Bloomberg Surveillance TV: July 15th, 2026

Summary

Podcast Summary: Bloomberg Surveillance TV – July 15, 2026

Episode Overview

In this episode of Bloomberg Surveillance TV, hosts Jonathan Ferro, Lisa Abramowicz, and Annmarie Hordern dive into the current state of financial markets, with a special focus on a record-breaking earnings season, the persistent strength of the S&P 500, and the drivers behind profits and valuations. The discussion spans from the impact of AI and capital expenditure (CapEx) to Federal Reserve policy, macro vs. micro market forces, and the political and labor ramifications of the AI boom. The episode features major interviews: Steve Chevron (Federated), Dermot McDonough (BNY CFO), and former U.S. Commerce Secretary Gina Raimondo, now leading Raise Us. The dialogue is rich in insight, connecting investor sentiment, corporate strategy, and national economic choices.

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Key Discussion Points & Insights

1. Earnings Season and Market Performance

(02:10–09:32)

• Earnings Growth: Steve Chevron notes S&P 500 earnings are expected to rise 22% YoY, potentially making this the strongest quarter since Q4 2021. Tech and energy are key drivers, but gains are broad-based across 10 of 11 sectors.
  • “What we're seeing is margin expansion at a rate equal to or better than any other period we've seen in our careers.” – Steve Chevron (02:52)
• Market Reaction: Ferro points out that beats aren’t as rewarded, but misses are severely punished—a sign the market is re-rating stocks based more on forward prospects and structural positioning than on simple earnings beats.
• AI and Sectoral Risks: Chevron views the current market division as being between “AI winners and losers.” Companies funding expansion via CapEx remain robust, especially in chip manufacturing, with CapEx demand showing no sign of peaking.

2. Micro vs. Macro Forces & The Fed’s Role

(04:53–08:03)

• Dual Dynamics: Lisa Abramowicz emphasizes the “incredible complexity” of the current market, where micro factors (individual earnings) and macro events (CPI and Fed policy) interact constantly.
• Fed Communication: Chevron recalls Alan Greenspan’s cryptic style, predicting Chair Kevin Marsh will similarly avoid clear guidance, aiming to reduce market dependency on the Fed. Rate hikes are deemed unlikely unless macro conditions worsen.
  • “He's trying to break the market's dependency on being spoon-fed Fed guidance.” – Steve Chevron (05:24)
• Interest Rate Impact: Most S&P earnings growth isn’t from rate-sensitive companies. Rates continue to pressure middle- and lower-income Americans and small businesses, while large-cap tech and industrials are insulated due to strong balance sheets.
  • “The companies that are spending on chips have more money than the Lord himself.” – Steve Chevron (06:49)

3. Market Valuations & S&P 500 Targets

(08:30–09:32)

• Multiples Rising: As margins rise, so does the market’s willingness to pay higher multiples. Chevron puts current fair value between 20x and 22x earnings, up from historic norms.
  • “If you look at where margins have gone, so too has the multiple followed.” – Steve Chevron (08:34)
• Bullish S&P Outlook: Chevron projects an S&P 500 level of 9,000 by the end of next year, considering it consistent with average equity returns, thanks to sustained CapEx and infrastructure buildout.

4. BNY Mellon’s Record Results & Corporate Innovation

(12:14–18:59)

• BNY’s Transformation: CFO Dermot McDonough highlights consecutive record quarters and unprecedented $5.7 billion in net revenue. The firm’s resilience and adaptation under CEO Robin Vince are credited for the turnaround.
  • “We feel like the firm is humming at the moment … we feel like we've more white space to go and more opportunity.” – Dermot McDonough (12:14)
• Revenue Guidance & Confidence: BNY upgrades its revenue growth outlook to 10–11% YoY, citing a strong backlog, new client “logos,” and strategic investment.
  • “We're making that 1% better at the firm every day … that compounded over time is going to give us the confidence.” – Dermot McDonough (14:51)
• Expense Management & Tech Investments: Operating expenses are up due to revenue-tied costs and heavy ongoing investment ($0.5B in recent years) in technology and new product creation, balanced by efficiency gains.
• AI Adoption: BNY’s proprietary platform “Eliza” is widely adopted within the firm, driving productivity and broad skills upgrades among its global workforce.
  • “AI for everyone, for everywhere, for everything.” – Dermot McDonough (17:46)

5. Political Pushback & Social Transition in AI Era

(19:42–26:13)

• Data Center Backlash: New York's moratorium on new Hyperscaler data centers highlights the growing political tension over the physical and energy impact of AI infrastructure. Data centers have increased grid supply costs by over 60%.
• Labor and Policy Response: Gina Raimondo, now heading Raise Us, describes a looming gap between technological advancement and workforce adaptation. She advocates for a “grand bargain” to ensure AI’s benefits are broadly shared, with creative public/private solutions to prevent economic and social destabilization.
  • “Even if America has the best chips, the best models … but doesn’t have an intentional plan to manage this transition and falls into a period of very high unemployment, we will lose the race.” – Gina Raimondo (20:14)
• Balancing Tech Leadership vs. Social Costs: Raimondo warns against reckless acceleration in AI without regard for worker security, urging for policies to prevent mass unemployment and public backlash.
  • “If we wake up in a couple of years with millions or tens of millions Americans put out of work because of AI, we will lose the global AI race because there will be massive regulatory backlash.” – Gina Raimondo (24:32)

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Notable Quotes & Memorable Moments

• “What we're seeing is margin expansion at a rate equal to or better than any other period we've seen in our careers. That's the big story. That's what's driving markets higher.” – Steve Chevron, Federated (02:52)
• “The companies that are spending on chips have more money than the Lord himself. They don't need to borrow at the federal funds rate.” – Steve Chevron (06:49)
• “If you look at where margins have gone, so too has the multiple followed.” – Steve Chevron (08:34)
• “We're making that 1% better at the firm every day … and that compounded over a long period of time is going to give us the confidence that we can deliver.” – Dermot McDonough, BNY Mellon CFO (14:51)
• “AI for everyone, for everywhere, for everything.” – Dermot McDonough (17:46)
• “Even if America has the best chips, the best models … but doesn't have an intentional plan to manage this transition and falls into a period of very high unemployment, we will lose the race.” – Gina Raimondo, former Commerce Secretary (20:14)
• “No one is happier than the president of China that we are slowing down data center construction.” – Gina Raimondo (21:38)
• “The government owning the means of production is, you know, the definition of socialism. I think it creates … potential for corruption.” – Gina Raimondo (23:08)
• “If we as a nation put our blinders on and if every company just moves forward at pace to implement AI to increase profits without a people strategy … we will lose the global AI race.” – Gina Raimondo (24:32)

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Timestamps for Important Segments

| Timestamp | Segment Description | |-----------|---------------------| | 02:10 | Start of market discussion – earnings and risk | | 02:52 | Steve Chevron on record earnings growth | | 03:38 | Market reaction: beats vs. misses | | 04:53 | Micro vs. macro: CPI, Fed, and market drivers | | 05:24 | Steve Chevron on Fed policy and guidance shift | | 06:49 | Breakdown of sectoral earnings and interest rate impact | | 08:30 | Market valuations and S&P 500 target | | 09:21 | Steve Chevron’s S&P 500 9,000 projection | | 12:14 | BNY Mellon CFO Dermot McDonough interview starts | | 13:28 | Record assets under custody at BNY | | 14:31 | Revenue guidance and growth drivers | | 16:10 | Cost discipline vs. investment at BNY | | 17:46 | AI adoption and impact at BNY | | 19:42 | Political tensions: U.S. data center moratorium | | 20:14 | Gina Raimondo on the mission of Raise Us and AI's labor impact | | 21:38 | Raimondo reacts to NY's data center pause | | 23:08 | Industrial policy and government stakes in AI companies | | 24:32 | Consequences of neglecting workers in the AI transition |

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Conclusion

This episode offers a comprehensive look at how financial markets are navigating a period of extraordinary earnings, supported by margin expansion in tech and industrials, amidst a backdrop of evolving Fed communication, major AI-driven CapEx, and rising political scrutiny over AI’s socioeconomic effects. Notably, executives see further upside in markets, while policymakers warn of social risk unless AI adoption is matched with robust support for American workers. The guests present a balanced, forward-thinking perspective, making this essential listening for anyone tracking the intersection of Wall Street, technology, and policy in the AI era.

Transcript

[IBM Representative]

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[Bloomberg Audio Studios Announcer]

Bloomberg Audio Studios Podcasts Radio News.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferro along with Lisa Abramowicz and Annmarie Horton. Join us each day for insight from the best in markets, economics and geopolitics. From our global headquarters in New York City, we are live on Bloomberg Television weekday mornings from 6 to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business App. We begin this hour. Stocks pushing higher heading into earnings from Morgan Stanley and bny, Steve Chevron of federated writing. Despite all of the headline risk and volatility, the relentless march of earnings growth continues to drive the market higher. Steve joins us now for more. Steve, good morning. Good to see you. How high is that earnings bar going into earnings season?

[IBM Representative]

It's the highest in a while. I mean expectations are that earnings are going to grow 22% on a year over year basis. That would be the strongest quarter since Q4 of 2021. Coming right out of COVID we generally beat 5 to 8%. And so, you know, is it impossible to see a 30% year over year earnings growth number? I think it is. I don't know. It's likely, but it's possible. And it's broad based. I mean certainly tech and energy are playing a big part here, but 10 of the 11 sectors are likely to see positive growth. Health care is the only. It's not joining the party. What we're seeing is margin expansion at a rate equal to or better than any other period we've seen in our careers. I can say that safely for all of us around the table. That's the big story. That's what's driving markets higher.

[Jonathan Ferro]

The story is great, it just depends how well priced it is right now. I know it's really, really early days, but it was touch and go just yesterday morning where it felt like the beats weren't really being rewarded but the misses were being absolutely obliterated. Those stocks got punished. IBM, a great example of that. Is that an early lesson or is it too prem?

[IBM Representative]

I don't think it's just about beats and misses. I think one of the things that's happening is that the nature of risk is changing. It used to be that it was a growth or a value story or a factor story. It's who are AI winners and losers right now and you're funding your capex by not spending on mainframes. And I think as the market looks at that they're asking well, is this something that's going to continue for an extended period of time? Because you can't really start to ask if AI Capex is going to peak until the hyperscalers stop raising capital to increase even more on the CapEx side. So when you look at things like the chip trade, I think they have room to go because the demand continues to outstrip. I also think that it's going to get more volatile because the first leg of this was earnings moving higher. You could see these chip stocks and you can see their earnings jumping. Now the question the market's wrestling with is via long term contracts and the sustainability of this play should the multiple revalue. And any time you're in a multiple revaluation story, it tends to be a little bit more volatile.

[Lisa Abramowicz]

This has been an incredibly complicated year because it's both a micro story and a macro story. On the micro level, yesterday when we got the earnings reports we did see pretty tremendous beats. Then we saw some of them with pretty paltry gains. Goldman Sachs is a perfect example. As the session grew older, those shares gained more and more. Yes, it was the commentary, but also it was this idea that disinflationary print on CPI would give the Fed more room not to hike rates. How much is this a rate hiking story? As much as it is a micro story and a story of AI.

[IBM Representative]

So if I were to rank them in priority order, I think the big story is earnings. That's really the underpinning of what's going on here. I think as it relates to the Fed. I agree with that survey. I think what you can misread from Chairman Marsh is I don't think he's actually being hawkish or pivoting in a hawkish direction. I think what we're doing is we're going back to a different kind of Fed guidance and that is I'm going to be staunch in my defense of price stability in my comments and I'm not going to tell you what I'm going to do. I remember being a young analyst on Wall street once and hearing Greenspan speak and he was about to do an interview and he said please don't ask me about monetary policy. I might be forced to launch a 30 minute answer where I tell you nothing. And I think that that's what you're going to see from Horse today in front of the Senate. I think he's trying to break the market's dependency on being spoon Fed Fed guidance. And I think that that can be misinterpreted by some as hawkish. I think what Wall street is looking at is just as it would have been ridiculous to cut rates in the face of rising oil prices earlier this year, it's equally ridiculous to really be considering hiking rates until we see how all this plays out.

[Lisa Abramowicz]

Putting aside Kevin Wash what his actual decision of what he's going to do is, it seems like the longer they remain on hold, the more the punch bowl is available to all the investors on Wall street, the more you can get these earnings that continue to outperform in a massive way from the big banks. Why is that not how you see it essentially, yeah, because I think when

[IBM Representative]

you look at the bulk of this earnings growth, it's not coming from rate sensitive companies. Right. It's not coming from smaller cap companies. It's even the, even the banks, while their numbers are good and they were terrific and very good for the banks, they're not really driving the kind of 30% year over year growth that's really coming from tech, that's really coming from places like material, that's really coming from places like industrials. The companies that are spending on chips have more money than the Lord himself. They don't need to borrow at the federal funds rate. And so I think that, that earnings growth is in a lot of ways at this point point really independent of rates. What you see though is that there's large swaths of the economy, middle income Americans, lower income Americans, smaller businesses that do care about rates and they've been under pressure for three or four years. And look, we can quibble about this, but the inflation rates 2.6% and the federal funds rate is 3.75%. That is, those are real rates that are high relative to history. And I think they probably don't need to be be there. We just need to get through some of this noise for that to become apparent.

[Annmarie Horton]

Do you think it's that cohort that's being affected by those higher rates that's going to hold the Fed back from having a potential hike?

[IBM Representative]

Look, yeah, I think that's right because I think what you would do by hiking rates is punish those that are already being punished. You're not going to slow down a capex spend which is pushing up memory prices. You're not going to slow down the high end consumer where higher rates mean more money from their, you know, their kind of money market account or their savings and they're, they all have fixed rate 30 or 3% mortgages. So I think it'd be counterproductive quite frankly.

[Jonathan Ferro]

Steve, you alluded to it. Do you think the multiple is going to go up?

[IBM Representative]

So that's been the thing that I think we've gotten right over the last couple of years is that if you're in an environment where margins are growing and the S and P is getting more profitable because of mix shift because of more subscription based models, then it's unreasonable to think that the multiple doesn't follow. And that's really been correct. If you look at where margins have gone, so too has the multiple followed. And until that stops. I think that's right. So what used to be a kind of 16 times fair value, we think is somewhere right now between 20 and 22. That doesn't mean that that lasts forever. But until these margins stop going higher, there's really no reason to think that the market would pay less for a

[Jonathan Ferro]

higher Investors right now obsessed with potential downside. What I'm hearing from you is potential upside. What kind of upside are you thinking about?

[IBM Representative]

So we're at 9,000 by the end of next year on the S and P. We think that that's, if you look at what that really represents, Sounds

[Jonathan Ferro]

like a big number, sounds like a massive number.

[IBM Representative]

It does, but it's, it's, it's a year and a half of average equity returns. You know, kind of high, single digit, low, double digit. It returns. That's on average what the S and P does. But we think that that's the direction to travel. The capex continues to be there, the bottlenecks continue to be there. The pricing power continues to be there. This is the largest infrastructure build since the railroads and the capacity that can come online that would derail this. This, these are hard assets. This isn't like a software upgrade. It's three to five years to build that chip capacity that then makes these prices go the other way. So we think that this has legs.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

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[Jonathan Ferro]

The big banks in focus. First up, Morgan Stanley Stanley raising its price target on JP Morgan, citing better than expected guidance for net interest income. The second call from Barclays raising its price target on Goldman, highlighting better than expected trading and investment banking fees. And finally, Wells Fargo raising its price target On B of A citing strong underlying financial trends. That stock is up again this morning. We're higher 5.5%. Let's stick with our top story. Wall street delivering a blowout earnings season. America's oldest bank, bny, adding to those results, posting back to back quarters of record revenue and stock sales. Joining us now to discuss is the BNY CFO, Dermot McDonough. Welcome to the program, buddy. It's good to see you. Record performance in Q1 again in Q2. What's behind the activity? Dharma and the question, I think that applies to your bank and so many others this morning is can this continue?

[Dermot McDonough]

Thanks for having me, Jonathan, and great to be with you. When I was getting ready for the show this morning, I wasn't too sure whether to put the tie on or put the England shirt on. So I put the tie on. But hopefully you'll bring it home today and enjoy the match this afternoon. Listen, be an why today. Great results where we're really pleased with the performance. We feel like the firm is humming at the moment. We've built the company for durability and to take advantage of opportunities like this that the market has presented over, over the last quarter. The US Economy is strong. We continue to be positive on the US Economy. There's a lot to be optimistic about in terms of what's happening. Full employment, the yield curve is behaving well. Flows are strong. And when you have a company like ours who has built a broad set of durable businesses and has been in this for a long time with 20% of the world's investable assets flowing through your pipes every day, this shows up in kind of record net revenues which were just posting this morning of $5.7 billion. So as a company, we're very pleased. Please. But we, we feel, we feel like we've more white space to go and more opportunity and we're going to keep pushing on into the second half of

[Jonathan Ferro]

the year and record assets under custody as well, north of 60 trillion. That's a record for the firm as well. You talked about it. You just alluded to it there. Help us draw a distinction between the backdrop and execution, the environment and how the bank actually performed what's happening there.

[Dermot McDonough]

So look, we started on this journey four years ago and I can, I can say confidently under Robin's leadership that BNY today is a materially different company than it was a few short years ago. And a couple of, I give you a couple of examples of that. We will talk this morning about this being our 14th quarter of consecutive year on year sales growth. This, this year alone first half, we've had two record sales quarters. Our mandates are growing in size. 10% of our sales this year have been with new logos. So that points to the fact that clients are seeing what we're doing. They see the reimagination of the firm. They want to partner with us more and in many different ways. And that's showing up in the numbers.

[Lisa Abramowicz]

One thing that we saw was a sense of a real upgrade in terms of full year revenue guidance that you put up about 10 to 11% year over year versus the 5% previously. What gives you confidence heading into the second half that the momentum can continue to the degree that we saw earlier this year.

[Dermot McDonough]

So look, I live and breathe BNY. I see the 47,000 people around the world working together as one, delivering for clients and that results in strong pipeline, strong backlog. We're a better firm than today than we were a year ago. And so look, I think four years ago, if we had this backdrop that we're experiencing over the last quarter, we wouldn't have performed as well as we have this quarter. So we're making that 1% better at the firm every day. And that compounded over a long period of time is going to give us like the confidence that we can deliver for our shareholders, for our clients and for our employees over a long period of time. So we're very bullish. The US Economy, we're very bullish. B and why on our strategy, we feel like it's working and we kind of feel like that we have a lot of opportunity ahead of us. There's no shortage of work to do to make this company better.

[Lisa Abramowicz]

One thing that we've seen pretty much across all the banks is that expenses came in heavier than a lot of people had expected. I wonder how much of this is structural, that there is a sense that everything is getting more expensive, whether it's the person, personnel that potentially can drive the change in the performance as well as some of the technological advancements that you need to be investing in.

[Dermot McDonough]

So the way look, I obsess about expenses every day, as you would imagine me, to do the expense growth that we've seen this quarter and we updated our guide for the full year to 6 to 7%. It's largely revenue related plus investments. Over the last three years, we've roughly invested about half a billion dollars in the firm and strategic growth initiatives. And that's largely been offset by our efficiency and transition to the platform operating model. So you can see that the investments that we've made over the last three years, you see that proof in today's results. And we're going to continue to invest in a thoughtful and prudent manner and that will deliver durable results over the long term. I'll say this on the call today. We've developed new products, whether it's buy side trading, collateral one borrow plus products that weren't that meaningful to the overall revenue pie a couple of years ago are now delivering meaningful contributions to the revenue mix. So BNY is innovating as well and partnering with clients and stitching the firm together to deliver integrated solutions that we believe will allow us to grow revenue in the future.

[Jonathan Ferro]

I think, to be fair, fair to you at 10 consecutive quarters of positive operating leverage speaks to some of the things you just said, that that balance between cost discipline and investment. When it comes to investment, the focus right now is firmly on AI. Some companies seem to be rationing spending right now. What comes out in the release from you and the team this morning is that your spend in the investment you've made on AI is translating into real business impact. Can you share with us where specifically and how this is trending?

[Dermot McDonough]

So look, we talked a lot about and we had a slide in our disclosure in Q1 about what we're doing and I like in the context of BNY and a $4 billion engineering budget, our investment in AI is modest in the context of the overall budget we've got, we've got a good strategy at bmi. We're very proud of it. We've been at it right since the start, since the launch of ChatGPT. And we're very proud of the platform that we've built, Eliza. It's LLM agnostic. And so we feel like we have the right structure in place. We've had broad adoption with our people around the firm. We've upskilled people. Pretty much 100% of people at BMI now know how to use AI and are doing it in their daily work. And we think about enterprise productivity and individual productivity. And Robin says this lots of times, AI for everyone, for everywhere, for everything. And it's all about creating capacity and productivity so that we can allow the firm to grow and use AI to enable that. So we're AI optimists at bny. We believe it can upskill our people, allow them to do more interesting work and at the same time partner with clients to grow the firm.

[Jonathan Ferro]

Stay with us. More Bloomberg surveillance coming up after this.

[Lisa Abramowicz]

The Bloomberg Sustainable Business Summit returns to Singapore on July 22, our 5th annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience and driving a multi speed energy transition across Asia's diverse markets. Join us for solutions driven discussions and networking opportunities. Thank you to our summit advisor, Bangkok Bank. Learn more at bloomberg live.com/sbs-singapore.

[Jonathan Ferro]

The Build out growing as a political flashpoint New York State leading the pushback, becoming the first in the nation to issue a moratorium on new HyperScaler data centers. PJM, the largest grid operator in the country, saying data centers have increased supply costs by more than 60%. The former U.S. commerce Secretary, General Raimondo is leading Raise Us, a nonpartisan organization designed to help the American labor force adapt to AI. The Secretary joins us now for more. Madam Secretary, welcome to the program. Let's just start the conversation with the kind of work you're doing and what we need to know this morning.

[Bloomberg Audio Studios Announcer]

Good morning. Good morning. So Raise Us is the new organization that I am leading. And our mission is very simple. You know, we want the US to lead the global AI competition, but to have a strategy so that every American worker gets brought along. And right now we're not headed down that path. And it's something I'm deeply worried about. We have extremely outdated infrastructure, social insurance, support for workers, incentives for companies to retrain and redeploy instead of just laying people off. And so I think it's time that we get to work. We're working with governors of both parties. This is a nonpartisan, nonpolitical effort with companies and just trying to find some creative, innovative solutions. Because I will tell you, one of my greatest worries is even if America has the best chips, the best models, the most data centers, but doesn't have an intentional plan to manage this transition and falls into a period of very high unemployment, we will lose the race because that will be too destabilizing.

[Annmarie Horton]

What's your reaction, though, to what New York Governor Kathy Hochul is doing in terms of the moratorium? Because this potentially can slow down how quickly the US can advance in the AI space. Right.

[Bloomberg Audio Studios Announcer]

So I think this is a perfect example of what we're trying to do, which is to say Americans are worried, right? They're worried about when, when the average American hears AI, what they hear is, I'm going to lose my job, my electricity prices are going up, my kids won't have a job, I just spent money for college. Those are real legitimate, valid anxieties and we have to find solutions to address them. So while I don't think, like no one is happier than the president of China that we are slowing down data center construction. That being said, it's not okay if people's electricity bills are going up or people's water bills are going up or people's economic security is going down because of, you know, AI companies. So we must find a way to do both. Steam ahead with data centers and technology and make sure, you know, these companies pay their fair share so other folks, electricity bills don't go up and people have frankly, a job, a meaningful job in an economy.

[Annmarie Horton]

You recently wrote an opinion piece where you said, what we need is a new grand bargain between the public and private sectors when it comes to AI. What do you make of the Trump administration looking at taking equity stakes, another version of industrial policy that some of which started under the Biden administration.

[Bloomberg Audio Studios Announcer]

Yes. So listen, I do think it is a good idea for the American people and the American government to share in the extreme profit and commercial benefit of AI. That being said, I personally have always been a bit of a critic on the government taking big equity shares of companies. You know, I'm still a believer in capitalism, however many flaws it has right now in the way it's playing out in America. And I just, you know, the government owning the means of production is, you know, the definition of socialism. I think it creates a lot of problem potential for corruption. So I think the intention is a good intention. Personally, I just get very nervous if we're stepping down a path of like a state owned enterprise, etc. So I, I'd like to find another way.

[Lisa Abramowicz]

How do you balance the idea of trying to create some sort of pact with the U.S. worker, with the U.S. average citizen, while also maintaining a U.S. edge versus China. Right. I mean, do you want to sort of create this sense that there is isolation between the two stacks, that I just wonder what the ultimate goal is, what the approach you're hearing from some of the folks you're speaking with.

[Bloomberg Audio Studios Announcer]

You know, I think if you talk to the tech companies in AI, many of whom are partners with us and raise us, they feel that they're in a global arms race to, you know, get ahead of each other and also get ahead of China and other technologies. And I, I understand that, but I will say this. If we as a nation put our blinders on and if every company just moves forward at pace to implement AI to increase profits without a people strategy, and if we wake up in a couple of years with millions or tens of millions Americans put out of work because of AI, we will lose the global air race because there will be massive regulatory backlash. It will be massively destabilizing to our economy. It'll be recessionary. It'll be massively destabilizing for our politics. So what I'm trying to say to business leaders, to governors, to Congress, to everyone in America is let's get together and find solutions. Let us be intentional about how we transition to an economy, because quite frankly, every American does deserves to see themselves productive and having a good job in that economy. And until we convince the people of America that there's a good future for them in an economy, you're going to continue to see what you what you just asked me about moratoriums on data centers, other kinds of uprising. And that's bad for America. That's bad for everyone in America.

[Jonathan Ferro]

This is the Bloomberg Surveillance Podcast, bringing you the best in markets, economics and geopolitics. You can watch the show live on Bloomberg TV weekday mornings from 6am to 9am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app, Get essential news on the people and companies pushing the tech sector to new frontiers. Hi, I'm Ed Ludlow. Join me for Bloomberg Tech Tech, a daily podcast focused exclusively on technology, innovation and the future of business. Every weekday we bring you the latest insights on Silicon Valley's top companies and conversations with tech's biggest decision makers. Listen to Bloomberg Tech on your commute home and stay ahead of the news cycle. Subscribe today on Apple, Spotify, or anywhere you listen.