WEBVTT - Bloomberg Businessweek Weekend - January 23rd, 2026 0:00:00.880 --> 0:00:05.199 This is Bloomberg Business Week Daily reporting from the magazine 0:00:05.240 --> 0:00:09.840 that helps global leaders stay ahead with insight on the people, companies, 0:00:09.880 --> 0:00:14.760 and trends shaping today's complex economy. Plus global business, finance 0:00:14.800 --> 0:00:18.759 and tech news as it happens. Bloomberg Business Weekdaily with 0:00:18.920 --> 0:00:23.079 Carol Masser and Tim Steneveek on Bloomberg Radio. 0:00:24.000 --> 0:00:26.880 Hi, everyone, welcome to the weekend edition of Bloomberg Business Week. 0:00:27.200 --> 0:00:30.280 This week, the spotlight was on the World Economic Forums 0:00:30.280 --> 0:00:33.720 Annual meeting in Davos, Switzerland, and a keynote given by 0:00:33.840 --> 0:00:35.440 US President Donald Trump. 0:00:35.680 --> 0:00:40.440 It's great to be back in beautiful Davos, Switzerland and 0:00:40.600 --> 0:00:44.680 to address so many respected business leaders, so many friends, 0:00:45.400 --> 0:00:46.159 few enemies. 0:00:46.840 --> 0:00:52.040 As you've learned, when the United States goes up, you follow. 0:00:52.440 --> 0:00:55.280 I want Europe to do great, I want UK to 0:00:55.360 --> 0:00:59.560 do great. We want strong allies, not seriously weakened ones. 0:01:00.000 --> 0:01:03.160 All right, That, of course was President Trump at Davos, Switzerland, 0:01:03.200 --> 0:01:05.840 the World Economic Forums Annual Meeting. Got to say the 0:01:05.880 --> 0:01:10.080 President tim grabbing a lot of global attention leading up 0:01:10.120 --> 0:01:15.360 to and at and after the meeting there in Davos 0:01:15.440 --> 0:01:19.120 because of renewed terwer threats on Europe and really reviving 0:01:19.160 --> 0:01:22.280 that idea of a US takeover of Greenland the outcome, 0:01:22.280 --> 0:01:23.240 and I got to say, there are a lot of 0:01:23.280 --> 0:01:25.960 twists and turns in this. No new tariffs on europe 0:01:26.280 --> 0:01:29.800 markets like that, and then a framework of a future 0:01:29.880 --> 0:01:34.360 deal that includes mineral rights we think in Greenland. It 0:01:34.360 --> 0:01:37.200 does still feel like a lot of details yet unknown 0:01:37.480 --> 0:01:40.480 and to be worked out. So stay tuned, check out 0:01:40.480 --> 0:01:42.720 the Bloomberg and Bloomberg dot com for the latest on this. 0:01:43.080 --> 0:01:45.840 So, just to reiterate a lot coming from the president 0:01:45.880 --> 0:01:48.840 flooding the zone as others have described, That's what Steve 0:01:48.840 --> 0:01:51.080 Bannon said during the first term is sort of the 0:01:51.120 --> 0:01:54.520 strategy when it comes to communications. Raising the question two 0:01:54.600 --> 0:01:57.760 once again about the logic behind the administration's decisions that 0:01:57.840 --> 0:02:00.480 are often pulled back. It's something that we seen quite 0:02:00.480 --> 0:02:03.080 a bit during President Trump's first full year back in 0:02:03.120 --> 0:02:07.240 the oval office, such that there's a term that has 0:02:07.880 --> 0:02:10.320 become popular. We've heard it a lot in the financial 0:02:10.360 --> 0:02:12.000 press and the financial media. I've heard a lot on 0:02:12.000 --> 0:02:15.760 Bloomberg the idea of the taco trade Trump always chickens out. 0:02:16.000 --> 0:02:19.160 Yeah, that definitely came back into the narrative this week. Hey, 0:02:19.200 --> 0:02:21.600 it also begs the question is there a method to 0:02:21.639 --> 0:02:24.040 what some might say is the madness in terms of 0:02:24.080 --> 0:02:27.720 logic and strategy of the Trump White House. One Nobel 0:02:27.760 --> 0:02:30.360 Prize winning economist looked into it and offers up a 0:02:30.440 --> 0:02:31.480 theory of Trump. 0:02:31.960 --> 0:02:35.960 Also, this hour arc invests Kathy Wood. She's giving us 0:02:36.000 --> 0:02:40.240 where last year's disruption may be creating this year's opportunities, 0:02:40.800 --> 0:02:44.120 and from the c suite, Charles Schwab's chief executive officer, 0:02:44.240 --> 0:02:47.560 Rick Worcester, stops by on everything from a record quarter 0:02:47.600 --> 0:02:50.760 and the White House's moves to opportunities that he sees 0:02:50.960 --> 0:02:51.920 in prediction. 0:02:51.639 --> 0:02:55.160 Markets or doesn't. Maybe he's got. 0:02:55.000 --> 0:02:57.960 A really interesting view, especially compared to the competitors out there. 0:02:58.000 --> 0:03:00.680 I thought it was really smart and detailed, So stick 0:03:00.720 --> 0:03:03.280 around for that. Hey, all of this to come over 0:03:03.320 --> 0:03:05.160 the next couple of hours. We begin with what some 0:03:05.240 --> 0:03:08.000 are calling the theory of Trump. We've entered year two 0:03:08.080 --> 0:03:11.160 of President Trumps second term, and for years his critics 0:03:11.160 --> 0:03:15.480 and supporters alike have described his politics as chaotic, impulsive 0:03:15.480 --> 0:03:17.880 tweets in the middle of the night, norm breaking decisions, 0:03:17.919 --> 0:03:20.720 and a governing style that often seems driven by instinct 0:03:21.040 --> 0:03:22.320 rather than ideology. 0:03:22.720 --> 0:03:25.000 But what if it isn't chaos at all. In a 0:03:25.040 --> 0:03:30.079 recent Bloomberg BusinessWeek story, drone Asamoglu, Institute Professor in the 0:03:30.120 --> 0:03:34.360 Department of Economics at the Massachusetts Institute of Technology, also 0:03:34.440 --> 0:03:38.120 a Nobel Laureate in economics, argues there is a unified 0:03:38.160 --> 0:03:42.400 theory behind Trump's actions, one rooted in leverage, disruption, and 0:03:42.440 --> 0:03:46.440 a willingness to weaken institutions in order to strengthen negotiating power. 0:03:46.920 --> 0:03:48.440 Darn joined us with more. 0:03:48.520 --> 0:03:49.560 You took a step back. 0:03:49.640 --> 0:03:52.360 You looked at this, and we're just trying to understand 0:03:53.200 --> 0:03:58.560 this NonStop White House news cycle. Is it about the 0:03:58.600 --> 0:04:01.600 president and his team controlling that news cycle? 0:04:01.760 --> 0:04:04.080 And this is what we all chase, you know? 0:04:04.600 --> 0:04:09.200 Is it something more significant beyond just kind of a 0:04:09.240 --> 0:04:13.040 flood the zone concept that we often associate with President 0:04:13.040 --> 0:04:14.440 Trump and his team. 0:04:14.880 --> 0:04:15.840 What did you come up with? 0:04:16.320 --> 0:04:18.560 Look, I mean, obviously there is a flood the zone 0:04:18.600 --> 0:04:26.000 element in there, and it looks chaotic, But in my mind, worryingly, 0:04:26.440 --> 0:04:28.719 there is a bit of a theory, which is that 0:04:28.839 --> 0:04:33.200 all of these actions are aimed at centralizing power in 0:04:33.279 --> 0:04:39.240 the hands of an executive presidency with fewer and weaker 0:04:39.400 --> 0:04:43.400 checks which come either from institutions or norms. So even 0:04:43.440 --> 0:04:47.839 the foreign actions are all about increasing domestic power. Even 0:04:48.080 --> 0:04:53.120 the sort of unconventional appointments are about weakening norms that 0:04:53.279 --> 0:04:56.760 control what the president can do and bringing in more 0:04:56.839 --> 0:05:01.360 loyalists that have now more for maneuver because all the 0:05:01.400 --> 0:05:06.839 norms that had guided US political dynamics have been broken. 0:05:07.800 --> 0:05:09.760 So you write that it would have been viewed as 0:05:09.839 --> 0:05:13.560 completely unacceptable for Bill Clinton, George W. Bush, or Barack 0:05:13.600 --> 0:05:17.120 Obama to ask his attorney general or the DOJ to 0:05:17.600 --> 0:05:20.159 go after enemies. It would also have been considered beyond 0:05:20.160 --> 0:05:22.600 the pale for a president to invoke what you describe 0:05:22.600 --> 0:05:25.680 as a poorly documented crime emergency as a pretext for 0:05:25.720 --> 0:05:29.520 sending the National Guard into US cities, or for a 0:05:29.560 --> 0:05:31.800 president to continue to be involved in his family business 0:05:31.800 --> 0:05:35.559 well in office. Why is it being viewed, at least 0:05:35.600 --> 0:05:40.039 by members of Congress Republicans in Congress as acceptable for 0:05:40.080 --> 0:05:41.520 President Trump to do these things. 0:05:42.960 --> 0:05:47.480 Well, you know, part of the reason why those actions 0:05:47.520 --> 0:05:50.120 would not have been taken in the past is because 0:05:50.160 --> 0:05:54.719 they go against norms. There weren't explicit laws that said 0:05:55.040 --> 0:05:59.960 these things, so it was part of an institutional equilibrium 0:06:00.080 --> 0:06:06.400 with norms of acceptance and backed up by other politicians 0:06:08.120 --> 0:06:13.120 deviating and sort of distancing themselves if a president did that, 0:06:13.560 --> 0:06:17.480 or bigger sort of pushback from civil society or the media. 0:06:18.040 --> 0:06:21.520 But President Trump and his team have been breaking these 0:06:21.560 --> 0:06:26.960 norms systematically for the first year. But even if you 0:06:27.040 --> 0:06:30.400 go to the first term of the president, there was 0:06:30.440 --> 0:06:33.320 already the same attempt and all of these have now 0:06:33.400 --> 0:06:37.800 culminated in Trump controlling the party and the rest of 0:06:37.839 --> 0:06:41.000 the party, even part of the judicial system, are no 0:06:41.080 --> 0:06:43.159 longer able to stand up to him, and all of 0:06:43.200 --> 0:06:47.360 the norms that would have helped them sort of mobilize 0:06:47.440 --> 0:06:50.479 around some sort of objection saying this is not acceptable. 0:06:50.839 --> 0:06:53.040 You know, we don't see them now. Recently, for the 0:06:53.160 --> 0:06:56.520 FED case, a few senators have started making grumbling, So 0:06:56.600 --> 0:07:00.840 perhaps there might be some limit to what the legislature 0:07:00.880 --> 0:07:03.440 is going to put up with. But the part of 0:07:03.520 --> 0:07:06.679 the agenda that is I think now very clearly visible 0:07:07.120 --> 0:07:11.200 is sort of break down one piece after another of 0:07:11.240 --> 0:07:14.240 this edifice that was constraining other presidents that are now 0:07:14.320 --> 0:07:15.880 gone for President Trump. 0:07:15.680 --> 0:07:17.640 So Jerron so basically right, we thought this checks and 0:07:17.680 --> 0:07:20.080 balances would work right three branches of the government. It 0:07:20.120 --> 0:07:22.600 made such sense, and it for so long has pretty 0:07:22.640 --> 0:07:26.880 much worked pretty well, but there was this strategy when 0:07:26.920 --> 0:07:31.920 it comes to the legal part, certainly of the government 0:07:31.960 --> 0:07:34.040 as well as the legislative. But let's just talk the 0:07:34.120 --> 0:07:36.119 legal part, because we did have you know, a judge 0:07:36.120 --> 0:07:39.080 saying Dominion Energy can resume a win project that President 0:07:39.080 --> 0:07:41.680 Trump had halted. So we have seen him lose some 0:07:41.880 --> 0:07:46.280 of the judicial actions out there. Having said that, if 0:07:46.320 --> 0:07:49.080 he didn't have that in terms of the Supreme Court justices, 0:07:49.240 --> 0:07:52.200 would we not be maybe having this conversation today, Is 0:07:52.240 --> 0:07:55.920 that what's so much about it? Or is it all 0:07:55.960 --> 0:07:59.240 of it? That and the legislative side of it, and everybody, 0:07:59.560 --> 0:08:01.840 you know, even them GOP members of Congress saying, yeah, 0:08:02.120 --> 0:08:04.120 do what you want to do. You know, it's kind 0:08:04.120 --> 0:08:06.600 of interesting because that's their job kind of being taken away. 0:08:07.360 --> 0:08:11.040 Yeah, I mean exactly, the sort of separation of powers 0:08:11.120 --> 0:08:16.560 with you know, not just the Congress and the judiciary, 0:08:16.600 --> 0:08:19.880 but also the independent agencies acting like the Fourth Brunch. 0:08:20.120 --> 0:08:23.320 Those were the things that constrained presidents and if today 0:08:23.680 --> 0:08:26.400 those constraints were working well, we wouldn't be in this 0:08:26.560 --> 0:08:31.320 turmoil in terms of the domestic situation. And part of 0:08:31.800 --> 0:08:34.760 the concern is that right now it's really the parts 0:08:34.800 --> 0:08:37.440 of the judicial branch that is that are standing up 0:08:37.520 --> 0:08:41.920 against Trump indeed, but that's that's got its limits because 0:08:41.960 --> 0:08:44.800 there are a lot of Trump appointees, and the Supreme Court, 0:08:45.120 --> 0:08:49.160 with lots of Republican and Trump appointees, hasn't really taken 0:08:49.200 --> 0:08:52.120 a very strong stance either. So all of these are 0:08:52.240 --> 0:08:55.720 piling up and taking us more and more to a 0:08:55.800 --> 0:09:00.440 situation where I think many of the former sort of 0:09:00.480 --> 0:09:05.080 presidents or constitutional scholars would find very scary because the 0:09:05.120 --> 0:09:07.920 structural US government wasn't meant to function this way. 0:09:08.200 --> 0:09:11.520 So then I'm trying to understand. And one thing that 0:09:11.920 --> 0:09:13.760 we do each and every day is we look at 0:09:13.800 --> 0:09:16.719 the markets, and we look at market reaction. Markets were 0:09:16.920 --> 0:09:19.679 and have been kind of seen as a backstop here 0:09:20.040 --> 0:09:22.200 to at least some of the things that the President 0:09:22.520 --> 0:09:24.920 has said he will do or wants to do. Do 0:09:24.960 --> 0:09:27.560 you think they're reacting to his decisions or do you 0:09:27.559 --> 0:09:31.400 think they're saying, hey, it's all fine and good at 0:09:31.520 --> 0:09:32.480 least up until now. 0:09:33.240 --> 0:09:36.040 Yeah, it is hard to understand why the markets haven't 0:09:36.080 --> 0:09:39.760 reacted more because some of the effects that are already 0:09:39.800 --> 0:09:44.559 seen from the tariffs. I think that just really underlies 0:09:45.040 --> 0:09:48.920 that you know, the stock market is not the fifth 0:09:48.920 --> 0:09:54.040 branch of government. It's not really a hard constraint in 0:09:54.080 --> 0:09:56.360 the same way that the other ones were supposed to 0:09:56.360 --> 0:10:00.520 be on the sort of centralization of power in the 0:10:00.559 --> 0:10:04.520 hands of one person or one group, And the tariff 0:10:05.000 --> 0:10:10.240 debacle demonstrates that the administration is much bolder and is 0:10:10.280 --> 0:10:13.960 willing to take actions that could lead to market reactions, 0:10:14.000 --> 0:10:17.600 at least in the short run. Now some people are saying, Oh, 0:10:17.600 --> 0:10:19.840 it's the bond market really that we need to watch 0:10:19.840 --> 0:10:24.080 out for. I don't know why. You know, right now, 0:10:24.120 --> 0:10:27.280 the bond market would be much more important than the 0:10:27.280 --> 0:10:29.600 stock market, and sometimes both of them are things that 0:10:29.679 --> 0:10:34.280 both the administration and the business community are watching. But 0:10:34.559 --> 0:10:37.320 I wouldn't you know, bet on, you know, the market 0:10:37.360 --> 0:10:42.280 mechanism being a strong enough guardrail against this kind of 0:10:42.320 --> 0:10:45.679 executive imperial presidency emerging. And if it does, I think 0:10:45.720 --> 0:10:49.760 it has really sweeping implications for how business is done again. 0:10:49.800 --> 0:10:52.760 You can see that from the fact that the President 0:10:52.760 --> 0:10:55.160 Trump can invite people to his office and say give 0:10:55.240 --> 0:10:56.679 us twenty percent of your shares. 0:10:57.320 --> 0:10:58.280 Yeah something. 0:10:58.400 --> 0:11:01.440 Yeah, there's just a moment after a moment where many 0:11:01.480 --> 0:11:04.319 would say this is it's kind of remarkable. So I 0:11:04.360 --> 0:11:09.960 am curious is this lasting, Like I am wondering who 0:11:10.000 --> 0:11:13.080 this emboldens in terms of whoever might be in the 0:11:13.120 --> 0:11:14.080 White House next. 0:11:14.679 --> 0:11:17.520 Is this the playbook? The new US playbook? And to 0:11:17.600 --> 0:11:18.480 be sorry, that's. 0:11:18.280 --> 0:11:21.079 What I'm worried about exactly. I mean, look, I mean 0:11:21.120 --> 0:11:24.800 Trump is an agent of change, He's really reshaping norms 0:11:24.800 --> 0:11:28.160 and institutions, but he is himself a symptom of what 0:11:28.440 --> 0:11:32.800 was wrong in some sense with the US system. There 0:11:32.840 --> 0:11:35.000 was a lot of inequality, there was a lot of discontent, 0:11:35.440 --> 0:11:39.520 and there was also some gridlock. You see more executive 0:11:40.360 --> 0:11:44.000 orders by Bush than by Obama than by Biden. So 0:11:44.080 --> 0:11:47.079 Trump is, you know, accelerating that trend, but he's continuing 0:11:47.120 --> 0:11:50.319 that trend. And I do not trust that the next 0:11:50.360 --> 0:11:53.240 Democrat or Republican is going to be much better behaved. 0:11:53.280 --> 0:11:56.320 Once the floodgates are open, I think we're going to 0:11:57.120 --> 0:12:00.920 go to a place where, you know, presidents could have 0:12:01.040 --> 0:12:04.800 much more arbitrary power, both in terms of their ideological agenda, 0:12:04.880 --> 0:12:07.439 but also in terms of corruption and cryptocracy. 0:12:07.760 --> 0:12:11.640 That was Drone Asimoglu, a Nobel Laureate in economics and 0:12:11.720 --> 0:12:15.000 Institute professor in the Department of economics at MIT. Check 0:12:15.040 --> 0:12:17.480 out his full piece on a Bloomberg dot com and 0:12:17.760 --> 0:12:18.800 on the Bloomberg terminal. 0:12:19.000 --> 0:12:21.640 Coming up, what last year's market turbulence could mean for 0:12:21.720 --> 0:12:23.160 this year's winners. 0:12:23.320 --> 0:12:26.320 And who may have the power to disrupt like Elon Musk? 0:12:26.520 --> 0:12:29.240 Is there another Elon like individual out there? We're going 0:12:29.320 --> 0:12:32.240 to ask arcinvest Kathy Wood, she joins us. Next This 0:12:32.360 --> 0:12:32.960 is Bloomberg. 0:12:45.440 --> 0:12:49.640 This is Bloomberg Business Week Daily with Carol Masser and 0:12:49.720 --> 0:12:52.280 Tim Stenovek on Bloomberg Radio. 0:12:53.200 --> 0:12:54.000 After the S and P. 0:12:54.000 --> 0:12:56.400 Five hundred index rebounded from the brink of a bear 0:12:56.480 --> 0:12:59.600 market in April last April and then spent the remainder 0:12:59.600 --> 0:13:02.360 of twenty twenty five going from one record to the next, 0:13:02.640 --> 0:13:04.680 President Donald Trump built it as a sign that he 0:13:04.760 --> 0:13:07.920 had transformed the United States, as he likes to put it, 0:13:08.040 --> 0:13:10.000 into the world's hottest country. 0:13:10.360 --> 0:13:13.600 Measured against stock markets from Tokyo to Frankfurt to financial 0:13:13.600 --> 0:13:17.240 capitals across the developing world. The verdict on Trump's return 0:13:17.280 --> 0:13:20.240 to the White House is decidedly less triumphant. In fact, 0:13:20.280 --> 0:13:23.600 equity's worldwide once the US is excluded, have risen around 0:13:23.600 --> 0:13:26.520 thirty percent since he took office a year ago. Roughly 0:13:26.559 --> 0:13:28.760 double the S and P five hundred schain. That's according 0:13:28.760 --> 0:13:30.640 to msci's index. 0:13:30.840 --> 0:13:34.640 Here to talk about twenty twenty six the economy investment ideas. 0:13:34.920 --> 0:13:36.720 Great to have back with us the founder, CEO and 0:13:36.760 --> 0:13:39.200 CIO of ARC invest Kathy, which he joins us from 0:13:39.240 --> 0:13:41.839 Saint Petersburg, Florida. Kathy, great to have you here, Happy 0:13:41.880 --> 0:13:42.439 New Year. 0:13:42.679 --> 0:13:45.400 Happy new Year, Carol and Tim very happy to be 0:13:45.440 --> 0:13:45.920 here again. 0:13:46.080 --> 0:13:47.480 Well, it's great to have you here. And I want 0:13:47.480 --> 0:13:49.840 to start with what stocks did here in the US 0:13:49.920 --> 0:13:52.600 really well last year, but if you look at global stocks, 0:13:52.840 --> 0:13:55.600 you could say that there was certainly some underperformance by 0:13:55.640 --> 0:13:58.600 the US. You've invested in a lot of US names, 0:13:58.600 --> 0:14:00.520 but also a lot outside the US. And I think 0:14:00.520 --> 0:14:04.240 about Chinese companies buid By. Do you, Ali Baba, are 0:14:04.280 --> 0:14:06.800 you looking for more opportunities outside the US at this 0:14:06.880 --> 0:14:09.640 point or And I wonder if you think it's time 0:14:09.679 --> 0:14:11.080 for maybe US docs and takele. 0:14:11.679 --> 0:14:18.160 I think we're very focused on the deregulation, lower taxes 0:14:18.920 --> 0:14:22.320 and what we believe will be lower inflation, much lower inflation, 0:14:22.480 --> 0:14:26.000 and lower interest rates in the US, and we think 0:14:26.840 --> 0:14:30.160 the combination of those is actually going to drive the 0:14:30.280 --> 0:14:35.320 returns on invested capital in the US up relative to 0:14:35.520 --> 0:14:37.200 those in the rest of the world. And I think 0:14:37.200 --> 0:14:41.640 many people are underestimating, especially on the corporate tax side, 0:14:42.120 --> 0:14:48.520 that thanks to the new depreciation schedules, our effective corporate 0:14:48.600 --> 0:14:53.200 tax rate, not the statutory, but the effective will drop 0:14:53.240 --> 0:14:55.720 to one of the lowest in the world at roughly 0:14:55.840 --> 0:14:59.960 ten percent, certainly near a record low for the US. 0:15:00.320 --> 0:15:02.440 So do you think, Kathy, that's not priced in yet 0:15:02.640 --> 0:15:05.760 to US equities, Like, have investors not realized that and 0:15:05.800 --> 0:15:07.280 therefore it's not pricing you know. 0:15:07.200 --> 0:15:12.360 It's very interesting. Maybe a lot of your guests have 0:15:12.520 --> 0:15:19.800 been talking about the depreciation schedules how massively they are 0:15:19.840 --> 0:15:24.000 going to encourage capital investment here in the United States. 0:15:24.080 --> 0:15:29.440 So we've never had full depreciation in year one of 0:15:30.320 --> 0:15:34.800 manufacturing facilities, full depreciation in the first year of service. 0:15:36.040 --> 0:15:40.280 That means corporations will get huge tax refunds that they 0:15:40.320 --> 0:15:45.720 will be able to reinvest into innovation because we also 0:15:46.240 --> 0:15:53.160 equipment domestic R and D, and software those three full 0:15:53.280 --> 0:15:58.440 depreciation first year of service that has been legislated. Normally 0:15:58.480 --> 0:16:01.240 we get oh a few years of this you know 0:16:01.360 --> 0:16:04.760 this cut and not cut, but that has been legislated 0:16:04.880 --> 0:16:09.480 Now it's all the time, So we don't think people 0:16:09.560 --> 0:16:12.760 understand how profound some of these tax changes are. 0:16:13.640 --> 0:16:16.120 So what does that mean for something like the AI trade, 0:16:16.160 --> 0:16:19.760 specifically Kathy, where I think people are worried about pockets 0:16:19.800 --> 0:16:21.200 of it with a you know, being in a bit 0:16:21.240 --> 0:16:26.480 of a bubble. Does it benefit everyone who is somehow associated, 0:16:26.480 --> 0:16:29.240 whether it's the chip companies, whether it's the energy companies. 0:16:29.240 --> 0:16:31.800 Do you see the benefits playing out there and giving 0:16:31.800 --> 0:16:34.440 it more room to move to the upside? 0:16:35.640 --> 0:16:40.920 Absolutely? Absolutely. I mean we're having huge buildouts of data 0:16:41.000 --> 0:16:46.240 centers and power facilities, all of that, all of those 0:16:46.680 --> 0:16:52.800 depreciation schedules will apply to this boom in investment and 0:16:52.840 --> 0:16:57.520 contribute to it. So yes, any in fact, Carol, Yeah, yeah, 0:16:57.560 --> 0:16:59.480 I was just going to say, many people think we're 0:16:59.520 --> 0:17:03.320 in a bubble, and yes, the data center spending last 0:17:03.400 --> 0:17:06.760 year was about five hundred billion dollars And you can 0:17:06.760 --> 0:17:08.920 see all of this in our Big Ideas Report we 0:17:09.080 --> 0:17:12.040 just released it. Thank you Bloomberg for featuring it. But 0:17:12.200 --> 0:17:14.959 five hundred billion dollars is a two and a half 0:17:15.160 --> 0:17:19.560 times increase from where it had been trending for years. 0:17:20.359 --> 0:17:23.080 So big increase, no doubt about it. But we think 0:17:23.200 --> 0:17:26.560 that number needs to go to one point four trillion 0:17:27.119 --> 0:17:31.440 in the next five years to accommodate the AI boom 0:17:32.000 --> 0:17:34.119 that is now under way and is going to drive 0:17:34.160 --> 0:17:36.080 productivity gains incredibly. 0:17:36.359 --> 0:17:37.760 I want to get into that in just a moment. 0:17:37.760 --> 0:17:41.159 I'm really also pequked or interested in the healthcare aspect 0:17:41.240 --> 0:17:42.520 of it, because I feel like there's a lot going 0:17:42.600 --> 0:17:43.439 on before we do. 0:17:43.560 --> 0:17:43.679 So. 0:17:44.280 --> 0:17:47.440 We also have your twenty twenty six outlook, and what's 0:17:47.480 --> 0:17:50.760 interesting is you note that this is an important economic 0:17:50.880 --> 0:17:51.879 historical moment. 0:17:52.320 --> 0:17:52.720 How so. 0:17:55.000 --> 0:18:00.560 Well, we are in a technology revolution, and many people 0:18:00.720 --> 0:18:04.520 thought that the Internet was a technology revolution, and to 0:18:04.520 --> 0:18:08.920 some extent it was. But today instead of just one 0:18:09.040 --> 0:18:15.280 major platform evolving, we have five, so robotics, energy storage, AI, 0:18:15.760 --> 0:18:21.320 blockchain technology, and multiomic sequencing in the life science space, 0:18:21.440 --> 0:18:26.480 which which we believe is the most profound application of 0:18:26.680 --> 0:18:32.520 AI healthcare. And so this boom. If you look back 0:18:32.560 --> 0:18:39.560 at the railroad boom, the amount of investment that we 0:18:39.640 --> 0:18:42.960 saw back then was about six percent of GDP at 0:18:43.000 --> 0:18:47.879 its peak, five to six percent. The internet boom was 0:18:48.000 --> 0:18:51.240 more like the auto boom in the early nineteen hundreds 0:18:51.720 --> 0:18:54.960 was more in the three to four percent of GDP range. 0:18:55.560 --> 0:19:03.720 We believe this this five platform innovation strategy or BOOM, 0:19:04.840 --> 0:19:09.919 is going to move to twelve percent of GDP, and 0:19:09.960 --> 0:19:15.439 we do believe also that productivity growth will accelerate to 0:19:15.560 --> 0:19:19.800 the four to six percent range and be sustained there. 0:19:19.840 --> 0:19:23.280 Normally we see a cyclical peak around there and then 0:19:23.320 --> 0:19:26.520 it falls back. We think it will be sustained and 0:19:26.560 --> 0:19:30.200 we think that by the end of this decade, real 0:19:30.359 --> 0:19:35.720 GDP growth could be averaging more than seven percent per year. 0:19:35.880 --> 0:19:38.879 And I know that sounds shocking, given that we've been 0:19:38.920 --> 0:19:41.600 at three percent for one hundred and twenty five years, 0:19:42.280 --> 0:19:46.520 but it is the history associated with technology revolutions, a 0:19:46.600 --> 0:19:49.560 step change up in GDP. 0:19:49.280 --> 0:19:52.400 Growth, the productivity increase, the GDP growth that you are 0:19:52.440 --> 0:19:57.320 forecasting as a result of these disruptive technologies, to what 0:19:57.440 --> 0:20:00.960 extent is that the result of fewer people doing more? 0:20:01.160 --> 0:20:03.560 My question is about job losses as a result of 0:20:03.600 --> 0:20:06.960 this technology, because if everything that investors are betting on 0:20:07.000 --> 0:20:09.600 when it comes to this AI revolution comes true, it 0:20:09.640 --> 0:20:11.879 means that companies aren't going to need as many people 0:20:12.160 --> 0:20:14.040 to do a lot more. What does that look like. 0:20:16.200 --> 0:20:20.840 Well, GDP growth at seven percent plus per year tells 0:20:20.880 --> 0:20:23.840 you there's going to be a lot of economic activity, 0:20:23.880 --> 0:20:29.200 more economic activity from a sustained growth point of view 0:20:29.200 --> 0:20:32.000 than we've seen in quite some time. The history of 0:20:32.119 --> 0:20:38.119 technology is it's a net job creator. In the early nineties, 0:20:38.440 --> 0:20:42.280 when developers were evolving the Internet, we could not have 0:20:42.400 --> 0:20:48.399 imagined uber or Airbnb back then, and I think the 0:20:48.440 --> 0:20:51.520 same is true now. We cannot imagine the kinds of 0:20:51.680 --> 0:20:55.639 jobs that are going to exist in the future. And 0:20:55.720 --> 0:20:58.200 the other thing that we're excited about from a job 0:20:58.280 --> 0:21:03.440 creation point of view is we're seeing new worlds being created. 0:21:03.440 --> 0:21:06.840 And by that I mean most of us think about Earth, 0:21:07.960 --> 0:21:11.960 but now we're moving into space, even data centers. We 0:21:12.040 --> 0:21:16.920 think elon leading that charge will start moving into space 0:21:17.119 --> 0:21:19.560 and we won't have the not in my backyard and 0:21:19.600 --> 0:21:24.480 the bureaucracy associated with data centers. There's going to be 0:21:24.680 --> 0:21:29.720 huge job creation around the space exploration and all of 0:21:29.800 --> 0:21:32.679 the opportunities out there. And then the other one, and 0:21:32.720 --> 0:21:37.320 you'll find this in our Digital Assets section of Big 0:21:37.320 --> 0:21:43.879 Ideas is the digital world immutable private property rights. We 0:21:44.040 --> 0:21:47.520 know from economic history the best way to lift people 0:21:48.160 --> 0:21:54.280 and countries out of poverty is with private property rights 0:21:54.280 --> 0:21:58.199 that are immutable. Well, that is now moving into the 0:21:58.359 --> 0:22:03.080 digital world for the first thanks to blockchain technology. So 0:22:03.160 --> 0:22:07.720 we're not worried about job creation, but for those who are, 0:22:07.840 --> 0:22:11.960 because there is something happening that I know is concerning 0:22:11.960 --> 0:22:19.320 to many people. The unemployment rate for sixteen to twenty 0:22:19.320 --> 0:22:24.280 four year old has moved to twelve percent. Twelve percent, 0:22:24.359 --> 0:22:28.760 big increase. And what is that saying. That's saying that 0:22:29.080 --> 0:22:32.920 entry level jobs are not being created the way they 0:22:33.080 --> 0:22:37.280 used to be. To those people, I say, you know, 0:22:37.640 --> 0:22:41.359 you must have in your mind an idea for a 0:22:41.400 --> 0:22:46.240 new business, something that frustrates you, an unmet need. Well, 0:22:46.240 --> 0:22:49.359 now you can go to chat GBT, you can go 0:22:49.400 --> 0:22:52.240 to groc and you can have an assistant help you 0:22:52.280 --> 0:22:56.240 build out that business. Just interview for jobs, but also 0:22:56.640 --> 0:22:59.119 think about new business ideas. I think we're going to 0:22:59.160 --> 0:23:01.240 see entrepreneurs explosion here. 0:23:01.400 --> 0:23:04.200 Well, and you know, speaking of entrepreneurial explosion, I think about, 0:23:04.280 --> 0:23:07.400 you know, how long you have certainly been with Tesla 0:23:07.800 --> 0:23:09.520 and a backer of Elon. 0:23:09.400 --> 0:23:10.160 Musk a long time. 0:23:10.200 --> 0:23:12.240 And I think about, you know, when we first talked 0:23:12.240 --> 0:23:16.040 and you likened him to mister Einstein, Albert Einstein. But 0:23:16.080 --> 0:23:20.240 I just wonder Elin at Davos earlier today and he 0:23:20.320 --> 0:23:24.240 talked about the carmaker's fortunes will be increasingly dependent on 0:23:24.320 --> 0:23:27.720 humanoid machines. Kathy, how are you modeling this, I mean 0:23:27.880 --> 0:23:30.359 into the thesis of Tesla, and is that where the 0:23:30.400 --> 0:23:33.440 growth is more so than EV's for Tesla going. 0:23:33.200 --> 0:23:38.119 Forward without a doubt. We've always said Tesla is not 0:23:38.240 --> 0:23:42.119 an auto company. It is actually the convergence of three 0:23:42.160 --> 0:23:46.919 of the platforms I mentioned, so robotics, energy storage, and AI. 0:23:47.200 --> 0:23:51.480 Each one of those technologies it has its own s 0:23:51.600 --> 0:23:55.320 curve and now they're feeding each other and we're seeing 0:23:55.359 --> 0:24:00.520 that in robotaxis. Robotaxis we believe will account for ninety 0:24:00.560 --> 0:24:04.800