WEBVTT - OpenAI Closes Door on CEO Sam Altman 0:00:00.080 --> 0:00:02.320 Hey, it's Carol and Tim and we have something new 0:00:02.360 --> 0:00:03.160 and exciting for you. 0:00:03.400 --> 0:00:06.680 Everything you love about Bloomberg Radio is now in your car. 0:00:06.880 --> 0:00:10.160 The new Bloomberg Business App now featuring Apple CarPlay and 0:00:10.160 --> 0:00:10.800 Android Auto. 0:00:10.920 --> 0:00:14.400 Listen to your favorite Bloomberg Radio stations anytime. 0:00:13.840 --> 0:00:17.280 Plus every Bloomberg podcast, the latest news, and more, all 0:00:17.320 --> 0:00:18.360 at the click of a button. 0:00:18.520 --> 0:00:21.560 It's free and simple to use. Just download the Bloomberg 0:00:21.600 --> 0:00:24.079 Business App on your smartphone and connect your phone to 0:00:24.160 --> 0:00:24.680 your car. 0:00:24.880 --> 0:00:27.880 The Bloomberg Business App now with Apple CarPlay and Android 0:00:27.920 --> 0:00:30.720 Auto features. Download it free in the Apple App Store 0:00:30.800 --> 0:00:31.920 or on Google Play. 0:00:32.040 --> 0:00:35.080 Presented by our sponsor, Interactive Brokers. 0:00:36.120 --> 0:00:40.960 This is Bloomberg BusinessWeek inside from the reporters and editors 0:00:41.000 --> 0:00:45.239 who bring you America's most trusted business magazine, plus global business, 0:00:45.280 --> 0:00:49.440 finance and tech news. The Bloomberg Business Week Podcast with 0:00:49.600 --> 0:01:01.600 Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:01:00.080 --> 0:01:03.920 All Right, they're out there, may be back in. 0:01:04.160 --> 0:01:04.520 They're not. 0:01:04.680 --> 0:01:09.280 They're now hired by Microsoft the streaming services already battling. Probably, 0:01:09.400 --> 0:01:11.760 I'm guessing to tell this high tech, high stake story. 0:01:12.000 --> 0:01:13.920 We are, of course, talking about the Palace coup that 0:01:13.959 --> 0:01:16.119 all began on Friday, led to the firing of open 0:01:16.160 --> 0:01:19.360 ai co founders Sam Altman and Greg Brockman, which led 0:01:19.400 --> 0:01:23.080 to so many questions, led to open AI's biggest shareholder 0:01:23.120 --> 0:01:27.399 and closest technology partner, Microsoft, then tim hiring the two 0:01:27.440 --> 0:01:31.759 to lead its new in house advanced artificial intelligence research team. 0:01:32.600 --> 0:01:34.960 And then you have the hundreds of open ai employees, 0:01:35.000 --> 0:01:38.800 including the board member that did the actual firing, then 0:01:38.840 --> 0:01:40.759 signing a letter to say that they were going to leave. 0:01:41.080 --> 0:01:44.600 So you have more than seven hundred of the employees 0:01:44.600 --> 0:01:45.080 at open. 0:01:44.920 --> 0:01:47.240 Ai, basically just about everybody, almost everybody. 0:01:47.280 --> 0:01:49.160 You can't see this on radio, guys, but for those 0:01:49.160 --> 0:01:51.520 who are on YouTube and Bloomberger originals, these are just 0:01:51.640 --> 0:01:54.680 some of the stories that I had printed out covering 0:01:54.880 --> 0:01:56.440 everything to do with open Ai. 0:01:56.560 --> 0:01:58.080 Do you know who spent a lot of his weekend 0:01:58.120 --> 0:01:59.040 writing those stories? 0:01:59.440 --> 0:01:59.760 Old Man? 0:02:00.320 --> 0:02:01.800 Thank god he did, because he's going to keep us 0:02:01.800 --> 0:02:02.919 all honest on this story. 0:02:03.080 --> 0:02:03.360 Yeah. 0:02:03.400 --> 0:02:05.320 He's a one man band and a key player to 0:02:05.360 --> 0:02:07.720 our incredible tech team that has worked all weekend to 0:02:07.720 --> 0:02:09.960 stay on top of the story. Carol, we got Ed Ludlow, 0:02:09.960 --> 0:02:12.280 co host of Bloomberg Technology, joining us on zoom from 0:02:12.360 --> 0:02:12.919 San Francisco. 0:02:13.000 --> 0:02:14.520 All right, so Ed, let's cut to the chase. 0:02:14.840 --> 0:02:16.840 I'm trying to think, what's the way to think about 0:02:16.840 --> 0:02:18.600 this story that I feel like we have to constantly 0:02:18.680 --> 0:02:21.040 check the headlines to see what's the latest. 0:02:21.080 --> 0:02:22.160 How are you thinking about it? 0:02:22.200 --> 0:02:22.359 Here? 0:02:22.400 --> 0:02:24.280 We are at three h nine Wall Street time on 0:02:24.320 --> 0:02:24.800 a Monday. 0:02:25.520 --> 0:02:29.720 Yeah, it is a full mutiny within the world's most 0:02:29.720 --> 0:02:35.320 important AI company that is completely unresolved and has massive 0:02:35.400 --> 0:02:40.160 repercussions for public markets viz. Of v Microsoft, but also 0:02:40.320 --> 0:02:42.840 private markets. You know, there's just hundreds of millions of 0:02:42.919 --> 0:02:47.440 dollars in real time hanging in the balance on open 0:02:47.480 --> 0:02:50.680 AI shares, And we can get into that. But let's 0:02:50.680 --> 0:02:52.639 say I've spoken to one hundred people in the last 0:02:52.680 --> 0:02:56.440 seventy two hours, and this is an unprecedented story in 0:02:56.480 --> 0:02:59.280 the history of Silicon Valley in how it played out, 0:02:59.720 --> 0:03:03.960 what happened, and just how much of it is frankly unresolved. 0:03:04.000 --> 0:03:05.680 And I guess we could get to that too. 0:03:05.880 --> 0:03:08.240 Okay, So let's we're going to get to where the 0:03:08.280 --> 0:03:10.280 company is valued and what happened to the share sales 0:03:10.280 --> 0:03:12.200 and the money sort of being held up that's supposed 0:03:12.200 --> 0:03:14.200 to come from Thrive and other vcs at this point. 0:03:14.200 --> 0:03:16.240 But first I want to start with the basic said, 0:03:16.639 --> 0:03:19.000 why did What do we know about why Sam Altman 0:03:19.200 --> 0:03:20.280 got the boot on Friday? 0:03:21.200 --> 0:03:24.760 Yeah, we honestly don't know why. Open ai had a 0:03:24.880 --> 0:03:30.240 very small has still there a very small four person board. 0:03:30.880 --> 0:03:35.000 That board issued a statement saying around Friday lunch time 0:03:35.040 --> 0:03:36.840 and by the way, I was at a restaurant having 0:03:36.920 --> 0:03:42.240 lunch with an open ai investor. It broke and you 0:03:42.240 --> 0:03:44.880 you know, yeah, that was a crazy moment in my career. 0:03:45.200 --> 0:03:46.440 You can only imagine. 0:03:46.120 --> 0:03:48.840 Anyway, was the person was the person shocked? 0:03:49.400 --> 0:03:51.760 We both boxed our food and ran for it, physically 0:03:51.840 --> 0:03:53.600 ran and as you guys know, I was on TV 0:03:53.680 --> 0:03:58.839 with a minute. But listen. The board said it had 0:03:58.920 --> 0:04:02.560 lost confidence in Sam Altman based on his sort of 0:04:02.680 --> 0:04:06.400 less than candid communications with the board, without elaborating further. 0:04:06.760 --> 0:04:10.360 On Saturday morning, bradl like Cap, who is the COO 0:04:10.480 --> 0:04:13.720 of open ai and remains COO of open Ai, issued 0:04:13.760 --> 0:04:16.800 a memo to staff saying that this was a breakdown 0:04:16.800 --> 0:04:20.240 in a communication between Sam Outman and that four person board, 0:04:20.600 --> 0:04:24.440 but there was no element of malfeasance. That's the language used. 0:04:25.680 --> 0:04:27.800 What we know from sources is that there is some 0:04:27.839 --> 0:04:31.839 sort of philosophical disagreement here. Sam Altman is a product guy. 0:04:32.320 --> 0:04:35.359 He is about getting that generative AI technology into the 0:04:35.400 --> 0:04:38.080 real world, charging money for it, getting it into the 0:04:38.120 --> 0:04:41.320 hands of consumers and enterprises. The board, the four of 0:04:41.360 --> 0:04:45.480 them are largely academics who recognize an existential threat from 0:04:45.480 --> 0:04:48.839 AI posed to humanity and that there's a point of 0:04:48.880 --> 0:04:51.760 difference there somewhere along the way. But we don't know 0:04:51.839 --> 0:04:54.359 more than that. There's so much more to be unveiled. 0:04:56.400 --> 0:05:00.320 Well it makes you wonder, okay, so you know, it 0:05:00.360 --> 0:05:02.400 makes me kind of nervous that the board wasn't able 0:05:02.440 --> 0:05:06.000 to maybe talk to it CEO right before doing this. 0:05:07.360 --> 0:05:10.320 Help me out, wait, go ahead, yeah, right, Well. 0:05:10.160 --> 0:05:16.160 The chronology of it is astonishing. Sources say Sam Outman 0:05:16.279 --> 0:05:19.719 found out he was being fired as CEO minutes before 0:05:19.720 --> 0:05:23.800 he was fired as CEO. Mirror Morati, who was that 0:05:23.960 --> 0:05:27.480 then the CTO was informed the night before of what 0:05:27.560 --> 0:05:30.440 was going to happen and that she would become acting CEO. 0:05:31.279 --> 0:05:34.360 And what's astonishing, you know, Ashley Vance, our dear colleague 0:05:34.600 --> 0:05:39.440 Business Week, myself, people like Dina Bass, Emily Chang, you know, 0:05:39.520 --> 0:05:44.839 we were hearing pretty early on Saturday and Sunday, then 0:05:44.960 --> 0:05:47.880 into Sunday afternoon that the board was digging in. They 0:05:47.880 --> 0:05:50.479 were like, no, we're not caving, We're going to hire 0:05:50.480 --> 0:05:53.640 a new CEO. But the messages from the Sam Oltman 0:05:53.760 --> 0:05:57.159 side were like, right up until the last minute last night, 0:05:57.520 --> 0:06:00.960 Sam's coming back as CEO, and the net result is 0:06:00.960 --> 0:06:04.640 that Sam has left joined Microsoft and we have a 0:06:04.680 --> 0:06:08.400 new interim CEO open AI. I'm just trying to give 0:06:08.480 --> 0:06:10.560 some sense of like, yeah, how all of this just 0:06:10.600 --> 0:06:14.640 played in real time and it's ramid. Yeah, it was rapid, 0:06:14.680 --> 0:06:18.640 but also everyone was wrong. You know everyone, the investors 0:06:18.640 --> 0:06:20.600 that were trying to get Sam Altman back in the 0:06:20.600 --> 0:06:23.719 CEO role were adamant that it was going to happen. 0:06:24.240 --> 0:06:27.760 Satya Nadella, who's the Microsoft CEO, was playing the peace broker, 0:06:27.800 --> 0:06:30.880 the middle man, doing everything that he could to put 0:06:30.960 --> 0:06:34.279 Sam Altman back. Yeah, but my understanding is the board 0:06:35.160 --> 0:06:36.560 they just didn't pick up the phone. 0:06:36.800 --> 0:06:38.960 I mean, I went to bed last night ed thinking 0:06:38.960 --> 0:06:41.320 that Sam Altman would be back at open AI. After all, 0:06:41.360 --> 0:06:43.640 he tweeted out that photo of him at headquarters yesterday 0:06:43.680 --> 0:06:45.480 wearing the badge thing. It's the first and last time 0:06:45.520 --> 0:06:47.320 I'm going to be wearing this everyone thought, you know, 0:06:47.320 --> 0:06:50.160 because it was a visitor's badge. So then I wake 0:06:50.240 --> 0:06:53.600 up this morning and find out that he's at Microsoft. 0:06:54.920 --> 0:06:57.240 Let's go back to the I mean it I kind 0:06:57.240 --> 0:06:58.880 of had to like check read it twice. I was like, 0:06:58.880 --> 0:07:03.320 what is going on here? Go back to philosophical differences here, 0:07:03.640 --> 0:07:06.600 because that's a big part of this story is the 0:07:06.640 --> 0:07:09.120 way that people think AI will play a role in 0:07:09.160 --> 0:07:12.400 our lives in humanity moving forward. Yes, where does Sam 0:07:12.440 --> 0:07:16.560 Altman find himself? And where do others find themselves? And 0:07:16.560 --> 0:07:17.720 where's the rift? 0:07:18.080 --> 0:07:20.840 So he finds himself at odds with the board. I mean, 0:07:20.840 --> 0:07:23.560 that's kind of part of why we're here. And the 0:07:23.600 --> 0:07:26.920 way to answer that question is to reflect on what happens. 0:07:27.000 --> 0:07:31.840 So Emmit Sheer was installed late last night as interim 0:07:32.000 --> 0:07:35.560 CEO of Open AI. And what sources told me and 0:07:35.600 --> 0:07:38.760 we reported is that a reason he was installed as 0:07:38.800 --> 0:07:42.760 interim CEO was that he shared with the board a 0:07:42.880 --> 0:07:48.400 recognition that advanced artificial intelligence does pose an existential threat, 0:07:48.520 --> 0:07:55.920 an ex threat to humankind otherwise known in layman's terms. 0:07:55.920 --> 0:07:57.240 That's what it means. I'm not going to go down 0:07:57.280 --> 0:08:01.160 the whole EA route. And he shared that in common 0:08:01.760 --> 0:08:04.680 with the board, while also the board recognized that he 0:08:04.800 --> 0:08:08.040 was the Twitch CEO as recently as earlier this year, right, 0:08:08.360 --> 0:08:11.440 they felt that he could run a very large engineering team. 0:08:11.840 --> 0:08:16.760 And again I reiterate, we actually have no idea why 0:08:16.840 --> 0:08:20.280 the real reasons why the board fired Sam other than 0:08:20.440 --> 0:08:25.160 there was concern at how quickly he was commercializing that AI. 0:08:25.480 --> 0:08:29.720 So how important is Sam to open AI? He's one 0:08:30.000 --> 0:08:31.040 of the co founders. 0:08:31.280 --> 0:08:35.720 How the question, Yeah, yeah, that's it. I think that, Yeah, 0:08:35.760 --> 0:08:37.000 go ahead, sorry, who. 0:08:36.840 --> 0:08:37.480 Owns the IP? 0:08:37.720 --> 0:08:40.840 Like I think about that intellectual property that has so long, 0:08:41.280 --> 0:08:44.720 so far been developed that Microsoft has ponied up or 0:08:44.720 --> 0:08:47.359 promised you some ten billion dollars in it? 0:08:48.160 --> 0:08:49.000 Who owns that? 0:08:50.559 --> 0:08:57.880 So it's complicated. Microsoft literally owns forty nine percent of 0:08:57.960 --> 0:09:02.719 the incorporated four prop open AI, which is governed by 0:09:02.840 --> 0:09:06.040 not for profit board on which Microsoft does not sit. 0:09:06.880 --> 0:09:11.600 The basic answer is that the intellectual property is the current, 0:09:11.800 --> 0:09:15.280 prior and future generations of large language model. But this 0:09:15.480 --> 0:09:17.520 is the story, and the story of the last twenty 0:09:17.559 --> 0:09:19.440 four or to forty eight hours has been key man 0:09:19.559 --> 0:09:23.760 risk that investors suddenly started to recognize that if you 0:09:23.800 --> 0:09:27.120 took out Sam Altman, who is responsible for the products 0:09:27.120 --> 0:09:30.880 flying around the world, talking to policymakers, attracting the top 0:09:30.920 --> 0:09:34.840 talent and the investors, and all of the data scientists 0:09:34.880 --> 0:09:38.600 who matter, are willing to leave with him. Then what's 0:09:38.720 --> 0:09:41.640 left over is that open ai does not have any value. 0:09:41.679 --> 0:09:45.439 The intellectual property and value is in those eggheads forgive 0:09:45.520 --> 0:09:48.720 the phrase that are running the place. That's what's happening here. 0:09:49.600 --> 0:09:53.520 So we have about thirty seconds left, said Microsoft, What 0:09:53.559 --> 0:09:55.679 does he do at Microsoft? Because he just tweeted that 0:09:56.000 --> 0:09:58.600 his priority is to continue development and open ai and 0:09:58.600 --> 0:10:00.480 that's the reason why he's at Microsoft. 0:10:00.040 --> 0:10:02.120 And kiddo, just got about thirty or thirty five seconds. 0:10:02.160 --> 0:10:05.320 Yeah, the door is absolutely open to Sam Altman going 0:10:05.360 --> 0:10:08.319 back to open ai. Investors are still trying to make 0:10:08.360 --> 0:10:12.200 that happen. My understand is the paperwork ain't signed to 0:10:12.320 --> 0:10:14.960 make Sam bind it to Microsoft, and I'm pretty sure 0:10:14.960 --> 0:10:17.880 Microsoft will be okay with an outcome where Sam went back. 0:10:18.040 --> 0:10:19.559 We just don't know, so you might not. 0:10:19.480 --> 0:10:21.679 Get sleep tonight. Is that basically a kiddo. 0:10:22.000 --> 0:10:23.520 Oh, I know, I wish listen. 0:10:23.800 --> 0:10:26.160 I know, I know, but we so appreciate all the 0:10:26.200 --> 0:10:28.400 reporting you and the team have done because You've kept 0:10:28.480 --> 0:10:31.800 us smart, honest, and just up to date on this 0:10:32.080 --> 0:10:34.280 very rapidly moving and still moving story. 0:10:34.720 --> 0:10:37.200 Ed Ludlow, Yeah, yeah, you are the best. Take an 0:10:37.240 --> 0:10:38.400 app at least twenty minutes. 0:10:38.640 --> 0:10:41.560 It revives at Ludlow, co host of Bloomberg Technology on 0:10:41.600 --> 0:10:43.520 Zoom from San Francisco. Folks, We're not going away from 0:10:43.559 --> 0:10:46.440 this story. Still more to come read here on Bloomberg 0:10:46.440 --> 0:10:46.960 business Week. 0:10:48.800 --> 0:10:52.320 If you're listening to the Bloomberg Business Week podcast, catch 0:10:52.360 --> 0:10:55.760 us live weekday afternoons from three to six Eastern Listen 0:10:55.800 --> 0:10:59.280 on Bloomberg dot com, the iHeartRadio app, and the Bloomberg 0:10:59.320 --> 0:11:02.560 Business app, or want us live on YouTube. 0:11:03.160 --> 0:11:05.200 Staying with the story of the day, Microsoft hit a 0:11:05.240 --> 0:11:08.079 new all time high after the software giant hired open 0:11:08.080 --> 0:11:10.880 ai co founder Sam Altman and Greg Brockman to lead 0:11:10.920 --> 0:11:13.840 its new in house advanced artificial intelligence research team. 0:11:13.880 --> 0:11:15.360 We were just talking about this with our own ed 0:11:15.440 --> 0:11:15.800 Luve Love. 0:11:15.880 --> 0:11:17.760 Okay, so if you're just getting up to speed, remember 0:11:17.800 --> 0:11:21.240 Microsoft is open AI's biggest shareholder and closest tech partner, 0:11:21.600 --> 0:11:23.880 made at least ten billion dollar investment in the company. 0:11:23.880 --> 0:11:26.040 The news at the start of the year is really 0:11:26.080 --> 0:11:29.000 what got us all talking about chat, GPT and generative AI. 0:11:29.400 --> 0:11:33.160 Microsoft certainly has its own AI initiatives. Google is aggressively 0:11:33.280 --> 0:11:37.280 working on it. Tesla does a lot with AI, so 0:11:37.400 --> 0:11:40.160 are others with more We got with us Crawford Delprett, 0:11:40.200 --> 0:11:43.680 President of IDC, the global research, analysis and advisory firm 0:11:43.800 --> 0:11:47.480 for information technology, telecom and consumer tech markets. Crawford joined 0:11:47.559 --> 0:11:50.800 us on Zoom from Massachusetts. Hey, Crawford, give us an 0:11:50.800 --> 0:11:53.520 idea of your reaction when this broke on Friday. This 0:11:53.600 --> 0:11:55.480 is a world that you are deeply enmeshed in. What 0:11:55.520 --> 0:11:56.440 were your first thoughts? 0:11:57.920 --> 0:12:00.880 Yeah, Oh my god, Hey Tim, how are you guys? 0:12:01.200 --> 0:12:03.520 This was a this was a moment, and this is 0:12:03.520 --> 0:12:05.680 a moment in tech. It was kind of a head 0:12:05.679 --> 0:12:09.520 scratcher in terms of how open AI could think this way, 0:12:09.600 --> 0:12:12.240 how they could think about making this rational move, and 0:12:12.559 --> 0:12:16.440 really how the dominoes were all lined up for if 0:12:16.480 --> 0:12:20.760 you make this move without really a concrete vision to 0:12:20.800 --> 0:12:23.079 be able to communicate why you're going in that direction, 0:12:23.520 --> 0:12:26.840 how you could end up in a situation like we're 0:12:26.840 --> 0:12:29.959 in right now, where you've got employees revolting, where you've 0:12:29.960 --> 0:12:31.880 got management shake up, and then where you've got a 0:12:31.920 --> 0:12:36.720 possibility that Sam could end up in a in a 0:12:36.880 --> 0:12:40.120 different place, or in maybe a place where you know, 0:12:40.160 --> 0:12:41.679 he could be very, very happy and do a lot 0:12:41.720 --> 0:12:42.480 of things going forward. 0:12:42.559 --> 0:12:44.920 It has such a cinematic feel to it. Crawford, You 0:12:45.320 --> 0:12:48.760 guys advise, you do research, you do analysis. Are your 0:12:48.760 --> 0:12:51.319 clients calling you off the hook and just saying, hey, folks, 0:12:51.400 --> 0:12:53.040 it's way too early to kind of figure out what 0:12:53.280 --> 0:12:54.920 the longer term narrative is here? 0:12:56.080 --> 0:12:58.600 Of course, Yeah. I mean, I think there's a lot 0:12:58.760 --> 0:13:02.480 of need to under stand and people trying to absorb this. 0:13:02.840 --> 0:13:06.320 But I think that you know, long term, this is 0:13:06.600 --> 0:13:12.160 a time where the future of tech is really on 0:13:12.200 --> 0:13:14.920 the table. And this is not uncommon. This is not 0:13:15.000 --> 0:13:17.560 unlike what we saw in the two thousand time frame 0:13:18.000 --> 0:13:20.520 leading up where we had Netscape and we had we 0:13:20.559 --> 0:13:22.680 had Explorer, and we had the sort of the future 0:13:22.679 --> 0:13:24.840 of the web or not like we saw and not 0:13:24.920 --> 0:13:26.760 unlike what we saw in twenty ten with the web 0:13:26.760 --> 0:13:29.600 two dot zero companies, where you had salesforce accelerating and 0:13:29.640 --> 0:13:32.360 you had the cloud accelerating. I think everyone knows that, 0:13:32.440 --> 0:13:35.400 all customers know that the pieces as they move around 0:13:35.480 --> 0:13:39.000 right now are going to form the next decade or 0:13:39.120 --> 0:13:42.200 more of tech, and so I think people are just 0:13:42.280 --> 0:13:45.280 sort of watching how this ultimately plays out, but knowing 0:13:45.559 --> 0:13:49.520 that probably the landscape a tech has changed dramatically for 0:13:49.720 --> 0:13:50.520 a decade or more. 0:13:50.720 --> 0:13:52.480 He I want to bring in Rachel Metz. She's Bloomberg 0:13:52.520 --> 0:13:56.160 News AI reporter. She joins us on zoom from San Francisco. Rachel, 0:13:56.400 --> 0:13:58.680 you were up all weekend covering this story. We read 0:13:58.679 --> 0:14:00.320 so much of your coverage and the pre shit. You're 0:14:00.360 --> 0:14:02.320 joining us today. I want to go back to what 0:14:02.360 --> 0:14:04.920 Crawford just said that the future of this tech is 0:14:04.960 --> 0:14:08.000 at stake right now. Give us your interpretation of what 0:14:08.040 --> 0:14:10.319 that means and sort of where the chips lie right now, 0:14:10.360 --> 0:14:13.600 who has what and who can do and like who 0:14:13.640 --> 0:14:15.280 can use that for what tech? 0:14:17.040 --> 0:14:17.240 Yeah. 0:14:17.360 --> 0:14:20.200 No, that's an issue that I think a lot of 0:14:20.240 --> 0:14:21.000 people and a lot. 0:14:20.880 --> 0:14:23.280 Of other companies are thinking about right now. 0:14:23.640 --> 0:14:27.000 Open ai is by many consid to be the leader 0:14:27.240 --> 0:14:30.720 in for the hottest AI right now. A lot of 0:14:31.040 --> 0:14:33.960 large language models, generative AI in general. Open ai has 0:14:34.000 --> 0:14:37.600 looked to as a leader. So all these employees, like 0:14:37.640 --> 0:14:39.640 over ninety percent of the company as of this morning, 0:14:39.640 --> 0:14:43.000 had signed a letter saying, if you don't go with 0:14:43.120 --> 0:14:46.840 our demands, we're going to may, we may leave the 0:14:46.840 --> 0:14:49.280 company to fect Microsoft. Then it's a little unclear what 0:14:49.320 --> 0:14:52.920 happens to the company technology now and in the future. 0:14:53.480 --> 0:14:55.680 Well, how do you Rachel, as someone who's been covering 0:14:55.680 --> 0:14:58.120 AI for us since we all went like crazy over 0:14:58.160 --> 0:15:02.600 it earlier this year initial Microsoft investment news, You know, 0:15:02.600 --> 0:15:04.760 it just made us sit up and take notice all 0:15:04.760 --> 0:15:06.960 of a sudden, like, wait, what is this? How did 0:15:07.000 --> 0:15:10.200 we miss it? Having said that let's take the longer lens? 0:15:10.280 --> 0:15:12.760 Can we take the longer lens? As you watch the 0:15:12.840 --> 0:15:16.000 development of AI and its impact on this world, you 0:15:16.040 --> 0:15:19.160 know this philosophical debate that seems to be going on 0:15:19.360 --> 0:15:22.920 internally at open AI about the concerns the academics on 0:15:22.960 --> 0:15:26.760 the board, the worry over its impact versus so many 0:15:26.840 --> 0:15:29.040 out there. We talked to so many different CEOs and 0:15:29.120 --> 0:15:32.080 leaders about the potential of how it can, in a 0:15:32.280 --> 0:15:34.960 positive way maybe transform our world. 0:15:36.560 --> 0:15:40.040 Yeah, that's a conflict that's been brewing for a while 0:15:40.280 --> 0:15:43.840 in AI in general. And I mean there's that's kind 0:15:43.840 --> 0:15:46.320 of it's kind of an interesting thing for technology, right because, 0:15:46.360 --> 0:15:48.760 as you were sort of getting at there, we often 0:15:48.800 --> 0:15:52.600 think of technology, the tech industry as wanting to crush 0:15:52.600 --> 0:15:55.680 ahead as fast as possible, make things you know more 0:15:55.720 --> 0:15:58.200 in more advance, Like every time there's a new iPhone 0:15:58.240 --> 0:16:00.280 that you want, you know, the latest feature is what's 0:16:00.280 --> 0:16:03.720 happening now? Whereas when we're sending to see some people 0:16:03.760 --> 0:16:07.760 that are connected to AI and the AI research say 0:16:08.120 --> 0:16:10.720 maybe we's just slow down or maybe we need to 0:16:10.760 --> 0:16:13.200 slow down and some of that scene that sounds reasonable 0:16:13.240 --> 0:16:16.560 to some people, and some of it sounds ridiculous depending 0:16:16.600 --> 0:16:18.520 on what kind of arguments they're making for why they 0:16:18.520 --> 0:16:19.400 want to slow intown. 0:16:19.480 --> 0:16:21.360 Hey, Crawford Delpratt, come on back in here, and I 0:16:21.400 --> 0:16:24.120 want to stay on the philosophical side of things. I mean, 0:16:24.480 --> 0:16:26.800 there's sort of a couple of different camps right here 0:16:26.840 --> 0:16:30.920 about people's concerns when it comes to AI. Some people said, hey, 0:16:30.960 --> 0:16:34.440 we do, including Elon Musk, we do not want machines 0:16:34.520 --> 0:16:39.920 to become essentially more powerful, more powerful and smarter than 0:16:40.000 --> 0:16:42.200 human beings. On the other side, there are people who say, 0:16:42.200 --> 0:16:44.040 wait a second, that's not something we actually need to 0:16:44.080 --> 0:16:47.440 worry about. How do you characterize these two different sides, Like, 0:16:47.680 --> 0:16:50.080 play out the worst case scenario for me about what 0:16:50.120 --> 0:16:50.760 this could look like. 0:16:52.160 --> 0:16:56.240 Well, the worst case scenario is that you've got machines 0:16:56.320 --> 0:17:02.360 making decisions at scale and humans reacting to those to 0:17:02.360 --> 0:17:05.720 to to to those decisions and not being able to 0:17:06.520 --> 0:17:12.120 govern second guess, you know, be able to stop bad actors, 0:17:12.960 --> 0:17:17.440 humans be not being able to discern what's reality versus 0:17:17.520 --> 0:17:19.720 what's not. Think about social media, how you get people 0:17:19.720 --> 0:17:23.000 spun up with fake images, images that look real but 0:17:23.040 --> 0:17:25.800 they're but but they're not. You know, these are all 0:17:26.119 --> 0:17:29.720 the things that uh, the Open Ai board was concerned about. 0:17:29.760 --> 0:17:33.040 But you know, that doesn't mean that you can't have governance. 0:17:33.080 --> 0:17:37.000 That doesn't mean that that you can't have legislation take 0:17:37.000 --> 0:17:39.439 a much much more active role. And I think what 0:17:39.560 --> 0:17:43.840 remains to be seen is if Sam ends up at Microsoft, 0:17:44.080 --> 0:17:47.600 to what extent Microsoft will partner with governments, to what 0:17:47.640 --> 0:17:51.600 extent Google will be forced to partner with governments around 0:17:51.680 --> 0:17:54.639 these things to to to allay some of those fears. 0:17:54.680 --> 0:17:56.200 Well, I feel like Rachel too, this is kind of 0:17:56.200 --> 0:17:58.800 an amped up version of like privacy concerns, right, Like 0:17:58.880 --> 0:18:04.200 we all have given incredible amounts of information to a Google, 0:18:04.680 --> 0:18:09.120 to a Meta, to a Microsoft, so much that they 0:18:09.160 --> 0:18:12.080 know about us, right, and we're all kind of yeah, uncomfortable, 0:18:12.160 --> 0:18:14.520 but it's kind of we need it to exist. Is 0:18:14.520 --> 0:18:16.840 that kind of where we could ultimately get to with 0:18:17.440 --> 0:18:18.160 generative AI? 0:18:20.200 --> 0:18:23.199 I mean, look, I would say that what we're seeing 0:18:23.280 --> 0:18:26.440 for a number of people that are saying we need 0:18:26.480 --> 0:18:29.720 to slow down the face of AI technology, they're not 0:18:29.840 --> 0:18:32.560 talking about privacy risks so much as they're talking about 0:18:32.600 --> 0:18:37.480 things like potential extinction risks, like maybe AI that will 0:18:37.480 --> 0:18:39.560 get so good that it will kill all of us, 0:18:39.600 --> 0:18:42.399 that sort of thing, which some people say is a 0:18:42.440 --> 0:18:45.240 real risk, but a lot of people say that's ridiculous. 0:18:45.680 --> 0:18:48.200 So I mean, I think that we have to sort 0:18:48.200 --> 0:18:50.199 of like keep that in mind when we're thinking about 0:18:50.920 --> 0:18:52.880 what the people who want to slow this stuff down, 0:18:52.920 --> 0:18:54.840 what some of them are thinking, which is that they 0:18:54.840 --> 0:18:57.600 tru some of them truly believe that AI is going 0:18:57.680 --> 0:19:02.040 to potentially ill people. And you know, an existential risk 0:19:02.200 --> 0:19:04.840 is you can see how you know that you kind 0:19:04.840 --> 0:19:07.160 of go in that path and you're like, oh wow, okay. 0:19:07.200 --> 0:19:09.560 That'll that'll that'll creep you out. Hey, Crawford cut like 0:19:10.000 --> 0:19:12.320 twenty five seconds. The clients that you work with, are 0:19:12.320 --> 0:19:15.640 they more enthused, are they more worried about open AI 0:19:15.840 --> 0:19:16.640 and generative AI? 0:19:16.760 --> 0:19:19.199 Real quickly, real quickly. 0:19:19.760 --> 0:19:21.720 I think that most of the customers that we talk 0:19:21.800 --> 0:19:24.760 to are looking at it as an opportunity. They're looking 0:19:24.760 --> 0:19:30.240 at as an opportunity to be to increase productivity there, 0:19:30.880 --> 0:19:33.760 to give people skills that they never had before. But 0:19:33.840 --> 0:19:37.000 they are asking a lot about the security is tops 0:19:37.000 --> 0:19:39.800 of the list, Privacy is second on the list of 0:19:39.840 --> 0:19:42.680 things that they are most concerned about. They are taking 0:19:42.720 --> 0:19:47.760 an optimistic view, but definitely I think need need the governance. 0:19:47.800 --> 0:19:49.760 All right, guys, thank you so much. Crawford del Pratt, 0:19:49.760 --> 0:19:53.240 President of IDC. Rachel Mattz, Bloomberg News AI reporter out 0:19:53.280 --> 0:19:54.280 there in San Francisco. 0:19:56.080 --> 0:19:59.600 You're listening to the Bloomberg Business Week podcast. Catch us 0:19:59.680 --> 0:20:03.720 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:20:03.920 --> 0:20:07.200 the Bloomberg Business App and YouTube. You can also listen 0:20:07.280 --> 0:20:10.400 live on Amazon Alexa from our flagship New York station, 0:20:10.720 --> 0:20:13.960 Jo Say Alexa play Bloomberg eleven thirty. 0:20:15.000 --> 0:20:18.240 Hey Carol. In twenty twenty one, more than two hundred 0:20:18.240 --> 0:20:21.480 thousand Americans got these letters from the Social Security Administration. 0:20:21.600 --> 0:20:26.440 These letters said that hey, we overpaid and you actually 0:20:26.480 --> 0:20:29.000 owe the Social Security Administration money. 0:20:29.040 --> 0:20:31.600 So people had to pay back the Social Security Administration. 0:20:31.680 --> 0:20:34.040 Well, if they didn't pay, their benefits would be cut 0:20:34.040 --> 0:20:37.080 off until the Social Security Administration gets its money back. 0:20:37.240 --> 0:20:39.680 All right, This is all according to our next guest, 0:20:39.800 --> 0:20:43.959 new book, It's Fascinating Social Security Horror Stories. Project yourself 0:20:43.960 --> 0:20:46.520 from the system and avoid clawbacks. This story, by the way, 0:20:46.880 --> 0:20:49.600 was the top of a sixty minute segment earlier this 0:20:49.640 --> 0:20:53.000 week that included Lawrence Kotlikoff. He's the co author tim 0:20:53.040 --> 0:20:54.720 of the book, along with Terry Savage. 0:20:54.960 --> 0:20:57.640 It's good to have you back with us, Lawrence. He's also, 0:20:57.720 --> 0:21:00.000 we should note, a professor of economics at Boston University, 0:21:00.119 --> 0:21:02.639 a Fellow of the American Academy of Arts and Sciences, 0:21:02.760 --> 0:21:05.399 and a research associate at the National Bureau of Economic Research, 0:21:05.440 --> 0:21:08.159 among many other things. Carol, I actually left a lot 0:21:08.200 --> 0:21:09.840 of this stuff out of a ton of books. 0:21:09.920 --> 0:21:13.760 Funny, yeah, he joins us on Zoom from Boston. So 0:21:13.840 --> 0:21:15.760 great to have you back with us, Larry. I hope 0:21:15.800 --> 0:21:18.600 this finds you. Well, let's get to the crux of it, 0:21:18.640 --> 0:21:21.840 because it is fascinating. It's also terrifying. You've also, though, 0:21:22.119 --> 0:21:26.720 been writing about the social security system for years. Why 0:21:26.760 --> 0:21:29.560 has this continued to generally be on your radar and 0:21:29.600 --> 0:21:33.440 a target a topic that requires examining in your view. 0:21:34.800 --> 0:21:38.359 Well, it actually turns out there was testimony by the 0:21:38.400 --> 0:21:42.160 Acting Commissioner in front of Congress week or so ago, 0:21:43.000 --> 0:21:45.600 and she confessed that there's a million people being called 0:21:45.640 --> 0:21:49.560 back each year. So I've been writing about these horror stories. 0:21:49.600 --> 0:21:52.360 I've been calling them horror stories. Are wrote on PBS 0:21:52.359 --> 0:21:55.919 News Hour and Forbes for years. I've been writing, and 0:21:56.680 --> 0:21:58.760 you know, because people were asking me questions about SO 0:21:58.880 --> 0:22:02.040 security and telling me this. And then I wrote another 0:22:02.040 --> 0:22:05.159 book called Money Magic, which Terry Savage is my co 0:22:05.280 --> 0:22:08.679 author on this new one. She interviewed me and then 0:22:08.680 --> 0:22:11.880 we became kind of friends, and she started sending She's 0:22:11.880 --> 0:22:16.160 a CBS News reporter in Chicago, and she started sending 0:22:16.200 --> 0:22:20.080 me questions and I said, well, these, yeah, these hard stories. 0:22:20.359 --> 0:22:22.360 I've been writing about them. And then I said, Terry, 0:22:22.440 --> 0:22:27.240 let's do two things. Let's have you in your outreach 0:22:27.280 --> 0:22:30.200 you asked people to send in their stories, and if 0:22:30.200 --> 0:22:32.080 we get it a lot, well let's put put them 0:22:32.080 --> 0:22:34.679 together in a book. Within a couple of weeks we 0:22:34.720 --> 0:22:38.520 had over one hundred and fifty. And she knows that 0:22:38.560 --> 0:22:42.240 for CBS contacts the people at sixty minutes, so a bingo, 0:22:42.320 --> 0:22:44.320 we were on six. So it's all it's been there, 0:22:44.520 --> 0:22:48.119 It's been there on for years. It's just that things 0:22:48.440 --> 0:22:51.199 came together that we could actually get this into the 0:22:51.200 --> 0:22:55.119 public attention, and then we decided we would write this book. 0:22:55.160 --> 0:22:56.640 And at the same. 0:22:56.440 --> 0:22:58.720 Time, we only have about six minutes or so. So 0:22:58.960 --> 0:23:00.600 get to the heart of like what's happening. 0:23:02.320 --> 0:23:06.359 What's happening is that there are social crety is making 0:23:06.400 --> 0:23:10.280 mistakes and the mantra is your mistake is our mistake. 0:23:10.400 --> 0:23:13.520 I mean, our mistake is your mistake, and so they 0:23:13.560 --> 0:23:18.760 can overpay you for years on disability benefits, or on 0:23:18.760 --> 0:23:22.680 your retirement benefit, on your spouse benefit, on whatever child benefits, 0:23:23.160 --> 0:23:26.679 and they are making a mistake. You don't know it. 0:23:26.720 --> 0:23:30.560 You're thinking you're getting the correct amount, and then fifteen 0:23:30.640 --> 0:23:32.840 years later you get a bill in the mail for 0:23:33.560 --> 0:23:37.520 one hundred and ten thousand dollars or fifty thousand dollars 0:23:38.080 --> 0:23:42.040 or twenty five thousand dollars. But it's usually quite big. 0:23:42.119 --> 0:23:44.200 I've seen bills as large as three hundred and four 0:23:44.200 --> 0:23:49.000 thousand dollars. They have no clue what they're doing. Really, 0:23:49.720 --> 0:23:53.760 the system is so complicated that the manual, the handbook 0:23:54.080 --> 0:23:57.879 where a manual operating manual, goes to twenty thousand pages 0:23:58.640 --> 0:24:02.159 covering twelve hundred and twenty seven twenty eight rules that 0:24:02.200 --> 0:24:05.840 are in their handbook about twelve just twelve benefits. So 0:24:05.880 --> 0:24:10.520 it's complicated beyond belief. So they make mistakes all the time, 0:24:10.600 --> 0:24:12.879 and then they don't catch them, and it's your. 0:24:12.920 --> 0:24:16.199 Your fault, Lawrence, You argue that the onus is on 0:24:16.359 --> 0:24:19.600 us to actually make sure that we're being paid the 0:24:19.680 --> 0:24:23.840 right amount. Given that the Social Security Administration has made 0:24:23.880 --> 0:24:26.639 and continues to make so many mistakes. What do people 0:24:26.680 --> 0:24:28.920 listening and watching us right now need to know about 0:24:29.080 --> 0:24:31.159 how they can make sure that they're not going to 0:24:31.160 --> 0:24:32.400 get one of these letters. 0:24:33.160 --> 0:24:36.000 Well, one of the things you know, I've done over 0:24:36.040 --> 0:24:39.680 the years is to produce a software tool called Maximizemsoli 0:24:39.720 --> 0:24:43.720 security dot com maximize Myself security dot com. We write 0:24:43.760 --> 0:24:45.800 about it in the book, but it's been there for 0:24:46.080 --> 0:24:49.760 you know years. It's thirty nine dollars. People can go 0:24:50.200 --> 0:24:52.280 and check that they're getting the correct benefit. If they're 0:24:52.320 --> 0:24:54.800 being overpaid, they can, But. 0:24:54.720 --> 0:24:56.800 Can I can I just do that by logging into 0:24:56.800 --> 0:24:59.560 the Social Security Administration website and creating an account there. 0:25:01.640 --> 0:25:06.000 Well, no, because they're not asking you. Those calculators there 0:25:06.080 --> 0:25:10.440 that they have are very primitive and make crazy assumptions, 0:25:10.480 --> 0:25:14.840 and you know it's not even clear that they're no. 0:25:14.920 --> 0:25:17.040 So I would say the answer is no. I would 0:25:17.040 --> 0:25:20.560 say the software that we have is far more accurate. 0:25:21.119 --> 0:25:25.520 We've actually corrected some of suskre's own benefit calculations and 0:25:25.560 --> 0:25:28.280 gotten them to fix their system using our software. 0:25:28.760 --> 0:25:34.000 So help me understand though, in terms of these overpayments 0:25:34.040 --> 0:25:36.760 that kind of go undetected for years and then all 0:25:36.800 --> 0:25:39.040 of a sudden, individuals are getting something from the Social 0:25:39.080 --> 0:25:42.399 Security Administration saying hey, by the way, we overpaid you 0:25:42.440 --> 0:25:45.800 and UoS a chunk of money, and sometimes, as you said, 0:25:46.000 --> 0:25:47.800 in cases it could be what more than three hundred 0:25:47.800 --> 0:25:51.800 thousand dollars, it's a lot of money. Help me understand 0:25:51.800 --> 0:25:57.480 the overpayment. Was it a slight overpayment extreme overpayment where 0:25:58.119 --> 0:26:00.119 somebody who was getting a check might have said, wow, 0:26:00.200 --> 0:26:01.480 why did that go up so much? 0:26:02.960 --> 0:26:05.720 Well, you know, here's I'll give you an example. A 0:26:06.320 --> 0:26:11.680 lady becomes disabled, she writes a child's book. It becomes 0:26:12.040 --> 0:26:14.080 a best seller for a number of years. She starts 0:26:14.080 --> 0:26:18.120 getting royalties. And then she calls every year and says, listen, 0:26:18.119 --> 0:26:21.120 I'm getting these royalties. Can I still get my disability check? 0:26:21.200 --> 0:26:25.359 They say, no problem, it's royalties. Then she gives a 0:26:25.400 --> 0:26:28.640 talk or to at a local library. They send her 0:26:28.640 --> 0:26:33.240 at ten ninety nine for the expense of going to whatever, 0:26:33.359 --> 0:26:36.560 parking or travel, and then so screat changes its mind 0:26:36.560 --> 0:26:40.480 ten years later, says, all those disability benefits we've been 0:26:40.480 --> 0:26:43.440 paying you for all these years, they're actually earned income 0:26:43.440 --> 0:26:47.520 because you actually took steps to make to sell your book. 0:26:47.800 --> 0:26:50.400 You gave these two talks, and therefore you always three 0:26:50.440 --> 0:26:53.760 hundred and four thousand dollars. And then the administrative she 0:26:53.760 --> 0:26:56.520 appeals the administrative wall jud says, well, it has to 0:26:56.520 --> 0:26:59.159 be our mistake. It is our mistake. But also you 0:26:59.200 --> 0:27:01.720 have to be poor. And I've looked at all your 0:27:01.920 --> 0:27:05.440 financial records, and guess what. I've looked at your cable plan, 0:27:05.560 --> 0:27:08.840 and you have lots of TV stations. It's a very 0:27:08.920 --> 0:27:12.480 rich plan, very good plan. And therefore I've decided you're 0:27:12.520 --> 0:27:14.399 not poor, and therefore you have to pay back the 0:27:14.400 --> 0:27:17.280 three hundred and four thousand dollars or we'll just continue 0:27:17.320 --> 0:27:19.480 not to pay you your check. Until the rest of 0:27:19.520 --> 0:27:20.439 you until you die. 0:27:20.600 --> 0:27:22.760 So you're saying, they say, hey, it's okay, you should 0:27:22.760 --> 0:27:24.119 get these benefits, and then all of a sudden they 0:27:24.200 --> 0:27:25.199 kind of change the rules. 0:27:25.240 --> 0:27:27.000 Is that fair to say they. 0:27:27.000 --> 0:27:29.200 Can change the rules, they can change their mind. Forty 0:27:29.200 --> 0:27:32.720 five years later, we've seen clawbacks going back. Somebody who's 0:27:32.760 --> 0:27:34.960 a forty you know, sixty five, they're being clawback for 0:27:35.000 --> 0:27:37.359 one hundred and seventy five dollars because they got a 0:27:37.440 --> 0:27:40.560 child benefit when they were for one extra month when 0:27:40.560 --> 0:27:43.480 they were nineteen, because they were still in high school 0:27:43.960 --> 0:27:47.040 and so scarity got wrong when they actually graduated high school. 0:27:47.320 --> 0:27:51.159 I mean, it's horrendous, and it's not just the disabled, 0:27:51.200 --> 0:27:55.040 it's there's we're talking about a million people a year 0:27:55.080 --> 0:27:58.560 for all kinds of reasons, and it's basically all mistakes 0:27:58.560 --> 0:28:00.520 from SO Security. If they charge us with. 0:28:00.680 --> 0:28:03.000 I know in the sixty minutes piece that the individuals 0:28:03.000 --> 0:28:06.720 that were profiled they actually I think the Social Security Administration. 0:28:07.520 --> 0:28:08.920 I think Anderson Cooper at the end of the piece 0:28:08.960 --> 0:28:12.760 said listen, they basically forgave their debt and they were 0:28:12.800 --> 0:28:15.320 looking into it as well. 0:28:15.800 --> 0:28:17.080 Is there anything that has. 0:28:17.000 --> 0:28:20.560 Moved forward in terms of Social Security and how they 0:28:20.600 --> 0:28:22.639 are managing things, And I'm wondering what you think is 0:28:22.680 --> 0:28:24.560 that the problem is it mismanagement. 0:28:24.600 --> 0:28:26.719 They don't have enough people, they don't have good technology. 0:28:26.760 --> 0:28:29.080 And my apologies because I know this is not an 0:28:29.080 --> 0:28:31.920 easy fix to this situation, but we only have about 0:28:31.960 --> 0:28:32.680 a minute left. 0:28:34.119 --> 0:28:38.160 Well, so Security has changed its philosophy internally and it's 0:28:38.360 --> 0:28:42.040 let's go get every single penny because we're broke. Although 0:28:42.120 --> 0:28:45.320 the clawbacks collectively are about twenty one billion that they're 0:28:45.360 --> 0:28:48.440 going after compared to a sixty five point nine trillion 0:28:48.440 --> 0:28:51.640 dollars unfunded liability, so it's peanuts. And they're putting all 0:28:51.680 --> 0:28:57.040 the you know, seventy seven million recipients under threat that 0:28:57.080 --> 0:28:59.360 they could be next with their relatives because I have 0:28:59.360 --> 0:29:02.400 to kick pick up the slag, yeah, if their weather 0:29:02.520 --> 0:29:07.480 whatever gets hit. So I think it's people at the 0:29:07.480 --> 0:29:12.520 top who just don't give a damn. There's there's an 0:29:12.560 --> 0:29:15.800 overarching The reason that those three people were forgiven is 0:29:15.800 --> 0:29:19.320 that there's an overarching principle that so Security can waive 0:29:19.440 --> 0:29:21.960 these callbacks if it goes against equity and good conscience. 0:29:21.960 --> 0:29:24.280 That's in the wall. So the commissioner or the action 0:29:24.360 --> 0:29:28.240 commissioner today could write just saying beyond eighteen months, it's 0:29:28.280 --> 0:29:29.960 one of us. That's it. 0:29:30.120 --> 0:29:32.400 Well, well, very interesting. 0:29:32.400 --> 0:29:35.000 There's a lot more in your book, Larry Kotlikoff, Thank 0:29:35.000 --> 0:29:37.800 you so much, Professor of economics at Boston University's book 0:29:38.000 --> 0:29:39.680 Social Security Horror Stories. 0:29:40.080 --> 0:29:43.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:29:43.680 --> 0:29:47.000 live weekday afternoons from three to six Eastern Listen on 0:29:47.080 --> 0:29:51.120 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:29:51.400 --> 0:29:54.200 or watch us live on YouTube. 0:29:57.200 --> 0:29:59.640 Well, the Bloomberg US Aggregate Bond of Docks, it tracks 0:29:59.640 --> 0:30:02.320 at tw twenty five trillion dollars of investment grade government 0:30:02.640 --> 0:30:06.080 and corporate debt, gained about one point four percent last week. 0:30:06.320 --> 0:30:09.640 It's up five tenths of a percent for the year, 0:30:09.760 --> 0:30:12.400 and that's after we got softer than expected inflation data. 0:30:12.440 --> 0:30:14.760 That index, by the way, we should note, posted a 0:30:14.800 --> 0:30:17.760 record loss of thirteen percent in twenty twenty two. 0:30:17.960 --> 0:30:21.320 Okay, so let's look into our crystal ball, and twenty 0:30:21.400 --> 0:30:24.720 twenty four hasn't sat right. Twenty three three is not 0:30:24.760 --> 0:30:26.640 even over yet, Carol, but we're already looking at that. 0:30:26.920 --> 0:30:30.760 We've got Leslie Falconio, head of Taxable fixed income strategy 0:30:30.760 --> 0:30:33.720 at UBS Global Wealth Management. She joins us on Zoom 0:30:34.040 --> 0:30:37.240 from New York City. Good to have you with us, Leslie. So, 0:30:37.480 --> 0:30:39.040 so give us an idea of what we can expect 0:30:39.240 --> 0:30:40.800 not just in the year ahead, but just in the 0:30:40.840 --> 0:30:43.040 next six weeks as we wrap up twenty twenty three. 0:30:44.120 --> 0:30:46.320 Right, well, let's let's start with the next six weeks first. 0:30:46.360 --> 0:30:47.960 I mean, you know, you know, as you know, we've 0:30:48.040 --> 0:30:50.360 rallied quite a bit from the October level of five 0:30:50.360 --> 0:30:52.840 oh one on tenure yield. I mean, as you mentioned 0:30:53.200 --> 0:30:55.440 right after that CPI number, you know, we get a 0:30:55.440 --> 0:30:58.800 really large move the market is pricing in and pushing 0:30:58.840 --> 0:31:02.040 forward now some easing from the Fed in twenty twenty four, 0:31:02.040 --> 0:31:04.000 and now we have, you know, a thirty five percent 0:31:04.080 --> 0:31:06.240 chance that they start in March. The easing in twenty 0:31:06.240 --> 0:31:08.640 four has been priced into one hundred, you know, to 0:31:08.640 --> 0:31:10.400 about one hundred base points. You know, we think that's 0:31:10.440 --> 0:31:13.360 a little bit overdone. You know, for the rest of 0:31:13.360 --> 0:31:15.440 the year. We have the Fed on December thirteenth, we 0:31:15.480 --> 0:31:18.360 still have another inflation number, we have another payroll number. 0:31:18.840 --> 0:31:21.200 So you know, I think there's a bit of fomo 0:31:21.280 --> 0:31:23.240 out there in terms of if you don't lock in 0:31:23.320 --> 0:31:26.040 right now, even though our view is no question that 0:31:26.080 --> 0:31:28.480 yields will be lower in twenty twenty four. We think 0:31:28.520 --> 0:31:30.480 around three and a half to three seventy five going 0:31:30.520 --> 0:31:33.440 into near the end of twenty twenty four. But that's 0:31:33.440 --> 0:31:36.280 not necessarily a straight line. And so we've seen a 0:31:36.320 --> 0:31:39.600 bit of this loosing of financial conditions, the equity market 0:31:39.680 --> 0:31:41.360 doing well, and a bit of reversal from the last 0:31:41.360 --> 0:31:43.640 time the Fed Fed met back you know, a month 0:31:43.760 --> 0:31:46.240 or so ago. So you know, I wouldn't be surprised 0:31:46.280 --> 0:31:48.520 if we saw a little bit of rise and interest 0:31:48.560 --> 0:31:50.680 rates in the short term, but for you know, in 0:31:50.720 --> 0:31:52.400 twenty four, there's no question yields or lower. 0:31:52.480 --> 0:31:52.920 Well, one thing I. 0:31:52.880 --> 0:31:55.200 Would say, Leslie, if anything you know for me once, 0:31:55.800 --> 0:31:57.760 shame on you for me twice, because I feel like 0:31:57.760 --> 0:31:59.480 we've had some fake outs when it comes to the 0:31:59.480 --> 0:32:03.719 treasury right and there's either enthusiasm in terms of you know, 0:32:03.920 --> 0:32:07.160 or expectations at rates stay higher for longer as the 0:32:07.240 --> 0:32:10.040 that has certainly lectured us about for a long long time, 0:32:10.400 --> 0:32:11.720 you know, or all of a sudden we move in 0:32:11.760 --> 0:32:13.959 the other direction. The volatility that we can see in 0:32:13.960 --> 0:32:20.000 this market can kind of give you a bit of whiplash. 0:32:18.520 --> 0:32:20.320 No question. I mean, just look at even look at 0:32:20.400 --> 0:32:22.240 what happened with the two year. I mean, the two 0:32:22.280 --> 0:32:25.640 year moved last week around twenty basis points eight lower right. 0:32:25.680 --> 0:32:27.959 That was like the biggest movie that we've seen since SVB. 0:32:28.240 --> 0:32:31.040 So there's no question there's a lot of volatility out there. 0:32:31.080 --> 0:32:33.760 But there's a volatility because this is a show me 0:32:33.840 --> 0:32:37.200 market and you know, with you know, Chapoulo kind of 0:32:37.240 --> 0:32:39.640 having the sort of wait and see type of rhetoric, 0:32:40.320 --> 0:32:42.560 you know, every year, sort of moving on every number. 0:32:42.600 --> 0:32:46.040 When CPI was so weak, the market really adjusted really quickly. 0:32:46.040 --> 0:32:48.959 When claims came out week, the market adjusts quickly. And 0:32:49.040 --> 0:32:50.760 now that you know, we were sort of through that, 0:32:50.840 --> 0:32:53.160 if in fact we have the next CPI we have 0:32:53.240 --> 0:32:56.200 a reversal, they're gonna have a definitely different outcome that 0:32:56.240 --> 0:32:57.640 we're seeing right now in terms of treasure. 0:32:57.680 --> 0:32:57.960 Yelds. 0:32:58.040 --> 0:33:00.000 Well, that's I'm so glad you brought that up, because 0:33:00.120 --> 0:33:02.920 is it does seem like, you know, this was kicked 0:33:02.960 --> 0:33:06.160 off with the ever so slightest you know, downside surprise 0:33:06.280 --> 0:33:08.320 when it came to jobs, when it came to CPI. 0:33:08.880 --> 0:33:11.800 What happens if we find out that you know, inflation 0:33:11.880 --> 0:33:14.080 is a little stickier, getting from three to two percent 0:33:14.160 --> 0:33:15.360 than people thought. 0:33:16.080 --> 0:33:18.280 You know, I think that's that's very valid. That's why 0:33:18.320 --> 0:33:20.640 we don't think that the Fed really doesn't start to 0:33:20.720 --> 0:33:24.320 ease until the third quarter of twenty four. And it's 0:33:24.480 --> 0:33:27.120 you know best you know, it's probably his best interest 0:33:27.240 --> 0:33:29.720 right now to sort of keep that higher for longer 0:33:29.840 --> 0:33:32.440 kind of mentality for you know, the first half of 0:33:32.480 --> 0:33:35.400 twenty four, unless, of course, we see a negative payroll 0:33:35.480 --> 0:33:38.480 print or we see a large decline in confidence. But 0:33:38.560 --> 0:33:41.440 otherwise than that, there's really no reason for them to 0:33:41.720 --> 0:33:44.880 ease in March, right so that higher for longer will 0:33:44.880 --> 0:33:46.640 be there for quite some time. And I think that 0:33:46.680 --> 0:33:49.640 the market is just getting a bit you know over 0:33:49.760 --> 0:33:53.000 skis right now temporarily in terms of yields, but overall 0:33:53.000 --> 0:33:55.560 we think yields will come down. But it's too soon 0:33:55.600 --> 0:33:57.960 to say or wave a victory flag right. 0:33:59.520 --> 0:34:01.560 Before, but not too soon in your opinion to lock 0:34:01.600 --> 0:34:03.040 in some of these yields. 0:34:03.480 --> 0:34:05.640 You're absolutely right, because I mean, when you think about 0:34:05.720 --> 0:34:08.120 you know, when you get to that five percent tenure yield, 0:34:08.200 --> 0:34:09.799 or even where we are right now around that four 0:34:09.840 --> 0:34:13.200 and a half percent, you know that combounding income is 0:34:13.200 --> 0:34:15.640 a huge hell wint to total return, and that's really 0:34:15.640 --> 0:34:17.680 what we're thinking about. I mean, you know, the the 0:34:17.719 --> 0:34:20.640 amount of that yields need to rise right for you 0:34:20.680 --> 0:34:24.399 to have a negative return is you know, sixty basis poicts. 0:34:24.400 --> 0:34:26.120 It's quite a bit. And I know you were talking 0:34:26.120 --> 0:34:28.960 about earlier about the AG and what happened with the 0:34:28.960 --> 0:34:31.120 AG in twenty twenty two, and I think that's that's 0:34:31.120 --> 0:34:33.400 one of the valid points is that you know, we 0:34:33.400 --> 0:34:35.600 see everyone says, oh, could this be the third consecutive 0:34:35.640 --> 0:34:39.560 negative return of fixed income? Right? But you were starting 0:34:39.560 --> 0:34:41.000 a base case of fifty. 0:34:40.840 --> 0:34:43.359 Why buy points? Why by the ten year for four 0:34:43.400 --> 0:34:46.000 point four to two when you could buy the two 0:34:46.120 --> 0:34:47.720 year for four point nine to one. 0:34:48.880 --> 0:34:52.840 Because you have that you know, price appreciation by locking 0:34:52.840 --> 0:34:55.560 in and taking some interest rate exposure here. I mean, 0:34:55.640 --> 0:34:57.919 if anything, you're going to see that two year, which 0:34:58.000 --> 0:35:00.840 I'm sure will decline, but I don't think you're going 0:35:00.920 --> 0:35:05.560 to have that kind of you know, inflation appreciation that 0:35:05.600 --> 0:35:07.600 you're going to have by locking in some industry risk here, 0:35:07.600 --> 0:35:08.799 particularly given where we are on this. 0:35:08.760 --> 0:35:11.319 Line anymore on the shorter and what you're saying is 0:35:11.320 --> 0:35:14.839 no more that appreciation on the shorter duration, I. 0:35:14.760 --> 0:35:16.080 Think you could have it, but you're not going to 0:35:16.160 --> 0:35:18.319 have it compared to what you're seeing and throw that 0:35:18.440 --> 0:35:20.640 longer and the locking in right, because if they start 0:35:20.680 --> 0:35:23.440 to ease, they're easing because the economy is slowing, right, 0:35:23.480 --> 0:35:25.520 in which which we think is going to happen, you'll 0:35:25.560 --> 0:35:28.120 definitely have that long end coming down. And as we know, 0:35:28.520 --> 0:35:32.239 you know, over the past forty years, when the Fed pauses, right, 0:35:32.360 --> 0:35:34.960 interest rates come down, both in the short end and 0:35:35.120 --> 0:35:38.080 in around that tenure. But having that interest rate risk 0:35:38.200 --> 0:35:41.640 now on top of compounding income is great for future 0:35:41.680 --> 0:35:42.240 total return. 0:35:42.560 --> 0:35:49.120 So we had an auction today, strong Treasury auction. Yeah yeah, yeah. 0:35:48.400 --> 0:35:50.360 Go ahead, go ahead, No, sorry, no, I was going 0:35:50.400 --> 0:35:53.000 to say, that's really that's really important too, because you know, 0:35:53.040 --> 0:35:55.200 obviously there's a bit of angst with that twenty year 0:35:55.200 --> 0:35:57.319 given what happened with the thirty year, right, I mean, 0:35:57.400 --> 0:35:59.400 with that five basis point out that we saw on 0:35:59.440 --> 0:36:01.960 the thirty year auction, there's a bit of anxiety with 0:36:02.040 --> 0:36:03.719 that twenty year because first of all, the twenty year 0:36:03.800 --> 0:36:06.920 is doesn't have the same sponsorship to begin with, right 0:36:06.920 --> 0:36:10.319 as you would as a ten to thirty combined with 0:36:10.320 --> 0:36:12.640 what happened in the thirty year auction, there was a 0:36:12.680 --> 0:36:15.000 bit of anxiety, but actually it went quite well. 0:36:15.719 --> 0:36:20.800 So okay, real quickly, just about forty seconds. Your recession 0:36:20.880 --> 0:36:22.759 next year? You're saying we don't cut rates until the 0:36:23.040 --> 0:36:25.680 third quarter of next year. Will there be a recession? 0:36:25.719 --> 0:36:27.480 Is that your expectations as part of the view. 0:36:27.560 --> 0:36:30.680 Just quickly, No, it's not. We don't have a recession view. 0:36:30.719 --> 0:36:32.319 We think a slow in growth view. But you know 0:36:32.440 --> 0:36:34.680 the ease will be simply because we think inflation's coming 0:36:34.680 --> 0:36:37.200 down and well and growth will be below trend, but 0:36:37.239 --> 0:36:37.840 not recession. 0:36:37.960 --> 0:36:41.080 All right, interesting stuff, listen, Thank you so much. Leslie Falconio, 0:36:41.200 --> 0:36:44.760 head of taxable fixed income Strategy at UBS Global Wealth Management. 0:36:44.760 --> 0:36:47.399 I meant to ask hers some questions for my cousin's husband, David, 0:36:47.440 --> 0:36:50.600 because we've been talking about that taxable fixed This. 0:36:50.560 --> 0:36:53.160 Is like a theme today. We keep having these extra questions. 0:36:53.239 --> 0:36:54.840 What's about relating back to my family? 0:36:54.920 --> 0:36:58.759 Still, what's interesting We should mention Richmond Fed President Tom 0:36:58.800 --> 0:37:02.799 Barkin saying that progress isn't sufficient enough for the feeder 0:37:02.920 --> 0:37:04.920 to declare victory on inflation. 0:37:05.120 --> 0:37:06.760 So folks ain't. 0:37:06.560 --> 0:37:07.839 Here that we're not there yet. 0:37:08.000 --> 0:37:10.319 Know that we're not there yet, not. 0:37:10.360 --> 0:37:15.040 There O patience, patience, not there, Just saying, just putting 0:37:15.080 --> 0:37:15.560 it out there. 0:37:15.840 --> 0:37:17.040 This is Bloomberg. 0:37:19.760 --> 0:37:25.839 Brothering Marco Journal. How about you let me drive? 0:37:26.400 --> 0:37:30.000 No no, no, no, please go and drive, honey, please? 0:37:30.160 --> 0:37:31.600 How the gravels? 0:37:32.040 --> 0:37:33.400 Let's wat I want to try it. 0:37:35.640 --> 0:37:36.560 It's a good question. 0:37:40.360 --> 0:37:42.880 This is the drive to the clothes. 0:37:42.480 --> 0:37:43.279 Dot com for me. 0:37:43.320 --> 0:37:46.760 I think we'll buy around yold it on on Bloomberg Radio. 0:37:46.960 --> 0:37:48.120 A nice to talk everybody. 0:37:48.200 --> 0:37:49.960 What we got about seventeen and a half minutes left 0:37:49.960 --> 0:37:53.480 in today's trading session. CONN equity rally underway. It's an 0:37:53.480 --> 0:37:56.480 interesting week. Holiday shortened trading week because of Thanksgiving. There 0:37:56.520 --> 0:37:59.320 is some trading, a shortened day on Friday. We have 0:37:59.400 --> 0:38:00.480 some economic news. 0:38:01.160 --> 0:38:02.960 What a volumes volumes are hired today? 0:38:03.040 --> 0:38:05.000 Well maybe people came in maybe because on. 0:38:04.960 --> 0:38:06.799 The NASDAK, I should say the NASDAK and the DOV 0:38:06.880 --> 0:38:09.720 volumes are higher. S and P volumes are lower lower. 0:38:09.760 --> 0:38:12.400 Okay, So but I think we're on track for is 0:38:12.400 --> 0:38:14.680 it a fourth week of games potentially for the S 0:38:14.719 --> 0:38:17.960 and P five hundred weekly, so pretty significant. All right, 0:38:18.000 --> 0:38:20.120 So let's see what our guest has to say our 0:38:20.200 --> 0:38:22.480 drive to the close. It is certainly on with us. 0:38:22.880 --> 0:38:23.479 Is Greg Calter. 0:38:23.560 --> 0:38:27.319 He's director of research at Carnegie Investment Council. They've got 0:38:27.320 --> 0:38:30.839 about four billion dollars in assets under management. He is 0:38:30.880 --> 0:38:34.040 on Zoom from Cleveland, Ohio, and I just want to 0:38:34.040 --> 0:38:37.560 mention that the company, Carnegie Investment, it's a registered investment 0:38:37.560 --> 0:38:39.400 advisor and they're also a wealth manager. 0:38:39.520 --> 0:38:41.359 Hey, Greg, welcome. How are you. 0:38:42.840 --> 0:38:44.879 I'm doing fine. I hope you are as well. 0:38:45.040 --> 0:38:45.399 We are. 0:38:45.520 --> 0:38:47.640 We're, you know, trying to keep up with the open 0:38:47.680 --> 0:38:50.400 AI story. Is that something that you, guys I don't know, 0:38:50.520 --> 0:38:53.520 think about talk about on a Monday for fun or 0:38:53.560 --> 0:38:56.640 is it about something you talk about from an investment perspective. 0:38:58.320 --> 0:39:01.919 Probably both. Lots of events over the weekend, for sure, 0:39:02.200 --> 0:39:05.000 with Sam Altman and I just heard on your news 0:39:05.000 --> 0:39:08.680 piece there seven hundred are threatening to leave. We're seeing 0:39:08.760 --> 0:39:12.320 Microsoft driving to a new high and video which reports 0:39:12.320 --> 0:39:16.560 this week as well. So definitely it's water cooler chat 0:39:16.719 --> 0:39:20.040 as well as real business in regards to what Microsoft 0:39:20.120 --> 0:39:21.920 is doing by hiring Sam. 0:39:22.600 --> 0:39:25.440 Does anything concern you about this story? We spent a 0:39:25.480 --> 0:39:27.719 good portion of the beginning of our program talking about 0:39:27.719 --> 0:39:31.600 philosophical differences between Sam Altman and others on the board 0:39:31.640 --> 0:39:35.840 of Open Ai with regard to guardrails in terms of 0:39:35.840 --> 0:39:38.560 how you're thinking about the technology as an investor, does 0:39:38.600 --> 0:39:39.520 anything give you pause. 0:39:42.239 --> 0:39:49.160 It's obviously a potentially and probably contentious area. There's some 0:39:49.280 --> 0:39:53.200 who think that AI can go too far and potentially 0:39:53.320 --> 0:39:57.359 ruin the world. Others are looking for the benefits in 0:39:57.480 --> 0:40:04.440 terms of business productivity and so forth. Remains to be 0:40:04.560 --> 0:40:07.840 seen how all this plays out there. There's certainly incredible 0:40:07.920 --> 0:40:11.600 benefits that can be had if handled properly. So I 0:40:11.640 --> 0:40:14.680 think that's the main crux of the issue here is 0:40:14.719 --> 0:40:18.240 how this plays out over time. And really we're talking 0:40:18.239 --> 0:40:21.719 about one year since the CHTGPT came onto the. 0:40:21.680 --> 0:40:24.439 Scene right January, right of this year. That's the big 0:40:24.440 --> 0:40:27.919 investment by by Microsoftware. We're all like, wait, what's going 0:40:27.960 --> 0:40:28.400 on here? 0:40:28.640 --> 0:40:28.839 Hey? 0:40:28.920 --> 0:40:33.160 You said, I feel like, first of all, Greg that 0:40:33.200 --> 0:40:36.239 when there's money to be made, investors are like, yeah, yeah, 0:40:36.239 --> 0:40:37.759 I got some concerns, but how do I make money? 0:40:37.800 --> 0:40:39.200 So how do I make money off of this? You 0:40:39.239 --> 0:40:42.640 said that there's real business. It's not only water cooler 0:40:42.719 --> 0:40:47.280 talk today, it's real business. So you know, our investing 0:40:47.560 --> 0:40:50.320 investors calling you guys up and saying, you know, increase 0:40:50.360 --> 0:40:53.359 my position exposure to Microsoft and VideA. Is there a 0:40:53.360 --> 0:40:56.160 private market folks? Are you know who are saying, how 0:40:56.200 --> 0:40:58.319 do I get in on the open AI side of it? 0:40:58.360 --> 0:41:02.239 From a private market? What is the real business that's 0:41:02.280 --> 0:41:03.920 coming off of this for you guys today? 0:41:05.440 --> 0:41:09.000 Very good question, Carol, and we have had a client's 0:41:09.120 --> 0:41:12.520 call and ask us what we're doing in this regard. 0:41:13.120 --> 0:41:17.640 I think a lot of investors have lots of questions 0:41:17.719 --> 0:41:22.200 and are confused on exactly what it is. Our stance 0:41:22.280 --> 0:41:26.400 has been, rather than go with the more speculative companies 0:41:26.440 --> 0:41:29.880 that really don't have revenues yet, we're looking at the 0:41:29.920 --> 0:41:34.120 Microsoft's of the world, and Amazon and Nvidia, the companies 0:41:34.120 --> 0:41:37.880 that make the chips and the data centers, so Eaten 0:41:37.960 --> 0:41:41.560 providing the electricity and the electrical power into that area. 0:41:41.920 --> 0:41:45.799 Those are the ways we're playing this. The more established companies. 0:41:47.120 --> 0:41:49.359 I want to shift gears a little bit and and 0:41:49.520 --> 0:41:51.200 sort of zoom out. Well, Carlly, you want to do well? 0:41:51.200 --> 0:41:53.200 You said eat and providing the power, meaning what wait, 0:41:53.280 --> 0:41:53.759 help me here. 0:41:55.320 --> 0:41:58.080 Sure. Eaton is a Cleveland company actually not too far 0:41:58.120 --> 0:42:02.960 from us right here. They are huge into the electrical business, 0:42:03.000 --> 0:42:07.240 so everything from soup to nuts in terms of regulators 0:42:07.280 --> 0:42:12.880 and their backlog is huge and it's out into multi 0:42:13.000 --> 0:42:17.800 years now. So Eaton's products are needed for these data centers. 0:42:18.160 --> 0:42:21.080 The data centers are what are crunching all this data. 0:42:21.440 --> 0:42:25.560 AI is probably tenfold at least fivefold increase over what 0:42:25.600 --> 0:42:29.280 we have currently, So Eaton is a huge player, huge 0:42:29.320 --> 0:42:32.400 beneficiary of that. As long as this trend continues. 0:42:32.520 --> 0:42:34.960 It is a ninety billion dollar market cap. You're right, 0:42:34.960 --> 0:42:38.160 we don't necessarily talk about it day to day, and 0:42:38.200 --> 0:42:39.200 it is up about. 0:42:38.960 --> 0:42:40.160 Forty five percent this year. 0:42:40.200 --> 0:42:42.600 This speaks to It's like I feel like when it 0:42:42.719 --> 0:42:45.399 was either content and folks are like, I don't care 0:42:45.440 --> 0:42:47.280 who creates the content. I want to be the pipe 0:42:47.360 --> 0:42:49.200 that gets it into everybody's home. And that's what it 0:42:49.200 --> 0:42:52.840 sounds to me like right now. Artificial intelligence, whether we 0:42:52.920 --> 0:42:55.440 have problems with it or concerns about it, probably here 0:42:55.480 --> 0:42:58.480 to stay. I don't kind of necessarily know who's going 0:42:58.520 --> 0:43:00.279 to be leading with it, but if I can be 0:43:00.320 --> 0:43:02.200 the backbone or the infrastructure, I'm in it. 0:43:02.400 --> 0:43:04.400 Right It's the so called picks and shovels approach, the 0:43:04.440 --> 0:43:07.600 gold rush, or the Levi's jeans approach. Right, Okay, so 0:43:07.840 --> 0:43:10.880 let's talk more of those, Greg, what else do you 0:43:10.920 --> 0:43:13.919 have for us? You've got Eton that Carol just mentioned 0:43:13.960 --> 0:43:16.120 that you just mentioned. Then there are the big players 0:43:16.160 --> 0:43:20.040 like Microsoft, like Amazon, like Nvidia. Who else is out 0:43:20.040 --> 0:43:22.560 there that could be that it is on your radar. 0:43:23.640 --> 0:43:28.000 Sure, there's some other companies that I think investors wouldn't 0:43:28.040 --> 0:43:31.600 really think of, but a Center ACN is the symbol 0:43:31.640 --> 0:43:36.560 there in terms of the consulting. All these companies want 0:43:36.600 --> 0:43:39.399 to deploy AI, but how do they do it? What's 0:43:39.440 --> 0:43:43.239 the best way? A Century is a huge consultant and 0:43:43.280 --> 0:43:46.440 they will be one area we think will benefit from that. 0:43:46.640 --> 0:43:48.960 Funny you say that Center're hitting a fifty two week 0:43:49.040 --> 0:43:53.080 high today. Shares up so far this year twenty four percent. 0:43:53.120 --> 0:43:54.520 Carol, that's pretty fascinating. 0:43:54.520 --> 0:43:57.080 It's funny, you know, Greg, Very early on in my career, 0:43:57.800 --> 0:43:59.680 it was like the beginning of the mutual fund industry. 0:43:59.719 --> 0:44:01.520 And that's how we would play it with our host. 0:44:01.600 --> 0:44:04.080 It's like something would happen in the news world and 0:44:04.120 --> 0:44:06.040 it's like, okay, so how do you buy it? And 0:44:06.080 --> 0:44:08.920 I always throughout this example, it was like, unfortunately, there 0:44:08.960 --> 0:44:11.839 could be a hurricane or devastation. It'd be like, Okay, 0:44:11.880 --> 0:44:13.680 people are going to be buying the cement. You know, 0:44:13.719 --> 0:44:17.160 companies we think about we're in wartime, the defense companies 0:44:17.239 --> 0:44:19.400 right like you look at them right now, and I 0:44:19.440 --> 0:44:21.680 feel like, is that that is kind of the smart 0:44:21.680 --> 0:44:24.719 way to be looking at this news in this at 0:44:24.719 --> 0:44:29.440 this particular time. In terms of open AI. 0:44:28.840 --> 0:44:32.480 No question. I mean here's another one. Striker is going 0:44:32.560 --> 0:44:37.520 to be using AI in the future of its implants, 0:44:37.560 --> 0:44:40.560 and you know from personal experience, I'll be having a 0:44:40.640 --> 0:44:44.239 hip replacement in ten days. You know, there will be 0:44:44.320 --> 0:44:47.880 using the Maco robot. Striker is at the cusp of 0:44:47.920 --> 0:44:51.400 all kinds of innovation and they'll they will be deploying 0:44:51.480 --> 0:44:54.120 AI in that space as well. So these are all 0:44:54.120 --> 0:44:58.879 to make these procedures easier, faster, faster recovery. I mean, 0:44:58.880 --> 0:45:02.120 that's huge for so who's undergoing that type of procedure. 0:45:02.880 --> 0:45:05.600 Really smart way to look at this story. Can't tell 0:45:05.600 --> 0:45:07.960 you how much we appreciate it. Greg Halter, director of 0:45:07.960 --> 0:45:11.040 Research at Carnegie Investment Council. We mentioned four billion in 0:45:11.120 --> 0:45:13.959 assets under management. Happy Thanksgiving, Greg, thank you. 0:45:14.000 --> 0:45:16.120 Yeah, and so good luck on the hip surgery coming 0:45:16.160 --> 0:45:18.800 up ten days away. I hope you have a RESTful 0:45:18.800 --> 0:45:20.680 time in your back on your feet and back with 0:45:20.760 --> 0:45:21.839 us to very soon. 0:45:21.840 --> 0:45:25.440 Greg appreciate it absolutely well. Wishes to him in that journey. 0:45:25.640 --> 0:45:25.920 All right. 0:45:25.960 --> 0:45:28.319 You are listening and watching Bloomberg Business Week Carol Master, 0:45:28.360 --> 0:45:30.520 Tim Stanovic, and this is Bloomberg. 0:45:32.000 --> 0:45:35.280 This is the Bloomberg Business Week podcast of a little 0:45:35.280 --> 0:45:38.799 on Apple, Spotify, and anywhere else you get your podcast. 0:45:39.320 --> 0:45:42.840 Listen live weekday afternoons from three to six Eastern on 0:45:42.960 --> 0:45:46.320 Bloomberg dot com, the iHeartRadio app, tune In, and the 0:45:46.360 --> 0:45:49.319 Bloomberg Business App. You can also watch us live every 0:45:49.360 --> 0:45:52.960 weekday on YouTube and always on the Bloomberg Journal alone.