Lazard CEO on AI, M&A, and the US Economy (with Dani Burger)

Lazard CEO: The US economy is a levered, circular bet on AI. Tech wealth fuels high-end consumption, driving growth. This tech-led disruption is creating a pre-election M&A window as firms front-run potential regulatory tightening. The key macro risk is a 'large, fast shock' to labor markets from AI, a dislocation risk the market is ignoring. Lazard's move into PE secondaries is a smart, counter-cyclical hedge against a slowdown.

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Lazard 8.0
Investment Bank
Peter Orszag 8.5

Lazard CEO on AI, M&A, and the US Economy (with Dani Burger)

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The US economy is a levered bet on AI. Growth is driven by AI and high-income consumers benefiting from the AI-driven equity run-up.

Asks about the competitiveness of getting on blockbuster deals like the Nextera-Dominion combination.

Dani Burger
Peter Orszag

Relationships are long-term; the VP on the Nextera deal has served them since being an analyst at Lazard.
Asks what other AI-related deals are in the pipeline.

Dani Burger
Peter Orszag

Large deals are in the offing because of technological change and a window where the regulatory environment is more accommodating than it may be after the next presidential election.

Boards believe the current regulatory environment is more accommodating.
Asks if there will be regulatory pushback on power deals due to affordability concerns.

Dani Burger
Peter Orszag

The hope is that these transactions deliver more efficiency and lower prices for consumers, as expected from the Nextera-Dominion combination.
Asks about the circularity of tech deals (cross-investments, interdependence) and if it's concerning.

Dani Burger
Peter Orszag

The US economy is a levered bet on AI. Growth is driven by AI and high-income consumers benefiting from the AI-driven equity run-up, creating circularity.

It's a good bet to be making, though it may or may not pay off.
Asks if there are areas of too much hype in AI innovation.

Dani Burger
Peter Orszag

If the AI bet pays off, it could be a large, fast shock to labor markets, which are not well-equipped for that. He is hopeful over the medium term, with a premium on human-to-human interaction.

Labor markets deal well with small fast shocks or large slow shocks, but this could be a large fast shock.
Asks how Lazard is thinking about its workforce changing with AI.

Dani Burger
Peter Orszag

There is an opportunity to reimagine work so junior staff have less repetitive work and can move up the responsibility stack quicker, returning to a historical notion of upward mobility at Lazard.
Asks what Lazard looks like in 5-10 years as an AI-forward bank.

Dani Burger
Peter Orszag

Humility is required. They are experimenting with tools to understand their capabilities. They have the deputy CEO of Perplexity on their board to help scenario plan.
Asks if the type of person Lazard hires has changed.

Dani Burger
Peter Orszag

Skill sets will evolve towards engendering trust, showing judgment, and being client-facing earlier. The talent coming in has strong interpersonal skills.
Asks about Lazard's acquisition to beef up private equity exposure, noting that area has been lagging.

Dani Burger
Peter Orszag

The deal makes Lazard the world leader in primary and secondary fundraising. When PE dealmaking slows, the secondaries market picks up as an alternative liquidity source, providing diversification.

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