Matt Miller (2:24)

How do, what's the view out there in the marketplace, Craig, about how committed Tesla is to its core auto business vis a vis some of the other businesses that Tesla is involved in. That seems to have attracted Elon's real attention and the attention of the marketplace in general?

Craig Trudell (2:41)

Yeah, I mean, I would say, you know, if we were to sort of break down, you know, maybe use Grok, his chat bot, to break down how much he's talking about his, his humanoid robot, Optimus versus, you know, Tesla's sort of core business. I think it would be no contest. I mean, he does also talk quite a bit about Robo Taxis. And yet in terms of execution there, you know, we have vehicles in Austin and in the San Francisco Bay area that are operating still with people supervising up front. And, you know, yes, the company did do some testing toward the very end of the year, you know, some driverless testing, but, you know, that would put them years behind Waymo on that front. You've not seen them scale up a quote unquote, robo taxi business the way Waymo has now in many cities across.

Matt Miller (3:29)

The U.S. craig, we had a Bloomberg client writing in earlier with a tongue in cheek comment about how many robots Tesla has sold. But it's interesting, you know, the company is valued at one and a half trillion dollars, not because it sells 1.8 million cars a year, but because investors have faith in Elon Musk's, I guess, creativity and success in, in future endeavors like robots. What do we know about what else Tesla could do to make money?

Craig Trudell (3:59)

Yeah, I mean, I think that's a really good question and I guess I would put that more so, focus that more so on the question of Robo Taxis. And I think, you know, with Waymo, we know very little at this juncture about, you know, just how profitable Waymo's business is. I think we can, you know, make a pretty informed, you know, assumption that they're losing quite a bit of money. The company is, is regularly raising a lot of, of cash from, primarily from Alphabet and has not gone public. So we've not seen, you know, what, what sort of figures they have internally. But, you know, I think that's one of the things that's going to be interesting to watch play out in 2026 is, you know, everybody is very excited about Robo Taxis and for good reason. It's really neat to sit in a car with no one behind the wheel. The question I have is, of course, you know, how quickly can we scale that capability in a way that's actually generating money? And I think, you know, some people are willing to give Musk the benefit of the doubt, as you mentioned, and willing to also take him at his word that he can scale quicker, you know, sort of over a longer time period. But in terms of, you know, here and now, who actually has cars on the road that don't have drivers behind the human drivers behind the wheel? Waymo is ahead of Tesla and it's not at all close because we've not seen Tesla actually commercialize that.

Matt Miller (5:24)

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Bill Shufelt (5:58)

This is Tom Keene inviting you to join me for the Bloomberg Surveillance Podcast. It's about making you smarter. Each and every business day we bring you a recap of what happened overnight in Europe and Asia. The day's economic data and complete coverage of the US Market open. We cover stocks, bonds, commodities, currencies, even crypto. All the information you need to excel. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that with lengthy conversations with our expert guests, the smartest names in economics, finance, investment and international relations. We do all this live each and every weekday, then bring you the best analysis in our daily podcast. Search for Bloomberg surveillance on YouTube, Apple, Spotify or anywhere else you listen on the East Coast. Listen at lunch and on the west coast when you wake up. That's the Bloomberg Surveillance Podcast with me, Tom Keene, along with Paul Sweeney and Lisa Mateo. Subscribe today wherever you get your podcasts.

Hannah Elliott (7:06)

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's talk about Deep Seek. Yes, it is back in the news. Deep Seq is going to soon release a new AIM model that could upend the sector like it did just a year ago. The company just published a paper that outlines ways to develop AI that improves scalability while reducing the computational and energy demands of training the model. Or it's so it claims to. Let's bring in Bloomberg Tech co host Ed Ludlow, who's in San Francisco. Ed, is this going to do the same thing as last February when the market saw ructions, or are we sort of used to the fact now that other people can do AI too?

Ed Ludlow (7:53)

Yeah, it's certainly kind of a repeat of the format that Deep Sea is kind of use, where they publish a white paper. And the white paper or research note kind of explains that because of constraints on Chinese technology companies, principally a lack of access to the lead edge AI chips. They have to get clever from a computer science perspective on the architectures, how a model is weave together, how it is trained, the data it uses, etc. And again, they've just published a white paper that would suggest they found another way of doing that that as you pointed out, is computationally and sort of from an energy perspective, much more efficient. But it's often a precursor to the release of a wider model. So what we're waiting on is what most people refer to as Deep Sea R2, the kind of next large scale frontier model. And the expectation is that that will come in February or March and depending on how it performs and ranks in the tables, could potentially upend the kind of marketplace right now which includes competition with American Frontier Labs for models.

Matt Miller (8:56)

So we had that Deep Seek news again a year ago and it really upended the market.

Ed Ludlow (9:00)

Yeah.

Matt Miller (9:01)

Is it just me that I haven't really heard too much about Deep Seq since then? I mean, yeah, I don't know.

Ed Ludlow (9:06)

I mean, two things. The first is that Deep Seek has continued to work on smaller models with fewer parameters and it takes time to train very, very large models. But kind of what happened in the kind of ruption of February, March and April of last year in the financial markets is when Deep Seq started publishing its evidence and the performance of its models and what it took to train them, everyone was like, well huh, hold on a minute, it didn't cost you guys very much. It was a lot cheaper than what the American companies are doing and you didn't have access to all this technology that is propping up the entire market. Right. And so it kind of raised the question why are we, why are we so bullish on all of this in America's context? Like all of our evidence for this market rally to that point because remember like within video and the Mag 7, this was a multi year thing was because of all the spending and the performance of those chips. But the present day, the way that we compare the performance different models is peer review and performance tables and the kind of free, lower cost Chinese models are up there. And so that's why we're kind of bracing for R2 and what it might show us in terms of performance.

Hannah Elliott (10:20)

Ed, what do we know about what chips Deepseek is using? And wasn't there just a little bit of skepticism that maybe Deep Sea might be using some kind of Nvidia chip at one point?

Ed Ludlow (10:30)

Yeah, there have been media reports that Deep Seek and other Chinese firms were able to get access to the latest generation of Nvidia GPUs by acquiring them from data centers in permitted countries, disassembling those data centers and then essentially smuggling them through a third country. Go on to bloomberg.com or the terminal, read the very detailed reporting on that. There was also a lot of skepticism about that reporting because right now in video is severely supply constrained. Any demand that's out there accounts for all the chips they're ever going to make. And as one source put it to me, you don't just sort of see thousands of Blackwell chips go missing, such is the demand for them. So it was something that at the time Nvidia issued a statement straight away and said we don't see any evidence of sort of these missing chips that are being smuggled through different countries. But therein lies the point of why you're asking me about Deep Sea. And it's white paper. It's what China's technology companies are able to do without access to those chips that is the main focus.

Matt Miller (11:39)

Stay with us. More from Bloomberg Intelligence coming up after this. I'm Matt Miller.

Hannah Elliott (11:45)

And I'm Hannah Elliott inviting you to join us for the Bloomberg Hot Pursuit podcast.

Matt Miller (11:50)

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Hannah Elliott (11:56)

Lot more than just talk about cars, Matt. We actually get behind the wheel of.

Matt Miller (12:00)

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Hannah Elliott (12:03)

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Matt Miller (12:06)

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Hannah Elliott (12:16)

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Matt Miller (12:20)

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Hannah Elliott (12:30)

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Matt Miller (12:36)

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Hannah Elliott (12:39)

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Matt Miller (12:42)

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Hannah Elliott (12:46)

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app and wherever you get your podcasts or watch us live on YouTube from January to year round, moderation non alcoholic beer is booming. Bill Shufelt is the co founder and CEO of Athletic Brewing Company. I'm sure you've seen those cans in the stores or perhaps your local bar. It's one of the Nation's top non alcoholic beer brands. He joins us now in studio to talk about what's on tap for Boozeless Suds. So Bill, this is an insane growth story that you've just been telling me. So you started actually what, 10 years ago and now you're 10x or the market is 10x. Explain what you were just telling us.

Bill Shufelt (13:31)

For sure, it's been a really fun ride. We started the non alcoholic beer market basically had flatlined for 30 years before 10 years ago where we came in and like to think we reimagined both the product and the marketing of the category, taking it out of the penalty box into the mainstream with delicious flavors. And we've taken it as a category from about 100 million to passing a billion dollars in the US market this year. And we think that could continue to grow. We expect it 5x in the next 10 years with athletic being 25% of that market. Right now, athletic is about 18.4 share of the total category. The next biggest is about 14 and a half share and that's another 4 point drop to the next brand. Behind that, athletics also 52 share of the non alcoholic craft beer category which has well over 100 brands. So we're outselling the next 100 plus combined. And it's really meeting those that next generation of consumers where they're at.

Matt Miller (14:25)

What's been the response, competitive response from some of the big brewers, which I can't even know the names now, they've all merged into like one big entity I think for sure.

Bill Shufelt (14:34)

So as you've heard on the segment before too, over 40% of consumers are doing Dry January this year. Over 50% of consumers now view one or two drinks a day as unhealthy. And a record low number of Americans are also consuming alcohol on a weekly basis. So this is a huge growth opportunity for the adult beverage market and a lot of companies were late to that. But over the last five years, basically every major brand has entered that category with an alcoholic analog to their non alcoholic analog to their full strength version. And we really appreciate that support and grow in the category.

Hannah Elliott (15:10)

It's so funny to me because I didn't have an alcoholic beverage in my life until I was nearly 30, I think. And I wonder what makes somebody reach for a non alcoholic beer when there are so many other drinks that are already non alcoholic out there.

Bill Shufelt (15:24)

For sure it's so when we start athletic and I would try to get people to taste samples or buy one of our beers, getting people to cross that barrier was so hard seven or eight years ago. But I think the light bulb that goes on over and over again for people is that it is such a delicious meal pairing at a fraction of the calories as a full strength alcohol equivalent. For example, we were just talking about before I came in, how our athletic light is 25 calories, no sugar, light in carbs, but a full taste. That's like a perfect guilt free weeknight beer. And then we brought a ton of innovation to the market too. For example, we're now launching an excited lineup of non alcoholic brewed cocktails this January at select retailers like Target. And all these different fun flavored like.

Hannah Elliott (16:10)

What give us a foretaste.

Bill Shufelt (16:12)

Yeah. So we have off that athletic light lager. We have an athletic light lime and salt launching this year. And in a typical year, we launch almost 50 different styles of beers on our website, athleticbrewing.com where before athletic brewing, this category was a lager only category. So from day one, we've really blown the lid off what taste and availability can be in this category.

Matt Miller (16:33)

Who's a typical athletic drinker? Customer.

Bill Shufelt (16:37)

So when we came into the category, this category was typically a lapsed alcohol drinker. It was very male heavy. It was an older population generally. And since we've redefined the product and marketing of the category, we've seen that drift younger and younger every year. We think 45% of our consumers are below age 45. Very heavy in Gen Z consumers, really, as people have grown up in this digital generation where you have your work in your pocket at all times, everything in your life is filmed and recorded and on record. And people still like to drink, but then they like to zebra stripe and work in non alcoholic options.

Dakota Smith (17:13)

What?

Matt Miller (17:14)

Zebra stripe again? I heard that for. And I forgot it already.

Bill Shufelt (17:16)

Yeah, sorry, I jumped right over that. It's basically we. And this has been shocking to me, I hear from bartenders all the time that people order alcoholic drinks and non alcoholic alcohol.

Matt Miller (17:25)

Oh, okay, I got you.

Hannah Elliott (17:26)

Okay, that's a brilliant idea. You could put food in there too. That would actually be an even better idea. Curious. How do you do it? You have so many options and as you say, you're trying out different ones all the time. I mean, are you very non profitable or how does it work? That costs a lot of money.

Bill Shufelt (17:41)

Well, at the end of the day, in our retail lineup, we're very focused. We have a core group of about five beers which are very popular and highly awarded. We won 33 Taste Awards last year alone and have won about 185 Taste Awards since, you know, there's, there's been a plethora of entrants into this category, from major brewers to, there's been 10 celebrity brands with more on the way. And almost none of these companies make their own beer. Where Athletic has gone the other way. We invested 130 million into our own manufacturing, our brewing quality teams and ultimately consumers like to know they, they want to get the best products and like to know what's behind their products. And after that celebrity hype, they've really loved what they found in Athletic. And so we really try to stay focused in our retail lineup and bring people the best beers over and over again.

Matt Miller (18:31)

I got to put my investment backer hat back on. How do you capitalize your company? I'm always fascinated to see how these private companies, entrepreneurial companies, how they finance themselves.

Bill Shufelt (18:40)

Yeah, it's such an interesting, like I came from the financial world, it's such an interesting world these days between private and public capital. And we've been so fortunate to have great access to private capital, from angel investors to private equity investors like Alliance Consumer Growth and General Atlantic and an institutional investor in Kurg Dr. Pepper. And that's afforded us the opportunity over the past eight years to invest $130 million into our US manufacturing base. Non alcoholic breweries and tap rooms weren't a thing before Athletic in the country. We built the first one and since then we've built them that are 100 times the output of the original brewery on both coasts. And in that world we have found really good access to private, to capital in the private markets. But ultimately it is really exciting for us to think about potentially being a public company or running a long term private company.

Hannah Elliott (19:31)

Yeah, I want to ask you more about that, but first I have to say the marketing is brilliant because you're, you know, you're a non alcoholic brewery, but you're targeting athletes and people who go for hikes and, you know, serious mountaineers and dog lovers and outdoorsy people. I mean, it's just, it's amazing. So what is the trajectory that you see before going public? I mean, are you going to open breweries around the country? Are you going to have, you know, bars? Is that, is that something that can be profitable now to the bottom line or, you know, is it better to have people just subscribe and sort of have it as, you know, beer as a service, software as a service?

Bill Shufelt (20:06)

Yeah, well, in terms of our target customer, I basically built the target customer around my lifestyle because I was authentically living this as a busy professional, loved the outdoors. 70% of the population considers themselves an athlete. Even though you'll never find me on any podiums anywhere, I love being out there and participating. And so it was really about that health and wellness trend. And then yeah, beyond that, our awareness is still very low. It's about 25% nationally. So we have and our distribution is only about 39% with our top product where a lot of the major beer companies, even in our category, even though athletics the number one, have double our distribution. So we have a huge amount of awareness and distribution to go over the next five, 10 years. And that allows us we also are trying to open the aperture to who drinks beer where beer over the past 30 years had been marketing to smaller and smaller audiences. And so this January we're bringing plans to we're working with OpenTable with a big partnership to expand into the culinary world. Chefs and athletes and stuff.

Matt Miller (21:15)

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

Hannah Elliott (21:21)

I'm June Grosso inviting you to join me for the Bloomberg Law Podcast. Every weekday we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets. From corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast search for Bloomberg Law on YouTube, Apple, Spotify or anywhere else you listen. On the east coast, listen as you start your day and on the west coast, catch up in the evening. That's the Bloomberg Law Podcast with me, June Grosso. Subscribe today wherever you get your podcasts. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube for more on travel. Now let's bring in Dakota Smith, co founder and president of Hopper. Dakota, thank you so much for joining. How is business travel? Has it come back post pandemic to the extent that we would have liked to to come back.

Dakota Smith (22:50)

Yeah. Hi, nice, nice to meet you. The good news is travel is doing pretty well as an industry. It's mostly fully recovered since the pandemic. Business travel is finally reaching its pre pandemic levels and starting to grow. Leisure travel has been, you know it surpassed the pre pandemic levels probably in 2023. So travel, travel outlook is still strong. I mean, people are still spending on travel despite any lingering concerns in the greater economy. We just did a survey this year and travelers said they spent just as much as travel on the 2025 holiday season as they did in 2024, for example.

Matt Miller (23:27)

How are people spending? What are they doing? Is it still the experiences that people are looking for here?

Dakota Smith (23:35)

People are spending. I would say there's probably one trend that is shifting and has really accelerated post pandemic, which is people are using their credit card and loyalty programs more and more when they're booking travel. Obviously that is partially to offset the cost. Those things lower the cost. Our business is really growing around that. For instance, we power travel rewards and loyalty for probably about 10 banks around the world, including Capital One here in the U.S. other banks around the world, like Commonwealth bank of Australia, New bank in Brazil, the world's largest neobank. And we're building these like integrated travel rewards and loyalty experiences directly on the banking website or banking app. So when people are using their credit cards, they can earn and burn points and kind of access all of these great travel products, like some of which you were showing on your screen. And that's a trend that's just really accelerated something like 20%, 25% of online travel in the United States now is being booked directly through a credit card loyalty program. And that's just like much, much higher than it was maybe 10 years ago.

Hannah Elliott (24:42)

How much do the banks play into that? You mentioned banks in Brazil and outside the United States. But how much are customers booking their travels through banks in the U.S. you said 25% of travelers, but how would you increase that figure?

Dakota Smith (24:58)

Well, I think it's been growing year over year. It's the fastest growing segment of online travel. So online travel is growing about 5 to 6% year over year, which is about 2x the average GDP growth rate. And most of that growth is actually coming through this banking credit card loyalty segment. And there's some simple answers and reasons for that. Fundamentally, the banks are offering really compelling value propositions and rewards to customers that kind of make these experiences some of the best places to book travel. To go back to my Nubank example in Brazil, New bank is offering its customers 0% APR, free installment financing for up to 12 months for all trips booked in New Travel. That's very compelling. I think the average APR rate for installment financing in Brazil is 35% elsewhere. So that's one example. When you look At Capital One, if you have the Venture X card here in the United States, you can earn 10x points. When you book a hotel on capital and travel, that's functionally 10% back for your next trip. You know, that that makes a difference when travel is such a large category.

Matt Miller (26:06)

Dakota. I just, in my own household, I think this is, part of, this is generational. Like, the extent I go to is I have a Chase card that's branded with United because I'm captive to United here in Newark. Okay, so. So that's about it. My daughter's got 27 different scams going any which way. She's got it on spreadsheets about points here, points there. What she needs to do, is it a younger generation more aggressively, I guess, using points and trying to manage and capitalize on them?

Dakota Smith (26:38)

Short answer is yes. I mean, the statistics are pretty clear. Gen Z is the generation that uses loyalty programs and credit card programs to book travel at the highest clip of any generation by a lot.

Hannah Elliott (26:52)

Yes. How are they doing that? I mean, how do you keep track? And all these partner airlines and all these, you know, alliances between different airlines and so on. Does that happen in the hotel industry, too? And you know, who ultimately benefits from all of this?

Dakota Smith (27:06)

I think ultimately the consumer benefits because it's. The bank is functionally funding or offsetting the cost of their leisure trips. You know, the average person taking three or four trips per year, it's. It's over 10% of their total income. Humans are spending on travel. So anything to make that more affordable, I think, just benefits the consumer. It benefits the economy, benefits local regions who are receiving the tourism revenue and the tax revenue. And ultimately it benefits the suppliers, right, the airlines and hotels. The banks are making it easier for travelers to go to their hotel and to book a ticket on their airline. It is hard to keep track, but I think a lot of people spreadsheet, you know, can afford one or two premium credit cards. You know, there's a limit to how many of those you can have in your wallet. And, you know, just choose the best one and it's a, It's a great place to book.

Ed Ludlow (27:57)

Are they.

Matt Miller (27:58)

Are the travel, is the industry? Are they embracing this? How do they view it?

Bill Shufelt (28:05)

Is it.

Matt Miller (28:05)

Is it some way to grow their business?

Dakota Smith (28:08)

Yes, I think in the United States is furthest along of any country in the world. You've seen this for years and years, right? You can look at the earnings reports of the major airlines in the US And a huge percentage of their income and especially their profit is related to their loyalty program and selling the points to their co brand credit card issuing partners. So that's a fundamental part of the airline business that keeps it going, keeps it profitable. Hotels more and more, especially with the large chains, are doing those co brands and leaning into their points program too. So the interoperability between the airline and hotel points programs and the credit card programs is a huge part of that. And then I would say the US Is very far ahead. And then what we're seeing as in our business, we're doing a lot of global partnerships. We're seeing a lot of other countries have been, you know, a lot of companies in other countries have been tracking what these American credit card issuers are doing, what the American travel suppliers are doing. And they want to share some of that success too. So they're not as far ahead, but that's where we come in and we kind of can bring them the latest technology, the most innovative technology in the space and help them kind of achieve those results in their markets for the first time.

Hannah Elliott (29:22)

This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen in live each weekday 10am to noon eastern on bloomberg.com the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal.