1 00:00:00,280 --> 00:00:11,160 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence 2 00:00:11,280 --> 00:00:13,400 Speaker 1: with Alex Steele and Paul Sweeney. 3 00:00:13,480 --> 00:00:16,680 Speaker 2: The real op performance has been the US corporate high yield. 4 00:00:16,880 --> 00:00:19,239 Speaker 3: Are the companies lean enough? Have they trimmed all the fats? 5 00:00:19,280 --> 00:00:22,840 Speaker 2: The semiconductor business is a really cyclical business. 6 00:00:22,600 --> 00:00:26,280 Speaker 1: Breaking market headlines and corporate news from across the globe. 7 00:00:26,320 --> 00:00:28,760 Speaker 3: Do investors like the M and A that we've seen? 8 00:00:28,960 --> 00:00:31,920 Speaker 2: These are two big time blue chip companies. 9 00:00:32,159 --> 00:00:35,920 Speaker 4: Window between the peak and cunt changing super fast. 10 00:00:35,800 --> 00:00:40,840 Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio. 11 00:00:42,040 --> 00:00:44,559 Speaker 2: On Today's Bloomberg Intelligence Show, we dig inside the big 12 00:00:44,600 --> 00:00:47,680 Speaker 2: business stories impacting Wall Street and the global markets. Each 13 00:00:47,720 --> 00:00:49,560 Speaker 2: and every week we provide in depth research and data 14 00:00:49,560 --> 00:00:51,680 Speaker 2: on some of the two thousand companies and one hundred 15 00:00:51,680 --> 00:00:55,160 Speaker 2: and thirty industries our analysts cover worldwide. Today, we'll discuss 16 00:00:55,200 --> 00:00:58,560 Speaker 2: how Google is reshaping search around AI is at racist 17 00:00:58,640 --> 00:01:01,880 Speaker 2: rivals like chat GP, plus a look at how Chinese 18 00:01:01,960 --> 00:01:07,600 Speaker 2: evmaker byd is crushing competitors with a five minute charging system. 19 00:01:07,680 --> 00:01:10,200 Speaker 2: But first we begin with news on the discount variety 20 00:01:10,240 --> 00:01:13,760 Speaker 2: chain dollar Tree. This week, dollar Tree announced it's offloading 21 00:01:13,760 --> 00:01:17,200 Speaker 2: its Family Dollar Chain for about one billion dollars to 22 00:01:17,240 --> 00:01:21,440 Speaker 2: Brigade Capital Management and masseell them Capital Management. And this 23 00:01:21,520 --> 00:01:24,920 Speaker 2: comes a decade after Dollar Tree brought the business for 24 00:01:24,959 --> 00:01:28,360 Speaker 2: nearly nine billion dollars. For more. Co host Alex Steele 25 00:01:28,360 --> 00:01:31,240 Speaker 2: and I were joined by Jennifer bartashis Bloomberg Intelligence Senior 26 00:01:31,280 --> 00:01:34,480 Speaker 2: analyst Retail Stables and packaged Food. We first asked gen 27 00:01:34,560 --> 00:01:37,679 Speaker 2: to break down Dollar Trees purchase and now discount and 28 00:01:37,720 --> 00:01:40,080 Speaker 2: sale of its Family Dollar Chain. 29 00:01:40,319 --> 00:01:42,640 Speaker 5: You are reading that right. They bought it for eight 30 00:01:42,720 --> 00:01:46,000 Speaker 5: point nine billion in twenty fifteen. At that time, they 31 00:01:46,040 --> 00:01:49,440 Speaker 5: had about seventy seven hundred stores and they were generating 32 00:01:49,480 --> 00:01:53,760 Speaker 5: about sixteen billion dollars and they were generating about ten 33 00:01:53,800 --> 00:01:56,440 Speaker 5: point five billion dollars in revenue. And you fast forward 34 00:01:56,480 --> 00:01:59,840 Speaker 5: ten years of multi year investment to try to improve that, 35 00:02:00,360 --> 00:02:03,360 Speaker 5: and they sold it for one billion dollars. Wow, with 36 00:02:03,480 --> 00:02:06,560 Speaker 5: seventy seven hundred stores, so I only three hundred fewer 37 00:02:06,600 --> 00:02:13,080 Speaker 5: stores and sixteen billion dollars in revenue. Wow, it's well. 38 00:02:13,720 --> 00:02:13,960 Speaker 6: Well. 39 00:02:14,080 --> 00:02:16,360 Speaker 5: One of the things I'll say is back in twenty fifteen, 40 00:02:16,440 --> 00:02:20,160 Speaker 5: they way overpaid for this deal and they were in 41 00:02:20,160 --> 00:02:22,560 Speaker 5: a bidding war for it with Dollar General. And I've 42 00:02:22,600 --> 00:02:25,000 Speaker 5: long said that Dollar General was the winner in that 43 00:02:25,200 --> 00:02:29,680 Speaker 5: because they didn't get Family Dollar, and you know Family Dollar. 44 00:02:29,840 --> 00:02:33,080 Speaker 5: It came with a very worn down, tired asset base, 45 00:02:33,440 --> 00:02:37,960 Speaker 5: more locations for their stores, unmotivated staff, and it's taking 46 00:02:38,080 --> 00:02:41,240 Speaker 5: years of investment to try to get it to return 47 00:02:41,320 --> 00:02:44,760 Speaker 5: to some some some revenue growth. And they've been successful 48 00:02:44,760 --> 00:02:47,560 Speaker 5: in doing that, but there just aren't synergies with the 49 00:02:47,600 --> 00:02:49,120 Speaker 5: core Dollar Tree chain. 50 00:02:49,520 --> 00:02:52,600 Speaker 2: Hey, Jen, can you Dollar General Dollar Tree? Can you 51 00:02:52,720 --> 00:02:55,400 Speaker 2: kind of lay out what market they serve and is 52 00:02:55,400 --> 00:02:56,639 Speaker 2: there any difference between those two. 53 00:02:57,160 --> 00:02:59,720 Speaker 5: There actually is a difference between the two. Both of 54 00:02:59,720 --> 00:03:03,160 Speaker 5: them tend to serve slightly lower income households, but the 55 00:03:03,160 --> 00:03:06,560 Speaker 5: main difference is that Dollar General is very focused on 56 00:03:06,680 --> 00:03:10,960 Speaker 5: the rural communities and actually on their left earnings call, 57 00:03:11,040 --> 00:03:14,200 Speaker 5: they talked about closing some more of their underperforming urban 58 00:03:14,280 --> 00:03:18,240 Speaker 5: locations because they just haven't been successful expanding into that space. 59 00:03:18,720 --> 00:03:22,040 Speaker 5: In contrast, more Family Dollar stores are in the more 60 00:03:22,160 --> 00:03:26,480 Speaker 5: urbanized areas, so there is overlap between the two store bases, 61 00:03:26,520 --> 00:03:31,399 Speaker 5: but they're very different actual consumers, even though their core 62 00:03:31,440 --> 00:03:35,160 Speaker 5: customer household income is fairly similar, intends to be in 63 00:03:35,160 --> 00:03:37,760 Speaker 5: those households that earn under fifty thousand dollars a year. 64 00:03:38,160 --> 00:03:39,720 Speaker 3: Tell me how these companies make money. 65 00:03:39,880 --> 00:03:42,480 Speaker 4: Is it based on volume and how many people are 66 00:03:42,520 --> 00:03:44,560 Speaker 4: coming in? Because I mean, I know they don't sell 67 00:03:44,600 --> 00:03:46,840 Speaker 4: stuff for a dollar, but still the whole proposition is 68 00:03:46,920 --> 00:03:47,440 Speaker 4: on the cheap. 69 00:03:47,840 --> 00:03:51,880 Speaker 5: Yeah, it's about convenience and it's about value. And so 70 00:03:52,560 --> 00:03:54,840 Speaker 5: you know what people like about these kinds of stores 71 00:03:54,920 --> 00:03:56,360 Speaker 5: is that they're quick to get in and out of. 72 00:03:56,720 --> 00:03:59,760 Speaker 5: They're located in very close proximity to where people live. 73 00:04:00,440 --> 00:04:02,240 Speaker 5: And so when you think about people who are in 74 00:04:02,280 --> 00:04:04,839 Speaker 5: that income bracket of under fifty thousand dollars a year, 75 00:04:05,240 --> 00:04:08,040 Speaker 5: transportation is an issue. So having something that's in the 76 00:04:08,080 --> 00:04:10,880 Speaker 5: local neighborhood that's quick to get to for fill in 77 00:04:11,000 --> 00:04:14,320 Speaker 5: trips is really how they drive traffic and they make 78 00:04:14,360 --> 00:04:14,840 Speaker 5: their money. 79 00:04:15,480 --> 00:04:18,719 Speaker 2: What are these dollar stores saying these days jen about 80 00:04:19,560 --> 00:04:22,599 Speaker 2: their customer base. We've seen, you know a lot of 81 00:04:22,640 --> 00:04:25,000 Speaker 2: uncertainty com into the economic data just over the past 82 00:04:25,400 --> 00:04:27,280 Speaker 2: couple of months. Here is that being reflected on what 83 00:04:27,320 --> 00:04:30,080 Speaker 2: you're hearing from those dollar store management teams. 84 00:04:30,839 --> 00:04:34,280 Speaker 5: It is with regards to their core customer. Obviously that 85 00:04:34,360 --> 00:04:37,599 Speaker 5: customer is very strapped so when we're hearing news about 86 00:04:37,880 --> 00:04:41,960 Speaker 5: potential cuts to snap benefits, which are you know, old 87 00:04:42,120 --> 00:04:45,680 Speaker 5: term for that as food stamps, that impacts their core customers. 88 00:04:46,400 --> 00:04:50,960 Speaker 5: People are worried about job security and potential layoffs. So 89 00:04:51,320 --> 00:04:54,200 Speaker 5: for those those their core customers, there's a lot of stress. 90 00:04:54,320 --> 00:04:57,159 Speaker 5: But where they are benefiting is they're getting more trade 91 00:04:57,160 --> 00:05:00,560 Speaker 5: down customers. So they're getting hired income household that are 92 00:05:00,560 --> 00:05:04,400 Speaker 5: in sort of middle income households and hire income households 93 00:05:04,440 --> 00:05:06,920 Speaker 5: who are also a little bit worried about the current 94 00:05:07,279 --> 00:05:10,440 Speaker 5: economic environment and are trading down into these stores looking 95 00:05:10,440 --> 00:05:13,159 Speaker 5: for value. So there's a little bit of an offset 96 00:05:13,200 --> 00:05:15,800 Speaker 5: that they can take advantage of. The question is as 97 00:05:15,880 --> 00:05:17,880 Speaker 5: things improve, are they going to be able to hold 98 00:05:17,920 --> 00:05:21,520 Speaker 5: on to those more valuable customers because the hiirre income 99 00:05:21,560 --> 00:05:24,000 Speaker 5: customers are the ones who are buying more than just food. 100 00:05:24,640 --> 00:05:27,360 Speaker 5: They're buying the more discretionary items in the store, and 101 00:05:27,400 --> 00:05:29,800 Speaker 5: that's how you make your margin in this type of 102 00:05:29,880 --> 00:05:30,679 Speaker 5: retail format. 103 00:05:31,360 --> 00:05:34,240 Speaker 4: In terms of tariffs, do these guys have exposure to 104 00:05:34,920 --> 00:05:37,320 Speaker 4: imports overseas and when you have a strategy yet. 105 00:05:37,640 --> 00:05:41,080 Speaker 5: They definitely do have an exposure to tariffs, But for 106 00:05:41,200 --> 00:05:45,520 Speaker 5: family dollar and for Dollar General. Most of their mix 107 00:05:45,640 --> 00:05:47,640 Speaker 5: right now, or the bulk of their sales, is coming 108 00:05:47,680 --> 00:05:52,200 Speaker 5: from consumable so it's food, it's household cleaning supplies. Most 109 00:05:52,240 --> 00:05:55,920 Speaker 5: of that is produced domestically. For Dollar Tree itself, they 110 00:05:55,920 --> 00:05:59,919 Speaker 5: have much higher exposure to to tariffs and to import. 111 00:06:00,080 --> 00:06:04,520 Speaker 5: It's because they have a much bigger amount of discretionary categories, 112 00:06:04,560 --> 00:06:08,839 Speaker 5: so they think about holiday decor, kitchen, you know, choch Key's, 113 00:06:08,920 --> 00:06:12,560 Speaker 5: things like that, and up to now, you know, we've 114 00:06:12,560 --> 00:06:15,640 Speaker 5: got a ten percent tariffy on imports from China. They 115 00:06:15,640 --> 00:06:17,880 Speaker 5: say they've been able to offset about ninety percent of 116 00:06:17,920 --> 00:06:21,960 Speaker 5: that cost so far, but as additional tariffs come, it's 117 00:06:22,000 --> 00:06:25,440 Speaker 5: going to become a bigger challenge for Dollar Tree to manage. 118 00:06:25,080 --> 00:06:28,440 Speaker 2: Our Thanks to Jennifer Bartashi's Bloomberg Intelligence Senior Analyst Retail, 119 00:06:28,480 --> 00:06:31,240 Speaker 2: Staples and package Food, this week we focused on a 120 00:06:31,240 --> 00:06:34,000 Speaker 2: couple of Bloomberg Big Take stories. The story focuses on 121 00:06:34,080 --> 00:06:36,840 Speaker 2: Jay Clayton, President Donald Trump's pick to lead the Southern 122 00:06:37,000 --> 00:06:40,240 Speaker 2: District of New York, and in this position, Clayton will 123 00:06:40,279 --> 00:06:43,120 Speaker 2: have to balance the President's legal priorities with the need 124 00:06:43,160 --> 00:06:45,720 Speaker 2: to stay independent. For more, co hosts Alex Steel and 125 00:06:45,760 --> 00:06:49,080 Speaker 2: I were joined by Ava Bennie Marson, Bloomberg News legal reporter. 126 00:06:49,520 --> 00:06:51,640 Speaker 2: We first asked Ava to paint a picture of Jay 127 00:06:51,640 --> 00:06:53,080 Speaker 2: Clayton and his career. 128 00:06:53,320 --> 00:06:56,680 Speaker 7: So he has a pretty impressive resume. He has been 129 00:06:56,839 --> 00:07:00,440 Speaker 7: a long time senior council at Sullivan and from Well, 130 00:07:00,480 --> 00:07:03,040 Speaker 7: a white shoe firm primarily based. 131 00:07:02,760 --> 00:07:03,320 Speaker 8: In New York. 132 00:07:03,680 --> 00:07:07,400 Speaker 7: He was the Chair of the Securities and Exchange Commission 133 00:07:07,480 --> 00:07:10,920 Speaker 7: under the first Trump administration, and most recently he has 134 00:07:11,000 --> 00:07:13,880 Speaker 7: been the chair of Apollo. He was brought into that 135 00:07:13,920 --> 00:07:18,680 Speaker 7: position at the investing house to help clean up and 136 00:07:18,720 --> 00:07:22,920 Speaker 7: get things back in order after the Jeffrey Epstein scandal, 137 00:07:23,400 --> 00:07:26,360 Speaker 7: and now he is going into one of the most 138 00:07:26,440 --> 00:07:31,040 Speaker 7: premiere seats in American law, which is the US Attorney 139 00:07:31,040 --> 00:07:33,400 Speaker 7: for the Southern District of New York, also known as 140 00:07:33,400 --> 00:07:34,480 Speaker 7: the Sheriff of Wall Street. 141 00:07:35,200 --> 00:07:38,200 Speaker 2: So Eva talked us about this. The Southern District of 142 00:07:38,240 --> 00:07:43,440 Speaker 2: New York historically a very powerful office here, fiercely defending 143 00:07:43,480 --> 00:07:46,280 Speaker 2: its independence, but arguably it's come under some pressure recently, 144 00:07:46,280 --> 00:07:50,040 Speaker 2: most recently with the Mayor Adams case here. What's that 145 00:07:50,080 --> 00:07:50,920 Speaker 2: angle to the story? 146 00:07:51,040 --> 00:07:53,640 Speaker 7: Absolutely, So, the Southern District of New York has a 147 00:07:53,720 --> 00:07:57,280 Speaker 7: nickname of the Sovereign District because it really prizes its 148 00:07:57,320 --> 00:08:01,240 Speaker 7: autonomy from Washington and see itself as a kind of 149 00:08:01,360 --> 00:08:05,960 Speaker 7: independent institution. It chases really big headline grabbing cases on 150 00:08:06,000 --> 00:08:12,360 Speaker 7: Wall Street, in politics, in terrorism, so it's really prized 151 00:08:13,080 --> 00:08:18,280 Speaker 7: itself as being independent. But that came under threat recently 152 00:08:18,880 --> 00:08:22,920 Speaker 7: when after the inauguration day Washington DC, some of the 153 00:08:22,920 --> 00:08:26,200 Speaker 7: senior officials at the Department of Justice there asked the 154 00:08:26,200 --> 00:08:29,600 Speaker 7: Southern District to drop the charges against New York Mayor 155 00:08:29,720 --> 00:08:33,800 Speaker 7: Eric Adams, and that was quite controversial. It led to 156 00:08:33,800 --> 00:08:37,600 Speaker 7: a string of resignations, including by the acting boss at 157 00:08:37,640 --> 00:08:43,040 Speaker 7: the time, a seasoned prosecutor named Daniel Sassoon. She refused 158 00:08:43,080 --> 00:08:45,520 Speaker 7: to comply with that order to drop the case and 159 00:08:45,600 --> 00:08:48,439 Speaker 7: resigned and staid that set off a number of other departures. 160 00:08:48,800 --> 00:08:51,680 Speaker 7: So the office has been in a bit of a 161 00:08:51,760 --> 00:08:55,439 Speaker 7: tenuous situation. There has been some terminal there, and Joe 162 00:08:55,480 --> 00:08:58,439 Speaker 7: Clayton is really coming in at an interesting time. One 163 00:08:58,440 --> 00:09:01,040 Speaker 7: of the big questions is how will he managed that 164 00:09:01,160 --> 00:09:02,840 Speaker 7: relationship with the Trump administration. 165 00:09:03,320 --> 00:09:06,320 Speaker 4: Aside from that relationship, like what will be on his 166 00:09:06,400 --> 00:09:08,960 Speaker 4: docket regardless, and you know, you mentioned the Eric Adams case, 167 00:09:09,000 --> 00:09:11,920 Speaker 4: but like what would we expect him to do as 168 00:09:11,960 --> 00:09:13,000 Speaker 4: head of this area. 169 00:09:13,120 --> 00:09:15,360 Speaker 7: So we've gotten a bit of an insight into the 170 00:09:15,480 --> 00:09:19,200 Speaker 7: kind of priorities he has going into the role. From 171 00:09:19,280 --> 00:09:23,080 Speaker 7: interviewing more than thirty people who know Clayton and who 172 00:09:23,080 --> 00:09:26,600 Speaker 7: have had conversations with other SDMY prosecutors, we know that 173 00:09:26,640 --> 00:09:31,200 Speaker 7: he's particularly interested in focusing on human trafficking, on college 174 00:09:31,200 --> 00:09:37,200 Speaker 7: campus protests, on anti semitism, and also targeting how bad 175 00:09:37,280 --> 00:09:42,079 Speaker 7: people finance themselves, so money laundering. That's kind of in 176 00:09:42,080 --> 00:09:46,240 Speaker 7: line with what SDM Y has done traditionally. You know 177 00:09:46,360 --> 00:09:48,839 Speaker 7: here at Bloomberg, we know them as the office that 178 00:09:49,280 --> 00:09:54,480 Speaker 7: prosecutes big white collar cases like FTX and Archagos. But 179 00:09:54,720 --> 00:09:58,400 Speaker 7: some of these priorities certainly echo the kind of priorities 180 00:09:58,440 --> 00:10:02,360 Speaker 7: that President Donald Trump has spoken about since an inauguration 181 00:10:02,520 --> 00:10:02,960 Speaker 7: day too. 182 00:10:03,240 --> 00:10:05,760 Speaker 2: Do we know anything about his relationship with President Trump, 183 00:10:05,760 --> 00:10:09,320 Speaker 2: because oftentimes that ends up being a critical, critical issue. 184 00:10:09,480 --> 00:10:11,960 Speaker 7: Yes, he has quite a close relationship with Donald Trump. 185 00:10:12,480 --> 00:10:14,839 Speaker 7: From the people that we've spoken to, It's not something 186 00:10:14,880 --> 00:10:19,160 Speaker 7: that he boasts about, but the tour close golfing buddies. 187 00:10:20,080 --> 00:10:24,440 Speaker 7: They're both very good golfers. He was in line for 188 00:10:24,520 --> 00:10:28,480 Speaker 7: the SDNY role actually during the first Trump administration after 189 00:10:28,520 --> 00:10:31,720 Speaker 7: he was Chair of the SEC, but that didn't work out. 190 00:10:32,679 --> 00:10:36,040 Speaker 7: He is JA Clayton is well regarded in the New 191 00:10:36,120 --> 00:10:39,880 Speaker 7: York circles that Trump seeks out and seeks advice from 192 00:10:39,920 --> 00:10:42,839 Speaker 7: as well, So he's going in there with that particularly 193 00:10:42,880 --> 00:10:46,880 Speaker 7: close relationship, and from the conversations that we've had with 194 00:10:46,920 --> 00:10:50,920 Speaker 7: people around Clayton, he certainly thinks that the President will 195 00:10:51,160 --> 00:10:53,600 Speaker 7: and the President's allies and people around him will listen 196 00:10:53,640 --> 00:10:55,679 Speaker 7: to him and will let him get on with the 197 00:10:55,760 --> 00:10:58,160 Speaker 7: job that he has to do there. Whether that turns 198 00:10:58,160 --> 00:11:02,200 Speaker 7: out to be the case is something that we'll have 199 00:11:02,200 --> 00:11:03,040 Speaker 7: to watch and see. 200 00:11:03,200 --> 00:11:05,240 Speaker 3: What are the criticisms surrounding Jake Clayton. 201 00:11:05,720 --> 00:11:07,960 Speaker 7: One of the big criticisms is that he has never 202 00:11:07,960 --> 00:11:11,200 Speaker 7: been a federal prosecutor before, which is extremely unusual for 203 00:11:11,280 --> 00:11:16,040 Speaker 7: someone going in as the boss of SDMY. Most of 204 00:11:16,080 --> 00:11:18,440 Speaker 7: the people who have occupied that position have in fact 205 00:11:18,520 --> 00:11:23,120 Speaker 7: been federal prosecutors, specifically in that office, So that was 206 00:11:23,120 --> 00:11:25,600 Speaker 7: a big criticism the first time around in twenty twenty. 207 00:11:26,400 --> 00:11:29,000 Speaker 7: It has been brought up again, but to a lesser degree. 208 00:11:29,360 --> 00:11:33,240 Speaker 7: When he was first nominated by President Donald Trump late 209 00:11:33,320 --> 00:11:35,960 Speaker 7: last year. There was a sense of relief, certainly within 210 00:11:36,000 --> 00:11:39,160 Speaker 7: the office that this was someone who has a good 211 00:11:39,200 --> 00:11:42,080 Speaker 7: reputation in legal circles in New York, and he's worked 212 00:11:42,120 --> 00:11:45,160 Speaker 7: in government before, he's worked at the SEC. He's a 213 00:11:45,240 --> 00:11:48,920 Speaker 7: known quantity, and there was a sense of comfort with 214 00:11:49,000 --> 00:11:49,680 Speaker 7: his nomination. 215 00:11:50,120 --> 00:11:51,920 Speaker 2: Does you have an agenda right here? At an agenda 216 00:11:52,080 --> 00:11:54,880 Speaker 2: just meaning a to do list here that's front and center. 217 00:11:55,040 --> 00:11:55,560 Speaker 3: He does. 218 00:11:55,600 --> 00:11:55,960 Speaker 8: He does. 219 00:11:56,000 --> 00:11:58,200 Speaker 7: As I was saying before, We've got a bit of 220 00:11:58,200 --> 00:12:00,240 Speaker 7: a sense of what he's going in with and what 221 00:12:00,240 --> 00:12:03,679 Speaker 7: he wants to focus on, and that involves human trafficking, 222 00:12:04,360 --> 00:12:07,880 Speaker 7: a crackdown on college campus protests, and anti semitism. He's 223 00:12:07,920 --> 00:12:10,439 Speaker 7: been vocal about some of these things in the past 224 00:12:11,280 --> 00:12:15,560 Speaker 7: and has expressed disappointment that the government hasn't done a 225 00:12:15,600 --> 00:12:18,280 Speaker 7: whole lot in his view, to crack down. 226 00:12:18,120 --> 00:12:19,560 Speaker 3: On college campus protests. 227 00:12:20,520 --> 00:12:24,800 Speaker 7: So we expect to see those areas focused on. But 228 00:12:24,920 --> 00:12:27,320 Speaker 7: also why call work. This is the kind of work 229 00:12:27,320 --> 00:12:30,240 Speaker 7: that makes that office so famous, and there is a 230 00:12:30,280 --> 00:12:33,000 Speaker 7: sense he doesn't really need to encourage people to go 231 00:12:33,040 --> 00:12:36,599 Speaker 7: and chase those big cases. They will just happen regardless. 232 00:12:36,720 --> 00:12:40,560 Speaker 7: Given that the office is essentially in charge of policing. 233 00:12:40,280 --> 00:12:42,959 Speaker 2: Law Street our thanks to Ava, Benny Marris and Bloomberg 234 00:12:43,000 --> 00:12:45,680 Speaker 2: News Legal Reporter. Coming up will break down how Novo 235 00:12:45,760 --> 00:12:49,640 Speaker 2: Nordesk is looking to refill its pipepoint of experimental drug treatments. 236 00:12:49,800 --> 00:12:53,080 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 237 00:12:53,120 --> 00:12:55,679 Speaker 2: depth research and data on two thousand companies and one 238 00:12:55,760 --> 00:12:58,760 Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via 239 00:12:58,800 --> 00:13:01,360 Speaker 2: b I go on the terminal. I'm Paul Sweeney. This 240 00:13:01,559 --> 00:13:02,199 Speaker 2: is Bloomberg. 241 00:13:07,280 --> 00:13:11,000 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 242 00:13:11,080 --> 00:13:14,439 Speaker 1: weekdays at ten am Eastern on Applecarplay and Android Auto 243 00:13:14,559 --> 00:13:17,640 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 244 00:13:17,679 --> 00:13:20,640 Speaker 1: get your podcasts, or watch us live on YouTube. 245 00:13:21,520 --> 00:13:24,320 Speaker 2: We moved to the health and pharmaceutical space this week. 246 00:13:24,440 --> 00:13:27,640 Speaker 2: Novo Nordis agreed to pay Hong Kong based United Laboratories 247 00:13:27,679 --> 00:13:29,840 Speaker 2: as much as two billion dollars for a next generation 248 00:13:29,960 --> 00:13:33,800 Speaker 2: obesity drug. It's a Danish ozembic maker's latest move to 249 00:13:33,840 --> 00:13:37,280 Speaker 2: refill its pipeline of experimental treatments. For more on this 250 00:13:37,320 --> 00:13:39,199 Speaker 2: and the latest news in the biotech space, co host 251 00:13:39,240 --> 00:13:42,239 Speaker 2: Alex Steel and I were joined by Sam Fazzelli, Bloomberg Intelligence, 252 00:13:42,280 --> 00:13:46,440 Speaker 2: Director of Research for Global Industries and a senior pharmaceuticals analyst. 253 00:13:46,520 --> 00:13:48,840 Speaker 2: I first asked Sam about how much money is going 254 00:13:48,880 --> 00:13:50,400 Speaker 2: into the ob city market. 255 00:13:50,520 --> 00:13:53,200 Speaker 6: As you know, obesity is hot and there's been quite 256 00:13:53,240 --> 00:13:55,640 Speaker 6: a few deals in there. We talked about the deal 257 00:13:55,679 --> 00:13:58,760 Speaker 6: between Russian Zealand Pharmaceuticals, and this week, as you run, 258 00:13:58,840 --> 00:14:01,000 Speaker 6: he said, we have the one between over Notice and 259 00:14:01,080 --> 00:14:04,760 Speaker 6: this time a Chinese biotech company and it's an asset 260 00:14:04,840 --> 00:14:09,240 Speaker 6: that continues to broaden their portfolio of X number of 261 00:14:09,320 --> 00:14:12,640 Speaker 6: mechanisms of action to try and hit this big issue. 262 00:14:12,720 --> 00:14:13,840 Speaker 8: And it's an interesting deal. 263 00:14:13,880 --> 00:14:16,200 Speaker 6: I mean, you know, it's China for a start, and 264 00:14:16,360 --> 00:14:19,400 Speaker 6: it's interesting because I've seen others asters an Ix said 265 00:14:19,400 --> 00:14:22,040 Speaker 6: they're putting two and a half billion dollars investment into 266 00:14:22,040 --> 00:14:25,960 Speaker 6: a research center in China, two hundred million dollars up front, 267 00:14:25,960 --> 00:14:28,560 Speaker 6: one point eight billion dollars what we call bio dollars. 268 00:14:28,560 --> 00:14:32,600 Speaker 6: To come BUYO dollars, very very dollar bio dollars. But 269 00:14:32,720 --> 00:14:34,560 Speaker 6: bio dollars are the sorts of dollars that you and 270 00:14:34,640 --> 00:14:37,840 Speaker 6: I would like to have for real, except they're not real. 271 00:14:38,280 --> 00:14:41,960 Speaker 6: I you know, if this works, and that works, and 272 00:14:42,000 --> 00:14:44,200 Speaker 6: that works, you get another hundred, and then that and 273 00:14:44,200 --> 00:14:46,760 Speaker 6: then landing out of the two hundred. So when far 274 00:14:47,160 --> 00:14:49,160 Speaker 6: biotech companies love it, they added all up and say, 275 00:14:49,240 --> 00:14:51,720 Speaker 6: look how big our deal is actually upfront? Only two 276 00:14:51,800 --> 00:14:54,240 Speaker 6: hundred although I wouldn't mind two hundred million dollars either. 277 00:14:54,240 --> 00:14:56,160 Speaker 3: I mean wouldn't turn you away exactly. 278 00:14:56,760 --> 00:15:00,280 Speaker 2: So what's the big question or big discussion have with 279 00:15:00,320 --> 00:15:02,240 Speaker 2: your clients these days? Sam? 280 00:15:02,520 --> 00:15:05,160 Speaker 6: So, as you know, Paul, we have these anonymous chats 281 00:15:05,240 --> 00:15:09,280 Speaker 6: with different industry investors, and we have one for the 282 00:15:09,320 --> 00:15:12,240 Speaker 6: drug sector, and of course there is a huge amount 283 00:15:12,320 --> 00:15:16,600 Speaker 6: of Can I call it depression, Yes, I think we can. 284 00:15:17,160 --> 00:15:20,840 Speaker 6: As regards to public biotech markets, it's been five years. 285 00:15:20,880 --> 00:15:23,920 Speaker 6: If you look at the XBI, which is an ETF 286 00:15:23,920 --> 00:15:26,000 Speaker 6: that tracks the biotechs that are listed on the SIMP 287 00:15:26,120 --> 00:15:30,640 Speaker 6: five hundred, it's gone nowhere pretty much for five years. 288 00:15:31,160 --> 00:15:33,840 Speaker 6: And if you want to really depress yourself, plot that 289 00:15:33,880 --> 00:15:36,200 Speaker 6: against the SMP five hundred and we all know where 290 00:15:36,240 --> 00:15:40,520 Speaker 6: that's gone, irrespective of the latest little little down. So 291 00:15:40,560 --> 00:15:43,880 Speaker 6: that's where biotech investors are a bit sad. On the 292 00:15:43,880 --> 00:15:47,840 Speaker 6: other hand, we're seeing some deals with private biotechs, there 293 00:15:47,880 --> 00:15:50,280 Speaker 6: are nowhere near the sort of valuations that would get 294 00:15:50,280 --> 00:15:52,920 Speaker 6: in the public markets, So it actually starts to question 295 00:15:53,600 --> 00:15:55,320 Speaker 6: why would they want to go public if they can 296 00:15:55,400 --> 00:15:58,760 Speaker 6: get these sort of returns by doing a deal with Astroseneca, 297 00:15:58,880 --> 00:16:02,000 Speaker 6: a deal with Sanofi to get four hundred million dollars 298 00:16:02,080 --> 00:16:04,400 Speaker 6: up front for a very early stage asset. 299 00:16:04,760 --> 00:16:05,800 Speaker 3: Where are we with measles? 300 00:16:06,080 --> 00:16:06,280 Speaker 8: Oh? 301 00:16:06,360 --> 00:16:10,000 Speaker 6: Yeah, Well, the cases are continuing to rise. The disease 302 00:16:10,080 --> 00:16:12,280 Speaker 6: is still there. I think a lot of people that 303 00:16:12,320 --> 00:16:15,400 Speaker 6: I speak to are convinced that we're only looking at 304 00:16:15,400 --> 00:16:17,440 Speaker 6: the tip of the iceberg when you look at the count. 305 00:16:18,000 --> 00:16:22,360 Speaker 6: But we are slowly going through the respiratory season. COVID's 306 00:16:22,360 --> 00:16:24,880 Speaker 6: on this way down, flu is on its way down 307 00:16:25,000 --> 00:16:27,480 Speaker 6: RSV and its way down. Hopefully measles will be the 308 00:16:27,520 --> 00:16:31,440 Speaker 6: same case and that will come out of this without 309 00:16:31,560 --> 00:16:34,880 Speaker 6: too much collateral damage, which is a horrible thing to 310 00:16:34,920 --> 00:16:38,200 Speaker 6: call it, without too much misery for people who suffer 311 00:16:38,240 --> 00:16:38,520 Speaker 6: from it. 312 00:16:38,880 --> 00:16:41,680 Speaker 2: Same as you well know, there's been a growing skepticism 313 00:16:41,680 --> 00:16:44,760 Speaker 2: and regarding vaccinations in general here in the United States. 314 00:16:44,800 --> 00:16:47,480 Speaker 2: How is it in the rest of the world, the 315 00:16:47,520 --> 00:16:49,400 Speaker 2: rest of the Western world, I'd say, I. 316 00:16:49,360 --> 00:16:52,280 Speaker 6: Mean, Paul Remember the author of the paper that has 317 00:16:52,320 --> 00:16:56,560 Speaker 6: now been disgraced and disqualified of whatever the right phrase 318 00:16:56,640 --> 00:17:02,080 Speaker 6: is removed from the scientific conscience for linking MMR vaccines 319 00:17:02,680 --> 00:17:07,680 Speaker 6: to autism was a British scientist or medic But whether 320 00:17:07,720 --> 00:17:09,600 Speaker 6: you want to qualify them as scientists or not, it's 321 00:17:09,640 --> 00:17:12,639 Speaker 6: a different matter. And so there's been you know, the 322 00:17:12,680 --> 00:17:15,840 Speaker 6: story of vaccine skepticism has been here too. It's just 323 00:17:15,920 --> 00:17:19,600 Speaker 6: a little bit different because it's very easy. It's all free, 324 00:17:19,680 --> 00:17:21,960 Speaker 6: it's available to anybody who wants it is available, and 325 00:17:22,000 --> 00:17:23,840 Speaker 6: the energies you walk into a doctor and you get it, 326 00:17:24,040 --> 00:17:27,960 Speaker 6: so you don't have to pay anything. And therefore vaccination compliance, 327 00:17:28,080 --> 00:17:32,720 Speaker 6: particularly in the older cohort of folks is better here. 328 00:17:33,080 --> 00:17:35,239 Speaker 4: Okay, that's interesting, But then when you take a look 329 00:17:35,240 --> 00:17:38,040 Speaker 4: at that, at the broader landscape and just the victriol 330 00:17:38,160 --> 00:17:41,919 Speaker 4: still into the m n R vaccines in general, like 331 00:17:41,960 --> 00:17:44,720 Speaker 4: not just for measles, but just in general. Does this 332 00:17:44,800 --> 00:17:48,200 Speaker 4: really hurt innovation? Does it hurt the private sector's willingness 333 00:17:48,200 --> 00:17:49,800 Speaker 4: to like pump money into all these things? 334 00:17:50,080 --> 00:17:52,159 Speaker 6: Well, I mean, the United States is one of the 335 00:17:52,160 --> 00:17:55,560 Speaker 6: biggest pharmaceutical markets, but they're not the only one. And 336 00:17:55,600 --> 00:17:57,919 Speaker 6: at the end of the day, one has to assume 337 00:17:57,960 --> 00:18:02,080 Speaker 6: that good data and good science will prevail, whether it's 338 00:18:02,080 --> 00:18:06,000 Speaker 6: an MR and A vaccine or not. Maybe it's necessary 339 00:18:06,040 --> 00:18:08,080 Speaker 6: to do some studies to prove that MR and A 340 00:18:08,160 --> 00:18:11,480 Speaker 6: vaccines are not changing your genome. That's not very difficult 341 00:18:11,520 --> 00:18:14,200 Speaker 6: to do. If it's the intent is there, maybe the 342 00:18:14,280 --> 00:18:18,439 Speaker 6: CDC should do that. But in general, MR and A vaccines, 343 00:18:18,640 --> 00:18:22,480 Speaker 6: normal vaccines, style or standard type vaccines, They're all here 344 00:18:22,520 --> 00:18:23,880 Speaker 6: to stay as far as I'm concerned. 345 00:18:24,000 --> 00:18:26,720 Speaker 2: Our thanks to Sam Fazelli, Bloomberg Intelligence, Director of Research 346 00:18:26,720 --> 00:18:30,680 Speaker 2: for Global Industries and senior pharmaceuticals analysts. We move next 347 00:18:30,680 --> 00:18:34,000 Speaker 2: to earnings from the pet food retailer Chewy. Chewy reported 348 00:18:34,000 --> 00:18:37,119 Speaker 2: earnings for the fourth quarter that beat analysts expectations. The 349 00:18:37,160 --> 00:18:40,040 Speaker 2: results were supported by strong customer growth as a company 350 00:18:40,080 --> 00:18:43,600 Speaker 2: attracted pet owners with its assortment and reliable automated shipments. 351 00:18:43,840 --> 00:18:45,680 Speaker 2: For more co hosts, Alex Steel and I were joined 352 00:18:45,680 --> 00:18:49,440 Speaker 2: by Deanna or rossetto Painya, Bloomberg Intelligence consumer staples analyst. 353 00:18:49,680 --> 00:18:52,600 Speaker 2: We first asked Diana how the Chewy business is going. 354 00:18:53,000 --> 00:18:53,600 Speaker 3: So far, so. 355 00:18:53,680 --> 00:18:57,119 Speaker 9: Good, it seems, and one of the things that I 356 00:18:57,400 --> 00:19:01,560 Speaker 9: find very interesting is that insters seem to wait for 357 00:19:01,600 --> 00:19:06,560 Speaker 9: the next shoe to drop. These companies have experienced good 358 00:19:06,600 --> 00:19:12,360 Speaker 9: growth regardless of how the economic situation is going, because 359 00:19:12,480 --> 00:19:15,560 Speaker 9: it seems to be resilient. The category as a whole 360 00:19:15,840 --> 00:19:17,280 Speaker 9: seems to be very resilient. 361 00:19:17,760 --> 00:19:20,040 Speaker 2: Because what's up at the style one hundred and twenty 362 00:19:20,040 --> 00:19:21,280 Speaker 2: percent of the last year. 363 00:19:21,720 --> 00:19:24,840 Speaker 9: Well, it is because a few things. During four Q 364 00:19:25,040 --> 00:19:28,879 Speaker 9: they experienced the first growth in active consumers. For the 365 00:19:28,920 --> 00:19:32,920 Speaker 9: past couple of years, sales growth has been mainly been 366 00:19:33,040 --> 00:19:36,760 Speaker 9: because of net sales per active consumers, which is pretty 367 00:19:36,800 --> 00:19:40,160 Speaker 9: much pricing. So now that there seems to be growth, 368 00:19:40,200 --> 00:19:44,159 Speaker 9: but at the same time, the forecasts, the guidance for 369 00:19:44,240 --> 00:19:46,480 Speaker 9: twenty twenty five, it seems to be on the lower 370 00:19:46,880 --> 00:19:51,680 Speaker 9: end of long term goals, so that seems to worry investors. 371 00:19:51,760 --> 00:19:54,320 Speaker 3: I think what were the competitors to Chewy? 372 00:19:54,760 --> 00:19:58,080 Speaker 9: I would say Amazon is is you know, significant, Yes, 373 00:19:58,320 --> 00:20:01,400 Speaker 9: on the merchandise side. Obviously one of the things that 374 00:20:01,480 --> 00:20:03,880 Speaker 9: Chewy is doing, and I think it's it's a very 375 00:20:03,920 --> 00:20:07,359 Speaker 9: smart smart play is to be able to differentiate themselves 376 00:20:07,400 --> 00:20:11,520 Speaker 9: besides merchandise, which Amazon does that very well. We have 377 00:20:11,720 --> 00:20:15,240 Speaker 9: conducted a couple of pricing studies Amazon versus Chewy, and 378 00:20:15,280 --> 00:20:17,960 Speaker 9: they are pretty comparable. So one of the things that 379 00:20:18,040 --> 00:20:21,760 Speaker 9: Chewy will differentiate itself is by doing other things such 380 00:20:21,800 --> 00:20:25,160 Speaker 9: as healthcare, such as sponsor ads. That has been very 381 00:20:25,160 --> 00:20:26,280 Speaker 9: profitable for Chewy. 382 00:20:26,680 --> 00:20:29,119 Speaker 2: I'm full disclosure, I have never been a pet owner. 383 00:20:29,480 --> 00:20:31,840 Speaker 2: I know that's a character flaw. But these people are 384 00:20:31,880 --> 00:20:35,560 Speaker 2: passionate about their pets. Does that get reflected into the 385 00:20:35,560 --> 00:20:38,160 Speaker 2: business model that like, is it kind of who cares 386 00:20:38,160 --> 00:20:40,960 Speaker 2: what the economy is doing. I'm buying my fluffy, whatever 387 00:20:41,000 --> 00:20:42,679 Speaker 2: toy it is, or whatever great food it is. 388 00:20:42,960 --> 00:20:45,280 Speaker 9: Yes, I think it is a couple of things. One, 389 00:20:46,320 --> 00:20:50,160 Speaker 9: sometimes you tend to be a little bit more resilient 390 00:20:50,160 --> 00:20:53,639 Speaker 9: in terms of pet spenditure because they don't tend to talk, 391 00:20:53,760 --> 00:20:54,640 Speaker 9: so you. 392 00:20:54,560 --> 00:21:00,080 Speaker 3: Know, so they talk well, you know, talk differently, and 393 00:21:00,119 --> 00:21:05,840 Speaker 3: that is true. But wow, now it's something you're saying 394 00:21:05,840 --> 00:21:07,560 Speaker 3: real words. Okay, go ahead, no. 395 00:21:07,800 --> 00:21:11,080 Speaker 9: But in terms of if they like something, you tend 396 00:21:11,119 --> 00:21:14,240 Speaker 9: to stick with that. And that has been the fuel 397 00:21:14,320 --> 00:21:17,480 Speaker 9: for the premium sation of food and that is why 398 00:21:17,600 --> 00:21:20,360 Speaker 9: you have you know, a companies such as Fresh Pet 399 00:21:21,200 --> 00:21:23,680 Speaker 9: growing twenty percent sales every quarter. 400 00:21:23,960 --> 00:21:27,080 Speaker 2: Our thanks to Diana Rossero pin Yeah, Bloomberg Intelligence Consumer 401 00:21:27,119 --> 00:21:30,040 Speaker 2: Staples analyst. One Bloomberg Big Takes story we focused on 402 00:21:30,080 --> 00:21:34,000 Speaker 2: this week was entitled Google reshaped Search around AI as 403 00:21:34,000 --> 00:21:36,919 Speaker 2: a racist rivals like chat GPT. You can find it 404 00:21:36,960 --> 00:21:39,560 Speaker 2: on Bloomberg dot Com and The Terminal. The story focuses 405 00:21:39,640 --> 00:21:42,680 Speaker 2: on how big change is centered around artificial intelligence are 406 00:21:42,880 --> 00:21:46,200 Speaker 2: underway for the Internet's most popular product, Google. For our 407 00:21:46,240 --> 00:21:49,040 Speaker 2: co hosts Alex Steele and I were joined by Davey Albat, 408 00:21:49,080 --> 00:21:52,440 Speaker 2: Bloomberg Technology reporter. You first asked Davey how Google is 409 00:21:52,480 --> 00:21:54,520 Speaker 2: currently looking at chat GPT. 410 00:21:55,000 --> 00:21:57,239 Speaker 10: You know, it's it's been a few years at this 411 00:21:57,320 --> 00:22:00,760 Speaker 10: point since chat gpt kind of burst out into the scene, 412 00:22:00,920 --> 00:22:03,520 Speaker 10: and that was in late twenty twenty two. I believe 413 00:22:04,600 --> 00:22:07,800 Speaker 10: when that moment happened, there was a lot of panic, 414 00:22:07,880 --> 00:22:11,040 Speaker 10: i would say, within Google, as we've heard from sources, 415 00:22:11,760 --> 00:22:14,720 Speaker 10: and it was really sort of an existential threat to 416 00:22:14,760 --> 00:22:19,280 Speaker 10: them because even though chat GBT wasn't, you know, exactly 417 00:22:19,320 --> 00:22:22,760 Speaker 10: a search product, people were using it like search, so 418 00:22:22,800 --> 00:22:27,400 Speaker 10: they were asking it questions and getting the answers delivered 419 00:22:27,400 --> 00:22:31,680 Speaker 10: to them written by AI, and in a lot of cases, 420 00:22:31,840 --> 00:22:34,560 Speaker 10: you know, it just delivered the information that people were 421 00:22:34,600 --> 00:22:37,760 Speaker 10: looking for, which is kind of the essential function of search, 422 00:22:38,359 --> 00:22:42,600 Speaker 10: and so Google for the past several years has just 423 00:22:42,800 --> 00:22:46,520 Speaker 10: been trying to figure out how to answer you know, 424 00:22:46,600 --> 00:22:51,480 Speaker 10: this threat from open AI and their plan, it appears, 425 00:22:51,600 --> 00:22:55,720 Speaker 10: is to stuff traditional search with generative AI as well. 426 00:22:55,920 --> 00:22:57,760 Speaker 4: So when I go on and I search for, like, 427 00:22:58,160 --> 00:23:01,240 Speaker 4: I don't know swim class for my hid in park slope, 428 00:23:01,680 --> 00:23:04,800 Speaker 4: Now what comes up is that AI generated that pulls 429 00:23:04,880 --> 00:23:05,959 Speaker 4: from broad search. 430 00:23:06,080 --> 00:23:06,879 Speaker 3: Is that what that is? 431 00:23:07,200 --> 00:23:10,040 Speaker 10: Yeah, that's right. So that's a fairly new product called 432 00:23:10,080 --> 00:23:15,760 Speaker 10: AI overviews. So that's where the search results page seeds 433 00:23:15,800 --> 00:23:18,840 Speaker 10: the top portion to results that are written by AI. 434 00:23:19,480 --> 00:23:21,760 Speaker 10: And this you know, Google has come out with a 435 00:23:22,000 --> 00:23:26,800 Speaker 10: search centric AI model that pulls from results and sort 436 00:23:26,800 --> 00:23:29,560 Speaker 10: of summarizes and tries to give you the information right 437 00:23:29,680 --> 00:23:31,040 Speaker 10: on that first page. 438 00:23:31,560 --> 00:23:33,640 Speaker 3: So it gives the. 439 00:23:33,680 --> 00:23:37,280 Speaker 10: User the information faster, but there are problems with it. 440 00:23:37,920 --> 00:23:42,639 Speaker 10: There's the possibility of hallucinating in those responses. And the 441 00:23:42,680 --> 00:23:47,159 Speaker 10: other big problem, and one that we explore in this 442 00:23:47,320 --> 00:23:51,119 Speaker 10: story is you know, what does this mean for the 443 00:23:51,240 --> 00:23:54,960 Speaker 10: open web if people don't need to click through to 444 00:23:55,040 --> 00:23:58,480 Speaker 10: websites anymore and can just get their answers right on 445 00:23:58,560 --> 00:24:03,719 Speaker 10: the search page. Then why would the open Internet still exist? 446 00:24:04,600 --> 00:24:08,399 Speaker 10: Why would it be a good business model to advertise 447 00:24:08,600 --> 00:24:13,440 Speaker 10: on websites. So that's been fascinating to look at. 448 00:24:13,720 --> 00:24:16,320 Speaker 2: So again, one could paint the argument that this is 449 00:24:16,359 --> 00:24:20,400 Speaker 2: a existential threat to the entire Google business model, Yet 450 00:24:20,400 --> 00:24:22,520 Speaker 2: the stock doesn't really reflect that. You know. 451 00:24:22,600 --> 00:24:26,240 Speaker 10: I think that Google has rolled out a lot of 452 00:24:26,280 --> 00:24:32,719 Speaker 10: these changes around generative AI slowly and experimentally, and for 453 00:24:32,800 --> 00:24:36,480 Speaker 10: the most part, what it's doing is trying to show 454 00:24:36,720 --> 00:24:42,159 Speaker 10: the public that it matches the capabilities of open AI 455 00:24:42,560 --> 00:24:47,400 Speaker 10: and chat GPT, and for the most part it actually 456 00:24:47,440 --> 00:24:50,399 Speaker 10: really does. You know, Google is a company with a 457 00:24:50,440 --> 00:24:54,280 Speaker 10: lot of deep AI history even before the you know, 458 00:24:54,359 --> 00:24:58,800 Speaker 10: generative AI was extremely popular. But I think the issue 459 00:24:58,840 --> 00:25:01,919 Speaker 10: is also that the there's this sense of like a 460 00:25:02,119 --> 00:25:06,919 Speaker 10: slow degradation of search and the open Internet that just 461 00:25:07,080 --> 00:25:09,639 Speaker 10: won't really be reflected in the day to day stock 462 00:25:09,760 --> 00:25:13,120 Speaker 10: market because it's so slow. But I think people are 463 00:25:13,560 --> 00:25:17,000 Speaker 10: starting to really get that. Sent who's in charge of 464 00:25:17,040 --> 00:25:20,399 Speaker 10: the AI strategy at Google? So Liz Reid is the 465 00:25:20,440 --> 00:25:24,760 Speaker 10: head of Google Search. She's the person that we profile 466 00:25:24,880 --> 00:25:29,639 Speaker 10: in this story. She's a relative newcomer to search. She 467 00:25:29,800 --> 00:25:33,480 Speaker 10: used to be an executive on the Google Maps division, 468 00:25:33,760 --> 00:25:38,040 Speaker 10: and then when Generative Ai exploded onto the scene, she 469 00:25:38,680 --> 00:25:43,960 Speaker 10: moved over slightly into main search, and she was the 470 00:25:44,000 --> 00:25:46,919 Speaker 10: one behind Search Labs, which hosted a lot of the 471 00:25:47,000 --> 00:25:51,000 Speaker 10: experimental features that I was talking about. So AI overviews, 472 00:25:51,040 --> 00:25:54,800 Speaker 10: for instance, started as an experiment within Search Labs before 473 00:25:54,800 --> 00:25:57,160 Speaker 10: it rolled out to the public more widely. 474 00:25:57,480 --> 00:26:00,479 Speaker 2: Our thanks to davey Abbot, Bloomberg Technology Reporter, coming up 475 00:26:00,560 --> 00:26:04,720 Speaker 2: a conversation with International Papers CEO Andrew Silvernail. You're listening 476 00:26:04,760 --> 00:26:07,639 Speaker 2: to Bloomberg Intelligence on Bloomberg Radio, providing in depth research 477 00:26:07,640 --> 00:26:09,600 Speaker 2: and data on two thousand companies in one hundred and 478 00:26:09,640 --> 00:26:12,680 Speaker 2: thirty industries. You can access Bloomberg Intelligence via bi go 479 00:26:12,840 --> 00:26:15,760 Speaker 2: on the terminal. I'm Paul Sweeney. This is Bloomberg. 480 00:26:17,680 --> 00:26:21,600 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch the program 481 00:26:21,680 --> 00:26:25,120 Speaker 1: live weekdays at ten am Eastern on Applecarplay and Android 482 00:26:25,119 --> 00:26:28,119 Speaker 1: Auto with the Bloomberg Business app. You can also listen 483 00:26:28,200 --> 00:26:31,480 Speaker 1: live on Amazon Alexa from our flagship New York station. 484 00:26:32,040 --> 00:26:34,680 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 485 00:26:35,400 --> 00:26:38,160 Speaker 2: We move next to the International Paper Company, which trades 486 00:26:38,200 --> 00:26:40,520 Speaker 2: on the New York Stock Extrange under the ticker IP. 487 00:26:40,880 --> 00:26:44,200 Speaker 2: The company is one of the leading producers of sustainable packaging, 488 00:26:44,280 --> 00:26:47,280 Speaker 2: container board, and pulp products. This week, co hosts Alex 489 00:26:47,280 --> 00:26:49,120 Speaker 2: Steele and I had the pleasure speaking with the International 490 00:26:49,160 --> 00:26:53,280 Speaker 2: Paper CEO Andrew Silvernail. We discussed what the company does, 491 00:26:53,560 --> 00:26:57,280 Speaker 2: Andrew's economic outlook, and the potential impact of tariffs. We 492 00:26:57,359 --> 00:26:59,520 Speaker 2: began by asking Andrew what the theme was for the 493 00:26:59,560 --> 00:27:02,120 Speaker 2: company's most recent investor day Transformation. 494 00:27:02,280 --> 00:27:04,240 Speaker 11: Okay, it's really about the transformation. It heard in the 495 00:27:04,280 --> 00:27:06,800 Speaker 11: opening talking about International Paper. Of course it's in our name, 496 00:27:07,160 --> 00:27:09,840 Speaker 11: and so people think Global Paper. And the reality is 497 00:27:10,000 --> 00:27:13,119 Speaker 11: we're a packaging company now, so almost one hundred percent 498 00:27:13,280 --> 00:27:17,040 Speaker 11: sustainable packaging. With the acquisition of Dia Smith North America 499 00:27:17,080 --> 00:27:19,200 Speaker 11: and Europe, we're number one in both places, and we're 500 00:27:19,200 --> 00:27:21,520 Speaker 11: all focused on the customer and their packaging needs. You 501 00:27:21,560 --> 00:27:25,600 Speaker 11: mentioned Chewy, great customer for us and a wonderful opportunity 502 00:27:25,600 --> 00:27:28,080 Speaker 11: to build their branding to help them be successful. That's 503 00:27:28,119 --> 00:27:30,560 Speaker 11: what we're all about, is transforming into a packaging company. 504 00:27:30,640 --> 00:27:33,280 Speaker 4: So something that definitely came up is value over volume. 505 00:27:33,359 --> 00:27:34,880 Speaker 4: You want to get the most out of what you're 506 00:27:34,920 --> 00:27:37,600 Speaker 4: doing rather than just the numbers ups is doing something 507 00:27:37,720 --> 00:27:39,639 Speaker 4: very similar and the short term there's a lot of 508 00:27:39,680 --> 00:27:42,040 Speaker 4: angst and pain kind of around that before you get 509 00:27:42,040 --> 00:27:44,159 Speaker 4: to that volume off to that value growth. 510 00:27:44,600 --> 00:27:45,480 Speaker 3: Talk me through the cycle. 511 00:27:45,680 --> 00:27:48,160 Speaker 11: Yeah, So if you think about we were our own 512 00:27:48,200 --> 00:27:50,480 Speaker 11: worst enemy. So for years and years and years, we 513 00:27:50,520 --> 00:27:54,119 Speaker 11: would chase volume at the most inopportune time. And so 514 00:27:54,200 --> 00:27:55,919 Speaker 11: what we've effectively had to do is go back to 515 00:27:55,960 --> 00:27:57,840 Speaker 11: the marketplace and say we need to be paid for 516 00:27:57,880 --> 00:28:00,199 Speaker 11: the value that we're bringing. And that's what we do. 517 00:28:00,320 --> 00:28:02,679 Speaker 11: We come into the marketplace. We're trying to help you 518 00:28:02,720 --> 00:28:04,919 Speaker 11: get your goods to the place you want them to be, 519 00:28:04,920 --> 00:28:07,920 Speaker 11: whether it's fast moving consumer goods or it's industrial goods. 520 00:28:08,040 --> 00:28:09,520 Speaker 11: That's what we're trying to help. But we've got to 521 00:28:09,560 --> 00:28:12,160 Speaker 11: make sure that we're taking care of all of our constituents, 522 00:28:12,400 --> 00:28:14,320 Speaker 11: and frankly, we weren't, and so we've got to get 523 00:28:14,359 --> 00:28:16,760 Speaker 11: that value proposition right. I think we've made that switch 524 00:28:16,800 --> 00:28:18,640 Speaker 11: over the last couple of years. We're seeing that start 525 00:28:18,640 --> 00:28:21,159 Speaker 11: to play out appropriately and we're getting paid for the 526 00:28:21,240 --> 00:28:22,000 Speaker 11: value that we bring. 527 00:28:22,560 --> 00:28:27,800 Speaker 2: You're building a state of the art box plant in Waterloo, Iowa, 528 00:28:27,880 --> 00:28:30,560 Speaker 2: So talk about onshore. That's big time twohundred and sixty 529 00:28:30,560 --> 00:28:32,639 Speaker 2: million dollars. Talk to us about that investment. What are 530 00:28:32,680 --> 00:28:33,280 Speaker 2: you trying to do there? 531 00:28:33,320 --> 00:28:35,119 Speaker 11: So what a lot of people don't understand about the 532 00:28:35,119 --> 00:28:38,480 Speaker 11: packaging business, certainly the paper based packaging business is all 533 00:28:38,520 --> 00:28:41,000 Speaker 11: of the business is done within two hundred miles. Two 534 00:28:41,040 --> 00:28:43,640 Speaker 11: hundred mile radius of a plant. Air is expensive to 535 00:28:43,720 --> 00:28:45,640 Speaker 11: ship and so you've got to be close. So we 536 00:28:45,680 --> 00:28:48,400 Speaker 11: want to be close to our best customers. That's protein alley. 537 00:28:48,480 --> 00:28:52,160 Speaker 11: So that area there's protein a protein alley, Protein alley. 538 00:28:52,200 --> 00:28:54,240 Speaker 3: Really heard, Yeah, I think of the. 539 00:28:54,240 --> 00:28:55,120 Speaker 8: Beef and the chickens. 540 00:28:55,360 --> 00:28:56,640 Speaker 3: I heard that before. 541 00:28:56,800 --> 00:28:58,720 Speaker 11: And so if you think about kind of kind of 542 00:28:58,720 --> 00:29:01,520 Speaker 11: where protein happens in the United States from if you 543 00:29:01,520 --> 00:29:03,280 Speaker 11: think of the South all the way through the Midwest 544 00:29:03,320 --> 00:29:05,920 Speaker 11: through there. We want to be close to our customers. 545 00:29:05,960 --> 00:29:09,000 Speaker 11: We have a great customer relationships. We need a modern facility. 546 00:29:09,040 --> 00:29:10,280 Speaker 11: We're going to have them. I think it's going to 547 00:29:10,280 --> 00:29:12,920 Speaker 11: be the largest facility in the US that does paper 548 00:29:12,920 --> 00:29:16,480 Speaker 11: based packaging. And we want to make sure, because we're 549 00:29:16,520 --> 00:29:18,560 Speaker 11: shipping in from other parts of the country now, service 550 00:29:18,640 --> 00:29:22,360 Speaker 11: those customers very ineffective, very inefficient. We want to be local, 551 00:29:22,440 --> 00:29:24,200 Speaker 11: we want to be close. We want to drive customer 552 00:29:24,240 --> 00:29:26,600 Speaker 11: service and innovation as close to the customer as we can. 553 00:29:27,080 --> 00:29:31,040 Speaker 4: Internationals in your name, So how are you affected by 554 00:29:31,120 --> 00:29:35,160 Speaker 4: potential tariffs? And everyone sort of every country shift to 555 00:29:36,040 --> 00:29:39,680 Speaker 4: nationalism whenever that way that is energy nationalism, goods nationalism, 556 00:29:39,680 --> 00:29:40,840 Speaker 4: supply to nationalism. 557 00:29:40,880 --> 00:29:42,320 Speaker 3: Where do you play and that has affect you? 558 00:29:42,480 --> 00:29:43,080 Speaker 2: Yeah, so we are. 559 00:29:43,120 --> 00:29:46,200 Speaker 11: We're definitely international company, principally North America and Europe. We're 560 00:29:46,200 --> 00:29:49,240 Speaker 11: about two thirds North America and a third Europe. We 561 00:29:49,320 --> 00:29:52,040 Speaker 11: don't ship actually a lot across borders, believe it or not, 562 00:29:52,120 --> 00:29:54,360 Speaker 11: so that doesn't happen. So we're not being impacted directly 563 00:29:54,400 --> 00:29:57,320 Speaker 11: by tariffs with cross border trade, but we're impacted by 564 00:29:57,320 --> 00:30:00,240 Speaker 11: the economy and so as tariffs impact the econ to me, 565 00:30:00,560 --> 00:30:02,320 Speaker 11: that will have an impact of us. So we're watching 566 00:30:02,360 --> 00:30:04,240 Speaker 11: what's going on and we see it in our numbers. 567 00:30:04,280 --> 00:30:07,800 Speaker 11: We've seen the volatility in the last month or so, 568 00:30:07,800 --> 00:30:09,920 Speaker 11: so we're keeping a close eye on that. But that's 569 00:30:09,920 --> 00:30:11,040 Speaker 11: really how it impacts us. 570 00:30:11,240 --> 00:30:15,000 Speaker 2: What are your customers saying about their outlook for the economy? 571 00:30:15,040 --> 00:30:17,200 Speaker 2: I would think that you would have a finger on. 572 00:30:17,160 --> 00:30:17,680 Speaker 8: The pulse of that. 573 00:30:18,200 --> 00:30:19,880 Speaker 11: Yeah, I think we do have a pretty good pulse. 574 00:30:19,960 --> 00:30:22,640 Speaker 11: I think there's uncertainty, if we're fair about that. The 575 00:30:22,720 --> 00:30:26,560 Speaker 11: last month or two or so, there's been some real uncertainty, 576 00:30:26,600 --> 00:30:29,440 Speaker 11: and I think, well, nothing's really happened yet. It's caused 577 00:30:29,480 --> 00:30:31,880 Speaker 11: people to retrench a little bit and ask, hey, do 578 00:30:31,960 --> 00:30:33,840 Speaker 11: I want to make that investment right now? Can I 579 00:30:33,880 --> 00:30:35,440 Speaker 11: hold off on spending money right now? 580 00:30:35,440 --> 00:30:36,120 Speaker 6: And let's see. 581 00:30:36,720 --> 00:30:39,200 Speaker 11: Look, my belief is these things wash out over time, 582 00:30:39,920 --> 00:30:43,000 Speaker 11: and we make investments for decades. We don't make investments 583 00:30:43,000 --> 00:30:45,640 Speaker 11: for quarters or even years. And so we're thinking about 584 00:30:45,680 --> 00:30:46,400 Speaker 11: investments for the. 585 00:30:46,400 --> 00:30:50,560 Speaker 4: Long term in terms of say, hiring labor, how you're 586 00:30:50,600 --> 00:30:54,960 Speaker 4: managing the business. Is it a retrenchman time? Is it expansion? 587 00:30:55,280 --> 00:30:56,520 Speaker 4: How would you define it for you guys? 588 00:30:56,560 --> 00:30:58,719 Speaker 11: Actually, interestingly, it's a little bit of both, right, And 589 00:30:58,720 --> 00:31:01,200 Speaker 11: what I mean by that you yeah, you can actually, 590 00:31:01,280 --> 00:31:03,280 Speaker 11: So when you think about that, you have certain parts 591 00:31:03,320 --> 00:31:06,680 Speaker 11: of your business that aren't as strong or aren't as healthy, 592 00:31:06,680 --> 00:31:08,320 Speaker 11: and you have other parts that are very healthy. So, 593 00:31:08,400 --> 00:31:11,360 Speaker 11: as an example, protein alley very healthy for us, Let's 594 00:31:11,400 --> 00:31:13,760 Speaker 11: make investments in water, rely on it. Let's move the 595 00:31:13,760 --> 00:31:16,880 Speaker 11: the let's move people and this investment. There things that 596 00:31:16,920 --> 00:31:19,200 Speaker 11: are weaker, things that are struggling or markets you're not 597 00:31:19,240 --> 00:31:21,440 Speaker 11: as strong in. You have to reach trend, so you have. 598 00:31:21,400 --> 00:31:23,680 Speaker 3: To do blaking areas. Are those well you've. 599 00:31:23,560 --> 00:31:25,960 Speaker 11: Got you've got softness in parts of the economy kind 600 00:31:25,960 --> 00:31:27,960 Speaker 11: of broad base. You've got to be concerned about things 601 00:31:27,960 --> 00:31:29,920 Speaker 11: that are going to shrink over time and things, you know, 602 00:31:29,960 --> 00:31:32,320 Speaker 11: things like e commerce that are strong. Things like protein 603 00:31:32,360 --> 00:31:34,520 Speaker 11: and fresh vegetables, those are strong. You want to move 604 00:31:34,600 --> 00:31:37,800 Speaker 11: towards those things. And uh and so you know, we 605 00:31:37,840 --> 00:31:39,720 Speaker 11: want to move our investment towards the parts of the 606 00:31:39,760 --> 00:31:41,720 Speaker 11: economy that we think are going to expand over time, 607 00:31:41,840 --> 00:31:46,280 Speaker 11: location and industry and and really you know, grow on 608 00:31:46,280 --> 00:31:47,040 Speaker 11: those strengths. 609 00:31:47,680 --> 00:31:50,800 Speaker 2: So to the extent, if I think about your company, 610 00:31:51,000 --> 00:31:53,160 Speaker 2: I think about a GDP top line growth story, is 611 00:31:53,160 --> 00:31:55,480 Speaker 2: there anything different than that? I mean, that's it? 612 00:31:55,600 --> 00:31:55,920 Speaker 8: And is it? 613 00:31:56,080 --> 00:31:56,160 Speaker 6: So? 614 00:31:56,280 --> 00:31:59,800 Speaker 2: Is your business really about managing the cost of managing margin? 615 00:32:00,120 --> 00:32:00,640 Speaker 3: No, it's not. 616 00:32:00,680 --> 00:32:02,840 Speaker 11: Okay, Yes, you always have to manage your costs, right, 617 00:32:02,880 --> 00:32:05,240 Speaker 11: but the key thing is you want to align yourself 618 00:32:05,280 --> 00:32:07,560 Speaker 11: with where growth is. I think that's the biggest thing. 619 00:32:07,720 --> 00:32:10,480 Speaker 11: In our investor day, we talked about a volume growth 620 00:32:10,480 --> 00:32:13,160 Speaker 11: that's kind of one to two percent that follows underlying 621 00:32:13,200 --> 00:32:16,360 Speaker 11: volume growth and pricing power over time, it's also about 622 00:32:16,400 --> 00:32:18,560 Speaker 11: one to two percent, so we think we're three to 623 00:32:18,600 --> 00:32:21,240 Speaker 11: four percent grower over time the core market. And then 624 00:32:21,280 --> 00:32:23,920 Speaker 11: that question is can you align with better growing industries 625 00:32:23,920 --> 00:32:24,880 Speaker 11: and can you win markets? 626 00:32:24,880 --> 00:32:27,760 Speaker 2: Here our thanks to the International Paper CEO Andrew Sillerno. 627 00:32:28,040 --> 00:32:31,040 Speaker 2: Each week we look at research from Bloomberg n EF 628 00:32:31,160 --> 00:32:34,560 Speaker 2: previously known as New Energy Finance. They're the team at 629 00:32:34,560 --> 00:32:37,840 Speaker 2: Bloomberg that tracks and analyzes the energy transition from commodities 630 00:32:37,880 --> 00:32:42,640 Speaker 2: to power, transport, industries, buildings, and agricultural sectors. This week 631 00:32:42,640 --> 00:32:46,040 Speaker 2: we looked at how Chinese electric vehicle maker BYD is 632 00:32:46,160 --> 00:32:49,680 Speaker 2: crushing competitors with a five minute charging system. For more, 633 00:32:49,960 --> 00:32:52,280 Speaker 2: co hosts Alex Stale and I were joined by Ryan Fisher, 634 00:32:52,520 --> 00:32:56,200 Speaker 2: Bloomberg b n EF EV charging team leader. We first 635 00:32:56,240 --> 00:32:59,040 Speaker 2: asked Ryan to describe BID's new charging system. 636 00:32:59,320 --> 00:33:01,480 Speaker 8: Yeah, I mean this just come out of nowhere. In 637 00:33:01,560 --> 00:33:02,080 Speaker 8: some ways. 638 00:33:02,120 --> 00:33:05,719 Speaker 12: We had the Porsches of this world doing charging three 639 00:33:05,840 --> 00:33:08,680 Speaker 12: fifty killer? What this is a thousand killer? What we 640 00:33:08,720 --> 00:33:10,920 Speaker 12: got three to four times the kind of other best 641 00:33:11,000 --> 00:33:14,320 Speaker 12: in class that people were expecting when we talk about 642 00:33:14,360 --> 00:33:17,640 Speaker 12: five minutes. Obviously that's similar to gasoline for four hundred 643 00:33:17,720 --> 00:33:20,320 Speaker 12: kilometers of charge. Some of the others are more like 644 00:33:20,520 --> 00:33:24,040 Speaker 12: the best in class. Lucid obviously is quite famous. They're 645 00:33:24,040 --> 00:33:26,040 Speaker 12: doing it in like one hundred maybe one hundred and 646 00:33:26,080 --> 00:33:28,440 Speaker 12: eighty kilometers in that time. So this is a real 647 00:33:28,440 --> 00:33:30,840 Speaker 12: step change. And not only is it that, what you've 648 00:33:30,840 --> 00:33:33,400 Speaker 12: got is an announcement and they're going to do it, 649 00:33:33,560 --> 00:33:35,880 Speaker 12: going to make the vehicles available a month later. So 650 00:33:35,960 --> 00:33:38,720 Speaker 12: typically you might hear an announcement from a Western automaker 651 00:33:38,720 --> 00:33:40,400 Speaker 12: and maybe a couple of years later that tech you've 652 00:33:40,400 --> 00:33:42,920 Speaker 12: heard about will be there. Whereas they're saying these vehicles 653 00:33:42,920 --> 00:33:44,760 Speaker 12: in China, you'll be able to buy them soon. 654 00:33:44,920 --> 00:33:46,440 Speaker 8: But yeah, that is only in China. 655 00:33:46,520 --> 00:33:48,720 Speaker 3: How how did they get it down to five minutes? 656 00:33:49,280 --> 00:33:53,320 Speaker 12: So it seems like they've improved the fast charging technology 657 00:33:53,360 --> 00:33:56,200 Speaker 12: through both the voltage so you have higher voltage on 658 00:33:56,240 --> 00:33:59,720 Speaker 12: the vehicles, you could lower the current or the current 659 00:34:00,040 --> 00:34:04,040 Speaker 12: accept this power, and then changing the battery chemistry as well. 660 00:34:04,280 --> 00:34:05,880 Speaker 8: So the interesting thing is. 661 00:34:05,880 --> 00:34:08,200 Speaker 12: That they've added different types of cooling because if you 662 00:34:08,239 --> 00:34:11,000 Speaker 12: have really high currents going through the battery, then you 663 00:34:11,040 --> 00:34:12,680 Speaker 12: have a lot of heat being created. So they've changed 664 00:34:12,680 --> 00:34:16,279 Speaker 12: their cooling technology. They've improved some of the other intricacies 665 00:34:16,320 --> 00:34:19,080 Speaker 12: of the cells as well. And on a bigger market point, 666 00:34:19,080 --> 00:34:20,440 Speaker 12: you've got a lot of companies saying we're going to 667 00:34:20,480 --> 00:34:24,359 Speaker 12: build solid state batteries, So like next generation battery technologies 668 00:34:24,360 --> 00:34:27,279 Speaker 12: for the car, Well, is that even needed anymore? If 669 00:34:27,360 --> 00:34:31,399 Speaker 12: BYD can do this with an evolution of the current tech, So. 670 00:34:32,480 --> 00:34:36,800 Speaker 2: What can be what likely will be the competitive response 671 00:34:36,880 --> 00:34:40,239 Speaker 2: from the Western battery infrastructure people. They got to up 672 00:34:40,280 --> 00:34:41,520 Speaker 2: their game like now, don't they. 673 00:34:42,280 --> 00:34:45,480 Speaker 8: Yeah, it's just such a race. 674 00:34:45,600 --> 00:34:47,439 Speaker 12: Like you look at these evs and you think about 675 00:34:47,440 --> 00:34:50,239 Speaker 12: buying one, and there's just something new coming that's more advanced, 676 00:34:50,600 --> 00:34:52,879 Speaker 12: one after the other. So like as a consumer, maybe 677 00:34:53,080 --> 00:34:55,200 Speaker 12: you don't want to buy because you think, well, I'm 678 00:34:55,200 --> 00:34:57,160 Speaker 12: going to buy something and that'll be absollete pretty quick. 679 00:34:58,239 --> 00:35:00,839 Speaker 12: From the Western automakers, they going to find it hard. 680 00:35:00,880 --> 00:35:03,279 Speaker 12: You look at BYD, they've just got so many engineers, 681 00:35:03,960 --> 00:35:07,040 Speaker 12: they're vertically integrated. They're doing much of this by themselves, 682 00:35:07,440 --> 00:35:10,040 Speaker 12: all the way down to now buying the ships to 683 00:35:10,680 --> 00:35:13,880 Speaker 12: distribute these cars they've built around the world and getting 684 00:35:13,920 --> 00:35:16,239 Speaker 12: involved in the metals and mining game and things like that. 685 00:35:17,200 --> 00:35:20,840 Speaker 12: So it's hard to imagine how everybody is going to compete. Obviously, 686 00:35:20,840 --> 00:35:24,040 Speaker 12: we've got tariffs in different regions to try and block 687 00:35:24,080 --> 00:35:26,959 Speaker 12: the Chinese out. And then when you think about this tech, 688 00:35:27,120 --> 00:35:29,200 Speaker 12: there is an element of do you actually need it? 689 00:35:29,360 --> 00:35:33,120 Speaker 12: So when you look on the Chinese articles, they were 690 00:35:33,160 --> 00:35:36,680 Speaker 12: looking at the Jaumi Su seven, which is the vehicle 691 00:35:36,719 --> 00:35:39,920 Speaker 12: made by the Jammi, which is the smartphone maker. So 692 00:35:39,960 --> 00:35:42,480 Speaker 12: they've entered the market and they're selling electric vehicles and 693 00:35:42,480 --> 00:35:46,000 Speaker 12: the hundreds of thousands of volume, they've outsold loads of cars. 694 00:35:46,080 --> 00:35:49,759 Speaker 12: It's kind of an amazing story and people comparing saying, well, 695 00:35:49,760 --> 00:35:51,560 Speaker 12: actually this one b Wyde is talking about it is 696 00:35:51,640 --> 00:35:55,680 Speaker 12: ten thousand dollars more expensive. So like the tech is 697 00:35:55,719 --> 00:35:58,960 Speaker 12: not necessarily everything on fast charging when there's people who 698 00:35:59,000 --> 00:36:02,200 Speaker 12: are doing I don't know, fast cars, fancy cars. They 699 00:36:02,239 --> 00:36:05,040 Speaker 12: got a lot of other features as well, like whilst 700 00:36:05,040 --> 00:36:07,359 Speaker 12: this is a step change, do we necessarily need five 701 00:36:07,360 --> 00:36:08,400 Speaker 12: minutes over ten minutes? 702 00:36:08,440 --> 00:36:11,640 Speaker 8: Does everybody care? It's debatable, I mean depends how. 703 00:36:11,560 --> 00:36:13,440 Speaker 4: Long your bathroom break is, which you know, you got 704 00:36:13,480 --> 00:36:17,799 Speaker 4: a shot, you get some concessions. So bid is out 705 00:36:17,800 --> 00:36:20,480 Speaker 4: selling a Tesla's in China in particular, you can't get 706 00:36:20,480 --> 00:36:22,680 Speaker 4: a bid car in the US, I should point that out. 707 00:36:22,800 --> 00:36:25,239 Speaker 4: And the BYD sales for this year about five to 708 00:36:25,320 --> 00:36:30,440 Speaker 4: six million cars, So is this five minute battery like 709 00:36:30,480 --> 00:36:33,279 Speaker 4: a big selling point for this in comparison to say 710 00:36:33,320 --> 00:36:34,440 Speaker 4: a Tesla or. 711 00:36:34,440 --> 00:36:35,920 Speaker 8: No, Yeah, I think so. 712 00:36:36,160 --> 00:36:38,120 Speaker 12: And then in China what you've got is I think 713 00:36:38,200 --> 00:36:40,680 Speaker 12: last year BID saw something like one point six million 714 00:36:40,719 --> 00:36:43,439 Speaker 12: pure battery electric because it just the battery powers the car, 715 00:36:43,719 --> 00:36:46,360 Speaker 12: and I think Tesla was somewhere around six hundred thousand 716 00:36:46,360 --> 00:36:47,960 Speaker 12: to seven hundred thousand. So it gives you and they 717 00:36:47,960 --> 00:36:50,399 Speaker 12: were seconds, so it gives you an idea teslare doing well. 718 00:36:50,400 --> 00:36:52,920 Speaker 12: But obviously just how well BYD are doing one of 719 00:36:52,960 --> 00:36:56,000 Speaker 12: the things BYD had been leaning into previously with these plug. 720 00:36:55,760 --> 00:36:57,920 Speaker 8: In hybrid models. So you have an engine and you 721 00:36:57,960 --> 00:36:58,600 Speaker 8: have a battery. 722 00:36:59,080 --> 00:37:02,440 Speaker 12: The engine might only be small and the car itself 723 00:37:02,520 --> 00:37:05,359 Speaker 12: might be mainly running off the battery. So they've done 724 00:37:05,400 --> 00:37:06,960 Speaker 12: quite well with those, and it might just show a 725 00:37:07,000 --> 00:37:08,920 Speaker 12: little bit of a pivot from them to say, actually 726 00:37:09,000 --> 00:37:10,320 Speaker 12: we can maybe do without the engine. 727 00:37:10,320 --> 00:37:11,760 Speaker 8: Now, look we've got this. 728 00:37:11,719 --> 00:37:15,759 Speaker 12: Huge range, fast charging power vehicles like you don't necessarily 729 00:37:15,760 --> 00:37:17,360 Speaker 12: need to worry about that all so it might be 730 00:37:17,360 --> 00:37:20,200 Speaker 12: a pivot from them in terms of Tesla versus BID 731 00:37:21,360 --> 00:37:22,960 Speaker 12: when you said that they're not available in the US, 732 00:37:23,000 --> 00:37:24,879 Speaker 12: but they are available in other regions. So they've done 733 00:37:25,000 --> 00:37:28,240 Speaker 12: very well in places like Brazil and Thailand. There's something 734 00:37:28,280 --> 00:37:31,399 Speaker 12: like eighty to ninety percent share of the EV market there, 735 00:37:31,920 --> 00:37:35,360 Speaker 12: and like eighty ninety percent share is obviously huge for 736 00:37:35,400 --> 00:37:38,360 Speaker 12: the that's just that's Chinese manufacturers, with which Bwide is 737 00:37:38,400 --> 00:37:39,160 Speaker 12: pretty major one. 738 00:37:39,680 --> 00:37:40,760 Speaker 8: They've got a plant out. 739 00:37:40,600 --> 00:37:43,359 Speaker 12: In Brazil as well, so they're making moves to kind 740 00:37:43,360 --> 00:37:46,080 Speaker 12: of dominate those The charging tech could be part of 741 00:37:46,080 --> 00:37:48,120 Speaker 12: that too. So the interesting thing is, like we've had 742 00:37:48,160 --> 00:37:51,000 Speaker 12: these like charging connector wards. Do you have the Tesla connector? 743 00:37:51,400 --> 00:37:54,080 Speaker 12: Do you have the connector that all the other manufacturers 744 00:37:54,120 --> 00:37:56,440 Speaker 12: are using? And in Europe all the other manufacturers won out. 745 00:37:56,440 --> 00:37:59,400 Speaker 12: In America, Tesla went out well. Arguably in some of 746 00:37:59,440 --> 00:38:02,840 Speaker 12: these kind of smaller merging markets that you could end 747 00:38:02,920 --> 00:38:07,200 Speaker 12: up with the Chinese connector becoming an interesting proposition, and 748 00:38:07,200 --> 00:38:09,680 Speaker 12: maybe the Chinese automotive industry will. 749 00:38:09,520 --> 00:38:10,160 Speaker 8: Think about that. 750 00:38:10,480 --> 00:38:12,200 Speaker 12: And it doesn't mean that they've got it so far, 751 00:38:12,280 --> 00:38:14,040 Speaker 12: but if they're selling the most cars and they've got 752 00:38:14,040 --> 00:38:15,239 Speaker 12: the most advanced charging tech. 753 00:38:15,280 --> 00:38:17,359 Speaker 8: Then maybe that's the way that they can exert more 754 00:38:17,360 --> 00:38:18,800 Speaker 8: influence over the rest of the world. 755 00:38:19,120 --> 00:38:21,960 Speaker 2: Our thanks to Ryan Fisher, Bloomberg b n ef EV 756 00:38:22,200 --> 00:38:25,440 Speaker 2: Charging team leader. That's this week's edition of Bloomberg Intelligence 757 00:38:25,440 --> 00:38:28,160 Speaker 2: on Bloomberg Radio, providing in depth research and data on 758 00:38:28,160 --> 00:38:30,680 Speaker 2: two thousand companies and one hundred and thirty industries. And 759 00:38:30,760 --> 00:38:33,400 Speaker 2: remember you can access Bloomberg Intelligence via b I go 760 00:38:33,560 --> 00:38:35,160 Speaker 2: on the terminal. I'm Paul Sweeney. 761 00:38:36,160 --> 00:38:40,839 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 762 00:38:41,040 --> 00:38:44,520 Speaker 1: and anywhere else you get your podcasts. Listen live each 763 00:38:44,520 --> 00:38:48,240 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 764 00:38:48,400 --> 00:38:51,960 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 765 00:38:52,360 --> 00:38:55,240 Speaker 1: You can also watch us live every weekday on YouTube 766 00:38:55,680 --> 00:38:58,759 Speaker 1: and always on the Bloomberg Terminal.