Bloomberg Businessweek Weekend - August 1st, 2025

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This is Bloomberg Business Week Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus global business finance and tech news as it happens. The Bloomberg Business Week Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.

Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. A FED decision that left rates unchanged as expected, and chair Jay Powell saying interest rates are in the right place to manage continued uncertainty around tarifs and inflation, so rate cut in September not likely, at least not right now. Plus tons of earnings, including from four of the Magnificent Seven, and of course more tariff talks, TIFFs and terms. This

Half a busy summer weeks, certainly to wrap up the month of July. This hour, we're going to hit on earnings from Apple, Amazon, Microsoft, and Meta plus Alphabet. The company reported earnings just about a week ago, and they said that the cloud computing unit at Google is its strongest source of growth. We're going to talk with the COO of Google Cloud also.

This hour, and also on earnings. UK pharma company AstraZeneca reported results. It's CEO stat by Bloomberg headquarters and talked about doubling down on the US and sizing up Chinese competition. And then, speaking of drugs, the CEO of Compass Pathways joins us somehow psychedelics may be making their way to FDA approval.

That's in our second hour, so too is a story about burning Man's existential financial crisis. All that to come, though, We kick off with earnings from a batch of the so called mag seven Apple, Amazon, Meta, and Microsoft, all reporting this past week. All of the details and more are on the Bloomberg terminal. We caught up with Laura Martin, senior analyst A and need him in Company who covers many of them, and started our post earnings review talking about Apple.

Apple admitted that one hundred one thousand basis points, so one percent of their revenue growth, which was ten percent, well above average, was from pull forward, and the market's telling you they think that number was like five, you know, four.

Half of the game. Basically.

Apple also said they had eight hundred million dollars of costs from tariffs in that second that requorter they just reported, and it's going to go up to one point one billion visibly in the September quarter. But I think the market's telling you they think that could be higher in the September quarter.

Oh so, does does this mean that we'll see fewer iPhones bought in the first fiscal quarter Apple? But Apple's December quarter, which typically is its biggest quarter, as a result of the pull forward that we saw in this quarter, I.

Think it's worse, it's faster.

So the June quarter over delivered because they pulled forward demand from the September quarter. Those are all old iPhones, and then in late September you typically get the new iPhone and then you start this new annual cycle of

You know, Laura, We've had the luxury of talking with you in the last week or two and talking specifically about Apple you've got a hold rating on it. It doesn't sound like you have a lot of concerns. I guess I should say why not put a cell rating on it.

One of the issues is when you look at the other mag seven, they basically have a singular strategy, which is envision generative air as disruptive. We everyone else is going to spend eighty five to one hundred billion dollars in CAPEX in twenty twenty five alone, and we're going to grow at twenty percent in twenty six with no Every one of them has been pushed on what is that return on capital incremental capital?

They all say, we don't know. We just think it's going to be big.

If you don't believe that, if you're an investor and you think that jenerative AI is overhyped or the economics are further off into the future, Apple is a great place to hide. They are spending twenty billion dollars a year, not eighty five billion dollars a year. Jeneritive AI is sometime in the future. They're not spending they're not hiring people like Meta Is for one hundred million dollars each to work on superintelligence. This is Apple is a great

Well, wait a minute.

You know Apple often isn't you know, first mover or on some big changes.

Right, We talked about it.

Create the tablet, they didn't create the music player, they didn't create the smartphone. But they created the best of all those things exactly.

So if they're saying, hey, guys, go ahead and spend you know, your billions or trillions or whatever the heck it is, figure out this AI thing and then we'll come in.

And we'll collaborate or partner with somebody, maybe that's not such a bad strategy.

So it's risky business.

So on the call last night, Tim Cook got this question, and what he said is, I don't see a world where the consumer doesn't have an iPhone, which is basically a computer in his pocket.

Okay, that's a vision of the.

Future that Johnny Ive, who's gone to open AI is trying to displace. Johnny Ive, who developed every Apple product you have in your pocket while he was at Apple for twenty years, is now saying he regrets creating the screen because he thinks it makes people not pay attention to one another. So he's trying to move the next device with generative AI backing to not.

Be a screen.

So that may not work, but if it does Apple, that's a problem for app. That is an existential risk problem for Apple. So long as an iPhone and a screen are going to be sort of the user device of record and they're going to persist in ten years, you might be right, that might be possible. What you just said, Apple can copy the best of Android, which will have Gemini because Google has Gemini.

In every product now, that will work.

But if Jimmy I've and OpenAI or right, and screens are going away, that's problematic for a smartphone maker.

I guess that's maybe where whatever they're working on for a face computer could come in. Laura, I want to go back to what you said about Gemini and Android because of the way that Gemini is baked into Google devices. Now, you say in your most recent note that Apple is a single product company, its valuation risk is material if iOS falls too far behind Android. Would you say that iOS is already behind Android right now?

Oh?

I would absolutely, I would.

I mean when you look at Google's its revenue is accelerating over at Alphabet, and its costs are going down, so its productivity per employee is going up. Why Because eighty percent of engineers are using Gemini to do their first draft of code for new products. They're introducing new products faster. They over delivered on advertising because they're integrating all these bettern both Meta and Google. Because they're using

Includion does it?

Like two comments here? One is the network effects that Apple has, at least here in the US are really strong, right, the blue bubbles for when you're on I Message and the other Apple products that you have that ideally are supposed to work seamlessly with that. Plus, doesn't Gemini have an app that you can just use on your iPhone?

If it's standalone.

But I mean, I think my guess is where Alphabet's going is they're going to integrate your They're going to integrate Gemini into everything on your device. It's going to know where your appointments are, it's going to know who your friends are. It's going to be a personal assistant integrated into your Android phone. It's going to be a bigger idea than just a separate app where you go

By the way, some.

CEO's visions of their apps are disappearing. So then you say, so what replaces them?

Well, I don't know. Used to be websites, then we went to apps. What's next? It may not be apps?

All right? You mentioned I want to just get to meta Amazon. What about Meta?

You know? In terms of I mean that Stock was just off and running following it's quarterly update. Those ad sales number certainly catching everybody's attention, a mega megaspen when it comes to AI. What is your hot take on that one?

So Stock up strongly, really strong fundamentals, just sixty percent margins, twenty two percent revenue growth and a huge company, which was the fastest of the group that we the big

Pretty get it, I'll say, yeah.

My guess is they're trying to change the world right, and they believe in super intelligence, which this isn't a vision of making you and I'm more productive. This is about replacing human beings with machines that teach machines. So it's literally terminator like life imitating art type of stuff.

Doesn't sound like you're your pro AI in that in that context, let's stick let's.

Stick to Meta as a stock.

My concern is that we're goin we're losing five billion dollars a quarter on reality labs, and we're still funding the Metal and we're funding Quest goggles, and we're funding karlass Way banned glasses and now we're funding a jen Ai competition with companies twice their size. All of that feels like a lot of capital spending to me and actually costs to me without a clear sense.

But investors are saying they are okay with it up to now because they believe that Mark Zuckerberg has this vision for super intelligence, which, to be honest, nobody has actually articulated to me, Well, what does that world look like that that Meta wants to create and thinks will be so profitable?

Are they okay?

Just because the ad sales number came in really strong, Like if it didn't, might everybody be like maybe not?

Okay?

Yes, absolutely, he is buying the right to spend money like a drunken sailor because his fundamentals and his core business are strongly over delivering consensussessments. The day that stops, the music stops, and suddenly people are going to take a hard look at these You know, he's making five year commitments for these super intelligence employees, and he's making ten year commitments with the money he's spending on data centers.

So all of this money he.

Has a free pass so long as his core business is growing twenty two.

Percent okay, okay, totally makes sense sort of the free pass like Elon was, you know, allowed to be CEO of many different companies and investors were fine with it until they weren't. Jack Dorsey the same thing, right, It works until it doesn't. Yeah, what about though, the promise of this being profitable in the future, all this investment ultimately paying off beyond making ads more efficient? What is that vision? What does that world look like in your view?

So again, so Mark Mark is just he has got a big idea. He wants to replace Apple, that's for sure. So does open Ai. So Apple takes a thirty percent tithe on every dollar earned on its platform, and that hurts Mark Zuckerberg not only because Apple gets paid for a lot of work he is doing on Facebook and Instagram, but also it allows them to change policies and procedures like around security and safety and privacy.

That costs Mark Zuckerberg ten.

Billion in revenue three years ago, and since then, Mark Zuckerberg is all about replacing Apple or that piece of hardware with ybound glasses or Quest goggles or something or the metaverse.

He's trying to displace Apple.

And he wants to be the backbone that everybody has to pay thirty percent to. So that's his main economic mission. And now Jenerative AI comes along, which I think, you know, I think many CEOs thinks it changes everything. Even Apple said it's the biggest technological disruption of our lifetime.

And they benefited from mobile.

Which you would have thought that would they would have thought was bigger than Jenai, but apparently not.

So.

I guess the question is Meta is saying we think they're super intelligence. We think every human being is going to have a robot that they hold on to, maybe without a screw. We don't know, you know, we don't know what the form factor is. But that does things for you where you see the world differently and it helps you get through the world. But I don't think we know what that is yet, and he doesn't either.

Well, nobody can do what you can do. We want to ask you about Amazon. Sure this dock down still more than eight percent here in the aftermarket, and I think there is concerns about kind of the cloud spend comparison, you know, among the big hyperscalers, Amazon still the biggest when it comes to, you know, we think about what's going on in terms of the cloud.

What you take here are.

What we kind of need to be thinking about with Amazon, because investors seem pretty disappointed, are you?

So I think here's what I think is going on with Amazon. Answer the first half of that question. So, they had very strong revenue growth up thirteen percent, which was like, you know, we were four percentage points low that and very strong EPs and margins. But the problem is they gave very tepid guidance. So people are really worried about tariff's impacts here, so they're worried about the

So I think that would have been higher.

But that's a fabulous number nobody's focusing on today, and I think people investors we've talked to are frustrated with capital spending on Kuiper which has no revenue, capital spending after for ten years so far on Alexa no revenue, and like they're going to urban delivery same day, And I think people don't understand their core business of e commerce.

I think people don't understand that as to use a capital.

At the same time, they just raised their capex guidance. When you do the numbers to round numbers, one hundred and fifteen, one hundred and twenty billion this year. The next closest is Microsoft and Google at eighty five billion, so they're quite a bit above everybody else on this jenerative a I think, and then AWS has a nemic revenue growth, you know, neg I mean thirty two percent margins in the cloud business, and they were thirty nine percent ninety days ago, like what the heck? And they

Why aren't they forty percent?

Again it why not sell to the highest bid or the last you know, you know, one gig of capacity. So we saw that in both Azure over at Microsoft and in Google Cloud slower I mean.

Growth rates, but really high margins. And that just didn't play out at.

Amazon all right around the world.

We went Thank you so much, Laura, always appreciate it. By the way, Laura's got a by rating on Amazon with a two hundred and sixty five dollars share price target. The stock right now just below two fifteen his share Laura Martin, have a great weekend.

Senior analyst at need him in Cup Joining us.

You're listening to the Bloomberg Business Weekdaily 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.

Microsoft this past week reported better than expected growth in its cloud business and said spending on AI infrastructure hit a record. The closely watched Azure cloud computing unit posted a thirty nine percent rise in sales during Microsoft's fiscal fourth quarter. Company also said sales at the cloud division grew thirty four percent to more than seventy five billion dollars during the year end of June thirtieth, the first time the company has disclosed a revenue figure for Azure.

Meanwhile, the week before Google parent Alphabet and to deal with more than a billion dollars to provide cloud computing services to the software firm Service. Now, Alphabet's massive spend on AI has helped its score major client wins, especially among AI startups, all will making strides against its competitors

And so no surprise perhaps to Google's cloud computing unit revenue topping analyst estimates when it recently gave it's coarly update. So yeah, we wanted to know more and we got the chance when we were joined by Francis Desuza. He is the first chief operating officer of Google Cloud.

Yeah.

Right now, it feels like there are two powerful mega trends that are playing out in the enterprise market. The first is, you know, the continued move by companies of their workloads to the cloud, of their applications to the cloud. And the second, much bigger trend that's playing at right now is the adoption of AI by companies and those two powerful mega trends are driving our business and fueling

You just mentioned a few examples of companies that you work with. There are a lot of small businesses, though, and even large businesses that I think it's fair to say haven't fully harnessed what you view as the opportunity when it comes to AI. How big of an opportunity is it for Google Cloud? What's a number. How can you quantify this?

Yeah, I think you're absolutely right in that we're the very early stages of what is a very large sort of adoption market in front.

Of it now.

You know, you look at the numbers we delivered, you know, last quarter and Google Cloud, we delivered thirteen point six billion dollars in revenue, and as you said, that's up thirty two percent year over year. So although the numbers are already big, we're still just at the very very

You know.

One of the things Francis said, I'm so glad we could get some time with you, is that, you know, everybody kind of throws out AI and large language models generally, and we're just trying to get more of an understanding of how this all impacts our world.

Drilled down a little bit further.

In terms of the customers that you are working with, big, medium and small and how they are using.

AI and how it's going to impact our lives.

Yeah, we're seeing it show up in enterprises in a whole bunch of different ways, and so let me give you some examples. You know, some large manufacturers like Toyota, for example, or Honeywell are using AI on the factory floor to provide information to the people working on the factory floor to improve their operational ability, and also to provide access for their customers to engineering and technical support documents around the product, so make it easier for customers

I'm so glad you mentioned kind of the medical area and what they're doing, because I think a lot of folks come on our air and talk to the Bloomberg audience and talk about how AI might significantly impact not just hospitals, but just how we get medical care. You are the former CEO of Alumina, and I think about DNA sequencing and all of the information and data that could potentially improve how we are treated when it comes

Yeah, I think AI is going to have a very big impact in a number of ways across healthcare. Right, So if we talked about some ways where it's helping in the delivery of care by freeing up medical professionals from administrative tasks and using more of their time to

We're speaking with Francis deesu'sa chief operating officer over at Google Cloud. Francis, I want to talk a little bit about competition. For years, Amazon has been number one. According to our Bloomberg Intelligence team and data from IDC. In twenty twenty three, AWS had about forty seven percent of the infrastructure as a service market share, Microsoft in second place with sixteen percent, and then Google coming in with about six percent. How do you get to number two then number one?

What's really interesting is that as I talk to customers with their things as a convergence of two really big important spaces. One is the cloud spaces you talked about, and two AI. So nearly every customer conversation I have now in prospect conversation I have is really all about AI and how it will impact businesses. And we are the only hyperscaler that actually has our own AI stack. So if you think about every part of the AI

I got to say, it's the thinking models, the Gemini two point five that really kind of are blowing everybody's minds.

Hey, one thing I want to ask you, speaking.

Of customers, Tim and I full disclosure, we talk about it a lot. Are a little bit obsessed with weimo. How much is weimo using Google Cloud. I'm just curious in terms of keeping that all going and running.

Yeah, I totally understand why you love Weimo. I love weimo too. Living in San Francisco, I've been using it for a few years and my daughters and I love it as you can imagine, you know, being sister, you know parts of Google. We leverage technologies that Google Cloud is building as well as deep Mind is building, and so you as you could imagine, you know, there's really close interactions from a technology perspective across these different parts of Google.

Hey, just thirty seconds left.

Security.

As we know your former background semant tech, you understand the importance of security specifically, and I'm just curious, what do you keep top of mind when you think about the security of Google Cloud and keeping it secure.

Yeah, as you point out, security is a really important area for us to focus on, and it's a core part of the value that we deliver to our customers in terms of providing a very resilient, protected cloud. There are a number of things that you know that are top of mind for us and for our customers as we talk aboutecurity, especially in a world of AI. One is it's important that security companies are leaning deep into

So glad we could get some time with you to SUSA. He's the Chief Operating Officer at Google Cloud, former CEO of Alumina, and also former president at Samantech, where he oversaw the security and data management portfolio.

This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay 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 Shares of Astra Zeneca rose this past week, right after it reported better than expected sales and rising profit for the second quarter, spurred by its stable of cancer medicines and growth in the US. The company recently pledged fifty billion dollars by twenty thirty in both production and research and development in the United States, as it seeks to show President Trump's administration it is serious about making medicines locally.

A few days later, President Donald Trump sent letters to seventeen of the world's largest drug makers demanding that they charged the US what other country pay for new medicines. The letter added that they immediately lower what they charge Medicaid for existing drugs and guarantee that future medicines be launched and remain at prices on par with what they cost overseas. On top of that, US Commerce Secretary Howard Lutnik also said that the US will impose a massive

Tar of certainly top of mind for many global pharmaceutical executives. One of them Pascal Surio. He is Astrozenica's chief executive officer, and he joined us alongside Bloomberg News health reporter Madison Mueller in studio.

I mean, I think, first of what it's important to really think about what every country would want to do, because every country would want to make sure they can they can secure the health of their citizens.

It's a question of national security.

So nobody should be surprised that the president wants to reshow manufacturing of pharmaceutical products. I personally have seen this have been since several years, and we decided several years ago to increase some manufacturing footprint in the US so we can actually manufacture many scenes for American patients in America. Every country would want to do that, and a big country like America, of course kind effort to do it.

You said that you made that decision several years ago. How much of the fifty billion dollar pledge was planned before the President threatened these terraffs.

Well, we've been pursuing this strategy of manufacturing in China for China, in the US, for the US since five six years and quite frankly, COVID actually showed us we were on the right track because we all saw what happened during COVID, and so we accelrated this movement. And so our fifty billion commitment is a commitment to R and D but also commitment to manufacturing. We announced together with the Governor of Virginia, a multi billion dollar investment

You know, you've said that Virginia obviously has made it easy to make manufacturing investments there in North Carolina is pretty similar. Are there other states in the US where you're having these types of good conversations that are you know, incentivizing businesses like yours to invest.

Well, you know, it's hard for me to point the point that any state that is better than another. Let me just say that we have.

No problem.

From different in New Jersey.

Let me let me just say that the company like is for other science. So science is key, and so you need to be able to recruit the right sciences, the right engineers. And in Virginia you can do this because you have some of the best university universities. The other part is dealing with partners in a public sector that understand us, that we trust each other.

We can move fast.

You know, I always tell people in our company talk about Astrazenica speed because there's a lot of competition. We need to move fast. I've learned Virginia speed. The governor has moved so quickly. So this is the kind of thing we want to see, whether it's in America, in a state or in a country. We want speed and we want people to understand how we think.

You want speed. You want people to understand how you think you want to You said you want to follow the science. There has been criticism that Robert F. Kennedy Junior, the Secretary of Health and Human Services, has not necessarily always followed the science with his comments when it comes to medicine, when it comes to drugs, when it comes to vaccines. How do you look at that and his role there.

Well, you know, I'm not here to actually get involved in political discourses. Let me just say that as a company, sciences at the heart of everything we do. The reason we have such a large oncology pipeline and particular and beyond this is because we've focused on science for the last ten twelve years, and America is where science in our industry is happening. And that's why it's so critical

We need to.

Actually continue supporting the leadership. And that's why we invest fifty billion dollars in this country, not only in manufacturing, but also in R and D.

What about China, I'd love you to kind of explore that a little bit. What are you investing in and building out in China and what might surprise our audience about the innovation that's happening in China, especially when it comes to pharmaceuticals.

Yeah, I think my great question I think we need to start.

With is the the hypothesis, the assumption that basically the more products, so the more innovation exists in the world, the better it is for everybody, for every patient, because if you have a patient with cancer, the only thing that you care about is to be cured if you can be cured, right, and so innovation in China has

Is the administration with some of it, some would say questionable disruptive policies. There's been a lot of reporting about scientists kind of leaving the United States and going elsewhere. Are you seeing signs of that, whether it's to Europe, to China to elsewhere because of not supporting you know, academia and academic universities.

Some of that seems to be coming back.

But yeah, but you know, in these things, it's always difficult to discern what is anecdotal versus what is systemic. What we have seen in China is really a substantial return of scientists from the US but also from the UK and elsewhere, but not because of policy, simply because they could see opportunities in China. There is money, there is capital that can be invested. The Chinese are willing to take risk. The government has facilitated the return of

They've been quite successful.

I want to say though, that the leadership remains with the US and we need to maintain this, of course, I mean the country needs to maintain this.

There's been some concern though that companies like yours, you know, not necessarily astro but big pharmaceutical companies are going to China for most of their biotech deals. Now, you know, what would you say to that and what would US biotech companies need to do to sort of attract investments from from.

Well, I mean the first thing I would say is that if you're a patient, you don't care. What you want is a drug that will help you. Right, So when we do a deal with a Chinese company, typically it's because they've discovered a product and they need help to globalize it. Because discovering something in a lab is one thing. It doesn't require a huge amount of money. It require us very talented people, but the capital requirement is limited. When you want to develop globally, then you

I want to go back to sort of a global domestic question the idea of your listing and the Times of London has said that astro Zeneka is looking to move it's listening to the US. Are you going to do that?

Well, you just shared with us.

Yeah, we don't comment on rumors, and you know, as a company over the last ten years we've had so many rumors. We don't comment on rumors. The only thing I will say really is the United States is really core to our company. By two thousand and thirty, we expect fifty percent of our revenue to come out of the United States. Today it's forty four to forty five percent,

Just curious in terms of growth.

You know, we've talked about earnings and your cancer drugs are certainly important in terms of growth. Where do you see kind of the most significant growth trends when it comes to pharmaceuticals. We've spent the last what is it, Madison, the last couple of years talking about the obesity drugs and weight loss drugs.

But where do you see it?

We talk often about genes and genetic and immunotherapy.

Where do you see the real growth coming in the next I don't know, five to ten years.

A great question, but it's almost all of the above. I mean of course my check managing what I would call sat rolo abdominal fat. Because everybody talks about obesity, what really matters is how much fat do you have in your domains that surrounds you, your liver, your punkreas, your heart and creates inflammation and insulin resistance and all the consequences.

We can think about hypertension and others.

So this is really a big epitieomic globally. We need to address that and that's what companies like lilian Over are doing today and we are we want to do this with all agents. But then you know, we have development in antibody drug conjugates, we have developments in by specific antibodies for cancer. One of the most exciting new technology is cell therapy because cells upy will apply to ematology, cancers,

Disease can be a family member who has can be cured.

I mean these patient stay, their life is about taking drugs. Theories with all the consequences, you can imagine the organs are destroyed over time by the disease. They can be cured. You have people with my LOOMA that can be cured. And so as we progress this technology and make it more usable, is more easily usable, and more affordable, it can really transform many fields of medicine, pharmacology to imnology.

I know you've had an amazing tenure at Astra and there's sort of an obsession in the UK with your succession plans and what comes next. You know, not to say that you're leaving anything.

We don't want you to.

We don't want you to go.

What do you want to accomplish before you and your tenure at Astra.

Well, one of the things is that I wanted to do is have a great team, and I have a great team.

That's it.

I have really a fantastic team. And that's why what you should worry about my succession. We have a great team and people who can succeed me. So that's I think one thing, and we need to we constantly try to improve the team, not only my direct reports, but they are direct reports and the company as a whole.

Two is the.

Second piece is almost unachievable because science is never going to be stopping. And the more I progress, the get the older it gets, the more science get exciting, and the more excited you. I mean, there's no better time to be in our industry than there's so much innovation, so much hope to cure diseases that can't be cured today.

But that's for the joke.

But the most exciting really is the science and the pursuit of new technologies and new products that will make a difference and change the future of medicine. So that's how those things I want to add resk. But I have to accept that some poe biotoje is going to catch up with me.

And unless you.

Create a pill that keeps us going, I'm kind of even my fingers crosses exactly, gp Ones right, we think it's going to be curel Pascal, we really enjoyed this. Thank you so much for having for all the time. Pascal Sorio he is Astrozenicas chief executive officer, and of course Bloomberg us his own health reporter Madison Mueller, always a must read on the Bloomberg and at Bloomberg dot Com.

You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube.

Plendy ahead in our second hour of the weekend edition of Bloomberg Business Week, including the long and winding trip to FDA approval for one psychedelic treatment.

That trip, by the way, it's continuing.

Plus, while the organization behind Burning Man's Desert Utopia is now facing an existential financial.

Crisis, and jewelry from the Roaring twenties making a comeback, giving the new Tesla diner a test drive, and the surprising complexity of Hey Keyfob.

It's all in Bloomberg Pursuits Later on this hour.

First Up This Hour. A few weeks ago, Robert F. Kennedy Junior, the Secretary of Health and Human Services, said he could envision approval for psychedelic drugs is treatment for depression and trauma. If clinical studies have been conducted, it comes as psychedelics are making inroads in deep red states like Texas, where former Trump Cabinet secretary and ex Governor Rick Perry has thrown his full support behind the effort. That may have caught the attention of the team over it.

A Compass Pathways where a company in the final stages of developing synthetic psilocybin as a potential treatment for treatment resistant depression or what we call patients living with persistent depression. That's a big problem affecting some three million people in the US, and it's debilitating. Many of them are unable to work. The majority will have had some sort of

You've used the word potential twice. You said it's a potential treatment, and you said potentially you're a leading company there when it comes to FDA approval. Is it unproven?

We have generated robust evidence now from two studies. The first was published a couple of years ago, and then just last month we released more data from the first of our final stage studies. So what can I tell you about that? First safety this we didn't see any unexpected safety signals in this treatment of patients living with persistent depression. And secondly, after just a single treatment, after six weeks, we saw a significant reduction in depressive symptom.

We should point out that about a month ago, in that study came out, the stock your shares tumbled almost fifty percent, hitting a record low. What I guess I want to understand, so it was below what Wall Street expected. It did meet your goal from what I understand your company goal, but Wall Street was very disappointed. Tell us how this works. How does one psilocybin treatment kind of cure depression, persistent depression.

Psilocymin you can think of as if you like a key, a key that unlocks a door or a set of doors in the brain, and while those doors are open, that enables the patient to work through some of their fixed negative thinking and potentially have relief from their depressive symptoms.

What's many? How many? Forgive me Tim, like, I'm just curious how many.

So that was a study of around two hundred and thirty patients of whom a significant number were on what we call the active dose of the medication, and what we saw was a quarter of them had from that single dose they were actually sustained freer depression out to twelve weeks. And in this population of people who have typically tried multiple treatments and for whom very little is any longer working, that was a remarkable response.

When patients do take this single dose, what is the environment that they're in during that six to eight hours, and are they guided in some way by a therapists of sorts.

It's a physically it's a calm, comfortable setting. They have the option of ice shades, there's music playing, and there are appropriate safety safeguards in place. Psilocybin is a very inner directed mechanism, so what actually happens is the patient has this profound influence, but where there is some in the room, it's largely silent. There is not directed therapy in the course of that intervention.

How do you run an effective clinical trial for a drug that the experience is such that the person knows they've taken this drug rather than a placebo. Somebody who takes a placebo is not going to have a psychedelic reaction to the placebo.

At Compass, we thought about this before we even started our studies. So our prior big study, the one I reference with two hundred and thirty patients, we designed that in such a way that there was the choice of three different doses of psilocybin. One was a low dose, a second was an intermediate dose. And in patients who've never had this experience before, that's truly confounding in terms of they cannot tell whether they got a medium dose

We're talking with Kabir Andathi's chief executive officer of Compass Pathways here in studio. You keep saying synthetic. What's the difference between synthetic and naturally occurring?

So we are manufacturing a pill to the highest standards of purity, no contamination. We know exactly what is in the pill. This is a manufactured pill that we are treating with, so that.

You know exactly in terms of dosage. Is that what I'm saying, So if naturally occurring is different.

Potentially it is naturally occurring whereas well as is synthetic. So we know exactly what's in it, we know the exact pill.

What will it cost?

It's primiture to speculate on that at the moment we're still conducting these final stages of our studies.

But expensive and.

Would it be something I mean, if you get f to a approval, is it safe to make the assumption that it would be covered.

The whole premise for founding Compass Pathways was to enable that form of broad access. So the reason that the company has gone through doing these rigorous, robustical studies so that we is exactly so that we can discuss that with the FDA potential for regulatory approval, and then if we're fortunate enough to get there, the chance to negotiate

Kaviir Carol mentioned that the Associated Press reported earlier this month that RFK Junior recently talked to members of Congress about psychedelic therapy for depression and trauma. Apart from that, have you seen any real signs of support for the administration for this new class of drugs or type of type of treatment.

We have had support from the FDA throughout our development process. We have breakthrough designation.

Before Robert F.

Kennedy Junior took over as HJ, we have had.

A mot cbated and engaged agency. We're excited to see the voices from HHS from Veterans Affairs today suggesting that they also see the potential for this class, and we're very happy to work to see how we could potentially accelerate access while at the same time ensuring that we continue to generate really good, robust, good evidence that these are safe and effective.

Talk to us about timeline, though, is it I feel like we've been I know Blimberg has been reporting on this class of drugs and treatments, and I think we've all seen pieces that's right for a long time that for people who or other treatments don't seem to be making a change for them.

So I don't know.

Is it another few years, is it the end of this year, is it the end of next year?

And is it that the.

Trump administration could somehow shuttle this through much more quickly.

I think there are clearly people in the current administration who, as I say, see the potential of this. Well, we want to make sure what we do this right as well, so we want to make sure we do that in the right way, with the right rigor and so on. We are conducting, as I say, the final stages of studies. We have two ongoing of which the second will wrap

Do you also think about other usages, whether it's PTSD and other applications, And I'm just curious where what you might be exploring in that world.

Our next priority, beyond persistent depression is indeed PTSD. That is something with very high prevalence, some thirteen million in the US, for which there are only two very old drugs approved, and unfortunately recently there have been two advisory committees recommending against new drugs in that space. So yes, we see PTSD as a key area. We generated some data last year and we will be announcing the design of another late stage trial for PTSD.

I know the US FDA is the gold standard for going through the regulatory process to be viewed by the world as a credible treatment for something, but these days is it worth going after approval in another country to try to do this on a smaller scale to prove that yes, it indeed works.

We will be exploring approval in a range of countries. So our studies have been international, US, Canada, Europe as well. We have taken advice over the years from the European regulatory authorities. We're a UK based company as well, so we've been speaking to the MHRA, the regulatory authority in the UK. So yes, this is a problem, sadly for patients across the world, and we would look to exploit it where we can.

I'm just curious in terms of big Farmer, have you had any preliminary discussions with larger, larger pharmaceutical partners interested in commercialization, co commercialization or distribution.

What I know is the Big Farmer is tracking this space closely. And what's been great is to see the re entry of some big fama back into psychiatry over the last couple of years. So I know they watched this space. But we at Compass are determined that we can do this ourselves and are excited about the opportunity to bring this potential new treatment to patients who so clearly needed.

So no strategic alignment that you would consider. You plan on doing this alone.

That's our planted.

Okay, great staff, stay in touch.

Thank you.

Let us sta how things are going. I really appreciate it. Kiber be well. Kabir Kath, He's chief executive officer of Compass Pathways, joining us right here in studio.

This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern 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, Well, Larry Page, Sergei Brin, Eric Schmid are all so called burners. Mark Zuckerberg is gone, as has Elon Musk. Sam Altman called the festival quote the most beautiful man made thing I've ever seen, and suggested it was what a post agi world can look like, like poetry. It's something. Apparently there are a lot of drugs there too. I'm just I'm just gonna say that we're talking about Burning Man, and as I've been told by friends who've gone, I wouldn't get it and I wouldn't like it.

Friends you've gone, you've never gone.

Oh I've never gone.

No.

Did your friends like it?

Yeah?

But he was like, he's like yeah, He's like, you would hate it. You got to let go, and I don't let go of anything.

You didn't like it.

Anyway, that's enough about me. I want to talk to Ted Alcore and he's a Bloomberg BusinessWeek freelance contributor. He wrote about the magazine for the magazine about Burning Man's crisis. He joins us from New Mexico, it's an existential financial crisis that the organization is facing. Ted, we're going to talk about that in a minute, But have you first have you been to the Burning Man event in the Black Rock Desert?

I have.

I feel like you know, I'm a big believer in getting a taste of what you're going to report on knowing a little bit of what you're writing about.

Okay, so describe it. Just describe it for people who haven't been.

It's hard to put into words, admittedly, and I don't mean that as hyperbole. It's a very strange, unusual environment visually and socially. You know, eighty thousand people in the desert with a lot of lights, a lot of noise. I've heard rumored there are some substances there and certainly very few rules, but you know, interesting things occur out of it, and you know, obnoxious things too, but it's certainly something that keeps people going back here after year.

One of the very few rules, though, is that there's no money exchanged at the event, apart from the ticket that you buy ahead of time. And that is the core fundamental tension that you write about. It has to do with commerce and money. That's really at the root of Burning Man's financial woes. It just can't do money explain what's going on.

Yeah, I mean, basically it's bound to these principles that kind of emerged from this sort of utopian project of you know, getting away from the traditional capitalist economy, decommodifying the event. Everything there is based on gifting. You know, for nine days, people get by on what they what they brought, and what other people give them. But the organization, the nonprofit that runs this, of course, has to operate in the real world where det collectors do come for

Wow, that's a lot of money.

You write in the story that back in nineteen ninety anything close to when they sold anything close to a ticket or what you could call it was actually a suggestion of ten dollars in donations and price tickets or the price of tickets kind of stayed around. I guess that level for a while. What does it cost today and why aren't people maybe as interested? Because I feel like we used to talk about it a lot here, because a lot of business folks, certainly in the tech community,

Yeah, I mean, well, when it started, it was just a bunch of people driving out into the desert, So I don't think feel people felt compelled to sort of make a donation. I dug up this flyer from the first time that the event was held in Nevada with as you said, it suggested ten dollars donation. Yeah, last year, the standard price ticket was five hundred and seventy five dollars. This year it's seven hundred and forty nine dollars. So

Then they pay and they pay a franchise fee.

Right, No, you know, these events basically if they meet the goals of Burning Man, they sick to the principles that provide some monicam of safety. They can use that, they can get sanctioned and they can exist, and they're offered, they're asked to give a suggested donation of the organization, but they don't tie basically the mothership and more people now are experiencing Burning Man in those places than in Nevada in Black Rock City.

Okay, Well, speaking of donations, Carol mentioned twenty million dollars was a lot of money, and for an organization nonprofit being short, twenty million dollars certainly is. But to somebody who's one of the wealthiest people in the world, indeed the wealthiest person in the world. The names of people who are Burning Men supporters, Larry Page, Sergei Brin, Eric Schmidt, they're all billionaires. Mark Zuckerberg one of the wealthiest people in the world. Elon Musk is the wealthiest person in

I think it's pretty popularly understood that sort of Silicon Valley's elites have, you know, are very connected with Burning Man. But even to me, I was surprised to learn how fundamental a very small number of those uber wealthy people have been to the organization. It was in a fundraising prospectus that was sort of an internal document that I learned that just five individuals have provided the organization two thirds of its philanthropic funding in the last ten years,

So fundraising not going so well.

So everything hangs in the balance here For the sales this year, I think, you know, they've tried to be more firm about asking a higher ticket price and sort of coaxing people to pitch in what they say is the true cost. But they're between a little bit of a rock and a hard place, because the higher they raise prices, they're losing their lower income adherents, some long time members of their community who kind of make the event,

We cover the US Open and it's lots of sponsorships, big well known companies, any companies interested in sponsoring this event.

Well, you know that Burning Man organization has tried to, i think adapt to new times. They're trying to interest a new generation, right of the gen zers who haven't who have not been attending, who don't know how to get a ticket or pay a price. They've embraced some kinds of social media trying to put the word out

I don't want to give away the whole story. It's worth the read. It has been among the top red stories on the Bloomberg terminal since this came out, and I've had people text me about it. Actually, my dad loved this story. He's like a I guess you.

Could say, does the where she had gone?

No observer a distant observer of burning Man. I think it's fair to say, I don't want to give the whole thing away, but can you just tell us a little bit about a potential solution here? This voluntary burning Man wealth tax?

Yeah, got to go there. Well. One of the board members of the burning Man project who is has told me, is one of the major donors that supported it farhad Mohet, who's shold Shopzilla for over a half billion dollars twenty years ago and has had some other very successful ventures since.

What was he smoking? Oh sorry, no, I'm just saying this, Saffron.

I think.

I don't know. I don't know it was it. Read the story, reading the story.

I don't know anyway, unbelievable read.

As Tim mentioned, it has been among the most read stories throughout the week. Ted Alcorn, He's contributor at Bloomberg business Week. Check out a story about burning Man Festival facing its extential existential financial crisis.

It's an incredible read.

You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube.

It's not for Bloomberg Pursuits.

And this week it's the Jewelry special featured in the magazine out on newstands later this month and already available online on the Bloomberg and at bloomberg dot Com and tim It's all about the one hundred years of Art Deco influence. I love the history that we find out about kind of how it all came to be, and so we're going to get into that jewelry that's over a century old, that worth millions of dollars.

Here with more is Bloomberg contributing a jewelry rider and founder of La Patiala, the luxury encyclopedia, Kristin Shirley. Back with us. Kristin, I want to start with some history and definitions here. What is art Deco and just give us some background?

Sure, So the Art Deco period started in the early nineteen hundreds and really crystallized in nineteen twenty five at the big exhibition in Paris for Art Deco jewelry. There are a lot of different styles, but what they share is graphic, linear design, few colors, but bold colors when they're used, and the use of diamonds, black enamel and honor.

What did it come to be?

Like? I always think about, you know, trends and waves fashion art jewelry, Like what is it like, take us back to nineteen twenty five.

Sure, so this was a reaction to the very floral, swirlly motifs of the period that the late eighteen hundreds. So these new geometric motifs were sort of the opposite of that. These designers were looking at modernity, and modernity to them was strict geometric lines. We were entering the industrial era with you know, Ford assembly lines and new

I think a lot of people are really familiar with our Deco buildings, especially here in New York, maybe the Chrysler Building or the Empire State Building. But jewelry before reading your piece was kind of new to me. It didn't occur to me that the Art Deco movement extended toward jewelry.

Yes, our Deco jewelry is actually one of the most enduring and timeless jewelry trends that they there is no matter what year the pieces are from They really have this ultra modern look. So in our story, we combined vintage pieces from the early nineteen hundreds with pieces that were made this year, and I think looking at them, you can't really tell what's vintage and what's new because it still looks so fresh. And it's one of the very few periods that you can say that about.

That is so true.

And it's funny because I had to go back and forth. I'm like, Oh, that's new stuff, which is fascinating. Christin take us back though, to November that auction at Christie's, because I'm always curious about too. Why you guys decide to talk about this right now? It sounds like all of a sudden pieces have been coming up for auction and investors, buyers, they're really interested in them.

Yes, I think Art deco is always enduring. But there was a huge collection of a private family collection of jewelry that came up for auction and Christie's in November, and the piece is sold for exceptional sums, you know, two to three times and many amounts, and that's because

Well, all right, what was that necklace?

It was a beautiful Cartier necklace and it had about one hundred and thirty carrots of diamonds and it was just very strict geometric, absolutely stunning, a perfect example of Art Deco style.

I think I have a version of that in rhinestones. We're just not the same thing.

No, but it's really just I mean, you look at something like that, it's timeless. I also love I mean walk us through some of the other pieces and also kind of go back to some old Hollywood icons many decades ago, who also kind of show show case pieces.

Yes, if we're looking at Hollywood in the nineteen twenties and nineteen thirties, these starlets were saying, I want to wear art Deco jewelry. I don't care what era of the movie is taking place, And so we see it in a Cleopatra movie, which the Costume Archives at Paramount described as the most Art Deco movie of all time. You wouldn't think Cleopatra would be wearing Art Deco jewelry and clothing, but it was just so avant garde and of the moment that that's how they dressed her. And

What about now in sort of everyday jewelry and the influence of Art Deco one hundred years ago on designers today.

Well, I think people would be surprised that a lot of the jewelry they're wearing is Art Deco inspired. If you're wearing something that's geometric, it's got white diamonds and black enamel. That is quintessential art Deco right there. Anything with like a cavish and gemstone inside a geometric setting also buried art Deco. And we see these designers pulling

I have to say, the airrings are amazing.

Folks should go online and check it out or go to the Bloomberg And my understanding on all of this or a lot of those prices are upon request unless news and there are a lot of prices upon request, So as my mom used to say, if you have to ask. Kristin, thanks so much. It's an incredible spread. And read the jewelry special here in pursuits. Kristin Shirley, thank you so much. Bloomberg's contributing jewelry writer and founder

Yeah, I learned that the hard way. A couple of years ago. I lost the humble key fob for my twenty eighteen subrew outback and it was many, many, many hundreds of dollars to replace it. I was like, this is insane.

It's insane.

I actually think it was like, not cool, cool, it's not cool.

No, they're crazy. We're always like in our house, don't lose the keyfob.

With more on that.

I got a guy though, Now you.

Got a guy?

A guy?

Yeah, Timmy's like, you have a guy for every Yeah, I didn't. Let's just say I didn't go with the official subreu one. I got a guy. He showed up.

You maybe from California, but you have definitely become a New York. All right, let's get to it, and we're al just going to get a little bit into her recent drive by with the Tesla Diner. Bloombergotto columnist Hannah Elliott joining us. Now, Hannah, good to have you here. Let's talk key fobs first of all, because I think we just think they're this silly little thing, but apparently there's a lot that goes into them, especially for a luxury car or higher end car.

Hi, guys, that's exactly right. And Tim, that was so not cool. I'm very upset by your tale of your lost key fob.

Well, I called the super dealer and I think they were said like it'd be in the many hundreds of dollars to replace it. So I looked at Reddit and I found that you can actually call a like a special type of locksmith and they can bring you an aftermarket one that works just as well. That was like, it was like one hundred and fifty two hundred bucks.

That's a great hack. We should all take a queue. That's a great hack. And Carol to your point, Yeah, key fobs are something that we don't really think about until we have to, like if we lose it. But actually it is kind of a calling card for your car because it is the first and primary way that you are going to interact with the vehicle. Actually, and

Which really low key.

Maybe not that.

Low y, maybe not that.

The other thing that was interesting to like some people, I love what you talk about the BMW key fob that like kind of went maybe too far.

Yeah, you know again, this is sort of a new era of exploration in the key fob segment, and we got a credit BMW. They really they shot for the moon on this. In about twenty fifteen, they developed this display key, which was this really big, oversized fob with a screen on it and it had a ton of function. Is literally kind of like an iPhone, a small iPhone. But it was a six hundred and seventy dollars option and it is no longer offered. It was discontinued in

How did Cadillac and General Motors kind of mess up with their high end competitor.

This is an interesting thing too. This is a this is a miss. And we recently drove the Cadillac Celestic, which is their Rolls Royce competitor, and I actually did like that vehicle. But the one thing that was a big miss is the key was not special. It was a plastic key, a thick leather sheath that was the same key that you would get in any other Cadillac, And for a car that is supposed to be going up against, for instance, a Rolls Royce, the key just

So you know, is it in some looking forward, is there a point where it's just.

Not going to matter because we're not going to need anything.

Honestly, I think we are going in that direction. Of course we can't, you know. Of course, for instance, Tesla and Rivian have like credit card sized quote unquote keys that you can use to unlock the vehicle. Also, of course we have apps that now basically can control a lot of vehicles from starting, limp to control and climate, audio, windows settings, everything that is great. I mean it's not great if you if you lose your phone, or your phone's dead, or you break your phone, so there's it's

All right.

Well I only said that because you said that in your story, and that's how you can do.

All right, tam go.

Let's move in the direction of food, because Hannah, you usually get to write about cars, but sometimes you get to write about burgers and grilled cheeses and chili fries. And you went to the recent Tesla diner and know you were not allowed to park your own rolls Royce the Tesla.

Diner Tesla parking only they do. They do have eighty superchargers, which is one of the highest concentrations of superchargers in the country. There are a few that are bigger, like out in the desert on the way to Vegas I've seen. But yeah, this is Tesla parking only, although they will valet your car or you can street park like I did. So how was it, Well, it was really an experience. Let me tell you. If you are a Tesla owner or a Tesla fan, I think you will find it

Is it gonna make people buy a Tesla?

Oh, that's a good question. I don't think so. I don't think so. This feels to me more like Tesla is celebrating the people who are already in love with the brand, and I do think that is really admirable. I you know, I love the idea of an automotive brand spending a lot of money and resources and time to celebrate its owners. And Tesla has extremely dedicated owners, especially considering everything that the company itself has been through

What about the Optimist robot? Isn't that supposed to make things move more smoothly?

Yeah, well, Optimism was not present my friends and I did ask, and I was told that, uh, optimis is on a break.

I thought those a whole point of robots is they didn't need to take breaks. You don't need to pay them, they don't need to sleep. Come on, I know.

And I did also ask, now was somebody else operating optimists you know remotely? And I got a no comment, So you know that that might have been brought out to sort of generate some buzz at the start of the at the opening, but no, unfortunately Optimist was not there.

H yeah, I can't.

Yeah, but I would say, honestly, the sleeper hit of the diner menu is the tuna melt. I yeah, like, not something I would normally go for, but it was great.

We're heading to the West Coast for a work trip in the falls. Maybe yeah, maybe take a week? Wait, can we take away Mode diner?

That's a great idea.

I love that they would not. As long as Elon doesn't see you, I think you'd be okay, limeblt you did ask?

I did ask Eric, has Elon been by it? And he said that he had been, But I feel like we would have heard about it, so maybe he went by before it open.

I don't know.

Yeah, we'll keep an eye on it right Oh.

Thanks to Hannah Elliott, a Bloomberg News auto columnist, also diner expert and knows everything about Keith Fobs.

Got to say that story. Both those stories are fun, fun reads.

That wraps up our weekend edition of Bloomberg Business Week from Bloomberg Radio.

Thank you so much for joining us.

Be sure to tune into Bloomberg Business Week daily Monday through Friday, starting at two pm Wall Street Time on Bloomberg TV, Bloomberg Radio, and on Sirius XM Channel one twenty one. You can also listen to us on Apple car Play and Android Auto Free in the Apple app Store or on Google Play.

You can also watch our daily broadcast on YouTube. Just search Bloomberg Podcasts and We're Summa cast on Bloomberg Originals, available at Bloomberg dot com, Slash Originals, and streaming patforms including Roku, Amazon, fireTV, SEMs On TV Plus and more.

I'm Tim Stunnoberk and I'm Carol Masser.

Have a great and safe weekend. Everyone.

This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from two to five pm Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business App. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal