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. "Bloomberg Businessweek Daily" with Carol Massar and Tim Stenevec, live on Bloomberg Radio, Television, and Bloomberg Originals.
Carol: Very good afternoon, everybody. Yes indeed, we are across Bloomberg platforms. Carol Massar along with Isabelle Lee of Bloomberg News and Bloomberg Television. You have a new job at Bloomberg TV.
Isabelle: I do have a new job. I guess I am in the Bloomberg TV world. Very excited. Still will be a markets reporter, but hopefully not a stranger to you folks, and much to learn from all of you. It is a great team, and I am excited.
Carol: We love having you as part of this team. Tim is off today. We will talk about the trade today because it feels different from how we wrapped up last week and the week overall. To be fair, we see chip stocks rallying after a more than 20% drop. We have seen quite a correction.
Isabelle: It is definitely a correction, and some might call it jarring. An analyst from Morgan Stanley said this is healthy because it recalibrated some corners of the market and awakened corners of the market that were suffering from signs of complacency. So at least there is that.
Carol: A little bit of let's take a pause or pull back a little bit and assess the situation. We will take a look at that. It is a big week for tech. Meta, Tesla, SpaceX all reporting earnings this week. We will get into that. We will also get into what is going on in the global situation, more in geopolitics. Strange bedfellows when it comes to the United States, Russia, and Ukraine. We will also talk about the French student protests, if there is a message to the world that should be watching about what it could mean not just in France but around the world.
Isabelle: Definitely, and what it means for markets. We are seeing French yields nearing levels not seen since 2002. Seeing a huge market whiplash when it comes to that and the broader Europe ecosystem.
Carol: Exactly. How AI is rewriting financial services, and we will hear from a senator coming up in the first hour of "Bloomberg Businessweek Daily." First up, a check on the trading day.
Charlie: Thank you very much. We are looking at an update now for the Dow, S&P, and Nasdaq. The Dow has been bouncing around. Right now, holding onto a gain of about 18 points, back above 5200. 5218 on the Dow. It is up by under 0.1%. The S&P up 43 right now at 7702, up 0.6%. Nasdaq surging. The Nasdaq Composite Index up 1.2%. Nasdaq 100 Index up 1.4%. We are seeing a rebound in chipmakers today. That is boosting the market. Buyers coming back to the market. Right now, the Nasdaq 100 up 1.4%. The Philadelphia Semiconductor Index up by 1.9%. The two-year yield, 4.75%. The 10-year, 5.14%. The 30-year currently at 5.47%. Gold down 0.5%, 4145 the ounce. WTI up 2.5%, $103.91 the barrel. A barrel of Brent up by 0.4%. Goldman Sachs upgrading CoreWeave today, moving it up to a buy, citing the company's revenue potential. Shares trading lower, CoreWeave down by 2.2%. S&P up 0.5%. Nasdaq 100 now up by just about 1.3%. That is a Bloomberg Business Flash.
Carol: Thank you so much. Carol Massar along with Isabelle Lee. She is in for Tim on this Monday. We will start with geopolitical developments, first with the war between Ukraine and Russia. Iran's foreign minister saying attacks on Iranian and Russian vessels in the Caspian Sea as well as strikes on port infrastructure in the area have serious consequences for regional peace. The president pumped it to defend himself against members of his own party. You recall President Trump announced a diesel export deal with Russia and later imposing further sanctions because he does not want to drive President Putin away from peace talks with Ukraine. And President Zelenskyy accusing President Trump of trying to pressure Kyiv into surrendering to Russia. We are trying to figure out what it all means. To do that, we have someone who writes President Trump is perhaps the biggest threat to peace. He joins us from London. So glad to have you here. We have been wanting to talk to you about your column. Are things heating up because we are nearing an end, dare I ask, or are we not even close?
Marc: What I actually said in the column is that Zelenskyy is less of a threat than either Trump or Putin in terms of achieving peace. And the reason for that is we are not in peace talks. The president is not in peace talks. They said there was a cease-fire deal when there was no cease-fire deal. President Trump said we need the Ukrainians to stop firing on Russian refineries. Ukraine said yes if they stop hitting energy infrastructure. Russia refused. There was not a set of peace talks there. Russia has goals and feels like they have advantages going into the winter. They do have advantages going into the winter, especially because the United States is not providing the Patriot missiles that Ukraine needs in order to bring down Russia's ballistic missiles, which are being produced in quantities now. And also because the U.S., in order to pressure Ukraine into stopping attacks on Russian refineries in the hope that will bring down diesel prices or at least remove the blame of high diesel prices from Trump to Zelenskyy in the mind of the American electorate. But in order to do that, the Russians have no real interest in complying. This is working for them. And the U.S., in the meantime, is slowing down Starlink so that interferes with Ukraine's ability to intercept Russian drones. They move too fast now for them to be able to deal with the slower link. Also, not giving warnings when Russians fire their ballistic missiles. Normally, the Americans use their satellite intelligence to give intelligence to the Ukrainians, so the Ukrainians have time to scramble F-16s and bring down the missiles.
Isabelle: Trump says he is giving Putin an incentive to make peace, but what leverage does Washington have before Russia changes its behavior?
Marc: None. In essence, in order to have leverage, you have to be willing to say to somebody, I am going to take X away from you, or I am going to increase Y pressure if you don't do as I ask. Trump is in fact doing the opposite. He is saying, I will tell you what, I will reduce sanctions on you and start buying diesel fuel from you, and I will try to pressure the Ukrainians into stopping hitting your refineries. But he is asking nothing in return. This is why you have various people in Europe now saying we really do fear that President Trump is on the other side. He is now working for the Russians.
Carol: Help me understand, Marc, the perspective that you have, unique perspective and understanding some of these global alliances, whether it is Iran, Russia, and China, President Trump and President Putin. Who has the upper hand? Could President say, listen, we need you to end this war, you will do it? Would he listen?
Marc: He would not initially listen. Absolutely not. You have to bear in mind that the only reason why President Putin will stop the war, he has goals he wants to achieve. He has had those goals from the very beginning, and they are important to him. Make no mistake, he does not want to finish this war until he has achieved his goals. He has made that very clear. He says it repeatedly. What has happened over the last couple of years while President Trump has been in power is that the United States has stepped aside. So first of all, we are not going to provide any more finance or any more aid in terms of weapons. We are going to sell weapons to the Europeans so they can give them to the Ukrainians and we will continue with intelligence sharing. But on a couple of occasions now, the Americans have withdrawn intelligence sharing. On both occasions, it has had real impact in Ukraine and on the Ukrainian war effort. The Ukrainians have no illusions about this. They rely heavily on American intelligence. There is not really much leverage that the U.S. has at this point because it has already removed it. It already is not providing aid. It already is not providing the Patriot missiles that Ukraine needs to bring down the ballistic missiles. So you cannot really threaten much. The only thing it can do is to say, if you don't really start engaging in the peace process on the current front lines, then we will start providing the aid again. We will start providing the Patriot missiles and aiding the Ukrainians in ways you have not seen. No sign of that.
Isabelle: Carol made a great point earlier and I wonder what your biggest concern is, that maybe Trump could force a bad peace deal, or maybe that his approach could leave Putin with fewer reasons to perhaps stop fighting.
Marc: People don't understand what the war is about. It is a war of identity, if you like. The Ukrainians are fighting for the right to be Ukrainian, have a Ukrainian culture and a Ukrainian language and a Ukrainian state. They will not accept a bad peace deal because they know it will simply be the precursor to losing those things they are fighting for. The Russians are also fighting for an identity, which is the Russian state, the great power state that was lost at the end of the Cold War. So they are trying piece by piece to build that great power status back. Without Ukraine, that cannot be done. So it is very difficult to see an end to this war in a bad peace. It will happen simply because it has to stop, and that has to be the Russians because they are the ones who invaded.
Carol: Which makes me think we could possibly go into a sixth year, but we shall see. Hopefully not. Always appreciate your opinion. Marc Champion is the Bloomberg Opinion international affairs columnist joining us from London on this Monday. We stay with geopolitics and now to France. This as France officials rolled out tougher security measures and pledged aid for businesses. You probably know if you listened to any of the news over the weekend, the violence that drew more than half a million people on Saturday across France, but what started off as peaceful demonstrations deteriorated with 297 people arrested on Saturday. Let's get to the latest, what we need to know. For that, we go to Oliver. I know you have had a long day already reporting this out for us. It is a little after 8:00 in Paris in the evening. Hard to believe the world is not already watching and knowing, but remind everybody what is behind the protests, the vandalism, the uprising.
Oliver: That is an easier question to answer about two weeks ago. That is the difficulty with these kinds of protests and the phenomenon we tend to get in France. If you remember back in 2018, 2019, the Yellow Vest protest began with one objection, an increase on fuel taxes. That was something the government quickly capitulated on under Emmanuel Macron those eight years ago, but it did not do anything to produce the sort of volume and these massive protests we got all across France. We have a similar situation happening now. This began as student-led protests objecting to spending cuts to education, objecting to the conditions of institutions, and it has come to total chaos and disorder and is being composed of not just students protesting in the street but a lot of different people, causing a huge amount of damage across France. There are similarities to what we saw eight years ago. We did see people take to the streets, cars burn, that sort of thing, but it was centralized towards Paris. What we saw over the weekend was that was dispersed across the nation, across France. You saw the shocking images emblematic of the protests, the burning of the town hall, which also had a huge protest in Marseille. At the beginning of the protest, it was clear, but now it becomes this massive pressure relief valve to legitimate anger at the government of France but an outlet for a lot of criminal behavior. That is the difficulty this government has to parse. A very different situation in many ways from what we had in 2018 because the government does not have the political authority. They don't have the majority in parliament, the money, the resources. We have been talking about the budget crisis. We are six months away from an election in France.
Isabelle: So where do we go from here? Because the government already talked about setting up curfews and admitted to security failures. How can they convince investors that they have the situation under control?
Oliver: I don't think they have the situation under control. That is a real problem. The real test will become, does this become something like the Yellow Vest protests from eight years ago when this becomes an every week, every Saturday rolling protests that alternates between protest and riot? It is not clear that the government has things in hand. Emmanuel Macron gave a very short statement last night at 8:00 p.m. He spoke for eight minutes and left to the Middle East and left it to his deputies to handle it, whether it is the prime minister or local authorities. We understand there are curfews currently in place after 11:00 p.m. There will be restrictions on movement and what you can do. That is a fairly unprecedented measure but these are the things they are trying to do to circuit-break and bring some of the tension out of the air. The difficulty is if you put those things in place and people object to them and start to fight back, you escalate the situation. That is the difficult balancing act the police have to deal with.
Carol: You are focusing on what is going on in France, but they were not alone when it comes to protests getting out of hand. We heard the Italian prime minister chairing a meeting. Demonstrations in Milan ended in rioting and looting. Protests in Belgium, Portugal, Albania. I think about globally just how the average citizen, dare I say average, I never know what that means, but how many citizens across the globe including in the United States are feeling left behind economically, not represented politically. Is there a bigger, broader message as we watch what is going on around the world?
Oliver: There certainly is a bigger, broader message. I think it is hard to coalesce into a single narrative across all of these nations and across the world, but there is certainly a great deal of anxiety around the cost of living. There is inflation rearing its head once again because of the war in Iran. We are seeing that manifest itself in energy prices across Europe. There is a great deal of uncertainty and fear around AI and being left behind. That is one of the dimensions of the student protests, potentially having some difficulty seeing their place in the world. I am usually based in Brussels. 10 days ago, we had the same situation on our own streets. I was walking back from the office one day. You could hear the commotion, the tear gas. Similar situation with a lot of kids, young people in the streets getting tear gas.
Carol: Appreciate the update. We know a long day. It is into the evening there. Let's not forget we saw French government bonds dropping too.
Isabelle: And Italian bonds seeing a lot of pressure. The whole eurozone phenomenon.
Carol: Continuing to watch that. Coming up, how AI is rewiring financial services. The Perplexity CEO will be our guest.
Charlie: It is 2:21 on Wall Street. We check markets all day long on Bloomberg. Stocks are higher. A rebound for chipmakers today. We have the Dow, S&P, Nasdaq all in the green. But really, technology, Nasdaq. The S&P 500 Index as your baseline up 0.6%, now at 7704. Nasdaq up 318 points for the Nasdaq Composite Index. That is a gain of 1.2%. The Nasdaq 100 Index doing a little better, up now by 1.3%. Dow Industrials have been fluctuating for much of the day, holding onto a gain of 0.1%. We have the Bloomberg Magnificent Seven Index up 1.4%. The Philadelphia Stock Exchange Semiconductor Index up by 1.8%. The 30-year currently at 5.47%. Gold down 0.4%, 4146 the ounce. WTI up 1.9%. Brent down 0.1%, $109.76 a barrel. Confidence among American homeowners slumped to a 14-month low. Lennar down 1.3%, Toll Brothers down by 1.7%. Subscribe to Bloomberg News Now wherever you get your podcasts. I am Charlie Pellett. That is a Bloomberg Business Flash.
Carol: Thank you so much. It is Carol Massar along with Isabelle Lee in for Tim Stenevec on this Monday. We will go from New York to Vegas because underway in Vegas is a conference that describes itself as a content, sales, and networking platform for the global money ecosystem. We know there is so much going on right now. They focus on what is next across the world of payments, fintech, financial payments, something I feel like you talk a lot about.
Isabelle: Definitely. I have been to one of these conferences and you meet so many people. It is fun.
Carol: The intersection of all of this. We should go. We will go there now because with us is the CEO and co-founder of Perplexity, the AI search company. He is Aravind Srinivas, and he joins us from Money20/20 underway in Vegas. Joining us is Ed Ludlow out there in the San Francisco bureau. Aravind Srinivas, I want to kick it off with you. Your panel tomorrow speaks to us in a big way with what is going on in financial services and how AI is rewriting it. I am curious, what does it mean in the real world when we talk about this, and what does it mean for Perplexity or another agent, what you can do for the financial world? Because I was speaking at something like Future Proof in Huntington Beach, California, there was a lot of talk about the role of agents when it comes to the financial world.
Aravind: Yeah. So, a lot of people think of agents as just consuming data that exists on financial services. There is a great connector that aggregates a lot in one single platform. The difference for Perplexity, we are super focused on being the most accurate AI. There is this benchmark built by ByteDance and Columbia Business School. Finance is a vertical on which accuracy is table stakes. Perplexity has the best accuracy because it focuses on search and focuses a lot on making sure the agents that power financial research are grounded in accurate real-time data as well as personal data, but a clear trail to where that data comes from. That is the key differentiation to what happens on a Perplexity computer. We have been working on it for months now and the usage has been skyrocketing. People using it are tracking their spend over time. They basically use it as their own personal CFO. Perplexity becomes your CFO for tracking all of your personal finance spend, putting out your investment strategy, how to construct your portfolio, how to make sense of what is happening, how to assess your portfolio, how to rebalance it. So it starts with basic things of that helping you get to a certain budget and what subscriptions you are wasting money on to an actual portfolio like crafting a retirement strategy.
Ed: I appreciate the emphasis on accuracy. And there is a distinction in a world in which an agent is AI that can take action as opposed to just a recommendation. Can you talk a little bit about the technical challenge of that, how the model can decide what is right to make an independent autonomous decision and when it needs to refer to a user for a check?
Aravind: Yeah. At this point in time, we are only offering read-only agents. Perplexity computer can only do the actions on the data it ingests from Morningstar, which reflects that. We believe agents are not quite there. They actually don't make investments on your behalf or trades on your behalf. You have to be very precise on what you want it to do. Coinbase and all of these APIs, but the way people use these agents, it does not do trades on your behalf, but it makes sense of what is happening in the world and helps you decide. That is where we are today. We really believe that accuracy is the only way to gain user trust. You need to gain user trust for them to make decisions for what investments to make on your tool, for the tool to do that on your own behalf.
Ed: A big news headline in the past week is you are open-sourcing Space. Basically, the security system used to sandbox agents in. The agent stays within Space while it runs code, works on files. Why did you take that step?
Aravind: We want to support the ecosystem. We started building the sandbox platform. If we relied on a third-party provider to run our sandboxes, we would be spending an additional $15 million a year or something. So it made sense for us to build our own platform and to optimize it to be secure because you are often reading about how agents are going rogue, escaping sandboxes, doing things that were not intended, or attackers gain control of the sandbox and they can use it in malicious ways. So we wanted to first make sure it saves us a lot of money and is very secure for our users, secure for our company, and we decided it is in our best interest to open-source it because it attracts a lot more eyes on it and that is the way we can make it even more secure and robust and scalable as well as optimize it for multiple different chips. The default CPU on all the sandboxes running right now, but specialized CPUs are being built for hosting sandboxes, so that is another big focus for us.
Carol: One of the things I wanted to ask you about on this report, why do you think this is necessary to do? What is the bad thing potentially? Can you hear us? OK. OK. I think we are having some technical difficulties. We will try and reconnect. Ed, you are still with us. But that report, I want to bring you into it. I guess one of the questions is you are wondering, why are they doing this? What was the reason in terms of opening this up? What was it they were maybe trying to prevent?
Ed: So the distinction of the risk of an open-weight model and then the environment that an agent runs in. You saw it today from the federal government saying they won't allow civilian agencies to use DeepSeek. With an open-weight model, it can be downloaded in its entirety and can run on your computer sitting on your desk and you can modify it. That takes it outside of the safe environment that the designer of that model puts into its own servers. It is also important for people that want to have access to AI at an affordable level. I think we are back with Aravind. You tell me.
Carol: Technology throws us for a loop here. I wanted to follow up on the report you were just talking about with our Ed Ludlow. Why was this necessary to do? I am curious, is there a bad thing you are trying to prevent an autonomous agent from doing?
Aravind: The best way is to make it open-source. It is true Android phones are running a version of the open-source. So a lot of the deep learning libraries are on open-source. These are all safe and secure systems that it is running on. We think sandboxes should be viewed in the same way. Instead of talking in abstract terms like agents going rogue, why don't we just open-source the platform and the underlying code base and give attackers and defenders the same code base so that everybody can figure out what are all the areas of attack and build the defenses for it? That is exactly what we did. We first had Space. We asked a bunch of frontier models to figure out the sandbox and figure out all the various ways they can do that and build the defenses into the sandbox and open-source it. After a few iterations, you will end up with a very secure platform for hosting agent runtimes. The fact that it is open-source means it benefits the whole ecosystem. The neocloud can take it and run sandbox inference.
Isabelle: AI inference is expensive and you are giving away security software. What is the part of your business that becomes more profitable as you scale, and what happens if the model costs do not follow as fast?
Aravind: We continually train open-weight models and serve them on our own products, so there is a model-neutral layer. We know the real value to the user. It is not about which model is used. That is the position of an orchestrator. Tokens are going to grow multi-fold. With the spend, the model will not grow the same. It will be able to charge a markup on what it takes to serve. Whatever it costs should go down as you start training more models, so you get margins on both sides. And that is when we become profitable.
Carol: We have just about 30, 40 seconds. What is Perplexity becoming? It started as an AI answer search engine. It is increasingly about agents doing work. Just got about 35 seconds. What are you guys becoming? Just quickly.
Aravind: Perplexity is the place where work gets done in a model-neutral way, so you do not have the big model. You get your job done with the most accurate AI out there.
Carol: Forgive me, yes or no, is an IPO in your near future? Just quickly.
Aravind: We will see. We will see.
Carol: OK. That is fair. That seems appropriate given the environment. So appreciate it. Aravind Srinivas, CEO and co-founder of Perplexity, joining us out there from Money20/20 in Vegas. And Ed Ludlow from Bloomberg TV. We will stay with AI when we come back.
Charlie: It is 2:40 on Wall Street. We check markets all day long on Bloomberg. Stocks are higher. We are looking at a rebound in chipmakers. The Nasdaq 100 Index, the Dow, the S&P all up. 7699, up by 0.5%. Dow Industrials up 0.1 percent. Nasdaq Composite up 306 points, 1.2%. Nasdaq 100 Index doing better at 1.3%. All of this with the Philadelphia Stock Exchange Semiconductor Index up now by 1.8%. The two-year, 4.75% with a 10-year 5.12%, and the 30-year 5.46%. Gold down 0.5%, 4145 the ounce while West Texas Intermediate crude up 1.8%. American Electric Power is working with Amazon to evaluate plans for a 960-megawatt nuclear power plant in Indiana using a new reactor design. It is a project that would rely on unproven technology while potentially progressing efforts to promote next-generation fission. Shares of American Electric are down now by 1.7%. Amazon taking part in the broader tech rally today. Amazon shares up by 4.8%. For on-demand news 24 hours a day, subscribe to Bloomberg News Now wherever you get your podcasts. I am Charlie Pellett. That is a Bloomberg Business Flash.
Carol: Thanks so much. Carol Massar along with Isabelle Lee. I don't know if you were here on Friday, the Bloomberg Big Take ahead of an IPO with a floating hotel in it.
