SpaceX Joins Battle for Control of $26.5 Trillion AI Market

22:18Carol Massar:and how we made our ability to leverage our natural resources and our manufacturing base. We have to be able to be self-reliant and not be dependent upon China and multiple other places across the world that we could name and wax poetic on. So my clients are the ones that are actually the mines, the processors, and the ones that are compounding. The free market purists out there would say, we have to be reliant, meaning the companies have to be reliant and should not get handouts. What they might see as handouts or support from the government. What would you say to those folks out there who say, hey, we don't want the government doing any sort of funding, picking winners and losers when it comes to any space?

22:56Carol Massar:Yeah, I think it's a terrific point. And being a chief operating officer by trade, I'm not a big fan of the 7A program or picking winners and losers. Specifically, we do not want another Solyndra. However, what the administration is doing now is specifically saying we're not just going to hand out grants. We're going to take equity positions in the companies that we're going to invest a significant amount in. And that's a return to the taxpayer. But is that state capitalism? It is arguably state capitalism. Because it hasn't ended well in other parts of the world. It has certainly not ended well in places where you would consider communism to be the reigning way of the day.

23:30Carol Massar:However, it is a way to backstop no different than the guarantee that is already going to go on to that loan. So the government does not wish to have a controlling stake in these companies. But it does want to ensure that these companies are able to hit the mission. And that is one way of ensuring so. Well, we've seen investments in rare earth companies. We saw support for IBM today and IBM is surging. We've seen support for Intel, for example. Are there any areas of the corporate landscape where you look or industries where you think have not gotten government funding yet or investment from the government that will or should?

24:10Carol Massar:Certainly pharmaceutical precursors. That's going to be an absolute guarantee. So I want to be able to take my Lipitor. I want to be able to take my Metformin. We cannot be reliant upon overseas countries and adversaries in order to do that. Our precursors and our generics are 90 % reliant upon India. Guess where India gets 100 % of its precursors? China. Therefore, we add the math and we are 100 % reliant on China. Back to the Intel deal, though, that was a very special scenario. And I would even argue one that I would not have pushed forward. Why not? I don't think taking those golden shares or that 10 % stake are really going to prop up a company.

24:47Carol Massar:I would have loved to have seen that taken by Texas Instruments or another U.S. company and have it absorbed there. I mean, in hindsight, it's looking like a really good investment right now. It's a good investment for the markets. It's a good investment in making sure that we have jobs and that we're creating the chips. that said how much larger is it going to go and how much longer is it going to go as we continue to advance our data centers and our AI. What about the U.S.'s build-out of raw materials? Are these company stakes actually, is the administration actually making any headway there on like a domestic build-out of raw materials?

25:17Carol Massar:That is the key is that it's actually not raw materials that are the problem. We often talk about the rare earth magnet and the mind of magnet issue. 95 % of what we need, we have at a continuous 48 states. Most people don't know that. and it's not publicized in the press. The problem is the mid-supply chain, the processing. And do we have that? The answer is no. So what's the bottleneck? Why don't we have it? The bottleneck is that we let it go overseas. This is technology that was developed here in the United States 20, 30, 40 years ago. Didn't we let it go overseas because nobody wanted this in their backyard?

25:49Like it's environmentally very, some would argue very dirty, the processing. People just like, there's no better way to explain it. People don't want this close to them.

26:01Carol Massar:No, that's partially it when you go back to recycling. But if you're taking ion exchange, for example, as opposed to solvent extraction, it's not a very dirty process. Consequently, you can take from the mine an MRAC, a mixed rare earth, and then have that through an ion exchange separation turned into an oxidant and metal. It's not that dirty. In fact, it's cleaner than most textiles. But again, going back to this idea of capitalism and money flowing, there is opportunity. some people have come on our program and argued one of the reasons why we sort of let rare slip away is because companies didn't see an opportunity that's the key it was expensive to do it is expensive to do and then it's difficult to make a profit on it it is and that was the big problem we ran into permitting issues we ran into we don't want to do dirty manufacturing but we also wanted to race to the bottom there's a reason why everything from walmart is made overseas Let's just be very blunt.

26:56Carol Massar:Let's just say that we took towels and make that analogy. We let towels go to Bangladesh We let rare earth processing go to China What was your assessment of? The inroads that the white house made with China and Trump's recent visit Did we did we get any kind of insight into potentially? What rare earth? I maybe not, uh, you know rare earths, but just the processing in the u.s You're smiling. Oh, I'm smiling because it's a brilliant question and one and one that that needs to be answered The answer is no, but we will never be cut off by China. We need to be self-reliant. This goes back to what I said quickly earlier, and that is, how did we become a superpower?

27:35Carol Massar:By building upon our natural resources and our manufacturing base during World War II. We have to do that again, and that will also bring interest rates down. It will create jobs. But on China specifically, it's a game. It's a geopolitical game. It was not brought up in depth. We talked about the soybeans. We talked about the meat. But it's a way to ensure that China, from an internal perspective, works on having their presence known in the South China Sea. Do you think in the U.S. it's realistic to think that we can become completely self-reliant when it comes to manufacturing? 100%, when it comes to the critical minerals.

28:10Beyond critical minerals. Absolutely not. You mentioned towels in Bangladesh. We could talk about shoes in Vietnam. We could. We could talk about furniture in, I don't know, probably in Pakistan and India. Yeah. The president wants, and this has been lost in the conversation over the last few months with the war in Iran, but the president, the reason we have a tariff policy as it is, is because the president wants all of this here in the United States. Is that realistic?

28:33Carol Massar:It is not realistic, even though I agree with the president's goal on it. It's not realistic because the supply chain is not present. So I actually was chief operating officer of a textile company, and I reshored things from Pakistan, Bangladesh, China, and India, hence why I made the analogy. There's no base supply chain here outside of cotton. So if I want to bring polyester in from China, using this again as an analogy, I'm going to be subject to a different tariff. But you think that is the choke point and not the cost of labor and the standard of living here? Cost of labor is not the choke point because of automated manufacturing.

29:05I mean, I've spoken to people who've manufactured, worked on supply chains, manufacturing furniture overseas. Yes. And they said it was literally cheaper to pay somebody like cents a day to take one piece of wood and move it to the other hand and hand it to somebody else than it was to install a conveyor belt. Like that is that is the standard of manufacturing overseas.

29:29Carol Massar:Absolutely. When you're looking at and having sat at those tables and watch those workers work, that is the standard. But it is a very limited and short sighted view because it is not nearest to the point of sale. That means that you are stocking inventory or you're out of inventory and therefore you are not making your sales. The best case for those types of industries is to import what is necessary from overseas and then do the final assembly and the final needs here in the U.S. So you're closest to the customer and not being hold on to that cash. Pardon me, holding on to your cash and not losing your cash.

30:02Carol Massar:And is there kind of like an appetite, at least from capital markets, to kind of fund that last mile manufacturing domestically? There was in Trump 45. I'm not seeing that in capital markets right now during 47. We're hyper-focused on what is being pushed out with regards to critical minerals in defense. And that's why it's also the sectors that I work in. what will ensure that we are able to preserve life and limb medicine weapons grid water i'm glad you we went back to medicine because that's that's where i want to end up you talked about support for generics and pharmaceutical companies here here in the u.s what does that look like who could be the recipients of that i mean i've run into situations in the past few years where i couldn't get antibiotics for my kids no that's terrible and it's gosh and we don't want to be in that No, we can't be.

30:52Carol Massar:I mean, right now, we produce practically no generics here in the United States. We do all the R &D here, and then we let it go overseas. What we have to do is incentivize, and the president rightly wrote a very good executive order to start moving this on and make a list of the key precursor chemicals. And there will be incentives, and I will dare say there will be some grants and some other things coming out in the not-too-distant future. What companies could be the recipients of those grants? We need to identify them. That's the issue. So most of them are not publicly traded and that's the key We have not identified the companies.

31:25Carol Massar:It's not going to be johnson and johnson It's not going to be merc. It's not going to be you know, uh, bristol myers squib It's going to be the companies that actually do the chemical compounding So there's a great israeli company out there. That's name is escaping me at the moment But if they were doing more of that in the u.s. That's terrific Maybe teva teva is one indeed. There's a second as well. Terrific call. Thank you but these are mostly these would be u.s companies or the investment needs to go into u.s companies so this is occurring and we are keeping the supply chain here domestically really cool stuff we were supposed to talk more about rare earths but like i got a little carried away emily so i'm sorry but you know when you got trip on the program we know we can go anywhere it's very kind thank you hornick principal at quinn street strategy joining us here in the bloomberg interactive brokers studio stay with us more from bloomberg business week daily coming up after this

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35:31Carol Massar:and consumers need to be aware of when you kind of bring healthcare and artificial intelligence together. And we also spoke with Ed Ludlow about his near perfect sleep score with the Aura ring. That's a flex. Maybe he's Superman. And of course, Aura Health really in the news today because it's filed confidentially for a US IPO. And also making the point that Tom Haley, the CEO of Aura, has said this is a play on longevity and wellness. No question that those you things are really having a moment right now. It's something that Dr. Donish Nagda knows all too well. He's the CEO and co-founder of Resilient Health that offers direct primary and specialty care for employers and their employees.

36:09Good to have you on the program this afternoon, doctor. I want you to explain how people access Resilient Health because you're essentially served two different markets, right? You need to get the employer to sign on and you need to get the company to start using the benefit. And then their employees can start using the benefit. How does it work?

36:28Carol Massar:Well, one of the biggest things that we've seen recently is that employers are really struggling with their employees getting access. I mean, that's why you're seeing the rise of these other tools because people are just opting out of the healthcare system. And the problem with that is that if you keep opting out of the healthcare system, when you actually get sick, you don't know where to go. You don't have an existing relationship. So what the employers are doing is they're offering these really high quality benefits for their employees. And what the data shows, and it's very well established, but even our own internal data shows that when you spend a dollar on primary care, you can save three to five dollars in the same year.

37:03Carol Massar:Wow. What is the obstacle to the access to health care? Is it financial? Is it a convenience thing, a difficulty? I mean, we all have tried to get a primary care appointment. It takes three to six months. There's no availability. You literally have to know someone. You have to know somebody. And to have to phone a friend just to get access to a primary care doctor. Yeah, okay. I thought that was just a New York City problem, but I guess it's not. But isn't that - It's way worse in other parts. But that's a problem. In St. Louis, it takes six months. But isn't that a problem with primary care because primary care doesn't really do procedures and therefore they're not paid the way that other doctors are paid.

37:42So there's a problem attracting primary care doctors Or in the case of like so many doctors who I've had, even our pediatrician, they're going concierge. So literally tens of thousands of dollars to actually go and see a doctor because it is so much more lucrative. And there is that opportunity there. How do you attract primary care doctors when the system, I think many people would argue, is so broken?

38:06Carol Massar:Well, the dirty little secret in health care is that everybody's focused on the boomers, the aging population, Medicare Advantage. and what's happened is when you think about Nana having seven different diseases, the primary care doctors have to spend an hour, two hours with her, but they can't worry about your mental health. They can't worry about your other issues and so they end up spending five minutes with you and so that delay is coming from the fact that we have a mismatch. We have a primary care doctor that's coming in and is completely focused. The first visit was somebody with cancer.

38:34Carol Massar:The second visit was somebody with maybe what seems like nothing, back pain, but that back pain can lead to a$40 ,000, $50 ,000 surgery. So this mismatch of supply and demand is a big issue. And that's where AI is actually playing a great role. So you trained, you went to med school at the University of Pennsylvania. You did your residency in otolaryngology at Wash U in St. Louis. What made you want to sort of leave traditional medicine and start companies? It's actually one of the greatest. There was recently lots of data that came out in the last week or so. a lot of doctors are leaving medicine, making the problem worse.

39:12Carol Massar:Now, I might be part of the problem, but I want to be part of the solution as well, which is it is incredibly challenging right now for a provider or a doctor to deliver care. The reimbursement models are completely breaking. The patients are not getting enough time. There's moral injury associated with it. And so what we want to do is use technology to restore that doctor-patient relationship. And that's really what I built this company around. I mean, I'd already built a company before that was acquired in one public. And so this was, for me, the opportunity to kind of go back and build this.

39:43Carol Massar:And most importantly, I was a caregiver for my dad. And this is the, again, unspoken truth in healthcare in America. Because we're so focused on people with chronic diseases, you, your family members, and others are walking around with undetected diseases that will become those chronic diseases. And if we could get early enough into the cycle of it, we could prevent what happened to my dad and my co-founder's mom, where they literally just missed the diagnosis for decades from happening. And my dad would still be here playing with my kids. And so I think that that's the reality of healthcare in America.

40:16Carol Massar:How does AI find those? Is it AI? How do we find those undetected symptoms? AI is already finding them. Today, 40 million daily queries on ChatGPT for healthcare, 40 million daily. That's way more than the healthcare system today because people are just saying, we're done, we're opting out, we're going to go this other route because we trust them more than we trust doctors. And it's just the way it is. As a doctor, I feel very comfortable saying that. The problem is, one, those systems are not built with a clinical guardrail that are required. Two, when you do need something, they don't know where to send you.

40:53Carol Massar:And so I think the answer is AI plus healthcare together solving the problem. So you could go into, for example, resilience AI native. So you can go in and ask us questions just like you would with chat GPT, but we can escalate it to a provider that you can see you the same day. So it's just the opportunity to be able to get as much information, as much time, and most importantly, as much knowledge that is needed for you to take care of yourself, but not get lost in the rigmarole of the current healthcare system, which is just an absolute mess. Yeah, I actually threw some labs into Claude a little earlier today.

41:27And I know my doctor will look at him and get back to me, but now I know what he's going to say. So I guess if Claude is correct, that's the question. Hey, making sure that the AI is actually trained, because we did cite a study earlier this week that said a good portion of what you get back on chat GPT when it comes to medicine is not actually that accurate. What's the right way to have the guardrails up that actually makes sure you deliver the right information? Just 30 seconds left. Yeah.

41:52Carol Massar:So from our perspective, the most important thing is to know when the confidence of that model is high or low. So if you just think about the way Claude responds to you, it's as if it knows all the answers and that everything it's saying is correct. For us, we actually look at confidence scores of the responses and use that to escalate care in what we call a harness of guardrails to make sure that no patient gets the wrong care at the wrong time. Dr. Dhanesh Nagda, got to come back soon. Appreciate you taking the time and joining us. He's the CEO and the co-founder of Resilient Health. He joins us this afternoon.

42:27This is the Bloomberg Business Week Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts.

42:36Carol Massar:Listen 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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