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Speaker 3: Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: It was a week where the political theater of the
Speaker 3: state of the Union and the whisperers over that AI
Speaker 3: scare trade dominated headlines. Even as President Trump touted a
Speaker 3: new era of American energy independence to power the AI boom,
Speaker 3: A nervous Wall Street held its breath for any sign
Speaker 3: that the multi billion dollar AI hype cycle could be
Speaker 3: hitting a wall.
Speaker 1: The results mah lackluster salesforce gave it just appointing sales outlooks.
Speaker 1: Snowflake failed to impress investors. Then came in Vidia. Despite
Speaker 1: another bullish quarterly revenue forecast, it actually drew a lukewarm
Speaker 1: response from investor, signaling that concerns over a potential bubble
Speaker 1: continued away on the company.
Speaker 3: So with the backdrop of the AI trade. Ahead, on
Speaker 3: our program, we lean on a familiar voice to discuss
Speaker 3: the race to dominate the semiconductor supply chain. That race
Speaker 3: no longer your usual suspects, but now include many several members.
Speaker 3: In fact of the mag seven, the author of Chip War,
Speaker 3: The Fight for the World's most critical Technology, joins us
Speaker 3: a little later on.
Speaker 1: Plus, you've got that bonus. Now what Bloomberg pursuits gives
Speaker 1: us the smartest ways to spend and invest that yearly check.
Speaker 1: And it's become less common in men's wear in recent years.
Speaker 1: But Chris Rouser says, now is the time to care
Speaker 1: about belts. He joins us a little later.
Speaker 3: I have a love hate relationship with belts, so I
Speaker 3: can't wait. I know this is from a man's perspective,
Speaker 3: but yeah, I do.
Speaker 1: I do. I just bad bunny. I'll look it up.
Speaker 3: Matter of that to come. We begin, though, with the
Speaker 3: rise of prediction markets. Now on Tuesday night, while millions
Speaker 3: tuned into the State of the Union for all of
Speaker 3: the President's policy talk, or what they hoped would beat
Speaker 3: policy talk, millions of dollars, we're moving on platforms including
Speaker 3: polymarket and Calshi for the prop bets.
Speaker 1: Well, the President's book of a quote, National Turnaround Traders
Speaker 1: wagered over ten million dollars on everything from whether the
Speaker 1: President would mention China to how many times he'd say
Speaker 1: America to the exact count of jd Vance's collapse.
Speaker 3: It's kind of wild.
Speaker 1: Yeah, you can't even like you're kind of speechless.
Speaker 3: I know.
Speaker 1: Once again, I know, repeat the refrain that we hear
Speaker 1: over and over again. I cannot believe people bet on
Speaker 1: this stuff.
Speaker 4: Oh but they do.
Speaker 1: That's what we hear. That's what we hear. But I
Speaker 1: believe everything, which is.
Speaker 3: Why as the volume and popularity of these platforms grow,
Speaker 3: so does the scrutiny, or maybe a little bit more scrutiny.
Speaker 3: Critics call it unregulated gambling and where sometimes the truth
Speaker 3: is whatever the highest bidder says. It is. Writing for
Speaker 3: Bloomberg BusinessWeek about how Polymarket and Calshi are gamifying truth
Speaker 3: is BusinessWeek contributing writer Chris Beem. Chris's story is the
Speaker 3: cover story for the March issue of Bloomberg Business Week magazine.
Speaker 4: One reason I was drawn to this topic is that
Speaker 4: there's so many different ways to come at prediction markets. Yeah,
Speaker 4: but to me, the most interesting question here was, so
Speaker 4: these companies Calshi polymarket, the way they pitch themselves is
Speaker 4: as sources of truth that this is going to be,
Speaker 4: you know, in a world where you know, we can't
Speaker 4: agree on what's true, what's real, what's not, you know,
Speaker 4: deep fakes, what have you, prediction markets are going to
Speaker 4: be something that we can trust more than the news,
Speaker 4: more than pundits. And I was just interested in to
Speaker 4: what extent that is true. And as it turns out,
Speaker 4: in a lot of cases, prediction markets can be quite accurate.
Speaker 4: You know, they're really good at predicting the outcomes of elections,
Speaker 4: especially election right, Yeah, and especially at the top of
Speaker 4: the ballot. Scholars have shown that prediction markets are a
Speaker 4: lot more accurate than polls less so as you go
Speaker 4: down the ballot. But I was also interested in the
Speaker 4: various ways that these prediction markets can be flawed. There
Speaker 4: can be market manipulation, there can be insider trading. So
Speaker 4: that's what I wanted to explore.
Speaker 3: We want to talk about those flaws. But funnily enough,
Speaker 3: as they say, we were actually doing a segment on
Speaker 3: Warner Brothers Discovery earlier, like Who's ultimately going to get
Speaker 3: the deal, and we did go to Polymarket to see
Speaker 3: on that. I just want to mention some headlines crossing
Speaker 3: the Bloomberg terminal because they continue to come. Warner Brothers
Speaker 3: says Paramount has boosted its bid to thirty one dollars
Speaker 3: a share in cash, so they're concerning their risk confirming
Speaker 3: excuse me, the receipt of a revised Paramount proposal. Warner
Speaker 3: brother says the revise bid includes a seven billion dollar
Speaker 3: termination feed, and Warner brother says Paramount proposal could lead
Speaker 3: to a superior bid. We know the Warner Brothers board
Speaker 3: still recommending the Netflix transactions, so this continues on. So anyway,
Speaker 3: this is some These are the kind of things though,
Speaker 3: that are showing up.
Speaker 1: Is there predation for when this story ends? Because this
Speaker 1: is going on for a long time.
Speaker 3: I feel like it just keeps going over new and
Speaker 3: new bids. You get into the fraud aspect, and I
Speaker 3: think we are thinking about people who are maybe you know,
Speaker 3: creating a bid or something and has some control over
Speaker 3: the outcome. That's a real issue.
Speaker 4: Absolutely. There's a lot of markets, especially we can get
Speaker 4: into some of the differences between Calci and poly Market.
Speaker 4: There are differences, right, there are huge differences. CALCI is
Speaker 4: entirely US based. It's regulated by the CFTC, so every
Speaker 4: market that they post needs to be at least run
Speaker 4: by the CFTC for approval, whereas poly Market, most of
Speaker 4: their activity is overseas and so it's not regulated by
Speaker 4: the CFTC. So when you hear about some of the
Speaker 4: fringier markets out there, like you know, will Jesus return
Speaker 4: in twenty twenty six? Will the US discover aliens in
Speaker 4: twenty twenty sex? Wait?
Speaker 3: Does this fringy only? It depends some release from the
Speaker 3: White House my understanding when it comes to aliens, But
Speaker 3: that's another story, but go ahead.
Speaker 4: Yeah, I mean those those kinds of markets tend to
Speaker 4: be more on poly market, Yeah, because they would not
Speaker 4: pass muster with the CFTC.
Speaker 3: Does it make though the other stuff that's on the
Speaker 3: like any less real? Like I don't know, I don't
Speaker 3: even know how to like, how do you gauge the
Speaker 3: credibility of what the.
Speaker 1: Credibility of what, like if Jesus is back?
Speaker 3: So part of it, Like I'm just it is it
Speaker 3: just a game?
Speaker 1: Yeah? I would say, like is there any feel information?
Speaker 3: Like are there people who know what the outcome. And
Speaker 3: this goes back to.
Speaker 4: There's a spectrum of markets here, so you'll not be
Speaker 4: surprised to learn that these companies Calci poly Market they
Speaker 4: like to emphasize the more serious markets where you can
Speaker 4: predict outcome of elections, or you can predict what the
Speaker 4: what inflation is going to be, or you know what
Speaker 4: the Fed is going to do next quarter, and they
Speaker 4: argue that those markets actually can provide useful predictive information
Speaker 4: to help people make decisions in the world. That's one
Speaker 4: end of the spectrum. The other end of the spectrum
Speaker 4: is much more kind of almost entertainment, like predicting whether
Speaker 4: aliens are going to appear.
Speaker 1: Well, there's also the sports betting part of this, or
Speaker 1: maybe predicting outcomes of sporting events. I don't want to
Speaker 1: say betting because I don't want to I don't know
Speaker 1: if it is betting, but you you have told me
Speaker 1: in the past that in reporting this story, you did
Speaker 1: place a bet on one of these right for the Patriots.
Speaker 4: Yeah, yeah, it turned out to be a huge mistake,
Speaker 4: but yes, this is so. The vast majority of the
Speaker 4: activity that happens on CALSHI is sports betting. And I
Speaker 4: think it's it's okay to use that word. Something like
Speaker 4: eighty or ninety percent of Calshi is sports poly market
Speaker 4: one hundred percent of its US activity is sports focused.
Speaker 4: Overseas is a different story.
Speaker 1: One of what you see on poly Market in the
Speaker 1: is sports focused.
Speaker 4: Correct, because those are the only markets they've gotten to
Speaker 4: approved by the CFTC.
Speaker 1: So then so then why are why are people using
Speaker 1: that instead of fan Duel or draft Kings.
Speaker 4: Part of it is just the interface is a lot simpler.
Speaker 4: Like if you go into FanDuel or draft Kings, there's
Speaker 4: a lot of complex measurements and you know, you have
Speaker 4: to know what a spread is and you have to
Speaker 4: It gives you the options to parlay different bets within
Speaker 4: a football game, whereas with Calshi or poly market, it's
Speaker 4: very simple. It's do you think this team is going
Speaker 4: to win or not? And you can make more complex bets,
Speaker 4: but it's it's a lot more user friendly.
Speaker 1: You earlier reference and we'll talk about mentioned markets in
Speaker 1: a few minutes, but you you earlier referenced the accuracy
Speaker 1: these especially at the top of the ballot, and the
Speaker 1: scholarly articles that have cited this as being more accurate
Speaker 1: than polling. Why is that? Is it? Because, as proponents say,
Speaker 1: people are putting money where their their mouth is.
Speaker 3: And that was kind of to my question, like is
Speaker 3: but what's the value? And like do they really have
Speaker 3: some insight that is valuable because it was pretty remarkable
Speaker 3: in some of the elections, Right.
Speaker 4: Yeah, I think what it comes down to is polling
Speaker 4: and prediction markets are just completely different ways of collecting information.
Speaker 4: Polling you're asking people what their personal opinion is, and polling,
Speaker 4: especially in the last decade or two, has in some
Speaker 4: ways gotten worse and worse because of you know, cell
Speaker 4: phones and you know who responds who doesn't. Whereas prediction
Speaker 4: markets you're asking a different question. You're asking them regardless
Speaker 4: of your opinion of who should win an election, what
Speaker 4: is going to happen? What do you think other people
Speaker 4: are going to do? And so really the idea is
Speaker 4: that you're aggregating information like any market, but here you're
Speaker 4: aggregating different understand pieces of understanding about the election and
Speaker 4: how it will play out.
Speaker 1: You know, as as you speak about this, I'm thinking
Speaker 1: to a site like Wikipedia that uses the wisdom of
Speaker 1: the crowd. Supposedly this is also supposed to use the
Speaker 1: wisdom of the crowd, but Wikipedia gets in trouble for bias.
Speaker 1: Is there by is it possible to have bias in
Speaker 1: prediction markets?
Speaker 4: Yes, is the short answer. And the smaller the market,
Speaker 4: the more risk there is for bias. Like a couple
Speaker 4: of years ago, when these markets were very small, some
Speaker 4: academics went onto a few election markets and placed bets
Speaker 4: and that skewed the results. And as a result they said,
Speaker 4: you know, this proves that these markets are not reliable.
Speaker 4: But as they've gotten bigger and bigger, you know, the
Speaker 4: presidential market for the election of twenty twenty four was,
Speaker 4: you know, millions and millions of dollars, that potential for
Speaker 4: manipulation has been greatly reduced.
Speaker 3: We're that with Chris Beam, contributor for Bloomberg Business Week
Speaker 3: here in our Bloomberg Interactive Broker Studio. This is on
Speaker 3: the Bloomberg Business Week cover story. His cover story on
Speaker 3: how prediction markets, polymarket and calshi are gamifying the truth.
Speaker 3: Do they need to be regulated? Does there need to
Speaker 3: be oversight because are people you can make money, so
Speaker 3: are people gaming the system? Potentially?
Speaker 4: Yeah, there is regulation already. So the CFTC currently has
Speaker 4: authority over derivatives trading, and technically these are called event contracts.
Speaker 4: That's a type of derivative. So the CFTC is in
Speaker 4: charge of what contracts are allowed and what are not.
Speaker 4: As you might know, there's this huge debate over whether
Speaker 4: the states should regulate these prediction markets as gambling, and
Speaker 4: that would be much tighter. Uh, it would be probably
Speaker 4: mean taxing them a lot more than they aren't currently.
Speaker 1: Yeah, I mean, because to be fair, the gambling platforms,
Speaker 1: the traditional ones pay are taxed in a way that
Speaker 1: these aren't tax for sports betting.
Speaker 4: Right yeah, yeah, I think when you when you bet
Speaker 4: on Polling Market or Calci, it's taxed, is just regular income.
Speaker 1: So let's just briefly mentioned mentioned mentioned markets. I love
Speaker 1: the way the piece opens talking about this what happened
Speaker 1: with Jerome Powell and this mentioned markets around Jerome Powell.
Speaker 1: That's that's sort of our audience explained, explain what happened
Speaker 1: with the utterance of a word by mistake.
Speaker 3: We only have unfortunately about a minute or so.
Speaker 4: Oh sure, so you know, people know that every word
Speaker 4: that Jerome Powell says in a speech is can can
Speaker 4: move markets. But in this case, you have traders on
Speaker 4: polying market and Calci watching a speech, paying attention to
Speaker 4: literally what words will come out of his mouth, and
Speaker 4: so you know, you had people betting that he was
Speaker 4: going to say the word renovation because they were they
Speaker 4: thought he might be talking about the DOJ investigation. It
Speaker 4: turns out he did end up saying it, but a
Speaker 4: lot of people didn't realize it until after the fact,
Speaker 4: So there was this whole debate did he actually actually
Speaker 4: say the word? Which reveals one of the problems that
Speaker 4: comes up with these markets, which is it could often
Speaker 4: be hard to tell what the actual factual outcome is.
Speaker 1: Chris Bean, he's a contributor for Bloomberg business Week. It's
Speaker 1: the cover story, it's the big take. It's one of
Speaker 1: the most read stories. It's all about prediction markets. We
Speaker 1: barely scratch the surface. Everybody should check it out on
Speaker 1: the Bloomberg terminal.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: It's arguably the fundamental building block of the twenty twenty
Speaker 3: six Economy talking about the semiconductor Well, it's kind of
Speaker 3: been I feel like the fundamental building block for a
Speaker 3: long time. Everything it seems, has some kind of chip
Speaker 3: in it.
Speaker 1: All right.
Speaker 3: Well, this past week, Meta shook the semiconductor world with
Speaker 3: a multi billion dollar deal to buy six gigawatts of
Speaker 3: AI power from AMD Advanced micro Devices. This comes just
Speaker 3: days after Meta doubled down on its partnership with Nvidia.
Speaker 3: The message is clear. If you don't own chips, you
Speaker 3: don't know own the future.
Speaker 1: Someone who knows the chip industry well as Chris Miller.
Speaker 1: He's professor at the Fletcher School at Tufts University, as
Speaker 1: well as a non resident Senior Fellow at the American
Speaker 1: Enterprise Institute. He's also the author of the book on chips,
Speaker 1: the New York Times bestseller, Chip War, The Fight for
Speaker 1: the World's Most Critical Technology. Chris, it's good to have
Speaker 1: you back with us. Carol and I were just talking,
Speaker 1: and you know, you wrote this book close to four
Speaker 1: years ago at this point. How different is the world
Speaker 1: of semiconductors and the world's reliance on semiconductors now th
Speaker 1: when you wrote the book.
Speaker 5: Well, I think the key difference is just the scale
Speaker 5: of spending that we've got right now on building data
Speaker 5: centers and buying all of the chips that are required
Speaker 5: inside of them, and Vidia first and foremost, but not only.
Speaker 5: We've seen companies transformed by the data center build out,
Speaker 5: but in a lot of ways, not much just changed
Speaker 5: other than that we're still sourcing our keysmi conductors from
Speaker 5: Asia and above all from Taiwan, and so the industry
Speaker 5: is supercharged, its size, growing faster than ever, but dealing
Speaker 5: with some of the same supply chain choke points that
Speaker 5: it had a decade ago.
Speaker 3: You know, we talk a lot with one of our
Speaker 3: brilliant voices on the chip world, and that is our
Speaker 3: own Ian King, who has seen a lot of cycles,
Speaker 3: the ups and downs, and we talk a lot about
Speaker 3: that supply demand imbalance and what happens when there's a
Speaker 3: lot of demand, there's not enough supply. The buildout continues,
Speaker 3: the investment, supply goes up, and then there's a glut.
Speaker 3: So I'm just curious what your view is when it
Speaker 3: comes to the cyclical nature of the semiconductor world. Has
Speaker 3: ai changed it or we will see also an overbuild
Speaker 3: and oversupply and then a glut.
Speaker 5: I think if you look historically, certainly you see cycles up,
Speaker 5: cycles down, but there are moments when you see step
Speaker 5: changes in terms of demand for certain types of chips.
Speaker 5: We saw that with smartphones, for example, there was no
Speaker 5: demand for smartphone chips, and then now everyone needs a
Speaker 5: new smartphone every couple of years. And what we're seeing
Speaker 5: in AI right now is that type of step change,
Speaker 5: a huge increase in just the baseline amount of chips
Speaker 5: that we're going to need for data centers driven by AI,
Speaker 5: And so I think we shouldn't expect cycles to be
Speaker 5: over Certainly there'll be ups and downs in the future,
Speaker 5: but it's now very clear. I think that we're just
Speaker 5: going to need a lot more compute for AI purposes
Speaker 5: in the future, and as a result, will need a
Speaker 5: lot more of the AI chips that go inside of
Speaker 5: data centers.
Speaker 1: In your view, is the promise that many people think
Speaker 1: AI is suppose to deliver? Will it actually be delivered?
Speaker 3: Like?
Speaker 1: What's the future that you envision after all this capex
Speaker 1: has spent.
Speaker 5: Why, I think it's in some ways funny when we
Speaker 5: ask will AI deliver? Because if you look just three
Speaker 5: years ago, even after chat schipt was released. There are
Speaker 5: so many things that were not possible that are possible today,
Speaker 5: whether it's the number or the scale of hallucinations and
Speaker 5: answers that chatbots give you, or the scale of work
Speaker 5: that you can put together today that just wasn't possible
Speaker 5: in the past. We've already had so much new capability
Speaker 5: generated just in the couple of years since chat schipt
Speaker 5: that in some ways, I think it's an absurd question
Speaker 5: to ask will AI deliver it already has in a
Speaker 5: lot of ways. But I think I understand why. There's
Speaker 5: plenty of questions about what about the investment is happening
Speaker 5: right now, will that investment pay off? And I think
Speaker 5: there are reasons to think carefully about how much each
Speaker 5: company is putting in over what time horizon. But I
Speaker 5: guess when I when I zoom out, I ask myself,
Speaker 5: do I want a world in which there is more
Speaker 5: access to compute or less? And it seems to me
Speaker 5: that we should, rather than being concerned that there's too
Speaker 5: much compute being put in the ground, be excited that
Speaker 5: there's actually companies willing to invest in the infrastructure that's
Speaker 5: going to deliver all these capabilities.
Speaker 1: Well, I think it's an important question to ask for
Speaker 1: a few reasons, and one of those is because if
Speaker 1: you look at just the capex that these companies are spending,
Speaker 1: you know, one company two hundred billion dollars in a
Speaker 1: single year. That's a big commitment, and that's something that
Speaker 1: they have to convince investors. That is money that is
Speaker 1: going to the right place. That's money that has to
Speaker 1: be earned back. Plus on companies coming to a hyper
Speaker 1: scaler and saying, yes, we think that this money is
Speaker 1: not only being well spent, but then we can use
Speaker 1: this compute to actually create a product that will provide
Speaker 1: a return on investment. So, yes, we've seen a lot
Speaker 1: of the hyperscalers benefit the you know, the anthropics and
Speaker 1: the open aies and and the mistraws like that's amazing stuff.
Speaker 1: But at the end of the day, there are a
Speaker 1: lot of companies that are not necessarily technology companies that
Speaker 1: maybe aren't yet necessarily seeing an increase in productivity as
Speaker 1: a result of these tools. So my question is do
Speaker 1: those companies start to see that do we live in
Speaker 1: a world where this is a layer just like the
Speaker 1: Internet was a layer of technology.
Speaker 5: I think there's no doubt that we're going to have
Speaker 5: AI as a layer that's embedded into all technology that
Speaker 5: we use. And when I look at the economic question,
Speaker 5: I say, first off, is it profitable to serve AI
Speaker 5: systems today, not train the next generation, but serve today's.
Speaker 5: And if you listen to what's publicly reported about OpenAI
Speaker 5: or Anthropic, their margins on their influence business are not
Speaker 5: just positive but quite good. And so that I think
Speaker 5: is pretty strong evidence that the delivery of already existing
Speaker 5: AI services is a pretty profitable business. The next question
Speaker 5: is should we be investing in R and D in
Speaker 5: the next generation? Which is a co very very expensive,
Speaker 5: But I think it's hard to argue we should dramatically
Speaker 5: slow down R and D and AI, just given all
Speaker 5: of the extraordinary improvements that we've seen over the past
Speaker 5: couple of years in terms of capability. And so when
Speaker 5: you start breaking it down and ask, well, which specific
Speaker 5: investment do we think is excessive? Which specific investment would
Speaker 5: rather not be doing? Would you really like to be
Speaker 5: the CEO of the only big tech company that's not
Speaker 5: investing in AI? That doesn't seem like a very comfortable
Speaker 5: place to be. And I'd rather have a situation in
Speaker 5: which the big technology companies are investing more rather than
Speaker 5: putting money in the bank or buying back their stock
Speaker 5: because they didn't have any profitable by investment opternity.
Speaker 3: Well, you know, I would say Apple's doing it differently,
Speaker 3: and I guess time will tell whether or not their
Speaker 3: approach works out. Chris, I am curious to you know,
Speaker 3: who do you talk to, what research do you follow,
Speaker 3: what are the leading voices, what are the leading companies
Speaker 3: that you watch to figure out kind of how the
Speaker 3: semiconductor space is evolving. I mean, we still know TSMC
Speaker 3: is still the big manufacturer of all chips in the world,
Speaker 3: and there's geopolitical attentions to that. But give us an
Speaker 3: idea of where do you think kind of investors and
Speaker 3: just the world at large need to be focusing their
Speaker 3: attention on when it comes to the semiconductor world. Is
Speaker 3: it Nvidia, is it China? Is it something else?
Speaker 5: I think the hard problem is that it's all of
Speaker 5: the above. And we've seen this play out in the
Speaker 5: GPU supply chain over the past couple of years, where
Speaker 5: you've had shortages and different types of components, different materials,
Speaker 5: and the memory chips that go next to GPUs and
Speaker 5: AI servers, each part of the supply chain has had
Speaker 5: to dramatically ramp up its production capacity to respond to
Speaker 5: this surge and demand. And so if you only look
Speaker 5: at one part of the supply chain, you miss the
Speaker 5: challenges that other parts are often facing. And so it's
Speaker 5: the chip designers, it's the chip makers, but it's also
Speaker 5: the materials suppliers, which are often not even thought of
Speaker 5: as being semiconductor firms, but produce many of the capabilities
Speaker 5: that are critical to actually manufacture the AI chips and
Speaker 5: servers that we need.
Speaker 3: Do you think the world do you think the US
Speaker 3: specifically does need to be restricting sales of its most
Speaker 3: sophisticated chips to China or on others? I mean, we
Speaker 3: did see Nvidia. They still face them uncertainty in China,
Speaker 3: that's their largest market, or which it is the largest
Speaker 3: market for chips. The government granting some licenses to ship
Speaker 3: a small amount of some of its processors to customers there,
Speaker 3: but and Vidia is not sure if the Chinese government
Speaker 3: will give its approval. So there's still some back and
Speaker 3: forth here. But is it still an arms race of
Speaker 3: source arms race of sorts?
Speaker 5: Excuse me, yeah, I think armed races is not a
Speaker 5: bad analogy. When you listen to tech CEOs, they'll speak
Speaker 5: in the same language. They're struggling to get access to
Speaker 5: all the computing power that they need, that they envision
Speaker 5: needing more tomorrow than they've got today. And if you
Speaker 5: listen to Chinese technology leaders, what you hear from them
Speaker 5: is challenges and getting access to computing power. And the
Speaker 5: primary reason they've struggled to deploy AI products at scale
Speaker 5: is because they've struggled to get access to all of
Speaker 5: the computing capabilities. And it's on a regular basis we
Speaker 5: see new Chinese models launched that can actually be deployed
Speaker 5: at scale because they don't have access to the advanced
Speaker 5: chips that they need. So this does I think it
Speaker 5: seem to me that this is still a very powerful
Speaker 5: card that the US has to play, and so I
Speaker 5: think we should be very careful or on any decisions
Speaker 5: to give China more access or at least make sure
Speaker 5: that we're getting something in exchange for that.
Speaker 1: On that, Chris, the US support of TSMC and the
Speaker 1: US support of Intel different types of support, and I
Speaker 1: guess you could call the TSMC one encouragement to build
Speaker 1: here in the United States. What is the right industrial
Speaker 1: policy to reduce reliance on companies outside of the US.
Speaker 5: It's a really hard problem because TSMC is such a
Speaker 5: capable and efficient manufacturer in their home base in Taiwan.
Speaker 5: But I think the US government is right to say
Speaker 5: that we need a more diversified manufacturing base for the
Speaker 5: world's most important semiconductors. I think we've learned over the
Speaker 5: last couple of years. There's no silver bullet. President Trump's
Speaker 5: tried tariffs that comes with obvious downside. President Biden tried
Speaker 5: subsidies that worked to a degree, but only to a degree.
Speaker 5: Here's the reality. The chip industry has involved hundreds of
Speaker 5: billions of dollars of capex over the last several decades,
Speaker 5: and so it's just not going to move fast. And
Speaker 5: so if you want to slowly change the structure of
Speaker 5: where chips are produced, you've got a plan for years
Speaker 5: of years of implementation of measures designed to the shift
Speaker 5: economics of the JIP industry.
Speaker 3: All right, Kennily with there. Chris Miller, thank you so much.
Speaker 3: Good to check in with you, Professor of International History
Speaker 3: at the Fletcher School at Tufts University, author of Chipboard
Speaker 3: joining us.
Speaker 2: This is the Bloomberg Business week daily podcast. Listen live
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Speaker 3: Well, it's bonus season, at least for the lucky few
Speaker 3: on Wall Street and across a lot of corporate America.
Speaker 3: For some, though, it is a moment of relief. For others,
Speaker 3: I'm burning hole, waiting to be spent. I don't know what.
Speaker 5: You're shaking your head.
Speaker 1: What, Yeah, to be one of those? It sounds great.
Speaker 1: The question isn't just how much you've got, it's what
Speaker 1: you do with it. For more on how to spend
Speaker 1: and invest your bonus this year, Bloomberg pursuits Editor at
Speaker 1: Large Chris Rouser. Chris, We're going to talk about how
Speaker 1: to spend and how to invest your bonus. But maybe
Speaker 1: we should start with buying a belt, because I want
Speaker 1: to start with Is that okay with you?
Speaker 6: Carol?
Speaker 1: You can't get enough.
Speaker 3: I've been shuttling through. So this is another table reading story.
Speaker 1: So I love this because you know we're still talking
Speaker 1: about the Super Bowl and the Super Bowl's halftime show.
Speaker 1: And your focus wasn't on the people who were Grass,
Speaker 1: or maybe who showed up, or what the wagers were made,
Speaker 1: who actually performed. No, it's about what Bad Bunny wore.
Speaker 1: Oh yeah, the humble.
Speaker 6: Belt, specifically his belt. All right, go ahead, talking about
Speaker 6: Bad Bunny's belt is not funny, and Bad Bunnies like
Speaker 6: he had it such a great He had a great,
Speaker 6: wildly proportioned outfit from Zara, and he at one point
Speaker 6: he wore straw hat farmer's hat. But the thing that
Speaker 6: I kept looking at his outfit was his belt, which
Speaker 6: was a very very simple rope belt was a jabbarro
Speaker 6: sty style belt, which was like in honor of Puerto
Speaker 6: Rican farmers, which is why there were people there addressed
Speaker 6: as Grass, and why he and the dancers wore farmers
Speaker 6: hats at the beginning.
Speaker 3: And just to set there, I'm not laughing at any
Speaker 3: of that, because I loved the homage to culture. It
Speaker 3: was super impactful. I just the way you wrote there's
Speaker 3: a mom and Dad reference that I really love.
Speaker 6: But go ahead, Well, so I am staring at this belt,
Speaker 6: and then I was like, when was the last time
Speaker 6: I looked at a belt or like even thought about
Speaker 6: someone's belt or someone's belt, like the bad money wore
Speaker 6: that belt because he was like, this culture is what
Speaker 6: ties us all together. And I was like, that's such
Speaker 6: a great message. When was the last time a belt
Speaker 6: had a message? And actually, belts are like under.
Speaker 1: Attack guys, Why what do you mean?
Speaker 6: They're like, I'm not wearing a I always wear a belt.
Speaker 3: You do always have a belt?
Speaker 1: No? Hell am I going to most? Am I going
Speaker 1: to keep my pants off suspenders?
Speaker 2: Right?
Speaker 4: Hey?
Speaker 1: My husband used to wear suspenders? Or watch it, buddy.
Speaker 6: So the thing in men's wear these days is like
Speaker 6: a silhouette where your pants are huge, they got plats
Speaker 6: or two plats or ten plats, and they're flowy, but
Speaker 6: you don't wear a belt, and you maybe they're like
Speaker 6: long tab trousers that don't even have belt. Maybe they're
Speaker 6: girka pants like I am wearing right now, which are
Speaker 6: so difficult to get out of, you like it like
Speaker 6: requires a bridesmaid. And until very recently, I like had
Speaker 6: to wear a belt so that my pants didn't fall off.
Speaker 6: I don't know about I mean, that's what I feel like,
Speaker 6: That's what Tim is saying.
Speaker 1: Yeah, that's what I'm saying.
Speaker 6: I would see all this styling on the runway and
Speaker 6: in you know, like you go to like the Ralph
Speaker 6: Lauren website or the Todd Snyder website, Like none of
Speaker 6: the models are wearing belts. They're talking sweaters into pants
Speaker 6: without belts. I'm like, how does that even? What?
Speaker 1: Just doesn't it to me? It doesn't look right.
Speaker 3: My dad was a belt like, he had belts.
Speaker 6: Well, yeah, belts, And I was like, I'm gonna I'm
Speaker 6: on a mission now to figure out what's going on
Speaker 6: with belts.
Speaker 3: So what did you find out?
Speaker 1: Well?
Speaker 6: So, yeah, So the silhouettes for mens wear are very
Speaker 6: much for the past few like five years, have been
Speaker 6: kind of belt.
Speaker 1: Less, low belt.
Speaker 6: But then I went to Pitty Woma, which is this
Speaker 6: men's wear show that happens every year in January. It
Speaker 6: happens twice a year, but it's in Florence, and it's
Speaker 6: in this old fortress and it's kind of literally hundreds
Speaker 6: of men's wear designers, craftsmen. They've got people who make
Speaker 6: umbrellas and watches and jackets and it is like a
Speaker 6: show of force of like trying to make men beautiful,
Speaker 6: which was kind of overwhelming to be there for the
Speaker 6: first time, and there were so many beautiful belts, like
Speaker 6: what well, in Europe, there's so many great leather craftsmen
Speaker 6: in a way that we don't really have in the
Speaker 6: United States. And there's like these Adelweiss belts from Switzerland.
Speaker 6: There's incredible Italian belts obviously, and there were so many
Speaker 6: belts that were inspired by America and now to me,
Speaker 6: in America, the belt is something that you when you
Speaker 6: go to the department store, you're like, you have two
Speaker 6: things in your mind, brown or black. Yeah, I don't
Speaker 6: have any belt that's not brown or right, or maybe
Speaker 6: you're thinking I forgot to put one in my jim
Speaker 6: bag and I had seven minutes to buy.
Speaker 1: A belt that like court or canvas.
Speaker 6: But as I say in this story, I sort of
Speaker 6: in my mind like in America, if you give someone
Speaker 6: a belt as a gift, it means you've given up trying,
Speaker 6: like I'm not. It's like giving a wallet. You're like,
Speaker 6: I can't think of anything.
Speaker 1: I'm just gonna be.
Speaker 3: To you said to me, you giving a belt to
Speaker 3: your dad for Christmas is like giving a.
Speaker 6: Yes with that great guest we've all been there, yes,
Speaker 6: and you're like, oh about thanks. Yeah, But actually, because
Speaker 6: western wear is such a big thing, which is partially
Speaker 6: thanks to Beyonce, it's partially thanks to Pharrell had this
Speaker 6: amazing Cowboy and a Native American inspired show at Louis Vuitton.
Speaker 6: Like western wear is actually really huge and it's like
Speaker 6: very globally influential, and so it was so cool to
Speaker 6: be for me. Like the person who's like American belts
Speaker 6: are so dumb to go to Europe and just see
Speaker 6: so many beautiful American inspired belts, native American belts. Brunello Cucinelli,
Speaker 6: who's like the most fashionable man on planet Earth, where's
Speaker 6: a belt? Was like, you don't wear a belt, I
Speaker 6: wear a belt, or you don't get to accessorize, like
Speaker 6: I only get a I don't go wear jewelry. I
Speaker 6: have to wear a belt. And he his collection this
Speaker 6: year had American inspired or sort of western were belts
Speaker 6: with silver and turquoise, and I just was like really
Speaker 6: turned around, and I was like, the belt has a future.
Speaker 6: The belts, the American belt specifically is having a moment
Speaker 6: and it is going to get bigger.
Speaker 1: So that's your prediction. Even though on the runway. We're
Speaker 1: not necessarily sing I mean even even like there's a
Speaker 1: picture of rag and bone jeans in your story and
Speaker 1: a guy wearing those without a belt, and that to
Speaker 1: me looks naked.
Speaker 6: Can you imagine wearing at jeans with eye belt?
Speaker 1: I would If I don't, it feels it feels like
Speaker 1: you're missing something.
Speaker 6: Like we're all ilia rosen off from heated rivalry. We
Speaker 6: cannot it's all just like our pants on all like perch,
Speaker 6: you know, like you got some people need a belt, Chris.
Speaker 1: You're a gift.
Speaker 3: No, But it's interesting, Like I know this is about
Speaker 3: guys and stuff, but I too, Like I've gone through
Speaker 3: periods of right, like buying lots of belts, thick belts
Speaker 3: like it, and then I've whittled them down because I
Speaker 3: just don't wear them. And then there's always a few
Speaker 3: like I want to hang on too because I do
Speaker 3: pull them out.
Speaker 6: Yeah, And women's wear for the past couple of years,
Speaker 6: belts have been huge, Like there have been like double
Speaker 6: belts and like trumployd belts they are fake and like
Speaker 6: Elsa Scippaali has like models with like eight belts, and
Speaker 6: now just now men's wear is getting into like having
Speaker 6: a lot of cool belts coming back.
Speaker 1: All right, Well, so maybe you can use that bonus
Speaker 1: checked by.
Speaker 6: A belt for a transition by an expressive belt. That's
Speaker 6: the idea, Like buy something that tells the world about
Speaker 6: you or about your culture, about like what you want
Speaker 6: to say, like making it, make it like a watch
Speaker 6: or a broach or something that you can There's a.
Speaker 3: Lot in this this piece, and we're not gonna be
Speaker 3: able to get to all of it. They get into
Speaker 3: how our bonus is taxed, how to save and invest
Speaker 3: your bonus.
Speaker 1: You've moved on from belts, and then.
Speaker 2: Have to.
Speaker 3: Yeah, moving on kids, And then what are the best
Speaker 3: things to spend a bonus on?
Speaker 1: Should we do spending? I think we should do spending.
Speaker 1: The taxing, I will say, I will say, we're going
Speaker 1: to skip this. The taxing part is really interesting and smart.
Speaker 3: Everybody should read.
Speaker 1: Everybody should read it, because I think a lot of
Speaker 1: people are I've always been confused about why taxes look
Speaker 1: different on bonuses. And if you read it on the
Speaker 1: terminal or Bloomberg dot com, just click on this yellow
Speaker 1: thing and it takes you right to the tax part.
Speaker 1: But anyway, let's get to the fun stuff like buying
Speaker 1: your corvette. Yeah, this guy.
Speaker 6: It is great because you can sort for like what
Speaker 6: you want to learn about and like if you want
Speaker 6: to learn about giving back or investing, you can sort
Speaker 6: of just click the button.
Speaker 1: It'll take you right to that part. My part, Chris,
Speaker 1: you don't need to tell us your part. As I
Speaker 1: was reading this, I knew exactly what you contributed. It
Speaker 1: was not the tax implications. So now Chris did watches
Speaker 1: the donor advice funds. There are donor advice fls. There
Speaker 1: are also informative Okay, sorry, Chris, go ahead.
Speaker 6: So my is if you're gonna splurge by the time
Speaker 6: you get to my part, it's like, Okay, you've spent
Speaker 6: your money on the good unlike the helpful stuff. Now
Speaker 6: you're just gonna blow it. My one of my favorite
Speaker 6: things was this these like crazy private jet journeys over
Speaker 6: Crombie and Kent Outfitter does. They do them all over
Speaker 6: the world, but they do these ones in South America
Speaker 6: where you go to Columbia, Peru and Brazil and you
Speaker 6: go through these great amazing waterways like the Pontanal and
Speaker 6: so you're on a boat in like the Amazon then
Speaker 6: you get on a plane, you fly to a different country,
Speaker 6: and then you go on a boat in a different
Speaker 6: place than you see pink dolphins, you see huge ant eaters.
Speaker 6: So that's fifty nine thousand dollars a person. That's very
Speaker 6: but it's in.
Speaker 1: Three weeks, right, three weeks. I think it's two.
Speaker 3: Weeks, but it's the kind of three weeks.
Speaker 6: I feel like you guys are like me and that
Speaker 6: like you need to get outside sometimes sometimes if you
Speaker 6: go somewhere huge, like a mountain, or you're out on
Speaker 6: the ocean or something, you're like, oh, wow, my stuff
Speaker 6: doesn't matter as much. I recommend a Protect Philip Annual
Speaker 6: Calendar moonfo oh you do last year? Yeah, this is
Speaker 6: a good one because normally there's a lot of watches
Speaker 6: that you go into a pittech and you like actually
Speaker 6: can't get them because they're very there's like a wait list,
Speaker 6: but this one is a very important watch at potech,
Speaker 6: but you can actually get it because it's just like
Speaker 6: not as cool right now. So that's sixty six grand.
Speaker 1: I was gonna say, what's the Yeah, that's person, that's
Speaker 1: the after tax spatch. That's actually I would, I would.
Speaker 1: I'm surprised. I sixty six. I thought protexts were a
Speaker 1: little more expensive, but they can be.
Speaker 6: If you want something that's gonna get you twelve months
Speaker 6: of personal joy. Soft Wave is this incredible new facial
Speaker 6: treatment you use this? I have not, but I we
Speaker 6: several people here a Bloomberg have so we can talk
Speaker 6: about it.
Speaker 3: I love this.
Speaker 6: The skincare stuff, they basically elect they sort of zapp
Speaker 6: the collagen layer under your skin and for twelve months
Speaker 6: it just tightens up your skin because it's basically there's
Speaker 6: like low level injury underneath on the like under dermis.
Speaker 6: It's about three thousand dollars, and people swear by it
Speaker 6: and they I would like to do it, and I
Speaker 6: think I may. And then you know one thing that
Speaker 6: I got for myself, which is actually not expensive at all,
Speaker 6: is this card you did do this? Yes, the bloom
Speaker 6: which is like stainless standless steel key card. It's fifty
Speaker 6: nine dollars and it's basically like a thing that blocks
Speaker 6: apps on your phone.
Speaker 1: This is these these things are having such a moment.
Speaker 6: Yeah, there's one called brick, where like you have a
Speaker 6: brick on your fridge and you have to go like
Speaker 6: walk into another room if you want to use the app.
Speaker 1: But does it creates friction? Yeah, so then it's like
Speaker 1: you're not just automatically, like instinctively grabbing an app, but go.
Speaker 6: Ahead, right, Yeah, And the phone has built in stuff
Speaker 6: where it's like you have time limits and then the
Speaker 6: little thing pops up and it's like you've been on
Speaker 6: Instagram for an hour and a half, Chris, what are
Speaker 6: you doing? And then I'm looking at it very easy
Speaker 6: to be like okay, bypass, But if you have the Bloom,
Speaker 6: which is a stainless feel car that you can keep
Speaker 6: in your wallet or a drawer or another room, that
Speaker 6: level of friction for me actually does that does prevent that?
Speaker 6: Does Like I'm like, okay, bad boy, come on like something.
Speaker 1: Did it permanently change your habits?
Speaker 6: I just started doing it like a month ago.
Speaker 1: We should do something bigger on this.
Speaker 4: Yeah.
Speaker 1: This is like I just think this is a huge
Speaker 1: part of wellness moving forward, and it's our understanding of
Speaker 1: technology and the implications of technology, regardless of what you're
Speaker 1: doing on your phone.
Speaker 6: And recognizing that it's addictive. It's an addictive substance and
Speaker 6: like if you think that like you're going to fix
Speaker 6: this on your own through willpower. You're wrong because it's
Speaker 6: built to beat you. So like we got to figure
Speaker 6: out other ways.
Speaker 3: Part of a bigger action I think of, like also
Speaker 3: parents buying dumb phones for kids instead of our Yes, right,
Speaker 3: like I just you're seeing it kind.
Speaker 1: Of happen and you're going to do it. Chris, all right,
Speaker 1: there's a chat here. There's a chat here, Chris Rowser.
Speaker 3: Yeah, as I said, laha love, this is really fine.
Speaker 1: That was Chris Rouser, Bloomberg Pursuits Editor at Large.
Speaker 3: That wraps up our weekend edition of Bloomberg Business Week
Speaker 3: from Bloomberg Radio. Thank you so much for joining us.
Speaker 1: Be sure to tune into Bloomberg Business Week Monday through
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Speaker 3: and I'm Carol Masser. Have a good and safe weekend. Everyone,
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