March 17, 2025 • 59 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg International Economics and Policy Correspondent Michael McKee and Bloomberg News Chief Correspondent for Global Macro Markets Liz McCormick discuss why Fed Chair Jerome Powell faces a tricky task this week of both assuring investors the economy remains on solid footing while also conveying policymakers stand ready to step in if necessary.
Even as the Federal Reserve chair has touted US resilience, uneasiness sparked by President Donald Trump’s rapidly escalating trade war has sent stocks tumbling over the past month. Bond yields are down, too, as is consumer sentiment as worries about the economic outlook mount.
“Powell needs to give some sort of a signal that they’re watching it,” said Dominic Konstam, head of macro strategy at Mizuho Securities USA. While the Fed chief will likely make it clear that officials don’t target the stock market, they can’t ignore the recent slide, he warned.
Bloomberg Businessweek Technology Editor Joshua Brustein and Bloomberg News US Semiconductor & Networking Reporter Ian King talk about Nvidia looking past DeepSeek and tariffs for their next chapter. Wendi Whitmore, Senior VP at Palo Alto Networks, explains how AI and geopolitical issues are impacting businesses globally. Bloomberg Businessweek Senior Reporter Amanda Mull discusses why President Trump’s ‘Buy American’ campaign won’t improve the US economy. Jensen Harris, CEO of Textio, explains how the company's AI powered software removes bias from performance reviews, job descriptions and other company communications. And Drive to the Close with George Young, Portfolio Manager at Villere Funds.
Hosts: Tim Stenovec and Emily Graffeo. Producer: Paul Brennan.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Week Insight from the reporters and editors that bring you
America's most trusted business magazine, plus global business, finance and
tech news. The Bloomberg Business Week Podcast with Carol Masser
(00:23):
and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:26):
Disappointing retail sales last month, adding to a concern of
a pullback in consumer spending in the US, while a
pair of business surveys suggested a growing caution, retail sales
rising by less than forecast in February, and the prior
month was revised down to mark the biggest drop going
all the way back to July of twenty twenty one.
Combined with separate data on Monday, had show to drop
(00:47):
off in New York state manufacturing activity and a weaker
home builder sentiment. The reports are consistent with expectations for
slower economic growth. We got with us Michael McKees, Bloomberg
News Economics and Policy correspondent. He joins us in the
Bloomberg BusinessWeek Studio Mike week. Spending on goods is what
we got today? Is it seasonal? Is it more than seasonal?
Speaker 3 (01:06):
It's a little bit of all of it. The seasonal
of factors for February this year, we're very very generous,
and so we were expecting a rise in maybe a
better than expected rise in the core component, which is
what we got. But it really only netted out with
a negative one percent to revise down a figure for January.
(01:27):
So for the first two months of the year it
was flat. Of course, the headline numbers were not very
good at all, which may have something to do with
the weather. We just don't know at this point, but
we'll keep an eye on that going into March. And
Emily and I were talking about how we know you're
going to go over to Gharadelli and bring us back
some nice chocolate.
Speaker 4 (01:47):
Do your shot for you, Mike?
Speaker 5 (01:49):
Yeah, yes, What about e commerce activity? That's obviously something
you can't buy the Gearedelli factory.
Speaker 4 (01:55):
Yeah no, well I bet you could.
Speaker 3 (01:57):
But that was the one good spot of two point
four percent during the month. And what that may be
related to is the weather, the flu, the fact that
people were inside more than usual, and we did see
a decline in food and drinking places down one point
(02:20):
five percent, and that's that's the most discretionary of things,
So it tells you maybe that people were holding back,
but also, do you want to go out when it's
four degrees.
Speaker 2 (02:31):
I Mike, yeah, I mean I don't that sometimes you
have to, but you don't necessarily have to go buy
a new car and look at cars on the lot
when it's you know, four degrees. I think the big
question a lot of people have is we continue to
get more and more data that is kind of pointing
to at least a pullback or maybe a slow down
when it comes to the consumer and your view, how
is the consumer doing? Is the consumer doing much different
(02:54):
than we were doing just six months ago.
Speaker 3 (02:56):
Well, it's pretty obvious that the consumer is not in
a good move. But this is the first hard data
we've had on it, and it does suggest that maybe
people pulled back some, but it's not enough to really
give us a firm feeling on it because of the
strength of the internet purchases during the month. So we've
(03:17):
got to get some more data on that. I can
tell you. The Atlanta Fed updated their GDP NOW numbers
for the first time since that negative two point four
earlier this month. That got everybody all excited, and they
came up with negative two point one.
Speaker 4 (03:34):
Now they admit.
Speaker 3 (03:35):
This is distorted by all the gold shipment into the
United States, and they ran a model on that two
point four number and came up with the fact that
it would be a zero point four percent gain for GDP,
so essentially zero during the month if today was the
end of the quarter. And Chris Low of FHN Financial
(03:59):
ran the same model today and said, what you did
up with is negative one tenth of a percent. So
any way you look at it, the numbers we've had
up to this point are not good. But we've got
another month, two months of data to go.
Speaker 2 (04:16):
Really well, remind everybody what goes in we're gonna talk
about the Federal Minute, but remind everybody that goes into
that GDP now forecast and how it is this sort
of snapshot in time.
Speaker 3 (04:25):
Well, they just incorporate the data as it comes out.
So what we've got is January data, and now we've
got February data up through the retail sales report, but
there's still new home sales, existing home sales, and other
things like that to come yet. So we've got also
(04:46):
the PCE spending numbers, so there's a lot of data
for February still out there, and then we got to
get March data before they can give you a number
that actually will resemble anything like what the GDP number is.
But it doesn't suggest that the first two months of
the quarter have started off well.
Speaker 5 (05:05):
So, Mike, in light of all of that, what are
we going to get from the Fed this week? Is
this going to be another one of those meetings where
Powell says we're still in weight and see mode, we
have to wait for that data to come in.
Speaker 6 (05:19):
Or is there going to be a little bit more action?
Speaker 3 (05:22):
You nailed it, that's what we're going to get. It's
not going to be any action this time in the
sense of guidance on for future rate moves. We will
get a new dot plot, and my guess is it
will still have two dots on there. Two rate moves
this year, simply because they don't have evidence one way
or another to change that. Not enough that the economy
(05:44):
is failing to add, and not enough that inflation's coming
down to subtract. So at this point, status quo is
going to be the word. It'll be interesting to see
what kind of economic projections they make in the Summary
of Economic Projections, because last time was December, and we've
obviously seen a big change in at least consumer attitude
(06:06):
since then, but there doesn't seem to be a collapse
in the labor market. So do they change unemployment, do
they change GDP? And where do they think inflation is?
My guess is this will be a meeting where we
see very little change in almost anything they do, and
they'll just go home and wait for the next one.
Speaker 2 (06:26):
But it does sound like it's the easiest job around.
As the President said when he was running, you know,
you just flip a coin and decide whether to move
rates higher or lower.
Speaker 4 (06:35):
I'm not going to have you weigh in on that, Mic,
but I do want to know.
Speaker 2 (06:37):
I do want to know about what the FED is
dealing with now versus what they dealt with at their
last meeting. Their dual mandate is certainly, you know, maximum
employment and stable prices. Which would you say that they're
more focused on one now than the other.
Speaker 3 (06:52):
They're more focused on inflation, but that's been true for
a couple of meetings because the labor market has been
so stable. They want to make sure that inflation continues
to go down, and we're getting mixed readings on that.
CPI went down, PPI went up a little bit, and
then some of the all of the inputs into PCE
that we have gotten from those two indicators suggests the
(07:14):
PCE is going to go up. So you've got mixed
news on what's happening with inflation. None of it suggesting
that inflation is going one way or the other very quickly,
but it's something they have to keep an eye on,
so they'll operate as if inflation were just sticky, staying
where it was, and that makes for a good reason
to just leave rates unchanged.
Speaker 4 (07:37):
All right.
Speaker 2 (07:38):
Perhaps that's a perfect segue to move on to a
bigger discussion about the fat or Thanks to Michael McKee,
Bloomberg News International Economics and Policy correspondent, Mike, I've got
plenty of time to go to the Jaredelli store and
get you some chocolate on the way back from San Francisco,
so we'll see what you get for Saint Patrick's Day.
Speaker 4 (07:54):
Appreciate you joining us.
Speaker 2 (07:55):
Hey, speaking to the FED drum, Powell does face that
tricky task this week of both the shuring investors and
the economy that remains on solid footing. Will also conveying
policymakers and stand ready to step in if necessary. On that,
Treasury Secretary Scott Besson was asked on Meet the Press
on NBC on Sunday whether he can guarantee the American
people are there that there would be no recession on
(08:18):
President Trump's watch.
Speaker 4 (08:19):
Here's what he had to say.
Speaker 7 (08:21):
You know that there are no guarantees who would have
predicted COVID, right, so I can predict that we are
putting in robust policies that will be durable and could
there be an adjustment because I tell you that this
massive government spending that we'd had, that if that had
kept going, we have to wean our country all of that.
(08:44):
And on the other side, we are going to invigorate
the private sector.
Speaker 2 (08:49):
That was Treasury Secretary Scott Besson on Meet the Press
on Sunday. Liz McCormick is Bloomberg News Chief correspondent for
Global macro Markets, and she and Jenelle Marte write about
Powell's balancing act. She joins us in the Bloomberg A
Business Week A studio. Liz, what is the message that
Powell needs to get across this week?
Speaker 8 (09:06):
Yeah?
Speaker 9 (09:06):
First, can I say I think Mike McKee set me
up for a long Day Wednesday, because every time we
say nothing's going to happen, something happens. But now I
never questioned his judgment, but I think, yeah, from the markets,
I mean, everyone in the markets knows Chairman Pal is
going to be very cautious. He's got a balancing act.
He's not going to say, oh, I'm worried about the
(09:26):
stock market.
Speaker 8 (09:27):
But you know, they want.
Speaker 9 (09:28):
To see if he will because like Mike said, of
course no one expects any rate change, but the consensus
seems to be that they keep that dot plot which
shows two cuts as far as the last quarterly update
in December for this year, that it probably stays the same,
but that people in markets are thinking maybe in the
press or he could give just kind of a stronger
(09:50):
nod to something he's been saying, but just kind of
more forcefully somehow that like, if things worsen, if the
economy starts to show more signs of trouble, we stand
ready to do whatever we need to do, meaning if.
Speaker 8 (10:03):
They have to cut rates a lot, they will.
Speaker 9 (10:06):
Of course he's said that before, but I think some
in markets are saying, you know, with the ten percent
correction and we're bond yield to fallen from their peaks
this year, kind of that fear of recession, and some
like Mike laid out at least the soft data has
been a bit troublesome, especially with the survey data.
Speaker 8 (10:23):
That could Shairman Pal at least.
Speaker 9 (10:24):
Give a little bit more of a nod to, you know,
don't worry, We've got this.
Speaker 8 (10:28):
You know, we'll take care of it if they need to.
Speaker 2 (10:30):
Well, well, Liz, you mentioned what's happening in the bond market,
or what has happened in the bond market, but also
what's happened in the equity market last time I checked.
Taking you know, paying attention to a sell off in
the equity market is not necessarily part of that dual
mandate when it comes to inflation and stable prices. What
is your view on this and to what extent the
Fed actually cares about what happens in the equity market.
Speaker 8 (10:51):
Yeah, absolutely correct.
Speaker 9 (10:53):
It's that it's just financial conditions, you know, And I've seen.
Speaker 8 (10:57):
Some good stories.
Speaker 9 (10:58):
I forget all the writers they're Fromberg who wrote them
about how these financial conditions bleed into they could into
the real economy. When people look at, you know, their
investment assets and they're going down. You could kind of
stomach that for a while, but do you feel like, oh,
I better keep it a little closer to the vest,
you know, let me spend a little less because the
(11:19):
money I had is you know, a fifth of what
it was, you know, or went down by a fifth.
Let's say that maybe people start to spend less or
a little more concerned. Does it kind of bleed into
because one thing about expectations, like the FED taught has
laid out very clearly about like let's talk about inflation
expectations that they feel like expectations can bleed into like, oh,
(11:41):
you think inflation is.
Speaker 8 (11:42):
Going to get worse, so you change your behavior. So
you're right.
Speaker 9 (11:45):
They're not gauging the stock market. That's not part of
their thing. But I think someone is probably gonna ask them,
like markets seem to be pricing more risk of recession?
Is that a concern? But so I think that's why
it has to be like a clever dance around showing
of course we're watching, we're aware, we look.
Speaker 8 (12:03):
At financial conditions.
Speaker 9 (12:05):
But you know, right now our dual midate the inflation
is not where they want it. They do not see
a major problem in the economy the labor market. Like
the Jolts data, the recent jobs data wasn't bad. They
really don't have the data, like Mike was saying, to
really kind of do anything, you know.
Speaker 8 (12:22):
Anna Wong reached out.
Speaker 9 (12:23):
To me on that story to say, hey, listen, Liz,
I don't think the Fed's going to do that, you know,
So I never kind of cross her. So she's saying
she doesn't think Pal's going to sound any different. So
we'll watch Anna, You're probably right, but we'll say, you know.
Speaker 5 (12:36):
Well, Liz, do you think that Powell does have a
more difficult job this week trying to convey that balancing
act just because of.
Speaker 6 (12:43):
What's happened in markets.
Speaker 9 (12:45):
Yeah. I think it's gotten a little bit worse in markets, right,
So he knows because people get concerned, and I think
he always wants to talk to main street, right, you know,
not just he doesn't care about investors and how they're
doing in positions and losses. But it's main street if
they're worried about oh, you know, it's the economy going
to get worse.
Speaker 8 (13:02):
You know.
Speaker 9 (13:03):
We hear of all these job cuts from DOGE and
companies saying they're kind of you know, hiring less and
they start to worry and their spending habits change. So
I think he's always trying to like maybe he'll show
up on sixty minutes one.
Speaker 8 (13:15):
Of these days. It's usually when he's.
Speaker 9 (13:16):
Talking to main Street, but to say, like, you know,
you know, inflation is top of mind. Inflation hurts everyone,
he always says, but that you know, he's aware. And
if it's you know, starts to bleed into the real economy,
there's a lot they can do right now, you know,
just standing pat is the best policy. He doesn't want
to weed into politics, right so he said, you know,
(13:37):
you know, we're looking at these policies.
Speaker 8 (13:38):
They don't know exactly like the market.
Speaker 9 (13:40):
Some of the tariffs have been laid out, others haven't,
so they don't exactly know what you know, how long
the degree.
Speaker 8 (13:46):
And so they're starting to try to model that.
Speaker 9 (13:48):
But you kind of can't until you you know, we
have April second coming with President Trump laying out a
new round.
Speaker 8 (13:54):
So I think, like Neil.
Speaker 9 (13:55):
Judas says, they don't want to be the story this week,
that doesn't want to be the story. So I think
Chairman Powell will have a lot of notes and he's
going to have a lot of scripts that he's.
Speaker 8 (14:04):
Going to try to stick to.
Speaker 9 (14:06):
But yeah, I think it's gotten a little harder since
he talked last. Because you know, you're you're an equity
wizard over me. The market is a little bit worrisome.
Speaker 5 (14:14):
Yeah, we've seen, you know, a significant drop since the
last bed meeting. You know, you mentioned inflation. That's something
that obviously Main Street cares a lot about. But from
your angle, you're watching the bond market. What is the
bond market telling us about expectations for inflation.
Speaker 9 (14:29):
Yeah, so bond market break even inflation levels. If you
look at them, they're not really out of bounds. I
keep looking to at like the Fed likes the long
run ones that smooth things out. If you look at
the so called five year five year forward, it's going
to like five year inflation five years from now. That
is not at a troublesome level, so I think. But
(14:49):
the University of Michigan, which was a survey of course
that was really the long run ones, really really jolted higher.
Speaker 8 (14:55):
They don't like to see that.
Speaker 9 (14:56):
But I don't think the bond market is screaming inflation
concern either, So you know, they do have some room
to wait and we know when if they need to move,
they can go fast.
Speaker 8 (15:07):
Right, So I think he feels like, hey, we can
do this.
Speaker 9 (15:10):
But I don't think the bomb market screaming, especially because
yields are coming down, kind of leaning on the growth concerns.
Speaker 5 (15:16):
All right, well, Liz McCormick, Bloomberg News, Chief correspondent for
Global macro.
Speaker 6 (15:20):
Markets, thank you so much.
Speaker 5 (15:21):
As always, we'll be waiting for that FED meeting coming
up soon.
Speaker 1 (15:25):
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Speaker 4 (15:37):
YouTube and videos.
Speaker 2 (15:39):
Jensen Wong looks like he's on top of the world.
He's held babies, He's signed countless autographs. He's thrown out
first pitches at MLB games. He's led tech conference crowds
in chance. He's appeared on stage with CEOs from the
likes of Goldman, Sachs, Meta Platform, Salesforce, and more. He's
also chatted privately at the White House with President Donald Trump.
Oh yeah, he's also one of the wealthiest people in
(15:59):
the world. Yet he's well aware that corporate fortunes can change,
and he's watched them do with brutal speed in the
semiconductor industry. Here's a history of booms and bus for
tech infrastructure companies because their products tend to become commoditized,
so right. Joshua Brustine and Ian King for Bloomberg Business Week.
Joshua is a Bloomberg BusinessWeek Technology editor. Indian King is
Bloomberg News at US Semiconductor and networking reporter. Check out
(16:22):
their story on the Bloomberg Terminal and at Bloomberg dot
com slash at BusinessWeek. Joshua joins our program this afternoon
in New York. Ian is here in our San Francisco bureau.
Ian King, I want to start with you. What do
you think keeps Jensen Wong up at night?
Speaker 4 (16:36):
Right now?
Speaker 10 (16:38):
What's always kept him up at night?
Speaker 11 (16:39):
Right?
Speaker 10 (16:39):
I mean? He you know, he tries to run this
company like all of the cliches are worth thirty days
away from going out of business. But that really really
drives him. What everybody thinks is, oh, he's the top
of the world. But you've got to remember this company
spent most of its career, it's thirty years in existence.
Under the shadow of intel, under this permanent threat that
(17:00):
what it does is going to be taken away. And
that's really his mentality. Yes, this is great, this is
the moment, but he's already looking for the next thing.
He's already looking to extend that run. And he's always
already looking at what might go wrong. That's who he
is and that's how he does things.
Speaker 5 (17:16):
Joshua, describe what drives the Nvidia CEO, because you guys
have this great line in the BusinessWeek story. Wong's tendency,
even when he's away from the office and noticeably tipsy,
is to always be closing.
Speaker 6 (17:29):
Talk about that more.
Speaker 11 (17:31):
Yeah, Jensen Wong is always referred to as Jensen is
a real sort of force of nature personality. He's very
intense and he's always sort of evangelizing for right now,
it's for artificial intelligence and the things that you'd really
need a lot of invidio chips for. And so you'll
see him constantly telling you why the future is going
(17:51):
to revolve around these enormous data centers full of invidio chips.
Speaker 5 (17:56):
And Ian talk a little bit more about just the
expansion here. What is the next phase of growth? Ian
for this company.
Speaker 10 (18:07):
Well, the expansion is AI has to be everywhere for
this to work. Right now, you have a very small
group of companies, whether it's Microsoft or a as, that
are buying the majority of the gear, putting the majority
of these capabilities in place. What really needs to happen
is that it has to get out there in the wild.
It has to get out there in the economy. Companies
(18:28):
have to use it, consumers have to use it. It has
to be part of factories, It has to be part
of vehicles, It has to be part of everything to
justify that massive spend that we've seen and to keep
that massive spend going.
Speaker 2 (18:39):
Is it still, though ian about AI inference and training
AI models or is it about something bigger for in
video moving forward? Is it about the driverless cars? Is
it about humanoid robots? Is it about that next gen
thing that Jensen's watching that we don't know about yet.
Speaker 10 (18:56):
Well, you refer to training and inference. Some experts will
tell you that the training, the actual creation of the
core of AI has kind of happened or is close
to being sort of complete. What we need now are
models that are more specific and tightly focused, models that
can drive your car models that can tell you factory
(19:17):
robots where to go and not to bang into each other,
and to do things in the most efficient way. That
what we need, and that is where inference comes in,
because then you have these more specific models that say,
find the way around a factory. They have to know
then and infer in the moment, Hey there's something coming
towards me, I need to stop, or hey there's a
human being there coming around the corner, I need to
(19:37):
not run them over. That's what we'll get into now.
Right now, a lot of AI out in the wild
is kind of the chatbots. It's reacting to a very
limited set of stimulus text or voice. And what we
need is AI to be inferring more meaning from the
world around it, and that's still a work in progress.
Speaker 5 (19:58):
Joshua, what is physical AI and how is Nvidia expanding
into it, because you guys mentioned that a number of
times in your article.
Speaker 11 (20:07):
Sure, physical AI is basically, instead of chatbots, AI that's
operating in the real world. The most obvious example of
it right now is autonomous vehicles, something that in Vidia
has been working on for a decade and has actually
said would be solved many years ago, but it's also
looking at robots, automated factories, basically anything where the AI
(20:30):
is moving something around the world and in video. Is
very bullish on this because it needs as many applications
as possible, and if it can unlock factories and cars
and everything, that's a lot bigger than just doing something
on the internet.
Speaker 2 (20:44):
Joshua, You've been covering technology for years, and I'm just
curious contextually for you to describe this moment to us
as a technology editor. Is this a bigger deal than
the rise of the browser in the nineties, Is it
bigger than the rise of social media in the early
two thousands, Is it on par with the rise of mobile?
Speaker 7 (21:04):
Like?
Speaker 4 (21:04):
Where is this in your view as a tech editor.
Speaker 11 (21:08):
I think what we're looking at right now is that
we've seen the sort of laying the groundwork phase of
the artificial intelligence intelligence era, and now we're waiting to
see that this is going to be the size of
social media, that this is going to be the size
of the browser, that the vision that in Nvidia and
other AI companies have laid out is actually going to
(21:29):
sweep the economy with the force that they say it's
going to, or if it's going to be something more modest,
and as Ian said, considering how valuable in Vidia is,
this can't just be a pretty big deal. It has
to be an enormous deal for Nvidia to justify the
amount of money it's worth.
Speaker 5 (21:45):
Right now, Ian, I imagine that you know, while you
were writing this, the idea of deep Seek and other
competitors came up in your reporting process. Can you talk
a little bit more about just how in Vidia is
reacting to the competition and these companies that are saying
(22:08):
that they can do AI cheaper.
Speaker 10 (22:11):
Yeah, I mean, it's important to note that for the
fundamentals of what's going on, in Video really doesn't have
any competition right now. If you want to train a
large language model, you're going to do it on in
Video's gear. At the same time, the enormous expense of
doing that, and then the expense or the possible expense
of deploying that in the real world has got everybody
(22:31):
thinking is there a better way to do this? Is
there a faster way to do this? And Deep Seek
is arguably the most poignant example so far that raises
the question, perhaps we can do this more cheaply, or
perhaps we can sort of diffuse a little bit of
what we've already done, and you snap that off and
use that in a cheaper way. So there's so much energy,
there's so much at stake here, and I think is
(22:53):
really an example of that. And in Video's reaction was great,
this makes it cheaper. This means it's going to be
everywhere at all, too good for us. And that's a
typical Jensen response. You know, don't deny reality, don't look back,
look forward.
Speaker 4 (23:06):
Yeah, as you right, and as you and Joshua right.
Speaker 2 (23:09):
There's this history of booms and boss for the tech yeah,
infrastructure companies because their products tend to become commoditized in
that's not happening yet within video.
Speaker 10 (23:18):
Yeah, and yet is is a very powerful word in
this sentence. Everybody is reacting like, oh, in videos the
king of the world, and they've been, you know, at
this for years they kind of have. But look at
the numbers, right, only like three years ago, gaming graphics
chips were the biggest part of their revenue. This has
happened really really quickly and very dramatically. There's been a
(23:40):
massive transfer of wealth. The key question is can that
transfer of wealth become self sustaining and that's what they're
working on right This This isn't an Intel that's been
around for decades and in this dominant position. This is
something that's happened really quickly and is a very quickly
evolving situation.
Speaker 5 (23:58):
Joshua and Videous stock is down ten percent year today.
It's obviously up a ton in the last few years.
But what do you think Jensen thinks about the recent
moves in this company or.
Speaker 6 (24:12):
Does he not think about that stock price at all.
Speaker 11 (24:15):
I'm sure he thinks about the stock price, because everyone
in the world seems to think about the video stock price.
You know, there's a lot of headwinds that Jensen Wong
has been well aware of for quite some time, and
they're all coming to a head, you see, with tariffs
and other barriers on international trade, including a US China
trade war that could have national security implications that will
restrict chips specifically. I think the rise of deep Seek,
(24:39):
while he will say that's a great thing, also shows
that maybe some of the assumptions about how many chips
are going to be needed for each subsequent step in
the AI development. You know, maybe those assumptions aren't as
ironclad as they thought, and That is why you see
him sprinting ahead and trying to get to the next phase,
to have these applications start to bear fruit and to
have a new story to tell, to keep to keep
(25:01):
that moving, that momentum moving.
Speaker 10 (25:05):
And to what Josh said there, if Jensen has a genius,
it's it's his ability to never sit still, to always
be absorbing all of the inputs. So you mentioned the
stock price, whatever is bugging investors, he hears it, and
then when you go into the next investor presentation, when
you go into the next earnings, he's already moved beyond it.
(25:25):
In the conversation, he integrates a bit of the concern
such as deepseek, into his presentation, into what he's saying,
into the points he makes over and over again. And
that's true. Whether it's regarding the stock price, so that's true,
whether it's regarding the technology that he's always absorbing that information.
That's where his genius lies. Whether he's ultimately right or not,
whether it plays out like he says it's going to,
(25:47):
that's another thing. But what we wanted to convey in
this story as much as anything else, is the level
of intensity being brought by somebody who isn't doing a
victory lap.
Speaker 2 (25:57):
So Joshua, how does he think it's going to play out?
How does Jensen think this is going to play out?
Speaker 11 (26:02):
He thinks, Hey, it's going to be everywhere He's you know,
he will tell you that the robots are going to
be here. We've been saying that it's going to take
however long, but that this is the year that the
that the car problem is solved, and soon you'll see
so many autonomous cars on the streets that healthcare will
be over overhauled. You know, he's there giving you the
bulls case if you listen, and you know whether he
(26:25):
believes that deep in his soul, like, we don't know,
but he will make the most convincing case possible.
Speaker 2 (26:31):
Ian, I just want to let you wrap it up
on this what we have you changing subjects very briefly.
Speaker 4 (26:37):
Intel has just been on a tear.
Speaker 2 (26:38):
We can't let you go without just giving us thirty
seconds on Intel and it's new CEO.
Speaker 10 (26:43):
Yeah, we have a new CEO. But we don't know
what he's going to do. We don't know whether he's
the breakup guy who's going to preside over the end
of Intels exists or whether he's the guy who's going
to take the existing plan and just make it into
a better plan or better execute it. Until we know that,
we don't know which way they go.
Speaker 2 (27:00):
Well, investors are should be bet big on him, because
the shares of that company have just been on a
tear since that was announced. A really great story, and
really appreciate you both of you joining us. Joshua Brustein
and Ian King writing for Bloomberg A BusinessWeek about Nvidia
and Jensen Wong. Of course, a big event in Nvidia
GtC happening this week in northern California'd be sure to
(27:20):
check out our coverage. You can do that at Bloomberg
dot com and of course on the Bloomberg terminal as well.
Speaker 1 (27:27):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern on Applecarplay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station,
Just say Alexa Play Bloomberg eleven thirty.
Speaker 12 (27:45):
Well.
Speaker 2 (27:45):
A cyber attack last week on x of course elon
Musk social media platform. It was reportedly caused by insufficiently
protected servers that were targeted by a distributed denial of
service attack, in other words DDoS attack. Cybersecurity analysts say
the attack was possible because X's origin servers were not
shielded behind tech that blocks do DOOS attacks, making them
(28:06):
vulnerable to attack. Now pro Palestinian activist group called Darkstorm
Team took responsibility responsibility for the attack without providing any evidence.
Bloomberg News wasn't able to independently verify the group's claims,
and representatives from X did not respond to a request
for comment. It does show, though, that even the company
owned by the wealthiest person in the world is vulnerable
(28:29):
in this day and age. For more, we bring in
Wendy Whitmore, senior vice president at Palo Alto Networks, where
she works with businesses to defend them from cyber threats
think ransomware, state sponsored espionage, and more. Wendy joins us
from the Bloomberg at BusinessWeek Studio. Wendy, good to have
you back with us. Give us a big picture here
where you are, where we are versus the bad actors.
(28:51):
Are we still at least one step ahead of them.
Speaker 13 (28:55):
Well, so, I think the story you presented is a
great example of what we're seeing, which at high level
is the increase in speed, scale, and sophistication from attackers worldwide.
There's nation state activity which we've continued to see a
massive increase in. And then on the cyber criminal side,
what we're seeing is largely what you mentioned, so focus
(29:16):
on disruption, right, attackers intentionally wanting to disrupt business operations,
to do it in a way that's very visible that
you know causes disruption to an end consumer. And oftentimes
they want to do this because they have a higher
likelihood of commanding some sort of payment in return. Clearly
wasn't happened in your story last week, but that certainly
(29:37):
is often the intent and very consistent with what we're seeing.
Speaker 11 (29:41):
Wen.
Speaker 5 (29:41):
Do you work specifically with businesses to defend them against
these cyber threats? What do the cyber attackers really want.
Speaker 6 (29:50):
Out of businesses? Do you see a pattern.
Speaker 5 (29:52):
In terms of, like, I guess, the biggest trend in
terms of these what these hackers actually want.
Speaker 13 (29:58):
The biggest trend is unfortunately still that focus on commanding
a return of payment. So oftentimes, you know, if it's
a cyber criminal, they're looking to how can I generate
the light the highest payment in return for the attack
that I've provoked. So they're going to take every avenue
to do that, whether it's extorting the company, it's causing
reputational damage, causing actual operational disruptions. We've seen that in
(30:21):
the hospitality industry and healthcare, in technology as well, and
now you just saw that, you know, in social media
companies last week.
Speaker 4 (30:29):
When they hew vulnerable.
Speaker 2 (30:30):
You know, we often talk about companies in the context
of being vulnerable to hackers or toward malicious actors. How
vulnerable though, is the US government in your view?
Speaker 13 (30:42):
Well, you know, I think you're hitting on a fundamental
premise here, which is cybersecurity really is national security today.
So I think as a country, we're certainly well positioned.
We've got a lot of money in proactive defense and
certainly in the ability to detect quickly when something is amiss.
We're seeing more and more organizations, certainly including the federal government,
(31:04):
move towards more proactive investment in security. So looking to
invest on the front end, whether than waiting until something
occurs on the back end, and really having that visibility
to one central location is critical to be able to
make decisions quickly, analyze what's going on and then get answers.
Speaker 5 (31:22):
What does investment in cybersecurity look like from a business angle?
Is it companies training employees about safe digital practices or
are there actual pieces of infrastructure and.
Speaker 6 (31:35):
Software that these companies are investing in.
Speaker 13 (31:37):
Yeah, it really is both, right. So one of the
areas we specialize in at Palaoto Networks is just the
ability to have a platform that enables that central visibility.
So that's investment in technology where you can get answers
and cloud endpoint and the network. But the employment, the
training employees piece is so critical because all of these
attacks are successful because employees are successfully you know, taken
(32:02):
advantage of. So either their credentials are stolen, maybe it's
a help desk that's targeted. With the onset of AI. Now,
with generative AI in particular, that human piece has become
so real and so tangible, and the barriers that used
to exist, like challenges in language for example, that doesn't
exist now because these attackers are able to use jen
AI to facilitate and automate so many of those attacks
(32:23):
and do them in a realistic way.
Speaker 2 (32:26):
Okay, So that's what really concerns me, and we've all
seen the stories of people being misrepresented, or you know,
you have a family member that's called and they say
they're being told that one of their loved ones is
in jail and needs money or something like that. For years,
it was pretty easy to identify that that wasn't real.
Speaker 4 (32:46):
But I think those days are behind us.
Speaker 13 (32:49):
Agreed, It's very concerning. So from a business standpoint, the
reality is we have to fight AI with AI. So
while attackers have leveraged AI to accelerate their tax, to
automate them to make them faster at scale, the also
the reality as businesses have invested in AI, and if
you haven't, then you need to in the lens that
(33:10):
you have to automate your defenses. You've got to be
able to detect very quickly and rapidly so that you
can make decisions to contain the spread of an attack
in your environment.
Speaker 4 (33:19):
Well, okay, so how does that? How does that work?
Speaker 12 (33:21):
Though?
Speaker 2 (33:22):
If you're an individual and you're not a business, how
does that work? If you know, how can my parents
protect themselves or somebody's relatives, or how can we protect ourselves?
Speaker 13 (33:32):
I have those same concerns. Right, My parents are certainly aging,
and that's it They're a target demographic for fraudsters, for
criminals who are looking to take advantage of citizens. So
I think the more awareness we can have, the better
in terms of making sure that people are aware that there,
you know, is this threat and a potential risk with AI.
(33:53):
They need to validate sources if something seems too good
to be true, or if you are you receive a
phone call for sample or an email and there's a
sense of urgency like, hey, this has to happen immediately,
I need an account information. Now I need you to
make a phone call. Those should all be red flags
and triggers at the consumer level.
Speaker 6 (34:11):
We don't have a ton of time left.
Speaker 5 (34:12):
But I'm wondering just how optimistic you are that just
as these attackers get more advanced in using AI to
commit cyber attacks, companies can leverage AI to respond.
Speaker 13 (34:28):
I love that we're potentially ending on a more optimistic note.
I'm highly bullish as it relates to AI.
Speaker 8 (34:34):
I see the.
Speaker 13 (34:34):
Investments we're making, not only in the research to understand
how attackers are using AI, but the investments in accelerating
our workflows, our processes, having copilots for tasks, tasks that
used to take days now take minutes and in sometimes seconds.
So the reality is we can leverage our really smart
people towards even more challenging tasks. And that's really exciting
(34:56):
and motivating, and I think it's going to be a
key to success moving forward.
Speaker 2 (35:01):
Hey, Wendy, thirty seconds before you let you go. Given
the growth of AI and the way that companies are
spending around AI, do you think companies are still spending
sufficiently when it comes to protecting themselves.
Speaker 13 (35:12):
You know, what we're seeing is companies spending more of
their budget on proactive security than on reactive security. And
I think that's great news and it's going to continue
to ship the ball forward in terms of making it
harder for the attackers to be successful and encouraging that
the organizations who are providing defense are going to win.
Speaker 2 (35:31):
Wendy went More, Senior vice president at Palo Alto Networks,
Joining us from our Bloomberg BusinessWeek studio in New York.
Speaker 1 (35:38):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from two to five these during listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (35:51):
The by American movement has been periodically invoked since the
Boston Tea Party. The goal has been promoting economic nationalism
strengthening the US economy. Yeah, despite its compelling logic, there
is little evidence that buy American campaigns actually work in
reversing consumption trends or preserving manufacturing jobs, and their success
is often tied to broader economic conditions.
Speaker 4 (36:14):
Amanda Mole is a senior reporter.
Speaker 2 (36:15):
For Bloomberg Business Seek, and she writes about why Trump's
Buy American campaign will not improve the US economy. She
joins us in the Bloomberg BusinessWeek Studio. Check out her
story and more on the Bloomberg terminal at Bloomberg dot
com slash BusinessWeek. Amanda, why doesn't this tend to work?
Speaker 3 (36:33):
Well?
Speaker 14 (36:33):
It depends on what you mean by work. Buy American
campaigns are you know, sort of on their face, designed
to increase consumption of American made products. Often that doesn't
work because they do not meaningfully change the number of
American made products available. So people generally buy what is
(36:55):
you know, in front of them, what is easy to get,
what is financially feasible for them to buy? And buy
American campaigns aren't really designed to change that in any
meaningful way, even over a long period of time. But
I would argue, and I argue in the piece, that
they're not really meant to do that, even though that's
how they are presented to the public. They work quite
(37:15):
well at stoking xenophobic sentiment, stoking anti immigrant sentiment, and
aligning workers with the interest of their bosses, which I
think historically that is what they're designed to do, and
in that way they do work.
Speaker 5 (37:32):
Talk a little bit more about how these buy America
campaigns impact the job market specifically, and what the data
is showing us about whether these campaigns in history have
actually brought jobs on shore.
Speaker 14 (37:46):
Historically, they don't move the job market that much industry
by industry. Sometimes they can tweak short term circumstances a
little bit, but what really matters is how much investment
public investment there is in particular industries. Tariffs, if they're
like really well designed to target particular industries, and if
(38:08):
they're combined with broad scale investment in those industries to
build them at home. All of that sometimes gets like
bundled up with a buy American movement, and all of
that together can like impact the future of a particular industry,
but just telling people to buy American in general doesn't
really have any mechanism by which it would increase employment.
Speaker 2 (38:32):
But Amanda, if the way that the Trump administration is
thinking about this is a bit different than in the past,
like let's say it's I don't know, instead of encouraging
people to buy American, they're making it so it's really
difficult not to buy American. So that product that is
in front of you is less is actually the least
(38:54):
expensive one because there is not a cheap import available.
Speaker 4 (38:58):
Does it work then?
Speaker 14 (39:01):
I think that we're sort of about to see if
it works then. But there's reason to believe that even
under these circumstances, even when the alternatives are really onerous,
it wouldn't work in a lot of situations, because what
does it mean to buy American in an economy where
the supply chains are globalized, Different components come in from
(39:23):
all kinds of different places, and then are you know,
in the end assembled in America. A lot of things
that are labeled as American goods contain foreign components or
need raw materials from overseas that are then going to
also be more expensive. And then there's just a lot
of things that Americans want to buy that are not
produced in any meaningful quantity in the United States, and
(39:45):
there's really no way for them to be produced in
the US, like take coffee, avocados, Like you can't satisfy
American current American demand for these things with the American
capacity to produce them ourselves. So you have this this
situation where buying American has become sort of like a
(40:07):
meaningless slogan because like what is an American product? I
get into it in the story a little bit, but
it's really hard to say, like what that even is.
Speaker 5 (40:16):
Yeah, this is a really detailed story, and I love
that it starts with some American history and an homage
back to the Boston Tea Party, which I didn't realize
that you could trace the roots of that campaign all
the way back to the beginning of the country. Maybe
we could just end on where you see at least
trumps buy America campaign going, and how we'll judge the
(40:39):
efficacy of it, you know.
Speaker 6 (40:41):
Within four years from now.
Speaker 14 (40:42):
You know, it sort of depends where tariffs go because
something that we see historically over the course of you know,
a number of sort of like large buy American campaigns.
What the you know, the volume of imports and the
tendency to buy American goods really depends on is the
overall economic situation. So if if we end up in
(41:05):
a recession, it is likely that fewer imported goods are
going to come into the country. But historically, once that
recession ends, the trend fine on imported goods returns directly
to whatever it would have been before the recession happens.
So without like a like a robust plan for public
investment in particular industries in the US, without more there there,
(41:30):
I really don't see how this is going to make
any positive long term changes in US manufacturing.
Speaker 4 (41:36):
Amand them all.
Speaker 2 (41:37):
Bloomberg Business Week senior reporter joining us back there in
the Bloomberg Business Week Studio. Check out her, his story
and more at a Bloomberg dot com slash business Week
and also, of course, on the Bloomberg terminal.
Speaker 1 (41:48):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five e's during listen
on Applecarplay and Android Otto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (42:02):
Well, the backlash against DEI has been Swift Coles just
the latest retailer to back away from using DEI language
amid criticism of the policies from the Trump administration.
Speaker 4 (42:12):
Under pressure, many companies across.
Speaker 2 (42:13):
Sectors, including Victoria's Secret Target metaplatforms in Walmart, have been
pulling back from DEI, some dropping diversity related hiring and
promotion goals. Really curious what Jensen Harris has to say
about all this. He's the co founder and CEO of Texteo.
The company makes software that removes bias from workplace communications,
so think performance reviews, job descriptions, and more. Texto says
(42:34):
that a quarter of the companies in the Fortune five
hundred have used Texio. Full disclosure. Bloomberg is a customer
of Textios. Bloomberg managers and other company leaders use the
company software to ensure their job descriptions, performance reviews, and
manager feedback are written in a way that's clear, fair
and equitable. Also, Bloomberg Beta, the early stage VC company
backed by Bloomberg LP, the parent company at Bloomberg Media,
(42:55):
is an investor in Texteo. Jensen joins us from Las
Veigs I guess Jetson, Good to see you. Have you
noticed companies embracing your software differently. Just in the last
few months have as we've seen such a backlash to DEI.
Speaker 12 (43:11):
Well, I think an important thing to realize is that
most companies aren't actually stepping back from the principles of
diversity of fairness in hiring and in how they treat
their employees. Even after these executive orders that came out
a few weeks ago, eighty percent of American companies have
(43:32):
said they're staying the course or they're actually investing more
in ensuring that they're hiring the best folks for their
companies and giving them the tools to get fair feedback,
for instance, that helps them grow and thrive. And so
I actually think that almost every CEO understands that at
(43:54):
the center of their business being successful are the people
that they've hired and the people that they need to
grow and promote to do great work. And so I
don't think there's actually much controversy about when you want
to hire the best people, you need to cast the
widest net. I don't think that there's actually much controversy
about you should treat your employees fairly and ensure that
(44:17):
all of them have an opportunity to get the feedback
they need to do a great job, and so I
think kind of this is a bit of a tailwind
actually for folks who actually want to invest in the
people out of their companies.
Speaker 5 (44:35):
So talk about how Texteo has evolved. Because you launched
the company in twenty fourteen. Obviously tech and AI has
grown so much since then, and DEI has become much
more of a hot button issue. What are the biggest
changes that you've seen for Textio over the last few years.
Speaker 12 (45:00):
Yeah, So we were first to market as an artificial
intelligence company to HR. We've been doing AI in the
HR space for more than a decade now, and so
the last decade has really been for us taking our
core technology, which is about helping optimize talent. And we've
(45:23):
started with hiring a decade ago, ensuring that people could
build recruiting content, job postings and brand language that can
attract the widest set of qualified candidates to roles. Really
about hyper optimizing that content to perform well. And over
the last decade we've just continued to get further and
(45:46):
further into other important aspects of running a company. So
we have done performance feedback optimization, ensuring that I mean,
managers hate writing performance reviews, and we built software that
gives them the ability to write really effective performance reviews.
(46:09):
In halftime, we have done pure feedback. We're actually tomorrow
introducing interview feedback, which is a new product that ensures
and I think especially important in this world in which
everyone is thinking about meritocracy and how can we ensure
that we hire the best. The way you do that
is by interviewing folks, And tomorrow we're announcing a product
(46:31):
that actually optimizes interview feedback to ensure that it's clear
that it's fair, that it's based on merit and to
help companies know that they're hiring the best folks for
the role. So that's really been the last decade for us.
Then about broadening the application of our world class AI
technology in a proprietary way to really transform all of hr.
Speaker 2 (46:57):
Hey Jensen, you said you were first to market with
this type of AI. How do you train the AI?
What is the II powered by? You know, we talk
about AI now in the context of a lot of
the lms that are powering what's happening in other services
and other platforms like you know, anthropics, cloud or open
aies chat, GPT.
Speaker 4 (47:16):
What power is your AI.
Speaker 12 (47:21):
Yeah, that's a great question. You know, we were one
of the first companies that brought generative to business back
in twenty nineteen, so more than five years ago, and
so the idea of how do you train AI to
be safe to use and effective is a really important
one and one that we've been thinking about for a
(47:41):
long time. So Textdeo's data is really based on a
whole bunch of different signals in the world. Some of
it is trained from sort of our signals of what's happening,
you know, for instance, in recruiting across hundreds of millions
of job posts in the world and seeing what goes up,
what goes down, how fast is a job filling, how
(48:04):
did different companies sound online, And we can take all
of those signals along with sort of our proprietary knowledge
of what actually is filling, what jobs are filling, what
industries are filling, what language works well in different locales
around the world, like I would talk to someone looking
for a job from New York differently than I would
London or San Francisco, for instance, And.
Speaker 7 (48:26):
We take.
Speaker 12 (48:30):
Which ends up being hundreds and hundreds of millions of
data points and use that to create refine the models,
and then humans are actually responsible for ensuring that those
models can be trusted, that they're safe, and most importantly,
that they actually work, that they actually create the optimizations
that the models predict they will. Now we have a
(48:53):
real advantage compared to a company like open ai, for instance,
which is we build models just for HR. We are not,
you know, writing a letter to Santa. We're not writing
your one hot chicken recipe. We don't care about any
of that general purpose stuff. We optimize in a hyper
way for HR scenarios and HR optimization, and so in
(49:16):
a sense we have a real leg up on everyone
else in this space.
Speaker 5 (49:21):
We talk a lot on this show about supply chains
and chip designers, and I'm wondering, as a company that
uses AI, has it gotten cheaper? Has it gotten easier
to leverage AI?
Speaker 4 (49:38):
Just in the last year or so, Certainly.
Speaker 12 (49:43):
The pace at which optimizations are happening and the pace
at which compute is becoming more and more easy to
access in a cost effective way, it has leveled the
playing field a little bit. That said, it's still pretty expensive,
and a lot of companies that over the last year
(50:04):
or two have decided to try to layer on artificial
intelligence on top of their legacy systems have found that
it's an expensive proposition, and so I think that's a
place where companies that really can embrace doing domain specific
models for HR but or for finance for sales are
(50:25):
going to find that they have a much easier job
because the models are right size for the tasks versus again,
an open AI general purpose model where you're paying for
a lot of compute in some cases in order to
get a relatively small amount of value.
Speaker 2 (50:43):
Back when you left Microsoft more than ten years ago
to launch Texto, and Emily kind of alluded to this
with the evolution of the company, what did you envision
texto would do versus what it's doing now.
Speaker 12 (50:59):
So we started Texteo with a really clear vision that
the world of HR was being behind and that we
could take the technology that we had to turn these
incredibly important aspects of business, right, I mean, think about it,
(51:20):
there's probably nothing more important for most businesses than who
you hire. Are those people great? Are you getting access
to the best talent? And then how do you help
those people grow? How do they give them the food,
the water, the help, the you know, everything we think
about you a greenhouse. All the people at your company,
(51:41):
how do you give them all everything they need to thrive?
And that is clear feedback, that's fair feedback. That's ensuring
that they can tell their manager what's working, what's not working.
It ensures that you get visibility across your entire workforce
about who actually should be promoted and maybe who needs
to let go because they're not a match. And so
(52:04):
we knew that this was incredibly fundamental, and the tools
that HR teams were using were locked in the past,
locked in the general electric and IBM models of the
nineteen fifties of how to do those things. And so
we thought that we could, with a dual strength in
AI and user interface, create next generation tools that would
(52:27):
be phenomenally easy to use, but also transformative in terms
of actually helping managers, for instance, not hate doing performance reviews,
helping recruiters were stretched to the hilt with how many
roles they have to fill now being cavisuals to automate
that make it easier and to outcase their competitors and
(52:52):
competing for talent.
Speaker 2 (52:54):
Jensen Good have to leave it there. Do appreciate you
joining us this afternoon. Jensen Harris is the co founder
and CEO of Text You.
Speaker 4 (53:02):
Rob macle I'll beout you let me drive. Oh no, no, no, no,
this is not a toy, honey. Please, I'll revels. Excuse me,
I want to drive.
Speaker 15 (53:13):
It's a good question.
Speaker 4 (53:20):
This is the drive to the clothes plunks for music.
Speaker 15 (53:24):
Well, briar Jela.
Speaker 4 (53:25):
Don on Bloomberg Radio.
Speaker 2 (53:28):
Well, we did just hear it from Charlie Pellett just
about ten minutes fifteen minutes ago in the close of
trading here, and we're seeing the S and P five
hundred off. It's best levels of the day, but still
up one percent. Well, the Dow out performing up one
point one percent, the NASDAK composite higher by just about
seven tenths of one percent. Let's see what George Young
has to say about this. He's a partner and portfolio
(53:49):
manager at Villary Funds. He joins us from New Orleans.
He manages the Villary balance to funds. V I l
X is the ticker year to date, it's in the
forty eighth percent, down just about one tenth of one percent.
Speaker 4 (54:03):
George, how are you good? To see you right doing?
Speaker 12 (54:06):
All right?
Speaker 4 (54:07):
Hey, we're trying to.
Speaker 2 (54:08):
Figure out the actual effect on markets that this president
is having right now, because he's getting a lot of
attention for the selloff that we saw in the last
few weeks. Do you think the sell off is a
result of uncertainty around tariffs and Trump's policies.
Speaker 15 (54:24):
I do.
Speaker 16 (54:25):
The market really does not like uncertainty, and you've had
all sorts of different uncertainties. It's a lack of predictability
and that makes our job tough. That makes regular investors
job tough. So you want to know about intert rates,
You want to the economy, Well, that's going to be
directly affected by tariffs, and that is going to get
passed on at the consumer. How the consumer reacts as
the big question.
Speaker 5 (54:47):
So obviously a lot of the downturn in stocks as
of late, I guess has to do with all of
that uncertainty on the horizon. When do you think the
market downturn end? I mean, we are up today, but
when you look at the SMP year to date, we're
down about three percent.
Speaker 15 (55:05):
Yep, that's correct. Well, a couple of comments to that.
Speaker 16 (55:08):
The SMP is down three percent, but if you take
out the magnificent seven, the SMB is actually up. So
that's one of the things I think that we're focused
on is you don't want to fall in love with
the stock.
Speaker 15 (55:19):
It won't love you back.
Speaker 16 (55:20):
So the Magnificent Seven have been darlings for the past year,
the past couple of years. So we try to look
for things that are undiscovered, that are unrecognized, that have value,
and it can offer the dividend return, can offer growth,
and specifically you want to look long term. So I
can't give you a data to stay exactly when the
market's going to turn this way or that way. But
(55:40):
what I can tell you if you look at history,
is that the stock market has outperformed the bond mark,
and the US stock market in particularly we're domestically oriented,
has outperformed what other indexes in the world have done.
So we remain optimistic and we try to look past
the vagaries the whip saw, and that can be problematical
for investors.
Speaker 2 (56:00):
Well, Georgie, you sent along some stock picks. I want
to go through a couple of them. I want to
start with Lineage, the global temperature controlled warehouse that that's
comprised of cold storage warehouses.
Speaker 4 (56:10):
You're bullish on this company, it's a reed. Why do
you love it?
Speaker 16 (56:14):
Well, we love it for a couple of reason. You
get growth and you can also get the income, so
it's set up like a ree as you said. But
what's interesting, they're the largest in the world that when
public a couple of years ago, the founders still own
about thirty percent of the company, so they put their
money where their mouth is. They did go public for
liquidity purposes, but at the same time they believed in
this company long term. So the important thing is they've
(56:34):
got over four hundred centers around the world. They're the
largest in the world. They've got ninety six different patents,
and all the food that we not all the food,
the vast majority of the food that we consume is
shipped and stored in climate controlled warehouses.
Speaker 15 (56:49):
So it's important that you.
Speaker 16 (56:50):
Understand that they're the most efficient they have. We just
toured a facility about a month ago that's local here
in New Orleans. They're the most up to date. It's
not the old day where you had palettes who were
being run around left and right.
Speaker 15 (57:03):
This is automated, this is mechanical. This is very efficient stuff.
Speaker 6 (57:08):
Okay, that's food warehouses.
Speaker 5 (57:09):
Tell us about copper because one of your other picks
is Report macmarin sure.
Speaker 16 (57:15):
So if you contrast that with something like oil that
has anywhere from a ten to a thirty year useful
life in most drilling prospects, this has a ninety year
life and there's no substitute for copper. Again, look at
something another commodity like oil, there are arguably other substitutes,
alternative energies, etc. When it comes to copper, that's all
you can use, and they are in very difficult places.
(57:38):
Freeport Copper owns one of the largest in the world
of Grassburg mine in Indonesia. Copper is dependent on demand,
and that is somewhat dependent on Chinese demand specifically.
Speaker 15 (57:50):
But if you look at every electric vehicle, everything you.
Speaker 16 (57:52):
Own, energy is electricity is clean energy, and you need
copper to make that work.
Speaker 15 (57:57):
We love for report.
Speaker 2 (58:00):
Hey George, before we let you go, Atlas Energy as
a number another one of your picks. They under sand
in the Premium Basin in Texas. What's your view on Alice.
Speaker 16 (58:09):
Well, it's interesting they have the sand and they also
have something called Dune Express, which is a forty two
mile conveyor belt throughout West I just.
Speaker 2 (58:17):
Heard about this conveyor belt in a podcast that I
was listening to over the weekend. This is what is
it the largest conveyor belt in the country.
Speaker 15 (58:25):
Exactly, you're telling my story for me.
Speaker 12 (58:26):
This is great.
Speaker 15 (58:28):
So they've got a wonderful yield of about five percent.
Speaker 16 (58:31):
They've been a little rocky recently because it made what
we think is a great acquisition to provide energy electricity
to these wells being difficult location. So again it's sort
of like the Freeport story, where is the copper difficult
places West Texas, difficult to get energy out there. But
more importantly, sand has been shipped by trucks heretofore, which
is slow, expensive and very dangerous.
Speaker 15 (58:52):
So this Dune Express is going to save money, It's
going to save lives. It's great, great change.
Speaker 2 (58:58):
I feel like I got to do a remote broadcast
from this conveyor belt just to see it, or maybe
go for a ride on this conveyor belt. George, really
appreciate you joining us. Thanks so much for taking the
time this afternoon. George Young's portfolio manager at Villary Funds.
He joins us from New Orleans.
Speaker 1 (59:13):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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(59:34):
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America's most trusted business magazine, plus global business, finance and
tech news. The Bloomberg Business Week Podcast with Carol Masser
(00:23):
and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:26):
Disappointing retail sales last month, adding to a concern of
a pullback in consumer spending in the US, while a
pair of business surveys suggested a growing caution, retail sales
rising by less than forecast in February, and the prior
month was revised down to mark the biggest drop going
all the way back to July of twenty twenty one.
Combined with separate data on Monday, had show to drop
(00:47):
off in New York state manufacturing activity and a weaker
home builder sentiment. The reports are consistent with expectations for
slower economic growth. We got with us Michael McKees, Bloomberg
News Economics and Policy correspondent. He joins us in the
Bloomberg BusinessWeek Studio Mike week. Spending on goods is what
we got today? Is it seasonal? Is it more than seasonal?
Speaker 3 (01:06):
It's a little bit of all of it. The seasonal
of factors for February this year, we're very very generous,
and so we were expecting a rise in maybe a
better than expected rise in the core component, which is
what we got. But it really only netted out with
a negative one percent to revise down a figure for January.
(01:27):
So for the first two months of the year it
was flat. Of course, the headline numbers were not very
good at all, which may have something to do with
the weather. We just don't know at this point, but
we'll keep an eye on that going into March. And
Emily and I were talking about how we know you're
going to go over to Gharadelli and bring us back
some nice chocolate.
Speaker 4 (01:47):
Do your shot for you, Mike?
Speaker 5 (01:49):
Yeah, yes, What about e commerce activity? That's obviously something
you can't buy the Gearedelli factory.
Speaker 4 (01:55):
Yeah no, well I bet you could.
Speaker 3 (01:57):
But that was the one good spot of two point
four percent during the month. And what that may be
related to is the weather, the flu, the fact that
people were inside more than usual, and we did see
a decline in food and drinking places down one point
(02:20):
five percent, and that's that's the most discretionary of things,
So it tells you maybe that people were holding back,
but also, do you want to go out when it's
four degrees.
Speaker 2 (02:31):
I Mike, yeah, I mean I don't that sometimes you
have to, but you don't necessarily have to go buy
a new car and look at cars on the lot
when it's you know, four degrees. I think the big
question a lot of people have is we continue to
get more and more data that is kind of pointing
to at least a pullback or maybe a slow down
when it comes to the consumer and your view, how
is the consumer doing? Is the consumer doing much different
(02:54):
than we were doing just six months ago.
Speaker 3 (02:56):
Well, it's pretty obvious that the consumer is not in
a good move. But this is the first hard data
we've had on it, and it does suggest that maybe
people pulled back some, but it's not enough to really
give us a firm feeling on it because of the
strength of the internet purchases during the month. So we've
(03:17):
got to get some more data on that. I can
tell you. The Atlanta Fed updated their GDP NOW numbers
for the first time since that negative two point four
earlier this month. That got everybody all excited, and they
came up with negative two point one.
Speaker 4 (03:34):
Now they admit.
Speaker 3 (03:35):
This is distorted by all the gold shipment into the
United States, and they ran a model on that two
point four number and came up with the fact that
it would be a zero point four percent gain for GDP,
so essentially zero during the month if today was the
end of the quarter. And Chris Low of FHN Financial
(03:59):
ran the same model today and said, what you did
up with is negative one tenth of a percent. So
any way you look at it, the numbers we've had
up to this point are not good. But we've got
another month, two months of data to go.
Speaker 2 (04:16):
Really well, remind everybody what goes in we're gonna talk
about the Federal Minute, but remind everybody that goes into
that GDP now forecast and how it is this sort
of snapshot in time.
Speaker 3 (04:25):
Well, they just incorporate the data as it comes out.
So what we've got is January data, and now we've
got February data up through the retail sales report, but
there's still new home sales, existing home sales, and other
things like that to come yet. So we've got also
(04:46):
the PCE spending numbers, so there's a lot of data
for February still out there, and then we got to
get March data before they can give you a number
that actually will resemble anything like what the GDP number is.
But it doesn't suggest that the first two months of
the quarter have started off well.
Speaker 5 (05:05):
So, Mike, in light of all of that, what are
we going to get from the Fed this week? Is
this going to be another one of those meetings where
Powell says we're still in weight and see mode, we
have to wait for that data to come in.
Speaker 6 (05:19):
Or is there going to be a little bit more action?
Speaker 3 (05:22):
You nailed it, that's what we're going to get. It's
not going to be any action this time in the
sense of guidance on for future rate moves. We will
get a new dot plot, and my guess is it
will still have two dots on there. Two rate moves
this year, simply because they don't have evidence one way
or another to change that. Not enough that the economy
(05:44):
is failing to add, and not enough that inflation's coming
down to subtract. So at this point, status quo is
going to be the word. It'll be interesting to see
what kind of economic projections they make in the Summary
of Economic Projections, because last time was December, and we've
obviously seen a big change in at least consumer attitude
(06:06):
since then, but there doesn't seem to be a collapse
in the labor market. So do they change unemployment, do
they change GDP? And where do they think inflation is?
My guess is this will be a meeting where we
see very little change in almost anything they do, and
they'll just go home and wait for the next one.
Speaker 2 (06:26):
But it does sound like it's the easiest job around.
As the President said when he was running, you know,
you just flip a coin and decide whether to move
rates higher or lower.
Speaker 4 (06:35):
I'm not going to have you weigh in on that, Mic,
but I do want to know.
Speaker 2 (06:37):
I do want to know about what the FED is
dealing with now versus what they dealt with at their
last meeting. Their dual mandate is certainly, you know, maximum
employment and stable prices. Which would you say that they're
more focused on one now than the other.
Speaker 3 (06:52):
They're more focused on inflation, but that's been true for
a couple of meetings because the labor market has been
so stable. They want to make sure that inflation continues
to go down, and we're getting mixed readings on that.
CPI went down, PPI went up a little bit, and
then some of the all of the inputs into PCE
that we have gotten from those two indicators suggests the
(07:14):
PCE is going to go up. So you've got mixed
news on what's happening with inflation. None of it suggesting
that inflation is going one way or the other very quickly,
but it's something they have to keep an eye on,
so they'll operate as if inflation were just sticky, staying
where it was, and that makes for a good reason
to just leave rates unchanged.
Speaker 4 (07:37):
All right.
Speaker 2 (07:38):
Perhaps that's a perfect segue to move on to a
bigger discussion about the fat or Thanks to Michael McKee,
Bloomberg News International Economics and Policy correspondent, Mike, I've got
plenty of time to go to the Jaredelli store and
get you some chocolate on the way back from San Francisco,
so we'll see what you get for Saint Patrick's Day.
Speaker 4 (07:54):
Appreciate you joining us.
Speaker 2 (07:55):
Hey, speaking to the FED drum, Powell does face that
tricky task this week of both the shuring investors and
the economy that remains on solid footing. Will also conveying
policymakers and stand ready to step in if necessary. On that,
Treasury Secretary Scott Besson was asked on Meet the Press
on NBC on Sunday whether he can guarantee the American
people are there that there would be no recession on
(08:18):
President Trump's watch.
Speaker 4 (08:19):
Here's what he had to say.
Speaker 7 (08:21):
You know that there are no guarantees who would have
predicted COVID, right, so I can predict that we are
putting in robust policies that will be durable and could
there be an adjustment because I tell you that this
massive government spending that we'd had, that if that had
kept going, we have to wean our country all of that.
(08:44):
And on the other side, we are going to invigorate
the private sector.
Speaker 2 (08:49):
That was Treasury Secretary Scott Besson on Meet the Press
on Sunday. Liz McCormick is Bloomberg News Chief correspondent for
Global macro Markets, and she and Jenelle Marte write about
Powell's balancing act. She joins us in the Bloomberg A
Business Week A studio. Liz, what is the message that
Powell needs to get across this week?
Speaker 8 (09:06):
Yeah?
Speaker 9 (09:06):
First, can I say I think Mike McKee set me
up for a long Day Wednesday, because every time we
say nothing's going to happen, something happens. But now I
never questioned his judgment, but I think, yeah, from the markets,
I mean, everyone in the markets knows Chairman Pal is
going to be very cautious. He's got a balancing act.
He's not going to say, oh, I'm worried about the
(09:26):
stock market.
Speaker 8 (09:27):
But you know, they want.
Speaker 9 (09:28):
To see if he will because like Mike said, of
course no one expects any rate change, but the consensus
seems to be that they keep that dot plot which
shows two cuts as far as the last quarterly update
in December for this year, that it probably stays the same,
but that people in markets are thinking maybe in the
press or he could give just kind of a stronger
(09:50):
nod to something he's been saying, but just kind of
more forcefully somehow that like, if things worsen, if the
economy starts to show more signs of trouble, we stand
ready to do whatever we need to do, meaning if.
Speaker 8 (10:03):
They have to cut rates a lot, they will.
Speaker 9 (10:06):
Of course he's said that before, but I think some
in markets are saying, you know, with the ten percent
correction and we're bond yield to fallen from their peaks
this year, kind of that fear of recession, and some
like Mike laid out at least the soft data has
been a bit troublesome, especially with the survey data.
Speaker 8 (10:23):
That could Shairman Pal at least.
Speaker 9 (10:24):
Give a little bit more of a nod to, you know,
don't worry, We've got this.
Speaker 8 (10:28):
You know, we'll take care of it if they need to.
Speaker 2 (10:30):
Well, well, Liz, you mentioned what's happening in the bond market,
or what has happened in the bond market, but also
what's happened in the equity market last time I checked.
Taking you know, paying attention to a sell off in
the equity market is not necessarily part of that dual
mandate when it comes to inflation and stable prices. What
is your view on this and to what extent the
Fed actually cares about what happens in the equity market.
Speaker 8 (10:51):
Yeah, absolutely correct.
Speaker 9 (10:53):
It's that it's just financial conditions, you know, And I've seen.
Speaker 8 (10:57):
Some good stories.
Speaker 9 (10:58):
I forget all the writers they're Fromberg who wrote them
about how these financial conditions bleed into they could into
the real economy. When people look at, you know, their
investment assets and they're going down. You could kind of
stomach that for a while, but do you feel like, oh,
I better keep it a little closer to the vest,
you know, let me spend a little less because the
(11:19):
money I had is you know, a fifth of what
it was, you know, or went down by a fifth.
Let's say that maybe people start to spend less or
a little more concerned. Does it kind of bleed into
because one thing about expectations, like the FED taught has
laid out very clearly about like let's talk about inflation
expectations that they feel like expectations can bleed into like, oh,
(11:41):
you think inflation is.
Speaker 8 (11:42):
Going to get worse, so you change your behavior. So
you're right.
Speaker 9 (11:45):
They're not gauging the stock market. That's not part of
their thing. But I think someone is probably gonna ask them,
like markets seem to be pricing more risk of recession?
Is that a concern? But so I think that's why
it has to be like a clever dance around showing
of course we're watching, we're aware, we look.
Speaker 8 (12:03):
At financial conditions.
Speaker 9 (12:05):
But you know, right now our dual midate the inflation
is not where they want it. They do not see
a major problem in the economy the labor market. Like
the Jolts data, the recent jobs data wasn't bad. They
really don't have the data, like Mike was saying, to
really kind of do anything, you know.
Speaker 8 (12:22):
Anna Wong reached out.
Speaker 9 (12:23):
To me on that story to say, hey, listen, Liz,
I don't think the Fed's going to do that, you know,
So I never kind of cross her. So she's saying
she doesn't think Pal's going to sound any different. So
we'll watch Anna, You're probably right, but we'll say, you know.
Speaker 5 (12:36):
Well, Liz, do you think that Powell does have a
more difficult job this week trying to convey that balancing
act just because of.
Speaker 6 (12:43):
What's happened in markets.
Speaker 9 (12:45):
Yeah. I think it's gotten a little bit worse in markets, right,
So he knows because people get concerned, and I think
he always wants to talk to main street, right, you know,
not just he doesn't care about investors and how they're
doing in positions and losses. But it's main street if
they're worried about oh, you know, it's the economy going
to get worse.
Speaker 8 (13:02):
You know.
Speaker 9 (13:03):
We hear of all these job cuts from DOGE and
companies saying they're kind of you know, hiring less and
they start to worry and their spending habits change. So
I think he's always trying to like maybe he'll show
up on sixty minutes one.
Speaker 8 (13:15):
Of these days. It's usually when he's.
Speaker 9 (13:16):
Talking to main Street, but to say, like, you know,
you know, inflation is top of mind. Inflation hurts everyone,
he always says, but that you know, he's aware. And
if it's you know, starts to bleed into the real economy,
there's a lot they can do right now, you know,
just standing pat is the best policy. He doesn't want
to weed into politics, right so he said, you know,
(13:37):
you know, we're looking at these policies.
Speaker 8 (13:38):
They don't know exactly like the market.
Speaker 9 (13:40):
Some of the tariffs have been laid out, others haven't,
so they don't exactly know what you know, how long
the degree.
Speaker 8 (13:46):
And so they're starting to try to model that.
Speaker 9 (13:48):
But you kind of can't until you you know, we
have April second coming with President Trump laying out a
new round.
Speaker 8 (13:54):
So I think, like Neil.
Speaker 9 (13:55):
Judas says, they don't want to be the story this week,
that doesn't want to be the story. So I think
Chairman Powell will have a lot of notes and he's
going to have a lot of scripts that he's.
Speaker 8 (14:04):
Going to try to stick to.
Speaker 9 (14:06):
But yeah, I think it's gotten a little harder since
he talked last. Because you know, you're you're an equity
wizard over me. The market is a little bit worrisome.
Speaker 5 (14:14):
Yeah, we've seen, you know, a significant drop since the
last bed meeting. You know, you mentioned inflation. That's something
that obviously Main Street cares a lot about. But from
your angle, you're watching the bond market. What is the
bond market telling us about expectations for inflation.
Speaker 9 (14:29):
Yeah, so bond market break even inflation levels. If you
look at them, they're not really out of bounds. I
keep looking to at like the Fed likes the long
run ones that smooth things out. If you look at
the so called five year five year forward, it's going
to like five year inflation five years from now. That
is not at a troublesome level, so I think. But
(14:49):
the University of Michigan, which was a survey of course
that was really the long run ones, really really jolted higher.
Speaker 8 (14:55):
They don't like to see that.
Speaker 9 (14:56):
But I don't think the bond market is screaming inflation
concern either, So you know, they do have some room
to wait and we know when if they need to move,
they can go fast.
Speaker 8 (15:07):
Right, So I think he feels like, hey, we can
do this.
Speaker 9 (15:10):
But I don't think the bomb market screaming, especially because
yields are coming down, kind of leaning on the growth concerns.
Speaker 5 (15:16):
All right, well, Liz McCormick, Bloomberg News, Chief correspondent for
Global macro.
Speaker 6 (15:20):
Markets, thank you so much.
Speaker 5 (15:21):
As always, we'll be waiting for that FED meeting coming
up soon.
Speaker 1 (15:25):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five these during Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on.
Speaker 4 (15:37):
YouTube and videos.
Speaker 2 (15:39):
Jensen Wong looks like he's on top of the world.
He's held babies, He's signed countless autographs. He's thrown out
first pitches at MLB games. He's led tech conference crowds
in chance. He's appeared on stage with CEOs from the
likes of Goldman, Sachs, Meta Platform, Salesforce, and more. He's
also chatted privately at the White House with President Donald Trump.
Oh yeah, he's also one of the wealthiest people in
(15:59):
the world. Yet he's well aware that corporate fortunes can change,
and he's watched them do with brutal speed in the
semiconductor industry. Here's a history of booms and bus for
tech infrastructure companies because their products tend to become commoditized,
so right. Joshua Brustine and Ian King for Bloomberg Business Week.
Joshua is a Bloomberg BusinessWeek Technology editor. Indian King is
Bloomberg News at US Semiconductor and networking reporter. Check out
(16:22):
their story on the Bloomberg Terminal and at Bloomberg dot
com slash at BusinessWeek. Joshua joins our program this afternoon
in New York. Ian is here in our San Francisco bureau.
Ian King, I want to start with you. What do
you think keeps Jensen Wong up at night?
Speaker 4 (16:36):
Right now?
Speaker 10 (16:38):
What's always kept him up at night?
Speaker 11 (16:39):
Right?
Speaker 10 (16:39):
I mean? He you know, he tries to run this
company like all of the cliches are worth thirty days
away from going out of business. But that really really
drives him. What everybody thinks is, oh, he's the top
of the world. But you've got to remember this company
spent most of its career, it's thirty years in existence.
Under the shadow of intel, under this permanent threat that
(17:00):
what it does is going to be taken away. And
that's really his mentality. Yes, this is great, this is
the moment, but he's already looking for the next thing.
He's already looking to extend that run. And he's always
already looking at what might go wrong. That's who he
is and that's how he does things.
Speaker 5 (17:16):
Joshua, describe what drives the Nvidia CEO, because you guys
have this great line in the BusinessWeek story. Wong's tendency,
even when he's away from the office and noticeably tipsy,
is to always be closing.
Speaker 6 (17:29):
Talk about that more.
Speaker 11 (17:31):
Yeah, Jensen Wong is always referred to as Jensen is
a real sort of force of nature personality. He's very
intense and he's always sort of evangelizing for right now,
it's for artificial intelligence and the things that you'd really
need a lot of invidio chips for. And so you'll
see him constantly telling you why the future is going
(17:51):
to revolve around these enormous data centers full of invidio chips.
Speaker 5 (17:56):
And Ian talk a little bit more about just the
expansion here. What is the next phase of growth? Ian
for this company.
Speaker 10 (18:07):
Well, the expansion is AI has to be everywhere for
this to work. Right now, you have a very small
group of companies, whether it's Microsoft or a as, that
are buying the majority of the gear, putting the majority
of these capabilities in place. What really needs to happen
is that it has to get out there in the wild.
It has to get out there in the economy. Companies
(18:28):
have to use it, consumers have to use it. It has
to be part of factories, It has to be part
of vehicles, It has to be part of everything to
justify that massive spend that we've seen and to keep
that massive spend going.
Speaker 2 (18:39):
Is it still, though ian about AI inference and training
AI models or is it about something bigger for in
video moving forward? Is it about the driverless cars? Is
it about humanoid robots? Is it about that next gen
thing that Jensen's watching that we don't know about yet.
Speaker 10 (18:56):
Well, you refer to training and inference. Some experts will
tell you that the training, the actual creation of the
core of AI has kind of happened or is close
to being sort of complete. What we need now are
models that are more specific and tightly focused, models that
can drive your car models that can tell you factory
(19:17):
robots where to go and not to bang into each other,
and to do things in the most efficient way. That
what we need, and that is where inference comes in,
because then you have these more specific models that say,
find the way around a factory. They have to know
then and infer in the moment, Hey there's something coming
towards me, I need to stop, or hey there's a
human being there coming around the corner, I need to
(19:37):
not run them over. That's what we'll get into now.
Right now, a lot of AI out in the wild
is kind of the chatbots. It's reacting to a very
limited set of stimulus text or voice. And what we
need is AI to be inferring more meaning from the
world around it, and that's still a work in progress.
Speaker 5 (19:58):
Joshua, what is physical AI and how is Nvidia expanding
into it, because you guys mentioned that a number of
times in your article.
Speaker 11 (20:07):
Sure, physical AI is basically, instead of chatbots, AI that's
operating in the real world. The most obvious example of
it right now is autonomous vehicles, something that in Vidia
has been working on for a decade and has actually
said would be solved many years ago, but it's also
looking at robots, automated factories, basically anything where the AI
(20:30):
is moving something around the world and in video. Is
very bullish on this because it needs as many applications
as possible, and if it can unlock factories and cars
and everything, that's a lot bigger than just doing something
on the internet.
Speaker 2 (20:44):
Joshua, You've been covering technology for years, and I'm just
curious contextually for you to describe this moment to us
as a technology editor. Is this a bigger deal than
the rise of the browser in the nineties, Is it
bigger than the rise of social media in the early
two thousands, Is it on par with the rise of mobile?
Speaker 7 (21:04):
Like?
Speaker 4 (21:04):
Where is this in your view as a tech editor.
Speaker 11 (21:08):
I think what we're looking at right now is that
we've seen the sort of laying the groundwork phase of
the artificial intelligence intelligence era, and now we're waiting to
see that this is going to be the size of
social media, that this is going to be the size
of the browser, that the vision that in Nvidia and
other AI companies have laid out is actually going to
(21:29):
sweep the economy with the force that they say it's
going to, or if it's going to be something more modest,
and as Ian said, considering how valuable in Vidia is,
this can't just be a pretty big deal. It has
to be an enormous deal for Nvidia to justify the
amount of money it's worth.
Speaker 5 (21:45):
Right now, Ian, I imagine that you know, while you
were writing this, the idea of deep Seek and other
competitors came up in your reporting process. Can you talk
a little bit more about just how in Vidia is
reacting to the competition and these companies that are saying
(22:08):
that they can do AI cheaper.
Speaker 10 (22:11):
Yeah, I mean, it's important to note that for the
fundamentals of what's going on, in Video really doesn't have
any competition right now. If you want to train a
large language model, you're going to do it on in
Video's gear. At the same time, the enormous expense of
doing that, and then the expense or the possible expense
of deploying that in the real world has got everybody
(22:31):
thinking is there a better way to do this? Is
there a faster way to do this? And Deep Seek
is arguably the most poignant example so far that raises
the question, perhaps we can do this more cheaply, or
perhaps we can sort of diffuse a little bit of
what we've already done, and you snap that off and
use that in a cheaper way. So there's so much energy,
there's so much at stake here, and I think is
(22:53):
really an example of that. And in Video's reaction was great,
this makes it cheaper. This means it's going to be
everywhere at all, too good for us. And that's a
typical Jensen response. You know, don't deny reality, don't look back,
look forward.
Speaker 4 (23:06):
Yeah, as you right, and as you and Joshua right.
Speaker 2 (23:09):
There's this history of booms and boss for the tech yeah,
infrastructure companies because their products tend to become commoditized in
that's not happening yet within video.
Speaker 10 (23:18):
Yeah, and yet is is a very powerful word in
this sentence. Everybody is reacting like, oh, in videos the
king of the world, and they've been, you know, at
this for years they kind of have. But look at
the numbers, right, only like three years ago, gaming graphics
chips were the biggest part of their revenue. This has
happened really really quickly and very dramatically. There's been a
(23:40):
massive transfer of wealth. The key question is can that
transfer of wealth become self sustaining and that's what they're
working on right This This isn't an Intel that's been
around for decades and in this dominant position. This is
something that's happened really quickly and is a very quickly
evolving situation.
Speaker 5 (23:58):
Joshua and Videous stock is down ten percent year today.
It's obviously up a ton in the last few years.
But what do you think Jensen thinks about the recent
moves in this company or.
Speaker 6 (24:12):
Does he not think about that stock price at all.
Speaker 11 (24:15):
I'm sure he thinks about the stock price, because everyone
in the world seems to think about the video stock price.
You know, there's a lot of headwinds that Jensen Wong
has been well aware of for quite some time, and
they're all coming to a head, you see, with tariffs
and other barriers on international trade, including a US China
trade war that could have national security implications that will
restrict chips specifically. I think the rise of deep Seek,
(24:39):
while he will say that's a great thing, also shows
that maybe some of the assumptions about how many chips
are going to be needed for each subsequent step in
the AI development. You know, maybe those assumptions aren't as
ironclad as they thought, and That is why you see
him sprinting ahead and trying to get to the next phase,
to have these applications start to bear fruit and to
have a new story to tell, to keep to keep
(25:01):
that moving, that momentum moving.
Speaker 10 (25:05):
And to what Josh said there, if Jensen has a genius,
it's it's his ability to never sit still, to always
be absorbing all of the inputs. So you mentioned the
stock price, whatever is bugging investors, he hears it, and
then when you go into the next investor presentation, when
you go into the next earnings, he's already moved beyond it.
(25:25):
In the conversation, he integrates a bit of the concern
such as deepseek, into his presentation, into what he's saying,
into the points he makes over and over again. And
that's true. Whether it's regarding the stock price, so that's true,
whether it's regarding the technology that he's always absorbing that information.
That's where his genius lies. Whether he's ultimately right or not,
whether it plays out like he says it's going to,
(25:47):
that's another thing. But what we wanted to convey in
this story as much as anything else, is the level
of intensity being brought by somebody who isn't doing a
victory lap.
Speaker 2 (25:57):
So Joshua, how does he think it's going to play out?
How does Jensen think this is going to play out?
Speaker 11 (26:02):
He thinks, Hey, it's going to be everywhere He's you know,
he will tell you that the robots are going to
be here. We've been saying that it's going to take
however long, but that this is the year that the
that the car problem is solved, and soon you'll see
so many autonomous cars on the streets that healthcare will
be over overhauled. You know, he's there giving you the
bulls case if you listen, and you know whether he
(26:25):
believes that deep in his soul, like, we don't know,
but he will make the most convincing case possible.
Speaker 2 (26:31):
Ian, I just want to let you wrap it up
on this what we have you changing subjects very briefly.
Speaker 4 (26:37):
Intel has just been on a tear.
Speaker 2 (26:38):
We can't let you go without just giving us thirty
seconds on Intel and it's new CEO.
Speaker 10 (26:43):
Yeah, we have a new CEO. But we don't know
what he's going to do. We don't know whether he's
the breakup guy who's going to preside over the end
of Intels exists or whether he's the guy who's going
to take the existing plan and just make it into
a better plan or better execute it. Until we know that,
we don't know which way they go.
Speaker 2 (27:00):
Well, investors are should be bet big on him, because
the shares of that company have just been on a
tear since that was announced. A really great story, and
really appreciate you both of you joining us. Joshua Brustein
and Ian King writing for Bloomberg A BusinessWeek about Nvidia
and Jensen Wong. Of course, a big event in Nvidia
GtC happening this week in northern California'd be sure to
(27:20):
check out our coverage. You can do that at Bloomberg
dot com and of course on the Bloomberg terminal as well.
Speaker 1 (27:27):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern on Applecarplay and Android
Auto with the Bloomberg Business app. You can also listen
live on Amazon Alexa from our flagship New York station,
Just say Alexa Play Bloomberg eleven thirty.
Speaker 12 (27:45):
Well.
Speaker 2 (27:45):
A cyber attack last week on x of course elon
Musk social media platform. It was reportedly caused by insufficiently
protected servers that were targeted by a distributed denial of
service attack, in other words DDoS attack. Cybersecurity analysts say
the attack was possible because X's origin servers were not
shielded behind tech that blocks do DOOS attacks, making them
(28:06):
vulnerable to attack. Now pro Palestinian activist group called Darkstorm
Team took responsibility responsibility for the attack without providing any evidence.
Bloomberg News wasn't able to independently verify the group's claims,
and representatives from X did not respond to a request
for comment. It does show, though, that even the company
owned by the wealthiest person in the world is vulnerable
(28:29):
in this day and age. For more, we bring in
Wendy Whitmore, senior vice president at Palo Alto Networks, where
she works with businesses to defend them from cyber threats
think ransomware, state sponsored espionage, and more. Wendy joins us
from the Bloomberg at BusinessWeek Studio. Wendy, good to have
you back with us. Give us a big picture here
where you are, where we are versus the bad actors.
(28:51):
Are we still at least one step ahead of them.
Speaker 13 (28:55):
Well, so, I think the story you presented is a
great example of what we're seeing, which at high level
is the increase in speed, scale, and sophistication from attackers worldwide.
There's nation state activity which we've continued to see a
massive increase in. And then on the cyber criminal side,
what we're seeing is largely what you mentioned, so focus
(29:16):
on disruption, right, attackers intentionally wanting to disrupt business operations,
to do it in a way that's very visible that
you know causes disruption to an end consumer. And oftentimes
they want to do this because they have a higher
likelihood of commanding some sort of payment in return. Clearly
wasn't happened in your story last week, but that certainly
(29:37):
is often the intent and very consistent with what we're seeing.
Speaker 11 (29:41):
Wen.
Speaker 5 (29:41):
Do you work specifically with businesses to defend them against
these cyber threats? What do the cyber attackers really want.
Speaker 6 (29:50):
Out of businesses? Do you see a pattern.
Speaker 5 (29:52):
In terms of, like, I guess, the biggest trend in
terms of these what these hackers actually want.
Speaker 13 (29:58):
The biggest trend is unfortunately still that focus on commanding
a return of payment. So oftentimes, you know, if it's
a cyber criminal, they're looking to how can I generate
the light the highest payment in return for the attack
that I've provoked. So they're going to take every avenue
to do that, whether it's extorting the company, it's causing
reputational damage, causing actual operational disruptions. We've seen that in
(30:21):
the hospitality industry and healthcare, in technology as well, and
now you just saw that, you know, in social media
companies last week.
Speaker 4 (30:29):
When they hew vulnerable.
Speaker 2 (30:30):
You know, we often talk about companies in the context
of being vulnerable to hackers or toward malicious actors. How
vulnerable though, is the US government in your view?
Speaker 13 (30:42):
Well, you know, I think you're hitting on a fundamental
premise here, which is cybersecurity really is national security today.
So I think as a country, we're certainly well positioned.
We've got a lot of money in proactive defense and
certainly in the ability to detect quickly when something is amiss.
We're seeing more and more organizations, certainly including the federal government,
(31:04):
move towards more proactive investment in security. So looking to
invest on the front end, whether than waiting until something
occurs on the back end, and really having that visibility
to one central location is critical to be able to
make decisions quickly, analyze what's going on and then get answers.
Speaker 5 (31:22):
What does investment in cybersecurity look like from a business angle?
Is it companies training employees about safe digital practices or
are there actual pieces of infrastructure and.
Speaker 6 (31:35):
Software that these companies are investing in.
Speaker 13 (31:37):
Yeah, it really is both, right. So one of the
areas we specialize in at Palaoto Networks is just the
ability to have a platform that enables that central visibility.
So that's investment in technology where you can get answers
and cloud endpoint and the network. But the employment, the
training employees piece is so critical because all of these
attacks are successful because employees are successfully you know, taken
(32:02):
advantage of. So either their credentials are stolen, maybe it's
a help desk that's targeted. With the onset of AI. Now,
with generative AI in particular, that human piece has become
so real and so tangible, and the barriers that used
to exist, like challenges in language for example, that doesn't
exist now because these attackers are able to use jen
AI to facilitate and automate so many of those attacks
(32:23):
and do them in a realistic way.
Speaker 2 (32:26):
Okay, So that's what really concerns me, and we've all
seen the stories of people being misrepresented, or you know,
you have a family member that's called and they say
they're being told that one of their loved ones is
in jail and needs money or something like that. For years,
it was pretty easy to identify that that wasn't real.
Speaker 4 (32:46):
But I think those days are behind us.
Speaker 13 (32:49):
Agreed, It's very concerning. So from a business standpoint, the
reality is we have to fight AI with AI. So
while attackers have leveraged AI to accelerate their tax, to
automate them to make them faster at scale, the also
the reality as businesses have invested in AI, and if
you haven't, then you need to in the lens that
(33:10):
you have to automate your defenses. You've got to be
able to detect very quickly and rapidly so that you
can make decisions to contain the spread of an attack
in your environment.
Speaker 4 (33:19):
Well, okay, so how does that? How does that work?
Speaker 12 (33:21):
Though?
Speaker 2 (33:22):
If you're an individual and you're not a business, how
does that work? If you know, how can my parents
protect themselves or somebody's relatives, or how can we protect ourselves?
Speaker 13 (33:32):
I have those same concerns. Right, My parents are certainly aging,
and that's it They're a target demographic for fraudsters, for
criminals who are looking to take advantage of citizens. So
I think the more awareness we can have, the better
in terms of making sure that people are aware that there,
you know, is this threat and a potential risk with AI.
(33:53):
They need to validate sources if something seems too good
to be true, or if you are you receive a
phone call for sample or an email and there's a
sense of urgency like, hey, this has to happen immediately,
I need an account information. Now I need you to
make a phone call. Those should all be red flags
and triggers at the consumer level.
Speaker 6 (34:11):
We don't have a ton of time left.
Speaker 5 (34:12):
But I'm wondering just how optimistic you are that just
as these attackers get more advanced in using AI to
commit cyber attacks, companies can leverage AI to respond.
Speaker 13 (34:28):
I love that we're potentially ending on a more optimistic note.
I'm highly bullish as it relates to AI.
Speaker 8 (34:34):
I see the.
Speaker 13 (34:34):
Investments we're making, not only in the research to understand
how attackers are using AI, but the investments in accelerating
our workflows, our processes, having copilots for tasks, tasks that
used to take days now take minutes and in sometimes seconds.
So the reality is we can leverage our really smart
people towards even more challenging tasks. And that's really exciting
(34:56):
and motivating, and I think it's going to be a
key to success moving forward.
Speaker 2 (35:01):
Hey, Wendy, thirty seconds before you let you go. Given
the growth of AI and the way that companies are
spending around AI, do you think companies are still spending
sufficiently when it comes to protecting themselves.
Speaker 13 (35:12):
You know, what we're seeing is companies spending more of
their budget on proactive security than on reactive security. And
I think that's great news and it's going to continue
to ship the ball forward in terms of making it
harder for the attackers to be successful and encouraging that
the organizations who are providing defense are going to win.
Speaker 2 (35:31):
Wendy went More, Senior vice president at Palo Alto Networks,
Joining us from our Bloomberg BusinessWeek studio in New York.
Speaker 1 (35:38):
You're listening to the Bloomberg Business Week Podcast. Catch us
live weekday afternoons from two to five these during listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (35:51):
The by American movement has been periodically invoked since the
Boston Tea Party. The goal has been promoting economic nationalism
strengthening the US economy. Yeah, despite its compelling logic, there
is little evidence that buy American campaigns actually work in
reversing consumption trends or preserving manufacturing jobs, and their success
is often tied to broader economic conditions.
Speaker 4 (36:14):
Amanda Mole is a senior reporter.
Speaker 2 (36:15):
For Bloomberg Business Seek, and she writes about why Trump's
Buy American campaign will not improve the US economy. She
joins us in the Bloomberg BusinessWeek Studio. Check out her
story and more on the Bloomberg terminal at Bloomberg dot
com slash BusinessWeek. Amanda, why doesn't this tend to work?
Speaker 3 (36:33):
Well?
Speaker 14 (36:33):
It depends on what you mean by work. Buy American
campaigns are you know, sort of on their face, designed
to increase consumption of American made products. Often that doesn't
work because they do not meaningfully change the number of
American made products available. So people generally buy what is
(36:55):
you know, in front of them, what is easy to get,
what is financially feasible for them to buy? And buy
American campaigns aren't really designed to change that in any
meaningful way, even over a long period of time. But
I would argue, and I argue in the piece, that
they're not really meant to do that, even though that's
how they are presented to the public. They work quite
(37:15):
well at stoking xenophobic sentiment, stoking anti immigrant sentiment, and
aligning workers with the interest of their bosses, which I
think historically that is what they're designed to do, and
in that way they do work.
Speaker 5 (37:32):
Talk a little bit more about how these buy America
campaigns impact the job market specifically, and what the data
is showing us about whether these campaigns in history have
actually brought jobs on shore.
Speaker 14 (37:46):
Historically, they don't move the job market that much industry
by industry. Sometimes they can tweak short term circumstances a
little bit, but what really matters is how much investment
public investment there is in particular industries. Tariffs, if they're
like really well designed to target particular industries, and if
(38:08):
they're combined with broad scale investment in those industries to
build them at home. All of that sometimes gets like
bundled up with a buy American movement, and all of
that together can like impact the future of a particular industry,
but just telling people to buy American in general doesn't
really have any mechanism by which it would increase employment.
Speaker 2 (38:32):
But Amanda, if the way that the Trump administration is
thinking about this is a bit different than in the past,
like let's say it's I don't know, instead of encouraging
people to buy American, they're making it so it's really
difficult not to buy American. So that product that is
in front of you is less is actually the least
(38:54):
expensive one because there is not a cheap import available.
Speaker 4 (38:58):
Does it work then?
Speaker 14 (39:01):
I think that we're sort of about to see if
it works then. But there's reason to believe that even
under these circumstances, even when the alternatives are really onerous,
it wouldn't work in a lot of situations, because what
does it mean to buy American in an economy where
the supply chains are globalized, Different components come in from
(39:23):
all kinds of different places, and then are you know,
in the end assembled in America. A lot of things
that are labeled as American goods contain foreign components or
need raw materials from overseas that are then going to
also be more expensive. And then there's just a lot
of things that Americans want to buy that are not
produced in any meaningful quantity in the United States, and
(39:45):
there's really no way for them to be produced in
the US, like take coffee, avocados, Like you can't satisfy
American current American demand for these things with the American
capacity to produce them ourselves. So you have this this
situation where buying American has become sort of like a
(40:07):
meaningless slogan because like what is an American product? I
get into it in the story a little bit, but
it's really hard to say, like what that even is.
Speaker 5 (40:16):
Yeah, this is a really detailed story, and I love
that it starts with some American history and an homage
back to the Boston Tea Party, which I didn't realize
that you could trace the roots of that campaign all
the way back to the beginning of the country. Maybe
we could just end on where you see at least
trumps buy America campaign going, and how we'll judge the
(40:39):
efficacy of it, you know.
Speaker 6 (40:41):
Within four years from now.
Speaker 14 (40:42):
You know, it sort of depends where tariffs go because
something that we see historically over the course of you know,
a number of sort of like large buy American campaigns.
What the you know, the volume of imports and the
tendency to buy American goods really depends on is the
overall economic situation. So if if we end up in
(41:05):
a recession, it is likely that fewer imported goods are
going to come into the country. But historically, once that
recession ends, the trend fine on imported goods returns directly
to whatever it would have been before the recession happens.
So without like a like a robust plan for public
investment in particular industries in the US, without more there there,
(41:30):
I really don't see how this is going to make
any positive long term changes in US manufacturing.
Speaker 4 (41:36):
Amand them all.
Speaker 2 (41:37):
Bloomberg Business Week senior reporter joining us back there in
the Bloomberg Business Week Studio. Check out her, his story
and more at a Bloomberg dot com slash business Week
and also, of course, on the Bloomberg terminal.
Speaker 1 (41:48):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five e's during listen
on Applecarplay and Android Otto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (42:02):
Well, the backlash against DEI has been Swift Coles just
the latest retailer to back away from using DEI language
amid criticism of the policies from the Trump administration.
Speaker 4 (42:12):
Under pressure, many companies across.
Speaker 2 (42:13):
Sectors, including Victoria's Secret Target metaplatforms in Walmart, have been
pulling back from DEI, some dropping diversity related hiring and
promotion goals. Really curious what Jensen Harris has to say
about all this. He's the co founder and CEO of Texteo.
The company makes software that removes bias from workplace communications,
so think performance reviews, job descriptions, and more. Texto says
(42:34):
that a quarter of the companies in the Fortune five
hundred have used Texio. Full disclosure. Bloomberg is a customer
of Textios. Bloomberg managers and other company leaders use the
company software to ensure their job descriptions, performance reviews, and
manager feedback are written in a way that's clear, fair
and equitable. Also, Bloomberg Beta, the early stage VC company
backed by Bloomberg LP, the parent company at Bloomberg Media,
(42:55):
is an investor in Texteo. Jensen joins us from Las
Veigs I guess Jetson, Good to see you. Have you
noticed companies embracing your software differently. Just in the last
few months have as we've seen such a backlash to DEI.
Speaker 12 (43:11):
Well, I think an important thing to realize is that
most companies aren't actually stepping back from the principles of
diversity of fairness in hiring and in how they treat
their employees. Even after these executive orders that came out
a few weeks ago, eighty percent of American companies have
(43:32):
said they're staying the course or they're actually investing more
in ensuring that they're hiring the best folks for their
companies and giving them the tools to get fair feedback,
for instance, that helps them grow and thrive. And so
I actually think that almost every CEO understands that at
(43:54):
the center of their business being successful are the people
that they've hired and the people that they need to
grow and promote to do great work. And so I
don't think there's actually much controversy about when you want
to hire the best people, you need to cast the
widest net. I don't think that there's actually much controversy
about you should treat your employees fairly and ensure that
(44:17):
all of them have an opportunity to get the feedback
they need to do a great job, and so I
think kind of this is a bit of a tailwind
actually for folks who actually want to invest in the
people out of their companies.
Speaker 5 (44:35):
So talk about how Texteo has evolved. Because you launched
the company in twenty fourteen. Obviously tech and AI has
grown so much since then, and DEI has become much
more of a hot button issue. What are the biggest
changes that you've seen for Textio over the last few years.
Speaker 12 (45:00):
Yeah, So we were first to market as an artificial
intelligence company to HR. We've been doing AI in the
HR space for more than a decade now, and so
the last decade has really been for us taking our
core technology, which is about helping optimize talent. And we've
(45:23):
started with hiring a decade ago, ensuring that people could
build recruiting content, job postings and brand language that can
attract the widest set of qualified candidates to roles. Really
about hyper optimizing that content to perform well. And over
the last decade we've just continued to get further and
(45:46):
further into other important aspects of running a company. So
we have done performance feedback optimization, ensuring that I mean,
managers hate writing performance reviews, and we built software that
gives them the ability to write really effective performance reviews.
(46:09):
In halftime, we have done pure feedback. We're actually tomorrow
introducing interview feedback, which is a new product that ensures
and I think especially important in this world in which
everyone is thinking about meritocracy and how can we ensure
that we hire the best. The way you do that
is by interviewing folks, And tomorrow we're announcing a product
(46:31):
that actually optimizes interview feedback to ensure that it's clear
that it's fair, that it's based on merit and to
help companies know that they're hiring the best folks for
the role. So that's really been the last decade for us.
Then about broadening the application of our world class AI
technology in a proprietary way to really transform all of hr.
Speaker 2 (46:57):
Hey Jensen, you said you were first to market with
this type of AI. How do you train the AI?
What is the II powered by? You know, we talk
about AI now in the context of a lot of
the lms that are powering what's happening in other services
and other platforms like you know, anthropics, cloud or open
aies chat, GPT.
Speaker 4 (47:16):
What power is your AI.
Speaker 12 (47:21):
Yeah, that's a great question. You know, we were one
of the first companies that brought generative to business back
in twenty nineteen, so more than five years ago, and
so the idea of how do you train AI to
be safe to use and effective is a really important
one and one that we've been thinking about for a
(47:41):
long time. So Textdeo's data is really based on a
whole bunch of different signals in the world. Some of
it is trained from sort of our signals of what's happening,
you know, for instance, in recruiting across hundreds of millions
of job posts in the world and seeing what goes up,
what goes down, how fast is a job filling, how
(48:04):
did different companies sound online, And we can take all
of those signals along with sort of our proprietary knowledge
of what actually is filling, what jobs are filling, what
industries are filling, what language works well in different locales
around the world, like I would talk to someone looking
for a job from New York differently than I would
London or San Francisco, for instance, And.
Speaker 7 (48:26):
We take.
Speaker 12 (48:30):
Which ends up being hundreds and hundreds of millions of
data points and use that to create refine the models,
and then humans are actually responsible for ensuring that those
models can be trusted, that they're safe, and most importantly,
that they actually work, that they actually create the optimizations
that the models predict they will. Now we have a
(48:53):
real advantage compared to a company like open ai, for instance,
which is we build models just for HR. We are not,
you know, writing a letter to Santa. We're not writing
your one hot chicken recipe. We don't care about any
of that general purpose stuff. We optimize in a hyper
way for HR scenarios and HR optimization, and so in
(49:16):
a sense we have a real leg up on everyone
else in this space.
Speaker 5 (49:21):
We talk a lot on this show about supply chains
and chip designers, and I'm wondering, as a company that
uses AI, has it gotten cheaper? Has it gotten easier
to leverage AI?
Speaker 4 (49:38):
Just in the last year or so, Certainly.
Speaker 12 (49:43):
The pace at which optimizations are happening and the pace
at which compute is becoming more and more easy to
access in a cost effective way, it has leveled the
playing field a little bit. That said, it's still pretty expensive,
and a lot of companies that over the last year
(50:04):
or two have decided to try to layer on artificial
intelligence on top of their legacy systems have found that
it's an expensive proposition, and so I think that's a
place where companies that really can embrace doing domain specific
models for HR but or for finance for sales are
(50:25):
going to find that they have a much easier job
because the models are right size for the tasks versus again,
an open AI general purpose model where you're paying for
a lot of compute in some cases in order to
get a relatively small amount of value.
Speaker 2 (50:43):
Back when you left Microsoft more than ten years ago
to launch Texto, and Emily kind of alluded to this
with the evolution of the company, what did you envision
texto would do versus what it's doing now.
Speaker 12 (50:59):
So we started Texteo with a really clear vision that
the world of HR was being behind and that we
could take the technology that we had to turn these
incredibly important aspects of business, right, I mean, think about it,
(51:20):
there's probably nothing more important for most businesses than who
you hire. Are those people great? Are you getting access
to the best talent? And then how do you help
those people grow? How do they give them the food,
the water, the help, the you know, everything we think
about you a greenhouse. All the people at your company,
(51:41):
how do you give them all everything they need to thrive?
And that is clear feedback, that's fair feedback. That's ensuring
that they can tell their manager what's working, what's not working.
It ensures that you get visibility across your entire workforce
about who actually should be promoted and maybe who needs
to let go because they're not a match. And so
(52:04):
we knew that this was incredibly fundamental, and the tools
that HR teams were using were locked in the past,
locked in the general electric and IBM models of the
nineteen fifties of how to do those things. And so
we thought that we could, with a dual strength in
AI and user interface, create next generation tools that would
(52:27):
be phenomenally easy to use, but also transformative in terms
of actually helping managers, for instance, not hate doing performance reviews,
helping recruiters were stretched to the hilt with how many
roles they have to fill now being cavisuals to automate
that make it easier and to outcase their competitors and
(52:52):
competing for talent.
Speaker 2 (52:54):
Jensen Good have to leave it there. Do appreciate you
joining us this afternoon. Jensen Harris is the co founder
and CEO of Text You.
Speaker 4 (53:02):
Rob macle I'll beout you let me drive. Oh no, no, no, no,
this is not a toy, honey. Please, I'll revels. Excuse me,
I want to drive.
Speaker 15 (53:13):
It's a good question.
Speaker 4 (53:20):
This is the drive to the clothes plunks for music.
Speaker 15 (53:24):
Well, briar Jela.
Speaker 4 (53:25):
Don on Bloomberg Radio.
Speaker 2 (53:28):
Well, we did just hear it from Charlie Pellett just
about ten minutes fifteen minutes ago in the close of
trading here, and we're seeing the S and P five
hundred off. It's best levels of the day, but still
up one percent. Well, the Dow out performing up one
point one percent, the NASDAK composite higher by just about
seven tenths of one percent. Let's see what George Young
has to say about this. He's a partner and portfolio
(53:49):
manager at Villary Funds. He joins us from New Orleans.
He manages the Villary balance to funds. V I l
X is the ticker year to date, it's in the
forty eighth percent, down just about one tenth of one percent.
Speaker 4 (54:03):
George, how are you good? To see you right doing?
Speaker 12 (54:06):
All right?
Speaker 4 (54:07):
Hey, we're trying to.
Speaker 2 (54:08):
Figure out the actual effect on markets that this president
is having right now, because he's getting a lot of
attention for the selloff that we saw in the last
few weeks. Do you think the sell off is a
result of uncertainty around tariffs and Trump's policies.
Speaker 15 (54:24):
I do.
Speaker 16 (54:25):
The market really does not like uncertainty, and you've had
all sorts of different uncertainties. It's a lack of predictability
and that makes our job tough. That makes regular investors
job tough. So you want to know about intert rates,
You want to the economy, Well, that's going to be
directly affected by tariffs, and that is going to get
passed on at the consumer. How the consumer reacts as
the big question.
Speaker 5 (54:47):
So obviously a lot of the downturn in stocks as
of late, I guess has to do with all of
that uncertainty on the horizon. When do you think the
market downturn end? I mean, we are up today, but
when you look at the SMP year to date, we're
down about three percent.
Speaker 15 (55:05):
Yep, that's correct. Well, a couple of comments to that.
Speaker 16 (55:08):
The SMP is down three percent, but if you take
out the magnificent seven, the SMB is actually up. So
that's one of the things I think that we're focused
on is you don't want to fall in love with
the stock.
Speaker 15 (55:19):
It won't love you back.
Speaker 16 (55:20):
So the Magnificent Seven have been darlings for the past year,
the past couple of years. So we try to look
for things that are undiscovered, that are unrecognized, that have value,
and it can offer the dividend return, can offer growth,
and specifically you want to look long term. So I
can't give you a data to stay exactly when the
market's going to turn this way or that way. But
(55:40):
what I can tell you if you look at history,
is that the stock market has outperformed the bond mark,
and the US stock market in particularly we're domestically oriented,
has outperformed what other indexes in the world have done.
So we remain optimistic and we try to look past
the vagaries the whip saw, and that can be problematical
for investors.
Speaker 2 (56:00):
Well, Georgie, you sent along some stock picks. I want
to go through a couple of them. I want to
start with Lineage, the global temperature controlled warehouse that that's
comprised of cold storage warehouses.
Speaker 4 (56:10):
You're bullish on this company, it's a reed. Why do
you love it?
Speaker 16 (56:14):
Well, we love it for a couple of reason. You
get growth and you can also get the income, so
it's set up like a ree as you said. But
what's interesting, they're the largest in the world that when
public a couple of years ago, the founders still own
about thirty percent of the company, so they put their
money where their mouth is. They did go public for
liquidity purposes, but at the same time they believed in
this company long term. So the important thing is they've
(56:34):
got over four hundred centers around the world. They're the
largest in the world. They've got ninety six different patents,
and all the food that we not all the food,
the vast majority of the food that we consume is
shipped and stored in climate controlled warehouses.
Speaker 15 (56:49):
So it's important that you.
Speaker 16 (56:50):
Understand that they're the most efficient they have. We just
toured a facility about a month ago that's local here
in New Orleans. They're the most up to date. It's
not the old day where you had palettes who were
being run around left and right.
Speaker 15 (57:03):
This is automated, this is mechanical. This is very efficient stuff.
Speaker 6 (57:08):
Okay, that's food warehouses.
Speaker 5 (57:09):
Tell us about copper because one of your other picks
is Report macmarin sure.
Speaker 16 (57:15):
So if you contrast that with something like oil that
has anywhere from a ten to a thirty year useful
life in most drilling prospects, this has a ninety year
life and there's no substitute for copper. Again, look at
something another commodity like oil, there are arguably other substitutes,
alternative energies, etc. When it comes to copper, that's all
you can use, and they are in very difficult places.
(57:38):
Freeport Copper owns one of the largest in the world
of Grassburg mine in Indonesia. Copper is dependent on demand,
and that is somewhat dependent on Chinese demand specifically.
Speaker 15 (57:50):
But if you look at every electric vehicle, everything you.
Speaker 16 (57:52):
Own, energy is electricity is clean energy, and you need
copper to make that work.
Speaker 15 (57:57):
We love for report.
Speaker 2 (58:00):
Hey George, before we let you go, Atlas Energy as
a number another one of your picks. They under sand
in the Premium Basin in Texas. What's your view on Alice.
Speaker 16 (58:09):
Well, it's interesting they have the sand and they also
have something called Dune Express, which is a forty two
mile conveyor belt throughout West I just.
Speaker 2 (58:17):
Heard about this conveyor belt in a podcast that I
was listening to over the weekend. This is what is
it the largest conveyor belt in the country.
Speaker 15 (58:25):
Exactly, you're telling my story for me.
Speaker 12 (58:26):
This is great.
Speaker 15 (58:28):
So they've got a wonderful yield of about five percent.
Speaker 16 (58:31):
They've been a little rocky recently because it made what
we think is a great acquisition to provide energy electricity
to these wells being difficult location. So again it's sort
of like the Freeport story, where is the copper difficult
places West Texas, difficult to get energy out there. But
more importantly, sand has been shipped by trucks heretofore, which
is slow, expensive and very dangerous.
Speaker 15 (58:52):
So this Dune Express is going to save money, It's
going to save lives. It's great, great change.
Speaker 2 (58:58):
I feel like I got to do a remote broadcast
from this conveyor belt just to see it, or maybe
go for a ride on this conveyor belt. George, really
appreciate you joining us. Thanks so much for taking the
time this afternoon. George Young's portfolio manager at Villary Funds.
He joins us from New Orleans.
Speaker 1 (59:13):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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