WEBVTT - Bloomberg Surveillance TV: June 9th, 2026 0:00:00.080 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.000 Terminal and the Bloomberg Business app. We begin this out 0:00:37.000 --> 0:00:40.320 with the IPO pipeline heating cup at Semi staging a comeback. 0:00:40.400 --> 0:00:43.440 Jack Caffrey of JP Morgan Asset Management calling it a 0:00:43.440 --> 0:00:47.000 moderation Monday bounce, writing this one was even more likely 0:00:47.040 --> 0:00:49.320 given the sharpness of the sell off. Jack joins us 0:00:49.320 --> 0:00:51.320 now for more. Jack and Mornick, Good morning. He's still 0:00:51.320 --> 0:00:53.640 constructive on the secretary market chain. I'm still constructed on 0:00:53.680 --> 0:00:55.280 the mort What makes you constructive? 0:00:55.400 --> 0:00:58.480 Earnings? This is really, I think in earnings driven story. 0:00:58.600 --> 0:01:01.600 We came into through last year with a mid teen's 0:01:01.640 --> 0:01:06.160 earnings gain, several years into an economic expansion. Now we're 0:01:06.160 --> 0:01:08.800 looking at twenty two plus percent earnings growth for this 0:01:08.880 --> 0:01:12.640 year and looking to next year, we think that turns 0:01:12.680 --> 0:01:14.840 into still another mid teen sort of earnings gain. 0:01:15.240 --> 0:01:17.440 The biggest pushback we've had so far to earnings is 0:01:17.440 --> 0:01:21.120 technicals just feel very stretched. Friday in the minds of 0:01:21.200 --> 0:01:24.480 some was inevitable, and they'll be further follow through. Mak. 0:01:24.600 --> 0:01:26.200 I think that the issue is one of if you 0:01:26.200 --> 0:01:28.400 ask me what's going to happen in the next fifteen minutes, 0:01:28.440 --> 0:01:30.800 I have no particular insights. If you ask me what 0:01:30.880 --> 0:01:33.600 happens over fifteen to twenty four months, I'm going to 0:01:33.640 --> 0:01:36.880 come back to the interplay between earnings and expectations, where 0:01:36.920 --> 0:01:39.280 expectations a bit high. Ya look at the collapse in 0:01:39.319 --> 0:01:41.880 the vicks, look at how tight credit spreads are, but 0:01:41.920 --> 0:01:44.440 they're certainly telling you not a lot to be worried 0:01:44.440 --> 0:01:46.760 about here. So I'll come back to if we continue 0:01:46.800 --> 0:01:50.040 seeing positive earnings revisions, there are still legs to the story. 0:01:50.280 --> 0:01:52.480 Will we have bounces along the way, will we have 0:01:52.560 --> 0:01:54.960 some setbacks, will we find something new like, oh, I 0:01:55.040 --> 0:01:58.639 hadn't thought about that inevitably? And I think that lends 0:01:58.640 --> 0:02:01.280 it to a situation where the pullbacks will be short, 0:02:01.320 --> 0:02:02.240 but they will be sharp. 0:02:03.200 --> 0:02:05.480 You have tech and tech adjacent sectors, and of course 0:02:05.520 --> 0:02:07.640 the earning season was super for a lot of those. 0:02:07.920 --> 0:02:10.080 What about everyone else, What about the ones that aren't 0:02:10.080 --> 0:02:12.399 getting the benefit of the tech build out? 0:02:12.480 --> 0:02:15.400 Well, I think you have to when we think about 0:02:15.400 --> 0:02:18.200 the scale seven hundred and eight hundred nine, a couple 0:02:18.200 --> 0:02:21.320 of trillion dollars in capital spending over the next few years, 0:02:21.360 --> 0:02:24.840 in all likelihood, not all of that actually winds up 0:02:24.880 --> 0:02:27.520 going into semiconductors. You start off by having to build 0:02:27.520 --> 0:02:29.519 a shell. Then you have to build an ATRAX system 0:02:29.520 --> 0:02:32.360 in place, and you actually have to consume a lot 0:02:32.400 --> 0:02:35.160 of copper in order to actually tie that data center 0:02:35.280 --> 0:02:37.320 to the grid. You have to build the grid. You know, 0:02:37.360 --> 0:02:39.480 we have electric demand growing for the first time since 0:02:39.520 --> 0:02:43.240 the seventies, are materially growing since the seventies, and so 0:02:43.320 --> 0:02:46.239 I do think that there is maybe not trickle down 0:02:46.320 --> 0:02:49.239 that's a different part of the economy, but a trickle through. 0:02:49.919 --> 0:02:53.480 And I think it's important to consider the interplay between 0:02:53.480 --> 0:02:55.760 what people say and what people do, and when we 0:02:55.800 --> 0:02:58.520 think about the scale of backlog growth, it would suggest 0:02:58.560 --> 0:03:01.440 things are actually a little bit more than just asking 0:03:01.480 --> 0:03:02.400 people are you happy? 0:03:02.639 --> 0:03:04.760 So that filters through to the top line. Does it 0:03:04.800 --> 0:03:07.639 filter through to the bottom line as well with an 0:03:07.680 --> 0:03:09.720 hour of increased expenses for all these companies. 0:03:09.760 --> 0:03:11.240 Yeah, I think on the shorter term, we do have 0:03:11.240 --> 0:03:13.400 the acknowledge we live in a world of pretty interestingly 0:03:13.440 --> 0:03:16.600 high nominal GDP. When you think about you know, the 0:03:16.720 --> 0:03:20.320 Lanta Fed survey and Lanta Fed survey of GDP now 0:03:20.480 --> 0:03:23.519 pointing to four percent growth. You've got the Cleveland Fed 0:03:23.600 --> 0:03:26.920 survey of neartime CPI at four percent. You know, eight percent, 0:03:26.960 --> 0:03:29.760 that's pretty a robust environment. Would have in some sense 0:03:29.800 --> 0:03:33.840 have been thrilled to have in the in a decade ago. 0:03:35.440 --> 0:03:39.080 We are still seeing positive incremental margin expansion as companies 0:03:39.120 --> 0:03:41.040 still have fixed costs that they're absorbing. And so I 0:03:41.080 --> 0:03:43.880 do think that's how you can turn eight percent sort 0:03:43.920 --> 0:03:47.120 of top lines into twenty percent earnings gains in terms 0:03:47.120 --> 0:03:50.280 of companies still making their assets sweat harder and you know, 0:03:50.560 --> 0:03:53.000 perhaps with the threat of aim making their people sweat harder. 0:03:53.080 --> 0:03:55.280 They fed us let this run. Some people might say 0:03:55.440 --> 0:03:58.640 they've encouraged it. They reduced interest rates three times last year, 0:03:58.680 --> 0:04:00.640 three times the year before that. Is the FED about 0:04:00.640 --> 0:04:01.840 to step in and ruin the party. 0:04:02.920 --> 0:04:05.960 I'm really happy I'm not on the FED in terms 0:04:05.960 --> 0:04:09.120 of having to think about balancing between the policy pushes 0:04:09.120 --> 0:04:11.960 and pulls. You've got a very loud cheerleader who's going 0:04:12.000 --> 0:04:15.680 to be very active in social media expressing what policy 0:04:15.760 --> 0:04:18.440 they want, and then you've got a group of equally 0:04:18.760 --> 0:04:21.640 strong minded individuals on the FED board, most of whom 0:04:21.640 --> 0:04:27.200 have been indicating they think the situation requires moderating the 0:04:27.200 --> 0:04:29.119 punch bowl, if not actively taking it away. 0:04:29.480 --> 0:04:32.080 Short This headline might moderate the punch bowl. It just 0:04:32.120 --> 0:04:35.960 crossed on the Bloomberg terminal. Taiwan mullin curbs on ai 0:04:36.040 --> 0:04:39.320 Chipex sports to China to align with the United States. 0:04:39.320 --> 0:04:41.600 As we try and digest that headline as it just 0:04:41.640 --> 0:04:44.520 crosses the Bloomberg terminalor equity features taken just a little 0:04:44.520 --> 0:04:46.360 bit of a dip, We're still positive on the session 0:04:46.360 --> 0:04:47.880 by about a third of one percent on the S 0:04:47.920 --> 0:04:50.320 and P five hundred, that headline crossing just seconds ago. 0:04:50.680 --> 0:04:54.479 Taiwan considering curbs on ai Chipex sports to China to 0:04:54.560 --> 0:04:57.359 align with the United States. Scout at the latest on 0:04:57.400 --> 0:04:58.679 the Bloomberg terminal this morning. 0:04:59.000 --> 0:05:00.080 Yeah, that it. 0:05:00.120 --> 0:05:03.839 Gives you this sense that Taiwan is going to not 0:05:03.920 --> 0:05:06.320 bend over backwards, but make sure it aligns with the 0:05:06.440 --> 0:05:09.000 US in order to get the kind of arms deals 0:05:09.040 --> 0:05:12.520 and fulfill those contracts that had wanted from the United States. 0:05:12.600 --> 0:05:15.159 And we're already seen how President Trump is going to 0:05:15.200 --> 0:05:16.800 make sure that he is going to huge to what 0:05:16.920 --> 0:05:18.839 Hu Jing Pin wants in order to be able to 0:05:18.839 --> 0:05:20.320 move forward with their trading relationship. 0:05:20.320 --> 0:05:20.480 Too. 0:05:20.520 --> 0:05:22.320 With attempt to bring you about details on that stony 0:05:22.320 --> 0:05:24.359 in just a minment features still just a band positive 0:05:24.520 --> 0:05:26.240 on the S and P five hundred. Let's turn back 0:05:26.240 --> 0:05:29.000 to the Federates. Jack, you mentioned the cheerleader at the 0:05:29.000 --> 0:05:30.880 White House. You allD it to that. Does it make 0:05:30.920 --> 0:05:33.679 a difference that the president is calling for more right counts? 0:05:33.680 --> 0:05:37.000 Does not actually change up perception of future FED policy. 0:05:38.400 --> 0:05:41.680 I think that the President is an active user of 0:05:41.680 --> 0:05:44.520 the bullue pulpit, and in terms of whether it's what 0:05:44.560 --> 0:05:47.679 he would like to see in interest rate policy, clearly 0:05:47.720 --> 0:05:49.880 he did not have the impact that he was hoping 0:05:49.920 --> 0:05:52.440 to have in terms of the direction of rates over 0:05:52.440 --> 0:05:55.840 the last several months. He's certainly much more effective in 0:05:55.920 --> 0:05:57.760 terms of what he's doing with the oil market. I 0:05:57.800 --> 0:06:02.800 think certainly seemingly every weekend. When I talked about moderation Monday, 0:06:03.080 --> 0:06:05.200 I also thought maybe you would have called yesterday's step 0:06:05.200 --> 0:06:09.040 back Sunday. In terms of remain calm, oil prices are 0:06:09.080 --> 0:06:12.320 going to be going down any moment now, and effectively 0:06:12.320 --> 0:06:15.039 we're seeing that actually follow through at least right now 0:06:15.080 --> 0:06:16.279 from a trader's perspective. 0:06:16.720 --> 0:06:18.880 So let's bring it back to the equity market, because 0:06:18.920 --> 0:06:20.919 you have pointed out that energy is the most interesting 0:06:20.960 --> 0:06:23.480 sector in equity market because it sits at the intersection 0:06:23.520 --> 0:06:26.120 of so many different dynamics. How are you feeling about 0:06:26.120 --> 0:06:27.400 it right now versus a month ago. 0:06:27.920 --> 0:06:29.920 I think that ultimately the one thing I can subbout 0:06:29.960 --> 0:06:32.400 oil prices to start is oil prices are wrong. 0:06:33.160 --> 0:06:33.640 They're wrong. 0:06:33.720 --> 0:06:37.080 They're wrong. They if you look at the future's curve, 0:06:37.120 --> 0:06:39.359 they should be trending lower. I think the question is 0:06:39.440 --> 0:06:42.520 at what rate do they trend lower? At the same time, 0:06:43.160 --> 0:06:46.400 tankers aren't really transitting. We were reminded the blockade this 0:06:46.440 --> 0:06:49.919 morning remains one hundred percent effective, and that means we, 0:06:50.600 --> 0:06:52.760 I think, are not paying enough attention to the actual 0:06:52.760 --> 0:06:56.920 declines in physical inventory, and that even if you start 0:06:56.960 --> 0:07:01.279 actually getting crude flowing tomorrow or forty five days away 0:07:01.279 --> 0:07:05.240 from actual new supplies reaching to demand centers. And so 0:07:05.360 --> 0:07:08.400 in that environment of there's very few barrels to be bought, 0:07:09.000 --> 0:07:11.240 the possibility of very few barrels to be bought, you 0:07:11.360 --> 0:07:13.600 wind up with having these scenarios where oil might go 0:07:14.240 --> 0:07:16.640 not to ninety, not to one hundred, but potentially two 0:07:16.640 --> 0:07:18.760 one hundred and twenty five one hundred and fifty dollars, 0:07:19.280 --> 0:07:21.880 and that has an inflation knock on, and that is 0:07:21.920 --> 0:07:24.760 not something that FED can can easily control through thinking 0:07:24.800 --> 0:07:26.160 about either rates or money supply. 0:07:26.280 --> 0:07:28.400 Who seems to understand this better short term traders or 0:07:28.440 --> 0:07:29.360 long term investors. 0:07:29.480 --> 0:07:33.760 I think that there's probably an interesting time arbitrage between 0:07:33.800 --> 0:07:37.320 the two. Where the short term traders are looking at, 0:07:37.440 --> 0:07:41.360 you know, oil prices easing, they're looking at airline stocks 0:07:41.360 --> 0:07:43.960 making all time new highs. Forces you to scratch your 0:07:43.960 --> 0:07:47.000 head if you think about the possibility of physical shortages 0:07:47.480 --> 0:07:51.080 of someone who's certainly very operationally leveraged to what fuel 0:07:51.120 --> 0:07:53.760 prices wind up being or what they presold their tickets 0:07:53.800 --> 0:07:57.680 as being. And so I think that's where traders are 0:07:57.680 --> 0:08:00.240 responding to them is literally tweet by tweet, truth by 0:08:00.240 --> 0:08:05.160 truth versus investors are saying, interesting, I don't really see 0:08:05.160 --> 0:08:09.040 the path forward. And yet as much as you think 0:08:09.080 --> 0:08:12.960 about an energy dominance theme, large oil companies are at 0:08:13.040 --> 0:08:17.680 least being very slow with increasing their Historically, the rule 0:08:17.720 --> 0:08:20.480 of thumb as high price is secure high prices, and 0:08:20.560 --> 0:08:24.120 yet normally the cure for high prices is actually increasing supply. 0:08:24.640 --> 0:08:27.520 No one's really rushing to increase supply, and I would 0:08:27.600 --> 0:08:30.760 suggest over time oil needs to be higher because I 0:08:30.800 --> 0:08:35.120 think the world has realized that the choke point, which 0:08:35.240 --> 0:08:37.840 is the Strait of Horror Moves, is probably unacceptable for 0:08:37.960 --> 0:08:40.439 the global economy. And so how do you incentivize more 0:08:40.480 --> 0:08:43.160 production out of South America, more production out of Africa? 0:08:43.760 --> 0:08:46.280 Reroute around some of the other choke points, which is 0:08:46.280 --> 0:08:48.400 not just the Strait of horm Moves, but potentially even 0:08:48.440 --> 0:08:51.720 the Suez Canal, depending on what total victory looks like 0:08:51.800 --> 0:08:54.319 in terms of where parties settle out. 0:08:54.559 --> 0:08:55.199 Stay with us. 0:08:55.520 --> 0:08:58.040 More Bloomberg Savanance coming up after this. 0:09:07.320 --> 0:09:09.439 We thought the President was breaking some news on Friday 0:09:09.440 --> 0:09:12.240 when he was gaggling with reporters, including myself on Air 0:09:12.280 --> 0:09:14.720 Force one, and then we get these reports that actually 0:09:14.760 --> 0:09:19.240 it was news to those companies themselves anthropic, opening Eye SpaceX. 0:09:19.440 --> 0:09:22.120 But the direction of travel is clear in terms of 0:09:22.160 --> 0:09:24.640 what this White House wants to do when it comes 0:09:24.679 --> 0:09:28.079 to these AI companies, especially as all of them prepared 0:09:28.080 --> 0:09:30.200 to go to the market. Jennifer Huddleson joins me, now 0:09:30.280 --> 0:09:34.040 Senior Fellow in Technology Policy at the Cato Institute. Jennifer, 0:09:34.040 --> 0:09:36.000 good morning, Thanks for joining me. Good morning, Thanks for 0:09:36.000 --> 0:09:37.440 having me. So you're spending a lot of your time 0:09:37.480 --> 0:09:40.719 right now focused on this. The President talks about concepts 0:09:40.800 --> 0:09:43.440 of ideas in terms of how there could be more 0:09:43.559 --> 0:09:46.800 of a public private partnership when it comes to these 0:09:46.840 --> 0:09:49.880 AI companies. What do you think some of the policy 0:09:49.920 --> 0:09:53.280 proposals this White House maybe Congress could actually land on. 0:09:53.720 --> 0:09:55.280 You know, there's a big difference in kind of the 0:09:55.320 --> 0:09:57.840 idea of a public private partnership and what we're seeing 0:09:57.880 --> 0:10:01.080 in terms of calls for government investors in some of 0:10:01.120 --> 0:10:04.120 these leading companies. One of the real concerns is that 0:10:04.160 --> 0:10:07.720 if we see government investment, if we see significant government involvement, 0:10:08.000 --> 0:10:10.600 that could lead to the government picking winners and losers 0:10:10.800 --> 0:10:13.839 at a time when this industry is incredibly dynamic and 0:10:13.880 --> 0:10:17.319 where we don't necessarily know where the full applications of 0:10:17.320 --> 0:10:20.079 the technology are going or who those leaders are going 0:10:20.120 --> 0:10:23.000 to be when it comes to what consumers actually need 0:10:23.040 --> 0:10:23.680 and want. 0:10:23.920 --> 0:10:27.000 Do you feel that this White House already has done that? 0:10:27.040 --> 0:10:27.280 Though? 0:10:27.320 --> 0:10:29.240 So why would they stop here when you think of 0:10:29.760 --> 0:10:33.520 MP Materials and Intel? Why would they stop at the 0:10:33.520 --> 0:10:38.480 AI companies? Which is also a welcome policy perposal on 0:10:38.559 --> 0:10:39.280 the far left. 0:10:39.440 --> 0:10:41.240 You know, you mentioned there does seem to be this 0:10:41.440 --> 0:10:45.400 odd horseshoe where you have Senator Bernie Sanders proposing a 0:10:45.480 --> 0:10:49.440 sovereign wealth fund to invest in AI companies, and then 0:10:49.440 --> 0:10:51.640 you've had these kind of rumors out of the White 0:10:51.640 --> 0:10:55.040 House of a very similar proposal. You mentioned the past 0:10:55.080 --> 0:10:57.880 actions around for example, Intel, and one of the things 0:10:57.880 --> 0:10:59.920 we can see there is the impact that this can 0:11:00.120 --> 0:11:05.280 have on private investment, on presumptions around how these companies 0:11:05.280 --> 0:11:07.720 are going to develop, And that's something to also consider. 0:11:08.040 --> 0:11:11.040 What does this mean not only for these companies and 0:11:11.120 --> 0:11:13.720 for the AI industry, but what does it also mean 0:11:14.000 --> 0:11:16.400 for the market environment around these companies. 0:11:16.520 --> 0:11:18.520 Jonathan and I have been speaking about this all week, 0:11:18.559 --> 0:11:20.440 and a question he brought up yesterday is do the 0:11:20.480 --> 0:11:23.320 companies want to share in the profits with the US 0:11:23.480 --> 0:11:26.000 government or do you think they want to get involved 0:11:26.000 --> 0:11:29.760 with the US government to potentially protect against the downside? 0:11:30.040 --> 0:11:32.360 One of the big concerns with the kind of government 0:11:32.440 --> 0:11:35.640 investment is a risk of cronyism, a risk that only 0:11:35.679 --> 0:11:38.920 those large companies could be the ones that could potentially 0:11:39.040 --> 0:11:41.920 navigate these things. What does that mean for smaller players 0:11:41.960 --> 0:11:44.760 who might emerge as leaders in the future, and also 0:11:44.840 --> 0:11:47.480 what does that mean for the involvement of the government 0:11:47.600 --> 0:11:51.280 in this technology that's so critical to access to information, 0:11:51.520 --> 0:11:56.880 to the opportunities for many potential innovations and applications. Is 0:11:56.880 --> 0:11:58.800 that the type of thing where you may see a 0:11:58.800 --> 0:12:02.560 politicization of certain policies, of companies not being willing to 0:12:02.600 --> 0:12:06.520 offer certain products because they're worried what government regulators might 0:12:06.559 --> 0:12:07.240 think about that. 0:12:07.400 --> 0:12:09.080 Or how they might find that disfavored. 0:12:09.240 --> 0:12:11.320 Do you think the IPOs are pushing the government to 0:12:11.400 --> 0:12:14.480 act because we're going to see SpaceX go public on Friday, 0:12:14.520 --> 0:12:17.000 then it's going to be open AI and Inthrapic, and 0:12:17.040 --> 0:12:22.200 we're seeing these companies inc valuations that are so not 0:12:22.440 --> 0:12:26.480 normal when it comes to IPOs and going public on 0:12:26.920 --> 0:12:27.800 public markets. 0:12:28.000 --> 0:12:31.480 There's a lot of excitement around AI, around its potential 0:12:31.520 --> 0:12:34.560 both in the markets, as well as in individual businesses 0:12:34.679 --> 0:12:38.360 and their potential applications of AI. I think that we're 0:12:38.400 --> 0:12:40.360 also in a moment where we're still seeing a lot 0:12:40.400 --> 0:12:44.079 of potential fears, a lot of potential concerns around AI, 0:12:44.120 --> 0:12:46.319 and a lot of uncertainty of what that means. 0:12:46.040 --> 0:12:47.520 For jobs or things like that. 0:12:47.840 --> 0:12:49.960 So I don't think that we can say hard and 0:12:50.040 --> 0:12:54.000 fast whether this is a result of interest in IPOs, 0:12:54.240 --> 0:12:56.920 but more just a continuing question of what the US 0:12:57.000 --> 0:12:59.160 approach to AI policy should look like. 0:12:59.280 --> 0:12:59.760 You mentioned this. 0:13:00.400 --> 0:13:02.959 You have Bernie Sanders on the far left. I asked 0:13:03.000 --> 0:13:05.520 Trump about this, and he said that they actually share 0:13:05.600 --> 0:13:09.920 some economic thinking similarities, and that he took some of 0:13:09.960 --> 0:13:12.960 Bernie's voters. Then you have individuals like even Steve Bannon 0:13:13.040 --> 0:13:15.440 on the far right who think Bernie Standers doesn't go 0:13:15.520 --> 0:13:16.079 far enough. 0:13:16.400 --> 0:13:19.240 It does feel like Washington will do something. What do 0:13:19.280 --> 0:13:20.440 you think would be appropriate? 0:13:20.880 --> 0:13:23.280 I think it's really important that we remember why a 0:13:23.400 --> 0:13:26.240 light touched approach to innovation has allowed the US to 0:13:26.240 --> 0:13:28.280 be a leader in the Internet era, and then we 0:13:28.320 --> 0:13:30.800 consider how that might play out in the AI era. 0:13:31.160 --> 0:13:34.280 There may be a need for clear policy guardrails around 0:13:34.280 --> 0:13:37.400 some of the issues like government use of AI. But 0:13:37.600 --> 0:13:40.600 when we're thinking about how this technology could potentially evolve 0:13:40.640 --> 0:13:43.760 in its most beneficial ways, we should want consumers and 0:13:43.800 --> 0:13:46.600 innovators in the market to be the ones that decide 0:13:46.640 --> 0:13:50.320 all the potential application, rather than bureaucrats dictating that this 0:13:50.440 --> 0:13:53.160 technology can only evolve in one particular direction. 0:13:53.320 --> 0:13:55.719 Do you think executives are more willing to work with 0:13:55.760 --> 0:13:57.719 the government on this and potentially even give them the 0:13:57.840 --> 0:14:01.920 stake because they know there's going to be public backlash 0:14:01.960 --> 0:14:04.280 When we've seed so much public backlash, especially recently at 0:14:04.280 --> 0:14:07.719 commencement speeches, there's a lot of anxiety. Bernie Standers is 0:14:07.760 --> 0:14:10.959 talking about the fact that AI models run based off 0:14:11.000 --> 0:14:13.439 of all of our collective work as a society. 0:14:14.000 --> 0:14:16.920 There's certainly a lot of discomfort in the public around AI, 0:14:16.960 --> 0:14:18.959 and I think it's important that we remember all the 0:14:18.960 --> 0:14:21.760 benefits of AI and that AI isn't just products like 0:14:21.840 --> 0:14:25.640 chat GPT. We're seeing things like amazing medical research advances, 0:14:25.640 --> 0:14:29.520 We're seeing better predictions for natural disasters. We're seeing a 0:14:29.560 --> 0:14:32.640 lot of applications of AI that the average individual might 0:14:32.720 --> 0:14:35.680 not be aware about or thinking about, and that therefore, 0:14:35.680 --> 0:14:38.400 when we're thinking about AI, we have to think much bigger, 0:14:38.760 --> 0:14:40.840 including when we're thinking about AI policy. 0:14:41.000 --> 0:14:44.080 You're very optimistic on the future of AI. A lot 0:14:44.120 --> 0:14:46.720 of people are nervous that it would mean loss of 0:14:46.800 --> 0:14:47.760 jobs in this country. 0:14:47.880 --> 0:14:49.640 You know, I think it's okay to be nervous on 0:14:49.680 --> 0:14:52.360 an individual level, but we've been there and we've had 0:14:52.360 --> 0:14:55.880 this uncertainty around other automation technologies in the past, whether 0:14:55.920 --> 0:14:58.640 it was questions of what would ATMs do to teller 0:14:58.760 --> 0:15:01.760 jobs or the rise of EXCEL in the financial sector. 0:15:02.120 --> 0:15:04.640 What we find is that typically when these new technologies 0:15:04.680 --> 0:15:07.720 come in, yes, there is some displacement, but there is 0:15:07.840 --> 0:15:11.840 also a lot more opportunities that are created by those efficiencies, 0:15:11.840 --> 0:15:14.640 and there are also opportunities that often lead to more 0:15:14.760 --> 0:15:18.920 enjoyable work and more opportunities in the future as well. 0:15:19.120 --> 0:15:21.240 We talk about what the government is using in terms 0:15:21.280 --> 0:15:24.280 of AI right now. It was a little bit confusing 0:15:24.320 --> 0:15:28.120 because clearly the DoD is still running Anthropic, but they're 0:15:28.160 --> 0:15:31.080 giving them six months. The dd is giving itself six 0:15:31.120 --> 0:15:33.600 months to wind that down and use other partners. 0:15:34.040 --> 0:15:36.160 What does it mean for ANTHROPIC. 0:15:35.720 --> 0:15:38.480 To be used especially methos across other agencies in the 0:15:38.520 --> 0:15:42.880 government but still be a supply chain risk considered a 0:15:42.880 --> 0:15:44.680 supplying chain risk at the Pentagon. 0:15:45.320 --> 0:15:47.560 This is a really complicated question and wine of the 0:15:47.640 --> 0:15:49.880 questions we really need to be discussing when it comes 0:15:49.880 --> 0:15:54.000 to potential guard rails for artificial intelligence. There are certainly 0:15:54.040 --> 0:15:58.000 benefits of the government using artificial intelligence to better service constituents, 0:15:58.040 --> 0:16:00.880 to better service citizens, but there are also unique civil 0:16:00.960 --> 0:16:03.560 rights and civil liberty concerns when it comes to the 0:16:03.560 --> 0:16:07.800 potential use of AI, for concerns related to domestic surveillance 0:16:07.880 --> 0:16:10.440 or autonomous lethal weapons, many of which were at the 0:16:10.480 --> 0:16:13.240 heart of the dispute between the Pentagon and Anthropic. 0:16:13.280 --> 0:16:14.000 A few weeks ago. 0:16:14.160 --> 0:16:16.480 I spoke to Under Secretary of Neil Michael about this 0:16:16.720 --> 0:16:19.920 and he said, there's no talks anymore left between DoD 0:16:20.000 --> 0:16:23.360 and Anthropic, but we have seen the Andthropic CEO have 0:16:23.440 --> 0:16:26.320 meetings in Washington, even with the Chief of Staff Susie Wilds. 0:16:26.800 --> 0:16:28.640 Do you think that's going to get patched up? 0:16:29.120 --> 0:16:31.280 You know, it's a complicated situation, and I think there 0:16:31.280 --> 0:16:33.920 are two factors there. There's the question of the decision 0:16:33.960 --> 0:16:37.240 around the contract, which could be a normal dispute between 0:16:37.240 --> 0:16:41.120 a government contractor and a government agency. But what made 0:16:41.120 --> 0:16:43.920 this so unique was the supply chain designation, and that's 0:16:43.960 --> 0:16:47.240 what raised serious concerns when it comes to questions around 0:16:47.320 --> 0:16:50.520 free speech, around the potential government influence in this very 0:16:50.560 --> 0:16:51.480 important market. 0:16:51.880 --> 0:16:55.320 Stay with us multiple IMPEX surveillance coming up. Off to this, 0:17:04.600 --> 0:17:08.120 Let's get to those IPOs. Open AI entering the race 0:17:08.160 --> 0:17:11.240 to go public submitting it's confidential filing for an IPO, 0:17:11.359 --> 0:17:14.680 Gil Loria of DA Davison writing, what open ai does 0:17:14.720 --> 0:17:18.320 not want is for the public market capital to exhaust itself. 0:17:18.600 --> 0:17:20.800 It does not want to be the third and last 0:17:21.040 --> 0:17:23.480 of the large IPOs. Gil joins us now for more 0:17:23.680 --> 0:17:25.600 and Gil, welcome to the program. There might not be 0:17:25.680 --> 0:17:27.800 the only thing to worry about, not just the IPOs, 0:17:27.800 --> 0:17:31.240 but also Alphabet with an upsized capital raise as well 0:17:31.280 --> 0:17:33.120 in the last week. And Gil, as you pointed out, 0:17:33.160 --> 0:17:36.199 before we even got the rumor from the ft on Meta, 0:17:36.600 --> 0:17:39.560 you might see Meta and the others follow. It will 0:17:39.600 --> 0:17:41.480 just frame for us how much equity we could see 0:17:41.520 --> 0:17:44.160 come into this market in the next six months. 0:17:45.119 --> 0:17:50.040 Hundreds of billions of dollars of new equity because Microsoft, Amazon, 0:17:50.080 --> 0:17:53.399 and Meta just took note that Google, that Alphabet just 0:17:53.440 --> 0:17:58.119 had a very successful equity raise. Did the stock held 0:17:58.240 --> 0:18:01.560 up even as they issued for already something billion dollars 0:18:01.560 --> 0:18:04.480 of equity. They're able to raise dead at the same time, 0:18:04.720 --> 0:18:07.760 all at a very low cost of capital. And this 0:18:08.000 --> 0:18:11.480 is a war for capital, so this is where it's at. 0:18:11.920 --> 0:18:15.000 And these companies are filing a secondary so they can 0:18:15.040 --> 0:18:19.879 do that overnight, while the IPOs take time to go through. 0:18:20.600 --> 0:18:24.439 So the big companies that are all ready public are 0:18:24.480 --> 0:18:27.600 going to the capital markets and draining them before many 0:18:27.640 --> 0:18:31.200 of these IPOs are happening. SpaceX will hopefully happen this Friday, 0:18:31.640 --> 0:18:34.479 but open AI and Anthropic may get to a market 0:18:34.520 --> 0:18:36.000 that's somewhat depleted. 0:18:36.119 --> 0:18:36.399 Now. 0:18:36.720 --> 0:18:38.879 The demand for those IPOs is going to be so 0:18:39.119 --> 0:18:43.520 great that they'll do fine, but the market is finite, 0:18:43.600 --> 0:18:46.720 and we've already seen some volatile days where investors have 0:18:46.800 --> 0:18:51.320 been selling stock to free up capacity to participate in 0:18:51.400 --> 0:18:55.280 these offerings and IPOs, So it's getting crowded out there. 0:18:55.359 --> 0:18:58.080 Gill, how much tolerance is there at say a METSA 0:18:58.800 --> 0:19:02.680 to ready stomach the pushback. What was intriguing about Friday 0:19:02.760 --> 0:19:05.080 was just how quickly that stuff rolled over, just on 0:19:05.119 --> 0:19:07.680 the mere report in the ft that maybe they'd follow 0:19:07.720 --> 0:19:10.760 Alphabet and do something similar it's that something they can stomach. 0:19:10.760 --> 0:19:13.240 Are we underestimating that tolerance for that? 0:19:14.560 --> 0:19:19.160 Well, mister Zuckerberg has controlling interest, and he's shown that 0:19:19.480 --> 0:19:22.879 his perspective is always long term. He rarely tries to 0:19:23.960 --> 0:19:27.520 satisfy investors in the short term. If he feels like 0:19:27.640 --> 0:19:29.600 this is the time to go out and get the capital, 0:19:29.880 --> 0:19:32.399 he'll do so. He'd rather do it at a higher price. 0:19:32.520 --> 0:19:36.760 But he's shown through his spending and through being very 0:19:36.880 --> 0:19:40.000 clear about the fact that he's investing ahead of demand, 0:19:40.560 --> 0:19:42.959 that he has tolerance for that. And if he thinks 0:19:43.359 --> 0:19:46.000 capital is the key to compete right now, he'll go 0:19:46.040 --> 0:19:48.560 out and get capital regardless of where the stock is. 0:19:49.240 --> 0:19:51.520 Gil you said the market is finite. Where is the 0:19:51.560 --> 0:19:54.720 market finite? It's not for the big aiipos that we're 0:19:54.720 --> 0:19:59.240