00:00It must have been pretty exciting right now when we're seeing so much exuberance around anything and everything related to artificial intelligence.
00:07Yeah, it was amazing, actually, the focus, everything's on AI.
00:11In our recent survey that we actually launched here at the summit,
00:15it was remarkable to see that more than 50% of CEOs across the region are boosting their investment in AI.
00:22And contrary to this view that there's a bubble, over 60% said they're already seeing the benefits.
00:30What are the biggest issues top of mind for CEOs?
00:34You mentioned AI, but it's not just about the exuberance, it's also about how to re-skill the workers as well.
00:40Sure, absolutely.
00:42This concept of a hybrid workforce, you know, what is uniquely human, those creative attributes blended with AI agents.
00:50So the workforce of the future is a massive issue.
00:54AI fluency for our people and learning to work side by side with AI agents.
00:59Do they expect economic growth and productivity from these changes?
01:04What are their top of mind priorities as they change their business structures?
01:09Yeah.
01:10Look, everyone's looking for the productivity dividend.
01:13We haven't seen it yet, but that's often the way.
01:15You know, early adoption, there is always some sort of a trough of disillusionment.
01:21And then we get into the age of enlightenment where there's real productivity benefits.
01:26It was the same with the PC, same with the internet, and it will be exactly the same with AI.
01:31How do they feel about the business outlook now that we have some of those trade tensions dying down?
01:37Yeah, I think that's the sentiment.
01:38It's starting to sort of reach a level.
01:41We saw that in Malaysia.
01:42We saw that in Japan.
01:44We've seen that now here at this summit between China and the U.S.
01:48CEOs love certainty.
01:50And there is now a lot more certainty starting to come through.
01:54Our survey, which we launched here, said that the primary objective of more than 50% of the CEOs was growth.
02:02And that's a really positive sign, getting back to growth.
02:05And for our viewers who are watching live pictures here in Gyeongju, as President Lee Jae-myung, the host of this year's APEC Summit, is greeting all of the leaders, making their way for that family photo that will happen any time now.
02:19But in my conversation with David, I also want to ask about the geopolitical tensions that we've seen so far and perhaps the change that you might have felt from CEOs thinking just from a few months ago.
02:29Without a doubt, you know, for Xi Jinping and Trump to meet here at this summit is extraordinary.
02:37You know, that was uncertain only months ago.
02:39And look, it's really probably a one-year truce is how I describe it between China and the U.S.
02:45But some significant things, particularly for President Trump's voter base, you know, China increasing their imports of U.S. soybeans.
02:54That's fantastic.
02:54On the other side, China relaxing those restrictions on the rare earth minerals.
03:00So really, really important, a sign, hopefully, that portends well for the future.
03:06How do you advise as business leaders to stay nimble at a time when the geopolitics is so unpredictable?
03:14This is the question for a CEO of our time.
03:17We refer to it at Deloitte as expansive resilience, turning volatility and uncertainty into opportunity and advantage.
03:26And that absolutely comes down to agility, adaptability.
03:30It really goes right back to Darwinian concepts.
03:34Survival of the fittest is all about adaptability.
03:36You can see right now the Philippine president, Marcos Jr., now saying hello to President Lee Jae-myung as we await that family photo to take place here in Gyeongju, South Korea, as the leaders' summit is now getting underway, the start of two days of gatherings, bilateral conversations to be had.
03:54David, of course, as we continue to see these conversations between governance and business leaders, any takeaways for you on some of the changes that we're seeing in trend in the business climate globally?
04:10One of the things that I was really heartened by was the focus of CEOs on sustainability.
04:17Over half said they're boosting their investments in sustainability.
04:22That's really important because we all know the nexus between AI, use of electricity, use of water and sustainability impacts.
04:31I was very heartened to see that CEOs are boosting their investment in AI for productivity benefits, but also backing that up with an investment in sustainability.
04:40I think for us as human beings in the future of the world, that was really wonderful to see.
04:47That is interesting because you would think with the ongoing AI boom that sustainability would sort of fall by the wayside, especially when you have a Trump administration that really wants drill baby drill sort of a trend.
05:01Why do you think that's the case?
05:03Well, it does vary by geography in our analysis.
05:06If you look at the APEC economies, Latin America's focus on sustainability was the highest, followed by Northeast Asia, followed by Southeast Asia, followed by North America.
05:18What that says to me is that Asia is looking to press home their advantage.
05:23You think about China today, all of the renewable energy inputs are really coming out of China and they're leading on EVs, wind, solar, batteries.
05:33So I think it's Asia saying, hey, maybe this is our time to move ahead in some of these areas.
05:39We are expecting President Xi Jinping's speech.
05:41Also, later this morning, we have, of course, heard from President Trump yesterday.
05:46President Xi Jinping met with President Trump and had those conversations that led to a one-year trade-truth between the two countries.
05:53David, will this sort of change also the tone when it comes to business leaders being a bit more confident in the year forward?
06:01Definitely.
06:02Investment follows certainty.
06:04And even though it's more like a one-year rolling arrangement, President Trump was very positive that he felt that it would extend well beyond a year.
06:13We've seen that sort of drop in the tariffs on China.
06:16It's still very high at 47 percent, but a reduction there.
06:20And so that provides certainty for CEOs in terms of the allocation of capital, where they look to expand globally.
06:28Because our survey showed that, again, over 50 percent of CEOs see access to capital improving.
06:36That will generate a lot of M&A activity.
06:39And really, when you're looking at M&A, it's all about finding the highest return on investment.
06:45And a more stable geopolitical frame provides a wonderful foundation for that.
06:51Any concerns about stretch valuations at this point?
06:54Because we have seen many businesses actually go to record highs when there's this exuberance in the stock markets as well.
07:02Yeah, look, this question of a bubble, some of the evaluations are extraordinary.
07:07And I think when we look back at sort of Internet 1.0, Internet 2.0, there was a correction.
07:15Whether we'll see that today, I don't know.
07:18I'd love to be able to predict the future.
07:20If I had a crystal ball, I'd be a lot wealthier than I am.
07:22But to me, the productivity benefits will come from AI.
07:28You see, it takes semiconductors.
07:32The demand is extraordinary.
07:34Data centers, extraordinary.
07:35And there is a revenue model that's backing that up.
07:38So, to me, I think we'll still continue to see capital growth.
07:43And there's so much capital going into that tech, media and telco sector.
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