WEBVTT - Musk Turns On Farage, Sam Altman Talks OpenAI & War Risk Insurance  

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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<v Speaker 1>day Break, your podcast, available every morning on Apple, Spotify

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<v Speaker 1>or wherever you listen. It's Monday, the sixth of January

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<v Speaker 1>here in London. I'm Caroline Hepki and.

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<v Speaker 2>I'm Stephen Carroll. Coming up today, the world's richest man,

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<v Speaker 2>Elon Musk takes aim as Reform UK leader Nigel Farage

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<v Speaker 2>in an abrupt u turn.

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<v Speaker 1>Sam Altman in the Spotlight, the Open AI founder, talks

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<v Speaker 1>to Bloomberg about chat GPT's first two years and AI

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<v Speaker 1>under Trump.

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<v Speaker 2>Plus, in a world that's rife with conflict, the market

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<v Speaker 2>for insuring ships against acts of war is thriving.

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<v Speaker 1>Let's start with a roundup of our top stories.

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<v Speaker 2>After months of attacks on the British government, Elon Musk

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<v Speaker 2>now says Reform UK's Nigel Farage doesn't have what it

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<v Speaker 2>takes and should be replaced. It's a sudden new turn

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<v Speaker 2>for the world's richest man, who previously heaped praise on Farage,

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<v Speaker 2>saying only his populist party can save Britain. In an

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<v Speaker 2>interview before Musk's change of heart, Nigel Farrag was asked

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<v Speaker 2>about the recent explosive comments from the Tesla CEO in

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<v Speaker 2>which he said the Prime Minister Kerstarmer was quote complicit

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<v Speaker 2>in the rape of Britain over his handling of child

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<v Speaker 2>sex abuse scandal while he was Director of Public Prosecutions.

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<v Speaker 2>Here is Farag speaking to the BBC.

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<v Speaker 3>I think I made it perfectly clear, but I don't

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<v Speaker 3>agree with everything he stands for, but I do believe

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<v Speaker 3>in free speech.

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<v Speaker 2>I think he's a hero and I said that well

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<v Speaker 2>before any potential money was offered. Faraj has talked up

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<v Speaker 2>the possibility of a multi million pound donation from Elon

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<v Speaker 2>Musk in response to Musk's social media post criticizing him.

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<v Speaker 2>The Reform UK leader described Musk as a remarkable individual,

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<v Speaker 2>but repeated his position that far right activist Tommy Robinson

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<v Speaker 2>should not join Reform UK.

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<v Speaker 4>Now.

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<v Speaker 1>UK business confidence has dropped to its lowest level since

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<v Speaker 1>Liz Trust is disastrous many budget Just under half of

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<v Speaker 1>companies surveyed by the British Chambers of Commerce expect revenues

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<v Speaker 1>to increase in the coming year. The BCC also says

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<v Speaker 1>that a majority of firms expect to increase prices over

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<v Speaker 1>the next three months as companies pass on higher taxes

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<v Speaker 1>and the minimum wage increase. The findings will make uncomfortable

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<v Speaker 1>reading for Charles of Rachel Reeves, who has said that

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<v Speaker 1>businesses stepping up investment is key to UK economic growth.

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<v Speaker 2>Open AI's co founder Sam Altman has told Bloomberg he

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<v Speaker 2>doesn't believe Elon Musk will use his political influence and

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<v Speaker 2>the Trump administration to damage his business competitors. He was

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<v Speaker 2>speaking as part of a wide ranging interview in the

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<v Speaker 2>latest edition of BusinessWeek. Bloomberg's team out of Bio has

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<v Speaker 2>more real deception.

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<v Speaker 5>That's how the man at the helm of one of

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<v Speaker 5>the fastest growing companies in history described the circumstances surrounding

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<v Speaker 5>his firing in twenty twenty three. Since then, Sam Altman

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<v Speaker 5>has led open AI's chat GPT to more than three

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<v Speaker 5>hundred million users. Speaking to bloom the tech ceo says

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<v Speaker 5>safety is a priority at the firm, which he believes

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<v Speaker 5>is continuing to make technical progress. Asked about the prospect

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<v Speaker 5>of working with Donald Trump, Oltman made clear he'd work

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<v Speaker 5>with any president for the good of the country. He

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<v Speaker 5>expects artificial general intelligence AI, which matches or surpasses human capabilities,

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<v Speaker 5>to be developed under the President elect underscoring the importance

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<v Speaker 5>of the relationship in London, Tewa, added Bayo Bloomberg Radio.

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<v Speaker 1>Austria's far right leader, Herbert Kickel is set to become

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<v Speaker 1>the country's first Freedom Party chancellor. The Conservative People's Party

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<v Speaker 1>is now willing to form a coalition with the pro Russian,

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<v Speaker 1>anti immigrant and climate skeptic group after reversing its previous stance.

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<v Speaker 1>Kikel is due to meet with Austria's president this morning

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<v Speaker 1>in Vienna to discuss forming a government. It would be

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<v Speaker 1>the first far right led Austrian government since World War II.

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<v Speaker 2>Canada's Prime Minister Justin Trudeau is reportedly expected to announce

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<v Speaker 2>his resignation. That's according to The Globe and Mail newspaper.

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<v Speaker 2>The Canadian publication says the announcement could possibly come as

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<v Speaker 2>early as today. This would trigger a race for the

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<v Speaker 2>party leadership, with the leader becoming Prime Minister. Trude has

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<v Speaker 2>been under pressure from lawmakers in his party to quit

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<v Speaker 2>for months. Scrutiny grew last month aster his Finance minister,

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<v Speaker 2>Christia Freeland quis.

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<v Speaker 1>Today marks four years since the assault on the US capital,

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<v Speaker 1>with Donald Trump downplaying its severity and denouncing prosecutions more

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<v Speaker 1>on that story now from Bloomberg's Doug Chrisner.

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<v Speaker 3>The president elect has downplayed the severity of the attack

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<v Speaker 3>and denounced its prosecutions, and he's expected to fulfill his

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<v Speaker 3>promises of swift clemency for the one thousand plus people

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<v Speaker 3>convicted and the hundreds more with pending cases. The question

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<v Speaker 3>is how such a move would impact democracy and the

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<v Speaker 3>rule of law. Mass pardons would also set the tone

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<v Speaker 3>for how Trump might wield the presidency to reward loyalist

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<v Speaker 3>and ridick sphere punished opponents. This year's January sixth election

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<v Speaker 3>certification has for the first time been designated a National

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<v Speaker 3>Special Security Event in New York. I'm Doug Prisner, Bloomberg Radio.

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<v Speaker 2>Those are your top stories on the markets. On Friday,

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<v Speaker 2>we saw Wall Street climbing to finish higher. Late in

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<v Speaker 2>the session. We had the Nasdaq closing up one point

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<v Speaker 2>seven percent. Treasuries climbed three basis points as well after

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<v Speaker 2>stronger than expected ism manufacturing data. In Asian trading today

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<v Speaker 2>at Japanese shares are in the red, the Nikes down

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<v Speaker 2>by one point four percent. The en is three times

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<v Speaker 2>weaker against the dollar this morning at one hundred and

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<v Speaker 2>fifty seven seventy four PBOC maintaining support for the yuan

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<v Speaker 2>with a stronger fix than seven point two against the dollar.

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<v Speaker 2>That comes after the sudden move weaker in the one

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<v Speaker 2>on Friday. Eurostock fifty features half a percent higher this morning.

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<v Speaker 1>Well, in a moment, we're going to bring you more

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<v Speaker 1>on Elon Musk's latest comments on UK politics, plus why

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<v Speaker 1>the niche market for ensuring ships against acts of war

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<v Speaker 1>is thriving. It's something that London specializes in. But first,

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<v Speaker 1>markets are buckling up for a month that has in

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<v Speaker 1>the past traditionally been positive for US stocks.

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<v Speaker 2>Try to positive to say about January. Basically, we're all

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<v Speaker 2>back at work. Good morning everyone.

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<v Speaker 1>This is the January effect. I mean, there've been quite

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<v Speaker 1>a lot of bits of research into this, but the

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<v Speaker 1>January effect has actually faded over time. It's sort of

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<v Speaker 1>less dominant now. But there's a great quick take explainer

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<v Speaker 1>on the origins and history of the trend, why it matters,

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<v Speaker 1>and why it might affect things this January.

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<v Speaker 6>Yeah.

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<v Speaker 2>Indeed, the latest Hamlife Pull survey, though, stead of finding

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<v Speaker 2>plenty of bulls out there in the stock market, sixty

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<v Speaker 2>one percent of the investors taking part in the survey,

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<v Speaker 2>saying they expect the S and P five hundred to

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<v Speaker 2>rise this year, boosted by Donald Trump's policies, but also

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<v Speaker 2>the FED continuing to cut interest rates, but a warning

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<v Speaker 2>from the Oxford based investor Steve Jegler says we should

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<v Speaker 2>be bracing for flatility as well now. He became famous

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<v Speaker 2>for making billions during the global financial crisis, and he

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<v Speaker 2>says threats to market stability are at a level not

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<v Speaker 2>seen since two thousand and eight. He's setting up a

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<v Speaker 2>hedge fund to bet on this as well. He's saying

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<v Speaker 2>there are a number of fault lines out there today

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<v Speaker 2>are even greater than during the financial crisis, and the

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<v Speaker 2>chances of going wrong. Talking about this being a sort

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<v Speaker 2>of analogous situation to where we were in two thousand

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<v Speaker 2>and five to two thousand and seven.

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<v Speaker 1>I'm not sure I can remember that far back. Is

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<v Speaker 1>only the first day back in It's a good period,

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<v Speaker 1>absolutely right. Let's send our attention then to our top

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<v Speaker 1>story this morning. Elon Musk has been a fierce critic

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<v Speaker 1>of Kirs Starmer and the Labor Party since it came

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<v Speaker 1>to power in July, but on Sunday he turned on

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<v Speaker 1>a supposed ally Nigel Farage, the leader of Reform UK,

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<v Speaker 1>and yet another barrage of social media commentary on British

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<v Speaker 1>political affairs joining us now is Blomberg's UK correspondent Lizzie Burden.

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<v Speaker 1>Good morning, Lizzie and happy new year to you.

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<v Speaker 4>Thank you.

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<v Speaker 1>Why the pivot or Nigel Pharage saying that he doesn't

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<v Speaker 1>have what it takes, But.

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<v Speaker 6>Indeed it does seem that Musk's becoming a headache not

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<v Speaker 6>just to keirse Armer, but to the right wing in

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<v Speaker 6>British politics as well. Just a few days ago he

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<v Speaker 6>said that only Farage's reform in UK could save Britain.

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<v Speaker 6>This is when he was calling for fresh elections in

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<v Speaker 6>the UK, and he had Musk and Farage recently going

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<v Speaker 6>to Mary Lago and Farage touting this big fat check

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<v Speaker 6>that Musk was going to write to Reform. So, as

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<v Speaker 6>you say, it is a big u turn. But look,

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<v Speaker 6>far be it from me to attempt to read the

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<v Speaker 6>mind of Elon Musk. This is the topsy turvy world

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<v Speaker 6>of Trump politics and he hasn't given an explanation so far.

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<v Speaker 6>Farage has only said that Musk's entitled to his own opinion.

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<v Speaker 6>So I think the big question is whether the Musk's

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<v Speaker 6>going to back far right activist Tommy Robinson to become

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<v Speaker 6>the reform leader. He's already called for Robinson to be

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<v Speaker 6>released from prison. Musk seems to be kind of toying

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<v Speaker 6>with Farage here. Faraj has distant from Robinson repeatedly, and

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<v Speaker 6>we've been reporting that several senior politicians on the right

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<v Speaker 6>wing in UK politics with links to Donald Trump have

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<v Speaker 6>been warning their Republican counterparts against endorsing Robinson. But it's

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<v Speaker 6>still a big question because at the moment Musk has

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<v Speaker 6>only suggested that Rupert Low, the reform MP, should succeed Fararar.

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<v Speaker 6>So definitely one we're going to watch this.

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<v Speaker 2>Week of Corzeland. Musk not limiting his commentary to reform UK.

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<v Speaker 2>He the government has spent the weekend trying to respond

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<v Speaker 2>to other comments made by the world's righteous man about

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<v Speaker 2>prosecutions in child sex abuse cases.

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<v Speaker 6>Here, yeah, Musk accusing Starmer of being complicit in the

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<v Speaker 6>rape of Britain because Labour's rejected calls for a public

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<v Speaker 6>inquiry into the child's sex abuse scandal, even though Starmer

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<v Speaker 6>was as head of the Crown Prosecution Service part of

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<v Speaker 6>the team that began the prosecution into grooming gangs in

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<v Speaker 6>British towns, so this is hugely controversial. Doesn't want to

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<v Speaker 6>get dragged into a soap opera with Elon Musk, though,

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<v Speaker 6>so he's brushed off Musk's attacks, like when Musk said

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<v Speaker 6>that civil war is inevitable during the Summer Riots.

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<v Speaker 4>But this raises another question.

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<v Speaker 6>How does the so called special relationship between the US

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<v Speaker 6>and the UK play out under Trump and Starmer? And

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<v Speaker 6>it's an interesting question for the newly appointed UK ambassador

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<v Speaker 6>to Washington, Lord Mandelson.

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<v Speaker 4>Peter Mandelson, of course a key blair Wite.

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<v Speaker 6>He'd suggested previously that Farah should be used as a

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<v Speaker 6>bridgehead between Labor and Trump. The kind of bottom line

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<v Speaker 6>I think is Musk is one of the most powerful

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<v Speaker 6>people in the world right now. And you could ask,

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<v Speaker 6>is it any surprise that Musk's attacking Starmer when you know,

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<v Speaker 6>somehow the Trump Starmer call gets leaked and Trump's apparently

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<v Speaker 6>deranged and going off peace talking about windmills, and Sekire

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<v Speaker 6>is trying to keep him on track. Think about all

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<v Speaker 6>the Foreign Secretary David Lammy and the Deputy Prime Minister

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<v Speaker 6>and Angela Rayner have had to say about Trump recently,

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<v Speaker 6>and then you've got the Chancellor Rachel Reeves and the

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<v Speaker 6>Governor of the Bank of England Andrew Bailey, off to

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<v Speaker 6>Beijing this week to court Trump's nemesis. So is this

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<v Speaker 6>just Musk being Trump's attack dog?

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<v Speaker 1>Yeah, and certainly with inflammatory language. I mean, what hope then?

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<v Speaker 1>Does the government have to try to focus on its priorities?

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<v Speaker 1>Was meant to be talking about NHS policy today for

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<v Speaker 1>the National Health Service?

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<v Speaker 6>Yeah, He's set to give a speech chet on the

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<v Speaker 6>NHS today.

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<v Speaker 4>Whatever that means, I think it's.

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<v Speaker 6>Trying to avoid the confusion that surrounded all the missions

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<v Speaker 6>and priorities and foundations and first steps and milestones that

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<v Speaker 6>we've had in twenty twenty four. There definitely seems to

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<v Speaker 6>be a deliberate focus in twenty twenty five on the

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<v Speaker 6>domestic agenda because, as we have reported, Starmer traveled a

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<v Speaker 6>lot last year. We've crunched the numbers and he was

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<v Speaker 6>abroad more than any of his immediate predecessors in their

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<v Speaker 6>first six months in office.

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<v Speaker 4>So you kind of had to.

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<v Speaker 6>Wonder at times why he was bothering going to some

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<v Speaker 6>of these events when there are hardly any other high

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<v Speaker 6>profile leaders like at koppin Azerbaijan, and many of the

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<v Speaker 6>leaders that he's met on the international circuit have waning

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<v Speaker 6>influenced Joe Biden, just In Trudeau in the news this morning,

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<v Speaker 6>and being absent when the economy is in the doldrooms

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<v Speaker 6>is hardly a look that you want to bed in.

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<v Speaker 6>So instead, as I say, it's Rachel Reeves going to

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<v Speaker 6>China this week, and it hasn't been interestingly decided who's

0:12:34.559 --> 0:12:36.520
<v Speaker 6>going to represent the UK at Trump's inauguration.

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<v Speaker 2>Okay, busy burden are UK correspondent, Thank you very much.

0:12:40.840 --> 0:12:43.520
<v Speaker 1>Now, in a world that is rife with conflict in

0:12:43.679 --> 0:12:46.640
<v Speaker 1>Ukraine and the Middle East, the market for ensuring ships

0:12:47.000 --> 0:12:51.160
<v Speaker 1>against acts of war is thriving, with London specializing in

0:12:51.240 --> 0:12:54.520
<v Speaker 1>maritime insurance. Joining us now is Bloomberg's oil and derivative

0:12:54.520 --> 0:12:57.280
<v Speaker 1>supporter Alex Longley, who has a long piece on this

0:12:57.400 --> 0:13:00.600
<v Speaker 1>out this morning. Alex, thanks for your time. How important

0:13:00.720 --> 0:13:04.400
<v Speaker 1>is this war insurance market for global trade?

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<v Speaker 7>Well, in the world we're in at the moment, it's

0:13:07.480 --> 0:13:10.960
<v Speaker 7>become ever more important. I think perhaps the most recent

0:13:11.080 --> 0:13:13.439
<v Speaker 7>although its a little while ago now, but the diversions

0:13:13.440 --> 0:13:15.400
<v Speaker 7>that we've seen in the Red Sea that have continued

0:13:15.440 --> 0:13:19.480
<v Speaker 7>even in their kind of twelve month anniversary, to hugely

0:13:19.520 --> 0:13:22.440
<v Speaker 7>disrupt world trade. You need this backstop of insurance to

0:13:22.559 --> 0:13:25.040
<v Speaker 7>ensure that goods are getting from A to B. Now,

0:13:25.559 --> 0:13:28.360
<v Speaker 7>insurance in London has existed for hundreds and hundreds of years.

0:13:28.400 --> 0:13:31.440
<v Speaker 7>War risk insurance is nothing new, but the scale of

0:13:31.440 --> 0:13:34.360
<v Speaker 7>some of the conflicts we're seeing and the risk of

0:13:34.440 --> 0:13:36.760
<v Speaker 7>products getting trapped in different ports across the world or

0:13:36.760 --> 0:13:39.840
<v Speaker 7>different regions has meant that this market has sort begun

0:13:39.920 --> 0:13:41.920
<v Speaker 7>to thrive and entered a kind of new level over

0:13:41.960 --> 0:13:44.719
<v Speaker 7>the last couple of years, particularly following the invasion of

0:13:44.840 --> 0:13:47.199
<v Speaker 7>Ukraine in twenty twenty two and then, as I said before,

0:13:47.200 --> 0:13:49.240
<v Speaker 7>the disruption in the Red Sea last year.

0:13:49.760 --> 0:13:51.720
<v Speaker 2>So what sort of growth are we talking about? How

0:13:51.720 --> 0:13:52.959
<v Speaker 2>big is the market now?

0:13:54.440 --> 0:13:58.000
<v Speaker 7>Well, it's one of those markets where, much like much

0:13:58.040 --> 0:14:00.000
<v Speaker 7>like many things with Lloyds of London and the insurance

0:14:00.640 --> 0:14:03.280
<v Speaker 7>insurance industry, it's hard to pin an exact number that

0:14:03.360 --> 0:14:05.199
<v Speaker 7>some of the people we spoke to say that the

0:14:05.559 --> 0:14:08.839
<v Speaker 7>global market for marine hull war is insurance. So that's

0:14:08.880 --> 0:14:12.120
<v Speaker 7>that the risk of your ship being hit in an

0:14:12.160 --> 0:14:14.720
<v Speaker 7>act of war is reaching up to a billion dollars

0:14:14.720 --> 0:14:16.679
<v Speaker 7>at the moment, and that'll be up from just a

0:14:16.679 --> 0:14:18.560
<v Speaker 7>few hundred million dollars a couple of years ago, the

0:14:18.600 --> 0:14:21.800
<v Speaker 7>low sort of hundreds. So we're seeing a significant number,

0:14:21.880 --> 0:14:24.520
<v Speaker 7>significant volume of growth there, and that's just in the

0:14:24.520 --> 0:14:26.560
<v Speaker 7>premiums that are earned. Now, the risk that comes with

0:14:26.640 --> 0:14:30.520
<v Speaker 7>that is exactly how many ships don't get hit, right,

0:14:30.560 --> 0:14:32.880
<v Speaker 7>because the risk of conflict is that you're in an

0:14:32.880 --> 0:14:37.680
<v Speaker 7>extremely dangerous global maritime environment. So although the total premium

0:14:37.680 --> 0:14:40.600
<v Speaker 7>written has been very, very large, and certainly in the

0:14:40.680 --> 0:14:42.760
<v Speaker 7>last couple of years we've seen some good returns, I

0:14:42.760 --> 0:14:45.880
<v Speaker 7>think you're seeing insurance starting to worry given that kind

0:14:45.920 --> 0:14:48.560
<v Speaker 7>of exponential level of growth that we've seen over the

0:14:48.640 --> 0:14:49.560
<v Speaker 7>last couple of years.

0:14:50.560 --> 0:14:52.800
<v Speaker 1>And surely insurance is a long game. I mean, what

0:14:52.880 --> 0:14:56.320
<v Speaker 1>are the risks? Presumably there must be some dangers in

0:14:56.440 --> 0:15:00.240
<v Speaker 1>offering cover against acts of war and we started talking about,

0:15:00.240 --> 0:15:01.920
<v Speaker 1>you know how life conflict.

0:15:01.600 --> 0:15:05.360
<v Speaker 7>Is, Yeah, exactly. I mean there's a couple of dangers here.

0:15:05.400 --> 0:15:07.760
<v Speaker 7>I think the first one is, as we've already seen.

0:15:07.840 --> 0:15:09.960
<v Speaker 7>Last year, we've had some of those incidents in the

0:15:09.960 --> 0:15:13.120
<v Speaker 7>Red Sea that have led to not only vessels sinking,

0:15:13.160 --> 0:15:17.280
<v Speaker 7>but also crew deaths and also pollution events around them.

0:15:17.480 --> 0:15:19.880
<v Speaker 7>That's obviously the biggest risk for the insurers, and we've

0:15:19.880 --> 0:15:22.200
<v Speaker 7>seen a few of them, and I think some of

0:15:22.240 --> 0:15:25.320
<v Speaker 7>those companies that are expecting to see sort of the effects

0:15:25.360 --> 0:15:27.640
<v Speaker 7>of those ripple through to their results coming into twenty

0:15:27.720 --> 0:15:31.720
<v Speaker 7>twenty five. The other effect is that, frankly, this market

0:15:31.720 --> 0:15:33.600
<v Speaker 7>has been doing so well, it's attracted a whole host

0:15:33.640 --> 0:15:36.600
<v Speaker 7>of new entrants, different types of players that weren't previously

0:15:36.640 --> 0:15:39.920
<v Speaker 7>there but that can now provide cover. And many insurance

0:15:39.960 --> 0:15:42.200
<v Speaker 7>officials say that the big risk there is that they

0:15:42.240 --> 0:15:45.720
<v Speaker 7>take on more sort of cover than they perhaps should be,

0:15:45.840 --> 0:15:48.600
<v Speaker 7>or slightly less worried about the cover that they're taking

0:15:48.640 --> 0:15:50.800
<v Speaker 7>on because of the money they're making, and that that

0:15:50.840 --> 0:15:53.160
<v Speaker 7>has a ripple through effect as well and leads to

0:15:53.240 --> 0:15:55.920
<v Speaker 7>some more losses within the market. Insurance is a very

0:15:55.920 --> 0:15:58.160
<v Speaker 7>cyclical business. When times are good, lots of people tend

0:15:58.160 --> 0:15:59.960
<v Speaker 7>to flood into the market and provide a new cover,

0:16:00.280 --> 0:16:02.560
<v Speaker 7>and then that kind of tends to naturally dampen it

0:16:02.600 --> 0:16:05.240
<v Speaker 7>back down again, and some worry that we're kind of

0:16:05.280 --> 0:16:07.400
<v Speaker 7>at the start of were reaching the peak, and are

0:16:07.400 --> 0:16:09.680
<v Speaker 7>at the start of a possible downturn in the next

0:16:09.960 --> 0:16:12.040
<v Speaker 7>eight twelve to eighteen months, but that will all depend

0:16:12.360 --> 0:16:14.680
<v Speaker 7>on how risky the world remains and whether we remain

0:16:14.760 --> 0:16:16.360
<v Speaker 7>kind of ripe with conflict.

0:16:17.400 --> 0:16:20.120
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:16:20.160 --> 0:16:23.240
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0:16:23.520 --> 0:16:27.480
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0:16:29.560 --> 0:16:32.600
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0:16:32.640 --> 0:16:35.359
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0:16:35.360 --> 0:16:38.160
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0:16:43.120 --> 0:16:44.440
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0:16:44.360 --> 0:16:47.040
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0:16:47.040 --> 0:16:49.480
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0:16:49.520 --> 0:16:55.080
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