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Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 1: Another busy week that started with the unrest in California
Speaker 1: over the Trump Administration's immigration policies and closed with progress
Speaker 1: on trade between the United States and two of its
Speaker 1: major trading partners.
Speaker 3: We also spend time at Cisco Live twenty twenty five
Speaker 3: in San Diego. We're going to share some of our
Speaker 3: favorite conversations from the conference.
Speaker 1: There's a lot of good ones. We're going to start
Speaker 1: this hour with trade. US Treasury Secretary Scott Bessend, Commerce
Speaker 1: Secretary Howard Lutnik, and US Trade Representative Jamison Greer were
Speaker 1: in London early this past week negotiating with officials from
Speaker 1: China in the hopes of making a major trade breakthrough.
Speaker 3: The talks lasted around twenty hours, taking up all day
Speaker 3: Monday and most of the day on Tuesday before wrapping
Speaker 3: up late that night.
Speaker 4: Yeah, it felt like.
Speaker 1: They just kept pushing on and pushing on and pushing on.
Speaker 1: We finally did hear from Secretary Lutnik and Trade Representative Greer,
Speaker 1: who finally stepped outside close to midnight in London Tuesday
Speaker 1: and talked to reporters about the high stakes negotiations and
Speaker 1: how the group finally agreed on a plan to move forward.
Speaker 1: Here's the US Commerce Secretary.
Speaker 5: First, we had to get sort of the negativity out,
Speaker 5: and now we can go forward to try to do
Speaker 5: positive trade, growing trade, and beneficial to both China and
Speaker 5: to the United States.
Speaker 3: From me, that's Commerce Secretary Howard Lutnick, just moments after
Speaker 3: leading trade negotiations in London with Chinese officials.
Speaker 1: The framework the two sides agreed upon is based around
Speaker 1: a consensus from meetings in Geneva held last month that
Speaker 1: first lowered terriffs between the two countries. At the core
Speaker 1: of the talks highly coveted rare earth minerals.
Speaker 3: As negotiations were going on, we wanted to touch base
Speaker 3: with an expert on these materials and why they're at
Speaker 3: the center of talks between the US and China, we
Speaker 3: caught up with Graceland Baskrin, director of the Critical Mineral
Speaker 3: Security Program at the Center for Strategic and International Studies.
Speaker 3: She helped explain why rare earths are so important.
Speaker 6: First and foremost, rare earths are in everything, and we've
Speaker 6: seen that in the last couple of weeks. As companies
Speaker 6: have not been able to secure the licenses they need,
Speaker 6: we have seen disruptions to manufacturing.
Speaker 7: We've seen it most visibly from the automotive sector.
Speaker 6: For example, Ford actually paused the manufacturing of its Explorer
Speaker 6: in Chicago because it.
Speaker 7: Didn't have these rare earths.
Speaker 6: But we have to remember they're in defense technologies, they're
Speaker 6: in cancer treatment, they're in MRI scanners, they're in just
Speaker 6: about everything electronic. So what we have is both this
Speaker 6: huge reliant and there's no significant processing capabilities that exist
Speaker 6: operational today, which means that we are wholly dependent on
Speaker 6: China for something that we need.
Speaker 8: A lot of.
Speaker 3: Grazlyn, Carol and I spoke to r J. Scaring, the
Speaker 3: CEO of Rivian, the ev maker, and we asked them
Speaker 3: specifically about rare earths, and partly what he said and
Speaker 3: he's been clear that he is working to lobby the
Speaker 3: Trump administration. His folks are communicating with them about the
Speaker 3: importance of rarest But he also told us, hey, necessities
Speaker 3: essentially the mother of invention, and I'm confident that we're
Speaker 3: going to be able to do some of this stuff,
Speaker 3: at least in the near future without rare earths. Do
Speaker 3: you think that's the case? Are we going to be
Speaker 3: able from a technological standpoint not to have to rely
Speaker 3: on rare earths for some of these things.
Speaker 6: We are going to reduce our reliance. I mean, never
Speaker 6: underestimate the power of American innovation. We created a vaccine
Speaker 6: for a virus that we didn't know anything about a
Speaker 6: year and a half prior to that. So we will
Speaker 6: absolutely see I think a reduction in our reliance on
Speaker 6: them number one, in terms of how much we need them.
Speaker 6: We're starting to create engines without them. However, that is
Speaker 6: a process. The second thing we're going to start to
Speaker 6: see is more capabilities come online outside of China. We soft,
Speaker 6: for example, that Linus is now starting to produce small
Speaker 6: scale at its facility in Malaysia.
Speaker 7: The US is kind of trying to warp speed our
Speaker 7: own facilities in California and Texas. So innovation is going
Speaker 7: to be a huge.
Speaker 6: Part of reducing our reliance and increasing our capabilities.
Speaker 1: All right, but how quickly does all that happen? Because
Speaker 1: I think the other thing we followed up with him
Speaker 1: our desk Garrent, is that none of this is going
Speaker 1: to happen overnight, right, So how long does it take
Speaker 1: to kind of make the switch? And then in the meantime,
Speaker 1: how much are we still reliant on China or how
Speaker 1: long will we probably be relying on China?
Speaker 7: I mean, we're going to be relying on China at
Speaker 7: some level in my opinion. I know opinions vary on
Speaker 7: this for probably a few years. In terms of being able.
Speaker 6: To meet all of our capabilities, we have to remember
Speaker 6: this isn't just a problem of capital. In December twenty
Speaker 6: twenty three, China actually banned the export of processing technologies
Speaker 6: parts of this supply chain. We actually realized we didn't
Speaker 6: even have the technical know how in terms of how
Speaker 6: to do those midstream. So one is building the technical
Speaker 6: know how and that takes a bit of time, it's expensive.
Speaker 6: So realistically, even if we start to be able to
Speaker 6: get off take by the end of the year through
Speaker 6: domestic capabilities and potentially through non Chinese foreign sources before
Speaker 6: we are comfortably reliant on non Chinese capabilities for probably
Speaker 6: a few years.
Speaker 3: Gracelyn, how much of this is an environmental story? To
Speaker 3: what extent is the processing of rare or something that's
Speaker 3: done in China because other countries didn't want to deal
Speaker 3: with the environmental consequences of this.
Speaker 6: The environment is no doubt one of the challenge challenges
Speaker 6: that has limited other countries from developing the capabilities.
Speaker 7: You know, we use the term nimb not in my
Speaker 7: backyard because sometimes.
Speaker 6: We don't want these things in our backyard and we're
Speaker 6: very happy for them to be done far away.
Speaker 7: So that was certainly one component. The second thing I
Speaker 7: want to add to the environment component.
Speaker 6: Is generally the United States has deprioritized mining over the
Speaker 6: better part of several decades. Between the nineteen fifties and
Speaker 6: the nineteen nineties, the US was actually the top rare
Speaker 6: earth producer in the world. We were the top uranian
Speaker 6: producer in the world. We had a Bureau of Mind
Speaker 6: that was responsible in government for coordinating all of our
Speaker 6: mining activities.
Speaker 7: We closed that in nineteen ninety six.
Speaker 6: We seeded a lot of our advantages to China and
Speaker 6: Russia during this time, and that's how they really created
Speaker 6: a dominant position where the US once was. So the
Speaker 6: environmental challenges certainly slow down permitting and some of these
Speaker 6: other dimensions of mining, but we also have to remember
Speaker 6: there was a broader government deprioritization of the agenda, which
Speaker 6: is how we found ourselves where we are today.
Speaker 1: Well, that's what I was going to ask you. Was
Speaker 1: it because the government wasn't prioritizing Was it because companies,
Speaker 1: you know, really concerned about the bottom line and profitability
Speaker 1: and making money that they said China can do it
Speaker 1: more cheaply and more easily for us? Is it because
Speaker 1: we didn't have the labor pool? Why was it that
Speaker 1: the US went from being a leader to basically, you know,
Speaker 1: now it's China as the leader when it comes to
Speaker 1: rare earth minerals.
Speaker 6: So if this was a multiple choice exam, all of
Speaker 6: the above, I hope would be one option.
Speaker 7: But there's a few things right, So when.
Speaker 6: The government deprioritizes something, it creates a negative signal as
Speaker 6: a result of government deprioritizing it, and a lot of
Speaker 6: this moving offshore to China, Russia, Australia.
Speaker 7: Over time, then mine engineering.
Speaker 6: Programs have less, you know, less need to produce mine
Speaker 6: engineers and other skilled labor for mining operations, so.
Speaker 7: We have a huge workforce shortage here in the United States.
Speaker 6: Along with that, again, it is much cheaper to do
Speaker 6: it in China, where there are low environmental standards, where
Speaker 6: labor is much cheaper. If you go to a mine
Speaker 6: in Montana, you're not going to have a worker making
Speaker 6: under one hundred and twenty thousand dollars.
Speaker 7: We don't have to pay.
Speaker 6: A worker in China that same amount, So basically the
Speaker 6: overall production.
Speaker 3: Costs fell to That was Graceland Baskren, director of the
Speaker 3: Critical Mineral Security Program at the Center for Strategic and
Speaker 3: International Studies.
Speaker 1: We should point out after our conversation Bloomberg News reporting
Speaker 1: that the Trump administration is developing a plan to use
Speaker 1: Cold War era powers to prioritize and fund rare earth
Speaker 1: projects it deems critical to national security, and that is
Speaker 1: according to people familiar with the matter. You can check
Speaker 1: out the entire story find it on the Bloomberg and
Speaker 1: at Bloomberg dot com. So while trade talks dominated the
Speaker 1: overall news cycle this past week, one top business story
Speaker 1: for US was about one of the world's largest marketcap companies,
Speaker 1: and yes, it's definitely a household name.
Speaker 3: Apple hosted its annual Worldwide Developers Conference in Cooper Tino,
Speaker 3: also known as WWDC. The company unveiled its biggest redesign
Speaker 3: of its operating system in years. It's called Liquid Glass.
Speaker 1: Not a big surprise since Bloomberg's Mark Gerrman had reported
Speaker 1: a lot of the details in the weeks leading up
Speaker 1: to the conference and got to say, investor is not
Speaker 1: too impressed as well, as they sent shares of Apple
Speaker 1: lower during the event keynote.
Speaker 3: For more on Apple's new look and what we learned
Speaker 3: at WWDC, we spoke with Bloomberg Technology co host ed Ludlow,
Speaker 3: who was at the conference in Cooper Tino.
Speaker 9: You know, you have to remember this is Apple WWDC.
Speaker 9: It is a developers conference. A lot of what is
Speaker 9: announces targeted at a group of people who are critically
Speaker 9: important in contributing to Apple's ecosystem. But it was almost
Speaker 9: kind of like a sell the news kind of event,
Speaker 9: both because a lot of what we heard Mark German
Speaker 9: had already reported. We all know that, and also because
Speaker 9: you know, expectations that Apple at some point is going
Speaker 9: to give us a lot more on AI. Those expectations
Speaker 9: weren't met clearly.
Speaker 3: Hey, let's stick on the liquid glass portion of this.
Speaker 3: My question then, in my question now after it being unveiled,
Speaker 3: is is there a learning curve here for consumers? We've
Speaker 3: seen mistakes that Apple's made in the past with redesigns
Speaker 3: Apple Maps more than a decade ago certainly comes to
Speaker 3: mind there. But but is this going to be a
Speaker 3: learning curve? Like how different is this going to be
Speaker 3: as an experien I mean, they're over a billion iOS
Speaker 3: users out there. They're going to have to get used
Speaker 3: to those.
Speaker 9: Yes, but a billion iOS users. But you have to
Speaker 9: think about it in the aggregate of people that use
Speaker 9: a broader Apple ecosystem, so a lot of liquid glasses.
Speaker 9: Its piration comes from the work that app we're done
Speaker 9: with vision Pro, you know, literally the UI and UX
Speaker 9: of that experience using vision Pro, the translucency of it.
Speaker 9: And so by making it uniform, you know, having the
Speaker 9: same look across iPhone, mac iPad os and vision Pro
Speaker 9: and watch, you know, it just makes you more familiar
Speaker 9: and I guess open to using the full hardware suite
Speaker 9: of products, let alone the software suite of products. But again, like,
Speaker 9: this is a stock that's been driven by trade headline,
Speaker 9: trade risk, tariff risk. But it's a company who, like
Speaker 9: will tell you timetime again that they're just focused on
Speaker 9: iteration design, you know, executing on making things beautiful every year.
Speaker 9: And the problem is that last year twenty twenty four,
Speaker 9: and indeed the year prior when they announced the vision
Speaker 9: pro So this event the reason I'm here, all of
Speaker 9: us gathered at WWDC, there was much more of a clear,
Speaker 9: tangible news catalyst around it. This kind of goes back
Speaker 9: to what WWC has always been, which has been for
Speaker 9: the people, the community that build for Apple, for the
Speaker 9: App store and for all of those devices.
Speaker 1: Okay, and that's I guess part of the value of
Speaker 1: going to WWDC, right ed, is kind of talking to
Speaker 1: some of these developers, feeling the mood about what they
Speaker 1: are saying. So what are you hearing from them? These
Speaker 1: are the kind of insiders, right So I'm just curious.
Speaker 9: So yeah, we actually did get some AI news, and
Speaker 9: that piece of news was that Apple is going to
Speaker 9: open up its on device LMS, Apple's own work in
Speaker 9: proprietary models to the developer community. The reason that that's
Speaker 9: a substantive piece of news is that's exactly how it
Speaker 9: works with open ai and Microsoft and Google and the
Speaker 9: Gemini teams. A lot of the success they've had in
Speaker 9: basically commercializing that technology is to say to developers, have
Speaker 9: at it. Here's the underlying model. Use it to make
Speaker 9: whatever you want to do better. And that makes the
Speaker 9: iOS as an example, more appealing. So that was a
Speaker 9: big step forward today.
Speaker 8: But to the.
Speaker 9: Outside of the investor community, all of us that are
Speaker 9: consumers that have iPhones, there wasn't something there for us
Speaker 9: in that respect. And what was so interesting is that
Speaker 9: sort of dropping the stock at the start of the keynote.
Speaker 10: It actually.
Speaker 9: Coincided with Craig Federigi, that the Services software chief, saying
Speaker 9: we will have a lot more to talk about with
Speaker 9: Siri later, you know, because this had nothing to do
Speaker 9: with that the way that one as a consumer interacts
Speaker 9: with their phone right now.
Speaker 3: Later, how much later, I mean, our investors and members
Speaker 3: of the developer community still waiting for a SERI that
Speaker 3: is as smart as some of these virtual assistance that
Speaker 3: we've seen from LMS at this point.
Speaker 9: Yeah, it's interesting, like you know, I'm here at WWDC,
Speaker 9: but I still was following what German was putting in
Speaker 9: the blog in real time, and he made the point
Speaker 9: at the end that Craig was kind of at pain
Speaker 9: to point out, this is what is new with Apple Intelligence.
Speaker 9: Here are all of the things that Apple Intelligence can do,
Speaker 9: rather than you're going to have to wait till later
Speaker 9: in the year to get more functionality out of it.
Speaker 9: On the other hand, like one of the things we
Speaker 9: got today was live translation in the I message and
Speaker 9: cool context but also through AirPods.
Speaker 8: Right, But I even get.
Speaker 9: Like a sense of deja vous when I was at
Speaker 9: metaconnect at last fall. You know, Mark Zuckerberg was there
Speaker 9: on stage with his Rayvan Metas demoing exactly the same thing.
Speaker 9: You know, the ability to live translate in a nation
Speaker 9: like America where many people are bilingual. It's awesome when
Speaker 9: you consider the number of people that use an iPhone
Speaker 9: and are on the iOS system or macros or iPad os.
Speaker 9: But it ain't that new, and all the other technology
Speaker 9: companies are doing it as well, and that's kind of
Speaker 9: the frustration. It's like, give me the all singing, all
Speaker 9: dancing version of Apple Intelligence, which we interact with through
Speaker 9: Siri principally, and that's the bit you're going to wait for.
Speaker 9: And I didn't answer your question to him because they
Speaker 9: didn't say later in the year.
Speaker 3: No, that's it, that's okay, that's okay. I mean, look,
Speaker 3: it's a question that you know, nobody really has an
Speaker 3: answer for. Maybe Apple doesn't even know at this point.
Speaker 1: Well wait, it's kind of like, hey, Siri, like, what
Speaker 1: are you going to get better?
Speaker 3: Okay, Okay, let's not make everyone's phone freak out. Carol Masser, Hey,
Speaker 3: ed before we let you go, You've been to a
Speaker 3: lot of these events, and as you mentioned, this is
Speaker 3: one for the developer community and Apple's app store and
Speaker 3: what you can do on an Apple device would be
Speaker 3: nothing without the developer community. Have you had a chance
Speaker 3: to hear from any developers, to speak to anybody who's
Speaker 3: attending this and just get an understanding for what the
Speaker 3: vibes are in twenty twenty five when it comes to
Speaker 3: the developer community.
Speaker 8: So literally.
Speaker 9: We had a guy called Paul Hudson on the show earlier.
Speaker 9: He is the creator of hacking for Swift, Swift being
Speaker 9: the platform that many used to code for OS application
Speaker 9: and OS software and kind of what we've gone over
Speaker 9: is exactly why he was excited that. You know, when
Speaker 9: you build for one of the Apple operating systems, you
Speaker 9: usually use an Apple tool to do so, and he's
Speaker 9: you know, it was pretty jazz and excited. A lot
Speaker 9: of people look at Craig federigas like the man, the
Speaker 9: rock star, the silver Fox of software, and on stage,
Speaker 9: you know, they got what they were asking for to
Speaker 9: some sense that like having on device LLM access is
Speaker 9: huge for a lot of developers. It just makes their
Speaker 9: life in doing something easier. But the root of your
Speaker 9: question is the most important bit. We have the App
Speaker 9: store today for a reason. It is attractive to consumers,
Speaker 9: and there are lots of apps there that are made
Speaker 9: by third party developers. You know, I'm trying to think
Speaker 9: of a great example that Apple didn't make and someone
Speaker 9: else did, but you get the idea. And that's why
Speaker 9: all of this kind of update today is tracked because
Speaker 9: it adds value to the broader services and ecosystem offering
Speaker 9: that Apple has.
Speaker 1: All Right, basic metric, you got Apple shares down nineteen
Speaker 1: percent year to date, Look at something like meta it's
Speaker 1: actually up nineteen percent year to date. Yeah, what is
Speaker 1: it that the investment community really wants to see from
Speaker 1: Apple to give it some love.
Speaker 9: So I'm actually just pulling chat GPT up on my
Speaker 9: phone because I was talking to chat GBT about this earlier.
Speaker 9: Fewer than sixty percent of analysts rate Apple, are by
Speaker 9: the lowest among its big tech peers. Apple's AI efforts
Speaker 9: are seen as safe by analysts. Reminder, it trades at
Speaker 9: twenty seven times earnings, which is slightly off its historic high.
Speaker 9: The point is this, so far this year it hasn't traded.
Speaker 9: I know, it's just so much fun to like use
Speaker 9: this as a tool, you know, in putting data from
Speaker 9: the Bloomberg But like, so far this year, that nineteen percent,
Speaker 9: it has nothing to do really with the AI stories.
Speaker 9: You guys know, it's tariff for risk, the relationship with
Speaker 9: the administration and the presidents of the President of the
Speaker 9: United States. But the risk going into today and what
Speaker 9: was almost confirmed in the early minutes of that keynote
Speaker 9: was well, what if AI does become the key risk
Speaker 9: of the stock because investors lose patients and they say,
Speaker 9: we want to see something more tangible. It's a little
Speaker 9: unfair because I don't think we went into today, thinking
Speaker 9: we would get anything like that. It was really clear
Speaker 9: what we were going to get. It was for the
Speaker 9: developer community, and we did get it.
Speaker 3: And we do have some extra time with you, which
Speaker 3: were grateful for and you're you know, you work, keep
Speaker 3: in the seats warm for you here in the San
Speaker 3: Francisco studio. Liquid glass. You know one thing that Apple
Speaker 3: is trying to figure out, and I think it's fair
Speaker 3: to say every consumer tech company is trying to figure
Speaker 3: that out. Is the form factor for the must have
Speaker 3: device of the future.
Speaker 10: You've talked a.
Speaker 3: Lot about where humane did not work. We've talked to
Speaker 3: you a lot about what we could see from Sam
Speaker 3: Altman and Johnny Ives. When it comes to what you
Speaker 3: saw with liquid glass, does it give any indication as
Speaker 3: to how Apple is thinking about this?
Speaker 8: It does.
Speaker 10: Look.
Speaker 9: Look, what Mark Gumman's reported is that the seventeen generation
Speaker 9: of iPhone will have glass curve size with no sort
Speaker 9: of screen border, right. And liquid glass is a concept,
Speaker 9: the kind of translucency of it, the way that you
Speaker 9: whatever is in the almost the foreground of your your
Speaker 9: smartphone screen or iPad screen is not interrupted by what's
Speaker 9: popping up. We think that there will be some hardware
Speaker 9: toiration on that to come. But you do raise a
Speaker 9: really good point, which is why have liquid glass uniform
Speaker 9: across all devices? Because increasingly it's not the be all
Speaker 9: and end all. The thing that's in my right hand
Speaker 9: a smartphone. It is that I take messages on my
Speaker 9: Apple Watch. Other smart watches are available, I take, you know,
Speaker 9: different platforms that I rely on OS for on my MacBook.
Speaker 9: Other laptops are available, et cetera. You know, it's just
Speaker 9: a way of making it more uniforms. So I think
Speaker 9: that there's definitely acknowledgement there. Whether the iPhone seventeen has
Speaker 9: the features that Mark reported, we shall wait and see,
Speaker 9: but there was certainly a nod to that during the keynote,
Speaker 9: even if they didn't explicitly sail by the way, the
Speaker 9: next version of the iPhone it's definitely going to leverage
Speaker 9: this liquid glass concept.
Speaker 4: Great stuff, ed Thank you so much.
Speaker 1: We know a busy day, early day, Edla though, of course,
Speaker 1: co host of Bloomberg Technology out there at Apple headquarters
Speaker 1: in Kupertino, California. Of course, at the Worldwide Developers Conference.
Speaker 2: You are listening to the Bloomberg Business Week Daily podcast.
Speaker 2: Catch us live weekday afternoons from two to five pm Eastern.
Speaker 2: Listen on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: President Trump's immigration crackdown was definitely top of mind this
Speaker 1: past week. The administration's pushed to ramp up arrests and
Speaker 1: deportations led to protests bringing up across LA and to
Speaker 1: other cities.
Speaker 3: The big push for more arrests means there's a growing
Speaker 3: need for detention centers, and in several towns across the country,
Speaker 3: private facilities are picking up the slack.
Speaker 1: It's interesting to consider that while some communities, including LA,
Speaker 1: are demonstrating how much they dislike the immigration policies, politicians
Speaker 1: and leaders and communities that have these private detention centers,
Speaker 1: some of them feel differently.
Speaker 3: Bloomberg News Investigations reporter Rachel Adams heard was behind a
Speaker 3: big take on the budding deportation economy. She recently joined
Speaker 3: Carol and Me to discuss what she learned about these
Speaker 3: so called ice towns. Welcome to a Mana's ice towns.
Speaker 3: These are communities convinced that their financial survival depends on
Speaker 3: locking people up. It's not a new phenomenon. In this
Speaker 3: iteration of the classic prison town, though, Carol, many of
Speaker 3: the people behind bars haven't been convicted of crimes.
Speaker 1: Let's get to this Bloomberg BusinessWeek story. It is, I
Speaker 1: guess you could say, a slice of life in America,
Speaker 1: but not necessarily a good one. But let's get into
Speaker 1: it with Bloomberg News Investigations reporter Rachel Adams heard she
Speaker 1: joins us from our Houston bureau. Rachel, good to have
Speaker 1: you here. What is an ice town?
Speaker 11: So, an ice town is a town where the local politicians,
Speaker 11: local community is convinced that they need these immigration detention
Speaker 11: facilities that operate under these lucrative contracts with ICE in
Speaker 11: order to be financially sound. A lot of these towns
Speaker 11: they've had a private jail or private prison detention facility
Speaker 11: for decades, and with Obama era sentencing reform, the federal
Speaker 11: prison population dropped off, and so to keep these facilities profitable,
Speaker 11: they signed contracts with ICE. And now we're seeing just
Speaker 11: a huge influx in the number of people detained at
Speaker 11: those facilities under the Trump administration's, you know, mass deportation agenda.
Speaker 3: So, Rachel, take us too one of these ice towns.
Speaker 3: Torrence County, New Mexico.
Speaker 11: Yeah, so we went to Torrance County, New Mexico, and
Speaker 11: at the end of March, that's when the County Commission
Speaker 11: was voting to extend this contract. And it's a really
Speaker 11: rural community. It's one of those areas that used to
Speaker 11: be kind of this bustling hub thanks to the New
Speaker 11: Mexico Central Railroad. You had people from all over who
Speaker 11: would come through towns like Estancia where this detention facility
Speaker 11: is located. But then inter State forty is built and
Speaker 11: commerce really just drops off. And so during the Reagan administration,
Speaker 11: when you're seeing these policies like the War on Drugs
Speaker 11: that's massively expanding detention in America, there are these private
Speaker 11: prison companies that want to get a piece of that business,
Speaker 11: and New Mexico was a great place for that for them.
Speaker 11: Because land was cheap, they could build these really big
Speaker 11: detention facilities by the standards of the time, and so
Speaker 11: that's what happened in Astancia. Corcivic then Corrections Corporation of America,
Speaker 11: built a facility outside of town at the time. It's
Speaker 11: since been annexed into the town, and things were pretty
Speaker 11: good for a while. It employed people. Business was good
Speaker 11: for Corcivic, but then around twenty sixteen you had the
Speaker 11: federal prisoner population drop off and that's when the facility
Speaker 11: ended up closing and Corsific said it was no longer profitable.
Speaker 11: And then ICE came in to basically save the day
Speaker 11: for Corcivic and offered this contract that guaranteed revenue every
Speaker 11: single month whether or not there were any ICE detainees
Speaker 11: in those beds, and that's the contract that allows the
Speaker 11: facility to operate today.
Speaker 1: So just to set the record straight, I mean, these
Speaker 1: are facilities that have been around for a long time,
Speaker 1: different administrations, correct, Correct, Okay, And the point is too though,
Speaker 1: that the conditions aren't great and they're needed in order
Speaker 1: to house kind of the roundup that is happening under
Speaker 1: this administration.
Speaker 8: Correct.
Speaker 11: So, during the last ten years or I guess five
Speaker 11: years since this contract has been in place in Torrents County,
Speaker 11: a lot of the people that it was detaining on
Speaker 11: behalf of ICE.
Speaker 7: They were recent border crossers.
Speaker 11: These were people who were coming up the border from
Speaker 11: Mexico a lot of times into Texas. They were seeking asylum,
Speaker 11: and while they were seeking asylum, they had you know,
Speaker 11: turned themselves over in a lot of cases, and now
Speaker 11: they were in ice detention, being held at the Torrens
Speaker 11: County Detention Facility and Astancia. After Trump took office, you
Speaker 11: see a really dramatic fall off in the number of
Speaker 11: people crossing the border. And so all of a sudden
Speaker 11: you have room in the Torrens County Detention Facility. And
Speaker 11: so because you have this room, you're seeing ice flying
Speaker 11: people from all over the country, a lot of them
Speaker 11: coming from New Jersey, from Florida, and they're flown into
Speaker 11: the Albuquerque Airport and bust to the Torrents County Detention
Speaker 11: Facility and that is where they're being held for months
Speaker 11: in a lot of cases. And this facility has had
Speaker 11: problems for the last several years, and it's really starting
Speaker 11: to kind of come to a head with the increase
Speaker 11: in the number of people that is holding under the
Speaker 11: Trump administration.
Speaker 3: Okay, well, you describe the facilities at least one of them.
Speaker 8: What was it like?
Speaker 3: What is it like?
Speaker 11: I mean, what we've heard from people who are currently
Speaker 11: being detained at the facility is that it's cold, the
Speaker 11: food is undercooked, inedible at times. We've heard complaints about
Speaker 11: access to medical care. There are a lot of people
Speaker 11: who say that they have tried to ask to be
Speaker 11: deported because they do not want to spend another day
Speaker 11: in iceed attention, but that it's incredibly difficult to get
Speaker 11: the attention of any ICE officers because it's all you know,
Speaker 11: prison staff, not necessarily anyone who can actually talk to
Speaker 11: them about their case. But the most dramatic issue that
Speaker 11: we've heard about recently had to do.
Speaker 4: With the water supply.
Speaker 11: This is the desert, it's incredibly dry, and the town
Speaker 11: of Astancia was having an issue with one of its
Speaker 11: main water pumps, and so that led to water being
Speaker 11: intermittently shut off to the facility. We heard that there
Speaker 11: were toilets that were overflowing, and that there was feces
Speaker 11: on the floor, that the smell was overwhelming. We heard
Speaker 11: people say that they had been limited at one point
Speaker 11: to two water bottles a day, that they were thirsty.
Speaker 11: At one point, the facility brought in trash cans full
Speaker 11: of waters to try to flush some of those toilets
Speaker 11: to deal with the odor and the hygiene issues, and
Speaker 11: someone we talked to said that he had seen people
Speaker 11: who were thirsty drink out of those trash cans because
Speaker 11: they were so desperate for water. So it sounds like
Speaker 11: this is improving over the last few days. We did
Speaker 11: hear that ice was on the ground recently, but certainly
Speaker 11: it sounds like it has been a rough couple of
Speaker 11: weeks inside the detention facility.
Speaker 1: It's interesting because I'm thinking Corcific, right, which is the
Speaker 1: company that's been around and is running these facilities, right,
Speaker 1: I guess it's close to four deck for four decades.
Speaker 4: It looks like I just.
Speaker 1: Remember that period and like investing like private prisons, everybody
Speaker 1: thought it was like this great investment play, but you
Speaker 1: got to remember it's people, it's humans. There are conditions.
Speaker 1: I am curious, like are these people being held for
Speaker 1: due processing? Like who determines the fate of these individuals
Speaker 1: is ultimately the federal government.
Speaker 11: I mean a lot of it is held up in
Speaker 11: immigration courts, and that's an incredibly slow moving process. So
Speaker 11: I'm sure you all know. One of the issues with
Speaker 11: these multi state transfers. I mean, people are thousands of
Speaker 11: miles away from their families, but they're also far away
Speaker 11: from their lawyers. If they had lawyers in Florida, for example,
Speaker 11: because their case was there and now all of a sudden,
Speaker 11: it's in New Mexico. They have to try to find
Speaker 11: a lawyer that can represent them in a different court,
Speaker 11: and that isn't always easy to do, especially because these
Speaker 11: tend to be more rural areas where pro bono lawyers
Speaker 11: are harder to come by, located farther away from the
Speaker 11: facilities themselves. So just the act of moving someone to
Speaker 11: a facility so far away, it does impact that person's
Speaker 11: right to do process.
Speaker 3: There's some context here and sort of like the internal
Speaker 3: workings of how these communities feel about these that I
Speaker 3: think is really interesting. In your county commissioners and how
Speaker 3: county commissioners look at this, you highlight Linda Yamario, who
Speaker 3: of the Torrance County Commission, who actually did go inside
Speaker 3: one of these facilities, and then you and the team
Speaker 3: wrote that she voted to extend the ice contract. Talk
Speaker 3: to us a little bit, and it's not really town
Speaker 3: gown relations, but it's the way that the community feels
Speaker 3: about this and the way that local elected officials feel
Speaker 3: about these.
Speaker 11: Yeah, it's really striking to sit in on these County
Speaker 11: commission meetings because you know the contract is up for
Speaker 11: an extension. Every so often, every several months, but no
Speaker 11: matter what, at every meeting which is held, you know,
Speaker 11: bi weekly, there are a bunch of lawyers and advocates
Speaker 11: and even people who are in detention who record testimonies
Speaker 11: that they play to the commissioners during public comment, urging
Speaker 11: them to shut down Torrance County Detention Facility for ice detention.
Speaker 11: And you have these three commissioners who sit at the
Speaker 11: front of the room and they're listening to this and
Speaker 11: some of the testimony is in Spanish, and Commissioner how
Speaker 11: Tomeo speak Spanish, and so you can kind of watch
Speaker 11: her face as she's listening to people describe the conditions
Speaker 11: inside the facility, and what she told people at that
Speaker 11: meeting in particular was, look, I hear all these concerns,
Speaker 11: but I don't know what to trust. And so she
Speaker 11: ended up voting to extend it. Sorry I lost my earpiece.
Speaker 11: But it's unclear whether she'll do that in October, because
Speaker 11: she did go again and say that that things seem
Speaker 11: to be going well, but she does still have concerns.
Speaker 4: You know.
Speaker 1: I think it's interesting and what I find fascinating is
Speaker 1: that this is a story that's got so many different
Speaker 1: angles to it.
Speaker 4: When you think.
Speaker 1: About what these detention centers do for a local economy,
Speaker 1: there's that, but there's also then, as we've been talking
Speaker 1: about the conditions, and you do wonder about the oversight,
Speaker 1: especially in an administration that has been cutting back on some
Speaker 1: of the federal spending in different areas. So, you know, Rachel,
Speaker 1: when you look at this story and this reporting, I mean,
Speaker 1: the cities or the local municipalities in many ways want
Speaker 1: them right because it provides jobs, it provides some economic momentum.
Speaker 1: At the same time, there are concerns about kind of
Speaker 1: who's watching out for what's going. What does Corcivic say
Speaker 1: about all of this?
Speaker 11: Yeah, Corcivic talks about how many people they employ locally.
Speaker 11: They talk about the salaries and the benefits that they provide.
Speaker 11: They you know, say that they I think they said
Speaker 11: that they hire or have more than three hundred jobs
Speaker 11: related to these facilities in New Mexico. So, I mean,
Speaker 11: they definitely see themselves as a major local economic benefit
Speaker 11: to the area. And that's you know what we heard
Speaker 11: from the Estancia mayor as well. I mean, he talks
Speaker 11: a lot about how much of the grocery seats tax
Speaker 11: which is New Mexico's version of a sales tax that
Speaker 11: course of it contributes to. So it's interesting to hear
Speaker 11: kind of the I mean, I think Commissioner how Amos,
Speaker 11: Yeah put it with ysinkly when she had like on
Speaker 11: the one hound, they're a major employer.
Speaker 1: Yeah, such a great story, so much in there, and
Speaker 1: as we said, it's a slice of life in this country.
Speaker 1: Bloomberg News Investigations Report Rachel Adams heard Rachel, thank you.
Speaker 10: This is Bloomberg.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2: flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
Speaker 1: Let's Turn to Healthcare. US Human and Health Services Secretary
Speaker 1: Robert F. Kennedy Junior removed every member of the CDC's
Speaker 1: Vaccine Advisory Panel in an opinion piece published in The
Speaker 1: Wall Street Journal. He said he made the move because
Speaker 1: members of the committee were receiving funding directly from pharmaceutical companies,
Speaker 1: a claim that so far has not been confirmed.
Speaker 3: With uncertainty at the federal level. We wanted to get
Speaker 3: an overview of the industry with an executive who thinks
Speaker 3: about the space a lot. We turned at Wendy Barnes.
Speaker 3: She's president and CEO of GoodRx. We talked to her
Speaker 3: about the headwinds facing her industry and it really ranges
Speaker 3: everything from tariffs to the impact of new regulations.
Speaker 1: A lot to talk about. She kicked it off highlighting
Speaker 1: a new company initiative aimed at supporting independent pharmacies in
Speaker 1: the US. It's called Community Link.
Speaker 12: You know, I would say the company's been on a
Speaker 12: multi year journey to best partner with retail pharmacies, with
Speaker 12: community pharmacies really being at the top of that list,
Speaker 12: and this is really the culmination of that work. And
Speaker 12: so what you referenced, the good RX Community Link is
Speaker 12: a portal by which community pharmacies sometimes referred to as
Speaker 12: independent pharmacies, So think of those as really your non
Speaker 12: chain pharmacies. It can be as small as a single pharmacy,
Speaker 12: or some community independent pharmacy owners have fifty seventy five
Speaker 12: or one hundred locations, but largely they're run independent of
Speaker 12: a broader management philosophy and this is our effort to
Speaker 12: contract directly with these pharmacies in a cost plus reimbursement
Speaker 12: mechanism manner.
Speaker 13: Look, it's not.
Speaker 12: Any new news to you or probably to your listeners
Speaker 12: that pharmacies continue to be under reimbursement pressure, and we
Speaker 12: believe that they are key partners in our broader mission
Speaker 12: to make medications more affordable and accessible for every American.
Speaker 12: And so this effort is really one in which we're
Speaker 12: trying to bolster reimbursement for those independent pharmacies such that
Speaker 12: they can work with us directly. And in addition to that,
Speaker 12: we're giving them access to ninety plus brand deals that
Speaker 12: we have secured with pharmaceutical manufacturers over the last to
Speaker 12: twenty four months, and those continue to grow such that
Speaker 12: the reimbursement on those same drugs is favorable to those pharmacies.
Speaker 12: It's really no secret that pharmacies have long struggled to
Speaker 12: have a favorable margin profile on many brands that they fill,
Speaker 12: and this too gives access to those programs for those
Speaker 12: independent pharmacies.
Speaker 3: Well, Wendy anecdotally speaking, as the large pharmacies and the
Speaker 3: chains have come under pressure, whether it's overstore closures or
Speaker 3: different things happening just in the space we've all reported
Speaker 3: on what's happened in cities and the way that some
Speaker 3: of these pharmacies have closed down in certain cities. Are
Speaker 3: you seeing more people go to these independent pharmacies? I mean,
Speaker 3: anecdotally speaking, I can say that certainly the way my
Speaker 3: family has changed its behavior just thanks to availability and
Speaker 3: what pharmacies tend to actually have what we're looking for.
Speaker 3: But how have you seen that affect the overall landscape.
Speaker 12: I don't know that we've seen a meaningful ship to
Speaker 12: independent from chain. I think there's still a pretty good
Speaker 12: mix of grosser versus independent versus chain, and candidly, you know,
Speaker 12: mail order slash digital pharmacy.
Speaker 13: I think at the end of the day, what we
Speaker 13: see is.
Speaker 12: In the seventy plus odd thousand pharmacy options that we
Speaker 12: have as consumers in the US that as a consumer,
Speaker 12: you just really want to get your drugs on your
Speaker 12: own terms, whether it's mail to your home with your
Speaker 12: preferred community pharmacist or at a chain or grosser. And
Speaker 12: we pride ourselves on working really with all pharmacy such
Speaker 12: that you can get your drugs when and where you
Speaker 12: know you desire to do so.
Speaker 1: Do you see it all that the independent channel is shrinking.
Speaker 1: We've certainly seen it with some of the big pharmacy chains, right,
Speaker 1: We've talked about it, You've seen the headlines. But I'm
Speaker 1: just curious when it comes to independence, Wendy, do you
Speaker 1: see any shrinkage in terms of the number of outlets
Speaker 1: that are out?
Speaker 7: There are no, you know, I.
Speaker 12: Will say in the numbers that we've looked at over
Speaker 12: the last couple of years, there are still a good
Speaker 12: number opening any month. I will say in our book,
Speaker 12: with the pharmacies that we work with, I haven't seen
Speaker 12: significant trinkage. But I think there are certainly other data
Speaker 12: sources that would suggest that there are a number of
Speaker 12: independent and or community pharmacies that are closing in or
Speaker 12: selling their business to other owners.
Speaker 13: But in our particular book, it's held pretty study.
Speaker 3: How have independence traditionally reacted to the program at GoodRx,
Speaker 3: because it's our understanding they've been a little skeptical about it.
Speaker 3: How do you make sure that they're embracing it rather
Speaker 3: than treating it with skepticism.
Speaker 12: Sure, well, I think you know, Look, it's early days,
Speaker 12: to be clear, and we're going to be on a
Speaker 12: journey here. Communication is going to be the biggest part
Speaker 12: of this program, in addition to delivering what we said
Speaker 12: we intend to deliver, which is fair economics over the
Speaker 12: course of these contractual agreements, as pharmacies agree to contract
Speaker 12: with this directly, and that again can all be conveyed
Speaker 12: through that portal that we stood up this morning. So
Speaker 12: for me, it's really going to be about how we
Speaker 12: deliver on the reimbursement mechanism through this partnership, and.
Speaker 13: I think, you know, the ongoing communication.
Speaker 12: Will support how the pharmacy community embraces this over time.
Speaker 12: You know, we've certainly been setting out communications early on.
Speaker 13: We've been in dialogue with.
Speaker 12: Many independent pharmacy owners to speak through the program. But
Speaker 12: I think at the end of the day, it's really
Speaker 12: going to be the outcome of the program and the
Speaker 12: economics that we deliver that we'll prove it out over time.
Speaker 1: Well, that's why I want to kind of just dig
Speaker 1: a little bit deeper, Wendy. You know, for this to
Speaker 1: work for you guys, this new role out, this Community
Speaker 1: links program, the economics have to work right for the
Speaker 1: independent pharmacy. So I'm just curious what you can tell
Speaker 1: us how the economics are different for the pharmacy that
Speaker 1: directly contacts with GoodRx versus using maybe one of the
Speaker 1: pharmacy benefit managers the PBMs and their networks to dispense
Speaker 1: a prescription. What can you tell us more specifically about
Speaker 1: the economic advantage for independent pharmacies to use your route
Speaker 1: versus going to the PBMs.
Speaker 13: Are happy to do so.
Speaker 12: So it's really the agreement directly with US is rooted
Speaker 12: on a NADAK plus reimbursement. So NADAK is one of
Speaker 12: multiple benchmarks that is effectively a cost mechanism that stands
Speaker 12: for national average drug acquisition cost, and we are negotiating
Speaker 12: with independent pharmacies to do this with that predicated as
Speaker 12: the baseline plus an amount that keeps them profitable on
Speaker 12: filling these claims. So that's really the precursor, if you will,
Speaker 12: and or the meat of how this agreement will work,
Speaker 12: which again provides favorable economics to these pharmacies. The distinction, Carol,
Speaker 12: as you called out to perhaps doing it through a
Speaker 12: larger payer, when you think about how it works through
Speaker 12: let's just say a larger PBM, there are multiple patient
Speaker 12: pay slash cash networks through which an independent pharmacy can participate,
Speaker 12: and when they're in that type of an algorithm, for
Speaker 12: lack of better description, typically it's going to search for
Speaker 12: not necessarily favorable margin for the pharmacy, and so there
Speaker 12: would be times in their previous arrangement whereby they may
Speaker 12: not always have favorable economics to fill those prescriptions. And
Speaker 12: by contracting directly, we are putting terms and conditions in
Speaker 12: the agreement that allow them to have certainty around not
Speaker 12: only the reimbursement, but also access to drugs that they're
Speaker 12: not fulfilling today in patient pay programs. Again, that would
Speaker 12: be the list of brands that I mentioned that I
Speaker 12: believe are ninety plus at this point that they're going
Speaker 12: to have certainty around how they're reimbursed in this direct
Speaker 12: engagement through us that they're not getting through their arrangements today.
Speaker 3: Thinking about healthcare in the United States, it is inextricably
Speaker 3: bound to politics, and no question, if what the President
Speaker 3: calls the Big Beautiful Bill were to pass, we could see,
Speaker 3: at least according to the CBO estimates of a dramatic
Speaker 3: increase in the number of uninsured almost eight million. What
Speaker 3: does that mean for your business and how much your
Speaker 3: business comes from Medicaid and uninsured people today.
Speaker 12: So interestingly, of the users who access our pricing on
Speaker 12: any given day, roughly ninety percent actually have insurance today.
Speaker 12: So I think there's a bit of a misperception that
Speaker 12: the overwhelming number of consumers who use us in fact
Speaker 12: don't have insurance, which is not the case.
Speaker 13: Having said that, who does.
Speaker 12: Come and look for pricing through our different platforms is
Speaker 12: your consumer who's motivated to check for competitive pricing, whether
Speaker 12: they have insurance or not, and we continue to be
Speaker 12: the number one platform to look for the best price
Speaker 12: deal that you can find on any particular medication.
Speaker 13: So as it pertains to.
Speaker 12: What may or may not pass in the bill, whether
Speaker 12: it's inclusive of Medicaid cuts which continue to be advanced,
Speaker 12: and or other cuts that would put pressure on your
Speaker 12: typical how hold income, what we do know is that
Speaker 12: those should produce tailwinds for us as a business for
Speaker 12: consumers whether they're insured or not, but specifically as it
Speaker 12: relates to Medicaid cuts and the number of individuals that
Speaker 12: may fall out of coverage, we do believe that that
Speaker 12: presents an opportunity for us to continue to support any
Speaker 12: American that really is struggling to purchase their medications.
Speaker 1: Wendy just got thirty seconds. You know, the word that
Speaker 1: we all use to describe the environment right now is uncertain.
Speaker 1: There's a lot coming out, certainly leaders and CEOs, just
Speaker 1: in your industry too. You've got write aid doing a bankruptcy.
Speaker 1: You know, I think about the macro within your business
Speaker 1: and just macro overall. How do you look at the outlook?
Speaker 13: Just quickly, you know the outlook?
Speaker 12: You're right, turbulent is a fair description. Having said that,
Speaker 12: businesses that stay the course and have a mission that
Speaker 12: makes sense for the consumers in which we serve will
Speaker 12: continue to thrive our goal of courses getting medication affordably
Speaker 12: and effectively into the hands of every American you need it,
Speaker 12: and we believe will be.
Speaker 13: In a position to take advantage.
Speaker 1: Wendy Barnes, President CEO of GoodRx.
Speaker 2: You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
Speaker 2: live weekday afternoons from two to five pm Eastern Listen
Speaker 2: on Applecarplay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: Plenty ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including a deep dive into Cisco
Speaker 1: Live twenty twenty five, held this past week in San Diego.
Speaker 1: Tim and I were there.
Speaker 3: We were broadcasting live with some of Cisco's top experts
Speaker 3: and leaders as we unpacked what's next for the company
Speaker 3: and how it's navigating the ever evolving world of tech.
Speaker 1: Got to say, it sounds like Cisco is definitely going
Speaker 1: into a big new chapter for the company that has
Speaker 1: been around for a long time. We want to share
Speaker 1: with you a few of our common conversations from the event,
Speaker 1: and there's no better place to start with than AI,
Speaker 1: which really dominated a lot of our conversations. CISCA recently
Speaker 1: announced that it's updating it's networking and security products to
Speaker 1: make artificial intelligence networks work better, and we got into
Speaker 1: that in more with Cisco's Vice president of Product, AI,
Speaker 1: Software and Platform DJ Sampath.
Speaker 3: DJ here, I mean, you look around at any of
Speaker 3: the trade floors and like, this is the massive, massive,
Speaker 3: and dominant theme here. I want to talk a little
Speaker 3: bit about the news that we got earlier today that
Speaker 3: Cisco's updating its networking security products to make AI network
Speaker 3: speedier and more secure. It's part of this broader push
Speaker 3: to capitalize on the AI spending boom. Talk to us
Speaker 3: a little bit about what prompted this, and we're going
Speaker 3: to speak about it throughout the program because this is
Speaker 3: some big news to emerge. But what you're hearing from
Speaker 3: customers on the customer front, where we are in the
Speaker 3: AI moment, and really what prompted a move such as this.
Speaker 8: Yeah, Tim Carrol, thanks so much for having me. You know,
Speaker 8: there's a huge tectonic change that's happening right now.
Speaker 14: If you think about the moment where chat gpt became
Speaker 14: and I came into our zeitgeist in November twenty twenty two,
Speaker 14: we've now started understanding that AIS here, it's not a buzzword.
Speaker 14: We go to chat gpt for a lot of questions
Speaker 14: and existential ones like, you know, should I take this job,
Speaker 14: should I not take this job?
Speaker 8: A lot of interesting things.
Speaker 14: That you start to see that are being broken down
Speaker 14: very systematically by AI as a TOT partner.
Speaker 8: Right.
Speaker 14: But what we're seeing now is that evolution from AI
Speaker 14: being an application or a chatbot to an agent agentic AI. Right,
Speaker 14: So you've got agents that are autonomously going on and performing.
Speaker 8: Tasks for you. And as you start to think about that.
Speaker 14: What's going to happen as your workforce, which has now
Speaker 14: gotten you know, one hundred percent of humans, is going
Speaker 14: to be augmented with you know, AI applications, AI agents,
Speaker 14: robots and humanoids.
Speaker 8: You know, in fact, you know you're going to start
Speaker 8: to see that happen.
Speaker 14: And these these robots and humanoids are going to have
Speaker 14: AI models sitting inside of them.
Speaker 8: So what we're.
Speaker 14: Seeing is that you're going to start to see a
Speaker 14: lot of change in the way these networks work and
Speaker 14: how employees are going to work inside of these organizations.
Speaker 14: So so we're we're just tremendously excited about that, and
Speaker 14: we're getting ready at Cisco.
Speaker 8: We know it's coming.
Speaker 14: We've we've helped usher in the era of the Internet,
Speaker 14: and we're now ready to usher in the era of
Speaker 14: AI AGENTIC AI more more specific.
Speaker 1: What's surprising you about kind of the progression? You're right,
Speaker 1: it's like two years ago.
Speaker 4: Right, it was like bam.
Speaker 1: But I think for us, like it was just over
Speaker 1: the last few months that we have increasingly been using
Speaker 1: like chat, GBT, right more aggressive.
Speaker 8: Way use a lot.
Speaker 10: There you go.
Speaker 14: Yeah, here's what I'll tell you. Right in the you know,
Speaker 14: in the trenches right now. The speed with which AI
Speaker 14: has been moving has been absolutely mind boggling, you know,
Speaker 14: the progress that we're starting to see. I'll give you
Speaker 14: an example. You mentioned Claude. Claude is an amazing, you know,
Speaker 14: piece of uh A software from a model perspective that
Speaker 14: it loves you to write code really well. Claude is
Speaker 14: one of the top ones that they used to write
Speaker 14: new software engineering. A lot of people thought that, you know,
Speaker 14: AI is gonna, you know, sort of come for our jobs,
Speaker 14: and you know, software engineers are probably not the ones
Speaker 14: that it's going to come for. It's going to take
Speaker 14: a long time to get there. But guess what, you know,
Speaker 14: it's here and it's now, but it's not taking away
Speaker 14: the jobs. In fact, every single developer is becoming a
Speaker 14: lot more productive using AI. So essentially what's going to
Speaker 14: happen is it's not like you're gonna have to worry
Speaker 14: about jobs. I think, you know, people that use AI
Speaker 14: are gonna you know, take the jobs of people that
Speaker 14: don't use AI. So you're going to just start to
Speaker 14: see that AI becomes extremely helpful from a productivity perspective.
Speaker 3: You know, I want to go back to agentic ai,
Speaker 3: and it's I know, it's something that you think a
Speaker 3: lot about. We hear it a lot on from Salesforce
Speaker 3: for example. Right now, I still think though, when it
Speaker 3: comes to the general consumer, agentic ai is like for
Speaker 3: the early adopters right now, it's for the people who
Speaker 3: do want to pay two hundred dollars a month, for example,
Speaker 3: for a version of chat GPT that will make reservations
Speaker 3: for you at a restaurant or help you with travel plans.
Speaker 3: What does it look like beyond early adoption.
Speaker 14: Yeah, I'll talk about the you know, one of the
Speaker 14: key things that you'll you'll notice is that the rate
Speaker 14: of which things move, Like, you know, if you go
Speaker 14: back to just using the chatbot, the very first time
Speaker 14: you use chat gpd'd had a knowledge cut off, right,
Speaker 14: you can only get information from like twenty twenty one.
Speaker 14: And then they opened it up to being able to
Speaker 14: do live web searches, right that is actually you know,
Speaker 14: teaching a model how to use the tool, and then
Speaker 14: you saw that it went from just being able to
Speaker 14: do a search to like, hey, you can now start
Speaker 14: to connect.
Speaker 8: These models to your emails.
Speaker 14: You can now start connecting these models to your salesforce
Speaker 14: and instance, and then slowly it's expanding. It's now connecting
Speaker 14: into your Google Docs and your Microsoft Office, you.
Speaker 8: Know, environments very quickly.
Speaker 14: Or what you're seeing is that you know, we're in
Speaker 14: this in this exponent of like the speed with which
Speaker 14: things are moving, and we're just at that beginning part
Speaker 14: of that exponent So you're right. Sometimes it feels like
Speaker 14: some of these things are very early from a consumer perspective,
Speaker 14: but if you started thinking about what's happening inside of
Speaker 14: the enterprises, the enterprises are starting to adopt AI a
Speaker 14: whole lot faster because they need to maintain the competitive edge.
Speaker 14: But a key thing for them to be able to
Speaker 14: adopt AI is security.
Speaker 8: Is safety and security You've got to make sure.
Speaker 1: Well, that's what I was going to say, because in
Speaker 1: order for you really to kind of max at the
Speaker 1: potential of it, you've got to open it up right
Speaker 1: to kind of all your different systems.
Speaker 4: So how do you make sure that that is really
Speaker 4: really secure?
Speaker 14: And that's top of mind when it comes to a
Speaker 14: gentic AI because you are now saying, hey, you're going
Speaker 14: to allow these agents to execute tasks on your.
Speaker 8: Behalf all the way to completion.
Speaker 14: So which means you've got to make sure you know
Speaker 14: you're thinking about safety and security. And now I'll talk
Speaker 14: about what we launched earlier this year at Cisco. We
Speaker 14: had a product called Cisco AI Defense. Knowing that this
Speaker 14: is going to be top of mind for a lot
Speaker 14: of enterprisis, we build a technology that does you know,
Speaker 14: provide you with the visibility of all.
Speaker 8: Of these agents, gives you.
Speaker 14: The ability to validate these models, to make sure these
Speaker 14: models are not vulmotable.
Speaker 8: Because here's what happens.
Speaker 14: Right if you go back to the age of the Internet,
Speaker 14: when the Internet came out, the attacker started doing a
Speaker 14: whole lot of interesting things. They would do the dial
Speaker 14: up service attacks and DDAs and so on and so forth.
Speaker 14: We're starting to see similar types of things happen with
Speaker 14: AI applications. So we've got to make sure that we're
Speaker 14: protecting against attacks, new types of attacks like prompt injection
Speaker 14: attacks and so on and so forth.
Speaker 3: What okay, So what about the type of attack where
Speaker 3: this is a little scary, but I think this is
Speaker 3: what's happening, where we are mimicked, our voices are mimicked,
Speaker 3: and perhaps a loved one is called and AI is
Speaker 3: able to pretend that we're in a situation that requires
Speaker 3: the help from a loved one. I mean this could happen,
Speaker 3: This could happen.
Speaker 8: No, absolutely, like you know it's happening now.
Speaker 14: Just to be very clear, because spam in phishing attacks
Speaker 14: with AI can become really really normally, like you're going
Speaker 14: to see a lot more of these attacks. That cost
Speaker 14: to do those attacks are going to drop dramatically, which
Speaker 14: means you've got to use AI to be able to
Speaker 14: you know, defend as well. It's not just about using
Speaker 14: AI for attacking, you use AI for defending. So there
Speaker 14: are two parts to this. You want to make sure
Speaker 14: you're securing the use of AI, and you also want
Speaker 14: to make sure that you're using AI to make security better.
Speaker 8: And at Cisco we're doing both simultaneously.
Speaker 4: So what's the thing that keeps you up at night?
Speaker 1: Like, I just do think about some of this is happening,
Speaker 1: Like we've moved so quickly. It seems like all of
Speaker 1: a sudden from generative to agentic AI, and I think
Speaker 1: people are just catching up to be like what is
Speaker 1: this all about? So what is it that kind of
Speaker 1: worries you as things move so fast?
Speaker 8: I think.
Speaker 14: I think one of the one of the biggest things is,
Speaker 14: you know, there's always this feeling like we're not moving
Speaker 14: fast enough, you know.
Speaker 4: Because do you feel the pressure from customers.
Speaker 14: I think at this point in time, everybody's feeling the
Speaker 14: pressure when you talk to anybody that is in AI
Speaker 14: that the rate at which AI is moving, everybody's just
Speaker 14: trying to make sure that they're they're they're keeping up
Speaker 14: with the advances that's happening across the entire ecosystem.
Speaker 3: Hey, DJ, I'm curious about the fragmentation in the security
Speaker 3: market right now, and I'm wondering how you see Cisco
Speaker 3: potentially playing a role when it comes to consolidating all
Speaker 3: the features and the functions that are out there.
Speaker 14: You're you know, this is a top of mind issue
Speaker 14: for a lot of cisows, you know, chief information security
Speaker 14: officers that are looking to consolidate a lot of the
Speaker 14: different point products that are there inside of their ecosystem. Cisco,
Speaker 14: as you know, you know, with the acquisition of spun
Speaker 14: because one of the largest security companies on the planet
Speaker 14: at this point, and we've taken a very intentional approach
Speaker 14: to consolidating a lot of these things into a single
Speaker 14: pane of glass.
Speaker 8: What we launched earlier this year was something called.
Speaker 14: Security Cloud Control, and this is a consolidation effort. You know,
Speaker 14: you don't have to worry about each and every single
Speaker 14: point products instead of your ecosystem, but you bring it
Speaker 14: all together and you use AI assistance to be able
Speaker 14: to manage all of these products. So, you know, we're
Speaker 14: entering into that AI and agentic era. You've got to
Speaker 14: have those capabilities so that the defenders have the advantage
Speaker 14: over the attackers that are cloning your whits and doing
Speaker 14: those fishing attacks. You really need to give the defenders
Speaker 14: an advantage, and that's really what we're doing at siscoll.
Speaker 1: You know. One of the things, you know, when we
Speaker 1: look at kind of the universe, your competitors as well,
Speaker 1: and when investors think of networks security, they often think
Speaker 1: of palolp On Networks and some other players that are
Speaker 1: out there, especially when it comes to the firewall space.
Speaker 1: I'm just curious, are there products dj or software that
Speaker 1: can kind of change market perception, investor perceptions and market
Speaker 1: share dynamics.
Speaker 14: Absolutely one of the key things about you know, the
Speaker 14: way you're starting to see these attacks evolved, especially in
Speaker 14: the age of you know, AI and agentic era, you
Speaker 14: got to realize that one of the core enforcement points
Speaker 14: for stopping all of these bad actors and bad attacks
Speaker 14: is in the network.
Speaker 8: Now, when you take that security and the profits of
Speaker 8: security that.
Speaker 14: We have and refuse it into the fabric of the network,
Speaker 14: that's when you're really moving the needl And so when
Speaker 14: you think about Cisco, you see that we bring both
Speaker 14: of these.
Speaker 8: You know, we've been doing networking for the past forty.
Speaker 4: Years long time.
Speaker 14: We've been doing security for a pretty long time too.
Speaker 14: But when you start to combine those two things in
Speaker 14: a single place, man, like we've got we're miles ahead
Speaker 14: of everybody else that's out.
Speaker 4: There thirty seconds.
Speaker 1: What's surprising you that you're hearing at this event, like
Speaker 1: we're just blown away and the conversation just get about
Speaker 1: thirty seconds, Like what are you hearing as kind of
Speaker 1: a dynamic narrative.
Speaker 14: One of the core things that I'm seeing that's that's
Speaker 14: really surprising is the number of customers that are implementing
Speaker 14: AI infrastructure projects inside of their own enterprise environments. They
Speaker 14: realize that AI cannot be somebody else's AI. AI has
Speaker 14: to be their own and they want to run this
Speaker 14: inside of their own data centers, and that to me
Speaker 14: is very welcome, and I'm very happily surprised by that
Speaker 14: because we're ready.
Speaker 8: To help them.
Speaker 1: So that means a lot of on site on premise, right,
Speaker 1: It's exactly right.
Speaker 4: It's not all up in the cloud.
Speaker 14: Not all up in the cloud, because they have lots
Speaker 14: and lots of this data that's proprietary that's sitting inside
Speaker 14: of their own environments that they're not quite ready to
Speaker 14: push it into the pod.
Speaker 4: Which I think is surprising. But like here, it's happening. DJ,
Speaker 4: thank you so much. Great way to kick off our
Speaker 4: coverage here.
Speaker 8: Thank you, Carol. Thanks dam.
Speaker 1: DJ Sampath, Senior vice president of Cisco's AI Software Platform Group.
Speaker 2: This is the Bloomberg Business Week Daily podcast. Listen live
Speaker 2: each weekday starting at two pm Eastern on Apple car
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Speaker 1: We are across the country. We're on the West Coast,
Speaker 1: staying here. Some great conversations here at Cisco Live twenty
Speaker 1: twenty five. There's so much happening around Tim and me,
Speaker 1: and we've got a great guest to kind of get
Speaker 1: into some of the enterprise connectivity issues collaboration, because that's
Speaker 1: what he oversees.
Speaker 3: Honor Rock Deingra is Senior vice president and General Manager
Speaker 3: of the Enterprise Connectivity and Collaboration Group at Cisco. He's
Speaker 3: also founding executive sponsor of Cisco's Responsible AI Initiative, which
Speaker 3: means we're going to talk a little AI as well.
Speaker 3: I want to talk you. You ever see this diverse portfolio
Speaker 3: of collaboration tools that are all under Cisco's umbrella. When
Speaker 3: you think about what collaboration in the workplace means right
Speaker 3: now with a distributed workforce, with some people working from home,
Speaker 3: some people at the office, all at the same time,
Speaker 3: what's the one solution that can bring them all together?
Speaker 15: Thank you for having me Tim on the program.
Speaker 16: So when you think about collaboration, it's more than just
Speaker 16: the tools you used to meet with people or to
Speaker 16: call people.
Speaker 15: You know, obviously those are the essential tools.
Speaker 16: Where it starts with foundational technology, which is the network
Speaker 16: you want to make sure that everyone can connect seamlessly
Speaker 16: and securely to the network first, no.
Speaker 15: Matter where they're working from.
Speaker 16: And you know, our definitely of the workplace is quite expansive,
Speaker 16: and we talk about a regular office, we talk about
Speaker 16: a retail store, a factory floor, or your home or
Speaker 16: your car.
Speaker 15: Wherever you work from is a workplace.
Speaker 16: And so it starts with foundational elements of connectivity and
Speaker 16: then once you're connected, then it's all about delivering the
Speaker 16: best possible experience. And so one of the things that
Speaker 16: Cisco has been innovating in is this concept of distance zero.
Speaker 15: And the idea is very simple.
Speaker 16: When you're meeting with other people who are not in
Speaker 16: the same room with you, it should feel like there's
Speaker 16: no distance between you. And so we've been working on technology,
Speaker 16: whether that is video conferencing technology, whether that is services
Speaker 16: that we deliver to amazing experiences that bring people closer to.
Speaker 3: What's the biggest hiccup that prevents people from actually experiencing
Speaker 3: distance zero? Is it connectivity issues?
Speaker 16: So I think it's a mix of things, right, So, first,
Speaker 16: this connectivity has to be rock solid, and you know,
Speaker 16: when you're thinking about the diversity of spaces that we're
Speaker 16: talking about, sometimes you don't have a solid Wi Fi
Speaker 16: in a conference like this, it can be very tricky Hotel.
Speaker 3: As an example, like getting gay dropped on right the
Speaker 3: computer with spine the phone was and it was like
Speaker 3: it was actually really really hard to work.
Speaker 16: Yeah, we take connectivity for granted, but it's actually still
Speaker 16: very complex, and especially for people who build and manage
Speaker 16: these networks, the complexity is only growing with emergence of
Speaker 16: AI agents and digital.
Speaker 15: Workers in the workplace, It's only going to get more complicated.
Speaker 15: So we're ready focused on how do we deliver amazing.
Speaker 16: Experiences for people who are connecting, but how do you
Speaker 16: make it easier for it to manage it all under ug.
Speaker 1: Our networks generally ready for AI or would you say no, I.
Speaker 16: Would say they're not ready right now. And here's why
Speaker 16: I say that. Look, everyone can feel that this is
Speaker 16: transformittive technology and we're at the beginning of a major
Speaker 16: technology shift. When you look back at other technology disruptions,
Speaker 16: you know, the beginning of the Internet, mobile devices, cloud computing,
Speaker 16: it causus to take a step back and reimagine how
Speaker 16: network should be built and managed. And AI is much
Speaker 16: bigger than that. When you think about the proliferation of
Speaker 16: AI agents in the workforce, digital work that are doing
Speaker 16: human like work. You know, they're communicating and doing work
Speaker 16: like us, but at machine speed and scale. So the
Speaker 16: networks have to really deal with an influx of much
Speaker 16: bigger traffic patterns and security soface cities that are exploding there.
Speaker 4: Well, one thing I want to ask you. I know
Speaker 4: we're like we bought, although we're like dying to ask questions.
Speaker 4: I am curious.
Speaker 1: About because we keep thinking about the Capex spand right
Speaker 1: and all that is AI, But I'm also thinking about
Speaker 1: are they not going to do the spend because they're
Speaker 1: worried about the power being there for all the AI?
Speaker 1: And I use the term AI loosely. Right, there's a
Speaker 1: lot going on, but is the power not necessarily there
Speaker 1: and the systems there? We keep doing some reporting on
Speaker 1: that front that's going to slow some of that spend.
Speaker 16: So I think, first of all, I think this is
Speaker 16: going to be a central technology. This is almost like
Speaker 16: if you ask someone to do you want connection to
Speaker 16: the Internet, of course the answer is yes.
Speaker 15: So this is not going to be optional.
Speaker 16: Organizations have to figure out how to enable their workforce
Speaker 16: with AI tooling, But how do you do that in
Speaker 16: a scalable fashion? That's really the question. And I think
Speaker 16: there are two parts to this power equation. So one
Speaker 16: is for training models. These large data centers that are
Speaker 16: being built out around the world to create these models,
Speaker 16: they are very power hungry. But when you think about
Speaker 16: deploying your applications in your office environment, you have to
Speaker 16: make sure that even there you're building scalable and devices
Speaker 16: that are power efficient, and that's what we're focused on
Speaker 16: with the number of new product announcements that we made here.
Speaker 16: These network devices, whether there's the switches or routers or
Speaker 16: wireless access points, they're built to be very efficient from
Speaker 16: a follow consumption point of view.
Speaker 3: Because you over see this portfolio of tools that are
Speaker 3: meant for helping collaboration across different areas, you must have
Speaker 3: some really cool statistics when it comes to who's working
Speaker 3: from home, who's returning to the office. We've been talking
Speaker 3: a lot about this, even five years in past COVID.
Speaker 3: Even in London, for example, many banks are facing a
Speaker 3: shortage of desks because of a real estate squeeze, but
Speaker 3: they're trying to get people to come back into the office,
Speaker 3: so there's this tension happening there. What are the patterns
Speaker 3: that you're seeing emerge in different parts of the world
Speaker 3: right now when it comes to return to the office, Yeah.
Speaker 15: So I think most companies have settled into a rhythm.
Speaker 16: Most companies have people coming back into the office at
Speaker 16: least part of the week. Now, it varies quite a
Speaker 16: bit across the globe, and it also depends on the
Speaker 16: organizational culture. But what we're seeing is most companies that are
Speaker 16: back in the office is two to three days a week,
Speaker 16: at least in the United States, there is generally a
Speaker 16: culture of remote work and hybrid work, much more than
Speaker 16: what we see in the rest of the world. But
Speaker 16: even here, most companies have settled.
Speaker 15: Into a rhythm.
Speaker 16: Now, what's essential is even if people are in the
Speaker 16: office that's three days a week, there are other people
Speaker 16: who are remote, and you might be working outside of
Speaker 16: for the organization with partners and customers. So there's always
Speaker 16: going to be people who are remote who are not
Speaker 16: in the same room as yourself. And this is why
Speaker 16: at Cisco we are very focused on how to build
Speaker 16: the right technology so it feels like there's no distance
Speaker 16: between you.
Speaker 1: So mobility within the enterprise, is it going to impact
Speaker 1: more the people who are working from home already or
Speaker 1: is it going to be more influential on the people
Speaker 1: back at the office.
Speaker 16: I think it's both, right. I think it is really
Speaker 16: a hierarchy of needs for employees.
Speaker 10: Right.
Speaker 16: It starts with if I'm in the office or in
Speaker 16: my home office, do I have the tools, the basic
Speaker 16: tools to get my job done? So that's number one, right,
Speaker 16: And that's where connectivity and you know, meeting tools and
Speaker 16: things like that come up. But after that, it's how
Speaker 16: do I collaborate with my team? How do I get
Speaker 16: more creative? How do I actually get creative work done
Speaker 16: when we may or may not be in the same room.
Speaker 16: And if I get to the office, I want to
Speaker 16: make sure it's worth my commute to the office that
Speaker 16: I can find a desk to sit with my team,
Speaker 16: I can find a confrom room when I needed.
Speaker 15: The enquirement has to be very supportive. If I'm going
Speaker 15: to make the strip through the office.
Speaker 1: I think about kind of the connectivity, connectivity that we
Speaker 1: have as we go from office to office. Right, whether
Speaker 1: it's printers, I mean, something basic, but we can it works,
Speaker 1: but exactly we pop into a system or and.
Speaker 3: Everything I try to do to make it not working.
Speaker 4: Able to remote access like it is pretty amazing.
Speaker 3: It's a reason why they have us practice that stuff
Speaker 3: serious requirement. Hey, we don't have a ton of time
Speaker 3: with you, but I want to talk a little bit
Speaker 3: about AI in a couple of different context One about
Speaker 3: AI embedded in WebEx and call center products and sort
Speaker 3: of the progress that you're making there if you're able
Speaker 3: to monetize it. And then I want to get to
Speaker 3: save AI in just a second. But first talk with
Speaker 3: WebEx and the collaboration for it.
Speaker 16: Right, So WebEx really has kind of two parts of
Speaker 16: the portfolio. One is really focused on meetings and callings
Speaker 16: and things like that, and that's where AI is really
Speaker 16: an assistant for you. It can generate meeting summarys, it
Speaker 16: can take notes for you, it can do things for
Speaker 16: you in the contact center space, in the customer experience space.
Speaker 16: We have now new AI based agents. These agents are
Speaker 16: completely autonomous. They can talk to a human as a human.
Speaker 4: It's pretty crazy.
Speaker 15: So they are voice.
Speaker 16: Enabled, but if you want to chat with it, of course,
Speaker 16: you know, chatbots have been around for a long time.
Speaker 15: What's different about these agents now is they can.
Speaker 16: Actually take actions, so they'll understand your intent and you know,
Speaker 16: if you say, look, hey, I want to reschedule my
Speaker 16: doctor's appointment, They'll go ahead and do that for you,
Speaker 16: send your notification as a confirmation. And we're seeing a
Speaker 16: tremendous demand for this technology and this is starting to
Speaker 16: make a lot of difference in the customer service ex fegion.
Speaker 1: So they're not going to get added TODE when I
Speaker 1: call my doctor's office and.
Speaker 4: Like they have.
Speaker 3: It's like the Seinfeld where you know, like your folder
Speaker 3: has been flagged already, so you get directly.
Speaker 4: I definitely have been flagged in a good way and
Speaker 4: in a bad way.
Speaker 1: Public I want to ask you though, during COVID you
Speaker 1: mentioned WebEx. I mean, why didn't you guys take better
Speaker 1: advantage or more advantage during COVID. Do you just talk
Speaker 1: to us a little bit about during the lockdowns be
Speaker 1: you know, just like Zoom did.
Speaker 13: Yeah.
Speaker 16: So, I think our focus has always been helping large
Speaker 16: enterprises connect their employees and we were very successful in
Speaker 16: that space and we continue to do that. CISCOULD never
Speaker 16: really took this COVID as an opportunity to go into consumers.
Speaker 16: We did make WebEx available for free to lots of governments.
Speaker 16: Charitable organization educational institute. So we did that, but our
Speaker 16: focus was very much around being an enterprise product.
Speaker 15: Now, when you think.
Speaker 16: About where we've come along with the event of AI
Speaker 16: with autonomous agents as part of the WebEx and all
Speaker 16: of the stuff that I was talking about earlier about
Speaker 16: distance zero and conference room, I believe that the product
Speaker 16: has come up very long way and it's amazing, and
Speaker 16: so you actually have to see to believe it. A
Speaker 16: lot of people don't haven't experienced it in a while,
Speaker 16: so I would encourage anyone to take a look and
Speaker 16: see how far we've come.
Speaker 3: I mentioned that you're founding executive sponsor Cisco's Responsible AI Initiative, Right,
Speaker 3: what is responsible AI and what's irresponsible AI? And I
Speaker 3: want you to answer the irresponsible part first.
Speaker 16: Yeah, So when we started this journey several years ago,
Speaker 16: generative AI is obviously the you know, the trend right now,
Speaker 16: but we started this even before people are talking about
Speaker 16: GENERTI VII. The idea really was how do you make
Speaker 16: sure that bias doesn't creep into AI systems, that if
Speaker 16: AI is starting to make autonomous decisions that are consequential,
Speaker 16: that those.
Speaker 15: Are done in a responsible way. And how do you
Speaker 15: put guardrails around those systems.
Speaker 16: When we are building technology, how do we make sure
Speaker 16: this technology is used more for good than for the
Speaker 16: various reasons. So that's really the genesis of that program,
Speaker 16: and then we came up with a few principles and
Speaker 16: then that translated into development guidelines for our peak.
Speaker 3: Can you, I mean, when you look across the landscape,
Speaker 3: can give us examples of AI that's not responsible, something
Speaker 3: that can concerns you out there?
Speaker 16: Well, I'll tell you, Like these systems that are starting
Speaker 16: to show up in workplaces right now, they are not
Speaker 16: very deterministic. You know, they're powered by language models that
Speaker 16: can hallucinate, so they can say bad things, they can
Speaker 16: make things up.
Speaker 3: And so you're talking about deployment of potentially tools that
Speaker 3: everybody knows about across enterprises and not living up to
Speaker 3: the expectations that the customers have.
Speaker 16: I'll give you yes, and I'll give you a couple
Speaker 16: of examples. So imagine if there was an automated system
Speaker 16: that was approving your mortgage application and that system just
Speaker 16: decided to decline your application for reasons that are not
Speaker 16: even explainable because this algorithm is a black boss.
Speaker 15: Well, that is not very good. So you want to
Speaker 15: make sure that there's a way to protect against that.
Speaker 16: Or imagine hate speech creeping into this chatbot that you're
Speaker 16: interfacing with. There's in a customer service scenario, how do
Speaker 16: you protect against those things? You can't do that if
Speaker 16: you haven't systematically thought about being responsible with these systems,
Speaker 16: and that is where that program comes in Handy.
Speaker 3: I don't know how you feel about this, but it
Speaker 3: seems like people accept answers from lms in a way
Speaker 3: they didn't accept answers from Google. From Google in the
Speaker 3: early part of search. Do you feel that way?
Speaker 16: I think yes, And I think there's also emerging research
Speaker 16: that people are nicer to AI than they are two people,
Speaker 16: which is interesting.
Speaker 1: I think they like feel like they're like this relationship
Speaker 1: with this thing.
Speaker 3: Something'll be pushing back on chat gip too.
Speaker 1: Yeah, I'm often cross referencing, like going somewhere else and
Speaker 1: like checking out that.
Speaker 16: This is why it is really important that we build trustworthy,
Speaker 16: worthy systems, and then we go out of our way
Speaker 16: to make sure that you can trust the response that
Speaker 16: are getting out of these systems.
Speaker 15: This is why these programs are critical.
Speaker 1: Anor like I think about right, So we Google and
Speaker 1: we do trust our responses and there are reviews, Like
Speaker 1: there's different ways of kind of checking on it.
Speaker 4: What will be the gut check on llms? Will there
Speaker 4: be rating systems? Will there be like so, how does
Speaker 4: that progress?
Speaker 9: Right?
Speaker 16: So, one of the things that we are doing here
Speaker 16: at Cisco earlier in the year, we announced a product
Speaker 16: called AI Defense, and the idea is very simple. First,
Speaker 16: it starts with observing how people are using these applications,
Speaker 16: and a second, you can start to put some guardrails
Speaker 16: so you can start to sanitize the inputs that people
Speaker 16: are getting to these large legit models. You can also
Speaker 16: do the same thing in the other way around. So
Speaker 16: for example, you wanted to protect people from hate speech,
Speaker 16: you can put those type of guardrails. You wanted to
Speaker 16: make sure that these models are not hallucinating and not
Speaker 16: giving you wrong answers, you can start to put guards
Speaker 16: around that. And so you will see a lot of
Speaker 16: these tools emerged and the models themselves are getting better
Speaker 16: with these type of productions.
Speaker 15: But I think there's always going to be a.
Speaker 16: Need to have tools that you can control as an
Speaker 16: organization that not only comply with the law of the land,
Speaker 16: but also with your have values, with your policies, and
Speaker 16: so it's important to have those types of tools.
Speaker 3: Yeah, it's interesting. So I spent a lot of time
Speaker 3: with chatchipt, a lot of time with anthropics Claude. And
Speaker 3: you know one thing that I've noticed about Claude, and
Speaker 3: this is Sonnet for it says, well playing with it's
Speaker 3: like pull this up and says Claude can make mistakes,
Speaker 3: Please double check responses, whereas there's no, there's not necessarily
Speaker 3: that same disc that's after every answer with claud You
Speaker 3: don't have that same answer with chat GPT, with Quad,
Speaker 3: they won't generate images for you.
Speaker 4: Do we have it with even like Google.
Speaker 3: With Google's AI feature.
Speaker 4: Like normal search?
Speaker 3: Well normally, but I feel like that's just in our
Speaker 3: DNA as people who search for things like I feel
Speaker 3: like I feel like Internet culture, we are taught to
Speaker 3: be skeptical of what you find on the Internet. Yeah,
Speaker 3: we're not necessarily taught to be skeptical of the answers
Speaker 3: that these lms are giving us. Is that wrong?
Speaker 16: Well, I think there are different companies who are taking
Speaker 16: different approaches. So do you just pointed out with what
Speaker 16: you saw on Claude? So I think there is a
Speaker 16: need to drive more of illness, that you should not
Speaker 16: blindly trust what you get out of these systems, and
Speaker 16: you should always have sort of a skeptical mindset for
Speaker 16: for these type of things. But companies who are putting
Speaker 16: these disclaimers, I think they are doing the right thing
Speaker 16: by making the making the user of challenges.
Speaker 3: We're speaking with anurag Denngra, senior vice president and the
Speaker 3: general manager of the Enterprise Connectivity and Collaboration Group at Cisco.
Speaker 1: So I'm just thinking, you know, our audience is a
Speaker 1: smart one. It's an investor audience. I mean when you
Speaker 1: think about you know, when they're looking at companies who
Speaker 1: are embracing AI and building out their infrastructure, what do
Speaker 1: they want to see from their companies to make sure
Speaker 1: that they are doing that well. So, like, what's your
Speaker 1: thinking about what businesses should be doing to create safe,
Speaker 1: secure AI infrastructure?
Speaker 16: Right, So the first thing I'll say is you want
Speaker 16: to make sure that your infrastructure is ready to deploy
Speaker 16: AI at scale, because this is being the different Deploying
Speaker 16: AI could be the difference between you being a leader
Speaker 16: in your space and being irrelevant, and so it is
Speaker 16: very important to start with what do I need in terms.
Speaker 15: Of network connectivity.
Speaker 16: How do I have scalable networks that are not just
Speaker 16: ready for the traffic that you're running on them today,
Speaker 16: but the use case that AI is going to unlock tomorrow.
Speaker 15: How do you secure it?
Speaker 16: This is why all the announcements that we made here
Speaker 16: at Cisco I are really about AI, the secure networking products,
Speaker 16: scalable devices, security at the core of the network.
Speaker 15: So that's number one.
Speaker 16: Second, with applications like AI defens that I was talking
Speaker 16: about earlier, Yeah, the start to put guard rails around safe.
Speaker 15: And secure use of AI.
Speaker 16: And then if you are in the business of building applications,
Speaker 16: building products, then I would encourage every company to think
Speaker 16: about how you're gonna protect your systems. How are you
Speaker 16: gonna make sure that your systems are used for good.
Speaker 16: This is where programs like the Responsible I program come
Speaker 16: in interplay.
Speaker 1: I feel like, especially with publicly health companies, will be
Speaker 1: like a whole new section, like when they either report
Speaker 1: or something right like that we will be dealing with
Speaker 1: to get an idea of how safe and secure their
Speaker 1: systems are.
Speaker 16: Yeah, I think in some ways it's gonna be like security. Yeah,
Speaker 16: and you know, As these these challenges become more more
Speaker 16: well known, As companies become more aware, they're start to
Speaker 16: demand systems that can provide the visibility on what's happening
Speaker 16: with the use of these sools.
Speaker 1: It's definitely a new world order, but really fascinating. An Eric,
Speaker 1: Thank you so much, covered so much ground. Thank you,
Speaker 1: Thank you, good luck for having good luck at the
Speaker 1: good luck at the Steve Rakdingras, Senior Vice President, General Manager,
Speaker 1: Enterprise Connectivity and Collaboration.
Speaker 4: Here at Cisco Live twenty twenty five, you.
Speaker 2: Are listening to the Bloomberg Business Weekdaily podcast. Catch us
Speaker 2: Live weekday afternoons from two to five pm Eastern. Listen
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Speaker 2: or watch us Live on YouTube.
Speaker 3: We're highlighting some of our favorite conversations from Cisco Live
Speaker 3: twenty twenty five.
Speaker 4: Now.
Speaker 1: As President chief Product Officer at Cisco G two, Patel
Speaker 1: is responsible for charting the path forward for the company
Speaker 1: through all the changes and the growth of artificial intelligence.
Speaker 1: It's a lot.
Speaker 3: We spoke to him at the conference about everything going
Speaker 3: on at Cisco, including why the event itself is so important.
Speaker 10: Look, these are our customers.
Speaker 17: There are partners and their companies who are considering buying
Speaker 17: Cisco technology, and one of the things that we want
Speaker 17: to make sure that we're very clear with is what
Speaker 17: are the core problems we're sol and what are the
Speaker 17: key innovations that we're making. And we want to make
Speaker 17: sure that we can provide that to them and have
Speaker 17: them talk to the technical experts so that they can
Speaker 17: actually learn about the products and you know, you know,
Speaker 17: kind of pressure testimony they're here. We're in a really
Speaker 17: interesting place right now because we're in the next era
Speaker 17: of AI. So we've past two and a half years
Speaker 17: since chat GPT came about. We had this kind of
Speaker 17: seismic shift that happened in the industry, and we have
Speaker 17: these chatbots that could intelligently answer questions that we.
Speaker 10: Had, and we're now going to this next.
Speaker 17: Era where there's going to be agents that can conduct
Speaker 17: tasks and jobs fully autonomously on our behalf that initially
Speaker 17: they'll start working by themselves for a couple hours, and
Speaker 17: then over time they might be a couple couple of
Speaker 17: days and then a couple of months and a couple
Speaker 17: of quarters, and the possibility of the kinds of problems
Speaker 17: we can solve are so amazing, and we want to
Speaker 17: make sure that we provide the infrastructure to make that happen.
Speaker 3: So are you talking about with the agentic solutions that
Speaker 3: you're talking about are you talking about in France specifically.
Speaker 10: Correct.
Speaker 17: So we've been working on, you know, working with people
Speaker 17: on making sure that we can provide the infrastructure for
Speaker 17: training for the past couple of years.
Speaker 3: And that's where a lot of the that's where a
Speaker 3: lot of the spendspen in, a lot of the spend,
Speaker 3: a lot of the rewarding by shareholders of certain companies,
Speaker 3: no question.
Speaker 10: Has been to date.
Speaker 17: But now what you're starting to see is the demand
Speaker 17: signal for inferencing is going up quite a bit. And
Speaker 17: if you think about what's happening and inferencing, when you
Speaker 17: just had an interactive mode where you would ask a chat,
Speaker 17: bought a question, well what happened is you would have
Speaker 17: spikes of peaks that you would get on compute usage
Speaker 17: and on data center usage. When you have an agent
Speaker 17: and that agent is fully autonomously and proactively working on
Speaker 17: something and they're just kind of cranking away and there's
Speaker 17: not just one agent, there's tons of agents working together.
Speaker 17: What you see is a sustained demand for inferencing capacity,
Speaker 17: and it's persistent inferencing that's needed. So your infrastructures kind
Speaker 17: of assumptions, the amount of netw bandwidth you need, the
Speaker 17: amount of you know, kind of safety and security that
Speaker 17: needs to be in play is very, very different. And
Speaker 17: so right now we're working with a lot of the
Speaker 17: governments who want to make sure that they have sovereign
Speaker 17: data centers all throughout the world.
Speaker 10: We are also working.
Speaker 4: With That's a big demand push right now, isn't it huge?
Speaker 17: Huge menbuss I was in the Middle East, Yeah, just
Speaker 17: a couple of weeks ago, and we announced partnerships with
Speaker 17: Humane and Saudi Arabia. We announced partnerships at G forty
Speaker 17: two at Stargate UAEE, And the reason for this is
Speaker 17: because there's an insatiable demand right now. If you think
Speaker 17: about what's the constraint in AI today, it's infrastructure and
Speaker 17: it's safety and security where people have to trust these
Speaker 17: systems otherwise they're not going to use them.
Speaker 10: And so those are the two big constraints.
Speaker 17: And of course the third one is a skills gap
Speaker 17: where you have to keep training people up. But the
Speaker 17: first two are pretty material and imagine if we had
Speaker 17: a world where infrastructure was not a constraint. Imagine all
Speaker 17: the problems we could solve that we're currently not able
Speaker 17: to solve because of the constraint of infrastructure.
Speaker 1: But some of those constraints are serious to you too,
Speaker 1: And I think about you as you guys are ramping
Speaker 1: up and building out and providing what customers need, whether
Speaker 1: it's enough power to do it all, how are you
Speaker 1: guys kind of balancing that you're doing what you need
Speaker 1: to be doing, but making sure everything else is there
Speaker 1: to support it.
Speaker 17: I mean, if you think about the large constraints, they
Speaker 17: compute their power because GPUs are power hungry, and then
Speaker 17: there's network bandwidth, and then there's safety and security, like
Speaker 17: those are the four kind of high level buckets. If
Speaker 17: you think about power, what we are trying to do
Speaker 17: is make sure that we can have the lowest amount
Speaker 17: of latency, the highest performance, and the most power efficiency
Speaker 17: because how long it takes for a packet to get
Speaker 17: to the GPU to get processed right really matters. And
Speaker 17: if you have idle time on a GPU, that's actually
Speaker 17: not a good thing. You want to make sure that
Speaker 17: you're keeping the GPU utilization high and so we need
Speaker 17: to make sure that we have power efficiency. Every killer
Speaker 17: water power we save is a killer water power you
Speaker 17: can give to the GPU, and then we meet need
Speaker 17: to make sure that the backups keep flowing.
Speaker 4: So capability and efficiency, you're constantly like balancing.
Speaker 10: Constantly balancing it, right, Yeah, absolutely.
Speaker 1: Because you've got to make sure it's efficient, otherwise it's
Speaker 1: not going to be financially going to make sense.
Speaker 17: That's exactly right, because if you if you don't have
Speaker 17: the right level of power efficiency. But for firstly, all
Speaker 17: of the data centers that are getting built right now,
Speaker 17: you we are running out of data centers to build
Speaker 17: in certain.
Speaker 10: Geographies because you don't have enough powers.
Speaker 17: You actually tend to go to where the power is,
Speaker 17: and data centers are getting built where the power is.
Speaker 10: So it's a very important commodity.
Speaker 4: Is that true globally?
Speaker 10: Yeah, it's absolutely.
Speaker 1: The data set like running out of places to run
Speaker 1: data centers because of lack of power.
Speaker 17: Yeah, you just need you need to be not too
Speaker 17: far from the power so that you're you know, the
Speaker 17: the entropy is less and how that works.
Speaker 3: You're good, Carol. Enthusiasm between the two of you, that
Speaker 3: holistic questions that I want to make.
Speaker 4: We said we can go as long with you two
Speaker 4: as you will give us.
Speaker 10: Yes, that is as long as you want.
Speaker 3: That is the answer. Can you talk a little bit
Speaker 3: about the relationship that you have with in video, Yes,
Speaker 3: because I think a lot of in best of trying
Speaker 3: to understand from a customer perspective, from just a relationship perspective,
Speaker 3: what can you tell us?
Speaker 17: So we have enjoyed a very meaningful partnership with them
Speaker 17: for the past six years. You know, we six years
Speaker 17: ago we decided that we're going to use the nvidio
Speaker 17: chip sets and our video conferencing devices, and that made
Speaker 17: those devices very you know, kind of AI ready, and
Speaker 17: now what you see is a lot of kind of
Speaker 17: sophisticated AI capabilities are uploaded on the device itself, so
Speaker 17: that even if the device integrates for a third party
Speaker 17: like Microsoft Teams, they can benefit.
Speaker 10: From the innovations that we've made. So that's been a
Speaker 10: great partnership.
Speaker 17: What we did in the past few months, though, is
Speaker 17: we have doubled down on the partnership with data centers,
Speaker 17: and so we had announced that we have a AI
Speaker 17: factory and secure AI factory, which is basically what Nvidia
Speaker 17: has as a reference architecture, which is a suggested model
Speaker 17: mode of how companies should think about building out their infrastructure.
Speaker 10: And for the very first time they had a non Nvidia.
Speaker 17: Silicon provider that was actually part of that reference architecture,
Speaker 17: who was Cisco, And we were the first one of
Speaker 17: those that they actually incorporated into their architecture. Why is
Speaker 17: that important because customers look to nvidio to say, hey,
Speaker 17: what does your reference architecture look like? And now Cisco
Speaker 17: is part of that reference architecture. So that was the
Speaker 17: first thing. But what we've also done and what we
Speaker 17: announced today was our safety and security capabilities are pretty sophisticated,
Speaker 17: and we want to make sure that we actually tie
Speaker 17: that with Nvidia's you know, kind of efforts around if
Speaker 17: you're building an open source model and an application with
Speaker 17: an Nemo framework, we can now validate that model with Cisco.
Speaker 17: And so we aren't just helping with Nvidia and building
Speaker 17: a secure AI factory with the infrastructure and a full stack,
Speaker 17: but we're also helping.
Speaker 10: But how do you keep it secure and how do
Speaker 10: you keep it safe?
Speaker 17: And so because one of the challenges that you have
Speaker 17: is if people don't trust their AI systems, they're not
Speaker 17: going to use them, and so we want to make
Speaker 17: sure that people are trusting them.
Speaker 4: We're talking with G. Two Patel, President and chief Product
Speaker 4: officer at Cisco.
Speaker 1: We're here at Cisco Live twenty twenty five. What's the
Speaker 1: productive conversation around So much focus is on, especially when
Speaker 1: it comes tot Nvidia in their demand for tips, the
Speaker 1: hyper scalers, how much they are doing to get an
Speaker 1: idea of where we are in the AI race. But
Speaker 1: I'm also you know, you talk to you folks, and
Speaker 1: it's a lot of on premise build out.
Speaker 4: So what's the Yeah, are both okay?
Speaker 1: So what's the mix in terms of how we see
Speaker 1: this continue to grow?
Speaker 17: So I think the way that you will see this
Speaker 17: progress forward is there's three or four different models that
Speaker 17: will be out there. Firstly, one of the very counterintuitive
Speaker 17: things is hyperscalers are going to grow very rapidly, Private
Speaker 17: data centers are going to grow very rapidly, and neo clouds,
Speaker 17: which are actually AI specialists, are going to grow very opidly, and.
Speaker 10: So our service providers.
Speaker 17: So when there's you know, kind of a rising tide,
Speaker 17: all boats rise, and that's what's happening right now.
Speaker 10: Now. What is happening that's unique with.
Speaker 17: You know, data sovereignty and with you know kind of
Speaker 17: nationalistic behaviors that are kind of progressing from from a
Speaker 17: geopolitical standpoint, is there's more and more of an acceleration
Speaker 17: of demand of private data centers.
Speaker 3: Yeah, we talked about this on prem on prem.
Speaker 10: And specifically for infancing, I think for training.
Speaker 3: That's interesting.
Speaker 10: You know people might go to the cloud.
Speaker 3: Brother, do you see that as being part of a
Speaker 3: government regulation, a sovereignty issue or is it more an
Speaker 3: individual on an individual company basis.
Speaker 17: It's actually a combination of issues. It's you know, there's
Speaker 17: a sovereignty issue. There's also a data proximity issue. There
Speaker 17: might also be some companies who have enough scale where
Speaker 17: the scale itself might give them an advantage that they're like, hey,
Speaker 17: I don't need to go pay someone something. I might
Speaker 17: want to have some some of the workloads on my
Speaker 17: own premise. And so it's a combination of multiple issues.
Speaker 17: But what you are seeing is there's this kind of
Speaker 17: upsurge of demand and acceleration. The good news for us
Speaker 17: is we help the largest of hyperscalers with intra Cluster communication.
Speaker 17: You know, on on the networking side, we are also
Speaker 17: working with neocloud providers and then and then we've had
Speaker 17: relationships with service providers for the past couple of decades,
Speaker 17: and now what you're starting to see is a resurgence
Speaker 17: of demand on the enterprise that we know really really well.
Speaker 17: We've actually been working with enterprise data centers for the
Speaker 17: past forty years and now we are actually starting to
Speaker 17: see a massive resurgence because of AI inferencing demand and.
Speaker 10: The agentic workflows.
Speaker 17: When every company is starting to rethink their workflows, whether
Speaker 17: it be a BB a healthcare company, or a bank
Speaker 17: or a financial services or insurance company, every workflow is
Speaker 17: getting reimagined. Infrastructure is going to be built out everywhere,
Speaker 17: and we want to make sure that we are the
Speaker 17: common networking substrate and we are the common security and
Speaker 17: safety kind of provider across the board.
Speaker 4: So G two.
Speaker 1: In an environment where we constantly are talking about an
Speaker 1: uncertain environment because there's stuff coming at us even today
Speaker 1: as we kind of continue to watch the negotiations between
Speaker 1: US and Chinese officials over in London, how would you
Speaker 1: describe demand the CAPEX spend that you are seeing, whether
Speaker 1: it's the hyperscalers, whether it's those folks building their enterprise systems,
Speaker 1: like the different buckets that you play into.
Speaker 10: The demand signal is stronger than an ever.
Speaker 17: I've never seen anything, you know, stronger on the demand
Speaker 17: signal side, because you've you've got trillions of dollars that
Speaker 17: are going to be flowing in for these data center
Speaker 17: buildout capacities.
Speaker 10: So the demand signal is very strong.
Speaker 17: It's actually also happening globally, so it's not just happening
Speaker 17: in the US. You're starting to see demand in the
Speaker 17: Middle East, You're starting to see it in Europe, You're
Speaker 17: going to start to see it in Asia. And one
Speaker 17: of the things that's important for America is we want
Speaker 17: to make sure that American technologies are being utilized in
Speaker 17: all these data center buildouts because that's good for America
Speaker 17: and that's good for the world. Frankly, and so you know,
Speaker 17: Cisco and Nvidia and open AI and others and all
Speaker 17: of our partners, I think a MD it's extremely important
Speaker 17: that we all work together to make sure that these
Speaker 17: these kind of data center buildouts happen with our technology.
Speaker 3: You know, you're you're shocking me with the just the
Speaker 3: striking magnitude of these investments. It's what is what is
Speaker 3: not being Where's money not being spent as a result,
Speaker 3: as budgets get reallocated toward infrastructure, what's not getting money.
Speaker 10: I think what you'll find is the.
Speaker 17: In the short term, you actually have to take certain
Speaker 17: amount of dollars from existing projects and move them towards AI.
Speaker 17: And almost every company is doing that this and you know,
Speaker 17: I'm going to take twenty percent out for my existing
Speaker 17: projects move.
Speaker 10: Them towards AI.
Speaker 17: Over time, what you find is AI will get so
Speaker 17: much productivity that those twenty percent of the projects will
Speaker 17: get rehydrated. Because if you think about like, for example,
Speaker 17: we're one of the first partners with OpenAI on their
Speaker 17: codex project, which is the autonomous software Engineer. It's no
Speaker 17: longer where you just have an autocomplete where you can
Speaker 17: have an individual developer that gets productive.
Speaker 10: You can actually now tell an agent or.
Speaker 17: A group of agents, go solve a really hard problem
Speaker 17: for me and come back to me in a couple
Speaker 17: of weeks, and we'll be able to actually have a
Speaker 17: world that we are living in in relatively short you know,
Speaker 17: kind of time horizons where it'll be able to solve
Speaker 17: that problem and come back to you, and you'll still
Speaker 17: have the human in the loop that will be able
Speaker 17: to observe and that will be able to do things.
Speaker 17: But imagine what that does for the constraint we have
Speaker 17: twenty seven thousand engineers. I've never felt more constrained in
Speaker 17: my life about the ideas I have compared to the
Speaker 17: resources I have to prosecute those ideas. And we will
Speaker 17: actually get to a point where we can unlock those
Speaker 17: ideas in a very different way.
Speaker 3: What I was just gonna say. We could go on
Speaker 3: forever with G two, but apparently his team is telling
Speaker 3: us that you have to go speak there's even speaking gate.
Speaker 10: Keep going.
Speaker 3: Oh, he doesn't want to do it. He wants to
Speaker 3: hang out.
Speaker 8: With us, and you guys an't too fun.
Speaker 3: Hey, we're gonna get in trouble if we if we
Speaker 3: do that, well.
Speaker 4: I mean I'm gonna go go.
Speaker 1: I mean, I mean we're just kind of blown away
Speaker 1: every day, like what we are learning about this and
Speaker 1: how it's impacting our world. I mean, I don't know
Speaker 1: six months from now, a year from like, how should
Speaker 1: we be thinking about how dramatically this will impact everything?
Speaker 17: I think, firstly, your imagination will be challenged quite a
Speaker 17: bit because humans have a very hard time thinking exponentially
Speaker 17: for a sustained period of time.
Speaker 10: And this curve is exponential.
Speaker 17: And when it's exponential, it's not happening in a single dimension,
Speaker 17: it's happening across multiple dimensions all at once. And so
Speaker 17: if you think about it six months or twelve months
Speaker 17: or eighteen months from now, no longer are you just
Speaker 17: going to be thinking about this as a more efficient
Speaker 17: way for getting an answer. But you will have companions
Speaker 17: and sidekicks and a staff of people that are digital
Speaker 17: workers that can get a job done that you would
Speaker 17: have otherwise not had a time to do. And one
Speaker 17: important area to talk about is a lot of people
Speaker 17: worry about ISAI I going to take my job? I
Speaker 17: actually worry more about people that use AI really well.
Speaker 10: There's a higher risk of them taking your job than
Speaker 10: AI taking your job, noted, you know.
Speaker 17: And the other piece that I worry I also think
Speaker 17: about is if you actually have there's no one that
Speaker 17: I know that comes home every day and says, you
Speaker 17: know what, I've gotten everything done on my checklist, right,
Speaker 17: And so the reality is is when you there's eighty
Speaker 17: percent of the work that we do probably doesn't get
Speaker 17: checked off because we don't have time to do it.
Speaker 17: Now AI agents will start doing that. And then the
Speaker 17: final category that's the most exciting is it's AI will
Speaker 17: be able to do things that we were not able
Speaker 17: to do because it'll have original insights that don't exist
Speaker 17: in the human corpus of knowledge.
Speaker 10: And that's the area of AI, but I think is
Speaker 10: the most under hyped. G Two, we got to leave
Speaker 10: it there.
Speaker 3: Your crew is about to come on set, and where.
Speaker 4: You're to go and just where you know.
Speaker 1: I have a companion inside can but I'm ready for
Speaker 1: my AI companion.
Speaker 3: Inside than product officer as let's go here at Cisco
Speaker 3: Live twenty twenty five.
Speaker 2: This is the Bloomberg Business Week daily podcast, available on Apple, Spotify,
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