Blackstone Bet on Chips Drove a Debt Boom That’s Upending Credit

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This is Bloomberg Businessweek Daily. Reporting from the magazine that helps global leaders stay ahead. With insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast. With Carol Masser and Tim Stenebeck.

Our next reporter has been looking into a Blackstone bet on chips that is driving a debt boom that is upending credit. And then another story. It's the Bloomberg big take today. Jane Street and rivals now fighting for AI power as they compete for an edge in the AI era. So let's get to it with Dina Bass. She is AI infrastructure reporter at Bloomberg News joining us from Seattle.

So much to get to with you, Dina. Tech and high finance, the intersection of such a lot going on. Blackstone really doubling down. Tell us a little bit about your story when it comes to their bet on chips.

Sure.

And it's not just Blackstone.

It's Blackstone, Apollo, pretty much all of the U.S.-based investors, alternative asset managers. And it's fascinating that you bring up the railroads because the AI build-out, a lot of people will look back to the railroads as an effective analog. There aren't that many analogs, and that's kind of why we're here. What's gone on is that for the longest time, we've been talking about cloud for more than a decade, but what was going on was the large investment-grade hyperscalers, Amazon, Microsoft, Google, they were basically paying for this build-out and for these chips, either with their own cash or their investment grade, so they can borrow.

On their own balance sheet.

Now that we have this massive build-out that also involves neoclouds, you know, who either don't have investment, you know, don't have credit ratings or aren't investment grade. We have OpenAI and Anthropic, don't have credit ratings. The question is, how are you going to enable those people to pay for the AI chips that they need for their business and for the AI build-out. And remember, those chips are several times more expensive than the data center builders that they go in. And so what we're writing about in this story is the industry that's kind of grown up around chip financing through SPVs. that four years ago pretty much didn't exist. There was one deal done for CoreWeave by Blackstone back in 2023 at $ 2 billion. Now that market

is tracking towards $ 1 trillion.

SPVs, of course, special purpose vehicles. I love, though, this is a long way, Dina, from how the story that you and Paula Seligson did when Blackstone executives asked Corweave's leadership, what is a GPU? Is AI real? That was a few years ago.

I think good questions in 2023 or good questions in 2026.

It still works.

Yeah, the second question is probably still there. I mean, I think it's less at this point, is it real? It's more of a question of Yes, we had this technology. Yes, people are interested in using it. How are these companies, can these companies sell services on top of it that will be profitable?

To your point about John Gray's comment.

The capacity demand is there.

He's 100% right.

Every single one of these companies that we're talking about are basically sold out. NVIDIA is sold out. Google is pretty much sold out of their TPU chips. CoreWeave is sold out of capacity. But the companies that are using these things have to figure out how they are going to sell services that are profitable ultimately, not just generating revenue.

Dina, I want to go, as Tom Keene would say, a little bit off script with this, but you cover AI infrastructure. So I haven't been able to get a definitive answer to this, but we were talking to Joe Weisenthal about the risks with this build-out just a few minutes ago. And one thing we didn't get to discuss with him was the idea of these processors getting more efficient, less energy intensive, and the tasks that will be required of them in the future will not actually require as much processing power. Is there some sort of Moore's law that is still in effect for the processors that Google and Amazon and Nvidia are building that will potentially in the future make it so, okay, it doesn't take as

much energy and it doesn't take as much compute and physical space to actually do what we think is going to need to be done?

These are multiple different questions.

I think the general consensus is that Moore's law is no longer operating. But to your point of, you know, there are people working on, there are AI chip startups working on lower power. So that's one issue, you know, requiring lower energy. space, it's going in all different directions, right? I mean, you know, Cerebrus' chips are bigger. Jensen Wong loves to talk about how heavy his chips are. Right now, I think, you know, I don't think we're there, but it's very hard to predict what chip innovation looks like in the future. Right now, where we are is that if you can throw more chips at a problem, you do a better job of training models, you do a better job of running your AI tasks. And so that's

That's why, and also these chips are good for, and there's been a lot of questions, and it relates to the debt as well, for how long these chips are good for.

People are writing them down over.

Five to six years, but we are starting to see that many companies are using them longer than that. But where it goes in the future, do they obsolete more quickly?

Are they smaller? Are they more energy efficient?

Given where we are in terms of energy demand, it feels like something's got to give there. There just isn't enough energy for all of this buildup. And all of these risks that you're talking about and the ones that you talked about with Joe are part of what are at play.

In this debt build out, right?

You have companies that are taking on selling, holding a lot of this debt without really knowing the answers to those questions. We're also seeing because there's this much, you know, debt in the market and there's more coming online, you know, a bit of a concern around like, do we get some sort of, for lack of a better word, constipation in the debt markets where there's too much you know, for the market to bear. And it's, you know, it's pushing up prices for everybody else, not just the AI guys.

It's part of why companies like Corwe want to access the investment grade markets. Part of why we have these SPVs that are put together by NVIDIA and by Broadcom is because those are investment grade that, you know, those mechanisms let the people borrowing access the investment grade debt pools.

Carol, this is why we love Dina, because she uses the technical term for the market, like conservation.

Something I think everybody can understand.

You know, I want to ask, what's the Metamucil? Is it a bubble bursting? But let's not go there. I just think, right, this is so fascinating. The depreciation, also that the demand continues. There's a lot of things that have to happen for all of this to pan out. Let's go on over, though, because we don't want to not give this time as well. The Bloomberg Big Take.

You and Kat Doherty and Justina Lee talks about Jane Street and rivals fighting for AI power. They're building even their own data centers. What do we need to know about this story? We highly recommend everybody go to the Bloomberg or Bloomberg.com to check it out. But Dina, take it away.

Sure. I think when we talk about customers for AI, customers for these really interesting, cutting-edge AI chips for the data center power We so often focus on the AI native companies, the AI labs, the open AIs, the anthropics, the tech customers. And there is a huge major customer segment in the market makers and high frequency traders. And that is because more than many other industries, an extra 0.03 seconds of speed when you're a market maker, when you're running models, when you're running trading algorithms is worth a tremendous amount of money. And so you see, you know, Jane Street, Hudson River Trading, Citadel Securities, both, you know, developing cutting edge data centers, you know, experimenting with some

of the, you know, newest AI chip startups, products, you know, companies like Etched, like Positron. And additionally, they're also investing in a lot of those companies. So, Everybody that I just mentioned, they all have stakes in various interesting cutting-edge AI startups and fields like chips, infrastructure, cybersecurity, AI models.

And it's because for them, some of this technology that they're purchasing, a lot of it is early.

Some of it can be more expensive as a result.

But if they can figure out a way where it lets them do the business of their company, the Matching trades, the running models, the developing models, if it lets them do it even a little bit faster, better, faster, cheaper, that is really important for them.

Stay with us.

More from Bloomberg Businessweek Daily coming up after this.

Well, a top executive at Anthropic has warned that mass cybersecurity disruptions are about to, quote, get a lot worse before they get better due to AI's ability to uncover serious cybersecurity vulnerabilities. So, you know, what we're talking about a lot this week is PHP, which I don't think was on anybody's radar.

Not mine.

It's two critical software flaws in the open source programming language, PHP. That discovery led to governments and companies pulling down their websites as a precautionary measure to prevent hacking. I was listening to some news last night, and it was just reminding me about the banks, the big banks, and what they are doing.

You know where the agents can't get your money? Under your mattress.

No, for the first time I was like, shh.

I'm saying, you know, bury it in your backyard.

Put it in the safe.

Yeah.

All right.

Let's see what our guest has to say.

Jay Chaudry is back with us.

Pattern CEO of Zscaler joining us from, uh, joining us actually, uh, from Austin today.

Good to have you back on the program.

Um, I want to talk to you a little bit, just about, you know, we catch up with you every few months and the rate of change with this technology is so quick at this point.

I'm just curious about.

How you view maybe the total addressable market for cybersecurity as a result of the development of LLMs.

What is that in your view right now?

I think I have to say shortly, it is large, but it's getting larger and larger. Without putting any numbers, let me give you the data point. All business runs online. Everything is interconnected. So cyber has to play a bigger and bigger role, especially in the light of all these serious vulnerabilities that are in place. But the one point I want to make is when AI comes in, you can't keep on doing all type of security to fend off these new threats. You need to look at a different approach. And that's what Zscaler is excited about.

Well, one of the things I want to ask you, Jay, from your perspective, and this is your world, when you say larger and larger, is it that AI in terms of these vulnerabilities that they will reach more and more like with, are you talking depth in terms of the impact, the troubles that it can ultimately create, which kind of freaks me out.

Right.

So, so both actually getting broad, take PHP. It's widely used over 70% of websites. So it's very wide, but the then second part is depth. How serious is the vulnerability? That gets measured on a scale of 1 to 10. This is sitting at a 9.4. I think those things will happen. The question is, how do we protect ourselves?

Everyone is focused on patching and patching and patching. No one has done patching ever. So while patching is important, I think you need to look at things differently.

I'll give you an example.

If your house gets attacked every day, Are you keep on building a moat bigger and bigger and bigger moat?

No, it doesn't work. You need to figure out what's the new approach.

The new approach is if your applications can be hidden behind some kind of cloud and exchange that we built, bad guys can't even find you. If they can't find you, they can't attack you. So that's a different way of doing it. That's number one. Number two, when all these offices are connected to each other, The bad guys get into one office.

That's the contagion part, right?

Keep going.

Yes, yes.

That's the contagion part.

It's like if a bad guy lands in New York City from outside and this bad guy or, say, a terrorist gets on U.S. highways, there's no light. They can go anywhere. That's the part that spreads it out. For that, you need to bring zero trust. If we do these two approaches... In addition to patching, we've been in good shape.

I'm an optimist. I think human ingenuity is wonderful. We think we can protect our customers, and we are doing it. By the way, we ran 450 research assessments for our customers, and they're getting in.

A better and better shape.

But also, in the last 24 hours, our research team found 1,200 unique attacks that are launched on the PHP servers.

And those things will happen.

We need to get proactive with newer approaches, not old firewall-based security.

Jay, I think a lot of people, you know, they want to protect themselves, but you're sort of only as safe as perhaps the cybersecurity software or the precautions that whatever service you're using is taking. People aren't, you know, there has to be that layer built into the products and services that we as consumers use. But is there something else that we can do if we want to be the ones to make sure that our accounts are protected, to make sure that our digital lives are protected in this environment?

What is it?

Yeah, it's a twofold question. One for consumers. There's only so much consumers can do. In phishing and all, we used to tell them be careful. But for PHP, Once they get into the website, these guys can take over the website and the game is over.

So for consumers, it's harder.

But for enterprises who are building the applications, better application, they have better protection.

Our focus is actually enterprises.

And we are working with some largest companies to provide them extra protection on top of PHP layers. So they may be using PHP, but we become the front end in front of them. So bad guys can't even discover those applications.

You know, when you think about the addressable market, though, for cybersecurity, enterprise versus consumer, I mean, which segments would get a boost versus a slowdown, perhaps?

Enterprises need it because they're running business with it.

Just makes sense.

Consumers generally have been slow and behind.

But they are connected increasingly, right? I mean, this, again, goes to the contagion. Like, we had. Uh, the owner, the founder or the CEO of lead a bank.

Right.

Um, and we, she talked about using agents, but was not ready to let an agent necessarily into her bank.

Yeah.

Jackie Reese's.

Yes. Jackie Reese's. Thank you, Tim. And so, um, I, but I do wonder as all of this increasingly gets connected, how that exacerbates the opportunity for problems.

It does, but I don't expect consumers to be very tech savvy and cyber savvy. I expect banks or all these retail sites to be more savvy.

We already talked to retailers and banks.

I won't let all these agents come in and keep on transferring money and the like. The better security guardrails are being put by enterprises so that consumers can be protected. Making consumers totally educated about these new agents showing up every day It's not very practical, but enterprises can do a better job.

But get ready for more.

Are you scared, Carol?

I am a little scared. Jay, should we get ready for more just quickly?

It is coming. More threats are coming, but we need to be ready. I think our customers, enterprise, are getting ready. That's the good news. It's a board-level discussion, CEO-level discussion. I was with two large banks in New York on Wednesday, the day this thing broke out, and they were taking it very seriously. And we're working with them to make sure they remain safe.

Stay with us. More from Bloomberg Businessweek Daily coming up after this. Ray Madoff is a professor at Boston College Law School, the author of a book. It was out last year. It's called The Second Estate, How the Tax Code Made an American Aristocracy. And she joins us here in studio.

Welcome, welcome.

So delighted to have you here in studio. And I have to say, it's not just Scott Kirby's comments. We've heard Jensen Wong of NVIDIA say, yep, it's time. It's also what's interesting, what happened with Meta this week and Mark Zuckerberg and a new class of stocks to cover his tax bill to keep him there because he's worried about Prop 40 in the state of California.

You know, what.

Do we need to first understand about the wealthy in terms of the reality of of how much they pay for taxes. You know what folks are saying, wait, the rich pay the bulk of taxes.

Yes.

Wealth versus income. It's an important distinction.

Absolutely.

And so I think that what's going on in this country is lots of people are sensing that our tax system is unfair. But what they don't know is how it's unfair. They hear things like the top 1% pay 40% of the taxes.

So then why would there be a problem?

And the issue is exactly this point you make, which is that people who have a job, who earn salaries, they pay income taxes and the highest earners pay the highest income taxes. However, the wealthy are able to avoid taxes because they are able to avoid taxable income. And that's because they don't rely on salaries. All of our famous rich people take salaries of like a dollar. And that's not because they're being honorable. It's because they instead want to be compensated through the growing value of their stock.

And so for people who have investments and inheritances, they have an entirely different tax system. And that tax system is utterly porous and really optional so that people who rely on investments and wealth They are able— and inheritances are able to avoid taxes altogether. And in this way, they are like the second estate of pre-revolutionary France, who were the aristocracy that were legally written out of the tax system.

And that's what we've done here. And the reason that statistic is so confusing— Legally written them out of the tax system.

So go ahead.

Yes.

And the reason that statistic is so, that's always being brought up by the Wall Street Journal and others trying to say, it's reason, so misleading is because the 1% they're referring to, it's not.

Jeff Bezos.

No, it's the doctors, it's the lawyers.

It's not Elon Musk.

Exactly.

They're not in that bulk of people who are paying the taxes.

And they're just as likely to be in the 40% of Americans who are non-payers of income tax as they are in the top 1% that are paid 40% of the income tax.

It wasn't always like this.

No.

And this is actually a relatively new phenomenon.

You've talked about how even during the Reagan administration, the 1980s, this was a completely different scenario.

What happened?

Absolutely.

And so what's interesting is that our tax system was written specifically to address the world of inequality. And it was designed to impose its greatest burdens on the richest Americans by having a high income tax, originally a tax limited only to the richest Americans, but then made progressive so that the income tax you had a higher rate, the more you earned. And on top of that, an additional estate tax, which was designed to make sure that the wealthiest Americans contributed the most because they had the most capacity. And two things happened. One thing that happened is that we shifted the ways that.

Companies shared profits.

Prior to 1982, the main way they shared profits was through dividends. And dividends used to be taxed the same as salaries and wages. And so you owned a lot of stock, you got a lot of dividends, you paid a lot of taxes. Now, that's not the case with our billionaires of today. Their companies don't share profits through dividends.

They have growing ownership value, growing value of their stock. And one big way they do it is by buying back their own stock. And prior to 1982, this was seen as price manipulation. Because when a company buys back its own.

Stock- Supply and demand, right?

Exactly. The value of the shares goes up.

It's such a big part. It's so fun. I don't know that I had realized or made that connection because we used to talk about dividend reinvestment plans, drips. That was a big investment strategy and it kind of has gone away. And it's just interesting. We're always like, why aren't those tech companies paying dividends? Well, so as we think about kind of where we are, I think there's another component to kind of layer on this is that individuals who are super wealthy are able to leverage that wealth politically. And whether that's to keep the tax code still favorable to them. Talk to us a little bit about that part of this.

So first of all, they're able to leverage their wealth politically. first of all, for.

Their personal use, right?

Because people say, well, they have to sell that wealth and pay capital gains, but they don't.

No, they just call the bank.

Exactly.

Call the bank, call a friend, call anybody who wants to lend them money and know that it's going to be very well secured and there's people lining up to do it. So they can get endless loans and they do to support their lifestyles.

Sorry, I just want to jump in here.

That's why I don't necessarily buy the argument from some of these folks in California who are opposed to Prop 40 that they'll have to sell shares of their company in order to pay that.

Exactly.

Well, couldn't they just call a bank?

Mark Zuckerberg, if he has to pay 5% tax, it'd be about $ 12 billion based on his net worth.

Wouldn't a bank loan him $ 12 billion?

I think with $ 150 billion or more of stock to secure it, I think that they'd be pretty comfortable.

Lending them that money. Wait, they're not going to worry that he's going to default, right?

Exactly.

Sorry, I interrupted you.

No, that's absolutely the case.

And then, of course, the other thing that's happening that we're seeing is a tremendous amount of really interfering in democracy. And this is a You know, so every day we open the newspaper and we see that another billionaire is trying to affect our politics, either by bringing in attack ads in other states or by affecting. I mean, the wealth tax is at least their issue.

Right.

But they're actually going way beyond that and just, you know, trying to advance their own business interests and.

Really undermining democracy.

All right, so go on the other side. Like, what's the debate? Like, I mean, I'm waiting to kind of get the hate mail. And people, like, will, like. Is it unfair? It's legal.

Is which unfair?

In terms of the tax policy. Oh, yeah. You know, you've had Republicans, Democrats, everybody weighing in. Like, I'm just waiting for someone to be like, oh, stop it. Like, you know, they do pay taxes. So you're going to hear they do pay taxes. Or they contribute in other ways to society.

Right.

Which is important, and I don't want to rule that out.

Right.

But first of all, I think I want to raise this other issue, which is the issue of the estate tax. Yeah.

Right?

So a lot of people say... Look, there is a, which there is, a 40% tax on all transfers in excess of.

$ 15 million, right?

So people are going to end up paying the tax. And what people don't realize.

They don't.

$ 30 million for married couples.

For everyone listening on radio, Tim and I are shaking our heads. No, they don't.

And the issue, and then people say, well, is the exemptions too high or the rates are too low? No, the problem is that the wealthy are able to avoid the estate tax altogether. because they have tools, tools that I teach my students, because that's the subject I teach, about how they take property that's worth a lot, how they shrink it down to be hardly anything while they slip it through to their heirs, and then have it pop up in full value on the other side.

The thing that blows my mind is the idea of what they can do with sharing stocks, right? Passing off stocks, I think you said, like investments, and that they can, I guess, through certain vehicles, and that their heirs can get it And at the current value.

Oh, yeah.

And don't pay any tax, they could sell it right away.

Yes.

And there's no capital gain. Sorry, I'm not.

Explaining it well. Yes, you're talking about step up in basis.

Thank you, step up.

And step up in basis is an issue, but it's much less of an.

Issue than people think.

Yes.

Okay.

Step up in basis is this idea of like, let's say, I'm sure you invested in NVIDIA and you've got $ 10 million worth, that's obvious.

Totally, yeah. $ 20 million, actually.

So if you were to give it away to somebody, if you were to sell it, you'd pay taxes on it, right? You'd pay $ 2 million in taxes. If you were to give it to someone, they'd pay $ 2 million in taxes. But if you were to pass it on at death, then... that basis is, and the person could sell it for $ 10 million and have no taxable income because they're treated as if they had bought it for $ 10 million.

At that price.

So this is this thing called step-up in basis. People love to say the problem is step-up in basis.

Is it not?

No, it's not the problem. It is an aspect of the problem.

But the bigger problem is the fact that we never require the tallying of the gains.

And this is unlike Canada.

Canada says that whenever you either give away the property or you die and you pass on the property or you sell the property, that person should pay the gains. Because even if you didn't have step-up in basis, let's say you gave your $ 500 million of assets, which I assume everybody has, to somebody and they had carryover basis, right?

If you could avoid estate and gift taxes.

You don't have to pay income taxes during your life because you borrow. They don't have to pay income taxes either because they borrow. The problem is the fact that we never require those gains to be recognized.

It just keeps going and going and going.

And the reason the estate tax is not doing its job is because... basically, the estate tax was, if I say estate tax, I bet you would be able to tell me the phrase from 1990, which is still in.

The air today.

Death tax.

You've got it.

Marketing.

Immoral double tax that hurts family farms and businesses, right? Okay. This campaign was so successful, funded by 18 of the country's richest families, that 36 years later, Congress has failed to close a single loophole in the estate tax because of this issue where the public has mixed feelings about it and believes it's a double tax. And as a result, it's like Swiss cheese and raises no money at all.

So then what's the right solution here? Here we are in the midst of an election season where the cost of living is dominating headlines everywhere. We've been talking about the K-shaped economy for five years at this point and rising inequality.

What's the solution?

The solution is we need to bring investments and inheritances into the tax system. For the investments, we can do what I talked about, adopt the Canadian rule, tax the gains whenever transferred. For inheritances, the problem with the estate tax is that Because it was imposed on the dead person, right?

For some people, it really was a double tax. They paid a lot of taxes during the life, and then we hit them with taxes. And what people didn't focus on was the recipients. And what we need to do is we need to get rid of the estate tax. And bring inheritances and gifts and life insurance into our income tax system. Decide that people should be able to inherit however much we think sounds fair.

It's a preference for inheritance if we want to give it.

And tax it as income?

And then everything else should be taxed as income. Absolutely.

Okay.

Just the same way that money found on the street or lottery winnings or prize money or a car that you win on a game show, everything is income. And the only reason these things aren't income is because they've been written out of the system on the assumption that the estate tax.

Was going to do a good job. And we know the estate.

Tax is doing nothing because in 2025, when Trump had the power to have a full tax bill that he wanted, they kept the estate tax.

The other thing is, though— Isn't part of also thinking about this is like, how do you value wealth? And how do you put, like, obviously if there's real estate or stocks, but then there's art and so on and so forth, like, how do we.

Fully get that picture? But we have a system that does it, right? Our estate tax has years and years of having rules specifically about valuation.

So it's there.

Because we've been doing it, yes, since 1916. So that is not a problem. I think it is too much of a problem. On the wealth tax area, one of the reasons, I think, is that if you were to have an annual tax, it's very different taxing things one time in a person's life than taxing them, than valuing each year. That really can be quite complicated to do.

Is there a political appetite for that?

I think definitely.

Why? Because we have a couple of reasons. First of all, one of the values of the California thing and of the ProPublica leak, which showed how all these rich people don't pay taxes— is that no longer does anybody say with a straight face, rich people are paying a lot of taxes. A lot of people know that they're not paying taxes. They might not know how, but they know that that's the case. And the other thing that we have is we have working class people are struggling. Somebody who earned $ 60, 000 as an Uber driver has to pay $ 13, 000 in taxes. That is a huge burden for someone trying to get by. And on top of that, we have this enormous, we had a deficit of $ 2 trillion.

Every year we're running these deficits of $ 2 trillion because we take in seven, we spend, we take in five, we spend seven. Do you know how much the richest 1% had when we couldn't cover this $ 2 trillion?

$ 50 trillion. $ 50 trillion.

And I'd say that it makes sense to say that, you know what, it matters if these people pay taxes.

Amazing.

Thank you.

Love, love, love.

We've already said to you we want to do more.

Excellent. I look forward to coming back.

Here's the thing you need to know about Carol. She lives in New Jersey and doesn't love the idea of paying a lot of taxes.

Who does?

Here's the deal.

I don't mind, but I now live in an area. I went to great public schools, grew up. Taxes were lower. in an area where we pay a lot of taxes, and the public educational system is not great. And it creates gaps in society, because there are people who can afford private, I think that's not fair.

You bring up a good point that I think we can talk about next time, and that's the idea of like, maybe starting to see what we're paying for as taxpayers. And it's frustrating to get on a subway and the subway not moving.

And the federal government can help the states because if the federal government broadens the base of the income tax, then it will broaden the base for state income tax purposes too. And so I think there's room for everyone to be better off with a fairer system.

Stay with us.

More from Bloomberg Businessweek Daily coming up after this.

Jessica Dupuy is with us. She's the co-author of Italianity.

She's a spirits writer, a food writer, a travel writer. She joins us here in the Bloomberg Interactive Broker Studio. I've had this book on my desk for months and people walk by and they're like, Oh my God, this is so beautiful.

It is beautiful.

You co-wrote it with Andrea Linardi, and it's all about the culture of Italian wine. And the good thing is, is if you only speak Italian, you can read it also, because every page is in English and Italian.

It's bilingual.

Why not, right?

It's very cool. Tell us about why you wanted to do this.

Yeah.

I mean, so Italian wine, right.

Let's face it.

Like Italian culture is all around us, whether it's pizza on the table once a week or more. Um, you know, it's something that is very much part of our lives here in America. Um, but at the same time, it's something that we kind of dream about. We all want to go to Italy. Everyone you talk to is like, Oh, I've been there. I haven't been there, but it's on my list, that type of thing. And with wine, it's something that, you know, it's on the table every night in an Italian family. And it's something that maybe hasn't been the case so much in America, but when we experience Italian life and Italian culture, it always becomes part of the conversation. So this book is about inviting people closer to the Italian wine culture. And it's more than

about just the soils and the climate and the grapes that are grown and the laws by which they have to be grown in certain regions. It's really about the stories of the people. and the place, and what did the uncle drink on Tuesday nights every week when he came over, that type of thing. So we wanted to kind of give a different type of voice to Italian wine that's more than just the academic side of things.

I mean, it's an actual journey, right? It's a journey. Tell us about some of the people that you met.

Okay, so one of the people that I got to interview for this, which was just kind of an iconic moment for me, was Piero Antinori. So many people know the Antinori name. And he is a, I want to make sure I get this right, his family's 27 generations older. of making wine in Tuscany. So we're talking like before.

27 generations.

Exactly.

That's a family tree.

I can't even imagine what it looks like.

I think we've had someone- That's a tall family tree.

I feel like we've had someone on too to talk about their vineyard or somebody, but anyways, keep going.

Yes, yes.

Well, they have, yes.

They make the news often.

They're an important voice and an important family for Italian wine on so many levels. But at the same time, speaking to people like Angelo Gaia, from the Piedmont area who put Barbaresco on the map.

This is a.

Person who in his early years was determined to be an entrepreneur, determined to find a way to make wine the lens by which he could do that. And I remember when I interviewed him and Piero Antinori, I asked them, hey, Who were the people in wine that actually inspired you? And both of them, without knowing that we even were talking, said that Robert Mondavi was someone who was an inspiration to them. And when I asked, I was kind of surprised.

I was like, of course, I mean, it's Mondavi.

We know it.

But I was like, why is that? And both of them said, because he gave.

Us the vision.

He gave us the ability to understand that it is possible to get Italian wine here. Into the hands of Americans, outside of Italian borders. And because of that, these are people who are pioneers in getting wine out into the world.

And if you really think about it, for American wines like Mondavi, like really across the country. It's interesting too, though, I've got to say, Jessica, that I find myself drinking more Italian wines. And I kind of love how the wine industry has been, I feel like, opened up. Smaller vineyards, different places that are different parts of the world that I'm drinking wines and loving them. And the same goes for Italian wines.

Yeah, I mean, Italian wine, it's easy, right? Because they're acid-driven, they're great wines to go along with food, and there's so much diversity from all the way up north in the Dolomite Mountains all the way down to Sicily. And there's so much to experience that... There's really kind of nothing you can't find that wouldn't be perfect for an evening or time out with friends.

Speaking of experience, come here.

You want to experience the wine?

Yeah.

Well, tell us what we've got here.

Yeah.

Where do you want to start?

We brought two different wines because I think they're important for what's happening in the market right now. So we have Zardetto, which is a Prosecco. I've had this.

This is great. Oh, you love Zardetto.

Okay, great.

So this is a great representation of a sparkling wine. We are talking about the fresh, fruity sparklers here. Um, that, uh, are enjoyable any day of the week. And I love to be able to kind of, I heard one person one time.

Oh yeah.

Cheers to you guys. Happy Friday. Yeah. Oh, it is Friday. Happy hour.

Indeed.

Um, So what I love about Prosecco is it's kind of like the champagne and jeans of sparkling wine, right? Like this is the Tuesday night sparkler. You don't have to think too much about it or invest too much in it. It's something you can enjoy without any guilt, if you will. But it's also a wine that we're seeing on the table in terms of cocktail culture. So if you're not drinking Prosecco on its own, you may be having it in an Aperol spritz. How many spritz did y'all see this summer on tables?

Exactly. I have a family who loves playing around with Prosecco and making holiday cocktails. You can do so much stuff with it.

The staying power of the Aperol Spritz has been amazing. This has been a staple for a decade at this point.

Yes, yes. Well, it's something that if people don't know or understand what's happening on the wine list, it's a go-to. It's something that they can be comfortable and know that they're going to like and enjoy. But it's also part of what's helped. Oh yes, so now you've moved on.

I'm getting ready. I do pizza every Friday.

Oh, well this is a perfect pizza. Tell me what we've got. This is really great. So this is from Valpolicella, which is a region that's known for Amarone. And Amarone is the big, rich, kind of sexy wine region. that's made from a blend of a few different grapes. And this is kind of like the baby Amarone.

Ooh, that's easy.

Yeah, Rapaso style. It's a richer kind of... It's easy drinking, but it's still got a little bit more complexity and body to it. But it's not going to be as expensive as an Amarone or not as powerful. So this is from the Zanotto family. It's called Ripasa, and it's in a Rapaso style.

So.

I want to make sure I get those two words not confused. But really nice juiciness to this.

Cheers to you guys.

This is a really lovely fruit forward, but at the same time kind of has nice structure.

Would be great with pizza. so if we are going to Italy where should we go real quick you got like 20 seconds I've got.

20 seconds to pick okay right off the top of my head I'm going to start to Sicily Ah, and good wines. Good wines. I love the wines from Mount Etna, which is an active volcano, so kind of a fun place to go. It feels a little dramatic because you see steam coming off of the volcano top, but the wines there are just exceptional.

This is the Bloomberg Businessweek Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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