WEBVTT - Daybreak Weekend: US CPI, London Tech Summit, China Eco 0:00:00.280 --> 0:00:07.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:10.640 --> 0:00:13.000 This is Bloomberg day Break Weekend, our global look at 0:00:13.000 --> 0:00:15.160 the top stories in the coming week from our Daybreak 0:00:15.160 --> 0:00:17.840 anchors all around the world. Straight Ahead on the program, 0:00:17.880 --> 0:00:20.319 a look ahead to some key inflation data in the 0:00:20.440 --> 0:00:23.919 US how that may impact monetary policy for the FED. 0:00:24.200 --> 0:00:25.680 I'm Tom Busby in New York. 0:00:25.840 --> 0:00:28.520 I'm Caroline Hedge in London, where we're asking if the 0:00:28.600 --> 0:00:32.560 UK has what it takes to become a global tech superpower. 0:00:32.720 --> 0:00:35.400 I'm Doug Christner looking at what we may learn from 0:00:35.440 --> 0:00:37.680 next week's data on the Chinese economy. 0:00:38.720 --> 0:00:42.760 That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 0:00:42.800 --> 0:00:46.480 eleven three to zero, New York, Bloomberg ninety nine to one, Washington, DC, 0:00:47.000 --> 0:00:52.120 Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius 0:00:52.280 --> 0:00:55.800 XM one twenty one, and around the world on Bloomberg Radio, 0:00:55.840 --> 0:00:58.040 dot Com and the Bloomberg Business App. 0:01:02.840 --> 0:01:05.000 Good day to you. I'm Tom Busby. We begin today's 0:01:05.000 --> 0:01:08.040 program with some key inflation data here in the US. 0:01:08.319 --> 0:01:11.319 The consumer price index for May on Wednesday, the producer 0:01:11.400 --> 0:01:14.280 price index for that same month out on Thursday. For 0:01:14.400 --> 0:01:16.880 more on what to look for and how that data 0:01:16.959 --> 0:01:19.800 may impact the fed's next decision on rates. Were joined 0:01:19.800 --> 0:01:23.240 by Edward Harrison, senior editor at Bloomberg and author of 0:01:23.240 --> 0:01:27.240 Bloomberg's The Everything Risk newsletter. Edward, thank you so much 0:01:27.240 --> 0:01:27.839 for being here. 0:01:28.440 --> 0:01:29.319 Well, good to talk to you. 0:01:29.360 --> 0:01:30.000 Tom. 0:01:30.080 --> 0:01:32.840 A slightly better than forecast made jobs report this past 0:01:32.840 --> 0:01:36.000 week after a lot of incoming data not as upbeat. 0:01:36.400 --> 0:01:40.520 So what does this job's report tell you in regarding 0:01:40.600 --> 0:01:42.800 the Fed? And what are you expecting to see in 0:01:42.840 --> 0:01:45.360 these May CPI and PPI reports. 0:01:46.080 --> 0:01:49.840 Yeah, so, Tom, I think that the headline number tells 0:01:49.880 --> 0:01:53.040 the equity market that the jobs market is not falling apart, 0:01:53.080 --> 0:01:55.960 the economy is not falling apart. We got one hundred 0:01:55.960 --> 0:01:59.960 and thirty nine thousand added to nonfarm payrolls, which was 0:02:00.160 --> 0:02:05.040 ahead of expectations, and we had the unemployment rate staying 0:02:05.520 --> 0:02:08.600 solid at four point two percent. Those numbers just on 0:02:08.639 --> 0:02:13.320 the surface, it says that you know, the labor markets 0:02:13.360 --> 0:02:15.520 not falling apart, and that's what you actually would have 0:02:15.639 --> 0:02:20.800 needed to get to galvanize the Federal reserve to cut 0:02:20.880 --> 0:02:25.680 rates more quickly than anticipated. So, given that the Fed's 0:02:25.720 --> 0:02:29.359 going to be on hold and as a result of that, 0:02:29.639 --> 0:02:33.239 the CPI and the PPI are less important in terms 0:02:33.280 --> 0:02:35.640 of the Fed's thinking in terms of the rate decision 0:02:35.680 --> 0:02:36.280 going forward. 0:02:36.880 --> 0:02:39.680 Well, what are the big drivers for inflation right now, 0:02:39.720 --> 0:02:43.040 both for consumers and businesses? And you say it's a 0:02:43.080 --> 0:02:46.640 little less important, still key for them, still, you know, 0:02:47.520 --> 0:02:50.160 maybe not so much as the PCE, but they're still 0:02:50.200 --> 0:02:52.080 going to look at it very closely. 0:02:53.080 --> 0:02:56.440 Well, there are two things. One is that we still 0:02:56.480 --> 0:03:01.320 have services inflation, which is above where they would like 0:03:01.360 --> 0:03:04.360 it to be. That's still sticky. And then the second 0:03:04.400 --> 0:03:08.440 thing is that we're seeing a pass through of the 0:03:08.440 --> 0:03:13.600 goods inflation that comes from the tariffs into into the 0:03:13.680 --> 0:03:17.720 numbers the companies are talking about passing on the price increases. 0:03:17.800 --> 0:03:20.720 So these numbers that we're going to see are from May, 0:03:20.840 --> 0:03:24.200 and as a result, you can think of them as 0:03:25.240 --> 0:03:29.120 after the fact, after the the the tariffs were put on, 0:03:29.520 --> 0:03:33.440 But they're not. They're not consistent with the data, the 0:03:33.480 --> 0:03:35.760 incoming data that we're seeing, which is that you know, 0:03:36.080 --> 0:03:39.600 there is inflation in the pipeline, and so given that 0:03:39.600 --> 0:03:41.600 that means that the Fed is going to continue to 0:03:41.640 --> 0:03:43.600 be on the whole. The only reason that they would 0:03:43.640 --> 0:03:47.800 actually cut rates more aggressively. Is if we had numbers 0:03:48.160 --> 0:03:51.840 that came out last week from the jobs report that 0:03:52.600 --> 0:03:57.560 showed the economy stalling in a very precipitous way. 0:03:58.120 --> 0:04:01.560 Well, let's let's continue on with the tariffs, because in 0:04:01.680 --> 0:04:04.600 these reports that we're going to see this coming week, 0:04:05.000 --> 0:04:07.280 maybe just at least a hint, a little hint of 0:04:07.320 --> 0:04:09.640 the impact of the tariffs. But we have that ninety 0:04:09.720 --> 0:04:12.800 day reprieve on most tariffs expires in July. Is that 0:04:12.840 --> 0:04:14.840 when we're really going to see the impact. 0:04:15.160 --> 0:04:18.200 Well, you know, I think that actually the June CPI 0:04:18.279 --> 0:04:21.440 and PPI numbers will show you a little bit more 0:04:21.680 --> 0:04:25.560 of what's there. It is interesting that if you look 0:04:25.600 --> 0:04:29.560 at just the month on month numbers, the consensus is 0:04:29.600 --> 0:04:33.760 for zero point three percent CPI taking out food and energy, 0:04:33.839 --> 0:04:36.479 so you know, sort of the core CPI number, which 0:04:36.520 --> 0:04:40.160 is higher than it was in April. But you know, 0:04:40.520 --> 0:04:43.120 if that number is actually high, let's say zero point 0:04:43.200 --> 0:04:46.400 four percent, as you know, a miss to the upside, 0:04:46.839 --> 0:04:50.960 then you could say to yourself already in maybe we're 0:04:50.960 --> 0:04:54.680 seeing these numbers have impacted. We certainly will see them 0:04:54.720 --> 0:04:57.960 therefore impacted in June. That would make the Fed even 0:04:58.080 --> 0:05:03.080 more reticent about lowering interest rates, despite by the way, 0:05:03.200 --> 0:05:05.720 the fact that Donald Trump last week was saying that 0:05:06.440 --> 0:05:10.039 power should lower interest rates by one full percentage point. 0:05:10.839 --> 0:05:13.920 Now, a little more about the tariffs. We know there 0:05:13.920 --> 0:05:16.599 are talks slated to happen. They're supposed to happen with China, 0:05:16.640 --> 0:05:19.480 the European Union, they've been on and off, even Japan. 0:05:19.680 --> 0:05:24.080 But is there any clear read that you're seeing on 0:05:24.680 --> 0:05:27.040 what these negotiations are going to bring as far as 0:05:27.160 --> 0:05:30.120 you know, a tariff deal, a trade deal with these 0:05:30.120 --> 0:05:31.479 countries and the EU. 0:05:31.800 --> 0:05:35.839 No, and there's no clear deal that's there. I think 0:05:35.839 --> 0:05:40.080 there are three countries Japan, the EU, and China that 0:05:40.160 --> 0:05:43.680 are outstanding which are definitely going to impact inflation and 0:05:43.680 --> 0:05:46.760 therefore the economy. There was actually a report from Bloomberg 0:05:46.880 --> 0:05:50.120 that the trade negotiators for the United States were fighting 0:05:50.160 --> 0:05:54.080 amongst each other in front of the Japanese delegation, and 0:05:54.880 --> 0:05:59.200 that certainly doesn't lead to any sort of positive outcome. Moreover, 0:05:59.520 --> 0:06:02.479 this whole old taco trade that people talk about, the 0:06:02.520 --> 0:06:06.360 fact that Trump eventually backs down only leads to the 0:06:06.360 --> 0:06:09.880 negotiators from the other side thinking, you know, we have 0:06:09.960 --> 0:06:13.320 some leverage here if we played chicken because eventually he'll 0:06:13.480 --> 0:06:17.960 cave on or you know, he'll back out in some regard. 0:06:18.240 --> 0:06:20.080 So I think that, you know, there's a lot of 0:06:20.160 --> 0:06:22.880 risk associated with that. And just going back to the 0:06:22.960 --> 0:06:26.880 jobs numbers for a second, really, even though the equity 0:06:26.920 --> 0:06:29.680 market thinks of this in a positive way and it's 0:06:29.680 --> 0:06:32.360 not going to galvanize the FED, the internals of the 0:06:32.440 --> 0:06:34.560 numbers were actually not as good as you might think. 0:06:34.600 --> 0:06:38.880 That the household survey showed labor participation going down. There 0:06:38.960 --> 0:06:44.960 were a negative ninety five two month payroll net revision, 0:06:45.320 --> 0:06:48.400 so that means that really we only saw forty four 0:06:48.480 --> 0:06:52.000 thousand net jobs if you take revisions into account. So 0:06:52.080 --> 0:06:55.400 the labor market is slowing, it's just not slowing enough 0:06:56.320 --> 0:06:59.760 to galvanize the FED to start to cut rates. And 0:06:59.760 --> 0:07:02.839 then you have the backdrop of these negotiations which aren't 0:07:02.920 --> 0:07:05.919 really going anywhere at this point, and that sort of 0:07:06.000 --> 0:07:08.240 downside risk for equities in particular. 0:07:08.480 --> 0:07:10.679 Well, a lot of variables for the FED to consider, 0:07:10.920 --> 0:07:13.920 including the may CPI out on Wednesday, the may PPI 0:07:14.040 --> 0:07:17.080 on Thursday. Our thanks to Edward Harrison, senior editor at 0:07:17.080 --> 0:07:20.920 Bloomberg and author of Bloomberg's The Everything Risk newsletter. We 0:07:21.000 --> 0:07:23.920 turn now to the ev maker Tesla, which is scheduled 0:07:23.960 --> 0:07:27.320 to launch its long delayed robo taxi service this week 0:07:27.360 --> 0:07:30.520 in Austin, Texas. For more on that expected launch, we're 0:07:30.600 --> 0:07:34.480 joined by Craig Trudell, Bloomberg's Global Autos editor. Well, Craig, 0:07:34.480 --> 0:07:37.280 thanks so much for joining us. Let's start with what 0:07:37.440 --> 0:07:40.480 is Tesla expected to do this Thursday in Austin, And 0:07:40.560 --> 0:07:44.320 after all the delays and setbacks, will it be ready? 0:07:44.520 --> 0:07:46.640 You know, that's the big question. But there are so 0:07:46.760 --> 0:07:50.480 many questions about Tesla's plans for this upcoming week that 0:07:51.200 --> 0:07:54.720 are still very much unanswered. I mean, even starting with 0:07:54.800 --> 0:07:58.240 that timing right where Bloomberg was first to report that 0:07:58.280 --> 0:08:01.160 the company was aiming for June twelve, we haven't heard 0:08:01.240 --> 0:08:03.720 anything to the contrary, at least to the point where 0:08:03.720 --> 0:08:06.520 you and I are speaking. But that number still has 0:08:06.520 --> 0:08:09.600 not been confirmed by the company. And you know, what 0:08:09.680 --> 0:08:12.200 we do know is is Elon Musk has talked about 0:08:12.240 --> 0:08:15.360 you know, sort of starting slows, starting with a small 0:08:15.480 --> 0:08:18.600 number of Model Y vehicles that they'll run around Austin. 0:08:19.640 --> 0:08:22.240 We don't know sort of you know, specifics about what 0:08:22.440 --> 0:08:26.760 areas of the city that they expect to run these 0:08:26.800 --> 0:08:30.000 these driver lists, you know, rides, we don't know what 0:08:30.120 --> 0:08:32.720 time of day, and some of these details are important 0:08:32.800 --> 0:08:36.200 because it can make real differences as to you know, 0:08:36.240 --> 0:08:39.240 how many other cars are out on the road, how 0:08:39.360 --> 0:08:41.800 challenging is it for these cars to sort of navigate 0:08:41.840 --> 0:08:44.360 those situations. And so you know, there's a lot of 0:08:44.720 --> 0:08:47.600 specifics that the company has yet to address that will 0:08:47.640 --> 0:08:50.160 be really important to sort of suss out, you know 0:08:50.200 --> 0:08:51.400 in the days toccomme. 0:08:51.240 --> 0:08:53.439 Yeah, not even how many cars they're going to put 0:08:53.440 --> 0:08:54.400 on the road this week. 0:08:54.880 --> 0:08:57.520 Yeah, what we've heard Musks say is something on the 0:08:57.640 --> 0:09:00.240 order of ten or twenty, So we're talking really small. 0:09:00.880 --> 0:09:02.480 This is you know, I guess what you would call 0:09:02.480 --> 0:09:05.600 in the tech business a soft launch. And you know, 0:09:05.720 --> 0:09:08.760 Musk has talked about, you know, scaling up quickly, but 0:09:09.520 --> 0:09:10.920 I think we have to kind of take that with 0:09:11.000 --> 0:09:13.840 a grain of salt because he's talked about, you know, 0:09:13.880 --> 0:09:16.760 putting driverless cars on the road you know, anytime now, 0:09:17.120 --> 0:09:20.120 year after year, and you know, we will see, we 0:09:20.160 --> 0:09:22.120 will see if twenty twenty five is his year. 0:09:22.720 --> 0:09:25.360 Well, we know that Tesla has for years been doing 0:09:25.360 --> 0:09:27.839 a lot of work. It's been testing these autonomous cars 0:09:27.840 --> 0:09:30.920 out on closed roads. It's been gathering data for years 0:09:30.960 --> 0:09:34.079 working on machine learning, and it has of course that 0:09:34.200 --> 0:09:38.000 controversial some would say misnamed full self driving mode, which 0:09:38.320 --> 0:09:40.560 I know you reported on just last week, involved in 0:09:40.559 --> 0:09:44.959 a recent string of sometimes deadly crashes. So with all that, 0:09:45.280 --> 0:09:49.520 can it still compete against Waimo and GM's Cruise, which 0:09:49.559 --> 0:09:51.839 packed it in after ten years because it was just 0:09:51.920 --> 0:09:52.600 too expensive. 0:09:53.000 --> 0:09:56.040 Yeah, you know, I think with Cruise the sort of 0:09:56.280 --> 0:09:58.040 you know, thing that we took away from. One of 0:09:58.080 --> 0:10:00.120 the things to take away from that was, you know, 0:10:00.480 --> 0:10:04.079 it can come down to a single crash, a single 0:10:04.120 --> 0:10:07.679 crash that in Crusi's case, actually didn't result in a fatality, 0:10:08.360 --> 0:10:11.400 but it was a gruesome one and unfortunate one. Nonetheless, 0:10:12.240 --> 0:10:14.839 the company's handling of that and sort of running a 0:10:14.920 --> 0:10:18.040 foul of you know, the local regulators that was working 0:10:18.120 --> 0:10:21.719 with in San Francisco, you know, really ultimately led to 0:10:21.920 --> 0:10:24.839 GM deciding, you know what, we're going to pull the 0:10:24.880 --> 0:10:27.240 plug on this company. And I go back to you know, 0:10:27.360 --> 0:10:30.360 twenty eighteen, there was a similar incident in the case 0:10:30.440 --> 0:10:33.560 of Uber right where they had a self driving test 0:10:33.640 --> 0:10:36.599 vehicle that was involved in a fatal crash, and that 0:10:36.800 --> 0:10:40.240 ultimately led Uber to decide to get out of this space. 0:10:40.360 --> 0:10:43.240 So part of the reason why this is such a 0:10:43.360 --> 0:10:46.079 big story in terms of, you know, having a closer 0:10:46.160 --> 0:10:48.800 look at one of the fatal crashes that has resulted 0:10:48.880 --> 0:10:52.840 from people using full self driving is we the public 0:10:52.920 --> 0:10:56.840 are much less tolerant of crashes in which a robot 0:10:57.400 --> 0:11:00.560 or sort of you know, something other and a human 0:11:01.120 --> 0:11:04.280 is involved in running the car. And you know, in 0:11:04.360 --> 0:11:06.800 this case, it was a crash that you know, sort 0:11:06.840 --> 0:11:11.760 of avoided the headlines. Initially, it took the US safety regulator, 0:11:11.880 --> 0:11:17.320 the National Highway Traffic Safety Administration, investigating full self driving 0:11:17.559 --> 0:11:19.920 on the basis of this and a few other crashes 0:11:20.440 --> 0:11:22.440 for it to really come to light and get our 0:11:22.520 --> 0:11:25.400 attention and lead to us seeking out some public records 0:11:25.720 --> 0:11:27.520 to learn more about what happened. 0:11:28.040 --> 0:11:32.600 And these aren't isolated incidents with with Tesla and it's 0:11:32.600 --> 0:11:35.439 full self driving. I mean, there is there is a 0:11:35.559 --> 0:11:37.840 paper trail on this, right, a number of incidents. 0:11:38.360 --> 0:11:41.240 That's right, full self driving has not been around as 0:11:41.360 --> 0:11:44.480 long as autopilot, but that's the other sort of branding 0:11:44.600 --> 0:11:47.760 that that Tesla has used for sort of lower level 0:11:47.840 --> 0:11:51.439 capability of you know, driver ass as features and I 0:11:51.440 --> 0:11:53.280 would say, you know, when you look at this, you 0:11:53.320 --> 0:11:56.160 know long track record of autopilot and full self driving, 0:11:56.800 --> 0:11:59.720 there have been a string of investigations into whether these 0:12:00.280 --> 0:12:04.840 are defective, and one of those investigations involving autopilot actually 0:12:05.520 --> 0:12:08.160 got to the point where Nitsa said to Tesla, look, 0:12:08.240 --> 0:12:10.120 we think that there's a safety risk here that you 0:12:10.200 --> 0:12:13.120 need to address for the recall. It led to Tesla 0:12:13.240 --> 0:12:16.560 recalling two million cars, and you know, in a matter 0:12:16.600 --> 0:12:19.320 of a few months, Nitsa came back to Tesla and said, 0:12:19.559 --> 0:12:21.760 you know what, we're not sure that the remedy that 0:12:21.840 --> 0:12:24.600 you offered to address you know, what we were raising 0:12:25.600 --> 0:12:29.240 was sufficient. And so not only is Tesla under investigation 0:12:30.160 --> 0:12:32.599 with respect to full self driving, it's also you know, 0:12:32.800 --> 0:12:36.079 under a pending investigation a query as to whether that 0:12:36.280 --> 0:12:39.839 recall that it did to sort of, you know, make 0:12:39.920 --> 0:12:43.120 autopilots safer to use, whether or not that went far enough. 0:12:43.240 --> 0:12:46.040 Well, Thursday, June twelfth, the expected launch date for the 0:12:46.120 --> 0:12:49.880 Tesla robotaxi in Austin, Texas. Our thanks to Bloomberg's Global 0:12:49.920 --> 0:12:53.760 autos editor Craig Drudell, coming up on Bloomberg Day Break weekend, Well, 0:12:53.760 --> 0:12:56.199 look at whether the UK has what it takes to 0:12:56.280 --> 0:12:59.800 become a global tech superpower. I'm Tom Busby and this 0:13:00.000 --> 0:13:04.760 this is Bloomberg. This is Bloomberg day Break weekend, our 0:13:04.800 --> 0:13:07.120 global look ahead at the top stories for investors in 0:13:07.200 --> 0:13:10.040 the coming week. I'm Tom Busby and New York Up. 0:13:10.200 --> 0:13:12.199 Later in our program we'll look ahead to some key 0:13:12.280 --> 0:13:15.800 economic data coming out in China. But first, tech leaders 0:13:15.840 --> 0:13:18.240 from around the world will gather in the UK capital 0:13:18.320 --> 0:13:21.640 for the London Tech Summit, with speakers ranging from the 0:13:21.800 --> 0:13:24.720 inventor of the World Wide Web to renowned professors, even 0:13:24.760 --> 0:13:28.480 some tech CEOs. Forty thousand tech enthusiasts set to flock 0:13:28.520 --> 0:13:31.319 to Olympia for a week of panel discussions. But with 0:13:31.520 --> 0:13:35.080 stiff competition from innovators around the world, can the UK 0:13:35.360 --> 0:13:38.600 keep up with the global tech revolution for more, Let's 0:13:38.600 --> 0:13:41.160 get to London and bring in Bloomberg Daybreak Europe anchor 0:13:41.440 --> 0:13:43.200 Caroline Hepgar Tom. 0:13:43.400 --> 0:13:46.480 The Great Tech Race has been a permanent feature of 0:13:46.559 --> 0:13:49.439 the corporate world for much of twenty twenty five. The 0:13:49.600 --> 0:13:53.880 rise of the Chinese artificial intelligence startup Deep Seek has 0:13:53.920 --> 0:13:57.520 only added attention to the issue. In February, the company 0:13:57.600 --> 0:14:01.360 released an open source model that it said rivaled software 0:14:01.640 --> 0:14:05.040 from the top American AI developers, and it claimed to 0:14:05.120 --> 0:14:08.679 have done so for a fraction of the development cost 0:14:09.120 --> 0:14:13.920 using less powerful hardware. And now global businesses including Meta, 0:14:14.000 --> 0:14:17.480 are busy buying several hundreds of acres in a bid 0:14:17.600 --> 0:14:22.840 to build data centers capable of fueling their AI focused dreams. 0:14:23.240 --> 0:14:27.200 Primig Intelligence is senior tech industry analyst says the world's 0:14:27.240 --> 0:14:30.600 biggest tech firms are all in when it comes to 0:14:30.800 --> 0:14:34.080 leveling up their artificial intelligence capabilities. 0:14:34.840 --> 0:14:37.920 Just look at how far they have come in terms 0:14:38.000 --> 0:14:41.480 of you know, infrastructure, Like a company like Google, Not 0:14:41.680 --> 0:14:45.400 only are they designing their own data centers and you know, 0:14:46.400 --> 0:14:50.440 creating their own chips, and now they are you know, 0:14:50.600 --> 0:14:54.080 procuring power do they extend that they want to make 0:14:54.160 --> 0:14:58.880 sure that these AI chips, which can have volatile power needs, 0:14:59.360 --> 0:15:03.040 are more optimize when it comes to the efficiency of 0:15:03.120 --> 0:15:08.280 their infrastructure. And that's why these hyperscaler companies really have 0:15:08.480 --> 0:15:11.720 got so many different aspects to their mode. So it's 0:15:11.840 --> 0:15:15.400 not just about the search algorithm or in the case 0:15:15.480 --> 0:15:18.440 of Meta, you know, their social media knowledge graph. It 0:15:18.600 --> 0:15:21.880 is about the entirety of how they run their infrastructure, 0:15:21.920 --> 0:15:24.360 and that is what is a long term mode because 0:15:24.440 --> 0:15:28.720 nobody else can operate at the scale at which these 0:15:28.800 --> 0:15:30.400 hyperscalers are operating right now. 0:15:30.680 --> 0:15:34.840 That was Bloomberg Intelligence's man Deep Singh speaking there. Well. 0:15:34.880 --> 0:15:39.200 The UK's role in the AI and wider technology arms 0:15:39.320 --> 0:15:42.720 race is something that I've been discussing with Bloomberg Daybreak 0:15:42.760 --> 0:15:48.320 Europe anchor Tom McKenzie. As London Tech Week approaches, this 0:15:48.520 --> 0:15:51.080 is always a really exciting week, isn't it. In London, 0:15:51.640 --> 0:15:54.600 CEOs and visionaries are going to be arguing surely that 0:15:54.680 --> 0:15:58.200 the UK can be one of the AI capitals of 0:15:58.320 --> 0:15:58.720 the world. 0:15:59.240 --> 0:16:02.160 Absolutely, and we're going to have government presence there at 0:16:02.240 --> 0:16:04.520 London Tech Week. You have London Tech Week and you 0:16:04.680 --> 0:16:07.600 have Founders Forum as well. In Paris, by the way, 0:16:07.640 --> 0:16:09.640 you have Vivtech which is also drawing a lot of 0:16:09.640 --> 0:16:11.680 these big names there. So there's the competition between Paris 0:16:11.720 --> 0:16:14.160 and London next week as well. But certainly the government's involved. 0:16:14.160 --> 0:16:16.040 Peter Carr will be there of course, the Secrety of 0:16:16.080 --> 0:16:19.800 State in terms of science and innovation and technology. You 0:16:19.920 --> 0:16:22.360 also have the likes of Matt Clifford, who is the 0:16:22.400 --> 0:16:25.960 Prime Minister's advisor on AI, and they will be making 0:16:26.040 --> 0:16:28.640 the case that London is the place to invest and 0:16:29.000 --> 0:16:31.840 to innovate, and there are some data that backs that up. 0:16:31.880 --> 0:16:34.080 In terms of fun flows, you have seen more money 0:16:34.240 --> 0:16:38.040 moving into the tech sector last year from venture capital 0:16:38.600 --> 0:16:42.840 into London into the UK than into France and Germany combined. 0:16:42.880 --> 0:16:46.440 And we have some big name startups now that are 0:16:46.480 --> 0:16:48.760 raising real capital and have an impact, companies like Wave 0:16:49.000 --> 0:16:51.560 in the mobility space, which is valued at a little 0:16:51.600 --> 0:16:56.240 over two billion US dollars. You have companies like Synthesia, 0:16:56.480 --> 0:17:00.640 eleven Labs, Polyai, Luminance, Revolute, which is huge in terms 0:17:00.680 --> 0:17:03.840 of fintech. So we do have examples of successful startups here. 0:17:03.920 --> 0:17:06.560 There is money flowing in, but there is a lot 0:17:06.640 --> 0:17:09.639 more to do, and in terms of positioning the UK 0:17:09.720 --> 0:17:11.480 when it comes to AI, that is going to be 0:17:11.560 --> 0:17:14.320 crucial in terms of the conversations I think going forward 0:17:14.359 --> 0:17:17.239 and the kind of traction that government ministers can get 0:17:17.280 --> 0:17:18.920 and that companies can get in terms of fundraising. 0:17:19.160 --> 0:17:21.679 Yeah, I mean the UK government website talking about London 0:17:21.760 --> 0:17:24.440 becoming the epicenter of global innovation. 0:17:25.480 --> 0:17:27.399 That's one side of things. 0:17:27.640 --> 0:17:30.480 On the other, in recent days we've seen why saying 0:17:30.520 --> 0:17:33.480 that it's going to move its listing primary listing to 0:17:33.600 --> 0:17:37.239 the US. So there are some concerns also, aren't there. 0:17:37.480 --> 0:17:40.639 And I'm glad you brought up wise because that really 0:17:40.800 --> 0:17:43.680 points to one of the key hurdles, one of the 0:17:43.760 --> 0:17:47.600 key headwinds for the UK. This, of course, the money 0:17:47.640 --> 0:17:52.080 transfer business listed in twenty twenty one to great fanfare. 0:17:52.359 --> 0:17:55.800 It's been one of the few tech companies listed in 0:17:55.840 --> 0:17:58.600 the UK now, as you say, making that decision to 0:17:58.680 --> 0:18:00.680 put its primal listing in the US, which tells a 0:18:00.720 --> 0:18:03.680 bigger story. It tells a story about the valuations these 0:18:03.720 --> 0:18:06.440 companies think they can get in the US market versus 0:18:06.640 --> 0:18:10.320 here in the UK. It tells a story about companies 0:18:10.800 --> 0:18:15.480 including for example, Delivery that was bought over and bought 0:18:15.520 --> 0:18:18.800 by door Dash, Dark Trace which is brought by private equity. 0:18:19.119 --> 0:18:21.000 The companies that are able to build here in terms 0:18:21.040 --> 0:18:24.440 of the tech sector, they often then go to the 0:18:24.560 --> 0:18:27.119 US to raise the bigger funds and to list. And 0:18:27.240 --> 0:18:29.400 that is not a trend that we have seen stopping 0:18:29.480 --> 0:18:32.159 despite changes that London Stock has changed have tried to 0:18:32.200 --> 0:18:35.000 make so capital access to capital and the capital markets 0:18:35.240 --> 0:18:37.080 is really key when it comes to the question of 0:18:37.280 --> 0:18:39.400 how you scale and how you grow these businesses. 0:18:40.320 --> 0:18:44.280 What about regulation when it comes to tech. I mean, 0:18:44.320 --> 0:18:49.720 obviously global companies have a huge market in Europe and 0:18:50.119 --> 0:18:53.000 the UK being sort of attached to that. What about 0:18:53.200 --> 0:18:57.440 the idea of deregulation or how we regulate artificial intelligence 0:18:57.520 --> 0:18:59.679 and other bits of the tech sphere. 0:19:00.119 --> 0:19:04.080 Keir Starmer's government is actually taking a more proactive approach 0:19:04.119 --> 0:19:06.320 in terms of looking at the opportunities versus the risk. 0:19:06.359 --> 0:19:09.440 So the emphasis has shifted. Some would say that's because 0:19:09.480 --> 0:19:11.760 the growth needs of this economy are so much more 0:19:11.800 --> 0:19:14.840 acute that if you're looking for one alexir of growth, 0:19:15.240 --> 0:19:17.320 AI could be that, So you have to reach for 0:19:17.320 --> 0:19:19.760 the opportunities. The UK is still trying to carve out 0:19:19.840 --> 0:19:21.639 what the regulatory framework is going to be. We have 0:19:21.680 --> 0:19:25.240 an AI strategy. The European Union does have its AI 0:19:25.400 --> 0:19:28.040 Safety Act that is being implemented gradually towards the end 0:19:28.080 --> 0:19:31.520 of this year and into twenty twenty six. There's a 0:19:31.680 --> 0:19:35.640 lot of pushback against that regulation still from the tech industry. 0:19:36.160 --> 0:19:38.560 Where the UK lands on this will be interesting, Will 0:19:38.640 --> 0:19:41.680 it align more with less a fair approach that we're 0:19:41.680 --> 0:19:44.160 starting seeing at least the federal level in the US 0:19:44.240 --> 0:19:46.280 when it comes to AI. Or will it start to 0:19:46.320 --> 0:19:49.520 take account of the risk factors and take lessons from 0:19:49.720 --> 0:19:53.199 what Europe's craft in terms of their regulations. It may 0:19:53.280 --> 0:19:54.040 find a middle spot. 0:19:54.760 --> 0:19:57.960 So do you think that artificial intelligence will dominate given 0:19:58.440 --> 0:20:01.360 the questions about tak up about disruption? 0:20:01.800 --> 0:20:03.720 How important is that going to be on the agenda 0:20:03.800 --> 0:20:04.680 artificial intelligence? 0:20:04.720 --> 0:20:06.560 There is one name that I have not mentioned yet, 0:20:06.600 --> 0:20:09.159 and that is Jensen Huang of Nvidia, of course, the 0:20:09.240 --> 0:20:12.359 CEO of that company that makes the AI accelerators that 0:20:12.440 --> 0:20:15.840 has become the litmus test of AI demand that underpins 0:20:16.000 --> 0:20:18.639 so much of this AI revolution that we're seeing. Jensen 0:20:18.720 --> 0:20:21.600 Huang will be a keynote speaker at London Tech Week. 0:20:21.640 --> 0:20:24.320 He will also be at Viva Tech, the event taking 0:20:24.359 --> 0:20:27.840 place in Paris. So watch for any announcements from the 0:20:27.960 --> 0:20:33.000 CEO of Nvidia. They are building and funding the build out, 0:20:33.040 --> 0:20:35.000 of course of data centers in the US. They've announced 0:20:35.000 --> 0:20:37.800 plans to invest in data centers in the UAE. What 0:20:38.080 --> 0:20:40.280 is the data center story in the UK? What is 0:20:40.320 --> 0:20:43.119 the data story data center story in Europe? How much 0:20:43.200 --> 0:20:46.359 is Nvidia going to be investing in the infrastructure that 0:20:46.600 --> 0:20:50.399 underpins the advancements and innovations that we're seeing in AI 0:20:50.600 --> 0:20:52.160 and how is the UK trying to get a piece 0:20:52.160 --> 0:20:53.800 of that. I think that's going to be something really 0:20:53.840 --> 0:20:56.280 worth watching next week what we hear from Gensen Wang. 0:20:56.440 --> 0:20:59.320 Yeah, although I have sort of heard this idea that 0:20:59.520 --> 0:21:02.800 maybe those data centers are going to become less energy 0:21:02.840 --> 0:21:05.480 hungry and so maybe, you know, as we get the 0:21:05.560 --> 0:21:08.800 leaps forward in tech, that might be something in the future. 0:21:09.400 --> 0:21:11.560 Going back to your point there about the UK and 0:21:12.080 --> 0:21:16.280 its non EU status, does that help or hinder when 0:21:16.320 --> 0:21:20.920 it comes to tech firms with regulation, with fundraising? 0:21:21.080 --> 0:21:22.480 How are we seeing things now? 0:21:22.760 --> 0:21:25.159 If you look just at the data in terms of 0:21:25.240 --> 0:21:28.320 fun flows, in terms of talent, in terms of the 0:21:28.400 --> 0:21:31.920 numbers of startups, then the UK again is ahead of 0:21:32.520 --> 0:21:35.520 a number of its European peers. I think on the 0:21:35.640 --> 0:21:40.440 regulatory question, the jury is probably still out. The screaming 0:21:40.560 --> 0:21:43.840 question when you're in Continental Europe maan izon An event 0:21:43.880 --> 0:21:46.880 a few weeks ago and the CEOs and the investors 0:21:46.880 --> 0:21:52.200 I spoke to there in Germany talking about regulation in Europe. Regulation, regulation, regulation, 0:21:52.520 --> 0:21:54.080