OpenAI Holds Back Astra Over Safety Risks, Iran Doubts US Deal Before Midterms

THIS IS "THE PULSE" WITH FRANCINE LACQUA. FRANCINE: GOOD MORNING EVERYONE. OIL EXTENDING ITS GAINS AS PESSIMISM FOR A BREAKTHROUGH TO END THE WAR IN IRAN THROUGH A KEY SAUDI PIPELINE. PAUL WALLACE, OUR MANAGING EDITOR FOR THE MIDDLE EAST AND AFRICA. IRANIAN OFFICIALS ARE SAID TO BE DOUBTFUL OF A DEAL TO END THE WAR BEFORE MIDTERMS. WHAT MORE DO WE KNOW? >> THAT'S CORRECT. IN SOME WAYS, THE U.S. AND IRAN ARE ALIGNED ON THIS POINT. IN PRIVATE, BOTH SIDES SEEM TO BE DOUBTING THERE WILL BE A MAJOR BREAKTHROUGH BEFORE THE U.S. MIDTERMS ON NOVEMBER 3. IRANIAN OFFICIALS LAST WEEK AT THE U.N. GENERAL ASSEMBLY IN THEIR MEETINGS WITH VARIOUS OTHER WORLD OFFICIALS, THEY SORT OF KEPT REITERATING THAT THEY DISTRUST THE AMERICANS, DON'T THINK THAT ANY DEAL THAT GETS SIGNED WITH THE AMERICAN TO BUY WASHINGTON. I THINK IT IS IMPORTANT TO NOTE THAT WASHINGTON FEELS THE SAME WAY ABOUT THE IRANIANS, THERE IS A SIMILAR LACK OF TRUST. BUT IRAN IS ESSENTIALLY THINKING IT IS GOING TO BE TOO TOUGH TO GET THAT BREAK BEFORE EARLY NOVEMBER. TALKS ARE STILL GOING ON AT SOME LEVEL, AND EVEN YESTERDAY IN NEW YORK THE IRANIAN PRIME MINISTER HAD DISCUSSIONS WITH QATAR, ONE OF THE MAIN MEDIATORS. QATARI OFFICIALS ARE ASSERTIVE SHUTTLING BETWEEN THE AMERICANS. SO THEY WEREN'T DIRECT TALKS, BUT THERE WERE MORE INDIRECT TALKS. THOSE ARE CONTINUING. WE CAN'T RULE OUT SOME SORT OF BREAKTHROUGH IN THE NEXT WEEK OR TWO, BUT CERTAINLY IT DOESN'T LOOK LIKE THERE WILL BE ONE FROM WHAT BOTH SIDES ARE SAYING IN PRIVATE. F RANCINE: THE SAUDI PIPELINE BACK TO 50% FLOW. WHAT DOES THIS MEAN FOR THE ENERGY MARKET? >> IT IS CERTAINLY QUITE A SIGNIFICANT RELIEF FOR THEM. THIS PIPELINE GOING FROM SAUDI ARABIA'S EASTERN FIELDS TO THE RED SEA PORT WAS PRETTY MUCH THE BIGGEST CONDUIT FOR BYPASSING HORMUZ FOR ANY OF THE GULF ARAB OIL PRODUCERS. IT WAS KNOCKED OUT BY DRONES EMANATING FROM IRAQ WHICH HAS PLENTY PRO IRANIAN MILITIAS AROUND SEPTEMBER 10, AND AT LEAST HALF OF IT BACK ONLINE. I REPORTING SAYS IT IS NOW BACK UP TO 3.5 MILLION BARRELS PER DAY. IT IS NOTEWORTHY THAT IN THE MEANTIME, SAUDI ARABIA HAS BEEN UPPING ITS FLOW THROUGH THE STRAIT OF HORMUZ, WHICH IS STILL VERY RISKY AND IS STILL A ROUTE IN WHICH SHIPS IT LOOKS AS IF SEPTEMBER MIGHT'VE ACTUALLY BEEN A PRETTY GOOD MONTH FOR THE SAUDI'S IN TERMS OF THEIR OVERALL OIL EXPORTS. IT LOOKS LIKE SAUDI ARABIA OIL EXPORTS ARE UP THIS MONTH FROM AUGUST. FRANCINE: PAUL, THANK YOU SO MUCH. THESE RANGE FROM UNCERTAIN AIRCRAFT DELIVERIES TO HIGH OIL PRICES THAT WILL FORCE THE AIRLINE TO SHARPEN EFFICIENCIES. LUFTHANSA HAS BEEN STRUGGLING WITH BRINGING DOWN COSTS. THIS IS ON THE BACK OF THE CHIEF EXECUTIVE INTERVIEW THAT WE'VE DONE A SHORT WHILE AGO. TECH AND OPAEN AI IS HOLDING BACK A VERSION OF ITS ASTRA MODEL AFTER IT FAILED TO PERFORM ON THE CURRENT ITERATION. IT COMES AS NVIDIA INTRODUCES A SECURITY SYSTEM THAT IT SAYS WOULD HAVE PREVENTED HIGH-PROFILE BREACHES FROM OPENAI MODEL. EVERYONE IS WORRIED ABOUT SAFETY. YOU HAVE NVIDIA SAYING THEY CAN STOP BREACHES AND OPENAI SAYING THEY ARE HOLDING BACK ON NEW MODELS. SO WHERE ARE WE ON THE SAFETY ISSUE? >> THERE'S NOT A GREAT AMOUNT OF TRANSPARENCY. THE BIG THING WE ARE WATCHING IS CONSISTENT REGULATION FROM GOVERNMENTS ABOUT WHETHER THESE AI MODELS DO NEED TO GO THROUGH A PRERELEASE EVALUATION. WE HAVE A SORT OF PATCHWORK OF THE PRIVATE COMPANIES DOING THE EVALUATION THEMSELVES AND NVIDIA, THE CYBERSECURITY COMPANIES SAYING OUR SOLUTIONS CAN HELP PROTECT THE PUBLIC FROM AI MODELS GOING ROGUE. AND ACCESS ADDITIONAL GUARDRAILS TO PREVENT AI MODELS FROM BREAKING OUT FROM THERE OBSTRUCTIONS INTO DOING THINGS THAT THE USERS DIDN'T INSTRUCT INTO. THAT'S NOT NECESSARILY A GUARANTEE, IT IS LIKE ANY CYBERSECURITY SOFTWARE, SOME STUFF MAKE IT THROUGH, BUT IT IS HELPFUL TO KNOW THAT THERE ARE ADDITIONAL SOLUTIONS OUT THERE, NOT JUST RELYING ON OPENAI, ANTHROPIC TO DO THAT EVALUATION INTERNALLY AND THEN RELEASE MODELS. REALLY, THIS IS ALL ABOUT THE PRIVATE COMPANIES PROVIDING SOLUTIONS AND WE DO HAVE CONSISTENT REGULATION. FRANCINE: PRESIDENT TRUMP IS HOSTING SOME TECH EXECUTIVES FOR LUNCH TODAY. IS HE GOING TO HOLD THEM TO TASK, OR WHATEVER TALKING ABOUT? >> PROBABLY NOT. TRUMP HAS SAID PRETTY CONSISTENTLY THAT HE IS NOT INTERESTED IN SLOWING DOWN AI MODEL DEVELOPMENT WHICH IS SOMETHING THAT ANTHROPIC HAS CALLED FOR. SAM ALTMAN, ELON MUSK HAVE SORT OF AGREED. BUT TRUMP HAS SAID WHY SHOULD WE, THE U.S. IS AHEAD. FROM THIS PERSPECTIVE, AI IS A HUGE ECONOMIC, POLITICALLY A LITTLE BIT MIXED BUT CERTAINLY BEING ECONOMICALLY AHEAD AND REAPING THE BENEFITS. WHICH FOR HIM SEEMS LIKE A POSITIVE. SO I THINK THERE WILL BE A DISCUSSION ABOUT SAFETY. IT MAY TAKE ALL OF THEM GANGING UP ON HIM TO PERSUADE HIM SOMETHING NEEDS TO BE DONE BUT CERTAINLY HE'S NOT GOING INTO IT WITH GREAT APPETITE FOR REGULATION. FRANCINE: IS EUROPE -- IS ANYONE GOING TO LEAVE THE SAFETY CONCERNS? >> EUROPE, TO SOME EXTENT? FRANCINE: DIFFICULT BECAUSE THEY DON'T HAVE THE MODELS. >> CHINA HAS SOME DOMESTIC REGULATION THAT IS VERY MUCH OF ITS OWN MARKET AND NOT REALLY GLOBAL REGULATION. ODDLY, IT IS THE AI COMPANIES WHO SEEM TO BE TAKING THE LEAD AND CONSISTENTLY EVEN HAVE THE LEADERS OF GOOGLE SAYING ACTUALLY, THERE MAY BE STUFF -- MAYBE SHOULD BE SOME SORT OF FRAMEWORK. YOU HAVE ANTHROPIC NAMING POTENTIAL EVALUATION PARTNERS. REALLY, THE AI COMPANIES ARE THE ONES DOING SOME OF THIS WORK WHICH IS NOT NECESSARILY WHAT YOU WANT. FRANCINE: TERRIFIC BRIEFING. EQUITIES A FALLEN TO A ONE-WEEK LOW, MOUNTING BETS ON FURTHER FED RATE HIKES, DRIVING TREASURY YIELDS MULTIYEAR HIGHS. FRED, GOOD MORNING. EVERY MORNING WE TRY TO DECIDE WHAT IS ON THE SHOW AND EVERY MORNING WE DECIDED HAS TO BE OIL AND AI. HOW IS THE MARKET VIEWING THESE TWO? >> OIL, YOU GUYS JUST WENT THROUGH IT. WE'RE LOOKING AT IT EVERY DAY BUT WE ALSO HAVE TO LOOK AT FUTURES. WE ARE TRYING NOT TO THINK TOO MUCH ONLY ABOUT THE SPOT IN THE MARKET HAS REMAINED CALM HER CERTAINLY AS WE GO OUT THE CURVE. AND WHEN WE THINK ABOUT AI, IT'S NOT JUST THE TECHNOLOGY. PART OF IT IS THE TECHNOLOGY, AND ANOTHER PART OF IT IS FINANCING THE ECOSYSTEM. THAT IS WHERE WE ARE PROBABLY SPENDING FROM A RESEARCH STANDPOINT. IT AFFECTS SO MUCH OF WHAT WE DO. THE AI COMPANIES THEMSELVES ARE NOT DOING ANY FINANCING YET IN PUBLIC MARKETS. BUT AROUND THEM, THAT WHOLE ECOSYSTEM AND WHETHER IT IS YOU TO THE THESE IN BUILDING UP THE ENERGY SIDE, THAT IS SOMETHING -- FRANCINE: WE WILL TALK ABOUT SOME OF THE CREDIT ISSUANCE IN THE AI SPACE ECONOMICALLY, DOES IT STILL MAKES SENSE? >> ECONOMICALLY, IT IS NOT JUST THE ECONOMICS FOR THE FRONTIER LABS. IT IS ECONOMICS IN TERMS OF HOW IT AFFECTS THE ENTIRE ECONOMY. YOU ARE LOOKING AT GDP GROWTH, IT IS A LOT HIGHER. THAT DELTA IS ACTUALLY PRETTY CLOSE TO THE DIFFERENCE FROM THE AI BUILD. SO IF IT SLOWS DOWN, WE STILL NEED TO BUILD A LOT OF THE DATA CENTERS. SOME OF THE FRONTIER STUFF, AS A PERCENTAGE WHICH IS NOW THE MAJORITY, I THINK THAT WILL CONTINUE TO SUPPORT GROWTH. IT MATTERS FOR THE ECONOMY AS A WHOLE. FRANCINE: WHAT ABOUT THE CREDITS BASED AS IT PERTAINS TO AI? WE SEE LOADS OF ISSUANCE. >> SOME OF IT HAS CERTAINLY GONE OUTSIDE OF DOLLARS AT THE HYPERSCALERS NEED TO LOOK FOR DIFFERENT SOURCES. THINKING ABOUT THE CREDIT SPACE, WE DON'T THINK ABOUT TECH, NECESSARILY. GO BACK FIVE YEARS AND THEY WOULD'VE SAID THAT THESE BIG EQUITIES THAT ARE THE HIGHEST PORTION OF THE EQUITY MARKET, THEY ARE PROBABLY THE LOWEST BETA PORTION OF CREDIT MARKETS BECAUSE WERE TALKING, COMPANIES WITH NEGATIVE NET LEVERAGE. NOW WITH THE ISSUANCE THEY ARE BECOMING A HUGE PORTION BECAUSE SO MUCH OF THEIR ISSUANCE HAS GONE OUT THE CURVE. WHEN YOU ACTUALLY LOOK AT HOW THEY AFFECT THE INVESTMENT-GRADE MARKET, THE DURATION TIMES THE SPREAD OF HYPERSCALERS IS LARGER THAN THE BIG SIX BANKS IN THE U.S., WHICH WE ALWAYS THINK OF AT THE BIGGEST PART OF CORPORATE MARKETS. THIS HAS BECOME A MASSIVE PART OF CREDIT MARKETS AND IT IS CERTAINLY AFFECTING THOSE TECHNICALS REALLY SIGNIFICANTLY. FRANCINE: ARE YOU SEEING MUCH MORE ISSUANCE? >> WE WILL SEE SOME MORE THIS YEAR BUT YOU HAVE TO EXPECT THINGS TO BE SIMILAR NEXT YEAR TO WHAT IT WAS THIS YEAR. WE WILL GO SAY IN TWO MONTHS AT MOST WITHOUT ONE OF THESE BIG ISSUANCE, AND YOU SEE THE ENTIRE INVESTMENT-GRADE MARKET AND TIGHTENED A BIT. BECAUSE LOOK, THE HYPERSCALERS ARE FIGHTING A BIT EASIER AND THEY WILL BE DEMAND FOR THAT. BUT IF THERE IS DEMAND FOR THAT, THERE HAS TO BE ROOM FOR SOMETHING ELSE. IF YOU ARE ISSUING SO MUCH OUT THE CURVE, AS MORE AND MORE TREASURIES ARE OWNED BY PRIVATE INVESTORS AS OPPOSED TO FOREIGN GOVERNMENTS OR THE FED, IT MATTERS FOR EVERYTHING. FRANCINE: I GUESS THE RISE IN YIELDS EVERY SEASON GOT A BIT OF TEMPERANCE AFTER WE HEARD FROM THE FED. IS IT JUST BUBBLING OVER? >> WE LOOK AT TREASURY MARKETS TODAY AND YES, IT FEELS LIKE IT'S MOVED REALLY FAST AT LEVELS WE HAVEN'T SEEN IN A WHILE. SO YOU GO BACK TO 2007 OR SOMETHING, THEY LOOK PRETTY NORMAL, THE LEVELS. BUT WE'VE BEEN IN A PERIOD OF VERY LOW YIELDS FOR A LONG TIME. THE QUESTION PEOPLE ARE ASKING IS HOW MUCH OF THIS IS OK, SHOULD I YOU WORRYING ABOUT U.S. DEFICIT AND IS THAT SAFETY PREMIUM TAKING AWAY? WE ARE NOT THERE YET. WHEN YOU LOOK AT THE TERM PREMIUM, IT WAS ACTUALLY WELL BELOW AVERAGE. NOW MAYBE SLIGHTLY ABOVE AVERAGE, BUT IT IS NOT OFF THE SPECTRUM. AND WE DO HAVE HIGHER DEFICITS, SO THAT TERM PREMIUM FOR THE LITTLE BIT HIGHER. INFLATION NOT OUT OF CONTROL BUT HASN'T COME DOWN AS THE FED OR ANYONE HAD HOPED AND THEN GROWTH. GROWTH HAS BEEN POSITIVE AND GREAT TO DO OFTEN GO UP WHEN GROWTH IS POSITIVE. IT'S A LITTLE BIT LESS NEGATIVE THAN PEOPLE ARE SAYING. WHAT DO YOU SEE IN THE U.S. ECONOMY? THE NUMBERS ARE POSITIVE. KEVIN WARSH IS IN LINE WITH WHAT THE MARKETS WANT TO SEE. THERE IS A BIG DROPOUT IN LABOR PARTICIPATION. >> THE MOVES LABOR, SOME OF IT IS NATURAL. IN TERMS OF THE AGING OF THE POPULATION. THE OTHER PART IS THE IMMIGRATION SIDE. IT TAKES A LITTLE WHILE FOR US TO ADJUST THE TO THE FACT THAT A FLAT JOBS NUMBERS IS OK FOR THE ECONOMY. I THINK IT GETS BACK TO YOUR OTHER QUESTION ON AI AND WHAT IT MEANS FOR ECONOMY. THERE ARE ARE PLACES IN U.S. ECONOMY THAT DON’T FEEL AS GREAT. RESIDENTIAL CONSTRUCTION, WHAT’S GOING ON THERE. IN A NORMAL ECONOMY, THE JOB LOSSES WE WOULD HAVE ASSOCIATED WITH RESIDENTIAL CONSTRUCTION NOW WOULD TELL US WE’RE IN A RECESSION OR CERTAINLY MUCH LOWER GROWTH THAN WE ARE TODAY. WHAT’S HAPPENING IS YOU CREATING THESE DATA CENTERS AND THE BUILDING THAT NEEDS TO BE DONE IN RELATION TO THAT AND THE AUXILIARY SERVICES IS MAKING UP FOR THAT. THE ECONOMY FEELS GOOD BUT IT IS VERY TIED TO THIS BILL DESPITE THE POLITICAL BACKLASH. FRANCINE: OVERALL YOU HAVE A BIG TEAM. I KNOW IT IS IMPOSSIBLE TO PREDICT WHAT HAPPENS TO THE PREVIOUS OIL. WE DON’T KNOW. IT DEPENDS ON THESE NEGOTIATIONS AND WE DON’T KNOW WHAT HAPPENS BEFORE THE MID-TERMS. DO YOU WANT TO KNOW THAT MORE THAN THE IMPACT OF AI ON JOBS AND THE ECONOMY? IF THERE IS ONE QUESTION YOU REALLY WANT ANSWERED IN THE NEXT 12 MONTHS WHAT IS IT? >> I THINK IT WOULD BE AI OVER OIL. IT IS NOT THAT OIL IS NOT IMPORTANT BUT RIGHT BEFORE I CAME ON, YOU WERE TALKING ABOUT SAUDI PIPELINE. FINDING DIFFERENT WAYS. THATCH TENDS TO BE WHAT HAPPENS. AS YOU DEAL WITH THE SHOCK -- THAT TENTS TO BE WHAT HAPPENS AS YOU DEAL WITH THE SHOCK. THAT SETTLES ITSELF A LITTLE BIT OVER TIME. THE AI THING IS NOT GO GOING AGOING AWAY. THERE IS NO CHANCE OF IT. THE ASSUMPTION WE’RE IN A HIGHER OIL REGIME BUT THERE WILL BE MECHANISMS THAT OCCUR THAT ALLOW US TO AVOID THE STRAIT OF HORMUZ A LITTLE BIT FOR EXAMPLE. FRANCINE: THE BIG QUESTION ON AI IS JOB DESTRUCTION? >> I THINK WE’RE NOT THERE YET ON JOB DESTRUCTION. I THINK RIGHT NOW WE ARE MUCH UNDER THE PRODUCTIVITY. I THINK THE QUESTION IS ENERGY. IT IS NOT OIL NECESSARILY BUT DO YOU HAVE THE ENERGY TO ACTUALLY SUPPORT THIS BUILD AND HOW ARE YOU GOING TO BUILD THAT? THAT IS WHAT IS FUELING ECONOMY IS THE AI BUILD. FRANCINE: THANK YOU SO MUCH. GLOBAL HEAD OF RESEARCH AT BARCLAYS. COMING UP, WE’LL DISCUSS THE OUTLOOK FOR THE OIL AND GAS SECTORS AS THE U.S.-IRAN WAR SHOWS NO SIGNS OF ENDING. THAT IS NEXT. THIS IS BLOOMBERG. ♪ FRANCINE: WELCOME BACK, EVERYONE. THE WAR IN THE MIDDLE EAST IS PUTTING THE OIL AND GAS DESTROY THE TEST. THE NASDAQ LISTED AN OIL FIELDS COMPANY ACROSS THE REGION. THE CHIEF EXECUTIVE OFFICER JOINS US. THANK YOU SO MUCH FOR JOINING US. IF YOU LOOK AT THE FIGHTING IN THE MIDDLE EAST, HAS IT AFFECTED YOUR WORK AT FIELDS THERE? >> IT DID AFFECT BUT FOR US WE DID ACTUALLY QUITE GOOD. WE BENEFITED FROM THE CONFLICT IN A WAY BECAUSE WE PREPARED ALL OF OUR EQUIPMENT, OUR MATERIAL, EVERYTHING. WE MANAGED TO STAY PUT AND BE ABLE TO CAPTURE SOME OF THE WORK THAT SOME OTHERS COULD NOT DO DURING THE CONFLICT. FRANCINE: LOGISTICALLY AGAIN HOW DID YOU SMOOTH OUT NEVER LOGISTICAL CUSTODY ISSUES? >> WHEN THE CONFLICT HAPPENED ON FEBRUARY 28, I ACTUALLY FLEW THERE TO THE REGION. IT STARTED WITH WHAT WE CALL A CMT. CRISIS MANAGEMENT TEAM. IT IS TO ENSURE ALL SOURCES AND EQUIPMENT, I SHIPPED MORE EQUIPMENT AND RESOURCES AND CHEMICALS AHEAD OF TIME. WE MANAGED TO ACTUALLY KEEP A LOT OF THE EQUIPMENT AND MATERIAL ON SITE TO BE ABLE TO CAPTURE THAT BECAUSE OBVIOUSLY IF WE DIDN’T I WOULD HAVE HAD TO STOP. FRANCINE: PREPARATION AND FAST ACTING ALWAYS HELP. WHEN YOU LOOK AT MIDDLE EASTERN COUNTRIES LIKE SAUDI ARABIA, KUWAIT, THEY WANT TO PRODUCE MORE. WHERE DO YOU SEE THE BIGGEST GROWTH? >> SAUDI WILL ALWAYS BE OUR BIGGEST GROWTH. UAEOBVIOUSLY IS GOING TO BE A BIG GROWTH GOING FORWARD BECAUSE OBVIOUSLY WITH THE PRODUCTION TARGET UP TO 5 MILLION KUWAIT IS GOING TO BE A BIG GROWTH AS WELL. THEY HAVE A TARGET OF 4 MILLION BARRELS. A LOT OF THIS ACTIVITY IS GOING TO RAMP UP FASTER NOW POST CONFLICT BECAUSE PEOPLE HAVE TO CAPTURE AS WELL WHAT HAPPENED WITH THE DROP OVER THE PAST SIX MONTHS. HAVE TO CATCH UP WITH ALL OF THIS ACTIVITY TO BE ABLE TO MAKE SURE TO GET CAPACITY AND RESOURCES AND AS WELL TO FUEL THE SBR. FRANCINE: WILL THERE BE MORE FRACTURE OR MORE TECHNOLOGIES USED IN THE REGION? >> IT HAS NOTHING TO DO WITH THE CONFLICT FROM THE TECHNOLOGY POINT OF VIEW BUT WHAT’LL HAPPEN AS THE FIELD GETS OLDER YOU NEED MORE WHAT WE CALL SECONDARY RECOVERY AND MORE YOU’RE GOING TO GO TO FIELD WHERE IS YOU NEED TO DO MORE STUFF LIKE FOR EXAMPLE FRACTURING FOR THE UNCONVENTION A.M.. WE SEE THE SAUDI HAVE A FANTASTIC -- INFORMATION WHERE BASICALLY IT IS TODAY, THE PERFORMANCE IS EXACTLY LIKE TO PERM YAN. THEY ALREADY ACHIEVED THE SAME NUMBER OF STAGES AND TECHNOLOGY ADVANCEMENT LIKE WE WE HAVE IN THE U.S. WHICH IS VERY GOOD. YOU SHOULD START WHERE OTHER PEOPLE ENDED IT NOT TO START FROM SCRATCH. FRANCINE: IT IS NOT ONLY IMPORTANT FOR THE MILITARY EAST BUT THE GLOBAL ECONOMY AND GLOBAL ENERGY. ARE YOU DRILLING FOR THE SECOND PHASE? >> TODAY, IT IS ON WHAT THEY CALL THE FACTORY NOTE. BASICALLY YOU HAVE A TARGET OF 1 1PC INARCHED TWO AND THEY ALREADY HAVE THE RIGS AND FRACTURE EQUIPMENT READY TO BE ABLE TO DELIVER ON -- FRABBING EQUIPMENT. THE GAS AND INTERNAL CONSUMPTION AND AI THERE IS GOING TO BE A HUGE DEMAND FOR IT. THEY ALREADY HAVE A PLAN OF 80% MORE GAS WHICH IS HUGE OVER THE NEXT FOUR OR FIVE YEARS. FRANCINE: YOU’RE EXPECTING THAT TO ACCELERATE FASTER THAN EXPECTED MAYBE? >> YES. FRANCINE: WHAT ELSE ARE YOU WORKING NONSAUDI ARABIA? >> A LOT OF OTHER THINGS. THE SAUDIS ARE AMAZING FOR RESERVOIR MANAGEMENT. REPLACEMENT OF THE RESERVES. WE HAVE A LOT OF TECHNOLOGY ON OTHER THINGS LIKE FOR EXAMPLE, WE’RE WORKING ON LITHIUM WHICH IS LIKE BRAND NEW. RIGHT? AND SAUDI I THINK WILL BE THE FIRST IN THE REGION OR EVEN IN THE WORLD TO BE ABLE TO GET LITHIUM AND WE ARE WORKING WITH THEM ON SOME OF THE BRAND NEW TECHNOLOGY TO BE ABLE TO DO THAT WITH D LEARN TECHNOLOGY. -- DLE TECHNOLOGY. FRANCINE: THAT WOULD BE A GAME CHANGER. RIGHT? FOR THE REGION AND EXPORTING POTENTIALLY TO ALLEYS INS IN EUROPE AND ELSE -- ALLIES IN EUROPE AND ELSEWHERE. >> IT WOULD BE UNIQUE AND IT IS ALMOST GOING TO BE THE FIRST AT THAT SCALE ONCE IT IS DEVELOPED. FRANCINE: UAE, WHAT ARE YOU LOOKING AT? THEY ARE TRYING STEP UP, THE UNCONVENTIONAL, THE SHALE I THINK. >> UAE HAS FANTASTIC RESERVES OFFSHORE AND ONSHORE. THEY HAVE A COUPLE OF FIELD WHERE IS IT IS UNCONVENTIONAL AND YOU HAVE AS WELL THEY OPTED FOR A NEW STYLE WHICH IS INVITING A U.S. OPERATOR TO TAKE ONE OF THE FIELDS AND EQUIPPED TO EXACTLY THE SAME WAY LIKE TO U.S FRANCINE: ARE YOU COMPETING WITH DRILLING? >> YEAH. THEY ARE MY FRIENDS AND COMPETITORS AS WELL. FRANCINE: SO THERE IS NO -- YOU DON’T FEEL LIKE THE UNDERDOG IN THERE? >> NO. DRILLING IS THE MAIN SERVICE OF ADNOCK. WE DO WORK WELL. FRANCINE: ARE YOU EXPECTING ANY MAJOR AWARDS OR TENDERS IN THE NEXT COUPLE OF MONTH? >> YES. WE HAVE BEEN BIDDING ON WHAT WE CALL MEGAPROJECTS IN MOST OF THE COUNTRIES AND MOST OF THESE AWARD ALSO COME IN NEXT THREE TO FOUR MONTHS. FRANCINE: HOW MANY WILL YOU GET? >> I’M QUITE CONFIDENT WE’LL GET MORE THAN OUR FAIR SHARE. FRANCINE: WHAT DOES THAT MEAN? HOW MANY? >> WE HAVE A GOOD MARKET SHARE IN THE REGION. I THINK WE’RE GOING TO BE BETTER THAN WHAT WE HAVE BEFORE. IF WE ARE AT 10%, WE’LL BE 20%. WE’LL SEE. FRANCINE: GOOD, OPTIMISTIC CHIEF EXECUTIVE. I LIKE THAT. THANK YOU FOR JOINING US. THE CHIEF EXECUTIVE OF OF NESR. COMING UP, WE’LL DISCUSS THE IMPACT OF AI ON THE MARKETING INDUSTRY WITH THE CHIEF EXECUTIVE OF QANTER. HOW IT IS CHANGING OUR DAILY LIVES. THIS IS BLOOMBERG. FRANCINE: GOOD MORNING AND WELCOME TO "THE PULSE." THESE ARE YOUR TOP STORIES. TREASURY YEAR LEADS -- TREASURY YIELDS AT MULTI-HER YEAR HIGHS. THE LATEST ASTRO MODEL OVER SAFETY RISKS AS TECH LEADERS MEET WITH PRESIDENT TRUMP. ANDY BURNHAM SET TO OUTLINE HIS PARTY'S PITCH. LIVE FROM LIVERPOOL WITH AN INTERVIEW WITH THE UK'S A PRIME MINISTER SHORTLY. MARKETERS ARE BETTING BIGGER ON AI ASSISTANTS. CAN TAR SAYS 75% OF MARKETERS PLAN TO INCREASE INVESTMENT NEXT YEAR. LESS THAN A QUARTER OF CONSUMERS TRUST RECOMMENDATIONS FROM AI SYSTEMS. WE ARE NOW JOINED BY PAUL, CHIEF EXECUTIVE. YOU HAVE ALL OF THIS INSIGHT INTO WHAT BRANDS ARE THINKING AND HOW YOU CAN ACHIEVE AI FROM A RESEARCH PREVIEW. AND WHAT IT COMES OUT WITH PRIDE HAS AI CHANGE THE WORKFLOW IT CAN TAR? PAUL: IT HAS SPREAD THE 8 -- THE TOOLS WE USE TO DO OUR RESEARCH TO BUILD REAL INSIGHT INTO CONSUMERS TO UNDERSTAND THEIR SIGNALS AND HOW THEY THINK ABOUT BRANDS BUT ALSO THE TOOLS THAT WE PROVIDE IN THE TOP 100 BRANDS AROUND THE WORLD THE CHINESE COMPANIES GOING GLOBAL TO MAKE A BETTER DECISION. ABOUT MORE CUSTOMERS IN REAL TIME. FRANCINE: SO CREATIVE PROCESS AS WELL? PAUL: CREATIVITY IS ABSOLUTELY ESSENTIAL, IT'S AT THE HEART OF WHAT WE DO AND THE HEART OF WHAT THE INDUSTRY DOES. WITH SOME OF THE TOOLS WE HAVE BUILT WE CAN HELP YOU PICK FROM YOUR 500 AND YOU CAN CREATE EXACTLY WHICH ONE TO PUT IN FRONT OF WHICH CONSUMER. BUT MOREOVER WHAT WE CAN ALSO DO INCREASINGLY IS SAY WE CAN TAKE THAT PIECE OF CREATIVE AND IN REAL TIME SAY HERE ARE THE THINGS YOU CAN DO TO MAKE IT EVEN MORE IMPACTFUL WHETHER YOU'RE TRYING TO DRIVE A RESPONSE OR BUILD A MEANINGFUL SECURE BRAND DIFFERENTIATION AND PROFILE. FRANCINE: WHERE CLIENTS ATTITUDES TOWARDS AI GENERATED ADS? PAUL: THEY ARE TAKING A SORT OF MIXED ECONOMY VIEW OF IT RIGHT NOW. AT THE END OF THE DAY CREATIVITY IS CRITICAL. IT'S THE THING THAT DRIVES CULTURE. THERE'S A PHRASE WE USE A LOT IN THE BUSINESS CALLED AT THE SPEED OF CULTURE. SOMETIMES YOU DON'T KNOW BRILLIANT CREATIVE'S CAN CHANGE CULTURE ON A DAY-TO-DAY BASIS. THERE IS ROBOTS CREATING CONTENT. FUNDAMENTALLY AI ALLOWS US TO BE MUCH MORE WHEEZE TO TALK ABOUT 10 SEGMENTS ARE 100 SEGMENTS THAT WE HAVE THOUSANDS OF SEGMENTS. AND WE CAN TALK ABOUT HOW WE INTERACT WITH THEM IN REAL TIME. SO THE TOOLS AI ALLOWS US TO PROCESS THOSE AND UNDERSTAND THOSE INSIGHTS AND TURN THEM INTO REAL DECISIONS IN THAT TIME, SHOULD I BUY THIS, HOW DO I PROVE THE CREATIVE. OR EVEN WHAT MESSAGE FROM THE CONSUMER. FRANCINE: HOW WAS THAT RELATIONSHIP BETWEEN CONSUMER AND BRAND GOING TO CHANGE. YOU HAVE WHAT'S THE BEST PERFUME FOR ME WHO IS A -- PAUL: IT'S GOING TO BE MUCH MORE PERSONALIZED. WE TALKED ABOUT THE POWER OF MARKETING, AI ALLOWS US TO GO FROM MASS TO SUPER NICHE TO SMALL COMMUNITIES AND THE INDIVIDUAL. THAT'S AIDED BY THE LIKES OF GOOGLE AND META AND TIKTOK BUILDING IN AI AND AGENTS TO ALL THE TOOLS THAT EVERYDAY CONSUMERS USE. THE OTHER THING AND THIS IS PROBABLY THE MOST IMPORTANT THING IS YESTERDAY IT JUST HAD MARKETS OF CONSUMERS AND TODAY ARE AFTERMARKET TO THE AGENTS AND THE LLM'S IN ADDITION TO MARKETING TO THE CONSUMERS. FRANCINE: HOW DO YOU DO THAT? PAUL: THAT IS THE QUESTION. IT IS THE BILLION DOLLAR QUESTION. HOW YOU DO IT IS YOU STICK TO THE BASICS. YOU UNDERSTAND WHAT INFLUENCES THE LLM AND WHAT INFLUENCES THE CONSUMER. HOW DO YOU DEMONSTRATE THAT YOUR BRAND IS MEANINGFUL AND CONNECTS SO THAT INDIVIDUAL. HOW DO YOU BUILD AN EMOTIONAL CONNECTION OR A RATIONAL CONNECTION. WHAT IS DIFFERENT ABOUT YOUR BRAND VERSUS OTHER BRANDS AND HOW DO YOU MAKE SURE YOU ARE SALIENT AND RELEVANT THINKING ABOUT DIFFERENT OPTIONS. THAT IS REALLY IMPORTANT IN MARKETING TO CONSUMERS AND TO THE AGENTS. BUT THINK ABOUT THIS, A BRAND IS SO IMPORTANT. IF THE AGENT MAKES A RECOMMENDATION BRAND IS THE ONE THING THAT ALLOWS THE CONSUMER TO OVERTURN THAT AGENT. IF THERE'S A BRAND I'M USE TO OR WANT TO CONSIDER AND THE AGENT RECOMMENDS THREE THINGS I CAN SAY WHAT ABOUT THIS BRAND. HOW DO YOU THINK ABOUT THAT TELL ME WHAT YOU THINK ABOUT THAT ITS LOOK INTO THAT SO THAT'S WHERE BRAND IS SO IMPORTANT. IF THE AGENT DOESN'T RECOMMENDED IT'S A BRAND THAT GETS THE CONSUMER TO OVERRIDE. FRANCINE: HOW DO THESE WORK? IT'S A SECRET SAUCE AND SOME OF THEM WILL TELL YOU THE SOURCES OF WHERE THEY TAKE IT FROM. BUT AS SOON AS YOU CAN BREAK THE TRUST WITH THE CONSUMER. SO THE BRAND TRIES TO INFLUENCE IT THAT TRUST WILL BE BROKEN AND THERE WILL BE CONSEQUENCES. PAUL: THERE IS A WHOLE SCIENCE OF SETTING UP WHAT'S CALLED GENERATIVE OPTIMIZATION OF HOW YOU SET UP YOUR WEBSITE HOW YOU SETTABLE YOUR SERVICES TO MAKE SURE THEY CAN GET THE BEST INFORMATION. FUNDAMENTALLY IT COMES TO THE EXPERIENCE THE CONSUMERS HAVE AND WHAT THEY TALK ABOUT HOW POSITIVELY THEY TALK ABOUT YOUR BRAND AND HOW FREQUENTLY. AND THE LLM'S TAKE ALL OF THOSE SIGNALS AND USE THAT TO PROCESS AND MAKE A RECOMMENDATION. THEY TAKE ALL OF THOSE SIGNALS BUT THEN THEY THINK ABOUT YOU OR ME AS INDIVIDUALS. FRANCINE: THEY'LL BASE THEMSELVES ON A CONVERSATION ON REDDIT WITH THREE PEOPLE ON IT SO IT'S NOT REAL DATA OR IS IT? PAUL: IT IS REAL HUMAN DATA THAT THEY ARE USING, BUT THEY TAKE DATA FROM MANY SOURCES. BUT YOUR POINT IS RIGHT. YOU CAN JUST RELY ON THE OLD TECHNIQUES OF I WILL TAKE MY MESSAGE AND PUT IT OUT THERE YOU NEED TO THINK ABOUT ALL THE DIFFERENT COMMUNITIES AND ALL THE DIFFERENT ADJACENT COMMUNITIES THAT THE LLM'S TALK TO AND MAKE SURE THEY AREN'T INFLUENCING THEM AS MUCH AS WERE INFLUENCING CONSUMERS. FRANCINE: WHO'S GETTING IT RIGHT? PAUL: A LOT OF BRANDS. UNILEVER, COCA-COLA DID AMAZING THINGS AROUND THE WORLD CUP. AND WE CAN SEE IN THEIR PERFORMANCE BUT THERE'S ALSO THE BRANDS THAT GO BACK TO THE BASICS. AND THINK ABOUT HOW THEY CONNECT WITH THEIR CONSUMERS HOW THEY ESTABLISH A MEANINGFUL DIFFERENT RELATIONSHIP. THOSE OF THE BRANDS THAT HAVE CONTINUED TO OUTPERFORM. WE HAVE AN INDEX WHICH LOOKS AT BRAND VALUE, BRAND EQUITY VALUE AND THE BUSINESSES THAT GROW THEIR BRAND EQUITY VALUE HAVE OUTPERFORMED THE S&P 500 CONSISTENTLY OVER THE LAST 20 YEARS. FRANCINE: HOW WILL AI CHANGE THE ADVERTISING INDUSTRY IN FIVE YEARS? PAUL: IT'S ALREADY CHANGE THE ADVERTISING INDUSTRY. HOW IT WILL CHANGE OVER THE NEXT FIVE YEARS IS PHENOMENAL. IT IS GOING TO ALLOW US TO REALLY TALK TO INDIVIDUAL CONSUMERS SO THAT PUTS THEM AN IMPERATIVE ACROSS THE WHOLE INDUSTRY TO THINK ABOUT PEOPLE NOT AS BIG SEGMENTS BUT AS INDIVIDUALS TO UNDERSTAND WHO THEY ARE AND WHAT THEY ARE THINKING ABOUT AND THINKING ABOUT THE WORLD AROUND THEM AND TO TRANSLATE THAT INTO REAL DECISIONS. IT'S NOT JUST THE ADVERTISING. WHAT WE SEE IN THIS BRAND EQUITY RESEARCH IS 75% OF BRAND VALUE IN THIS REALLY MATTERS TO CEOS AND CFOS, A 75% OF BRAND VALUE COMES FROM THE ENTIRE EXPERIENCE THE CONSUMER HAS WITH YOU SO IT IS NOT JUST THE MARKETING AND MEETING AND COMMUNICATIONS. ITS DELIVERY THIS EXPERIENCE AND THE WHOLE THING. FRANCINE: THANK YOU SO MUCH FOR JOINING US PAUL. LET'S ALSO TURN TO A KEY MOMENT FOR SPACE X AFTER ITS IPO THIS SUMMER. THE STARSHIP ROCKET HAD ITS MOST POWERFUL EVER HAS REACH ORBIT FOR THE FIRST TIME. THE MISSION WAS NOT WITHOUT ITS PROBLEMS. BLOOMBERG'S AVIATION REPORTER JOINS US NOW. YOU LOVE SPEAKING ABOUT SPACE BECAUSE IT MAKES ME DREAM OF THE GREAT UNKNOWN AND THIS WAS CERTAINLY A MILESTONE FOR THE COMPANY. WHAT CHALLENGES TO THE MISSION FACE? DANNY: THE CHALLENGES BEING THERE WAS A BIT OF AN ENGINE PROBLEM ISSUE. THE FLIGHT REACHED ORBIT, IT DELIVERED ITS NEW PAYLOAD OF BRAND-NEW STARLINK SATELLITES. IT HAD TO CURTAIL ITS MISSION THREE HOURS INTO FLIGHT EXCEPT -- OTHER THAN THE 10 HOURS EXPECTED. ANALYSTS ARE NOT CONCERNED ABOUT THIS SMALL ISSUE IN THIS PAVES THE WAY FOR THE SPACEX AND ELON MUSK TO GENERATE MUCH MORE REVENUE OUT OF ITS STARLINK PART OF THE BUSINESS WHICH HAS BEEN A REAL CASH COW FOR SPACE X OVERALL AND WITH STARLINK BEING THE DOMINANT FORCE IN LOW-EARTH ORBIT SATELLITES AND THE KIND OF MARKET SHARE IT HAS IN THE AMBITIONS OVERALL THIS IS KEY WITH STARSHIP TAKING FLIGHT SUCCESSFULLY INTO ORBIT AND PARTICULARLY WHEN PEOPLE TALK ABOUT THIS ORBITAL DATA CENTERS AND SATELLITE KIND OF STYLING MOBILE. OF COURSE THIS HEAVIER ROCKETS TO SET UP SATELLITES INTO SPACE THAT WILL BE VERY IMPORTANT IN THE MONTHS AND YEARS TO COME. FRANCINE: TURNING FROM AVIATION -- FROM SPACE TO AVIATION, LUFTHANSA PREDICTING CHALLENGES. WHAT ARE THE MAIN WARNINGS FROM AI? DANNY: COMING BACK DOWN TO EARTH IS LUFTHANSA BEING CHALLENGED BY THIS FUEL REPRICE, HIGH OIL PRICES. MANY ARE FACING BUT FOR LAPHONZA ITS NAME BRAND HAS BEEN STRUGGLING WITH SHORTER FLIGHTS BEING A COST PROBLEM FOR THEM AS THEY DO EXTRACT OUT OF LONGER DISTANCE FLIGHTS AND AS A RESULT LUFTHANSA HAS THIS GLOOMY PICTURE IT'S PAINTING OF THE YEAR AHEAD OF 2027 GOING TO BE TOUGH WHEN IT COMES TO FUEL AND WITH THIS ALREADY PUNITIVE 1.5 BILLION EURO HIGHER FUEL BILL THEY ARE ANTICIPATING THAT'S GOING TO GET EVEN BIGGER. SO THIS IS GOING TO BE A REAL COMPLEX CHALLENGE IN THE COMING MONTHS INTO THE NEXT SEVERAL MONTHS AND YEAR. HOW THEY DEAL WITH THAT AS A CONTINUING OF THEIR RESTRUCTURING AFTER THE STORY CAME OUT WE HAVE SEEN SHARES IN LUFTHANSA DIP DOWN 1.2% OR THEREABOUTS. SO THE MARKET NOT TAKING TOO WELL TO THIS OUTLOOK. FRANCINE: NOT TOO WELL. DANNY THANK YOU SO MUCH. WITH THE LATEST ON SPACE AND AVIATION. WE DISCUSS SAFEGUARDS IN -- WHEN THE U.K.'S A PRIME MINISTER JOINS US NEXT. THIS IS BLOOMBERG. >> YES, WE NEED TO TRACE SERIOUS RISK TO NATIONAL SECURITY TO, PERSONAL DATA AND OUR CHILDREN’S WELL-BEING AND IT WILL CHANGE OUR LABOUR MARKET IN FUNDAMENTAL WAYS, BUT I GIVE YOU THIS COMMITMENT. WE WON’T LET AI LEAVE BRITAIN’S WORKERS BEHIND AND WE WILL MAKE SURE THAT BRITAIN FINISHES WITH THIS AI REVOLUTION. FRANCINE: THAT WAS U.K. CHANCELLOR TALKING ABOUT AI IN HIS SPEECH TO A LABOUR PARTY CONFERENCE. LET’S FOCUS ON THE UPCOMING SPEECH FROM PRIME MINISTER BURNHAM. LAST WEEK AT THE U.N., HE SAID THE COUNTRY WAS READY TO LEAD A GLOBAL PUSH ON AI STANDARDS. CAROLINE, YOU HAVE A VERY IMPORTANT GUEST. OVER TO YOU. >> ABSOLUTELY. GOOD MORNING. WE ARE BUILDING UP TO ANDY BURNHAM SPEAKING AT 2:00 P.M. JOINING ME NOW IS THE U.K.’S AI MINISTER, KANISHKA NARAYAN WHO JOINS US THIS MORNING. VERY BIG WELCOME TO BLOOMBERG RADIO AND TELEVISION. YOU HAD A SNIPPET THERE FROM THE CHANCELLOR JOHN HEELY. HE HAS BEEN USING A PROP. IS THIS A FUTURE, FORWARD FUTURE LOOKING GOVERNMENT WITH PROPS LIKE THESE? >> YEAH, IT IS. PLEASURE TO BE HERE. WELCOME TO LIVERPOOL AND THE LABOUR CONFERENCE. WE’RE INTERESTED IN THE HERITAGE OF BRITAIN IS WE THINK THE FUTURE IS CONSISTENT WITH OUR HERITAGE. WWWE WANT TO RAN INTO THE NEXT WAVE, AI, CHIPS, DRONES. >> THE WARNINGS OF RISK TO HUMANITY FROM AI. YOU TALKED ABOUT COUNTRIES HAVING TO HARDEN THEIR DEFENSES AGAINST AI RISKS. HOW ARE YOU PLAN DOG THAT FOR BRITAIN? >> THE FIRST THING I WOULD SAY THE BRITISH PUBLIC IS RIGHT TO BE CONCERNED ABOUT THE RISKS OF AI AS THEY ARE CONCERNED AND INTERESTED IN THE OPPORTUNITIES COMING TO BRITAIN AS WELL. IT IS SOMETHING I HAVE BEEN FOCUSED ON FOR A LONG TIME. WE HAVE TO MAKE SURE WE’RE LOOKING AT A GENERATIONAL UPLIFT IN DEFENSES IN THE PRIVATE AND PUBLIC SECTORS. UNDERSTANDING HOW WE USE AI TO DISCOVER VULNERABILITY. WE DISCOVERED 500 VULNERABILITY. BANKING LEADERS ARE DOING SAME AS WELL. USING TECHNOLOGY MAKE OURSELVES MUCH SAFER AND MORE RESILIENT. >> ANDY BURN SAID THERE IS A MULTIPLIER OF RISKS. >> WE HAVE SPOKE ON THE LABS FREQUENTLY ABOUT OPPORTUNITY FOR WRAP IT RISKS BEING MITIGATED FOR THE BRITISH PUBLIC AND BUSINESSES AS WELL. THE MAIN THING I WOULD SAY IS I’M GLAD IN THE WAKE OF THE CONVERSATIONS ABOUT RISK THAT THAT BRITAIN HOSTED LEADERS FROM THOSE COMPANIES SO WE CAN TAKE A LEADERSHIP ROLE IN MAKING SURE WE’RE STANDING UP TO THIS MOMENT, COMING UP WITH STANDARDS AND PRINCIPLES ACROSS THE WORLD TO KEEP US SAFE. >> WHAT TOOLS DO YOU HAVE TO PREVENT RISKS FROM AI? THE AI SECURITY EPPS CONSTITUTE IN THE U.K. DEPENDS ON VOLUNTARY COOPERATION. HOW CAN YOU GET THE U.K. MORE ACCESS TO THOSE MODELS WHEN THEY HAVE BEEN SHUT OUT IN THE PAST? >> THERE ARE TWO THINGS THEY HAVE AT THIS MOMENT. CAPABILITY. THE BEST LAB OF EVALUATING MODELS, UNDERSTANDING THE RISKS AND PROTECTING THE BRITISH PUBLIC. IN MOST CASES, WE HAVE HAD ACCESS, THAT WAS TEMPORARY DELAY IN ONE INSTANCE. MORE RECENTLY WE HAD HANG STOAS THE OPENAI MODEL. WE TRIED TO SHARE THAT WITH A CYBER SECURITY CENTER AND MITIGATE THE RISK AS MUCH AS POSSIBLE. IT IS NOT JUST CAPABILITY BUT TRUST. PUT YOURSELVES IN THE SHOVES ANY RANDOMLY PICKED COUNTRY IN THE WORLD SAND SHAY WHICH COUNTRY IS CAPABLE OF BEING TRUSTED AND CAPABLE JOINING A COALITION HOW THE PROTECT OURSELVES. I THINK THE U.K. WILL BE AT THE TOP OF THE LIST. >> HOW WILL YOU USE THE AI TO COORDINATE H WITH THE GOVERNMENT TO HELP JOB SEEKERS. THERE IS A 16% YOUTH UNEMPLOYMENT IN BRITAIN. >> AI HAS BIG OPPORTUNITIES IF TO CREATE A SENSE OF DIGNITY FOR YOUNG PEOPLE IN THIS COUNTRY. FROM BECOMING HAIRDRESSERS TO AI APPRENTICES BECAUSE AI ALLOWS US NOT TO JUST LOOK AT CERTIFICATE FICK HAITIAN BUT UNDERLYING SKILLS EACH ONE OF US HAS. TOO MANY ORGANIZATIONS ARE SEEING A GAP BETWEEN LEADERS TALKING ABOUT AI ADOPTION WITH A BUNCH OF HYPE AND REALITY AND DEPTH OF THAT ADOPTION. IMPLEMENTING TECHNOLOGY AND DESIGNING AI ADOPTION, WE HAVE A DEEPER COLLABORATION BETWEEN YOUNG PEOPLE AND FUNDS. >> HOW CAN YOU PLAN MORE QUICKLY? HAS THE HURDLE? >> WE HAVE TO MOVE FASTER IN GETTING SOME OF IS THIS DONE. BRITAIN NEEDS A SOVEREIGN LEVEL OF COMPUTE. WE HAVE TO ACCELERATE GRID FOR AI GROWTH. ACCELERATING PLANNING FOR AI GROWTH. HOLD INVESTORS HANDS AND GET THEM THROUGH PROCESS. WE HAVE TO DELIVER THAT IN PROCESS AND POLICY. >> THEY HAVE NOT ANNOUNCED ANY NEW AI GROWTH ZONES. HAS THAT BEEN DITCHED? >> WE ANNOUNCED FIVE MAJOR GROWTH ZONES. THE BIGGEST IN WALES, SCOTLAND. THE NORTHEAST AS WELL. GETTING THOSE PROJECTS GOING. THERE WILL BE MORE ANNOUNCEMENTS TO COME I’M SURE. >> STARGATE, OPENAI, IT WAS PAUSED BECAUSE OF FRICTIONS WITH GETTING PLANNING AND OTHER ISSUES. ANY CHANGE? >> IT WAS PAUSED IN NORWAY AND THE UNITED STATES. IT IS NOT BRITISH PLANNING SYSTEM. I THINK IT IS THE CORPORATE FINANCE SYSTEM. >> IN TERMS OF DATA CENTERS, WEEKEND OUT SPECTACULAR DATA CENTER APPLICATIONS. HOLLYWOOD VOTED FOR TOUGHER ENVIRONMENTAL OVERSIGHT. THERE ARE REAL RISKS THAT THE AI BUILDOUT COULD STALL. HOW CONCERNED ARE YOU? >> THE WE SEE THE TWO CASE -- THE -- TWO CASES. IN TERMS OF PUBLIC CONVERSATION, IT IS REALLY IMPORTANT THAT WE TAKE THE CONCERNS OF THE PEOPLE AND THE COUNTRY SERIOUSLY THE WAY WE BUILD DATA CENTERS HAS TO BE A SENSE OF CONTROL AND BRITISH VALUES. BUILDING SOVEREIGN CAPACITY BUT NOT OVERBUILDING. USE CAPITAL INVESTMENT AI TO DRIVE CAPITAL INVESTMENT AND ENERGY. MAKE SURE LOCAL COMMUNITIES GET A VOICE. >> OK. KANISHKA NARAYAN, THE AI MINISTER HERE IN U.K.. THANK YOU SO MUCH. FRAN, I THINK THAT IS A FANTASTIC INTERVIEW. INSIGHT INTO THE U.K.’S ATTEMPTS TO REMAIN A LEADER WHEN IT COMES TO ARTIFICIAL TENSION THE SECURITY INSTITUTE HERE IN THE U.K.. AND AHEAD OF ANDY BURNHAM’S SPEECH AT 2:00 P.M., THE U.K. PRIME MINISTER, HOW FUTURE FOCUSED IS HE GOING TO BE? ARE THERE GOING TO BE GIMMICKS? WHAT ARE WE GOING TO LEARN FROM THE NEW PRIME MINISTER? FRANCINE: SO INTERESTING. THANK YOU SO MUCH. CARE LINE WITH THE U.K. INTELLIGENCE MINISTER. GOLDMAN SACHS HAS DISCUSSED A PLAN FOR JOHN WALDRON TOP BECOME CHIEF EXECUTIVE NEXT YEAR. HE WAS GIVEN A RESTRICTIVE STOCK PACKAGE WORTH $120 MILLION TO STAY FIVE MORE YEARS. SO GOOD TO SPEAK TO YOU. THIS WAS -- WHEN YOU USE -- IN THE RUNG. THAT WAS RUMORED OR TALKED ABOUT IN THE CORRIDORS. WHAT DO WE ACTUALLY KNOW? >> WE DON’T KNOW A HUGE AMOUNT OTHER THAN WHAT IS IN IS GENERAL STORY AT THE MOMENT. WE ALWAYS HAVE THESE SUCCESSION DISCUSSIONS. THEY ARE A REGULAR THING. THERE IS NO SPECIFICS TIMETABLE. THAT MIGHT WELL BE TRUE BUT THOSE STORIES DON’T COME ABOUT OUT OF NOWHERE. IT MIGHT BE JOHN HIMSELF HAS BEEN PUSHING AGAIN TO SAY I WOULD LIKE TO JOB. GIVE IT TO ME OR I’M GOING SOMEWHERE ELSE. FRANCINE: IS IT TIME FOR DAVID SULLIVAN TO STEP DOWN? IT FEELS LIKE HE HAS BEEN IN A CHARGE FOR A LONG TIME BUT ACTUALLY NOT THAT LONG. >> EIGHT YEARS. A GOOD SPELL. I THINK IT WOULD BE A GOOD TIME FOR HIM TO MAKE THAT -- START THAT TRANSITION. I THINK THAT HE WAS QUITE A SHOCK TO THE SYSTEM AT GOLDMAN WHEN HE CAME IN AND HIS FIRST FEW YEARS. HE WANTED THE BANK TO BE A LOT MORE TRANSPARENT. HE DID FIRST INVOESTOR DAYS AND THEN HE ALSO BUILT ON WHAT LLOYD BLANKFEIN HAD DONE STARTING A CONSUMER BUSINESS SAYING THIS IS GOING TO BE A BIG PUSH TO GET MORE RELIABLE LONG-TERM REVENUE STRETCH, CONSUMER LENDING. THAT SORT OF THING. THAT ENDED BADLY BECAUSE OF SOME BAD ACQUISITION. THEY DIDN’T KNOW WHAT THEY WERE DOING WHEN IT CAME TO RUNNING CREDIT CARDS AND THEY HAD TO BACK OUT OF THAT WITH A LOT OF UNHAPPY PEOPLE AT GOLDMAN AND BILLIONS OF CARS IN LOSSES. FRANCINE: YOU HAVE SPOKE ON THE JOHN. HE HAS COME ON THE PROGRAM A FEW TIMES. DO WE HAVE AN IDEA WHAT KIND OF LEADER HE WILL BE? >> HE IS A SIMILAR BANKER TO DAVID SULLIVAN. THEY HAVE HAD SIMILAR CAREERS AND HAVE MOVED ALMOST IN TANDEM. DAVID SULLIVAN CAN BE VERY KIND OF -- QUITE GRUFF AND AGGRESSIVE IN THE WAY HE COMES ACROSS AND IN HIS MANNER. OBVIOUSLY HE IS H VERY DEMANDING. JON SCIAMBI WALDRON MANAGES TO KIND OF DO THE PEOPLE -- JOHN WALDRON MANAGES TO DO THE PEOPLE THINK. IN A WAY THAT IS I GUESS SORT OF PRETTY ATTENTIVE AND PRETTY -- DURING THE WHOLE SPELL WHEN THERE WAS UNREST AMONG THE GOLDMAN PARTNERS AND IT BEING IN THE WRONG DIRECTION HE WAS THE COMBINE THE BEHIND THE SCENES TALKING TO A LOT OF SENIOR PEOPLE VARYING MESSES BETWEEN HE AND SULLIVAN AND OTHER SENIOR MEMBERS KEEPING THE SHOW ON THE ROAD AND HOLDING IT TOGETHER. THOSE ARE THE KIND OF SKILLS THAT WILL BE DIFFERENT THAN THE NEXT LEADER. FRANCINE: WE TALK ABOUT AI AND TREASURIES, EVERYTHING. YOU LOOK AT THE TOP THREE WALL STREET BANKS. YOU HAVE BRIAN MOYNIHAN WHO HAS BEEN THEREIN THERE A WHILE. JAMIE DIMON AND DAVID SULLIVAN. IS SUCCESSION THE NUMBER ONE THING THEY NEED TO THINK ABOUT? >> I THINK SO. JAMIE OBVIOUSLY NOW HAS TWO KEY LIEUTENANTS WHO I THINK THE BANK MADE IT CLEAR IT IS GOING TO BE BETWEEN THOSE TWO WHO SUCCEEDS HIM AS CEO. HE FAMOUSLY HAD THIS LINE HE WOULD BE IN THE JOB ANOTHER FIVE YEARS BUT TWO YEARS AGO HE SUDDENLY SAID IT IS NOT FIVE YEARS ANYMORE. EVEN’S EARED PICKED UP. I THINK IT SEEMS LIKE HE WILL HAND OVER THE ROLE WITHIN THE NEXT THREE YEARS. I THINK HE WOULD LIKE TO STAY ON AS CHAIRMAN OR EXECUTIVE CHAIRMAN PROBABLY AS LONG AS THEY WILL HAVE HIM AS WELL. YEAH. IT IS GOING TO CHANGE THERE TOO. FRANCINE: A LOT MORE TO TALK ABOUT. THANKS SO MUCH. PAUL DAVIES. UP NEXT, "BLOOMBERG BRIEF." A FULL ROUND OF WHAT THE MARKETS ARE DOING TALKING AI AND ENERGY. THIS IS BLOOMBERG. ♪