Snooker loopy

0:00This BBC podcast is supported by ads outside the UK.

0:30and that discussing wines should be fun, not intimidating. Discover Vara at varawines.com. From New Mexico's high desert, Vara Winery and Distillery creates sparkling wines that have earned their place at any table. Shop our award-winning collections at varawines.com. That's varawines.com. Wake Up to Money from BBC Five Live. Hello, welcome. It is Wake Up To Money. The price of oil reached its highest level in four years. So a barrel of Brent crude, over$120 it's worth now after reports the US preparing for a longer term blockade of that Strait of Hormuz. More on that coming up. We've had more big tech spending, more big tech profits.

1:20We'll hear about booming times at Google in particular. elsewhere the boss of one of the world's biggest generic drugs manufacturers, so those drugs that you might get on prescription in a pharmacy that aren't branded tells us about why he thinks the UK's supply of medicines could be at risk. We'll speak to the Labour Party in the last of our pre-local election interviews and all the players hate it, it just destroys the game, you get kicks, you get bounces. We're going to have a look at the controversy been brewing in the world of snooker the chalk used by the players. We'll find out what it's all about with a former ref and a snooker supply shop owner.

1:58Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC 5 Live. Thank you for being with us on this Thursday morning, the 30th of April. 85058. Get that number prepped in your phone to send us a message on all we are discussing today, whether it's about big tech, the cost of playing snooker, the type of chalk you use. It's not often we get to look at the... We look at many different aspects of the business of sports. Snooker hasn't been one we've spoken about for a bit, so it'll be interesting to get into the gear of all of that and your thoughts, where you're playing, what you're spending on.

2:37Are you doing that as much as you once were? Are the clubs around you as available as they once were? Maybe it's something that's been growing in your area. 85058, do let me know. There is plenty to catch up on from the United States overnight. We've got these latest financial results from some of the biggest companies in the world who, as you well know, are often the biggest tech companies in the world. So, seeing a few headlines this morning. Google outpaces rivals as big tech's artificial intelligence spending plans rise to$725 billion. The Meta stock share price falls as well as it says it's going to be spending more Alphabets, which owns Google.

3:23It's cloud business growing ever faster than rivals Amazon and Microsoft. We'll try and get our head around all of this. We've got Joanna Jensen with us on the show this morning, founder of the skincare brand Child's Farm, now an angel investor herself. Joanna, very good morning to you. Morning, Sean. You okay? I'm fine. My head is buzzing with all these tech results. It's madness. Well, I'm intrigued by your perspective on it, Joanna. You know, when you've founded a business, run a business yourself, you're now looking to invest in lots of businesses elsewhere. And then does this just feel like a whole different world that these companies are working and functioning in, the decisions they're making?

4:09But the capital expenditure is vast. How much money these companies are spending to keep up, to grow, that's why their stock fell, is because whilst they're all growing, they're all, you know, winning customers, people are queuing up for this amazing technology. The reality is for them to keep going and them to do better, they're having to spend more and more money. It's like computing is the new oil. It's just going nuts, the cost of these things. In your bones, Joanna, this is why we get you on to sort of get that instinctive feeling on a lot of things, because, you know, you won't necessarily be a big sort of tech investor yourself.

4:57But when you've seen the world of business work the way it does, does this all add up to you this scale of spending that they're doing and and it ever increasing well i get it you know if we talk about things being based in the cloud the reality is the cloud is massive warehouses full of computers full of servers that's where your cloud is everything needs to be stored somewhere and that's the reality of this and it's like it's this growing beast. I sometimes, I find it quite hard to get my head around it. And I'm sure your listeners do too, about the fact that it seems like going back to, can you remember in Holland, tulip fever, and people were buying more and more tulip bulbs because they wanted rarer tulips, more beautiful tulips.

5:49They wanted absolutely everything that they could beat their neighbour with. And then suddenly the market collapsed. And when you say remember that it was a good few 200 years ago, wasn't it? I know. It could be yesterday. It could be yesterday. It could. I mean, look, we're nearly in May. We're 2026 gone. I know. Well, look, I'll tell you what. Let's check in with Ruth Foxblader, who joins us now. Managing partner at Citrine Venture Partners, a New York-based venture capital firm. Ruth keeps a very close eye on the movements at these huge tech companies. Ruth, thank you for staying up to join us.

6:25Which one of these tech businesses, there's been a few of them, would you most like to talk about first? Well, I think that the most exciting one for investors this morning does look like Alphabet. And, you know, I think that the tulip fever at this moment for me, that analogy doesn't quite work. I think this is a very bullish day for tech. And we'll see, you know, little things like meta being down slightly. But I think that that will normalize. ultimately, I think that there is huge demand. And I think the reason that I'm excited to talk about Alphabet first is because we're really seeing investors give credit for this CapEx expenditure and seeing that come to fruition in terms of revenue for Alphabet in a hardware play, a software play and a cloud play.

7:19So join the dots for us, Ruth, because that is the investor's perspective it's what google are up to alphabet and google and its products are in almost all of our lives so how does that tally what is it that they are doing and spending so much money on that they are thinking we are all going to be using the competition is incredibly fierce i think that where we're seeing um investors give alphabet the most credit you're right might not be the most exciting thing for consumers because they don't see it. And that is cloud computing expenditure and efficiencies that they're making on the cloud and the way that AI is increasing the demand for compute.

8:06And if we look at compute backlogs and the backlogs of this demand, we can see that demand is still outstripping supply for all of these companies which offer compute. In our day-to-day life, many of us use Google and there is, again, it's that really competitive environment. There are questions about whether or not AI chatbots like ChatGPT from OpenAI, if those things will erode Google's position in search. Google is showing that they too are using these models, these LLMs to deliver more interesting search results. And they're also showing that at the enterprise level, a lot of the solutions that they have for businesses are integrating Gemini, their large language model.

8:58And so, you know, overall, there's this big holistic conversation in all of these companies around this new theme, which is artificial intelligence. And at this point, I think that the market is recognizing that this CapEx, while extraordinary, is producing a return on investment. Right. I've got Will Walker-Arnott with us as well this morning on the show, Director of Private Clients for Raymond James. Good morning, Will. Morning, Sean. Are you seeing British businesses get involved in this at the level that clearly investors are excited about the potential? British businesses I mean the capex I don't think is in the same scale I mean there was actually a report coming through in terms of how it's affecting London and that a lot of these AI companies are releasing huge amounts of space in London and the reason why they want to be in London is that actually we've got an incredibly strong research base here with education establishments like Imperial College, UCL, King's and that gives London a steady pipeline of PhD researchers and machine learning engineers.

10:03So I don't think London is divorced from this AI trade. And as both guests have already mentioned, I think the AI economy looks pretty strong based on those results we saw last night. NASDAQ futures are positive this morning, despite the rising oil price. So I think it's been well received by the market. Joanna, do you see, you know, when you talk to businesses that you might invest in, Are they looking, are they able to capitalise on the latest stuff that's been provided by the likes of Google? Yeah, I mean, if you're not embracing AI, you need to get on it. Although saying that, the UK, I think only 1 % of the nation, this isn't just businesses, has embraced AI yet.

10:50What's interesting, though, going back to Will's point there, is let's not forget that Anthropic, those are the guys behind Claude, they're the British co-founded AI lab. And they're right at the centre of all of this that's going on. If you think about it, AWS, so that's the Amazon distribution, the Amazon arm, they've got a new partnership with OpenAI, Anthropic, Meta and NVIDIA, which is great. And what's exciting in the UK is about 10 days ago, the British government launched a£500 million AI sovereign fund, which is to purely invest in British AI companies. So we are trying to be at the forefront and to keep up with what's happening across the pond.

11:33And that we must do. I mean, Ruth, hearing those numbers from Joanna there about what the British government might be doing, but yet the numbers that you hear from the big technology companies, it just outweigh that vastly, don't they? Yeah, they do. And I think that there's the feeling that there is proof that these investments are bearing out. For months and for years, the perennial story was the question around, does the velocity of spending on CapEx really have a proven ROI? And investors were kind of on the fence. And when we say, just because we've mentioned CapEx a few times, so when we talk about CapEx, that's the money being spent on sort of infrastructure in the business.

12:22Yes, yes. And it's, you know, it's in the hundreds of billions in AI. And these private companies, as you said, these private US companies are spending absolutely extraordinary amounts of money. And I think that in the UK and in Europe, there's a sense, hmm, we have to get our act together or we're going to end up with a situation like we did with cloud and social and the internet where so much tech is exported from America. And it's very difficult to control user data. It's very difficult to reap the economic benefits of the existence of these tech companies. And so there is this push and this discussion around tech sovereignty.

13:03I do question whether or not there is enough capital, frankly, elsewhere to offset the spending that these companies are doing and this sort of market narrative, which is going to allow them to continue to raise extraordinary amounts of money to do this spending. Can that be an issue, Joanna? Look, if you're in it now, if you've invested in them already, you keep going. You keep that follow on investment. These are the big players now and you just keep going. Just that idea of it, because you mentioned the UK government's money around having a bit more control in the UK over the future of artificial intelligence here.

13:48But can you win that battle? Are there risks that come with us being ever more reliant on these massive tech companies? Of course there are. And that's why the government has given this money over, because if you're not in it, if you're not in it, are you? Right. Ruth, any other of the companies? I mean, we've gotten to Google quite a bit there. Do any of the others, Amazon, Microsoft, because these are household names as well as some of the biggest companies in the world having the biggest influence, anything else that jumps out? I guess I just feel like this is a very bullish day, generally, for this narrative of artificial intelligence and the idea that it's going to really radically transform the way businesses are built and run.

14:35And I think that what we're seeing is, like I said before, across the board, whether it's on the hardware side or the software side, or even things like self-driving, there's an incredible sense that as an isolated kind of feature set, artificial intelligence is really important. I think it's also interesting to note that we're in this kind of very volatile backdrop, macro backdrop, where we have, you know, the war in Iran, this incredible strain on energy prices, which is linked so intimately to this industry and to the needs to fuel this industry, you know, energy obviously being very, very critical to artificial intelligence.

15:21And, you know, the sense that there might be some inflation associated with rising fuel prices and rising food prices, but that just really hasn't come into the picture. I just, I feel like it's still, we are seeing investors view this as extremely isolated and positive. Ruth, thank you for your time this morning. Ruth Foxblader, managing partner at Citrine Venture Partners. Will, you mentioned the oil price. Ruth mentioned the oil price. We've got to mention the oil price this morning because even though we've talked about highs and highs and highs in recent weeks, new highs now. As we look this morning for delivery of a barrel of Brent crude in June is, where are we at,$122 a barrel.

16:08Yeah, I mean, I think the key point here is the amount of economic pressure which is being put on the Trump administration. And if I were to sort of construct a benchmark to monitor this, I'd put three things into it. One would be the S &P 500, the other is the oil price, and the other is the US Treasury yield. And the good news for Trump is the S &P 500 has recovered hugely over the last month, so that takes some pressure off him. But the oil price is a significant problem. I mean, we're seeing the oil price hit over 120 last night, And that flows directly into increased gas prices in the US.

16:42So what is it? $4 a gallon in the US to pick up? So to fill up your car? When you talk about gas, yeah, you're on about what you put in a car in America. 100%. Yeah. And the third thing which will ratchet the pressure on Donald Trump is the US Treasury yield. So this is the cost of borrowing for the US government. And remember, they're heavily indebted over there. They've got a net debt to GDP ratio of over like 130%. and yields have now risen back up to about 4.4%, which puts significant pressure on him. So, you know, the pressure of Ridal is increasing for the Trump administration. I think a few investors will be looking at that taco trade again.

17:17Taco being, what is it, Trump always chickens out. In a sense that he's building the pressure on Iran in the short term. I think there's talk overnight that he might be going back to military action. but actually is he going to in the end actually back down, find an off-ramp because the economic pressure dial is rising as we speak. Joanna, do you feel it when you're running a business as you did with the skincare brand Child's Farm, when oil prices are as high as, I mean I know we're talking about record highs or highs for four years this morning but they've been pretty much above$100 a barrel for many, many, many weeks now.

17:54Do you feel it when you're running a business that there's just this world around you is costing more. Oh, totally. You'll see logistics partners, everything from getting your stock from a warehouse to a supermarket, for example, the cost of that goes up almost instantaneously. There is no delay on this, even though these are future costs and projecting forward. There is no delay. And these costs come in hitting people straight away. And this year for business in the UK has been a killer already. Let's not forget the national insurance raise. We've got corporation tax raise. We've got the new day one employment laws have come in.

18:35The risks now affecting small to medium-sized enterprises in the UK are enormous. And what I fear, you know, this$120 a barrel, this is the market saying we don't believe this gets fixed quickly. Will, I've just hit refresh. Sorry to interrupt you, Joanna. I've just hit refresh and it's$125 a barrel. Well, there we go. And this is a gift to Putin. What is this man doing? Yeah, I think what's happened, Sean, is that there are some rumours overnight that Trump's talking about further military action if this is not sorted. So it's not just him blocking the Straits of Amores through the naval blockade.

19:15He's also beginning to mention talks of further military action. So that's in the spike. And not forgetting, Will, of course, the UAE has walked out of OPEC. Yeah, which again shows further dislocation in the Middle East. And does this feel different, Will? This feels a little different to me this morning. How many times have we been sitting here lately just keeping an eye on where the oil price has been? But the fact that there was such a big leg up yesterday and then a big leg up overnight and then even as we're talking another leg up again, what does that tell you? I know we're sort of getting to the point, you know, we're talking about a barrel of Brent crude that's delivered in June.

19:57And the way the sort of market works is, you know, that's obviously approaching ever sooner. But is there an added nervousness when you see these bigger jolts up, up, up? What does that tell you? I mean, I'm just talking as a market participant, Sean, and I'll just give you an insight to my thinking. But part of me does think that Trump is really trying to ratchet up the pressure again because he's desperate to get this deal across the line. And so at the back of my mind, I'm always thinking that he's going to find the off ramp and find a way of deescalating pretty quickly. We've seen it with the tariff war.

20:32We've seen it historically in Iran. But, you know, this can't always happen. There could be a time when actually, you know, he does actually, he doesn't chicken out and he does actually commit to further military action. And if we see the oil price rise up to 150, that's a different game. That raises the head of stagflation, I think. And in the meantime, petrol, diesel, fertiliser, food, all of these things are tracking crude. And the inflation story is coming back to Britain. Oil jumps to highest prices. It's 2022 is the headline on the BBC website after, as Will referred to there, Trump to be briefed on new Iran options.

21:12So US Central Command has prepared a plan for a wave of short and powerful strikes on Iran in a move aimed to break the deadlock in negotiations with Tehran. That's from the news site Axios. The BBC has contacted the US Central Command and the White House for comment. We will keep you updated on that. Keep it in refreshing on the oil price. That is one way of us telling, has something changed in the last few minutes, last few hours very quickly? But of course, the story on the ground for many is a lot more serious than that when things start to escalate. So we'll let you know what develops there in the Middle East.

21:49Let's have a look at what's going on in the drug sector. In the UK in particular, it might be that you get your regular prescription through the NHS or you pop into your pharmacy and have your one-offs. and you're used to buying not necessarily the branded stuff, that is the medicines that you need, but the non-branded, what's called generic medicines, which are often seen as being cheaper because they're not part of that brand. Well, one of the biggest companies in the world that makes those generic medicines is called Sandoz. You might even think, oh, I've actually seen that company's name on some of the generic drugs that I get.

22:25I think this applies something like one in ten medicines to the NHS. But with the prices of some medicines increasing due to supply chain constraints caused by the war, I caught up with Richard Seynor, who's the chief executive of Sandoz. I started by asking him how we might, how soon we might begin to see disruption in this generic medicines market. Short to mid term, don't see any major disruptions. Actually, I can't, if a competitor goes out of stock or there are other supply issues, it's always hard to predict. The mid to long term, I mean, clearly input prices are going up. So cost of aviation fuel, cost of shipping, cartons, a number of our suppliers are already coming back to us and saying, look, we're going to have to raise price.

23:08Then I think there's potentially a question over the mid to long term, then prices of medicines will go up. And what is the mid to long term? I'm thinking sort of six months, the six month plus time period. I mean, in the UK, in a sense, patients pay a fixed prescription fee. and I think for most patients, they don't actually see the price of the medicines. Frequently, you know, a pack of antibiotics we would sell to the NHS for probably less than a Mars bar. So but a patient is paying, I don't know what a current prescription in the UK is, about£10 or so. Patients won't see a difference in terms of the price that they pay because they pay a prescription fee, which is a kind of tax.

23:43The government clearly has to pay for the medicines. But normally, the vast majority of generic medicines are actually way cheaper than the prescription charge. So I don't think patients will see it, but clearly there will be a cost increase to the NHS. How much would you expect the NHS more to be having to pay by the end of the year? I think it's two parts to that. I mean, it's difficult to put a percentage on that. I mean, to me, I guess low single digits. But at the flip side to that, as a company, we're launching more and more new biosimilars against very expensive originator chucks. As an industry and as a company, we can save more money than it will actually cost the NHS by any price increase.

24:19Are you considering making even more of your products closer to their final market that you're selling them into? Actually, it's not. We're the only remaining antibiotic manufacturer left in the Western world. We manufacture penicillins in Austria. I have to say I'm a little frustrated. We have better traction with the US administration and some African governments about protecting valuable assets. A lot of governments just see the price of things. A pack of antibiotics to the NHS at less than a miles bar, I find that offensive. You know, we've invested billions of dollars to continue to make sure these products are available.

24:51And yet governments don't want to recognise that. So we need also to work closely with the government to make sure that these products remain available. The alternative is that, you know, pretty much the only other supplier of antibiotics is China. And do you really want to be in a situation that your antibiotics are all coming out of Asian suppliers and you have no control of some of the most critical medicines in your supply chain? When you say you find that price offensive, are you considering your future of supplying the NHS the way you do? It's not that we would consider exiting, but I do think this is a business that is barely sustainable.

25:26And I think we're talking about critical infrastructure. Imagine a world without penicillin. There'll be no operations. A minor infection would kill you. These medicines have saved more lives than any other medicine invented by mankind. And yet governments aren't prepared to support us and actively then purchase drugs from other parts of the world who then damage our critical infrastructure. So I think, you know, we're having dialogues with the UK government. Has it moved forward? Not really. Europe, UK, very disappointed. What's the risk here? The risk in the long term is that you have a supply chain that is completely dependent on supply outside of Europe, outside of the UK.

26:03No forward investment in manufacturing into the UK. I don't think any generic manufacturer has invested in capacity in the UK for many, many years because it's not a sustainable and attractive market. You know, it can be frustrating. I can give you another example in the UK. The pharma industry is taxed. It's called VPAC, which is effectively a tax on your revenue within. And that was originally designed for the originator industry. We save the NHS tens of billions of dollars every year or pounds every year with the biologic medicines. These are complicated medicines for cancer and arthritis and immunology diseases.

26:36Now, we sell those at very low prices to the NHS, yet at the same time, the government wants to tax us additionally as though we're an innovator-originator company. So the government has to make a choice. We're quite happy to sell our products at very low prices in hospitals, but then when we get an additional tax at the end of the year, it really makes the UK unsustainable. What does that mean? Well, when we're constrained on supply, it's always the UK that is the first to suffer because it's in some ways the least attractive market. because they're so desperate to see the cost of everything and not necessarily the value and the relationship.

27:08Now, I think that's starting to change, but certainly I think there's a lot, and particularly with the MFN and this whole debate around the NHS having to spend more on a rate of medicines, that's all fine. The question is, how are they going to afford that? The way that they afford that is use more of generics and biosimilars at a lower price and make sure that patients, so once the patent has expired, that those products are available to patients at lower prices, and that saves the NHS money. So yes, I've seen the headlines. I've not seen any details about how this government's going to pay for new and new medicines, and yet still ensure the security of supply for the vast majority of patients.