WEBVTT - What Worries UAW’s Striking Workers 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait Inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.800 --> 0:00:21.840 All Right, everybody, Well, one of the risk overhangings on 0:00:21.840 --> 0:00:23.960 financial Marcus, we've been talking about this certainly over the 0:00:24.040 --> 0:00:26.480 last week or so, is that UAW strike now and 0:00:26.520 --> 0:00:29.440 its second week, with economic losses already estimated at one 0:00:29.440 --> 0:00:32.879 point six billion dollars. The standoff between the union and 0:00:33.000 --> 0:00:36.360 the big US automakers remained far apart on key issues 0:00:36.440 --> 0:00:39.400 such as pay benefits, also on terms I own. A. 0:00:39.440 --> 0:00:42.320 Bloomberg News team spoke with struck some striking workers about 0:00:42.360 --> 0:00:44.839 what has them worried and whether politicians can change that. 0:00:45.200 --> 0:00:47.239 Here with the latest on the situation and what's on 0:00:47.280 --> 0:00:50.440 the minds of those striking workers is Bloomberg News Real 0:00:50.479 --> 0:00:53.280 Economy Team reporter Mark Niquette. He joins us on so 0:00:53.400 --> 0:00:56.760 Marco to have you this afternoon, some really fantastic reporting 0:00:56.880 --> 0:01:01.400 from the inside with you, Gaby Koppola, Josh Idelsin. First up, though, 0:01:01.480 --> 0:01:03.440 just describe sort of the mood or the moods of 0:01:03.480 --> 0:01:06.280 those that you know, you spoke to, who you worked with, 0:01:06.360 --> 0:01:07.839 how would you describe how they're feeling. 0:01:09.319 --> 0:01:12.639 Well, we essentially went to the picket lines of the 0:01:12.680 --> 0:01:16.119 factories that are on strike. The UAW is doing sort 0:01:16.120 --> 0:01:19.959 of a unique approach this time where they're striking all 0:01:20.000 --> 0:01:23.520 three autoworkers a big three at the same time, but 0:01:23.720 --> 0:01:27.360 limited plants, not all clients. And the workers who are 0:01:27.360 --> 0:01:30.640 out on strike, I would say it's sort of a 0:01:30.680 --> 0:01:34.000 mixed mood. They're happy to be fighting for what they 0:01:34.040 --> 0:01:38.480 think they deserve, particularly after they gave up pay and 0:01:38.560 --> 0:01:43.720 benefits after the financial collapse, but they're also worried about 0:01:44.040 --> 0:01:45.600 obviously their jobs and. 0:01:46.440 --> 0:01:48.720 The future, particularly for their job security. 0:01:49.320 --> 0:01:51.680 One of the big issues on the picket line is 0:01:52.360 --> 0:01:55.920 the transition to electric vehicles. It's sort of emerged as 0:01:55.960 --> 0:01:59.520 a big issue in this strike right now because the. 0:01:59.640 --> 0:02:02.400 Auto workers are very concerned. 0:02:02.240 --> 0:02:05.880 That the fact that it takes fewer workers to put 0:02:05.880 --> 0:02:09.440 together these electric vehicles, this could mean less job security 0:02:09.440 --> 0:02:09.959 in the future. 0:02:10.400 --> 0:02:12.760 You know what struck me. I think it was Jacob Bishop, 0:02:13.200 --> 0:02:15.840 aged twenty three, you talked to and it said, you know, 0:02:15.919 --> 0:02:18.480 in this transition to EV's like they get it, they 0:02:18.560 --> 0:02:22.560 understand it's happening. He said. Many of us have accepted 0:02:22.560 --> 0:02:24.440 that we want to make sure that in this transition 0:02:24.520 --> 0:02:26.320 the companies don't try and use that as a little 0:02:26.320 --> 0:02:28.600 bit of a scapegoat to try and transition. They are 0:02:28.639 --> 0:02:31.400 relatively good paying union jobs, and you do wonder you know, 0:02:31.400 --> 0:02:34.440 it wouldn't be the first time a company, you know, 0:02:34.480 --> 0:02:36.520 kind of as we're going through, transition is a tough time. 0:02:36.560 --> 0:02:40.520 And sorry, you know so, I mean, you understand really 0:02:40.560 --> 0:02:44.400 these real concerns of these workers who are wondering, like 0:02:44.560 --> 0:02:47.000 do we get lost in the shuffle right? 0:02:47.080 --> 0:02:49.600 And then again, like you said, some of our outright 0:02:49.680 --> 0:02:52.040 seguente about it, they would say, look, you know, we know, 0:02:52.639 --> 0:02:55.519 you know, coal miners lost their jobs and when we 0:02:55.600 --> 0:02:58.200 after the industrial revolution, you know, this is just sort 0:02:58.200 --> 0:03:01.800 of the natural progress of things and has consequences. But 0:03:01.880 --> 0:03:05.360 like I said that they definitely want to see in 0:03:05.400 --> 0:03:07.000 the short term at least. 0:03:06.800 --> 0:03:10.280 That they're taken care of. In particular, they. 0:03:10.200 --> 0:03:13.720 Want to see pensions restored. It's going to be a 0:03:13.720 --> 0:03:16.880 big issue in the negotiations because it's not clear yet, 0:03:16.960 --> 0:03:19.480 you know, how we'll get to an agreement with the 0:03:19.760 --> 0:03:23.400 automakers and and the u A w on pensions, but 0:03:23.680 --> 0:03:26.800 they want to have that sense of security that you know, 0:03:27.080 --> 0:03:30.760 they'll have something when they retire, in addition to the 0:03:30.800 --> 0:03:33.280 colon and the pay increase and the other benefits that 0:03:33.280 --> 0:03:33.919 they're looking for. 0:03:34.160 --> 0:03:35.560 We want to ask you about Trump, because that was 0:03:35.560 --> 0:03:37.280 certainly a factor, but I want to also ask you 0:03:37.360 --> 0:03:42.560 what happened. What happened to those auto jobs that used 0:03:42.560 --> 0:03:46.160 to provide a really good middle class you know living, 0:03:46.480 --> 0:03:49.119 you know, a family that could not only just survive, 0:03:49.240 --> 0:03:50.480 they could actually thrive. 0:03:52.400 --> 0:03:54.800 Yeah, that's another issue in the strike is sort of 0:03:54.800 --> 0:03:57.160 these tear pays where you know, the folks who come 0:03:57.200 --> 0:04:01.720 into the shops in the union at you know, the 0:04:01.840 --> 0:04:04.000 entry level are paid less than the workers who have 0:04:04.040 --> 0:04:07.720 been there longer. And you know, there's there's real concern that, 0:04:07.920 --> 0:04:10.480 particularly on the on the entry level, it's not a 0:04:10.520 --> 0:04:12.960 livable wage or it's not a wage that would allow 0:04:13.360 --> 0:04:16.200 even these autoworkers to buy the products that they're making, 0:04:16.320 --> 0:04:20.600 the cars that they're building. So it's and it's it's 0:04:20.640 --> 0:04:23.039 a thorny issue because this is the sort of the 0:04:23.080 --> 0:04:25.520 pay structure that the automakers have worked out in the 0:04:25.520 --> 0:04:28.440 industry has worked out to allow them, the RT makers, 0:04:28.440 --> 0:04:31.919 to be profitable. But you're right, it doesn't work for 0:04:32.000 --> 0:04:34.080 a lot of workers, particularly at the lower end. 0:04:34.160 --> 0:04:35.800 I mean, let's talk numbers here, because one thing that 0:04:35.839 --> 0:04:38.880 we have heard throughout the strike and even ahead of 0:04:38.880 --> 0:04:41.120 the strike is the way that real wages have come 0:04:41.160 --> 0:04:43.600 down as a result of inflation, but also as a 0:04:43.640 --> 0:04:46.200 result of their wages just not keeping up with inflation 0:04:46.240 --> 0:04:49.080 and not getting raises. One person who you and the 0:04:49.080 --> 0:04:52.240 team spoke to, Robert Schuch, says that he earns only 0:04:52.279 --> 0:04:54.800 two dollars and fifty three cents an hour more than 0:04:54.839 --> 0:04:56.800 he did all the way back in two thousand and eight, 0:04:56.839 --> 0:04:58.920 and that he and his wife they have to work 0:04:59.000 --> 0:05:01.960 to put in overtime to make ends meet. Uh, this 0:05:02.000 --> 0:05:04.240 is pretty shocking to see, given that how long ago 0:05:04.320 --> 0:05:06.719 that was, how much more expensive things are now, and 0:05:06.760 --> 0:05:10.440 their wages are still haven't haven't kept anywhere close to inflation. 0:05:11.600 --> 0:05:14.120 Yeah, and that's another factor that's that's playing out right 0:05:14.160 --> 0:05:16.960 now with the strike, and that's just the high inflation environment. 0:05:17.160 --> 0:05:19.120 You know who we are in the economy right now. 0:05:20.040 --> 0:05:22.279 You know, these workers, like like everybody else, you know, 0:05:22.320 --> 0:05:25.200 they have to buy red milk and gas and and 0:05:25.200 --> 0:05:28.520 and they're seeing the prices moderate for sure, but you know, 0:05:28.640 --> 0:05:32.320 not not enough for them to make ends meet. And 0:05:32.440 --> 0:05:34.800 you know, it's sort of another worry because you know, 0:05:34.839 --> 0:05:36.760 they do get a strike benefit while they're on the 0:05:37.120 --> 0:05:37.920 picket line, but. 0:05:37.880 --> 0:05:42.200 It's nowhere near with their salary. Is so more of 0:05:42.240 --> 0:05:43.200 a complicated actor. 0:05:43.440 --> 0:05:46.400 I want to ask you, you and Gabby and Josh, 0:05:47.000 --> 0:05:49.200 what did as you were talking to workers, what was 0:05:49.200 --> 0:05:51.200 the mood or the moods of those that you worked 0:05:51.240 --> 0:05:54.640 with and and just kind of, you know, just get 0:05:54.680 --> 0:05:57.120 a feel of how they were feeling. Were they just 0:05:57.560 --> 0:06:00.000 you know, were they angry? Were they. 0:06:01.279 --> 0:06:02.560 I don't know, like how. 0:06:02.480 --> 0:06:04.240 Would you describe them? Was there a couple of words 0:06:04.279 --> 0:06:05.839 to describe overall the group? 0:06:06.920 --> 0:06:08.960 Yeah, I don't know if there was a sort of 0:06:08.960 --> 0:06:13.240 a consistent theme there. I mean it was it was almost, 0:06:13.440 --> 0:06:15.839 you know, depending on the individual and what the individual 0:06:15.880 --> 0:06:16.919 circumstances were. 0:06:16.960 --> 0:06:20.159 Some were definitely angry, you know that they had to 0:06:20.160 --> 0:06:21.400 be out on this picket line. 0:06:22.200 --> 0:06:24.919 They felt like, you know, this, this this could have 0:06:24.920 --> 0:06:26.040 been avoided that you. 0:06:26.000 --> 0:06:29.719 Know, the company, particularly with the company executives making millions 0:06:29.720 --> 0:06:32.160 of dollars, they feel like, you know, there could have 0:06:32.240 --> 0:06:35.720 been more spreading around of the money and you know, taking. 0:06:35.480 --> 0:06:37.520 Care of them without having to go on strike. 0:06:38.360 --> 0:06:40.800 Others are are sort of happy, i would say, for 0:06:41.160 --> 0:06:43.359 the ability to fight for what they think they deserved. 0:06:44.360 --> 0:06:46.839 So while they would prefer, I'm sure, not to be 0:06:46.920 --> 0:06:49.599 on strike, you know, they're certainly willing to, you know, 0:06:50.440 --> 0:06:53.080 stand next to the barrel and you know, wave the signs. 0:06:53.080 --> 0:06:56.520 And I think they're also encouraged by the support they're getting. 0:06:56.560 --> 0:07:00.479 If you stand on the picket lines in Detroit, you know, 0:07:00.760 --> 0:07:04.040 cars passing our hopey horns, and you know folks are 0:07:04.040 --> 0:07:09.239 bringing in uh water and you know, donations to buttress 0:07:09.320 --> 0:07:12.200 the workers. So I think there's a society they are 0:07:12.240 --> 0:07:13.360 being supported in the strike. 0:07:13.480 --> 0:07:16.200 Well, the reporting you did and Gabby Coppola and Josh Eidelson, 0:07:16.240 --> 0:07:18.800 it really just give us a feel of truly how 0:07:18.840 --> 0:07:21.720 these guys are feeling and why they're at on strike, 0:07:21.800 --> 0:07:23.960 So we so appreciate it. Bloomberg News Real Economy Team 0:07:24.000 --> 0:07:27.240 reporter Mark Naquette joining us on zoom and Columbus, Ohio. 0:07:27.640 --> 0:07:31.240 You're listening to the Bloomberg Business Week podcast. Catch us 0:07:31.240 --> 0:07:34.720 live weekday afternoons from three to six Eastern Listen. 0:07:34.480 --> 0:07:37.480 On Bloomberg dot com, the iHeartRadio app, and the. 0:07:37.440 --> 0:07:54.240 Bloomberg Business app. Or watch us live on YouTube. 0:07:54.560 --> 0:07:56.720 All right, everybody, This week has been full of AI 0:07:56.840 --> 0:07:57.840 related news. 0:07:58.000 --> 0:08:00.400 We just talked about Nvidia, the raid over in their 0:08:00.440 --> 0:08:03.920 French offices, concerns about anti competitive practices. Of course, that 0:08:03.960 --> 0:08:06.840 has been the AI stock I feel like of the year, 0:08:06.920 --> 0:08:09.360 or at least one of them meta platforms. Those shares higher 0:08:09.880 --> 0:08:13.040 on today, I should say, in the trade after Alice 0:08:13.040 --> 0:08:15.680 Wad and positively on the AI potential of the new 0:08:15.760 --> 0:08:19.400 artificial intelligence features that we talked about yesterday. The company 0:08:19.480 --> 0:08:24.440 unveiling its annual developers conference yesterday and veiled there. Wall 0:08:24.480 --> 0:08:26.840 Street Journal also reporting earlier this week that Open Ai, 0:08:27.000 --> 0:08:30.200 the company behind chat chept, tim exploring a sale of 0:08:30.240 --> 0:08:32.240 shares that could value the company up to ninety billion. 0:08:32.280 --> 0:08:33.080 That's a pretty big deal. 0:08:33.200 --> 0:08:34.720 It's a huge deal. Okay, So we know we can 0:08:35.160 --> 0:08:38.840 use AI to chat with Tom Brady if you're soon, 0:08:38.840 --> 0:08:41.240 if you're using meta platforms new Thing or Snoop dogg 0:08:42.000 --> 0:08:44.440 or like you know, help you with recipes if you're 0:08:44.480 --> 0:08:46.640 using chat gpt. But what about AI when it comes 0:08:46.720 --> 0:08:49.080 to medicine, Carol? How can it help doctors make better 0:08:49.080 --> 0:08:51.760 decisions and ultimately make us healthier and live longer. 0:08:51.840 --> 0:08:54.520 All right, well with us to talk about that. Elizabeth Stoddinger. 0:08:54.760 --> 0:08:57.480 She is managing board member at Seamen's Health and Years. 0:08:57.640 --> 0:08:59.800 It's a fifty seven billion dollar medical tech company that 0:08:59.800 --> 0:09:03.840 does medical imaging, testing, diagnostics and more. Delighted to have 0:09:03.840 --> 0:09:06.920 her with us on Zoom from Munich, Germany. Elizabeth, thank 0:09:06.960 --> 0:09:09.200 you so much for joining us on Bloomberg Business Week. 0:09:09.720 --> 0:09:13.560 I think we are all curious about the value of 0:09:13.640 --> 0:09:17.080 AI as it starts to seep into all walks of 0:09:17.120 --> 0:09:20.600 life personally and professionally. Give us some insight about how 0:09:20.640 --> 0:09:22.040 you all are thinking about it. 0:09:24.000 --> 0:09:27.000 If you think of a world where getting healthy and 0:09:27.040 --> 0:09:31.640 staying healthy is a right and not a luxury, regardless 0:09:31.640 --> 0:09:34.480 of whether you are in Vietnam or a head of state. 0:09:35.080 --> 0:09:37.280 If that's a vision you want to buy into and 0:09:37.400 --> 0:09:40.480 you believe in, then AI actually can be one of 0:09:40.559 --> 0:09:43.120 the leavers that can help us get there. 0:09:43.280 --> 0:09:45.400 Okay, So what does that look like in terms of 0:09:45.480 --> 0:09:47.480 diagnostic imaging? I mean this is when I think about 0:09:47.520 --> 0:09:51.240 a lot. You know, we have people reading mammograms, and 0:09:51.360 --> 0:09:55.960 people reading mammograms miss things, They make mistakes. 0:09:57.280 --> 0:10:02.160 That's absolutely right, because reading mammograph is quite it's not 0:10:02.240 --> 0:10:04.640 so easy to do and you need a lot of experience. 0:10:04.679 --> 0:10:07.800 And that is one of the beautiful use cases and 0:10:07.840 --> 0:10:14.840 examples where artificial intelligence really can help physicians find the 0:10:14.840 --> 0:10:18.000 most suspicious parts of the mammogram much faster and also 0:10:18.040 --> 0:10:24.120 can help with guiding attention to potentially suspicious lesions and 0:10:24.200 --> 0:10:28.960 thereby support physicians to make diagnosis in a more accurate 0:10:29.040 --> 0:10:32.880 way and also look after more patients. So this is 0:10:32.920 --> 0:10:37.520 actually one of the really very real use cases which 0:10:37.520 --> 0:10:39.400 already make a difference for patients today. 0:10:39.480 --> 0:10:41.719 Elizabeth, as a world globally, are we all going to 0:10:41.760 --> 0:10:43.920 work together on this so that we can get to 0:10:45.559 --> 0:10:49.200 the power of generative AI and its impact on the 0:10:49.240 --> 0:10:53.160 global world sooner rather than later. And I asked that 0:10:53.240 --> 0:10:58.040 because you have is Tim reminded me incredible experience working overseas, 0:10:58.200 --> 0:11:03.520 especially in China in particular you lead the Semen's Health 0:11:03.559 --> 0:11:06.840 and Ear's business in Asia Pacific. There's just lots of 0:11:06.880 --> 0:11:09.640 experience with that at a time where there's lots of 0:11:09.800 --> 0:11:13.319 global tensions. I mean, just this week or we recently 0:11:13.320 --> 0:11:17.560 talked about technology rules and the EU model versus the 0:11:17.640 --> 0:11:20.960 US model. Versus the Chinese model and how it plays out. 0:11:21.040 --> 0:11:25.679 So give us some insight and smart narrative if you will, 0:11:25.760 --> 0:11:27.719 or a smart narrative on how we need to think 0:11:27.720 --> 0:11:29.760 about this and what kind of collaboration we need. 0:11:31.880 --> 0:11:36.360 If you think about building high quality AI solutions which 0:11:36.360 --> 0:11:39.720 make a benefit for patients, there is a few ground 0:11:39.840 --> 0:11:42.320 rules you have to follow. First of all, you have 0:11:42.400 --> 0:11:46.720 to make it easy for physicians to adopt the tools 0:11:46.720 --> 0:11:50.760 and the possibilities of AI in their tools. And secondly, 0:11:50.840 --> 0:11:54.319 and this is very important, you need high quality data 0:11:54.360 --> 0:11:56.560 and you need lots of it. And in order to 0:11:56.679 --> 0:12:02.280 provide that strong foundation to build meaningful and impactful AI algorithms, 0:12:02.920 --> 0:12:09.280 you do benefit from leveraging a global network to collect 0:12:09.320 --> 0:12:12.440 the images. Make sure you annotate the images in a 0:12:12.440 --> 0:12:16.360 good way that you can use them for training AI algorithms. 0:12:16.559 --> 0:12:20.560 So we collaborate with scientists and clinical partners all over 0:12:20.600 --> 0:12:25.200 the world. We've collected more than a billion images and 0:12:25.400 --> 0:12:28.960 we then feed these images into our supercomputer, which is 0:12:29.080 --> 0:12:32.160 actually based in the United States, and we call the 0:12:32.200 --> 0:12:36.200 computer Charlocke because it helps us find the most relevant 0:12:36.240 --> 0:12:37.679 bits and pieces of information. 0:12:39.440 --> 0:12:42.160 I want to go back to just talking about China, 0:12:42.200 --> 0:12:45.719 because you did spend so much time in China, and 0:12:45.960 --> 0:12:49.439 I'm curious, Elizabeth, you must still know people on the 0:12:49.480 --> 0:12:51.600 ground there. We've talked so much over the last few 0:12:51.600 --> 0:12:54.480 months about the economic woes facing China. What are you 0:12:54.520 --> 0:12:56.280 hearing from your contacts there right now. 0:12:58.440 --> 0:13:02.080 I mean, China is and always has been a very 0:13:02.120 --> 0:13:05.560 fascinating place for me personally. It's a place where I've 0:13:05.600 --> 0:13:08.360 spent a lot of time, where I keep going back 0:13:08.400 --> 0:13:12.800 to regularly, and I've always been really inspired by the 0:13:12.960 --> 0:13:15.840 energy and by the drive of the people in China, 0:13:15.880 --> 0:13:20.319 by the willingness to continue to build their country and 0:13:20.840 --> 0:13:24.800 their economy. Now, following the experience of the last three 0:13:24.880 --> 0:13:28.480 years with the very stringent COVID measurements, I mean, there 0:13:28.559 --> 0:13:32.920 is some thought process going on where people go back 0:13:32.920 --> 0:13:36.880 and say, well, maybe we could have done this differently 0:13:36.960 --> 0:13:41.880 as well, and people are feeling the impact now of 0:13:41.960 --> 0:13:46.480 the slower economy. At the same time, I continue to 0:13:46.520 --> 0:13:50.839 be optimistic and positive about China. The economy continues to grow, 0:13:50.920 --> 0:13:53.760 and I'm quite confident we will see it picking up 0:13:53.840 --> 0:13:54.160 a game. 0:13:54.400 --> 0:13:56.880 Put on a corporate put on a corporate perspective. Is 0:13:57.000 --> 0:14:01.439 China still the friend of EU? Corporations or companies in 0:14:01.480 --> 0:14:04.560 the EU, companies in the United States, is there going 0:14:04.600 --> 0:14:07.640 to be that collaboration on things like new science or 0:14:07.640 --> 0:14:09.640 new technology. 0:14:10.480 --> 0:14:12.920 I mean, for us, over the past years, we have 0:14:13.600 --> 0:14:20.120 moved focus into also understanding what do patients in China need. 0:14:20.600 --> 0:14:24.480 China has a population of one point four billion people, 0:14:24.720 --> 0:14:29.880 and these people need healthcare and want better healthcare. So 0:14:30.040 --> 0:14:34.560 we have added also our and d activities in China 0:14:34.600 --> 0:14:38.400 to our global network, and we continue to believe that 0:14:38.640 --> 0:14:41.800 for the benefit of patients globally, there is value in 0:14:42.320 --> 0:14:46.480 keeping the collaboration and working together on addressing some of 0:14:46.520 --> 0:14:52.360 the most some of the most challenging topics for mankind, like, 0:14:52.480 --> 0:14:54.760 for instance, addressing the threat of cancer. 0:14:55.920 --> 0:14:58.080 Just one last question and just got about thirty forty 0:14:58.080 --> 0:15:02.280 seconds here, how are you thinking about how AI could 0:15:02.360 --> 0:15:05.800 really change the way medicine works. 0:15:08.080 --> 0:15:13.880 ICAI as a phenomenal opportunity because it will help us 0:15:14.800 --> 0:15:17.400 to address some of the most pressing needs that we're 0:15:17.440 --> 0:15:20.360 facing in healthcare systems. We don't have enough people. There 0:15:20.440 --> 0:15:24.440 is mistakes that people grow older, there is certain diseases 0:15:24.480 --> 0:15:27.680 which become chronic, and in all of these areas AI 0:15:28.200 --> 0:15:31.160 can and will make a difference. So to me, AI 0:15:31.480 --> 0:15:34.920 is really it's not a threat, it's an opportunity and 0:15:35.000 --> 0:15:37.760 if we make right use of it, it can help 0:15:37.840 --> 0:15:41.680 us focus us humans on what we do best and 0:15:41.840 --> 0:15:45.320 get the support of the AI to treat more people 0:15:45.680 --> 0:15:48.880 in more places and on a higher quality level around 0:15:48.880 --> 0:15:49.240 the world. 0:15:49.280 --> 0:15:52.040 Elizabeth a great. I really appreciate your time, Elizabeth Stottinger. 0:15:52.120 --> 0:15:54.520 She is managing board member of its Semen's Health and Yours. 0:15:54.600 --> 0:15:59.440 Joining us on zoom from Munich, Germany, you're. 0:15:59.280 --> 0:16:02.920 Listening to the Bloomberg Business Week podcast. Catch us live 0:16:02.960 --> 0:16:06.760 weekday afternoons from three to six Eastern on Bloomberg Radio, 0:16:06.840 --> 0:16:10.160 the Bloomberg Business app, and YouTube. You can also listen 0:16:10.240 --> 0:16:13.360 live on Amazon Alexa from our flagship New York station 0:16:13.800 --> 0:16:16.840 Just Say Alexa playing Bloomberg eleven thirty. 0:16:17.800 --> 0:16:20.200 So over the summer. In July, to be exact, Bloomberg 0:16:20.240 --> 0:16:23.280 News came out reporting that US venture capital deal spending 0:16:23.320 --> 0:16:26.360 fell by half in the second quarter, funding fewer startups, 0:16:26.440 --> 0:16:28.440 especially at the early stages of a company's life. This 0:16:28.480 --> 0:16:31.000 is according actually to data from research firm Pitchbooks. So 0:16:31.160 --> 0:16:33.600 we'll be looking for kind of the update on these numbers. 0:16:33.600 --> 0:16:34.960 You know what, they say you got to adjust for 0:16:35.000 --> 0:16:37.440 one time things. Okay, So if you do the math, 0:16:37.480 --> 0:16:39.680 take out that more than six five billion dollars that 0:16:39.720 --> 0:16:42.880 investors spent on payments company Stripe, and the total looks 0:16:42.880 --> 0:16:46.360 even worse. That's according to Pitchburg analyst Kyle Stanford. We 0:16:46.440 --> 0:16:47.880 got a great guest on the VC world. 0:16:48.000 --> 0:16:49.760 Yes, let's get to it. Michael Marx is with us, 0:16:49.760 --> 0:16:52.800 founding managing partner at the venture capital firm Celesta Capital. 0:16:52.840 --> 0:16:55.400 He's with us on Zoom from Mulla, Nebraska. By the way, 0:16:55.440 --> 0:16:58.000 his firm is funded over one hundred tech companies twenty 0:16:58.080 --> 0:17:01.400 nine exits to date, and prior to Celestia, Michael was 0:17:01.440 --> 0:17:04.439 a founding partner at Riverwood Capital, a Menlo Park based 0:17:04.720 --> 0:17:07.520 private equity firm. He also served as partner and senior 0:17:07.560 --> 0:17:10.080 advisor at kk R. He'spent thirteen years of CEO and 0:17:10.080 --> 0:17:13.280 then chairman of Flextronics International. Also served as an interim 0:17:13.320 --> 0:17:15.960 CEO a Tesla three months back in seven. So he 0:17:16.080 --> 0:17:19.320 comes at this just to remind everybody with a great perspective. Michael, 0:17:19.359 --> 0:17:21.119 great to have you back with us. How are you 0:17:21.200 --> 0:17:23.639 and how would you describe the VC space right now? 0:17:25.080 --> 0:17:28.160 Well, thanks for having me on I've been great. Look, 0:17:28.200 --> 0:17:29.960 the VC space is fantastic. 0:17:30.040 --> 0:17:30.320 Now. 0:17:30.359 --> 0:17:33.600 There's lots of lots of noise in the system because 0:17:33.600 --> 0:17:35.600 of you know, the stock market going down and less 0:17:35.640 --> 0:17:40.680 I pos and so on, but it is an incredibly 0:17:40.800 --> 0:17:44.640 active environment. We're seeing better companies than we've really ever seen. 0:17:44.720 --> 0:17:45.240 It's great. 0:17:45.440 --> 0:17:49.080 What's so great about it? Well, what's great? I got 0:17:49.080 --> 0:17:50.480 the memo. But rates are high right now? 0:17:51.440 --> 0:17:55.440 Yeah, Actually that that's actually helping the in the venture world. 0:17:56.040 --> 0:17:59.840 So look what you know, values go up and go down. 0:18:00.080 --> 0:18:03.320 It's better for venture capitalists when values are down. And 0:18:03.400 --> 0:18:06.040 values are down now because of the reasons we just 0:18:06.080 --> 0:18:09.480 talked about it, there's you know, there's there's less exits 0:18:09.520 --> 0:18:14.280 and and frankly, the venture firms are husbanding their cash 0:18:14.320 --> 0:18:17.639 to be able to support their best companies, and so 0:18:17.720 --> 0:18:20.800 there's less money for new companies, which is which is 0:18:20.840 --> 0:18:22.960 good if you have capital to deploy, which we do. 0:18:23.760 --> 0:18:26.600 What's great about this environment and and and I think 0:18:26.600 --> 0:18:31.320 it's what really defines venture capital these days is that 0:18:31.520 --> 0:18:33.359 you know, venture I've been around for a long time. 0:18:33.480 --> 0:18:36.120 Venture capital started in the sixties and the seventies with 0:18:36.200 --> 0:18:38.439 you know, Sequoia Capital and Kliner Perkins and any of 0:18:38.440 --> 0:18:41.560 these companies you know started come you know, out of 0:18:41.640 --> 0:18:46.679 fair Child Semiconductor, National Semiconductor there for the name Silicon Valley, 0:18:47.119 --> 0:18:51.000 and so the venture business in those days was pretty 0:18:51.040 --> 0:18:55.119 much limited to semiconductors. Then you had computers and cell phones, 0:18:55.160 --> 0:18:59.119 whole computing revolution, you know, than than enterprise software and 0:18:59.320 --> 0:19:03.800 sasact and then came e commerce. And now here you 0:19:03.840 --> 0:19:06.600 are in twenty twenty three with you still have all 0:19:06.760 --> 0:19:12.679 those I'm sure you recognize what's happening to the semiconductor world. 0:19:13.000 --> 0:19:16.280 But now we have you know, bioconvergence, all kinds of biotechnology, 0:19:16.280 --> 0:19:19.840 of climate investing, of energy investing, and so there are many, 0:19:19.920 --> 0:19:22.159 many more companies and more choices to invest in it. 0:19:22.240 --> 0:19:24.080 So it's a great time to be a venture capitalist. 0:19:24.480 --> 0:19:28.040 Hey, okay, forgive me here, but this is you're based 0:19:28.040 --> 0:19:31.119 in Menlo Park. We spoke to Steve Case yesterday who 0:19:31.119 --> 0:19:34.440 talked all about the opportunities between California and New York. 0:19:34.480 --> 0:19:36.840 You're in Mullen, Nebraska right now. What brings you to Mullen. 0:19:38.400 --> 0:19:40.639 I'm just visiting friends, okay. 0:19:40.160 --> 0:19:42.200 Because this is a tiny town with like five hundred people. 0:19:42.920 --> 0:19:43.680 I do exactly. 0:19:43.920 --> 0:19:46.000 I don't know if you were exploring some venture opportunities 0:19:46.080 --> 0:19:49.080 in Mullen. I am, okay, we'll tell Steve case. 0:19:49.520 --> 0:19:51.600 Well, it's interesting, you sound very upbeat and you talked 0:19:51.600 --> 0:19:54.040 about the rate environment. How that's a helpful to you. 0:19:54.359 --> 0:19:56.760 I also was curious about before we get into some 0:19:56.760 --> 0:20:00.159 of the areas you're investing the private lending space. I 0:20:00.200 --> 0:20:02.000 know they tend to play more in the middle market 0:20:02.000 --> 0:20:04.960 and it's not necessarily early in startups, but is that 0:20:05.040 --> 0:20:08.480 at all having an impact on deals or valuations for you? 0:20:09.560 --> 0:20:12.399 It is, in fact, it's having a big impact in 0:20:12.440 --> 0:20:14.919 a couple of ways. One is that you know, the 0:20:15.040 --> 0:20:18.280 cost of borrowing, you know, if you think about venture debts. 0:20:18.280 --> 0:20:21.719 So venture debt, which is important in the venture industry, 0:20:21.760 --> 0:20:24.160 has taken two hits. The first hit was Selgan Valley 0:20:24.160 --> 0:20:27.280 Bank went out and that was the biggest lenders to 0:20:27.440 --> 0:20:30.399 the space. And the second is the cost of capital 0:20:30.440 --> 0:20:33.119 has gone way up. And so when it comes to 0:20:33.280 --> 0:20:37.920 raising capital, for example from limited partners. You know, now 0:20:38.119 --> 0:20:41.399 limited partners can get can invest in credit funds and 0:20:41.440 --> 0:20:44.720 get twelve to fifteen percent IRRs without taking very much risk. 0:20:45.160 --> 0:20:48.200 And so that does siphon capital out of the out 0:20:48.240 --> 0:20:49.000 of the venture world. 0:20:49.680 --> 0:20:53.119 All right, so let's talk about where you're investing. We know, 0:20:53.320 --> 0:20:57.760 deep technologies where you play, so AI, semis, semi conductor's, biotech, 0:20:57.800 --> 0:21:01.520 cloud infrastructure. What's really exciting and active right now where 0:21:01.560 --> 0:21:05.160 you are looking and hungrily to kind of amp your 0:21:05.160 --> 0:21:06.719 exposure in the VC space. 0:21:07.600 --> 0:21:09.680 Well, thank you for that question. It's actually a really 0:21:09.680 --> 0:21:12.320 good question because there are lots of opportunities and we 0:21:12.400 --> 0:21:15.240 have to get focused. I'd say there are two areas 0:21:15.080 --> 0:21:19.159 that we find the most attractive right now. One is semiconductors. 0:21:19.280 --> 0:21:22.359 I mean, it's amazing how few people have wanted to 0:21:22.400 --> 0:21:24.960 invest in semiconductors over the last twenty or thirty years. 0:21:25.359 --> 0:21:27.280 And now you have you know, my good friend Jensen 0:21:27.320 --> 0:21:30.560 Wang at Nvidia, and you've got you know, hot Tan 0:21:30.720 --> 0:21:34.000 over Broadcom and Qualcomm and so on. You know, these 0:21:34.000 --> 0:21:36.320