29th Annual Milken Institute Global Conference Special: Day Two | Bloomberg Businessweek

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0:24 Carol Master Joe Matthew live here

0:26 at the Milin Institute global conference in Beverly Hills

0:29 with a very special guest that we want to welcome here to our set at Milin.

0:32 It's the former Treasury Secretary Steven Minutuchin.

0:35 Thanks for being with us, sir.

0:36 Good to be here with you.

0:37 We've got a lot we'd love to talk to you about,

0:38 but we've got breaking news that just went right

0:40 on the terminal right before we began the broadcast

0:43 and that is a proposal by the SEC

0:45 to go to semianual reporting or at least allow it.

0:48 And you can look at two different sides of this coin.

0:50 Do you think this is good for the markets?

0:52 Is it good for investors?

0:54 Well, I I support the proposal.

0:55 I think there's too many companies that are too focused

0:58 on quarterly earnings and whether they miss or beat expectations,

1:03 analysts expectations.

1:04 So, I I I think the idea of giving companies the option

1:07 of whether they want to do quarterly or semiannual is a good thing.

1:11 I mean, [snorts] I can imagine there are a number of companies,

1:14 particularly companies that are growing that are still going to be

1:18 interested in showing quarterly earnings

1:19 and showing their progress through the year.

1:22 But I think giving companies the option is a very good idea.

1:25 Does it do anything to kind of the global perspective

1:27 from investors about how US market is kind of the gold standard.

1:30 So transparent because of those quarterly reports and so much more

1:33 and some of the rules and regulations that really govern our companies here.

1:37 Well, there's no question the US is

1:38 the gold standard for companies to be listed.

1:41 It's the most liquid market in the world.

1:43 It's the largest and the largest economy and and I think

1:46 giving companies the options I think will continue to have transparency.

1:50 Do you think most of them will still stick to quarterly reporting?

1:52 My guess is some will switch and some won't.

1:55 I mean, as I said, if if you're a growth company,

1:58 you have every reason to want to show the growth every quarter.

2:02 If you're a company that's in turnaround and things are improving,

2:05 you're going to want to show it.

2:06 On the other hand, there are plenty of companies where, you know,

2:10 they're they're focused on a long long-term transition,

2:13 and I think giving them an option is a good thing.

2:16 Pretty quickly see two classes of companies when it comes

2:19 to reporting seasons of our world a little bit, but that's okay.

2:22 Your after hour sessions are gonna feel really different, Carol.

2:25 Um I But so I'd love to hear from you on this market

2:28 as a whole and the psychology that's confounding a lot of us.

2:31 As we mentioned already, it's rally time, Mr.

2:33 Secretary.

2:34 Oil prices are lower again today after the uh defense secretary

2:38 suggested that this effort in the strait would not go on forever.

2:41 That's all you need and we're back to buying on Wall Street.

2:44 Is this getting a little toppy or can you rationalize what you're seeing?

2:48 I think there's two things that are going on in the market.

2:51 One is that you have very large capex

2:54 spending and very large growth around [snorts] AI, around data centers,

3:01 around the cloud and that to me we

3:03 are still in the early innings of this transition.

3:06 There's no question that AI is going

3:07 to impact almost every business that we touch.

3:11 uh and that's something that's going to be a very positive way

3:14 but there's also going to be job issues and job implications on that.

3:17 The second thing we have going on is the US

3:20 is the destination of where people want to invest.

3:23 Um you know Europe's economy is is underperforming.

3:27 People are concerned about what's going on in Europe.

3:29 So the the the flow of funds into the US

3:32 dollar in particular into US equities is still very strong.

3:36 As I like to say, if you can take a 10-year horizon,

3:39 there's no better place than buying S&P 500s.

3:42 You know, I I if you're day trading,

3:44 that's a little bit of a different

3:45 issue trying to predict the short-term markets.

3:47 Steve, how do we figure out whether or not the spend in in terms

3:50 of data centers is just too much that there isn't some overspend ultimately.

3:54 You know, we were talking on a panel,

3:55 a real estate panel with folks who are all investing uh in data

3:59 centers talking maybe like do we need to have an exit strategy?

4:02 You know, we talk about data centers in space like this thing could evolve.

4:05 chips get more efficient.

4:07 So, is is it something that could be down the road but not

4:10 to worry about now or do we need to think about the overspend?

4:13 Well, I I'd say in the short term, you know,

4:16 the demand for compute is very strong

4:19 and you're seeing this across a number of companies.

4:23 I I'd say there's two different things.

4:25 You have open AI and Anthropic on the one hand who are going to consume

4:29 a lot of cash as they build out these businesses and then you have Microsoft,

4:34 Amazon, Google, Meta that all are cash machines and are

4:39 are building out both AI and are building out the cloud.

4:42 Um I I think the good news is if there's overspending in the next few years,

4:47 they they'll cut back.

4:48 So I don't think you're going to see the same trajectory.

4:52 I think the other issue is going to be

4:53 we're going to run out of power for data centers.

4:56 So I I I think it's people want to spend the money now,

5:00 get the data centers operating, and if they have to scale back over time,

5:04 I mean, some of these data centers,

5:06 particularly the training centers that have 15-year leases,

5:10 my guess is 15 years from now, they're dark.

5:13 The the cloud data centers will have tremendous growth

5:16 and will be around for the next 50 years.

5:18 Do you have exposure to the area?

5:20 We we spent a lot of time on the area where we're

5:23 we're we're long-term investors in what we believe are stabilized data centers.

5:28 Okay.

5:28 Do you worry that just to add on to that and I

5:30 think this might be where you're going a little bit,

5:32 Carol, that efficiencies uh whatever is going to be developing

5:37 in the next couple of years will render these massive data centers useless.

5:41 They could be the size of a phone booth at some

5:43 point or just a completely different to Carol's point in space.

5:47 Is this something that that has

5:48 a shorter timeline knowing that technology will evolve?

5:51 You know, if if you look back at data centers from 20 years ago in Virginia,

5:55 we're still using them.

5:56 Well, that's true.

5:57 So again, I separate training data centers.

6:00 You're going to need to train these models then you're

6:03 going to it's very different kind of the cloud native issues.

6:06 But just going back to the market, you know,

6:08 the the market is discounting kind of the geopolitical risk in my opinion.

6:14 So, you know, we don't really see the the market

6:16 is expecting we're going to have a good outcome.

6:19 I completely support President Trump and what he's doing in Iran.

6:22 I always said Iran getting a nuclear weapon is the biggest risk

6:26 in our lifetime and there's no question from my experience in the government.

6:30 They intended to do that.

6:32 um you know how how we play out from here is

6:34 a little bit more complicated and as you said we've seen a lot

6:37 of volatility in the oil markets and and the stock market is

6:42 is is really not discounting uh this going on for a long time

6:45 sounds like we're missing something here

6:48 I wouldn't say we're missing what I'd say

6:50 is hopefully we will have a good outcome

6:52 Iran will come to the negotiating table I

6:55 think the economic and the blockade the sanctions work

6:59 even if the straight reopen tomorrow though we've heard that it

7:01 could be months before energy flows are back to where they were.

7:05 Does the market have a reality check coming on that?

7:08 Um I I think it will take a while.

7:10 Having said that, there are such positive uh things going on in the economy

7:16 that I think to the extent this trade can open up relatively soon,

7:20 the economy will absorb those energy costs.

7:23 I want to ask you, you obviously were in the first administration.

7:25 and you have a better really probably

7:27 great understanding of President Trump and as we

7:30 say the markets can go from day to day based on the headlines.

7:32 It looks like it's a 180.

7:35 How should we be reading what the president is doing?

7:38 What do we need to understand?

7:40 Because do you feel like this is a different

7:42 Donald Trump's this second term versus the first term?

7:44 No, I don't.

7:45 I think there's there's a lot of similarities in it.

7:48 I I think on this issue and this is

7:50 an issue he's been focused on since the first term.

7:53 um he's determined and his legacy will be that he's

7:57 going to prevent Iran from getting a nuclear weapon.

7:59 And there's been other administrations that were,

8:02 you know, understood the risk but were concerned.

8:05 I also give Israel a lot of credit

8:07 because one of the concerns was all the ballistic

8:10 missiles and obviously the defense the the air

8:13 defense systems in the region have been very powerful.

8:17 Um, but no, I think this is a president

8:19 that would prefer not to go to war with them again,

8:22 but will if he needs to.

8:24 But this is could go could it we be

8:26 still talking about war at the end of the year?

8:29 I I I think we could.

8:30 I mean, I think he's determined that he

8:33 prevents this from happening the the nuclear situation.

8:37 And I think that part part of the issue is and and he said this, you know,

8:42 he took out a lot of the leadership.

8:44 So part of this is making sure that leadership develops

8:47 in Iran that can negotiate a deal that they'll stick with.

8:50 What's the other geopolitical?

8:52 Cuz you say geopolitical.

8:53 Is it just the Middle East?

8:54 Are you thinking about China?

8:56 Are you thinking about other parts of the world?

8:58 No, I I think it's it's I mean there is this war in Ukraine.

9:01 I don't want to forget what's going on.

9:04 That's still an important issue.

9:06 I feel like we don't see it on the press every day.

9:09 But obviously the big issue right now in terms of risks

9:12 for the economy and risks for the world is the Middle East.

9:14 You know, there's another cloud u you could argue is hanging over

9:18 this market that has nothing to do with the war in Iran.

9:20 Although maybe there's a connection at some point when

9:22 we start talking about the cost of this operation,

9:25 but that's the debt now topping 100% of GDP.

9:29 Mr.

9:29 Secretary, how long can we sustain this?

9:32 Hank Pollson uh mentioned to David Weston the need for a break glass solution.

9:37 What should the Treasury be preparing at this time for this?

9:41 Well, I unfortunately think there's not a break the glass solution.

9:46 Um, you know, I think there's no question that during

9:48 CO we had to spend massive amounts of money.

9:52 We shut down the economy.

9:53 I mean, anybody who ran a business

9:55 never ran it thinking you'd have zero revenues.

9:58 You know, I'm particularly proud of we saved the airline industry.

10:02 So, we have a very robust airline industry.

10:05 Um, having said that, well, no, but we we we saved the industry overall.

10:10 And I think it was I think it was

10:11 the right thing to let Spirit go through what they are.

10:14 Um, having said that, it kind of normalized trillion dollar spending,

10:19 and I think this is an issue that needs bipartisan support.

10:23 Um, you know, part of it is the the the mandatory spending.

10:27 Uh, we have to deal with that part of the budget.

10:30 And you know, you also

10:32 defense too though, if you look at what's being

10:34 allocated for defense in this budget, it's a lot.

10:36 Look, there's no question, particularly in this day and age,

10:39 we need to spend more money in defense.

10:42 I think right now it's going to be hard to spend another $500

10:45 billion in defense without significantly cutting other

10:49 things out of the the the budget.

10:52 So, I I am concerned about deficits.

10:54 I think this has to be dealt with.

10:56 And I think the good thing is President Trump understands these issues

10:59 and if there's someone who can tackle the the the spending issues,

11:03 I think he's the one to do it.

11:04 Does this mean I mean what's the makeorb breakak moment?

11:08 Because I'll go back 10 15 years.

11:10 We were talking about concerns about the deficit

11:12 or more and then it kind of faded away.

11:14 So what is the makeorb breakak moment?

11:15 And I I think about this in the context

11:17 of Kevin Worsh coming in as the next Fed chair,

11:20 you know, um in terms of servicing the debt and so on and so forth.

11:23 Pressure that might be on him.

11:25 um kind of roll it all together.

11:27 Do you think he that he should be cutting rates in this environment?

11:32 Well, I I think we're close to the equilibrium rate.

11:35 So, before the situation in the M East,

11:39 we did have inflation coming down close to the Fed's 2% target.

11:43 And I I think you could say the equilibrium

11:46 rate is probably between 2 1/2 and 3%.

11:49 So, we're we're close to that level.

11:51 Also, there's no question that the deficits push up our cost

11:55 of funding so that there's a risk premium built in.

11:59 And one of the things that Kevin is talking about,

12:01 which I also support, is shrinking the Fed's portfolio.

12:04 Well, if you shrink the Fed's portfolio,

12:06 that's also another tool that you don't have to to to lower rates.

12:12 Ultimately, the Fed does short-term set short-term rates.

12:16 if if they're not doing quantitative easing,

12:18 which they're not going to do now, they're not setting long-term rates.

12:22 I mean, and I don't think we're going to have a make or break

12:25 moment where one day we wake up and we can't finance the debt.

12:28 I I do think you'll see an increase in risk premiums.

12:32 I mean, you see the the 30-year bond kind of approaching, you know, kind of 5%.

12:38 Um, part of that is the volatility around

12:41 inflation and what's going to happen with the war,

12:44 but part of that is also just pushing up the cost of long-term financing for us.

12:49 What's Kevin Worsh in for when he wakes

12:50 up in the morning and looks at Truth Social?

12:52 Is this contentious relationship with the chair,

12:54 if he's not cutting, going to continue?

12:57 Um, I I I think Kevin will do terrific in his new job.

13:01 Okay.

13:01 Is that a yes or no?

13:02 No, I [laughter] I I I I think he he he he will be an independent Fed.

13:07 That doesn't mean that he he he will or won't agree with the president.

13:11 Now look, part of it is where interest rates are depend on the economy.

13:14 If we continue to have a very strong economy,

13:18 we're not going to need to cut rates.

13:19 If for whatever reason we go into a recession, we will have 1% rates.

13:23 So, I mean, we had zero rates in CO, you know,

13:27 there was a reason why they went down to zero.

13:29 Hey, we can't leave without talking about Lionsgate.

13:32 I think you guys have about a 13% position.

13:35 What's your plan with Lionsgate?

13:36 What do you want to do?

13:37 It's a It's a great business.

13:38 Uh I've recently gone on the board.

13:41 Um Lionsgate is one of the few independent studios left.

13:44 It has an incredible film library and uh Michael's been a great success.

13:49 So the story Michael Jackson I I can't comment on that.

13:54 Well, so let's wrap with one some one fun question about the movies.

13:57 Michael is

13:59 an incredible debut.

14:01 uh looks like it's across the board when it comes to demographics,

14:03 and we're in a world where consumer sentiment is pointing lower.

14:06 Their worries about consumer spending, the price of gas,

14:09 but they're lining up for that movie.

14:10 What does that tell us about that?

14:13 It it shows you that when you have the right content,

14:16 people still want to go to the movies.

14:17 It's not just about sitting at home and watching it on TV.

14:21 And you know, Michael Jackson was just an incredible performer.

14:23 And his music was obviously pretty extraordinary.

14:26 on my playlist.

14:27 Got to be on the movie.

14:28 You know, we we all remember growing up with MTV and Thriller.

14:31 It's not just old folks going like you said.

14:34 Exactly.

14:34 Who's a hold?

14:35 Not Not you.

14:36 20 seconds.

14:36 Do you miss the administration being inside?

14:38 It

14:38 It was an experience of a lifetime.

14:40 Um I couldn't be happier that I did it.

14:42 I'm proud of what we did.

14:43 I'm enjoying being on the outside and rooting for them.

14:46 Well, we certainly enjoyed having you here.

14:48 Thank you so much.

14:48 Really appreciate it.

14:51 Stay with us on Balance of Power.

14:52 We'll have much more coming up after this.

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15:15 Amos Hawkstein is with us here at Milin.

15:18 We should remind everybody we're in Beverly Hills today,

15:20 which is a bit different, at the Milin uh Global Conference.

15:22 of course former Middle East senior adviser to President Biden and a lifelong

15:26 diplomat with a real sense of nuance when it comes to the energy markets.

15:29 Amos, it's great to see you.

15:30 Welcome back to Bloomberg.

15:32 Thank you.

15:32 It's always good to be here.

15:33 Many questions about how we rationalize what we're seeing right now.

15:36 The fact that oil is lower by simply even though Iran is shooting at ships,

15:41 but one statement from the government that the ceasefire

15:44 remains in place and we're selling oil today.

15:46 Is that the move?

15:48 Well, two things.

15:48 One, remember that we're saying that oil is lower.

15:51 Yes, was at 110.

15:53 Well, that's right.

15:53 We're so double digits.

15:54 So, one, we're at 110 at the start of the year.

15:56 [laughter]

15:57 It was 60.

15:59 60.

15:59 So, we're basically almost double where we were.

16:02 And we're talking about Nobody thinks of 110 ever as a low oil price.

16:05 Well, that's fair.

16:06 That is a very high oil.

16:07 Directionally speaking, though, but but here's what's happening.

16:10 The market really wants to rally.

16:13 They don't like bad news.

16:15 Mhm.

16:15 The stock market.

16:15 The stock market.

16:16 Totally.

16:16 The stock market.

16:17 The physical market and the stock market are divergent at the moment.

16:22 We may get convergence at some point.

16:24 We probably will be.

16:25 We don't know if the convergence will be when the stock market realizes

16:29 where the real physical market actually is or that the war actually ends.

16:34 We have an opening and then the physical

16:36 market will go to where the stock market is.

16:39 But they are not in the same place.

16:40 $110 of Brent oil is only available on a Bloomberg terminal.

16:45 I know where you're going.

16:46 You can't buy that barrel.

16:47 That barrel of rent oil is selling for 150,

16:51 145, some days 155, even 170 demand, right?

16:56 Because it's only paper.

16:57 It's people on Wall Street.

16:58 The real market,

16:59 the real market right now is that there is no not enough oil.

17:03 We're in a demand destruction in certain countries,

17:05 but they're poor countries first, so stock market doesn't care.

17:09 So, we are in a place where every day that goes by now with fake headlines.

17:15 And what happened today at the Pentagon is fake headlines.

17:18 We're not in really in a ceasefire because missiles are flying.

17:21 That's usually the definition of a ceasefire is

17:23 missiles don't fly two days in a row.

17:25 We don't have a ceasefire in Lebanon because we still have

17:27 fighting in Lebanon despite the fact that we say it's a ceasefire.

17:31 And tankers are not moving despite the fact

17:33 that we have government officials say they are moving.

17:36 They're not.

17:37 M

17:38 so that means that there is no tankers

17:40 on the water going to Asia going to Europe

17:43 none zero and so that is going to that that bite will have will deepen every day

17:51 okay so [laughter] I guess I don't know how do you then

17:54 look at things longer term because I think what most folks are also

17:57 thinking off of this war that things are going to be changed forever

18:00 in terms of people thinking about we talked about this yesterday about count's

18:03 access to strategic um commodities whether it's oil whether it's you know

18:09 really ensuring that their supply chains are solid that they can't be disrupted

18:13 and that means a lot of domestic production that means probably higher costs

18:17 around the world it feels like it's

18:18 a very different global economy going forward

18:21 so I think that's should we prepare for that

18:24 I think we will prepare for that and in fact some of it is already happening

18:28 so this is similar to two other events one

18:30 is the 1970s which led us to build a strategic

18:34 reserve created the IEA the International Energy Agency structures

18:39 of the energy market were different moving forward after the 1970s.

18:42 They were very different before changed forever.

18:45 Co changed how we think about supply chains.

18:49 We suddenly got shocked by the supply chain which is why we started stockpiling.

18:53 We started thinking about making sure that we

18:56 didn't live on you know one supplier etc.

18:58 And now what's going to happen is the straight

19:00 of Hormuz is under Iranian control forever basically

19:02 for the foreseeable future regardless of nobody in the market

19:06 should look at what the deal says eventually

19:09 and believe it on straits.

19:10 Iran will control the straits.

19:12 Everybody in Washington may will believe it.

19:16 Nobody in the Gulf, no one in the Gulf will believe.

19:19 They know the Iranians are not going to control this.

19:21 What does that mean?

19:22 It means you got to change Carol what you said.

19:24 You got to build out infrastructure that does two things.

19:27 one bypasses the straight of Hermoose.

19:31 It's possible to do.

19:33 Yeah,

19:33 it's not even that expensive.

19:34 A few billion dollars,

19:35 but a few billion dollars in what we're talking about doesn't cost very much.

19:38 The redundancy is is important.

19:40 Second, build out more storage facilities in destination countries.

19:44 So, we already have some storage in places like Singapore,

19:47 but build them build them out in Tokyo,

19:49 in Delhi, and China already has not just of oil, but of jet fuel.

19:54 airport should probably hold a little bit more jet fuel uh capacity.

19:58 Just ask Cliff Tanza who's cancelling flights for the summer.

20:01 Exactly.

20:02 Uh not just them.

20:03 I think everybody if you're if you're if you're an American

20:05 listening to this and you think you're going on vacation

20:08 uh this summer, plan for a very very expensive one.

20:11 Driving is going to be very expensive

20:14 and so will RVs.

20:15 RVs will be even more expensive because diesel

20:17 is through the roof and jet fuel is

20:19 Can I ask you why this is happening right now?

20:22 If it was President Biden and you were advising him, you know,

20:26 were you guys pushing to do something to this effect in Iran?

20:30 They have been a threat for how many decades, right?

20:34 There look, we used to joke whenever people come and say, "Oh my god, we're

20:37 But we've had we've had people come on and say, "Listen, this was long overdue.

20:40 It was time to do something.

20:41 We knew this was a country that hated America."

20:45 Yes.

20:45 Uh, by the way, they're not alone.

20:46 If we're going to war against every country that hates America,

20:48 then there's a list uh that we may have to go

20:51 to war for a few more months, a few more years.

20:54 Uh North Korea is not funny actually.

20:56 North Korea is doing a lot on nuclear.

20:58 Uh they hate America.

21:00 We're not going to war there.

21:02 Iran is a place where we first of all,

21:04 we had a deal with Iran to not go to nuclear weapon called the JCPOA in 2015.

21:09 President Trump got out of that in 2019.

21:11 uh probably should have stayed in because the deal we're talking about

21:14 now that we will get is going to be very similar to that.

21:17 There'll be some cosmetic changes.

21:19 It'll be very similar.

21:21 We didn't have to do this war.

21:23 I understood some of the rationale of the June war several months ago.

21:29 They were cheating on the nuclear side.

21:31 If they're not going to go back into a deal,

21:32 a limited strike and the Iranians didn't

21:35 strike back and the proxies didn't strike back.

21:37 They didn't close the straits.

21:39 It was limited in scope.

21:40 it was limited in time.

21:42 Uh, and so I understood that this war was a moment of opportunity.

21:47 There were a lot of protests that were rising up and President Trump said,

21:51 "Help's on the way." And all of a sudden got painted into the corner

21:55 and then started coming up with reasons why we're in this war.

21:58 Nobody really knows why we're in this war.

22:00 No American really knows why we're in this war.

22:03 I don't even think Yeah.

22:04 But we hear the [clears throat] matter from the administration every day.

22:07 But they change.

22:08 You mentioned storage though.

22:09 I want to ask you about what's about to happen in Iran when it comes

22:12 to their own oil storage because there's nowhere to put the oil at this point.

22:16 They're loading tankers almost.

22:18 They're putting oil supposedly on trains to China.

22:21 The president says the whole underground infrastructure is going to blow up,

22:24 which I'm not sure is true.

22:26 But if they have to start shutting wells,

22:28 that's going to be a pretty major uh moment

22:30 and something that could happen in days or weeks.

22:32 Do you Well, first of all, it was supposed to happen already several days ago.

22:35 So that's not So it didn't happen.

22:37 Here's the thing.

22:38 I I cuz I've dealt with there there is real economies of oil where you look

22:41 at the Baker Hughes manual of what do you

22:44 do in this situation and there's wartime and stress time.

22:47 They're very different.

22:48 Mhm.

22:49 I was spent I spent a lot of time in southern Iraq trying to help them refix

22:52 and so and if you went down there no manual told

22:55 you to do what they were they should have been shut it

22:57 there is a way Iran is a very good engineering country they

23:02 have remarkable engineering talent they've been in the oil business 100 years

23:06 they know what they're doing

23:08 when we did the I was in charge of the sanctions 15 years ago so 2012

23:13 and we took them down to like 900,000 barrels of of exports

23:17 And instead of doing all of what President Trump suggests,

23:20 you know, things blowing up and just shutting everything down,

23:24 there are ways for them to do wartime economizing, right?

23:27 So, you shut down one field, do some maintenance on it,

23:29 then you bring it back, you shut down the next one.

23:31 You can do a rotation.

23:33 You can put you can set fields on fire, uh, which is a by design,

23:38 which doesn't put any pressure on the pipes below ground.

23:42 I don't expect to see any explosions.

23:43 They are hurting economically.

23:45 They are devastating economic pain in Iran.

23:48 And yet here we are still at war with them.

23:50 This is I mean they can handle the pain.

23:53 I'm just saying they can handle the pain.

23:54 And their view is how long can you handle the pain?

23:58 And I'll tell you this, we're going towards a cliff

24:03 on oil and oil products by the end of this month.

24:06 Physical shortages.

24:07 We have physical shortage already, but it just in countries we don't care about.

24:13 Okay.

24:12 So then they they will right because they're poor.

24:15 But then it go in countries like Vietnam and then it goes

24:18 to Japan and Korea and then it say we have jet fuel okay can't take it with you

24:28 when you fly out you got to be able to refill somewhere else

24:31 it's already making its way through manufacturing

24:32 supply chain like you are feeling it

24:34 ask the airlines when AI spends a lot

24:37 of money hundreds of billions of dollars which is not

24:40 dependent on consumer but they're not dependent on consumer

24:43 what happens when consumers say I can't spend this.

24:45 I I have no money.

24:46 Amos, thank you.

24:47 It's great to have you on Bloomberg.

24:48 I hope Milk and treats you well.

24:50 Alongside Carol Master, I'm Joe Matthew.

24:52 This is Balance of Power live from LA.

24:54 Only on Bloomberg.

24:56 You're listening to the Bloomberg Balance of Power podcast.

24:59 Catch [music] us live weekdays at noon and 5:00 p.m.

25:02 Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

25:06 Listen on [music] demand wherever you get

25:08 your podcasts or watch us live on YouTube.

25:13 here at Milkin on the geopolitics [music] of supply

25:15 which of course is something that we talk

25:16 about just about every day here but interesting

25:19 to hear from voices around the world those were

25:20 business owners and executives uh operating in the Middle

25:24 East operating in Asia and they each

25:25 have a slightly different angle on this although

25:27 it's a it's a common thread throughout this conference

25:29 I feel like the supply chain grab is on and some

25:32 people in some countries are certainly better positioned than others

25:35 supply chain grab we should have called the family [laughter] I like that

25:37 all right I'll work on it hey we're going to do a little bit of a um

25:40 a switch to something that's actually top of mind

25:43 because we have PayPal out today planning job cuts.

25:45 The new CEO is really pursuing kind

25:47 of a massive turnaround strategy at this company.

25:49 They're going to make Venmo a standalone unit.

25:51 But we think about these payment companies, Joe,

25:53 that I don't know about you, but I'm using mine all the time.

25:56 Kind of this concept of digital money.

25:58 Um we want to see what uh Denise Lean Hart has to say.

26:01 She's the chief of Zel.

26:02 Um I use Zel a lot.

26:03 Uh she's here at Milkin.

26:04 You're very welcome.

26:06 Um tell us about this because this is a consortium of banks

26:09 that are involved in it and it's kind of direct to bank-tobank transfer.

26:12 Um tell us about your world,

26:14 what you're seeing in terms of activity on the platform

26:16 and what it kind of tells you about our economy.

26:19 Yeah, so we are owned by a consortium of seven of the largest banks,

26:22 but we actually have a network of 2400 financial institutions.

26:25 So that's everything from the largest bank in the United

26:27 States to those small community banks and credit unions.

26:30 And those are really important to us.

26:32 And we have 160 million accounts on the platform.

26:35 that includes consumers as well as small businesses.

26:38 And in December, we actually had 100

26:40 million of those accounts were actually active.

26:42 So during that holiday season,

26:44 100 million C customers in the United States were actually using Zel,

26:48 which is pretty typical or was that?

26:49 Yeah, it's actually pretty typical.

26:51 And we're just and we continue to see

26:53 this increase in terms of digital payments.

26:55 So we had $1.2 trillion moved on the platform last year.

26:59 So that's larger than the GDP of Switzerland, like to put that into context.

27:04 and we're continuing to grow at 20% year-over-year.

27:07 So, we just continue to see more and more people move away from cash,

27:10 move away from check, and go to these digital payments.

27:13 You just had uh I believe your second consecutive trillion year.

27:20 Exactly.

27:19 Um where do you find growth from here?

27:21 I know that you're working on uh potentially

27:24 having an opportunity for people to pay their mortgages,

27:26 to pay their rent, recurring payments like

27:28 this that might make your life a little bit easier.

27:30 Is that the next opportunity for Zel?

27:32 It is.

27:33 So when we talk about the value proposition of Zel,

27:35 it's exactly how you described it.

27:37 It's moving from one account to another account and being

27:40 able to do that quickly and safely and securely.

27:43 So what we want to do is actually just open up

27:45 more use cases for people to be able to use Zel.

27:47 So that includes small businesses.

27:49 It includes we have a currently a pilot

27:51 with bill pay with our friends at Truist.

27:54 We also have a pilot for donor adise funds in order

27:56 to get into the charity space with Bank of America.

27:59 So we're continuing to pilot these and we're

28:01 hoping to expand them and expand our roadmap.

28:03 You just want more and more people on the platform.

28:05 More and more people and also thinking about us more and more often.

28:07 Do these where's the growth?

28:08 You know, you talk about bill pay,

28:09 you talk about donor advice, you talk about small business.

28:11 Where's the growth?

28:13 Yeah, I think that there's growth in all of it actually.

28:15 So it's act it's just that recurrence and using us continually to make all

28:19 those different payments to people or to small

28:21 businesses that you know and trust.

28:22 Can you tell us in terms of data?

28:24 I mean everybody's got lots of data, anything that's digital.

28:26 So what can you tell us about the types of payments and it

28:28 does it give you any indication about the health of this economy?

28:32 It feels pretty good.

28:33 We talk about the market going up but we know

28:35 the market isn't necessarily what is going on in the broader economy.

28:38 So on the platform itself we continually see this increase of overall payments.

28:42 So again 20% year-over-year but what we're also

28:45 seeing is this boom in terms of small businesses.

28:47 So 30% of our volume is small

28:50 businesses and that's actually our fastest growing segment.

28:52 So part of the reason why small businesses love Zel

28:55 is because they get their money almost immediately and then

28:58 they can be able to pay their workers or they

29:00 can be able to go out and buy supplies instantaneously.

29:03 So it's that quickness of payments that people love.

29:06 Is your sort of long-term vision or your dream a cashless society?

29:12 Well, when's the last time you went to an ATM?

29:14 I don't know about you [laughter] already.

29:16 They do.

29:16 They got rid of the pennies.

29:18 They did.

29:18 They don't make them anymore.

29:19 I keep finding them in my pockets, though.

29:21 Could you try to remind my my daughter there is actually money under

29:24 I feel silly sometimes.

29:25 I don't remember the last time I I carry cash but there are a lot

29:27 of people that do and I guess I mean is that the goal where cash is useless?

29:31 I mean the goal for us is to more and more digital payments.

29:33 It's more safe.

29:34 It's more secure and it's also more convenient.

29:38 Um what is does the structure stay just as you know multiple bank ownership?

29:43 Is it something that this is a company that could essentially go out on its own?

29:47 I think would that make sense?

29:49 it will stay in the current ownership structure.

29:51 It's actually fun to be part of this ownership structure

29:54 because you get the best payment minds in a room often

29:58 and really thinking about the innovation as the entire ecosystem moving forward.

30:02 Yeah, it's kind of fascinating uh to see that.

30:04 Um thanks so much for stopping by.

30:07 Another snapshot of what goes on here at Milk and Denise Lehart.

30:10 She's chief of zel joining Joe and me.

30:13 Stay with us on Balance of Power.

30:14 We'll have much more coming up after this.

30:19 You're listening to the Bloomberg Balance of Power [music] podcast.

30:22 Catch us live weekdays at noon and 5:00 p.

30:25 p.m.

30:25 Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

30:29 You can also listen live on [music]

30:30 Amazon Alexa from our flagship New York station.

30:34 Just say, "Alexa, play Bloomberg 11:30."

30:38 We are back here at Bloomberg Institute uh Bloomberg uh the Milkin Institute.

30:42 Boy, did I just tell them that I just renamed it?

30:45 Well, we could maybe work on that for next year.

30:47 We could do milk and milk [laughter] Carol

30:50 Mass and Joe Matthew here in Beverly Hills.

30:52 One thing we talk about a lot and we've spent some time

30:54 uh talking about the energy space over the course of this program.

30:57 Almost Hawkstein painted a pretty bleak picture.

31:00 Uh we also talked a lot about data centers

31:02 and these two stories come together in a way

31:04 that has reinvigorated the conversation about nuclear uh

31:07 in a way that nobody could have really predicted.

31:09 We talk about it with uh experts in the industry, the need for more power.

31:12 We talk about it with lawmakers who are trying to find a policy

31:16 path and our next guest uh can speak to all of this.

31:19 Maria Corsnik is the president,

31:21 chief executive officer of the nuclear energy institute,

31:25 the trade group uh for the nuclear industry.

31:27 It's wonderful to see you.

31:28 I'm sure you've been awfully busy at Milin.

31:30 This is a conversation a lot of people are trying to get close to.

31:33 Whether it's uh the small modular reactors

31:35 that could end up landing around data centers,

31:38 whether it's actually taking old decommissioned nuke plants

31:41 out of the mothballs and putting it back online.

31:43 When do we start actually building

31:46 and seeing approvals when these projects are proposed?

31:50 Well, we're doing that already, right?

31:51 So, you have the Terrap Power uh

31:53 had their construction permit approved out in Wyoming.

31:57 uh they're beginning uh construction uh they're

31:59 building actually in um Canada the GE Vernova first uh SMR for that it's

32:05 about 300 megawatts and then down in Tennessee

32:08 uh the Chyros power uh test reactor is under construction uh as well so

32:13 we have actually you know transitioned from just

32:15 some great ideas to uh actual construction

32:19 when does nuclear though become something really significant in the United

32:21 States in a country where we know there's a lot

32:24 of neighborhoods a lot of areas that just don't want

32:26 to have any kind of nuclear facility in their in their area.

32:30 Well, we're 20% of the electricity sector today.

32:33 So, I would say nuclear is already making a difference and uh honestly,

32:37 we're not hearing uh the push back

32:39 that you're mentioning for local communities anymore.

32:41 One of the latest uh polls uh showed greater

32:44 than a 60% uh favorability rating for nuclear and climbing.

32:48 And I think part of that is what you mentioned,

32:50 it's the data center conversation.

32:52 Data centers are looking for really reliable energy.

32:55 They'd like it to be clean.

32:56 Nuclear is here to help.

32:58 Uh and so you're going to be seeing first

33:00 of all extending the lives of plants we have.

33:03 Started out 40, we got it to 60.

33:05 Have over about 25 plants approved for an 80year life.

33:09 Okay?

33:09 So what you have is going to last longer.

33:11 Uh what you have can make more power.

33:14 So 3/4 of the fleet are going to do power upgrades.

33:17 That's going to bring fiveish to six gawatts of new power to the grid.

33:22 And that can be shortterm.

33:24 Are are the the near-term solutions small

33:27 modular reactors or should people uh get used

33:30 to seeing large plants like we used

33:32 to at just a different scale in the old days?

33:35 Yes.

33:35 All of the above.

33:38 Okay.

33:38 [laughter] Then do you want an SMR on your property?

33:40 Yeah, it might.

33:41 Um so there's a couple different things.

33:42 If you're a data center, you need that power constant constant constant, right?

33:46 They don't want to have that as well.

33:48 Could be off the grid.

33:50 But because of the high reliability that you want,

33:53 you might want to have a couple of small packages rather than one large package.

33:57 If you're a really big data center, you might want several large packages.

34:00 Uh so I think it depends on your solution,

34:02 but it's literally all of the above from the large gigawatt size

34:06 to the medium size to the even really small we call a micro reactor.

34:10 So think less than a megawatt even.

34:12 Uh and so you're going to be able to look at nuclear

34:15 as a solution set in ways that you just never thought before.

34:17 You mentioned the SMRs though.

34:19 Do we really have a viable design and it's happening?

34:23 Cuz I feel like we've been talking about it.

34:25 So, how long though before those are actually in use in production?

34:28 So, one's in construction in Wyoming, one's in construction in Canada.

34:32 You just heard X Energy within the last two

34:34 weeks uh do their IPO raised over a billion dollars.

34:38 That's an SM.

34:39 And when are they up and running?

34:40 What are you hearing?

34:41 So, early 2030s, I think, for that design.

34:44 Um, but the GE design I think is uh talking about being online in 2030.

34:48 Uh, and same for uh the Terra Power design.

34:52 When you guys ask Americans if they're comfortable with it, I mean,

34:55 is it because they're is it against the backdrop of higher electricity prices

34:59 because I think Americans are feeling so squeezed and is that where they say,

35:03 "Okay, if that's what's going to make it less expensive for me, I'm in."

35:06 You know, it's a combination of things.

35:08 Do you want energy security?

35:09 Nuclear has that.

35:10 Do you want it clean?

35:11 Nuclear has that.

35:12 You want it reliable, nuclear has that.

35:14 I mean, the value proposition broadly for nuclear,

35:17 and it's not just here in the United States, it's around the globe.

35:20 What do you need from Washington?

35:21 What do you need from policy makers to continue the growth?

35:24 It's still hard to go first.

35:25 So, one of the things that we're asking

35:26 for from a legislation perspective is what called the Ark Act,

35:30 which is something that's going to help the government lean in on a little bit

35:34 of those first-of-akind risks just to help

35:36 those get ameliated so you can move right in.

35:39 The other thing is we got some energy credits,

35:41 the tax credits, and they're wonderful.

35:43 They're a couple of tweaks.

35:44 Would like to opt out of normalization to let you get that tax credit faster.

35:49 Um, and some transferability.

35:51 And both of those are in legislation that's on the hill now.

35:54 All right.

35:54 Interesting stuff.

35:55 We didn't talk about nuclear waste, which is always an issue, too.

35:58 [laughter] Next time.

35:59 I'm going to leave it there.

36:00 Maria, though, thank you so much because I

36:02 do feel like when we talk energy, you're right.

36:04 Everybody's saying we need it all in order to power.

36:06 Maria Cororsik, Nuclear Energy Institute CEO, joining us right here at Milkin.

36:12 You're listening [music] to the Bloomberg Balance of Power podcast.

36:16 Catch us live weekdays at noon and 5:00 p.m.

36:18 [music] Eastern

36:19 on Apple CarPlay and Android Auto with the Bloomberg Business App.

36:22 Listen on demand wherever you get your podcasts

36:25 or watch us live [music] on YouTube.

36:29 Thanks for being with us on what we'll call a special

36:31 edition of Balance of Power here at the Milk and Global Conference.

36:34 Take special.

36:34 We'll take special indeed.

36:36 Well, Carol Master's with us.

36:37 It's got to be.

36:37 I'm Joe Matthew as uh you just heard uh

36:40 live at Milk and and it's been an interesting

36:43 conversation today that we want to continue uh

36:45 here by going to the top of the mountain with the face of American business.

36:49 I have to Exactly.

36:50 And I feel like all the conversations we've had

36:52 lead up to this whether we talked about energy,

36:54 higher cost, inflation, supply chains, geopolitics, politics in Washington.

36:58 Suzanne Clark is with us.

36:59 She's president and CEO of the US Chamber of Commerce.

37:02 um a great voice when it comes to what's

37:04 going on in the in the business community.

37:06 What is top of mind?

37:07 Because the laundry list of things that is

37:10 coming at American businesses right now is a lot.

37:14 Well, thank you so much.

37:15 Thank you for having me.

37:16 I was saying a minute ago that we were just with the LA Chamber

37:19 yesterday and it's such an opportunity to get out and talk to local businesses,

37:23 big and small, about what's happening in their community.

37:25 And what we see is businesses really

37:28 trying to deal with all of this uncertainty.

37:30 What should they be doing about finding workers?

37:32 What should they be doing about their supply chains?

37:34 What will happen with the economy?

37:36 What does AI mean?

37:37 So, all the things that you've been tackling all morning,

37:40 business leaders are live trying to figure out themselves.

37:43 What uh conversations are you having when it comes to affordability?

37:46 I know you were on a panel today uh with Nero

37:48 Tannon who was on the broadcast a little bit earlier.

37:50 Both of you, I'm sure, coming from different perspectives.

37:52 Uh when you're trying to keep American business in mind,

37:57 knowing price pressures from the gas pump to the grocery store are very real.

38:02 You reached for the word uncertainty first.

38:04 How do you speak with your members about

38:06 this and the challenges they are facing and about to face?

38:09 Well, you know, let me say first that Nerra and I

38:11 had um violent agreement about the need for permitting reform, right?

38:16 That we really need to build things faster.

38:18 All of it, right?

38:19 It's housing, it's electricity, it's utility costs, it's, you know,

38:22 so what could we do as a country to build things faster,

38:26 more efficiently, and cheaper.

38:27 So that comes up with affordability.

38:28 The US Chamber, we really believe a lot of the root

38:31 of the affordability problem is a supply constraint, right?

38:34 We don't have enough housing.

38:35 We don't have enough access to healthcare.

38:36 We have a labor shortages in key sectors.

38:38 We don't have a resilient supply chain.

38:40 So the question is if we want long-term economic growth,

38:44 3% growth that lifts up families and communities

38:47 in the country and helps pay off debt.

38:49 If we want all that, we got

38:50 to take some of these structural issues really seriously.

38:53 Like which one, if we could tackle one right now in this given moment,

38:57 what would it be that you think the American businesses

38:59 could really get behind and say this is a game changer?

39:01 I really think it would be permitting reform.

39:02 Think about the fact that it takes 5 to seven years to get a permit.

39:05 In that time, you'll have a change of administrations most likely, right?

39:08 So if you have one administration that prefers one type of energy

39:11 and you have a different administration that prefers a different type of energy,

39:14 how do you decide where to invest and what to build?

39:16 And yet at the same time, as you've reported, we need all of the above.

39:19 Suzanne, how do we get there, though?

39:20 Because I think about, you know, the American business community,

39:23 they have a great line often to the White House and to lawmakers.

39:27 So how do they say, "Hey folks,

39:28 it's not just about four years, four years, four years.

39:30 It's about a 10-year plan.

39:31 China does it.

39:32 It's a whole different country." And I know that.

39:34 But how do we do that so that we really commit

39:36 longer term to build some of these things that need that perspective?

39:39 That's such a good point, Carol,

39:40 because we certainly do not want a government planned economy, right?

39:43 None of us are for that.

39:45 But you're right that we do need government to set the conditions so that we

39:48 can grow so business can solve these problems

39:50 at scale that society really needs answers to.

39:54 And I think maybe we have to do two things a little differently.

39:57 One is talk to more people at the local level, local businesses, local chambers,

40:01 and get them to drive community support for politicians

40:05 who are willing to do some hard things.

40:07 And two, I think businesses are going to have

40:09 to get more involved earlier in the process, in the primary process.

40:12 They're really thinking about candidates who don't want

40:14 to just admire the problems and say expedient things,

40:17 but are willing to do hard work and take hard votes.

40:19 You know, I think about you sitting

40:20 in your headquarters right right across from Lafayette Square,

40:23 looking out the window at that White House.

40:25 you've been there a lot longer than this administration and to your point,

40:28 you're going to be there uh for administrations in the future.

40:31 But this Trump administration has embraced crypto in a way

40:35 that we have not seen uh in a White House before.

40:38 And of course, the timing has a lot to do

40:39 with this with this suddenly kind of going mainstream.

40:42 And there's a clarity act that uh Republicans and some

40:45 Democrats are hoping uh to see past this uh this year.

40:49 In fact, it could be sooner than later.

40:51 Are we uh managing the rules of the road when it comes

40:54 to crypto in a way that the chamber can support this approach?

40:58 I I really like the question and I really even more like the preamble, right?

41:02 Which is we just had our 114th birthday.

41:05 How about that?

41:05 I know.

41:05 I don't look a day over 112.

41:07 I I really feel amazing.

41:09 Thank you.

41:09 I really feel the weight of the fact that you know who was the guy in my office

41:13 in the depression or in World War II or you

41:16 know and how did they think about emerging technologies,

41:19 emerging financial instruments, how did they think about the impact on working

41:24 families and communities and American security and competitiveness

41:28 and how do we do the long-term right

41:30 things while being empathetic to the real short-term pain.

41:33 So I think your preamble was just so important.

41:36 We actually do need institutions with historical memory

41:40 and reach and I think it's really important

41:43 sound like an institutionalist is but the chamber

41:45 not taking a position on crypto look I think what we want to do is be supportive

41:50 of new technologies at the same time that we don't lose

41:54 sight of what really works in this country in the traditional

41:57 capital markets and traditional financial services we want to be careful

42:00 I've been watching this so closely and they've gone from pushing back

42:04 completely not interested to embracing slowly

42:07 but I think moving carefully but there is this concern we talk about

42:11 disruption innovation that how could something like

42:13 the digital world or cryptocurrencies replace so much of what the banks do.

42:18 So is there a lot of push back that you guys are getting from the banks

42:21 at what point is that innovation good and is what point that is that disruption

42:24 dangerous right and it's what you're always

42:26 balancing with the new technology and so

42:28 I applaud these industries and these companies

42:30 that are educating Congress and getting to a point where we can do something

42:34 that makes sense and makes sense for business.

42:36 It's of course not just crypto when we think of emerging technologies.

42:39 Uh there's another industrial revolution happening right now if you

42:43 take the words from Jensen Wong that's what he calls it.

42:45 Um how concerned is the chamber about

42:48 to your point there are wonderful things that AI is

42:51 bringing to us but there could also be

42:53 a negative disruption when it comes to the job market.

42:55 Is that a worry of yours?

42:56 Do you want to hear something cool?

42:57 Do you know the fastest the people

43:00 having the fastest uptake of AI small business?

43:03 It's the first technology in the United

43:04 States that small business embraced first,

43:07 which is really a leveling out, right?

43:08 A great equalizer.

43:09 Last year, the United States had 5.6 million new business starts.

43:13 That's optimism for you.

43:15 And some of that is that they can do more with AI, which is really fascinating.

43:19 So, the answer to your question is,

43:20 of course, everyone can see there's a disruption coming.

43:23 We don't have revolutions without some kind of disruption.

43:25 So, how do we help people through that?

43:27 because we're long-term optimistic about job growth, about health impact,

43:32 about the innovation, about what it does for our country.

43:34 We want to compete with our adversaries, right?

43:36 So, I think this is a really important topic

43:38 and we're going to have to do reskilling and education,

43:41 but the short-term disruption, I think, is going to lead to a nice hockey stick.

43:45 You know, we need a little bit of optimism.

43:46 I feel like there's a lot of serious stuff we've talked about today.

43:49 Hockey [laughter] was taken hockey stick.

43:51 Thank you for the optimism, Suzanne.

43:53 What a pleasure.

43:53 Thank you so much.

43:54 Thanks so much for having me.

43:55 Suzanne Clark, president, CEO of the US Chamber of Commerce.

43:59 You're listening [music] to the Bloomberg Balance of Power podcast.

44:02 Catch us live weekdays at noon and 5:00 [music] p.m.

44:05 Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.

44:09 Listen on demand wherever you get your podcasts or watch us live on YouTube.

44:15 We are going to go to space here to talk about another emerging technology,

44:18 but it's also one that has been rather mainstream.

44:21 And it's not just SpaceX, it's not just Jeff Bezos.

44:24 Uh there's a massive collection of companies that fulfill what

44:28 we call the modern space industry and one of them

44:30 is Northwood Space where Bridget Mendler is CEO and co-founder

44:33 and joins us right now live from the Milkin Global Conference.

44:36 It's wonderful to see you and uh welcome.

44:38 You actually control uh the the ground

44:41 infrastructure that helps to make satellites work.

44:44 Um as I mentioned, it's not always the most obvious

44:47 type of approach that your company has found something unique.

44:51 when you're talking to business leaders here at Milkin,

44:53 what markets are opening for you?

44:55 What what does this mainstreaming of space mean for your company?

44:58 Yeah.

44:58 Well, thank you both very much for having me.

45:00 Uh it's it's fun to have the occasion

45:02 to to talk about space at a forum such as this.

45:06 And what we do is that networking infrastructure between Earth and space.

45:10 So enabling all of the space missions that we

45:14 are seeing commercialized whether it's it's things like

45:16 direct to cell applications really expanding the telecom

45:19 sector um or different national security priorities or uh

45:24 you know enthusiasm around compute and and growing

45:27 compute solutions from orbit really bringing uh a lot

45:30 of the industries that have typically been terrestrial

45:33 into a a more um expansive architecture that goes beyond.

45:37 which I got to ask you because again somebody like an Elon

45:40 Musk and a lot of stuff that he is doing whether it's Starling

45:43 tell us what how you differentiate what you guys are doing from a lot

45:46 of the big players so we understand exactly what this business is

45:49 yeah and so what uh we're excited

45:51 to solve with our company is the networking infrastructure

45:53 for the industry at large uh we tend

45:56 to draw comparisons to like an AWS platform where you

45:59 think about not everybody was able to have

46:01 their own IT department and and um local data

46:05 storage solutions And so AWS opened up that solution

46:08 for many more companies to grow and blossom.

46:11 Think about the whole SAS ecosystem that we've been able

46:13 to see grow and expand as a result of that.

46:16 Um and so for the space networking solution,

46:19 the uh kind of nuts and bolts of that networking,

46:22 it's not really a differentiated uh solution for a lot of space companies,

46:26 but it consumes a lot of their time,

46:28 a lot of operational overhead, complexity, and cost.

46:31 And so for us, if we can do that at scale,

46:33 provide it as a a generalized solution for the industry,

46:36 then that opens up a lot of different

46:38 businesses um to really grow their prospects.

46:40 I just have to acknowledge what everybody's thinking watching this right now.

46:43 Yes, this is the same Disney Channel.

46:46 You're a Disney Channel actress.

46:47 You're an award-winning singer songwriter fans around you.

46:52 You'll have generation from So yes, this is the same Bridget.

46:56 How do you go from that world to investing your life in a space company?

47:00 you know, you could be doing anything right now.

47:02 I, you know, I I think that the space industry is full of people

47:05 who are just extremely passionate um curious and I feel really grateful to have

47:11 discovered that community and and I also feel grateful that uh the world is

47:15 kind of opening up its excitement around

47:18 um the mainstream aspect of this industry.

47:20 Think about, you know, Artemis this year.

47:22 Think about SpaceX IPO.

47:24 Is there a halo effect from Artemis on all of your businesses?

47:27 I think what it what it points to is that uh

47:30 these missions are becoming possible in a way that is more mainstream.

47:34 Um and that's really the core of our business.

47:35 The core of our business is how can we

47:37 take all these ambitious missions and get them further

47:39 faster by providing the infrastructure that is is kind

47:43 of common and serves to be a strong foundation.

47:45 I have to say the Bloomberg team back home,

47:47 they know my dad was involved in the initial space race.

47:49 So we kind of grew up with this and it's really fascinating to see

47:51 it move so much into the private sector and kind of away from the government.

47:55 Having said that, I'm curious about who's working with you,

47:59 who are your customers, who's funding you, like what's the longerterm plan here?

48:02 Got a big round of funding.

48:04 Yes, we've raised around 140 million to date.

48:07 Uh, and our customer base is very intentionally broad.

48:10 Uh, we want to serve the whole space industry.

48:12 And so that includes government customers,

48:15 customers that uh require ground connectivity for solutions ranging from launch

48:20 to GPS satellites that power a ton of diverse applications for us really.

48:25 um to sensing applications and then you have real commercial industry.

48:29 So we're in communications with multiple public communications companies

48:32 in space um that are trying to resolve their networking infrastructure.

48:36 Where are you in terms of development

48:37 and deployment and just got about 30 seconds here?

48:40 Yeah.

48:40 Yeah.

48:40 Know uh it's a really big year for Northwood.

48:42 We uh last year was about developing our very first site,

48:45 our very first operational units.

48:47 This year it's about scale.

48:49 So we currently have sites uh in multiple

48:52 continents both in Australia and the United States.

48:54 We're planning to be on uh eight different

48:56 countries this year and producing nearly 100 antenna units.

49:00 So it's going to be a very busy year.

49:02 When are you going to space?

49:03 You know that's that's right.

49:05 That's what one [clears throat] of our producers

49:07 James I think wants to go to space too.

49:10 We'll put them together over there.

49:11 Producer James is actually with us at Milk and I'm glad you pointed that out.

49:14 Bridget, it's wonderful to meet you and great to see you.

49:16 Thank you for all of your insights.

49:18 Northwood Space is the company.

49:20 This is Balance of Power.

49:22 She's Carol Masser and I'm Joe Matthew.

49:23 [music] Thanks for [music] listening to the Balance of Power podcast.

49:34 Make sure to subscribe if you haven't already at Apple,

49:37 Spotify, or wherever you [music] get your podcasts.

49:39 And you can find us live every weekday

49:41 from Washington DC at noon time Eastern at bloomberg.com.