Nvidia founder and CEO, Jensen Huang, speaks during the 29th annual Milken Institute Global Conference at the Beverly Hilton in Beverly Hills, California, May 4.PATRICK T. FALLON/AFP/Getty Images
It takes a lot to cloud the rays of confidence brimming from every ballroom and hotel suite at the Milken Institute’s Global Conference in Beverly Hills.
But the main wellspring of enthusiasm at this year’s gathering - the vast, disruptive potential of artificial intelligence, and the equally massive amounts of fee-bearing capital needed to build it - also had some of the world’s most influential chief executive officers shifting uncomfortably in their onstage armchairs.
The throng of thousands of visitors who descended on the Beverly Hilton and Waldorf Astoria hotels from Sunday to Wednesday was thick with billionaires, dealmakers and a smattering of celebrities.
The conference has come to rival the World Economic Forum in Davos, Switzerland, as the event where the world’s financial power brokers gather to take stock of financial markets and world events.
A few days at “the zoo” – as some senior executives described the Milken conference in private – is a thrilling but also jarring mix of high-stakes global finance, bullish predictions and conspicuous glamour.
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One of the biggest draws was Nvidia Corp. CEO Jensen Huang, who spoke at 5 pm on Monday. By that time, attendees who ping-pong through a day of hour-long panel discussions and speed-dating-style client meetings are usually looking to catch their breath before the evening dinner circuit.
Instead, when event staff closed the doors on Mr. Huang’s full-to-capacity fireside chat, a long lineup still snaked through the Beverly Hilton’s lobby, unable to get in.
(It didn’t help that organizers had put a panel featuring retired superstar athletes Tom Brady and Shaquille O’Neal in the more spacious, chandeliered ballroom down the hall, on the same stage where movie and television stars accept Golden Globe Awards).
The rush to hear from Mr. Huang, who is at the coal face of the AI revolution, showed the thirst to understand what may be coming – for better and for worse – even among CEOs who are used to playing an outsized role in shaping world events.
“Everybody should have AI. It empowers them, it lifts them, it elevates them, it gives them superpowers. Of course, everybody should have it,” Mr. Huang said.
“My greatest concern is that we scare ... all the people that we’re telling these science fiction stories to, to the point where AI is so unpopular in the United States, or people are so afraid of it, they don’t actually engage it.”
Sixteen minutes later, he added: “Everybody’s job will be impacted.”
Several CEOs joined him in the camp of AI optimists. (“I’m the pragmatist,” Mr. Huang insisted.)
Larry Fink, the chairman and CEO of US$13.9-trillion asset manager BlackRock Inc., said he thinks the supply of electricity and chips to fuel AI will be so constrained that it will soon be possible to trade futures contracts on compute power.
“I don’t believe we’re moving fast enough. There is not an AI bubble. There is the opposite. We have supply shortages,” he said.
Laurence D. Fink, Chairman and CEO of BlackRock.Mike Blake/Reuters
Other speakers acknowledged that there are risks to employment and cybersecurity, and the full impact is hard to predict, but said forging ahead is the only option.
“Do not be nostalgic for the predictable past; embrace the unpredictable, exciting future,” International Monetary Fund managing director Kristalina Georgieva told attendees. The Bulgarian economist said she started a recent pep talk to IMF staff by saying, “AI or die.”
Gary Cohn, the International Business Machines Corp. vice-chairman and former Goldman Sachs banker who led the National Economic Council in the first Trump administration, said AI’s importance to national security and military supremacy dwarfs near-term fears about disruption.
“We can’t say, ‘Well, well, well, it’s going to be bad for the economy, and you know, some people might lose their jobs.’ We have to win at this,” he said Monday.
But some top executives are genuinely worried about AI’s fallout. Pension fund CEO Marcie Frost, who oversees US$621-billion for 2.3 million members of the California Public Employees’ Retirement System (CalPERS), said she has “pretty grave concerns about disruption of people.”
Morgan Stanley co-president Daniel Simkowitz said, “the social issues scare me the most.” He doesn’t buy dire predictions of 20-per-cent unemployment, but if the jobless rate does rise significantly, “where’s the demand for the product that is actually being produced dramatically more effectively? And then how does that filter through, around society?”
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Verizon Communications Inc. CEO Dan Schulman wrestled with the opportunity and risk that AI poses. It feels like “we’re in the Renaissance era right now. So much is going to happen that will be unbelievable,” he said. Yet he also sees a “distinct possibility” that unemployment will shoot higher.
The official theme of the Milken event was “Leading in a New Era.” But none of the CEOs leading this technological wave by pumping billions of dollars into AI quite know what that era will be.
Out of seeming necessity, a group of leaders who loathe uncertainty are charging toward a void that is eclipsing other headline events of the day, and masking pockets of weakness in the economy.
The war in Iran was mentioned often, but most speakers suggested it is unlikely to derail the economic boost from building AI data centres, new energy sources and more resilient supply chains.
Oil prices were rarely mentioned, never mind that the streams of Los Angeles traffic outside are being fuelled by gas that costs more than US$5 per gallon. More than once, however, panelists noted how common Waymo’s driverless electric taxis are in the city.
Even Persian Gulf investors from the United Arab Emirates and Qatar, who called the war “a crisis point,” expressed optimism that it is a short-lived setback. Qatari Finance Minister Ali bin Ahmed Al Kuwari said his country has committed US$10-billion to investments since the war began, Doha’s airport is busy again and he expects economic growth to bounce back to 6.6 per cent next year.
Several CEOs confidently declared that a rattled private credit market, which has had a surge of investors asking for their money back, does not pose a systemic risk to the financial system. The private lending market is still interesting and useful to investors, they said, and will expand despite its growing pains.
The prevailing undercurrent at Milken is money on the move. The conference happens against a backdrop of palm trees, a few blocks from the luxury boutiques of Rodeo Drive. A single four-day pass can cost US$50,000 for people who don’t have privileged access.
Much of the real action happens away from the ballrooms and stages. Executives pinball from one well-appointed hotel suite to the next to shore up relations with clients, pitch their expertise and plant seeds for future deals.
Brookfield Corp. CEO Bruce Flatt speaks at the conference, May 5.PATRICK T. FALLON/AFP/Getty Images
Attendees in need of a break were invited to step outside to the Wellness Garden for all-day “healing sessions, meditation and mind-body experiences.” Under a canopy by a faux waterfall, people in sober business suits cuddled puppies and posed for photos at Puppy Playtime. (A sponsor’s sign cheerfully asked, “What’s the ROI on belly rubs?”)
The Milken conference’s hothouse atmosphere for investment and commerce is, to some degree, what Canada’s government hopes to replicate with the Canada Investment Summit, a new event scheduled to take place in Toronto in mid-September. (Perhaps without the backing of Michael Milken, the former junk bond king whose prowess in the corporate takeover craze of the 1980s landed him in prison before he made a remarkable reputational comeback, in part by creating the Milken Institute).
Invitations on the Prime Minister’s letterhead went out to more than 100 CEOs from leading asset managers, sovereign wealth funds and banks.
A contingent of Canadians made the trip to Milken. Chief investment officers from Maple Eight pension funds, Toronto-based private equity and credit fund CEOs, and investment bankers hustled through hotel lobbies to keep up with packed meeting schedules.
An invite-only roundtable on Tuesday pitched Canada as a destination for investment. Making the case behind closed doors were Invest in Canada CEO Laurel Broten, Norton Rose Fulbright LLP deal lawyer Walied Soliman and two former ambassadors - Toronto-Dominion Bank vice-chair Frank McKenna and Power Sustainable CEO Bruce Heyman.
Canada also featured prominently in a panel on the future of North American free trade that featured federal cabinet minister Mary Ng.
But investors in other sessions mostly said they still see the greatest investment opportunities in the U.S., Asian hubs such as Japan and European countries such as Germany.
In the cacophony of the Milken conference, it is hard for all but the most boldface names to break through. But one Canadian CEO, Brookfield Corp.’s Bruce Flatt, offered his take.
He estimated there will be US$10-trillion – or maybe more – spent “rewiring the world, and that’s probably the most fundamental thing going on,” he said at Tuesday’s opening panel.
“Is it too much hype? Yes, there’s always too much hype in some different thing. But we’re just rewiring the world, and there’s going to be enormous investment.”