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- [00:00]
Narrator/Host
Okay, before we get into it, little side note for the IT leaders listening in. I was reading up on a Microsoft Commission survey the other day and learned that teams using Windows 11 Pro PCs report 62% fewer security incidents compared to Windows 10 PCs, including three times fewer firmware attacks. Pretty significant. With security built in, you'll have AI ready it. That sets you up for operational efficiency as well as long term resilience. Upgrade to Windows 11 Pro@Windows means business.com
- [00:34]
IBM Representative
so there's a lot of noise about AI. But time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business, lets create smarter business.
- [01:03]
Narrator/Host
IBM when you're running a business, the best days are the ones where priorities stay on track. For mid size and large companies, that isn't always easy. Risk can touch multiple parts of an organization at the same time, often in ways that aren't immediately obvious. It might involve property liability or cyber. It could stem from regulatory requirements or challenges tied to a specific industry or the scale of an operation. At that level, managing risk becomes an ongoing discipline, not a one time decision. the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. That means working with companies to identify where they're exposed, decide what matters most, and put practical standards in place so risk is managed as part of day to day operations. And when losses do happen, the Hartford can pair that risk control work with insurance coverage grounded in underwriting, risk engineering and claims experience developed over time. Learn more@theheartford.com riskmitigation
- [02:05]
Bloomberg Audio Studios Announcer
Bloomberg Audio Studios Podcasts Radio News.
- [02:23]
David Westin
This is Wall Street Week. I'm David Westin bringing you stories of capitalism. If you can think it, you can code it. Generative AI brings the brave new world of vibe coding to a project near you. Plus, we're going to need a lot more power to run all that new vibe coding. And it turns out that we may get some of it from the ground under your feet and Las Vegas. It's not just for gambling anymore, but we start with the Fed, which held its monetary policy meetings this week even as it waits for its new chair to be confirmed by the Senate. Glenn Hubbard was the head of President George W. Bush's National Economic Council and then went on to run the Columbia Business School where he is now on the faculty. So, Glenn, we had the, the Federal Open Market Committee meeting and we heard from Chair Powell. They basically didn't do anything. Did they have a choice?
- [03:19]
Economist/Financial Expert
No, but, but I think they did do a few things. So they certainly didn't change the funds rate. I don't think anybody expected that or at least reasonably the battle, of course, the dissents that happened were over the Fed's statement, or at least what people perceive the Fed statement to be. Is there an easing bias? Is there a tightening bias? I think it's fair to say under the hood members of the FOMC are conflicted. Some view that the next move is going to have to be flat for an extended period, possibly even up. Others, like Governor Miron, have a different sign. So that's really what happened.
- [03:53]
David Westin
One of the things I couldn't figure out is the easing bias language that they dissented from the three members. I looked at the statement carefully. I didn't find those words in there.
- [04:00]
Economist/Financial Expert
No, I don't think it's there in black and white. I think probably this is a reading, a room kind of observation of people going on record that we really are uncomfortable with a view that it at the next FOMC meeting, or maybe even the meeting after that, that a cut is forthcoming.
- [04:18]
David Westin
They did say in the statement that there was extreme uncertainty coming out of the Middle east because of the Iran war. Is that what is driving the concern about, about rates? Or was there a preexisting issue with inflation?
- [04:30]
Economist/Financial Expert
I would give you the classic economist answer of yes, no. So, yes, the uncertainty is a problem. Oil prices are high, the US Economy is less energy intensive, but we'll still raise at least headline inflation. Let's remember inflation was stuck well above the fed's target before February 28th. So Iran adds to the problems the Fed faces, but it's not really the core problem. I think what's vexing the Fed is why it was more difficult to get inflation down before Iran. But yes, the uncertainty matters.
- [05:02]
David Westin
What about inflation expectations? Because I've seen some indications now they may be rising in the United States and even in Europe.
- [05:08]
Economist/Financial Expert
So far I think they're relatively anchored. That's a good news for the Fed and that's far more important for the Fed than whatever the inflation number by whatever measure they look at is today. But I think the risk is if the war continues and prices remain elevated, and of course we still have tariffs working their way through the system, even if the ultimate effect is to stabilize. That's going to be an inflation problem and that could unhinge expectations.
- [05:34]
David Westin
So what does this mean for the new chair coming in, Kevin Warsh?
- [05:38]
Economist/Financial Expert
Good luck. I mean, Kevin Warsh is actually well suited for this moment. He has outstanding small p political skills, consensus building skills. He's very smart. He knows these issues. I think his challenge is going to be looking at the men and women around the table, whether it's the governors or the fomc, and figuring out how to bring them together. That's going to require two things. One is his skills, which as I said, he has. But another is a theory of the case. I mean, how do you talk about the economy? I think that'll have to be job one for our new chair.
- [06:12]
David Westin
Some are interpreting that three person dissent as putting a marker down, really almost against President Trump with President Trump pressing for lower rates. So don't go too far too fast.
- [06:22]
Economist/Financial Expert
I'm not sure that that's true. I mean, it is true President Trump would prefer lower rates. He certainly has told us all that. I think it's more a matter of a sincere difference of opinion and policy. And given where we are right now with the labor market softening a little, yet we have a robust economy. Inflation is stuck. You can see why people are wondering is the glass half full or half empty? When you have uncertainty more often than not, watching and waiting until you get more information is the right answer. And I think it is here.
- [06:51]
David Westin
Is it a symmetric risk right now as you look at it, or is there a real risk of stagflation where you actually could hurt growth and still have inflation?
- [06:59]
Economist/Financial Expert
Well, there's certainly a risk of stagflation, but I would be more worried about inflation at the moment. The underlying economy is very good and the, the GDP numbers we got for the first quarter are reassuring still about the pace of AI investment and about final sales, even though the headline print is a little below expectations.
- [07:19]
David Westin
Kevin Wash comes in saying that he thinks there is room for rate cuts because of AI. How does that work?
- [07:28]
Economist/Financial Expert
Well, the story, if it's correct, is what I would call more of a long run story. So AI in the long run certainly has the potential to be disinflationary. It reduces the cost, particularly in service producing sectors. Think about the costs of producing, what lawyers do or accountants do or engineers or dare I say economists, that could all be disinflationary. The problem is that's not today, it's not tomorrow, and it may not even be a year or two from now. The immediate effect of AI is the aggregate demand effect of building data centers. The investment numbers that showed up so robust in gdp, all else equal, that raises not lowers the real interest rate and inflation is stuck. So I think incoming Chair Warsh's story make sense as a potential long run hypothesis. I don't think it could be a theory of the case for cutting rates now to cut rates now you'd have to have a view that the economy's weakening is such that that trumps small t the inflationary pressures.
- [08:28]
David Westin
There are other parts of the Fed's job besides just rates. What do we expect from Kevin Warshaw's chair in the other parts?
- [08:37]
Economist/Financial Expert
Well, I think he's signaled that he wants to take a look at least in a couple of areas or one is the size of the Fed's balance sheet, which of course ballooned enormously since the global financial crisis. That's not really as simple as saying do I want a big balance sheet or a small balance sheet? Because the Fed has proven to be the market maker of last resort in the treasury market multiple times and the treasury market is the market for the world's safe asset. Regulation perhaps unwittingly made it hard for private market makers to do the job they could be doing. So a Fed balance sheet is pretty important, but I do expect Kevin Warsh to spend a lot of time there. The other is financial regulation. Especially since the global financial crisis, the Fed got more territory in financial regulation. So there may be a look. Do we have the right rules? Do we have the right capital regime? I would expect incoming Chair Wash to take a hard to take a hard look at that. A warning though. Regulation, unlike monetary policy, is a political subject and so do expect Congress do expect the President to with good merits, have political views to balance.
- [09:45]
David Westin
For the question that's been raised by some other members of the Fed right now is the relationship of the regional Fed to the national Fed that in fact maybe there should be more power or authority or responsibility taken into Washington. Does that make sense?
- [09:59]
Economist/Financial Expert
I don't think so. I think the decentralized structure of the Fed is a feature, not a bug. Remember, the history lesson for the Fed is it was done to get points of view throughout the nation. We're a nation of different business sectors and different geographies. That said, there is a point that I think regional presidents may be communicating too much. In any organization, the top of the organization needs to set the tone internally and externally. So having a lot of debate inside strikes me as a good thing. Doing it out in the press or on television, I'm less persuaded. That's a good thing.
- [10:35]
David Westin
There's a good deal of talk about what a chair wash will do in terms of, for example, forward guidance and even number of news conferences that are held. The dot plot, things like that. How much of that is in the authority of the chair. Does that need to be voted on by the full Fed?
- [10:51]
Economist/Financial Expert
Well, he would need to get his colleagues support, but I suspect he could get it. I count myself as among those who wonder what the utility of the dot plot is and the excessive communication. There's a continuum, if you will. Chair Greenspan was quite opaque. He famously said, you know, if you thought you understood me, you must be mistaken. To Chair Bernanke, who was extremely transparent. I think probably an incoming chair Warsh wants to be somewhere in between There
- [11:20]
David Westin
one thing that incoming chair wash will have that has not been had for a very long time is a former chair sitting in the room, at least for some period of time. What will that do, that dynamic, do you think?
- [11:32]
Economist/Financial Expert
I'm not sure it's actually going to do very much. I think Chair Powell's current chair Powell's points of view are well known. He said the many times, I expect he'll repeat those as a governor and the two time he has left, I think he also is somebody who would be deferential in the way he would be to a new chair. So I don't think it's going to change things very much. Whether he leaves is a personal decision and he'll have to make it.
- [11:57]
David Westin
The independence of the Fed. We also spoke with former U.S. treasury Secretary Hank Paulson about the challenges facing the next Fed chair. Paulson agreed that Warsh has a hard road ahead, but that he is up to the task. When you have a chairman of the Fed, you want someone who understands markets, who is a good communicator, has a good understanding of sound economic principles. And I think Kevin Walsh meets those tests, right? And he's been before, he's done it now. I think his job becomes more difficult because there's independence of the perception of independence. So I think how this transition between Jay Paul, who's just been a star performer and got great credibility and integrity, I think how that transition is handled and how the administration deals with it is either going to make Kevin's job more difficult or, you know, somewhat easier, but Kevin won't have an easy job anyway. And, you know, I compliment the Trump administration on selecting him. Right. Coming up, I may be coming for a job near you, especially if You're a computer programmer.
- [13:19]
Narrator/Host
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
- [14:13]
Economist/Financial Expert
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 so there's a
- [14:32]
IBM Representative
lot of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions. Resolving 94% of common questions, not noise Proof of how we can help 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.
- [15:02]
Podcast Host (Dr. Guy Winch)
For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [15:37]
David Westin
This is a story about a double edged sword. At this point, AI is promised to do just about everything, but it turns out that it's best at creating the very thing that it is made of code. It was once considered a high skill task, but coding is now accessible to just about anyone with the help of generative AI. On the one hand, this unlocks possibilities for creating a wide range of products and businesses that otherwise might never have seen the light of day. On the other hand, it's made the future less certain for those who write code professionally. Our colleague Ed Ludlow brings us the story of what happens when we lean in and let AI do the work.
- [16:20]
Narrator/Reporter
In Upper Tract, West Virginia, Jamie Grove owns a boutique warehouse helping clients ship out anything from dinosaur bones to board games. Last year, he built software that automates shipping out packages with help from AI.
- [16:35]
Jamie Grove
Where's the order at that you're looking at there? There's absolutely no way I could have done any of this without AI for the initial run, to take some spreadsheets that we had that we were working with to get an actual workable sample ready to go took me less than a day, and we were live, and we were using it right here in the warehouse.
- [16:55]
Narrator/Reporter
In Oakland, California, Cynthia Chen wished there was an app that collects pictures of different breeds of dogs.
- [17:01]
Cynthia Chen
And then it was. When I learned about Vibe coding online is when I thought, maybe I should try it myself. The first time you see this little pop up and it says, build succeeded, and then you can see the app pop up and it's actually real. That was the sort of magical moment where I was like, oh, my gosh, this is crazy. I can actually build things myself.
- [17:23]
Narrator/Reporter
The term Vibe coding was coined by Andrej Karpathy, a founding member of OpenAI, to describe a process of computer programming akin to having a conversation with a robot. Here's what it looks like in practice. Say I want to create a website that visualizes and animates a data set. I would use a generative AI tool like Claude or Codex, or in this case, Gemini, and tell it exactly what I want using plain English. AI then writes the code for me. And as coding has gotten easier, it's led to the creation of more code than ever before. Activity On GitHub, the platform used for storing and sharing code, has seen a massive increase in activity surging in early 2025, when AI coding pilots became popular. And although Vibe coding has helped small businesses and hobbyists create their own software, it's the professionals who are leading the way.
- [18:16]
Adi Osmani
So what goes on in this building is we have a mix of folks working on Google Cloud. At Google, when we talk about autonomy and agentic engineering, we have systems that allow you to kind of have almost a virtual software engineer.
- [18:31]
Narrator/Reporter
Hold on. If all these brilliant engineers are using AI in this way, what is it that they're doing all day long in beautiful buildings like this one excellent question. Adi Osmani is the director of Google Cloud AI. He oversees teams of engineers currently building the next generation of AI tools for businesses.
- [18:54]
Adi Osmani
So if you are vibe coding, you're pretty much just giving into the vibes. You don't necessarily have a clear, full idea of your vision. You're just working with the LLM. You're trying to get somewhere with it. If you're engineering, that's where you have to apply rigor to it. You have to have this clear set of requirements you are testing. And whether you are a startup or whether you're in a big enterprise right now, the role of the software engineer is going to be evolving to one where you are increasingly a little bit more of a manager. You're going to have effectively, like a virtual team of agents that you're responsible for and you have to own the outcomes. Doesn't matter how many.
- [19:32]
Narrator/Reporter
You're responsible for the output.
- [19:34]
Adi Osmani
You're responsible for the output. Exactly. And so you need to decide, like, how am I evaluating quality? How much time am I going to spend evaluating quality? Because there are some people who very much enjoy yolo. Like, okay, well, the agents ran overnight, looks good kind of runs. I'm just going to deploy it. But if you're building any kind of serious software, you still need to have some idea of, like, what is the quality bar, what are my quality gates, how am I making sure this is actually going to meet the needs of my users in a consistent way?
- [20:06]
Narrator/Reporter
For the engineers at Google's headquarters here in Sunnyvale, California, Osmani says AI isn't just making their lives easier, easier, it's making them better at coding. The extension of that question, which we pose largely by investors, is how do we measure the productivity gains of that engineer or that team?
- [20:25]
Adi Osmani
I remember in the earlier days of AI, you know, org leaders would look at things like, oh, hey, well, how many lines of code are being generated, right? Which is not in any way a good proxy for productivity. But these days, I think that people use a mix of different kinds of metrics. You try to use qualitative and quantitative. Generally speaking, there's a big productivity boost. In the earlier days of AI, I would have said that boost is 10 to 15%. These days it's anywhere from 30 to 50%. And I see that number only continuing to go up.
- [20:57]
Narrator/Reporter
At MIT, Frank Nagel and a team of researchers surveyed over 187,000 software developers who are using GitHub Copilot, a generative AI tool, for coding. And they found that workers are more Productive because what they spend time on has changed.
- [21:14]
Frank Nagel
I think one of the big things that we often think about with AI is that it's just going to enhance productivity, right? It's going to make us faster doing whatever it is we do. But that's just really just scratching the surface. You have 100% of your time that you allocate to work. How did that break down along these dimensions of we called core work, actual coding versus more project management type of work. And what we found is that when coders started using these types of tools, they massively shift the amount of their time that they allocate to coding and they take away a whole lot of their allocated time from project management. And so part of the reason we think that this is happening is that if in the old days you were writing piece of code A, and that piece of code code was dependent on some other piece of code B, you had to wait for that other person, you had to interact with them and make sure that everything worked together, whereas now you can just write it all yourself.
- [22:10]
Narrator/Reporter
This productivity boost is particularly true for those who are writing and deploying brand new code, and especially those with no knowledge of code whatsoever, including creatives like Chen.
- [22:20]
Cynthia Chen
This is Press Petals, the new app that I'm working on. And here is a pressed flower. So I'm going to go to the Claude code that I have running and then I'm simply going to describe what I want it to do. I actually tried a whole bunch of tools in the beginning and this was about a year ago, which I think is like, feels kind of like the stone ages of vibe coding. I was able to make the foundations of the app in maybe a month and as like a totally non technical person, I was actually able to, to like build a full stack app. So there's like front end and back end capabilities and I was able to get it out on the App Store just entirely myself.
- [23:00]
Narrator/Reporter
For business owners like Grove, his Vibe coded solution is helping his warehouse save on costs.
- [23:06]
Jamie Grove
We have three main coding solutions here that we've used AI for one is to create batching, which is the important part in terms of taking orders that are different and getting them all together into groups that make that easy to pick. And then the other solution that we have is inventory tracking. So that's a standard warehouse feature, but our clients are also very different and so trying to force a client into a single inventory tracking system is really difficult. So we actually, we've used AI to build a inventory tracking solution that allows them to, to be themselves, basically So I have a pretty varied background. I started out as a programmer a long, long time ago. But even someone who is a very fast coder could not have built all these solutions. Impossible. If I were to do it with a team of programmers, I could have five programmers working on this full time and still not deliver as many results. If I were to install a software system that you does everything that we're doing now, let's just say without all the customizations and all the flexibility, we might be talking about an annual license of anywhere between 6 and $10,000 a year, scaling all the way up to maybe 30 to $50,000 a year, depending on how much volume we push through our warehouse. This doesn't have the flexibility that we would want and it's expensive. Like, for a small boutique warehouse, that's a big expense.
- [24:34]
Narrator/Reporter
Now, for about $20 a month, business owners like Grove are building their own software solutions. And whilst that's opened up new possibilities, there is a downside. Since 2022, employment for software engineers right out of college has fallen by nearly 20%. Nagel thinks companies are making a big mistake.
- [24:53]
Frank Nagel
I do think that one of the biggest risks of the whole thing is that people are going to get too far focused on the short term and not think about the long term enough. First of all, if you don't hire any new people, who's going to run the company in 10 to 15 years? But second of all, our research and others has shown that these junior people are actually the ones who are able to change their job and get the most out of using these tools. And so if we're not hiring them at the same rate we were before, then we're not going to be able to take advantage of that.
- [25:21]
Narrator/Reporter
And Chen agrees.
- [25:23]
Cynthia Chen
I feel very strongly that this is like not replacing engineers. I think the more you use AI to build, the more you understand the space and kind of even know what you can and can't do. It's like, technically I can make it, but an engineer probably could have made this in a much shorter timeline and probably with like much more robust code.
- [25:46]
Frank Nagel
From the business standpoint, I do think there's this opportunity where companies that have been thinking, thinking about things like reverse mentoring, where the younger folks can help the more experienced folks learn how to better use these types of tools, while the experienced folks are able to better help the younger folks understand how the industry works.
- [26:07]
Narrator/Reporter
If AI can write code, then what is the role of the software engineer? Osmani says, today, it's all about quality.
- [26:14]
Adi Osmani
If I want to build A robust engineering artifact, something that's going to last time, something I can ship to hundreds of millions of users, or billions of users. There are a lot of things that it needs to factor in. And so what people in buildings like this are doing all day long are trying to make sure that the code is actually meeting that quality bar, so that when we do ship something to you that happens to be using AI, behind the scenes, you're actually getting what you want. That's the important thing for the users. At the end of the day, they don't care if a human's been altering it or AI's been altering it. Does it help them get the job done in a reliable way?
- [26:47]
Narrator/Reporter
Is Vibe coding a term that's therefore used? Is it banned within?
- [26:52]
Adi Osmani
Absolutely not. I think that vibe coding has a lot of value. Vibe coding is enabling people to go from idea to execution faster than ever. And it has completely changed how many teams approach prototyping so many times. In the past. In Silicon Valley and lots of places, if you had an idea, you'd go through weeks or months of just discussing or debating, hey, can we afford to build this now you can just build it. And I think that it has a very concrete place in our language now. It's just important that you understand that vibe coding a thing does not necessarily mean that you have a production ready artifact that's going to be battle hardened.
- [27:32]
Narrator/Reporter
In Silicon Valley, the test of AI's progress is true autonomy to start a project in the evening and wake up in the morning to code written autonomously by an AI agent. A dream for senior software developers and perhaps a nightmare for entry level computer engineers who would have once done that work themselves. But for us non coding mere mortals, the moment could be ripe to do what mankind is best at, building and creating.
- [28:05]
David Westin
Up next journey to the center of the earth, or at least toward it. Geothermal may be an important part of what gets us the energy we need to power all that AI.
- [28:24]
Narrator/Host
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
- [29:18]
Economist/Financial Expert
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 the thing about
- [29:37]
IBM Representative
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. Let's create smarter business.
- [30:05]
Podcast Host (Dr. Guy Winch)
IBM for many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [30:44]
David Westin
This is a story about resourcefulness in the quest to feed AI data centers, the US Is looking to get more power from from just about everywhere it can, from fossil fuels to wind and solar to nuclear. But it turns out that an important part of the puzzle lies beneath our feet. Our colleague Michael McKee takes us into the promising and developing world of geothermal energy.
- [31:08]
Geothermal Energy Reporter
This is not a goldmine, but in an age of power hungry data centers desperate for energy, it might be even better. So what are we looking at here?
- [31:19]
Economist/Financial Expert
The Omat geothermal power plant in Steamboat,
- [31:23]
Geothermal Energy Reporter
where we have to generate electricity. How much electricity do you produce here?
- [31:30]
Economist/Financial Expert
In the entire Steamboat area, we've produced between 80 to 90 megawatts.
- [31:35]
Geothermal Energy Reporter
That's enough to power more than 50,000 homes a small city. Ormad Technologies is one of America's largest geothermal companies, with plants throughout the Southwest, the hotbed of the country's geothermal activity.
- [31:49]
Economist/Financial Expert
These are the heat exchanger.
- [31:51]
Geothermal Energy Reporter
Duran Blashard is the company's chief executive.
- [31:54]
Economist/Financial Expert
We operate 247 every day, regardless of the sun, regardless of the wind. And that's the main benefit that you get from geothermal. A steady 24. 7 electricity.
- [32:07]
Geothermal Energy Reporter
Led by the hyperscaling of AI installations, electricity demand in the US is projected to grow by as much as 20% over the next decade. Analysts say that means the country needs an all of the above approach to power generation. And on the list of potential sources, geothermal stands out for being a clean source of constant or baseload power.
- [32:30]
Energy Expert
We need baseload power, and that's the sweet spot that geothermal brings us. You don't have to worry about it. If the sun's not shining, if the wind's not blowing, it allows that baseload that every grid needs to operate.
- [32:46]
Geothermal Energy Reporter
So far, geothermal is just a small piece of the US power generation mix, producing less than 1% of total utility scale electricity. But demand and technology are changing the outlook. Geothermal energy is the heat of the earth and it's been used for millennia.
- [33:05]
Economist/Financial Expert
Hot spring systems were used by the
- [33:08]
Geothermal Energy Reporter
cavemen to cook their food. Until now, the industry has largely been confined to the rare places where hot water and permeable rock come together in underground reservoirs like this site outside of Reno, Nevada. Now, enhanced geothermal systems, or egs, have the potential to give nature an assist. Much of the work has been pioneered at Utah Forge, a Department of Energy funded field lab. Joseph Moore is its principal investigator emeritus. The conventional geothermal systems, these are also called hydrothermal systems or hot spring systems,
- [33:45]
Economist/Financial Expert
have the natural fractures that allow water
- [33:48]
Geothermal Energy Reporter
to move through the rock, extract heat,
- [33:51]
Economist/Financial Expert
and then come to the surface.
- [33:54]
Geothermal Energy Reporter
Enhanced geothermal systems are not associated with hot springs.
- [33:59]
Economist/Financial Expert
These are areas where fractures don't extend
- [34:03]
Geothermal Energy Reporter
to the surface and are not abundant enough to allow water to circulate in the subsurface. We have to make the fractures in order for the water to move through them. And this can be done almost anywhere in the world if we drill deep
- [34:21]
Economist/Financial Expert
enough to reach the temperatures that that we need.
- [34:25]
Geothermal Energy Reporter
Typically, these temperatures are in the order of 400 degrees F and higher. To do that, EGS companies are turning to the oil and gas industry, which increased production by inventing the technique of fracking.
- [34:42]
Industry Executive (Cindy Taft)
The fracking actually creates that permeability that you need to flow the water through the rock in order to harvest the heat.
- [34:50]
Geothermal Energy Reporter
Cindy Taft is the CEO of Sage Geosystems, a next gen geothermal and energy storage company. After spending 35 years at Shell, she is now using her knowledge of oil drilling to partner with ormat.
- [35:04]
Industry Executive (Cindy Taft)
We're going to be drilling adjacent to their conventional geothermal field and then putting our production, which will be hot water, into an existing power plant. And the reason why we're excited about that is it it expedites our ability to have a commercial project by at least a year and a half because we don't have to acquire land, we don't have to build a power plant, we don't have to have a grid interconnection. We're going to be drilling the wells later this year, if not early next year, depending on the permitting timeline. And we're going to be flipping the switch in 2027. And so this partnership is really going to open up the ability, ability to scale commercially around the world because of Ormat's footprint.
- [35:47]
Geothermal Energy Reporter
If Sage can provide the hot water, Ormat will use it to generate power.
- [35:52]
Economist/Financial Expert
We signed with them a collaboration agreement basically allowing us, once they are successful, to use their technology and build a power plant. Joining forces with Sage, having them bring the experience and knowledge from the oil and gas industry, combining with the geothermal that we bring, we do believe that
- [36:11]
Geothermal Energy Reporter
we get a winning partner. As the technology begins to prove itself, other private capital is moving in behind it. With next generation geothermal attracting more than one and a half billion dollars since 2021.
- [36:25]
Energy Expert
A company called Fervo now has has their drill site located very closely to the Forge site. They're drafting off of that new technology and it's gotten better and faster and cheaper already. And so that's how these things are working together. Now Fervo has a 400 megawatt plant that they're building right now, which is incredible. The investments are there, and so it's going to take less subsidies because these companies don't need the subsidies, they just need the power and they need it really quickly.
- [36:57]
Geothermal Energy Reporter
In Utah, Governor Spencer Cox wants to make his state an energy and business hub with geothermal. An important part of that plan.
- [37:05]
Energy Expert
We understand the demand for energy right now. It's why we in Utah launched something called Operation Gigawatt about two years ago. We know we have to double Utah's energy production over the next few years in order to compete with the rest of the world and to make sure that our citizens have the technological advancements that are happening out there and that they have low cost.
- [37:26]
Geothermal Energy Reporter
It helps Utah and Nevada that much of the land where EGS geothermal can be developed with belongs to the US Government. And the Bureau of Land Management is making more of that land available. Demand is running ahead of supply. Average leasing prices paid surged almost 300% last year.
- [37:45]
Energy Expert
That's one of the things that we're finding out. Look, there are a lot of states who give giant subsidies away to attract businesses. We're not like that in the state of Utah. We do have some subsidies like every state. But we understand that what people really need is, is speed. And they need assurances that we're not going to pull the rug out from under them, that we're not changing our regulatory scheme every few months, that it's a place where it's easy to do business and deploy capital.
- [38:11]
Geothermal Energy Reporter
Geothermal is also politically palatable. At the same time that Washington is opening up more land for geothermal development and continuing tax credits supporting it, it's pulling back support for wind and solar.
- [38:24]
Energy Expert
It's one of those rare forms of energy where there's no opposition at all. The far right is opposed to wind and some solar. The left is opposed to coal and some nuclear. Finally we have this energy source that everybody believes in, that everybody loves. We just didn't have a way to produce it at scale in enough places. And because of humans, human ingenuity, because of this abundance mindset that we're starting to get as America again, we're getting baseload power at scale, that prices are coming down because the technology is getting easier and cheaper and faster.
- [39:04]
Geothermal Energy Reporter
Still, as with any source of power, there are risks that come with geothermal energy. Most important, concerns over access to water and its use. TD Cowan sustainability and disruptive technology analyst Jeff Osborne covers Ormat.
- [39:19]
Economist/Financial Expert
Geothermal historically is out in the middle of the desert, typically in vast expanses of land and not the most accessible for water. So a big risk for investors to monitor is where's the water going to come from and if we need an additional water source, is that available as a backup plan and what's the cost of that and what's the political ramifications as it relates to future permitting approvals? And so as we move into new geographies that maybe are less familiar with geothermal thinking, like a state like Texas, that the water availability in West Texas where some of these data centers are coming in is certainly going to be an issue. And so that's where learning comes in from some of these initial projects that are being done by the likes of Fervo and what Ormad will have with the Sage and Schlumberger partnerships, they'll be able to take some of that data and then hopefully convince A investors, but B both local and state level politicians that this is something that should be approved to move forward with. Typically things around water and Grid interconnection are two of the key punch list items that investors are going to want to understand. When does it start producing a profit for investors?
- [40:35]
Industry Executive (Cindy Taft)
Once it starts, we can start scaling, which actually is very soon after this first commercial pilot. I would say we can scale in the next two or three years to 400, 500 megawatts. That's when the returns will really come for investors because as you scale of course you can drive costs down because of the efficiencies during scaling. We have a term sheet for with Meta for 150 megawatts for one of their data centers. They're already in need for more power at that data center because some of the solar production has dropped out. And so we've got an agreement with them. We're also working with the Department of War and they're very interested in behind the fence power that's easily defendable. And because a lot of our equipment is below ground and it doesn't have a big surface footprint, it will help to solve the supply demand mismatch that you currently see in the power markets. Being baseload, there's a huge demand. Geothermal is just a huge untapped resource.
- [41:44]
Geothermal Energy Reporter
Next generation systems could be a game changer in the renewable energy industry, especially if everybody is on.
- [41:52]
Energy Expert
Good news is that Democrats support this now. So this used to be just a partisan issue. It was just Republicans who cared about this. Now it's a bipartisan issue. Members of Congress from both parties are pushing towards this. This is a technology that is bringing us all back to the table, bringing us all together, bringing investment at every level. And I think the future is bright for our country.
- [42:16]
David Westin
Coming up, playing the odds. Whether it's in a casino or in what's next to the casino, Las Vegas is reinventing itself yet again.
- [42:26]
Jason Strauss
Vegas as a whole is extremely elastic. Vegas isn't going anywhere.
- [42:37]
Narrator/Host
Support for the show comes from public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called generated assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by
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Economist/Financial Expert
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 so there's a
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IBM Representative
lot of noise about AI. But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a global workforce of 300,000 can use AI to fill their HR questions, resolving 94% of common questions, not noise proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [44:18]
Podcast Host (Dr. Guy Winch)
IBM for many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In season three of the Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of the Visibility Gap, a podcast presented by Cigna Healthcare.
- [44:54]
David Westin
This is a story about taking a chance, having a shot at wealth and success. Something at the heart of of what many consider the American dream and something built into the very foundation of Las Vegas, Sin City, which for over a century has drawn visitors from all walks of life.
- [45:20]
Economist/Financial Expert
What brings me to Vegas?
- [45:21]
Cynthia Chen
Well, my husband and I were married here.
- [45:23]
Narrator/Host
We're here on a girls birthday.
- [45:25]
Adi Osmani
We came here to party. We.
- [45:26]
Economist/Financial Expert
We partied. You see, we've got pirates coming from all around the world.
- [45:33]
David Westin
Beneath the bright lights and the constant buzz of the Strip, the city itself is taking a chance at reinvention as signs of slowdown in its core business start to surface. To understand the Las Vegas of today, you have to go back to where it all began. And few have followed that story like screenwriter and journalist journalist Nick Pileggi.
- [45:53]
Nick Pileggi
After the Second World War, with air conditioning allowing these places to remain open 12 months a year and aviation advancing, it changed the whole economy of going to Las Vegas and allowed people to begin to invest money. It was the only place in America where you could gamble legally. Every illegal bookmaker all around the country, all of whom were fully operational and had all the political and police connections they needed to operate in the open. Really, they all went to Las Vegas
- [46:31]
Economist/Financial Expert
where they were legit.
- [46:33]
Nick Pileggi
It was an amazing moment.
- [46:36]
David Westin
It was the start of the infamous mob era, A world Pelagi would later chronicle in the Academy Award nomination nominated film casino.
- [46:45]
Podcast Host (Dr. Guy Winch)
Who could resist? Anywhere else in the country?
- [46:47]
Economist/Financial Expert
I was a bookie, a gambler, always
- [46:49]
Podcast Host (Dr. Guy Winch)
looking over my shoulder, hassled by cops day and night.
- [46:52]
Jason Strauss
But here I'm Mr. Rothstein. I'm not only legitimate, but running a
- [46:56]
David Westin
casino, and that's like selling people dreams for cash. All of us have heard about the time of the mob in Las Vegas. How much of that is myth and how much of that is reality?
- [47:05]
Nick Pileggi
Well, it's. It's mostly reality. When it came time to open casinos, maybe, or expand casinos in Las Vegas because of air conditioning and the new aviation, where were you going to get that cash? Who was going to invest? Banks were not investing in casinos because casinos were immoral. So you couldn't go to a real bank. You couldn't go to Jamie Dimon and say, I need $200 million. So the only cash you really had came in cash from the men who had originally made their wealth in Prohibition. And they were doing legitimately what they had been doing basically illegitimately. It's really a sort of slice of the free enterprise system at work. And it just kept getting bigger and bigger until it got so damn big, the government said they're making too much money. And the government legalized illegal gambling and has taken it over and of course, not dealing with it as well as the mob guys did.
- [48:10]
David Westin
From mob money to corporate capital, Las Vegas kept evolving. But now, in the age of online gambling, when a casino fits in your pocket, what's next? Fed President Mary Daly oversees the Federal Reserve's western region.
- [48:24]
Bloomberg Audio Studios Announcer
The economy of Las Vegas is the kind of economy that if the US Sneezes in, it usually gets a cold or maybe the flu. And so we're seeing some of the things that are playing out in the US Economy play out here in Vegas. I think that the Vegas residents are a little worried about that. But, you know, Vegas reinvents itself regularly, so they're not depressed.
- [48:45]
David Westin
At the center of Las Vegas latest reinvention is entertainment. And one of the biggest players is the Tao Group, a hospitality and entertainment company known for operating restaurants and nightclubs. Jason Strauss is the group's co founder. You didn't start in Las Vegas.
- [49:00]
Jason Strauss
No we started in New York City. Our first two venues was Tao Restaurant in Midtown and Marquee Nightclub, which I'm proud to say 21 years later, is the longest running nightclub in New York City history. And we have one here in Las Vegas.
- [49:13]
David Westin
Why did you pick Las Vegas? Because we mostly think about Las Vegas for gambling.
- [49:17]
Jason Strauss
Well, back then, we saw a small inkling of nightlife and the need for stylized dining. It was just starting. There was a lot of celebrity chefs back then, and NightLife was maybe one or two nightclubs on the Strip. But we saw a real need for it. And frankly, we were right. We hit it right on the nose. The timing was amazing. This is going back 20, 21 years. We opened with the first restaurant and nightclub combination together. We were the first really to, like, merge and marry those two concepts. And within the first year, we're the highest grossing restaurant in the United States. So we had a lot of success with that.
- [49:48]
David Westin
Tell us about the evolution. I mean, how fast did it happen? How. How big has it got?
- [49:52]
Jason Strauss
Oh, man, in 20 years, it's been an evolution. When I was out here, maybe two or three nightclubs. We now have 16 to 17 venues on the Strip, depending on how you classify a lounge or a day club or a nightclub. Now there's. This is the nightclub capital of the world and the stylized dining capital of the world.
- [50:08]
David Westin
Is it continuing to grow? I mean, what's been the pattern of growth, just measuring by how many people you have coming?
- [50:14]
Jason Strauss
Well, yeah, it has continued to grow. We're dealing with a particular segment. We say premium segment. That's really looking for experiential. I mean, this nightclub that we're in right now, Omnia is the highest grossing nightclub in the country. And we have hit our best number every year for the last three years here and here at Omnia. So this is a really good indication of where things are and where it's going.
- [50:34]
David Westin
When you say best number is that both in total revenue and in revenue per customer.
- [50:40]
Jason Strauss
Gross net sales.
- [50:41]
David Westin
Gross net sales.
- [50:42]
Jason Strauss
Gross net sales.
- [50:43]
David Westin
And you measure also how much revenue you get per customer?
- [50:47]
Jason Strauss
Yeah, there's a price point, there's a price per head, but that that differs on day of the week. You know, there's a different customer in Vegas every weekend based on convention scheduling. So it depends on the time of year, who the talent is, sort of other factors that come into town, if there's a UFC fight in town. So all those things factor into different sort of per head numbers.
- [51:08]
David Westin
A lot of the people who follow Bloomberg are concerned about Business cycles, they go up and they go down. Are you vulnerable to business cycles or are you outside of business cycles?
- [51:18]
Jason Strauss
You know, I think we, we live in a particular demo of premium where people have disposable income for experiential. So I think we're insulated a bit. But listen, Vegas as a whole is extremely elastic. Vegas isn't going anywhere.
- [51:34]
David Westin
Look at this. And now Tao is doubling down. I get it. Yeah, that'd be pretty nice. Making. Making its biggest bet yet with its newest venture, Omnia Day Club, set to open later this month.
- [51:45]
Jason Strauss
46,000 square feet of cabanas, daybeds, pools. And up on that platform up there is our Omnia sky deck.
- [51:55]
David Westin
Day clubs have become one of the biggest entertainment formats in Las Vegas. Daytime party venues that combine elements of the city's famous nightlife scene with its pool Club featuring DJs, cabanas and high energy crowds. But even as Las Vegas leans further into entertainment, the signs of softening demand are hard to ignore. Visitor numbers are down 7% in 2025, the sharpest annual decline outside the pandemic. There are reports of some softness in occupancy and things like that. How true are they? Because you monitor these things. What do you look at?
- [52:30]
Bloomberg Audio Studios Announcer
It's definitely weaker than it was last year. And that they have many factors that are affecting it. There's international tourism has just dropped to the United States. Then you have, you know, the households who are making 50th percentile or less in household income, they're just making trade offs. You know, they have to. Gas prices are higher, other goods and services are higher. And they get here and they're like, okay, I'm going to pay for this experience, this show, but maybe I'm not going to spend as much at restaurants. Maybe I'll be bring food into my hotel room. And so other aspects of this are hurting a little bit. But again, Las Vegas is used to this.
- [53:07]
David Westin
In a city built on volume and discretionary spending, even small pullbacks can have an outsized impact. Since the pandemic, Las Vegas unemployment has remained roughly a percentage point above the national average. As you look from your perch at the, the Federal Reserve at the economy of Las Vegas, what are the major component parts? What do you really pay attention to? There's gaming, obviously. And you say not so much gaming, some other things.
- [53:31]
Bloomberg Audio Studios Announcer
Yeah. So I look at travel and leisure. So what are they doing in travel and entertainment? How are these different pockets doing? Then I also look at technology and not so much the coding and things, but the Infrastructure, you know, are they attracting investments in things like data centers or they have a technical, you know, interest here. They want to build technology out because it's just a great place to put technical things. So they're working on that. Then there's the. All the support parts of the economy that are here to help the gaming and entertainment industry thrive. So even if you're not directly working in travel and at leisure on the Strip, you're actually supporting the broader economy by doing distribution and supplies. And so their economy is really built on that. But if you ask, what's the one thing, thing they would get worried about, it's are the flights coming in, are the guests coming? Because that drives a lot of their economy. The technology is something they're looking to build to, but it's not something that's driving their economy.
- [54:25]
David Westin
We see a lot of development always in Las Vegas. You said it's always reinventing itself. It is always reinventing buildings getting torn down and big buildings being built up. One of the things we've heard is that Las Vegas has been sort of advanced in minimizing the regulatory, regulatory constraints, the permitting of things. And we've talked to people who say they're building things here much faster than in some other parts of your district, like Los Angeles or San Francisco.
- [54:48]
Industry Executive (Cindy Taft)
Absolutely.
- [54:48]
David Westin
How true is that?
- [54:49]
Bloomberg Audio Studios Announcer
It is true. So one of the things that we know is that, you know, there's federal laws about zoning and other things. But most of the zoning and where you can build and how you can build and what kind of light fixtures you have to have, that all comes from localities or states and Vegas, because they need to reinvent themselves, themselves and bring this, these new buildings along. That's part of their attraction. They have to be faster, they have to be better. They have to be less expensive.
- [55:15]
David Westin
That combination of speed, quality and affordability sets Las Vegas apart. And Jason Strauss says it's why projects at the size and scale of Taos New Day Club can happen here.
- [55:26]
Jason Strauss
I don't think I need to tell you anything more. You can just look at where we are and how we are doing. Just dead center of the middle of the Strip. All the famous lights and sound that make Las Vegas Strip famous. We're right in the middle. And here on the Omnia sky deck, you're completely immersed in it. You can have food and drink. You can enjoy it any day of the week, open seven days a week. And this, we think, is going to be a really special experience.
- [55:48]
David Westin
It's experiences like these that have long drawn people to Las Vegas, a city built on reinvention, risk and the willingness to take a chance on what comes next.
- [55:59]
Nick Pileggi
I think it's the most American thing
- [56:01]
David Westin
we've got, isn't it?
- [56:04]
Nick Pileggi
I mean, it's kind of frontier. It has the cowboy world to it. It's got everybody's got a shot. It's sort of like it's America in miniature because so many different people go there, right from all over the country. So it's like an America for America.
- [56:28]
David Westin
That does it for us. Here at Wall Street Week, I'm David Westin. See you next week for more stories of capital. If you follow markets, you know the
- [56:52]
Geothermal Energy Reporter
value of long term thinking.
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David Westin
You plan, you diversify, you prepare for volatility.
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Frank Nagel
But even the best strategies can't prevent every bad day.
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Geothermal Energy Reporter
For more than 75 years, Cincinnati Insurance
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David Westin
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Frank Nagel
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Geothermal Energy Reporter
Cincinnati insurance companies let them make your bad day better.
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David Westin
Find an agent@cin fin.com these days it
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Podcast Host (Dr. Guy Winch)
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David Westin
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Podcast Host (Dr. Guy Winch)
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David Westin
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David Westin
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David Westin
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