Speaker 1: Good morning. It's Monday, the twentieth of November here in London.
Speaker 1: This is the Bloomberg Daybreak you at podcast. I'm Caroline
Speaker 1: Hepke and.
Speaker 2: I'm Stephen Carroll. Coming up today. Open aiy's board rejects
Speaker 2: the wishes of major shareholders and hires a new CEO
Speaker 2: to replace Sam Altman.
Speaker 1: Expectations grow for the autumn statement and tax cuts from
Speaker 1: the UK Chancellor.
Speaker 2: And Elon Musk doubles down. The owner of x uses
Speaker 2: his social media platform to defend himself from allegations of
Speaker 2: anti Semitism.
Speaker 1: Let's start with a round up of our top stories.
Speaker 2: Chaoso threatening to engulf the firm behind some of the
Speaker 2: most exciting developments in artificial intelligence. Open AI's founder Sam
Speaker 2: Altman was ousted as the CEO on Friday after a
Speaker 2: power struggle with the board over the direction of the
Speaker 2: chat GPT owner Bloomberg understands this morning the board has
Speaker 2: hired Emma Cheer, formerly of Twitch, to replace him. Bloomberg's
Speaker 2: AI and tech reporter Rachel Metz has more.
Speaker 3: Open ai leadership has put out memos internally at the
Speaker 3: company saying that the board hasn't said that there was
Speaker 3: any quote, malfeasance or anything like that, so it's not
Speaker 3: totally clear what the board was initially even accusing him
Speaker 3: of doing when it got rid of him.
Speaker 2: Rachel Matt says the decision is a stinging rebuke to
Speaker 2: major investors such as Microsoft and Thrive Capital, who wanted
Speaker 2: Altman back and the board to step down now Here.
Speaker 1: In the UK, Jeremy Hunt is expected to reveal plans
Speaker 1: to cut Britain's tax burden. This week's autumn statement a
Speaker 1: pivotal moment for the struggling Tories. The Chancellor's tax and
Speaker 1: spent plans will be announced on Wednesday, and speculation is
Speaker 1: growing that he may promise a future income tax cut.
Speaker 1: Speaking on Sunday, Hunt said that any reduction must be
Speaker 1: done in a responsible way.
Speaker 4: We believe lower taxes are essential for a high growth economy.
Speaker 4: We do want to bring down the tax band, but
Speaker 4: we will only do so responsibly. The one thing we
Speaker 4: won't do is any kind of tax cut that fuels inflation.
Speaker 4: We've done all this hard work. We're not going to
Speaker 4: throw that away.
Speaker 1: Jeremy Hunt has also been considering a potential cut to
Speaker 1: inheritance tax, though the move has already drawn criticism from
Speaker 1: some Tory MPs and has been a source of division
Speaker 1: in the Prime Minister's top team.
Speaker 2: The White House says a deal to free some of
Speaker 2: the two hundred and thirty nine hostages held in Gaza
Speaker 2: is closer than ever it's understood. The agreement would involve
Speaker 2: the release of dozens of captives and an extended pause
Speaker 2: and the fighting. America's Deputy National Security Advisor, John Feiner
Speaker 2: says outstanding areas of disagreement between Israel and Hamas have
Speaker 2: been narrowed.
Speaker 5: I believe we are closer than we have been in
Speaker 5: quite some time, maybe closer than we have been since
Speaker 5: the beginning of this process to getting this deal done.
Speaker 5: And we are following this minute by minute, hour by hour,
Speaker 5: and have been for a number of weeks up to
Speaker 5: and including the President, for whom this is a major priority.
Speaker 2: Speaking to NBC's Meet the Press program, Finer went on
Speaker 2: to say that a pause would also allow more humanitarian
Speaker 2: aid to reach Gaza. The hamasr On Health Ministry there
Speaker 2: says the death toll has now surpassed thirteen thousand. The
Speaker 2: negotiations come as Israel released footage of what it says
Speaker 2: as a fortified tunnel under the Shifa Hospital complex. Pressure
Speaker 2: has been mounting in recent days to justify the raid
Speaker 2: on the medical center and claims of a hamass base
Speaker 2: beneath it.
Speaker 1: Elon Musk says that reports labeling him as anti Semitic
Speaker 1: couldn't be quote further from the truth. The tech billionaire
Speaker 1: is facing an advertiser backlash after endorsing antisemitic content in
Speaker 1: a post on his social media platform. Near Impact Capital
Speaker 1: founder Kristin Hull is an activist investor in Tesla. She
Speaker 1: says the card Gant's board should step in now.
Speaker 6: Elon Musk has been erradick. He's been att all with
Speaker 6: this speech. We never actually know what he's trying to do.
Speaker 6: And while he is saying he's promoting free speech, hateful
Speaker 6: speech and hates speech has no place on X and
Speaker 6: it certainly doesn't have any place coming from a major
Speaker 6: CEO in our nation.
Speaker 1: Christin Hull holds a small amount of shares in Mosque's
Speaker 1: solely publicly traded venture, but large advertisers like Walt Disney
Speaker 1: and Apple are among those distancing themselves from X.
Speaker 2: Libertarian outsider Havimla will become Argentina's new president he's promising
Speaker 2: a radical shakeup to fix decades of policy mismanagement. Speaking
Speaker 2: to crowds in Buenos Aires, the president elects stress the
Speaker 2: need for immediate action.
Speaker 7: The situation in Argentina is critical. The changes that this
Speaker 7: country needs are drastic. There's no room for gradual measure
Speaker 7: and there's no way to say it long lived. Freedom heavy.
Speaker 2: MLA also highlighted the Argentina's critical economic condition in an
Speaker 2: address to supporters. Investors are welcoming the news. Overseas bonds
Speaker 2: look poised to rise as traders anticipated change in fortunes
Speaker 2: for the country after experiencing five recessions in the last decade.
Speaker 2: It's expected that the Argentinean paeser will weaken, reflecting Malay's
Speaker 2: plan to replace the currency with the dollar.
Speaker 1: And finally, London's he For airport is facing flight delays
Speaker 1: due to staff absences and bad weather, including high winds.
Speaker 1: NAT's the UK's Aerospace Airspace Manager rather said in a
Speaker 1: statement that temporary restrictions were in place at Heathrow, adding
Speaker 1: that it's working with the airport to reduce disruption. The
Speaker 1: British Airways website shows dozens of flights held up by
Speaker 1: up to two hours as the airline adjust some of
Speaker 1: its short haul schedule. The news comes off to Gatwick
Speaker 1: said late in September that it had capped the number
Speaker 1: of daily flights until the first of October due to
Speaker 1: unforeseen staff shortages.
Speaker 2: Those are your top stories on the markets. The MSCIASA
Speaker 2: Pacific Index is trading half a percent higher this morning.
Speaker 2: Eurostos fifty features are flat at the moment. The ten
Speaker 2: year Treasury yields two basis points higher at four point
Speaker 2: four to five percent.
Speaker 1: Now in a moment, we're going to be talking about
Speaker 1: what we expect to see from the Chancellor in this
Speaker 1: week's autumn statement from Jeremy Hunt. We'll also bring you
Speaker 1: the latest details on the extraordinary story of open Ai,
Speaker 1: the company that helped develop chat GPT is engulfed in
Speaker 1: a power struggle right now, including up until this morning,
Speaker 1: so we'll have more on that in just a moment.
Speaker 1: But also this Stephen, tis the season to know the
Speaker 1: size of the bonus that you might get. In the
Speaker 1: financial industry, Paul ja Davies has a long read on
Speaker 1: this this morning, and he delves into all the various
Speaker 1: types of financial firms. His answer is essentially not that
Speaker 1: big global M and A activity has slumped this year.
Speaker 1: Deals of tumble, so bonuses they're expected to down something
Speaker 1: like twenty percent according to Johnson Associates. And then he
Speaker 1: looks at all the different types of trading also not
Speaker 1: that great for bonus season this year.
Speaker 2: Yeah, it's true when you dig into the details of
Speaker 2: where the activity is gone in banks this year is
Speaker 2: perhaps not surprising to many people. And I'm sure where
Speaker 2: people might have been very helpful that perhaps their bonuses
Speaker 2: might be larger than they expect. The data seems to
Speaker 2: have turned against them anyway, But all crunched in Paul
Speaker 2: Davies's piece this morning, so well worth at a reed.
Speaker 1: Okay, let's send our attention then and get the details
Speaker 1: on the leadership changes at open Ai, the company that
Speaker 1: helped to develop chat GPT. The board which ousted the
Speaker 1: CEO and president on Friday of last week, are said
Speaker 1: to have hired Emmitt Scheer as their new chief. That
Speaker 1: comes after Bloomberg reported that the interim CEO, Mira Marati,
Speaker 1: was planning to rehire former chief Sam Altman and former
Speaker 1: president Greg Brockman. Bloomberg TV ANDKA Tom McKenzie has been
Speaker 1: across this story and joins us, now, wow, this is
Speaker 1: moving quickly. What have we actually heard about what the
Speaker 1: board is doing just this morning about who they're picking
Speaker 1: as see.
Speaker 8: Yeah, the story is developing at a very rapid clip
Speaker 8: and our team on the ground in California, San Francisco
Speaker 8: reporting this out for us. So, the latest line coming
Speaker 8: through in the last thirty minutes or so is that
Speaker 8: Emmett Sheer is going to be taking over as the
Speaker 8: CEO of Open AI. We know that the board had
Speaker 8: reached out to a number of potential executives to take
Speaker 8: over as the CEO over the weekend. Now we have
Speaker 8: it confirmed from our reporting that it's going to be
Speaker 8: Emmett Sheeer, formerly the CEO of the video streaming company
Speaker 8: Twitch up until about March of this year, and prior
Speaker 8: to that, a co founder of a video platform called
Speaker 8: just in TV, so his background very much within the
Speaker 8: video world. He's also though a part time partner at
Speaker 8: y Combinator, the eventual capital firm, which interestingly Sam Oltman
Speaker 8: was the CEO of prior to open AI. That's what
Speaker 8: we know about Emmett Sheer, the new appointment.
Speaker 2: And this though as there are two camps as the
Speaker 2: board on one side, pointing amates Sheer, but then there
Speaker 2: we was executives and investors pushing to try and bring
Speaker 2: Sam Oltman back.
Speaker 8: Yeah, and the tension has been very clear indeed between
Speaker 8: the board, which let's not forget, was set up when
Speaker 8: open Ai was squarely focused on being a nonprofit. So
Speaker 8: there's a legacy there in terms of the board's constitution
Speaker 8: around a project that has evolved so quickly. But the
Speaker 8: tensions have come to the fore clearly. We know that
Speaker 8: not only many researchers and key members of the team
Speaker 8: at OpenAI, but as you say, also key investors and Microsoft.
Speaker 8: Don't forget the biggest investor sat In Thedella, who was
Speaker 8: taken by surprise by this announcement that Sam Oltman was
Speaker 8: being forced out on Friday. It was a shock to
Speaker 8: hear him in the team at Microsoft. We know they
Speaker 8: are lobbyings for Sam Altman to come back, and up
Speaker 8: until this line crossed about thirty minutes ago, the latest
Speaker 8: news was that they were in the middle of this
Speaker 8: negotiation Sam Moltman and the board to get Sam back
Speaker 8: as the CEO at least in some kind of leadership.
Speaker 8: In fact, he was in the offices of open Ai
Speaker 8: over the weekend. Yeah.
Speaker 1: And fundamentally though, as this story has sort of exploded
Speaker 1: on Friday and over the weekend, what do we think
Speaker 1: is behind the disagreement? Why do we think that you
Speaker 1: know that sam Oltman was was ousted from the business.
Speaker 1: I mean, that's the big question mark about it.
Speaker 8: It seems to be a combination of factors. So I'll
Speaker 8: take you back to what I was touching on there,
Speaker 8: which was the open Ai was originally set up as
Speaker 8: a nonprofit to work on AI that would be and
Speaker 8: have safety at its core. It had a commercial operation,
Speaker 8: as Samon Oltman has said in the past, kind of
Speaker 8: cobbled on rather than all being commercial with a research
Speaker 8: lab on one side, it was all about the research lab.
Speaker 8: It's all about being a nonprofit. That has evolved and
Speaker 8: sam Oltman has driven the commercialization of their products, notably
Speaker 8: of course, the launch of chatchebt in November of last year,
Speaker 8: and he's continued to drive the evelotion of those projects
Speaker 8: and get them out to customers. He claims that about
Speaker 8: ninety percent of the Fortune five hundred companies have access
Speaker 8: now in the customers. That has caused tensions within the
Speaker 8: original buildout of open AI, including the chief scientists by
Speaker 8: the way, Iliasuskava, who they poached from Google, who's been
Speaker 8: very concerned about risks. But also again the legacy board
Speaker 8: bored on for this nonprofit with the aim of being
Speaker 8: risk focused. The concern amongst many board members as they've
Speaker 8: gone too quickly, too fast, and they aren't putting the
Speaker 8: checks and balances in place. The other component as well
Speaker 8: that we've been reporting on is that Sam Altman has
Speaker 8: been doing trips overseas trying to raise capital for additional
Speaker 8: and new businesses around for example AI chips and also
Speaker 8: AI hardware, so that has also been attention apparently between
Speaker 8: him and the board.
Speaker 2: Okay, Tom McKenzie, Tvanco, thank you very much for joining
Speaker 2: us with the latest en that story this morning, or
Speaker 2: continue of course to follow all the developments around open AIS.
Speaker 2: Who were saying to Time they are quite a fast
Speaker 2: moving story. Yeah.
Speaker 1: Absolutely. Meanwhile, Hoy in the UK, it's a very big
Speaker 1: week for the government. The autumn Statement on Wednesday. The
Speaker 1: chances of Jeremy Hunt expect to reveal plans to cut
Speaker 1: Britain's tax burden without adding to inflation. That would be
Speaker 1: the aim our UK correspondent Lizzie Burden is back and
Speaker 1: joins us in studio. Good morning. Set the scene for us,
Speaker 1: then what do you think is going to happen on Wednesday?
Speaker 1: The messaging over the weekend, there was plenty of it.
Speaker 1: It was a very difficult week last week for the Tories.
Speaker 9: Yeah, nightmare week for the Prime minister. You have the
Speaker 9: party divided again over small boats and the Home Secretary
Speaker 9: Sweller Bratherman's departure. And of course this autumn statement really
Speaker 9: is crucial because it's one of the few remaining set
Speaker 9: pieces the opportunities to narrow the gap with labor. They've
Speaker 9: got a twenty point lead and the election's got to
Speaker 9: be called by January twenty twenty five. So, as you say,
Speaker 9: we had the Chancellor, Jeremy Hunt on the airwaves yesterday
Speaker 9: laying the groundwork for Wednesday. He wants to take credit
Speaker 9: for stabilizing the economy. You know, the government's already met
Speaker 9: its self set target of halving inflation by the end
Speaker 9: of the year, even if it's not back to the
Speaker 9: Bank of England's two percent target, even though the work
Speaker 9: was really done by thread Needle Street. But moving on,
Speaker 9: he's got not a lot of room to maneuver fiscally,
Speaker 9: and he's going to want to avoid criticism that the
Speaker 9: Sunak administration is simply managing Britain's decline so as was ever.
Speaker 9: Thus you've got back bench conservatives clamoring for tax cuts,
Speaker 9: but Jeremy Hunt has already said that's not going to
Speaker 9: happen overnight, but he hasn't ruled anything out. The trouble
Speaker 9: is the government really needs to shift gears at this point.
Speaker 9: Party conference, Caroline, you and I were there didn't really
Speaker 9: move the dial, nor did the King's speech and so
Speaker 9: Hunt's got to get a lot of political bang out
Speaker 9: of not a lot of fiscal book here.
Speaker 2: Okay, well let's talk specifics then, Lizzie. What sort of
Speaker 2: things should we be expecting the Chancellor to Annette?
Speaker 9: I mean, if you listen to the Chancellor yesterday, you'd
Speaker 9: think that every tax under the sun was going to
Speaker 9: be cut, and if you read the papers as well.
Speaker 9: But that's the usual sort of speculation before a fiscal event.
Speaker 9: We know that the Prime Minister and the Chancellor have
Speaker 9: been considering slashing inheritance tax, but optically that would be
Speaker 9: so difficult in a cost of living crisis. Given that
Speaker 9: the Chancellor's also expected to ad just welfare to try
Speaker 9: to reduce economic inactivity and save a bit of money.
Speaker 9: So there's speculation that he might pull a bigger lever
Speaker 9: like income tax or national insurance. But then the Chancellor
Speaker 9: seemed to cool on that yesterday and it would be expensive.
Speaker 9: He's warned it could stoke inflation. So the compromise would
Speaker 9: be to pledge to cut income tax somewhere down the
Speaker 9: line that straight out of the Rishie Sunac playbook. Or
Speaker 9: they could cut stamp duty, the property transaction tax that's
Speaker 9: scene as being a less inflationary move. I'm going to
Speaker 9: be listening for clues from the Prime Minister this morning.
Speaker 9: He's making a speech in North London and the Chancellor
Speaker 9: is giving a fireside chat to the CBI's countdown to
Speaker 9: the election event. Later today, I'm hosting a panel. He's
Speaker 9: going to be talking to the Director General Ray Newton Smith,
Speaker 9: and he's he's going to be joining us right here
Speaker 9: on Bloomberg Radio for an interview before that conference gets
Speaker 9: going today. Yeah.
Speaker 1: Absolutely, yeah, it's going to be a great morning in
Speaker 1: terms of the next steps though on the Rwanda deportation policies,
Speaker 1: does go back to what happened last week, the court
Speaker 1: decision that went against the government. What happens with this
Speaker 1: migration policy.
Speaker 9: Now, yeah, it really was Rishi Sunac's worst week as
Speaker 9: Prime minister. Increasingly he's on thin ice with his backbench,
Speaker 9: so he's expected to deploy Whitehall officials to Rwanda to
Speaker 9: try and assist with the casework. This is according to
Speaker 9: the Telegraph. He's expected to publish a new Rwanda treaty
Speaker 9: early this week. And this is of course that you
Speaker 9: say after the Supreme Court ruled that deporting asylum seekers
Speaker 9: to Rwanda was unlawful because it risked people being sent
Speaker 9: back to their home countries. The other major event on
Speaker 9: the docket in the UK today is the government's Food
Speaker 9: Security Summit that's hosted with the Bill and Melinda Gates Foundation.
Speaker 9: It's the idea to address hunger and nutrition globally, so
Speaker 9: you're going to have retur representatives from governments, from international
Speaker 9: aid groups, the science community and the private sector all
Speaker 9: expected to attend. Again the Prime Minister trying to move
Speaker 9: the spotlight away from the boat's policy, which really has
Speaker 9: been a thorn in its side.
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the
Speaker 2: stories making news from London to Wall Street and beyond.
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Speaker 1: I'm Caroline Hepka and.
Speaker 2: I'm Stephen Carroll. Join us again tomorrow morning for all
Speaker 2: the news you need to start your day right here
Speaker 2: on Bloomberg day Break Europe