# CH Robinson to Buy RXO for $5.8 Billion in Bet on AI Model

An episode of [Bloomberg Intelligence](https://invisiblenetwork.ai/podcast/326301337), 5 Oct 2026, 25 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/7f534b8c-9e91-429a-b102-ae3c00090c6d/dc4d596b-0d2b-4794-b512-b4da01167928/audio.mp3?utm_source=Podcast&in_playlist=0ad812bf-fd15-4012-a18c-ae3c00090c76

Watch Paul and Scarlet LIVE every day on YouTube: http://bit.ly/3vTiACF. Bloomberg Intelligence hosted by Scarlet Fu, Stacey Vanek Smith, & Norah Mulinda -Lee Klaskow, Bloomberg Intelligence Senior Transport, Logistics and Shipping Analyst, discusses CH Robinson Worldwide agreeing to buy trucking brokerage firm RXO in a deal centered around a bet that artificial intelligence can help the companies improve efficiency in a challenging freight market. CH Robinson aims to diversify its business and capitalize on RXO’s abilities in expedited and last-mile delivery through a cash-and-stock transaction valued at about $5.8 billion. -Sam Fazeli, Bloomberg Intelligence, Director of Research for Global Industries and Senior Pharmaceuticals Analyst, discusses AstraZeneca investing $2 billion in US biotech Summit Therapeutics Inc. to collaborate on a promising new cancer medicine that could be combined with the British drugmaker’s other treatments. The investment will speed up development of Summit’s experimental ivonescimab, a bispecific antibody drug that aims to better attack cancer cells and stop them growing, and targets two proteins called PD-1 and VEGF. -- Robert Schiffman, Senior Tech Credit Analyst for Bloomberg Intelligence, discusses his latest credit research on Micron Technology. According to Bloomberg Intelligence: Micron's AI-driven cash surge could make its credit profile materially less cyclical than in prior memory upturns, as stronger pricing, strategic customer agreements and rapidly expanding margins improve earnings visibility. Fiscal 2026 revenue rose 256% to $133.2 billion and adjusted free cash flow reached $62.3 billion, while Bloomberg consensus points to roughly $271 billion of revenue and about $141 billion of free cash flow in fiscal 2027. -- Dylan Sloan, Bloomberg Wealth Reporter, discusses his story about how the world's tech billionaires gained a combined $845 billion through Sept. 30. That’s the most ever for the first nine months of a year, according to the Bloomberg Billionaires Index. Tech billionaires are now worth a combined $4.6 trillion, accounting for 36% of the index's wealth despite making up only about a fifth of its members. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios.
[0:04] Speaker 2: Podcasts.
[0:05] Speaker 3: Radio.
[0:06] Speaker 4: News.
[0:09] Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[0:13] Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
[0:16] Speaker 5: Auto with the Bloomberg Business App. Listen on demand wherever
[0:19] Speaker 5: you get your podcasts or watch us live on YouTube.
[0:24] Speaker 6: We do want to pivot over to transportation and the
[0:26] Speaker 6: perfect person to talk about essentially the transport industry would
[0:30] Speaker 6: certainly be Bloomberg Intelligence's Lee Klaskow. He is a senior
[0:34] Speaker 6: transport logistics and shipping analyst. And we've been following this
[0:38] Speaker 6: story essentially of C.H. Robinson buying and purchasing RxO. And
[0:43] Speaker 6: this is a nearly six billion dollar deal. Lee, thanks
[0:46] Speaker 6: so much for joining us. Talk to us about what
[0:49] Speaker 6: you see that's particularly interesting when it comes to this deal.
[0:52] Speaker 7: Yeah, so what you're doing is the number one freight broker, C.H. Robinson,
[0:57] Speaker 7: is buying the number three freight broker here in the
[0:59] Speaker 7: United States, which is RXO. The combined two companies will
[1:03] Speaker 7: have around 20% market share of the U.S.
[1:05] Speaker 4: Market.
[1:06] Speaker 7: You know, what's really interesting to us, and it kind
[1:09] Speaker 7: of dovetailed from the conversation we were having earlier with AI, C.H.
[1:13] Speaker 7: Robinson's really been a leader within the freight transportation market
[1:16] Speaker 7: in terms of investing and creating AI to be a
[1:19] Speaker 7: more profitable freight broker. And they also have implemented over
[1:23] Speaker 7: the last couple of years lean management systems, which have
[1:26] Speaker 7: made their average freight broker much more productive than your
[1:32] Speaker 7: average RxO freight broker. So you bring in those RxO
[1:36] Speaker 7: freight brokers into the CH Robinson's model, and you should
[1:40] Speaker 7: have significant productivity gains, not only from the top line,
[1:46] Speaker 7: but also from a productivity standpoint. So we think it's
[1:49] Speaker 7: a pretty interesting deal and a compelling deal. And it'll
[1:53] Speaker 7: really help accelerate some of the operating benefits that CH
[1:59] Speaker 7: Robinson has been able to get. I mean, their productivity
[2:01] Speaker 7: has increased around 60% over the last couple of years
[2:05] Speaker 7: based on just driving that lean management system and leveraging
[2:10] Speaker 7: not only AI, but other technology productivity tools.
[2:15] Speaker 8: What are some of the other productivity tools other than AI?
[2:17] Speaker 8: I mean, obviously we've heard a lot about that, but
[2:19] Speaker 8: are there other things that you've been watching?
[2:23] Speaker 7: Just like, you know, the large language models, like, you know,
[2:25] Speaker 7: the pre-AI stuff that they leaned into as well. You know,
[2:30] Speaker 7: they've always been kind of, like I said, one of
[2:33] Speaker 7: the forward-leaning players within the freight transportation market when it
[2:37] Speaker 7: comes to AI. And then you add on top of
[2:40] Speaker 7: that the lean management system, They're expected to get around
[2:44] Speaker 7: $ 300 million in cost savings. At the end of the day,
[2:48] Speaker 7: they're not going to need a lot of back office,
[2:50] Speaker 7: as many back office people with the combined company. Speaking
[2:55] Speaker 7: with management on an analyst call earlier, it sounded like
[2:59] Speaker 7: they're not looking to get rid of the brokers. They
[3:02] Speaker 7: want to bring in those RxO brokers and just make
[3:05] Speaker 7: them really more productive and drive earnings power in 2028.
[3:11] Speaker 6: And tell me, why exactly does this deal make sense
[3:13] Speaker 6: right now in particular? Is this about gaining scale in
[3:18] Speaker 6: what's a particularly difficult freight market right now?
[3:22] Speaker 7: Yeah, at the end of the day, scale is extremely
[3:24] Speaker 7: important in transportation. And this definitely gives the combined company
[3:28] Speaker 7: more scale. But it also gives C.H. Robinson maybe more
[3:33] Speaker 7: exposure to some industries that they're not really involved in
[3:37] Speaker 7: as much as they are today. So it's just like
[3:40] Speaker 7: expedited or final mile with where our XO has a
[3:47] Speaker 7: foothold in. So it's not only just building scale, but
[3:51] Speaker 7: also maybe getting more into more services. And also, the
[3:58] Speaker 7: buying power of a larger company is going to be
[4:01] Speaker 7: really important The freight markets, freight brokers, because of a
[4:05] Speaker 7: recent Supreme Court ruling on the Montgomery case, are facing
[4:09] Speaker 7: higher insurance premiums because the case pretty much says that
[4:13] Speaker 7: a freight broker could be liable if a truck gets
[4:16] Speaker 7: into an accident that they hire. And so we're expecting
[4:21] Speaker 7: insurance costs to increase more. And management noted on one
[4:25] Speaker 7: of the calls they had this morning is that they
[4:27] Speaker 7: plan on renegotiating with their insurance providers because of the
[4:31] Speaker 7: size that they have now. So it's definitely going to
[4:34] Speaker 7: help them reduce costs when it comes to some services
[4:37] Speaker 7: that they're purchasing.
[4:39] Speaker 8: We were just talking about high gas prices, high diesel prices,
[4:42] Speaker 8: and how much they're affecting the economy. How is that
[4:45] Speaker 8: impacting freight and that entire industry?
[4:49] Speaker 7: Yeah, so in general, freight transportation providers have fuel surcharges,
[4:53] Speaker 7: which lag actual pricing. So there tends to be somewhat
[4:56] Speaker 7: of a headwind when it comes to you know, those
[5:01] Speaker 7: increases in rates. The freight broker industry is not as
[5:04] Speaker 7: impacted as an asset based carrier like a Werner or
[5:08] Speaker 7: a Knight Swift, you know, but in the trucking market,
[5:12] Speaker 7: the fuel surcharge usually lags about a week. So it's
[5:15] Speaker 7: not a huge headwind. The rail industry, the lag is
[5:20] Speaker 7: a lot longer. It can be up to 60 days,
[5:22] Speaker 7: but it tends to be around 30 days for commodity carloads.
[5:25] Speaker 7: And It is a lot, it's closer to trucking when
[5:29] Speaker 7: it comes to intermodal. So it impacts different industries differently. But,
[5:34] Speaker 7: you know, I would say that, you know, most of
[5:36] Speaker 7: their additional costs, I would say 80 to 90 percent
[5:39] Speaker 7: are covered by these fuel surcharges. Obviously, they don't get paid,
[5:43] Speaker 7: you know, when their trucks are idling or if they're,
[5:45] Speaker 7: you know, if they're stuck in traffic or if they're
[5:46] Speaker 7: just not operating their equipment as efficiently as they should be.
[5:52] Speaker 7: So there are some aspects where they don't get full coverage.
[5:57] Speaker 6: And, you know, I do want to talk specifically back
[5:59] Speaker 6: about the deal. I know that they are targeting about
[6:01] Speaker 6: $ 300 million when it comes to cost savings.
[6:04] Speaker 9: Right.
[6:05] Speaker 1: Does this seem or look achievable to you?
[6:09] Speaker 7: Honestly, you know, we, so C.H. Robinson in the past has,
[6:13] Speaker 7: I guess, underestimated some of the benefits from the technology
[6:17] Speaker 7: implementation and some of the lean management practices. We would probably,
[6:21] Speaker 7: you know, looking back, you know, into from 2028, we
[6:25] Speaker 7: think that 300 million probably could be conservative, assuming that
[6:30] Speaker 7: management's able to execute and there's not too much overlap
[6:35] Speaker 7: with customers. Management has said that there isn't a lot
[6:38] Speaker 7: of overlap with customers. What we saw with the RXO
[6:43] Speaker 7: actually bought a freight broker a couple years ago, Coyote
[6:47] Speaker 7: from UPS, and you saw some customers there was a
[6:53] Speaker 7: lot of overlap. So the benefits weren't probably as great
[6:56] Speaker 7: as they were expecting. So it really comes down to
[6:58] Speaker 7: execution and customer overlap. But assuming there's not a lot
[7:02] Speaker 7: of overlap and they're really good at the execution, which
[7:04] Speaker 7: we think they will be, we think that $ 300 million
[7:07] Speaker 7: could be deemed conservative.
[7:09] Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
[7:15] Speaker 5: Astrazeneca has just invested $ 2 billion in a U.S.
[7:17] Speaker 1: Biotech called Summit Therapeutics.
[7:36] Speaker 8: And they are collaborating on a really promising new cancer
[7:39] Speaker 8: medicine that could apparently be combined with other treatments that
[7:42] Speaker 8: AstraZeneca offers. Here to talk about this is Sam Fazelli.
[7:46] Speaker 8: He's the director of research, healthcare, defense, industrials, and autos.
[7:50] Speaker 1: Sam, welcome.
[7:52] Speaker 5: Hi.
[7:54] Speaker 2: I see that you've got rid of Paul for the
[7:56] Speaker 2: week off to France.
[7:58] Speaker 1: He's apparently in the Mediterranean. Yes.
[8:03] Speaker 8: Thank you so much for talking with us. I'd love
[8:06] Speaker 8: to ask about this deal between AstraZeneca and Summit Therapeutics.
[8:09] Speaker 8: How big of a deal is this and how excited
[8:13] Speaker 8: are you about this cancer medication?
[8:16] Speaker 2: I mean, Scarlett, companies and Stacey, companies constantly do these
[8:21] Speaker 2: kind of deals. So why are we particularly talking about
[8:24] Speaker 2: this one today? Well, the announcement came today. They signed
[8:27] Speaker 2: $ 2 billion equity investment in Summit Therapeutics. That's one angle
[8:31] Speaker 2: that's a little bit different to the usual partnership deals
[8:34] Speaker 2: that you see. Second angle is that AstraZeneca had stayed
[8:37] Speaker 2: away from this area where Summit is active. It's, let's
[8:41] Speaker 2: do some jargon here, excuse me, buy specific antibody that
[8:45] Speaker 2: targets two different things, et cetera, that a lot of
[8:48] Speaker 2: people had been wringing their hands on until this deal's
[8:52] Speaker 2: happened and some data's come out and it's beginning to
[8:54] Speaker 2: look really interesting. And there is a very divided world
[8:58] Speaker 2: out there on this particular drug. on this particular class
[9:01] Speaker 2: of drugs. And that is some people believe that it's
[9:03] Speaker 2: the biggest thing that's going to happen since Merck brought
[9:06] Speaker 2: this drug to market called Keytruda, now the largest anti-cancer
[9:11] Speaker 2: drug around. And others think, well, we haven't seen enough data,
[9:15] Speaker 2: we don't believe in it. What Astra has done here
[9:17] Speaker 2: is kind of hedged its bet to a degree, is
[9:20] Speaker 2: that it's put this investment in, they're doing trials with
[9:22] Speaker 2: the company, everyone's paying a little bit of a share themselves,
[9:26] Speaker 2: And they own their assets. Astra is not taking the asset.
[9:29] Speaker 2: So is it a harbinger for a future deal or not?
[9:31] Speaker 4: I don't know.
[9:32] Speaker 2: But it's certainly a very interesting way of getting into
[9:35] Speaker 2: that space.
[9:36] Speaker 3: Why do you think it's moving forward with an equity
[9:38] Speaker 3: investment as opposed to a straight out takeover?
[9:43] Speaker 9: Yeah.
[9:43] Speaker 2: So this company is run by a very well-known, I
[9:51] Speaker 2: would say, CEO who has been already in charge of
[9:56] Speaker 2: another company, which went through a very similar kind of story.
[10:00] Speaker 2: where it was called Pharmacyclics. People didn't believe it at first.
[10:05] Speaker 2: Then they brought to the drug. In the end, In
[10:07] Speaker 2: the end, that company, Pharmacyclics, was sold to AbbVie for
[10:13] Speaker 2: something in the region of $ 20- odd billion. So this is
[10:18] Speaker 2: a CEO who really believes and has got the money
[10:21] Speaker 2: to back the company. Maybe today he wasn't interested in selling.
[10:26] Speaker 2: That time might come. And we do know that Astra
[10:29] Speaker 2: supposedly had approached them about a year ago for a
[10:32] Speaker 2: $ 15 billion acquisition that never happened.
[10:36] Speaker 8: What do you think? Scarlett mentioned that the sector overall
[10:39] Speaker 8: has been down, is down slightly this morning. How do
[10:43] Speaker 8: you see the sector overall? It seems like there have
[10:45] Speaker 8: been a lot of breakthroughs. It seems like there have
[10:47] Speaker 8: been a lot of kind of big deals happening. But
[10:50] Speaker 8: what are the trends that you're noticing?
[10:53] Speaker 2: So we have to separate out healthcare into its component parts, obviously.
[10:58] Speaker 2: Some are more sensitive to interest rate cycle, potentially. Biotech
[11:03] Speaker 2: and pharma should not be, logically, although risk appetite is
[11:07] Speaker 2: impacted by it. by interest rate cycle. So I think
[11:12] Speaker 2: what might have happened is that biotech pretty much doubled,
[11:15] Speaker 2: more than doubled, judging by the XBI.
[11:20] Speaker 1: ETF that we follow.
[11:21] Speaker 2: There's an index that folks follow, the XBI, which is
[11:24] Speaker 2: following the S & P 500 biotech index. And when
[11:28] Speaker 2: you look at that, it's more than doubled over the past,
[11:30] Speaker 2: I would say, year, year and a bit.
[11:32] Speaker 1: So there's a lot.
[11:34] Speaker 2: Of already momentum in the biotech sector, And the question
[11:38] Speaker 2: now is, of course, what do I need to keep
[11:40] Speaker 2: that going? You've got AI competing with it. You've got
[11:42] Speaker 2: interest rates competing with it. But the sector is moving
[11:45] Speaker 2: forward in terms of bringing these innovations to market.
[11:50] Speaker 3: Before we let you go, Sam, I was just checking.
[11:52] Speaker 3: There's another deal that happened this morning. Shinogi, which is
[11:55] Speaker 3: a Japanese company buying Intrabio for $ 2 billion. I had
[12:00] Speaker 3: not heard of Shinogi. It's a Japanese drug maker that,
[12:04] Speaker 3: for now, focuses on infectious diseases. Is this kind of
[12:07] Speaker 3: an acquirer that we should keep.
[12:08] Speaker 4: An eye on?
[12:10] Speaker 3: And I would doubt it.
[12:12] Speaker 2: Japanese pharma companies do get involved in M & A
[12:15] Speaker 2: deals just like everybody else does. But I don't think
[12:18] Speaker 2: that Shinogi is going to be a name, famous last words, right?
[12:22] Speaker 2: That is going to be up again in six months
[12:24] Speaker 2: or three months time with yet another deal. I think
[12:27] Speaker 2: when these deals happen, they're done for a very, very
[12:29] Speaker 2: specific reason, as is the case here today.
[12:33] Speaker 8: Really quickly, is there anything you have your eye on
[12:35] Speaker 8: right now? Any company that you're watching?
[12:38] Speaker 2: Well, yeah, I mean, you know, everybody is keeping an
[12:41] Speaker 2: eye on both the one that we just spoke about,
[12:43] Speaker 2: which is Summit Therapeutics, where they have some data coming.
[12:46] Speaker 2: But particularly, more importantly, their eyes on Moderna. Remember Moderna
[12:50] Speaker 2: or the cancer vaccine that's going to treat every cancer
[12:53] Speaker 2: that there is out there? I mean, you know, I'm
[12:56] Speaker 2: being facetious here. But the key data for that is
[12:59] Speaker 2: coming at a conference in three weeks' time.
[13:01] Speaker 1: And guess what?
[13:01] Speaker 2: I'll be there.
[13:03] Speaker 1: Stay with us. More from Bloomberg Intelligence coming up after this.
[13:10] Speaker 5: You're listening to the Bloomberg Intelligence Podcast. Catch us live
[13:14] Speaker 5: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
[13:17] Speaker 5: Auto with the Bloomberg Business App. Listen on demand wherever
[13:20] Speaker 5: you get your podcasts or watch us live on YouTube.
[13:24] Speaker 8: Obviously, the markets are having a pretty good morning, pretty solid,
[13:29] Speaker 8: but there are a lot of questions on the horizon
[13:31] Speaker 8: about valuations and about where the risks may lie, be
[13:34] Speaker 8: that energy prices or the bond market, obviously. We've got
[13:39] Speaker 8: a great person to talk with us. Robert Schiffman is
[13:41] Speaker 8: Senior Tech Credit Analyst for Bloomberg Intelligence.
[13:44] Speaker 6: Welcome, Robert.
[13:46] Speaker 7: Hi, guys.
[13:47] Speaker 8: Hey, so talk to us a little bit. Micron is
[13:49] Speaker 8: obviously a company that we've all been watching pretty closely.
[13:52] Speaker 8: They are not having a great morning, but they've had
[13:54] Speaker 8: a pretty great year. What are you seeing with Micron?
[13:59] Speaker 4: Micron is crushing it. And I honestly think the rest
[14:02] Speaker 4: of the tech space is crushing it. You know, the
[14:05] Speaker 4: tone in the media continues to be sort of bubble talk.
[14:08] Speaker 4: But the reality on the ground is we're not seeing
[14:11] Speaker 4: that at all. Micron is going through a growth period
[14:14] Speaker 4: like they've never witnessed. The amount of revenues and cash
[14:18] Speaker 4: flow we expect them to generate basically puts them in
[14:22] Speaker 4: a position to do whatever they want. Unlike the hyperscalers
[14:26] Speaker 4: that are writing the big checks for CapEx, names like
[14:28] Speaker 4: Micron and the other semis are benefiting from all that
[14:32] Speaker 4: cash flow by providing the equipment. So listen, from an
[14:35] Speaker 4: equity perspective, you start getting into multiple evaluation questions. Certainly
[14:39] Speaker 4: from a credit perspective, I don't think Micron's ever been
[14:42] Speaker 4: better positioned. It's likely they're going to continue to see upgrades.
[14:45] Speaker 4: And the real problem that they have is what are
[14:48] Speaker 4: they going to do with all their free cash?
[14:50] Speaker 1: What are you thinking?
[14:51] Speaker 3: How do you consider what they could put that money into?
[14:57] Speaker 4: Well, there's a couple of different things. One is it
[14:59] Speaker 4: creates this circular financing concern. When names like Micron or Broadcom,
[15:04] Speaker 4: for instance, is talking about a $ 60 billion chip deal
[15:07] Speaker 4: with Anthropic, it's helping fund payments for the ecosystem. Obviously,
[15:13] Speaker 4: there's a tremendous amount of capital that's being spent. The
[15:16] Speaker 4: biggest spenders are going into massive negative free cash flow.
[15:20] Speaker 4: So they need a lot of different places to borrow it.
[15:22] Speaker 4: So I do think having some sort of structured financing,
[15:26] Speaker 4: something that Micron, Vidya, Broadcom are going to continue to support.
[15:31] Speaker 4: Also direct investments into some of their suppliers or frontier
[15:38] Speaker 4: LLMs would certainly be a place. And primarily, I think
[15:42] Speaker 4: what you're going to see is shareholders are going to benefit. Now,
[15:44] Speaker 4: you're going to see massive buybacks beyond levels that you've
[15:49] Speaker 4: ever seen, getting into the ranges sort of of the
[15:51] Speaker 4: worlds of the NVIDIAs and the Apples.
[15:54] Speaker 8: Now, you mentioned that a lot of these companies are
[15:57] Speaker 8: benefiting from the huge amount of money that AI companies
[16:01] Speaker 8: are spending in their buildouts. But what happens if that
[16:05] Speaker 8: money starts to dry up?
[16:08] Speaker 4: Sure. You know, that's been a big concern. You know,
[16:10] Speaker 4: the real concerns here is, one, does this technology work?
[16:14] Speaker 4: So if you're spending all the money, are you going
[16:15] Speaker 4: to eventually be able to monetize it? And then two is,
[16:18] Speaker 4: you know, how are you going to afford it? There's,
[16:21] Speaker 4: you know, we've estimated $ 9 trillion of hyperscaler, you know,
[16:26] Speaker 4: late through 2031. You know, how do you fund it?
[16:30] Speaker 4: And the reality is we're seeing more and more ways
[16:33] Speaker 4: of funding. It raises more questions, you Plus, there's those
[16:39] Speaker 4: that suggest if you have to dig deeper into other areas,
[16:44] Speaker 4: there's not enough traditional money around. But quite frankly, the
[16:46] Speaker 4: unsecured markets, the private data center markets, the chip securitization markets,
[16:53] Speaker 4: the leasing markets, alternative currencies, even equity in size have
[16:58] Speaker 4: been able to help fund this build. I think next
[17:01] Speaker 4: year alone, the investment grade a hyperscaler market is going
[17:06] Speaker 4: to need to exceed $ 400 billion, probably approaching $ 500 billion.
[17:11] Speaker 4: But I do think the money is going to be there.
[17:13] Speaker 4: And what we're seeing is the biggest borrowers, the ones
[17:16] Speaker 4: that need to spend the most money, are the ones
[17:19] Speaker 4: that are probably the most yielded. Yields are going up,
[17:22] Speaker 4: the cost of capital is going up. But if you're
[17:25] Speaker 4: a Microsoft at another 50 or 100 or 150 basis
[17:33] Speaker 4: points higher than you did last year is not going
[17:35] Speaker 4: to stop them when they think the RLIC on these
[17:39] Speaker 4: AI investments. you know, are double or even triple digits.
[17:43] Speaker 4: So I don't see the money drying up. Obviously, if
[17:45] Speaker 4: it does, that's going to be a problem. But in fact,
[17:48] Speaker 4: we're seeing more money being created now than ever before.
[17:51] Speaker 4: Third-party money like NVIDIA and its asset manager or a
[17:55] Speaker 4: ton of asset manager friends raising $ 500 billion is probably
[17:59] Speaker 4: just the tip of the iceberg. So I think there's
[18:01] Speaker 4: tons of capital out there. You're actually seeing it in
[18:03] Speaker 4: all these deals that are being priced right now. They're
[18:05] Speaker 4: still significant, massive oversubscribed books.
[18:09] Speaker 1: Stay with us.
[18:10] Speaker 5: More from Bloomberg Intelligence coming up after this. You're listening
[18:17] Speaker 5: to the Bloomberg Intelligence podcast. Catch us live weekdays at
[18:21] Speaker 5: 10 a.m. Eastern on Apple CarPlay and Android Auto with
[18:24] Speaker 5: the Bloomberg Business app. Listen on demand wherever you get
[18:27] Speaker 5: your podcasts or watch us live on YouTube.
[18:31] Speaker 3: So with the stock market surging, with AI showing no
[18:36] Speaker 3: signs of slowing down, even though some AI founders, you know,
[18:39] Speaker 3: AI lab founders want to kind of pace development, it
[18:43] Speaker 3: follows that these tech CEOs and tech startup founders are
[18:48] Speaker 3: have done tremendously well for themselves. The world's tech billionaires
[18:52] Speaker 3: gained a combined zillion dollars through September 30th.
[18:56] Speaker 1: That's not true. It's actually a real number, but it
[18:58] Speaker 1: feels like a zillion dollars.
[18:59] Speaker 7: Rounding up.
[19:00] Speaker 1: Yeah, exactly.
[19:01] Speaker 3: Dylan Sloan is a reporter on our Bloomberg Wealth team,
[19:04] Speaker 3: and they've been crunching the numbers. And at the end
[19:07] Speaker 3: of the day, Dylan, it's all about how the tech
[19:09] Speaker 3: billionaires are on their way to the best year ever.
[19:12] Speaker 4: Yeah.
[19:12] Speaker 1: It is, exactly.
[19:13] Speaker 9: Through the first three quarters of the year, we're kind
[19:14] Speaker 9: of taking this opportunity, the relaunched Bloomberg Billionaires Index, now
[19:18] Speaker 9: available online at Bloomberg.com slash billionaires. So for the first
[19:21] Speaker 9: three months of the year, we're really just taking a
[19:23] Speaker 9: close look at the dynamics of that wealth, where it's growing,
[19:26] Speaker 9: where it's accumulating. And yeah, you really hit it right
[19:27] Speaker 9: on the head. It is really a tech story, an
[19:29] Speaker 9: equity story, mirroring a lot of the dynamics we've seen
[19:32] Speaker 9: in markets across the board. About 100 of the 500
[19:35] Speaker 9: wealthiest people in the world owe their fortunes to tech,
[19:38] Speaker 9: and they gained about $ 845 billion through the third quarter
[19:40] Speaker 9: this year. I don't know how that compares to a zillion,
[19:43] Speaker 9: something close to it, I would guess. Everyone else on
[19:46] Speaker 9: the other hand lost 62 billion in total over that period.
[19:49] Speaker 9: So it really is a story of this bifurcation between
[19:51] Speaker 9: tech and everybody else, kind of as we've seen in
[19:54] Speaker 9: the market more broadly over the past couple of years,
[19:55] Speaker 9: but it continues on and on.
[19:58] Speaker 8: I'm afraid I already know the answer to this question,
[20:00] Speaker 8: but I'm going to ask anyway. So, I mean, is
[20:03] Speaker 8: everybody else also getting wealthier along with the wealthiest people
[20:09] Speaker 8: in the world? Because is the rising tides lifting all boats?
[20:13] Speaker 9: Yeah. I mean, speaking to the data that we have
[20:16] Speaker 9: on the index, yes and no. I mean, and I
[20:20] Speaker 9: guess more no than yes, honestly. I think that stat
[20:22] Speaker 9: earlier that, you know, there are a few sectors where
[20:24] Speaker 9: we have seen gains, the financial sector, was one of
[20:27] Speaker 9: the few where we saw people showing an overall increase
[20:30] Speaker 9: in net worth, but pretty much everywhere else across the board,
[20:33] Speaker 9: it was down, down, down. And it really was these
[20:35] Speaker 9: top 10 American tech founders and CEOs who carried the
[20:39] Speaker 9: baton in terms of providing most of the gains through
[20:42] Speaker 9: the index for most of the year. And it really
[20:44] Speaker 9: was an American story as well. We saw last year
[20:46] Speaker 9: for the first time, we've been covering this since 2012,
[20:49] Speaker 9: so the first time in nearly 15 years that all
[20:52] Speaker 9: 10 of the world's wealthiest people were from the United
[20:53] Speaker 9: States for the first time, which was definitely an inflection
[20:57] Speaker 9: point and the result of everything we've seen in the
[20:58] Speaker 9: markets for the past few years.
[21:00] Speaker 3: The thing is, and you make this clear in your story,
[21:01] Speaker 3: it was not a straight line up. Some of these
[21:04] Speaker 3: tech billionaires saw their fortunes rise, but in some instances
[21:09] Speaker 3: fall dramatically before kind of coming back up. Larry Ellison
[21:12] Speaker 3: being a good example.
[21:13] Speaker 1: Exactly.
[21:14] Speaker 7: Yeah.
[21:14] Speaker 9: I think he's kind of the poster child for that.
[21:15] Speaker 9: We saw that last year. He actually briefly became the
[21:17] Speaker 9: world's wealthiest man, beating out Elon Musk right around the
[21:20] Speaker 9: end of last year as Oracle was really touting their
[21:22] Speaker 9: plans for expansion into AI. But As a story that
[21:26] Speaker 9: you guys and all of us have been covering here
[21:27] Speaker 9: in the newsroom, investors have gotten cold feet about it
[21:31] Speaker 9: a little bit as they've plowed so much money into this,
[21:33] Speaker 9: financed largely by debt. He's lost nearly $ 200 billion in
[21:36] Speaker 9: wealth this year so far. And yeah, we saw the
[21:39] Speaker 9: total net worth of the index peaked a few months ago,
[21:41] Speaker 9: but it's since pulled back about 6%. So some of
[21:43] Speaker 9: those worries about AI, some of what you were talking
[21:45] Speaker 9: about earlier, Scarlett, pacing the frontier, that has definitely had
[21:49] Speaker 9: an effect here as well. And waiting to see where
[21:51] Speaker 9: things go from here.
[21:52] Speaker 8: Is this just purely an AI effect? I mean, are
[21:55] Speaker 8: there other things at work? Or if there is some
[21:58] Speaker 8: change in the fortunes of AI, do you think this,
[22:02] Speaker 8: I mean, how much is this going to affect your index?
[22:05] Speaker 9: It's easy to see AI in a lot of places,
[22:07] Speaker 9: I have to say. On the equity side, also internationally
[22:09] Speaker 9: as well. We've had some really fun stories. There are
[22:11] Speaker 9: a number of these companies that sort of out of
[22:13] Speaker 9: nowhere have emerged as AI plays. There's one that we
[22:16] Speaker 9: profiled a few weeks ago. Ling Sun-Chi is the name.
[22:20] Speaker 9: Kingslide is a Taiwanese company. They got their start in
[22:22] Speaker 9: the furniture business in the 80s, making sliders for drawers
[22:25] Speaker 9: and cabinets.
[22:26] Speaker 1: Oh, and they're, yeah, making stuff for data centers.
[22:27] Speaker 4: Exactly.
[22:28] Speaker 9: All of a sudden, these are a huge component for
[22:29] Speaker 9: data centers.
[22:30] Speaker 5: Oh, interesting.
[22:30] Speaker 9: The founder joined the index a couple months ago, worth
[22:33] Speaker 9: nearly $ 10 billion. And, you know, it's just, it's, you know,
[22:36] Speaker 9: it's like you're seeing these pop out of nowhere all
[22:38] Speaker 9: the time.
[22:38] Speaker 1: They're like in the picks and shovels business, right? Exactly, exactly.
[22:41] Speaker 9: And they've really kind of come out.
[22:42] Speaker 2: Of nowhere with this. All right.
[22:43] Speaker 3: Ling Tung-Chi, founder of Kingslide, emerged with a $ 9. 5 billion
[22:48] Speaker 3: fortune this year, four decades after starting the company. What
[22:51] Speaker 3: surprised you the most when you looked at all the numbers,
[22:53] Speaker 3: when you were compiling everything? And I mean, I think
[22:55] Speaker 3: you come into it knowing that AI drove a lot
[22:58] Speaker 3: of this, the wealthiest tech billionaires got even wealthier. But
[23:02] Speaker 3: was there something that even as you were looking at it,
[23:05] Speaker 3: you said, oh my gosh, I didn't realize that?
[23:07] Speaker 9: Yeah, I think the one thing that me and the
[23:09] Speaker 9: rest of the global team that's been working on this
[23:11] Speaker 9: and continues to work on it every day has been
[23:12] Speaker 9: thinking about is just the growth in private wealth as well. Obviously,
[23:15] Speaker 9: near the top, so many of these games are from equities,
[23:17] Speaker 9: especially in the US. But as we've seen with some
[23:19] Speaker 9: of these AI labs, these frontier labs, private companies, the
[23:22] Speaker 9: valuations are soaring so much that we are seeing some
[23:24] Speaker 9: people with holdings and private companies joining the list. And also,
[23:28] Speaker 9: just structurally, that presents some really interesting issues around having
[23:31] Speaker 9: your wealth tied up in illiquid private stock that's not
[23:34] Speaker 9: publicly traded and As we've seen some of the backlash
[23:36] Speaker 9: to this in California next month, there's this wealth tax
[23:39] Speaker 9: that's going to be on the ballot. We've seen similar
[23:40] Speaker 9: proposals in other states. That creates some complicated questions around
[23:43] Speaker 9: for folks like this who have their money tied up
[23:45] Speaker 9: in private companies, how are you able to drum up
[23:47] Speaker 9: liquidity and monetize that in a way that is playing
[23:51] Speaker 9: out from the taxation perspective and then also just in
[23:53] Speaker 9: terms of how these people are deploying and utilizing their
[23:56] Speaker 9: fortunes more broadly in politics and business across the board.
[23:59] Speaker 8: I know that everybody's got their feelings about this, but
[24:03] Speaker 8: for the economy, is it a good thing to have
[24:06] Speaker 8: wealth so concentrated? Is it a bad thing? Also, people
[24:09] Speaker 8: can create a lot of jobs and things like that.
[24:11] Speaker 8: How do you see it in terms of the economy,
[24:13] Speaker 8: to have to have these people like earning so much money?
[24:17] Speaker 9: Yeah, that is a great question and definitely, uh, an
[24:19] Speaker 9: ongoing debate for sure. I mean, even from the tax perspective,
[24:22] Speaker 9: we had a story out this morning from one of
[24:24] Speaker 9: our wealth reporters in the UK, just looking at, um,
[24:27] Speaker 9: sort of the mobility angle here, especially in the UK,
[24:29] Speaker 9: that's been a really big discussion over the past months
[24:32] Speaker 9: and years, um, this, uh, non-dom agreement that they had
[24:34] Speaker 9: set up. And just the fact that, you know, for
[24:36] Speaker 9: wealthy people, again, like you're saying, who contribute to the
[24:37] Speaker 9: tax base, um, These people are very mobile and it's
[24:40] Speaker 9: easy to move around the world and that can be
[24:42] Speaker 9: pulled away almost as soon as anyone decides to move
[24:46] Speaker 9: just like that. So yeah, structurally, there are definitely some
[24:49] Speaker 9: challenges in terms of how to, from a governmental perspective,
[24:53] Speaker 9: how to leverage that. But it's a debate that's ongoing
[24:56] Speaker 9: and strong opinions on all sides.
[24:58] Speaker 5: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
[25:03] Speaker 5: and anywhere else you get your podcasts. Listen live each weekday,
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