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If you follow markets, you know the value of long term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day a fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care and expertise and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow through and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built and is ready to help you move forward. The Cincinnati Insurance companies Let them make your bad day better. Find an independent agent@cin fin.com being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools, plus access online resources designed to help your business thrive. Learn more@chase.com business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices, message and data rates. May apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
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B
The thing about AI for business? It may not automatically fit the way your business works. At IBM we've seen this firsthand, but by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter Business. IBM
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C
Bloomberg Audio Studios Podcasts Radio News
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A
welcome to the Bloomberg this Weekend Podcast
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C
with David Gura, Christina Raffini and Lisa Mateo. Thanks for joining us for today's selection of conversations from the show.
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B
You can listen to our favorite discussions right here on the podcast, but also make sure to join us live every Saturday and Sunday morning starting at 7am Eastern.
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D
We're on Bloomberg Television Radio and the Bloomberg Business App bringing you unique takes and in depth interviews on news, politics, lifestyle and culture.
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C
On Friday we had this pronouncement from the President on social media saying he was going in and would be making this decision. We he went into the meeting, came out of the meeting and there still was not an agreement. So Axios is reporting today that the president during that meeting asked for several amendments to the deal negotiated between his envoy and the Iranians.
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B
In particular, he wants to strengthen the sections around Iran's nuclear material, including details on how the US Gets that material and when. Here's what he told his daughter in law, Lara Trump on Fox News last night.
- [03:18]
E
This is really a win. Already we've defeated their military, essentially defeated their military. I would rather get a deal because we can open the strait immediately upon signing. The one guarantee that I have to have is that there will be no nuclear weapons. They've agreed to that and it was very interesting. They said they originally said we will not develop a nuclear weapon. I said, well, what happens if you buy a nuclear weapon? So now it says we will not develop or in any way purchase a military weapon. That's a big difference. So we're getting what we want. Slowly, very tough negotiators. It takes a long time. I'm in no hurry. I'd like to say I'm in a hurry because you know gasoline prices are going to come tumbling down. But if you're going to be in a hurry, you're not going to make a good deal.
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B
We're getting what we want according to the president, United States. Joining us now is Ambassador John Bolton. He served as the former US Ambassador to the UN and also as national security adviser to President Trump during the first term. Mr. Ambassador, great to have you with us once again. Let me start with that line that I repeated there coming out of that quotation from the President. We are getting what we want at this juncture as we live through this weekend after weekend, the president indicating he's close to a deal and then silence or no codified deal at the end of a weekend. Do you feel like the US Is getting what it wants out of these negotiations that are taking place between the US And Iran via the Pakistanis?
- [04:40]
E
Well, I think Trump is getting what he wants. This is a deal about gasoline prices at the pump in the United States. Trump worries obviously about the price levels people are paying. He's worried about the effect on inflation. He's worried about the effect on the elections in November. But this is not a deal that really ends the war in a satisfactory way for the United States. There's no doubt about it. If the Iranian regime is allowed to survive the which it looks like Trump is prepared to acknowledge, they will simply benefit from the reopening of the strait to sell more oil, gain more revenue and entrench themselves in power, giving them time, rebuild their nuclear program, rebuild their military, rebuild their terrorist proxies, and X period of time, we'll be right back where we started from.
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C
Given that, do you think the US Was in a safer bet with Iran in the JCPOA than they will be after this is worked out?
- [05:36]
E
Not at all. The 2015 Obama nuclear deal was a failure on many levels. It didn't at all deal with Iran's plutonium route to nuclear weapons in the form of the spent fuel at the nuclear reactor at Bushir just completely left that unattended. And estimates of the amount of spent fuel there that Iran has by nuclear proliferation experts say they could make between 200 and 400 nuclear weapons just from the plutonium route to bombs, not the uranium enrichment route. It's a complicated issue, but the fact is that the JCPOA was illusory and Iran's strategic determination to get nuclear weapons has never changed.
- [06:19]
C
But all those technical issues that you just pointed out, are you confident that given this negotiating team. We were just talking with our Jeff Mason, our White House correspondent, who was saying the negotiating team is essentially Jared Kushner and Steve Witkoff. They don't have a lot of technical experts. Do you have any level of confidence that any of those issues with the previous deal are going to be fixed this time around, given how they are doing this diplomacy?
- [06:40]
E
Well, none. None whatever. Look, the Iranians are clearly trying to buy time. I mean, they like to sell oil. But this, this is a contest really of perseverance and determination. They think Trump is closer to buckling the than they are. They don't care about the welfare of their people. They care about preserving the regime. And so we're going through this rope. A dope of these talks about talks. The Economist this week has a great cartoon. It's a bunch of ayatollahs speaking to two of the Pakistani mediators. And one Pakistani mediator says to the other one, tell the Americans they are offering a framework for negotiation of the establishment of a proposal, exploring preliminary talks about the tentative prospect of conversations. And the other media, other mediator says a great plan of action. That's what we're going through now.
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B
We're going to have you read New Yorker cartoons the next time you're on the show.
- [07:33]
F
I think that's.
- [07:34]
B
I'm enjoying that new recurring segment. Ambassador Bolton, what is your prescription for what needs to happen next? We hear the president continue to threaten that something will happen if they can't come to an agreement. Of course. What's on the table, as we understand it, is more kinetic action, more military action. Are you of the camp, as one might expect, that that's something the US should be pursuing right now? Indeed. What do you see as the path forward here if all that we get out of this is a one page document with 14 points on it or an agreement that isn't satisfactory?
- [08:02]
E
Well, I think there are two broad options. One is just to junk the cease fire, which I think has been a gift from God to the Iranian regime, and go back to full scale military activity. If Trump's not willing to do that, I think the minimal that he should do and that we can do is open the Gulf Arab side of the Strait of Hormuz to get their oil and gas out into international markets. Keep the blockade we've got in effect against Iranian exports, but using military force, I think that will be necessary, help ensure that exports from the Arab oil producing countries can get out. We know from reporting in various publications, I won't name that this week the US has been helping carriers get out. They've not been attacked. They're turning their transponders off, going at night, kind of sneaking through. That's not a lot of traffic to be sure. But I think it shows that the Iranian threat here may be more hollow than people think. And to alleviate the pressure on the international economy, I think it's worth using force to open the strait. I think it helps re establish deterrence to prevent Iran from trying to turn the strait on and off like a light switch in the future.
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C
So that's interesting. So one of the criticisms of how this is going is that there's a sequencing issue. People are saying that the US shouldn't give up its hold on the strait. They should keep the strait kind of locked down and so they can use that on the. On the nuclear leverage side. You don't see the sequencing issue as a problem here with the way this is being negotiated? You think they should open the strait and then tackle the nuclear issue?
- [09:33]
E
Well, I think we should keep the blockade against Iranian exports. So no, I don't.
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C
Oh, I understand.
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E
Apologies generally. Yeah, no. But I will say, whenever diplomats start talking about sequencing as being the only problem, hold on to your wallet, because it means there's really a bigger problem they're trying to obscure.
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B
I want to ask you about what's happened here as a weapon for Iran in the future. We've talked about this over the course of the morning as well. We're talking about the prospect of extending this kind of squishy Ceasefire that's been in place now for a few weeks to 60 days. It occurs to me that that's not going to prevent Iran from doing this again in the future. Indeed, as we look back on this conflict, I think what's perhaps most valuable to Iran is putting this in practice and seeing the havoc that they can wreak by closing this strait to ships from all over the world, the impact that that's had on the global economy. Do you have any confidence here that them having done that this will be a one and done thing, that Iran won't return to this or try to do this again in the future? And indeed, how does the US Put in place any sort of procedure that would keep that from happening again?
- [10:34]
E
Well, I think you bloody them badly militarily to show they cannot close the Strait of Hormuz cost free. Look, anybody who reads a map can tell that the Strait was a potential problem here. This was known in Trump's first term. I think history will record that his unwillingness or inability to see that and not to prepare for it in advance was one of the big mistakes of the operation. We knew, for example, we had to destroy as many of Iran's missiles as we could to prevent them from attacking our bases, Israel, our Gulf Arab allies. But we were late in the game in making sure that they couldn't close the Strait of Hormuz. If they get out of the current situation simply by diplomacy, I think it will lock in in their minds that they can close the strait again by diplomacy and not suffer any real consequences. So I think re establishing deterrence here means defeating the concept that they can just, on their say so, act as if they're master of the strait, Just
- [11:34]
B
to put a fine point on it. Are you suggesting here the commander in chief is cartographically challenged that he didn't think this through or didn't really understand the gravity of this when he entered into this conflict.
- [11:43]
E
Look, in the first term, I tried to persuade him to adopt regime change as our objective in Iran. Unsuccessfully, obviously. And we had discussions of it. Plenty of people participated. Closing the Strait of Hormuz is always one option that was available to Iran. I mean, we should consider that for decades oil prices have had an implicit subsidy because nobody did try and close the Strait of Hormuz. Now that play has been made, nobody can ever be doubtful that they would try and use it again in the future unless they thought it was just too dangerous for them to do it, which is all that this regime in Tehran today understands that they'd be Met by force and they'd be defeated.
- [12:21]
C
I want to ask you about that regime because at the onset of this war, the president was saying that it was time for Iranians to rise up and overthrow the regime.
- [12:30]
B
And encourage them to do it.
- [12:31]
C
Exactly. Use that as one of the justifications for taking military action. I have several Iranian friends, some with families still in Tehran. They've suffered under this regime. They hate this regime, but they have also suffered under this conflict. And they do not seem to have the capacity, or at this point, the will, given what's going on, to. To even attempt such a thing. Is the current regime more or less the same level of extreme as the last regime? And do you think the president should have taken your advice and either not done it or gone all the way through and try to enact regime change in Iran?
- [13:06]
E
Yeah. Another mistake that the administration made before the start of the war is they didn't contact opponents of the regime inside Iran, with a few very minor exceptions. If Trump was determined not to use boots on the ground ground, then you need all the more to be coordinating with people inside who want to try and bring the regime down. That doesn't mean the people going out on the streets on the first day of the war, this regime massacred them in January, they'd massacre them again. That tells you how the regime feels about its own people. But given the destruction of the instruments of Iranian state power that our attacks represented by working with the opposition inside, I think we could have gone a long way to bringing the regime down. But we didn't consult with them. We didn't say, how can we help you organize? What resources do you need? You need communications, money, weapons? What do you need that requires planning? It probably requires time. We just didn't do anything. And I think we on the verge of throwing away a great opportunity for more peace and security for us, for the Middle east, and God knows, for the people of Iran.
- [14:13]
B
We got a minute left. I want to ask you what confidence you have in those who are advising the President right now. I imagine you know some of the principals here, be that Steve Witkoff or Jared Kushner, you've interacted with them in the past. Are you confident that they have the kind of strategic know how or sense to improve the situation that exists right now?
- [14:30]
E
I don't think they understand the kinds of tradeoffs they're making. For example, one of the most controversial aspects that's still very murky in this deal is whether the United States is going to unfreeze frozen Iranian assets and make available to them other resources. I think that would be a huge mistake. It's one thing to provide unfrozen assets to a real government in Iran that represents the people. If we provide this government frozen assets, it will entrench itself still further. And I don't think real estate brokers understand that. That's what's at stake here. It's not about economic development in Iran for that money. It's about re entrenching and enabling the regime to stay in power. That will be very bad politically for Trump if that's what works out.
- [15:19]
B
Always good to get your perspective, Ambassador John Bolton, the former national security adviser to President Trump during the first term, former U.S. ambassador to the United nations as well. Thank you for your time on this
- [15:27]
C
Sunday and New Yorker Cartoon Aficionado.
- [15:29]
B
I did enjoy that, I must say.
- [15:31]
C
Thank you sir.
- [15:34]
B
Stay with us for more on Bloomberg this weekend, right after this. The thing about AI for business, it may not automatically fit the way your business works. At IBM we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business deeper. Lets create smarter business.
- [16:09]
G
IBM 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 Public Holdings Brokerage Services by Public Investing member finra, SIPC Advisory Services by Public Advisors, SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures being a small
- [17:23]
A
business owner isn't just a career, it's a calling you Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now, and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools looking for tips and advice, their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more at chase.com business chase for business Make More of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.
- [18:31]
B
Declan Walsh joins us now from Boonia, the capital of the Ituri Province in the Democratic Republic of the Congo, which is the epicenter of this Ebola outbreak. It's great to speak with you, Declan. Thank you very much for being here. We see you in that video. You're wearing a Tyvek suit. You have ppe. It's clear that those visiting patients in that medical facility do not have Tyvek suits or ppe. Can you just talk about the capacity of this hospital to deal with what is still a nascent outbreak in the drc?
- [18:58]
H
That particular hospital was, I would say, completely overwhelmed when we arrived. It's just, it's the main public hospital in a town, a gold mining town called mongualu that's about 50 miles north of here. That's where this outbreak is believed to have started as long as two months ago. And the when we arrived there, frankly, the public health facilities appeared to be in crisis. As you see, there was only protective equipment for medical staff like doctors, but otherwise those wards were not secured. There was very minimal care being given to patients. And then you had relatives and other folk just walking in and out and they seemed to be entirely unprotected. And of course that was putting them at and of course increasing the possibility that the hospital itself would be a source of transmission back out into the community.
- [19:53]
C
Yeah, it looks, I mean it makes sense now that you're saying that's the general hospital, because it looks to me like TB wards I've been in in places it doesn't look like a purpose built facility, which I guess is part of the problem. I do want to ask you briefly how you got there. And then David was pointing out to me earlier this morning that you said that you hadn't really planned on going into this extent. Why did you change your mind once you were on the ground?
- [20:16]
H
We were there for several days. We'd spoken with the medical staff, got their permission, we got the permission from the patients to enter that ward. And I just felt it was very important to witness firsthand and to show the reality of care in the Congo, particularly in this frontline area here in the main city. Bunyan, the head of the WHO has been here the last couple of days. Dr. Tedros Gabeyesas. Aid agencies are present here. There's certainly some supplies coming in. I was at the opening of a new isolation ward in the city this morning. But up there in those rural areas where the greatest number of cases are found for a whole combination of factors, it's extremely difficult. Very little aid has reached there so far. And you know, they're in a crisis situation, which of course is bad, terrible news for the people who are already sick. But it also means that the spread of this virus is frankly unknown and probably still uncontained.
- [21:21]
B
Declan, something we've spoken about with Jeremy Kannandyk, public health official from the US with Tom Frieden, former head of the cdc, as well as just about the cultural difficulties here conveying to the population the seriousness of this outbreak. And you point to something very worrisome in your piece. You say many refuse to accept the virus was real. You continue. Some said the outbreak was a money making plot concocted by Congolese doctors and foreign aid workers. Others call it a curse. As we talk about the deficit in the public health response to this crisis, how acute is this problem in particular? Just conveying to the population how dangerous this is and trying to explain in light of the sense of what's happening here that that in fact is not the case. This is a very serious virus.
- [22:04]
H
It's an absolutely crucial point. When you speak to aid workers, the first thing they'll tell you is they need equipment. The second thing they'll say they need is education and engagement with these communities. Some of these communities are extremely hostile to the virus. It's not just or sorry to the idea of the virus. It's not just that they don't believe it exists. They have carried out attacks against hospitals. The hospital that I visited had an isolation ward that was under construction, burned down, it came under attack. The first night we were there from a group of over 100 people who wanted to retrieve the body of a local spiritual leader who had just died of Ebola. What that all gets to is the whole practice of funerals. I think, as you noted, the body of a person, a person is most contagious at the last stages of the disease and after they have died. So how the dead are buried is absolutely crucial. Otherwise funerals can turn into super spreader events. So you see these really courageous local health workers and Red Cross officials who are doing their best to educate people to try and carry out safe burials of bodies, but because, frankly, the effort is so far behind the curve. As I said, this outbreak is thought to have started probably six weeks, maybe two months ago, but was only declared, discovered and declared two weeks ago. So the entire effort is far behind the curve. Which means there's very little reliable data about how much it has spread. And that's only feeding into this suspicion among local communities who, as far as they're concerned, see people going into hospitals just to die.
- [23:47]
C
Declan, I also want to ask you, I want to focus on something you talk about because you report that the hospital has no food or water to give to ailing patients. This is consistently an issue with healthcare in places like this. I know when you're giving HIV medication, when you're giving tuberculosis medication, when you're giving supportive care, that supportive care can't work if your patient is malnourished or you don't have clean water. And it's often the part of the response that it seems to get lost in the shuffle. Are there any efforts being made to address that piece of this, what is needed and where do you think it should be coming from?
- [24:21]
H
Look, very, I mean, certainly the World Food Program have mobilized in this area. They're mounting feeding programs and so on. But, you know, there are two issues with it. Firstly, as you say, you know, in a hospital like this, they just don't generally, for normal treatment, provide food or water.
- [24:39]
C
The families are generally responsible for bringing food to the right.
- [24:41]
H
The families are responsible. They come in, they provide the food. Now that is providing a biosecurity hazard in this environment because family members come in unprotected to provide food to people and run a high risk of being contaminated themselves. The other issue is in terms of people's ability to fight this virus because this virus is a. It's a rare virus that as yet has no vaccine and no cure. The only way to treat it really is to bolster the defenses of a person who is sick in order that their own body can fight that virus. And obviously food, water, IV drips, all of these viruses, very basic, not even medical treatments, but certainly basic things to bolster their immune system are key. And that's why if the medical authorities are going to successfully start to push back this wave of infections, they're going to have to get those pieces in places as well.
- [25:39]
B
Declan, let me ask you lastly, just about what you heard from that Congolese doctor with whom you spent the most time. And I think in circumstances, circumstances like this past outbreaks, the frustration and exhaustion are palpable among the medical staff who are in facilities like this one. How would you assess his level of optimism that this is going to get under control? And indeed, what does he need or what does he say that he needs going forward?
- [26:01]
H
I think firstly, he just wanted protective equipment for the staff. Secondly, he wanted to be able to secure that hospital so that they could work in a safe environment. When I met that man in the ward, the young doctor, he was not just exhausted. He'd just come off a night shift where someone had died during the night. A lady fell into a coma and died. But he really felt like he was at the end of his tether. He said, we're almost two weeks into this crisis and this is all we have. How is it possible that both my own government, but also this international system that has deployed to so many of these Ebola emergencies? He was basically saying, why is that not here? And that kind of frustration is palpable among many of the healthcare professionals you meet in some of these frontline areas.
- [26:52]
C
Declan Walsh, New York Times chief Africa correspondent, joining us from the drc. Thank you so much for taking the time. Thank you to you and your crew and frankly, whatever editor signed off and allows you to do this on the ground reporting, which we know is getting harder and harder to do. So thank you, truly. Thank you to all of you this morning. Stay with us for more on Bloomberg this weekend, right after this.
- [27:16]
G
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- [27:41]
I
Yep.
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G
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- [28:15]
A
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- [29:15]
F
genius here Most people see a busy
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G
cafe, but I see precision at every
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B
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G
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- [29:54]
C
There are goals in the tech sector and as more companies incorporate AI into their day to day work, some of them are coming to realize that those goals, if using AI to pursue them, come at a bit of a price. Microsoft cancels most of its cloud code licenses and Uber CEO said AI costs, excuse me, are getting, quote harder to justify.
- [30:12]
B
As Scott McConnell writes, innovation doesn't only need the technology but also the physical infrastructure to support support the product. Is a columnist for Bloomberg Opinion and a lecturer at the Yale School of Management. He joins us now on set here in New York. Wonderful to see you. Let's talk about this. The effervescence, the enthusiasm surrounding AI meeting the reality of having to pay for it. And there are extreme things that I think of the amount of money, for instance, that Metta has poured into this. It's begun to retrench some of that here. How widely spread is that? Are a Lot of companies kind of reckoning with what is this going to be and is it worth the investment, this point in time?
- [30:45]
F
So great to be here. So. Yes. But there's a nuance here, right? So company, there's a company. I was talking to the CEO yesterday. He said if Claude charged us 10 times what it does right now, he said I would pay it and I wouldn't hesitate. He's like, I wouldn't even think twice.
- [31:01]
C
But what kind of company is that and what is the application?
- [31:03]
F
Right. It's a small health care company. So like, so there's, there's, that's, there's a big difference when you have 10,000 engineers who are running, you know, $2,000 per head if you go 10x.
- [31:13]
B
Right.
- [31:13]
F
Things change when you're at that scale. But I think what's really, what driving this is, it's really interesting that the debate on AI is kind of missing something pretty big that I think is what this cost thing is starting to drive us towards. Because you see, there are the boosters and you know, I used to code. The ability to talk to my computer and have it do something without is genuinely, it feels miraculous.
- [31:35]
B
Fantastic.
- [31:36]
F
It's astonishing.
- [31:37]
B
Yeah.
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F
And then there are people, some of them people with enormous scientific and technical credibility who say this is not going to come together the way you think. Like this technology doesn't have the potential. You think there's hype. Those are also serious people. You shouldn't dismiss them.
- [31:48]
B
Not doomers per se, but skeptics. It is. Yeah.
- [31:50]
F
There's a third scenario which it just strikes me, no one talks about, which is you can have a revolutionary, world changing, astonishing technology that doesn't end up making anyone any money. And this is the thing, thing that people, I don't see people talking about, and I'll give you two examples. The airline. No one would deny that the airline industry, right, Just change the world, right? You can go anywhere, perfect safety and eat peanuts on the way. Just remarkable.
- [32:17]
C
More of a pretzels gal myself.
- [32:18]
B
But I'm going with you.
- [32:19]
C
Continue.
- [32:19]
F
But you know, Warren Buffett famously said that the airlines were such a machine for incinerating capital that if, you know, if an enterprise and if an enterprising capitalist had been at Kitty Hawk when Orville took his flight, he should have shot the thing down, right? Like, no, you can change the world and not make money. In biotech, you saw sort of, you know, the biotech revolution starting in 1975. So from 1975 to 2004, Gary Pisano Harvard Business school showed that the biotech industry might maybe have made money in one year.
- [32:51]
B
Right.
- [32:51]
F
And for that entire time, it was essentially just a furnace for money. You poured money in and, you know, drugs came out, life came saved, but people didn't make money. Right. And you've got huge capital investments, lots of uncertainty, long delays before payoff, enormous costs. Oh, and the problem that, you know that AI is dealing with that biotech didn't is the open weights labs out of China in the last benchmarks are four to eight months behind. Wow, that's not much of a moat.
- [33:23]
B
Yeah.
- [33:24]
C
I also want to ask you talk a lot about the physical end of this and the scarcity of compute and these data centers that have to go in and you make a comparison to Edison when they were starting. Please explain that.
- [33:36]
G
Right.
- [33:36]
F
So when Edison built the light bulb, you know, this is so iconic. Then we have a bright idea. A cartoonist sketches a light bulb over our head.
- [33:42]
C
David gets more of those than I do.
- [33:44]
F
It's fine. So fantastic. You know, my wife says that minds are very. Mine are very dim, but that's fine.
- [33:49]
C
Like, yeah, you know what, it's there and that's what matters.
- [33:51]
F
That's the key. But he did when the first Edison generator plant rolled out in New York City, and I said they were serving Something like 400 light bulbs. Right. So you can have an astonishing technology, but you need a network, an ecosystem of other enabling technologies that have to build up to do that. In his case, it was generators and wiring and you know, everything involved in a power transmission system them for AI. So we are used to. And I think a lot of the sort of, especially the VCs who went into AI so heavy, they're kind of used to investing in SaaS companies, right. Where scaling costs zero and the marginal cost of production is zero, but is profoundly quite different. Right. Because you don't see as users go up, the marginal cost going down that much.
- [34:34]
C
It is the same.
- [34:35]
F
I won't say it stays the same, but it doesn't drop. It doesn't drop zero.
- [34:38]
B
Right.
- [34:38]
F
Like just these things. Things are really expensive to run. And so the scaling of this involves capital expenditures and physical construction and, you know, simple stuff. Pouring concrete, wiring, buildings. Those things are hard, Right. They're not like dumping code onto the Internet.
- [34:56]
C
Yeah.
- [34:56]
F
And you need plumbers and electricians. And you know, my joke about it was it's the return of the jocks. Right. It's the guys who actually. And the women, of course, who do physical labor are becoming constraint here. That is Unlike most things that the software, you know that, that this world has seen before.
- [35:12]
C
And a lot of those trades are understaffed as well at the moment. Yeah.
- [35:15]
B
Let me look at the other side of that coin though, and I think you're talking about how this might not make money, might not lead to the kind of changes a lot of proponents are talking about here. It does strike me the fact that this does have this whole complementary infrastructure component to it may make us less willing to see the fact that it might not make money, that this is seen as not just something that's going to improve the economy of information technology, financial services, but could have this wider spread effect on the US Economy. Do you think that's true? Is it clouding our sense? Are we willing to pony up and pay for all of this fiscal construction? Because it seems like it's providing these wider benefits to the country.
- [35:48]
F
So I think that cuts both ways. Right. So it is, you know, if you are an electrician right now, this is awesome. Like, like this is fantastic. This is the best thing that's happened to you in a long time. And so since the United States has sort of apparently decided as a matter of national policy, we're not going to build housing, at least we're building data centers, at least we'll build something that's great. But of course, the flip side of that is data centers are incredibly unpopular. They cause political pushback everywhere they go. Large portions of Silicon Valley appear to have adopted the PR strategy of James Bond villains. And there is this kind of, I think, you know, in some cases, I'm not sure this is about the data center as much as just an inchoate rage of pushback. This is a thing we can, we can go after. Right. And so when you're building this kind of infrastructure, you need the people there to say yes. And right now, American, despite all these benefits, and I mean, Loudoun County, Virginia, oh my gosh.
- [36:41]
B
Just said that they're throw a stone without hitting a data center.
- [36:45]
F
I grew up in Rockville, Maryland, so this is like home for me.
- [36:47]
B
Right.
- [36:47]
F
60% of their tax revenues are going to be coming from data centers. So you would think this would be great. And yet instead you're seeing this huge pushback. I think this is another case where the industry's norms that it's that have evolved over the last generation kind of need to yield to the fact that saying having a public relations campaign where we're going to take away your job and possibly end humanity, not a great.
- [37:14]
C
Yeah, but there's Another PR element that you, you highlight in your latest column, and I wasn't even that aware of this, and that's. You talk about where they're choosing to put some of this infrastructure, and it's in places that feels a bit exploitive. Like especially there's this colossus one is going in largely without air permits in a largely black neighborhood of Memphis. You talk about. So talk us through why those places and what that's doing.
- [37:40]
F
I mean, those places have less political power to push back when the pollution gets so bad. Right. And so if you are under enormous pressure to scale up your compute and you decide that the way to do that is to cut corners. And given all the obstacles that we've just talked about, you can see why the way you might decide to do this, to cut corners, it's easiest to do it in places where people have the least power to complain. If you do that in, you know, Malibu, it's not going to go down,
- [38:07]
B
even though it's nimbake in Malibu.
- [38:10]
C
We've all spent a lot of time in D.C. even in Loudoun County. Flynn county didn't want those data centers. You can bet they wouldn't be going in there.
- [38:15]
F
That's right.
- [38:16]
B
I would ask how you're thinking about the effect this is having on the labor market. So you mentioned that pitch is going to take away all the jobs opened up my computer on Friday. Torsten Slok of Apollo had this note. There is no negative effect on the labor market because of AI. We're not seeing jobs lost as a result of it yet. How are you thinking about that? Putting aside again, all of the kind of ideological perspectives on where this might lead to eventually. Do you think it is having an effect? Is it changing how companies, the CEOs of whom you talk regularly, the way that they hire, the way that they fire, the way that they staff their companies yet.
- [38:47]
F
Yeah, but what I'd say is what it's showing up in is it's two ways, right. It's less firing, although we're seeing some of that. And a lot of the firing that is happening is less, I think, about enabling productivity and more people kind of scrambling for cash to come to sort of try and chip away at these gigantic capital expenditures. But it's making it less. I think people are becoming more reluctant to hire just because of the uncertainty. But I think the deeper and more profound effect is about fear. Right. You saw, especially during COVID you saw the balance of power between companies and developers and people who had these skill sets swung really hard in, in favor of labor. What this does is, is give people, is it creates fear. Even if I'm not being replaced, I might be replaced, which makes me a lot more reluctant to ask for a raise or say I should have a say in the way the companies are governed. And I think a lot of CEOs, especially founder CEOs, for whom their company is, their identity, are like, I'm not sure I want to give these people a say in how this.
- [39:45]
C
We've only got about a minute left and I'm going to ask the question that I, that I always ask. I'm a bit of a skeptic about all this. One of the reasons is you talk about this building, all this infrastructure and a lot of that is being funded by credit and a lot of credit and a lot of circular credit. And for millennials who've lived through multiple crashes, I just feel like this is deja vu all over again. What is your take? Is this a bubble? Is this sustainable? Is it durable? Is it rippling? If not popping? Where are we?
- [40:12]
F
You can have a bubble and still have a real technology. And that I think, is that's sort of to get, go back to where we were. That's the point that people are missing. Right. You can say these valuations are saying, you can look at, I mean, SpaceX, which is apparently now an AI company, and say you're $1.75 trillion for, for these financials and say, right. If that's not a bubble, I don't, you know, I don't know what is. I don't know what the GDP of Mars is going to be talking about.
- [40:38]
C
There's a meme going around that Nvidia is worth more than all the arable land in Australia.
- [40:44]
E
Right.
- [40:44]
C
I mean, at some point that just seems ridiculous.
- [40:46]
F
Yeah. And so, but at the same time, you can say that 20, 30 years from now this was a bubble, but something came out of it that was really powerful. That won't be a lot of consolation if you lose your shirt on on in the, in the meantime, we will leave it there.
- [41:01]
B
On that note, gotta thank you very much. Great to see you. Lecturer at the Yale School of Management, of course, columnist for Bloomberg Opinion.
- [41:07]
D
Stay with us for more on Bloomberg this weekend, right after this.
- [41:15]
G
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 and paid for by Public Holdings Brokered services by Public Investing member FINRA SIPC Advisory services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures@public.com disclosures running a small
- [42:28]
A
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- [43:51]
C
All right, so right now the alcohol industry is taking a hit with beer, wine and spirit makers losing a combined 830 billion in market share from 2021 to 2025.
- [44:02]
D
Yeah, and it turns out Gen Z years they're actually looking to barbells over bar stools.
- [44:07]
H
You get it now guys, okay?
- [44:08]
D
For their social meet for their social outlets. Bloomberg Pursuits journalist Sarah Parker. She talked to me about it a few days ago.
- [44:16]
I
It's both a health decision and they're also looking for. For a community and places that they can't find at the bar because more and more young people don't drink. So it's not just a health choice. It's a health choice and a choice to try and find more friends outside the office or the bar, really.
- [44:32]
D
All right, I want to dig into that community aspect in just a bit, but I have to ask, because we're talking Gen Z and millennials. What about the Gen Xers and Boomers? Where do we stand?
- [44:42]
I
Well, the research shows that they're still going to the bar, they're still going to dinner. Maybe they're having dinner parties or house parties. Owning homes for the Gen Z who went to college, perhaps in the pandemic. And they had to work out from home with YouTube videos. They had to go to class on Zoom. They really want to go work out with other people. They're really into finding a community in a place that they can't because they maybe started their career remotely. So they wanted. They're spending all this money in classes to find a community that they didn't have after graduating college.
- [45:12]
D
So you talk about community. So is it more, you know, socializing? Like, can they just go out and go on, like, a dating app? But no, they want to go and, like, be where the people are. I guess it is what you're leading to.
- [45:24]
I
Yes, exactly. I spoke to a technology consultant who said she met her boyfriend at a run club. Not at a dating app, not at a bar, but at a run club. And she made friends at Pilates. She goes to the same class every day. She compared to school. She's like, said it was like sitting next to the same person week after week in a class was like. Was like being in college. And if you have something that if you need something to talk about, there's always the class. Right. So it's like an easy icebreaker and a sense of familiarity and community that you just don't get elsewhere for them.
- [45:52]
D
And aside from that, they're drawing. They're throwing parties there. Like bachelorette parties. Like, this is the thing now.
- [45:59]
I
I didn't have my bachelorette party at a blog.
- [46:02]
D
Me neither.
- [46:03]
I
I did something else. But, yeah, they're telling me that they're hiring out the whole story studios, spending thousands of dollars to rent out the equipment, have a teacher, and have mocktails. Instead of going to the bar, they'll bring their girlfriends to a Pilates class, which is kind of wholesome, I think.
- [46:17]
D
All right, so you mentioned money. So how much are These Gen Z and millennials, how much are they spending on memberships, on classes, on things like that?
- [46:26]
I
I spoke to one person whose budget was 800 bucks a month on fitness, which is, which is quite a lot of money. But they're outspending proportionally, Millennials and Gen Z and Gen X and boomers proportionally to their income on fitness and spending more than last year in a mental survey as well. So it's growing. The trend seems to be nonstop, but part of it is that they can say that they feel better afterwards, unlike going to a bar. There's no hangovers. There's no wearable like an aura ring or whoop telling you your readiness score is lower the next day. They just feel better after a gym class.
- [46:58]
D
Okay, it's good to feel that way. You don't want to have the hangover all the time. But they're doing all this and they're spending all this money when, you know, rents are higher, when they're dealing with student debt. Like, how are they making this work?
- [47:10]
I
I think it's a sort of like zero sum game in their heads, as if maybe I can never afford a house, but I can put maybe a 200 pound or $200 membership on a credit card.
- [47:20]
E
Right.
- [47:20]
I
So if they don't see long term prospects, there's the risk of AI for their future. They might as well do something that makes them feel good in the short term. And I think gym spending is a big part of that.
- [47:30]
A
It is.
- [47:31]
D
Now, in the article you mentioned one thing that I want to point out. You talk about how wellness has become a full fledged identity. Now I know my social media feed, it's filled with, you know, people working out. It's, you know, what am I meal prepping for the week? Like all these different things. I mean, does social media have a lot to do with it too, about more people going or these younger generations going to the gym?
- [47:53]
I
Yeah, I do think there is a performative aspect with like the hashtag plotties on TikTok, the Clean Girl aesthetic or people wearing their matching to another Pilates. That's and wanting to look the part. I think that is a really big part. I spoke to a content creator in Atlanta who's 23 and she documents all of her gym sessions. She's made friends at the gym, but she's also made it her. Her business online, like her content creation arm. So I think the lifestyle aspect and the way that social media has really driven that wanting to look a certain way and perform a certain way online is Huge.
- [48:24]
D
Okay, go back to me. The clean girl. What is it? Explain that one to me.
- [48:29]
I
Yeah, the clean girl look is. Is like athleisure and wearing less obvious makeup.
- [48:35]
D
Okay. Yeah.
- [48:36]
I
Sort of a. As opposed to the millennial, I would say, like Kesha aesthetic, if that makes sense to you. It's a different one. Wanting to look. Wanting to look. Yeah. More like wellness oriented, as if instead of. You just got back from the bar.
- [48:49]
D
Okay, got it. And last question. Does the GLP1s, does that have anything to do with. With this as well? Does that play into the picture?
- [48:57]
I
I think it does. That didn't come up so much in the, in the research. The people who are on GLP1s are told to strength train as part of that regimen. So I think that could be. As more younger people get on GLP1, this becomes more mainstream. And wanting to strength train to keep up that as part of the medicine, I think that'll be a really big ongoing part of this. Trying to keep it going into the future.
- [49:17]
D
All right. I work out in my basement. I don't even go to the gym. So this seems like, yeah, it's a big social thing, but are people still going to the bars? Like, how are bars and restaurants doing?
- [49:30]
I
Bars and restaurants are making menus that cope with people who are on GLP ones. Some more small plates, smaller portions, mocktail options. I've seen a lot of more creative mocktails now for people who aren't drinking. So I think there, of course is a space for bars and restaurants. I for one, enjoy a nice bar dinner out. But I think that hospitality, especially like hoteliers and business owners, need to find a way to make a community in the way that the gyms are killing it at. To really get, really get that Gen Z spend at the moment.
- [49:59]
D
I got it. I'll meet you at happy hour. Sarah. Sarah, Wrap and yourself.
- [50:03]
I
Right. You can have a mocktail and do a Pilates class.
- [50:06]
D
Totally. Bloomberg Pursuits. Thank you so much. So, David, Christina and I decided that we're going to go. Yes.
- [50:15]
C
Yeah. Are you going to join?
- [50:16]
B
No, I'll have a cocktail. In of spite, skip the Pilates class. But I hope you guys have a great time. Whenever that transpires, I am eager to hear about it.
- [50:23]
C
It'll be great. You don't want to, like, come and hang out and do some, you know, hundreds with us?
- [50:28]
B
No.
- [50:31]
C
Thanks for joining us on today's Bloomberg this Weekend podcast. Don't forget to tune in live for the show every Saturday and Sunday morning starting at 7am Eastern.
- [50:39]
B
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