Starbucks has 22,000 stores outside the United States. Brian Niccol, its chairman and CEO, told Bloomberg Talks he sees no reason that number cannot double to 40,000 or more.
Niccol was one of 17 people quoted in this issue. The others ranged from Tom Curtis, who said Burger King stayed out of the fast-food discounting race, to Sherry House, who said off-road models now bring in 25% of Ford's revenue, to Connor Teskey, who said the AI buildout is short of companies able to build it, not of money.
"We've got 22,000 stores outside the United States. There's no reason why we can't double that to 40,000 plus just outside the United States." — Brian Niccol, Chairman and CEO at Starbucks, on Bloomberg Talks (Read summary)
We scanned 810 shows and 7 hours of audio, wrote 18 summaries, and pulled 39 quotes into this 16-minute read.
Here is what mattered.
Financials
Schwab is still adding staff as AI makes each employee more productive
Rick Wurster said Schwab now needs fewer people for each client, and that the firm sees client relationships, more than technology, as what drives its growth.
"We have 1,600 more people than we had two years ago, so we're growing." — Rick Wurster, President and CEO at Charles Schwab, on Bloomberg Businessweek (Read summary)
Schwab blocks AI agents from logging in to its clients' accounts
Wurster said Schwab will not let AI agents manage client portfolios, and that the attempts it does block are few.
"We've got 49 million client accounts... Clients are not yet willing to give their passwords to these agents to go take activity on their behalf." — Rick Wurster, President and CEO at Charles Schwab, on Bloomberg Businessweek (Read summary)
LPL's advisors spend less than a third of their working time actually advising clients
"There's a recognition that when you look at all of the work that's done inside of an advisor's office, what we see is that 30% of the time, they're actually delivering advice to their clients." — Rich Steinmeier, CEO at LPL Financial, on Masters in Business (Read summary)
Rich Steinmeier uses that figure as the baseline for LPL's technology spending, aimed first at the paperwork inside advisors' offices.
Steinmeier expects AI to reverse that split over the next decade
"I think you will see that be 70% of client delivery and 30% of the process work that occurs in the background." — Rich Steinmeier, CEO at LPL Financial, on Masters in Business (Read summary)
He said the freed-up time would let advisors take on smaller accounts that were not worth serving before.
LPL has moved its model portfolios toward private and alternative assets
"We've looked from the evolution of that 60-40 portfolio to something that looks more like a 40-30-30 portfolio that's got 30% of those investments being alternative investments or non-correlated assets." — Rich Steinmeier, CEO at LPL Financial, on Masters in Business (Read summary)
Federated Hermes says its latest European private-credit deal pays 7.5% to 8%, not 12%
Christopher Donahue described a deal the firm recently closed: loans to mid-sized European companies, sold to insurance companies through a closed-end fund.
"The yield on it is about three and a half over Euribor. So that makes it, you know, seven and a half, 8%. Not 12. Not like that... you don't have yield chasers driving these products." — Christopher Donahue, President, Chair and CEO at Federated Hermes, on How I Invest (Read summary)
Euribor is the benchmark rate at which European banks lend to one another.
Federated Hermes now uses AI to review every customer service call, without cutting managers
Donahue said he avoids describing AI as an efficiency tool in front of employees, because to staff, efficiency means job cuts. He talks about quality instead.
"Instead of only listening to one out of every 50 or 100 calls, you listen to them all... Do we have less managers because they don't have to do that job anymore? No. We have higher quality calls." — Christopher Donahue, President, Chair and CEO at Federated Hermes, on How I Invest (Read summary)
Crypto and Digital Assets
NEAR found that signing up for a crypto app lost almost every new user
In 2019, Illia Polosukhin's team interviewed crypto companies about what a new user had to do to get started. Buying a CryptoKitty, a collectible on the Ethereum blockchain, was the test case.
"Here's a new machine, buy a CryptoKitty, and ... it was like 92 steps, and it takes like 12 hours... your drop-off rate is like 99.99% even if people wanted to do it." — Illia Polosukhin, Co-founder at NEAR Protocol, on 1000x (Read summary)
NEAR's consumer product now lets a user log in with a fingerprint or Face ID and hold Bitcoin and other coins in one account.
NEAR started as a way to pay an AI startup's contractors, and was meant to take 6 months
Polosukhin's first company paid data-labeling contractors, many of them students in China without bank accounts, and crypto was the easiest way to pay them.
"The transaction fees at the time were higher than what we were paying people... we're going to go build the blockchain quickly. It's going to be 6 months, right? It's pretty easy. And then we can come back to AI." — Illia Polosukhin, Co-founder at NEAR Protocol, on 1000x (Read summary)
The blockchain took a little over 2 years to build. NEAR launched in October 2020.
Alternatives and PE
Brookfield has signed AI infrastructure deals where a government, not a tech company, is the first customer
Connor Teskey said most of the world's largest technology companies are American, so US demand for AI data centers comes from them. Europe has few such companies, and governments are filling the gap.
"We've signed agreements in France, in Sweden, in Qatar, where the initial off-taker to support the buildout of AI infrastructure is not a hyperscaler, but actually a sovereign, and we call that sovereign AI." — Connor Teskey, CEO at Brookfield Asset Management, on Goldman Sachs Exchanges (Read summary)
An off-taker is the buyer that signs up in advance for a project's output, which is what lets the project get financed.
Brookfield's CEO says the AI buildout is short of companies that can build, not of money
Teskey said the market treats AI infrastructure demand as fragile, selling off when a cheaper model appears or a tech company walks away from a data-center lease. He said that does not match what Brookfield sees in its own projects.
"There is no shortage of capital, and there is no shortage of demand. The bottleneck is who can actually pull these projects out of the ground." — Connor Teskey, CEO at Brookfield Asset Management, on Goldman Sachs Exchanges (Read summary)
The scarce work, in his account, is developing the land, securing a grid connection, building the power supply and running the site.
Consumer
Niccol sees Starbucks one day owning other brands that could use its strength
"I think when you've got a strong business like Starbucks, I think you put other businesses into a portfolio that could leverage the strength of Starbucks." — Brian Niccol, Chairman and CEO at Starbucks, on Bloomberg Talks (Read summary)
He said that is not the company's focus now, and that Starbucks does not need acquisitions to hit its growth targets.
Selling most of its China business has not slowed Starbucks abroad, Niccol says
Starbucks sold 60% of its China business and now runs it as a partnership with Boyu, which needs less of Starbucks' own capital.
"If you exclude China, the fact that we sold 60 percent of the business, our international business, the revenue grew 5 percent." — Brian Niccol, Chairman and CEO at Starbucks, on Bloomberg Talks (Read summary)
Burger King stayed out of the fast-food discounting race and put the money into the food
Tom Curtis said Burger King's sales growth is coming mostly from lapsed customers returning, not from regulars spending more.
"A couple of years ago, there was something called the value wars, and we chose not to join in a race to the bottom." — Tom Curtis, US and Canada President at Burger King, on Bloomberg Television (Read summary)
Instead, it held prices mostly steady, raising them modestly this year, and remade the Whopper and its chicken nuggets.
Burger King's US and Canada president took customer calls himself, and rebuilt the nuggets
"I had launched what was called a listening line back in February where I took incoming calls, and I answered over 3,000 of a 120,000 calls. And there was a clear call to action that your nuggets are not good enough." — Tom Curtis, US and Canada President at Burger King, on Bloomberg Television (Read summary)
The same callers said the Whopper looked flattened in its box, so Burger King changed the packaging and left the burger alone.
Burger King can remodel its restaurants only as fast as its franchisees' profits grow
"I think the holdup is capital... The pace of remodeling is a direct function of the franchise P&L. So the faster our P&L grows, the faster we can remodel." — Tom Curtis, US and Canada President at Burger King, on Bloomberg Television (Read summary)
He said Burger King wants every existing restaurant in good shape before it opens many new ones.
Other appearances:
Starbucks Chairman and CEO on the end of the turnaround and a return to opening stores on Bloomberg Television
Starbucks Chairman and CEO on stretching the morning rush into a longer peak on Squawk on the Street
Sports
Ice Cube says Big3 draws more regular-season viewers than MLS or the NHL
Big3, the 3-on-3 basketball league, is going public by merging with a special purpose acquisition company, a deal Ice Cube expects to close around year-end or early next year.
"Right now we're doing better than MLS... regular season. We're doing better than in NHL regular season." — Ice Cube, Co-founder at Big3, on Bloomberg Television (Read summary)
Big3 signed one-year TV deals with CBS to stay free for a larger media contract
Ice Cube pointed to how much streaming platforms are now paying for rights to the major US leagues and to WWE.
"We're the last one left to be able to... do a major deal... So... we're in a prime position to land a major media deal." — Ice Cube, Co-founder at Big3, on Bloomberg Television (Read summary)
He said cash flow is the only thing that has held the league back.
Technology & AI
Customers have committed $580B of future spending to AWS
Matt Garman said the typical pattern is a company committing to AWS as its main cloud provider, citing ADP and Roblox among them.
"As that business and that base started to grow and we get more and more commitments, if you see in our backlog, it's grown to be $580 billion. So we have that much committed to spend on AWS and it's growing really rapidly every single quarter." — Matt Garman, CEO at AWS, on Bloomberg Tech (Read summary)
AWS's CEO says rival clouds depend on a couple of AI labs, while AWS's demand is spread out
"I think you look at some of the others that are growing, they have really high concentration with just a couple of these labs. For AWS, that's not the case. We're spread across almost every single industry that you can imagine ... They trust us for enterprise security. They trust us for availability." — Matt Garman, CEO at AWS, on Bloomberg Tech (Read summary)
He named Anthropic and OpenAI as large customers, alongside Meta, Salesforce and Apple.
Roblox's CEO says games made mostly by AI have reached its top 20
David Baszucki said AI tools are speeding up how fast creators build games on Roblox, which beat the top of its own guidance for the quarter.
"Steal An Egg and Hustle Valley hit the top 20, mostly created by AI." — David Baszucki, Co-founder and CEO at Roblox, on Bloomberg Talks (Read summary)
Baszucki pushed back on the worry that a few hit games dominate Roblox
"40% of the weekly top 100 games are created within the last three months." — David Baszucki, Co-founder and CEO at Roblox, on Bloomberg Talks (Read summary)
Twilio's CEO says AI voice agents have barely started handling customer calls
Twilio's shares fell after a quarter that Khozema Shipchandler called a clean beat, with guidance raised. He said the guidance carries the usual caution of a business billed on usage.
"Voice AI... is 1% penetrated in terms of voice interactions that customers are having." — Khozema Shipchandler, CEO at Twilio, on Squawk on the Street (Read summary)
Twilio supplies infrastructure to AI companies rather than building apps that compete with them
"We don't participate at the application layer, we participate at the infrastructure layer." — Khozema Shipchandler, CEO at Twilio, on Squawk on the Street (Read summary)
The near-term drag, he said, is that many businesses still block incoming calls placed by AI agents, and regulated industries will be the last to allow them.
AI agents now bring Tealium's customers more revenue per website visit than people do
Tealium sits underneath companies' websites, apps and call centers, collecting customer data and passing it to the systems that act on it. Jeff Lunsford's figures come from across that customer base.
"This agentic traffic is converting at about 38% more revenue per session than the human traffic is. Our customers today, about 20% of their inbound traffic is inbound agents, not humans." — Jeff Lunsford, CEO at Tealium, on Eye On A.I. (Read summary)
That contrasts with what Rick Wurster sees at Schwab, where clients are not yet willing to hand their passwords to an agent.
Tealium's CEO says sending its real-time data to ad platforms lifts customers' ad returns
Lunsford was describing customers who connect Tealium to the conversion-tracking systems of Google, Meta, TikTok and other ad platforms.
"Their conversion rates and their return on ad spend go up on average 25%... that sounds like a small number, but then you realize how much they're spending on digital ad spend, which is typically at least 10x what they're spending on their tech stack, maybe easily 20x. These are big dollars." — Jeff Lunsford, CEO at Tealium, on Eye On A.I. (Read summary)
VC & Startups
One of the top AI labs pays Hermetiq to analyze its software builds instead of doing it in-house
Jake Newfield's pitch is that AI coding tools have moved software teams' bottleneck from writing code to compiling, verifying and testing it.
"We are solving this today for one of the top AI labs who's paying us 240k to provide analysis into their over 2 million builds per day that they run, which is 4 billion build events." — Jake Newfield, Co-founder and CEO at Hermetiq, on This Week in Startups (Read summary)
Hermetiq was a 2-person company when the lab started paying, Newfield said.
Newfield says AI labs buy tools like his for the same reason they buy Databricks
Asked why a lab would not build the tool itself, Newfield pointed to the labs' use of Databricks for data storage and Okta for logins.
"For the same reason that these AI labs don't want to build their own data lake and they use Databricks... just because a company's big and successful doesn't mean they want to build everything under the sun, because that takes resources away from the core stuff that they're building, which in the case of the labs is LLMs." — Jake Newfield, Co-founder and CEO at Hermetiq, on This Week in Startups (Read summary)
N1BW plans to hand a large share of its equity to the filmmakers who make its shows
Roy Price, who ran Amazon Studios, founded N1BW as a site for short serialized shows, many of them made with AI.
"Each filmmaker in the program will get like 1% of the company — so if we have 15, that'll be 15% — plus over the next 18 months we'll distribute like 20% of the shares to people according to how many views they drove." — Roy Price, Founder at N1BW, on The AI XR Podcast (Read summary)
He compared it to United Artists, the studio founded more than a century ago so that actors and directors could own part of it.
Price says paying per episode will make more creators a living than YouTube does
"So few people make more than like $2,000 a month on YouTube... if you do the token model where people are spending tokens to watch episodes or they can subscribe, I think those business models will actually work... people who are doing good work can actually make money from it." — Roy Price, Founder at N1BW, on The AI XR Podcast (Read summary)
Industrials and Transport
Ford is holding US prices by selling more off-road and other high-margin models
Sherry House said Ford raised the low end of its full-year profit guidance after a quarter in which its volume fell from a year earlier.
"So we've continued to see steady competition, but in the United States, we're continuing to be able to see strong mix in pricing. We are leaning in... to off-road products and to other higher margin products. So for instance, off-road now represented 25% of our revenues." — Sherry House, CFO at Ford, on Bloomberg Hot Pursuit! (Read summary)
Ford's CFO credits AI-driven stock gains for part of its demand from higher-income buyers
House was asked whether the AI boom and the stock market were lifting demand.
"Our higher income earners that are Ford customers tend to look at the stock market as an indicator of strength. And when they see the strength there, they're more comfortable buying. So given all of the AI corporate investment that's been happening, I would say that that's a contributor." — Sherry House, CFO at Ford, on Bloomberg Hot Pursuit! (Read summary)
Ford sees no relief coming next year on the cost of materials, chips and shipping
"So on the commodity front, we're not expecting relief anytime soon. In fact, as we look ahead to 2027 between commodities, chip prices, and logistics, we think that we could be facing headwinds there of about $2 billion." — Sherry House, CFO at Ford, on Bloomberg Hot Pursuit! (Read summary)
WestJet's CEO says one Canadian rival is growing on taxpayer money
Alexis von Hoensbroech said a government loan to an airline becomes a subsidy once it stops being repaid, and pointed to pandemic-era loans to Transat and Porter.
"There's one airline that's growing at 25% year-over-year because the taxpayer pays the bill." — Alexis von Hoensbroech, CEO at WestJet, on BNN Bloomberg (Read summary)
He did not name the airline. He said fares that are held down this way make it harder for every carrier to pass on its rising fuel bill.
WestJet no longer has fuel hedges large enough to matter
Von Hoensbroech said fuel has become much more expensive since the war with Iran began, and that most North American airlines are in the same position as WestJet.
"Now our hedging is not material anymore. So we are fully exposed." — Alexis von Hoensbroech, CEO at WestJet, on BNN Bloomberg (Read summary)
Bloomberg's Craig Trudell says no carmaker, Tesla included, has an answer for Chinese rivals
"I think it's gone from nobody having an answer for Tesla to nobody, including Tesla, having an answer for the Chinese." — Craig Trudell, Global Business Managing Editor at Bloomberg, on Bloomberg Hot Pursuit! (Read summary)
Nuggets of Wisdom
Donahue's father set one rule for risk at Federated: never sink the firm over a careless mistake
Christopher Donahue's father co-founded Federated and went to West Point. Donahue cited one of his father's rules for the firm.
"There's no dying for the wrong reason... dying for the wrong reason is messing up on compliance or with the SEC or doing some stupid deal." — Christopher Donahue, President, Chair and CEO at Federated Hermes, on How I Invest (Read summary)
Price's rule from Amazon Studios: a show that feels safe to approve is probably average
"If you're not a little afraid when you greenlight something, maybe you shouldn't be greenlighting it at all, because maybe it's just very average." — Roy Price, Founder at N1BW, on The AI XR Podcast (Read summary)
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