WEBVTT - Broadcom Seeks More Than $60 Billion in Latest AI Debt Deal 0:00:02.520 --> 0:00:07.000 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.680 --> 0:00:13.000 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:25.960 --> 0:00:31.320 Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.600 --> 0:00:34.120 One of the things we want to get to too 0:00:34.280 --> 0:00:36.040 is a story that we've been keeping an eye on, 0:00:36.200 --> 0:00:40.240 and that has to do with Broadcom and the company 0:00:40.240 --> 0:00:44.040 apparently in talks with a group of lenders to raise 0:00:44.080 --> 0:00:47.000 more than sixty billion dollars in debt from AICHIP financing 0:00:47.040 --> 0:00:50.519 deal that will benefit Anthropic and other companies, according to 0:00:50.520 --> 0:00:52.800 people with knowledge of the matter of this right through, 0:00:53.440 --> 0:00:55.800 let me just see it hit just after the closing 0:00:55.840 --> 0:00:57.560 ball and just real quickly, let me just pull it 0:00:57.680 --> 0:01:00.960 up and see if we've seen, yeah, you see shares 0:01:01.000 --> 0:01:04.080 a broadcome just up about four tens of a percent 0:01:04.200 --> 0:01:06.000 or show here in the aftermarket. 0:01:06.319 --> 0:01:07.840 We should get to it with Ryan Gold. 0:01:08.640 --> 0:01:11.120 He is Bloomberg News Deal reporter and he is in 0:01:11.160 --> 0:01:15.520 the Bloomberg News Washington d CPR Hey busy, busy guy. Uh, 0:01:15.720 --> 0:01:19.480 these deals fast and furious. Tell us about Broadcom, Ryan, 0:01:19.520 --> 0:01:20.240 would you find out? 0:01:21.160 --> 0:01:21.399 Yeah? 0:01:21.480 --> 0:01:24.160 Sure, good to see Carol. As always, I think this 0:01:24.240 --> 0:01:27.320 one is if this, you know, this comes to lie, 0:01:27.400 --> 0:01:29.800 comes to pass, this would be among the largest that 0:01:29.840 --> 0:01:31.920 we've seen of this type of deal. I want to 0:01:31.920 --> 0:01:33.920 just throw us back a little bit to June when 0:01:33.959 --> 0:01:38.360 we saw Broadcom announced that that partnership with Blackstone and Apollo, 0:01:38.400 --> 0:01:41.120 where essentially they were looking to strike an agreement to 0:01:41.120 --> 0:01:45.360 provide sort of twenty gigawats of compute globally for AI deployment. 0:01:45.440 --> 0:01:47.080 I mean, I think you could probably see this as 0:01:47.120 --> 0:01:50.720 some kind of extension of that agreement of sorts. This 0:01:50.760 --> 0:01:55.040 would essentially see Blackstone and Apollo participate again per our 0:01:55.120 --> 0:01:58.200 sourcing and reporting in a deal that could essentially see 0:01:58.320 --> 0:02:01.320 Wallcom lineup as much much is one hundred billion dollars 0:02:01.360 --> 0:02:03.120 in debt. I mean, when you put that together, it's 0:02:03.120 --> 0:02:05.840 sort of thirty billion being provided by Apollo and Blackstone, 0:02:06.200 --> 0:02:09.519 and then Broadcom itself essentially looking at maybe backstopping such 0:02:09.639 --> 0:02:13.200 guaranteeing somewhere in the region of sixty to seventy billion 0:02:13.240 --> 0:02:16.560 dollars per sourcing. So not insignificant. And I think this 0:02:16.720 --> 0:02:18.760 is kind of you know, where the trend is sort 0:02:18.760 --> 0:02:21.040 of heading right now, which is just this insatiable need 0:02:21.120 --> 0:02:23.240 for AI compute to use the job. 0:02:23.320 --> 0:02:25.639 And I will just say the market takes it or 0:02:25.680 --> 0:02:28.480 we'll see, right like, ultimately that's what we continue to 0:02:28.520 --> 0:02:31.919 watch if there's the investor appetite. But as we talked 0:02:31.960 --> 0:02:35.280 earlier at the beginning of our broadcast with Ira Jersey 0:02:35.280 --> 0:02:40.880 and Michael McKenzie, you know, investors are you know, offering 0:02:40.919 --> 0:02:43.960 these corporate offerings for debt are higher than what you're 0:02:43.960 --> 0:02:48.600 seeing maybe in treasuries and potentially crowding out increasingly the 0:02:49.440 --> 0:02:51.720 interest I should say when it comes to treasury demand. 0:02:51.960 --> 0:02:54.079 Yeah, Ran, I mean, do we have an understanding yet 0:02:54.080 --> 0:02:57.720 of like what kind of debt this would take form of? 0:02:57.800 --> 0:03:00.480 I mean, we know that Blackstone and Apollo will be 0:03:00.840 --> 0:03:03.760 leading the financing, but you have to imagine that they're 0:03:03.800 --> 0:03:07.239 going to be several different tranches and they'll be selling 0:03:07.280 --> 0:03:09.440 this to other institutional. 0:03:08.960 --> 0:03:12.560 Investors, right totally. Yeah. So, I mean, in the in 0:03:12.600 --> 0:03:14.040 the story we just put out that just coross a 0:03:14.040 --> 0:03:15.840 short while ago. I mean, I think the best way 0:03:15.880 --> 0:03:17.760 to probably think about this is that the Blackson and 0:03:17.800 --> 0:03:21.119 Apollo piece will be a junior piece and then sort 0:03:21.160 --> 0:03:24.040 of chunk the slug that Broadcom is looking to. You 0:03:24.040 --> 0:03:25.920 know that that sixty billion piece, if you will, is 0:03:25.960 --> 0:03:29.400 going to be you know, senior secured, and they are 0:03:29.520 --> 0:03:32.760 out to two banks among others as part of that group. 0:03:32.800 --> 0:03:34.040 You know that you would have to expect that there 0:03:34.040 --> 0:03:35.960 will be a number of banks here that would be 0:03:36.000 --> 0:03:38.480 looking to help will come with this because I think, 0:03:38.520 --> 0:03:40.800 you know, if you think about the just the sort 0:03:40.800 --> 0:03:43.800 of cost of providing something on this scale, I mean, 0:03:43.840 --> 0:03:46.120 Broadcom is looking to do this as efficiently as possible. 0:03:46.160 --> 0:03:48.880 In Hog ten, the CEO of Broadcom is known for 0:03:48.960 --> 0:03:52.680 this very very intricate kind of financial engineering, and in fact, 0:03:52.680 --> 0:03:55.000 I think Broadcom has become kind of an industry leader 0:03:55.040 --> 0:03:57.000 in this in this part of the sort of chips 0:03:57.000 --> 0:04:00.520 financing space. So I mean, when you say think about 0:04:00.560 --> 0:04:03.720 this in the round, this is kind of unprecedented. But 0:04:03.760 --> 0:04:05.840 for for if anyone's going to pull this something like 0:04:05.880 --> 0:04:07.080 the self, the people will come. 0:04:07.640 --> 0:04:12.560 It definitely just shows right Ryan, like how expensive it 0:04:12.640 --> 0:04:15.480 is for these companies to build out all of the 0:04:15.520 --> 0:04:20.159 AI infrastructure with that prior deal that Blackstone Apollo led. 0:04:20.200 --> 0:04:23.080 It was thirty five billion dollars, but it was only 0:04:23.200 --> 0:04:28.920 to build out capacity for one gigawat you know, of compute. 0:04:29.080 --> 0:04:31.560 And in your story here, you know, we're talking about 0:04:31.600 --> 0:04:35.719 a partnership that could eventually reach twenty gigawatts of compute. 0:04:35.720 --> 0:04:37.320 So there's gonna be a lot more of these, right. 0:04:38.320 --> 0:04:40.040 Yeah, I mean this is I think this is kind 0:04:40.040 --> 0:04:41.919 of the tip of the iceberg, and I think you 0:04:42.080 --> 0:04:44.360 have to wonder. You know, we sort of single out 0:04:44.360 --> 0:04:46.440 Onthropic at the top of that story on the Bloomberg, 0:04:46.480 --> 0:04:48.400 but you know, there are also going to be other 0:04:48.440 --> 0:04:51.440 companies and the beneficiaries of this deal, and this will 0:04:51.440 --> 0:04:54.080 come out in the wash. But I think if you're 0:04:54.720 --> 0:04:56.400 if you're looking on now, I mean, do you think 0:04:56.440 --> 0:04:59.880 about the agreements of woll compas with other companies including Apple. 0:05:00.040 --> 0:05:01.840 We saw that out there. They have their cord that 0:05:01.839 --> 0:05:04.760 they announced earlier this year. I don't want to throw 0:05:04.800 --> 0:05:06.160 it back there, but I will go there. I mean, 0:05:06.600 --> 0:05:08.359 you know, do we start to talk about the circular 0:05:08.360 --> 0:05:09.039 financing things? 0:05:09.080 --> 0:05:09.279 Yeah? 0:05:09.279 --> 0:05:10.720 And I don't know, perhaps. 0:05:10.480 --> 0:05:12.880 I don't know, but here we are, you know, and 0:05:12.880 --> 0:05:14.960 I think this is something we have to watch, right Ryan, 0:05:15.080 --> 0:05:17.400 I've just I go back to the interest. I mean, 0:05:17.440 --> 0:05:19.960 as long as investors are willing to support it, why 0:05:19.960 --> 0:05:23.719 wouldn't you tap the credit markets or the debt markets 0:05:23.720 --> 0:05:26.240 and continue with the fundraise. I will say when we 0:05:26.240 --> 0:05:29.000 talk to Ourmandy seeing a Bloomberg intelligence who looks at 0:05:29.040 --> 0:05:32.160 the AI spend as a whole, I mean, a lot 0:05:32.200 --> 0:05:34.200 of the fundamentals seem to continue to be there in 0:05:34.279 --> 0:05:37.359 terms of backlogs and demand. We saw that on the 0:05:37.400 --> 0:05:41.400 recent earnings, and a lot of folks anticipate who are 0:05:41.440 --> 0:05:43.680 in this sector, mind you, they might be talking their 0:05:43.720 --> 0:05:46.400 book expect us to continue for a couple more years. 0:05:47.120 --> 0:05:49.680 Yeah, and I think that's probably true. I think you 0:05:49.760 --> 0:05:51.640 also have to think about this in the context of 0:05:51.720 --> 0:05:55.320 the Nvidia transaction that we saw. You know, those that 0:05:55.400 --> 0:05:57.920 group of CEOs Goldman, I mean, David Solomon was there, 0:05:58.040 --> 0:06:00.960 Larry Think was involved, that group of that group of 0:06:01.040 --> 0:06:04.520 financing partners sort of coming together for one provider. I mean, 0:06:04.600 --> 0:06:06.320 now you have a sense to where I think more 0:06:06.360 --> 0:06:08.839 Come is probably going more down the private capital route. 0:06:08.960 --> 0:06:10.800 I think it's just it's it's different, right, I think 0:06:10.800 --> 0:06:12.640 it's two sides of the same coin in a way. 0:06:13.320 --> 0:06:15.960 I think investors will clearly take a view on sort 0:06:15.960 --> 0:06:17.960 of the securitization of all of this. I think the 0:06:17.960 --> 0:06:20.840 in Video agreement itself still has a little bit of uh, 0:06:20.880 --> 0:06:22.560 you know, there are a few details there that still 0:06:22.600 --> 0:06:24.520 need to be sort of fleshed out as far as 0:06:24.520 --> 0:06:27.240 how you actually securitize those chips as a financing class 0:06:27.600 --> 0:06:30.839 and that's a class. Sorry, but you know that itself 0:06:30.960 --> 0:06:33.560 was entirely novel. This is this is also novel. I 0:06:33.600 --> 0:06:36.599 think that in Video deal did obviously unnerve a few people, 0:06:36.640 --> 0:06:39.600 but this is just I think people having to think 0:06:39.600 --> 0:06:41.920 on the fly here as far as the SAI financing 0:06:42.560 --> 0:06:43.920 rollout is concerned, right. 0:06:43.800 --> 0:06:45.159 And maybe it's just a case of it's just so 0:06:45.320 --> 0:06:48.280 massive that we've got to be innovative disrupt a little bit. 0:06:48.400 --> 0:06:50.680 Or when you start to innovate or disrupt too much, 0:06:50.720 --> 0:06:53.160 is it a sign that maybe something's not quite right? 0:06:53.200 --> 0:06:55.039 And this is what we're all trying to figure out here. 0:06:55.080 --> 0:06:58.599 But the cap RaSE is still happening. Ryan, thanks so 0:06:58.640 --> 0:07:01.320 much for jumping on. This is obviously a big story 0:07:01.640 --> 0:07:04.920 for us continuously, so good to get your view on that. 0:07:04.960 --> 0:07:07.839 Of course. Is are Ryan Gould. He's Bloomberg News Deals reporter, 0:07:07.920 --> 0:07:11.000 out there in DC. Stay with us. 0:07:11.120 --> 0:07:14.160 More from Bloomberg Business Weekdaily coming up after this. 0:07:17.720 --> 0:07:21.680 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:07:21.800 --> 0:07:25.239 Live weekday afternoons from two to five pm Eastern. Listen 0:07:25.280 --> 0:07:28.840 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:07:28.960 --> 0:07:31.360 or watch US Live on YouTube. 0:07:32.200 --> 0:07:36.200 Hey, Wells Fargo today out publishing its first GLP one report. 0:07:36.720 --> 0:07:40.760 There's so much money invested in these GLP one so 0:07:41.040 --> 0:07:42.320 the banks have to get involved. 0:07:42.600 --> 0:07:44.320 They all know well they do, right. 0:07:44.200 --> 0:07:46.280 And what's interesting is I feel like the last three 0:07:46.360 --> 0:07:48.920 years it's been AI and GLP one and there's been 0:07:49.000 --> 0:07:52.040 certainly ups and downs in the narrative has changed. Specifically 0:07:52.080 --> 0:07:55.120 this report, it is their first of its kind from 0:07:55.120 --> 0:07:59.880 Wells Fargo. It's about how GLP ones are reshaping America's 0:08:00.160 --> 0:08:02.960 health spending, habits and healthcare system. 0:08:03.040 --> 0:08:05.720 Emily, I thought this was a very interesting perspective because 0:08:05.760 --> 0:08:08.520 you hear a lot about how these weight loss drugs 0:08:08.560 --> 0:08:12.000 are impacting like what people are eating and like snack 0:08:12.080 --> 0:08:15.080 companies bose if they're losing weight exactly. But this is 0:08:15.080 --> 0:08:18.000 specifically on the healthcare system. So let's get into it. 0:08:18.040 --> 0:08:21.320 We're joined now by Robin Wenzel, head of Wells Fargo 0:08:21.440 --> 0:08:25.040 Industry Insights with us from Minneapolis. Robin, great to see you, 0:08:25.040 --> 0:08:28.040 Thanks for joining us. Tell us about this report and 0:08:28.120 --> 0:08:30.760 why now, why look into this trend right now? 0:08:32.320 --> 0:08:34.439 Thanks so much for having me. It's great to be here. 0:08:34.720 --> 0:08:34.920 You know. 0:08:34.960 --> 0:08:37.360 One of the reasons why is we have a large 0:08:37.400 --> 0:08:41.400 healthcare practice, a dedicated team that specializes in and we 0:08:41.600 --> 0:08:43.800 like to make sure we stay ahead of a lot 0:08:43.840 --> 0:08:47.840 of the topics and conversations that impact those businesses. So 0:08:48.000 --> 0:08:50.920 for us looking at jop ones, we've all certainly seen 0:08:50.960 --> 0:08:54.440 a lot of conversation around how it impacts consumer purchasing 0:08:54.760 --> 0:08:58.240 and grocery stores sales, but we really wanted to dig 0:08:58.280 --> 0:09:01.960 in and understand the implication for the healthcare industry, and 0:09:02.040 --> 0:09:04.240 many of the things that we found were quite surprising 0:09:04.320 --> 0:09:09.640 to us, Like what you know, I'll start with bariatric surgeries. 0:09:09.720 --> 0:09:13.000 If we look at the rate of bariatric surgeries between 0:09:13.080 --> 0:09:15.360 twenty twenty two and twenty twenty four, we saw them 0:09:15.360 --> 0:09:18.720 declined by over thirty percent, and that was at a 0:09:18.760 --> 0:09:21.600 time where we saw GLP usage rise by about one 0:09:21.679 --> 0:09:25.120 hundred and twenty percent. So veriatric surgery has really been 0:09:25.160 --> 0:09:29.079 a go to for managing late stage obesity and helping 0:09:29.120 --> 0:09:29.720 to bring. 0:09:29.520 --> 0:09:30.320 That weight down. 0:09:30.960 --> 0:09:34.120 And when we look at the impact of GLP ones, 0:09:34.280 --> 0:09:37.240 really a game changer in terms of results and being 0:09:37.240 --> 0:09:39.199 able to help people get that weight off in a 0:09:39.320 --> 0:09:43.120 very effective manner. So being able to use that pharmaceutical 0:09:43.200 --> 0:09:46.520 off ramp to avoid surgery is certainly a nice outcome 0:09:46.559 --> 0:09:49.760 for many people. Conversely, though, on the other side, we 0:09:49.800 --> 0:09:52.600 do see people that we're not able to get the 0:09:52.720 --> 0:09:56.240 veriatric surgery, but the GLP ones are allowing them to 0:09:56.280 --> 0:09:59.040 get to a healthier weight that allows that surgery to 0:09:59.200 --> 0:09:59.880 be possible. 0:10:00.960 --> 0:10:05.880 So great for people, right, But you know, when I 0:10:05.880 --> 0:10:10.360 think about healthcare, great for people and great and probably 0:10:10.400 --> 0:10:11.520 extending their lives in so. 0:10:11.440 --> 0:10:12.040 Many different ways. 0:10:12.080 --> 0:10:13.640 But I do think about the impact too on like 0:10:14.000 --> 0:10:20.199 healthcare systems and hospital systems. Right that they're doing less surgeries. 0:10:21.040 --> 0:10:23.640 Absolutely, and I think what we have to look at. 0:10:23.600 --> 0:10:28.000 Is understand that this is a long term solution to obesity, 0:10:28.440 --> 0:10:30.680 So it can take time for these drugs to take 0:10:30.720 --> 0:10:33.960 effect to have impacts, So certainly a lot of the 0:10:34.040 --> 0:10:36.960 care that these patients receive will be ongoing. It's going 0:10:37.000 --> 0:10:39.600 to be a slow off ramp for them. But it's 0:10:39.679 --> 0:10:42.760 also nice to be able to have some other solutions 0:10:42.760 --> 0:10:44.960 and open the doors for others who have been battling 0:10:44.960 --> 0:10:48.800 obesity and some of the complications with it. I think 0:10:48.840 --> 0:10:52.760 for hospitals it's an opportunity to really change the game 0:10:52.880 --> 0:10:56.920 and maybe the profit centers for helping these patients so 0:10:57.000 --> 0:11:02.000 it can become more about outpatient services, medication management, management 0:11:02.040 --> 0:11:05.280 of side effects, and really you're on these weight loss 0:11:05.520 --> 0:11:09.640 drugs for life, so the ongoing help and support to patients. 0:11:10.320 --> 0:11:14.800 How are the drugs reshaping what pharmaceutical companies choose to 0:11:14.840 --> 0:11:16.320 pursue and do research on. 0:11:18.080 --> 0:11:20.560 You know, that's a great question, and it's an interesting one. 0:11:20.600 --> 0:11:21.800 We can see that the late. 0:11:21.679 --> 0:11:26.000 State pipeline of pharmaceutical R and D is heavily weighted 0:11:26.080 --> 0:11:30.239 towards GLP ones and it's not necessarily just for obesity. 0:11:30.320 --> 0:11:33.280 We are seeing other opportunities coming out of these drugs 0:11:33.280 --> 0:11:37.200 and potential opportunities. One is the treatment of substance abuse, 0:11:37.240 --> 0:11:40.440 specifically alcohol abuse, and so we've seen some research going 0:11:40.480 --> 0:11:44.640 into that. We've certainly heard about maybe some positive results 0:11:44.760 --> 0:11:49.880 around Parkinson's disease and dementia. So I think expanding and 0:11:50.080 --> 0:11:53.560 understanding these drugs and how they can help with other 0:11:53.640 --> 0:11:57.160 disorders is really a focus for some of these manufacturers. 0:11:57.480 --> 0:11:59.600 Kay, I feel like Robin, I'm the Debbie Downer here. 0:12:00.160 --> 0:12:03.880 I'm just going to go there. No, I've kitted with 0:12:04.000 --> 0:12:07.280 our reporter Madison Muller, who has covered this space extensively 0:12:07.360 --> 0:12:09.560 and so smartly, But it does feel like this is 0:12:09.600 --> 0:12:12.520 the drug that can cure so much that ails us. 0:12:12.559 --> 0:12:16.320 Having said that, it's also a reminder that having extra 0:12:16.400 --> 0:12:19.200 weight or being obese is a problem for your health. 0:12:19.200 --> 0:12:21.600 It's a reality and I don't want to get into 0:12:22.360 --> 0:12:26.440 how that can get you know, people uncomfortable about criticizing that, 0:12:26.520 --> 0:12:29.120 but it's just a fact of life right in terms 0:12:29.120 --> 0:12:32.480 of your health. But the other thing what I'm thinking 0:12:32.480 --> 0:12:36.600 about is how does the emphasis and stress a GLP 0:12:36.720 --> 0:12:39.720 wants maybe crowd out R and D spending on other 0:12:39.840 --> 0:12:43.160 drugs that also need to be discovered. 0:12:44.240 --> 0:12:46.720 You know, So they're taking up a bigger share of 0:12:46.760 --> 0:12:49.760 the late stage R and D pipeline, that doesn't necessarily 0:12:49.840 --> 0:12:52.920 mean that they're taking out dollars. So we can see 0:12:52.920 --> 0:12:57.120 that GLP brouds have outpaced onpology, you know, as a 0:12:57.200 --> 0:13:00.000 percentage of R and D spend, But that doesn't mean 0:13:00.120 --> 0:13:04.000 that those dollars towards oncology have diminished. In fact, they haven't. 0:13:04.480 --> 0:13:06.679 So I think what we're seeing is that we have 0:13:07.000 --> 0:13:10.439 a very widespread problem, specifically here in the US, with 0:13:10.600 --> 0:13:15.000 forty percent of US adults classified as obese. It's a 0:13:15.040 --> 0:13:19.680 medical diagnosis and so finding treatment for this population. As 0:13:19.720 --> 0:13:22.760 you said, it's all aspects of their health. So there's 0:13:22.760 --> 0:13:26.120 a cardiovascular element to this too, So it's really not 0:13:26.440 --> 0:13:29.960 just a weight loss drug. It's a cardio metabolic drug, 0:13:30.320 --> 0:13:33.440 and so it can be a game changer towards the 0:13:33.440 --> 0:13:38.120 health and prevention for many many people, impacting several that 0:13:38.320 --> 0:13:41.200 can benefit from this drug and enjoy a much healthier life. 0:13:41.240 --> 0:13:44.080 I've seen it directly, like impact people and just they 0:13:44.120 --> 0:13:47.280 are so much healthier, and it's just their their outlook 0:13:47.600 --> 0:13:48.959 and situation is so much better. 0:13:49.160 --> 0:13:51.760 Yeah, I mean, Robin, what are the This is pivoting 0:13:51.800 --> 0:13:53.840 a little bit, but I do want to ask what 0:13:53.920 --> 0:13:57.439 are the investment implications from this report? What do investors 0:13:57.480 --> 0:13:57.920 need to know. 0:13:59.400 --> 0:14:01.880 You know, who are looking at a situation where it's 0:14:01.920 --> 0:14:05.319 heavily weighted towards these drugs, and so any sort of 0:14:05.440 --> 0:14:09.360 disruption that could happen supply constraints, those would ripple through 0:14:09.400 --> 0:14:11.800 and they would have an impact, maybe broader than most 0:14:11.800 --> 0:14:15.200 people would expect. I do think there's a lot of 0:14:15.600 --> 0:14:18.000 research still to be done, and so the fact that 0:14:18.040 --> 0:14:21.120 there's money and capital going into it is a good thing. 0:14:21.280 --> 0:14:23.520 The other good thing is we are seeing the results 0:14:23.920 --> 0:14:26.680 and so it is very promising in many areas. I'm 0:14:26.760 --> 0:14:29.880 encouraged by the investment, but I would just caution that 0:14:30.080 --> 0:14:31.760 it could have some larger impact. 0:14:32.040 --> 0:14:33.920 So do any hiccups happen along the way? 0:14:34.280 --> 0:14:34.480 You know? 0:14:34.520 --> 0:14:36.760 One of the things I wanted to ask you, like 0:14:36.920 --> 0:14:40.800 orthopedics or something like that, where losing weight or being 0:14:40.960 --> 0:14:42.920 slummer can be better on your joints. It's not so 0:14:43.000 --> 0:14:44.560 much stress and so on and so forth. So maybe 0:14:44.600 --> 0:14:47.880 there's less demand for surgeries or so on. 0:14:48.240 --> 0:14:49.520 But at the same time. 0:14:49.320 --> 0:14:52.200 If GLP ones, which is a good thing, is enabling 0:14:52.240 --> 0:14:56.480 folks to live longer and being a drug that's so 0:14:56.600 --> 0:14:59.800 productive in helping a lot of different things, that certainly 0:15:00.000 --> 0:15:05.800 an individual that might orthopedics benefit because we're just around longer, 0:15:06.120 --> 0:15:07.800 we're going to all need kind of an overhaul. 0:15:09.000 --> 0:15:11.040 Yeah, I think it's an excellent point, and I don't 0:15:11.040 --> 0:15:13.840 think the data has settled on it yet. So you know, 0:15:13.880 --> 0:15:16.200 on one hand, one of the side effects of long 0:15:16.280 --> 0:15:17.520 term obesity. 0:15:17.040 --> 0:15:18.480 Is that wear and tear on the joints. It's the 0:15:18.560 --> 0:15:20.280 heap replacement of the hip replacements. 0:15:20.680 --> 0:15:23.640 If we're able to prevent the weight and keep the 0:15:23.680 --> 0:15:26.320 weight off, that could in theory reduce the need for 0:15:26.720 --> 0:15:31.720 those extra interventions. However, you know, as you point out, 0:15:31.760 --> 0:15:33.840 if you become healthier, you lose weight, you can become 0:15:33.880 --> 0:15:36.440 more active. You know, we can see a whole new 0:15:36.480 --> 0:15:40.400 slew of runners out there right and people embracing exercise. 0:15:40.520 --> 0:15:42.480 So it's a mixed bag. 0:15:43.080 --> 0:15:45.640 And I'll go back to to the the opportunity that 0:15:45.640 --> 0:15:49.760 that weight loss presents again, people who wouldn't otherwise qualify 0:15:50.640 --> 0:15:53.120 for the surgery, now it opens the doors for them 0:15:53.160 --> 0:15:56.000 as well by allowing them to lose weight and get 0:15:56.000 --> 0:15:56.760 a little healthier. 0:15:56.960 --> 0:15:59.680 Yeah, now, I love this. I love this deep dive. 0:16:00.240 --> 0:16:03.400 Thank you so much, really really appreciate it. Robin Wendel 0:16:03.800 --> 0:16:07.280 joining us. She is head of Wells Fargo Industry Insights. 0:16:07.040 --> 0:16:08.160 Joining us from Minneapolis. 0:16:08.160 --> 0:16:11.560 Their new report about how jlp ones are reshaping the 0:16:11.600 --> 0:16:12.840 business of healthcare. 0:16:13.120 --> 0:16:17.120 You're listening to the Bloomberg Business Weekdaily podcast. Catch us 0:16:17.200 --> 0:16:20.640 live weekday afternoons from two to five pm Eastern. Listen 0:16:20.680 --> 0:16:23.440 on Apple CarPlay and the Android Auto with the Bloomberg 0:16:23.480 --> 0:16:26.160 Business app, or watch us live on YouTube. 0:16:27.080 --> 0:16:28.880 We're going to head out to our West coast, San 0:16:28.880 --> 0:16:32.480 Francisco and Laura Blushe is senior editor for Bloomberg Business Week. 0:16:32.720 --> 0:16:35.920 Hey, Laura, good to have you here with us. A 0:16:35.960 --> 0:16:36.680 lot going on. 0:16:36.960 --> 0:16:39.160 Tell us, I feel like we were talking earlier a 0:16:39.200 --> 0:16:44.280 little bit about climate change, heating temperatures, landfills though have 0:16:44.360 --> 0:16:45.440 been a problem for a while. 0:16:45.560 --> 0:16:47.760 What's going on and what did you guys pick up on? 0:16:49.200 --> 0:16:51.280 Yeah, thank you so much for having me. I mean, 0:16:51.360 --> 0:16:53.600 just to set the stage a little bit. You know, 0:16:53.800 --> 0:16:56.920 every one of us, we all generate waste, we're all 0:16:57.000 --> 0:16:59.760 interacting with it every single day, and yet I think 0:16:59.840 --> 0:17:01.920 so many of us have the privilege of not thinking 0:17:02.040 --> 0:17:04.480 very much about what happens to it when it leaves 0:17:04.520 --> 0:17:07.560 our hand or the curb side barrel. But this story 0:17:07.600 --> 0:17:09.960 and kind of this reporting project that my colleague Rachel 0:17:09.960 --> 0:17:11.680 and I have been working on for the last year 0:17:11.720 --> 0:17:14.480 plus really looks at you know, where does it go 0:17:14.680 --> 0:17:17.840 and what are some of the kind of unexpected consequences. 0:17:17.960 --> 0:17:20.639 And so the more wastes that we're generating, the bigger 0:17:20.720 --> 0:17:23.680 landfills are getting and one of the kind of downstream 0:17:23.840 --> 0:17:30.040 consequences of that are these overheating landfills. And so in 0:17:30.280 --> 0:17:33.240 our most recent story which published this morning, which was 0:17:33.280 --> 0:17:35.880 a fall up to a big investigation we did last year, 0:17:36.320 --> 0:17:39.720 we looked at public records from about one hundred landfills 0:17:39.760 --> 0:17:43.520 in twenty different states and found that many of them 0:17:43.640 --> 0:17:48.119 are reaching much much hotter temperatures than you know, federal 0:17:48.480 --> 0:17:53.160 regulations want them to be reaching, and in some cases 0:17:53.720 --> 0:17:57.719 this is generating really significant problems for the communities nearby. 0:17:57.920 --> 0:18:00.959 As one example, the images you're seeing right now if 0:18:01.000 --> 0:18:05.880 you're watching, are from Shoesmith Landfill, which is outside Richmond, Virginia, 0:18:06.160 --> 0:18:08.960 where super hot temperatures this is like almost two hundred 0:18:08.960 --> 0:18:14.160 degrees fahrenheit inside the waste in the landfill are causing 0:18:14.240 --> 0:18:17.480 problems like millions of gallons of leech eate, which is 0:18:17.600 --> 0:18:21.320 essentially trash juice to kind of be pouring out of 0:18:21.359 --> 0:18:25.160 the landfill, which is getting into yeah, some of which 0:18:25.200 --> 0:18:28.800 has been found getting into local waterways. Hot landfills can 0:18:28.840 --> 0:18:33.199 also be incredibly odorous. They can release toxic emissions, you know, 0:18:33.240 --> 0:18:37.199 neighbors and another one of these sites in LA you know, 0:18:37.280 --> 0:18:39.760 have said they've been sickened with things like headaches and 0:18:39.880 --> 0:18:44.520 nausea and even more serious health problems like cancer, which 0:18:44.880 --> 0:18:48.800 public health officials have been looking into. And so this 0:18:48.880 --> 0:18:53.240 current story really looked at how are operators, the landfill companies, 0:18:53.280 --> 0:18:57.480 as well as regulators responsible for protecting public health environmental 0:18:57.480 --> 0:19:01.960 health responding to you know, elevated temperatures when they're getting 0:19:02.000 --> 0:19:04.879 reports that this is happening. And what we're finding is 0:19:04.880 --> 0:19:08.560 that they're really not taking the steps to intervene that 0:19:08.680 --> 0:19:13.520 experts say are needed to prevent these situations from getting 0:19:13.560 --> 0:19:14.080 much worse. 0:19:14.560 --> 0:19:17.359 Okay, I want to talk more about that, but just first, 0:19:17.560 --> 0:19:21.160 can you remind us how does a landfill overheat? Why 0:19:21.160 --> 0:19:21.959 would that happen? 0:19:22.760 --> 0:19:26.080 Yeah, it's a really good question, and this is actually 0:19:26.119 --> 0:19:29.639 a surprisingly contentious question. I mean, so just at a 0:19:29.720 --> 0:19:31.920 kind of baseline, this is a little bit chemistry one 0:19:31.920 --> 0:19:36.680 on one. Right, you know, landfills naturally generate some heat, right, 0:19:36.760 --> 0:19:40.360 waste is breaking down. It's supposed to be an anaerobic process, 0:19:40.400 --> 0:19:44.480 which means no oxygen in the waste. It's decomposing it's 0:19:44.560 --> 0:19:47.040 releasing you know, methane. That's probably what you've heard the 0:19:47.040 --> 0:19:50.439 most about when you think about landfill landfill problems and 0:19:50.480 --> 0:19:55.040 kind of their environmental impact. But sometimes these landfills can 0:19:55.040 --> 0:19:57.360 get much much hotter than they're supposed to be. And 0:19:57.640 --> 0:20:01.400 why that is can be for a number of reasons. 0:20:01.520 --> 0:20:05.560 The landfill industry, the waste industry, you know, in response 0:20:05.600 --> 0:20:10.800 to reporting like mine, says, you know, there's no fire here. 0:20:12.240 --> 0:20:16.200 What these elevated temperature landfills are the results of are 0:20:16.240 --> 0:20:19.439 like chemical properties of the waste. It's it's nothing to 0:20:19.440 --> 0:20:25.640 do with fire. Regulators disagree in some cases and say, no, actually, 0:20:25.800 --> 0:20:28.800 we have evidence that there's actually oxygen getting in and 0:20:28.840 --> 0:20:31.320 that's like blowing air on a fire, and you're actually 0:20:31.359 --> 0:20:33.760 you're actually you know, seeing the potential result of like 0:20:33.960 --> 0:20:38.159 a subsurface fire. So there's actually debate on exactly what 0:20:38.280 --> 0:20:41.080 is happening here. But what we do know is that 0:20:41.280 --> 0:20:44.520