1 00:00:00,120 --> 00:00:04,360 Speaker 1: Bloomberg is now on your dashboard with Apple CarPlay and 2 00:00:04,360 --> 00:00:08,160 Speaker 1: Android Auto. It gives you access to every Bloomberg podcast, 3 00:00:08,280 --> 00:00:11,560 Speaker 1: live audio feeds from Bloomberg Radio, print stories from Bloomberg 4 00:00:11,640 --> 00:00:14,920 Speaker 1: News in audio form, and the latest headlines of the 5 00:00:14,920 --> 00:00:18,600 Speaker 1: click of a button with Bloomberg News. Now it's free 6 00:00:18,680 --> 00:00:21,439 Speaker 1: with the latest version of the Bloomberg Business App. That's 7 00:00:21,680 --> 00:00:24,400 Speaker 1: the Bloomberg Business App. Get it on your phone in 8 00:00:24,440 --> 00:00:27,760 Speaker 1: the Apple App Store or on Google Play. Just download 9 00:00:27,800 --> 00:00:30,560 Speaker 1: the app, connect your phone to your car and get started. 10 00:00:30,960 --> 00:00:34,400 Speaker 1: And it's all presented by our sponsor, Interactive Brokers. 11 00:00:35,400 --> 00:00:38,600 Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 12 00:00:38,640 --> 00:00:39,800 Speaker 2: my co host Matt Miller. 13 00:00:40,200 --> 00:00:44,159 Speaker 1: Every business day we bring you interviews from CEOs, market pros, 14 00:00:44,320 --> 00:00:48,160 Speaker 1: and Bloomberg experts, along with essential market moven News. 15 00:00:48,720 --> 00:00:51,839 Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 16 00:00:51,960 --> 00:00:55,080 Speaker 2: you listen to podcasts, and at Bloomberg dot Com slash podcast. 17 00:00:55,360 --> 00:00:58,480 Speaker 2: We want to bring in Bloomberg TV's David Weston for 18 00:00:58,480 --> 00:01:02,000 Speaker 2: a conversation on the life and legacy of Henry Kischinger. First, 19 00:01:02,240 --> 00:01:04,320 Speaker 2: I want to bring you part of David's discussion with 20 00:01:04,360 --> 00:01:07,360 Speaker 2: Bloomberg opinion commist Neil Ferguson, who wrote a book on 21 00:01:07,440 --> 00:01:10,720 Speaker 2: the life of Henry Kischinger and spent extensive time with him. 22 00:01:10,920 --> 00:01:13,280 Speaker 2: Here's part of their discussion on the role of Kissinger 23 00:01:13,319 --> 00:01:14,960 Speaker 2: played in the Yamkipoor War. 24 00:01:15,760 --> 00:01:20,440 Speaker 3: For Kissinger, the moral imperative in the Cold War was 25 00:01:20,480 --> 00:01:23,039 Speaker 3: to avoid World War three, and that was one of 26 00:01:23,040 --> 00:01:25,600 Speaker 3: the reasons that he pursued a policy of deton of 27 00:01:26,000 --> 00:01:30,039 Speaker 3: understanding of improving relations with the Soviet Union, because I 28 00:01:30,040 --> 00:01:33,959 Speaker 3: think reasonably he thought the worst possible outcome for the 29 00:01:34,000 --> 00:01:38,480 Speaker 3: world would be a hot war between two nuclear armed superpars, 30 00:01:38,920 --> 00:01:41,960 Speaker 3: and so in practice, when he entered the realm of 31 00:01:42,040 --> 00:01:45,840 Speaker 3: power as Richard Nixon's national security advisor, I think he 32 00:01:45,920 --> 00:01:48,840 Speaker 3: remained an idealist, but an idealist who was having to 33 00:01:48,920 --> 00:01:53,720 Speaker 3: deal with some extremely difficult choices between, as I've said, 34 00:01:53,960 --> 00:01:57,840 Speaker 3: greater and lesser evils. So I don't think the idealism 35 00:01:58,080 --> 00:02:02,440 Speaker 3: was ever entirely eradicated. Certainly, working with Richard Nixon, you 36 00:02:02,480 --> 00:02:05,520 Speaker 3: were working with somebody who saw himself as a very 37 00:02:05,600 --> 00:02:09,680 Speaker 3: tough realist who wasn't afraid to do very difficult and 38 00:02:09,800 --> 00:02:12,360 Speaker 3: even nasty things. So I think there was an element 39 00:02:12,440 --> 00:02:16,760 Speaker 3: of compromise just in accepting a job with Nixon. But 40 00:02:16,840 --> 00:02:20,400 Speaker 3: once Nixon has gone, it's very interesting to see Kissinger 41 00:02:20,800 --> 00:02:25,080 Speaker 3: under Ford shift in a much more idealistic direction, and 42 00:02:25,120 --> 00:02:28,080 Speaker 3: a lot of Kissinger's later career, about which one hears 43 00:02:28,200 --> 00:02:32,800 Speaker 3: much much less, owed a lot more to his earlier 44 00:02:32,880 --> 00:02:36,600 Speaker 3: roots in German idealism. 45 00:02:36,960 --> 00:02:39,880 Speaker 2: It was Bloomberg Television's David Weston speaking with Bloomberg Opinion 46 00:02:39,919 --> 00:02:42,240 Speaker 2: Calmnesst Neil Fergus. I want to bring in David western 47 00:02:42,320 --> 00:02:44,720 Speaker 2: right now. David, thanks so much for joining us here 48 00:02:44,720 --> 00:02:46,239 Speaker 2: in our Bloomberg studio here. 49 00:02:46,320 --> 00:02:50,120 Speaker 4: What a life. It's been your life, my life. 50 00:02:50,800 --> 00:02:55,000 Speaker 2: That has been US diplomacy, whether it's official or nonofficial, 51 00:02:55,320 --> 00:02:56,280 Speaker 2: it's been Henry Kissinger. 52 00:02:56,360 --> 00:02:59,040 Speaker 5: Yeah, he's been the only diplomat i'd ever heard of. Frankly, 53 00:02:59,120 --> 00:03:01,240 Speaker 5: I mean when you first pointed, I was in high school. 54 00:03:01,240 --> 00:03:03,920 Speaker 5: Actually I'm old enough to remember that when Richard Nixon 55 00:03:03,960 --> 00:03:07,040 Speaker 5: appointed him. But and as Ray Dalio actually just posted 56 00:03:07,040 --> 00:03:09,919 Speaker 5: something saying this, you can't think of it who studied 57 00:03:10,000 --> 00:03:12,480 Speaker 5: history as deeply as Henry Kissinger did as an academic 58 00:03:12,480 --> 00:03:14,160 Speaker 5: at Harvard. He would have had a distinguished career in 59 00:03:14,200 --> 00:03:17,400 Speaker 5: that and then lived the diploma say was responsible for it, 60 00:03:17,639 --> 00:03:20,200 Speaker 5: and then got to know pretty much every world leader 61 00:03:20,520 --> 00:03:22,919 Speaker 5: and didn't just know them. They hung on his every word. 62 00:03:23,440 --> 00:03:26,600 Speaker 5: And that's China, that's Soviet Union, that's anwar, Sadat and 63 00:03:26,919 --> 00:03:29,600 Speaker 5: Egypt around the world. I mean, it's quite strang If 64 00:03:29,600 --> 00:03:31,799 Speaker 5: you read his book on leadership, he goes through the 65 00:03:31,840 --> 00:03:34,520 Speaker 5: six leaders that he had respect for. He starts with 66 00:03:34,639 --> 00:03:37,880 Speaker 5: Charles de Gaulle, who we knew personally, and he goes 67 00:03:37,880 --> 00:03:40,680 Speaker 5: on to Conrad Adenauer, whom he knew personally, and Maggie 68 00:03:40,680 --> 00:03:43,240 Speaker 5: Thatcher thinks it's really extraordinary life wow. 69 00:03:43,240 --> 00:03:45,920 Speaker 6: And David, you knew him personally as well. So maybe 70 00:03:45,960 --> 00:03:47,320 Speaker 6: if you could tell us a little bit about some 71 00:03:47,400 --> 00:03:51,440 Speaker 6: of your memories with Henry Kissinger and what you'll think 72 00:03:51,480 --> 00:03:52,960 Speaker 6: of him most. 73 00:03:52,600 --> 00:03:54,600 Speaker 5: Yeah, I would say, I'm not sure Henry would say 74 00:03:54,680 --> 00:03:56,280 Speaker 5: this if he were here, But he sort of adopted 75 00:03:56,320 --> 00:03:58,200 Speaker 5: me when I came to New York in the mid nineties. 76 00:03:58,320 --> 00:03:59,680 Speaker 5: I think he took pity on me and took me 77 00:03:59,760 --> 00:04:02,160 Speaker 5: under and he used to invite me to breakfast that 78 00:04:02,200 --> 00:04:04,160 Speaker 5: he had with like twenty people or so at a 79 00:04:04,200 --> 00:04:07,119 Speaker 5: club where he'd have visiting dignitaries in people he'd known 80 00:04:07,120 --> 00:04:09,520 Speaker 5: through the years where we'd have an off the record 81 00:04:09,520 --> 00:04:12,800 Speaker 5: discussion about what was going on in Asia, in Europe 82 00:04:12,840 --> 00:04:15,280 Speaker 5: and the Middle East, and it was wonderful. It was 83 00:04:15,320 --> 00:04:17,279 Speaker 5: one of his experiences. And so he really and I 84 00:04:17,320 --> 00:04:19,839 Speaker 5: had lunches with him where he would He was a 85 00:04:19,839 --> 00:04:22,279 Speaker 5: teacher forever and he wanted to teach you, and he 86 00:04:22,320 --> 00:04:24,839 Speaker 5: had an amazing mind. You could agree with them, you 87 00:04:24,880 --> 00:04:26,880 Speaker 5: could disagree with them, but he had thought it all 88 00:04:26,920 --> 00:04:29,440 Speaker 5: through many times, and he could explain to you how 89 00:04:29,520 --> 00:04:32,160 Speaker 5: everything was connected to everything else. He was already fastening. 90 00:04:32,320 --> 00:04:34,200 Speaker 5: Last thing. He was a huge dog person. 91 00:04:34,520 --> 00:04:34,880 Speaker 4: Really. 92 00:04:34,960 --> 00:04:37,400 Speaker 5: He and Nancy loved dogs. I mean, I can't believe 93 00:04:37,440 --> 00:04:39,800 Speaker 5: they always were with a dog constantly. And he was 94 00:04:39,839 --> 00:04:42,640 Speaker 5: a charming, actually very warm man in many ways. 95 00:04:42,680 --> 00:04:45,760 Speaker 2: It's amazing what did he think of what's happened, not 96 00:04:45,839 --> 00:04:48,480 Speaker 2: just the United States over the last five six, seven years, 97 00:04:48,480 --> 00:04:52,080 Speaker 2: in terms of the nationalism America first in the US, 98 00:04:52,120 --> 00:04:55,440 Speaker 2: with Brexit in the UK and the elections. It seems 99 00:04:55,480 --> 00:04:58,000 Speaker 2: like internationalism, which I think you and I kind of 100 00:04:58,000 --> 00:05:02,080 Speaker 2: grew up with post World War Two, is not necessarily 101 00:05:02,720 --> 00:05:05,960 Speaker 2: the leading role or the leading thought here in international 102 00:05:05,960 --> 00:05:06,800 Speaker 2: relations these days. 103 00:05:06,839 --> 00:05:09,320 Speaker 5: Well, these are my words, not his, but I think 104 00:05:09,400 --> 00:05:12,800 Speaker 5: he would say it's dangerous. We have to remember he 105 00:05:12,839 --> 00:05:15,599 Speaker 5: came out of Nazi Germany, fleeing it in nineteen thirty 106 00:05:15,600 --> 00:05:18,760 Speaker 5: eight with his family as a Jew, and he studied. 107 00:05:18,800 --> 00:05:22,200 Speaker 5: In his work. He started with the post Napoleonic Wars, 108 00:05:22,240 --> 00:05:25,600 Speaker 5: putting it together Europe and talking about the balance of powers, 109 00:05:25,640 --> 00:05:28,480 Speaker 5: people like Metternik that he really valued as a way 110 00:05:28,520 --> 00:05:32,280 Speaker 5: to avoid war. He wanted to avoid conflict at all costs. 111 00:05:32,680 --> 00:05:34,679 Speaker 5: And I think he would say, if we were here today, 112 00:05:34,800 --> 00:05:38,480 Speaker 5: there are real dangers in everybody going to their respective 113 00:05:38,480 --> 00:05:41,560 Speaker 5: corners and fighting with whether people get hurt that way. 114 00:05:41,600 --> 00:05:43,599 Speaker 5: And in fact, he talked about this just last month 115 00:05:43,760 --> 00:05:45,680 Speaker 5: was the last time I saw him. He appeared live 116 00:05:46,080 --> 00:05:48,040 Speaker 5: at the Al Smith dinner here in New York, and 117 00:05:48,160 --> 00:05:51,240 Speaker 5: he gave a speech on this very subject, warning people 118 00:05:51,320 --> 00:05:53,040 Speaker 5: about the dangers here that we have in front of 119 00:05:53,120 --> 00:05:54,159 Speaker 5: us if we keep going this way. 120 00:05:54,360 --> 00:05:56,320 Speaker 6: Well, one of the bigger parts of his legacy was, 121 00:05:56,360 --> 00:05:59,240 Speaker 6: of course brokering the peace in the Middle East, and 122 00:05:59,600 --> 00:06:03,200 Speaker 6: certain hearkens now to what we're seeing between the Born 123 00:06:03,440 --> 00:06:06,960 Speaker 6: Israel and with Hamas. So did you speak to him 124 00:06:07,000 --> 00:06:09,760 Speaker 6: more recently to know what he was thinking as far 125 00:06:09,839 --> 00:06:13,279 Speaker 6: as the conflict now, or what you might imagine he 126 00:06:13,320 --> 00:06:15,880 Speaker 6: would have to say thinking about this current conflict. 127 00:06:15,960 --> 00:06:17,800 Speaker 5: Yeah, I don't want to be so presumptuous as to 128 00:06:17,800 --> 00:06:19,760 Speaker 5: speak with him for him, but I think he would 129 00:06:19,800 --> 00:06:23,760 Speaker 5: definitely say it's very different in many respects. The attack 130 00:06:23,839 --> 00:06:27,080 Speaker 5: was different hamas terrorists going in and slaughtering children was 131 00:06:27,080 --> 00:06:30,080 Speaker 5: different from a surprise attack from Egypt. In Syria and 132 00:06:31,200 --> 00:06:34,120 Speaker 5: Israel at the same time, there are some parallels because 133 00:06:34,120 --> 00:06:37,599 Speaker 5: what happened there if you remember, is Henry Kissinger with 134 00:06:37,760 --> 00:06:40,240 Speaker 5: President Nixon, came in strong on the side of Israel 135 00:06:40,560 --> 00:06:43,440 Speaker 5: and shift them a lot of weapons and material and 136 00:06:43,480 --> 00:06:45,440 Speaker 5: support in the early stage. But then there was a 137 00:06:45,480 --> 00:06:48,279 Speaker 5: pivot where they started saying, Israel, you've got to back off. 138 00:06:48,279 --> 00:06:51,080 Speaker 5: You can't go too hard against Egypt. And in fact, 139 00:06:51,080 --> 00:06:53,600 Speaker 5: at one point he really interviewed very forcefully because he 140 00:06:53,640 --> 00:06:57,080 Speaker 5: was concerned that if Israel tried to destroy one of 141 00:06:57,080 --> 00:06:59,800 Speaker 5: the armies of Egypt, which they could have done, the 142 00:07:00,520 --> 00:07:02,920 Speaker 5: Soviet Union would come in and there'd be a shooting war, 143 00:07:02,960 --> 00:07:04,839 Speaker 5: and we ended up with US against the Soviet Union. 144 00:07:04,920 --> 00:07:08,039 Speaker 5: So he actually played a key role in saying to 145 00:07:08,200 --> 00:07:10,560 Speaker 5: Israel you've got it back down, and he had some real, 146 00:07:10,920 --> 00:07:13,360 Speaker 5: real conflicts of gold in my ear at the time. 147 00:07:13,360 --> 00:07:16,280 Speaker 6: And of course Israel he's getting different pressure now to 148 00:07:16,400 --> 00:07:19,640 Speaker 6: back down, not for fear of Russia coming into the conflict, 149 00:07:19,800 --> 00:07:22,360 Speaker 6: but kind of similar to what we're seeing now in 150 00:07:22,360 --> 00:07:23,120 Speaker 6: that sense. 151 00:07:23,360 --> 00:07:26,440 Speaker 2: David, some of the criticism of mister Kishinger maybe as 152 00:07:26,440 --> 00:07:27,640 Speaker 2: a release to human rights. 153 00:07:27,480 --> 00:07:29,840 Speaker 4: And his pursuit of global diplomacy. 154 00:07:30,680 --> 00:07:33,120 Speaker 2: What he would say, what I've read, would I'm making 155 00:07:33,160 --> 00:07:34,920 Speaker 2: some hard choices here, and some of the hard choices 156 00:07:35,000 --> 00:07:37,520 Speaker 2: might result in some human rights being violated in. 157 00:07:37,520 --> 00:07:39,800 Speaker 4: Various places around the world. How did he deal with 158 00:07:39,840 --> 00:07:41,920 Speaker 4: that or how did he talk about that? 159 00:07:42,120 --> 00:07:44,320 Speaker 5: Well, he did talk about it, and I would say 160 00:07:44,360 --> 00:07:45,760 Speaker 5: he would deny this. I would say he was a 161 00:07:45,760 --> 00:07:48,840 Speaker 5: bit defensive particular things like Cambodia. But you can't talk 162 00:07:48,840 --> 00:07:51,000 Speaker 5: about the legacy of Andrew Kitchen without talking about so 163 00:07:51,040 --> 00:07:53,760 Speaker 5: of the countries, with Cambodia and the so called Secret War, 164 00:07:53,840 --> 00:07:56,440 Speaker 5: with what happened in Chile, with the coup, what happened 165 00:07:56,440 --> 00:08:00,000 Speaker 5: in Argentina, and even what happened in Pakistan. But I think, 166 00:08:00,000 --> 00:08:02,560 Speaker 5: I think and Walter Isaacson also wrote a book about 167 00:08:02,640 --> 00:08:07,160 Speaker 5: Henry Kustinger quotes Henry quoting a version of Gerta that 168 00:08:07,240 --> 00:08:10,200 Speaker 5: basically said, if you make me choose between injustice and 169 00:08:10,320 --> 00:08:13,960 Speaker 5: order and justice and disorder, I will take injustice and order, 170 00:08:14,440 --> 00:08:17,160 Speaker 5: I think, which comes partly from his background, because he 171 00:08:17,200 --> 00:08:21,320 Speaker 5: saw what disorder in World War two in Europe could do, 172 00:08:21,800 --> 00:08:24,360 Speaker 5: and so he did make some tough decisions. I'm sure 173 00:08:24,400 --> 00:08:26,040 Speaker 5: he would say the session and he would say, look, 174 00:08:26,200 --> 00:08:27,840 Speaker 5: I can't say I was right. I just tell me 175 00:08:27,880 --> 00:08:30,200 Speaker 5: would have been better? Give me what the better alternati 176 00:08:30,200 --> 00:08:32,520 Speaker 5: would have been at the time that was the one 177 00:08:32,520 --> 00:08:35,160 Speaker 5: that would preserve the most order that we could have. 178 00:08:35,559 --> 00:08:37,800 Speaker 6: When we're thinking back now to the war that we're 179 00:08:37,840 --> 00:08:41,400 Speaker 6: seeing in the Middle East, and you know, current Secretary 180 00:08:41,440 --> 00:08:44,679 Speaker 6: of State Anthony Blincoln, he's gone out to Israel to 181 00:08:45,400 --> 00:08:48,000 Speaker 6: you know, to speak with the officials over there. Do 182 00:08:48,040 --> 00:08:50,600 Speaker 6: you think that there would like, you know, speaking onto 183 00:08:51,000 --> 00:08:53,199 Speaker 6: How you think that the current Secretary of State and 184 00:08:53,320 --> 00:08:56,120 Speaker 6: really what their role is in this conflict, and how 185 00:08:56,120 --> 00:08:59,760 Speaker 6: it's different from Kissinger's roll back at the Camp David Accords. 186 00:09:00,080 --> 00:09:02,800 Speaker 5: Ironic, isn't it that we're seeing shuttle diplomacy even as 187 00:09:02,800 --> 00:09:05,600 Speaker 5: we speak right now with Tony blinkin over there in 188 00:09:05,720 --> 00:09:08,480 Speaker 5: Israel and going to Romala, going to the West Bank 189 00:09:08,480 --> 00:09:11,600 Speaker 5: and trying to keep things under control as much as 190 00:09:11,600 --> 00:09:15,600 Speaker 5: they can. It's ironic, it's very difficult because, I mean, 191 00:09:15,640 --> 00:09:17,599 Speaker 5: for those of us who are around, Henry Kinsinger was 192 00:09:17,679 --> 00:09:21,240 Speaker 5: larger than life. I mean, he dated superstar models and 193 00:09:21,280 --> 00:09:23,040 Speaker 5: things like that, and he was on the front pages 194 00:09:23,040 --> 00:09:24,840 Speaker 5: of paper all the time, and he had such a 195 00:09:24,840 --> 00:09:27,280 Speaker 5: powerful position in Nixon. I'm not sure there are figures 196 00:09:27,320 --> 00:09:31,120 Speaker 5: anywhere right now that are loom Is large. But I 197 00:09:31,160 --> 00:09:33,959 Speaker 5: think what we're seeing from Secretary of State Blincoln and 198 00:09:34,040 --> 00:09:36,360 Speaker 5: from President Biden right now is a version of what 199 00:09:36,520 --> 00:09:39,280 Speaker 5: Henry Kinsinger tried to pursue, which is basically, let's talk 200 00:09:39,320 --> 00:09:41,079 Speaker 5: to all the parties, figure out where the interests are, 201 00:09:41,120 --> 00:09:44,000 Speaker 5: find the right balance, and keep things under control. Even 202 00:09:44,040 --> 00:09:46,480 Speaker 5: if we can't come to an overall solution of the problem, 203 00:09:46,559 --> 00:09:49,600 Speaker 5: let's manage the problem and try to minimize the damage 204 00:09:49,640 --> 00:09:51,439 Speaker 5: and yes, the loss of human life. 205 00:09:51,840 --> 00:09:55,520 Speaker 2: David mister Kissinger was one of the architects of Dayton 206 00:09:55,760 --> 00:09:58,320 Speaker 2: with the Soviet Union. What were some of his thoughts 207 00:09:58,360 --> 00:10:00,559 Speaker 2: about the rise of Vladimir Putin kind of what we're 208 00:10:00,559 --> 00:10:02,960 Speaker 2: seeing from Russian activities over the last decade or so. 209 00:10:03,160 --> 00:10:06,960 Speaker 5: Well, he obviously, I suppose, thought that that was very 210 00:10:07,040 --> 00:10:11,320 Speaker 5: dangerous and very risky and a much different situation to 211 00:10:11,360 --> 00:10:15,600 Speaker 5: what we had before, in part because actually Russia today 212 00:10:15,720 --> 00:10:18,120 Speaker 5: is not as powerful as the Soviet Union was then. 213 00:10:18,600 --> 00:10:20,480 Speaker 5: I mean, if we think back to that Cold War, 214 00:10:20,559 --> 00:10:22,880 Speaker 5: I mean, there were two superpowers they're scaring up. If 215 00:10:22,880 --> 00:10:25,120 Speaker 5: there are two superpowers today, it's China and the United States, 216 00:10:25,559 --> 00:10:28,120 Speaker 5: and Russia is a smaller player, which in some ways 217 00:10:28,200 --> 00:10:30,800 Speaker 5: makes it more dangerous because they feel they have less 218 00:10:30,840 --> 00:10:32,920 Speaker 5: to lose and they feel that they have more to gain. 219 00:10:32,960 --> 00:10:35,680 Speaker 5: And certainly, if you read what Vladimir Putin says, he 220 00:10:35,720 --> 00:10:38,680 Speaker 5: feels he was really done wrong. Russia was done wrong 221 00:10:38,720 --> 00:10:40,800 Speaker 5: with the fall of Wall, and he's got to resume 222 00:10:41,080 --> 00:10:43,760 Speaker 5: restore that prestige, which makes it more dangerous. 223 00:10:44,080 --> 00:10:46,439 Speaker 2: China, I mean, that's the new thing that I mean, 224 00:10:47,160 --> 00:10:49,160 Speaker 2: I can't imagine he's very happy with what's kind of 225 00:10:49,360 --> 00:10:51,800 Speaker 2: chilled over relationship over the last four or five six 226 00:10:51,880 --> 00:10:53,000 Speaker 2: years between US and China. 227 00:10:53,160 --> 00:10:56,280 Speaker 5: Well, perhaps his last international trip was to Beijing, very good, 228 00:10:56,320 --> 00:10:58,480 Speaker 5: where he got to meet with President gi personally, when 229 00:10:58,840 --> 00:11:00,520 Speaker 5: else nobody else in the United it could meet with 230 00:11:00,559 --> 00:11:02,880 Speaker 5: President G. G you wanted to do with him, And 231 00:11:02,920 --> 00:11:07,160 Speaker 5: you can underestimate the reverence point that the Chinese leadership 232 00:11:07,200 --> 00:11:10,319 Speaker 5: has and has had for generations for Henry Kissinger. Now, 233 00:11:10,360 --> 00:11:12,760 Speaker 5: part of that is part of the culture. They really 234 00:11:12,840 --> 00:11:15,800 Speaker 5: revere the elderly people who have a lot of experience. 235 00:11:15,840 --> 00:11:17,720 Speaker 5: I mean, it reminds me actually of Charlie Munger right now, 236 00:11:19,400 --> 00:11:21,559 Speaker 5: where Charlie Munger said, boy, you get a good executive, 237 00:11:21,559 --> 00:11:23,480 Speaker 5: you keep him there forever. You don't turn them over 238 00:11:23,600 --> 00:11:26,240 Speaker 5: five or six years. But the Chinese really revered that. 239 00:11:26,320 --> 00:11:28,000 Speaker 5: But also if you think of from China's point of view, 240 00:11:28,040 --> 00:11:30,920 Speaker 5: imagine where China was when he went there first and 241 00:11:30,960 --> 00:11:33,520 Speaker 5: where it is now and would it have gotten there. 242 00:11:33,600 --> 00:11:35,599 Speaker 5: I'm not sure it would have gotten as far or 243 00:11:35,679 --> 00:11:38,520 Speaker 5: as fast without Henry Kissinger and Richard Nixon, because it 244 00:11:38,559 --> 00:11:41,640 Speaker 5: was Richard Nixon's idea. Henry Kinsinger implemented it, but it 245 00:11:41,640 --> 00:11:43,400 Speaker 5: was actually Richard Nixon's strategy. 246 00:11:43,559 --> 00:11:45,560 Speaker 2: David, thank you so much for joining us. David Weston, 247 00:11:45,840 --> 00:11:49,400 Speaker 2: he is the host of Wall Street Week, which is 248 00:11:49,400 --> 00:11:51,840 Speaker 2: one of my favorite brands ever on Wall Street. Wall 249 00:11:51,880 --> 00:11:54,839 Speaker 2: Street Week bearing both on radio and television with his thoughts, 250 00:11:54,920 --> 00:11:59,480 Speaker 2: his perspectives on the extraordinary life of Henry Kissinger, passed 251 00:11:59,480 --> 00:11:59,920 Speaker 2: away at the AI. 252 00:12:02,000 --> 00:12:05,400 Speaker 7: You're listening to the Team Ken's are Live program Bloomberg 253 00:12:05,480 --> 00:12:08,840 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg dot Com, 254 00:12:08,920 --> 00:12:12,040 Speaker 7: the iHeartRadio app and the Bloomberg Business App, or listen 255 00:12:12,120 --> 00:12:14,240 Speaker 7: on demand wherever you get your podcasts. 256 00:12:16,120 --> 00:12:18,760 Speaker 2: I don't know if the uh the cyber truck thing 257 00:12:18,800 --> 00:12:20,880 Speaker 2: Majiggi's got Apple Play, but we'll check in with our next guest. 258 00:12:20,920 --> 00:12:21,079 Speaker 8: Dan. 259 00:12:21,120 --> 00:12:22,520 Speaker 4: I've held everything about this stuff. 260 00:12:22,559 --> 00:12:25,240 Speaker 2: Dan Ives is a managing director senior equity analyst web 261 00:12:25,280 --> 00:12:30,160 Speaker 2: Bush Securities UH and a Penn State Rabbit fan of 262 00:12:30,320 --> 00:12:33,079 Speaker 2: note there. All right, Dan, I'm seeing the video of 263 00:12:33,080 --> 00:12:35,200 Speaker 2: the cyber truck. I just don't get it. Dude, I 264 00:12:35,200 --> 00:12:37,400 Speaker 2: don't see It's not a truck man. I can't throw 265 00:12:37,440 --> 00:12:39,920 Speaker 2: a ball of hay in the back of the truck. 266 00:12:39,960 --> 00:12:42,120 Speaker 4: More importantly, why are you carrying builds of hay? 267 00:12:42,280 --> 00:12:44,719 Speaker 2: Well, because I'm gonna get I'm a rancher. Maybe I'm 268 00:12:44,720 --> 00:12:47,400 Speaker 2: gonna get a ranch, you know, thinking about that. I 269 00:12:47,440 --> 00:12:50,080 Speaker 2: watch I watch Yellowstone. So Dan, talk to us about 270 00:12:50,080 --> 00:12:52,600 Speaker 2: this cyber truck. What's it mean for Tesla. 271 00:12:53,480 --> 00:12:56,840 Speaker 9: This is important. I call it a historical event for 272 00:12:57,000 --> 00:13:00,480 Speaker 9: Tesla and Mosque in terms of this new category four 273 00:13:00,559 --> 00:13:03,600 Speaker 9: years in the making. I mean you got two million reservations, 274 00:13:03,640 --> 00:13:06,040 Speaker 9: even if forty percent of those convert base in our 275 00:13:06,200 --> 00:13:08,920 Speaker 9: estimates eight hundred thousand, I mean, this is gonna be 276 00:13:08,960 --> 00:13:11,640 Speaker 9: a new growth vehicle, obviously on the edge the mad 277 00:13:11,720 --> 00:13:14,920 Speaker 9: Max design. But I think this is gonna be successful, 278 00:13:14,960 --> 00:13:17,000 Speaker 9: and I think book people like Miller they're gonna be 279 00:13:17,080 --> 00:13:18,400 Speaker 9: driving us around New York. 280 00:13:18,720 --> 00:13:21,000 Speaker 6: Wow, Matt, I hope you're listening in to hear that one. 281 00:13:21,080 --> 00:13:22,440 Speaker 4: He's not gonna get his way to sign off on this. 282 00:13:22,520 --> 00:13:25,439 Speaker 2: He's got the challenger with the scat pack. 283 00:13:25,480 --> 00:13:25,920 Speaker 4: That's enough. 284 00:13:25,920 --> 00:13:26,040 Speaker 10: One. 285 00:13:26,080 --> 00:13:27,480 Speaker 6: Well, we're gonna have to see if it can strap 286 00:13:27,480 --> 00:13:30,560 Speaker 6: in a baby counter in the back, so that would 287 00:13:30,600 --> 00:13:33,000 Speaker 6: be the most important for him. Right now, Dan, tell 288 00:13:33,080 --> 00:13:34,760 Speaker 6: us of what you're so you think this is gonna 289 00:13:34,760 --> 00:13:37,040 Speaker 6: be successful. I'll tell us a little bit about some 290 00:13:37,080 --> 00:13:40,040 Speaker 6: of the projections you've run and just how you know 291 00:13:40,080 --> 00:13:42,079 Speaker 6: breaks down the numbers for us in terms of how 292 00:13:42,120 --> 00:13:43,480 Speaker 6: this is going to play out for Tesla. 293 00:13:44,240 --> 00:13:46,840 Speaker 9: Look, the important thing today is about pricing, because that's 294 00:13:47,200 --> 00:13:50,880 Speaker 9: that's really the unknown we think pricing is probably sweet 295 00:13:50,880 --> 00:13:54,160 Speaker 9: spot sixty to seventy K, and that's important. You'll also 296 00:13:54,200 --> 00:13:59,280 Speaker 9: get tax credit there at that level at scale two 297 00:13:59,360 --> 00:14:01,600 Speaker 9: to two and five two thousand per year. As we 298 00:14:01,640 --> 00:14:04,800 Speaker 9: get into twenty twenty five. In terms of units now 299 00:14:05,040 --> 00:14:07,959 Speaker 9: coming out, this is gonna be complex to build. It's 300 00:14:08,000 --> 00:14:10,280 Speaker 9: all gonna be built out of Austin. That's where the 301 00:14:10,400 --> 00:14:13,880 Speaker 9: launch will be today. But this is important because it 302 00:14:13,920 --> 00:14:15,559 Speaker 9: goes back to you know, something we've talked about in 303 00:14:15,600 --> 00:14:19,280 Speaker 9: the show. Lout is a refresh. There's just more categories. 304 00:14:19,600 --> 00:14:23,120 Speaker 9: It's part of the Hello effect. Contrast at GM four 305 00:14:23,280 --> 00:14:26,640 Speaker 9: pulling back a little on evs, yet test A Musk 306 00:14:26,800 --> 00:14:27,960 Speaker 9: actually doubled down. 307 00:14:28,840 --> 00:14:31,920 Speaker 2: So I think Elon himself has even said Dan that 308 00:14:32,200 --> 00:14:34,440 Speaker 2: this kind of thing is, I guess in his opinion, 309 00:14:34,800 --> 00:14:38,040 Speaker 2: kind of a profitability disaster production disaster. It's so hard. 310 00:14:38,880 --> 00:14:40,840 Speaker 2: Can you make any money on this truck? Is there 311 00:14:40,840 --> 00:14:42,800 Speaker 2: any profitability in this truck? 312 00:14:43,760 --> 00:14:46,400 Speaker 9: Yeah, Paul, first twelve to eighteen months, no, I mean 313 00:14:46,440 --> 00:14:49,680 Speaker 9: they'll essentially lose money, will be cash on negative. But 314 00:14:49,800 --> 00:14:53,080 Speaker 9: as you get into twenty twenty five, it actually could 315 00:14:53,160 --> 00:14:57,440 Speaker 9: be pretty significant in terms of the accretive level. As 316 00:14:57,480 --> 00:15:01,120 Speaker 9: it all plays out at scale now two thousand units. 317 00:15:01,200 --> 00:15:04,600 Speaker 9: We think that's pily max twenty twenty four, probably about 318 00:15:04,640 --> 00:15:07,840 Speaker 9: forty thousand in terms of what they ultimately deliver. But 319 00:15:07,960 --> 00:15:10,400 Speaker 9: this is all about next two to three years. It's 320 00:15:10,440 --> 00:15:13,640 Speaker 9: given them their other growth vehicle, and I think this 321 00:15:13,680 --> 00:15:16,520 Speaker 9: is really the start of just the next fees of 322 00:15:16,600 --> 00:15:19,960 Speaker 9: the Tesla growth story. This is four years in the making. 323 00:15:20,040 --> 00:15:22,400 Speaker 9: In terms of today's launch, Dan tell. 324 00:15:22,320 --> 00:15:25,600 Speaker 6: Us a little bit more about the competition that the 325 00:15:25,640 --> 00:15:28,760 Speaker 6: cyber truck is going to be stacked up against. You think, 326 00:15:28,800 --> 00:15:31,880 Speaker 6: you know the Ford, you know F series, particularly the 327 00:15:31,960 --> 00:15:34,120 Speaker 6: F one fifty or that's the best side truck in America, 328 00:15:34,240 --> 00:15:37,400 Speaker 6: is a little bit fifty lightning. Yeah, so the electric 329 00:15:37,440 --> 00:15:40,520 Speaker 6: one there, sure, and then you've got the Ram, the Shelvy, 330 00:15:41,040 --> 00:15:43,720 Speaker 6: the Chevy Silverado. I mean, how is this. How's the 331 00:15:43,760 --> 00:15:45,840 Speaker 6: cyber truck you think going to stack up against those? 332 00:15:46,800 --> 00:15:50,040 Speaker 9: Well, F one fifty, I mean, that's that's the target 333 00:15:50,080 --> 00:15:51,800 Speaker 9: on the back. I mean, they're really trying to go 334 00:15:51,920 --> 00:15:55,520 Speaker 9: for some sort of churn there. You look what Rithan's done. 335 00:15:55,760 --> 00:15:58,040 Speaker 9: The success now, they've had a lot of difficulty in 336 00:15:58,120 --> 00:16:01,080 Speaker 9: terms of building it out. In terms of success from 337 00:16:01,120 --> 00:16:04,400 Speaker 9: a demand perspective, you look at that opportunity, you look 338 00:16:04,400 --> 00:16:07,320 Speaker 9: at what received coming at a GM. Look, this is 339 00:16:07,360 --> 00:16:11,040 Speaker 9: really creating a new category. But it's par the hello fact. 340 00:16:11,120 --> 00:16:14,280 Speaker 9: And I think the difference today four or five years ago, 341 00:16:14,720 --> 00:16:17,800 Speaker 9: everyone kind of viewed it as Okay, Tesla, they're not 342 00:16:17,840 --> 00:16:23,680 Speaker 9: gonna be successful. Today there's not an auto manufacturer executive 343 00:16:23,680 --> 00:16:26,480 Speaker 9: around the world that won't be watching the event because 344 00:16:27,080 --> 00:16:30,240 Speaker 9: you can no longer just say that it's not gonna 345 00:16:30,280 --> 00:16:33,200 Speaker 9: be relevant. It's actually the opposite in terms of their 346 00:16:33,400 --> 00:16:36,880 Speaker 9: leading in terms of really innovation technology. 347 00:16:37,480 --> 00:16:39,520 Speaker 2: Hey, Dan, when when you speak with the folks at Tesla, 348 00:16:39,640 --> 00:16:43,160 Speaker 2: when you also speak to the other auto manufacturers, what 349 00:16:43,200 --> 00:16:46,600 Speaker 2: are they what's the thinking today about maybe the ultimate 350 00:16:46,680 --> 00:16:50,360 Speaker 2: demand curve for evs over the next five years. It 351 00:16:50,440 --> 00:16:53,560 Speaker 2: seems to have lost a little enthusiasm out there. 352 00:16:54,400 --> 00:16:57,000 Speaker 9: Yeah, I mean, look, I think it's no secret you've 353 00:16:57,040 --> 00:17:02,600 Speaker 9: definitely seen a moderation. But I think the view among 354 00:17:02,680 --> 00:17:05,240 Speaker 9: many in the industry is, Okay, let's say it doesn't 355 00:17:05,240 --> 00:17:07,720 Speaker 9: go to fifty to sixty percent penetration. Let's say it 356 00:17:07,760 --> 00:17:11,960 Speaker 9: goes to thirty forty percent penetration next five six years. 357 00:17:12,200 --> 00:17:16,520 Speaker 9: That's two trillion in terms of the amount of ultimately 358 00:17:16,640 --> 00:17:20,199 Speaker 9: opportunity out there in terms of electric vehicles, So you 359 00:17:20,320 --> 00:17:24,000 Speaker 9: continue to see aggressive push towards this. I think the 360 00:17:24,040 --> 00:17:27,440 Speaker 9: big thing it's price discovery. You're not gonna have eighty 361 00:17:27,560 --> 00:17:29,879 Speaker 9: ninety thousand. You need to be in that sweet spot 362 00:17:30,040 --> 00:17:32,879 Speaker 9: forty to fifty k. And that's what we're seeing in 363 00:17:32,920 --> 00:17:36,040 Speaker 9: terms of that price war that's played out well known 364 00:17:36,080 --> 00:17:39,639 Speaker 9: in terms of what's happening in China. It's really price discovery. 365 00:17:40,119 --> 00:17:43,600 Speaker 9: But finally we're seeing some sort of supply demand equilibrium. 366 00:17:43,920 --> 00:17:46,800 Speaker 9: But I don't really see a pulling back GM four 367 00:17:47,040 --> 00:17:50,760 Speaker 9: that's essentially UAW that really forced that hand to pull 368 00:17:50,840 --> 00:17:52,480 Speaker 9: back a little in terms of spending. 369 00:17:52,960 --> 00:17:55,399 Speaker 6: So speaking of the economics of this, this is a 370 00:17:55,440 --> 00:17:58,359 Speaker 6: tough time right now to be buying a car and 371 00:17:58,400 --> 00:18:01,080 Speaker 6: to be you know, persuaded and consumers that this is 372 00:18:01,119 --> 00:18:03,760 Speaker 6: the time to be getting really excited about that when 373 00:18:03,760 --> 00:18:05,920 Speaker 6: you have auto loan rates as high as they are. 374 00:18:06,080 --> 00:18:08,280 Speaker 6: I mean, certainly the holidays, you know, big time to 375 00:18:08,359 --> 00:18:11,240 Speaker 6: roll out a lot of incentives on price and maybe 376 00:18:11,760 --> 00:18:14,840 Speaker 6: rates if you can. But what exactly is the pitch 377 00:18:14,920 --> 00:18:17,919 Speaker 6: right now to like financially that people might be getting 378 00:18:17,960 --> 00:18:18,880 Speaker 6: excited about this. 379 00:18:19,880 --> 00:18:22,639 Speaker 9: Well, the big thing too is tax credit. Tonight' expect 380 00:18:22,640 --> 00:18:25,439 Speaker 9: some more tax credit incentives as we go into twenty 381 00:18:25,480 --> 00:18:29,760 Speaker 9: four from Biden administration, because that's a key point. If 382 00:18:29,800 --> 00:18:34,199 Speaker 9: you go back historically what's called seventy eighty thousand, Now 383 00:18:34,240 --> 00:18:37,000 Speaker 9: you're getting some of these ed vehicles, especially for Tessa 384 00:18:37,240 --> 00:18:40,280 Speaker 9: Why and others thirty five forty thousand. When it's all 385 00:18:40,320 --> 00:18:44,119 Speaker 9: said and done here, you're going to have incentives. But 386 00:18:44,480 --> 00:18:46,920 Speaker 9: no doubt because what we've seen from a rising rate 387 00:18:47,000 --> 00:18:49,919 Speaker 9: environment that's been a huge headwind that does start to 388 00:18:49,960 --> 00:18:53,520 Speaker 9: reverse in twenty four. That's why the comms get easier 389 00:18:53,520 --> 00:18:56,600 Speaker 9: in twenty four. And I do believe we are still 390 00:18:56,640 --> 00:18:58,919 Speaker 9: going into what I view as a golden age pro 391 00:18:59,040 --> 00:19:02,080 Speaker 9: electric vehicle and I think that's why it's important today 392 00:19:02,480 --> 00:19:06,240 Speaker 9: for this event pricing. It's really gonna be a flext 393 00:19:06,400 --> 00:19:08,280 Speaker 9: muscles event from Musk and Tesla. 394 00:19:09,040 --> 00:19:09,720 Speaker 4: Uh Dan. 395 00:19:10,160 --> 00:19:13,320 Speaker 2: The stock Tesla's up ninety seven percent year to date, 396 00:19:14,280 --> 00:19:16,879 Speaker 2: clawing its way back to its all time high that 397 00:19:16,920 --> 00:19:20,040 Speaker 2: had a couple of years ago. You've been I would argue, 398 00:19:20,080 --> 00:19:22,960 Speaker 2: one of the biggest bulls on Tesla, on EV's in general, 399 00:19:23,000 --> 00:19:26,080 Speaker 2: and then by extension Elon Musk. How frustrating is it 400 00:19:26,080 --> 00:19:30,280 Speaker 2: for you to see yesterday, for example, another situation where 401 00:19:30,280 --> 00:19:33,200 Speaker 2: Elon Musk really comes into the news in not necessarily 402 00:19:33,240 --> 00:19:35,440 Speaker 2: a good way on a company that's not even related 403 00:19:35,440 --> 00:19:37,320 Speaker 2: to Tesla. How do you how do you and investors 404 00:19:37,359 --> 00:19:40,159 Speaker 2: kind of deal with the Elon Musk risk factor? 405 00:19:40,800 --> 00:19:43,400 Speaker 9: Yeah, it's part of that spider web. I mean, even 406 00:19:43,400 --> 00:19:45,800 Speaker 9: what we saw over AX and obviously you know he 407 00:19:45,880 --> 00:19:48,080 Speaker 9: went to Israel in terms of the trip, and then 408 00:19:48,400 --> 00:19:51,480 Speaker 9: if you look at the interview yesterday, I mean clearly 409 00:19:51,520 --> 00:19:55,119 Speaker 9: there's no gonna be no champagne dinner between Musk and 410 00:19:55,160 --> 00:19:59,639 Speaker 9: Eiger anytime soon. I do think relative to Tesla it 411 00:19:59,720 --> 00:20:02,199 Speaker 9: is a bit contained relative to any sort of like 412 00:20:02,280 --> 00:20:05,440 Speaker 9: brand teroration. But as we talked about, I mean, Musk 413 00:20:05,520 --> 00:20:07,119 Speaker 9: is Musk. He's gonna go to the beat of a 414 00:20:07,119 --> 00:20:12,040 Speaker 9: different drum. That's that's why you have the loyalist. But 415 00:20:12,040 --> 00:20:15,040 Speaker 9: then of course the heaters as well, and that's just 416 00:20:15,119 --> 00:20:17,639 Speaker 9: I think it's more accepted to some extent from a 417 00:20:17,720 --> 00:20:23,120 Speaker 9: Tessa perspective, But no doubt it's a fine balance between 418 00:20:23,160 --> 00:20:26,880 Speaker 9: from a brand issue or any short of deterioration. Right now, 419 00:20:26,880 --> 00:20:31,240 Speaker 9: it's contained, but it's not what you want to see yesterday. Ultimately, 420 00:20:31,359 --> 00:20:32,760 Speaker 9: as a as a Tesla holder. 421 00:20:33,280 --> 00:20:34,960 Speaker 2: All right, Dan, thanks so much for joining us as 422 00:20:35,000 --> 00:20:39,280 Speaker 2: always really appreciated. Dan Ives, Managing Director, Senior Equity Analyst 423 00:20:39,280 --> 00:20:43,120 Speaker 2: at Wedbush Securities. A rabid Penn State nitle Lion fan. 424 00:20:43,680 --> 00:20:45,960 Speaker 2: We're waiting to see which Bowl game the Penn State 425 00:20:46,040 --> 00:20:46,480 Speaker 2: will go to. 426 00:20:46,920 --> 00:20:50,040 Speaker 7: You're listening to the tape Can's a line program Bloomberg 427 00:20:50,080 --> 00:20:53,679 Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the 428 00:20:53,760 --> 00:20:56,960 Speaker 7: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 429 00:20:57,000 --> 00:20:59,760 Speaker 7: You can also listen live on Amazon Alexa from our 430 00:20:59,760 --> 00:21:04,240 Speaker 7: FLO New York station just say Alexa playing Bloomberg eleven thirty. 431 00:21:06,000 --> 00:21:08,160 Speaker 2: Let's get to our next guest, Commercial real estate. Let's 432 00:21:08,160 --> 00:21:11,000 Speaker 2: talk to Scott Kelly, founder and CEO of ATOS Capital 433 00:21:11,080 --> 00:21:13,280 Speaker 2: or real Estate. He joins his life here in our 434 00:21:13,280 --> 00:21:16,920 Speaker 2: Bloomberg Interactive Broker studio. Scott, thanks and welcome to Bloomberg. 435 00:21:17,680 --> 00:21:20,679 Speaker 2: Talk to us about commercial real estate. It is on 436 00:21:20,760 --> 00:21:24,560 Speaker 2: everybody's mind, from anybody who thinks about real estate, commercial 437 00:21:24,640 --> 00:21:27,680 Speaker 2: real estate, to invest in banks that have finance commercial 438 00:21:27,720 --> 00:21:29,320 Speaker 2: real estate, to everybody else involved. 439 00:21:29,320 --> 00:21:32,080 Speaker 4: An ecosystem. It is ugly out there. 440 00:21:32,600 --> 00:21:34,879 Speaker 2: Is it time to dip your toe in there and 441 00:21:34,880 --> 00:21:36,879 Speaker 2: start maybe buying some of these properties? 442 00:21:37,840 --> 00:21:40,879 Speaker 10: Well, I think I think it's uglier than even the 443 00:21:40,920 --> 00:21:43,720 Speaker 10: headline news would tell you because there's a confluence of 444 00:21:43,760 --> 00:21:47,520 Speaker 10: events which has really never happened before. First of all, 445 00:21:47,560 --> 00:21:52,400 Speaker 10: the level of commercial mortgage maturities over the next couple 446 00:21:52,400 --> 00:21:53,520 Speaker 10: of years is extraordinary. 447 00:21:53,560 --> 00:21:54,560 Speaker 8: It's like one point. 448 00:21:54,359 --> 00:21:59,280 Speaker 10: Five trillion dollars over the next couple of years. Second, 449 00:21:59,520 --> 00:22:02,440 Speaker 10: it's a sequical business. And whether it's a hard landing 450 00:22:02,520 --> 00:22:04,800 Speaker 10: or a soft landing, it's a landing. We're not in 451 00:22:04,840 --> 00:22:08,800 Speaker 10: a great part of the economic cycle. There are secular 452 00:22:09,280 --> 00:22:12,800 Speaker 10: trends that are really powerful, whether it's work from home, 453 00:22:12,920 --> 00:22:16,480 Speaker 10: shop from home, stay in an airbnb, move out of 454 00:22:16,480 --> 00:22:19,320 Speaker 10: big cities in the Northeast to the Sunbelt. I mean, 455 00:22:19,320 --> 00:22:24,760 Speaker 10: there are powerful secular trends which are influencing the performance 456 00:22:24,800 --> 00:22:28,560 Speaker 10: of different properties. And this interest rate spike has got 457 00:22:28,640 --> 00:22:33,760 Speaker 10: an enormous impact on what's essentially a leveraged business because 458 00:22:33,800 --> 00:22:37,399 Speaker 10: you want to leverage out a lot of the return 459 00:22:37,480 --> 00:22:39,879 Speaker 10: for the real estate to drive equities. And then then 460 00:22:39,880 --> 00:22:43,840 Speaker 10: I would say, lastly, the regulatory environment has changed. You know, 461 00:22:43,960 --> 00:22:47,640 Speaker 10: the for a long time during COVID, it was sort 462 00:22:47,640 --> 00:22:50,480 Speaker 10: of hands off, nobody foreclosed on anything. There was a 463 00:22:50,520 --> 00:22:54,160 Speaker 10: lot of leeway given to bar where. It's just because 464 00:22:54,960 --> 00:22:58,600 Speaker 10: that was the economic reality of things. That's changing as well. 465 00:22:58,640 --> 00:23:01,760 Speaker 10: So all those things put together on. 466 00:23:01,760 --> 00:23:02,760 Speaker 4: Anywhere near this space. 467 00:23:04,280 --> 00:23:06,119 Speaker 10: Well but but but there are going to be winners 468 00:23:06,119 --> 00:23:08,520 Speaker 10: and losers, you know, and and and I do think 469 00:23:08,560 --> 00:23:13,440 Speaker 10: it creates, like like every disaster, it creates great investment opportunities. 470 00:23:14,560 --> 00:23:17,760 Speaker 10: And you know, there are iconic buildings here in New 471 00:23:17,840 --> 00:23:19,720 Speaker 10: York that are just going to be fine. You know, 472 00:23:19,720 --> 00:23:22,440 Speaker 10: they're not gonna you don't want to seem going through 473 00:23:22,440 --> 00:23:24,560 Speaker 10: the roof, but they're going to be fine. And you 474 00:23:24,640 --> 00:23:28,280 Speaker 10: look at what office owners, as an example, have done. 475 00:23:28,920 --> 00:23:31,160 Speaker 10: We're over at the GM building a couple of weeks ago, 476 00:23:31,200 --> 00:23:33,480 Speaker 10: they put in the Savoy Club. You know, is really 477 00:23:33,480 --> 00:23:36,800 Speaker 10: an amenity to tenants. If you go to one Vanderbilt, 478 00:23:36,840 --> 00:23:40,200 Speaker 10: they've got you know, terrific restaurants and a Centurion club. 479 00:23:40,400 --> 00:23:43,280 Speaker 10: I mean, all of a sudden, you know, the owners 480 00:23:43,320 --> 00:23:46,080 Speaker 10: I think of these iconic buildings are able to put 481 00:23:46,119 --> 00:23:49,440 Speaker 10: things into keep tenants. The disaster I think is going 482 00:23:49,480 --> 00:23:53,200 Speaker 10: to be for the kind of B and C quality 483 00:23:53,840 --> 00:23:56,160 Speaker 10: properties which are going to have a very hard time 484 00:23:56,720 --> 00:23:57,760 Speaker 10: retaining tenants. 485 00:23:57,920 --> 00:23:59,600 Speaker 2: And this is an a property by the way, I 486 00:23:59,600 --> 00:24:01,240 Speaker 2: don't care who's talking about this is. 487 00:24:01,359 --> 00:24:01,639 Speaker 9: This is. 488 00:24:03,160 --> 00:24:06,760 Speaker 6: Will that right now would not be a HQ, not 489 00:24:06,840 --> 00:24:07,760 Speaker 6: going anywhere. 490 00:24:07,480 --> 00:24:09,440 Speaker 8: An AOK part of this scale. 491 00:24:09,560 --> 00:24:12,000 Speaker 11: So relative to those B and C properties, we had 492 00:24:12,080 --> 00:24:16,000 Speaker 11: Igle Namdar, president of non Dar Realty in not so 493 00:24:16,080 --> 00:24:18,879 Speaker 11: long ago, and of course his firm, he's best known 494 00:24:18,960 --> 00:24:21,200 Speaker 11: for being a big buyer of zombie malls and going 495 00:24:21,200 --> 00:24:23,400 Speaker 11: in at their the lowest price. He's sort of doing 496 00:24:23,440 --> 00:24:25,840 Speaker 11: the same playbook here in New York relative to the 497 00:24:26,119 --> 00:24:29,640 Speaker 11: office properties. Because of exactly what you're talking about now, 498 00:24:29,960 --> 00:24:33,640 Speaker 11: he was willing to put a value on the non 499 00:24:33,800 --> 00:24:35,879 Speaker 11: trophy properties, and he said, so, if you go to 500 00:24:35,920 --> 00:24:38,080 Speaker 11: a random building out here in Third Avenue, depending whether 501 00:24:38,119 --> 00:24:39,600 Speaker 11: it's in the middle of the block or a corner, 502 00:24:39,880 --> 00:24:42,320 Speaker 11: he said that it could go anywhere for twenty five 503 00:24:42,359 --> 00:24:44,040 Speaker 11: cents on the dollar or seventy five cents on the 504 00:24:44,080 --> 00:24:47,400 Speaker 11: dollar as for where it was before. Does that sound 505 00:24:47,440 --> 00:24:49,960 Speaker 11: extreme to you or does that match up to what 506 00:24:50,000 --> 00:24:51,520 Speaker 11: you're seeing as well? 507 00:24:51,760 --> 00:24:54,240 Speaker 10: No, it does not sound extreme to me at all. 508 00:24:54,359 --> 00:24:57,040 Speaker 10: I would say twenty five cents is more likely because 509 00:24:57,160 --> 00:25:00,880 Speaker 10: you have to understand what the property taxes that and 510 00:25:01,040 --> 00:25:05,280 Speaker 10: the and the operating expenses, particularly of you know, these 511 00:25:05,280 --> 00:25:09,679 Speaker 10: buildings in New York. You know, when rental rates drop, 512 00:25:09,840 --> 00:25:12,719 Speaker 10: you can have buildings that can't make any money. And 513 00:25:13,000 --> 00:25:16,320 Speaker 10: I think that's a realistic prospect for some of these 514 00:25:16,400 --> 00:25:19,720 Speaker 10: really bad buildings. So the question is how low is low? 515 00:25:19,920 --> 00:25:20,159 Speaker 8: You know? 516 00:25:20,320 --> 00:25:26,160 Speaker 6: And so you know, something I've talked to a lot 517 00:25:26,200 --> 00:25:29,040 Speaker 6: on this show here, Scott is I've been on this 518 00:25:29,160 --> 00:25:31,720 Speaker 6: journey to buy an apartment in New York, provided for 519 00:25:32,200 --> 00:25:35,919 Speaker 6: great newsworthy content for the show, as well as some 520 00:25:36,000 --> 00:25:38,880 Speaker 6: stress in my own personal life. But something that has 521 00:25:38,920 --> 00:25:41,520 Speaker 6: come up in this latest apartment that I'm looking at 522 00:25:41,880 --> 00:25:45,760 Speaker 6: is that the commercial properties that are on the street 523 00:25:45,880 --> 00:25:50,479 Speaker 6: level are right now perhaps not renewing the leases. And 524 00:25:50,520 --> 00:25:53,840 Speaker 6: what that means then for the residential building above that 525 00:25:54,000 --> 00:25:57,040 Speaker 6: owns this whole building and the income that they rely 526 00:25:57,240 --> 00:26:00,240 Speaker 6: upon from these commercial tenants. So is that some thing 527 00:26:00,359 --> 00:26:02,880 Speaker 6: that you're seeing as well, that like this distress in 528 00:26:03,040 --> 00:26:06,760 Speaker 6: the commercial sector perhaps could have bigger implications for the 529 00:26:06,800 --> 00:26:09,560 Speaker 6: real the residential side, which of course has a number 530 00:26:09,560 --> 00:26:11,200 Speaker 6: of problems of its own right now. 531 00:26:11,280 --> 00:26:15,480 Speaker 10: Right, well, yes, And I think the issue is the 532 00:26:15,520 --> 00:26:18,760 Speaker 10: whole ecosystem has to work. Right if if there aren't 533 00:26:18,760 --> 00:26:21,879 Speaker 10: people in the office buildings, the guys selling sandwiches on 534 00:26:21,960 --> 00:26:24,439 Speaker 10: the first floor are going out of business. You know, 535 00:26:24,480 --> 00:26:29,360 Speaker 10: if the tenants aren't in residential you know, buildings, it's 536 00:26:29,600 --> 00:26:32,639 Speaker 10: very difficult for the for the ground floor tenants to 537 00:26:32,840 --> 00:26:35,800 Speaker 10: be a dry cleaner, be a you know, whatever that 538 00:26:36,680 --> 00:26:37,760 Speaker 10: services the tenants. 539 00:26:38,000 --> 00:26:39,760 Speaker 8: I think the big issue. 540 00:26:40,840 --> 00:26:44,399 Speaker 10: That that people don't talk enough about, which has to 541 00:26:44,440 --> 00:26:47,760 Speaker 10: be confronted, is it's going to take a long time 542 00:26:47,800 --> 00:26:50,040 Speaker 10: to work this out, and it's got to be a 543 00:26:50,080 --> 00:26:55,240 Speaker 10: cooperation between government and the property owners and because people 544 00:26:55,280 --> 00:26:58,119 Speaker 10: are going to need a break on property taxes, on 545 00:26:58,680 --> 00:27:03,160 Speaker 10: you know, on zoning regulations and all that sort of thing. 546 00:27:03,280 --> 00:27:07,320 Speaker 10: And you know, unfortunately, good public policy which would say 547 00:27:07,359 --> 00:27:11,520 Speaker 10: get these buildings up and running tend to be bad 548 00:27:11,640 --> 00:27:14,560 Speaker 10: politics because you're, you know, kind of giving money to 549 00:27:14,600 --> 00:27:17,399 Speaker 10: people that are viewed as being wealthy and don't need it. 550 00:27:17,720 --> 00:27:18,639 Speaker 8: That's not the case. 551 00:27:18,760 --> 00:27:21,840 Speaker 10: I mean the cities, I think in New York's one example, 552 00:27:21,840 --> 00:27:23,640 Speaker 10: but I think you can talk about it in San 553 00:27:23,640 --> 00:27:26,520 Speaker 10: Francisco and Chicago and in place South. If you don't 554 00:27:26,560 --> 00:27:31,119 Speaker 10: have a vibrant real estate market, the tax base is 555 00:27:31,200 --> 00:27:34,440 Speaker 10: just going to erode in the cities, and so it's 556 00:27:34,480 --> 00:27:40,840 Speaker 10: going to take a thoughtful, you know, public policy approach 557 00:27:41,080 --> 00:27:44,040 Speaker 10: to moving some of this office space to residential and 558 00:27:44,080 --> 00:27:46,680 Speaker 10: other things, you know. And that's New York's big problem, 559 00:27:46,760 --> 00:27:49,199 Speaker 10: right It's there's way too much office and there's too 560 00:27:49,240 --> 00:27:50,679 Speaker 10: little residential, and so it's. 561 00:27:50,520 --> 00:27:52,359 Speaker 8: Incredibly expected to resone it. 562 00:27:52,440 --> 00:27:55,840 Speaker 10: Well and resonte You've got to rezone it. You've got 563 00:27:55,840 --> 00:27:59,960 Speaker 10: to give incentives to make those changes. And frankly, a 564 00:28:00,119 --> 00:28:03,720 Speaker 10: lot of those kind of seventies style office buildings are 565 00:28:03,800 --> 00:28:10,000 Speaker 10: not you know, particularly able to be renovated into residential. 566 00:28:10,960 --> 00:28:14,640 Speaker 10: We did, the company that we're partnered with for our 567 00:28:14,680 --> 00:28:18,960 Speaker 10: domestic effort here did a redevelopment of an office building 568 00:28:19,119 --> 00:28:23,720 Speaker 10: in Washington into residential and it's worked out beautifully. But 569 00:28:24,320 --> 00:28:27,480 Speaker 10: those opportunities are it takes a lot of expertise and 570 00:28:27,560 --> 00:28:30,560 Speaker 10: a lot of you know, help with the government and 571 00:28:30,640 --> 00:28:32,000 Speaker 10: patience to get it done. 572 00:28:32,520 --> 00:28:36,000 Speaker 11: So switching gears just a little bit, Scott. You know, 573 00:28:36,280 --> 00:28:40,000 Speaker 11: we've been talking to about this epic opportunity in office 574 00:28:40,080 --> 00:28:44,080 Speaker 11: distressed office here in the US but your real wheelhouse 575 00:28:44,160 --> 00:28:45,920 Speaker 11: over the last twenty years, although I should add you 576 00:28:46,000 --> 00:28:48,040 Speaker 11: were one of the big mds at Morgan Stanley back 577 00:28:48,080 --> 00:28:50,960 Speaker 11: in the day, so your wheelhouse is real estate period. 578 00:28:51,080 --> 00:28:53,400 Speaker 11: You have just such a broad base of knowledge. But 579 00:28:53,680 --> 00:28:56,680 Speaker 11: you've done a tremendous amount of investing in China and 580 00:28:56,760 --> 00:29:00,960 Speaker 11: in Asia. You were in China, I believe, in September, 581 00:29:01,080 --> 00:29:05,440 Speaker 11: and you told me privately that it's worse, similar to 582 00:29:05,480 --> 00:29:07,360 Speaker 11: what you're saying about the US, that it's worse than 583 00:29:07,360 --> 00:29:09,120 Speaker 11: what's being reported. So talk to us a little bit 584 00:29:09,160 --> 00:29:12,040 Speaker 11: about China and does that seep into the global economy? 585 00:29:12,080 --> 00:29:14,000 Speaker 11: Does that seep into the US? And when do we 586 00:29:14,040 --> 00:29:15,120 Speaker 11: hear those headlines more so? 587 00:29:15,160 --> 00:29:18,040 Speaker 10: Again, well, I think you're starting to see them now. 588 00:29:18,120 --> 00:29:22,040 Speaker 10: I mean the Chinese property companies. And again, we ran 589 00:29:22,280 --> 00:29:26,520 Speaker 10: a series of private equity funds. Most of our investing 590 00:29:26,560 --> 00:29:28,640 Speaker 10: in Asia, we've been at it for twenty two years. 591 00:29:28,920 --> 00:29:31,520 Speaker 10: Most has been in Japan, but we did put six 592 00:29:31,600 --> 00:29:35,680 Speaker 10: hundred million of equity into China in a variety of 593 00:29:36,760 --> 00:29:41,280 Speaker 10: basically joint ventures. Residents are joint ventures to build condominiums 594 00:29:41,320 --> 00:29:43,680 Speaker 10: to sell, and we all remember the lines around the 595 00:29:43,680 --> 00:29:46,600 Speaker 10: block of people wanting to buy these things. There are 596 00:29:46,600 --> 00:29:50,640 Speaker 10: no lines there today. But the issue with these you know, 597 00:29:50,680 --> 00:29:55,760 Speaker 10: this capitalism stuff's a little bit tricky, and these Chinese 598 00:29:55,840 --> 00:30:01,880 Speaker 10: property companies have gotten themselves run aground with terrible capital structures. 599 00:30:01,880 --> 00:30:04,880 Speaker 10: And when I say that they've got they've got like 600 00:30:04,960 --> 00:30:10,400 Speaker 10: five different branches of creditors. First are people that were 601 00:30:10,400 --> 00:30:14,440 Speaker 10: buying condominiums that weren't delivered. Second were the construction lenders. 602 00:30:14,680 --> 00:30:17,200 Speaker 10: When that dried up, they then borrowed money from sort 603 00:30:17,240 --> 00:30:20,200 Speaker 10: of private funds that were raised in China. Then they 604 00:30:20,240 --> 00:30:22,440 Speaker 10: went public in Hong Kong, and then they did high 605 00:30:22,520 --> 00:30:26,080 Speaker 10: yield you know, bonds in Hong Kong. So I mean, 606 00:30:26,120 --> 00:30:29,360 Speaker 10: it's a big, big problem, and the Chinese government can 607 00:30:29,400 --> 00:30:32,360 Speaker 10: fix it. It's gonna take a lot of money, and 608 00:30:32,400 --> 00:30:34,360 Speaker 10: it's gonna take a lot of expertise. You know, there's 609 00:30:34,400 --> 00:30:37,600 Speaker 10: no Hank Paulson over there to say, give me a bazukah. 610 00:30:37,600 --> 00:30:39,280 Speaker 8: I don't necessarily need to use it. 611 00:30:39,320 --> 00:30:42,040 Speaker 11: But she is pretty much indicated that he's not willing 612 00:30:42,120 --> 00:30:44,320 Speaker 11: or he's not interested in saving. So what would what 613 00:30:44,320 --> 00:30:46,400 Speaker 11: would force his hand in putting in terms of putting 614 00:30:46,440 --> 00:30:47,640 Speaker 11: that money into the market. 615 00:30:47,840 --> 00:30:49,560 Speaker 10: I think it's a I think it's a guns and 616 00:30:49,600 --> 00:30:52,600 Speaker 10: butter issue. You know what, there's only so much money. 617 00:30:52,640 --> 00:30:53,320 Speaker 10: What are you going to do? 618 00:30:53,440 --> 00:30:54,560 Speaker 8: You know, what are you going to do with it? 619 00:30:54,720 --> 00:30:57,280 Speaker 10: And I think civil unrest is the thing that they're 620 00:30:57,320 --> 00:30:58,400 Speaker 10: really worried about. 621 00:30:58,240 --> 00:30:59,600 Speaker 11: And we've seen some pictures of that. 622 00:31:00,320 --> 00:31:02,200 Speaker 2: Hey, Scott, thanks so much for joining us. Really appreciate 623 00:31:02,200 --> 00:31:04,920 Speaker 2: you coming into our studio. Scott Kelly, founder and CEO 624 00:31:04,960 --> 00:31:08,520 Speaker 2: of Atos Capital Real Estate, historically has been investing, as 625 00:31:08,760 --> 00:31:12,320 Speaker 2: Scott mentioned, in Asia, mostly Japan, but also maybe take 626 00:31:12,320 --> 00:31:14,880 Speaker 2: a look here at the US. And to me, it's 627 00:31:14,920 --> 00:31:17,120 Speaker 2: the lipstick building on Third Avenue. When I see something 628 00:31:17,360 --> 00:31:19,280 Speaker 2: like that trade, I can't wait to see what the 629 00:31:19,280 --> 00:31:21,560 Speaker 2: evaluation is. It could be a big, big haircut. 630 00:31:22,400 --> 00:31:26,040 Speaker 7: You're listening to the tape Cansur Live program Bloomberg Markets 631 00:31:26,080 --> 00:31:29,480 Speaker 7: weekdays at ten am Eastern on Bloomberg Radio, the tune 632 00:31:29,520 --> 00:31:32,480 Speaker 7: in app, Bloomberg dot Com, and the Bloomberg Business App. 633 00:31:32,520 --> 00:31:35,320 Speaker 7: You can also listen live on Amazon Alexa from our 634 00:31:35,360 --> 00:31:39,360 Speaker 7: flagship New York station Just Say Alexa, playing Bloomberg eleven 635 00:31:39,440 --> 00:31:41,920 Speaker 7: thirty sub Topa. 636 00:31:42,000 --> 00:31:44,320 Speaker 4: Marty joins us. She's a Chief Technology Officer Whipro. 637 00:31:44,360 --> 00:31:47,560 Speaker 2: Whipro's a publicly traded company New York Stock Exchange w 638 00:31:47,840 --> 00:31:50,800 Speaker 2: IT is the ticker twenty five point two billion dollar 639 00:31:50,840 --> 00:31:53,600 Speaker 2: market cap stocks a year to date up about three 640 00:31:53,600 --> 00:31:57,200 Speaker 2: point eight percent, So that's good news there. So, but 641 00:31:57,320 --> 00:32:01,920 Speaker 2: thanks so much for joining us here. Software Company Artificial Intelligence. 642 00:32:01,920 --> 00:32:04,640 Speaker 2: Ge tell us kind of where your company fits in 643 00:32:04,680 --> 00:32:05,280 Speaker 2: the tech stack. 644 00:32:05,320 --> 00:32:09,160 Speaker 4: What do you guys do it? Whippro So, we are. 645 00:32:09,080 --> 00:32:13,520 Speaker 12: A technology services provider and we serve fourteen hundred customers 646 00:32:13,520 --> 00:32:17,720 Speaker 12: across twenty five plus verticals across the globe. We are 647 00:32:19,360 --> 00:32:24,400 Speaker 12: anywhere from managing cloud and infrastructure migrations to managing full 648 00:32:24,680 --> 00:32:30,960 Speaker 12: cloud stack, to application development, to tech support, to consulting 649 00:32:31,560 --> 00:32:35,720 Speaker 12: and strategy consulting. So we are a full service firm 650 00:32:34,880 --> 00:32:37,800 Speaker 12: and I'm really excited to talk a little bit more 651 00:32:37,840 --> 00:32:40,880 Speaker 12: about what we're doing on Jenny I on the. 652 00:32:40,840 --> 00:32:41,320 Speaker 13: Show with you. 653 00:32:41,760 --> 00:32:43,600 Speaker 6: Yeah, tell us about that. I think you know, this 654 00:32:43,680 --> 00:32:47,200 Speaker 6: year it seemed like the biggest historian AI was well 655 00:32:47,320 --> 00:32:49,720 Speaker 6: Chat GPT, and now it's going on with open AI 656 00:32:49,840 --> 00:32:52,120 Speaker 6: and sam Almon. A bit of a different development there. 657 00:32:52,160 --> 00:32:55,240 Speaker 6: But tell us as far as far as investment opportunities 658 00:32:55,240 --> 00:32:57,520 Speaker 6: for AI, what we can expect to see in the 659 00:32:57,560 --> 00:32:57,920 Speaker 6: new year. 660 00:32:59,440 --> 00:33:01,760 Speaker 13: You know I see GENEI impacting. 661 00:33:02,560 --> 00:33:06,480 Speaker 12: It is going to impact every business and every vertical 662 00:33:06,480 --> 00:33:07,720 Speaker 12: and every technology stack. 663 00:33:07,800 --> 00:33:08,960 Speaker 13: And we know this already. 664 00:33:09,640 --> 00:33:12,120 Speaker 12: What is interesting is the categories. 665 00:33:11,560 --> 00:33:12,280 Speaker 13: That are emerging. 666 00:33:13,160 --> 00:33:19,360 Speaker 12: I would specifically put GENEI impact in four specific categories. 667 00:33:19,440 --> 00:33:23,440 Speaker 12: The first one is the entire SDLC process from software 668 00:33:23,480 --> 00:33:27,960 Speaker 12: development life cycle. Internally, we have we have been experimenting 669 00:33:28,000 --> 00:33:31,040 Speaker 12: with this technology for the last ten months and we 670 00:33:31,120 --> 00:33:35,320 Speaker 12: see twenty five to thirty percent productivity gains, you know, 671 00:33:35,560 --> 00:33:39,480 Speaker 12: from requirements to you know, testing to everything in between. 672 00:33:40,440 --> 00:33:44,320 Speaker 12: The second area which is emerging is around content generation. 673 00:33:45,240 --> 00:33:48,480 Speaker 12: I mean the idea that you're able to reduce how 674 00:33:48,560 --> 00:33:50,680 Speaker 12: much it takes, how much time it takes to create 675 00:33:50,760 --> 00:33:54,600 Speaker 12: content generate content is is quite fascinating and that's where 676 00:33:54,920 --> 00:33:57,959 Speaker 12: we see significant improvement in productivity gains. 677 00:33:58,480 --> 00:34:00,440 Speaker 13: The third area we see emerging. 678 00:34:00,120 --> 00:34:03,040 Speaker 12: Is this entire RPA two DOT or the entire idea 679 00:34:03,200 --> 00:34:06,600 Speaker 12: that in the past it was around automation, but now 680 00:34:06,600 --> 00:34:10,680 Speaker 12: it is mostly the new avatar or the reinvention of 681 00:34:12,000 --> 00:34:17,280 Speaker 12: business process optimizations through generative AI. And the last category, 682 00:34:17,320 --> 00:34:19,080 Speaker 12: the way I see it is right now, most of 683 00:34:19,160 --> 00:34:24,440 Speaker 12: us have experienced generative AI through large language models applying 684 00:34:24,440 --> 00:34:30,360 Speaker 12: the same architecture to other modalities other data's structured data, 685 00:34:30,880 --> 00:34:33,640 Speaker 12: which will then start to impact these various layers in 686 00:34:33,719 --> 00:34:37,200 Speaker 12: stack that I just referred to. I think becomes quite fascinating. 687 00:34:37,280 --> 00:34:40,000 Speaker 12: These are kind of the four trends I'm seeing beginning 688 00:34:40,000 --> 00:34:43,560 Speaker 12: to at least I'm seeing emerging, and the application of 689 00:34:43,600 --> 00:34:46,920 Speaker 12: these four areas will be fascinating and we'll see what 690 00:34:47,600 --> 00:34:49,760 Speaker 12: plays out in the next year, which will be very interesting. 691 00:34:50,320 --> 00:34:53,720 Speaker 2: So we've heard some numbers from a various technologists about 692 00:34:53,719 --> 00:34:58,759 Speaker 2: the spending associated on artificial intelligence on AI across the 693 00:34:58,840 --> 00:35:02,759 Speaker 2: whole range of industry. From your perspective, how much of 694 00:35:02,840 --> 00:35:07,080 Speaker 2: that spending, that AI specific spending is new incremental tech 695 00:35:07,120 --> 00:35:10,440 Speaker 2: spending or they simply maybe taking their spending from another 696 00:35:10,520 --> 00:35:13,560 Speaker 2: period period of their place in their tech budget. 697 00:35:14,200 --> 00:35:17,520 Speaker 12: See, most of our technologists, we don't get a lot 698 00:35:17,560 --> 00:35:20,480 Speaker 12: of budget. When I say that, I say that because 699 00:35:20,600 --> 00:35:24,359 Speaker 12: we are we are very much tied. Technology is tied 700 00:35:24,360 --> 00:35:26,719 Speaker 12: to have business outcomes. You know, it's top line growth 701 00:35:26,760 --> 00:35:32,320 Speaker 12: and bottom line optimizations and growth for us. I mostly 702 00:35:33,760 --> 00:35:36,279 Speaker 12: what we tend to do is start the RGB and 703 00:35:36,600 --> 00:35:39,160 Speaker 12: create the headroom, so to speak, and invest in new 704 00:35:39,200 --> 00:35:43,560 Speaker 12: areas and new technologies. The idea here is productivity gains. 705 00:35:43,600 --> 00:35:46,600 Speaker 12: The idea here is how can I run the business smarter, 706 00:35:46,920 --> 00:35:51,960 Speaker 12: more efficiently with better predictability so that I can generate 707 00:35:52,000 --> 00:35:54,839 Speaker 12: those business outcomes. And when I look at it from 708 00:35:54,880 --> 00:35:59,480 Speaker 12: that lens, it is quite quite interesting the question, because 709 00:35:59,480 --> 00:36:00,560 Speaker 12: the question self is an. 710 00:36:00,520 --> 00:36:01,200 Speaker 13: Answer, right. 711 00:36:01,280 --> 00:36:04,319 Speaker 12: I mean, you won't get you always have the same pie. 712 00:36:04,360 --> 00:36:06,320 Speaker 12: You'll just have to debat up in ways that that 713 00:36:07,000 --> 00:36:09,280 Speaker 12: that will add generate value for business. 714 00:36:10,760 --> 00:36:13,480 Speaker 6: When we're looking about AI, this is obviously such a 715 00:36:13,600 --> 00:36:17,360 Speaker 6: rapidly evolving space. I would love to hear suba some 716 00:36:17,440 --> 00:36:20,959 Speaker 6: of the biggest lessons and takeaways that you had from 717 00:36:21,160 --> 00:36:23,680 Speaker 6: twenty twenty three and how you're going to bring that 718 00:36:23,719 --> 00:36:24,680 Speaker 6: into the new year. 719 00:36:26,239 --> 00:36:27,719 Speaker 13: Specifically around Jenny I. 720 00:36:28,680 --> 00:36:32,600 Speaker 12: Our biggest learning has been that and it's been a 721 00:36:32,600 --> 00:36:38,759 Speaker 12: good learning, which is experiment fast and move fast. This 722 00:36:38,840 --> 00:36:43,880 Speaker 12: space is evolving rapidly. The number of technology startups that 723 00:36:43,920 --> 00:36:46,400 Speaker 12: we are investing at Whippro. We have venure arm and 724 00:36:46,440 --> 00:36:49,600 Speaker 12: we also do significant amount of work with startups because 725 00:36:49,640 --> 00:36:52,479 Speaker 12: that is how we create this robust ecosystem that will 726 00:36:52,520 --> 00:36:57,880 Speaker 12: then offer the right solutions for our customer problems. We 727 00:36:58,719 --> 00:37:03,239 Speaker 12: are we were very very rapid in terms of investments. 728 00:37:03,239 --> 00:37:07,480 Speaker 12: We announced a billion dollar investment for our firm in summer. 729 00:37:08,280 --> 00:37:09,360 Speaker 13: And the idea here. 730 00:37:09,280 --> 00:37:13,640 Speaker 12: Is you invest fast, fail fast, learn from it. And 731 00:37:13,880 --> 00:37:17,239 Speaker 12: what is fascinating to us is because of our investments 732 00:37:17,320 --> 00:37:21,320 Speaker 12: early on, patterns are beginning to emerge. We understand that middleware, 733 00:37:21,320 --> 00:37:23,200 Speaker 12: as an example, in this space, is going to be 734 00:37:23,239 --> 00:37:28,839 Speaker 12: an explosive opportunity in twenty four and twenty five. 735 00:37:29,840 --> 00:37:32,720 Speaker 13: It is a very evolving space. How what does a stack? 736 00:37:33,040 --> 00:37:35,160 Speaker 12: How what kind of stack would emerge out of gen 737 00:37:35,160 --> 00:37:39,920 Speaker 12: AIH the middle tier, middlewars are It's going to be fascinating. 738 00:37:40,200 --> 00:37:42,200 Speaker 12: There will be new startups and new companies born out 739 00:37:42,200 --> 00:37:46,520 Speaker 12: of it with rapid adoption. And those patterns have to 740 00:37:46,560 --> 00:37:48,440 Speaker 12: be recognized early on. And the only way you can 741 00:37:48,480 --> 00:37:53,000 Speaker 12: do that is by experimenting and failing fast and making 742 00:37:53,000 --> 00:37:56,080 Speaker 12: sure that you're able to invest at the right time. 743 00:37:57,040 --> 00:37:59,160 Speaker 2: So, but talk to us about the risk here associated 744 00:37:59,160 --> 00:38:03,840 Speaker 2: with AI. You know, whether it's just data security, privacy, 745 00:38:04,040 --> 00:38:04,760 Speaker 2: all those issues. 746 00:38:04,760 --> 00:38:06,480 Speaker 4: How do you guys think about that? 747 00:38:07,920 --> 00:38:08,160 Speaker 3: Now? 748 00:38:08,719 --> 00:38:11,279 Speaker 12: We are a very responsible company. In fact, the very 749 00:38:11,320 --> 00:38:14,160 Speaker 12: first tenant when we announce this investment is responsiblely I 750 00:38:14,239 --> 00:38:18,200 Speaker 12: framework and I see this as two sides of two 751 00:38:18,280 --> 00:38:25,319 Speaker 12: sort of a coin responsible and and innovation. I think 752 00:38:25,360 --> 00:38:27,840 Speaker 12: it's going to be interesting in the next few months 753 00:38:27,880 --> 00:38:30,200 Speaker 12: and years. And obviously we all heard about what the 754 00:38:30,280 --> 00:38:32,880 Speaker 12: US come and sign in terms of responsibili framework and 755 00:38:33,200 --> 00:38:37,399 Speaker 12: in terms of privacy and other other implications. I think 756 00:38:37,560 --> 00:38:41,640 Speaker 12: more regulations will emerge, but we specifically here we are 757 00:38:41,719 --> 00:38:45,160 Speaker 12: taking a proactive action, sort of proactive decision in terms 758 00:38:45,200 --> 00:38:49,560 Speaker 12: of how we want to develop, adopt, and productionalize, operationalize 759 00:38:50,400 --> 00:38:54,440 Speaker 12: GENEI based applications. I think this is going to be 760 00:38:54,760 --> 00:39:00,319 Speaker 12: more regulated into the future because it is I could 761 00:39:00,360 --> 00:39:04,160 Speaker 12: on data and privacy, for instance, what kind of data 762 00:39:04,200 --> 00:39:08,160 Speaker 12: sets was the model trained on? How what is water marking, 763 00:39:08,320 --> 00:39:11,360 Speaker 12: you know, how does it manifest itself? How do you 764 00:39:11,520 --> 00:39:15,360 Speaker 12: ensure that the output from gender to AI when water marked? 765 00:39:15,480 --> 00:39:22,360 Speaker 12: What are the commercial commercial ways of monetizing or sorry, basically, 766 00:39:22,520 --> 00:39:25,640 Speaker 12: how do you monetize? So all these patterns will begin 767 00:39:25,719 --> 00:39:28,239 Speaker 12: to emerge in the next three to six months, and 768 00:39:28,360 --> 00:39:30,759 Speaker 12: I feel that regulation is catching up in this case. 769 00:39:30,800 --> 00:39:32,600 Speaker 12: This is the first time I've seen regulation catching up 770 00:39:32,680 --> 00:39:35,840 Speaker 12: somewhat faster than in the past in other technologies, and 771 00:39:35,960 --> 00:39:38,640 Speaker 12: I think I think it'll it'll be interesting to see 772 00:39:38,800 --> 00:39:42,759 Speaker 12: how the industry then shifts to accommodate those regulations and. 773 00:39:44,480 --> 00:39:45,360 Speaker 13: Policy changes. 774 00:39:46,360 --> 00:39:49,359 Speaker 6: So last one here real quickly, Suba, so whippro really 775 00:39:49,360 --> 00:39:51,319 Speaker 6: big company. You guys have got two hundred and forty 776 00:39:51,360 --> 00:39:54,320 Speaker 6: five thousand employees based out of India. Tell us what 777 00:39:54,480 --> 00:39:56,359 Speaker 6: the AI adoption is like over there. 778 00:39:58,280 --> 00:40:00,360 Speaker 13: We are in AI first company. 779 00:40:00,760 --> 00:40:03,320 Speaker 12: We are bound to be air plus company because we 780 00:40:03,680 --> 00:40:06,279 Speaker 12: play in the technology space. You're right, two one ff 781 00:40:06,280 --> 00:40:09,920 Speaker 12: three thousand employees primarily based out of India, but also worldwide. 782 00:40:10,640 --> 00:40:13,800 Speaker 13: We are a global company and the very first. 783 00:40:13,640 --> 00:40:15,800 Speaker 12: Thing we ended up doing was to make sure that 784 00:40:16,880 --> 00:40:19,839 Speaker 12: we build our own internal Genera to AI platform from 785 00:40:19,920 --> 00:40:20,880 Speaker 12: various use cases. 786 00:40:21,880 --> 00:40:27,080 Speaker 13: We are slated to have all our two and fifty. 787 00:40:26,880 --> 00:40:29,600 Speaker 12: Thousand employees on the platform in the next couple of 788 00:40:29,760 --> 00:40:34,160 Speaker 12: months as we roll out various use cases. We're also 789 00:40:34,960 --> 00:40:39,520 Speaker 12: again very very acted in Genera DVII training, so we 790 00:40:39,600 --> 00:40:41,520 Speaker 12: have we are in the process of training all the 791 00:40:41,560 --> 00:40:44,520 Speaker 12: two and fifty thousand employees into in general and responsible AI. 792 00:40:44,719 --> 00:40:46,239 Speaker 4: Yes, all right, so, but thank you so much for 793 00:40:46,320 --> 00:40:47,879 Speaker 4: joining us. Really appreciate you taking the time. 794 00:40:47,960 --> 00:40:53,040 Speaker 2: Fascinating story, they're fascinating discussions subaut Tatavardi, chief technology officer 795 00:40:53,239 --> 00:40:54,120 Speaker 2: for whippro. 796 00:40:56,719 --> 00:40:59,759 Speaker 1: Thanks for listening to the Bloomberg Markets podcast. You can 797 00:41:00,000 --> 00:41:03,600 Speaker 1: subscribe and listen to interviews of Apple Podcasts or whatever 798 00:41:03,719 --> 00:41:07,360 Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 799 00:41:07,640 --> 00:41:09,520 Speaker 1: at Matt Miller nineteen seventy three. 800 00:41:10,040 --> 00:41:10,880 Speaker 4: And I'm Faull Sweeney. 801 00:41:10,920 --> 00:41:13,520 Speaker 2: I'm on Twitter at pt Sweeney. Before the podcast, you 802 00:41:13,560 --> 00:41:15,959 Speaker 2: can always catch us worldwide at Bloomberg Radio