Trump's New Iran Threats & OpenAI's Accidental Hacking | Bloomberg Businessweek Daily 7/22/2026

[00:00:01]>> THIS IS "BLOOMBERG BUSINESSWEEK DAILY."

[00:00:03]REPORTING FROM THE MAGAZINE THAT HELPS GLOBAL LEADERS STAY AHEAD. WITH INSIGHT ON THE PEOPLE, COMPANIES, AND TRENDS SHAPING TODAY'S COMPLEX ECONOMY.

[00:00:11]PLUS, GLOBAL BUSINESS, FINANCE, AND TECH NEWS AS IT HAPPENS.

[00:00:16]"BLOOMBERG BUSINESSWEEK DAILY" WITH CAROL MASSAR AND TIM STENOVEC LIVE ON BLOOMBERG RADIO, TELEVISION, YOUTUBE, AND BLOOMBERG ORIGINALS. CAROL: WELCOME TO "BLOOMBERG BUSINESSWEEK DAILY." CAROL MASSAR ALONGSIDE TIM STENOVEC LIVE IN NEW YORK HEADQUARTERS.

[00:00:37]A LITTLE BIT OF A BIG TECH EARNINGS CHURN WHEN IT COMES TO THE MARKETS TODAY, SOME BIG EARNINGS COMING OUR WAY AFTER THE CLOSING DOWN. TESLA AND UP ABOUT.

[00:00:48]I HEADED DOUBT HAVE A MARKET THAT IS A LITTLE CHANGED. TIM: CHIPMAKERS ARE DOING PRETTY WELL. FOR A SECOND DAY.

[00:00:57]IN NVIDIA CLIMBING 3%. SOFTWARE FIRMS GETTING HIT AGAIN. MORE FROM CHARLIE PELLETT IN A MINUTE. EARNINGS AFTER THE BELL AND GEOPOLITICS. CAROL: ALPHABET RIGHT NOW IS DOWN A HAIR.

[00:01:14]IF I PULL UP TESLA, THAT STOCK IS DOWN ABOUT 0.8 PERCENT.

[00:01:17]A LITTLE PERSPECTIVE. SPEAKING OF, THE MORE THAT DOESN'T SEEM TO FIND AN END OR SEEMINGLY MOVE CLOSER TO SOME KIND OF PEACE AGREEMENT. WE SAY WE HAVE A PEACE AGREEMENT BUT IT'S NOT HAPPENING.

[00:01:32]WE WILL GET INTO THE BOMBS, BOATS, BOOTS, PRESIDENT TRUMP'S IRAN DILEMMA. MOVING STUFF AROUND ESPECIALLY FROM THAT REGION, THERE IS A COST TO THAT.

[00:01:44]I'M THINKING ABOUT GLOBAL INFLATION AHEAD OF THE FED MEETING NEXT WEEK. TIM: CHRIS KENNEDY IS JOINING US IN A FEW MINUTES. ALSO JOINING US, RORY HEILAKKA.

[00:01:54]WE WILL TALK ABOUT THE AUTOMOTIVE BLIND SPOT WHEN IT COMES TO A. CAROL: THE TWISTS, TURNS AND THE BOMBS OF THE AUTO INDUSTRY.

[00:02:07]GO BACK TO THE 1980'S IF YOU WILL A FROM BAILOUTS AND BUYOUTS, CHINA'S COMING OF AGE. KEITH NAUGHTON CAME TO BLOOMBERG JUST AFTER THE GREAT FINANCIAL CRISIS JUST AS THE AUTO BAILOUT WAS KICKING INTO HIGH GEAR OF THE BIG THREE WHICH ARE NO MORE. THERE HAS BEEN SO MUCH CHANGED COMING OUT OF THE GFC WHEN IT COMES TO THE AUTO INDUSTRY.

[00:02:31]WE WILL GET INTO WHERE IT WAS WHEN SHE IT CAME TO BLOOMBERG, WHERE IT KICKED UP HIS CAREER WRITING ABOUT THE AUTO WORLD IN THE MID-1980'S. TIM: 1985 WAS THE YEAR THAT HE KICKED IT OFF. LOOKING FORWARD TO THAT.

[00:02:44]THIS GUY COULD WRITE SEVERAL BOOKS. CAROL: I HOPE HE DOES.

[00:02:50]WE WILL TALK ALL ABOUT THAT IN JUST A MOMENT.

[00:02:51]FIRST, LET'S GET TO THE TRADE AHEAD OF THE BIG EARNINGS.

[00:02:56]CHARLIE: HAPPY WEDNESDAY. WE ARE LOOKING AT AN S&P 500 INDEX, GAINS FIZZLING, HIGHER BARELY BY HALF A POINT ON THE S&P 500 INDEX. FLAT HAD EVER EARNINGS -- IT HAD EVER EARNINGS. DOW INDUSTRIALS HOLDING ONTO AN 82 POINT GAIN, UP BY 0.2 PERCENT.

[00:03:17]NASDAQ AND NASDAQ 100 BOTH IN THE RED.

[00:03:22]WE HAVE THE PHILADELPHIA STOCK EXCHANGE HIGHER BY 1%.

[00:03:26]NASDAQ LOOKING AT A LOSS OF 0.3 PERCENT.

[00:03:28]NASDAQ 100 INDEX ALSO DOWN BY 0.3%.

[00:03:33]S&P TRADING LOWER, UNDER 0.1%. SOX UP BY 0.9%.

[00:03:41]2-YEAR, 4.29%. 30-YEAR, 5.14%.

[00:03:52]GOLD UP ONE POINT 7%. CRUDE RIPPING HIGHER.

[00:03:55]MIDDLE EASE. WTI AT 86.76.

[00:04:02]A BARREL OF BRENT UP BY 3.3%.

[00:04:09]S&P 500 INDEX NOW LOWER, DOWN ONE POINT.

[00:04:11]ALPHABET AND TESLA AFTER THE BELL.

[00:04:13]ALPHABET FLAT ON THE DAY, TESLA DOWN BY 0.8%.

[00:04:18]FOR THE FIRST TIME IN 10 YEARS, UNITED NATIONS IS SET FOR A LEADERSHIP CHANGE. JOIN US TOMORROW AT 5:00 FOR SPECIAL COVERAGE OF A U.N. TOWN HALL TO HEAR CANDIDATES FOR THE NEXT U.N. SECRETARY GENERAL DEBATE.

[00:04:33]WE WILL HAVE IT LIVE FROM U.N. HEADQUARTERS.

[00:04:35]CAROL AND TIM, THAT IS A BLOOMBERG BUSINESS FLASH. CAROL: WHAT MAKES YOU SO SURE THAT THE S&P IS A SHE? CHARLIE: VERY GOOD QUESTION. LET ME FLIP IT BACK TO YOU.

[00:04:47]WHY WOULD SHE BE ANYTHING ELSE? CAROL: MAYBE SHE IS THE NASDAQ 100. WE'LL COME BACK TO YOU LATER ON.

[00:04:58]WE HAVE TO GET TO THE GLOBAL PICTURE, GEOPOLITICS.

[00:05:03]11 CONSECUTIVE DAYS OF U.S. AIRSTRIKES DOING LITTLE TO CHANGE THE DIRECTION OF THE IRAN WAR.

[00:05:08]THE RESULT IS A STALEMATED CONFLICT WHERE BOTH SIDES ARE CAUGHT IN A CYCLE OF STRIKES AND COUNTER STRIKES.

[00:05:16]THE PRESIDENT LIKELY AT INFLECTION POINT.

[00:05:22]TIM: WE ARE SEEING MARKET EFFECTS TO THIS SPECIFICALLY WHEN IT COMES TO OIL MARKETS.

[00:05:28]IT EXTENDS THIS MONTH'S PRICE JUMPED TO ABOUT 30%.

[00:05:32]THIS AS THE U.S. AND IRAN PLAY DOWN THE PROSPECTS OF PEACE TALKS. GLOBAL SUPPLIES CONTINUE TO MOUNT. IT COULDN'T COME AT A WORSE TIME FOR SUMMER TRAVEL, BUT ALSO POLITICALLY FOR THE PRESIDENT WHO WANTS TO MAKE SURE HE IS SELLING THAT AFFORDABILITY MESSAGE AHEAD OF THE MIDTERMS. CAROL: MIDTERMS ARE JUST A FEW MONTHS AWAY.

[00:05:53]THERE'S ALSO THE NEXT ROUND OF TARIFFS AS THE PRESIDENT IS POISED TO IMPOSE TARIFFS ON DOZENS OF PRODUCTS.

[00:06:01]LET'S GO TO OUR D.C. NEWS BUREAU.

[00:06:05]ECONOMIC STATECRAFT LEAD, CHRIS KENNEDY IS BACK. THE U.S.

[00:06:10]STRIKES CONTINUE. WE MENTION BOMBS, BOATS, BOOTS, PRESIDENT TRUMP'S IRAN DILEMMA. IT FEELS LIKE WE ARE AT AN IMPASSE. HOW DO FOLKS THAT YOU ARE TALKING TO SEE IT, ABOUT WHAT HAPPENS NEXT IN THIS CONFLICT, THIS WAR? CHRIS: LIKE YOU SAID, THERE ARE NO GOOD CHOICES FOR THE PRESIDENT RIGHT NOW.

[00:06:34]OIL TRADERS ARE LOOKING AT SOME OF THE NEWS, FOR INSTANCE, NOT DIRECT NEGOTIATIONS HAPPENING, WHICH SUGGESTS WE WILL BE IN THIS CYCLE FOR A LITTLE BIT LONGER. THE PRESIDENT IS CLEARLY FRUSTRATED WITH THE WAR, UPSET ABOUT THE DEATHS OF SERVICE MEMBERS, AND HE IS LOOKING TO CONTINUE STRIKES FOR THE TIME BEING. OF COURSE, WE DON'T KNOW WHETHER WE WILL SEE ADDITIONAL ESCALATION, BUT THE LONGER THIS GOES ON, THE LARGER THE IMPACTS ON THE GLOBAL ECONOMY, ESPECIALLY THROUGH THIS CONTINUED STRANGLING OF OIL EXITING THE REGION. TIM: IF WE PLAY ON ONE SCENARIO, A SCENARIO THE PRESIDENT SHARED UNTRUTH SOCIAL TODAY, AND THAT LOVE THE IDEA OF RETALIATION, BOBBING OR STRIKING POWER PLANT OR A BRIDGE IN TEHRAN, FOR EXAMPLE. IS THAT SOMETHING THE U.S.

[00:07:29]WOULD ACTUALLY FOLLOW THROUGH WITH? CHRIS: IT'S A GOOD QUESTION. TIM: THE REASON I ASK IS BECAUSE THIS THREAT HAS BEEN MADE BEFORE. CHRIS: OF COURSE.

[00:07:42]THESE SITES HAVE TRADITIONALLY BEEN OFF THE TABLE FOR U.S.

[00:07:45]STRIKES BUT THE PRESIDENT AND THE U.S.

[00:07:51]HAVE CONSISTENTLY SAID THAT A LOT OF THESE CIVILIAN INFRASTRUCTURE SITES ARE ACTUALLY USED FOR MILITARY PURPOSES AS WELL. WHAT WE HAVE SEEN IS THE U.S.

[00:07:59]HAS BEEN STRIKING THESE DUAL USE SITES RECENTLY AND WE HAVE SEEN RETALIATORY STRIKES FROM IRAN ON REGIONAL INFRASTRUCTURE THAT CERTAINLY GOES BEYOND U.S. MILITARY ASSETS.

[00:08:09]NOTHING THAT WILL BE TOO DISRUPTIVE, BUT THAT COULD CHANGE IF U.S. STRIKES CONTINUE. CAROL: IMPASSE, WHO KNOWS, I'M SURE WE COULD GO TO POLYMARKET AND THERE ARE TONS OF BETS, OR KALSHI ABOUT WHAT WOULD HAPPEN NEXT IN THE WAR. HAVING SAID THAT, THERE IS A COST IN LIVES, DAMAGE IN VARIOUS REGIONS AROUND THE WORLD. FISCAL BUDGET BECAUSE THE MONEY SPENT ON DEFENSE. GEOPOLITICAL RELATIONSHIPS WHICH SEEM TO BE REMADE. HIGHER ENERGY PRICES, HIGHER TRANSPORTATION COSTS AS THE WORLD TRIES TO MOVE THINGS THROUGH THEIR MIDDLE EAST REGION. HOW ARE YOU IN THE TEAM CONTINUING TO CALCULATE THE ECONOMIC COST OF THIS, THINK ABOUT IT AHEAD OF THE FED MEETING NEXT WEEK, WHERE WE ARE FOCUSED ON WHAT THE FED CHAIR AND THE FOMC HAS TO SAY ABOUT MONETARY POLICY? CHRIS: OF COURSE, THERE ARE THE DIRECT COSTS.

[00:09:05]DEFENSE SECRETARY HEGSETH WAS IN FRONT OF CONGRESS THIS WEEK TALKING ABOUT THOSE DIRECT COSTS.

[00:09:11]THE MORE RELEVANT COST FOR THE GLOBAL ECONOMY ARE THE IMPACTS ON GLOBAL ENERGY MARKETS. AS YOU NOTED, CRUDE OIL PRICES CONTINUE TO TOOK UP A WEEK OF THE NEXT FED MEETING.

[00:09:23]WE ARE SEEING DEMAND FOR FUEL IN THE U.S.

[00:09:24]IS PRETTY ROBUST STILL. INVENTORIES ARE CRUDE CONTINUED TO FALL. ADDITIONAL PRESSURE ON GLOBAL MARKETS FROM Y UKRAINE'S CAMPAIGN AGAINST RUSSIA.

[00:09:38]THOSE COSTS WILL CONTINUE TO GROW SO LONG AS THIS CONFLICT PERSISTS.

[00:09:46]IT IS HARD TO KNOW HOW QUICKLY THIS WILL HAPPEN.

[00:09:48]ANOTHER BIG BLIND SPOT IS WHAT IS CHINA GOING TO DO OVER THE NEXT COUPLE MONTHS? ARE THEY GOING TO RESUME ENERGY PURPOSES -- PURCHASES? THAT HAS BEEN A BIG BUFFER FOR THE GLOBAL ECONOMY SINCE THE WAR BEGAN. TIM: A LOT OF CONSUMERS FOCUS ON THE GAS PRICES, FOUR DOLLARS A GALLON, THAT'S A THRESHOLD. PEOPLE IN THE INDUSTRY FOCUS ON THE PRICE OF DIESEL, BEING ABOVE FIVE DOLLARS A GALLON, HAS SOME REAL REPERCUSSIONS. IF YOU THINK ABOUT PRODUCE, HOW DOES IT GET FROM CALIFORNIA TO ANOTHER STATE?

[00:10:22]OFTEN TIMES IT'S ON A STRIP -- ON A TRUCK THAT RUNS ON DIESEL.

[00:10:25]HOW DOES THAT FLOW THROUGH TO OTHER PARTS OF THE ECONOMY?

[00:10:32]DIESEL IS UP TO ABOUT $5.18, NATIONAL AVERAGE. CHRIS: DIESEL WILL HAVE A MUCH DEEPER TRANSITION INTO ELEMENTS OF INFLATION THAN GASOLINE. DIESEL IS USED TO TRANSPORT EVERYTHING, AS YOU MENTION. I WOULD ALSO SAY DIESEL IS WHERE WE ARE SEEING THE MULTIPLE FACTORS HIT THE GLOBAL MARKETS.

[00:10:55]RUSSIA BANNED THE EXPORT OF DIESEL, USUALLY 10% OF THE DIESEL EXPORTS. I THINK WE WILL SEE ADDITIONAL PRESSURE ON U.S. EXPORTS FOR DIESEL WHICH WILL TRANSMIT INTO DOMESTIC PRICES THAT AFFECT EVERYTHING FROM TRANSPORTATION TO CONSTRUCTION, EVERYTHING, MINING, ETC. CERTAINLY, DIESEL IS THE BACKBONE OF THE REAL ECONOMY, SO TO SPEAK. CAROL: BEFORE WE WRAP UP, WE ALSO HAVE THE PRESIDENT TALKING ABOUT ANOTHER ROUND, AT LEAST ACCORDING TO PEOPLE FAMILIAR, FRESH ROUND OF LEVIES ON PRODUCTS, TARIFFS EXPECTED TO COME AT THE END OF THE WEEK.

[00:11:33]WHAT DO WE KNOW? THAT COULD BE MORE INFLATIONARY PRESSURE HERE. CHRIS: OUR BASE CASE IS THAT THE PRESIDENT WILL IMPOSE THE SECTION 301 TARIFFS OVER FORCED LABOR, REPLACING THE SECTION 122 TARIFFS THAT HE IMPOSED AFTER HIS LOSS IN THE SUPREME COURT.

[00:11:54]THE NET EFFECT IS NOT THAT DIFFERENT.

[00:11:58]IT WILL BE AROUND 11% FOR THE U.S.

[00:11:59]GLOBAL AVERAGE EFFECTIVE TARIFF RATE, HALF A PERCENT.

[00:12:04]WE WILL SEE WHAT COMES NEXT. THE PRESIDENT ALSO MADE A COUPLE OF DECISIONS -- WE ALSO GOT SOME COUNTERVAILING MOVES.

[00:12:15]EARLIER THIS WEEK, THE PRESIDENT DECIDED TO OFFER SOME RELIEF TO ALUMINUM IMPORTERS, AND THAT'S BEEN A HUGE DRAG ON MANUFACTURERS IN THE U.S. I THINK THE PRESIDENT IS SEEING THAT THESE TARIFFS ARE HAVING A NEGATIVE EFFECT ON THE ECONOMY, AND THAT MAY BE A POSITIVE SIGN MOVING INTO THE SUMMER. CAROL: THE U.S.

[00:12:38]30-YEAR BOND YIELD ECHOING SOME CONCERNS ABOUT STICKY INFLATION.

[00:12:41]STARTING TO SEE THE SIGNALS THAT KEEP US ON OUR TOES.

[00:12:46]CHRIS KENNEDY, ECONOMICS TO CRAFT LEAD FOR OUR BLOOMBERG'S ECONOMICS TEAM. TIM: HE TRULY DOES IT ALL, WAR, GAS, DIESEL, INFLATION.

[00:12:58]I APPRECIATE HIM KEEPING AN EYE ON ALL OF THIS STUFF FOR US.

[00:13:00]CAROL: THAT IS THE MACRO. LET'S GET TO MICRO.

[00:13:09]OPENAI SAYS ITS ADVANCED MODELS INADVERTENTLY HACKED HUGGING FACE IN AN INCIDENT THAT PRODDED FRESH CALLS FOR CURBS ON A TECHNOLOGY. ARE YOU WORRIED? TIM: I AM AMONG THOSE THAT MIGHT BE A LITTLE WORRIED.

[00:13:21]LET'S SEE WHAT ED LUDLOW SAYS. HE IS THE HOST A BLOOMBERG TECH.

[00:13:26]HE JOINS US FROM OUR SAN FRANCISCO BUREAU.

[00:13:28]I GOT A TEXT MESSAGE FROM FRIENDS MINUTES AGO, SENDING THE ARTICLE TO THE GROUP CHAT. BE HONEST, HOW MANY YEARS DO WE HAVE LEFT? ED: THIS IS A BIG STORY BUT IT IS NOT A SCANDAL, AND IT'S IMPORTANT TO UNDERSTAND WHAT HAPPENED CHRONOLOGICALLY.

[00:13:51]OPENAI WAS TESTING GPT 5.6 SOL, ITS MOST ADVANCED PUBLICLY RELEASED MODEL, TESTING ANOTHER MORE POWERFUL BUT UNRELEASED MODEL FOR THEIR ADVANCED CYBER CAPABILITIES.

[00:14:00]THEY WERE RUNNING AND EVALUATION OF THEM.

[00:14:04]WHAT THEY DID WAS REDUCE TO GUARD RAILS ON THOSE BECAUSE IT IS IN WHAT IS CALLED A SANDBOX ENVIRONMENT, CLOSED ENVIRONMENT THAT OPENAI HAD CONTROL OVER. THOSE WERE THE INSTRUCTIONS, WE WANT TO TEST YOUR CYBER CAPABILITIES, EVALUATE THEM.

[00:14:22]THE MODELS WERE LIKE, OK, IN ORDER TO PASS THE EVALUATION, THE MODELS WANTED MORE INFORMATION, SO THE EXPOSED WHAT IS CALLED A ZERO DAY FLAW. A FLAW IN THE CODE.

[00:14:34]IT IS ZERO DAY BECAUSE THE ENGINEERS HAD LITERALLY ZERO DAYS TO FIVE AND PATCH IT. THE MODEL HAS ACCESS TO THE INTERNET. THE NEXT LOGICAL STEP WAS, OUR INSTRUCTION IS TO PASS THIS VALUATION.

[00:14:46]WE COULD DO THAT IF WE HAVE MORE INFORMATION, AND HUGGING FACE SEEMED LIKE A LOGICAL PLACE TO GET THAT INFORMATION BECAUSE IT'S A PLATFORM THAT HOSTS MODELS SPECIALIZED IN THIS AREA. IT BREACHED THE SYSTEMS TO GET THE INFORMATION TO TRY TO CHEAT THE VALUATION.

[00:15:04]THAT PART IS A CONCERN.

[00:15:07]BUT HUGGING FACE DETECTED THIS WAS HAPPENING, SO THIS WAS A LAB EXPERIMENT ESSENTIALLY UNDER CLOSED PARAMETERS.

[00:15:14]THAT WAY THE INDUSTRY HAS REACTED IS, THERE IS CONCERN BECAUSE THE BIG TAKEAWAY IS, IT SHOWS WHAT THESE FRONTIER MODELS ARE CAPABLE OF. TIM: THAT IS WHERE I WANTED TO GO WITH THIS. IT IS FINE IF IT IS IN A LAB WITH OPENAI AND HUGGING FACE, BUT IF THIS TECHNOLOGY GETS OUT, AND WHO IS TO SAY THE SAME GUARDRAILS WILL BE IN PLACE WITH A MODEL ONE OR TWO YEARS FROM NOW, IN CHINA, FOR EXAMPLE, THAT MAY NOT HAVE THE SAME GUARDRAILS. ED: ED: AND NOW WE’RE GETTING TO THE STORY. THESE WERE TWO AMERICAN COMPANIES, AND OPENAI IS NECK-AND-NECK WITH ANTHROPIC, BUT IT’S A LEADING FRONTIER LAB THAT WAS TESTING AMERICAN-MADE MODELS. CLOSED MODELS. HUGGING FACE’S DEFENSE WAS TO RELY ON AN OPEN-SOURCE MODEL, BUT WHERE THE GUARD RAILS LIMITED THE ABILITY OF THAT MODEL TO DEFEND IT AGAINST A CYBERATTACK, WHICH IN THIS CASE SO HAPPENS TO HAVE BEEN INSTIGATED BY A U.S.-MADE FRONTIER MODEL.

[00:16:17]I KNOW THAT THAT’S HARD TO TRACK.

[00:16:19]BUT YOU QUITE RIGHT POINT OUT THE QUESTION THAT LOADS OF PEOPLE IN INDUSTRY HAVE, WHICH IS WHAT IF THIS WASN’T OPENAI?

[00:16:28]WHAT IF THIS WAS A CHINESE MODEL WHERE HUGGING FACE IS THE DEFENDER OF WHAT’S GOING ON, ISN’T ABLE TO PROPERLY PROTECT ITSELF? THAT IS THE DEBATE THAT’S BEEN OPENED. CAROL: I GUESS MY QUESTION IS, ED, IF THERE ARE GUARD RAILS, WHICH WE ASSUME WILL BE IN PLACE, IS THAT 100% OR 99.9% GUARANTEED THAT THINGS WILL NOT GO WRONG OR ASTRAY? ED: OK, SO AGAIN, IT’S IMPORTANT TO GO BACK TO OPENAI WAS TESTING TWO SPECIFIC MODELS WITH THE GUARD RAILS INTENTIONALLY REDUCED.

[00:17:02]THE WAY TO THINK ABOUT IT IS, WHEN YOU HAVE THE GUARD RAILS ON, YOU ARE TESTING HOW A MODEL BEHAVES ON PUBLIC ROADS.

[00:17:11]SO SAY ON PUBLIC ROADS, YOU WANT THE GUARD RAILS THERE.

[00:17:15]IN A SAND BOX ENVIRONMENT, A CLOSE THED ENVIRONMENT YOU CONTROL, YOU PARE BACK THE GUARD RAILS BECAUSE UP TO THE SEE HOW IT CAN PERFORM AT ITS GREATEST ABILITIES.

[00:17:26]THE WORRYING PART HERE IS THE HUGGING FACE PART THAT THEY RELIED ON AN OPEN-SOURCE MODEL WHERE THE GUARD RAILS THAT ARE THERE FOR VERY GOOD REASONS ALSO DIMINISHED THEIR ABILITY TO DEFEND IT AGAINST MALICIOUS ACTION.

[00:17:40]WHETHER IT WAS MISTAKEN ACTION OR NOT. CAROL: OK, SO THEN, ALL RIGHT. THIS STORY DEFINITELY CAUGHT OUR ATTENTION. JUST GOT ABOUT 40, 50 SECONDS LEFT. ANYBODY WHO’S LISTENING AND SOMEBODY COMES UP AND SAYS, DID YOU SEE THIS STORY?

[00:17:57]YOU WOULD SAY NOT A BIG DEAL? ED: YEAH, SO THE CYBERSECURITY INDUSTRY, THE A.I. INDUSTRY AND THEIR INVESTORS BASICALLY THINK THIS IS A GOOD THING, BECAUSE THEY WANT THE LEADING LABS, OPENAI IN THIS CASE, TO BE TESTING WHAT THESE MODELS ARE CAPABLE OF, AND THEN REPORTING BACK.

[00:18:15]SO OPENAI AND HUGGING FACE HAVE GOT TOGETHER, THEY HAVE PARTNERED, THEY’VE TAKEN STEPS TO MAKE SAFE THE SITUATION AND DO A FULL INVESTIGATION, AND THAT REPORT WILL COME OUT.

[00:18:24]BUT THAT’S BEING CHEERED AS A GOOD THING.

[00:18:27]THE INFORMATION FROM THIS WHOLE EXPERIENCE WILL BE VALUABLE.

[00:18:28]CAROL: ALL RIGHT, THAT MAKES SENSE.

[00:18:32]AND GIVING US THE CONTEXT AND UNDERSTANDING. TIM: SO WE’RE SAFE FOR NOW, ED, THANK YOU. ED: FOR NOW. CAROL: SEE, TO BE CONTINUED, T.B.D. ED LUDLOW, THANK YOU SO MUCH, HOST OF "BLOOMBERG TECH." HE’LL BE BACK LATER, GOT A LOT OF EARNINGS, INCLUDING ALPHABET AND TESLA, SO ED WILL JOIN US FOR THAT. SPEAKING OF TESLA, WE’LL TALK TO SOMEONE WHO’S COVERED IT ALONG WITH THE BIG THREE AND SO MUCH MORE.

[00:19:05]CHARLIE: IT’S 2:21 ON WALL STREET.

[00:19:08]WE CHECK MARKETS ALL DAY LONG HERE AT BLOOMBERG.

[00:19:11]LITTLE CHANGE ON THE S&P 500, THE INDEX HIGHER, UP ONE POINT.

[00:19:16]THE DOW ADVANCING BY.2%. NASDAQ IN THE RED, DOWN.3% WITH THE NASDAQ 100 INDEX DOWN BY.3% AS WELL.

[00:19:24]ALL OF THIS AHEAD OF KEY EARNINGS OUT OF BOTH ALPHABET AND TESLA. RIGHT NOW ALPHABET SHARES DOWN.1%. TESLA ALSO LOWER BY.8%.

[00:19:35]THE SOX, THE PHILADELPHIA STOCK EXCHANGE SEMICONDUCTOR INDEX, PUSHING HIGHER BY.9%. 10-YEAR, 4.65%.

[00:19:43]THE TWO-YEAR, 4.29%. THE 30 YEAR, 5.14%.

[00:19:53]SPOT GOLD UP 1.5%, $4136 AN OUNCE.

[00:19:56]WEST TEXAS INTERMEDIATE CRUDE ALSO UP.

[00:20:00]AMD HAS AGREED TO INVEST UP TO $5 BILLION IN ANTHROPIC.

[00:20:04]MEANWHILE, OPENAI PLANS TO SPEND TENS OF BILLIONS OF DOLLARS ON A MASSIVE NEW DATA CENTER NEAR SAVANNAH, GEORGIA.

[00:20:10]FOR THE FIRST TIME IN 10 YEARS, THE UNITED NATIONS IS SET FOR A LEADERSHIP CHANGE. JOIN US TOMORROW, 5:00 EASTERN FOR SPECIFIC COVERAGE OF THE U.N.

[00:20:20]TOWN HALL TO HEAR CANDIDATES FOR THE NEXT U.N.

[00:20:23]SECRETARY GENERAL DEBATE, LIVE FROM U.N. HEADQUARTERS.

[00:20:24]I’M CHARLIE PELLETT. CAROL AND TIM, THAT’S A BLOOMBERG BUSINESS FLASH. CAROL: THANK YOU, CHARLIE.

[00:20:32]BMW PULLING OUT OF THIS YEAR’S PARIS CAR SHOW AS ITS NEW C.E.O.

[00:20:35]CUT COSTS FOLLOWING A MAJOR PROFIT WARNING.

[00:20:37]ALSO ON THE BLOOMBERG, TESLA’S CYBERTRUCK MAY BE ON ITS WAY TO BECOMING VIEWED AS THE GREATEST AUTOMOTIVE FLOP OF ALL TIME, SIMILAR TO THE FORD ETHEL, INTRODUCED BACK IN 1957.

[00:20:49]THERE’S ALWAYS -- TIM: YOU DON’T SEE A LOT OF THEM ON THE ROAD TODAY. CAROL: NO, NO, ALZA LOT GOING ON IN THE GLOBAL AUTO INDUSTRY. COVERING ALL THE TWISTS AND TURNS FROM BAILOUT THE AND BUYOUTS TO CHINA’S COMING OF AGE, KEITH NEW TON, WHO BEGAN HIS CAREER COMING TO BLOOMBERG IN 2009 AHIM THE GREAT FINANCIAL CRISIS AND THE BIG THREE AUTO BAILOUT. HE’S WRITTEN ABOUT ALL OF IT AND MORE. WE ARE DELIGHTED TO HAVE HIM IN NEW YORK. HIS HOME PERCH HAS BEEN IN THE DETROIT AREA, BUT HE IS GETTING READY TO WRAP UP HIS VALUED AND VERY RESPECTED CAREER HERE AT BLOOMBERG.

[00:21:24]WE CAN’T EVEN BELIEVE WE’RE NOT GOING TO BE, LIKE CALL KEITH, WE WANT TO TALK TO HIM ABOUT THIS. TIM: I CAN’T BELIEVE THEY’RE LETTING YOU RETEAR. KEITH: WELL, IT’S GOOD. EVERY GOOD CAREER HAS ITS MOMENT, AND LEAVE ON A HIGH NOTE. TIM: WELL, WE ARE REALLY HAPPY FOR YOU. IT IS SAD FOR US, AS CAROL MENTIONED. WE WANT TO START AT THE BEGINNING OF YOUR CAREER, ALL THE WAY BACK TO 1985, 41 YEARS AGO. TAKE US BACK TO THAT TIME. YOU WERE AT THE INDIANAPOLIS NEWS, WHERE YOU BEGAN YOUR CAREER.

[00:21:54]IT’S NOTABLE BECAUSE THAT WAS WHEN SO MANY U.S.

[00:21:57]AUTOMAKERS WERE CONCERNED ABOUT JAPANESE CARS. KEITH: YEAH, THAT WAS THE BIG STORY IN THAT TIME.

[00:22:03]WHEN I GOT THE AUTO BEAT, MY BUSINESS WAS IN INDIANAPOLIS, HE SAID SO I GREW UP THERE, HE SAID YOU’RE FROM DETROIT, THEN YOU’LL COVER THE AUTO INDUSTRY? I WAS LIKE OK.

[00:22:15]YEAH, IT WAS ALL ABOUT THE JAPANESE COMING TO AMERICA IN THOSE DAYS. SOUNDS LIKE AN ECHO, DOESN’T IT?

[00:22:20]ONE OF THE BIG STORIES WAS TOYOTA WAS LOOKING FOR THE LOCATION OF THEIR FIRST AMERICAN FACTORY, ALL THE STATES WERE VYING FOR IT. IT ENDED UP GOING TO GEORGETOWN, KENTUCKY, SO I WAS THERE FOR THE GROUND BREAKING OF THAT ONE, AND VIEWING THE GOVERNOR AT THE TIME, AND YEAH, AND NOW HERE WE ARE, WHEN WILL THE CHINESE COME TO AMERICA?

[00:22:44]WHERE WILL THEY LOCATE? IT WILL BE VERY SIMILAR. CAROL: DO YOU REMEMBER WHAT CAR WERE DRIVING? KEITH: YEAH, I HAD A RENAULT RELIANCE MADE IN WISCONSIN, WHEN CHRYSLER AND RENAULT HAD A JOINT VENTURE. CAROL: ONE OF THE ICONIC FIGURES IS LEE IACCOCCA, AND WE ACTUALLY HAVE A PICTURE IN 1989 OF YOU WITH HIM, AND WE’LL BRING IT UP FOR EVERYBODY. TELL US ABOUT THIS MOMENT.

[00:23:17]FOR THOSE ON AUTO, IT IS KEITH NAUGHTON A FEW YEARS AGO, A COUPLE OF TECH AIDS AGO. KEITH: A LOT MORE HAIR. TIM: NO MUSTACHE, THOUGH. KEITH: YEAH, LEE IACCOCCA WAS ICONIC.

[00:23:30]THAT’S OBVIOUSLY A SCRUM, AND I’M CLEARLY LAUGHING TOO HARD TO TRY IMPRESS THE CHAIRMAN. BUT NO, HE WAS SOMETHING.

[00:23:37]I MEAN, I REMEMBER WHEN HE CAME BACK FROM JAPAN, AND THIS IS WHEN THE ORIGINAL GEORGE BUSH HAD GOTTEN SICK ON THE LAP OF THE PRIME MINISTER OF JAPAN, I DON’T KNOW IF YOU REMEMBER THAT MOMENT OF HISTORY. SO HE COMES BACK, AND HE GIVES A SPEECH -- CAROL: IT SEEMS SO CHARMING AMID THE GEOPOLITICAL BACK DROP TODAY, BUT GO AHEAD. KEITH: GIVES A SPEECH AT THE DETROIT ECONOMIC CLUB, ALL ABOUT HOW WE SHOULD ESSENTIALLY, AND HE USED THIS VERBIAGE, GO TO WAR WITH THE JAPANESE. WHICH GIVEN THE WHOLE WORLD WAR II THING WAS PROBABLY NOT THE RIGHT WAY TO PUT IT, BUT THAT WAS LEE IACCOCCA. HE PULLED NO PUNCHES. CAROL: HE HAD TO DEAL WITH HIS OWN CRISIS, RIGHT? KEITH: HE DEFINITELY SAVED CHRYSLER. THEY WERE IN DIRE STRAITS.

[00:24:20]REMEMBER, HE GOT FIRED BY HENRY FORD II, HANK THE DEUCE FIRED HIM. IACCOCCA REHABILITATED HIMSELF BY SAVING CHRYSLER. IT WAS A GREAT TIME TO COVER THE INDUSTRY, BECAUSE THERE WERE SUCH SWASHBUCKLING CHARACTERS, ALL THESE GUYS THAT JUST SAID WHAT WAS ON THEIR MINDS. TIM: IT WASN’T ALL THE AUTO INDUSTRY FOR YOU, THOUGH. SOME OTHER HIGHLIGHTS IN YOUR CAREER, EVEN BEFORE COMING TO BLOOMBERG, SENIOR CORRESPONDENT AT BUSINESS WEEK, YOU COVERED THE AUTO INDUSTRY, REPORTER AT THE DETROIT NEWS. BUT BEFORE BLOOMBERG, YOU WERE DETROIT BUREAU CHIEF FOR 10 YEARS OVER AT "NEWSWEEK," WHERE YOU COVERED THE AUTO INDUSTRY THERE, BUT ALSO SOME OTHER STORIES, INCLUDING -- CAROL: MARTHA STEWART, AND THIS LITTLE KNOWN MAN PUT ON THE COVER, OH, YEAH, HE’S PRESIDENT TODAY. KEITH: YEAH, I SPENT A COUPLE OF DAYS WITH THE DONALD AND MELANIA, THERE’S THE COVER. CAROL: FOR THOSE ON RADIO, IT’S DONALD TRUMP BACK IN HIS APPRENTICE DAYS, "YOU’RE FIRED." KEITH: RIGHT, THE STORY OF HOW THAT ENDED UP ON THE COVER, THIS ALL SOUNDS BRAGGY, BUT I WAS TALKING TO JACK WELCH, AND HE TOLD ME IT WAS HIS FAVORITE SHOW TO WATCH. HE AND SUSIE WOULD WATCH IT EVERY NIGHT. CAROL: ON HIS NETWORK, RIGHT? KEITH: YES, ON HIS NETWORK. SO WE REACHED OUT TO TRUMP, WHO IN THOSE DAYS THERE WERE NO P.R. PEOPLE.

[00:25:43]YOU JUST CALLED HIS SECRETARY AND HE GETS ON THE PHONE.

[00:25:48]AND HE TOLD ME THAT IN NO YOUR HONOR CERTAIN TERMS WE SHOULD PUT HIM ON THE COVER. I’M LIKE, WELL, RIGHT NOW IT’S SOMEWHERE JUST A STORY. NO, TELL RICK SMITH, WHO WAS THE PUBLISHER AT THE TIME, PUT ME ON THE COVER.

[00:26:00]AND THEN WHEN IT WENT TO THE MEETING THAT DAY, THE EDITOR SAID, OK, LET’S PUT HIM ON THE COVER.

[00:26:06]I CALLED HIM BACK AND SAID I’M GLAD YOU LISTENED.

[00:26:11]WE BOTH FLEW TO MAR-A-LAGO AND HUNG OUT. TIM: WHAT DID YOU FIND OUT ABOUT HIM ON THAT TRIP TO MAR-A-LAGO?

[00:26:17]NO PREDICTION THAT HE WOULD ONE DAY BECOME PRESIDENT. KEITH: WELL, HE WAS A DEMOCRAT THING. AND HE HAD RUN AS A DEMOCRAT.

[00:26:26]RUN IS MORE OF A MARKETING EXERCISE, IN THE GORE-BUSH ELECTION OF 2000. SO WE TALKED A LITTLE BIT ABOUT THAT, AND HE AND MELANIA WERE ENGAGED, AND BILL AND HILLARY WAS AT THE WED. THERE’S A PICTURE.

[00:26:41]FOUR OF THEM TOGETHER. BUT YEAH, HE WAS THE DONALD.

[00:26:46]WE WATCHED THE APPRENTICE TOGETHER, AND HE WOULD, YOU KNOW, TURN DOWN THE SOUND WHEN THE CONTESTANTS SEGMENTS, AND THEN WHEN HE WAS ON HE WOULD TURN IT UP TO A DEAFENING VOLUME SO NO ONE IN THE ROOM COULD TALK. CAROL: SO FASCINATING. THE PLACES THAT BEING A JOURNALIST TAKES YOU, RIGHT, AND TO CERTAIN PEOPLE.

[00:27:07]ALL RIGHT, LET’S TALK TO YOUR TIME AT BLOOMBERG.

[00:27:10]17 YEARS, YOU CAME AT WHAT WAS A REALLY DIFFICULT TIME FOR THE WORLD, FOR THE U.S., FOR THE FINANCIAL INDUSTRY, AND FOR AUTOMAKERS. WHO CAN FORGET THE AUTOMAKERS BEING HAULED BEFORE CONGRESS, THE C.E.O.’S? KEITH: RIGHT, THE BAILOUT. IT WAS AMAZING, BECAUSE IT WAS RIGHT AS I WAS STARTING AT BLOOMBERG.

[00:27:33]WHEN I WAS OBAMA WAS BEING INAUGURATED FOR HIS FIRST TERM.

[00:27:37]GEORGE W. BUSH HAD HANDED THE BATON TO HIM TO SAVE THOSE COMPANIES. FAMOUSLY, THEY HAD ALL GOTTEN IN TROUBLE. THERE WE GO. FLYING IN FOR ALL THE HEARINGS, TOLD THEY SHOULD HAVE DRIVEN AND FOR THEM, SO THAT IS WHAT THEY DID. THEY WERE ASKED TO GIVE UP THEIR PAY AND EVERYONE EXCEPT FOR ALAN MULALLY AT FOUR TO SAID THEY WOULD. ALAN MULALLY SAID, I'M FINE.

[00:28:02]THEY WERE THE ONES WHO DIDN'T TAKE THE BAILOUT. TIM: A LOT HAS HAPPENED IN THE AUTO INDUSTRY SINCE THEN, BRINGS US ALMOST TO TODAY. THE RISE OF THE EV'S AND THE WAY, EVEN CONVERSATIONS THAT WE HAVE WITH YOU ON OUR PROGRAM OVER THE LAST SIX YEARS. THAT IS HOW LONG I'VE BEEN DOING THIS. WE TALKED TO YOU ABOUT THE HUGE INVESTMENTS THESE U.S. COMPANIES WERE MAKING IN EV'S, HOW DIFFICULT IT WAS TO GET A FORD MACH -E, THE WAITING LIST, GETTING A LIGHTNING PICKUP TRUCK.

[00:28:38]JUST A FEW YEARS AFTER THAT, WE ARE LEARNING THESE INVESTMENTS ARE GETTING PARED BACK AND THE CUSTOMERS ARE NOT THERE. KEITH: IT WAS ONE OF THE BIGGEST MRS.. SOMETIMES OUR VIEW IS NOT LONG ENOUGH. TRUMP GOT INTO OFFICE, TOOK AWAY THE EV INCENTIVES. THE MARKET WAS WITH HER BEFORE HE GOT ELECTED.

[00:29:00]WE LIVE IN A VERY BIG COUNTRY. RANGE ANXIETY IS REAL.

[00:29:04]IT IS EASIER IN OTHER PLACES WITH A MORE COMPACT, HAVE A BETTER INFRASTRUCTURE FOR RECHARGING VEHICLES.

[00:29:11]PARTICULARLY IN THE BEST MIDDLE PART OF THE COUNTRY WHERE I LIVE, PEOPLE ARE NOT SOLD ON EV'S, PARTICULARLY THOSE THAT DRIVE PICKUP TRUCKS. THE BIG BUST OF THE EV CYCLE IS PUTTING THEM INTO PICKUP TRUCKS. IF YOU USE AN EV PICKUP TRUCK TO TOW OR HALL, THE BATTERY IS DEPLETED IN NO TIME.

[00:29:31]EVERYBODY IS TAKING A STEP BACK. I ACTUALLY THINK IN SOME WAYS TRUMP DUBS THEM A FAVOR SO THEY CAN REGROUP AS LONG AS THEY KEEP THOSE PROMISES TO THE CHINESE, AND HOPEFULLY THEY COME UP WITH A BETTER SOLUTION. TIM: WE HAVE A PICTURE -- CAROL: WE HAVE A PICTURE OF YOU WITH ALAN MULALLY. WHERE WERE YOU GUYS? KEITH: HE WAS BEING INDUCTED INTO THE AUTOMOTIVE HALL OF FAME IN DETROIT. CAROL: 2009?

[00:30:05]KEITH: MIGHT BE A LITTLE BIT LATER THAN THAT, I THINK AT THE END OF HIS TIME.

[00:30:10]IN 2009, HE AVOIDED THE BAILOUT, SAVED FORD, ALONG WITH HIS BOSS, BILL FORD. HE WAS A ROCK STAR.

[00:30:23]HE WAS GREAT TO WORK WITH, ALSO ONE OF THOSE GUYS THAT PULLED NO PUNCHES, HAD THINGS ON HIS MIND. CAROL: YOU ARE A LOT OF FUN TO TALK TO, WE LOVE COVERING THIS WORLD WITH YOU. YOU HAVE INSPIRED A LOT OF US.

[00:30:38]IT SEEMS LIKE YOU HAVE ALSO INSPIRED SOMEONE THAT IS NEAR AND DEAR TO YOU, YOUR DAUGHTER. ANOTHER PICTURE THAT WE WANT TO PULL UP.

[00:30:48]FOR THOSE ON RADIO, IT IS KEITH OBVIOUSLY, AND THEN YOUR DAUGHTER. KEITH: THAT ISNORA BEHIND ME, AND WE ARE AT THE NEW YORK AUTO SHOW IN 2019. NORA HAS ALSO BEEN DIFFERENT PLACES, AT THE DETROIT NEWS LIKE I WAS, WALL STREET JOURNAL, BUSINESS INSIDER. IT IS GREAT TO HAVE YOUR CHILD GOING WITH YOU. SHE IS WONDERFUL.

[00:31:18]THAT WAS A GREAT MOMENT. THAT PICTURE WAS TAKEN BY FORD'S CHIEF COMMUNICATION OFFICER.

[00:31:26]HE WAS MONITORING THE SCRUM, SAW THE SHOT, GOT OUR FACES OF SKEPTICISM. CAROL: WHICH YOU SOMETIMES HAVE TO DO ONE COVERING AN INDUSTRY. WE HAVE TO WRAP UP.

[00:31:40]AS YOU LOOK FORWARD TO YOUR WORLD, ARE YOU GOING TO BE KEEPING AN EYE ON THE AUTO INDUSTRY? KEITH: I LIVE IN DETROIT, HARD NOT TO. CAROL: WHAT ARE YOUR THOUGHTS?

[00:31:51]KEITH: I THINK IT'S A REALLY PERILOUS TIME FOR THE AUTO INDUSTRY. THEY REALLY NEED TO REINVENT THEMSELVES BEFORE THE CHINESE ARRIVE.

[00:32:03]AS BILL FORD SAID, THEY ARE GOING TO ARRIVE.

[00:32:06]IF THE AMERICAN AUTO INDUSTRY ISN'T READY, LOWER PRICED CARS, ELECTRIC VEHICLES, IF THEY ARE NOT READY, THEY WILL NOT SURVIVE. CAROL: ARE YOU DRIVING AN EV? KEITH: I AM NOT. TIM: NOT EVEN IA HYBRID?

[00:32:23]CAROL: YOU ARE A GEM. WE WISH YOU WELL.

[00:32:30]KEITH NAUGHTON, AUTO NEWS REPORTER. YOU'LL BE MISSED.

[00:32:33]THIS IS BLOOMBERG. ♪ CHARLIE: IT IS 2:40 ON WALL STREET.

[00:32:43]WE DO CHECK MARKETS ALL DAY LONG HERE ON BLOOMBERG.

[00:32:48]STOCKS ARE CHURNING AHEAD OF AFTER THE BELL EARNINGS COMING FROM ALPHABET AND TESLA. IBM ALSO REPORTING.

[00:32:54]I'LL BET SHARES ARE UNCHANGED ON THE DAY.

[00:32:57]TESS MATA DOWN BY 1%. ALL OVER THEIR EARNINGS AS THEY BREAK SHORTLY AFTER 4:00 WALL STREET TIME RIGHT HERE ON BLOOMBERG. S&P FLAT ON THE DAY WITH INDUSTRIALS AND THE DOW INDUSTRIALS UP 0.1 PERCENT.

[00:33:12]NASDAQ AND THE NASDAQ 100 LOWER, DOWN BY ABOUT 0.3%.

[00:33:20]SOX, PHILADELPHIA STOCK EXCHANGE SEMICONDUCTOR INDEX DOWN.

[00:33:25]2-YEAR, 4.29 PERCENT. AND THE 30-YEAR, FIVE POINT 14%.

[00:33:34]SPOT GOLD AT 4134 THE OUNCE. CRUDE, BIG STORY TODAY, WTI, 80 A BARREL. BRENT SAW A COUPLE OF PRINTS ABOVE 95.

[00:33:47]94.25, UP BY THREE.6%. APPLE IS PLAYING AN OVERHAUL OF ITS MAC LINE FUELED BY THE AI BOOM.

[00:33:59]APPLE SHARES DOWN BY ONE.1%. SUPER MICRO PICTURE -- COMPUTER SHARES ARE SOARING AFTER THE SERVER MAKER ISSUED PRELIMINARY RESULTS SAYING ITS BACKLOG HIT A RECORD ON NEW ORDERS IN THE CORNER OF MORE THAN 60 BILLION. SUPER MICRO COMPUTER UP 21%.

[00:34:17]FOR THE FIRST TIME IN 10 YEARS, THE UNITED NATIONS IS SET FOR A LEADERSHIP CHANGE. JOIN US TOMORROW 5:00 WALL STREET TIME FOR SPECIAL COVERAGE OF A U.N.

[00:34:28]TOWN HALL TO HEAR CANDIDATES FOR THE NEXT U.N.

[00:34:31]SECRETARY GENERAL DEBATE LIVE FROM U.N. HEADQUARTERS. FIVE :00 HERE ON BLOOMBERG. S&P DOWN BY HALF A POINT.

[00:34:38]I'M CHARLIE PELLETT. THAT IS A BLOOMBERG BUSINESS FLASH. CAROL: THANK YOU SO MUCH. OUR BLOOMBERG INTELLIGENCE TEAM PUBLISHING SOME RESEARCH ABOUT CONNECTED VEHICLES, SMART VEHICLES.

[00:34:56]THEY SAID THAT THEY WOULD BE A 742 BILLION DOLLAR MARKET BY 20 30 SPEARHEADED BY TESLA, OPENAI. TIM: IS YOUR NEW CAR A SMART CAR? CAROL: IT IS SUPERSMART.

[00:35:10]REMEMBERS HOW YOU PULLED OUT OF A SPOT AND WHEN YOU COME BACK LATER, IT WILL PARK IT. IT IS A LITTLE OVERWHELMING.

[00:35:20]I'M A LITTLE OVER AFRAID -- AFRAID IT WILL TAKE OVER FOR ME.

[00:35:23]IT IS PRETTY AMAZING. WE WERE THINKING ABOUT THIS.

[00:35:26]FAST FORWARD TO WHERE WE ARE TODAY.

[00:35:31]SO MUCH IS COMING AT US, AND YOU LAYER ON AI AND HOW EVERYTHING IS MOVING SO RAPIDLY. YOU THINK HOW IT IS TRANSFORMING SO MUCH. OUR NEXT GUEST TALKS ABOUT HOW AI IS QUIETLY TRANSFORMING SOME OF THE BIGGEST INDUSTRIAL SECTORS. WE ARE TALKING AUTOMOTIVE, DEFENSE, AVIATION, AND MANY COMPANIES RISK BEING LEFT BEHIND HERE. TIM: WE HAVE WHAT DOES RORY HEILAKKA, PARTNER AT OLIVER WYMAN. GOOD TO HAVE YOU WITH US THIS AFTERNOON. YOU AND THE FOLKS AT OLIVER WYMAN HAVE THIS REPORT OUT ON THE INDUSTRIAL AI DIVIDE, HOW AI IS QUIETLY TRANSFORMING SOME OF THESE BIG INDUSTRIAL SECTORS.

[00:36:13]WHAT IS HAPPENING, AND WHO COULD BE LEFT BEHIND?

[00:36:19]RORY: THAT'S A GREAT QUESTION. WE ARE SEEING A COUPLE THINGS HAPPEN RIGHT NOW, AND IT VARIES A BIT SECTOR BY SECTOR, WHERE AI IS RAPIDLY BECOMING A FOCUS AREA FOR AUTOMOTIVE MANUFACTURERS, AUTOMOTIVE COMPANIES, AIRLINES, RAIL COMPANIES, INDUSTRIAL MINING, YOU NAME IT.

[00:36:43]IT HAS BECOME SOMETHING THAT IS ALREADY STARTING TO GENERATE REAL REVENUE RETURNS FOR COMPANIES THAT HAVE EMBRACED IT EARLY. YOU THINK ABOUT LEVERAGING AI FOR BETTER PRICE DECISION, BETTER SERVICING OF OFFERS FOR CONSUMER FACING TRANSPORTATION COMPANIES, STARTING TO SEE THOSE BENEFITS. AT THE SAME TIME, YOU ARE SEEING REAL DIFFERENCES IN HOW COMPANIES ARE EVOLVING WHEN IT COMES TO EMBRACING AI FOR DELIVERING COMPLEX, REAL-WORLD TRANSPORTATION OFFERINGS. THINK ABOUT A RAIL NETWORK, AIRLINES, AIRSPACE, CARS ON THE ROAD. THERE IS A LOT HAPPENING.

[00:37:23]WE ARE SEEING SOME REAL DIFFERENCES IN COMPANIES THAT HAVE ALWAYS BEEN MORE FOCUSED ON DEPLOYING AI AS A REAL TRANSFORMATION OF THE BUSINESS AND THEIR PEOPLE, VERSUS COMPANIES LEAVING IT MORE AS THIS IS SOMETHING THE TECHNOLOGY TEAM HAS TO FIGURE OUT, SO WE’RE STILL REAL DIFFERENCES. IT STILL FEELS LIKE REAL EARLY DAYS IN TERMS OF THE EVOLUTION WE’LL SEE THOUGH. CAROL: I’M LOOKING AT VARIOUS STATISTICS IN THIS REPORT.

[00:37:53]LIKE HERE, 58% OF AVIATION MAINTENANCE REPAIR PROFESSIONALS SAID THAT THEIR VALUE OF EXPECTATIONS FROM A.I.

[00:37:58]INVESTMENTS ARE BEING MET OR EXCEEDED, UP FROM 20% IN 2024.

[00:38:02]HOW MUCH, WHEN WE LOOK AT STUFF MOVING AROUND, WHETHER IT’S, YOU KNOW, PLANES, TRAINS OR AUTOMOBILES, GO WHERE YOU WANT, IS ACTUALLY UTILIZING A.I. AND MAKING A DIFFERENCE?

[00:38:14]ARE THEY ALL JUST AT THE BEGINNING?

[00:38:15]BECAUSE IT FEELS LIKE A.I. HAS BEEN AROUND FOR A LONG TIME, AND I UNDERSTAND WHAT’S HAPPENED IN THE LAST THREE YEARS IS TAKING IT TO A WHOLE OTHER LEVEL.

[00:38:26]BUT GIVE US AN IDEA OF HOW MUCH IS ALREADY HAPPENING. RORY: IT’S A GREAT QUESTION. I THINK IF YOU YOU THINK ABOUT CERTAIN THINGS LIKE MANUFACTURING PARTS OR CARS ORIGINS, A.I. AND PARTICULARLY MACHINE LEARNING HAVE ALREADY HELPED COMPANIES REALIZE SUBSTANTIAL THAT ALLOWS TO YOU MUCH BETTER MODEL AND PREDICT BEHAVIORS OF A CLOSED SYSTEM, ALLOWS YOU TO DESIGN THINGS, KEEP A FACTORY UP AND RUNNING AT A HIGHER RATE, WHICH CREATES BETTER ECONOMICS. YOU’RE SEEING IT REALLY IN USE AND AT SCALE IN A NUMBER OF THOSE KINDS OF USE CASES.

[00:39:02]YOU KNOW, YOU MENTIONED AIRLINE MAINTENANCE.

[00:39:04]GREAT EXAMPLE, WE’RE JUST HAVING BETTER VISIBILITY INTO THE LIKELIHOOD OF A MAINTENANCE EVENT, AND THEN BEING ABLE TO PUT THE PART IN THE RIGHT PLACE, HAVE THE TEAM READY TO GO. THAT DRIVES REAL EFFICIENCY, AND WE’VE REALLY SEEN THAT TAKE OFF. WHEN WE THINK ABOUT USING A.I.

[00:39:19]TO DO THINGS LIKE MANAGE COMPLEX AIRSPACE AND IMPROVE WHAT IT’S LIKE ON A THURSDAY IN LA GUARDIA OR GOING INTO HEATHROW, WE’RE STARTING TO SEE THAT TECHNOLOGY BE PUT TO THE TEST. BUT YOU’RE DEALING WITH A NEED TO CHANGE A MASSIVE OPEN SYSTEM, YOU KNOW, USE THE INTERPLAY OF THE WEATHER, AIRCRAFT NETWORKS, THINGS ON THE GROUND, AND THAT’S A MUCH HARDER PROBLEM TO SOLVE. SO I THINK WE’RE STILL IN THE EARLY DAYS OF REALLY FIGURING OUT HOW THAT’S GOING TO COME TOGETHER. SO I THINK THERE’S A LOT OF CHANGE TO COME. AND THAT WILL IMPACT COMPANIES THAT TOUCH ALL ASPECTS OF THOSE OPERATIONS AND OF THAT KIND OF VALUE CHAIN. TIM: I THINK A LOT OF PEOPLE ARE THINKING OF A.I. ABOUT THIS LAYER OF TECHNOLOGY, THE SAME WE THOUGHT OF THE INTERNET, AND JUST BEING ONLINE 25 YEARS AGO, AND HOW EVERYTHING WE DO IS ONLINE.

[00:40:08]WHAT AREAS RIGHT NOW ARE MISSING, NOT MISSING OPPORTUNITY, BUT HAVE THE MOST OPPORTUNITY FOR DISRUPTION?

[00:40:14]LIKE, WE DON’T SEE IT YET, BECAUSE THE TECHNOLOGY IS NOT QUITE THERE, BUT MAYBE WE WILL IN TWO OR THREE YEARS. RORY: YEAH, GREAT QUESTION. I THINK THE ONE SECTOR WE’VE PROBABLY SEEN NOW, SEEN PLAY OUT REALLY QUICKLY OVER THE LAST COUPLE OF YEARS, GIVEN JUST THE NATURE OF WHAT’S HAPPENING IN THE WORLD IS THE DEFENSE SECTOR, CERTAINLY THE ROLE THAT A.I. PLAYS IN DRONES IN THE BATTLEFIELD. WE’VE SEEN THAT, AND WE’VE SEEN THE EFFECTS OF DISRUPTION HAPPENING, NEW ENTRANTS INTO THAT SECTOR BRINGING THAT TECHNOLOGY TO LIFE.

[00:40:50]IF I THINK ABOUT IN OTHER AREAS, LIKE RAIL OR AVIATION, I THINK THE COMPANIES THAT ARE ABLE TO REALLY RETHINK AND TRANSFORM HOW THEY MANAGE THEIR BUSINESS, RUN THEIR BUSINESS, AUTOMATE THEIR BUSINESS, CHANGE THE ROLE OF PEOPLE IN THE WORKFORCE AND DO THAT QUICKLY, THEY’RE GOING TO FIND THE ECONOMIC EFFICIENCY, AND FRANKLY, IMPROVE THE CONSUMER AND CUSTOMER EXPERIENCE, AND I THINK THAT’S WHERE YOU’RE GOING TO SEE SOME REAL DIVIDES. AND THE CHALLENGES, FOR A LOT OF THESE COMPANIES, YOU STILL NEED ALL OF YOUR TECHNOLOGY INFRASTRUCTURE TO COME TOGETHER AND BE ABLE TO SUPPORT THE USE OF A.I., AND THAT’S ONE OF THE REALLY BIG LIFTS.

[00:41:30]MODERNIZING SYSTEMS, MAKING THE DATA AVAILABLE TO INFORM, TRAIN, AND SUPPORT THESE KINDS OF MODELS AND TOOLS, PUTTING THE PHYSICAL INFRASTRUCTURE IN PLACE SO YOU HAVE COMPUTER VISION. ALL THOSE THINGS ARE REALLY KEY.

[00:41:39]CAROL: WE’RE JUST 30 SECONDS LEFT HERE.

[00:41:41]U.S. VERSUS CHINA, U.S. VERSUS EUROPE IN TERMS OF INDUSTRIES EMBRACING A.I. FOR THE GOOD, IF YOU WILL.

[00:41:49]AND JUST QUICKLY, IF YOU COULD. RORY: YEAH, REALLY QUICKLY, I THINK ALL THREE ARE GOING TO MAKE GREAT STRIDES. I KNOW THAT’S A BIT OF A MUTED ANSWER. CAROL: IF YOU HAVE TO PICK ONE, WHO’S AHEAD OF THE RACE HERE? RORY: IF I TO PICK ONE, I THINK THE INNOVATION COMING OUT OF THE U.S. IS REALLY REMARKABLE.

[00:42:10]I THINK WE’RE GOING TO SEE THAT PLAY OUT IN THE NEXT COUPLE OF YEARS. CAROL: REALLY APPRECIATE IT.

[00:42:17]GOOD STUFF. OLIVER WYMAN’S PARTNER AND THE FIRM’S TRANSPORTATION, SERVICES, AND DIGITAL PRACTICES GROUP, JOINING US RIGHT HERE IN NEW YORK CITY.

[00:42:25]WHEN WE COME BACK, IF A CHECK ON TRADING AHEAD OF SOME BIG EARNINGS. WE’VE GOT ALPHABET AND TESLA, I.B.M., SERVICE NOW, A FEW YEARS. TIM: THE NASDAQ DOWN ABOUT.3%. THIS IS BLOOMBERG.

[00:42:46]>> THIS IS "BLOOMBERG BUSINESS WEEK DAILY" WITH CAROL MASSAR AND TIM STENOVEC ON BLOOMBERG RADIO AND TELEVISION. CAROL: EVERYBODY, GETTING READY FOR THE LAST HOUR OF TRADING ON THIS WEDNESDAY. IT IS JULY 22.

[00:42:58]MAN, JULY, WHEW, HUH. SLOW DOWN, SUMMER! TIM: SUMMER CAMP FOR SOME KIDS ENDS IN A COUPLE OF WEEKS, BECAUSE THE KIDS HAVE TO GO BACK TO SCHOOL.

[00:43:07]HERE IN NEW YORK, IT’S GOING BACK LATE.

[00:43:09]BUT PARTS OF THE COUNTRY, KIDS ARE ALREADY GETTING READY TO GO BACK TO SCHOOL. CAROL: ESPECIALLY DOWN SOUTH.

[00:43:15]YOU SEE KIDS HEADING BACK TO SCHOOL MUCH SOONER.

[00:43:17]WE’RE CERTAINLY BUSY, KEEPING AN EYE ON THE MARKETS AHEAD OF THE EARNINGS, JUST STARTING TO REALLY PICK UP, AND OF COURSE, WE’VE GOT BIG ONES AFTER THE CLOSE, INCLUDING ALPHABET, I.B.M., SERVICE NOW AND A FEW OTHERS.

[00:43:29]WE’RE DEFINITELY OFF THE BEST LEVELS OF THE SESSION, CALL IT FLAT ON THE S&P 500, NOT EVEN DOWN ONE FULL POINT.

[00:43:35]THE NASDAQ 100 ALSO PULLING BACK A LITTLE BIT HERE, DOWN ABOUT 82 POINTS, DOWN.3%. IF I TAKE A LOOK INSIDE THE S&P 500 TODAY, AND YOU’VE GOT AN INDEX, ALMOST AN EVEN SPLITTED, 259 NAMES ARE ACTUALLY HIGHER TODAY.

[00:43:54]SMCI, SUPER MICRO, YOUR TOP GAINER IN THE S&P 500.

[00:43:58]SOME NEWS AFTER THE CLOSE YESTERDAY, THAT IS DEFINITELY MOVING HIGHER. 242 NAMES IN THE S&P ARE PULLING BACK TODAY. TIM: IF YOU WANT MORE SMCI, STAY TUNED, BECAUSE WE’LL TALK ABOUT IT IN JUST A SECOND.

[00:44:10]I’M TIM STENOVEC ALONG WITH CAROL MASSAR.

[00:44:12]STOCKS ON THE MOVE TODAY, WE’RE JOINED BY OUR CROSS ASSET REPORTER. LET’S START WITH TELECOM.

[00:44:21]>> AT&T, LET’S START WITH THE CLASSIC.

[00:44:26]THE STOCK IS UP MORE THAN 2%. TRADING AS MUCH AS 6%, IT’S ALL ABOUT SUBSCRIBERS AND BUNDLE E BUNDLES.

[00:44:35]THE MAIN METRIC CATCHING MY EYE IS MONTHLY SUBSCRIBES ARE UP.

[00:44:39]IT’S BEEN A VERY COMPETITIVE FIELD.

[00:44:42]THE COMPANY HAS ACTUALLY GONE DOWN YEAR TO DATE, DESPITE THE SURGE WE’RE SEEING. WE SAW OPTIMISM ACROSS THE INDUSTRY. ALL THE STOCKS SURGED, IT’S BEEN VERY COMPETITIVE AND HARD TO FIND A NEW DEAL.

[00:44:55]THERE ISN’T TOO MANY THINGS YOU CAN OFFER, BUT THEY’VE BEEN TRYING TO BUNDLE ALL THOSE PHONE SERVICES. CAROL: JUST LOWER PRICES.

[00:45:03]>> WELL, THEY ACTUALLY RAISED THE PRICES. CAROL: UP TO THE CATCH MY ATTENTION? JUST LOWER PRICES.

[00:45:08]WE MOVE AROUND SO QUICKLY. TIM: YOU GOT TO GET ON THE STENOVEC FAMILY PLAN. CAROL: DAD, MOM. TOM, ARE YOU LISTENING?

[00:45:17]OR WATCHING?

[00:45:20]>> BUT THE CONVERGENCE IS WORKING.

[00:45:24]ONE COOL STAT I SAW, 40% OF HOUSEHOLDS THAT PURCHASE HOME BROADBAND ARE BUYING MOBILE PHONE SERVICE.

[00:45:30]SO I GUESS WE SHOULD BUNDLE AND COMBINE THINGS. CAROL: GET A GOOD DEAL, YEAH. TIM: FOR A LONG TIME OUR FAMILY WAS TOO BIG FOR THE FAMILY PLAN. CAROL: I THOUGHT YOU WEREN’T ON IT ANYMORE. TIM: LISTEN, FOR A LONG TIME WE WEREN’T ON IT, BECAUSE THEY DIDN’T HAVE A BIG ENOUGH FAMILY PLAN.

[00:45:45]BUT THEN SOME OF THE COMPANIES GOT BIGGER FAMILY PLANS, SO NOW THE FAMILY CAN BE PART OF IT. CAROL: ONE MORE?

[00:45:52]>> INTERESTING DEVELOPMENT HERE. CAROL: ALL RIGHT, THAT’S AT&T.

[00:45:57]LET’S GO TO NIKE.

[00:46:00]>> NIKE IS ENDING ONLINE SALES AGREEMENTS IN CHINA, POTENTIALLY HUNDREDS OF DISTRIBUTION.

[00:46:04]THEY’VE BEEN REALLY TRYING TO WORK THAT REGION.

[00:46:07]OBVIOUSLY THAT’S THEIR SOFT SPOT. IT’S BEEN UNDER A LOT OF PRESSURE. THEY’RE TRYING TO GET TIGHT CONTROL FOR PRICING, INVENTORY, AND ENDING SOME OF THE PARTNERSHIPS. INVESTORS ARE NOT TOO BAD ABOUT THE IDEA. THE STOCK IS DOWN 2% TODAY.

[00:46:23]THE STOCK IS ALREADY DOWN 37% YEAR TO DATE.

[00:46:27]WE’VE SEEN REGIONS, ESPECIALLY IN NORTH AMERICA, DOING WELL.

[00:46:30]BUT INVESTORS ARE ESPECIALLY WORRIED ABOUT CHINA.

[00:46:33]SEEMS LIKE THIS IS NOT NECESSARILY HELPING. THE C.O.O.

[00:46:37]SAYING THEY’RE GOING TO DO A COMPREHENSIVE RESET OF THE CHINA OPERATIONS. THEY’RE REALLY INVESTING IN THEIR ACTUAL SHOPS THERE. THEY HAVE MORE THAN 200 PHYSICAL LOCATIONS. BUT IT SEEMS LIKE THE NEW PLAN HAS NOT TAKEN SO WELL. CAROL: THAT WAS BACK IN LATE 2021, WE’VE TALKED ABOUT A LOT OF THE TROUBLE IN CHINA. TIM: IT FELL IN 2022. NIKE FELL 29%. 2023, IT FELL 6%.

[00:47:03]2024, FELL 29%. IN 2025, IT FELL 14%.

[00:47:10]TICKER NKE, NIKE. CAROL: YEAH, SO IF YOU’VE BEEN RUNNING, IF IT WAS A HILL, IT’S BEEN EASY BECAUSE IT’S ALL BEEN DOWNHILL FOR THE MOST PART. TIM: OH, CAROL. CAROL: THAT WAS HARSH, SORRY. IT’S AN INCREDIBLE ICONIC BRAND.

[00:47:29]>> THEY HAVE SO MANY PARTNERSHIPS, BUT SO FAR INVESTORS ARE NOT EXCITED. CAROL: YOU KNOW WHO’S EXCITED, INVESTORS?

[00:47:36]>> MICROCOMPUTER. THAT’S WHAT THEY’RE EXCITED ABOUT. SHARES SOARED AS MUCH AS 26% IN TRADING. NOW WE’RE UP ABOUT 20%. THE TICKER IS SMCI.

[00:47:48]THE COMPANY SAID ITS BACKLOG HAS REACHED A RECORD.

[00:47:52]WE’RE TALKING MORE THAN $60 BILLION DURING THE QUARTER.

[00:47:54]THAT’S QUITE THE BACKLOG. INVESTORS ARE PRETTY EXCITED.

[00:47:59]THE COMPANY HASN’T BEEN DOING TOO WELL THIS YEAR.

[00:48:03]IT WAS ACTUALLY A DECLINE 13% BEFORE THE NEWS.

[00:48:09]IT HAS SUFFERED 28% FULL, AND THAT WAS WHEN THEY ANNOUNCED INVESTORS WEREN’T TOO EXCITING. BUT THOSE INSERTS ARE BOASTING SEEMED PRETTY GOOD. THEY SAY MARGINS ARE GOING TO BE IN THE RANGE OF 15% TO 17%. EVERYONE IS LOOKING FOR PROFITABILITY. SO CLEARLY INVESTORS ARE COMPLICATED. ANALYSTS, AT LEAST FOR NOW, IT’S WORKING. IT’S CRAZY HOW ONE PICTURE CAN CHANGE THE WHOLE YEAR. CAROL: WHEN YOU COMES ON, WHAT’S FUNDAMENTAL WITH CHANGE? REALLY, I DON’T KNOW.

[00:48:43]ALL RIGHT, GOOD STUFF. CHECK OUT THE STOCK MOVERS PODCAST, PICK WINNERS AND LOSERS IN THE MARKET.

[00:48:49]FIND IT ON APPLE, SPOTIFY, ANYWHERE YOU GET YOUR PODCASTS.

[00:48:52]TIM: COMING UP NEXT, THE FUN BEGINNING AT 3:00.

[00:48:58]BUT ALSO AT 4:00 WHEN WE HEAR FROM ALPHABET AND TESLA.