This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. And straight ahead on the program is inflation. What the Fed is really watching this coming week. I'm Tom Busby in New York.
I'm Caroline Headge in London, where we're looking at the Bank of England's inflation fight ahead of its May rate decision.
I'm Keiley Lynes in Washington, where President Biden is gearing up to meet with congressional leadership on the debt ceiling.
I'm Ryan Curtis in Hong Kong. Where does Asia sit on the pluses and minuses of AI.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg E Love Them Free on New York, Bloombergen ninety nine to one, Washington, DC, Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Sirius XM one nineteen and around the world on Bloomberg Radio dot Com and via the Bloomberg Business App.
Good day to you.
I'm Tom Busby, and we begin today's program with the Fed's public enemy Number one, the fight against inflation, and this week's consumer price index and producer price index all about inflation. Joining me now to talk about this and whether it's what the FED is really watching at this point. Bloomberg's Global Economics and Policy Editor Michael McKee.
Michael, welcome, Oh, thanks Tom.
Well, we're coming off another rate hike from the Fed, the tenth one since just since last March. The central Bank's benchmark lending rate at a sixteen year high a rate a range of five to five and a quarter percent. But inflation is still hot, hot, hot. What do you think of that, Michael?
I think the Fed has more work to do. That sounds like Jay Powell speaking when I say that they know that they are not there in terms of getting anywhere near their target yet. The inflation rate is still more than double the two percent target. But they do have ten rate cuts in the books, rate increases rather in the books, and that the full weight of that
has not hit the economy yet. So they're betting that they are now in a position to be restrictive, that the FED funds rate is a restricted level, restrictive level now for the economy, and then it will just take time to tighten credit conditions and lead inflation to go lower, So they're going to wait and see. It means that the inflation numbers become even more important. As long as they don't go back up, then the Fed is not going to be raising rates again.
And they have gone up, they've gone up, they've gone down. It's very fluid the inflation readings.
Yeah, it depends on how much they were to go up. Now we're looking for in the CPI next week a relatively large rise in the headline number, which would probably be attributed to things like energy and food. The core is expected to go down, and the core is what the Fed is more concerned with. Higher on a year over your basis, but that's expected to decline and that would tell them that they're still on the right track. It's just going to take a while.
And as they always say, data dependent, and by that late June meeting, we're going to get two months worth of jobs data, CPI, PPI, consumer spending reports. So there's a lot to consider for the Fed.
Yeah, one gets tired of saying data dependent, but they really are in this case because now they've specifically hung their next decision on the data they had been saying month after month or meeting after meeting that they anticipated having to raise rates more, that they weren't at a point where they were restrictive. Now they're at that point, and it's a question of the data telling them whether they are accurate in estimating that or whether they think they need to do more.
And the inflation target they have and they've had for a long time two percent, But the latest personal consumption expended your price index, as you said, more than double that for point two percent in March year over year. Now things are a lot better than they were, let's say last summer, when there was you know, an all time high or at least a you know, forty year high. What are we looking to see in the consumer Price Index on Wednesday? The PPI on Thursday.
Well, the CPI, as I mentioned, is likely to go up on a headline basis, and the economist surveyed by Bloomberg think it'll tick down to a three ten percent gain for the core, which is what the Fed is more concerned about. On a year over year basis. That brings the core CPI to five point four percent from five point six percent. It's measured differently than the PCE.
So the numbers are a little off, but we do get a sort of a much broader look at the categories of inflation in the CPI, So everybody wants to see, you know, where inflation may be, which is why it gets a lot of attention. The PPI is expected to rise a little bit, but it fell in the prior month, back in March, and so for April a small rise isn't going to change the year over year situation for a final demand, it'll bring it down. So at this point it looks like with both of these on a
year over year basis, we're making progress. The question is is it going to be enough progress or will there be a surprise out there and will we see inflation rise? And then the Fed have to start thinking about or the markets at least start pricing a rate increase.
Oh well, we all love surprises, but not that kind now, now rate increases and the converse of that, of course, rate cuts. You spoke to Fed Shair Jpowell about all this this past week. Let's listen now to what you said and his response.
Can you tell us something about what your policy reaction function is, your policy framework is going forward? When you look at the economy at the next meeting. Are you looking at incoming data, which is by definition backward looking. Are you going to be forecasting what you think is going to happen? Are you ruling out the rate cuts that the market has priced in?
It didn't catch the last part, ruling markets have priced in rate cuts by the end of the year. Rules are sorry, Okay.
Got it.
That's what are we looking at. I mean, we look at a combination of data and forecasts. Of course, the whole idea is to is to create a good forecast based on what you see in the data. So we're always always looking at both, you know, and it will, of course, it'll be the obvious things. It'll be readings on inflation, It'll be readings on wages, on economic growth, on the labor market, and all of those many things.
I think a particular focus for us going now over the past six seven weeks now and going forward is going to be what's happening with credit tightening, our small and medium sized banks tightening credit standards, uh and and is that having an effect on on on loans, on lending and you know, so we can begin to assess how that fits in with monetary policy. That'll that'll be an important thing. I just you know, we'll be looking
at everything. It's again, I would just point out we've raised rates by five percentage points, we are shrinking the balance sheet, and now we have credit conditions tightening, not just in the normal way, but perhaps a little bit more due to what's happened.
And we have to factor.
All of that in and and make our assessment of, you know, of whether our policy stance is sufficiently restrictive. And we have to do that in a world where policy works with long and variable legs. So this is challenging, but you know, we we will make our best assessment. And that's that's what we're thinking.
What about the idea of rate cuts.
Yeah, so.
We on the committee have a have a view that inflation is going to come down not so quickly, but it'll take some time. And in that world, if that forecast is broadly right, it would not be appropriate and to cut rates, And we won't.
Cut rates if you have a different forecast.
And you know markets are have been from time to time pricing and you know, quite rapid reductions and inflation. You know, we'd factor that in, but that's not our forecast, and of course, the history of the last two years has been very much that inflation moves down. Particularly now if you look at non housing services, it really really
hasn't moved much and it's quite stable. And you know, so we think we'll have to demand will have to weaken a little bit and labor market conditions, conditions may have to soften a bit more to begin to see progress there. And again, in that world, it wouldn't be it wouldn't be appropriate for us to cut rates.
Okay, so Pal told you this is no time to cut rates, that there's still a lot of work to do, your drive and lower. So how much worse could it possibly get?
Well, it's hard to see it getting significantly worse. We're seeing the labor market loosen up a little bit and we're seeing inflation come down. Some of those two things tied together. Supply chains have normalized, so those aren't a major issue, and commodity prices have sort of flattened out, except for energy. So overall, the prognosis is for inflation to keep coming down. It's not the rate of the level rather of inflation, it's the rate which it's moving.
That people are diverging from the FEDS view. The FED things it will take time that they've gotten the low hanging fruit, and it will take significant time to squeeze the rest of the two point two percent or whatever inflation out of the system, and the markets seem to
think that it'll go much faster than that. We'll see a big drop in overall inflation over the coming months, either because the FED is suggest successful or because we go into a recession, and either way, the market wants to price in rate cuts and the Fed is disagreeing with that. And one of their concerns, and one of the concerns they had in sort of announcing a pause without announcing a pause, is they didn't want markets to go too far. They didn't want people to start pricing
in further rate cuts. But that's exactly what happened after pal suggested in that answer that maybe if inflation did come down fast, then the markets might be right. He's not arguing that it's going to but just that little crack was enough for traders to slither through.
Michael, thank you. That is Bloomberg's Global Economics and Policy editor Michael McKee, and coming up on Bloomberg Day Break weekend, the Bank of England's fight against inflation. I'm Tom Busby, and this is Bloomberg. This is Bloomberg Daybreak weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Up later on our program the dead ceiling and what the
fight over it means for the economy. But first, UK economists expect just one more quarter point rate hike from the Bank of England next week, with rates peaking at four point five percent, very different from the marketview. For more, we go to Bloomberg Daybreak Europe co host Caroline Hepger.
Tom, the Bank of England is deep into its drive to tame inflation, with traders betting on a five percent potential peak rate in the UK, but the endgame is still really far from clear. So joining me now is Bloomberg's chief UK economist Dan Hanson. Great to have you on the program. Dan, the path ahead then for the Bank of England in your view now.
Yeah, I mean, I think you're right about the uncertainty you've got. In the last few data releases, You've had really big surprises on the inflation front, and actually in the most recent labor market report, you had a big surprise on wages as well, So I think in the very near term and just thinking about the next meeting, I think it's it seems very likely to us and to the market, and I think most economists that they'll
liferrates again twenty five basis points. I think the question then is a lot around the guidance that they provide. Are they still going to focus on the idea that they'll only liferates again if they're surprised by the data, and if that's the case, I think it is uncertain whether they will raise rates again. I think there's a question whether they want to be a little bit more forceful this time round, given the scale of the surprises
that we've seen in the data. But I think our base case is that they'll liferates in May, and they'll also liferates in June. And the reason we think they'll do that is because the data, particularly on core inflation, has been very very sticky, and I think they'll want to lean against that sort of risk of inflation persistence. And I think at the Bank there is this They've talked a lot about overtightening, but I think actually if you look at the whole, the Committee as a whole.
I think there's probably a view that it's better to do a little bit more than a little bit less at this point, and as you said at the start there, they've come so far they really want to just finish the job off.
Yeah, I mean, the consumer price index in the UK and double digits above ten percent. But there are concerns, aren't there, around banks breaking particularly in the US in Europe, consumers struggling with food and energy bills, but also rising interest rates. How concerned do you think that the bank is going to be about suchly financial stability and other parts of the economy that may suffer after such a rapid rise.
I think they'll be very, very concerned.
I said they are.
They're one of the only major central banks that have voiced concerns about overtightening. Now, I think when they balance the risk of overtightening versus doing too little, I still think they're probably erring towards worrying about doing too little. But nonetheless, even you know, chief economist Hugh pill at the Bank has warned about it. We've got some very vocal doves at the Bank of England talking about overtightening, so I think events in the US will certainly play
on their mind. Here in the UK, financial conditions have after the sort of where things reach fever pitch following SVB and credit Swiss, things have eased off a little bit. So I think you know there is a there is a clear path to higher rates. That's not going to be an impediment to than lifting rates further. I mean, I think one one area of resilience, and they'll take some in some ways I guess takes some comfort in
though it makes their inflation fight harder. Is the resilience of consumer spending in the economy in general, which has held up much better since the start of the year than many had been expected. But as I say that, that makes their inflation anyways, that makes her inflation fight harder because you've got a stronger economy, a stronger labor market, and ultimately that means it's harder to get inflation to settle at two percent as it begins to drift downwards.
Okay, Dan, stay there. As we're thinking about the Bank of England's decision next week, I also wanted to bring in an interview that I did with Stephen King who's the senior economic advisor at HSBC, so really renowned economists. Of course you're nodding vigorously. He has a new book out called We Need to Talk About Inflation, and he was so interesting on this point of accountability, responsibility of central bankers, the stickiness of inflation. Where we go from here.
Just want you to have a little listen to a snippet from that interview.
Every crisis is different, but at the same time there are some similarities and you can tease them out. One of the similarities is that most crises, inflation wise, start with us series of excuses for why inflation is different from what people had expected. So it's energy price shocks, it's food price shocks, it's price gouging, it, whatever it might be. But actually, looking back through history, and I've looked through a lot of history, it's probably fair to
say that money plays some kind of role. That if you have overduse monetary policy, or you're debasing the coinage, or you're coin clipping or whatever it was a thousand years ago, what you're now seeing is a situation whereby I suspect monetary policy which is far too loose. During the pandemic, and in particular remained far too loose after the pandemic came to an end. So you had this sort of situation where by central bank has feared a
Great Depression mark too, but that never materialized. We had a series of declines in GDP which was similar to the Great Depression, but we did not have the multiple bank failures. We didn't have the mass bankruptcy is the mass unemployment. We didn't have any of those kinds of things coming through. And as a consequence, I think that we've ended up with excessively loose monetary conditions which have
helped drive the underlying inflation process. And of course, when inflation first picked up, people said, it's just semi conductive prices, it's just prices of secondhand cars or whatever. But we now know that it's not just semi conductive prices or secondhand cars. It's a whole range of goods, a whole range of services, and now in some countries at least
wages also moving up in nominal terms. So inflation, I would suggest, is much more embedded than the majority of central bankers and forecasters expected.
Do you think that central bankers have taken on board that idea that monetary policy was too loose for too long, that they are partly to blame.
Well, I think that they are keen to avoid blame. And part of the reasons for avoiding blame, of course, is that if they're blamed, they then come under tremendous political scrutiny. You know, what do these technocrats get wrong? And of course the most important thing for central bankers to try to retain the independence of the central bank. So I think there is a weird kind of desire to blame everything other than themselves for what is actually transpired.
But when you think about it, the fact that interest rates remain so low for so long that during the course of twenty twenty one, inflation was steadily picking up in the US, in the UK, in the Eurozone, and action in terms of monetary tithing didn't really take place until the very end of that year or into twenty
twenty two. I would suggest that there was effect too little action too late, which is why now we've got the situation where by everyone's panicking about how far rates will have to go up because you're trying to sort of conduct a handbreak turn when the economy effectively has been sort of not much growing quickly, but there's been showing signs of building inflation and pressures for much longer than people had expected.
That was Stephen King, Senior Economic advisored HSBC, who was talking to a Soboomberg radio about his new book We Need to Talk About Inflation, So very interesting on that topic of course, right back to you, Dan So just going back then to the Bank of England and talking about the kind of bigger themes around why inflation is so sticky right now. This is the central challenge for economists now and to understand how sticky it.
Will remain, absolutely absolutely and I think the reason you've had this what I would call a perfect storm where inflation has gone up for reasons outside of the troll of central banks, to the most extent thing through energy prices, food prices, what traditionally we call externally driven inflation. But at the same time you've had a very very extremely i should say tight labor market and those two things
have combined. You've had and you've seen workers bargain for a bigger share of the pie and you've seen wage gains go up. So I think for all central banks it's really a case of watching first of all, in terms of the sort of order of where you might see things begin.
To caol off.
You've got first it's the economy, then it's the labor market and unemployment. Then it's wages, then it's inflation, and it tends to sort of happen in that order. So at least in the UK, with demands holding up, there isn't a sign yet that the labor market can really loosen to any great extent that will put enough downward pressure on wage growth to ultimately deliver inflation.
Back to Togg, Dan, thank you so much for your time. Bloomberg's chief UK economist, Dan Hanson, thank you so much for being with me. I'm Caroline Hepge here in London. You can catch us every weekday morning for Bloomberg day Break. You're at beginning at six am in London. That's one am on Wall Street.
Tom, thank you, Caroline, and coming up on Bloomberg day Break weekend. The fight over the dead ceiling is intensifying. I'm Tom Busby and this is.
Bloomberg broadcasting live from the Bloomberg It a active brokers studio in New York. Bloomberg Elemon three oh to Washington, DC, Bloomberg ninety nine one to Boston, Bloomberg one O six one to San Francisco, Bloomberg nine sixteen to the country, Serrius XM Channel one nineteen to London DAB Digital Radio, and around the globe the Bloomberg Business app in Bloomberg Radio dot Com. This is Bloomberg Daybreak weekend.
Tom.
Let's be in New York with your global look ahead at the top stories for investors in the coming week. The clock is ticking on the US debt ceiling. For more, Let's head to our Bloomberg ninety nine to one newsroom in Washington and sound on host Kaylee Line.
Yeah, that's right, Tom. We learned this past week that the X state could be just weeks away. Treasury Secretary Jenny Yellen writing in a letter to Congress that the Treasury may not be able to meet its obligations by early June, possibly as early as June first. That letter seemed to set President Biden in motion. He called up
congressional leadership. House Speaker Kevin McCarthy, sent a Minority leader Mitch McConnell, and Democratic leader Senator Chuck Schumer, and Congressman junkin Jeffries and asked them to meet with him this coming Tuesday, May ninth. It's the sit down we've all been waiting and waiting and waiting for. The question is how much progress can really be made between Biden and
Speaker McCarthy. They want very different things. The President has consistently called for a clean debt ceiling raise with no negotiation, and McCarthy wants to talk spending cuts. How do they meet in the middle. Let's get some perspective from our all star panel. Bloomberg White House reporter Josh Wingrove and Congressional reporter Steve Dennis are both joining us.
So Josh, let's start with you.
I understand it is a step forward for President Biden to call this meeting, but he called it for this coming week, more than a full week after Yellen's letter was delivered and the June first suggestion really came into the picture.
Why the wait?
Doesn't this feel like a little late to the game.
Yeah, I mean we're starting to really come up against it here, absolutely, And you know there's reasons why they're waiting till then, including the Speaker's travel and Steve can talk to us here shortly about how they're sort of running out of time, that the House, Senate, and President are all in the same city at once, so that's
sort of adding pressure to the clock. But you know, heading into this, I think we should temper expectations because the White House message has not been hey, we're coming in with an offer. Hey, you know, these are the kinds of things we hope the mcarthy is going to negotiate on, or hey, we think we should do a short term extension. Instead, they're saying that Biden is going into the meeting saying he wants to underscore the importance
of not defaulting on the speaker. So you know, that sounds like people are still douggy, and that sounds almost like talking past each other rather than talking with each other. So I think we should temper expectations. But there are signs to look for as to whether they'll have some kind of deal. The White House hasn't closed the door to certain extreme sort of unilateral measures if it comes
to that. They haven't closed the door to a short term, you know, stopgap type of extension or suspension of the dead ceiling. So these things are simmering, but we're running up against it, and there really is no sign that you decide right now is blinking.
So, Steve if on the White House side, this maybe is going to be more of a talking too than actually talks or any kind of negotiation. Is that true on the congressional side as well? Are we likely to see budging on the end of McCarthy and also McConnell, who is going to be in the room too, even though largely he has been removed from this conversation so far.
Yeah, so, you know, I think the Democrats really want McConnell to sort of roll up the sleeves and do what he's done many times in the past and sort of negotiate a way out of a cliff. And McConnell's made clear to us in press conferences that he is not going to do that role this year, that basically he sees his role as being sort of a wingman for McCarthy, and that any deal is not going to come out of the Senate, even said the Senate's irrelevant this time, and that the deal has to be between
McCarthy and Biden. The issue is that markets are already moving, We're already seeing bond selling off for next month, and I've covered a lot of these in the past, and when markets really start moving, that amps the pressure up on both sides dramatically. What we really have is sort of like a decade long fight over the leverage over the dead limit, going back to twenty eleven, when Joe Biden ended up cutting a deal with Mitch McConnell for like a ten year deal on spending cuts in return
for a dead limit increase. Right, The sort of the lesson that the Democrats learned from that and took from that is that that really sort of handcuffed the last six years of Barack Obama's presidency. They don't want to go down that road again. They don't want to be
held hostage again and again and again. And that's what I hear in the hallways from all the Democratic senators that they have to dig in so that even they don't even like the idea of a short term deatlimit because they see that as just, you know, more damage for the economy. Even getting close in twenty eleven really tanked the S and P tanked consumer confidence.
Well, it was two weeks before the X state that ultimately the US's credit rating was downgraded, so it's.
Right, and you already you already have the you know, some of the credit rating agencies making similar warnings this time around. But you know, in the past, it's has taken markets to put the pressure on lawmakers before they've budged. And when you look at McCarthy, he you know, barely became speakers fifteen yeah ballots, and it.
Was really hard for him to get the two hundred and seventeen vote needed to pass his bill. So it kind of raises a question of how much wiggle room he really has. And Josh, just on the subject of wiggling room and negotiations which McCarthy says that he wants, why isn't the White House using this as an opportunity to push for revenue raising measures for higher taxes if what the Republicans are saying they ultimately want is deficit reduction. There are two sides to that.
I think they think they would. I mean, the White House basically wants to decouple the debt ceiling site from the spending discussion, right they they view McCarthy as sort of, you know, hanging the proverbial hostage up a ledge, you know, threatening to drop them, and the White Hose says, you know, like like you know, let go bring them back on on TALLI ground and then we'll talk. That is sort
of where we're at on it. So you know, Biden put out his budget has three trillion andcumulative depthicit of reduction over ten years. McCarthy's is more in the four range. They're completely different ways of getting there. Biden more on the revenue side, you talked about, McCarthy more on the cut side, and so you know they're still talking past each other. But the whole question is is the debt
ceiling a bargaining ship or not. Biden is trying to saddle McCarthy with this collapse that may happen here by saying it's Republicans who are holding the debt ceiling hostage. Democrats favor raising it or suspending it and then having the conversation about spending. But McCarthy's position is we have the House, we had to decide what the priorities are for the House, and that we see these things as
Lincoln pretty intractable right now. We just don't see where it's going to go, and of course we're running out of time for them to stick the landing that really is the tricky part here.
Well, it strikes me that Josh just said, you know, they have the House, but Steve, they don't have the House by that much. He has a very small margin to work with, which comes back to this idea of how hard it was to get him the votes he needed the first time around. So realistically, where is their room within his caucus for things to come out of that package? What are Republicans willing to lose if there are negotiations to be had.
You know, the thing that McCarthy has he has not raised, like he has not said I need all of these cuts in my bill is the only thing he said is there cannot be a clean debt limit. And if you think about the position McCarthy's in where he has just a four vote majority, really he really can't come back completely empty handed. He needs to have something he can point to to his conference that says, hey, we
have some leverage. We're going to get some of the things that we want, either some kind of a handshake deal committee, you know, but also probably something real and the in it you have anything real attached to it, then the entire White House argument that they're not going to give in anything for the dead limit, you know, because then limit will be a bargaining chip into the future.
And that's where, you know, some of these sort of break glass scenarios start looming large because if it really is intractable and McCarthy simply will not agree to a clean deadlimit in grease and the White House keeps to their position, you know, then you start thinking, Okay, well, will they do these premium bonds to pretend that debt is not as big as it is? Will they do a platinum coin? And until the White House really shuts
down those options, they start looming ever larger. As we get closer to that cliff.
Diving moment yep, And we're getting closer every day and getting closer to that important conversation happening on May ninth. We'll see how much progress really can be made. Thank you both so much for joining us. Can't wait for Tuesday. Bloomberg White House reporter josh Win Grove and congressional reporter Steve Dennis, Thank you both, and Tom, we'll send it back to you.
Thank you.
Kaylee reporting from our Bloomberg ninety nine one newsroom in Washington, and you can hear sound on with Joe Matthew and Kaylee weekdays one to three pm Wall Street Time, right here on Bloomberg Radio, and coming up on Bloomberg day Break Weekend. How hot could tourism get in Japan this summer and what does it mean for the country's economy. I'm Tom Busby, and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top
stories for investors in the coming week. I'm Tom Busby in New York. Chatbots shaking things up in Asia, also sounding alarm bells for some For more, let's go to Hong Kong and Bloomberg day Break Asia host Brian Curtis and his colleague Doug Krisner.
Tom More and more. Companies are rushing out new artificial intelligence projects, including some in Asia, and some companies are also holding back, preaching caution.
AI capability are moving so fast it's making some people nervous. One example Jeffrey Hinton. He's one of the pioneers of modern AI. He recently quit his job at Google's Brain AI division, Hinton saying that he wants to be able to speak out more freely about the dangers the technologies can bring.
Dougan, I thought we would take a closer look at some of the positives and negatives, particularly with some attention given to Asia joining us as lad Sevov Bloomberg Tech editor who is a specialist on artificial intelligence. So we've had a lot of interesting points here of late, not only the one that Doug mentioned there, but Samsung banning people from using AI, worried about what would happen if some of the information is stored on servers outside the country.
In your view, are we moving too fast here or is this to be expected?
Well, with respect to Samsung, I think it's a good precaution that the company's taking. What reedy Samsung is concerned about it has to do with it knowledge itself. So maybe we just dive straight into the geeky partis from my favorite I will also correct you, I am not a specialist in this sort of AI.
I don't think anybody else.
It's so novel, it's so new, and there is so much that goes behind that label.
With AI. It's kind of like saying computer. It's so general.
It covers so many different applications and technologies. The thing that we are already discussing with AI in the current moment is really the chat GPT class is these large language models that the likes of Google and chat GPT developer open Ai have really popularized with respect to that.
And this is where Samsung is being cautious. If you put any information into it, it is not so much insecure with respect to open ai acting your information, but that info then trains the bot to answer queries from others.
So if you're Samsung and you put any proprietary software or code in there, somebody like me can come along and say, hey, tell me about Samsung's proprietary code in Android devices, and the bot doesn't have any sort of guardrails for the most part, and it will just bid out what information.
Has Recently, there was an open letter it was signed i believe by Elon Musk and thousands of others calling for a pause on development of artificial intelligence. It's a bit like putting the genie back in the bottle. Though at this point, don't you think is there any way that there could be some kind of global agreement just to slow down the rate of adoption here?
Oh?
You exactly right. There is no chance of that happening.
We have several examples here in China of start of founders essentially saying I just needed to start an AI company. It's once in a decade, once in several decades opportunity. I don't have a name for the company yet, I just knew I need to quit my previous job and.
Jump into this.
It opens up such an opportunity because everybody is the start in line today. When you think about tech, over the past at least decade, probably longer, there hasn't been the opportunity for somebody to search and become the next Facebook, Slash, Meta, or the next Google or Twitter, even just because the leaders are the leaders. They have the money, they have the investment, and they just keep your investing and they
keep hiring the best talent. Now, we've had big waves of layoffs, especially in the US, with really highly experienced, highly talented and well connected people in Silicon Valley and beyond, and those people are now looking at AI and the
two moments coincide. So AI gives this big new opportunity where everybody from the big guys like Google and Microsoft and the ten sent and I Barbers here in China starting from Crown zero effectively and seeing how they turn the tech into something that is a product, and then you have the opportunity for small guys to get in there and just have a better idea.
La thanks so much for sharing your insights with us. Flat's have off there, Bloomberg Tech Editor, I'm Brian Curtis along with Doug Kristner. You can catch us every weekday here for Bloomberg day Break Asia, beginning at six am in Hong Kong and six pm on Wall Street.
Tom.
Thank you Brian and Doug. And that does it for the this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at five am Wall Street time for the latest on markets overseas and the news you need to start your day. I'm Tom Buzzby.
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