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On Friday, we had this pronouncement from the President on social media saying he was going in and would be making this decision. He went into the meeting, came out of the meeting, and there still was not an agreement. So Axios is reporting today that the President during that meeting asked for several amendments to the deal negotiated between his envoy and the Iranians.
In particular, he wants to strengthen the sections around around's nuclear material, including details on how the US gets that material and when. Here's what he told his daughter in law Laura Trump on Fox News last night. This is really a win.
Already, we've defeated the military, essentially defeated their military. I would rather get a deal because we can open the strait immediately upon signing. The one guarantee that I have to have is that there will be no nuclear weapons. They've agreed to that, and it was very interesting. They originally said we will not develop a nuclear weapon. I said, well, what happens if you buy a nuclear weapon? So now it says we will not develop or in any way
purchase a military weapon. That's a big difference. So we're getting what we want slowly, very tough negotiators. It takes a long time.
I'm in no hurry.
I'd like to say I'm in a hurry because you know what, ghasoline prices are going to come dumbly down. But if you're going to be in a hurry, you're not going to make a good deal.
We're getting what we want. According to the President of the United States, is now as ambassor John Bolton. He served as the former US Ambassador of the UN and also as National Security advisor to President Trump during the first term. Mister ambassador, great to have you with us once again. Let me start with that line that I repeated there coming out of that quotation from the President.
We are getting what we want at this juncture as we live through this weekend after weekend, the President indicating he's close to a deal, and then silence or no codified deal at the end of a weekend. Do you feel like the US is getting what it wants out of these negotiations they're taking place between the US and Iran via the pakistanis.
Well, I think Trump is getting what he wants. This is a deal about gasoline prices at the pump in the United States. Trump worries obviously about the price levels people are paying. He's worried about the effect on inflation. He's worried about the effect on the elections in November. But this is not a deal that really ends the war in a satisfactory way for the United States. There's
no doubt about it. If the Iranian regime is allowed to survive, which it looks like Trump is prepared to acknowledge, they will simply benefit from the reopening of the strait to sell more oil, gain more revenue, and entrench themselves in power, giving them time rebuild their nuclear program, rebuild their military, rebuild their terrorist proxies an x period of time will be right back where we started from.
Given that, do you think the US was in a safer bet with Iran in the JCPOA than they will be after this is worked out?
Not at all.
The twenty fifteen obomba in nuclear deal was a failure on many levels. It didn't at all deal with Iran's plutonium route to nuclear weapons in the form of the spent fuel at the nuclear reactor at Bouscher, just completely left that unattended, and the estimates of the amount of spent fuel there that Iran has by nuclear proliferation experts say they could make between two hundred and four hundred nuclear weapons just from the plutonium route to bombs, not
the Range and Richmond route. It's a complicated issue, but the fact is that the JCPOA was allsory and Iran's strategic determination to get nuclear weapons has never changed.
But all those technical issues that you just points it out, are you confident that given this negotiating team we were just talking with our Jeff Mason, our White House correspondent, was saying, the negotiating team is essentially Jared Kushner and Steve Whitcoff they don't have a lot of technical experts. Do you have any level of confidence that any of those issues with the previous deal are going to be fixed this time around, given how they are doing this diplomacy.
Well, none, whatever. Look, the Iranians are clearly trying to buy time. I mean, they like to sell oil, but this is a contest really of perseverance and determination. They think Trump is closer to buckling than they are. They don't care about the welfare of their people, they care about preserving the regime. And so we're going through this ropidope of these talks about talks. The Economists this week
has a great cartoon. It's a bunch of iatolas speaking to two of the Pakistani mediators, and one Pakistani mediator says to the other one tell the Americans they are offering a framework for negotiation of the establishment of a proposal, exploring preliminary talks about the tentative prospect of conversations, and the other mediator says, a great plan of action. That's what we're going through.
Now.
We're going to have you read New Yorker cartoons the next time you're on the show. I think that Ambassadbulm what is your prescription for what needs to happen next we hear the President continue to threaten that something will happen if they can come to an agreement. Of course, what's on the table, as we understand it is more kinetic action, more military action. Are you of the camp as one might expect that that's something the US should be pursuing right now. Indeed, what do you see as
the path forward here? If all that we get out of this is a one page document with fourteen points on it, or an agreement that isn't satisfactory.
Well, I think there are two broad options. One is just to junk the cease fire, which I think has been a gift from God to the Iranian regime and go back to full scale military activity. If Trump's not willing to do that, I think the minimal that he should do and that we can do is open the Gulf Arab side of the Strait of Hormuz to get
their oil and gas out into international markets. Keep the blockade we've got in effect against Iranian exports, but using military force I think that will be necessary help ensure that exports from the Arab oil producing countries can get out. We know from reporting in various publications. I won't name that. This week, the US has been helping carriers get out. They've not been attacked. They're turning their transponders off, going
at night, kind of sneaking through. That's not a lot of traffic, to be sure, but I think it shows that the Iranian threat here may be more hollow than people think. And to alleviate the pressure on the international economy, I think it's worth using force to open the strait. I think it helps re establish the terns to prevent ron from trying to turn the Straight on and off like a light switch in the future.
So that's interesting. So one of the criticisms of how this is going is that there's a sequencing issue. People are saying that the US shouldn't give up its hold on the Straight, they should keep the Straight kind of locked down, and so they can use that on the nuclear leverage side. You don't see the sequencing issue as a problem here with the way this is being negotiated. Youusally they should open the strait and then tackle the nuclear issue.
Well, I think we should keep the blockade against Iran and exports. So no, I don't I will understand apologies definitely, yeah, no, But I will say whenever diplomats start talking about sequencing as being the only problem, hold on to your wallet, because it means there's really a bigger problem they're trying to obscure.
I want to ask you about what's happened here is a weapon for Iran in the future. We've talked about this over the course of the morning as well. We're talking about the prospects of extending this kind of squishy ceasefire that's been in place now for a few weeks to sixty days. It occurs to me that it's not
going to prevent Ron from doing this again in the future. Indeed, as we look back on this conflict, I think what's perhaps most valuable to Iran is putting this in practice and seeing the habit that they can reak by closing this straight to ships from all over the world, the impact that that's had on the global economy. Do you have any confidence here that them having done that this will be a one and done thing, that Iron won't return to this or try to do this again in
the future. And indeed, how does the US put in place any sort of procedure that would keep that from happening again.
Well, I think you bloody them badly militarily to show they cannot close the strait of hormones cost free. Look, anybody who reads a map can tell that the strait was a potential problem here, So it is known in Trump's first term. I think history will record that his unwillingness or inability to see that and not to prepare for it in advance, was one of the big mistakes
of the operation. We knew, for example, we had to destroy as many of Iran's missiles as we could to prevent them from attacking our bases, Israel, our golf ballies, but we were late in the game and making sure that they couldn't close the Straight of Hormuz. If they get out of the current situation simply by diplomacy, I think it will lock in in their minds that they can close the straight again by diplomacy and not suffer
any real consequences. So I think re establishing de terms here means defeating the concept that they can just, on their say so, act as if they're master of the strait.
Just to put a fine point out, are you suggesting to hear the commander in chief is cartographically challenged that he didn't think this through or didn't really understand the gravity of this when he entered into this conflict.
Look in the first term, I tried to persuade him to adopt regime change as our objective in Iran, unsuccessfully obviously, and we had discussions of it. Plenty of people participated. Closing the Straight of Hormuz is always one option that was available to Iran. I mean, we should consider that for decades oil prices have had an implicit subsidy because
nobody did try and close the Straight of Hormoz. Now that play has been made, nobody can ever be doubtful that they would try and use it again in the future, unless they thought it was just too dangerous for them to do it, which is all that this regime in Tehran today understands that they'd be met by force and they'd be defeated.
I want to ask you about that regime because at the onset of this war, the president was saying that it was time for Iranians to rise up and overthrow the regime and courage that to do exactly use that as one of the justifications for taking military action. I have several Iranian friends, some with families still in Tehran.
They've suffered under this regime. They hate this regime, but they have also suffered under this conflict, and they do not seem to have the capacity or at this point the will, given what's going on, to even attempt such a thing. Is the current regime more less the same level of extreme as the last regime? And do you think the president should have taken your advice and either not done it or gone all the way through and try to enact regime change in Iran.
Yeah.
Mistake that the administration made before the start of the wars. They didn't contact opponents of the regime inside Iran, with a few very minor exceptions. If Trump was determined not to use boots on the ground, then you need all the more to be coordinating with people inside who want to try and bring the regime down. It doesn't mean the people going out on the streets on the first day of the war. This regime massacred them. In January,
they'd massacred them again. That tells you how the regime feels about its own people. But given the destruction of the instruments of Iranian state power that our attacks represented by working with the opposition inside. I think we could have gone a long way to bringing the regime down, but we didn't consult with them. We didn't say, how can we help you organize? What resources do you need? You need, communications, money, weapons, What do you need That
requires planning? It probably requires time. We just didn't do anything, and I think we're on the verge of throwing away a great opportunity for more peace and security for us, for the Middle East, and God knows, for the people of Iran.
We got a minute left. I want to ask you what confidence you have in those who advising the president right now. I imagine you know some of the principles here. B that's Steve Whitcoffort. You're at Kushtra, You've interacted with them in the past. Are you confident that they have the kind of strategic Nohower's sense to improve the situation that exists right now?
I don't think they understand the kinds of trade offs they're making. For example, one of the most controversial aspects that's still very murky in this deal is whether the United States is going to unfreeze frozen Iranate assets and make available to them other resources. I think that would be a huge mistake. It's one thing to providefrozen assets to a real government in Iran that represents the people. If we provide this government frozen assets, it will entrench
itself still further. And I don't think real estate brokers understand that that's what's at stake here. It's not about economic development in Iran for that money, It's about re entrenching and enabling the regime to stay in power. That will be very bad politically for Trump if that's what works out.
Always good to get your perspective of Master John Bolton, the former National Security advisor for President Trump during the first term, former US Ambassador to the United Nations as well. Thank you for your time on this Sunday.
And New Yorker cartoon Efficiacy.
I did enjoy that.
Thank you, sir.
Stay with us for more on Bloomberg this weekend. Right after this, Ethlan Lost joins us now from Bunia, the capital of the Attree Province in the Democratic Republic of Congo, which is the epicenter of the Cibola outbreak. It's great to speak with you, Declan. Thank you very much for being here. We see you in that video, you're wearing a TAIVEK suit you have PPE. It's clear that those visiting patients in that medical facility do not have taie
x suits or PPE. Can you just talk about the capacity of this hospital to deal with what is still a nascent outbreak in the DRC.
That particular hospital was I would say, completely overwhelmed when we arrived. It's just it's the main public hospital in a town, a gold mining town called Mungualu that's about fifty miles north of here. That's where this outbreak is believed to have started and as long as two months ago, and when we arrived there, frankly, the public health facilities appeared to be in crisis. As you see, there was only protective equipment for medical staff like doctors, but otherwise
those wards were not secured. There was very minimal care being given to patients, and then you had relatives and other folk just walking in and out, and they seem to be entirely unprotected, and of course that was putting them at great risk and of course increasing the possibility that the hospital itself would be a source of transmission back out into the community.
Yeah, it looks I mean, it makes sense. Now that you're saying that's the general hospital, because it looks to me like TV wards I've been in places. It doesn't look like a purpose built facility, which I guess is part of the problem. I do want to ask you briefly how you got there, And then David was pointing out to me earlier this morning that you said that you hadn't really planned on going in to this extent. Why did you change your mind once you were on the ground.
We were there for several days. We'd spoken with the with the medical staff, got their permission, we got the permission from the patients to enter that ward, and you know, I just felt it was very important to witness firsthand and to show the reality of care in the Congo, particularly in this frontline area here in the main city. Bunye, the head of the who has been here the last couple of days, Doctor tedros gabiesis there. You know, AID
agencies are present here. There's certainly some supplies coming in now. Is that the opening of a new isolation ward in the city this morning? But up there in those rural areas where the greatest number of cases are found, for
a whole combination of factors. It's extremely very little aid has reached there so far, and you know they're in a crisis situation, which of course is bad, terrible news for the people who are already sick, but it also means that the spread of this virus is frankly unknown and probably still uncontained.
Dechlan something we've spoken about with Jeremy Connandyke, public health official from the US, with Tom Frieden, former head of the CDC, as well as just about the cultural difficulties here conveying to the population the seriousness of this outbreak, and you point to something very worrisome in your piece. You say many refuse to accept the virus was real. You continue, Some said the outbreak was a money making plot concocted by Congolese doctors and Ford aid workers. Others
call it a curse. As we talk about the deficit in the health response to this crisis, how acute is this problem in particular just conveying to the population how dangerous this is, and trying to explain in light of those the sense of what's happening here that that in fact is not the case. This is a very serious virus.
It's an absolutely crucial point when you speak to aid workers. Second, the first thing they'll tell you is they need equipment. The second thing they'll say they need is education and engagement with these communities. Some of these communities are extremely hostile to the virus. It's not just sorry to the idea of the virus. It's not just that they don't believe it exists. They have carried out attacks against hospitals. The hospital that I visited had an isolation ward that
was under construction burned down. It came under attack the first night we were there from a group of over one hundred people who wanted to retrieve the body of a local spiritual leader who had just died of abola. And what that all gets to is the whole practice of funerals. I think, as you noted, you know, the body of a person. A person is most contagious at the last stages of the disease and after they have died, So how the dead or buried is absolutely crucial. Otherwise
funerals can turn into super spreader events. So you see these really courageous local health workers and Red Cross officials who are doing their best to educate people to try and carry out safe burials of bodies, but because frankly, the effort is so far behind the curve. As I said, this outbreak is thought to have started probably six weeks maybe two months ago, but was only declared discovered and
declared two weeks ago. So the entire effort is far behind the curve, which means there's very little reliable data about how much it has spread, and that's only feeding into this suspicion among local communities who, as far as they're concerned, to see people going into hospitals just to die.
Deethan, I also want to ask you, I want to focus on something you talk about, because you report that the hospital has no food or water to give to ailing patients. This is consistently an issue with health care in places like this. I know when you're giving HIV medication, when you're giving tuberculos and the medication, when you're giving
supportive care. That supportive care can't work if your patient is malnourished or you don't have clean water, And it's often the part of the response that it seems to get lost in the shuffle. Are there any efforts being made to address that piece of this? What is needed and where do you think it should be coming from.
Look very I mean, certainly the World Food Program have mobilized in this area. They're mounting feeding programs and so on. But you know, there are two issues with that. Firstly, as you say, you know, in a hospital like this, they just don't generally for normal treatment to provide food or water.
The families are generally responsible for bringing food.
To family.
They come in, they provide the food. Now that is providing a biosecurity hazard in this environment because family members come in unprotected to provide food to people and run a high risk of being contaminated themselves. The other issue is in terms of people's ability to fight this virus. Because this virus is a it's a rare virus that as yet has no vaccine and no cure. The only way to treat it really is to bolster the defenses of a person who is sick in order that their
own body can fight that virus. And obviously, food, water, IV drips, all of these very basic you know, not even medical treatments, but certainly basic things to bolster their immune system are key. And that's why if the medical authorities are going to successfully start to push back this wave of infections, they're going to have to get those pieces in places as well. Becha.
Let me ask you lastly, just about what you heard from that Condolese doctor with whom you spent the most time. And I think in circumstances like this, past outbreaks, the frustration and exhaust are palpable among the medical staff were in facilities like this one. How would you assess his level of optimism that this is going to get under control, and indeed, what does he need or what does he say that he needs going forward.
I think firstly he just wanted protective equipment for the staff. Secondly, he wanted to be able to secure that hospital so that they could work in a safe environment. You know, when I met that man in the war, the young doctor, you know, he was just not just exhausted. He'd just come off a night shift where someone had died during the night, a lady fell into a coma and died. But you know, he really felt like he was at
the end of his tether. He said, we were almost two weeks into this crisis and this is all we have. How is it possible that both my own government but also this international system that has you know, deployed to so many of these abula emergencies. He was basically saying, why is that not here? And that kind of frustration is palpable among many of the health profession and healthcare professionals you meet in some of these frontline areas.
Declan Walsh, New York Times Chief Africa Correspondent, joining us from the DARC, thank you so much for taking the time. Thank you to you and your crew, and frankly, whatever editor is signed off and allows you to do this on the ground reporting, which we know is getting harder and harder to do. So thank you, truly, thank you to all of you this morning. Stay with us for
more on Bloomberg this weekend right after this. There are goals in the tech sector, and as more companies incorporate AI into their day to day work, some of them are coming to realize that those goals, if using AI to pursue them, come at a bit of a price. Microsoft cancels most of its cloud code licenses, and Uber Coeo said AI costs, excuse me, are getting quote harder to justify that.
Scott Amconda Wrights Innovation doesn't only need the technology but also the physical infant structure to support the product. It as a calumnist for Bloomberg Opinion and a lecturer at the Ale School of Management. He joins us now on set here in New York. Wonderful to see you. Let's talk about this, the effervescence, the enthusiasm surrounding a I meeting the reality of having to pay for it. And there are extreme things that I think of the amount of money,
for instance, that Meta has poured into this. Let's begun to retrench some of that here. How widely spread is that? Are a lot of companies kind of reckoning with what is this going to be and is it worth the investment at this point in time?
So great to be here, so yes, but there's a nuance here, right. So the company there's a company I was talking to the CEO yesterday. He said, if Claude charged us ten times what it does right now, he said, I would pay it and I wouldn't hesitate.
He's like, I wouldn't even think twice.
So what kind of company is that? And what is the application?
Right?
It's a small healthcare company.
So like so there's there's that's there's a big difference when you have ten thousand engineers who are running you know, two thousand dollars per head if you go ten x, right, things change when you're at that scale. But I think what which really what driving this is it's really interesting that the debate on AI is kind of missing something pretty big, right, and that that, I think is what this cost thing is starting to drive us towards. Because you see they're the boosters and you know, I used
to code. The ability to talk to my computer and have it do something without is genuinely it feels miraculous.
It's astonishing.
And then there are people, some of them people, people with enormous scientific and technical credibility, who say this is not going to come together the way you think, like this technology doesn't have the potential you think there's height.
Those are also serious people you shouldn't dismiss the.
Humorous per se, but skeptics of this.
Yeah, there's a third scenario which it just strikes me no one talks about, which is you can have a revolutionary, world changing, astonishing technology that doesn't end up making anyone any money. And this is the thing that people I don't see people talking about.
I don't give you two examples. The airline. No one would deny that the airline industry, right, just change the world. Right, you can go anywhere, perfect safety and ep nuts on the way. Just remarkable, more.
Of a Pretzel's gown myself. But I'm going to continue.
But you know, Warren Buffett famously said that the airlines were such a machine for incinerating capital that if you know, if an enterprising if an enterprising capitalist had been at Kitty Hawk when Orville took his flight, he should have shot the thing down, right, Like, No, you can change the world and not make money. In biotech, you saw sort of, you know, the biotech revolution starting nineteen seventy five.
So from nineteen seventy five to two thousand and four, Gary Pizano at Harvard Business School showed that the biotech industry might maybe have made money in one year, right, and for that entire time it was essentially just a furnace for money. You poured money in, and you know, drugs came out, live, came save, but people didn't make money. Right, And you've got huge capital investments, lots of uncertainty, long delays of before payoff, enormous costs.
Oh and the.
Problem that you know that AI is dealing with that biotech didn't is the open Weights labs out of China and the last benchmarks are four to eight months behind.
Wow, that's not much of a mote, it's right. Yeah.
I also want to ask you talk a lot about the physical end of this and the scarcity of compute and these data centers that have to go in and you make a comparison to Edison when they were starting.
Please explain that, right, So, when Edison built the light bulb, you know, this is so iconic that we have a bright idea cartoonist sketches a light bulb over our head.
David gets more of those than I.
It's fine, so fantastic.
You know, my wife says that minds are very mind or very dim, but that's fine, Like.
Yeah, you know what, it's there and that's what matters.
That's the key. But he did.
When the first Edison generator plant rolled out in New York City and I started, they were serving something like four hundred light bulbs. Right, So you can have an astonishing technology, but you need a network and ecosystem of other enabling technologies that have to build up to do that. In his case, it was generators and wiring and you know, everything involved in a power transmission system for AI. So we are used to and I think a lot of the sort of especially the vcs who went into AI,
is so heavy. They're kind of used to investing in SaaS companies, right, where scaling costs zero and the marginal cost are production is zero. But AI is profoundly quite different, right because you don't see as users go up the marginal cost going down that much.
Almostly it says the same, but it doesn't drop.
It isn't a zero, right, Like just these things are really expensive to run, and so the scaling of this involves capital expenditures and physical construction and you know, simple stuff pouring concrete, wiring buildings.
Those things are hard, right, They're.
Not like dumping code onto the Internet, and you need plumbers and electricians. And you know, my joke about it was, it's the return of the jocks, right, it's the the guys who actually and the women who do physical labor are becoming constraint here. That is unlike most things that the software you know that this world has seen before.
And a lot of those trades are understaffed as well at the moment.
Yeah, let me look at the other side of that. Coin, and I think you're talking about how this might not make money, might not lead to the kind of changes
a lot of proponents are talking about here. It does strike me the fact that this does have this whole complementary infrastructure component to it may make us less willing to see the fact that it might not make money, that this is seen as not just something that's going to improve the economy of information technology financial services, but could have this wider spread effect on the US economy. Do you think that's true? Is it clouding our sense?
Are we willing to pony up and pay for all of this fiscal construction because it seems like it's providing these wider benefits to the country.
So I think that cuts both ways, right, So it is you know, if you are an electrician, right now, this is awesome, Like, this is fantastic. This is the best thing that's happened to you in a long time. And since the Nited States a sort of apparently decided as a matter of national policy, we're not going to build housing and at least we're.
Building real data center.
At least we'll build something that's great.
But of course the flip side of that is data centers are incredibly unpopular or they cause political pushback everywhere they go. Large portions of Silicon Valley appear to opted the pr strategy of James Bond villains, and there is this kind of I think, you know, in some cases, I'm not sure this is about the data center as much as just an incohate rage of pushback and this is a thing we can we can go after, right And so when you're building this kind of infrastructure, you
need the people there to say yes. And right now, America, despite all these benefits, and I mean Louden County, Virginia, oh my gosh just said.
That they're telling with stone without hitting a data center.
I grew up in Rockville, Maryland, so this is like home for me. Right, Sixty percent of their tax revenues are going to be coming from data centers, So you would think this would be great, and yet instead you're seeing this huge pushback. I think this is another case where the industry's norms that it's that have evolved over the last generation kind of need to yield to the fact that saying having a public relations campaign where we're going to take away your.
Job and possibly end there's end of humanity.
Yeah, there's another PRL meant that you highlight in your latest column, and I wasn't even that aware of this, And that's you talk about where they're choosing to put some of this infrastructure, and it's in places that feels a bit exploitive, like especially there's this colossus one is going in largely without air permits, in a largely black neighborhood of Memphis. You talk about, So talk us through why those places and what that's doing.
I mean, those places have less political power to push back when the pollution gets so bad. Right, and so if you are an under enormous pressure to scale up your compute and you decide that the way to do that is to cut corners, and given all the obstacles that we've just talked about, you can see why the way you might decide to do that is to cut corners. It's easiest to do it in places where people have the least power to complain. If you do that in you know, Malibu, it's.
Not going to go down with.
Mali.
We also had a lot of time even in Laden County, Fladden County didn't want those data centers. You can bet they wouldn't be going in there, that's right.
I would ask, how are you thinking about the effect this is having on the labor market? So you mentioned that Pitch is going to take away all the judge opened up my computer on Friday, Touriston Slock of Apollo had this note, there is no negative effect on the labor market because of AI. We're not seeing jobs lost as a result of it. Yet, how are you thinking about that? Putting aside again all of the kind of ideological perspectives on where this might lead to eventually, do
you think it is having an effect? Is it changing how companies, the CEOs of whom you talk regularly, the way that they hire, the way that they fire, the way that they staff their companies?
Yet?
Yeah, but it's what I'd say, is what it's showing up in is it's two ways.
Right.
It's less firing, although we're seeing some of that, and a lot of the firing that is happening is less. I think about AI enabling productivity and more people kind of scrambling for cash to sort of try and chip away at these dragantic capital expertures. But it's making it less. I think people are becoming a more reluctant to hire just because of the uncertainty. But I think the deeper
and more profound effect is about fear. Right. You saw, especially during COVID, you saw the balance of power between companies and developers and people who have these skill sets swung really hard yes in.
Favor of labor.
What this does is give is it creates fear even if I'm not being replaced, I might be replaced, which makes me a lot more reluctant to ask for a raise or say I should have a say in the way the companies are governed. And I think a lot of CEOs, especially founder CEOs, for whom their company is their identity, like, I'm not sure I want to give these people a say.
And how We've only got about a minute left, and I'm going to ask the question that I always ask. I'm a bit of a skeptic about all this. One of the reasons is you talk about all this building, all this infrastructure, and a lot of that is being funded by credit and a lot of credit and a lot of circular credit. And for millennials who've lived through multiple crashes, I just feel like this is deja vu all over again. What is your take Is this a bubble?
Is this sustainable? Is it durable? Is it rippling? If not popping?
Where are we You can have a bubble and still have a real technology, And that I think is.
That's sort of to go back to where we were. That's the point that people are missing.
Right.
You can say these valuations are in You can look at I mean SpaceX, which is apparently now an AI company.
And say.
You're one point seventy five trillion dollars for these financials and say, if that's not a bubble, I don't you know, I don't know what is. I don't know what the GDP of Mars is going to be.
No, we've been talking about there's a meme going around that Navidia is worth more than all the arable land in Australia, right, I mean at some point that just seems ridiculous.
Yeah, and so, but at the same time you can say that twenty thirty years from now, this was a bubble, but something came out of it that was really a powerful, powerful That won't be a lot of consolation if you lose your shirt on debth On.
In the meantime, we.
Will leave it there. On that note, kind of Thank you very much. Great to see you lecture at the Old School of Management, of course, columnist from Bloomberg Opinion.
Stay with us for more on Bloomberg this weekend right after this.
All right, so, right now, the alcohol industry is taking a hit, with beer, wine and spirit makers losing a combined eight hundred and thirty billion in market share from twenty twenty one to twenty twenty five.
Yeah, and it turns out gen z ers they're actually looking to barbells over barstools.
Get it's okay for.
Their social for their social outlets. Bloomberg pursuits journalist Sam rap Arks. You talked to me about it a few days ago.
It's both the health decision and they're also looking for a community and places that they can't find at the bar because more and more young people don't drink. So it's not just a health choice. It's a health choice and a choice to please try and find more friends outside the office or the bar.
Really, all right, I want to dig into that community aspect in just a bit, But I have to ask, because we're talking gen z and millennials, what about the gen xers and boomers? Where do we stand?
Well?
The reacharch shows that there's still we're still going to the bar, They're still going to dinner. Maybe they're having dinner parties or house parties, owning homes. For the gen z who went to college perhaps in the pandemic and they had to you know, work out from home with YouTube videos, they had to go to class on zoom, they really want to go work out with other people.
They're really into finding a community in a place that they can't because they maybe started their career remotely, so they want to They're spending all this money in classes to find a community that they didn't have at their graduating college.
So you talk about community, So is it more you know, socializing, Like can they just go out and go on like a dating app? But no, they want to go and be where the people are. I guess it is what you're leading to, Yes, exactly.
I spoke to a technology consultant who said she met her boyfriend at her run club, not at a dating app, not at a bar, but at her run club, and she made friends at pilates. She goes to the same class every day. She compared it to school. She's like said it was like sitting next to the same person week after a week in a class was like was
like being in college. And if you have something that if you need us something to talk about, there's always the class, right, So it's like it needs the icebreaker and a sense of familiarity and community that you just don't get elsewhere for them.
And aside from that, they're drawing, they're throwing parties there, like bachelorette parties, like this is the thing.
Now, I didn't have my bachelorette party. Applate me neither, I do something else. But yeah, they're telling me that they're hiring out the whole studios, spending thousands of dollars to rent out the equipment, have a teacher in, have mocktails. Instead of going to the bar, they'll bring their girlfriends to a plates class, which.
Is kind of wholesome. I think.
All right, so you mentioned money. So how much are these Gen Z and millennials. How much are they spending on memberships, on classes, on things like that.
I spoke to.
One person whose budget was eight hundred bucks a month on fitness, which is which.
Is quite a lot of money.
But they're out spending proportionally millennials and Gen X and boomers proportionally to their income on fitness and spending more than last year in a mental survey as well.
So it's growing.
The trends thing to be NonStop. But part of it is that they can say that they feel better afterwards. Unlike going to a bar. There's no hangovers, there's no wearable like an or ring or whoop telling you your readiness score is lower the next day. They just feel better after a gym class.
Okay, it's good to feel that way. You don't want to have the hangover all the time. But they're doing all this, and they're spending all this money when you know rents are higher, when they're dealing with student debt, Like, how are they making this work?
I think it's a sort of like zero sum game in their heads, as if maybe I can never afford a house, but I can put maybe a two or two hundred dollars membership on a credit card. Right, So if they don't see long term prospects, there's the risk of ai for their future, they might as well do something that makes them feel good in the short term. And I think Jim spending is a big part of that.
It is now in the article you mentioned one thing that I want to point out. You talk about how wellness has become a full fledged identity. Now I know my social media feed, it's filled with you know, people working out, it's you know what am I meal prepping for the week, like all these different things. I mean, does social media have a lot to do with it too, about more people going or these younger generations going to the gym.
Yeah, I do think there is a performative aspect with like the hashtag plotis on TikTok, the clean girl asthetic or people wearying and their matching two hundred dollars plot sets and wanting to look the part. I think that is a really big part. I spoke to a content creator in Atlanta who's twenty three, and she documents all of her gym sessions. She's made friends at the gym, but she's also made it her business online like her
content creation arm. So I think the lifestyle aspect and the way that social media has really driven that wanting to look a certain way and perform a certain way online is huge.
Okay, go back to me the clean girl. What is it explain that one?
To me, the clean girl look is is like ath leisure and we're wearing less.
Obviously, Okay, yeah, sort of a.
As opposed to the millennial I would say, like Kesha aesthetic, if that makes sense to you. It's a different one. Wanting to look wanting to look, yeah, more like wellness oriented as if instead of you just got back from the bar.
Okay, got it?
And last question, does do GLP ones Does that have anything to do with this as well? Does that play into the picture?
I think it does. That doesn't come up so much in the research, but people who are on JLP ones are told to strength train as part of that regimen, So I think that could be as more younger people get on JLP one this it becomes more mainstream and wanting the strains trained to keep up that as part of the medicine. I think that'll be a really big ongoing part of this trend to keep it going into the future.
All Right, I work out in my basement now, I don't even go to the gym. So this seems like, yeah, it's a big social thing, but are people still going to the bars?
Like how are bars and restaurants doing?
Bars and restaurants are making menus that cope with people who are on jlp ones some more small plates, smaller portions, mocktail options. I've seen a lot of more creative mocktails now for people who aren't drinking. So I think there, of course is a space for bars and restaurants. I
for one, enjoy a nice bar dinner out. But I think that hospitality, especially like hotel lias and business owners need to find a way to make a community in the way that the gyms are killing it at to really get really get that gen z spend.
At the moment, I got it, I'll meet chat Happy Hour Sarah Sarah Rapp join your.
Song right.
Totally Bloomberg Pursuits.
Thank you so much, So David Christina, if I decided that we're going to go, yes, yeah, are you going to join it?
I know I'll have a cocktail and skip the PILATEUS plus, but I hope you guys have a great time. Whenever that transpires. AM eager to hear about it.
It'll be great. You don't know, I come and hang out and do some you know, hundreds with us.
No, thanks for.
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