Latest / Bloomberg Intelligence / Trump Moves to Have Tech Giants Pay for Surging Power Costs

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Trump Moves to Have Tech Giants Pay for Surging Power Costs · Bloomberg Intelligence

• 0:02
  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 1: Bloomberg Business App. Listen on demand wherever you get your podcasts,
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  Speaker 1: or watch us live on YouTube.
• 0:24
  Speaker 2: Man Deep Sing is here with us.
• 0:25
  Speaker 3: He's the Global Tech research head and mandeep this idea
• 0:28
  Speaker 3: of big tech being called upon to pay for their
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  Speaker 3: own rising energy costs. As Bailey pointed out, this is
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  Speaker 3: authorugh a non binding statement of principles. He pointed out
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  Speaker 3: the winners and losers on the utility side. What does
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  Speaker 3: this mean for big tech? I mean, can any of
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  Speaker 3: them come out of this ahead with something like this
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  Speaker 3: kind of pressure?
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  Speaker 4: Well, right now, I think everyone is looking at gigawat
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  Speaker 4: data centers right and when you think about what is
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  Speaker 4: existing in terms of AI data centers, these are fifty
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  Speaker 4: to one hundred megawont data centers. We're already talking about
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  Speaker 4: power requirements going ten x to one gigawat. And so
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  Speaker 4: how will a seventy to eighty year old grid supply
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  Speaker 4: electricity which is ten times more than what these data
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  Speaker 4: centers already consume? And so from that perspective, it is
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  Speaker 4: a very topical question that needs to be asked. Where
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  Speaker 4: are you getting the ten times power that you need
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  Speaker 4: to run your one gigawot data center? And I think
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  Speaker 4: that's the realization that's coming in now. It's being reflected
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  Speaker 4: in the prices that consumers have to pay because prices
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  Speaker 4: have gone up for electricity. But I mean the computing
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  Speaker 4: that AI does requires ten times more power. That's getting
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  Speaker 4: starts a realization and I think everything will follow through.
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  Speaker 5: Now, Man deep, is there a sense that big tech
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  Speaker 5: leaders might be open to working with the White House
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  Speaker 5: on this to kind of be in Trump's favor here
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  Speaker 5: and what might be impact be on their profit growth?
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  Speaker 4: I mean, there's no doubt that AI data centers are
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  Speaker 4: a much lower gross margin business for hyperscalers. And these hyperscalers,
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  Speaker 4: I mean, Amazon, Microsoft, and Google, the three big ones
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  Speaker 4: have huge footprint. When it comes to the traditional CPU
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  Speaker 4: data centers. They were able to get to, you know,
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  Speaker 4: sixty five to seventy percent gross margins on the public
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  Speaker 4: cloud businesses they had. Now with AI workloads, we're talking
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  Speaker 4: about a sub fifty percent gross margin business. No matter
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  Speaker 4: what kind of scale you have just because of the
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  Speaker 4: economics involved. These are sub fifty percent ross margin businesses.
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  Speaker 4: So on premise software used to be eighty to ninety
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  Speaker 4: percent gross margin. With public cloud we got to sixty
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  Speaker 4: five to seventy. With AI we are sub fifty gross margin.
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  Speaker 4: So from that perspective, I mean, even if you're Microsoft,
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  Speaker 4: you don't have a choice, but your margins will have
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  Speaker 4: to come down.
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  Speaker 3: We're also looking at semiconductor saw as the best performers
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  Speaker 3: in the S and P five hundred by two dozen
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  Speaker 3: industry groups, and it feels like that TSMC bullish forecast
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  Speaker 3: was very much a tailwind for the industry. Obviously this
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  Speaker 3: is good news in terms of demand, But does anyone
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  Speaker 3: lose out here when TSMC is can't even meet the
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  Speaker 3: demand that is being required of it, Well.
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  Speaker 4: Lose out, I think. I mean, what we've seen really
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  Speaker 4: is Intel really benefiting, So I wouldn't say anybody is
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  Speaker 4: losing out, But clearly everyone is so focused right now
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  Speaker 4: on the AI side that I feel suddenly everyone realized, oh,
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  Speaker 4: storage isn't short supply. We didn't talk about storage up
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  Speaker 4: until you know, the beginning of this year, so there
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  Speaker 4: will be you know, instances like this where one of
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  Speaker 4: the components gets neglected and suddenly everyone finds that to
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  Speaker 4: be in short supply and you need it, So it
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  Speaker 4: could happen. I think CPUs. Nobody talked about CPUs in
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  Speaker 4: the past twelve months. Suddenly CPUs are in short supply.
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  Speaker 4: So that's where the IT infrastructure needs to be upgraded
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  Speaker 4: every four or five years. And when the time comes
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  Speaker 4: to upgrade the infrastructure, certain components, even if they're not
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  Speaker 4: tied to AI, could be short supply because we have
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  Speaker 4: reallocated their resources towards meeting the AI demands.
• 4:20
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
• 4:26
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am easterne on Apple, Cocklay and Android
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 4:41
  Speaker 3: Some earnings that we want to bring you your attention
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  Speaker 3: to JB Hunt, the truck carrier reporting quarterly revenue that
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  Speaker 3: missed analyssessments. Although some people might say that the bar
• 4:51
  Speaker 3: was kind of high for this company, even as we've
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  Speaker 3: seen this continued weakness in freight demand. Lee Colascow is
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  Speaker 3: Bloomberg Intelligence's senior transport logistics shipping analysts and he joins
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  Speaker 3: us now to give us his stake on what we're seeing.
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  Speaker 2: So what is the story with JB.
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  Speaker 3: Hunt and how it's positioned for the current market environment.
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  Speaker 6: Yeah, if you take a look at the stock, it's
• 5:12
  Speaker 6: been up a lot over the last couple months, and
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  Speaker 6: some of that has been in anticipation of the trucking
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  Speaker 6: spot market to kind of turn more positive more positively,
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  Speaker 6: and that would be through more supply coming out of
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  Speaker 6: the market. So the stock is off a little bit
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  Speaker 6: off today, It was off a lot in the after
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  Speaker 6: markets last night, but it's come back a little bit
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  Speaker 6: and that's really being driven I think because of that,
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  Speaker 6: you know, kind of high expectations. But at the end
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  Speaker 6: of the day, the company did report a pretty good print.
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  Speaker 6: Their earnings came in above consensus. It was driven by
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  Speaker 6: their intermodal, their truckload and their final mile businesses.
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  Speaker 4: JB.
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  Speaker 6: Hunt is a kind of an integrated transportation company. They
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  Speaker 6: provide a lot of different types of transportation services. UH,
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  Speaker 6: some of the ones that fell maybe short of expectations
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  Speaker 6: where they're freight brokerage business UH and dedicated business uh,
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  Speaker 6: and that you know, the dedicated business is being driven
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  Speaker 6: by Uh. It takes you know, their winning business, but
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  Speaker 6: it takes a while for some of those businesses to
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  Speaker 6: ramp up and to kind of drive the margins uh
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  Speaker 6: that they're expected to because those you know, those ramp
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  Speaker 6: up costs.
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  Speaker 7: UH.
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  Speaker 6: You know, what I would say is that I think
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  Speaker 6: a lot of people were somewhat surprised by management's tone
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  Speaker 6: on the earnings call last night.
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  Speaker 4: Uh.
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  Speaker 6: You know, they noted that the market was fragile, uh,
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  Speaker 6: and that the supply that we've been seeing coming out
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  Speaker 6: of the truckload market, while it's been good, they don't
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  Speaker 6: want to get ahead of themselves and call this, you know,
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  Speaker 6: we're in full recovery mode because you know, we've had
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  Speaker 6: some false positives in the past. So they're pretty I guess,
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  Speaker 6: I guess cautiously optimistic about the outlook when it comes
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  Speaker 6: to the truck spot market, and that's so important because
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  Speaker 6: it wants the trucks the spot market. Titans rates will
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  Speaker 6: go up in that market and that will kind of
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  Speaker 6: ripple across its contractual business. It's dedicated business, it's brokerage business,
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  Speaker 6: it's intermodal business. So it's kind of like the Canary
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  Speaker 6: and the coal Mine for freight transportation logistics providers lead JB.
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  Speaker 5: Hunt is of course a big macroeconomic bell weather. What
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  Speaker 5: is it telling us about the broader economy and the
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  Speaker 5: year ahead.
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  Speaker 6: Yeah, you know, companies like this will really do well
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  Speaker 6: when demand grows. Obviously, you know, they have seen, you know,
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  Speaker 6: a somewhat resilient consumer.
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  Speaker 4: They did note that, you know, while.
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  Speaker 6: There wasn't a lot of imports coming into the country
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  Speaker 6: for peak season, they benefited from a lot of freight
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  Speaker 6: that was already in the country moving across the country.
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  Speaker 6: So it does seem like, you know, they did see
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  Speaker 6: some peak demand during the fourth quarter, which is obviously positive.
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  Speaker 6: But you know, I don't need to tell you guys,
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  Speaker 6: it does seem like this economy is a Casehape economy
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  Speaker 6: and it's really not kind of a widespread economic growth
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  Speaker 6: that we're seeing, where there's pockets of strength and pockness
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  Speaker 6: of pockets of weakness.
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  Speaker 3: So cost cuts helped limit The downside for JB. Hunt
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  Speaker 3: is that the catalyst to get people excited again about JB.
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  Speaker 2: Hunt.
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  Speaker 3: You know what kind of cost savings that can realize
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  Speaker 3: this year. Maybe it can go further than what it
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  Speaker 3: had projected. When it comes to reducing expenses.
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  Speaker 6: Yeah, I think there's two things here that people can
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  Speaker 6: get excited about. I think there is the prospect of
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  Speaker 6: a better pricing environment for JB. Hunt and the broader transports.
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  Speaker 6: That's one. Secondly, you know, they're not just sitting and
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  Speaker 6: resting on their laurels. They are actively trying to take
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  Speaker 6: out costs. They took out around twenty five million dollars
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  Speaker 6: in a fourth quarter. Their run rate was somewhat over
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  Speaker 6: one hundred million. Management didn't really want to guide too
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  Speaker 6: much and what they expect that they can take out
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  Speaker 6: in twenty twenty six. But I suspect that they're going
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  Speaker 6: to continue, you know, that trend next year and they
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  Speaker 6: could bring some of their you know, margin targets. You know,
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  Speaker 6: most of their margins right now are trending below their
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  Speaker 6: kind of long term targets. And you know, through these
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  Speaker 6: cost cutting initiatives, productivity gains. And it's not just you know,
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  Speaker 6: you know, cutting to the bone. We're not talking about that.
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  Speaker 6: They're trying to get more productive. So whether it's better
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  Speaker 6: utilization rates or their trailers, maybe it's better quicker turns
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  Speaker 6: for their draage fleet. All these things you know, will
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  Speaker 6: lower lower the overall costs, and if you put on
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  Speaker 6: top of that higher rates, it really could drive margins
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  Speaker 6: significantly higher and closer to those longer term targets.
• 9:33
  Speaker 3: Stay with us more from Bloomberg Intelligence coming up after this.
• 9:40
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Colocklay and Android
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• 9:50
  Speaker 1: you get your podcasts, or watch us live on YouTube through.
• 9:54
  Speaker 5: Sax Global Files four Chapter eleven bankruptcy protection a humbling
• 9:59
  Speaker 5: turn for the lux or retailer following a stretch of losses,
• 10:02
  Speaker 5: flagging turnaround efforts, and a substantial merger related debt. There
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  Speaker 5: are also hidden costs to luxury consumers and brands. To
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  Speaker 5: discuss this with us is Rania set Home, managing partner
• 10:15
  Speaker 5: at set Home Law Group Rania. What does this bankruptcy mean?
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  Speaker 5: Also for sax As shoppers and the brands that work
• 10:21
  Speaker 5: with it.
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  Speaker 8: A lot of the brands that worked with it are
• 10:25
  Speaker 8: no longer working with it, which also you know, precipitated
• 10:29
  Speaker 8: it's decline. It is sad. As you were saying, and
• 10:32
  Speaker 8: I'm sure it's humbling. So it started I would say
• 10:36
  Speaker 8: at least a year and a half ago. I started
• 10:39
  Speaker 8: hearing from smaller brands, some of whose only footprint in
• 10:42
  Speaker 8: the United States is with saxoth Avenue and Meme and
• 10:46
  Speaker 8: Marcus Group, which is owned by the same company. They
• 10:50
  Speaker 8: were not paying for consigned goods, although the goods were selling.
• 10:53
  Speaker 8: So this was the start of the end, really, And
• 10:58
  Speaker 8: if you've tried to go shopping recently Sax with Avenue,
• 11:00
  Speaker 8: you will notice a shift in the products that are
• 11:03
  Speaker 8: available to you. And this is one of the reasons
• 11:07
  Speaker 8: for consumers. You know, it's it's tough to say. When
• 11:12
  Speaker 8: there's a bankruptcy estate they do not have to honor
• 11:15
  Speaker 8: any kind of credit or rewards program, but I understand
• 11:20
  Speaker 8: in this instance they will be honoring it. The issue
• 11:24
  Speaker 8: becomes for you, is there something there that you want
• 11:27
  Speaker 8: to purchase? And how are you feeling about the brand
• 11:29
  Speaker 8: in general? Something that I think Sacks did poorly was communicate.
• 11:33
  Speaker 8: I received my first email from them about the bankruptcy yesterday,
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  Speaker 8: nothing prior to yesterday, So I think there's some room
• 11:42
  Speaker 8: for growth there on the communication end. And you know,
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  Speaker 8: going back to the brands. What's going to happen to them?
• 11:48
  Speaker 8: It's you know, it's too late, you know for them
• 11:51
  Speaker 8: to do anything. But on a going forward basis, if
• 11:54
  Speaker 8: you are a brand and you're consigning your goods, there
• 11:57
  Speaker 8: are a few things that you need to look out for.
• 11:59
  Speaker 8: The first thing is is your contractual provision. It should
• 12:03
  Speaker 8: state in this agreement that you own your merchandise until
• 12:06
  Speaker 8: it is sold. That's the very first thing. And then
• 12:09
  Speaker 8: once that provision is there, there's something called a UCC filing.
• 12:13
  Speaker 8: You should file a lean because this will give you
• 12:17
  Speaker 8: an interest in the merchandise and you're no longer an
• 12:20
  Speaker 8: unsecured creditor for purposes of bankruptcy, so you may actually
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  Speaker 8: get something.
• 12:26
  Speaker 3: So there's legal recourse for the vendors of sacks, many
• 12:30
  Speaker 3: of which we're not getting paid regularly in the last
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  Speaker 3: couple of months. How does SAX go about repairing its
• 12:36
  Speaker 3: relationship not just with customers, but with these brands, the
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  Speaker 3: brands that relies on in order to bring customers through
• 12:42
  Speaker 3: the doors.
• 12:42
  Speaker 8: Yeah, I think, you know, people really discount the efficacy
• 12:46
  Speaker 8: of good communication. But you know, as an attorney, I
• 12:50
  Speaker 8: can tell you that as of paramount importance In fact,
• 12:52
  Speaker 8: usually when there's a breakdown in relationship, it's because of communication.
• 12:57
  Speaker 8: So the first thing that SAX needs to do, in
• 12:59
  Speaker 8: my mind is tell everyone why this happened and what
• 13:02
  Speaker 8: steps they're taking to remedy it, because we don't want
• 13:05
  Speaker 8: them to be repeat offenders five years from now. We
• 13:08
  Speaker 8: don't want to be sitting in the studio talking about
• 13:10
  Speaker 8: the other bankruptcy that they're undergoing. So it's important to
• 13:14
  Speaker 8: figure out the why when it's such a drastic step
• 13:18
  Speaker 8: that you have to take, and tell everyone, tell your
• 13:21
  Speaker 8: vendors what you're doing to and help build trust again.
• 13:25
  Speaker 5: Rania. When you get this type of bankruptcy filing, what
• 13:28
  Speaker 5: does Sex owe its investors and creditors?
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  Speaker 2: Well, I don't know what the numbers are.
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  Speaker 8: However, the Bankruptcy Code ranks people by importance secured versus unsecured,
• 13:41
  Speaker 8: and you know, the landlord is certainly a secured creditor
• 13:44
  Speaker 8: to the extent that they owe them money, they will
• 13:47
  Speaker 8: be paid first. Any kind of loan they'll be paid,
• 13:51
  Speaker 8: you know, amongst one of the first as well. So
• 13:53
  Speaker 8: it's too early. I don't have the list yet.
• 13:56
  Speaker 5: You were talking about some of the MNA debt and
• 13:59
  Speaker 5: this BA and gripscy, of course, comes a year after
• 14:02
  Speaker 5: investors handed Sacks billions of dollars for its acquisition of
• 14:05
  Speaker 5: Nieman Marcus, which was also struggling. What kind of risk
• 14:09
  Speaker 5: was it putting investors through by acquiring Neman Marcus.
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  Speaker 8: I'm not sure that that marriage was off to a
• 14:16
  Speaker 8: good start from the beginning. You know, we as shoppers,
• 14:19
  Speaker 8: I can speak for women, or at least for myself,
• 14:22
  Speaker 8: we shop at a whole host of different places, and
• 14:26
  Speaker 8: you could have one customer shop in multiple stores for
• 14:30
  Speaker 8: different types of items. But in general, it's safe to
• 14:34
  Speaker 8: say that the Marcus Group shopper is not the same
• 14:37
  Speaker 8: as the Sasith Aveny shopper, who's not the same as
• 14:41
  Speaker 8: Bloomingdale's or Macy's shopper. So I think that marriage was
• 14:46
  Speaker 8: rocky to begin with, and it was a.
• 14:49
  Speaker 2: Hefty price that was paid.
• 14:50
  Speaker 8: I'm hoping, as a consumer and for everyone's sake, that
• 14:55
  Speaker 8: someone else buys name and Marcus Group, or perhaps they
• 14:59
  Speaker 8: can buy themselves back. We do see that sometimes where
• 15:02
  Speaker 8: you purchase yourself back from your acquirer.
• 15:04
  Speaker 1: Yeah.
• 15:04
  Speaker 5: I just went across the street to sas off Fifth
• 15:07
  Speaker 5: thinking that I could get a nice deal on something
• 15:10
  Speaker 5: and they just, yeah, I got rid of everything. What
• 15:13
  Speaker 5: is next for SAX here? Do you think it makes
• 15:15
  Speaker 5: it out of this?
• 15:16
  Speaker 8: I think SAX does make it out of this. But
• 15:18
  Speaker 8: I'm an optimist by nature, just so everyone listening knows that.
• 15:23
  Speaker 8: But I do think they're going to have to contract
• 15:26
  Speaker 8: in order to grow. So this is the time to
• 15:29
  Speaker 8: be extremely self aware, extremely scrutinous, and determine which stores
• 15:35
  Speaker 8: are going to provide you with the most relevance to
• 15:39
  Speaker 8: your customers, and which ones can you stock well and
• 15:43
  Speaker 8: have pre eminent customer service, and then close the others.
• 15:47
  Speaker 8: You can always reopen stores. It's not a good idea
• 15:52
  Speaker 8: to just have a huge footprint that's lackluster.
• 15:57
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
• 16:04
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 16:08
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay, and Android
• 16:11
  Speaker 1: Otto with the Bloomberg Business app. Listen on demand wherever
• 16:14
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 16:18
  Speaker 5: John, when was the last time you ate at McDonald's
• 16:21
  Speaker 5: or Taco Bell?
• 16:22
  Speaker 7: Ah, it's been a while Taco Bell, never McDonald's, maybe
• 16:26
  Speaker 7: like years. Look at me, I can't that's stuff anyway. Well,
• 16:30
  Speaker 7: apparently it is approaching noontime, so lunch is here.
• 16:33
  Speaker 2: Yeah, maybe you'll have to go there for lunch. We'll
• 16:35
  Speaker 2: have to check out Taco Bell.
• 16:37
  Speaker 5: Apparently those restaurants are going to get a boost from
• 16:40
  Speaker 5: December economic data that is poised to lift US restaurant
• 16:44
  Speaker 5: same store sales. That's along with cheaper gas prices and
• 16:48
  Speaker 5: relief from new tax rules. We'll get more into this
• 16:52
  Speaker 5: with Michael Halen, Bloomberg Intelligence Senior restaurant and food services analyst. Michael,
• 16:57
  Speaker 5: what is your outlook for restaurants sales going into twenty
• 17:01
  Speaker 5: twenty six.
• 17:03
  Speaker 9: Yeah, we think sales are set to improve here in
• 17:08
  Speaker 9: twenty twenty six, especially in the first half. You know,
• 17:10
  Speaker 9: oil guessling prices are down, you know, thirteen ish percent
• 17:17
  Speaker 9: versus one queue of last year. We're lapping you know,
• 17:20
  Speaker 9: bad weather, cold weather, snow, and a really bad flu
• 17:24
  Speaker 9: season from a year ago. And then we have tax relief,
• 17:28
  Speaker 9: which which historically really helps restaurants spending, and you know,
• 17:35
  Speaker 9: and then we have a couple of things on the upside.
• 17:36
  Speaker 9: I mean, this administration is looking into, you know, potentially
• 17:41
  Speaker 9: credit card reform, and I don't know, if they're done
• 17:43
  Speaker 9: with the tax reform, and we could see more interest
• 17:48
  Speaker 9: rate cuts. So all of those things we think are
• 17:50
  Speaker 9: going to feed into better consumer sentiment. And we saw
• 17:54
  Speaker 9: that in some of the economic data last month, and
• 17:57
  Speaker 9: we think it spells, you know, a much better a
• 18:00
  Speaker 9: year for restaurants spending.
• 18:01
  Speaker 7: Were were talking about Daniel Blues Restaurants or Mickey D's.
• 18:06
  Speaker 9: Well, you know, we think McDonald's, you know, a lot
• 18:09
  Speaker 9: of these chains we cover are going to benefit, but
• 18:11
  Speaker 9: we think you know, McDonald's in Taco Bell in our
• 18:14
  Speaker 9: most recent note, we're two that we pointed to because
• 18:17
  Speaker 9: low income consumer are going to benefit from the tax reform.
• 18:20
  Speaker 9: They're they're the segment of the consumer that I have
• 18:25
  Speaker 9: kind of pulled back from restaurants in the last couple
• 18:27
  Speaker 9: of years and so giving them a boost with tax reform.
• 18:31
  Speaker 9: They're the ones that you know, are most sensitive to
• 18:34
  Speaker 9: gasoline prices, so the cheaper gas is going to help
• 18:36
  Speaker 9: them the most. And like I said, we've seen it
• 18:39
  Speaker 9: in the consumer sentiment data that the improvement in University
• 18:43
  Speaker 9: of Michigan consumer sentiment was due to low income consumers.
• 18:46
  Speaker 9: So these things are all pointing to, you know, better
• 18:50
  Speaker 9: results at fast food chains like McDonald's and Taco Bell.
• 18:54
  Speaker 5: Are there any specific chains that you think will be
• 18:58
  Speaker 5: bigger beneficiaries than others?
• 19:01
  Speaker 9: Well, outside of those two, you know, cav and Wingstop
• 19:03
  Speaker 9: are a couple of the names that we think can
• 19:05
  Speaker 9: have big bounce back years. You know, Cava, you know,
• 19:10
  Speaker 9: in a vacuum. It had a very good year, right,
• 19:12
  Speaker 9: but they didn't hit lofty targets that they had set,
• 19:16
  Speaker 9: and earning slowed off of a very strong twenty twenty four,
• 19:19
  Speaker 9: and so we think they're set up really nicely to
• 19:22
  Speaker 9: see an acceleration here in same store sales and kind
• 19:26
  Speaker 9: of same thing in Wingstop. Both of them were victims
• 19:29
  Speaker 9: in twenty twenty five of incredible twenty twenty four success,
• 19:33
  Speaker 9: and now that they have much more reasonable same store
• 19:37
  Speaker 9: sales comps to LAP, you know, we think we could
• 19:40
  Speaker 9: see a big boost there.
• 19:42
  Speaker 7: You know.
• 19:42
  Speaker 9: Wingstop, one of the big things that they have going
• 19:44
  Speaker 9: on is a new smart kitchens that are gonna massively,
• 19:48
  Speaker 9: massively help the operations improve sea service and get people
• 19:52
  Speaker 9: their wings hotter and faster.
• 19:55
  Speaker 7: Oh okay, what are you talking about the intersection of
• 19:57
  Speaker 7: AI and chicken wings?
• 20:02
  Speaker 9: Yeah, I mean, you know, restaurant business. Listen, the restaurant
• 20:06
  Speaker 9: businessman has been historically underinvested in technology, you know, and
• 20:12
  Speaker 9: they've been quickly.
• 20:14
  Speaker 7: And a deep fryer. What technology?
• 20:18
  Speaker 9: Yeah, Well, listen, when you go and sit down in
• 20:20
  Speaker 9: a restaurant and you have five people ordering five different things, right,
• 20:26
  Speaker 9: you don't start them all at the same time, right,
• 20:29
  Speaker 9: Like your sushi is going to be done a lot,
• 20:31
  Speaker 9: maybe faster or slower than my chicken karaaki, right. And
• 20:35
  Speaker 9: so technology is being used in the kitchen to let
• 20:39
  Speaker 9: the cooks know when to fire each meal so that
• 20:41
  Speaker 9: everything comes out at the exact same time hot. Right.
• 20:45
  Speaker 9: So there's definitely a lot of uses for artificial intelligence
• 20:49
  Speaker 9: and small kitchens in this industry.
• 20:51
  Speaker 5: So, Michael, what does that mean. Are we going to
• 20:53
  Speaker 5: go into a McDonald's and see robots making our fries?
• 20:56
  Speaker 5: What does this mean for jobs at restaurant chains?
• 21:00
  Speaker 9: Well, you know, restaurant chains have been able to reduce
• 21:03
  Speaker 9: labor hours by increasing the amount of automation. Me personally,
• 21:09
  Speaker 9: you know, I don't and I don't think we're going
• 21:12
  Speaker 9: to go into restaurants that don't have humans working in
• 21:16
  Speaker 9: them anytime soon or maybe ever. But you'll continue to
• 21:21
  Speaker 9: see kiosks right, because that takes away labor at the
• 21:26
  Speaker 9: at the counter. You'll continue to see upgrades to kitchens
• 21:31
  Speaker 9: and more kitchen automation to help decrease the labor needs
• 21:36
  Speaker 9: in the kitchen. It will it will continue to be
• 21:38
  Speaker 9: a point of focus as minimum wage continues to increase
• 21:42
  Speaker 9: and labor continues to become hard to find. So yeah,
• 21:47
  Speaker 9: it's it's going to continue to move this direction. Like
• 21:49
  Speaker 9: I said, we've this business is underinvested in technology for
• 21:52
  Speaker 9: a very long time, and so they have a long
• 21:55
  Speaker 9: way to catch up to you know, competitors say in
• 21:58
  Speaker 9: packaged food, where they're our plants are very automated.
• 22:02
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