Bloomberg Businessweek Weekend - September 26th, 2025

24:44Well, can you, we've had some folks come on our program and say, okay, there's been so much funding. There's been so much money chasing these companies. There are also those people who say, we're kind of just going to wait until the dust settles because we think there could be this commodity issue when it comes to LLMs. What separates one LLM from another? What separates Claude from ChatGPT? And I fully were asking somebody who was at OpenAI. So that's where this question is coming from. A great question, though, because obviously now I use all of them to try to stay up to date on where everyone is.

25:18And I also speak with the different companies about sort of what their trajectory will be going forward. I do think the models are somewhat different just for users. They provide responses a little bit differently. They're friendly in different ways. They're useful in different ways. And so there's some personal preference. I do think that we will start to see differentiation in areas like material science, chemistry, biology, as people really move into these more specific domains, where different model providers lean in, who they work with and how will become important in terms of what you can do to solve problems with the technology.

25:56And I think the other piece, as you see with the NVIDIA OpenAI deal, we often say infrastructure is destiny. It is true that there is also this massive race for compute. And that is because to continue the research and development, to continue to make the progress, you need compute. And compute requires a lot of energy. So we don't know yet whether there will be differentiation there or not. But everyone racing to make sure they have the compute they need to continue development. You run your own advisory firm and you're dealing with kind of innovation and partnerships, right? And working with other companies.

26:29But I want to go back to what Tim said. I mean, I think there was when the NVIDIA deal came out that there was concerns that it was a sign of a bubble, that it's NVIDIA partnering with OpenAI. Obviously, it's the company, ChatGPT, so identified when it comes to AI at this point. But this idea that NVIDIA needs a marketplace to keep buying its chips. So I'm just curious. I mean, at some point, I don't know. What are you hearing from companies as you talk to them? Are they a little cautious at all? Is there any nervousness about this incredible spend and this incredible build out? Yes, a great question.

27:05Obviously, financial experts around the world asking many of these questions. I think, you know, we previously thought that NVIDIA may not be able to supply enough. So interesting to now hear people say, well, they are, you know, trying to find a consumer. A home for their chips, it feels like, right? Yeah. So I think, you know, I think that conversation happening on both sides. You know, my own personal view is that we are not yet anywhere close to maxing out the demand for compute and chips. And when we are, then you may actually see that model development is stalling or something else. But I just don't think we're there right now.

27:42I am curious, when you were at OpenAI, and we know you left a few months ago, and now you have your own advisory firm, is the phone ringing off the hook of people saying, help me, I need to find this? And what are they looking for? Yes. So it is true that people are looking for lots of answers. They're looking for answers to the macroeconomic questions. They're looking for answers to help them guide investments. But then teachers and healthcare providers are looking at, what is the potential? How do I take care of my workforce and also take care of those I serve at the same time? What is the pace of adoption?

28:15I'm excited to be here with Bloomberg Philanthropies working on the Mayor's Challenge, which is a competition they run around the world for mayoral innovation, for city services. And so many people in that space saying, where are the opportunities for innovation? And we're seeing such interesting proposals there as well. I just want to say, I actually had a meeting with a giant company. I'm not going to say who it was. We've heard of them. Yeah, everybody's heard of them. But it was like we were talking about, they were asking me about how I'm using AI. I was asking them. And it's like, we're all kind of fumbling our way through.

28:49And we have courses that have come up at Bloomberg to kind of help us figure our way through this company. They're just kind of like somebody figures something out and they do a kind of a show and tell. But it's interesting how we're trying to find our way through this. Yes. I've heard two CEOs at the Frontier Labs really say the pace of scientific progress on the AI side is much faster than the pace of implementation and adoption. It's hard. These are large institutions with lots of people. You have to actually figure out what is the right way for your company, for your school, for your business.

29:18And that takes some time. You know, I use ChatGPT all the time personally. I use it at work too. We have the paid version at work, but I have the free version on my phone. And when it tells me I can't use it anymore, I just go over and use Claude. How do you prevent that? Like, how do you get me to pay for it? Like, how do you monetize all the free users when so much compute is being used? Yeah, I think, you know, same with any product in a certain way, you want yours to be the go-to. You want yours to be the most useful, the one that you turn to to solve the problems that are most important to you.

29:47And I think the companies are competing in that and we'll see fits and starts. But you do, you get accustomed to one product or another. Will we be paying for it? Well, I mean, or is there going to be advertising? So I think, you know, right now you can pay for different levels of access. I think that is meaningful, both for individuals and for businesses. I use the paid accounts across all of the different companies, which may seem crazy, but I want to see where the capability really is. So I do think that is the monetization that you're seeing primarily. And I'm not a tax professional, but that's a business expense, I would imagine.

30:21So talk to your accountant. Yes. Take your notes. I do think, though, about the intersection of technology and politics. And I feel like every decision is made with a careful glance at the White House. So talk to me about that and how that might, I don't know, kind of impact the deals that are done and how they're done. Yes, absolutely. I think you see a lot of that in the infrastructure space. So if you look at the models, they, as we talked about, require compute, but compute also requires energy. And as we look at competition between the United States and China, I think people feel really good about our talent.

30:59They feel really good about our workforce. They feel really good about our innovation. But we do need to get more energy on the grid, and we need to do that fast. And so I think you see this all-of-the-above approach, but also disagreement over what is that all-of-the-above approach? How does it work? Do things need to be grid connected or not? And most importantly, how do we make sure that consumers have the electricity they need at the prices they need while we power all of this AI? Well, is it ultimately going to be everybody, especially the hyperscalers, probably doing their own energy development on site, that kind of thing?

31:30I think you'll see a mix. Just like you see a mix in the financial deals, I think you'll see a mix both to hedge risk, but also because it'll be opportunistic. We need the energy as fast as we can get it. Hey, just want to end with what this does to the American workforce, the global workforce. Dario Amadei over at Anthropic has been really outspoken about how this could just decimate white collar jobs. You agree? So I think there was a conference in San Francisco that people are watching just last week about what the different scenarios are. I think we don't know the answers yet. And so from a policy perspective, we need to be planning for multiple scenarios.

32:03It's critically important that we understand both the data of how are jobs moving, where the transitions happening, and also look at the social safety nets and other things to make sure that if there is dislocation, we're doing the reskilling, we're doing the training to get people into a place that is productive. You've seen the tech up close, you know what it can do, what keeps you up at night? What keeps me up at night is, you know, as always, it's the humans, it's our human potential, it's our ability to step into this technology, and it's also what we can do with it for good or for ill. And I think that that's the space where I'd like to see the policy focused.

32:36Are you worried about the bad side of AI? I'm worried about humans using AI for bad purposes is what I worry about more than the doomers who are more concerned about what we would call alignment issues. I think the science on alignment is pretty strong and will continue to be strong and people will be alarmed if it's not. But the question of what can you do with the technology is a hard one. We are about to all get more powerful. That was Lane Dilg, former head of Strategic Partnerships, Global Affairs at OpenAI. Again, we were broadcasting live this past week from the Bloomberg Philanthropies Global Forum at the Plaza Hotel.

33:11The event took place alongside the United Nations General Assembly in New York, and it brought together heads of state, business leaders, and more to address the world's most urgent challenges and opportunities. There were a lot of leaders there. We heard from Bill Gates, Ruth Porat of Alphabet, Jane Goodall was there, NBA Commissioner Adam Silver, Brookfield's Bruce Flatt, and many more. Check out all of the interviews from the Bloomberg Philanthropies Global Forum on the Bloomberg Terminal or at Bloomberg.com. Still ahead on Bloomberg Businessweek, the European build-out that investors are eyeing when it comes to sustainable economic development.

33:44And how to get those countries to come together to make it all happen. We do that with the lending arm of the European Union, as well as the European Commissioner for International Partnerships. This is Bloomberg. This is the Bloomberg Businessweek Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say, Alexa, play Bloomberg 1130. This past week, Bloomberg Philanthropies Global Forum took place alongside the U.N. General Assembly in New York and alongside Climate Week NYC.

34:24Now, the event brings together heads of state and business leaders to address the world's most urgent challenges and opportunities. Among those challenges and opportunities is global sustainable economic development. And that's where Josef Sekala comes in. He's European Commissioner for International Partnerships. It's kind of exactly what it sounds like. He's charged with working with countries all over the world to partner on everything from infrastructure, finance, decarbonization, sustainable development, and more. Welcome. Thanks for joining us today. Thank you very much for the invitation.

34:52So your remit is big. It's global. How do you see this in the context of America first and the world, in some cases, turning more inward? Well, my experience is slightly different. I don't believe in zero-sum games. I'm a former banker, and my experience is that all the business, which is not to a benefit of all involved parties, does not have a usually long life. And basically, I think Europe is the best proof because being built from scratch after the Second World War the cooperation, the solidarity was basically one of the foundation of the success on the way to lifestyle superpower in average high salaries high living standards this is not a coincidence that from 30 most developed countries based on the human Development Index, 20 are European ones.

35:53And this is basically also the narrative we want to promote. Partnership of equals, mutual benefit, strategic alliances which should help to create jobs, to create supply chains, to open the access to the world markets to less developed countries because this is about value creation, but this is also about the fair access to critical raw materials, to more global security, to resilience. Commissioner Sekela, I am curious, who is it easier to partner with, China today or the United States? Well, I don't see, for example, Russia as an economic competitor or rival because what they can offer is just bribes, weapons, propaganda and lies.

36:48in that they are good. China is basically plundering the partner countries. They are not investing in the future of the countries. They are interested to control the supply chain of the raw materials and to weaponize it. And this is not the way we want to go. And I had a very productive meetings here with you as representatives and also with the advisor to President Trump on Africa. And this is not about the U.S. against Europe. This is about collaboration of guardians of democracy in order to ensure fair supply chains and about basically access to the critical raw materials in order to not allow the authoritarian regimes to weaponize it.

37:53Your view on China really got my attention, how you described it. Do countries that China has partnered with in the past, and I'm thinking of the historic Belt and Road Initiative from the last decade and a half or so, Do they share your view? Do they feel like China plundered them? Subsequently, I think the attention to the difference between promises and deliveries is increasing in the countries. And since I took over the responsibility for Global Gateway, the European sustainable investment initiative, But if I'm traveling, I'm traveling a lot. And to New York, I arrived from Pacific and from Africa, from Namibia.

38:42And sometimes I'm calling it belt and ring trap. Because our attitude is to empower, not to impose, not to entrap. And there are simply examples. And Namibia is the best example where Europe is investing in education. in supply chains, in the economy of the future, in hydrogen production, in decarbonized direct reduced iron, which can be then used for a clean production of high-quality steel, for example, in Europe. When you take into account the structure of the trade between Europe and Namibia, is very much diverse and that there is a balance positive in favor of Namibia. What is China doing?

39:35China is investing the road to the mines and buying purely unprocessed raw materials and shipping them and sending them to China. Meanwhile, is China controlling 70 % of the raw materials? And we have in Europe very negative experience with dependencies. And the bill for basically get rid of the dependence on the Russian fossil fuels was extremely high and extremely painful. But we learned what does it mean if your rival is weaponizing the supplies of the fossil fuels or critical raw materials against you. Our thanks to Yosef Sekela, European Commissioner for International Partnerships. Now, along with the U.N.

40:23General Assembly this past week, as we said, it was also Climate Week NYC, and Mother Earth was a big topic for President Trump during his U.N. speech, calling climate change, quote, the greatest con job ever perpetrated on the world, while also criticizing renewable energy and praising coal. The president also warning U.N. member countries, saying, quote, if you don't get away from this green scam, your country is going to fail. That could spell a major blow to global climate change initiatives. Our next guest is still hoping to deliver over 1 trillion euros in green investment by 2030 in his role.

40:58Amboise Fayot is vice president of the European Investment Bank. It's the lending arm of the European Union. One of the big projects of the European Union is climate neutrality by 2050. Right. And we have put in place to support this objective, a policy that is our climate strategy. that has a few targets, including having more than 50 % of what we do in climate and environment. This is a target that we have reached. We are actually closer to 60%. We are lending around 100 billion euros per year. So it's a big thing for us in terms of financing for renewable energy projects, energy efficiency, clean transportation, innovation in climate.

41:47And our goal is to continue and stay the course because we think this is also something that is good for maintaining competitiveness in Europe. And we are going to present to our board our climate strategy for the next five years that will basically continue the pace that we have chosen since five years. and link that to the competitiveness of the European Union. So even with a narrative in some parts of the world that are maybe pushing back against climate change and green initiatives, sustainable initiatives, nothing's changed for you guys? No, for us nothing changes in terms of the path and the objective.

42:31What we try also to do is to listen to what our stakeholders tell us. And for example, some of the SMEs tell us that the reporting obligations are very, very complicated. So these kind of things that we are going to try also to address in our strategy. But the key objectives, we are going to keep them. Can you expand on the idea of competitive advantage a little more? Because here in the United States, as the president, he said, if you don't get away from this green scam, your country is going to fail. He essentially thinks that it's a waste of money to actually invest in green initiatives or do sustainable development.

43:04That's my takeaway. way. What's the competitive advantage that you believe the European Union has if it invests in this way? I would say there are two things. And when you look at energy, we have invested 31 billion euros in 24 energy projects. 31 billion euros is a lot of money in offshore wind farms, in grids, in a lot of also solar and nuclear, and then the number of projects that are related to energy. The things that we see is one that actually the competitiveness of the cost of energy is going down for many of these renewable energies and it's becoming competitive. And the second thing is when you look at energy you also need to look at your independence.

43:56And what we have learned since 22, and that's why we have sped up, actually, the implementation of our energy projects, is that if you want to be independent from Russia, you need to have more and more energy independence. Energy independence for a continent that has little energy itself means renewable energy and other kinds of energies. How are you thinking about, and I know the war, of course, between Russia and Ukraine is not over still, but thinking about what might need to be done in terms of helping Ukraine going forward. the financing demands and needs that will be to build back all that's been destroyed?

44:33Yeah, well, actually, it is absolutely clear that the needs are huge in Ukraine. And from the beginning of the war, we have been supporting Ukraine. actually even the week after the war we have redone some of our loans to be able to send some financing to the Ukraine government. Since the beginning of the war we have financed 4 billion euros of projects in Ukraine and that is mostly in projects that have reconstruction construction of hospital, working with municipalities, train capabilities. And actually, we have just opened a new line in Ukraine where the tracks of the trains will be the same as in Europe.

45:31It wasn't the case before. You had between Ukraine and Slovakia, in this case, you had to change trains at the border. Now you don't have any more. So as you rebuild, you do it more smartly. And this is also on the way for accession of Ukraine to the European Union. And we have done something that is not necessarily consistent with our climate strategy, but that we have done for Ukraine. We have just approved a loan that is going to allow Ukraine to finance its gas storage for the winter. Because, you know, that's an emergency. You're here meeting with leaders from all over the world. If there's a message that you have for American leaders and what you want from American leaders right now, what is it?

46:11The thing that I like here is to be able to meet with a lot of people from very various backgrounds and originals and cultures. And that's what makes this meeting so interesting. I mean, the transatlantic relationship is so important that we need to do everything to make us as good partners as possible. That was Amboise Fayo, Vice President of the European Investment Bank. And that wraps up our first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Coming up in the next 60 minutes, more voices among the European leadership, including the Prime Minister of Spain, in conversation with Bloomberg News Editor-in-Chief John Micklethwaite.

46:52Plus, a former climate high-level champion on how COP will work in the face of American climate hostility. As our coverage of the Bloomberg Philanthropies Global Forum continues. This is Bloomberg Business Week. I'm Carol Masser. And I'm Tim Stenevec. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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51:18include a former U.N. climate high-level champion on mobilizing stronger and more ambitious climate actions amid a U.S. pullback. Plus, how Canada is tackling the challenges and opportunities in sustainable economic development. First up this hour, as you know, more than 140 world leaders and senior officials and delegations were in town this past week for the United Nations General Assembly. Among them was Pedro Sanchez, the Prime Minister of Spain. He sat down for a conversation with Bloomberg News editor-in-chief John Micklethwaite. And their conversation touched on everything from Donald Trump, Spain's housing crisis, and yes, his re-election efforts.

51:56Prime Minister of Spain, thank you for talking to Bloomberg. It's a pleasure to have you. It's a pleasure. I just looked, out of all Europe's leaders, you are the one who seems most prepared to disagree with President Trump. You champion the cause of recognizing Palestine. You pushed against the 5 % limit on defense spending. You've also been very close to China. I mean, when you heard his speech yesterday, which seemed to depict Europe as a kind of hell hole, did you think that was aimed at you? Well, I think I'm respectfully disagree with President Trump's statement because, you know, He took migration and climate change as, I would say, the major challenges that we have to fight against for.

52:46And I said, well, look, if you took the experience of Spain, it's the contrary. So thanks to these green policies, we have dropped the electricity prices since 2017 till now by 50%. So that enables us to gain competitiveness. and thanks to that we are witnessing this extraordinary outcome of of the economic growth in Spain we represent 30 % of the total economic growth of the European Union and when it comes to migration in the last seven years we have received two million migration migrants while at the same time we have dropped by 40 % the unemployment rate so only not what I'm trying to say is that green transition and migration when it comes on regular basis are positive for the economic development of a country.

53:42Do you think do you think your fellow leaders in Europe could be braver about making those comments? I think I think that we that we need to keep transatlantic bond and to strengthen that transatlantic bond. It is indeed true that we need to combine it with other policies such as for instance trade diversification that is why we are we've been very vocal in reaching this agreement between the European Union and Mercosur which it would be definitely a game changer in in our economic ties with other regions of the world and second what we do what we need to do within the European Union is to do our homework as the former central banker Mario Draghi always remind us.

54:28And that means that we need to deepen single market, that we need to review our competition policy in order to scale up big companies in Europe and try to be as good, as competitive, as global corporations are in the US and other parts of the world. It's very interesting, though. You look at what's happened. Your economy has grown very well, 2.7%. You look at what's happening in other countries on the periphery like Greece. There is a very interesting thing a few years ago we were used to saying the periphery is the problem and the core is great. Now it's the other way around France Germany Britain barely growing at all.

55:08Do you think it is now the center of Europe that is the problem in the economy. No not at all. I mean Germany is a big country big economy also France and we always expect a positive let's say dynamic in their economies But it is indeed true that from the south we can contribute to the economic growth of the European Union. So, for instance, when you see that 60 % of the electricity generation in Spain comes from renewable sources, that means that we have a potentiality that we can contribute to the strategic autonomy. You have problems exporting that, don't you, to France? Yeah, well, okay, we need to interconnect better our grids.

55:56But we are trying to convince our friends in France to do so. So all in all, what I'm trying to say is that if you see the economic figures of the South and Europe, especially Spain, that represent, and I said before, 30 % of the total economic outcome of the European Union, That means that we have achieved many reforms that were demanded by the European Commission over the last years. So we have achieved to reform our labour market, our pension system, our educational system, and also our energy policy and digitalisation, along with the contribution of migration. So it is true that these pillars also show that the economic background or pillars of Spain are quite solid if you compare it to previous periods such as the one before the financial crisis.

56:54I'll ask you a selfish question from the point of view of all the foreign investors looking at this. Many people want to invest in Spain for all the reasons you said, but you want to introduce 100 % tax on them if they want to buy a house there, a second home. No, not at all. What we need to face is a real challenge that I think across Europe and also in England, in the UK, you're suffering, especially the youth, but not only youth, which is the lack of or the impossibility to access to a house or to emancipate in the case of our youth. What we did is for all British people or European people that want to buy a house for living, they won't pay taxes.

57:40But this is the point. We need also to understand that we need to solve the problem of housing that we have in Spain. But all in all, if you see now the figures of the real estate sector and how we are speeding the process of construction in Spain is quite amazing. Nowadays, we have increased by 63 % construction of, let's say, public housing, whilst the private sector has increased like 13 % during the last year. I'll ask you a bit about the relationship between the economy and politics. The economy seems to be going very well for you. In politics, it's harder. Your party is behind the Parti du Popolaire.

58:28You also got Vox coming up, this much more right-wing outfit. And in the current polls, you would lose at the election. What do you think the problem is? You've got a good economy, unlike most other European prime ministers, and yet you're still behind. Polls are polls. I mean, of course, you have to look into it. You have to see. What I am defending is that, unfortunately, we are seeing not only in Spain but across Europe, a political collapse of the centre-right traditional parties, which, by the way, it started after the financial crisis, with the failure of governments with all this rhetoric of austerity, banking and the financial rescue that we have to pay with taxes all around Europe.

59:20And what you see now from the central right is that they are copying not only the way of doing politics of our right, but also the contents. So you see now that they are like identifying migration with insecurity, which is fake. It is not true. And by the way, as I said before, when you see the figures in Spain, you can see that we have the contribution of migration, but at the same time, we're reducing unemployment rates in Spain. And there are sectors such as construction, agro industry or social services or tourism which in Spain are quite important where up to 20-30 % of the total workers comes from different countries and not Spain.

1:00:09So what we need to do is to face that we need migration but for that migration what we need to open is a path of regular migration and this is what we are doing with many countries in Latin America also with the US administration with the previous administration, we reached a very interesting programme in order to have this circular migration coming from the US and, of course, some countries in North Africa. But, all in all, the contribution of migration to the economic growth in Spain is quite positive. Sounds as if you're bridling for that fight. So you will definitely lead the socialists in 2027 into the election?

1:00:53Yeah, I will do it for sure. This is something that I have already spoken with my family and with my party. And if they allow me, I'm confident that we can repeat a majority to keep the work ahead. But let me add, coming back to migration, that the dilemma that all Western societies we're facing is whether we open up and grow or we close off and shrink. This is the real dilemma that we need to face. So the challenge that we have within the European society is how do we integrate this migration. Do you think it's easier in Spain because you get a lot of people from Latin America where everyone speaks the same language?

1:01:38That's at least part of the argument why you might have been better. So when you listen to some centre-right parties and the far right, they are saying, We need to expel all these migrants coming to our... Okay, so what do we do with demographics? Because either you have, how do you say, family policies, plus migration, but they don't propose anything in these two policies. No migrants and less welfare state and therefore less family policies. and that means social services, healthcare, social security and so on and so forth. So what I'm trying to say is that if we don't have this contribution of migration, what we will face in the coming years in Europe is that we have an stagnation.

1:02:37We won't have the capacity to grow and therefore there will be more cuts in our welfare state. So this is something that we need to explain to our citizens that if we articulate a positive migration policy, that would be for the good of the Europeans and the Western societies. So just to give you a figure, 94 % of the total migrants that are living nowadays in Spain came from regular, let's say, systems, and they came on legal basis. So we're talking about only 6%. And this is the reality. So I think that we need to fight and to give a positive, let's say, message about the contribution of migration to our societies and to our prosperity.

1:03:33That was Pedro Sanchez, Prime Minister of Spain, with Bloomberg News Editor-in-Chief John Micklethwaite. You're listening to Bloomberg Business Week. Coming up, more on global efforts to stem climate change with someone who has been a key player when it comes to United Nations climate efforts. This is Bloomberg. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say, Alexa, play Bloomberg 1130. Another UN official stated in 1989 that within a decade, entire nations could be wiped off the map by global warming.

1:04:17Not happening. You know, it used to be global cooling. Now they could just call it climate change because that way they can't miss. It's the greatest con job ever perpetrated on the world, in my opinion. If you don't get away from this green scam, your country is going to fail. That was President Trump and his address to the United Nations this past week. As we mentioned earlier, the president was very critical of climate change. Now, keep in mind, not all global leaders in town felt that way. We talked to a lot of them, as many attended more than a thousand events about actions and investments in renewable sources of energy and ways to tackle the climate crisis.

1:04:52One of those was Mahmoud Mohilddin. He's UN climate change high level champion for COP27. That was held back in 2022. He's also former World Bank senior vice president and former minister of investment of Egypt. Mahmoud joined us from the Bloomberg Philanthropies Global Forum. Well, I see it around the world, especially in many of the emerging markets, countries of the global south in Europe and Latin America. It's moving, progressing, despite the political statements and political hurdles, because it's becoming today more affordable comparing what you can produce of electricity from renewables compared to fossil fuel.

1:05:34So it makes sense just to compare the cost. So people are progressing towards decarbonization and investing in renewables because it's much more affordable and cost effective. So the market is making this decision for countries. Absolutely. And a few weeks back, what gives us hope based on some interesting big read article from the Financial Times that what gives us hope is technology, technology, innovation, what we were producing at multiple of costs 10 years ago, each time we try to cite a figure, we get corrected because of the lowering of cost when it comes to electricity. I wouldn't dare say that about the cost of adaptation.

1:06:17So as you know, climate change had those two wings, the mitigation part or investing in decarbonization renewables that's becoming more affordable. But when it comes to adapting countries, societies and economies to the climate change and its risk. Here we need to mobilize more public finance because the cost return is not really as straightforward when it comes to commercial market basis compared to decarbonization. Mahmoud, one thing I want to ask you. So there was President Trump, an hour addressed to the UN General Assembly out there. I was there. You were there. And some very strong words when it came to climate change.

1:06:55I'm curious when you have conversations with members of the administration, Are they as opposed in terms of U.S. strategy, what they talk about U.S. strategy being opposed or not supportive of policies to stem climate change? Members of the U.S. administration follow their leader and their president. I was curious if backdoor conversations. But we see as well some practical, pragmatic statements, like a recent statement that came out comparing investing in renewables in the form of solar versus wind farms. So there was a kind of a statement that tells us, well, you can invest better in solar. And then there is a great deal of investments as well in innovation when it comes to battery storage and all of that.

1:07:42So we see some opportunistic approaches and more pragmatic approaches, but not really to oppose the strong statements coming from their boss. Can I ask you, in terms of COP this year, I'm just curious how COP will work this year in such an active kind of climate hostility that we see from the United States. Well, is that a problem not having? maybe? Of course it is. For the biggest economy in the world with the great deal of dynamism, inventions, innovation that could really help not just the United States but the rest of the world we are missing a lot. But having said that, two things. Finance for Development Conference in Seville that took place a few weeks ago was fantastic, it was successful, it delivered, it was all the world minus one.

1:08:27So that gives hope. The second thing, the preparation for COP30 when I was in Rio and their climate action week. Great deal of dynamics, participation, not just at the leader's level, but community, private sector, civil society. So it is happening. So again, the world minus one. You've spent a lot of time thinking about emerging and developing economies. And here in the US, with the dismantling of USAID, with the pullback in foreign aid, this narrative has seemed to emerge, which is basically like, why should we be sending money to countries outside of the United States when there are people here in the U.S.

1:09:06that need that money? What would you say to that? Well, there is an evolution of thinking. At the beginning of the start of the aid, there was the issue of consideration of others and there is some sort of altruistic behavior that we need to help the rest of the world, the countries, the rich economies. And there were some elements as well of compensation, especially from the colonial powers that, well, we exploited the resources of these poor countries, so let's help them. And then it came as well, issues related, let's do the help because we will benefit more, even if a kind of self-interest will like stability, will like bigger markets, will like people to follow the same kind of standards, and we need to eliminate forced migration.

1:09:51So there was a kind of mix of ideas between positive and negative. But then we are in a new world now. And I think it's very much the end of official development assistance as we know it. You do? Yes, of course. Not just from USID and its disappearance suddenly, but actually from other sources as well. So what does the world look like, particularly the developing world in this new era? It depends really where you are addressing the issue. There are many countries, including my brothers. I'm an African. I'm an Egyptian. My brothers from South Sudan, for instance, or Burundi, they are more dependent on external help and support when it comes to their budgets.

1:10:32Other countries would use aid as a kind of catalytic help to help in bringing the private sector elements of innovation, blended finance, so they will survive without aid. But other countries that are more dependent, especially in humanitarian work, human development, they need really to get new sources, including from philanthropies. Would you argue that there is a soft power element still to this as well, that there is a benefit for, and look, I think this was an example used in a New York Times article months ago. Yeah, I've seen that one. Like, you know, a bag of rice shows up. It has an American flag on it.

1:11:09Yeah. Somebody in some far-flung place sees that and says, I have a different view of America and an American as a result of this. It helped promoting American values, American culture. positive to the United States in this case. But you can really see aid in different ways as well. From the recipient countries, if aid is basically prioritizing what the nationals and the communities are pushing for and hoping for, this is a good thing. If it is a catalyst for transformation, it's a great thing. But if it is crowding out public finance, if it is crowding out private sector, then you have other considerations.

1:11:46So there could be some sort of blessings in disguise when we are addressing these kinds of changes. China has been in the past certainly very aggressive when it comes to providing funding, especially for the developing world. And I just do wonder, in an absence of other developed nations helping out the developing world, does China step up its efforts? And is that a problem? Yes, like the old rules of nature and physics. When there is a gap, there will be a vacuum. We'll find somebody trying to help you. We see the role of China's rising, The role of many of the middle powers is rising. The role of regional powers is rising as well.

1:12:23And the role of foundations, philanthropies, not just the big names that we are familiar with, but some of the smaller ones coming from the regions. And this comes associated with benefits, including soft power, the issue that you mentioned. Or you cannot really draw a line now between what's aid and what's promotion for investment or promotion for exports. So there will be some serious spillovers given this kind of sudden cut. Is the money getting to the emerging world that needs it in terms of certainly when it comes to climate initiatives where they are so vulnerable? No, no, no. The development finance system and the climate finance system, I described it before we were preparing for COP27 and after that has been insufficient because there is a widening gap.

1:13:14inefficient because it takes forever until you mobilize funds and unfair because of cost. And we still suffer from the same problems now. Well, perhaps better public-private partnerships with the support of philanthropies, we can mobilize funds in a better way. That was Mahmoud Mohildin, UN climate change high-level champion for COP27. That was back in 2022. You know, I think what was interesting, Tim, as we did these conversations with global leaders, And, you know, we talk about climate so much on Bloomberg Businessweek Daily. But I think what was fascinating is that global leaders, they're moving ahead with their initiatives.

1:13:50I felt like we heard that very much from the European contingencies. But I also know in having some offline conversations with companies that they, too, are not thinking necessarily in presidential terms when it comes to strategy and policies and about their impact on the climate. And so they're thinking much more longer term. So interesting to hear that the spend and the activity is still moving on. And a lot of it has to do with, I feel like another message this past week was the idea that renewables, they make sense now, right, in terms of financially what they cost or how to go about them.

1:14:24We heard that over and over again, and that was pretty surprising to me because, as I understand it, the investment in these renewables in the beginning can be pretty high. But some of the European leaders, Carol, told us that, hey, this is actually the market taking care of itself here. These energy sources, for us at least, are on par or cheaper than what we used to get. So this is the way we are moving forward. The question that I have for the United States is, are we going to be left behind if the vision at the top changes? Let's say the next administration wants to invest in net zero or wants to invest in renewables.

1:15:01renewables? Are we going to be left behind? Certainly, the idea of nuclear is something that President Trump has talked about a lot. But up till now, Carol, we know that these projects take a very, very long time, very expensive up front. And the US has not built very many new reactors in the last few years. Right. And we're going to find out how important it is to have the government support with its regulatory business initiatives so that the private sector can go about and developing all of this. It brings to mind, there was an incredible story on the Bloomberg this past week, an exclusive, and it talked about venture capitalists from Western firms are starting to say out loud what they've suspected for a while, and that is China's dominance has left key sectors in the West uninvestable.

1:15:47And they visited factories, they spoke with startup investors in China. And what's interesting is the VCs plan to avoid allocating funds to Western startups that cannot compete with Chinese peers, with some already halting investments in Western battery cell manufacturers and looking to collaborate with Chinese firms. But I think about things like solar panels and renewables, where China has been spending EVs, right, big time, and many would say are definitely ahead of the US here. Yeah, don't forget, the reality is China is the world's largest source of carbon emissions. But But at the same time, it's also the strongest motor guiding the planet to a low carbon future.

1:16:27So the relationship that the United States has with China right now, the fact that we need certain materials or certain things in order to have renewables in the world come from China. So, yeah, this is a great story on the Bloomberg Terminal written by Alistair Marsh. Do check it out if you have the time. Deal ahead on Bloomberg Businessweek, the CEO of Canada's bilateral development financial institution, as our coverage from this week's Bloomberg Philanthropies Global Forum continues. This is Bloomberg.

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1:20:41You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Carol Masser along with Tim Stenevek. We're here at Bloomberg Philanthropies Global Forum. We're going to continue with some great conversations from this event. Yeah, the event brings together heads of state business leaders to address the world's most urgent challenges and opportunities. Among those challenges and opportunities is sustainable economic development. And that's where Lori Kerr comes in.

1:21:13She's the chief executive officer of FinDev Canada. It's Canada's bilateral development finance institution. She joins us on set here at the Plaza Hotel. How are you? I'm great. It's really great to be here. Thanks so much for having me. It's good to have you here. I feel like our conversation this year would be a lot different than our conversation last year if we were to have that. We're going to get to that in a minute. you invest in Africa, Latin America, the Caribbean, in a world that many would argue is turning inward. How do you convince Canadians that what you're doing is in their best interest?

1:21:41Well, I mean, if I quote some of the recent speakings of our own prime minister, he certainly recognizes that when developing countries prosper, Canada prospers as well. It's a time to really lean into global partnerships to build resilience and global economic growth. Um, how do you prioritize how to do that? Because I'm sure there's a lot of folks saying, we need help. Absolutely. And quite honestly, like the demand is limitless for what FinDev Canada offers and other bilateral development finance institutions. So how we approach our financing and investment decisions is, of course, we have to have commercial sustainability.

1:22:18That's what we're going to. We want to have vibrant markets. And we also look through three impact lenses. We have three impact lenses through which we work that informs all of our financing and investment decisions. climate and nature action, gender equality, and local market development. Has to check on all of those in order for it to happen or no? Not all of them because different types of investments and financing opportunities will address one or more of them. We obviously look to try and have positive contribution across each of those, but not everything ticks every box, so to speak. I feel like in this administration, in the environment that we're in in the United States, those boxes would not exist under this current administration.

1:22:59How do you think about that? Well, again, it's a real wonderful opportunity for Canada to show global leadership. And again, when developing countries prosper, Canada prospers and the world prospers. So it's an opportunity for us to continue with looking at having impact in the markets that we serve. So with the U.S. pulling back on foreign aid, with the U.S. dismantling USAID, which certainly is controversial here in this country, as I'm sure you're aware, Does it mean more of an opportunity for Canada? Or net-net, does it hurt Canada and does it hurt the world in the long run? Well, I think certainly there's a lot of hugely, hugely negative impacts from a huge amount of the aid bathtub sort of a plug being pulled, so to speak.

1:23:41But we have to look at that as an opportunity, right? As I mentioned when we just started, that demand for development finance is steep, but now it's really infinite. because the U.S. has traditionally played such a very big role in development aid and in development finance. So in a way, it's a tremendous opportunity for countries like Canada and like-minded countries to lean in. Laura, I'm always interested in the specifics of things. So talk to us about some things where there have been investments made and what's the outcome. Yeah, absolutely. So let me give you one example. So we were established in 2018, so we're the youngest bilateral development finance institution.

1:24:17And one of our very first investments is in a company called Climate Investor One. And they're supporting energy transition across Africa, across Asia, and across Latin America. So in 2018, we made a$20 million equity investment. And now they've been able to raise$800 million. 80 % of that is dispersed across 16 renewable energy projects. Six of them are already in operation. So that's renewable energy on grids. That's diversification of energy matrices. That's supporting local economic growth. So really having a positive impact. So they've been a really great example of how using public resources through development finance can really mobilize private capital and show that commercial viability and positive impact on climate can go hand in hand.

1:25:02We have been speaking about the potential economic effects of a pullback in aid by the United States and other countries filling that gap. But as we just heard just moments ago, we were speaking with Mahmoud Mohildan, who basically said the era of developing countries being helped by other countries is over, in his view. Do you agree with him? Interesting. So what I would say, it's definitely a repositioning, right? I think we've, for the last 15, 20 years, it's been an era. And the era is changing for sure. So there's disruption in this system. Again, I do think that there are many countries that are still looking to play their part, believe that there is a role, like Canada believes there is a role for Canada to play in development.

1:25:49So it's a reordering, it's a reawakening, and it's much more about partnership, I think, going forward. Do you think about it from an immigration perspective at all? The idea that if you are able to improve conditions in other countries, the people who live in those countries will not feel forced migration? Absolutely. I think Canada is differently situated than many of our European friends and partners in terms of the immigration issue. But certainly, one of the value added of supporting local market growth and local market development through the private sector is providing jobs. When you provide jobs, you provide incomes.

1:26:25When you provide incomes, you have a growing middle class. When you have a growing middle class, you actually provide export opportunities for countries like Canada. When you provide good jobs, people are happy to stay at home and work and thrive in those local economies. So it's a reinforcing benefit, let's say, of supporting emerging markets. What's been the biggest impact on your world as a result of what I would say is a conflicted relationship between the U.S. and Canada now? which is kind of amazing to kind of get your head around it. Anybody who's studied trade or history, who'd have thought?

1:26:58But this is where we are a little bit today. But what has been the impact on your world because of it? Yeah, so in the development finance world, again, it's been a huge disruption. I mean, the U.S. has been such an enormous player in development finance, as I said earlier. So we're all having to reposition ourselves. It's providing a lot more opportunity and an impetus really for collaboration amongst the DFI community. So the bilateral DFIs, we're a humble, but we're really a mighty bunch and we really need to be supercharged. We co-finance and we co-invest as sort of as a matter of course. We're, again, a very collegial.

1:27:31Well, who else is stepping up with you and you feel like really kind of, all right, so if the U.S. isn't going to be so active in it, what other, you know, country or so on and so forth that are working more closely with you? Yeah, so we work a lot with, so the bilaterals. So, for example, with Pro Parco in France, with British International Invest in the UK, with FMO in the Netherlands, with DEG in Germany. So, I mean, there's a number of the European development finance institutions that we work with. We also do co-finance with the IFC. And, in fact, just this week, we're really happy to be closing on$125 million worth of transactions to two banks in Central America.

1:28:10Banco Industrial in Guatemala. So we're providing a$75 million loan. Guatemala is one of the most climate-vulnerable countries in Central America. Use of proceeds entirely for climate finance. So climate-smart agriculture and green buildings. And then the other transaction is$50 million to Bengal del País in Honduras. And that's one of the poorest countries in Central America. There, we're also supporting climate finance, renewable energy, water and sanitation, as well as small and medium-sized enterprises, micro and small and medium-sized enterprises, It's in women-owned and women-led micro and small.

1:28:43Because, I mean, I always think about all the micro-lending and so on. You do it for women, right? And the impact that it has on a family in particular. How do you make sure that the money is used efficiently? And, you know, there were so many stories, at least with U.S. money that went out, where you'd find that, okay, well, grants that went to certain organizations weren't necessarily used in the most efficient way or even used for what they were supposed to be used for. How do you make sure that there's not sort of a... Fraud? Yeah, I didn't want to say fraud. I just want to say there's somebody who sort of takes more than they're supposed to.

1:29:19Sure. So, I mean, we're in the commercial financing business, right? We provide financing and investment. We have a higher risk appetite than commercial capital. But, you know, again, we want to provide, we want to support commercially viable solutions. Part of the impact framework that we as development finance institutions bring to the fore is sort of the rigor and vigor around the impact and the reporting. So, you know, we do go in and we have the measures and the metrics to actually be on the ground and make sure that we're getting the information back, the data back. We go out and verify that.

1:29:49So, again, it's the depth around measurement, impact, evaluation and reporting that makes us thrive and allows us to actually have impacts in the markets that we serve. Our thanks to Lori Kerr, CEO of FinDev Canada. It's Canada's bilateral development finance institution. Hey, before we wrap up, and I highly recommend you check out a bunch of stories at the Bloomberg and at Bloomberg.com, because our whole team, our global team was in town and reporting out everything that was coming from the UN General Assembly and Climate Week NYC. And one of the stories we wanted to bring to your attention, because when we talk about climate change and the environment, you've got to think about China.

1:30:27It's the world's largest polluter, and it did set a target to cut economy-wide net greenhouse gas emissions by 7 % to 10 % over the next decade. It's a strategy that's seen as too modest to put the nation on a path to net zero and galvanize global climate action. When you look at the big countries, the big polluters, like what they do, it matters. The promised reduction from China's peak levels follows President Xi Jinping's pledge that was back in April to pursue more stringent curbs and to set policies that cover the entire economy, addressing pollutants beyond carbon dioxide. Now, Carol, it follows a tradition of Chinese leaders who've set relatively modest climate targets only to surpass them later.

1:31:10Yeah. And, you know, so it's interesting, right? And we've got to just think about the world and the connections here. I will say the European Union's climate commissioner did say that China's latest goals were met with criticism, calling the level of ambition clearly disappointing and saying it makes reaching the world's climate goals significantly more challenging. Well, I mean, it's a big deal that China's talking about. Well, that's my other big tech takeaway with everything going on in the world. And I kind of compared to last year where we were ahead of a big U.S. election and conversations were different, that climate change was talked about a lot.

1:31:43And that wraps up our weekend edition of Bloomberg Business Week from Bloomberg Radio. Of course, our highlights from this past week's Bloomberg Philanthropies Global Forum. You can catch all the conversations from the event on the Bloomberg and at Bloomberg.com. Thank you so much for joining us. Be sure to tune in to Bloomberg Business Week daily Monday through Friday. It starts at 2 p.m. Wall Street time on Bloomberg TV, Bloomberg Radio and on Sirius XM channel 121. You can also listen to us on Apple CarPlay and Android Auto, free in the Apple App Store or on Google Play. You can also watch our daily broadcast on YouTube.

1:32:13Just search Bloomberg Podcasts. 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 Businessweek Daily Podcast at Bloomberg.com, Apple, or wherever you get your podcasts, and the latest edition of the magazine. It's available on newsstands now at Bloomberg.com and always on the Bloomberg Terminal. I'm Tim Stanovic. And I'm Carol Masser. Have a good and safe weekend. Take care of Mother Earth. This is the Bloomberg Business Week Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts.

1:32:49Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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