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The news doesn't stop on the weekends. Context changes constantly and now Bloomberg is the place to stay on top of it all. Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg this Weekend. I'm Christina Raffini. We'll bring you the latest headlines in depth analysis and big interviews, all the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people and culture. On Saturday mornings, we put the past week's events into content, examining what happened in the markets and the world. Then on Sundays, we speak with journalists, columnists and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television, listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast that's Bloomberg this Weekend. Saturdays and Sundays starting at 7am Eastern make us part of your weekend routine on Bloomberg Television Radio and wherever you get your podcasts. Safeway and Albertsons have made saving easier than ever with great savings on family favorites this week. 16 ounce sweet strawberries are two for $5 member price. And don't miss the incredible deal on Signature select boneless skinless chicken breast value packs for $2.97 per pound limit. One plus medium avocados or mangoes are five for $5 member price. Fresh and delicious savings for every meal. Hurry in. These deals won't last. Visit Safeway or albertsons.com for more deals and ways to save. This is Wall Street Week. I'm David Westin bringing you stories of capitalism. Saudi Arabia's Vision 2030 project to reshape its economy has a deadline only four short away. We go to the kingdom to see how it's coming on an important part of the plan. Tourism plus Israel's startup nation has been put to the test with the war in Gaza. Has the conflict slowed down the tech juggernaut or actually sped it up? And more People want to ski, but they need snow and access to big mountains. We explore the pluses and minuses of one possible solution, so called Big Ski. But we start with the story of the week for the Federal Reserve with Chair Jay Powell reacting forcefully to a grand jury subpoena, looking into his testimony about renovations in the Fed's D.C. office building. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people. Everyone from central bankers around the world to several Republican senators condemned the move, including senior Senate Banking Committee member Thom Tillis, who spoke with Bloomberg on Capitol Hill. If suddenly the threat of a lawsuit can take a chair out of play, how can anybody think that that's anything more than a de facto ending the independence of the Fed? And we all know what that does to markets worldwide. I will block any effort to name any member of the Fed board until this matter is resolved. To move on would almost validate that this is a way that you can actually get the Fed under heel. Bill Dudley is former president of the New York Fed and now a Bloomberg contributor. There was a lot of reaction to the news that there was a grand jury subpoena against the Federal Reserve and Chair Powell. A lot of reaction by politicians, by the news media. There wasn't as much reaction actually in the markets. So is one of them right and one of them wrong? Well, time will tell, but I think the market view is, look, they issued a subpoena. It's a long way from issuing a subpoena to actually having the grand jury indictment a trial, and that's going to take so long. Powell is already no longer going to be chair. So I think the market view is, this is sort of a lot of noise. So it may not have the effects in the real world. But Chair Powell, who had repeatedly just sloughed off criticisms of iOS, had an entirely different reaction. It was a very, I thought, forceful statement that he taped. Oh, very much so. And the contrast with how he behaved previously, where he was basically, I'm not going to engage, I'm not going to engage. And this time he said, no, you crossed the line. You're accusing me of malfeasance and I'm not going to take it. And so I think because he was so measured before, this made it even more effective. So you've been in the room and whenever we ask somebody who's on the Fed, they say, oh, no, no, we pay no attention to politics at all. Absolutely not. Doesn't affect us. But you are human beings. I mean, it must play in the back of your mind somewhere, even if it's not discussed in the meeting. Look at the Federal Reserve transcripts of all the FOMC meetings released with a lag of five years, and you won't see any discussion about political considerations. So I think that's actually true. But you're certainly right in the sense that if the administration is putting tremendous pressure on the Fed to do something that makes it a little bit more difficult for the Fed to deliver what the administration actually wants because it creates the idea of are they doing it because they think this is appropriate for the economy, or are they caving to the administration's pressure? So I think that's why it's actually counterproductive what they're doing. I can imagine Powell like, thinking, should I do one more rate cut or not? Boy, now if I do a rate cut, it looks like I'm bending to this pressure. Maybe I better hold off. So it's actually making it more difficult for the Fed to cut rates. Frankly, as you say, Chair Powell's term will be up in May, There will be a new Fed chair. How much difference will the chair make in himself? I think the chair is certainly important because one, they control the agenda. The Board of Governors staff works mainly for the chairman. So that's a lot of authority. But at the end of the day, in terms of the votes on the Federal Open Market Committee, the chair only has one vote. And so I think the influence of the chair really depends, depends in part on how credible that person is in terms of making the case for the monetary policy that he wants to see implemented. So if someone comes in and says we should cut 100 basis points and the economy doesn't suggest that that's appropriate, the committee is going to say, well, that's what you think, but we're going to dissent against that. And that's really, you know, that would actually be quite bad for the chairman if the chairman sort of lost a vote to the rest of the committee. So I think there's quite a few guardrails there. I think the broader question is, can the Trump admin put enough loyalists into the Federal Reserve? So it's not just the chairman, it's a majority of voting members of the Federal Open Market Committee. And that's why the Lisa Cook case is so important. Because if Lisa Cook can be dismissed for cause, well, then maybe other people can be dismissed for cause. And then you get a much more rapid turnover of the Board of Governors. Board of Governors had seven votes on the fomc. The presidents have five. So if you could take over the Board of Governors, you could actually start to get the monetary policy you wanted to from the outside. The job of chair of the Federal Reserve looks pretty hard for anyone anytime. Is President Trump making it harder for the next chair with what he's saying and doing, including his grand jury subpoena. Yeah, I think he is, because I think it's. When the new chair comes in, people are going to be wondering, so are you President Trump's lackey or are you going to be on the side of independent monetary policy based on what the economy calls for in terms of inflation and employment? What, what, what interest rate path should we follow? And so there's going to be a question about are you supporting the idea of an independent central bank or not? And so the new incoming chair is caught in a very difficult place, frankly. I mean, it's almost like they're going to get someone mad at them if they, if they side on the side of independence. Monetary policy. Let's set the right monetary policy that might run into conflict with the President. And obviously if he tries to push the President's agenda and the FOMC thinks that's inappropriate, then he's going to get on the wrong side of the fomc. So I wouldn't want to be the new chair, frankly. It strikes me when it comes to the Supreme Court, the President typically goes out of his way to say, I didn't ask, for example, how they would vote on this particular issue. I didn't ask that question in advance. I'm not sure President Trump would have the same reticence with the next Fed chair of not asking them specifically, what are you going to do? I wouldn't be surprised if he asks him what to do. And I think if I was the Fed chair, I'd say it depends on the incoming economic data and what's warranted to keep the economy on a smooth glide path. I mean, look, I think President Trump is coming at it from a real estate developer perspective and, which is lower rates are always good, but the reality is lower rates aren't always good because if you, if you, if you set rates too low, the economy will overheat, you'll have an inflation problem. It's sort of, it's sort of ironic in an environment where people are worried about affordability, that inflation is the thing that really resonates with voters, that you're pressing so hard for lower interest rates, which would actually probably make inflation worse. President Trump has said repeatedly, I have the right to express my views. I think I'm pretty smart in this. And, and there is a First Amendment right, even for the President of the United States. Expressive views. Is there a point where that expression of views actually starts to do long term damage to the institution? I Think how. It depends on how you're expressing the point of view. You could say, my view is that the Federal Reserve should interest rates more. Fine. That's just an impression of you. Powell is an idiot. He better lower interest rates by 100 basis points or I'll fire him. That's a totally different expression of a point of view. One is saying what I think interest rates should be, the other is saying, not only what do I think interest rates should be, this just should be the consequence of my decision. So I think there are two different things. So I don't think anyone quarrels with the President having a view on interest rates. The latter is what the President has done. Yes. Which would imply there is some damage being done. How long lasting is that? I mean, there will be a new president at some point and let's assume a new president comes in. So no, I'm not going to criticize the Fed anymore. Does it restore the credibility or is there lingering damage? I mean, I think it depends on how the Federal Reserve behaves over the next couple of years. You know, if the Federal Reserve basically sticks to his knitting, conducts monetary policy in an independent way, keeps the economy on a smooth trajectory, no lasting damage. The President Trump's were thwarted in his attempts to take over the Fed. But if President Trump is somehow successful in taking over the Fed and getting a very accommodative monetary policy as a consequence, that's not appropriate for the economic outlook, then of course there'll be more lasting damage to the Fed. Take us inside the room when the FOMC meet because historically it's sort of been like secret. We don't know what's going on. Well, you have the transcripts and I think the transcripts. Transcripts are pretty accurate about what the meetings are like. You know, basically what happens at a meeting is typically you have a briefing from the system open account manager about what's going on in markets. Then you have a briefing on the economy from the staff and then a briefing on international staff, and then you have a go around and everyone talks about their views on the economic outlook. It's a pretty collegial place. I mean, you know, if you, you know, people want to understand the views of others. People aren't yelling and screaming and arguing, you know, vociferously. It's very respectful and, you know, people spend, you know, quite a bit of time, you know, when the meeting's not in place, actually, you know, you know, talking in the hall, you know, having a cup of coffee on the break or at the breakfast or lunch. So I would say, you know, I find it to be quite collegial, you know, and I think that's and I think that makes the institution function better. A collegial place where one in Lisa Cook and now two in the chair Jay Powell are under very public attack, personal attack. And I think people are feeling they're, you know, that could be me. So I think, you know, there's quite a bit of sympathy for what those two people are going through. So I think, yeah, I think the Federal Reserve leadership, you know, including, you know, all the FOMC participants are pretty, you know, are very sympathetic to where Paul's coming from. And I think they feel really good about what he did and said it had to say in his video message this past weekend. Up next, competition in the Gulf between Saudi Arabia and the uae. I'm Carol Massar. And I'm Tim Stanwak inviting you to join us for the Bloomberg businessweek daily podcast. Now, every day we are bringing you reporting from the magazine that helps global leaders stay ahead. We've got insight on the people, the companies and trends that are shaping today's complex economy. That's right, Tim. We're all all over global business, finance, tech, news, all as it is happening in real time. And we've got complete coverage of the US Market. Close. Got to say, basically, if it impacts financial markets, if it impacts companies, if it's impacting trends and narratives that are out there, we are on it. We also have a lot of fun doing it. Bloomberg businessweek also brings you the analysis behind the headlines through conversations with our expert guests. And we are doing this all live each weekday. And then we bring you the best analysis in our daily podcast. Search for Bloomberg Businessweek on YouTube, Apple, Spotify or anywhere else you listen. Check it out on your website home from Work to catch up on the conversations that you miss during the business day and on the weekend. Check it out for a complete wrap up of your business week. That's the Bloomberg Business Week daily podcast. I'm Carol Massar. And I'm Tim Stanovec. Subscribe today wherever you get your podcasts. This is a story about transforming a brand. The kingdom of Saudi Arabia has long been associated with the Muslim holy cities of Mecca and Medina and perhaps even more so with oil. But the country's rulers have been trying to diversify. What if it could become a favorite vacation spot as well? Our colleague Jomana Versace brings us the story. Many countries seek to transform their economies, but few do it with such a centralized approach and such vast amounts of capital. Through its Vision 2030, Saudi Arabia wants to shed its image as just an oil nation and modernize its economy. It's a goal that comes from the very top. With the Crown prince meeting President Trump and foreign business leaders in the United States at the end of 2025, more than 40% of Saudi Arabia's GDP comes from oil. But by 2030, the kingdom wants that number to be closer to 35%, with around 2/3 of GDP coming from non oil sources. Just this month, the country started opening its property market to foreign investors and announced plans to do the same with its equity markets. After a year of poor returns in 2025, Saudi Arabia's benchmark index dropped 13%, despite strong stock performance in much of the rest of the world. Stephen Cook is a senior fellow for Middle east and Africa Studies at the Council on Foreign Relations. Saudi economy has been a commercial economy, but it hasn't really had genuine institutions of a market economy, independent courts, which he hasn't even tackled yet, but rational investment laws and the things that investors really, really need in order to operate outside of the hydrocarbon industry, you know, with the Vision 2030, His Royal Highness the Crown Brands said, we have to diversify the economy. We don't want to continue relying on one source of income, which is the oil. In a time where we have vast number of other things like mining, natural resources, forest, fat, gold and nature, we can do a lot in its sport, culture and entertainment and tourism. His Excellency Ahmed Al Khateeb has been serving as Saudi Arabia's Minister of tourism since 2020. Tourism was one of the main pillars of Vision 2030, and since then, we have been working to modernize the country, build new destinations, new airlines, Riyadh airlines, new airports, including King Salman Airport, and new hotels. Leisure tourism might be relatively new to Saudi Arabia, but for centuries, millions of Muslims have come to Mecca and Medina for the Hajj religious pilgrimage. We are blessed to have the two holy cities. They used to represent 60% of our international arrivals back in 2019, and last year they dropped to 46% and the ledger increased. And therefore, we will continue pushing and promoting travel for leisure to Saudi Arabia. Travel to enjoy your holidays in Saudi Arabia. And in the same time, the religious tourism will grow to a much bigger number than what we are having today. But now Saudi Arabia wants to put a new footage forward. It might look like the Maldives, but that's the Shibara Resort. Saudi Arabia on the Red Sea. Well, we were born out of Vision 2030 Vision 2030 is trying to accomplish a number of different things for the country, amongst which obviously creating a vibrant society, opening up the kingdom and diversifying the economy. John Pagano is CEO of Red Sea Global, a real estate development company founded by the Crown Prince himself to create the real estate that will become part of Saudi Arabia's tourism offerings. We have a beautiful, pristine environment which in the world today doesn't exist. I mean, we've exploited our nature and our environments globally. When I first came to Saudi Arabia, I was shocked at how beautiful and pristine this environment was. We had beautiful islands, a coastline that was largely untouched. Pagano's shock is exactly the image that the kingdom wants to change. Stephen Cook said, there's a long road ahead. I was there before the opening up of Saudi Arabia and it was extraordinary because nobody had been there. But in terms of tourism, I think that, yes, there'll be tourism from, you know, major Muslim countries, Indonesia, Malaysia, India, which has the second largest Muslim population in the world, even though it's not a Muslim country. But also I think there is a genuine interest in attracting people from the West, Americans and Europeans, and not just the kind of, you know, adventure tourism that they may have seen so far. Beach resorts attract wealthy tourists, but the kingdom is also leaning into its rich history to combine luxury and culture for what it hopes will be a unique experience. Alyoula is an incredible place, a place like no other. It's a region in northwest Saudi Arabia with incredible natural and cultural significance. It's located on the ancient incense route and many civilization has passed through for thousands of years. Habir Al Aqil is the CEO of the Royal Commission for Al Ullah, which means glory in Arabic. The city is one of eight UNESCO World Heritage sites in Saudi Arabia. And the Kingdom has big plans to make the destination a central part of its tourism initiative. Al Ula is not just a historical site. Alula is a home. Many families have lived there for generations. And I would say that an example would be Aluvilla Old town, where it was inhabited by the families starting from the 12th century until late 1980s. Now, if you bring all of this together, the ancient past, the incredible nature, protected nature and the living culture and, you know, living community, this basically get you a complete picture of Alula. It's important to say that Ali is Saudi Arabia's treasure, but it's also the gift for the world. Which year did ALA open for international tourists? We started our efforts back in 2019. Today we have received around 300,000 guests visitors to Alula 30% of which are international visitation. So we're targeting around 2 million visitors by 2035. If Alual's plan to bring in 2 million visitors by 2035 sounds ambitious when it attracted only 15% of that last year, that's because it is. It echoes the kingdom's big target of getting 50 million foreign visitors a year by the end of the decade, in addition to 100 million local tourists. It's a goal that is even more stunning considering the Kingdom only opened its borders to leisure tourists in 2019. Do you feel like you're on track to get there? I'm very comfortable. The 50 million will put Saudi Arabia among the top 10 most visited countries around the world. And how much of a draw are those big mega events, the World Expo, potentially FIFA, World Cup? How much of a draw is that going to be in terms of bringing in those international tourists? And where does it fit in to your broader plan? It is very important for us to repeat the visitors who will come again and again to to spend their holidays in Saudi Arabia. Not to come only for business or to visit their families and friends. Adding leisure tourism to its offerings requires a big capital outlay. The government plans to spend almost $1 trillion in all to transform its tourism industry. Private investment in tourism rose to $3.8 billion in 2024. And about 40% of that comes from foreign capital capital. How important is it to get private sector involvement with all of these events and projects that you're putting together? It's very important. It is part of Vision 2030. We want the private sector to drive. We are a regulator when we open this sector. The government started to stimulate the sector, but down the road, this sector has to be run by the private sector. The private sector in the tourism build the hotel, build the shopping mall and build the restaurants, etc. And they operate it. They are the investor, they are the operator, but they have to. The private sector in Saudi Arabia is contributing heavily in building new destinations and the new experiences. We cannot do it alone. The private sector role is very vital to the success of this sector. The Kingdom of Saudi Arabia also has stiff competition from its neighbor, the United Arab Emirates, and beach destinations in Africa and Asia. This is a dynamic throughout the region. There is competition among all of these countries and cities, actually, and even within them, you know, there's a competition between Abu Dhabi and Dubai, even though they're both in the uae. And I think that the Saudis always looked themselves as the big dog in the region, but they lagged behind in Terms of the kind of ability to attract business businesses and firms and build these gleaming, gleaming cities. International visitors account for almost 80% of the UAE's tourism expenditure. And right now, Dubai offers tourists something that much of the rest of Saudi Arabia doesn't. Alcohol. But even that is changing. Well, you can get alcohol in the diplomatic quarter. You could always get it through diplomatic pouch, but now there's actually a shop. And so Saudis proclaim, not officially, but they would say, you know, this is a precursor. This is the first step towards legalizing alcohol in the kingdom. I don't think anybody knows when that's going to happen. And from I think the Saudi perspective, that's not make or break. People will want to come to Saudi Arabia, they'll want to see Jeddah and Riyadh and Alula and other places, and it won't deter them if they can't get, get a glass of wine. But it certainly would be a nice addition if they could. A growing tourism industry is also changing things at home. Look, I think the transformation has been breathtaking. I first came to Saudi Arabia for the very first time in 2017 and you know, the changes in society, the changes, I mean, simple things like cinemas and music, women driving and, and you're walking around today in a Western business suit, which back then you probably didn't see. The local community are basically the heart of our vision. Since the beginning, we ensured that. We have set in place an approach that ensures empowering our local community through education, stewardship and opportunities. Is Saudi infrastructure ready to accommodate this potential influx of future tourists? Oh, yes, we're ready. Today we have catered for 116 without any issue, but definitely we are building new destinations, new experiences I believe we are ready to cater for. With the projects in the pipeline under construction, whether Riyadh Airlines or King Salman Airport that will happen and many other airports like Abha Airport, Tasir Airport, which is important, and the hotel rooms that are under constructions in the and many other destination or location, we will be absolutely fine. I don't think we will have a challenge to achieve the 150 billion. The irony is that to change the world's impression of Saudi Arabia, it needs foreigners to come see what it is. But it's also foreign capital that will help fund the success of its new image. Coming up, amid signs that the ceasefire in Gaza may be more fragile than ever, we go to Israel to see what the fighting has done to the tech industry on which the country depends. Foreign, this is Tom Keene inviting you to join us. For the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of the US Market open. We cover stocks, bonds, commodities, even crypto. All the information you need to excel. And I'm Alexis Christophers. Bloomberg Surveillance also brings you the analysis behind the headlines. We do that through conversations with 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 Apple, Spotify, YouTube or anywhere else you listen. On the east coast, listen at lunch and on the west coast, listen as soon as you wake up. That's the Bloomberg Surveillance Podcast with Tom Keene, Paul Sweeney and me, Alexis Christoforus. Subscribe today wherever you get your podcasts. Bloomberg Surveillance Essential listening each and every business day. This is a story about success born of adversity Israel is known as the Startup Nation because of all the successful tech companies it has hatched, accounting for more than one half of the country's annual exports. There are more Israeli companies listed on the Nasdaq than any country in the world outside of China, the United States and maybe Japan. One might have thought that the Israeli tech juggernaut would slow down during the nation's war against Hamas, but it turns out that it's done the opposite since. Since the war began in 2023, Israeli high tech companies have raised more money than ever, some $15.6 billion in 2025, up from 12.2 billion in 2024. The entire tech sector, despite war, has actually grown considerably. Record number of exits this year, for instance, Google made its largest acquisition not just of an Israeli company, but its largest private acquisition of any company in its history for over $30 billion, where it bought the cloud security company Wiz in the middle of this post 10-7-attack on Israel. Dan Senor is the author of Startup Nation and the Genius of Israel and hosts the Call me Back podcast. Israel's number of exits from the tech sector in 2025 will be about 300% higher than 2024. In the defense tech sector, which is an area of considerable growth, there are some fewer than 300 defense tech startups on October 6, 2023. In terms of the number of startups, the amount of private funding coming into Israel, and then the number of exits, it's all kind of multiples higher than we've seen in a couple of years. Israel's tech sector has become one of the largest in the world, accounting for 17% of the country's GDP compared to 13% for South Korea, 10% for the United States and less than 5% for the EU. So for some time now, Israel has been punching above its weight. Highest density of multinationals that have set up operations in Israel. Countries that you know, don't set up R and D shops outside of the United States anywhere in the world. And they're setting them up many tech companies in Israel. So for some time now, Israel has been what we call the startup nation. This innovation ecosystem that much of the world is depending on the big changes. Most recently is more and more cooperation with the Gulf, with the Gulf states, some in very public ways like the UAE and Bahrain, some in not so public ways like Saudi Arabia where you're seeing more and more investment from these countries into the Israeli tech ecosystem because they realize to really thrive they need to co innovate with another tech ecosystem. There's 450 multinationals that have set up shop in Israel. So when you talk about the maturity, it's not just the companies, it's the overall ecosystem has become so powerful because we've all been working together and figuring out how to develop things that benefit Israel and the world through this ecosystem. Ely Raisin is the Chief of the Chief strategic officer at OurCrowd, an online investment platform based in Israel that connects investors from around the world. We've set up at our crowd a super interesting fund which is a three part fund or what we call the Trepont Fund between the us, Israel and Korea for not just developing or designing deep tech, but being able to produce it in partnership with strong partners in Korea and in the US and why Korea particularly? So Korea is a super energetic, highly technologized ecosystem and economy to begin with. It's less well known because it's somewhat insular. At the same time though, the US looks at Korea as an incredibly strategic ally. There's all sorts of crossovers for our goals and our capabilities among the three countries where we really see that union as being incredibly powerful. Israel is a good partner for the Korean startup ecosystem because they are very known for the startup nations. Hyunjoon Kim is the CEO of NH Ventures, a subsidiary of Nong Hyop Financial group. In July, NH joined forces with OurCrowd to create an $80 million fund to invest in Israeli startups in Korea. We have a lot of interest about the technology in Israel, but we don't have a lot of chance to to visit each other and how to communicate each other. Fortunately, we can establish the Khuntia Fund between Israel, our Cloud and nh. That makes a lot of information flow from Israel to Korea and Korea to Israel. We think Israel can be the good partner to support expand the Korean economy. Startup go to the US market. Israel also, they can find a good partner to manufacturing. Korea can provide good quality and reasonable price. Israeli tech startups run the gamut from defense to cybersecurity to biotech to AI. But whatever the technology, it often traces back to Israel's mandatory military service. The military is sort of a bedrock of all Israeli innovation because of a couple of things. One is there are many really fascinating technologies that are both defense in nature, but also civilian in nature that are brought up through the military. And the other, less spoken about but highly impactful, is the incredible development of leadership and teamwork that happens in the military. And those teams and those leaders transition into roles leading civilian companies. We invest in defense companies certainly, and cyber, but most of our investments are not. Most of our investments are in things that are commercial or civil civilian use. Has that line between civilian and defense become blurred as we talk about dual use? Absolutely. So we see that all the time now, both because some inventions are inherently dual use and because many of the entrepreneurs are seeing a real opportunity now to serve the incredibly impactful defense needs that are experienced not only in Israel, but all around the world for the reasons that we all understand. So perhaps it should come as no surprise that the onset of the war also opened a new front for startup technologies, including those that may have been developed for civilian or dual use. From day one, we wanted to bring innovation to the battery sector, the battery industry. We wanted to integrate our technology into every battery in the world. That's still our vision, but I think the vision is is now even bigger as we see the potential in other markets. Adionix CEO Moshe Bitton saw a clear potential for growth for his battery parts company once the Israel Hamas war started. It's not where we wanted to deploy our technology or if you'll ask me what were our vision or dream is not to be on the defense sector, but we understand now that this is also an obligation kind of. This is our service. That's one of the things that actually shifted and changed during October 7th. War is never a good thing. And the Israel Hamas war has been particularly horrific, starting with the attacks on Israeli civilians and followed by the devastation of much of Gaza. Most of the investors, they were very empathy and lots of support and asked how we actually manage and when we ask if we need anything. Of course there were investors that were silent and some investors even ask, like direct questions about the situation they were. And sometimes it felt a bit awkward when, you know, some foreigners blaming you on things that are not in your control. A private company, business company, or not part or represent any government, and I am blaming you. The war definitely had impact in terms of which companies essentially were newly created or like we discussed, where they leaned into in terms of their customer base or defense use cases. We also did see through the war investors sort of in some cases take a little bit of a step back because mostly because of optics, not because of anything substantive. And now that the war is over, I'll tell you that we've seen this huge pickup in foreign investor interest in Israel. So in the last few weeks, I personally have hosted Japanese, Korean, and I'm about to host a Taiwanese delegation, minutes before you and I joined this call, hosted a large group of Canadian entrepreneurs here in our office. So what we're seeing is a real pickup in foreign investor comfort. With investing in Israel, out of adversity has come at least some success for the startup nation. Success involving businesses from halfway across the world. I think most important thing is Israel always try to go global because their domestic market is not so big. And Korea also need to expand their market horizon to the global market. But they have their own strength point. We try to combine those strength points, we can raise the global success. It's very physically separated. But our idea with NH investments and our crowds is making same thing. So that is very important thing. Israel and Korea also have very good relationship with the U.S. we need to be opening up cooperation with Israel. So that was already starting to happen before October 7th. And then obviously since October 7th, you've seen this incredible flourishing in ways that were completely unexpected in areas related to defense, tech and cybersecurity that has just gone to another level. So many of those same players, the Gulf states in particular, want to piggyback onto Israel's strength in these areas even more because they've seen how successful Israel has been. And then this, the startup nation that was buzzing long before October 7, 2023, continues to do so. Up next, skiing is more popular than ever, despite the lack of snow in some of America's top ski areas. We take a look at the ups and downs of Big Ski. I'm Barry Ritholtz inviting you to join me for the Masters in Business pod. Every week we bring you fascinating conversations with the people who shape markets, investing and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market. Whether you own stocks, bonds, real estate, commodities, crypto, you really need to hear these conversations. Sometimes it's behaviorists like Dick Thaler or Bob Shiller. Sometimes it's fund managers like Peter Lynch, Bill Miller, Ray Dalio. Sometimes it's authors. Michael Lewis, author of the Big Short and Moneyball. Regardless of the conversation, these are the folks that move markets each week. That's the Masters in Business podcast with me, Barry Ritholtz. Listen on Apple, Spotify or wherever you get your podcasts. This is a story about what you gain from joining a team and what you lose when you stop flying solo. In the last 20 years, two major players came to dominate the ski industry, turning the sport from a local pastime into a global portfolio. Scarlet Fu brings us the story. This is the view at Winter Park. I mean, we are in desperate need of snow. You can see how thin that snowpack is. In the past year, skiers have dealt with record high prices, record low snow, and disruption on the slopes caused by strikes. Despite the challenges, the industry is booming, with the number of skiers rising almost 17% from 2016. And for the 60 million plus skiers visiting US resorts each winter, there is a choice to make Buy a mega megapass before the season starts. That gives you access to up to 80 mountains around the world, but leaves you at the mercy of seasonal conditions. Our job is really to have a long term relationship with our guests and so that they feel like they're making a commitment to us year in and year out. Good weather, bad weather, or go old school. Buy a less expensive pass at your favorite resort, preserving that hometown feel. It's been a great thing, I think for our industry because it's a challenging industry that we have. Ski mountains have to make a similar decision. Are they in with the megapass or are they out? The one thing that hasn't changed is you get people to come here, they get out on the hill, they go skiing, they have a great time and they want to come back whatever they decide. They have veil resorts to thank or blame. CEO Rob Katz introduced the Epic Pass 18 years ago, offering a deal to skiers and shaking up the business of skiing in the process. So it was a massive discount when we offered it at, yeah, $579. But the thinking was was that we could, at that low price point we could put many more people in the product and all of a sudden that would start to create more of a subscription model to the ski business rather than just this kind of daily feast or famine model which was the lift ticket business. Katz's relationship with Vail Resorts, now the largest ski res resort operator in the world, goes back to the 1990s, when he oversaw a deal that rescued what was then Vail Associates. Katz joined the board and became CEO in 2006. He left the company in 2021 and returned in 2025. During his first go round, he grew the company from five resorts to a portfolio of 37. I think initially the pitch was just, hey, we thought that there was an opportunity for us to really apply better management techniques to these other resorts that we bought. And two resorts that we bought initially were Keystone and Breckenridge, which were right down the road from Vail and Beaver Creek. And so the thought was also we could start actually managing them and doing it more efficiently. We could also offer some things so people could go to these different resorts and market to that in a more unified way. Vail initially targeted other neighboring resorts in Colorado. The first group of founders at Arapaho Basin hung onto the place till 72. Another independent guy owned it till 1978. And then in the late 90s, what was called Ralston Resort, which was Arapaho Basin, Keystone and Breckenridge merged with Vail Associates, forming Vail Resorts. It wasn't long before vail controlled roughly 43% of Colorado's ski areas by count. In 1997, the U.S. department of justice forced a sale on Arapaho Basin, citing Vail's excessive market concentration. Still, a basin, as locals call it, chose to continue partnering with Vail, which meant it was included in the first iteration of the epic pass. The view at that point was that the company's multiple was well below a lot of other travel companies. And there was a real sense that the ski industry was really a feast or famine business where if it snowed, you did well. If it didn't snow, you didn't do well. And actually, ski resorts had been declining in the United States from like, you know, 720 ski resorts, I think, in the late 70s, to 550 ski resorts. So the business was really struggling. And the focus was that there was not the stability and the confidence in the future of the industry because of the ups and downs of weather. So the thinking was, how could we stabilize that? And so what we came up with was really offering an incredible value to our guests by giving them a huge discount on this season pass and trading with them, right? Essentially giving them this great discount, this great value, but then also our guests taking some of the risk of weather for the rest of the season. Before Epic was introduced in 2008, a season pass at Vail Resort would cost you around $1,800. With an epic Pass today, an adult skier has Unlimited access to 42 Vail owned or partner mountain mountains around the world for just over $1,000. How did this past model change how you planned capital expenditures, how you assess risk? Overall, it made a big difference. So, you know, historically in the ski industry, you would wait to see how the ski season was, and if it snowed and you had a good year, then you'd make commitments for the following year for capital. But as we started to do well with our season pass business, we all of a sudden started to move back when we were willing to commit. So we started saying, hey, wait, we can commit to things in December or in September or in March the year before. Then came competition. In 2018, Alterra brought together mammoth resorts and Squaw Valley, now known as Palisades, Tahoe in California and Deer Valley in Utah. Soon, Alterra launched the Icon Pass, its version of the Epic Pass. Here's Jared Smith, CEO of Alter Alterra. The premise or the thesis for the business was really that there was some space in the industry for another large player. The introduction of Epic Pass by Vail was a, was a game changer for the industry. No doubt about it. It's one of those unique products that is truly win win. What we were able to do at Icon Pass was take that core model, which was 4vail of its owned and operated resorts largely, and take that and put together a network of people that didn't have to be owned by the same corporation to enjoy those same benefits. And in turn, to give consumers the opportunity to have that same exposure and that same cost benefit analysis. Across a whole variety of other resorts. The two dominant megapasses ushered in a new demographic of skiers. The new megapass is really what it did initially was drive the prices down. It's just that there are ski areas out there. There are companies out there that do want to drive guests to that mega resort pass or that multi resort Pass. And in doing so, they're trying to entice you with that great price point. It's kind of a membership, right? So I think people historically said the only, you know, the only kind of person who could buy Season Pass has to be a local. So the fact that we made the product price competitive for the destination skier, somebody coming from New York or Florida or Texas, all of a sudden they started to feel like they were a local as well. For resorts, climate unpredictability reinforced the case for the megapass, as the industry depends more heavily on capital intensive snowmaking equipment. As we started to acquire resorts in different regions, all of a sudden the pass provided access to different regions who all have different weather patterns. And so that made the pass even more attractive, where we're able to make some of the investment in the physical plants here, combined with the technology advancements that you've seen in the quality of things like snowmaking, which uses less energy and uses less water to produce actually more yield and what we're able to put on the hill. But as demand for the Epic Pass grew, it became kind of a victim of its own success. Two seasons ago, Valley sold a record number of passes. It's too early to tally up this season's pass sales, but Vail said the total number of skiers is down 20% from the same time last year. The locals don't love the whole Epic situation because of the crowds, because of the prices, because of the concentration on just finances and money. I think there's no doubt that anytime you make something more accessible and more affordable, there's an opportunity that. That you have too much of a good thing, right? And you have some people who come or lots of people who come as a result of that affordability, and they want to come at the peak times. So I think there are. There are lots of examples in the ski industry of, you know, peak windows on high holidays with great snow conditions, where lots of people want to come out and do the thing that they love that can lead to longer lines. In 2019, a basin ended its partnership with Vail, cutting off ties with the Epic Pass. Arapaho Basin opened early. It was one of the first resorts in the country. And the concept of ski resorts was very different back then. How's the skiing? Alan Hensroth is president and COO of a basin. By 2019, 2018, we felt we could really do this better not being part of Vail. Vail was a great company for us in a lot of ways, but we kind of outgrown that, and we're looking for something different. We just thought we needed more control over our passes, more control of people coming here, more control of the actual experience that all our guests were having. And Vail was such a big, successful company, they brought really more people here than we could handle at one time. So we made a change in our past relationships. In 2024, a basin completed its journey from being an independent resort to a partner of Vail to independent again. To now a partner of Alterra. For a ski area that's passed through the hands of companies big and small, A Basin is hoping for the best of both worlds, an independent feel on a Megapass. You know, of course, when the sale went down, you know, and it was almost a year leading to the closing of the sale, people were concerned. But as last year went on and they realized we weren't turning into a bunch of monsters, I think more and more people are accepting that A Basin is going to be okay and we're going to do just fine. You know, the one thing about being part of a family of more resorts is, you know, there are some people that are committed skiers and they want to buy a season pass to one place and they're satisfied with that. But I think there's another group of people that like some diversity. They want to try different resorts, they want to ski at different resorts, they want to have choices. And you know, when we decided to leave Vail, we could have been independent, but we thought people really wanted choices and we thought we'd have the best future when there were opportunities for people to take advantage of those choices. Today, you know, we have, I think roughly two thirds of our resorts fall into that independent category. Like last year, independent resorts did see an uptick in visitation, which was great to see. And we saw a little bit of, a little bit of a decline in some of our large or extra large resorts. You know, it's just the way the pendulum swings is that if you're, if you're not happy in one aspect of the sport, maybe you're going to go find something a little bit different. While A Basin joins a new team and navigates another chapter, there's still the choice to ski the old fashioned way at smaller independent resorts like Mad River Glen in Waitsfield, Vermont, which runs on a skier owned co op model and is the last remaining slope in the continental US to operate a single chairlift. We really are known for our black trails. Matt Lillard is the general manager. The co op has 3,000 shares, but there can only be 2,500 owners of those shares. So everybody that has a share gets a. You can only own a maximum of four shares, but that's still only one vote. So that's one of the key things about a cooperative is you can't have somebody come in, buy up a bunch of shares and have an outweighed, say like you would a normal corporation. What problems did the co op ownership structure solve that traditional ownership did not? I think what it does is it was able to pool the passion that the skiers have for the mountain into an entity that can take care of it. So it enabled those people to have a say in what was going on here and support it both financially and with their visits. The shareholders have a bigger say in a cooperative than they will at a publicly traded place like Vail Resorts or something private like Altera. So they get to say that we want low skier density, and that's one of their primary goals. It's written into the bylaws, it's written into the articles of incorporation. And so that's basically saying that when you're on the mountain, they don't want it to be crowded, they want to be able to ski. They don't want people whizzing by them. He said the co op sold out of shares this year, even if that means bringing skiers up one chair at a time. So I sit down? Yep. So you'll sit down, and then once you get going, close the safety bar. And that's it? That's it. That does it for us here at Wall Street Week. I'm David Westin. See you next week for more stories of capital. Sam.