WEBVTT - Bloomberg Businessweek Weekend - May 23rd, 2025 0:00:00.280 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio News. 0:00:08.640 --> 0:00:13.000 This is Bloomberg business Week Daily reporting from the magazine 0:00:13.000 --> 0:00:17.599 that helps global leaders stay ahead with insight on the people, companies, 0:00:17.640 --> 0:00:22.520 and trends shaping today's complex economy. Plus global business finance 0:00:22.560 --> 0:00:25.880 and tech news as it happens. The Bloomberg Business Week 0:00:26.000 --> 0:00:31.320 Daily Podcast with Carol Masser and Tim Stenebek on Bloomberg Radio. 0:00:32.080 --> 0:00:35.040 Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:35.520 --> 0:00:39.760 This week, Cooper Tino Apple has an AI problem. Plus 0:00:39.800 --> 0:00:42.760 the world is actually a wash in those not so 0:00:42.960 --> 0:00:47.199 rare earth minerals, especially China. But don't count the US out. 0:00:47.400 --> 0:00:50.680 As you will hear from the CEO of MP Materials. 0:00:50.320 --> 0:00:53.000 And the language app due Lingo is talking up its 0:00:53.040 --> 0:00:56.720 growth and investors are noticing. The CFO featured in the 0:00:56.760 --> 0:00:59.960 latest episode of The Chief Future Officer stops by. 0:01:00.720 --> 0:01:05.080 Also, Elon Musk speaks a lot on Tesla sales, being CEO, 0:01:05.240 --> 0:01:09.039 plans for future political contributions, and his massive pay package 0:01:09.360 --> 0:01:12.640 gets tense at sometimes that's coming up in our next hour. 0:01:13.000 --> 0:01:15.039 All that to come. We begin, though with one of 0:01:15.040 --> 0:01:18.240 the week's most read stories. It features exclusive interviews with 0:01:18.240 --> 0:01:22.120 Apple insiders about how Apple has been falling short when 0:01:22.120 --> 0:01:23.880 it comes to cracking AI. 0:01:24.240 --> 0:01:26.640 This is a crisis. That's how one senior member of 0:01:26.680 --> 0:01:29.479 Apple's AI team put it to our team. For all 0:01:29.480 --> 0:01:32.160 the details, we caught up with our in house Apple expert, 0:01:32.360 --> 0:01:35.400 Mark German. He's the Bloomberg News Managing editor for Global 0:01:35.400 --> 0:01:36.199 Consumer Tech. 0:01:36.440 --> 0:01:36.600 Mark. 0:01:36.640 --> 0:01:38.360 I was struck by this. You know, just at the 0:01:38.360 --> 0:01:40.960 beginning of your piece, there's a picture of Phil Schiller 0:01:41.520 --> 0:01:44.319 introducing Siri back in twenty eleven, and there are these 0:01:44.360 --> 0:01:47.480 thought bubbles and it says will it rain? And Cooper Tino, 0:01:47.720 --> 0:01:49.960 what's the weather like today? Do I need an umbrella today? 0:01:50.600 --> 0:01:52.360 I was shocked to look at the small print and 0:01:52.360 --> 0:01:55.160 see that was from twenty eleven, because in my view, 0:01:55.320 --> 0:01:56.920 that's kind of what Siri still does. 0:01:58.000 --> 0:02:00.960 Uh yeah, that's the problem. 0:02:01.240 --> 0:02:04.320 That is a problem. Serie was revolutionary fifteen years ago. 0:02:04.680 --> 0:02:07.280 It was amazing for its first couple of years because 0:02:08.320 --> 0:02:10.200 we let's. 0:02:10.040 --> 0:02:11.120 See, how do I want to say this. 0:02:12.120 --> 0:02:14.880 It wasn't great, but it was still amazing and futuristic 0:02:14.880 --> 0:02:17.119 and sci fi and better than everything else. Then Amazon 0:02:17.200 --> 0:02:20.720 came around, Google came around, Microsoft came around, and they 0:02:20.760 --> 0:02:23.320 just blew Apple out of the water. The technology is 0:02:23.360 --> 0:02:25.600 just all legacy technology that they've been using for a 0:02:25.600 --> 0:02:29.200 long while now for all intents and purposes, we're not 0:02:29.280 --> 0:02:31.400 talking about a serie that's based on the same large 0:02:31.440 --> 0:02:34.520 language models and foundation model technology that you're seeing from 0:02:34.520 --> 0:02:38.000 open AI and Gemini from Google and you know, in 0:02:38.080 --> 0:02:41.040 thropic you name it, and so yeah, they have fallen 0:02:41.520 --> 0:02:42.880 way to the way south. 0:02:43.040 --> 0:02:45.640 Well, speaking of Google, there was a big hire there 0:02:45.720 --> 0:02:48.720 from twenty eighteen who was supposed to be the guy 0:02:48.840 --> 0:02:50.360 who did AI at Apple. 0:02:50.639 --> 0:02:52.280 He was supposed to be the guy who did AI 0:02:52.320 --> 0:02:53.880 at Apple, and he's still the guy who does AI 0:02:53.919 --> 0:02:58.960 at Apple. That's John gen Andrea. Biggest miss was generative AI. 0:02:59.240 --> 0:03:01.520 They seem to have not seen this coming, and if 0:03:01.520 --> 0:03:03.520 they did see it coming, they did little to nothing 0:03:03.560 --> 0:03:07.760 about it. They really, i'm told, started on the generative 0:03:07.800 --> 0:03:11.480 aipath after Craig Fedderigi, the head of software engineering, used 0:03:11.680 --> 0:03:15.760 chat GPT to finish some code for a personal project 0:03:15.800 --> 0:03:17.560 he was working on over the holiday break. Did they 0:03:17.600 --> 0:03:19.920 take this little one week break at the end of December. 0:03:19.960 --> 0:03:22.720 He was working on some personal software, as one does, 0:03:23.280 --> 0:03:27.519 and he figured out the power, Yeah, figured out figured 0:03:27.520 --> 0:03:30.160 out the power of chat GPT and then immediately they 0:03:30.200 --> 0:03:33.160 set iOS eighteen for twenty twenty four. This is gonna 0:03:33.200 --> 0:03:36.280 be the big AI release for Apple. From a marketing standpoint, 0:03:36.280 --> 0:03:38.920 it was. They marketed it really well, AI for the 0:03:38.920 --> 0:03:41.160 rest of us, just like the computer for the rest 0:03:41.200 --> 0:03:46.080 of us forty years ago. And you know, okay, we're 0:03:46.120 --> 0:03:52.400 good that. Yes, other than the other than the marketing, 0:03:52.640 --> 0:03:52.880 you know what. 0:03:52.920 --> 0:03:56.960 Let's take a step back in the robotics world. 0:03:56.960 --> 0:04:00.880 In the humanoid robotics world, the fundamental thing that a 0:04:00.960 --> 0:04:03.320 humanoid robot has to do is go to your kitchen, 0:04:03.360 --> 0:04:04.880 pick up a glass of water, and bring it to 0:04:04.920 --> 0:04:08.480 you without dropping it. Okay, Tim almost dropped his water 0:04:08.480 --> 0:04:10.080 all over him. So that's where I got the idea 0:04:10.080 --> 0:04:13.800 to mention this. The problem isn't so much the iPhone 0:04:14.000 --> 0:04:17.240 and the AI capabilities on today's devices. The problem is 0:04:17.240 --> 0:04:19.600 is can Apple make AI that's good enough to power 0:04:19.600 --> 0:04:21.919 a robot that's not going to spill their water like 0:04:21.960 --> 0:04:24.919 Tim right there? It is, And so the worry is 0:04:24.960 --> 0:04:28.360 not necessarily about the technology today, but it's the technology 0:04:28.360 --> 0:04:31.760 of tomorrow in a decade from now, and so the iPhone, 0:04:31.839 --> 0:04:33.760 you know, its rain is going to be over at 0:04:33.760 --> 0:04:35.599 some point but that's not really what matters here. I 0:04:35.600 --> 0:04:38.159 think that's that's not big picture enough. The big picture 0:04:38.200 --> 0:04:41.080 is the next set of stuff. We've seen AI already 0:04:41.360 --> 0:04:44.680 lead to the car cancelation in part. There were many 0:04:44.720 --> 0:04:46.880 other factors. But if Apple was able to get an 0:04:46.960 --> 0:04:49.760 L five car with tiptop AI and great safety features 0:04:50.480 --> 0:04:52.839 level five, yep, they would have brought it to market. 0:04:53.279 --> 0:04:55.520 So you know, we've already seen AI cost them one 0:04:55.520 --> 0:04:58.400 big category. They were supposed to have a big smart 0:04:58.400 --> 0:05:01.120 home push this year. It's been delayed. It was supposed 0:05:01.120 --> 0:05:02.920 to happen in March. Now it probably won't happen till 0:05:02.920 --> 0:05:05.479 the end of this year or next year. The AI 0:05:05.600 --> 0:05:09.960 not working cost that. Now they're already having trouble coming 0:05:10.040 --> 0:05:12.719 up with use cases for AirPods and watches with camera 0:05:12.800 --> 0:05:15.320 and smart glasses with cameras because you need real good 0:05:15.320 --> 0:05:18.120 AI to use that. So the iPhone doesn't matter, it's 0:05:18.160 --> 0:05:19.320 everything that comes after it. 0:05:19.800 --> 0:05:23.200 So why can't they get this right? Is it personnel? 0:05:23.800 --> 0:05:24.840 Is it culture? 0:05:25.200 --> 0:05:25.440 Is it? 0:05:25.520 --> 0:05:26.679 What is it both? 0:05:26.800 --> 0:05:32.479 It's personnel mismanagement, it's culture. Apple's wired in a very 0:05:32.760 --> 0:05:35.279 specific way. I get into it in the story. They're 0:05:35.279 --> 0:05:38.280 wired to they sit down, they map out what they 0:05:38.279 --> 0:05:40.600 want to do, and then they make the investment to 0:05:40.640 --> 0:05:43.479 get there. AI sort of works the opposite. You don't 0:05:43.520 --> 0:05:45.840 know exactly where you're going to land. It's a little 0:05:45.839 --> 0:05:47.960 bit messier, you have to run a little bit faster, 0:05:48.200 --> 0:05:51.320 it's a little bit you know, more expensive to pull off. 0:05:51.640 --> 0:05:55.480 And so it's just a philosophical product development question, right, 0:05:55.640 --> 0:05:57.400 And so Apple has to change. 0:05:57.760 --> 0:05:59.080 AI moves so fast. 0:05:59.480 --> 0:06:01.760 You know, there's a new AI provider or a major 0:06:01.839 --> 0:06:04.320 new AI technology on a weekly basis at this point, 0:06:04.360 --> 0:06:08.039 even more frequently. But Apple's wired to release one major 0:06:08.120 --> 0:06:10.680 software upgrade every year and a smaller software upgrade in 0:06:10.680 --> 0:06:13.760 the spring. So they're going to need to move away 0:06:13.839 --> 0:06:16.960 from that idea as well if they really want to 0:06:17.040 --> 0:06:19.640 stay at pace with the rest of the technology industry. 0:06:20.000 --> 0:06:22.640 So AI and Apple, it's just so interesting. It's like 0:06:23.279 --> 0:06:25.479 putting two magnets next to each other. They're just going 0:06:25.560 --> 0:06:28.760 to push away, right, And so Apple's going to have 0:06:28.760 --> 0:06:31.479 to change at a very core level to really be 0:06:31.600 --> 0:06:35.160 able to make meaningful change and to have a meaningful 0:06:35.520 --> 0:06:37.440 improvement in their GENAI world. 0:06:37.520 --> 0:06:40.240 You know, I'm thinking about this and they're mark when 0:06:40.360 --> 0:06:42.680 when you talk about Apple and you know this better 0:06:42.680 --> 0:06:46.159 than anyone else. People a common refrain, and I don't 0:06:46.160 --> 0:06:49.040 think this is true, but it's that Apple stopped innovating 0:06:49.080 --> 0:06:51.000 after Steve Jobs. And you can go and kind of 0:06:51.040 --> 0:06:54.719 look at Apple's share price in what has happened with 0:06:54.760 --> 0:06:56.799 investors in the way that Tim Cook has led the company. 0:06:57.200 --> 0:06:59.960 The concern that I potentially would have in a situation 0:07:00.200 --> 0:07:03.159 like this as an observer, is, is this Tim Cook's 0:07:03.200 --> 0:07:04.640 legacy here missing? 0:07:04.680 --> 0:07:04.960 AI? 0:07:05.160 --> 0:07:08.839 First of all, I don't agree with the idea that 0:07:08.880 --> 0:07:11.200 Apple stopped innovating since Steve Jobs. 0:07:11.240 --> 0:07:12.520 I agree with that. I agree with you. 0:07:12.680 --> 0:07:13.960 No, no, I know you agree. 0:07:14.160 --> 0:07:15.120 If you think about it. 0:07:15.520 --> 0:07:20.679 They basically haven't innovated or done something wholly new since 0:07:20.720 --> 0:07:25.080 the iPhone. Right now, are we really expecting that? I 0:07:25.120 --> 0:07:28.400 think yes to some extent, But like you look at it, 0:07:28.560 --> 0:07:32.440 and like the iPad to the iPhone was like the 0:07:32.560 --> 0:07:35.640 vision pro to the iPhone, right, they're both different reincarnations 0:07:35.680 --> 0:07:38.040 of that same operating system. You put the Apple Watch 0:07:38.040 --> 0:07:40.160 in that category as well, So you have sort of 0:07:40.160 --> 0:07:42.120 the central product of the iPhone and you just kept 0:07:42.120 --> 0:07:44.120 building and building around it and building it up into 0:07:44.120 --> 0:07:48.160 new form factors. And they haven't really done an entirely 0:07:48.280 --> 0:07:53.040 new product experience from the ground up, and so you know, 0:07:53.080 --> 0:07:55.640 at some point they'll get there, but right now it's 0:07:55.640 --> 0:07:59.280 about new form factors. And honestly, I'm not sure Tim Cook, 0:08:00.000 --> 0:08:01.720 sure anyone would have done a better job than Tinkcook 0:08:01.800 --> 0:08:03.720 over the last fifteen years or so since. 0:08:03.720 --> 0:08:04.920 Steve Jaw has passed away. 0:08:05.240 --> 0:08:08.360 So certainly could have they done a lot better, yes, 0:08:08.400 --> 0:08:11.000 but they've also could have done much, much, much worse. 0:08:12.520 --> 0:08:14.680 You I want to ask you, does any of this 0:08:14.760 --> 0:08:16.480 matter because you write in the story being late to 0:08:16.520 --> 0:08:19.800 a potentially world changing advance isn't necessarily catastrophic for Apple, 0:08:20.600 --> 0:08:22.280 but there are risks of being late too. 0:08:22.560 --> 0:08:25.840 Well, it's not catastrophic for Apple because being late implies 0:08:25.840 --> 0:08:28.080 that they're going to get there, and so you know, 0:08:28.160 --> 0:08:30.600 as long as they're late, it's not catastrophic. But they're 0:08:30.600 --> 0:08:32.400 going to need to get there because, like I said, 0:08:32.400 --> 0:08:35.600 they're going to miss so many upcoming technological waves if 0:08:35.640 --> 0:08:38.160 they don't master this. I said this to someone I 0:08:38.160 --> 0:08:40.360 was on the radio with earlier, and they were a 0:08:40.400 --> 0:08:42.480 little surprised. But think about it for a minute. You're 0:08:42.480 --> 0:08:45.880 going to agree with me. AI is as core of 0:08:45.880 --> 0:08:49.840 a technology as the touch screen, right, that's a big 0:08:49.880 --> 0:08:53.760 bowl claim, right. So Apple is known for taking core 0:08:53.840 --> 0:08:57.200 technologies and pushing them to new form factors. And so 0:08:57.679 --> 0:08:59.760 multi touch touch screen, that's the type of touch being 0:08:59.760 --> 0:09:02.320 that to do multiple gestures at once. Let's you do 0:09:02.360 --> 0:09:03.480 the pinch and the swipe. 0:09:03.600 --> 0:09:04.680 That's called multi touch. 0:09:05.040 --> 0:09:07.280 That was a core technology that allowed them to build 0:09:07.280 --> 0:09:11.559 the iPhone and the iPad, all their macs and iPads 0:09:11.600 --> 0:09:14.200 and whatever they're releasing these days. The core technology at 0:09:14.200 --> 0:09:16.560 the heart of that are their chips, their in house 0:09:16.600 --> 0:09:20.320 process or design AI is the core technology that's going 0:09:20.360 --> 0:09:23.920 to enable robots the glasses to maybe'll look at cars 0:09:23.960 --> 0:09:25.559 again in the future. Who knows, It's not something they're 0:09:25.559 --> 0:09:27.520 looking at right now, to be clear. And so they 0:09:27.559 --> 0:09:30.120 need to master that court technology to get to the next. 0:09:29.920 --> 0:09:32.240 Era of hardware. Apple's a hardware. 0:09:31.960 --> 0:09:35.559 Company, right, and if they want to continue making the 0:09:35.600 --> 0:09:37.319 money they're making, they're going to need to do new hardware. 0:09:37.360 --> 0:09:38.440 And the way to do new hardware is to come 0:09:38.520 --> 0:09:39.680 up with new core technologies. 0:09:40.440 --> 0:09:41.760 But they hired this guy. 0:09:41.960 --> 0:09:43.000 You even printed it out. 0:09:43.040 --> 0:09:45.280 I love it, Are you kidding? 0:09:45.679 --> 0:09:48.040 But they hired this guy back in twenty eighteen. Yes, 0:09:48.440 --> 0:09:51.840 it's almost a decade, but getting close. 0:09:52.240 --> 0:09:55.480 You're right, and that's that's unbelievable. But yeah, yeah, we're 0:09:55.600 --> 0:09:57.040 close to a decade since he's been there. 0:09:57.080 --> 0:09:58.040 You're right, all right. 0:09:58.120 --> 0:10:00.960 So from someone who knows this company so well, I mean, 0:10:01.160 --> 0:10:02.960 how are you thinking about or who are you watching 0:10:03.040 --> 0:10:05.040 or what are you watching? Internally? I mean the company? 0:10:05.600 --> 0:10:06.840 Yeah, obviously listen to you. 0:10:06.880 --> 0:10:10.000 They listen to others, have conversations saying where are you Apple? 0:10:10.040 --> 0:10:11.480 When it comes to AI John. 0:10:11.320 --> 0:10:13.760 G Andrea Jgs, he goes by, I don't think he's 0:10:13.800 --> 0:10:14.480 long for Apple. 0:10:15.440 --> 0:10:16.520 I is that good. 0:10:17.760 --> 0:10:21.679 I'm not going to opine on whether it's good enough 0:10:21.720 --> 0:10:24.080 for a person to no longer be at a company, 0:10:24.120 --> 0:10:26.600 but I'll put it this way. They've already stripped him 0:10:26.600 --> 0:10:30.480 of all products related responsibility. They removed Siri from him, right, 0:10:30.559 --> 0:10:33.480 they remove robotics from him. They're going to probably remove 0:10:33.520 --> 0:10:35.520 some more things from him. They want to squish him 0:10:35.520 --> 0:10:38.520 down to a role that's entirely focused on large language 0:10:38.520 --> 0:10:42.120 model and courts AI technology research, which he's really good at. 0:10:42.320 --> 0:10:45.520 And so I mean, if they're taking away seventy five 0:10:45.559 --> 0:10:48.800 percent of your remit, you know you may decide that 0:10:49.280 --> 0:10:50.719 the writing's on the wall. It's time to get out 0:10:50.720 --> 0:10:52.360 of here. I don't think it's going to happen imminently. 0:10:52.960 --> 0:10:55.400 I don't think he wants it to happen. But I 0:10:55.440 --> 0:10:58.080 think at some point a change will be made, whether 0:10:58.440 --> 0:11:01.360 it's because he decided or Apple forces hand. But I 0:11:01.400 --> 0:11:04.439 don't expect them to fire him. Apple doesn't do that 0:11:04.640 --> 0:11:08.080 for senior executives of that level unless you really do 0:11:08.160 --> 0:11:14.040 something bad and for all intentsive purposes. JG's a great guy. 0:11:14.200 --> 0:11:17.480 He's very well liked, he's very respected in the machine 0:11:17.559 --> 0:11:18.840 learning and AI can can. 0:11:18.760 --> 0:11:20.120 He get them to where they need to be? 0:11:20.679 --> 0:11:22.880 He can be a piece of that puzzle. 0:11:23.160 --> 0:11:27.800 Don't forget Apple is constructed by a functional model. So 0:11:27.840 --> 0:11:30.160 you have design teams, you have hardwer engineering teams, you 0:11:30.200 --> 0:11:34.480 have software engineering teams that bring together the product at 0:11:34.480 --> 0:11:37.640 the end of the day. If you dilute JG to 0:11:37.720 --> 0:11:39.840 only focus on AI research, but you have other people 0:11:39.880 --> 0:11:42.920 in charge of like AI product development, I think it's 0:11:43.000 --> 0:11:46.240 possible that that's a winning formula, but clearly him running 0:11:46.280 --> 0:11:47.720 all of AI was not a good formula. 0:11:47.720 --> 0:11:50.400 We only have thirty seconds left. Could Apple acquire its 0:11:50.400 --> 0:11:53.360 way out of this? They've partnered with chat GPT Opening Eye. 0:11:53.440 --> 0:11:55.559 Well, first of all, yes, they need to acquire as 0:11:55.640 --> 0:12:00.000 much AI talent as possible, but that's also another culture 0:12:00.240 --> 0:12:03.839 issue where they have this cultural allergy to integrate large 0:12:03.840 --> 0:12:09.800 scale companies. The Beats acquisition internally disaster, the Intel Modem 0:12:09.840 --> 0:12:13.280 acquisition for a billion and twenty nineteen disaster. They just 0:12:13.320 --> 0:12:17.480 have a terrible track record of taking these humongous companies 0:12:17.480 --> 0:12:20.680 and pulling them into Apple. So you know, it's a 0:12:20.760 --> 0:12:22.880 cultural thing through and through that they need to make 0:12:22.920 --> 0:12:23.520 some shifts on. 0:12:23.760 --> 0:12:26.600 That was Mark German, Bloomberg News, Managing editor for Global 0:12:26.640 --> 0:12:27.480 Consumer Tech. 0:12:27.559 --> 0:12:30.400 You're listening to Bloomberg Business Week. Coming up the races 0:12:30.480 --> 0:12:32.000 on for rare earth minerals. 0:12:32.120 --> 0:12:34.400 We'll hear about what's already happening in the US with 0:12:34.480 --> 0:12:37.920 the CEO of MP Materials. This is Bloomberg. 0:12:42.480 --> 0:12:46.480 You're listening to the Bloomberg Business Weekdaily Podcast. Catch us 0:12:46.559 --> 0:12:50.040 live weekday afternoons from two to five pm Eastern Listen 0:12:50.040 --> 0:12:53.520 on Apple CarPlay and Android Auto with the Bloomberg Business app, 0:12:53.760 --> 0:12:55.560 or watch us live on YouTube. 0:12:56.600 --> 0:12:59.559 Well on Wednesday this past week, Russia's largest oil producer 0:12:59.600 --> 0:13:02.800 bought a giant Siberian rare earth deposit, which may become 0:13:02.800 --> 0:13:05.040 an area of cooperation with the United States. 0:13:05.520 --> 0:13:08.880 Russia, encouraged by President Trump's talk of economic deals that 0:13:08.960 --> 0:13:12.040 could follow a peace agreement with Ukraine, has been working 0:13:12.040 --> 0:13:14.680 on a list of projects and assets that officials hope 0:13:14.720 --> 0:13:15.880 might interest the US. 0:13:16.040 --> 0:13:16.199 Now. 0:13:16.200 --> 0:13:18.720 This comes as appetite grows in the US for new 0:13:18.800 --> 0:13:22.760 sources of critical minerals following China's decision to curb exports 0:13:22.760 --> 0:13:24.439 of rare earth materials. 0:13:24.800 --> 0:13:27.439 For more, we went to the experts. This next company 0:13:27.440 --> 0:13:31.040 knows all about extraction, refining, manufacturing when it comes to 0:13:31.120 --> 0:13:34.240 rare earth minerals from A to Z, and it's happening 0:13:34.320 --> 0:13:35.680 right here in the US. 0:13:35.920 --> 0:13:38.800 Jim Latinski is co founder, chairman, and CEO of the 0:13:38.840 --> 0:13:42.360 three point three billion dollar rare earth mining company MP Materials. 0:13:42.640 --> 0:13:45.120 He joined us along with Bloomberg News Metal Mining Heavy 0:13:45.160 --> 0:13:46.840 machinery reporter Jode. 0:13:47.120 --> 0:13:49.079 We started by asking about the boom in the rare 0:13:49.120 --> 0:13:50.160 earth mineral industry. 0:13:50.480 --> 0:13:53.839 It's certainly a very exciting time for us as you 0:13:54.000 --> 0:13:56.320 as you mentioned, you know, we're the only company in 0:13:56.360 --> 0:13:59.080 the world, and that includes Chinese industry, that has the 0:13:59.120 --> 0:14:02.280 expertise from the resource all the way through to the magnet. 0:14:02.840 --> 0:14:05.400 And what I stress again and again when we think 0:14:05.440 --> 0:14:08.280 about rare earths, because it's very topical. A lot of 0:14:08.320 --> 0:14:12.200 times people talk about extraction. You know, you hear Ukraine, 0:14:12.440 --> 0:14:15.160 Greenland deep sea mining, or even with the President of 0:14:15.200 --> 0:14:19.920 South Africa getting you know, a stern dress down in 0:14:19.960 --> 0:14:22.440 the Oval Office talking about how he has rare oaths too. 0:14:23.120 --> 0:14:24.760 We could have all the rarests in the world, but 0:14:24.840 --> 0:14:27.960 if you can't refine them and turn them into magnets, 0:14:28.720 --> 0:14:30.600 you don't have a solution for the issue. 0:14:30.800 --> 0:14:34.360 So, Jim, do you have that solution right now? Because 0:14:34.400 --> 0:14:38.120 we spoke with Joe a little earlier this year, he 0:14:38.240 --> 0:14:41.120 reminded us that it kind of doesn't matter if you 0:14:41.160 --> 0:14:43.320 can extract it here in the US. You got to 0:14:43.360 --> 0:14:45.560 be able to refine it. And in some cases, with 0:14:45.680 --> 0:14:48.240 some of these elements, ninety percent of that is happening 0:14:48.600 --> 0:14:51.960 in China. What exactly can you do on the refining 0:14:52.040 --> 0:14:55.400 level here in the US, so great question. 0:14:55.520 --> 0:14:57.600 There are two places in the world that you can 0:14:57.680 --> 0:15:01.800 refine at scale, the Chinese of influence predominantly China, a 0:15:01.800 --> 0:15:05.239 little bit Malaysia, and then in California in Mount Pass, California, 0:15:05.240 --> 0:15:08.200 which is our site. We actually I think some people 0:15:08.200 --> 0:15:11.200 would be surprised by this, but we refine today more 0:15:11.240 --> 0:15:14.000 than half of the concentrate that we produce. So we 0:15:14.080 --> 0:15:18.600 are refining at scale as we speak, and expanding that rapidly. 0:15:19.280 --> 0:15:21.440 So we have brought this capability back to the United 0:15:21.440 --> 0:15:24.240 States of America, and we're the second largest producer of 0:15:24.320 --> 0:15:25.800 rare materials in the world today. 0:15:26.480 --> 0:15:27.960 So one thing I just want to follow, because I 0:15:27.960 --> 0:15:30.800 think you guys know this world so well, Jim Into, 0:15:31.240 --> 0:15:33.640 But I mean when you say refine at scale, what 0:15:33.840 --> 0:15:35.600 exactly are you talking about. I'm just saying that people 0:15:35.600 --> 0:15:37.000 are listening like, okay, what does that mean? 0:15:38.040 --> 0:15:38.240 You know? 0:15:38.320 --> 0:15:42.680 A simple analogy, Carol would be think of oil and gasoline. Right, 0:15:42.720 --> 0:15:44.440 You could get oil out of the ground, but you 0:15:44.480 --> 0:15:46.200 can't put it in your car until it's in the 0:15:46.200 --> 0:15:47.440 form of gasoline. 0:15:47.480 --> 0:15:48.240 Right, you refine it. 0:15:48.680 --> 0:15:50.760 In this case, you basically take an ore out of 0:15:50.800 --> 0:15:54.560 the ground, you concentrate it so it's a highly concentrated 0:15:54.600 --> 0:15:56.760 ore with the rareth in it. But then to get 0:15:56.840 --> 0:15:59.080 the separated rare earth that you would then turn into 0:15:59.080 --> 0:16:04.080 a magnet, refine that concentrated or into an oxide, and 0:16:04.120 --> 0:16:06.560 then not to lose the audience. But you take that 0:16:06.640 --> 0:16:09.200 ox side, you turn it into a metal and alloy 0:16:09.240 --> 0:16:11.440 and then a magnet and so and just last point 0:16:11.440 --> 0:16:14.200 on that that I think is really critical. At Mountain 0:16:14.200 --> 0:16:17.400 Pass today we not only mine and refine, but we 0:16:17.480 --> 0:16:20.200 now send that or to a magnet factory that we 0:16:20.240 --> 0:16:22.920 built from scratch at Greenfield in Fort Worth, Texas. 0:16:23.080 --> 0:16:24.240 I'm actually talking. 0:16:23.920 --> 0:16:26.840 To you from our factory and it's on a street 0:16:26.880 --> 0:16:30.720 called Independence, So we called Independence, but we are making 0:16:30.800 --> 0:16:34.480 auto grade magnets here at our factory in Independence in Texas, 0:16:34.960 --> 0:16:38.680 with material that we mine and refine in California. And 0:16:38.720 --> 0:16:41.560 we're in the process of scaling up this facility. We 0:16:41.600 --> 0:16:44.800 have a foundational contract with General Motors, and so we 0:16:44.840 --> 0:16:48.400 will be providing General Motors with magnets at scale at 0:16:48.440 --> 0:16:51.120 the end of the year, with material that is mined 0:16:51.160 --> 0:16:52.600 and refined in California. 0:16:53.040 --> 0:16:54.400 Jim, I want to kind of get away from the 0:16:54.440 --> 0:16:56.320 nerdy science. I know you and I can talk about 0:16:56.320 --> 0:16:57.920 that all day, but I do want to talk about 0:16:57.920 --> 0:17:00.000 what does matter to the average person here in the USA, 0:17:00.240 --> 0:17:03.400 which is you can't do all of this on your own. 0:17:03.560 --> 0:17:06.840 You cannot. While you might have the full supply chain, 0:17:06.880 --> 0:17:10.440 you cannot be the sole supplier of critical materials, specifically 0:17:10.560 --> 0:17:12.919 rare earths and the magnets. You've said that to me 0:17:13.000 --> 0:17:14.480 for years. One of the things you said to me 0:17:14.560 --> 0:17:18.160 years ago was listen, the point is not overnight being 0:17:18.200 --> 0:17:21.600 the sole provider to yourself domestically. It is slowly pulling 0:17:21.640 --> 0:17:25.760 market share away from China. What are the kind of 0:17:25.760 --> 0:17:28.520 conversations you're having right now on this front, on the 0:17:28.560 --> 0:17:31.760 staatecraft front, and maybe you could tell us a little 0:17:31.760 --> 0:17:35.400 bit about THEMU You signed with Madden, the Saudi Aribbian 0:17:35.520 --> 0:17:38.080 mining company just last week on this front. 0:17:38.920 --> 0:17:41.439 Yeah, sure, thanks, Joe. Well, it's a great question. 0:17:41.800 --> 0:17:44.040 We've said all along our mission is to restore the 0:17:44.080 --> 0:17:46.680 full supply chain to the United States. We've obviously done 0:17:46.720 --> 0:17:49.040 that in small scale and we're scaling that up, but 0:17:49.080 --> 0:17:51.119 we really want to be part of a broader solution 0:17:51.280 --> 0:17:54.160 to eliminate the single point of failure. As you mentioned, 0:17:54.200 --> 0:17:56.880 I was in Riad last week as part of the 0:17:56.920 --> 0:18:00.359 delegation of business leaders from the United States with the 0:18:00.359 --> 0:18:03.320 President and in the presence of the President and Crown 0:18:03.400 --> 0:18:06.800 Prince MBS, we signed an MoU with Modern, which is 0:18:07.200 --> 0:18:13.000 the Saudi mining company, to explore the process of essentially 0:18:13.040 --> 0:18:18.000 building a vertically integrated rare earth magnetics business in Saudi Arabia. 0:18:18.040 --> 0:18:21.119 And so what that would mean is we would mine, refine, 0:18:21.720 --> 0:18:24.119 and make magnets in the Kingdom. And I think from 0:18:24.160 --> 0:18:27.800 from their standpoint, it's a really exciting opportunity to be 0:18:28.320 --> 0:18:31.200 to create a mid East hub that could receive feedstock 0:18:31.840 --> 0:18:34.880 from from there certainly, but also Africa and some other 0:18:34.920 --> 0:18:39.480 places and really position them well geopolitically. But more importantly, 0:18:39.520 --> 0:18:43.240 I would also say that, you know, it really solidifies 0:18:43.640 --> 0:18:46.879 what we've been saying we are and I think, you know, 0:18:46.960 --> 0:18:49.720 each step of the way are showing is that we 0:18:49.800 --> 0:18:53.320 are America's national champion. We're the only company in the 0:18:53.320 --> 0:18:58.440 world that can provide a solution in house to mine, refine, 0:18:58.480 --> 0:19:01.680 and make magnets. And so I think the vertically integrated 0:19:01.680 --> 0:19:04.400 approach that we've had is starting to be recognized by 0:19:04.400 --> 0:19:07.120 the world as you know, something pretty extraordinary that we've 0:19:07.119 --> 0:19:10.560 built inside MP And so it was nice that the 0:19:10.600 --> 0:19:13.199 President and the Crown Prince recognized that. 0:19:13.359 --> 0:19:15.120 So, yeah, you know, we'll run that. 0:19:15.200 --> 0:19:17.480 I mean, I mean it's interesting you're very much saying 0:19:17.480 --> 0:19:19.399