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Today it's another major earnings week, but we'll break down some big tech earnings from this week. Spoiler alert, the AI fuel spending search keeps racing.
Ahead, plus that AI frenzy is now spilling over to heavy machinery and oil fracking. We look into how Caterpillar fared when they reported this past week.
But first, Verizon, the US largest mobile service provider, reported a loss in wireless phone subscribers in the third quarter as a new chief executive officer laid out an aggressive growth strategy to reclaim market share.
Dan Shulman, a former CEO of PayPal, was appointed just a few weeks ago to replace Hans Westbrook over at Verizon after two straight quarters of subscriber declines and a stock performance that has lagged the two main rivals.
For more, we were joined by John Butler, Bloomberg Intelligence senior telecom analyst. I first asked John to break down Verizon's earnings.
So this first of all, I'll tell you the dividend is safe, Paul. I mean, that's the good news for Verison. And it's safe because new CEO Dan Shulman, who recently replaced Hans Wesperg at the helm of Verizon, sort of laid out is his new plan for growth. I think the real watchword of the day here for Verizon is to pivot from a very technology or network oriented company to now Shulman is going to turn them into a
very consumer focused company. I think he's really going to take a page out of T mobiles book, but in terms of promoting, I think, unlike T Mobile, he's going to do it in a more discipline manner.
So I guess as I think about the wireless business, I mean, we all have a phone in our pocket, it just seems like the only way to grow revenue is either add subscribers, which can be expensive, or raise prices, which how long can you do that? How do you grow the business?
I mean, that's one thing he talked about, was how to grow the business here. And what you're seeing with the telecoms is they're all pushing more heavily into broadband. They're doing a very good job there with Verizon, like AT and T, they've got two avenues of growth there. One is fiber broadband. Verizon is buying frontiers, so they're going to onboard about a new fiber subscribers in the new year. And the other is fixed wireless access, which is sort of that wireless link into the home. It's
been very popular with people. So once you get those broadband subscribers, probably more than half of them don't have wireless, and so Verizon's game is to continue to build that broadband base and then cross sell wireless.
Into that base.
You've also got switching activity that goes on in any given quarter. No matter how hard the carriers try, you're always going to lose some subscribers and they're up for grabs, and I think for Verizon now was looking to get their fair share of those. And there's also modest, very modest organic growth in the business through population growth and some immigration, although immigration is down this year.
YEP.
I don't even know where we are, John, in terms of the five G, six G, four G. Are there technological changes coming to the wireless business or are we at kind of where we're at in terms of capacity and usage and so on.
So capacity is on the rise. Spectrum is the lifeblood a wireless The more spectrum you have, the more network capacity you have. To put it in Layman's terms, for the average smartphone user, that means higher download speeds. And Verizon is currently activating what's called cband spectrum. It's very high capacity, and so you're going to see their average network speeds across the nation edge up over time as
they activate that spectrum. In terms of the generational upgrades that you alluded to, the three G four G five G. We're mid cycle now. We launched five G about five years ago, and I think you'll see an upgrade to six G as we get towards twin thirty. But right now it's sort of status quo on that front.
I guess the issue for of a Verizon is now going more customer centric and as you mentioned, when I read that, it seemed just like what T Mobile's been doing for years and years and years. Gone back to John Ledger, Is this a strategy you think can be successful for Verizon?
We'll see.
I mean that's their big challenge, right I mean, T Mobile was always the branding king. They did a great job there, just as you said, starting with John Ledger, who made himself the face.
Of the brand.
They really did a terrific job there. They went out as a sort of a hip, counterculture, consumer friendly brand. Verizon was at the opposit opposite end of that spectrum, leaning into their great network coverage. They still have that. They have probably the best coverage in the industry, but in terms of network speed and performance, the other two AT and TS and T Mobile have really caught up. So the challenge for Verizon now is to nurture a more consumer friendly brand image. Dare I say I'm a
fun brand image? I have to chuckle. That really isn't something we would associate with Verizon. But I think Shulman, given his background at other telcos and also in a reviving PayPal, has some experience there with branding, and I think it's going to be interesting to see he does with Verizon to improve that brand image.
Our thanks to John Butler, Bloomberg Intelligence Senior Telecom Analyst.
This week.
Boeing on Wednesday announced a four point nine billion dollar accounting charge and delayed debut for Triple seven ex Jetliner, every reminder of the long covery ahead for the US planemaker, even as rising aircraft deliveries bolster its cash.
The setback underscores the challenges ahead as CEO Kelly Orbrok works to stabilize Boeing even as the company benefits from surging air orders with support from the White House.
For more, we were joined by George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense and Airlines analyst. We first asked George for his key takeaways on Boeing's earnings.
What I saw from earnings is that the commercial airplane business had about a four hundred thirty million dollar loss when you back out that about five billion dollar charge for Triple seven. I think that number was a bit better than consensus, a little bit better than what we were looking for. I think it's another sign that commercial airplane is getting closer to break even. And then in the cash flow statement, Boeing was cash flow positive at
an operating level and free cash flow. It was about a billion dollars in the operating level and free cashflow a couple hundred million. I think that, you know, that's
above where consensus expected it. We saw five billion dollars an inventory get unlocked during the quarter, meaning you know, Boeing has been sitting on something like ninety billion million dollars inventory that is like eighty seven I think was exact number, and that came down to eighty two billion because they've been buying from suppliers, putting things on shelves as they try to keep the supply base healthy while they've been going through some of their challenges here, and
now they're starting to take that, you know, that inventory off the shelves, put it into airplanes. That's gonna that's going to hyper drive some of the cash generation of Boeing as they bring that inventory I think down to probably a sixty or fifty billion dollar level. So I think those are both big positives in the charge was largely non cash for an airplane that I think is still very competitive, just gets delayed a bit.
All right, how about the deliveries of the seven thirty seven. What's the guidance there, George, because we know that's the big cash driver.
I think, yeah, so they're you know, Boeing is kind of out of the game of giving guidance right now, but they've they said, you know, the FAAS allowed them to go to forty two a month build rate, which would which would be above what they've done in in the last quarter. I think we've got a modeled at about forty four or forty five per month for the next three months because there's still some inventory airplanes they'll
deliver as as well as what they're building. Just heard Kelly Orpberg say on the call that he would anticipate sort of cranking up those build rates from forty two in increments of five every six months.
No sooner, obviously.
Won't break unless they feel like they've got things stabilized. So I think we've got a path here to hire build rates over, you know, to the end of the decade. So you know, I would expect that as they get a year down the road here will be probably break even in this business. You know, maybe a little bit longer, but I think we'll be break even in that business. And again that's I think all part of the turnaround
is getting seven three seven to perform. That's that's going to be the financial driver.
So Kelly Orpberg has now been CEO for just over a year. He started in August of twenty twenty four. I can't believe it's been that long already. I know, I know, and a lot has happened, clearly. And what I didn't realize is that Boeing is still facing some labor issues. Saint Louis Aria machinists still strike. They've been striking for more than three months. What does this say about Kelly Orberg's leadership and what kind of grade would you give him, George for his leadership so far?
Yeah, I mean I'd give him a very high grade. Right again, I think that, you know, the biggest thing he needed to do was like improve morale, improve quality, and it appears to you know, to be the case. I think, you know, the proof is again build rates the FA, returning some you know, giving Boeing the ability to go to forty two, and returning some of their ability to certify some of the airplanes. So I think i'd give it all high in Saint Louis right now,
Saint Louis is where the defense business is centered. Out of right now, the defense business not performing great, but getting better, you know. I think there's definitely more to come in the defense business as they start building the F forty seven, which is the sixth generation fighter that
they won, but that's still some preliminary work. My guess is that the sides are still a little bit a part on, you know, where they want to be for an agreement, and it's not as critical to get those folks back to the production lines as it was to get a commercial seven thirty seven machinists back to production lines. So he's probably doing the right thing for the business here, and you know, making sure he can get an agreement he can live with, especially in defense where it's harder
to bear increased costs. And again i'd give I'd give him high grades. I think the company's at a turnaround right now and doing well.
George about the thirty seconds left. Just we don't talk about the Triple seven much. How does that kind of figure into their portfolio, into the economics of Boeing.
Yeah, when it finally gets certified, it'll be the biggest airplane in production, So it kind of replaces seven four seven and A three eighty as the queen of the skies. A three fifty dash one thousand's the closest competitor. Can it can't be as densified, It can't have as many seats inside it, So I think you'll find a seat
cost advantage in the Triple seven. It's got core customers in those you know, in those Middle East carriers, those Asian carriers that are the big sort of East West connectors, And I think it'll be fine. I think the delay won't won't hurt its ability to be sold. And it's already got five hundred in the backlog all right.
Thanks to George Ferguson, Bloomberg Intelligence senior Aerospace, Defense and Airlines analyst, coming up.
AI demand is going so fast that the cloud giants are racing to catch up. How did that fare for some big tech earnings this week. That's next.
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Demand for AI keeps growing so fast that the cloud giants are racing to catch up. At least that was the message this week from tech giants Alphabet, Meta and Microsoft.
And the company they're looking to catch in Vidio. This week, the tech giant became the first company ever to have a market cap of over five trillion dollars.
The AI spent is not slowing down for more. We spoke with Ana rog Rana, Bloomberg Intelligence technology analyst.
See I think the common theme is that capital expenditures are going up, which means there to spend a lot more money to expand their data center footwork and need more chip capacity to take care of the AI demand that they are saying. So, I think that's the common message for all of them. When you look at Microsoft, I think their CAPEX numbers nobody was expecting would go up this much. I mean, we were expecting them to rise, but they basically came out and said, you know, we
thought we'll be fine by now. But they're still capacity constrained. The demand is coming through. They talked a lot about their open AI agreement, the revised one. You know, I still think they're probably in one of the better places than they have been in the past several years.
All right, let's just compare and contrast Meta and Google. We had talking about big CAPEX increases. Is that just the market saying, hey, we trust you Google with this increased spending. Maybe not so much over there at Meta.
You know, if you're looking at between both of them, Google is showcasing that they are seeing the benefit of AI in actual revenue generation from their cloud business. Cloud business accelerated, It accelerated last quarter as well. We're really seeing tangible benefits. Then you have Nthropic signing up with
Google Cloud to use their TPUs. They have the chip business. Also, the big question for everybody is, well, Meta, you're spending all this money, how are you going to monetize it, and they talk about, you know, they're going to monetize it internally through better ads and serving ads. Well they're still so me at some mean all the time. Anyway, the question is where is all this money going and how do you get it back? I think that's where
the dichotomy is between these two vendors. And Google has i think, done a phenomenal job of explaining to the market what their AI strategy is and why is it working so well.
So it's a matter of meta not telling a story to investors, a narrative that resonates with investors or that convinces investors the way that alphabet is.
See, when you think about it, spending five ten billion would be okay, But when you talk about spending you know sixty seventy eighty billion dollars of AI related you know, research going into your products. Well, where is the benefit of that?
How is not a new story that they're telling. They told this story last quarter, in the quarter before, and investors seem to like it.
Fair point. But when you look at now, Google is showcasing that we actually see the benefits and actual numbers that we are reporting. So between the two vendors. It's very clear what I can see on the Google side, it's not so much not so much clear on the Meta side.
And I think also another part of it is having used to follow that the stock is one of the reasons Meta was working so well over the last several years. It was a cost cutting story. After the metaverse debacle. You know, people were concerned about all the spending on the Meta rate, right, Yeah, it seemed like zeer. Yeah, they got that, they saw the light and they started cutting costs in the stock work O Thanks to Anna
rod Rana, Bloomberg Intelligence Technology Analyst. Next, we look at earnings from one of the world's biggest producers of heavy machinery, Caterpillar.
This week, Cat reported third quarter earnings and revenue that beat analyst estimates. The company stated their boost and earnings was driven by their power generators and turbines that keep AI data centers running.
For more on this, we were joined by Chris Chiolino, Bloomberg Intelligence Senior US machinery analyst.
It was a great quarter. You know, despite pretty elevated expectations coming into the print a bigger tariff headwind, CAT really delivered very solid three key results. It was really driven by higher volumes across all three of their core businesses, with particular strength and energy and transportation. Again, but I think, you know, one of the more encouraging signs that we took away from the results were that orders accelerated here in the quarter, and we also saw a backlog improved
sequentially to a record forty billion dollars. So we think we see you know, above average production and earnings visibility as we begin to think about next year.
Did the company say a lot about the power producing equipment including turbines and generators that have investors excited about it being kind of a derivative play to the AI story.
Absolutely, so, you know, we continue to hear more and more about AI and data centers and Cat's exposure there. Power gens probably you know, roughly thirty percent of the energy and transportation business, roughly you know, fifteen percent of the overall enterprise, but it continues to be the fastest growing part of the portfolio. They're bringing on a lot
of capacity here over these next three years. I think you really begin to see a step change as we move into twenty twenty seven, particularly on the large engines.
So there is.
More of a focus and investment on the energy and transportation business and it has become, you know, the biggest part of their portfolio.
Wow, are there other companies or let me put it this way, who does cat compete with in that segment of the business.
Yeah, so there's a number of different competitors, and it really breaks down on relative by size on some of the gen sets. Cummins is a is a big one, Siemens Energy, and then you also have a few other European and Asian players. But you know, this is certainly a market that's growing, you know, pretty exponentially.
Here.
Backlogs extend several years, so we think we have pretty good visibility at least through you know, the next three years.
Does this part of the business mean that Caterpillar will need to rely more on domestic market opportunities as opposed to global market opportunities.
So their footprint is the largest, the energy and transportation footprint is the largest in North America, But you know, I think the opportunity is global. They are a large global producer that they serve you know, essentially almost all markets around the world. I think, even particularly with an energy and transportation it's like something like one hundred different countries.
So while I think the immediate near term excitement is more focused here in North America, I do think longer term there's an opportunity international as well.
What's the company saying about impact, if any, on tariffs on their business now going forward?
Yeah, So tariffs were actually a much bigger headwind than we anticipated in the quarter, and even KAT I think it kind of shook out somewhere around a six hundred million dollar headwind in three Q. But margins, margins were better than expected, really pretty remarkably resilient despite these price
costs headwinds. Four Q will actually see a step up in the tariff costs, and then as we think about next year, you know, Kat's really been kind of hesitant to pull the pricing level on a lot of tariffs thus far. We think that's you know, more of an opportunity for them here in the near term to gain some market share. So as we think about twenty twenty six, it'll be interesting to see, you know, do they continue to offset through more costs and productivity efficiencies or do
they lean into pricing a little bit more. But tariffs will step up here in the near term and then you know, twenty twenty six, it still remains to be seen, but i'd expect a demand backdrop to improve. So they certainly should have the opportunity to push pricing a little bit more aggressively next year.
Our thanks to Chris Chile, you know, Bloomberg Intelligence senior US machinery analyst.
We move next to news from the logistics company UPS. This week, UPS said it expects to cut thirty four thousand jobs this year in an effort to cut expenses and improve profitability.
This comes despite the companies reporting third quarter earnings that beat analyst expectations. For more on this guest host Lisa Matteo and I were joined by Lee Glasgow, Bloomberg Intelligence Senior Transport, Logistics and Shipping analysts.
So it's going on to the EPs is they are making progress and they're executing on their plan. And their plan really is to create a network that can not only handle, but thrive.
In an ever changing environment.
And that change is being driven by e commerce, it's being driven by the uncertainty around tariffs. And what they've been able to do is increase productivity through technology, whether it's automation or AI. And that also they were stepping away from business from Amazon. You know, they noted another morning call that there are three quarters into a six quarter glide down of Amazon business. And the reason why they want to move away from Amazon business that tends.
To be lower margin, lower yielding packages.
But that's not to say that they don't want to totally walk away from Amazon, because their return business is a good business for them, and we're seeing you know, the success in the numbers, and you know, going into the quarter, I think investors were cautious or had low expectations and management kind of exceeded those with the results.
And their outlook really shows us that, you know, expectations for the fourth quarter in twenty twenty six, at least as it relates to you know, sell side analyst consensus is probably a bit low and it needs to move higher.
Lee, can you get more into the cuts that we were talking about, thirty four thousand job cuts, where were they seen and what kind of let's say, year over year cost savings does it expect in twenty twenty five from all of this.
Yeah, so you know what they're trying to do their overall cost savings, which includes you know, the head count reductions, you know, they're looking to get three point five billion dollars in cost savings this year. They've done around two point two billion of that so far, and some of the reductions are driven by you know, they offered early.
Retirement for some of their drivers.
They said they've had pretty good pickup with that, and that payoff should be about a year from what it costs cost something one hundred and seventy five one hundred and eighty million dollars, and they mentioned on the call that it will take about a year to get to make those costs back up, so you know, it really should be paying for itself.
And they're closing a lot of facilities.
So they've they've closed you know, something like ninety ninety five facilities so far, and that's being driven by they don't need the network they had when they were you know, really handling a lot of Amazon business and now that you know, like I mentioned earlier, they're walking away from that business, they're kind of reconfiguring their network. And they're also you know, as I mentioned, they're increasing overall automation.
You know, they know, they're on their call that they've added automations around thirty five more facilities and about sixty six percent of their packages touch these automated facilities, which is around three hundred basis points more than was last year, and that that numbers is going to continue as management makes more inroads at modernizing their facilities.
Lee, what is UPS?
So maybe feed FedEx for that matter. How are they kind of talking to you guys about tariffs and how it might be impacting their business just as a big, big part of supply chain.
Yeah, you know, it's interesting.
So for like a UPS, you know, there's good in bad when it comes to the tariffs and the more protectionist policies in the US. You know, we've ended the Dominimus exemptions, which you know stated that if a shipment came into the United States and it was worth eight hundred dollars or less, it didn't have to pay a duty or a tariff. You know, the Biden administration was working towards getting rid of that. That Trump brought that
Trump administration brought that to the finish line. You know, first it was it was just packages that were coming in from China and Hong Kong, and now that's been you know, all packages coming to the United States and that's hurting volumes they noted their US or they're China to US volumes were down around twenty percent, and that's
having a negative impact. Now you look at their forward business, you know, because of all these packages are now if they're are going to be coming in lower value packages have to pay duty, they need to lean more heavily.
On their customs business.
So you've seen their supply chain business outperform this quarter, and I suspect a lot of that had to do with the additional fees that they generate from helping shippers clear packages through customs.
Our thanks to Lee Clasgow Bloomberg Intelligence senior Transport, Logistics and shipping analysts.
Coming up, we focus in on the European earning season.
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We've been covering plenty of earnings from US companies this past month, but European earnings are also resoundingly beating expectations, namely in the European tech.
Space, especially as growing investment in artificial intelligence lifts demand and counters trade headwinds on that in the overall European market. We were joined by Tim craighead Bloomberg Intelligence Global Chief Content Officer.
So far, so good. I wouldn't say it's as dramatic as what you're finding over here. We don't have the big tech you know to the same degree by any measure. But if you look so far earnings twenty I'm sorry, fifty three percent beat versus high twenty percent miss Europe doesn't play the game like the US, where every company is trying to manage estimates and you know, down to the tenth degree. This is a good reporting period for Europe so far, and there's Yeah.
What are some of the big themes that are driving earnings growth when there is growth?
Yeah, it's an interesting thing. I'm going to put this into a little bit of different perspective to answer your question. If you look over the course of the past three years, where we've seen US earnings ratchet up, European earnings have been minus one percent. Wow, I mean, it's a shocking
dis Yeah. A big part of that is technology over here, but a big part of that over there is that there's been some really big drags au Those and energy and basic materials, sink, metals, money, and chemicals were about twenty seven percent, not to be overly precise of the earnings pie in twenty twenty two. That group has fallen two thirds in earnings since then to where it's now down to ten percent of earnings, and it's just been
a massive drag. The good thing looking forward is that those three are a smaller and all of them seem to be settling and there's reasons to think they can move forward, which gives a window for other businesses like industrials or technology financials, which have been huge with earnings growth, to start to shine through in next year.
Broadbly speaking, rising trade tensions can't be good for Europe. What are the companies saying.
Yeah, it's.
It's interesting in that it's another element to this earning story. You know, there's not many of the sectors that have actually had positive earnings growth this year. If you look at earnings revision trends across sectors, and you have to think part of it is the uncertainty. It could be a direct impact where you're having to pay levees, it
could be uncertainty from buyers. It's definitely a majority of companies over the first half of the year and even this reporting period have talked about those two elements supplier uncertainty or direct impact that are an issue for earnings. There's been a third or more that have said, yes, we can mitigate this, that and the other, but it
is an issue. And to the degree that things are starting to settle out a little bit, it's another one of those things where we could see some positivity as we look into next year.
What's the relationship between European companies earnings and AI. You don't have the big chip makers we do in video that obviously benefit from the demand for AI and data centers, but you do have ASML, which is a chip manufacturing equipment maker, so it's tied there. But most of these companies, I would imagine are using AI to create efficiencies and create productivity.
It's you hit the nail on the head from the standpoint of ASML is the proximate company there, and clearly you wouldn't have AI to the same degree within Vidia at AL if you didn't have AI. But it's only one component. SAP is a play if you wanted to be a second derivative, which again is a big component of European tech, But it is much more of what are companies doing to drive their business and you'll be
hearing more and more on this. We're doing some pretty in depth work with our year head outlooks, through corporate surveys and otherwise on what are the impacts of the AI and we are seeing we are seeing companies focus on customer service, better data efficiencies. It's not that much of a headcount issue, even though you certainly see some headlines on that here as well as over there, so it's interesting.
And then I got to ask you about the one theme that has been driving European stocks, which is European defense companies. This is like where we're going to see a lot of the numbers, maybe because certainly there's a lot of enthusiasm for this group.
YEP.
Valuations have ratcheted up, sales and earnings have ratcheted up. The European defense imperative is a critical theme. Everybody's talking about it, from regulators to corporates to investors. Those stocks have gone haywire. The evaluations are far higher than the US comparables. Even if we go to three and a half percent of GDP, which is now targeted across the NATO countries for spending, it's a question of how much
of that can actually be spent in Europe. It's a narrow window in terms of who are the European defense contractors. Ryan Mattell is a big deal. There's a huge push from an industrial capacity perspective to make that a broader base.
Right Thanks to Tim craigk Ed Bloomberg Intelligence Global Content Officer. This week we were joined by AI expert Peter Werner. He is co chair of Cooley's Global Emerging Companies and Vice chairman of Cooley's Business Department. They represent and guide many of the industries that are most prominent in the startup ecosystems, such as AI, space tech, and digital health.
Peter joined a program to discuss the future of the workforce and how AI is affecting various industries.
It's such an interesting conundrum. I think about it in two ways. One for us, for our large law firm for professional services organizations generally, and then for our clients largely technology focused clients, small ones disrupting industries and large ones.
There's a real combination.
And you alluded to it with the investment bankers and open a Open a Eyes statement recently about trying to train LLM to take to simulate the jobs that currently invest in bankers, entry level investment bankers do for hundreds and hundreds of hours a month per per banker. Lots of short term, medium term optimism, right, reduction of drudgery.
People people getting to go home earlier and get more sleep because they don't have to format one hundred page presentations or create tables Comparing the last version of a one hundred page merger agreement with the next version and things like that. That all seem amazing, but then you start to think longer term, what does that mean?
What does that mean?
For philis A referenced the junior bankers getting getting training by virtue of those reps.
How are we.
Replacing those reps so that ten years from now we know who the senior.
Bankers are going to be? How do we get from here to there?
Really interesting and really complicated as it relates to big tech. We've got earnings coming up this week for a lot of them, and you've got a ton of companies that work we work with that sell into big enterprises that are ready to get acquired.
By big tech. Yeah, like they are selling into enterprises.
That don't really know what the futures of their platforms are going to be in terms of how they're going to use labors.
So lots of uncertainty there.
Lots of uncertainty, and you raise some really good points here. Do you see companies management starting to address how to answer some of those questions, like, you know, where are we going to get that senior talent from if they're not going to be in the trenches in the early parts of their career because the early part of your career just doesn't exist anymore.
Yeah, I can speak most.
Passionately about that from the standpoint of my law firm, which is really a proxy for professional services organizations all over.
We are in the middle of trying to figure out, Okay, we have first year so we have one hundred first year associates coming to join us on Thursday across the firm, and maybe they'll be fine, But what about the ones that we're courting right now, the first year lawyers who are coming here in three years, if they're not going to get to do one hundred venture capital financings a year form one hundred companies a year because robots are doing it, Like what we need is do we just
need to have a virtual reality simulation of that and we don't build them out to clients, but we put them through their paces virtually so that they gain experientially. Still or is there a whole new way of training those people?
Of course there.
Are also because there were we as a as an ecosystem here in California, Like people understand that, and so of course there are now startups that are saying, Okay, we are going to be your simulation platform to simulate the reps that professional services organizations and other knowledge workers wouldn't otherwise get. So hire us to train your junior people so that in ten years you can make partners or you can make managing directors.
Are your clients to what extent are they receptive to integrating AI to their business? To maybe a little bit reticent here, they're just not quite sure.
Well, you've got, I mean, tale of two kinds of companies. You've got these amazing AI native companies disrupting older industries where they are all about it and they're talking in their board meetings about the ratio of headcount to revenue and trying to be really focused on efficiency and optimizing technologies,
building everything in a labor light way. And then you've got incumbents who are trying to like lift up this big, heavy organization and insert like AI technology layer underneath it, change the way they've all been doing things forever and start, you know, laying off people, but laying off the right people, retraining other people. I mean that's a complicated task across all industries.
So, Peter, are what jobs are AI proof meeting. AI can help you, but it's not going to take your job. Are there any industries, Are there any specific roles?
I mean, I'd love to know the answer to that.
My instinct is that the most senior, most experienced, people with the highest EQ and the ability to read rooms think laterally, be strategic and creative, like in the white color world, those.
Are the last ones to go.
But that's not everyone.
Maybe they never go. Who knows right.
But then and then beyond that, I would say there is a correlation between like more manual work, et cetera, and like it's going to take longer to replace those jobs. But you still think about the on shoring of like American manufacturing now where we have we have dark factories that we're building in the US that have no humans working in them. So this is not about all blue collar labor or like physical labor is insulated permanently.
I'm not sure.
I don't know our Thanks to Peter Werner CHERF Cooley's Business Department.
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