 10: be absorbing all of the inputs. So you mentioned the
Speaker 10: stock price, whatever is bugging investors, he hears it, and
Speaker 10: then when you go into the next investor presentation, when
Speaker 10: you go into the next earnings, he's already moved beyond it.
Speaker 10: In the conversation, he integrates a bit of the concern
Speaker 10: such as deepseek, into his presentation, into what he's saying,
Speaker 10: into the points he makes over and over again. And
Speaker 10: that's true. Whether it's regarding the stock price, so that's true,
Speaker 10: whether it's regarding the technology that he's always absorbing that information.
Speaker 10: That's where his genius lies. Whether he's ultimately right or not,
Speaker 10: whether it plays out like he says it's going to,
Speaker 10: that's another thing. But what we wanted to convey in
Speaker 10: this story as much as anything else, is the level
Speaker 10: of intensity being brought by somebody who isn't doing a
Speaker 10: victory lap.
Speaker 2: So Joshua, how does he think it's going to play out?
Speaker 2: How does Jensen think this is going to play out?
Speaker 11: He thinks, Hey, it's going to be everywhere He's you know,
Speaker 11: he will tell you that the robots are going to
Speaker 11: be here. We've been saying that it's going to take
Speaker 11: however long, but that this is the year that the
Speaker 11: that the car problem is solved, and soon you'll see
Speaker 11: so many autonomous cars on the streets that healthcare will
Speaker 11: be over overhauled. You know, he's there giving you the
Speaker 11: bulls case if you listen, and you know whether he
Speaker 11: believes that deep in his soul, like, we don't know,
Speaker 11: but he will make the most convincing case possible.
Speaker 2: Ian, I just want to let you wrap it up
Speaker 2: on this what we have you changing subjects very briefly.
Speaker 4: Intel has just been on a tear.
Speaker 2: We can't let you go without just giving us thirty
Speaker 2: seconds on Intel and it's new CEO.
Speaker 10: Yeah, we have a new CEO. But we don't know
Speaker 10: what he's going to do. We don't know whether he's
Speaker 10: the breakup guy who's going to preside over the end
Speaker 10: of Intels exists or whether he's the guy who's going
Speaker 10: to take the existing plan and just make it into
Speaker 10: a better plan or better execute it. Until we know that,
Speaker 10: we don't know which way they go.
Speaker 2: Well, investors are should be bet big on him, because
Speaker 2: the shares of that company have just been on a
Speaker 2: tear since that was announced. A really great story, and
Speaker 2: really appreciate you both of you joining us. Joshua Brustein
Speaker 2: and Ian King writing for Bloomberg A BusinessWeek about Nvidia
Speaker 2: and Jensen Wong. Of course, a big event in Nvidia
Speaker 2: GtC happening this week in northern California'd be sure to
Speaker 2: check out our coverage. You can do that at Bloomberg
Speaker 2: dot com and of course on the Bloomberg terminal as well.
Speaker 1: This is the Bloomberg Business Week Podcast. Listen live each
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Speaker 1: Auto with the Bloomberg Business app. You can also listen
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Speaker 1: Just say Alexa Play Bloomberg eleven thirty.
Speaker 12: Well.
Speaker 2: A cyber attack last week on x of course elon
Speaker 2: Musk social media platform. It was reportedly caused by insufficiently
Speaker 2: protected servers that were targeted by a distributed denial of
Speaker 2: service attack, in other words DDoS attack. Cybersecurity analysts say
Speaker 2: the attack was possible because X's origin servers were not
Speaker 2: shielded behind tech that blocks do DOOS attacks, making them
Speaker 2: vulnerable to attack. Now pro Palestinian activist group called Darkstorm
Speaker 2: Team took responsibility responsibility for the attack without providing any evidence.
Speaker 2: Bloomberg News wasn't able to independently verify the group's claims,
Speaker 2: and representatives from X did not respond to a request
Speaker 2: for comment. It does show, though, that even the company
Speaker 2: owned by the wealthiest person in the world is vulnerable
Speaker 2: in this day and age. For more, we bring in
Speaker 2: Wendy Whitmore, senior vice president at Palo Alto Networks, where
Speaker 2: she works with businesses to defend them from cyber threats
Speaker 2: think ransomware, state sponsored espionage, and more. Wendy joins us
Speaker 2: from the Bloomberg at BusinessWeek Studio. Wendy, good to have
Speaker 2: you back with us. Give us a big picture here
Speaker 2: where you are, where we are versus the bad actors.
Speaker 2: Are we still at least one step ahead of them.
Speaker 13: Well, so, I think the story you presented is a
Speaker 13: great example of what we're seeing, which at high level
Speaker 13: is the increase in speed, scale, and sophistication from attackers worldwide.
Speaker 13: There's nation state activity which we've continued to see a
Speaker 13: massive increase in. And then on the cyber criminal side,
Speaker 13: what we're seeing is largely what you mentioned, so focus
Speaker 13: on disruption, right, attackers intentionally wanting to disrupt business operations,
Speaker 13: to do it in a way that's very visible that
Speaker 13: you know causes disruption to an end consumer. And oftentimes
Speaker 13: they want to do this because they have a higher
Speaker 13: likelihood of commanding some sort of payment in return. Clearly
Speaker 13: wasn't happened in your story last week, but that certainly
Speaker 13: is often the intent and very consistent with what we're seeing.
Speaker 11: Wen.
Speaker 5: Do you work specifically with businesses to defend them against
Speaker 5: these cyber threats? What do the cyber attackers really want.
Speaker 6: Out of businesses? Do you see a pattern.
Speaker 5: In terms of, like, I guess, the biggest trend in
Speaker 5: terms of these what these hackers actually want.
Speaker 13: The biggest trend is unfortunately still that focus on commanding
Speaker 13: a return of payment. So oftentimes, you know, if it's
Speaker 13: a cyber criminal, they're looking to how can I generate
Speaker 13: the light the highest payment in return for the attack
Speaker 13: that I've provoked. So they're going to take every avenue
Speaker 13: to do that, whether it's extorting the company, it's causing
Speaker 13: reputational damage, causing actual operational disruptions. We've seen that in
Speaker 13: the hospitality industry and healthcare, in technology as well, and
Speaker 13: now you just saw that, you know, in social media
Speaker 13: companies last week.
Speaker 4: When they hew vulnerable.
Speaker 2: You know, we often talk about companies in the context
Speaker 2: of being vulnerable to hackers or toward malicious actors. How
Speaker 2: vulnerable though, is the US government in your view?
Speaker 13: Well, you know, I think you're hitting on a fundamental
Speaker 13: premise here, which is cybersecurity really is national security today.
Speaker 13: So I think as a country, we're certainly well positioned.
Speaker 13: We've got a lot of money in proactive defense and
Speaker 13: certainly in the ability to detect quickly when something is amiss.
Speaker 13: We're seeing more and more organizations, certainly including the federal government,
Speaker 13: move towards more proactive investment in security. So looking to
Speaker 13: invest on the front end, whether than waiting until something
Speaker 13: occurs on the back end, and really having that visibility
Speaker 13: to one central location is critical to be able to
Speaker 13: make decisions quickly, analyze what's going on and then get answers.
Speaker 5: What does investment in cybersecurity look like from a business angle?
Speaker 5: Is it companies training employees about safe digital practices or
Speaker 5: are there actual pieces of infrastructure and.
Speaker 6: Software that these companies are investing in.
Speaker 13: Yeah, it really is both, right. So one of the
Speaker 13: areas we specialize in at Palaoto Networks is just the
Speaker 13: ability to have a platform that enables that central visibility.
Speaker 13: So that's investment in technology where you can get answers
Speaker 13: and cloud endpoint and the network. But the employment, the
Speaker 13: training employees piece is so critical because all of these
Speaker 13: attacks are successful because employees are successfully you know, taken
Speaker 13: advantage of. So either their credentials are stolen, maybe it's
Speaker 13: a help desk that's targeted. With the onset of AI. Now,
Speaker 13: with generative AI in particular, that human piece has become
Speaker 13: so real and so tangible, and the barriers that used
Speaker 13: to exist, like challenges in language for example, that doesn't
Speaker 13: exist now because these attackers are able to use jen
Speaker 13: AI to facilitate and automate so many of those attacks
Speaker 13: and do them in a realistic way.
Speaker 2: Okay, So that's what really concerns me, and we've all
Speaker 2: seen the stories of people being misrepresented, or you know,
Speaker 2: you have a family member that's called and they say
Speaker 2: they're being told that one of their loved ones is
Speaker 2: in jail and needs money or something like that. For years,
Speaker 2: it was pretty easy to identify that that wasn't real.
Speaker 4: But I think those days are behind us.
Speaker 13: Agreed, It's very concerning. So from a business standpoint, the
Speaker 13: reality is we have to fight AI with AI. So
Speaker 13: while attackers have leveraged AI to accelerate their tax, to
Speaker 13: automate them to make them faster at scale, the also
Speaker 13: the reality as businesses have invested in AI, and if
Speaker 13: you haven't, then you need to in the lens that
Speaker 13: you have to automate your defenses. You've got to be
Speaker 13: able to detect very quickly and rapidly so that you
Speaker 13: can make decisions to contain the spread of an attack
Speaker 13: in your environment.
Speaker 4: Well, okay, so how does that? How does that work?
Speaker 12: Though?
Speaker 2: If you're an individual and you're not a business, how
Speaker 2: does that work? If you know, how can my parents
Speaker 2: protect themselves or somebody's relatives, or how can we protect ourselves?
Speaker 13: I have those same concerns. Right, My parents are certainly aging,
Speaker 13: and that's it They're a target demographic for fraudsters, for
Speaker 13: criminals who are looking to take advantage of citizens. So
Speaker 13: I think the more awareness we can have, the better
Speaker 13: in terms of making sure that people are aware that there,
Speaker 13: you know, is this threat and a potential risk with AI.
Speaker 13: They need to validate sources if something seems too good
Speaker 13: to be true, or if you are you receive a
Speaker 13: phone call for sample or an email and there's a
Speaker 13: sense of urgency like, hey, this has to happen immediately,
Speaker 13: I need an account information. Now I need you to
Speaker 13: make a phone call. Those should all be red flags
Speaker 13: and triggers at the consumer level.
Speaker 6: We don't have a ton of time left.
Speaker 5: But I'm wondering just how optimistic you are that just
Speaker 5: as these attackers get more advanced in using AI to
Speaker 5: commit cyber attacks, companies can leverage AI to respond.
Speaker 13: I love that we're potentially ending on a more optimistic note.
Speaker 13: I'm highly bullish as it relates to AI.
Speaker 8: I see the.
Speaker 13: Investments we're making, not only in the research to understand
Speaker 13: how attackers are using AI, but the investments in accelerating
Speaker 13: our workflows, our processes, having copilots for tasks, tasks that
Speaker 13: used to take days now take minutes and in sometimes seconds.
Speaker 13: So the reality is we can leverage our really smart
Speaker 13: people towards even more challenging tasks. And that's really exciting
Speaker 13: and motivating, and I think it's going to be a
Speaker 13: key to success moving forward.
Speaker 2: Hey, Wendy, thirty seconds before you let you go. Given
Speaker 2: the growth of AI and the way that companies are
Speaker 2: spending around AI, do you think companies are still spending
Speaker 2: sufficiently when it comes to protecting themselves.
Speaker 13: You know, what we're seeing is companies spending more of
Speaker 13: their budget on proactive security than on reactive security. And
Speaker 13: I think that's great news and it's going to continue
Speaker 13: to ship the ball forward in terms of making it
Speaker 13: harder for the attackers to be successful and encouraging that
Speaker 13: the organizations who are providing defense are going to win.
Speaker 2: Wendy went More, Senior vice president at Palo Alto Networks,
Speaker 2: Joining us from our Bloomberg BusinessWeek studio in New York.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from two to five these during listen
Speaker 1: on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 2: The by American movement has been periodically invoked since the
Speaker 2: Boston Tea Party. The goal has been promoting economic nationalism
Speaker 2: strengthening the US economy. Yeah, despite its compelling logic, there
Speaker 2: is little evidence that buy American campaigns actually work in
Speaker 2: reversing consumption trends or preserving manufacturing jobs, and their success
Speaker 2: is often tied to broader economic conditions.
Speaker 4: Amanda Mole is a senior reporter.
Speaker 2: For Bloomberg Business Seek, and she writes about why Trump's
Speaker 2: Buy American campaign will not improve the US economy. She
Speaker 2: joins us in the Bloomberg BusinessWeek Studio. Check out her
Speaker 2: story and more on the Bloomberg terminal at Bloomberg dot
Speaker 2: com slash BusinessWeek. Amanda, why doesn't this tend to work?
Speaker 3: Well?
Speaker 14: It depends on what you mean by work. Buy American
Speaker 14: campaigns are you know, sort of on their face, designed
Speaker 14: to increase consumption of American made products. Often that doesn't
Speaker 14: work because they do not meaningfully change the number of
Speaker 14: American made products available. So people generally buy what is
Speaker 14: you know, in front of them, what is easy to get,
Speaker 14: what is financially feasible for them to buy? And buy
Speaker 14: American campaigns aren't really designed to change that in any
Speaker 14: meaningful way, even over a long period of time. But
Speaker 14: I would argue, and I argue in the piece, that
Speaker 14: they're not really meant to do that, even though that's
Speaker 14: how they are presented to the public. They work quite
Speaker 14: well at stoking xenophobic sentiment, stoking anti immigrant sentiment, and
Speaker 14: aligning workers with the interest of their bosses, which I
Speaker 14: think historically that is what they're designed to do, and
Speaker 14: in that way they do work.
Speaker 5: Talk a little bit more about how these buy America
Speaker 5: campaigns impact the job market specifically, and what the data
Speaker 5: is showing us about whether these campaigns in history have
Speaker 5: actually brought jobs on shore.
Speaker 14: Historically, they don't move the job market that much industry
Speaker 14: by industry. Sometimes they can tweak short term circumstances a
Speaker 14: little bit, but what really matters is how much investment
Speaker 14: public investment there is in particular industries. Tariffs, if they're
Speaker 14: like really well designed to target particular industries, and if
Speaker 14: they're combined with broad scale investment in those industries to
Speaker 14: build them at home. All of that sometimes gets like
Speaker 14: bundled up with a buy American movement, and all of
Speaker 14: that together can like impact the future of a particular industry,
Speaker 14: but just telling people to buy American in general doesn't
Speaker 14: really have any mechanism by which it would increase employment.
Speaker 2: But Amanda, if the way that the Trump administration is
Speaker 2: thinking about this is a bit different than in the past,
Speaker 2: like let's say it's I don't know, instead of encouraging
Speaker 2: people to buy American, they're making it so it's really
Speaker 2: difficult not to buy American. So that product that is
Speaker 2: in front of you is less is actually the least
Speaker 2: expensive one because there is not a cheap import available.
Speaker 4: Does it work then?
Speaker 14: I think that we're sort of about to see if
Speaker 14: it works then. But there's reason to believe that even
Speaker 14: under these circumstances, even when the alternatives are really onerous,
Speaker 14: it wouldn't work in a lot of situations, because what
Speaker 14: does it mean to buy American in an economy where
Speaker 14: the supply chains are globalized, Different components come in from
Speaker 14: all kinds of different places, and then are you know,
Speaker 14: in the end assembled in America. A lot of things
Speaker 14: that are labeled as American goods contain foreign components or
Speaker 14: need raw materials from overseas that are then going to
Speaker 14: also be more expensive. And then there's just a lot
Speaker 14: of things that Americans want to buy that are not
Speaker 14: produced in any meaningful quantity in the United States, and
Speaker 14: there's really no way for them to be produced in
Speaker 14: the US, like take coffee, avocados, Like you can't satisfy
Speaker 14: American current American demand for these things with the American
Speaker 14: capacity to produce them ourselves. So you have this this
Speaker 14: situation where buying American has become sort of like a
Speaker 14: meaningless slogan because like what is an American product? I
Speaker 14: get into it in the story a little bit, but
Speaker 14: it's really hard to say, like what that even is.
Speaker 5: Yeah, this is a really detailed story, and I love
Speaker 5: that it starts with some American history and an homage
Speaker 5: back to the Boston Tea Party, which I didn't realize
Speaker 5: that you could trace the roots of that campaign all
Speaker 5: the way back to the beginning of the country. Maybe
Speaker 5: we could just end on where you see at least
Speaker 5: trumps buy America campaign going, and how we'll judge the
Speaker 5: efficacy of it, you know.
Speaker 6: Within four years from now.
Speaker 14: You know, it sort of depends where tariffs go because
Speaker 14: something that we see historically over the course of you know,
Speaker 14: a number of sort of like large buy American campaigns.
Speaker 14: What the you know, the volume of imports and the
Speaker 14: tendency to buy American goods really depends on is the
Speaker 14: overall economic situation. So if if we end up in
Speaker 14: a recession, it is likely that fewer imported goods are
Speaker 14: going to come into the country. But historically, once that
Speaker 14: recession ends, the trend fine on imported goods returns directly
Speaker 14: to whatever it would have been before the recession happens.
Speaker 14: So without like a like a robust plan for public
Speaker 14: investment in particular industries in the US, without more there there,
Speaker 14: I really don't see how this is going to make
Speaker 14: any positive long term changes in US manufacturing.
Speaker 4: Amand them all.
Speaker 2: Bloomberg Business Week senior reporter joining us back there in
Speaker 2: the Bloomberg Business Week Studio. Check out her, his story
Speaker 2: and more at a Bloomberg dot com slash business Week
Speaker 2: and also, of course, on the Bloomberg terminal.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from two to five e's during listen
Speaker 1: on Applecarplay and Android Otto with the Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 2: Well, the backlash against DEI has been Swift Coles just
Speaker 2: the latest retailer to back away from using DEI language
Speaker 2: amid criticism of the policies from the Trump administration.
Speaker 4: Under pressure, many companies across.
Speaker 2: Sectors, including Victoria's Secret Target metaplatforms in Walmart, have been
Speaker 2: pulling back from DEI, some dropping diversity related hiring and
Speaker 2: promotion goals. Really curious what Jensen Harris has to say
Speaker 2: about all this. He's the co founder and CEO of Texteo.
Speaker 2: The company makes software that removes bias from workplace communications,
Speaker 2: so think performance reviews, job descriptions, and more. Texto says
Speaker 2: that a quarter of the companies in the Fortune five
Speaker 2: hundred have used Texio. Full disclosure. Bloomberg is a customer
Speaker 2: of Textios. Bloomberg managers and other company leaders use the
Speaker 2: company software to ensure their job descriptions, performance reviews, and
Speaker 2: manager feedback are written in a way that's clear, fair
Speaker 2: and equitable. Also, Bloomberg Beta, the early stage VC company
Speaker 2: backed by Bloomberg LP, the parent company at Bloomberg Media,
Speaker 2: is an investor in Texteo. Jensen joins us from Las
Speaker 2: Veigs I guess Jetson, Good to see you. Have you
Speaker 2: noticed companies embracing your software differently. Just in the last
Speaker 2: few months have as we've seen such a backlash to DEI.
Speaker 12: Well, I think an important thing to realize is that
Speaker 12: most companies aren't actually stepping back from the principles of
Speaker 12: diversity of fairness in hiring and in how they treat
Speaker 12: their employees. Even after these executive orders that came out
Speaker 12: a few weeks ago, eighty percent of American companies have
Speaker 12: said they're staying the course or they're actually investing more
Speaker 12: in ensuring that they're hiring the best folks for their
Speaker 12: companies and giving them the tools to get fair feedback,
Speaker 12: for instance, that helps them grow and thrive. And so
Speaker 12: I actually think that almost every CEO understands that at
Speaker 12: the center of their business being successful are the people
Speaker 12: that they've hired and the people that they need to
Speaker 12: grow and promote to do great work. And so I
Speaker 12: don't think there's actually much controversy about when you want
Speaker 12: to hire the best people, you need to cast the
Speaker 12: widest net. I don't think that there's actually much controversy
Speaker 12: about you should treat your employees fairly and ensure that
Speaker 12: all of them have an opportunity to get the feedback
Speaker 12: they need to do a great job, and so I
Speaker 12: think kind of this is a bit of a tailwind
Speaker 12: actually for folks who actually want to invest in the
Speaker 12: people out of their companies.
Speaker 5: So talk about how Texteo has evolved. Because you launched
Speaker 5: the company in twenty fourteen. Obviously tech and AI has
Speaker 5: grown so much since then, and DEI has become much
Speaker 5: more of a hot button issue. What are the biggest
Speaker 5: changes that you've seen for Textio over the last few years.
Speaker 12: Yeah, So we were first to market as an artificial
Speaker 12: intelligence company to HR. We've been doing AI in the
Speaker 12: HR space for more than a decade now, and so
Speaker 12: the last decade has really been for us taking our
Speaker 12: core technology, which is about helping optimize talent. And we've
Speaker 12: started with hiring a decade ago, ensuring that people could
Speaker 12: build recruiting content, job postings and brand language that can
Speaker 12: attract the widest set of qualified candidates to roles. Really
Speaker 12: about hyper optimizing that content to perform well. And over
Speaker 12: the last decade we've just continued to get further and
Speaker 12: further into other important aspects of running a company. So
Speaker 12: we have done performance feedback optimization, ensuring that I mean,
Speaker 12: managers hate writing performance reviews, and we built software that
Speaker 12: gives them the ability to write really effective performance reviews.
Speaker 12: In halftime, we have done pure feedback. We're actually tomorrow
Speaker 12: introducing interview feedback, which is a new product that ensures
Speaker 12: and I think especially important in this world in which
Speaker 12: everyone is thinking about meritocracy and how can we ensure
Speaker 12: that we hire the best. The way you do that
Speaker 12: is by interviewing folks, And tomorrow we're announcing a product
Speaker 12: that actually optimizes interview feedback to ensure that it's clear
Speaker 12: that it's fair, that it's based on merit and to
Speaker 12: help companies know that they're hiring the best folks for
Speaker 12: the role. So that's really been the last decade for us.
Speaker 12: Then about broadening the application of our world class AI
Speaker 12: technology in a proprietary way to really transform all of hr.
Speaker 2: Hey Jensen, you said you were first to market with
Speaker 2: this type of AI. How do you train the AI?
Speaker 2: What is the II powered by? You know, we talk
Speaker 2: about AI now in the context of a lot of
Speaker 2: the lms that are powering what's happening in other services
Speaker 2: and other platforms like you know, anthropics, cloud or open
Speaker 2: aies chat, GPT.
Speaker 4: What power is your AI.
Speaker 12: Yeah, that's a great question. You know, we were one
Speaker 12: of the first companies that brought generative to business back
Speaker 12: in twenty nineteen, so more than five years ago, and
Speaker 12: so the idea of how do you train AI to
Speaker 12: be safe to use and effective is a really important
Speaker 12: one and one that we've been thinking about for a
Speaker 12: long time. So Textdeo's data is really based on a
Speaker 12: whole bunch of different signals in the world. Some of
Speaker 12: it is trained from sort of our signals of what's happening,
Speaker 12: you know, for instance, in recruiting across hundreds of millions
Speaker 12: of job posts in the world and seeing what goes up,
Speaker 12: what goes down, how fast is a job filling, how
Speaker 12: did different companies sound online, And we can take all
Speaker 12: of those signals along with sort of our proprietary knowledge
Speaker 12: of what actually is filling, what jobs are filling, what
Speaker 12: industries are filling, what language works well in different locales
Speaker 12: around the world, like I would talk to someone looking
Speaker 12: for a job from New York differently than I would
Speaker 12: London or San Francisco, for instance, And.
Speaker 7: We take.
Speaker 12: Which ends up being hundreds and hundreds of millions of
Speaker 12: data points and use that to create refine the models,
Speaker 12: and then humans are actually responsible for ensuring that those
Speaker 12: models can be trusted, that they're safe, and most importantly,
Speaker 12: that they actually work, that they actually create the optimizations
Speaker 12: that the models predict they will. Now we have a
Speaker 12: real advantage compared to a company like open ai, for instance,
Speaker 12: which is we build models just for HR. We are not,
Speaker 12: you know, writing a letter to Santa. We're not writing
Speaker 12: your one hot chicken recipe. We don't care about any
Speaker 12: of that general purpose stuff. We optimize in a hyper
Speaker 12: way for HR scenarios and HR optimization, and so in
Speaker 12: a sense we have a real leg up on everyone
Speaker 12: else in this space.
Speaker 5: We talk a lot on this show about supply chains
Speaker 5: and chip designers, and I'm wondering, as a company that
Speaker 5: uses AI, has it gotten cheaper? Has it gotten easier
Speaker 5: to leverage AI?
Speaker 4: Just in the last year or so, Certainly.
Speaker 12: The pace at which optimizations are happening and the pace
Speaker 12: at which compute is becoming more and more easy to
Speaker 12: access in a cost effective way, it has leveled the
Speaker 12: playing field a little bit. That said, it's still pretty expensive,
Speaker 12: and a lot of companies that over the last year
Speaker 12: or two have decided to try to layer on artificial
Speaker 12: intelligence on top of their legacy systems have found that
Speaker 12: it's an expensive proposition, and so I think that's a
Speaker 12: place where companies that really can embrace doing domain specific
Speaker 12: models for HR but or for finance for sales are
Speaker 12: going to find that they have a much easier job
Speaker 12: because the models are right size for the tasks versus again,
Speaker 12: an open AI general purpose model where you're paying for
Speaker 12: a lot of compute in some cases in order to
Speaker 12: get a relatively small amount of value.
Speaker 2: Back when you left Microsoft more than ten years ago
Speaker 2: to launch Texto, and Emily kind of alluded to this
Speaker 2: with the evolution of the company, what did you envision
Speaker 2: texto would do versus what it's doing now.
Speaker 12: So we started Texteo with a really clear vision that
Speaker 12: the world of HR was being behind and that we
Speaker 12: could take the technology that we had to turn these
Speaker 12: incredibly important aspects of business, right, I mean, think about it,
Speaker 12: there's probably nothing more important for most businesses than who
Speaker 12: you hire. Are those people great? Are you getting access
Speaker 12: to the best talent? And then how do you help
Speaker 12: those people grow? How do they give them the food,
Speaker 12: the water, the help, the you know, everything we think
Speaker 12: about you a greenhouse. All the people at your company,
Speaker 12: how do you give them all everything they need to thrive?
Speaker 12: And that is clear feedback, that's fair feedback. That's ensuring
Speaker 12: that they can tell their manager what's working, what's not working.
Speaker 12: It ensures that you get visibility across your entire workforce
Speaker 12: about who actually should be promoted and maybe who needs
Speaker 12: to let go because they're not a match. And so
Speaker 12: we knew that this was incredibly fundamental, and the tools
Speaker 12: that HR teams were using were locked in the past,
Speaker 12: locked in the general electric and IBM models of the
Speaker 12: nineteen fifties of how to do those things. And so
Speaker 12: we thought that we could, with a dual strength in
Speaker 12: AI and user interface, create next generation tools that would
Speaker 12: be phenomenally easy to use, but also transformative in terms
Speaker 12: of actually helping managers, for instance, not hate doing performance reviews,
Speaker 12: helping recruiters were stretched to the hilt with how many
Speaker 12: roles they have to fill now being cavisuals to automate
Speaker 12: that make it easier and to outcase their competitors and
Speaker 12: competing for talent.
Speaker 2: Jensen Good have to leave it there. Do appreciate you
Speaker 2: joining us this afternoon. Jensen Harris is the co founder
Speaker 2: and CEO of Text You.
Speaker 4: Rob macle I'll beout you let me drive. Oh no, no, no, no,
Speaker 4: this is not a toy, honey. Please, I'll revels. Excuse me,
Speaker 4: I want to drive.
Speaker 15: It's a good question.
Speaker 4: This is the drive to the clothes plunks for music.
Speaker 15: Well, briar Jela.
Speaker 4: Don on Bloomberg Radio.
Speaker 2: Well, we did just hear it from Charlie Pellett just
Speaker 2: about ten minutes fifteen minutes ago in the close of
Speaker 2: trading here, and we're seeing the S and P five
Speaker 2: hundred off. It's best levels of the day, but still
Speaker 2: up one percent. Well, the Dow out performing up one
Speaker 2: point one percent, the NASDAK composite higher by just about
Speaker 2: seven tenths of one percent. Let's see what George Young
Speaker 2: has to say about this. He's a partner and portfolio
Speaker 2: manager at Villary Funds. He joins us from New Orleans.
Speaker 2: He manages the Villary balance to funds. V I l
Speaker 2: X is the ticker year to date, it's in the
Speaker 2: forty eighth percent, down just about one tenth of one percent.
Speaker 4: George, how are you good? To see you right doing?
Speaker 12: All right?
Speaker 4: Hey, we're trying to.
Speaker 2: Figure out the actual effect on markets that this president
Speaker 2: is having right now, because he's getting a lot of
Speaker 2: attention for the selloff that we saw in the last
Speaker 2: few weeks. Do you think the sell off is a
Speaker 2: result of uncertainty around tariffs and Trump's policies.
Speaker 15: I do.
Speaker 16: The market really does not like uncertainty, and you've had
Speaker 16: all sorts of different uncertainties. It's a lack of predictability
Speaker 16: and that makes our job tough. That makes regular investors
Speaker 16: job tough. So you want to know about intert rates,
Speaker 16: You want to the economy, Well, that's going to be
Speaker 16: directly affected by tariffs, and that is going to get
Speaker 16: passed on at the consumer. How the consumer reacts as
Speaker 16: the big question.
Speaker 5: So obviously a lot of the downturn in stocks as
Speaker 5: of late, I guess has to do with all of
Speaker 5: that uncertainty on the horizon. When do you think the
Speaker 5: market downturn end? I mean, we are up today, but
Speaker 5: when you look at the SMP year to date, we're
Speaker 5: down about three percent.
Speaker 15: Yep, that's correct. Well, a couple of comments to that.
Speaker 16: The SMP is down three percent, but if you take
Speaker 16: out the magnificent seven, the SMB is actually up. So
Speaker 16: that's one of the things I think that we're focused
Speaker 16: on is you don't want to fall in love with
Speaker 16: the stock.
Speaker 15: It won't love you back.
Speaker 16: So the Magnificent Seven have been darlings for the past year,
Speaker 16: the past couple of years. So we try to look
Speaker 16: for things that are undiscovered, that are unrecognized, that have value,
Speaker 16: and it can offer the dividend return, can offer growth,
Speaker 16: and specifically you want to look long term. So I
Speaker 16: can't give you a data to stay exactly when the
Speaker 16: market's going to turn this way or that way. But
Speaker 16: what I can tell you if you look at history,
Speaker 16: is that the stock market has outperformed the bond mark,
Speaker 16: and the US stock market in particularly we're domestically oriented,
Speaker 16: has outperformed what other indexes in the world have done.
Speaker 16: So we remain optimistic and we try to look past
Speaker 16: the vagaries the whip saw, and that can be problematical
Speaker 16: for investors.
Speaker 2: Well, Georgie, you sent along some stock picks. I want
Speaker 2: to go through a couple of them. I want to
Speaker 2: start with Lineage, the global temperature controlled warehouse that that's
Speaker 2: comprised of cold storage warehouses.
Speaker 4: You're bullish on this company, it's a reed. Why do
Speaker 4: you love it?
Speaker 16: Well, we love it for a couple of reason. You
Speaker 16: get growth and you can also get the income, so
Speaker 16: it's set up like a ree as you said. But
Speaker 16: what's interesting, they're the largest in the world that when
Speaker 16: public a couple of years ago, the founders still own
Speaker 16: about thirty percent of the company, so they put their
Speaker 16: money where their mouth is. They did go public for
Speaker 16: liquidity purposes, but at the same time they believed in
Speaker 16: this company long term. So the important thing is they've
Speaker 16: got over four hundred centers around the world. They're the
Speaker 16: largest in the world. They've got ninety six different patents,
Speaker 16: and all the food that we not all the food,
Speaker 16: the vast majority of the food that we consume is
Speaker 16: shipped and stored in climate controlled warehouses.
Speaker 15: So it's important that you.
Speaker 16: Understand that they're the most efficient they have. We just
Speaker 16: toured a facility about a month ago that's local here
Speaker 16: in New Orleans. They're the most up to date. It's
Speaker 16: not the old day where you had palettes who were
Speaker 16: being run around left and right.
Speaker 15: This is automated, this is mechanical. This is very efficient stuff.
Speaker 6: Okay, that's food warehouses.
Speaker 5: Tell us about copper because one of your other picks
Speaker 5: is Report macmarin sure.
Speaker 16: So if you contrast that with something like oil that
Speaker 16: has anywhere from a ten to a thirty year useful
Speaker 16: life in most drilling prospects, this has a ninety year
Speaker 16: life and there's no substitute for copper. Again, look at
Speaker 16: something another commodity like oil, there are arguably other substitutes,
Speaker 16: alternative energies, etc. When it comes to copper, that's all
Speaker 16: you can use, and they are in very difficult places.
Speaker 16: Freeport Copper owns one of the largest in the world
Speaker 16: of Grassburg mine in Indonesia. Copper is dependent on demand,
Speaker 16: and that is somewhat dependent on Chinese demand specifically.
Speaker 15: But if you look at every electric vehicle, everything you.
Speaker 16: Own, energy is electricity is clean energy, and you need
Speaker 16: copper to make that work.
Speaker 15: We love for report.
Speaker 2: Hey George, before we let you go, Atlas Energy as
Speaker 2: a number another one of your picks. They under sand
Speaker 2: in the Premium Basin in Texas. What's your view on Alice.
Speaker 16: Well, it's interesting they have the sand and they also
Speaker 16: have something called Dune Express, which is a forty two
Speaker 16: mile conveyor belt throughout West I just.
Speaker 2: Heard about this conveyor belt in a podcast that I
Speaker 2: was listening to over the weekend. This is what is
Speaker 2: it the largest conveyor belt in the country.
Speaker 15: Exactly, you're telling my story for me.
Speaker 12: This is great.
Speaker 15: So they've got a wonderful yield of about five percent.
Speaker 16: They've been a little rocky recently because it made what
Speaker 16: we think is a great acquisition to provide energy electricity
Speaker 16: to these wells being difficult location. So again it's sort
Speaker 16: of like the Freeport story, where is the copper difficult
Speaker 16: places West Texas, difficult to get energy out there. But
Speaker 16: more importantly, sand has been shipped by trucks heretofore, which
Speaker 16: is slow, expensive and very dangerous.
Speaker 15: So this Dune Express is going to save money, It's
Speaker 15: going to save lives. It's great, great change.
Speaker 2: I feel like I got to do a remote broadcast
Speaker 2: from this conveyor belt just to see it, or maybe
Speaker 2: go for a ride on this conveyor belt. George, really
Speaker 2: appreciate you joining us. Thanks so much for taking the
Speaker 2: time this afternoon. George Young's portfolio manager at Villary Funds.
Speaker 2: He joins us from New Orleans.
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