So thank you all for joining us. We have in this panel 10 superstars, and it's very difficult to figure out who to ask first, so I will try to do it alphabetically. So for those who are at the end of the alphabet, you will be the last people speaking, but we won't get to you for a little bit. So first, let me ask Yasser: is the biggest problem with being the governor of the PIF fund that you don't have enough requests for money, you don't have enough people looking for money from you? Is that the biggest problem you have?
I think it's one of many, but here's what changed over the years. When we started the PIF back in 2015 — actually, I shouldn't say start, because the PIF was established back in 1971 — a lot of people would come looking for our money to be invested abroad, but that thing shifted over the years. So now we're more focused on the domestic economy, and we've been achieving and doing so many big things since then. I'll just give some of the examples: we have established nine new companies, companies like NEOM, Red Sea, Jaidah, Alat, Savvi. All of these companies are big investors in new sectors that were not in existence in Saudi Arabia.
So we've been investing for the past eight or nine years, and now most of our projects are getting operational and commercial, and people are seeing the difference between what's their perception of Saudi Arabia back in 2015 and before that, and what it is right now. The Saudi economy is one of the fastest-growing economies in the world. I think in 2022 we were the fastest economy in the G20; we were growing by more than 7%. It's projected that we will continue to be in the top growing economies in the G20. It's projected also for us to grow more than 5%, second to India as a G20 country. So now we see a shift from people wanting us to invest or take our money to invest from there to co-investments. We have created so many JVs with many international companies and also with the local companies. So there is a big paradigm shift, I think, for how PIF is deploying investments. So that narrative may be still there to a certain extent, but it's changing now.
When you started the PIF fund, you started the PIF fund, were most of your investments outside of the Kingdom, and now a larger percentage are in the Kingdom?
Initially, we had less than 2% investment internationally, and then we grew that. That was only $150 billion assets under management. Today we are about $930 billion assets under management. So initially we had less than 2% of international investments; most of the investments were developmental projects within the Saudi economy. But then it increased from 2% all the way up to 30%. Now our target is to bring it down to a range between 18 to 20%. Having said that, the absolute dollar amount is still growing because our AUM is growing. So it was like, you know, a roller coaster — down, up, and now it's down as a percentage, but the dollar amounts are increasing.
How important is artificial intelligence in what you're investing? Are you investing in artificial intelligence companies, and are you using artificial intelligence to make investments?
I mean, Ruth is here next to me for a good reason. That's part of our investments in AI. Most of the people around the table, we have either ongoing discussions or potential discussions to invest in AI. And the reason why we are investing in AI is Saudi Arabia is very well positioned to be a global hub, not only a regional hub, for many reasons in the AI sphere. One, you have very efficient utilization of energy and low cost of energy. Two, you have massive lands. And three, it's not only the fossil fuel that we have, but we have most of the technologies and the renewable energy. We're lower in the... I'm sorry, maybe the sound is...
Well, is your mic working? I think it is. So, final question for you, if I could. One of your investments has been in something in the golf area, LIV Golf, well known. You're known around the world for LIV Golf. So let me ask you: is it intimidating when you play with Tiger Woods, or is he intimidated by you when he plays with you?
You mean he's intimidated or me intimidated?
Right, was he intimidated by you because he might want some money from the PIF fund, or are you intimidated by him?
Not at all. I actually love playing with the most talented players in the world. Tiger Woods is one of them. You know, all the rest of them — Greg Norman, Dustin Johnson, Brooks, Bryson, Jon Rahm — all of them, they're really amazing people. And I think what LIV Golf brought to the table is trying to rejuvenate the sport itself. It was an aging sport; all the audience, average age of about 45. Our new proposition is bringing the youth back to the game and to make it, to some extent, more accessible and more inclusive rather than exclusive.
So let me go now, thank you, to Stéphane Bancel. Stéphane, for those who don't know, is the CEO of Moderna. How many people here got a Moderna vaccine? How many people want vaccines? So, are we better prepared for a global pandemic than we were a couple of years ago?
Good morning, David. Definitely. I think the improvement in technology, in the cooperation around biology, and the manufacturing scale — we should not forget that one of the challenges with COVID is that when the vaccines were approved in record time, there was not a lot of supply. Now there's much stronger manufacturing network across a lot of companies, so I think we are better prepared.
And let me ask you today: should people still get a COVID-19 vaccine? I see TV advertisements for them, but are they still necessary? Do I need to get a vaccine now? I don't have... I'm not worried about COVID. Should I be worried about it?
I think you should be, David. I mean, if you look at the US, where you live, last year we had more than 600,000 people above 65 years old being hospitalized. That is three times higher than flu. That is a real problem. And I mean, actually, I think one of the biggest issues we have in our society is that we call it healthcare, but it's actually sick care. And if you look at the sick care system that we have and the aging population, the math doesn't work anymore.
Okay, well, we've got a special guest coming in. Where is he? There he is. That is... thank you, David. There he is. According to an influential 2024 Global Pandemic Preparedness Summit report, 79% of countries still lack sufficient health emergency coordination mechanisms. With such glaring gaps in the global defense system, it is unlikely the world is truly ready to respond to the next pandemic. Well, that was downbeat. Okay, so one final question: what is the biggest healthcare problem facing the world today?
I think it's just the aging population, which is we are at the stage where we have an aging population, we have a sick care system, and we cannot afford this system. And if you look at the cost to governments, the cost to employers, it's a bigger issue. I think we need to move into preventive medicine, where we can use technology to make sure we see disease very early and we prevent disease from happening.
I think an aging population is good. I mean, I'm aging and I'm happy. But okay, let me ask Laura. Laura was the head of the Hong Kong Stock Exchange. So, do you see any opportunity for a rapprochement between China and the United States in the near future?
Easy question. Well, I think the relationship between China and the US is on everybody's mind, and I think it impacts on all the economic policies and decisions. I think in the last few years, the global trend is that political consideration is driving national economic and industrial policy, and as a result of that, the impact on global economic policy is much more acute than before. I think the consideration for economic policy due to national rivalry, economic rivalry in terms of security of supply chain, and all these have always been there. I think it has been brought to the forefront. The relationship, the US-China tension, affects a lot of the major decisions nowadays, and of course, the coming US election will have a big impact on that as well.
So if I was going to locate a company's offices in Asia, why would I pick Hong Kong over Singapore?
Oh, we have a lot going on for Hong Kong. I think Hong Kong is part of China, but we are under one country, two systems. We have common law, we have a simple tax system, we have well-recognized and acceptable regulatory track record and standards that are accepted by global investors. That is very much going on in our favor. With China's recovery and in terms of economic growth, we will benefit. Hong Kong will play an important role.
Okay, and final question right now. Let me ask you today: would you say that technology has changed Hong Kong in any dramatic way over the last five or ten years?
I think, like everybody else, technology has an impact on us. I think we have seen the huge technology advance in China, for example, in terms of payment systems, that has an impact on us. For anyone who has been to China recently, you know that everything you know is on your smartphone — your payment, your basically eventually you move to your personal assistant will be on your smartphone, and so that has a spillover effect. And more importantly, Hong Kong plays a financing role to help finance these new technology advancements.
Okay, Larry. I think, Larry, you are the founder and CEO of the largest asset manager in the world. You're managing now 12 and a half, 13 trillion, whatever it is — who knows? So it's a lot of money. What are the biggest global trends you see now in money management? People moving into stocks, moving into debt or credit instruments? What do you see as the biggest trend and the biggest worry of people that are your clients?
Well, David, thank you. Yasser, thank you for having us. I don't think there's one major trend right now. There's a great deal of uncertainty, but I don't think it really changes the future of the markets. I would just say the biggest macro trend that I see is the amount of capital that is needed to digitize, to decarbonize, to rebuild our infrastructure. We're talking about trillions of dollars of capital. We're talking about an amazing amount of new jobs. We're going to have a shortage of electricians. This capital is going to be furthering a growth in equities. And the other thing I would say is what you're witnessing because of the transformation in the need of technology and AI: scale is becoming more and more important in every industry, and you're seeing a growth in the major companies in every industry. And I think this is going to be one of the dominant themes. So, for instance, a Walmart in the retailing space continues to become more important to the average consumer. They're employing more and more technology, more and more AI. That's an example of what we're saying.
So with this huge pool of private capital — there's $9 trillion sitting in money markets — in addition, the tremendous need to build out this infrastructure, it's just going to be an investment blossoming. And I really do believe this is going to be powering the equity market for the coming years. And I think we're witnessing now earnings are, despite at extreme PEs, we're seeing earnings catch up to the PEs, and I do believe we're going to continue to see this type of growth worldwide. Now you're going to see a rebalancing of the world through that. The countries that are adapting the new technologies fastest are going to be the larger winners in this global world. And so it will present some social issues around the world, but the global theme is the need to deploy more capital to rebuild our infrastructure, to build out AI, and it's going to be powering a real tremendous investment boom, and it's going to be powering these large capitalized companies.
So you started your company in 1989, I think it was.
88. So you started in '88. What's the biggest technological change in the money management world or at BlackRock since you started?
I would say it's not a sudden change. It was our use of technology. I mean, a good example: at BlackRock, we've added over $5 trillion in assets, and up until this time, when we're adding companies through acquisition, we did not add one employee. So we actually added four multiple points in margins, and all of that is the utilization of more and more technology. And I think to service our clients as well as we're doing, to have the trading volume that we are instituting, it just requires more and more technology. And then the algorithms we're using now in terms of getting different indications, different mechanisms to invest, is really helping the power of the firm.
Can you explain how we've had interest rates go up so high and now they're coming down, and we haven't had a global recession? Normally, when you have interest rates go up that much, you usually produce a recession at some point. Are we likely to have a recession, or do you think we've avoided it?
Well, Stéphane talked about the aging society. Actually, higher interest rates benefit a large segment of our society. In a minute, as we are older, we're saving more money. So what we witnessed is actually a stretching of the social fabric. Wealthy people earn more money in higher interest rates because they're savers. The people who don't save, who are borrowers, when you have higher interest rates, those are the ones who are being harmed. So you actually saw more fragmentation in a society. But I think the playbook of higher interest rates can slow down an economy has to be relooked upon because of the aging of our population. Two, in the United States, because 98% of Americans have a 30-year mortgage, the transmission of higher interest rates takes many more years because their major asset is their house, their major liability is their mortgage that did not move.
Okay, so when the Fed — before the Fed finishes this year, would you expect a 25 basis point rate cut or a 50 basis point, or you don't know?
I think it's fair to say we'll have at least a 25. But that being said, I do believe we have greater embedded inflation in the world than we've ever seen. We have government policy is much more inflationary, whether it's immigration — excuse me — our policies of onshoring, all of this. No one is asking the question: at what cost? Historically, we were, I would say, a more consumer-driven economy, that the cheapest products were the best, the most progressive way of politicking. Today, I think we have governmental policies that are embedded inflationary, and with that being said, I think we're not going to see interest rates as low as people are forecasting.
We have a comment from our avatar. Welcome. Global leaders should consider how to address public debt. The Conference Board CEO Outlook 2024 reports that US CEOs now rank the national debt as their top geopolitical concern, with last year's fiscal year deficit reaching $1.7 trillion. Debt servicing costs are rapidly approaching defense spending levels, potentially crowding out other national priorities. Okay, so now Ken. Ken Griffin. Ken, there we are. Ken is the founder and CEO of one of the most successful and largest hedge funds in the world, and also founder and chairman of Citadel Securities, which is one of the largest market makers in the world. So, Ken, are the markets going to be receptive to, let's say, if Donald Trump were reelected again? You think the markets would be responding positively to that, or they don't really care who's likely to be president?
I think the markets are always forward-looking. The expectation today is that Donald Trump will win the White House in just a few days. We'll know shortly. And big picture, the reduction in uncertainty is almost always positive for asset prices. And we're at that moment of peak uncertainty. It is a race that Trump is favored to win, but it's almost a coin toss. So I would say that post-election, we'll generally see a risk-on environment as people come to adapt and adopt a new regime, whether it's a Harris regime or a Trump regime. This uncertainty will be behind us.
Ken, you're running these major financial organizations. You spend a lot of time on education, K to 12. Why do you care so much about K to 12 education, and are you thinking it's getting worse or better in the United States?
So obviously, in the United States, we have taken a hit when it comes to our quality of K through 12 education over the last 40 years. And I would say that one of the opening moments today was the focus on education here in Saudi Arabia. That's a lesson for the whole world. If we're going to have a prosperous global economy, we need education systems around the world that work to deliver not just K through 12, but preschool through college to train the workforce of tomorrow.
And today, do you use artificial intelligence in making investment decisions? You have several hundred or thousand people making investment decisions. Do they use artificial intelligence, or they just use their gut?
Well, I would say that all of us in this room owe a great debt of gratitude to Google because Google was really the firm that put machine learning back on the map about a decade ago. And when Google announced and released TensorFlow to the world, it was one of the great gifts to the world — this branch of technology that was originally developed back in the '80s and '90s but was not usable in a day of limited compute became available to all of us to use. At Citadel, it took us about 10 days to use TensorFlow to start to make markets in the US equity market in a much more capable and effective way. And we've been using machine learning techniques for about a decade now in our day-to-day activity, which impacts about $400 billion of asset trading per day.
Thousands of people try every year, maybe tens of thousands, to get a job at Citadel. For those people here who want their children to work there, who might want to work there themselves, what's the best way to get a job at Citadel? What are you looking for in your people you're hiring?
So we'll have about 100,000 college applicants this year, and a STEM background is really helpful to get a job at Citadel. We find that students that have a strong background in engineering, in mathematics, in sciences, that can understand how to frame and solve a problem, are the students that excel within our four walls.
Okay, we go to Paul Hudson. Paul, you run — you're the CEO of Sanofi, who is one of the larger, I guess, healthcare companies in the world. So what do you think is the biggest healthcare problem the world's facing at the moment?
Well, healthcare inequity is our single biggest challenge. It doesn't have to just be in developing nations; it can be everywhere. You know, maybe give you a couple of examples. We're going to have 21 million climate migrants and refugees. We're going to have 250,000 deaths unexpectedly related to climate. We're going to have BMIs increasing. We're going to have the challenges of delivery of healthcare. Excuse me. We will have a gap of about 10 million healthcare professionals by 2030. So we may make medicines and vaccines; we may not have healthcare professionals to actually give them. And ultimately, in the end, the cost on the climate of the CO2 of delivery of healthcare is skyrocketing more than airlines. So if you're delivering healthcare and trying to help people live better lives, you will contribute more than 5% to the global CO2 burden, and we can do better.
One of the big healthcare problems, I thought, in the world is obesity, and now there are drugs that help you lose weight. Are those drugs safe?
Well, that's a complicated question, but you know, there's undoubtedly a challenge with the cardiovascular potential impact when people — many people are dying because they're simply overweight. How they got there, what could happen, is a much bigger question. In OFAM, for example, just to connect the two comments, that if you're a pre-diabetic and you get coached and you eat properly and you avoid becoming obese and becoming a diabetic, you will create 3x less carbon in your adult life — 3x less. And so we have this convergence of climate and health in almost every aspect. As for safety, I think we would all probably say that keeping people away from cardiovascular events is a good thing, and over time we'll find out, but the evidence supports that.
The next big thing that drug companies are working on, I understand, is reducing the impact of Alzheimer's. So in the foreseeable future, or at least in my lifetime, what's the chance of you getting an Alzheimer's drug that works?
Well, I think we've been working on things like Alzheimer's, Parkinson's for many years as an industry, and we know neurodegeneration in any form is such a huge economic impact and a personal individual impact, and caregivers as well. You know, I think most people would expect with the advent of AI that there is a moment where we possibly may see 100 years of innovation in five to 10 years, and in these sorts of areas, it's really needed. The drugs that are being approved recently are, you know, absolute no doubt progress, right? But can we say that we're curing these things? Are we really addressing these things? Absolutely not.
Okay, we have our avatar again, so you have a comment. According to Boston Consulting Group, 70% of R&D priorities for low- and middle-income countries, including maternal conditions and infectious diseases, remain unaddressed. However, serving just 10% of the untapped insulin market in these regions could yield an additional $1 billion for manufacturers. Okay, so now we'll go to Noel Quinn. Noel was for the last five years the CEO of HSBC. So why should people want to work in the banking industry? It's an exciting industry. Why wouldn't they want to go work in the hedge fund or private equity world? Why should people want to work in the banking industry?
