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Okay, market's the equity market not doing much, but it's the long end of the bond market that's getting hit pretty hard with yields moving higher. Carol Pepper, founder and CEO at Pepper International, joins us.

Okay, market's the equity market not doing much, but it's the long end of the bond market that's getting hit pretty hard with yields moving higher. Carol Pepper, founder and CEO at Pepper International, joins us.

Now.

Now.

Carol, if we take a look at what's happening in the long end of the bond market, what point do yield start to impact the equity market.

Carol, if we take a look at what's happening in the long end of the bond market, what point do yield start to impact the equity market.

Well, I think we're not too far from it. But I think again, people are sort of hoping that this will be a temporary.

Well, I think we're not too far from it. But I think again, people are sort of hoping that this will be a temporary.

Spike everyone's talking about.

Spike everyone's talking about.

In twenty eleven, the spike didn't last, so I think there's similarly people not wanting to be headfaked, not wanting to think that it's going to get a lot worse than it is. The news have been known for a long time. It's not a huge surprise. It's disappointing, of course, and signals that at some point the US has to get its deficit under control. But I think people are just kind of going to take it in stride. That's why you don't see the markets moving much today. There are other potential moves of foot. What's going to happen with the tariffs, what's going.

In twenty eleven, the spike didn't last, so I think there's similarly people not wanting to be headfaked, not wanting to think that it's going to get a lot worse than it is. The news have been known for a long time. It's not a huge surprise. It's disappointing, of course, and signals that at some point the US has to get its deficit under control. But I think people are just kind of going to take it in stride. That's why you don't see the markets moving much today. There are other potential moves of foot. What's going to happen with the tariffs, what's going.

To happen with the tax builders. Is it actually going to get passed? And in what form?

To happen with the tax builders. Is it actually going to get passed? And in what form?

There are other more driving factors I think for the markets right now. This is just sort of a disappointing acknowledgment of reality.

There are other more driving factors I think for the markets right now. This is just sort of a disappointing acknowledgment of reality.

Carol.

Carol.

I know that you and the family offices that you work with have for a long time been a tech bulls. Do you use trading down days as an opportunity to add to those positions here? Do you still think tech can leave this market?

I know that you and the family offices that you work with have for a long time been a tech bulls. Do you use trading down days as an opportunity to add to those positions here? Do you still think tech can leave this market?

Absolutely? I don't know when, so it may not be this year.

Absolutely? I don't know when, so it may not be this year.

By the way, it may not be this year because there are other factors out of the hands of the market that are driving things, namely policies out of Washington. So as long as Washington's driving the bus right now, it's very hard for the markets to do anything other than react, as we you know of seeing the Fed can only react, everybody can only react at this point. However, that doesn't mean that Amazon isn't holding its value, that Nvidia isn't holding its value that Microsoft isn't holding its value. So if you're underweight in your tech positions because you felt it was too expensive before this period, might be a good time to get in on a fair day and up your positions of it, because those are leaders and they will continue to lead.

By the way, it may not be this year because there are other factors out of the hands of the market that are driving things, namely policies out of Washington. So as long as Washington's driving the bus right now, it's very hard for the markets to do anything other than react, as we you know of seeing the Fed can only react, everybody can only react at this point. However, that doesn't mean that Amazon isn't holding its value, that Nvidia isn't holding its value that Microsoft isn't holding its value. So if you're underweight in your tech positions because you felt it was too expensive before this period, might be a good time to get in on a fair day and up your positions of it, because those are leaders and they will continue to lead.

We have a breaking headline here from Reuters saying that nip On Steel is going to invest fourteen billion dollars in US steel If Trump okays that takeover deal. According to reports, it will be about four billion dollars for a new mill, a new steel mill. Just take that in for a second. That'd be huge. Carol, you mentioned tech like buy on the dip, right, the valuations make sense. Do you feel like there is FOMO right now on tech?

We have a breaking headline here from Reuters saying that nip On Steel is going to invest fourteen billion dollars in US steel If Trump okays that takeover deal. According to reports, it will be about four billion dollars for a new mill, a new steel mill. Just take that in for a second. That'd be huge. Carol, you mentioned tech like buy on the dip, right, the valuations make sense. Do you feel like there is FOMO right now on tech?

Not yet, but I do think that there are people that missed it completely before, people that were extremely skeptical and are very underweight.

Not yet, but I do think that there are people that missed it completely before, people that were extremely skeptical and are very underweight.

So I don't know if it's FOMA, but I.

So I don't know if it's FOMA, but I.

Do think it's not a bad time to get in and remember things like AI and the IoT technology that it's going to allow you to have data on every type of manufacturing that we do in the United States thanks to these new manufacturing policies, will need AI, will need IoT sensors will need all of the things that tech is building for us. And I can tell you that many family offices right now are actively investing in data centers.

Do think it's not a bad time to get in and remember things like AI and the IoT technology that it's going to allow you to have data on every type of manufacturing that we do in the United States thanks to these new manufacturing policies, will need AI, will need IoT sensors will need all of the things that tech is building for us. And I can tell you that many family offices right now are actively investing in data centers.

Data centers are being built all over the country.

Data centers are being built all over the country.

The municipal governments, for example, in the state of Oklahoma, the state governments are actively partnering with private sector to build more capacity for AI and technology in this country over the next ten twenty four months. So don't count tech out. It's not out at all. It's just a question of when the market starts driving, rather than the policy.

The municipal governments, for example, in the state of Oklahoma, the state governments are actively partnering with private sector to build more capacity for AI and technology in this country over the next ten twenty four months. So don't count tech out. It's not out at all. It's just a question of when the market starts driving, rather than the policy.

Hey, Carol, there was a time earlier this year when the markets are really trying to digest all these new tariffs, people said, hey, how about the rest of the world. We saw a lot of capital flow from US equity markets, bond markets overseas, particularly to Europe. Is that something you think is still viable?

Hey, Carol, there was a time earlier this year when the markets are really trying to digest all these new tariffs, people said, hey, how about the rest of the world. We saw a lot of capital flow from US equity markets, bond markets overseas, particularly to Europe. Is that something you think is still viable?

Yes, I do think that finally we'll see some movement in Europe.

Yes, I do think that finally we'll see some movement in Europe.

We've had ten to fifteen twenty years of US exceptionalism when it really didn't make a lot of sense to diversify that much outside.

We've had ten to fifteen twenty years of US exceptionalism when it really didn't make a lot of sense to diversify that much outside.

Of the US. But now Europe is looking more interesting again.

Of the US. But now Europe is looking more interesting again.

They're uniting, they're actively rebuilding defense stocks and they're trying to kind of take a bigger role in their own defense, and I think that's an area where we can really potentially make some money this year.

They're uniting, they're actively rebuilding defense stocks and they're trying to kind of take a bigger role in their own defense, and I think that's an area where we can really potentially make some money this year.

I don't think it's a bad thing that Europe is going to step up to the plate.

I don't think it's a bad thing that Europe is going to step up to the plate.

And there are some people rotating out of the United States for other reasons, and the first place they're going to go is Europe. It's perceived as less risky then let's say emerging markets or Asia.

And there are some people rotating out of the United States for other reasons, and the first place they're going to go is Europe. It's perceived as less risky then let's say emerging markets or Asia.

So yes, Europe.

So yes, Europe.

Is a good place if you're thinking of sticking your toe in the water and going outside the US right now.

Is a good place if you're thinking of sticking your toe in the water and going outside the US right now.

Very good, Carol, Thank you so much for We really appreciate it. Carol Pepper, founder and CEO of Pepper International.

Very good, Carol, Thank you so much for We really appreciate it. Carol Pepper, founder and CEO of Pepper International.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on Applecarclay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

The Alextel Paul Swooney live here in our Bloomberg Interactive Broker Studio streaming live on YouTube as well, and starting today, the video presentations of Bloomberg Intelligence and Balance of power. We'll be running live on Bloomberg Originals. That's on your smart TV, Roku TV, Samsung TV, all that kind of good smart TV stuff. So we're there as well. So we welcome that audience to Bloomberg Intelligence. Philolando Joins is here, chief equity market strategist and head of Client portfolio Management at Federated at Hermes. Phil, it seems like, you know, this market has retraced much of its peak to trough fall here just over the last several weeks as we get maybe a little bit more clarity on the tariffs, but a tremendous amount of volatility down then up. Where do we go from here?

The Alextel Paul Swooney live here in our Bloomberg Interactive Broker Studio streaming live on YouTube as well, and starting today, the video presentations of Bloomberg Intelligence and Balance of power. We'll be running live on Bloomberg Originals. That's on your smart TV, Roku TV, Samsung TV, all that kind of good smart TV stuff. So we're there as well. So we welcome that audience to Bloomberg Intelligence. Philolando Joins is here, chief equity market strategist and head of Client portfolio Management at Federated at Hermes. Phil, it seems like, you know, this market has retraced much of its peak to trough fall here just over the last several weeks as we get maybe a little bit more clarity on the tariffs, but a tremendous amount of volatility down then up. Where do we go from here?

Good morning, Paul, Thank you very much for having me back. I think you've hit the nail on the head that the volatility over the last six weeks, looking at something like the vixendix as an example, you know, went from like fifteen to sixty and is now back in the mid teen so the volatility is completely round tripped. Same story with the equity market. You know, from the Liberation Day announcement on April second, market dropped like fifteen percent and then over the course of the last six weeks or so, we've rallied, like I don't know, twenty one to twenty two percent. We've gotten all the money back. So we're now, you know, back ahead of where we were. And so now, you know, I guess investors are asking the question, well, what's next. You know, we're heading into what typically is a seasonally sluggish time of the year, you know, the sell and may go away period, you know. But the underlying fundamentals of the market I think are going to be driving the bus here, and what has lately improved the prospects of the market are two things. Number One, we're making some positive progress with the tariff negotiations, you know, with the UK and China, and the hope is that there's another you know, a dozen or eighteen or so countries that are sort of in the mix now and we'll get some positive announcements in coming days or weeks. And then second is that when you actually look at the data that that you know drives the market, we've got this ongoing tug of war, you know, between the hard data which has been which has been fine, and the soft data, the sentiment data, which has been terrible. So what yeah, yeah, go ahead, Alex, I'm sorry well doesn't.

Good morning, Paul, Thank you very much for having me back. I think you've hit the nail on the head that the volatility over the last six weeks, looking at something like the vixendix as an example, you know, went from like fifteen to sixty and is now back in the mid teen so the volatility is completely round tripped. Same story with the equity market. You know, from the Liberation Day announcement on April second, market dropped like fifteen percent and then over the course of the last six weeks or so, we've rallied, like I don't know, twenty one to twenty two percent. We've gotten all the money back. So we're now, you know, back ahead of where we were. And so now, you know, I guess investors are asking the question, well, what's next. You know, we're heading into what typically is a seasonally sluggish time of the year, you know, the sell and may go away period, you know. But the underlying fundamentals of the market I think are going to be driving the bus here, and what has lately improved the prospects of the market are two things. Number One, we're making some positive progress with the tariff negotiations, you know, with the UK and China, and the hope is that there's another you know, a dozen or eighteen or so countries that are sort of in the mix now and we'll get some positive announcements in coming days or weeks. And then second is that when you actually look at the data that that you know drives the market, we've got this ongoing tug of war, you know, between the hard data which has been which has been fine, and the soft data, the sentiment data, which has been terrible. So what yeah, yeah, go ahead, Alex, I'm sorry well doesn't.

Say something, Where does that? Where does that leave us?

Say something, Where does that? Where does that leave us?

Well, we're we're we're we're looking for more, you know, Where's like again, the hard data that we saw last week, you know, CPI and PPI data was fine. The retail sales for the Marparol season up five point two percent year on year versus three percent a year ago. So the the consumer data is fine. But then additional sentiment data, the HMI, the housing data is terrible. The the Michigan data was terrible. And so now the next big data point we're going to get this week is you know, the claims data. Uh, this is the survey week for the main jobs report, so incrementally what investors are looking for. It's okay, well, what's the next data point? You know, how do we how do we sort of complete this giant jigsaw puzzle. There are some folks like us who think that this situation is going to continue to improve, that we'll get more countries that will sort of fall into place with the tariff negotiations, and the heart data is ultimately going to prevail. The soft data will sort of fade. But there are other folks that you know, are looking at the other side. Of the coin are saying that the good hard data is going to dissipate, and then it's the soft data that's pointing in the right direction. So the short answer is alex right now, no one knows and they're just waiting for more incremental information to sort of form that picture.

Well, we're we're we're we're looking for more, you know, Where's like again, the hard data that we saw last week, you know, CPI and PPI data was fine. The retail sales for the Marparol season up five point two percent year on year versus three percent a year ago. So the the consumer data is fine. But then additional sentiment data, the HMI, the housing data is terrible. The the Michigan data was terrible. And so now the next big data point we're going to get this week is you know, the claims data. Uh, this is the survey week for the main jobs report, so incrementally what investors are looking for. It's okay, well, what's the next data point? You know, how do we how do we sort of complete this giant jigsaw puzzle. There are some folks like us who think that this situation is going to continue to improve, that we'll get more countries that will sort of fall into place with the tariff negotiations, and the heart data is ultimately going to prevail. The soft data will sort of fade. But there are other folks that you know, are looking at the other side. Of the coin are saying that the good hard data is going to dissipate, and then it's the soft data that's pointing in the right direction. So the short answer is alex right now, no one knows and they're just waiting for more incremental information to sort of form that picture.

Now nobody knows. That probably includes the Federal Reserve. Don't you think, Phil, how do you think they're preceding these days?

Now nobody knows. That probably includes the Federal Reserve. Don't you think, Phil, how do you think they're preceding these days?

Well, exactly right. I mean you look at the last FOMC meeting where Powell basically said we're going to take a wait and see approach like two dozen times because they're waiting for more data. They're waiting for clarity of the picture. And the bond market, which you know, a couple of weeks ago, was thinking that we're going to have three or four cuts in the back half of the year. They now think we're we're only going to have two, with the first cut maybe not coming until the September FOMC meeting. Because the thing thinking is that the FED needs more data to be able to figure out what their next policy move is. Our position here at Federated Hermes is that the FED will cut, give us two or three cuts in the back half of the year. Maybe that first cut comes to the July meeting, because the economy is slowing down, but the labor market's not collapsing. And as we saw with the CPI, the retail and the wholesale inflation data last week that the inflation data is pretty good. All of that suggests that the federal reserves should be reducing interest rates in the back half of the year, and we're pretty comfortable with that position.

Well, exactly right. I mean you look at the last FOMC meeting where Powell basically said we're going to take a wait and see approach like two dozen times because they're waiting for more data. They're waiting for clarity of the picture. And the bond market, which you know, a couple of weeks ago, was thinking that we're going to have three or four cuts in the back half of the year. They now think we're we're only going to have two, with the first cut maybe not coming until the September FOMC meeting. Because the thing thinking is that the FED needs more data to be able to figure out what their next policy move is. Our position here at Federated Hermes is that the FED will cut, give us two or three cuts in the back half of the year. Maybe that first cut comes to the July meeting, because the economy is slowing down, but the labor market's not collapsing. And as we saw with the CPI, the retail and the wholesale inflation data last week that the inflation data is pretty good. All of that suggests that the federal reserves should be reducing interest rates in the back half of the year, and we're pretty comfortable with that position.

Before I let you go, are you surprised about the non market reaction to the Moody's downgrade.

Before I let you go, are you surprised about the non market reaction to the Moody's downgrade.

I'm sort of surprised that Moody's was as late to the party as they were in terms of when, you know, Fitch and s and P made their downgrades years ago, And in my mind, I'm asking the question, if Moody's is down grading now, where were they, you know, over the last three or four years when inflation spiked up to the highest levels in forty years. Why are they picking this moment as opposed to, you know, perhaps a more reasonable moment a couple of years ago. So I don't know what to read into that.

I'm sort of surprised that Moody's was as late to the party as they were in terms of when, you know, Fitch and s and P made their downgrades years ago, And in my mind, I'm asking the question, if Moody's is down grading now, where were they, you know, over the last three or four years when inflation spiked up to the highest levels in forty years. Why are they picking this moment as opposed to, you know, perhaps a more reasonable moment a couple of years ago. So I don't know what to read into that.

All right, Phil, thanks so much for joining us. Always appreciate getting your thoughts. Fill Orlando, chief equity market strategist and head Client Portfolio Management, and Federated Hermes joining us there.

All right, Phil, thanks so much for joining us. Always appreciate getting your thoughts. Fill Orlando, chief equity market strategist and head Client Portfolio Management, and Federated Hermes joining us there.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple, Cocklay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

All right, Alex Steel, Paul Sweeney live here on Bloomberg and Arctia Broker Studio streaming live on YouTube as well. We're also on Bloomberg Originals. To check us out there on your smart TV. Let's talk Apple, Let's talk AI. I mean, we've all followed Apple for twenty thirty four years. They don't miss very often. They kind of get the PC, they get the phone, they get the gadgets. But boy, even to this person who doesn't really follow that closely, they're not getting AI. And I think I wonder if just what extent that's the problem. Our next guests will help us out there. Mark Herman, Managing editor for Global Consumer Tech for Bloomberg News. He's based in LA but he's here in New York's. We got him in studio. You've got a Bloomberg BusinessWeek big take story out today on Apple, and they're just kind of missing AI. What's going on in Coopertino as it relates to AI.

All right, Alex Steel, Paul Sweeney live here on Bloomberg and Arctia Broker Studio streaming live on YouTube as well. We're also on Bloomberg Originals. To check us out there on your smart TV. Let's talk Apple, Let's talk AI. I mean, we've all followed Apple for twenty thirty four years. They don't miss very often. They kind of get the PC, they get the phone, they get the gadgets. But boy, even to this person who doesn't really follow that closely, they're not getting AI. And I think I wonder if just what extent that's the problem. Our next guests will help us out there. Mark Herman, Managing editor for Global Consumer Tech for Bloomberg News. He's based in LA but he's here in New York's. We got him in studio. You've got a Bloomberg BusinessWeek big take story out today on Apple, and they're just kind of missing AI. What's going on in Coopertino as it relates to AI.

Well, philosophical differences, mismanagement, and the biggest thing is they were blindsided when generative AI with chat, GPT and GitHub launched back in twenty twenty two. November twenty twenty two, I'm told Apple Intelligence wasn't even an idea back then. Why, well, they missed the boat.

Well, philosophical differences, mismanagement, and the biggest thing is they were blindsided when generative AI with chat, GPT and GitHub launched back in twenty twenty two. November twenty twenty two, I'm told Apple Intelligence wasn't even an idea back then. Why, well, they missed the boat.

But how I mean, I mean, I don't understand.

But how I mean, I mean, I don't understand.

Yeah, well, clearly there was philosophical disagreement, in philosophical dis interest in the topic of artificial intelligence. I write about how Craig Federighi, Apple's senior VP of software engineering, doesn't really believe in these multi billion dollar projects. He tends to try to shut down or steer away from projects of that sort, and AI is something of that nature. AI is quite a bit messy. They're known for the very intricate and well designed user experiences. AI sometimes with hallucidations, can take away from that. But I think they didn't think it was going to be as big of a thing as it became today. A lot of it fell on deaf years years ago, I'm told. But really, this is a company that's known for updating their operating systems once a year. It's known as a company that focuses on the minutia, and they missed the big picture here with artificial intelligence, and it really is a shame. You know, the big picture here isn't the AI capabilities of its devices today. The big picture today is the AI capability of future hardware. If you don't have the core technology, the AI ready to go at a deep level, how are you going to develop products like humanoid robots, smart glasses, watches in AirPods with depth sens and cameras for AI purposes. Can't do any of that if you don't have that technology. So they need to seriously turn this thing around quickly or are they're going to be in big trouble. This is as core technology as the touchscreen.

Yeah, well, clearly there was philosophical disagreement, in philosophical dis interest in the topic of artificial intelligence. I write about how Craig Federighi, Apple's senior VP of software engineering, doesn't really believe in these multi billion dollar projects. He tends to try to shut down or steer away from projects of that sort, and AI is something of that nature. AI is quite a bit messy. They're known for the very intricate and well designed user experiences. AI sometimes with hallucidations, can take away from that. But I think they didn't think it was going to be as big of a thing as it became today. A lot of it fell on deaf years years ago, I'm told. But really, this is a company that's known for updating their operating systems once a year. It's known as a company that focuses on the minutia, and they missed the big picture here with artificial intelligence, and it really is a shame. You know, the big picture here isn't the AI capabilities of its devices today. The big picture today is the AI capability of future hardware. If you don't have the core technology, the AI ready to go at a deep level, how are you going to develop products like humanoid robots, smart glasses, watches in AirPods with depth sens and cameras for AI purposes. Can't do any of that if you don't have that technology. So they need to seriously turn this thing around quickly or are they're going to be in big trouble. This is as core technology as the touchscreen.

Wow. I mean, first of all, how many words is this story, dude?

Wow. I mean, first of all, how many words is this story, dude?

Six thousand?

Six thousand?

Yeah?

Yeah?

This is a long, well story, folks. So if you wantn't get smart on AI and Apple, you got to read the story. It's in the Bloomberg Business Week, It's on the Terminal up shirts everywhere else as well.

This is a long, well story, folks. So if you wantn't get smart on AI and Apple, you got to read the story. It's in the Bloomberg Business Week, It's on the Terminal up shirts everywhere else as well.

Mark.

Mark.

What can they do if I'm an investor, That's the only question I have for Tim Cook. Can you guys catch up and get some of that AI pixie dusk in your stock?

What can they do if I'm an investor, That's the only question I have for Tim Cook. Can you guys catch up and get some of that AI pixie dusk in your stock?

Yes, they need to make acquisitions, and they need to up the percentage of that R and D budget tied to AI. They need to up that percentage. They need to allocate more of their hires to AI as well. So they need to go bigger, go home on this.

Yes, they need to make acquisitions, and they need to up the percentage of that R and D budget tied to AI. They need to up that percentage. They need to allocate more of their hires to AI as well. So they need to go bigger, go home on this.

And I think did they know that?

And I think did they know that?

Do you think?

Do you think?

Yeah?

Yeah?

Of course they know that.

Of course they know that.

Okay, how do they go big?

Okay, how do they go big?

You got to spend more money. AI is really one of the only things that you can buy your way into when it comes to this technology, right, you can buy your way into it. You just need to throw billions and billions at AI training. They need to make probably some tweaks to their privacy policy. Right, they have so many devices, They have more devices than anyone else as a single brand of a hardware company, of any company in the entire world in the history of the world. But they don't leverage that because of their privacy stand So maybe make some tweaks there to be able to collect some more data. Maybe figure out a way to convince people to give up some of their data for this purpose, and I think that could go a long way for them. So spending money collecting more data.

You got to spend more money. AI is really one of the only things that you can buy your way into when it comes to this technology, right, you can buy your way into it. You just need to throw billions and billions at AI training. They need to make probably some tweaks to their privacy policy. Right, they have so many devices, They have more devices than anyone else as a single brand of a hardware company, of any company in the entire world in the history of the world. But they don't leverage that because of their privacy stand So maybe make some tweaks there to be able to collect some more data. Maybe figure out a way to convince people to give up some of their data for this purpose, and I think that could go a long way for them. So spending money collecting more data.

Is there somebody out there that they could buy, should buy, that would leapfrog them? Do you think I hate doing that though?

Is there somebody out there that they could buy, should buy, that would leapfrog them? Do you think I hate doing that though?

Right?

Right?

Well, the problem is this philosophical disgust. I would say to making these large acquisitions. If I told you, I mean, you know this is true, so maybe you're not good. Example, But if I said to someone who didn't know the company as well as you too, would you believe me if I told you that Apple's biggest acquisition in the history of the company was three billion dollars.

Well, the problem is this philosophical disgust. I would say to making these large acquisitions. If I told you, I mean, you know this is true, so maybe you're not good. Example, But if I said to someone who didn't know the company as well as you too, would you believe me if I told you that Apple's biggest acquisition in the history of the company was three billion dollars.

I actually believe that much.

I actually believe that much.

Well, you believe that because you know that, But I think if you ask people who didn't know that, that would be completely unbelievable. Yeah, they make these small acquisitions, and in addition to not wanting to spend big bucks on a company, they're really poor at integrating companies. The Beats integration, integrating all those engineers into the company, Disaster Intel, they bought the motim unit for a billion dollars back in nineteen Disaster, what is it going to feel as an AI person at Apple today. If you're bringing if the company buys your replacement to bring them in, it's not going to be fun. There's enough turf wars as it is at Apple.

Well, you believe that because you know that, But I think if you ask people who didn't know that, that would be completely unbelievable. Yeah, they make these small acquisitions, and in addition to not wanting to spend big bucks on a company, they're really poor at integrating companies. The Beats integration, integrating all those engineers into the company, Disaster Intel, they bought the motim unit for a billion dollars back in nineteen Disaster, what is it going to feel as an AI person at Apple today. If you're bringing if the company buys your replacement to bring them in, it's not going to be fun. There's enough turf wars as it is at Apple.

So they do then have to do it internally. They've still not done well at that.

So they do then have to do it internally. They've still not done well at that.

They've got to do both. They got to make the acquisition. They got to just deal with that. They got to make their biggest acquisition ever, and it has to be for AI, maybe multiple acquisitions. They have to turn things up a notch internally as well. They're going to be making changes. I mean, there's so many philosophical disagreements. The biggest is about chatbots. When it comes to AI. They are allergic to AI chatbots. They don't like the technology. They don't think open AI has staying power. So you're yes, I know, I.

They've got to do both. They got to make the acquisition. They got to just deal with that. They got to make their biggest acquisition ever, and it has to be for AI, maybe multiple acquisitions. They have to turn things up a notch internally as well. They're going to be making changes. I mean, there's so many philosophical disagreements. The biggest is about chatbots. When it comes to AI. They are allergic to AI chatbots. They don't like the technology. They don't think open AI has staying power. So you're yes, I know, I.

Made a face when he said that.

Made a face when he said that.

Okay, you're going to see deeper integrations with other companies. They're going to see Google Gemini integration. I think next year you'll see Perplexity integration, maybe some Anthropic integration, maybe some Microsoft integration. But they're going to keep pushing and this is going to be a multi year thing. The biggest problems they were caught off. Guvernment's happened, so they had no head start on this. They're coming way from behind.

Okay, you're going to see deeper integrations with other companies. They're going to see Google Gemini integration. I think next year you'll see Perplexity integration, maybe some Anthropic integration, maybe some Microsoft integration. But they're going to keep pushing and this is going to be a multi year thing. The biggest problems they were caught off. Guvernment's happened, so they had no head start on this. They're coming way from behind.

Oh yeah, it's amazing. It's amazing. Now some people would say, hey, they're rarely first phones. Oh boy, when they decide to get into phones, they do it.

Oh yeah, it's amazing. It's amazing. Now some people would say, hey, they're rarely first phones. Oh boy, when they decide to get into phones, they do it.

That's the big difference. They were not first, and they're the worst.

That's the big difference. They were not first, and they're the worst.

Okay companies.

Okay companies.

Yeah, yea is the reason why I need to read the six thousand page word article.

Yeah, yea is the reason why I need to read the six thousand page word article.

Thank you, Thank you so much.

Thank you, Thank you so much.

Mark, really a pleasure. Mark German, Bloomberg News Managing editor for Global Consumer Tech.

Mark, really a pleasure. Mark German, Bloomberg News Managing editor for Global Consumer Tech.

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.

This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday ten am to noon Eastern on Bloomberg dot com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal.