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Speaker 1: Hi, everyone, Welcome to the Bloomberg Business Wee Weekend Podcast.
Speaker 1: This week and video earnings, more, talk about tariffs and
Speaker 1: onshoing and the latest read on US inflation. Not a
Speaker 1: busy week, it was a holiday shortened trading week. For
Speaker 1: the latest on all of it, head over to Bloomberg
Speaker 1: dot com.
Speaker 3: With that as our backdrop, we share a bit of
Speaker 3: our Nvidia earnings reaction courtesy of our own at Ludlow
Speaker 3: after is sit down with Nvidia CEO Jensen Wong. The
Speaker 3: stock rallied after the report. More on that in just
Speaker 3: a moment.
Speaker 1: Plus this hour. Why tariffs alone are not enough to
Speaker 1: reindustrialize America, so argues the CEO of Speculative Technologies, plus
Speaker 1: the small Asian nation pois to win nuclear energies nine
Speaker 1: trillion dollar comeback, and.
Speaker 3: It's been six years since the murder of George Floyd?
Speaker 3: Have we seen any progress since that? The President of
Speaker 3: the Urban League stops by in our second hour with
Speaker 3: a reality check in interestingly enough, his thoughts on the
Speaker 3: US steal and Nippon Steele tie up all of.
Speaker 1: That to come. We begin with what was probably safe
Speaker 1: to say the top tech, the top AI earnings, market, investment,
Speaker 1: and business story of the week all rolled into one,
Speaker 1: and by that we mean earnings from the world's largest
Speaker 1: semiconductor company and video. After the company's earnings call, CEO
Speaker 1: Jensen Wong sat down with Bloomberg Technology co hosted Ludlow
Speaker 1: to talk about the results. Bloomberg News senior semiconductor networking
Speaker 1: reporter Ian King joined us with more.
Speaker 3: Ian, I just want to get a clear understanding from
Speaker 3: you about where exactly in video up for concern around China,
Speaker 3: because that was a big question moving in to their earnings,
Speaker 3: and then also with regard to the restrictions that have
Speaker 3: been placed on the company by the Trump administration with
Speaker 3: regard to the H twenty chip, Where did in video
Speaker 3: make up for this?
Speaker 4: Yeah, I know you're asking the right question here and
Speaker 4: in many respects. It was a kind of a bizarre
Speaker 4: announcement and reaction. They said, look, things in China were
Speaker 4: worse than you thought, right, and are going to continue
Speaker 4: to be worse than you thought. We're going to lose
Speaker 4: eight billion dollars of revenue from China, so clearly, well,
Speaker 4: but why your earning is that bad then? And the
Speaker 4: answer was because everything else is good?
Speaker 5: Right.
Speaker 4: Networking came back that had been a slightly weak spot
Speaker 4: a quarter ago, the new Blackwell range based products getting
Speaker 4: more supply of that. Things are going a lot better.
Speaker 4: Their demand is really going very well. And they talked
Speaker 4: about the spread of their technology into the enterprise or
Speaker 4: robotics to automotive, but that was a bit more sort
Speaker 4: of longer term. The bottom line here is that the
Speaker 4: big spenders on this technology, the Microsoft's, the Amazons, are still.
Speaker 1: Spending thank god, right for the hyperscalers Ian is it
Speaker 1: broadening out? Though? Beyond that, I think there was a
Speaker 1: lot of wondering about the Tier two companies, the sovereign
Speaker 1: play here, which provides potential, lots of potential maybe for
Speaker 1: in video going forward. Do we get anything on that?
Speaker 4: Yeah, in a word, no, we got plenty of it.
Speaker 4: But it's not broadening out. Fifty percent of their data
Speaker 4: center business was still these so called hyperscalis. I mean,
Speaker 4: they talked a lot about it broadening out and finding
Speaker 4: its way into other parts of the economy. And I
Speaker 4: guess you could say that, well, maybe enterprises, you know,
Speaker 4: the corporations, governments, service providers using more of the cloud services,
Speaker 4: that the use of AI is broadening, but in terms
Speaker 4: of the revenue makeup, that's still very solidly going to
Speaker 4: these so called hyperscalers. And I think long term investors
Speaker 4: want to see that fifty percent ratio go considerably lower
Speaker 4: to have a real assurance that everybody's putting this gear
Speaker 4: in their own data centers and their own nationalized centers
Speaker 4: before they'll become more comfortable with the idea.
Speaker 3: Yeah, I'm curious if, in your view, in Video's mote,
Speaker 3: when it comes to the technology that it has, is
Speaker 3: getting any more shallow right now, or if it's getting deeper.
Speaker 3: We did speak in our covery to some folks who
Speaker 3: reminded us that a company such as Alphabet's Google is
Speaker 3: creating their own technology that helps them rely less on
Speaker 3: a company such as in Video. How is in Video's
Speaker 3: moat right now, A.
Speaker 4: Couple of ways to look at it. The numbers would
Speaker 4: indicate that nobody's even getting close, right, it's outgrowing everybody.
Speaker 4: I mean, the revenue it gave up in China is
Speaker 4: more than the total revenue for AMD, which is purportedly
Speaker 4: its nearest competitor, right, so scale wise, I forget about it, right,
Speaker 4: But part of that interview, what Jensen said was, look, Huawei,
Speaker 4: which is the Chinese, you know, technology company that the
Speaker 4: US government has gone to great lengths to kind of
Speaker 4: lock out of the world, is fueling a chip now
Speaker 4: which is pretty much as good as our H two hundred.
Speaker 4: And you remember, up until earlier this year, H two
Speaker 4: hundred was the best thing that Nvidia had. So he
Speaker 4: was cautioning that, you know, in our absence in China,
Speaker 4: is actually fueling competition there, and they are doing a
Speaker 4: lot better than you thought they were doing well.
Speaker 1: So help me understand, because I thought when these headlines
Speaker 1: I try, I'm trying to understand they are saying that
Speaker 1: they're considering trying to design a new chip for the
Speaker 1: Chinese market. As we know, the administration has you know,
Speaker 1: kind of slowed Some are certainly the more sophisticated ships.
Speaker 1: At the same time, I'm you know, executives, from what
Speaker 1: we understand from the conference call at in VIDI are
Speaker 1: spending a lot of time reaching out to the government
Speaker 1: to like lift some of these restrictions. So help me understand,
Speaker 1: does it sell like Nvidia expects that China will reopen
Speaker 1: or I don't know. I'm just trying to understand if
Speaker 1: that is going to be you know, more of a
Speaker 1: healthier revenue stream for them going forward.
Speaker 4: Yeah, So that was a very you know that that's
Speaker 4: the right question that everybody is asking, and it was
Speaker 4: asked explicitly and implicitly in a number of ways on
Speaker 4: the conference call. What in Nvidia said was was, look, sure,
Speaker 4: we'd like to have another solution. We'd like to go
Speaker 4: back to doing what we did, which was find a
Speaker 4: way to get a chip that does not trigger these restrictions.
Speaker 4: But frankly, these restrictions are so stringent at this point,
Speaker 4: is there a point in doing that. Is there a
Speaker 4: way that we can do this technically and have a
Speaker 4: chip in China which the Chinese want and doesn't raise
Speaker 4: the hore of our government And they thought they'd done
Speaker 4: that the H twenty and they thought that perhaps the
Speaker 4: Trump administration might take a different line to the Biden administration,
Speaker 4: but they didn't. They double down on that policy, and
Speaker 4: they said, no, you can't even have the H twenty,
Speaker 4: which is, you know, a weakling, younger brother of the
Speaker 4: H two hundred we just talked about. So is there
Speaker 4: any point was part of what the question part of
Speaker 4: the answer that they gave.
Speaker 3: In your view does maybe not in your view, but
Speaker 3: in the view of some of the folks you speak
Speaker 3: to when you're doing your reporting. Does a restrictions such
Speaker 3: as this actually help push China to develop its own technology?
Speaker 4: I mean it already has done, right, I mean Jensen
Speaker 4: said that. I mean you could argue it's in his
Speaker 4: interest to create a scare that would persuade people to
Speaker 4: come to his point of view. But there's no denying
Speaker 4: that there are large scale deployments now of wildway tips.
Speaker 1: Hey, real quickly before we go out there. Republican centater
Speaker 1: Jim Banks and Democrat Elizabeth Warren are demanding answers from Jensen,
Speaker 1: Wong and Video's plans to actually open up a research
Speaker 1: facility in Shanghai, and they are of course citing national
Speaker 1: security and economic security concerns. Should we be scratching our
Speaker 1: head on that considering the backdrop between US and China
Speaker 1: right now?
Speaker 4: Yeah, I mean, I don't want to be rude about
Speaker 4: our competition, but they perhaps need to work a little
Speaker 4: bit harder on that one. This is already asked and answered.
Speaker 4: This is a new office, an office to help people
Speaker 4: to return to work. In Vidia has said publicly nothing
Speaker 4: to do with the research and design center, and so
Speaker 4: perhaps those politicians met to not read everything that they
Speaker 4: has written out there. Perhaps the want to check on
Speaker 4: the reporting.
Speaker 3: That was Bloomberg New senior Semiconductor and networking reporter Ian King.
Speaker 1: Okay, well, the street and many investors are still very
Speaker 1: bullish on Invidia. I mean, just check out what the
Speaker 1: share price did right after the earnings release. We also
Speaker 1: got the bear case from someone on the street. We're
Speaker 1: talking about Jay Goldberg, senior analyst covers semiconductors and electronics
Speaker 1: at Seaport Research Partners. He's the only analyst on the
Speaker 1: Bloomberg terminal who has a cell rating on Nvidia.
Speaker 6: My take is that in Vidia the most scrutinized company
Speaker 6: in the planet. We all have a pretty good sense
Speaker 6: of what their numbers should look like this year, what
Speaker 6: their capacity is working backwards from that, there's not a
Speaker 6: lot of room left for upside, right, There's a few
Speaker 6: things here and there, but there's not much upside possible.
Speaker 6: But on the downside, there's still a lot of risks.
Speaker 6: There are a lot of things that could go wrong.
Speaker 6: There's lots of problems with the supply chain. The fact
Speaker 6: that the keeper mentioning that Blackwell is ramping, that was
Speaker 6: in doubt for a while. There's just a lot of
Speaker 6: questions the company. It's a good company, it's well run.
Speaker 6: It's just gotten so big so quickly. I don't think
Speaker 6: they can keep this. The level of expectations beating that
Speaker 6: they've had for the last three years, that just can't
Speaker 6: keep going.
Speaker 7: And I think the headwinds are continuing to mount.
Speaker 1: In the earning statement, in video, CEO Jensen Wong saying
Speaker 1: global demand for Nvidia's AI infrastructure is incredibly strong. AI
Speaker 1: inferenced token generation has surged tenfold in just one year,
Speaker 1: and as AI agents become mainstream, the demand for AI
Speaker 1: computing will accelerate. Jay obviously sounds upbeat, but again, you know,
Speaker 1: this is where we want to have some numbers around things,
Speaker 1: the CFO saying sales of their H twenty products four
Speaker 1: point six billion for the first quarter of twenty twenty six.
Speaker 1: Is there anything that could kind of make you say, well,
Speaker 1: wait a minute, maybe I need to say it's not
Speaker 1: a sell. Maybe there is something interesting here.
Speaker 6: So I think the underlying question is what are we
Speaker 6: going to do with AI? Like there's a lot of
Speaker 6: excitement around AI, but it's still in very early stages,
Speaker 6: you know. I like to think of this as the
Speaker 6: Internet in the nineteen seventies. We knew it was something,
Speaker 6: but we didn't know what it would become. I think
Speaker 6: that's where we are with AI now, and I think
Speaker 6: it's going to take a few years for us to
Speaker 6: really as an industry figure out what the actual consumer
Speaker 6: use cases and applications are. And in that process there's
Speaker 6: going to be some fits and starts, and I just
Speaker 6: don't think we can keep this momentum going forever. I
Speaker 6: know demand is good now now, but we start to
Speaker 6: look into next year. I think people are starting to
Speaker 6: ask good questions about what is the ROI and these
Speaker 6: massive GPU investments all the hyperscalers and the enterprises have made,
Speaker 6: and I don't think we've seen those yet. I think
Speaker 6: what would sort of alter my belief is if somebody
Speaker 6: invents some incredible consumer application for AI that would radically
Speaker 6: accelerate things.
Speaker 3: That was Jay Goldberg, senior analyst on Semiconductors and Electronics
Speaker 3: at Seaport Research Partners, once again, the only analyst on
Speaker 3: the terminal who's got a celerating on Nvidia and.
Speaker 1: Sticking to it, at least sticking to it that far.
Speaker 3: Hey, he likes being a contrariant, he told us.
Speaker 1: Yeah, he had some really good thoughts kind of on
Speaker 1: AI more broadly too. All right, coming up, Why tariffs
Speaker 1: will not lead to an American manufacturing revival, so argues
Speaker 1: our next guest.
Speaker 3: This is Bloomberg.
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Speaker 1: This past weeks, i'm legal back and forth on President
Speaker 1: Trump's tariff push. The latest, as we put this week's
Speaker 1: Business Week to bed, was a federal appeals court that
Speaker 1: temporarily blocked a ruling that threatened to throw out the
Speaker 1: bulk of President Trump's tariff agenda, giving the White House
Speaker 1: hope to continue its efforts to rewrite the global trading order.
Speaker 1: Now for the latest head on over to Bloomberg dot
Speaker 1: com as it continues to be a developing story. Now,
Speaker 1: keep in mind, part of the president's justification is to
Speaker 1: get more companies to produce in the United States, invest
Speaker 1: in the United States, and grow domestic manufacturing. And to
Speaker 1: be fair, Tim, we heard from a lot of companies
Speaker 1: global companies about investing in the US or at least
Speaker 1: plans to do so and ramp up their exposure here.
Speaker 3: When you think about the history of American manufacturing, it
Speaker 3: was actually at its peak just ahead of the financial crisis.
Speaker 3: But as Dan Wang, a research fellow at Stanford University's
Speaker 3: Hoover History Lab, and Ben Reinhart, the CEO of the
Speaker 3: nonprofit in Industrial Research Labs Speculum Technologies, right in the
Speaker 3: June issue of Bloomberg BusinessWeek magazine, American industry has certainly
Speaker 3: seen better days, and it's never recovered to those levels.
Speaker 3: They argue, though, that tariffs are not the solution to
Speaker 3: revitalizing the sector. Ben, you have a tariff free menu
Speaker 3: of policies that offer a sure path to revitalize in
Speaker 3: US manufacturing. You and Dan, right before we get there,
Speaker 3: explain for everybody what an industrial research lab is.
Speaker 8: Well, so I like to describe it as we are.
Speaker 9: We're a research lab in the sense that we are
Speaker 9: working on trying to create new technologies. We're not working
Speaker 9: on products, but at the same time, we're trying to
Speaker 9: do research that is not just trying to discover the
Speaker 9: secrets of the universe, but really.
Speaker 8: Build useful technologies.
Speaker 9: So that's sort of the line, like to think that
Speaker 9: we're walking where it's like we're doing stuff that doesn't
Speaker 9: make sense yet as a company, I wouldn't go to
Speaker 9: an investor and say, you can make a bunch of money,
Speaker 9: But we are nevertheless like trying to do things that.
Speaker 8: Eventually will become useful. So thing the labs Xerox Park
Speaker 8: that sort of.
Speaker 3: Work very cool, So sort of a skunk works type
Speaker 3: of thing, exactly pre product. Okay, you and Dan thought
Speaker 3: a lot about have been thinking a lot about tariffs
Speaker 3: and the way that the President has been trying to
Speaker 3: revitalize American manufacturing. His love for tariffs is no secret.
Speaker 3: We've known about it for many, many decades, but I
Speaker 3: think perhaps it caught some investors off guard back in
Speaker 3: April when he announced the reciprocal tariffs on so called
Speaker 3: Liberation Day, you argue that there are better ways to
Speaker 3: revive manufacturing in the US. You say, we should look
Speaker 3: at what China has done.
Speaker 9: Yeah, so there are two things in particular that they've
Speaker 9: done that. So they've done many things, some of them
Speaker 9: we don't think that we should copy. But there are
Speaker 9: two in particular that I think are particularly worth looking at.
Speaker 9: One of them is inviting in for an investment. Right,
Speaker 9: so actually one of the ways that they built up
Speaker 9: their manufacturing is inviting in foreign companies and uh, you know,
Speaker 9: getting them to build factories there and sort of regardless
Speaker 9: of your position on uh stealing technology, you.
Speaker 8: Still build up a workforce that knows how to build those.
Speaker 9: Things and then can go and uh, you know, build
Speaker 9: that technology. So you can imagine inviting in Chinese companies
Speaker 9: even who have now technologies that that we don't have,
Speaker 9: and you then build up a workforce who knows how to, say,
Speaker 9: make bad batteries.
Speaker 8: So that's one.
Speaker 9: Two is like industrial zones, right, So so you're the
Speaker 9: most well known is Hinshen, but there are there are
Speaker 9: many others where they to a large extent, UH, the
Speaker 9: government took a very like hands hands off approach and
Speaker 9: just said like okay, like within this zone, you can
Speaker 9: basically do whatever you want.
Speaker 8: There's there's a lot of nuance to that.
Speaker 9: But right now we are it is extremely hard to
Speaker 9: build new UH new factories.
Speaker 3: I do want to push back a little bit on this.
Speaker 3: My one experience in China back in twenty nineteen, before
Speaker 3: the pandemic, I went to Shanghai. I know it's a
Speaker 3: completely different place now, but one thing that struck me
Speaker 3: was when the plane landed, I looked out the window
Speaker 3: and it was the thick what I thought was the
Speaker 3: thickest fog. It turned out it was pollution. My throat
Speaker 3: was sore the entire time I was there. We couldn't
Speaker 3: see out of our hotel room windows because we're on
Speaker 3: like the fifteenth floor, and the air was too clogged
Speaker 3: with pollution. As a result of some of the industrialization
Speaker 3: that we're talking about here, Do we really want that
Speaker 3: in the US?
Speaker 9: I don't think it's an either or sort of thing.
Speaker 9: Modern A lot of modern manufacturing technologies no longer produce
Speaker 9: that sort of that sort of waste, and a lot
Speaker 9: of the manufacturing that we're talking about doesn't do that,
Speaker 9: and there are many many technologies for cleaning that up.
Speaker 9: So you were seeing sort of the results of manufacturing
Speaker 9: technologies from like the fifties and sixties, and so we're saying, like, Okay,
Speaker 9: we're going to build technologies of the twenty first century,
Speaker 9: which have many few side effects.
Speaker 1: Ben, I gotta say, what's really cool is our Steve
Speaker 1: Man of our Bloomberg Intelligence team and covers the auto sector,
Speaker 1: and one of the things he has said recently to us,
Speaker 1: because as we think about tiraffs and bringing manufacturing back home,
Speaker 1: he said, one thing that China learned. I mean by
Speaker 1: doing all that manufacturing, they actually developed some very sophisticated
Speaker 1: technology that is now helping them to kind of operate
Speaker 1: on a higher plane. And whether it's developed cart like
Speaker 1: whatever have you. And I never thought about that. I
Speaker 1: guess I thought about bringing manufacturing back home. Do we
Speaker 1: really want to be making T shirts and sneakers? But
Speaker 1: that's not what it's about. It's about they've become very
Speaker 1: sophisticated with technology because of the automation and all of
Speaker 1: the manufacturing they've been doing.
Speaker 8: Oh yeah, couldn't agree. More.
Speaker 9: Manufacturing and new technology and research really go hand in hand.
Speaker 9: You can't have one without another, honestly, that's That's one
Speaker 9: of the reasons why I'm such a big proponent of
Speaker 9: manufacturing is because.
Speaker 1: We always put that together.
Speaker 5: Yeah.
Speaker 9: Yeah, it's like the best technologies, the best research comes
Speaker 9: from noticing a problem on an actual manufacturing line, right,
Speaker 9: Like going back to us being an industrial research labet,
Speaker 9: the point is to notice, oh, there's this actual, real
Speaker 9: problem in the world, and we need to do research
Speaker 9: to fix it.
Speaker 1: I think it's pretty well so is President Trump bright
Speaker 1: in terms of encouraging companies outside the United States, even
Speaker 1: American companies to start investing more here.
Speaker 8: Along that axis.
Speaker 9: Yes, I think I will not unequivocally agree with with everything.
Speaker 1: But encouraging for it. And as many have said to us,
Speaker 1: you know, there are commitments and then you'll see whether
Speaker 1: or not those commitments, which are often multi year commitments.
Speaker 1: And also you can't just build a factory overnight, right
Speaker 1: or a facility, but we'll see over time whether or
Speaker 1: not this actually happens.
Speaker 8: Yeah, I think so.
Speaker 9: I think that it would ideally be done with carrots
Speaker 9: and not sticks.
Speaker 8: But yes, I think that.
Speaker 1: The message, right, but maybe not the mode. Yeah exactly,
Speaker 1: is it at least your review?
Speaker 3: Yeah, okay, So that's one way to be thinking about
Speaker 3: this study China. I want to talk a little bit
Speaker 3: about some other solutions that you have preserving the strengths
Speaker 3: that America already has. Talk a little bit about what
Speaker 3: you mean by that.
Speaker 9: Yeah, So, you know, America has a lot of strengths
Speaker 9: that I feel like, like literally today we are uh,
Speaker 9: sort of throwing away right, Like we have this amazing
Speaker 9: ability to attract talent from all over the world.
Speaker 3: And if the universities let them in.
Speaker 9: Yeah exactly, and and the universities and in immigration right like,
Speaker 9: so historically.
Speaker 3: In all seriousness, I'm not bringing that up facetiously, I'm
Speaker 3: saying that that is at risk right now given the
Speaker 3: different rules that we've seen.
Speaker 8: Oh yeah exactly.
Speaker 9: And so so our point is like, don't like, don't
Speaker 9: stop like that's that is really and that is a
Speaker 9: unique strength of ours, right, Like, China doesn't attract global
Speaker 9: talent in the same way that we do. And again
Speaker 9: in our our university and research system. Also, so you know,
Speaker 9: you've seen the all like the cuts to NSF and
Speaker 9: NIH and NASA and the list goes on. And you know,
Speaker 9: our research ecosystem is the envy of the world, and
Speaker 9: we shouldn't, you know, keep keep that the case.
Speaker 1: What do you say to folks who say, listen, okay,
Speaker 1: you've got something like an IVY League that has an
Speaker 1: incredibly large endowment, So why does the government US government
Speaker 1: need to give them money to do R and D?
Speaker 1: So what's what's the argument to that? What you know,
Speaker 1: are you going to give it? Give it to you
Speaker 1: and maybe another organization that needs it. More like, what's
Speaker 1: the argument for continuing for federal money to go to
Speaker 1: some of these massive, well known institutions, academic institutions.
Speaker 9: Yeah, so there's a lot of nuance that we can't
Speaker 9: get into here. I think that they're like rethinking where
Speaker 9: the money, like where government R and D money goes. Yeah,
Speaker 9: definitely another conversation for another time. But just like as
Speaker 9: things stand now, like the money should go to the
Speaker 9: best researchers, Like the best research is going to come
Speaker 9: for the best research.
Speaker 8: Research is like very much a power law.
Speaker 9: Distributed thing, and for better or for worse, the best
Speaker 9: researchers are at places like Harvard, and so that would
Speaker 9: be my argument for it.
Speaker 3: Then what do you see the risks to US manufacturing
Speaker 3: or to the US economy if the United States continues
Speaker 3: with this tariff program?
Speaker 9: I mean I see just like US manufacturing, like it's
Speaker 9: not going to necessarily make manufacturing better, right, Like, I
Speaker 9: don't think it's actually going to achieve the aims. You see,
Speaker 9: because so many of the parts that people that manufacturers
Speaker 9: depend on are are coming from overseas and are being
Speaker 9: heavily tariffed, and so like you're already seeing like manufacturers
Speaker 9: of CNC machines getting completely hosed by by the tariffs,
Speaker 9: and so I just see like manufacturing as an industry
Speaker 9: being directly hurt by let alone helped.
Speaker 1: Yeah, I think it's kind of you know, who knows
Speaker 1: where this goes, right ultimately, But I think like understanding
Speaker 1: the impact that immigrants are immigration and bringing folks in
Speaker 1: from other countries, whether it's in high skilled or low
Speaker 1: skilled jobs, like has an economic impact, right, and it
Speaker 1: pays off in many different ways or tends to absolutely.
Speaker 8: I mean you just like I interact with a lot
Speaker 8: of researchers.
Speaker 9: You look at who is getting stem PhDs, who's doing
Speaker 9: researching like hard science and technology, and it's the vast
Speaker 9: majority of people are are not from the US.
Speaker 1: How do you think about all of this with something
Speaker 1: that is going to be obviously a big deal? And
Speaker 1: I'm thinking about artificial intelligence and I think about deep
Speaker 1: seek And when that news came out, we all were like, oh,
Speaker 1: you know, China is they're moving ahead?
Speaker 9: Yeah, I think the argument is across all of it. Right,
Speaker 9: you want, like, ideally it would be great for some
Speaker 9: of the people who developed deep seat to want to
Speaker 9: come to the US and do work here, right, And again,
Speaker 9: you look at who is actually working at these AI
Speaker 9: companies and there's people from all across the world, Like
Speaker 9: I have friends there there, and like, you know, people
Speaker 9: who came up with a lot of the algorithms that
Speaker 9: the US AI companies are using are not American. And
Speaker 9: so again this is just like example after example of
Speaker 9: our strength is our ability to pull in these talented people.
Speaker 3: Thirty seconds. Are you optimistic or pessimistic that some of
Speaker 3: this stuff will be adopted?
Speaker 9: I am I am pessimistic, but I am optimistic that
Speaker 9: that can change.
Speaker 1: But if we don't get this right, big deal.
Speaker 8: Big deal, meaning the.
Speaker 1: US economy, meaning the US role in the world, or.
Speaker 8: Yeah, I think all of the above.
Speaker 9: I think that you could really see us, like honestly
Speaker 9: on some kind of like some kind of decline, some
Speaker 9: kind of like becoming like ming China or and after
Speaker 9: they close themselves off.
Speaker 1: We're gonna leave it on that, though. I'm sure we'll
Speaker 1: come back to you. Definitely certainly something to get us
Speaker 1: all thinking. Ben rein Hart. He's Bloomberg Business Week contributing
Speaker 1: writer and see you have speculative technologies.
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Speaker 1: All right, So we've talked a lot about the booming
Speaker 1: demand for electricity in the United States, power and the
Speaker 1: need to seek alternative sources of energy. One solution policymakers
Speaker 1: from both sides of the aisle continue to look at
Speaker 1: I feel like the world is all looking at it.
Speaker 1: We're talking about nuclear.
Speaker 3: Bloomberg reported last year that then President Joe Biden laid
Speaker 3: out plans to triple nuclear power capacity by twenty fifty.
Speaker 5: Then a few weeks.
Speaker 3: Back, President Trumps signed an order meant to quadruple US
Speaker 3: nuclear capacity, with plans to get ten large reactors under
Speaker 3: construction by twenty thirty. Needless to say, the US is
Speaker 3: really trying to get its nuclear groove.
Speaker 1: Back, and with that a surgeon demand for nuclear reactor
Speaker 1: equipment that stands to benefit one East Asian nation and folks, Nope,
Speaker 1: it's not China, not Japan, not Russia, but rather the
Speaker 1: small country.
Speaker 3: Of South Korea. Writing all this for Bloomberg Business Week
Speaker 3: is Bloomberg News energy reporter Will Wade. He toured South
Speaker 3: Korea nuclear manufacturing plants while on assignment in Asia earlier
Speaker 3: this year. He joined me alongside Ami Grafeo.
Speaker 10: Yeah, they sent me to Tokyo for three months. It
Speaker 10: was a job swap program at Bloomberg. I highly recommended
Speaker 10: if you get the opportunity. But I also did spend
Speaker 10: a week reporting all up and down South Korea to
Speaker 10: see their nuclear industry, and that's what we wrote about
Speaker 10: for this story.
Speaker 3: Yeah, you wouldn't the team crunch the numbers so Bloomberg
Speaker 3: BusinessWeek analysis of the more than four hundred planned and
Speaker 3: proposed nuclear reactors around the world show that South Korea
Speaker 3: is positioned to win business with his as forty three
Speaker 3: percent of them. So it sets the country up you
Speaker 3: and the team right yes, to become one of the
Speaker 3: biggest exporters of atomic tech over the next decade. Why
Speaker 3: is South Korea doing this so well?
Speaker 7: So?
Speaker 10: The thing about South Korea is they built their first
Speaker 10: reactor in the seventies. They've got twenty six now. They
Speaker 10: just never stopped building them. They've been doing this for
Speaker 10: decades NonStop. I mean, you think about nuclear you probably
Speaker 10: think about the US because we invented it. We have
Speaker 10: more reactors here than anyone else.
Speaker 3: We do we don't. Yeah, well for a little bit.
Speaker 10: China is going to pass us probably by twenty thirty.
Speaker 3: Wait more operating reacts. We're currently operating reactors. Wow.
Speaker 5: Yeah.
Speaker 10: And also you might think about France. It's the most
Speaker 10: nuclear powered country on Earth. They get like seventy percent
Speaker 10: of their power from electricity. But in the US the
Speaker 10: industry pretty much just stopped after three Mile Islands seventy nine.
Speaker 10: We lost that expertise of building power plants. France, similar story.
Speaker 10: After Chernobyl there was a lot of public opposition to
Speaker 10: nuclear power or they also kind of halted the industry
Speaker 10: for a while, and it's tough to come back once
Speaker 10: you stop that. Meanwhile, Korea just kept building them and
Speaker 10: building them and building them. They only were building them
Speaker 10: in Korea, but they've got that expertise. They just never
Speaker 10: stopped the industry. And then about two thousand and nine
Speaker 10: they won this huge contract to do four reactors in
Speaker 10: the United Arab Emirates and they did it. They did
Speaker 10: it on time, they did it on budget. Meanwhile, here
Speaker 10: in the US we finally finished a new project last year.
Speaker 10: It was like massively over budget, massively late. France just
Speaker 10: opened a new reactor last year, massively late, massively over budget.
Speaker 10: They're doing one in England, massively late, massively over budget.
Speaker 10: It's a theme. And meanwhile people are like, wait, who
Speaker 10: did that project in the UAE. Who pulled that off nicely?
Speaker 10: The South Koreans, So now they're getting a lot of attention.
Speaker 10: They just got awarded a contract last year in the
Speaker 10: Czech Republic. It's not finalized yet, so that it's not
Speaker 10: a done, done deal. But when the Czechs looked around,
Speaker 10: They're all like, let's go with the Korean beas everyone
Speaker 10: thought the French were going to get the deal, but nope,
Speaker 10: they went with the Koreans because they've got this reputation
Speaker 10: for just doing it right these days.
Speaker 11: So what we're mainly talking about most of the business
Speaker 11: is manufacturing the parts for reactors in South Korea and
Speaker 11: then they export them to other countries. No, also building
Speaker 11: plants that are stationed in South Korea.
Speaker 10: That's another part of the whole thing we're talking about everything.
Speaker 10: They manufacture the parts in South Korea, they've got companies
Speaker 10: that build them wherever in Korea, in the UAE and
Speaker 10: the Czech Republic, they got their own homegrown design now,
Speaker 10: so it's really beginning to end. Everyone in Korea works together.
Speaker 10: They call it the Team Korea approach.
Speaker 3: Do you think we're going to here in the US
Speaker 3: start using Team America?
Speaker 5: Yeah?
Speaker 3: Well, I mean if they can do it under budget
Speaker 3: and on time or on budget and on time and
Speaker 3: we can't, can we outsource this? Can companies in the US?
Speaker 8: Are the Koreans to do it here?
Speaker 5: Yeah?
Speaker 3: Like how are they doing how are they doing projects
Speaker 3: for the Czech Republic. How are they doing projects for
Speaker 3: other countries?
Speaker 10: You know, like the whole export industry for nuclear is
Speaker 10: a big thing. I mean, the Americans are trying to
Speaker 10: export American technology around the world, the French, everybody wants.
Speaker 10: It's not just a company selling things. It's a diplomatic thing.
Speaker 10: It's a decades long relationship with servicing and fueling. So
Speaker 10: it really is a diplomatic relationship to get into business
Speaker 10: doing nuclear power for companies. So that's why, in fact,
Speaker 10: that's why we're starting to say less Russian and in
Speaker 10: other parts of the world they're a little reluctant to
Speaker 10: work with them, and the Korean they're kind of seems
Speaker 10: like more neutral.
Speaker 11: I feel like I have to ask the next natural
Speaker 11: question would be about tariffs and potentially the United States
Speaker 11: is pushed towards deglobalization. Does that impact the nuclear supply
Speaker 11: chain at all? And is that an issue for South Korea?
Speaker 8: Not as much.
Speaker 10: It's not so much an issue when South Korea wants
Speaker 10: to do business with anyone, but the US. I did
Speaker 10: talk to a company there that's working on a project
Speaker 10: here and they told us, yeah, it's going to make
Speaker 10: that project in Michigan more expensive. It's going to make
Speaker 10: electricity more expensive for Michigan people because the parts are
Speaker 10: coming from Korea.
Speaker 3: Emily was talking a little bit earlier about in this
Speaker 3: story the supply chain and this network effect of being
Speaker 3: able to effectively build these reactors in Korea. What allows
Speaker 3: the country to do this?
Speaker 5: Like?
Speaker 3: What are they doing right?
Speaker 10: They collaborate really well and it starts at the top.
Speaker 3: What do you attribute that to though? Is it organizational?
Speaker 3: Is it cultural? Is it based on a history of
Speaker 3: the way that companies have worked together.
Speaker 10: I think it's I think it's kind of all of that.
Speaker 10: I think there's some cultural things. I think partly it's
Speaker 10: you know, they have these the chabels, these huge conglomerates
Speaker 10: that make everything like.
Speaker 3: A Samsung for example, Samsung LG.
Speaker 10: Hyundai actually is the company that I've talked to a
Speaker 10: couple of different units of Hyundai here, So they're used
Speaker 10: to sort of all being the same corporate umbrella, even
Speaker 10: if they're different companies, and there's not that many of them,
Speaker 10: so they've been working together for decades. I think it
Speaker 10: may be helped that it's a smaller country, it's easier
Speaker 10: to manage things.
Speaker 1: The United States is quite large. It just did a
Speaker 1: transatlantic flight.
Speaker 8: It was long.
Speaker 11: You were actually in South Korea. How close did you
Speaker 11: get to the manufacturing plant?
Speaker 1: Did you go to go inside? Yeah?
Speaker 5: We went.
Speaker 3: I went, you're not glowing, so that's a good sign.
Speaker 10: Well, so I went to this factory in Changwan. It's
Speaker 10: this all the way down on the south that's near Busan,
Speaker 10: And we went to this factory. It's operated by a
Speaker 10: company called Douson, and they've got this thing is called
Speaker 10: a forging press where they take red hot chunks of
Speaker 10: glowing steel and just squid pound them into shape. And
Speaker 10: they use this to make the big reactor vessels for
Speaker 10: nuclear power plants, but they do everything else. I mean
Speaker 10: when I was there, they were making the propeller shaft
Speaker 10: for a cargo ship. And it must have been like
Speaker 10: what like four feet wide and like maybe fifty meters long,
Speaker 10: and it was red hot, glowing steel like a thousand degrees.
Speaker 10: I could feel the heat from fifty feet away in
Speaker 10: another room through an observation glass.
Speaker 5: Wow.
Speaker 10: And they're just pressing on it with like hundreds of
Speaker 10: thousands of tons of pressure.
Speaker 3: Well, I mentioned that you were in Japan for the
Speaker 3: last three months. Yeah, let's talk a little bit about that.
Speaker 3: In the state of nuclear power in Japan. I think
Speaker 3: people at least you know, of a certain age might
Speaker 3: think of nuclear power in Japan and think immediately of Fukushima,
Speaker 3: But what is the state of nuclear power nuclear energy
Speaker 3: in the country.
Speaker 10: So the story in like at starting after like twenty twelve,
Speaker 10: like right after the twenty eleven Fukushima disaster, was very simple,
Speaker 10: no nuclear power. They used to get about a third
Speaker 10: of their electricity from nuclear and after that disaster they
Speaker 10: shut all of it down, which was really kind of
Speaker 10: a problem for their electricity system. They've gradually been restarting them.
Speaker 10: I think they have about like fourteen up and running now.
Speaker 10: There's they're working toward restart some of the others. But
Speaker 10: as you pointed out, there there's strong public opposition. It's
Speaker 10: and you know, here in America you get a lot
Speaker 10: of public opposition and nuclear power from some environmental activist groups.
Speaker 10: It's much stronger in Japan. And you know, they're the
Speaker 10: ones that'll say, hey, we've got a real reason to
Speaker 10: be concerned about this. It's not just theoretical in Japan,
Speaker 10: so people feel it very strongly. But you know what
Speaker 10: I met with some college kids there and they were
Speaker 10: like super pro nuclear kids in Japan. They called themselves
Speaker 10: like nuclear youth advocates. I'm still working on a story
Speaker 10: about these guys, but they were just really enthusiastic, and
Speaker 10: I'm like, you know, not everyone in the country feels
Speaker 10: this way.
Speaker 3: And they're like, oh, we know, we know. Are these
Speaker 3: kids like maybe they're twenty twenty one years old, so
Speaker 3: back in twenty eleven.
Speaker 8: Right, they were like in grade school?
Speaker 5: Yeah, remember it?
Speaker 3: But okay, that's interesting.
Speaker 10: Yeah, they were like, yeah, I remember when my dad
Speaker 10: put on the TV when that happened, he said, this
Speaker 10: is important. I'm like, okay, but I wanted to watch
Speaker 10: mi anime.
Speaker 11: And then like, culturally in South Korea, did you feel
Speaker 11: like there was a stigma or there was Generally it
Speaker 11: was there was more acceptance, So.
Speaker 8: Yeah, absolutely, energy.
Speaker 10: Yeah, I mean Korea still gets I think this is
Speaker 10: like sixty percent of its power from fossil fuels, and
Speaker 10: Japan it's very heavily fossil fuel powered as well, so
Speaker 10: they're really conscious that if they need to get carbon
Speaker 10: emissions out of their power system, nuclear is one of
Speaker 10: their few options.
Speaker 3: I look, will we're glad you're back. Sounds like you
Speaker 3: had an amazing trip. You didn't bring me any goodies,
Speaker 3: but that's okay. Sorry, that's okay next time. Next time,
Speaker 3: you're gone for three Minds product. The rest of my
Speaker 3: teammates them least he brought goodies, but they've been eating.
Speaker 3: Check out his story. He is Today's big take. It's
Speaker 3: on the Bloomberg Terminal. It's written along with Hesu Lee.
Speaker 3: It's all about the winner of nuclear's nine trillion dollar comeback.
Speaker 3: It'll be South Korea. It's a Bloomberg exclusive. This Bloomberg
Speaker 3: BusinessWeek analysis. It's pretty awesome.
Speaker 5: Check it out.
Speaker 3: It's on the terminal and at Bloomberg dot Com.
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: Lenny Ahead in our second hour of the weekend edition
Speaker 1: of Bloomberg Business Week, including the CEO of Omaha steaks
Speaker 1: on the business of beef and serving up a sizzling
Speaker 1: romance novel to sell even.
Speaker 3: More, Plus how about wine with that steak Our Bloomberg
Speaker 3: Pursuits team on building an all American wine cellar in
Speaker 3: the time of tariffs.
Speaker 1: Also the movie with a fresh look at an age
Speaker 1: old conundrum, is it better to be with someone for
Speaker 1: love for money? It's all in Bloomberg Pursuit. First up
Speaker 1: this hour, though, we wanted to think about kind of
Speaker 1: where we are in time and how it's been five
Speaker 1: years since the killing of George Floyd that sparked widespread
Speaker 1: attention to systemic racism in the United States.
Speaker 3: At first, many companies publicly pledged support for racial justice,
Speaker 3: but since then we've seen a pendulum swing on the
Speaker 3: way that companies talked publicly about this stuff. Mark Morial
Speaker 3: as president and CEO of the National Urban League, Mark
Speaker 3: joined us to discuss corporate racial equity, but first he
Speaker 3: weighed in on the tie up between US Steel and
Speaker 3: Nippon Steele.
Speaker 5: We took a position against this transaction, and I think
Speaker 5: people should be reminded that both Biden and Trump during
Speaker 5: the election cycle oppose what, in his sent in effect,
Speaker 5: was an acquisition by Nippon Steel of US Steel. Cleveland
Speaker 5: Cliffs wanted to buy US Steel right, both Biden and
Speaker 5: Trump opposed it. On the theory that it would lead
Speaker 5: to the loss of American jobs, the fear being that
Speaker 5: Nippon would close American plans transfer production to Japan. So
Speaker 5: now with this iteration, you asked the right question, is
Speaker 5: this a partnership or is that a public relations move?
Speaker 5: Is it still the original deal, which really was an acquisition,
Speaker 5: and what protections are going to be there. We took
Speaker 5: a position from a job's perspective.
Speaker 1: So you were concerned about some of the black communities
Speaker 1: there right economic.
Speaker 5: Places and steal and we're in a conversation where we're
Speaker 5: talking about manufacturing. So the real impact question is will
Speaker 5: this protect American steal jobs or will it potentially lead
Speaker 5: to the transfer production to Japan.
Speaker 3: Well, I will say the President said that it would
Speaker 3: create at least seventy thousand jobs and AD fourteen billion
Speaker 3: to the US economy. But he has a hard time
Speaker 3: imagining that after investing fourteen billion dollars, then Nippon Steele
Speaker 3: without an additional fourteen billion dollars to the US economy.
Speaker 5: And the question is are there any guarantees? And I
Speaker 5: think we all need to watch for the details understand
Speaker 5: the specific because those jobs and those communities have been
Speaker 5: heavily dependent on those types of.
Speaker 3: Well, justic contextualize the seventy thousand not just a massive
Speaker 3: number of jobs, especially for the steel industry. US Steel
Speaker 3: only has twenty two thousand employees right now.
Speaker 5: Yeah, and I hope it's not a lot of hype,
Speaker 5: you know, And I think that we owe it to
Speaker 5: look at the transaction and see what impacted or what
Speaker 5: guarantees are going to be there for American workers, and
Speaker 5: what are the guarantees that five years from now, there's
Speaker 5: not a decision made, a reversal and the jobs move
Speaker 5: to Japan or they move abroad for some reason. So
Speaker 5: that's really what if you will, handcuffs and guardrails are
Speaker 5: going to be placed on this transaction till we see
Speaker 5: what they file, until we see what they promise, It's
Speaker 5: hard to know. But it's interesting that the President opposed
Speaker 5: it as a candidate. Biden opposed it as a candidate.
Speaker 5: You need to pose it last year, and there was
Speaker 5: an American suitor for US Steel Cleveland, right, So there's
Speaker 5: a lot to unpack here, and I just you know,
Speaker 5: we work hard on the issue of jobs, and we're
Speaker 5: very focused on transactions, uh, to determine whether it's going
Speaker 5: to have a positive or negative impact on the communities
Speaker 5: we serve. Well, look, yeah, you switch, George Floyd, Wait.
Speaker 3: I want I do want to in a minute.
Speaker 1: I want to stay on.
Speaker 3: On economic development and stay of jobs. Because as somebody
Speaker 3: who's been involved in government for so long, there of
Speaker 3: New Orleans serving in the Louisiana State Senate, you you
Speaker 3: understand this stuff when it comes to economic development. Take
Speaker 3: a big picture approach to what you view as the
Speaker 3: economic policy of the Trump administration and its effects on
Speaker 3: American jobs. Because the President and the administration would say, hey,
Speaker 3: we are imposing tariffs to protect US jobs.
Speaker 5: I think a tariff approach without an industrial policy which
Speaker 5: says what specific industries are you trying to grow? It
Speaker 5: appears to be a scattershot approach designed to leverage some
Speaker 5: deals without any specificity. So we're talking about iPhones, automobiles,
Speaker 5: blue jeans, toys, what specific so I can buy. The
Speaker 5: selective use of tariffs, the selective use of trying to
Speaker 5: rebuild an American industry. But you need an industrial or
Speaker 5: economic development policy that matches the tariffs in order to
Speaker 5: give certainty to American business and consumers.
Speaker 1: So I am curious, you know, Mark, when the president
Speaker 1: putting pressure on a company like Apple to kind of
Speaker 1: increase its investment here. And we've talked a lot with
Speaker 1: our reporters who cover it and our team that covers it,
Speaker 1: that they say, you know, it's going to be a
Speaker 1: while before we can do it. That maybe there isn't
Speaker 1: the skill of the workers, the type of automation, so
Speaker 1: on and so forth. But is that the kind of
Speaker 1: thing that you think would create jobs that would actually
Speaker 1: benefit black communities, middle class communities which we have just
Speaker 1: kind of carved out in a big way.
Speaker 5: Look, we the outsourcing of jobs that took place in
Speaker 5: the eighties and the nineties to really Reagan era free
Speaker 5: trade policies, which will continued in the Bush and the
Speaker 5: Clinton era.
Speaker 1: The Republicans Democrats.
Speaker 5: Like communities, right, They did damage community. The benefit was
Speaker 5: cheaper goods on the consumer side, so there were some benefits,
Speaker 5: but it hurt. The issue today is what jobs are
Speaker 5: the jobs of the future. Is it rebuilding automobile component parts.
Speaker 5: I would say that what people have not paid attention
Speaker 5: to is the disinvestment through the NIH cuts in biomedical
Speaker 5: research and technology, where we do have a bit of
Speaker 5: a competitive advantage where we do have, we ought to
Speaker 5: be pouring more investments into that.
Speaker 1: What's the impact of that from your view, Well, the.
Speaker 5: Impact of that is long term damaging because what happens
Speaker 5: is the scientists and the investments go abroad, and once
Speaker 5: they go abroad, just like manufacturing, you can't get them back.
Speaker 5: So our economic policy ought to be focused on where
Speaker 5: do we have a bit of some tailwinds and how
Speaker 5: can we grow it? But then on manufacturing. I agree
Speaker 5: with the notion that we are to try to rebuild manufacturing,
Speaker 5: but we need to be more specific about it. If
Speaker 5: someone said I want to bring jobs to Detroit, Newark, Gary,
Speaker 5: New Orleans, Atlanta, I'm all for it, but I need
Speaker 5: some specificity as to how this policy is going to
Speaker 5: generate that type of response.
Speaker 1: Are you getting time at the White House?
Speaker 5: We've not been in any direct discussions with anyone in
Speaker 5: the administration, but as always, if it's about the benefit
Speaker 5: for the community, I'm open to discussions with anyone.
Speaker 3: Is that different than other administrations? Do you typically have
Speaker 3: a direct line to the White House?
Speaker 5: You know in the Clinton, the Bush, the Obama administrations,
Speaker 5: of Biden administrations, I think there was a much more candid,
Speaker 5: open working relationship with civil rights leaders, with African American leaders,
Speaker 5: and they were frank and candid, and they were not performative.
Speaker 5: You see I meetings. Many of these meetings took place
Speaker 5: without cameras, without press, without performance, without posturing. So I
Speaker 5: mean my view of meetings is I want to talk business.
Speaker 5: I don't want to play games.
Speaker 3: What's interesting is that the communities that you represent at
Speaker 3: the National Urban League in the last election move further
Speaker 3: to the right for the most part. And I don't
Speaker 3: want to paint every.
Speaker 5: Push and many didn't vote, and there was a cynicism
Speaker 5: about whether government can make a difference.
Speaker 3: And why was that.
Speaker 5: I think that people's objective economic conditions, the difficulty of COVID,
Speaker 5: the depression of wages, inflation, a whole host of factors,
Speaker 5: and the idea that politicians come and go and make
Speaker 5: promises and never keep them.
Speaker 3: So how does the Democratic Party get these voters back.
Speaker 5: It's going to be up to a specific candidate. I
Speaker 5: think people will rally around the right person. I don't
Speaker 5: know if it's so much about it a party. I
Speaker 5: think Trump right, Trump remade quote unquote the Republican Party.
Speaker 5: I think the Democratic Party is the Democratic Coalition is
Speaker 5: poised for a makeover. It's poised for a group of
Speaker 5: people who are gonna come and talk about how they're
Speaker 5: going to change and disrupt. But Bill a vision for
Speaker 5: the future.
Speaker 3: So who are some names that I would on your mind?
Speaker 5: Wouldn't I wouldn't offer any names now because right now
Speaker 5: the horses have not gotten out of the stable. So
Speaker 5: we got to see him on the practice track.
Speaker 1: Was Kamala Harris the wrong candidate at the wrong time unless.
Speaker 5: She was a good candidate. She was given a tough
Speaker 5: a tough lane to run in sixty to ninety days
Speaker 5: to get known amongst American people. Remember, she came within
Speaker 5: one point of defeating someone who was on their third
Speaker 5: run for president. So we got to remember there was
Speaker 5: no landslide, there was no mandate, but there was a
Speaker 5: victory for Donald Trump.
Speaker 1: So I would love to say, speaking of victories, that
Speaker 1: we've made a lot of progress in the last five years.
Speaker 1: Considering the tragic killing of George Floyd and I think
Speaker 1: you know it was COVID. We were all home. We
Speaker 1: had a lot of conversations, really frank and real with
Speaker 1: CEOs and leaders about the importance and the racism that
Speaker 1: still is in this country, and blacks being targeted around
Speaker 1: the country, and just the injustices, and I feel like
Speaker 1: we've slip slided back. Tell me how you.
Speaker 5: See five steps forward and three steps back on two
Speaker 5: issues we cover in this report. I encourage people to
Speaker 5: go to us a report out yes on policing. Many communities,
Speaker 5: many police departments, many cities supported by the Civil Rights
Speaker 5: Division of the Justice Department, made strides. We didn't pass
Speaker 5: a comprehensive federal law that George Floyd Law did not pass,
Speaker 5: but a hundred and eighty police officers were in fact convicted.
Speaker 5: Dozens of police departments ended up in agreements to reform themselves.
Speaker 5: A number of states, like Maryland, passed statewide police reform measures.
Speaker 5: That was good. Now what's the obstacle. Now the current
Speaker 5: administration has walked in and said we're freezing all civil
Speaker 5: rights investigations, regardless of merit, regardless of the basis of
Speaker 5: those That puts headwinds into this effort to continue to
Speaker 5: do reform. On the other hand, there were these incredible
Speaker 5: commitments by many great American institutions, businesses, philanthropies, etc. And
Speaker 5: now some are walking them back. And they're three categories.
Speaker 5: Those that have just abandoned them, some who've held firm
Speaker 5: and those that are making cosmetic changes because they know
Speaker 5: they need to be committed, but they're under the pressure
Speaker 5: of the administration which is using its regulatory power to
Speaker 5: force their hand.
Speaker 3: Do you think which one do you think happened more.
Speaker 3: Do you think these are just cosmetic changes and they're
Speaker 3: committed to these so called DEI policies, or do you
Speaker 3: think they are actually making fundamental changes in moving away
Speaker 3: from them?
Speaker 5: And American business to demonstrate a sense of courage. And
Speaker 5: the reason why that courage is important is to recognize
Speaker 5: the marketplace for both employees and customers of the future,
Speaker 5: which is becoming far more diverse, black, brown Asian women.
Speaker 5: That's the workplace of the future. But people today, if
Speaker 5: you look at DEE and I Diversity Equity and Inclusion
Speaker 5: Equal Opportunity, you poll it. The lowest polling numbers I've
Speaker 5: seen in any any publicly available poll is fifty percent. See,
Speaker 5: the American people are not on the side of the
Speaker 5: loud anti voices. American business knows deep in their soul,
Speaker 5: they know and they understand, but they're they're being I
Speaker 5: think pressured, they're being intimidated, and I think that's just
Speaker 5: the reality of today.
Speaker 1: We're squeeze for time twenty five seconds. Are you surprised
Speaker 1: by the fear of corporate leaders to speak out? And
Speaker 1: I apologize that it needs to be quick.
Speaker 5: I am. But their exceptions Jamie Diamond, Roger Goodell, two
Speaker 5: people with whom I've spoken, and two people who've made
Speaker 5: important statements, And I think others should do the same thing.
Speaker 3: Are you done with public service?
Speaker 5: Never done with public service? So are you?
Speaker 3: Is there a chance you would run for something else?
Speaker 5: There's always a chance. But I love my job. I
Speaker 5: love what I do, But there's always a chance.
Speaker 1: Like what Stay tuned, all right, TBD, We'll come back
Speaker 1: and tell us you can break it. Mark, thank you
Speaker 1: so much. He's, of course, president, chief executive officer of
Speaker 1: the National Urban League, joining us in studio. Mark, thank you.
Speaker 2: This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2: New York station, Just Say Alexa played Bloomberg eleven thirty
Speaker 2: one week ago.
Speaker 1: Last weekend, it was Memorial Day weekend, considered to be
Speaker 1: the unofficial start official start.
Speaker 3: I guess unofficial because June twenty first.
Speaker 1: Okay, all right, all right, technical technical anyway, unofficial start
Speaker 1: to summer in the United States. With that, perhaps you
Speaker 1: were one of the millions of Americans who took that
Speaker 1: long weekend to celebrate with some outdoor activities, beach trips,
Speaker 1: or spend some time grilling up some steaks. Didn't you
Speaker 1: do that?
Speaker 12: Tim?
Speaker 3: I didn't. We didn't grill steaks. I was with a
Speaker 3: group of people who don't eat mammals. Interestingly enough, that's there,
Speaker 3: that's the way they think about it.
Speaker 1: Okay, but Tim and I both like stakes.
Speaker 3: So we had chicken. We had chicken. We had turkey burgers.
Speaker 3: There were a few impossible burgers for the actual vegetarians.
Speaker 3: I had a lot of chicken and turkey burgers. Though
Speaker 3: Nate Rampy hopes you were grilling in Omaha steak or several.
Speaker 3: He's president and CEO of the privately held company more
Speaker 3: than one hundred years old. The company is Nate joins
Speaker 3: Us from Omaha. Nate good to have you with us.
Speaker 3: It's good to have you on the program. We've been
Speaker 3: excited to speak to you about a range of topics.
Speaker 3: I want to start just with the fact that you're
Speaker 3: privately held here more than a century old. We don't
Speaker 3: have a lot of numbers to go on. We are Bloomberg.
Speaker 3: We need some context here. What can you tell us
Speaker 3: about the business sales, what direction they've been going in.
Speaker 3: What can you share with us?
Speaker 7: You bet? First off, in Omaha, we grill no matter
Speaker 7: the weather.
Speaker 3: Okay, it's good to know.
Speaker 12: Get that right out right out of the shoots. So
Speaker 12: we are one hundred and seven Almos, one hundred and
Speaker 12: eight years old, born and raised in Omaha, Nebraska. We're
Speaker 12: pushing upwards past six hundred million in top line revenue,
Speaker 12: about two thousand employees, and we spike up to about
Speaker 12: six thousand during the holidays when when we provide America
Speaker 12: you know the best gift, which is Omaha steaks file Mignon.
Speaker 3: So where is the beef coming from? Because on your
Speaker 3: website I noticed you do have a section sort of
Speaker 3: the higher end stuff that is imported from Japan. It
Speaker 3: seems like other than that, is it all from the
Speaker 3: United States?
Speaker 12: It's actually wago, is not Our wagon is not important
Speaker 12: from Japan.
Speaker 7: Actually we actually.
Speaker 3: Call it wangus oh okay.
Speaker 7: Which is largely in the United States.
Speaker 12: Most of the wagu consumed is a is a is
Speaker 12: a sort of a hybrid between an angus and the wagon.
Speaker 3: So forgive me, is it still considered wagu if it's
Speaker 3: not from Japan?
Speaker 12: Oh yeah, yeah, for sure, just because of the of
Speaker 12: the breed. Uh you sort of enterbred that with the
Speaker 12: with the angus to get a more.
Speaker 7: Americanized version of that.
Speaker 12: But our beef comes from the heartland. I mean, I'm
Speaker 12: talking to you from Omaha, Nebraska. This is beef country.
Speaker 12: And you know, on the top of mind lately, you know,
Speaker 12: has been the topics of terrorists. And when you source
Speaker 12: all of your beef from the US right in the
Speaker 12: center of the country, you know you can have a
Speaker 12: competitive advantage in protecting your customers from the impacts of
Speaker 12: things like tearifs and Omaha steaks. Given the fact that
Speaker 12: we're one hundred years old, is super vertically integrated. So
Speaker 12: from the sourcing of the raw material, through manufacturing, packaging,
Speaker 12: marketing it all the way through fulfillment and logistics. You know,
Speaker 12: we control that at every step in the in the process,
Speaker 12: and that gives us a couple benefits. One is that
Speaker 12: customer experience can be very controlled and sure that we
Speaker 12: have an absolute fabulous experience from not just from first bite,
Speaker 12: but all the way backing up to you know, the
Speaker 12: shopping experience, the marketing experience, exploring what products you might
Speaker 12: want to enjoy, from Omaha steaks, all the way through
Speaker 12: to when that cooler shows up perfectly frozen with ice
Speaker 12: still in the package.
Speaker 1: All right, Nan, I got to ask you because I
Speaker 1: feel like every time we go out for dinner you
Speaker 1: want to buy I'm using steak broadly, but there's obviously
Speaker 1: different kinds of cuts and so on and so forth.
Speaker 1: But it's expensive. You're talking thirty five, forty, fifty sixty.
Speaker 1: Why is it so expensive? And I was just looking,
Speaker 1: you know, beef prices have gone up again this year,
Speaker 1: are there up? So what's going on in the beef market.
Speaker 12: Yeah, it's it's largely it's it's pretty simple, Carol. It's
Speaker 12: kind of supply and demand. So consumer demand has really
Speaker 12: kind of stayed strong despite you know, all what's happening
Speaker 12: around us in the macro environment.
Speaker 7: Macroeconomic environment.
Speaker 12: Cattle supply has dropped, in fact, will be about four
Speaker 12: million head lower in this year versus twenty twenty two,
Speaker 12: and thus, you know, price is sort of increasing. So
Speaker 12: you know, all those factors are really what's behind the
Speaker 12: price of meat increasing because you know, the cost of
Speaker 12: food has been increasing for quite some time. It's not
Speaker 12: just you know, kind of this you know, very recent
Speaker 12: event and going out to dinner when you told me,
Speaker 12: you know, you go out for a steak. You know,
Speaker 12: I think if you think back to twenty twenty, you know,
Speaker 12: one of the things that we learned as a country
Speaker 12: is how great it was to have dinner at home
Speaker 12: with family, and that you know, when you do that,
Speaker 12: that doesn't mean that the experience or.
Speaker 7: The quality has to drop, right, And.
Speaker 12: What I'm arguing is that I can bring the quality
Speaker 12: and the guidance and the experience of the best steakhouse
Speaker 12: in America to your kitchen and you can do it
Speaker 12: without waiting in line, without driving, without tips, you know,
Speaker 12: without you know, maybe variable service, and you can be
Speaker 12: the hero in the kitchen as opposed to the steak.
Speaker 3: Rate, as long as you don't overcook it, which has
Speaker 3: happened well, do you know it depends.
Speaker 1: I mean, you know we say it a lotze totally.
Speaker 3: Well, you know, to Carol's point, beef prices recently, just
Speaker 3: in the last few days, reached a record high in April.
Speaker 3: How much of your price has gone up over the
Speaker 3: last year.
Speaker 12: Actually, we have held our price as static for about
Speaker 12: three years.
Speaker 5: Uh.
Speaker 12: And again we're doing that because we're able to control
Speaker 12: And I can't really overstate how important it is to
Speaker 12: control the controllables. I mean, you know, when you're operating
Speaker 12: a large business, things that come at you from the
Speaker 12: sides that cause impact to costs or ultimately what drive
Speaker 12: consumer price up. So we've been able to really control
Speaker 12: our controllables and offer that benefit to our customers.
Speaker 7: Now there are.
Speaker 12: Really, there really are a number of things that America
Speaker 12: can do to manage their costs of protein. It's like
Speaker 12: anything else in economics, you know, there's a trade down opportunity.
Speaker 7: So if you were maybe used.
Speaker 12: To having a Tuesday night flame, we've seen some Americans go.
Speaker 7: To the Top Surloin. I happen to love the Top Surloin.
Speaker 12: I think it's an underappreciated, maybe underloved steak, but it's
Speaker 12: a Tuesday night steak, it's beefy, it's it's you know,
Speaker 12: it's very healthy, more lean, and so there is a
Speaker 12: trade down happening there because protein really is an important
Speaker 12: component to our diet and is a key cornerstone in
Speaker 12: maintaining a healthy diet.
Speaker 7: And so trading down is one of them.
Speaker 12: Like I said, eating at home is another, you know,
Speaker 12: investing in products that you know have that high quality.
Speaker 7: But still that experience at home can be a great one.
Speaker 1: All right, First of all, quick, go ahead, I'd just say,
Speaker 1: full disclosure. We cook a lot at home, so it's
Speaker 1: not like I'm meeting out all the time. I'm just
Speaker 1: kind of blown away by the costs on menus. But
Speaker 1: the same thing even when we you know, pie, you know,
Speaker 1: it's just kind of expensive. Why are herds down? You said,
Speaker 1: four herds in the US are down by four million heads,
Speaker 1: lower than twenty twenty two.
Speaker 8: Why is that?
Speaker 7: Is there not the less number of factors?
Speaker 12: Yeah, number of factors, Carol, things like drought, you know,
Speaker 12: the environment which the cattle are being raised certainly affects
Speaker 12: the size of the herd. But another phenomenon that's really
Speaker 12: interesting that I think you'll also find interesting is something
Speaker 12: called heifer retention. So when demand for beef is high,
Speaker 12: there is motivation to harvest the female animal as opposed
Speaker 12: to leverage that animal to generate more herd. And over
Speaker 12: the last number of years that has been happening. And
Speaker 12: so as heifer retention drops, the number of calves entering
Speaker 12: the market or entering the environment drops as well, So
Speaker 12: the build of the herd doesn't really happen over time.
Speaker 12: And we've been dealing with that reduction over the last
Speaker 12: number of years, which is a contributing factor to supply.
Speaker 7: Nay price Nate.
Speaker 3: You also, it's not just it's known for stakes, but
Speaker 3: you guys also do chicken and pork, seafood, You do desserts, wine, gifts.
Speaker 3: Some of your seafood is imported from outside of the US. Correct,
Speaker 3: it is, yes, So how have you been you know,
Speaker 3: like Argentinian shrimp for example, how have you been able
Speaker 3: to control prices? There? You say, controlling the controllable is
Speaker 3: what's important. But how much are you getting hit with
Speaker 3: tariffs on that stuff?
Speaker 7: There's a little bit of that there. I tell you.
Speaker 12: One of the benefits you get from being a multi
Speaker 12: decade business is we have multi decade supplier relationships, and
Speaker 12: so you know, we can have conversations with them, and
Speaker 12: we can talk frankly about the fact that you know
Speaker 12: the Omaha Steaks and you know inter supplier name here.
Speaker 12: This is about the long term. We've been sourcing from
Speaker 12: you for twenty to thirty years. Help us overcome this blip,
Speaker 12: and a lot of times we find that our suppliers
Speaker 12: will step up and help us keep those costs in check. Yeah,
Speaker 12: and largely, I think you know we've we've done a
Speaker 12: pretty good job. My team has done a fabulous job
Speaker 12: of anticipating the impact terror.
Speaker 1: All Right, while we have you, can we talk about
Speaker 1: Nick and Kate or should I call it Nate?
Speaker 5: Sure?
Speaker 1: Tell us about Certified Tender. It was a romance novel.
Speaker 1: I believe it started as an April Fools Joe.
Speaker 3: What are you talking about?
Speaker 1: I have to tell you we were kind of reading
Speaker 1: there was a great article that kind of put it
Speaker 1: all together. We were reading some of it out loud
Speaker 1: in the newsroom. This seems like it was an idea
Speaker 1: that really took off. Just got about a minute or
Speaker 1: so left here. How successful did this turn out to
Speaker 1: be and how did it come about?
Speaker 7: It was so fun. We've done April Fool's.
Speaker 12: Events over the last number of years, but we had
Speaker 12: a super talented copywriter internally that agreed to take on
Speaker 12: writing certified tender. So it was literally written by a
Speaker 12: copywriter here at Omaha Steaks named Michael. And I don't know,
Speaker 12: if you have the opportunity to read it, you totally should.
Speaker 12: It's got some fun easter eggs in the book that
Speaker 12: talk about the history of Omaha Steak. It's you know,
Speaker 12: some of the names and some of the dates and
Speaker 12: things correlate with the history of the company, and it
Speaker 12: just blew up. I mean, the book looks great, you know,
Speaker 12: the content and the creative it's just a neat, fun
Speaker 12: way to engage with our customers.
Speaker 7: And I think, you know, it sort of speaks to.
Speaker 12: The culture and the innovation and the desire to have
Speaker 12: Funma Stake.
Speaker 1: How that meet Cute Collection because this was a promotional
Speaker 1: material for Meat Eat Meat Cute Collection ninety nine Bucks
Speaker 1: Date Night themed box filet Mignon fries cab Cabernet Sauvignon
Speaker 1: twenty seconds left here. How successful are those?
Speaker 7: Hugely successful?
Speaker 12: I mean, it's who doesn't want to have a date night.
Speaker 12: I mean, it's the perfect date night. You'll have some wine,
Speaker 12: have some great Omaha steaks. The filet that we provide
Speaker 12: our customers is unmatched. It's literally certified tender by the USTA.
Speaker 12: So it's about the most tender steak you can buy.
Speaker 7: And then you curl up with a good book.
Speaker 12: And that book just happens to be by the company
Speaker 12: that provided.
Speaker 5: The station in the wine.
Speaker 1: All right, come back, come back, We got to continue
Speaker 1: this conversation. Nate Rempy, President CE of Omaha Steaks.
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 Apple CarPlay and Android Auto with the Bloomberg Business app,
Speaker 2: or watch us live on YouTube.
Speaker 1: Building an all American wine cellar in the time of tariffs,
Speaker 1: an upcoming movie that puzzles through matchmaking math, and the
Speaker 1: Tony Award winning producer focused on improving the theater going
Speaker 1: experience right here in New York City.
Speaker 3: It means we're talking Bloomberg Pursuits. We got pretty much
Speaker 3: our favorite person in the world with us right now.
Speaker 3: The editor of Bloomberg Pursuits, Chris rouser, Chris, it's a day.
Speaker 3: It's been a day, which is why I want to
Speaker 3: start with wine. And you should note that we don't
Speaker 3: even drink, but I think I need some wine right now.
Speaker 3: I love the concept here with the way you did
Speaker 3: this package, because the whole idea is we're in this
Speaker 3: really complicated tariff regime and it is affecting imports of
Speaker 3: wine and spirits. So the challenge, if we're up for it,
Speaker 3: is to build an incredible wine cellar only based on
Speaker 3: American wines.
Speaker 1: After we stop crying, yeah exactly.
Speaker 13: So yeah, so we don't know where the tariffs are
Speaker 13: going to end up with European wines and luxury items.
Speaker 13: But when we were talking to Ellen McCoy, our wine columnist,
Speaker 13: she and I got into discussion about what is the
Speaker 13: root question actually, because when it comes to luxury items,
Speaker 13: things that you don't need that have tariffs on them,
Speaker 13: it's really Trump is asking you to consider whether you
Speaker 13: can meet all your desires just based on stuff that's
Speaker 13: made in America. And okay, so let's follow that to
Speaker 13: the conclusion, can you make a great wine cellar just
Speaker 13: using American wines? The answer, you know, is that it
Speaker 13: depends Alan really believes in tear war and the joy
Speaker 13: of collecting wine really is related to having a wide
Speaker 13: variety of wines. Wines taste good because of the terear war,
Speaker 13: which is a combination of the soil and the ground
Speaker 13: and the environment and the hands that went into making it.
Speaker 13: That's what's beautiful about wine. It's not just a glass.
Speaker 13: It's so much more than that. And to limit yourself
Speaker 13: to one country or one region really limits the possibilities
Speaker 13: for you. However, are there a lot of great winemakers
Speaker 13: in the United States.
Speaker 1: Yes, Before we get into that, I think about tim
Speaker 1: like all the conversations that we've had with folks that
Speaker 1: have come on from around the world wine makers, and
Speaker 1: part of the things that we always get into it
Speaker 1: strikes me, Chris, is that how they make it, you know,
Speaker 1: how they talk about the earth. They talk about you know,
Speaker 1: regenerative farming, like doing things like it is such a
Speaker 1: big part. They talked about the impact of climate change.
Speaker 1: So I totally get what you say that right. It
Speaker 1: makes a difference in terms of the wine that you
Speaker 1: ultimately get.
Speaker 13: And there's so many different kinds of grapes. There's grapes
Speaker 13: that you've never heard of. The major grapes in the
Speaker 13: US are grapes that have been imported from the major
Speaker 13: collectible wines in France, basically France and Italy, and so
Speaker 13: you know, like Cabernet, Chardonnay, and.
Speaker 8: There's so much more than that.
Speaker 13: But Ellen does have a range of wines that she
Speaker 13: really believes are super investable from the US, from Chateau
Speaker 13: Montalana to Literai to Ridge Vineyards, which is sort of
Speaker 13: her number one.
Speaker 3: What's the sort of geographical range in the United States,
Speaker 3: Because one point that her piece makes is that there's
Speaker 3: been a lot of growth in the West of the
Speaker 3: United States, even in the East here in New York
Speaker 3: State when it comes to wines that are being produced.
Speaker 3: Over the last few decades.
Speaker 13: There has been a tremendous amount of growth in wine
Speaker 13: outside of California Oregon, the places that you sort of
Speaker 13: traditionally think of as American wine growing however, like even
Speaker 13: Texas actually as a big growing wine population. But the
Speaker 13: really like investment quality wines are still in California, in Oregon.
Speaker 3: I mean, the seven US wines for a starter seller
Speaker 3: that she includes in this a lot of them are
Speaker 3: in California.
Speaker 13: Still yeah, and you know, a lot of wine is
Speaker 13: about perception. It's like any kind of you know, alternative investment.
Speaker 13: It's about history, it's about reputation. And so the Chateau Montalina,
Speaker 13: for example, the chardonnay there is the one that won
Speaker 13: the famous nineteen seventy six Paris tasting where they put
Speaker 13: American wines up against French wines. And it's still dominant,
Speaker 13: but it will always be a legend because of that.
Speaker 1: Not so expensive either, like relatively speaking.
Speaker 13: Yeah, not so bad. Some of these are not you know,
Speaker 13: seventy five dollars ago summer.
Speaker 3: Four fifty five.
Speaker 1: Dollars not a flex. But I'm going to be telling
Speaker 1: you my husband and I just were talking about Opus
Speaker 1: one because it was like when we went to Napa,
Speaker 1: that was one of the places we visited and tasted.
Speaker 1: But we also, like many years before the child was born,
Speaker 1: like remember having this dinner and bottle and buying a
Speaker 1: bottle of opis and opus when it was so let.
Speaker 3: Me get this straight. You had homemade French bread, creutons
Speaker 3: night with escargo, withes cargo, and you're talking about Opus
Speaker 3: one wines too.
Speaker 1: Yeah, well, but sod like again, you know, pre kid,
Speaker 1: there was a lot of stuff that went on. Yeah,
Speaker 1: a very good bottle of one. So you're saying, we
Speaker 1: can do it. We can find stuff in America.
Speaker 13: You could make a very strong seller that you will
Speaker 13: enjoy in love for years. Can you make a comprehensive
Speaker 13: one that really gets it all the joy of wine collecting?
Speaker 5: No, you can't.
Speaker 1: All right, can you find a relationship where you're in love?
Speaker 1: And there's also some money.
Speaker 3: Involved and Pedro Pascal is in there as well.
Speaker 1: Not a great segue, but there I went.
Speaker 3: Let's talk a little bit about this new film from
Speaker 3: a twenty four that's highlighted in Pursuits.
Speaker 8: Yeah.
Speaker 13: So Selene Song is a director of Past Lives, which
Speaker 13: is a movie that a lot of people really loved,
Speaker 13: and for a twenty four she had this movie coming
Speaker 13: out in June called The Materialists. And before she was
Speaker 13: a director, she worked at a matchmaking service and she
Speaker 13: was really kind of blown away when she was young.
Speaker 13: She was sort of impressiable. She was blown away by
Speaker 13: how transactional people were when they were looking for mates.
Speaker 13: And it wasn't even really like I want someone tall,
Speaker 13: or you know, I want someone nice. It was like,
Speaker 13: I want someone between sixty two and sixty three who
Speaker 13: has at least ten million dollars in the bank, you know,
Speaker 13: who does this kind of financialop. It was very specific,
Speaker 13: and you know, I think a lot of us don't
Speaker 13: realize that, like people, you know, when it comes to
Speaker 13: transactional matchmaking, like that's happening. You know, people can be
Speaker 13: really specific with what they want. And this movie gets
Speaker 13: into the idea of like, maybe that's not so bad.
Speaker 3: So enter Pedro Pascal and Captain America. Yeah, two different
Speaker 3: ends of the spectrum when it comes to who they
Speaker 3: play in the film. Yes, exactly.
Speaker 4: So.
Speaker 13: The movie centers on Dakota Johnson who's working at a
Speaker 13: matchmaking service and she's very good at it. She has
Speaker 13: a string of marriages under her belt, and she has
Speaker 13: a couple of guys come into her life. One of
Speaker 13: them is her ex, who is Chris Evans, who is
Speaker 13: a struggling cater waiter and actor obviously looks like Captain
Speaker 13: America and.
Speaker 1: Then checks off a few bucks.
Speaker 5: It's yere.
Speaker 13: And then Pedro Pascal wanders in her life and he's
Speaker 13: a billionaire who just wants to treat her extremely well
Speaker 13: and take her out to Oma Casse meals and have
Speaker 13: her sleep on footage sheets and she has, you know,
Speaker 13: somehow a hard time choosing between the checks.
Speaker 3: A few blocks is there, And we should note it's
Speaker 3: not like a cut and dry sort of situation here.
Speaker 3: It's complicated. There's some nuance and there's also some historical
Speaker 3: precedence when it comes to the storytelling.
Speaker 8: Yeah.
Speaker 13: So a lot of times the movie value system in
Speaker 13: romantic comedies will reward following your heart, and that is
Speaker 13: often away from the rich person or you know, like
Speaker 13: in You've Got Mail, they sort of found a way
Speaker 13: to for Meg Ryan and Tom Hanks to end up
Speaker 13: together in spite of the money. And in this case
Speaker 13: Celine's song saying, you know what, that can be part
Speaker 13: of your decision. You can decide based on what your
Speaker 13: lifestyle is going to be like, and you know, it's
Speaker 13: not necessarily a bad thing. It's just you can always
Speaker 13: go back into the marketplace it doesn't work out.
Speaker 1: I love it because there's kind of a practical side
Speaker 1: to it, like, Okay, see what do we need? What
Speaker 1: do I want? What do I it's going to make
Speaker 1: and we all could probably you know, agree that a
Speaker 1: relationship is good for a couple of different reasons. Yeah,
Speaker 1: and so you need to kind of think about it.
Speaker 1: I love kind of the pragmatic aspect of this, right
Speaker 1: although I'm a romantic at heart, so I'm just gonna
Speaker 1: leave it there.
Speaker 3: Hey, let's go from screen to stage. I love this
Speaker 3: feature that you have in Bloomberg Pursuits Chris about somebody
Speaker 3: who's really trying to reinvent the Broadway experience. Greg Noble
Speaker 3: tell us about him.
Speaker 5: So.
Speaker 13: Greg Noble is a producer who runs a company called
Speaker 13: Cview Productions, and it's partially owned by Sony, and it
Speaker 13: has done a lot of really big productions. So currently
Speaker 13: they have good Night and Good Luck, which is which
Speaker 13: stars George Clooney. Tickets are now like upwards of eight
Speaker 13: hundred dollars per sept because of dynamic pricing. It's up
Speaker 13: for like five Tony Awards on June eighth. So he's
Speaker 13: mastered kind of these big shows. You know, he's done.
Speaker 13: He did Romeo and Juliette with Rachel Zegeler and Kit Connor,
Speaker 13: was like totally sold out. All gen Z wanted to
Speaker 13: go see it. But what he's doing next is he's
Speaker 13: actually building out a small theater where he's going to
Speaker 13: do small shows just like under three hundred seats. Tickets
Speaker 13: are going to be like seventy nine dollars, and he's
Speaker 13: going to start working on small shows to try to
Speaker 13: develop stuff that can go on to be bigger.
Speaker 3: I don't understand how you can from a pricing perspective,
Speaker 3: if a traditional Broadway show that right now, yes it's
Speaker 3: the hot show at the moment, good Night and good
Speaker 3: Luck and George Clooney's in it, how can you go
Speaker 3: smaller but still have it be an affordable experience.
Speaker 13: So it takes a lot of You mean, how does
Speaker 13: the producer go small way?
Speaker 5: Yeah?
Speaker 3: Yeah, So it's like how does that attract How does
Speaker 3: it attract shows if there are fewer people who are
Speaker 3: going to see it, Because as you note in the piece,
Speaker 3: this oftentimes is a money losing prospect for people who
Speaker 3: back these financially.
Speaker 13: Yeah, if you invest in a Broadway show, you really
Speaker 13: only get like recouper get your money back about twenty
Speaker 13: percent of the time. So it's like not a good investment.
Speaker 13: But it costs a ton of money to go on
Speaker 13: Broadway because there's union costs which are quite high. The
Speaker 13: week two week running costs of a big show with
Speaker 13: a cast and a big creative crew, it can be
Speaker 13: quite a lot. And so they're capitalized at you know,
Speaker 13: ten twenty million dollars. A musical will be twenty million dollars.
Speaker 13: A Good Night and Good Luck is ten million dollars.
Speaker 13: The first show at Studio Cview, which is Greg's new theater,
Speaker 13: is called Angry Allan. It's by a kind of lesser
Speaker 13: known playwright starring John Krasinski. It was capitalized for one
Speaker 13: point five million dollars. That's way less, and that means
Speaker 13: that's like a totally different scale of what you need
Speaker 13: to earn back. And there'll be you know, low price
Speaker 13: tickets and then there'll be tickets more of more than
Speaker 13: three hundred dollars. And Greg believes that both of those
Speaker 13: audiences should be in one place.
Speaker 1: I kind of love it, right, It's almost like an incubator, like,
Speaker 1: you know, right, just to play around with some stuff,
Speaker 1: but you see a celebrity. But I love the idea
Speaker 1: of a smaller format, right. It kind of is cozier.
Speaker 7: Yeah.
Speaker 13: And Greg's thing is, like you it's a bad experience
Speaker 13: to go to the theater, like everyone's in line it's
Speaker 13: probably raining. You get in there, they're kind of yelling
Speaker 13: at you to look through your bag and then they
Speaker 13: shove you like a glass of wine with this in
Speaker 13: a sippy cup, and so it's just feel great and
Speaker 13: you're spending so much money on it. And he so
Speaker 13: Greg's building out this like Q theater with a bar
Speaker 13: where he's going to stay late, open after shows.
Speaker 1: Where's it going to be.
Speaker 13: It's on forty third and eighth. Okay, yeah, it's right
Speaker 13: in your Times Square and it's just going to be
Speaker 13: like a vibe kind of place to hang out. It's
Speaker 13: an old theater, it was a theater, a nonprofit theater
Speaker 13: before where a lot of really cool shows have been.
Speaker 1: Just something about this dude, because it sounds like since
Speaker 1: he's a kid, he's been like moving towards it.
Speaker 13: I think that's the best story. When he was a
Speaker 13: little kid, one of his friends was diagnosed with terminal
Speaker 13: cancer and so he started a lemonade stand, selling lemonade
Speaker 13: to fundraise for research. And one day he was like
Speaker 13: a theater geek, like and his friends were. He was like,
Speaker 13: what if we start putting on shows and selling tickets
Speaker 13: to fundraise? And then they did it for years and
Speaker 13: years and they raised two hundred thousand dollars. These kids
Speaker 13: from like fourth grade.
Speaker 1: It's amazing.
Speaker 13: And that's how he was like, wait, I could be
Speaker 13: a producer. I could do this for my life.
Speaker 1: And here he is. Yeah, good stuff. More details, so
Speaker 1: much details in this story. So highly recommend you check
Speaker 1: out this story by our own Chris Route and that
Speaker 1: is Chris Rouser.
Speaker 3: He's the editor of Bloomberg Pursuits. Also our favorite guy.
Speaker 13: Oh you guys.
Speaker 3: Catch these stories on the Bloomberg and at Bloomberg dot
Speaker 3: com slash BusinessWeek. Also in the June issue of BusinessWeek
Speaker 3: magazine that's out on news stands on June tenth.
Speaker 1: I'm serious, Chris, like Tim and I are pretty cranky,
Speaker 1: Like as we kicked off our day today, you look
Speaker 1: in and we're like smiling and having fun.
Speaker 13: You guys always make my week the whole week.
Speaker 1: Well, thank you, thank you, and that reps ups the
Speaker 1: weekend edition of Bloomberg Business Week from Bloomberg Radio from Chris,
Speaker 1: me and Tim. Thank you so much for joining us.
Speaker 1: Have a good and safe weekend everyone.
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple,
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