February 11, 2025 • 38 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg News International Economics and Policy Correspondent Michael McKee discusses Fed Chair Jay Powell telling Senators the central bank doesn’t need to rush to adjust interest rates, again signaling that officials will be patient before lowering borrowing costs further. Bloomberg Businessweek Columnist Max Chafkin and Bloomberg News AI Reporter Rachel Metz talk about Elon Musk’s offer to buy OpenAI and CEO Sam Altman’s reaction to that bid. Christopher Merrill, Co-Founder and CEO of Harrison Street, shares his thoughts on investing alternative real estate. Andy Bennett, CEO of Driivz, discusses the Trump administration’s pause on charging infrastructure funding under NEVI. And we Drive to the Close with Greg Halter, Director of Research at Carnegie Investment Counsel.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:08):
This is Bloomberg Business Week Insight from the reporters and
editors that bring you America's most trusted business magazine, plus
global business, finance and tech news. The Bloomberg Business Week
Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio Markets.
Speaker 3 (00:27):
They did get a big dose of J. Powell today
as the FED chair was up on Capitol Hill in
a day just it should be day one, i should say,
of a semi annual testimony on monetary policy before Congress.
He answered many questions, but what everyone seemed to focus
on was his messaging around timing when it comes to
FED moves.
Speaker 4 (00:45):
With our policy stance now significantly less restricted than it
restrictive than it had been in the economy remaining strong,
we do not need to be in a hurry to
adjust our policy stance. We know that reducing policy restraint
to fast or too much could hinder progress on inflation.
Speaker 3 (01:04):
All right, that, of course is Fed Jo J. Powell
today before the Senate Banking Committee. Let's get more on
what he said and really what matters to investors. Bloomberg
International Economics and Policy Correspondent Michael McKey listening to it all,
joining us from our DC bureau. Mike, it seemed like
not really a new message, but he was pretty clear
about not having to adjust rates anytime soon.
Speaker 5 (01:28):
Absolutely, Carol, not a new message. This is exactly what
he said when he met with the press after the
last FED meeting. The FED has been pretty consistent in
saying that the economy is in good shape, and all
the adjectives he used. The economy is strong, the labor
market is solid, inflation has come down but is still
above its target. Is stuff that they have said for
(01:51):
quite some time now. So this was sort of a
message of the market that nothing has really changed. You see,
market moves because people feel they have to move, but oh,
that will probably wash out pretty soon. There was a
separate There were a separate group of messages to the
folks on Capitol Hill who were much more interested, interestingly enough,
(02:11):
in things like bank regulation and what the FED is
going to do about or thinks about some of the
president's fiscal policies than anything to do with monetary policy.
Speaker 6 (02:23):
And yet, Michael McKee, we did not get a concession
from the FED chair that the US has achieved a
soft landing, Republican Senator Kennedy from the state of Louisiana
pushing him on that, and he was not ready to concede.
Speaker 3 (02:40):
Yeah.
Speaker 5 (02:41):
I thought that was probably the most interesting exchange of
the whole hearing, because Senator Kennedy is, as you mentioned,
a Republican, and President Trump has been describing the economy
as a disaster area, a terrible situation, and here is
Senator Kennedy saying that the economy is in great shape
and it looked like you made a soft landing. J
(03:04):
Poll modestly saying well, I don't know if I would
take credit, and Kennedy saying, no, take credit, take credit.
I thought it was very strange.
Speaker 6 (03:12):
Is it pretty out of the norm for the senators
to congratulate or tell the Fed shair he deserves some credit.
I was pretty struck by that exchange, like you were. Typically,
you know, he goes to these things and he gets
a little bit of criticism. In this case, Senator Kennedy
was like, hey, you should take some credit for achieving
(03:34):
a soft landing, for the US not being in a recession,
for the US having the best economy in the world.
Speaker 5 (03:40):
Well, it normally depends on whose party is in the
White House, and who's driving the legislative agenda. The congressman
and senators ask questions sort of based on their own politics.
So that's why it was unusual that Senator Kennedy Louisiana
Republican would give praise to Jay Powell, especially considering who's
(04:00):
in the White House and the man there has been
very critical of the economy.
Speaker 3 (04:05):
He didn't talk about tariffs, did he either, No.
Speaker 5 (04:08):
He refused to take any position on anything the president
is doing. He was asked several times in an economic way,
you know, as an economist, he's not an economist, but
as a member of the FED, and what do your
economists say about the impact of the president's policies on
the economy, And he said, we don't comment on what
the president says or does. That's up to the president.
(04:32):
And then asked about things that Congress could do, he said, that's.
Speaker 7 (04:35):
Up to you.
Speaker 5 (04:36):
We don't comment on that. His basic message is sort
of we're staying in our lane and they're keeping their
head down. They don't want to provoke anybody into any
more of this talk about the FED losing its independence?
Speaker 3 (04:49):
Is that kind of the mission of whether it's Jay
Powell or any FED chair when they go before Congress
and answer question, Is it just to kind of maintain
the status quo as much as they can?
Speaker 5 (04:58):
Yes, rare that any of these appearances a FED chair
would give any hint about what might be coming up.
The one time I can remember that happened was twenty
thirteen when Ben Bernanke suggested that the FED might, in
a couple of months or so think about cutting interest rates,
which led to the temper tantrum and the Taper tantrum,
(05:23):
and that was considered to be a huge mistake, even
though he thought it was relatively calming words. So they're
going to stay away from anything controversial or any real
guidance at these things.
Speaker 6 (05:38):
Mike, is the FED overstaffed? I'm asking the question that
Representative Andykam Ofersey, excuse me, Senator Andy Kam of New Jersey?
Speaker 3 (05:47):
Are you thinking about Doge?
Speaker 7 (05:48):
Perhaps?
Speaker 6 (05:48):
I am thinking about Doge. I mean that was kind
of the undertone of the question, wasn't it.
Speaker 5 (05:53):
Well, you know, I'm not qualified to say whether the
FED is overstaffed or not. They have more pah economists
than anybody. I can tell you that, But you know,
Jay Powell and others I have talked to behind the
scenes at the FED say, because it's an independent agency,
Elon Musk has no ability to do anything there and
(06:17):
they won't let him in the door.
Speaker 3 (06:18):
All right, before you go, I'm just curious about, you know,
in terms of what investors are expecting for rate cuts
this year, a cut not fully priced until September, less
than two cuts priced in for all of twenty twenty five.
There's so much room between now and then. I mean, Mike,
how do you incorporate any of these market expectations, especially
when so much can happen between, you know, month to
(06:41):
month and from meeting to meeting.
Speaker 5 (06:44):
Yeah, I don't, and I don't think the FED does,
because that's absolutely correct. Anything can happen between meetings. Tomorrow
we have a CPI report. If it were to show
inflation significantly jumping, and there's a possibility it could because
it's a January report, and remember the last couple of
Januaries we've seen higher than anticipated inflation, then markets might
start pricing in the idea of a rate increase. So
(07:07):
it's really hard to say that anybody has any visibility
on what the FED is going to be doing over
the next twelve months, especially since we don't know what
Trump's policies are going to be, and we can certainly
be surprised by the data whether or not the president
has any influence on it.
Speaker 3 (07:25):
All right, Mike, so appreciate it. Mike McKee out there
in Washington, Bloomberg International Economics and Policy Correspondent.
Speaker 2 (07:31):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 3 (07:45):
Elon Musk lead's group of investors that is offered to
buy the nonprofit that controls open Ai for ninety seven
point four billion dollars, escalating a clash between the TESTA
chief executive and the artificial intelligence company that he co founded.
Now another co founder who is also happens to be
open ai CEO. We're talking about Sam Altman. So thanks,
no thanks, offered to buy Musk's x social media platform
(08:07):
for nine point seven to four billion. You know, he
just moved the decimal point a little bit over on
Musk's and the team's offer. So there's a little bit
of a tit for tech going back and forth here well.
Speaker 6 (08:17):
Earlier today, on the sidelines of the Paris Ai Summit,
Bloomberg TV caught up with Sam Altman, who weighed in
on why Musk maybe making the move.
Speaker 1 (08:25):
I think he was probably just trying to slow us down.
He obviously is a competitor. It's you know, he's working
hard and he's raised a lot of money for Xai
and they're trying to compete with us from a technological perspective,
from you know, getting the product into the market. And
I wish he would just compete by building a better product.
Speaker 6 (08:45):
Whether you have it. Open Ai CEO and co founder
Sam Altman on the sidelines of the Paris Ai Summit,
here to help us make sense of this fast moving story.
Back with us Bloomberg Business we call him this Max Chafk,
and he's the co host of the Elning podcast. Would
you can find on the Bloomberg and at Bloomberg Slash
Elon Inc. Max also the author of the contrarian Peter
Teel and Silicon Valley's Pursuit of Power. He's here in
(09:05):
our Bloomberg BusinessWeek studio and out there in our San
Francisco bureau. Rachel metz Ai, reporter for Bloomberg News Max.
We caught up with you as all of this was
breaking late yesterday. Rachel was putting the finishing touch on
her own story about this. What more have we learned
about this offer? Is it to be taken seriously?
Speaker 8 (09:23):
I mean, I think that it is to be taken
as an effort to, like Sam Altman says, you know,
influence the process that open ai is going through, which
is a process that Elon Musk has said he opposes,
right He's he's separately filed this lawsuit saying that open
ai was like unfairly converted into a for profit company. Meanwhile,
(09:44):
Sam Altman now is trying to raise additional funds, you know,
trying to you know, expand what it's doing. And Musk,
of course operates a competitor. I do think, you know,
there probably is a price under which Elon Musk would
be interested in owning open Ai. I would raise all
sorts of questions. So it feels like a not totally
serious offer, but also not entirely a joke offer either.
Speaker 3 (10:08):
So Rachel, come on in on this. What else have
you learned since it broke? And is it a real offer.
Has anybody seen the offer or heard from an investment
banker about the offer?
Speaker 7 (10:17):
Like what do we know?
Speaker 9 (10:19):
Yeah, So that's where I'm actually a little bit unclear.
I believe Larry Summers, which is who is one of
the open AI board members, I haven't I haven't spoken
to him. I reached out to him, but I haven't
heard back from him. But I believe he was saying
on TV that he hadn't seen an official offer. So
if that is the case, then I'm a little bit
confused about how official this offer is, you know, out there.
Speaker 3 (10:40):
But he has said he has not received any formal
communication from Musk on the bid.
Speaker 7 (10:44):
I mean, if if.
Speaker 3 (10:45):
He's a member of the board, you would assume he would, right.
Speaker 9 (10:48):
Well you would because the statement specifically said that they
sent this bid to board members. So if a board
member hasn't gotten it, then what does that say?
Speaker 7 (10:58):
Where's the bid? You know, like show me the bit?
Speaker 3 (11:01):
Yeah, you know, so like if it so, Max, come
on back. So like, if there is no official offer,
is this just it must play an around? Or should
we not assume that there isn't an offer yet?
Speaker 8 (11:14):
Well, I mean, look, Rachel's kind of hinting at this,
but Musk has a track record of sort of uh,
speaking too soon.
Speaker 1 (11:23):
Maybe.
Speaker 8 (11:23):
You know, there was the famous take private offer which
led to a whole battle with the sec where must
said he had secured funding. In fact, you know, he
had not secured funding by any normal definition. That's it, right, Like,
because open Ai is trying to negotiate this for profit transition.
(11:45):
If there is a credible offer, if there is some
rich guy, and Elon Musk is a very rich guy,
he also has access to the richest guy to you know,
I don't like the question of could Elon Musk come
up with ninety seven billion dollars? You know, that's probably
where asking. He definitely is worth more than that. He'd
have to borrow more money. He's already brought a lot
of money against his shares. He's also there are lots
(12:07):
of bankers out there, lots of financiers who are you know,
kind of clamoring to do business with him. So so
it does seem like realistic that he could if he
wanted to get this money, and if he's making a
formal declaration, that seems to me. I'm not a lawyer,
but it seems to me like something that the you know,
nonprofit board of open ai is going to have to
(12:28):
take seriously.
Speaker 6 (12:29):
Rachel, what does XAI have that open Ai doesn't have?
Or maybe a better way to ask that is, what
does Opena have that XAI can't do?
Speaker 3 (12:39):
Like?
Speaker 6 (12:39):
How much better is open ai.
Speaker 7 (12:41):
Than x I mean?
Speaker 9 (12:43):
Open ai has been working on its technology and lots
of different types of technology for years now, as musk
No since he was part of the company for a
while in the early days. It also has huge mind share,
huge attention share. It has a reputation as a somewhat
consumer focused company for an AI company, which a lot
(13:04):
of the other AI companies do not have, that they
have actual users and actual revenue. There's just a lot
of attention focused on this company. X meanwhile, has done
a bunch of work in a reasonably short period of time,
but it's not super clear where they are in terms
of developing their technology. To say, the next level like
(13:27):
Rock three, I think is the one that people are
anticipating right now.
Speaker 7 (13:31):
It's not out as of yet.
Speaker 9 (13:33):
The companies and I would say a much earlier stage
than open Ai. It has raised a ton of money though,
and that should not be discounted at all. I mean,
I think regardless of how real or unreal this effort
is to buy open Ai, it is clear it puts
a ton of attention on Elon Musk and his ambitions.
Speaker 7 (13:52):
And as Max said at.
Speaker 9 (13:54):
Sort of coming up the works here for open AI's
transition from a nonprofit to a more straightforward for profit company,
is it so? I mean we're here talking about it?
Speaker 3 (14:04):
Yeah, day two? Actually is it important? And let me
put this poses to you first, Rachel and then pull
in Max on this. But I mean the interview that
our team on the ground did at the AI submit
over in Paris and France that Sam Waltman said when
I asked about Musk and maybe why he's doing this, well,
(14:25):
you know, probably his whole life is from a position
of insecurity. I feel for the guy altmanata that he
doesn't think Musk is a happy person. It's important that
we understand. I mean, do these two guys really really
dislike each other. I mean, it's important to understand the
relationship between the two as we try to figure out
what's going on here.
Speaker 9 (14:45):
I think it's important to understand it, but I also
think it's a bit tricky to understand, at least as
an outside observer. I mean, we've gotten some hints about it,
specifically from some of the emails that open Ai released
last year as part of the court fight between Elon
and and open Ai, and it sounds like in the
early days they had what seemed like a pretty good
(15:06):
relationship and then things just became acrimonious. But you also
see Sam saying publicly things that are still pretty supportive
of Elon or almost sounding like kind of wistful, like
he wishes things were better between them. So, I mean,
I think the feelings that at least Sam has for
Elon seems pretty mixed, and they're not all bad.
Speaker 7 (15:25):
They're certainly not all bad feelings.
Speaker 2 (15:27):
Yeah.
Speaker 8 (15:27):
Well, and also Elon Musk has tried to take control
of this company before. We know that from the sort
of back and forth between Altman and Musk over this
lawsuit that I mentioned earlier, where Musk kind of tried
to as open Ai was getting bigger, essentially tried a
few different things, but trying to either absorb open Ai
into Tesla or to take it over. He has wanted
(15:50):
this thing for a long time, and they have been
partners for a long time. Any Rachel's right, we don't
really know. You know, it definitely feels like they're they're
in something of a few right now. There have been times,
and there was a Wall Street Journal report not long
ago saying that they hugged it out, you know, at
the end of last year. So so like there has
been some friendship at times, although although at this point,
(16:13):
I mean, you know, it looks it looks acrimonious.
Speaker 6 (16:16):
Max, I want to ask you this because your co host, Sorry,
go ahead, Rachel jump in.
Speaker 7 (16:19):
Oh no, no, no, I just I was just agreeing.
Speaker 9 (16:21):
I mean, we're it's getting harder and harder to imagine
them hugging it out.
Speaker 2 (16:25):
It is.
Speaker 7 (16:26):
Max.
Speaker 6 (16:26):
I want to ask you this because you're cost of
the Elonning podcast, and you know there he is the
story of the biggest business story of our generations. I
think how the Elonning podcast puts it. And you know,
given that he has SpaceX, he's CEO of Tesla, he
has Neurolink boring company x XAI.
Speaker 3 (16:50):
Doge doge.
Speaker 6 (16:52):
But it's a story about power. If he were to
get control of open Ai, how much more powerful would
that make him?
Speaker 8 (16:58):
I mean that that's part of the head scratcher here
for me, I'm part of Elon Musk's argument in this
suit has been that open ai and Microsoft have been
engaged in anti competitive behavior. It's hard to understand how
you know a person like you've just described who also
owns another AI startup, How regulators, how the FTC. Maybe
a normal FTC, an FTC that is not Donald Trump's
(17:19):
FDC would be okay with that, right, It seems like
this would be a huge red flag for anti trust
regulators if it really went that far. Of course, like
Rachel's saying, I mean, we that's getting way ahead of
ourselves right now.
Speaker 7 (17:32):
Do we know.
Speaker 3 (17:33):
Does Musk still own some of open Ai? Do we
know anything about that?
Speaker 10 (17:36):
Well?
Speaker 8 (17:36):
Open Ai? Rachel jump in, Actually, I think she has
a better idea. Open i has founded as a non
for profits, So I don't think he owns any equity.
Speaker 9 (17:44):
Yeah, my understanding is that he doesn't. I'd have to
go back to some of those emails. I think he
might have been offered some of the company if I
remember correctly.
Speaker 7 (17:54):
But declined it at a point in the past.
Speaker 3 (17:57):
I also do wonder about like Microsoft, in all of this, right,
they've made a big old hunk of investment into open Ai.
I mean, have we heard from them, Rachel, at all,
in terms of all of this that's going on.
Speaker 9 (18:08):
No, I haven't heard a peep from a lot of
people on this, and that makes me wonder how seriously
other parties are taking this. I know they don't want
to ignore it, but I think that maybe they're sort
of watching and waiting.
Speaker 6 (18:21):
Well, remind us, Rachel, it is quite the delta between
this offer and you know, the latest reported valuation out
of fundraise for open Ai.
Speaker 7 (18:30):
That is true.
Speaker 9 (18:31):
What is a little confusing to me is what this
offer is for specifically versus what open ai and all
of its entity.
Speaker 7 (18:41):
Is valued at.
Speaker 9 (18:42):
Because the offer or the statement from the lawyer says
open Ai Inc. And all of its assets, So that
would be the nonprofit and what you know, in my
mind that would include all the things the nonprofit owns
or owns a stake in. But it's not one hundred
percent clear, and so I'm not really sure how you
value that versus how value the nonprofit alone versus you know,
(19:03):
the valuation of the company.
Speaker 7 (19:04):
Hey, just get a projected higher.
Speaker 3 (19:06):
Just get about twenty seconds max. For someone on the
elon Ink podcast. You guys, you know the ebbs and
flows that are Elon. What are you watching out for
next in this story? Where do you what do you
think might be coming at us?
Speaker 1 (19:16):
Just quickly?
Speaker 8 (19:16):
Well, I think we need to see again what Microsoft does.
Speaker 7 (19:19):
And you know, Elon Musk is all is.
Speaker 8 (19:23):
All over the place in Washington right now? Where does
Trump go in response to all this?
Speaker 3 (19:28):
All right, guys, thank you so much. Max Chaffin, columnist
at Bloomberg BusinessWeek, a host of the Elon Inc. Podcast.
Here in studio. Rachel Metz out there in San Francisco.
She's AI reporter here at Bloomberg News.
Speaker 2 (19:39):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern up on Apple car
Play and the Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 6 (19:57):
It is time for another edition of Bloomberg plugg Dan,
your weekly get EV's and the Trump administration is suspending
federal funding for electric car chargers, following through on one
of President Trump's first directives to roll back US subsidies
for plug in vehicles after he retook the White House.
For more, we turn to Andy Bennett's CEO of Drives.
It's a company that provides ev charging management software. It's
(20:18):
part of the five point seven billion dollar market cap
publicly held Volunteer Corporation. Andy joins us from Raleigh, North Carolina. Andy,
welcome back. Good to have you back with us. How
does a decision like this from the White House affect
your business?
Speaker 11 (20:33):
Yeah, you know, listen, we build software that the world's
largest charge point operators, the folks that operate networks use
in order to basically bring you know, reliable charging to
their customers. There's no doubt about it. You know, Nevy
funding was a really positive thing for the industry. If
you know, if you're if you're on the cost where
(20:55):
you're thinking about buying an electric car, often one of
the anxieties you have is around range. So seeing more
chargers is a great thing. The more you see, the
more comfortable you're going to be with it. But when
you think about Nevy funding and the impact what it
really means for us as an industry, as a charging industry,
it's it's been relatively small. Kind of looking back on
(21:16):
twenty twenty four in the United States, there were about
fourteen thousand new chargers added publicly available chargers anyone can
go use. You know, NEVY was responsible for about one
hundred and twenty one hundred and thirty of those chargers,
So we're talking about zero point zero one percent of
(21:36):
all the chargers added in the United States last year
had anything to do with NEVY.
Speaker 6 (21:41):
Thealric Vehicle Infrastructure Formula program that you're referring to NEV, Yes.
Speaker 11 (21:47):
My apologies, Yes exactly, And so if you think about it,
you know, essentially it was an absolutely positive thing, and
I think it had some great benefits. And you know,
we still have a lot of projects underway, so there'll
be another thousand charge are going to come to fruition
as a result of that funding. But it's certainly not
the thing that drives our industry.
Speaker 3 (22:08):
How much though, does an administration and a policy change
drive what happens in your industry? And I bring that
We're coming off this interview here on Bloomberg with the
US Energy Secretary Chris Wright, and when he says things
like one US focused on reducing the cost to produce oil,
coal will be essential in US for decades to come,
(22:30):
says US oil output can grow meaningfully, US seeking to
stop closure of coal fired power plants. Commenting on nuclear
I didn't hear a lot about alternative energy, so I
do wonder, you know, how does again, maybe nothing specifically,
(22:50):
but how does that tone and tenor coming from the
Energy Secretary potentially turn into policy. Are lack thereof in
terms of supportive policy for the ev and electrification industry?
Speaker 11 (23:06):
Sure, you know, eight percent of all new cars sold
last year in the United States were electric. Once people
drive electric cars, they tend to want them. And just
stepping back from that thinking about it, you know, one
way or the other, the endpoint for vehicles in the
United States and globally is going to be electric. So
(23:28):
the only question is where is that endpoint? So to
answer your question, I think when you have an administration
that really is pushing you know, one one form of transportation,
it absolutely helps. But in the end, it's going to
be the consumer that makes that decision. When you look
at other countries like Norway and parts of Europe were
over ninety percent of all new cars are electric, they
(23:51):
didn't have federal funding in place to do that. It
was around customer choice. It was around broad based decisions.
Speaker 6 (23:58):
But isn't that because the gallon of gas or a
leader of gas is like nine bucks.
Speaker 11 (24:05):
Certainly the price of fuel has a lot to do
with it, and in a sense, in a sense, I
don't want to say we subsidize fuel, because we tax
it quite a bit here in the US, but we
tax it at a just a fraction of.
Speaker 6 (24:16):
What some of our European counterparts tax it at.
Speaker 11 (24:20):
Yeah, yeah, that's that's fair. You have very high fuel prices.
Obviously in the United States, we've been really lucky with
lower fuel prices. You know, for us as a company,
my parent company, Volunteer, we work with a lot of
clients that don't think just electric or just gas. We
think about sort of all the above.
Speaker 2 (24:38):
Right.
Speaker 11 (24:39):
We have companies that focus on classic fueling and hydrogen,
and of course my company, my focus is around electric.
So you know, ultimately, the administration being being more neutral
about that what that source of fuel is going to
be isn't going to have much of effect on the
EV adoption rates. People are going to continue you to
(25:00):
buy evs. They're going to continue to grow. Today, there
is a massive gap between the amount of cars that
are on the road that are electric already and then
needed EV infrastructure, so you don't necessarily need the federal
government to go help fill that gap. The companies, the
charge point operators that make this their life, that make
(25:20):
us their living, that are that are profitable corporations, They're
going to continue to put that EV infrastructure out there
because it's just playing, you know, good business at the
end of the day.
Speaker 3 (25:30):
And to be fair, you know, we did a deep
dive here at Bloomberg get to Norway, and you know,
they talked about various policies. There were some incentives. There
are value added taxes where scrap cars were given access
to bus lanes. Parking was cheaper many cases free drivers
weren't charged for using ferries or total so there was support.
Speaker 7 (25:49):
To be fair, I.
Speaker 6 (25:50):
Mean, have you visited Norway.
Speaker 3 (25:51):
Yeah, But I'm just saying that, you know, there are
things to be amazing, you know that make maybe you know,
EV is a more obvious choice for more and more
new regions. I don't know, are you hopeful about the
outlook here? You know how administrations, you know, whether it's
Democratic Republican, they come in and they've got an agenda
(26:13):
and they have policies we're already you know, producing a
ton of fossil fuels, but it does look like we
could have a lot more support from this administration. And
you do wonder when it comes down to choice. You know,
people are going to look at the choice of what
the cars cost, and they're also going to look at
the choice of a fuel is cheap. You're not going
(26:34):
to be so worried.
Speaker 11 (26:37):
Yeah, that's that's fair. Yeah, I look, I ultimately I
believe that electrification is going to take place. The experience
that drivers have is such a positive experience. So you
know this, you know this change or at least maybe
you know thinking about this as a less subsidized industry.
(26:59):
It's not such a bad thing. You know, all of
us in industry. One of the things we hate the
most is big fluctuations between different administrations because all those
policy changes, what they do ultimately is create uncertainty. So
what we want is the unit economics of evs to
get cheaper. Right, as that cost of that battery gets cheaper,
the cost of the car will be cheaper, It'll be
(27:19):
more competitive. As more EV infrastructure charging gets available, people
will just it'll become normal for folks. Yeah, and those
are just sort of natural commercial things that I think
will occur.
Speaker 3 (27:30):
Andy, do you think Elon Musk being involved in the
government and certainly very close it seems that with President Trump,
is that a plus for the EV industry ultimately?
Speaker 11 (27:41):
Yeah, you know, Tesla was a huge recipient of of
course the Navy funding for one, so you know, but look,
the industry has changed. If we had this conversation a
year ago, all we would have been talking about was
Tesla cars in the United States. Today it's about fifty
percent of all the sales in the United States. We
have a lot of new vehicles out there, a lot
of new comp petition. So look, Elon Musk, clearly, if
(28:03):
it weren't for him, there would be no EV industry, right.
There's just there's no arguing that all these cars, all
these companies, this entire industry was spurred by the innovation
of that company. But I think having him, you know,
have the chance and the opportunity to influence the administration
ultimately will be really positive for what we're doing. Absolutely,
(28:24):
does it.
Speaker 6 (28:25):
Are you concerned? We've seen reports out of Germany, other
European countries as well. California just very briefly about fear
people buying Tesla's as a result of perhaps what Elon
Musk has been doing in his position in the federal government.
Do other EV companies become winners because of that?
Speaker 11 (28:43):
Well, like I said, I mean, almost fifty percent of
all the EV sold in the United States this year
we're We're not Teslas, So there's clearly a shift taking place.
Speaker 6 (28:50):
We're going to leave it there. That's Andy Bennett over
at Drives. He's the CEO of Drives. It's a company
that provides EV charging management software.
Speaker 5 (29:00):
MAC.
Speaker 10 (29:01):
I'll about you.
Speaker 4 (29:02):
Let me drive.
Speaker 6 (29:02):
Oh no, no, no, no, this is not a toy.
Speaker 1 (29:05):
Who's going to drive?
Speaker 10 (29:07):
All right?
Speaker 3 (29:07):
Please, I'll do the gravel.
Speaker 7 (29:10):
Let's wat I want to drive.
Speaker 4 (29:13):
It's a good question.
Speaker 2 (29:18):
This is the drive to the clothes.
Speaker 10 (29:20):
Pongs for me?
Speaker 2 (29:21):
Thing well, Jovin Don on Bloomberg Radio.
Speaker 3 (29:25):
Right, TikTok, everybody, Just about eighteen minutes to go until
we wrap up the trading day on this Tuesday. You
heard Charlie B. Maloney working down the trade for you.
We've got a bunch of earnings coming up after the
closing bell, including Avis Killiad Sciences, Door dash Lift, Zillow
Energy Transfer, and aig, so we'll be breaking them down.
In the meantime, let's get a read on the markets.
Speaker 6 (29:46):
Yeah, I should know too. We are expecting to hear
from the presidents imminently. He's signing some executive orders, so
we'll get some take playback at a certain point and
bring you his comments as we do get them. In
the meantime, Big Halter is standing by. He's director of
research at the Carnegie Investment Council. They've got about five
billion dollars in assets under management. Greg joins us from Cleveland. Greg,
(30:09):
were you glued to fed Chair Powell's testimony this morning?
As we were?
Speaker 10 (30:14):
I wouldn't say I was glued. It was up on
my Bloomberg and peripheral basis. I was watching and listening
to some of the comments and questions.
Speaker 7 (30:24):
Why is that?
Speaker 6 (30:25):
I mean, is it because what you knew he wouldn't
say anything that would move markets? Are you looking at
what he's saying in a different way right now? Why
weren't you glued to it?
Speaker 11 (30:36):
Well?
Speaker 10 (30:36):
I guess from the standpoint of our firm looking for
long term investment ideas, you know, as a meeting, the
meeting basis really going to make that Big of a difference.
You know, obviously if we're on some big, long string
of rate hikes or rate declines, yeah, you're looking for
a hints, but it seems like we're more on of
(30:58):
a steady state where there may be no action this
year in terms of rates.
Speaker 3 (31:02):
Hey, one thing I want to ask you, since we're
just coming off an interview with the US Energy Secretary,
who talks specifically about the US being focused on reducing
the cost to produce oil. Coal will be essential in
the United States for decades to come, talking about oil
output growing meaningfully, US seeking to stop the closure of
coal fired power plants. I am curious in terms of
(31:26):
an energy play, is there something that you feel like
you can hang your hat on and that you'd be
willing to make an investment bet on at this point.
Speaker 10 (31:35):
Well, anything in that space that's new is going to
take time, obviously, but I would think that nuclear and
that whole area has viability. It's something that probably needs
to be looked at very closely, which I think the
top folks are and there's certainly some areas around that
(31:56):
that makes sense for the long term. Again, none of
the stuff is going to happen overnight.
Speaker 3 (32:02):
Yeah, most people would say, you know, I just come
off a panel. Sorry, it's like top of mine. And
it was all about power demand and the increase that
we're seeing all of a sudden after being kind of
pretty steady and not really moving around, there is a
jump in demand because of data centers, the electrification industrialization.
Having said that, the nuclear play said to be maybe
about eight to ten years away, doesn't mean people aren't
(32:25):
starting to take moves, but it's not a quick process.
It's not an investment bed or do you look at
the utilities. We certainly have seen some of the energy companies,
some of the utilities pop up in a big way
on expectations of AI power demand.
Speaker 10 (32:40):
Yes, certainly that is playing into the calculus here. Some
of the companies that could be of interest would be
Next Era Energy, American Electric Power up in Wisconsin, and
then of course the non regulateds have had huge moves.
But we'd also look at the entities that would be
providing the picks and shovels if you want to look
(33:03):
at it that way. Into the nuclear side of things.
You know, things like BWXT, which we don't have a
position in, but something we're looking at that deals in
the whole nuclear space. So I think that may be
an interesting way to play, because again, this is going
to take a long time. People are certainly interested in
(33:24):
looking at areas, but I think you have to pick
your spots because you may see some huge run ups
and then some disappointment with fifty sixty seventy percent drawdowns
in some of these names.
Speaker 3 (33:36):
I just want to mention some headlines that are crossing
the bloomberg, and this has to do with President Trump
at the White House. Elon Musk seems to be there
speaking at a White House event with the President, the
president saying he had a great discussion about Gaza. Elon
must saying it's essential to reduce federal expenses. So some
headlines just kind of starting to trickle out. We'll continue
(33:58):
to monitor them and bring them to you as they
are known.
Speaker 4 (34:01):
Hey.
Speaker 6 (34:01):
In the meantime, speaking of energy, Greg the Magnificent Seven,
over the last couple of weeks. Two weeks ago, Carol
and I were sitting here talking about deep Seek and
what happened as the result of the deep Seek news,
kind of like during post Davos. Over that weekend, I
was surprised to see the hyperscalers and the megacap tech
(34:24):
names continue their commitments to CAPEX spending. Are they spending
too much money on this stuff?
Speaker 10 (34:34):
It's a great question, you know. We thought maybe twenty
twenty four was peak at one hundred and eighty billion
or whatever it was of the top four companies. This year,
we're looking at maybe three hundred or more billion. I
guess these are all forecasts, you know, as Meta did
with the Metaverse, there was a lot of spending, the
stock did not react very well, and then that spending
(34:57):
kind of got pulled back. So I don't think any
of these are commitments. You know, these companies are out
there saying what they want to do. But as we know,
these news events, these news announcements from companies like deep Seek,
you just don't know, and that could change things in
a hurry.
Speaker 6 (35:14):
So well, which part which part? Which part do you
not know? Do you not know to what extent they
were able to be more efficient given what they released?
Is that what we don't know.
Speaker 10 (35:26):
I think it's a whole range of things, you know.
The efficiency side of things is one area, and that
certainly affected some of the names like the Eatons and
the Vertives of the world from the standpoint of looking
at other companies, you know that provide chips and so forth.
(35:46):
There's just so much going on that I'm not sure
anyone actually really knows what's going on because the news
is moving so fast. It's it's kind of amazing. We
know things are moving faster and faster, but this is
making head spin.
Speaker 3 (36:00):
I think, Hey, Greg, so are you comfortable just got
about a minute left here to make take a new
possession position, excuse me, a new investment position? Or is
it better to just kind of wait and see and
let the dust settle, whether it's you know, new policy
out of the administration and the White House, whether it's
you know, FED still trying to figure out the way forward.
Like I don't know, do you kind of sit tight?
Speaker 10 (36:23):
Yeah, we're sitting tight pretty much, fully invested in mostly stocks,
probably seventy seventy five percent. The rest would be fixed income.
But we're going we're hanging in there with the tried
and true names. If these big numbers for this cappex continue,
we think the mag seven have a decent runway in
front of them, you know, saying that Microsoft's been flat
(36:44):
for a year, so it's kind of taken a break
care versus some of the other names. So again you
do have to pick your spots. But you know, there's
nothing wrong with a Microsoft type name. It's almost one
of these must own companies.
Speaker 3 (36:56):
Saying with Apple, all right, kind of leave it on
that note. Hey, Greg, good to get some time with
you on this Tuesday. I'm taking a look at shares
of Microsoft. By the way, they're down about two percent
for the year, so pretty mellow, they shared.
Speaker 7 (37:07):
Greg Halter.
Speaker 3 (37:08):
He's director of research at the Carnegie Investment Council, joining
us from Cleveland, Ohio.
Speaker 6 (37:12):
Hey, has meta platforms one of your gainers today.
Speaker 3 (37:14):
Carol, No, because it wasn't up as it well.
Speaker 6 (37:16):
Now it's up now seventeenth day in a row.
Speaker 3 (37:19):
When I looked at it earlier, I was going to
put it on my list, and I'm.
Speaker 7 (37:22):
Like, because it was down, it's at a record.
Speaker 3 (37:25):
It's pretty amazing. Yeah, seventeen, so the most consecutive games
by any publicly held stock.
Speaker 2 (37:32):
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Speaker 2 (00:08):
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Speaker 3 (00:27):
They did get a big dose of J. Powell today
as the FED chair was up on Capitol Hill in
a day just it should be day one, i should say,
of a semi annual testimony on monetary policy before Congress.
He answered many questions, but what everyone seemed to focus
on was his messaging around timing when it comes to
FED moves.
Speaker 4 (00:45):
With our policy stance now significantly less restricted than it
restrictive than it had been in the economy remaining strong,
we do not need to be in a hurry to
adjust our policy stance. We know that reducing policy restraint
to fast or too much could hinder progress on inflation.
Speaker 3 (01:04):
All right, that, of course is Fed Jo J. Powell
today before the Senate Banking Committee. Let's get more on
what he said and really what matters to investors. Bloomberg
International Economics and Policy Correspondent Michael McKey listening to it all,
joining us from our DC bureau. Mike, it seemed like
not really a new message, but he was pretty clear
about not having to adjust rates anytime soon.
Speaker 5 (01:28):
Absolutely, Carol, not a new message. This is exactly what
he said when he met with the press after the
last FED meeting. The FED has been pretty consistent in
saying that the economy is in good shape, and all
the adjectives he used. The economy is strong, the labor
market is solid, inflation has come down but is still
above its target. Is stuff that they have said for
(01:51):
quite some time now. So this was sort of a
message of the market that nothing has really changed. You see,
market moves because people feel they have to move, but oh,
that will probably wash out pretty soon. There was a
separate There were a separate group of messages to the
folks on Capitol Hill who were much more interested, interestingly enough,
(02:11):
in things like bank regulation and what the FED is
going to do about or thinks about some of the
president's fiscal policies than anything to do with monetary policy.
Speaker 6 (02:23):
And yet, Michael McKee, we did not get a concession
from the FED chair that the US has achieved a
soft landing, Republican Senator Kennedy from the state of Louisiana
pushing him on that, and he was not ready to concede.
Speaker 3 (02:40):
Yeah.
Speaker 5 (02:41):
I thought that was probably the most interesting exchange of
the whole hearing, because Senator Kennedy is, as you mentioned,
a Republican, and President Trump has been describing the economy
as a disaster area, a terrible situation, and here is
Senator Kennedy saying that the economy is in great shape
and it looked like you made a soft landing. J
(03:04):
Poll modestly saying well, I don't know if I would
take credit, and Kennedy saying, no, take credit, take credit.
I thought it was very strange.
Speaker 6 (03:12):
Is it pretty out of the norm for the senators
to congratulate or tell the Fed shair he deserves some credit.
I was pretty struck by that exchange, like you were. Typically,
you know, he goes to these things and he gets
a little bit of criticism. In this case, Senator Kennedy
was like, hey, you should take some credit for achieving
(03:34):
a soft landing, for the US not being in a recession,
for the US having the best economy in the world.
Speaker 5 (03:40):
Well, it normally depends on whose party is in the
White House, and who's driving the legislative agenda. The congressman
and senators ask questions sort of based on their own politics.
So that's why it was unusual that Senator Kennedy Louisiana
Republican would give praise to Jay Powell, especially considering who's
(04:00):
in the White House and the man there has been
very critical of the economy.
Speaker 3 (04:05):
He didn't talk about tariffs, did he either, No.
Speaker 5 (04:08):
He refused to take any position on anything the president
is doing. He was asked several times in an economic way,
you know, as an economist, he's not an economist, but
as a member of the FED, and what do your
economists say about the impact of the president's policies on
the economy, And he said, we don't comment on what
the president says or does. That's up to the president.
(04:32):
And then asked about things that Congress could do, he said, that's.
Speaker 7 (04:35):
Up to you.
Speaker 5 (04:36):
We don't comment on that. His basic message is sort
of we're staying in our lane and they're keeping their
head down. They don't want to provoke anybody into any
more of this talk about the FED losing its independence?
Speaker 3 (04:49):
Is that kind of the mission of whether it's Jay
Powell or any FED chair when they go before Congress
and answer question, Is it just to kind of maintain
the status quo as much as they can?
Speaker 5 (04:58):
Yes, rare that any of these appearances a FED chair
would give any hint about what might be coming up.
The one time I can remember that happened was twenty
thirteen when Ben Bernanke suggested that the FED might, in
a couple of months or so think about cutting interest rates,
which led to the temper tantrum and the Taper tantrum,
(05:23):
and that was considered to be a huge mistake, even
though he thought it was relatively calming words. So they're
going to stay away from anything controversial or any real
guidance at these things.
Speaker 6 (05:38):
Mike, is the FED overstaffed? I'm asking the question that
Representative Andykam Ofersey, excuse me, Senator Andy Kam of New Jersey?
Speaker 3 (05:47):
Are you thinking about Doge?
Speaker 7 (05:48):
Perhaps?
Speaker 6 (05:48):
I am thinking about Doge. I mean that was kind
of the undertone of the question, wasn't it.
Speaker 5 (05:53):
Well, you know, I'm not qualified to say whether the
FED is overstaffed or not. They have more pah economists
than anybody. I can tell you that, But you know,
Jay Powell and others I have talked to behind the
scenes at the FED say, because it's an independent agency,
Elon Musk has no ability to do anything there and
(06:17):
they won't let him in the door.
Speaker 3 (06:18):
All right, before you go, I'm just curious about, you know,
in terms of what investors are expecting for rate cuts
this year, a cut not fully priced until September, less
than two cuts priced in for all of twenty twenty five.
There's so much room between now and then. I mean, Mike,
how do you incorporate any of these market expectations, especially
when so much can happen between, you know, month to
(06:41):
month and from meeting to meeting.
Speaker 5 (06:44):
Yeah, I don't, and I don't think the FED does,
because that's absolutely correct. Anything can happen between meetings. Tomorrow
we have a CPI report. If it were to show
inflation significantly jumping, and there's a possibility it could because
it's a January report, and remember the last couple of
Januaries we've seen higher than anticipated inflation, then markets might
start pricing in the idea of a rate increase. So
(07:07):
it's really hard to say that anybody has any visibility
on what the FED is going to be doing over
the next twelve months, especially since we don't know what
Trump's policies are going to be, and we can certainly
be surprised by the data whether or not the president
has any influence on it.
Speaker 3 (07:25):
All right, Mike, so appreciate it. Mike McKee out there
in Washington, Bloomberg International Economics and Policy Correspondent.
Speaker 2 (07:31):
You're listening to the Bloomberg Business Week podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 3 (07:45):
Elon Musk lead's group of investors that is offered to
buy the nonprofit that controls open Ai for ninety seven
point four billion dollars, escalating a clash between the TESTA
chief executive and the artificial intelligence company that he co founded.
Now another co founder who is also happens to be
open ai CEO. We're talking about Sam Altman. So thanks,
no thanks, offered to buy Musk's x social media platform
(08:07):
for nine point seven to four billion. You know, he
just moved the decimal point a little bit over on
Musk's and the team's offer. So there's a little bit
of a tit for tech going back and forth here well.
Speaker 6 (08:17):
Earlier today, on the sidelines of the Paris Ai Summit,
Bloomberg TV caught up with Sam Altman, who weighed in
on why Musk maybe making the move.
Speaker 1 (08:25):
I think he was probably just trying to slow us down.
He obviously is a competitor. It's you know, he's working
hard and he's raised a lot of money for Xai
and they're trying to compete with us from a technological perspective,
from you know, getting the product into the market. And
I wish he would just compete by building a better product.
Speaker 6 (08:45):
Whether you have it. Open Ai CEO and co founder
Sam Altman on the sidelines of the Paris Ai Summit,
here to help us make sense of this fast moving story.
Back with us Bloomberg Business we call him this Max Chafk,
and he's the co host of the Elning podcast. Would
you can find on the Bloomberg and at Bloomberg Slash
Elon Inc. Max also the author of the contrarian Peter
Teel and Silicon Valley's Pursuit of Power. He's here in
(09:05):
our Bloomberg BusinessWeek studio and out there in our San
Francisco bureau. Rachel metz Ai, reporter for Bloomberg News Max.
We caught up with you as all of this was
breaking late yesterday. Rachel was putting the finishing touch on
her own story about this. What more have we learned
about this offer? Is it to be taken seriously?
Speaker 8 (09:23):
I mean, I think that it is to be taken
as an effort to, like Sam Altman says, you know,
influence the process that open ai is going through, which
is a process that Elon Musk has said he opposes,
right He's he's separately filed this lawsuit saying that open
ai was like unfairly converted into a for profit company. Meanwhile,
(09:44):
Sam Altman now is trying to raise additional funds, you know,
trying to you know, expand what it's doing. And Musk,
of course operates a competitor. I do think, you know,
there probably is a price under which Elon Musk would
be interested in owning open Ai. I would raise all
sorts of questions. So it feels like a not totally
serious offer, but also not entirely a joke offer either.
Speaker 3 (10:08):
So Rachel, come on in on this. What else have
you learned since it broke? And is it a real offer.
Has anybody seen the offer or heard from an investment
banker about the offer?
Speaker 7 (10:17):
Like what do we know?
Speaker 9 (10:19):
Yeah, So that's where I'm actually a little bit unclear.
I believe Larry Summers, which is who is one of
the open AI board members, I haven't I haven't spoken
to him. I reached out to him, but I haven't
heard back from him. But I believe he was saying
on TV that he hadn't seen an official offer. So
if that is the case, then I'm a little bit
confused about how official this offer is, you know, out there.
Speaker 3 (10:40):
But he has said he has not received any formal
communication from Musk on the bid.
Speaker 7 (10:44):
I mean, if if.
Speaker 3 (10:45):
He's a member of the board, you would assume he would, right.
Speaker 9 (10:48):
Well you would because the statement specifically said that they
sent this bid to board members. So if a board
member hasn't gotten it, then what does that say?
Speaker 7 (10:58):
Where's the bid? You know, like show me the bit?
Speaker 3 (11:01):
Yeah, you know, so like if it so, Max, come
on back. So like, if there is no official offer,
is this just it must play an around? Or should
we not assume that there isn't an offer yet?
Speaker 8 (11:14):
Well, I mean, look, Rachel's kind of hinting at this,
but Musk has a track record of sort of uh,
speaking too soon.
Speaker 1 (11:23):
Maybe.
Speaker 8 (11:23):
You know, there was the famous take private offer which
led to a whole battle with the sec where must
said he had secured funding. In fact, you know, he
had not secured funding by any normal definition. That's it, right, Like,
because open Ai is trying to negotiate this for profit transition.
(11:45):
If there is a credible offer, if there is some
rich guy, and Elon Musk is a very rich guy,
he also has access to the richest guy to you know,
I don't like the question of could Elon Musk come
up with ninety seven billion dollars? You know, that's probably
where asking. He definitely is worth more than that. He'd
have to borrow more money. He's already brought a lot
of money against his shares. He's also there are lots
(12:07):
of bankers out there, lots of financiers who are you know,
kind of clamoring to do business with him. So so
it does seem like realistic that he could if he
wanted to get this money, and if he's making a
formal declaration, that seems to me. I'm not a lawyer,
but it seems to me like something that the you know,
nonprofit board of open ai is going to have to
(12:28):
take seriously.
Speaker 6 (12:29):
Rachel, what does XAI have that open Ai doesn't have?
Or maybe a better way to ask that is, what
does Opena have that XAI can't do?
Speaker 3 (12:39):
Like?
Speaker 6 (12:39):
How much better is open ai.
Speaker 7 (12:41):
Than x I mean?
Speaker 9 (12:43):
Open ai has been working on its technology and lots
of different types of technology for years now, as musk
No since he was part of the company for a
while in the early days. It also has huge mind share,
huge attention share. It has a reputation as a somewhat
consumer focused company for an AI company, which a lot
(13:04):
of the other AI companies do not have, that they
have actual users and actual revenue. There's just a lot
of attention focused on this company. X meanwhile, has done
a bunch of work in a reasonably short period of time,
but it's not super clear where they are in terms
of developing their technology. To say, the next level like
(13:27):
Rock three, I think is the one that people are
anticipating right now.
Speaker 7 (13:31):
It's not out as of yet.
Speaker 9 (13:33):
The companies and I would say a much earlier stage
than open Ai. It has raised a ton of money though,
and that should not be discounted at all. I mean,
I think regardless of how real or unreal this effort
is to buy open Ai, it is clear it puts
a ton of attention on Elon Musk and his ambitions.
Speaker 7 (13:52):
And as Max said at.
Speaker 9 (13:54):
Sort of coming up the works here for open AI's
transition from a nonprofit to a more straightforward for profit company,
is it so? I mean we're here talking about it?
Speaker 3 (14:04):
Yeah, day two? Actually is it important? And let me
put this poses to you first, Rachel and then pull
in Max on this. But I mean the interview that
our team on the ground did at the AI submit
over in Paris and France that Sam Waltman said when
I asked about Musk and maybe why he's doing this, well,
(14:25):
you know, probably his whole life is from a position
of insecurity. I feel for the guy altmanata that he
doesn't think Musk is a happy person. It's important that
we understand. I mean, do these two guys really really
dislike each other. I mean, it's important to understand the
relationship between the two as we try to figure out
what's going on here.
Speaker 9 (14:45):
I think it's important to understand it, but I also
think it's a bit tricky to understand, at least as
an outside observer. I mean, we've gotten some hints about it,
specifically from some of the emails that open Ai released
last year as part of the court fight between Elon
and and open Ai, and it sounds like in the
early days they had what seemed like a pretty good
(15:06):
relationship and then things just became acrimonious. But you also
see Sam saying publicly things that are still pretty supportive
of Elon or almost sounding like kind of wistful, like
he wishes things were better between them. So, I mean,
I think the feelings that at least Sam has for
Elon seems pretty mixed, and they're not all bad.
Speaker 7 (15:25):
They're certainly not all bad feelings.
Speaker 2 (15:27):
Yeah.
Speaker 8 (15:27):
Well, and also Elon Musk has tried to take control
of this company before. We know that from the sort
of back and forth between Altman and Musk over this
lawsuit that I mentioned earlier, where Musk kind of tried
to as open Ai was getting bigger, essentially tried a
few different things, but trying to either absorb open Ai
into Tesla or to take it over. He has wanted
(15:50):
this thing for a long time, and they have been
partners for a long time. Any Rachel's right, we don't
really know. You know, it definitely feels like they're they're
in something of a few right now. There have been times,
and there was a Wall Street Journal report not long
ago saying that they hugged it out, you know, at
the end of last year. So so like there has
been some friendship at times, although although at this point,
(16:13):
I mean, you know, it looks it looks acrimonious.
Speaker 6 (16:16):
Max, I want to ask you this because your co host, Sorry,
go ahead, Rachel jump in.
Speaker 7 (16:19):
Oh no, no, no, I just I was just agreeing.
Speaker 9 (16:21):
I mean, we're it's getting harder and harder to imagine
them hugging it out.
Speaker 2 (16:25):
It is.
Speaker 7 (16:26):
Max.
Speaker 6 (16:26):
I want to ask you this because you're cost of
the Elonning podcast, and you know there he is the
story of the biggest business story of our generations. I
think how the Elonning podcast puts it. And you know,
given that he has SpaceX, he's CEO of Tesla, he
has Neurolink boring company x XAI.
Speaker 3 (16:50):
Doge doge.
Speaker 6 (16:52):
But it's a story about power. If he were to
get control of open Ai, how much more powerful would
that make him?
Speaker 8 (16:58):
I mean that that's part of the head scratcher here
for me, I'm part of Elon Musk's argument in this
suit has been that open ai and Microsoft have been
engaged in anti competitive behavior. It's hard to understand how
you know a person like you've just described who also
owns another AI startup, How regulators, how the FTC. Maybe
a normal FTC, an FTC that is not Donald Trump's
(17:19):
FDC would be okay with that, right, It seems like
this would be a huge red flag for anti trust
regulators if it really went that far. Of course, like
Rachel's saying, I mean, we that's getting way ahead of
ourselves right now.
Speaker 7 (17:32):
Do we know.
Speaker 3 (17:33):
Does Musk still own some of open Ai? Do we
know anything about that?
Speaker 10 (17:36):
Well?
Speaker 8 (17:36):
Open Ai? Rachel jump in, Actually, I think she has
a better idea. Open i has founded as a non
for profits, So I don't think he owns any equity.
Speaker 9 (17:44):
Yeah, my understanding is that he doesn't. I'd have to
go back to some of those emails. I think he
might have been offered some of the company if I
remember correctly.
Speaker 7 (17:54):
But declined it at a point in the past.
Speaker 3 (17:57):
I also do wonder about like Microsoft, in all of this, right,
they've made a big old hunk of investment into open Ai.
I mean, have we heard from them, Rachel, at all,
in terms of all of this that's going on.
Speaker 9 (18:08):
No, I haven't heard a peep from a lot of
people on this, and that makes me wonder how seriously
other parties are taking this. I know they don't want
to ignore it, but I think that maybe they're sort
of watching and waiting.
Speaker 6 (18:21):
Well, remind us, Rachel, it is quite the delta between
this offer and you know, the latest reported valuation out
of fundraise for open Ai.
Speaker 7 (18:30):
That is true.
Speaker 9 (18:31):
What is a little confusing to me is what this
offer is for specifically versus what open ai and all
of its entity.
Speaker 7 (18:41):
Is valued at.
Speaker 9 (18:42):
Because the offer or the statement from the lawyer says
open Ai Inc. And all of its assets, So that
would be the nonprofit and what you know, in my
mind that would include all the things the nonprofit owns
or owns a stake in. But it's not one hundred
percent clear, and so I'm not really sure how you
value that versus how value the nonprofit alone versus you know,
(19:03):
the valuation of the company.
Speaker 7 (19:04):
Hey, just get a projected higher.
Speaker 3 (19:06):
Just get about twenty seconds max. For someone on the
elon Ink podcast. You guys, you know the ebbs and
flows that are Elon. What are you watching out for
next in this story? Where do you what do you
think might be coming at us?
Speaker 1 (19:16):
Just quickly?
Speaker 8 (19:16):
Well, I think we need to see again what Microsoft does.
Speaker 7 (19:19):
And you know, Elon Musk is all is.
Speaker 8 (19:23):
All over the place in Washington right now? Where does
Trump go in response to all this?
Speaker 3 (19:28):
All right, guys, thank you so much. Max Chaffin, columnist
at Bloomberg BusinessWeek, a host of the Elon Inc. Podcast.
Here in studio. Rachel Metz out there in San Francisco.
She's AI reporter here at Bloomberg News.
Speaker 2 (19:39):
This is the Bloomberg Business Week Podcast. Listen live each
weekday starting at two pm Eastern up on Apple car
Play and the Android Auto with the Bloomberg Business app.
You can also listen live on Amazon Alexa from our
flagship New York station Just Say Alexa played Bloomberg eleven thirty.
Speaker 6 (19:57):
It is time for another edition of Bloomberg plugg Dan,
your weekly get EV's and the Trump administration is suspending
federal funding for electric car chargers, following through on one
of President Trump's first directives to roll back US subsidies
for plug in vehicles after he retook the White House.
For more, we turn to Andy Bennett's CEO of Drives.
It's a company that provides ev charging management software. It's
(20:18):
part of the five point seven billion dollar market cap
publicly held Volunteer Corporation. Andy joins us from Raleigh, North Carolina. Andy,
welcome back. Good to have you back with us. How
does a decision like this from the White House affect
your business?
Speaker 11 (20:33):
Yeah, you know, listen, we build software that the world's
largest charge point operators, the folks that operate networks use
in order to basically bring you know, reliable charging to
their customers. There's no doubt about it. You know, Nevy
funding was a really positive thing for the industry. If
you know, if you're if you're on the cost where
(20:55):
you're thinking about buying an electric car, often one of
the anxieties you have is around range. So seeing more
chargers is a great thing. The more you see, the
more comfortable you're going to be with it. But when
you think about Nevy funding and the impact what it
really means for us as an industry, as a charging industry,
it's it's been relatively small. Kind of looking back on
(21:16):
twenty twenty four in the United States, there were about
fourteen thousand new chargers added publicly available chargers anyone can
go use. You know, NEVY was responsible for about one
hundred and twenty one hundred and thirty of those chargers,
So we're talking about zero point zero one percent of
(21:36):
all the chargers added in the United States last year
had anything to do with NEVY.
Speaker 6 (21:41):
Thealric Vehicle Infrastructure Formula program that you're referring to NEV, Yes.
Speaker 11 (21:47):
My apologies, Yes exactly, And so if you think about it,
you know, essentially it was an absolutely positive thing, and
I think it had some great benefits. And you know,
we still have a lot of projects underway, so there'll
be another thousand charge are going to come to fruition
as a result of that funding. But it's certainly not
the thing that drives our industry.
Speaker 3 (22:08):
How much though, does an administration and a policy change
drive what happens in your industry? And I bring that
We're coming off this interview here on Bloomberg with the
US Energy Secretary Chris Wright, and when he says things
like one US focused on reducing the cost to produce oil,
coal will be essential in US for decades to come,
(22:30):
says US oil output can grow meaningfully, US seeking to
stop closure of coal fired power plants. Commenting on nuclear
I didn't hear a lot about alternative energy, so I
do wonder, you know, how does again, maybe nothing specifically,
(22:50):
but how does that tone and tenor coming from the
Energy Secretary potentially turn into policy. Are lack thereof in
terms of supportive policy for the ev and electrification industry?
Speaker 11 (23:06):
Sure, you know, eight percent of all new cars sold
last year in the United States were electric. Once people
drive electric cars, they tend to want them. And just
stepping back from that thinking about it, you know, one
way or the other, the endpoint for vehicles in the
United States and globally is going to be electric. So
(23:28):
the only question is where is that endpoint? So to
answer your question, I think when you have an administration
that really is pushing you know, one one form of transportation,
it absolutely helps. But in the end, it's going to
be the consumer that makes that decision. When you look
at other countries like Norway and parts of Europe were
over ninety percent of all new cars are electric, they
(23:51):
didn't have federal funding in place to do that. It
was around customer choice. It was around broad based decisions.
Speaker 6 (23:58):
But isn't that because the gallon of gas or a
leader of gas is like nine bucks.
Speaker 11 (24:05):
Certainly the price of fuel has a lot to do
with it, and in a sense, in a sense, I
don't want to say we subsidize fuel, because we tax
it quite a bit here in the US, but we
tax it at a just a fraction of.
Speaker 6 (24:16):
What some of our European counterparts tax it at.
Speaker 11 (24:20):
Yeah, yeah, that's that's fair. You have very high fuel prices.
Obviously in the United States, we've been really lucky with
lower fuel prices. You know, for us as a company,
my parent company, Volunteer, we work with a lot of
clients that don't think just electric or just gas. We
think about sort of all the above.
Speaker 2 (24:38):
Right.
Speaker 11 (24:39):
We have companies that focus on classic fueling and hydrogen,
and of course my company, my focus is around electric.
So you know, ultimately, the administration being being more neutral
about that what that source of fuel is going to
be isn't going to have much of effect on the
EV adoption rates. People are going to continue you to
(25:00):
buy evs. They're going to continue to grow. Today, there
is a massive gap between the amount of cars that
are on the road that are electric already and then
needed EV infrastructure, so you don't necessarily need the federal
government to go help fill that gap. The companies, the
charge point operators that make this their life, that make
(25:20):
us their living, that are that are profitable corporations, They're
going to continue to put that EV infrastructure out there
because it's just playing, you know, good business at the
end of the day.
Speaker 3 (25:30):
And to be fair, you know, we did a deep
dive here at Bloomberg get to Norway, and you know,
they talked about various policies. There were some incentives. There
are value added taxes where scrap cars were given access
to bus lanes. Parking was cheaper many cases free drivers
weren't charged for using ferries or total so there was support.
Speaker 7 (25:49):
To be fair, I.
Speaker 6 (25:50):
Mean, have you visited Norway.
Speaker 3 (25:51):
Yeah, But I'm just saying that, you know, there are
things to be amazing, you know that make maybe you know,
EV is a more obvious choice for more and more
new regions. I don't know, are you hopeful about the
outlook here? You know how administrations, you know, whether it's
Democratic Republican, they come in and they've got an agenda
(26:13):
and they have policies we're already you know, producing a
ton of fossil fuels, but it does look like we
could have a lot more support from this administration. And
you do wonder when it comes down to choice. You know,
people are going to look at the choice of what
the cars cost, and they're also going to look at
the choice of a fuel is cheap. You're not going
(26:34):
to be so worried.
Speaker 11 (26:37):
Yeah, that's that's fair. Yeah, I look, I ultimately I
believe that electrification is going to take place. The experience
that drivers have is such a positive experience. So you
know this, you know this change or at least maybe
you know thinking about this as a less subsidized industry.
(26:59):
It's not such a bad thing. You know, all of
us in industry. One of the things we hate the
most is big fluctuations between different administrations because all those
policy changes, what they do ultimately is create uncertainty. So
what we want is the unit economics of evs to
get cheaper. Right, as that cost of that battery gets cheaper,
the cost of the car will be cheaper, It'll be
(27:19):
more competitive. As more EV infrastructure charging gets available, people
will just it'll become normal for folks. Yeah, and those
are just sort of natural commercial things that I think
will occur.
Speaker 3 (27:30):
Andy, do you think Elon Musk being involved in the
government and certainly very close it seems that with President Trump,
is that a plus for the EV industry ultimately?
Speaker 11 (27:41):
Yeah, you know, Tesla was a huge recipient of of
course the Navy funding for one, so you know, but look,
the industry has changed. If we had this conversation a
year ago, all we would have been talking about was
Tesla cars in the United States. Today it's about fifty
percent of all the sales in the United States. We
have a lot of new vehicles out there, a lot
of new comp petition. So look, Elon Musk, clearly, if
(28:03):
it weren't for him, there would be no EV industry, right.
There's just there's no arguing that all these cars, all
these companies, this entire industry was spurred by the innovation
of that company. But I think having him, you know,
have the chance and the opportunity to influence the administration
ultimately will be really positive for what we're doing. Absolutely,
(28:24):
does it.
Speaker 6 (28:25):
Are you concerned? We've seen reports out of Germany, other
European countries as well. California just very briefly about fear
people buying Tesla's as a result of perhaps what Elon
Musk has been doing in his position in the federal government.
Do other EV companies become winners because of that?
Speaker 11 (28:43):
Well, like I said, I mean, almost fifty percent of
all the EV sold in the United States this year
we're We're not Teslas, So there's clearly a shift taking place.
Speaker 6 (28:50):
We're going to leave it there. That's Andy Bennett over
at Drives. He's the CEO of Drives. It's a company
that provides EV charging management software.
Speaker 5 (29:00):
MAC.
Speaker 10 (29:01):
I'll about you.
Speaker 4 (29:02):
Let me drive.
Speaker 6 (29:02):
Oh no, no, no, no, this is not a toy.
Speaker 1 (29:05):
Who's going to drive?
Speaker 10 (29:07):
All right?
Speaker 3 (29:07):
Please, I'll do the gravel.
Speaker 7 (29:10):
Let's wat I want to drive.
Speaker 4 (29:13):
It's a good question.
Speaker 2 (29:18):
This is the drive to the clothes.
Speaker 10 (29:20):
Pongs for me?
Speaker 2 (29:21):
Thing well, Jovin Don on Bloomberg Radio.
Speaker 3 (29:25):
Right, TikTok, everybody, Just about eighteen minutes to go until
we wrap up the trading day on this Tuesday. You
heard Charlie B. Maloney working down the trade for you.
We've got a bunch of earnings coming up after the
closing bell, including Avis Killiad Sciences, Door dash Lift, Zillow
Energy Transfer, and aig, so we'll be breaking them down.
In the meantime, let's get a read on the markets.
Speaker 6 (29:46):
Yeah, I should know too. We are expecting to hear
from the presidents imminently. He's signing some executive orders, so
we'll get some take playback at a certain point and
bring you his comments as we do get them. In
the meantime, Big Halter is standing by. He's director of
research at the Carnegie Investment Council. They've got about five
billion dollars in assets under management. Greg joins us from Cleveland. Greg,
(30:09):
were you glued to fed Chair Powell's testimony this morning?
As we were?
Speaker 10 (30:14):
I wouldn't say I was glued. It was up on
my Bloomberg and peripheral basis. I was watching and listening
to some of the comments and questions.
Speaker 7 (30:24):
Why is that?
Speaker 6 (30:25):
I mean, is it because what you knew he wouldn't
say anything that would move markets? Are you looking at
what he's saying in a different way right now? Why
weren't you glued to it?
Speaker 11 (30:36):
Well?
Speaker 10 (30:36):
I guess from the standpoint of our firm looking for
long term investment ideas, you know, as a meeting, the
meeting basis really going to make that Big of a difference.
You know, obviously if we're on some big, long string
of rate hikes or rate declines, yeah, you're looking for
a hints, but it seems like we're more on of
(30:58):
a steady state where there may be no action this
year in terms of rates.
Speaker 3 (31:02):
Hey, one thing I want to ask you, since we're
just coming off an interview with the US Energy Secretary,
who talks specifically about the US being focused on reducing
the cost to produce oil. Coal will be essential in
the United States for decades to come, talking about oil
output growing meaningfully, US seeking to stop the closure of
coal fired power plants. I am curious in terms of
(31:26):
an energy play, is there something that you feel like
you can hang your hat on and that you'd be
willing to make an investment bet on at this point.
Speaker 10 (31:35):
Well, anything in that space that's new is going to
take time, obviously, but I would think that nuclear and
that whole area has viability. It's something that probably needs
to be looked at very closely, which I think the
top folks are and there's certainly some areas around that
(31:56):
that makes sense for the long term. Again, none of
the stuff is going to happen overnight.
Speaker 3 (32:02):
Yeah, most people would say, you know, I just come
off a panel. Sorry, it's like top of mine. And
it was all about power demand and the increase that
we're seeing all of a sudden after being kind of
pretty steady and not really moving around, there is a
jump in demand because of data centers, the electrification industrialization.
Having said that, the nuclear play said to be maybe
about eight to ten years away, doesn't mean people aren't
(32:25):
starting to take moves, but it's not a quick process.
It's not an investment bed or do you look at
the utilities. We certainly have seen some of the energy companies,
some of the utilities pop up in a big way
on expectations of AI power demand.
Speaker 10 (32:40):
Yes, certainly that is playing into the calculus here. Some
of the companies that could be of interest would be
Next Era Energy, American Electric Power up in Wisconsin, and
then of course the non regulateds have had huge moves.
But we'd also look at the entities that would be
providing the picks and shovels if you want to look
(33:03):
at it that way. Into the nuclear side of things.
You know, things like BWXT, which we don't have a
position in, but something we're looking at that deals in
the whole nuclear space. So I think that may be
an interesting way to play, because again, this is going
to take a long time. People are certainly interested in
(33:24):
looking at areas, but I think you have to pick
your spots because you may see some huge run ups
and then some disappointment with fifty sixty seventy percent drawdowns
in some of these names.
Speaker 3 (33:36):
I just want to mention some headlines that are crossing
the bloomberg, and this has to do with President Trump
at the White House. Elon Musk seems to be there
speaking at a White House event with the President, the
president saying he had a great discussion about Gaza. Elon
must saying it's essential to reduce federal expenses. So some
headlines just kind of starting to trickle out. We'll continue
(33:58):
to monitor them and bring them to you as they
are known.
Speaker 4 (34:01):
Hey.
Speaker 6 (34:01):
In the meantime, speaking of energy, Greg the Magnificent Seven,
over the last couple of weeks. Two weeks ago, Carol
and I were sitting here talking about deep Seek and
what happened as the result of the deep Seek news,
kind of like during post Davos. Over that weekend, I
was surprised to see the hyperscalers and the megacap tech
(34:24):
names continue their commitments to CAPEX spending. Are they spending
too much money on this stuff?
Speaker 10 (34:34):
It's a great question, you know. We thought maybe twenty
twenty four was peak at one hundred and eighty billion
or whatever it was of the top four companies. This year,
we're looking at maybe three hundred or more billion. I
guess these are all forecasts, you know, as Meta did
with the Metaverse, there was a lot of spending, the
stock did not react very well, and then that spending
(34:57):
kind of got pulled back. So I don't think any
of these are commitments. You know, these companies are out
there saying what they want to do. But as we know,
these news events, these news announcements from companies like deep Seek,
you just don't know, and that could change things in
a hurry.
Speaker 6 (35:14):
So well, which part which part? Which part do you
not know? Do you not know to what extent they
were able to be more efficient given what they released?
Is that what we don't know.
Speaker 10 (35:26):
I think it's a whole range of things, you know.
The efficiency side of things is one area, and that
certainly affected some of the names like the Eatons and
the Vertives of the world from the standpoint of looking
at other companies, you know that provide chips and so forth.
(35:46):
There's just so much going on that I'm not sure
anyone actually really knows what's going on because the news
is moving so fast. It's it's kind of amazing. We
know things are moving faster and faster, but this is
making head spin.
Speaker 3 (36:00):
I think, Hey, Greg, so are you comfortable just got
about a minute left here to make take a new
possession position, excuse me, a new investment position? Or is
it better to just kind of wait and see and
let the dust settle, whether it's you know, new policy
out of the administration and the White House, whether it's
you know, FED still trying to figure out the way forward.
Like I don't know, do you kind of sit tight?
Speaker 10 (36:23):
Yeah, we're sitting tight pretty much, fully invested in mostly stocks,
probably seventy seventy five percent. The rest would be fixed income.
But we're going we're hanging in there with the tried
and true names. If these big numbers for this cappex continue,
we think the mag seven have a decent runway in
front of them, you know, saying that Microsoft's been flat
(36:44):
for a year, so it's kind of taken a break
care versus some of the other names. So again you
do have to pick your spots. But you know, there's
nothing wrong with a Microsoft type name. It's almost one
of these must own companies.
Speaker 3 (36:56):
Saying with Apple, all right, kind of leave it on
that note. Hey, Greg, good to get some time with
you on this Tuesday. I'm taking a look at shares
of Microsoft. By the way, they're down about two percent
for the year, so pretty mellow, they shared.
Speaker 7 (37:07):
Greg Halter.
Speaker 3 (37:08):
He's director of research at the Carnegie Investment Council, joining
us from Cleveland, Ohio.
Speaker 6 (37:12):
Hey, has meta platforms one of your gainers today.
Speaker 3 (37:14):
Carol, No, because it wasn't up as it well.
Speaker 6 (37:16):
Now it's up now seventeenth day in a row.
Speaker 3 (37:19):
When I looked at it earlier, I was going to
put it on my list, and I'm.
Speaker 7 (37:22):
Like, because it was down, it's at a record.
Speaker 3 (37:25):
It's pretty amazing. Yeah, seventeen, so the most consecutive games
by any publicly held stock.
Speaker 2 (37:32):
This is the Bloomberg Business Week podcast, available on Apple, Spotify,
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