Garry Kasparov / Geopolitical Analyst (2:37)

Yeah.

Bloomberg Intelligence Host / Interviewer (2:38)

Matthew joins us here. Bloomberg Montreal Bureau Chief Matthew, thanks so much for joining us. What's happening at Air Canada?

Matthew, Bloomberg Montreal Bureau Chief (2:47)

I think we have to go back a few years ago to understand what's going on. So in 2021, Michael Russo was CFO and then became in 2021, the CEO of Air Canada. He made a speech in front of business leaders in Montreal. Montreal is a bottom city, right? But within French speaking Quebec. It's the only territory essentially in North America where people still talk French and Quebecers wants to preserve that. And there are some laws in place to preserve it because there's a lot of pressure from, from English coming in and a lot of influence. Right. So after his speech, Michael Rousseau talks to reporters and some reporters are asking him, why did you deliver your speech only in English? Why not even a few words in French? And he essentially said that he's been able to live in Montreal for more than a decade without speaking French. He was proud of that. That sparked outrage. And over the years it was a constant criticism about him from French Canadians. French speaking Quebec. Then last Monday, he makes this video statement entirely in English. Like you said. He said bonjour and merci. That's high and thank you. Right. There were some captions in French at the bottom, but considering that one of the boat pilots killed was a French speaker. Antoine for. And you have a lot of employees working at Air Canada work are from Quebec. So it sparked outrage in the province because it was the last straw, essentially. Then you have Prime Minister Mark Carney coming in saying that Air Canada has a responsibility to always communicate in both languages, regardless of the situation. Air Canada is subject to the Official Languages act in Canada. There's a law in place. The two languages in Canada are French and English. So that's essentially what happened there. And you even have the national assembly of Quebec passing a motion last week asking for Michael Rousseau to resign. So that brought us essentially to today.

Bloomberg Intelligence Co-Host / Interviewer (4:52)

Matthew I looking at the Air Canada ticker on the Bloomberg terminal, if you go to the DC page, it gives you all the basic information. And what you see there is that Air Canada is based in Quebec, in Quebec City, St. Laurent, which I'm probably mispronouncing. So this is a company that's probably based in Quebec itself. Why was this not an issue from the get go? Why did he become CEO even with this language deficiency?

Matthew, Bloomberg Montreal Bureau Chief (5:18)

That's. That's a real good question. A lot of CEOs are appointed in Montreal. And with the promise to learn a little bit of French, Michael Rousseau said that he took more than 300 hours of classes in French. And today all he's able to say is bonjour and mercy. So a lot of Quebecers are just seeing that as a lack of consideration or even something like that's very condescending on his part regarding the French language. So I mean he was appointed with the promise probably that he that he would learn French. I mean, as a CEO, it did deliver at the beginning with Air Canada deleveraging the company from the COVID pandemic. Over the past few months, year or so, the company has underperformed global peers, but it delivered from, from a CEO point of view, if you want. But on the French language side, like it really failed here and he failed especially last week and today the company had to issue its notice to shareholders for the annual meeting on May 1. In the documents and the filings, you have the compensation of the CEO in 2025. So Michael Rousseau earned a compensation of $13.1 million Canadian dollars in 2025 of 5,6% from a year ago. So that would have added another layer into this debate. And it's our understanding that Arkana wanted to end this and there was especially a global search for a new CEO anyway because he was planning to retire. That search started in January, so probably that they just announced this sooner than expected and now is expected to retire at the end of the third quarter of this year, which is on September 30th.

Bloomberg Intelligence Co-Host / Interviewer (7:10)

Stay with us. More from Bloomberg Intelligence coming up after this.

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Bloomberg Intelligence Host / Interviewer (10:12)

Meta platforms down about 18% this month, putting them on pace for the worst performance since October 22nd. I think there's some legal risks in there, maybe some spending on artificial intelligence, I don't know. Mandeep Singh joins us here. He's global tech Research head for Bloomberg Intelligence. What's going on with Meta these days? Because it was a story that was working on cost cutting number one and number two, AI seemed to be a really viable work case to augment their advertising platforms. What's going on with the stock?

Mandeep Singh, Global Tech Research Head (10:44)

Yeah, I mean look, they have underperformed relative to the mag 7 peers and on top of that they had that addiction lawsuit that they lost along with Google. So from that perspective it could create that negative sentiment that I don't think is going away anytime soon simply because when you look at their free cash flow expectations for this year, I Mean, they're spending almost $135 billion in capex. That'll take them to almost, you know, negative free cash flow territory. And last year they had almost $45 billion in free cash flow. So look, when you have, you know, this much investment and people aren't even clear what the focus is on, yes they are building data centers, that's a real asset, but we know it's a depreciating asset. And when I look at their model relative to OpenAI, Google and Anthropic, they don't even have have a model.

Bloomberg Intelligence Host / Interviewer (11:47)

So they don't have a large language

Garry Kasparov / Geopolitical Analyst (11:49)

model of their own.

Mandeep Singh, Global Tech Research Head (11:50)

They have a large language model, but in the leaderboards it's nowhere. Okay, so from that perspective, like look at how well Claude has done, you know, in terms of coding agents and they're Claude Anthropic. Claude is almost adding billion dollars in revenue every week.

Bloomberg Intelligence Host / Interviewer (12:07)

How do we know that?

Mandeep Singh, Global Tech Research Head (12:08)

Well, there are some leak sources and when you look at, you know, the token usage, that's the one metric that everyone is tracking right now for these LLMs is how much is that token usage growing. And some of that can be reflected in the revenue run rates, others is tied to training these LLMs. But at the end of the day that's a real metric in terms of how your model is getting used. Meta doesn't even have a model that is being utilized externally. So the promise was Meta will use the LLMs within their own ecosystem and that will drive revenue. And so what saved Meta, otherwise the stock would have been down even more. Is their top line is still quite healthy. You know, they've guided to mid 20% top line growth but that will reduce in the back half because of tougher comps. So I think that's the challenge. And that lawsuit, I mean this has never happened in terms of Meta losing a lawsuit around their product being addictive and dangerous, harmful. And so we already know they are banned in Australia and in the EU there is a proposal to ban the app for under 16. So from that perspective, if you are losing that demographic, that is one of the highest using demographics for your platform, that becomes a challenge. And now there could be more lawsuits, you know, along the similar lines to the ones where they had, you know, a verdict go against them.

Bloomberg Intelligence Host / Interviewer (13:41)

So the first time, really one of the first times, I'm not saying the first time, one of the first times where some of these, the legal issues for a technology company are really material, potentially they are, because I mean, you asked, myself included, you asked everybody on the street. I spend too much time on my phone. If they have children, they will cite that I'm thinking as one of their top, top worries. Yeah, and, and I think that's a global situation. Any parent anywhere in the world would probably say that.

Mandeep Singh, Global Tech Research Head (14:10)

Yeah. And now the judge said it, it actually harmed in this case. So it's proven. I mean the million dollar fines are not that big. But suddenly if you have got 2,000 more lawsuits like that, then it all adds up.

Bloomberg Intelligence Host / Interviewer (14:24)

Now is this similar risk for a Google for. I don't know, I mean you could argue YouTube, you spend too much time on YouTube.

Mandeep Singh, Global Tech Research Head (14:32)

But in YouTube's case, the harm was more in terms of autoplay than the content or the filters. So in terms of the type of content, I think the verdict said that it was more harmful from the meta side compared to YouTube where it was more like, yes, it shouldn't be autoplaying content or things along those lines. Not, not about the type of content. But there is a very fine line. And I do agree, you know, YouTube and Instagram are similar in that regard. But we'll see if there are more lawsuits.

Bloomberg Intelligence Host / Interviewer (15:08)

All right, just real quick, are we going to get an IPO this year? Like is it Anthropic or is it

Mandeep Singh, Global Tech Research Head (15:14)

most likely it's going to be anthropic 4Q IPO and they really at the run rate that they are in. I mean everyone in the private market right now is queuing to get, you know, a small slice of that transaction which we are expecting.

Bloomberg Intelligence Host / Interviewer (15:34)

So Anthropic would be one. What would else this chat go?

Mandeep Singh, Global Tech Research Head (15:37)

Yeah, I mean if Anthropic is going public, I think right now OpenAI feels they're losing share to Anthropic given they had a head start. So from that perspective, I do think OpenAI will likely go public if Anthropic announces they're going public.

Bloomberg Intelligence Host / Interviewer (15:53)

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by

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Bloomberg Intelligence Host / Interviewer (18:55)

Let's get right to it. Ed Price joins us here in studio. He's a non resident senior fellow at NYU. Ed, we're day 31 into this war in Iran. I think if you ask 10 different people out there, they might give you 10 different reasons. What are our objectives for being there? Not sure they were clearly articulated. So that makes it maybe even more difficult to articulate how we get out of there. What's your view of how the war in Iran has developed over the past four weeks?

Garry Kasparov / Geopolitical Analyst (19:21)

Thanks, Paul. Let me first of all start by saying that I hope and pray our service personnel are safe. So I don't revel in this at all. I think that the initial strikes that we carried out in Iran were successful in the sense, like I said last time, they are our enemies and we killed them. And we can't forget that as a bottom line. I think you're right now to say, what is the second phase of this war? And it does look like there's a growing consensus that it's not being handled very well and possibly also a mistake. And you have people, august, people like Larry Fink, pointing to the price of oil, which does seem to be the. The correlation point, the master point. For those who are concerned, let me just paint a quick counterfactual. In February 2022, Russia attacked Ukraine. Imagine if China had gone off to Taiwan and Iran had gone after Israel on the same day. So I know that this war looks messy right now, but there is a counterfactual in which our enemies overwhelm us and we lose that war. I think that Russia and Iran are

Bloomberg Intelligence Co-Host / Interviewer (20:15)

losing theirs, but that didn't happen. And right now the US Is in a bit of a mess, some would say. And Americans are rightly questioning what the objective is at this point. To Paul's point, how. How does the US Resolve this in the end? What's. What does victory look like?

Garry Kasparov / Geopolitical Analyst (20:34)

So the obvious answer to that is the one that Americans don't want to hear, which is that there'll be an escalatory ladder in which the United States has to pour more and more resource, more and more blood and treasure. And that means boots on the ground, and that means regime change. That is the way that the regime would fall.

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Garry Kasparov / Geopolitical Analyst (20:53)

And that's the way the region would be reconfigured. I'm slightly stumbling over my words because it's a terrifying prospect even to think about that. But that is the way that this war ends very successfully. I would say, however, that it's not a binary between win and loss. If the United States and Israel have degraded the power of the Iranian regime, they're not as powerful a player in a future confrontation. That is a general war scenario.

Bloomberg Intelligence Host / Interviewer (21:16)

So could some people are suggesting that at some point President Trump will look at everything that's been accomplished militarily, which is substantial, claim victory and leave that

Garry Kasparov / Geopolitical Analyst (21:27)

part of the world.

Bloomberg Intelligence Host / Interviewer (21:28)

Is that a scenario you think is possible? And if so, under what time frame?

Garry Kasparov / Geopolitical Analyst (21:31)

Well, President Trump, I mean, we've spent years discussing his mind together, and it is another terrifying prospect. I'm not sure what he's thinking. I think that he could very well act like a wounded tiger at this point. He's an elderly gentleman. He's going to be out of power, if not office, in November. And so I think he's thinking, this is my last chance to make a splash, and he may very well move up that escalatory ladder simply through vanity. It's an ugly thing to say, but I think he might do that. That would be my bet. But again, he might get distracted by something else. I mean, Rubio was talking about Cuba, and Trump is always thinking about things like ballrooms. So there's another sort of ADHD scenario here where he just loses interest.

Bloomberg Intelligence Host / Interviewer (22:13)

Yep.

Bloomberg Intelligence Co-Host / Interviewer (22:14)

What about oil prices? We see oil prices surge and they're up, I think, 90% so far since the start of the war.

Bloomberg Intelligence Podcast Host (22:24)

Where.

Bloomberg Intelligence Co-Host / Interviewer (22:24)

How does this go? I mean, even if the US Decides to come up with a definition for victory and retreat in any way, or wind things down, and Trump says, we got what we wanted, if oil prices stay elevated because Iran controls the Strait of Hormuz, how does that shake out for not just the global economy, but for geopolitics, for who's.

Garry Kasparov / Geopolitical Analyst (22:43)

Who's got leverage, who doesn't bad for the economy? JP Morgan just released an excellent report which is kind of like a doomsday scenario if oil goes anywhere near 150, 180. But it's also bad for China. So we talk a lot about how this is good for Russia because their oil revenue is funding their war in Ukraine. I imagine that's true, at least in the short term. But China gets a lot of its oil, a lot of its energy out of that area. And so one scenario is that China decides, look, enough is enough, and communicates with the Americans to try and wind this thing up. It's also not in European interests. So I'm always cautious of what I think about as the financialization of geopolitics and strategy. Yes, the economists are right to warn us about the price of oil, but I think that's an independent variable. I think the most important thing is Western security. And at the end of the day, like I say, the Iranians have been at war with us for effectively 50 years, and now we're fighting back.

Bloomberg Intelligence Host / Interviewer (23:37)

So if the US if President Trump were to claim victory and cease operation, is it a fair assumption that Israel will follow our lead?

Garry Kasparov / Geopolitical Analyst (23:47)

I have absolutely no idea. Yeah, I don't think Israel follows anybody's marching orders. If anything, we followed theirs to some extent in the timing and nature of this operation. I don't think that's necessarily a bad thing because Israel is a foundational ally of the United States and of the west and is effectively fighting people in that region that would otherwise be in Europe or in the United States. It's that simple. But I am not an analyst of Israel and I would defy anyone who claims they are to to guess at the next move. I mean, look at the pager thing. Nobody saw that kind of behavior coming, so no idea.

Bloomberg Intelligence Co-Host / Interviewer (24:23)

What are you thinking? How are you preparing yourself, bracing yourself for what could come? What's on your mind? As we, as we enter into the second month of this war,

Garry Kasparov / Geopolitical Analyst (24:34)

we are struggling to describe World War Three. Garry Kasparov calls it World War four because the Russians think of World War three has been the Cold War. I've called it the Central War. Ukraine and Iran is one war. But this is a global conflict. It only gets worse. It only gets bigger. And that's why, with that very zoomed out lens, I look at what's going on in Iran and think, on balance, this is the thing to do. Again, I repeat myself. If we had waited, if we had just sat in that boiling water like a frog and waited for a much more coordinated attack through these three powers, we could have been overwhelmed. Our morale could have been broken. All credit to the President. I'm a massive critic of his, but he is crazy enough to see a bad guy and do something about it.

Bloomberg Intelligence Host / Interviewer (25:19)

So again, what are the Arabs, first of all, allies around the world? What are they saying? Do you have any sense? They're saying, okay, we're really getting hurt by this energy situation more than you United States, because you're net exporter of oil. Do you think that pressure has any bearing at all?

Garry Kasparov / Geopolitical Analyst (25:35)

I don't think that the president is subject to any pressure of any kind. But the Germans are seriously rearming and they're talking about a war with Russia in the near future.

Bloomberg Intelligence Podcast Host (25:44)

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