Nvidia CEO Says Tech Stock Selloff Is a Buying Opportunity — The Pulse 6/8/2026

[00:00:00] Speaker 1: Newsmakers and market movers, this is The Pulse with Francine Lacqua. [00:00:21] Speaker 2: Well, good morning, everyone, and welcome to The Pulse. I'm Francine Lacqua here in London. Now, the Israel Defense Forces say it has struck what it calls military targets in Iran after the Islamic Republic earlier launched missiles towards Israel. Iranian media report explosions in Tehran and other cities, while President Trump had urged Israeli Prime Minister Benjamin Netanyahu not to retaliate against the Iranian attacks in a phone call on Sunday. Our Horizon anchor and Middle East correspondent Abir Abu Omar joins us from Dubai. Abir, what do these tit-for-tat strikes actually mean for the peace talks? [00:00:58] Speaker 3: Good morning, Francine. So, look, I mean, the ceasefire talks or the truce talks towards a broader deal were already fragile. And what we're seeing now is these new hostilities complicate the picture even further. And don't forget that this follows a week of hostilities that we saw in the previous week with Kuwait's main airport being targeted. And then those attacks between Hezbollah in Lebanon and Israel continued into the weekend. So, on Sunday, Israel attacked southern suburbs in the capital of Lebanon, Beirut. Hezbollah attacked northern Israel. And then a phone call took place between President Trump and Benjamin Netanyahu, prime minister of Israel, where President Trump told him not to retaliate. And then he went on in an interview and said that he calls the shots when it comes to the trajectory of the Iran war. But then what we happened to see a few hours later after Trump's comment was that Israel not only attacked Lebanon and the southern part of Lebanon, but it went on to attack Iran itself. So, cities like Debreze, Isfahan, and then a petrochemical plant in Iran was attacked, leading Iranian officials to evacuate personnel there. The latest we know is that the foreign ministry spokesperson, Ismail Baqai, came out and said that these new actions complicate the peace talks further. And they bring this distrust between the United States and Iran more into the picture, really. [00:02:25] Speaker 2: So, if you're President Trump said he calls the shots in a Financial Times interview, how will this latest attack affect his relationship with the Prime Minister Netanyahu? [00:02:36] Speaker 3: Yeah, so, look, I mean, we reported earlier and other outlets had reported that this relationship was in slightly, a slightly sensitive place over the past few weeks. Axios reported last week a phone call that was expletive laden between President Trump and Benjamin Netanyahu, because President Trump essentially wants a deal. to happen. He's been saying he wants a deal to happen. But I alluded to this a little bit earlier. And it's the fact that, you know, this phone call happens between President Trump and Netanyahu. And then, again, a few hours later, what we see happen is attacks from Israel's side, complicating the MOU, as we've been calling it over the past few months, that would lead to the gradual reopening of the Strait of Hormuz, and then an extension of the ceasefire for 60 days. So Israel's actions, again, bring this distrust to the table. And then Iran also reserves the right to respond, as it always says. Now the Houthis in Yemen have said that they will ban, they will issue a ban on all Israeli shipments in the Red Sea. And now, remember, the Red Sea has been so far immune from the disruptions that we've been seeing in the energy market. But now it comes to the picture as yet another waterway that's at risk, possibly bringing those energy prices further higher, Francine. So something to keep an eye on. The situation is evolving very, very quickly this morning. So we'll be keeping an eye out on this story. [00:04:03] Speaker 2: Abir, thanks so much. Abir Abou Amar there in Dubai with the very latest. Now, to the markets and fears of overheating in the AI trade have hit global tech stocks. Investors pulling back from the record rally. But the chief executive of Nvidia, Jensen Huang, says the sell-off that began last week is a buying opportunity. With respect to the stock price, everybody should be very [00:04:24] Speaker 4: excited. They can now buy stock at a cheaper price. And it's absolutely true that the future of AI is very bright. It is completely it is a fork on conclusion that AI will be infrastructure for the world. [00:04:44] Speaker 2: Well, joining us now is Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management. Maybe we're a little bit wary of chief executive saying how is the time to buy, which is why we get the experts. And Lindsay, like you, thank you so much for joining us. Let's start with central banks. Oh, sure. I mean, the picture for inflation. There's still many question marks given there's no end in sight in the Middle East. Yeah, I think there are question marks of the duration of how long this is [00:05:08] Speaker 5: going to be impacted. But I think there's a lot of clarity out there. For example, we have the ECB this week. We think that is absolutely a hike. And it's pretty interesting when you think about what's happened in this past year. This is on the one year anniversary of the last cut for the ECB. [00:05:22] Speaker 2: And really the difference here. What's at play is oil. Is it one and done for the ECB because we're hearing also from, you know, small and medium sized enterprises that are worried about this hike. They understand why the ECB has to do it. But does it put Europe Europe in a tricky position growth wise. It is not one and done in our view. That being said, we think there'll be data dependent. [00:05:44] Speaker 5: What's happening right now is about credibility. So the ECB has said we are going to go because of the conditions that exist. Certainly growth is softer, but it's really important to curtail inflation. So we think they must go. We don't think that the next meeting will also be a hike. But we do think there's a high likelihood that there could be a hike by the end of the year again. Where do you see opportunities in Europe. Sure. So it's actually not necessarily on the right side of the picture. But we actually think that there are some opportunities on the credit side. We're seeing metrics move in a good direction in the credit markets. And in particular we like securitized product. So CLOs in Europe as opposed to the U.S. give you about 20 extra basis points of spread. And we think that the technicals there are positive. And this is across Europe or there are countries that look more attractive than others. It's really across Europe and understanding the underlying collateral. Europe is in a better place than the U.S. in terms of software sensitivities. You started at the top of the hour talking about is it a buy opportunity when a CEO of a tech company tells you now is the time. We do think that the A.I. trade is definitely in train. But there is sensitivity in some pockets of the market. And European loans are in a better place than U.S. [00:06:53] Speaker 2: Lindsay talk to me a little bit about the U.S. I still haven't caught my breath after that payrolls number. It's like what is happening. It was a monster blowout number. [00:07:01] Speaker 5: We are seeing a three month moving average. They are well above a hundred thousand jobs. That is something that would typically mean that the unemployment rate is actually going to be moving lower. Yeah. So the labor market we think is strong. We don't think that it's overheat overheating or tightening. But it definitely took off the table any chance of cuts this year. [00:07:21] Speaker 2: We've pushed off our expectations of cuts to mid to next or late next year. And again is this really the A.I. play the fact that you know because of the CapEx investing equities are going up. [00:07:33] Speaker 5: People feel richer. So the spending continues. Yes. That's right. A.I. is a huge boom to the U.S. economy. We're already starting to see some things coming through in terms of productivity. But the big productivity we think is yet to come. There is absolutely A.I. euphoria in the U.S. and it is really driving the economy. That being said the jobs that were part of this monster number on Friday. They were in hospitality and leisure. Just to be clear they weren't in A.I. So we also heard from President Trump on the Fed or at least on interest rates. Here he is. [00:08:09] Speaker 6: Nowadays when you have good reports the market goes down because they think they're going to raise interest rates. There's no reason to raise interest rates. I don't want to kill success. We should actually lower interest rates. Now I would like to see rates get lower because we could build this into the greatest machine that the world has ever seen. But you can't do that when everybody immediately raises interest rates. So what happens again very difficult to cut rates in this kind of environment. [00:08:36] Speaker 5: What happens from now until the end of the year. So we think from now until the end of the year the Fed is on hold back to Europe. We don't think that that will be the case for the ECB or the BOE or Bank of Japan as well. U.S. we think will be on hold. But to be clear to go off of what President Trump said. We don't think the Fed is looking to derail success. Let's be clear. They're very focused on the economy. They have a dual mandate labor market inflation where we are right now with the different different undercurrents. We think that it's a hold. [00:09:05] Speaker 2: The U.K. seems to be the trickiest. Right. Because I mean if you look at some of the macro backdrop it's weakening. There's political kind of instability. What happens to the back. Is there a danger actually that they have to hike and then cut very quickly. So we don't think that they're going to go so aggressively. [00:09:23] Speaker 5: And I think that's the important thing. What's being priced in right now and all the different regimes across the world aren't more than one hike or what's typical. If you remember on the cutting cycle we had these monster cuts where it was more than 25 basis points. We'd see these just big safety moves because there was a concern about the perils of the economy. Back to the U.K. I think you've got two things that are working. You've got as you mentioned a softness in the economy that is concerning. You've got inflation that's persistent. It's a net importer of energy and we're in an energy issue right now. However the base rate is at a high place to begin. And that's different when you compare what the Bank of England is looking at and what the ECB is looking at. And those two things is really going to drive the difference between why the ECB is going in June. [00:10:06] Speaker 2: And the Bank of England is not. Is it. I mean do you find less opportunities in the U.K. given all of these complexities. Yeah. I think it's it's hard to be super excited about the economy. [00:10:16] Speaker 5: Right. Growth seems to be pretty pretty low. When we look at the whole world though we're looking at macro backdrop where we think right now that the U.S. is in a better speed. But back to what I mentioned before about specifically CLOs or finding an investment grade or a high yield corporate deal. We're looking across the whole globe to find those opportunities. And just because maybe a macro backdrop is softer doesn't mean that there aren't places to invest. Lindsay. Thank you so much for joining us. Lindsay Rosner. [00:10:42] Speaker 2: They're head of multi-sector investing at Goldman Sachs Asset Management. Now we also look at banking and shares in Monte de Paschi have jumped to their highest since 2022. 2022. This as Intesa San Paolo offered to buy the Italian lender for 30.6 billion euros just one day after a rival pitch from Banco BPM. The moves are likely to spur a new phase of deal making in Italian finance. Let's bring in Tommaso Eberhardt our Southern Europe Managing Editor Tommy. As always thank you for joining us. More consolidation in the Italian banking sector. So why isn't TESA making its move now. And how many hurdles will there be. [00:11:16] Speaker 7: 2022. Buongiorno Francine. This is the big move. We have all been waiting for years. Intesa San Paolo's Italy's Peace Case Bank has said for years we can't move anymore in Italy but we all knew a little bit that if something really big was coming it had to come via Intesa San Paolo. Why now and why Monte de Paschi now because the moment of consolidation is here. The banks are very solid after the latest move Monte de Paschi just acquired Mediobanca. So what Intesa is doing Intesa is making a bid to get control of Monte de Paschi and then gain control of the precious asset Mediobanca and of the stakes that Monte de Paschi has in Assicurazioni Generali. Italy is the biggest insurer. It is a big insurer. Intesa will keep half of the branches and sell the others to Unipol who is going to do a deal with its bank Banca Popolare dell'Emilia Romagna and call the new bank Monte de Paschi. So essentially Intesa is getting control of the jewels that Monte de Paschi has now which are Mediobanca and the stake in Generali. Again Generali is at the center of this deal too. And again Generali is now now as different shareholders and Intesa is going to be one of the biggest after this deal. Yeah just having you pronounce Italian names makes me happy. But Tommy Banco BPM also proposed its own deal from Monte Paschi. So how do the bids compare. So Banco BPM didn't make a proper deal so far but just an intention to merge with the Banca with Monte de Paschi. They sent a letter yesterday at lunchtime. Maybe someone had understood that Intesa was coming with a bid and then tried to do something before Intesa arrived like to keep open the field for a potential deal between Monte de Paschi and Banco BPM which is a deal we have been discussed for years to create the third largest bank. Banco BPM has a big French investor credit agricole. So on one side we have a proper offer on the table with cash and shares. On the other we have a proposal to do a deal. Monte de Paschi and we know the board should be meeting today. They will say something. But clearly as things stand now we see Intesa San Paolo as somehow the top candidates to get Monte de Paschi [00:13:45] Speaker 2: at the moment. Tommy thank you so much Tommaso Ebbard there with the very latest of course on Italian banking. Now coming up live from London Tech Week we'll discuss AI adoption in Europe with the multiverse founder and chief executive you and Blair that exclusive interview is up next. And this is Bloomberg. Thank you. It kicks off today as leaders in technology and business meet to discuss how the UK can be a success in the world of AI. While our very own Tom McKenzie is there for us with a guest. Hi Tom. [00:14:48] Speaker 8: Francine, thank you very much indeed. Yes, I'm here at London Tech Week. We can hear the prime minister speaking and of course standing by right now for a view on what is happening in the tech ecosystem is Ewan Blair, co-founder, CEO of Multiverse. It's a company that helps corporates globally to upskill their workforce with AI tools. Ewan, thank you for your time. Let's start on the topic of the day, which is, yes, we're here at London Tech Week. The prime minister speaking. But investors are concerned about a sell-off that we're seeing in AI-related stocks right now. How do you think about the question marks around an AI bubble and AI bubble bursting risks? Are you concerned about the build-up we've seen, the run-up that we've seen in some of these AI-related names? [00:15:27] Speaker 9: So you're seeing this kind of massive bifurcation in the market. Basically, the market is splitting into AI victims and AI beneficiaries. And the race is kind of do you position yourself as one of the AI beneficiaries or are you put in the category of AI victims like a lot of the software world is at the moment? I also think it's kind of it's always easy to say we're in a bubble and there are lots of bubble-like behaviors and everything else. So this one, unlike others, is backed by pretty extreme revenue. Does it feel bubbly and frothy to you? It does a bit. Yeah. Yeah. In terms of the kind of the excitement, look, we're dealing with a transformative technology that people realize could change everything. But at the moment, it is delivering quite limited value to most organizations' P&L. And so for us, right, this is the bat signal for how do you actually drive AI adoption and get workers doing their jobs differently and make sure this turns into the kind of great productivity revolution it should be. [00:16:18] Speaker 8: Are you still convinced that we do get those productivity gains? And what is the lag between investment and getting that ROI? [00:16:25] Speaker 9: So it is basically not really a technology problem. You're seeing organizations spend millions, in some cases billions, on AI tools, AI tokens. And yet kind of getting your workforce and using and playing around with AI is pretty trivial in the grand scheme of things. The big question is, how do you get workers rebuilding their workflows around AI, positioning those tools as central to how they work and measuring it against what are the three things every company cares about? Revenue generation, cost avoidance and cost reduction. And that requires skilling and training on the job, which is really what we're doing. We're saying to organizations, you know AI can give you incredible opportunities. You're not yet experiencing them. Let's train your workers so you take advantage of it. And it's not as easy as saying, you have a budget for token use on inference. Go do it. And then you realize they've blown through their budget or they haven't used it. Well, the Uber example, of course, is pretty front of mind at the moment. You are seeing a lot of those. And the reality is, as we start to see kind of repricing in the cost of tokens, the question will be, how do I make my AI use purposeful rather than how do I get people using AI? Because one is basically directly beneficial to a business. The other can end up costing them a lot of money. You recently raised another 70 million U.S. dollars. How are you deploying that capital? What are the expansion plans at Multiverse? So we're spending it on a lot of European expansion. We just acquired at the end of last year Germany's largest data upskiller, a company called Stackfuel. So we're on the ground in Germany. We're looking at other European markets. We're also investing very heavily into our own internal agentic capabilities. And Europe is such an incredible opportunity for us because Europe has this really robust social contract between employer and employee. It is quite difficult to fire employees. That provides some kind of ballast against this kind of potential jobs apocalypse. But Europe will end up in a state of structural decline if we have workers on the job with no more capabilities than they have previously. So this is kind of compelling European governments to really try and drive mass reskilling and retraining on the job. And that's very exciting. What is the TAM or the total addressable market of the market that you're targeting? So look, you've got 450 million people in Europe as a kind of first pass. We're dealing with nearly every kind of worker in every sector and industry. Nuclear, energy, retail, financial services, government, public sector. And all of them have workers that need retraining. And our message is if we're going to make sure that humans are benefiting and maintaining human agency in the wake of AI and automation, we've got to train those frontline workers on the job who have the thing that AI struggles with the most, which is context. If you don't have easy reads on context, which your frontline workers do because they're literally doing the jobs at your company, your AI efforts will storm. [00:19:12] Speaker 8: As I've said, you are on the coalface of this, particularly when it comes to the labor market. Which jobs are most vulnerable, do you think, and which can be preserved and reinforced? [00:19:19] Speaker 9: So there are two things I always think that we tend to get very wrong. One is when we say these are the exact skills you're going to need in the next couple of years because it's changing so fast. It was not that long ago everyone was saying we need everyone trained in prompt engineering. This is the most important thing. It's barely a flicker in the kind of AI revolution. It is going to be every job. And the organizations and workers that are going to benefit are the ones who basically figure out with this technology, how do I make it purposeful? How do I apply it to solving business problems, and how do I make sure that this isn't just a kind of top-down board mandate, but my workers are doing their jobs differently? And that requires pretty intensive on-the-job training because you cannot learn about this stuff through a series of YouTube videos or even in a classroom. You have to learn about it by deploying it in your environment because the risks, benefits, and challenges to deploying AI within a defense company versus a large multinational financial services company versus a small local authority are just wildly different. Again, your workers have the ability to kind of do that. You've got to unlock it within them by investing in their training. You're obviously based here in the UK. You've raised the good thing in capital. [00:20:25] Speaker 8: Can the UK compete and win without data centers, without energy? How much of a vulnerability are those aspects to our potential ability to grow and scale? [00:20:36] Speaker 9: So it is a challenge. Look, I don't, you know, everyone knows this. The UK has incredibly high industrial energy costs. It is not realistic that we're going to build a plethora of data centers and kind of win the AI infrastructure battle. I don't see that happening. I do think, though, with a highly educated workforce and the sort of third way we're taking between kind of complete lack of regulation in the US and pretty heavy regulation in Europe, we've got a chance to chart a course where we can become the most AI-adopted nation in the G7 with the most and fastest AI-adopted workforce. And we can do that without significant job losses? Yes. If, though, we're prepared to retrain people because the reality is, of course, jobs will decline. But humans, we spend a lot of time trying to make sure that we can build T-shaped individuals. They might have deep domain expertise, but AI is commoditizing expertise. So how do you give them the broad horizontal scales that allow them to start to transition into different areas? [00:21:31] Speaker 8: And you're leaning into agentic AI. Does that mean your customers and clients will be using your agentic products to help train their workforce? Yes, absolutely. [00:21:38] Speaker 9: Does that mean you at Multiverse will need lower headcount going forward? Not really, because we're still hiring. I mean, we're adding another 200 or so jobs this year. We've just opened an office in Edinburgh. We're really excited about that. We don't see ourselves needing fewer employees, though we can scale much faster without just having to add heads. And interesting, the kind of AI story so far has been humans training machines to get smarter. We're spending a lot of time using machines, as well as our human coaches, to train humans to get smarter. And we think that's a better way around. Because, basically, when we end up reading the history books on this period, the big question will be, did we maintain human agency in the face of incredibly intelligent and powerful technology, or did we just trade it away? [00:22:20] Speaker 8: Very briefly, one thing that you would do if you were the government to accelerate the growth of our AI and tech ecosystem. [00:22:28] Speaker 9: So, there's been a lot of talk about workers' rights and various other things from governments, obviously, institutes and changes there. I think the single most important right for workers would be a right to re-skill. If we committed to allow every worker to be re-skilled and re-trained on the job, not only would we unlock the kind of productivity gains that we just haven't seen, right, 20-year relentless march of software tools, and yet productivity stagnated because we haven't trained people, we'd also help prevent this job's apocalypse. You and Blair, thank you very much, indeed. [00:22:56] Speaker 8: Co-founder and CEO of Multiverse. Fran, back to you. [00:23:00] Speaker 2: Tom, thank you so much. Great interview. Tom McKenzie there with the Multiverse Chief Executive of London Tech Week. Of course, Tom will be back a little bit later, the UK AI minister. Coming up, the fallout from the Middle East conflict has been front and center at the Ayata annual meeting. We'll have more on the future of the airline industry next. This is Bloomberg. Well, good morning, everyone, and welcome to The Pulse. I'm Franci Laqua here in London, and these are your top stories. Iran and Israel exchange fire, threatening a fragile ceasefire in the Middle East as talks to end the war falter. Oil surges. The tech trade fades, but the NVIDIA chief executive calls the sell-off a buying opportunity, saying the build-out of artificial intelligence has just begun. Plus, banking M&A back in focus. Intesa San Paolo launches a 31 billion euro bid for Montepaschi just a day after rival Banco BPM proposed its own deal. So, oil jumping on escalation in the Middle East. Now, the Houthi group says it will impose a complete ban on Israel in the Red Sea following retaliatory strikes against Iran. The flare intentions come as the Strait of Hormuz remains effectively closed, choking off crucial energy supplies to global buyers. Well, I'm now joined by our Middle East energy correspondent, Anthony DiPaola. Anthony, good morning. So, what reactions are we seeing with the price of oil? [00:24:30] Speaker 1: Good morning. Yeah, the price of oil is rising because we did see some actual exchange of fire between Iran and Israel overnight, the two countries launching missiles, one against another. So, that's going to obviously lead to a jump in the oil price as traders react to that escalation. Then we did see, this morning on top of that, the news that the Houthis will be targeting Israeli vessels. So, so far we have seen the Houthis remain out of this phase of the war. They haven't really gotten involved. And there have been some points where they have engaged, you know, against Israel with some other attacks. But we haven't seen them fully get involved in the war and targeting shipping in that crucial Red Sea area. They can and have in the past targeted vessels in the Bab-a-Mandab, which goes between basically the Indian Ocean and the Red Sea and is a vital link for trade, even more so now because we've got Hormuz blocked and none of those vessels or a very few vessels coming through Hormuz compared with normal traffic under normal times. So, that Red Sea area is really important for, particularly for Saudi Arabia's crude exports, which are going from the ports around Yanbu on the Red Sea coast. The Saudis have a large refinery just to the north of the Yemen border there, which is producing products, refined fuels that are going to markets. So that Red Sea area really remains key for markets, particularly with Hormuz shut. So we're really going to be watching that. But so far, no impact on shipping yet, Francine. [00:26:11] Speaker 2: Anthony, thanks so much for the terrific update. Anthony DiPaola. Now, the world's top airline bosses have also been meeting in Rio de Janeiro for the annual general meeting of the International Air Transport Association. Now, IATA Director-General Willie Walsh says air travel demand remains strong despite the economic headwinds. [00:26:30] Speaker 10: I genuinely don't believe what we're seeing is a crisis in the industry. I think this is going to be a bit of a challenge. But the general economic environment, I think, although weaker than it had been, is still positive. Demand for flying continues to be pretty robust, to be honest with you, despite everything we've seen. And I would expect that to continue through the years. So, you know, personally, I see this as a challenging environment. But by no means is it a crisis for the industry. [00:27:02] Speaker 2: Bloomberg's Guy Johnson is there for us. Guy, good morning or good afternoon. What are key things on airline executives' minds at the moment? [00:27:11] Speaker 11: Well, they're talking about what you've just been talking about, Francine, with Anthony, what is happening with the fuel price. That is absolutely front and center for all these airline CEOs. Willie Walsh talks about it not being a crisis. It may not be a crisis yet. So far, the oil price has gone up. Demand has held up okay. But nobody is looking too far ahead at this point in time. They say they've got enough fuel for the summer, but that's only kind of the next few weeks. And nobody, nobody is ruling out a big price hike from here in terms of the fuel price. And as a result of which, and I caught up with Ben Smith of Air France, KLM, to talk about this very subject. He will not rule out the fact that we could see further fare hikes from here. [00:27:54] Speaker 12: If the fuel significantly spikes, we're going to have to raise ticket prices to compensate for that. And when you raise ticket prices, there will be less demand. So the need for the full capacity that we had planned is probably not going to be going to be the case. [00:28:15] Speaker 2: So, Guy, once we get out of the summer and fuel is still expensive, are all the airlines going to make it? [00:28:22] Speaker 11: Well, that's the big question. So, is everybody going to make it? It's certainly one of the other topics that people are talking about here. And that takes you on to the idea of consolidation, Francine. The big airlines with the strong balance sheets are probably the best positioned to survive this. But there are plenty of airlines out there around the world, certainly around Europe. They've got slots and they've got aircraft that they could potentially be taking deliveries from. They're valuable businesses, but they may not survive because they can't hedge. They don't have the balance sheet. They don't have the capability to survive this kind of a crisis. So, the big groups are starting to get ready. Air France, KLM, Lufthansa, and IAG. IAG, Iberia. It's got British Airways. It's got Aer Lingus in the stable already. And I caught up with Louis Gallego, who is the CEO of IAG. And he is already starting to look maybe at the autumn and maybe looking at opportunities for consolidation. [00:29:19] Speaker 13: We always say that this crisis can help to consolidation because we started this in a very good position with a very strong balance sheet, 15% of margin. So, with the hedging, others, they don't have all that. So, at the end, they are going to have problems. And what we want after this crisis is to be stronger, to show again that how resilient is IAG. And I am sure we can have opportunities. [00:29:51] Speaker 2: So, Guy, logically, the big Gulf-based carriers, Qatar, Emirates, and Etihad, would also be amongst those struggling. Is that really the case? [00:30:00] Speaker 11: Well, I think, no, they're not going to be, so, potentially, they are going to be looking at opportunities here. They're going to be looking at some of these struggling situations and maybe looking to take some of the opportunity out of it. In theory, they should be struggling. You're absolutely right, Francine. In theory, these are the airlines at the epicentre of the action right now. They've had to close down their airspace. They've been obviously seeing fewer and fewer people coming in to the region, certainly at the corporate level. Tourism maybe starts to pick up a little bit. So, in theory, they should be struggling. But in reality, what they're looking at is a situation where they think they can actually do better out of this. And it's really fascinating that they think they're going to come back. They think they're going to come back stronger. They're going to be able to get through this crisis. They've got super-strong balance sheets. So, logically, they would be the ones that are struggling. But they don't see it this way. And, in fact, I was caught up with Etihad, CEO, and what he said is, we are on the phone every kind of few days to Airbus and Boeing, and we're asking them, do you have slots available to give us actually more aeroplanes rather than less? We want more aeroplanes because we see the expansion coming. And what they're now starting to see is that the weaker airlines, some out of Asia, some from elsewhere around the world, are giving up those really super-valuable delivery slots that Airbus and Boeing has. And Etihad is saying, we want those and we'll take those. Listen to what the CEO had to say. [00:31:26] Speaker 14: We're ordering planes right now to be delivered between 28 and 2032, and we're getting positions of airlines that are giving up. These ones that we're getting right now are new, are not secondary, but we're open for secondary planes. [00:31:43] Speaker 2: Guy, thank you so much. Great work there on the ground early in the morning. I said good afternoon, but actually it's very early in the morning. Our Guy Johnson, the trooper, of course, in Rio de Janeiro in Brazil. Now, HSBC Chief Executive Officer, Jorge Alhedri, says the GCC has emerged from recent turmoil with its resilience strengthened, boosting confidence in the region's long-term growth prospects. Now, he spoke exclusively with us at the HSBC-GCC exchange conference in London. [00:32:12] Speaker 15: The region has gone through testing times. Inevitably, we wish for better times to come. But what we could see is that the core activities carried on, and more activity should and would be expected as things normalize. I think what's most important, Francine, is that the resilience of the GCC has been revealed following these testing times. And, you know, this is years and years, if not decades and decades of preparation, economic transformation, pro-reform policies, wealth accumulation, great partnerships that have been built, technology that's been utilized, which has been revealed now, and that resilience being revealed is just another driver of confidence in the long-term opportunities that the region offers. [00:33:01] Speaker 2: What happens if this gets unresolved in the next couple of years? Again, does it suddenly pick up when things are resolved, or will companies find ways to do business IPOs and M&A despite everything that's going on? [00:33:16] Speaker 15: I mean, what we've been observing already over the last three months, first, is the strong resilience that has been built, and that's now been revealed. But we're also observing a lot of investment in additional resilience in the region. We're seeing investment, you know, in infrastructure capabilities, in, you know, in policies and the business environment to support the long-term opportunity that this region brings to all these investors, and, of course, us as a main partner for all of them. [00:33:46] Speaker 2: George, you've also just come back, I think, from six months, actually, in Asia. So your commitment there is unwavered as it grows bigger and more important. Have you seen any activity move from the Middle East to Hong Kong? [00:33:58] Speaker 15: Well, we're very pleased to see that Hong Kong now has become the leading cross-border wealth management center in the world. And we've been calling this out for now a number of years, and we've been hoping that this happens, and expecting that this happens before the end of the decade. And look how fast this has happened. This is clearly very encouraging. We see a number of Asian hubs also pick up, be it a wealth hub role, or be it regional treasury centers for our corporates. The region, you know, the wider Asia regions remains, you know, massive structural growth story. And if you believe that the world globalization has been reconfiguring, where we're moving away from large point-to-point corridors into more of a multi-nodal network of connections, then a number of these economies, certainly the GCC economies, but also a number of Asian economies, ASEAN, you know, China, India, become even more central to how the, you know, how economic growth can be delivered. [00:35:08] Speaker 2: Well, that was the HSBC Chief Executive Officer, George L. Hedry, speaking to me earlier this morning. Coming up as a legal and regulatory landscape of AI and tech evolves, we'll discuss how the UK is approaching the topic with the government's AI and online safety minister. That's coming up next, and this is Bloomberg. Now, the head of the IMF says the world needs to build foundations that can withstand more frequent shocks. Since taking the helm in 2019, Kristalina Gyorgeva has navigated one global crisis after another. On the latest episode of Leaders With Me, Francine Lacqua podcast, Gyorgeva also told me that the AI revolution should not repeat the inequalities created by globalization. [00:36:08] Speaker 16: We collectively did not appreciate the backlash against globalization that came from the fact that, yes, the world economy is doing better as a whole, but many communities were held out because their jobs disappeared and there was not enough attention to them. I'll tell you what I'm very keen not to see repeated is the same with artificial intelligence. I hope we will have learned this lesson, and as we move very rapidly into this world of artificial intelligence, we will pay attention of who benefits and who doesn't. Whose job is that? Because it's very difficult. It's going so fast. I can tell you how we define our job. Number one, impact of AI on productivity. Number two, impact on labor markets. Number three, impact on financial stability. And in these three areas, we offer very sound analysis and we offer signals of what may be coming for everybody to use. [00:37:26] Speaker 2: So if you just focus on leadership and AI, this is a very tricky situation because you're either an optimist and you think that politicians are here for the good of the people or trying to make a difference. You're either a pessimist on politicians and you see, okay, they just want to be popular and be reelected. But now you've given the power of AI to companies that are here to make money. [00:37:48] Speaker 16: It's hard to say we have given them the power. The honest assessment is that they have moved very rapidly. We need to have more attention to the fact that three different regulatory models are emerging with regard to artificial intelligence. The European, the American, the Chinese. It has to be the responsibility of the United Nations system to bring these three models so they can coexist and we can run the developments in artificial intelligence more responsibly. [00:38:33] Speaker 2: Does it change, you think, the leadership of countries or the leadership of prime ministers and presidents? Because they don't have any control over it. They don't have the levers even to do anything about this. [00:38:44] Speaker 16: They actually do have levers. We should not give them a pass. They have regulatory authority over data. They have regulatory authority over how the profits from AI can be distributed in society. So exercise it. One thing that excites them and gets them to move is risks to financial stability. It's something that we have responsibility to identify and then offer solutions. What can we do? [00:39:17] Speaker 2: And the full interview has a global release on Bloomberg TV later today and that's at 10 p.m. UK time. Now, the UK government says it's determined that the country will not be left behind in the AI race. The future of the sector is under discussion as technology leaders gather for London Tech Week. Our Tom McKenzie is there for us today. Hi, Tom. [00:39:39] Speaker 8: Fran, thank you very much indeed. Very pleased to say I'm joined by Kanishka Narayan, the UK minister for AI. Sir, thank you for your time. Francine was just outlining some of the announcements that you and the government have made this morning. Top of mind for me really is what you've announced around hardware and supporting UK semiconductors. What are the details? What money are you putting into play? What are the potential opportunities? [00:39:59] Speaker 17: Tom, it's an incredibly exciting start to London Tech. We have announced a major hardware plan and the crux of it, we are going to re-industrialize Britain to make sure that Britain's got a place in the AI chips world. So in particular, the prime minister's announced just now 400 million for the British state to buy top-tier chips made by British companies. That's going to be really critical. Alongside that, we're expanding the Scaling Inference Lab, a facility that validates chip quality quickly and British start-ups are first in the queue when they're coming to sell as well. So real money, but also real capability. [00:40:30] Speaker 8: That is a big ambition, the re-industrialization of the UK. And you will hold to that commitment. You'll be tested on that in the years ahead. And you're confident that that's going to happen? [00:40:38] Speaker 17: I am very confident of it. And not only because it's a promise for the future, but because it's grounded in our heritage and our past. The fact that a Labour government under Callaghan backed in Moss, spawned the semiconductor cluster in Wales and led to the creation of companies like Arm, Graphcore, the entire cluster in Bristol is about AI. This is in our past. It's in our heritage. It's going to be in our future. [00:40:59] Speaker 8: We have, on semiconductors, we have to pick our spots, don't we, Minister? We're not going to be producing an NVIDIA or an AMD in terms of GPUs that dominate the training and inference of some of these large language models. Where can the UK play? Where can the UK have an advantage and create material growth and scale in semiconductors? [00:41:21] Speaker 17: Tom, you're totally right, which is over the last 15 years, this country fell behind in terms of reviving its heritage and chips for the future. What we are doing is saying, of course, today we have to partner with NVIDIA and AMD. They're great partners for us. We're announcing a series of things with them today. The best we're placing are for the future. And for the future, we're placing two types of bets. One, we think inference is going to be critical. Companies like Fractile are going to have a great future. We want to be right behind them as well. Two, we also think we want to play some big bets for the longer term. Things like Photonics, which are the next generation of bets that you make, which if they take off will mean that Britain is right at the frontier as well. They're great companies, great academic strengths in those areas as well. Companies like Olix, for example, we're placing both of those bets. [00:42:02] Speaker 8: The 400 million commitment doesn't sound like a significant number when you're thinking about an NVIDIA with a market cap of north of 4 trillion just for one single company. What do you hope that 400 million does? Do you hope that private capital gets led onto that? What are your conversations with private capital with long-term growth funds that could help accelerate that shift? [00:42:23] Speaker 17: Well, Tom, that's the first crumb we're laying at the start of the trail in London. It is a crumb. It's a crumb. And so there's a lot more to come in the hours ahead. There are more crumbs to come. On hardware in particular. And so you should watch out for that. But look, there are two core principles. One, Britain's got absolute frontier ambition when it comes to chips. We understand the scale of the requirement there. But the second thing to say is we want public value for money. The conversations I've had with private investors, almost half a billion raised by fractal and OLEDs in just the last few months. So there's a lot of money pouring into this in British chips. We want the British public sector to play its role appropriately but in a proportionate way to make sure we're reaching the frontier. [00:42:58] Speaker 8: How can we win if we don't have the infrastructure or the energy? [00:43:02] Speaker 17: Well, we can't. And that's why we're building them. [00:43:04] Speaker 8: But our energy costs are three times that of the U.S. How do we solve the energy piece that will power the data centers of the infrastructure? [00:43:10] Speaker 17: By being very, very focused on the deals that we need to land rather than the kind of big picture concern that people bring up on this question. But we need to bring down, we have to bring down energy costs. [00:43:19] Speaker 8: Of course, of course. That's the case. North Sea oil could play a role? [00:43:22] Speaker 17: Well, I actually think if you speak to anyone trying to build a data center over the next 12 months, the idea that North Sea oil turning on might do something or not in a few years' time is actually not here and all that. The big picture thing is we are making reforms that accelerate data centers. AI growths in this country get first dibs on the queue. They get savings shared back if they build in the North East and Cumbria in areas of excess generation. There's plenty of demand in this country and the crux of it is getting people onto the grid quickly rather than thinking about a long-term political debate on North Sea or not. So from my point of view, the dealers roll up our sleeves and get these deals done today so that Britain can secure its future. [00:43:55] Speaker 8: talking of politics, when I speak to people in this ecosystem, they do interface with you. They interact with you and broadly, people are very positive about what you and the team have been doing to try to help this ecosystem. But the question is, will you be in place in three months or six months given the political volatility here in the UK? I mean, the political instability is a challenge, isn't it? How much of a headwind is that? [00:44:18] Speaker 17: Well, the big picture, Tom, is that I think over the last 18 months in this government, we have had a very clear execution. We have delivered 75% of the AI plan that we set out. We're going to get to 100% and get it over the line. And from my point of view, every day I'm in this job, I'm running up my sleeves with the team, getting as much done as it. [00:44:34] Speaker 8: Andy Burnham says he would take a tougher role or a tougher look at regulation around AI. Should we be regulating more? [00:44:42] Speaker 17: I think the crux of it from an AI point of view is how do we build trust and keep our people safe? This morning, his prime minister has announced a major plan on device level support to make sure that children are protected from child abuse. We have acted to make sure that when Grok was nudifying women and children's images, we acted fast. We were one of the first countries to get that overturned. And so, again and again, we're focused on outcomes, the mechanism of delivery, people can debate in the context of elections. What I'm focused on is delivering outcomes for the British public. [00:45:08] Speaker 8: An EU approach to regulation would be the wrong prescription for the UK around AI. [00:45:12] Speaker 17: Well, look, I think one of the things I've most valued is the British public's appetite for pragmatism. And I think that is the defining philosophy for this government. We want the best security trust for the British public when it comes to AI. We will pursue the mechanisms that make that deliver rather than looking at obsessively the mechanism for how we get there. [00:45:29] Speaker 8: How much disruption in the jobs market should we be bracing for at this point? [00:45:33] Speaker 17: Well, look, here and now, I think we're running ahead of our skis a little bit on the jobs concern. Frankly, the biggest thing is how many jobs can we create here and now and how can we support young people in every part of the country? Long term, I think there is a big question to be asked because AI is transformational and I think the speed and scale of this will be very, very significant. The task for us is how do we get on that bus and turn the steering wheel in the direction of British values and support for the British public. [00:45:57] Speaker 8: What specifically does that mean? What policies are you putting in place around jobs in the labour market? [00:46:01] Speaker 17: Well, a really critical thing the Prime Minister has announced this morning is a new tool to bring frontier technology to the dignity of people in every part of this country. So we will now match millions of people in every quarter in this country who look for new jobs. They will be better supported into the best paid jobs by using AI. Young people outside of education are at risk of dropping out before GCSEs. They will be supported because the frontier of technology under this labour government will be put to the dignity of labour in every part of this country. [00:46:27] Speaker 8: Minister, you were a former venture capitalist yourself. Concerns again about an AI bubble and AI bubble bursting. We're seeing that in the public markets today with a significant sell-off. Is this a bubble and is there a risk that it could burst? Is it looking frothy to you, minister? [00:46:40] Speaker 17: Well, let me... The caveat is this. A bubble is a dispersion of price relative to value. What I'm focused on is delivering value for the British public regardless of where the pricing is in terms of the equity markets. But look, the second thing is of course we're continuing to look at whether or not the equity context is one where there are financial concerns for the wider British public. We will continue to do that. From my point of view, it's a kind of constant chaser of the tail. Do you think valuations [00:47:03] Speaker 8: are looking stretched? Trillion dollars for open AI, $10 for anthropic? I change my mind on this [00:47:08] Speaker 17: like the markets do on a pretty 24-hourly basis. I think the crux of it is the new normal is volatility. Whether the price is the right level or not I think is an open question. We're all trying to figure that out. The volatility of it I think is an enduring feature. And so we want to make sure that Britain and the British public in particular rise that volatility in a stable way from a public point of view. Minister, thank you very much. [00:47:28] Speaker 8: Great to be here. Indeed for your time. Ganeshka Narayan, the minister, UK minister for AI. Fran, back to you. [00:47:36] Speaker 2: Thank you so much, Tom. It was a great interview with, of course, the online and AI, online safety and AI minister of the UK. Now, there's more to come from London Tech Week in the next hour. Tom will also be joined by Sikandar Rashid, Brookfield's head of AI infrastructure. That's at 10.40 a.m. London time. In the meantime, we're hearing from the Intesa chief executive, Carlo Messina, saying the Paschi offer is not a response to the Banco BPM bid. Mr. Messina also saying we had no interaction with larger Monte Paschi holders. He has ruled out acquisition of Generali and he says the 3% of Generali is aimed at avoiding countermoves. Up next, we'll have plenty more on the markets, on banks and geopolitics. Bloomberg Brief. This is Bloomberg. [00:48:22] Speaker ?: Thank you.