Bloomberg Businessweek Weekend - February 10th, 2023

and good timing. So writes Bloomberg News senior Deals reporter At Hammond in a store in the upcoming issue of Bloomberg Business Week magazine, add on newsstands later this week, already on the Bloomberg terminal and online at Bloomberg dot com slash business Week, ed Hammond. As we mentioned Deal's reporter, he joins us on the phone in New York City along with the editor of Bloomberg Business Week, Toil Webber. He's in our Bloomberg Interactive Broker studio. It does feel

like all of a sudden, activists don't have kind of awakened. Yeah, and it was it got quiet there for a little bit, right, and then uh, you know the you can only you can only lick your chops for so long. But if you're like, let's do this, um so, and what what did the targets look like? And why did it go quiet for a little while? It went quite for several reasons, and obviously we try and get into all of them

a little bit in the article. I think, first and foremost, it was just very expensive for activists to go after the big companies until the recent turn in the stock market, which is obviously poor evaluations down a fair bit and and just made building that initial stake easier. It also obviously gives them quite a lot more potential upsided um if you know, if share process are sort of off their all time highs. But I think there are other

things to play here as well. I think the changes in the way activists and indeed anyone is allowed to sort of vote uh. In terms of nominating directors, it's significantly so called universal proxy rules, which allow dissident shareholders to put forth their nominees for the board of directors on the same card that the company has to send out shells. And now that seems very technical, but it

actually is. It's a meaningful change for actors because it both lowers the cost and the workload needed to actually elect directors to go onto public company boards. So what was the name when it? When it popped that you were like, Okay, we're back in the game. I think the Sales Force was the one for us that really kind of highlighted the trend. I mean they say that three maker trends and Salesforce got four activists in the space of you know, a few days, which it's pretty

unheard of. I mean occasionally you see one or two showing up in very large companies. But for four and four big brand activists in the form of Value Act and Starboard, Elliott and Jeff bubb and to all show their hands, Um, it's pretty significant and show us that, like big company that obviously back on the table, but there's obviously also enough appetite among the activists to really go for it. You know what, I was reading your story, Uh,

it made me start to wonder. You know, you think of the famous activists investors out there, Nelson tells Paul Singer, But of that era, you know, that's what investors who have been around for decades now, and it makes me wonder, you know, is there a new generation coming up behind them? Or is this kind of a lost art to some degree? You know, I know there's a lot of younger investors on the activists short side, but is activist long you know, is it sort of an old fashioned thing or are

there are there no one? It's it's a it's a great point. I mean, it's a sort of gentocracy of sorts, this kind of investing just wait two minutes, um and and the reason it's it's so fun to cover it's, as you say, these are sort of larger than like characters who have been around for several generations and through

lots of lots of market cycles. And they're fun. I mean they say things sort are interesting, They say things that are not the sort of pre prepared speech that we might expect from a lot of investors in day market, and they make it much more intend to cover. In terms of new entrants, yes there are lots of new small all activists, but they tend to be less well financed, so it's much harder for them to come into these

kind of big companies that we care about. They also tend to come in with a sort of a smaller, if you like, menu of options that they can push, so they'll come in often to small companies and say, look, just sell yourself because you did get a control premium that might be forty percent above where you are now and we want that. Well, hey, you know and you mentioned that sec UM the new SEC rules in terms of the board is how much of that, Like would

we be having this conversation with you? Do you think if that hadn't happened, Um, I think it adds to the ability of activists to do these kind of things. I think we probably would be seeing some large scale activism. I mean, obviously it paused a bit during COVID, and so there's this sort of money on the sidelines it was going to be deployed. You coupled that with the fact that valuations have come in a lot, and you get that sort of inevitable uplifting activism. But I think yes,

the rule changes have definitely made either. I think Pelts himself, when he came out against Disney earlier this year, was very clear on that point that the universal proxy rules in some way facilitated his campaign and actually was something

he had lobbied quite hard to get UM introduced. Okay, so, Ed, what what do you think it's gonna look like like, what what's the You know, ultimately there's exits that these investors are looking for, but like when when are they willing to sort of settle and and what is it? How does the trajectory play out for for what's in store?

Still so, I think usually activists want some some form of control, and that's more often than not in the form of a board seat or you know, getting one of their sort of independent people nominated as board of directors um in very big companies. I mean, yes, it's possible to do that, and they often do achieve that, but it's usually minority slates as opposed to whole control slates. All right, Ed Hammond, thank you so much. Steals, reporter at Bloomberg News on the phone in New York City.

Jill Webber, the editor of Bloomberg Business Week, here in studio this story, as we mentioned in the upcoming new issue of Bloomberg Business Week, out later this week. Already on the Bloomberg and at Bloomberg dot com. This is Bloomberg Radio. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Easter on Bloomberg Radio. The Bloomberg business band you Doo. You can also listen live to our flagship New York station

Just Say Alexa play Bloomberg E Love and Dirty. Alright, Tim, So, as we mentioned, shares a Bed Bath and Beyond their up year today still down more than from a high back in August two. It's been often grouped among the meme stocks actively traded by retail investors, and the company is indicated it's getting ready for a potential bankruptcy filing. How it got there and who's to blame that is the subject of another one of our most read stories

on the Bloomberg Today. With more on her story, Let's bring in Joette Newman, Bloomberg News US luxury retail and personal care industries reporter. She's with us right now when our Bloomberg Interactive Broker's studio. So, Janette, who is to blame for what's happening at Bed Bath and Beyond. Well, there are many people. Um to blame, is the is the short answer. And I think, I mean one one

thing that is to blame is Amazon. But I think Amazon kind of you know, whenever there's retail bankruptcies, people kind of cat you know, this is another one bites the dust because of Amazon. And it's much more complicated than that because obviously there's a lot of retailers out there who are competing against Amazon and they're doing and they're doing fine. So Amazon is you know, somewhat to blame for Bedbad where Bed Bath and Beyond ended up, but it's a small portion of the of the blame.

And just over over the past you know, several years, there's been a series of management missteps and miscalculations that led the company to where it is today. So it's it's um structural forces with Amazon, but also you know,

mistakes by managers over the past several years. Well, talk to us about some of the mistakes because we've been talking about retail I feel like for over a decade in terms of how we got overstored too many strategies out there, and we've seen fall at I mean, we even just see i mean, let's go on here post pandemic of just so many retail that have whittled down,

you know, their stores, their brick and mortar stores. So what specifically though in the Bed Bath and Beyond strategy as itt that they just kind of messed up with. So they definitely didn't invest enough in in online so that that left them kind of, you know, flat footed competing against Amazon that omni channel. Right, I can go to the store, I can buy online from you guys and all that good stuff. Exactly. They didn't. They didn't,

They didn't do that well. They spent a lot of money UM buying lots of companies, for example by By Baby, Christmas Tree Shops. They spent a ton of money billions and billions UM on share on share buy backs. That was kind of the previous leadership. Then a new CEO a couple of years ago UM took over. He was

the former head UM chief merchant at Target. So it's a really big deal Mark Tritt, and people were really excited about what he was going to do to potentially turn this, uh this company around and and in fact, he was not able to turn it around. And you know, long story, hopefully people can can read that, can read

the story. But some of what he did was also double down on share buy backs, so spent a billion dollars at a time when the company didn't have necessarily that cash on hand, and also made a pivot to UM white label or private label brands and that's something that for a retailer can actually make a lot of sense because essentially you're cutting out the middleman, right, so it's like you're going to the factory in China and

you're sourcing the products. Um doesn't it seem crazy in hindsight because it's the kind of story you like a meta candles or I need some towels, or I need a rug for the bathroom. I go in bam, do it go right? Right? And so the private label thing can make sense because there's higher there's higher margins, is more profitable for companies. But they did it at right like when the pandemic hit, so they weren't able to effectively source all of their their new products from China.

And also they ended up doing it at the expense perhaps unintentional, but at the expense of some of these well known brands that took people to the store for decades, Kitchen Aid, Oxo, all those brands. So now they had all their own new brands that people didn't know, didn't recognize, didn't resonate with the customer, and there wasn't the same availability of the kitchen Aids and the Oxos, so customer or is then that that started the company on a

downward spiral. Right, customers go there, they don't see, they don't see what they want. The company's burning cash cash is, you know, their cash pile is is starting to dwindle. Suppliers start to get really nervous because they think that they're not going to get paid. Um, suppliers pull back, shelves end up being empty. Starts a vicious cycle where that if a shelf is empty. Yeah, yeah, So it's just it's this downward spiral that they got caught that

they got caught in. And they've been known for having like right the inventory, you could just see it piled up. It was even more striking, I think because of you know, it had been kind of like a stack at high and let it fly as what they would what they would call it in retail back in the back in the day, you know, So I think that that was one of the things that also it was just such a stark contrast to what the company had had been And it's been in that downward spiral now for you know, um,

nearly nearly a year. So a downward spiral that's very difficult to get out of. So how long is this downward spiral and and what could happen? I mean, what could the future of bed Beth and Beyond look like? On the other side? Is there another side? Um? There we have we have reported that our colleagues on the kruptcy team have reported that liquidation is possible. So liquidation meaning you know, Alla Barney's like a Barney's, you know,

it doesn't exist. Circuit City doesn't exist anymore. Um, towys Arrest, at least in the US, doesn't exist anymore. We have reported that that is possible because of the dire financial situation that they're in. It's a it's a lot of meme stock. But is there a winner if if people can't go to bed Bath and Beyond or Bye Bye Baby? Is it a company like Target? Is it Amazon? Who could some winners be because people need this stuff? Yeah? I think I think it's all. I think it's all

of the above. I mean, in in past retail bankruptcies, there often hasn't been a huge jump at any one retailer. You know, in Circuit City went out of went out of business. It wasn't like best Buy saw a huge jump. But because it's a slow decline of something where people have already been going to those places anyway. Yeah. Yeah, and sometimes people end up buying less. Like if you you you buy more because you have a store near you, And if you don't have that store near you, then

some of the demand actually just also dissipates. So there's gonna be winners target Amazon. But I don't think none of these companies are going to see the huge boosts at all of the all of the traffic from bed bath is going to go to them. Um, my apartment is not so happy about this. Okay, so we got a baby on the way is yeah, yeah, we got a baby on the way, so we need bye bye baby. And then my wife really likes face values, which is part of the bed bathroom beyond ubrelative is it is?

And And look, I mean a lot of people are not very happy, you know. I mean this was a beloved brand. Um the famous coupons that drove that drove a lot of people to the to the store. And also you know there's a lot of um in it's heyday. In two thousand seventeen, the company had sixty five thousand employees. Now it has less than thirty thousand. But those you know,

those people's jobs are at risk. We've written about how their severance payments, they haven't they haven't received their severance pay so there's also a lot of workers and employees who are at risk here. I mean, I do wonder with you know, the growth at things like targeting other stores where and and online where it is so easy to get so many of the goods that they offer and get them pretty quickly. Is it just a case

we didn't need that model. I'm curious what retail experts have said that just that model was just not needed anymore because it was kind of a one stop shopping for a lot of different things, right. I think that it at least what what what I have heard of what I have learned is that it's not necessarily that the model wasn't needed, is that the model wasn't well executed. I think there is still space for this model. And in terms of what might happen next, you might see

the company might go into bankruptcy. Then sometimes like companies will buy up the intellectual property and you'll have an online version of Bad Bath and beyond. That happened with

Peer one, for example. There's no more Peer one stores left, but there's a peer one dot com and and and the toys arrus So, So how loved is not baby, is bad, bath and beyond apart from the Master Households, and I think you know it was it was one of the biggest home goods you know, still still is one of the biggest home good stores in in in

the US. So I think that it is it is quite beloved, And I think that's what you know, creditors in the company right now are trying to hash out like how how much has it loved and how much is that going to um pay? Essentially how much money do they have before they've got to do something. I mean they are they are actively in bankruptcy talks as as as as we are speaking, there in bankruptcy. There

in bankruptcy talks. So they've been burning burning cash for about a year and you know, in the last quarter sales fell about year over year. I mean that that's that's that's a ton all right, We're gonna leave it on that note. Jeanette, Thank you so much. Janette Newman, she is US luxury retail and personal care industries reporter at Bloomberg News. You're listening to the Bloomberg Business Week podcast.

Catch us live week days from two to five pm Eastern on Bloomberg Radio, The Bloomberg Business and and You Too. You can also listen live to our flagship New York station, Just Say Alexa play Bloomberg, e Love and Dirty. Billionaire b Tamadonni is having a rough start to three. The Indian industrial Tycoons Empire has taken a roughly one billion dollar hit in a matter of days following accusations of financial wrongdoing from an American activist short seller that is

the subject of this week's cover story. Nathan Anderson of Dedenburgh Research says the Donnie is quote pulling the largest Cohn in corporate history. Among Anderson's key allegations is that people close to Donnie have used a network of obscure offshore shell companies to buy and sell shares in his businesses in order to make them appear more valuable. Well to help us break down a Donnie Group's rapid rise in value and why Hindenburg Research is accusing it of

widespread misconduct, which the billionaire himself denies. Returned out to Bloomberg Business Week, Markets and Finance editor Pat mcneer and Bloomberg News Wealth reporter unders melon. Now, Pat, I do want to start with you help us at the stage here, because I think Guatamadonni necessarily was not a household name. Um, how did he become one of the world's richest men and who is he? Well, he may not be a household name in the United States, but he is absolutely

a household name in India. Um. He's probably one of the most important businessmen in modern India. Almost anything that you might do in India, his businesses will touch your life. So he's built this enormous empire. But a lot of the growth in its value really came during the global everything rally that began with the snap back from the COVID crash. But it just kept going even through two You just like when you when you do a chart,

you just see it just going like hockey stick. Um. But then also just even in two is like global markets were falling, this one's still just going up, up, up and up. So uh, he's become sort of this like very visible global success story, you know, and he starts coming on the radar of even people you know outside of India. He may not be a consumer household name but if you're like watching as Andres does, he is now beginning to like, you know, top every league

table that you can see. I mean, this was Asia's richest man, India's richest man. He was one of the richest people in the world. Anders come on in on it because he was also a man who seemed to like his privacy and kind of stay out of the limelight. Talk to us a little bit more about his empire and then the allegations by Hindenburg. Yeah, he definitely has tended to stable of the radar until recent years. And his empire really is one that touches a lot of

citizens in India every day. He owns a series of infrastructure companies that that all hang together in when one conglomerate. So everything from coal mines to power plants, to power lines, to cements, production facilities and data storage centers. And he's getting into media and he owns food companies. So it's

things that touch lots of Indian citizens every day. And he sort of came onto the scene internationally two when things started falling, he just really went off the church that shares of his companies just went up, up up, and all of a sudden he was the second richest man in the world in September last year, which was just quite surprising to see because the rice was it was just so incredibly baffling, especially for infrastructure companies, which

don't really tend to have those kinds of rich valuations, and that piqued a lot of interest among people who said, this just doesn't make sense. It's too good to be true. These financials just can't be they can't be real. There's been whispers and news reports in India for quite a few years about various aspects of the finances of his companies,

but nothing really had happened. But that obviously changed a couple of weeks ago when Hindenberg Research put out their Hunter Page note, sort of aggregating a lot of what had been out there already and then dove deeper into certain aspects. And most people in India, i think it's safe to say, expected that nothing would really happen. But the shares of his companies started falling, and then they

just fell and fell and fell. Andrews we as we were preparing this story and it comes it comes through so well. In your piece, Um talked a lot about kind of a culture clash between in UM Corporate India and UM sort of it's suddenly it got big enough that it met the markets and the end of the way that people operate in UH New York and London and other financial markets, and it suddenly met this kind of brass knuckles culture of shorts UM. And can you just talk a little bit about sort of like how

that's played out. Yeah. So one of the unique aspects with gout Madani's group of companies is that it's it's built sort of like a traditional Indian family conglomerate, which is UM a series of businesses that that family that it's sort of like a group of businesses that a family builds over time, and they tied together sometimes in some ways, and and you can help support each other financially when needed, and you can move personnel between in

them UM. And this has been it has a long storied history in the Indian business culture in the United States. They used to be common back in the day. They are much less so now. UM. And one thing that people that I talked to ahead of writing the story you pointed out to me was that within these conglomerates, historically there has tended to be quite a bit of really related party transactions and money being moved between different

parts of of the conglomerate. And um. Sometimes that might have been done in ways that others would not pick up on, or that security lawyers maybe would frown upon because it was sort of a family affair and UM and that's something that some people are told to stressed that here you have a certain culture of doing business, a certain way of doing business that has worked extremely well for the country over a really long time, that is now clashing with how things are done in the

financial centers of capital like New York and London, where the culture is very different. Most companies tend to have a really broad shareholder base and not be controlled by family. Boards tend to not be stacked by family members, executive

roles tend to not be stacked by family members. UM. And a lot of people in India are feeling a sense of frustration, I think because they feel like people in the West just look at this kind of corporate structure and think that there's something inherently suspicious with it, when in reality it's it's just a it's a slightly different way of just looking at how business is done

and how priorities are set. The other thing I just want to under I think another layer that you do so well in your reporting is the connection between India, the country, India, the Prime Minister and a Donnie Right. The relationship just seems very close. Yes, Donnie and Prime Minister and round Remodi have known each other for twenty years. And people that knowing me a well, they say that these two are are quite close and their goals are

aligned and they have benefited from each other. And in that vein, Donnie has especially in recent years taking on a really strong profile of trying to link himself and his company with the future UM and the success of India. And that's also something that is pushed really hard on now that the company is under attacked by a New York short seller. Well, it's a great deep dive and I feel like there's so much information that really gives us a much clearer picture of who this this individual

is and what's going on in it. And it is over as we know, because the share price continuing to be under pressure. UH this week our thanks to Bloomberg News Wealth reporter Anders Mellin and Bloomberg Business Week Markets and Financial editor Pat reagni Er. You're listening to the Bloomberg Business Week podcast. Catch us live week days from two to five pm Easter on Bloomberg Radio, The Bloomberg

Business and You too. You can also listen live to our flagship New York station, Just Say Alexa Play Bloomberg e Love and Dirty. We love talking about the travel industry and we love talking about it with our next guest, Um. We are, though, keeping a watch on shares of Chicago. We've seen some selling, a bit of a sell off today following the company's latest quarterly update. Stock is up, though almost thirty percent year to date, still down more than sixty from the high back in March of one.

Like a lot of names in the space, fourth quarter earnings for the company per share missing the average analyst estimates. But let's talk about the business. Let's take a look at what's happening going forward. Great to be checking in again with Axel Hey for his CEO at Travago joining Spa Zoom from Dusseldorf. Dusseldorf, I can't even say it. Don't ask me to say Matt Miller is listening and say, oh my god, mass or can't you get it right, I'm checked, but I'm not German. All right. Um axel,

good to have you here with Mike and myself. How are you? I'm well, how are you? I'm doing okay, I'm doing okay. Talk to us about the quarter. First of all, I mean, the culture has been has been great. I mean, let's be honest, I mean, the whole year has been has been terrific. If you're in travel, Um, all of us wanted to travel and we have the money to spend it, so we we haven't traveled us as we used to for for two years. We haven't died in wine for two years. So um. Yeah. Two

was the of the travel industry act. As we get back into sort of hopefully a more normal economic cycle with the pandemic disruptions in the ver view mirror, how do you think travel fits into that cycle? Is would weakness and travel be a leading indicator of the economy, do you think? Or does it weeken along, you know, coincidentally with the economy. It's difficult to say. I mean, I mean from from our perspective, and one of the key learnings has been of the pandemic has been that

travel is not really luxury. Good but it's it's a basic necessity. I guess we've all experienced it, sitting in lockdown and not being able to get a break and break out of our daily routine. And I think a lot of people have experienced that. So so we do think that that people will continue to travel. Irrespective of the economic scenario that you're thinking of. They will, um, you know, save money on traveling to a greater or lesser extent, depending on how much money is available. But

we do believe that people will continue to travel. Tell us what the trends that you're seeing so far, that you saw in the last quarter and coming up, uh, and going into this new year. So far we're already one a month and a week or so in here. Who's traveling? What kind of trips are they taking? Um? Are they comfortable paying the prices offer? Are they're looking for better deals? What's going on? Yeah, I mean, let's

start with the with the obvious. Prices are up also, so traveling is expensive, and it would stay expensive and prices continue to go up if you look at the year of the year trends, um and UM. And I guess, like like everything else, it's getting more expensive and and like with everything else that that is getting more expensive, travelers are trying to save money and and what they are doing, and we've we've seen some indications of that

in queue four A ready UM. The first first lever that travelers are pulling is they are going to different locations, so UM cheaper locations, not not the top cities, but more um, more hidden gems UM. The second lever that travelers are pulling is they're trading down on hotel categories and so two to three stars are gaining and share four to five are are losing. And and the last one is that the people um cut the overall length

of stay UM to save some money. But we do expect that despite all these these trends that we are seeing, that the overall market will be up in three act. So I'm wondering how all these geopolitical issues play into your business and the travel industry. I mean, obviously there's Russia and Ukraine. Also a lot of unrest now in South America and prove some you know, political uncertainty in Brazil. Is any of that showing up in the numbers? Yet?

Are people avoiding some of these South American destinations? Yeah? Absolutely, I mean that's that's to be honest, that's the beauty of running a global business. You always have a few markets where you have some turmoil, um and and and stability is not good for travel, so you want to make sure that you can get somewhere, have a good

experience and also get back safely. Um and I mean Ukraine and Russia is obviously has been has been a very very severe disruption and it's obviously a terrible situation where you have the whole markets that that are they're not traveling and where you can't travel to. But also um disruption of some of the flight routes, etcetera. UM. On a global level, it's usually evening out. But yeah, you can clearly see the immediate impact of a crisis

of our uncertainty in in any given regional country. Accell. What about Europe specifically, which you know so well, you guys, I think your biggest chunk of revenues essentially comes from Europe.

So what would you from what you're seeing, um, what's going on in Europe and that economy specifically, Yeah, I mean it's it's Europe is a bit difficult to say because one one key, um key assumption that you need to have to to predict the year is where you go for a soft or heard landing, And the discussion in Europe is the same then in the US it will all depend on on the central bank and whether the economies will dip into a recession. UM. I think that the hour of view on Europe is slightly more

negative than the US. So we think it's it's more likely that you will have a hard landing than a soft landing UM in the US. But even in that scenario, we do expect the overall travel span to be up. So actually, any big plans for three, any any changes coming to the company, or any expansion plans. Yeah, I mean you always have to have to have plans, and I guess you you always have to prepare for, you know, the even difficult times and and think about the opportunity

that's arising from it. So the the plan or the initiative that we are most excited about is our direct

hotel initiative. And the reason why that is is UM, when you think about the online accommodation industry, UM, we think that the biggest opportunity that is that is out there is to connect travelers directly with hotels UM and allow have a list in a very convenient way to book all the potential hotels directly from one side, UM interacting directly with the hotelier, and for the hotelier to interact directly with the the traveler and customize their offering,

whereas most of the bookings are either in a very inconvenient way where you go to the hotel website directly or have to call them or are going through O, T, A S. And UM. Yeah, I mean that's why why we have been pushing UM quite aggressively now in in a test markets are coverage of direct hotel access UM. We are now at fifty and we want to reach

eight percent by end of the year. And we do believe that by offering this direct booking UM functionality on our website, we complement our existing offer and and can serve your travelers even better than we have done in the past. Axtell help me out there. How does that not kind of compete with what you already do? Yees?

So it's a bit different. Yeah, So our research shows that twenty of travelers do want to book direct and the other eight I mean want to book direct in certain cases and UM I know, I'm just thinking about myself when when my children were young, UM, I had to book direct because I needed to adjacent rooms, which I can't really book through an O t A. Whereas when I was traveling for business, UM, I and a lot of cases just went through an O t A.

It's easier to to cancel, it's easier to actually rebook something else. So it's really it's it's complimentary to what we are doing already. It's it's just making sure that for every UM specific situation and for every trip, we can serve the travelers as as well as possible. Excel. Uh, spring break coming up, I've I've got a college daughter is very excited. What are you thinking for springbreak? Easter season? UM? Is it boom times in the travel industry again, I

know that's a very busy time for you. Absolutely, yeah, for sure. So if you find a good deal, you should lock it. UM and you, I guess you have the usual suspect Vegas on top of the list. But what is interesting from a US perspective that UM some of the international destinations have actually made it back into the top ten. So London, Paris and also Tokyo are back to back to the spring bank destinations. Hey, just quickly thirty seconds. Any signs of recession out there? Uh no,

I don't know. Not from our perspective, we think stopped landing, stop landing really wild? And you are you getting all the workers you need? Another twenty seconds? Um, yeah, for sure. We've got a global brand recruit for globally and not in Germany though. You have to go global. Yeah, no, I remember you always talked about that. Hey, Axel, thank you so much. I know it's a little later where you are, and we really appreciate you joining us on

this Wednesday. Axel, he for He's the chief executive officer over at Trovago, joining us from Dusseldorf, Germany. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Easter on Bloomberg Radio, the Bloomberg Business Band, you two. You can also listen live to our flagship New York station, Just say Alexa, play Bloomberg,

E Loove and Dirty Ian. One thing that we've been talking a lot about robots, and I think this all has to come with so much attention being paid once again on artificial intelligence. We're gonna talk about that in regards to Microsoft a little bit later on, but we're just talking about robots getting smarter, what it means for our jobs, what it means for our world at large, and so, um, we did want to get into it because a certain Bloomberg Opinion column definitely caught our attention.

Let's bring in Beth Coitch. She is, um someone who covers corporate America for us here at Bloomberg Bloomberg Opinion specifically, and she's here in our Bloomberg Interactive Broker's studio. Beth, I do feel like all of a sudden, AI, artificial intelligence, it's the new World's a girl, if you will. And so now we're like, oh my god, oh my god,

what's gonna happen to our world? Um, In terms of the corporate world, AI still is already a big part of what goes on absolutely, and we've seen this for a long time and human resources already, right, AI is part of training, it's part of recruiting, it's part it's part of hiring. UM. So I think how explained to us how that is. Well. For example, if you submit a resume, you might have a company might have a

system where it goes through and finds keywords. So if you have those keywords, you get passed onto the next level. So so we've already seen it sort of infiltrate parts of the process. Well, you know, I'm picturing this Arnold Schwarzenegger terminator coming to UH to fire me here, Beth. But you know, how would it work? Would it be a similar type of thing, just somehow the AI is able to assess your performance better than a human, or

assess more employees in bulk better than a an HR manager. Yeah, I mean I think it's we have to be careful here. I don't think you know, an HR manager is going to push a button and now will come the pink slips, right. I think it's going to be a similar thing where it will scan and maybe do a first pass, and then a human will hopefully make the decisions. Of course, I'm sure some companies will try to rely solely on AI and algorithms. I'm not sure that's the best idea.

I have to say. When I was reading through your story, one thing I thought about when I did a deep dive on UPS a few years back. Um, excuse me, and I went out with the driver and you know, they're inputting data, picking up packages, delivering packages. I mean there's a lot of information about that individual's day in terms of how productive they were. And I do wonder Amazon's using it as you highlighten your story, like how that data could potentially be used in terms of assessing

the value, you know, the value of a worker. I mean, that's a really good point. Hourly workers have already been managed algorithmicically for a long time. I think what we're seeing now is whiters of output and stuff, right right. I think we're seeing a shift now to office workers. Right. We have so much more data on how people perform their key strokes, their mouse clicks, and I think that the data wasn't there before. Going to raise a journalist

right right that? Sorry, sorry, keep going, keep going, Yeah, But I do think now that the data is there, it's going to start feeding into some of these automated decisions. I'm on the radio. That's why I'm not writing stories today. Right. My boss is if any robots are listening, that's my story.

I'm sticking with it. But that's you know, I picture investors out there thinking, all right, AI is coming in HR, how do I invest in that who are there sort of third party software companies will be a Google, a Chat, GPT, like, is there anyone sort of taking the lead as a vendor for this type of product? Well, you know, it's interesting because I do think that we're the forefront of this is going to be tech companies right we they're already using it. I think a lot of them have

their own technology. One thing is, I don't think a lot of companies really want to talk about this. You know, there's it comes across as the kind of callous um and so I do think surveillance so much right and I there will be pushed back from employees. We're going to see that eventually, if we haven't already. So I think that there there is going to be caution and weariness here about talking. It's like with hedge funds that use AI too. It's like fight club. The first rule

of AI is you don't talk. I'll talk about how you're using it. You don't want to tip your hand. I guess no. It's a really good point. Um, And what kind of advantage is I guess it particularly gives who's ever using it? You guys in your story, um that you include a lot of a few surveys about what HR leaders say they will use it for. Is

there some kind of big takeaway? Well, one of the big takeaways is something like nine of HR leaders said that they will rely to some extent on on software and algorithms if they're making labor cuts in processions, so we know it's going to happen. The other stat that stats that are kind of interesting is that they don't necessarily believe that it will make the right decisions, so they'll they say they're going to use it, but they're a little bit hesitant. So I think that's something that

we all need to to keep in mind too. Yeah, do you think they'll still always be some sort of human element involved? You know, maybe AI spits out plenty names that you can perhaps lay off, and then a human goes through and sorts through. There needs to be um. I make the point in the column that human resources is about humans and we need to keep that in mind.

I mean, a layoff is one of the most traumatic things that can happen to a person, and it's kind of unfair to turn that decision completely over to the robots. But I always think about, right the filtering of data is only as good as the inputs of data. And this is you know, we talk about it. I'm sure you do. You know the just concept of bias, yes, and data that's put into whatever group of data points and then your outcomes are going to be biased if

the data is biased. So that's something that they've got to be thinking about, right, right, bad data and bad data out and I think people might believe, oh, this is a fairer way to do it, right, this is just based strictly on numbers. But we know that AI has the potential to encode bias. We've seen a lot of examples of that, and I think we're not going to get rid of this problem, right. We have to be careful and wary of that. Yeah, it's funny. I

was talking to less Matt Partolini. He's works for Spiders, the E t F company, and they have an AI H E t F that basically scours thousands of SEC filings, annual reports, proxies, whatever, looking for certain things. And he said, there's there's a concern about companies starting to to sort of game that process, like they know what words the robots are looking for, and they'll start, you know, inserting

them into their earnings, calls into their statements. I wonder, you know, it's when I wonder when we get to that point where sort of the employee starts to you know, get ahead of the AI. I guess we're you know, probably too early to say when that's coming. But do you think that's af fector at all? Yeah? I do, And I think the bigger risk might be though this the bias piece right where we where we just talked about.

There's a really interesting example that a couple of people pointed me to have Amazon trying to create a system where it could it could find can't job candidates that it felt were going to be the longest, and it was based on historical applicating job applications. Most of them, not surprisingly we're talking tech, we're from men. So the system penalized women who applied for jobs. I think that this is you know, wait, how did it penalize them?

Because because it was looking at past applications, it saw that most of them were from men. So when it was kind of calculating going forward, it was like most of our successful job candidates have been mailing. So women were penalized and as part of the process, but to speaking to what you just said, Mike, like you think about it in the future, like when someone is filling out a digital jobs application, do they put certain keywords in there to trigger, you know, being caught up in

a job searching. I bet that's already happening. I bet that's already You can put your name is Carl Masters right, Oh my god. That reminds me of grade school when people winter, so that your teachers would call me Carl and I'd be like devastating. Um, how do you think about AIM more broadly in terms of the workforce, because I do think or just the word environment, I think we're all jumping on it and thinking about kind of

those dystopian movies that are crazy. But I love that you remind us like we've been using it for a long time, Mike, As you say, the Investment space has been using AI. So how do you think we have to be smart about it when we use kind of throw this term around. Yeah. I think that there is a misunderstanding about what AI is, what it can do. And one of the things I liked about this example, this this column is that I do think there are some things that only humans can do, and it's part

of that interaction. You know, again, the workforce is a human thing. We can't always we don't always know how our decisions are going to play out long term. Human intuition still plays a role. Well, and it seems like you know, AI has been around for a while now, companies are using it in various functions. But this whole chat cheep et thing really seems to have accelerated the conversation. You know, it seems like this just a little bit, you know, but it just seems like such a leap

in innovation almost over night. Is that? Do you think that's a misperception? Is it? You know, just the fact that this thing launched. Um? But really, you know, it's it's not as big of a leap of innovation as it looks like. No, I think it is a big leap, And I think that is where we are talking about this so much. Somehow I managed to not mention that in my column. I should get points for that. But

I do. I do think that people, if it hasn't been on your radar yet, I think it is now um, And I I do think we're going to see people closely watching what's next. Well, it's that it's the deep fakes, Like there's all of a sudden a lot of reporting on that, like just this ability to make things look so realistic in our world and how it can be misconstrued or just false information getting out there right. No, I agree? So, Um, robot pinks lips? Are they coming?

Hopefully not? I'm stealing your term from our our Ariagami who was saying it. Wait, is you know? Is that just around the corner, robotic pink slips? Um? Beth really appreciate talking to you because it really just fits into this bigger, broader conversation we're having. Beth Coitch is your columnist to Bloomberg Opinion. You can check her out on Twitter and also check her out at Bloomberg dot com and on the Bloomberg A little bit more, you're listening

to the Bloomberg Business Week podcast. Catch us live week days from two to five pm Easter on Bloomberg Radio, The Bloomberg Business and and you too. You can also listen live to our flagship New York station, Just Say Alexa play Bloomberg e Love and Dirty. As you know, Mike, you know Valentine's Days next week? Whoops, be your well that day along with Mother's Day are two of the biggest for the flower industry, which is why we wanted to check in once again with Christina's stanbl founder and

CEO farm Girl Flowers. She joins us in our Bloomberg Interactive Broker studio based on the West Coast, but here in New York. So great to have you here. How are you. I'm good, Thanks for having me back. It's it's great to be in person this time. It's so great. I mean, we've talked to you, like throughout the pandemic. Um, how does the world feel. Does it feel like we're

over the pandemic? Comp has your world sort of? I mean, I feel that there's residual effects that are still like, you know, impacting supply chain and transportation and things like that. But really I think we're holding onto, you know, getting as much money as you possibly can in those areas, and you know costs, you know, costners have not come down yet. Um, so I think that will normally next twelve months and come down at all a little bit, but definitely not where we were hoping to see them.

So I think that this this next year is going to be really transformative that way, and kind of normalize a little bit more. You sound like Jay Powell. That's what I said. It's maybe yeah, well he was saying like maybe it's wishful things. You know, Christine, It's funny. I'm here. I'm a father, husband, father of three girls. So I've got certain occasions where I buy flowers right once when I get in trouble, obviously you know which

so reading those cards. But the other is Valentine's Day and the other was you know, Theo's Daddy daughter dances that all got canceled during the pandemic. So I've missed your visitor in the pandemic days. How bad was it? Did you lose a lot of suppliers? I mean, I feel like the flower industry especially must have been really hard hit. Yeah it was. We actually benefited, though, I have to say, and I felt a little smarmy even

saying that early on. I mean the gifting segment in general, and we were definitely in that that space really benefit from the pandemic because everybody were sending gifts instead of being in person. But that the flowers, yeah, thank you.

But what that did was it created you know, we all had to build infrastructures that we couldn't support later on, so we you know, turned off marketing and you know, for ten and a half months, we just turned it off and we still did a growth, you know, and then one came and I always said, oh no, when vaccines become readily available, I don't know what's going to happen. I know something big is going to happen, but I

don't know how big it's going to be. And we just built this infrastructure, you know, that we couldn't support any longer. And so then we had to rethink everything and be like, oh, you know, now we have to right size the business, which is like the dreaded word right And so then we had to do that. And then you know, last year everybody thought, okay, it's over, and it's like I can't wait until it's finally going

to be over. Nope, not over, huh nope. So then you know, we have like transportation costs that are like you know, all the ancillary fees on top of ancillary fees on top of antler fees, and we have like containers that can't get there, and you know, flowers they can't get there on time, and flowers and number one thing you have to get them there quickly, and so

not be able to get them there quickly. And then we had one month where like over half of our orders weren't delivered on time and it resulted in like five and a half million dollars of losses. And I mean things like that. It was just constant. And so this year we're like, you know, now we're in a down economy and I'm like, oh my gosh, this is ever going to really end. I don't know how to

feel to own a business that's great, everybody should do it. Well, I'll say, as when you're a husband in trouble, those delays are no good. You need it like some You need it like yesterday for that because did to go back to some of the inflationary pressures. Because this is something we talked with UM, a person in the trucking industry. We're trying to really get a good feel. We've talked with chefs and while things have come down, they do

talk a lot of that labor costs still are pretty high. Um, you said they've come down a little bit, but it's still your supply chain. It's still kind of expensive. Yeah.

I mean, we're at the size of a company that we don't have the buying power that a lot of large companies have, and so I'm sure that they're they're seeing it come down much quicker than companies, you know, the medium size small medium companies are just really you know, the last ones to see those savings because we can't go and say, like we have you know, two hundred million dollars of buying power, you know, and go to

the transfiaction companies that way. But so it's coming, but then it's also being offset by higher labor costs and things like that. So it's just, you know, we want to be able to to show our customers and have our customers realize these savings. And we every time we think we're going to be able to lower our prices again, it's not. Then it's just, you know, we're dipping into our margins again. Can you find all the workers you

need and want? No? Absolutely not. So. UM, you know, we've been very creative about how we do that, you know, with partnerships with farms, um that are drop shipping for us and things like that. Um, it's just you know, it's really hard wage level employee, you know, labors really hard in the United States right now, does it feel like we're at the beginning of a down economy? You mentioned you know you're prepping for down economy. Is it's starting to feel like that for you for it's felt

that way for a while now. I think we've you know, I definitely think that we've been there for a while. And nobody wants to actually call a spade a spade because demand is less, demand is far less, demand is far less. I mean, you know, we're discriptionary. I mean, like it, flowers are not a necessity even, you know, food seems even food in the gifting space, chocolates off

like that feel like more of a necessity even than flowers. Um, I kind of agree with that, you know, the sweets and things, but um, you know, we're just you know, we benefited at times where you know where it was, you know, gifts were sent a lot, and then when you know, the economy goes down, people kind of tighten their belts a bit, and things like flowers don't seem as much of a necessity. And the great thing is where a bootstrap company and we spend less today all alone. Yes, absolutely,

and so you know we'll get through it. I'm a hundred percent sure, we'll get through it. Unlike some companies that you know, I'm really feeling for that are reliant on raising capital right out and money is really expensive and things like that. You know, we've always done this, done it this way, and so we'll get through it. It's but it's gonna be tough. It's gonna be another tough year. Well in terms of then growth plans, what do you do? Do you put things on hold? Um,

we really change our focus. So and I started this early, and I'm really glad that I did. UM and it panned out when I was it doesn't UM, but you know, we really I switched our focus from growth to profitability and so and I did that seeing what was coming ahead of us. Are you not profitable? Before? We always had to be profitable to a point. The thing that I said is the only way that we're like Amazon is that we ran as close to zero as possible

and then reinvest the profits back into the company. So there were many times were like one percent profit and things like that. Um. There's a lot of sleepless nights before payroll for me in the last twelve years. UM. So we really focused on having more of a cushion and I'm glad we did that, and so we really we we did things that actually cut our revenue, and we knew it would cut our revenue, but it made us financially just healthier as a company. And so that's

we're you know, going through this with that mentality. We're not growth at all costs. We are really maintaining a healthy, um, you know, a healthy stance and where we want to be. Well, I have to say what I love about you, and we have some flowers and I think our producer Aerielhead took a picture for those who are watching on YouTube and on our streaming service. Um, it's just organic and it's just beautiful. Twenty seconds left Valentine's Day. We can

still order, yes, absolutely might get your order. Yes, yes, get your orders. Are still we're still taking orders right now. So let's go to farm reel Flowers dot com to placers now. We love flowers. Um, Christina, thank you so much, good luck, look forward to catching up with you in the future. Christina Stable, founder and CEO of farm Girl Flowers. You can find them on Twitter at farm Girl Flowers. And you are listening to Bloomberg Business Week, Carl Masser

along with Mike Reagan. And this is Bloomberg Radio. You're listening to the Bloomberg Business Week podcast. Catch us live week days from two to five pm Easter on Bloomberg Radio, The blue Berg Business and and you too. You can also listen live to our flagship New York station, Just say Alexa, play Bloomberg e Love and Dirty. Alright, you watch the Super Bowl and you know what's always kind of a staple when it comes to the commercials is

bud Wiser. And that's an old Budwiser commercial. Does that bring familiar to you? I haven't heard that one. I recognize that it's an old right, Paul. It's an old one. Seventies. Yeah, that's an old one, Paul. It's going back a little bit. All right. Well, the big game is this weekend. Will it be the Eagles? Will it be the Chiefs that take on the Lombardi Trophy? Time will tell. But already a winner is Fox, which sold out of its in

game ads, some topping seven million dollars. With more on it, let's get to Bloomberg News Media reporter Jerry Smith here in our Bloomberg Interactive Broker studio. UM Good to have you here with Mike and myself. That sounds pretty optimistic, pretty nice. Yeah, this is there was a lot of uncertainty obviously coming into the Super Bowl. With the economy. We've seen a lot of advertisers pull back their budgets. But you know that certainly didn't dissuade a lot of

advertisers from spending on the Super Bowl. It's funny, right because on the mobile, the social we've all been worried about advertising, but not for the big game here. Yeah, I mean, it's it's the power of live sports, and advertisers are still willing to pay upwards of seven million dollars for a thirty second ad because this is the largest TV event of the year. You're talking about getting your brand in front of over a hundred million people.

People watch the commercials for the Super Bowl unlike a lot of other types of programs, and I don't go fast forward. I gotta say, as a lifelong Philadelphia Eagles fan, just this conversation alone is making me anxious. I was trying to pretend this game actually wasn't try it'll help, but cherry is that? Is that what it's all about, the fact that the Super Bowl is the one thing you can't fast forward or watch on demand. You know that this live advertising, this is sort of the last

bastion for for live advertisers to really make their statement. Yeah, if you if you look at it. I mean, one of the craziest stats you'll see is UM last year, over a hunt, the top one most watched shows on TV, I think ninety four of them were UM sports. Uh, and the vast majority of those were NFL games. So, you know, you think about your dramas and your comedies and how they've increasingly moved from cable to streaming services. Uh, live sports is still UM. You know, it's still really dominant.

It's expensive though, right for everybody who wants to air it. It's it's expensive for everyone involved. I mean, the advertisers, uh, certainly for the Super Bowl are paying top dollar. These TV networks are spending an enormous amount of money acquiring the rights to these games. Uh. So everybody's spending more UM and it's But the important thing to think about is the entire cable TV industry really depends on live sports. A lot of the people who still subscribe to cable,

who are not the cord cutters are watching sports. So you know, if these TV networks, the day that an Amazon or an Apple years from now starts taking exclude of rights to some of these big events and more people cut the cord, the whole industry is really going

to be It's almost like a dominoes. I want to go back to the ads in a in a moment, but let's just stay here with the sports rights, because you know, we are increasingly seeing the streaming companies, you know, pay up or want to have those exclusive sports rights or or will it be exclusive at some point or will it be where they show it, network show it, Like is it going to the point where streaming has

it only? I think we're years away from that. I think the NFL is the best example where the NFL did deals with the big TV networks the NBC, CBS, Fox, at ESPN, and so they have the rights for the next decade. But they also did a deal with Amazon where Amazon had the exclusive rights to Thursday night football. So if you think about some other sports, the NBA now is in the process of renegotiating their deal. Currently it's on T N T and ESPN. Could potentially an

Amazon or an Apple get some of those games. Um, that's a really big question in the sports media industry, and it's for the averag consumer. I think you're looking at a future where you have to have cable and you have to have multiple streaming services if you want to be able to watch all the sports that you want to see. Yea and Cherry. Obviously, last year, the crypto ads were the big buzz. I'm assuming uh, not

so much this year. But is there any sort of growth industry that you know, pops out as as buying a lot of ads this year? You know, I remember back in the dot com day there's always the funny trade ads and stuff like that. Is there something to take that crypto place? Yeah? I think what's really interesting is that this is going to be the first time in more than three decades that you're gonna see Super Bowl ads uh from alcohol brands that are not uh

Anheuser Busch InBev Um. It was really interesting to find out that they had the exclusive rights to be the alcohol brand for the Super Bowl since back since nine. They gave up those rights in June, So now you're gonna see ads from Molson Coors, which owns Miller Lte and Chords Light. You're gonna see ads from for Crown Royal Whiskey. Um. So you're starting to see more more alcohol ads this year. No other alcohol that ever were

shown trying in a national super Bowl ad. There was that they had Antezard Bush and they're famous for their ads for the Super Bowl that you think about the Gladesdale as you think about the uh, the Frogs. I mean there's there's their classics, but they were you know, they had the exclusive rights to be the you know, the exclusive alcohol brand, and that's over now. So you're

gonna see more alcohol brands. You're certainly not going to see as many crypto ads as we did last year when there were so many of them, people called it the Crypto Bowl. Um, Tom Brady, Yeah, crypt But I think you're gonna I also think you'll see a lot of the same players that you see a year after year. That Derrito's ad, the Pepsi ads, You're gonna see a ton of celebrities, which is pretty standard, and it always seems like, you know, the creative departments behind these ads

are at their peak, you know, creativity for these ads. Uh, A few have come out already. Have any catch your eyes as especially entertaining so far. Yeah, I mean these are this is if you're a creative UM, if you're an advertising agency, this is your big moment um. You know. One thing that is particularly interesting is this idea of UM live betting. UM. There's a lot of sports books

that are DraftKings and FanDuel have ads. And one thing that's particularly interesting is Rob Gronkowski, who was a tight end in his playing career. He's now retired. He's going to be kicking a attempting to kick a field goal uh live uh during the third quarter during a commercial for Fan Duel. This is part of this marketing campaign that they've had going for several weeks, and you can bet on whether he makes the kick or not. UM. And it's it's live. It's it's not a taped commercial.

It's happening live. So that's kind of an innovative way, UM, you know, to do it. There's you're gonna see a lot of these partnerships. One is Netflix and General Motors, where you're gonna Will Ferrell he's gonna be appearing in UM episodes of Bridge or Tin or Squid Game, and he's gonna be driving electric vehicles that of General Motors and that's an interesting partnership. UM. So that's another thing that I've I've noticed is just these companies that are

teaming up in their commercials. We're gonna we're gonna check in actually, um with the CEO of Hotel Planner in a moment and talk about lining up a hotel if you still want to head to the big game. UM. Travel companies not so much this year, That's right. I think you're gonna see fewer travel companies. And I think that's a reflection of a sign of the times where uh, you know, customers are people are dealing with inflation, and people are just you know, have less money to spend

on travel. Um. I think you're going to see fewer auto commercials than you have in the past. Uh. Those can be for various reasons. Um, but yeah, it's it's gonna be um. Fox as much as people. You know, there's a lot of concern about advertisers pulling back their budgets. Fox said that they didn't see that much much of that. Um. The Super Bowl still dominates the media landscape, and you know, advertisers are still wanting to pay a lot of money

to be seen on there. I'd hate to be the poor m I t grad at traff Kings or Fandel that has to set the money line on Grand Kit In that field goal, what do you think, Carol? I think called make it. I don't know that's that really his I want to say, it's like a twenty five yard field goal. And he's been training with um, you know for weeks, uh with Adam Vinit Terry, So I mean, who knows you might get the job with Dallas after

after that? Oh my god. Paul Brandon's like um eminem and the spokes candies are they going to make an uh an appearance? Do we know? You know they pull those spokes candies And we were all trying to figure out is it a Super Bowl campaign? That's a good question. I mean what's interesting is that almost all of the commercials are released weeks in advance or days in advance online and the idea is to try and drum up

as much conversation as you kind about your brand. But there are a few companies that are advertising that are going to be surprises. So I guess we just have to watch and tune in. Yeah, remember like when Mr Peanut like just the rest in peace and that's that's right. But it was all all of uh. It's a fun part of the game. And we'll I'll be watching. Jerry, thank you so much. Erry Smith. He's media reporter at Bloomberg News here in our interactive Broker studio. Find him

on Twitter at Jerry F. Smith. Are you are listening in watching Bloomberg Business Week and this is Bloomberg Radio. You're listening to the Bloomberg Business Week podcast. Catch us live weekdays from two to five pm Eastern on Bloomberg Radio, the Bloomberg Business app, and you too. You can also listen live to our flagship New York station, Just Say Alexa,

Play Bloomberg, Elove and Dirty. We also wanted to bring to you someone we caught a went back in December when we were live on the Stanford campus to mark the Stanford Graduate School of Business, big name once again by Bloomberg Business Week is the top NBA program in the US. We had a conversation live on air, and we knew Tim we wanted to talk a little bit

more with him. It's PAULA. Wayer, Senior Associate Dean at the Stanford Graduate School of Business, Professor of Economics, also the author of an Economist Goes to the Game, how to throw Away five eighty million dollars and other surprising insights from the economics of sports. He joins us via zoom from Stanford, California. Professor, are good to have you back with us. How are you great to talk to

you again. Thanks for joining us. We we promised we'd do more with you, and we're eager to have you back this afternoon because we got so much to talk about, especially with regard to your book. But before we get to your you know what's in the book. I want to know what got you to write this book, Like what was the number that you ran across that this light bulb went off in your head and you said, Okay, there's there's so many inefficiencies when it comes to the

way that people think about sports. It could fill a book. Yeah, I that's I don't think there was any one moment, although if maybe it was thinking about kids sports the first chapter of Youth Sports, which um may have been what really drew me into this, having kids and taking them to do sports and thinking about whether that was a good use of resources or not. So I think

that may have really gotten me into it. Also, when I started the book, my son was UM in college and he helped me with a lot of the original research. There was a good chance for us to work together. He doesn't have much interest in economics, but he has a lot of interest in sports, so so it was a good chance to get to do some spend time with him while calling it work. Is your kid a pro athlete? Sorry? He was on the Gun High school baseball team. The reason I ask is because the first

chapter is should you help your kid become a pro athlete? Yeah? You should not. UM, Well, it depends, that's where the chapter is. It depends. But for most kids the answer is no, you don't want to. UM. It's not the best use of funds to try to help your kids become a pro athlete. It is kind of shocking, though, I have to say, I remember we talked with you.

That really resonated with me, because you know, I've seen it in people I know where they're like Johnny or Susan they're gonna be the best and they're gonna go pro o and da da da da da, and they never do because the odds are stacked against them. And I just find it interesting. Well, it is troubling if you give up other things. So if you sort of do it as I'm gonna learn a lot, I'm going to really focus on sports and that will help me be more disciplined and other things that might come out

of it. There's not a lot of evidence that that helps you in the labor market later in life, by the way, but at least if you don't go all in, you can see the argument for it. What if it helps you get into college, that is a big So I think that if you're going to make the case for if you're going to make the case for investing in your sports career as a kid, I think you

need one of two things. You either need to argue it's going to help you get into college, And one of my economist friends says, if you're going to do that, you should get your kid into fencing. The fencing is a particularly good way to help you get into a good, uh and elite college. So getting into college is one thing, and in the book I go into that. Of course, it's it's hard to even show a lot of evidence that that there's a big advantage to that, because, um,

it might get you into a slightly better college. But economists generally aren't sure that the quality of the college on the margin makes that much difference. So if the same kid goes to Ohio State or Harvard, it's not a complete given that it has a big difference on their outcomes. And yet you do say, what if your kid is Kevin Durant. So that's the other So I

said there were two reasons you might do it. One is college and the other is if your kid is six ft eight and very coordinated at age thirteen, then the odds changed dramatically. Um. So Kevin Durant is a is a wonderful example that I go into in the book because he has a bunch of He has a bunch of things in favor of him becoming a star. One is, well, the reasons he became a star with his physique, just the fact that he's such a gifted athlete.

Andy happens to be six ft eight inches tall as as they as the basketball players say, you can't learned taul. So he had that advantage going him. Um and then um. But the other thing, the other thing about Kevin Durant is the calculus is slightly different if you're if you come from a background where your labor market prospects may

not be as great. And so, given how hard it is to move up the socio economic ladder in the United States for you know, reasons you've probably talked about on your show before, the economic mobility isn't what we would hope it would be. Um, and so if you come from a really tough background, sports might be looked like a better way to really jump to a higher income distribution relative to more traditional ways in the labor market.

And Kevin Durant came from a very humble background, and and um, you know, if you just sort of statistically looked at what is future might have been like without sports, it may not. You know, it wasn't a rosy picture. Yeah, I think of like you know, Venus and Serena Williams. I mean, and they obviously had a dad that was very driven, in a family that was supportive, and it

was a tough background. But it's you know, you wonder how much of it is it because of the dad and pushing them, how much of it was just you know, natural skill. I mean, there's a there's a lot that has to be taken into considering. Can you answer that professor that you know the nature versus nurture debate here, Well, yeah, I mean, I think it's easy to answer it in basketball because the answer is, if you're six ft eight, your odds of getting for the NBA are just like

wildly higher than if you're six ft tall. So in the book, I talked about Russell Westbrook, who went as a kid into much the same investment mode as Kevin Durant. His family went all in on basketball, and of course it paid off for both of them. But if you looked before they made those investments, Kevin Durant probably made a rational investment. Russell Westbrook probably got lucky, meaning a six There are tons of athletics six foot kids, and the vast, vast majority of them never get to the NBA.

There are not that many six ft eight thirteen year old and a substantial fraction of them get to the NBA. So Venus and Serena again probably obviously worked out amazing. But if you were to try to run the numbers, was that a good investment beforehand? I think you would. I think you would have to say it wasn't. But it just paid off. It did end up paying off really well. Obviously we're gonna go into more chapters. Just got a minute before we have to take a break

and then we'll come back and continue. But as someone who is Czechoslovaki and I love this chapter two, what do Silicon Valley and Check Women's Tennis have in commons? So you've got a minute to talk about it. Then we'll talk some more. But what is the connection? Just quickly, well, very quickly, I like to say, um, check women's tennis

is this is like uh, Silicon Valley. There's not a natural reason why check women should be so great, but there's a combination of historical accidents and then these network effects where the Check women sort of push each other. Check girls push each other so hard that they end up becoming just great tennis players. There's no natural reason they should be any good. You know, if you look at why are Norwegian so good across country skiing as you do, as I do in the book, there's a

lot more of a natural reason for that. But economic networks and economic competition really can lead to dynast What about the weather as well, Well, the weather doesn't work for the Check story. It's the Norwegian story. I know what the answer is because my family is two kids that check women were strong like bull So that's why you know, I'm just kidding. I'm just kidding, But we did used to say that at home with us. Paul Ayer, he senior Associate dean and economics professor at the Stanford

Graduate School of Business. We're talking about his book and economist goes to the game how to throw Away five eight million dollars and other Surprising Insights from the Economics of Sports five eighty million dollars. Wait, wait, where'd that number come from? So that's an estimate I calculated based on the strike at the NBA, and I believe it

was two thousand eleven. So, um, there was a maybe a more up to date version to talk about was there was a strike in Major League Baseball at the beginning of the most recent season, and if you remember last spring training, not a strike. Sorry, I lock both cases. It was a lockout, not a strike. So the point in whether talking about the NBA or Major League Baseball or whatever, is you see in sports, and this is

a broader thing. You see it in other collective bargaining agreement situations where um, you get these two these two groups in the case of sports. It's the owners and the players union, and they rely so much on each other there their options are so much better if they work together than if they split up. But at the same time, they can't help themselves from trying to steal

a bigger share of the pie. It's a It's a very common thing in economics where you have these bilateral agreements where there's a lot of value captured by the by the agreement, and you don't want to mess it up, but at the same time you can't help but try to take too much, and when that leads to a lockout, as it did in the NBA, it's sometimes it's just like literally, the NBA and the players pretty much just burned a pile of five million dollars that they'll never

get back. Okay, it's a lot of money. I want to I want to talk cheating. I want to talk cheating. Okay. There's an entire chapter in your book dedicated to cheating, and it talks about Lance Armstrong and the way that it asked the question about whether or not you can actually win the Tour de France if you're not doping. Um, take us into this chapter and why athletes cheat, so um, they they You only got half of it. I like to think that chapter is about why they cheat and lie.

Oh sorry, excuse me, said they cheat and lie because the incentives there are very strong. I mean we see this in other places as well, when when we set up rules that we can't enforce and the value of breaking those rules is really high, people are going to break them. And it's sad because that's human nature, but

it's what we need to expect. And you know, if you there was a period of time, I don't know, maybe the testing is better now, but there was a period of time where you had to cheat to whin they to win the toward to France and to win certain sprinting events in track and field. It's just every single person who won over a long period of time and both those sports was taking steroids and lying about it.

And what the reason it happens is, it's just simple prisoners dilemmas, straight out of your most basic college game theory class. If you don't cheat, there was no way you were going to win, and the incentives from winning were so are so large. I mean, think about it, what was Lance Armstrong going to do if he wasn't a champion biker. His next best option was not making a little bit less than he made. As are you see the ends justify the means. Well, I'm not saying

this is an advice. This is um you know, it's descriptive. It's not prescriptive. I'm not telling you to lie ar cheap, but I will tell you that in situations like the Tour de Front, you have to recognize that your opponents will be cheating, and so you do have to think about that. It's interesting though, because it's not just kids around the world are not listening to me. But what I think is pretty remarkable about this is is it

is just numbers at the end of the day. Because there are downsides to to pumping your body full of these bad substances. There are downsides to uh blood transfusion that you do on the road with blood that you know was taken from your body uh months earlier when you weren't so tired. I mean, bad things can up in to you. Yeah. So, so keep in mind that

not everybody will lie in cheat. A lot of people who could have been great bikers will see that the only way they can get ahead is to lie to cheat and they take and they have they place a high cost on the things you just mentioned, either the long term damages or just they have moral qualms. They're like, I can't do that. And so for those people they put it into their own personal calculus and they say, I'm not gonna lie in cheat. Now they don't become

um famous famous um bikers as a result. So it's absolutely the case that there are cost to this and a lot of people just opt out of the system when that's the case. Hey, one thing I want to get to and maybe because we were all obsessed with Taylor Swift last week and you know, trying to get tickets for a concert, I couldn't get one bummer bummer.

But anyway, we're looking at you know, um getting tickets for for things, and I'm assuming sports games as well, especially when you know, we get to something like the super Bowl or the playoffs, things get a little pricy. You have a chapter that talks about ticket scalpers making the world a better place? Is that a question mark? Are affirmative? Well, I mean I wouldn't say that about every single ticket scalper, but as a collective they do now, not the not the ones who go out and use

bots to and and make every waste everybody's time. But the traditional ticket scalper, the old days when you would go to a shop and buy and sell tickets, or go on eBay StubHub and buy and sell tickets that people just had extra tickets and wanted to resell them. There's a lot of value in that right. Just more broadly, resale markets are really good. They transfer items from somebody who values them less to somebody who values them more.

So if you have a ticket to a game and you know your kids soccer team is going to play some playoff that day and you want to resell that ticket, that is great that you have the ability to go on StubHub and make somebody's day where they were dying to have a ticket to that game, and now you're both better off. You have some money and you go to your kids game and that other person goes to the professional sports game that you sold them a ticket

for resale is fantastic. And the middle people who make that happen, which now is more stubbub but traditionally was ticket scalpers or ticket agents, those those people are providing a really valuable service. You know, it's not just tickets, it's used cars, it's all sorts of increasingly Ticketmasters getting into it as well. I mean you can you can buy and sell tickets on that platform. Yeah, and so

they're there in lies the problem right with Ticketmaster. I'm not as crazy about ticket Master and some of what's going on there because what happened is traditional ticket scalping, where you have a vibrant and fragmented market with a

lot of competition. That's good. What what gets ruined is when somebody gets exclusive rights to resale or exclusive rights to you know, Ticketmaster is now sort of has arrangements where they'll sell the ticket and you have to resell it through them, and and that I'm not as excited about because then you start having more um uh, pricing power in the part of a single entity. All right, Paul, one last question, what's the FED gonna do? No, I'm

just kidding. I'm just kidding. We're not going to talk about that. We did two segments without talking about, Hey, there there are more chapters. Are athletes worth all that money? If your hometown hosts the Olympics? This is really a fun game. A proliferation of French Canadian goalies. Um such a fun read and just plays into I mean, we talked about the business and sports all the time, and there's a lot of really thoughtful chapters in his book. Paul Oyer, thank you so much. Fun to catch up

with you again. He is Senior Associate Dean Economics Professor at the Stanford Graduate School of Business. Check out his book and Economists Goes to the Game, how to throw Away five eighty million dollars and other surprising insights from the economics of sports. Right here on Bloomberg, you're listening to the Bloomberg Business Week Podcast. Catch us live weekdays from two to five pm Easter on Bloomberg Radio, the

Bloomberg Business Band You too. You can also listen live to our flagship New York station, Just Say Alexa Play Bloomberg e Love and Dirty. I wanted to get to a guest because it was a story I think you could safely say heard around the world. We're talking about a story by Bloomberg Business Weeks Ashley Vance. He wrote it on the forty five year old Tech sent a millionaire who is spending some two million dollars a year to be eighteen years old again. In a project known

as Blueprint. We love talking with Ashley about the story and the time he spent with Brian Johnson so much so that we knew we wanted to go straight to the source. So with us right now is Brian Johnson, who is the founder and CEO Blueprint, CEO of Colonel and Os Fund, and he joins us via zoom from Los Angeles. Brian, it is good to have you here with Mike and myself. How are you? I'm great, Thank

you for having me. Well, tell us a little bit about your mission and why you wanted to do this and and I know we're kind of hitting it hard and cold. We've talked about it for our listeners and our audience before, about spending about two million dollars a year to be eighteen years old. Again, why did you want to do this? I mean that the Fountain of Youth is a story as oldest humanity, and typically the story is a group of people in a boat going to the jungle, traveling to a temple with some of

some elixir that they'll drink. And the question we wanted to pose is is a fountain of youth actually here right now? It's just hiding in tens of thousands of scientific publications and an extremely rigorous protocol, and so we

took this to the ends of science. We basically said, if we measure every organ of the body via every possible measurable modality blood, slaves, stool, m ri I, ultrasound, fitness tests, dame astilation, we look at the gold standard scientific evidence, create clinical grade protocols, and then my life becomes a perfect implementation of that what is possible with today's science. And the results were pretty stunning. Last year, I reversed my epogetic age five point one years in

in seven months. It was a world record, and I slowed the speed of which I age twenty eight percent. So generally speaking, and I humorously kind of say this, I get October, November, December for every year. Do you feel different as a result. I've never felt better in my entire life. But bright at the same time, A lot of what you're doing is sort of I don't know if you call it experimental or you know, I

hate to say. You're almost your own guinea pig. And to some degree, have there been any sort of unpleasant surprises, any bad reaction to any of the uh food You've eaten or any of the treatments you've undergone. As part of this process, we certainly have learnings all the time, and we do share exactly what we whether the result is good or bad, we share independently because the value

of this is as an open public uh protocol. The It's it's important to remember though that this blueprint is based upon scientific evidence, gold standard scientific evidence in clinical grade protocols. So it's not like we're randomly doing things or taking some obscure thing. It's based upon evidence and protocols, and so we're really following a process to say what

is possible with with what's been proven. And the thing we're doing is we no one in the world has ever looked at all the scientific evidence and created a perfect protocol, and so fundamentally what we're doing is in measuring every organ of the body, we're asking every single thing liver, pancreas, lungs, kidney, what do you need to

be in an ideal state? And that goes directly into a protocol, which means I no longer look at menus at restaurants, I don't know pizza parties at hawk, I don't drink alcohol with friends and go on bingers and say about stay at late at night. It's entirely followed. So it's really interesting question of it's a demonstration of going to what is possible today with science. Take a step back, what did it take to get this program up and running. The team is now about thirty members,

and so they're specialist. For example, I have a medical grade ultrasound machine here in the clinic, and we have a specialist that looks at the heart, another at the lungs, than another for the other organs of the body, and we build out specialists throughout the entire body through all the different measurement modalities. I do a full body m R I every organ of the body on an annual basis.

So having this kind of specialty, we're doing things that no one's ever done before, and so it's it's challenging. We have to identify the task that we have to build a team to do it. Then we have to normalize it in a protocol and so it's extremely difficult. And so I do spend a few million dollars a year on this, but I basically reduce the learning to something that anybody can implement. So you can take everything I've done. It's freely available online to everybody, and you

can implement it in roughly a month. You know, Brian, as you point out that diet element of it is obviously so important to something like this. But but I gotta wonder, do you ever just get a craving like, Wow, I could go for some pizza and a beer right now? You know, how do you deal with that sort of you know, craving that we all get. It's funny, it's gone and in fact, imagine doing that kind of makes

me sick. Yeah, so it's gone. The A lot of people think it perpetually persists, that there's this urge to eat those kinds of foods or eat uh more than like binge, But it just doesn't. It's actually reversed, and I can't imagine doing it now. Well, I mean, do you ever fall off the wagon, so to speak, whether it's in food or so on. I mean, initially, yes, I had several times where I just couldn't keep up

with the protocol. So I basically agreed, can I build a system that takes better care of me than I can myself? And so we're all accustomed to this idea that we make we have good intentions to follow certain routines, go to the gym and eat well, and then we break we have a dessert, or we eat drink alcohol, or we eat too much food or the wrong kind of food. And so the question for me was can I just sign up for a system measurement, scientific evidence

and protocol and follow exactly that? And it's been, honestly such a relief where the system now takes care better care of me than I can myself. And we see this throughout society. We know when a navigation app does a better job and getting this to our destination, we do so, and we don't use paper maps anymore. And that's what I've done, as I've shown a system of measurement, science and protocol better cares for me than I can. Brian, one thing I wanted to ask you what has been

the downside of this? I mean, do you feel like from the minute you get up to the minute and go to sleep, like you're just you know, constantly monitoring everything you know? For me, it's all fun. I think of myself as a professional rejuvenation athlete when you know, building my former company Braintree Venmo oftentimes among my entrepreneur friends, it was a badge of honor to sleep under your

desk and look haggard and go days without sleeping. But to me it always seemed been saying that you're really they entrepreneurs are athletes of the mind, and so it makes sense to eat well and sleep well. And so I've never felt better in my entire life. I love following this protocol, you know, And Brian, obviously you've got a personal motivation to make yourself as healthy as possible, live as long as possible. But I wonder, clearly there there's a business motivation too, and I wonder how you

see where you see the business going. Um, is this ready for prime times, something that you're ready to roll out to consumers? And how would it work a subscription or you know, how are you thinking about it as a business. I mean, I didn't started off as a business.

It really is an open, public, scientific experiment. And what I was proposing is that I've read a lot of biographies and I really admire people who in their time and place identify the point on the horizon that is barely visible and UH, in the early twenty one century, that could be UH neutralizing aging. If we didn't age

and naturally deteriorate and think the death was inevitable. We may have a different relationship with time, and so in the early century, I would put forward the hypothesis that the a defining moment maybe our ability to neutralize or dramatically slow aging. And that's what I'm trying to do. If I can prove this end of one and my results are stable and repeatable, it may fundamentally change how we think about ourselves and society. You know, it's funny.

I'm thinking about, you know, the news that we got about CVS doing a deal. They're thinking about, you know, kind of how to keep Medicare patients um, well, if you will, and I do think disruption innovation when it comes to healthcare. We're all trying to figure out what it really means and how do we really change the

system so it's better, cost less with a better outcome impact. So, is there you know, a way to really scale what you are doing, just to kind of build on what Mike asked you, you know, in terms of really reaching the masses so that we all live a better life, a healthier life, potentially longer life. Um and maybe with better methods and better wellness overall. Yeah, I mean it started as a science experiment and I've been sharing all of my data and results with everybody. I make the

protocol available for free. And since this viral the story went viral, wee can half ago. Uh, every single supplier we have for blueprint is sold out for months. Nobody can get anything to start this is start the program. So yeah, I mean, as of this week, we've been actually dipping our toe into exploring building a business of can we basically just solve this problem and make the product available for anyone who wants it, with the added

benefit that we incorporate the evidence. So it didn't start that way. It's kind of a problem now because people want to follow us and we want people to be even to be in the community, and they just can't do it because everyone's out of the items. Are doctors reaching out to your hospitals, our healthcare organizations, managed care, they reaching out to just say, okay, what exactly are

you doing exactly? We launched a part of this rejuvenation olympics dot com, which is a leaderboard for people who reverse or who slow their speed of aging. So I'm trying to create a sport out of this of people can be a leader in a professional as a professional rejuvenation athlete. And this creates a different, uh paradigm for anyone using healthcare where if I'm receiving the recipient of anyone services, I want to know what's happening to me overall.

I can get fifty different biomarkers, but it doesn't tell me a whole story about me overall, but a speed of aging which you can get rejuvenation Olympics does And so hopefully it was a paradigm shift for how people what people expect in exchange for health through well thees services. You know, Brian, For those of us on a budget who kind of wanna replicate what you're doing, you know, can you boil it down to the simplest of forms of advice that that you would give us from what

you've learned, Yes, it's actually very simple. Number one and most important is stop self destructive behaviors. So that is eating too much, eating the wrong foods, drinking too much alcohol, smoking the stuff we all know we don't want to do, we do it anyways, So stop that as much as you can. Number to eat more vegetables, berries, and nuts,

three prioritized sleep, and four exercise. Just getting those basics in place, a person can get the majority the benefits um and again it's go please go ahead and the end. The entire protocol is available at no cost on my website blueprint dot Brian Johnson dot co. So, uh, feel free to look at all my data, look at all the protocols. There's there's even links to products we use. Again they're out of stock. But you get the idea of everything is there? Is this your Is this your

way of life forever? Now? I think so? I mean, I've never this is the whole thing. It's so interesting to me. Is a system now takes care of me better than I can take care of myself. And I it's uh, it's not exciting to think about will be back in charge of myself again? You know, I don't. I didn't do a great job. And I think most of us would acknowledge we don't do a great job taking care of ourselves because it's very hard, you know, Brian.

One of the things that Mike was pointing out, he said, you know in the story, because we're talking about your pale, you look great for those who are watching on YouTube and and our Blueberg original streaming service. But you stay out of the sun, correct, Yeah, A lot of people suggest I look like a vampire, so I need to get extensions to you know. No, but I think about you know, I remember going to pediatrician and then say at my PEDIATRICI and be like, make sure your daughter

when she was young, get some sun. You know, obviously not in the middle of the day when it's the hottest, but kids were being you know, so much sunscreen and being kept out that their vitamin D levels were low. So I am curious, like, what were the adjustments you've had to make because of this regime that you're following. Yeah, I do avoid the sun, and that's primarily because we're trying to get my skin age again to be the

age of eighteen, and so we do that. We measure using multispectral imagery and autofluorescence biopsies and photos and so with that kind of measurement protocol and that we implement lasers and all kinds of things. And so my treatments do prevent me from going into the sun just for recovery time. So it's not like I'm son avoidant all together.

It's just that I rarely have downtime. My skin is typically all we have some kind of impression of a laser treatment or something, and so really is just an effort to try to have eighteen year old skin again, which I think we've made. I've currently lessened my skin age twenty two years. Since beginning as a kid, I was missed on a lot a lot of skin debauchery never works on screen, so I have I've had to make up a lot of ground. You gotta stop before

you get that teenage Jackney again. All right, listen, we're gonna leave it on that note. Really great to get some time with you. UM fascinating as we said, to read the story that Ashuley did, but even better to get a chance to actually talk with you directly. Brian, Thank you so much, Good luck with it, and look forward to hearing updates. Brian Johnson, uh founder and CEO Blueprint. Joining s V A Zoom from Los Angeles. You're listening

to the Bloomberg Business Week podcast. Catch Just live week days from two to five pm Eastern on Bloomberg Radio, The Bloomberg Business and and you too. You can also listen live to our flagship New York station just say Alexa play Bloomberg, e Love and Verdi. Safe to say we are all a bit obsessed with chat CHPT right since Microsoft's tenderly an dollar investment. We're hearing about it in earnings calls. Google did their own, albeit much smaller,

a ideal. We talked about it with Kathy would last week, and then there is a Bloomberg Business Week story that you can find online that definitely takes it into account. Art put chat GPT to the test on a Warden exam with more. We've got Demetri casandis a senior editor at Bloomberg News on the phone in New York City along with the editor of Bloomberg Business to Week, Joel Weber in our Bloomberg Interactive Broker's studio. So Joel, how did chatp GPT do on that Warden exam? Well, we're

gonna find out. I do think just in general, um, it is causing existential crazies everywhere you look, right, I speak for yourself, man, Yeah, it's all gonna be great. And I think you know an NBA or tests. In general, I've heard from some professors who are like, I've had to up end my entire curriculum to account for uh chat gpt UM, so that you know, proving that you know, AI program didn't actually do the student's own work. Um, AI my homework. I think we'll get us. Uh so

take us to Wharton. UM and the professor who you based the story around. Yeah, I mean I think those are all good points. Christian Turley teaches at Wharton, and you know, it started as kind of a fun conversation over the holidays with his sons, who both have dealt with other programs. UM. You know, we're we're intrigued by it. Our b schools coverage sometimes is about research that can steal very out of touch with what's going on in

the real world. And Professor to Reach was very quick and nimble to say, Hey, let me see what this this thing is about all the hubbub. Let me give it an exam that I've given to my students. Um. It did quite well, it did above average, it got to be minus UM. But it is not you know, it's the context of a business school course. In a business school exam is not the kind of context in which you know, students can realistically put the chatbot to

take the exam for them. That's not to say that the concerns of educators across the country, as the professor noted to me, are not legitimate. I mean, there are many educators with far fewer resources than a warton professor who do have to contend with the reality of how students are going to use this. He used this as a way to see what it's all about, and then as a way to say, hey, this is very powerful,

it's doing quite well. It's answering in ways that legitimately might pass as a student, how can we use something like this more creatively in our in our classroom. Our job as educators is to really think about how to bring education along and be more creative and really spark imagination. And so this is the first step of this one protestor intro to do that. Did the professor give you any idea how he would actually use it in a classroom? Well, I mean he gave me an idea off of something

that we talked about in the conversation. Like let's say he was teaching philosophy for example, not business, but you can swap out people. And I mentioned this in the Q and A, and and he says, you know, I want you to go back to your libraries and to your apartments and research, you know, the work we've studied on Sarta or on you know Camu and Sarta. Write me a five hundred word essay on the differences between

these two. Um. You know, they might go home and decide to have chat GPT write the paper for them. But what he might do that would be even more effective is have chat GPT really engage in a conversation. That's what these chats do with students, Um and step in as the philosophers, the French philosophers and do something that might spark some more creative ideas with the students. And so he as a as a professor could start be in a position to introduce the use of the

chatbot in that way. Um demiti, I got a jump in for a second, because how did it do? When it came to which I bet the whole student body universe is saying, I hope I can do math. How did it do on math? Oh? It doesn't. They don't do well on math, at least in this instance. And he said that that's something that you know, I think we see that across the universe of stories that have been done by Bloomberg and many others. What you said is true. Everybody's kind of been a frenzy about this

right now. Mathematics it did not do well, and I mean Professor Turvich was very funny about that. I mean, it's like your your computer, dude, like you can't actually like put some numbers together. Um. And in fact, numbers is where it was really tripped up. And it was more in language that it was far more impressive, and in logic and application of logic um. So it was

all around super surprising to him. I think that he, as well as many others who are engaging with chat cheep two right now, it's a little tough to do. You go to the website, it's so popular, there are so many users that generally what you're going to get as a message that says chat qep he is expacity right now. So you can't try it because the world is trying cat gbt um. But he did it. He did it quickly. He wrote a paper and he said, I was really impressed, and I think I'm gonna try

to think more creatively about how to use this. And I think that in that context, I mean, I want to be clear, we came at it with a very specific sort of context of B schools, you know, teaching business, teaching, taste management and so on. You know, there's probably going to be space for something like this. It will emerge in time. I don't think that we have the answers right now in terms of like this semester, how is CHATCHYTI going to, um, you know, a stand in for

something in the curriculum. We're not. We're not there yet. But take that take that computer not a yeah, but yeah, I mean everything's on a curve in business school anyway. Yeah, so you know, it kind of doesn't matter. So so one of the things that stuck out to me Dmitrou was him saying, we are not running out of work, um, but what is shifting is the efficiency frontier. And I'm curious, you know, this would be an optimistic take, I think on chat GPT, but but what what is it? What

is the potential here in the classroom. I mean again, I think that there are ways he thinks to use it and engage it to be added and I hate to use the word additive, but to engage brains and students in a way that that there isn't time enough in the classroom, but it's to extend the learning that's already happening. You're going to the Internet, you're looking for videos of things as it is you're looking up resources. So this might take it to another level in which

is not as passive, though it might be more active. Um. He does have a far more or let's say, positive and optimistic view, which is that these things should be seen as tools that are very innovative and technologically advanced, that that we should not really be so fearful of them as replacements for actual people in many settings. I mean, you wrote this Q and A, not chat GPT, are you sure? Though I'm not sure. Did a robot do this? Interview?

The Big Secret? Um? It's so funny. I mean, I was just reading an interview that a former colleague of mine from a time I worked at a company called The American Lawyer. He did a Q and A with chat GPT and just posted it on LinkedIn, and he's asking chat GPT like, if Nike wants to sponsor you, will you will you accept the sponsorship? And chat GPT is like, I'm an open flash form. I Am not somebody who's going to give in to open spot to

sponsorship by private interest. It's a very interesting, it's a very interesting back and forth, and it's actually like a real engaged, like intelligent conversation that this individual has. Everyone sells for a price. Stroll right, me too. You know it's not I can't wait for Google's bar, which you know is also in the headlines now to have a competition or a conversation that's ai comptimistic name. We gotta run, Joel Dmitro, thank you. This is the bloom Bird Business

Week podcast. Avail at Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday starting a two pm Eastern on Bloomberg dot com, the I Heart Radio app, tune In, and the Bloomberg Business app. You can also watch us live on Bloomberg Quicktake every weekday on YouTube and always on the Bloomberg terminal.