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Hi everyone, Welcome to the Bloomberg Business Week Weekend Podcast. Big focus this week for US continuing news out of Washington, DC. Yes, that security breach involving the use of the Signal chat app and the inadvertent inclusion of a journalist. The full coverage of that and the latest can be found on the Bloomberg and at Bloomberg dot com. The other big focus though out of Washington, Yeah, lots and lots of tariff talk and action.
The President announced a twenty five percent tariff on audio imports, expanding a trade war designed to bring more manufacturing jobs to the US. Also setting the stage train even broader push on levies in the coming weeks and so on. Tariff's Trump policy is in an uncertain environment. A few members of the C suite way in including Seamen's health and heir CFO and the CEO of Sension Jet.
Also coming up a gut check on the AI spend with hpees CEO who was at Nvidia's recent big event and caught up with Nvidia's Jensen Wong. And the next hour, the journalist who has been searching fifteen years for the creator of bitcoin hasn't found him yet, has he?
God?
Do you know?
So you'll have to listen.
You'll have to read the book or listen to the interview.
Wait, did I just give it away?
You get all that to come? We begin with someone who's been investing in lots of market cycles. We're talking about Barry Ridtholts. He's the host of Bloomberg Masters in Business. It's a broadcast and a podcast. Barry's the co founder, chairman, and chief investment officer of Ridtholt's Wealth Management. He's got a new book out. It's called How Not To in the ideas, numbers and behaviors that destroy wealth and how
to avoid them. Barry joined us earlier in the week as we were coming off comments from President Trump at the White House.
There's this sort of narrative fallacy, hindsight bias that we all engage in. We don't know what's going to happen tomorrow, but after it happens, we have this perfectly rational explanation as to why the Wall Street narrative following the election. We had an election, it was decisive, It didn't go on for days as some people forecast for better or worse. There was a clear outcome, and Markets rallied in anticipation of, Hey, this is going to be a business friendly administration. We're
going to get tax cuts, we can get deregulations. Everybody party in Markets rallied pretty much up until the chaos began with the tariffs. Tariffs are on Monday, they're off Tuesday, they're on Wednesday. Was back and forth, Hey we're gonna have tarffs with Mexico Canada, all right now the tariffs are not with Mexico and care well, maybe we'll have tar and then so the narrative was this administration is fostering chaos. Nobody can make a CAPEX investment because we
don't know what the rules are going to be. We don't know where we want to locate factories. We were told, hey, we could build stuff in North America and it'll be tariff free. Forty five negotiated the new NAFTA agreement. Forty seven is complaining. It's the same guy. So we ended up with this new narrative, all of this chaos is bad for business. And then the comments came out from President Trump, Well, maybe we could make these more focused and more targeted, and maybe it doesn't have to be
this broad, and so the narrative changes. And when we're looking at this, if you're about to retire, you have every right to be concerns about all this chaos. But if you're not retiring for a decade, well then maybe you should look past the next four or maybe it's two years, and worry less about the chaos and worry more about how your portfolio is going to look six years after this president leaves the White House.
In your book, you have a chapter titled bad Behavior, and there's a section why politics and investing don't mix. And so is that mix even a greater risk in the Trump administration? Or no? Is it just kind of politics as usual? And we'll have to wait to see how everything settles down.
So here's a sentence I never thought I would say, but I'm going to say it. Trump's genius is his ability to capture the attention of the viewing public. Biden didn't have, you know, a white house full of media over every signing, over every executive order, over every random thing. You didn't see that with Obama. You didn't see that with George W.
Bush.
You didn't see that with Clinton. He is a master communicator, and because of it, the noise level ramps up. When we look at the odds of odds of a recession, odds of a volatility, of a market crash, of a dollar collapse, of a geopolitical event, they were low before January twentieth. They're still relatively low, but all of them have moved higher. I'm not saying we're getting a recession, we're getting a crash. I'm not saying any of that.
They're still relatively I want to say the Wall Street consensus was up from ten to fifteen percent chance recession to thirty thirty five percent.
Now that means that the changed.
It's a change, and it's not in the direction we like. But it's not. Hey, there's a sixty eight percent chance of recession. It's still relatively low. The problem isn't just that it's elevated. The problem is that the chaos is starting to increase the probabilities. Look, no one knows the future, but business people make investments when they have at least a modicum of clarity. Hey, we know what the rules are going to be, we know what the tax code
is going to look like. We know here's where we're going to spend our CAPEX dollars to generate a return. And when all bets are off, everybody kind of freezes and says, I can't deploy millions or tens or hundreds of millions unless I know is this going to be tariff this, this is going to be taxed? What are the rules going to be about this? And that increases the chance of an economic slowdown.
Hey, Barry on the book. It's your first book in what fifteen years?
Yeah, I'm like clockwork, So crank them out. So twenty forty the next the sequel with it.
Does coincide with the rise of your firm, for sure, absolutely, And I'm wondering if this is the culmination of what you learned speaking to clients about mistakes that they've made that their advisors in the past had made before they came over to you. What is it a culmination of.
So I've been writing in public for home almost thirty years, and a lot of times, you know, as I've become better known to Wall Street into the investing audience, when you put something out there. I remember putting out the Pimco bonus. It was the top of the terminal for six months. I got a million letters emails about that. I've done other pieces more recently where there's been in the beginning of the pandemic. It came out April first. People thought it was an April fool's joke. Don't assume
the pandemic ended the secular bull market. So it's nice putting stuff out and generating a response. Early in my career I would write stuff and you would get crickets. There's a chapter in the book on a very famous cover of Fortune magazine May two thousand, why Cisco is the one stock you have to own. And I wrote something up about it and didn't hear like, not even
an angry email. It was just, you know Howard Marx used to talk about in the early days of his notes, they would print them out, fold them, stick them and envelopes and mail them out. And I said, what was the response crickets. It wasn't until his infamous Amazon dot bom in late ninety nine that he finally got some sort of response, And I very much appreciate his journey.
So a lot of this is kind of thinking about you know, I have a huge advantage of having hold a lot of people out, or a lot of media and Wall Street analysts and fund managers statements, or at least noted them, maybe not call them out, but noted them. And now I have the advantage of being able to look back and seeing who was right and who was wrong. PS the Cisco column twenty percent off, it's all time high at the time in May two thousand. The stock
proceeds to fall over ninety percent. It is today a quarter century later, still below where that magazine cover was. So it's fun kind of going back and looking at a lot of these things. A lot of the ideas in there. Some came from clients, some came from medias, and some came from prospective clients. Hey, I'd like to give you money, but you have to answer explain this to me. So you know, there's a discussion in there. How come during the pandemic the market was detached from reality.
I drove through my neighborhood and this dry cleaner was closed, and this restaurant was closed, and all these shops were doing poorly. And the answer was those companies a aren't publicly traded, and even the companies that were publicly traded airlines, hotels, all sorts of services like that, they're relatively tiny compared to big, global multinational companies that aren't dependent on a chain of restaurants. Can't compare to Microsoft or Apple or Amazon. They're global and they're giant.
I am curious in terms of the converse you've had over the years and the ones that are featured on Masters of Business. Are there certain people that I don't know changed maybe the way you think about investing that really just struck with you. I'm not going to ask you for your favorite guests, because I think that's not fair. I think it's obvious when you talk to people that you really just like talking to these individuals and getting their.
They're fascinating, They're absolutely fast, and.
You really get into their stories like what makes them tick or you know where they grow up and how their you know, professional life came to be. But is there somebody that kind of really stands out for you.
There's a few people that stand out. But I'm going to answer a slightly different question than the one you ask.
That's because he likes ask question.
So there are a number of guests I really have grown to appreciate in the door, and there are groups of people they're just charming and lovely and generous and what have you. But you know, the first couple of times you hear a billionaire tell you, hey, you know, luck really plays a big role in this and you need to have humility, It's like, yeah, yeah, sure, thanks. The second time, the third time when the tenth Nobel Laureate CEO billionaire says, hey, you know, someone says this
is all about smarts and hard work. Howard Marx once said, I went to I think it was Columbia Business School. Everybody that was smart and hard working, right, Not everybody there became billionaires. To paraphrase, he goes, sometimes you know, you just got to be the right place at the
right time. You get a little lucky. I'm genuinely shocked how many of these people are just absolutely shockingly humble given their success and willing to talk about Listen, when you tell people the world, the universe is random, and
sometimes stuff happens. And didn't see that company, no, and saw the pandemic come certainly wasn't in any Wall Street forecasts twenty twenty global economy shuts down by the way, the stock market's going to scream higher, or the Ukraine invasion, or stocks and bonds down double digits, nobody in one year. So within the book there's a little bit of a theme. Humility is sorely missing on Wall Street, and sometimes you just have to be aware of how random so much
of life is. With that kind of weeze lance, I will tell you spending time with Danny Kahneman was a delight. I'm a giant fan of Michael Mobison. I mentioned Howard Marks is there, Like if you get to spend time with a Dick Thaylor, Oh my god, he's just charming and delightful and witty, and you know any all these people have. People are genuinely surprised when I say, you know, the pen is mightier than the sword. The Paul Krugman, how you know he's he writes brutal pieces. In real
life he's a pussy cat. Like if you met him and didn't know that he was Nobel laureate in Times Acid Pens columnists, you would think, oh, that was a really lovely guy.
Who is he?
And that's my favorite part of hosting the podcast is just kind of getting to learn who these people are behind the public images.
So what's the mistake that you'd say most people make when it comes to investing?
How they should not invest?
So the biggest mistake we all make is we just interfere with the genius of the market. We interfere with the market's ability to compound wealth over time. Like if you just allow the market to do its thing and just stay out of its way, your way ahead of you know, we know the handful of outliers who have managed to generate above market returns consistently over time. Warren Buffett comes to me right their household names, Peter Lynch,
Jim Simon's of Renaissance Technologies. Like there's a few dozen of them. Jim Chanosa of Kinnicos Associates said, noted sortseller right, when he launched his hedge funds in the eighties, there were one hundred hedge funds. They all generated alpha. Now there's eleven thousand hedge funds the same hundred more or less of the ones generating alpha, and so you know
that's kind of instructive. It is extremely hard to consistently beat the market neta fees over time, and the people who do are rewarded with great success, fame, riches, and a handful of them we know because they're so few and far between.
Really quickly thirty forty seconds. Because there's tons of investment books out there, How do you want someone to use this book? How should they use this book?
So the question I ask every guest at the end of the podcast is what do you know today? You wish you knew thirty years ago or forty or fifty when you're first starting out. And someone turned that around on me, and this book is what I would have loved to have when I started, because every mistake in that book I have made and made repeatedly, and had I had that, maybe would have done.
You invested a billion dollars into gold. I didn't do that.
I didn't make that mistake, but I did pass on the seed round of robin Hood and my friend who did put money into it made one hundred million dollars. So I'm a Jeanie.
Very, if you made a hundred million dollars, you would still be sitting here with us.
Probably. You know, I love the puzzle of the market, so I'm fascinated book.
You really do. Fun to get some time with you. Congratulations on the book. My pleasure very rich almuch co founder, chairman, chief investment officer Ridholt's Wealth Management his new book, How Not to Invest The ideas, numbers and behaviors that destroy wealth and How to avoid them. Also host of Masters in Business on Bloomberg Radio and Bloomberg Podcast. You can download it at Bloomberg dot com or wherever you get your podcast.
Partly you're listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or just live on YouTube.
There was one story that caught our attention because it just seemed to tie in so well with our next guest, Astra Zeneca will invest two and a half billion dollars in a new research center in Beijing in a major show of commitment to China, just months after that company's top executive there was detained by authorities. We know it
is so complicated doing business globally today. Our next guest has separate supply chains for China and Asia and their Western clients, which safe to say comes in pretty handy right now. Here to talk about that and more is Siemens Healthenier's chief financial officer, Johan Schmidts. Johan joins us from Munich, Germany, along with our own Nina Trentman. She's here in our studio. She's senior editor at Bloomberg News, author of the CFO Briefing newsletter, which you can sign
up for at Bloomberg dot com slash CFO Briefing. Jahan. Great to have you here with us. There's a lot to talk about. I do want to start with supply chains because I feel like that and tariffs and globalization is so much front and center right now. Talk to us about how you manage it, build it, think about it, and how what you have today came together.
Yeah, thank you very much first for having me.
When I think about our global value add footprint we have as as you're right for you said in the beginning, we have so to say, a two side so to say two side strategy. We manufacture and develop everything for China and for the China block out of China, and we manufacture and and develop everything else in the also in the in the Western world. That means we have relatively detached two value chains in place.
Now, this is.
A Karlie I would say for the current situation, a kind of a comfortable setup because we are not affected, so to say, too much by the geopolitical or terriff discussion between so far between United States and China. And when we look at our global footprint in the Western world, twenty five percent of our employees are in the United States.
We have four segments. Two of the segments are headquartered or the United States, or seventeen thousand total employees seventeen thousand, As I said, twenty five percent are in the United States.
So we are well spread across the world.
And this gives us a decent resilience. Yeah, but it does not make us immune against global trade wars.
And I would to say this.
Yeah, to follow up on that, Johan, thanks for joining us talk to us about the Trump terraffs. Of course, a lot of moving parts, but how do you think about those and could there be an impact on your business, given that you have a strong US footprint.
First of all, let me look at what is currently in place the Mexico, Kada, and China additional terrorists. As I said, China is not a major topic for US because the latest since Trump one or zero, we to change our supply chains so that they are detached from each other. We have i would say, some impact from some sub supply from Mexico into the United States for one of our two headquartered business in the United States or Wearian business at the West Coast. This is I
would say, the major impact. But it's not a huge topic.
It's a so far.
Small topic Canada, US so far not a big topic for US.
And to follow up on that, have you had any sort of conversations with the administration to see if you could be exempt from any tariffs? I know that sort of Beijing, for example, in its retaliatory tariffs on US goods has excluded healthcare.
Yeah, and obviously we are.
Trying to get healthcare and together with other companies in the the escare sector out.
Of UH exempt from from terraffs.
I think that makes a lot of things sense because when you think about terriffs, what do they do. They will limit the flow of products and services across across the world on the one hand, but they're also will will limit the flow of knowledge and then it is to the detriment of patience.
Yeah.
Therefore, when you look at comparable situations like sanctions or others, normally healthcare gets excluded over time. And I'm I'm hopeful that this will also get into into play in terraffs, hopefully sooner than later.
And Jagam, how do you think about this administration, this president versus other world leaders that you've dealt with. How how is he different to deal with? How is this administration different to deal with?
Yeah?
I mean normally, to be honest, when we we in the particular in the United States, we do not have a lot of business with government. Yeah, because the prior to the healthcare system in the United States is primarily a private a private system. Therefore, where we look at changes in the administration in the United States, the impact in general on our business on the healthcare markets are for us relatively limited.
Yeah. And our current.
Assumption as we see it is also with regard to the WES market, we don't see significant disruption at the horizon in this regard, and obviously when we look at the the Trump administration, it's it's from its It's not a surprise what is happening. It was cleared it was also mentioned in the campaign that things like this might happen. From a strategic standpoint, we need to stay flexible, agile
because we cannot plan for everything. We will there will be surprises, and to try to deal with this as as rapidly as possible.
I am curious.
You know.
There was a story actually from daw Jones that talked about how you guys are setting up to cancer research centers in Alberta, Canada, focusing on oncology training and artificial intelligence and machine learning. And I guess what I want to ask you is do you see because it does feel like for so long or the last couple of months, we talked about American exceptionalism, that doing so well, growth
and still investment coming in. But I do wonder do you think that the US, as a result of this administration and the policies that are coming out, is potentially putting an end to that exceptionalism and maybe cutting the US off from collaborations, whether it might be with your company, or with healthcare and in general, or research, whether it's AI, whether it's in healthcare, and so on.
My personal opinion is it's a clear answer is no, this is really happened. From my standpoint, we also do not see this currently. First of all, we are a huge company in the United States. As I said, we have two of our segments in the United States States. We have more than seventeen thousand employees in the United States. We run here of other United States I would say, the by far most successful global vardiation therapy company in the world variant, and we have a very very strong
lab diagnostic business out of Tarrytown, New York. So I think we are very Usish also like we are very European, like we are very Chinese. We are really a global
company with a very well spread global footprint. And I can't imagine that the United States will harm their people to that extent that they will cut off research in healthcare and really do crazy things in this regard, because as I said in the beginning, this will all ultimately would go to the detriment of passions, and that will suggest I can't.
So, just to clarify this idea of American exceptionalism being done being gone dead if you will you don't agree with that, Yeah, I don't agree.
Will to follow up.
You're based in Germany. A fair amount of what your value creation is there, but only only I think forty five percent of your revenue comes from there. Talk to us a little bit about the changing government that we're expecting and in how far you're seeing that potentially improving competitiveness in Germany, a topic that you and I have talked about in the past.
Yeah, as you're right, we said the German market persis is for us. It is not unimportant, but it's not super super critically.
Four to five percent of revenue.
When we look at Germany as a country, I think we need to have a change in how we administer this this country.
I think the first steps we have seen here are prom thing.
There were at least decision making, pragmatic decision making the supposed to be new government establish itself. I call it a very nice credit line of one thousand billion euros. But this is I would say, very comfortable to have. On the one hand, On the other hand, it does not release this government from making tough decisions on leaning on leaning up the bureaucracy in the country and reformatting, so to say that the social systems, because otherwise also this.
Nice investment program will not find its weight or will not pave the way to sustainable growth.
So that means you'll hold off for now with new investment decisions for Germany or sort of what's your take on that.
No, that's not the case.
I meanly for us, we have a significant value act in Germany. We see the circumstances for us in Germany as as a value at the location still very positive.
We have maybe also because of the industry we get very good people.
The education system is still attractive to what we for what we need, and I think we are ongoing, we.
Will continue to invest. We have invested in the last.
Three to four years, about three to five years, about six fifty million euros a billion euros in Germany and this is a significant investment a million euros.
I wonder what's the biggest kind of interesting trend disruption that's going on in your industry right now? And I do have to ask you to be very quick.
I think our industry is not an industry which is driven by disruption, because it's about the I would say the health of patients. Obviously, AI will play instantly more important role, and those who do not build their case on AI will not.
Well super interesting and so appreciate your time to coverage so much ground Johann Schmidt's CFO of Seamen's Healtheneers, and of course Aarnina Trentman, Senior editor at Bloomberg News. Be sure to check out the CFO Briefing newsletter. A new one comes out on Sunday.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven.
Thirty this past week a batch of headlines from the world of artificial intelligence, including a warning from Ali Baba chairman Joe Si of a potential bubble in data center construction. TD Cowen noted that Microsoft abandoned plans for new data center projects in the United States and Europe due to an oversupply of the clusters of computers at Power AI. And you might recall that it was these same analysts, who rattled investors with a February note highlighting Lease's Microsoft
had abandoned in the US. Also, the Nvidia backed cloud computing provider core Weave intends to cut the size of its IPO to around one and a half billion dollars. According to a person with knowledge of the matter, that in a sign of how the recent stock market volatility is hurting demand for even highly anticipated listings.
In the meantime, open ai expects to more than triple its revenue this year to twelve point seven billion dollars, fueled by the strength of its paid AI software. That's according to a person familiar with the matter. One individual who is upbeat on AI is the CEO of HPE, and he was at this month's Nvidia GtC where he caught up with Nvidia CEO Jensen Wong. Antonio Nary joined us just after the event was about a week and a half ago.
It was a fantastic event. Obviously, you can look at from many different perspective. Number one, the innovation front. I have to tell you I never see seeing such an innovation at the speed that we are all experiencing. You know, two years ago we were talking about the boom of generative AI.
Now we're talking.
About physical AI, robotics and what can do for manufacturing in other industries. On the other hand, obviously you talk about what this can do for the enterprise and the enterprise what I see, particularly in the last ninety days or one hundred and eighty days is an accelerational deployment because.
They all realize that AI has.
A tremendous potential to improve productivity, to improve business processes and deliver value to each of the businesses.
And last panel list obviously what they.
Can do for society and if you think about the opportunity to address some of the societal challenges, whether it's finding new cures through you know, molecular docking research or weather forecasting and many other type of use cases.
Is all there.
Now we have to see it, we have to build it, and we need to see it through the benefit of it over a period of time that people need to live with.
Well, we also heard Antonio this promise of physical AI. That was one of the big themes that emerged. But from your perch at HPE, what's the future that you see, what's the future that you envision with physical AI?
Well, I see a world where basically we can remove the humans that they are in the loop and be on the loop, where some of these physical AI, robotics and other type of applications can do.
The basic task that we are totally.
Automated, where we can use ourselves the humans for other more interesting and value added tasks, and that will drive a level of productivity we haven't seen before. And that applies to every industry. You talked about autonomous cars, obviously that includes a lot of artificial intelligence, machine learning, and other techniques, but when I think about the other industries,
the potential is enormous. Now, not everything will be applicable, but I think, you know, we see a world where AI will be embedded in everything we do.
One of the things I wanted to follow up on, you know and you guys made is actually an announcement kind of off of this event about you and video coming up with some new enterprise AI solutions working on this together, Antonio, what I wanted to follow up on, though you said we have to build it, we have to see it and to see what the payoff really is. That's what like the last couple of years right have been about this build out, this spend, and we continue
to see partnerships to continue the spend. But how long do you think it will be until companies really have an idea of what payoff they get for their investment.
Well, look, Carol, I mean I see it really today.
In our own company, we deploy AI in many of our business processes across finance, digital marketing, customer service, forecast planning and the like, and even on the are in the side. Our level of productivity in our software development process has improved by thirty percent. So the learning hit is that first of all, it takes time to build infrastructure, but for enterprise is not a big of a lift
from an infrastructure perspective. I can tell you in my own company, I have only a couple of hundred GPUs and it's plenty for what I need to do compared to the service providers, the model builders that many tens of thousands, of hundreds of thousands for the matter to build these large language models which are very sophisticated from what I call generality to agentic to reasoning, and eventually these models that will do the robotic.
Side the physical AI.
But inside the enterprise we only see the benefits and I spend more than fifty percent of my time talking to customers and they are going from the experimentation phase to more deployment side, and that's why the last quarter we saw a forty percent increase on a year over
year basis demand for enterprise AI solutions. And obviously for US was the deep partnership with Nvidia where we took their software stack, the famous Kuda environment with the names and agentic approaches including only partners with our infrastructure and our own software in the cloud.
And there is all about time to value.
Basically, we made the so simple three clicks, less than thirty cycles. You can deploy an environment for your developers to rag or find you in a model with your data, or to deploy inferencing. And that's where the acceleration is going to come. The simplicity of deployment with the use cases that can return that investment very very quickly.
It's all just kind of really really cool stuff and something we think about so much. It's happening now, but really kind of what the future means and the impact. I do want to ask you though about today's environment.
There's so much coming at CEOs, the C suite of companies a lot of stuff out of Washington, and we continue to watch this spending when it comes to us it given some of the recession fears that are out there, What has your conversations with CEOs revealed on the spending environment, any signs of pullback, any signs that a recession might be coming? What color can you give us about that?
Well?
Up to our Q one which ended in January thirty first, the demand has been very strong.
In fact, if you look.
At our own demand for a moment for our networking business, our hybrid cloud business and our AI business, which are the three paillars of our company.
We saw double digits or the growth.
Demand for every solution that we have in the available today in the market. Now that said, you know the conversation today in the market about tariffs, some of the geopolitical tention, the work that the United States do and to control spend obviously is causing a little bit of uncertainty.
But I do believe it is.
One of those areas where spent will be protected because ultimately, whether you think about position yourself for the next wave, or the supply chain through digitization and automation, as you rebalance the supply chain, what it makes sense for you, or what do you think about using your data to your advantage, as a good example, using AI, or whether
it's to simplify your processes. It will require it, and that's why I continue to be positive about the spend of it as we think about the next few years, because it will grow in my mind faster than GDP.
All Right, we're going to have to leave it there, Antonio, thank you so much for giving us some time. We greatly appreciate it. Thanks to Antonio Neari, he's president's CEO of HPE. Of course, as you know, stock right now in today's session just down about one point three percent, has had a lot of pressure on it though this year down about twenty five percent here in twenty twenty five.
A company did report earnings back in March March seventh, earlier this month, and there were some concerns about the weak profit outlook. But you can certainly read a little bit more if you want. Alomberg dot com and of course on the Bloomberg terminal.
You're listening to the Bloomberg Business Weekdaily podcast. Catch us live weekday afternoons from two to five pm Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
So a lot of enthusiasm about AI from Antonio Neery, our next guest, really upbeat about his world as well, and that world is flying private.
You might remember that recent Bloomberg story it noted how Air France is unveiling a redesigned first class cabin. It's dubbed La Premiere, and it's seeking to attract well heeled customers with a travel experience that it says is akin to stepping onto a private jet.
Well, someone with a lot of insight into the private aviation space is Andrew Collins. He is president and CEO of Sunshine Jet and he made a stop at our studios.
Private aviation, as you remember, had the boon in COVID and it really hasn't slowed down. And so for Sension, we're seeing about fifth teen percent year over year growth right now, and the forward bookings are actually encouraging. So you know, I know there's kind of a lot of pausing in the markets right now and people scratching their head a little bit, but from a travel perspective, I'm really not seeing a lot of leakage.
Why did you have to Why do you have to travel so much?
So we have offices all over the world. So we have headquarters in Cleveland, Ohio, in Boston here in the city, and then we have offices in Mayfair. We have a large operating center out in Farmborough in the UK, maintenance in Milan, So we're all over the world.
But when you're traveling, I mean, you're not selling the product.
So I'm always selling the product.
What does that mean though, I mean it's the jet card. You guys are known for the jet card, yeah, which is a unique offering in a space right now, you know you're the same parent company as Flexjet, which also offers a different type of product. Absolutely, yeah, but how do you like explain how the business model sort of compliments that?
Yeah, so there's two differences, right. Flexjet is probably the from your private aviation company and the globe, and it's got a fleet of three hundred aircraft and some of
the newest aircraft. Sentient has just surpassed its twenty fifth anniversary invented the jet card and it's an asset light model, so it leverages pre screened operators around the globe for usage of their aircraft so we have technology that harnesses and schedules aircraft all over the world and it allows for a different type of way to fly an entry point.
Are you ever paying Flexjet to operate for your customers?
There are some non core fleet aircraft that occasionally we do leverage, but most of the time we're using more of a Part one thirty five operator in the United States or in Europe.
So this would be like a small fleet based somewhere.
It could be yeah, exactly that has passed your certification correct and you're essentially paying them to then take your customers correct.
We handle and so it's interesting when you mentioned commercial private aviations all about that consumer promise and that service level. So it's kind of like curb detail and so yes, you might be able to replicate in cabin experiences, but outside the cabin, getting through like a commercial hub or something like that is very different than you know, pulling right up to a tail and getting on a private aircraft.
You really can't emulate that experience, and so it is you know, interesting in that regard, But yeah, we're selling sort of time manipulation. At the end of the day, right, a jet card allows you to everybody runs off the same watch, but it allows you privately to manipulate the time.
What's the most difficult part of your business right now?
I think the most difficult part of our business is we set a really high bar for our consumer standard. So it's the service level. It's the you know, getting everything right, having all the levers in the row right, and making sure you need technology, you need the people, and truth be told, you really need the experience. We have a deep bench of experience, some people that have
been here since the beginning with the model. So I think that the consumer, especially because it's gotten more pop popular, has also a very high expectation, especially because of the price point. So you've got to deliver, and if we don't actually own that asset, we've got to make sure that we're delivering on that service level and tying that asset to the consumer.
Promise safety in this environment, because over the last few months there have been a spate of these high profile air travel incidents in North America. How do you look at incidents like that and how do you make sure that the product you provide is safe?
So I know our product is safe. We invest millions of dollars in safety. We have a chief safety Officer, Independent Safety Advisory Board. We have an SMS that's a safety management system for those that don't know what that is. That's very advanced with the FAA, and so at the end of the day a lot of times and the report is just kind of being worked through in that
particular regard in that incident. Yeah, the NTSP, it's all about like a lot of factors, right, So there's the factors we can control, and then there's the factors around you. So in that case, you're going to find that it's likely that there's some airport things that are happening. There's some some glaring and some things like that. It's not as obvious as one thinks, but I will tell you that we are. You know, we have an incredible safety
record and we invest heavily in it. And I've always been impressed with what we do and how we respond and how we react to things, and we open our doors up to anybody in that regard. I will tell you that everybody talks of a good game about safety in aviation, but you really have to put your money where your mouth is. It is a big investment, it's a big expense, and it's not something you would ever shortcut.
Andrew, how do you make sense of kind of the environment we are? You know, we use words like potentially recession and volatility and uncertainty, and you know, the kind of world breaking apart in new pieces. How would you describe it from what you see, especially as you travel around the world and have global customers.
So it's interesting. In the States, I see still the robust demand. Like I said that that we're seeing the growth when we see a slow down, and we've seen pockets of it over the years. For moments and pauses like the beginning of COVID and things like that, you tend to see a shift in your customer base, so you might lose some volume, but you generally tend to have pretty decent flying throughout. We saw it in the financial crisis. We actually maintained a whole different segment that flew,
so there's a resiliency to it. Additionally, our customer base tends to get impacted, but impacted different than say somebody on your typical main street. So I think we're seeing enough flying. In Europe, I see a little softness, to be honest with you, inesting, and you know, we're doing a lot of investing and a lot of building over there. So we're almost counter in some of the regards that
other people are kind of looking at it differently. We're blowing ahead with investments and an investment strategy over there.
Twenty seconds. Why Europe?
Why Europe because outside of the United States, the European Union is the second biggest private aviation market.
Sorry I cut you off.
Remind us how much the jet card is per hour.
Card average jet card is about two hundred and fifty thousand dollars for twenty five hours, and it can be a little lower on a light jet. It can be significantly higher in a large cab.
So ten thousand an hour, give or take. Yeah, give her take cool stuff. Andrew, thanks so much. Travel safely. Andrew Collins, President and Chief executive Officer of Sanchenchet Joining us right here in studio. You are listening and watching Bloomberg Business Week Daily.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty plenty.
Ahead in our second hour of the weekend edition of Bloomberg Business Week, including a New York Times best selling author's attempts to unmask the figure behind a bitcoin. Yeah, we're talking about Satoshi Nakamoto and it's untouched fortune that is waiting to be claimed.
Plus a crypto tycoon's bold bet to replace the International Space Station, and feeling shaken and stirred perhaps as the CEO of Craftco talks tariffs and consumer trends in the US spirits market.
All that to come. We begin, though, with the phrase chase your dreams. How does one actually go about doing that? According to our next guest, it's all about having wild amounts of courage.
Yes, indeed, Jenny Wood spent eighteen years at Google, working in a wide variety of roles, including starting the Own your Career program at the tech giant. Purpose of that program is to help people at Google do their own jobs better and even get their next job at the company. She took that work, she turned it into a book. It's called Wild Courage. It's go after what you want and get it. And she joins us here in our interactive Broker's Studio. It is good to have you here
with us. We want to start broadly because the work environment is going through some changes and I I think you know obviously the political environment, and you know that is certainly finding its way into the workforce. How does
a company kind of find their way through? How do they stay true to their employee base, how do they stay to the programs that they may be put in place over the last five to ten years and believe it's important to the company, and yet face a government, a federal government and administration that is looking at these things very closely.
Yeah, well, there's no doubt there's tremendous change in the workplace and how this is evolving with DEI programs. And what's so important about this work and in this book Wild Courage go after what you want and get it, is that this puts the agency back on you. So no matter what's happening that might be outside of your control, this puts the agency on you. So right now, think of something you want. It could be a goal of promotion or raise a relationship even and think about what's
standing between you and achieving that thing. Well, by the time I started working on Wild courage. I trained tens of thousands of people directly and directly on success, leadership, influence, and the same theme kept coming up their relationship to fear, fear of failure, fear of uncertainty, fear of judgment of others, and wild courage is the process of feeling that fear and taking action anyway. And it's the set of tools that help you go after what you want and get it.
And it's so important right now because we feel like we're lacking so much control. There's so much that we can't change. But this you can. You can always change yourself and push past that fear.
But Jenny, what if you say, listen, I'm working at this company. I love this company. I've been here for several years, love it. And then all of a sudden they're like, hey, folks, these DEI initiatives, we're not going to do anymore. We're gonna like move away from these things. Like you talk about having no fear, Like do you go to your management, does the employee base do we anticipate that they kind of step up and take notice and say, wait a minute, folks, this isn't the culture
we've had. I don't want to work here anymore. Do you anticipate that we might see employee bases kind of fighting back.
Yeah, Well, I think we will see a shift for sure, And I think as a shift, and what I think we'll see a shift in how people feel and how people feel a sense of what this company provides or what you know is part of the culture or part of what they expect of any kind of DEI programs or any sort of expected resources, or you know.
A shift away, a shift.
Well, I think that I think that if these we're already starting to see the shifts, right, we just mentioned some of them already, with people change, changing language, and so I think people will rise to the occasion again, start taking agency and start finding their own ways to learn and grow because a lot of these DEI programs are helping with communication, they're helping with confidence, they're helping level the playing field, and that's what I try to
do in Wild Courage. So it's almost a perfect time to be bringing this this work to the world, which is very different than the work I did at Google, but so much more exciting and energizing because it covered these nine sizzily traits.
Well, let's talk about some of those traits, because there are some traits in here that I think people would be surprised to hear. Yeah, in this type of book. For example, manipulative, you argue that people have to be manipulative, They have to learn how to be manipulative to have this wild courage. What do you mean?
Yeah, so I'm reclaiming language here. These are nine traits that raise eyebrows. Right, weird, selfish, shameless, nosey, obsessed, brutal, manipulative, reckless, bossy. But you know, we fear, we live in fear that people might call us one of these traits, and so it prevents us from taking action, from being bold and going after what we want. And so when we reclaim them, we could think of manipulative not in the traditional sense, but more in a sense of the courage to have
influence and build lasting relationships. Because whether you're selling a product, a program, or frankly, yourself, your ability to win friends and allies and partners is all about mutual benefit. And that's where I want people to lean in.
Well, it's not just the workplace. You talk about it from a personal perspective too. Your husband, John, Yeah, how you met him? Yeah, talk about.
That So it's twenty eleven. I'm right the subway home from work, the sea train, and about twenty feet away from me stands this really gorgeous guy, beautiful blue eyes, thick brown, wavy hair, and I want to talk to him, but something holds me back. Fear of failure, what if he's a convicted felon, Fear of uncertainty, what if he's married. Fear of judgment? Right, what if a hundred people stare at me on this packed train, the same three fears that I hope wild courage helps people push through.
So I.
You know, I'm a confident Google employee on the outside, but I'm scared and timid on the inside. So I do nothing as the train passes stop after stop after stop, and frankly, as life passes me by. But I make a deal with the universe. I say, if he gets off at my stop, then maybe I'll try to strike up a conversation with him, and if not, then say love.
He gets off at the next stop, fifty ninth Street, that is not my stop, And then all of a sudden, I feel this wave of wild courage wash over me and practically push me off the subway, and I catch up with him, have him on the shoulder. I say, excuse me, I'm sorry to bother you. You're wearing gloves, so I can't tell if you're wearing a wedding ring. But in the event that you're not married, you were on my subway and I thought you were cute. Any chance
I could give you my business card? He calls the next day, We go out. A week later, three years later, we're getting married. And we've now been married happily for eleven years, with two great little hooligans each of seventy nine already you Noah, I'm.
Just gonna say that, for those of us who live in love in New York, it's very easy that that story could have been where he called the conductor or the police.
Had up.
I should say.
I'm not saying wild. Courage works every time. I mean, you know, we talked to I listen.
To this, and I'm just saying, well, wait a minute, no offense. Yeah, but I still think that there's differences for men and women with some of these traits. Yeah, so help me out here.
Yeah.
Well, I just had this beautiful home coming back to Google. I just gave a keynote at Google and someone did ask, well, like, how does this you know relate to women versus men? And these labels can get very gendered, especially some of them,
uh shameless or manipulative or bossy, right or nosey. These are some that sometimes are labeled more toward women versus men, But the underlying principles of wild courage are applicable for anybody, whether you're an employee or an entrepreneur, male female, born in Salth Paulo or Tokyo or New York, because the root of it all is the courage to push past that fear to chase what you want.
Which ones do you think are gendered? Bossy, bossy? I feel like women often get called bossy and men often don't get called bossy.
Yeah. I've never heard a man called BOSSI I've heard a man called direct and a strong leader and confident.
Oh yeah, well I think I think I hate I, but I think it let it go already rise with you know he's going after what he wants.
Yeah, he's determined, he's going after opportunities. He's strategic.
Right.
A woman is manipulative, a man is strategic. A woman is a bossy. Man is you know? Digital?
So do you think men and women have to approach this differently.
Well, I think that it's interesting you asked that. In each trait, each chapter, I share what are called trait traps, right when you take a trait too far and you're classically manipulative or classically selfish. Again, selfish is the courage to stand up for what you want. Shameless is the courage to stand behind your efforts and abilities. Well, because this can be harder for women to toe that line
because of things like the double bind. Right, we're supposed to be sweet and nice, but we're also in a workplace want to be direct and confident and competent. So I think that women are probably going to be perceived as falling into these trait traps more often than men, just because the expectations of women can be different. But it really does run the gamut. It depends on the person, depends on their personality, depends on the environment.
I love this too, because you do provide a lot of context around each of them. These words are these approaches, but you say power grows through proximity, get adjacent to it, rub shoulders with the elite, listen, pay attention, be seen. Few people to know for people to know you, they first have to recognize you. To be visible, be pressent next to you. Exactly, I'm going.
To sit next to you.
Everybody stops at you. But what's the balance between being noticed and being annoying? Because because someone who is a squeaky wheel constantly, I think it's safe to say that people sometimes they don't, they start to ignore you. Sometimes they they listen because they're like, enough already, let's just do what this person wants.
So here's where I like to challenge people. You might know some people in your life who are that obnoxious, over the top, too much squeaky wheel.
We're immediate, that never happens, right, But actually maybe maybe you're actually.
Most of us are normal. Well right, okay, so you just sort.
Of shared it right there.
You go ahead.
Well, I'm saying if you're saying you're the normal one, Carol, if you're saying we're normal, we're normal, We're not normal.
We're not normal, that's a probably bad word.
Go ahead, outside of media, think of twenty people, friends from colleague, former colleagues. My hunch is that the majority of them, you think, need to dial it up and kick their imposter syndrome to the curb, or be more confident, or ask for what they want. It's like the advice you'd give to a friend, like, no, your company laid off three people and now you're doing the job of them, and they've given you no more money and no raise
and no promotion and no different title. You'd say, well, go ask your boss for what you need a new title and a twenty percent raise. But we fail to do that ourselves. So it's almost like wild courage is the advice you give to your friend, but that you struggle to give to yourself.
So what if you ask, you have the courage you ask and they're like, nope.
This happened to me. So I was doing a lot of asking about this book, people helping me promote it, and some people ghosted me, some people just gave me a blatant no, and some people in a really harsh way, and you just have to push through it. It's spine straightening. It's part of being reckless and taking risks and airing on the side of action, and that makes you better over time.
Good stuff interesting, by the way, I think you're normal.
I don't know.
We'll chat to read it.
That chapter one is weird, so.
I'm not normal.
Jenny, thank you so much. Yes is about good luck with the book. Jenny Wood print book is out today. It's called Wild Courage. Go after what you want and get it.
You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from two to five eastering. Listen on Apple Karplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
There's perhaps no greater mystery in the world of cryptocurrency then the identity of one Satoshi Nakamoto. Is it one? Is it a man? Is it a woman? Is it even a person? That's because Satoshi Nakamoto is widely seen as the creator of bitcoin, and it's thought that his or her there bitcoin wallet contains up to one point one million coins, which yes, could be worth somewhere in the neighborhood of one hundred billion dollars. Benjamin Wallace may
have found some answers. He's been looking for Satoshi all the way back to twenty eleven, and he's the author of a new book, The Mysterious Mister Nakamoto, a fifteen year quest to unmask the secret genius behind crypto. Benjamin also the author of the New York Times bestseller The Billionaires Vinegar, and he's written for New York Vanity, fair Wired, and more. He joins us from New Jersey. So did you find Satoshi Nakamoto? Benjamin?
Thanks for having me. Did I find Satoshi? I found many Satoshi's. I don't land on a mathematical proof of a single name that you can point to, but I explore a lot of candidates very thoroughly, and I think you finished the book able to draw your own conclusions.
And I look at the group possibility.
I look at the possibility that it came out of the NSA. I look at the possibility that it could be, you know, an old sort of cryptographer from the nineties, or someone much newer on the scene who no one's ever heard of.
Which one do you think it is? Of all of those?
This is going to be unsatisfying, But I I really there's a few maybe favored theories, and okay. One of them is a beloved no longer with us cipher punk as they called them, named how Finnie, who was the very first person to transact with Satoshi Nakamoto on the Bitcoin network. Another is an obscure cipher punk who is sort of a recluse, who lives in Australia, who has not been focused on previously, and who, unlike how Finni is, is sort of on the other end of the spectrum in terms of.
Likability.
Let's say, so he would be kind of a shocking Satoshi because he's not the benevolent god that bitcoiners like to imagine Satoshi must be.
That would be James A. Donald.
That would be James A.
Donald exactly.
Do you think that Satoshi is an individual or do you think Satoshi's a group.
I think that if Satoshi is a group, then that would actually point towards potentially an intelligence organization being the source of bitcoin, because outside of intelligence organizations, where obviously groups or groups hold secrets all the time that do not leak. Outside of those agencies, it's almost impossible for
group secrets to remain secret. And you know, seventeen years after Satocian Akimoto first came on the scene and announced bitcoin, no one has come forward to say, oh, yeah, you know, my ex husband invented it, or my ex business partner invented it, or my estranged sibling invented it. And this is just I find it very unlikely that a group could hold the secret.
Okay, so this may be blasphemous, but our blasphemy. Why does it matter that we figure out veentamin his identity.
Well know, what you're saying is the opposite of blasphemy. My saying it matters is the blasphemy. Like bitcoiners will tell you that the world should not know who Satocin Akamoto is. I have two answers to that. One is that I think we've all seen recently how the richest person in the world can affect a lot of people's
lives other than themselves. And Satoshi Nakamoto right now with one point one million bitcoins would be in the twenty richest people in the world, and Bitcoin would only have to go up, you know, by a multiple of two or three to suddenly make Satoshi Nakamota the richest person in the world. So that's one reason. The other reason is until we know definitively who Satoshi Nakamoto is and what their agenda and intentions are, we cannot assume that
they are, you know, ones that everyone would like. Let's say it turned out that Satoshi Nakamoto is a plan by the Chinese Communist Party to destabilize the dollar. Should we just leave them alone and defer to their wish for anonymity?
Can you remind everybody why the origin of bitcoin is associated with Satoshi?
Sure?
So, the way bitcoin was first announced was on this kind of obscure cryptography list serve or message board by someone using the name Satoshi Nakamoto. And on that message board, no one had ever heard this name, but they just assumed it was one they'd never heard of, or it was an Internet alias. And then eventually that same person or alias launched the bitcoin software onto the Internet.
You know, it's just kind of interesting, Tim, and I have so many interviews on the world of crypto and people so convinced that this is the way forward, and yet there's just so many questions. And I think part of the mystique right of digital currencies is that there is this mystique that we don't necessarily who started it, and you know, it's kind of outside the traditional financial infrastructure.
How do you see, you know, since you started writing and wired your first feature on bitcoin twenty eleven, many years ago, now, at this point, how do you think about the digital world, the digital currency world, today.
Sure.
Well, first, I'd also say the anonymity or pseudonymity and unknowness of Satoshi I think has been an incredible marketing coup for Bitcoin because it's very on brand. The whole idea that bitcoin has no leader fits perfectly with the idea that we don't know who the leader is the crypto world in general, in the digital currency world in general, today I think of as quite far removed from where it started. I mean, it began as a sort of
libertarian friendly project just with Bitcoin. Now there's something like over according to coinbase, over eleven thousand different cryptocurrencies. Obviously, crypto broadly has a fairly checkered reputation because of all the scamminess over the years with some of the especially the non bitcoin cryptocurrencies. But I continue to think it's an extremely fascinating and promising technology that may just not have found its killer use case yet. I mean, AI
started in the nineteen fifties. For decades people assumed, since nothing has happened with it yet, nothing is going to happen with it that is consequential. And obviously we now know AI is extremely consequential, and I think it's entirely possible something similar could happen with bitcoin and crypto.
All right, we unfortunately have to leave it there, but Benjamin, we hope you'll come back real soon so that we can continue this conversation because it's really fascinating when your take on it. In particular, Benjamin Wallace, thank you. His new book is The Mysterious Mister Nakamoto, A fifteen year quest to unmask the secret genius behind crypto. Joining us there in New Jersey.
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
From Bitcoin's mysterious origins to the billionaire who made us fortune in cryptocurrency and is now headed for outer.
Space, Jed michaeleb is the sole financial backer of vast Space. It's a startup aiming to build the world's first commercial space station. Writing about Jeb in his cosmic ambitions is Bloomberg News North America Industrials and Transport reporter Kyle Porter.
I was very skeptical at the outset of reporting this story, but having gone down to see them in la before Christmas. I've not seen building a vat scale anywhere in the world outside of China. It's twenty four to seven, seven days a week. They're spending the money and they're pretty bullish on their prospects.
You know, there's this misconception that I think it's fair to say I had before reading your piece, that NASA doesn't really have as much power as it used to. But a point that you and Lauren make in the piece and also in the video, is that NASA still controls this awards process, So they might not be doing the manufacturing of this stuff. It might go to SpaceX, it might go to other companies Boeing for example, and
maybe it'll even go to this company. Is what is NASA's role in this in a world where NASA doesn't have the power that he used to.
Well, it's not some which NASA doesn't have the power. It just doesn't do the manufacturing.
He doesn't want to.
It wants to become much more of a commissioner of projects rather than the developer themselves. And there's upsides and downsides to that. The upside is you're not as beholden to the political cycle for funding. You can have more certainty if you're contracting out to the private sector. The
downside is you do lose some of that control. And you know, certainly on a geopolitical level, no one has deregulated the space industry in the way that the Americans have, So it's a little bit of an open question whether it's going to be a good idea about idea.
I guess one of the things Kyle I want to know is who is this dude, Jed mckel I mean, like, what's his background? You know, was he just born to do this? Because it sounds like not necessarily you would have assumed that this is what the project he'd be working on.
No, you're exactly right there, Carol.
I mean, he's an Arkansas farm boy who said he used to spend his evenings looking up at space as a child.
He dropped out Berkeley.
He started his first business in his early twenties for the elder millennials and gen X's listening. It was e Donkey, which was a platform for sharing music. That business folded under a weight of lawsuits, and after a brief period trying to start a Magic the Gathering trading platform, he somewhe into crypto.
Crypto treated him well. He made a lot of money on crypto. He has a background in Ripple Mount Gox. What was his crypto story.
Mount Gathering, a magic The Gathering became mount Gox. He repurposed the platform. It became incredibly successful. I think it was the first real bitcoin trading platform. He sold out. Then that after he'd sold that platform collapsed and was the biggest stever crypto failure. Into left Ex. He had then started Ripple Left that quite quickly, had a sheer trading plan which made him billions, and then went on to found Stella, which combined with light Yurine is still
very active in the industry. Now. He's also into AI as well.
So he could take his several billion dollars and create some sort of I don't know, family office, keep investing, making vets in crypto, making other types of investments, grow that wealth. But instead he kind of wants to risk what it seems like half of on something that could totally not work out. What's his thinking thing.
I spoke to a few people who worked with him for a long time, and they said you should not think for a second that he's not rational.
About risk. He's hyper rational about it.
He just has a very firm view on what is the best use of his capital. You know, he's not a guy who's gone to gold and Sacks or ubs and taking the wealth management plan. You know, the money's his. He spends it where he thinks he can put it to best use.
You know, it was funny, I have to say when I first picked up your story, Kyle, I thought, Okay, Elon's going to hate these people, right, like, you're invading in my space. No, actually, right, Tesla is lending or SpaceX, i should say, is lending Vast some technology. There's Tesla's in the parking lot and their CEO actually has a Tesla connection. Like, it's kind of interesting.
Yeah, it is that no company has gotten into bed with SpaceX in the way that Vast has. And that was the one air in reporting when they didn't really want to disclose, they were keen to point out out it's very separate the fact that Vast was, you know, paying SpaceX to send.
Up the Haven one shuttle next year.
You know, it's like, well, you know, of course we're a partner, and you know, you know, we're a client, so you know, it makes sense for us to do these things together. But it's like up over the competition.
Well that's what That's where I wanted to go, Kyle. Somebody listening or watching right now might say, wait a second. If these guys have a close relationship with SpaceX, a close relationship with Elon, Elon's got a close relationship with Jared Isaacman of NASA and of the and with the President as well, it's a pretty good omen for being selected.
Maybe, Look, if you were being completely cynical, and I'm certainly not one of those people, you might suggest that Elon would not cut a program that would benefit his firm financially if you were being cynical.
But if you were not being cynical, well, okay, what's the competition that they face in this process.
There's a number of other companies in the Space Axiom, Blue Origin Voyager that are all looking to get one of those two spots for the ISS replacement. The current plan is for two companies to get taken forward middle of next year, so that's when they're hoping to have a haven one in orbit.
Blue Origin. Wait, that's connected to somebody, oh who is Oh yeah, Jeff Bezos Yeah, we spend more.
Time in Florida, Carroll than in Washington, DC. Right now.
That is very true, very true. And he's not a best buddy. A close buddy, perhaps a buddy, but not a best buddy. Kyle, great story, great video that goes. We highly recommend you check it out at Bloomberg dot com and on the Bloomberg. Kyle is North America Industrials and Transport reporter at Bloomberg News. Joining us from ship. Do not go anywhere.
This is Bloomberg.
This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just Say Alexa played Bloomberg eleven thirty.
While President Trump has threatened a two hundred percent tariff on all alcoholic products ship from the European Union to spaying drinkers, restaurant tours, bar owners and suppliers across the US, a reciprocal terror free trade agreement that has existed between the EU and the United States since nineteen ninety seven could be ripped up as a consequence of Trump's anger at a European levee on America's native spirit, otherwise known tim as Bourbon.
Well, we are very interested in how the US spirits industry is viewing all of this. Ali Anderson is CEO at Kraftco. It's a company that has more than two dozen spirits and liqueurs, including chin vodka, Bourbon rye, and ready to drink cocktail. She joins us from Alexandria, Virginia. Ali, good to have you with us. How are you?
I am well, thank you, Carol. Tim good to be here.
Hey, before we get to exactly the impact of tariffs, explain your portfolio here, because I want to understand what exactly you have if you make it or if you just license it. What are the intricacies here?
Oh, great, great question to start with. So, Kraftco. Has five different brands that are distributed all across the United States. We make these brands. We do source our whiskey, we distill our gin and our vodka. We've got everything from the value end of the spectrum where if you're just trying to get into whiskey and you're not quite sure where to start, all the way up to ultra premium luxury whiskeys that we spend quite a bit of time blending and finishing, so there's a lot to dig into
with our portfolio. We also have a range of RTDs which are very popular.
Ready to drink cocktails, Yeah.
Ready to drink great, Yeah, canned cocktails could not be bigger right now, and they've been on on the climb now for a couple of years. So we've got those as well. And then some lookquurse So if you're just you know, into the low know, the lifestyle thing where you just you're not interested in one hundred proof whiskey, we've got some liqueurs that are very flavor forward and lower proof so you can throw them in your seltzer and still be able to enjoy a good time.
So I'm wondering about the tariffs and how you're viewing this. Do you export at all?
We currently don't export. But here's the thing about tariffs is that they are They affect everybody, whether you export or not. In fact, this was going to be our year to start exporting, so naturally, you know, we're disappointed here at Craftco. We're in thirty two states right now, and that's definitely affecting us. I think, you know, when we talk about tariffs and think about it, we first of all commend the administration's objectives to protect the American people,
to support jobs in the United States. But we are concerned that those tariffs just really don't contribute to that effort. In fact, think it harms the American jobs. You know, you look at something like whiskey, right, which starts with the farmers who grow the grain, and we're very connected to that process, and then you move to the small
business guys like us who distill that grain. Then you move on to the distributor whose trucks take it to your favorite bars and restaurants, and eventually that bartender that you've got a relationship with where you go to get that great dependable glass of whatever your spirit is. Those are all the people in the supply chain that are really affected by this, whether you export or not.
So you were going to export this year, but because of tariffs, you're not going to That's right, you know.
We were going to export to Canada and to the EU, and certainly now, of course we have to pivot, and that's what we do or a small business, we can absolutely do that. But it does create a lot of price pressure and certainly a lot of competition at the shelf that you know, the over three thousand small distillers in this country now have to contend with where's all that supply.
Going to go?
It's going to come right back here in the United States.
Yeah, how much has that changed in your business story and how you think about twenty twenty five? Alley?
Great?
Yeah, So what it does for us, it really concentrates what we do at home. So we're based out of Holland, Michigan, right there on the lake Shore. We're super proud of it and we love it, as are the Michiganders all over the state. And so what we do is we
were concentrating our strategy to be experience based. So we're going to reopen our tasting room here very soon, and it's going to be an experience where you can come, you can sit down, you can connect, you can talk maybe about how tariffs are hurting your business, you can celebrate the best of what we have, which is an American spirit.
Well, you know, it's interesting too, the whole story of tariffs. As you it's obviously changing your plans for going overseas. There are concerns though that you know, all of this ultimately is going to impact As you said, this impacts farmers, drivers, So many people get impacted potentially by tariffs and not
being able to access markets outside the United States. Are you beginning to think about a slowdown in the US then as a result, are you beginning to think about a possible recession and making business plans for such?
Oh, we certainly are. I think you know, we've seen a lot of the what we do at craft cos we've sort of we look at the broader context and so we're seeing the larger producers start to pause production. We haven't seen that for many, many years, right, we had this huge bourbon boom going back to two thousand and five all the way up through COVID. You know, we've all heard about the whiskey glut and the COVID hangover, and things are slowing down and in the industry we
call that normalization. So we very much see this as cyclical, not structural. We've certainly weathered tough times in the spirits industry before. But to your point, Carol, like it really is the hardworking Americans, the corn farmers, the truckers, the detillery workers, the barrel makers, the bartenders, the service the communities that ultimately depend on this for economically economic reasons,
but then also just to connect to connect community. I think that's gonna it's gonna be tough road, Allie.
Is there a belief and I think this is something certainly everyone across the US and those of US report on policy out of the White House are trying to gauge, especially since as tariffs have been talked about since President Trump came back for a second term. You know, we've heard things and heard, you know, something different potentially an hour later or the next day, and so it's fluid,
is how we are describing it. Is there an expectation that potentially this is a shorter term thing and that ultimately overseas markets will reopen again, or is there a concern that other markets are getting nervous about what the US is as a trading partner, and we'll look for longer term solutions to get whether it's alcohol, whether it's their bourbon, whether it's what have you in the future. I'm just curious if you can game that out.
Yeah, it is.
Game of ping pong right now. I think that's why so we take the stance, at least in our small business, of being flexible, of rooting down into what we can do domestically right now, and we've got a fantastic distribution network. We really do have good partners that way, but they're
experiencing pressure as well. One of the other things, you know, I think that's really interesting about this is that spirits is unique and that you can't make tequila or bourbon, which are very designated, distinctive products that can only be
produced in certain geographical areas around the world. That's very unique to the use and you know, to even argue on the other side of it with champagne and with Conye right like, So it really is something that affects all of us, and I think generally in the spirits industry we're all very cooperative. I think we've been the model for what is fair and reciprocal trade, zero for zero tariffs, as you mentioned at the top, since nineteen seven. So that's you know, it's we've done it well, We've
done it right. We hate to see that.
What would you say to somebody listening you're watching right now who says, wait a second, if we put tariffs the US, that is two hundred percent tariffs on all alcoholic products shipped from the European Union. Shouldn't you embrace that, Ali, because you're an American company and then you don't have to compete price wise with the imported gins, the imported vodkas, the imported spirits.
Yeah, I can see where that might be the case. I think for US, a rising tide raises all boats, and that is that is something we've done for a long time. It's something we believed in Competition is never a bad thing. It creates innovation, it creates new categories. So yeah, we absolutely want to see you.
So you're in You're in Alexandria, Virginia right now, You're close to the US Capital. Do you Are you able to lobby? Are you able to communicate your concerns to Washington DC?
Oh?
For sure. In fact, I'm part of craftc is a part of DISCUS. I sit on the Craft Advisory Council. I'll be at the DISCUS Annual conference here in a couple of days Wednesday through Friday this week, and there certainly is an active effort underway to get to Capitol Hill and say listen, we fully support the objective to protect people, to protect jobs, to be America first. We
absolutely support that. What we're looking out for here is jobs, economy, innovation, trade relationships, and the long term health of the industry as a whole.
Allie, what can you tell us about the consumer and consumer strength at this point? And maybe I don't know. It's a case of what the consumer was feeling at the beginning of the year and what they're feeling now. If you're noticing any change.
Consumers they drive what we do, right. Consumers are all about preferences. When you know, when lifestyle shifts happen, that's I think that's something that challenges us to respond. I mean, we are consumers ourselves, and so often I can speak for my company when we're sitting around the table and we're trying to figure out what could be the next great thing. We did this several years ago with a
product we have called cigar Bland. We were the very first at Joseph Magnus to bring that to market, and that really was just born of things we like, right, what do we want to see in the market. And so today I think the customer is saying, what do you have for me? What do you have that's different. What do you have that fits my lifestyle?
Right?
How can you dazzle me right? Keep me interested? So they're very very sicky. You know, everybody does a ton of research today, right, and we're thanking you for it.
They keep us on hard tow just quick to follow. But in terms of actual consumer demand, our consumers slowing down? Are they being pinched? Are you seeing any signs of that?
We are seeing a little bit of a slow down. Like I said, we call it normalization, but we're seeing consumers make not worst choices. They're actually making very healthy choices. They're all about quality and not quantity.
Now, all right, going to leave with They're great to get some time with you. Thank you so much. Ellie Anderson. She's chief executive officer of Craftco. Joining us from Alexandria, Virginia.
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