Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2: Steve Patiuca sat down with US and Lisa Lane's in
Speaker 2: and guys apart from sports.
Speaker 3: Okay, hold on a second, but you've been talking about
Speaker 3: Atalanta for like about three years now, and you're so excited,
Speaker 3: and I know that the whole thing is going to
Speaker 3: be about Atlanta, and.
Speaker 1: I think that that's wonderful.
Speaker 3: But a lot of tules in a lot of places.
Speaker 1: Really, you're going to do.
Speaker 2: This in the capital private equity senior Advice that joins
Speaker 2: US now three wind Steve, Hello, good to see you.
Speaker 1: Great to be here.
Speaker 2: Let's start with sports.
Speaker 1: I thought it was in ESPN.
Speaker 2: We had to get on to night because that's Atlanta
Speaker 2: five NOL. What a story for that team this year.
Speaker 1: You know, I'm still pinching myself. It's just incredible and
Speaker 1: very happy for the team and the coach and the
Speaker 1: Percossi family. It's it's been great for Bergamo and Milan
Speaker 1: and it's just really exciting.
Speaker 2: I don't need to get too excited, but can you
Speaker 2: win the league this year?
Speaker 1: You know the old adage take it one game at
Speaker 1: a time, so we just we've got to do We've
Speaker 1: got to get healthy. We got a couple of guys
Speaker 1: that are hurt, but they're playing fantastic.
Speaker 2: It's amazing to see Barcelona up next and maybe straight qualification.
Speaker 2: So the not the next round, but the one after that, right.
Speaker 1: Big that would be a big big for European would
Speaker 1: go to Barcelona. That's the football.
Speaker 2: Okay, I did the basketball. You should do best.
Speaker 1: Actually, there's a lot of.
Speaker 2: So reports that you're after majority ownership of the Boston Celtics.
Speaker 2: How much can you tell us this morning?
Speaker 1: I can't comment, as you know, on any deals, including.
Speaker 2: That deal, okay that one specifically? Can we talk more
Speaker 2: broadly about the NBA franchises and what's happening there, because
Speaker 2: I have noticed that audience levels TV audience levels have
Speaker 2: fallen off in some parts. What do you think is
Speaker 2: behind that?
Speaker 1: You know, I think I think it's fragmentation of viewing,
Speaker 1: and I think the viewing leaderships are really good when
Speaker 1: they can count it correctly and really find out who's
Speaker 1: watching where. So I don't think there's a concern there
Speaker 1: in the league is really strong and has more stars
Speaker 1: than ever, and you know, it's been fantastic, so I
Speaker 1: think that's a that's kind of a bump in the room.
Speaker 3: So we've covered football, we've covered basketball, any other sports
Speaker 3: that you're going to buy a team in.
Speaker 1: No, I'm not in a cricket so I'm good.
Speaker 3: But there's actually a lot to talk about it and
Speaker 3: whether you're going to buy another team? Are you going
Speaker 3: to buy another team?
Speaker 1: Who knows?
Speaker 3: Okay, all right, well let's move on because right now
Speaker 3: we talk about Davos and Hall has been dominated by
Speaker 3: incredible optimism. America is going to boom and Donald Trump
Speaker 3: what's he going to do? Of course there's also overlay
Speaker 3: of artificial intelligence. What's been your biggest takeaway about what
Speaker 3: people are concerned about with the Trump administration?
Speaker 1: Well, I think first of all, this this Davos is
Speaker 1: all Trump, all AI. That's all people are talking about.
Speaker 1: And the Trump issue is, you know, what's going to
Speaker 1: happen with tariffs? You know, you're worried about tariffs? Is
Speaker 1: worried about tariffs, What's going to happen with the Ukraine,
Speaker 1: What's going to happen with the American economy and protectionism?
Speaker 1: That's that's their worry. And on AI, you know, AI
Speaker 1: is for real. It feels a little bit like you're
Speaker 1: in nineteen ninety nine Internet boom. So there's a lot
Speaker 1: of hype, but there's a lot of reality in AI,
Speaker 1: and AI is going to change everything. I view AI
Speaker 1: as almost building the railroads and the interstate highway system
Speaker 1: in the US. We're going to need to have that
Speaker 1: over the next twenty years or we're going to fall behind.
Speaker 1: So I think it's a legitimate discussion on AI. And
Speaker 1: they came out with the Stargate program, which I think
Speaker 1: is fantastic because other countries are getting ahead. China's investing billions,
Speaker 1: Ue is investing billions, Saudia's investing billions. I think the
Speaker 1: US has to get out ahead of that trend and
Speaker 1: it's going to affect everything over the next twenties. I'm
Speaker 1: really excited about it.
Speaker 2: As an investor. What's your approach to one of this?
Speaker 2: How do you think about the opportunities you mentioned the
Speaker 2: late nineties, it took a while to find out who
Speaker 2: the ultimate winners would be. Are you expecting something similar
Speaker 2: this time around?
Speaker 1: It's going to be a little different because I look
Speaker 1: at AID, you had winners like Google that were kind
Speaker 1: of natural monopolies. There can be many variant of large
Speaker 1: language models, so there can be a global large language model.
Speaker 1: There can be probably four or five of those. But
Speaker 1: now the real use is going to be vertical ones,
Speaker 1: so tailoring models with the data specific data for say
Speaker 1: healthcare specific models for transportation with transportation data in it.
Speaker 1: So I think vertical AI models will be the ones
Speaker 1: that start to impact the economy, and then the other
Speaker 1: ones are going to grow and we need that infrastructure,
Speaker 1: and then what's going to happen is from that you
Speaker 1: need power. Fusion is being talked about and is around
Speaker 1: the corner. All the fusion companies I look at are
Speaker 1: getting close to actually generating energy. The models are showing
Speaker 1: soon they're going to generate energy and build these large
Speaker 1: tokmacs that's going to have to power all the centers
Speaker 1: with all to get as the GPUs, because if you
Speaker 1: look at the power users of AI, it could be
Speaker 1: the entire power right now in the United States. So
Speaker 1: I think this stargate program or program like it is
Speaker 1: needed and we've got to match those other countries, and
Speaker 1: that is going to create a virtual sloop of spending
Speaker 1: building the infrastructure and be great for America and a
Speaker 1: revolutionized healthcare.
Speaker 3: Healthcare as well, I know that you've been very active
Speaker 3: in that space, in particular, particularly in the speed that
Speaker 3: it will take to put new prescription drugs on the
Speaker 3: market using different machine learning techniques. I'm just wondering, is
Speaker 3: that your main focus right now of investment when it
Speaker 3: comes to AI the other regions that you think are
Speaker 3: promising in the application in the near term, not just
Speaker 3: so there's these.
Speaker 1: Long term goals. Well, I'm focused on the health directs.
Speaker 1: I think that's the number one. But it'll be helpful
Speaker 1: in energy and finding energy and processing energy. It'll be
Speaker 1: helpful in transportation, It'll be helpful. It's going to be
Speaker 1: embedded in every business. And I think like liquid I,
Speaker 1: AI were for invested in that doesn't require it's built.
Speaker 1: As we talked about last year, they studied a worm's
Speaker 1: brain in mid like, who would do that? There's three
Speaker 1: hundred neurons in a worm's brain. I think that's fine.
Speaker 1: I mean neurons do you think is in your brain?
Speaker 1: Three hundred and one? I'm just kidding. The average person
Speaker 1: has eighty six billion. You guys probably have eighty seven each.
Speaker 1: But you can come on again. If they come out
Speaker 1: with an AI system that requires eighty percent less power
Speaker 1: to load it, and that means you can put it
Speaker 1: on edge device, so to be on your phone. So
Speaker 1: you're going to have, you know, your assistant on your phone.
Speaker 1: This is going to start to be in all the phones.
Speaker 1: It's going to kind of revolutionize the way our lives are.
Speaker 3: One aspect of this Davos is so interesting is that
Speaker 3: there's some real tensions to be resolved, especially as everyone's
Speaker 3: talking about artificial intelligence. On the flip side, Donald Trump
Speaker 3: talking about national security. He's talking about the chips in
Speaker 3: the US that could potentially transmit data back to China
Speaker 3: or one of our other adversaries or competitors. And I'm
Speaker 3: just wondering as an investor, how you understand what's national
Speaker 3: security and what isn't.
Speaker 1: Well, it's difficult. You got to follow the government and
Speaker 1: it changes all the time. I think in general, we
Speaker 1: do need national security, but it has to be focused,
Speaker 1: it has to have a purpose, and hopefully they'll have
Speaker 1: rational people that decide, you know what that is.
Speaker 2: Do you worry that some voices we'll get a biggest
Speaker 2: site in the future in the private sector.
Speaker 1: No, I don't worry because we have a system that
Speaker 1: I think will work in the long term, and there's
Speaker 1: going to be a lot off. There always has been
Speaker 1: fighting of different companies for different things, and so we'll
Speaker 1: get through it and hopefully we'll do the right thing.
Speaker 1: We've got to Congress, We've we've got the court system
Speaker 1: show in the United States is very stable. So I
Speaker 1: do think we need cybersecurity and we need security in general.
Speaker 1: Hopefully we can have a datante with China so we
Speaker 1: don't have that going on. And I think Trump, you know,
Speaker 1: wants to cut deals, you know, to move the economy forward,
Speaker 1: and I think that'll be a good thing.
Speaker 2: I'm showing a lot of Europeans have asked you on
Speaker 2: your opinion on what the next four years it's going
Speaker 2: to look like. What have you tell the Europeans when
Speaker 2: you ask that question?
Speaker 1: You know, I think the next four years the Europeans,
Speaker 1: I've been in many meetings here with health ministers and
Speaker 1: all sorts of ministers, and what they say is the
Speaker 1: EU really isn't a full union. They use the same money,
Speaker 1: but there's not an integrated capital market. There's not integrated
Speaker 1: in anything. In terms of starting a business, you need
Speaker 1: to fill out, you know, one hundred pages of forums
Speaker 1: in Germany and different ones in Portugal. So many of
Speaker 1: them talk to me and say they need to create
Speaker 1: a twenty eighth state with a set of rules, a
Speaker 1: virtual state with one set of rules to start a
Speaker 1: business and one set of of a bankruptcy. Bankruptcy is
Speaker 1: different in every country. You can't have a great capital
Speaker 1: market if you're dealing with twenty seven different bankruptcy kills
Speaker 1: or twenty different ways of doing things. So I think
Speaker 1: it's a great idea to start a twenty eighth virtual
Speaker 1: European state, and businesses can opt to be in that
Speaker 1: or being one of the twenty seven. But it's hard
Speaker 1: to be in both of those at the same time.
Speaker 1: So the big advantage the US as is it is
Speaker 1: one market. It is as one set of regulations, so
Speaker 1: we have a leg up and hopefully we will make
Speaker 1: that even better in the next four years.
Speaker 3: I want a return to where we began, which is sports,
Speaker 3: and my sport.
Speaker 1: Which is auctions.
Speaker 3: I'm looking at bond auctions, which I think is like
Speaker 3: a R caught it time. Well, I know, hold on
Speaker 3: a second, No, I'm serious, because I wonder how much
Speaker 3: you're watching what so many people here are worried about,
Speaker 3: which is that all of this optimism, all of this
Speaker 3: you know, happy talk about getting together and really focusing
Speaker 3: on growth could get really stein made if you start
Speaker 3: to see bond yields climb and you start to see
Speaker 3: the fiscal pressures really come into play. How concerned are
Speaker 3: you about that.
Speaker 1: I'm very concerned. You know, all the data would show
Speaker 1: when you have an increase in the money supply as
Speaker 1: big as it's been in the last five years and
Speaker 1: a large deficit, that's going to cause higher interest rates
Speaker 1: and inflation. Those kind of go hand in hand. So
Speaker 1: my biggest worry is inflation going to get out of
Speaker 1: control and keep those interests up there. I think house
Speaker 1: mortgages are costing seven percent. We definitely have to increase
Speaker 1: the supply and they're looking at programs to do that.
Speaker 1: But with seven percent mortgages, that's not great for growth.
Speaker 3: You mentioned nineteen ninety nine, and we all know what
Speaker 3: happened after nineteen ninety nine, and there is this feeling
Speaker 3: that there needs to be a washout and some of
Speaker 3: the startup companies to say deal with technology that continues
Speaker 3: to evolve. Is that the big concern that this kind
Speaker 3: of increase in rates could really catalyze that kind of washout.
Speaker 3: Is that what you're keeping your eye on.
Speaker 1: Increase in rates definitely catalyzes washouts because when money is free,
Speaker 1: there are no washouts. Right, we had free money for
Speaker 1: a long period time. Now. The good news is for
Speaker 1: most of my life, too long life, most of my life,
Speaker 1: regist rates have been t bills have been five percent,
Speaker 1: five and a half percent, So it's not anomalist. But yeah,
Speaker 1: that is the fear. We've already seen a lot of
Speaker 1: the company's valuations go down a good white boats, So
Speaker 1: I think we're kind of through that. I think there
Speaker 1: is a lot of hype on AI and probably some
Speaker 1: some fundings at very high levels. But I don't I don't.
Speaker 1: I don't see it like it was in ninety nine,
Speaker 1: where everything across the board was crazy. I used to
Speaker 1: walk into a room in San Francisco. They give me
Speaker 1: a term sheet and they say, we have a company
Speaker 1: that's going to internet. Company is going to reduce the
Speaker 1: supply chain cost of medical equipment. That we're valuing the
Speaker 1: company at one hundred million and has no revenues. This
Speaker 1: is the idea, and you have two hours to decide
Speaker 1: do you want to invest ten million, one hundred million valuation.
Speaker 1: I'll pass. I was, I was fall out of my chair.
Speaker 1: This is a real story. I said, thank you very much.
Speaker 1: And nine and ninety nine of those went bankrupt, and
Speaker 1: then we had Google and a few other ones that
Speaker 1: did well. That's not that's not the situation we're in
Speaker 1: right now.
Speaker 2: Stay you know, John, It's going to say great to
Speaker 2: see you, good luck to all your sports teams. As
Speaker 2: we say for without a doubt, Steve Palu can Bank
Speaker 2: Capital and Force of Milian