June 10, 2025 • 39 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
The US and Mexico are closing in on a deal that would remove President Donald Trump’s 50% tariffs on steel imports up to a certain volume, according to people familiar with the matter, a revamp of a similar deal between the trade partners during his first term.
Trump hasn’t been directly involved in the negotiations and would need to sign off on any deal. The talks are being led by Commerce Secretary Howard Lutnick, according to the people, who asked not to be identified as the discussions are private.
The people said the agreement hasn’t been finalized. Under its current terms, it would allow US buyers to import Mexican steel duty-free as long as they kept total shipments below a level based on historical trade volumes, according to the people. The new cap would be higher than what was allowed under a similar deal during Trump’s first term, they said, which was never a fixed figure but designed to “prevent surges.”
The White House didn’t immediately respond to a request for comment. Mexican President Claudia Sheinbaum’s office also didn’t respond to a request for comment.
Today's show features:
- Bloomberg News Economic Statecraft Reporter Joe Deaux
- Bloomberg News National Team Managing Editor Sarah McGregor on rising social unrest in Los Angeles
- Jeetu Patel, President and Chief Product Officer at Cisco
- Fran Katsoudas, Executive Vice President and Chief People, Policy & Purpose Officer at Cisco
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insight on the people, companies, and trends
shaping today's complex economy, plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Steneveek. On Bloomberg Radio.
Speaker 2 (00:32):
We are hearing from Treasury Secretary Scott Bess and he
spoke to reporters but didn't say much. He said that
Greer and Lutnik will continue as needed. That's jameson Greer
the USTR, and Howard Lutnik, of course, the Commerce Secretary.
This in regard to the negotiations between.
Speaker 3 (00:49):
The US and China, we know it's not easy and
we know these negotiations, as we said, especially when it
comes to US China, the two biggest economies in the world,
complicated relationship and so there's a lot to be still
done in to be known.
Speaker 4 (01:00):
So we're going to watch for some headlines.
Speaker 3 (01:02):
In the meantime, We've also been focusing on another trade relationship,
and that has to do with US and Mexico.
Speaker 4 (01:07):
We did moments ago get headlines. The US and Mexico
are close.
Speaker 3 (01:11):
To a deal that would remove President Trump's fifty percent
tariffs on steel imports up to a certain volume. That's
similar to a deal during the president's first term. So
kind of sounds like going full circle there. So let's
see what our own Joe. Doe has to say about this.
Understands the steel industry like no other. He is Bloomberg
News Economic state Craft reporter. He is in Washington, Joe,
(01:32):
so good to be checking in with you. I don't know, Tim,
and I've been talking about a lot of context. Yeah
here with the Cisco team, especially those who've been around
for a long time, give us some context on this
deal against you know, what we have seen in the
first Trump administration and common and what we've seen between
this relationship generally when it comes to steal.
Speaker 5 (01:53):
Yeah, it's a great question. I think the context is
what we're getting here is very similar to something we
saw in the first term. During the first term, there
were twenty five percent terraffs on steel imports coming from
everywhere in the world, but Mexico and Canada in particular
were upset by this because they were the close trading partners.
(02:14):
And you might remember in twenty nineteen they were trying
to create a new NATA, and as a part of
getting the new NAFTA agreed, the United States agreed with
Mexico that they would lift the twenty five percent tariffs
in exchange for an agreement that Mexico would stop imports
of exceeding a certain level, like a historical level. Well,
that's what we're seeing again here. They're getting close to
(02:36):
finalizing terms between Mexico and the United States right now
to lift that fifty percent tariff in exchange for Mexico
agreeing that they want import more than a certain level.
One of the things we're hearing though, is that that
level that they're not supposed to exceed is actually going
to be higher than what the twenty nineteen number was.
So that's a real key point here.
Speaker 2 (02:58):
Is what is the US? Do we know what the
US is doing in response for how the US is
getting Mexico to agree to a deal such as this.
Speaker 5 (03:07):
I mean, one of the things that they're putting out
there is just listen, Okay, we're going to take this off,
but we're going to have you agree essentially to a quota, right,
and that essentially puts the level of immacrats that can
come into the United States, and I think that's really
the trade off here. So yes, we'll lift the tariff,
but hey, you can't go above historical numbers that we've
(03:28):
been seeing out of Mexico into the United States over
a certain period.
Speaker 2 (03:32):
We saw investor response to this, Joe. In late trading
after your report in Cleveland, Cliffs dropped more than seven percent,
New Core fell more than four percent. US steel stocks
overall decline. The PESO trimmed losses after you and the
team were the first report on the advanced deal talks.
What are the implications for American steel companies.
Speaker 5 (03:52):
Yeah, I think the American steel companies wouldn't be too
happy about this one. I mean, obviously lifting of the
tariff is one thing, but increasing that import level that
that's so called quota, if you will, it's not actually
a quota, it's just an agreed upon level that I
think is going to be something that's very striking to
executives across the various steelmaker companies right now, because if
(04:16):
you are expecting at some point maybe the terriff will
be lifted, you might have been expecting that the quota,
the threshold would still be at that twenty nineteen level.
That's something you've seen over the past six years. So
that idea that that might come up, I think that's
a bit of what we're seeing in the reaction of
Cleveland Cliffs and New Cole Corporation and after hours trading today.
Speaker 4 (04:36):
All Right, so I feel like my head is spinning
with Fels. Well, this is why we lean on you,
So step forward. This is good.
Speaker 3 (04:45):
Like, I don't know what's I mean, it's obviously not
for some of the US steel players as we're seeing
their share price go lower. But I'm trying to kind
of I don't know. Resolution is always good, but it
depends on what they what you.
Speaker 4 (04:56):
Listen, here's how you know.
Speaker 5 (04:58):
So here's how it Yeah, here's how i'd break it down,
seemingly in that positive for Mexico. And listen, Howard Lutnik,
who is leading the negotiations on this deal, could end
up having a deal that he can take back to
the President of the United States, Right, I mean, one
of the things is the President wants deals, and this
(05:18):
is one he'd be able to take back to him. Sure,
maybe the steelmakers won't be too happy about this, But
there's another way of looking at it. Listen, Mexico hasn't
had Terris for a number of years. They got slapped
back on when the President said he'd be putting Teris
back on Canada in Mexico back in February. So in
a way, we're kind of reverting back to the way
(05:38):
things have gone basically for the past four to six years.
Speaker 4 (05:43):
Do we call that a one to eighty? Do we
call that at three sixty? What do we call that?
Speaker 5 (05:49):
I think people in the market who actually trade these
things would say, oh cool, So we're going back to
the status quo. But again, we have to wait and see.
The terms are still being finalized. I think that is
a very important to be sure. But President of the
United States has not been negotiating this directly, and he
is ultimately the last person who has to sign off
on it, so we do have to wait and see.
Speaker 2 (06:10):
Jode Bloomberg News Economic Statecraft reporter joining US from Washington
once again. Joe and Eric Barden were first to report
on the advanced deal talks, as US and Mexico are
nearing a deal to cut steel duties and cap imports.
We did see US steel stocks decline and the Pesto
trim losses. After Joe and Eric's reporting.
Speaker 6 (06:32):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
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Speaker 2 (06:50):
Happening just north of us in Los Angeles, the Trump
administration escalated its response to anti deportation protests in La Marines,
deployed by President Trump right in the Los Angeles area
with orders to protect federal property and officers as the
city is gripped by tensions over anti deportation protests. With
an update, we go back to Los Angeles, where we
(07:10):
find Sarah McGregor, National Team Managing editor for Bloomberg new
She joins us from our Los Angeles bureau. Sarah, we
spoke to you yesterday, and I think a lot of
our listeners and viewers heard that conversation, and I guess
I want to start with an update on Obviously, we
know what the Trump administration has done with what's happening
on the ground when it comes to law enforcement, but
what about what's happening on the ground when it comes
(07:32):
to demonstrations, When it comes to protests, what is the
status of those right now.
Speaker 7 (07:36):
So we did see some violin, some sort of flare ups,
I guess around the city overnight and including actually in
other cities across the US. But you know, again, we
woke up in the morning and the protesters or vandals
had sort of dissipated. We did hear a figure that
over ninety people have been arrested overnight, so there was
some police action on that front, but again, the city
(07:57):
is sort of calm as we wake up in the morning,
and it's definitely a contrast as we hear that the
Marines have arrived. We don't know exactly where they're stationed yet.
According to Karen Bass, the mayor, she also doesn't know.
She's not in touch with the Trump administration, nor is
the LAPD chief about where those Marines will be deployed.
But you know, it's a bit of a split screen
(08:17):
that we're still seeing in terms of, you know, the
calm on the streets relative this morning compared to sort
of the heavy hand of the law that's come down
from the Trump administration with the Marines and the California
National Guard on the streets.
Speaker 3 (08:28):
So well said, Sara's listening to some of your coverage
earlier today, and you said, you know, in terms of
the Bloomberg audience audience, excuse me office in Los Angeles,
it's not like there's anything happening necessarily around you, right,
I mean, you would think if you hadn't read the news,
watched the news, you'd think it was a normal day.
Speaker 7 (08:46):
Absolutely sort of across the city. I think, you know,
there are large areas where this is not affecting people.
But of course we are still hearing reports. Just now,
I was reading about one on social media that said
at a food processing center in the in the state,
there's apparently a raid going on. We've heard that at
least twenty people who wash cars have been arrested. So
(09:07):
there's these raids going on that we're not getting that
much information about about who's being targeted, how many people
are being detained by ice. And again, these were the
raids that happened on Friday that really sparked these protests
to begin with. So it just feels like a very
tenuous situation right now where these you know, these raids
are ongoing. We do have troops on the on the ground,
and you know, we heard from Karen Bass that she
(09:29):
is not coordinating with the Trump administration. So how much
you know information is flowing between local law enforcement and
you know, the federal officials, and hopefully there isn't a
breakdown of communication there that you know leads to a
sticky situation.
Speaker 4 (09:40):
Either.
Speaker 2 (09:42):
A lot of our conversation yesterday focused on Governor Gavin
Newsom of the state of California and his relationship will
lack there of with the Trump administration. You mentioned, we
don't know the coordination that's happening between the mayor of
Los Angeles and the Trump administration. What's the latest when
it comes to Governor Newsom and the Trump administration.
Speaker 7 (09:59):
We did see a bizarre sort of exchange today where
Trump tild reporters in the Old Office that he had
spoken to Newsom yesterday, and within minutes, Newsom had tweeted
that he hadn't spoken to Trump, nor had even gotten
as much as a voicemail. So and Karen Bass's the mayor,
has said she has not spoken directly to Trump. I
don't think she's tried to reach out, but she hasn't
spoken to them. So there, you know, there's sort of
(10:20):
this confusion. I think even at the official level too.
Of I guess the politics behind it, and you know,
I guess everyone hoping that cooler heads will prevail and
that everyone will be able to come up.
Speaker 8 (10:30):
With a solution.
Speaker 3 (10:31):
Last thought, I don't know, you know, how are you
guys thinking about kind of what happens next, because it
doesn't sound like there's a lot of communication between the
government and certainly officials the mayor.
Speaker 4 (10:43):
But who knows.
Speaker 3 (10:44):
I'm just curious what inside are you getting between your
sources or from your sources when it comes to the
communication that you're seeing. What is again, we keep reminding
everybody feels like a struggle between federal versus state.
Speaker 7 (10:57):
Absolutely, this has been a really unpredictable situations. So I
think what we do know is that the city has said,
you know, if the unrest grows, and they didn't say
whether it's as early as tonight or down the road,
they'd be willing to put a curfew in or take
more aggressive measures. So I think that's what we're watching
out for right now, whether the troops get involved or
it just remains LAPD, Sheriff's office, local forces. You know,
(11:21):
where does this end to protesters keep coming out, do
they grow in size, you know, does it get out
of hand or feel out of control at any point?
And I think everyone's sort of on the edge of
their seat waiting to see what happens next. And a
lot of this action has been happening at night, so
I think the as the sun falls, that's when we
start to see, you know, people come out right more
(11:43):
on the protest sort of vandal side of things. So
we're sort of waiting to see tonight what happens next.
Speaker 3 (11:48):
All right, Sarah, as always, thanks again for the updates.
Sara McGregor our national team managing editor for Bloomberg News.
She is there in our bureau in Los Angeles.
Speaker 1 (11:56):
This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 4 (12:16):
We've got with us gqu Patel.
Speaker 3 (12:18):
He's president and chief product officer, and he's joining us
here on site.
Speaker 4 (12:21):
Thank you for your patience so much going on.
Speaker 9 (12:23):
Thank you for having me and thank you for being here.
What do you think of this show?
Speaker 2 (12:27):
It's pretty cool. It is way way way biggery big
I thought it would be. And we're just in one
of the rooms here, just.
Speaker 9 (12:33):
In one of the rooms.
Speaker 10 (12:34):
It's hard to host twenty two thousand people in a
single room, so we have to keep breaking it up.
Speaker 9 (12:38):
Cool.
Speaker 3 (12:38):
Yeah, this is big when you bring these people together,
Like what is top of mind for you in terms
of what you want to hear from them and what
they are hoping to get from you.
Speaker 9 (12:46):
Look, these are our customers.
Speaker 10 (12:47):
There are partners and their companies who are considering buying
Cisco technology. And one of the things that we want
to make sure that we're very clear with is what
is the what are the core problems we're solving, and
what are the key innovations that we're making. And we
want to make sure that we can provide that to
them and have them talk to the technical experts so
that they can actually learn about the products and you know,
(13:09):
you know, kind of pressure testimony they're here. We're in
a really interesting place right now because we're in the
next era of AI. So we've past two and a
half years since chat GPT came about. Carol, you and
Tim know this. We had this kind of seize maic
shift that happened in the industry, and we have these
(13:30):
chatbots that could intelligently answer questions.
Speaker 9 (13:33):
That we had, and we're now going to this next.
Speaker 10 (13:35):
Era where there's going to be agents that can conduct
tasks and jobs fully autonomously on our behalf, and they
might work, you know, initially, they'll start working by themselves
for a couple hours, and then over time they might
be a couple couple of days, and then a couple
of months and a couple of quarters. And the possibility
of the kinds of problems we can solve are so amazing,
(13:56):
and we want to make sure that we provide the
infrastructure to make that happened.
Speaker 2 (14:00):
So are you talking about with the agentic solutions that
you're talking about, are you talking about inference specifically.
Speaker 9 (14:06):
Correct.
Speaker 10 (14:07):
So we've been working on, you know, working with people
on making sure that we can provide the infrastructure for
training for the past couple of years.
Speaker 2 (14:15):
And that's where a lot of the that's where a
lot of the spend's happening, a lot of the spend,
a lot of the rewarding by shareholders of certain companies,
no question.
Speaker 10 (14:25):
Has been to date. But now what you're starting to
see is the demand signal for inferencing is going up
quite a bit. And if you think about what's happening
and inferencing, when you just had an interactive mode where
you would ask a chat, bought a question, what would
happen is you would have spikes of peaks that you
would get on compute usage and on data center usage.
(14:46):
When you have an agent and that agent is fully
autonomously and proactively working on something and they're just kind
of cranking away and there's not just one agent, there's
tons of agents working together. What you see is a
sustained demand for inferencing capacity, and it's persistent inferencing that's needed.
So your infrastructures kind of assumptions, the amount of network
(15:07):
bandwidth you need, the amount of you know, kind of
safety and security that needs to be in play.
Speaker 9 (15:12):
Is very, very different.
Speaker 10 (15:14):
And so right now we're working with a lot of
the governments who want to make sure that they have
sovereign data centers all throughout the world.
Speaker 9 (15:21):
We are also working with.
Speaker 4 (15:24):
That's a big demand push right now, isn't it huge?
Speaker 10 (15:26):
Huge amount puss I was in the Middle East. Yeah,
just a couple of weeks ago, and we announced partnerships
with Humane and Saudi Arabia. We announced partnerships at G
forty two at Stargate UAE. And the reason for this
is because there's an insatiable demand right now. If you
think about what's the constraint in AI today, it's it's infrastructure,
(15:47):
and it's safety and security where people have to trust
these systems otherwise they're not going to use them.
Speaker 9 (15:51):
And so those are the two big constraints.
Speaker 10 (15:53):
And of course the third one is a skills gap
where you have to keep training people up. But the
first two are pretty material. And imagine if we had
a world where infrastructure was not a constraint. Imagine all
the problems we could solve that we're currently not able
to solve because of the constraint of infrastructure.
Speaker 3 (16:08):
Well, but some of those constraints are serious to you too,
And I think about as you guys are ramping up
and building out and providing what customers need, though whether
it's enough power to do it all. We just did
a big story at Bloomberg last week about not enough
engineers workers for power plants and so on, and so forth.
So how are you guys kind of balancing that you're
doing what you need to be doing, but making sure
(16:31):
everything else is there to support it.
Speaker 10 (16:33):
I mean, if you think about the large constraints they
compute their power because GPUs are power hungry, and then
there's network bandwidth, and then there's safety and security, like
those are the four kind of high level buckets.
Speaker 9 (16:44):
If you think about power, what we.
Speaker 10 (16:48):
Are trying to do is make sure that we could
have the lowest amount of latency, the highest performance, and
the most power efficiency because how long it takes for
a pack to get to the GPU to get processed
really matters. And if you if you have idle time
on a GPU, that's actually not a good thing. You
(17:09):
want to make sure that you're keeping the GPU utilization high,
and so we need to make sure that we have
power efficiency. Every killer water power we save is a
killer water power you can give to the GPU.
Speaker 9 (17:19):
And then we need to make sure that the backups
keep flowing well.
Speaker 3 (17:22):
So then every so forgive me so capability and efficiency.
Speaker 4 (17:26):
You're constantly like balancing.
Speaker 3 (17:28):
Constantly balancing it, right, Yeah, absolutely, because you've got to
make sure it's efficient, otherwise it's not going to be
financially going to make sense.
Speaker 10 (17:34):
That's exactly right, because if you don't have the right
level of power efficiency For firstly, all of the data
centers that are getting built right now, you we are
running out of data centers to build in certain geographies
because you don't have enough powers. You actually tend to
go to where the power is, and data centers are
getting built where the power is.
Speaker 9 (17:50):
So it's a very important commodity.
Speaker 4 (17:52):
Is that true globally?
Speaker 9 (17:53):
Yeah, it's absolutely.
Speaker 3 (17:55):
You're data set like running out of places to run
data centers because of the lack of power.
Speaker 10 (17:58):
Yeah, you just need need to be not too far
from the power so that you're you know, the the
entropy is less and how that how that works.
Speaker 9 (18:06):
You're good, Carol. Enthusiasm between the two of you.
Speaker 3 (18:09):
That questions that I want to make sure with you,
we said we can go as long with you too
as you will give us.
Speaker 9 (18:14):
Yes, that is as long as you want.
Speaker 2 (18:16):
That is the answer. Can you talk a little bit
about the relationship that you have with in video, Yes,
because I think a lot of investors are trying to
understand from a customer perspective, from just a relationship perspective,
what can you tell us.
Speaker 10 (18:31):
So we have enjoyed a very meaningful partnership with them
for the past six years. You know, we six years
ago we decided that we're going to use the end
video chipsets and our video conferencing devices, and that made
those devices very you know, kind of AI ready, and
now what you see is a lot of kind of
sophisticated AI capabilities are uploaded on the device itself, so
(18:53):
that even if the device integrates for a third party
like Microsoft Teams, they can benefit from the innovations that
we've made.
Speaker 9 (18:59):
So that's been a great part partnership.
Speaker 10 (19:00):
What we did in the past few months, though, is
we have doubled down on the partnership with data centers,
and so we had announced that we have a AI
factory and secure AI factory, which is basically what Nvidia
has as a reference architecture, which is a suggested model
mode of how companies should think about building out their infrastructure.
Speaker 9 (19:20):
And for the very first.
Speaker 10 (19:21):
Time they had a non Nvidia Silicon provider that was
actually part of that reference architecture, who was Cisco, and
we were the first one of those that they actually
incorporated into their architecture. Why is that important because customers
look to in video to say, hey, what does your
reference architecture look like? And now Cisco is part of
(19:42):
that reference architecture. So that was the first thing. But
what we've also done and what we announced today was
our safety and security capabilities are pretty sophisticated, and we
want to make sure that we actually tie that with
Nvidia's you know kind of efforts around if you're building
a open source model and an application with an EMO framework,
(20:03):
we can now validate that model with Cisco. And so
we aren't just helping with nvideo and building a secure
AI factory with the infrastructure and a full stack, but
we're also helping but how do you keep it secure?
Speaker 9 (20:16):
And how do you keep it safe?
Speaker 10 (20:18):
And so because one of the challenges that you have
is if people don't trust their AI systems, they're not
going to use them, and so we want to make
sure that people are trusting them.
Speaker 4 (20:26):
We're talking with g.
Speaker 3 (20:26):
Two Patel, President and chief Product officer at Cisco. We're
here at Cisco Live twenty twenty five. What's the productive
conversation around So much focus is on, especially when it
comes to Nvidia and their demand for chips, the hyper
scalers how much they are doing to get an idea
of where we are in the AI race. But I'm
also you know, you talk to you folks, and it's
a lot of on premise build out, So what's the
(20:49):
larger Yeah, are both okay, So what's the mix.
Speaker 4 (20:52):
In terms of how we see this continue to grow?
Speaker 10 (20:55):
So I think the way that you will see this
progress forward is there's.
Speaker 9 (20:59):
Three four different models that will be out there.
Speaker 10 (21:01):
Firstly, one of the very counterintuitive things is hyperscalers are
going to grow very rapidly. Private data centers are going
to grow very rapidly, and neo clouds which are actually
AI specialists, are going to grow very rapidly, and source
service providers. So when there's you know, kind of a
rising tide, all boats rise, and.
Speaker 9 (21:21):
That's what's happening right now. Now. What is happening that's unique.
Speaker 10 (21:25):
With you know, data sovereignty and with you know kind
of nationalistic behaviors that are kind of progressing from from
a geopolitical standpoint, is there's more and more of an
acceleration of demand of private data centers.
Speaker 2 (21:39):
Yeah, we talked about this on prem on premph.
Speaker 9 (21:41):
And specifically for infrancing I think for training, that's interesting.
You know, people might go to the cloud, right.
Speaker 2 (21:46):
Do you see that as being part of a government regulation,
a sovereignty issue or is it more an individual on
an individual company basis.
Speaker 9 (21:53):
It's actually a.
Speaker 10 (21:53):
Combination of issues. It's you know, there's a sovereignty issue.
There's also a data proximity issue. There might also be
some companies who have enough scale where the scale itself
might give them an advantage that they're like, hey, I
don't need to go pay someone something. I might want
to have some of the workloads on my own premise.
And so it's a combination of multiple issues. But what
you are seeing is there's this kind of upsurge of
demand and acceleration. The good news for us is we
(22:16):
help the largest of hyperscalers with intra cluster communication, you know,
on the networking side. We are also working with neocloud
providers and then and then we've had relationships with service
providers for the past couple of decades, and now what
you're starting to see is a resurgence of demand on
the enterprise that we know really really well. We've actually
(22:38):
been working with enterprise data centers for the past forty years.
And now we are actually starting to see a massive
resurgence because of AI inferencing demand and the agentic workflows.
Speaker 9 (22:48):
When every company is starting to.
Speaker 10 (22:49):
Rethink their workflows, whether it be a BB a healthcare company,
or a bank or a financial services or insurance company,
every workflow is getting reimagined. Structure is going to be
built out everywhere, and we want to make sure that
we are the common networking substrate and we are the
common security and safety kind of provider across the board.
Speaker 11 (23:08):
So G.
Speaker 3 (23:09):
Two in an environment where we constantly are talking about
an uncertain environment because there's stuff coming at us even
today as we kind of continue to watch the negotiations
between US and Chinese officials over in London, how would
you describe demand the capex spend that you are seeing,
whether it's the hyperscalers, whether it's those folks building their
enterprise systems, like the different buckets that you play into.
Speaker 10 (23:29):
The demand signal is stronger than an ever. I've never
seen anything stronger on the demand signal side, because you've
got trillions of dollars that are going to be flowing
in for these data center build out capacities. So the
demand signal is very strong. It's actually also happening globally,
so it's not just happening in the US. You're starting
(23:50):
to see demand in the Middle East, You're starting to
see it in Europe, You're going to start to see
it in Asia. And one of the things that's important
for America is we want to make sure that American
technology are being utilized in all these data center buildouts
because that's good for America and that's good for the world. Frankly,
and so you know, Cisco and Nvidia and open AI
(24:10):
and others and all of our partners, I think AMD
it's extremely important that we all work together to make
sure that these kind of data center buildouts happen with
our technology.
Speaker 2 (24:21):
You know, you're you're shocking me with the just the
striking magnitude of these investments. It's what is what is
not being Where's money not being spent as a result,
as budgets get reallocated toward infrastructure, what's not getting money?
Speaker 9 (24:38):
I think what you find is the.
Speaker 10 (24:41):
In the short term, you actually have to take certain
amount of dollars from existing projects and move them towards AI.
And almost every company is doing that this and you know,
I'm going to take twenty percent out for my existing
projects move.
Speaker 9 (24:54):
Them towards AI.
Speaker 10 (24:56):
Over time, what you find is AI will get so
much productivity that twenty percent of the projects will get rehydrated.
Because if you think about like, for example, we're one
of the first partners with open AI on their codex project,
which is the autonomous software Engineer. It's no longer where
you just have an auto complete, where you can have an.
Speaker 9 (25:14):
Individual developer that gets productive.
Speaker 10 (25:16):
You can actually now tell an agent or a group
of agents, go solve a really hard problem for me
and come back to me in a couple of weeks,
and we'll be able to actually have a world that
we're living in in relatively short you know, kind of
time horizons where it will be able to solve that
problem and come back to you, and you'll still have
the human in the loop that will be able to
observe and they will be able to do things. But
(25:37):
imagine what that does for the constraint. We have twenty
seven thousand engineers. I've never felt more constrained in my
life about the ideas I have compared to the resources
I have to prosecute those ideas. And we will actually
get to a point where we can unlock those ideas
in a very different way.
Speaker 9 (25:53):
Right.
Speaker 2 (25:53):
I was just gonna say we could go on forever
with G two, but apparently his team is telling us
that you have to go speak speaking engage keeper. Oh,
he doesn't want to do it. He wants to hang
out with us.
Speaker 9 (26:05):
You guysn't too fun.
Speaker 2 (26:07):
Hey, we're going to get in trouble if we do that.
Speaker 4 (26:10):
Well, I mean I'm going to go go.
Speaker 3 (26:12):
I mean, I mean we're just kind of blown away
every day, like what we are learning about this and
how it's impacting our world. I mean, I don't know
six months from now, a year from like, how should
we be thinking about how dramatically this will impact everything?
Speaker 10 (26:25):
I think firstly, your imagination will be challenged quite a
bit because humans have a very hard time thinking exponentially
for a sustained period of time. And this curve is exponential.
And when it's exponential, it's not happening in a single dimension.
It's happening across multiple dimensions all at once. And so
if you think about it six months or twelve months
(26:46):
or eighteen months from now, no longer are you just
going to be thinking about this as a more efficient
way for getting an answer. But you will have companions
and sidekicks and a staff of people that are digital
workers that can get a job done that you would
have otherwise not had a time to do. And one
important area to talk about is a lot of people
worry about ISAI going to take my job? I actually
(27:08):
worry more about people that use AI really well. There's
a higher risk of them.
Speaker 9 (27:14):
Taking your job than AI taking your job noted, you know.
Speaker 10 (27:17):
And the other piece that I worry I also think
about is if you actually have there's no one that
I know that comes home every day and says, you
know what, I've gotten everything done on my checklist, right,
And so the reality is is when you there's eighty
percent of the work that we do probably doesn't get
checked off because we don't have time to do it.
(27:39):
Now AI agents will start doing that. And then the
final category that's the most exciting is it's AI will
be able to do things that we were not able
to do because it'll have original insights that don't exist
in the human corpors of knowledge. And that's the area
of AI that I think is the most underhyped.
Speaker 2 (27:55):
G Two we got to leave it there. Your crew
is about to come on set and you're away to go.
Speaker 4 (28:00):
And just where you know.
Speaker 3 (28:01):
I have a companion in Sidekick, but I'm ready for
my AI companion.
Speaker 2 (28:07):
Resident Product Officers, let's go here at Cisco Live twenty
twenty five.
Speaker 6 (28:12):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch US Live on YouTube.
Speaker 4 (28:26):
So let's get to one of our favorite guests.
Speaker 3 (28:28):
I gotta say when it comes to Cisco, She's come
on Bloomberg many times. She's definitely familiar to our regular
viewers and listeners. She's often traveling. She comes to New York.
Speaker 4 (28:37):
As we said, she stops by, but she's got this.
Speaker 3 (28:39):
Great vantage point on people and technology and how the
workplace is changing and so much more. Francaseudics is back
with US executive vice president and Chief People, Policy and.
Speaker 4 (28:49):
Purpose Officer at Cisco.
Speaker 3 (28:50):
She's also on the board of ADP and she joins
us here in San Diego.
Speaker 4 (28:54):
How are you good? How are you? It's great to
see you here. It's great to be here.
Speaker 3 (28:58):
I mean, we're just kind of blown away and just
you know, we're talking so much about AI, as you
would imagine, tell us a little bit more about what
the conversations you are having around work. We just talked
to G two and just you know, these concerns that
AI is going to replace all the jobs. But as
he made this point, it's those people who know how
to use AI, those are the people you're going to
(29:19):
have to be worried about because they're going to be
a lot more productive and have bigger roles in the workforce.
Speaker 11 (29:23):
So it's really interesting from a broader work perspective. There
are stats right now that are being released that tell
us we have a lot of work to do, but
similar to G two, I see.
Speaker 8 (29:33):
A tremendous amount offside.
Speaker 11 (29:35):
So Gallup actually put out a survey recently and they
said that seventy percent of US workers are not using
AI on their jobs today, and they said that fifty
percent do not feel prepared whatsoever for what is coming.
And what I think that means from a company perspective
is that we have to create these bottoms up and
(29:55):
these top down motions to really ensure that people can
start to experiment. Because what we've seen at Cisco is
when people start to play with the technology, they create
the use cases, they see some of the opportunities that
are there. The other thing that's interesting is that I
do believe we'll start to see more and more roles
consolidate and you'll see that the technology will support a
(30:18):
lot of the work, but people will have a broader
vantage point or a broader remit. Generally speaking, that's good
for employees, and so I think from an employer perspective,
we have an accountability to ensure that our people are
ready and that they're experimenting today.
Speaker 2 (30:33):
You know, I want to talk a little bit about
where we are in the history of this technology. Yeah,
because you've been at Cisco for around three decades at
this point. So if we think about where things were
in nineteen ninety five, it was like the dawn of
the World Wide Web. A lot of people had dial up.
That was the access that that was the access that
they had. Cisco was a completely different business. You've consistently
(30:55):
been at the company since then. Contextualize for us big
of a deal the AI era is.
Speaker 11 (31:03):
It's so huge, So listen to this. So I started
at Cisco in the contact center. I was answering first
line questions for our customers that called in.
Speaker 8 (31:11):
That role doesn't exist anymore.
Speaker 11 (31:14):
That role has been replaced by AI, and what we
know today is about one point six million of Cisco
customer cases are now solved leveraging AI, and the satisfaction
scores are incredibly high.
Speaker 8 (31:28):
What that means is.
Speaker 11 (31:29):
That those people that we're doing those frontline calls are
now at the next level. They're handling the more complicated issues.
What that also means is that if you're someone coming
out of college like I was, that entry level.
Speaker 8 (31:43):
Role doesn't exist.
Speaker 11 (31:44):
What that means is that we as companies have to
create more of a bridge now from someone coming into
the workforce to whatever that new entry level role is.
Speaker 8 (31:53):
And I think there will always be entry level roles.
Speaker 11 (31:56):
The other thing that I would say is the contact
center in particular is one of your best examples of
a use case that is just prevalent across industries. And
the reason for that knowledge management system clarity around how
calls are answered. It's something that is measured in every
single way. And so our challenge now is how do
(32:16):
you get unstructured work to behave like a contact center
if you will.
Speaker 2 (32:20):
So I understand the difference between and sort of the
example that you gave about jobs and how that's evolved.
But if you think about this in the context of
outside of Cisco and the idea that the Internet opened
up these opportunities for so many businesses to be built,
it is the promise of AI, in your view, bigger
(32:42):
than anything you've seen in.
Speaker 9 (32:43):
Your career or is it.
Speaker 2 (32:45):
Kind of the same as what you saw with fast
browsing and connectivity in the nineties.
Speaker 11 (32:50):
I think it's bigger because of the pace, and I
think what we're going to see is we're going to
see an intersection of the technology and all of the roles.
And what's unique now is that you actually have roles
coming together in meaningful ways. You have the ability for
us to scale even beyond what we did as we
step into the Internet era, and so I think it's
(33:12):
much much bigger.
Speaker 4 (33:13):
I'm curious about the macro issues.
Speaker 3 (33:15):
You're always so gracious and kind of talking about the
macro environment, and I'm just thinking about the US China
talks that are going on right now, fran And obviously
it involves things like rare earth minerals technology. These are
things that certainly play into your world.
Speaker 4 (33:27):
You know, how are.
Speaker 3 (33:28):
You guys thinking about that, How to make sure that Cisco,
whether it's their supply chains and so on and so forth,
are where they need to be.
Speaker 11 (33:37):
I think for all companies, but from a Cisco perspective,
what we're always thinking about is what are the scenarios
that we have to be thinking about in how our
customers consume, how our employees work. To your point, some
of the geopolitical issues that we are not in control
of whatsoever. And I think for us, having good people
(34:01):
on the ground that understand running those scenarios so that
we know how we're going to respond as a company,
and then being clear with what we control. I think
one of the best things that we can do is
provide stability to our customer base. And so what that
means is in an area like supply chain, we have
to have that redundancy so that we can pivot left
(34:23):
or right as we need to, and we've done a
lot of that over the last couple of decades.
Speaker 3 (34:27):
You talk scenarios, you know, this was an environment where
we were having earnings where companies were saying could be
this one or it could be so right, so great, good.
Speaker 4 (34:35):
And I'm just curious.
Speaker 3 (34:36):
Are there are there more scenarios that you have to
plan for in this environment more than usual or not necessarily?
Speaker 8 (34:42):
No, I think there are.
Speaker 11 (34:43):
I think you're responding to external pressures. I think the
tariff question is a big one for many of our
customers as well. I think you have this technology coming
in that's changing everything, and so when we look at AI,
what we're looking at is how did it intersect our portfolio,
How does it intersect the way in which we work,
(35:04):
and then how does it intersect the way.
Speaker 8 (35:06):
In which our people are working.
Speaker 11 (35:08):
And so you have all of these dynamics inside and
outside of the company that come together. And something that
I believe very strongly, and this is different from three
decades ago, is that you don't have an outside of
the company. Inside of the company, everything is blurred and
you have to respond.
Speaker 9 (35:22):
You know, we got we got it.
Speaker 2 (35:23):
We haven't spoken to you in a few months, and
I wanted to get an update from you on the
way that you think about DEI, the way you think
about ESG. This is all under your purview at Cisco.
DEI has I think it's fair to say for this
administration it's turned into essentially a swear word, and it's
something that they're rooting out of the federal government and
trying to root out of private companies as well. Has
(35:43):
your approach at Cisco changed at all?
Speaker 11 (35:47):
So at Cisco our purpose to power and inclusive future
for all, and that has really shaped us.
Speaker 8 (35:53):
It's guided us.
Speaker 11 (35:54):
It helps us to understand the way in which we
show up to external communities, which is this element of
how do we use our technology to include all? How
do we ensure that we can drive a level of
accessibility and connection. That part of our purpose absolutely stays true.
Speaker 3 (36:12):
Nothing changes despite everything going on from a purpose perspective
and how we show up to communities that we're showing
up in the same way.
Speaker 11 (36:20):
And I think everyone understands that the more that you
can help people connect via technology, they get access to education, healthcare.
I think Carol, that part of it is well understood.
I think as a company, and as we look at
our internal practices, the first thing that I would say
is you have to comply, of course, with any administration,
(36:40):
and that's within the US and outside of the US
as well, And so that's something that we're accustomed to doing.
What I would say that's different to him is that
we take programs that at one point we're a little
bit more custom to a particular group, and we've.
Speaker 8 (36:54):
Opened them up to the entire company.
Speaker 11 (36:56):
And what we realize is there's a lot of goodness
in those programs and we want every one to have
opportunity and to be successful.
Speaker 8 (37:03):
And so that's the approach that we've taken.
Speaker 2 (37:05):
Truly interesting, So you know, potentially, so it sounds like
the things that you've done, you've actually made it more inclusive.
Speaker 11 (37:10):
Yeah, we have, we have, and I think it's a
good moment to really assess what's working, what isn't working.
And we've done that and some of these programs are amazing,
and so why not make them more available.
Speaker 3 (37:23):
Is it fair to say that employees, your employee based
you guys are massive like that they want some of
these DEI initiatives that they do either.
Speaker 11 (37:31):
Yeah, I think there's two things going on. Our employees
and candidates that are looking at Cisco want to believe
that we have a set of values that are aligned
to theirs, and we see that all the time in
the interview process. People have read our purpose Report. They
know what we stand for. I would say from an
(37:51):
employee perspective. They want to know that we still care
and that we're still driving a level of inclusion and belonging,
and I think we absolutely are.
Speaker 3 (38:00):
Last question, I've met some of the senior executive women
at Cisco, and it seems like you guys really prioritize
that I look at yourself and others, but.
Speaker 4 (38:10):
We continue to have I think we've had this conversation.
Speaker 3 (38:13):
With you, why aren't there still more senior women in
C suite positions or SEE level positions?
Speaker 4 (38:19):
More broadly, why is it still such a struggle?
Speaker 5 (38:22):
You know?
Speaker 11 (38:22):
I think that for many companies, I think we do
a really good job of bringing people in from university,
and then I think there's a point where we lose women.
At Cisco, we see great representation at the executive level
and at the incoming levels, and so we have to
continue to push through every element. But what we see
(38:45):
and what the research tells us, is that people want
to see role models, and they want to be able
to look and see someone that tells them, hey, if
you're in this role, that means that I can be too.
And so I think we have to continue to work
on things like role modeling. I think we have to
work on mentorship for all employees. Sponsorship all of these
things I think create a better environment and provide career
(39:06):
goals and pathways as well.
Speaker 4 (39:08):
Got to be active about it. Let's write a doubt
about it. Well, you are definitely a role model. I
thank you. Great to check in with you again.
Speaker 3 (39:13):
Frank Crosuda's executive vice president and chief People, Policy and
Purpose Officer at Cisco, joining us here at Sisco Live
twenty twenty five.
Speaker 6 (39:21):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(39:41):
and always on the Bloomberg terminal.
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insight on the people, companies, and trends
shaping today's complex economy, plus global business, finance and tech
(00:23):
news as it happens. The Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Steneveek. On Bloomberg Radio.
Speaker 2 (00:32):
We are hearing from Treasury Secretary Scott Bess and he
spoke to reporters but didn't say much. He said that
Greer and Lutnik will continue as needed. That's jameson Greer
the USTR, and Howard Lutnik, of course, the Commerce Secretary.
This in regard to the negotiations between.
Speaker 3 (00:49):
The US and China, we know it's not easy and
we know these negotiations, as we said, especially when it
comes to US China, the two biggest economies in the world,
complicated relationship and so there's a lot to be still
done in to be known.
Speaker 4 (01:00):
So we're going to watch for some headlines.
Speaker 3 (01:02):
In the meantime, We've also been focusing on another trade relationship,
and that has to do with US and Mexico.
Speaker 4 (01:07):
We did moments ago get headlines. The US and Mexico
are close.
Speaker 3 (01:11):
To a deal that would remove President Trump's fifty percent
tariffs on steel imports up to a certain volume. That's
similar to a deal during the president's first term. So
kind of sounds like going full circle there. So let's
see what our own Joe. Doe has to say about this.
Understands the steel industry like no other. He is Bloomberg
News Economic state Craft reporter. He is in Washington, Joe,
(01:32):
so good to be checking in with you. I don't know, Tim,
and I've been talking about a lot of context. Yeah
here with the Cisco team, especially those who've been around
for a long time, give us some context on this
deal against you know, what we have seen in the
first Trump administration and common and what we've seen between
this relationship generally when it comes to steal.
Speaker 5 (01:53):
Yeah, it's a great question. I think the context is
what we're getting here is very similar to something we
saw in the first term. During the first term, there
were twenty five percent terraffs on steel imports coming from
everywhere in the world, but Mexico and Canada in particular
were upset by this because they were the close trading partners.
(02:14):
And you might remember in twenty nineteen they were trying
to create a new NATA, and as a part of
getting the new NAFTA agreed, the United States agreed with
Mexico that they would lift the twenty five percent tariffs
in exchange for an agreement that Mexico would stop imports
of exceeding a certain level, like a historical level. Well,
that's what we're seeing again here. They're getting close to
(02:36):
finalizing terms between Mexico and the United States right now
to lift that fifty percent tariff in exchange for Mexico
agreeing that they want import more than a certain level.
One of the things we're hearing though, is that that
level that they're not supposed to exceed is actually going
to be higher than what the twenty nineteen number was.
So that's a real key point here.
Speaker 2 (02:58):
Is what is the US? Do we know what the
US is doing in response for how the US is
getting Mexico to agree to a deal such as this.
Speaker 5 (03:07):
I mean, one of the things that they're putting out
there is just listen, Okay, we're going to take this off,
but we're going to have you agree essentially to a quota, right,
and that essentially puts the level of immacrats that can
come into the United States, and I think that's really
the trade off here. So yes, we'll lift the tariff,
but hey, you can't go above historical numbers that we've
(03:28):
been seeing out of Mexico into the United States over
a certain period.
Speaker 2 (03:32):
We saw investor response to this, Joe. In late trading
after your report in Cleveland, Cliffs dropped more than seven percent,
New Core fell more than four percent. US steel stocks
overall decline. The PESO trimmed losses after you and the
team were the first report on the advanced deal talks.
What are the implications for American steel companies.
Speaker 5 (03:52):
Yeah, I think the American steel companies wouldn't be too
happy about this one. I mean, obviously lifting of the
tariff is one thing, but increasing that import level that
that's so called quota, if you will, it's not actually
a quota, it's just an agreed upon level that I
think is going to be something that's very striking to
executives across the various steelmaker companies right now, because if
(04:16):
you are expecting at some point maybe the terriff will
be lifted, you might have been expecting that the quota,
the threshold would still be at that twenty nineteen level.
That's something you've seen over the past six years. So
that idea that that might come up, I think that's
a bit of what we're seeing in the reaction of
Cleveland Cliffs and New Cole Corporation and after hours trading today.
Speaker 4 (04:36):
All Right, so I feel like my head is spinning
with Fels. Well, this is why we lean on you,
So step forward. This is good.
Speaker 3 (04:45):
Like, I don't know what's I mean, it's obviously not
for some of the US steel players as we're seeing
their share price go lower. But I'm trying to kind
of I don't know. Resolution is always good, but it
depends on what they what you.
Speaker 4 (04:56):
Listen, here's how you know.
Speaker 5 (04:58):
So here's how it Yeah, here's how i'd break it down,
seemingly in that positive for Mexico. And listen, Howard Lutnik,
who is leading the negotiations on this deal, could end
up having a deal that he can take back to
the President of the United States, Right, I mean, one
of the things is the President wants deals, and this
(05:18):
is one he'd be able to take back to him. Sure,
maybe the steelmakers won't be too happy about this, But
there's another way of looking at it. Listen, Mexico hasn't
had Terris for a number of years. They got slapped
back on when the President said he'd be putting Teris
back on Canada in Mexico back in February. So in
a way, we're kind of reverting back to the way
(05:38):
things have gone basically for the past four to six years.
Speaker 4 (05:43):
Do we call that a one to eighty? Do we
call that at three sixty? What do we call that?
Speaker 5 (05:49):
I think people in the market who actually trade these
things would say, oh cool, So we're going back to
the status quo. But again, we have to wait and see.
The terms are still being finalized. I think that is
a very important to be sure. But President of the
United States has not been negotiating this directly, and he
is ultimately the last person who has to sign off
on it, so we do have to wait and see.
Speaker 2 (06:10):
Jode Bloomberg News Economic Statecraft reporter joining US from Washington
once again. Joe and Eric Barden were first to report
on the advanced deal talks, as US and Mexico are
nearing a deal to cut steel duties and cap imports.
We did see US steel stocks decline and the Pesto
trim losses. After Joe and Eric's reporting.
Speaker 6 (06:32):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (06:50):
Happening just north of us in Los Angeles, the Trump
administration escalated its response to anti deportation protests in La Marines,
deployed by President Trump right in the Los Angeles area
with orders to protect federal property and officers as the
city is gripped by tensions over anti deportation protests. With
an update, we go back to Los Angeles, where we
(07:10):
find Sarah McGregor, National Team Managing editor for Bloomberg new
She joins us from our Los Angeles bureau. Sarah, we
spoke to you yesterday, and I think a lot of
our listeners and viewers heard that conversation, and I guess
I want to start with an update on Obviously, we
know what the Trump administration has done with what's happening
on the ground when it comes to law enforcement, but
what about what's happening on the ground when it comes
(07:32):
to demonstrations, When it comes to protests, what is the
status of those right now.
Speaker 7 (07:36):
So we did see some violin, some sort of flare ups,
I guess around the city overnight and including actually in
other cities across the US. But you know, again, we
woke up in the morning and the protesters or vandals
had sort of dissipated. We did hear a figure that
over ninety people have been arrested overnight, so there was
some police action on that front, but again, the city
(07:57):
is sort of calm as we wake up in the morning,
and it's definitely a contrast as we hear that the
Marines have arrived. We don't know exactly where they're stationed yet.
According to Karen Bass, the mayor, she also doesn't know.
She's not in touch with the Trump administration, nor is
the LAPD chief about where those Marines will be deployed.
But you know, it's a bit of a split screen
(08:17):
that we're still seeing in terms of, you know, the
calm on the streets relative this morning compared to sort
of the heavy hand of the law that's come down
from the Trump administration with the Marines and the California
National Guard on the streets.
Speaker 3 (08:28):
So well said, Sara's listening to some of your coverage
earlier today, and you said, you know, in terms of
the Bloomberg audience audience, excuse me office in Los Angeles,
it's not like there's anything happening necessarily around you, right,
I mean, you would think if you hadn't read the news,
watched the news, you'd think it was a normal day.
Speaker 7 (08:46):
Absolutely sort of across the city. I think, you know,
there are large areas where this is not affecting people.
But of course we are still hearing reports. Just now,
I was reading about one on social media that said
at a food processing center in the in the state,
there's apparently a raid going on. We've heard that at
least twenty people who wash cars have been arrested. So
(09:07):
there's these raids going on that we're not getting that
much information about about who's being targeted, how many people
are being detained by ice. And again, these were the
raids that happened on Friday that really sparked these protests
to begin with. So it just feels like a very
tenuous situation right now where these you know, these raids
are ongoing. We do have troops on the on the ground,
and you know, we heard from Karen Bass that she
(09:29):
is not coordinating with the Trump administration. So how much
you know information is flowing between local law enforcement and
you know, the federal officials, and hopefully there isn't a
breakdown of communication there that you know leads to a
sticky situation.
Speaker 4 (09:40):
Either.
Speaker 2 (09:42):
A lot of our conversation yesterday focused on Governor Gavin
Newsom of the state of California and his relationship will
lack there of with the Trump administration. You mentioned, we
don't know the coordination that's happening between the mayor of
Los Angeles and the Trump administration. What's the latest when
it comes to Governor Newsom and the Trump administration.
Speaker 7 (09:59):
We did see a bizarre sort of exchange today where
Trump tild reporters in the Old Office that he had
spoken to Newsom yesterday, and within minutes, Newsom had tweeted
that he hadn't spoken to Trump, nor had even gotten
as much as a voicemail. So and Karen Bass's the mayor,
has said she has not spoken directly to Trump. I
don't think she's tried to reach out, but she hasn't
spoken to them. So there, you know, there's sort of
(10:20):
this confusion. I think even at the official level too.
Of I guess the politics behind it, and you know,
I guess everyone hoping that cooler heads will prevail and
that everyone will be able to come up.
Speaker 8 (10:30):
With a solution.
Speaker 3 (10:31):
Last thought, I don't know, you know, how are you
guys thinking about kind of what happens next, because it
doesn't sound like there's a lot of communication between the
government and certainly officials the mayor.
Speaker 4 (10:43):
But who knows.
Speaker 3 (10:44):
I'm just curious what inside are you getting between your
sources or from your sources when it comes to the
communication that you're seeing. What is again, we keep reminding
everybody feels like a struggle between federal versus state.
Speaker 7 (10:57):
Absolutely, this has been a really unpredictable situations. So I
think what we do know is that the city has said,
you know, if the unrest grows, and they didn't say
whether it's as early as tonight or down the road,
they'd be willing to put a curfew in or take
more aggressive measures. So I think that's what we're watching
out for right now, whether the troops get involved or
it just remains LAPD, Sheriff's office, local forces. You know,
(11:21):
where does this end to protesters keep coming out, do
they grow in size, you know, does it get out
of hand or feel out of control at any point?
And I think everyone's sort of on the edge of
their seat waiting to see what happens next. And a
lot of this action has been happening at night, so
I think the as the sun falls, that's when we
start to see, you know, people come out right more
(11:43):
on the protest sort of vandal side of things. So
we're sort of waiting to see tonight what happens next.
Speaker 3 (11:48):
All right, Sarah, as always, thanks again for the updates.
Sara McGregor our national team managing editor for Bloomberg News.
She is there in our bureau in Los Angeles.
Speaker 1 (11:56):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarflay, 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 4 (12:16):
We've got with us gqu Patel.
Speaker 3 (12:18):
He's president and chief product officer, and he's joining us
here on site.
Speaker 4 (12:21):
Thank you for your patience so much going on.
Speaker 9 (12:23):
Thank you for having me and thank you for being here.
What do you think of this show?
Speaker 2 (12:27):
It's pretty cool. It is way way way biggery big
I thought it would be. And we're just in one
of the rooms here, just.
Speaker 9 (12:33):
In one of the rooms.
Speaker 10 (12:34):
It's hard to host twenty two thousand people in a
single room, so we have to keep breaking it up.
Speaker 9 (12:38):
Cool.
Speaker 3 (12:38):
Yeah, this is big when you bring these people together,
Like what is top of mind for you in terms
of what you want to hear from them and what
they are hoping to get from you.
Speaker 9 (12:46):
Look, these are our customers.
Speaker 10 (12:47):
There are partners and their companies who are considering buying
Cisco technology. And one of the things that we want
to make sure that we're very clear with is what
is the what are the core problems we're solving, and
what are the key innovations that we're making. And we
want to make sure that we can provide that to
them and have them talk to the technical experts so
that they can actually learn about the products and you know,
(13:09):
you know, kind of pressure testimony they're here. We're in
a really interesting place right now because we're in the
next era of AI. So we've past two and a
half years since chat GPT came about. Carol, you and
Tim know this. We had this kind of seize maic
shift that happened in the industry, and we have these
(13:30):
chatbots that could intelligently answer questions.
Speaker 9 (13:33):
That we had, and we're now going to this next.
Speaker 10 (13:35):
Era where there's going to be agents that can conduct
tasks and jobs fully autonomously on our behalf, and they
might work, you know, initially, they'll start working by themselves
for a couple hours, and then over time they might
be a couple couple of days, and then a couple
of months and a couple of quarters. And the possibility
of the kinds of problems we can solve are so amazing,
(13:56):
and we want to make sure that we provide the
infrastructure to make that happened.
Speaker 2 (14:00):
So are you talking about with the agentic solutions that
you're talking about, are you talking about inference specifically.
Speaker 9 (14:06):
Correct.
Speaker 10 (14:07):
So we've been working on, you know, working with people
on making sure that we can provide the infrastructure for
training for the past couple of years.
Speaker 2 (14:15):
And that's where a lot of the that's where a
lot of the spend's happening, a lot of the spend,
a lot of the rewarding by shareholders of certain companies,
no question.
Speaker 10 (14:25):
Has been to date. But now what you're starting to
see is the demand signal for inferencing is going up
quite a bit. And if you think about what's happening
and inferencing, when you just had an interactive mode where
you would ask a chat, bought a question, what would
happen is you would have spikes of peaks that you
would get on compute usage and on data center usage.
(14:46):
When you have an agent and that agent is fully
autonomously and proactively working on something and they're just kind
of cranking away and there's not just one agent, there's
tons of agents working together. What you see is a
sustained demand for inferencing capacity, and it's persistent inferencing that's needed.
So your infrastructures kind of assumptions, the amount of network
(15:07):
bandwidth you need, the amount of you know, kind of
safety and security that needs to be in play.
Speaker 9 (15:12):
Is very, very different.
Speaker 10 (15:14):
And so right now we're working with a lot of
the governments who want to make sure that they have
sovereign data centers all throughout the world.
Speaker 9 (15:21):
We are also working with.
Speaker 4 (15:24):
That's a big demand push right now, isn't it huge?
Speaker 10 (15:26):
Huge amount puss I was in the Middle East. Yeah,
just a couple of weeks ago, and we announced partnerships
with Humane and Saudi Arabia. We announced partnerships at G
forty two at Stargate UAE. And the reason for this
is because there's an insatiable demand right now. If you
think about what's the constraint in AI today, it's it's infrastructure,
(15:47):
and it's safety and security where people have to trust
these systems otherwise they're not going to use them.
Speaker 9 (15:51):
And so those are the two big constraints.
Speaker 10 (15:53):
And of course the third one is a skills gap
where you have to keep training people up. But the
first two are pretty material. And imagine if we had
a world where infrastructure was not a constraint. Imagine all
the problems we could solve that we're currently not able
to solve because of the constraint of infrastructure.
Speaker 3 (16:08):
Well, but some of those constraints are serious to you too,
And I think about as you guys are ramping up
and building out and providing what customers need, though whether
it's enough power to do it all. We just did
a big story at Bloomberg last week about not enough
engineers workers for power plants and so on, and so forth.
So how are you guys kind of balancing that you're
doing what you need to be doing, but making sure
(16:31):
everything else is there to support it.
Speaker 10 (16:33):
I mean, if you think about the large constraints they
compute their power because GPUs are power hungry, and then
there's network bandwidth, and then there's safety and security, like
those are the four kind of high level buckets.
Speaker 9 (16:44):
If you think about power, what we.
Speaker 10 (16:48):
Are trying to do is make sure that we could
have the lowest amount of latency, the highest performance, and
the most power efficiency because how long it takes for
a pack to get to the GPU to get processed
really matters. And if you if you have idle time
on a GPU, that's actually not a good thing. You
(17:09):
want to make sure that you're keeping the GPU utilization high,
and so we need to make sure that we have
power efficiency. Every killer water power we save is a
killer water power you can give to the GPU.
Speaker 9 (17:19):
And then we need to make sure that the backups
keep flowing well.
Speaker 3 (17:22):
So then every so forgive me so capability and efficiency.
Speaker 4 (17:26):
You're constantly like balancing.
Speaker 3 (17:28):
Constantly balancing it, right, Yeah, absolutely, because you've got to
make sure it's efficient, otherwise it's not going to be
financially going to make sense.
Speaker 10 (17:34):
That's exactly right, because if you don't have the right
level of power efficiency For firstly, all of the data
centers that are getting built right now, you we are
running out of data centers to build in certain geographies
because you don't have enough powers. You actually tend to
go to where the power is, and data centers are
getting built where the power is.
Speaker 9 (17:50):
So it's a very important commodity.
Speaker 4 (17:52):
Is that true globally?
Speaker 9 (17:53):
Yeah, it's absolutely.
Speaker 3 (17:55):
You're data set like running out of places to run
data centers because of the lack of power.
Speaker 10 (17:58):
Yeah, you just need need to be not too far
from the power so that you're you know, the the
entropy is less and how that how that works.
Speaker 9 (18:06):
You're good, Carol. Enthusiasm between the two of you.
Speaker 3 (18:09):
That questions that I want to make sure with you,
we said we can go as long with you too
as you will give us.
Speaker 9 (18:14):
Yes, that is as long as you want.
Speaker 2 (18:16):
That is the answer. Can you talk a little bit
about the relationship that you have with in video, Yes,
because I think a lot of investors are trying to
understand from a customer perspective, from just a relationship perspective,
what can you tell us.
Speaker 10 (18:31):
So we have enjoyed a very meaningful partnership with them
for the past six years. You know, we six years
ago we decided that we're going to use the end
video chipsets and our video conferencing devices, and that made
those devices very you know, kind of AI ready, and
now what you see is a lot of kind of
sophisticated AI capabilities are uploaded on the device itself, so
(18:53):
that even if the device integrates for a third party
like Microsoft Teams, they can benefit from the innovations that
we've made.
Speaker 9 (18:59):
So that's been a great part partnership.
Speaker 10 (19:00):
What we did in the past few months, though, is
we have doubled down on the partnership with data centers,
and so we had announced that we have a AI
factory and secure AI factory, which is basically what Nvidia
has as a reference architecture, which is a suggested model
mode of how companies should think about building out their infrastructure.
Speaker 9 (19:20):
And for the very first.
Speaker 10 (19:21):
Time they had a non Nvidia Silicon provider that was
actually part of that reference architecture, who was Cisco, and
we were the first one of those that they actually
incorporated into their architecture. Why is that important because customers
look to in video to say, hey, what does your
reference architecture look like? And now Cisco is part of
(19:42):
that reference architecture. So that was the first thing. But
what we've also done and what we announced today was
our safety and security capabilities are pretty sophisticated, and we
want to make sure that we actually tie that with
Nvidia's you know kind of efforts around if you're building
a open source model and an application with an EMO framework,
(20:03):
we can now validate that model with Cisco. And so
we aren't just helping with nvideo and building a secure
AI factory with the infrastructure and a full stack, but
we're also helping but how do you keep it secure?
Speaker 9 (20:16):
And how do you keep it safe?
Speaker 10 (20:18):
And so because one of the challenges that you have
is if people don't trust their AI systems, they're not
going to use them, and so we want to make
sure that people are trusting them.
Speaker 4 (20:26):
We're talking with g.
Speaker 3 (20:26):
Two Patel, President and chief Product officer at Cisco. We're
here at Cisco Live twenty twenty five. What's the productive
conversation around So much focus is on, especially when it
comes to Nvidia and their demand for chips, the hyper
scalers how much they are doing to get an idea
of where we are in the AI race. But I'm
also you know, you talk to you folks, and it's
a lot of on premise build out, So what's the
(20:49):
larger Yeah, are both okay, So what's the mix.
Speaker 4 (20:52):
In terms of how we see this continue to grow?
Speaker 10 (20:55):
So I think the way that you will see this
progress forward is there's.
Speaker 9 (20:59):
Three four different models that will be out there.
Speaker 10 (21:01):
Firstly, one of the very counterintuitive things is hyperscalers are
going to grow very rapidly. Private data centers are going
to grow very rapidly, and neo clouds which are actually
AI specialists, are going to grow very rapidly, and source
service providers. So when there's you know, kind of a
rising tide, all boats rise, and.
Speaker 9 (21:21):
That's what's happening right now. Now. What is happening that's unique.
Speaker 10 (21:25):
With you know, data sovereignty and with you know kind
of nationalistic behaviors that are kind of progressing from from
a geopolitical standpoint, is there's more and more of an
acceleration of demand of private data centers.
Speaker 2 (21:39):
Yeah, we talked about this on prem on premph.
Speaker 9 (21:41):
And specifically for infrancing I think for training, that's interesting.
You know, people might go to the cloud, right.
Speaker 2 (21:46):
Do you see that as being part of a government regulation,
a sovereignty issue or is it more an individual on
an individual company basis.
Speaker 9 (21:53):
It's actually a.
Speaker 10 (21:53):
Combination of issues. It's you know, there's a sovereignty issue.
There's also a data proximity issue. There might also be
some companies who have enough scale where the scale itself
might give them an advantage that they're like, hey, I
don't need to go pay someone something. I might want
to have some of the workloads on my own premise.
And so it's a combination of multiple issues. But what
you are seeing is there's this kind of upsurge of
demand and acceleration. The good news for us is we
(22:16):
help the largest of hyperscalers with intra cluster communication, you know,
on the networking side. We are also working with neocloud
providers and then and then we've had relationships with service
providers for the past couple of decades, and now what
you're starting to see is a resurgence of demand on
the enterprise that we know really really well. We've actually
(22:38):
been working with enterprise data centers for the past forty years.
And now we are actually starting to see a massive
resurgence because of AI inferencing demand and the agentic workflows.
Speaker 9 (22:48):
When every company is starting to.
Speaker 10 (22:49):
Rethink their workflows, whether it be a BB a healthcare company,
or a bank or a financial services or insurance company,
every workflow is getting reimagined. Structure is going to be
built out everywhere, and we want to make sure that
we are the common networking substrate and we are the
common security and safety kind of provider across the board.
Speaker 11 (23:08):
So G.
Speaker 3 (23:09):
Two in an environment where we constantly are talking about
an uncertain environment because there's stuff coming at us even
today as we kind of continue to watch the negotiations
between US and Chinese officials over in London, how would
you describe demand the capex spend that you are seeing,
whether it's the hyperscalers, whether it's those folks building their
enterprise systems, like the different buckets that you play into.
Speaker 10 (23:29):
The demand signal is stronger than an ever. I've never
seen anything stronger on the demand signal side, because you've
got trillions of dollars that are going to be flowing
in for these data center build out capacities. So the
demand signal is very strong. It's actually also happening globally,
so it's not just happening in the US. You're starting
(23:50):
to see demand in the Middle East, You're starting to
see it in Europe, You're going to start to see
it in Asia. And one of the things that's important
for America is we want to make sure that American
technology are being utilized in all these data center buildouts
because that's good for America and that's good for the world. Frankly,
and so you know, Cisco and Nvidia and open AI
(24:10):
and others and all of our partners, I think AMD
it's extremely important that we all work together to make
sure that these kind of data center buildouts happen with
our technology.
Speaker 2 (24:21):
You know, you're you're shocking me with the just the
striking magnitude of these investments. It's what is what is
not being Where's money not being spent as a result,
as budgets get reallocated toward infrastructure, what's not getting money?
Speaker 9 (24:38):
I think what you find is the.
Speaker 10 (24:41):
In the short term, you actually have to take certain
amount of dollars from existing projects and move them towards AI.
And almost every company is doing that this and you know,
I'm going to take twenty percent out for my existing
projects move.
Speaker 9 (24:54):
Them towards AI.
Speaker 10 (24:56):
Over time, what you find is AI will get so
much productivity that twenty percent of the projects will get rehydrated.
Because if you think about like, for example, we're one
of the first partners with open AI on their codex project,
which is the autonomous software Engineer. It's no longer where
you just have an auto complete, where you can have an.
Speaker 9 (25:14):
Individual developer that gets productive.
Speaker 10 (25:16):
You can actually now tell an agent or a group
of agents, go solve a really hard problem for me
and come back to me in a couple of weeks,
and we'll be able to actually have a world that
we're living in in relatively short you know, kind of
time horizons where it will be able to solve that
problem and come back to you, and you'll still have
the human in the loop that will be able to
observe and they will be able to do things. But
(25:37):
imagine what that does for the constraint. We have twenty
seven thousand engineers. I've never felt more constrained in my
life about the ideas I have compared to the resources
I have to prosecute those ideas. And we will actually
get to a point where we can unlock those ideas
in a very different way.
Speaker 9 (25:53):
Right.
Speaker 2 (25:53):
I was just gonna say we could go on forever
with G two, but apparently his team is telling us
that you have to go speak speaking engage keeper. Oh,
he doesn't want to do it. He wants to hang
out with us.
Speaker 9 (26:05):
You guysn't too fun.
Speaker 2 (26:07):
Hey, we're going to get in trouble if we do that.
Speaker 4 (26:10):
Well, I mean I'm going to go go.
Speaker 3 (26:12):
I mean, I mean we're just kind of blown away
every day, like what we are learning about this and
how it's impacting our world. I mean, I don't know
six months from now, a year from like, how should
we be thinking about how dramatically this will impact everything?
Speaker 10 (26:25):
I think firstly, your imagination will be challenged quite a
bit because humans have a very hard time thinking exponentially
for a sustained period of time. And this curve is exponential.
And when it's exponential, it's not happening in a single dimension.
It's happening across multiple dimensions all at once. And so
if you think about it six months or twelve months
(26:46):
or eighteen months from now, no longer are you just
going to be thinking about this as a more efficient
way for getting an answer. But you will have companions
and sidekicks and a staff of people that are digital
workers that can get a job done that you would
have otherwise not had a time to do. And one
important area to talk about is a lot of people
worry about ISAI going to take my job? I actually
(27:08):
worry more about people that use AI really well. There's
a higher risk of them.
Speaker 9 (27:14):
Taking your job than AI taking your job noted, you know.
Speaker 10 (27:17):
And the other piece that I worry I also think
about is if you actually have there's no one that
I know that comes home every day and says, you
know what, I've gotten everything done on my checklist, right,
And so the reality is is when you there's eighty
percent of the work that we do probably doesn't get
checked off because we don't have time to do it.
(27:39):
Now AI agents will start doing that. And then the
final category that's the most exciting is it's AI will
be able to do things that we were not able
to do because it'll have original insights that don't exist
in the human corpors of knowledge. And that's the area
of AI that I think is the most underhyped.
Speaker 2 (27:55):
G Two we got to leave it there. Your crew
is about to come on set and you're away to go.
Speaker 4 (28:00):
And just where you know.
Speaker 3 (28:01):
I have a companion in Sidekick, but I'm ready for
my AI companion.
Speaker 2 (28:07):
Resident Product Officers, let's go here at Cisco Live twenty
twenty five.
Speaker 6 (28:12):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
Live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch US Live on YouTube.
Speaker 4 (28:26):
So let's get to one of our favorite guests.
Speaker 3 (28:28):
I gotta say when it comes to Cisco, She's come
on Bloomberg many times. She's definitely familiar to our regular
viewers and listeners. She's often traveling. She comes to New York.
Speaker 4 (28:37):
As we said, she stops by, but she's got this.
Speaker 3 (28:39):
Great vantage point on people and technology and how the
workplace is changing and so much more. Francaseudics is back
with US executive vice president and Chief People, Policy and.
Speaker 4 (28:49):
Purpose Officer at Cisco.
Speaker 3 (28:50):
She's also on the board of ADP and she joins
us here in San Diego.
Speaker 4 (28:54):
How are you good? How are you? It's great to
see you here. It's great to be here.
Speaker 3 (28:58):
I mean, we're just kind of blown away and just
you know, we're talking so much about AI, as you
would imagine, tell us a little bit more about what
the conversations you are having around work. We just talked
to G two and just you know, these concerns that
AI is going to replace all the jobs. But as
he made this point, it's those people who know how
to use AI, those are the people you're going to
(29:19):
have to be worried about because they're going to be
a lot more productive and have bigger roles in the workforce.
Speaker 11 (29:23):
So it's really interesting from a broader work perspective. There
are stats right now that are being released that tell
us we have a lot of work to do, but
similar to G two, I see.
Speaker 8 (29:33):
A tremendous amount offside.
Speaker 11 (29:35):
So Gallup actually put out a survey recently and they
said that seventy percent of US workers are not using
AI on their jobs today, and they said that fifty
percent do not feel prepared whatsoever for what is coming.
And what I think that means from a company perspective
is that we have to create these bottoms up and
(29:55):
these top down motions to really ensure that people can
start to experiment. Because what we've seen at Cisco is
when people start to play with the technology, they create
the use cases, they see some of the opportunities that
are there. The other thing that's interesting is that I
do believe we'll start to see more and more roles
consolidate and you'll see that the technology will support a
(30:18):
lot of the work, but people will have a broader
vantage point or a broader remit. Generally speaking, that's good
for employees, and so I think from an employer perspective,
we have an accountability to ensure that our people are
ready and that they're experimenting today.
Speaker 2 (30:33):
You know, I want to talk a little bit about
where we are in the history of this technology. Yeah,
because you've been at Cisco for around three decades at
this point. So if we think about where things were
in nineteen ninety five, it was like the dawn of
the World Wide Web. A lot of people had dial up.
That was the access that that was the access that
they had. Cisco was a completely different business. You've consistently
(30:55):
been at the company since then. Contextualize for us big
of a deal the AI era is.
Speaker 11 (31:03):
It's so huge, So listen to this. So I started
at Cisco in the contact center. I was answering first
line questions for our customers that called in.
Speaker 8 (31:11):
That role doesn't exist anymore.
Speaker 11 (31:14):
That role has been replaced by AI, and what we
know today is about one point six million of Cisco
customer cases are now solved leveraging AI, and the satisfaction
scores are incredibly high.
Speaker 8 (31:28):
What that means is.
Speaker 11 (31:29):
That those people that we're doing those frontline calls are
now at the next level. They're handling the more complicated issues.
What that also means is that if you're someone coming
out of college like I was, that entry level.
Speaker 8 (31:43):
Role doesn't exist.
Speaker 11 (31:44):
What that means is that we as companies have to
create more of a bridge now from someone coming into
the workforce to whatever that new entry level role is.
Speaker 8 (31:53):
And I think there will always be entry level roles.
Speaker 11 (31:56):
The other thing that I would say is the contact
center in particular is one of your best examples of
a use case that is just prevalent across industries. And
the reason for that knowledge management system clarity around how
calls are answered. It's something that is measured in every
single way. And so our challenge now is how do
(32:16):
you get unstructured work to behave like a contact center
if you will.
Speaker 2 (32:20):
So I understand the difference between and sort of the
example that you gave about jobs and how that's evolved.
But if you think about this in the context of
outside of Cisco and the idea that the Internet opened
up these opportunities for so many businesses to be built,
it is the promise of AI, in your view, bigger
(32:42):
than anything you've seen in.
Speaker 9 (32:43):
Your career or is it.
Speaker 2 (32:45):
Kind of the same as what you saw with fast
browsing and connectivity in the nineties.
Speaker 11 (32:50):
I think it's bigger because of the pace, and I
think what we're going to see is we're going to
see an intersection of the technology and all of the roles.
And what's unique now is that you actually have roles
coming together in meaningful ways. You have the ability for
us to scale even beyond what we did as we
step into the Internet era, and so I think it's
(33:12):
much much bigger.
Speaker 4 (33:13):
I'm curious about the macro issues.
Speaker 3 (33:15):
You're always so gracious and kind of talking about the
macro environment, and I'm just thinking about the US China
talks that are going on right now, fran And obviously
it involves things like rare earth minerals technology. These are
things that certainly play into your world.
Speaker 4 (33:27):
You know, how are.
Speaker 3 (33:28):
You guys thinking about that, How to make sure that Cisco,
whether it's their supply chains and so on and so forth,
are where they need to be.
Speaker 11 (33:37):
I think for all companies, but from a Cisco perspective,
what we're always thinking about is what are the scenarios
that we have to be thinking about in how our
customers consume, how our employees work. To your point, some
of the geopolitical issues that we are not in control
of whatsoever. And I think for us, having good people
(34:01):
on the ground that understand running those scenarios so that
we know how we're going to respond as a company,
and then being clear with what we control. I think
one of the best things that we can do is
provide stability to our customer base. And so what that
means is in an area like supply chain, we have
to have that redundancy so that we can pivot left
(34:23):
or right as we need to, and we've done a
lot of that over the last couple of decades.
Speaker 3 (34:27):
You talk scenarios, you know, this was an environment where
we were having earnings where companies were saying could be
this one or it could be so right, so great, good.
Speaker 4 (34:35):
And I'm just curious.
Speaker 3 (34:36):
Are there are there more scenarios that you have to
plan for in this environment more than usual or not necessarily?
Speaker 8 (34:42):
No, I think there are.
Speaker 11 (34:43):
I think you're responding to external pressures. I think the
tariff question is a big one for many of our
customers as well. I think you have this technology coming
in that's changing everything, and so when we look at AI,
what we're looking at is how did it intersect our portfolio,
How does it intersect the way in which we work,
(35:04):
and then how does it intersect the way.
Speaker 8 (35:06):
In which our people are working.
Speaker 11 (35:08):
And so you have all of these dynamics inside and
outside of the company that come together. And something that
I believe very strongly, and this is different from three
decades ago, is that you don't have an outside of
the company. Inside of the company, everything is blurred and
you have to respond.
Speaker 9 (35:22):
You know, we got we got it.
Speaker 2 (35:23):
We haven't spoken to you in a few months, and
I wanted to get an update from you on the
way that you think about DEI, the way you think
about ESG. This is all under your purview at Cisco.
DEI has I think it's fair to say for this
administration it's turned into essentially a swear word, and it's
something that they're rooting out of the federal government and
trying to root out of private companies as well. Has
(35:43):
your approach at Cisco changed at all?
Speaker 11 (35:47):
So at Cisco our purpose to power and inclusive future
for all, and that has really shaped us.
Speaker 8 (35:53):
It's guided us.
Speaker 11 (35:54):
It helps us to understand the way in which we
show up to external communities, which is this element of
how do we use our technology to include all? How
do we ensure that we can drive a level of
accessibility and connection. That part of our purpose absolutely stays true.
Speaker 3 (36:12):
Nothing changes despite everything going on from a purpose perspective
and how we show up to communities that we're showing
up in the same way.
Speaker 11 (36:20):
And I think everyone understands that the more that you
can help people connect via technology, they get access to education, healthcare.
I think Carol, that part of it is well understood.
I think as a company, and as we look at
our internal practices, the first thing that I would say
is you have to comply, of course, with any administration,
(36:40):
and that's within the US and outside of the US
as well, And so that's something that we're accustomed to doing.
What I would say that's different to him is that
we take programs that at one point we're a little
bit more custom to a particular group, and we've.
Speaker 8 (36:54):
Opened them up to the entire company.
Speaker 11 (36:56):
And what we realize is there's a lot of goodness
in those programs and we want every one to have
opportunity and to be successful.
Speaker 8 (37:03):
And so that's the approach that we've taken.
Speaker 2 (37:05):
Truly interesting, So you know, potentially, so it sounds like
the things that you've done, you've actually made it more inclusive.
Speaker 11 (37:10):
Yeah, we have, we have, and I think it's a
good moment to really assess what's working, what isn't working.
And we've done that and some of these programs are amazing,
and so why not make them more available.
Speaker 3 (37:23):
Is it fair to say that employees, your employee based
you guys are massive like that they want some of
these DEI initiatives that they do either.
Speaker 11 (37:31):
Yeah, I think there's two things going on. Our employees
and candidates that are looking at Cisco want to believe
that we have a set of values that are aligned
to theirs, and we see that all the time in
the interview process. People have read our purpose Report. They
know what we stand for. I would say from an
(37:51):
employee perspective. They want to know that we still care
and that we're still driving a level of inclusion and belonging,
and I think we absolutely are.
Speaker 3 (38:00):
Last question, I've met some of the senior executive women
at Cisco, and it seems like you guys really prioritize
that I look at yourself and others, but.
Speaker 4 (38:10):
We continue to have I think we've had this conversation.
Speaker 3 (38:13):
With you, why aren't there still more senior women in
C suite positions or SEE level positions?
Speaker 4 (38:19):
More broadly, why is it still such a struggle?
Speaker 5 (38:22):
You know?
Speaker 11 (38:22):
I think that for many companies, I think we do
a really good job of bringing people in from university,
and then I think there's a point where we lose women.
At Cisco, we see great representation at the executive level
and at the incoming levels, and so we have to
continue to push through every element. But what we see
(38:45):
and what the research tells us, is that people want
to see role models, and they want to be able
to look and see someone that tells them, hey, if
you're in this role, that means that I can be too.
And so I think we have to continue to work
on things like role modeling. I think we have to
work on mentorship for all employees. Sponsorship all of these
things I think create a better environment and provide career
(39:06):
goals and pathways as well.
Speaker 4 (39:08):
Got to be active about it. Let's write a doubt
about it. Well, you are definitely a role model. I
thank you. Great to check in with you again.
Speaker 3 (39:13):
Frank Crosuda's executive vice president and chief People, Policy and
Purpose Officer at Cisco, joining us here at Sisco Live
twenty twenty five.
Speaker 6 (39:21):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube
(39:41):
and always on the Bloomberg terminal.
Hosts And Creators
Tim Stenovec
Carol Massar
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