Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Okay, so what's happening today too when it comes to the micro some deal news Verison agreeing to buy rival telecom operator Frontier Communications parent for about nine point five nine billion dollars as Verizon looks to expand its high speed internet business. Here's Verizon CEO Hans Wesberg earlier today speaking on Bloomberg TV.

Okay, so what's happening today too when it comes to the micro some deal news Verison agreeing to buy rival telecom operator Frontier Communications parent for about nine point five nine billion dollars as Verizon looks to expand its high speed internet business. Here's Verizon CEO Hans Wesberg earlier today speaking on Bloomberg TV.

It is very straight into our core strategy. We are sort of immobility and broadbandcer basically all types of customers in this market, consumer, SMB's, large entervice and governments. This is just extending the offerings and optionality for the customers will have. So this is a really good decision by us to do it.

It is very straight into our core strategy. We are sort of immobility and broadbandcer basically all types of customers in this market, consumer, SMB's, large entervice and governments. This is just extending the offerings and optionality for the customers will have. So this is a really good decision by us to do it.

For more on the implications of the deal and why and how it came together, we turned to Chris Paul Mary, Bloomberg News Entertainment editor, as well as Michelle Davis, Bloomberg News senior m and A reporter Michelle here in the studio with us. Chris is out there in Los Angeles. Chris, we just heard in that clip from Hans Vesberg that this is part of the company's core strategy. Is the bet here that we're just going to keep using more and more data as a result of the explosive growth of AI, the excitement around AI.

For more on the implications of the deal and why and how it came together, we turned to Chris Paul Mary, Bloomberg News Entertainment editor, as well as Michelle Davis, Bloomberg News senior m and A reporter Michelle here in the studio with us. Chris is out there in Los Angeles. Chris, we just heard in that clip from Hans Vesberg that this is part of the company's core strategy. Is the bet here that we're just going to keep using more and more data as a result of the explosive growth of AI, the excitement around AI.

Is that what this is about, absolutely that and working from home, which I happened to be now and on a fiber network from AT and T. So, yeah, so that's part of it, just and you know video course from the streaming evolution of TV and all of that is you know, massive data feeds to the home and higher speeds and that's what fiber does.

Is that what this is about, absolutely that and working from home, which I happened to be now and on a fiber network from AT and T. So, yeah, so that's part of it, just and you know video course from the streaming evolution of TV and all of that is you know, massive data feeds to the home and higher speeds and that's what fiber does.

Michelle tell us a little bit about how this deal came together. They of both Verizon and Frontier in the telecom space, and did Verizon get a good deal?

Michelle tell us a little bit about how this deal came together. They of both Verizon and Frontier in the telecom space, and did Verizon get a good deal?

Yeah. So we're in a bit of a new era right now where all the cellular providers AT and T, Verizon, T Mobile, they, as Chris was saying, you know, are trying to get into the high speed internet game. And the last time we saw this big shift was when they were moving from landline to cellular, and so right now the idea is, you know, let's bundle cellular, let's bundle high speed internet and try to compete with the cable companies in terms of the history. I mean Frontiers claim to fame is their broadband access. Verizon has been, you know, the top wireless provider that we all know, but they hadn't really had a big presence in fiber. With this deal, if it closes, they will be vaulted to the top ahead of AT and T, who is right now the number one fiber offer among the wireless providers. But you know, even they hardly compete with the cable companies in terms of high speed internet access.

Yeah. So we're in a bit of a new era right now where all the cellular providers AT and T, Verizon, T Mobile, they, as Chris was saying, you know, are trying to get into the high speed internet game. And the last time we saw this big shift was when they were moving from landline to cellular, and so right now the idea is, you know, let's bundle cellular, let's bundle high speed internet and try to compete with the cable companies in terms of the history. I mean Frontiers claim to fame is their broadband access. Verizon has been, you know, the top wireless provider that we all know, but they hadn't really had a big presence in fiber. With this deal, if it closes, they will be vaulted to the top ahead of AT and T, who is right now the number one fiber offer among the wireless providers. But you know, even they hardly compete with the cable companies in terms of high speed internet access.

Michelle, when we when we think about the history of this space, I mean, this is a history that has been just dominated by M and A. That's how and actually you know breaking up of large companies over the last century. If we think about telecom regulatory hurdles for Verizon, here are those? Is that something that ravetory risk? Is that something investors have to be worried about.

Michelle, when we when we think about the history of this space, I mean, this is a history that has been just dominated by M and A. That's how and actually you know breaking up of large companies over the last century. If we think about telecom regulatory hurdles for Verizon, here are those? Is that something that ravetory risk? Is that something investors have to be worried about.

So if you look at Frontiers stock today, it is trading down and below the offer price some of that, you know, some of the decline is because yesterday people didn't know what Verizon was going to pay, so that's you know, they got ahead of themselves.

So if you look at Frontiers stock today, it is trading down and below the offer price some of that, you know, some of the decline is because yesterday people didn't know what Verizon was going to pay, so that's you know, they got ahead of themselves.

And a little bit.

And a little bit.

Of that decline has to do with this, you know, concern about regulatory scrutiny. No one that I've talked to you thinks that they're going to have any issues. But in this environment, regulators have just been taking a harder look at things. They're taking longer to review things. Obviously, you know, if there's a change in administration, which there probably will be, and we just don't know how it will go, that could change how long you know, regulators take to of you things.

Of that decline has to do with this, you know, concern about regulatory scrutiny. No one that I've talked to you thinks that they're going to have any issues. But in this environment, regulators have just been taking a harder look at things. They're taking longer to review things. Obviously, you know, if there's a change in administration, which there probably will be, and we just don't know how it will go, that could change how long you know, regulators take to of you things.

Chris, I'm wondering how many details we have about where Verizon is going to actually deploy this high speed internet, because we know that millions of Americans actually don't have access to high speed broadband. Is this something where Verizon is kind of serving those underserved regions or are they competing with the incumbent cable providers and areas that already have internet.

Chris, I'm wondering how many details we have about where Verizon is going to actually deploy this high speed internet, because we know that millions of Americans actually don't have access to high speed broadband. Is this something where Verizon is kind of serving those underserved regions or are they competing with the incumbent cable providers and areas that already have internet.

A little of both, but definitely they're looking at rural areas at and t is as well. There's a lot of five were built out in places that historically didn't get it, and that's part of this. I think Verizon said they'll be in thirty five states with this acquisition. So yeah, so very bad offering geographically.

A little of both, but definitely they're looking at rural areas at and t is as well. There's a lot of five were built out in places that historically didn't get it, and that's part of this. I think Verizon said they'll be in thirty five states with this acquisition. So yeah, so very bad offering geographically.

Chris, What does this mean for customers of Frontier? They have a couple million broadband customers already. Do they just automatically become FiOS customers?

Chris, What does this mean for customers of Frontier? They have a couple million broadband customers already. Do they just automatically become FiOS customers?

Yeah, that's certainly the plan. The CEO said he didn't expect, you know, this to result in like any kind of price war or something like that with anybody else, but that always seems to be the case in telecom. I mean, this is in a way is a reflection of the challenges these companies have had with mobile being sort of everybody as a phone or two at this point, and where else can you grow? And so they're returning really to this business that you know, they had offered back in the dial up internet days.

Yeah, that's certainly the plan. The CEO said he didn't expect, you know, this to result in like any kind of price war or something like that with anybody else, but that always seems to be the case in telecom. I mean, this is in a way is a reflection of the challenges these companies have had with mobile being sort of everybody as a phone or two at this point, and where else can you grow? And so they're returning really to this business that you know, they had offered back in the dial up internet days.

Well, Chris, to that point, I thought that the future was all about wireless, even when it came to broadband delivery, because it is very expensive to lay fiber, and these companies are working on delivering broadband wirelessly to the home with these receivers that people set up on their own They don't even have to call people out there to come and hook stuff up to the telephone wires. What's going on with that strategy right now?

Well, Chris, to that point, I thought that the future was all about wireless, even when it came to broadband delivery, because it is very expensive to lay fiber, and these companies are working on delivering broadband wirelessly to the home with these receivers that people set up on their own They don't even have to call people out there to come and hook stuff up to the telephone wires. What's going on with that strategy right now?

You know that I think this deal is really a recognition that that's only part of the solution. That if you really want to get the super high speeds, you need this fiber optic line, even in some cases directly to a home if possible, and that the wireless, while, as you said, people are investing in and they're showing some good growth in that way of accessing, it's probably not going to be the single, you know, main way people access.

You know that I think this deal is really a recognition that that's only part of the solution. That if you really want to get the super high speeds, you need this fiber optic line, even in some cases directly to a home if possible, and that the wireless, while, as you said, people are investing in and they're showing some good growth in that way of accessing, it's probably not going to be the single, you know, main way people access.

Yeah, Michelle, come on in on that, because the Capex when it comes to laying fiber is incredibly expensive, and also you've got to get the neighborhoods on board.

Yeah, Michelle, come on in on that, because the Capex when it comes to laying fiber is incredibly expensive, and also you've got to get the neighborhoods on board.

Yeah, so, I mean Verizon has a lot of work ahead of it in get making this a real thing. But if you think about fiber FiOS, I don't know if you guys have.

Yeah, so, I mean Verizon has a lot of work ahead of it in get making this a real thing. But if you think about fiber FiOS, I don't know if you guys have.

Used FiOS, I have thios.

Used FiOS, I have thios.

Yeah, it is just you know, lightning speed. It's faster, way more reliable than what you can get with wireless. So you know, it's clear that it's not quite interchangeable. But it is going to take them time to get to a place where this is the default.

Yeah, it is just you know, lightning speed. It's faster, way more reliable than what you can get with wireless. So you know, it's clear that it's not quite interchangeable. But it is going to take them time to get to a place where this is the default.

I was going to ask a similar question, but maybe what is the kind of history. What do we know already about companies that have merged in the telecom space. Have they been able to kind of successfully compete against those cable companies that you had mentioned earlier when you know, they acquire these fiber companies.

I was going to ask a similar question, but maybe what is the kind of history. What do we know already about companies that have merged in the telecom space. Have they been able to kind of successfully compete against those cable companies that you had mentioned earlier when you know, they acquire these fiber companies.

So T Mobile has been doing a bunch of joint venture deals to try to broaden its fiber broadband access. They recently did a deal with KKR where they agreed to both invest in metro Net and AT and T you know, has been the leader in this space. But the whole industry, I mean, when you think about telecom cable media, as we earlier we're talking about it, it was built on M and A using debt. A lot of these companies have gone bankrupt and come back around again, including Frontier.

So T Mobile has been doing a bunch of joint venture deals to try to broaden its fiber broadband access. They recently did a deal with KKR where they agreed to both invest in metro Net and AT and T you know, has been the leader in this space. But the whole industry, I mean, when you think about telecom cable media, as we earlier we're talking about it, it was built on M and A using debt. A lot of these companies have gone bankrupt and come back around again, including Frontier.

Yeah that was a recent bankrupt a relatively recent bankruptcy.

Yeah that was a recent bankrupt a relatively recent bankruptcy.

Relatively recently. But you know, they find ways to reinvent themselves and you know, get more debt and buy and separate, and here we.

Relatively recently. But you know, they find ways to reinvent themselves and you know, get more debt and buy and separate, and here we.

Are, Chris. There's also a media story when it comes to this because Verizon is also with FiOS. They do offer traditional over the top you know, cable box service, I guess is what we'd call it. We wouldn't really call it over the top, but they do offer cable box service traditional linear TV. How do you think about that in the context of where they're doing M and A right now?

Are, Chris. There's also a media story when it comes to this because Verizon is also with FiOS. They do offer traditional over the top you know, cable box service, I guess is what we'd call it. We wouldn't really call it over the top, but they do offer cable box service traditional linear TV. How do you think about that in the context of where they're doing M and A right now?

This is it's part of the thing. And one of the things where Eyson's been active about is including other streaming services as part of their broadband business. As you know, everyone knows the traditional cable bundle is is collapsing, and so this is really the next evolution of delivery of TV and uh and and Hans Vestberg said in our Bloomberg TV interview that you know, having this multiple product offering to consumers helps reduce the churn. They're less likely to cancel if they have, you know, a Horizon mobile phone internet offering TV.

This is it's part of the thing. And one of the things where Eyson's been active about is including other streaming services as part of their broadband business. As you know, everyone knows the traditional cable bundle is is collapsing, and so this is really the next evolution of delivery of TV and uh and and Hans Vestberg said in our Bloomberg TV interview that you know, having this multiple product offering to consumers helps reduce the churn. They're less likely to cancel if they have, you know, a Horizon mobile phone internet offering TV.

Michelle, what's next? What are you watching for? In terms of timeline?

Michelle, what's next? What are you watching for? In terms of timeline?

The big question is is AT and T or T Mobile are they going to do something to get back ahead after this?

The big question is is AT and T or T Mobile are they going to do something to get back ahead after this?

Chris, Paul, Mary, We're lucky to have both of you today and you're both writing a lot of stories, but I want to shift gears a little bit and talk about a story that you published just about an hour ago about the future of what happens with National Amusements and Paramount. The name Ellison is at the top of the story, but it's not David Ellison, it's actually Larry Ellison. Explain what exactly is going on here?

Chris, Paul, Mary, We're lucky to have both of you today and you're both writing a lot of stories, but I want to shift gears a little bit and talk about a story that you published just about an hour ago about the future of what happens with National Amusements and Paramount. The name Ellison is at the top of the story, but it's not David Ellison, it's actually Larry Ellison. Explain what exactly is going on here?

Well, you know this was always position this takeover Paramount is David Ellison, Larry's son, But everyone always assumed that the money was coming from Dad. He's the founder of Oracle Corporate course and worth over one hundred and fifty billion dollars, but we hadn't quite seen it in writing and in this situation where you have to tell the regulators, in this case the Federal Communication Commission, who's going to own these you know, that CBS TV network and all those local stations, and they their finally says, well, it's actually going to be Larry Ellison controls it all.

Well, you know this was always position this takeover Paramount is David Ellison, Larry's son, But everyone always assumed that the money was coming from Dad. He's the founder of Oracle Corporate course and worth over one hundred and fifty billion dollars, but we hadn't quite seen it in writing and in this situation where you have to tell the regulators, in this case the Federal Communication Commission, who's going to own these you know, that CBS TV network and all those local stations, and they their finally says, well, it's actually going to be Larry Ellison controls it all.

So what does that mean for the company, but also so for what David's going to do at the company and who's actually going to be the one making the decisions here.

So what does that mean for the company, but also so for what David's going to do at the company and who's actually going to be the one making the decisions here.

Well, David, as the finally said, will be chairman and CEO of Paramount and or his folkespeople who said he will have operational control. But you know, it's you don't have to look far in the media landscape to find incidences where where you know, fathers.

Well, David, as the finally said, will be chairman and CEO of Paramount and or his folkespeople who said he will have operational control. But you know, it's you don't have to look far in the media landscape to find incidences where where you know, fathers.

Have fired their sons.

Have fired their sons.

Do you think about the Murdocks and all the changes they had over their media empire. The Dolan family as well in Cable TV had some dust ups. Even in the red Stones there was a period of time when Cherry Redstone was out with her father and that. So I don't want to presume anything. You know, everything may work out fine between the elesents, but you know, as long as Larry is the controlling person, there was always that that option.

Do you think about the Murdocks and all the changes they had over their media empire. The Dolan family as well in Cable TV had some dust ups. Even in the red Stones there was a period of time when Cherry Redstone was out with her father and that. So I don't want to presume anything. You know, everything may work out fine between the elesents, but you know, as long as Larry is the controlling person, there was always that that option.

Yeah, maybe no offshoot of succession at this point yet, Chris, is the deal happening? Is this is this thing finally gonna put to bed?

Yeah, maybe no offshoot of succession at this point yet, Chris, is the deal happening? Is this is this thing finally gonna put to bed?

Yeah, they've got a sign deal. At this point, the Paramount really can't consider other offers. There's still issues regarding like this one, regulatory and that, but it certainly seems like it's going to close next year.

Yeah, they've got a sign deal. At this point, the Paramount really can't consider other offers. There's still issues regarding like this one, regulatory and that, but it certainly seems like it's going to close next year.

Okay, certainly around the world when it comes to telecom and media. With Chris Palmery out there in a Los Angeles he's Bloomberg News Entertainment Editor, also Michelle Davis, Bloomberg News Senior m and A reporter. Michelle joining us here in the studio, Chris joining us from Los Angeles. A big thank you to both of you. Check out all of their reporting on the Bloomberg terminal and of course at Bloomberg dot com.

Okay, certainly around the world when it comes to telecom and media. With Chris Palmery out there in a Los Angeles he's Bloomberg News Entertainment Editor, also Michelle Davis, Bloomberg News Senior m and A reporter. Michelle joining us here in the studio, Chris joining us from Los Angeles. A big thank you to both of you. Check out all of their reporting on the Bloomberg terminal and of course at Bloomberg dot com.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and and Brout Auto with a Bloomberg Business act or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and and Brout Auto with a Bloomberg Business act or watch us live on YouTube.

As we've been discussing Wall Street's anxiety running rampant in't that countdown to the highly anticipated US jobs report. It's not just the jobs report that has people one about what risks do lie ahead. There's geopolitics, there's uncertainty ahead of the election, and for some people how tech could continue to affect the economy. Really big picture stuff and fundamental stuff. Dave Allison works with ultra high net worth clients at the RIA platform Prosperity Capital Advisors, where he's president and founding partner. They've got about three point five billion dollars in assets under management. Dave joins us here in the studio, Dave, good to have you with us. Welcome to Bloomberg Business Week. Give us an idea of your typical client, how much money they have work, how much money they have deployed with you, and sort of give us the profile.

As we've been discussing Wall Street's anxiety running rampant in't that countdown to the highly anticipated US jobs report. It's not just the jobs report that has people one about what risks do lie ahead. There's geopolitics, there's uncertainty ahead of the election, and for some people how tech could continue to affect the economy. Really big picture stuff and fundamental stuff. Dave Allison works with ultra high net worth clients at the RIA platform Prosperity Capital Advisors, where he's president and founding partner. They've got about three point five billion dollars in assets under management. Dave joins us here in the studio, Dave, good to have you with us. Welcome to Bloomberg Business Week. Give us an idea of your typical client, how much money they have work, how much money they have deployed with you, and sort of give us the profile.

Yeah, definitely. So we work with clients all over the United States. You know, typical client is somebody that is, you know, fifty five to sixty five, approaching retirement, you know, maybe a million to ten million dollars, and that's at the firm level. I typically spend my time with the families that have ten million dollars to you know, maybe fifty sixty, seventy million dollars and helping them implement their family wealth strategy.

Yeah, definitely. So we work with clients all over the United States. You know, typical client is somebody that is, you know, fifty five to sixty five, approaching retirement, you know, maybe a million to ten million dollars, and that's at the firm level. I typically spend my time with the families that have ten million dollars to you know, maybe fifty sixty, seventy million dollars and helping them implement their family wealth strategy.

So let's talk a little bit about those families. An asset allocation there, because traditionally we've heard a lot about at that level allocating assets to the private markets, but not necessarily in recent years as much discussion of that as there has been in the past. What do you see as sort of the asset allocation breakdown for the ultra high net worth family that's trying to have generational wealth here.

So let's talk a little bit about those families. An asset allocation there, because traditionally we've heard a lot about at that level allocating assets to the private markets, but not necessarily in recent years as much discussion of that as there has been in the past. What do you see as sort of the asset allocation breakdown for the ultra high net worth family that's trying to have generational wealth here.

Yeah, I think the asset allocation breakdown is still you know, pretty heavy in the public markets. I mean, obviously you can find outsized returns in the private equity space for a private market space. Yeah, on occasion, I think there's a lot of hype and buzz coming back post twenty twenty one. I think there's this great reset that happened, and now you know, there's a lot of still speculation around AIAA AI companies and some of the derivatives that'll come from this technology, and who's trying to build the next services and platform that'll be supported by AI. So I think we're seeing, you know, a renewed interest in that space. But you know the reality of it is public markets are still delivering rate returns and there's still huge opportunities, and so you know, it might be not as much hype as we saw maybe in twenty twenty or twenty twenty one.

Yeah, I think the asset allocation breakdown is still you know, pretty heavy in the public markets. I mean, obviously you can find outsized returns in the private equity space for a private market space. Yeah, on occasion, I think there's a lot of hype and buzz coming back post twenty twenty one. I think there's this great reset that happened, and now you know, there's a lot of still speculation around AIAA AI companies and some of the derivatives that'll come from this technology, and who's trying to build the next services and platform that'll be supported by AI. So I think we're seeing, you know, a renewed interest in that space. But you know the reality of it is public markets are still delivering rate returns and there's still huge opportunities, and so you know, it might be not as much hype as we saw maybe in twenty twenty or twenty twenty one.

When you talk to your clients, how are they currently feeling about both the US economy and also the stock market.

When you talk to your clients, how are they currently feeling about both the US economy and also the stock market.

Yeah, well, I think people are still fairly optimistic, although, as you just mentioned in your opening, a lot of uncertainty, and I don't know if that uncertainty is as much the economy or the stock market as it is everything else going on in the world, political, geopolitical wars. You know, I think that drives a lot of the uncertainty, which unfortunately starts to transition over to people's money in their portfolio. But you know, as much uncertainty exists in politics right now and in geopolitical events, I think there's still this big wave of optimism of you know, what's going to happen with some of these companies that do have enormous upside from a productivity from the technological technological innovations that we're starting to see happen.

Yeah, well, I think people are still fairly optimistic, although, as you just mentioned in your opening, a lot of uncertainty, and I don't know if that uncertainty is as much the economy or the stock market as it is everything else going on in the world, political, geopolitical wars. You know, I think that drives a lot of the uncertainty, which unfortunately starts to transition over to people's money in their portfolio. But you know, as much uncertainty exists in politics right now and in geopolitical events, I think there's still this big wave of optimism of you know, what's going to happen with some of these companies that do have enormous upside from a productivity from the technological technological innovations that we're starting to see happen.

So what are some examples of those companies of those services.

So what are some examples of those companies of those services.

Well, I mean, of course there's the big ones that we all know about, right the big ones that have been number one benefactors of the hype around AI and what it could do to their own internal productivity. There's been the benefactors like in the video that of course everyone knows about, of the spend from these hyper scalers. But I think what's interesting is to start to look at kind of the next derivatives of who's going to get beneficial productivity, growth or revenue through monetization of services. And I think we're still in like the first ending of what that even looks like. So you know, there's there's, of course companies in different areas, you know, the big ones that we know about and hear about all day long. But you know, I still think even in the small business side, small company stocks are still trying to figure out how to harness or utilize some of the AI tools.

Well, I mean, of course there's the big ones that we all know about, right the big ones that have been number one benefactors of the hype around AI and what it could do to their own internal productivity. There's been the benefactors like in the video that of course everyone knows about, of the spend from these hyper scalers. But I think what's interesting is to start to look at kind of the next derivatives of who's going to get beneficial productivity, growth or revenue through monetization of services. And I think we're still in like the first ending of what that even looks like. So you know, there's there's, of course companies in different areas, you know, the big ones that we know about and hear about all day long. But you know, I still think even in the small business side, small company stocks are still trying to figure out how to harness or utilize some of the AI tools.

So how would that how would that end up looking for these other companies? Is this the is the idea here that the companies become more efficient and don't need as many employees and perhaps we see an uptick in unemployment as a result, or do we see something else entirely where the companies become more productive but those people are still needed.

So how would that how would that end up looking for these other companies? Is this the is the idea here that the companies become more efficient and don't need as many employees and perhaps we see an uptick in unemployment as a result, or do we see something else entirely where the companies become more productive but those people are still needed.

Well, I'm certainly hoping for the latter, right, I mean as an employer, we're a small business. We have about seventy five employees.

Well, I'm certainly hoping for the latter, right, I mean as an employer, we're a small business. We have about seventy five employees.

We use AI.

We use AI.

We are just starting initiatives. You know, obviously in the wealth management industry we have a lot more compliance and regulatory concerns around how we use it. But we're trying to empower our employees to use it, and we're not doing it as a measure of cutting back. We're using it a measure as a measure of how can we grow, how can we impact more clients, how can we be more efficient with our advisors? And so, you know, I hope that most other industries are looking at it more as a tool of abundance than scarcity, and so I think that's a great reason to be optimistic. I mean, will jobs change. Of course, jobs will change. That happens in every major technological advancement or shift. But I think, you know, companies are going to continue to see ways to grow productivity and hopefully drive earnings and more efficiency.

We are just starting initiatives. You know, obviously in the wealth management industry we have a lot more compliance and regulatory concerns around how we use it. But we're trying to empower our employees to use it, and we're not doing it as a measure of cutting back. We're using it a measure as a measure of how can we grow, how can we impact more clients, how can we be more efficient with our advisors? And so, you know, I hope that most other industries are looking at it more as a tool of abundance than scarcity, and so I think that's a great reason to be optimistic. I mean, will jobs change. Of course, jobs will change. That happens in every major technological advancement or shift. But I think, you know, companies are going to continue to see ways to grow productivity and hopefully drive earnings and more efficiency.

What does that mean for the breath in the market and the broadening out of the rally? I was looking at a chart the equal weighted index S and B equal weight has outperformed the market cap weighted index over almost six percentage points since July. Do you see that continuing?

What does that mean for the breath in the market and the broadening out of the rally? I was looking at a chart the equal weighted index S and B equal weight has outperformed the market cap weighted index over almost six percentage points since July. Do you see that continuing?

Yeah?

Yeah?

I hope so. I mean, you know, you wonder is that somewhat of cause or effect? I mean, the reality of it is what we saw through the first half of this year was the big names, the hyper scalers, getting so much attention and so much money thrown at them that the reality of it is kind of all good things have to come to an end at some point, and now we're to the point with those biggest companies it's like, hey, you're spending all this money, Start showing me some of the impact. And we're also seeing a lot of people, quite frankly, just take gains off of those bigger company names. And where's that money going to go. It's going to go to the rest of the market. I think, you know, we're still kind of early on to see how it's going to spread out, where it's going to be dispersed, what industries are going to be able to adapt and use these tools for productivity. But you know, I do anticipate that while we're still going to see these kind of big name hyperscalers spend a lot of money, gain a lot of momentum, gain a lot of interest, I think you're going to start to see, you know, the rest of the market, you know, not just the S and P five hundred, like you mentioned the equal weight index, but you know, even hopefully looking at other asset classes like small cap, you know, start to benefit from some of these tools, particularly if we start to get into a rate lowering environment where they can start borrowing money to generate their own capex spend at a small cap level.

I hope so. I mean, you know, you wonder is that somewhat of cause or effect? I mean, the reality of it is what we saw through the first half of this year was the big names, the hyper scalers, getting so much attention and so much money thrown at them that the reality of it is kind of all good things have to come to an end at some point, and now we're to the point with those biggest companies it's like, hey, you're spending all this money, Start showing me some of the impact. And we're also seeing a lot of people, quite frankly, just take gains off of those bigger company names. And where's that money going to go. It's going to go to the rest of the market. I think, you know, we're still kind of early on to see how it's going to spread out, where it's going to be dispersed, what industries are going to be able to adapt and use these tools for productivity. But you know, I do anticipate that while we're still going to see these kind of big name hyperscalers spend a lot of money, gain a lot of momentum, gain a lot of interest, I think you're going to start to see, you know, the rest of the market, you know, not just the S and P five hundred, like you mentioned the equal weight index, but you know, even hopefully looking at other asset classes like small cap, you know, start to benefit from some of these tools, particularly if we start to get into a rate lowering environment where they can start borrowing money to generate their own capex spend at a small cap level.

Let's talk about bonds as well. What is the allocation to bonds, Because for the last few years, investors really haven't gotten that much of a positive return if they're in bonds. Do you see that evolving? Have you had to change the kind of typical stock bond portfolio composition with your clients.

Let's talk about bonds as well. What is the allocation to bonds, Because for the last few years, investors really haven't gotten that much of a positive return if they're in bonds. Do you see that evolving? Have you had to change the kind of typical stock bond portfolio composition with your clients.

Well, what's interesting about bonds is it really depends on the type of investor. Right, if you're a younger investor in the accumulation phase, you're not really needing income from your portfolio, and and you're of course focused on trying to generate the highest expected returns. Bonds probably aren't a big part of your asset allocation. I mean, you know, bonds are the seat belt in a car. They're there for safety, they're there to generate income. Obviously, for our retiree clients, generating consistent cash flow and income is certainly a lot better today than it was two or three years ago. There's a speculative element of bonds, right as interest rates for all the principal value of bonds go up. But I still think people are more bullish on the expected return of equities over bonds we are still sitting at. Of course, for most of our growth oriented clients a higher equity allocation than fixed income. And again, fixed income is a great place for that short term money or when we're trying to generate cash flow. But you know, I don't see a whole lot of speculation happening on capital returns of fixed income.

Well, what's interesting about bonds is it really depends on the type of investor. Right, if you're a younger investor in the accumulation phase, you're not really needing income from your portfolio, and and you're of course focused on trying to generate the highest expected returns. Bonds probably aren't a big part of your asset allocation. I mean, you know, bonds are the seat belt in a car. They're there for safety, they're there to generate income. Obviously, for our retiree clients, generating consistent cash flow and income is certainly a lot better today than it was two or three years ago. There's a speculative element of bonds, right as interest rates for all the principal value of bonds go up. But I still think people are more bullish on the expected return of equities over bonds we are still sitting at. Of course, for most of our growth oriented clients a higher equity allocation than fixed income. And again, fixed income is a great place for that short term money or when we're trying to generate cash flow. But you know, I don't see a whole lot of speculation happening on capital returns of fixed income.

Just in the last minute that we have November election front center certainly in terms of how we're thinking about coverage up till then, how is it on your radar?

Just in the last minute that we have November election front center certainly in terms of how we're thinking about coverage up till then, how is it on your radar?

Yeah? Well, I mean, the the reality of it is, we all know the market hates uncertainty, and there's an enormous amount of uncertainty. And what we've been telling every one of our clients, things are going to get bumpy. Things are going to get bumpy in September, Things are going to get bumpy in October. We've seen this in almost every election year for as long as we have data. September and October are not typically great months for the market. And so it goes to are you trying to time the market or are you a long term investor? Because as soon as the election results come in, we tend to see a trend. Word upwards for overall markets, and so you know, if you're trying to trade and get ahead and market time, hey, there's probably some opportunities with all the volatility we're going to see. But if you're a long term investor, stick to the course, have a good portfolio, look at what your bets are in these allocations that you have if there's opportunity to rebounce or reallocate, and don't pay much focus to the day to day that's happening.

Yeah? Well, I mean, the the reality of it is, we all know the market hates uncertainty, and there's an enormous amount of uncertainty. And what we've been telling every one of our clients, things are going to get bumpy. Things are going to get bumpy in September, Things are going to get bumpy in October. We've seen this in almost every election year for as long as we have data. September and October are not typically great months for the market. And so it goes to are you trying to time the market or are you a long term investor? Because as soon as the election results come in, we tend to see a trend. Word upwards for overall markets, and so you know, if you're trying to trade and get ahead and market time, hey, there's probably some opportunities with all the volatility we're going to see. But if you're a long term investor, stick to the course, have a good portfolio, look at what your bets are in these allocations that you have if there's opportunity to rebounce or reallocate, and don't pay much focus to the day to day that's happening.

Dave Allison at Prosperity Capital Advisors, thanks so much for joining us here on a Bloomberg Business Week.

Dave Allison at Prosperity Capital Advisors, thanks so much for joining us here on a Bloomberg Business Week.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

You're listening to the Bloomberg Business Week podcast. Listen live each weekday starting at two pm Eastern on Apple car Play and Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa play Bloomberg eleven thirty.

When we talk polarization, especially these days, it's often in the context of politics, but there's more to polarization than just political polarization. That includes economic polarization, which is, as you guessed it, people on opposite ends of the economic spectrum. And according to our next guest. Economic polarization now showing up in the workplace and it has real implications when it comes to productivity. Richard Edelman is CEO at the global communications firm Edelman. He joins us from New York. Richard, we check in with you periodically thanks to the updates that you and the team over at Edelman do to the Edelman tr ust A Barometer. It's a global survey. It looks to understand why people think the way they do. What did you find about economic polarization, especially in the workplace.

When we talk polarization, especially these days, it's often in the context of politics, but there's more to polarization than just political polarization. That includes economic polarization, which is, as you guessed it, people on opposite ends of the economic spectrum. And according to our next guest. Economic polarization now showing up in the workplace and it has real implications when it comes to productivity. Richard Edelman is CEO at the global communications firm Edelman. He joins us from New York. Richard, we check in with you periodically thanks to the updates that you and the team over at Edelman do to the Edelman tr ust A Barometer. It's a global survey. It looks to understand why people think the way they do. What did you find about economic polarization, especially in the workplace.

So what we found is that in fact, the so called associates, the working class people have a much lower opinion of institutions than the executive class and that that gap has just widened over the last five years profoundly. And so now there's a forty point gap between again what the work worker thinks and what the executives think about trust in business, government, media and NGOs. And that is to do with the experience of globalization, the experience of COVID and then the experience of inflation. And so even though there are wages have gone up, people are terribly nervous also about the fear of AI.

So what we found is that in fact, the so called associates, the working class people have a much lower opinion of institutions than the executive class and that that gap has just widened over the last five years profoundly. And so now there's a forty point gap between again what the work worker thinks and what the executives think about trust in business, government, media and NGOs. And that is to do with the experience of globalization, the experience of COVID and then the experience of inflation. And so even though there are wages have gone up, people are terribly nervous also about the fear of AI.

Does it also have to do with compensation though, and the different current way that people are paid for their work when they're I don't want to say at the entry or managerial level, but no question that c suite pay has absolutely exploded over the last couple of decades. I mean, we have it available on the Bloomberg terminal, you can go look it up for publicly listed companies. It's just mind boggling how much these executives are paid. I think to a lot of people they would say that it's you know, that's the market rate, and that's what you know, they're bringing that value. But does that distinction at all have any effect on how people think about economic polarization.

Does it also have to do with compensation though, and the different current way that people are paid for their work when they're I don't want to say at the entry or managerial level, but no question that c suite pay has absolutely exploded over the last couple of decades. I mean, we have it available on the Bloomberg terminal, you can go look it up for publicly listed companies. It's just mind boggling how much these executives are paid. I think to a lot of people they would say that it's you know, that's the market rate, and that's what you know, they're bringing that value. But does that distinction at all have any effect on how people think about economic polarization.

It's certainly to do with pay, but it's also to do with the projection of economic future. And when you look at the forty five to sixty five year olds, only nineteen percent of our respondents said that they believe that their families are going to be better off in five years, whereas the younger sixty five percent, you know, the eighteen to thirty five year old, they believe in the future. And so again, the forty five year olds have seen globalization, they have a huge fear of being in a sense exiled from work by AI. So upskilling becomes an urgent matter for business, so that people are calm about their future. And if there's going to have to be changed in your size of workforce, just tell them the truth and you know, don't let it creep up on you.

It's certainly to do with pay, but it's also to do with the projection of economic future. And when you look at the forty five to sixty five year olds, only nineteen percent of our respondents said that they believe that their families are going to be better off in five years, whereas the younger sixty five percent, you know, the eighteen to thirty five year old, they believe in the future. And so again, the forty five year olds have seen globalization, they have a huge fear of being in a sense exiled from work by AI. So upskilling becomes an urgent matter for business, so that people are calm about their future. And if there's going to have to be changed in your size of workforce, just tell them the truth and you know, don't let it creep up on you.

How did the survey define and measure economic optimism? Can you perhaps maybe share some of the questions that were asked of the super survey participants.

How did the survey define and measure economic optimism? Can you perhaps maybe share some of the questions that were asked of the super survey participants.

So it's a very simple question, which is do you feel your family is going to be better off in five years? And we see a consistent diminution of expectations in the people in the lower economic echelons, and particularly again the people who are forty five years old plus. And it's partly the experience that they've had with globalization, which their younger group hasn't and the projection of AI, which everyone is nervous about, but the younger feel somehow better equipped to do it.

So it's a very simple question, which is do you feel your family is going to be better off in five years? And we see a consistent diminution of expectations in the people in the lower economic echelons, and particularly again the people who are forty five years old plus. And it's partly the experience that they've had with globalization, which their younger group hasn't and the projection of AI, which everyone is nervous about, but the younger feel somehow better equipped to do it.

And what did you guys find about just why economic optimism for those employees is so important? I see in the notes It drives employees to be more civically minded.

And what did you guys find about just why economic optimism for those employees is so important? I see in the notes It drives employees to be more civically minded.

Well from a practical point of view, if you're a business owner, it's more employee loyalty, more employee advocacy, and they're much more willing to engage in transformation of the business. So, for example, if you're optimistic about your economic future, you're much more willing to accept AI. But it shifts completely to the opposite if you're nervous about your economic future. So all of this is circular, and the vert to a circle that we need to do is coln people people down about their future. Pay them well enough. Then they'll be your advocates and loyal to your business, and they'll also, by two to one, put in the extra effort that, you know, make sure that the company will succeed.

Well from a practical point of view, if you're a business owner, it's more employee loyalty, more employee advocacy, and they're much more willing to engage in transformation of the business. So, for example, if you're optimistic about your economic future, you're much more willing to accept AI. But it shifts completely to the opposite if you're nervous about your economic future. So all of this is circular, and the vert to a circle that we need to do is coln people people down about their future. Pay them well enough. Then they'll be your advocates and loyal to your business, and they'll also, by two to one, put in the extra effort that, you know, make sure that the company will succeed.

What is what does it mean to pay someone enough? How do you know what enough is?

What is what does it mean to pay someone enough? How do you know what enough is?

I think enough is that people feel as if they are staying ahead of inflation, that they have the chance for a better life, for a house, for a retirement, because at the present all of those are in question, and you know this of course, then becomes political in the end of you know which party has a better idea for the future.

I think enough is that people feel as if they are staying ahead of inflation, that they have the chance for a better life, for a house, for a retirement, because at the present all of those are in question, and you know this of course, then becomes political in the end of you know which party has a better idea for the future.

Besides just pay How else are you seeing companies react to this low level of employee economic optimism?

Besides just pay How else are you seeing companies react to this low level of employee economic optimism?

So I think CEOs have thought in the last three or four year that one of the great plays is to be public advocates on sustainability, diversity, inclusion, geopolitics. Even that's reversing and there's a sort of rebalancing of stakeholders. So Wall Street and customers and regulators matter equally to employees. So CEOs are well advised to continue to speak to their own workforces about these societal issues, but not to become public advocates. Also, companies are responding by what is termed as agency, giving people within the company the chance to feel as if they're making an impact, to give them a voice, to listen to them, to have town halls and other ways of expressing your desire to learn and listen.

So I think CEOs have thought in the last three or four year that one of the great plays is to be public advocates on sustainability, diversity, inclusion, geopolitics. Even that's reversing and there's a sort of rebalancing of stakeholders. So Wall Street and customers and regulators matter equally to employees. So CEOs are well advised to continue to speak to their own workforces about these societal issues, but not to become public advocates. Also, companies are responding by what is termed as agency, giving people within the company the chance to feel as if they're making an impact, to give them a voice, to listen to them, to have town halls and other ways of expressing your desire to learn and listen.

Richard, before we let you go, we just have about a minute left. But your CEO at Edelman, are you using AI right now? How are you using AI? If you are so?

Richard, before we let you go, we just have about a minute left. But your CEO at Edelman, are you using AI right now? How are you using AI? If you are so?

Personally, I write my blog post every week. My chatgybt is my English teacher and criticizing my ideas and my grammar, which is very helpful. I also ask the chatgybt to help me on formulating my company strategy document that I just have to prepare for my board for next week, and I am pushing myself to use it, and I'm also asking my younger employees, how are you using it. We're putting it on five thousand desktops across Edelman in the next three weeks. And we know that we have to be efficient. We know also that we have to be smarter, and that's the key. We don't want to take jobs away. We want to make our work better so that we can get premium pricing for our work.

Personally, I write my blog post every week. My chatgybt is my English teacher and criticizing my ideas and my grammar, which is very helpful. I also ask the chatgybt to help me on formulating my company strategy document that I just have to prepare for my board for next week, and I am pushing myself to use it, and I'm also asking my younger employees, how are you using it. We're putting it on five thousand desktops across Edelman in the next three weeks. And we know that we have to be efficient. We know also that we have to be smarter, and that's the key. We don't want to take jobs away. We want to make our work better so that we can get premium pricing for our work.

Hey, it's an interesting way to think about it. Richard Edelman and CEO at the global communications firm Edelman, joining us this afternoon from New York.

Hey, it's an interesting way to think about it. Richard Edelman and CEO at the global communications firm Edelman, joining us this afternoon from New York.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and then Brout Auto with a Bloomberg Business app or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Apple car Play and then Brout Auto with a Bloomberg Business app or watch us live on YouTube.

I can't talk about it enough, Emily. We are all focused on that job support tomorrow eight thirty Wall Street Time because FED chair j. Palace put the labor market at the heart of the Central Bank's decision on when and how quickly to ease So how are things going to look tomorrow? Well, if you've got to Eco. Go on the Bloomberg terminal, you can see that economists surveyed by Bloomberg are expecting one hundred and sixty five thousand jobs for the month of August. So we'll see if it comes in at that level higher or lower than the level. And of course there's going to be a close eye on revisions.

I can't talk about it enough, Emily. We are all focused on that job support tomorrow eight thirty Wall Street Time because FED chair j. Palace put the labor market at the heart of the Central Bank's decision on when and how quickly to ease So how are things going to look tomorrow? Well, if you've got to Eco. Go on the Bloomberg terminal, you can see that economists surveyed by Bloomberg are expecting one hundred and sixty five thousand jobs for the month of August. So we'll see if it comes in at that level higher or lower than the level. And of course there's going to be a close eye on revisions.

And the unemployment rate, which they're expecting four point two percent. That would be a drop from the four point three percent prior. But as Mike McKee told us, watch the rounding. Yeah, because he's all about the three decimal places for it in a three decimal place, so traders might not see that, they might only see.

And the unemployment rate, which they're expecting four point two percent. That would be a drop from the four point three percent prior. But as Mike McKee told us, watch the rounding. Yeah, because he's all about the three decimal places for it in a three decimal place, so traders might not see that, they might only see.

The four point two I'm curious what Martha Heller is seeing. She's founder in CEO at Heller Search. It's an executive search firm. It specializes in it leadership roles. She joins us from Massachusetts. Martha, good to have you back with us. Remind everybody the sub segment of the workforce that you're looking at, because you're not seeing the entire workforce given that you specialize in it leadership roles. But remind everyone what you're seeing.

The four point two I'm curious what Martha Heller is seeing. She's founder in CEO at Heller Search. It's an executive search firm. It specializes in it leadership roles. She joins us from Massachusetts. Martha, good to have you back with us. Remind everybody the sub segment of the workforce that you're looking at, because you're not seeing the entire workforce given that you specialize in it leadership roles. But remind everyone what you're seeing.

Sure things. So what we look at is the technology workforce across all industries, so yes, high tech, but we're also looking at retail and insurance and manufacturing, so it's every industry but that particular technology workforce. So for us, we're of course very interested to see what the numbers tomorrow hole because they're either a bell weather for growth or they're going to indicate a shrinking of a workforce market, which of course we're not excited about. But to me and what I'm seeing Tim and Emily is something bigger than whatever the jobs report shows tomorrow, and that is really in how much AI investments are driving job growth in the next twelve to eighteen months. If we're talking about a six hundred billion dollar overall investment in AI, which is some of the numbers we're hearing, people need to give a return on that investment. You need engineers and integrators and developers and analysts and data scientists. And keep in mind, every time we open an AI opportunity on our big businesses, we open a security risk. And the fact is experienced AI security engineer is an oxymoron. It doesn't exist yet. So regardless of what tomorrow's numbers show, I believe overall from Silicon Valley to Middle America manufacturing retail. We're going to see an overall uptick in hiring in tech due to the need for people to make that AI dream come true. We'll see how that all happens, but I think in the next twelve to eighteen months, we're going to see an uptick in technology hiring across the board.

Sure things. So what we look at is the technology workforce across all industries, so yes, high tech, but we're also looking at retail and insurance and manufacturing, so it's every industry but that particular technology workforce. So for us, we're of course very interested to see what the numbers tomorrow hole because they're either a bell weather for growth or they're going to indicate a shrinking of a workforce market, which of course we're not excited about. But to me and what I'm seeing Tim and Emily is something bigger than whatever the jobs report shows tomorrow, and that is really in how much AI investments are driving job growth in the next twelve to eighteen months. If we're talking about a six hundred billion dollar overall investment in AI, which is some of the numbers we're hearing, people need to give a return on that investment. You need engineers and integrators and developers and analysts and data scientists. And keep in mind, every time we open an AI opportunity on our big businesses, we open a security risk. And the fact is experienced AI security engineer is an oxymoron. It doesn't exist yet. So regardless of what tomorrow's numbers show, I believe overall from Silicon Valley to Middle America manufacturing retail. We're going to see an overall uptick in hiring in tech due to the need for people to make that AI dream come true. We'll see how that all happens, but I think in the next twelve to eighteen months, we're going to see an uptick in technology hiring across the board.

And what trends are you seeing right now? Because would this be an uptick from a downturn in hiring? Just talk about maybe the last few years this demand for more jobs in it. Has it been steadily growing or did we see a peak just a few years ago and now we're kind of working back up to that.

And what trends are you seeing right now? Because would this be an uptick from a downturn in hiring? Just talk about maybe the last few years this demand for more jobs in it. Has it been steadily growing or did we see a peak just a few years ago and now we're kind of working back up to that.

We saw a peak during and immediately after COVID because we needed all those technology people to get all those people working at home. Once we had that, we had a catalyst in terms of digital transformation. Maybe we wouldn't have all been so digital if COVID hadn't come along and sort of forced that on us more quickly.

We saw a peak during and immediately after COVID because we needed all those technology people to get all those people working at home. Once we had that, we had a catalyst in terms of digital transformation. Maybe we wouldn't have all been so digital if COVID hadn't come along and sort of forced that on us more quickly.

And as a.

And as a.

Result of that, we seemed tremendous eyeing. We now need to fund our digital products. As an insurance company, we now need to do more digital access for our people buying groceries. That was all sort of put on turbo based on a sudden health scare that got us into this space. So I see this starting from before COVID and increasing steadily. Yes, we've had a hiccup with this job's report or that job's report, but I think honestly since COVID, we've had a very strong uptick in hiring in IT across these businesses.

Result of that, we seemed tremendous eyeing. We now need to fund our digital products. As an insurance company, we now need to do more digital access for our people buying groceries. That was all sort of put on turbo based on a sudden health scare that got us into this space. So I see this starting from before COVID and increasing steadily. Yes, we've had a hiccup with this job's report or that job's report, but I think honestly since COVID, we've had a very strong uptick in hiring in IT across these businesses.

When you talk to these IT professionals, where do they want to work? Because I understand that you know, nearly every company and probably almost every industry needs these tech jobs and these IT focused people, but they might be an unconventional places where maybe a person who works in tech isn't thinking, oh, I want to go work at a I want to go do a software engineering at a grocery store chain for example.

When you talk to these IT professionals, where do they want to work? Because I understand that you know, nearly every company and probably almost every industry needs these tech jobs and these IT focused people, but they might be an unconventional places where maybe a person who works in tech isn't thinking, oh, I want to go work at a I want to go do a software engineering at a grocery store chain for example.

You know, it's a fantastic question and the first thing I would say, and it's so sort of anal to talk about, but they want to be remote. They don't want to come into the office. So that's first thing in terms of where they want to be. I'll also say what they want is to work on complex technology problems. They want to learn the new skills so they don't want to come upgrade a payroll system. They want to run AI on a payroll process. So indicating to these folks wherever you find them that you are for technology is the forefront of what you're doing, and they're going to get to do exciting, meaningful work. That is the message to communicate in terms of where to go. Tools are getting easier. AI is making software engineering easier. We're simpler, so we don't need necessarily the MIIT trained, you know, computer science PhD. In our businesses. We need people who can learn design thinking, they can do good training, they have a passion for the mission of the business. So we can start to really expand where we get our technology people from. Particularly when AI I make some of those software engineering jobs repetitive. And now we meet people who can look at our businesses and say I have an idea for where AI can help us. So that's really not any particular education at all. Right, these are people who have passion, they understand processes, they want to create change. They're not necessarily all technologists.

You know, it's a fantastic question and the first thing I would say, and it's so sort of anal to talk about, but they want to be remote. They don't want to come into the office. So that's first thing in terms of where they want to be. I'll also say what they want is to work on complex technology problems. They want to learn the new skills so they don't want to come upgrade a payroll system. They want to run AI on a payroll process. So indicating to these folks wherever you find them that you are for technology is the forefront of what you're doing, and they're going to get to do exciting, meaningful work. That is the message to communicate in terms of where to go. Tools are getting easier. AI is making software engineering easier. We're simpler, so we don't need necessarily the MIIT trained, you know, computer science PhD. In our businesses. We need people who can learn design thinking, they can do good training, they have a passion for the mission of the business. So we can start to really expand where we get our technology people from. Particularly when AI I make some of those software engineering jobs repetitive. And now we meet people who can look at our businesses and say I have an idea for where AI can help us. So that's really not any particular education at all. Right, these are people who have passion, they understand processes, they want to create change. They're not necessarily all technologists.

Yeah, it's pretty incredible to see what can actually be done on some of these lms already, and I haven't I've played with them a little bit. But I don't even have the capability to do what some people are able to do on these Emily. I saw on Twitter slash x somebody posted a video of asking an LLM to create an app for them that had these certain parameters and the thing completely spit out code. It was amazing.

Yeah, it's pretty incredible to see what can actually be done on some of these lms already, and I haven't I've played with them a little bit. But I don't even have the capability to do what some people are able to do on these Emily. I saw on Twitter slash x somebody posted a video of asking an LLM to create an app for them that had these certain parameters and the thing completely spit out code. It was amazing.

You have to know how to communicate.

You have to know how to communicate.

Yeah, I have to be a prompt Is it a prompt engineer? Is that right now?

Yeah, I have to be a prompt Is it a prompt engineer? Is that right now?

With us?

With us?

That's right, it's a prompt engineer. And even more when you bring up tim that you played around with this, if you had to invest one hundred million dollars in it to produce three hundred million in revenue, suddenly that chat, GPT or whatever you're using you might look at and say, huh am, I always talking about somebody.

That's right, it's a prompt engineer. And even more when you bring up tim that you played around with this, if you had to invest one hundred million dollars in it to produce three hundred million in revenue, suddenly that chat, GPT or whatever you're using you might look at and say, huh am, I always talking about somebody.

Yeah, that sounds pretty good to me. Actually have some ideas, Martha.

Yeah, that sounds pretty good to me. Actually have some ideas, Martha.

I have a lot of ideas.

I have a lot of ideas.

Yes, okay, Hey, I'm curious about what you're seeing when it comes to compensation. Right now, we watch wages really closely. What are you seeing? What's typical compensation for somebody you place?

Yes, okay, Hey, I'm curious about what you're seeing when it comes to compensation. Right now, we watch wages really closely. What are you seeing? What's typical compensation for somebody you place?

That's right? So, I mean you know, are the posts replaced typically? Are the technology leaders in these Fortune five hundred businesses, So they've fully loaded packages with long term and short term. I'm seeing them obviously in the seven figures. And then it depends is it a Fortune twenty company that now you're going to have. I talked to a CTO of a major media conglomerate the other day, and he's making eight million a year, right, the CIO of a small company is not. But what we're seeing overall is CIOs and CTOs are now becoming officers of their companies. They used to report to the COO, the CFO. Now they're reporting a clip to the CEO, so their compensations are changing. They're now in that EVP or C level band and as such, all of their people get a lift. So as technology becomes forefront to everything we're going to do and the way we're going to secure our data and all of that, that becomes so important that compensation is going up. Could I give you arrange over I'd take maybe twenty percent over the last couple of years, but it's going to vary from industry to industry.

That's right? So, I mean you know, are the posts replaced typically? Are the technology leaders in these Fortune five hundred businesses, So they've fully loaded packages with long term and short term. I'm seeing them obviously in the seven figures. And then it depends is it a Fortune twenty company that now you're going to have. I talked to a CTO of a major media conglomerate the other day, and he's making eight million a year, right, the CIO of a small company is not. But what we're seeing overall is CIOs and CTOs are now becoming officers of their companies. They used to report to the COO, the CFO. Now they're reporting a clip to the CEO, so their compensations are changing. They're now in that EVP or C level band and as such, all of their people get a lift. So as technology becomes forefront to everything we're going to do and the way we're going to secure our data and all of that, that becomes so important that compensation is going up. Could I give you arrange over I'd take maybe twenty percent over the last couple of years, but it's going to vary from industry to industry.

Obviously, that's you know, compensation and pay to what extent are these professionals looking for additional benefits. I know you had mentioned that a lot of workers are looking to work from home and be fully remote.

Obviously, that's you know, compensation and pay to what extent are these professionals looking for additional benefits. I know you had mentioned that a lot of workers are looking to work from home and be fully remote.

That's right, So that's one thing, and I would say what they're looking for, more than anything, is meaning in their work. I could plug in this widget over and over again, but how is this widget helping people? How is it having an impact on shareholders? What's the meaning behind my work? I think COVID kind of threw everybody for a loop and said, wait a minute. I did everything I was supposed to do, and then this thing happened, and now my course has been thrown off. So what how do I want to spend my time? I want to spend my time having an impact. So more than anything, yes, let them work at home, fine, give them a good culture, let them have mentorship, but they need to know the why of what they're doing. That to me, is the focal point for attracting good people.

That's right, So that's one thing, and I would say what they're looking for, more than anything, is meaning in their work. I could plug in this widget over and over again, but how is this widget helping people? How is it having an impact on shareholders? What's the meaning behind my work? I think COVID kind of threw everybody for a loop and said, wait a minute. I did everything I was supposed to do, and then this thing happened, and now my course has been thrown off. So what how do I want to spend my time? I want to spend my time having an impact. So more than anything, yes, let them work at home, fine, give them a good culture, let them have mentorship, but they need to know the why of what they're doing. That to me, is the focal point for attracting good people.

We don't have a ton of time left, but I'm wondering what you're seeing as the biggest risk to this industry right now? Are people fearing layoffs at all?

We don't have a ton of time left, but I'm wondering what you're seeing as the biggest risk to this industry right now? Are people fearing layoffs at all?

The biggest fear that I'm starting to see bubbles of, or percolation of, is the bubble. How on earth are we going to get all this return on this AI investment? Because remember, it's cool to use chat GPT, but when you have a two hundred billion dollar business and you've got every you have to get all your data integrated in a way that AI can even matter. That's a big lift. So what I think we're going to see is something akin to the dot com bust of two thousand, where in two years all those AI startups they're not going to I mean this, you know again, I'm this is just a prediction. I think we're going to have a big AI bust, and then over the next three to five years, just as with happened with digital and e commerce, companies are going to understand how to use it. We are going to get that return on that investment. And I think out five years we're going to be living differently. I don't know about you, folks, but I remember analog. I remember the telephone that I would pick up and dial, and now life is so different. I think life is going to be as different. But we need five years to drive adoption of these tools and get our companies in shape and get the profitability from that to make it worth the board's while so, so you know what's the risk. I think the risk right now is an AI bubble. Right behind that is board level security preparedness for AI those I would say the two.

The biggest fear that I'm starting to see bubbles of, or percolation of, is the bubble. How on earth are we going to get all this return on this AI investment? Because remember, it's cool to use chat GPT, but when you have a two hundred billion dollar business and you've got every you have to get all your data integrated in a way that AI can even matter. That's a big lift. So what I think we're going to see is something akin to the dot com bust of two thousand, where in two years all those AI startups they're not going to I mean this, you know again, I'm this is just a prediction. I think we're going to have a big AI bust, and then over the next three to five years, just as with happened with digital and e commerce, companies are going to understand how to use it. We are going to get that return on that investment. And I think out five years we're going to be living differently. I don't know about you, folks, but I remember analog. I remember the telephone that I would pick up and dial, and now life is so different. I think life is going to be as different. But we need five years to drive adoption of these tools and get our companies in shape and get the profitability from that to make it worth the board's while so, so you know what's the risk. I think the risk right now is an AI bubble. Right behind that is board level security preparedness for AI those I would say the two.

Okay, so big changes coming in the next five years. We'll be sure to check in with you quite a bit between now and then. Martha Heller, founder and CEO at Heller's Search, the executive search firm that specializes in IT leadership roles. Joining us from Massachusetts.

Okay, so big changes coming in the next five years. We'll be sure to check in with you quite a bit between now and then. Martha Heller, founder and CEO at Heller's Search, the executive search firm that specializes in IT leadership roles. Joining us from Massachusetts.

Brother Marco journal How about you let me drive?

Brother Marco journal How about you let me drive?

Oh no, no, no, no, who's going to drive?

Oh no, no, no, no, who's going to drive?

Honey?

Honey?

Please? I'll travel.

Please? I'll travel.

Excuse me, I want to drive.

Excuse me, I want to drive.

It's a good question. This is the drive to the clothes.