Trump Addresses Iran Meeting, AI Worries at United Nations

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0:09 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.

0:32 In case you didn't notice, the 81st UN General Assembly, yep, it is underway here in New York City. A high-level general debate kicking off this Tuesday. Anyone trying to get in and around New York City knows this all too well.

0:43 Tim was kind of stuck.

0:46 Oh, my gosh.

0:47 Listen, take it from me, somebody who's lived here for 17 years, try to avoid Midtown during UN General Assembly week. I made the mistake of getting off at Fifth Avenue and 53rd Street and trying to have a leisurely walk over here to the office.

1:00 Not going to happen.

1:01 No, I went right back.

1:02 I actually got stuck more so than I've ever been stuck before in a crowd of people. Like, they had us crowded into pens in a corner. Like, we couldn't move south, we couldn't move west, we couldn't move east.

1:12 And New Yorkers do.

1:14 Set the tone.

1:15 They took it in stride, right?

1:17 Let's just say.

1:18 Not so much.

1:19 Yeah.

1:19 People were not happy about it during the height of rush hour this morning as the president was making his way to the U.N.

1:24 Well, that brings us to President Donald Trump, who did find himself at the U.N. addressing it once again this morning, addressing the delegation, and once again, really justifying his decision to go to war with Iran.

1:36 Yeah.

1:37 But I have a big decision to make.

1:40 Will a deal be made with Iran that lets them rebuild and create a far greater country than it ever was before, maybe one of the greatest in the Middle East or even the world? Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again? Do I drive them into hell with no chance of survival and no hope of future greatness or generations?

2:14 But I believe we'll make a deal.

2:17 Right after the election because it doesn't make sense for them not to.

2:22 All right.

2:24 That, of course, is President Trump earlier addressing the delegation at the U.N.

2:27 This morning. Also at the U.N.

2:30 Is Tyler Kendall.

2:31 She is Bloomberg News Washington correspondent. She's at the UN Rose Garden. Tyler, my goodness, those are two extremes. It does beg the question, and it does look like he was very pointed in terms of addressing the Iranians who were there. First of all, what's the intelligence? We just had a headline crossing that the president had a meeting with Iranians. What do we know about that and kind of where we are when it comes to the relationship or negotiations to end this war between the US and Iran?

3:04 Well, Carol, the redhead crossing the Bloomberg terminal moments ago was that President Trump confirmed that U.S. officials met with an Iranian delegation here at the United Nations General Assembly. He said that the meeting lasted about three hours. It's unclear exactly who participated in this meeting, though he did nod to his special envoys who are here with him, including Steve Witkoff and Jared Kushner. In fact, there was a comment from the special envoy, Witkoff, saying that he feels, quote, very good right now. And they framed the talks as being constructive. I will also point out that we heard from the EU's foreign policy chief also confirming that she had a meeting with Iran's foreign minister as well. So

3:42 it does appear that there is a big push for diplomacy here on the ground. Importantly, though, if we track this timeline that the meeting took place. Today, over three hours, that would also align with Iranian state media issuing a new threat to any vessels that are crossing the Strait of Hormuz unauthorized, as they characterized it. They would be forced to pay a 20 percent fee related to the value of their cargo. So sort of some conflicting messaging here or whether or not that is perhaps part of Iran's negotiating leverage, as the feeling has been mounting frustration today.

4:15 with Iran not coming to the negotiating table. We are expecting Carol and Tim to get some more headlines later today. President Trump set to meet with regional Gulf allies who are here in New York.

4:27 Well, one thing I want to ask you when you talk about, you know, things that are said or done that seem to be maybe potentially a tactic of negotiation by the Iranians or perhaps by President Trump, if he's threatening to annihilate the Islamic Republic, should we read that as a negotiating tactic or as a threat?

4:48 Maybe a little bit of both at this point.

4:50 Of course, we've been here before with the president saying that he has this choice between diplomacy or escalation. Still, even in the president's remarks, though, he went on to say that he is urging Iran to make a deal. This administration has repeatedly reiterated that their choice is to instead pursue a diplomatic route. and to refrain from restarting kinetic action again. We've seen that, of course, with how the U.S. has framed its economic pressure campaign. We've seen that in the reporting that the U.S. has decided to stand down on any planned military action taken in tandem with Saudi Arabia against the Iranian-backed Houthi militants that are attacking Red Sea shipping. That, of course, comes along with

5:32 questions about U.S. military stockpiles. President Trump did tout the levels of weapons that the U.S. has, even as Bloomberg News had reported on Friday. that the U.S. is alerting allies that they could wait five years in delays to get their weapon shipments as the U.S. needs to refocus on revitalizing the defense industrial base.

5:50 Yeah, those weapon supplies here in the United States, something we're going to be digging in over this hour and really later hours here on Bloomberg Businessweek Daily. Tyler, thank you so much. Really appreciate the reporting there and inside. Tyler Kendall, Bloomberg News, Washington correspondent. She's there at the U.N.

6:04 at the Rose Garden.

6:04 Hey, we're staying on the global world order and what it means for global security to US national security. In President Trump's own words today at the UN, his decision to go to war with Iran is the action of a leader who refuses to let problems fester, making his case to the UN for a more aggressive US foreign policy.

6:22 While others have talked, I have acted. While others have spoken of peace, I have made peace. While others have ignored threats, I have confronted them. While others have talked of courage, America has shown it. While others have promised strength, I have used it to make America the most powerful country in the world.

6:47 That, of course, again, was President Trump at the U.N. addressing it earlier this morning. Hey, one member of the Bloomberg team tracking America's role and power in the world is here covering the U.N. General Assembly this week, reporting on and talking with various leaders. He is Nick Wadhams, Bloomberg News national security leader here in studio.

7:05 So good to have you here.

7:06 Are we, Nick, in the words of the president, the most powerful country in the world still?

7:12 How are we seen by leaders?

7:15 Well, that is actually a very complicated question to answer. I mean, economically, yes. Militarily, yes. But you do see this phenomenon of that the Iran war has really exposed, where Iran, country that is much smaller, many fewer people, much smaller economy, much smaller military, has.

7:33 Essentially been able to stand up to the U.S.

7:35 In the war. So you see how countries like Iran or fighting forces like the Taliban in Afghanistan can push back and really hold their own against the U.S. So certainly very powerful, but possible to undermine and undercut it.

7:50 Is that just because of the changing role of drones, the different ways that other countries have had to adapt their own offenses and defensive capabilities because they maybe haven't had weapons made by some of the biggest defense contractors available to them?

8:08 Right.

8:08 I mean, I think it's a question of, okay, if you have two countries going toe-to-toe against each other, the United States and China, maybe you could make a decision about which country is more quote-unquote powerful. But then you come to an issue of, for whom does this issue matter more? This is an existential threat for Iran. I mean, the Trump administration has essentially tried to wipe out the leadership of that country. Trump called on Iranians to rise up against their leaders. He killed the Supreme Leader. But, you know, ultimately, he has a lot of other commitments and a lot of other things he wants to do.

8:41 He wants this thing over before the midterms. So his commitment to really carry this out is questionable. Iran, on the other hand, has no choice but to keep fighting. So I think what you're seeing is they are exerting every lever of power they can, including attacking U.S. bases in the region and exposing U.S.

8:59 Vulnerability.

9:00 Nick, you've been covering administrations, different presidents, and then how the U.S.

9:04 Interacts with the world at large.

9:05 And in one of the Bloomberg stories, it talked about President Trump's address the second before the U.N. since he returned to the Oval Office in early 2025. how it comes at a very different moment of his presidency.

9:17 Is it a weakened U.S. president in the eyes of the world?

9:21 Well, you know, you could definitely make that argument. You know, last year it was sort of Trump ascendant because he had won re-election. He had won the popular vote. He remained quite popular. He had not launched these wars in Iran yet. he had attacked the Houthis, but the Iran war and also the Maduro capture where he went in and took Nicolas Maduro had not happened yet. So he was really going after other countries, but he was not in this position also where he's facing, I mean, from a domestic point of view, I mean, he's underwater in terms of his popularity and also the popularity of the war.

9:57 So it does feel like he's in a very different moment. where you have this possibility that Democrats are going to come in and really tie his hands. And you just didn't have the same sort of back and forth in the crowd. There was joking and laughter last year. He seemed like he was in good form. He was also very, very hostile. He said other countries were going to hell.

10:17 So it was a real moment for him in his second term. This time, he seemed a little less interested and invested. He seemed a little tired. He didn't get the sort of crowd response that he wanted. So a much more downbeat feel.

10:29 In the question of elections, and we're hard to believe we're six weeks away from the midterms at this point. I'm curious, though, You said if Democrats end up winning, and we actually cited some of the prediction market data that we've been seeing, which was just really shocking to me. The odds as of now, and look, a lot can change in the next six weeks. How would that change what the president is able to do with regard to Iran, with regard to the Strait? Because as we just played a few moments ago, he says he's expecting a deal just after the election. And look, things might not change until January. We're sort of like... projecting a little bit here, but curious.

11:07 I mean, the president has predicted many times that there's going to be a deal. Obviously, Iran has a big role and they have a say. So a lot of questions about whether that's even something he can deliver on. But what you, I think, will see is Democrats really pouncing in terms of oversight hearings, pressure on his administration, pulling people before Congress, various committees to essentially expose a lot of the thinking and deliberation in the run-up to the war, the boat strikes in Venezuela, the decision to capture Maduro, Trump's family business ties, what Don Jr. was doing with this Russian guy who helped pay for his wedding party. I mean, there are so many things they could do. So it's really going to focus a lot

11:51 of the attention of the American people and also the rest of the world on Democrats as playing spoilers. Chris, the big question with that is they can tie up his domestic agenda, but as we've seen with the Iran war, he can basically do whatever he wants.

12:04 That's right.

12:05 And so you may see that foreign policy becomes the one area where he remains truly invested.

12:10 What do you make, then, of the agreement with Greenland? Like, what that means? And I guess in his words, he said, this will start building two very major military bases in Greenland that will give the U.S. permanent control over security and all other needs on that territory. I believe the prime ministers of Denmark and Greenland had something to say about sovereignty.

12:32 Is still in our hands. But he did get that in.

12:34 What does that mean, really, for national security for the U.S.? Does it mean something significant?

12:38 Well, so, I mean, his administration, understandably, is calling this sort of a crowning achievement for him. And there is no question that climate change and Russian and Chinese pushes in the Arctic have sort of reoriented what we see as national security priorities.

12:57 In the Arctic. Of course, the U.S.

13:00 Signed a deal with Denmark in 1951 that already gave the U.S. a ton of leeway in establishing military bases in Greenland.

13:08 And in fact, the U.S.

13:09 Had drastically reduced its military presence in Greenland over the last few decades. I mean, it went from like dozens of bases to like one or two. So now Trump is sort of reversing that. But this is essentially a problem that was of his own making. He said he had to have Greenland. He's not getting Greenland, but he's putting in the military bases. So it feels a little bit like another situation where Trump is claiming victory in a problem that he created and that there was an easy way out all to begin. But obviously, his administration makes a much different case.

13:41 Hey, before we let you go, just any movement on Russia's invasion of Ukraine and ending that war?

13:47 Absolutely none right now.

13:48 I mean, as far as we've heard, the latest push is to get the two sides to agree to not hit each other's energy infrastructure. And you've so far seen neither side have any willingness to do that. So Zelensky is here, hat in hand, essentially asking for more help with defenses. But again, no indication that he's going to get a ton of help from Europeans.

14:08 Are we a world at war?

14:11 I mean, the Brazilian president said so in his speech We are in a moment now where there are more conflicts globally than there have been, I think, since World War II. So obviously nothing at that scale or magnitude, but there is no question this is a moment the UN, which is chartered to obtain international peace and security, does not seem to be living up to its mandate. And you have countries in conflict all over the globe with no one able to really stop it.

14:40 And the US increasingly involved.

14:42 And the US taking a big role in that.

14:48 Stay with us. More from Bloomberg Businessweek Daily coming up after this.

14:59 I just want to repeat what's happened today a little bit. President Trump threatening to annihilate Iran unless it makes a deal to end the war with the U.S. He delivered this speech to the U.N. that laid bare his disregard for nations that might thwart his agenda. The president and the prime ministers of Denmark and Greenland signed a security agreement.

15:15 So there's a lot to get to, not even mentioning what's happening with Russia and Ukraine.

15:18 A lot to get to with Becca Wasser. She's defense lead for Bloomberg Economics. She joins us here in our Bloomberg Interactive Broker Studio in here in New York for the UNGA coverage, the UN General Assembly.

15:29 Good to have you here.

15:31 Yeah, great to be here.

15:32 What's top of mind for you? We want to get into what the U.S. is spending on this war.

15:36 But as you are here listening to leaders, listen to Trump this morning, President Trump this morning, very different tone from last year when he addressed the delegation.

15:46 What's top of mind for you?

15:48 I mean, top of mind for me, a defense nerd, is the fact that Donald Trump in his UNGA speech mentioned missiles and munitions. Can you imagine that happening a year ago or even a few years back under a different presidency? Usually you don't talk about military means at the UN General Assembly. And you most certainly don't say whether you have sufficient stockpiles or not of missiles and munitions to wage war at the UN. So that's a total sea change and something that is top of mind for me, even if that is quite niche for probably lots of folks listening.

16:21 Is it because, I mean, the UN body is all about keeping peace, right? And it's also, why would you possibly kind of be so defensive?

16:28 Yeah.

16:28 Is it a combination of those things?

16:30 It's a bit of that. It's a bit of this is an assembly for everyone to come together and have diplomacy, find shared ways of moving forward on some of the most pressing global issues, climate change, food insecurity, you name it. And he went in a very different direction. And that is one that is focused on war and the ability to wage war into the future, but also his threats to Iran, once again, threatening to essentially wipe them off the map if they don't make a deal. We've heard that before and we're hearing that yet again.

17:01 Do those threats, just in your view, because we've heard those before, do those threats lose a little bit of their power?

17:08 They most certainly lose a little bit of their credibility. I mean, if we wanted to really nerd out and think about it in terms of international relations literature, this is one of the things that they say. You can only get your way if you're able to communicate what you're doing and have the credible means to back it up.

17:24 He's got the means, but because he said it so often and not followed through that taco trade that we talk so much about, it's a question of whether the Iranians are actually going to believe him.

17:35 Okay, speaking of what's at stake, you and your team out with some research this week that talks about the U.S. spending close to a billion dollars a month to enforce the Iran blockade. It's consuming readiness the Pentagon can't quickly replace. Can you just talk a little bit about what goes into that calculation, what the U.S. is spending money on?

17:52 how that fits in with the context of the entire cost.

17:54 Of the war?

17:55 Yeah, this is only a small snapshot of the US naval vessels and the associated aircraft on them, their operating costs. So essentially, how many days have they been out at sea? What does it cost to keep them there? Those are just the few costs that we can actually find in open source things from the Pentagon itself. And so that is a small sliver of the broader Iran war costs that we are now hearing are totaling above $ 40 billion.

18:23 So that's a little bit of what we're seeing, but it's worth noting we're getting these top line figures from the Department of Defense. This $ 42 billion, we are getting smaller snapshots of how much of that is going to things like munitions, you name it, but no one's really been focused on the cost of What does it take to enforce this blockade? What is it taking to keep the Strait of Hormuz at least for some flow of energy and oil through it? And that's pretty much what we try to do is say, here's what your naval buildup has cost, and here's how much it is going to continue to cost to keep that going.

18:57 Right, Becca, because even if there is some kind of peace accord, there's still going to be a big U.S. presence, no?

19:03 Yes.

19:04 It's not going to go away immediately. And it most certainly isn't going to go away from the Strait of Hormuz, which right now is what we say in military terms, the center of gravity. That is what the Trump administration is so singularly focused on right now when it comes to this conflict, even though the conflict itself is widening to different fronts, Saudi Arabia, you name it. They are really focused on the straight so those ships are likely to remain and we're talking aircraft carriers destroyers Some of the biggest parts of the US naval fleet are tied up in the Middle East and they're gonna continue to be tied.

19:39 Up We're speaking with Becca Wasser defense lead for Bloomberg economics. She joins us here in the Bloomberg Interactive Brokers studio It's not just the hardware. It's the people too. Yes, and there was some reporting on that and the light shed on that, I think, finally within recent weeks because of the aircraft carrier.

19:54 But there's a lot of people who, as we.

19:57 Get into the fall and if this conflict doesn't end— There could be people deployed there through the holidays.

20:03 Through the holidays. They haven't seen their families in a long time. Many of them who are on these ships, they haven't had port visits. There's really no rest and reprieve. And if you've ever been on one of these ships, most of the sailors sleep in really tight, small berths. It's a really grueling thing to be on an extended deployment on a ship. It's also worth noting that there are U.S. military forces boots on the ground in the Middle East. So you also have ground forces that are in extended deployments, the 82nd Airborne.

20:35 That were there beforehand?

20:36 That were sent at the beginning of the conflict and sent throughout. Where are they? We don't know exactly where they are. That is not something that the administration has shared. But they have noted that there is this presence. And they too have been extended. They aren't going to see their loved ones. they aren't getting some of the rest and reprieve that they need or even some of the training that they need. And all of that has costs.

20:59 You understand defense and what it takes to keep us, our stockpiles, where they need to be. We did have the president at a speech at the UN today saying the cowards and traitors would love to say the United States is low on munitions. It's not true, we have more munitions than we could ever possibly think of using and are building them up now at levels we have never seen before. How do you folks who understand this world unpack the reality of it? What access do you have in terms of the military defense companies giving you folks potentially insight into what the reality of the stockpiles and what it takes to rebuild them.

21:37 Yeah, so the president is both right but also a little bit wrong.

21:42 The U.S.

21:42 Has plenty of munitions, but they're not the ones that it needs and it would continue to use in the Iran war or in a potential future conflict. So it's running low of two really important types of missiles, air defense interceptors, which are used to keep U.S. forces, bases, also allies and partners safe from attack. There's also long-range standoff missiles, so missiles that can go further distance that the U.S. uses in order to keep their forces safe.

22:12 The U.S.

22:13 Is running out of those missiles, and they are the most important ones that would be used in any future conflict. It still has some other munitions that it can use, but they are not the ones that they want to use, and that creates some really, really interesting operational realities.

22:30 Well, let's talk about realities. What does this mean for China, who's probably watching very closely? What does it mean for Ukraine, who's been relying on the US in a big way, and take us anywhere else in the world What are the implications of this?

22:42 So the implications for Ukraine are incredibly stark. There is no way that the United States is going to be able to provide additional air defense missiles to Ukraine that desperately needs it, as they are seeing thousands of Russian drones and missiles attacking them almost nightly, sometimes even more than that. And there are just not enough missiles to go around to protect Ukraine. So Ukraine, unfortunately, is at the bottom of the pile when it comes to the U.S.

23:10 focus on replenishing Patriot air defense interceptors, because the U.S. has to now replenish itself first and foremost. If you're China, I would be watching quite gleefully if I was in Beijing because all of this says that the U.S. would be less able to bring to bear the potential military power that it might need in a hypothetical future conflict with China.

23:36 Let's zoom out a little bit and go back to the Middle East because the president earlier today said quote to the un and in front of the un i believe we'll make a deal right after the election because it doesn't make sense for them not to this is with regard to iran and then just before we went on air uh at 154 wall street time we as redhead crossed the bloomberg terminal that the president says that the u.s team met with iranians earlier today we don't have a ton of reporting around who exactly it was and where they met does it move the needle.

24:06 In ending the war I mean, any type of engagement, I do think, is a positive thing forward. Just talking, being able to at least keep those lines of communications open. How else are you ever going to negotiate an end to a conflict if you're not talking? So having these discussions is a really useful thing, whether it actually amounts in some type of deal or even some type of interim confidence-building measure, some small step that can be taken that gets both sides to realize that they're both being serious about these negotiations. These are all positive things because at the end of the day, this war can go on and on. But I think it's becoming incredibly clear to lots of people that there is no military solution

24:47 and no military off ramp here.

24:49 But yet the costs keep going up.

24:50 And I think about what we spend and what that means for our government and what we're not spending on.

24:56 Right.

24:57 And this is going to probably continue for years.

24:59 It's going to continue for years, and I think we're going to hear it more and more, particularly as we get into that election cycle with the midterms. We're going to hear about what are these costs going to that they aren't going to elsewhere for the American taxpayer.

25:17 Stay with us.

25:17 More from Bloomberg Businessweek Daily coming up after this. Oil waiver to Saudi Arabia sought to resume flows on a vital pipeline.

25:31 Not just that, though.

25:32 President Trump said he's encouraged his advisors to approve a ban on diesel exports. This is the price of fuel skyrockets amid pressure from the wars in Iran and Ukraine.

25:40 We've got a lot to talk about with Dr. Ellen Wald.

25:43 She's president of Transversal Consulting. She's senior fellow at the Atlantic Council. She's the author of Saudi Inc. She joins us from Boca Raton. Ellen, good to have you on the program. I want to start with this export ban issue. potential export ban on diesel. Would that actually bring prices down?

26:00 I think it would temporarily bring prices down, but overall, it could produce some pretty severe dislocations in terms of getting diesel supplies to where they need to go. Essentially, you'd have to impose a diesel export ban, in which case the prices would go down, but then you'd need to also maintain this Jones Act waiver so that we have enough ships to ship the diesel to where it needs to go. And then we'd also see refineries when they realize now that there isn't as much demand for diesel and the prices aren't as high, go into refinery maintenance because this is the season when they generally go into refinery maintenance.

26:39 They're putting it off.

26:40 Now because of the incredible demand, but they would choose to then do that maintenance. So then we'd see supplies go down more. It could really create a lot of very difficult market dislocations. I could see why a country like Russia imposes a ban like this, but I think that if they just go forward with this on the idea that, oh, got to bring the price down right now, this is the only way we think we can do it, we'd end up seeing a lot of difficulties all around the country in terms of procurement.

27:11 What about the Saudi East-West pipeline?

27:13 The Saudis are said to be in the process of starting, early stages of starting up this key oil pipeline that has enabled Riyadh to bypass the Strait of Hormuz after it was halted earlier this month. This is according to people familiar. How important is this to global energy markets?

27:32 So I just think that this is definitely key for global energy markets. It's definitely had an impact on the price of crude oil. We've seen it come down from earlier highs right when the damage was assessed at fairly substantial.

27:47 I do think, though, that.

27:49 there needs to be some concern in energy markets as to exactly how much oil is going to be coming through, because this restart is basically a workaround. And they're going to need much more significant repairs to get the pipeline flowing back to its original rates. Essentially, they have to repair these damaged pumping stations. And I believe right now what they've done is sort of work around it. So they don't have the equipment needed to get the flows up to what they could be to the top, you know, pressure in the pipeline. So they've got to supply crude to their own refineries. It's unclear exactly how much they're going to have available for lifting. It does seem like they're expecting that they will have some because they've put

28:31 out tenders for buyers to pick up crude there. But this workaround has been really, really essential for buyers, especially in Europe, to get crude because they basically ship it to get to Europe. They basically ship it up to the Suez Canal or a pipeline that kind of runs parallel to the Suez Canal. The oil goes through there and then it gets picked up by ships in the Mediterranean or the ships that go through the Suez Canal can continue on to markets in Europe. So it's a very tight situation. Europe is definitely experiencing some very, very tight situations. in terms of crude oil and especially diesel right now. I hear that there are outages in some places of France because of this. You know, it is

29:18 a temporary situation. Eventually, they will repair the pipeline, although it remains vulnerable to these kind of attacks. And so we now know that the pipeline can get hit and that the market dislocation would be severe.

29:34 Ellen, I want to go back to and focus on diesel, which you just mentioned. And also gas prices here in the US, we're plateauing a little bit, but at $ 4. 48 a gallon as of yesterday, according to AAA, diesel is still up there at more than $ 6. 50 a gallon right now. We had Humayun Tai on yesterday from McKinsey, and he mentioned something that was interesting. With the price of diesel going higher, he was talking a little bit about some refiners moving into refining diesel and moving out of refining traditional gasoline. Can you talk a little bit about that and if diesel's high price could actually remove supply in the US from gasoline?

30:23 So my understanding, uh, and I'm, I'm not an expert, an expert in, in the exact processes, but my understanding of how the refining process works is that, um, refineries are built, um, to basically optimally process certain types of crude oil and, and that per, per a barrel of oil, you get a certain percent, you know, you get a certain amount of gasoline, you get a certain amount of diesel, you get a certain amount of jet fuel and a certain amount of other products. And that, um, Retooling that is not necessarily all that easy because the refiners are designed to produce this way. I can certainly see why refiners would want to focus on diesel because there is a lot of money to be made there because even

31:05 though oil prices are higher, diesel and gasoline, especially diesel prices are so much higher that, you know, even if they have to buy oil for, you know, $ 99 a barrel or $ 95 or $ 90, they can still make so much money because the price, you know, they're selling their product for is so high. I'm not sure that it would behoove them to retool their refineries in a permanent way because, you know, it's not clear that this situation is will be permanent. There is sufficient global refining capacity when refineries are online. Part of the problem is that there are refineries in the Middle East that would make these products that are now not really shipping internationally because the focus on shipping is on crude oil.

31:50 And then there are these refineries in Russia.

31:51 Now, if the refiners think that Russia is basically out of the game and that from the Middle East is not really coming back online, then I could see them potentially putting in the, you know, the changes needed to focus on diesel. But again, you can take the refinery offline to necessarily to make these changes. And right now, these refiners are just running full out. So I can see why it's an interesting calculation, but I don't think it's just as easy as flipping a switch and saying, OK, produce more diesel. Everything is set up.

32:21 To run a certain way.

32:23 In terms of the refinery process. Ellen, just got a couple of minutes left here. You wrote Saudi Inc.

32:28 The Arabian Kingdom's Pursuit of Profit and Power, written back in 2018. So not quite a decade ago, but we're getting close. You know, what is Saudi Inc. today, and what would be the book you'd be writing in today's environment, given these two wars, in particular the U.S. war with Iran, but just kind of watching what's going on in the Middle East, but we've also got, of course, Russia and Ukraine, too.

32:53 So I think that Saudi Inc. is still extremely important in this, you know, to understand where Aramco comes from. For example, why Aramco is so focused on getting crew to its customers, fulfilling its customers' needs. in the safest way it can. So there's a question about why didn't Aramco, why wasn't Aramco always loading oil and trying to get it through the Persian Gulf? Why were they so focused on loading from the Red Sea? And the calculation was that that was a safer way to guarantee that their customers could get this oil. And so when you look at the way that Aramco has grown and the way Aramco is set up, you can understand where their priorities are and how they're prioritizing these things and also why

33:36 they're able to make these repairs Very, very, you know, with a lot of haste. They're able to make them very well because they have prepared for this. But I do think that the situation is definitely changing rapidly, particularly because China is such an important area and Asia is such an important customer for them. And that the focus of Saudi Inc., I would say, is really shifting away from the West and further towards the East.

34:06 Stay with us. More from Bloomberg Businessweek Daily coming up after this.

34:09 How's that NASDAQ? How's that NASDAQ? Did you see this? The NASDAQ 100 gains 0.8% to close at its first record going back to June.

34:23 Yeah, just barely, right?

34:24 Yeah.

34:25 Ish.

34:26 Yeah.

34:27 But thanks to a big bump.

34:29 What do you want?

34:30 A record is a record.

34:31 What do you want?

34:32 I want so much. What do you want?

34:33 I have been told.

34:35 No, you're right.

34:36 It's a record.

34:37 And kind of interesting in a day that was kind of a weird one. I feel like, blah, we focus a lot on geopolitics, oil markets.

34:44 We'll see if things are starting to settle down.

34:45 But stay tuned because President Xi meeting with President Trump later on on Thursday.

34:50 That'll be interesting.

34:51 Also stay tuned.

34:52 Wednesday to Thursday.

34:53 Because we've got a great hour coming. We're talking AI with Mandeep in just a second.

34:56 Yeah.

34:57 Muse.

34:57 It's going to be great.

34:59 Muse.

34:59 Also. What's up? Superintelligence we're going to talk about.

35:03 Superintelligence?

35:04 Mm-hmm.

35:04 Superintelligent.

35:08 You'll see.

35:08 Okay, that's what I'm saying.

35:10 Mandeep is going to leave in just a moment.

35:11 He's like, I don't trust these two.

35:13 Also, Anthony Scaramucci is stopping by.

35:15 Yeah, he's got a book out, All the Wrong Moves, How Three Catastrophic Decisions Led to the Rise of Trump. It delves into various administrations, those three moves. He's also got some thoughts. about his 11 days in the White House.

35:26 10 or 11?

35:27 We're not quite sure.

35:28 He says 11.

35:29 I know.

35:30 Some other publications say 10.

35:32 Yeah, we'll see what he has to say because he lived them. So I want him to take us inside the White House as well and also what his prescription is for maybe getting us on the right track in his view.

35:41 Well, earlier today in a speech to the UN General Assembly in New York, President Trump dismissed calls for international agreement to put guardrails around the development of AI, brushing off concerns about the dangers of frontier models going rogue. Carol, that despite warnings from the UN Secretary General, Antonio Gutierrez.

35:57 That's right.

35:58 The leader of the UK also, France and Canada, even the leading AI labs have been warning about AI. The US president, though, said his country's existing institutions will be able to mitigate any risks.

36:11 The United States also totally rejects any attempt to construct a globalist scheme to control for the artificial intelligence being spoken of so much now. here and after officially called superintelligence.

36:29 Officially called superintelligence. So do not call it artificial intelligence anymore.

36:33 Superintelligence.

36:34 All right, we heard.

36:35 All right, we got our own superintelligent person with us, Mandeep Singh. He's global head of tech research for Bloomberg Intelligence. He joins us here in the Bloomberg Interactive Brokers studio. We'll get to the president's comments. In a minute, but I want to set the stage because we haven't seen you in a while. You're out in California and you were out there last week. A lot of what we were talking about had to do with what Dario Amadei wrote over the weekend, last weekend, warning about slowing down these frontier models. A lot of our focus last week was on the AI apocalypse.

37:06 Should we be scared?

37:08 No, I think all these model companies feel their models are good enough that they can now, you know, talk about slowing things down and regulations so that, you know, it's three or four entities that pretty much control the AI going forward.

37:25 But those are U.S. companies, Mandeep.

37:28 I mean, we got some news, some headlines out of China today about some models going rogue there.

37:34 I think the open rate models have done quite well in the last six months, partly because their framing is more around, you know, how it's much cheaper to use open rate models compared to the frontier US models, which are, you know, three or four times more expensive. At the same time, I mean, enterprises don't want vendor lock-in. So if this race is consolidating to three or four players that own the AI or the superintelligence, then if you're a large enterprise, you don't want to be stuck. We saw the same thing in the cloud era. Every company wanted that ability to move across clouds. And in the end, we ended with three major clouds. But still, that multi-cloud was a very important thing.

38:20 But we didn't think the cloud companies were going to inadvertently create some sort of biochemical weapon that could wipe out all of humanity.

38:29 I mean, look, all these risks are there, but.

38:33 In the end, I think what these companies are highlighting is that these models have become very capable across different domains, and it's not just one domain where they're good at. So from that perspective, the whole Hugging Face incident kind of illuminated everyone about what agentic functionality could do. I mean, you and I use chatbots, ask a query, get a response, but when it comes to agentic stuff, These agents work for hours. What are they doing? They're trying to solve for a complex task. Now, that may involve hundreds of steps. Now, one of the steps could involve, you know, an agent doing something they wanted to cover up later on, which is what we are figuring out with the Hugging Face incident.

39:21 So when you are talking about agents working for hours using so much compute and it's not auditable and no one is monitoring, that's where there is. Not when you're using for chatbot use case where you are getting a response back within a minute or two. Okay.

39:38 So I keep thinking about, we've talked so much about geopolitics, defense, war today.

39:43 And I think about mutual deterrence.

39:45 And is it going to be some kind of mutual deterrence when it comes to the AI world?

39:49 When it comes to the agentic level? Is that going to happen? Because there's a lot of.

39:54 Money at stake, a lot of companies have a lot at stake to make sure that this works well and safely, right?

39:59 Yeah, I mean, talking about mutual deterrence, look at what Meta has done with Muse this week.

40:06 And they are getting.

40:07 Into a turf where Amazon blocked them within two weeks of the launch.

40:13 Why are they doing it?

40:14 Because they feel threatened by what Meta could possibly do in the world of e-commerce with this agentic functionality. Amazon owns lead generation and customer retention. People go to Amazon.com directly. Suddenly, if you start using Muse, that entire traffic could be gone and then people would be surfing from Muse instead of going directly to Amazon.com.

40:40 But what is banning Muse from its platform? How does that solve that?

40:44 Well, so the promise of Muse is you come to Muse, ask whatever your e-commerce query is. Muse will not only help you surface the best place to buy it from, but it will actually make the transaction for you. because it has your payments information end-to-end. But if Amazon is the largest retailer that owns logistics and the largest inventory, and it's blocking Muse from scraping the information, then Meta cannot serve its customers with the best value proposition item for the query they're asking.

41:22 So then what does Meta do?

41:26 I mean, that's where they have the technology. They have the model now. They have a very good UI, which is why, you know, they have added $ 500 billion in market cap over the course of three weeks. I mean, the stock is up 25% over three weeks since they launched this.

41:43 So clearly there's a lot of potential.

41:45 Isn't somebody else going to create a very similar product?

41:47 I think the reason why Amazon is blocking is they will certainly launch their own agent and it will integrate with Alexa. I expect Google to do the same because this is encroaching on Google's turf in terms of the search market share.

42:03 It's so funny.

42:04 One of Bill Gates' kids didn't create some kind of shopping app that supposedly... Is it Fia or something?

42:11 I know.

42:12 Hold on. Where are you going with this?

42:14 No, but the whole idea was... Tell us what you want. We're going to find the best deal out there.

42:20 Yeah.

42:21 Read the Bloomberg reporting about the controversy around that we reported on.

42:28 Okay.

42:28 I'm not saying go there.

42:30 But that concept, like part of me said.

42:32 it's about time that customers actually get to all this data and information, be able to access and get the best deal.

42:41 They can.

42:42 And that's where Metamuse has a really good proposition. If you want deals for a certain brand or discount codes that work, it's great in terms of surfacing that. And Again, if it's integrated well with the supplier inventory, whether you're booking airlines or some sort of travel, and it's integrated with that supplier, then it works. But what if the codes don't work, even though they are surfacing the codes?

43:10 And when you go to the actual platform, Meta, remember, doesn't own the inventory to book that travel. So that's where they need that ecosystem to tie in. But clearly, they have the functionality and the vision, and they have created the right UI to make it happen.

43:26 So on Muse and where it fits in versus Anthropix, Cloud, and OpenAI's chat, GPT, and other LLMs, how would you describe its lane here? versus what's already out there?

43:41 I mean, meta, I think, is clearly focused on that consumer use case now, whereas anthropics, the mojo was around cloud code and enterprise use cases that they have cracked. So now you are seeing a bifurcation between these LLMs focusing on consumer versus enterprise. OpenAI is still doing both, and it will be interesting to see which way they end up.

44:10 We had two people join us yesterday.

44:12 Well, sorry, one person joined us on air, and then one person texted us separately as we were talking about Muse. Was it Emily Green on set with us? I think it was Emily.

44:22 Yeah.

44:22 Who.

44:24 made a comment about the challenges that meta might have with its privacy history. I had another, I had a friend texted me yesterday about like he referenced Cambridge Analytica and privacy scandals and data scandals in the past. And if that could be some sort of a hurdle for meta to get over to wide scale adoption, it doesn't seem like it.

44:48 I mean, look, I think on the consumer side, they already have, you know, 4 billion monthly active users across their family.

44:55 Facebook Marketplace, like think about it, right? They already know a lot, yeah.

45:00 Instagram, right?

45:00 But that's where it's the right thing for them to focus on. If Meta was focused more on that cloud code type of enterprise use case, I would have said no chance given their, that privacy aspect and, you know, things that you just mentioned. But on the consumer side, they could use a lot of their own Instagram links and surface that through Muse. And I think that would be quite engaging.

45:24 Is this a game changer for Meta in your view?

45:27 I mean, all the concerns around ROI, especially with regards to Meta, given they don't have a cloud business, this is their answer. And I don't think it was worth $ 500 billion in terms of market cap. So it's like saying... They could generate up to $ 10 billion in revenue from this product over the next two years and putting a 50 times multiple on that and adding $ 500 billion in market cap. So there's already a lot priced in after this launch and the excitement clearly is reflected in that bump they have gotten. So I don't think it's worth $ 500 billion in market cap, but that's how the market is treating it right now.

46:06 And the market only gave back a little bit today on it after that 11% bump. What does what Meta, the news we got from Meta and Muse, what does it say about kind of how we can start thinking about AI's impact on our world, especially when it comes to agentic AI?

46:22 I think everyone will have a personal agent.

46:25 That's the vision that Meta has.

46:27 And I think Apple, Google, All the companies that are focused on the consumer side will take this very seriously. I expect them to have a personal agent offering. Amazon probably is doing that as their blog muse. And we will be offloading a lot of the e-commerce type of transactions. Not everything, not the big ticket items, but some of the mundane purchases to our personal agents.

46:56 Who makes those agents for us? Are we going to have a company that makes each one for us? Do we make it ourselves?

47:03 So the Meta's Agent Muse is personalized to you. Yeah, you're right. So at the end of the day, they already know a lot about you.

47:10 I don't because I'm actually not.

47:14 You're not on Instagram.

47:16 Well, a little bit.

47:17 Okay.

47:18 You're right.

47:19 But maybe, I mean, I was talking about my recent sneaker purchase, right?

47:23 Yeah.

47:24 I wanted CloudMonster 2s from on running, but it doesn't seem like the color is made anymore. They want you to buy the CloudMonster 3. I spent some time searching around the internet for this. I could have had an agent.

47:36 Do that and then buy the actual shoes for me.

47:38 Yes, that's the use case that Meta has solved for, and they have reduced a lot of that friction in terms of searching and finding that exact item.

47:47 You can describe it, and the Muse agent will find it.

47:50 I just want the dinner. I just want to get home and not have to make dinner.

47:53 Yeah, there's a lot of things. Make the bed.

47:55 Yeah, do the dishes.

47:57 Will there be a point, though, where just like in search, people pay to be kind of, you know, come up high on the search that the same thing that these agents, like that same problems people will pay for.

48:07 Like this version of SEO.

48:09 Yeah. Yeah.

48:10 Well, even on amazon.com, there are sponsored ads and, you know, they make a lot of money off of that. But I think with LLMs and agents, you need objectivity to surface the best information because let's say you, you know, show a sponsored placement as a result.

48:27 Then I'm going to lose the.

48:30 Interest in coming back because there is a better option that if you were totally objective, you would have surfaced. But because it's a sponsored placement, you didn't show me the best option.

48:41 So do you pay for this from Meta?

48:44 How do they make money off of it?

48:45 I think right now they are giving, they are very generous and subsidizing the use because they want you.

48:50 To use it.

48:50 But it's freemium also like the others. Like if you want to do more with it, you can.

48:54 I'm sure they are spending a lot more on compute, given they're giving you 100 million tokens per week. That's a lot of compute.

49:02 Yeah.

49:02 And so they're not charging anything. For higher tiers, they are, but still it's subsidized because they want you to use it. Yeah.

49:12 Are you going to get it?

49:13 It's kind of wild.

49:14 Carol just bought a subscription to.

49:16 Well, I was working on something with ChatGPT.

49:18 You have an agent now.

49:20 Yeah, and I went up a tier. Do you go up a tier? You must go up a tier because you have to.

49:25 Yes, I do compare.

49:27 And look, ChatGPT was early in terms of being a personal agent, but they never really cracked e-commerce. I feel Meta has made progress in terms of kind of hitting the e-commerce, the online marketplace transactions where we actually spend our dollars.

49:47 You know, don't discount Amazon. I was using Amazon's.

49:53 Search AI feature the other day to look for something I ordered in a Whole Foods order.

49:57 It worked really well.

49:58 I have to tell you, I was somewhere and I got a picture of a shoe and I was like, this is really kind of cool, and I.

50:02 Put it in there. It took ChatGPT a little bit to kind of.

50:05 Figure it out. It didn't find out? It got me there.

50:07 It did?

50:08 I didn't buy anything.

50:09 You should try Muse.

50:09 Yeah. Really?

50:11 Really?

50:12 Got to listen to Mandeep.

50:13 I always like, after you're here, I'm like, I got to try this thing. I got to try this thing.

50:17 Well, you know what's good is Mandeep doesn't think the world's going to end as a result of AI.

50:20 So that's good.

50:21 And you trust the US is going to be on top of this?

50:24 I think so.

50:24 Yes. It will only give us more time to do other things. So agent tech world is going to be good.

50:31 Like take vacations?

50:32 Yes, I think so.

50:34 Mandeep Singh, Global Head of Tech Research at Bloomberg Intelligence.

50:38 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.