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17:53
PDT

Automation is essential to address workforce shortages.

Honeywell AI

– AI can enhance productivity by enabling less experienced workers to take on more complex roles.

– Concerns about job displacement are overshadowed by the immediate need for skilled labor.

– Long-term workforce availability is a critical issue for operational efficiency.

– Companies must adapt to a changing labor landscape driven by demographic shifts.

automationAI adoptionlabor market dynamics

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So they are already forecasting fewer and fewer people available as a workforce for specific roles. The only solution is to automate a portion of work or to make the work performed by lower-skilled people. This means we have to create more tools so that people are more productive, allowing a five-year experienced person to do a 15-year experienced person's role. This is where the physical AI world comes in, where we are having leadership, using the data we created and have in our systems. We train the data to perform tasks, making our customers more skilled and their assets run smarter, and operations run better. Workers must be anxious about it. Yes and no. If you are in a segment with a visa, there is a shortage of people by default. There, the role of AI will be more agentic systems coming in over a period of time. This is true for every company. However, if I look at our customers' world, they don't have enough people to run their operations and maintain them efficiently. So there's less anxiety about anyone taking a job. The more significant anxiety is about what will happen three to five years from now. Foundationally, pretty much in the entire world, the population is not growing. The implication of that is that 10 to 15 years from now, there will be less workforce coming into work. So how will work happen in that case when you need touch labor? I think displacement will occur.

Analysis

The workforce is projected to shrink, necessitating automation and tools to enhance productivity, allowing less experienced workers to perform at higher levels. Companies face a looming challenge as the global population growth stagnates, leading to a potential labor shortage in the coming years.

17:51
PDT

Honeywell is focusing on AI to enhance productivity.

Honeywell Elliott MBA AI Lean Six Sigma

– The company plans to split into three entities to capitalize on growth sectors.

– There is alignment with activist investor Elliott on strategic direction.

– CEO emphasizes clarity in strategy for long-term success.

– Honeywell's digital readiness allows for faster technology adoption.

AI adoptioncorporate restructuring

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We had a decision to say, let's check the tertiary factors and make sure that we are not making any error. That's where we want to use external help, and we do. And we like to work with external bankers and consultants. Are there any books or management frameworks that have helped you along the way? I never studied MBA, so I was always conscious of that. So I always used to read a lot of books on something which I'm experiencing. I mean, early days, I was a big fan of Lean Six Sigma. Twenty years back, I read books on the Toyota production system, how exactly it works, right? So you go with that. That's a page-turner. Yeah. So you are always using a good quality framework all the time. Nowadays, you kind of watch a lot, and you know YouTube is kind of a new way to go. How do you learn about AI and what it means versus large language models versus agentic versus generative? You need to know it all. But how important is AI to the work you do at Honeywell? We, as a company, have been a faster adopter of technology. So to me, part of it is how it drives productivity in our own operations. The advantage we have is because we are digitally native for many years. We invested in a lot of foundational systems. We can adopt it faster. We don't have to do the foundational work. But the bigger opportunity for us is how we use it for our customers. But is this productivity, or does it actually enable you to do something that you can't do now? Is it transformational? I would say where we have seen the most impact is more productivity, specifically in software development.

Analysis

Honeywell's CEO emphasizes the importance of AI in driving productivity and operational excellence, highlighting the company's readiness to adopt new technologies. The strategic decision to split the company into three entities aligns with the growing aerospace and automation sectors, reflecting a long-term vision for sustainable growth.

Smart investors should note that Honeywell's proactive approach to AI and technology adoption positions it favorably in a rapidly evolving market. The consensus with activist investor Elliott suggests a strategic alignment that could enhance shareholder value and operational focus.

17:49
PDT

U.S. CEOs face increased unpredictability from government policies.

U.S.White House President Trump

– Adaptability is crucial for navigating rapid changes in the business environment.

– Focusing on foundational principles can help mitigate reputational risks.

– Data utilization is key to achieving operational excellence.

– The evolving political landscape is becoming a new normal for businesses.

political riskdata utilizationCEO adaptability

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We have been controlling building infrastructure, airports, refineries, and warehouses for many years. But the data we collected was only used for control. And that's the question we are asking ourselves: how does the data become more useful for the operational excellence of an asset? So that's an opportunity for us. But given we're talking about leadership, how difficult is it to be a U.S.-based chief executive with unpredictable policies coming from the White House? I mean, I would say businesses like predictability, and clearly the predictability is less or things are changing faster, and you have to adapt to it. I mean, you know, this is a reality, and whether it is a tariff-based thing which occurred, now that's become a new normal. We fully understand what the administration's expectation is. The job of CEOs has become much more dynamic in scope. So to me, it's in the series of that constant high amount of change. And we are getting more and more used to dealing with the change all the time. But is it having thicker skin? I mean, sometimes you see also President Trump attacking companies. So how do you manage reputational damage? With all the right things as a company? I mean, as a company, we believe you should do what's right for our shareholders and what's right for our customers. And as long as you focus on the foundational things, I don't wake up in the morning to worry about external factors beyond my control. Even if that means policy change or being directly attacked? Policy change? I mean, the policy change you have to respond to at any point in time. Absolutely. Who do you rely on for?

Analysis

U.S.-based CEOs are increasingly challenged by unpredictable policies from the White House, which complicates business operations and necessitates adaptability. Despite these challenges, leaders emphasize the importance of focusing on foundational principles to mitigate reputational risks and maintain shareholder value.

Smart money should note that the evolving political landscape is becoming the new normal, requiring companies to develop robust strategies to navigate policy changes. The emphasis on operational excellence through data utilization presents a significant opportunity for firms to enhance asset performance amidst these uncertainties.

17:44
PDT

Elliott Management's involvement aligns with Honeywell's strategic direction.

Honeywell Vimal Kapoor Elliott Management

– CEOs should maintain clarity in their long-term strategies.

– Articulating a passionate vision can help in gaining stakeholder support.

– Performance issues must be addressed with clear underlying drivers.

– Activist investors often amplify existing concerns rather than introduce new ones.

activist investorscorporate governancestrategic clarity

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Will be watching this, and a lot of them will want to know. I mean, did you call Elliott's when you found out? Do you call? Yeah, we met with them right away. Straight away. And then it was an exchange of ideas of what they wanted before you told them your plans, or was it consensus? No, their letter was public on what they wanted. And so we understood their plans, and we shared our point of view on what we want to do and why, and there was a consensus on that's the right thing to do. So what's your best piece of advice to the chief executive that will be getting a call maybe today? I would say that if you have a conviction on your strategy, that's what you need to really think about and worry about. If that's clear, then it's less about what they believe in; it's more about what you believe in. And if you believe in something and you're able to articulate it with a lot of passion, the probability is that you will be listened to. But if you're all over the place, then the opposition can win because you lack clarity. So be prepared at all times in your strategy. I think you should be clear on the longer-term view of your business. And specifically, when the business is not performing well or the stock is not performing well, you need to be clear on what the underlying drivers are and what you are going to do about that. If you're clear on it, whether it's your current shareholders, they're asking the same question. It is not then activists have to show up. We all have shareholders, and they're obviously going to ask the question, what's the pathway to break this lack of shareholder return? Your board is going to ask you that question. So I don't think the question really changes. It's just a narrative of...

Analysis

Honeywell's CEO, Vimal Kapoor, emphasized the importance of having a clear strategy when engaging with activist investors like Elliott Management, who recently acquired a significant stake in the company. He advised that conviction in one's strategic vision is crucial for CEOs, especially when facing pressure from shareholders or underperforming stock prices.

Kapoor's approach highlights a critical insight: clarity and passion in articulating a long-term business strategy can significantly influence stakeholder perception and support. This suggests that companies with well-defined strategies may better navigate challenges posed by activist investors and market volatility.

17:42
PDT

Honeywell is splitting into three entities to enhance focus and growth potential.

Honeywell Vimal Kapoor Elliott Management AI chat GPD CEO GPD

– Aerospace and automation sectors are identified as key growth areas.

– Elliott Management's involvement has catalyzed the restructuring process.

– Kapoor emphasizes thoughtful execution for long-term success.

– The strategic split aligns with market demands and investor expectations.

corporate restructuringactivist investorsaerospace growthAI integration

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That was my incoming thesis when I started, but two things happened simultaneously when I started as a CEO. The first was the aerospace industry started growing, and at the same time, chat GPD came in, and AI started becoming an important conversation. I always felt that we need to simplify. Aerospace has a huge growth potential in front of it. The automation business has a huge growth potential in front of it with AI. When we did the work, we found that each company can stand on its own feet with these growth vectors, which went toward this decision. But it must be hard to take a company that you've always worked at and decide to split it up into three completely different entities. Yeah, I think it's hard. But if you do it thoughtfully, you're preparing each company for their success for the next 50 to 100 years. And that's a belief we are really in that each segment we have created is capable of its own future with a very compelling proposition. You also had an activist investor on your tail, Elliott. Yes. Did that focus the mind? Was that a catalyst for splitting up? It was. Elliott came into our Honeywell stock in late 2024. We were far along the way towards this journey, and I would say that given what they wanted versus where we were going strategically, we were quite aligned. So there was no disagreement. It was not about what, it's about how. I want to go from A to B, go by train or go by plane. That's an opinion.

Analysis

Honeywell's CEO, Vimal Kapoor, is strategically splitting the company into three distinct entities to better position each for long-term success, driven by growth in aerospace and automation through AI. The involvement of activist investor Elliott Management has aligned with Kapoor's vision, suggesting a consensus on the strategic direction despite the challenges of such a significant restructuring.

17:40
PDT

Elliott Management has taken a significant stake in Honeywell, pushing for a breakup.

Vimal Kapoor Honeywell Elliott Management AI CEO Gisec Global Middle East Now Kapoor But Elliott

– Kapoor had already initiated a portfolio slimming strategy with a recent spin-off.

– The pressure from activist investors is reshaping corporate strategies in large firms.

– Kapoor's response to Elliott's demands will be critical for Honeywell's performance.

– The situation underscores the importance of adaptability in leadership.

activist investorscorporate restructuring

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Defined by technology alone. As sovereign AI reshapes digital independence, as agentic AI transforms decisions, as quantum unlocks new possibilities, every breakthrough demands a cyber-first mindset. That's why the future meets at Gisec Global, the Middle East and Africa's largest cybersecurity event. We shape policy and power innovation. We protect the digital order. The most exciting rising economies are shaping the global future. Join the conversation. Subscribe to Emerging on your favorite podcast platform today. In 2024, not long after Vimal Kapoor assumed the role of Group CEO, a well-known activist investor at the investment management amassed a $5 billion plus stake in Honeywell and called for the conglomerate to split. Now Kapoor was already in the process of slimming down the portfolio, having announced one month earlier the spin-off of Honeywell's advanced material business as a standalone company. But Elliott's move also showed a spotlight on the company's performance and strategic direction. So in February 2025, shortly after Elliott's intervention, Kapoor confirmed that the remainder of Honeywell would break up. I wanted to know how Kapoor handled the pressure, how it impacted his decision-making, and how he thinks other CEOs facing activist investors can focus on driving.

Analysis

Vimal Kapoor, the Group CEO of Honeywell, is navigating significant pressure from activist investor Elliott Management, which has amassed a $5 billion stake and is advocating for a breakup of the conglomerate. Kapoor's prior decision to spin off Honeywell's advanced material business indicates a strategic shift towards a leaner portfolio, aligning with Elliott's demands for improved performance and focus.

The intervention from Elliott Management highlights the growing influence of activist investors in corporate governance, particularly in large conglomerates. Kapoor's ability to manage this pressure and adapt his strategy will be crucial for maintaining investor confidence and driving Honeywell's future direction.

17:37
PDT

Kapoor advocates for accepting all roles to enhance career prospects.

Honeywell Vimal Kapoor CEO

– Performance in multiple roles is crucial for advancement.

– A meritocratic approach is emphasized in corporate culture.

– Adaptability and performance are key traits for leadership.

– Hiring practices may shift towards valuing diverse experiences.

leadership developmentcareer progression

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And here's an alternative way to do it. So what was the moment where you thought you were being considered for a CEO or a bigger job? So for Honeywell, I would say there's no one movement. First thing I did was never say no to any role because I always believed that all jobs are good. Can you say no to a role or if you're offered it, you usually have to say yes? Yeah, but sometimes if you're too choosy and too debating, I think you are starting with a negative mindset. I always say that if a role exists in a company, it is important because large companies will eliminate a role if it was not important for them, right? So I think each role you, when you perform and you outperform, that makes the case that you're ready for the next move. And I think there was no one job which I did which made such a big transformational gain. It's like this job, you performed well, next job you performed well. And it was, I would say, two or three times when I outperformed, it kind of makes a case that, okay, you're a strong candidate. So when did you get the call to go to head office? What was that like? So I was a segment leader in 2022 when my previous CEO of Honeywell mentioned that he would like to, you know, consider retirement. And he mentioned to me that that's a plan and I'll have to go through the formal interview process with the board, you know, I'm the candidate, but I'm on the selection. Then the process is quite interesting because you have to put forward a vision of the company to the board and you have nobody supporting you.

Analysis

Honeywell's CEO Vimal Kapoor emphasizes the importance of accepting all roles within a company to build a strong case for advancement. He notes that outperforming in multiple positions can lead to consideration for top leadership roles, highlighting a meritocratic approach to career progression.

Smart money should recognize that Kapoor's philosophy of embracing every opportunity reflects a broader trend in corporate culture where adaptability and performance are key to climbing the ranks. This mindset may influence hiring practices and leadership development strategies across industries, particularly in large organizations.

17:35
PDT

Empowering front-line employees is key to reducing bureaucracy.

Honeywell Tata Group

– Structural changes in decision-making can enhance productivity.

– Courage and visibility are essential for effective leadership.

– Fact-based feedback is preferred over generic opinions.

– Honeywell's global structure facilitates participation in decision-making.

corporate governanceemployee empowerment

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They feel more empowered. So that to me is a fundamental difference that you come with a mindset of how to make things easier because big companies can make things more complicated. So concretely, how do you do it? Do you remind people also on the ground or do you remind headquarters to listen to people on the ground? Simply saying reduce bureaucracy, you can end up creating work which is more than the previous work which will not lead to any outcome. But if you want to get more work to the front end, you have to make structural changes on how you're organized. Maybe the decision rights have to move from center to the front end. And that requires time. But that's some of the things we have been doing. Is it difficult to get noticed? Again, when you were sitting in India, was it difficult to speak up if everything felt so far away? In a company like Honeywell, there's a benefit of having a global structure in which you get to participate in different decision-making. But obviously, as I moved into different roles, your visibility changes because your decision rights are changing, right? You are doing different roles. I never felt I was not heard. Part of it is also in your own mindset. How much you think you can bring up something and that's why the quality of courage is very important. How do you say what's working well and are not working well with facts? You don't offer opinion. You don't kind of pass the generic statement, 'Oh, this doesn't work.' Tell me more.

Analysis

Honeywell's leadership emphasizes the importance of empowering employees at the front end by reducing bureaucracy and shifting decision-making rights. This structural change is seen as essential for enhancing productivity and responsiveness within the organization.

The discussion highlights the significance of courage and visibility in corporate roles, suggesting that effective communication and fact-based feedback are crucial for driving change. Smart money should note that companies prioritizing employee empowerment and streamlined decision-making may outperform their peers in the long run.

17:33
PDT

Kapoor's career highlights the value of diverse experiences in leadership roles.

Vimal Kapoor Honeywell Tata Group CEO Then Honeywell

– Non-traditional paths to corporate leadership may gain acceptance.

– Customer-facing roles are critical for understanding business dynamics.

– The importance of adaptability in job roles is emphasized.

– Kapoor's perspective may influence future hiring practices in tech.

leadership diversitycorporate structuretalent acquisition

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Of what you didn't want to do. So my first job was a government-owned company. I didn't like the speed at which they worked; it was not my place. So I found a job in another smaller company, which was much more traditional in its way of working, very centralized, and I didn't like that either. Then Honeywell started a joint venture with the Tata Group in 1988, and I joined in 1989. It was actually a startup. One benefit there was that you didn't have a defined job. The job depended upon what was going on, and you had to take on different roles, which made you learn more by default. There was less compartmentalization. So that early learning through that cycle was very, very helpful to be in the commercial function, to be in project management, and that gave you a much more accelerated pace of learning. So there's a school of thought that says, look, if you don't work in the headquarters, it's actually very, very difficult to rise to the top. That wasn't your case. One thing I always believe is there's no one definitive path for you to get to the top of any role in a company. So I did practically all my life in roles that were customer-facing or business-related and never worked in corporate ever. So it's kind of good to be called corporate now and being CEO of the company. That's different, but I certainly benefit from my years of experience in different segments of the company. I mean, that's really different from other CEOs.

Analysis

Vimal Kapoor reflects on his unconventional career path, emphasizing that there is no single route to the top in corporate leadership. His diverse experiences across customer-facing roles and project management have equipped him with a unique perspective that contrasts with traditional corporate trajectories.

Smart money should note that Kapoor's success without a corporate background suggests a potential shift in how leadership talent is evaluated, prioritizing practical experience over conventional pathways. This could influence hiring practices in the tech and manufacturing sectors, favoring candidates with varied operational backgrounds.

17:30
PDT

Honeywell Technologies is leveraging AI to enhance productivity.

Honeywell Technologies Vimal Kapoor Honeywell International AI PM CEO US Watch Bloomberg Real Yield Francine Lacqua PRIVATE

– Vimal Kapoor's leadership reflects a diverse career path.

– Automation sector poised for transformation through technology.

– Honeywell's strategic focus may reshape competitive landscape.

– Cultural adaptability in leadership can drive innovation.

automation technologyAI integrationleadership diversity

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It's not just like let's buy the Mag7 or AI. That's a really compelling story. This is where your trading day begins. And this is open interest only on Bloomberg. Get your fixed income fix. Watch Bloomberg Real Yield every Thursday at 12 PM Eastern. Right here on Bloomberg, context changes everything. We as a company have been always fast adopters of technology and we use AI naturally. Where we have seen the most impact is more productivity. Transformational change will occur if we redraw our work, in which we can use agents as part of our workflow. And that requires us to reimagine the work by itself. I'm Francine Lacqua, and this is Leaders, the podcast that explores what drives the world's most influential people. Be sure to follow and subscribe now, so you never miss an episode. This week, I'm speaking to Vimal Kapoor, the chair and chief executive of the newly formed automation company, Honeywell Technologies. Until recently, Kapoor was a group chair and CEO of Honeywell International, the tech and manufacturing conglomerate that made everything from thermostats to aircraft engines. Now, Kapoor's road to the C-suite is particularly interesting to me. He started and spent much of his career in India, his birthplace. Joining in his 20s, he then rose to running its automation business in India, a satellite side of Honeywell. But it wasn't until later that he moved to corporate Honeywell in the US and eventually secured the top job.

Analysis

Honeywell Technologies is positioning itself as a leader in automation, emphasizing the transformative potential of AI in productivity and workflow. Vimal Kapoor's journey from India to CEO highlights the importance of diverse experiences in driving innovation within the tech sector.

Smart money should note that Honeywell's focus on integrating AI into its operations could lead to significant efficiency gains, potentially reshaping competitive dynamics in the automation industry. Kapoor's leadership style, rooted in his international background, may foster a culture of adaptability and innovation that could attract talent and investment.

17:28
PDT

Creation of 25,000 new jobs linked to AI advancements.

AI Western countries Africa Saint-Petersburg

– Economic impact estimated at $3.5 billion.

– Technology enhances seamless shopping experiences.

– Consistency in pricing between online and in-store is vital.

– Western countries are protecting funding to Africa for various programs.

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Getting $3.5 billion in economic benefits and creating 25,000 new jobs gives a competitive edge in the global AI race. Some see heroes; others only egos. We see the era of billionaire athletes. While others follow the noise, we follow the money. In some categories that are online, you know, less a percentage of the total. How does technology help in making it seamless online to store and vice versa? The biggest thing is for the customer on the front end, that she can be in the store, that she can actually shop here, go back home, and complete that purchase. If you look at these price tags and everything, they're all these digital tags. That's because they're the exact same prices they are online. So you're not going to be surprised that you saw something in the store and then decided to purchase it online, that it's somehow different, and that the offering is different. It's actually very consistent, but when she's here, she can have her app open, and everything that she's doing here can be very similar to what she's doing at home. I think that consistency is quite important. Western countries, all of them, are protecting funding to Africa. Some of these programs were supported by funding coming from Western countries, like for human resources, for testing, for transportation of Saint-Petersburg.

Analysis

The discussion highlights the significant economic benefits of creating 25,000 new jobs and generating $3.5 billion in economic impact, emphasizing the competitive edge in the global AI race. The integration of technology in retail is transforming customer experiences, ensuring consistency between in-store and online shopping, which is crucial for consumer satisfaction.

17:26
PDT

Management team quality is critical in acquisitions.

Liverpool Tottenham Ted Lasso Succession

– Emotional intelligence can influence team motivation.

– Preference for challenging investments indicates a strategic approach.

– Desire to develop underperforming assets may signal market opportunities.

– Personal experiences shape investment philosophies.

management qualityteam dynamicsinvestment strategy

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Much this game could change. Rapid fire questions. Oh gosh. What is the same great indicator you always look for in a business you're considering buying? People. What kind of people? Loyal, hardworking. The management team is always nine tenths of the business. So you don't, if you don't have a good feeling, if there's chemistry with people, I don't go into business. No, definitely not. You've given pep talks and dressing rooms. What's your top tip for motivating a team? Oh, my worst tip, although it probably worked, was I remember being beaten really badly and going into the dressing room and crying. And I felt so bad for embarrassing myself in front of all the lads. And I felt so bad because they were exhausted. And I cried, and that was really embarrassing. And I came out, and I was just heartbroken. I was so angry with myself. And then everybody had to cheer me up. So it took their mind off the game, and they just had to cheer me up. Ted Lasso or Succession? Ted Lasso. Definitely. I used to watch it religiously, and then I thought, I can't watch this anymore. It's gonna, because then I just think it's personal or not personal. If you were able to wave a magic wand, Liverpool or Tottenham to buy? Tottenham. Why? We want to go into something that we can really help and develop. I just want a challenge, and we want to go somewhere where there's a challenge. And that's what excites me. And that's where actually you get...

Analysis

The discussion highlights the importance of people and management chemistry in business acquisitions, emphasizing that a strong management team is crucial for success. Additionally, the speaker expresses a desire for challenges in potential investments, indicating a strategic approach to selecting opportunities that allow for significant development and impact.

Smart money should note the emphasis on emotional intelligence and team dynamics as key indicators for investment decisions. The preference for challenging projects suggests a potential shift in focus towards underperforming assets that can be revitalized, which may present unique opportunities in the market.

17:23
PDT

Stavely faced emotional challenges in selling her stake in Newcastle.

Amanda Stavely Newcastle United PIF Oh Amanda

– The decision was influenced by a strong offer and the need for management autonomy.

– Successful leadership involves making tough decisions for the greater good.

– Capital raised from Newcastle's success may enable further investments.

– Stakeholder dynamics can complicate operational effectiveness.

stakeholder dynamicsleadership decisions

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At the wrong level. If you put overpay, you can't get these wrong because you've got to buy them well and then you've got to sell them well. So why do you walk away in 2024? It was the toughest decision I have made. It was so hard. I've riled with my husband so much about it. I had such good memories and it was really hard, but we felt very much that we got a great offer for our shares. We also felt that we'd done an awful lot and perhaps we were doing too much and that the management team wanted the chance to be able to run the club the way they needed to and they needed to be able to live. It was a very hard decision. In fact, right up until the day we agreed, I was still rowing. I was in tears for many days and didn't want to do it. Is that the hardest thing to walk away? Yes, yes. But we left it in amazing shape. But that's leadership. You've got to make decisions and also it's difficult because I was a stakeholder, an owner, and PIF were the majority owner and I wasn't the owner. It's hard when they're saying to me, 'Oh Amanda, you haven't quite bought that brilliant player in at this price.' We were delivering, but it was hard when the management team couldn't tell the management team off and say, 'Why isn't this being done?' Well, Amanda was there all the time. So we needed to give the management team time to deliver. I think we've also been able to raise a great deal of capital to invest in other businesses. So if we'd not had the success at Newcastle, maybe we would not have been able to do that.

Analysis

Amanda Stavely reflects on her difficult decision to walk away from her stake in Newcastle United, citing a great offer for her shares and the need for the management team to operate independently. This decision underscores the challenges of balancing ownership with effective leadership in a high-stakes environment.

The emotional weight of her departure highlights the complexities of stakeholder dynamics, especially when majority ownership lies with another entity. Smart investors should note the potential for management teams to thrive when given autonomy, which can lead to better long-term performance and capital allocation.

17:21
PDT

PIF faced challenges in gaining regulatory approval for the Newcastle acquisition.

Public Investment Fund Newcastle UK media UK regulators Premier League PIF UK

– Initial conditions at Newcastle were critical, with a high risk of relegation.

– PIF's strategy involves building relationships and enhancing commercial value.

– The negotiation process with UK regulators was lengthy but ultimately successful.

– Concerns over sports washing impacted public perception and media coverage.

foreign investmentsports managementregulatory approval

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Which one thing I'm not as shy, and I think we'd actually got to know the business so well before we bought it because it took so long. So we got to know our PIF colleagues so well; the plan was gone through in detail, the focus: What are we doing? Where are we on this journey? And we were building relationships, but then obviously, you know, those accusations of sports washing, but it was hard to convince the UK media. Yes, yes. And UK regulators? Yes, and that took a long time. How did you do? But we did. We met with all of the regulators, and, you know, we got there and we negotiated a contract which is, you know, subject to, is very confidential, but it was tough, and PIF don't get involved in the day-to-day running of the club, you know, they really don't. It was hard because that was possibly one of the toughest things because when we arrived, there was no staff. There were very, very skinny staff at Newcastle. Remember, when we took over, we were 19th, with a 95% chance of being relegated. We had a manager that wanted to walk out. That was tough, and we had to build not only the football side; we had to bring in players, we had to bring in commercial values, we had to convince the Premier League, and then we had to go through this total change of new rules at the Premier League as well. But I mean, the first hurdle, I guess, was centering on whether members of the Saudi ruling government would also become direct.

Analysis

The acquisition of Newcastle by the Public Investment Fund (PIF) faced significant challenges, particularly in convincing UK media and regulators amid concerns over sports washing. The initial conditions at Newcastle were dire, with a high risk of relegation and a lack of staff, necessitating a comprehensive overhaul of the club's operations and strategy.

Smart money should note that the PIF's approach to not directly manage the club's day-to-day operations may signal a long-term investment strategy focused on building value rather than immediate returns. The successful negotiation with regulators indicates a potential shift in acceptance of foreign investments in UK sports, which could open doors for similar future deals.

17:17
PDT

Litigation against Barclays deemed cathartic.

Barclays Amanda Stavely PCP Qatar UAE Abu Dhabi Saudi China CIC DMS Die Verkaufs Blumberg Trey

– Legal victory on fraud highlights transparency issues.

– Sovereign investment relationships require trust.

– Potential vulnerabilities in major financial institutions exposed.

– Risk management practices may need reevaluation.

financial litigationsovereign investmenttransparency in finance

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Die Verkaufs-Litigation war in der Ende sehr kathartisch. Blumberg Trey DMS.

Analysis

The recent litigation surrounding Barclays has been described as cathartic, highlighting the complexities and risks involved in high-stakes financial deals. The outcome of this case underscores the importance of transparency and trust in investment relationships, particularly with sovereign entities.

Smart money should note that the legal victory on fraud indicates potential vulnerabilities in major financial institutions and their dealings with investors. This situation may prompt a reevaluation of risk management practices and due diligence processes in future transactions involving sovereign wealth funds.

17:15
PDT

Stavely sued Barclays over undisclosed fees in a deal involving Middle Eastern investors.

Amanda Stavely Barclays PCP Capital Partners Qatar PCP

– She won a fraud claim, establishing that PCP was defrauded.

– The case emphasizes the need for transparency in financial transactions.

– Stavely's actions may influence how banks manage disclosures in future deals.

– Reputational risks for banks could increase if transparency is not prioritized.

legal disputesbanking transparency

▸ Full transcript

Very bank, you helped fail out. So what happens with Barclays? Because this was a great deal and then you decided to sue them in 2015. Yes, yes we did. Why? Because it was a shock. So when we did the deal, Barclays said to us in writing and verbally, that the deal that I had was exactly the same as the deal with the Qataris. And there were no hidden fees. Barclays did do a secret deal with and they did pay the Qataris. Why did you sue? Because it could have, I mean, you didn't win. So I did win on fraud. The judge did find that I was, PCP was defrauded and to the point of civil fraud. So it felt, did it feel risky? What, to sue? To sue? I think no, because actually I won the fraud part which allowed, you know, something. And the rest of that is subject to confidentiality. Why did you do it? Principal or money? No, it was principal. I think once I'd read the judgment, that's why I did it. And so now anybody that knows about me and questions how much I did that transaction knows that that judge said that single 34-year-old girl basically bailed the bank out and that's why I did it. You got dragged through the mud. I mean, there were some pretty unpleasant things said about you. Yes. Some of the attacks felt...

Analysis

Amanda Stavely's legal battle with Barclays highlights the complexities of high-stakes financial deals, revealing that she was defrauded despite winning on the fraud claim. This case underscores the importance of transparency and trust in investment banking, especially when dealing with significant capital from Middle Eastern investors.

The ruling in favor of Stavely on fraud indicates a potential shift in how financial institutions handle disclosures and agreements, which could impact future negotiations. Investors should note the implications of this case on the reputational risks banks face when engaging in opaque dealings, particularly with sovereign wealth funds.

17:13
PDT

Stavely's negotiation skills were pivotal in securing the deal with Abu Dhabi.

Amanda Stavely Abu Dhabi Barclays

– The deal was initially met with skepticism due to market conditions.

– Stavely emphasized the strategic relationship over immediate financial returns.

– Middle Eastern investments are often driven by broader strategic interests.

– Trust and personal relationships are critical in high-stakes negotiations.

strategic investmentMiddle Eastern finance

▸ Full transcript

writing my notes. So again, you're sitting with multiple investors. I mean, multiple jurisdictions, multiple parts of the world, you're negotiating the deal, you're calculating yourself. What was the hardest part in that? God, everything. I mean, I had to convince his highness and everybody at the end that the deal would be profitable because there were so many people that were fearful that it would be a disaster. Because remember, once you've actually secured the deal at that price, the market fell. How do you convince a very powerful entity that they're not going to lose money? I don't know how I did. Actually, they were seriously brave. But you were sure of your deal. There was no doubt that this was not going to make money. Yeah, a lot of money. And I said, you will be incredibly rich. Now, that's not why Abu Dhabi makes investments, sorry, that to be very clear that's not I wanted to be, that to be very, but because they make for different reasons and this was a strategic relationship. And actually, I was led by the fact and they will be led by the fact that this is an amazing strategic relationship for Abu Dhabi to have with Barclays, which it always was. Almost a decade later, that same Barclays deal lands Amanda Stavely back in the spotlight, time in court. She sues the bank for around $2 billion arguing Barclays misled the market about its deal with.

Analysis

Amanda Stavely successfully negotiated a significant investment deal with Abu Dhabi for Barclays, despite market fears of potential losses. Her confidence in the deal's profitability highlights the strategic importance of such relationships for Middle Eastern investors.

The insight here is that while financial returns are crucial, the underlying strategic relationships and trust built during negotiations can be equally important for securing investments. This reflects a broader trend where geopolitical considerations increasingly influence financial decisions.

17:11
PDT

Barclays is seeking to raise three billion in equity.

Barclays Sheikh Mansour Qatar China CIC Saudi Arabia USDCNH PRIVATE

– High coupon rates are being used to attract investors.

– Key investors include Sheikh Mansour, Qatar, and China.

– The capital raising was completed in a rapid three-week timeframe.

– The competitive landscape for banking investments is intensifying.

capital raisingbanking investmentsMiddle Eastern investment

▸ Full transcript

So we felt that the reserve capital note that we eventually did would mean the government would have been doing a quite high coupon. So we'd actually be able to force Barclays to pay us an equally high coupon on the bond side. We went and said we can invest about three billion. We noticed that Qatar were already pretty much at their limit to what they could invest in the bank without a full takeover. So we thought we might be the only game in town. But we hadn't raised the money. So we had spoken to his Highness, obviously, Sheikh Mansour, and they were brilliant, and Ipik were really backing, but we were also speaking to Kuwait, Saudi Arabia, China, and CIC, and we were raising this three and a half billion in about three weeks. Again with a small team. It was me. That's why I fight. This is quite extraordinary. No, well, I'm very numerous. So I still, when I went to do my Barclays due diligence, I'd take my tri-forms, and I used to do all my own models, and I have my Bloomberg terminal. So, you know. That was a good idea. And that was all I had. Barclays was a different level because, A, you've got to go in, and you know that you've got to be very disciplined. We felt that the bank needed about three billion of equity as a minimum. And that meant that you couldn't just structure this as a bond; it had to be done as a base equity level, which was something called a mandatory.

Analysis

The discussion highlighted a strategic move to raise approximately three billion in equity for Barclays, leveraging high coupon rates to attract investment. The involvement of key players from the UAE, Qatar, and China indicates a competitive landscape for capital allocation in major banking institutions.

Smart investors should note the urgency and speed of capital raising efforts, as the team managed to secure commitments in just three weeks. This reflects not only the confidence in the investment but also the potential for significant returns in a market where traditional funding sources may be reaching their limits.

17:06
PDT

Middle Eastern investment in football was initially viewed with skepticism.

Amanda Stavely Manchester City Abu Dhabi UAE UK Middle Eastern Middle East

– Valuations for football clubs have significantly increased since 2008.

– Trust and vision were key factors in securing investment from the UAE.

– The opportunity for undervalued assets in emerging markets remains.

– Understanding cultural dynamics is crucial for successful investments.

Middle Eastern investmentsports valuationtrust in investment

▸ Full transcript

Understanding that there was potentially an opportunity with real investment, I felt that Abu Dhabi would be an incredible partner for Manchester City. I mean, it's quite difficult to value it. Yes, always. Well, today that's a whole different art. But even at the time, you were one of the first ones going in. At the time there were no comps. You weren't, I mean, now clubs are bought on between five and seven times their revenues. And then in 2008, the valuations were around the 200 million mark. In fact, we bought Manchester City for much less than that. But you saw an opportunity when the others didn't. This was one of the first deals with Middle Eastern money. Was it a big gamble? It was a big gamble and they were gambling on me as well. There was a misconception of what our money meant. And we wanted people to really understand the opportunity with money from the Middle East and the UAE. So you had to establish who are these people? What do we stand for? What do we want football to be? Why do we think we can take this football club and turn it into a global brand? But of course, there was nothing there to point to. There wasn't a track record of investment in the UK. You know, so it was hard. But what did you see in them? Trust, hard work, honesty, vision, and everything that the UAE has become, it was so easy. I was living in Abu Dhabi, I was living in Dubai, so I knew what it's like.

Analysis

Amanda Stavely discussed the early investment in Manchester City, highlighting the unique opportunity presented by Middle Eastern capital at a time when such investments were rare. She emphasized the importance of establishing trust and understanding the vision behind the investment, which was crucial for overcoming skepticism about the potential of Middle Eastern money in UK football.

The insight here is that the initial valuation of Manchester City was significantly lower than current market standards, indicating a potential undervaluation of assets in emerging markets. Smart investors should recognize the evolving landscape of sports investments and the increasing influence of Middle Eastern capital in global sports branding.

17:04
PDT

Personal capital investment is crucial for gaining investor trust.

Amanda Stavely PCP Capital Partners Manchester City Liverpool PCP UAE Capital Partners Middle East

– Stavely's firm, PCP Capital Partners, is gaining a reputation in the Middle East.

– Manchester City was identified as a strategic investment opportunity.

– The North-South divide in the UK influences investment decisions.

– Underestimation can turn into opportunity in investment banking.

investment strategysports franchise valuation

▸ Full transcript

Someone who became a client said to me, "You're really a good entrepreneur. You seem to really love the deal and the investment banking side, and therefore if you want to do that, you need to go re-qualify and focus." So I went back to all my exams, city exams. But you can have exams and still not gain the trust of people. Exactly. How did you gain that trust? I had to convince people that if we're going to make these types of investments, I had to put my own risk, and I had to risk my own capital. So every penny that I made from my businesses went into the startups. So that was a challenge and an opportunity because you're always going to be underestimated. Later on, it becomes an opportunity, but initially, it was very tough because I had to convince people, just like the first bank manager, to invest in the first restaurant. In 2005, Amanda started her investment firm, PCP Capital Partners. She was building a reputation as a trusted advisor to Middle East investors. And then she makes two landmark deals in quick succession. So talk to me about Manchester City. Right. How did you pull it off? We were looking at a number of football clubs, perhaps Liverpool, and we failed to get Liverpool. And we had great partners in the UAE, in the Gulf. And I talked about Manchester, and I think partly because I'm a northerner and I was very aware of the North-South divide. And I said, you know what, there are great clubs, and I thought Manchester City could be something really special. Then his Highness...

Analysis

Amanda Stavely emphasizes the importance of personal investment and risk in gaining trust from investors, highlighting her journey from entrepreneur to trusted advisor in the investment banking sector. Her landmark deals, particularly with Manchester City, showcase her ability to identify undervalued opportunities in the football industry, leveraging her connections in the Middle East to drive significant investments.

Smart money should note that personal capital investment can be a powerful tool for building credibility in high-stakes environments. Additionally, the focus on Manchester City as a strategic investment reflects a broader trend of recognizing potential in undervalued assets, particularly in sports franchises.

17:02
PDT

Stavely emphasizes the importance of trust in business relationships.

Amanda Stavely NatWest Stocks Cambridge Newcastle Middle Eastern Oh God

– Her early entrepreneurial efforts highlight the challenges of securing funding.

– Building a strong reputation is crucial in attracting powerful investors.

– Success often comes from overcoming significant obstacles.

– Stavely remains committed to the football industry despite past setbacks.

trust in investmententrepreneurial challengesfootball industry investment

▸ Full transcript

to study modern languages, but dropped out to become an entrepreneur. Stavely then ran a restaurant in the heart of Britain's horse racing country, a place where Middle Eastern royals, business leaders, and financiers regularly crossed paths. And that's where she began cultivating some of her most significant business relationships. So when I sat down with Stavely, I wanted to understand what it really takes to earn the trust of some of the world's most powerful investors. We talked about the deals that made her name, the setbacks that shaped her career, what she looks for when backing a business and why she is not done with football. Amanda Stavely, thank you so much for joining us. Thank you, Francine. It's a privilege to be here. So tell me the story of Amanda Stavely. How did you start out? Oh God, a mixed story of successes. So university very early, also very driven on business. When I opened the restaurant about age 19, we had a fantastic restaurant called Stocks between Cambridge and Newcastle. I went through 30 banks. I had to go eventually to the bank manager in Harrogate to NatWest and I said, look, I haven't got a track record. I'm very young. But the property I've seen for the restaurant is probably worth £400,000. And I need you to only lend me £180,000 of that. And I knew from that deal I'd have enough capital to be able to raise a bit more capital on them.

Analysis

Amanda Stavely discusses her journey from a young entrepreneur to a trusted figure among powerful investors, emphasizing the importance of building relationships in high-stakes environments. She highlights her early challenges in securing funding for her restaurant, showcasing her determination and strategic thinking in navigating the financial landscape.

Stavely's experience illustrates the critical role of trust and credibility in attracting investment, particularly in sectors like football where reputational capital is paramount. Her story serves as a reminder that success often requires overcoming significant barriers, which can lead to valuable insights for investors looking to back emerging businesses.

16:55
PDT

The Proof of Life (P.O.L.) file concept aims to differentiate human creativity from AI outputs.

Angel Foundation

– There is a growing need for industries that protect individual data and creativity.

– Human-created content should be valued more than AI-generated content.

– The conversation highlights the importance of innovation in the music industry.

– Teaching and imparting knowledge to younger generations is a priority for creators.

digital rights managementhuman creativityinnovation in music

▸ Full transcript

My foundation is rooted in the words that we believe in and wears love. I am Angel Foundation is rooted in that so that folks in communities that have been neglected have pathways to success. Well finally what gives you the most joy today? Is it making music or is it the teaching and being part of like imparting everything you're passionate about to a younger generation? The thing that gives me the most joy is moments like when I ideated on the P.O.L. I'm like, wait, wait, wait, that doesn't exist. And we should have it. I just dreamt some stuff up that doesn't exist. Like that type of stuff and pushing my mind to dream up the undreamt. and landing on some version of like, wait, I love that. I love creating at high speed, not regurgitating what I used to do. And is your mom gonna let you keep on the tracks your honors? She gonna push you to break new ground and do something even bigger? Oh no, no, no, she's always like, in what you're gonna do next? She's always like, I love our banters. What are you gonna do next? I'm gonna teach for the next 20 years. I'm gonna do that. I want to, I've done the voice for.

Analysis

The discussion emphasizes the need for a new digital file format, the Proof of Life (P.O.L.), to differentiate human-created music from AI-generated content. This innovation aims to ensure that human creativity is valued more than AI outputs, reflecting a shift in how music and creativity are perceived in the digital age.

Smart money should note the potential for new industries focused on protecting human creativity and data ownership. The emphasis on human biometrics and unique identifiers in digital files could lead to significant changes in how intellectual property is managed and monetized in the music industry.

16:53
PDT

Proposes a 'proof of life file' to differentiate human-created music from AI-generated content.

AI music industry WhereIsTheLove Iraq war Middle East POL US

– Calls for higher valuation and incentives for human-made music.

– Highlights the need for industries to protect individual data and creative essence.

– Suggests AI should not be equated with human creativity in terms of value.

– Indicates a shift in the music industry towards recognizing human effort and experience.

digital rights managementartist compensationAI impact on creativity

▸ Full transcript

Let AI be AI. But what if I just wanted to go in a studio with humans and create? Is it going to be the same file? And why should it? Why should it be the same file? And why should it be worth the same? It should be worth more. Give more incentives for people to create human-made stuff and let AI be AI. That's great. You need something that differentiates it from the other stuff. And that file, I call it the POL, the proof of life file. So this song dot POL. Right now on DSPs, it's WhereIsTheLove.Wave or WhereIsTheLove.MP3 or MP4 on YouTube. We need a WhereIsTheLove.POL because that has human biometrics connected to it and a location and a timestamp on a ledger, and it should be worth more than just compute output. I remember when WhereIsTheLove came out; it was a couple of months after the Iraq war. We wrote it after 9-11, and then, yeah, the song came out a couple of months after the Iraq war, you're right. And today, like, how do you feel about this moment when there's another war that the US has been involved in in the Middle East? Have you been thinking about the song again in that context? Or when it's part of your tour and your performance is today, do you think people are putting that blend on it in 2026?

Analysis

The discussion emphasizes the need for a distinct differentiation between AI-generated and human-created music, proposing the concept of a 'proof of life file' (POL) that would assign greater value to human-made content. This highlights a growing concern over the valuation of creative work in an era increasingly dominated by AI outputs.

Smart money should note the potential for new frameworks in intellectual property and digital rights management that could emerge from this differentiation, as well as the implications for artists' compensation and the music industry's structure in the face of AI advancements.

16:51
PDT

Individuals must own their data and likeness.

American Express AI MP3 MP4

– AI-generated content is currently valued equally to human-created content.

– There is a call for new industries to protect human creativity.

– A distinction between human and AI content valuation is necessary.

– The concept of a 'lived experience file' is proposed for better valuation of human effort.

data ownershipAI content valuationhuman creativity

▸ Full transcript

A hundred years ago this didn't exist. Fifty years ago American Express didn't exist the way it exists right now. There weren't digits and this freaking little chip. That didn't exist. So what is the equivalent of that for my essence and likeness? So everybody, not just musicians, every single person needs to own their data, their essence, their likeness. There needs to be industries. You got to use your imagination and push to have industries to protect people in this new realm that we're in. Here's another thing too: one thing you said about AI music. Humans need their own file right now. AI music and AI video share the same MP3 and MP4 file as humans. That ain't right. It takes AI seconds to make something, and it's valued the same. Why is that? Why should that? Why should an MP3 that an AI made be valued the same fraction of a penny than somebody's song that took them weeks and weeks and weeks and weeks and months? But how can you validate human sweat to make something? That means we need a lived experience file, like drummers are gonna drum with the freaking watch and they're gonna have bio.

Analysis

The speaker emphasizes the need for individuals, not just musicians, to own their data, essence, and likeness in the evolving digital landscape. They argue that AI-generated content should not be valued the same as human-created work, highlighting the necessity for a new framework to protect human creativity and effort.

16:48
PDT

AI is a powerful tool but cannot replace human creativity.

Tyler Kendall Bloomberg AI Barry Gordy Stefan Gordy Red Foo LMFAO

– Future value will be determined by human values, not just efficiency.

– Experience across diverse markets enhances opportunity recognition.

– The relationship between AI and creativity is evolving.

– New business models will emerge from the integration of AI and human insights.

AI integrationhuman creativitybusiness model evolution

▸ Full transcript

Because damn, the machine is freaking amazing. But humans are even more amazing. It's no longer going to be about good; it's going to be about values. It's going to be like, what is precious? AI is great; it's fast. What about human sweat? We got to value that just as much. The more you've seen, the more opportunity you see. And when you've been in every corner of the world, across markets, oceans, and generations, you see the potential each day brings. Through every turning point in more than 160 years, we were there, supporting our customers. So when your next opportunity is on the horizon, we're there to connect you to it. A new digital order isn't defined by technology alone.

Analysis

The discussion emphasizes the importance of human creativity in the face of advancing AI technology, suggesting that future value will be determined by human values rather than mere efficiency. The speaker argues that while AI can enhance productivity, it cannot replicate the unique qualities of human imagination and experience, which remain invaluable in a rapidly changing digital landscape.

Smart money should recognize that the evolving relationship between AI and creativity presents both challenges and opportunities. As AI reshapes industries, the focus should shift towards leveraging human insights and values to create new experiences and business models, rather than merely relying on AI-generated outputs.

16:46
PDT

AI is seen as a tool for creating new experiences in music, not just replicating existing works.

AI music industry Stefan Gordy Barry Gordy Red Foo LMFAO

– The speaker believes human creativity remains unmatched by AI.

– Concerns about AI diminishing artistic expression may be misplaced.

– The music industry may evolve with new business models driven by AI.

– Critical thinking and imagination are viewed as essential in an AI-driven landscape.

AI in musiccreativitymusic industry evolution

▸ Full transcript

18,400 freaking years of the printing press. No record industry. And the way that music was spread out was printing music so that conductors could conduct and violins were sold, violas were sold, the silicas were built. No amplifiers, just amphitheaters. And then the record industry came. You know what people said about the record industry? What do you mean? You're going to bring the song into the house, no orchestra? We've been here before. But what came because of the record player? The record industry. And you're assuming that AI is supposed to mimic the recording. No, it's not. It's supposed to create a new industry. New types of experiences are supposed to come. Not just recordings; recordings are for the record industry. You're supposed to use AI to dream up the new experience. It's just right now, what's the first thing they can think of? Well, let's do recordings. This is where creators are supposed to be like, oh, oh, oh, this is the new playing field? Do you mean like it's almost like a call to action for better creativity or... Okay, I don't give a f*** how awesome AI is. It cannot outpace my creativity. It's not imagining. It's a regurgitation of imaginations. So people are afraid like, oh my gosh, it's going to, it's going to, what's going to what? It's going to mimic. It's going to reproduce what's already been produced. I believe that critical thinking and like rinsing out your imagination and being purposeful is our AI-proof, you know, pathways to be of service. Music will always be. And even...

Analysis

The discussion emphasizes that AI should not merely replicate existing music but instead create new experiences and industries. The speaker asserts that AI cannot surpass human creativity, framing it as a tool for enhancing imaginative processes rather than a threat to artistic expression.

Smart money should recognize that the evolution of AI in music could lead to innovative business models and experiences, rather than just a focus on traditional recordings. This perspective suggests a potential shift in how the music industry operates, opening avenues for creativity that leverage AI's capabilities.

16:44
PDT

AI is viewed as a large sampler rather than a threat to creativity.

AI Dick Dale Missouri Lou Stefan Gordy Barry Gordy Red Foo LMFAO Pump It

– Criticism of AI in music may stem from outdated industry norms.

– The guest's hip hop background informs his perspective on sampling.

– Business models, not technology, are the core issue in the AI debate.

– AI-generated music is not inherently negative for human creativity.

AI in musicmusic industry business models

▸ Full transcript

The system be just as much yours as your other systems are? But then what about AI and music? Because you're an investor in AI companies, including even one of the ones that's been in its own legal battles with some of the record labels. And so I wonder where you draw the line in that? Like, do you worry about the volume of music nowadays which is totally AI generated? Yeah, not everything. I come from hip hop. And if you heard a song like 'Pump It,' then, then, then, then, then, then, then, then, then, then, then, then, then, then, then, then, then, then, then. I sampled that from Dick Dale, Missouri Lou. And then I wrote my song on top of that. Then I reinforced the drums. So for me to have like a hypercriticism on AI that samples everything, when I sampled a lot of things to make my songs, that would be hypocritical. AI is just like the world's biggest sampler. It's sampled everything, whether it's books, language. I think it's not the technology that you should be like, what's going on there? It's a business model. So when people, including like colleagues of yours in the industry, other high-profile figures say AI is an assault on human creativity, you don't agree? No, not at all. Because you're boxing creativity to how an industry told you you should create.

Analysis

The discussion highlights the evolving relationship between AI and music, with the guest asserting that AI functions as a massive sampler rather than a threat to creativity. This perspective challenges the notion that AI-generated music undermines human artistry, suggesting that the real issue lies in the business models surrounding AI technology.

Smart money should note that the guest's background in hip hop, where sampling is a foundational practice, positions him uniquely to critique the AI debate. His argument implies that the music industry may need to adapt its business models to accommodate AI's capabilities rather than resist them.

16:42
PDT

Will.i.am uses music as a teaching tool to engage students in discussions about AI and identity.

Will.i.am Where's the Love

– His course structure mirrors the format of his song 'Where's the Love', focusing on questions and answers.

– He stresses the importance of personal data ownership in the context of AI.

– The conversation around AI is shifting towards ethical considerations and personal identity.

– Artists and technologists are increasingly intersecting in discussions about the future of creativity.

data privacyethical AI

▸ Full transcript

I'm like, yeah. She's like, well, that's what you do in class. And so from there, I realized that I should write my course like a song. I have my opening monologue. What's wrong with the world, mama? People living like they ain't got no mama. I put out the problem. And then the course is when I open up the class for questions on my monologue. And then the second verse is the second hour. And then we do the chorus again. And the third verse is the closing. I feel the weight of the world on my shoulders as I get older, y'all. If there is a song that I wrote and produced that should reflect how I teach the course, it will be 'Where's the Love', because 'Where's the Love' is about asking questions and then searching for the answer to that question, because 'Where's the Love' is just a question song. When humanity goes wrong, people go to that song. So I'm like, oh, shucks, I've done some version of this. So, 'Where's the Love' is how I teach the course. A genetic self is telling people to ask, who are you in this new world that we're living? And how much of you are you gonna give to the machine? What do you hold sacred? What do you want to do with the machine? And in this case, the machine is yours. Your data is yours. There's never been a container to put your data in up until your own person.

Analysis

Will.i.am emphasizes the importance of asking questions and understanding one's identity in the age of AI, using his song 'Where's the Love' as a framework for his teaching approach. He highlights the need for individuals to consider how much of themselves they are willing to share with technology, framing personal data ownership as a critical issue in today's digital landscape.

Smart money should note that the conversation around AI is evolving from mere technological advancement to deeper philosophical questions about identity and data ownership. This shift could influence investment strategies in tech companies that prioritize user data rights and ethical AI practices.

16:39
PDT

Early connections can significantly impact career trajectories.

Will I Am Stefan Gordy Barry Gordy Red Foo LMFAO Tyler Kendall PRIVATE

– Leveraging personal relationships is crucial in competitive industries.

– The music industry often relies on familial ties and networks.

– Achieving success at a young age can set a precedent for future opportunities.

– Creative aspirations can lead to unexpected collaborations.

networkingmusic industry dynamics

▸ Full transcript

Up to the minute, geopolitical news whenever and wherever it happens. I'm Tyler Kendall in Geneva, Switzerland, and this is Bloomberg. By 17, you had a record deal. Your dreams, when you were a teenager at 17, were a massive prize in your life, something that must have been so unusual compared to your peers and community. An incredible achievement. How did it feel? There’s this guy by the name of Stefan Gordy. Stefan Gordy’s dad is Barry Gordy, and he and I went to school together. One day I came to school, like, remember that tape deck where I used to make my little tapes? I came to school, I’m like, 'Yo, give this to your dad. I want to get a record deal.' He was like, 'I can’t give my dad your demo.' I was like, 'Come on, Stefan.' When I finally got a record deal just two years later, I eventually signed Stefan to my label, Red Foo from LMFAO. One day we were sitting at the Grammys with Stefan, his dad Barry Gordy, and then myself. Barry Gordy’s like, 'I want to thank you so much for believing in my son.' I let him cheer you up. I’m like, 'Yo, Barry, we went in the ninth grade. I tried to give my demo to Stefan to give to you.' I grew up with his son.

Analysis

Will I Am reflects on his early career and the pivotal moment of securing a record deal at 17, highlighting the unusual achievement compared to his peers. He emphasizes the importance of connections in the music industry, recalling how he sought to leverage his friendship with Stefan Gordy to reach Barry Gordy for a record deal.

16:36
PDT

The role of personal experience in shaping creativity and ambition.

Will I Am FYI.AI Bloomberg

– Importance of mentorship and encouragement in personal development.

– The process of reverse engineering dreams into actionable plans.

– Global exposure increases awareness of opportunities.

– Healthy daydreaming can lead to tangible outcomes.

personal developmentcreativityglobal opportunities

▸ Full transcript

And you are Will. Will keeps finding ways and answers. Just know I still believe in you. You have many levels to go. Keep dreaming, but never stop dreaming. So my mom is always like, oh, you think you finished? You ain't finished? So my mom is like the coach on the side. She's always pushing you on, right? She's the one who taught me how to be present. I guess some of that must come from the fact that she had a tough time in her life herself, right? When she was raising you, times were not easy. Yeah, when you're in a nightmare, you dream out the nightmare. The way to get out of a nightmare is you manually, vividly change the dream. And then you have to work your way backward. How to materialize that awesome imagination that took you out of your worry, your conundrum, your angst, and the way to get out of that angst is sometimes it's okay to have a healthy daydream, but then how do you take that dream, reverse engineer it, and make it reality? The more you've seen, the more opportunity you see. And when you've been in every corner of the world, across markets, oceans, and generations, you see the potential.

Analysis

Will I Am emphasizes the importance of dreaming and the process of turning dreams into reality, reflecting on his mother's influence in pushing him to achieve more. He highlights that experiencing diverse opportunities across the globe enhances one's ability to recognize potential and innovate.

16:34
PDT

AI is seen as a transformative tool in creative industries.

Will I Am Pro Tools MacBook AI Abra Kadabra

– The evolution of music technology has been a personal journey for Will I Am.

– There is a growing interest in the interaction between humans and AI in creative processes.

– The nostalgia for early music-making tools underscores the rapid advancement in technology.

– Will I Am's perspective may influence future trends in music and technology integration.

AI in creative industriesMusic technology evolution

▸ Full transcript

I am particularly tuned into technology and its potential and its opportunity. I like any type of tool, whether it's a synthesizer, a keyboard, a traditional piano, or a drum machine. But then when I got my hands on my MacBook and Pro Tools, that's when I was transfixed. That's when I was like, wow, what is this world? That aha is what made me interested in AI, like, wow, if I'm typing into the computer and outcomes like images or sound, eventually I'm going to talk to the computer, and the computer is going to talk back. In that ping pong, that banter, that brainstorm, it's going to make exactly what I have in my mind. It's kind of like magic. Abra Kadabra. When you started making music back in your teens with a boombox that I think your mom got for you, how did it feel then? Did it feel magical in its own way? Yeah, the idea that I could record something from a radio station and then put it in a separate cassette and then loop the part that I liked and then put that in the other cassette and then get the headphones, put it in the mic, and then rap into that. Like that to me was like, wow, look. Look what I can do, ma. She's like, boy, who taught you how to do that? I'm like, I don't know. I think I probably saw somebody do it. It's like we didn't have the internet.

Analysis

Will I Am expresses his fascination with technology, particularly AI, highlighting its transformative potential in music creation. He reflects on his early experiences with music technology, emphasizing the magic of creating and manipulating sound, which parallels his excitement about AI's capabilities.

16:32
PDT

Will I Am advocates for AI as a tool for enhancing creativity.

Will I Am FYI.AI peas AI FYI LLM

– He founded FYI.AI to explore AI's potential in the creative space.

– AI's integration may redefine artistic collaboration and expression.

– Investors should consider new business models emerging from AI in creativity.

– Traditional creative industries may face disruption from AI advancements.

AI in creativitydisruption in medianew business models

▸ Full transcript

Attitude not only to technology but to AI. Essentially, he wants to be at the forefront of that change. He's founded his own tech company, FYI.AI. He teaches a college class on AI and he believes in the capacity and the power of these tools to assist human creativity. We met in Cannes where he was on a European tour with the peas. I was curious where he would put the boundaries on AI, set the parameters, if you like, to a world which many other creatives see as a threat to their rights, image, voice, ultimately, livelihoods. So here's what happened when I sat down with Will I Am. Can I tell you first the moment that stayed with me as I was preparing for this conversation? Yeah. It was watching the video for one of your songs, I'm a bee, and you're showing the other peas a computer. But you're the way you're talking about it stayed with me because you're saying this artificial intelligence. This is what's going to take the peas into three thousand and eight. Yeah. And it was hearing you say artificial intelligence 16 years ago when not many people were thinking in those terms. It's like in that video we described an LLM. What's like you take the entire English vocabulary. You take my high notes, my low notes, and the noise. And with this artificial intelligence, you type in your lyrics and this thing.

Analysis

Will I Am emphasizes the transformative potential of artificial intelligence (AI) in creative industries, advocating for its role in enhancing human creativity rather than threatening it. His perspective highlights a shift in the creative landscape, where AI tools can redefine artistic expression and collaboration.

Smart money should note that the integration of AI in creative sectors may lead to new business models and revenue streams, as artists and technologists collaborate to leverage these tools. This evolution could disrupt traditional creative industries, prompting investors to reassess their positions in companies reliant on conventional methods of content creation.

16:30
PDT

Inflation volatility is likely to persist, impacting interest rates.

Bloomberg Will I Am Mumbai Glen Road Reef AI Wall Street Bloomberg Television Bloomberg Brief PRIVATE

– The correlation between stocks and bonds has turned positive.

– Retail clients are under-allocated in alternatives, especially infrastructure.

– AI technology continues to evolve, influencing market dynamics.

– Investors should reassess their portfolios in light of these trends.

inflation volatilityinterest rate dynamicsalternative investmentsAI technology

▸ Full transcript

Good morning. This is Bloomberg surveillance. Welcome back to the opening trade. It's Bloomberg money. This is the Asia trade. This is Wall Street week. Welcome to Balance of Power. You're watching Bloomberg deals. Welcome to Bloomberg this weekend. This is Bloomberg Television, bringing you up-to-the-minute news whenever and wherever it happens. I'm Hustlinder the Amin in Mumbai, this is Lumbag. In case you missed it, on Glen Road Reef, rolling inflation shocks are likely going to persist for the foreseeable future. So this increase in inflation volatility will lead to an increase in rate volatility, which means the correlation between stocks and bonds has flipped positive. We expect that to continue. The role that alternatives play when you think about infrastructure is where we're leaning into, because clients have been under-allocated, especially on the retail side. Don't miss Bloomberg Brief, live every weekday. AI is just like the world's biggest sampler. It's sampled everything, whether it's books, language. The machine is freaking amazing. But humans are even more amazing. We made the machine. Will I Am, musician and technologist? You don't ever worry about the amount of material being scraped. There being AI-generated versions of yours, you can accept that. You're asking the wrong question. The question you should ask is, are you worried?

Analysis

Rolling inflation shocks are expected to persist, leading to increased volatility in both inflation and interest rates. This shift has flipped the correlation between stocks and bonds to positive, indicating a potential change in market dynamics.

Smart money should note the under-allocation of alternatives in retail investments, particularly in infrastructure, as this could present opportunities for reallocation. The mention of AI's capabilities highlights the ongoing evolution in technology and its implications for various sectors, suggesting a need for vigilance in assessing tech-related investments.

16:28
PDT

Ukraine's digital resilience serves as a model for other governments.

Ukraine Natalia Dendikaya VivaTech Bloomberg

– Transparency is crucial for effective digital reforms.

– The recognition of Ukraine underscores the role of technology in governance.

– Flexibility in government services can enhance societal resilience.

– The event emphasized the importance of leadership in technological advancements.

digital governancetransparency in governmentpublic service accessibility

▸ Full transcript

will make your day.

Analysis

Ukraine has been recognized for its digital public infrastructure and efforts to maintain accessible public services during extraordinary conditions, receiving the VivaTech Bloomberg Citizen Tech Award. The Deputy Minister of Digital Transformation highlighted the importance of transparency and flexibility in building trust in digital services, especially for displaced individuals.

16:26
PDT

Ukraine awarded for digital public infrastructure.

Ukraine Natalia Dendikaya VivaTech Bloomberg

– Transparency is crucial for government reforms.

– Flexibility in digital services enhances resilience.

– Other nations can learn from Ukraine's innovations.

– Technology's role in maintaining public services is critical.

digital governancegovernment transparencypublic service technology

▸ Full transcript

Sector as well, step by step, and it took us time. I would say the cornerstone of such reforms is transparency. If the government wants to implement such reforms, it should be as transparent as possible. Congratulations again. Thank you so much. Thank you, Minister. So, tonight has not been about predicting the future, although at times it may have felt like that. It has been about recognizing the people already turning technology into operating reality, capital, and leadership that decide which companies endure breakthroughs moving from research into daily work. The next decade will not be shaped by technology alone; it will be shaped by the choices around it. All that's left to say to you all tonight is thank you. Thank you to all of the honorees, thank you to everyone here at VivaTech, and of course, thank you to everyone also watching online. Good night from Paris, and we'll be back next year.

Analysis

Ukraine has been recognized for its digital public infrastructure, showcasing how technology can maintain public services during crises. The emphasis on transparency in government reforms highlights the importance of trust in implementing effective digital solutions.

The transformation of Ukraine into a 'living collaboratory' for innovation presents a unique opportunity for other nations to learn from its experiences. This adaptability and focus on digital resilience could influence how governments worldwide approach technology integration in public services.

16:24
PDT

Ukraine is leveraging its digital infrastructure to enhance public services during crises.

Ukraine Natalia Dendikaya

– Flexibility and open-mindedness are key to effective digital governance.

– The experience of Ukraine can serve as a model for other democratic nations.

– Trust and accessibility in digital services are critical for displaced individuals.

– Innovation can thrive even in challenging environments.

digital governanceresiliencepublic services

▸ Full transcript

It can protect our life. It can enhance democracy. It can help society to stay resilient in facing the most challenging situations. So flexibility being not a bottleneck, but being an enabler and being open-minded. Because we see what is happening right now with Ukraine, unfortunately for Ukrainians, but I think fortunately for the rest of the world, Ukraine has been transformed into a unique living laboratory for the most creative and ambitious innovation. And this is something that can be used not only by our country. It's something that can help to see European countries. And honestly, the rest of the democratic world, how to develop. How do you ensure, minister, how do you ensure trust and accessibility when it comes to digital services, particularly for people who are displaced, people who are facing, of course, incredible pressure? Honestly, it was not easy. Actually, in Ukraine, we had a kind of stereotype that nothing good can come from the state. It became.

Analysis

Ukraine's Deputy Minister of Digital Transformation highlighted the country's transformation into a hub for innovation amidst adversity, emphasizing the importance of flexibility and open-mindedness in digital governance. This experience can serve as a model for other democratic nations on how to enhance digital resilience and accessibility, particularly for displaced individuals facing significant challenges.

The insight here is that Ukraine's digital infrastructure, developed under pressure, showcases how governments can leverage technology to maintain public services and trust during crises. This could signal a shift in how digital governance is perceived globally, potentially influencing investment in tech solutions that enhance governmental resilience.

16:21
PDT

Ukraine awarded for digital public infrastructure.

Ukraine Natalia Dendikaya The Viva Tech Bloomberg Citizen Tech Deputy Minister Digital Transformation PRIVATE

– Recognition emphasizes technology's role in crisis management.

– Digital solutions are becoming essential for government services.

– Investments in digital infrastructure can drive resilience.

– Governments are shifting focus from convenience to necessity.

digital infrastructuregovernment technology

▸ Full transcript

Follow the noise. We follow the money. We close not with a company, but with a country. And this award is judged by a different standard, not valuation, not market share. It's judged by whether people can reach public services, especially when ordinary life has been disrupted. Well, this year's recipient has really shown that digital government can be much more, much, much more than just convenience. It can be the link between a person and a state at precisely the moment when that link matters most. And that is why this recognition belongs at the end of tonight's program. Because the final test of technology isn't whether it impresses us, although that can be nice, it's whether it actually works. Well, for its digital public infrastructure and its work to keep public services accessible to citizens under extraordinary conditions, The VivaTech Bloomberg Citizen Tech Award goes to Ukraine. And to accept this award, please welcome Ukraine's Deputy Minister of Digital Transformation, Natalia Dendikaya. What has Ukraine learned about digital resilience that other governments?

Analysis

Ukraine has been recognized with the VivaTech Bloomberg Citizen Tech Award for its digital public infrastructure, which has proven essential in maintaining access to public services during challenging times. This highlights the critical role of technology in fostering resilience and connectivity between citizens and their government when it matters most.

The award underscores a growing trend where governments are leveraging digital solutions not just for convenience but as a vital lifeline in crisis situations. Smart money should note that investments in digital infrastructure can yield significant returns, especially in regions facing instability, as they enhance governmental efficiency and citizen engagement.

16:17
PDT

Enterprises desire autonomy in AI but require governance.

OpenClaw Fortune 500 So Peter

– There is a gap between AI model capabilities and enterprise trust.

– Memory systems are essential for effective AI operation in regulated environments.

– Fortune 500 companies are iterating on AI deployment strategies.

– The focus on corner cases in AI development is critical for performance.

AI governanceenterprise AIagentic systems

▸ Full transcript

That system on their enterprise data and do real work. It is interesting that at every era of the last five years there has been a gap between what the models can do, what the capabilities are, and what the enterprise can trust to actually put into production. And especially now with agentic systems, enterprises want autonomy, but they want it to be governed, not unchecked. And what we've been doing for the past five years is yes, building the models, but also the harnesses around the models that allow us to collect the recipes that exist across the business, but more crucially, actually allow us to collect all of those corner cases that sit in people's heads. And a lot of what we've done for the Fortune 500 is be able to really iterate and innovate on memory systems that allow agents to collect new information while they're operating in a highly governed, secure, regulated context that improves the performance of these agents when you don't have the recipes or the workflows or the SOPs really well-defined. So Peter, you caused quite the authentic explosion with OpenClaw. Can you give us an example of a use case with OpenClaw where it made you laugh? Oh, I have. And where it made you maybe a little nervous? One of my friends, he has his personal claw and he has one at work.

Analysis

Enterprises are increasingly seeking autonomy in AI systems while ensuring governance and security, highlighting a gap between model capabilities and production trust. The focus is on building memory systems that allow agents to operate effectively in regulated contexts, which is crucial for Fortune 500 companies.

Smart money should note that the evolution of agentic systems is not just about AI capabilities but also about the frameworks that support their safe deployment. This dual focus on innovation and governance could redefine operational efficiencies in large enterprises, making it a key area for investment.

16:15
PDT

LLMs are not sufficient for achieving human-level intelligence.

Jan Meta AI META

– Physical interaction tasks remain challenging for AI systems.

– The Moravec paradox highlights the limitations of current AI capabilities.

– Young children can perform tasks that LLMs struggle with.

– Future AI development may need to focus on world models.

AI limitationshuman-level intelligencephysical interaction AI

▸ Full transcript

I've got a lineup. Jan, I want to start with you. I may be oversimplifying, but this is my understanding. You are now squarely focused off your time at Meta on world models because, and here's possibly where I'm simplifying it, you think that frontier LLMs are not going to produce the kind of AI that is going to be globally useful at the scale and level that we need it to be. If that is the case, help frame it for us. If, for example, we're thinking of a young infant, what is it that a young child can do and understands about the world that maybe LLMs, even those right at the frontier, cannot yet do? Okay, first of all, LLMs are useful. They're not a path towards human-level intelligence, but they are useful. But the world is much more complicated than language. So it is very well known in computer science. It's called the Moravec paradox. It's the fact that computers can do tasks that are seemingly complicated for humans, like solving equations and computing integrals and even passing the bar exams or answering any question. But when it comes to just grabbing an object like this without breaking it, that's kind of much more challenging. And so there's a lot of tests that a four-year-old can do that we can't do with robots. That's why we have those systems that can prove theorems.

Analysis

Jan emphasizes that while large language models (LLMs) are useful, they are not the path to achieving human-level intelligence. He highlights the Moravec paradox, illustrating that tasks requiring physical interaction with the world remain a significant challenge for AI, despite advancements in language processing.

16:13
PDT

May Habib recognized for leadership in enterprise AI.

May Habib OpenAI VivaTech Bloomberg AI The Viva Tech Bloomberg Rising Star Tech Bloomberg Breakthrough Award PRIVATE

– Shift from generative AI to practical applications noted.

– Personal agents gaining traction for productivity enhancement.

– Focus on workflow compliance in AI adoption.

– Recognition of early leadership in defining tech categories.

enterprise AIworkflow complianceproductivity enhancement

▸ Full transcript

is Bloomberg. To the next award now, the future rarely arrives, of course, fully formed. It often appears first as a person or company asking a sharper question. The VivaTech Bloomberg Rising Star Award recognizes early leadership with the potential to define a category and not simply compete in one. This year that recognition began with nominations from across the VivaTech and Bloomberg communities and from that field one name rose to the top: founder building enterprise AI where adoption has to meet workflow compliance productivity. This year's VivaTech Bloomberg Rising Star is May Habib. Now the VivaTech Bloomberg Breakthrough Award recognizes a specific kind of progress. Not the technology that impresses in a demo, but the technology that actually changes what we do. For much of the last two years, AI has been measured by what it can generate. But last year, a new kind of personal agent began to cut through the noise. It could clear an inbox, send an email, manage a calendar, and even check in for a flight. That is why Open...

Analysis

The VivaTech Bloomberg Rising Star Award was presented to May Habib for her leadership in enterprise AI, emphasizing the importance of aligning AI adoption with workflow compliance and productivity. Additionally, the VivaTech Bloomberg Breakthrough Award highlighted the emergence of personal agents that streamline tasks such as managing emails and calendars, marking a shift in AI's practical applications.

Smart investors should note that the focus is shifting from AI's generative capabilities to its utility in enhancing productivity and compliance in workflows. This trend suggests a growing market for AI solutions that integrate seamlessly into existing business processes, potentially reshaping competitive dynamics in the tech sector.

16:08
PDT

Leadership and team dynamics are crucial for scaling businesses.

Joe Tai Alibaba Group The Viva Tech Bloomberg Leadership Award So Joe And Jeanette PRIVATE

– Risk-taking is essential for innovation and growth.

– Founders' involvement can drive a company's appetite for risk.

– Alibaba's model exemplifies how digital commerce can evolve into infrastructure.

founder-led growthrisk managementdigital infrastructure

▸ Full transcript

Digital commerce could become infrastructure. At the center of that story is a leader fluent in technology, finance, and governance who translated a vision into a global enterprise. The VivaTech Bloomberg Leadership Award goes to Joe Tai, co-founder and chairman of Alibaba Group. Both spent their careers making bets before the outcome was obvious. This goes to risk-taking, you know, having the appetite to go a little bit further. So Joe, let me start with you. Many companies grow, but far fewer become part of an infrastructure. So what do you think makes Alibaba's success? How do you become that leap? I think what's important in Alibaba's journey is really two things. Number one is to associate yourself with good people, people that you want to work with. Because if you don't have a team, you can't scale. And the second thing is just risk-taking, being willing to take that risk. And this is why a lot of companies that are, let's say, no longer run by founders, kind of flounder a little bit because management teams are a lot more risk-averse. But when you have founding teams that are in place, people are willing to take risks. And Jeanette, your work is really also about seeing potential before the.

Analysis

Joe Tai, co-founder and chairman of Alibaba Group, received the VivaTech Bloomberg Leadership Award, emphasizing the importance of associating with the right people and taking risks for scaling success. His insights highlight that companies led by founders tend to embrace risk more effectively than those managed by non-founders, which can lead to stagnation.

16:06
PDT

Sir Tim Berners-Lee honored for contributions to the internet.

Tim Berners-Lee Jinetsu Furstenberg La Familia General Catalyst VivaTech Bloomberg AI EU VC Sir Tim Tech Bloomberg Investment Award Champions Initiative PRIVATE

– Jinetsu Furstenberg recognized for scaling tech investments in Europe.

– Focus on human-centric technology is gaining traction.

– European venture platforms are becoming more influential.

– The EU AI Champions Initiative is driving innovation.

human-centric technologyEuropean venture capitalAI innovation

▸ Full transcript

The person is the one who benefits from your assistance, designing all the systems that you are making. So that the individual person is at the top of the heap when it comes to the benefits that the systems provide. Sir Tim, thank you so much. Always putting the human at the front, even in AI. Thank you and congratulations again on your award. Thank you. So our next award then is about capital as conviction. Decisions that determine which technologies move from promise to scale. Now the VivaTech Bloomberg Investment Award really recognizes the ability to turn that conviction into scale. Our honoree has done that by championing a bigger idea of technology, a much bigger idea than initially thought. She built one of the most distinctive venture platforms backing the belief that Europe can produce companies of consequence and has also connected that vision to a global stage. She's also been a driving force behind the EU AI Champions Initiative. So please welcome the winner of the VivaTech Bloomberg Investment Award, Jinetsu Furstenberg, founding partner at La Familia, VC and President and Managing Director at General Catalyst. Thanks.

Analysis

The VivaTech Bloomberg Awards highlighted the importance of human-centric technology, with Sir Tim Berners-Lee receiving recognition for his contributions to the World Wide Web. Jinetsu Furstenberg was awarded for her role in scaling technology investments in Europe, emphasizing the continent's potential to produce impactful companies.

Investors should note the growing emphasis on technology that benefits humanity, as this trend could drive future investment strategies. Additionally, the recognition of European venture platforms suggests a shift in capital allocation towards innovative tech ecosystems in Europe, potentially leading to increased competition with established markets.

16:04
PDT

Tim Berners-Lee awarded for contributions to the World Wide Web.

Mike Bloomberg Tim Berners-Lee VivaTech Bloomberg Tech Bloomberg Awards World Wide Web Tim Berners Sir Tim Berners PRIVATE

– Focus on technology's role in benefiting humanity is increasing.

– Recognition of tech leaders may drive investor interest in socially responsible companies.

– The event emphasizes the importance of open internet principles.

– Shift in tech evaluation criteria could reshape investment strategies.

socially responsible investingtech innovationopen internet principles

▸ Full transcript

Please turn your attention to the screen for Mike Bloomberg. Thank you. Good evening and welcome to the VivaTech Bloomberg Awards. Bloomberg is glad to partner with VivaTech to spotlight remarkable tech leaders who are changing the world for the better. Tonight's award winners are shaping the future of business and the way we live. Our first winner has had a profound impact on all our lives. In 1989, he was a computer scientist in Geneva who came up with a clever new way to use a computer. What began as an idea for sharing documents grew into something much bigger, the World Wide Web. The idea would change almost everything about how the world works, how we communicate, how we learn, how we do business, and even how people start dating and falling in love. One of his founding principles has remained one of his core convictions, that the internet should be open and accessible to everyone, everywhere. I've been lucky to call him a friend for many years, and no one could be more deserving of this award than he is. So please join me in honoring one of history's great pioneers as we present him with our visionary award, the one and only Tim Berners-Lee. And please welcome to the stage Sir Tim Berners-Lee. Congratulations. Thank you. Congratulations.

Analysis

The VivaTech Bloomberg Awards highlighted the significant contributions of tech leaders, particularly honoring Tim Berners-Lee for his foundational role in creating the World Wide Web. This recognition underscores the ongoing importance of open and accessible internet principles in shaping future business and societal interactions.

Investors should note the shift in focus from merely identifying disruptive technologies to evaluating those that enhance human welfare. This evolution in perspective may signal a growing trend towards socially responsible investing, which could influence market dynamics and valuations in the tech sector.

16:02
PDT

Launch of ViveTech Bloomberg Awards highlights technology's societal impact.

Karen Salzer Maurice Levy Vive Attack Publicis Group Bloomberg Tech Bloomberg Awards PRIVATE

– Shift from market disruption to benefiting humanity in tech investments.

– Increased focus on technology's role in decision-making processes.

– Potential for growth in sectors addressing global challenges.

– Investors may adjust strategies to align with societal benefit themes.

technology impactsocial responsibilityinvestment strategy

▸ Full transcript

Karen Salzer and Maurice Levy, the co-chair of Vive Attack and honorary chairman of Publicis Group. A fantastic evening. Bonsoir. Good evening. And just a reminder that 10 years ago, Vive Attack began with a very simple belief: technology needed a meeting place. A place where founders could meet customers, where large companies could see what was coming before it became obvious. Where the central question was simple: what comes next? Over 10 years, that question has changed. We are no longer asking which technologies will disrupt markets; we are asking which ones will benefit humanity. That's why tonight, we are adding something new for the first time, and thank you, thank you, we are launching the ViveTech Bloomberg Awards. Thank you, Maurice, thank you. Bloomberg was built around a belief that information could help people with their biggest decisions in every part of the world. And today, many of the choices that matter most are shaped by technology.

Analysis

The ViveTech Bloomberg Awards were launched to recognize technologies that benefit humanity, reflecting a shift in focus from mere market disruption to societal impact. This evolution underscores the growing importance of technology in shaping critical decisions across various sectors.

Investors should note the increasing emphasis on technology's role in societal advancement, which may influence funding and investment strategies. The recognition of technology's potential to address global challenges could lead to a surge in investments in innovative solutions that align with these values.

16:00
PDT

Cuba's government is exploring economic reforms but lacks a clear model.

Cuba Trump administration Marco Rubio Melia Iberostar Blue Diamond Archipelago International Vietnam China Haslinda Amin Minne Katoshi Francine Lacroix PRIVATE

– Tourism sector in Cuba could rebound if U.S. travel restrictions are eased.

– Cuban economy remains heavily state-controlled despite calls for a mixed economy.

– Hotel groups are scaling back operations in Cuba due to sanctions.

– The Asian economic narrative is gaining prominence in global discussions.

Cuban economic reformAsian market trends

▸ Full transcript

So much operationally. We think they do a great job there. The opportunity is to continue their mid-teens growth and accelerate it even further. Don't miss Bloomberg deals, live every week. Asia is at the forefront of some of the world's biggest stories. And we're here where the action starts in Sydney and in Tokyo. Get ahead as the global trading day begins. The Asia trade, weekdays only on Bloomberg. The global economic playbook is being rewritten, and the levers of power are moving in real time. To see where the world is headed, you have to look where the action is. I'm Haslinda Amin in Singapore. I'm Minne Katoshi in Mumbai. Welcome to Imaging the New Economy podcast. Each month we dive deep into how the world's most exciting, rising economies are shaping the global future. Join the conversation. Subscribe to Emerging on your favorite podcast platform today. Hello everyone, good evening and welcome to the VivaTech Bloomberg Awards. I'm Bloomberg's Francine Lacroix. I'm joined tonight by my colleague, Tom McKenzie. Thank you, Francine. Is everyone here? Thank you very much for joining us. Now this is not a conventional award ceremony. You might have guessed it.

Analysis

The global economic landscape is shifting, with Asia emerging as a focal point for significant developments. The ongoing discussions around economic reforms in Cuba highlight the tension between state control and the need for a mixed economy, suggesting potential investment opportunities if restrictions are eased.

Smart money should note that while Cuba's government is signaling a desire for economic reform, the lack of clarity on the model and continued state intervention may hinder genuine progress. The tourism sector, particularly, could see a rebound if U.S. travel restrictions are lifted, echoing past trends during the Obama administration.

15:55
PDT

Cuba is pursuing mixed economy reforms but lacks a clear political model.

Cuba Emily Morris Pavel Vidal Andro-Nodar-Celion Trump administration Melia Iberostar Blue Diamond Archipelago International University College London Pontificia Universidad Javariana

– State intervention remains significant, potentially limiting reform effectiveness.

– Foreign investment is being encouraged, particularly from Cuban-Americans.

– Tourism sector shows potential for recovery if travel restrictions are eased.

– Credibility of reforms is a key concern for investors.

Cuban economic reformforeign investmenttourism recoverystate intervention

▸ Full transcript

Of democratic institutions, of a right-wing state, are elections that have to come to Cuba at some point. Urban society, it's a very externally dependent economy. So, you know, the conditions are different, but the idea of following a transition path towards a mixed economy is clearly and explicitly stated now by the Cuban government. But some of those who know best say that for real economic reform, Cuba will need to change its entire political system away from state control. It's not clear what model it wants to follow in this transformation that is being proposed in Cuba. In fact, that's a problem, right? It announces reforms, but it's not clear where we're going. And they want to maintain a significant weight of the state. A significant weight of the state intervening in the economy. There was also a model of a kind of a scandal where the market reforms were expanded, but an important intervention was maintained.

Analysis

Cuba's government is signaling a shift towards a mixed economy, but the lack of clarity on the political model raises concerns about the sustainability of these reforms. The proposed changes may not lead to genuine economic transformation without a fundamental shift away from state control.

Smart money should note that while the Cuban government is inviting foreign investment, the persistent state intervention in the economy could undermine the effectiveness of these reforms. Investors should remain cautious, as the credibility of the Cuban government's commitment to reform is still in question.

15:53
PDT

Cuba is exploring economic reforms to attract foreign investment.

Cuba Vietnam China Como Cuba USDCNH

– Tourism is identified as a key sector for economic recovery.

– Potential easing of U.S. travel restrictions could boost visitor numbers.

– Cuba is looking to Vietnam and China for economic policy inspiration.

– The government aims to develop new resorts and residential products.

Cuban economic reformstourism recoveryforeign investment

▸ Full transcript

Que estamos buscando para invitar en Cuba. De hecho, también hay el desarrollo de nuevos resorts. Creo que habrá una oportunidad para el desarrollo de los productos residenciales, que lo asocian a los resorts o otros tipos de propiedades hospitalarias. Así que creo que el futuro es muy brillante en ese sector, sin duda, y es un pilar muy importante de la recuperación económica del país. El turismo parece ser un sector, al menos, en un inicio, que puede generar oportunidades, sobre todo si hay una flexibilización a las restricciones de viajes de los ciudadanos estadounidenses, que podría ser el mercado natural, a partir del cual se genera un boom del arribo de visitantes como sucedió, por ejemplo, con las flexibilizaciones que se introdujeron en las sanciones y en los viajes, durante la administración Obama. Vidal, a este punto, dice que el gobierno de Cuba no está buscando lugares como México o Chile para informar sus políticas económicas. A lo mejor, se encuentra Vietnam o China. Como Cuba se busca para rebuild su economía, ¿tienen las lecciones que puede aprender de otros países latinoamericanos? Sí, normalmente las referencias que prefieren el gobierno cubano son las referencias a Vietnam y China sobre todo porque.

Analysis

Cuba's government is signaling a potential shift towards economic reforms, particularly in the tourism sector, which could attract foreign investment and boost recovery. The focus on learning from Vietnam and China suggests a strategic pivot that may redefine Cuba's economic landscape, especially if travel restrictions for U.S. citizens are eased.

Smart money should note that the emphasis on tourism as a recovery pillar indicates a targeted approach to revitalize the economy, potentially leading to significant investment opportunities. The reference to Vietnam and China highlights a desire for pragmatic economic policies that could reshape Cuba's engagement with global markets.

15:51
PDT

Cuban government reforms viewed as insincere.

Cuba Trump administration Marco Rubio Melia Iberostar Blue Diamond Archipelago International COVID Lion Grove United States President Trump Secretary Marco Rubio

– U.S. sanctions heavily impact Cuba's economy.

– Tourism sector visits down 62% since 2018.

– Major hotel groups have curtailed operations in Cuba.

– Skepticism about the sustainability of reforms.

Cuban economic reformsU.S. sanctionstourism sector decline

▸ Full transcript

They are afraid, as a communist dictatorship, of the entrepreneurial class having actual freedom and essentially having an opposition that can challenge their government. Andro-Nodar-Celion is a Cuban-American hotelier whose Lion Grove has substantial real estate investments in the United States. They're never going to allow for any meaningful amount of private market activity. They're completely lying, and it's a farce. These steps that they're taking with these supposed reforms are being done to buy time. They're trying to run out the clock on the Trump administration and the efforts of President Trump and Secretary Marco Rubio. That's what they're playing for; the Cuban people know it. We just want them to be a nicely run country. We're going to let our people go back and let them invest in Cuba if they'd like. Essential to President Trump's plans to open Cuba up to U.S. investment are the heavy sanctions he has imposed, sanctions that have hit the Cuban economy hard, including one of the most promising sectors, tourism. Since May, hotel groups including Melia, Iberostar, Blue Diamond, and Archipelago International have either pulled the plug or curtailed operations. The number of visits last year was down 62% from the country's peak in 2018, the lowest in 20 years other than during the COVID-19 pandemic. The offering of services in Cuba is obviously significantly limited by...

Analysis

Cuba's government is perceived as insincere in its recent economic reforms, with skepticism about the potential for genuine private market activity. The heavy U.S. sanctions continue to severely impact Cuba's economy, particularly in the tourism sector, which has seen a significant decline in visitors since 2018.

Smart money should note that the Cuban government's reforms may be more about political survival than actual economic liberalization, indicating a potential for continued instability. The ongoing sanctions and the retreat of major hotel groups signal a challenging environment for any investment in Cuba, despite the government's overtures to attract foreign capital.

15:49
PDT

Cuba has passed significant free market reforms.

Cuba Pavel Vidal Pontificia Universidad Javariana Cuban central bank In June

– Reforms include privatization and foreign investment expansion.

– Government credibility is a key concern for investors.

– Cuban-Americans are being encouraged to invest in Cuba.

– The success of reforms will depend on their implementation.

Cuban economic reformsforeign investmentmarket liberalization

▸ Full transcript

In June, Cuban lawmakers passed 176 sweeping free market reforms, including the expansion of foreign and private investment, the decentralization of Cuba's economy, and liberalization of factors such as tourism, banking, property, and agriculture. We've had this statement by the Cubans, which is an interesting one, and I think we should take it seriously. But this is an acceleration. It's much more explicit, and it's an invitation to Cuban-Americans to invest in Cuba. It includes privatizations, a wider opening to foreign investment, and the actual withdrawal of the government from the central planning system. In this complicated situation in 2026, it seems that this balance has favored those who are inclined to market reforms. But they have a problem of credibility. Pavel Vidal is a professor at Pontificia Universidad Javariana in Cali, Colombia. He is Cuban-born and worked at Cuba's central bank and the center for the study of the Cuban economy until he left the country in 2012. We have to see how they advance in these reforms to show that these are not transitory reforms, that they are not simple reports or announcements, but they have a disposition.

Analysis

Cuban lawmakers have enacted 176 sweeping free market reforms aimed at expanding foreign and private investment, signaling a significant shift in the country's economic landscape. This move is seen as an invitation for Cuban-Americans to invest in Cuba, but the government faces credibility challenges in ensuring these reforms are lasting and not merely superficial announcements.

Smart money should note that while the reforms present new investment opportunities, the historical context of Cuba's economic management raises questions about the sustainability of these changes. Investors will need to assess the government's commitment to these reforms and the potential for genuine market liberalization amidst ongoing economic challenges.

15:46
PDT

Cuba has the lowest nominal GDP per capita in Latin America.

Cuba US Emily Morris University College London Economic Commission for Latin America and the Caribbean GDP Little Havana Castro Revolution Latin America Economic Commission

– US sanctions have severely limited financial resources in Cuba.

– Cuban-Americans remain hopeful for change despite current challenges.

– Investment opportunities may arise if political conditions improve.

– Historical context indicates potential for recovery in various sectors.

Cuban economyUS sanctionsinvestment opportunitiespolitical change

▸ Full transcript

We're not investing in Cuba. It would be a loss. If they lived in Cuba, they had to have a dry system. Cuba was a dry system and there was a democracy. They were communing because they lived in Cuba. When they were dry, they were communing, they were bombing Cuba. The section of Miami known as Little Havana is home to over half of Cuban-Americans whose families fled the Castro Revolution nearly 70 years ago. And even as Havana, 200 miles to their south, struggles, many remain hopeful that things can and must change. Cuba's in a lot of trouble because unfortunately for them it's run by a bunch of incompetent communists and being a communist is bad; being an incompetent communist is like the worst. Before the revolution in 1959, Cuba had the third largest GDP per capita in Latin America. Today, the Economic Commission for Latin America and the Caribbean estimates that the country has the lowest nominal GDP per capita in the region. Because of the US sanctions, they've just been starved of finance for so long. I think every sector, pretty much every sector is open to investment. Emily Morris is a research fellow at University College London. There's a lot of uncertainty about Cuba right now. I won't ask you to predict what will happen, but give me a range of scenarios that might happen. Okay, well the first scenario is I suppose the intended scenario for the actions that have been taken by the US creates such a lot of hardship that somehow...

Analysis

Cuba's economic situation remains dire, with the country experiencing the lowest nominal GDP per capita in Latin America due to long-standing US sanctions and poor governance. Despite the challenges, there is a sense of hope among Cuban-Americans in Miami that change is possible, highlighting the potential for investment opportunities in various sectors if conditions improve.

Smart money should note that the current hardships in Cuba could lead to significant investment opportunities if the political landscape shifts. The historical context of Cuba's economy suggests that sectors previously closed off may become accessible, attracting interest from investors looking for undervalued assets in a recovering market.

15:44
PDT

Coinbase's goal is to become a comprehensive financial exchange.

Coinbase Francine Lacqua Bloomberg Bloomberg Television Watch Bloomberg Real Yield Bloomberg Crypto PRIVATE DXY

– The firm sees traditional finance and crypto as both partners and competitors.

– Future financial institutions may fully embrace crypto efficiencies.

– The distinction between traditional finance and crypto is expected to blur.

– Investors should monitor how this convergence affects market dynamics.

crypto integrationfinancial services evolution

▸ Full transcript

The future of money to others. We see cryptos trillion dollar swings. While others follow the noise, we follow the money. To the podcast version of Leaders with Francine Lacqua. Listen and watch on Bloomberg Television or wherever you get your podcasts. Get your fixed income fix. Watch Bloomberg Real Yield every Thursday at 12 p.m. Eastern. Right here on Bloomberg. Context changes everything. In case you missed it, on Bloomberg Crypto. Is the end gain here for Coinbase, your new company, to become a full range, fully integrated financial firm that ends up competing with the firm that you came from? Well, our goal, as you identified, is becoming the everything exchange. We want to be a one-stop shop where you can trade stocks, commodity futures, and crypto. We either have it or are going to want to try to build it. So we see the entire financial industry as both partners and potentially competitors because the future of finance is going to run on crypto rails, and Coinbase has been a leader in that regard. So we see an inevitable convergence between traditional finance and crypto. So that a couple of years from now, even your questions are not going to be identifying this dichotomy within the industry, but rather talking about how every modern financial institution is embracing the efficiencies and benefits that crypto provides. Don't miss Bloomberg Crypto live Tuesday.

Analysis

Coinbase aims to become a fully integrated financial firm, positioning itself as a one-stop shop for trading various assets, including stocks and crypto. This reflects a broader trend where traditional finance is increasingly converging with crypto, suggesting that the future of finance will leverage crypto efficiencies.

Smart investors should note that this convergence may lead to a significant shift in how financial institutions operate, potentially diminishing the distinction between traditional and crypto markets. As Coinbase expands its offerings, it could reshape competitive dynamics in the financial sector, prompting traditional firms to adapt or risk obsolescence.

15:39
PDT

Rising interest rates are reducing the attractiveness of private equity investments.

Dan Stephen Kaplan University of Chicago Booth School of Business

– Investors are increasingly seeking direct investment opportunities to avoid high fees.

– The complexity and costs of direct investments are prompting reconsideration of private equity funds.

– Private equity firms are adapting by offering lower-fee structures for direct investments.

– Due diligence and research are becoming critical factors in investment decisions.

private equity dynamicsinvestment feesdirect investment challenges

▸ Full transcript

And that will attract investors that don't feel comfortable having their money held up for eight to ten years. That attracts a smaller investment size. Conversely, a lot of the largest investors, many of whom we have as clients, say, 'Well, we don't want to pay the fees that these funds have, so we'll be more patient and look for ways to invest directly into companies.' Well, now the private equity funds are saying they'll find that opportunity as well. Maybe a client, maybe an investor can invest in our fund, but if they do that, we'll give them an opportunity to invest without the same fees directly into the company. Investors historically don't like to pay fees or at least like to pay the lowest fees they can. At the same time, some family offices and high-net-worth individuals are discovering that it's not that easy and it's pretty expensive even to do it yourself. It's a great way to frame it because a lot of investors think, 'Well, I love the investments I've had, but why would I want to pay the fees here?' So a lot of what the top private equity funds do is explain to their investors all the hard work they're doing to source and then do research and their investment thesis and due diligence on companies as a value add so that direct investors acknowledge and appreciate that there is work being done by the funds that they're not.

Analysis

Private equity is facing challenges as interest rates rise, making it less attractive for investors who prefer direct investments to avoid high fees. The historical appeal of private equity funds is diminishing as investors reconsider the costs versus the complexities of direct investments.

Investors are becoming more aware of the hidden costs of direct investments, which may not be as straightforward as they initially believed. This shift could lead to a reevaluation of the value proposition offered by private equity funds, emphasizing the importance of due diligence and research in investment decisions.

15:36
PDT

Private equity's outperformance has reversed since 2019.

Professor Kaplan Big Tech DPI

– Rising interest rates are impacting exit strategies for private equity firms.

– High prices paid during the boom are complicating realizations.

– Limited partners are becoming impatient for returns.

– DPI metrics are currently low, signaling potential liquidity issues.

private equity performanceinterest rate impactliquidity concerns

▸ Full transcript

Many of the same things. According to Professor Kaplan, an analysis of U.S. buyout funds shows that private equity largely delivered on its promise of beating public markets for decades, from the 1990s all the way through 2018. But since 2019, that pattern has reversed, in part because Big Tech's remarkable rise has pushed public market returns higher, and in part because the higher prices generated during the boom days have made it harder for investors to get their money out. The ultimate goal by and large is to sell the company at some point. That has become more difficult in recent years, perhaps in part because of the increase in interest rates. Certainly, we talked to limited partners who say, wait, I'd like my money back now, and the general partners say, oh no, no, it's too soon. Like to hold on for a while. What's the problem with exit right now? The deals in 2020 and 21, they paid high prices, then they got hit by interest rate increases. And those deals are not doing so well. And I think a number of the private equity firms don't want to sell because they think if they hold it longer, they'll be able to get a higher value. And as a result, they're not selling. And so realizations or what they call in the industry DPI, which is distributed capital per invested, is on the low side and that's what LPs...

Analysis

Private equity has struggled to maintain its historical outperformance against public markets since 2019, largely due to rising interest rates and the strong performance of Big Tech. The difficulty in exiting investments has increased, as firms are hesitant to sell at lower valuations following the high prices paid during the boom years.

Smart investors should note that the current environment is challenging for private equity exits, with many firms opting to hold onto investments longer in hopes of better valuations. This trend may lead to lower distributed capital per invested (DPI) for limited partners, indicating a potential liquidity crunch in the private equity space.

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