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Speaker 3: Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: Big focus this week for US continuing news out of Washington, DC. Yes,
Speaker 3: that security breach involving the use of the Signal chat
Speaker 3: app and the inadvertent inclusion of a journalist. The full
Speaker 3: coverage of that and the latest can be found on
Speaker 3: the Bloomberg and at Bloomberg dot com. The other big
Speaker 3: focus though out of Washington, Yeah, lots and lots of
Speaker 3: tariff talk and action.
Speaker 4: The President announced a twenty five percent tariff on audio imports,
Speaker 4: expanding a trade war designed to bring more manufacturing jobs
Speaker 4: to the US. Also setting the stage train even broader
Speaker 4: push on levies in the coming weeks and so on.
Speaker 4: Tariff's Trump policy is in an uncertain environment. A few
Speaker 4: members of the C suite way in including Seamen's health
Speaker 4: and heir CFO and the CEO of Sension Jet.
Speaker 3: Also coming up a gut check on the AI spend
Speaker 3: with hpees CEO who was at Nvidia's recent big event
Speaker 3: and caught up with Nvidia's Jensen Wong. And the next hour,
Speaker 3: the journalist who has been searching fifteen years for the
Speaker 3: creator of bitcoin hasn't found him yet, has he?
Speaker 1: God?
Speaker 5: Do you know?
Speaker 2: So you'll have to listen.
Speaker 4: You'll have to read the book or listen to the interview.
Speaker 3: Wait, did I just give it away?
Speaker 4: You get all that to come? We begin with someone
Speaker 4: who's been investing in lots of market cycles. We're talking
Speaker 4: about Barry Ridtholts. He's the host of Bloomberg Masters in Business.
Speaker 4: It's a broadcast and a podcast. Barry's the co founder, chairman,
Speaker 4: and chief investment officer of Ridtholt's Wealth Management. He's got
Speaker 4: a new book out. It's called How Not To in
Speaker 4: the ideas, numbers and behaviors that destroy wealth and how
Speaker 4: to avoid them. Barry joined us earlier in the week
Speaker 4: as we were coming off comments from President Trump at
Speaker 4: the White House.
Speaker 6: There's this sort of narrative fallacy, hindsight bias that we
Speaker 6: all engage in. We don't know what's going to happen tomorrow,
Speaker 6: but after it happens, we have this perfectly rational explanation
Speaker 6: as to why the Wall Street narrative following the election.
Speaker 6: We had an election, it was decisive, It didn't go
Speaker 6: on for days as some people forecast for better or worse.
Speaker 6: There was a clear outcome, and Markets rallied in anticipation of, Hey,
Speaker 6: this is going to be a business friendly administration. We're
Speaker 6: going to get tax cuts, we can get deregulations. Everybody
Speaker 6: party in Markets rallied pretty much up until the chaos
Speaker 6: began with the tariffs. Tariffs are on Monday, they're off Tuesday,
Speaker 6: they're on Wednesday. Was back and forth, Hey we're gonna
Speaker 6: have tarffs with Mexico Canada, all right now the tariffs
Speaker 6: are not with Mexico and care well, maybe we'll have
Speaker 6: tar and then so the narrative was this administration is
Speaker 6: fostering chaos. Nobody can make a CAPEX investment because we
Speaker 6: don't know what the rules are going to be. We
Speaker 6: don't know where we want to locate factories. We were told, hey,
Speaker 6: we could build stuff in North America and it'll be
Speaker 6: tariff free. Forty five negotiated the new NAFTA agreement. Forty
Speaker 6: seven is complaining. It's the same guy. So we ended
Speaker 6: up with this new narrative, all of this chaos is
Speaker 6: bad for business. And then the comments came out from
Speaker 6: President Trump, Well, maybe we could make these more focused
Speaker 6: and more targeted, and maybe it doesn't have to be
Speaker 6: this broad, and so the narrative changes. And when we're
Speaker 6: looking at this, if you're about to retire, you have
Speaker 6: every right to be concerns about all this chaos. But
Speaker 6: if you're not retiring for a decade, well then maybe
Speaker 6: you should look past the next four or maybe it's
Speaker 6: two years, and worry less about the chaos and worry
Speaker 6: more about how your portfolio is going to look six
Speaker 6: years after this president leaves the White House.
Speaker 3: In your book, you have a chapter titled bad Behavior,
Speaker 3: and there's a section why politics and investing don't mix.
Speaker 3: And so is that mix even a greater risk in
Speaker 3: the Trump administration? Or no? Is it just kind of
Speaker 3: politics as usual? And we'll have to wait to see
Speaker 3: how everything settles down.
Speaker 6: So here's a sentence I never thought I would say,
Speaker 6: but I'm going to say it. Trump's genius is his
Speaker 6: ability to capture the attention of the viewing public. Biden
Speaker 6: didn't have, you know, a white house full of media
Speaker 6: over every signing, over every executive order, over every random thing.
Speaker 6: You didn't see that with Obama. You didn't see that
Speaker 6: with George W.
Speaker 7: Bush.
Speaker 6: You didn't see that with Clinton. He is a master communicator,
Speaker 6: and because of it, the noise level ramps up. When
Speaker 6: we look at the odds of odds of a recession,
Speaker 6: odds of a volatility, of a market crash, of a
Speaker 6: dollar collapse, of a geopolitical event, they were low before
Speaker 6: January twentieth. They're still relatively low, but all of them
Speaker 6: have moved higher. I'm not saying we're getting a recession,
Speaker 6: we're getting a crash. I'm not saying any of that.
Speaker 6: They're still relatively I want to say the Wall Street
Speaker 6: consensus was up from ten to fifteen percent chance recession
Speaker 6: to thirty thirty five percent.
Speaker 3: Now that means that the changed.
Speaker 6: It's a change, and it's not in the direction we like.
Speaker 6: But it's not. Hey, there's a sixty eight percent chance
Speaker 6: of recession. It's still relatively low. The problem isn't just
Speaker 6: that it's elevated. The problem is that the chaos is
Speaker 6: starting to increase the probabilities. Look, no one knows the future,
Speaker 6: but business people make investments when they have at least
Speaker 6: a modicum of clarity. Hey, we know what the rules
Speaker 6: are going to be, we know what the tax code
Speaker 6: is going to look like. We know here's where we're
Speaker 6: going to spend our CAPEX dollars to generate a return.
Speaker 6: And when all bets are off, everybody kind of freezes
Speaker 6: and says, I can't deploy millions or tens or hundreds
Speaker 6: of millions unless I know is this going to be
Speaker 6: tariff this, this is going to be taxed? What are
Speaker 6: the rules going to be about this? And that increases
Speaker 6: the chance of an economic slowdown.
Speaker 4: Hey, Barry on the book. It's your first book in
Speaker 4: what fifteen years?
Speaker 6: Yeah, I'm like clockwork, So crank them out. So twenty
Speaker 6: forty the next the sequel with it.
Speaker 4: Does coincide with the rise of your firm, for sure, absolutely,
Speaker 4: And I'm wondering if this is the culmination of what
Speaker 4: you learned speaking to clients about mistakes that they've made
Speaker 4: that their advisors in the past had made before they
Speaker 4: came over to you. What is it a culmination of.
Speaker 6: So I've been writing in public for home almost thirty years,
Speaker 6: and a lot of times, you know, as I've become
Speaker 6: better known to Wall Street into the investing audience, when
Speaker 6: you put something out there. I remember putting out the
Speaker 6: Pimco bonus. It was the top of the terminal for
Speaker 6: six months. I got a million letters emails about that.
Speaker 6: I've done other pieces more recently where there's been in
Speaker 6: the beginning of the pandemic. It came out April first.
Speaker 6: People thought it was an April fool's joke. Don't assume
Speaker 6: the pandemic ended the secular bull market. So it's nice
Speaker 6: putting stuff out and generating a response. Early in my
Speaker 6: career I would write stuff and you would get crickets.
Speaker 6: There's a chapter in the book on a very famous
Speaker 6: cover of Fortune magazine May two thousand, why Cisco is
Speaker 6: the one stock you have to own. And I wrote
Speaker 6: something up about it and didn't hear like, not even
Speaker 6: an angry email. It was just, you know Howard Marx
Speaker 6: used to talk about in the early days of his notes,
Speaker 6: they would print them out, fold them, stick them and
Speaker 6: envelopes and mail them out. And I said, what was
Speaker 6: the response crickets. It wasn't until his infamous Amazon dot
Speaker 6: bom in late ninety nine that he finally got some
Speaker 6: sort of response, And I very much appreciate his journey.
Speaker 6: So a lot of this is kind of thinking about
Speaker 6: you know, I have a huge advantage of having hold
Speaker 6: a lot of people out, or a lot of media
Speaker 6: and Wall Street analysts and fund managers statements, or at
Speaker 6: least noted them, maybe not call them out, but noted them.
Speaker 6: And now I have the advantage of being able to
Speaker 6: look back and seeing who was right and who was wrong.
Speaker 6: PS the Cisco column twenty percent off, it's all time
Speaker 6: high at the time in May two thousand. The stock
Speaker 6: proceeds to fall over ninety percent. It is today a
Speaker 6: quarter century later, still below where that magazine cover was.
Speaker 6: So it's fun kind of going back and looking at
Speaker 6: a lot of these things. A lot of the ideas
Speaker 6: in there. Some came from clients, some came from medias,
Speaker 6: and some came from prospective clients. Hey, I'd like to
Speaker 6: give you money, but you have to answer explain this
Speaker 6: to me. So you know, there's a discussion in there.
Speaker 6: How come during the pandemic the market was detached from reality.
Speaker 6: I drove through my neighborhood and this dry cleaner was closed,
Speaker 6: and this restaurant was closed, and all these shops were
Speaker 6: doing poorly. And the answer was those companies a aren't
Speaker 6: publicly traded, and even the companies that were publicly traded airlines, hotels,
Speaker 6: all sorts of services like that, they're relatively tiny compared
Speaker 6: to big, global multinational companies that aren't dependent on a
Speaker 6: chain of restaurants. Can't compare to Microsoft or Apple or Amazon.
Speaker 6: They're global and they're giant.
Speaker 3: I am curious in terms of the converse you've had
Speaker 3: over the years and the ones that are featured on
Speaker 3: Masters of Business. Are there certain people that I don't
Speaker 3: know changed maybe the way you think about investing that
Speaker 3: really just struck with you. I'm not going to ask
Speaker 3: you for your favorite guests, because I think that's not fair.
Speaker 3: I think it's obvious when you talk to people that
Speaker 3: you really just like talking to these individuals and getting their.
Speaker 6: They're fascinating, They're absolutely fast, and.
Speaker 3: You really get into their stories like what makes them
Speaker 3: tick or you know where they grow up and how
Speaker 3: their you know, professional life came to be. But is
Speaker 3: there somebody that kind of really stands out for you.
Speaker 6: There's a few people that stand out. But I'm going
Speaker 6: to answer a slightly different question than the one you ask.
Speaker 8: That's because he likes ask question.
Speaker 6: So there are a number of guests I really have
Speaker 6: grown to appreciate in the door, and there are groups
Speaker 6: of people they're just charming and lovely and generous and
Speaker 6: what have you. But you know, the first couple of
Speaker 6: times you hear a billionaire tell you, hey, you know,
Speaker 6: luck really plays a big role in this and you
Speaker 6: need to have humility, It's like, yeah, yeah, sure, thanks.
Speaker 6: The second time, the third time when the tenth Nobel
Speaker 6: Laureate CEO billionaire says, hey, you know, someone says this
Speaker 6: is all about smarts and hard work. Howard Marx once said,
Speaker 6: I went to I think it was Columbia Business School.
Speaker 6: Everybody that was smart and hard working, right, Not everybody
Speaker 6: there became billionaires. To paraphrase, he goes, sometimes you know,
Speaker 6: you just got to be the right place at the
Speaker 6: right time. You get a little lucky. I'm genuinely shocked
Speaker 6: how many of these people are just absolutely shockingly humble
Speaker 6: given their success and willing to talk about Listen, when
Speaker 6: you tell people the world, the universe is random, and
Speaker 6: sometimes stuff happens. And didn't see that company, no, and
Speaker 6: saw the pandemic come certainly wasn't in any Wall Street
Speaker 6: forecasts twenty twenty global economy shuts down by the way,
Speaker 6: the stock market's going to scream higher, or the Ukraine invasion,
Speaker 6: or stocks and bonds down double digits, nobody in one year.
Speaker 6: So within the book there's a little bit of a theme.
Speaker 6: Humility is sorely missing on Wall Street, and sometimes you
Speaker 6: just have to be aware of how random so much
Speaker 6: of life is. With that kind of weeze lance, I
Speaker 6: will tell you spending time with Danny Kahneman was a delight.
Speaker 6: I'm a giant fan of Michael Mobison. I mentioned Howard
Speaker 6: Marks is there, Like if you get to spend time
Speaker 6: with a Dick Thaylor, Oh my god, he's just charming
Speaker 6: and delightful and witty, and you know any all these
Speaker 6: people have. People are genuinely surprised when I say, you know,
Speaker 6: the pen is mightier than the sword. The Paul Krugman,
Speaker 6: how you know he's he writes brutal pieces. In real
Speaker 6: life he's a pussy cat. Like if you met him
Speaker 6: and didn't know that he was Nobel laureate in Times
Speaker 6: Acid Pens columnists, you would think, oh, that was a
Speaker 6: really lovely guy.
Speaker 7: Who is he?
Speaker 6: And that's my favorite part of hosting the podcast is
Speaker 6: just kind of getting to learn who these people are
Speaker 6: behind the public images.
Speaker 4: So what's the mistake that you'd say most people make
Speaker 4: when it comes to investing?
Speaker 3: How they should not invest?
Speaker 6: So the biggest mistake we all make is we just
Speaker 6: interfere with the genius of the market. We interfere with
Speaker 6: the market's ability to compound wealth over time. Like if
Speaker 6: you just allow the market to do its thing and
Speaker 6: just stay out of its way, your way ahead of
Speaker 6: you know, we know the handful of outliers who have
Speaker 6: managed to generate above market returns consistently over time. Warren
Speaker 6: Buffett comes to me right their household names, Peter Lynch,
Speaker 6: Jim Simon's of Renaissance Technologies. Like there's a few dozen
Speaker 6: of them. Jim Chanosa of Kinnicos Associates said, noted sortseller right,
Speaker 6: when he launched his hedge funds in the eighties, there
Speaker 6: were one hundred hedge funds. They all generated alpha. Now
Speaker 6: there's eleven thousand hedge funds the same hundred more or
Speaker 6: less of the ones generating alpha, and so you know
Speaker 6: that's kind of instructive. It is extremely hard to consistently
Speaker 6: beat the market neta fees over time, and the people
Speaker 6: who do are rewarded with great success, fame, riches, and
Speaker 6: a handful of them we know because they're so few
Speaker 6: and far between.
Speaker 3: Really quickly thirty forty seconds. Because there's tons of investment
Speaker 3: books out there, How do you want someone to use
Speaker 3: this book? How should they use this book?
Speaker 6: So the question I ask every guest at the end
Speaker 6: of the podcast is what do you know today? You
Speaker 6: wish you knew thirty years ago or forty or fifty
Speaker 6: when you're first starting out. And someone turned that around
Speaker 6: on me, and this book is what I would have
Speaker 6: loved to have when I started, because every mistake in
Speaker 6: that book I have made and made repeatedly, and had
Speaker 6: I had that, maybe would have done.
Speaker 4: You invested a billion dollars into gold. I didn't do that.
Speaker 6: I didn't make that mistake, but I did pass on
Speaker 6: the seed round of robin Hood and my friend who
Speaker 6: did put money into it made one hundred million dollars.
Speaker 6: So I'm a Jeanie.
Speaker 4: Very, if you made a hundred million dollars, you would
Speaker 4: still be sitting here with us.
Speaker 6: Probably. You know, I love the puzzle of the market,
Speaker 6: so I'm fascinated book.
Speaker 3: You really do. Fun to get some time with you.
Speaker 3: Congratulations on the book. My pleasure very rich almuch co founder, chairman,
Speaker 3: chief investment officer Ridholt's Wealth Management his new book, How
Speaker 3: Not to Invest The ideas, numbers and behaviors that destroy
Speaker 3: wealth and How to avoid them. Also host of Masters
Speaker 3: in Business on Bloomberg Radio and Bloomberg Podcast. You can
Speaker 3: download it at Bloomberg dot com or wherever you get
Speaker 3: your podcast.
Speaker 2: Partly you're listening to the Bloomberg Business Weekdaily podcast. Catch
Speaker 2: us live weekday afternoons from two to five pm Eastern.
Speaker 2: Listen on Applecarplay and the Android Auto with the Bloomberg
Speaker 2: Business app, or just live on YouTube.
Speaker 3: There was one story that caught our attention because it
Speaker 3: just seemed to tie in so well with our next guest,
Speaker 3: Astra Zeneca will invest two and a half billion dollars
Speaker 3: in a new research center in Beijing in a major
Speaker 3: show of commitment to China, just months after that company's
Speaker 3: top executive there was detained by authorities. We know it
Speaker 3: is so complicated doing business globally today. Our next guest
Speaker 3: has separate supply chains for China and Asia and their
Speaker 3: Western clients, which safe to say comes in pretty handy
Speaker 3: right now. Here to talk about that and more is
Speaker 3: Siemens Healthenier's chief financial officer, Johan Schmidts. Johan joins us
Speaker 3: from Munich, Germany, along with our own Nina Trentman. She's
Speaker 3: here in our studio. She's senior editor at Bloomberg News,
Speaker 3: author of the CFO Briefing newsletter, which you can sign
Speaker 3: up for at Bloomberg dot com slash CFO Briefing. Jahan.
Speaker 3: Great to have you here with us. There's a lot
Speaker 3: to talk about. I do want to start with supply
Speaker 3: chains because I feel like that and tariffs and globalization
Speaker 3: is so much front and center right now. Talk to
Speaker 3: us about how you manage it, build it, think about it,
Speaker 3: and how what you have today came together.
Speaker 9: Yeah, thank you very much first for having me.
Speaker 10: When I think about our global value add footprint we
Speaker 10: have as as you're right for you said in the beginning,
Speaker 10: we have so to say, a two side so to
Speaker 10: say two side strategy. We manufacture and develop everything for
Speaker 10: China and for the China block out of China, and
Speaker 10: we manufacture and and develop everything else in the also
Speaker 10: in the in the Western world. That means we have
Speaker 10: relatively detached two value chains in place.
Speaker 9: Now, this is.
Speaker 10: A Karlie I would say for the current situation, a
Speaker 10: kind of a comfortable setup because we are not affected,
Speaker 10: so to say, too much by the geopolitical or terriff
Speaker 10: discussion between so far between United States and China. And
Speaker 10: when we look at our global footprint in the Western world,
Speaker 10: twenty five percent of our employees are in the United States.
Speaker 10: We have four segments. Two of the segments are headquartered
Speaker 10: or the United States, or seventeen thousand total employees seventeen thousand,
Speaker 10: As I said, twenty five percent are in the United States.
Speaker 9: So we are well spread across the world.
Speaker 10: And this gives us a decent resilience. Yeah, but it
Speaker 10: does not make us immune against global trade wars.
Speaker 9: And I would to say this.
Speaker 11: Yeah, to follow up on that, Johan, thanks for joining
Speaker 11: us talk to us about the Trump terraffs. Of course,
Speaker 11: a lot of moving parts, but how do you think
Speaker 11: about those and could there be an impact on your business,
Speaker 11: given that you have a strong US footprint.
Speaker 10: First of all, let me look at what is currently
Speaker 10: in place the Mexico, Kada, and China additional terrorists. As
Speaker 10: I said, China is not a major topic for US
Speaker 10: because the latest since Trump one or zero, we to
Speaker 10: change our supply chains so that they are detached from
Speaker 10: each other. We have i would say, some impact from
Speaker 10: some sub supply from Mexico into the United States for
Speaker 10: one of our two headquartered business in the United States
Speaker 10: or Wearian business at the West Coast. This is I
Speaker 10: would say, the major impact. But it's not a huge topic.
Speaker 9: It's a so far.
Speaker 10: Small topic Canada, US so far not a big topic
Speaker 10: for US.
Speaker 11: And to follow up on that, have you had any
Speaker 11: sort of conversations with the administration to see if you
Speaker 11: could be exempt from any tariffs? I know that sort
Speaker 11: of Beijing, for example, in its retaliatory tariffs on US
Speaker 11: goods has excluded healthcare.
Speaker 9: Yeah, and obviously we are.
Speaker 10: Trying to get healthcare and together with other companies in
Speaker 10: the the escare sector out.
Speaker 9: Of UH exempt from from terraffs.
Speaker 10: I think that makes a lot of things sense because
Speaker 10: when you think about terriffs, what do they do. They
Speaker 10: will limit the flow of products and services across across
Speaker 10: the world on the one hand, but they're also will
Speaker 10: will limit the flow of knowledge and then it is
Speaker 10: to the detriment of patience.
Speaker 12: Yeah.
Speaker 10: Therefore, when you look at comparable situations like sanctions or others,
Speaker 10: normally healthcare gets excluded over time. And I'm I'm hopeful
Speaker 10: that this will also get into into play in terraffs,
Speaker 10: hopefully sooner than later.
Speaker 4: And Jagam, how do you think about this administration, this
Speaker 4: president versus other world leaders that you've dealt with. How
Speaker 4: how is he different to deal with? How is this
Speaker 4: administration different to deal with?
Speaker 9: Yeah?
Speaker 10: I mean normally, to be honest, when we we in
Speaker 10: the particular in the United States, we do not have
Speaker 10: a lot of business with government. Yeah, because the prior
Speaker 10: to the healthcare system in the United States is primarily
Speaker 10: a private a private system. Therefore, where we look at
Speaker 10: changes in the administration in the United States, the impact
Speaker 10: in general on our business on the healthcare markets are
Speaker 10: for us relatively limited.
Speaker 9: Yeah. And our current.
Speaker 10: Assumption as we see it is also with regard to
Speaker 10: the WES market, we don't see significant disruption at the
Speaker 10: horizon in this regard, and obviously when we look at
Speaker 10: the the Trump administration, it's it's from its It's not
Speaker 10: a surprise what is happening. It was cleared it was
Speaker 10: also mentioned in the campaign that things like this might happen.
Speaker 10: From a strategic standpoint, we need to stay flexible, agile
Speaker 10: because we cannot plan for everything. We will there will
Speaker 10: be surprises, and to try to deal with this as
Speaker 10: as rapidly as possible.
Speaker 3: I am curious.
Speaker 7: You know.
Speaker 3: There was a story actually from daw Jones that talked
Speaker 3: about how you guys are setting up to cancer research
Speaker 3: centers in Alberta, Canada, focusing on oncology training and artificial
Speaker 3: intelligence and machine learning. And I guess what I want
Speaker 3: to ask you is do you see because it does
Speaker 3: feel like for so long or the last couple of months,
Speaker 3: we talked about American exceptionalism, that doing so well, growth
Speaker 3: and still investment coming in. But I do wonder do
Speaker 3: you think that the US, as a result of this
Speaker 3: administration and the policies that are coming out, is potentially
Speaker 3: putting an end to that exceptionalism and maybe cutting the
Speaker 3: US off from collaborations, whether it might be with your company,
Speaker 3: or with healthcare and in general, or research, whether it's AI,
Speaker 3: whether it's in healthcare, and so on.
Speaker 10: My personal opinion is it's a clear answer is no,
Speaker 10: this is really happened. From my standpoint, we also do
Speaker 10: not see this currently. First of all, we are a
Speaker 10: huge company in the United States. As I said, we
Speaker 10: have two of our segments in the United States States.
Speaker 10: We have more than seventeen thousand employees in the United States.
Speaker 10: We run here of other United States I would say,
Speaker 10: the by far most successful global vardiation therapy company in
Speaker 10: the world variant, and we have a very very strong
Speaker 10: lab diagnostic business out of Tarrytown, New York. So I
Speaker 10: think we are very Usish also like we are very European,
Speaker 10: like we are very Chinese. We are really a global
Speaker 10: company with a very well spread global footprint. And I
Speaker 10: can't imagine that the United States will harm their people
Speaker 10: to that extent that they will cut off research in
Speaker 10: healthcare and really do crazy things in this regard, because
Speaker 10: as I said in the beginning, this will all ultimately
Speaker 10: would go to the detriment of passions, and that will
Speaker 10: suggest I can't.
Speaker 3: So, just to clarify this idea of American exceptionalism being
Speaker 3: done being gone dead if you will you don't agree
Speaker 3: with that, Yeah, I don't agree.
Speaker 9: Will to follow up.
Speaker 11: You're based in Germany. A fair amount of what your
Speaker 11: value creation is there, but only only I think forty
Speaker 11: five percent of your revenue comes from there. Talk to
Speaker 11: us a little bit about the changing government that we're
Speaker 11: expecting and in how far you're seeing that potentially improving
Speaker 11: competitiveness in Germany, a topic that you and I have
Speaker 11: talked about in the past.
Speaker 10: Yeah, as you're right, we said the German market persis
Speaker 10: is for us. It is not unimportant, but it's not
Speaker 10: super super critically.
Speaker 9: Four to five percent of revenue.
Speaker 10: When we look at Germany as a country, I think
Speaker 10: we need to have a change in how we administer
Speaker 10: this this country.
Speaker 9: I think the first steps we have seen here are
Speaker 9: prom thing.
Speaker 10: There were at least decision making, pragmatic decision making the
Speaker 10: supposed to be new government establish itself. I call it
Speaker 10: a very nice credit line of one thousand billion euros.
Speaker 10: But this is I would say, very comfortable to have.
Speaker 10: On the one hand, On the other hand, it does
Speaker 10: not release this government from making tough decisions on leaning
Speaker 10: on leaning up the bureaucracy in the country and reformatting,
Speaker 10: so to say that the social systems, because otherwise also this.
Speaker 9: Nice investment program will not find its weight or will
Speaker 9: not pave the way to sustainable growth.
Speaker 11: So that means you'll hold off for now with new
Speaker 11: investment decisions for Germany or sort of what's your take
Speaker 11: on that.
Speaker 9: No, that's not the case.
Speaker 10: I meanly for us, we have a significant value act
Speaker 10: in Germany. We see the circumstances for us in Germany
Speaker 10: as as a value at the location still very positive.
Speaker 9: We have maybe also because of the industry we get
Speaker 9: very good people.
Speaker 10: The education system is still attractive to what we for
Speaker 10: what we need, and I think we are ongoing, we.
Speaker 9: Will continue to invest. We have invested in the last.
Speaker 13: Three to four years, about three to five years, about
Speaker 13: six fifty million euros a billion euros in Germany and
Speaker 13: this is a significant investment a million euros.
Speaker 3: I wonder what's the biggest kind of interesting trend disruption
Speaker 3: that's going on in your industry right now? And I
Speaker 3: do have to ask you to be very quick.
Speaker 10: I think our industry is not an industry which is
Speaker 10: driven by disruption, because it's about the I would say
Speaker 10: the health of patients. Obviously, AI will play instantly more
Speaker 10: important role, and those who do not build their case
Speaker 10: on AI will not.
Speaker 3: Well super interesting and so appreciate your time to coverage
Speaker 3: so much ground Johann Schmidt's CFO of Seamen's Healtheneers, and
Speaker 3: of course Aarnina Trentman, Senior editor at Bloomberg News. Be
Speaker 3: sure to check out the CFO Briefing newsletter. A new
Speaker 3: one comes out on Sunday.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 3: Thirty this past week a batch of headlines from the
Speaker 3: world of artificial intelligence, including a warning from Ali Baba
Speaker 3: chairman Joe Si of a potential bubble in data center construction.
Speaker 3: TD Cowen noted that Microsoft abandoned plans for new data
Speaker 3: center projects in the United States and Europe due to
Speaker 3: an oversupply of the clusters of computers at Power AI.
Speaker 3: And you might recall that it was these same analysts,
Speaker 3: who rattled investors with a February note highlighting Lease's Microsoft
Speaker 3: had abandoned in the US. Also, the Nvidia backed cloud
Speaker 3: computing provider core Weave intends to cut the size of
Speaker 3: its IPO to around one and a half billion dollars.
Speaker 3: According to a person with knowledge of the matter, that
Speaker 3: in a sign of how the recent stock market volatility
Speaker 3: is hurting demand for even highly anticipated listings.
Speaker 4: In the meantime, open ai expects to more than triple
Speaker 4: its revenue this year to twelve point seven billion dollars,
Speaker 4: fueled by the strength of its paid AI software. That's
Speaker 4: according to a person familiar with the matter. One individual
Speaker 4: who is upbeat on AI is the CEO of HPE,
Speaker 4: and he was at this month's Nvidia GtC where he
Speaker 4: caught up with Nvidia CEO Jensen Wong. Antonio Nary joined
Speaker 4: us just after the event was about a week and
Speaker 4: a half ago.
Speaker 5: It was a fantastic event. Obviously, you can look at
Speaker 5: from many different perspective. Number one, the innovation front. I
Speaker 5: have to tell you I never see seeing such an
Speaker 5: innovation at the speed that we are all experiencing. You know,
Speaker 5: two years ago we were talking about the boom of
Speaker 5: generative AI.
Speaker 7: Now we're talking.
Speaker 5: About physical AI, robotics and what can do for manufacturing
Speaker 5: in other industries. On the other hand, obviously you talk
Speaker 5: about what this can do for the enterprise and the
Speaker 5: enterprise what I see, particularly in the last ninety days
Speaker 5: or one hundred and eighty days is an accelerational deployment because.
Speaker 7: They all realize that AI has.
Speaker 5: A tremendous potential to improve productivity, to improve business processes
Speaker 5: and deliver value to each of the businesses.
Speaker 7: And last panel list obviously what they.
Speaker 5: Can do for society and if you think about the
Speaker 5: opportunity to address some of the societal challenges, whether it's
Speaker 5: finding new cures through you know, molecular docking research or
Speaker 5: weather forecasting and many other type of use cases.
Speaker 7: Is all there.
Speaker 5: Now we have to see it, we have to build it,
Speaker 5: and we need to see it through the benefit of
Speaker 5: it over a period of time that people need to
Speaker 5: live with.
Speaker 4: Well, we also heard Antonio this promise of physical AI.
Speaker 4: That was one of the big themes that emerged. But
Speaker 4: from your perch at HPE, what's the future that you see,
Speaker 4: what's the future that you envision with physical AI?
Speaker 5: Well, I see a world where basically we can remove
Speaker 5: the humans that they are in the loop and be
Speaker 5: on the loop, where some of these physical AI, robotics
Speaker 5: and other type of applications can do.
Speaker 7: The basic task that we are totally.
Speaker 5: Automated, where we can use ourselves the humans for other
Speaker 5: more interesting and value added tasks, and that will drive
Speaker 5: a level of productivity we haven't seen before. And that
Speaker 5: applies to every industry. You talked about autonomous cars, obviously
Speaker 5: that includes a lot of artificial intelligence, machine learning, and
Speaker 5: other techniques, but when I think about the other industries,
Speaker 5: the potential is enormous. Now, not everything will be applicable,
Speaker 5: but I think, you know, we see a world where
Speaker 5: AI will be embedded in everything we do.
Speaker 3: One of the things I wanted to follow up on,
Speaker 3: you know and you guys made is actually an announcement
Speaker 3: kind of off of this event about you and video
Speaker 3: coming up with some new enterprise AI solutions working on
Speaker 3: this together, Antonio, what I wanted to follow up on,
Speaker 3: though you said we have to build it, we have
Speaker 3: to see it and to see what the payoff really is.
Speaker 3: That's what like the last couple of years right have
Speaker 3: been about this build out, this spend, and we continue
Speaker 3: to see partnerships to continue the spend. But how long
Speaker 3: do you think it will be until companies really have
Speaker 3: an idea of what payoff they get for their investment.
Speaker 7: Well, look, Carol, I mean I see it really today.
Speaker 5: In our own company, we deploy AI in many of
Speaker 5: our business processes across finance, digital marketing, customer service, forecast
Speaker 5: planning and the like, and even on the are in
Speaker 5: the side. Our level of productivity in our software development
Speaker 5: process has improved by thirty percent. So the learning hit
Speaker 5: is that first of all, it takes time to build infrastructure,
Speaker 5: but for enterprise is not a big of a lift
Speaker 5: from an infrastructure perspective. I can tell you in my
Speaker 5: own company, I have only a couple of hundred GPUs
Speaker 5: and it's plenty for what I need to do compared
Speaker 5: to the service providers, the model builders that many tens
Speaker 5: of thousands, of hundreds of thousands for the matter to
Speaker 5: build these large language models which are very sophisticated from
Speaker 5: what I call generality to agentic to reasoning, and eventually
Speaker 5: these models that will do the robotic.
Speaker 7: Side the physical AI.
Speaker 5: But inside the enterprise we only see the benefits and
Speaker 5: I spend more than fifty percent of my time talking
Speaker 5: to customers and they are going from the experimentation phase
Speaker 5: to more deployment side, and that's why the last quarter
Speaker 5: we saw a forty percent increase on a year over
Speaker 5: year basis demand for enterprise AI solutions. And obviously for
Speaker 5: US was the deep partnership with Nvidia where we took
Speaker 5: their software stack, the famous Kuda environment with the names
Speaker 5: and agentic approaches including only partners with our infrastructure and
Speaker 5: our own software in the cloud.
Speaker 7: And there is all about time to value.
Speaker 5: Basically, we made the so simple three clicks, less than
Speaker 5: thirty cycles. You can deploy an environment for your developers
Speaker 5: to rag or find you in a model with your data,
Speaker 5: or to deploy inferencing. And that's where the acceleration is
Speaker 5: going to come. The simplicity of deployment with the use
Speaker 5: cases that can return that investment very very quickly.
Speaker 3: It's all just kind of really really cool stuff and
Speaker 3: something we think about so much. It's happening now, but
Speaker 3: really kind of what the future means and the impact.
Speaker 3: I do want to ask you though about today's environment.
Speaker 3: There's so much coming at CEOs, the C suite of
Speaker 3: companies a lot of stuff out of Washington, and we
Speaker 3: continue to watch this spending when it comes to us
Speaker 3: it given some of the recession fears that are out there,
Speaker 3: What has your conversations with CEOs revealed on the spending environment,
Speaker 3: any signs of pullback, any signs that a recession might
Speaker 3: be coming? What color can you give us about that?
Speaker 7: Well?
Speaker 5: Up to our Q one which ended in January thirty first,
Speaker 5: the demand has been very strong.
Speaker 7: In fact, if you look.
Speaker 5: At our own demand for a moment for our networking business,
Speaker 5: our hybrid cloud business and our AI business, which are
Speaker 5: the three paillars of our company.
Speaker 7: We saw double digits or the growth.
Speaker 5: Demand for every solution that we have in the available
Speaker 5: today in the market. Now that said, you know the
Speaker 5: conversation today in the market about tariffs, some of the
Speaker 5: geopolitical tention, the work that the United States do and
Speaker 5: to control spend obviously is causing a little bit of uncertainty.
Speaker 7: But I do believe it is.
Speaker 5: One of those areas where spent will be protected because ultimately,
Speaker 5: whether you think about position yourself for the next wave,
Speaker 5: or the supply chain through digitization and automation, as you
Speaker 5: rebalance the supply chain, what it makes sense for you,
Speaker 5: or what do you think about using your data to
Speaker 5: your advantage, as a good example, using AI, or whether
Speaker 5: it's to simplify your processes. It will require it, and
Speaker 5: that's why I continue to be positive about the spend
Speaker 5: of it as we think about the next few years,
Speaker 5: because it will grow in my mind faster than GDP.
Speaker 3: All Right, we're going to have to leave it there, Antonio,
Speaker 3: thank you so much for giving us some time. We
Speaker 3: greatly appreciate it. Thanks to Antonio Neari, he's president's CEO
Speaker 3: of HPE. Of course, as you know, stock right now
Speaker 3: in today's session just down about one point three percent,
Speaker 3: has had a lot of pressure on it though this
Speaker 3: year down about twenty five percent here in twenty twenty five.
Speaker 3: A company did report earnings back in March March seventh,
Speaker 3: earlier this month, and there were some concerns about the
Speaker 3: weak profit outlook. But you can certainly read a little
Speaker 3: bit more if you want. Alomberg dot com and of
Speaker 3: course on the Bloomberg terminal.
Speaker 2: You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: So a lot of enthusiasm about AI from Antonio Neery,
Speaker 3: our next guest, really upbeat about his world as well,
Speaker 3: and that world is flying private.
Speaker 4: You might remember that recent Bloomberg story it noted how
Speaker 4: Air France is unveiling a redesigned first class cabin. It's
Speaker 4: dubbed La Premiere, and it's seeking to attract well heeled
Speaker 4: customers with a travel experience that it says is akin
Speaker 4: to stepping onto a private jet.
Speaker 3: Well, someone with a lot of insight into the private
Speaker 3: aviation space is Andrew Collins. He is president and CEO
Speaker 3: of Sunshine Jet and he made a stop at our studios.
Speaker 14: Private aviation, as you remember, had the boon in COVID
Speaker 14: and it really hasn't slowed down. And so for Sension,
Speaker 14: we're seeing about fifth teen percent year over year growth
Speaker 14: right now, and the forward bookings are actually encouraging. So
Speaker 14: you know, I know there's kind of a lot of
Speaker 14: pausing in the markets right now and people scratching their
Speaker 14: head a little bit, but from a travel perspective, I'm
Speaker 14: really not seeing a lot of leakage.
Speaker 4: Why did you have to Why do you have to
Speaker 4: travel so much?
Speaker 14: So we have offices all over the world. So we
Speaker 14: have headquarters in Cleveland, Ohio, in Boston here in the city,
Speaker 14: and then we have offices in Mayfair. We have a
Speaker 14: large operating center out in Farmborough in the UK, maintenance
Speaker 14: in Milan, So we're all over the world.
Speaker 4: But when you're traveling, I mean, you're not selling the product.
Speaker 14: So I'm always selling the product.
Speaker 4: What does that mean though, I mean it's the jet card.
Speaker 4: You guys are known for the jet card, yeah, which
Speaker 4: is a unique offering in a space right now, you
Speaker 4: know you're the same parent company as Flexjet, which also
Speaker 4: offers a different type of product. Absolutely, yeah, but how
Speaker 4: do you like explain how the business model sort of
Speaker 4: compliments that?
Speaker 14: Yeah, so there's two differences, right. Flexjet is probably the
Speaker 14: from your private aviation company and the globe, and it's
Speaker 14: got a fleet of three hundred aircraft and some of
Speaker 14: the newest aircraft. Sentient has just surpassed its twenty fifth
Speaker 14: anniversary invented the jet card and it's an asset light model,
Speaker 14: so it leverages pre screened operators around the globe for
Speaker 14: usage of their aircraft so we have technology that harnesses
Speaker 14: and schedules aircraft all over the world and it allows
Speaker 14: for a different type of way to fly an entry point.
Speaker 4: Are you ever paying Flexjet to operate for your customers?
Speaker 14: There are some non core fleet aircraft that occasionally we
Speaker 14: do leverage, but most of the time we're using more
Speaker 14: of a Part one thirty five operator in the United
Speaker 14: States or in Europe.
Speaker 4: So this would be like a small fleet based somewhere.
Speaker 15: It could be yeah, exactly that has passed your certification
Speaker 15: correct and you're essentially paying them to then take your
Speaker 15: customers correct.
Speaker 14: We handle and so it's interesting when you mentioned commercial
Speaker 14: private aviations all about that consumer promise and that service level.
Speaker 14: So it's kind of like curb detail and so yes,
Speaker 14: you might be able to replicate in cabin experiences, but
Speaker 14: outside the cabin, getting through like a commercial hub or
Speaker 14: something like that is very different than you know, pulling
Speaker 14: right up to a tail and getting on a private aircraft.
Speaker 14: You really can't emulate that experience, and so it is
Speaker 14: you know, interesting in that regard, But yeah, we're selling
Speaker 14: sort of time manipulation. At the end of the day, right,
Speaker 14: a jet card allows you to everybody runs off the
Speaker 14: same watch, but it allows you privately to manipulate the time.
Speaker 3: What's the most difficult part of your business right now?
Speaker 14: I think the most difficult part of our business is
Speaker 14: we set a really high bar for our consumer standard.
Speaker 14: So it's the service level. It's the you know, getting
Speaker 14: everything right, having all the levers in the row right,
Speaker 14: and making sure you need technology, you need the people,
Speaker 14: and truth be told, you really need the experience. We
Speaker 14: have a deep bench of experience, some people that have
Speaker 14: been here since the beginning with the model. So I
Speaker 14: think that the consumer, especially because it's gotten more pop popular,
Speaker 14: has also a very high expectation, especially because of the
Speaker 14: price point. So you've got to deliver, and if we
Speaker 14: don't actually own that asset, we've got to make sure
Speaker 14: that we're delivering on that service level and tying that
Speaker 14: asset to the consumer.
Speaker 4: Promise safety in this environment, because over the last few
Speaker 4: months there have been a spate of these high profile
Speaker 4: air travel incidents in North America. How do you look
Speaker 4: at incidents like that and how do you make sure
Speaker 4: that the product you provide is safe?
Speaker 14: So I know our product is safe. We invest millions
Speaker 14: of dollars in safety. We have a chief safety Officer,
Speaker 14: Independent Safety Advisory Board. We have an SMS that's a
Speaker 14: safety management system for those that don't know what that is.
Speaker 14: That's very advanced with the FAA, and so at the
Speaker 14: end of the day a lot of times and the
Speaker 14: report is just kind of being worked through in that
Speaker 14: particular regard in that incident. Yeah, the NTSP, it's all
Speaker 14: about like a lot of factors, right, So there's the
Speaker 14: factors we can control, and then there's the factors around you.
Speaker 14: So in that case, you're going to find that it's
Speaker 14: likely that there's some airport things that are happening. There's
Speaker 14: some some glaring and some things like that. It's not
Speaker 14: as obvious as one thinks, but I will tell you
Speaker 14: that we are. You know, we have an incredible safety
Speaker 14: record and we invest heavily in it. And I've always
Speaker 14: been impressed with what we do and how we respond
Speaker 14: and how we react to things, and we open our
Speaker 14: doors up to anybody in that regard. I will tell
Speaker 14: you that everybody talks of a good game about safety
Speaker 14: in aviation, but you really have to put your money
Speaker 14: where your mouth is. It is a big investment, it's
Speaker 14: a big expense, and it's not something you would ever shortcut.
Speaker 3: Andrew, how do you make sense of kind of the
Speaker 3: environment we are? You know, we use words like potentially
Speaker 3: recession and volatility and uncertainty, and you know, the kind
Speaker 3: of world breaking apart in new pieces. How would you
Speaker 3: describe it from what you see, especially as you travel
Speaker 3: around the world and have global customers.
Speaker 14: So it's interesting. In the States, I see still the
Speaker 14: robust demand. Like I said that that we're seeing the
Speaker 14: growth when we see a slow down, and we've seen
Speaker 14: pockets of it over the years. For moments and pauses
Speaker 14: like the beginning of COVID and things like that, you
Speaker 14: tend to see a shift in your customer base, so
Speaker 14: you might lose some volume, but you generally tend to
Speaker 14: have pretty decent flying throughout. We saw it in the
Speaker 14: financial crisis. We actually maintained a whole different segment that flew,
Speaker 14: so there's a resiliency to it. Additionally, our customer base
Speaker 14: tends to get impacted, but impacted different than say somebody
Speaker 14: on your typical main street. So I think we're seeing
Speaker 14: enough flying. In Europe, I see a little softness, to
Speaker 14: be honest with you, inesting, and you know, we're doing
Speaker 14: a lot of investing and a lot of building over there.
Speaker 14: So we're almost counter in some of the regards that
Speaker 14: other people are kind of looking at it differently. We're
Speaker 14: blowing ahead with investments and an investment strategy over there.
Speaker 3: Twenty seconds. Why Europe?
Speaker 14: Why Europe because outside of the United States, the European
Speaker 14: Union is the second biggest private aviation market.
Speaker 3: Sorry I cut you off.
Speaker 4: Remind us how much the jet card is per hour.
Speaker 14: Card average jet card is about two hundred and fifty
Speaker 14: thousand dollars for twenty five hours, and it can be
Speaker 14: a little lower on a light jet. It can be
Speaker 14: significantly higher in a large cab.
Speaker 3: So ten thousand an hour, give or take. Yeah, give
Speaker 3: her take cool stuff. Andrew, thanks so much. Travel safely.
Speaker 3: Andrew Collins, President and Chief executive Officer of Sanchenchet Joining
Speaker 3: us right here in studio. You are listening and watching
Speaker 3: Bloomberg Business Week Daily.
Speaker 1: This is the Bloomberg Business Week Daily Podcast. Listen live
Speaker 1: each weekday starting at two pm Eastern on Applecarplay and
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Speaker 1: listen live on Amazon Alexa from our flagship New York station,
Speaker 1: Just say Alexa play Bloomberg eleven thirty plenty.
Speaker 4: Ahead in our second hour of the weekend edition of
Speaker 4: Bloomberg Business Week, including a New York Times best selling
Speaker 4: author's attempts to unmask the figure behind a bitcoin. Yeah,
Speaker 4: we're talking about Satoshi Nakamoto and it's untouched fortune that
Speaker 4: is waiting to be claimed.
Speaker 3: Plus a crypto tycoon's bold bet to replace the International
Speaker 3: Space Station, and feeling shaken and stirred perhaps as the
Speaker 3: CEO of Craftco talks tariffs and consumer trends in the
Speaker 3: US spirits market.
Speaker 4: All that to come. We begin, though, with the phrase
Speaker 4: chase your dreams. How does one actually go about doing that?
Speaker 4: According to our next guest, it's all about having wild
Speaker 4: amounts of courage.
Speaker 3: Yes, indeed, Jenny Wood spent eighteen years at Google, working
Speaker 3: in a wide variety of roles, including starting the Own
Speaker 3: your Career program at the tech giant. Purpose of that
Speaker 3: program is to help people at Google do their own
Speaker 3: jobs better and even get their next job at the company.
Speaker 3: She took that work, she turned it into a book.
Speaker 3: It's called Wild Courage. It's go after what you want
Speaker 3: and get it. And she joins us here in our
Speaker 3: interactive Broker's Studio. It is good to have you here
Speaker 3: with us. We want to start broadly because the work
Speaker 3: environment is going through some changes and I I think
Speaker 3: you know obviously the political environment, and you know that
Speaker 3: is certainly finding its way into the workforce. How does
Speaker 3: a company kind of find their way through? How do
Speaker 3: they stay true to their employee base, how do they
Speaker 3: stay to the programs that they may be put in
Speaker 3: place over the last five to ten years and believe
Speaker 3: it's important to the company, and yet face a government,
Speaker 3: a federal government and administration that is looking at these
Speaker 3: things very closely.
Speaker 16: Yeah, well, there's no doubt there's tremendous change in the
Speaker 16: workplace and how this is evolving with DEI programs. And
Speaker 16: what's so important about this work and in this book
Speaker 16: Wild Courage go after what you want and get it,
Speaker 16: is that this puts the agency back on you. So
Speaker 16: no matter what's happening that might be outside of your control,
Speaker 16: this puts the agency on you. So right now, think
Speaker 16: of something you want. It could be a goal of
Speaker 16: promotion or raise a relationship even and think about what's
Speaker 16: standing between you and achieving that thing. Well, by the
Speaker 16: time I started working on Wild courage. I trained tens
Speaker 16: of thousands of people directly and directly on success, leadership, influence,
Speaker 16: and the same theme kept coming up their relationship to fear,
Speaker 16: fear of failure, fear of uncertainty, fear of judgment of others,
Speaker 16: and wild courage is the process of feeling that fear
Speaker 16: and taking action anyway. And it's the set of tools
Speaker 16: that help you go after what you want and get it.
Speaker 16: And it's so important right now because we feel like
Speaker 16: we're lacking so much control. There's so much that we
Speaker 16: can't change. But this you can. You can always change
Speaker 16: yourself and push past that fear.
Speaker 3: But Jenny, what if you say, listen, I'm working at
Speaker 3: this company. I love this company. I've been here for
Speaker 3: several years, love it. And then all of a sudden
Speaker 3: they're like, hey, folks, these DEI initiatives, we're not going
Speaker 3: to do anymore. We're gonna like move away from these things.
Speaker 3: Like you talk about having no fear, Like do you
Speaker 3: go to your management, does the employee base do we
Speaker 3: anticipate that they kind of step up and take notice
Speaker 3: and say, wait a minute, folks, this isn't the culture
Speaker 3: we've had. I don't want to work here anymore. Do
Speaker 3: you anticipate that we might see employee bases kind of
Speaker 3: fighting back.
Speaker 16: Yeah, Well, I think we will see a shift for sure,
Speaker 16: And I think as a shift, and what I think
Speaker 16: we'll see a shift in how people feel and how
Speaker 16: people feel a sense of what this company provides or
Speaker 16: what you know is part of the culture or part
Speaker 16: of what they expect of any kind of DEI programs
Speaker 16: or any sort of expected resources, or you know.
Speaker 3: A shift away, a shift.
Speaker 16: Well, I think that I think that if these we're
Speaker 16: already starting to see the shifts, right, we just mentioned
Speaker 16: some of them already, with people change, changing language, and
Speaker 16: so I think people will rise to the occasion again,
Speaker 16: start taking agency and start finding their own ways to
Speaker 16: learn and grow because a lot of these DEI programs
Speaker 16: are helping with communication, they're helping with confidence, they're helping
Speaker 16: level the playing field, and that's what I try to
Speaker 16: do in Wild Courage. So it's almost a perfect time
Speaker 16: to be bringing this this work to the world, which
Speaker 16: is very different than the work I did at Google,
Speaker 16: but so much more exciting and energizing because it covered
Speaker 16: these nine sizzily traits.
Speaker 4: Well, let's talk about some of those traits, because there
Speaker 4: are some traits in here that I think people would
Speaker 4: be surprised to hear. Yeah, in this type of book.
Speaker 4: For example, manipulative, you argue that people have to be manipulative,
Speaker 4: They have to learn how to be manipulative to have
Speaker 4: this wild courage. What do you mean?
Speaker 16: Yeah, so I'm reclaiming language here. These are nine traits
Speaker 16: that raise eyebrows. Right, weird, selfish, shameless, nosey, obsessed, brutal, manipulative, reckless, bossy.
Speaker 16: But you know, we fear, we live in fear that
Speaker 16: people might call us one of these traits, and so
Speaker 16: it prevents us from taking action, from being bold and
Speaker 16: going after what we want. And so when we reclaim them,
Speaker 16: we could think of manipulative not in the traditional sense,
Speaker 16: but more in a sense of the courage to have
Speaker 16: influence and build lasting relationships. Because whether you're selling a product,
Speaker 16: a program, or frankly, yourself, your ability to win friends
Speaker 16: and allies and partners is all about mutual benefit. And
Speaker 16: that's where I want people to lean in.
Speaker 4: Well, it's not just the workplace. You talk about it
Speaker 4: from a personal perspective too. Your husband, John, Yeah, how
Speaker 4: you met him? Yeah, talk about.
Speaker 16: That So it's twenty eleven. I'm right the subway home
Speaker 16: from work, the sea train, and about twenty feet away
Speaker 16: from me stands this really gorgeous guy, beautiful blue eyes,
Speaker 16: thick brown, wavy hair, and I want to talk to him,
Speaker 16: but something holds me back. Fear of failure, what if
Speaker 16: he's a convicted felon, Fear of uncertainty, what if he's married.
Speaker 16: Fear of judgment? Right, what if a hundred people stare
Speaker 16: at me on this packed train, the same three fears
Speaker 16: that I hope wild courage helps people push through.
Speaker 7: So I.
Speaker 16: You know, I'm a confident Google employee on the outside,
Speaker 16: but I'm scared and timid on the inside. So I
Speaker 16: do nothing as the train passes stop after stop after stop,
Speaker 16: and frankly, as life passes me by. But I make
Speaker 16: a deal with the universe. I say, if he gets
Speaker 16: off at my stop, then maybe I'll try to strike
Speaker 16: up a conversation with him, and if not, then say love.
Speaker 16: He gets off at the next stop, fifty ninth Street,
Speaker 16: that is not my stop, And then all of a sudden,
Speaker 16: I feel this wave of wild courage wash over me
Speaker 16: and practically push me off the subway, and I catch
Speaker 16: up with him, have him on the shoulder. I say,
Speaker 16: excuse me, I'm sorry to bother you. You're wearing gloves, so
Speaker 16: I can't tell if you're wearing a wedding ring. But
Speaker 16: in the event that you're not married, you were on
Speaker 16: my subway and I thought you were cute. Any chance
Speaker 16: I could give you my business card? He calls the
Speaker 16: next day, We go out. A week later, three years later,
Speaker 16: we're getting married. And we've now been married happily for
Speaker 16: eleven years, with two great little hooligans each of seventy
Speaker 16: nine already you Noah, I'm.
Speaker 3: Just gonna say that, for those of us who live
Speaker 3: in love in New York, it's very easy that that
Speaker 3: story could have been where he called the conductor or
Speaker 3: the police.
Speaker 9: Had up.
Speaker 2: I should say.
Speaker 16: I'm not saying wild. Courage works every time. I mean,
Speaker 16: you know, we talked to I listen.
Speaker 3: To this, and I'm just saying, well, wait a minute,
Speaker 3: no offense. Yeah, but I still think that there's differences
Speaker 3: for men and women with some of these traits. Yeah,
Speaker 3: so help me out here.
Speaker 2: Yeah.
Speaker 16: Well, I just had this beautiful home coming back to Google.
Speaker 16: I just gave a keynote at Google and someone did ask, well, like,
Speaker 16: how does this you know relate to women versus men?
Speaker 16: And these labels can get very gendered, especially some of them,
Speaker 16: uh shameless or manipulative or bossy, right or nosey. These
Speaker 16: are some that sometimes are labeled more toward women versus men,
Speaker 16: But the underlying principles of wild courage are applicable for anybody,
Speaker 16: whether you're an employee or an entrepreneur, male female, born
Speaker 16: in Salth Paulo or Tokyo or New York, because the
Speaker 16: root of it all is the courage to push past
Speaker 16: that fear to chase what you want.
Speaker 4: Which ones do you think are gendered? Bossy, bossy? I
Speaker 4: feel like women often get called bossy and men often
Speaker 4: don't get called bossy.
Speaker 16: Yeah. I've never heard a man called BOSSI I've heard
Speaker 16: a man called direct and a strong leader and confident.
Speaker 3: Oh yeah, well I think I think I hate I,
Speaker 3: but I think it let it go already rise with
Speaker 3: you know he's going after what he wants.
Speaker 16: Yeah, he's determined, he's going after opportunities. He's strategic.
Speaker 14: Right.
Speaker 16: A woman is manipulative, a man is strategic. A woman
Speaker 16: is a bossy. Man is you know? Digital?
Speaker 4: So do you think men and women have to approach
Speaker 4: this differently.
Speaker 16: Well, I think that it's interesting you asked that. In
Speaker 16: each trait, each chapter, I share what are called trait traps,
Speaker 16: right when you take a trait too far and you're
Speaker 16: classically manipulative or classically selfish. Again, selfish is the courage
Speaker 16: to stand up for what you want. Shameless is the
Speaker 16: courage to stand behind your efforts and abilities. Well, because
Speaker 16: this can be harder for women to toe that line
Speaker 16: because of things like the double bind. Right, we're supposed
Speaker 16: to be sweet and nice, but we're also in a
Speaker 16: workplace want to be direct and confident and competent. So
Speaker 16: I think that women are probably going to be perceived
Speaker 16: as falling into these trait traps more often than men,
Speaker 16: just because the expectations of women can be different. But
Speaker 16: it really does run the gamut. It depends on the person,
Speaker 16: depends on their personality, depends on the environment.
Speaker 3: I love this too, because you do provide a lot
Speaker 3: of context around each of them. These words are these approaches,
Speaker 3: but you say power grows through proximity, get adjacent to it,
Speaker 3: rub shoulders with the elite, listen, pay attention, be seen.
Speaker 3: Few people to know for people to know you, they
Speaker 3: first have to recognize you. To be visible, be pressent
Speaker 3: next to you. Exactly, I'm going.
Speaker 16: To sit next to you.
Speaker 3: Everybody stops at you. But what's the balance between being
Speaker 3: noticed and being annoying? Because because someone who is a
Speaker 3: squeaky wheel constantly, I think it's safe to say that
Speaker 3: people sometimes they don't, they start to ignore you. Sometimes
Speaker 3: they they listen because they're like, enough already, let's just
Speaker 3: do what this person wants.
Speaker 16: So here's where I like to challenge people. You might
Speaker 16: know some people in your life who are that obnoxious,
Speaker 16: over the top, too much squeaky wheel.
Speaker 3: We're immediate, that never happens, right, But actually maybe maybe
Speaker 3: you're actually.
Speaker 16: Most of us are normal. Well right, okay, so you
Speaker 16: just sort.
Speaker 3: Of shared it right there.
Speaker 14: You go ahead.
Speaker 4: Well, I'm saying if you're saying you're the normal one, Carol,
Speaker 4: if you're saying we're normal, we're normal, We're not normal.
Speaker 3: We're not normal, that's a probably bad word.
Speaker 16: Go ahead, outside of media, think of twenty people, friends
Speaker 16: from colleague, former colleagues. My hunch is that the majority
Speaker 16: of them, you think, need to dial it up and
Speaker 16: kick their imposter syndrome to the curb, or be more confident,
Speaker 16: or ask for what they want. It's like the advice
Speaker 16: you'd give to a friend, like, no, your company laid
Speaker 16: off three people and now you're doing the job of them,
Speaker 16: and they've given you no more money and no raise
Speaker 16: and no promotion and no different title. You'd say, well,
Speaker 16: go ask your boss for what you need a new
Speaker 16: title and a twenty percent raise. But we fail to
Speaker 16: do that ourselves. So it's almost like wild courage is
Speaker 16: the advice you give to your friend, but that you
Speaker 16: struggle to give to yourself.
Speaker 3: So what if you ask, you have the courage you
Speaker 3: ask and they're like, nope.
Speaker 16: This happened to me. So I was doing a lot
Speaker 16: of asking about this book, people helping me promote it,
Speaker 16: and some people ghosted me, some people just gave me
Speaker 16: a blatant no, and some people in a really harsh way,
Speaker 16: and you just have to push through it. It's spine straightening.
Speaker 16: It's part of being reckless and taking risks and airing
Speaker 16: on the side of action, and that makes you better
Speaker 16: over time.
Speaker 3: Good stuff interesting, by the way, I think you're normal.
Speaker 4: I don't know.
Speaker 2: We'll chat to read it.
Speaker 16: That chapter one is weird, so.
Speaker 4: I'm not normal.
Speaker 3: Jenny, thank you so much. Yes is about good luck
Speaker 3: with the book. Jenny Wood print book is out today.
Speaker 3: It's called Wild Courage. Go after what you want and
Speaker 3: get it.
Speaker 1: You're listening to the Bloomberg Business Week Daily Podcast. Catch
Speaker 1: us live weekday afternoons from two to five eastering. Listen
Speaker 1: on Apple Karplay and Android Auto with the Bloomberg Business app,
Speaker 1: or watch us live on YouTube.
Speaker 4: There's perhaps no greater mystery in the world of cryptocurrency
Speaker 4: then the identity of one Satoshi Nakamoto. Is it one?
Speaker 4: Is it a man? Is it a woman? Is it
Speaker 4: even a person? That's because Satoshi Nakamoto is widely seen
Speaker 4: as the creator of bitcoin, and it's thought that his
Speaker 4: or her there bitcoin wallet contains up to one point
Speaker 4: one million coins, which yes, could be worth somewhere in
Speaker 4: the neighborhood of one hundred billion dollars. Benjamin Wallace may
Speaker 4: have found some answers. He's been looking for Satoshi all
Speaker 4: the way back to twenty eleven, and he's the author
Speaker 4: of a new book, The Mysterious Mister Nakamoto, a fifteen
Speaker 4: year quest to unmask the secret genius behind crypto. Benjamin
Speaker 4: also the author of the New York Times bestseller The
Speaker 4: Billionaires Vinegar, and he's written for New York Vanity, fair Wired,
Speaker 4: and more. He joins us from New Jersey. So did
Speaker 4: you find Satoshi Nakamoto? Benjamin?
Speaker 17: Thanks for having me. Did I find Satoshi? I found
Speaker 17: many Satoshi's. I don't land on a mathematical proof of
Speaker 17: a single name that you can point to, but I
Speaker 17: explore a lot of candidates very thoroughly, and I think
Speaker 17: you finished the book able to draw your own conclusions.
Speaker 4: And I look at the group possibility.
Speaker 17: I look at the possibility that it came out of
Speaker 17: the NSA. I look at the possibility that it could be,
Speaker 17: you know, an old sort of cryptographer from the nineties,
Speaker 17: or someone much newer on the scene who no one's
Speaker 17: ever heard of.
Speaker 4: Which one do you think it is? Of all of those?
Speaker 17: This is going to be unsatisfying, But I I really
Speaker 17: there's a few maybe favored theories, and okay. One of
Speaker 17: them is a beloved no longer with us cipher punk
Speaker 17: as they called them, named how Finnie, who was the
Speaker 17: very first person to transact with Satoshi Nakamoto on the
Speaker 17: Bitcoin network. Another is an obscure cipher punk who is
Speaker 17: sort of a recluse, who lives in Australia, who has
Speaker 17: not been focused on previously, and who, unlike how Finni is,
Speaker 17: is sort of on the other end of the spectrum
Speaker 17: in terms of.
Speaker 4: Likability.
Speaker 17: Let's say, so he would be kind of a shocking
Speaker 17: Satoshi because he's not the benevolent god that bitcoiners like
Speaker 17: to imagine Satoshi must be.
Speaker 4: That would be James A. Donald.
Speaker 17: That would be James A.
Speaker 8: Donald exactly.
Speaker 4: Do you think that Satoshi is an individual or do
Speaker 4: you think Satoshi's a group.
Speaker 17: I think that if Satoshi is a group, then that
Speaker 17: would actually point towards potentially an intelligence organization being the
Speaker 17: source of bitcoin, because outside of intelligence organizations, where obviously
Speaker 17: groups or groups hold secrets all the time that do
Speaker 17: not leak. Outside of those agencies, it's almost impossible for
Speaker 17: group secrets to remain secret. And you know, seventeen years
Speaker 17: after Satocian Akimoto first came on the scene and announced bitcoin,
Speaker 17: no one has come forward to say, oh, yeah, you know,
Speaker 17: my ex husband invented it, or my ex business partner
Speaker 17: invented it, or my estranged sibling invented it. And this
Speaker 17: is just I find it very unlikely that a group
Speaker 17: could hold the secret.
Speaker 3: Okay, so this may be blasphemous, but our blasphemy. Why
Speaker 3: does it matter that we figure out veentamin his identity.
Speaker 17: Well know, what you're saying is the opposite of blasphemy.
Speaker 17: My saying it matters is the blasphemy. Like bitcoiners will
Speaker 17: tell you that the world should not know who Satocin
Speaker 17: Akamoto is. I have two answers to that. One is
Speaker 17: that I think we've all seen recently how the richest
Speaker 17: person in the world can affect a lot of people's
Speaker 17: lives other than themselves. And Satoshi Nakamoto right now with
Speaker 17: one point one million bitcoins would be in the twenty
Speaker 17: richest people in the world, and Bitcoin would only have
Speaker 17: to go up, you know, by a multiple of two
Speaker 17: or three to suddenly make Satoshi Nakamota the richest person
Speaker 17: in the world. So that's one reason. The other reason
Speaker 17: is until we know definitively who Satoshi Nakamoto is and
Speaker 17: what their agenda and intentions are, we cannot assume that
Speaker 17: they are, you know, ones that everyone would like. Let's
Speaker 17: say it turned out that Satoshi Nakamoto is a plan
Speaker 17: by the Chinese Communist Party to destabilize the dollar. Should
Speaker 17: we just leave them alone and defer to their wish
Speaker 17: for anonymity?
Speaker 4: Can you remind everybody why the origin of bitcoin is
Speaker 4: associated with Satoshi?
Speaker 7: Sure?
Speaker 17: So, the way bitcoin was first announced was on this
Speaker 17: kind of obscure cryptography list serve or message board by
Speaker 17: someone using the name Satoshi Nakamoto. And on that message board,
Speaker 17: no one had ever heard this name, but they just
Speaker 17: assumed it was one they'd never heard of, or it
Speaker 17: was an Internet alias. And then eventually that same person
Speaker 17: or alias launched the bitcoin software onto the Internet.
Speaker 3: You know, it's just kind of interesting, Tim, and I
Speaker 3: have so many interviews on the world of crypto and
Speaker 3: people so convinced that this is the way forward, and
Speaker 3: yet there's just so many questions. And I think part
Speaker 3: of the mystique right of digital currencies is that there
Speaker 3: is this mystique that we don't necessarily who started it,
Speaker 3: and you know, it's kind of outside the traditional financial infrastructure.
Speaker 3: How do you see, you know, since you started writing
Speaker 3: and wired your first feature on bitcoin twenty eleven, many
Speaker 3: years ago, now, at this point, how do you think
Speaker 3: about the digital world, the digital currency world, today.
Speaker 7: Sure.
Speaker 17: Well, first, I'd also say the anonymity or pseudonymity and
Speaker 17: unknowness of Satoshi I think has been an incredible marketing
Speaker 17: coup for Bitcoin because it's very on brand. The whole
Speaker 17: idea that bitcoin has no leader fits perfectly with the
Speaker 17: idea that we don't know who the leader is the
Speaker 17: crypto world in general, in the digital currency world in general,
Speaker 17: today I think of as quite far removed from where
Speaker 17: it started. I mean, it began as a sort of
Speaker 17: libertarian friendly project just with Bitcoin. Now there's something like
Speaker 17: over according to coinbase, over eleven thousand different cryptocurrencies. Obviously,
Speaker 17: crypto broadly has a fairly checkered reputation because of all
Speaker 17: the scamminess over the years with some of the especially
Speaker 17: the non bitcoin cryptocurrencies. But I continue to think it's
Speaker 17: an extremely fascinating and promising technology that may just not
Speaker 17: have found its killer use case yet. I mean, AI
Speaker 17: started in the nineteen fifties. For decades people assumed, since
Speaker 17: nothing has happened with it yet, nothing is going to
Speaker 17: happen with it that is consequential. And obviously we now
Speaker 17: know AI is extremely consequential, and I think it's entirely
Speaker 17: possible something similar could happen with bitcoin and crypto.
Speaker 3: All right, we unfortunately have to leave it there, but Benjamin,
Speaker 3: we hope you'll come back real soon so that we
Speaker 3: can continue this conversation because it's really fascinating when your
Speaker 3: take on it. In particular, Benjamin Wallace, thank you. His
Speaker 3: new book is The Mysterious Mister Nakamoto, A fifteen year
Speaker 3: quest to unmask the secret genius behind crypto. Joining us
Speaker 3: there in New Jersey.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern. Listen
Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 3: From Bitcoin's mysterious origins to the billionaire who made us
Speaker 3: fortune in cryptocurrency and is now headed for outer.
Speaker 4: Space, Jed michaeleb is the sole financial backer of vast Space.
Speaker 4: It's a startup aiming to build the world's first commercial
Speaker 4: space station. Writing about Jeb in his cosmic ambitions is
Speaker 4: Bloomberg News North America Industrials and Transport reporter Kyle Porter.
Speaker 12: I was very skeptical at the outset of reporting this story,
Speaker 12: but having gone down to see them in la before Christmas.
Speaker 12: I've not seen building a vat scale anywhere in the
Speaker 12: world outside of China. It's twenty four to seven, seven
Speaker 12: days a week. They're spending the money and they're pretty
Speaker 12: bullish on their prospects.
Speaker 4: You know, there's this misconception that I think it's fair
Speaker 4: to say I had before reading your piece, that NASA
Speaker 4: doesn't really have as much power as it used to.
Speaker 4: But a point that you and Lauren make in the
Speaker 4: piece and also in the video, is that NASA still
Speaker 4: controls this awards process, So they might not be doing
Speaker 4: the manufacturing of this stuff. It might go to SpaceX,
Speaker 4: it might go to other companies Boeing for example, and
Speaker 4: maybe it'll even go to this company. Is what is
Speaker 4: NASA's role in this in a world where NASA doesn't
Speaker 4: have the power that he used to.
Speaker 12: Well, it's not some which NASA doesn't have the power.
Speaker 12: It just doesn't do the manufacturing.
Speaker 4: He doesn't want to.
Speaker 12: It wants to become much more of a commissioner of
Speaker 12: projects rather than the developer themselves. And there's upsides and
Speaker 12: downsides to that. The upside is you're not as beholden
Speaker 12: to the political cycle for funding. You can have more
Speaker 12: certainty if you're contracting out to the private sector. The
Speaker 12: downside is you do lose some of that control. And
Speaker 12: you know, certainly on a geopolitical level, no one has
Speaker 12: deregulated the space industry in the way that the Americans have,
Speaker 12: So it's a little bit of an open question whether
Speaker 12: it's going to be a good idea about idea.
Speaker 3: I guess one of the things Kyle I want to
Speaker 3: know is who is this dude, Jed mckel I mean, like,
Speaker 3: what's his background? You know, was he just born to
Speaker 3: do this? Because it sounds like not necessarily you would
Speaker 3: have assumed that this is what the project he'd be
Speaker 3: working on.
Speaker 4: No, you're exactly right there, Carol.
Speaker 12: I mean, he's an Arkansas farm boy who said he
Speaker 12: used to spend his evenings looking up at space as
Speaker 12: a child.
Speaker 4: He dropped out Berkeley.
Speaker 12: He started his first business in his early twenties for
Speaker 12: the elder millennials and gen X's listening. It was e Donkey,
Speaker 12: which was a platform for sharing music. That business folded
Speaker 12: under a weight of lawsuits, and after a brief period
Speaker 12: trying to start a Magic the Gathering trading platform, he
Speaker 12: somewhe into crypto.
Speaker 4: Crypto treated him well. He made a lot of money
Speaker 4: on crypto. He has a background in Ripple Mount Gox.
Speaker 4: What was his crypto story.
Speaker 12: Mount Gathering, a magic The Gathering became mount Gox. He
Speaker 12: repurposed the platform. It became incredibly successful. I think it
Speaker 12: was the first real bitcoin trading platform. He sold out.
Speaker 12: Then that after he'd sold that platform collapsed and was
Speaker 12: the biggest stever crypto failure. Into left Ex. He had
Speaker 12: then started Ripple Left that quite quickly, had a sheer
Speaker 12: trading plan which made him billions, and then went on
Speaker 12: to found Stella, which combined with light Yurine is still
Speaker 12: very active in the industry. Now. He's also into AI
Speaker 12: as well.
Speaker 4: So he could take his several billion dollars and create
Speaker 4: some sort of I don't know, family office, keep investing,
Speaker 4: making vets in crypto, making other types of investments, grow
Speaker 4: that wealth. But instead he kind of wants to risk
Speaker 4: what it seems like half of on something that could
Speaker 4: totally not work out. What's his thinking thing.
Speaker 12: I spoke to a few people who worked with him
Speaker 12: for a long time, and they said you should not
Speaker 12: think for a second that he's not rational.
Speaker 4: About risk. He's hyper rational about it.
Speaker 12: He just has a very firm view on what is
Speaker 12: the best use of his capital. You know, he's not
Speaker 12: a guy who's gone to gold and Sacks or ubs
Speaker 12: and taking the wealth management plan. You know, the money's his.
Speaker 12: He spends it where he thinks he can put it
Speaker 12: to best use.
Speaker 3: You know, it was funny, I have to say when
Speaker 3: I first picked up your story, Kyle, I thought, Okay,
Speaker 3: Elon's going to hate these people, right, like, you're invading
Speaker 3: in my space. No, actually, right, Tesla is lending or SpaceX,
Speaker 3: i should say, is lending Vast some technology. There's Tesla's
Speaker 3: in the parking lot and their CEO actually has a
Speaker 3: Tesla connection. Like, it's kind of interesting.
Speaker 12: Yeah, it is that no company has gotten into bed
Speaker 12: with SpaceX in the way that Vast has. And that
Speaker 12: was the one air in reporting when they didn't really
Speaker 12: want to disclose, they were keen to point out out
Speaker 12: it's very separate the fact that Vast was, you know,
Speaker 12: paying SpaceX to send.
Speaker 4: Up the Haven one shuttle next year.
Speaker 12: You know, it's like, well, you know, of course we're
Speaker 12: a partner, and you know, you know, we're a client,
Speaker 12: so you know, it makes sense for us to do
Speaker 12: these things together. But it's like up over the competition.
Speaker 4: Well that's what That's where I wanted to go, Kyle.
Speaker 4: Somebody listening or watching right now might say, wait a second.
Speaker 4: If these guys have a close relationship with SpaceX, a
Speaker 4: close relationship with Elon, Elon's got a close relationship with
Speaker 4: Jared Isaacman of NASA and of the and with the
Speaker 4: President as well, it's a pretty good omen for being selected.
Speaker 12: Maybe, Look, if you were being completely cynical, and I'm
Speaker 12: certainly not one of those people, you might suggest that
Speaker 12: Elon would not cut a program that would benefit his
Speaker 12: firm financially if you were being cynical.
Speaker 3: But if you were not being cynical, well, okay, what's
Speaker 3: the competition that they face in this process.
Speaker 12: There's a number of other companies in the Space Axiom,
Speaker 12: Blue Origin Voyager that are all looking to get one
Speaker 12: of those two spots for the ISS replacement. The current
Speaker 12: plan is for two companies to get taken forward middle
Speaker 12: of next year, so that's when they're hoping to have
Speaker 12: a haven one in orbit.
Speaker 3: Blue Origin. Wait, that's connected to somebody, oh who is
Speaker 3: Oh yeah, Jeff Bezos Yeah, we spend more.
Speaker 4: Time in Florida, Carroll than in Washington, DC. Right now.
Speaker 3: That is very true, very true. And he's not a
Speaker 3: best buddy. A close buddy, perhaps a buddy, but not
Speaker 3: a best buddy. Kyle, great story, great video that goes.
Speaker 3: We highly recommend you check it out at Bloomberg dot
Speaker 3: com and on the Bloomberg. Kyle is North America Industrials
Speaker 3: and Transport reporter at Bloomberg News. Joining us from ship.
Speaker 3: Do not go anywhere.
Speaker 7: This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 3: While President Trump has threatened a two hundred percent tariff
Speaker 3: on all alcoholic products ship from the European Union to
Speaker 3: spaying drinkers, restaurant tours, bar owners and suppliers across the US,
Speaker 3: a reciprocal terror free trade agreement that has existed between
Speaker 3: the EU and the United States since nineteen ninety seven
Speaker 3: could be ripped up as a consequence of Trump's anger
Speaker 3: at a European levee on America's native spirit, otherwise known
Speaker 3: tim as Bourbon.
Speaker 4: Well, we are very interested in how the US spirits
Speaker 4: industry is viewing all of this. Ali Anderson is CEO
Speaker 4: at Kraftco. It's a company that has more than two
Speaker 4: dozen spirits and liqueurs, including chin vodka, Bourbon rye, and
Speaker 4: ready to drink cocktail. She joins us from Alexandria, Virginia. Ali,
Speaker 4: good to have you with us. How are you?
Speaker 8: I am well, thank you, Carol. Tim good to be here.
Speaker 4: Hey, before we get to exactly the impact of tariffs,
Speaker 4: explain your portfolio here, because I want to understand what
Speaker 4: exactly you have if you make it or if you
Speaker 4: just license it. What are the intricacies here?
Speaker 8: Oh, great, great question to start with. So, Kraftco. Has
Speaker 8: five different brands that are distributed all across the United States.
Speaker 8: We make these brands. We do source our whiskey, we
Speaker 8: distill our gin and our vodka. We've got everything from
Speaker 8: the value end of the spectrum where if you're just
Speaker 8: trying to get into whiskey and you're not quite sure
Speaker 8: where to start, all the way up to ultra premium
Speaker 8: luxury whiskeys that we spend quite a bit of time
Speaker 8: blending and finishing, so there's a lot to dig into
Speaker 8: with our portfolio. We also have a range of RTDs
Speaker 8: which are very popular.
Speaker 4: Ready to drink cocktails, Yeah.
Speaker 8: Ready to drink great, Yeah, canned cocktails could not be
Speaker 8: bigger right now, and they've been on on the climb
Speaker 8: now for a couple of years. So we've got those
Speaker 8: as well. And then some lookquurse So if you're just
Speaker 8: you know, into the low know, the lifestyle thing where
Speaker 8: you just you're not interested in one hundred proof whiskey,
Speaker 8: we've got some liqueurs that are very flavor forward and
Speaker 8: lower proof so you can throw them in your seltzer
Speaker 8: and still be able to enjoy a good time.
Speaker 4: So I'm wondering about the tariffs and how you're viewing this.
Speaker 4: Do you export at all?
Speaker 8: We currently don't export. But here's the thing about tariffs
Speaker 8: is that they are They affect everybody, whether you export
Speaker 8: or not. In fact, this was going to be our
Speaker 8: year to start exporting, so naturally, you know, we're disappointed
Speaker 8: here at Craftco. We're in thirty two states right now,
Speaker 8: and that's definitely affecting us. I think, you know, when
Speaker 8: we talk about tariffs and think about it, we first
Speaker 8: of all commend the administration's objectives to protect the American people,
Speaker 8: to support jobs in the United States. But we are
Speaker 8: concerned that those tariffs just really don't contribute to that effort.
Speaker 8: In fact, think it harms the American jobs. You know,
Speaker 8: you look at something like whiskey, right, which starts with
Speaker 8: the farmers who grow the grain, and we're very connected
Speaker 8: to that process, and then you move to the small
Speaker 8: business guys like us who distill that grain. Then you
Speaker 8: move on to the distributor whose trucks take it to
Speaker 8: your favorite bars and restaurants, and eventually that bartender that
Speaker 8: you've got a relationship with where you go to get
Speaker 8: that great dependable glass of whatever your spirit is. Those
Speaker 8: are all the people in the supply chain that are
Speaker 8: really affected by this, whether you export or not.
Speaker 4: So you were going to export this year, but because
Speaker 4: of tariffs, you're not going to That's right, you know.
Speaker 8: We were going to export to Canada and to the EU,
Speaker 8: and certainly now, of course we have to pivot, and
Speaker 8: that's what we do or a small business, we can
Speaker 8: absolutely do that. But it does create a lot of
Speaker 8: price pressure and certainly a lot of competition at the
Speaker 8: shelf that you know, the over three thousand small distillers
Speaker 8: in this country now have to contend with where's all
Speaker 8: that supply.
Speaker 12: Going to go?
Speaker 8: It's going to come right back here in the United States.
Speaker 3: Yeah, how much has that changed in your business story
Speaker 3: and how you think about twenty twenty five? Alley?
Speaker 2: Great?
Speaker 8: Yeah, So what it does for us, it really concentrates
Speaker 8: what we do at home. So we're based out of Holland, Michigan,
Speaker 8: right there on the lake Shore. We're super proud of
Speaker 8: it and we love it, as are the Michiganders all
Speaker 8: over the state. And so what we do is we
Speaker 8: were concentrating our strategy to be experience based. So we're
Speaker 8: going to reopen our tasting room here very soon, and
Speaker 8: it's going to be an experience where you can come,
Speaker 8: you can sit down, you can connect, you can talk
Speaker 8: maybe about how tariffs are hurting your business, you can
Speaker 8: celebrate the best of what we have, which is an
Speaker 8: American spirit.
Speaker 3: Well, you know, it's interesting too, the whole story of tariffs.
Speaker 3: As you it's obviously changing your plans for going overseas.
Speaker 3: There are concerns though that you know, all of this
Speaker 3: ultimately is going to impact As you said, this impacts farmers, drivers,
Speaker 3: So many people get impacted potentially by tariffs and not
Speaker 3: being able to access markets outside the United States. Are
Speaker 3: you beginning to think about a slowdown in the US
Speaker 3: then as a result, are you beginning to think about
Speaker 3: a possible recession and making business plans for such?
Speaker 8: Oh, we certainly are. I think you know, we've seen
Speaker 8: a lot of the what we do at craft cos
Speaker 8: we've sort of we look at the broader context and
Speaker 8: so we're seeing the larger producers start to pause production.
Speaker 8: We haven't seen that for many, many years, right, we
Speaker 8: had this huge bourbon boom going back to two thousand
Speaker 8: and five all the way up through COVID. You know,
Speaker 8: we've all heard about the whiskey glut and the COVID hangover,
Speaker 8: and things are slowing down and in the industry we
Speaker 8: call that normalization. So we very much see this as cyclical,
Speaker 8: not structural. We've certainly weathered tough times in the spirits
Speaker 8: industry before. But to your point, Carol, like it really
Speaker 8: is the hardworking Americans, the corn farmers, the truckers, the
Speaker 8: detillery workers, the barrel makers, the bartenders, the service the
Speaker 8: communities that ultimately depend on this for economically economic reasons,
Speaker 8: but then also just to connect to connect community. I
Speaker 8: think that's gonna it's gonna be tough road, Allie.
Speaker 3: Is there a belief and I think this is something
Speaker 3: certainly everyone across the US and those of US report
Speaker 3: on policy out of the White House are trying to gauge,
Speaker 3: especially since as tariffs have been talked about since President
Speaker 3: Trump came back for a second term. You know, we've
Speaker 3: heard things and heard, you know, something different potentially an
Speaker 3: hour later or the next day, and so it's fluid,
Speaker 3: is how we are describing it. Is there an expectation
Speaker 3: that potentially this is a shorter term thing and that
Speaker 3: ultimately overseas markets will reopen again, or is there a
Speaker 3: concern that other markets are getting nervous about what the
Speaker 3: US is as a trading partner, and we'll look for
Speaker 3: longer term solutions to get whether it's alcohol, whether it's
Speaker 3: their bourbon, whether it's what have you in the future.
Speaker 3: I'm just curious if you can game that out.
Speaker 6: Yeah, it is.
Speaker 8: Game of ping pong right now. I think that's why
Speaker 8: so we take the stance, at least in our small business,
Speaker 8: of being flexible, of rooting down into what we can
Speaker 8: do domestically right now, and we've got a fantastic distribution network.
Speaker 8: We really do have good partners that way, but they're
Speaker 8: experiencing pressure as well. One of the other things, you know,
Speaker 8: I think that's really interesting about this is that spirits
Speaker 8: is unique and that you can't make tequila or bourbon,
Speaker 8: which are very designated, distinctive products that can only be
Speaker 8: produced in certain geographical areas around the world. That's very
Speaker 8: unique to the use and you know, to even argue
Speaker 8: on the other side of it with champagne and with
Speaker 8: Conye right like, So it really is something that affects
Speaker 8: all of us, and I think generally in the spirits
Speaker 8: industry we're all very cooperative. I think we've been the
Speaker 8: model for what is fair and reciprocal trade, zero for
Speaker 8: zero tariffs, as you mentioned at the top, since nineteen seven.
Speaker 8: So that's you know, it's we've done it well, We've
Speaker 8: done it right. We hate to see that.
Speaker 4: What would you say to somebody listening you're watching right
Speaker 4: now who says, wait a second, if we put tariffs
Speaker 4: the US, that is two hundred percent tariffs on all
Speaker 4: alcoholic products shipped from the European Union. Shouldn't you embrace that, Ali,
Speaker 4: because you're an American company and then you don't have
Speaker 4: to compete price wise with the imported gins, the imported vodkas,
Speaker 4: the imported spirits.
Speaker 8: Yeah, I can see where that might be the case.
Speaker 8: I think for US, a rising tide raises all boats,
Speaker 8: and that is that is something we've done for a
Speaker 8: long time. It's something we believed in Competition is never
Speaker 8: a bad thing. It creates innovation, it creates new categories.
Speaker 8: So yeah, we absolutely want to see you.
Speaker 4: So you're in You're in Alexandria, Virginia right now, You're
Speaker 4: close to the US Capital. Do you Are you able
Speaker 4: to lobby? Are you able to communicate your concerns to
Speaker 4: Washington DC?
Speaker 9: Oh?
Speaker 8: For sure. In fact, I'm part of craftc is a
Speaker 8: part of DISCUS. I sit on the Craft Advisory Council.
Speaker 8: I'll be at the DISCUS Annual conference here in a
Speaker 8: couple of days Wednesday through Friday this week, and there
Speaker 8: certainly is an active effort underway to get to Capitol
Speaker 8: Hill and say listen, we fully support the objective to
Speaker 8: protect people, to protect jobs, to be America first. We
Speaker 8: absolutely support that. What we're looking out for here is jobs, economy, innovation,
Speaker 8: trade relationships, and the long term health of the industry
Speaker 8: as a whole.
Speaker 3: Allie, what can you tell us about the consumer and
Speaker 3: consumer strength at this point? And maybe I don't know.
Speaker 3: It's a case of what the consumer was feeling at
Speaker 3: the beginning of the year and what they're feeling now.
Speaker 3: If you're noticing any change.
Speaker 8: Consumers they drive what we do, right. Consumers are all
Speaker 8: about preferences. When you know, when lifestyle shifts happen, that's
Speaker 8: I think that's something that challenges us to respond. I mean,
Speaker 8: we are consumers ourselves, and so often I can speak
Speaker 8: for my company when we're sitting around the table and
Speaker 8: we're trying to figure out what could be the next
Speaker 8: great thing. We did this several years ago with a
Speaker 8: product we have called cigar Bland. We were the very
Speaker 8: first at Joseph Magnus to bring that to market, and
Speaker 8: that really was just born of things we like, right,
Speaker 8: what do we want to see in the market. And
Speaker 8: so today I think the customer is saying, what do
Speaker 8: you have for me? What do you have that's different.
Speaker 8: What do you have that fits my lifestyle?
Speaker 7: Right?
Speaker 8: How can you dazzle me right? Keep me interested? So
Speaker 8: they're very very sicky. You know, everybody does a ton
Speaker 8: of research today, right, and we're thanking you for it.
Speaker 3: They keep us on hard tow just quick to follow.
Speaker 3: But in terms of actual consumer demand, our consumers slowing down?
Speaker 3: Are they being pinched? Are you seeing any signs of that?
Speaker 8: We are seeing a little bit of a slow down.
Speaker 8: Like I said, we call it normalization, but we're seeing
Speaker 8: consumers make not worst choices. They're actually making very healthy choices.
Speaker 8: They're all about quality and not quantity.
Speaker 3: Now, all right, going to leave with They're great to
Speaker 3: get some time with you. Thank you so much. Ellie Anderson.
Speaker 3: She's chief executive officer of Craftco. Joining us from Alexandria, Virginia.
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