Bloomberg Businessweek Weekend - December 8th, 2023 - Bloomberg Businessweek

Episode Transcript
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Speaker 1 (00:01):
This is Bloomberg business Week Inside from the reporters and
editors who bring you America's most trusted business magazine, plus
global business finance and tech news. The Bloomberg Business Week
Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.

Speaker 2 (00:20):
Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
This past week we got a pulse check on the
US labor force with the release of the November jobs report.
Ahead on the program, we'll hear from the CEO of
International Workplace Group better known as IWG, about why big
markets like New York have little hope of ever getting
most people back into the office five days a week.

(00:41):
We're also talking tech, and plenty of it, including how
Israel's war with moss is affecting the country's most important
business sector, ways co founder Ory Levine ways En, plus
the next generation of artificial intelligence is already here. Find
out what the newest tools can do from the CEO
of publicly traded Big Bear AI and where the biggest
threats in them could lie From the President of IDC

(01:02):
Crawford del Pratt. All of that to come. We begin
with a frontier that is still largely out of reach
for most space, the magazine devoting this week's business section
to it, including a story on developing drugs in micro gravity.
Here to explain the space race happening inside the pharmaceutical industry,
our Bloomberg News healthcare reporter Bob Langres and BusinessWeek editor
Joel Weber.

Speaker 3 (01:22):
So, we're decided to do a little space package.

Speaker 4 (01:25):
There's a lot happening up there, it turns out, and
there are some expected things like what SpaceX is up
to you and the race to catch them, but there's
also I thought, some more interesting things of like applications
that you probably never heard of. And it turns out
that you know, you mentioned micro gravity there there are
some novel use cases for what can be accomplished in space.

(01:47):
So Bob walk us through it is what can we
do in space that we can't do as well here
on Earth.

Speaker 5 (01:54):
Yeah, So it turns out, you know, a lot of
the drugs that drug makers are making these days are proteins,
things like monocle and antibiodies or cancer drugs, and these
are that are that are infused and these are you know, complicated,
finicky molecules, the notoriously difficult to produce on Earth in
their crystal form. So it turns out that without gravity,
or without much gravity, you know, it becomes much it's

(02:15):
much easier to form like a large, large and very
uniform crystals, and that, as it turns out, and enhance
formulations and even potentially some existing drugs. So drug maker
merk it's working. It's worked on a new formulation of
it's just blockbuster cancer drug k Tuda. Now that's the
cancer drug that Jimmy Carter got. It's sort of melanoma

(02:37):
and all sorts of other ones. But right now it
must be infused like you have to go to the
doctor's office and infused over a couple hours. And the
dry it would really like to put that in injectable forms.
You could do just a self administered injection potentially even
at home. But to do that, it needs to be
able to concentrate that con true to much more to
be concentrated now and if you did it with the
current formulation, to be get like molasses. So it turns

(02:59):
out they did some in space and the International Space
Station and they came up with a way to concentrate
it much more and keep it fast flowing. And the
concept for was first device in space and the fact
that they might go into clinical trials is something that
was the first you know devised in space that's excited
a lot of gotten a lot of interest in you
know space spaceed drug development and other companies like Eli

(03:20):
Lillie is up there with some experiments now, and you
even now have startups that once the International Space Station
is decommissioned, you know, sometime after twenty thirty that are
working on developing you know, automated kind of drug formulation
laboratories in space. It's sense on experiment up and then
it come back down and drug companies could work on it.

Speaker 3 (03:39):
Okay, so when does this happen? Why don't we have
this already?

Speaker 4 (03:44):
Bob?

Speaker 5 (03:45):
Well, you know, these are all kind of like, you know,
I'd like to say, these are all kind of like
early experiments. So say they're drug companies and setting up
experiments by the way out into space for really for decades,
and they're their first experiments were kind of like early
stage aimed at like early stage drug crystallization works to
crystallize GOT disease more promoting proteins so they could design

(04:06):
better drugs. And in fact, a unit of a suka Holdings.
That's the Japanese company. They have a drug in final
stage trials in Japan for muscular dystrophe. There was was
base and some very early work, you know, done early
in the early days of International Space Study space station
crystallizing a muscular dystrophy associated protein. But what's happening now

(04:27):
is there actually Americans and others are showing you could
actually devise you know, better formulations of existing blockbuster drugs,
and that's really driven the attention to like maybe space
is like you know, could really like help us get
some new patents and make a lot of money. So
that's really driven interest.

Speaker 4 (04:43):
So whose job is it to figure out how to
do this in space? Like, you know, Tim, Tim, if
you're going to make you know, car breaks in space,
I'm sure you can figure that out.

Speaker 2 (04:54):
But Bob, you don't want to see how far I
made it from the math in college.

Speaker 4 (05:00):
But within the pharmat, like, whose job is it to
figure out space manufacturing?

Speaker 5 (05:05):
Yeah, So at the big you know, drug makers, there's
relatively you know, small numbers of people like working on it,
so it's still a niche field. I'd say, you know,
if you go to a big drug maker, I would image.
There's probably a lot more people work around AI either space,
but you know, you know, space is like you know,
garnering interest. Some of the people I talk to, their
titles are like, you know, director of Formulations, development titles

(05:26):
like that. But these experiments are are hard. You know,
you you send something up to the space station and
you know you get it back down a few months later,
and if you like screwed up in the design and
the experiment, you know your next shot and the next
experiment maybe you know six months later. So you gotta
got you gotta do it. Be very careful with experimental design.
You can't, like it's hard to call an astro and say, hey,

(05:47):
I want to change everything midstream once is up there.
So there's even a whole set of like companies that
help drug makers like have like self enclosed experiments that
can send up that are like all ready to go.
The astronart press is a couple button to turn it
on and then press the couple buttons to turn it off.
You know, you can't it's hard to adjust the audition mystery,
and once you're up in space.

Speaker 2 (06:06):
The button pressing job it doesn't sound that So Bob,
I want to get to this idea of scaling and
make sure I understand what's actually happening in space. I
want to go back to the company that you used
in the lead here, LAMB Division, who's working on the
world's first protein based artificial retina for patients with retinitis pigmentosa. So,
if it's so hard to actually create these two hundred

(06:29):
paper thin layers of light sensitive protein in on Earth,
does that mean that they won't be able to scale
it in an environment that's not zero gravity.

Speaker 1 (06:42):
Yeah.

Speaker 5 (06:42):
So they're one of the few companies that's right now
is talking about actually, as I understand it, manufacturing and
finished product, you know, in space. And if you think
about their product, it's like literally it's a size of
a whole punch, like a paper whole punch. That's like,
you know, so you get I guess you get one
or two of these if you're a patient. So they
don't need that much finished product. You know, it's a
relatively small market. I mean, this is not like an

(07:05):
infused drug where you're going to be giving you know,
two hundred millimeters every two weeks for the rest of
your life. That's more like merks k true to the
they make it, Mark and K true to their cancer drug.
They make it like by the ton on Earth and
their experiments in space. So far, I've made like one
dose at a time, so you can see that it's
not right now practical. Wouldn't be even if there are
even though there are technical advantages, it would not be

(07:27):
practical for them to make the finished product in space.
But for something like this artificial retina, where the total
quantities needed are very very small, and I imagine if
we ever get this to market, it's going to be
sold for a very high price. You know, you can
imagine that's an actual like possibility to actually make that
in space.

Speaker 4 (07:43):
Would you take the one jose that's been made in space,
knowing that there's massive quantities on Earth, it's practically the
same thing. It's just been made in space. Like, why
wouldn't Why wouldn't I do it?

Speaker 2 (07:56):
Why not?

Speaker 4 (07:58):
I don't know?

Speaker 5 (08:00):
Is the true question that rises the whole regulatory question.
No one's even got to, like, you know, if something
actually were made in space, or even if like there's
another idea they're talking about, it's making like a seed
crystal in space, use the better conditions of space to
make like little seed crystals that they could then be
used sort of like a sour to start being brought
down to Earth and able to grow bigger quantities on Earth.

(08:20):
But even there, like the FDA, how would the FDA
regulate that, there's a whole I guess said of unknown
like questions there.

Speaker 6 (08:27):
Yeah, FDA is not having any problems with oversight. We
did that story actually earlier today, having said that, how
easy is is you duplicate the process of space drug
or manufacturing drugs in space on Earth? Can we create that,
recreate that?

Speaker 3 (08:42):
Yeah?

Speaker 5 (08:43):
So the way to think of it with some of
these drug formulations are trying to make better, like easier
to use injectable drug formulations. And the way to think
about that is that there's just like you know, there's
a million conditions you can put in to get something
to crystallize, the temperature, the pressure, you know, the concentrations,
many men conditions you can try almost an infinite number,
and just things form a little without the microgravity because

(09:04):
crystals are these kind of slow forming, finicky things, and
without the convection is one of the things that goes
away the fluid convections. So and that's reduced and that
gets better, just gets better quality crystals in many cases.
And so the way to think about it is they
get an idea in space like in these better conditions,
and then once they know what they're looking for, they

(09:26):
then find you find a way to duplicate that back
at the factory here on Earth. And that's what Merk
did with this new formulation of k truda that may
go into clinical trials.

Speaker 4 (09:35):
Okay, So so Merk seems to be all over this.
What about other drug manufacturers are you know, is there
really a race like as often is the case in
space space or is everybody.

Speaker 2 (09:48):
Else space race?

Speaker 5 (09:51):
So Mark has a competitor in cancer drugs, and that's
Bristol Myers Squid and they make a rival to k
tree called Abdivo, and they indeed are putting experiments up
into space. Look you're looking at protein crystallation, you know,
and you know they they do say it includes cancer,
but they won't to say which drugs and are involved.
But all I can say is they do make a

(10:12):
direct rival to k truda. So, you know, drug companies,
you know, historically you know, once one company does something,
you know the others want to try it out.

Speaker 6 (10:20):
The wait, not like a dry diet drug or anything.

Speaker 5 (10:24):
Yeah, well, so far I've not heard of any diet drugs,
you know that maiden space. But you know, I'll keep reporting.

Speaker 4 (10:31):
We should make journalism in space, just so are volunteering together.
I mean, you know, Bob Bob was already going to
go check it out. So most cost effectively, if incorporated card.

Speaker 2 (10:43):
We'll cover that SpaceX trip.

Speaker 6 (10:45):
Okay, Hey, listen, I hate to be a bummer on
all of this, but isn't the International Space Station at
risk of being decommissioned after twenty thirty? So, like does
that put kind of a damper.

Speaker 7 (10:55):
On all on this?

Speaker 5 (10:56):
Well, there's companies, like you know, there's like private startups
and core working on like what's after the space station.
There's one small one, you know, startup that actually has
like a little satellite that's like a little drug production lab.
They hope it's going to be a little automated drug
formulation production lab up there. Now for their first mission,
they've had some problems getting the reentry capsule back down

(11:17):
because they need FAA Federal Aviation Administration permission. They haven't
been able to get it yet. So it illustrates some
of like you know the potential snags involved in space
based production.

Speaker 4 (11:29):
Yeah, okay, well we know where Big Pharma is, which
is the final frontier. You know, I'm curious to see
if if this is for real though. I mean, like, sure,
you can make a couple of applications, but scale seems
maybe not easy to get there. Tim's going to try
break pads and report back.

Speaker 2 (11:48):
But the payoff is potentially huge here. I mean, if
you can cure blindness with artificial retinas, Like even though
Bob says it's a relatively small number of people, I mean,
people would pay so much for that.

Speaker 3 (11:58):
You need is you know, some micro gravity?

Speaker 1 (12:01):
What's that?

Speaker 3 (12:02):
That's why it's there for you.

Speaker 5 (12:04):
I think the key word we use in the headline
was that the drug companies are exploring this, you know,
yeah right, not a donk deal. And you know, I
think the way to think of it, they're doing experiments
up there that are going to help help them, you know,
devise new formulations and new versions of their drugs, but
it doesn't necessarily I mean those they are actually those
final drugs are actually going to be produced in space.

Speaker 3 (12:23):
I think we call that the to be sure graph
or the third word in the headline.

Speaker 6 (12:29):
I'm just going to say thank you, Bob, because I've
been just saying drugs.

Speaker 3 (12:32):
In space It sounds really cool.

Speaker 6 (12:35):
It does sound really cool. I'm very interesting in terms
of maybe what we could see down the road. Bub landgread.

Speaker 3 (12:41):
Thank you so much.

Speaker 6 (12:42):
Everything you do is just we learned something and it's
a fun read and interesting read. Healthcare reporter here at
Bloomberg News on zoom in San Francisco. He is not
on the International Space DAG.

Speaker 2 (12:52):
As far as we know, despite the fact that there
were some Internet connectivity issues. But yeah, never know, really
really interesting stuff. I'll be the guy who presses the
button stroll that sounds like it.

Speaker 6 (13:03):
We can fight over it maybe, yeah, exactly what has
Joe Weber, of course, the editor of Bloomberg Business We
check this out in an upcoming new issue of Bloomberg
Business Week. It's also online.

Speaker 1 (13:13):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from three to six Eastern Listen.

Speaker 8 (13:20):
On Bloomberg dot com, the iHeartRadio app, and the Bloomberg
Business app, or watch us live on YouTube.

Speaker 9 (13:28):
Well.

Speaker 6 (13:28):
As the COVID pandemic fades into the past, many things
have returned to normal, the world of work has not. Companies, employees,
and governments still figuring out how to adapt to lasting
changes to corporate life sparked by widespread lockdowns. I put
millions onto a work from home schedule at stakes. At
stake really worldwide aren't just norms for office life, but
really the economic health of big cities as well, particularly

(13:50):
in the United States. We have a great voice to
talk to us about what's going on in the workplace environment.

Speaker 2 (13:54):
Yeah, let's checked in with him a little over a
year ago. It feels like so much has happened, and
since then, so much has been talked about. One company,
one person who's at a front seat to all of
this is the London listed office space provider IWG. We've
got back with us Mark Dixon, founder, executive director, a
CEO of IWG. That's International Workplace Group. He's with us
here in our Bloomberg Interactive Brokers studio. Talk to us

(14:15):
a little bit about the footprint that you have and
where else you've traveled.

Speaker 7 (14:19):
US is our biggest market's about it's more than half
of the business and we've been here for more than
thirty years in the US, but the growth is now
really quite dramatic in terms of how we're growing the platform,
how we're growing the number of buildings we have across
the country. So I've just come from the Midwest from

(14:41):
Minnesota where I've been doing site visits. But you know,
we're growing the business about fifty percent growth rates in
the US and it's got the place with the highest
take up of hybrid working and so it's very exciting.
So invested day tomorrow, but very useful to drop in

(15:02):
and have a look at what we're doing in the market.

Speaker 6 (15:04):
So mark return to office, work from home hybrid, what's
winning hybrid?

Speaker 7 (15:10):
So you have to imagine a new world driven by technology.
So everyone, a lot of the narrative sort of thinks
that things are going to go back to normal and
everyone's going to come back to Manhattan. That's not going
to happen. People want can and want to work at

(15:30):
places near to where they live. They don't want to commute.
So the elephant in the room is commuting. It's not
people are working from offices, they just want to do
it locally. Hybrid is a combination of work from home,
work from near to home, and come into someone like
Manhattan or Chicago once a month, get together with colleagues,

(15:50):
business reviews, collaborate.

Speaker 2 (15:53):
So what does that mean for a market like New
York City? For example?

Speaker 7 (15:57):
For New York City, it'll need to reinvent itself. You
can see it coming back here. It's probably a little
over a year since I was last in New York City. Yeah,
I mean it's more vacant. I didn't think it could
get more vacant.

Speaker 2 (16:10):
You think it's more vacant than a year ago.

Speaker 7 (16:11):
Oh, yes, absolutely. I mean you can see it at
the retail level, and then you can just got to
look up in the building. So I mean, look, it's
my I've been doing this for nearly thirty five years,
so I can tell looking at buildings where they're occupied
or not, there's a lot of vacancy, a lot of
sublet and you know, it's places like New York very

(16:33):
very difficult places and expensive places, time consuming places to
commute to for normal workers. So unless you live here,
it's not convenient, and especially downtown, if you go downtown,
you've got that double commute. So where you have that,
it's you know that people don't want to do that.

Speaker 6 (16:51):
It makes complete sense because I feel like for many
of us who've come back to the pandemic. I like
being actually back in the office. I'm so tired of
commuting though. I'm tired of it like you just and
when you have that break.

Speaker 2 (17:01):
That we done, is you're going to keep doing it.

Speaker 6 (17:04):
Yeah, I'm not giving up my card anymore, my commuting card.
You work with the likes of or have Disney, Uber, Microsoft,
black Rocks, Spotify, which got news that it's cutting fifteen
hundred jobs earlier. We got that news. Disney earlier this
year began the first round of seven thousand expected job cuts.
Any of that working its way into less demand for
what you are doing or help me understand.

Speaker 7 (17:26):
Yeah, more demand.

Speaker 3 (17:29):
You see.

Speaker 7 (17:29):
What's happening is you've got globally pretty much a difficult economy,
So corporations are looking at ways to be more efficient,
to get more productivity, to cut cost, so more and
more of a movement. You have to imagine us as
providing a platform for work and support of workers. You know,

(17:51):
at the moment in the US, as an example, we've
got twelve hundred buildings every state. We're adding six hundred
buildings next year, So you get this sort of work platform.
It costs half the price, it's near where your people
want to be. And we've also do US airport's airside,
we do railway stations, rest stops. So it's a work

(18:13):
from anywhere. It's not just office buildings, and the future,
a technology powered future, is about being productive wherever you are,
and it's about getting the most overt workforce. And that's
what companies are looking for today.

Speaker 6 (18:27):
So what kind of indicator are you So if a
you know what I mean, if a company is looking
to cut costs and tap into more of you, is
that just a smart company or is it a company
feeling squeezed and they're looking to cut like you know
what I'm trying to it is as soon as they
need more space, Well.

Speaker 7 (18:45):
How they save money is they have less space. It's
a bit like Uber. You don't have a car in
every city you travel to Chicago, you take an Uber
and you take an Uber when you need it. You
don't have one city there all the time. And what
we're doing on our platform, we've got eight million people
using it. They you know, you one day you're in Chicago,

(19:05):
the next day you're working from close to home. We
also support nearly about eight hundred thousand people that work
from home. We have a whole product range that supports homeworkers.
So it's you know, it's about a technology powered workplace
that's available anywhere. Our job is to create productive workplaces
so that people can do the best work.

Speaker 2 (19:27):
But it's not coworking.

Speaker 7 (19:28):
We do co working offices, we do work from home.
We do drop in small little things like a phone
box that you can use in airports. Do your teams.

Speaker 2 (19:40):
How did you watch the bankruptcy if we workplay out?

Speaker 7 (19:43):
Well, it was long, wasn't it.

Speaker 6 (19:44):
I mean it's but they weren't wrong in their concept.

Speaker 7 (19:47):
Absolutely not wrong. They were wrong in their execution.

Speaker 9 (19:50):
Yeah.

Speaker 7 (19:51):
I mean I've been doing this business along. I started
with one building in Brussels in nineteen eighty nine. We've
now got just a little over four thousand, and that's
been pretty much sell funded. We've had very little capital
put into the business, so we've reinvested capital. They in
the contrary, you know, they've used a huge amount of

(20:12):
capital and so it's just a different discipline, right, idea,
It's all about the execution. This is a detailed and
difficult operational business, not easy. A lot of people misjudge it.

Speaker 6 (20:23):
How does the business model I'm a bit daft. How
does the business model work in terms of you because
you get investor money, or how does it works because
you don't own because we were getting some perfect kitchen
you don't own.

Speaker 7 (20:36):
We have a platform so and that platform is a
digital platform, a sales platform, and we have huge numbers
of customers sitting on one side of the platform. If
you own a property, you're an institution, you're a private owner.
You want to put your property on our platform, you
can do that and we'll operate it for you. That's

(20:57):
what we do. So we're working the biggest institutions in
the world, insurance companies and someone who are putting property
on the platform so that it's sold in a hybrid way.
We're the middleman in all of that.

Speaker 6 (21:10):
Get a piece of the business. So you don't care
if that property isn't rented out completely for the month.
We do well, you do because you'd make more money.

Speaker 7 (21:18):
Off of it, and we want our partners to be successful,
so we're very focused on that.

Speaker 2 (21:22):
Do you have any are you in any long term leases?

Speaker 7 (21:25):
We have some, We have almost no long to We
have leases, but all of them are sure. We we
option long and we keep them short. Otherwise pretty much
a year we can get out of anything.

Speaker 6 (21:40):
How has the interest rate environment impacted you?

Speaker 7 (21:43):
If we are where our net debt is small, next
year it would be about the same as our rebit
do so about one time bit.

Speaker 6 (21:50):
But any of your customers who have properties, have they
have you have some of them gone under or because
of the higher rate, some.

Speaker 7 (21:58):
Of them, a few, very few have gone. But then
you get special services. We provide cash flow in the building,
and whoever takes the building, they like our cash flow.

Speaker 2 (22:07):
So we're the areas of the world that you're concerned
about in terms of economies, economic activity, the consumer.

Speaker 7 (22:13):
I mean, I think there's a not a global squeeze,
but it's pretty much. I think there's a universal squeeze,
both on companies and on the consumer. It's pretty widespread.
I mean, for me, and I've been business for nearly
fifty years. You know how quickly interest rates came up.
Has caught everyone you know, unawares, if you like. On

(22:36):
the one hand, and that's caught businesses that have debt
and that have taken out that debt obviously at low
interest rate comes back higher but also the consumer cost
of living and squeezing them as well. So that's forcing
companies to take action, whether as you said, whether that's
cutting people or cutting costs. And that's quite a good
environment for US.

Speaker 6 (22:56):
Mark just got like twenty seconds left here. So based
on what you're seeing, what you you are doing, you've
talked about some some pretty impressive growth, especially with the
US market recession. Next year, global recess from US recession
very quickly, I would.

Speaker 7 (23:09):
Say, difficult. Yeah, small recession.

Speaker 6 (23:13):
Difficult year, small recession. That means a lot because you
definitely have like a front receipta in terms of what
many companies are doing. Come back, please sooner more than
one year. Mark Dickson is founder, executive director and CEO
of IWG International Workplace Group.

Speaker 1 (23:26):
Here in studio, you're listening to the Bloomberg Business Week podcast.
Catch us live weekday afternoons from three to six Easter
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can also listen live on Amazon Alexa from our flagship

(23:47):
New York station, Just say Alexa play Bloomberg eleven thirty.

Speaker 6 (24:00):
Hey everybody to say that a lot has happened since
we last checked in with our next guest would be
an understatement.

Speaker 3 (24:07):
Big time.

Speaker 6 (24:08):
Or Levine last joined us earlier this year, before the
October seventh Hamas attack on Israel area. As you know,
Many is the co founder, of course, at the navigation
app Ways, which Google bought for more than one point
one billion dollars. He was also an investor in move It,
which then tim Intel bought for a billion dollars.

Speaker 2 (24:25):
Well I spoke to him because of his new book,
fall in Love with the Problem, Not the Solution, a
handbook for entrepreneurs. It details his journey and also his
unique philosophy on what it takes to be a successful innovator.
He's a graduate from the Tel Aviv University and served
in the Israeli Army Special Intelligence Unit. He started both
Ways and move It companies in Israel, which of course
is currently at war with Hamas in the Gaza strip

(24:48):
Or he good to have you back here in the
Bloomberg Interactive Brokers studio. How are you doing?

Speaker 10 (24:54):
It's complicated, right, because it's never going to be the same.
It's never going to be the same. That was a
devastating attack. That was you know, my kids are the
age between twenty two and thirty three. They could have
been at this party, and there were many days that
that was my main thought of the day, that I'm
lucky that they weren't. That was devastating. And I think

(25:17):
that at the end of the day, if you look
into the future or you realize that they might be
a solution, but without Hamas being there, well.

Speaker 6 (25:26):
That's what we think about. We talk a lot about
the way forward. I've talked to people I feel like
on both sides, and when I say sides, I don't
mean on Hamas's side, but I mean on the Palestinian
point of view, the Israeli point of view, about how
do we go forward? How do we stop that we
don't find five years from now, ten years we're still
talking about conflict in that region. How do you think

(25:49):
about that?

Speaker 10 (25:51):
So, look, at the end of the day, if you
think about the Palestinians and Gaza Streep and you ask
yourself whether or not Tramas was doing any good for them,
not really, they were doing very good for themselves, but
not for the people. And look, Israel left the Gaza
Strip some seventeen eighteen years ago. There was an opportunity
to build awesome ness there and Ramas to go over

(26:13):
and basically this is a terrorist organization, right, they are
only agenda that they have is to kill us, and
that doesn't work. We guess what we don't want to
be to get killed. If Ramas is being removed from
the region, then there are opportunities for something else completely different, right,
because at the end of the day, most people prefer

(26:36):
leaving over dying, right, And most of the people in
the Gaza Strip it's the same for them. The challenge
is that the leadership of the Haramas is the one
that is basically enjoying the killing on one hand, and
the power in particular that they have. And I think
that once they are being removed, there is an opportunity

(26:56):
and I see major role of the US, major role
of US Saudi Arabia helping to recreate something new in
the Middle East.

Speaker 2 (27:04):
We talk a little bit about that because that's a
part of the equation that I'm having trouble seeing here
the solution and what actually happens. And it sounds like
you think Hamas can be removed from power. So let's
say Hamas is successfully removed from power in the Gaza Strip,
what would you like to see happened.

Speaker 10 (27:21):
So again we have to realize that what I would
like to see has I have zero influence on that,
or maybe a little bit of influence, but that's about it.
But I think that the opportunity here is that really
recreating something new with the support of the American, with
the support of the Saudist and basically establishing sort of

(27:43):
normalizations in the relationship. Right now, if you look at
the history of Israel, every time there was a major crisis,
two things happened. Number one, as well grew up stronger.
Number two, we actually figure out a way, a different way.

Speaker 11 (27:57):
Right.

Speaker 10 (27:57):
That's true for the he Pour War back in the
seventy three, and after that we had a peace with Egypt, right.
And that's true for World War Two where the Holocaust happened,
and after that there was a Jewish statement. And so
at the end of the day, I think that the
October seventh is such a major crisis that it will
lead into something else, and you know, hopefully as soon

(28:21):
as possible. Right, But when is that going to happen?
We don't know.

Speaker 2 (28:25):
I want to talk economy a little bit, because I
don't think people understand that when people get called back
to the military. They leave their jobs to go back
to the Israeli military. So there's a whole element of
the Israeli economy that's not working the way that it

(28:45):
should right now. Are you seeing the effects of that
day to day that there is a shortage of workers,
that there are a lot of people who I mean,
I have friends on Facebook who've posted Israeli as you've said,
you know, my husband is away fighting right now because
he got called back. She's a tour operator who does
restaurant tours for tourists. There's no tourists there right now,

(29:07):
so she literally they literally have no income coming in
right now as a result of this.

Speaker 10 (29:14):
So so not exactly, because when you're doing your military reserve,
you do get from the Social Security the same pay
that you were government if you were working. But if
you look at the impact of the war on the economy,
then then I would say, for a second, obviously budget
for security and is going to go up dramatic. Then

(29:37):
that's we all realize the war costs money. Some markets,
some industries are completely suffering from that, right Like tourism
right there is there there are no tourists going to Israel,
right And and I don't blame them, right, they shouldn't.
It's there is a war there and they don't feel safe.
And that's all high take industry is actually getting strong

(30:00):
because what we are realizing is that the people that
are still there, they are carrying the load for all
the people that are going on the military or reserve
and so forth. And what we have seen is that
the productivity increased dramatically. And when people that will be
coming back from the military reserve, then we are likely

(30:21):
to see huge growth in the high tech in general.
The challenge right now for the high tech, the Israeli
high tech, that it's harder to raise capital, right, so
most of the investors will prefer to be on the
fence and and you know, way to see that the
war is overright, investing in a war zone people afraid,
and they rightly.

Speaker 2 (30:42):
So that's interesting to hear because you've also got a
group of very vocal Americans who are happy to give
to Israeli causes. And I would think that some of
those would be supportive of a venture capital. Of course
they will in the country. They to kind of help
prop it up time.

Speaker 1 (30:58):
They do, and they will.

Speaker 10 (31:00):
But in general, if you look at the you know,
non Jewish investors or non engaged investors, then they have
more challenging time, not all of them, but a lot.

Speaker 6 (31:10):
Or is there anything you've put on hold because that's
home base for you? Correct Israel?

Speaker 10 (31:16):
Or so I you know, I keep on building. Look,
I have a very simple life. I have a mission,
I have a destiny, I have a purpose and this
is about value creation. And then I can create value
through multiple ways, through you know, building startups that help people,
through you know, coaching and mentoring a group of CEOs.

(31:38):
That of my startups, through teaching and through you know,
the ultimate way of teaching is the book itself. They're
falling love with the problem, not the solution. Book is
by and large, this is sharing my know how with
people and hopefully make them more successful.

Speaker 2 (31:55):
What's the problem that you see right now that needs
to be working?

Speaker 10 (31:59):
There are a lot You're picked him exactly, take a pick.
So the good news is that there are a lot
of problems. The bad news is that there are a
lot of problems. Right the end of the day, there
are a lot of problems. One of the you know,
major problems that we are addressing recently is actually in
the US, the realization that most people will not have
enough saving for retirement, and so Pontera is one of

(32:22):
the companies that is helping that in the US help
people to eventually retire richer. And so this is this
is a big problem at the end of the day
when people get old and they don't have enough money.
This is a big problem. So this is one of
the things that I'm trying to do with my startups.

(32:42):
And you know, dealing with parking. Parking is a major
problem right now in generally you would say, wait a minute,
in the US, it's less of a problem because most
people live in a single family house and they have
a driveway and they have parking cars. But the rest
of the world, most people live in a multifamily houses,
multi story houses, and they don't have parking garage, and

(33:05):
then looking for parking at the end of the day's
a nightmare. And this is you know, my most recent
startup that we started that a couple of years ago
and h and it's stealing these well and hopefully it
will grow to address that because parking is a major problem.

Speaker 2 (33:22):
Yeah, we could use that in Brooklyn.

Speaker 6 (33:25):
Okay, Well, it's something I wonder you know, when I
think about so much. This year, we've talked about artificial
intelligence and generative AI, and some are concerned that it's
going to take jobs away from people. I see it
more as complimentary. But having said that, I do think
about job creation in the future because economies, whether it's
the Gaza Strip, if people have a way to make

(33:46):
a living and build a much more productive life, or
whether it's in Israel or whether it's in other developing markets,
if you can create a better life for yourself, it's
just a better, more peaceful place, right, even create an economy.
So are there I don't know. We are we moving
increasingly towards the world though, where technology is replacing jobs

(34:09):
at a faster pace than we can make them. Unless
you're coder, you know, I think that I hear that
for the last fifty years.

Speaker 10 (34:19):
So even if you think of the revolution of agriculture,
that we started to have tractors and combine and different
machinery and everyone said, oh, this is going to take
away the work of the farmers, and guess what, it didn't. Right,
So every time that there is an innovation, we tell ourselves, oh,
this is going to take away all the jobs, and
then you look at the unemployment rate and it doesn't change,

(34:42):
or maybe it's becoming better because what happened is that
that technology by and large increase productivity. And when it
increased productivity, then we can create more. And when we
create more, then more people actually have a better life.

Speaker 6 (34:57):
So you're not worried about AI be the end of
us all.

Speaker 10 (35:00):
Not at all. What I think that we might find
out that there are some areas that we will need
to establish regulation. Right, So if I'm speaking with a person,
then that's one thing, But if I don't know that
I'm speaking to a machine might be a different thing.
So maybe the machine will need to identify itself and
tells me I'm a machine. And and this is something

(35:24):
that I think that eventually we will need to have.

Speaker 2 (35:26):
Do you think that AI is close as Elon Musk
believes two becoming smarter than humans?

Speaker 10 (35:38):
No, No, I think that we hear that for the
last fifty years or computers are going to be smarter
than people. Oh, we don't need people, We don't need
the human brain. The human brain something video fifty years ago, right,
But then you know, end of the day. I think
that the creativity and the adaptability is something that only
humans would have and at the end of the day,

(36:00):
that part is not going to be taking away.

Speaker 12 (36:03):
Now.

Speaker 10 (36:03):
Whether or not you can scan way more information in
a fraction of the sick and absolutely yes, Whether or
not you can process some of the things way faster, yes,
but not the same order of magnitude what the human
mind can do.

Speaker 6 (36:17):
We've talked about a lot, and obviously it's a very
stressful world right now. Final thoughts that you want to
leave our audience as we get ready for a new year.
So I think that in just about thirty seconds.

Speaker 11 (36:30):
Sorry.

Speaker 10 (36:31):
Value creation, right, value creation when you create value and
valuate the way you create for others, not for yourself.
If we think about value creation, then we end up
with a purpose to a life. And when we end
up with a purpose to a life, we're going to
be happier and live longer, and the war is going
to be a better place.

Speaker 6 (36:49):
Thank you so much than happy new year. Hope the
new year is a calmer one, more peaceful one, and
better one way it will be okay or OLIVI, thank
you so much. We appreciate it. Co founder of Ways
and so much more. As we talk about we've talked
about his book fall in Love with the Problem, Not
the Solution, A handbook for entrepreneurs. Happy New Year.

Speaker 1 (37:09):

Speaker 8 (37:15):
On Bloomberg dot com, the iHeartRadio app and the Bloomberg
Business app, or watch us live on YouTube with us.

Speaker 2 (37:24):
We got Mark Million, Bloomberg News Technology Editor and also
the editor of Bloomberg BusinessWeek, Joel Weber, both here in
our Bloomberg Interactive Broker's studio. This is really cool a
behind the scenes look at Anderilla, closely held venture capital
backed company that's competing with the likes of Raytheon.

Speaker 4 (37:40):
Joel Yet and the company had been You're right into
Oculus and developed Oculus, which now Meta Facebook acquired. Ever
since then it has been more interested in doing military applications.
And this roadrunner, which announced on Friday and after they
had an exclusive look at it, attempts to solve a

(38:03):
big problem for the US military.

Speaker 3 (38:05):
Mark what is that problem?

Speaker 13 (38:07):
The problem is drones, and so in particular in Iraq
and Syria, they the militants there have been able to
import these consumer drones like the kinds that you'd buy
for the holidays for your kids. They take them apart,
they attach bombs to them, and they are able to
assemble so many so cheaply that it's become a huge

(38:30):
threat to American forces.

Speaker 2 (38:31):
I mean, these are the drones that are essentially being
used by Ukrainian forces to bomb Russian forces at are
really low cost.

Speaker 3 (38:39):
And right back at Ukraine.

Speaker 2 (38:41):
Yeah, they're like taping Russia. They're taping bombs to them.

Speaker 13 (38:44):
Yes, that's the example of an ally using it as
a cheap way to kind of protect themselves in war.
But it's also a huge threat to American troops, and
so they've been working on ways to not just be
able to take out individual drones, but when forces create,
you know, militants create like what's what they call these

(39:04):
swarm assaults where there's like a bunch of them all
coming at at once, you need new technology to take
it out. So this is one answer to that. It's it's,
as you said, like almost a miniaturized fighter jet looking
thing that just goes in and uh and throws a
missile at these like swarms of drones, tries to take
them all out, and then it can it can go

(39:25):
back and it can land and they can load another
missile onto it and send.

Speaker 4 (39:28):
It back up.

Speaker 3 (39:29):
So how much do we think this technology is actually
going to cost? Because obviously the cost is the thing here.

Speaker 4 (39:35):
You weaponize a drone, which I can do some holiday
shopping and acquire many druns. I'm not going to touch
the bomb part, but I can get the I can
get the drones, h and I get I get what
we're going for here. Because ultimately it's like, how can
the US military bring the cost down with something that
could be reusable? So so what what kind of budget
do I need to acquire many of these road runners?

Speaker 13 (39:57):
So traditionally U US military was using Patriot missiles just
like kind of the default option. Those can run like
four million dollars a missile. ANDERIL says that they can
make these these things, these road runners for in the
low six figures, so you know, one thousand, two hundred
thousand per unit. So if they can pull it off,

(40:19):
and to be clear, it's it's a star, it's an
unproven company, it's startups, not raytheon. So there's there's doubts
about whether they can pull it off. But if they can,
the US could save a lot of money.

Speaker 6 (40:29):
All right, so so far, so good in terms of
how effective it is in terms of trials and testing.

Speaker 14 (40:35):
Yeah, it's very early.

Speaker 13 (40:36):
It's a it's a brand new product. But they say
the US has ordered a bunch of them and they
expect them to be in the field next year.

Speaker 3 (40:44):
So who else is attempting to come up with solutions
in this space?

Speaker 4 (40:48):
Because this is a huge problem, Like I mean, US
forces around the world just basically, you know, you with
not that much technology, it becomes a serious problem. And
like you know, andder All can't be the only one
looking for looking at this base to provide potential SLA
and I.

Speaker 6 (41:06):
Have to say reading this story, this is what to me,
I said, Okay, this is modern warfare, this is war
going forward, so you really need to have something to
counter it.

Speaker 3 (41:13):
Yeaheah.

Speaker 13 (41:14):
So the major defense contractors offer options that the USCS,
and again I mentioned the Patriot missile is kind of
the default. It's like, you know, tried and tested and
they know it works. But Andrels is taking this bet
that they can kind of break into this market with
a very different option.

Speaker 2 (41:34):
Ashley makes this point a couple times in the story
that even though this thing the Roadrunner has been unveiled,
it hasn't yet been manufactured at scale. And if there's
one thing that we've learned from Tesselas's troubles over the
last six years or so, manufacturing one or ten of
something isn't as difficult is manufacturing a large number doing
this stuff at scale. What did the experts Ashley spoke

(41:57):
to about scaling this say in terms of challenges here?

Speaker 14 (42:01):
Yeah, you're right, it's hard.

Speaker 13 (42:02):
And it's also not a traditional consumer electronic where you
can use, you know, factories of China sule.

Speaker 2 (42:09):
You can't buy one of these for the holidays for
your Family'll try.

Speaker 13 (42:13):
Still, and but yeah, I mean there's always the dark web,
that's true. The philosophy inside this company has been to
try to do everything themselves, and so they're building their
own factory capabilities, their own factory lines to try to
be able to build the whole thing, uh and do
it in America, which is kind of what the US
government would like to see.

Speaker 6 (42:32):
What's really kind of cool, too, is they're not this
is one thing, and hopefully if they get it up
and running, this is one thing, but they plan to
take this technology and spread it across other products.

Speaker 10 (42:40):
Right.

Speaker 13 (42:41):
Yeah, yeah, so ander Old already has a bunch of
different products that they sell to to the US and allies.
They do like you know, Century towers, sort of like
a virtual border wall that the US, their Border Control
has has purchased. But yeah, they've they've said that they've

(43:02):
spent these years developing all this new technology and they
think that it will They haven't gone to specifics, but
they think it some of it will be useful to
some of the other products that they're working on.

Speaker 4 (43:12):
Okay, so something about this name strikes me as being
a little cheeky road redder. What is that a reference to?

Speaker 13 (43:21):
Yeah, so, so Raytheon has a product called Coyote, So
it's a looney.

Speaker 3 (43:26):
Tunes Raytheon being a competitor of.

Speaker 13 (43:28):
Exactly right, So they're trying to stick it to their
much bigger rival.

Speaker 4 (43:35):
What is the Coyote other than you know, just trying
to get the road Runner again and again and again
and again and never quite being able to it in
the real world?

Speaker 3 (43:45):
What what is the coyote made by Ratheon.

Speaker 13 (43:48):
Do It's a it's another sort of like autonomous defense
system that the main innovation that anderil Is is talking
up with This new product is that it's reusable.

Speaker 4 (44:01):
It can land.

Speaker 13 (44:02):
Like various companies including Androl, have built counter drone products
that can go and blow up a single drone that's
flying around. And so the main targets here are swarms
of drones and being able to reuse them so that
you're not having to buy a new one every single
time you take out.

Speaker 6 (44:23):
My understanding too, is it's just one person that's needed
to kind of actually run it right or operate it
rather than multiples.

Speaker 14 (44:30):
That's part of the pitch.

Speaker 3 (44:31):
Yeah, yeah, it remains me seen.

Speaker 4 (44:33):
But yeah, they part.

Speaker 13 (44:35):
You know, Androl builds this kind of like software system
that they call Lattice where you can hook in all
sorts of different defense products and they're saying, you know
this will work with that that you can have them
all kind of communicate wirelessly so you can see where
all of your different roadrunners are.

Speaker 2 (44:52):
It kind of sounds like the Ring camera system from Amazon,
but for you know.

Speaker 6 (44:56):
You're obsessed with your Ring camera system right now.

Speaker 4 (45:00):
You just add you know, you add the border wall
to it. I'll take a couple of drag and drop
into your car. I'll take a couple you know, road
runners through man well, the bigger thing an opportunity here
is obviously the Vince budget gigantic and being able to
crack it even with something that you know, may only
cost him the six figures, but around the world at scale,

(45:22):
if you can manufacture it there, that's that's huge. But
you know, the bigger challenge here does seem like the
US military being geared for different wars than we've ever seen.
And I think you know what, what we witnessed in
Iraq earlier in the two thousands was that the US

(45:42):
military was basically ill equipped to fight a certain type
of war. And you know when obviously Ashley has spent
a lot of time in this space, but like there
seems to be a new kind of war that the
US may not be ready for and we're getting of it.
What else is Androil maybe developing that could help down

(46:06):
the line? Do we have any sense of what this
could look like?

Speaker 13 (46:08):
Yeah, the thing about defense contractors, they don't like to
talk to they don't like to talk about their weapons
until they're until they're ready. But but I mean, you've
raised a really good point about the kind of like
the new realities of war. One of the one of
the interesting things and one of the things that Andrel
was trying to address is this kind of like imbalance
in the in the economics of the of battling drones.

(46:32):
Like I said earlier, it's so cheap to assemble like
large quantities of drones and put bombs on them and
create some very powerful weapons and high high quantities. As
it stands now, it's very expensive to take them out.
And so it would cost so much more to blow
up these drones than it would cost to create like

(46:54):
a kamikaze drone that can kind of can blow up
and harm a lot of soldiers. And so that's something
that Anderil is trying to address by by focusing on
costs as one of the main things.

Speaker 2 (47:05):
So I just want to make sure I understand the
product here that actually got to see.

Speaker 10 (47:09):
It's a.

Speaker 2 (47:11):
Fighter jet type of drone that takes off autonomously, but
then has a and has an explosive projectile that destroys
a drone. The explosive projectile obviously not reusable, but the
part that it's launched from is the part that's.

Speaker 13 (47:23):
Reusable exactly well, so in the current model, it's not
reasonable once it once it it sends off, it's it's
missile the boy, I mean, the thing tends to blow
up and you can't use it again. They say that
they're close to developing basically a V two that that
what you did there jet the jet can can be reused.

(47:46):
So if you send the jet out in the current model,
you send the jet out, it doesn't see anything that
it that it needs to blow up. It can come
back and it can land. That's that's like an innovation.
It's almost like a tiny SpaceX rocket.

Speaker 6 (47:59):
That's I was thinking, right, it's the whole kind of
Tesla idea.

Speaker 13 (48:02):
Yeah, and it takes off in the lands and similar
it takes off vertically and then it kind of turns
and then flies like a like a jet. And so
but but they say, you know, the next big invention
here in the next model will be able to fight,
like take out a drone and then come back and
land and you can load it up with another missile.

Speaker 6 (48:19):
It is, though, something we talk so much about disruption
in so many different spaces, and right it's been these
major defense contractors that have been so involved. But it's
really kind of fascinating to see this company just kind
of coming up potentially with something that would be very
dramatic and would become, you know, certainly something that governments
would do.

Speaker 3 (48:34):
What truck record do they have in this space?

Speaker 4 (48:36):
Because this they've been toying around in the military application
space basically since they got out of the headset one, right.

Speaker 13 (48:43):
Yeah, so they're relatively new. I mean when you compare
them to the major defense you know, raytheon Boeing like that,
you know, not they're not super tested, but they they
started early. Really they're started putting out products early in
the Trump administration, and they seize on that as like
their first big opportunity was he was talking a lot

(49:04):
about the wall, like why don't we sell him a
virtual border wall?

Speaker 3 (49:08):
And they bought it.

Speaker 13 (49:10):
And so they've like worked on some other products to
varying degrees of success, but they're really making a lot
of noise about this one because they see a really
big opportunity.

Speaker 6 (49:21):
I keep thinking like if this engine is so powerful,
like do they sell it to Bezos? You know who
wants to deliver things? Like is there some kind of
you know, commercial not just defensive commercial application.

Speaker 4 (49:31):
Storied history of starting with military applications and then turning
finding the commercial finding the commercial application years later but
I think to their credit they have looked at this
as like, what is the problem that the US military
is facing in the field, and how can we perhaps
protect American soldiers And that goes for allies as well.

(49:53):
I mean, like we will see where this application ends up,
because clearly as Ukraine is currently shown and other battlefields
around the world, like, we will see more and more
and more drums, and currently those are being used abroad.
But the technology is scary enough that it can be
used to really inflect pain everywhere.

Speaker 6 (50:14):
So yeah, first thing got to make sure it works right, Yes, little.

Speaker 2 (50:19):
Good start tested in the desert.

Speaker 14 (50:21):
Okay, not around that all right.

Speaker 6 (50:24):
Note to self, Mark Mirillian, thank you so much. Really
appreciate you coming in and spend some time with us,
Bloomberg News Technology editor and of course the editor of
Bloomberg BusinessWeek, Tel Weber.

Speaker 1 (50:38):
live weekday afternoons from three to six Easter on Bloomberg Radio,
the Bloomberg Business app, and YouTube. You can also listen
live on Amazon Alexa from our flagship New York station,
Just Say Alexa Play Bloomberg eleven thirty.

Speaker 2 (50:57):
Twenty ahead in our second hour of the wee Get
of Bloomberg BusinessWeek, including a conversation with private equity heavyweight
Mark Patrickoff on his investment in the sports education company
IMG Academy. Plus, we'll explore the personal tech and enterprise
level IT trends to watch for in twenty twenty four
with Crawford del prehtt of IDC. As you might expect,
artificial intelligence is high on Crawford's list, and first up

(51:20):
this hour, we have an executive with a front row
seat to some of the cutting edge developments in this space.
Mandy Long is the CEO and a board member at
Big Bear AI. It's a publicly traded software maker that
provides AI and machine learning technology to support its customers
and defense, manufacturing, healthcare, and life sciences. Mandy spoke with
Carol in Bloomberg News equities reporter Bailey Lipschultz last week.

Speaker 6 (51:41):
Billy, it was interesting to talk to David Weston who
talked about talking with Larry Summers about a year ago
and Larry was saying, oh my god, AIAI generated AI.
And then it was January of this year when Microsoft
made that ten billion dollar investment. Then all of a
sudden we were all in it.

Speaker 11 (51:56):
Exactly a year ago. Yesterday I believe was the birth
of Chad GPS. It just celebrated its first birthday. I
don't know if you use it. I'd like to a
little bit play around with it more. Have it explained
complex topics?

Speaker 14 (52:07):
Yeah, I'd say.

Speaker 4 (52:07):
Write some code.

Speaker 2 (52:08):
Tell it to me like, oh, I wish I could
do that.

Speaker 6 (52:11):
But it's interesting and I feel like we've all become
enamored big time with it. We talked about the Microsoft investment.
It does feel like everything that was connected with AI
was often running. It became the buzzword on corporate earnings calls.
Yet Nvidia, it's your top performing name in the S
and P five hundred, two hundred and twenty percent. They
make the chips that are needed in the massive amounts
of calculations. Just today we had syrup Tech. It's a

(52:34):
startup that makes AI tools to help fashion retailers plan
and manage their inventory. They raised about seventeen and a
half million in a funding round. So it's just all
in on AI.

Speaker 14 (52:43):
There's a lot going on, and it's everywhere.

Speaker 11 (52:45):
I was talking to a banker this morning and she
was saying that when we think about AI. You can't
just think about it as generator AVEAI or the chip
makers the foundations. This is something that every company has
to have an answer to and investors are asking that
question because because the way she put it, either.

Speaker 14 (53:01):
Going to be a winner or you're going to be roadkill.

Speaker 6 (53:02):
Right, that's a really interesting and people are building out
their infrastructure to support it. So our next guest definitely
all in on AI. Delighted to have with us. Mandy Long,
CEO and board member at Big Bear AI joining us
on Zoom in Chicago. Mandy, it is I feel like
the topic there's two topics this year. It's weight loss,
drugs and AI, no doubt about it. Tell us about

(53:23):
what this year has been like for you guys.

Speaker 15 (53:25):
Absolutely, and thank you for having me.

Speaker 16 (53:27):
Yeah, it has been a huge year for AI, and
in no small part because of the rollout of chat GPT,
which did celebrate its birthday yesterday.

Speaker 15 (53:38):
I think what it's meant for us, right and Big
Bar AI. You know, we've been well, we've only been
a publicly traded company for a couple of years.

Speaker 16 (53:46):
We've been at this for a while and we apply
artificial intelligence to national security missions.

Speaker 15 (53:52):
Right and enterprises.

Speaker 16 (53:53):
I think something that has been a big catalyst for us,
and I heard the comments earlier around the fact that
but it really isn't just about generative AI artificial intelligence
in general, right in the application of it, particularly the
operational application of it, right the use in production helping
people is what has been a big game changer for

(54:15):
our business, and as we look towards the future, it's
what makes us incredibly excited about where we're headed.

Speaker 6 (54:20):
You are a small market cap two hundred and eighty
two million. You've had quite a run this year, Like
a lot of names in the space, up one hundred
and sixty seven percent. About fifteen percent of the float
is shorted, so investors are watching it very carefully considering
the run up. Dig a little deeper and tell us
exactly what you guys are doing and who your customers are,
because from what I understand, it's a lot of the

(54:40):
US government, if not all.

Speaker 15 (54:43):
Yeah, so our entire business is not all federal government.

Speaker 16 (54:46):
We work about twenty federal agencies, about one hundred and
sixty commercial customers in the private sector, and how our
business breaks down is really into three verticals. We do
work in supply chainel logistics, we do work in cybersecurity,
and we do work in autonomous systems, and when you
think about those three markets, there's actually a high degree
of complementary nature because we're securing supply chains the same

(55:10):
way that we're introducing autonomous technology, and AI plays a
role in all three of those. The big difference maker
for us is that we combine very deep subject matter
expertise or the vast majority of our employees who are
supporting our customers come directly from those customer environments, regardless
of whether it's in the public or private sector, and
we pair that with a really open architecture approach associated

(55:34):
with solving customer problems. And when it comes to the
competitive landscape, where there's still a lot of players who
live in proprietary, closed system pay me support forever, we
take a pretty different tactic because for us, it's outcomes.

Speaker 11 (55:46):
Well, Manda, you mentioned competition. How do you view the
evolution of big bar AI within what still is a
very much nascent part of the market.

Speaker 16 (55:57):
AI is absolutely still in the early days because the
difference maker and is going to be you know whether
or not you can do it in production at scale
and you can work in an environment that is imperfect
for us, right, I think because of our roots in
national security and in working in highly complex and imperfect environments,

(56:19):
we have a bit of a leg up there, right,
that causes us to stand out relative to the competition.

Speaker 15 (56:24):
A lot of how we also apply the technology, right.
I mentioned open architecture before.

Speaker 16 (56:29):
That's a really big tenant of how we operate as
a business, and I think it plays a big role
as you start to think about the implications of applying
AI in production, right, as you start to get into
those questions of how do you know how do you
monitor in.

Speaker 15 (56:42):
An ongoing basis? As these technologies mature.

Speaker 6 (56:45):
Andandy, you know what's interesting is the conversation and narrative
has evolved over the year and everybody getting so excited
about AI. You know, I laughed, but it truly was.
On the earnings call, we would just search for AI
because every CEO is dropping it in to their press
releases or somehow bringing it up for a while. While
having said that, help me understand practically, whether it's supply

(57:06):
chains or cybersecurity or autonomous systems. Give me a for
instance of what you guys do using advanced AI. Generative
AI to help a company absolutely.

Speaker 16 (57:19):
So a couple of really specific things that we do.
One is we have a very mature portfolio and computer
vision right. So it's an area that I think for
the technology industry has been somewhat out of reach for
a long time because you needed the compute.

Speaker 15 (57:32):
We have a solution called arcis Right.

Speaker 16 (57:34):
We're partnered with L three Harris in supporting their autonomous
surface vessel fleet, so we do the computer vision at
the edge on those vessels to help with vessel identification, weapons, etc.

Speaker 15 (57:46):
Right.

Speaker 16 (57:46):
Associated with deployments and missions where you're working in really
disconnected and difficult to process environments, we provide CV there.
Over on the supply chain side, a really good example
of our capabilities are associated with what we do from
predictive analytics. We have a solution that we call Dominate

(58:06):
that's very focused on geopolitical and macroeconomic forecasting.

Speaker 15 (58:10):
Right.

Speaker 16 (58:10):
That's applied in an environment today, right, incredibly relevant as
you look at the global landscape and your suppliers who
are working through very difficult capital deployment decisions associated with
still having to deliver en product to a customer and
an environment where you can no longer rely on the
same turnaround times associated with the assembly process.

Speaker 6 (58:30):
What's interesting is I hear you talk and I'm thinking,
were you laughing at everybody in January when they're like,
oh my god?

Speaker 3 (58:36):
AI?

Speaker 6 (58:36):
I mean, we know AI has been around for decades,
but in terms of this more advanced level, it sounds like,
I mean, how long have you guys been working on that?
Although it doesn't like the processing power, right, has been
a newer thing to kind of take it to another level.
So I'm just curious connect the dots for me on
that if you would.

Speaker 16 (58:55):
Yeah, And the answer is no, by the way, in
terms of whether I was laughing and everyone right, I
think this year has been a As a technologist, it's
a it's a liberating year because I've talked about previously,
you know, this idea that.

Speaker 15 (59:11):
I think AI is the new literacy.

Speaker 5 (59:13):
Right.

Speaker 16 (59:13):
You know, previously literacy for a long time was held
at a high priest and priestess level.

Speaker 15 (59:19):
It was inaccessible to the masses.

Speaker 16 (59:21):
And what change, right is the idea of literacy empowers
and liberates people. I think what's happened this year is
the exact same thing is happening with AI. Right, We've
democratized the ability to interact with these advanced models in
a way that it didn't exist right a little over
twelve months ago. And you know, whether you're talking about
empowering creativity, right, An example of you know how even

(59:44):
I use gender tove AI and tools like that is I,
you know, I play with my kids and I asked them,
you know, who's the main character and what's our bedtime
story going to be? And we you know, you work
with technology to change the way that people can think
about being creative.

Speaker 15 (59:57):
And I think that for me is you know, it's
why I love what I do, right. And I think
that what we're going to.

Speaker 16 (01:00:04):
See on a go forward basis is that because the
level of understanding of what is just what is possible
associated with kind of technology is now becoming more mainstream,
we're going to see the applications of it become widely
adopted because it shouldn't be limited to those who can
speak the technical language, right, It's humanity that's going to

(01:00:25):
decide where this goes.

Speaker 11 (01:00:26):
When you look at Big Barry, I is the growth
prospect within the private or public sector? Like, what is
more attractive and where do you see that growth for
the company?

Speaker 16 (01:00:35):
The answer is both right, And I would say that
because what has changed, particularly over the past two years,
as we've seen massive disruption in the global supply chain
and we've seen a geopolitical climate right that looks like
we could be.

Speaker 7 (01:00:49):
In a.

Speaker 16 (01:00:50):
New face of a conflict in the coming years. Means
that both sides of my business are very busy because
one needs the other, right in order to look into
the future and be successful.

Speaker 6 (01:00:58):
We're talking with Mandy Long, CEO and board member at
Big Bear AI, still with us on Zoom in Chicago. Mandy,
you were talking about the importance of both the public
and private worlds in terms of your business going forward.
Talk to us a little bit more about that, and
I know you also made a recent acquisition. Tell us
about that and how that kind of feeds into your
business and fits into the business growth.

Speaker 16 (01:01:19):
Absolutely, and I think the best way to break down
the importance of the relationship between the public and private
sector side of what we do is that there's an
incredible amount of collaboration that happens between both sides today
and I think Big Bear in particular sits.

Speaker 15 (01:01:35):
At an intersection point between the two of those.

Speaker 16 (01:01:37):
Right in the private sector side, right, we support with
a lot of the technology we have in not only
in the autonomous system side of our business, but also
supply chains a lot of capabilities that then get delivered
right into the federal government through those providers. In addition
to that, we work that we do and for example healthcare,

(01:01:59):
I spent fifteen years in healthcare, I was early days
in machine learning and vision AI. There we do a
lot of work with hospitals and health systems supporting patient
flow optimization. Right, So if you have a patient that
presents inn the ED, how do you make sure that
you get them to the right place at the right time.
Those patterns right in the ability to apply advanced technology

(01:02:20):
to that means that both sides of our business right
are growing right and relevant because we're solving problems that
cross the chasm of both sides. And when we look
forward to where we're headed, the anticipated acquisition that we
announced recently with Pangam bolsters our vision AI portfolio. Because

(01:02:41):
you heard me talk you know a lot about arcists
right in the work that we do in horizontal imagery
right in satellite Pangam has a remarkable portfolio that does
advanced biometrics right facial you know iris based work and
it provides a really comprehensive solution that we can bring
to our customers.

Speaker 11 (01:03:02):
And Manie kind of balancing though the utilization of technology
AI streamlining things, helping work in healthcare and better treat people.
But on the flip side, buying a facial recognition company,
how does that play into some of the security issues
and getting customers and consumers kind of on board with that.
Just given as you mentioned, biometrics is something that's very

(01:03:22):
hotly debated.

Speaker 16 (01:03:23):
It very much is right, and I think it was
an important strategic decision right and it was not made
lightly right.

Speaker 15 (01:03:32):
At Big Bear, we play.

Speaker 16 (01:03:34):
A very big role and we use our voice very
openly as it relates to talking about the safety and
security of AI technology. We're very active right in the
responsible innovation category, the input associated with how to do
regulation at scale, and so when we think about the
use of biometrics, I think one of the things that's

(01:03:55):
really important to keep in mind, right is that in
many ways as a society, we've we've crossed over a
lot of the chasm associated with putting information out there
because of.

Speaker 15 (01:04:07):
The widespread use right and multi year at scale use
of social media.

Speaker 16 (01:04:12):
Now from a kind of where we sit on that
spectrum and the role that we play, right, most of
the capabilities that when we think about our vision portfolio today,
where we're very focused on, is not in making autonomous decisions, right,
it's in helping to distill and provide decision support for
the ultimate.

Speaker 6 (01:04:32):
Costomer believe, So you'd be working side by side with
a human might come up all in terms of one
of your systems saying hey, here's what we've come up with,
but you need to look at it and kind of
make some kind of decisions maybe off of it. Correct,
because I think what we're human in the loop, because
I think we get we get worried. You know, our
David Weston we talked with, who had talked with Henry Kissinger,
very concerned about AI in war time or in war specifically.

(01:04:57):
And I think about the role that you know, you
guys are going to be. You know they you already
do work with the government. I mean, what are some
of the oversights that we need to have though in
place to make sure that there isn't some kind of
runaway technology. And I'm not trying to be silly and
sci fi, but these things could happen.

Speaker 15 (01:05:15):
It's not an unfair question.

Speaker 16 (01:05:17):
Yeah, and I think it's you saw in the executive
order that came out, you know, the top item is
safety and security of AI technology, and that is not
for no reason. One of the things that I think
we have to keep in mind as a society as well,
is that we have already passed through the gates of

(01:05:37):
a human being able to individually manage and provide oversight
of this kind of technology at scale. We're already an
augmented species, right. You know, you have I'm sure a
phone right on you at all times, or a computer
at home. Leveraging technology to help keep those guardrails in

(01:05:58):
place is going to be what's important here because the
traditional processes in paperwork is not going to get us.

Speaker 11 (01:06:05):
There many One of the things that played out with
Opening Eye going too fast too soon. I think back
to you know, Facebook, with Cambridge Atalytica, there is this
the government was not kind of in the know and
regulating these things, and technology companies were able to run rampant.
How do you balance that because obviously that seemed to
be playing out at Opening IY with Sam Altman.

Speaker 16 (01:06:24):
So the rate and pace of innovation today has no
historical precedent, So I think even looking at those examples, right,
it's different. Now, look at what has happened with chat
GPT in terms of adoption over the last year, Right,
there's nothing like it. So as you think about regulation
and oversight, you know, I go back to the same
core issue, which is that I don't think we're going

(01:06:45):
to get there without tech regulating tech, and that tech
needs to be open architecture, right, and it needs to
include the open source, and it needs to evolve the
way that these models are going to evolve or you know,
we could get in trouble, But.

Speaker 6 (01:06:57):
Aren't you worried a little bit about open source getting
into the wrong hands?

Speaker 16 (01:07:01):
There is a philosophical discussion to have around the role
of open source versus closed source and the relationship between
the two of them. There is power in the open
source and the community level of effort associated with the
oversight of that provides a scale that does not happen
when you have a closed source system with a tight
R and D budget.

Speaker 15 (01:07:20):
I'm a promoter of the open source.

Speaker 16 (01:07:22):
I think that we're finally getting to the place where
it's going to become a really relevant part of how
we operate as a society because of this pace of innovation,
but it doesn't come without the need to have guardrails.

Speaker 6 (01:07:33):
Well, listen, this was a really cool conversation and I
hope you'll come back because guessing in twenty twenty four
will still be talking about generative AI AI and all
that it can do, because, as you said, we're really
kind of early on in this whole process. Thank you
so much. Have a great week in great holiday season.
Mandy Long, CEO and board member at Big Bear AI
Jennings on Zoom in Chicago. We covered a lot, but

(01:07:54):
I have like a million more questions.

Speaker 11 (01:07:56):
I know, I wish we had two more blocks to
kind of really dig into other things.

Speaker 6 (01:07:59):
We'll come back to have her back. Are folks, you
are listening and watching Bloomberg BusinessWeek right here on Bloomberg Radio.

Speaker 1 (01:08:05):

Speaker 8 (01:08:12):

Speaker 2 (01:08:19):
So care well, pretty much through earning season, and like
last quarter one, theme has been clear. It was clear
today hefn with Mango DB's results. Right, Companies of all
stripes are embracing AI, and for good reason. Take Wall
Street for example, Banks using generative AI tools could boost
their earnings by as much as three hundred and forty
billion dollars annually through increased productivity. It's a nine to

(01:08:40):
fifteen percent increase in operating profits. That's according we should
knowe to a McKinsey Global Institute report that was published today.
We know they kind of want you to use AI
because then you'll hire.

Speaker 6 (01:08:49):
Them consolutely say yeah, you can look back to day.
All right, We've got a great guest to give us
an idea though, of where companies are going to be
spending money when it comes to it in the new year.
Crawfordal pret back with, President of the global market intelligence
firm IDC International Data Corporation, also known as he joins
us here in our Bloomberg Interactive Broker studio at Bloomberg Headquarters.

Speaker 7 (01:09:10):
Hello.

Speaker 6 (01:09:10):
Hello, almost happy new year.

Speaker 12 (01:09:12):
So great to see you guys, So great to have
you here.

Speaker 6 (01:09:14):
How are you thinking about twenty twenty four?

Speaker 12 (01:09:16):
So when we think about twenty twenty four, it's a
year of transition for tech twenty twenty three was a
year that people were extremely concerned about inflation.

Speaker 2 (01:09:26):
They were extremely concerned about.

Speaker 12 (01:09:28):
About the impact of inflation on tech. And at the
end of the day, we'll see tech spending around about
five percent, which continues the trend that tech is just
so core to what companies do for next year. This
five percent for twenty twenty three.

Speaker 2 (01:09:43):
When you say tech spending, what is the umbrella that
that covers.

Speaker 12 (01:09:47):
So think about information technology spending, so everything from devices
like personal compute devices, all the way through application software,
all the ways of the partner software, all of it.

Speaker 2 (01:09:57):
And services, what about.

Speaker 12 (01:10:00):
Cybersecurity services, securities in there, any any any it and professionals.
And this is across is across the world, It's across
it's across all regions.

Speaker 2 (01:10:09):
I would think it'd be higher five percent a lot.

Speaker 12 (01:10:11):
Yeah, So five percent we've seen we saw it ramp
up to double that during COVID when we saw things accelerate.
But you know, we've seen it bounce in that five
to eight percent range for It's been pretty range bound
for for quite some time. If you take out sort
of the two thousand and eight downturn, if you take
out the craziness that happened during COVID.

Speaker 6 (01:10:31):
What kind of growth were we seeing prior to the
pandemic the year before.

Speaker 12 (01:10:35):
So prior to the pandemic, like I said, you know,
we saw that in those years it was about seven percent. Yeah,
so it was kind of in that range.

Speaker 2 (01:10:43):
Okay, why why isn't it higher? Why hasn't it grown
As we've become more reliant on.

Speaker 12 (01:10:51):
Tech every company, the tech you think about is hot,
the new hot thing it's and that stuff is growing, right,
So application software ten percent and we've seen you think
you think about the cloud thirty percent growth now cooling to.

Speaker 2 (01:11:06):
So companies are spending less on let's say, a PC
for every person because they've come down in price. These
are commodities, and they're spending more on the cybersecurity stuff
that keeps there.

Speaker 3 (01:11:16):
So it's actually worse than that.

Speaker 12 (01:11:18):
If you look at something like twenty twenty three, it
spending growth in PCs got shalacked. It was down fifteen
fourteen percent, it was down dramatically. Now PCs are actually
a thing that moved the needle because every man, woman
and child needs a PC who needs to be connected
to the internet, and they spend somewhere between eight to
twelve hundred dollars on a PC. So as PCs start

(01:11:38):
to come back, which we think that they will next year,
they actually move the needle on it demand. It's not
uncommon to see them move the needle a couple percentage points.

Speaker 6 (01:11:46):
Why are they coming back next year?

Speaker 12 (01:11:48):
They're coming back next year because there's because we saw
this huge increase during the pandemic, and they start to
get old, and they start to age and they break
and people need to start replacing them as well. They'll
be a Windows eleven upgrade cycle next year, and we'll
start to see new PCs that actually bring wait for it,

(01:12:08):
AI out to the edge, so you see a coprocessor
which we'll be able to run the AI workloads, and
we think that will start to fuel by the middle
of next year another upgrade cycle.

Speaker 6 (01:12:19):
I am curious because you guys consult you talk with clients.
What's the constructive conversation to be having around AI right now?
What are you hearing from those clients.

Speaker 12 (01:12:30):
I think what customers are starting to get into now
are what is we're sort of beyond kind of the
big mind art of the possible, and we're now getting
into how can I actually apply AI to my business
and what are the barriers associated with AI. So a
lot of the axioms that have always applied to tech
apply here, which is, you know, things like garbage in,

(01:12:53):
garbage out. You've got to get your data organized. You've
got to understand how to structure your data in order
to make sense and in order to be able to
synthesize your data in order to make better decisions with
your data. And so we're spending a lot of time
talking with customers around the choices they make around their data,
how they invest in their data, and how they can

(01:13:14):
really think about structuring it for a world where they're
going to be making decisions that they're potentially synthesizing and
getting output from AI.

Speaker 2 (01:13:24):
You know, Carol knows this. I've been completely obsessed with
the sort of two different schools of thought when it
comes to development of artificial general intelligence AGI, especially in
the wake of everything that happened at Open AI, Sam Wellman,
you came on and spoke yes during that crisis, I
don't know if I could call it a crisis. Actually,
during the drama, let's call it drama. The thing, Yeah,

(01:13:45):
are you you spend you know, you're in this day
in and day out. Is there any sort of reality
to the idea that artificial general intelligence is something we
as a human species should be concerned about?

Speaker 16 (01:14:03):
Oh?

Speaker 12 (01:14:03):
Absolutely there is. It's going to take a while for
us to get to that point. And I think that
seeing companies start to come together and have a discussion
around the responsibility and not necessarily doing it after the
horses have left the proverbial barn is very very important.
I think we're starting to be able to elevate that

(01:14:25):
but that that discussion. But I definitely believe that the
ability to do harm and the ability to spin people
up with misinformation, those are things you can just start
to see on the horizon where we really have to
think about what is the provenance of that decision or
of that data. And I think we're going to see

(01:14:46):
a lot of that. I think we're going to see
governments start to require Okay, you've you've been told something,
but what was the source of that? Where did that
information come from?

Speaker 6 (01:14:54):
So much journalism a little bit, no, no, I mean
a lot of it. Like I used to think about
when I started, you know this, you had to know
what the source of the material was right, and whether
it was a perspective or point of view, so subjective
versus objective or data points who supplied it. So it's
kind of interesting to hear you say that, but I
do wonder what's it going to take Crawford. Are we

(01:15:17):
going to be kind of chasing just like we were
in social media? Like social media?

Speaker 10 (01:15:21):
Right?

Speaker 3 (01:15:21):
Where's the yes?

Speaker 12 (01:15:22):
Sadly, I think companies are going to try to get
ahead of this. I think governments are going to try
to get ahead of it, but we are going to
be chasing it for a long time. I mean, what
happens when someone can apply AI to a social engineering
piece of ransomware that works really really well, and I'd
like to have thirty by tomorrow morning. What happens when

(01:15:43):
when someone can say, oh, you know what, if I
alter the code of that genome, I can create a
new kind of a virus, and I'd like ten thousand
by tomorrow. These are the really horrible things that people
could do with generative AI. To really think about setting
loose a new generation of malware in a way we're

(01:16:07):
not really thinking about chasing.

Speaker 2 (01:16:09):
But each example that you bring up has a person
behind it making a decision to actually do that. Yeah,
what about that science fiction scenario where literally the robots
become more powerful than us because they can think, because
they can reason.

Speaker 12 (01:16:26):
So when you start to get to broad agi, if
you will, that is a risk where when you're dealing
with massive amounts of information and the machine starts deciding
what's right and what's wrong, then you're into that zone
and you're into that zone of wait, wait a minute,

(01:16:47):
what do you mean my credentials don't work because now
I've been decided that I'm a person who shouldn't be
included in this place, in the airport, on the plane,
in some safe place. Make up your science fiction scenario.
But when you start dealing with huge volumes information and
instante instantaneously making those kinds of decisions, things get a
little bit dodgy, isn't.

Speaker 6 (01:17:07):
It kind of sort of the problem with self driving cars? Right,
dog on the right, woman with a stroller on the left. Actually,
how does it determine and someone it's going to hit something? Right?
How does it make that decision right?

Speaker 12 (01:17:19):
And so someone has to write that code and get
to a point where that decision can be made. But
eventually there's a set of parameters and rules associated with
decisions like that, and the machine has to decide.

Speaker 6 (01:17:30):
Are you worried because of warfare? I'm sorry military warfare, of.

Speaker 12 (01:17:34):
Course, Yeah, I mean absolutely. I mean these are the
kinds of things that that bad actors can capitalize on,
and bad actors sometimes get aggregated and it becomes a
bad nation.

Speaker 6 (01:17:42):
Think of the Jones story that we did.

Speaker 2 (01:17:43):
I know, and you know, I go back to the
Elon Musk conversation that he had at the Deal Book
summit of the New York Times last week. He said that,
you know, the government doesn't allow you to build a
nuclear weapon in your backyard. There are grand rolls and
rules and regulations. He thinks this is more dangerous than
a nuclear weapon.

Speaker 12 (01:18:01):
Yeah, And I think he's jumping ahead a number of steps.
But I think if you walk back from that putting
the bullets in one hand and the gun in the other,
and being able to say, Okay, I'm going to give
you the tools to load those together and eventually start shooting,
he's not completely wrong in terms of where you can draw.

Speaker 10 (01:18:20):
The line to.

Speaker 12 (01:18:21):
And so I agree that we have to be really
mindful as governments to think about not letting these circumstances happen,
and unfortunately, Carol, I'll take the conversation back to something
that you asked, which is are we going to be
playing catch up? And I think the answer is, more
often than not, we are going to be playing catch
up because the number of situations and the number of

(01:18:43):
instances is just so vast and we just don't know
how why that spectrum can get.

Speaker 6 (01:18:51):
Do you think the good will outweigh the concern?

Speaker 12 (01:18:54):
Okay? I believe we are going to go through a
very very difficult period where work and jobs get redefined,
and there are a lot of roles and a lot
of jobs that are going to be threatened by AI.
Think about the legal profession, think about pair ofalegals, think
about accountants, think about those kinds of areas. We will
then invent new jobs that can stand on the shoulders

(01:19:15):
of AI, and people will be reskilled and we will
that will be a great time.

Speaker 6 (01:19:20):
Who created Way as our co founder, he was kind
of saying as very similar.

Speaker 12 (01:19:23):
Absolutely, if there's going to be a period of pain
associated with AI, that will I think lead to a
period of tremendous growth.

Speaker 6 (01:19:31):
But there's also responsibility that comes along with any technology.
Happy New Year, bewhile proffer del Pratt IDC.

Speaker 15 (01:19:37):
Thank you, thank you.

Speaker 1 (01:19:43):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 6 (01:20:03):
So excited about our next guest. So much going on,
as you know, at the intersection of sports, money and education,
which is why this next story we're going to kind
of start here is on our radar. It's courtesy of
Bloomberg'sjillian ten. She reported last week on Patrick Coff Company,
which works with athletes and entrepreneurs to invest in private equity.
The company, along with more than fifty of its current
and former athlete clients, including Philadelphia Eagles center Jason Kelsey.

(01:20:26):
And I've heard that name, okay, Jason Swift.

Speaker 14 (01:20:31):
Oh wait wait? Can I say that cool? That's the
cool one.

Speaker 6 (01:20:35):
You are hearing the voice of Mark Patrick Coff, founder
and CEO of Patrick Cough Company. Joenning us here in
her Bloomberg Interactive Broker Studio. Just you know, you're here
for the next sixty minutes. No, I'm just next time.
You're going to be here for the next are you.

Speaker 14 (01:20:48):
Well, we love an opt in choice, not you have
to go do this choice.

Speaker 6 (01:20:53):
Well, we love having you. First of all, tell us
about this deal. I am G academy. I wasn't that familiar.
Did kind of a deep but tell me what you
guys are doing.

Speaker 14 (01:21:01):
But you loved tennis though years ago I loved gymnastics
was a little bit less. But with relevant IMG they
haveppened gymnastics.

Speaker 17 (01:21:08):
But I remember when I was in high school, I
had friends who, if they were really good tennis players,
all they wanted to do was go to Nick Boltary
in Tampa.

Speaker 14 (01:21:15):
And that is IMG Academy, by the way. So that evolved.
Ultimately IMG acquired voluntary changed the name, and it's always
been the pre eminent place for in some cases privilege.
But as it's changed for under privilege.

Speaker 2 (01:21:30):
I mean, I guess he didn't I guess he didn't
pay a time to.

Speaker 14 (01:21:32):
Yeah, exactly. So, so on one hand, you kind of
knew the brand.

Speaker 17 (01:21:36):
I did a lot of investment banking work for IMG
when they were an independent agency. When Endeavor bought them.
I stayed in close touch with IMG Mumbatala invested.

Speaker 14 (01:21:46):
At the time.

Speaker 17 (01:21:47):
I was involved in that transaction and one of the
heads of the head of corp David and devver Got
named Brent Richard, who was an old friend of mine.
We've been on the opposite side of a couple of
different banking deals. Ended up as part of his role
and endeavor taking over this acquisition they had done with
IMG and focusing on the academy and seeing a really
big vision for for private education, democratizing I think access

(01:22:11):
to the best coaching.

Speaker 2 (01:22:13):
Well, yeah, I just wanted to jump in just because
when you talk Politaria, I did. It's funny we did
the US Open this year, got super into tennis again.
Read Agasy's book. He talks about his experience at Politary.
One thing that he made hate, Oh yeah, more hate
than love for sure. Actually it's totally worth and Politary
for years was his coach. But one thing that he

(01:22:34):
talked about was academics and and that's that's you know,
in my experience too with growing up in California and
seeing other tennis academies, the tennis was great, academics were lacking.
Talk to me a little bit.

Speaker 17 (01:22:45):
About Yeah, I will I'm sorry to interrupt you. I
will do a little plug here, but it'll make sense
for a second. I've been the chairman of the board
of a charity in New York called New Heights Youth
and it's a basketball related charity. But we use academics
as a benefit for getting good coaching.

Speaker 14 (01:23:02):
So we've sort of said, look, if you can.

Speaker 17 (01:23:03):
Be part of a team, if you can consistently commit
to what's required beyond a team, you can do the
same thing in the classroom.

Speaker 14 (01:23:09):
So if you want our coaching, we're going to give you.

Speaker 17 (01:23:11):
We're going to force you into after school programs, SAT prep, college,
you know, admissions process, you know help. So IMG has
done that at a much greater scale in the for
profit ways. So, yes, academics is a story here today.
Athletics is what has always been what people talked about,
but it's the combination of the two that is really

(01:23:33):
what's interesting here. So using sports as a hook to
bring in kids either underprivileged or privileged, put them into
the right types of programs to professionalize in their minds,
how they take advantage of this physical skill they have
off the court, off the field, and to have better, bigger,
more fulfilling lives because of it. And there's proof points

(01:23:53):
across the globe. So when IMG sold you know itself,
Endeavor sold IMG Academy at EQT, the and NOORDA and GLA,
the opportunity was here to globalize a really interesting methodology
that has changed people's lives for many, many years.

Speaker 14 (01:24:12):
And Andre is a good example.

Speaker 17 (01:24:14):
He probably wouldn't be the Andre Weovius Williams in the
long list of people who have created discipline their lives,
learned how to exercise one muscle. If they can do
that successfully, realize they can exercise their intellectual muscles too.
And IMG is a really phenomenal, i think academic process
to do that.

Speaker 6 (01:24:30):
And the asception isn't that everybody's going to become this
big professional play.

Speaker 14 (01:24:33):
It's very few make it to the kind of like.

Speaker 6 (01:24:35):
A great finishing boarding school, right of course.

Speaker 17 (01:24:38):
I mean it's one way of looking at I mean
at New Heights IMG two. If five percent of these
kids go and play some level professional sports. Remember professional sports,
you know, take basketball isn't just the NBA.

Speaker 14 (01:24:49):
There's leagues in Italy and.

Speaker 17 (01:24:52):
France and Greece and Israel and many other places Brazil,
great players coming from all over the world. Now, So
that's the other opportunity here with I Academy and why
they chose EQT and why we could be helpful is
there's a real opportunity to globalize this.

Speaker 6 (01:25:05):
You know, speaking of globalization, there's so many places I
want to go with you, PGA and live they're supposed to.
I think there's a deadline at the end of this
year for this merger.

Speaker 14 (01:25:15):
I think we talked about it this spring as if
it was a done deal already.

Speaker 6 (01:25:18):
It's coming or it's expected to. What do you think
happens next?

Speaker 14 (01:25:23):
You know, I don't know. I mean it's very hard
to say. I think it's this is a good thing absolutely.

Speaker 17 (01:25:29):
Look, I think anytime people have an opportunity to be
paid fairly for their talent.

Speaker 14 (01:25:37):
Is a good thing.

Speaker 17 (01:25:38):
So if it's one league, clearly you know that caps
to some extent what someone can make. I think competition
ultimately is a good thing. I think the way it's
been managed has been quite poor.

Speaker 14 (01:25:51):
I'm really pretty certain that the JP Morgan's of the
world who happened on you know here just in full
disclosure of twenty percent of my business.

Speaker 17 (01:25:59):
Yeah, but who are the bigges sponsors of the US Open,
for example, I'm sure they were, And by the way,
the Masters and other things like that, I'm sure they'd
allowed voice when this fell upon us in the spring. So,
you know, I think it's a good thing if it helps,
you know, you know, democratize golf, so more people play golf,
more people see golf, more people attend golf tournaments. I

(01:26:20):
mean it's been for the privileged few who get to
go to see the Masters or go, you know, watch
any of these tournaments.

Speaker 14 (01:26:26):
And I hope something good comes of it.

Speaker 17 (01:26:28):
I mean, I think TQL is interesting, which is the
new Indoor League right, see if that that got Scott delayed,
you know, it's it's an interesting way to take a
sport that's been for very few people who could afford it.
So if LIVE and PG come together, you have to
see what that means.

Speaker 14 (01:26:45):
TBD.

Speaker 6 (01:26:45):
Yeah, Hey, listen, we've only got a couple of minutes,
so you've got to already promise to come back really soon.
But two minutes. The world's pretty stressful, to say the least.
And who'd have thought, like just kind of this year,
the stuff that we were talking about seeing living athletes,
what's their role in all of this? And we're getting

(01:27:06):
ready for a really important presidential election in the United States,
what's their role or should be their role? Where you
know it can backfire in an instant.

Speaker 3 (01:27:14):
Used to be.

Speaker 17 (01:27:15):
I think in the locker rooms of the old days,
you didn't talk about money, you didn't talk about sex,
and you didn't talk about politics. I think in the
last cycle of professional sports, where these kids are seeing
the world in a very different way, they're learning more
by accident or intentionally at a much younger age.

Speaker 14 (01:27:36):
They are forming opinions, they're realizing the power of their brains.

Speaker 17 (01:27:40):
Back to IMG Academy and I speak to athletes most
cases seven days a week.

Speaker 14 (01:27:45):
They'll bring up, what do you think is going to
happen next November? I don't like this candidate, I do
like that candidate.

Speaker 17 (01:27:52):
And they're starting to understand that if they decide to
amplify a point of view that's well informed, that could
be influential. I mean not to make it about diversity,
but you think about Obama and Oprah and the impact
she had the Number one I'm going to use this
example because it's kind of off point for the US
but the number one cricket player in India has two
hundred and fifty million Instagram followers. I don't have offhand

(01:28:16):
how many Instagram followers Joe Burrow has or Kyrie Irving
or but you saw what Kyrie Irving did last fall.
They can make a difference. And if athlete A doesn't
want to see Donald Trump become president, he or she
has a voice, and I think you're going to see
a willingness that you did not see in the past
other than from a very select few to use.

Speaker 1 (01:28:38):
That voice to.

Speaker 17 (01:28:41):
I think a positive event. And any opinion is a
good opinion. I would say that about athletes and you know,
just have an opinion. I don't care whether you go
left or right or do this deal, don't do this deal.
I just want you to have an opinion. So we
say that a lot of them about politics. How an opinion,
it matters. It's going to affect your lives.

Speaker 6 (01:28:58):
As I said, promise to come back soon because we'll
do more. We will obviously. Mark patrick Hoff, president and
CEO of Patrickcoff Company, joining us here in studio.

Speaker 1 (01:29:06):
Live weekday afternoons from three to six Eastern Listen.

Speaker 8 (01:29:13):

Speaker 2 (01:29:20):
She's the founder and CEO of a consulting firm that's
worked with the likes of Northorpe, Grumman, Lockheed Martin, the SEC,
the US Army, US Marine Corps, Booz, Allen Hamilton, and more,
including Harvard and Howard Universities. The company's name, KUSSY is
an acronym for knowledge, Understanding, strategy and Implementation, and in
the company's own words, is quote committed to transforming, inspiring

(01:29:41):
and cultivating leaders around the world.

Speaker 6 (01:29:43):
So let's get to it. Her new book is The
Power of Conscious Connection for Habits to transform.

Speaker 8 (01:29:47):
How you live and lead.

Speaker 6 (01:29:49):
We have with us Talia Fox. She's the chief executive
officer of the consultancy Cousy Global and a fellow at
Harvard University. Talia, nice to have you here with us.
You know, we're talking about Charlie Munger, quite a leader
and someone who also kind of seemed to live to
the fullest and was very honest and transparent about his views.

(01:30:12):
Tell us a little bit about how you are thinking
about how people can transform how they live and lead.

Speaker 15 (01:30:18):
Yeah, you know, it's amazing.

Speaker 9 (01:30:20):
With his death, he almost reached one hundred years old.
And what you were describing about all of the giving
that he did with his time here. That is what
conscious connection is about. It's about being conscious of what's
happening in the world and the needs and being connected
to the power that you have to change it. And
that power can look different from many different people.

Speaker 2 (01:30:39):
So let's think about I want to think about your
own journey as a leader, because you started this consultancy
quite a few years ago and you work with companies
to help cultivate leaders. And it's not just companies that
you work with, but you also offer these online learning modules.
Can you talk a little bit about your own journey
as a leader, because when I speak to people who

(01:31:00):
do this type of work, I always want to get
an understanding of Okay, well, how do they develop themselves
into somebody who can actually teach these skills.

Speaker 3 (01:31:07):
Yeah.

Speaker 9 (01:31:07):
So my background is in psychology, so I really studied.
I started off in nonprofit studying the impact that leadership
has on real lives, and I started doing keynotes speaking
events for nonprofit organizations. But I was very connected to
the fact that leadership decisions impact. I was able to
look into children's eyes and see the impact of leadership decisions.

(01:31:28):
I've had quite an interesting journey of being a single mom,
of having to really find my way and study what
matters and what makes a difference in achievement. And so
I've read literally hundreds of books, and I have been
on a hunt for my entire twenty year career, twenty
plus years finding out what are those core ideas, what

(01:31:48):
are those core things that really make a difference in
how we live and lead. And that is really what
this book is about. I'm sharing those stories, the stories
of achievement and the hack that I call it to
a great leadership and a great life.

Speaker 6 (01:32:02):
So let's get to the four habits. So talk to us,
walk us through them, if you will.

Speaker 9 (01:32:07):
So it's very interesting because the four habits make up
the acronym love. But that absolutely was a beautiful coincidence.

Speaker 1 (01:32:14):
So the four.

Speaker 9 (01:32:15):
Habits are listening, observe, value, and engage, And each of
these habits is connected to a leadership skill that we
want to master. So listening is connected to emotional intelligence
that's very critical for our success. And so I outline
in the book how to do that. Observation is connected
to systems thinking. This opportunity to be to see patterns

(01:32:39):
and to understand how interdependent we are. Values is connected
to cultural competence, our capacity to value people, to value
connection to value differences, to really be able to see
all the big issues happening in the world and understand
how adapt how to adapt our world views to those
and then lastly engage the real critical key value, particularly

(01:33:02):
in the world we are in today, is to be
able to communicate in such a way that connects instead
of divides, and so that habit makes up the acronym love,
which I don't know my Department of Defense folks on
how I feel about that acronym. I was actually cringing
at how fluffy it was. But when I saw it
right there, I said, oh, it makes up love. I
wasn't going to shy away from it, and so we're

(01:33:24):
sticking to it. So we'll see if leaders can handle
the experience of that being so conscious connected in their strategy.

Speaker 2 (01:33:32):
It's so funny because you know, you do work with
clients like the Department of Defense, the US Army, of
the US Marine Corps. What's the reaction to the folks
when you share with them this methodology.

Speaker 9 (01:33:43):
Well, our our firm kusai kusi knowledge as you've shared
understanding strategy implementation that is real. That has been the
strategic approach that we use when we go and do
culture transformation projects. So this book I wrote not only
for my clients but also for it's for the people,
and so it's really about on an individual level and

(01:34:03):
on a leadership level, what are those habits that we
need to master on a regular basis, on a daily
basis to impact change.

Speaker 6 (01:34:11):
Talia. You know, we talk with leaders all the time,
you know, And I'm curious about when you're working with
the defense contractors do a lot of government work, it
looks like consultants university. I mean, what is it that
people often come to you and say, Okay, here's we've
got this situation, here's what's wrong, or here's what's wrong
with our leadership?

Speaker 3 (01:34:28):
Like help us? Or do they not even know?

Speaker 9 (01:34:30):
What's interesting is that, you know, I really wish that
people would be more pulled by purpose as opposed to
push by stress. But typically when people do come to Kusai,
there's something happening in the news, there's a you know,
racial issues, social issues, political issues, and you're seeing a
huge divide or even bleeding out executives. You're seeing problem,

(01:34:51):
serious problems. We actually call it a culture shot. They
need to be triaged if you will, to get the
culture back on board. You've got a lot of conflict.
People aren't talking to each other. That's when people say, okay,
who do you go to? You go to Kusai for
those kinds of challenges, and we really come in with
sort of skills and systems to support in a full
scale culture transformation.

Speaker 2 (01:35:13):
So what are the issues right now that the companies
that are coming to you right now are telling you
that they're facing.

Speaker 9 (01:35:21):
So right now we're dealing, of course with a lot
of diversity, equity and inclusion issues, particularly around conversations about politics,
conversations that are really highly tense, and so there is
this opportunity. I mean, in the government, they have an
act in a law that you're not supposed to talk
about these things. But people know their social media and

(01:35:43):
so one of the things that we're doing is how
do you have these difficult conversations, how do you see
authentic without having to get into the weeds of what's
actually happening in the world. So how do you build
those relationships in a way that feels professional but that
also feels authentic.

Speaker 6 (01:36:00):
Well, I'm curious. I'm glad you went there because it's fascinating.
We have conversations, and I feel like they certainly picked
up momentum when it comes to diversity inclusion coming off
of the pandemic, coming off of George Floyd. It's amazing
how here we are, how many years out from that,
how many years before that that we were having those conversations,
and yet we still have a problem.

Speaker 10 (01:36:21):
I don't know.

Speaker 6 (01:36:22):
You talk with leaders, you work with companies. What is
the fix so that we don't have to have the
conversation anymore? Because it just is.

Speaker 9 (01:36:31):
I don't think that it's a fix. I think it's
actually almost like hygiene, cultural hygiene. I love that you
have new people coming into an organization. This is something
where where people we have feelings, we have triggers, we
have experiences, we have life, and so we really need
to treat it as a constant opportunity to create space,
to be able to build this environment where people are

(01:36:53):
committed to innovation, committed to growth, committed to being their
best selves. But in order to do that, the soil
has to be We have some very specific communication strategies
and ways that this culture operates, and we need to
make sure that everyone is on the same page. I
kind of like to use the very plain language of
in this house, this is how we behave in this house.

(01:37:15):
This is how we talk to each other, and that's
that's the corporate speak. This is what we do here together,
and this is how we have these kinds of conversations
and connect and deal with each other.

Speaker 6 (01:37:25):
Corporate hygiene. Is that what you said?

Speaker 14 (01:37:27):
Yes, I like that.

Speaker 3 (01:37:29):
I like that right.

Speaker 6 (01:37:30):
It's just it just is like you do it because
you're yeah, you have to. You should be gotta brush
your teeth.

Speaker 9 (01:37:36):
You gotta brush your teeth act and using that analogy,
the more you keep brushing your teeth, you have less cavities,
less paces. You know, I don't want to be going
on a wonderful trip somewhere and you have to go
get a root canal. But that's what organizations are dealing
with right now. I will tell you if I was
leading in any large organization, I would not lead a
team that has not been trained on how to manage
and communicate. I think in this day and age, it's

(01:37:58):
almost like not having a way upsider people not being
able to use a computer.

Speaker 6 (01:38:02):
It's a great way, but it's a great way of
thinking about It's a different mindset and I think that's
really important in terms of changing ultimately the outcome. Tell
you Fox, thank you so much, Chief executive Officer, the
consultancy Kusai Global, A fellow at Harvard and CURSS. Our
book is the Power of Conscious Connections for habits to
transform how you live and lead. This is the.

Speaker 1 (01:38:21):
Bloomberg Business Week podcast, available on Apple, Spotify, and anywhere
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from three to six Eastern on Bloomberg dot Com, the
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Bloomberg Businessweek Weekend - December 8th, 2023

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