WEBVTT - Bloomberg Surveillance TV: July 2, 2025 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordern. Join us each day 0:00:18.720 --> 0:00:22.239 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.680 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.280 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.320 Terminal and the Bloomberg Business app. Joining us now a 0:00:37.360 --> 0:00:39.440 man with experience of all of this, the former Speaker 0:00:39.440 --> 0:00:41.680 of the House, Kevin McCarthy. Speaking McCarthy, Welcome back to 0:00:41.680 --> 0:00:43.760 the program, sir. It's good to get your thoughts. I 0:00:43.800 --> 0:00:45.440 want to lead with a question that a Marie asked 0:00:45.440 --> 0:00:48.200 a little bit earlier on the program. When you're herding 0:00:48.280 --> 0:00:51.080 cats on Capitol Hill, is it easier or harder when 0:00:51.120 --> 0:00:53.600 the President of the United States is Donald Trump? 0:00:54.920 --> 0:00:56.000 Oh, it's so much easier. 0:00:56.080 --> 0:00:59.240 President Trump is stronger today than he was at any 0:00:59.320 --> 0:01:03.400 time as career. President Trump is stronger in the House. Remember, 0:01:03.560 --> 0:01:05.760 just to get this bill out of the House, they 0:01:05.800 --> 0:01:07.720 all said they weren't going to vote for it. President 0:01:07.720 --> 0:01:10.680 Trump came down to a conference, told both sides from Salt, 0:01:10.720 --> 0:01:12.480 it's over from the Freedom Caucus. 0:01:12.520 --> 0:01:13.000 That's over. 0:01:13.280 --> 0:01:14.960 Everyone who said they wasn't going to vote for it 0:01:15.040 --> 0:01:16.600 voted for it in twenty four hours. 0:01:16.680 --> 0:01:18.400 So this bill is going to get passed. 0:01:18.440 --> 0:01:20.480 The only thing that's holding up when this bill gets 0:01:20.520 --> 0:01:24.000 passed is the weather in DC and the attendance of 0:01:24.040 --> 0:01:25.280 how that people get here. 0:01:25.480 --> 0:01:28.400 Well, yeah, people now have to come back to Washington 0:01:28.440 --> 0:01:30.080 when they thought they were going to have this week off. 0:01:30.080 --> 0:01:33.640 Speaking McCarthy, So you think the Freedom Caucus will fold again? 0:01:33.680 --> 0:01:35.480 Will they fold by July fourth? 0:01:37.600 --> 0:01:39.600 I believe so. I mean, think about this. 0:01:40.160 --> 0:01:44.399 Mike Lee, Rick Scott, Ron John all voted for this 0:01:44.480 --> 0:01:47.200 bill in the Senate and they're not going to vote 0:01:47.240 --> 0:01:47.520 for it. 0:01:47.680 --> 0:01:48.760 So if they don't want to. 0:01:48.760 --> 0:01:50.480 Vote for and they vote no, they're sitting with the 0:01:50.520 --> 0:01:52.760 Democrats and want to increase taxes. 0:01:53.000 --> 0:01:53.960 They have no place to be. 0:01:54.240 --> 0:01:56.440 What they want to do is get the attention they 0:01:56.480 --> 0:01:57.280 always crave. 0:01:57.640 --> 0:01:59.000 So they talk about that now. 0:01:59.040 --> 0:02:01.400 But how many times can you cry wolf and say 0:02:01.400 --> 0:02:03.040 you're not going to vote for something, and in twenty 0:02:03.080 --> 0:02:06.640 four hours vote for it. They have done this numerous times. 0:02:06.840 --> 0:02:09.440 They want the President's attention. They say this so they 0:02:09.480 --> 0:02:12.359 can go down to the Oval Office and see the president, 0:02:12.360 --> 0:02:14.280 then go back home and say they saw the president. 0:02:14.360 --> 0:02:16.520 So do you think the rule vote which comes first 0:02:16.520 --> 0:02:18.120 will pass because we can't see the bill on the 0:02:18.120 --> 0:02:19.360 floor until that goes through. 0:02:20.600 --> 0:02:22.920 I believe yes, it'll pass. It's all going to come 0:02:23.000 --> 0:02:25.720 down to attendance today. How many people could make. 0:02:25.560 --> 0:02:26.120 It to DC. 0:02:26.560 --> 0:02:29.000 A lot of flights will were canceled. So do they 0:02:29.000 --> 0:02:30.919 have to delay it a day or not? But this 0:02:31.040 --> 0:02:34.160 bill will pass. Remember, it already passed the House, it 0:02:34.160 --> 0:02:37.080 has now passed the Senate, and you've got the July 0:02:37.200 --> 0:02:40.520 fourth deadline holding right behind you. There's a lot of 0:02:40.560 --> 0:02:44.079 pressure mounting here. President Trump has done a tremendous job 0:02:44.120 --> 0:02:46.320 on this, but he has become the speaker in the 0:02:46.360 --> 0:02:49.240 same timeframe. Every time he's leaned into a bill it's 0:02:49.280 --> 0:02:50.079 been able to pass. 0:02:50.160 --> 0:02:53.160 He's the closer, he's the speaker in chief. How concerned 0:02:53.160 --> 0:02:57.800 are basically just congressmen and women about being torched on truth? 0:02:57.880 --> 0:03:03.320 Social like Thomas Massey, Well, you look at Tom Tillis, 0:03:03.360 --> 0:03:07.080 I mean Tom Tillis, who had a lot inside this bill, 0:03:07.200 --> 0:03:09.880 was pushing people to put more inside the bill, turns 0:03:09.919 --> 0:03:10.919 around and decides not. 0:03:10.919 --> 0:03:11.960 To run for reelection. 0:03:12.639 --> 0:03:14.520 I think that plays on the mind of a lot 0:03:14.520 --> 0:03:18.079 of individuals, and people are now being able to look 0:03:18.120 --> 0:03:20.959 at the bill. At first, they're always arguing about what's wrong, 0:03:21.040 --> 0:03:24.040 what's they're not really looking at what's positive. That you're 0:03:24.040 --> 0:03:27.200 not raising taxes, You're actually getting the economy moving again. 0:03:27.280 --> 0:03:29.880 You're keeping your promises for those who are sitting in 0:03:29.919 --> 0:03:31.760 salt districts. And you had a list of there are 0:03:31.800 --> 0:03:35.120 people who are leaning no. Nick Layloda, he said he's 0:03:35.200 --> 0:03:38.280 for this bill. That's a big movement for because he 0:03:38.360 --> 0:03:41.480 actually improved salt for his district when it was ten 0:03:41.560 --> 0:03:44.480 thousand is now forty thousand. He can go back home 0:03:44.720 --> 0:03:47.200 and champion what he was able to achieve. 0:03:47.360 --> 0:03:49.640 At the same time, he votes as a victory. 0:03:49.720 --> 0:03:51.960 At the same time, though there really won't be a cap. 0:03:52.120 --> 0:03:54.120 The cap expires at the end of the year. So 0:03:54.480 --> 0:03:56.240 don't you think the salt calcius does have some. 0:03:56.280 --> 0:03:59.120 Level goes after five years. 0:03:59.160 --> 0:04:02.520 No, from the same standpoint, it wouldn't go totally go away, 0:04:02.640 --> 0:04:04.800 or people going to let these taxes all go away. 0:04:05.040 --> 0:04:08.720 He'd been able to achieve something while keeping taxes low. 0:04:09.040 --> 0:04:11.560 If he wanted salt to go away, raise taxes on 0:04:11.600 --> 0:04:13.600 all of his individuals and play that way, that's not 0:04:13.640 --> 0:04:16.479 why people elect him. They elect him there to go legislate, 0:04:16.640 --> 0:04:19.680 and that's exactly what he did. He improved the life 0:04:19.720 --> 0:04:23.000 of his constituents, and he can champion that and actually 0:04:23.000 --> 0:04:24.440 be celebrated back home. 0:04:24.760 --> 0:04:27.720 Each of the constituents were trying to improve the life 0:04:27.760 --> 0:04:32.240 of their region from an overarching federal perspective, which is 0:04:32.440 --> 0:04:33.160 a federal law. 0:04:33.200 --> 0:04:34.440 Do you think that this is a good bill. 0:04:35.960 --> 0:04:38.279 Yes, this is a very good bill, because what would 0:04:38.320 --> 0:04:41.120 happen if you did not pass this bill. Your taxes 0:04:41.160 --> 0:04:44.919 would go up, the economy would spur a little down. 0:04:45.200 --> 0:04:47.760 I mean, this is exactly keeping the promise. And if 0:04:47.800 --> 0:04:50.320 you want to put it in perspective, this bill is 0:04:50.400 --> 0:04:52.400 exactly what President Trump campaigned on. 0:04:52.640 --> 0:04:54.200 So the American people voted for that. 0:04:54.480 --> 0:04:58.040 He won the popular vote, something a Republican president has 0:04:58.040 --> 0:05:00.400 not done in more than thirty years. He says, no 0:05:00.520 --> 0:05:03.800 tax on tips. It's keeping his promise and it's the 0:05:03.839 --> 0:05:05.080 first thing people look at. 0:05:05.200 --> 0:05:06.280 And even if you didn't. 0:05:06.080 --> 0:05:08.760 Vote for him, you respect that you kept your promise. 0:05:08.800 --> 0:05:09.480 That's a change. 0:05:09.600 --> 0:05:11.839 You said you'd secure the border, you secured the board 0:05:11.880 --> 0:05:13.320 with all the respects, said you would move it to 0:05:13.360 --> 0:05:15.760 make sure the tax would done. Yes, whatever respect you 0:05:15.760 --> 0:05:16.680 want to give me, I'll take. 0:05:17.560 --> 0:05:19.080 I'll give you loads of respect. 0:05:19.400 --> 0:05:22.920 There's a real question right now about the deficit increasing 0:05:23.120 --> 0:05:25.240 and the fact that there is a perception and it 0:05:25.320 --> 0:05:28.799 was edified by the Congressional Budget Office saying that essentially 0:05:28.839 --> 0:05:30.640 this would take money out of the pockets of the 0:05:30.680 --> 0:05:34.200 lowest income individuals in the United States and it would 0:05:34.240 --> 0:05:37.920 add to the higher income individuals significantly in the form 0:05:38.000 --> 0:05:41.960 of tax cuts and other potential benefits. That isn't necessarily 0:05:42.040 --> 0:05:44.599 one of the agenda items that was promised on the 0:05:44.600 --> 0:05:45.320 campaign trail. 0:05:45.400 --> 0:05:45.760 Correct. 0:05:46.960 --> 0:05:47.560 Well, all due. 0:05:47.480 --> 0:05:49.440 Respect to you, if you look back at the tax 0:05:49.440 --> 0:05:52.080 bill that we're keeping in place, what happened after it 0:05:52.160 --> 0:05:56.679 was placed. People actually got more income, Companies gave thousand 0:05:56.760 --> 0:06:00.320 dollars checks to their employees. So the CBO can score 0:06:00.320 --> 0:06:02.359 it one way, but we know what reality is. We 0:06:02.440 --> 0:06:04.520 know what we're seeing right now as well, where the 0:06:04.600 --> 0:06:06.560 S and P five hundred set a new record. So 0:06:07.279 --> 0:06:10.320 I think that lives much stronger to the American public 0:06:10.360 --> 0:06:13.600 than anything else. When they keep their promise, the economy stronger, 0:06:13.760 --> 0:06:16.600 the border is secure. You're watching the Middle East go 0:06:16.680 --> 0:06:18.640 to a place we haven't seen in a long time, 0:06:18.880 --> 0:06:21.640 trying to end war in Ukraine. Yes, the world is 0:06:21.720 --> 0:06:24.880 a much better place because we elected President Trump, and 0:06:25.000 --> 0:06:27.800 yes he is keeping his promise and this aligns exactly 0:06:27.839 --> 0:06:30.200 with that, and America will be stronger for it. 0:06:30.279 --> 0:06:32.520 Speaking McCarthy, I'd love to talk to you about your 0:06:32.520 --> 0:06:37.800 relationship with both President Trump and your friend Elon Musk. 0:06:37.839 --> 0:06:40.480 Are you being called in to try to mediate this 0:06:40.600 --> 0:06:41.840 feud we see? 0:06:43.000 --> 0:06:44.560 I have not been called in, and I just know 0:06:44.600 --> 0:06:46.839 when two bulls fight, the only people who lose is 0:06:46.880 --> 0:06:48.719 the ground underneath it, and I don't want to be 0:06:48.760 --> 0:06:51.600 that turf. One thing I do know is when those 0:06:51.640 --> 0:06:54.080 two work together, there's nothing we can't achieve. 0:06:54.480 --> 0:06:57.039 So in the same mindset, I think. 0:06:56.880 --> 0:06:59.560 People need to take a deep breath. Let's get back 0:06:59.560 --> 0:07:02.560 to where we were before. Let's put America first and 0:07:02.640 --> 0:07:04.920 find the way that we make everybody stronger. 0:07:05.080 --> 0:07:07.839 Speaking McCarthy with respect and thanks, Thank you, sir. 0:07:07.880 --> 0:07:09.159 I appreciate your time as all. 0:07:09.320 --> 0:07:11.520 Thank you, Thank you, buddy, Thank you very much. The 0:07:11.560 --> 0:07:24.200 former Speaker of the House, Kevin McCarthy that Cisco's president 0:07:24.280 --> 0:07:26.400 and chief Product Office a G two ptal, saying we're 0:07:26.400 --> 0:07:28.880 on the verge of a second major inflection in the 0:07:28.920 --> 0:07:33.280 development writing AI. Agents will produce original insights and help 0:07:33.320 --> 0:07:35.720 us solve problems that we might never have dreamed of 0:07:35.760 --> 0:07:39.160 solving before. In this sense, I think agentic AI is 0:07:39.160 --> 0:07:43.520 the single most important technology leap of our lifetime so far. 0:07:44.160 --> 0:07:46.920 G two joined us now for more from Cisco, and 0:07:46.960 --> 0:07:50.080 he's quickly becoming like AI therapist Guto. Welcome back to 0:07:50.120 --> 0:07:54.760 the program, sir. That last line is pretty strong, G two. 0:07:54.800 --> 0:07:57.600 Bigger than the Internet, Bigger than that that big. 0:08:00.000 --> 0:08:02.600 That's one of these technology. Firstly, Jonathan, thank you for 0:08:02.640 --> 0:08:04.960 having me. I am sorry I couldn't be there in person. 0:08:05.040 --> 0:08:10.120 I'm in these beautiful London Bloomberg offices. So let me 0:08:10.160 --> 0:08:11.880 just say, if you take a step back, we are 0:08:11.920 --> 0:08:14.640 in the second major phase of AI. Where we used 0:08:14.640 --> 0:08:16.360 to be the past two and a half years. What 0:08:16.440 --> 0:08:21.280 we've experienced is chatbots intelligently answering questions for us. We're 0:08:21.320 --> 0:08:24.040 now squarely in the second phase, where agents will be 0:08:24.040 --> 0:08:28.720 able to conduct tasks and jobs almost fully autonomously. On 0:08:28.800 --> 0:08:32.480 behalf of humans, and it's going to completely unlocked potential 0:08:32.480 --> 0:08:36.520 that we haven't seen before. And I'm pretty excited about 0:08:36.559 --> 0:08:38.319 the potential of what this is going to be able 0:08:38.320 --> 0:08:40.920 to do to solve problems that we have not been 0:08:40.960 --> 0:08:43.680 able to tackle as of yet. That's probably the most 0:08:43.760 --> 0:08:45.840 under hyped part of AI in my opinion. 0:08:45.920 --> 0:08:48.719 Well, let's get into that that phrase unlocked potential. I'm 0:08:48.720 --> 0:08:52.000 thinking about unlocking potential for who people who are in 0:08:52.080 --> 0:08:54.640 the stocks, people who run the companies, or people who 0:08:54.640 --> 0:08:57.240 actually work at the companies and run the operations. The 0:08:57.280 --> 0:09:01.640 difference between say, job replacement and job enhancement. G two, 0:09:01.720 --> 0:09:02.920 what's the difference between the two? 0:09:04.800 --> 0:09:05.000 You know? 0:09:05.080 --> 0:09:07.440 So, the way I think about it is there's a 0:09:07.640 --> 0:09:11.640 definitive pattern and history of the way that technologies get 0:09:12.600 --> 0:09:15.440 to get adopted. First, the first phase is when people 0:09:15.480 --> 0:09:17.840 are fearful of the technology, and then they flourish with them. 0:09:18.360 --> 0:09:22.520 And we are currently in this mode of largely being 0:09:22.559 --> 0:09:25.079 skeptical of AI, thinking it's going to take our jobs. 0:09:25.080 --> 0:09:26.640 And like I said to you the last time I 0:09:26.640 --> 0:09:30.480 saw you, Jonathan, I worry less about AI taking my job. 0:09:30.520 --> 0:09:33.960 I worry about someone using AI better than me. That's 0:09:34.000 --> 0:09:36.000 probably going to take my job. And we should make 0:09:36.000 --> 0:09:38.959 sure that we democratize the use of AI for every 0:09:39.000 --> 0:09:42.160 person so that we can actually unleash our potential. And that, 0:09:42.360 --> 0:09:45.400 in my mind is an area that we don't talk 0:09:45.520 --> 0:09:48.400 enough about right now, which is what are the unsolved 0:09:48.480 --> 0:09:50.680 problems that we have not been able to solve because 0:09:50.720 --> 0:09:53.480 of original insights of AI that we will be able 0:09:53.520 --> 0:09:57.880 to solve today. Think about the kind of new businesses 0:09:57.920 --> 0:09:59.640 that people will be able to start, the kind of 0:10:00.320 --> 0:10:02.800 you know, diseases we'll be able to solve for now. 0:10:02.880 --> 0:10:05.840 I'm not delusional. It's not that this comes without any risk. 0:10:06.160 --> 0:10:08.840 Security and safety is a huge risk. We ought to 0:10:08.880 --> 0:10:12.000 make sure that we actually get all over that and 0:10:12.559 --> 0:10:15.600 band together as a community to make sure that we 0:10:15.640 --> 0:10:20.120 can solve those risks. But I'm a net optimist of 0:10:20.160 --> 0:10:22.520 AI rather than thinking that it's going to take every 0:10:22.600 --> 0:10:24.880 job that's available for humans right now. 0:10:25.160 --> 0:10:28.480 G Two that's pretty extreme prediction. There is this question 0:10:28.640 --> 0:10:31.720 of who potentially benefits within the labor market and who 0:10:31.840 --> 0:10:34.839 is left behind. And I wonder at Cisco, you talk 0:10:34.920 --> 0:10:37.679 to a lot of companies, how are they preparing their 0:10:37.720 --> 0:10:41.000 workforces and are they aware of how much retraining is 0:10:41.080 --> 0:10:43.559 necessary to keep their humans relevant. 0:10:44.760 --> 0:10:48.920 Yeah, I think there's You know, the most organizations right 0:10:48.960 --> 0:10:53.000 now are thinking about how is each job going to 0:10:53.080 --> 0:10:55.160 get reconfigured and what are we going to need to 0:10:55.200 --> 0:10:58.080 do to make sure that the augmentation of AI to 0:10:58.200 --> 0:11:01.079 a human makes the human more productive. What we want 0:11:01.120 --> 0:11:03.800 to do ultimately is make sure that AI can reach 0:11:03.840 --> 0:11:06.600 its full potential the humans can reach their full potential 0:11:06.640 --> 0:11:12.000 with AI. So, for example, at Cisco, we are hoping 0:11:12.080 --> 0:11:14.360 that there's going to be a lot of code that 0:11:14.400 --> 0:11:16.880 gets written autonomously. That doesn't mean that we're going to 0:11:16.920 --> 0:11:20.880 have less engineers. That means that the engineers will provide 0:11:20.880 --> 0:11:24.160 more insight, more oversight, and they'll actually think about new 0:11:24.240 --> 0:11:29.760 ideas because we are currently so constrained with engineering talent 0:11:29.800 --> 0:11:31.920 that we're not able to prosecute all the ideas that 0:11:31.960 --> 0:11:33.800 we have. And now we'll be able to actually get 0:11:33.840 --> 0:11:36.839 more through put capacity as a result of having AI 0:11:36.920 --> 0:11:39.440 being a companion for every engineer. And so I feel 0:11:39.480 --> 0:11:43.360 like every single job will need to get reconfigured slightly, 0:11:43.440 --> 0:11:46.440 will need to have be adjusted. But this is no 0:11:46.559 --> 0:11:50.480 different from any other previous technological revolution that we've had. 0:11:50.559 --> 0:11:52.319 With the Internet, you had to have the same with 0:11:52.440 --> 0:11:56.160 the personal computer. There was the same kind of reconfiguration 0:11:56.200 --> 0:12:00.360 of jobs. And yes, some of those will those will 0:12:00.360 --> 0:12:03.480 go away, and there'll need to be some retraining, but frankly, 0:12:03.559 --> 0:12:06.000 there'll be new jobs that emerge that we haven't seen 0:12:06.080 --> 0:12:09.680 up until now that allow us to actually move even faster. 0:12:09.960 --> 0:12:10.400 One of the. 0:12:10.360 --> 0:12:13.360 Issues, and one of the differences now versus the Internet 0:12:13.559 --> 0:12:17.000 or the industrialization or even the engine when it came out, 0:12:17.480 --> 0:12:19.760 is the speed of how quickly this is getting implemented, 0:12:19.760 --> 0:12:21.880 of how quickly the development is going. And we're getting 0:12:21.920 --> 0:12:25.000 to phase two before some people even understand the potential 0:12:25.000 --> 0:12:27.280 of phase one. By the time we get to phase three, 0:12:27.280 --> 0:12:28.680 they're going to be a whole host of people that 0:12:28.720 --> 0:12:32.240 don't even realize how behind they are. Just how big 0:12:32.280 --> 0:12:34.080 is that mismatch in terms of the speed of the 0:12:34.120 --> 0:12:37.480 evolution and how behind a lot of the workforce is 0:12:37.520 --> 0:12:38.000 to meet it. 0:12:39.640 --> 0:12:41.840 This is actually a really important point, Lisa, because the 0:12:41.920 --> 0:12:45.360 speed of the pace of change is something that we've 0:12:45.400 --> 0:12:48.400 never seen before. And frankly, that's why sitting on the 0:12:48.480 --> 0:12:51.560 sidelines and waiting for this thing to kind of play 0:12:51.559 --> 0:12:54.400 out before you jump in is exactly the wrong strategy. 0:12:54.440 --> 0:12:56.439 What we need to do is make sure that everyone's 0:12:56.480 --> 0:12:59.760 actually getting dextrous with the use of AI, because there's 0:12:59.760 --> 0:13:01.960 only two kinds of companies in my mind, those that 0:13:02.000 --> 0:13:04.280 are going to be extremely dexterous with the use of 0:13:04.320 --> 0:13:06.800 AI and others that will actually really struggle for relevance. 0:13:07.320 --> 0:13:09.400 And we want to make sure that there's more and 0:13:09.400 --> 0:13:11.880 more companies that are in the first category, not for second. 0:13:12.320 --> 0:13:15.120 And so I do feel like speeds an important dimension 0:13:15.640 --> 0:13:19.360 and in order to tackle that, every company just needs 0:13:19.360 --> 0:13:22.480 to make sure that they're actually thinking about getting and 0:13:22.520 --> 0:13:26.559 not sitting on the sidelines, but immersing themselves and experimenting 0:13:26.600 --> 0:13:28.959 with AI as quickly as possible so that they can 0:13:28.960 --> 0:13:31.160 get an instinct, they can get some kind of judgment 0:13:31.520 --> 0:13:33.240 of what this is going to look like over time. 0:13:33.400 --> 0:13:35.520 T Two, You're not just working with companies, you're also 0:13:35.600 --> 0:13:38.120 working with governments. From page of Wall Street Journal today 0:13:38.160 --> 0:13:41.839 is talking about how China's AI companies are basically challenging 0:13:41.920 --> 0:13:44.880 US superiority. Who is doing it well, who do you 0:13:44.880 --> 0:13:46.040 think is winning this race? 0:13:47.559 --> 0:13:47.719 Well? 0:13:47.760 --> 0:13:50.840 I think right now, you know, while US is in 0:13:50.880 --> 0:13:53.720 the lead, China is actually catching up fast. And so 0:13:53.760 --> 0:13:56.880 we need to make sure that we continue the base 0:13:56.920 --> 0:13:59.600 of innovation that's there, and what you want to see 0:13:59.679 --> 0:14:03.600 is that the US companies are becoming some of the 0:14:03.679 --> 0:14:07.240 standards for infrastructure buildout that might be all around the 0:14:07.240 --> 0:14:09.440 world for safety and security all around the world. 0:14:09.480 --> 0:14:10.120 You want to make. 0:14:10.040 --> 0:14:12.560 Sure that that happens. And that's why it's so important 0:14:12.600 --> 0:14:15.640 that you know the companies that win and the countries 0:14:15.679 --> 0:14:17.439 that win with the AI race are the ones that 0:14:17.480 --> 0:14:19.560 are also going to win economically. They're also going to 0:14:19.600 --> 0:14:22.520 win from a national security standpoint, So there's a lot 0:14:22.560 --> 0:14:25.040 of benefit to making sure that you're kind of immersing 0:14:25.080 --> 0:14:29.040 yourselves in an AI. I was recently in the Middle East, 0:14:29.600 --> 0:14:35.520 Lisa and we announced a partnerships with the Saudi government, 0:14:36.680 --> 0:14:38.600 with the Kingdom of Saudi Arabia as well as with 0:14:38.640 --> 0:14:41.400 the United Arab Emirates, where we're going to help with 0:14:41.520 --> 0:14:43.560 data center buildouts. And if you think about what the 0:14:43.600 --> 0:14:46.400 constraints of AI are, there are three things. There's power, 0:14:46.840 --> 0:14:49.960 there's compute, and there's networking capacity. Those are the constraints, 0:14:49.960 --> 0:14:52.760 and we need to make sure that this infrastructure gets 0:14:52.840 --> 0:14:56.160 modernized and that we have American companies that are helping 0:14:56.480 --> 0:15:00.960 in participating in these massive data center buildouts, which actually 0:15:00.960 --> 0:15:03.720 provide the infrastructure necessary for everyone to be able to 0:15:03.720 --> 0:15:04.960 have access to AI. 0:15:04.920 --> 0:15:07.440 GT just before you go, we're focused on payross this 0:15:07.520 --> 0:15:09.920 week at least has been doing a great job over 0:15:09.920 --> 0:15:13.200 the last week or so just bringing up highlighting continuously repeatedly, 0:15:13.520 --> 0:15:15.360 how difficult it is for graduates to get a roll 0:15:15.400 --> 0:15:17.160 at the moment. And I just wonder how this is 0:15:17.160 --> 0:15:19.720 going to impact high rink at the entry level over 0:15:19.720 --> 0:15:22.480 the next several years or so. As companies figure this out, 0:15:22.720 --> 0:15:25.400 then invest a lot in software, invest in the current 0:15:25.480 --> 0:15:28.000 staff to learn how to use some of these things. 0:15:28.360 --> 0:15:29.760 But I'm not sure they're going to hire up the 0:15:29.800 --> 0:15:31.840 same pace G two. And I wonder what your experience 0:15:31.920 --> 0:15:34.480 is now, both within Cisco and looking out speaking to 0:15:34.560 --> 0:15:35.200 other companies. 0:15:36.680 --> 0:15:39.000 You know, John, you and I talked about this last 0:15:39.040 --> 0:15:41.520 time as well. I actually tend to learn so much 0:15:41.560 --> 0:15:44.600 from the people that are AI natives that are just 0:15:44.680 --> 0:15:47.840 coming out of them out of the educational system, because 0:15:47.840 --> 0:15:51.440 they think they use AI very differently than folks that 0:15:51.440 --> 0:15:53.880 have been around for a while. And so I actually 0:15:54.040 --> 0:15:56.480 don't think it's a good strategy to not hire entry 0:15:56.520 --> 0:15:58.520 level candidates and just think that AI is going to 0:15:58.560 --> 0:16:01.120 replace those jobs. Frankly, I feel that you have an 0:16:01.200 --> 0:16:04.360 entry level candidate. With AI as a companion, you can 0:16:04.400 --> 0:16:08.040 start to see meaningful levels of compounding of value. And 0:16:08.080 --> 0:16:11.240 so I do feel like there's two categories of people 0:16:11.280 --> 0:16:13.920 that are actually doing really well with AI. The early 0:16:14.080 --> 0:16:17.120 entrants who've actually been AI native that know and have 0:16:17.160 --> 0:16:19.120 a very different instinct for how to use AI. And 0:16:19.880 --> 0:16:22.840 then the second ones are the highly experienced group of 0:16:22.840 --> 0:16:24.920 people that are using it well. What we need to 0:16:24.920 --> 0:16:26.520 do is we need to make sure that we train 0:16:27.280 --> 0:16:30.200 the people in the middle so that they're all not 0:16:30.440 --> 0:16:32.640 fearful of AI, but they're in fact starting to think 0:16:32.640 --> 0:16:35.640 about this as an accelerant to their personal productivity as 0:16:35.680 --> 0:16:37.479 well as the productivity of the companies. 0:16:37.200 --> 0:16:38.200 You're slowly converting. 0:16:38.240 --> 0:16:38.440 Me G. 0:16:38.520 --> 0:16:41.400 So it's wonderful to catch up. Enjoy London, So glad John, 0:16:41.520 --> 0:16:43.680 We'll see with New York soon. GT for town there 0:16:43.800 --> 0:16:55.760 at Cisco, Welly of black Rock Rights. In a world 0:16:55.760 --> 0:16:59.600 of weak macro anchors, mega forces like artificial intelligence are 0:16:59.600 --> 0:17:02.680 the new long term anchor for achieving durable returns. 0:17:02.960 --> 0:17:05.320 Why joint us now for more? Wykenmonic, good morning. 0:17:05.440 --> 0:17:07.240 Is it getting harder to find a long term macro 0:17:07.320 --> 0:17:09.000 anchor in this environment. 0:17:08.760 --> 0:17:12.000 Well, long term macro anchors have been lost. You look 0:17:12.040 --> 0:17:15.520 at inflation anchors, you look at long term growth anchors, 0:17:15.600 --> 0:17:18.200 you look at long term physical anchors, you look at 0:17:18.440 --> 0:17:22.719 even anchors in institutional confidence like the safe haven status 0:17:22.800 --> 0:17:25.800 of the dollar, but maybe also independence of the fact. 0:17:25.880 --> 0:17:28.960 So it's really hard to find long term macro anchor, 0:17:29.000 --> 0:17:33.480 which is why we actually think that it's easier to 0:17:33.520 --> 0:17:37.639 think about tactical as a location because of the mutable 0:17:37.720 --> 0:17:42.360 laws around us that and global supply chain. Paradoxically, there 0:17:42.400 --> 0:17:45.959 is greater certainty in our assessment in the near term 0:17:46.160 --> 0:17:47.800 than in the long term, which is the opposite of 0:17:47.840 --> 0:17:50.320 what has been always the case, which is why we're 0:17:50.320 --> 0:17:54.320 moving k targets in terms of the budget deployment from 0:17:54.440 --> 0:17:58.440 longer term strategic as a location towards tactical as location. 0:17:58.520 --> 0:18:01.800 This is one of the best tactical investment environments. 0:18:01.880 --> 0:18:04.280 So what's the tactical approach currently for you and the team? 0:18:04.720 --> 0:18:07.560 Right now? We are investing for the here and now, 0:18:07.640 --> 0:18:10.439 which is to recognize that so far this year we 0:18:10.560 --> 0:18:13.400 have focused a lot on tariffs, and we're still focusing 0:18:13.600 --> 0:18:16.280 on tariffs, which is very different from Trump term one 0:18:16.400 --> 0:18:19.560 where we had text cuts first and then we had tariffs. 0:18:19.560 --> 0:18:22.800 But now focus is going to shift also towards text cuts, 0:18:22.920 --> 0:18:28.480 also towards deregulation, potentially unleashing animal spirit. And yes, tariffs 0:18:28.480 --> 0:18:31.359 headlines are still flying around. But we do think that 0:18:31.440 --> 0:18:33.879 because of the constraints and immutable laws that I just 0:18:33.920 --> 0:18:37.159 talked about, we're going to get to some sort of 0:18:37.240 --> 0:18:42.240 lending spot, not likely derailing the tactical kind of risk 0:18:42.280 --> 0:18:44.159 con view that we still have. So right now, we 0:18:44.280 --> 0:18:48.520 still like US equities, and I would observe that at 0:18:48.520 --> 0:18:52.080 this juncture is no longer consensus and speakture investors across 0:18:52.119 --> 0:18:54.840 the world, Europe, the APEC. I would think that it's 0:18:54.880 --> 0:18:57.359 more divisive right now, but we still like it. The 0:18:57.400 --> 0:19:01.760 condition for sustained rest of the world europe outperformance over 0:19:02.000 --> 0:19:04.399 US haven't been met, which is why we're not We 0:19:04.480 --> 0:19:09.760 haven't chased the European equity our performance beyond closing the 0:19:09.840 --> 0:19:11.560 underweight too neutral earlier in the year. 0:19:11.760 --> 0:19:14.359 So you keep mentioning the immutable economic laws, and I 0:19:14.400 --> 0:19:16.399