1 00:00:00,080 --> 00:00:06,720 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,640 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,480 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordernt. Join us each day 4 00:00:18,720 --> 00:00:22,280 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,720 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify or 8 00:00:31,320 --> 00:00:33,919 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,000 --> 00:00:37,000 Speaker 2: Terminal and the Bloomberg Business app. We begin this out 10 00:00:37,000 --> 00:00:40,320 Speaker 2: with the IPO pipeline heating cup at Semi staging a comeback. 11 00:00:40,400 --> 00:00:43,440 Speaker 2: Jack Caffrey of JP Morgan Asset Management calling it a 12 00:00:43,440 --> 00:00:47,000 Speaker 2: moderation Monday bounce, writing this one was even more likely 13 00:00:47,040 --> 00:00:49,320 Speaker 2: given the sharpness of the sell off. Jack joins us 14 00:00:49,320 --> 00:00:51,320 Speaker 2: now for more. Jack and Mornick, Good morning. He's still 15 00:00:51,320 --> 00:00:53,640 Speaker 2: constructive on the secretary market chain. I'm still constructed on 16 00:00:53,680 --> 00:00:55,280 Speaker 2: the mort What makes you constructive? 17 00:00:55,400 --> 00:00:58,480 Speaker 3: Earnings? This is really, I think in earnings driven story. 18 00:00:58,600 --> 00:01:01,600 Speaker 3: We came into through last year with a mid teen's 19 00:01:01,640 --> 00:01:06,160 Speaker 3: earnings gain, several years into an economic expansion. Now we're 20 00:01:06,160 --> 00:01:08,800 Speaker 3: looking at twenty two plus percent earnings growth for this 21 00:01:08,880 --> 00:01:12,640 Speaker 3: year and looking to next year, we think that turns 22 00:01:12,680 --> 00:01:14,840 Speaker 3: into still another mid teen sort of earnings gain. 23 00:01:15,240 --> 00:01:17,440 Speaker 2: The biggest pushback we've had so far to earnings is 24 00:01:17,440 --> 00:01:21,120 Speaker 2: technicals just feel very stretched. Friday in the minds of 25 00:01:21,200 --> 00:01:24,480 Speaker 2: some was inevitable, and they'll be further follow through. Mak. 26 00:01:24,600 --> 00:01:26,200 Speaker 3: I think that the issue is one of if you 27 00:01:26,200 --> 00:01:28,400 Speaker 3: ask me what's going to happen in the next fifteen minutes, 28 00:01:28,440 --> 00:01:30,800 Speaker 3: I have no particular insights. If you ask me what 29 00:01:30,880 --> 00:01:33,600 Speaker 3: happens over fifteen to twenty four months, I'm going to 30 00:01:33,640 --> 00:01:36,880 Speaker 3: come back to the interplay between earnings and expectations, where 31 00:01:36,920 --> 00:01:39,280 Speaker 3: expectations a bit high. Ya look at the collapse in 32 00:01:39,319 --> 00:01:41,880 Speaker 3: the vicks, look at how tight credit spreads are, but 33 00:01:41,920 --> 00:01:44,440 Speaker 3: they're certainly telling you not a lot to be worried 34 00:01:44,440 --> 00:01:46,760 Speaker 3: about here. So I'll come back to if we continue 35 00:01:46,800 --> 00:01:50,040 Speaker 3: seeing positive earnings revisions, there are still legs to the story. 36 00:01:50,280 --> 00:01:52,480 Speaker 3: Will we have bounces along the way, will we have 37 00:01:52,560 --> 00:01:54,960 Speaker 3: some setbacks, will we find something new like, oh, I 38 00:01:55,040 --> 00:01:58,639 Speaker 3: hadn't thought about that inevitably? And I think that lends 39 00:01:58,640 --> 00:02:01,280 Speaker 3: it to a situation where the pullbacks will be short, 40 00:02:01,320 --> 00:02:02,240 Speaker 3: but they will be sharp. 41 00:02:03,200 --> 00:02:05,480 Speaker 4: You have tech and tech adjacent sectors, and of course 42 00:02:05,520 --> 00:02:07,640 Speaker 4: the earning season was super for a lot of those. 43 00:02:07,920 --> 00:02:10,080 Speaker 4: What about everyone else, What about the ones that aren't 44 00:02:10,080 --> 00:02:12,399 Speaker 4: getting the benefit of the tech build out? 45 00:02:12,480 --> 00:02:15,400 Speaker 3: Well, I think you have to when we think about 46 00:02:15,400 --> 00:02:18,200 Speaker 3: the scale seven hundred and eight hundred nine, a couple 47 00:02:18,200 --> 00:02:21,320 Speaker 3: of trillion dollars in capital spending over the next few years, 48 00:02:21,360 --> 00:02:24,840 Speaker 3: in all likelihood, not all of that actually winds up 49 00:02:24,880 --> 00:02:27,520 Speaker 3: going into semiconductors. You start off by having to build 50 00:02:27,520 --> 00:02:29,519 Speaker 3: a shell. Then you have to build an ATRAX system 51 00:02:29,520 --> 00:02:32,360 Speaker 3: in place, and you actually have to consume a lot 52 00:02:32,400 --> 00:02:35,160 Speaker 3: of copper in order to actually tie that data center 53 00:02:35,280 --> 00:02:37,320 Speaker 3: to the grid. You have to build the grid. You know, 54 00:02:37,360 --> 00:02:39,480 Speaker 3: we have electric demand growing for the first time since 55 00:02:39,520 --> 00:02:43,240 Speaker 3: the seventies, are materially growing since the seventies, and so 56 00:02:43,320 --> 00:02:46,239 Speaker 3: I do think that there is maybe not trickle down 57 00:02:46,320 --> 00:02:49,239 Speaker 3: that's a different part of the economy, but a trickle through. 58 00:02:49,919 --> 00:02:53,480 Speaker 3: And I think it's important to consider the interplay between 59 00:02:53,480 --> 00:02:55,760 Speaker 3: what people say and what people do, and when we 60 00:02:55,800 --> 00:02:58,520 Speaker 3: think about the scale of backlog growth, it would suggest 61 00:02:58,560 --> 00:03:01,440 Speaker 3: things are actually a little bit more than just asking 62 00:03:01,480 --> 00:03:02,400 Speaker 3: people are you happy? 63 00:03:02,639 --> 00:03:04,760 Speaker 4: So that filters through to the top line. Does it 64 00:03:04,800 --> 00:03:07,639 Speaker 4: filter through to the bottom line as well with an 65 00:03:07,680 --> 00:03:09,720 Speaker 4: hour of increased expenses for all these companies. 66 00:03:09,760 --> 00:03:11,240 Speaker 3: Yeah, I think on the shorter term, we do have 67 00:03:11,240 --> 00:03:13,400 Speaker 3: the acknowledge we live in a world of pretty interestingly 68 00:03:13,440 --> 00:03:16,600 Speaker 3: high nominal GDP. When you think about you know, the 69 00:03:16,720 --> 00:03:20,320 Speaker 3: Lanta Fed survey and Lanta Fed survey of GDP now 70 00:03:20,480 --> 00:03:23,519 Speaker 3: pointing to four percent growth. You've got the Cleveland Fed 71 00:03:23,600 --> 00:03:26,920 Speaker 3: survey of neartime CPI at four percent. You know, eight percent, 72 00:03:26,960 --> 00:03:29,760 Speaker 3: that's pretty a robust environment. Would have in some sense 73 00:03:29,800 --> 00:03:33,840 Speaker 3: have been thrilled to have in the in a decade ago. 74 00:03:35,440 --> 00:03:39,080 Speaker 3: We are still seeing positive incremental margin expansion as companies 75 00:03:39,120 --> 00:03:41,040 Speaker 3: still have fixed costs that they're absorbing. And so I 76 00:03:41,080 --> 00:03:43,880 Speaker 3: do think that's how you can turn eight percent sort 77 00:03:43,920 --> 00:03:47,120 Speaker 3: of top lines into twenty percent earnings gains in terms 78 00:03:47,120 --> 00:03:50,280 Speaker 3: of companies still making their assets sweat harder and you know, 79 00:03:50,560 --> 00:03:53,000 Speaker 3: perhaps with the threat of aim making their people sweat harder. 80 00:03:53,080 --> 00:03:55,280 Speaker 2: They fed us let this run. Some people might say 81 00:03:55,440 --> 00:03:58,640 Speaker 2: they've encouraged it. They reduced interest rates three times last year, 82 00:03:58,680 --> 00:04:00,640 Speaker 2: three times the year before that. Is the FED about 83 00:04:00,640 --> 00:04:01,840 Speaker 2: to step in and ruin the party. 84 00:04:02,920 --> 00:04:05,960 Speaker 3: I'm really happy I'm not on the FED in terms 85 00:04:05,960 --> 00:04:09,120 Speaker 3: of having to think about balancing between the policy pushes 86 00:04:09,120 --> 00:04:11,960 Speaker 3: and pulls. You've got a very loud cheerleader who's going 87 00:04:12,000 --> 00:04:15,680 Speaker 3: to be very active in social media expressing what policy 88 00:04:15,760 --> 00:04:18,440 Speaker 3: they want, and then you've got a group of equally 89 00:04:18,760 --> 00:04:21,640 Speaker 3: strong minded individuals on the FED board, most of whom 90 00:04:21,640 --> 00:04:27,200 Speaker 3: have been indicating they think the situation requires moderating the 91 00:04:27,200 --> 00:04:29,119 Speaker 3: punch bowl, if not actively taking it away. 92 00:04:29,480 --> 00:04:32,080 Speaker 2: Short This headline might moderate the punch bowl. It just 93 00:04:32,120 --> 00:04:35,960 Speaker 2: crossed on the Bloomberg terminal. Taiwan mullin curbs on ai 94 00:04:36,040 --> 00:04:39,320 Speaker 2: Chipex sports to China to align with the United States. 95 00:04:39,320 --> 00:04:41,600 Speaker 2: As we try and digest that headline as it just 96 00:04:41,640 --> 00:04:44,520 Speaker 2: crosses the Bloomberg terminalor equity features taken just a little 97 00:04:44,520 --> 00:04:46,360 Speaker 2: bit of a dip, We're still positive on the session 98 00:04:46,360 --> 00:04:47,880 Speaker 2: by about a third of one percent on the S 99 00:04:47,920 --> 00:04:50,320 Speaker 2: and P five hundred, that headline crossing just seconds ago. 100 00:04:50,680 --> 00:04:54,479 Speaker 2: Taiwan considering curbs on ai Chipex sports to China to 101 00:04:54,560 --> 00:04:57,359 Speaker 2: align with the United States. Scout at the latest on 102 00:04:57,400 --> 00:04:58,679 Speaker 2: the Bloomberg terminal this morning. 103 00:04:59,000 --> 00:05:00,080 Speaker 1: Yeah, that it. 104 00:05:00,120 --> 00:05:03,839 Speaker 4: Gives you this sense that Taiwan is going to not 105 00:05:03,920 --> 00:05:06,320 Speaker 4: bend over backwards, but make sure it aligns with the 106 00:05:06,440 --> 00:05:09,000 Speaker 4: US in order to get the kind of arms deals 107 00:05:09,040 --> 00:05:12,520 Speaker 4: and fulfill those contracts that had wanted from the United States. 108 00:05:12,600 --> 00:05:15,159 Speaker 4: And we're already seen how President Trump is going to 109 00:05:15,200 --> 00:05:16,800 Speaker 4: make sure that he is going to huge to what 110 00:05:16,920 --> 00:05:18,839 Speaker 4: Hu Jing Pin wants in order to be able to 111 00:05:18,839 --> 00:05:20,320 Speaker 4: move forward with their trading relationship. 112 00:05:20,320 --> 00:05:20,480 Speaker 1: Too. 113 00:05:20,520 --> 00:05:22,320 Speaker 2: With attempt to bring you about details on that stony 114 00:05:22,320 --> 00:05:24,359 Speaker 2: in just a minment features still just a band positive 115 00:05:24,520 --> 00:05:26,240 Speaker 2: on the S and P five hundred. Let's turn back 116 00:05:26,240 --> 00:05:29,000 Speaker 2: to the Federates. Jack, you mentioned the cheerleader at the 117 00:05:29,000 --> 00:05:30,880 Speaker 2: White House. You allD it to that. Does it make 118 00:05:30,920 --> 00:05:33,679 Speaker 2: a difference that the president is calling for more right counts? 119 00:05:33,680 --> 00:05:37,000 Speaker 2: Does not actually change up perception of future FED policy. 120 00:05:38,400 --> 00:05:41,680 Speaker 3: I think that the President is an active user of 121 00:05:41,680 --> 00:05:44,520 Speaker 3: the bullue pulpit, and in terms of whether it's what 122 00:05:44,560 --> 00:05:47,679 Speaker 3: he would like to see in interest rate policy, clearly 123 00:05:47,720 --> 00:05:49,880 Speaker 3: he did not have the impact that he was hoping 124 00:05:49,920 --> 00:05:52,440 Speaker 3: to have in terms of the direction of rates over 125 00:05:52,440 --> 00:05:55,840 Speaker 3: the last several months. He's certainly much more effective in 126 00:05:55,920 --> 00:05:57,760 Speaker 3: terms of what he's doing with the oil market. I 127 00:05:57,800 --> 00:06:02,800 Speaker 3: think certainly seemingly every weekend. When I talked about moderation Monday, 128 00:06:03,080 --> 00:06:05,200 Speaker 3: I also thought maybe you would have called yesterday's step 129 00:06:05,200 --> 00:06:09,040 Speaker 3: back Sunday. In terms of remain calm, oil prices are 130 00:06:09,080 --> 00:06:12,320 Speaker 3: going to be going down any moment now, and effectively 131 00:06:12,320 --> 00:06:15,039 Speaker 3: we're seeing that actually follow through at least right now 132 00:06:15,080 --> 00:06:16,279 Speaker 3: from a trader's perspective. 133 00:06:16,720 --> 00:06:18,880 Speaker 4: So let's bring it back to the equity market, because 134 00:06:18,920 --> 00:06:20,919 Speaker 4: you have pointed out that energy is the most interesting 135 00:06:20,960 --> 00:06:23,480 Speaker 4: sector in equity market because it sits at the intersection 136 00:06:23,520 --> 00:06:26,120 Speaker 4: of so many different dynamics. How are you feeling about 137 00:06:26,120 --> 00:06:27,400 Speaker 4: it right now versus a month ago. 138 00:06:27,920 --> 00:06:29,920 Speaker 3: I think that ultimately the one thing I can subbout 139 00:06:29,960 --> 00:06:32,400 Speaker 3: oil prices to start is oil prices are wrong. 140 00:06:33,160 --> 00:06:33,640 Speaker 1: They're wrong. 141 00:06:33,720 --> 00:06:37,080 Speaker 3: They're wrong. They if you look at the future's curve, 142 00:06:37,120 --> 00:06:39,359 Speaker 3: they should be trending lower. I think the question is 143 00:06:39,440 --> 00:06:42,520 Speaker 3: at what rate do they trend lower? At the same time, 144 00:06:43,160 --> 00:06:46,400 Speaker 3: tankers aren't really transitting. We were reminded the blockade this 145 00:06:46,440 --> 00:06:49,919 Speaker 3: morning remains one hundred percent effective, and that means we, 146 00:06:50,600 --> 00:06:52,760 Speaker 3: I think, are not paying enough attention to the actual 147 00:06:52,760 --> 00:06:56,920 Speaker 3: declines in physical inventory, and that even if you start 148 00:06:56,960 --> 00:07:01,279 Speaker 3: actually getting crude flowing tomorrow or forty five days away 149 00:07:01,279 --> 00:07:05,240 Speaker 3: from actual new supplies reaching to demand centers. And so 150 00:07:05,360 --> 00:07:08,400 Speaker 3: in that environment of there's very few barrels to be bought, 151 00:07:09,000 --> 00:07:11,240 Speaker 3: the possibility of very few barrels to be bought, you 152 00:07:11,360 --> 00:07:13,600 Speaker 3: wind up with having these scenarios where oil might go 153 00:07:14,240 --> 00:07:16,640 Speaker 3: not to ninety, not to one hundred, but potentially two 154 00:07:16,640 --> 00:07:18,760 Speaker 3: one hundred and twenty five one hundred and fifty dollars, 155 00:07:19,280 --> 00:07:21,880 Speaker 3: and that has an inflation knock on, and that is 156 00:07:21,920 --> 00:07:24,760 Speaker 3: not something that FED can can easily control through thinking 157 00:07:24,800 --> 00:07:26,160 Speaker 3: about either rates or money supply. 158 00:07:26,280 --> 00:07:28,400 Speaker 4: Who seems to understand this better short term traders or 159 00:07:28,440 --> 00:07:29,360 Speaker 4: long term investors. 160 00:07:29,480 --> 00:07:33,760 Speaker 3: I think that there's probably an interesting time arbitrage between 161 00:07:33,800 --> 00:07:37,320 Speaker 3: the two. Where the short term traders are looking at, 162 00:07:37,440 --> 00:07:41,360 Speaker 3: you know, oil prices easing, they're looking at airline stocks 163 00:07:41,360 --> 00:07:43,960 Speaker 3: making all time new highs. Forces you to scratch your 164 00:07:43,960 --> 00:07:47,000 Speaker 3: head if you think about the possibility of physical shortages 165 00:07:47,480 --> 00:07:51,080 Speaker 3: of someone who's certainly very operationally leveraged to what fuel 166 00:07:51,120 --> 00:07:53,760 Speaker 3: prices wind up being or what they presold their tickets 167 00:07:53,800 --> 00:07:57,680 Speaker 3: as being. And so I think that's where traders are 168 00:07:57,680 --> 00:08:00,240 Speaker 3: responding to them is literally tweet by tweet, truth by 169 00:08:00,240 --> 00:08:05,160 Speaker 3: truth versus investors are saying, interesting, I don't really see 170 00:08:05,160 --> 00:08:09,040 Speaker 3: the path forward. And yet as much as you think 171 00:08:09,080 --> 00:08:12,960 Speaker 3: about an energy dominance theme, large oil companies are at 172 00:08:13,040 --> 00:08:17,680 Speaker 3: least being very slow with increasing their Historically, the rule 173 00:08:17,720 --> 00:08:20,480 Speaker 3: of thumb as high price is secure high prices, and 174 00:08:20,560 --> 00:08:24,120 Speaker 3: yet normally the cure for high prices is actually increasing supply. 175 00:08:24,640 --> 00:08:27,520 Speaker 3: No one's really rushing to increase supply, and I would 176 00:08:27,600 --> 00:08:30,760 Speaker 3: suggest over time oil needs to be higher because I 177 00:08:30,800 --> 00:08:35,120 Speaker 3: think the world has realized that the choke point, which 178 00:08:35,240 --> 00:08:37,840 Speaker 3: is the Strait of Horror Moves, is probably unacceptable for 179 00:08:37,960 --> 00:08:40,439 Speaker 3: the global economy. And so how do you incentivize more 180 00:08:40,480 --> 00:08:43,160 Speaker 3: production out of South America, more production out of Africa? 181 00:08:43,760 --> 00:08:46,280 Speaker 3: Reroute around some of the other choke points, which is 182 00:08:46,280 --> 00:08:48,400 Speaker 3: not just the Strait of horm Moves, but potentially even 183 00:08:48,440 --> 00:08:51,720 Speaker 3: the Suez Canal, depending on what total victory looks like 184 00:08:51,800 --> 00:08:54,319 Speaker 3: in terms of where parties settle out. 185 00:08:54,559 --> 00:08:55,199 Speaker 1: Stay with us. 186 00:08:55,520 --> 00:08:58,040 Speaker 2: More Bloomberg Savanance coming up after this. 187 00:09:07,320 --> 00:09:09,439 Speaker 5: We thought the President was breaking some news on Friday 188 00:09:09,440 --> 00:09:12,240 Speaker 5: when he was gaggling with reporters, including myself on Air 189 00:09:12,280 --> 00:09:14,720 Speaker 5: Force one, and then we get these reports that actually 190 00:09:14,760 --> 00:09:19,240 Speaker 5: it was news to those companies themselves anthropic, opening Eye SpaceX. 191 00:09:19,440 --> 00:09:22,120 Speaker 5: But the direction of travel is clear in terms of 192 00:09:22,160 --> 00:09:24,640 Speaker 5: what this White House wants to do when it comes 193 00:09:24,679 --> 00:09:28,079 Speaker 5: to these AI companies, especially as all of them prepared 194 00:09:28,080 --> 00:09:30,200 Speaker 5: to go to the market. Jennifer Huddleson joins me, now 195 00:09:30,280 --> 00:09:34,040 Speaker 5: Senior Fellow in Technology Policy at the Cato Institute. Jennifer, 196 00:09:34,040 --> 00:09:36,000 Speaker 5: good morning, Thanks for joining me. Good morning, Thanks for 197 00:09:36,000 --> 00:09:37,440 Speaker 5: having me. So you're spending a lot of your time 198 00:09:37,480 --> 00:09:40,719 Speaker 5: right now focused on this. The President talks about concepts 199 00:09:40,800 --> 00:09:43,440 Speaker 5: of ideas in terms of how there could be more 200 00:09:43,559 --> 00:09:46,800 Speaker 5: of a public private partnership when it comes to these 201 00:09:46,840 --> 00:09:49,880 Speaker 5: AI companies. What do you think some of the policy 202 00:09:49,920 --> 00:09:53,280 Speaker 5: proposals this White House maybe Congress could actually land on. 203 00:09:53,720 --> 00:09:55,280 Speaker 6: You know, there's a big difference in kind of the 204 00:09:55,320 --> 00:09:57,840 Speaker 6: idea of a public private partnership and what we're seeing 205 00:09:57,880 --> 00:10:01,080 Speaker 6: in terms of calls for government investors in some of 206 00:10:01,120 --> 00:10:04,120 Speaker 6: these leading companies. One of the real concerns is that 207 00:10:04,160 --> 00:10:07,720 Speaker 6: if we see government investment, if we see significant government involvement, 208 00:10:08,000 --> 00:10:10,600 Speaker 6: that could lead to the government picking winners and losers 209 00:10:10,800 --> 00:10:13,839 Speaker 6: at a time when this industry is incredibly dynamic and 210 00:10:13,880 --> 00:10:17,319 Speaker 6: where we don't necessarily know where the full applications of 211 00:10:17,320 --> 00:10:20,079 Speaker 6: the technology are going or who those leaders are going 212 00:10:20,120 --> 00:10:23,000 Speaker 6: to be when it comes to what consumers actually need 213 00:10:23,040 --> 00:10:23,680 Speaker 6: and want. 214 00:10:23,920 --> 00:10:27,000 Speaker 5: Do you feel that this White House already has done that? 215 00:10:27,040 --> 00:10:27,280 Speaker 1: Though? 216 00:10:27,320 --> 00:10:29,240 Speaker 5: So why would they stop here when you think of 217 00:10:29,760 --> 00:10:33,520 Speaker 5: MP Materials and Intel? Why would they stop at the 218 00:10:33,520 --> 00:10:38,480 Speaker 5: AI companies? Which is also a welcome policy perposal on 219 00:10:38,559 --> 00:10:39,280 Speaker 5: the far left. 220 00:10:39,440 --> 00:10:41,240 Speaker 6: You know, you mentioned there does seem to be this 221 00:10:41,440 --> 00:10:45,400 Speaker 6: odd horseshoe where you have Senator Bernie Sanders proposing a 222 00:10:45,480 --> 00:10:49,440 Speaker 6: sovereign wealth fund to invest in AI companies, and then 223 00:10:49,440 --> 00:10:51,640 Speaker 6: you've had these kind of rumors out of the White 224 00:10:51,640 --> 00:10:55,040 Speaker 6: House of a very similar proposal. You mentioned the past 225 00:10:55,080 --> 00:10:57,880 Speaker 6: actions around for example, Intel, and one of the things 226 00:10:57,880 --> 00:10:59,920 Speaker 6: we can see there is the impact that this can 227 00:11:00,120 --> 00:11:05,280 Speaker 6: have on private investment, on presumptions around how these companies 228 00:11:05,280 --> 00:11:07,720 Speaker 6: are going to develop, And that's something to also consider. 229 00:11:08,040 --> 00:11:11,040 Speaker 6: What does this mean not only for these companies and 230 00:11:11,120 --> 00:11:13,720 Speaker 6: for the AI industry, but what does it also mean 231 00:11:14,000 --> 00:11:16,400 Speaker 6: for the market environment around these companies. 232 00:11:16,520 --> 00:11:18,520 Speaker 5: Jonathan and I have been speaking about this all week, 233 00:11:18,559 --> 00:11:20,440 Speaker 5: and a question he brought up yesterday is do the 234 00:11:20,480 --> 00:11:23,320 Speaker 5: companies want to share in the profits with the US 235 00:11:23,480 --> 00:11:26,000 Speaker 5: government or do you think they want to get involved 236 00:11:26,000 --> 00:11:29,760 Speaker 5: with the US government to potentially protect against the downside? 237 00:11:30,040 --> 00:11:32,360 Speaker 6: One of the big concerns with the kind of government 238 00:11:32,440 --> 00:11:35,640 Speaker 6: investment is a risk of cronyism, a risk that only 239 00:11:35,679 --> 00:11:38,920 Speaker 6: those large companies could be the ones that could potentially 240 00:11:39,040 --> 00:11:41,920 Speaker 6: navigate these things. What does that mean for smaller players 241 00:11:41,960 --> 00:11:44,760 Speaker 6: who might emerge as leaders in the future, and also 242 00:11:44,840 --> 00:11:47,480 Speaker 6: what does that mean for the involvement of the government 243 00:11:47,600 --> 00:11:51,280 Speaker 6: in this technology that's so critical to access to information, 244 00:11:51,520 --> 00:11:56,880 Speaker 6: to the opportunities for many potential innovations and applications. Is 245 00:11:56,880 --> 00:11:58,800 Speaker 6: that the type of thing where you may see a 246 00:11:58,800 --> 00:12:02,560 Speaker 6: politicization of certain policies, of companies not being willing to 247 00:12:02,600 --> 00:12:06,520 Speaker 6: offer certain products because they're worried what government regulators might 248 00:12:06,559 --> 00:12:07,240 Speaker 6: think about that. 249 00:12:07,400 --> 00:12:09,080 Speaker 1: Or how they might find that disfavored. 250 00:12:09,240 --> 00:12:11,320 Speaker 5: Do you think the IPOs are pushing the government to 251 00:12:11,400 --> 00:12:14,480 Speaker 5: act because we're going to see SpaceX go public on Friday, 252 00:12:14,520 --> 00:12:17,000 Speaker 5: then it's going to be open AI and Inthrapic, and 253 00:12:17,040 --> 00:12:22,200 Speaker 5: we're seeing these companies inc valuations that are so not 254 00:12:22,440 --> 00:12:26,480 Speaker 5: normal when it comes to IPOs and going public on 255 00:12:26,920 --> 00:12:27,800 Speaker 5: public markets. 256 00:12:28,000 --> 00:12:31,480 Speaker 6: There's a lot of excitement around AI, around its potential 257 00:12:31,520 --> 00:12:34,560 Speaker 6: both in the markets, as well as in individual businesses 258 00:12:34,679 --> 00:12:38,360 Speaker 6: and their potential applications of AI. I think that we're 259 00:12:38,400 --> 00:12:40,360 Speaker 6: also in a moment where we're still seeing a lot 260 00:12:40,400 --> 00:12:44,079 Speaker 6: of potential fears, a lot of potential concerns around AI, 261 00:12:44,120 --> 00:12:46,319 Speaker 6: and a lot of uncertainty of what that means. 262 00:12:46,040 --> 00:12:47,520 Speaker 1: For jobs or things like that. 263 00:12:47,840 --> 00:12:49,960 Speaker 6: So I don't think that we can say hard and 264 00:12:50,040 --> 00:12:54,000 Speaker 6: fast whether this is a result of interest in IPOs, 265 00:12:54,240 --> 00:12:56,920 Speaker 6: but more just a continuing question of what the US 266 00:12:57,000 --> 00:12:59,160 Speaker 6: approach to AI policy should look like. 267 00:12:59,280 --> 00:12:59,760 Speaker 1: You mentioned this. 268 00:13:00,400 --> 00:13:02,959 Speaker 5: You have Bernie Sanders on the far left. I asked 269 00:13:03,000 --> 00:13:05,520 Speaker 5: Trump about this, and he said that they actually share 270 00:13:05,600 --> 00:13:09,920 Speaker 5: some economic thinking similarities, and that he took some of 271 00:13:09,960 --> 00:13:12,960 Speaker 5: Bernie's voters. Then you have individuals like even Steve Bannon 272 00:13:13,040 --> 00:13:15,440 Speaker 5: on the far right who think Bernie Standers doesn't go 273 00:13:15,520 --> 00:13:16,079 Speaker 5: far enough. 274 00:13:16,400 --> 00:13:19,240 Speaker 1: It does feel like Washington will do something. What do 275 00:13:19,280 --> 00:13:20,440 Speaker 1: you think would be appropriate? 276 00:13:20,880 --> 00:13:23,280 Speaker 6: I think it's really important that we remember why a 277 00:13:23,400 --> 00:13:26,240 Speaker 6: light touched approach to innovation has allowed the US to 278 00:13:26,240 --> 00:13:28,280 Speaker 6: be a leader in the Internet era, and then we 279 00:13:28,320 --> 00:13:30,800 Speaker 6: consider how that might play out in the AI era. 280 00:13:31,160 --> 00:13:34,280 Speaker 6: There may be a need for clear policy guardrails around 281 00:13:34,280 --> 00:13:37,400 Speaker 6: some of the issues like government use of AI. But 282 00:13:37,600 --> 00:13:40,600 Speaker 6: when we're thinking about how this technology could potentially evolve 283 00:13:40,640 --> 00:13:43,760 Speaker 6: in its most beneficial ways, we should want consumers and 284 00:13:43,800 --> 00:13:46,600 Speaker 6: innovators in the market to be the ones that decide 285 00:13:46,640 --> 00:13:50,320 Speaker 6: all the potential application, rather than bureaucrats dictating that this 286 00:13:50,440 --> 00:13:53,160 Speaker 6: technology can only evolve in one particular direction. 287 00:13:53,320 --> 00:13:55,719 Speaker 5: Do you think executives are more willing to work with 288 00:13:55,760 --> 00:13:57,719 Speaker 5: the government on this and potentially even give them the 289 00:13:57,840 --> 00:14:01,920 Speaker 5: stake because they know there's going to be public backlash 290 00:14:01,960 --> 00:14:04,280 Speaker 5: When we've seed so much public backlash, especially recently at 291 00:14:04,280 --> 00:14:07,719 Speaker 5: commencement speeches, there's a lot of anxiety. Bernie Standers is 292 00:14:07,760 --> 00:14:10,959 Speaker 5: talking about the fact that AI models run based off 293 00:14:11,000 --> 00:14:13,439 Speaker 5: of all of our collective work as a society. 294 00:14:14,000 --> 00:14:16,920 Speaker 6: There's certainly a lot of discomfort in the public around AI, 295 00:14:16,960 --> 00:14:18,959 Speaker 6: and I think it's important that we remember all the 296 00:14:18,960 --> 00:14:21,760 Speaker 6: benefits of AI and that AI isn't just products like 297 00:14:21,840 --> 00:14:25,640 Speaker 6: chat GPT. We're seeing things like amazing medical research advances, 298 00:14:25,640 --> 00:14:29,520 Speaker 6: We're seeing better predictions for natural disasters. We're seeing a 299 00:14:29,560 --> 00:14:32,640 Speaker 6: lot of applications of AI that the average individual might 300 00:14:32,720 --> 00:14:35,680 Speaker 6: not be aware about or thinking about, and that therefore, 301 00:14:35,680 --> 00:14:38,400 Speaker 6: when we're thinking about AI, we have to think much bigger, 302 00:14:38,760 --> 00:14:40,840 Speaker 6: including when we're thinking about AI policy. 303 00:14:41,000 --> 00:14:44,080 Speaker 5: You're very optimistic on the future of AI. A lot 304 00:14:44,120 --> 00:14:46,720 Speaker 5: of people are nervous that it would mean loss of 305 00:14:46,800 --> 00:14:47,760 Speaker 5: jobs in this country. 306 00:14:47,880 --> 00:14:49,640 Speaker 6: You know, I think it's okay to be nervous on 307 00:14:49,680 --> 00:14:52,360 Speaker 6: an individual level, but we've been there and we've had 308 00:14:52,360 --> 00:14:55,880 Speaker 6: this uncertainty around other automation technologies in the past, whether 309 00:14:55,920 --> 00:14:58,640 Speaker 6: it was questions of what would ATMs do to teller 310 00:14:58,760 --> 00:15:01,760 Speaker 6: jobs or the rise of EXCEL in the financial sector. 311 00:15:02,120 --> 00:15:04,640 Speaker 6: What we find is that typically when these new technologies 312 00:15:04,680 --> 00:15:07,720 Speaker 6: come in, yes, there is some displacement, but there is 313 00:15:07,840 --> 00:15:11,840 Speaker 6: also a lot more opportunities that are created by those efficiencies, 314 00:15:11,840 --> 00:15:14,640 Speaker 6: and there are also opportunities that often lead to more 315 00:15:14,760 --> 00:15:18,920 Speaker 6: enjoyable work and more opportunities in the future as well. 316 00:15:19,120 --> 00:15:21,240 Speaker 5: We talk about what the government is using in terms 317 00:15:21,280 --> 00:15:24,280 Speaker 5: of AI right now. It was a little bit confusing 318 00:15:24,320 --> 00:15:28,120 Speaker 5: because clearly the DoD is still running Anthropic, but they're 319 00:15:28,160 --> 00:15:31,080 Speaker 5: giving them six months. The dd is giving itself six 320 00:15:31,120 --> 00:15:33,600 Speaker 5: months to wind that down and use other partners. 321 00:15:34,040 --> 00:15:36,160 Speaker 1: What does it mean for ANTHROPIC. 322 00:15:35,720 --> 00:15:38,480 Speaker 5: To be used especially methos across other agencies in the 323 00:15:38,520 --> 00:15:42,880 Speaker 5: government but still be a supply chain risk considered a 324 00:15:42,880 --> 00:15:44,680 Speaker 5: supplying chain risk at the Pentagon. 325 00:15:45,320 --> 00:15:47,560 Speaker 6: This is a really complicated question and wine of the 326 00:15:47,640 --> 00:15:49,880 Speaker 6: questions we really need to be discussing when it comes 327 00:15:49,880 --> 00:15:54,000 Speaker 6: to potential guard rails for artificial intelligence. There are certainly 328 00:15:54,040 --> 00:15:58,000 Speaker 6: benefits of the government using artificial intelligence to better service constituents, 329 00:15:58,040 --> 00:16:00,880 Speaker 6: to better service citizens, but there are also unique civil 330 00:16:00,960 --> 00:16:03,560 Speaker 6: rights and civil liberty concerns when it comes to the 331 00:16:03,560 --> 00:16:07,800 Speaker 6: potential use of AI, for concerns related to domestic surveillance 332 00:16:07,880 --> 00:16:10,440 Speaker 6: or autonomous lethal weapons, many of which were at the 333 00:16:10,480 --> 00:16:13,240 Speaker 6: heart of the dispute between the Pentagon and Anthropic. 334 00:16:13,280 --> 00:16:14,000 Speaker 1: A few weeks ago. 335 00:16:14,160 --> 00:16:16,480 Speaker 5: I spoke to Under Secretary of Neil Michael about this 336 00:16:16,720 --> 00:16:19,920 Speaker 5: and he said, there's no talks anymore left between DoD 337 00:16:20,000 --> 00:16:23,360 Speaker 5: and Anthropic, but we have seen the Andthropic CEO have 338 00:16:23,440 --> 00:16:26,320 Speaker 5: meetings in Washington, even with the Chief of Staff Susie Wilds. 339 00:16:26,800 --> 00:16:28,640 Speaker 5: Do you think that's going to get patched up? 340 00:16:29,120 --> 00:16:31,280 Speaker 6: You know, it's a complicated situation, and I think there 341 00:16:31,280 --> 00:16:33,920 Speaker 6: are two factors there. There's the question of the decision 342 00:16:33,960 --> 00:16:37,240 Speaker 6: around the contract, which could be a normal dispute between 343 00:16:37,240 --> 00:16:41,120 Speaker 6: a government contractor and a government agency. But what made 344 00:16:41,120 --> 00:16:43,920 Speaker 6: this so unique was the supply chain designation, and that's 345 00:16:43,960 --> 00:16:47,240 Speaker 6: what raised serious concerns when it comes to questions around 346 00:16:47,320 --> 00:16:50,520 Speaker 6: free speech, around the potential government influence in this very 347 00:16:50,560 --> 00:16:51,480 Speaker 6: important market. 348 00:16:51,880 --> 00:16:55,320 Speaker 2: Stay with us multiple IMPEX surveillance coming up. Off to this, 349 00:17:04,600 --> 00:17:08,120 Speaker 2: Let's get to those IPOs. Open AI entering the race 350 00:17:08,160 --> 00:17:11,240 Speaker 2: to go public submitting it's confidential filing for an IPO, 351 00:17:11,359 --> 00:17:14,680 Speaker 2: Gil Loria of DA Davison writing, what open ai does 352 00:17:14,720 --> 00:17:18,320 Speaker 2: not want is for the public market capital to exhaust itself. 353 00:17:18,600 --> 00:17:20,800 Speaker 2: It does not want to be the third and last 354 00:17:21,040 --> 00:17:23,480 Speaker 2: of the large IPOs. Gil joins us now for more 355 00:17:23,680 --> 00:17:25,600 Speaker 2: and Gil, welcome to the program. There might not be 356 00:17:25,680 --> 00:17:27,800 Speaker 2: the only thing to worry about, not just the IPOs, 357 00:17:27,800 --> 00:17:31,240 Speaker 2: but also Alphabet with an upsized capital raise as well 358 00:17:31,280 --> 00:17:33,120 Speaker 2: in the last week. And Gil, as you pointed out, 359 00:17:33,160 --> 00:17:36,199 Speaker 2: before we even got the rumor from the ft on Meta, 360 00:17:36,600 --> 00:17:39,560 Speaker 2: you might see Meta and the others follow. It will 361 00:17:39,600 --> 00:17:41,480 Speaker 2: just frame for us how much equity we could see 362 00:17:41,520 --> 00:17:44,160 Speaker 2: come into this market in the next six months. 363 00:17:45,119 --> 00:17:50,040 Speaker 7: Hundreds of billions of dollars of new equity because Microsoft, Amazon, 364 00:17:50,080 --> 00:17:53,399 Speaker 7: and Meta just took note that Google, that Alphabet just 365 00:17:53,440 --> 00:17:58,119 Speaker 7: had a very successful equity raise. Did the stock held 366 00:17:58,240 --> 00:18:01,560 Speaker 7: up even as they issued for already something billion dollars 367 00:18:01,560 --> 00:18:04,480 Speaker 7: of equity. They're able to raise dead at the same time, 368 00:18:04,720 --> 00:18:07,760 Speaker 7: all at a very low cost of capital. And this 369 00:18:08,000 --> 00:18:11,480 Speaker 7: is a war for capital, so this is where it's at. 370 00:18:11,920 --> 00:18:15,000 Speaker 7: And these companies are filing a secondary so they can 371 00:18:15,040 --> 00:18:19,879 Speaker 7: do that overnight, while the IPOs take time to go through. 372 00:18:20,600 --> 00:18:24,439 Speaker 7: So the big companies that are all ready public are 373 00:18:24,480 --> 00:18:27,600 Speaker 7: going to the capital markets and draining them before many 374 00:18:27,640 --> 00:18:31,200 Speaker 7: of these IPOs are happening. SpaceX will hopefully happen this Friday, 375 00:18:31,640 --> 00:18:34,479 Speaker 7: but open AI and Anthropic may get to a market 376 00:18:34,520 --> 00:18:36,000 Speaker 7: that's somewhat depleted. 377 00:18:36,119 --> 00:18:36,399 Speaker 1: Now. 378 00:18:36,720 --> 00:18:38,879 Speaker 7: The demand for those IPOs is going to be so 379 00:18:39,119 --> 00:18:43,520 Speaker 7: great that they'll do fine, but the market is finite, 380 00:18:43,600 --> 00:18:46,720 Speaker 7: and we've already seen some volatile days where investors have 381 00:18:46,800 --> 00:18:51,320 Speaker 7: been selling stock to free up capacity to participate in 382 00:18:51,400 --> 00:18:55,280 Speaker 7: these offerings and IPOs, So it's getting crowded out there. 383 00:18:55,359 --> 00:18:58,080 Speaker 2: Gill, how much tolerance is there at say a METSA 384 00:18:58,800 --> 00:19:02,680 Speaker 2: to ready stomach the pushback. What was intriguing about Friday 385 00:19:02,760 --> 00:19:05,080 Speaker 2: was just how quickly that stuff rolled over, just on 386 00:19:05,119 --> 00:19:07,680 Speaker 2: the mere report in the ft that maybe they'd follow 387 00:19:07,720 --> 00:19:10,760 Speaker 2: Alphabet and do something similar it's that something they can stomach. 388 00:19:10,760 --> 00:19:13,240 Speaker 2: Are we underestimating that tolerance for that? 389 00:19:14,560 --> 00:19:19,160 Speaker 7: Well, mister Zuckerberg has controlling interest, and he's shown that 390 00:19:19,480 --> 00:19:22,879 Speaker 7: his perspective is always long term. He rarely tries to 391 00:19:23,960 --> 00:19:27,520 Speaker 7: satisfy investors in the short term. If he feels like 392 00:19:27,640 --> 00:19:29,600 Speaker 7: this is the time to go out and get the capital, 393 00:19:29,880 --> 00:19:32,399 Speaker 7: he'll do so. He'd rather do it at a higher price. 394 00:19:32,520 --> 00:19:36,760 Speaker 7: But he's shown through his spending and through being very 395 00:19:36,880 --> 00:19:40,000 Speaker 7: clear about the fact that he's investing ahead of demand, 396 00:19:40,560 --> 00:19:42,959 Speaker 7: that he has tolerance for that. And if he thinks 397 00:19:43,359 --> 00:19:46,000 Speaker 7: capital is the key to compete right now, he'll go 398 00:19:46,040 --> 00:19:48,560 Speaker 7: out and get capital regardless of where the stock is. 399 00:19:49,240 --> 00:19:51,520 Speaker 4: Gil you said the market is finite. Where is the 400 00:19:51,560 --> 00:19:54,720 Speaker 4: market finite? It's not for the big aiipos that we're 401 00:19:54,720 --> 00:19:59,240 Speaker 4: talking about here, whether it's SpaceX, Anthropic and eventually Open AI. 402 00:19:59,359 --> 00:20:02,480 Speaker 4: It's not for Alphabet's equity raised and upsize equity raise 403 00:20:02,520 --> 00:20:04,879 Speaker 4: at that. Potentially it might be for Meta or at 404 00:20:04,920 --> 00:20:06,800 Speaker 4: least a hint of it. But where do you see 405 00:20:06,800 --> 00:20:09,040 Speaker 4: that really the rubber hitting the road. 406 00:20:10,400 --> 00:20:14,040 Speaker 7: Yeah, it's all the public companies, especially in technology, could 407 00:20:14,080 --> 00:20:18,240 Speaker 7: sell off as we get this supply of capital. Including 408 00:20:18,320 --> 00:20:21,160 Speaker 7: the largest companies, right, so they're they're trying to get out. 409 00:20:21,160 --> 00:20:23,960 Speaker 7: That's why Google was ahead of the curve. They guide 410 00:20:23,960 --> 00:20:27,280 Speaker 7: out while well at a peak, and the other ones 411 00:20:27,320 --> 00:20:32,240 Speaker 7: may not get that benefit all. Meta, Microsoft and Amazon 412 00:20:32,280 --> 00:20:36,040 Speaker 7: are already off their peaks, so there's going to be 413 00:20:36,080 --> 00:20:39,360 Speaker 7: selling in those selling and a lot of other technology stocks. 414 00:20:39,400 --> 00:20:42,680 Speaker 7: As we get these ideas, it doesn't it can happen anytime. 415 00:20:42,720 --> 00:20:45,080 Speaker 7: It happened the day before, and it can happen weeks before. 416 00:20:45,520 --> 00:20:49,159 Speaker 7: But investors do have to free up capacity. Investors are 417 00:20:49,160 --> 00:20:52,040 Speaker 7: mostly invested at this point. There's been not as much 418 00:20:52,080 --> 00:20:55,040 Speaker 7: cash on the sidelines as usual, and so they're going 419 00:20:55,080 --> 00:20:56,560 Speaker 7: to have to Investors are going to have to free 420 00:20:56,600 --> 00:21:00,200 Speaker 7: up capital from all their public company holdings, especially in 421 00:21:00,280 --> 00:21:03,640 Speaker 7: technology and including the largest ones, in order to fund 422 00:21:03,680 --> 00:21:07,119 Speaker 7: their investment in these ips. These floats are pretty decent sized. 423 00:21:07,400 --> 00:21:10,080 Speaker 7: We're talking about SpaceX doing at least seventy five billion 424 00:21:10,119 --> 00:21:13,399 Speaker 7: on Friday. Open Ai and Anthropic may be at the 425 00:21:13,440 --> 00:21:18,439 Speaker 7: same scale. They all need the capital, they're all losing money. 426 00:21:18,480 --> 00:21:22,920 Speaker 7: They all need to fund their compute and their buildouts. 427 00:21:23,320 --> 00:21:25,600 Speaker 7: So they're going to go out with pretty big floats, 428 00:21:25,680 --> 00:21:27,640 Speaker 7: and the capital has to come from somewhere. 429 00:21:27,840 --> 00:21:29,199 Speaker 1: The capital has to come from somewhere. 430 00:21:29,240 --> 00:21:31,520 Speaker 4: You mentioned it might mean people lightening up on some 431 00:21:31,600 --> 00:21:34,159 Speaker 4: of their holdings in big tech. But what other parts 432 00:21:34,160 --> 00:21:36,399 Speaker 4: of the tech universe are most vulnerable? 433 00:21:37,680 --> 00:21:41,239 Speaker 7: Yeah, I mean the AI trade in some parts of 434 00:21:41,280 --> 00:21:45,320 Speaker 7: it has gone up quite a bit, right because investors 435 00:21:45,320 --> 00:21:47,720 Speaker 7: haven't been able to invest in open AI and anthropic 436 00:21:47,840 --> 00:21:53,199 Speaker 7: yet they've been investing in increasingly remote parts of the 437 00:21:53,240 --> 00:21:58,200 Speaker 7: AI trade, some smaller semis companies, optical companies, nuclear companies, 438 00:21:58,640 --> 00:22:01,479 Speaker 7: all of these have been played on AI because you 439 00:22:01,520 --> 00:22:05,280 Speaker 7: couldn't buy open I and anthropic. Those with the higher 440 00:22:05,400 --> 00:22:09,080 Speaker 7: valuations and those tangential parts of the AI trade are 441 00:22:09,200 --> 00:22:12,320 Speaker 7: most at risk. I'd say that some of the core 442 00:22:12,320 --> 00:22:15,040 Speaker 7: AI trades are actually not that expensive. If you look 443 00:22:15,080 --> 00:22:19,320 Speaker 7: at Nvidia and Micron and Microsoft, these are companies that 444 00:22:19,400 --> 00:22:23,480 Speaker 7: are critical for deployment of AI, their multiples are still low. 445 00:22:24,000 --> 00:22:26,320 Speaker 7: But as you start getting further away from that, with 446 00:22:26,400 --> 00:22:32,160 Speaker 7: AMB and Intel and optical and again even nuclear or quantum, 447 00:22:32,480 --> 00:22:35,960 Speaker 7: you're starting to get really high valuations. Those are the 448 00:22:36,000 --> 00:22:36,879 Speaker 7: most vulnerable. 449 00:22:37,200 --> 00:22:37,400 Speaker 1: Good. 450 00:22:37,440 --> 00:22:38,800 Speaker 2: I just wanted to finish off on a lot of 451 00:22:38,880 --> 00:22:40,840 Speaker 2: questioning that skin opened up a little bit earlier on 452 00:22:40,840 --> 00:22:44,520 Speaker 2: this morning on open AI and why they're still private, 453 00:22:44,760 --> 00:22:46,200 Speaker 2: and when they seem to be dragging their feet a 454 00:22:46,240 --> 00:22:48,919 Speaker 2: little bit as well, why they're choosing ultimately to be 455 00:22:49,040 --> 00:22:51,919 Speaker 2: lost one of the benefits of them staying private at 456 00:22:51,960 --> 00:22:53,760 Speaker 2: the moment, why do you think they're somewhat hesitant. 457 00:22:54,560 --> 00:22:57,560 Speaker 7: There's a lot of gamesmanship Opening happening between Open AI 458 00:22:57,560 --> 00:23:02,040 Speaker 7: and Anthropic. Whoever goes first gets to drive the narrative 459 00:23:02,240 --> 00:23:05,960 Speaker 7: for what metrics are important, how to report their numbers, 460 00:23:06,680 --> 00:23:09,359 Speaker 7: and you don't want to be second because of the 461 00:23:09,400 --> 00:23:12,919 Speaker 7: conversation we just had about capital. So the reason Opening 462 00:23:12,960 --> 00:23:16,240 Speaker 7: I rushed for a confidential filing is to make sure 463 00:23:16,240 --> 00:23:20,359 Speaker 7: they have an opportunity either to either before Anthropic or 464 00:23:20,480 --> 00:23:26,399 Speaker 7: soon after and continue to drive the narrative. Otherwise they 465 00:23:26,560 --> 00:23:28,000 Speaker 7: let Anthropic do that. 466 00:23:28,359 --> 00:23:28,600 Speaker 1: Now. 467 00:23:28,720 --> 00:23:32,159 Speaker 7: As they did that, Sam Altman communicated that he'd rather 468 00:23:32,280 --> 00:23:34,760 Speaker 7: stay private, And the reason he'd rather stay private is 469 00:23:34,800 --> 00:23:37,480 Speaker 7: he's losing quite a bit of money and he can 470 00:23:37,760 --> 00:23:41,080 Speaker 7: as a private company only disclose the metrics he wants, 471 00:23:41,200 --> 00:23:44,920 Speaker 7: so he'd rather stay private. But he also doesn't want 472 00:23:44,960 --> 00:23:49,160 Speaker 7: to go after Anthropic. That's the gamesmanship that's happening right now. 473 00:23:49,960 --> 00:23:53,520 Speaker 2: This is the Bloomberg Sevendents podcast, bringing you the best 474 00:23:53,520 --> 00:23:56,600 Speaker 2: in markets, economics, an gie politics. You can watch the 475 00:23:56,640 --> 00:23:59,600 Speaker 2: show live on Bloomberg TV weekday mornings from six am 476 00:23:59,720 --> 00:24:03,680 Speaker 2: to nine am Eastern. Subscribe to the podcast on Apple, Spotify, 477 00:24:03,880 --> 00:24:06,119 Speaker 2: or anywhere else you listen, and, as always, on the 478 00:24:06,119 --> 00:24:08,560 Speaker 2: Bloomberg Terminal and the Bloomberg Business app.