The Prof G Pod with Scott Galloway - Conversation with Ian Bremmer — Ukraine’s Counteroffensive, US-China Relations, and AI’s Geopolitical Influence

Episode Date: September 28, 2023

​​Ian Bremmer, the president and founder of Eurasia Group and GZERO Media, joins Scott to discuss an update on Ukraine’s counteroffensive, where the US-China relationship stands, and how AI is influencing the geopolitical landscape. Follow Ian on Twitter (X), @ianbremmer.  Scott opens by discussing the end of the Writers Strike, specifically its repercussions, and how it isn’t a victory.  Algebra of Happiness: have the confidence to be affectionate. PS: The Prof G Pod has been nominated for a Signal Award for best Money & Finance pod. Vote for The Dawg here. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 269. 269 is the area code serving southwestern michigan in 1969 american astronaut neil armstrong became the first person to walk on the moon during the apollo 11 mission and the first boeing 747 jumbo jet took off from a boeing field in everett washington and flew to new york city true story on the way back from new york the flight attendant asked me if i would like some headphones and i told him why yes thank. And how did you know my name was Phones? Go, go, go! Welcome to the 269th episode of the Prop G Pod. In today's episode, we speak with Ian Bremmer, the president and founder of Eurasia Group and GZERO Media. He's been on the show more than any other guest, clocking in at eight times.

I relate to Ian, except for the fact that Ian's like a Doogie Howser. He ended up at Tulane when he was 14. Can you believe that? I think that's strange. Yeah, Ian, I've gotten to know Ian. He's actually a fairly balanced, thoughtful, like, strikes me as a well-adjusted guy, which probably means, I don't know, there's some freaky shit going on in the Bremer household when I'm not around, probably. But from all appearances, he seems like a pretty balanced, nice man. Anyways, before we get to the news, in case you haven't heard, I know this is big news, the Signal Awards have nominated the Prof G Pod for the Best Business and Finance Podcast. The Signal Awards are a podcast-focused spinoff of the Webby's. So first off, thanks for the American or the Hollywood Foreign Press. I did not know the Signal Awards were part of the Webby's, but this is very exciting. These awards mean a lot to us. Is that true? Do they mean a lot to us?

Yeah, they're validation. They're really nice. And we're up against Barron's and the FT. That's right. Barron's, FT, da dog. One of these things is not like the other. So a quick request. It's all about fan-based voting. Voting is open until Thursday, October 5th, and we very much appreciate your vote. We put a lot of work into this, and it's super exciting, and I don't know what else to say other than thank you very much and appreciate you tuning in. Anyway, enough of that shit. Let's move on. What should we talk about? I know. The writer's strike, which has been going on for the past six months, appears to finally be coming to an end. Over the past weekend, the WGA and the studios have reached a deal that allegedly meets the demands of, you better come back with something exceptional. So we'll see. As a reminder, the writers have been on strike in hopes of gaining greater pay or higher pay, more royalties, better working conditions, and protections against AI. All

seems pretty reasonable. A vote on the proposed three-year contract is expected to happen while we're recording. But regardless if the strike is officially over or not, I have some thoughts. So first off, just do the math. It's a three-year deal. And if people were out of work for the better part of six months, if you took their compensation to zero for six months in order to gain better conditions over a three-year contract, then if you didn't in fact negotiate at least a 12.5% bump in pay, then they've lost money because you took their compensation to zero for six months. A Cal State Northridge professor estimated that the strike cost California economy $3 billion. At the end of August, California's treasurer wrote a letter to the studio exec saying,

your failure to come to an agreement is threatening the industry's ability to ensure that writing, acting, and other positions are viewed as sustainable careers in California. The actors, SAG-AFTRA, are still on strike. Late night and daytime talk shows can resume production once the Guild allows its writers to return to work. However, as the actors are still on strike, scripted stories will not return until a deal between SAG-AFTRA and the studios is met. In sum, I mean, there's just some crazy shit that's gone on here. I think the first mistake that the studios made was the studio sans Netflix was believing that Netflix had a mutually vested interest or the same the same concerns or the same economic dynamics as what we'll call the linear guys. And that is the Disney's, the Viacom's, the Time Warners of the world. When you don't have fresh content, linear no longer becomes linear. It becomes a wall. It

becomes a line that stops. Whereas the streamers have a ton of content bank because they've had so much cheap capital that if you're on Netflix, you don't notice any difference between Netflix six months ago and today. Whereas I believe if you're on, not that I watch any of these things, ABC, NBC, CBS, and you want to watch Sheldon or God Christ, I don't know what people are watching now on broadcast television. I used to, last thing I watched on broadcast television, I used to watch Modern Family every week. But when that comes, when that just stops, or you're used to turning into Jimmy Kimmel or Fallon or Stephen Colbert and all of a sudden it just stops, you notice it. And they have less negotiating power in terms of carriage with cable companies and they begin to lose money right away. Meanwhile, meanwhile, over at Netflix,

they in fact were increasing their subscribers. Nobody noticed. And they have a massive content machine outside of the U.S. I believe they have 10,000 people working in Madrid. Think about that. So stop, stop, it hurts so good. We continue to increase our subscriber base. Oh, and this multilateral enforced pause on spending means our cash hoard grows, so we can announce a stock buyback.

So what's the net effect here? Let's talk about the linear guys. Since the writer's strike began, Walt Disney's off about 15%. You want to talk about a shit-kicking Viacom has lost 45%. It's almost shed half its value. Warner Brothers Discovery. I never get the fucking name right. Let's just call the whole thing HBO. Anyways, HBO is off, I believe, about 12 or 13 percent. And then let's talk about Netflix, which is up around 20 percent. So you have. Oh, and let's talk about the other content makers, Apple, Amazon and Comcast. They're up. Apple's up 11 percent. Amazon's up 34 percent and Comcast is up 23 percent. So what is the primary enduring impact of the rider strike?

They have substantially weakened the linear guys, which were a key component of the demand side for their business. I think they struck at the wrong time. And I think they're essentially kind of, they haven't killed the golden goose, but they've definitely clipped its wings. These companies were deeply impaired. What's the biggest learning here? What's the biggest learning? The biggest learning is that they're trying to squeeze the wrong fruit here. I don't want to squeeze blood from the wrong rock. In some, in some. And this stat just blows me away. Microsoft, and one day when they announced integration of AI into their office suite of products, increased their market cap by $170 billion.

They added the value of the entire linear industry with the exception of Disney. Or you could just say they added the value of Disney, right? So when you're trying to figure out which lemon to squeeze, you want to go through the supply chain and say, where are we adding value? And just as importantly, not only where are we adding value, but where are we adding value that's creating economic value for another party? So we're trying to go after the linear guys who are all combating the same thing. because he's coming into his mating years and he'll buy stupid things like tennis shoes or want a car that's cool, or he'll want a pair, you know, he'll want the right pair of sunglasses, or he'll be willing to pay money on high margin coffee or quick service restaurants, or he was one of the few people that still goes to the movies and maybe even sees them two or three times. Advertisers love this irrational organism that basically fuels all of ad-supported television called a 17-year-old male. And that 17-year-old male is no longer watching linear television.

So if you want to be angry at something, you can get mad at Bob Iger for wearing cashmere and making a shit ton of money. But the real person you should be angry at is a 17-year-old that's decided, you know what? Instead of watching Jimmy Kimmel or instead of watching Jimmy Kimmel or instead of watching The Witcher or whatever, I'm going to watch TikTok all goddamn day long. Why? Because it's free. The ads are really elegant or sort of targeted, so I don't mind them as much. And there is a talent pool, the depth of the Mariana Trench, who doesn't demand anything and it is not unionized. I think that especially the late night talk shows are never going to recover. I think they will take a structural step down in terms of viewership and people that likely over the last six months adopted new habits and incorporated new substitutes

into their lives, whether it was going into that content bank of streaming. I couldn't even, I'm on season three of The Handmaid's Tale, which I think is just an incredible program. And I found out there's like five or six seasons. I mean, how many cruel things can they do to the Gilmore girl? Anyways, they had very little leverage. They miscalculated, and they should be going after, where do we move forward from here? Distinct of what you think about labor or unions. By the way, I get a lot of shit online for being anti-labor. I am very much pro-labor. I just don't think unions are the right construct to advance the needs and the, I don't know, the very warranted and deserved dignity that all labor deserves. Anyways, enough of that, enough of me being defensive. What have we learned here? What's

the big learning? All of them, now that they've come to some sort of agreement, should get on the same side of the table and then put Cook, Nadella, Kachai, Altman on the other side and say, just exactly whose content are you crawling? When I type in, please write a script for a show in the voice of Modern Family, and you can do that, and it comes back with something reasonable. What exactly, what content are they, in fact, crawling? What is the coal going into the furnace here that is powering a multi-trillion dollar train? You got to go where the money is, guys. Why did so many people move to Dubai over the last 20 years? Because that's where the money was. And guess what they're doing now? They're moving to Riyadh. Because guess what?

Spoiler alert. That's where the money is. So you got to go to the biggest pile of money and stand as close to it as possible, i.e. start striking and putting pressure on them. And they have a real valid case here. The NASDAQ had its best first half in the last 40 years. In the last 40 years, it's up 17%. 70% of those gains are attributed to just seven companies. And what do those seven companies all have in common? Microsoft, NVIDIA, Netflix, Meta. What do they all have in common? AI. AI is at the center of it.

AI is at the center of crawling content and then adding value to it and then charging people, whether it's enterprise or consumers, a subscription fee, and the whole market is going bad shit, ape shit, champagne and cocaine, crazy the whole market is going batshit, apeshit, champagne and cocaine crazy for these things. So guess what? If you want to find a lemon to squeeze juice from,

start squeezing Microsoft's nuts and saying, we're going to start filing suits against you because we have our own AI that has figured out that you are crawling the shit out of our IP and you are not paying for it. You are not compensating us. Instead of going after Disney, come on, folks, go move to Riyadh. Go where the money is. It's AI and it's like, notice how quiet they've been. Notice how they haven't said anything. Also, also, word to unions, if you really wanted to try and make a splash and bring your workers more money, go after, go to where the money is. Go after tech. And in the automobile industry, for God's sakes, go after the one company that's worth more than the rest of the auto industry combined. Simple, folks. Simple focus. Move to where the fucking Benjamins are. What should you do? What should we do? What should unions do? What should labor do? What should the UAW do? Simple. Move to Riyadh. We'll be right back for our conversation with Ian Bremmer.

The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for?

What tools are right for you? And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So, tune into AI Basics, How and When to Use AI. Welcome back. Here's our conversation with Ian Bremmer, the president and founder of Eurasia Group and GZERO Media. Ian, where does this podcast find you? I'm on the West Coast, San Francisco. What are you doing in the Bay Area? A bunch of meetings. I was in New York for all that United Nations excitement last week, the whole world coming to us, which is always nice. And then I got out of Dodge. So all that excitement is somewhat

relative, but nonetheless, we'll talk about the United Nations General Assembly that just took place in New York. You attended and wrote in your newsletter that the mood was bleak, though not defeatist. You also wrote that if the world had a CEO, they'd be fired. Tell us more about your observations. Well, that seems pretty clear, right? I mean, I wrote about that specifically playing off what they call these sustainable development goals, SDGs, these 17 metrics that the United Nations has spent a lot of time working on that basically define together the state of human development. So education and poverty and, you know, hunger. In other words, kind of good that the world comes together and figures out

what do we want to see to ensure that the eight billion people on the planet over time are actually doing better it kind of makes sense right you sort of want someone defining that and uh you know we're at the halfway mark of these sdgs that are supposed to hit their goals by 2030 um about uh only only 30% of them are remotely on track. And a lot of them are doing worse than they were when we started the process. So, I mean, just by self-definition of the metrics that the UN is saying and the world underneath the umbrella of the UN is saying, here's how we want to be judged. Here are our shareholder returns, if you will. But for the people in the governance on the planet, we're kind of failing. And so, yeah, I think we'd probably mix it up and change leadership.

But of course, the world doesn't have a CEO. And that is part of the reason why we are facing the challenges that we have. So I've always talked about, you know, when I read, I forget his name, Thomas Pinkman or Stephen Pinkman, the Harvard, yeah, Pinker, the Harvard guy that basically says we have a defeatist mentality and the cadence of the news cycle creates a negative outlook on the world. And if you look at abject poverty, if you look at more democracies versus autocracies, what stood out in terms of the specific metrics that we're not making progress against? Well, first of all, Stephen admitted to me that he has an intrinsic bias towards upside, which is great, but not analytically useful. I mean, I think it makes him a happier person, so I'm not opposed to it. But if we're if we're trying to just have a conversation saying, where do we think we're heading? You've got to take Pinker with a few grains of salt. And I give him credit for being willing to admit it. But still, it's a challenge. I would say there are a couple of things that I would focus on.

First, the proximate that in the last three years, the combination of pandemic and the Russia war, you know, Russia war, Ukraine, how many people care about Ukraine? Not all that many. How many people are affected by the food and fertilizer and supply chain disruptions as a consequence of Ukraine? And a lot like Ukraine matters a lot more than any conflict in sub-Saharan Africa, any conflict

in South or Southeast Asia to the poorest people in the world. Ukraine matters more to them because it's having such an impact. So first of all, you take those two things, pandemic, massively disruptive, and Russia-Ukraine war, massively disruptive for global supply chain economy. And that by itself has reversed the trajectory of what had been 50 years of unprecedented progress in human development. Basically, we got five years of regression in the last three. that we are increasingly facing the pushback from climate change and from the knock-on effects of climate change, which are expensive and disproportionately impact the poorest, disproportionately impact those that have not had the chance to industrialize and carbon emit, but they're the ones facing the most extreme temperature swings. They're the ones that

are starving. They're the ones that are flooded out. They're the ones that are forced to move from their homes in largest numbers. So I would say those are the two biggest structural causes. And then you have just inadequate institutional response for big reasons. One, because the Chinese are so much more powerful, but are not trusted by the U.S. and American allies. So that creates a lot of conflict and inefficiency. And then also the fact that a lot of Western institutions, especially those in the United States, increasingly are seen as unrepresentative and illegitimate. And so our leaders are focusing much more inward. There's much more populism. There's much more anti-establishment sentiment, but certainly much less willingness to act like global sheriff, architect of global trade, cheerleader of common global values.

So I think if you were to put those things together and I've got my geopolitics hat on, an economist would answer that question somewhat differently, but would still be talking about the same basic elephant. That's why things are now actually getting worse, that Pinker had been right for 50 years. Pinker is much less right today. So I'll put forward a thesis and you tell me where I have this right or wrong. And that is the world is becoming more prosperous. Global GDP growth, while it's slow, is still positive. And the biggest nations, you know, China's no longer growing 8 percent. I don't know if it's slow, is still positive. And the biggest nations, China's no longer growing 8%.

I don't know if it's 3%, 0%. The US, while unremarkable, the growth has been steady and consistent. Markets are up in the US. We have a lot of prosperity. The majority of that prosperity is crowded in the top 1%. And the things that really ail us, polarization, climate change, food and energy and supply chain interruptions, quite frankly, don't impact the 1%. And that the life is so nice, the ability of the 1% to sequester themselves from what are the biggest problems facing us. In addition, these problems are like creeping takeovers. They're not going to end the

world in the next three years. It might be probably not even the next 30, but definitely possibly the next 50 or 100. And then when you couple the ability of the people who are in charge, who tend to be the wealthiest, who have recognized unbelievable prosperity and can shelter themselves and ring fence all of these problems, that the people who are in charge have never done better. And so the motivation or the impetus to address these challenges just doesn't affect the people who would be responsible for catalyzing a change. That was a bit of a word salad, but you get where I'm going. Yeah, absolutely. Joel, I think you're right on that. I think you're absolutely right on that. I think you're I think you're absolutely right on that, Scott. I think it first of all, what I like about the analysis is it's always it feels better when the analysis actually matches with some level of empathy. I think the response to that is interesting. I mean,

there's a lot of people whose view is we want to burn it down as a consequence. And why is Biden and Trump both going, why are they both going to Michigan right now? And it's because they want to paint themselves as being the champions of precisely those people, those people. Yeah, exactly. And and for different reasons, you know, both are inappropriate to be embraced by them, but both have arguments that will resonate and will land. I think it's interesting that so much of populism today is about politicians trying to find issues that don't address inequality, but will allow them to continue to promote themselves, their buddies and their network elites. So, I mean, you know, let's not talk about class warfare. Let's talk about identity politics because you know that'll get people all ginned up but won't won't force us to pay taxes right um i think there's a lot of that and

certainly in the united states where um we have a level of economic collapse for the lowest classes, the lower middle classes for the last 40 years, minimum. We have, I mean, stagnation, which feels like collapse to them, I should say. I mean, these are not poor people in the global scheme of things at all and made much worse by the inflation levels that we see right now. And those inflation levels have come down, but that doesn't mean prices are going down. That just means they aren't going up as fast as they were last year. So it's not like the people that are still making 15 or 20 or 25 bucks an hour suddenly feel like they can pay for stuff. Absolutely not.

And you see that in the poll numbers. Then you have the United States as you know, the, the, the country that most lionizes entrepreneurs, individualists, people that build things themselves, which is fantastic for your and my personal background and trajectory, but also means the families eroding, the churches eroding, community groups eroding, So many of the places that allowed people to feel like they were part of the fabric of something that would look out for them, take care of them, engage with them. Those things increasingly don't exist. Instead, you're intermediated through your phone. And then finally, of course, the role of a much more polarized and fragmented media space and now social media space and now algorithmic AI space.

I think if you layer those three things on top of each other, I'm not going to suggest what percentage each have in terms of responsibility for this new malaise that so many Americans are feeling and this anger that so many Americans are expressing. And it's not just white undereducated men. I mean, it's much broader than that. I think that you you really do engulf the problem. And and the fact that this has been growing for decades means that even if you start to fix it, it's not going to get fixed in one electoral cycle. I don't care who you elect. So let's do a whirlwind. Let's go around the world. So give us your thoughts in terms of the situation and how it's evolved or devolved

in Ukraine since the last time we spoke. Well, the counteroffensive, the Ukrainian counteroffensive has gone at best marginally well for the Ukrainians. And Zelensky, who was just in the United States and Canada a week ago, probably had his most difficult foreign trip since the war started. That was his coldest reception. Yeah, well, you saw that McCarthy was not willing to grant him a joint appearance of Congress, was not willing to have the Biden administration do a full briefing for the House the way they had for the Senate. I think McCarthy was doing Zelensky a favor. Honestly, I think that if he had done either of those things,

there would have been many more headlines from a skeptical right wing of the GOP party yelling and screaming that we shouldn't be spending this money anymore. I don't think he was undermining Zelensky at all. I just think he's in a very difficult position. But that difficulty is going to grow. Zelensky was told by the White House that you cannot count on military support for a second counteroffensive next year, which means that increasingly the land that Ukraine has is kind of the land they have for the foreseeable future, like their ability to retake everything that Russia has taken. And they have every right to do so, every every right to want to do so.

But it doesn't look like they're going to have the capacity. So that's one very serious problem for Zelensky and for NATO. At the same time, we see that Ukraine is increasingly engaging in drone and missile strikes, you know, not just on the front lines, but into Crimea, into Sevastopol, where the Black Sea fleet is based, into their headquarters, into Moscow, into Russia proper. You know, they're putting what will soon be over a billion dollars into their drone industry. They're going to become one of the top drone producers in the world, they will not be restrained by NATO and how and where they use those drones. And that is bringing the war increasingly to Russia itself. Now, the Ukrainians

thus far are striking almost uniquely military targets. The Russians thus far are striking mostly infrastructure, civilian infrastructure and civilians indiscriminately, but no guarantees that's going to continue. And I guess what I'm saying is none of this looks particularly sustainable. I mean, you look at the last six months and the front lines in the war are where they've been. The Russians have 18 percent of Ukrainian territory. That's more or less been true for six months. But the nature of the war and the context is actually changing quite a bit. So where, if you had to, and recognizing nobody knows, but if you were forced to guess or speculate, what does the conflict look like in 12

or 24 months from now? What would you posit? Well, let's, so you said, given the fact that I don't know, so let's look at, I agree with you, I don't know. So let's look at I agree with you. I don't know. But let's at least look at why I don't know. One of the biggest reasons why I don't know is because I don't know who the American president is going to be. And the United States, the United States has been providing a strong majority of all the military support, training and intelligence that the

Ukrainians have. If Trump becomes president, leaving aside the fact that he has promised that he will end the war within his first 24 hours, which seems long for Trump, but nonetheless, leave that aside. The policy on Russia, Ukraine and the support for Ukraine will change almost 180 degrees overnight. That's really interesting because a lot of people I mean, I've I've spoken last week. I spoke with at least six European leaders like presidents, prime ministers of their countries, and they were all increasingly and very seriously focused and concerned about that issue. And what's interesting is it's making them feel if the window is closing on potential support from Ukraine, from the U.S., and they know that they're not going to be able to

make up the gap. Like, I mean, if the U.S. goes away, the Europeans aren't going to be able to suddenly continue to provide that military support. So their view increasingly, not the Germans, but the rest of the Europeans I've talked to pretty much, the French, the U.K., the Poles, the Nordics, the Balts. Their view is that you've got to bring Ukraine fully into NATO before that happens. Now, right now, Biden and the Germans don't support that, worry that it's too confrontational, it pushes the Russians too hard, though they're less worried about that

given how Russian bluster hasn't played out over the past months, too concerned the Ukrainians can't be trusted. I mean, lots of issues there, but that is now becoming a much more active dynamic in the intra-NATO conversations. Again, there's a big danger here, Scott. I think one of the things that we can fairly say, looking 12, 24 months out, I think if we look back, we are likely to say that where we are right now is peak NATO. It's peak transatlanticism.

It's incredible coordination between the U.S., all the Europeans, and the Ukrainians. It's going to be increasingly very challenging to maintain that. How would you describe our relationship with China? Is it getting cooler? Is it thawing? I would say that it is poor. It lacks trust. It has the the speed of its decline has diminished. And I mean, so like for the media companies in the U.S., that sounds like the new up. Your rate of decline has reduced, right? I guess that's positive. It is clear that Xi Jinping and Biden are now putting a lot of work into a bilateral summit that will occur only a few miles from where I am right now in San Francisco in November. By the way, historically, when you look at U.S.-China summit meetings, the most stable time in the relationship is not after the summit. It's before the summit. It's right now. It's when

both sides are preparing for the summit. So they're spending all of this time making sure nothing goes wrong, talking about, you know, what they can announce, how they can gauge, what are the things that will be fruitful, what they can talk about. Right. So the next two months of U.S.-China relations, I would suggest, are likely to be among the most stable that we've had. And then after the summit's over, you'll get a honeymoon effect for a few weeks. It ain't going to last very long. It'll be like the next time that Congress, you know, sort of lobs, lobs a piece of legislation. The next time someone big goes to Taiwan, the Taiwanese elections are January 13th, certainly assuming that the vice president, the national vice president wins, that's going to be more problematic. So, you know,

it's a poor relationship, but both leaders right now are trying to stabilize it and they're having some level of success. The biggest announcements in the last few weeks have been these new bilateral channels for engagement through the State Department, through Commerce, and most recently through Treasury. Nothing that's going to knock your socks off, Scott, nothing that's going to make big headlines, but does help to normalize the high-level engagement between the governments. I was asked to mediate or help unwind a business from two owners. And I looked at the business and got to understand it. And my conclusion was I sat him down and said, figure it out and make up. There's just no way to unwind this business

without you both losing 90% of everything. And so figure it out. And I feel that that is somewhat analogous to the relationship between China and the U.S., and that is the biggest tax increase or tax cut is a function of the U.S. and China not getting along or getting along. It seems to me that they have such a mutual interest in trying to figure out not great relations, but at least good relations. What do you think the real soft tissue here, the issues that separate the two from what feels like a real vested mutual interest? Well, one is that the level of mutuality has been eroding for a few reasons. One is that China, when the Americans were bringing the Chinese into the World Trade Organization and

opening that market, China had just an unprecedented amount of hardworking, inexpensive labor. That labor is now more expensive than Mexico. It is highly competitive, and local Chinese firms are fighting for it, and they don't have rule of law. So China as the factory for the world is increasingly not a useful analogy. A lot of companies want China to be the factory for Chinese consumption, Chinese demand. China for China is what that's being called. But it's a very different model than what was driving China in globalization. There's this term of art that you hear everyone talk about, the Europeans, von der Leyen,

Biden, others de-risking. Well, this is a de-risking that makes the interdependence between the two countries less, less deep, less all encompassing. Then you have the fact that some of the American companies that are driving the, the, the indices your, your metas, your Googles, your Microsofts have either no or virtually no access to the Chinese market. China doesn't let them in. And so, you know, the Americans say, well, we might not let TikTok and the teenagers go crazy. I don't think TikTok is a national security concern, personally, at least no more than I think that having kids on Facebook or Instagram is a national security concern. They both are. But but if the Chinese aren't going to let American companies in, why why should we let Chinese social media companies

in? I mean, because we want to do more damage to our own children like that doesn't seem fair. So there's that. And and there's also just this, you know, the fact that the Chinese economy right now is seriously and structurally underperforming on the back of over two years where no one traveled to China. And so a lot of companies, the U.S., the AmCham in China just did a survey of all of the corporates there, and only 50% said that they might be interested in investing more in the next five years. That's the lowest response on record from the Americans. The Europeans are a little bit more optimistic, but not radically more optimistic. China's now, they say they're growing at 4% to 5%.

In reality, it's a lot lower than that. The real estate sector is really sucking wind and could implode at any moment. Lots of unsustainable corporate debt, demographics really challenging. And the Chinese are focusing more on China. They've made it hard for a lot of foreign companies. You see this Nomura exec that has just been detained, is kept in China.

You've seen investigations into American companies, European companies suddenly getting raided. I mean, all of these things together. I still am a firm believer in everything that you said, that the U.S. and China have far more reasons to get along than not. That the only thing worse for America than China succeeding is China imploding. China imploding would be very bad for the global economy, very bad for the United States, very bad for American consumers. We don't want that. But the level of interdependence is not what it was 10 years ago. And it's trending faster in that direction. We'll be right back. you may need Indeed. Indeed is a matching and hiring platform with over 350 million global

monthly visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. Listeners of this show can get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash podcast. Just go to indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Support for this podcast comes from Klaviyo. You know that feeling when your favorite brand really gets you?

Deliver that feeling to your customers every time. Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM. Before we talk about AI, I just want to get your take on the political situation and the state of affairs in the U.S. Any thoughts on, I mean, since we last talked, it just seems we're starting to normalize the notion that Trump's going to be the nominee and that he could be president again, which just seems almost unbelievable to me. What are your thoughts?

Well, it would be unbelievable if it hadn't already happened once. You know, once it already happens once, you kind of think it can happen again, right? I mean, you know, those people are- It's one thing to elect a talk show host. It's another thing to elect a talk show host who's also an insurrectionist. I mean, this really has taken it up a notch. I mean, I would argue that what was being elected was a grievance based campaign, incredibly hostile to all of the enemies of these people, incredibly hostile to the establishment, irrespective of the fact that he's part of it and has profited from it and all that stuff. But I mean, the fact is that he was driving them crazy. The mainstream media, increasingly like the university professors, the doctors, the scientists, all these people.

Trump is the one that's going to stick the middle finger to those people. And the fact that, you know, he's now been impeached twice, acquitted twice, 91 indictments. And by the way, if they don't vote him in, if his if his party faithful don't vote him in, he could face jail time. So look what look what he's willing to do. Look what he's willing to go through just to stick it to the man. Right. And, you know, I mean, if that's why he was voted in the first time, he's only given all those people far more reasons to vote from a second time. So very clearly, I think we all should be betting on him being the nominee. Can he can he win as president? I don't know. I mean, I don't know if it's 50 percent likely or 30 percent likely, but it ain't 10 percent. Not against

Biden, where, you know, a strong majority of the entire population believes that he's too old to run. And, you know, he's not doing well on immigration now at all, which is a serious issue that affects every American. I mean, even the New York mayor was taking, you know, pot shots at the president, not exactly a red bastion, you know, uh, on that front. Um, and on the economy, while I'm sympathetic to the fact that the economy is doing considerably better than that of other advanced industrial economies coming out of the pandemic and the Russia war. So, I mean, you know, if you were looking at Germany, France, the UK, Japan, Canada, I mean, you bet on the United States. So you have to say the U.S. is doing something right from a policy perspective. But a lot of Americans are hurting. And I do put stock in the fact that the average American in

that context is going to blame the incumbent, not that they think that Trump has done anything right, but that they're more willing to stick a finger to whoever's in charge. And so, you know, if that persists, and one thing I can predict pretty strongly is that in 14 months, Biden will be 14 months older. So that, right, so that dynamic is not getting better. And I mean, you saw the New Yorker cover coming out. But look, you know, the four aged. The cognitive decline is not linear. I mean, it gets, it starts starts it starts to decline faster and faster. Let me ask you this. Do you think that do you think there's a chance the Democrats might if there's an incident, he falls or he is popularity continues to wane? Do you think there's a chance or is it too late that the Democrats prop up someone else? Well, first of all, I think there is no plan B.

Right now, there is no plan B. So there's no one around Biden that is saying, okay, if something happens, who are we going to go for? In part because the person that is obvious they would go for is not electable, is the vice president. And maybe that's fair, maybe that's not fair, but it is a reality that is accepted in Biden land. So right now, there is no such conversation happening. Biden is

absolutely running. But the McConnell episodes have now made this much more front and present for the American public and people calling for McConnell to step down. McConnell's doing the Republicans a great service in continuing to govern in his incapacity because it just makes the age issue of Biden more salient. It's so funny you said that. I thought that if they were really Machiavellian, they would have McConnell freeze every other week. No question.

Right? That's exactly what you do. Just keep the issue of age front and center. Yep. I mean, I don't think that's what's actually happening. Yeah, no, I don't think it's faking it. It looks pretty authentic. Although, I mean, you know, let's be clear.

I mean, we could probably get this to trend on X. I mean, I don't know. Are you back on, by the way? I'm almost 90 days Twitter sober. I've just decided I'm not going to paint this guy's fucking fans. I understand that. But are you have, this is how you get back on. I didn't do it. Anyways, let's talk about AI. In your article with Mustafa Suleiman for Foreign Affairs, you wrote, open quote, whether they admit it or not, AI's creators are themselves geopolitical actors and their sovereignty over AI further entrenches the emerging technopolar order, one in which technology companies wield the kind of power in their domains once reserved for nation states.

Let's unpack this. How do you think AI will influence geopolitics? Well, you know, when you started talking to me about Russia, Ukraine, and China, I mean, you know, we think we're having a conversation about the future of the world. And of course, that means we're talking about governments and political leaders that are elected or that are dictators. And we kind of understand that. And that's been the framework for our entire lives. Increasingly, if we're talking about anything that affects the digital world and what the digital world touches and can affect, which includes our behavior, our spending, big pieces of the global economy

and big pieces of national security, we're not talking about countries anymore. We're talking about companies and we're talking about individuals. So in other words, the future, we talked, there's going to be a China century or there's Pax Americana, it's a G2, it's a multipolar world.

No, we're not. A technopolar world is that part of the world, the digital order that is run by technology companies and individuals that act as sovereigns, that Elon decides whether or not the Ukrainians have the ability to fight in certain places because he does or does not turn on or off Starlink for those soldiers, that Microsoft decides whether they are providing cyber defenses and securities for countries, not just companies and individuals that are attacked, that AI companies will decide what AI can do, who can use it, how they can use it, how they're platformed, what their political orientation will or will not be. These things are all completely different than how we think about geopolitics. And if you believe, as I do, and as my friend and co-author Mustafa Suleiman does, if you believe that AI is going to transform the way all of us behave on this planet,

the fact that governments have so far almost zero say in that, almost none of the resources, almost none of the understanding, that implies that we need to start thinking of these technology companies as geopolitical actors. So I would push back in the sense that, you know, as much that we get wrong at a government level, whether it's the FBI or NATO or our security apparatus or our defense department, the vast majority of the people in there, they're serving as fiduciaries for the Constitution and American citizens. And I don't like the idea of normalizing that Elon Musk and Satya Nadella and Sam Altman get a seat at the table because they have invented these incredible technologies. I like the idea of passing laws that say, if your technologies end up

having an impact and domain over battlefield technologies, congratulations, well done. We now get to make those decisions. And if you don't give us real-time information such that we can make those decisions, we're going to start putting people in jail. I would go the other way. Your thoughts? Well, first of all- Is that naive? No, not naive at all. I share your views. And certainly with the Starlink case, you've now seen that Elon is developing a new technology that he's going to give to the US government and the Chinese government presumably won't have it. The Russians won't have it. And NATO will make those decisions. So on that specific issue, your concerns, my

concerns are being addressed. And hopefully that will mean that the tech companies are not making those decisions of life and death. When we talk specifically about AI, I think that we are going, we are moving way too fast for governments to be able to do that principally. But I agree with you. I don't think the technology companies, they don't have the interest, they don't have the background, they don't think the technology companies, they don't have the interest, they don't have the background, they don't have the experience, nor are they accountable to make those decisions themselves. So what I'm suggesting is that they're going to have to do it together. And we see this already start happening in the United States approach. You saw that the White House invited those seven companies that are dominating the AI landscape to come in and say, OK, let's have some initial agreements on things like red teaming areas of potential malfeasance or breaking your models and sharing that information with the government and with each other.

Let's have, you know, watermarking on AI that ensures that people know what is and what is not an image, a sound, you know, whatever, a video generated by AI. The companies all agreed to do it. We don't yet have legislation for it. And they're working with the U.S. That strikes me as the kind of hybrid model that is more likely to succeed. For me, AI is becoming more like the global financial markets where we all know we need the financial markets. We also know that any market player that potentially can start a run can have knock-on cascading effects that can

bring the markets down. And therefore, we need macro prudential reform. We need to have organizations like the Bank of International Settlements. We need the Financial Stability Board that brings together all the financial players and the governments to make sure that if there's a crisis, if there's a crash, that we keep the system working. I think that's what we're going to need in AI, which means this is not a US versus China Cold War. Because the Americans and the Chinese aren't going to dominate AI the way they dominate, say, semiconductors, right, or the way they dominate, you know, 5G. AI is going to be systemic. It's going to be proliferated everywhere. Everyone's going to have access to it. And we're going to need it to work, to be available, but also not to destroy us.

And that's something that, frankly, I mean, you and I talked about how the Americans and Chinese need each other. This is an area in actually fascinatingly where we don't know it yet. We don't recognize it yet. But within five, 10 years, U.S. and China will fundamentally need each other on this issue. Ian Bremmer is the president and founder of Eurasia Group, the world's leading political risk research and consulting firm, and GZERO Media, a company dedicated to providing intelligent and engaging coverage of international affairs, author of numerous books. What's your most recent book, Ian? The Power of Crisis. The Power of Crisis. New York Times bestselling. Yeah. Go on. Well done. And most importantly, this marks his eighth appearance on the Property Pod. Most importantly. And I enjoy it every single time. It's always great to see you. Number eight. Number eight.

Great to see you, Ian. Thanks so much for your time. Yeah, my pleasure. Algebra of happiness, the power of touch and affection. I got a random email from a woman who owns this iconic restaurant in London called the River Cafe. Her name is Ruthie. I don't know her last name. And she said, I want to host. I listen to your podcast.

I love it. It's a it's rewarding. And Ruthie's open about this. She's a 75 year old woman. It's rewarding when someone outside of what I would consider my core demographic, young men, listens to the podcast and likes it. And so she said, I'd love to host you for lunch. So I said, sure, it sounds great.

Made a date, comes along. I forget, I was jet lagged. I was just feeling shitty. And I'm like, oh my God, I got to go all the way to the Thames River. And it's like a 40 minute drive for me. I'm like, oh, this is like the last thing I want to do and have lunch with this stranger.

And hauled my ass into an Uber, got down there. And first off, this woman is just a force of nature. I mean, she just, she's built this, probably one of the most iconic restaurants in London, if not the world. And she's done it, I don't think it's through cooking. I mean, the food was fantastic. I think it's just sheer warmth. Literally everyone in the world knows her from Bob Iger to Lorne Michaels, like every, um, I'm friendly with the CEO of Airbnb. And of course he was coming to stay with Ruthie when he's in town, he stays with Ruthie. Uh, so she has that kind of magnetism,

but that's not what this is about. About 30 minutes into the lunch, when we're talking, she just very naturally put her hand on top of mine for, you know, to kind of give me this sort of affirmation. And when she did that, it was a bit jarring to me. I thought, okay, it's a stranger holding my hand. And she continued to do it probably another half a dozen times throughout the lunch. And by the end of the lunch, I was thinking, this is so nice. It's so nice that another human has the capacity, the confidence, and just sort of the love for the species to touch other people. And I'm not used to that. And I'm trying to have that confidence, but I don't have that confidence. And I thought to myself, if I could give my kids anything, or I could give them a small number of things, I would want them to have the confidence and the love and to be mammals and have the confidence to be affectionate.

Because it just makes your day. It makes you feel better about yourself, makes you feel better about the species. And I thought, my God, what a gift. Like what were the right toys or the wrong toys? Or what was it about her life, her relationships, her parents that gave her that sort of quality that some stranger who hauled his ass down to a restaurant is just so sort of moved by the fact that this woman is holding my hand. I don't know how to bring this to a close other than to say for those of you who have the confidence and the love to hold people's hand, my God, keep on keeping on. Thank you. This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer.

And Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. Market Show. You must feel so fortunate to witness up close. I mean, you're literally, you're swimming in the tank with like the original Shamu. Like he's a little bit tortured, but oh my God, can he perform on command, right? He's a little bit angry. If a homeless person breaks into the park, falls into the tank, I'm going to rip off his genitals and drown him. And then there's going to be a documentary about me where they'll finally

stop doing to me, to other orchids, what they're doing to me. I mean, that's what's going on here. That's what's going on here. But what a thrill for you to be in the splash zone for the initial show of Shamu. And I mean, I'm the big, I'm one of those big fucking orcas with like its dorsal fin is like, it's like hanging over. It's so big.

It's so big and manly. It goes like this. It goes, whoa. And it's too big, right? Like an arc. Support for this show is brought to you by Nissanissan kicks it's never too late to try new things and it's never too late to reinvent yourself the all-new reimagined nissan kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure

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