Anthropic Cybersecurity Risk, BYD Goes Global, The Billionaire Next Door

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0:53This is Wall Street Week. I'm David Weston bringing you stories of capitalism. China has become the number one auto producer in the world. We go to Paris to see how one of its leaders, BYD, plans to take over Europe. Plus, the IMF and World Bank met in Washington last week to wrestle with a whole new set of problems. How much do they need to change to keep up with the times? And it's not just the people we see on the news all the time. That person next door may be one of the new billionaires, or at least multimillionaires, no one hears about. But we start with the latest AI scare. Anthropic has said that its new Mythos preview is too dangerous for public release.

1:32And Secretary Besant and Chair Powell called in the heads of the major banks to warn them about it. I applaud Secretary Besant for doing that. One of the things we always were focused on, the risk to the banking system, the risk for any kind of cyber attack. You're just getting in and change the ones and zeros around in the banking system. So much of it rests on our banking system. So nothing is more important. We need to do something about it. I don't think there is a framework. You know, everybody is keen to have a framework within which to operate. I don't think there is a governance framework that is there to actually mine those things.

2:12We need to work on that. Catherine Judge is a professor at Columbia Law School specializing in the Fed. She explained the risks that mythos could pose for the banking system and what regulators can do to manage them. The big deal is there are real concerns that this new, much more sophisticated form of AI could detect and likely will detect very meaningful vulnerabilities in banks' software in ways that could expose them to cyber attacks that would disable individual banks and potentially the broader banking system. There is the danger of bad actors getting access to it. Is there a flip side to it also?

2:49They may give the banking system and banks some defensive tools, although it might lack. Yeah, I mean, this is always the interesting question is like AI fighting AI. And what does that look like? And there's also a question of what that looks like for the structure of the banking system. Again, the US has always had a very diffuse banking system. We have lots of small banks. We have regional banks. And they provide different types of services and loans to the real economy. And so one of the interesting questions, if this becomes absolutely vital to be part of the financial system, who's going to have access to that type of technology?

3:20The financial system is global, last time I checked. So it's not just a U.S. problem we have here, potentially. Not at all. And we've seen both European and Asian regulators speak out and voice significant concerns. And so one of the things that's so interesting about this is you both need clear public-private coordination. But there's also the possibility of global coordination to try to understand just what these threats are and then what can be done realistically to try to contain them. What exactly can the Federal Reserve do? They have an awful lot of PhD economists. I'm not aware they have a lot of AI engineers.

3:52Yeah. I mean, one of the real challenges, no bank supervisor is prepared for this, right? So cyber attacks are nothing new. It's a challenge banks have been dealing with for a long time. And supervisors have played a role, helping to make sure that banks are appropriately prepared as part of operational risk and other concerns. But this is a whole different level. It's jumping up the magnitude of the threat in a way that no bank regulator or supervisor is prepared to fully address. And so the question is, can they ask good questions? Can they help provide guidance? As they did in Washington, can they facilitate coordination and conversation?

4:28We'll turn to the Fed right now to avoid the problem. But if, heaven forbid, there is a problem, there is a serious hack, what could the Fed's role be in remediation? This is one of the key issues. I mean, the government's not going to be able to stop a serious cyber attack. On the other hand, the government can play a very meaningful role helping to contain the damage. And really, when you're worried about the functioning of the financial system, a lot of it's on prevention. But things are going to happen and things are going to be wrong, and the effort then is on containment. And that's where the Fed having strong relationships with the entire banking system and helping to make sure that it's providing liquidity and potentially helping to provide alternatives for affected consumers and really coming up with a game plan over what can we do and what should we do if things go wrong is going to be, I think, part of the effort going forward to try to make sure that in the really unfortunate event that there is a wide scale malicious attack, that the damage isn't nearly as crippling as the actor might hope.

5:31Like the rest of us, the Fed may be struggling to understand the benefits and risks of AI. So we turn to the experts, people like Margaret Mitchell, researcher and chief ethics scientist at Hugging Face, an open-source AI platform. Mythos is really on the cutting edge of cybersecurity right now. It's incorporating a lot of things that we've already known that's already common in cybersecurity, but it's within a system, also called Mythos, that can operate at warp speed. So there's this new sort of paradigm right now within AI called AI agents and agentic computing. Mythos is an autonomous agentic system.

6:12It can take sequences of actions without any human oversight, and it can do it while you're asleep and infiltrate tons of different systems. If I'm one of the big banks, the Secretary of Treasury Besson called in, and I learned about this, what can I do about it? The big banks have been spending a lot of money on cybersecurity for quite a while now. Right. I think that that knowledge and that expertise is really important here. You don't necessarily need mythos to build up appropriate defenses. And actually, this is where the open source world can really help because it's quite possible, or at least we sort of think it's possible within the world of AI to have different models swapped in in a similar system built with deep security expertise to help with probing for vulnerabilities and creating patches, that kind of thing.

7:05And so I think it's really important right now for people to recognize, A, that this technology is possible and that doesn't have to be siloed to any one company. And B, that you can build up defenses right now using tools that are already available for intruder detection, fuzzing frameworks, these kinds of things, where basically it's possible to preempt any sort of attackers and defensively set up safeguards against any malicious problems. Part of a cybersecurity defense is basically having your own organization or other organizations try to hack into you to see where there might be vulnerabilities.

7:44So that's been going on for some time at the banks. But is this different in the sense that it can be running in the background constantly? The punchline is that Mythos is operating in a way where human oversight can be difficult. And that's because it can create action sequences without any sort of human intervention and act on different kinds of things that it sees as possible. and it can do it very fast and it can spawn what are called sub-agents, so little workers that can do the same thing across distributed systems. This is all this sort of new paradigm of agentic computing. So it's really within this calibration of autonomy that I think we have to think critically about what we want these systems to be doing, where we want to bring in human oversight, how people should be able to interact with these systems in order to approve or deny things.

8:40Because otherwise, you know, with full autonomy, they can just keep going overnight while you're sleeping, spending tons of different systems, that sort of thing. So, you know, you have to put in place those guardrails, those checks in order to make sure that humans are in the loop and can see into the loop, you know, can really understand what's happening. So you, of course, are an expert in this. Give us your best judgment when you talk about fully autonomous versus semi-autonomous. Which is better if the goal is safety? Semi-autonomous. I've actually written papers on this and op-eds, and I'm very opinionated about this, actually.

9:17So when you have full autonomy, that's super flexible. You can do lots of different things, and so that's pretty cool. Lots of different things you'd never thought of doing. You don't have to pre-program it, right? But from a safety perspective, also within the context of the financial sector, where there's a lot of regulations at play in terms of accountability, in terms of the passage of data, that kind of thing, you want to make sure that you're able to specify specifically the context within which the system can run and that it can't jump out of those contexts. If you're a regulator, what do you do in the face of this new technology to try to minimize or prevent systemic risk?

9:54Regulators have one piece to play within the overall accountability chain. And I think that for regulation, that focuses more on trying to help ensure reliability, ensure safety, opening up the possibility of third-party audits, third-party testing. So there's something to be said for companies that share their code, their information, even if they're proprietary, in order to undergo third-party auditing, third-party testing, that kind of thing. Regulators are in a really nice position to try and ensure that people's rights are protected. So what are the rights that should be protected? So this is where security comes in, reliability, safety, privacy, those kinds of things.

10:40So I think regulators have a role to play within the overall ecosystem in setting up what kinds of human values should be protected in these systems and how can you ensure that your system does that. Show us, run the evaluations, have it undergo third party evaluations where we can actually see from someone without the financial incentives of one institution how well these systems actually work. Up next, we look behind the curtain at Chinese automaker BYD to see how it's come so far, so fast, and the challenge it poses for Western rivals.

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12:30This is a story about changes that are too big to ignore. For many years, the global car market has been dominated by the same small group, countries like Japan, Germany, and the United States, but no longer. In the span of five years, China leapfrogged the largest automakers in the world, going from sixth place to first. It now exports more vehicles than the United States and Japan combined. And no company tells that story better than electric carmaker BYD. Bloomberg's Tom McKenzie reports from Paris. At an opera house just north of the Champs Elysees, a lavish debut, even for Paris. The star of the show, not a performer, but a product.

13:15This car is the latest creation of BYD, a Shenzhen-based electric vehicle maker that's taking the world by storm. Today, it's China's biggest car company by sales. I want to be the best valuable brand in the auto industry. But it wasn't so long ago that other automakers literally laughed them off. This was Tesla's Elon Musk here on Bloomberg back in 2011. There's competitors now ramping up. And as you're familiar with, BYD, which is also on the West Coast, I think they're ramping up production of their electric vehicles. Warren Buffett owns 10 % stake in that. Why do you laugh? BYD is trying to compete.

13:53Why do you laugh? Have you seen their car? You don't see them at all as a competitor? Since then, a lot has changed. BYD now has almost a million employees. It says it files an average of 52 patents per working day. And in 2025, for the first time, BYD beat Tesla in total car sales, claiming the title of top electric vehicle maker in the world. How would you characterize BYD's growth in recent years? Yeah, explosive. Ryan Fisher is the electric vehicle and charging analyst at Bloomberg NEF. They've, from 2021, gone from like barely on the map, if you know what I mean, if you look at the chart, to having 4 million plus sales and being in the top 10 automakers in the world.

14:40You come from the industry, Ryan. How is BYD viewed within the industry? Similar to Musk's comment, like, who are these? I think now people are changing it to, oh yeah, we're kind of scared. For a better idea of just how seriously BYD and the Chinese auto sector broadly are being taken now, just listen to Ford CEO Jim Farley speaking last year. It's the most humbling thing I've ever seen. Their cost, their quality of their vehicles is far superior to what I see in the West. We wanted to get a first-hand look at the battle for the future of automaking, so we went to Paris to see the rollout of BYD's new car.

15:22There, we spoke with the woman on the front lines of the firm's global expansion. Why Paris? Yeah, very good question. Paris is a city full of energy and also art. Stella Lee has led BYD's charge into markets beyond China, including here in France. As the company's number two, after its founder, Li also helped engineer its transformation from a battery startup into an auto manufacturing powerhouse. So, you know, I joined BYD when BYD is a very small company. They started with 20 people, 350 ,000 US dollar investment. So I joined BYD the second year. My first job is for overseas marketing promoting manager.

16:06So I went to Hong Kong and set up the first international office in Hong Kong in 1997. And then came to Europe in 1999 with US$30 ,000 cash and 140 feet container battery. The message is, you need to survive to sell the battery. And sell the battery she did, securing deals with Motorola and Nokia, Back then, leaders in the mobile phone space. An IPO followed, then a major investment from Berkshire Hathaway. With each step, the company grew and doubled down on research and development and bringing suppliers under their own roof. What do you think the biggest structural advantage is that BYD has over its competitors?

16:54Two things. One is technology. Till today, we have 120 ,000 R &D engineers. We invented 52 patents per day. The second is BYD has very strong vertical integration capability. What does this mean? It means we can do innovation much faster. We can do cool stuff much more than any other people. That's the reason you sold BYD in the past two years. We have the sporty car called the Yang Wan U9. We have 3 ,000 horsepower. It's the fastest car in the planet. It's capable of well over 300 miles an hour. This feels like China turning up and just saying, yeah, we'll have all the records. Thank you. Sadly, BYD didn't let us race their hypercar to the Arc de Triomphe, but we did drive their latest luxury EV, the Denza Z9 GT.

17:48Who do you see as your main competitor? Who is the brand that you're really competing with in this premium segment now with the Denzer Z9? Under all the cool technology in this car, I did not see any competition here. Given the company's origins, it's no surprise that the carmaker's key feature might be its battery. The range is long and the charge is fast, far faster than anything else on the market, if done through their planned system of flash chargers. Fisher says it remains to be seen how quickly BYD can roll those chargers out and whether their new cars will beat the competition in the field.

18:25But there's little doubt that their tech is impressive. When you think about their advantage in batteries that they've managed to produce, it does seem kind of like incredible. They've come out with the golden egg. They've done it incredibly quickly with the best technology at the best price. What's more, the new car has the profile of a Porsche and the horsepower of a Bugatti, all at the price of a Subaru Outback, but only in China. Here in France, it runs about 115 ,000 euros or$135 ,000. So with this one, it can be true. It's 0 to 100 km, 2.7 seconds. 2.7. Not all of BYD's vehicles target the luxury space.

19:08The lowest-cost model in the UK, where Chinese cars now account for one in every 10 new vehicles sold, goes for under£19 ,000 or about US$25 ,000. Cheap, but not the cheapest. Nor is that the goal, according to BYD's special advisor, Alfredo Altavia. What do you say to regulators and consumers? How do you convince them that BYD isn't just a low-cost disruptor? BYD has never been and will never be a low-cost player in any segment. Our main standing argument is value for money. Altavia came to BYD after a career as an executive with the competition. As the former head of Fiat Chrysler's European operations, he was a close aide to former CEO Sergio Marchionne and was considered a top contender to take over his role.

20:04What are the real ambitions of BYD in Europe? Is it volume or is it positioning in the premium segment or something else? I won't answer with our volume target because you will not believe me. But certainly we want to be one of the key players in this industry on a global scale. If you were an auto executive at a European legacy carmaker right now, as you were once, how worried would you be? Quite worried. About a million units sold last year overseas or international sales. One and a half million is the number that I've seen for 2026. Yes. Are you on track to meet that, to beat that? Yeah, easily.

20:52Easily? Easily beating one and a half million this year? Yes, easily, yeah. In recent weeks, the war in Iran and the soaring fuel prices that have come along with it have added new momentum to electric vehicle demand. China's exports of EVs and hybrids soared to a record high in March, with BYD leading the way. But for all the optimism about international growth, the company has faced major challenges in its largest market, back home in China. I want to talk about the here and now in the Chinese market. How would you characterize the current state of the Chinese auto market? Chinese auto market is super competitive.

21:31BYD recently posting a roughly 20 % drop in year-on-year profit, the first time since 2021. Is that as bad as it gets, do you think? No, it's nothing. Because first, because you need to understand the scenario behind where price war and competing with an EV car. Because everything we do, the next day our company will copy. But then for BYD now, we bring another protection river. It's our flash charging technology. the second generation blade cell. So this we call the protection river. I think it will keep our competition several years behind us. Are you seeing signs of recovery in the Chinese market?

22:12Yes. And the second, the market in China in Q4, Q1 is not good because all the subsidy, even we have a small portion left, is 100 % gone. Recent moves to wind down government support are a headwind for China's EV makers. But Fisher says subsidies haven't been the only driver of their rise, especially in BYD's case. How much of BYD's success is down to Chinese government support over the years? There was the investigation from the European Union about which specific automakers were getting the most subsidies and therefore what tariffs they should achieve. BYD was actually on the lower end of the spectrum than some of those.

22:53I think what the Chinese government have done and what some people look as, maybe I would be jealous of it, is that they aligned everything they were doing. They had an automotive plan. They got involved with the metals and mining. They provided the subsidies. Some of this was about oil independence, and some of this was about winning the automotive industry. This is a massive part of GDP in many countries, and they've done that successfully. So I don't look at the Chinese and feel like they've done anything massively wrong. I actually feel like we've been a bit naive as policymakers in Europe and places like that.

23:26Some critics may look at BYD's success and the success of other Chinese automakers in Europe and in other markets outside of China and say this is a classic example of China shifting excess capacity to other markets. Would that be a fair criticism? I think it's a fair criticism. We see it across industries. China obviously has leverage and you've seen that in the negotiations where they've tariffed different countries. maybe the French keep them out of their subsidies and then they get hit with tariffs back on brandy or something like that. Fundamentally, consumers want the cheapest products and the best ones, and the Chinese have managed to achieve that.

24:06So far, American consumers haven't gotten their hands on China's latest EVs. Biden-era tariffs of over 100 % have kept BYD and others out of the US car market. But Donald Trump and China's Xi Jinping are set to meet in May, and those trade barriers are likely high on the agenda. US car makers might not have long before Chinese cars show up on American shores, something that Ford's Jim Farley was well aware of when he spoke to Wall Street Week. I've never seen a competition like this. The government bet on EVs before anyone else in the world. They're the largest market in the world and now they're the most important market in the world.

24:43We can compete and win against them, but we have to bring our A game and we have to learn a lot of new things. In 2027, Ford is set to debut a line of EVs starting at around$30 ,000, which Farley describes as a response to BYD. But he's also talked to the Trump administration about forming joint ventures with Chinese firms to build cars locally. Volkswagen and Stellantis have already made similar deals. And as each carmaker and country decides how to respond to China's rise, they must grapple with the costs and benefits of protectionism or an alternative. If you can't beat them, join them. Coming up, the IMF was created before World War II was even over in order to provide stability for the global economy.

25:32Can it still get the job done in a very different world 80 years later?

25:44For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare.

26:21This is a story about being fit for purpose. As the IMF met in Washington last week, its mission of providing global financial stability has never been more important. But one of the fund's key participants expressed doubts about whether it's up to it, whether it is still fit for its very important purpose. I think we need to step back and look at the IMF and World Bank, their core missions. We cannot have these kind of elite beliefs get in the way. An awesome force of a thousand planes and riders thrusts deep into France. That core mission for the IMF and the World Bank was crafted back in 1944 in the White Mountains of Bretton Woods, New Hampshire, less than a month after Allied troops helped turn the tide in World War II by storming the beaches of Normandy.

27:13Eighty years later, the world is a very different place, and the wars that multilateral organizations like the IMF are contending with are now in places like Iran and Ukraine. Even if the war ends tomorrow, it would take quite some time for the recovery to kick in. War is, in any circumstances, the worst outcome. There are reasons to really worry about the upside inflation risks from a war in Iran. The IMF and the World Bank, I mean, these were institutions that were created even before the end of the Second World War with the basic idea that if countries can work together and cooperate on the economic and the financial front, and we can have stability in the world, then we would have less wars.