Bloomberg Businessweek Weekend - January 23rd, 2026

29:37support for the show comes from public lately it feels like there are two types of investing platforms some are traditional brokerages that haven't changed much in decades and others feel less like investing and more like a game public is positioned differently it's an investing platform for people who are serious about building their wealth on public you can build a portfolio of stocks options bonds crypto without all the bugs or the confetti retirement accounts yep High-yield cash? Yes, again. They even have direct indexing. Public has modern design, powerful tools, and customer support that actually helps.

30:13Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

30:33complete disclosures at public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive.

31:24Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

31:53If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com. This is Caroline Hyde. And I'm Ed Ludlow. Join us for Bloomberg Technology, a daily podcast focusing exclusively on technology, innovation, and the future of business.

32:39We bring you the latest headlines from Silicon Valley and conversations with tech's biggest decision makers. You have to have a pro-innovation mindset. We were partnered with OpenAI. We've all experienced this incredible revolution. Bloomberg Technology. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app and anywhere you get your podcasts. Bloomberg Podcasts. Context changes everything. This is Bloomberg Business Week Daily with Carol Masser and Tim Stenevek on Bloomberg Radio. Charles Schwab reported earnings this past week that beat Wall Street expectations after the company reported a surge in average daily trading volume in the fourth quarter.

33:17All of this happening as retail investors sought to take advantage of the end of a strong year for the stock market. Retail investors are still looking for guidance as they saw markets whipsaw in response to President Trump's global tariffs and geopolitical uncertainty, plus a rising popularity in prediction markets. That's why we wanted to hear directly from the top and from someone who understands this space and markets in a big way. Rick Worcester is president and CEO of Charles Schwab. He kicked things off with us talking about the company's latest earnings update. It was a record quarter for us as a firm.

33:52Our earnings grew 50 % year over year. Our revenue was up 22 % year over year. And we saw net new client assets to the firm of$519 billion on the year, including an all-time record quarter in the fourth quarter of$163 billion. And importantly, what we are seeing is a bull market for convenience, not just in financial services, but I think across most industries. The way that reflects itself for us is a desire for clients to have more of their financial life conducted with one institution. And we've been the institution for many that they're turning to. We can help them with their investing needs.

34:29We can help them with their trading needs, with their wealth needs, with their banking and lending needs. And so by bringing together a client's financial life, we're able to help them more. When we do that, their satisfaction actually increases and our business grows. So it's a win for them because we're bringing convenience. And it's a win for us because we're doing more business with them and doing more to help them in their financial life. You mentioned financial lives and you just went through a whole list of things that people do with these apps and services. What about prediction markets?

34:56Can you talk a little bit about whether you're planning on exploring options for customers when it comes to prediction markets? It's all a rage right now, as you very well know. And you thought we were going to warm you up. We weren't. We're just going to go right in. At the moment, it's not high on our clients list of things they want us to innovate for them. And so we've been focused on our innovations and other areas that are more interest to clients. But I distinguish that between that and sports gambling. And if you look at 95 % of the volume of what people call prediction markets is actually just sports gambling.

35:25And that's not something that we're keenly interested in getting into for a very simple reason, which is our mission as a firm is to make clients better off in their financial life. And less than 5 % of people who go on to one of these gambling apps take out more money than they put in in the first place. That's the complete antithesis of what we do at Schwab. Our client's wealth is at an all-time high. The level of advice we're giving them is at an all-time high. And the amount we're doing to try to help them is at an all-time high. So we'll leave the sports gambling, which constitutes 95 % of the prediction markets volume, we'll leave that to the gambling houses, to the Vanduels, the DraftKings, and the Robinhoods.

36:08So it's funny. It's interesting that you say Robinhood. We'll get back to that because I think Robinhood would probably like to position itself as a competitor to Charles Schwab in a lot of areas. If we stick with the 95 % of what you believe prediction markets is sports gambling, what is the 5 % that is of interest to you that we could potentially see at one point on Schwab's platform? Give us some examples there. Well, I think if you want to take a position on what the employment report's going to be at the end of the month or how inflation's going to print, those things could have an impact on your portfolio.

36:42If you have a big bond position, you may have interest in what's going to happen in the inflation report. And it's a simple way of taking a position based on a yes or no position. And so that could be of interest to clients. But the reason I think we haven't seen much volume in those, and the reason why 95 % of the volume is in sports gambling, is because if you want to take a position on the employment report or the inflation report, there are countless ways to do that. And financial market participants are already doing that, whether it's in the bond market, in the futures market, through options.

37:14There's plenty of ways to do that today. And I think that's part of the reason why the true idea of prediction markets really haven't taken off. and why the firms that offer this have pivoted to sports gambling, because there's a lot more interest in that than there is in taking a position on the employment or inflation report. All right. So then safe to say, Rick, if you were a betting man, I would guess that there's nothing in terms of a prediction market on the Schwab platform in the next year or so, or maybe never? Well, we've been innovating at a very fast rate. 2025 was all about how do we meet the wealth, lending, active trading needs of our clients.

37:49And we had significant innovations in every one of those areas. We went to 24 by 5 trading for active traders. We continue to make our mobile app even stronger for those that want to actively trade and do so via the mobile app. For our wealth clients, we launched new tax, trust, and estate capabilities, including an investment we made in Wealth.com to bring trust capabilities directly to our clients. We launched a series of new capabilities for our advisor clients and in particular really leaned into innovations around making it easier for them to work with us. All of those are things that we think are far more impactful to our clients' ability to grow their wealth than prediction markets.

38:30And when we go out and survey our clients about what they want from us, prediction markets is low on the list. So it's something we are actively looking at. I think at some point in the future, we will have true prediction markets at some point, But it's just not high on our innovation list because we're firmly focused on those innovations that are going to have the most impact on our clients' wealth. Right. Unlike, you know, something we talked about when we were at Schwab Impact with you in November, that you had just done a deal which would give investors access to private companies. This was buying Forge Global.

38:58So, I get that's more of a priority for clients. Yeah, I think you go back to the 80s when I believe it was KKR that did the first leveraged buyout. Institutions have been benefiting from the diversification and the return enhancement from alternatives investments. And, you know, in the past decades or multiple decades, the really wealthy have also been able to participate in those return and diversification benefits. But the everyday retail investor has not been able to. And our Forge acquisition was really about democratizing investments and alternatives. We're now going to be able to bring it to all of our investors in multiple different forms and allow them to participate in private markets the way institutions and the very wealthy have been able to.

39:42And we're thrilled to bridge that gap and excited for what that could mean for our clients' wealth. I want to bring this into the conversation because I feel like when Tim and I and you were together at Chihuahua Impact in Denver, it was pretty upbeat, I think, about the market environment and the outlook. And there's been a lot that's happened here in 2026. It feels like volatility is back. I'm just curious, you know, have any of the assumptions about the White House and policy and changes changed in your view? Yeah, I don't think any of that surprises us. we're still within a percent or two of all-time highs in markets.

40:18I think there's going to be geopolitical noise from time to time. If you've read the book, The Art of the Deal, I think it begins with starting big in your requests and then negotiating to something that is workable for both parties. And my guess is that that may be the playbook that's followed here. But for our clients, we're not seeing an undue amount of concern. And this is the kind of environment in which we thrive because we're not just an investment app. We're so much more than that. We took 30 million calls from clients last year and answered them in less than 30 seconds. We're in many local communities across this country with actual people that are there to help coach our clients and how to navigate periods like this and how to see through the noise and be diversified and stick with it for the long term so that they can build their wealth.

41:02So whatever markets and geopolitics bring, we're going to be ready for it. And it's going to help us distinguish what we stand for here at Schwab, which is helping our clients grow their wealth. You know, we had some reporting in recent days about the New York Stock Exchange exploring ways for 24-7 trading of certain assets. And I'm curious, crypto kind of paved the way for that because a lot of people can trade crypto 24-7. What do you think of the ability for people to trade stocks 24-7? Well, I think we're very open to that and would certainly participate. We're already 24 by 5 today. we see very little market activity or very little client activity outside of market hours.

41:44It's usually only a couple of a percent. The vast majority of trading happens within the market hours. And I think the market hours are a feature, not a bug. And what I mean by that is by limiting the market hours, you draw people in at the same time and create a lot of liquidity so that spreads are tight and trading efficiency is very high. I think the convenience of 24-7 is certainly very appealing, but we need to make sure that those trades are done in a way that makes sense for clients. And, you know, as we see clients trade on our 24 by 5 platform, we make very certain that they trade in a way that they're recognizing the higher spreads and we make that very clear to them.

42:26And they live with that for the convenience, but we just need to be careful as we go to 24 by 7 that we don't lose the efficiency of the market and the benefits of getting everyone into the market at around the same time, which is great for trading efficiency. Hey, Rick, super quick, 10 seconds. Feels optimistic this year? I think so. There's a lot, you know, the economy is on strong footing. Market's been up three years in a row. Unless something changes, things look pretty good. Our thanks to Rick Wurster, president and CEO of Charles Schwab. We should point out after the company reported earnings, there were a few analysts on the street, including UBS and TD Cowan, that actually raised their price target on Charles Schwab, which really outperformed last year and is already trading higher here in 2026.

43:08So I really enjoyed that conversation with Rick for a couple of reasons. One, I thought he was really candid with us when it came to prediction markets. And he mentioned some competition. And what was notable to me, Carol, is he put Robinhood, which I would say is among the biggest competitors to Charles Schwab, at least with the retail investing audience. Right. He sort of alluded to that company in the same breath as he referred to you know, Kalshi and Polly Market as prediction platforms. And he was very quick to say, we're not interested in sports prediction markets. We think that's gambling.

43:46And if you go to Robin Hood's website and you just look at prediction markets, it's like all sports that are featured. And we're recording this, you know, when we're talking about the Australian Open. So there's Australian Open, there's Denver versus Washington. There's some other NBA stuff. There's some pro hockey, there's some pro football, there's some soccer. Those are the events that Robinhood highlights on its website. Well, and this is kind of interesting, and I feel like there's going to be a moment where regulators are going to say, well, wait a minute, are these sports gambling sites?

44:21And so what's the oversight that's required? Is it just like the other gambling sites, right, where there are rules and regulations that are keeping an eye on them. I did think what Rick said, as you said, not interested in offering sports gambling at Schwab. He said he could see where clients, as you heard, you know, doing wagers on like an employment report, something like that. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Ahead in our next hour, the CEO of Barnes & Noble on the company's post-COVID revival. I love this conversation.

44:52Plus, look out, Uber. The future is self-driving cars, think something like Waymo. This is Bloomberg Business Week. I'm Carol Masser. And I'm Tim Stenevec. Stay with us. Today's top stories and global business headlines are coming up right now.

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46:21illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind.

47:05If anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive. Yeah. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology, it's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

47:46If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better. Find an agent at CINFIN.com. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy.

48:34Plus, global business, finance, and tech news as it happens. Bloomberg Business Week Daily with Carol Masser and Tim Stenevek on Bloomberg Radio. Plenty ahead in our second hour of the weekend edition of Bloomberg Business Week, including the CEO of Full Speed Automotive on the health of the consumer. Plus, from cars people are buying and holding onto to testing the next level of AI behind the wheel, our own Hannah Elliott takes us for a spin in the Mercedes that almost drives itself. First up this hour, just about one year ago, Bloomberg Business Week had a great story about Barnes & Noble's unlikely comeback.

49:10Thanks to a pandemic era swarm to what's called BookTok, U.S. readers are more quickly discovering titles and recommending them to friends and followers. That's good for the book industry. It's offered Barnes & Noble, which reported seven straight years of falling sales before it became the target of a billionaire hedge fund owner back in 2019, a chance to resurrect itself. Which seems to be now in full swing. The company, which is owned by Paul Singer's Elliott Advisors, has 600 bookstores in the United States right now. It opened more than 50 last year and plan to open another 60 more this year.

49:43James Don is CEO of Barnes & Noble. He's managing director of Waterstones Bookstores in the UK. He's founder and owner of the independent bookstore chain, Don Books, too. He joins us here in the Bloomberg Interactive Brokers Studio. Welcome. Thank you for having me. So it's a private company now, so we don't get all the numbers that we get. But right before it was taken private, Barnes & Noble had a loss of$125.5 million on revenues of$3.7 billion. That was for the fiscal year that ended April. of 2018. Same store sales were down more than 5%. What are some metrics you can give us right now that speak to the health of the company?

50:18Well, I think generally the book market has rebounded. So it's not just us, though it is definitely us along with books. And COVID was a difficult time for us. Obviously, a lot of our stores were closed, but people rediscovered reading. But also, I think always bookstores are great places in which all ages, all types, but particularly young people like to gather and like to read. And I think we run our bookstores better, I like to say. But I think also the independents are opening up great stores around and people are discovering the pleasures of a physical bookstore and we're benefiting. I love that you go, why do you think it's come back?

50:52Because it used to be just lovely little bookstores in towns and cities. And then, of course, the big guys came in. And I mean, there was always the tug of war between the big and the small. I think there was an old Tom Hanks, Meg Ryan movie about this, right? There was a cute You've got mail. You've got mail. And then it just felt like it was really bad for the selling of books. Amazon came on the marketplace. And now I too have seen a resurgence of little bookstores. What do you think that is? Well, Amazon is why people lost confidence and then the rise of Kindle and there was a general notion and a media sense that physical books were gone, reading was disappearing.

51:30And I think collectively, including the big chains and the small guys, a lot of people lost their way. And then we got ourselves sorted out and the good independents have sorted themselves out and we're all now running much nicer stores and people are back and have embraced us. Now, the independents who did not lose their confidence, they wouldn't have even noticed the trials and tribulations that the rest of us went through. So what is it about the experience inside a bookstore? And we're not just talking Barnes & Noble here because you have experience at Daunt Books. You're also managing director of Waterstones Bookstores in the UK.

52:03What is the experience that you try to create inside a bookstore that makes it so people don't order them online or download them on an e-reader? I think the great independent bookstores have that magic of curation, which is selecting the titles they have, matching those to the community in which they sit, and having a really nice physical space and a welcoming and vibrant one. What we as a chain bookstore now need to do and have done is abandon all of the consistency and operational disciplines of a chain bookstore and hand power to our individual store teams and allow them to replicate that independent.

52:41So essentially, you're trying to create a community bookstore within every Barnes & Noble location. And that has worked dramatically well in many, better generally in most, and not so well in some. Where has it not worked and why? Where the teams don't quite understand or don't have the skill set or where we haven't built up the experience. Because book selling is a trade, it's a vocational trade, and the skills that are attached to that have to be learned and developed. So we haven't completed that journey, I would say. But in most of our stores, they're a lot better than they ever were. And some of them are really fantastic.

53:14So James, when it comes to the Barnes & Noble, does that mean there are certain things when you walk in that are going to be consistent, whatever Barnes & Noble you come in and then there's going to be certain nuances to the community and the environment? Or what? How do you kind of hand over the range? Well, the consistent thing is they're full of books and they are bookstores. Check. But we, and because there are books, obviously, that are bestsellers and books that people want and, you know, everybody has to have capture in the rye because every bookstore does independent or thing. But we leave it entirely up to them.

53:46We give them no constraints, no budget constraints, no visual constraints. We just say use common sense and make it the best possible bookstore you can. And generally, they get on with that dramatically better than when they were given very strict rules to do it in precisely the same way everywhere. I want to know about how your role works. It's not every day we speak to the CEO of a large company that has two other jobs as well. So as I mentioned, you're CEO of Barnes & Noble, you're managing director of Waterstones Bookstores, you're the founder and owner of the independent bookstore chain, Daunt Books.

54:16How does that relationship work just in your professional life? How are you the CEO of Barnes & Noble, but also the managing director of these other stores? I think the only professional advantage I have is I really do understand how to run a really good bookstore because I ran one myself for 20 plus years, longer, and continue in a sense to do so. So I understand what my teams need, what my stores need. And then my job is to just make sure from a central perspective that we don't get in their way and that we provide what they require to run a really good bookstore. And what they generally require is, frankly, money.

54:50They need clean carpets and they need their HVAC fixed and they need books to turn up on time when they order them. But I don't tell them what to order and I don't get in their way. And that allows me to do the job reasonably well. And frankly, the less I do now, the better it goes. Are people as interested in reading classics and old time books that were just very popular years ago. I'm just curious about, like, what is it that people are buying? Well, there was a, you mentioned BookTok earlier, BookTok coming out of COVID was exploded with a love of classics. Everyone was reading Middlemarch and Jane Austen, and that was hugely exciting and continues still.

55:29But at the same time, you know, the roving eye, because, you know, kids want to read the same thing because they want to talk about books and engage. And at the moment, it's romanticy, and it's relatively spicy romanticy. But at the same time, they're reading the great books as well. Books are only part of what Barnes & Noble sells. What else do you use to get people in the door and get them walking out, parting with money? Well, we have sort of become really the last place in which quite a lot of these sort of dying categories actually have rejuvenated. So we have a fantastic music business, vinyl, even DVDs, CDs.

56:05There's been an increase in sales of those, We have a fantastic newsstand offer. And now we do toys and games, board games, and the rest really properly. Again, aiming for those to be educational, to support effectively the intellectual engagement that you have around books. And therefore, they sit, we believe, naturally alongside books. And that's our job. We call it related product. We have to keep them tightly tied into a love of learning and development, which is encapsulated by books. We're talking about James Dodd. He's the CEO of Barnes & Noble. He's also managing director of Waterstones Bookstores in the UK, founder and owner of the independent bookstore chain, Don Books.

56:42He's here in our Bloomberg Interactive Broker Studio. James, what about like live events for doing stuff? Like I've done some things at local bookstores, you know, a Q &A chat with someone on a new book. But I'm just curious, how do you kind of think about that, whether it's in your own bookstores, but also for Barnes & Noble, making it a place where people go to meet up? I think we are social spaces and that can, at its sort of modest level, that can be the story time a bookseller has to learn how to read a book upside down to three and four year olds, all the way to obviously being the interaction between authors and readers.

57:15And so holding talks, events, question and answer, interviews, all of the myriad of ways in which you can make a bookstore an exciting place in which to come. It's easier to do in the metropolitan cities because you can get the great authors, but you can do it wherever you are on a more modest scale. I mentioned same-store sales back in April of 2018 were down more than 5%. Can you tell us same-store sales, are they positive now? Yeah, the book market has been going up. So, I mean, there are plenty of publishers whose public numbers will show you that. There's been a huge boom since COVID. And generally, the publishers have been doing very well.

57:50And, you know, we're in that market and we're doing very well. And when you have an increasing store count, and we are now over 700 stores, in fact, we were below 600 a short while ago, then you're going to sell an awful lot more. The Wall Street Journal reported a possible IPO as early as the second half of this year. Is that still the plan? Well, luckily, that is above my pay grade. It would affect you. It will affect me, but I don't own the place. Sad as that may be. Do you think you would stay on as CEO? I enjoy what I do and I have a feel that what we do and the people who work for me are hugely vocationally motivated.

58:27We're not as important as public libraries by any close measure, but what we do, we do do with an immense respect for the power of books. And I think all of us, including myself, hope to continue to do that better. I think it's interesting you brought up libraries because I do feel like there's less and less funding for libraries in different towns. I know growing up that that was a big deal. You get your library card, you go to the library. That was a big deal. But is some of that also maybe fueling where people just have to go buy their own books, especially for kids? I don't think that's to our benefit.

58:58I think it's only to the detriment generally of reading and generally for the engagement with books. And I speak actually as an Englishman and what's happened in the United Kingdom where public libraries have not been funded for really a decade and more. And it's hugely to the detriment of society. AI and books. This is wild. I mean, this has been happening for a few years, but if a big news event happens, you can go find a self-published AI written book on Amazon to download right away. Are you going to carry AI books? We generally don't, and we go to very great efforts to exclude them from our online operation.

59:34It's a challenge, I bet. It is a big challenge. But actually, AI is absolutely fantastic at hunting out AI. So that's helpful. But in and of itself, as long as AI, it is clearly communicated that a book is created by AI, and if readers want to read it, then we should provide that. That's our role in life. And so I'm not an evangelist saying never AI, but I am saying it should be very clearly indicated whether it is a real author. To whom, by the way, as booksellers, we feel huge duty of care or if it's AI. How big is AI category when it comes to books now in your stores? Nothing. Nothing. I mean, not nothing, nothing, but as far as we can possibly determine, it's nothing.

1:00:20Our thanks to James Daunt, CEO of Barnes & Noble. You're listening to Bloomberg Businessweek coming up from bookshelves to oil changes, what consumers are spending money on when it comes to their cars. I think they're frugal and they're very, very cautious about spending anything unnecessarily out of their pocketbook. They're also the customer wants efficiency. They don't want to be there long. They want to be quick, get it in, get it out. And it's also not lost on us that about 70 % of people distrust the folks that work in my industry. And we are trying our best to reverse that trend. The CEO of Full Speed Automotive joins us next.

1:00:58This is Bloomberg.

1:01:11Support for the show comes from Public. Lately, it feels like there are two types of investing platforms. Some are traditional brokerages that haven't changed much in decades, and others feel less like investing and more like a game. Public is positioned differently. It's an investing platform for people who are serious about building their wealth. On Public, you can build a portfolio of stocks, options, bonds, crypto without all the bugs or the confetti. Retirement accounts, yep. High-yield cash, yes again. They even have direct indexing. Public has modern design, powerful tools, and customer support that actually helps.

1:01:46Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. And paid for by Public Holdings. Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by ZeroHash. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. and I asked him, how can companies use AI to its fullest potential to create smarter business?

1:02:27My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind it. if anybody is not using AI to make their developers who write software 30 % more productive today with the goal of being 70 % more productive. Yeah, wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology.

1:03:12It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

1:03:28If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

1:04:06Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. This is the Bloomberg Business of Entertainment Report. Paramount Skydance is looking to return to the days where many of us were saying, I want my MTV. Bloomberg's Lucas Shaw tells us Paramount is looking to revive MTV and has spoken with several major companies and leading music industry figures about acquiring a stake.

1:04:46And they would like to find someone in the music business who wants to partner with them, invest in it, bring in some assets. Most of the feedback that I've heard from the music business has sort of been, what is in it for us? MTV began in 1981, airing music videos before it evolved into a home for reality TV programming with shows like Jersey Shore and The Real World. This is the true story. Shaw says Paramount believes it can reinvigorate MTV by recasting it as more than just a cable network and bringing the focus back to music. But he says it's a tall order. I'd say the odds are pretty low.

1:05:18People have tried to reboot MTV many times before and it hasn't worked. Paramount shut down MTV's 24-hour music channels in select countries at the end of last year. Karen Moscow, Bloomberg Radio. This is Bloomberg Business Week Daily with Carol Masser and Tim Stenevek on Bloomberg Radio. Some warning signs in the global car market. You might recall earlier this month, Porsche reported its sharpest sales decline since 2009, weighed down by weaker demand in China, tariffs and rising EV costs. Meantime, a shortage of memory chips caused by the data center boom is leading the auto sector to brace for yet another potential supply chain disturbance.

1:06:00Let's talk about the U.S. story in the auto industry and sort of a different take on it. We've got Brian Macyak with us. He's CEO of Fullspeed Automotive. It's the parent company of the automotive repair and service facilities, including Grease Monkey, Speedy Oil Change, and Auto Service, and Quick Car and more. So think oil changes, tire sales and rotations, brake services, and the like. Brian joins us here in the Bloomberg Interactive Brokers Studio. Welcome. How are you? Hey, I'm doing great. I appreciate the opportunity. Yeah. So you've got a really interesting view on the country and the economy because Full Speed Automotive, through its different brands, franchise and company owned, 900 of these stores throughout the U.S.

1:06:37You serve millions of customers each year. How is it out there? Like, what are you seeing from your customers? Yeah. So it's very, very clear if you listen to the customer exactly what they want. They want value. They want efficiency. They don't want to be there. I mean, let's, you know, in all honesty, nobody wakes up in the morning and is excited to go get an oil change, right? No one wants to spend the dollars. It's a grudge purchase, right? It's a chore. And we understand that. That doesn't mean that we can't deliver a delightful service for them. Right. And so when they show up, we want to treat them like they're a guest in our house.

1:07:12We want to open the door for them. We want to escort them into the waiting area. We want to offer them water, coffee, and we want to provide them honesty of what that service needs. Are they on time in general with the recommended rotations, with replacing tires, with oil changes, or are they letting that slip and are they driving cars longer without getting them serviced? Like I'm looking for any economic signals that you can send us from from what you see. Sure. Sure. No. Our space is fairly resilient to whatever fluctuations in the economy exist. Like right now, the average cost to buy a new vehicle is about$50 ,000.

1:07:57People are spending an average of about$700 a month on their vehicle. And so what's that? You know, you think that - That doesn't include gas. You're talking about a car payment. Car payment alone. Yeah. Right? And so that is forcing people to keep their cars longer. Average age of the vehicle on the road right now, and there's about 300 million of them, about 13 and a half years. They're still continuing to drive about 13 ,000 miles a year. So they're driving longer or they're driving, you know, normal miles. They're keeping their cars longer. And that means they have to they have to go to preventative maintenance.

1:08:32They have to get that car done. But they're trying to watch their their pocketbook. And so they are stretching as long as possible before they need to get it into our bays and perform the oil change. How long have you started seeing that that people are stretching out? Yeah. So, you know, there was a time when we used to see every three months on the dot. And now it's around five, six months. We might see that customer only two times a year. When did that start? Last six months, last year? Probably about the last 12 months. Yeah, last 12 to 18 months, we started to see it slip. But that's where it is right now is about five to six months.

1:09:04We'll see that customer. So how would you, Brian, describe the consumer? Because I think it's safe to say that when we talk about this economy, folks say we wait. or, you know, when your record's on Wall Street, we've got economic growth. Like there's a lot of metrics out there, even though we're starting to be a little bit concerned about the job market, unemployment rate's still pretty low. So I'm just trying to understand, well, how would you describe today's consumer? Yeah, I think they're frugal. I think they're frugal and they're very, very cautious about spending anything unnecessarily out of their pocketbook.

1:09:34They're also, the customer wants efficiency. They don't want to be there long. They want to be quick, get it in, get it out. And it's also not lost on us that about 70 % of people distrust the folks that work in my industry. And we are trying our best to reverse that trend. And how we're looking to do it is infusing some technology into the customer experience. We don't want you to take our word for it anymore. When we come to you and say, when we say, you know, you need a you need a transmission flush or a brake flush. We want to show you visually. We want to send you a digital vehicle inspection on your phone so you can see it.

1:10:18And we start to build that stickiness and that trust together. Well, isn't that kind of what cars are about? I mean, I remember a few years ago, it's kind of a little embarrassing, but we had a car and, you know, there was, I guess, a rainstorm and there was some water runoff and thought we could kind of go through it. It didn't look so high. It ended up frying all the electronics and we had to just, we lost the complete car. But I'm just, isn't it today that you just basically plug in and the car tells you what it needs to have done in a lot of ways? No. In some, yes, you can do those diagnostic.

1:10:49It doesn't hit every single code. And sometimes the customer just doesn't want to pay that extra $50,$70 for that diagnostic. They're requiring on our 16-point inspection visually. And we don't want them to just simply take our word for it. We want to show them in a video so that there is no ambiguity whatsoever. So what do you show them? It's so funny. A couple of years ago, my uncle had this Prius for years that he drove for years, then it went to my cousin, his son. and he showed me this video a couple of years ago and it was like, the car had just been beat up. I mean, it parked on the streets of New York for years.

1:11:28It was a complete beater. And he showed me this video, he was like, check this out. And it was a video from a mechanic that was showing all the places where the rats had shoot up inside of the car. This is very what happens in New York City, especially in the winter. Like it's really gross, but it's a very New York City thing. And what I was struck by the video was it was because it was basically like the mechanic was offering this as proof of this happening. It wasn't like, hey, check this out. This is crazy. So he went inside the car and showed it? He's like, this is why we are replacing this.

1:11:57This is why we're doing this. It's this like environment where there's a real lack of trust because I think there's a power dynamic imbalance when it comes to the customer and when it comes to the person who's working on your car. Customer doesn't know anything. We have Google and chat GPT. The person working on the car seems to have all the power. And I think that's a hard thing for me as a customer to come to terms with, especially when that check comes. You got it right. Right. So we want to we want to go through our 16, 17 point inspection. We want to tell you, hey, your tires look good. We want to show you.

1:12:25We want to show you the measurement that you're fine. You don't. If anyone tells you you need new tires, you don't. And then we want to show you some things that this needs to be replaced, but maybe not right now. So maybe it's 30, 60 days from now. And that gives our marketing team then an opportunity to reach out back out to that customer in a month or two and say, it's about that time. Bring it back in. Here's a coupon to do so. It sounds like it's also labor intensive. Like you do need a lot of folks in order to the cars come in, do the evaluation. Walk us through that. You do. Yeah. So cars are becoming much, much more technologically advanced and difficult.

1:12:57And that's good and bad. I remember the days when my dad would change his oil in the parking lot. Now these vehicles were so - My dad taught all of us how to do it. Yeah. Now you can't get - Now you can't - Now change our oil, but we had to learn how to check it. Now you can't get rid of the - We had to keep track of our mileage. Like we had to do a lot of stuff. You can't get rid of the oil now. So you actually need to go somewhere. I know. That's right. That's right. So we have shifted from a do it yourself to a do it for me. Right. Yeah. But we need skilled labor in order to do that. And we have really good relationships with trade schools and trade school enrollment is is increasing.

1:13:28We also have found partnering with the military, folks that are getting out of the military and needing jobs. I mean, these are people that are well trained. They show up on time. They're loyal. Very, very good. Good workers. And they stay with you for a while. Can you find them? Because there was this Wall Street Journal story just the last few days. is the$160 ,000 mechanic job that Ford cannot fill. It's sort of turned into this lore as an illustration of the trade skills gap in this country. Can you find everybody you need? Not everybody. There's definitely, there's always a race for those master mechanics, no question about it.

1:14:01But do you need master mechanics? We don't. And so Ford would be different, right? They're doing heavy engine work, transmission work, and we don't do that. We focus on quick lube and then some ancillary services that you really don't have to drop off the car. You can still stay in the waiting room 20, 30 minutes and you're on your way. Can someone who has no experience but has drive and motivation come in, learn what they need to do there? Do they need some sort of training ahead of time? Yeah. So certainly you can take a newbie for sure. Not every employer is going to do that. We have a really robust training program where we won't let you work on a car until you pass the certifications.

1:14:36But for the right candidate, we'll absolutely put them through it. Franchise versus company owned, like close to a thousand total. What's the breakdown of franchise versus company owned? So we have 300 company owned, and then the remainder are franchisees and licensees. And you're owned by MidOcean Partners, private equity firm, acquired just about five, six years ago. That's right, five years ago. What's the plan? What's the next iteration of this? So right now, we're doing well from a cash flow standpoint. At some point, they may want to do a transaction. I'm sure they will. Right. But right now we're just focused on on the growth, growing top line and then growing our rooftops largely on the franchise side.

1:15:14Why have so many different brands? Why not put it all under one brand name? Yeah, that's a fantastic question. And my initial thought was, yeah, let's just all convert it to one national brand. But what we have found is in some pockets in some regions, Michigan being one of them, they really want to go to their small regional brand that they've gone to all the time. There's name cachet there. And for us to change, it would be a silly business decision. So, you know, it costs a little more on the marketing side, right? For sure. But that's what the customer wants. And that's what we want to deliver.

1:15:46Where we think we can convert the name, we will. EVs don't need new, they need new tires, they need new brakes, but they don't need the lubrication services that you guys do. Right. Yeah. Is it a concern? It's not. You know, I think a few more years ago, we all, well, I don't want to say about all, but some of us thought, oh my goodness, if this is going to take over, the quick loop space is going to dry up pretty quickly. And it really hasn't transferred to that, right? Hybrids are important. Hybrids are selling, but hybrids need oil changes. Where we're trying to even see those EVs are, we offer a diversified menu of services.

1:16:25So they still need the brakes. They still need a lot of the other ancillary services. So we still see them. That was Brian Maciak, CEO of Full Speed Automotive. Still to come on Bloomberg Businessweek, she rode in a Mercedes with next level AI and said it made everything else feel, well, kind of dumb. This has been developed with NVIDIA. So this is truly AI in your car, driving your car on a fully other level than some of these lesser self-driving systems. MB Drive Assist Pro is so smart that it does know when it can turn right on red and when it can't. Our car guru, Hannah Elliott, on the driver's seat of the future.

1:17:13That's next. This is Bloomberg. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria.

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1:18:22All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example, if anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

1:19:16Yeah. Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

1:19:46If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at CINFIN.com. This is Bloomberg Business Week Daily with Carol Masser and Tim Stenevek on Bloomberg Radio. So imagine the car you're driving could think faster than you.

1:20:34Anticipate every stop, turn, and lane change. Basically handle the city streets on its own. Sounds ideal. Like even read a sign that says, you know, no right turn on red. I think that's amazing. OK, so we've been talking about the potential for self-driving cars for many years now, but that could soon become reality. With us is Bloomberg News auto columnist Hannah Elliott. She test drove a Mercedes with the latest AI system with some surprising results. I got to tell you, Hannah, I love. OK, Carol and I like it's no secret how much we love Waymos when we go and, you know, go to San Francisco or L.A.

1:21:09or Phoenix or whatever. Like Waymos. Yeah, same. Um, what shocked me the most about one of the things that shocked me the most about reading your story was the price of the car you drove was under$50 ,000. Me too. I was surprised. Okay. What is it? Tell us about this car. Okay. So yes, this is the whole thing is kind of about this car, which is the Mercedes CLA. And the starting price on the car is$47 ,250. $50, which is amazing. This is now the new entry level car for Mercedes. It's an electric vehicle, fully electric, but they are coming out with a hybrid version later in the year for those of us who still want our combustion engine along with our electric power.

1:21:57And it is a direct attack on Tesla and on some of these more affordable cars that people are selling in the rest of the world, especially in China, Mercedes has decided we're going to take them on. And we think we can give consumers a really good product at a very, very competitive price. And I think they nailed it. I really, really liked this car. All right. And I let you say my takeaway after driving around an hour in a car driven by AI makes everything else feel well. Dumb. Walk us through because there's actually two levels here. And full disclosure, I've had a few more Mercedes and like the latest one, which is now probably over 10 years old, has a lot of safety features in it that basically I take my hands off the wheel, it drives itself.

1:22:46This sounds like the next level. Yes, this is that I, the one that we should really talk about is the MB Drive Assist Pro. Now, there is an MB Drive Assist system that is already in the car that is level two advanced semi-autonomous driving, which means you can drive without your hands on the wheel for lengths of time and the car will drive itself. Okay, great. The Drive Assist Pro, which is coming out later this year and which I really spent the most time testing, is a system that allows you to navigate to any point, any place, and not touch the wheel at all. The car does everything. This is a subscription system that costs under$4 ,000 for three years.

1:23:40So in light of everything, I think that's a very good price. It downloads to the car. And this has been developed with NVIDIA. So this is truly AI in your car, driving your car on a fully other level than some of these lesser self-driving systems. and Tim, you kind of hit on it. The real difference here is that this MB Drive Assist Pro is so smart that it does know when it can turn right on red and when it can't turn right on red. It knows when it can roll through a yellow light and when it needs to stop because the light's about to turn red. It was really, really interesting. And I think the key takeaway is it felt more humanistic than any other sort of self-driving system that I've been in before.

1:24:37It felt like it was reading and understanding and comprehending street situations in a way that felt closer to human than we've had before. We should note that you still couldn't take this on a highway, right? That's right. This system is only for city streets. The MB Drive Assist, which is the lesser system, does go on highways and city streets. This system right now is only for city streets. So, yeah, that's kind of the caveat. We're not to this, like, bright future of robot cars driving us everywhere except for Waymos, which we can talk about, too. But they're getting there. And the technology is there.

1:25:19The highway thing is really more related to regulations and legislation and that sort of thing. But yeah, this was a really interesting, fun way to navigate around a city that I don't know very well, San Francisco. The car handled it. And dare I say it was relaxing. It was kind of great. How does it work? I mean, I know there's 10 cameras, five radar sensors, 12 ultrasonic sensors. But this end-to-end stack from NVIDIA, the role of NVIDIA and its expertise sounds like it's crucial in all of this. Yes. Yes. So NVIDIA has, this is their fully, full stack, which means that they developed the entire system internally for Mercedes.

1:26:04But NVIDIA has collaborated with a lot of different car makers, Toyota, Volvo, Rivian, Lucid, helping develop these AI autonomous driving systems. This particular system in Mercedes, like you say, uses 10 cameras, five radars, and a dozen ultrasonic sensors. It's kind of like what we see in a Waymo for anybody who has Renmin Waymos. Waymos use LiDAR, radar cameras, and high-definition maps to read and anticipate the environment. This is very similar. It's not exactly the same, but from a user standpoint, when you're in the car, it feels very similar. So if you have been in a Waymo, it's like, imagine that the Waymo is driving your own personal car and you're in the driver seat, which is a good thing.

1:26:55I have a lot of friends who are a little bit still uncertain about Waymo. They're not sure it's safe. And I understand that apprehension. But for me, and you guys can speak to this, too, it took like two or three minutes for me to be in the car before I trusted it. And then it was like, oh, yeah, this is fine. Yeah. I was going to say, I think anybody who doesn't think a Waymo is safe and I hope I don't ever eat my words here, Hannah. But I think anyone who doesn't, they just haven't been in it. Truly. Right. Because once you sit in and have that experience, you're like, wait a second. This thing is safer than the random guy who is driving me.

1:27:30who I called up on my iPhone. Hey, um. Yes. Oh, go ahead. Go ahead, Hannah. Because you actually do have some safety stats in here. Yeah, well, I was just going to say, too, no knock on the wonderful taxi and Uber drivers of New York City, and I'm grateful for them. But yes, I was going to say Waymo is a better driver than half of those guys, and those guys know it, too. So it really is true. And a lot of my friends, speaking about Waymo for a second, and actually enjoy not having another stranger in the car. So like you say, it's like once you try it once, you're kind of sold typically. I have to say - It's like the gateway drug to autonomy.

1:28:10Yes. The first time I did it, I have to say, I felt like I was in a spa. It was like immaculate. The music was moody. And I was amazed, Hannah, at how quickly, like you write about, like I closed my eyes because I had like a 40 minute ride to the airport. I think it was Arizona. And it was like, I couldn't believe and it was night. I couldn't believe how relaxed I was. Totally. And I and I have to say, too, and we've talked about this all the time. I love driving. I own old cars. I'm a big fan of driving. I'm honestly I have old combustion cars. You know, I'm all about the right tool for the job.

1:28:50I don't think we have to live in a world where there's only one option. I actually love the idea of a lot of variety and you pick the right tool for the job. And my point is, if you have a self-driving car like the CLA, this Mercedes CLA that truly is budging up on being fully self-driving, that's level three. This is level two plus plus, but we're very, very close. It doesn't mean you can't also have fun driving. It just means that when you're sitting in traffic and your eyes are glazing over and you want to pull your hair out, the car can handle it. You can feel like you're in a spa, for instance.

1:29:28Hannah, I'm glad. Without the essential oils. That's the only thing that was missing. Exactly. Although, maybe I need to start traveling with those. Exactly. You do live in California, so I think that's kind of par for the course these days. Hey, more broadly, you have another story, and it's entitled, Lookout Uber, The Future of Self-Driving Cars Like Waymo. Is that where we're headed? And it seems like there's a lot that we still need to tackle before we can get there? Yes. I think we are increasingly headed toward semi and full self-driving cars in urban centers, yes, and across ride-sharing platforms, yes.

1:30:05I don't know if you guys have seen Zoox going around. Zoox is in San Francisco, and there are a few testing programs around the country as well. Yes, we are moving this direction. And even if in private cars with AI defined vehicles like the CLA that Mercedes did. Yes, everything is moving in that direction. Now, do I think we're going to have a world that is dominated by self-driving cars that are level three and above level five is like full, full self-driving like robot taxi. You can take a sleep, take a nap in the back. We're not there yet. We're at level two plus plus experts that I talk to say we have another 10 years before we'll see anything close to a predominance of self-driving cars on the road so we don't want to get ahead of ourselves yes we're moving in that direction yes we're going to see it more and more and more especially as automakers let's be honest try to stay competitive with China because China is leading the way they're making great products that cost less so yeah we're leading we're leaning that way is it going to be another 10 years before we're like, quote unquote, living in the future?

1:31:16Yes. And also, I should mention, and I said this before, we've got to figure out the legal implications of all of this. Whose responsibility is it when inevitably there's an incident? We've got to sort through all of that, which is also why Waymo's not running in New York City right now. You know, they're figuring that out. So, yeah, we're moving in that direction. Are we there yet? No. And I highly recommend everybody check out Hannah's stories because I think there was that one thing that you mentioned, too, that kind of frustrated me is that it didn't always drop me where I wanted to drop. But we're going to make people go to the Bloomberg or Bloomberg.com to read.

1:31:52Come on, Carol, you can walk a little further. No, it ticked me off. I was like, wait, where's my car? Where's my car? Hannah, great stuff. We love, love, love catching up with you and looking forward to the Tesla story as well. That was Hannah Elliott. She's Bloomberg News Auto Columnist. And that wraps up our weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us. I should point out that even where I live, just across from lower Manhattan, starting to see some testing of Waymo's. Oh, so there's a driver in the driver's seat still. Yes, we did see drivers.

1:32:21OK. Be sure to tune in to Bloomberg Business Week daily, Monday through Friday, starting at 2 p.m. Wall Street time on Bloomberg TV, Bloomberg Radio, and on Sirius XM channel 121. You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News. We're simulcast on Bloomberg Originals. available at bloomberg.com slash originals and streaming platforms, including Roku, Amazon Fire TV, Samsung TV Plus, and more. Find our Bloomberg Business Week daily podcast at bloomberg.com, Apple, or wherever you get your podcasts. The latest edition of the magazine is available in newsstands now at bloomberg.com and always on the Bloomberg Terminal.

1:32:53Have a good and safe weekend, everybody. I'm Carol Masser. And I'm Tim Stenevec. Stay with us. Today's top stories and global business headlines are coming up right now.

1:33:05you