Latest / Bloomberg Intelligence / Biden Set to Hit China EVs With Tariffs

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Biden Set to Hit China EVs With Tariffs · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am
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  Speaker 2: Let's stay on the Ebie discussion. We can do that
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  Speaker 2: with Steve Mann at Global Autos and Industrials research Channels
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  Speaker 2: for Bloomberg Intelligence joining us from Princeton, Jersey. We got
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  Speaker 2: a little camera down there, so that is an incentive
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  Speaker 2: for the folks to stay in Princeton. I guess Steve Man.
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  Speaker 2: Don't get me started. Steve Man joins us though, Hey, Steve,
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  Speaker 2: talk to us about I guess President Biden. We're talking
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  Speaker 2: about tariffs on China evs and other strategic sectors. What's
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  Speaker 2: going on there.
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  Speaker 3: It's not surprise that they're going to do that. In
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  Speaker 3: terms of the impact on the Chinese automaker, obviously nothing
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  Speaker 3: because they don't sell any vehicles to the US at
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  Speaker 3: the moment. They have no plans to, you know, byd
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  Speaker 3: actually explicitly said they have no plans to actually sell
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  Speaker 3: cars in the US at the moment. The only impact
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  Speaker 3: is really on the battery side. But I think what
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  Speaker 3: the government is trying to do is really to protect
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  Speaker 3: a lot of investments that's already been made to onshore
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  Speaker 3: EV battery production. You know, through the Inflation Reduction Act,
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  Speaker 3: there's over one hundred billion dollars already spent on on
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  Speaker 3: shoring EV battery and other supply chain components for evs
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  Speaker 3: into the US. So I think, I think for automakers
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  Speaker 3: there's no impact, but it's it's it seems like it's
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  Speaker 3: more about posturing for for for the election later this year.
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  Speaker 4: I have so many thoughts and feelings on this, but
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  Speaker 4: I do think the timing is so interesting. So we
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  Speaker 4: break the story on the day that Zeker is going
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  Speaker 4: public in the US market. I don't know that that
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  Speaker 4: feels you can buy stock of a China EV's company,
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  Speaker 4: but you can't buy the China evy car.
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  Speaker 5: Uh. Is that weird to you?
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  Speaker 3: Uh, It's probably a good option to have, I think.
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  Speaker 6: Uh.
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  Speaker 3: China EV sales is still growing relatively strong. I mean,
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  Speaker 3: it's slower this year than last year, but it's it's
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  Speaker 3: you know, it's it's no different than what Neil has done,
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  Speaker 3: what x Punk and Lee Auto has done. All these
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  Speaker 3: companies have listed in the US. I think for the
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  Speaker 3: most part, the purpose of this listing is really to
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  Speaker 3: build the brand Cachet. You know, they can actually say
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  Speaker 3: that we're a US listed company that goes really well
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  Speaker 3: with a lot of the Chinese consumer. So if you
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  Speaker 3: look at some of the sales Neil sales, Lee Auto
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  Speaker 3: and Xpunk sales after they listed in the US, they
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  Speaker 3: actually jumped uh in their in their home home turf.
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  Speaker 2: I have to backtrack. I mean, you know, Alex is
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  Speaker 2: way ahead of me on this. Can you tell me
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  Speaker 2: what Zeker is for the It's the first time in
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  Speaker 2: my life I've heard about the Zeker. It's a Chinese
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  Speaker 2: manufactured electric car. Correct, that's right.
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  Speaker 3: It's a premium evy maker. It actually comes competes with
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  Speaker 3: the Tesla and the Neil Neils and they sell around
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  Speaker 3: on average around the thirty seven forty dollars US dollars
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  Speaker 3: per vehicle. It's part of Jili, the parent company of
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  Speaker 3: the listed Jili Auto one seven five HK, So this
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  Speaker 3: is part of the Jili. It's you know, a lot
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  Speaker 3: of the actually a lot of the technology that Zeker
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  Speaker 3: has is also part of Vovo they're head of R
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  Speaker 3: and D is actually in Gothenburg, Sweden.
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  Speaker 2: All right, Just for the IPO folks out there, this
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  Speaker 2: is a company. They priced their IPO last night at
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  Speaker 2: twenty one dollars a share. We just got a spread
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  Speaker 2: just popped up on my terminal. Bid twenty three, ask
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  Speaker 2: is twenty five has not opened yet, that's where the
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  Speaker 2: bid ass spread is. Won't keep you up to date
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  Speaker 2: on that throughout the day. So again, a cool new
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  Speaker 2: IPO out there, which is good Goldman Sachs, Morgan Stanley,
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  Speaker 2: Bank of America and China International Capital Corporate the underrator,
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  Speaker 2: So some big time name supporting this company.
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  Speaker 4: What's interesting is that Glee, the parent company, said it's
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  Speaker 4: indicated it will subscribe to more than ninety percent of
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  Speaker 4: the stock.
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  Speaker 5: So yeah, so clearly that's still.
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  Speaker 4: Wariness that exists in the EV market when that takes place.
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  Speaker 5: Here is my deep question. It's not very deep, by
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  Speaker 5: the way. If your goal is to.
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  Speaker 4: Decarbonize the world as fast as possible, why would you
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  Speaker 4: not flood the US market with the EV with cheap
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  Speaker 4: China EV cars. And if that's not the goal, and
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  Speaker 4: you want to green the economy, but also do it
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  Speaker 4: profitably for US companies.
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  Speaker 5: That's okay. Just let's say that. I mean, is that?
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  Speaker 5: Can I say that out loud? Can I say the
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  Speaker 5: quiet part out loud? Steve? Does this make sense to you?
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  Speaker 7: Yeah?
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  Speaker 3: I mean I think you have a very legitimate question.
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  Speaker 3: But I think you know, with with the geop uh
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  Speaker 3: wrangling between the two countries, uh, you know that that
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  Speaker 3: that so you know this comes to play, right, you know,
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  Speaker 3: do we flood the US? Do we protect the US industry?
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  Speaker 3: I think I think especially during this year when there's
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  Speaker 3: a lot of you know, to and fro on related
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  Speaker 3: to the election, I think there's gonna be more and
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  Speaker 3: more discussion around you know, do we let you know,
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  Speaker 3: Chinese products come in for example, Evy batteries and solar panels.
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  Speaker 3: So it's a very legitimate question. I think the government
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  Speaker 3: will have to answer that for you.
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  Speaker 2: All right, Steve, thanks so much for joining US. Steve
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  Speaker 2: Man Global Autos and Industrials Research Channels for Bloomberg Intelligence.
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  Speaker 2: You know, Alex I was up in Boston yesterday meeting
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  Speaker 2: with some of the really smart folks at BCG Boston
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  Speaker 2: Consulting Group, and one of the folks I spoke to
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  Speaker 2: was Ahead of their EVY consulting practice, and he acknowledged
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  Speaker 2: that the industry you know, probably put out some inferior products,
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  Speaker 2: didn't price them. Well, there's a lot of you know,
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  Speaker 2: the kind of a bumpy start to send the ev business.
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  Speaker 2: But he says that being said, a lot of good
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  Speaker 2: product is coming. Oh yeah, they're figuring out and they
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  Speaker 2: will lower their cost structure. And he thinks ultimately, you know,
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  Speaker 2: within a reasonable period of time, whether that's five years,
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  Speaker 2: ten years, he thinks forty percent of the cars in
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  Speaker 2: the US will be EV's. Oh interesting, So that's and
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  Speaker 2: I've heard that number a little bit more frequently recently
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  Speaker 2: because people are trying to make the sense we could
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  Speaker 2: ever beat a one hundred percent EVS And I think
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  Speaker 2: ultimately some people would like you to believe that, but
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  Speaker 2: that may or may not happen. But I kind of
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  Speaker 2: where they're coming from. They're kind of thinking about forty
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  Speaker 2: percent within that you know, kind of ten ten year time.
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  Speaker 1: I want to think about the implications for electricity production,
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  Speaker 1: the grid and balancing the grid.
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  Speaker 5: You were talking to the right people, Yes, they need
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  Speaker 5: more of it.
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  Speaker 4: And you want to know why utilities are some of
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  Speaker 4: the best performing stocks in the SMP this year.
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  Speaker 5: I mean they're defensive names. Are they defensive anymore?
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  Speaker 4: They're growth stocks now they have actual growth in their
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  Speaker 4: business because of stuff like EV's.
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  Speaker 5: I have so many more thoughts.
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  Speaker 1: You're listening to the Bloomberg Intelligence Podcast to catch us
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  Speaker 4: Joanne Shu joins us. She's University of Michigan Surveys of
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  Speaker 4: Consumers Director.
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  Speaker 5: This is her numbers. She does the data.
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  Speaker 4: Joanne, can you just walk us through that decline of
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  Speaker 4: US consumer sentiment right at a six month low?
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  Speaker 5: Now? What let us here?
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  Speaker 7: So it's not just the worst of both worlds. I
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  Speaker 7: would say it's the worst on a number. It's worse
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  Speaker 7: on a number of dimensions. Not only do consumers expect
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  Speaker 7: inflation to rise a bit in the year ahead, but
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  Speaker 7: they are also expecting unemployment to worsen, and they're also
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  Speaker 7: expecting interest rates to rise, and so these are all
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  Speaker 7: things that had kind of been in a holding pattern
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  Speaker 7: for most of twenty twenty four, and suddenly in the
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  Speaker 7: month of May, consumers are seeing a deterioration on all
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  Speaker 7: of these dimensions.
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  Speaker 2: So JO just like to call out the magnitude here again,
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  Speaker 2: the consensus was seventy six point two for the University
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  Speaker 2: Mission Sentiment Indicator seventy seven point two. Last period, it
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  Speaker 2: came in its sixty seven point four and on an
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  Speaker 2: order of magnitude, I don't remember seeing those types of
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  Speaker 2: variances in the past. How unusual is this may reading
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  Speaker 2: to you.
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  Speaker 7: This is a statistically significant to decrease, but I wouldn't
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  Speaker 7: call it a plummeting or a plunge. It definitely feels
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  Speaker 7: like that because the last four months, you know, since January,
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  Speaker 7: we've been only seeing little wiggles of one two points
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  Speaker 7: per month. Essentially, we've had no change for four months,
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  Speaker 7: and prior to that we had two months of really
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  Speaker 7: strong surges. So this is the first real downward movement
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  Speaker 7: we've seen in quite a bit of time. So I
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  Speaker 7: think it is jarring to people who watch the data,
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  Speaker 7: but it's not a plunge. It is a decline. It
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  Speaker 7: is a signific can decline, but it's not a plunge.
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  Speaker 4: You mentioned that those surveyed are worried about interest rates,
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  Speaker 4: and they're worried the interest rates are going to rise.
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  Speaker 4: Am I hearing that correctly, not that the Fed is
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  Speaker 4: going to keep them steady or not cut, but they
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  Speaker 4: expect higher interest rates.
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  Speaker 7: Well, more people expect higher interest rates than last month.
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  Speaker 7: Fewer people expect interest rates to fall, so I believe
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  Speaker 7: about only about a quarter of consumers expect interest rates
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  Speaker 7: to fall in the year ahead. So overall, consumer expectations
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  Speaker 7: over interest rates are worse than they were last month.
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  Speaker 2: Joanne, thank you so much for joining us. Really appreciate
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  Speaker 2: you hopping on there. Joinshew, Surveys of Consumers Director for
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  Speaker 2: the University of Michigan.
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  Speaker 4: You're having S and P just up by two tens
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  Speaker 4: of one percent, so we're definitely off the highs, but still.
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  Speaker 4: Kim Forrest, founder and CIO Booth of Capital Partners joined us. Now,
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  Speaker 4: Kim help me understand what's happening survey data, ism services,
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  Speaker 4: and if I be youmish pointing to things that are
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  Speaker 4: not that good. Equity market still near record highs, corporate profits,
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  Speaker 4: high earnings holding up really really well.
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  Speaker 5: What gives.
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  Speaker 6: Well?
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  Speaker 8: I would say that the investors are looking past this
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  Speaker 8: information and they are planning for a longer time period
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  Speaker 8: than the consumer.
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  Speaker 6: We'll put it that way.
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  Speaker 5: But does that mean that? So how do you trade
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  Speaker 5: on that?
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  Speaker 4: Like, do you trust the underlying data and say, look,
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  Speaker 4: I mean the survey data and say, okay, maybe we're
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  Speaker 4: going to hit some speed bumps, I mean, protect myself
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  Speaker 4: for that.
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  Speaker 5: Or do you say it.
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  Speaker 4: Doesn't matter because these themes, even momentum and effect, a rotation.
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  Speaker 5: Or AI, all of that just going to outweigh it.
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  Speaker 6: I think it's a little bit of both.
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  Speaker 8: First, I think that the con zoomer once again is
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  Speaker 8: being shocked by things they do pretty much at least
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  Speaker 8: once a week, if not more often, and that's fill
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  Speaker 8: up their car or truck with gasoline. And the second
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  Speaker 8: thing they do is go to the grocery store or
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  Speaker 8: a restaurant and prices are just crazy. So everybody has
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  Speaker 8: recency bias, and I believe strongly that food prices in
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  Speaker 8: particular and gas are just you know, demoralizing.
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  Speaker 6: Have you gone to the grocery store lately. I have?
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  Speaker 6: It is you know, it's just it's crazy.
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  Speaker 8: You just you can't believe the basket of groceries costs
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  Speaker 8: that much, right, That's that's the first thing. And I
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  Speaker 8: do think that we have great expectation, probably deservedly so,
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  Speaker 8: although not on what I think Wall Street's timeline is
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  Speaker 8: for AI to increase productivity. It's been a decade or
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  Speaker 8: more since we've had something, a technology that we think
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  Speaker 8: could deliver productivity, productivity in.
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  Speaker 6: A meaningful way.
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  Speaker 8: And I think that's what has captured investors imagination around AI.
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  Speaker 2: And Kim, I was up at the Boston visiting the
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  Speaker 2: Boston Consulting Group yesterday, and the senior consultants that are
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  Speaker 2: you ask them what are your CEO clients asking you about?
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  Speaker 2: And to a person AI, I mean, it's it's just amazing.
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  Speaker 2: So Kim, as an investor, and as you talk to
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  Speaker 2: your clients and as you talk to other money managers,
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  Speaker 2: how do you suggest people really get a fundamental exposure
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  Speaker 2: to AI? Did they just run out and hold their
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  Speaker 2: nose of buying in video or how do you recommend
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  Speaker 2: the investors kind of get some exposure here.
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  Speaker 8: Well, there are going to be people that want to
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  Speaker 8: own in Vidio because again I love the concept of
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  Speaker 8: recency bias, like it's gone up a lot, so it
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  Speaker 8: should keep going up, you know, forever and ever. And
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  Speaker 8: I think that's true to some extent. But we are
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  Speaker 8: probably probably going to hit a pothole where they miss
• 13:02
  Speaker 8: expectations and that's just because of the and I'm getting
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  Speaker 8: in the weeds here, but go with me. The data
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  Speaker 8: center build out, I don't care if it's for regular
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  Speaker 8: data centers or AI. You reach a point at which
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  Speaker 8: you stop spending and you use the technology you have
• 13:17
  Speaker 8: in a building for a while, and then you add more.
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  Speaker 8: So we're at the beginning of the build out of AI,
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  Speaker 8: so everybody wants to own in Nvidia. I think AMD
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  Speaker 8: and Intel are fine companies that are going to be
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  Speaker 8: able to participate in this, and they are going to
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  Speaker 8: push in Vidia to probably sell their product at a
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  Speaker 8: somewhat lower margin. And I think that both Intel a
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  Speaker 8: AMD can play in this space. So those are some ideas.
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  Speaker 8: I also think people should look further and keep their
• 13:50
  Speaker 8: eye out for good software that is going to answer
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  Speaker 8: some problems. And what I mean by that is that
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  Speaker 8: it's not entertainment, only that you know, those CEOs would
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  Speaker 8: want to buy it to enhance their productivity, and that
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  Speaker 8: I think is the surest way to having a happy
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  Speaker 8: portfolio in five to seven years.
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  Speaker 4: So huh, a new thing in five to seven years.
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  Speaker 4: And I'm going to ask you about the next two
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  Speaker 4: and a half weeks. But we do get in video earnings.
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  Speaker 4: On May twenty second, I was talking to immobile servemen
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  Speaker 4: of RBC. She runs all their derivative strategy, and she
• 14:23
  Speaker 4: was saying, this is the first time that they haven't
• 14:25
  Speaker 4: seen a lot of sentiment upside going into nvideo. There's
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  Speaker 4: not the exuberants that we're used to seeing. What do
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  Speaker 4: you think the mark how do you think the market's
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  Speaker 4: going to react and take to in video's earnings?
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  Speaker 6: Well, they're going.
• 14:40
  Speaker 8: To do it Wall Street does, which is overreact in
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  Speaker 8: the short term whichever way that is, and then get
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  Speaker 8: it right in the long term. I mean, I hate
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  Speaker 8: to be so perfunctory about it, but that is the
• 14:51
  Speaker 8: last twenty five years of my life. Is you know,
• 14:54
  Speaker 8: you get that if it is higher than expected. You're
• 14:57
  Speaker 8: going to get a huge sugar rush upwards. It's a
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  Speaker 8: little bit you're going to get a sell off because
• 15:03
  Speaker 8: there are people that are expecting this thing to just
• 15:06
  Speaker 8: keep marching up straight, you know that forty five degree
• 15:09
  Speaker 8: angle to the right.
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  Speaker 6: Right.
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  Speaker 8: But I don't think you should give up hope. This
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  Speaker 8: is just what markets do in the short term.
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  Speaker 4: So you mentioned AMD and Intel, what else? What other
• 15:23
  Speaker 4: stocks you like to play this trend? You mentioned Synopsis
• 15:26
  Speaker 4: SNPs is the ticker.
• 15:28
  Speaker 5: What's that company?
• 15:30
  Speaker 8: Well, it's for people that design chips and we're going
• 15:36
  Speaker 8: to need not just the AI chips, but to get
• 15:39
  Speaker 8: real productivity, we're going to have to have armies of
• 15:43
  Speaker 8: Internet of things and those will be robots, those will
• 15:46
  Speaker 8: be sensors, and they're all going to be talking to
• 15:49
  Speaker 8: back to the main computer and have the main computer
• 15:52
  Speaker 8: tell them what to.
• 15:53
  Speaker 6: Do, or at least gather that information. So there are
• 15:56
  Speaker 6: going to have to.
• 15:57
  Speaker 8: Be more chips made and improvements to chips made. So
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  Speaker 8: that is how Synopsids benefits is from companies having to
• 16:07
  Speaker 8: buy additional licenses or additional capabilities to its products. So
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  Speaker 8: I'm a strong believer. There's another company called Cadence. They
• 16:16
  Speaker 8: are also in the same area, but we like Synopsis
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  Speaker 8: because of its breadth of product offerings.
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  Speaker 4: What about What do you make of the consumer space?
• 16:27
  Speaker 4: Do you like anything in the consumer space? The read
• 16:30
  Speaker 4: through from earnings has been really confusing, like Starbucks and
• 16:34
  Speaker 4: McDonald's warning on the consumer, but then Dutch Bros. Just
• 16:37
  Speaker 4: crushed it yesterday.
• 16:39
  Speaker 5: What are we learning?
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  Speaker 6: We're learning we.
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  Speaker 8: Have a very picky consumer, as we should, right, I mean,
• 16:46
  Speaker 8: I'm a picky consumer. I'm thinking you're a picky consumer.
• 16:49
  Speaker 8: I might get an eye roll on this one, but
• 16:51
  Speaker 8: I really love companies like Urban Outfitters that know that
• 16:56
  Speaker 8: they can satisfy this really picky base of a customer set.
• 17:02
  Speaker 8: They're not trying to sell product to everybody. They know
• 17:05
  Speaker 8: who their consumer is and they have been through the
• 17:08
  Speaker 8: decades able to delight and surprise this consumer, to get
• 17:12
  Speaker 8: her to open her wallet. And it is a her
• 17:14
  Speaker 8: in their case, to get to open the wallet and
• 17:17
  Speaker 8: to spend for the new looks. And I think you
• 17:21
  Speaker 8: need to know you don't want to you don't want
• 17:24
  Speaker 8: to buy mass marketing. You want to buy narrow, niche
• 17:29
  Speaker 8: kind of products that companies that do it well.
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  Speaker 4: So interesting it's like a very different story than just
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  Speaker 4: even a few years ago.
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  Speaker 5: Right, So what other? Yeah, go ahead.
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  Speaker 6: Yeah.
• 17:41
  Speaker 8: I think that they do well in any kind of
• 17:44
  Speaker 8: market because they have this small consume, small consumer base
• 17:49
  Speaker 8: that has money and they want to look fresh and new,
• 17:53
  Speaker 8: and that is what their secret is. They keep inventing
• 17:57
  Speaker 8: and finding those designers and finding those shapes we don't
• 18:00
  Speaker 8: have in our closet.
• 18:01
  Speaker 5: Do you do you shop at Urban Outfitters?
• 18:04
  Speaker 6: Not really.
• 18:05
  Speaker 8: I'm kind of a hipnie, but not that much of
• 18:07
  Speaker 8: a hippie, but I get what they.
• 18:08
  Speaker 6: Do, you know.
• 18:10
  Speaker 5: Yeah, I know.
• 18:11
  Speaker 9: I was like, you're extending this into a fashion discussion,
• 18:13
  Speaker 9: you know, Yeah, and.
• 18:15
  Speaker 6: Yeah, we do that.
• 18:16
  Speaker 5: We do that.
• 18:17
  Speaker 4: I've known Kim for a long time and inevitably the
• 18:19
  Speaker 4: end of our interview always goes to fashion. We've had
• 18:22
  Speaker 4: this like hope and dream that one day we'll actually
• 18:24
  Speaker 4: go shopping in New York together, but that has yet
• 18:26
  Speaker 4: to materialize.
• 18:26
  Speaker 6: Yes, Oh my gosh, I can't wait.
• 18:29
  Speaker 4: Come on, I'm across two from Bloomingdale's. We' hit the
• 18:32
  Speaker 4: sales sample stores. Okay, Kim, I'll let you go get
• 18:34
  Speaker 4: back to your real job. Kim Forrest, founder and CIO
• 18:37
  Speaker 4: a Boca Capital Partners standing by.
• 18:41
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 18:45
  Speaker 1: weekdays at ten am Eastern on Apple car Play and
• 18:48
  Speaker 1: Android Auto with a Bloomberg Business Act. You can also
• 18:51
  Speaker 1: listen live on Amazon Alexa from our flagship New York station,
• 18:55
  Speaker 1: Just say Alexa play Bloomberg eleven thirty.
• 18:59
  Speaker 4: Here's super interesting report that came out earlier in the week.
• 19:04
  Speaker 4: You know the story, right, the great resignation. People left
• 19:07
  Speaker 4: jobs during COVID, they got new jobs. Worker satisfaction isn't great,
• 19:12
  Speaker 4: particularly among women, and yet is the grass greener. It's
• 19:17
  Speaker 4: something that if you ever contemplated leaving your job for
• 19:19
  Speaker 4: something else, you constantly think about, are there problems that
• 19:22
  Speaker 4: are at every workplace? Or am I the problem and
• 19:24
  Speaker 4: I'm bringing it with me? Well, now we may have
• 19:27
  Speaker 4: some answers to this. Alan Swire is principal researcher of
• 19:30
  Speaker 4: Human capital over at the Conference Board, and they had
• 19:34
  Speaker 4: a survey out that said the workers who jumped CHIP
• 19:37
  Speaker 4: during COVID are now regretting it. Alan, thanks for coming.
• 19:41
  Speaker 4: This is great. I love this story. Can you walk
• 19:43
  Speaker 4: us through your findings?
• 19:45
  Speaker 2: Yeah?
• 19:46
  Speaker 10: Sure, So that one specifically was a big surprise to
• 19:50
  Speaker 10: us because just last year when we ran the survey
• 19:52
  Speaker 10: or twenty two, I should say, it was completely opposite
• 19:56
  Speaker 10: to what we found this time. Measure of job satisfaction
• 20:01
  Speaker 10: was up amongst those who switched jobs, but this year,
• 20:06
  Speaker 10: overall job satisfaction was down by over five percentage points,
• 20:11
  Speaker 10: and it was down across most of the twenty six
• 20:13
  Speaker 10: components of satisfaction that we measure, so a big swing.
• 20:16
  Speaker 10: We think we agree with your summary that you know,
• 20:20
  Speaker 10: sometimes the grass isn't necessarily greener on the other side,
• 20:24
  Speaker 10: and could be for a range of factors that this
• 20:27
  Speaker 10: is happening, But we definitely see that this year those
• 20:32
  Speaker 10: who have switched jobs during the pandemic are less satisfied
• 20:36
  Speaker 10: than those who stayed.
• 20:37
  Speaker 2: Do we know what was the primary reason people did
• 20:40
  Speaker 2: switch jobs during the pandemic was any different than other times,
• 20:43
  Speaker 2: which is, you know, maybe higher pay or just a
• 20:46
  Speaker 2: better opportunity.
• 20:48
  Speaker 10: Yeah, there were really pay increases during the pandemic that
• 20:52
  Speaker 10: we hadn't seen for well over a decade's that's fairly
• 20:55
  Speaker 10: well documented too, that some workers were receiving twenty thirty
• 20:59
  Speaker 10: percent better offers just for switching jobs. And we think
• 21:04
  Speaker 10: that you know, maybe some people took those offers without
• 21:07
  Speaker 10: really thinking, you know, about the other elements that lead
• 21:10
  Speaker 10: to happiness at work and contentment at work, like who
• 21:13
  Speaker 10: you work with and whether the organization is going to
• 21:15
  Speaker 10: invest in your career, career growth and many other things.
• 21:20
  Speaker 10: So they went for the money maybe, and now they're
• 21:23
  Speaker 10: starting to regret it.
• 21:24
  Speaker 4: I mean, it's so true, like the older I get,
• 21:27
  Speaker 4: the more that I try and really distill down what
• 21:31
  Speaker 4: makes me happy day to day, and it's so helpful.
• 21:34
  Speaker 4: I mean, it took me a long time to figure
• 21:35
  Speaker 4: that out, but it's so helpful and understanding it and
• 21:37
  Speaker 4: sometimes staying put is the answer. You had a great
• 21:40
  Speaker 4: point out that says once an employee hits a three
• 21:42
  Speaker 4: year mark, satisfaction increases substantially.
• 21:45
  Speaker 5: Talk us through that.
• 21:47
  Speaker 10: Yeah, that's also a difference from what we've seen, not
• 21:49
  Speaker 10: only in our own research, but there's a good amount
• 21:52
  Speaker 10: of research out there that shows that usually it's people
• 21:54
  Speaker 10: who have are shortened their tendon they start a new job,
• 21:57
  Speaker 10: they're happy, there's a honeymoon period, and their engagement and
• 22:02
  Speaker 10: their satisfaction levels are usually higher than people with more tenure.
• 22:06
  Speaker 10: But this year, in our satisfaction survey, we saw the opposite,
• 22:10
  Speaker 10: and that goes with the finding that job switchers are
• 22:13
  Speaker 10: less satisfying than job stayers, maybe for some of the
• 22:16
  Speaker 10: same reasons. Those who switch jobs. They're the people who
• 22:19
  Speaker 10: are in the positions with less than three years tenure,
• 22:22
  Speaker 10: and they're seeing that, yeah, things aren't quite as good
• 22:25
  Speaker 10: as they might have hoped, even if their wages are
• 22:29
  Speaker 10: higher than if they had stayed. So that's really good
• 22:34
  Speaker 10: reinforcement that those two elements that we examine in this
• 22:39
  Speaker 10: report really compliment each other.
• 22:42
  Speaker 2: And Alan your survey kind of goes to an issue
• 22:44
  Speaker 2: Alex and I were just talking about today. The least
• 22:46
  Speaker 2: satisfied group is fully on site workers. The hybrid model
• 22:51
  Speaker 2: wins the day. I guess the hybrid model that is
• 22:55
  Speaker 2: the new normal for the foreseeable future, isn't it.
• 22:58
  Speaker 10: Yeah, I think it is. I think employers or most
• 23:01
  Speaker 10: employers that not all see the benefits of the hybrid model.
• 23:05
  Speaker 10: You get the best of both worlds if it's done right.
• 23:09
  Speaker 10: Some of employees who can work from home may be
• 23:11
  Speaker 10: more productive at home for some types of work, but
• 23:15
  Speaker 10: when it comes to collaboration, building trust in relationships, and
• 23:18
  Speaker 10: innovation there at work. For several days a week. So
• 23:22
  Speaker 10: if they do it right, they're getting the best of
• 23:23
  Speaker 10: both worlds. But what's really interesting is that job as
• 23:27
  Speaker 10: that workers see this too. You know, even though we
• 23:30
  Speaker 10: see sometimes that workers say I'd love to work five
• 23:32
  Speaker 10: days remote, maybe they also see the benefits of being
• 23:36
  Speaker 10: with their colleagues two or three days a week.
• 23:38
  Speaker 4: There's literally no bone in my body that ever wants
• 23:40
  Speaker 4: to work at home. Again, Like the eight weeks during
• 23:42
  Speaker 4: COVID with a camera set up my living room was
• 23:44
  Speaker 4: more than enough. Are we noticing any distinction in terms
• 23:47
  Speaker 4: of the types of jobs we're talking about in terms
• 23:50
  Speaker 4: of say, you know, women versus men or any ethnicity.
• 23:56
  Speaker 10: We did see big differences with women. For the seventh
• 24:00
  Speaker 10: year in a row. Women are significantly less satisfied than men,
• 24:04
  Speaker 10: and that gap through between twenty twenty two and twenty
• 24:08
  Speaker 10: twenty three. And you know, those the main reasons or
• 24:13
  Speaker 10: drivers of that dissatisfaction are around hay, whether that's wages
• 24:19
  Speaker 10: or bonuses or even promotions, and also around the flexibility
• 24:26
  Speaker 10: of work. So by that I mean some of the
• 24:28
  Speaker 10: benefits like vacation and familyly. And it's not too surprising
• 24:33
  Speaker 10: because we see that even in twenty twenty four women
• 24:35
  Speaker 10: are making eighty two point five cents on the dollar
• 24:38
  Speaker 10: for men, and that most of the burden of care,
• 24:41
  Speaker 10: whether it's for kids or sea or parents, and most
• 24:44
  Speaker 10: of the household work falls on women still, so this
• 24:47
  Speaker 10: is really reflected in results. And for the past seven
• 24:50
  Speaker 10: years we did not collect data on race. We are
• 24:53
  Speaker 10: contemplating doing that race and ethnicity next year.
• 24:57
  Speaker 2: Hey, Alan Helmporten, are some of the I don't know,
• 25:01
  Speaker 2: the fringe perks, whether it's a foosball table, food, you know,
• 25:06
  Speaker 2: coffee machine, there's things that really came to the forefront
• 25:09
  Speaker 2: or in the pandemic as employers tried to lure employees
• 25:12
  Speaker 2: back to the office. It seems like a lot of
• 25:14
  Speaker 2: companies made a lot of investments in that kind of stuff.
• 25:17
  Speaker 10: Yeah, I think you're right. We don't measure that specifically.
• 25:20
  Speaker 10: We don't have a measure for sort of some of
• 25:23
  Speaker 10: those extra perks that you're you're talking about, but we know,
• 25:27
  Speaker 10: you know that organizations are doing their their their best
• 25:30
  Speaker 10: to lure people to the office, and they're trying not
• 25:33
  Speaker 10: to command people to the office with those extra perps.
• 25:38
  Speaker 10: And probably it's a good idea, whether it has as
• 25:41
  Speaker 10: much impact as a good health plan, probably not, or
• 25:44
  Speaker 10: even a good strong you know, talent culture where people
• 25:48
  Speaker 10: collaborate and respect each other. They're probably not, but some
• 25:52
  Speaker 10: of those things definitely helped to entice people back to
• 25:55
  Speaker 10: the office.
• 25:56
  Speaker 4: Just giving my coffee, you know, like I definitely don't care,
• 25:59
  Speaker 4: Slash want a foosball table. Alan, thanks a lot, really
• 26:02
  Speaker 4: interesting stuff. Great to sort of break all of that down,
• 26:05
  Speaker 4: Alan Swire, principal researcher human Capital at the conference board,
• 26:09
  Speaker 4: joining us from Savannah, Georgia. I mean, none of this
• 26:12
  Speaker 4: surprises me, But I also wonder if our tolerance is
• 26:15
  Speaker 4: changing what work life balance means in a very different way.
• 26:20
  Speaker 2: Yes, I think I think that has changed for a
• 26:23
  Speaker 2: lot of people, and they express in different ways, you know,
• 26:26
  Speaker 2: leaving the workforce the only working places that have hybrid
• 26:31
  Speaker 2: all that kind of stuff. So yeah, then there are
• 26:33
  Speaker 2: the special people like us who just come back every
• 26:35
  Speaker 2: day of the week.
• 26:36
  Speaker 5: Yeah.
• 26:36
  Speaker 4: And to be fair, like my husband does most of
• 26:38
  Speaker 4: the childcare and he always has, so I just want
• 26:40
  Speaker 4: to shout out that I'm not one of those women
• 26:42
  Speaker 4: that have to do more of the childcare.
• 26:44
  Speaker 5: We love the husband.
• 26:46
  Speaker 1: You're listening to the Bloomberg Intelligence Podcast catch us live
• 26:50
  Speaker 1: weekdays at ten am Eastern on applecar.
• 26:52
  Speaker 10: Play and Android Auto with.
• 26:54
  Speaker 1: The Bloomberg Business app. You can also listen live on
• 26:57
  Speaker 1: Amazon Alexa from our flagship New York station just Say
• 27:00
  Speaker 1: Alexa playing Bloomberg eleven thirty.
• 27:05
  Speaker 2: All right, let's turn a conversation to AI. Yesterday I
• 27:09
  Speaker 2: attended the Boston Consulting Group EDGE Expo in Boston. Had
• 27:13
  Speaker 2: a lot of great conversations with the folks at BCG.
• 27:15
  Speaker 2: A lot are really smart people thinking about some important
• 27:18
  Speaker 2: issues for their clients. I first book with Steve Mills,
• 27:21
  Speaker 2: chief AI ethics Officer. He focuses on the risks for
• 27:25
  Speaker 2: businesses and forging ahead with AI without considering how to
• 27:29
  Speaker 2: do that in a responsible ethical manner. I began by
• 27:32
  Speaker 2: asking him to talk about his role and how he
• 27:34
  Speaker 2: thinks it about AI from an ethics perspective. Let's take
• 27:37
  Speaker 2: a lism the.
• 27:38
  Speaker 9: Way we think about it, and particularly as you start
• 27:40
  Speaker 9: talking about generative AI. A responsible generative AI system needs
• 27:44
  Speaker 9: to be proficient, meaning it does the thing.
• 27:47
  Speaker 11: We want well, okay, you know.
• 27:48
  Speaker 9: So if it's a question answer system, it can actually
• 27:51
  Speaker 9: accurately answer questions, and that's key to driving value with
• 27:53
  Speaker 9: these systems. That's the first piece. It needs to be
• 27:56
  Speaker 9: safe and equitable. So these are the things like bias
• 27:59
  Speaker 9: and you know, harmful language and the like. It needs
• 28:03
  Speaker 9: to be secure, and then it needs to be compliant
• 28:05
  Speaker 9: with laws and regulations. And so as we're building AI
• 28:08
  Speaker 9: on behalf of our clients, as we're helping clients navigate
• 28:10
  Speaker 9: these issues, those are the things we're trying to guard against.
• 28:12
  Speaker 2: What are the some of the common risks that are
• 28:15
  Speaker 2: really out there for implementing AI across a product, across
• 28:19
  Speaker 2: the service that you've seen so far, because it feels
• 28:22
  Speaker 2: like we're still in the very very early innings of
• 28:25
  Speaker 2: this AI discussion.
• 28:26
  Speaker 9: Yeah, I mean the most common things, particularly you know,
• 28:29
  Speaker 9: we see a lot of chatbots for example, it is.
• 28:32
  Speaker 11: Things like.
• 28:35
  Speaker 9: Biased language or you know, sexist language in a subtle way.
• 28:39
  Speaker 9: Typically it's not over, but it can come across in
• 28:41
  Speaker 9: a subtle way. Very security flaws. You know, when you
• 28:47
  Speaker 9: issue a certain prompt to the system, it reveals sensitive data.
• 28:50
  Speaker 9: We've seen examples of you know, people being able through
• 28:54
  Speaker 9: smart prompting of the system manipulate it to offer products
• 28:57
  Speaker 9: for you know, next to nothing, basically, you know, inaccurate
• 29:02
  Speaker 9: you know answers or you know, people refer to to
• 29:04
  Speaker 9: offen its hallucinations. But you know, again like basically the
• 29:08
  Speaker 9: wrong answer coming out of the system that the company
• 29:10
  Speaker 9: is then held viable for after the fact. So these
• 29:12
  Speaker 9: are all things I'm sort of picking from the headlines
• 29:14
  Speaker 9: that we've seen.
• 29:15
  Speaker 2: It seems to me that before you guys walk into
• 29:18
  Speaker 2: my office, I think I have to have a commitment
• 29:20
  Speaker 2: to do this thing ethically before I spend dollar one.
• 29:23
  Speaker 2: Is that the kind of the message you want to
• 29:25
  Speaker 2: get across to these people, Like, listen, guys, you got
• 29:26
  Speaker 2: to buy into this, implement this because this is a
• 29:29
  Speaker 2: powerful tool, maybe more powerful than maybe we even know
• 29:32
  Speaker 2: at this point.
• 29:33
  Speaker 11: Yeah, that's exactly right.
• 29:34
  Speaker 9: I always say you cannot deploy and scale GENAI without
• 29:38
  Speaker 9: responsible AI. And it kind of comes in two as
• 29:42
  Speaker 9: one is, organizations are realizing there's these risks, there's there's regulation,
• 29:47
  Speaker 9: you need this in place to minimize those risks so
• 29:50
  Speaker 9: you can do it confidently. At the same time, we
• 29:53
  Speaker 9: see it as a source of value both directly and indirectly.
• 29:56
  Speaker 9: What I mean by that is companies with mature respond
• 30:00
  Speaker 9: AI programs, and this came from research we did with MIT,
• 30:03
  Speaker 9: if they have a mature responsibili program, they report higher
• 30:06
  Speaker 9: customer engagement, better customer retention, higher customer trust, better long
• 30:11
  Speaker 9: term profitabilities. That's sort of the direct piece, and faster
• 30:13
  Speaker 9: innovation too.
• 30:14
  Speaker 11: By the way.
• 30:15
  Speaker 9: The indirect piece is they also report they get more
• 30:18
  Speaker 9: value from their AI investment, which I think is really
• 30:21
  Speaker 9: interesting and the intuition there is many of the things
• 30:24
  Speaker 9: you do to build product responsibly just makes better product
• 30:27
  Speaker 9: in the first place, and so it's not really that
• 30:30
  Speaker 9: much of a surprise that if you do those things
• 30:32
  Speaker 9: you build better product.
• 30:33
  Speaker 11: Do you get more value from your AI? Are there
• 30:36
  Speaker 11: in your experience?
• 30:36
  Speaker 2: Have you had companies that do better than others that
• 30:39
  Speaker 2: make a bigger commitment or what's kind of like a
• 30:42
  Speaker 2: best use case from your perspective, what's your not your pitch,
• 30:45
  Speaker 2: but what's your best idea best practice when you go
• 30:48
  Speaker 2: into talk to clients.
• 30:49
  Speaker 9: Well, I mean we always talk about, you know, what
• 30:51
  Speaker 9: we see as a mature responsible AI program that you know,
• 30:54
  Speaker 9: at its heart, there's there's basically a strategy that's really
• 30:58
  Speaker 9: bridging between corporate value and the AI strategy the company itself,
• 31:02
  Speaker 9: and this is a means to bring those two things
• 31:04
  Speaker 9: together and then there's you know, the governance, the processes,
• 31:07
  Speaker 9: all the tools, but ultimately you want this underpinned by
• 31:11
  Speaker 9: a culture of responsibility.
• 31:13
  Speaker 11: Who checks that?
• 31:15
  Speaker 2: Like I'm wondering, like are auditors being trained now not
• 31:19
  Speaker 2: wanted to look at financial statements but also and controls
• 31:24
  Speaker 2: and so on and so forth, but also you know
• 31:27
  Speaker 2: data really Like Bloomberg, we take data security extraordinarily seriously
• 31:32
  Speaker 2: as a data driven company. I would think that almost
• 31:34
  Speaker 2: any company now that is employing some level of AI.
• 31:39
  Speaker 11: There's going to be risk.
• 31:40
  Speaker 2: Who checks on that?
• 31:42
  Speaker 9: Yeah, it's a great question, and we're honestly extremely nascent
• 31:46
  Speaker 9: in this space. There are no standards yet for AI.
• 31:50
  Speaker 9: Therefore there's really no audit. Now You've got folks like
• 31:52
  Speaker 9: the Responsible AI Institute, which is a nonprofit that has
• 31:55
  Speaker 9: created a certification standard which some companies are following. I
• 31:59
  Speaker 9: think this is to change extremely rapidly. The EU just
• 32:02
  Speaker 9: past the AI Act. Very soon weel see standards associate
• 32:06
  Speaker 9: with that, and so I think we will start to
• 32:07
  Speaker 9: see this really come to the fore very very quickly.
• 32:10
  Speaker 2: It's interesting mention Europe because we've seen just with technology
• 32:13
  Speaker 2: in general Europe and privacy, for example, data privacy Europe
• 32:16
  Speaker 2: ahead of the US, And I would argue, you know,
• 32:19
  Speaker 2: if you go all the way back to the eighties
• 32:21
  Speaker 2: and early nineties with Microsoft in terms of just dominance
• 32:23
  Speaker 2: of US technology, do you expect other parts of the
• 32:27
  Speaker 2: world to maybe be a little bit more out front
• 32:30
  Speaker 2: on some of the regulations of this new technology visa
• 32:32
  Speaker 2: be the US or because I know, BCG's a global business,
• 32:36
  Speaker 2: you see everybody.
• 32:37
  Speaker 9: Yeah, I mean, we're starting to see a patchwork or regulation.
• 32:40
  Speaker 9: The EU, I would say, is the first place we're
• 32:43
  Speaker 9: seeing comprehensive AI specific regulation. But in the US the
• 32:47
  Speaker 9: administration has directed the executive branch enforcement agencies to take
• 32:51
  Speaker 9: existing regulations and apply them to AI, and so we're
• 32:54
  Speaker 9: seeing that with Consumer Financial Protection, Fair Housing, FDA.
• 32:59
  Speaker 11: You know.
• 32:59
  Speaker 9: So while we in the US don't have the AI
• 33:02
  Speaker 9: specific regulation, there is certainly regulation applied to AI right now.
• 33:06
  Speaker 9: So this is the situation we're in, in this odd
• 33:09
  Speaker 9: patchwork emerging and US states honestly for passing regulation states.
• 33:13
  Speaker 2: Okay, yeah, interesting, what are are there certain industries today
• 33:16
  Speaker 2: here again early stages of AI, that seem to be
• 33:18
  Speaker 2: more open to making the investments in AI, making the
• 33:23
  Speaker 2: commitment to AI. I would think technology companies probably defined
• 33:27
  Speaker 2: as opposed to I don't know a manufacturer company in
• 33:30
  Speaker 2: the Midwest that says this doesn't really apply to me.
• 33:33
  Speaker 11: What are your discussions?
• 33:34
  Speaker 2: How do they go?
• 33:34
  Speaker 6: Yeah?
• 33:35
  Speaker 9: I mean I think big technology companies are absolutely at
• 33:38
  Speaker 9: the foror of this space. You know, from years ago
• 33:42
  Speaker 9: they were working on these topics. The other place we're
• 33:45
  Speaker 9: seeing a lot of maturity is the highly regulated industry
• 33:49
  Speaker 9: in healthcare, insurance finance. Not surprising in that they've historically
• 33:54
  Speaker 9: had model risk management functions. You know, they've got regulators
• 33:58
  Speaker 9: looking at them, and so they've been very proactive. I
• 34:00
  Speaker 9: think other industries, there are absolutely very mature companies in
• 34:05
  Speaker 9: every industry, but I think if.
• 34:06
  Speaker 11: We're talking broad brushstrokes, others are lagging behind. I was
• 34:10
  Speaker 11: just talking and mentioned to somebody else. AI seem to
• 34:13
  Speaker 11: have come out of nowhere.
• 34:14
  Speaker 2: And how do you think about the evolution of AI?
• 34:17
  Speaker 2: Is this just the big data discussion we had five
• 34:20
  Speaker 2: years ago or is it just the commitment we made
• 34:22
  Speaker 2: in the eighties and nineties that oh boy, everything's going digital,
• 34:25
  Speaker 2: we better start spending more on it. How do you
• 34:28
  Speaker 2: guys think about the evolution of AI? Because I could
• 34:30
  Speaker 2: see a CEO or a board member saying to you,
• 34:33
  Speaker 2: I don't understand it. Haven't we been spending on technology
• 34:36
  Speaker 2: for the past twenty five years.
• 34:38
  Speaker 9: I mean, I really believe that the generative AI explosion
• 34:42
  Speaker 9: we've seen is an inflection point. It is something fundamentally different,
• 34:46
  Speaker 9: and I don't think we fully know how it will
• 34:49
  Speaker 9: impact everything. But I mean, you're seeing the degree of
• 34:53
  Speaker 9: hype around it. Yes, there is some hype, but it's
• 34:56
  Speaker 9: well founded. I mean, I think we're talking on par
• 34:58
  Speaker 9: with the Internet in some ways of how it could
• 35:01
  Speaker 9: be transformative inside organizations, And we're still discovering the capabilities, right,
• 35:07
  Speaker 9: That's some the unique thing about it, the emerging capabilities
• 35:09
  Speaker 9: we see and so each you know, each generation a
• 35:12
  Speaker 9: model that's being released is just so much more performant
• 35:15
  Speaker 9: and can do so much more.
• 35:16
  Speaker 11: And so the question is where where does it end?
• 35:17
  Speaker 9: But even with what we have today, there are so
• 35:20
  Speaker 9: many applications we haven't explored yet.
• 35:22
  Speaker 11: So what's kind of your when you walk into see
• 35:25
  Speaker 11: a client? How do you how do you lead off?
• 35:26
  Speaker 2: Do you do you just say I'm going to try
• 35:29
  Speaker 2: to My goal today is to get you to commit
• 35:31
  Speaker 2: or consider committing to an ethical implementation of your tech investment.
• 35:36
  Speaker 2: Is that kind of your pitch or what how do
• 35:37
  Speaker 2: you walk into when you see a client?
• 35:38
  Speaker 9: Yeah, in essence, it's you know, it's the message I
• 35:41
  Speaker 9: sort of led with earlier that you cannot scale Jenai
• 35:44
  Speaker 9: without doing it in a responsible way. And it's twofold, like, yes,
• 35:47
  Speaker 9: there's absolutely a risk mitigation play, both for the company
• 35:51
  Speaker 9: but even more importantly for customers, right because you have
• 35:54
  Speaker 9: the potential to create an unintended harm to individuals, so
• 35:56
  Speaker 9: like full stop, we need to avoid that. But from
• 35:58
  Speaker 9: a corporate perspective, there there's certainly risk, but there's also
• 36:02
  Speaker 9: this value side. It's not just about mitigating risk, it's
• 36:05
  Speaker 9: about making sure you realize the value. And so that's
• 36:07
  Speaker 9: always the message because I think the risk is motivating
• 36:11
  Speaker 9: to a point. But then it's okay if you want
• 36:14
  Speaker 9: to make this investment in AI anyway, if you want
• 36:16
  Speaker 9: to see that value, you need to make this investment
• 36:18
  Speaker 9: to do it in a responsible way.
• 36:19
  Speaker 2: And that I guess is that message getting through?
• 36:23
  Speaker 11: Do you think I think it is.
• 36:25
  Speaker 9: I think companies are still like there's I would say
• 36:29
  Speaker 9: two things we're seeing. One it is the topic of
• 36:33
  Speaker 9: responsibile AI has not been elevated senior enough inside organizations.
• 36:37
  Speaker 11: Yet I argue it's a c suite issue. It has
• 36:39
  Speaker 11: to be. If AI is a c suite issue, this
• 36:40
  Speaker 11: needs to be.
• 36:41
  Speaker 9: Too often we're seeing it a few layers down inside
• 36:44
  Speaker 9: the organization, and it's people who are passionate and brilliant
• 36:48
  Speaker 9: and wanted to do good things, but they don't have
• 36:50
  Speaker 9: the clout inside the organization really drive the kind of
• 36:52
  Speaker 9: change you need.
• 36:52
  Speaker 11: I mean, I mentioned this is a cultural change. You
• 36:54
  Speaker 11: need senior people.
• 36:55
  Speaker 9: So that's one, and then two, they're just not putting
• 36:57
  Speaker 9: the right right amount of resourcing any right. I think
• 37:01
  Speaker 9: this is being seen as you know, smaller dollar we
• 37:04
  Speaker 9: can do a few little.
• 37:04
  Speaker 11: Things and do it responsibly. It's a much bigger investment.
• 37:07
  Speaker 9: And if you think about you brought up privacy earlier
• 37:10
  Speaker 9: like GDPR or cyber sure. I mean if you look
• 37:13
  Speaker 9: back at some of the data, we're talking tens of
• 37:15
  Speaker 9: millions of dollars to get compliant with GDPR. It's the
• 37:17
  Speaker 9: same thing here and companies need to be ready for
• 37:19
  Speaker 9: that degree of investment.
• 37:21
  Speaker 11: All right.
• 37:22
  Speaker 2: That was Steve Mills, chief AI ethics officer at the
• 37:25
  Speaker 2: Boston Consulting Group. I spoke with them up in Boston yesterday.
• 37:28
  Speaker 2: And what was interesting A that they have a chief
• 37:31
  Speaker 2: AI ethics officer. Wouldn't have thought at that, didn't even
• 37:34
  Speaker 2: think about it. But b they say at BCG, when
• 37:36
  Speaker 2: they got to talk to one of their clients about
• 37:38
  Speaker 2: AI and making the investment in AI and the commitment
• 37:41
  Speaker 2: in AI, they say, listen, we're not going to engage
• 37:43
  Speaker 2: with you unless you make the commitment that ethics and
• 37:47
  Speaker 2: the management ethics is going to be at a board
• 37:49
  Speaker 2: level commitment because if not, there are so many pitfalls
• 37:52
  Speaker 2: that we don't even know about. And before you start
• 37:55
  Speaker 2: rushing off to make your investments in technology, you better
• 37:57
  Speaker 2: recognize that you need to manage the risk here. So
• 38:00
  Speaker 2: from their perspective, at least at BCG, that's how they
• 38:02
  Speaker 2: try to engage with their clients.
• 38:05
  Speaker 5: What is the what's the reaction to that? Did you say, I.
• 38:08
  Speaker 2: Think they get it. I think they get it because
• 38:09
  Speaker 2: I think he says, they were saying, the clients are
• 38:11
  Speaker 2: basically like, you know, we'll spend the money to upgrade
• 38:15
  Speaker 2: our tech and do all that kind of stuff because
• 38:17
  Speaker 2: we can't be left behind. That's the biggest risk that
• 38:21
  Speaker 2: the BCG CEOs say, we can't risk getting left behind.
• 38:24
  Speaker 2: So their in tendency is just to spend, spend, spend,
• 38:26
  Speaker 2: spend without really thinking about how to do it smartly
• 38:29
  Speaker 2: and overtime and do it responsibly. They feel like if
• 38:32
  Speaker 2: they don't, their competitors will and they'll be left in
• 38:35
  Speaker 2: the dust. So very interesting discussion about AI and how
• 38:38
  Speaker 2: it's really involved with all their discussions.
• 38:41
  Speaker 4: And apparently they'll be a CEO officer chief, aix ETHX officer.
• 38:46
  Speaker 5: That will now be something to think about.
• 38:48
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