Joining us now is Greg Fleming, Rockefeller Capital Management president and CEO. Greg, thank you so much for joining.
Thank you, Danny. Great to be here as well.
The worst of the market shock is easing off, but we are coming off the back of a day where we saw international bond yields hit the highest since 2008. Something that feels like a rate shock. We're also off the back of something that feels like an energy shock, too, but growth has been holding in remarkably well. And I wonder how sustainable you think that is.
Well, you know, there's plenty of reason for optimism, but when we get to long rates and deficits, you know, those are clearly areas of concern. But on the optimism side, you know, it's really AI driving so much in the economy. Capital spending, you know, all the investment that needs to be made to create the compute power, the impact, and this is one of the things I say all the time about AI. It's not an investment in a specific area of the economy. AI is being incorporated in every single company, public and private, in the country. Everybody's trying to, every CEO is trying to figure out, 'How do I use these incredible tools, which by the way are getting more and more powerful as we sit here? How do I use these tools to drive productivity, efficiency, and a better client interface for my firm?' So, that's across thousands of companies in the country. So, that really could lead to significant uptick in productivity over time here. So, that's the positive in the capital investment cycle, trillions of dollars going into that.
And also, you know, the other thing I would say is there's a lot of corporate optimism. Corporate profits are high. The regulatory environment is much more benign than it was a couple years ago, and that doesn't get as much attention as I think it should. You know, companies, CEOs, they're out there looking to grow their businesses, to do deals. There's a front-foot mindset, and that all factors in as well.
Can I just push back on that just a little bit about the regulatory environment? Because on the federal level, it's been strong, but we've seen states come out in full force for things like the Paramount deal, for example. Does that complicate that environment?
Well, I think it complicates it a little bit. Federal is everywhere. States are state-by-state. So, there's clearly some states that are trying to step into what they might perceive to be a federal pullback from a regulatory standpoint. Other states are not doing that. So, you know, that's kind of the United States. It's, you know, you get different things in different states. But the federal government can affect everything and did and is doing much less of that now. The other thing I want to mention is the entrepreneurialism in this country. There will be over 6 million new businesses created this year. There are over 35 million firms in this country with fewer than 500 employees employing over 60 million Americans. It's an entrepreneurial machine, the United States, leading in all the leading industries as well. And then you have the capital that comes behind that. So, if you have a great idea, and that happens all the time all over the country, you have a great idea, you can get early stage funding for it. And then if it, you know, moves along, you can ultimately be in the public markets. You look at what's happening in the public markets this year. That's unique around the world. So, that, you know, that's another major positive that I would highlight.
You're optimistic on AI. What's the clearest signal you're going to look for to prove that it is returning the returns that investors are hoping?
Well, you know, one thing I'll say is given the amount of capital going in, there are always winners and losers and it's hard to see ex ante who are going to be winners and losers. So, we're careful with our clients in terms of they want to invest in the space and we want to help them find places to invest, but we want them also to stick to a diversified plan because it's hard to call now which companies are going to be the really long-term winners and not. The thing I'll look for from an economic advantage point across the whole country is productivity. Will we start to see the productivity surge that you need to see given all of the capital spending and everything else that is going into AI? And I, you know, I am a positive on that. I'm optimistic. I think that the tools are unbelievable and appropriately integrated into companies. I think companies will be able to deliver goods and services and client impact more efficiently than they are able to or were able to do on the trajectory pre-AI.
You see just the new business creation really fueled by AI and the wealth that's being unlocked. Be it that, be it these IPOs has been so remarkable and that's why I find your job especially interesting because you deal with these ultra high net worth clients. What are you seeing just from the wealth creation front? Like are you all of a sudden getting so many new clients who all of a sudden are sitting on piles of cash saying, 'Greg, I have no idea what to do with this stuff'?
Danny, the answer is actually yes and it's across the country. You know, one of the things when I started this firm, I thought we would end up in 30 cities. You know, we're now in, you know, over 30 wealth centers, over 50 cities because you have wealth in Nashville, in Charlotte, in Austin, which is a, you know, these are incredible growth places. But yes, these companies that are going from literally zero not so long ago to, you know, very significant valuations, individuals in those companies are generating obviously a significant amount of wealth. We get a lot of inbound on that. So the wealth creation in the United States is broad, it's in cities all over the place and it's deep and it continues to happen.
