WEBVTT - OpenAI New CEO, Tax Cut Expectations & Hamas Hostage Release 'Closer'

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<v Speaker 1>Good morning. It's Monday, the twentieth of November here in London.

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<v Speaker 1>This is the Bloomberg Daybreak you at podcast. I'm Caroline

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<v Speaker 1>Hepke and.

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<v Speaker 2>I'm Stephen Carroll. Coming up today. Open aiy's board rejects

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<v Speaker 2>the wishes of major shareholders and hires a new CEO

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<v Speaker 2>to replace Sam Altman.

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<v Speaker 1>Expectations grow for the autumn statement and tax cuts from

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<v Speaker 1>the UK Chancellor.

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<v Speaker 2>And Elon Musk doubles down. The owner of x uses

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<v Speaker 2>his social media platform to defend himself from allegations of

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<v Speaker 2>anti Semitism.

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

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<v Speaker 2>Chaoso threatening to engulf the firm behind some of the

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<v Speaker 2>most exciting developments in artificial intelligence. Open AI's founder Sam

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<v Speaker 2>Altman was ousted as the CEO on Friday after a

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<v Speaker 2>power struggle with the board over the direction of the

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<v Speaker 2>chat GPT owner Bloomberg understands this morning the board has

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<v Speaker 2>hired Emma Cheer, formerly of Twitch, to replace him. Bloomberg's

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<v Speaker 2>AI and tech reporter Rachel Metz has more.

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<v Speaker 3>Open ai leadership has put out memos internally at the

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<v Speaker 3>company saying that the board hasn't said that there was

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<v Speaker 3>any quote, malfeasance or anything like that, so it's not

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<v Speaker 3>totally clear what the board was initially even accusing him

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<v Speaker 3>of doing when it got rid of him.

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<v Speaker 2>Rachel Matt says the decision is a stinging rebuke to

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<v Speaker 2>major investors such as Microsoft and Thrive Capital, who wanted

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<v Speaker 2>Altman back and the board to step down now Here.

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<v Speaker 1>In the UK, Jeremy Hunt is expected to reveal plans

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<v Speaker 1>to cut Britain's tax burden. This week's autumn statement a

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<v Speaker 1>pivotal moment for the struggling Tories. The Chancellor's tax and

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<v Speaker 1>spent plans will be announced on Wednesday, and speculation is

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<v Speaker 1>growing that he may promise a future income tax cut.

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<v Speaker 1>Speaking on Sunday, Hunt said that any reduction must be

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<v Speaker 1>done in a responsible way.

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<v Speaker 4>We believe lower taxes are essential for a high growth economy.

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<v Speaker 4>We do want to bring down the tax band, but

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<v Speaker 4>we will only do so responsibly. The one thing we

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<v Speaker 4>won't do is any kind of tax cut that fuels inflation.

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<v Speaker 4>We've done all this hard work. We're not going to

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<v Speaker 4>throw that away.

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<v Speaker 1>Jeremy Hunt has also been considering a potential cut to

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<v Speaker 1>inheritance tax, though the move has already drawn criticism from

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<v Speaker 1>some Tory MPs and has been a source of division

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<v Speaker 1>in the Prime Minister's top team.

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<v Speaker 2>The White House says a deal to free some of

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<v Speaker 2>the two hundred and thirty nine hostages held in Gaza

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<v Speaker 2>is closer than ever it's understood. The agreement would involve

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<v Speaker 2>the release of dozens of captives and an extended pause

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<v Speaker 2>and the fighting. America's Deputy National Security Advisor, John Feiner

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<v Speaker 2>says outstanding areas of disagreement between Israel and Hamas have

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<v Speaker 2>been narrowed.

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<v Speaker 5>I believe we are closer than we have been in

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<v Speaker 5>quite some time, maybe closer than we have been since

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<v Speaker 5>the beginning of this process to getting this deal done.

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<v Speaker 5>And we are following this minute by minute, hour by hour,

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<v Speaker 5>and have been for a number of weeks up to

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<v Speaker 5>and including the President, for whom this is a major priority.

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<v Speaker 2>Speaking to NBC's Meet the Press program, Finer went on

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<v Speaker 2>to say that a pause would also allow more humanitarian

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<v Speaker 2>aid to reach Gaza. The hamasr On Health Ministry there

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<v Speaker 2>says the death toll has now surpassed thirteen thousand. The

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<v Speaker 2>negotiations come as Israel released footage of what it says

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<v Speaker 2>as a fortified tunnel under the Shifa Hospital complex. Pressure

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<v Speaker 2>has been mounting in recent days to justify the raid

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<v Speaker 2>on the medical center and claims of a hamass base

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<v Speaker 2>beneath it.

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<v Speaker 1>Elon Musk says that reports labeling him as anti Semitic

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<v Speaker 1>couldn't be quote further from the truth. The tech billionaire

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<v Speaker 1>is facing an advertiser backlash after endorsing antisemitic content in

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<v Speaker 1>a post on his social media platform. Near Impact Capital

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<v Speaker 1>founder Kristin Hull is an activist investor in Tesla. She

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<v Speaker 1>says the card Gant's board should step in now.

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<v Speaker 6>Elon Musk has been erradick. He's been att all with

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<v Speaker 6>this speech. We never actually know what he's trying to do.

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<v Speaker 6>And while he is saying he's promoting free speech, hateful

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<v Speaker 6>speech and hates speech has no place on X and

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<v Speaker 6>it certainly doesn't have any place coming from a major

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<v Speaker 6>CEO in our nation.

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<v Speaker 1>Christin Hull holds a small amount of shares in Mosque's

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<v Speaker 1>solely publicly traded venture, but large advertisers like Walt Disney

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<v Speaker 1>and Apple are among those distancing themselves from X.

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<v Speaker 2>Libertarian outsider Havimla will become Argentina's new president he's promising

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<v Speaker 2>a radical shakeup to fix decades of policy mismanagement. Speaking

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<v Speaker 2>to crowds in Buenos Aires, the president elects stress the

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<v Speaker 2>need for immediate action.

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<v Speaker 7>The situation in Argentina is critical. The changes that this

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<v Speaker 7>country needs are drastic. There's no room for gradual measure

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<v Speaker 7>and there's no way to say it long lived. Freedom heavy.

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<v Speaker 2>MLA also highlighted the Argentina's critical economic condition in an

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<v Speaker 2>address to supporters. Investors are welcoming the news. Overseas bonds

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<v Speaker 2>look poised to rise as traders anticipated change in fortunes

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<v Speaker 2>for the country after experiencing five recessions in the last decade.

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<v Speaker 2>It's expected that the Argentinean paeser will weaken, reflecting Malay's

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<v Speaker 2>plan to replace the currency with the dollar.

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<v Speaker 1>And finally, London's he For airport is facing flight delays

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<v Speaker 1>due to staff absences and bad weather, including high winds.

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<v Speaker 1>NAT's the UK's Aerospace Airspace Manager rather said in a

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<v Speaker 1>statement that temporary restrictions were in place at Heathrow, adding

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<v Speaker 1>that it's working with the airport to reduce disruption. The

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<v Speaker 1>British Airways website shows dozens of flights held up by

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<v Speaker 1>up to two hours as the airline adjust some of

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<v Speaker 1>its short haul schedule. The news comes off to Gatwick

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<v Speaker 1>said late in September that it had capped the number

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<v Speaker 1>of daily flights until the first of October due to

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<v Speaker 1>unforeseen staff shortages.

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<v Speaker 2>Those are your top stories on the markets. The MSCIASA

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<v Speaker 2>Pacific Index is trading half a percent higher this morning.

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<v Speaker 2>Eurostos fifty features are flat at the moment. The ten

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<v Speaker 2>year Treasury yields two basis points higher at four point

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<v Speaker 2>four to five percent.

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<v Speaker 1>Now in a moment, we're going to be talking about

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<v Speaker 1>what we expect to see from the Chancellor in this

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<v Speaker 1>week's autumn statement from Jeremy Hunt. We'll also bring you

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<v Speaker 1>the latest details on the extraordinary story of open Ai,

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<v Speaker 1>the company that helped develop chat GPT is engulfed in

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<v Speaker 1>a power struggle right now, including up until this morning,

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<v Speaker 1>so we'll have more on that in just a moment.

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<v Speaker 1>But also this Stephen, tis the season to know the

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<v Speaker 1>size of the bonus that you might get. In the

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<v Speaker 1>financial industry, Paul ja Davies has a long read on

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<v Speaker 1>this this morning, and he delves into all the various

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<v Speaker 1>types of financial firms. His answer is essentially not that

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<v Speaker 1>big global M and A activity has slumped this year.

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<v Speaker 1>Deals of tumble, so bonuses they're expected to down something

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<v Speaker 1>like twenty percent according to Johnson Associates. And then he

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<v Speaker 1>looks at all the different types of trading also not

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<v Speaker 1>that great for bonus season this year.

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<v Speaker 2>Yeah, it's true when you dig into the details of

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<v Speaker 2>where the activity is gone in banks this year is

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<v Speaker 2>perhaps not surprising to many people. And I'm sure where

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<v Speaker 2>people might have been very helpful that perhaps their bonuses

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<v Speaker 2>might be larger than they expect. The data seems to

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<v Speaker 2>have turned against them anyway, But all crunched in Paul

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<v Speaker 2>Davies's piece this morning, so well worth at a reed.

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<v Speaker 1>Okay, let's send our attention then and get the details

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<v Speaker 1>on the leadership changes at open Ai, the company that

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<v Speaker 1>helped to develop chat GPT. The board which ousted the

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<v Speaker 1>CEO and president on Friday of last week, are said

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<v Speaker 1>to have hired Emmitt Scheer as their new chief. That

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<v Speaker 1>comes after Bloomberg reported that the interim CEO, Mira Marati,

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<v Speaker 1>was planning to rehire former chief Sam Altman and former

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<v Speaker 1>president Greg Brockman. Bloomberg TV ANDKA Tom McKenzie has been

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<v Speaker 1>across this story and joins us, now, wow, this is

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<v Speaker 1>moving quickly. What have we actually heard about what the

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<v Speaker 1>board is doing just this morning about who they're picking

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<v Speaker 1>as see.

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<v Speaker 8>Yeah, the story is developing at a very rapid clip

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<v Speaker 8>and our team on the ground in California, San Francisco

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<v Speaker 8>reporting this out for us. So, the latest line coming

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<v Speaker 8>through in the last thirty minutes or so is that

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<v Speaker 8>Emmett Sheer is going to be taking over as the

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<v Speaker 8>CEO of Open AI. We know that the board had

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<v Speaker 8>reached out to a number of potential executives to take

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<v Speaker 8>over as the CEO over the weekend. Now we have

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<v Speaker 8>it confirmed from our reporting that it's going to be

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<v Speaker 8>Emmett Sheeer, formerly the CEO of the video streaming company

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<v Speaker 8>Twitch up until about March of this year, and prior

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<v Speaker 8>to that, a co founder of a video platform called

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<v Speaker 8>just in TV, so his background very much within the

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<v Speaker 8>video world. He's also though a part time partner at

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<v Speaker 8>y Combinator, the eventual capital firm, which interestingly Sam Oltman

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<v Speaker 8>was the CEO of prior to open AI. That's what

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<v Speaker 8>we know about Emmett Sheer, the new appointment.

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<v Speaker 2>And this though as there are two camps as the

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<v Speaker 2>board on one side, pointing amates Sheer, but then there

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<v Speaker 2>we was executives and investors pushing to try and bring

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<v Speaker 2>Sam Oltman back.

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<v Speaker 8>Yeah, and the tension has been very clear indeed between

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<v Speaker 8>the board, which let's not forget, was set up when

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<v Speaker 8>open Ai was squarely focused on being a nonprofit. So

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<v Speaker 8>there's a legacy there in terms of the board's constitution

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<v Speaker 8>around a project that has evolved so quickly. But the

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<v Speaker 8>tensions have come to the fore clearly. We know that

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<v Speaker 8>not only many researchers and key members of the team

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<v Speaker 8>at OpenAI, but as you say, also key investors and Microsoft.

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<v Speaker 8>Don't forget the biggest investor sat In Thedella, who was

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<v Speaker 8>taken by surprise by this announcement that Sam Oltman was

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<v Speaker 8>being forced out on Friday. It was a shock to

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<v Speaker 8>hear him in the team at Microsoft. We know they

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<v Speaker 8>are lobbyings for Sam Altman to come back, and up

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<v Speaker 8>until this line crossed about thirty minutes ago, the latest

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<v Speaker 8>news was that they were in the middle of this

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<v Speaker 8>negotiation Sam Moltman and the board to get Sam back

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<v Speaker 8>as the CEO at least in some kind of leadership.

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<v Speaker 8>In fact, he was in the offices of open Ai

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<v Speaker 8>over the weekend. Yeah.

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<v Speaker 1>And fundamentally though, as this story has sort of exploded

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<v Speaker 1>on Friday and over the weekend, what do we think

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<v Speaker 1>is behind the disagreement? Why do we think that you

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<v Speaker 1>know that sam Oltman was was ousted from the business.

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<v Speaker 1>I mean, that's the big question mark about it.

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<v Speaker 8>It seems to be a combination of factors. So I'll

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<v Speaker 8>take you back to what I was touching on there,

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<v Speaker 8>which was the open Ai was originally set up as

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<v Speaker 8>a nonprofit to work on AI that would be and

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<v Speaker 8>have safety at its core. It had a commercial operation,

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<v Speaker 8>as Samon Oltman has said in the past, kind of

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<v Speaker 8>cobbled on rather than all being commercial with a research

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<v Speaker 8>lab on one side, it was all about the research lab.

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<v Speaker 8>It's all about being a nonprofit. That has evolved and

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<v Speaker 8>sam Oltman has driven the commercialization of their products, notably

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<v Speaker 8>of course, the launch of chatchebt in November of last year,

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<v Speaker 8>and he's continued to drive the evelotion of those projects

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<v Speaker 8>and get them out to customers. He claims that about

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<v Speaker 8>ninety percent of the Fortune five hundred companies have access

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<v Speaker 8>now in the customers. That has caused tensions within the

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<v Speaker 8>original buildout of open AI, including the chief scientists by

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<v Speaker 8>the way, Iliasuskava, who they poached from Google, who's been

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<v Speaker 8>very concerned about risks. But also again the legacy board

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<v Speaker 8>bored on for this nonprofit with the aim of being

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<v Speaker 8>risk focused. The concern amongst many board members as they've

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<v Speaker 8>gone too quickly, too fast, and they aren't putting the

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<v Speaker 8>checks and balances in place. The other component as well

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<v Speaker 8>that we've been reporting on is that Sam Altman has

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<v Speaker 8>been doing trips overseas trying to raise capital for additional

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<v Speaker 8>and new businesses around for example AI chips and also

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<v Speaker 8>AI hardware, so that has also been attention apparently between

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<v Speaker 8>him and the board.

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<v Speaker 2>Okay, Tom McKenzie, Tvanco, thank you very much for joining

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<v Speaker 2>us with the latest en that story this morning, or

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<v Speaker 2>continue of course to follow all the developments around open AIS.

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<v Speaker 2>Who were saying to Time they are quite a fast

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<v Speaker 2>moving story. Yeah.

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<v Speaker 1>Absolutely. Meanwhile, Hoy in the UK, it's a very big

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<v Speaker 1>week for the government. The autumn Statement on Wednesday. The

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<v Speaker 1>chances of Jeremy Hunt expect to reveal plans to cut

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<v Speaker 1>Britain's tax burden without adding to inflation. That would be

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<v Speaker 1>the aim our UK correspondent Lizzie Burden is back and

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<v Speaker 1>joins us in studio. Good morning. Set the scene for us,

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<v Speaker 1>then what do you think is going to happen on Wednesday?

0:12:12.720 --> 0:12:15.400
<v Speaker 1>The messaging over the weekend, there was plenty of it.

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<v Speaker 1>It was a very difficult week last week for the Tories.

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<v Speaker 9>Yeah, nightmare week for the Prime minister. You have the

0:12:20.360 --> 0:12:24.320
<v Speaker 9>party divided again over small boats and the Home Secretary

0:12:24.360 --> 0:12:27.920
<v Speaker 9>Sweller Bratherman's departure. And of course this autumn statement really

0:12:28.000 --> 0:12:31.280
<v Speaker 9>is crucial because it's one of the few remaining set

0:12:31.360 --> 0:12:36.400
<v Speaker 9>pieces the opportunities to narrow the gap with labor. They've

0:12:36.400 --> 0:12:38.960
<v Speaker 9>got a twenty point lead and the election's got to

0:12:39.000 --> 0:12:41.720
<v Speaker 9>be called by January twenty twenty five. So, as you say,

0:12:41.720 --> 0:12:44.840
<v Speaker 9>we had the Chancellor, Jeremy Hunt on the airwaves yesterday

0:12:44.960 --> 0:12:49.080
<v Speaker 9>laying the groundwork for Wednesday. He wants to take credit

0:12:49.120 --> 0:12:53.080
<v Speaker 9>for stabilizing the economy. You know, the government's already met

0:12:53.160 --> 0:12:56.600
<v Speaker 9>its self set target of halving inflation by the end

0:12:56.600 --> 0:12:58.000
<v Speaker 9>of the year, even if it's not back to the

0:12:58.040 --> 0:13:01.520
<v Speaker 9>Bank of England's two percent target, even though the work

0:13:01.600 --> 0:13:04.480
<v Speaker 9>was really done by thread Needle Street. But moving on,

0:13:04.760 --> 0:13:07.520
<v Speaker 9>he's got not a lot of room to maneuver fiscally,

0:13:08.080 --> 0:13:11.080
<v Speaker 9>and he's going to want to avoid criticism that the

0:13:11.120 --> 0:13:16.400
<v Speaker 9>Sunak administration is simply managing Britain's decline so as was ever.

0:13:16.480 --> 0:13:20.160
<v Speaker 9>Thus you've got back bench conservatives clamoring for tax cuts,

0:13:20.600 --> 0:13:23.000
<v Speaker 9>but Jeremy Hunt has already said that's not going to

0:13:23.040 --> 0:13:26.360
<v Speaker 9>happen overnight, but he hasn't ruled anything out. The trouble

0:13:26.480 --> 0:13:30.199
<v Speaker 9>is the government really needs to shift gears at this point.

0:13:30.280 --> 0:13:33.520
<v Speaker 9>Party conference, Caroline, you and I were there didn't really

0:13:33.559 --> 0:13:36.400
<v Speaker 9>move the dial, nor did the King's speech and so

0:13:36.559 --> 0:13:39.640
<v Speaker 9>Hunt's got to get a lot of political bang out

0:13:39.679 --> 0:13:41.400
<v Speaker 9>of not a lot of fiscal book here.

0:13:41.679 --> 0:13:44.200
<v Speaker 2>Okay, well let's talk specifics then, Lizzie. What sort of

0:13:44.280 --> 0:13:47.600
<v Speaker 2>things should we be expecting the Chancellor to Annette?

0:13:47.800 --> 0:13:50.280
<v Speaker 9>I mean, if you listen to the Chancellor yesterday, you'd

0:13:50.320 --> 0:13:52.600
<v Speaker 9>think that every tax under the sun was going to

0:13:52.640 --> 0:13:55.320
<v Speaker 9>be cut, and if you read the papers as well.

0:13:55.320 --> 0:13:58.199
<v Speaker 9>But that's the usual sort of speculation before a fiscal event.

0:13:58.240 --> 0:14:00.400
<v Speaker 9>We know that the Prime Minister and the Chancellor have

0:14:00.520 --> 0:14:04.960
<v Speaker 9>been considering slashing inheritance tax, but optically that would be

0:14:05.000 --> 0:14:07.360
<v Speaker 9>so difficult in a cost of living crisis. Given that

0:14:07.400 --> 0:14:11.040
<v Speaker 9>the Chancellor's also expected to ad just welfare to try

0:14:11.080 --> 0:14:14.680
<v Speaker 9>to reduce economic inactivity and save a bit of money.

0:14:15.240 --> 0:14:17.960
<v Speaker 9>So there's speculation that he might pull a bigger lever

0:14:18.280 --> 0:14:22.440
<v Speaker 9>like income tax or national insurance. But then the Chancellor

0:14:22.520 --> 0:14:26.080
<v Speaker 9>seemed to cool on that yesterday and it would be expensive.

0:14:26.240 --> 0:14:29.880
<v Speaker 9>He's warned it could stoke inflation. So the compromise would

0:14:29.920 --> 0:14:32.800
<v Speaker 9>be to pledge to cut income tax somewhere down the

0:14:32.840 --> 0:14:36.000
<v Speaker 9>line that straight out of the Rishie Sunac playbook. Or

0:14:36.280 --> 0:14:39.600
<v Speaker 9>they could cut stamp duty, the property transaction tax that's

0:14:39.600 --> 0:14:42.640
<v Speaker 9>scene as being a less inflationary move. I'm going to

0:14:42.640 --> 0:14:45.120
<v Speaker 9>be listening for clues from the Prime Minister this morning.

0:14:45.200 --> 0:14:49.480
<v Speaker 9>He's making a speech in North London and the Chancellor

0:14:49.560 --> 0:14:52.840
<v Speaker 9>is giving a fireside chat to the CBI's countdown to

0:14:52.880 --> 0:14:56.000
<v Speaker 9>the election event. Later today, I'm hosting a panel. He's

0:14:56.040 --> 0:14:58.840
<v Speaker 9>going to be talking to the Director General Ray Newton Smith,

0:14:59.120 --> 0:15:01.840
<v Speaker 9>and he's he's going to be joining us right here

0:15:01.840 --> 0:15:05.040
<v Speaker 9>on Bloomberg Radio for an interview before that conference gets

0:15:05.040 --> 0:15:05.800
<v Speaker 9>going today. Yeah.

0:15:05.800 --> 0:15:09.120
<v Speaker 1>Absolutely, yeah, it's going to be a great morning in

0:15:09.200 --> 0:15:13.280
<v Speaker 1>terms of the next steps though on the Rwanda deportation policies,

0:15:13.320 --> 0:15:16.520
<v Speaker 1>does go back to what happened last week, the court

0:15:16.600 --> 0:15:19.080
<v Speaker 1>decision that went against the government. What happens with this

0:15:19.160 --> 0:15:20.160
<v Speaker 1>migration policy.

0:15:20.200 --> 0:15:23.080
<v Speaker 9>Now, yeah, it really was Rishi Sunac's worst week as

0:15:23.120 --> 0:15:26.440
<v Speaker 9>Prime minister. Increasingly he's on thin ice with his backbench,

0:15:26.840 --> 0:15:30.680
<v Speaker 9>so he's expected to deploy Whitehall officials to Rwanda to

0:15:30.720 --> 0:15:33.240
<v Speaker 9>try and assist with the casework. This is according to

0:15:33.240 --> 0:15:36.840
<v Speaker 9>the Telegraph. He's expected to publish a new Rwanda treaty

0:15:36.920 --> 0:15:39.160
<v Speaker 9>early this week. And this is of course that you

0:15:39.200 --> 0:15:42.960
<v Speaker 9>say after the Supreme Court ruled that deporting asylum seekers

0:15:43.000 --> 0:15:47.080
<v Speaker 9>to Rwanda was unlawful because it risked people being sent

0:15:47.160 --> 0:15:50.520
<v Speaker 9>back to their home countries. The other major event on

0:15:50.560 --> 0:15:52.800
<v Speaker 9>the docket in the UK today is the government's Food

0:15:52.840 --> 0:15:56.280
<v Speaker 9>Security Summit that's hosted with the Bill and Melinda Gates Foundation.

0:15:56.800 --> 0:16:01.680
<v Speaker 9>It's the idea to address hunger and nutrition globally, so

0:16:01.720 --> 0:16:05.080
<v Speaker 9>you're going to have retur representatives from governments, from international

0:16:05.120 --> 0:16:08.480
<v Speaker 9>aid groups, the science community and the private sector all

0:16:08.520 --> 0:16:12.400
<v Speaker 9>expected to attend. Again the Prime Minister trying to move

0:16:12.440 --> 0:16:15.520
<v Speaker 9>the spotlight away from the boat's policy, which really has

0:16:15.560 --> 0:16:17.440
<v Speaker 9>been a thorn in its side.

0:16:17.880 --> 0:16:20.640
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:16:20.680 --> 0:16:23.760
<v Speaker 2>stories making news from London to Wall Street and beyond.

0:16:24.040 --> 0:16:28.000
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0:16:35.880 --> 0:16:38.680
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0:16:43.640 --> 0:16:44.880
<v Speaker 1>I'm Caroline Hepka and.

0:16:44.880 --> 0:16:47.560
<v Speaker 2>I'm Stephen Carroll. Join us again tomorrow morning for all

0:16:47.560 --> 0:16:50.000
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0:16:50.040 --> 0:16:55.600
<v Speaker 2>on Bloomberg day Break Europe