WEBVTT - Anthropic Model Scare Sparks Bessent, Powell Warning to Bank CEOs 

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<v Speaker 2>This is the way it works, Folks at Bloomberg News.

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<v Speaker 2>When a story gets a green bee next to it,

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<v Speaker 2>that's a good thing. That means it's exclusive or as

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<v Speaker 2>those newsgeeks call it, a scoop, and this is a

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<v Speaker 2>good one. Wow. Treasury Secretary Scott Bessen and feder Reserve

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<v Speaker 2>Chair Drome Palce summoned Wall Street leaders to an urgent

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<v Speaker 2>meeting on concerns that the latest artificial intelligence model from

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<v Speaker 2>Anthropic we'll usher in an era of greater cyber risk.

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<v Speaker 2>Great Our finance team Todd Gillespie, Katanga Gants, Jack Johnson,

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<v Speaker 2>Hannah Levitt, and shrinanarajen Co wrote that and the editor

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<v Speaker 2>is with us on this story. Katherine Chiglinsky, US finance

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<v Speaker 2>team leader for Bloomberg News, What was this meeting and

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<v Speaker 2>why was it like so urgently called?

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<v Speaker 3>I guess well, it's really interesting because obviously, like Besstt

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<v Speaker 3>and Pale are always meeting with bank CEOs and sort

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<v Speaker 3>of staying in touch with the financial system. But to

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<v Speaker 3>have them both sort of in on this meeting in which, yes,

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<v Speaker 3>they called the bank CEOs, who many of which were

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<v Speaker 3>in town for sort of a lobbying meeting, they called

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<v Speaker 3>them in for this urgent meeting. And I think what's

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<v Speaker 3>really interesting is it really is about this Anthropic Mythos

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<v Speaker 3>model and what it really pretends for the industry. And

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<v Speaker 3>I think that's key. You know, it sounds like obviously

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<v Speaker 3>Anthropic is trying to be very thoughtful on sort of

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<v Speaker 3>releasing it to select few companies to sort of be

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<v Speaker 3>able to test their systems. And I think banks obviously

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<v Speaker 3>are kind of a key source that we need to

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<v Speaker 3>needs to make sure that they can sort of batten

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<v Speaker 3>down the hatches and make sure they're ready for this

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<v Speaker 3>next era of cyber risk.

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<v Speaker 4>How unusual is this, Catherine for bank leaders to be

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<v Speaker 4>summoned on such short notice over the potential stemic risk

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<v Speaker 4>of a private company to their industry.

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<v Speaker 3>Yeah, well, and I think it's it's interesting because they

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<v Speaker 3>you know, they'll meet on macro events, they'll meet on larger,

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<v Speaker 3>broader trends in the industry. I think this is a

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<v Speaker 3>little bit interesting in that I'm not sure that there's

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<v Speaker 3>exactly been like an AI prompt before that has spurred

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<v Speaker 3>them all to come together and come together quickly. You know.

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<v Speaker 3>AI has been like definitely a risk factor that all

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<v Speaker 3>the companies are talking about and have been talking about

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<v Speaker 3>for many years at this point. But for them to

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<v Speaker 3>sort of come together and say, listen, this is to

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<v Speaker 3>get a warning from the Fed and the Treasury that

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<v Speaker 3>says this is a big risk and you need to

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<v Speaker 3>be preparing is like a very big statement.

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<v Speaker 2>What the banks. Have the banks acknowledged this risk or

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<v Speaker 2>how have the banks responded to some of these AI

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<v Speaker 2>risk that may be out there as a release to cybersecurity.

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<v Speaker 3>Well, I think honestly, in the past few years banks

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<v Speaker 3>have really ramped up their cybersecurity protocols. I think AI

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<v Speaker 3>is a new challenge obviously, because it just it makes

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<v Speaker 3>it quicker that these these attacks and these risks can evolve.

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<v Speaker 3>So I do think that you know, banks have been

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<v Speaker 3>responding already and are already sort of quickly on this.

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<v Speaker 3>Like you look at Project class Wing, which is that

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<v Speaker 3>sort of anthropic lad limited release to certain companies to

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<v Speaker 3>protect their defenses, and JP Morgan is already on that list,

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<v Speaker 3>So it's it's clear that they're quickly trying to get

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<v Speaker 3>involved and to make sure that they can sort of

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<v Speaker 3>ready their systems as best you possibly can in this

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<v Speaker 3>sort of new age. But I do think it's interesting

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<v Speaker 3>that like this is enough of a you know, as

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<v Speaker 3>we're sort of questioning, you know, how good really is

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<v Speaker 3>meet those I think this is a real indicator that

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<v Speaker 3>regulators are taking it seriously.

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<v Speaker 4>Have there been certain banks within that group that are

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<v Speaker 4>more proactive about mitigating these AI and cybersecurity risks than others?

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<v Speaker 4>Any kind of standouts in terms of what they're doing.

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<v Speaker 3>Well, I think you have all the especially the big

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<v Speaker 3>Wall Street banks, I think have been ramping up that

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<v Speaker 3>a lot, and part of it is honestly cyber risk,

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<v Speaker 3>you know, actual reputation and if you're JP Morgan, the

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<v Speaker 3>top us bank, you've got a lot to protect. I

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<v Speaker 3>do think what's going to be really interesting is like

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<v Speaker 3>how regionals handle this. You know, a smaller bank that

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<v Speaker 3>maybe doesn't have as much of the flexibility and the

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<v Speaker 3>capital to sort of support large scales sort of cyber initiatives.

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<v Speaker 3>It is going to be really important how the big

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<v Speaker 3>giants JP Morgan Morgan Stanley City Group addressed this, because

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<v Speaker 3>I think it'll sort of set the tone for the

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<v Speaker 3>rest of the industry.

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<v Speaker 2>Anthropic. You're reporting shows Anthropic has separately been battling the

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<v Speaker 2>Trump administration in court that Peddicon had labeled the company

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<v Speaker 2>Anthropic as a supply a chain risk, a designation that

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<v Speaker 2>Anthropic has opposed. Here, So the government's definitely looking at

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<v Speaker 2>this stuff from a lot of different angles, aren't they definitely?

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<v Speaker 3>And you know, I think right now, whenever anyone sees

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<v Speaker 3>Anthropic and the government and you're grown, you're thinking about

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<v Speaker 3>this sort of political battle that they're in over the

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<v Speaker 3>Pentagon's designation. And I do think though the fact that

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<v Speaker 3>Jerome pal was in this meeting, you know, he's obviously

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<v Speaker 3>trying to be very careful. They don't want to be,

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<v Speaker 3>you know, seen as a very political institution. But I

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<v Speaker 3>think the fact that the Federal Reserve was in this

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<v Speaker 3>meeting really understates the fact that this is less of

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<v Speaker 3>a political thing and this is really more of a

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<v Speaker 3>you know, as a top banking regulator, the FED is

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<v Speaker 3>concerned about sort of cyber risks and how the industry

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<v Speaker 3>is doing it, and the FED knows banks well, I

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<v Speaker 3>mean they have the examiners who are going in routinely

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<v Speaker 3>to sort of supervise operations. So yeah, I think a

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<v Speaker 3>little less of a political bent for this meeting in particular,

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<v Speaker 3>just really underscores sort of how cyber becomes a top

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<v Speaker 3>topic for them.

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<v Speaker 4>We have bank earnings coming up. We're going to hear

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<v Speaker 4>from a lot of these executives on earnings calls next week.

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<v Speaker 4>Do you expect that they'll address this at all?

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<v Speaker 3>It would be shocking if they don't, mostly because we're

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<v Speaker 3>always talking about AI. I feel like every earnings call,

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<v Speaker 3>you know, everyone wants to know how are you using it?

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<v Speaker 3>What does it mean for your employees? And I think

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<v Speaker 3>a natural extension is sort of what are you doing

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<v Speaker 3>for the risks of cyber especially? You know, you see

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<v Speaker 3>with escalating global conflicts like the Iran War. We just

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<v Speaker 3>had you know, a fintech chime got hacked, So I think,

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<v Speaker 3>you know, there's some there's definitely an impetus for them

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<v Speaker 3>to address this next week.

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<v Speaker 2>What is the expectation of earnings next week?

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<v Speaker 3>Well, a blowout quarter for trading, It's going to be

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<v Speaker 3>like potentially across all of the five biggest trading desks.

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<v Speaker 3>We're expecting stock trading to set records and fixed income

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<v Speaker 3>trading good at most of the banks. I think that'll

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<v Speaker 3>be up M and A. It's kind of interesting because

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<v Speaker 3>you would think that geopolitics really put a damper on it,

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<v Speaker 3>but most of what we've seen so far and what

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<v Speaker 3>they've been signaling is that it's really held up. So

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<v Speaker 3>that'll be interesting. I think another wild card in addition

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<v Speaker 3>to sort of how they address the AI though, is

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<v Speaker 3>private credit, Like how do they address it? Investors are

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<v Speaker 3>very want details on what are their exposures, and so

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<v Speaker 3>we'll be monitoring that pretty closely.

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<v Speaker 4>With us More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 2>Let's talk about the consumer. Let's talk about the consumer.

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<v Speaker 2>What are they buying? And one of the great places

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<v Speaker 2>to look is sneakers and you look at Nike and

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<v Speaker 2>you can do that with Punham Boyle Senior US e

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<v Speaker 2>commerce and retail analyst at Bloomberg Intelligence. There's so many

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<v Speaker 2>puts and takes for the Nike because, I mean, it's

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<v Speaker 2>a product everybody knows, it's a global product, but that

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<v Speaker 2>has pluses and minuses. Put him, what's the Nike story here?

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<v Speaker 2>I know they've had a lot of challenges with China.

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<v Speaker 2>They've had a lot of challenges managing their inventory, tariffs

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<v Speaker 2>like a lot of other companies. What's the Nike story

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<v Speaker 2>right now?

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<v Speaker 5>Pooham.

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<v Speaker 6>Yeah, So Nike is basically going on or a turnaround.

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<v Speaker 6>There's a lot of things that they need to fix,

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<v Speaker 6>but there are things that they have fixed. So let's

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<v Speaker 6>start with the biggest piece of the business, which is

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<v Speaker 6>North America. In North America, since Ali A. Hill has

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<v Speaker 6>taken helm, they have made improvements and fact sales have

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<v Speaker 6>turned positive there and that's a sign that the initiatives

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<v Speaker 6>put in place, getting the right product back in, working

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<v Speaker 6>on speed, clearing out old product, reducing inventory. It's all

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<v Speaker 6>paying off and we expect that to continue. The challenge, however,

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<v Speaker 6>has been China. You know, as we know we spoke

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<v Speaker 6>about this earlier. China is a market that not just Nike,

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<v Speaker 6>but every at leisure company is eyeing for growth, for

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<v Speaker 6>long term growth, and in China, Nike has had major hiccups.

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<v Speaker 6>So the playbook there is to repeat what they did

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<v Speaker 6>in North America to fix the business. But it's not

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<v Speaker 6>going to happen overnight. It is going to take time,

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<v Speaker 6>and I think it's just about being patient and watching

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<v Speaker 6>them execute against China as well.

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<v Speaker 4>Chinese consumer broadly have just been shifting two more local brands.

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<v Speaker 4>What will it take for Nike to recapture their appetite boonem.

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<v Speaker 6>I think it's building brand heat right. The first thing

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<v Speaker 6>they have to do is get the right product in

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<v Speaker 6>So when you look at the product that's being sold

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<v Speaker 6>in China, it's heavily discounted. In fact, Nike's perceived as

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<v Speaker 6>an off price label in China, so they need to

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<v Speaker 6>flip that image. They need to move the discounting because

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<v Speaker 6>that's clearly not good. They need to introduce premium product

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<v Speaker 6>into the Chinese marketplace and then have local ambassadors, local

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<v Speaker 6>clubs really validate the brand for them, and all that

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<v Speaker 6>will start with product first and then after and we

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<v Speaker 6>do think it's possible, but it's just there's so much

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<v Speaker 6>old inventory there still right now that needs to be discounted.

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<v Speaker 6>It's going to take I think at least twelve to

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<v Speaker 6>eighteen months.

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<v Speaker 2>If I'm an investor, that's twelve eighteen month timeframe. I'm

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<v Speaker 2>not sure I'm that interested in it. How's the company

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<v Speaker 2>trying to position and it's turnaround here to appeal to investors?

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<v Speaker 6>I mean, look, people, investors are not being patient and

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<v Speaker 6>we can see that with the reaction and the shares.

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<v Speaker 6>Shares are down year to date, and Nike is just

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<v Speaker 6>reiterating exactly what it's doing, and it's talking about its playbook,

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<v Speaker 6>gloring inventory, is taking out discounts, getting the right product in.

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<v Speaker 6>I think the next catalyst for Nike, in my mind,

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<v Speaker 6>is going to be its analyst Day. It's a day

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<v Speaker 6>that we've been waiting for for years. They postponed the

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<v Speaker 6>last one they announced a few years ago. It'll take

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<v Speaker 6>place in the fall, and we think that's when Nike

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<v Speaker 6>will be able to really highlight the success it's had

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<v Speaker 6>and also show its path forward with new inventory, new product,

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<v Speaker 6>new collaborations, et cetera.

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<v Speaker 4>Punam, how does this war and any disruptions from a

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<v Speaker 4>higher oil, the risk of inflation and make Nike's turn

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<v Speaker 4>around even more difficult. What challenges does it pose?

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<v Speaker 6>You know, the risks of the war are not specific

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<v Speaker 6>to Nike. I think it's across the consumer space. Oil

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<v Speaker 6>prices means higher gas prices. It impacts low income consumers

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<v Speaker 6>more than it does high income consumers. Thankfully, Nike is

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<v Speaker 6>a brand that probably leans more towards the mid to

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<v Speaker 6>high end than the low end, so they do have

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<v Speaker 6>some buffer compared to a low end retailer. That said,

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<v Speaker 6>you know, if things prolong for a long time and

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<v Speaker 6>inflation continues to take higher, consumers will pull back, and

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<v Speaker 6>the first place they pull back is undiscretionary goods, and

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<v Speaker 6>sneakers is a discretionary purchase.

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<v Speaker 2>Put them just step back a little bit. What's the

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<v Speaker 2>competitive landscape for at leisure because there's so many I mean,

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<v Speaker 2>Nike used to be just to me at least, a

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<v Speaker 2>dominant brand, but it seems like it's gotten more and

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<v Speaker 2>more competitive. I'm seeing brands of sneakers around here that

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<v Speaker 2>I haven't seen before.

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<v Speaker 6>You're absolutely right, Nike is still the dominant sneaker player globally.

0:11:49.280 --> 0:11:51.839
<v Speaker 6>It is the largest footware brand in the world. It

0:11:51.880 --> 0:11:54.120
<v Speaker 6>remains that, but it has lost here over the last

0:11:54.160 --> 0:11:56.840
<v Speaker 6>five years to other brands. Some of the brands that

0:11:56.880 --> 0:11:59.840
<v Speaker 6>you may be referring to include on Hoka, A six

0:12:00.120 --> 0:12:03.640
<v Speaker 6>new Balance. All these brands and some others have gained traction,

0:12:04.120 --> 0:12:08.360
<v Speaker 6>especially in the lifestyle and running space. That said, when

0:12:08.360 --> 0:12:10.839
<v Speaker 6>you look at the size of those brands against Nike,

0:12:11.240 --> 0:12:14.560
<v Speaker 6>there's still a wide gap. So we run a sneaker

0:12:14.640 --> 0:12:17.240
<v Speaker 6>survey twice a year and when we ask consumers, you know,

0:12:17.320 --> 0:12:19.720
<v Speaker 6>what is the choice of brand when it comes to sneakers,

0:12:20.000 --> 0:12:23.240
<v Speaker 6>Nike still number one. So when you look at broadly,

0:12:23.559 --> 0:12:25.600
<v Speaker 6>Nike is still the favorite brand, but when you look

0:12:25.600 --> 0:12:28.280
<v Speaker 6>into niche markets, you are seeing the rise of some

0:12:28.360 --> 0:12:30.880
<v Speaker 6>of these other brands, which is obviously why Nike has

0:12:30.880 --> 0:12:31.600
<v Speaker 6>been losing share.

0:12:32.360 --> 0:12:35.040
<v Speaker 4>Put in very quickly, what else stood out to you

0:12:35.120 --> 0:12:37.640
<v Speaker 4>as some of the key differences in this report compared

0:12:37.640 --> 0:12:40.240
<v Speaker 4>to prior quarters. Any metrics that caught your attention?

0:12:41.520 --> 0:12:43.840
<v Speaker 6>I think I think the biggest metric that caught my

0:12:43.880 --> 0:12:47.280
<v Speaker 6>attention was the inventory levels. They have been dropping, and

0:12:47.360 --> 0:12:49.680
<v Speaker 6>that's a really good sign because that just shows us

0:12:49.760 --> 0:12:52.400
<v Speaker 6>that the efforts that the management team is putting in

0:12:52.480 --> 0:12:55.400
<v Speaker 6>place is bringing a new product, and the new product

0:12:55.400 --> 0:12:57.840
<v Speaker 6>results are actually quite impressive. If you look at the

0:12:57.840 --> 0:13:00.360
<v Speaker 6>sales of their new products, they are up nicely, and

0:13:00.400 --> 0:13:03.480
<v Speaker 6>that reflects that anything that they're putting their mind on

0:13:03.679 --> 0:13:04.160
<v Speaker 6>is working.

0:13:05.040 --> 0:13:08.199
<v Speaker 2>Stay with us more from Bloomberg Intelligence coming up after this.

0:13:12.040 --> 0:13:15.720
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:13:15.800 --> 0:13:18.880
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:13:18.920 --> 0:13:22.240
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

0:13:22.280 --> 0:13:25.400
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0:13:26.280 --> 0:13:30.080
<v Speaker 2>The war in Iran is creating obviously some logistic concerns,

0:13:30.120 --> 0:13:32.679
<v Speaker 2>particularly in the energy space, but also some of the

0:13:32.679 --> 0:13:34.680
<v Speaker 2>metals that get that come out of that part of

0:13:34.679 --> 0:13:36.480
<v Speaker 2>the world, and that's a little bit of an issue

0:13:36.559 --> 0:13:39.720
<v Speaker 2>for the auto industry. Checking with Steve Man Bloomberg Intelligence,

0:13:39.720 --> 0:13:42.240
<v Speaker 2>Global Autos and industrials and analysts. Steeve talk to us

0:13:42.240 --> 0:13:46.160
<v Speaker 2>about the global auto companies and are they facing any

0:13:46.280 --> 0:13:50.600
<v Speaker 2>challenges by the unrest the war in the Mid East.

0:13:51.600 --> 0:13:55.160
<v Speaker 5>Yeah, definitely, they are facing a lot of logistic issues.

0:13:55.200 --> 0:13:58.480
<v Speaker 5>You know, gasoline prices are high. But we publish a

0:13:58.520 --> 0:14:03.760
<v Speaker 5>piece of research today focusing on aluminum because aluminum is

0:14:03.840 --> 0:14:08.120
<v Speaker 5>a critical metal for the auto industry. It's a substitute

0:14:08.160 --> 0:14:11.959
<v Speaker 5>for steel and it's supposed to be. It's used to

0:14:12.600 --> 0:14:16.199
<v Speaker 5>make the vehicle a little bit lighter. It's used even

0:14:16.280 --> 0:14:20.480
<v Speaker 5>more so on evs because you know, they want to

0:14:20.680 --> 0:14:22.920
<v Speaker 5>you know, reduce the weight of the vehicle so the

0:14:23.120 --> 0:14:27.640
<v Speaker 5>driving range is longer and extends the battery life. So

0:14:28.760 --> 0:14:33.720
<v Speaker 5>evs typically use about seventy five eighty percent more aluminum,

0:14:33.920 --> 0:14:38.480
<v Speaker 5>around eight hundred pounds per car. Gasoline cars a little

0:14:38.480 --> 0:14:43.680
<v Speaker 5>bit less. It's about four hundred pounds to five hundred

0:14:43.720 --> 0:14:48.240
<v Speaker 5>pounds per vehicle. Doesn't seem like it's significant, but it

0:14:48.320 --> 0:14:50.600
<v Speaker 5>is a big cost for the auto industry.

0:14:51.280 --> 0:14:54.400
<v Speaker 4>Steve, how quickly does the spike and aluminum costs feed

0:14:54.440 --> 0:14:57.480
<v Speaker 4>through to production costs and does that eventually get passed

0:14:57.480 --> 0:14:58.320
<v Speaker 4>onto the consumer.

0:14:59.160 --> 0:15:06.440
<v Speaker 5>Well, Fortunately, the aluminum costs is more of an inflationary,

0:15:06.680 --> 0:15:10.600
<v Speaker 5>you know, the aluminum supply chain issues that we're seeing.

0:15:10.640 --> 0:15:14.560
<v Speaker 5>It's more of an inflationary for the automaker, less so

0:15:14.720 --> 0:15:19.920
<v Speaker 5>of a supply crunch. Now, aluminum coming from the Middle East,

0:15:20.240 --> 0:15:23.000
<v Speaker 5>it's about fifteen percent coming into into the US, it's

0:15:23.000 --> 0:15:25.760
<v Speaker 5>about fifteen percent. It's significant. But if you look at

0:15:25.760 --> 0:15:30.000
<v Speaker 5>the auto industry alone, actually mostly aluminum is actually produced

0:15:30.160 --> 0:15:34.640
<v Speaker 5>locally in the US, and about half is coming from

0:15:34.880 --> 0:15:40.840
<v Speaker 5>from Canada. Now even though it's locally produced, it's under

0:15:40.880 --> 0:15:47.000
<v Speaker 5>the USMCA realm. But the prices the global press is rising,

0:15:47.160 --> 0:15:52.000
<v Speaker 5>and that's that's what's causing the inflationary impact on the automakers.

0:15:52.480 --> 0:15:55.960
<v Speaker 2>Steve, can you give us an update on tariffs? Where

0:15:55.960 --> 0:15:57.800
<v Speaker 2>are we with tariffs at the audit industry? Quite frankly,

0:15:57.960 --> 0:15:58.680
<v Speaker 2>I can't keep track.

0:15:59.520 --> 0:16:03.640
<v Speaker 5>Yeah, and the terriffs has a huge impact on aluminum,

0:16:03.920 --> 0:16:08.080
<v Speaker 5>the fact that it's produced in the US and in Canada. Uh,

0:16:08.120 --> 0:16:12.600
<v Speaker 5>there's actually no terraf impact. Remember aluminum, there's a there's

0:16:12.600 --> 0:16:16.760
<v Speaker 5>a tariff of fifty percent on illuminum and steel, but

0:16:16.880 --> 0:16:20.200
<v Speaker 5>because they fall under the US MSA, the United States,

0:16:20.320 --> 0:16:24.440
<v Speaker 5>Mexico and Canada Free Trade Agreement, the exchange of metals

0:16:24.480 --> 0:16:28.160
<v Speaker 5>between the two country is not part of that fifty percent.

0:16:28.720 --> 0:16:33.240
<v Speaker 5>So look again, it's uh, you know, we we estimate

0:16:33.280 --> 0:16:36.560
<v Speaker 5>the per vehicle costs. It's around as much as you know,

0:16:36.600 --> 0:16:41.120
<v Speaker 5>three hundred and eighty five dollars for for evs, less

0:16:41.360 --> 0:16:45.640
<v Speaker 5>for for ice vehicles. So again, I think the automakers

0:16:45.640 --> 0:16:49.400
<v Speaker 5>can actually pass on that cost to the consumer or somehow,

0:16:49.760 --> 0:16:53.720
<v Speaker 5>you know, do some cost initiatives initiatives to absorb those costs.

0:16:53.840 --> 0:16:58.080
<v Speaker 4>Higher costs, Steve, you mentioned that Tesla and electric vehicle

0:16:58.440 --> 0:17:02.760
<v Speaker 4>makers specifically are you know, most at risk from higher

0:17:02.800 --> 0:17:06.359
<v Speaker 4>aluminum costs. Are there any automakers that are more insulated

0:17:06.560 --> 0:17:07.680
<v Speaker 4>from this witch companies?

0:17:09.240 --> 0:17:13.840
<v Speaker 5>Yeah, Tesla, Revia and Lucid any any actually, anybody that

0:17:13.920 --> 0:17:18.080
<v Speaker 5>makes e V uh is gonna face higher costs for

0:17:18.160 --> 0:17:21.800
<v Speaker 5>those e vs. But because you know, Tesla, Ravin, Lucid

0:17:21.800 --> 0:17:24.560
<v Speaker 5>A are peer plays, they're gonna face, you know, bigger

0:17:24.560 --> 0:17:28.080
<v Speaker 5>impact than say the GM and the Ford. Now EV,

0:17:28.359 --> 0:17:32.159
<v Speaker 5>do do you use a lot of aluminum, like I

0:17:32.160 --> 0:17:36.080
<v Speaker 5>said earlier, help cut cut cut down costs. There's a

0:17:36.080 --> 0:17:37.840
<v Speaker 5>lot of aluminum. You'll find a lot of alumin in

0:17:37.880 --> 0:17:40.399
<v Speaker 5>the batteries. You'll find a lot of aluminium in the motor,

0:17:40.480 --> 0:17:44.200
<v Speaker 5>in the motor housing. Uh So the intensity is much

0:17:44.280 --> 0:17:45.600
<v Speaker 5>greater on on EV's.

0:17:46.560 --> 0:17:48.640
<v Speaker 2>So you know why I haven't heard of a lot

0:17:48.680 --> 0:17:51.840
<v Speaker 2>from recently is elon musk. What's the up to these days?

0:17:51.880 --> 0:17:54.159
<v Speaker 2>Cvs getting ready for Space X I p O, what's it?

0:17:54.560 --> 0:17:56.040
<v Speaker 2>What's Tesla?

0:17:56.760 --> 0:18:00.640
<v Speaker 5>Yeah, there's a there's a lot of rumbling uh rumors

0:18:01.680 --> 0:18:05.959
<v Speaker 5>in in for Tesla specifically, obviously he is very busy

0:18:06.160 --> 0:18:10.240
<v Speaker 5>with SpaceX. There's a lot of headlines around SpaceX I

0:18:10.320 --> 0:18:15.040
<v Speaker 5>p O SUH. But within Tesla, it seems like, based

0:18:15.080 --> 0:18:18.840
<v Speaker 5>on social media and other media reports that you know,

0:18:19.160 --> 0:18:23.399
<v Speaker 5>Elon Musk is actually revisiting in launching a smaller vehicle,

0:18:24.280 --> 0:18:28.159
<v Speaker 5>and that would be great, especially for emerging markets. We

0:18:28.280 --> 0:18:31.600
<v Speaker 5>are seeing a lot of sales improvement over in South

0:18:31.680 --> 0:18:36.240
<v Speaker 5>Korea and Japan. They're expanding their their network, retail network,

0:18:36.280 --> 0:18:39.760
<v Speaker 5>they're expanding their service network there. So launching a smaller

0:18:39.880 --> 0:18:43.800
<v Speaker 5>vehicle will will be will be really helpful. The other

0:18:43.840 --> 0:18:47.679
<v Speaker 5>thing that the investors are very focused on is the

0:18:47.760 --> 0:18:50.919
<v Speaker 5>robo taxi. The rollout is a little bit slower than

0:18:50.960 --> 0:18:54.760
<v Speaker 5>we initially thought, but we are hearing their testing. Uh

0:18:54.840 --> 0:18:57.520
<v Speaker 5>you know, they're they're putting cyber caps in multiple cities

0:18:57.560 --> 0:19:00.720
<v Speaker 5>across the US to valid date the vehicle.

0:19:01.920 --> 0:19:06.600
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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