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Trsten slocked his bulletproof economics. He does it with a continental europe feel out of Copenhagen and of courses work at Princeton as well iconic and definitive, i should say, at Deutsche Bank and now at Apollo Global Management. Torsten give us an update on real and nominal GDP in the United States of America. It's become a blur with the cacophity of the news twelve months forward. Where are you on real GDP? Where are you on a nominal statistic?
Well, the US is having three very important ail instagrow at the moment, one coming from the AI boom, another coming from the one big bit of a bill, and another tailwind also coming from the industrial renaissance, meaning the political interest in bringing back production to the USS of manufacturing capacity. And were beginning to see all these three engines really fire very, very significantly because the AI boom
obviously is very strong. We also had the one big bit of a bill especially for the next two to three quarters, is very strong. And we're also seeing ISSM manufacturing begin to accelerate in the last six months because now the trade more uncertainty is more behind us, and
now we're beginning to see the positive effects. So therefore GDP over the next twelve months should be growing in nominal terms roughly around five percent, and in real terms we should have GDP growth at roughly two two and a half percent.
Is it just a set of stimuli.
Well, the key issue is of course that the AI spending boom plays such a significant role, and that's very important both because it plays a course of role in the data center build out but also the associated the energy build out. And that's why the AI boom is so interesting from a fit and an inflation perspective, because the AI boom is certainly inflationary initially.
Because we are spending a lot of dollars.
About seven hundred billions from the hyper skill as alone on the buildout, and that of course means more pricing and more therefore higher inflation when it comes to semiconductor prices. When it comes to labor, when it comes to energy, when it comes to construction workers. So initially it is something that is not just driven by the one big bill of a bill, but it's also important driven by ultimately how long time you think the AI boom will continue.
What is your inflation call here at Torsten? Is it a transitory energy driven inflation or is there something more out there?
Yeah, you know, this is the fast debate that they don't like the word transitoris and now they call it temporary instead. Okay, And this is of course why this is of course the dangerous game, because well, what if this boom in particular of course when it comes to the AI spending is going to last several years, and if at the same time you also have seen terrorsts put up by pleasure and inflation, you've also seen of course ultimately energy price is also putting off by pressure
on inflation. So that's why if you're tied ECFC, go on your bluebelg streen I look at the quarterly profile. You will see, as you all know, that the inflation levels both for headline and for coll infation is going to be about three at least for the next twelve months and that's of course the call problem for the twelve voting members on their form. See namely that eleven of them have said that we're not cutting interest rates
and infavation is going up. It becomes pretty complicated for them to lower interest rates in this environment.
Turston. I don't want you to get in trouble with compliance folks, and we don't take cheap shots, particularly with someone like doctor Slock. Here's a headline, and I want to make clear I'm not going to be snarky here and go directly to this Blackstone, not related to doctor Slock. Blackstone private credit fund caps investor redemptions at five percent. Okay, that headline just came out. That's like a huge deal, Torston.
Forget about that headline. But when you're sitting there, Torston, looking at your World Cup card and what Denmark's going to do, I mean, where are the Torsten Slock shadows out there in leverage or ill liquidity.
Yeah, so Denmark didn't qualify unfortunately for the work. So I will be having a very relaxed sumwhe here. But you're right, Tom So it's frankly in terms of the risks to the outlook, the key risk of course, Number one is that we still need to get the straight up a moose open in some form so that OLI prices are not at risk of suddenly spiking higher if some tank runs dry somewhere in the world, in particular
somewhere in Europe. So the risk of higher ALIL prices at absolutely the number one risk to the outlook at the moment.
The second risk is this issue of inflation.
Because there's the strait of a moose remains closed, then there's even more upside risk to infasion than my ECFC ghostcreen is telling me at the moment.
And the last thing that's also a risk is, of course, what's happening with AI.
AI is a risk in the sense that if it is successful, it will create new challenges. If it's not successful, it will also create new challenges. So these three things they need enterprises, what's happening with inflation, and what's hap with AI. Those are the three areas that we spend a lot of time looking at Tourson.
With the current immigration policy, population and growth in the US is essentially stalled. Can I guess the performance of AI. Can that improve productivity to the point where this economy can still grow?
But It's probably going to take a longer time because initially the AI spending boom is going to be inflationary and we will probably not see much initial productivity gains.
This is why this transition period that we're going through.
What is the world ultimately going to look like once AI has been fully implemented and installed. Is it going to be dramatically higher productivity or is only going to be modestly higher productivity? It will be positive for sure, but the question becomes what is the level of investment that deployed today relative to what the end result is?
And if that's the case that this is the discussion, then executly to your question here, well, then we do need to think about, well, if that endpoint becomes so important, what is that endpoint going to look like?
So is our efficiency or product activity now not AI? And is it something else going on? Including Nicholas booth Out at Stanford saying work from home is an efficiency and productivity boost, what are your thoughts on that?
Yeah, this has been a very important debate in the academic literature and Nick Bloom has been absolutely in front of all this because the discussion has been you would normally have the logical conclusion, Well, if people work for home, they don't work too much, they relax, they go and have a cup of coffee. But he is actually shown in a series of papers exactly what you're saying, Tom, namely that people working from home actually increases productivity.
So you're right, it's not only about AI, or.
You can call that a version of AI, but it's also a lot of other factors that really are all about how are capsul and labor working together.
In other words, with capuson and labor. Ultimately, the way they.
Work together creates, as you know very well, total factor of productivity, and total factor productivity can be higher if you give the tools to.
Capusul and labor to work better together.
And AI is exactly one of those tools that does do increase total factor of productivities in Europe.
Do what you just said.
I mean, the challenge for Europe is that they are not enjoying the AI boom that we're seeing in the US. And this is very important. Normally, my job is easy. If the US is good, Europe is good. If the US is bad, Europe is bad. But at the moment, the three tailwinds to the US, the AI boom they wan't to be beautiful Bill the industrial renaissance.
None of these tailwinds exist in Europe.
And as a footnote, remember also none of these tailwinds that are growth enhancing in the US.
They are not sensitive to interest rates.
In other words, it's really unique that the US is driven by factors that are not particularly sensitive to whether rates go up or down. Those sectors in the economy that are senteni to that is housing and autos, they are not doing very well because they are very interest rates sensitive. But the sources of growth in.
The US are really unique in the US at the moment, and.
We don't have them in Europe, Canada and Australia unfortunately for the rest of the world.
Torson how is Europe missing this AI story? Here one could argue they miss just the technology, the boom of the last thirty years. How can they afford to miss this AI boom which is reshaping the planet.
I would suggest that this is exactly a topic for Scarlet and Tom's Money Show, because here we have a very critical thing. Maybe why is it Europe is falling behind so much an AI? And there are several oecd answers to this. Number one, they do not have a very flexible label market. It's very difficult to hire people, it's very difficult to fire people.
That means that risk taking among entrepreneurs is a.
Lot lower because it becomes much more expensive if you go out and hire and fire people. That's particularly pronounced in Germany and France. But this has been a problem for decades. The second thing that's also very critical for Europe is that we need much more access to capucul, much more access to venture capusil, much more access to long term capitul, and financial markets are simply not as developed.
It's difficult if.
You want an entrepreneur to find financing in Europe, where it's really easy to do.
In the US.
Okay, so, folks of Vignette here to set this up. I'm in Davos and it's like the Blur and it's the beautiful people and all that, and my my fourth espresso. I'm standing by the bar. Torsten comes up to me with some guy and he introduces me to somebody nobody knew, Christian Saving, who at the time is retail German banking with Deutsche Bank, and all of a sudden he's running the ship. Torsten slam it forward. Simon Foy Florian Miller in the Ft last week, how Deutsche Bank Torsten slacks
Deutsche Bank learned to stop chasing America. That's the heart of the matter, isn't it. It's not chase America, but do it within like soft Bank in France or the Deutsche Bank revolution and the continent right.
Well, I think the Europeans o beginning to recognize that something needs to change, especially in financial markets solvency two. The rules are simply so rigid that they're not very supportive fault growth, and that's a real chinnese for the Europeans. They can also use last language models, that's all very helpful, but they should themselves really begin to realize more.
And I think that is where we are going.
That they need to also themselves invent the new anthropics and open AI in spasics. And the only way to do that is to get a more flexible label market and to change rules in cavisel let.
Me ask one more question, is Paul's got fourteen questions of being route towards to the heart of the matter, And this is like a Noi Rabini question. It's old world, new world. We have a heritage of failure, bankruptcy and a hyachien clearing of the market, and they do not. It's as simple as that, isn't it.
It is indeed quite as simple as that.
It is very important that bankruptcy laws also in the US give you quote unquote a second chance. Bankruptcy laws in most of European countries do not give you a second chance. That's all these issues about recalls non recalls. If I go bankrupt in the US, I can have a clean slate, I can start a new business. In many European countries, if I go bankrupt, I owe people money for decades. So that's why this whole issue about how quickly can you come out of bankruptcy codes? Can
you start a new business? How dynamic issue economy? All these things are really important for the Europeans, and I think they're moving in the right direction on a number of different fronts. But unfortunately it's just not moving fast enough, because as we all know, and as we exactly talk about here, the US is just ahead, especially in this case when it comes to AI and Torsten.
I mean, you know, Ai, Tom and I were forcing ourselves to learn AI, to adapt AI to our workflows. The young people here, it's just part of their life. How about the young people in Europe. Aren't they pushing for change? Aren't they pushing for adaptation of new technologies?
I think they are, and that's also why there is also an emerging venture capitul and small business and entrepreneur ara industry in Europe.
But the issue is still that there's a lot of visited interests.
There's a lot of balances between On the one hand, we want a dynamic economy, but we don't want to dismantle trade unions. We don't want to make all the existing structures that we have, we don't want to dismanted them completely. So that's why this transition to go from the old world that Europe has been for a long time to the new world where they can also contribute with GDP growth, new technologies, new innovations in renewable energy.
They I ahead on a number of fronts, but broadly speaking, you're right, it is indeed this which is the key issue.
Turch and slock Apollo of Global Management, thank you for the correct conversation. Stay with us. More from Bloomberg Surveillance coming up after this.
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This is beyond Time. Lindsay Newman steps in. Now she's with Chathamhouse and we're told that she could join this morning. Lindsey, what are you writing into the weekend giving the chaos out there?
Yeah, thanks so much, Tom. I just have to plug for England. We can't forget England harcane going for a bellow and day or in the World Cup. It would be really missing me not to raise that. So look, there has been so much speculation and back and forth about what's going on with the conflict in Iran. At any given moment, it's hard to tell whether we're inching forward towards a resolution of this conflict or actually, in fact,
we're inching backwards towards resumption of wider hostilities. We know that President Trump and the US administration want the American people and they want markets to feel as though there's optimism that they're going to reach a deal. That this memorandum of understanding that's been floating out there for a couple of weeks now is actually nearly resolved. But this is not a reality television show we are watching. This
is reality. While we all want to sort of stream to the next episode where we find out what happens. It's not the case that Trump can control all eventualities, you know, he tweeted earlier, he posted earlier this week that we should just sit back and relax and let things resolve. They always do. But it's not that he has control over everything. There are misalignments and mistrust that runs rife between these parties and has been going that
way since all the way back to last year. So I don't personally have a ton of optimism at this moment. We know that Iron's form. Minister Ragi said that there has basically been no further progress on negotiations and we still have a lot of runway ahead of us before we're going to actually see some sort of deal here.
Do we have a sense of kind of who on the US side is kind of driving the conversation for Is it the administration, is it the State Department, which I think that's their job, or is it a couple of lawyers from New York Well, Paul, I.
Mean, I think we always have to resort to mean here that it is Donald Trump and the Donald Trump Show. We of course saw a Secretary of State Marco Rivio involved in testimony yesterday, and he is obviously driving the state departments as emphasis and efforts in that way. But in terms of the negotiations selves, we know that last week Trump called his cabinet and said, I want to
review the deal that's on the table. I have some further comments that I want to raise with the Iranian delegation around Iran's nuclear program, around the Strait of Hormuse, these major outstanding issues, and it seems as though neither the US nor Iran are eager to be the first one to raise their hand and say we will approve this deal. And that's really where things stand. It is
this mistrust and miscalculation. The two sides have not agreed upon these open issues, either the sort of near term pressing ones like the straight of Hoe Moose, nor the longer term ones that have been outstanding forever, like Aron's nuclear program, what happens with its enriched uranium. And they also don't even agree about whether they're willing to talk about certain issues right hearing anymore about Iran's missile program. Trump last week said that Gulf states need to sign
up to the Abraham Accords. That went over like a lead balloon. So we are continuing to see that these two sides are really talking past each other, even though the market forces want there to be a deal, and even though the administration wants market to believe that a deal is impending.
I've been so waiting for you, Lindsey, to come on at Chathamhouse in London, because the Telegraph in London a number of days ago did an extraordinary article. This is Conser Rabbi and Sai Goldcar talking about the two new unknown leaders of the IRGC and within that without going into this incredibly intense article about the new future of the Iranian military. From where you sit, do you have a knowledge base of the new leadership of the IRGC.
Yeah, I mean what we know, Tom, I mean, obviously I should say caveat that. Sunanvakil at Chathamhouse is our lead expert on Iran and she's best positioned to talk
about that. But what we do know is that Auran took away a lot of lessons learned from last year's June operation against it, also led by Israel and the US and quickly and sort of look to do a very intensive post mortem and reorganized various components, including the ERGCY, including its military capabilities, including its leadership structure and plans going forward. And we've seen that in action over the
course of Operation Epic Fury. Right. So, the fact that the US has pursued all of this degradation on Iran's missile capabilities, perhaps some of its nuclear capabilities, its naval capabilities has not necessarily translated, as we know, into Iran being overall degraded. The regime remains very much intact, although what we know is it's been sort of more diversified, dispersed across the country. It's sort of in a moret
of guerrilla style approach. It has also been maybe perhaps de emphasizing some of the more ideological components instead of pursuing this new leadership structure pursues more of sort of
nationalistic approach to leadership. And what that means is Iran has been able to develop and pursue very intensive tools of leverage, including over the Strait of Hormuz, which sort of is its new tool going forward beyond even its new capabilities, even as we think that perhaps rob Is didn't continue to pursue its nuclear program.
Just one more quick questions. We've got confabs, we got I think Paul NATO's in Turkey. Yeah, there's G sevens give us Lindsey an allied update in their relationship, the traditional allies relationship with the President of the United States.
Yeah, so we know that Trump has said that he is going to the G seven meetings in just a couple weeks time. It will be an interesting dance that we're going to be watching. We know, of course that the relationships there have been strained. There hasn't actually been a lot of sort of news breaking public facing conversations between the sides of late. It's all sort of been mostly back channeling. But there is tension there that has
not been resolved. It's interestingly enough, we see today that the UK, Germany and France are talking about developing their own track to conversations with Puchin about resolving the war with Ukraine. That just shows that Europe is getting the message that the US is not going to be participating in the same way that has always been historically participating. Since the post Cold War period and that facts are
moving on. And that doesn't mean that Europe is willing to jump into supporting Trump and the US administration in Iran, but it does mean that we should be watching us very closely to see how this dance plays out.
Lindsey, thank you so much. Lindzie Newman with Chathamhouse, stay with us. More from Bloomberg Surveillance coming up after this.
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Juliet Cornado joins US right now, hugely competent, definitive in the crisis at BMP. Perry about Julia link tomorrow's jobs report to how the newly minted chairman will think.
Yeah, I mean, before I go there, tom I just want to say Ghostpurs go. I will be at the game tomorrow, So season ticket holder.
Which color shirt are you're gonna wear?
I mean, well, the Fiesta colors are only for game one, So if you've been paying attention to the Spurs, every game one features the Fiesta colors. I know that the Knicks fans were struggling with that last.
Night, but.
We proudly fly our Fiesta flag. So but tomorrow night they will be black T shirts.
Juliett.
We're going to get some important jobs numbers tomorrow. Give us your thoughts. What are you looking for tomorrow and what's your view of this labor market here?
So there's a lot of conflicting signals in this labor market. I mean, one thing I think we can say is that we've left labor hoarding behind us, so we get things that are send mixed signals like pretty elevated challenger layoff announcements, lots of layoffs in tech, and yet you still see a low unemployment rate and some okay jobs numbers. So you know, I think we see more chern there's more hiring, more firing. It is a low amplitude labor market.
The break even rate of labor supply is probably close to zero, somewhere between zero and fifty thousand, So we don't really need to create a lot of jobs to keep the unemployment rate steady. There isn't, you know, inflationary pressures coming from the labor market. They're coming from elsewhere. Real and they are persistent, but they are not being generated by wage growth.
I help us. This is so important. I think of there's a school, Julia called Texas A and M. I think you maybe familiar with. I think a time as savings work down there in others. So you say, statistically we're sub one hundred thousand non farm payrolls, and I get mathematically, that's like cute to our audience. It's not cute. No, it's one hundred and fifty. Politically, it's sub hundred thousand non farm payrolls. Acceptable for the president or for the chairman.
Well, it's a great question, Tom, I mean, it is a new environment. It is an environment that comes from two big factors. One is an aging population. The boomers are moving into retirement in great numbers. It is a drag on labor force participation. It is a drag on labor supply. And if anything, the booming stock market is facilitating earlier retirements, so that's depressing labor supply. And then,
of course the other big factor is immigration. The US has been for decades a country that grants about a million people legal immigration status every year. That has dropped precipitously. That's a policy choice, and that means fewer workers, fewer jobs.
It does mean less income generation in the economy. And here's where we get to this strange market, strange economy that we are in, where it's increasingly narrowly concentrated in GDP and investment on AI, in the labor market, on healthcare jobs, and really outside those sectors, there's not a lot of dynamism going on, and there's a lot of frictions and supply shocks that sectors and firms have to deal with. So it's not an economy that you look at it and say, wow, this is fantastic, and you
see that in pretty sour consumer sentiment. So is it good enough? You know, it's it's a different environment. It doesn't feel great in a lot of ways, even though it's stable in the aggregate.
So, Julia, the other aspects of this economy that the FED is focusing on is inflation, and this warn Iran has really kicked up energy costs for everyone. Yes, yes, how do you think about that?
Well, we're going to get inflation data next week for May and it's going to show, you know, yet another burst of energy inflation and yet another acceleration in headline inflation, And what we know as macro economists is that when you get hit with a supply shock, the inflation comes first and then comes the hit to demand. And so this is where I think we're seeing caution at the FED.
In On the one.
Hand, you've got a veryasonable judgment that, look, inflation's been too high for too long, it's going in the wrong direction. We need to we may need to do something about it. On the other hand, if you know your macro you know that there's a demand hit that's very likely going to commolate Q two, Q three.
Uh.
The real disposable income growth is negative. Consumers are losing purchasing power. They are having to dip deeper and deeper into savings to finance spending. There's probably going to be at least some moderation in that pace of spending as the year progresses. The tax cuts will be fading and consumers are going to be squeezed.
I mean, Julia, I look at where we are, and I get this feeling. No one's talking about the FED. Are you Are we going to get a ce change to labor day on how the FED communicates with the world.
Yeah, I think so, Tom. I think. I think when we hear Chair worsh talk about regime change, when we hear him, you know, talk about reform, when he brings in senior outside advisors who have written the chapter in Project twenty twenty five on FED reform, you should expect him to at least put his money where his mouth is to some degree, you know this is not just blustered ju He wants to change things.
Julie Rivet script we gotta go. Spike from the fanciest hotel in San Antonio just emailed in Tom Love the Show. Does Julie have a ticket for me tomorrow? Can you help them? Let's spike in some thousand a night hotel and sends in Antonio.
I have no extra tickets to provide anybody.
I have two for me and my son.
We will be going to the game together. Shay on the Spike. Thank you so much. Course, Spike Lee definitive for the next Juliet Carnado, the Spike Lee of the San Antonio Spurs. Stay with us. More from Bloomberg Surveillance coming up after this.
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So here's the way it works. Usually one person transforms a university, and I have the clearest memory of Indiana University being a complete backwater. Purdue rocking it I mean, Paul Purdue was rocking it in. Herman Wells single handedly turned around Indiana University. One of the beneficiaries is the Wells scholar from IU, Rebecca home Kiss, who has gone on to absolutely sterling academics at the London Business School and wandering by Duke University from time to time. She
joins us this morning on our growth economics. Is our growth model now original? Or is AI a bull done to everything we've seen? You know from Herman Wells on is it just another growth story?
AI is a different growth story, but it is changing some of the math about how we think about investment returns inside organizations. But it is still very very early days. The majority of organizations that are bringing AI in are not really seeing growth gains. They're seeing a bit of productivity or cost reduction, but we're not really seeing a lot of the use case that are generating detrimental revenue
or value creation for organizations. Again, we're early days, but you know, the last couple of months are showing a little bit more doubt about how much these investments are going to translate into returns.
So when you talk to your C suite of clients, are they looking to embrace AI? Are they still in a stage of what is AI? And is it a friend?
Me to me?
How do I think about it?
What's the conversation you're having?
So I love this question because there's been a transition. So we went from kind of twenty twenty three, I'd say it was doubting. CEOs did not want to jump on another trend that was not going to pan out. Then we went into dabbling right use cases, throwing called pilot licenses at people. We are very slowly transitioning into what I call deliberate actually bringing AI into strategy, but relatively early days, the majority of companies are still dabbling.
So while AI adoption is very high, it is incredibly shallow. You now only kind of ten to fifteen percent of business work is being done in any form with AI, and any kind of cross team, cross functional use cases are relatively small.
What is the as we step back here and think about some of all the economic data we've been getting over the last several weeks, and including this week, we'll get some more on the labor front here. What's the conversations you're having today with your clients about the economy? What are you hearing? What's the conversation now?
It's funny is that the market gets bored of topics when it goes on too long. You know, we're kind of a board of the IRN war, We're a board of the k shaped economy. CEOs don't have the luxury of getting bored. Just because a trend has been going on for a couple of months doesn't mean that.
It affects strategy.
So I'd say, look, we're looking at the IRN War, we are looking at the economy, especially the lower end, and tariffs are back in play as of yesterday. And again we might be tired of talking about terrorifts, but they're real economic in cap and companies trying to make some of these decisions.
The Pennsylvania Railroad was religion in my family, arking across to Chicago. I mean, it's what came out of the three tobaccles of railroads going back to eighteen ninety the analog to the railroads in AI. Where are we in that path right now?
Very early days? The difference is eighteen ninety ish. The difference is tom when we laid some of the early railroads or the kind of the cable infrastructure in the nineties, there was nothing really going on them or through them in the early days. We do not have a demand issue right now like this is very much. We are still lower supply than we have demand. So demand is high. It is increasing at a nonlinear rate and it will continue to but we are going to see a very
volatile market when it comes to AI. We're seeing a shock the last couple of weeks because a lot of the vendors are changing how they're pricing, which is why compute cost and token max and all of those.
Things are coming into the conversation and.
Bro listening to people like you, do you feel like they're in a vacuum and their earnestness and their eight dollars on the West Coast? Are they actually listening to bring Jolson or hummus about what's actually going on?
You know, if you look at the differences between the impact that both economists, academics, and tech firms think that AI will have on productivity. The range is between point one percent and eighty percent. Like that is one hundreds of order magnitude difference, Like we will eventually need to ladder out somewhere. It'll be higher than we've seen another tech booms. But at this point, I think we're dramatically overestimating the near to short term impact that AI will have on productivity.
Well, because I mean that's probably that's a non consensus view, I would argue because I think most people that come into the studio with Tom and.
I suggest that.
I mean, you got electricity at the top of the compendium, and right below.
That is AI.
Well below that is the Internet. That's kind of where people kind of weigh this thing because.
Adoption was so much higher. You know, we reach fifty percent of global adoption in three years. The Internet was seven to ten. The difference is what is happening inside organizations. It is very I don't want to say easy, because nothing's easy, but it is very approachable to get productivity booms at a team or function level. So engineering team at scale thirty percent, productivity, customer service support thirty to
fifty cent productivity. What we do not have is cross team, cross functional, organizational wide productivity, which is something you will see as an external. And the reason is getting those kind of gains does not take throwing AI on top of work. It takes actually redesigning workflows, and that is really hard work that takes time. So we'll get there maybe slash probably, but short to near term we are looking at change.
Paul's too polite, so I'm going to ask Seed blunt, it's just another corporate education program. Polonio's fuqua the future of leadership. Now, what's the distinction about duke corporate education versus another soiree to look buff and beautiful.
I think all forms of corporate education, whether it's lend of a business school, are duke. We are trying to help deliver impact and value creation and really understanding not just the topics, but how they can practically apply it inside their day to day work.
Can do math all the time, This is cool.
Get get I get when I put up charts, I always ca it and it's going to be a chart if.
You do corporate education. To sponsor me my first sponsor. The first people that said the idiot with the bow tie. Let's throw money at them. Stern School of Business, n y U and one of the students showed me their math. Paul, it was like, are you kidding me? That's the energy that's in these programs.
Math still matters, Tom, Math still matters.
She can come back size exactly exactly how do you put how do you put AI into the curriculum here?
Because I would think that would be a question.
I'm anybody north of twenty eight, twenty nine years old.
I need to be educated on AI.
So there is plenty of education.
I look at the vendor front as well on what we call hands on keyboard education, and that's fine, but that's not what leadership teams need. Leadership teams need to actually understand how do I retrain my teams? How do I hold people accountable for AI? And not to kind of overwhelm on jargon, but most companies are great at tracking the outputs of AI. How many use cases are in play, how many people have licenses, how many tokens
are used. Organizations get nothing from those output measures. What we really need is kind of this organization why, leadership, why training, and how to deliver outcomes from AI versus just outputs.
How about the ethics of AI?
I mean I speaking to the malts and consulting recently and they say, before they engage with a client who wants to quote unquote implement AI into their business model, they want to get buy off at the c suite level and the board level on ethical implementation of AI. How does that figure into it?
Absolutely does.
And for full disclosure of an advisor at BCG as well, is that if you think about the first of all, it's much not a senior leadership thing as well, younger employees are very very concerned about the ethical use as well. If you ploy younger excuse me, pull younger employees, that's what they want to talk about as well. The challenge is there's three or four simultaneous planks you need to work on. If you want to get benefits from AI. You need to do organizational while upskilling. You need to
focus on the governance ethics response AI. You need to build your tech infrastructure data platform. Most established organizations don't have data in a way that they can actually leverage it using these the eye tools.
And then you've got to link it to outcomes.
So doing those four things at the same time we call it parallel pathing is very difficult, but if you don't have the governance, responsible AI in place, you're not going to move. The irony is that boundaries give folks freedom. So organizations that are moving the fastest are those that have the clearest boundaries and governance and responsible AI. When the rules are clear, people move faster.
We're becka, thank you so much. You're backing on because with us, with the London Business School, all sorts of other efforts. Original Department from LC and from Indiana.
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