WEBVTT - SpaceX's AI Splurge Puts a Damper on Debut Earnings

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, Radio News.

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<v Speaker 2>Welcome to the Daybreak Asia podcast on Dan Schwartzman. Doug

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<v Speaker 2>Chrisner has the week off. We begin with earnings. SpaceX's

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<v Speaker 2>revenue exceeded Wall Street's estimates in the company's first quarterly

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<v Speaker 2>financial report following its blockbuster initial public offering back in June.

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<v Speaker 2>Elon Musk's space company reported revenue of seven point eight

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<v Speaker 2>billion dollars. That's greater than the six point eight one

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<v Speaker 2>billion analysts expected on average, but shares of SpaceX are

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<v Speaker 2>lower and late trading after the company announced over eighteen

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<v Speaker 2>billion dollars in spending on AI. That's where we begin

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<v Speaker 2>our conversation with Bob O'Donnell. Bob is president and chief

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<v Speaker 2>analyst at TECHnalysis Research. He spoke to Bloomberg's Heidi shroud Watts.

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<v Speaker 3>Investors probably shouldn't be concerned about the massive amount of

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<v Speaker 3>AI spend, given that this is how Alon characterizes.

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<v Speaker 4>This company well exactly.

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<v Speaker 5>And look, these kind of investments we're going to be

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<v Speaker 5>seeing from all the major model providers and all the

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<v Speaker 5>big AI companies over the next several years, frankly, and

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<v Speaker 5>people just need to know that that's going to happen.

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<v Speaker 5>You know, what's interesting about what SpaceX is doing is, frankly,

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<v Speaker 5>a lot of their infrastructure costs they're actually leasing out

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<v Speaker 5>to other people. So in some ways they're becoming as

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<v Speaker 5>much of a neo cloud company as they are an

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<v Speaker 5>AI company, because their revenues from the pure AI side

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<v Speaker 5>of selling their own models of grock han't has been

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<v Speaker 5>as big, of.

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<v Speaker 4>Course as we've seen from open ai and anthropics.

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<v Speaker 5>So and yet they've got all this capacity they built,

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<v Speaker 5>and right now it's compute capacity that's really in sharp demand. Now,

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<v Speaker 5>the question longer term, to be fair around SpaceX is, hey,

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<v Speaker 5>is that really the kind of business you want to

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<v Speaker 5>be in, because obviously they have a lot of other

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<v Speaker 5>things going on, and at what point will they need

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<v Speaker 5>to bring back some of that capacity to run their

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<v Speaker 5>own models. So there are a lot of questions there,

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<v Speaker 5>but yes, there's a lot of money being spent on

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<v Speaker 5>this sort of stuff right now.

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<v Speaker 3>There's a lot of existential questions in this space. Right

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<v Speaker 3>We've long been talking about the insatiable need for capacity.

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<v Speaker 3>There's now concerns about overcapacity, there's concerns about rising costs,

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<v Speaker 3>the numerous risks how long this is going to take

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<v Speaker 3>for these ambitions for Elonnas to take, you know, come

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<v Speaker 3>to fruition. Do you think the thesis is a little

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<v Speaker 3>less stable now than it was even just a few

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<v Speaker 3>months ago.

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<v Speaker 4>Well, I do think there are challenges you have to

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<v Speaker 4>be aware of.

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<v Speaker 5>The you know, all the money within SpaceX is coming

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<v Speaker 5>from Starlink, right, I mean that all the profit pardon me,

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<v Speaker 5>and right now Starlink pretty much has that world of

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<v Speaker 5>satellite based communications to itself.

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<v Speaker 4>However, we are going to see competition.

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<v Speaker 5>Amazon has already talked about their Kuyper satellites. Likely there

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<v Speaker 5>will be some other companies as well, So that's going

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<v Speaker 5>to be an issue. And you know, the US carriers

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<v Speaker 5>are not going to take this potential challenge to them

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<v Speaker 5>that you guys were just talking about sitting down. They're

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<v Speaker 5>clearly focused on trying to address this. And the important

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<v Speaker 5>thing to remember about satellite based services is the vast

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<v Speaker 5>majority of satellites come or excuse me, of cell service

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<v Speaker 5>comes from land based networks. The satellites are sort of

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<v Speaker 5>the gravy on top. So Musk is coming at it

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<v Speaker 5>from a different way, which is, hey, we have all

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<v Speaker 5>this great stuff in the areas where there's not a

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<v Speaker 5>lot of people. But in the main areas where people

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<v Speaker 5>live and work all the time, that satellite service doesn't

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<v Speaker 5>really work as well. So it's extraordinarily expensive to build

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<v Speaker 5>out those networks.

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<v Speaker 4>So that's going to be an interesting challenge.

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<v Speaker 5>So I do think there are a number of interesting

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<v Speaker 5>concerns that aren't really being thought through a lot when

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<v Speaker 5>it comes to SpaceX, and there's a lot more kind

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<v Speaker 5>of oh, this is a great vision.

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<v Speaker 4>Let's buying into the vision kind of thing. But it's

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<v Speaker 4>a long way off.

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<v Speaker 3>Yeah, it's a vision that you know, I think, if

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<v Speaker 3>you take a step back, is largely unproven too, right,

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<v Speaker 3>the idea of having data centers in space, how how

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<v Speaker 3>that's going to be powered, and how the data is

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<v Speaker 3>going to be transmitted to But I also do wonder

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<v Speaker 3>what sort of I guess consolidation you expecting from this

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<v Speaker 3>broader group of companies. We've heard some of the rumors

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<v Speaker 3>that have been refuted regarding their China businesses on Tesla.

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<v Speaker 3>Do you expect a bit more of a coming together

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<v Speaker 3>and perhaps shedding of non core business interests.

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<v Speaker 5>You know, look, when it comes to Musk and his plans,

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<v Speaker 5>any of those things are possible, let's be honest. Yeah,

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<v Speaker 5>I mean he could end up pulling all the pieces

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<v Speaker 5>that he wants together, all the ones that are making money,

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<v Speaker 5>and then getting rid of.

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<v Speaker 4>The ones he doesn't see as having opportunities.

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<v Speaker 5>Longer term, it does become a question of, you know,

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<v Speaker 5>a conglomerate of things that you try to build a

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<v Speaker 5>story around but ultimately don't make that much sense. I mean,

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<v Speaker 5>already there are a lot of people who are saying

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<v Speaker 5>that about SpaceX because data centers in space, there are

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<v Speaker 5>enormous technical challenges to make that happen. Let's not forget

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<v Speaker 5>someone has to fix these things occasionally. You can't do

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<v Speaker 5>that if they're in space. I mean, there's just so

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<v Speaker 5>many issues there. So you know, I wouldn't be surprised

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<v Speaker 5>to see a lot of these things. The problem is

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<v Speaker 5>they're just not predictable. You know, He's not a predictable personality,

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<v Speaker 5>so just hard to bet on that and hard to

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<v Speaker 5>know exactly what's going to happen. Some people buy into

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<v Speaker 5>the Musk vision and some people don't, and that becomes

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<v Speaker 5>ultimately the guiding factor when people are thinking about this.

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<v Speaker 3>Yeah, his fans would say that the lack of predictability

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<v Speaker 3>is just part of the genius right well in times

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<v Speaker 3>of the broader landscape, and obviously we've seen a lot

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<v Speaker 3>of rotation and a lot of volatility in the AI

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<v Speaker 3>space over the past few weeks, even into the last

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<v Speaker 3>few days, but a big part of this has been

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<v Speaker 3>the gains made by China, right And I'm just going

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<v Speaker 3>to throw up a quick sort of capture of what

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<v Speaker 3>we're seeing the different models and the different types of

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<v Speaker 3>ability that we're seeing from each of the different models,

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<v Speaker 3>And a lot of these Chinese models are quite clearly

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<v Speaker 3>closing the gap when it comes to cost efficiency, the economics,

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<v Speaker 3>but also the broader efficiency of getting things done as well.

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<v Speaker 3>Is this kind of the disruptive force that is should

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<v Speaker 3>be most worrisome to the US players at the moment?

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<v Speaker 4>Well, look, I do think it's a big issue.

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<v Speaker 5>I happen to be in Beijing this week visiting with

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<v Speaker 5>Lenovo and hearing a lot more about some of these

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<v Speaker 5>Chinese open models and the things that they're doing, and

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<v Speaker 5>the opportunity to have some of these models run locally

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<v Speaker 5>within companies to reduce the costs because right now, of course,

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<v Speaker 5>companies are spending hundreds of millions of dollars on tokens

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<v Speaker 5>into the cloud or chat GPT or clawed from Anthropic

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<v Speaker 5>and all these other companies. These open source models dramatically

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<v Speaker 5>change that. Now there are challenges here in China because

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<v Speaker 5>they're not really making any money, they're not charging it, and.

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<v Speaker 4>Eventually they're going to have to do that.

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<v Speaker 5>So there's a lot of question marks out there, but

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<v Speaker 5>there's no question I believe that open source models is

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<v Speaker 5>open weight models pardon me, are really going to have.

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<v Speaker 4>A dramatic impact. I don't think that means frontier models

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<v Speaker 4>go away.

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<v Speaker 5>I just think we can see an interesting mixture of

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<v Speaker 5>things and that's going to have a lot of impacts overall. Fundamentally,

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<v Speaker 5>companies do need AI compute if they're going to need

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<v Speaker 5>some in the C I think you're going to see

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<v Speaker 5>them use more in the data center.

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<v Speaker 4>AMD earnings that they just came out and they were.

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<v Speaker 5>Talking about Helios, which is coming to bring more data

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<v Speaker 5>center capabilities to some organizations, and then on client devices,

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<v Speaker 5>on PCs, on smartphones, and so we're going to see

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<v Speaker 5>this hybrid AI mixture of all of these different elements.

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<v Speaker 5>And how exactly those play out is still something that

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<v Speaker 5>we're all watching closely, and frankly, it's changing on a

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<v Speaker 5>monthly basis, in part.

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<v Speaker 4>Because of all the evolution of these big bombs.

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<v Speaker 2>That was Bob O'Donnell, president and chief analysts at TECHnalysis Research,

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<v Speaker 2>speaking of Bloomberg's Heidi shroud Watts, and we're bringing their

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<v Speaker 2>conversation to you here on the Daybreak Asia podcast. Welcome

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<v Speaker 2>back to the Daybreak Asia Podcast. I'm Dan Schwartzman. Doug

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<v Speaker 2>Chrisner has the week off. HSPC announced a fresh dot

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<v Speaker 2>buy back and raised its cost cutting target. This comes

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<v Speaker 2>after the lender reported second quarter earning that beat estimates

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<v Speaker 2>despite China's crackdown on cross border wealth flows. And we

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<v Speaker 2>had the chance to catch up with HSBC Group CEO

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<v Speaker 2>Georgia zel Henery. He spoke to Bloomberg's Francine Lacroix.

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<v Speaker 6>Look, one billion dollars in buyback is actually sooner, much

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<v Speaker 6>sooner than expected.

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<v Speaker 7>What does this say about the strength of HSBC right now?

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<v Speaker 8>Well, I think, I mean the results as a whole

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<v Speaker 8>are demonstrating that we are becoming the stronger bank that

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<v Speaker 8>we set out to build. We're very pleased with what

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<v Speaker 8>we announced this morning. We're growing across all our indicators.

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<v Speaker 8>Our revenue growing, our law E loans and deposits are growing,

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<v Speaker 8>our income is growing. We generated returns of nineteen and

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<v Speaker 8>a half percent on tangible equity, so this is, you know,

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<v Speaker 8>this is a good demonstration of a strong business momentum.

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<v Speaker 8>We're also very pleased with the progress we're making on

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<v Speaker 8>the strategy, which we're executing with precision, with discipline and

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<v Speaker 8>at pace. And we've upgraded some of our strategic deliverables,

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<v Speaker 8>including simplification related saves, and just announced three more non

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<v Speaker 8>strategic exits over the last ten days. That's fifteen exits

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<v Speaker 8>since twenty twenty five. And all of this is giving

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<v Speaker 8>us capacity to invest, capacity to accelerate our investment. And finally,

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<v Speaker 8>let me say we're we're you know, we're very confident

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<v Speaker 8>in the potential of this bank. We're very confident our

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<v Speaker 8>ability to unlock it. We are now a leader in

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<v Speaker 8>a number of areas where we're operating with, you know,

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<v Speaker 8>the Asian leader in wealth management, the world Straight bank,

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<v Speaker 8>and we have structural growth opportunities along our footprint, I

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<v Speaker 8>mean Asian wealth, Asia by Asia, the UK growth opportunities.

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<v Speaker 8>So we're pleased to put more of our strength and

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<v Speaker 8>the service for our clients.

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<v Speaker 6>I mean it's impressive because when you privatize hanks And

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<v Speaker 6>last year you said look in terms of buybacks will

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<v Speaker 6>probably take a couple of quarters. So what does this

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<v Speaker 6>big buy bank actually tell us about the return generation

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<v Speaker 6>capability of the bank post hanks And Yeah, so.

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<v Speaker 8>We're pleased to have resumed buy back the squat three

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<v Speaker 8>quarters after we announced Hanksang. We said at that time

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<v Speaker 8>that our priority would be to rebuild capital postal privatization.

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<v Speaker 8>We estimated three quarters to be about the time to

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<v Speaker 8>build that three quarters on were able to return excess

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<v Speaker 8>capital to shareholders. Remember, our priority use of capital first

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<v Speaker 8>is the dividend payoutratio. Second is supporting the organic growth

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<v Speaker 8>of the business. Organic growth with an outs capitite at

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<v Speaker 8>the right returns within our strategic priorities. And we're very

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<v Speaker 8>pleased our loan books have grown. I mean, UK has

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<v Speaker 8>seen consistent growth and we've been able to lean in.

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<v Speaker 8>We're very pleased to see Hong Kong finally resume to

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<v Speaker 8>loan growth. So those will be the priority. Of course,

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<v Speaker 8>excess capital priority distribution mechanism has share buybacks. Hence the

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<v Speaker 8>one billion.

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<v Speaker 6>Your head of Corporate Investment Bank said you could actually

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<v Speaker 6>become a three hundred billion capitalation bank shortly. I mean

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<v Speaker 6>your I think by twenty thirty is what he said.

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<v Speaker 6>You're thirty billion away from that. Do you think you

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<v Speaker 6>can become three hundred billion in terms of size and

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<v Speaker 6>like six to twelve months?

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<v Speaker 8>Well, look, I mean we're certainly very pleased with the

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<v Speaker 8>share price reaction to the delivery of our strategy, where

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<v Speaker 8>this will go as a metaph our shareholders to judge.

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<v Speaker 8>What I'm really focused on is delivering for the business,

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<v Speaker 8>focused on all the growth opportunities that we're driving for

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<v Speaker 8>the business, delivering the strategy and the simplification at pace.

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<v Speaker 8>And you know, the upgrades we have shown in our

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<v Speaker 8>capability to do so and the speed at which we

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<v Speaker 8>are able to do it safely are our good testament

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<v Speaker 8>of the capacity we're creating to invest even further in

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<v Speaker 8>the business.

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<v Speaker 6>Sure, you've also said that Hong Kong would overtake Switzerland

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<v Speaker 6>as the world's largest cross border well center by the

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<v Speaker 6>end of the decade. Actually it's done so already. What

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<v Speaker 6>does that mean for wealth creation in Asia and your

0:11:53.480 --> 0:11:54.199
<v Speaker 6>story in it?

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<v Speaker 8>Well, yeah, I'm very pleased to see you know, Hong

0:11:57.559 --> 0:12:02.240
<v Speaker 8>Kong again becoming this wordly there for cross border web management.

0:12:02.559 --> 0:12:04.240
<v Speaker 8>I mean, Hong Kong is a home market for us.

0:12:04.400 --> 0:12:08.319
<v Speaker 8>We are the leader in web management across Asia. We've

0:12:08.360 --> 0:12:10.840
<v Speaker 8>grown our web parents is in Hong Kong by ten percent.

0:12:10.960 --> 0:12:14.240
<v Speaker 8>We're at half a trillion dollars wethan. We continue adding

0:12:14.280 --> 0:12:16.600
<v Speaker 8>clients in Hong Kong, six hundred and forty thousand new

0:12:16.640 --> 0:12:19.280
<v Speaker 8>clients across our two brands, the two iconic brands we

0:12:19.360 --> 0:12:23.000
<v Speaker 8>hold in Hong Kong, HSBC and Angsng Bank. So we're

0:12:23.120 --> 0:12:25.959
<v Speaker 8>very pleased with the momentum that Hong Kong and the

0:12:26.400 --> 0:12:30.120
<v Speaker 8>sophistication that the Hong Kong as a platform is creating

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<v Speaker 8>to be the you know, the cross boarder leader in

0:12:33.080 --> 0:12:35.600
<v Speaker 8>the world. Remember also Hong Kong is a technology hup.

0:12:35.640 --> 0:12:38.760
<v Speaker 8>We're seeing a lot of investment in Hong Kong in Ai.

0:12:39.040 --> 0:12:41.319
<v Speaker 8>We will be launching very soon the next couple of

0:12:41.440 --> 0:12:45.439
<v Speaker 8>months stable coin in Hong Kong, you know, as you know,

0:12:45.520 --> 0:12:49.240
<v Speaker 8>as the you know, they're leading center for bank issued

0:12:49.280 --> 0:12:54.079
<v Speaker 8>stable coins within a very good regulatory framework. So it's

0:12:54.400 --> 0:12:57.280
<v Speaker 8>all good developments given our presence in Hong Kong.

0:12:57.640 --> 0:12:59.920
<v Speaker 7>For Hanksang, how many more synergies are you expecting to

0:13:00.000 --> 0:13:00.400
<v Speaker 7>come from that?

0:13:01.000 --> 0:13:04.240
<v Speaker 8>Yeah, I mean, Hank sanng synergies. You know, we were

0:13:04.280 --> 0:13:07.120
<v Speaker 8>executing in more than eighty percent of all the synergy workstream.

0:13:07.200 --> 0:13:10.320
<v Speaker 8>So this is going on as per plan. We've already

0:13:10.360 --> 0:13:14.680
<v Speaker 8>announced leadership across most of the infrastructure areas, the back

0:13:14.720 --> 0:13:19.640
<v Speaker 8>office areas, the technology areas, the manufacturing areas. This will

0:13:19.679 --> 0:13:22.959
<v Speaker 8>allow us to create the alignment and the synergies that

0:13:23.040 --> 0:13:25.120
<v Speaker 8>you want to achieve. I'll give you one example, very

0:13:25.200 --> 0:13:28.199
<v Speaker 8>telling example in Q two Hank saying, as of May

0:13:29.200 --> 0:13:33.080
<v Speaker 8>started to use some of the digital onboarding capabilities customer

0:13:33.080 --> 0:13:37.240
<v Speaker 8>acquisition capabilities that HSBC built. They were able in Q

0:13:37.400 --> 0:13:40.240
<v Speaker 8>two to double the number of clients they onboarded, sixty

0:13:40.320 --> 0:13:42.360
<v Speaker 8>thousand clients on board in Q two compared to thirty

0:13:42.440 --> 0:13:46.360
<v Speaker 8>thousand Q one. Immediate visible benefit of those synergies.

0:13:46.720 --> 0:13:48.240
<v Speaker 7>Sure, as we have a new prime minister here in

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<v Speaker 7>the UK. If you think a possible UK tax on

0:13:51.320 --> 0:13:53.600
<v Speaker 7>banks is a possibility.

0:13:53.920 --> 0:13:56.360
<v Speaker 8>Look, that's a matter for the government. What we're really

0:13:56.440 --> 0:13:59.600
<v Speaker 8>focused on is supporting the government and the government's intention

0:14:00.200 --> 0:14:03.120
<v Speaker 8>to support growth in the UK. Now, if you only

0:14:03.160 --> 0:14:06.880
<v Speaker 8>achieved growth in the UK, you need businesses that are investing.

0:14:07.120 --> 0:14:10.719
<v Speaker 8>You need confidence. For businesses to invest, they need to

0:14:10.760 --> 0:14:13.840
<v Speaker 8>be able to access financing. For them to be able

0:14:13.840 --> 0:14:18.520
<v Speaker 8>to access financing, they need a strong, well capitalized banking

0:14:18.640 --> 0:14:23.040
<v Speaker 8>sector to support them. So our role UK is extremely

0:14:23.040 --> 0:14:26.680
<v Speaker 8>important for hspecies or home market. Our role is to

0:14:26.800 --> 0:14:30.800
<v Speaker 8>support all businesses across the UK. We support more than

0:14:31.480 --> 0:14:34.960
<v Speaker 8>We support around seven hundred thousand SMEs in the UK

0:14:35.120 --> 0:14:38.640
<v Speaker 8>across the UK, and we've grown our lending to them

0:14:39.160 --> 0:14:42.160
<v Speaker 8>twelve percent. We've grown our lending to all businesses in

0:14:42.240 --> 0:14:45.400
<v Speaker 8>the UK about ten percent, or ten billion US dollars.

0:14:45.760 --> 0:14:49.440
<v Speaker 8>We already pledged another five billion pounds of investments to

0:14:49.600 --> 0:14:52.760
<v Speaker 8>support SMEs in the UK. All of that is what

0:14:53.000 --> 0:14:57.520
<v Speaker 8>is supporting or hopefully supporting that growth that we wish

0:14:57.600 --> 0:14:58.040
<v Speaker 8>for the UK.

0:14:58.640 --> 0:15:00.320
<v Speaker 7>Can you tell me a little bit about so.

0:15:00.360 --> 0:15:02.640
<v Speaker 6>Bill Winters of Standard Charger last week said that they

0:15:02.680 --> 0:15:06.120
<v Speaker 6>were using a combination of Chinese and US AI models.

0:15:06.160 --> 0:15:06.920
<v Speaker 7>What are you using.

0:15:07.320 --> 0:15:09.640
<v Speaker 4>We're using a broad range of AI models.

0:15:09.760 --> 0:15:12.440
<v Speaker 8>We're investing in a broad range, We're partnering with a

0:15:12.480 --> 0:15:15.480
<v Speaker 8>broad range of AI partners, investing in the broad range

0:15:15.480 --> 0:15:18.760
<v Speaker 8>of A models. But we're doing so thoughtfully and strategically.

0:15:19.080 --> 0:15:23.920
<v Speaker 8>We're deploying AI responsibly and safely, and we have now

0:15:24.120 --> 0:15:28.520
<v Speaker 8>multiple hundred use cases either in production or in pilot stage,

0:15:28.880 --> 0:15:32.400
<v Speaker 8>and we're seeing real benefits I mean encoding. We're seeing

0:15:32.520 --> 0:15:35.320
<v Speaker 8>in areas productivity up to three hundred to four hundred

0:15:35.320 --> 0:15:40.400
<v Speaker 8>percent higher in hyper personalization of service to clients, we're

0:15:40.440 --> 0:15:45.160
<v Speaker 8>achieving great benefits. Now more than two thousand of our

0:15:45.480 --> 0:15:49.120
<v Speaker 8>wealth relationship managers have access to AI tools that help

0:15:49.160 --> 0:15:52.760
<v Speaker 8>them high per personalized advice to clients. And we've rolled

0:15:52.800 --> 0:15:56.600
<v Speaker 8>out productivity tools and productivity capabilities to more than two

0:15:56.680 --> 0:15:59.280
<v Speaker 8>hundred thousand of our colleagues, helping them in their day

0:15:59.320 --> 0:15:59.880
<v Speaker 8>to day need.

0:16:00.640 --> 0:16:04.680
<v Speaker 6>Our staff worried actually about you know, redundancies, about being

0:16:04.720 --> 0:16:06.760
<v Speaker 6>able to apply these models and how do you handle that?

0:16:07.400 --> 0:16:10.880
<v Speaker 8>And the important thing for us is make available to

0:16:11.080 --> 0:16:15.760
<v Speaker 8>all our colleagues both productivity tools but also training materials

0:16:15.880 --> 0:16:20.280
<v Speaker 8>and knowledge management materials so they all individually can become

0:16:20.840 --> 0:16:23.560
<v Speaker 8>more productive and more impactful in the way they do

0:16:23.800 --> 0:16:28.640
<v Speaker 8>business for our clients. Everybody wants productive stuff, so I'll

0:16:28.720 --> 0:16:31.640
<v Speaker 8>be extremely happy if all our colleagues can become those

0:16:31.720 --> 0:16:35.880
<v Speaker 8>productive versions of those more performing versions, you know, future

0:16:35.920 --> 0:16:38.480
<v Speaker 8>ready versions, of themselves because of all the tools and

0:16:38.520 --> 0:16:41.520
<v Speaker 8>the capabilities we're putting in front of them. And frankly,

0:16:42.000 --> 0:16:44.800
<v Speaker 8>if we generate this productivity as a bank, I would

0:16:44.800 --> 0:16:48.240
<v Speaker 8>reinvest it in those colleagues who help us accelerate our strategy.

0:16:48.880 --> 0:16:51.440
<v Speaker 6>Talk to me a little bit about digital tokens. Do

0:16:51.520 --> 0:16:54.880
<v Speaker 6>you have to cap because there's still AI implementation is expensive?

0:16:55.080 --> 0:16:57.840
<v Speaker 6>So are you letting people experiment at the moment and

0:16:57.920 --> 0:16:58.440
<v Speaker 6>then cap.

0:16:58.320 --> 0:17:01.080
<v Speaker 7>It at some point or do you cap from the Yeah.

0:17:01.160 --> 0:17:04.560
<v Speaker 8>So, as I said, we're investing in AI very actively,

0:17:04.680 --> 0:17:08.119
<v Speaker 8>but we're doing so thoughtfully and strategically. I am tracking

0:17:08.240 --> 0:17:13.120
<v Speaker 8>license fees and toalken costs. It is important for many

0:17:13.200 --> 0:17:16.399
<v Speaker 8>of the flagship initiatives that we see the benefits and

0:17:16.600 --> 0:17:20.040
<v Speaker 8>understand what the benefits are. Give you an example onboarding

0:17:20.680 --> 0:17:25.080
<v Speaker 8>for clients. For wholesale clients, we've already rolled AI capabilities

0:17:25.119 --> 0:17:28.560
<v Speaker 8>in the space and achieved fifty percent productivity gains and

0:17:28.600 --> 0:17:33.440
<v Speaker 8>actually fifty percent speed in delivering the service. So a

0:17:33.600 --> 0:17:37.959
<v Speaker 8>clear example of benefits realized. For many of the other initiatives,

0:17:38.040 --> 0:17:40.639
<v Speaker 8>we track benefits. For some of them, the benefits may

0:17:40.680 --> 0:17:45.560
<v Speaker 8>bee non financial benefits could be improved, productivity improved, quality

0:17:45.600 --> 0:17:49.400
<v Speaker 8>of service or the benefits could be, you know, being

0:17:49.440 --> 0:17:52.800
<v Speaker 8>able to access a wider range of clients for wider

0:17:52.920 --> 0:17:54.040
<v Speaker 8>range of services.

0:17:54.200 --> 0:17:57.440
<v Speaker 2>That was HSBC Group CEO Georgies l Henry speaking of

0:17:57.480 --> 0:18:00.639
<v Speaker 2>Bloomberg's Francine Lacroix, and we're bringing their conversation to you

0:18:00.760 --> 0:18:02.440
<v Speaker 2>here on the Daybreak Asia Podcast.

0:18:05.040 --> 0:18:08.360
<v Speaker 1>Thanks for listening to today's episode of the Bloomberg Daybreak

0:18:08.560 --> 0:18:11.879
<v Speaker 1>Asia Edition podcast. Each weekday, we look at the story

0:18:12.000 --> 0:18:16.000
<v Speaker 1>shaping markets, finance, and geopolitics in the Asia Pacific.

0:18:16.240 --> 0:18:19.480
<v Speaker 2>You can find us on Apple, Spotify, the Bloomberg Podcast

0:18:19.600 --> 0:18:21.880
<v Speaker 2>YouTube channel, or anywhere else you listen.

0:18:22.359 --> 0:18:25.200
<v Speaker 1>Join us again tomorrow for insight on the market moves

0:18:25.320 --> 0:18:28.480
<v Speaker 1>from Hong Kong to Singapore and Australia.

0:18:28.920 --> 0:18:31.360
<v Speaker 7>I'm Doug Prisner, and this is Bloomberg