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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to the Bloomberg

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Speaker 1: This Weekend Podcast with David Gura, Christina Raffini, and Lisa Matteo.

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Speaker 2: Thanks for joining us for today's selection of conversations from

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Speaker 2: the show.

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Speaker 3: You can listen to our favorite discussions right here on

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Speaker 3: the podcast, but also make sure to join us live

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Speaker 3: every Saturday and Sunday morning starting at seven am Easter.

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Speaker 4: We're on Bloomberg Television, Radio and the Bloomberg Business App,

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Speaker 4: bringing you unique takes and in depth interviews on news, politics,

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Speaker 4: lifestyle and culture.

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Speaker 2: On Friday, we had this pronouncement from the President on

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Speaker 2: social media saying he was going in and would be

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Speaker 2: making this decision. He went into the meeting, came out

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Speaker 2: of the meeting, and there still was not an agreement.

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Speaker 2: So Axios is reporting today that the President during that

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Speaker 2: meeting asked for several amendments to the deal negotiated between

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Speaker 2: his envoy and the Iranians.

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Speaker 3: In particular, he wants to strengthen the sections around around's

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Speaker 3: nuclear material, including details on how the US gets that

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Speaker 3: material and when. Here's what he told his daughter in

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Speaker 3: law Laura Trump on Fox News last night. This is

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Speaker 3: really a win.

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Speaker 5: Already, we've defeated the military, essentially defeated their military. I

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Speaker 5: would rather get a deal because we can open the

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Speaker 5: strait immediately upon signing. The one guarantee that I have

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Speaker 5: to have is that there will be no nuclear weapons.

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Speaker 5: They've agreed to that, and it was very interesting. They

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Speaker 5: originally said we will not develop a nuclear weapon. I said, well,

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Speaker 5: what happens if you buy a nuclear weapon? So now

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Speaker 5: it says we will not develop or in any way

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Speaker 5: purchase a military weapon. That's a big difference. So we're

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Speaker 5: getting what we want slowly, very tough negotiators. It takes

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Speaker 5: a long time.

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Speaker 2: I'm in no hurry.

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Speaker 5: I'd like to say I'm in a hurry because you

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Speaker 5: know what, ghasoline prices are going to come dumbly down.

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Speaker 5: But if you're going to be in a hurry, you're

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Speaker 5: not going to make a good deal.

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Speaker 3: We're getting what we want. According to the President of

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Speaker 3: the United States, is now as ambassor John Bolton. He

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Speaker 3: served as the former US Ambassador of the UN and

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Speaker 3: also as National Security advisor to President Trump during the

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Speaker 3: first term. Mister ambassador, great to have you with us

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Speaker 3: once again. Let me start with that line that I

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Speaker 3: repeated there coming out of that quotation from the President.

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Speaker 3: We are getting what we want at this juncture as

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Speaker 3: we live through this weekend after weekend, the President indicating

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Speaker 3: he's close to a deal, and then silence or no

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Speaker 3: codified deal at the end of a weekend. Do you

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Speaker 3: feel like the US is getting what it wants out

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Speaker 3: of these negotiations they're taking place between the US and

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Speaker 3: Iran via the pakistanis.

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Speaker 6: Well, I think Trump is getting what he wants. This

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Speaker 6: is a deal about gasoline prices at the pump in

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Speaker 6: the United States. Trump worries obviously about the price levels

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Speaker 6: people are paying. He's worried about the effect on inflation.

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Speaker 6: He's worried about the effect on the elections in November.

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Speaker 6: But this is not a deal that really ends the

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Speaker 6: war in a satisfactory way for the United States. There's

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Speaker 6: no doubt about it. If the Iranian regime is allowed

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Speaker 6: to survive, which it looks like Trump is prepared to acknowledge,

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Speaker 6: they will simply benefit from the reopening of the strait

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Speaker 6: to sell more oil, gain more revenue, and entrench themselves

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Speaker 6: in power, giving them time rebuild their nuclear program, rebuild

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Speaker 6: their military, rebuild their terrorist proxies an x period of

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Speaker 6: time will be right back where we started from.

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Speaker 2: Given that, do you think the US was in a

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Speaker 2: safer bet with Iran in the JCPOA than they will

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Speaker 2: be after this is worked out?

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Speaker 7: Not at all.

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Speaker 6: The twenty fifteen obomba in nuclear deal was a failure

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Speaker 6: on many levels. It didn't at all deal with Iran's

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Speaker 6: plutonium route to nuclear weapons in the form of the

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Speaker 6: spent fuel at the nuclear reactor at Bouscher, just completely

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Speaker 6: left that unattended, and the estimates of the amount of

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Speaker 6: spent fuel there that Iran has by nuclear proliferation experts

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Speaker 6: say they could make between two hundred and four hundred

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Speaker 6: nuclear weapons just from the plutonium route to bombs, not

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Speaker 6: the Range and Richmond route. It's a complicated issue, but

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Speaker 6: the fact is that the JCPOA was allsory and Iran's

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Speaker 6: strategic determination to get nuclear weapons has never changed.

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Speaker 2: But all those technical issues that you just points it out,

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Speaker 2: are you confident that given this negotiating team we were

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Speaker 2: just talking with our Jeff Mason, our White House correspondent,

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Speaker 2: was saying, the negotiating team is essentially Jared Kushner and

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Speaker 2: Steve Whitcoff they don't have a lot of technical experts.

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Speaker 2: Do you have any level of confidence that any of

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Speaker 2: those issues with the previous deal are going to be

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Speaker 2: fixed this time around, given how they are doing this diplomacy.

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Speaker 6: Well, none, whatever. Look, the Iranians are clearly trying to

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Speaker 6: buy time. I mean, they like to sell oil, but

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Speaker 6: this is a contest really of perseverance and determination. They

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Speaker 6: think Trump is closer to buckling than they are. They

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Speaker 6: don't care about the welfare of their people, they care

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Speaker 6: about preserving the regime. And so we're going through this

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Speaker 6: ropidope of these talks about talks. The Economists this week

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Speaker 6: has a great cartoon. It's a bunch of iatolas speaking

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Speaker 6: to two of the Pakistani mediators, and one Pakistani mediator

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Speaker 6: says to the other one tell the Americans they are

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Speaker 6: offering a framework for negotiation of the establishment of a proposal,

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Speaker 6: exploring preliminary talks about the tentative prospect of conversations, and

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Speaker 6: the other mediator says, a great plan of action. That's

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Speaker 6: what we're going through.

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Speaker 7: Now.

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Speaker 3: We're going to have you read New Yorker cartoons the

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Speaker 3: next time you're on the show. I think that Ambassadbulm

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Speaker 3: what is your prescription for what needs to happen next

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Speaker 3: we hear the President continue to threaten that something will

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Speaker 3: happen if they can come to an agreement. Of course,

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Speaker 3: what's on the table, as we understand it is more

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Speaker 3: kinetic action, more military action. Are you of the camp

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Speaker 3: as one might expect that that's something the US should

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Speaker 3: be pursuing right now. Indeed, what do you see as

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Speaker 3: the path forward here? If all that we get out

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Speaker 3: of this is a one page document with fourteen points

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Speaker 3: on it, or an agreement that isn't satisfactory.

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Speaker 6: Well, I think there are two broad options. One is

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Speaker 6: just to junk the cease fire, which I think has

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Speaker 6: been a gift from God to the Iranian regime and

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Speaker 6: go back to full scale military activity. If Trump's not

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Speaker 6: willing to do that, I think the minimal that he

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Speaker 6: should do and that we can do is open the

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Speaker 6: Gulf Arab side of the Strait of Hormuz to get

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Speaker 6: their oil and gas out into international markets. Keep the

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Speaker 6: blockade we've got in effect against Iranian exports, but using

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Speaker 6: military force I think that will be necessary help ensure

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Speaker 6: that exports from the Arab oil producing countries can get out.

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Speaker 6: We know from reporting in various publications. I won't name that.

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Speaker 6: This week, the US has been helping carriers get out.

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Speaker 6: They've not been attacked. They're turning their transponders off, going

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Speaker 6: at night, kind of sneaking through. That's not a lot

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Speaker 6: of traffic, to be sure, but I think it shows

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Speaker 6: that the Iranian threat here may be more hollow than

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Speaker 6: people think. And to alleviate the pressure on the international economy,

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Speaker 6: I think it's worth using force to open the strait.

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Speaker 6: I think it helps re establish the terns to prevent

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Speaker 6: ron from trying to turn the Straight on and off

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Speaker 6: like a light switch in the future.

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Speaker 2: So that's interesting. So one of the criticisms of how

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Speaker 2: this is going is that there's a sequencing issue. People

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Speaker 2: are saying that the US shouldn't give up its hold

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Speaker 2: on the Straight, they should keep the Straight kind of

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Speaker 2: locked down, and so they can use that on the

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Speaker 2: nuclear leverage side. You don't see the sequencing issue as

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Speaker 2: a problem here with the way this is being negotiated.

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Speaker 2: Youusally they should open the strait and then tackle the

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Speaker 2: nuclear issue.

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Speaker 6: Well, I think we should keep the blockade against Iran

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Speaker 6: and exports. So no, I don't I will understand apologies definitely, yeah, no,

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Speaker 6: But I will say whenever diplomats start talking about sequencing

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Speaker 6: as being the only problem, hold on to your wallet,

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Speaker 6: because it means there's really a bigger problem they're trying

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Speaker 6: to obscure.

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Speaker 3: I want to ask you about what's happened here is

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Speaker 3: a weapon for Iran in the future. We've talked about

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Speaker 3: this over the course of the morning as well. We're

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Speaker 3: talking about the prospects of extending this kind of squishy

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Speaker 3: ceasefire that's been in place now for a few weeks

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Speaker 3: to sixty days. It occurs to me that it's not

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Speaker 3: going to prevent Ron from doing this again in the future. Indeed,

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Speaker 3: as we look back on this conflict, I think what's

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Speaker 3: perhaps most valuable to Iran is putting this in practice

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Speaker 3: and seeing the habit that they can reak by closing

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Speaker 3: this straight to ships from all over the world, the

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Speaker 3: impact that that's had on the global economy. Do you

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Speaker 3: have any confidence here that them having done that this

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Speaker 3: will be a one and done thing, that Iron won't

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Speaker 3: return to this or try to do this again in

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Speaker 3: the future. And indeed, how does the US put in

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Speaker 3: place any sort of procedure that would keep that from

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Speaker 3: happening again.

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Speaker 6: Well, I think you bloody them badly militarily to show

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Speaker 6: they cannot close the strait of hormones cost free. Look,

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Speaker 6: anybody who reads a map can tell that the strait

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Speaker 6: was a potential problem here, So it is known in

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Speaker 6: Trump's first term. I think history will record that his

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Speaker 6: unwillingness or inability to see that and not to prepare

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Speaker 6: for it in advance, was one of the big mistakes

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Speaker 6: of the operation. We knew, for example, we had to

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Speaker 6: destroy as many of Iran's missiles as we could to

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Speaker 6: prevent them from attacking our bases, Israel, our golf ballies,

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Speaker 6: but we were late in the game and making sure

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Speaker 6: that they couldn't close the Straight of Hormuz. If they

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Speaker 6: get out of the current situation simply by diplomacy, I

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Speaker 6: think it will lock in in their minds that they

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Speaker 6: can close the straight again by diplomacy and not suffer

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Speaker 6: any real consequences. So I think re establishing de terms

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Speaker 6: here means defeating the concept that they can just, on

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Speaker 6: their say so, act as if they're master of the strait.

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Speaker 3: Just to put a fine point out, are you suggesting

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Speaker 3: to hear the commander in chief is cartographically challenged that

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Speaker 3: he didn't think this through or didn't really understand the

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Speaker 3: gravity of this when he entered into this conflict.

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Speaker 6: Look in the first term, I tried to persuade him

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Speaker 6: to adopt regime change as our objective in Iran, unsuccessfully obviously,

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Speaker 6: and we had discussions of it. Plenty of people participated.

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Speaker 6: Closing the Straight of Hormuz is always one option that

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Speaker 6: was available to Iran. I mean, we should consider that

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Speaker 6: for decades oil prices have had an implicit subsidy because

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Speaker 6: nobody did try and close the Straight of Hormoz. Now

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Speaker 6: that play has been made, nobody can ever be doubtful

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Speaker 6: that they would try and use it again in the future,

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Speaker 6: unless they thought it was just too dangerous for them

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Speaker 6: to do it, which is all that this regime in

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Speaker 6: Tehran today understands that they'd be met by force and

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Speaker 6: they'd be defeated.

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Speaker 2: I want to ask you about that regime because at

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Speaker 2: the onset of this war, the president was saying that

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Speaker 2: it was time for Iranians to rise up and overthrow

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Speaker 2: the regime and courage that to do exactly use that

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Speaker 2: as one of the justifications for taking military action. I

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Speaker 2: have several Iranian friends, some with families still in Tehran.

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Speaker 2: They've suffered under this regime. They hate this regime, but

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Speaker 2: they have also suffered under this conflict, and they do

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Speaker 2: not seem to have the capacity or at this point

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Speaker 2: the will, given what's going on, to even attempt such

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Speaker 2: a thing. Is the current regime more less the same

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Speaker 2: level of extreme as the last regime? And do you

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Speaker 2: think the president should have taken your advice and either

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Speaker 2: not done it or gone all the way through and

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Speaker 2: try to enact regime change in Iran.

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Speaker 7: Yeah.

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Speaker 6: Mistake that the administration made before the start of the wars.

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Speaker 6: They didn't contact opponents of the regime inside Iran, with

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Speaker 6: a few very minor exceptions. If Trump was determined not

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Speaker 6: to use boots on the ground, then you need all

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Speaker 6: the more to be coordinating with people inside who want

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Speaker 6: to try and bring the regime down. It doesn't mean

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Speaker 6: the people going out on the streets on the first

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Speaker 6: day of the war. This regime massacred them. In January,

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Speaker 6: they'd massacred them again. That tells you how the regime

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Speaker 6: feels about its own people. But given the destruction of

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Speaker 6: the instruments of Iranian state power that our attacks represented

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Speaker 6: by working with the opposition inside. I think we could

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Speaker 6: have gone a long way to bringing the regime down,

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Speaker 6: but we didn't consult with them. We didn't say, how

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Speaker 6: can we help you organize? What resources do you need?

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Speaker 6: You need, communications, money, weapons, What do you need That

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Speaker 6: requires planning? It probably requires time. We just didn't do anything,

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Speaker 6: and I think we're on the verge of throwing away

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Speaker 6: a great opportunity for more peace and security for us,

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Speaker 6: for the Middle East, and God knows, for the people

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Speaker 6: of Iran.

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Speaker 3: We got a minute left. I want to ask you

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Speaker 3: what confidence you have in those who advising the president

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Speaker 3: right now. I imagine you know some of the principles here.

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Speaker 3: B that's Steve Whitcoffort. You're at Kushtra, You've interacted with

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Speaker 3: them in the past. Are you confident that they have

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Speaker 3: the kind of strategic Nohower's sense to improve the situation

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Speaker 3: that exists right now?

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Speaker 6: I don't think they understand the kinds of trade offs

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Speaker 6: they're making. For example, one of the most controversial aspects

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Speaker 6: that's still very murky in this deal is whether the

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Speaker 6: United States is going to unfreeze frozen Iranate assets and

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Speaker 6: make available to them other resources. I think that would

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Speaker 6: be a huge mistake. It's one thing to providefrozen assets

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Speaker 6: to a real government in Iran that represents the people.

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Speaker 6: If we provide this government frozen assets, it will entrench

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Speaker 6: itself still further. And I don't think real estate brokers

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Speaker 6: understand that that's what's at stake here. It's not about

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Speaker 6: economic development in Iran for that money, It's about re

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Speaker 6: entrenching and enabling the regime to stay in power. That

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Speaker 6: will be very bad politically for Trump if that's what

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Speaker 6: works out.

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Speaker 3: Always good to get your perspective of Master John Bolton,

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Speaker 3: the former National Security advisor for President Trump during the

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Speaker 3: first term, former US Ambassador to the United Nations as well.

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Speaker 3: Thank you for your time on this Sunday.

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Speaker 2: And New Yorker cartoon Efficiacy.

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Speaker 8: I did enjoy that.

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Speaker 2: Thank you, sir.

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Speaker 3: Stay with us for more on Bloomberg this weekend. Right

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Speaker 3: after this, Ethlan Lost joins us now from Bunia, the

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Speaker 3: capital of the Attree Province in the Democratic Republic of Congo,

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Speaker 3: which is the epicenter of the Cibola outbreak. It's great

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Speaker 3: to speak with you, Declan. Thank you very much for

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Speaker 3: being here. We see you in that video, you're wearing

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Speaker 3: a TAIVEK suit you have PPE. It's clear that those

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Speaker 3: visiting patients in that medical facility do not have taie

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Speaker 3: x suits or PPE. Can you just talk about the

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Speaker 3: capacity of this hospital to deal with what is still

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Speaker 3: a nascent outbreak in the DRC.

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Speaker 7: That particular hospital was I would say, completely overwhelmed when

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Speaker 7: we arrived. It's just it's the main public hospital in

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Speaker 7: a town, a gold mining town called Mungualu that's about

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Speaker 7: fifty miles north of here. That's where this outbreak is

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Speaker 7: believed to have started and as long as two months ago,

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Speaker 7: and when we arrived there, frankly, the public health facilities

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Speaker 7: appeared to be in crisis. As you see, there was

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Speaker 7: only protective equipment for medical staff like doctors, but otherwise

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Speaker 7: those wards were not secured. There was very minimal care

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Speaker 7: being given to patients, and then you had relatives and

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Speaker 7: other folk just walking in and out, and they seem

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Speaker 7: to be entirely unprotected, and of course that was putting

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Speaker 7: them at great risk and of course increasing the possibility

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Speaker 7: that the hospital itself would be a source of transmission

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Speaker 7: back out into the community.

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Speaker 2: Yeah, it looks I mean, it makes sense. Now that

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Speaker 2: you're saying that's the general hospital, because it looks to

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Speaker 2: me like TV wards I've been in places. It doesn't

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Speaker 2: look like a purpose built facility, which I guess is

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Speaker 2: part of the problem. I do want to ask you

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Speaker 2: briefly how you got there, And then David was pointing

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Speaker 2: out to me earlier this morning that you said that

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Speaker 2: you hadn't really planned on going in to this extent.

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Speaker 2: Why did you change your mind once you were on

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Speaker 2: the ground.

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Speaker 7: We were there for several days. We'd spoken with the

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Speaker 7: with the medical staff, got their permission, we got the

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Speaker 7: permission from the patients to enter that ward, and you know,

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Speaker 7: I just felt it was very important to witness firsthand

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Speaker 7: and to show the reality of care in the Congo,

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Speaker 7: particularly in this frontline area here in the main city. Bunye,

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Speaker 7: the head of the who has been here the last

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Speaker 7: couple of days, Doctor tedros gabiesis there. You know, AID

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Speaker 7: agencies are present here. There's certainly some supplies coming in now.

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Speaker 7: Is that the opening of a new isolation ward in

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Speaker 7: the city this morning? But up there in those rural

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Speaker 7: areas where the greatest number of cases are found, for

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Speaker 7: a whole combination of factors. It's extremely very little aid

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Speaker 7: has reached there so far, and you know they're in

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Speaker 7: a crisis situation, which of course is bad, terrible news

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Speaker 7: for the people who are already sick, but it also

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Speaker 7: means that the spread of this virus is frankly unknown

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Speaker 7: and probably still uncontained.

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Speaker 3: Dechlan something we've spoken about with Jeremy Connandyke, public health

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Speaker 3: official from the US, with Tom Frieden, former head of

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Speaker 3: the CDC, as well as just about the cultural difficulties

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Speaker 3: here conveying to the population the seriousness of this outbreak,

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Speaker 3: and you point to something very worrisome in your piece.

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Speaker 3: You say many refuse to accept the virus was real.

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Speaker 3: You continue, Some said the outbreak was a money making

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Speaker 3: plot concocted by Congolese doctors and Ford aid workers. Others

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Speaker 3: call it a curse. As we talk about the deficit

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Speaker 3: in the health response to this crisis, how acute is

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Speaker 3: this problem in particular just conveying to the population how

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Speaker 3: dangerous this is, and trying to explain in light of

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Speaker 3: those the sense of what's happening here that that in

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Speaker 3: fact is not the case. This is a very serious virus.

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Speaker 7: It's an absolutely crucial point when you speak to aid workers. Second,

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Speaker 7: the first thing they'll tell you is they need equipment.

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Speaker 7: The second thing they'll say they need is education and

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Speaker 7: engagement with these communities. Some of these communities are extremely

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Speaker 7: hostile to the virus. It's not just sorry to the

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Speaker 7: idea of the virus. It's not just that they don't

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Speaker 7: believe it exists. They have carried out attacks against hospitals.

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Speaker 7: The hospital that I visited had an isolation ward that

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Speaker 7: was under construction burned down. It came under attack the

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Speaker 7: first night we were there from a group of over

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Speaker 7: one hundred people who wanted to retrieve the body of

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Speaker 7: a local spiritual leader who had just died of abola.

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Speaker 7: And what that all gets to is the whole practice

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Speaker 7: of funerals. I think, as you noted, you know, the

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Speaker 7: body of a person. A person is most contagious at

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Speaker 7: the last stages of the disease and after they have died,

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Speaker 7: So how the dead or buried is absolutely crucial. Otherwise

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Speaker 7: funerals can turn into super spreader events. So you see

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Speaker 7: these really courageous local health workers and Red Cross officials

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Speaker 7: who are doing their best to educate people to try

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Speaker 7: and carry out safe burials of bodies, but because frankly,

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Speaker 7: the effort is so far behind the curve. As I said,

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Speaker 7: this outbreak is thought to have started probably six weeks

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Speaker 7: maybe two months ago, but was only declared discovered and

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Speaker 7: declared two weeks ago. So the entire effort is far

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Speaker 7: behind the curve, which means there's very little reliable data

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Speaker 7: about how much it has spread, and that's only feeding

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Speaker 7: into this suspicion among local communities who, as far as

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Speaker 7: they're concerned, to see people going into hospitals just to die.

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Speaker 2: Deethan, I also want to ask you, I want to

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Speaker 2: focus on something you talk about, because you report that

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Speaker 2: the hospital has no food or water to give to

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Speaker 2: ailing patients. This is consistently an issue with health care

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Speaker 2: in places like this. I know when you're giving HIV medication,

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Speaker 2: when you're giving tuberculos and the medication, when you're giving

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Speaker 2: supportive care. That supportive care can't work if your patient

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Speaker 2: is malnourished or you don't have clean water, And it's

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Speaker 2: often the part of the response that it seems to

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Speaker 2: get lost in the shuffle. Are there any efforts being

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Speaker 2: made to address that piece of this? What is needed

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Speaker 2: and where do you think it should be coming from.

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Speaker 7: Look very I mean, certainly the World Food Program have

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Speaker 7: mobilized in this area. They're mounting feeding programs and so on.

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Speaker 7: But you know, there are two issues with that. Firstly,

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Speaker 7: as you say, you know, in a hospital like this,

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Speaker 7: they just don't generally for normal treatment to provide food

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Speaker 7: or water.

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Speaker 2: The families are generally responsible for bringing food.

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Speaker 3: To family.

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Speaker 7: They come in, they provide the food. Now that is

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Speaker 7: providing a biosecurity hazard in this environment because family members

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Speaker 7: come in unprotected to provide food to people and run

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Speaker 7: a high risk of being contaminated themselves. The other issue

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Speaker 7: is in terms of people's ability to fight this virus.

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Speaker 7: Because this virus is a it's a rare virus that

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Speaker 7: as yet has no vaccine and no cure. The only

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Speaker 7: way to treat it really is to bolster the defenses

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Speaker 7: of a person who is sick in order that their

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Speaker 7: own body can fight that virus. And obviously, food, water,

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Speaker 7: IV drips, all of these very basic you know, not

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Speaker 7: even medical treatments, but certainly basic things to bolster their

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Speaker 7: immune system are key. And that's why if the medical

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Speaker 7: authorities are going to successfully start to push back this

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Speaker 7: wave of infections, they're going to have to get those

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Speaker 7: pieces in places as well. Becha.

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Speaker 3: Let me ask you lastly, just about what you heard

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Speaker 3: from that Condolese doctor with whom you spent the most time.

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Speaker 3: And I think in circumstances like this, past outbreaks, the

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Speaker 3: frustration and exhaust are palpable among the medical staff were

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Speaker 3: in facilities like this one. How would you assess his

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Speaker 3: level of optimism that this is going to get under control,

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Speaker 3: and indeed, what does he need or what does he

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Speaker 3: say that he needs going forward.

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Speaker 7: I think firstly he just wanted protective equipment for the staff. Secondly,

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Speaker 7: he wanted to be able to secure that hospital so

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Speaker 7: that they could work in a safe environment. You know,

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Speaker 7: when I met that man in the war, the young doctor,

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Speaker 7: you know, he was just not just exhausted. He'd just

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Speaker 7: come off a night shift where someone had died during

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Speaker 7: the night, a lady fell into a coma and died.

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Speaker 7: But you know, he really felt like he was at

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Speaker 7: the end of his tether. He said, we were almost

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Speaker 7: two weeks into this crisis and this is all we have.

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Speaker 7: How is it possible that both my own government but

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Speaker 7: also this international system that has you know, deployed to

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Speaker 7: so many of these abula emergencies. He was basically saying,

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Speaker 7: why is that not here? And that kind of frustration

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Speaker 7: is palpable among many of the health profession and healthcare

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Speaker 7: professionals you meet in some of these frontline areas.

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Speaker 2: Declan Walsh, New York Times Chief Africa Correspondent, joining us

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Speaker 2: from the DARC, thank you so much for taking the time.

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Speaker 2: Thank you to you and your crew, and frankly, whatever

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Speaker 2: editor is signed off and allows you to do this

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Speaker 2: on the ground reporting, which we know is getting harder

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Speaker 2: and harder to do. So thank you, truly, thank you

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Speaker 2: to all of you this morning. Stay with us for

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Speaker 2: more on Bloomberg this weekend right after this. There are

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Speaker 2: goals in the tech sector, and as more companies incorporate

438
00:22:40,760 --> 00:22:43,119
Speaker 2: AI into their day to day work, some of them

439
00:22:43,160 --> 00:22:45,879
Speaker 2: are coming to realize that those goals, if using AI

440
00:22:45,960 --> 00:22:47,880
Speaker 2: to pursue them, come at a bit of a price.

441
00:22:48,200 --> 00:22:51,520
Speaker 2: Microsoft cancels most of its cloud code licenses, and Uber

442
00:22:51,640 --> 00:22:55,080
Speaker 2: Coeo said AI costs, excuse me, are getting quote harder

443
00:22:55,119 --> 00:22:55,840
Speaker 2: to justify that.

444
00:22:55,880 --> 00:22:58,879
Speaker 3: Scott Amconda Wrights Innovation doesn't only need the technology but

445
00:22:58,880 --> 00:23:02,000
Speaker 3: also the physical infant structure to support the product. It

446
00:23:02,080 --> 00:23:04,200
Speaker 3: as a calumnist for Bloomberg Opinion and a lecturer at the

447
00:23:04,240 --> 00:23:06,120
Speaker 3: Ale School of Management. He joins us now on set

448
00:23:06,119 --> 00:23:09,400
Speaker 3: here in New York. Wonderful to see you. Let's talk

449
00:23:09,440 --> 00:23:12,480
Speaker 3: about this, the effervescence, the enthusiasm surrounding a I meeting

450
00:23:12,520 --> 00:23:14,800
Speaker 3: the reality of having to pay for it. And there

451
00:23:14,840 --> 00:23:17,560
Speaker 3: are extreme things that I think of the amount of money,

452
00:23:17,600 --> 00:23:20,040
Speaker 3: for instance, that Meta has poured into this. Let's begun

453
00:23:20,080 --> 00:23:23,160
Speaker 3: to retrench some of that here. How widely spread is that?

454
00:23:23,320 --> 00:23:25,760
Speaker 3: Are a lot of companies kind of reckoning with what

455
00:23:25,880 --> 00:23:27,240
Speaker 3: is this going to be and is it worth the

456
00:23:27,280 --> 00:23:28,400
Speaker 3: investment at this point in time?

457
00:23:28,560 --> 00:23:32,639
Speaker 9: So great to be here, so yes, but there's a

458
00:23:32,680 --> 00:23:35,639
Speaker 9: nuance here, right. So the company there's a company I

459
00:23:35,720 --> 00:23:38,119
Speaker 9: was talking to the CEO yesterday. He said, if Claude

460
00:23:38,200 --> 00:23:41,560
Speaker 9: charged us ten times what it does right now, he said,

461
00:23:41,600 --> 00:23:43,080
Speaker 9: I would pay it and I wouldn't hesitate.

462
00:23:43,040 --> 00:23:44,440
Speaker 8: He's like, I wouldn't even think twice.

463
00:23:44,520 --> 00:23:46,040
Speaker 2: So what kind of company is that? And what is

464
00:23:46,080 --> 00:23:46,640
Speaker 2: the application?

465
00:23:46,760 --> 00:23:46,879
Speaker 6: Right?

466
00:23:46,920 --> 00:23:48,040
Speaker 8: It's a small healthcare company.

467
00:23:48,119 --> 00:23:50,439
Speaker 9: So like so there's there's that's there's a big difference

468
00:23:50,440 --> 00:23:53,199
Speaker 9: when you have ten thousand engineers who are running you know,

469
00:23:53,400 --> 00:23:56,200
Speaker 9: two thousand dollars per head if you go ten x, right,

470
00:23:56,400 --> 00:23:59,760
Speaker 9: things change when you're at that scale. But I think

471
00:23:59,800 --> 00:24:02,280
Speaker 9: what which really what driving this is it's really interesting

472
00:24:02,320 --> 00:24:05,200
Speaker 9: that the debate on AI is kind of missing something

473
00:24:05,200 --> 00:24:07,040
Speaker 9: pretty big, right, and that that, I think is what

474
00:24:07,080 --> 00:24:09,680
Speaker 9: this cost thing is starting to drive us towards. Because

475
00:24:09,680 --> 00:24:12,280
Speaker 9: you see they're the boosters and you know, I used

476
00:24:12,320 --> 00:24:14,960
Speaker 9: to code. The ability to talk to my computer and

477
00:24:14,960 --> 00:24:18,600
Speaker 9: have it do something without is genuinely it feels miraculous.

478
00:24:19,119 --> 00:24:19,800
Speaker 8: It's astonishing.

479
00:24:20,280 --> 00:24:21,840
Speaker 9: And then there are people, some of them people, people

480
00:24:21,840 --> 00:24:24,600
Speaker 9: with enormous scientific and technical credibility, who say this is

481
00:24:24,640 --> 00:24:26,199
Speaker 9: not going to come together the way you think, like

482
00:24:26,200 --> 00:24:28,639
Speaker 9: this technology doesn't have the potential you think there's height.

483
00:24:28,680 --> 00:24:31,119
Speaker 8: Those are also serious people you shouldn't dismiss the.

484
00:24:31,359 --> 00:24:32,959
Speaker 3: Humorous per se, but skeptics of this.

485
00:24:33,080 --> 00:24:35,600
Speaker 9: Yeah, there's a third scenario which it just strikes me

486
00:24:35,640 --> 00:24:38,879
Speaker 9: no one talks about, which is you can have a revolutionary,

487
00:24:38,920 --> 00:24:43,159
Speaker 9: world changing, astonishing technology that doesn't end up making anyone

488
00:24:43,160 --> 00:24:47,399
Speaker 9: any money. And this is the thing that people I

489
00:24:47,400 --> 00:24:48,600
Speaker 9: don't see people talking about.

490
00:24:48,760 --> 00:24:51,640
Speaker 8: I don't give you two examples. The airline. No one

491
00:24:51,640 --> 00:24:55,320
Speaker 8: would deny that the airline industry, right, just change the world. Right,

492
00:24:55,440 --> 00:24:57,920
Speaker 8: you can go anywhere, perfect safety and ep nuts on

493
00:24:57,960 --> 00:25:00,400
Speaker 8: the way. Just remarkable, more.

494
00:25:00,320 --> 00:25:02,720
Speaker 2: Of a Pretzel's gown myself. But I'm going to continue.

495
00:25:02,760 --> 00:25:05,720
Speaker 9: But you know, Warren Buffett famously said that the airlines

496
00:25:05,760 --> 00:25:08,919
Speaker 9: were such a machine for incinerating capital that if you know,

497
00:25:08,920 --> 00:25:11,679
Speaker 9: if an enterprising if an enterprising capitalist had been at

498
00:25:11,720 --> 00:25:13,800
Speaker 9: Kitty Hawk when Orville took his flight, he should have

499
00:25:13,800 --> 00:25:17,800
Speaker 9: shot the thing down, right, Like, No, you can change

500
00:25:17,840 --> 00:25:20,720
Speaker 9: the world and not make money. In biotech, you saw

501
00:25:20,880 --> 00:25:23,800
Speaker 9: sort of, you know, the biotech revolution starting nineteen seventy five.

502
00:25:24,080 --> 00:25:26,000
Speaker 9: So from nineteen seventy five to two thousand and four,

503
00:25:26,080 --> 00:25:29,200
Speaker 9: Gary Pizano at Harvard Business School showed that the biotech

504
00:25:29,320 --> 00:25:34,800
Speaker 9: industry might maybe have made money in one year, right,

505
00:25:34,840 --> 00:25:37,280
Speaker 9: and for that entire time it was essentially just a

506
00:25:37,320 --> 00:25:39,280
Speaker 9: furnace for money. You poured money in, and you know,

507
00:25:39,359 --> 00:25:42,959
Speaker 9: drugs came out, live, came save, but people didn't make money. Right,

508
00:25:43,000 --> 00:25:48,160
Speaker 9: And you've got huge capital investments, lots of uncertainty, long

509
00:25:48,200 --> 00:25:51,040
Speaker 9: delays of before payoff, enormous costs.

510
00:25:51,520 --> 00:25:52,840
Speaker 8: Oh and the.

511
00:25:52,800 --> 00:25:55,520
Speaker 9: Problem that you know that AI is dealing with that

512
00:25:55,600 --> 00:25:59,320
Speaker 9: biotech didn't is the open Weights labs out of China

513
00:25:59,359 --> 00:26:03,400
Speaker 9: and the last benchmarks are four to eight months behind.

514
00:26:04,040 --> 00:26:07,679
Speaker 8: Wow, that's not much of a mote, it's right. Yeah.

515
00:26:07,800 --> 00:26:09,840
Speaker 2: I also want to ask you talk a lot about

516
00:26:10,160 --> 00:26:12,760
Speaker 2: the physical end of this and the scarcity of compute

517
00:26:12,800 --> 00:26:15,119
Speaker 2: and these data centers that have to go in and

518
00:26:15,160 --> 00:26:17,880
Speaker 2: you make a comparison to Edison when they were starting.

519
00:26:18,119 --> 00:26:21,080
Speaker 9: Please explain that, right, So, when Edison built the light bulb,

520
00:26:21,119 --> 00:26:23,119
Speaker 9: you know, this is so iconic that we have a

521
00:26:23,119 --> 00:26:25,520
Speaker 9: bright idea cartoonist sketches a light bulb over our head.

522
00:26:25,680 --> 00:26:26,760
Speaker 2: David gets more of those than I.

523
00:26:27,280 --> 00:26:28,960
Speaker 8: It's fine, so fantastic.

524
00:26:29,000 --> 00:26:30,880
Speaker 9: You know, my wife says that minds are very mind

525
00:26:30,920 --> 00:26:32,080
Speaker 9: or very dim, but that's fine, Like.

526
00:26:32,080 --> 00:26:33,800
Speaker 2: Yeah, you know what, it's there and that's what matters.

527
00:26:33,880 --> 00:26:36,440
Speaker 8: That's the key. But he did.

528
00:26:36,600 --> 00:26:39,560
Speaker 9: When the first Edison generator plant rolled out in New

529
00:26:39,640 --> 00:26:42,199
Speaker 9: York City and I started, they were serving something like

530
00:26:42,280 --> 00:26:45,679
Speaker 9: four hundred light bulbs. Right, So you can have an

531
00:26:45,680 --> 00:26:49,040
Speaker 9: astonishing technology, but you need a network and ecosystem of

532
00:26:49,080 --> 00:26:52,000
Speaker 9: other enabling technologies that have to build up to do that.

533
00:26:52,200 --> 00:26:54,879
Speaker 9: In his case, it was generators and wiring and you know,

534
00:26:55,080 --> 00:26:58,879
Speaker 9: everything involved in a power transmission system for AI. So

535
00:26:59,119 --> 00:27:00,760
Speaker 9: we are used to and I think a lot of

536
00:27:00,800 --> 00:27:03,200
Speaker 9: the sort of especially the vcs who went into AI,

537
00:27:03,320 --> 00:27:05,159
Speaker 9: is so heavy. They're kind of used to investing in

538
00:27:05,200 --> 00:27:08,479
Speaker 9: SaaS companies, right, where scaling costs zero and the marginal

539
00:27:08,440 --> 00:27:12,159
Speaker 9: cost are production is zero. But AI is profoundly quite different,

540
00:27:12,240 --> 00:27:15,840
Speaker 9: right because you don't see as users go up the

541
00:27:15,880 --> 00:27:17,719
Speaker 9: marginal cost going down that much.

542
00:27:18,840 --> 00:27:20,320
Speaker 8: Almostly it says the same, but it doesn't drop.

543
00:27:20,640 --> 00:27:22,879
Speaker 9: It isn't a zero, right, Like just these things are

544
00:27:22,920 --> 00:27:26,480
Speaker 9: really expensive to run, and so the scaling of this

545
00:27:26,800 --> 00:27:30,359
Speaker 9: involves capital expenditures and physical construction and you know, simple

546
00:27:30,359 --> 00:27:33,720
Speaker 9: stuff pouring concrete, wiring buildings.

547
00:27:34,400 --> 00:27:36,360
Speaker 8: Those things are hard, right, They're.

548
00:27:36,200 --> 00:27:39,840
Speaker 9: Not like dumping code onto the Internet, and you need

549
00:27:39,880 --> 00:27:42,320
Speaker 9: plumbers and electricians. And you know, my joke about it was,

550
00:27:42,359 --> 00:27:44,560
Speaker 9: it's the return of the jocks, right, it's the the

551
00:27:44,680 --> 00:27:48,600
Speaker 9: guys who actually and the women who do physical labor

552
00:27:49,160 --> 00:27:53,000
Speaker 9: are becoming constraint here. That is unlike most things that

553
00:27:53,000 --> 00:27:55,640
Speaker 9: the software you know that this world has seen before.

554
00:27:55,680 --> 00:27:57,400
Speaker 2: And a lot of those trades are understaffed as well

555
00:27:57,400 --> 00:27:57,960
Speaker 2: at the moment.

556
00:27:58,040 --> 00:27:59,880
Speaker 3: Yeah, let me look at the other side of that. Coin,

557
00:28:00,119 --> 00:28:01,760
Speaker 3: and I think you're talking about how this might not

558
00:28:01,800 --> 00:28:03,760
Speaker 3: make money, might not lead to the kind of changes

559
00:28:03,800 --> 00:28:06,400
Speaker 3: a lot of proponents are talking about here. It does

560
00:28:06,440 --> 00:28:08,320
Speaker 3: strike me the fact that this does have this whole

561
00:28:08,320 --> 00:28:11,879
Speaker 3: complementary infrastructure component to it may make us less willing

562
00:28:11,920 --> 00:28:13,880
Speaker 3: to see the fact that it might not make money,

563
00:28:13,880 --> 00:28:15,959
Speaker 3: that this is seen as not just something that's going

564
00:28:15,960 --> 00:28:19,760
Speaker 3: to improve the economy of information technology financial services, but

565
00:28:19,880 --> 00:28:22,280
Speaker 3: could have this wider spread effect on the US economy.

566
00:28:22,359 --> 00:28:23,880
Speaker 3: Do you think that's true? Is it clouding our sense?

567
00:28:23,920 --> 00:28:26,840
Speaker 3: Are we willing to pony up and pay for all

568
00:28:26,880 --> 00:28:29,760
Speaker 3: of this fiscal construction because it seems like it's providing

569
00:28:29,760 --> 00:28:31,360
Speaker 3: these wider benefits to the country.

570
00:28:31,040 --> 00:28:33,440
Speaker 9: So I think that cuts both ways, right, So it

571
00:28:33,520 --> 00:28:35,640
Speaker 9: is you know, if you are an electrician, right now,

572
00:28:35,760 --> 00:28:38,440
Speaker 9: this is awesome, Like, this is fantastic. This is the

573
00:28:38,480 --> 00:28:39,840
Speaker 9: best thing that's happened to you in a long time.

574
00:28:39,880 --> 00:28:42,400
Speaker 9: And since the Nited States a sort of apparently decided

575
00:28:42,400 --> 00:28:44,040
Speaker 9: as a matter of national policy, we're not going to

576
00:28:44,040 --> 00:28:45,720
Speaker 9: build housing and at least we're.

577
00:28:45,560 --> 00:28:46,520
Speaker 3: Building real data center.

578
00:28:47,240 --> 00:28:49,400
Speaker 8: At least we'll build something that's great.

579
00:28:49,800 --> 00:28:51,760
Speaker 9: But of course the flip side of that is data

580
00:28:51,760 --> 00:28:55,920
Speaker 9: centers are incredibly unpopular or they cause political pushback everywhere

581
00:28:56,000 --> 00:29:00,360
Speaker 9: they go. Large portions of Silicon Valley appear to opted

582
00:29:00,400 --> 00:29:04,520
Speaker 9: the pr strategy of James Bond villains, and there is

583
00:29:04,560 --> 00:29:07,600
Speaker 9: this kind of I think, you know, in some cases,

584
00:29:07,640 --> 00:29:09,000
Speaker 9: I'm not sure this is about the data center as

585
00:29:09,040 --> 00:29:11,360
Speaker 9: much as just an incohate rage of pushback and this

586
00:29:11,400 --> 00:29:13,280
Speaker 9: is a thing we can we can go after, right

587
00:29:13,800 --> 00:29:17,480
Speaker 9: And so when you're building this kind of infrastructure, you

588
00:29:17,560 --> 00:29:21,080
Speaker 9: need the people there to say yes. And right now, America,

589
00:29:21,120 --> 00:29:24,120
Speaker 9: despite all these benefits, and I mean Louden County, Virginia,

590
00:29:24,160 --> 00:29:25,320
Speaker 9: oh my gosh just said.

591
00:29:25,120 --> 00:29:27,880
Speaker 3: That they're telling with stone without hitting a data center.

592
00:29:28,000 --> 00:29:29,600
Speaker 9: I grew up in Rockville, Maryland, so this is like

593
00:29:29,640 --> 00:29:32,520
Speaker 9: home for me. Right, Sixty percent of their tax revenues

594
00:29:32,560 --> 00:29:34,600
Speaker 9: are going to be coming from data centers, So you

595
00:29:34,640 --> 00:29:37,280
Speaker 9: would think this would be great, and yet instead you're

596
00:29:37,280 --> 00:29:39,800
Speaker 9: seeing this huge pushback. I think this is another case

597
00:29:39,840 --> 00:29:42,440
Speaker 9: where the industry's norms that it's that have evolved over

598
00:29:42,440 --> 00:29:45,160
Speaker 9: the last generation kind of need to yield to the

599
00:29:45,200 --> 00:29:51,040
Speaker 9: fact that saying having a public relations campaign where we're

600
00:29:51,160 --> 00:29:52,760
Speaker 9: going to take away your.

601
00:29:52,680 --> 00:29:54,960
Speaker 8: Job and possibly end there's end of humanity.

602
00:29:57,800 --> 00:30:01,680
Speaker 2: Yeah, there's another PRL meant that you highlight in your

603
00:30:01,720 --> 00:30:05,080
Speaker 2: latest column, and I wasn't even that aware of this,

604
00:30:05,200 --> 00:30:08,280
Speaker 2: And that's you talk about where they're choosing to put

605
00:30:08,320 --> 00:30:11,120
Speaker 2: some of this infrastructure, and it's in places that feels

606
00:30:11,200 --> 00:30:15,480
Speaker 2: a bit exploitive, like especially there's this colossus one is

607
00:30:15,520 --> 00:30:17,960
Speaker 2: going in largely without air permits, in a largely black

608
00:30:18,000 --> 00:30:20,880
Speaker 2: neighborhood of Memphis. You talk about, So talk us through

609
00:30:21,120 --> 00:30:23,200
Speaker 2: why those places and what that's doing.

610
00:30:23,440 --> 00:30:25,840
Speaker 9: I mean, those places have less political power to push

611
00:30:25,920 --> 00:30:28,080
Speaker 9: back when the pollution gets so bad. Right, and so

612
00:30:28,200 --> 00:30:31,240
Speaker 9: if you are an under enormous pressure to scale up

613
00:30:31,280 --> 00:30:33,680
Speaker 9: your compute and you decide that the way to do

614
00:30:33,720 --> 00:30:36,560
Speaker 9: that is to cut corners, and given all the obstacles

615
00:30:36,600 --> 00:30:39,160
Speaker 9: that we've just talked about, you can see why the

616
00:30:39,160 --> 00:30:40,920
Speaker 9: way you might decide to do that is to cut corners.

617
00:30:41,400 --> 00:30:43,560
Speaker 9: It's easiest to do it in places where people have

618
00:30:43,640 --> 00:30:46,200
Speaker 9: the least power to complain. If you do that in

619
00:30:46,440 --> 00:30:49,360
Speaker 9: you know, Malibu, it's.

620
00:30:49,240 --> 00:30:50,080
Speaker 8: Not going to go down with.

621
00:30:52,520 --> 00:30:52,760
Speaker 7: Mali.

622
00:30:53,080 --> 00:30:55,200
Speaker 2: We also had a lot of time even in Laden County,

623
00:30:55,200 --> 00:30:57,239
Speaker 2: Fladden County didn't want those data centers. You can bet

624
00:30:57,280 --> 00:30:58,960
Speaker 2: they wouldn't be going in there, that's right.

625
00:30:59,520 --> 00:31:01,600
Speaker 3: I would ask, how are you thinking about the effect

626
00:31:01,600 --> 00:31:03,080
Speaker 3: this is having on the labor market? So you mentioned

627
00:31:03,080 --> 00:31:04,560
Speaker 3: that Pitch is going to take away all the judge

628
00:31:04,600 --> 00:31:07,120
Speaker 3: opened up my computer on Friday, Touriston Slock of Apollo

629
00:31:07,160 --> 00:31:09,560
Speaker 3: had this note, there is no negative effect on the

630
00:31:09,600 --> 00:31:11,600
Speaker 3: labor market because of AI. We're not seeing jobs lost

631
00:31:11,600 --> 00:31:14,160
Speaker 3: as a result of it. Yet, how are you thinking

632
00:31:14,200 --> 00:31:16,760
Speaker 3: about that? Putting aside again all of the kind of

633
00:31:16,760 --> 00:31:20,200
Speaker 3: ideological perspectives on where this might lead to eventually, do

634
00:31:20,240 --> 00:31:22,040
Speaker 3: you think it is having an effect? Is it changing

635
00:31:22,040 --> 00:31:25,920
Speaker 3: how companies, the CEOs of whom you talk regularly, the

636
00:31:25,960 --> 00:31:27,440
Speaker 3: way that they hire, the way that they fire, the

637
00:31:27,440 --> 00:31:28,800
Speaker 3: way that they staff their companies?

638
00:31:28,880 --> 00:31:29,160
Speaker 7: Yet?

639
00:31:30,240 --> 00:31:32,600
Speaker 9: Yeah, but it's what I'd say, is what it's showing

640
00:31:32,680 --> 00:31:34,480
Speaker 9: up in is it's two ways.

641
00:31:34,640 --> 00:31:34,800
Speaker 3: Right.

642
00:31:35,080 --> 00:31:37,480
Speaker 9: It's less firing, although we're seeing some of that, and

643
00:31:37,520 --> 00:31:39,160
Speaker 9: a lot of the firing that is happening is less.

644
00:31:39,160 --> 00:31:41,560
Speaker 9: I think about AI enabling productivity and more people kind

645
00:31:41,560 --> 00:31:44,320
Speaker 9: of scrambling for cash to sort of try and chip

646
00:31:44,320 --> 00:31:48,560
Speaker 9: away at these dragantic capital expertures. But it's making it less.

647
00:31:48,640 --> 00:31:50,560
Speaker 9: I think people are becoming a more reluctant to hire

648
00:31:50,840 --> 00:31:54,360
Speaker 9: just because of the uncertainty. But I think the deeper

649
00:31:54,400 --> 00:31:57,720
Speaker 9: and more profound effect is about fear. Right. You saw,

650
00:31:57,960 --> 00:32:00,840
Speaker 9: especially during COVID, you saw the balance of power between

651
00:32:00,880 --> 00:32:03,760
Speaker 9: companies and developers and people who have these skill sets

652
00:32:04,040 --> 00:32:06,920
Speaker 9: swung really hard yes in.

653
00:32:06,880 --> 00:32:07,640
Speaker 8: Favor of labor.

654
00:32:08,160 --> 00:32:12,000
Speaker 9: What this does is give is it creates fear even

655
00:32:12,040 --> 00:32:14,600
Speaker 9: if I'm not being replaced, I might be replaced, which

656
00:32:14,600 --> 00:32:16,480
Speaker 9: makes me a lot more reluctant to ask for a

657
00:32:16,560 --> 00:32:18,560
Speaker 9: raise or say I should have a say in the

658
00:32:18,600 --> 00:32:21,120
Speaker 9: way the companies are governed. And I think a lot

659
00:32:21,160 --> 00:32:24,320
Speaker 9: of CEOs, especially founder CEOs, for whom their company is

660
00:32:24,360 --> 00:32:26,520
Speaker 9: their identity, like, I'm not sure I want to give

661
00:32:26,560 --> 00:32:27,280
Speaker 9: these people a say.

662
00:32:27,320 --> 00:32:30,840
Speaker 2: And how We've only got about a minute left, and

663
00:32:30,880 --> 00:32:33,680
Speaker 2: I'm going to ask the question that I always ask.

664
00:32:34,040 --> 00:32:35,920
Speaker 2: I'm a bit of a skeptic about all this. One

665
00:32:35,960 --> 00:32:37,880
Speaker 2: of the reasons is you talk about all this building,

666
00:32:37,960 --> 00:32:40,160
Speaker 2: all this infrastructure, and a lot of that is being

667
00:32:40,160 --> 00:32:42,320
Speaker 2: funded by credit and a lot of credit and a

668
00:32:42,320 --> 00:32:45,360
Speaker 2: lot of circular credit. And for millennials who've lived through

669
00:32:45,440 --> 00:32:48,160
Speaker 2: multiple crashes, I just feel like this is deja vu

670
00:32:48,240 --> 00:32:50,600
Speaker 2: all over again. What is your take Is this a bubble?

671
00:32:50,720 --> 00:32:54,080
Speaker 2: Is this sustainable? Is it durable? Is it rippling? If

672
00:32:54,120 --> 00:32:54,640
Speaker 2: not popping?

673
00:32:54,680 --> 00:32:57,640
Speaker 9: Where are we You can have a bubble and still

674
00:32:57,680 --> 00:33:00,040
Speaker 9: have a real technology, And that I think is.

675
00:33:00,040 --> 00:33:01,560
Speaker 8: That's sort of to go back to where we were.

676
00:33:02,080 --> 00:33:03,680
Speaker 8: That's the point that people are missing.

677
00:33:03,800 --> 00:33:04,040
Speaker 7: Right.

678
00:33:04,120 --> 00:33:06,239
Speaker 9: You can say these valuations are in You can look

679
00:33:06,280 --> 00:33:09,040
Speaker 9: at I mean SpaceX, which is apparently now an AI company.

680
00:33:08,720 --> 00:33:09,240
Speaker 7: And say.

681
00:33:10,640 --> 00:33:15,120
Speaker 9: You're one point seventy five trillion dollars for these financials

682
00:33:15,120 --> 00:33:17,640
Speaker 9: and say, if that's not a bubble, I don't you know,

683
00:33:18,000 --> 00:33:19,560
Speaker 9: I don't know what is. I don't know what the

684
00:33:19,600 --> 00:33:20,880
Speaker 9: GDP of Mars is going to be.

685
00:33:21,040 --> 00:33:22,600
Speaker 2: No, we've been talking about there's a meme going around

686
00:33:22,600 --> 00:33:25,680
Speaker 2: that Navidia is worth more than all the arable land

687
00:33:25,720 --> 00:33:28,040
Speaker 2: in Australia, right, I mean at some point that just

688
00:33:28,080 --> 00:33:28,880
Speaker 2: seems ridiculous.

689
00:33:29,000 --> 00:33:30,840
Speaker 9: Yeah, and so, but at the same time you can

690
00:33:30,840 --> 00:33:34,240
Speaker 9: say that twenty thirty years from now, this was a bubble,

691
00:33:34,280 --> 00:33:37,400
Speaker 9: but something came out of it that was really a powerful,

692
00:33:37,560 --> 00:33:40,480
Speaker 9: powerful That won't be a lot of consolation if you

693
00:33:40,560 --> 00:33:41,920
Speaker 9: lose your shirt on debth On.

694
00:33:42,680 --> 00:33:43,720
Speaker 8: In the meantime, we.

695
00:33:43,640 --> 00:33:45,280
Speaker 3: Will leave it there. On that note, kind of Thank

696
00:33:45,280 --> 00:33:46,840
Speaker 3: you very much. Great to see you lecture at the

697
00:33:46,880 --> 00:33:49,320
Speaker 3: Old School of Management, of course, columnist from Bloomberg Opinion.

698
00:33:50,680 --> 00:33:54,360
Speaker 4: Stay with us for more on Bloomberg this weekend right

699
00:33:54,400 --> 00:33:54,880
Speaker 4: after this.

700
00:34:07,440 --> 00:34:10,120
Speaker 2: All right, so, right now, the alcohol industry is taking

701
00:34:10,160 --> 00:34:12,840
Speaker 2: a hit, with beer, wine and spirit makers losing a

702
00:34:12,880 --> 00:34:16,160
Speaker 2: combined eight hundred and thirty billion in market share from

703
00:34:16,200 --> 00:34:17,799
Speaker 2: twenty twenty one to twenty twenty five.

704
00:34:18,000 --> 00:34:20,160
Speaker 4: Yeah, and it turns out gen z ers they're actually

705
00:34:20,160 --> 00:34:22,720
Speaker 4: looking to barbells over barstools.

706
00:34:22,920 --> 00:34:24,359
Speaker 2: Get it's okay for.

707
00:34:24,320 --> 00:34:28,600
Speaker 4: Their social for their social outlets. Bloomberg pursuits journalist Sam

708
00:34:28,640 --> 00:34:30,040
Speaker 4: rap Arks. You talked to me about it a few

709
00:34:30,080 --> 00:34:30,520
Speaker 4: days ago.

710
00:34:32,480 --> 00:34:34,920
Speaker 10: It's both the health decision and they're also looking for

711
00:34:34,960 --> 00:34:37,040
Speaker 10: a community and places that they can't find at the

712
00:34:37,040 --> 00:34:39,600
Speaker 10: bar because more and more young people don't drink. So

713
00:34:39,640 --> 00:34:41,600
Speaker 10: it's not just a health choice. It's a health choice

714
00:34:41,640 --> 00:34:44,120
Speaker 10: and a choice to please try and find more friends

715
00:34:44,480 --> 00:34:47,160
Speaker 10: outside the office or the bar.

716
00:34:47,280 --> 00:34:49,520
Speaker 4: Really, all right, I want to dig into that community

717
00:34:49,560 --> 00:34:51,239
Speaker 4: aspect in just a bit, But I have to ask,

718
00:34:51,239 --> 00:34:53,799
Speaker 4: because we're talking gen z and millennials, what about the

719
00:34:53,840 --> 00:34:56,960
Speaker 4: gen xers and boomers? Where do we stand?

720
00:34:58,239 --> 00:34:58,439
Speaker 3: Well?

721
00:34:58,440 --> 00:35:00,600
Speaker 10: The reacharch shows that there's still we're still going to

722
00:35:00,600 --> 00:35:02,839
Speaker 10: the bar, They're still going to dinner. Maybe they're having

723
00:35:02,920 --> 00:35:06,719
Speaker 10: dinner parties or house parties, owning homes. For the gen

724
00:35:06,800 --> 00:35:09,680
Speaker 10: z who went to college perhaps in the pandemic and

725
00:35:09,719 --> 00:35:11,360
Speaker 10: they had to you know, work out from home with

726
00:35:11,440 --> 00:35:14,240
Speaker 10: YouTube videos, they had to go to class on zoom,

727
00:35:14,320 --> 00:35:16,680
Speaker 10: they really want to go work out with other people.

728
00:35:16,840 --> 00:35:18,680
Speaker 10: They're really into finding a community in a place that

729
00:35:18,680 --> 00:35:21,759
Speaker 10: they can't because they maybe started their career remotely, so

730
00:35:21,800 --> 00:35:24,120
Speaker 10: they want to They're spending all this money in classes

731
00:35:24,120 --> 00:35:26,239
Speaker 10: to find a community that they didn't have at their

732
00:35:26,239 --> 00:35:27,440
Speaker 10: graduating college.

733
00:35:27,880 --> 00:35:31,480
Speaker 4: So you talk about community, So is it more you know, socializing,

734
00:35:31,560 --> 00:35:33,319
Speaker 4: Like can they just go out and go on like

735
00:35:33,360 --> 00:35:35,400
Speaker 4: a dating app? But no, they want to go and

736
00:35:35,600 --> 00:35:38,120
Speaker 4: be where the people are. I guess it is what

737
00:35:38,120 --> 00:35:40,600
Speaker 4: you're leading to, Yes, exactly.

738
00:35:40,920 --> 00:35:43,440
Speaker 10: I spoke to a technology consultant who said she met

739
00:35:43,480 --> 00:35:45,879
Speaker 10: her boyfriend at her run club, not at a dating app,

740
00:35:45,920 --> 00:35:48,000
Speaker 10: not at a bar, but at her run club, and

741
00:35:48,040 --> 00:35:50,200
Speaker 10: she made friends at pilates. She goes to the same

742
00:35:50,239 --> 00:35:53,000
Speaker 10: class every day. She compared it to school. She's like

743
00:35:53,000 --> 00:35:54,840
Speaker 10: said it was like sitting next to the same person

744
00:35:54,960 --> 00:35:57,000
Speaker 10: week after a week in a class was like was

745
00:35:57,000 --> 00:35:58,880
Speaker 10: like being in college. And if you have something that

746
00:35:59,080 --> 00:36:00,920
Speaker 10: if you need us something to talk about, there's always

747
00:36:00,920 --> 00:36:03,919
Speaker 10: the class, right, So it's like it needs the icebreaker

748
00:36:04,360 --> 00:36:06,600
Speaker 10: and a sense of familiarity and community that you just

749
00:36:06,640 --> 00:36:07,839
Speaker 10: don't get elsewhere for them.

750
00:36:08,360 --> 00:36:11,040
Speaker 4: And aside from that, they're drawing, they're throwing parties there,

751
00:36:11,080 --> 00:36:13,359
Speaker 4: like bachelorette parties, like this is the thing.

752
00:36:13,440 --> 00:36:18,040
Speaker 10: Now, I didn't have my bachelorette party. Applate me neither,

753
00:36:18,719 --> 00:36:21,279
Speaker 10: I do something else. But yeah, they're telling me that

754
00:36:21,320 --> 00:36:24,240
Speaker 10: they're hiring out the whole studios, spending thousands of dollars

755
00:36:24,239 --> 00:36:27,920
Speaker 10: to rent out the equipment, have a teacher in, have mocktails.

756
00:36:27,920 --> 00:36:30,080
Speaker 10: Instead of going to the bar, they'll bring their girlfriends

757
00:36:30,120 --> 00:36:31,360
Speaker 10: to a plates class, which.

758
00:36:31,160 --> 00:36:32,359
Speaker 7: Is kind of wholesome. I think.

759
00:36:32,520 --> 00:36:35,120
Speaker 4: All right, so you mentioned money. So how much are

760
00:36:35,160 --> 00:36:37,480
Speaker 4: these Gen Z and millennials. How much are they spending

761
00:36:37,560 --> 00:36:40,439
Speaker 4: on memberships, on classes, on things like that.

762
00:36:41,719 --> 00:36:42,279
Speaker 7: I spoke to.

763
00:36:42,239 --> 00:36:44,799
Speaker 10: One person whose budget was eight hundred bucks a month

764
00:36:44,840 --> 00:36:46,120
Speaker 10: on fitness, which is which.

765
00:36:45,960 --> 00:36:47,000
Speaker 7: Is quite a lot of money.

766
00:36:47,520 --> 00:36:52,000
Speaker 10: But they're out spending proportionally millennials and Gen X and

767
00:36:52,040 --> 00:36:55,759
Speaker 10: boomers proportionally to their income on fitness and spending more

768
00:36:55,800 --> 00:36:58,000
Speaker 10: than last year in a mental survey as well.

769
00:36:58,040 --> 00:36:58,920
Speaker 7: So it's growing.

770
00:36:59,400 --> 00:37:01,839
Speaker 10: The trends thing to be NonStop. But part of it

771
00:37:01,880 --> 00:37:04,200
Speaker 10: is that they can say that they feel better afterwards.

772
00:37:04,440 --> 00:37:07,239
Speaker 10: Unlike going to a bar. There's no hangovers, there's no

773
00:37:07,320 --> 00:37:09,520
Speaker 10: wearable like an or ring or whoop telling you your

774
00:37:09,600 --> 00:37:11,879
Speaker 10: readiness score is lower the next day. They just feel

775
00:37:11,920 --> 00:37:13,160
Speaker 10: better after a gym class.

776
00:37:13,840 --> 00:37:15,960
Speaker 4: Okay, it's good to feel that way. You don't want

777
00:37:15,960 --> 00:37:18,560
Speaker 4: to have the hangover all the time. But they're doing

778
00:37:18,560 --> 00:37:20,520
Speaker 4: all this, and they're spending all this money when you

779
00:37:20,560 --> 00:37:23,160
Speaker 4: know rents are higher, when they're dealing with student debt, Like,

780
00:37:23,200 --> 00:37:24,480
Speaker 4: how are they making this work?

781
00:37:26,120 --> 00:37:28,440
Speaker 10: I think it's a sort of like zero sum game

782
00:37:28,480 --> 00:37:30,320
Speaker 10: in their heads, as if maybe I can never afford

783
00:37:30,360 --> 00:37:33,600
Speaker 10: a house, but I can put maybe a two or

784
00:37:33,600 --> 00:37:36,239
Speaker 10: two hundred dollars membership on a credit card. Right, So

785
00:37:36,400 --> 00:37:39,160
Speaker 10: if they don't see long term prospects, there's the risk

786
00:37:39,239 --> 00:37:41,480
Speaker 10: of ai for their future, they might as well do

787
00:37:41,560 --> 00:37:43,640
Speaker 10: something that makes them feel good in the short term.

788
00:37:43,719 --> 00:37:45,719
Speaker 10: And I think Jim spending is a big part of that.

789
00:37:46,160 --> 00:37:48,200
Speaker 4: It is now in the article you mentioned one thing

790
00:37:48,200 --> 00:37:49,680
Speaker 4: that I want to point out. You talk about how

791
00:37:49,719 --> 00:37:53,239
Speaker 4: wellness has become a full fledged identity. Now I know

792
00:37:53,440 --> 00:37:56,600
Speaker 4: my social media feed, it's filled with you know, people

793
00:37:56,640 --> 00:37:59,320
Speaker 4: working out, it's you know what am I meal prepping

794
00:37:59,360 --> 00:38:01,680
Speaker 4: for the week, like all these different things. I mean,

795
00:38:01,920 --> 00:38:04,279
Speaker 4: does social media have a lot to do with it too,

796
00:38:04,320 --> 00:38:07,360
Speaker 4: about more people going or these younger generations going to

797
00:38:07,400 --> 00:38:07,960
Speaker 4: the gym.

798
00:38:09,000 --> 00:38:11,480
Speaker 10: Yeah, I do think there is a performative aspect with

799
00:38:11,560 --> 00:38:14,960
Speaker 10: like the hashtag plotis on TikTok, the clean girl asthetic

800
00:38:15,040 --> 00:38:17,560
Speaker 10: or people wearying and their matching two hundred dollars plot

801
00:38:17,760 --> 00:38:20,560
Speaker 10: sets and wanting to look the part. I think that

802
00:38:20,680 --> 00:38:22,480
Speaker 10: is a really big part. I spoke to a content

803
00:38:22,520 --> 00:38:25,319
Speaker 10: creator in Atlanta who's twenty three, and she documents all

804
00:38:25,360 --> 00:38:27,560
Speaker 10: of her gym sessions. She's made friends at the gym,

805
00:38:27,760 --> 00:38:31,040
Speaker 10: but she's also made it her business online like her

806
00:38:31,080 --> 00:38:34,759
Speaker 10: content creation arm. So I think the lifestyle aspect and

807
00:38:34,800 --> 00:38:36,959
Speaker 10: the way that social media has really driven that wanting

808
00:38:37,000 --> 00:38:39,120
Speaker 10: to look a certain way and perform a certain way

809
00:38:39,160 --> 00:38:40,240
Speaker 10: online is huge.

810
00:38:40,520 --> 00:38:43,040
Speaker 2: Okay, go back to me the clean girl. What is

811
00:38:43,080 --> 00:38:44,200
Speaker 2: it explain that one?

812
00:38:44,280 --> 00:38:48,600
Speaker 10: To me, the clean girl look is is like ath

813
00:38:48,680 --> 00:38:50,120
Speaker 10: leisure and we're wearing less.

814
00:38:49,920 --> 00:38:54,800
Speaker 7: Obviously, Okay, yeah, sort of a.

815
00:38:53,600 --> 00:38:56,280
Speaker 10: As opposed to the millennial I would say, like Kesha aesthetic,

816
00:38:56,360 --> 00:38:58,239
Speaker 10: if that makes sense to you. It's a different one.

817
00:38:58,280 --> 00:39:02,440
Speaker 10: Wanting to look wanting to look, yeah, more like wellness

818
00:39:02,440 --> 00:39:04,640
Speaker 10: oriented as if instead of you just got back from

819
00:39:04,680 --> 00:39:04,920
Speaker 10: the bar.

820
00:39:05,320 --> 00:39:06,000
Speaker 2: Okay, got it?

821
00:39:06,160 --> 00:39:08,920
Speaker 4: And last question, does do GLP ones Does that have

822
00:39:09,000 --> 00:39:11,120
Speaker 4: anything to do with this as well? Does that play

823
00:39:11,160 --> 00:39:11,720
Speaker 4: into the picture?

824
00:39:13,200 --> 00:39:14,920
Speaker 10: I think it does. That doesn't come up so much

825
00:39:14,920 --> 00:39:17,560
Speaker 10: in the research, but people who are on JLP ones

826
00:39:17,560 --> 00:39:20,480
Speaker 10: are told to strength train as part of that regimen,

827
00:39:20,719 --> 00:39:22,920
Speaker 10: So I think that could be as more younger people

828
00:39:22,960 --> 00:39:25,640
Speaker 10: get on JLP one this it becomes more mainstream and

829
00:39:25,719 --> 00:39:27,719
Speaker 10: wanting the strains trained to keep up that as part

830
00:39:27,719 --> 00:39:29,920
Speaker 10: of the medicine. I think that'll be a really big

831
00:39:30,160 --> 00:39:32,160
Speaker 10: ongoing part of this trend to keep it going into

832
00:39:32,160 --> 00:39:32,640
Speaker 10: the future.

833
00:39:33,280 --> 00:39:36,000
Speaker 4: All Right, I work out in my basement now, I

834
00:39:36,000 --> 00:39:38,719
Speaker 4: don't even go to the gym. So this seems like, yeah,

835
00:39:38,800 --> 00:39:43,080
Speaker 4: it's a big social thing, but are people still going

836
00:39:43,080 --> 00:39:43,520
Speaker 4: to the bars?

837
00:39:43,520 --> 00:39:45,080
Speaker 2: Like how are bars and restaurants doing?

838
00:39:46,480 --> 00:39:49,200
Speaker 10: Bars and restaurants are making menus that cope with people

839
00:39:49,200 --> 00:39:52,600
Speaker 10: who are on jlp ones some more small plates, smaller portions,

840
00:39:53,000 --> 00:39:57,080
Speaker 10: mocktail options. I've seen a lot of more creative mocktails

841
00:39:57,120 --> 00:39:59,240
Speaker 10: now for people who aren't drinking. So I think there,

842
00:39:59,280 --> 00:40:01,840
Speaker 10: of course is a space for bars and restaurants. I

843
00:40:01,960 --> 00:40:04,319
Speaker 10: for one, enjoy a nice bar dinner out. But I

844
00:40:04,320 --> 00:40:07,840
Speaker 10: think that hospitality, especially like hotel lias and business owners

845
00:40:08,000 --> 00:40:09,600
Speaker 10: need to find a way to make a community in

846
00:40:09,640 --> 00:40:11,640
Speaker 10: the way that the gyms are killing it at to

847
00:40:11,719 --> 00:40:14,359
Speaker 10: really get really get that gen z spend.

848
00:40:14,040 --> 00:40:16,240
Speaker 4: At the moment, I got it, I'll meet chat Happy

849
00:40:16,239 --> 00:40:19,000
Speaker 4: Hour Sarah Sarah Rapp join your.

850
00:40:18,920 --> 00:40:19,600
Speaker 8: Song right.

851
00:40:22,160 --> 00:40:24,160
Speaker 2: Totally Bloomberg Pursuits.

852
00:40:24,160 --> 00:40:28,880
Speaker 4: Thank you so much, So David Christina, if I decided

853
00:40:28,880 --> 00:40:31,319
Speaker 4: that we're going to go, yes, yeah, are you going

854
00:40:31,400 --> 00:40:31,759
Speaker 4: to join it?

855
00:40:31,920 --> 00:40:34,040
Speaker 3: I know I'll have a cocktail and skip the PILATEUS plus,

856
00:40:34,200 --> 00:40:37,160
Speaker 3: but I hope you guys have a great time. Whenever

857
00:40:37,200 --> 00:40:39,319
Speaker 3: that transpires. AM eager to hear about it.

858
00:40:39,320 --> 00:40:41,719
Speaker 2: It'll be great. You don't know, I come and hang

859
00:40:41,719 --> 00:40:43,600
Speaker 2: out and do some you know, hundreds with us.

860
00:40:44,200 --> 00:40:47,560
Speaker 3: No, thanks for.

861
00:40:47,600 --> 00:40:50,800
Speaker 2: Joining us on today's Bloomberg This Weekend podcast. Don't forget

862
00:40:50,800 --> 00:40:53,040
Speaker 2: to tune in live for the show every Saturday and

863
00:40:53,120 --> 00:40:55,359
Speaker 2: Sunday morning, starting at seven am Eastern, We're

864
00:40:55,400 --> 00:40:58,600
Speaker 3: On Bloomberg Television, Radio and the Bloomberg Business App, bringing

865
00:40:58,640 --> 00:41:01,839
Speaker 3: you unique takes and in depth the interviews on news, politics,

866
00:41:01,920 --> 00:41:05,919
Speaker 3: lifestyle and culture.