00:00We're in phase two of digital Darwinism that started quite a few years ago.
00:05And in this phase two, you have to really focus on the productivity dividend and, you know, the survival of
00:13the fastest.
00:13And I think that's really important because when you look at it in detail, a very small portion of firms
00:19who have used AI are actually seeing an impact on their P&L.
00:22If you look at the top 20 percent, and that's on a global basis, you know, that section has been
00:30able to increase human productivity by about 160 percent.
00:35But that means 80 percent of the firms who are using AI are just at the pilot program.
00:41And then if you look at who has an impact on P&L, it's about 8 percent.
00:45And so we've done quite a bit of work in terms of what are those firms, you know, doing to
00:49make it happen.
00:50And in my view, it's the alignment of bridging the three gaps.
00:54One is the fluency gap in AI, so understanding, you know, how to use it.
00:58The second one is the innovation gap.
01:00And the third one is implementation gap.
01:03And this is where most people get stuck.
01:06Being able to deploy AI and redesigning your companies, it's not about laying, you know, having a layer of AI.
01:13It's really about redesigning.
01:14That's very difficult.
01:16But this is where the opportunity is in terms of investment.
01:19So, you know, a lot of folks are saying that they're concerned about AI and maybe kind of the implications
01:25here.
01:26But the reality is it just seems to be impacting most, if not all, parts of the economy.
01:32And investors are trying to figure out how do I invest in that?
01:37And obviously the chip stocks, they've worked.
01:40They continue to work.
01:41But are there other areas that you guys are looking at that might be beneficiaries going forward?
01:46Yeah, so I think you want to be, you want to find that 8%, right, in the market.
01:51But you also want to think of it like tsunami waves.
01:55And the second phase of digital Darwinism is that propagation.
01:58I think healthcare and pharma, for example, are really interesting companies.
02:03They've not really done well.
02:04The impact of using AI at scale, I call it, you know, the synthesis economy, is going to be very,
02:12very important for them.
02:13But it may take a bit of time.
02:15Bloomberg surveillance across America, worldwide, into Virginia, Masson, who's continent of Europe, as well.
02:21Definitive at Allianz over the years.
02:23It is Masson, of global advisors.
02:25Virginia, on China, and to me, the arch idea here is we've got an America going after optimal results in
02:33AI, even to the point of cyber risks.
02:36And we've got the Chinese going, we don't want to do that.
02:39We're going to give you 90% of the bang for one-tenth of the cost.
02:44Discuss that legitimate idea forward two years or five years.
02:51Yes, that's really important.
02:52And so, remember, the context for China is quite different, because one of the things that AI is doing and
02:57will do is the impact on the labor market.
03:00China is quite ahead, because its demographic profile, as you know, the labor force peaked in 2013.
03:07So, the imperatives that AI is for China domestically has a different profile than the U.S. or to Europe.
03:15And really, it's about creating that nervous system within the economy to enable and go beyond that labor shortage and
03:25that very rapid aging.
03:27In terms of global competitiveness, it's very clear that China will provide a cost floor.
03:33Of course, you'll have, you mentioned cybersecurity, you'll have some protection, you'll have regulation, you'll have a lot of things
03:39that come in the way.
03:40But the competition is definitely between the U.S. and China.
03:44How do you think about kind of just broadly defined, Virginia, investing U.S. versus rest of the world?
03:51Because when the tariffs kicked in last year, there's definitely a move of assets out of the U.S., reducing
03:58exposure to the U.S., to the rest of the market, particularly Europe.
04:02That seems to be reversed a little bit.
04:04How do you think about the U.S. versus rest of the world?
04:07So, you know, I don't really think about it at the country level.
04:11I think about it about, you know, in terms of the opportunity at the stock level.
04:16And the U.S. still has very strong companies in a very leading market where we are going to see
04:23a lot of profits coming, which is still tech and AI.
04:26There's a lot of innovation in America, even in terms of, you know, pharma or health care, et cetera, et
04:31cetera, industrials.
04:32So you do have that leadership.
04:34However, having all your eggs in one basket, as we know, has never been a good idea in investment.
04:39So having some of the best players where you have competitive advantage in Europe and, of course, China and Asia,
04:46I'm still very much of the view that you need to have China in your portfolio.
04:51That is the way to do it.
04:52But it's a bottom-up story.
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