WEBVTT - Bloomberg Businessweek Weekend - June 14th, 2025 0:00:00.320 --> 0:00:07.280 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.680 --> 0:00:13.000 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.639 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.680 --> 0:00:22.560 and trends shaping today's complex economy, plus global business, finance 0:00:22.600 --> 0:00:26.279 and tech news as it happens. The Bloomberg Business Weekdaily 0:00:26.400 --> 0:00:31.360 Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:32.159 --> 0:00:35.000 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:35.360 --> 0:00:38.680 Another busy week that started with the unrest in California 0:00:38.760 --> 0:00:43.080 over the Trump Administration's immigration policies and closed with progress 0:00:43.159 --> 0:00:45.480 on trade between the United States and two of its 0:00:45.479 --> 0:00:46.760 major trading partners. 0:00:46.960 --> 0:00:49.639 We also spend time at Cisco Live twenty twenty five 0:00:49.680 --> 0:00:51.959 in San Diego. We're going to share some of our 0:00:52.000 --> 0:00:54.040 favorite conversations from the conference. 0:00:54.080 --> 0:00:56.040 There's a lot of good ones. We're going to start 0:00:56.320 --> 0:01:00.560 this hour with trade. US Treasury Secretary Scott Bessend, Commerce 0:01:00.640 --> 0:01:05.000 Secretary Howard Lutnik, and US Trade Representative Jamison Greer were 0:01:05.040 --> 0:01:08.560 in London early this past week negotiating with officials from 0:01:08.640 --> 0:01:11.959 China in the hopes of making a major trade breakthrough. 0:01:12.120 --> 0:01:14.840 The talks lasted around twenty hours, taking up all day 0:01:14.880 --> 0:01:17.440 Monday and most of the day on Tuesday before wrapping 0:01:17.520 --> 0:01:18.440 up late that night. 0:01:18.480 --> 0:01:19.039 Yeah, it felt like. 0:01:19.040 --> 0:01:21.480 They just kept pushing on and pushing on and pushing on. 0:01:22.000 --> 0:01:25.919 We finally did hear from Secretary Lutnik and Trade Representative Greer, 0:01:26.160 --> 0:01:30.240 who finally stepped outside close to midnight in London Tuesday 0:01:30.680 --> 0:01:34.039 and talked to reporters about the high stakes negotiations and 0:01:34.400 --> 0:01:36.920 how the group finally agreed on a plan to move forward. 0:01:37.280 --> 0:01:39.360 Here's the US Commerce Secretary. 0:01:39.800 --> 0:01:42.720 First, we had to get sort of the negativity out, 0:01:43.360 --> 0:01:45.840 and now we can go forward to try to do 0:01:45.959 --> 0:01:50.960 positive trade, growing trade, and beneficial to both China and 0:01:51.040 --> 0:01:51.880 to the United States. 0:01:51.920 --> 0:01:55.440 From me, that's Commerce Secretary Howard Lutnick, just moments after 0:01:55.560 --> 0:01:58.480 leading trade negotiations in London with Chinese officials. 0:01:58.760 --> 0:02:01.240 The framework the two sides agreed upon is based around 0:02:01.280 --> 0:02:04.280 a consensus from meetings in Geneva held last month that 0:02:04.360 --> 0:02:07.240 first lowered terriffs between the two countries. At the core 0:02:07.280 --> 0:02:10.240 of the talks highly coveted rare earth minerals. 0:02:10.639 --> 0:02:13.640 As negotiations were going on, we wanted to touch base 0:02:13.720 --> 0:02:16.520 with an expert on these materials and why they're at 0:02:16.520 --> 0:02:18.800 the center of talks between the US and China, we 0:02:18.840 --> 0:02:21.760 caught up with Graceland Baskrin, director of the Critical Mineral 0:02:21.800 --> 0:02:25.200 Security Program at the Center for Strategic and International Studies. 0:02:25.480 --> 0:02:28.000 She helped explain why rare earths are so important. 0:02:28.320 --> 0:02:31.000 First and foremost, rare earths are in everything, and we've 0:02:31.040 --> 0:02:34.079 seen that in the last couple of weeks. As companies 0:02:34.080 --> 0:02:36.480 have not been able to secure the licenses they need, 0:02:36.760 --> 0:02:39.320 we have seen disruptions to manufacturing. 0:02:39.880 --> 0:02:42.160 We've seen it most visibly from the automotive sector. 0:02:42.240 --> 0:02:46.400 For example, Ford actually paused the manufacturing of its Explorer 0:02:46.520 --> 0:02:48.160 in Chicago because it. 0:02:48.120 --> 0:02:49.240 Didn't have these rare earths. 0:02:49.240 --> 0:02:52.000 But we have to remember they're in defense technologies, they're 0:02:52.000 --> 0:02:54.720 in cancer treatment, they're in MRI scanners, they're in just 0:02:54.800 --> 0:02:58.000 about everything electronic. So what we have is both this 0:02:58.360 --> 0:03:04.520 huge reliant and there's no significant processing capabilities that exist 0:03:05.360 --> 0:03:09.120 operational today, which means that we are wholly dependent on 0:03:09.200 --> 0:03:10.440 China for something that we need. 0:03:10.320 --> 0:03:10.720 A lot of. 0:03:11.120 --> 0:03:14.480 Grazlyn, Carol and I spoke to r J. Scaring, the 0:03:14.520 --> 0:03:17.120 CEO of Rivian, the ev maker, and we asked them 0:03:17.120 --> 0:03:20.799 specifically about rare earths, and partly what he said and 0:03:20.840 --> 0:03:22.679 he's been clear that he is working to lobby the 0:03:22.680 --> 0:03:25.200 Trump administration. His folks are communicating with them about the 0:03:25.200 --> 0:03:27.960 importance of rarest But he also told us, hey, necessities 0:03:28.040 --> 0:03:30.639 essentially the mother of invention, and I'm confident that we're 0:03:30.639 --> 0:03:32.440 going to be able to do some of this stuff, 0:03:32.480 --> 0:03:35.080 at least in the near future without rare earths. Do 0:03:35.120 --> 0:03:36.560 you think that's the case? Are we going to be 0:03:36.560 --> 0:03:38.880 able from a technological standpoint not to have to rely 0:03:39.000 --> 0:03:40.400 on rare earths for some of these things. 0:03:40.560 --> 0:03:42.839 We are going to reduce our reliance. I mean, never 0:03:42.960 --> 0:03:46.480 underestimate the power of American innovation. We created a vaccine 0:03:46.560 --> 0:03:48.920 for a virus that we didn't know anything about a 0:03:49.360 --> 0:03:51.520 year and a half prior to that. So we will 0:03:51.560 --> 0:03:54.760 absolutely see I think a reduction in our reliance on 0:03:54.800 --> 0:03:57.600 them number one, in terms of how much we need them. 0:03:57.800 --> 0:04:01.320 We're starting to create engines without them. However, that is 0:04:01.360 --> 0:04:04.000 a process. The second thing we're going to start to 0:04:04.040 --> 0:04:08.240 see is more capabilities come online outside of China. We soft, 0:04:08.240 --> 0:04:11.120 for example, that Linus is now starting to produce small 0:04:11.160 --> 0:04:13.320 scale at its facility in Malaysia. 0:04:13.680 --> 0:04:15.680 The US is kind of trying to warp speed our 0:04:15.720 --> 0:04:19.280 own facilities in California and Texas. So innovation is going 0:04:19.320 --> 0:04:20.080 to be a huge. 0:04:19.839 --> 0:04:22.920 Part of reducing our reliance and increasing our capabilities. 0:04:23.200 --> 0:04:25.920 All right, but how quickly does all that happen? Because 0:04:25.960 --> 0:04:28.640 I think the other thing we followed up with him 0:04:28.800 --> 0:04:31.000 our desk Garrent, is that none of this is going 0:04:31.040 --> 0:04:33.600 to happen overnight, right, So how long does it take 0:04:33.640 --> 0:04:36.200 to kind of make the switch? And then in the meantime, 0:04:36.839 --> 0:04:39.240 how much are we still reliant on China or how 0:04:39.279 --> 0:04:41.359 long will we probably be relying on China? 0:04:42.200 --> 0:04:44.039 I mean, we're going to be relying on China at 0:04:44.080 --> 0:04:46.520 some level in my opinion. I know opinions vary on 0:04:46.560 --> 0:04:49.560 this for probably a few years. In terms of being able. 0:04:49.400 --> 0:04:51.920 To meet all of our capabilities, we have to remember 0:04:52.000 --> 0:04:54.640 this isn't just a problem of capital. In December twenty 0:04:54.680 --> 0:04:59.280 twenty three, China actually banned the export of processing technologies 0:05:00.080 --> 0:05:02.320 parts of this supply chain. We actually realized we didn't 0:05:02.320 --> 0:05:04.600 even have the technical know how in terms of how 0:05:04.600 --> 0:05:07.840 to do those midstream. So one is building the technical 0:05:07.920 --> 0:05:10.480 know how and that takes a bit of time, it's expensive. 0:05:11.160 --> 0:05:14.400 So realistically, even if we start to be able to 0:05:15.200 --> 0:05:17.279 get off take by the end of the year through 0:05:17.320 --> 0:05:23.640 domestic capabilities and potentially through non Chinese foreign sources before 0:05:23.760 --> 0:05:29.159 we are comfortably reliant on non Chinese capabilities for probably 0:05:29.200 --> 0:05:29.839 a few years. 0:05:30.360 --> 0:05:33.320 Gracelyn, how much of this is an environmental story? To 0:05:33.640 --> 0:05:36.560 what extent is the processing of rare or something that's 0:05:36.560 --> 0:05:39.240 done in China because other countries didn't want to deal 0:05:39.520 --> 0:05:41.880 with the environmental consequences of this. 0:05:42.400 --> 0:05:45.240 The environment is no doubt one of the challenge challenges 0:05:45.279 --> 0:05:48.640 that has limited other countries from developing the capabilities. 0:05:48.680 --> 0:05:50.479 You know, we use the term nimb not in my 0:05:50.600 --> 0:05:52.760 backyard because sometimes. 0:05:52.400 --> 0:05:54.120 We don't want these things in our backyard and we're 0:05:54.200 --> 0:05:56.320 very happy for them to be done far away. 0:05:56.640 --> 0:05:59.200 So that was certainly one component. The second thing I 0:05:59.240 --> 0:06:01.520 want to add to the environment component. 0:06:01.440 --> 0:06:05.040 Is generally the United States has deprioritized mining over the 0:06:05.040 --> 0:06:08.839 better part of several decades. Between the nineteen fifties and 0:06:08.880 --> 0:06:11.599 the nineteen nineties, the US was actually the top rare 0:06:11.640 --> 0:06:14.320 earth producer in the world. We were the top uranian 0:06:14.400 --> 0:06:16.960 producer in the world. We had a Bureau of Mind 0:06:17.040 --> 0:06:19.600 that was responsible in government for coordinating all of our 0:06:19.600 --> 0:06:20.480 mining activities. 0:06:20.880 --> 0:06:22.760 We closed that in nineteen ninety six. 0:06:22.880 --> 0:06:25.200 We seeded a lot of our advantages to China and 0:06:25.240 --> 0:06:29.000 Russia during this time, and that's how they really created 0:06:29.040 --> 0:06:32.359 a dominant position where the US once was. So the 0:06:32.480 --> 0:06:36.760 environmental challenges certainly slow down permitting and some of these 0:06:36.760 --> 0:06:39.640 other dimensions of mining, but we also have to remember 0:06:39.680 --> 0:06:42.760 there was a broader government deprioritization of the agenda, which 0:06:42.800 --> 0:06:44.800 is how we found ourselves where we are today. 0:06:45.000 --> 0:06:46.560 Well, that's what I was going to ask you. Was 0:06:46.600 --> 0:06:50.920 it because the government wasn't prioritizing Was it because companies, 0:06:51.240 --> 0:06:54.240 you know, really concerned about the bottom line and profitability 0:06:54.279 --> 0:06:56.479 and making money that they said China can do it 0:06:56.520 --> 0:06:58.720 more cheaply and more easily for us? Is it because 0:06:58.760 --> 0:07:01.400 we didn't have the labor pool? Why was it that 0:07:01.440 --> 0:07:07.240 the US went from being a leader to basically, you know, 0:07:07.320 --> 0:07:09.320 now it's China as the leader when it comes to 0:07:09.360 --> 0:07:10.200 rare earth minerals. 0:07:10.560 --> 0:07:12.680 So if this was a multiple choice exam, all of 0:07:12.680 --> 0:07:14.440 the above, I hope would be one option. 0:07:14.920 --> 0:07:16.800 But there's a few things right, So when. 0:07:16.640 --> 0:07:21.240 The government deprioritizes something, it creates a negative signal as 0:07:21.240 --> 0:07:23.960 a result of government deprioritizing it, and a lot of 0:07:23.960 --> 0:07:27.680 this moving offshore to China, Russia, Australia. 0:07:27.720 --> 0:07:30.480 Over time, then mine engineering. 0:07:29.960 --> 0:07:33.880 Programs have less, you know, less need to produce mine 0:07:33.920 --> 0:07:36.960 engineers and other skilled labor for mining operations, so. 0:07:36.920 --> 0:07:39.600 We have a huge workforce shortage here in the United States. 0:07:39.880 --> 0:07:42.960 Along with that, again, it is much cheaper to do 0:07:43.040 --> 0:07:46.560 it in China, where there are low environmental standards, where 0:07:46.680 --> 0:07:49.320 labor is much cheaper. If you go to a mine 0:07:49.360 --> 0:07:51.560 in Montana, you're not going to have a worker making 0:07:51.640 --> 0:07:53.240 under one hundred and twenty thousand dollars. 0:07:53.760 --> 0:07:54.760 We don't have to pay. 0:07:54.560 --> 0:07:57.440 A worker in China that same amount, So basically the 0:07:57.560 --> 0:07:58.960 overall production. 0:07:59.160 --> 0:08:02.600 Costs fell to That was Graceland Baskren, director of the 0:08:02.680 --> 0:08:05.640 Critical Mineral Security Program at the Center for Strategic and 0:08:05.760 --> 0:08:06.800 International Studies. 0:08:06.960 --> 0:08:10.240 We should point out after our conversation Bloomberg News reporting 0:08:10.280 --> 0:08:12.800 that the Trump administration is developing a plan to use 0:08:12.840 --> 0:08:16.720 Cold War era powers to prioritize and fund rare earth 0:08:16.800 --> 0:08:19.960 projects it deems critical to national security, and that is 0:08:20.000 --> 0:08:22.120 according to people familiar with the matter. You can check 0:08:22.160 --> 0:08:24.480 out the entire story find it on the Bloomberg and 0:08:24.520 --> 0:08:28.120 at Bloomberg dot com. So while trade talks dominated the 0:08:28.120 --> 0:08:31.280 overall news cycle this past week, one top business story 0:08:31.280 --> 0:08:34.319 for US was about one of the world's largest marketcap companies, 0:08:34.320 --> 0:08:36.280 and yes, it's definitely a household name. 0:08:36.640 --> 0:08:40.640 Apple hosted its annual Worldwide Developers Conference in Cooper Tino, 0:08:40.800 --> 0:08:45.520 also known as WWDC. The company unveiled its biggest redesign 0:08:45.559 --> 0:08:48.960 of its operating system in years. It's called Liquid Glass. 0:08:49.160 --> 0:08:51.640 Not a big surprise since Bloomberg's Mark Gerrman had reported 0:08:51.679 --> 0:08:53.440 a lot of the details in the weeks leading up 0:08:53.520 --> 0:08:56.040 to the conference and got to say, investor is not 0:08:56.080 --> 0:08:58.640 too impressed as well, as they sent shares of Apple 0:08:59.000 --> 0:09:00.800 lower during the event keynote. 0:09:00.920 --> 0:09:03.280 For more on Apple's new look and what we learned 0:09:03.280 --> 0:09:07.880 at WWDC, we spoke with Bloomberg Technology co host ed Ludlow, 0:09:08.080 --> 0:09:10.079 who was at the conference in Cooper Tino. 0:09:10.600 --> 0:09:12.959 You know, you have to remember this is Apple WWDC. 0:09:13.120 --> 0:09:15.520 It is a developers conference. A lot of what is 0:09:15.640 --> 0:09:19.360 announces targeted at a group of people who are critically 0:09:19.400 --> 0:09:23.280 important in contributing to Apple's ecosystem. But it was almost 0:09:23.320 --> 0:09:25.240 kind of like a sell the news kind of event, 0:09:25.360 --> 0:09:28.600 both because a lot of what we heard Mark German 0:09:28.640 --> 0:09:32.720 had already reported. We all know that, and also because 0:09:33.120 --> 0:09:36.000 you know, expectations that Apple at some point is going 0:09:36.040 --> 0:09:39.040 to give us a lot more on AI. Those expectations 0:09:39.040 --> 0:09:40.160 weren't met clearly. 0:09:40.559 --> 0:09:43.240 Hey, let's stick on the liquid glass portion of this. 0:09:43.480 --> 0:09:46.400 My question then, in my question now after it being unveiled, 0:09:46.480 --> 0:09:49.120 is is there a learning curve here for consumers? We've 0:09:49.120 --> 0:09:51.960 seen mistakes that Apple's made in the past with redesigns 0:09:52.000 --> 0:09:54.920 Apple Maps more than a decade ago certainly comes to 0:09:54.960 --> 0:09:57.400 mind there. But but is this going to be a 0:09:57.440 --> 0:09:59.439 learning curve? Like how different is this going to be 0:09:59.480 --> 0:10:01.440 as an experien I mean, they're over a billion iOS 0:10:01.559 --> 0:10:03.800 users out there. They're going to have to get used 0:10:03.840 --> 0:10:04.120 to those. 0:10:04.720 --> 0:10:07.760 Yes, but a billion iOS users. But you have to 0:10:07.760 --> 0:10:09.920 think about it in the aggregate of people that use 0:10:09.960 --> 0:10:13.280 a broader Apple ecosystem, so a lot of liquid glasses. 0:10:13.320 --> 0:10:15.440 Its piration comes from the work that app we're done 0:10:15.440 --> 0:10:19.240 with vision Pro, you know, literally the UI and UX 0:10:19.280 --> 0:10:22.400 of that experience using vision Pro, the translucency of it. 0:10:22.880 --> 0:10:25.280 And so by making it uniform, you know, having the 0:10:25.320 --> 0:10:29.000 same look across iPhone, mac iPad os and vision Pro 0:10:29.080 --> 0:10:31.360 and watch, you know, it just makes you more familiar 0:10:31.720 --> 0:10:34.920 and I guess open to using the full hardware suite 0:10:34.960 --> 0:10:39.679 of products, let alone the software suite of products. But again, like, 0:10:39.960 --> 0:10:43.120 this is a stock that's been driven by trade headline, 0:10:43.200 --> 0:10:46.440 trade risk, tariff risk. But it's a company who, like 0:10:46.640 --> 0:10:48.800 will tell you timetime again that they're just focused on 0:10:48.840 --> 0:10:54.120 iteration design, you know, executing on making things beautiful every year. 0:10:54.640 --> 0:10:57.640 And the problem is that last year twenty twenty four, 0:10:57.880 --> 0:10:59.760 and indeed the year prior when they announced the vision 0:10:59.760 --> 0:11:02.000 pro So this event the reason I'm here, all of 0:11:02.080 --> 0:11:05.000 us gathered at WWDC, there was much more of a clear, 0:11:05.040 --> 0:11:08.280 tangible news catalyst around it. This kind of goes back 0:11:08.320 --> 0:11:10.280 to what WWC has always been, which has been for 0:11:10.320 --> 0:11:13.680 the people, the community that build for Apple, for the 0:11:13.679 --> 0:11:15.520 App store and for all of those devices. 0:11:15.800 --> 0:11:18.640 Okay, and that's I guess part of the value of 0:11:18.679 --> 0:11:22.360 going to WWDC, right ed, is kind of talking to 0:11:22.400 --> 0:11:25.800 some of these developers, feeling the mood about what they 0:11:25.840 --> 0:11:28.319 are saying. So what are you hearing from them? These 0:11:28.320 --> 0:11:31.040 are the kind of insiders, right So I'm just curious. 0:11:31.120 --> 0:11:33.760 So yeah, we actually did get some AI news, and 0:11:33.800 --> 0:11:36.000 that piece of news was that Apple is going to 0:11:36.080 --> 0:11:39.560 open up its on device LMS, Apple's own work in 0:11:39.640 --> 0:11:43.640 proprietary models to the developer community. The reason that that's 0:11:43.679 --> 0:11:46.440 a substantive piece of news is that's exactly how it 0:11:46.559 --> 0:11:50.360 works with open ai and Microsoft and Google and the 0:11:50.400 --> 0:11:53.160 Gemini teams. A lot of the success they've had in 0:11:53.240 --> 0:11:57.920 basically commercializing that technology is to say to developers, have 0:11:58.040 --> 0:12:00.920 at it. Here's the underlying model. Use it to make 0:12:00.960 --> 0:12:03.959 whatever you want to do better. And that makes the 0:12:04.000 --> 0:12:06.480 iOS as an example, more appealing. So that was a 0:12:06.480 --> 0:12:07.760 big step forward today. 0:12:08.280 --> 0:12:08.920 But to the. 0:12:08.880 --> 0:12:11.200 Outside of the investor community, all of us that are 0:12:11.200 --> 0:12:14.120 consumers that have iPhones, there wasn't something there for us 0:12:14.120 --> 0:12:16.559 in that respect. And what was so interesting is that 0:12:16.640 --> 0:12:19.679 sort of dropping the stock at the start of the keynote. 0:12:19.800 --> 0:12:20.960 It actually. 0:12:22.040 --> 0:12:25.839 Coincided with Craig Federigi, that the Services software chief, saying 0:12:26.280 --> 0:12:27.760 we will have a lot more to talk about with 0:12:27.920 --> 0:12:31.600 Siri later, you know, because this had nothing to do 0:12:31.720 --> 0:12:34.080 with that the way that one as a consumer interacts 0:12:34.080 --> 0:12:35.120 with their phone right now. 0:12:35.280 --> 0:12:39.480 Later, how much later, I mean, our investors and members 0:12:39.480 --> 0:12:43.640 of the developer community still waiting for a SERI that 0:12:43.840 --> 0:12:47.160 is as smart as some of these virtual assistance that 0:12:47.200 --> 0:12:49.080 we've seen from LMS at this point. 0:12:49.320 --> 0:12:52.240 Yeah, it's interesting, like you know, I'm here at WWDC, 0:12:52.320 --> 0:12:54.320 but I still was following what German was putting in 0:12:54.320 --> 0:12:56.160 the blog in real time, and he made the point 0:12:56.200 --> 0:12:59.959 at the end that Craig was kind of at pain 0:13:00.160 --> 0:13:03.200 to point out, this is what is new with Apple Intelligence. 0:13:03.240 --> 0:13:05.880 Here are all of the things that Apple Intelligence can do, 0:13:06.000 --> 0:13:07.920 rather than you're going to have to wait till later 0:13:07.920 --> 0:13:09.880 in the year to get more functionality out of it. 0:13:10.320 --> 0:13:12.079 On the other hand, like one of the things we 0:13:12.160 --> 0:13:14.680 got today was live translation in the I message and 0:13:14.720 --> 0:13:16.600 cool context but also through AirPods. 0:13:16.640 --> 0:13:18.480 Right, But I even get. 0:13:18.280 --> 0:13:19.720 Like a sense of deja vous when I was at 0:13:19.760 --> 0:13:24.040 metaconnect at last fall. You know, Mark Zuckerberg was there 0:13:24.040 --> 0:13:27.360 on stage with his Rayvan Metas demoing exactly the same thing. 0:13:27.679 --> 0:13:30.200 You know, the ability to live translate in a nation 0:13:30.360 --> 0:13:33.480 like America where many people are bilingual. It's awesome when 0:13:33.520 --> 0:13:35.440 you consider the number of people that use an iPhone 0:13:35.480 --> 0:13:38.319 and are on the iOS system or macros or iPad os. 0:13:38.480 --> 0:13:40.520 But it ain't that new, and all the other technology 0:13:40.520 --> 0:13:42.680 companies are doing it as well, and that's kind of 0:13:42.679 --> 0:13:44.640 the frustration. It's like, give me the all singing, all 0:13:44.720 --> 0:13:48.120 dancing version of Apple Intelligence, which we interact with through 0:13:48.160 --> 0:13:50.760 Siri principally, and that's the bit you're going to wait for. 0:13:50.800 --> 0:13:52.720 And I didn't answer your question to him because they 0:13:52.720 --> 0:13:54.199 didn't say later in the year. 0:13:54.320 --> 0:13:57.000 No, that's it, that's okay, that's okay. I mean, look, 0:13:57.000 --> 0:13:59.560 it's a question that you know, nobody really has an 0:13:59.559 --> 0:14:01.880 answer for. Maybe Apple doesn't even know at this point. 0:14:02.760 --> 0:14:05.120 Well wait, it's kind of like, hey, Siri, like, what 0:14:05.200 --> 0:14:06.040 are you going to get better? 0:14:06.080 --> 0:14:09.600 Okay, Okay, let's not make everyone's phone freak out. Carol Masser, Hey, 0:14:10.000 --> 0:14:12.760 ed before we let you go, You've been to a 0:14:12.760 --> 0:14:16.400 lot of these events, and as you mentioned, this is 0:14:16.400 --> 0:14:20.840 one for the developer community and Apple's app store and 0:14:20.920 --> 0:14:22.640 what you can do on an Apple device would be 0:14:22.680 --> 0:14:25.920 nothing without the developer community. Have you had a chance 0:14:26.000 --> 0:14:29.440 to hear from any developers, to speak to anybody who's 0:14:29.440 --> 0:14:31.440 attending this and just get an understanding for what the 0:14:31.520 --> 0:14:34.440 vibes are in twenty twenty five when it comes to 0:14:34.440 --> 0:14:35.920 the developer community. 0:14:35.840 --> 0:14:36.600 So literally. 0:14:36.640 --> 0:14:39.360 We had a guy called Paul Hudson on the show earlier. 0:14:39.400 --> 0:14:42.600 He is the creator of hacking for Swift, Swift being 0:14:42.640 --> 0:14:48.080 the platform that many used to code for OS application 0:14:48.160 --> 0:14:50.840 and OS software and kind of what we've gone over 0:14:51.000 --> 0:14:54.080 is exactly why he was excited that. You know, when 0:14:54.080 --> 0:14:58.000 you build for one of the Apple operating systems, you 0:14:58.120 --> 0:15:00.680 usually use an Apple tool to do so, and he's 0:15:00.760 --> 0:15:02.440 you know, it was pretty jazz and excited. A lot 0:15:02.480 --> 0:15:05.600 of people look at Craig federigas like the man, the 0:15:05.720 --> 0:15:10.360 rock star, the silver Fox of software, and on stage, 0:15:10.520 --> 0:15:13.120 you know, they got what they were asking for to 0:15:13.120 --> 0:15:16.080 some sense that like having on device LLM access is 0:15:16.160 --> 0:15:18.280 huge for a lot of developers. It just makes their 0:15:18.320 --> 0:15:21.320 life in doing something easier. But the root of your 0:15:21.360 --> 0:15:23.600 question is the most important bit. We have the App 0:15:23.600 --> 0:15:26.760 store today for a reason. It is attractive to consumers, 0:15:26.760 --> 0:15:28.560 and there are lots of apps there that are made 0:15:28.560 --> 0:15:31.120 by third party developers. You know, I'm trying to think 0:15:31.160 --> 0:15:32.840 of a great example that Apple didn't make and someone 0:15:32.880 --> 0:15:35.320 else did, but you get the idea. And that's why 0:15:35.440 --> 0:15:38.760 all of this kind of update today is tracked because 0:15:38.800 --> 0:15:41.520 it adds value to the broader services and ecosystem offering 0:15:41.520 --> 0:15:42.160 that Apple has. 0:15:42.360 --> 0:15:46.520 All Right, basic metric, you got Apple shares down nineteen 0:15:46.560 --> 0:15:49.240 percent year to date, Look at something like meta it's 0:15:49.280 --> 0:15:52.240 actually up nineteen percent year to date. Yeah, what is 0:15:52.280 --> 0:15:55.480 it that the investment community really wants to see from 0:15:55.480 --> 0:15:57.080 Apple to give it some love. 0:15:57.400 --> 0:15:59.520 So I'm actually just pulling chat GPT up on my 0:15:59.640 --> 0:16:02.480 phone because I was talking to chat GBT about this earlier. 0:16:02.680 --> 0:16:05.160 Fewer than sixty percent of analysts rate Apple, are by 0:16:05.400 --> 0:16:08.280 the lowest among its big tech peers. Apple's AI efforts 0:16:08.280 --> 0:16:11.280 are seen as safe by analysts. Reminder, it trades at 0:16:11.280 --> 0:16:14.400 twenty seven times earnings, which is slightly off its historic high. 0:16:14.760 --> 0:16:17.320 The point is this, so far this year it hasn't traded. 0:16:17.400 --> 0:16:19.560 I know, it's just so much fun to like use 0:16:19.600 --> 0:16:22.280 this as a tool, you know, in putting data from 0:16:22.320 --> 0:16:25.480 the Bloomberg But like, so far this year, that nineteen percent, 0:16:25.480 --> 0:16:27.760 it has nothing to do really with the AI stories. 0:16:27.800 --> 0:16:30.080 You guys know, it's tariff for risk, the relationship with 0:16:30.120 --> 0:16:32.200 the administration and the presidents of the President of the 0:16:32.280 --> 0:16:34.640 United States. But the risk going into today and what 0:16:34.720 --> 0:16:37.680 was almost confirmed in the early minutes of that keynote 0:16:37.720 --> 0:16:40.200 was well, what if AI does become the key risk 0:16:40.240 --> 0:16:42.720 of the stock because investors lose patients and they say, 0:16:42.800 --> 0:16:44.960 we want to see something more tangible. It's a little 0:16:45.040 --> 0:16:47.480 unfair because I don't think we went into today, thinking 0:16:47.520 --> 0:16:49.880 we would get anything like that. It was really clear 0:16:49.920 --> 0:16:51.080 what we were going to get. It was for the 0:16:51.080 --> 0:16:52.800 developer community, and we did get it. 0:16:54.200 --> 0:16:56.240 And we do have some extra time with you, which 0:16:56.280 --> 0:17:00.160 were grateful for and you're you know, you work, keep 0:17:00.200 --> 0:17:01.960 in the seats warm for you here in the San 0:17:02.000 --> 0:17:08.280 Francisco studio. Liquid glass. You know one thing that Apple 0:17:08.400 --> 0:17:09.960 is trying to figure out, and I think it's fair 0:17:10.000 --> 0:17:12.359 to say every consumer tech company is trying to figure 0:17:12.359 --> 0:17:16.040 that out. Is the form factor for the must have 0:17:16.200 --> 0:17:17.920 device of the future. 0:17:18.119 --> 0:17:18.679 You've talked a. 0:17:18.680 --> 0:17:21.840 Lot about where humane did not work. We've talked to 0:17:21.880 --> 0:17:24.160 you a lot about what we could see from Sam 0:17:24.200 --> 0:17:28.159 Altman and Johnny Ives. When it comes to what you 0:17:28.200 --> 0:17:31.280 saw with liquid glass, does it give any indication as 0:17:31.320 --> 0:17:32.720 to how Apple is thinking about this? 0:17:33.840 --> 0:17:34.440 It does. 0:17:34.520 --> 0:17:34.720 Look. 0:17:34.760 --> 0:17:38.560 Look, what Mark Gumman's reported is that the seventeen generation 0:17:38.640 --> 0:17:41.960 of iPhone will have glass curve size with no sort 0:17:42.000 --> 0:17:47.120 of screen border, right. And liquid glass is a concept, 0:17:47.160 --> 0:17:49.359 the kind of translucency of it, the way that you 0:17:49.800 --> 0:17:52.600 whatever is in the almost the foreground of your your 0:17:52.600 --> 0:17:55.720 smartphone screen or iPad screen is not interrupted by what's 0:17:56.080 --> 0:17:59.280 popping up. We think that there will be some hardware 0:17:59.359 --> 0:18:01.760 toiration on that to come. But you do raise a 0:18:01.760 --> 0:18:05.520 really good point, which is why have liquid glass uniform 0:18:05.560 --> 0:18:08.879 across all devices? Because increasingly it's not the be all 0:18:08.920 --> 0:18:10.680 and end all. The thing that's in my right hand 0:18:10.720 --> 0:18:13.480 a smartphone. It is that I take messages on my 0:18:13.520 --> 0:18:17.119 Apple Watch. Other smart watches are available, I take, you know, 0:18:17.240 --> 0:18:20.760 different platforms that I rely on OS for on my MacBook. 0:18:20.920 --> 0:18:23.520 Other laptops are available, et cetera. You know, it's just 0:18:23.640 --> 0:18:25.640 a way of making it more uniforms. So I think 0:18:25.680 --> 0:18:29.000 that there's definitely acknowledgement there. Whether the iPhone seventeen has 0:18:29.040 --> 0:18:31.960 the features that Mark reported, we shall wait and see, 0:18:31.960 --> 0:18:34.479 but there was certainly a nod to that during the keynote, 0:18:34.520 --> 0:18:36.760 even if they didn't explicitly sail by the way, the 0:18:36.760 --> 0:18:39.080 next version of the iPhone it's definitely going to leverage 0:18:39.080 --> 0:18:40.400 this liquid glass concept. 0:18:40.640 --> 0:18:42.400 Great stuff, ed Thank you so much. 0:18:42.880 --> 0:18:45.000 We know a busy day, early day, Edla though, of course, 0:18:45.040 --> 0:18:47.720 co host of Bloomberg Technology out there at Apple headquarters 0:18:48.160 --> 0:18:52.120 in Kupertino, California. Of course, at the Worldwide Developers Conference. 0:18:57.960 --> 0:19:01.320 You are listening to the Bloomberg Business Week Daily podcast. 0:19:01.520 --> 0:19:05.080 Catch us live weekday afternoons from two to five pm Eastern. 0:19:05.200 --> 0:19:09.080 Listen on Applecarplay and Android Auto with the Bloomberg Business app, 0:19:09.240 --> 0:19:11.840 or watch us live on YouTube. 0:19:12.280 --> 0:19:15.600 President Trump's immigration crackdown was definitely top of mind this 0:19:15.680 --> 0:19:18.439 past week. The administration's pushed to ramp up arrests and 0:19:18.480 --> 0:19:22.840 deportations led to protests bringing up across LA and to 0:19:23.000 --> 0:19:23.720 other cities. 0:19:24.200 --> 0:19:26.840 The big push for more arrests means there's a growing 0:19:26.920 --> 0:19:30.280 need for detention centers, and in several towns across the country, 0:19:30.359 --> 0:19:32.320 private facilities are picking up the slack. 0:19:32.520 --> 0:19:36.159 It's interesting to consider that while some communities, including LA, 0:19:36.640 --> 0:19:41.320 are demonstrating how much they dislike the immigration policies, politicians 0:19:41.320 --> 0:19:44.560 and leaders and communities that have these private detention centers, 0:19:44.840 --> 0:19:46.120 some of them feel differently. 0:19:46.520 --> 0:19:50.040 Bloomberg News Investigations reporter Rachel Adams heard was behind a 0:19:50.080 --> 0:19:53.960 big take on the budding deportation economy. She recently joined 0:19:54.040 --> 0:19:57.040 Carol and Me to discuss what she learned about these 0:19:57.040 --> 0:20:01.160 so called ice towns. Welcome to a Mana's ice towns. 0:20:01.520 --> 0:20:04.560 These are communities convinced that their financial survival depends on 0:20:04.640 --> 0:20:07.959 locking people up. It's not a new phenomenon. In this 0:20:08.000 --> 0:20:10.919 iteration of the classic prison town, though, Carol, many of 0:20:10.920 --> 0:20:13.920 the people behind bars haven't been convicted of crimes. 0:20:14.040 --> 0:20:17.119 Let's get to this Bloomberg BusinessWeek story. It is, I 0:20:17.119 --> 0:20:19.600 guess you could say, a slice of life in America, 0:20:20.359 --> 0:20:22.840 but not necessarily a good one. But let's get into 0:20:22.880 --> 0:20:26.320 it with Bloomberg News Investigations reporter Rachel Adams heard she 0:20:26.440 --> 0:20:29.000 joins us from our Houston bureau. Rachel, good to have 0:20:29.080 --> 0:20:31.480 you here. What is an ice town? 0:20:33.320 --> 0:20:38.840 So, an ice town is a town where the local politicians, 0:20:38.920 --> 0:20:43.200 local community is convinced that they need these immigration detention 0:20:43.359 --> 0:20:47.800 facilities that operate under these lucrative contracts with ICE in 0:20:47.920 --> 0:20:52.080 order to be financially sound. A lot of these towns 0:20:52.119 --> 0:20:55.679 they've had a private jail or private prison detention facility 0:20:56.000 --> 0:21:01.359 for decades, and with Obama era sentencing reform, the federal 0:21:01.400 --> 0:21:06.040 prison population dropped off, and so to keep these facilities profitable, 0:21:06.440 --> 0:21:10.359 they signed contracts with ICE. And now we're seeing just 0:21:10.480 --> 0:21:12.800 a huge influx in the number of people detained at 0:21:12.840 --> 0:21:17.520 those facilities under the Trump administration's, you know, mass deportation agenda. 0:21:18.640 --> 0:21:22.240 So, Rachel, take us too one of these ice towns. 0:21:22.600 --> 0:21:24.000 Torrence County, New Mexico. 0:21:24.720 --> 0:21:28.080 Yeah, so we went to Torrance County, New Mexico, and 0:21:28.280 --> 0:21:31.440 at the end of March, that's when the County Commission 0:21:31.520 --> 0:21:35.400 was voting to extend this contract. And it's a really 0:21:35.480 --> 0:21:38.760 rural community. It's one of those areas that used to 0:21:38.800 --> 0:21:41.520 be kind of this bustling hub thanks to the New 0:21:41.520 --> 0:21:44.640 Mexico Central Railroad. You had people from all over who 0:21:44.640 --> 0:21:48.600 would come through towns like Estancia where this detention facility 0:21:48.640 --> 0:21:52.440 is located. But then inter State forty is built and 0:21:52.960 --> 0:21:58.120 commerce really just drops off. And so during the Reagan administration, 0:21:58.359 --> 0:22:01.840 when you're seeing these policies like the War on Drugs 0:22:01.840 --> 0:22:07.280 that's massively expanding detention in America, there are these private 0:22:07.280 --> 0:22:11.400 prison companies that want to get a piece of that business, 0:22:11.960 --> 0:22:14.280 and New Mexico was a great place for that for them. 0:22:14.359 --> 0:22:17.439 Because land was cheap, they could build these really big 0:22:17.480 --> 0:22:21.440 detention facilities by the standards of the time, and so 0:22:21.480 --> 0:22:27.159 that's what happened in Astancia. Corcivic then Corrections Corporation of America, 0:22:27.520 --> 0:22:30.520 built a facility outside of town at the time. It's 0:22:30.520 --> 0:22:35.040 since been annexed into the town, and things were pretty 0:22:35.040 --> 0:22:38.840 good for a while. It employed people. Business was good 0:22:38.920 --> 0:22:43.200 for Corcivic, but then around twenty sixteen you had the 0:22:43.520 --> 0:22:47.720 federal prisoner population drop off and that's when the facility 0:22:48.200 --> 0:22:51.199 ended up closing and Corsific said it was no longer profitable. 0:22:52.280 --> 0:22:55.000 And then ICE came in to basically save the day 0:22:55.080 --> 0:23:01.240 for Corcivic and offered this contract that guaranteed revenue every 0:23:01.280 --> 0:23:04.600 single month whether or not there were any ICE detainees 0:23:04.640 --> 0:23:07.760 in those beds, and that's the contract that allows the 0:23:07.800 --> 0:23:09.240 facility to operate today. 0:23:10.000 --> 0:23:13.240 So just to set the record straight, I mean, these 0:23:13.240 --> 0:23:16.320 are facilities that have been around for a long time, 0:23:16.480 --> 0:23:22.720 different administrations, correct, Correct, Okay, And the point is too though, 0:23:22.760 --> 0:23:27.800 that the conditions aren't great and they're needed in order 0:23:27.880 --> 0:23:31.160 to house kind of the roundup that is happening under 0:23:31.200 --> 0:23:32.120 this administration. 0:23:32.320 --> 0:23:32.720 Correct. 0:23:33.920 --> 0:23:36.880 So, during the last ten years or I guess five 0:23:36.960 --> 0:23:41.159 years since this contract has been in place in Torrents County, 0:23:41.480 --> 0:23:44.840 a lot of the people that it was detaining on 0:23:44.960 --> 0:23:45.840 behalf of ICE. 0:23:46.240 --> 0:23:48.040 They were recent border crossers. 0:23:48.080 --> 0:23:51.160 These were people who were coming up the border from 0:23:51.200 --> 0:23:54.960 Mexico a lot of times into Texas. They were seeking asylum, 0:23:55.000 --> 0:23:57.239 and while they were seeking asylum, they had you know, 0:23:57.280 --> 0:23:59.800 turned themselves over in a lot of cases, and now 0:23:59.840 --> 0:24:02.240 they were in ice detention, being held at the Torrens 0:24:02.280 --> 0:24:06.879 County Detention Facility and Astancia. After Trump took office, you 0:24:06.960 --> 0:24:09.320 see a really dramatic fall off in the number of 0:24:09.359 --> 0:24:11.639 people crossing the border. And so all of a sudden 0:24:11.680 --> 0:24:14.919 you have room in the Torrens County Detention Facility. And 0:24:15.000 --> 0:24:18.320 so because you have this room, you're seeing ice flying 0:24:18.359 --> 0:24:21.000 people from all over the country, a lot of them 0:24:21.000 --> 0:24:24.080 coming from New Jersey, from Florida, and they're flown into 0:24:24.119 --> 0:24:26.919 the Albuquerque Airport and bust to the Torrents County Detention 0:24:27.040 --> 0:24:30.600 Facility and that is where they're being held for months 0:24:30.600 --> 0:24:34.240 in a lot of cases. And this facility has had 0:24:34.320 --> 0:24:38.959 problems for the last several years, and it's really starting 0:24:39.000 --> 0:24:42.280 to kind of come to a head with the increase 0:24:42.280 --> 0:24:44.560 in the number of people that is holding under the 0:24:44.560 --> 0:24:45.480 Trump administration. 0:24:45.680 --> 0:24:50.040 Okay, well, you describe the facilities at least one of them. 0:24:50.359 --> 0:24:51.040 What was it like? 0:24:51.760 --> 0:24:52.399 What is it like? 0:24:54.200 --> 0:24:57.200 I mean, what we've heard from people who are currently 0:24:57.240 --> 0:25:01.560 being detained at the facility is that it's cold, the 0:25:01.600 --> 0:25:06.320 food is undercooked, inedible at times. We've heard complaints about 0:25:06.320 --> 0:25:09.480 access to medical care. There are a lot of people 0:25:09.480 --> 0:25:12.159 who say that they have tried to ask to be 0:25:12.240 --> 0:25:14.920 deported because they do not want to spend another day 0:25:15.000 --> 0:25:18.120 in iceed attention, but that it's incredibly difficult to get 0:25:18.119 --> 0:25:21.359 the attention of any ICE officers because it's all you know, 0:25:21.760 --> 0:25:24.800 prison staff, not necessarily anyone who can actually talk to 0:25:24.840 --> 0:25:29.679 them about their case. But the most dramatic issue that 0:25:29.680 --> 0:25:31.680 we've heard about recently had to do. 0:25:31.720 --> 0:25:32.760 With the water supply. 0:25:33.520 --> 0:25:36.520 This is the desert, it's incredibly dry, and the town 0:25:36.560 --> 0:25:39.240 of Astancia was having an issue with one of its 0:25:39.280 --> 0:25:43.280 main water pumps, and so that led to water being 0:25:43.680 --> 0:25:47.880 intermittently shut off to the facility. We heard that there 0:25:47.920 --> 0:25:51.400 were toilets that were overflowing, and that there was feces 0:25:51.440 --> 0:25:54.720 on the floor, that the smell was overwhelming. We heard 0:25:54.760 --> 0:25:56.800 people say that they had been limited at one point 0:25:56.800 --> 0:25:59.520 to two water bottles a day, that they were thirsty. 0:26:01.200 --> 0:26:05.480 At one point, the facility brought in trash cans full 0:26:05.520 --> 0:26:08.040 of waters to try to flush some of those toilets 0:26:08.080 --> 0:26:11.840 to deal with the odor and the hygiene issues, and 0:26:12.200 --> 0:26:14.960 someone we talked to said that he had seen people 0:26:14.960 --> 0:26:17.800 who were thirsty drink out of those trash cans because 0:26:17.800 --> 0:26:22.480 they were so desperate for water. So it sounds like 0:26:22.680 --> 0:26:26.360 this is improving over the last few days. We did 0:26:26.400 --> 0:26:29.880 hear that ice was on the ground recently, but certainly 0:26:30.000 --> 0:26:32.800 it sounds like it has been a rough couple of 0:26:32.800 --> 0:26:34.560 weeks inside the detention facility. 0:26:34.840 --> 0:26:37.280 It's interesting because I'm thinking Corcific, right, which is the 0:26:37.320 --> 0:26:41.159 company that's been around and is running these facilities, right, 0:26:41.200 --> 0:26:43.679 I guess it's close to four deck for four decades. 0:26:43.680 --> 0:26:45.200 It looks like I just. 0:26:45.200 --> 0:26:48.880 Remember that period and like investing like private prisons, everybody 0:26:48.880 --> 0:26:52.119 thought it was like this great investment play, but you 0:26:52.200 --> 0:26:55.959 got to remember it's people, it's humans. There are conditions. 0:26:56.320 --> 0:27:00.240 I am curious, like are these people being held for 0:27:00.320 --> 0:27:03.240 due processing? Like who determines the fate of these individuals 0:27:03.400 --> 0:27:05.120 is ultimately the federal government. 0:27:05.520 --> 0:27:07.239 I mean a lot of it is held up in 0:27:07.359 --> 0:27:11.440 immigration courts, and that's an incredibly slow moving process. So 0:27:11.480 --> 0:27:13.840 I'm sure you all know. One of the issues with 0:27:13.920 --> 0:27:18.280 these multi state transfers. I mean, people are thousands of 0:27:18.320 --> 0:27:21.640 miles away from their families, but they're also far away 0:27:21.680 --> 0:27:25.160 from their lawyers. If they had lawyers in Florida, for example, 0:27:25.200 --> 0:27:28.000 because their case was there and now all of a sudden, 0:27:28.000 --> 0:27:30.240 it's in New Mexico. They have to try to find 0:27:30.560 --> 0:27:32.879 a lawyer that can represent them in a different court, 0:27:32.960 --> 0:27:36.120 and that isn't always easy to do, especially because these 0:27:36.160 --> 0:27:39.800 tend to be more rural areas where pro bono lawyers 0:27:39.840 --> 0:27:42.720 are harder to come by, located farther away from the 0:27:42.760 --> 0:27:46.240 facilities themselves. So just the act of moving someone to 0:27:46.280 --> 0:27:49.919 a facility so far away, it does impact that person's 0:27:50.040 --> 0:27:51.280 right to do process. 0:27:51.880 --> 0:27:55.560 There's some context here and sort of like the internal 0:27:55.560 --> 0:27:58.359 workings of how these communities feel about these that I 0:27:58.400 --> 0:28:02.680 think is really interesting. In your county commissioners and how 0:28:02.720 --> 0:28:07.320 county commissioners look at this, you highlight Linda Yamario, who 0:28:07.400 --> 0:28:11.159 of the Torrance County Commission, who actually did go inside 0:28:11.520 --> 0:28:13.680 one of these facilities, and then you and the team 0:28:13.680 --> 0:28:17.200 wrote that she voted to extend the ice contract. Talk 0:28:17.240 --> 0:28:19.200 to us a little bit, and it's not really town 0:28:19.280 --> 0:28:22.240 gown relations, but it's the way that the community feels 0:28:22.240 --> 0:28:25.639 about this and the way that local elected officials feel 0:28:25.640 --> 0:28:26.160 about these. 0:28:27.680 --> 0:28:31.359 Yeah, it's really striking to sit in on these County 0:28:31.359 --> 0:28:34.280 commission meetings because you know the contract is up for 0:28:34.320 --> 0:28:38.880 an extension. Every so often, every several months, but no 0:28:38.920 --> 0:28:42.000 matter what, at every meeting which is held, you know, 0:28:42.080 --> 0:28:45.640 bi weekly, there are a bunch of lawyers and advocates 0:28:45.680 --> 0:28:51.000 and even people who are in detention who record testimonies 0:28:51.040 --> 0:28:54.920 that they play to the commissioners during public comment, urging 0:28:54.960 --> 0:28:59.640 them to shut down Torrance County Detention Facility for ice detention. 0:29:00.480 --> 0:29:02.520 And you have these three commissioners who sit at the 0:29:02.520 --> 0:29:04.800 front of the room and they're listening to this and 0:29:05.120 --> 0:29:08.520 some of the testimony is in Spanish, and Commissioner how 0:29:08.560 --> 0:29:11.800 Tomeo speak Spanish, and so you can kind of watch 0:29:11.800 --> 0:29:15.040 her face as she's listening to people describe the conditions 0:29:15.080 --> 0:29:19.080 inside the facility, and what she told people at that 0:29:19.240 --> 0:29:22.719 meeting in particular was, look, I hear all these concerns, 0:29:22.720 --> 0:29:25.520 but I don't know what to trust. And so she 0:29:25.800 --> 0:29:30.640 ended up voting to extend it. Sorry I lost my earpiece. 0:29:30.680 --> 0:29:34.600 But it's unclear whether she'll do that in October, because 0:29:34.640 --> 0:29:37.640 she did go again and say that that things seem 0:29:37.680 --> 0:29:40.400 to be going well, but she does still have concerns. 0:29:40.800 --> 0:29:40.960 You know. 0:29:41.080 --> 0:29:44.040 I think it's interesting and what I find fascinating is 0:29:44.040 --> 0:29:46.240 that this is a story that's got so many different 0:29:46.280 --> 0:29:47.240 angles to it. 0:29:48.200 --> 0:29:48.920 When you think. 0:29:48.760 --> 0:29:54.600 About what these detention centers do for a local economy, 0:29:54.640 --> 0:29:57.080 there's that, but there's also then, as we've been talking 0:29:57.080 --> 0:29:59.800 about the conditions, and you do wonder about the oversight, 0:30:00.360 --> 0:30:03.840 especially in an administration that has been cutting back on some 0:30:03.880 --> 0:30:07.840 of the federal spending in different areas. So, you know, Rachel, 0:30:07.880 --> 0:30:10.760 when you look at this story and this reporting, I mean, 0:30:11.680 --> 0:30:15.320 the cities or the local municipalities in many ways want 0:30:15.360 --> 0:30:19.520 them right because it provides jobs, it provides some economic momentum. 0:30:19.520 --> 0:30:22.160 At the same time, there are concerns about kind of 0:30:22.160 --> 0:30:25.640 who's watching out for what's going. What does Corcivic say 0:30:25.720 --> 0:30:26.400 about all of this? 0:30:27.760 --> 0:30:31.640 Yeah, Corcivic talks about how many people they employ locally. 0:30:31.720 --> 0:30:34.960 They talk about the salaries and the benefits that they provide. 0:30:36.000 --> 0:30:38.720 They you know, say that they I think they said 0:30:38.720 --> 0:30:42.320 that they hire or have more than three hundred jobs 0:30:42.880 --> 0:30:46.760 related to these facilities in New Mexico. So, I mean, 0:30:47.040 --> 0:30:51.880 they definitely see themselves as a major local economic benefit 0:30:51.960 --> 0:30:54.720 to the area. And that's you know what we heard 0:30:54.760 --> 0:30:57.280 from the Estancia mayor as well. I mean, he talks 0:30:57.560 --> 0:31:01.120 a lot about how much of the grocery seats tax 0:31:01.160 --> 0:31:03.840 which is New Mexico's version of a sales tax that 0:31:04.000 --> 0:31:07.800 course of it contributes to. So it's interesting to hear 0:31:07.960 --> 0:31:10.280 kind of the I mean, I think Commissioner how Amos, 0:31:10.480 --> 0:31:13.280 Yeah put it with ysinkly when she had like on 0:31:13.320 --> 0:31:15.000 the one hound, they're a major employer. 0:31:15.360 --> 0:31:19.239 Yeah, such a great story, so much in there, and 0:31:19.280 --> 0:31:21.840 as we said, it's a slice of life in this country. 0:31:21.960 --> 0:31:25.160 Bloomberg News Investigations Report Rachel Adams heard Rachel, thank you. 0:31:25.240 --> 0:31:25.960 This is Bloomberg. 0:31:27.600 --> 0:31:31.440 This is the Bloomberg Business Week Daily Podcast. Listen live 0:31:31.560 --> 0:31:34.440 each weekday starting at two pm Eastern on Apple car 0:31:34.560 --> 0:31:37.360 Play and the Android Auto with the Bloomberg Business App. 0:31:37.440 --> 0:31:40.200 You can also listen live on Amazon Alexa from our 0:31:40.240 --> 0:31:45.040 flagship New York station, Just Say Alexa played Bloomberg eleven thirty. 0:31:46.200 --> 0:31:50.080 Let's Turn to Healthcare. US Human and Health Services Secretary 0:31:50.200 --> 0:31:53.920 Robert F. Kennedy Junior removed every member of the CDC's 0:31:54.000 --> 0:31:57.400 Vaccine Advisory Panel in an opinion piece published in The 0:31:57.440 --> 0:32:00.240 Wall Street Journal. He said he made the move because 0:32:00.280 --> 0:32:04.120 members of the committee were receiving funding directly from pharmaceutical companies, 0:32:04.160 --> 0:32:07.440 a claim that so far has not been confirmed. 0:32:07.240 --> 0:32:09.479 With uncertainty at the federal level. We wanted to get 0:32:09.520 --> 0:32:12.360 an overview of the industry with an executive who thinks 0:32:12.360 --> 0:32:14.880 about the space a lot. We turned at Wendy Barnes. 0:32:14.960 --> 0:32:18.080 She's president and CEO of GoodRx. We talked to her 0:32:18.080 --> 0:32:21.479 about the headwinds facing her industry and it really ranges 0:32:21.560 --> 0:32:25.400 everything from tariffs to the impact of new regulations. 0:32:24.800 --> 0:32:27.720 A lot to talk about. She kicked it off highlighting 0:32:27.720 --> 0:32:31.680 a new company initiative aimed at supporting independent pharmacies in 0:32:31.720 --> 0:32:34.000 the US. It's called Community Link. 0:32:34.160 --> 0:32:35.720 You know, I would say the company's been on a 0:32:35.760 --> 0:32:40.800 multi year journey to best partner with retail pharmacies, with 0:32:40.920 --> 0:32:43.800 community pharmacies really being at the top of that list, 0:32:44.400 --> 0:32:47.400 and this is really the culmination of that work. And 0:32:47.520 --> 0:32:51.960 so what you referenced, the good RX Community Link is 0:32:52.000 --> 0:32:55.360 a portal by which community pharmacies sometimes referred to as 0:32:55.440 --> 0:32:58.320 independent pharmacies, So think of those as really your non 0:32:58.440 --> 0:33:03.040 chain pharmacies. It can be as small as a single pharmacy, 0:33:03.200 --> 0:33:07.720 or some community independent pharmacy owners have fifty seventy five 0:33:07.800 --> 0:33:12.400 or one hundred locations, but largely they're run independent of 0:33:12.440 --> 0:33:17.120 a broader management philosophy and this is our effort to 0:33:17.200 --> 0:33:22.800 contract directly with these pharmacies in a cost plus reimbursement 0:33:22.880 --> 0:33:23.920 mechanism manner. 0:33:24.720 --> 0:33:26.120 Look, it's not. 0:33:26.080 --> 0:33:29.360 Any new news to you or probably to your listeners 0:33:29.400 --> 0:33:33.479 that pharmacies continue to be under reimbursement pressure, and we 0:33:33.560 --> 0:33:36.600 believe that they are key partners in our broader mission 0:33:36.640 --> 0:33:40.840 to make medications more affordable and accessible for every American. 0:33:40.920 --> 0:33:43.520 And so this effort is really one in which we're 0:33:43.560 --> 0:33:47.720 trying to bolster reimbursement for those independent pharmacies such that 0:33:47.760 --> 0:33:50.760 they can work with us directly. And in addition to that, 0:33:50.840 --> 0:33:55.719 we're giving them access to ninety plus brand deals that 0:33:55.760 --> 0:34:00.360 we have secured with pharmaceutical manufacturers over the last to 0:34:00.400 --> 0:34:03.680 twenty four months, and those continue to grow such that 0:34:03.720 --> 0:34:08.239 the reimbursement on those same drugs is favorable to those pharmacies. 0:34:08.560 --> 0:34:12.799 It's really no secret that pharmacies have long struggled to 0:34:12.920 --> 0:34:16.640 have a favorable margin profile on many brands that they fill, 0:34:16.960 --> 0:34:20.279 and this too gives access to those programs for those 0:34:20.320 --> 0:34:21.560 independent pharmacies. 0:34:22.120 --> 0:34:26.000 Well, Wendy anecdotally speaking, as the large pharmacies and the 0:34:26.080 --> 0:34:31.080 chains have come under pressure, whether it's overstore closures or 0:34:31.160 --> 0:34:34.160 different things happening just in the space we've all reported 0:34:34.160 --> 0:34:36.120 on what's happened in cities and the way that some 0:34:36.160 --> 0:34:39.239 of these pharmacies have closed down in certain cities. Are 0:34:39.280 --> 0:34:43.560 you seeing more people go to these independent pharmacies? I mean, 0:34:43.560 --> 0:34:46.000 anecdotally speaking, I can say that certainly the way my 0:34:46.080 --> 0:34:49.560 family has changed its behavior just thanks to availability and 0:34:49.840 --> 0:34:52.640 what pharmacies tend to actually have what we're looking for. 0:34:53.000 --> 0:34:55.960 But how have you seen that affect the overall landscape. 0:34:57.280 --> 0:35:00.400 I don't know that we've seen a meaningful ship to 0:35:00.480 --> 0:35:03.439 independent from chain. I think there's still a pretty good 0:35:03.520 --> 0:35:08.440 mix of grosser versus independent versus chain, and candidly, you know, 0:35:08.520 --> 0:35:10.560 mail order slash digital pharmacy. 0:35:10.640 --> 0:35:12.640 I think at the end of the day, what we 0:35:12.719 --> 0:35:13.279 see is. 0:35:13.440 --> 0:35:17.080 In the seventy plus odd thousand pharmacy options that we 0:35:17.200 --> 0:35:20.640 have as consumers in the US that as a consumer, 0:35:20.680 --> 0:35:22.560 you just really want to get your drugs on your 0:35:22.600 --> 0:35:26.080 own terms, whether it's mail to your home with your 0:35:26.160 --> 0:35:29.920 preferred community pharmacist or at a chain or grosser. And 0:35:30.480 --> 0:35:34.080 we pride ourselves on working really with all pharmacy such 0:35:34.120 --> 0:35:36.360 that you can get your drugs when and where you 0:35:36.440 --> 0:35:37.759 know you desire to do so. 0:35:38.880 --> 0:35:41.240 Do you see it all that the independent channel is shrinking. 0:35:41.280 --> 0:35:43.560 We've certainly seen it with some of the big pharmacy chains, right, 0:35:43.600 --> 0:35:45.520 We've talked about it, You've seen the headlines. But I'm 0:35:45.520 --> 0:35:48.319 just curious when it comes to independence, Wendy, do you 0:35:48.400 --> 0:35:51.880 see any shrinkage in terms of the number of outlets 0:35:51.920 --> 0:35:52.319 that are out? 0:35:52.360 --> 0:35:54.279 There are no, you know, I. 0:35:54.280 --> 0:35:56.239 Will say in the numbers that we've looked at over 0:35:56.239 --> 0:35:58.120 the last couple of years, there are still a good 0:35:58.239 --> 0:36:02.080 number opening any month. I will say in our book, 0:36:02.480 --> 0:36:04.920 with the pharmacies that we work with, I haven't seen 0:36:05.440 --> 0:36:08.960 significant trinkage. But I think there are certainly other data 0:36:08.960 --> 0:36:11.560 sources that would suggest that there are a number of 0:36:11.560 --> 0:36:14.840 independent and or community pharmacies that are closing in or 0:36:14.920 --> 0:36:17.560 selling their business to other owners. 0:36:17.600 --> 0:36:19.760 But in our particular book, it's held pretty study. 0:36:20.160 --> 0:36:24.200 How have independence traditionally reacted to the program at GoodRx, 0:36:24.239 --> 0:36:27.160 because it's our understanding they've been a little skeptical about it. 0:36:27.200 --> 0:36:29.520 How do you make sure that they're embracing it rather 0:36:29.560 --> 0:36:30.879 than treating it with skepticism. 0:36:31.239 --> 0:36:34.240 Sure, well, I think you know, Look, it's early days, 0:36:34.320 --> 0:36:36.360 to be clear, and we're going to be on a 0:36:36.440 --> 0:36:39.959 journey here. Communication is going to be the biggest part 0:36:40.000 --> 0:36:43.239 of this program, in addition to delivering what we said 0:36:43.239 --> 0:36:46.839 we intend to deliver, which is fair economics over the 0:36:46.840 --> 0:36:50.840 course of these contractual agreements, as pharmacies agree to contract 0:36:50.920 --> 0:36:53.800 with this directly, and that again can all be conveyed 0:36:53.840 --> 0:36:56.719 through that portal that we stood up this morning. So 0:36:56.880 --> 0:36:58.680 for me, it's really going to be about how we 0:36:58.760 --> 0:37:03.160 deliver on the reimbursement mechanism through this partnership, and. 0:37:03.080 --> 0:37:06.280 I think, you know, the ongoing communication. 0:37:05.800 --> 0:37:10.160 Will support how the pharmacy community embraces this over time. 0:37:10.280 --> 0:37:13.279 You know, we've certainly been setting out communications early on. 0:37:14.120 --> 0:37:15.479 We've been in dialogue with. 0:37:15.440 --> 0:37:19.120 Many independent pharmacy owners to speak through the program. But 0:37:19.560 --> 0:37:20.919 I think at the end of the day, it's really 0:37:20.920 --> 0:37:22.440 going to be the outcome of the program and the 0:37:22.480 --> 0:37:25.120 economics that we deliver that we'll prove it out over time. 0:37:25.360 --> 0:37:26.680 Well, that's why I want to kind of just dig 0:37:26.680 --> 0:37:28.880 a little bit deeper, Wendy. You know, for this to 0:37:28.960 --> 0:37:31.720 work for you guys, this new role out, this Community 0:37:31.719 --> 0:37:34.320 links program, the economics have to work right for the 0:37:34.360 --> 0:37:36.680 independent pharmacy. So I'm just curious what you can tell 0:37:36.760 --> 0:37:41.440 us how the economics are different for the pharmacy that 0:37:41.680 --> 0:37:45.520 directly contacts with GoodRx versus using maybe one of the 0:37:45.520 --> 0:37:49.120 pharmacy benefit managers the PBMs and their networks to dispense 0:37:49.160 --> 0:37:52.120 a prescription. What can you tell us more specifically about 0:37:52.120 --> 0:37:57.240 the economic advantage for independent pharmacies to use your route 0:37:57.719 --> 0:38:01.319 versus going to the PBMs. 0:38:00.040 --> 0:38:01.719 Are happy to do so. 0:38:01.719 --> 0:38:04.760 So it's really the agreement directly with US is rooted 0:38:04.880 --> 0:38:08.960 on a NADAK plus reimbursement. So NADAK is one of 0:38:09.120 --> 0:38:13.520 multiple benchmarks that is effectively a cost mechanism that stands 0:38:13.520 --> 0:38:17.640 for national average drug acquisition cost, and we are negotiating 0:38:17.640 --> 0:38:20.680 with independent pharmacies to do this with that predicated as 0:38:20.719 --> 0:38:25.080 the baseline plus an amount that keeps them profitable on 0:38:25.160 --> 0:38:29.960 filling these claims. So that's really the precursor, if you will, 0:38:30.040 --> 0:38:32.960 and or the meat of how this agreement will work, 0:38:33.280 --> 0:38:37.800 which again provides favorable economics to these pharmacies. The distinction, Carol, 0:38:37.840 --> 0:38:41.120 as you called out to perhaps doing it through a 0:38:41.200 --> 0:38:44.879 larger payer, when you think about how it works through 0:38:45.000 --> 0:38:48.680 let's just say a larger PBM, there are multiple patient 0:38:48.719 --> 0:38:53.560 pay slash cash networks through which an independent pharmacy can participate, 0:38:53.680 --> 0:38:56.360 and when they're in that type of an algorithm, for 0:38:56.440 --> 0:39:00.200 lack of better description, typically it's going to search for 0:39:02.160 --> 0:39:05.640 not necessarily favorable margin for the pharmacy, and so there 0:39:05.680 --> 0:39:09.799 would be times in their previous arrangement whereby they may 0:39:09.840 --> 0:39:13.319 not always have favorable economics to fill those prescriptions. And 0:39:13.360 --> 0:39:17.440 by contracting directly, we are putting terms and conditions in 0:39:17.480 --> 0:39:21.279 the agreement that allow them to have certainty around not 0:39:21.400 --> 0:39:25.000 only the reimbursement, but also access to drugs that they're 0:39:25.040 --> 0:39:28.480 not fulfilling today in patient pay programs. Again, that would 0:39:28.480 --> 0:39:30.960 be the list of brands that I mentioned that I 0:39:31.000 --> 0:39:33.480 believe are ninety plus at this point that they're going 0:39:33.520 --> 0:39:36.400 to have certainty around how they're reimbursed in this direct 0:39:36.440 --> 0:39:40.920 engagement through us that they're not getting through their arrangements today. 0:39:41.800 --> 0:39:45.359 Thinking about healthcare in the United States, it is inextricably 0:39:45.400 --> 0:39:49.880 bound to politics, and no question, if what the President 0:39:49.920 --> 0:39:53.279 calls the Big Beautiful Bill were to pass, we could see, 0:39:53.280 --> 0:39:56.360 at least according to the CBO estimates of a dramatic 0:39:56.440 --> 0:40:01.400 increase in the number of uninsured almost eight million. What 0:40:01.400 --> 0:40:03.880 does that mean for your business and how much your 0:40:03.880 --> 0:40:06.200 business comes from Medicaid and uninsured people today. 0:40:06.640 --> 0:40:11.359 So interestingly, of the users who access our pricing on 0:40:11.560 --> 0:40:15.520 any given day, roughly ninety percent actually have insurance today. 0:40:16.040 --> 0:40:20.000 So I think there's a bit of a misperception that 0:40:20.120 --> 0:40:22.840 the overwhelming number of consumers who use us in fact 0:40:22.840 --> 0:40:25.080 don't have insurance, which is not the case. 0:40:25.719 --> 0:40:27.960 Having said that, who does. 0:40:27.800 --> 0:40:31.920 Come and look for pricing through our different platforms is 0:40:31.920 --> 0:40:36.080 your consumer who's motivated to check for competitive pricing, whether 0:40:36.120 --> 0:40:39.000 they have insurance or not, and we continue to be 0:40:39.040 --> 0:40:42.720 the number one platform to look for the best price 0:40:42.800 --> 0:40:45.320 deal that you can find on any particular medication. 0:40:45.600 --> 0:40:47.359 So as it pertains to. 0:40:47.400 --> 0:40:50.280 What may or may not pass in the bill, whether 0:40:50.360 --> 0:40:55.160 it's inclusive of Medicaid cuts which continue to be advanced, 0:40:55.600 --> 0:40:59.359 and or other cuts that would put pressure on your 0:40:59.400 --> 0:41:02.719 typical how hold income, what we do know is that 0:41:02.760 --> 0:41:06.319 those should produce tailwinds for us as a business for 0:41:06.480 --> 0:41:09.880 consumers whether they're insured or not, but specifically as it 0:41:09.960 --> 0:41:14.160 relates to Medicaid cuts and the number of individuals that 0:41:14.239 --> 0:41:17.480 may fall out of coverage, we do believe that that 0:41:17.520 --> 0:41:21.959 presents an opportunity for us to continue to support any 0:41:22.000 --> 0:41:26.200 American that really is struggling to purchase their medications. 0:41:26.760 --> 0:41:29.440 Wendy just got thirty seconds. You know, the word that 0:41:29.480 --> 0:41:31.840 we all use to describe the environment right now is uncertain. 0:41:32.400 --> 0:41:35.799 There's a lot coming out, certainly leaders and CEOs, just 0:41:35.840 --> 0:41:38.799 in your industry too. You've got write aid doing a bankruptcy. 0:41:38.920 --> 0:41:41.560 You know, I think about the macro within your business 0:41:41.560 --> 0:41:44.520 and just macro overall. How do you look at the outlook? 0:41:44.600 --> 0:41:47.720 Just quickly, you know the outlook? 0:41:47.880 --> 0:41:52.319 You're right, turbulent is a fair description. Having said that, 0:41:52.880 --> 0:41:55.319 businesses that stay the course and have a mission that 0:41:55.440 --> 0:41:58.600 makes sense for the consumers in which we serve will 0:41:58.640 --> 0:42:03.000 continue to thrive our goal of courses getting medication affordably 0:42:03.040 --> 0:42:05.920 and effectively into the hands of every American you need it, 0:42:06.320 --> 0:42:07.319 and we believe will be. 0:42:07.320 --> 0:42:09.040 In a position to take advantage. 0:42:09.320 --> 0:42:11.640 Wendy Barnes, President CEO of GoodRx. 0:42:18.000 --> 0:42:22.000 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:42:22.080 --> 0:42:25.560 live weekday afternoons from two to five pm Eastern Listen 0:42:25.560 --> 0:42:29.160 on Applecarplay and Android Auto with the Bloomberg Business app, 0:42:29.280 --> 0:42:31.680 or watch us live on YouTube. 0:42:32.560 --> 0:42:34.480 Plenty ahead in our second hour of the weekend edition 0:42:34.480 --> 0:42:38.040 of Bloomberg Business Week, including a deep dive into Cisco 0:42:38.160 --> 0:42:40.960 Live twenty twenty five, held this past week in San Diego. 0:42:41.200 --> 0:42:42.120 Tim and I were there. 0:42:42.600 --> 0:42:45.840 We were broadcasting live with some of Cisco's top experts 0:42:45.840 --> 0:42:48.280 and leaders as we unpacked what's next for the company 0:42:48.640 --> 0:42:51.799 and how it's navigating the ever evolving world of tech. 0:42:51.920 --> 0:42:53.799 Got to say, it sounds like Cisco is definitely going 0:42:53.800 --> 0:42:56.000 into a big new chapter for the company that has 0:42:56.040 --> 0:42:58.359 been around for a long time. We want to share 0:42:58.360 --> 0:43:01.640 with you a few of our common conversations from the event, 0:43:01.680 --> 0:43:04.160 and there's no better place to start with than AI, 0:43:04.320 --> 0:43:07.840 which really dominated a lot of our conversations. CISCA recently 0:43:07.880 --> 0:43:10.759 announced that it's updating it's networking and security products to 0:43:10.800 --> 0:43:15.000 make artificial intelligence networks work better, and we got into 0:43:15.000 --> 0:43:17.600 that in more with Cisco's Vice president of Product, AI, 0:43:17.640 --> 0:43:20.000 Software and Platform DJ Sampath. 0:43:20.400 --> 0:43:22.600 DJ here, I mean, you look around at any of 0:43:22.640 --> 0:43:25.960 the trade floors and like, this is the massive, massive, 0:43:26.000 --> 0:43:28.319 and dominant theme here. I want to talk a little 0:43:28.320 --> 0:43:30.399 bit about the news that we got earlier today that 0:43:31.200 --> 0:43:34.800 Cisco's updating its networking security products to make AI network 0:43:34.880 --> 0:43:37.440 speedier and more secure. It's part of this broader push 0:43:37.480 --> 0:43:41.200 to capitalize on the AI spending boom. Talk to us 0:43:41.239 --> 0:43:42.960 a little bit about what prompted this, and we're going 0:43:43.000 --> 0:43:44.600 to speak about it throughout the program because this is 0:43:44.600 --> 0:43:46.839 some big news to emerge. But what you're hearing from 0:43:46.880 --> 0:43:49.279 customers on the customer front, where we are in the 0:43:49.320 --> 0:43:51.880 AI moment, and really what prompted a move such as this. 0:43:52.200 --> 0:43:55.440 Yeah, Tim Carrol, thanks so much for having me. You know, 0:43:55.800 --> 0:43:59.560 there's a huge tectonic change that's happening right now. 0:44:00.280 --> 0:44:02.600 If you think about the moment where chat gpt became 0:44:03.160 --> 0:44:05.919 and I came into our zeitgeist in November twenty twenty two, 0:44:06.560 --> 0:44:09.360 we've now started understanding that AIS here, it's not a buzzword. 0:44:09.560 --> 0:44:11.360 We go to chat gpt for a lot of questions 0:44:11.360 --> 0:44:13.480 and existential ones like, you know, should I take this job, 0:44:13.480 --> 0:44:14.560 should I not take this job? 0:44:14.840 --> 0:44:16.160 A lot of interesting things. 0:44:15.960 --> 0:44:17.880 That you start to see that are being broken down 0:44:17.960 --> 0:44:20.040 very systematically by AI as a TOT partner. 0:44:20.160 --> 0:44:20.319 Right. 0:44:20.640 --> 0:44:23.640 But what we're seeing now is that evolution from AI 0:44:23.840 --> 0:44:28.120 being an application or a chatbot to an agent agentic AI. Right, 0:44:28.400 --> 0:44:31.920 So you've got agents that are autonomously going on and performing. 0:44:31.520 --> 0:44:34.360 Tasks for you. And as you start to think about that. 0:44:34.520 --> 0:44:36.600 What's going to happen as your workforce, which has now 0:44:36.680 --> 0:44:39.040 gotten you know, one hundred percent of humans, is going 0:44:39.080 --> 0:44:43.160 to be augmented with you know, AI applications, AI agents, 0:44:43.719 --> 0:44:44.920 robots and humanoids. 0:44:45.160 --> 0:44:46.480 You know, in fact, you know you're going to start 0:44:46.520 --> 0:44:47.240 to see that happen. 0:44:47.440 --> 0:44:49.799 And these these robots and humanoids are going to have 0:44:49.880 --> 0:44:51.359 AI models sitting inside of them. 0:44:51.440 --> 0:44:52.840 So what we're. 0:44:52.680 --> 0:44:55.200 Seeing is that you're going to start to see a 0:44:55.239 --> 0:44:58.440 lot of change in the way these networks work and 0:44:58.480 --> 0:45:01.200 how employees are going to work inside of these organizations. 0:45:01.280 --> 0:45:04.560 So so we're we're just tremendously excited about that, and 0:45:04.600 --> 0:45:05.920 we're getting ready at Cisco. 0:45:06.200 --> 0:45:07.040 We know it's coming. 0:45:07.440 --> 0:45:10.160 We've we've helped usher in the era of the Internet, 0:45:10.440 --> 0:45:12.520 and we're now ready to usher in the era of 0:45:12.560 --> 0:45:15.440 AI AGENTIC AI more more specific. 0:45:14.960 --> 0:45:17.120 What's surprising you about kind of the progression? You're right, 0:45:17.160 --> 0:45:18.200 it's like two years ago. 0:45:18.080 --> 0:45:19.640 Right, it was like bam. 0:45:19.719 --> 0:45:22.480 But I think for us, like it was just over 0:45:22.480 --> 0:45:24.960 the last few months that we have increasingly been using 0:45:25.239 --> 0:45:27.800 like chat, GBT, right more aggressive. 0:45:27.320 --> 0:45:29.400 Way use a lot. 0:45:29.520 --> 0:45:29.840 There you go. 0:45:29.920 --> 0:45:32.080 Yeah, here's what I'll tell you. Right in the you know, 0:45:33.280 --> 0:45:35.800 in the trenches right now. The speed with which AI 0:45:35.880 --> 0:45:39.440 has been moving has been absolutely mind boggling, you know, 0:45:39.719 --> 0:45:42.600 the progress that we're starting to see. I'll give you 0:45:42.640 --> 0:45:46.000 an example. You mentioned Claude. Claude is an amazing, you know, 0:45:46.480 --> 0:45:49.600 piece of uh A software from a model perspective that 0:45:49.640 --> 0:45:51.600 it loves you to write code really well. Claude is 0:45:51.600 --> 0:45:52.960 one of the top ones that they used to write 0:45:53.000 --> 0:45:55.719 new software engineering. A lot of people thought that, you know, 0:45:55.760 --> 0:45:58.120 AI is gonna, you know, sort of come for our jobs, 0:45:58.160 --> 0:46:00.439 and you know, software engineers are probably not the ones 0:46:00.440 --> 0:46:01.719 that it's going to come for. It's going to take 0:46:01.719 --> 0:46:04.440 a long time to get there. But guess what, you know, 0:46:04.800 --> 0:46:07.080 it's here and it's now, but it's not taking away 0:46:07.120 --> 0:46:11.600 the jobs. In fact, every single developer is becoming a 0:46:11.600 --> 0:46:14.600 lot more productive using AI. So essentially what's going to 0:46:14.640 --> 0:46:16.000 happen is it's not like you're gonna have to worry 0:46:16.000 --> 0:46:18.080 about jobs. I think, you know, people that use AI 0:46:18.760 --> 0:46:21.040 are gonna you know, take the jobs of people that 0:46:21.080 --> 0:46:22.799 don't use AI. So you're going to just start to 0:46:22.840 --> 0:46:27.320 see that AI becomes extremely helpful from a productivity perspective. 0:46:27.440 --> 0:46:29.160 You know, I want to go back to agentic ai, 0:46:29.200 --> 0:46:30.480 and it's I know, it's something that you think a 0:46:30.520 --> 0:46:32.799 lot about. We hear it a lot on from Salesforce 0:46:32.960 --> 0:46:37.239 for example. Right now, I still think though, when it 0:46:37.280 --> 0:46:41.759 comes to the general consumer, agentic ai is like for 0:46:41.800 --> 0:46:44.359 the early adopters right now, it's for the people who 0:46:44.360 --> 0:46:46.560 do want to pay two hundred dollars a month, for example, 0:46:46.600 --> 0:46:49.600 for a version of chat GPT that will make reservations 0:46:49.600 --> 0:46:51.920 for you at a restaurant or help you with travel plans. 0:46:52.440 --> 0:46:54.640 What does it look like beyond early adoption. 0:46:55.040 --> 0:46:57.120 Yeah, I'll talk about the you know, one of the 0:46:57.200 --> 0:46:59.160 key things that you'll you'll notice is that the rate 0:46:59.200 --> 0:47:01.400 of which things move, Like, you know, if you go 0:47:01.480 --> 0:47:04.480 back to just using the chatbot, the very first time 0:47:04.480 --> 0:47:06.560 you use chat gpd'd had a knowledge cut off, right, 0:47:06.640 --> 0:47:08.920 you can only get information from like twenty twenty one. 0:47:09.239 --> 0:47:11.040 And then they opened it up to being able to 0:47:11.080 --> 0:47:14.080 do live web searches, right that is actually you know, 0:47:14.200 --> 0:47:16.760 teaching a model how to use the tool, and then 0:47:16.960 --> 0:47:18.640 you saw that it went from just being able to 0:47:18.640 --> 0:47:20.680 do a search to like, hey, you can now start 0:47:20.680 --> 0:47:21.680 to connect. 0:47:21.440 --> 0:47:22.960 These models to your emails. 0:47:23.600 --> 0:47:26.160 You can now start connecting these models to your salesforce 0:47:26.280 --> 0:47:29.000 and instance, and then slowly it's expanding. It's now connecting 0:47:29.000 --> 0:47:31.480 into your Google Docs and your Microsoft Office, you. 0:47:31.480 --> 0:47:33.320 Know, environments very quickly. 0:47:33.480 --> 0:47:35.319 Or what you're seeing is that you know, we're in 0:47:35.360 --> 0:47:37.640 this in this exponent of like the speed with which 0:47:37.680 --> 0:47:39.759 things are moving, and we're just at that beginning part 0:47:39.760 --> 0:47:42.040 of that exponent So you're right. Sometimes it feels like 0:47:42.080 --> 0:47:44.480 some of these things are very early from a consumer perspective, 0:47:44.800 --> 0:47:47.600 but if you started thinking about what's happening inside of 0:47:47.600 --> 0:47:50.680 the enterprises, the enterprises are starting to adopt AI a 0:47:50.680 --> 0:47:53.680 whole lot faster because they need to maintain the competitive edge. 0:47:54.080 --> 0:47:55.680 But a key thing for them to be able to 0:47:55.719 --> 0:47:57.400 adopt AI is security. 0:47:57.440 --> 0:48:00.120 Is safety and security You've got to make sure. 0:48:00.200 --> 0:48:02.279 Well, that's what I was going to say, because in 0:48:02.360 --> 0:48:04.680 order for you really to kind of max at the 0:48:04.719 --> 0:48:06.520 potential of it, you've got to open it up right 0:48:06.560 --> 0:48:07.840 to kind of all your different systems. 0:48:07.840 --> 0:48:10.320 So how do you make sure that that is really 0:48:10.360 --> 0:48:11.120 really secure? 0:48:11.239 --> 0:48:13.080 And that's top of mind when it comes to a 0:48:13.160 --> 0:48:15.400 gentic AI because you are now saying, hey, you're going 0:48:15.480 --> 0:48:19.080 to allow these agents to execute tasks on your. 0:48:18.920 --> 0:48:20.480 Behalf all the way to completion. 0:48:20.640 --> 0:48:22.560 So which means you've got to make sure you know 0:48:22.560 --> 0:48:24.440 you're thinking about safety and security. And now I'll talk 0:48:24.480 --> 0:48:28.120 about what we launched earlier this year at Cisco. We 0:48:28.239 --> 0:48:30.960 had a product called Cisco AI Defense. Knowing that this 0:48:31.000 --> 0:48:32.040 is going to be top of mind for a lot 0:48:32.080 --> 0:48:34.920 of enterprisis, we build a technology that does you know, 0:48:34.960 --> 0:48:36.399 provide you with the visibility of all. 0:48:36.280 --> 0:48:37.719 Of these agents, gives you. 0:48:37.680 --> 0:48:40.000 The ability to validate these models, to make sure these 0:48:40.000 --> 0:48:41.120 models are not vulmotable. 0:48:41.400 --> 0:48:42.320 Because here's what happens. 0:48:42.360 --> 0:48:44.080 Right if you go back to the age of the Internet, 0:48:44.120 --> 0:48:46.040 when the Internet came out, the attacker started doing a 0:48:46.080 --> 0:48:48.239 whole lot of interesting things. They would do the dial 0:48:48.320 --> 0:48:50.640 up service attacks and DDAs and so on and so forth. 0:48:51.000 --> 0:48:53.440 We're starting to see similar types of things happen with 0:48:53.560 --> 0:48:55.759 AI applications. So we've got to make sure that we're 0:48:55.760 --> 0:48:58.720 protecting against attacks, new types of attacks like prompt injection 0:48:58.760 --> 0:48:59.960 attacks and so on and so forth. 0:49:00.080 --> 0:49:03.040 What okay, So what about the type of attack where 0:49:04.440 --> 0:49:05.920 this is a little scary, but I think this is 0:49:05.960 --> 0:49:09.800 what's happening, where we are mimicked, our voices are mimicked, 0:49:09.840 --> 0:49:12.680 and perhaps a loved one is called and AI is 0:49:12.719 --> 0:49:16.760 able to pretend that we're in a situation that requires 0:49:16.840 --> 0:49:19.240 the help from a loved one. I mean this could happen, 0:49:19.520 --> 0:49:20.040 This could happen. 0:49:20.120 --> 0:49:22.640 No, absolutely, like you know it's happening now. 0:49:22.920 --> 0:49:27.160 Just to be very clear, because spam in phishing attacks 0:49:27.800 --> 0:49:31.040 with AI can become really really normally, like you're going 0:49:31.080 --> 0:49:32.879 to see a lot more of these attacks. That cost 0:49:32.920 --> 0:49:34.759 to do those attacks are going to drop dramatically, which 0:49:34.800 --> 0:49:37.279 means you've got to use AI to be able to 0:49:37.840 --> 0:49:40.200 you know, defend as well. It's not just about using 0:49:40.239 --> 0:49:42.640 AI for attacking, you use AI for defending. So there 0:49:42.640 --> 0:49:44.719 are two parts to this. You want to make sure 0:49:44.760 --> 0:49:47.120 you're securing the use of AI, and you also want 0:49:47.160 --> 0:49:49.600 to make sure that you're using AI to make security better. 0:49:49.920 --> 0:49:52.200 And at Cisco we're doing both simultaneously. 0:49:52.760 --> 0:49:54.520 So what's the thing that keeps you up at night? 0:49:54.560 --> 0:49:56.680 Like, I just do think about some of this is happening, 0:49:56.840 --> 0:49:58.600 Like we've moved so quickly. It seems like all of 0:49:58.640 --> 0:50:02.600 a sudden from generative to agentic AI, and I think 0:50:02.640 --> 0:50:04.880 people are just catching up to be like what is 0:50:04.920 --> 0:50:06.920 this all about? So what is it that kind of 0:50:06.920 --> 0:50:09.080 worries you as things move so fast? 0:50:09.320 --> 0:50:09.640 I think. 0:50:09.680 --> 0:50:11.560 I think one of the one of the biggest things is, 0:50:11.680 --> 0:50:14.240 you know, there's always this feeling like we're not moving 0:50:14.280 --> 0:50:15.480 fast enough, you know. 0:50:15.520 --> 0:50:17.400 Because do you feel the pressure from customers. 0:50:17.800 --> 0:50:19.719 I think at this point in time, everybody's feeling the 0:50:19.719 --> 0:50:22.120 pressure when you talk to anybody that is in AI 0:50:22.480 --> 0:50:25.120 that the rate at which AI is moving, everybody's just 0:50:25.200 --> 0:50:27.239 trying to make sure that they're they're they're keeping up 0:50:27.320 --> 0:50:30.080 with the advances that's happening across the entire ecosystem. 0:50:30.320 --> 0:50:34.719 Hey, DJ, I'm curious about the fragmentation in the security 0:50:34.719 --> 0:50:37.880 market right now, and I'm wondering how you see Cisco 0:50:38.000 --> 0:50:42.560 potentially playing a role when it comes to consolidating all 0:50:42.600 --> 0:50:44.960 the features and the functions that are out there. 0:50:45.160 --> 0:50:47.400 You're you know, this is a top of mind issue 0:50:47.400 --> 0:50:49.720 for a lot of cisows, you know, chief information security 0:50:49.760 --> 0:50:52.080 officers that are looking to consolidate a lot of the 0:50:52.120 --> 0:50:55.200 different point products that are there inside of their ecosystem. Cisco, 0:50:55.239 --> 0:50:56.960 as you know, you know, with the acquisition of spun 0:50:57.000 --> 0:50:59.440 because one of the largest security companies on the planet 0:50:59.480 --> 0:51:04.320 at this point, and we've taken a very intentional approach 0:51:04.360 --> 0:51:06.880 to consolidating a lot of these things into a single 0:51:06.920 --> 0:51:07.680 pane of glass. 0:51:07.840 --> 0:51:10.400 What we launched earlier this year was something called. 0:51:10.200 --> 0:51:15.160 Security Cloud Control, and this is a consolidation effort. You know, 0:51:15.480 --> 0:51:17.000 you don't have to worry about each and every single 0:51:17.040 --> 0:51:19.360 point products instead of your ecosystem, but you bring it 0:51:19.400 --> 0:51:22.560 all together and you use AI assistance to be able 0:51:22.600 --> 0:51:24.960 to manage all of these products. So, you know, we're 0:51:25.080 --> 0:51:27.680 entering into that AI and agentic era. You've got to 0:51:27.680 --> 0:51:30.880 have those capabilities so that the defenders have the advantage 0:51:30.880 --> 0:51:33.399 over the attackers that are cloning your whits and doing 0:51:33.440 --> 0:51:35.840 those fishing attacks. You really need to give the defenders 0:51:35.840 --> 0:51:38.440 an advantage, and that's really what we're doing at siscoll. 0:51:38.719 --> 0:51:40.520 You know. One of the things, you know, when we 0:51:40.560 --> 0:51:43.439 look at kind of the universe, your competitors as well, 0:51:43.560 --> 0:51:46.319 and when investors think of networks security, they often think 0:51:46.320 --> 0:51:48.359 of palolp On Networks and some other players that are 0:51:48.400 --> 0:51:51.040 out there, especially when it comes to the firewall space. 0:51:51.080 --> 0:51:54.680 I'm just curious, are there products dj or software that 0:51:54.719 --> 0:51:58.399 can kind of change market perception, investor perceptions and market 0:51:58.440 --> 0:51:59.279 share dynamics. 0:51:59.360 --> 0:52:02.040 Absolutely one of the key things about you know, the 0:52:02.040 --> 0:52:04.360 way you're starting to see these attacks evolved, especially in 0:52:04.400 --> 0:52:07.000 the age of you know, AI and agentic era, you 0:52:07.120 --> 0:52:09.600 got to realize that one of the core enforcement points 0:52:09.880 --> 0:52:12.200 for stopping all of these bad actors and bad attacks 0:52:12.280 --> 0:52:13.080 is in the network. 0:52:13.680 --> 0:52:16.279 Now, when you take that security and the profits of 0:52:16.320 --> 0:52:16.839 security that. 0:52:16.800 --> 0:52:19.240 We have and refuse it into the fabric of the network, 0:52:19.560 --> 0:52:21.920 that's when you're really moving the needl And so when 0:52:21.960 --> 0:52:24.680 you think about Cisco, you see that we bring both 0:52:24.680 --> 0:52:25.000 of these. 0:52:25.040 --> 0:52:27.040 You know, we've been doing networking for the past forty. 0:52:26.880 --> 0:52:27.520 Years long time. 0:52:27.600 --> 0:52:29.839 We've been doing security for a pretty long time too. 0:52:30.040 --> 0:52:32.640 But when you start to combine those two things in 0:52:32.680 --> 0:52:35.920 a single place, man, like we've got we're miles ahead 0:52:36.000 --> 0:52:37.239 of everybody else that's out. 0:52:37.120 --> 0:52:38.239 There thirty seconds. 0:52:38.360 --> 0:52:40.759 What's surprising you that you're hearing at this event, like 0:52:40.760 --> 0:52:43.319 we're just blown away and the conversation just get about 0:52:43.320 --> 0:52:45.799 thirty seconds, Like what are you hearing as kind of 0:52:45.800 --> 0:52:47.160 a dynamic narrative. 0:52:47.320 --> 0:52:49.560 One of the core things that I'm seeing that's that's 0:52:49.640 --> 0:52:52.719 really surprising is the number of customers that are implementing 0:52:52.800 --> 0:52:56.600 AI infrastructure projects inside of their own enterprise environments. They 0:52:56.719 --> 0:53:00.200 realize that AI cannot be somebody else's AI. AI has 0:53:00.239 --> 0:53:02.279 to be their own and they want to run this 0:53:02.480 --> 0:53:04.520 inside of their own data centers, and that to me 0:53:05.000 --> 0:53:08.680 is very welcome, and I'm very happily surprised by that 0:53:08.800 --> 0:53:09.840 because we're ready. 0:53:09.640 --> 0:53:10.080 To help them. 0:53:10.160 --> 0:53:12.719 So that means a lot of on site on premise, right, 0:53:12.800 --> 0:53:13.520 It's exactly right. 0:53:13.960 --> 0:53:15.319 It's not all up in the cloud. 0:53:15.120 --> 0:53:16.960 Not all up in the cloud, because they have lots 0:53:16.960 --> 0:53:19.440 and lots of this data that's proprietary that's sitting inside 0:53:19.480 --> 0:53:21.520 of their own environments that they're not quite ready to 0:53:21.560 --> 0:53:22.600 push it into the pod. 0:53:22.480 --> 0:53:25.440 Which I think is surprising. But like here, it's happening. DJ, 0:53:25.480 --> 0:53:26.920 thank you so much. Great way to kick off our 0:53:26.960 --> 0:53:27.399 coverage here. 0:53:27.480 --> 0:53:28.480 Thank you, Carol. Thanks dam. 0:53:28.880 --> 0:53:32.520 DJ Sampath, Senior vice president of Cisco's AI Software Platform Group. 0:53:33.960 --> 0:53:37.799 This is the Bloomberg Business Week Daily podcast. Listen live 0:53:37.920 --> 0:53:40.799 each weekday starting at two pm Eastern on Apple car 0:53:40.880 --> 0:53:43.720 Play and the Android Auto with the Bloomberg Business app. 0:53:43.800 --> 0:53:46.560 You can also listen live on Amazon Alexa from our 0:53:46.600 --> 0:53:50.720 flagship New York station, just Say Alexa played Bloomberg eleven thirty. 0:53:51.800 --> 0:53:54.680 We are across the country. We're on the West Coast, 0:53:54.719 --> 0:53:58.480 staying here. Some great conversations here at Cisco Live twenty 0:53:58.480 --> 0:54:01.480 twenty five. There's so much happening around Tim and me, 0:54:01.800 --> 0:54:03.719 and we've got a great guest to kind of get 0:54:03.760 --> 0:54:08.359 into some of the enterprise connectivity issues collaboration, because that's 0:54:08.400 --> 0:54:09.200 what he oversees. 0:54:09.280 --> 0:54:11.760 Honor Rock Deingra is Senior vice president and General Manager 0:54:11.800 --> 0:54:14.839 of the Enterprise Connectivity and Collaboration Group at Cisco. He's 0:54:14.880 --> 0:54:19.040 also founding executive sponsor of Cisco's Responsible AI Initiative, which 0:54:19.040 --> 0:54:21.320 means we're going to talk a little AI as well. 0:54:21.920 --> 0:54:24.239 I want to talk you. You ever see this diverse portfolio 0:54:24.400 --> 0:54:27.879 of collaboration tools that are all under Cisco's umbrella. When 0:54:27.920 --> 0:54:30.600 you think about what collaboration in the workplace means right 0:54:30.640 --> 0:54:34.200 now with a distributed workforce, with some people working from home, 0:54:34.600 --> 0:54:36.840 some people at the office, all at the same time, 0:54:37.440 --> 0:54:39.600 what's the one solution that can bring them all together? 0:54:40.239 --> 0:54:41.920 Thank you for having me Tim on the program. 0:54:42.280 --> 0:54:45.319 So when you think about collaboration, it's more than just 0:54:45.360 --> 0:54:47.160 the tools you used to meet with people or to 0:54:47.200 --> 0:54:47.760 call people. 0:54:47.800 --> 0:54:49.600 You know, obviously those are the essential tools. 0:54:49.760 --> 0:54:52.799 Where it starts with foundational technology, which is the network 0:54:53.120 --> 0:54:55.960 you want to make sure that everyone can connect seamlessly 0:54:56.000 --> 0:54:57.959 and securely to the network first, no. 0:54:57.880 --> 0:54:58.959 Matter where they're working from. 0:54:59.120 --> 0:55:01.680 And you know, our definitely of the workplace is quite expansive, 0:55:01.719 --> 0:55:04.280 and we talk about a regular office, we talk about 0:55:04.320 --> 0:55:07.200 a retail store, a factory floor, or your home or 0:55:07.239 --> 0:55:07.520 your car. 0:55:07.600 --> 0:55:09.160 Wherever you work from is a workplace. 0:55:09.440 --> 0:55:12.440 And so it starts with foundational elements of connectivity and 0:55:12.480 --> 0:55:14.759 then once you're connected, then it's all about delivering the 0:55:14.800 --> 0:55:16.839 best possible experience. And so one of the things that 0:55:16.840 --> 0:55:20.160 Cisco has been innovating in is this concept of distance zero. 0:55:20.560 --> 0:55:21.840 And the idea is very simple. 0:55:22.080 --> 0:55:23.719 When you're meeting with other people who are not in 0:55:23.760 --> 0:55:25.799 the same room with you, it should feel like there's 0:55:25.840 --> 0:55:28.680 no distance between you. And so we've been working on technology, 0:55:28.920 --> 0:55:31.920 whether that is video conferencing technology, whether that is services 0:55:31.920 --> 0:55:35.680 that we deliver to amazing experiences that bring people closer to. 0:55:35.760 --> 0:55:39.080 What's the biggest hiccup that prevents people from actually experiencing 0:55:39.120 --> 0:55:41.680 distance zero? Is it connectivity issues? 0:55:42.000 --> 0:55:43.919 So I think it's a mix of things, right, So, first, 0:55:43.920 --> 0:55:46.600 this connectivity has to be rock solid, and you know, 0:55:46.640 --> 0:55:49.040 when you're thinking about the diversity of spaces that we're 0:55:49.040 --> 0:55:52.239 talking about, sometimes you don't have a solid Wi Fi 0:55:52.360 --> 0:55:54.879 in a conference like this, it can be very tricky Hotel. 0:55:54.640 --> 0:55:59.440 As an example, like getting gay dropped on right the 0:55:59.440 --> 0:56:01.680 computer with spine the phone was and it was like 0:56:02.400 --> 0:56:04.280 it was actually really really hard to work. 0:56:04.800 --> 0:56:07.960 Yeah, we take connectivity for granted, but it's actually still 0:56:08.040 --> 0:56:10.720 very complex, and especially for people who build and manage 0:56:10.719 --> 0:56:14.360 these networks, the complexity is only growing with emergence of 0:56:14.400 --> 0:56:16.799 AI agents and digital. 0:56:16.520 --> 0:56:18.759 Workers in the workplace, It's only going to get more complicated. 0:56:18.760 --> 0:56:21.680 So we're ready focused on how do we deliver amazing. 0:56:21.320 --> 0:56:23.759 Experiences for people who are connecting, but how do you 0:56:23.760 --> 0:56:26.440 make it easier for it to manage it all under ug. 0:56:26.640 --> 0:56:32.200 Our networks generally ready for AI or would you say no, I. 0:56:32.160 --> 0:56:34.719 Would say they're not ready right now. And here's why 0:56:34.800 --> 0:56:36.960 I say that. Look, everyone can feel that this is 0:56:37.000 --> 0:56:40.400 transformittive technology and we're at the beginning of a major 0:56:40.440 --> 0:56:44.200 technology shift. When you look back at other technology disruptions, 0:56:44.239 --> 0:56:48.440 you know, the beginning of the Internet, mobile devices, cloud computing, 0:56:49.239 --> 0:56:51.560 it causus to take a step back and reimagine how 0:56:51.560 --> 0:56:54.600 network should be built and managed. And AI is much 0:56:54.600 --> 0:56:57.440 bigger than that. When you think about the proliferation of 0:56:57.560 --> 0:57:00.839 AI agents in the workforce, digital work that are doing 0:57:00.920 --> 0:57:03.919 human like work. You know, they're communicating and doing work 0:57:04.000 --> 0:57:07.560 like us, but at machine speed and scale. So the 0:57:07.600 --> 0:57:11.640 networks have to really deal with an influx of much 0:57:11.680 --> 0:57:15.839 bigger traffic patterns and security soface cities that are exploding there. 0:57:15.920 --> 0:57:17.200 Well, one thing I want to ask you. I know 0:57:17.240 --> 0:57:19.720 we're like we bought, although we're like dying to ask questions. 0:57:19.880 --> 0:57:21.040 I am curious. 0:57:20.680 --> 0:57:23.400 About because we keep thinking about the Capex spand right 0:57:23.440 --> 0:57:26.320 and all that is AI, But I'm also thinking about 0:57:26.840 --> 0:57:28.800 are they not going to do the spend because they're 0:57:28.800 --> 0:57:31.600 worried about the power being there for all the AI? 0:57:31.840 --> 0:57:34.320 And I use the term AI loosely. Right, there's a 0:57:34.320 --> 0:57:38.280 lot going on, but is the power not necessarily there 0:57:38.680 --> 0:57:40.720 and the systems there? We keep doing some reporting on 0:57:40.760 --> 0:57:42.880 that front that's going to slow some of that spend. 0:57:43.400 --> 0:57:45.120 So I think, first of all, I think this is 0:57:45.160 --> 0:57:47.480 going to be a central technology. This is almost like 0:57:47.680 --> 0:57:49.640 if you ask someone to do you want connection to 0:57:49.680 --> 0:57:51.200 the Internet, of course the answer is yes. 0:57:51.240 --> 0:57:52.600 So this is not going to be optional. 0:57:53.040 --> 0:57:55.720 Organizations have to figure out how to enable their workforce 0:57:55.760 --> 0:57:57.920 with AI tooling, But how do you do that in 0:57:57.960 --> 0:58:00.640 a scalable fashion? That's really the question. And I think 0:58:00.640 --> 0:58:03.120 there are two parts to this power equation. So one 0:58:03.160 --> 0:58:06.200 is for training models. These large data centers that are 0:58:06.240 --> 0:58:09.240 being built out around the world to create these models, 0:58:09.400 --> 0:58:12.080 they are very power hungry. But when you think about 0:58:12.240 --> 0:58:15.840 deploying your applications in your office environment, you have to 0:58:15.920 --> 0:58:20.800 make sure that even there you're building scalable and devices 0:58:20.800 --> 0:58:23.920 that are power efficient, and that's what we're focused on 0:58:24.000 --> 0:58:26.400 with the number of new product announcements that we made here. 0:58:26.840 --> 0:58:29.600 These network devices, whether there's the switches or routers or 0:58:29.640 --> 0:58:32.520 wireless access points, they're built to be very efficient from 0:58:32.560 --> 0:58:33.760 a follow consumption point of view. 0:58:33.840 --> 0:58:37.240 Because you over see this portfolio of tools that are 0:58:37.360 --> 0:58:41.200 meant for helping collaboration across different areas, you must have 0:58:41.240 --> 0:58:44.680 some really cool statistics when it comes to who's working 0:58:44.680 --> 0:58:47.400 from home, who's returning to the office. We've been talking 0:58:47.400 --> 0:58:49.880 a lot about this, even five years in past COVID. 0:58:50.800 --> 0:58:53.560 Even in London, for example, many banks are facing a 0:58:53.560 --> 0:58:56.600 shortage of desks because of a real estate squeeze, but 0:58:56.600 --> 0:58:58.440 they're trying to get people to come back into the office, 0:58:58.440 --> 0:59:00.960 so there's this tension happening there. What are the patterns 0:59:01.000 --> 0:59:02.600 that you're seeing emerge in different parts of the world 0:59:02.640 --> 0:59:04.800 right now when it comes to return to the office, Yeah. 0:59:04.640 --> 0:59:06.800 So I think most companies have settled into a rhythm. 0:59:07.040 --> 0:59:09.520 Most companies have people coming back into the office at 0:59:09.600 --> 0:59:11.760 least part of the week. Now, it varies quite a 0:59:11.800 --> 0:59:13.960 bit across the globe, and it also depends on the 0:59:14.040 --> 0:59:16.919 organizational culture. But what we're seeing is most companies that are 0:59:16.920 --> 0:59:18.680 back in the office is two to three days a week, 0:59:18.720 --> 0:59:22.520 at least in the United States, there is generally a 0:59:22.720 --> 0:59:25.240 culture of remote work and hybrid work, much more than 0:59:25.240 --> 0:59:27.000 what we see in the rest of the world. But 0:59:27.280 --> 0:59:29.360 even here, most companies have settled. 0:59:29.040 --> 0:59:29.800 Into a rhythm. 0:59:30.040 --> 0:59:32.360 Now, what's essential is even if people are in the 0:59:32.400 --> 0:59:34.840 office that's three days a week, there are other people 0:59:34.840 --> 0:59:36.920 who are remote, and you might be working outside of 0:59:36.960 --> 0:59:39.720 for the organization with partners and customers. So there's always 0:59:39.720 --> 0:59:41.440 going to be people who are remote who are not 0:59:41.480 --> 0:59:44.080 in the same room as yourself. And this is why 0:59:44.200 --> 0:59:46.280 at Cisco we are very focused on how to build 0:59:46.280 --> 0:59:48.720 the right technology so it feels like there's no distance 0:59:48.760 --> 0:59:49.120 between you. 0:59:49.200 --> 0:59:51.760 So mobility within the enterprise, is it going to impact 0:59:51.840 --> 0:59:54.880 more the people who are working from home already or 0:59:54.960 --> 0:59:57.760 is it going to be more influential on the people 0:59:57.800 --> 0:59:58.800 back at the office. 0:59:58.960 --> 1:00:01.280 I think it's both, right. I think it is really 1:00:01.360 --> 1:00:02.840 a hierarchy of needs for employees. 1:00:02.880 --> 1:00:03.040 Right. 1:00:03.080 --> 1:00:05.360 It starts with if I'm in the office or in 1:00:05.400 --> 1:00:07.840 my home office, do I have the tools, the basic 1:00:07.920 --> 1:00:10.400 tools to get my job done? So that's number one, right, 1:00:10.440 --> 1:00:12.800 And that's where connectivity and you know, meeting tools and 1:00:12.800 --> 1:00:15.080 things like that come up. But after that, it's how 1:00:15.120 --> 1:00:17.040 do I collaborate with my team? How do I get 1:00:17.080 --> 1:00:19.800 more creative? How do I actually get creative work done 1:00:20.000 --> 1:00:21.800 when we may or may not be in the same room. 1:00:22.320 --> 1:00:24.480 And if I get to the office, I want to 1:00:24.480 --> 1:00:27.200 make sure it's worth my commute to the office that 1:00:27.320 --> 1:00:29.800 I can find a desk to sit with my team, 1:00:30.000 --> 1:00:31.640 I can find a confrom room when I needed. 1:00:32.040 --> 1:00:34.200 The enquirement has to be very supportive. If I'm going 1:00:34.280 --> 1:00:35.520 to make the strip through the office. 1:00:35.240 --> 1:00:37.320 I think about kind of the connectivity, connectivity that we 1:00:37.320 --> 1:00:39.160 have as we go from office to office. Right, whether 1:00:39.160 --> 1:00:42.080 it's printers, I mean, something basic, but we can it works, 1:00:42.240 --> 1:00:44.440 but exactly we pop into a system or and. 1:00:44.440 --> 1:00:49.840 Everything I try to do to make it not working. 1:00:47.960 --> 1:00:50.560 Able to remote access like it is pretty amazing. 1:00:50.600 --> 1:00:52.520 It's a reason why they have us practice that stuff 1:00:53.280 --> 1:00:55.760 serious requirement. Hey, we don't have a ton of time 1:00:55.800 --> 1:00:56.920 with you, but I want to talk a little bit 1:00:56.920 --> 1:00:59.640 about AI in a couple of different context One about 1:00:59.680 --> 1:01:02.680 AI embedded in WebEx and call center products and sort 1:01:02.680 --> 1:01:04.520 of the progress that you're making there if you're able 1:01:04.560 --> 1:01:06.360 to monetize it. And then I want to get to 1:01:06.720 --> 1:01:08.480 save AI in just a second. But first talk with 1:01:08.600 --> 1:01:09.840 WebEx and the collaboration for it. 1:01:09.920 --> 1:01:12.480 Right, So WebEx really has kind of two parts of 1:01:12.480 --> 1:01:15.000 the portfolio. One is really focused on meetings and callings 1:01:15.040 --> 1:01:17.000 and things like that, and that's where AI is really 1:01:17.040 --> 1:01:19.800 an assistant for you. It can generate meeting summarys, it 1:01:19.800 --> 1:01:21.560 can take notes for you, it can do things for 1:01:21.600 --> 1:01:24.880 you in the contact center space, in the customer experience space. 1:01:25.200 --> 1:01:28.880 We have now new AI based agents. These agents are 1:01:28.880 --> 1:01:32.800 completely autonomous. They can talk to a human as a human. 1:01:32.880 --> 1:01:33.680 It's pretty crazy. 1:01:33.800 --> 1:01:34.840 So they are voice. 1:01:34.680 --> 1:01:36.720 Enabled, but if you want to chat with it, of course, 1:01:36.760 --> 1:01:38.800 you know, chatbots have been around for a long time. 1:01:39.240 --> 1:01:41.280 What's different about these agents now is they can. 1:01:41.200 --> 1:01:43.960 Actually take actions, so they'll understand your intent and you know, 1:01:44.000 --> 1:01:45.800 if you say, look, hey, I want to reschedule my 1:01:45.840 --> 1:01:47.800 doctor's appointment, They'll go ahead and do that for you, 1:01:47.920 --> 1:01:51.160 send your notification as a confirmation. And we're seeing a 1:01:51.200 --> 1:01:54.040 tremendous demand for this technology and this is starting to 1:01:54.040 --> 1:01:56.320 make a lot of difference in the customer service ex fegion. 1:01:56.320 --> 1:01:57.520 So they're not going to get added TODE when I 1:01:57.520 --> 1:01:58.840 call my doctor's office and. 1:01:58.800 --> 1:01:59.800 Like they have. 1:02:00.200 --> 1:02:02.880 It's like the Seinfeld where you know, like your folder 1:02:02.880 --> 1:02:04.680 has been flagged already, so you get directly. 1:02:04.880 --> 1:02:07.080 I definitely have been flagged in a good way and 1:02:07.080 --> 1:02:07.680 in a bad way. 1:02:07.720 --> 1:02:10.400 Public I want to ask you though, during COVID you 1:02:10.440 --> 1:02:14.200 mentioned WebEx. I mean, why didn't you guys take better 1:02:14.280 --> 1:02:17.960 advantage or more advantage during COVID. Do you just talk 1:02:18.000 --> 1:02:20.560 to us a little bit about during the lockdowns be 1:02:20.800 --> 1:02:22.000 you know, just like Zoom did. 1:02:22.560 --> 1:02:22.840 Yeah. 1:02:22.880 --> 1:02:26.680 So, I think our focus has always been helping large 1:02:26.760 --> 1:02:29.560 enterprises connect their employees and we were very successful in 1:02:29.600 --> 1:02:32.080 that space and we continue to do that. CISCOULD never 1:02:32.160 --> 1:02:37.960 really took this COVID as an opportunity to go into consumers. 1:02:37.960 --> 1:02:41.520 We did make WebEx available for free to lots of governments. 1:02:41.600 --> 1:02:44.840 Charitable organization educational institute. So we did that, but our 1:02:44.880 --> 1:02:48.080 focus was very much around being an enterprise product. 1:02:48.480 --> 1:02:49.240 Now, when you think. 1:02:49.120 --> 1:02:51.960 About where we've come along with the event of AI 1:02:52.200 --> 1:02:54.880 with autonomous agents as part of the WebEx and all 1:02:54.920 --> 1:02:56.880 of the stuff that I was talking about earlier about 1:02:56.880 --> 1:02:59.520 distance zero and conference room, I believe that the product 1:02:59.520 --> 1:03:01.920 has come up very long way and it's amazing, and 1:03:01.960 --> 1:03:03.960 so you actually have to see to believe it. A 1:03:04.000 --> 1:03:07.000 lot of people don't haven't experienced it in a while, 1:03:07.040 --> 1:03:08.920 so I would encourage anyone to take a look and 1:03:08.920 --> 1:03:09.919 see how far we've come. 1:03:10.320 --> 1:03:14.800 I mentioned that you're founding executive sponsor Cisco's Responsible AI Initiative, Right, 1:03:15.280 --> 1:03:19.040 what is responsible AI and what's irresponsible AI? And I 1:03:19.080 --> 1:03:21.440 want you to answer the irresponsible part first. 1:03:21.800 --> 1:03:25.760 Yeah, So when we started this journey several years ago, 1:03:25.880 --> 1:03:28.960 generative AI is obviously the you know, the trend right now, 1:03:29.000 --> 1:03:31.000 but we started this even before people are talking about 1:03:31.040 --> 1:03:33.360 GENERTI VII. The idea really was how do you make 1:03:33.360 --> 1:03:36.280 sure that bias doesn't creep into AI systems, that if 1:03:36.320 --> 1:03:39.440 AI is starting to make autonomous decisions that are consequential, 1:03:39.880 --> 1:03:40.360 that those. 1:03:40.240 --> 1:03:41.960 Are done in a responsible way. And how do you 1:03:42.000 --> 1:03:43.720 put guardrails around those systems. 1:03:44.080 --> 1:03:46.520 When we are building technology, how do we make sure 1:03:46.560 --> 1:03:49.000 this technology is used more for good than for the 1:03:49.080 --> 1:03:52.560 various reasons. So that's really the genesis of that program, 1:03:52.680 --> 1:03:54.560 and then we came up with a few principles and 1:03:54.560 --> 1:03:57.919 then that translated into development guidelines for our peak. 1:03:57.960 --> 1:03:59.840 Can you, I mean, when you look across the landscape, 1:03:59.880 --> 1:04:02.919 can give us examples of AI that's not responsible, something 1:04:02.920 --> 1:04:04.240 that can concerns you out there? 1:04:04.320 --> 1:04:07.360 Well, I'll tell you, Like these systems that are starting 1:04:07.360 --> 1:04:09.520 to show up in workplaces right now, they are not 1:04:09.840 --> 1:04:13.400 very deterministic. You know, they're powered by language models that 1:04:13.440 --> 1:04:15.840 can hallucinate, so they can say bad things, they can 1:04:15.880 --> 1:04:16.520 make things up. 1:04:16.960 --> 1:04:22.000 And so you're talking about deployment of potentially tools that 1:04:22.080 --> 1:04:27.080 everybody knows about across enterprises and not living up to 1:04:27.120 --> 1:04:29.200 the expectations that the customers have. 1:04:29.840 --> 1:04:31.800 I'll give you yes, and I'll give you a couple 1:04:31.840 --> 1:04:34.280 of examples. So imagine if there was an automated system 1:04:34.280 --> 1:04:37.600 that was approving your mortgage application and that system just 1:04:38.240 --> 1:04:41.200 decided to decline your application for reasons that are not 1:04:41.240 --> 1:04:43.640 even explainable because this algorithm is a black boss. 1:04:43.760 --> 1:04:45.400 Well, that is not very good. So you want to 1:04:45.400 --> 1:04:47.440 make sure that there's a way to protect against that. 1:04:47.960 --> 1:04:50.720 Or imagine hate speech creeping into this chatbot that you're 1:04:50.720 --> 1:04:53.280 interfacing with. There's in a customer service scenario, how do 1:04:53.280 --> 1:04:55.800 you protect against those things? You can't do that if 1:04:55.840 --> 1:04:59.080 you haven't systematically thought about being responsible with these systems, 1:04:59.280 --> 1:05:01.280 and that is where that program comes in Handy. 1:05:01.800 --> 1:05:04.600 I don't know how you feel about this, but it 1:05:04.720 --> 1:05:09.919 seems like people accept answers from lms in a way 1:05:09.960 --> 1:05:13.040 they didn't accept answers from Google. From Google in the 1:05:13.040 --> 1:05:15.280 early part of search. Do you feel that way? 1:05:15.560 --> 1:05:17.640 I think yes, And I think there's also emerging research 1:05:17.640 --> 1:05:19.800 that people are nicer to AI than they are two people, 1:05:20.120 --> 1:05:21.080 which is interesting. 1:05:21.120 --> 1:05:24.160 I think they like feel like they're like this relationship 1:05:24.200 --> 1:05:25.200 with this thing. 1:05:25.400 --> 1:05:27.320 Something'll be pushing back on chat gip too. 1:05:27.400 --> 1:05:30.720 Yeah, I'm often cross referencing, like going somewhere else and 1:05:30.800 --> 1:05:31.360 like checking out that. 1:05:31.600 --> 1:05:34.040 This is why it is really important that we build trustworthy, 1:05:34.200 --> 1:05:36.640 worthy systems, and then we go out of our way 1:05:36.640 --> 1:05:38.440 to make sure that you can trust the response that 1:05:38.440 --> 1:05:39.600 are getting out of these systems. 1:05:39.640 --> 1:05:42.080 This is why these programs are critical. 1:05:41.720 --> 1:05:45.280 Anor like I think about right, So we Google and 1:05:45.320 --> 1:05:48.080 we do trust our responses and there are reviews, Like 1:05:48.160 --> 1:05:50.240 there's different ways of kind of checking on it. 1:05:50.480 --> 1:05:53.400 What will be the gut check on llms? Will there 1:05:53.400 --> 1:05:56.960 be rating systems? Will there be like so, how does 1:05:57.000 --> 1:05:57.520 that progress? 1:05:57.840 --> 1:05:57.960 Right? 1:05:58.000 --> 1:05:59.440 So, one of the things that we are doing here 1:05:59.440 --> 1:06:01.560 at Cisco earlier in the year, we announced a product 1:06:01.560 --> 1:06:04.600 called AI Defense, and the idea is very simple. First, 1:06:04.600 --> 1:06:07.840 it starts with observing how people are using these applications, 1:06:08.040 --> 1:06:09.960 and a second, you can start to put some guardrails 1:06:10.000 --> 1:06:12.320 so you can start to sanitize the inputs that people 1:06:12.320 --> 1:06:15.280 are getting to these large legit models. You can also 1:06:15.320 --> 1:06:16.880 do the same thing in the other way around. So 1:06:17.200 --> 1:06:20.320 for example, you wanted to protect people from hate speech, 1:06:20.360 --> 1:06:22.240 you can put those type of guardrails. You wanted to 1:06:22.280 --> 1:06:25.640 make sure that these models are not hallucinating and not 1:06:25.680 --> 1:06:29.280 giving you wrong answers, you can start to put guards 1:06:29.280 --> 1:06:31.360 around that. And so you will see a lot of 1:06:31.400 --> 1:06:34.520 these tools emerged and the models themselves are getting better 1:06:34.760 --> 1:06:36.000 with these type of productions. 1:06:36.160 --> 1:06:37.480 But I think there's always going to be a. 1:06:37.480 --> 1:06:39.520 Need to have tools that you can control as an 1:06:39.600 --> 1:06:43.720 organization that not only comply with the law of the land, 1:06:43.960 --> 1:06:46.440 but also with your have values, with your policies, and 1:06:46.440 --> 1:06:47.840 so it's important to have those types of tools. 1:06:47.880 --> 1:06:49.600 Yeah, it's interesting. So I spent a lot of time 1:06:49.640 --> 1:06:52.840 with chatchipt, a lot of time with anthropics Claude. And 1:06:53.640 --> 1:06:56.720 you know one thing that I've noticed about Claude, and 1:06:56.800 --> 1:06:59.840 this is Sonnet for it says, well playing with it's 1:06:59.880 --> 1:07:02.440 like pull this up and says Claude can make mistakes, 1:07:02.440 --> 1:07:06.480 Please double check responses, whereas there's no, there's not necessarily 1:07:06.560 --> 1:07:09.000 that same disc that's after every answer with claud You 1:07:09.000 --> 1:07:11.800 don't have that same answer with chat GPT, with Quad, 1:07:12.040 --> 1:07:13.680 they won't generate images for you. 1:07:14.200 --> 1:07:16.000 Do we have it with even like Google. 1:07:16.800 --> 1:07:18.600 With Google's AI feature. 1:07:19.320 --> 1:07:20.480 Like normal search? 1:07:20.880 --> 1:07:22.640 Well normally, but I feel like that's just in our 1:07:22.720 --> 1:07:25.880 DNA as people who search for things like I feel 1:07:25.880 --> 1:07:28.480 like I feel like Internet culture, we are taught to 1:07:28.480 --> 1:07:30.800 be skeptical of what you find on the Internet. Yeah, 1:07:31.120 --> 1:07:33.480 we're not necessarily taught to be skeptical of the answers 1:07:34.440 --> 1:07:36.520 that these lms are giving us. Is that wrong? 1:07:37.080 --> 1:07:39.440 Well, I think there are different companies who are taking 1:07:39.480 --> 1:07:41.880 different approaches. So do you just pointed out with what 1:07:41.960 --> 1:07:43.880 you saw on Claude? So I think there is a 1:07:43.960 --> 1:07:46.760 need to drive more of illness, that you should not 1:07:46.840 --> 1:07:48.920 blindly trust what you get out of these systems, and 1:07:49.120 --> 1:07:52.040 you should always have sort of a skeptical mindset for 1:07:52.040 --> 1:07:54.640 for these type of things. But companies who are putting 1:07:54.680 --> 1:07:56.520 these disclaimers, I think they are doing the right thing 1:07:56.640 --> 1:08:00.440 by making the making the user of challenges. 1:08:00.520 --> 1:08:03.160 We're speaking with anurag Denngra, senior vice president and the 1:08:03.240 --> 1:08:06.480 general manager of the Enterprise Connectivity and Collaboration Group at Cisco. 1:08:06.680 --> 1:08:09.080 So I'm just thinking, you know, our audience is a 1:08:09.120 --> 1:08:11.720 smart one. It's an investor audience. I mean when you 1:08:11.760 --> 1:08:14.680 think about you know, when they're looking at companies who 1:08:14.720 --> 1:08:18.519 are embracing AI and building out their infrastructure, what do 1:08:18.560 --> 1:08:20.519 they want to see from their companies to make sure 1:08:20.520 --> 1:08:23.000 that they are doing that well. So, like, what's your 1:08:23.360 --> 1:08:26.599 thinking about what businesses should be doing to create safe, 1:08:26.640 --> 1:08:28.640 secure AI infrastructure? 1:08:28.760 --> 1:08:30.160 Right, So the first thing I'll say is you want 1:08:30.200 --> 1:08:32.360 to make sure that your infrastructure is ready to deploy 1:08:32.439 --> 1:08:37.040 AI at scale, because this is being the different Deploying 1:08:37.080 --> 1:08:39.160 AI could be the difference between you being a leader 1:08:39.200 --> 1:08:41.840 in your space and being irrelevant, and so it is 1:08:41.960 --> 1:08:44.880 very important to start with what do I need in terms. 1:08:44.760 --> 1:08:45.840 Of network connectivity. 1:08:46.360 --> 1:08:48.760 How do I have scalable networks that are not just 1:08:48.840 --> 1:08:51.639 ready for the traffic that you're running on them today, 1:08:51.960 --> 1:08:54.640 but the use case that AI is going to unlock tomorrow. 1:08:54.960 --> 1:08:56.040 How do you secure it? 1:08:56.360 --> 1:08:58.160 This is why all the announcements that we made here 1:08:58.160 --> 1:09:01.679 at Cisco I are really about AI, the secure networking products, 1:09:01.960 --> 1:09:04.479 scalable devices, security at the core of the network. 1:09:04.520 --> 1:09:05.400 So that's number one. 1:09:05.680 --> 1:09:08.559 Second, with applications like AI defens that I was talking 1:09:08.560 --> 1:09:11.519 about earlier, Yeah, the start to put guard rails around safe. 1:09:11.280 --> 1:09:12.400 And secure use of AI. 1:09:12.880 --> 1:09:15.280 And then if you are in the business of building applications, 1:09:15.360 --> 1:09:17.960 building products, then I would encourage every company to think 1:09:17.960 --> 1:09:20.320 about how you're gonna protect your systems. How are you 1:09:20.360 --> 1:09:22.240 gonna make sure that your systems are used for good. 1:09:22.560 --> 1:09:24.960 This is where programs like the Responsible I program come 1:09:25.000 --> 1:09:25.799 in interplay. 1:09:25.880 --> 1:09:28.000 I feel like, especially with publicly health companies, will be 1:09:28.120 --> 1:09:30.799 like a whole new section, like when they either report 1:09:30.880 --> 1:09:32.960 or something right like that we will be dealing with 1:09:33.320 --> 1:09:35.880 to get an idea of how safe and secure their 1:09:35.920 --> 1:09:36.479 systems are. 1:09:36.920 --> 1:09:40.560 Yeah, I think in some ways it's gonna be like security. Yeah, 1:09:40.600 --> 1:09:44.400 and you know, As these these challenges become more more 1:09:44.439 --> 1:09:46.720 well known, As companies become more aware, they're start to 1:09:46.840 --> 1:09:50.479 demand systems that can provide the visibility on what's happening 1:09:50.920 --> 1:09:52.320 with the use of these sools. 1:09:52.360 --> 1:09:55.360 It's definitely a new world order, but really fascinating. An Eric, 1:09:55.360 --> 1:09:57.400 Thank you so much, covered so much ground. Thank you, 1:09:57.439 --> 1:09:59.240 Thank you, good luck for having good luck at the 1:09:59.439 --> 1:10:02.920 good luck at the Steve Rakdingras, Senior Vice President, General Manager, 1:10:03.000 --> 1:10:04.920 Enterprise Connectivity and Collaboration. 1:10:05.080 --> 1:10:12.639 Here at Cisco Live twenty twenty five, you. 1:10:12.600 --> 1:10:16.479 Are listening to the Bloomberg Business Weekdaily podcast. Catch us 1:10:16.560 --> 1:10:20.000 Live weekday afternoons from two to five pm Eastern. Listen 1:10:20.040 --> 1:10:23.599 on Applecarplay and Android Auto with the Bloomberg Business app, 1:10:23.760 --> 1:10:26.320 or watch us Live on YouTube. 1:10:26.840 --> 1:10:30.439 We're highlighting some of our favorite conversations from Cisco Live 1:10:30.560 --> 1:10:31.439 twenty twenty five. 1:10:31.640 --> 1:10:31.800 Now. 1:10:31.840 --> 1:10:35.120 As President chief Product Officer at Cisco G two, Patel 1:10:35.280 --> 1:10:38.320 is responsible for charting the path forward for the company 1:10:38.360 --> 1:10:41.880 through all the changes and the growth of artificial intelligence. 1:10:42.000 --> 1:10:42.599 It's a lot. 1:10:42.760 --> 1:10:44.880 We spoke to him at the conference about everything going 1:10:44.880 --> 1:10:48.440 on at Cisco, including why the event itself is so important. 1:10:48.600 --> 1:10:50.200 Look, these are our customers. 1:10:50.200 --> 1:10:54.160 There are partners and their companies who are considering buying 1:10:54.160 --> 1:10:56.400 Cisco technology, and one of the things that we want 1:10:56.439 --> 1:10:58.519 to make sure that we're very clear with is what 1:10:58.560 --> 1:11:00.800 are the core problems we're sol and what are the 1:11:00.880 --> 1:11:02.840 key innovations that we're making. And we want to make 1:11:02.880 --> 1:11:05.320 sure that we can provide that to them and have 1:11:05.439 --> 1:11:08.120 them talk to the technical experts so that they can 1:11:08.160 --> 1:11:11.040 actually learn about the products and you know, you know, 1:11:11.120 --> 1:11:14.759 kind of pressure testimony they're here. We're in a really 1:11:14.800 --> 1:11:18.240 interesting place right now because we're in the next era 1:11:18.360 --> 1:11:20.439 of AI. So we've past two and a half years 1:11:20.439 --> 1:11:24.840 since chat GPT came about. We had this kind of 1:11:25.400 --> 1:11:27.680 seismic shift that happened in the industry, and we have 1:11:27.800 --> 1:11:30.920 these chatbots that could intelligently answer questions that we. 1:11:30.880 --> 1:11:33.280 Had, and we're now going to this next. 1:11:33.040 --> 1:11:36.000 Era where there's going to be agents that can conduct 1:11:36.040 --> 1:11:39.639 tasks and jobs fully autonomously on our behalf that initially 1:11:39.640 --> 1:11:42.519 they'll start working by themselves for a couple hours, and 1:11:42.600 --> 1:11:44.720 then over time they might be a couple couple of 1:11:44.800 --> 1:11:46.479 days and then a couple of months and a couple 1:11:46.520 --> 1:11:49.920 of quarters, and the possibility of the kinds of problems 1:11:50.000 --> 1:11:52.320 we can solve are so amazing, and we want to 1:11:52.360 --> 1:11:55.160 make sure that we provide the infrastructure to make that happen. 1:11:55.320 --> 1:11:58.680 So are you talking about with the agentic solutions that 1:11:58.680 --> 1:12:01.200 you're talking about are you talking about in France specifically. 1:12:01.479 --> 1:12:01.839 Correct. 1:12:01.880 --> 1:12:04.920 So we've been working on, you know, working with people 1:12:04.960 --> 1:12:07.519 on making sure that we can provide the infrastructure for 1:12:07.600 --> 1:12:09.719 training for the past couple of years. 1:12:10.040 --> 1:12:12.000 And that's where a lot of the that's where a 1:12:12.040 --> 1:12:14.000 lot of the spendspen in, a lot of the spend, 1:12:14.080 --> 1:12:18.200 a lot of the rewarding by shareholders of certain companies, 1:12:18.280 --> 1:12:19.040 no question. 1:12:19.160 --> 1:12:19.960 Has been to date. 1:12:20.520 --> 1:12:22.879 But now what you're starting to see is the demand 1:12:22.960 --> 1:12:25.400 signal for inferencing is going up quite a bit. And 1:12:25.560 --> 1:12:28.479 if you think about what's happening and inferencing, when you 1:12:28.680 --> 1:12:32.000 just had an interactive mode where you would ask a chat, 1:12:32.040 --> 1:12:34.080 bought a question, well what happened is you would have 1:12:34.160 --> 1:12:38.120 spikes of peaks that you would get on compute usage 1:12:38.120 --> 1:12:41.439 and on data center usage. When you have an agent 1:12:41.680 --> 1:12:45.519 and that agent is fully autonomously and proactively working on 1:12:45.560 --> 1:12:47.639 something and they're just kind of cranking away and there's 1:12:47.680 --> 1:12:50.040 not just one agent, there's tons of agents working together. 1:12:50.240 --> 1:12:53.759 What you see is a sustained demand for inferencing capacity, 1:12:53.760 --> 1:12:58.400 and it's persistent inferencing that's needed. So your infrastructures kind 1:12:58.400 --> 1:13:01.120 of assumptions, the amount of netw bandwidth you need, the 1:13:01.160 --> 1:13:03.880 amount of you know, kind of safety and security that 1:13:03.960 --> 1:13:07.160 needs to be in play is very, very different. And 1:13:07.240 --> 1:13:10.360 so right now we're working with a lot of the 1:13:10.400 --> 1:13:12.479 governments who want to make sure that they have sovereign 1:13:12.520 --> 1:13:14.000 data centers all throughout the world. 1:13:14.320 --> 1:13:15.520 We are also working. 1:13:15.280 --> 1:13:18.679 With That's a big demand push right now, isn't it huge? 1:13:18.720 --> 1:13:22.080 Huge menbuss I was in the Middle East, Yeah, just 1:13:22.120 --> 1:13:24.720 a couple of weeks ago, and we announced partnerships with 1:13:24.840 --> 1:13:27.799 Humane and Saudi Arabia. We announced partnerships at G forty 1:13:27.800 --> 1:13:31.160 two at Stargate UAEE, And the reason for this is 1:13:31.200 --> 1:13:34.439 because there's an insatiable demand right now. If you think 1:13:34.439 --> 1:13:38.559 about what's the constraint in AI today, it's infrastructure and 1:13:38.560 --> 1:13:40.680 it's safety and security where people have to trust these 1:13:40.720 --> 1:13:42.200 systems otherwise they're not going to use them. 1:13:42.640 --> 1:13:44.280 And so those are the two big constraints. 1:13:44.320 --> 1:13:45.880 And of course the third one is a skills gap 1:13:45.880 --> 1:13:48.000 where you have to keep training people up. But the 1:13:48.040 --> 1:13:51.280 first two are pretty material and imagine if we had 1:13:51.280 --> 1:13:55.519 a world where infrastructure was not a constraint. Imagine all 1:13:55.560 --> 1:13:57.960 the problems we could solve that we're currently not able 1:13:57.960 --> 1:13:59.960 to solve because of the constraint of infrastructure. 1:14:00.120 --> 1:14:02.200 But some of those constraints are serious to you too, 1:14:02.280 --> 1:14:04.160 And I think about you as you guys are ramping 1:14:04.200 --> 1:14:07.439 up and building out and providing what customers need, whether 1:14:07.520 --> 1:14:10.120 it's enough power to do it all, how are you 1:14:10.160 --> 1:14:12.920 guys kind of balancing that you're doing what you need 1:14:12.960 --> 1:14:15.280 to be doing, but making sure everything else is there 1:14:15.640 --> 1:14:16.360 to support it. 1:14:16.560 --> 1:14:18.439 I mean, if you think about the large constraints, they 1:14:18.479 --> 1:14:22.360 compute their power because GPUs are power hungry, and then 1:14:22.360 --> 1:14:25.600 there's network bandwidth, and then there's safety and security, like 1:14:25.640 --> 1:14:27.960 those are the four kind of high level buckets. If 1:14:27.960 --> 1:14:30.960 you think about power, what we are trying to do 1:14:31.080 --> 1:14:34.080 is make sure that we can have the lowest amount 1:14:34.439 --> 1:14:38.760 of latency, the highest performance, and the most power efficiency 1:14:38.800 --> 1:14:41.360 because how long it takes for a packet to get 1:14:41.400 --> 1:14:44.400 to the GPU to get processed right really matters. And 1:14:44.439 --> 1:14:48.080 if you have idle time on a GPU, that's actually 1:14:48.120 --> 1:14:49.760 not a good thing. You want to make sure that 1:14:49.800 --> 1:14:53.479 you're keeping the GPU utilization high and so we need 1:14:53.520 --> 1:14:55.760 to make sure that we have power efficiency. Every killer 1:14:55.800 --> 1:14:58.040 water power we save is a killer water power you 1:14:58.040 --> 1:15:00.200 can give to the GPU, and then we meet need 1:15:00.200 --> 1:15:01.559 to make sure that the backups keep flowing. 1:15:01.720 --> 1:15:05.120 So capability and efficiency, you're constantly like balancing. 1:15:04.760 --> 1:15:07.439 Constantly balancing it, right, Yeah, absolutely. 1:15:07.000 --> 1:15:09.040 Because you've got to make sure it's efficient, otherwise it's 1:15:09.080 --> 1:15:11.280 not going to be financially going to make sense. 1:15:11.360 --> 1:15:13.240 That's exactly right, because if you if you don't have 1:15:13.280 --> 1:15:16.519 the right level of power efficiency. But for firstly, all 1:15:16.560 --> 1:15:18.280 of the data centers that are getting built right now, 1:15:18.320 --> 1:15:20.840 you we are running out of data centers to build 1:15:20.840 --> 1:15:21.400 in certain. 1:15:21.200 --> 1:15:22.920 Geographies because you don't have enough powers. 1:15:23.040 --> 1:15:24.920 You actually tend to go to where the power is, 1:15:25.240 --> 1:15:27.240 and data centers are getting built where the power is. 1:15:27.280 --> 1:15:29.360 So it's a very important commodity. 1:15:29.400 --> 1:15:30.320 Is that true globally? 1:15:30.600 --> 1:15:31.680 Yeah, it's absolutely. 1:15:32.320 --> 1:15:34.040 The data set like running out of places to run 1:15:34.160 --> 1:15:35.439 data centers because of lack of power. 1:15:35.520 --> 1:15:37.559 Yeah, you just need you need to be not too 1:15:37.640 --> 1:15:39.759 far from the power so that you're you know, the 1:15:39.760 --> 1:15:43.360 the entropy is less and how that works. 1:15:43.560 --> 1:15:46.519 You're good, Carol. Enthusiasm between the two of you, that 1:15:46.840 --> 1:15:48.200 holistic questions that I want to make. 1:15:48.720 --> 1:15:50.439 We said we can go as long with you two 1:15:50.479 --> 1:15:51.280 as you will give us. 1:15:51.400 --> 1:15:52.800 Yes, that is as long as you want. 1:15:52.880 --> 1:15:55.479 That is the answer. Can you talk a little bit 1:15:55.479 --> 1:15:58.479 about the relationship that you have with in video, Yes, 1:15:58.560 --> 1:16:00.479 because I think a lot of in best of trying 1:16:00.520 --> 1:16:06.440 to understand from a customer perspective, from just a relationship perspective, 1:16:06.720 --> 1:16:07.679 what can you tell us? 1:16:07.960 --> 1:16:11.360 So we have enjoyed a very meaningful partnership with them 1:16:11.400 --> 1:16:14.280 for the past six years. You know, we six years 1:16:14.280 --> 1:16:16.599 ago we decided that we're going to use the nvidio 1:16:16.680 --> 1:16:19.920 chip sets and our video conferencing devices, and that made 1:16:19.960 --> 1:16:22.680 those devices very you know, kind of AI ready, and 1:16:22.760 --> 1:16:25.080 now what you see is a lot of kind of 1:16:25.080 --> 1:16:29.760 sophisticated AI capabilities are uploaded on the device itself, so 1:16:29.800 --> 1:16:31.960 that even if the device integrates for a third party 1:16:32.360 --> 1:16:34.560 like Microsoft Teams, they can benefit. 1:16:34.240 --> 1:16:36.360 From the innovations that we've made. So that's been a 1:16:36.360 --> 1:16:37.160 great partnership. 1:16:37.479 --> 1:16:40.000 What we did in the past few months, though, is 1:16:40.040 --> 1:16:42.280 we have doubled down on the partnership with data centers, 1:16:42.920 --> 1:16:46.439 and so we had announced that we have a AI 1:16:46.479 --> 1:16:49.360 factory and secure AI factory, which is basically what Nvidia 1:16:49.400 --> 1:16:52.280 has as a reference architecture, which is a suggested model 1:16:53.400 --> 1:16:56.840 mode of how companies should think about building out their infrastructure. 1:16:57.280 --> 1:17:01.800 And for the very first time they had a non Nvidia. 1:17:01.479 --> 1:17:05.599 Silicon provider that was actually part of that reference architecture, 1:17:05.760 --> 1:17:08.840 who was Cisco, And we were the first one of 1:17:08.880 --> 1:17:12.840 those that they actually incorporated into their architecture. Why is 1:17:12.880 --> 1:17:16.240 that important because customers look to nvidio to say, hey, 1:17:16.240 --> 1:17:18.880 what does your reference architecture look like? And now Cisco 1:17:19.040 --> 1:17:20.960 is part of that reference architecture. So that was the 1:17:20.960 --> 1:17:23.439 first thing. But what we've also done and what we 1:17:23.439 --> 1:17:29.400 announced today was our safety and security capabilities are pretty sophisticated, 1:17:29.720 --> 1:17:31.759 and we want to make sure that we actually tie 1:17:31.760 --> 1:17:35.120 that with Nvidia's you know, kind of efforts around if 1:17:35.160 --> 1:17:38.920 you're building an open source model and an application with 1:17:38.960 --> 1:17:44.240 an Nemo framework, we can now validate that model with Cisco. 1:17:44.320 --> 1:17:47.920 And so we aren't just helping with Nvidia and building 1:17:47.960 --> 1:17:50.920 a secure AI factory with the infrastructure and a full stack, 1:17:50.960 --> 1:17:51.880 but we're also helping. 1:17:51.920 --> 1:17:53.880 But how do you keep it secure and how do 1:17:53.920 --> 1:17:54.679 you keep it safe? 1:17:54.840 --> 1:17:56.680 And so because one of the challenges that you have 1:17:56.880 --> 1:17:59.680 is if people don't trust their AI systems, they're not 1:17:59.680 --> 1:18:01.720 going to use them, and so we want to make 1:18:01.760 --> 1:18:02.920 sure that people are trusting them. 1:18:02.920 --> 1:18:05.040 We're talking with G. Two Patel, President and chief Product 1:18:05.040 --> 1:18:05.960 officer at Cisco. 1:18:06.000 --> 1:18:09.200 We're here at Cisco Live twenty twenty five. What's the 1:18:09.240 --> 1:18:12.320 productive conversation around So much focus is on, especially when 1:18:12.320 --> 1:18:15.160 it comes tot Nvidia in their demand for tips, the 1:18:15.240 --> 1:18:18.240 hyper scalers, how much they are doing to get an 1:18:18.240 --> 1:18:20.400 idea of where we are in the AI race. But 1:18:20.439 --> 1:18:22.840 I'm also you know, you talk to you folks, and 1:18:22.880 --> 1:18:25.479 it's a lot of on premise build out. 1:18:25.600 --> 1:18:27.920 So what's the Yeah, are both okay? 1:18:28.000 --> 1:18:30.599 So what's the mix in terms of how we see 1:18:30.600 --> 1:18:31.639 this continue to grow? 1:18:31.800 --> 1:18:34.080 So I think the way that you will see this 1:18:34.400 --> 1:18:37.720 progress forward is there's three or four different models that 1:18:37.720 --> 1:18:41.400 will be out there. Firstly, one of the very counterintuitive 1:18:41.400 --> 1:18:45.200 things is hyperscalers are going to grow very rapidly, Private 1:18:45.280 --> 1:18:48.559 data centers are going to grow very rapidly, and neo clouds, 1:18:48.560 --> 1:18:52.479 which are actually AI specialists, are going to grow very opidly, and. 1:18:52.439 --> 1:18:53.560 So our service providers. 1:18:53.960 --> 1:18:56.800 So when there's you know, kind of a rising tide, 1:18:56.840 --> 1:18:59.320 all boats rise, and that's what's happening right now. 1:18:59.400 --> 1:19:02.360 Now. What is happening that's unique with. 1:19:03.000 --> 1:19:06.360 You know, data sovereignty and with you know kind of 1:19:06.400 --> 1:19:09.080 nationalistic behaviors that are kind of progressing from from a 1:19:09.080 --> 1:19:13.960 geopolitical standpoint, is there's more and more of an acceleration 1:19:14.040 --> 1:19:15.960 of demand of private data centers. 1:19:16.080 --> 1:19:18.160 Yeah, we talked about this on prem on prem. 1:19:18.520 --> 1:19:20.799 And specifically for infancing, I think for training. 1:19:21.120 --> 1:19:21.839 That's interesting. 1:19:21.920 --> 1:19:23.160 You know people might go to the cloud. 1:19:23.160 --> 1:19:24.920 Brother, do you see that as being part of a 1:19:24.960 --> 1:19:27.960 government regulation, a sovereignty issue or is it more an 1:19:27.960 --> 1:19:30.000 individual on an individual company basis. 1:19:30.040 --> 1:19:32.120 It's actually a combination of issues. It's you know, there's 1:19:32.160 --> 1:19:34.920 a sovereignty issue. There's also a data proximity issue. There 1:19:34.960 --> 1:19:38.280 might also be some companies who have enough scale where 1:19:38.560 --> 1:19:41.519 the scale itself might give them an advantage that they're like, hey, 1:19:41.680 --> 1:19:43.360 I don't need to go pay someone something. I might 1:19:43.400 --> 1:19:45.000 want to have some some of the workloads on my 1:19:45.080 --> 1:19:47.840 own premise. And so it's a combination of multiple issues. 1:19:47.880 --> 1:19:49.720 But what you are seeing is there's this kind of 1:19:49.800 --> 1:19:52.800 upsurge of demand and acceleration. The good news for us 1:19:52.880 --> 1:19:57.120 is we help the largest of hyperscalers with intra Cluster communication. 1:19:57.560 --> 1:20:01.080 You know, on on the networking side, we are also 1:20:01.160 --> 1:20:04.960 working with neocloud providers and then and then we've had 1:20:05.040 --> 1:20:07.599 relationships with service providers for the past couple of decades, 1:20:08.080 --> 1:20:11.440 and now what you're starting to see is a resurgence 1:20:11.439 --> 1:20:14.160 of demand on the enterprise that we know really really well. 1:20:14.320 --> 1:20:16.800 We've actually been working with enterprise data centers for the 1:20:16.880 --> 1:20:19.960 past forty years and now we are actually starting to 1:20:20.000 --> 1:20:23.840 see a massive resurgence because of AI inferencing demand and. 1:20:23.720 --> 1:20:25.080 The agentic workflows. 1:20:25.120 --> 1:20:27.880 When every company is starting to rethink their workflows, whether 1:20:27.920 --> 1:20:30.759 it be a BB a healthcare company, or a bank 1:20:30.840 --> 1:20:33.840 or a financial services or insurance company, every workflow is 1:20:33.840 --> 1:20:38.240 getting reimagined. Infrastructure is going to be built out everywhere, 1:20:38.280 --> 1:20:39.920 and we want to make sure that we are the 1:20:40.280 --> 1:20:43.040 common networking substrate and we are the common security and 1:20:43.080 --> 1:20:45.360 safety kind of provider across the board. 1:20:45.479 --> 1:20:45.960 So G two. 1:20:45.960 --> 1:20:48.120 In an environment where we constantly are talking about an 1:20:48.200 --> 1:20:51.439 uncertain environment because there's stuff coming at us even today 1:20:51.800 --> 1:20:54.080 as we kind of continue to watch the negotiations between 1:20:54.200 --> 1:20:57.080 US and Chinese officials over in London, how would you 1:20:57.080 --> 1:21:00.639 describe demand the CAPEX spend that you are seeing, whether 1:21:00.640 --> 1:21:04.639 it's the hyperscalers, whether it's those folks building their enterprise systems, 1:21:04.640 --> 1:21:06.280 like the different buckets that you play into. 1:21:06.600 --> 1:21:09.840 The demand signal is stronger than an ever. 1:21:09.920 --> 1:21:12.200 I've never seen anything, you know, stronger on the demand 1:21:12.280 --> 1:21:16.800 signal side, because you've you've got trillions of dollars that 1:21:16.840 --> 1:21:19.479 are going to be flowing in for these data center 1:21:19.520 --> 1:21:20.520 buildout capacities. 1:21:21.120 --> 1:21:22.719 So the demand signal is very strong. 1:21:22.840 --> 1:21:25.799 It's actually also happening globally, so it's not just happening 1:21:25.800 --> 1:21:28.080 in the US. You're starting to see demand in the 1:21:28.120 --> 1:21:30.120 Middle East, You're starting to see it in Europe, You're 1:21:30.120 --> 1:21:32.720 going to start to see it in Asia. And one 1:21:32.720 --> 1:21:34.960 of the things that's important for America is we want 1:21:35.000 --> 1:21:38.280 to make sure that American technologies are being utilized in 1:21:38.320 --> 1:21:40.719 all these data center buildouts because that's good for America 1:21:40.880 --> 1:21:44.320 and that's good for the world. Frankly, and so you know, 1:21:44.960 --> 1:21:48.080 Cisco and Nvidia and open AI and others and all 1:21:48.080 --> 1:21:51.599 of our partners, I think a MD it's extremely important 1:21:51.600 --> 1:21:53.479 that we all work together to make sure that these 1:21:55.080 --> 1:21:57.440 these kind of data center buildouts happen with our technology. 1:21:57.760 --> 1:22:00.200 You know, you're you're shocking me with the just the 1:22:00.280 --> 1:22:05.840 striking magnitude of these investments. It's what is what is 1:22:05.920 --> 1:22:08.840 not being Where's money not being spent as a result, 1:22:08.960 --> 1:22:14.040 as budgets get reallocated toward infrastructure, what's not getting money. 1:22:15.040 --> 1:22:16.799 I think what you'll find is the. 1:22:18.280 --> 1:22:21.240 In the short term, you actually have to take certain 1:22:21.280 --> 1:22:26.360 amount of dollars from existing projects and move them towards AI. 1:22:26.400 --> 1:22:28.240 And almost every company is doing that this and you know, 1:22:28.280 --> 1:22:30.240 I'm going to take twenty percent out for my existing 1:22:30.240 --> 1:22:30.960 projects move. 1:22:30.840 --> 1:22:31.559 Them towards AI. 1:22:32.720 --> 1:22:35.479 Over time, what you find is AI will get so 1:22:35.600 --> 1:22:38.479 much productivity that those twenty percent of the projects will 1:22:38.479 --> 1:22:41.400 get rehydrated. Because if you think about like, for example, 1:22:41.400 --> 1:22:44.559 we're one of the first partners with OpenAI on their 1:22:44.560 --> 1:22:48.680 codex project, which is the autonomous software Engineer. It's no 1:22:48.760 --> 1:22:51.200 longer where you just have an autocomplete where you can 1:22:51.240 --> 1:22:53.280 have an individual developer that gets productive. 1:22:53.400 --> 1:22:55.680 You can actually now tell an agent or. 1:22:55.600 --> 1:22:58.679 A group of agents, go solve a really hard problem 1:22:58.680 --> 1:23:00.880 for me and come back to me in a couple 1:23:00.840 --> 1:23:04.040 of weeks, and we'll be able to actually have a 1:23:04.080 --> 1:23:07.240 world that we are living in in relatively short you know, 1:23:07.360 --> 1:23:09.920 kind of time horizons where it'll be able to solve 1:23:09.920 --> 1:23:11.519 that problem and come back to you, and you'll still 1:23:11.520 --> 1:23:12.920 have the human in the loop that will be able 1:23:12.920 --> 1:23:14.280 to observe and that will be able to do things. 1:23:14.320 --> 1:23:17.000 But imagine what that does for the constraint we have 1:23:17.479 --> 1:23:20.240 twenty seven thousand engineers. I've never felt more constrained in 1:23:20.280 --> 1:23:23.200 my life about the ideas I have compared to the 1:23:23.240 --> 1:23:25.599 resources I have to prosecute those ideas. And we will 1:23:25.640 --> 1:23:28.479 actually get to a point where we can unlock those 1:23:28.520 --> 1:23:29.880 ideas in a very different way. 1:23:29.840 --> 1:23:31.439 What I was just gonna say. We could go on 1:23:31.479 --> 1:23:33.719 forever with G two, but apparently his team is telling 1:23:33.800 --> 1:23:36.280 us that you have to go speak there's even speaking gate. 1:23:36.360 --> 1:23:36.920 Keep going. 1:23:37.600 --> 1:23:41.000 Oh, he doesn't want to do it. He wants to 1:23:41.040 --> 1:23:41.519 hang out. 1:23:41.360 --> 1:23:43.160 With us, and you guys an't too fun. 1:23:44.520 --> 1:23:46.600 Hey, we're gonna get in trouble if we if we 1:23:46.640 --> 1:23:48.040 do that, well. 1:23:47.600 --> 1:23:49.479 I mean I'm gonna go go. 1:23:49.640 --> 1:23:51.840 I mean, I mean we're just kind of blown away 1:23:51.840 --> 1:23:54.240 every day, like what we are learning about this and 1:23:54.280 --> 1:23:56.439 how it's impacting our world. I mean, I don't know 1:23:56.520 --> 1:23:58.880 six months from now, a year from like, how should 1:23:58.920 --> 1:24:02.280 we be thinking about how dramatically this will impact everything? 1:24:02.600 --> 1:24:06.000 I think, firstly, your imagination will be challenged quite a 1:24:06.080 --> 1:24:10.400 bit because humans have a very hard time thinking exponentially 1:24:10.439 --> 1:24:11.679 for a sustained period of time. 1:24:11.960 --> 1:24:14.439 And this curve is exponential. 1:24:14.360 --> 1:24:17.160 And when it's exponential, it's not happening in a single dimension, 1:24:17.200 --> 1:24:20.080 it's happening across multiple dimensions all at once. And so 1:24:20.520 --> 1:24:22.880 if you think about it six months or twelve months 1:24:22.920 --> 1:24:26.280 or eighteen months from now, no longer are you just 1:24:26.360 --> 1:24:28.800 going to be thinking about this as a more efficient 1:24:28.880 --> 1:24:32.720 way for getting an answer. But you will have companions 1:24:32.840 --> 1:24:35.759 and sidekicks and a staff of people that are digital 1:24:35.800 --> 1:24:38.439 workers that can get a job done that you would 1:24:38.439 --> 1:24:40.200 have otherwise not had a time to do. And one 1:24:40.320 --> 1:24:42.080 important area to talk about is a lot of people 1:24:42.120 --> 1:24:44.680 worry about ISAI I going to take my job? I 1:24:44.720 --> 1:24:50.080 actually worry more about people that use AI really well. 1:24:50.160 --> 1:24:52.080 There's a higher risk of them taking your job than 1:24:52.080 --> 1:24:54.200 AI taking your job, noted, you know. 1:24:55.000 --> 1:24:57.599 And the other piece that I worry I also think 1:24:57.600 --> 1:25:01.479 about is if you actually have there's no one that 1:25:01.560 --> 1:25:03.320 I know that comes home every day and says, you 1:25:03.320 --> 1:25:06.080 know what, I've gotten everything done on my checklist, right, 1:25:06.160 --> 1:25:10.719 And so the reality is is when you there's eighty 1:25:10.720 --> 1:25:13.719 percent of the work that we do probably doesn't get 1:25:14.000 --> 1:25:16.040 checked off because we don't have time to do it. 1:25:16.439 --> 1:25:19.519 Now AI agents will start doing that. And then the 1:25:19.680 --> 1:25:23.080 final category that's the most exciting is it's AI will 1:25:23.120 --> 1:25:24.960 be able to do things that we were not able 1:25:25.000 --> 1:25:27.599 to do because it'll have original insights that don't exist 1:25:27.600 --> 1:25:28.799 in the human corpus of knowledge. 1:25:28.800 --> 1:25:31.000 And that's the area of AI, but I think is 1:25:31.040 --> 1:25:33.240 the most under hyped. G Two, we got to leave 1:25:33.280 --> 1:25:33.519 it there. 1:25:34.080 --> 1:25:36.080 Your crew is about to come on set, and where. 1:25:35.920 --> 1:25:38.200 You're to go and just where you know. 1:25:38.320 --> 1:25:41.479 I have a companion inside can but I'm ready for 1:25:41.520 --> 1:25:43.000 my AI companion. 1:25:42.560 --> 1:25:47.240 Inside than product officer as let's go here at Cisco 1:25:47.320 --> 1:25:48.519 Live twenty twenty five. 1:25:49.960 --> 1:25:55.320 This is the Bloomberg Business Week daily podcast, available on Apple, Spotify, 1:25:55.439 --> 1:25:59.160 and anywhere else you get your podcasts. Listen live weekday 1:25:59.200 --> 1:26:03.200 afternoons from two to five pm Eastern on Bloomberg dot com, 1:26:03.240 --> 1:26:07.160 the iHeartRadio app, tune In, and the Bloomberg Business App. 1:26:07.400 --> 1:26:10.160 You can also watch us live every weekday on YouTube 1:26:10.400 --> 1:26:12.559 and always on the Bloomberg terminal