Bloomberg Intelligence Sep 17, 2026 18m 8m saved
With Sid Philip, Chief Correspondent for Global Aviation at Bloomberg News · John Donish, founder and CEO of Resilient Health · Nathan Naidu, Technology Research Analyst at Bloomberg Intelligence
Boeing cannot build enough wings. Chief Executive Kelly Ortberg named wings as the pacing item, the part of the build that sets the pace for everything else, and Sid Philip said that is why the 737 MAX ramp investors had penciled in is now in question.
The market had come round to the view that the worst was over. The stock is down about 8% this year and about 1% on the day, and the surprise was that a company known for steady news gave a subdued one.
"And so for investors who were expecting them to sort of go from 47 to 52 to 63, that's been something that's been a bit of a jolt for them."
Philip is Bloomberg News's chief correspondent for global aviation and had been reporting on Airbus's own struggle to raise output. Two other segments follow him: John Donish, a physician and AI researcher who runs Resilient Health, and Nathan Naidu, who covers video games for Bloomberg Intelligence.
The full episode is covered here so you can skip it. 18 minutes of audio, 10 minutes of reading.
Here are the 10 insights that matter.
Key Takeaways
Wings are the pacing item on the 737 MAX, and a plane cannot ship without them
Boeing guided free cash flow of $1 billion to $3 billion and now expects to land near the midpoint, on fewer deliveries
The 200-plane China order will be negotiated airline by airline rather than announced as one deal
777X certification slips into next year, on a plane already seven years late
Donish says the labs' case for slowing releases is regulatory capture, not safety
Open-source token share is rising faster than expected, which he reads as the labs' real worry
Naidu's whole Take-Two case is Grand Theft Auto VI, out November 19, with the stock down 18% this year
1. A Turnaround Not Done
The host opened by admitting he had been among the people who thought Boeing had fixed itself: the MAX was coming off the line, the stock was better behaved, the worst looked finished. Philip's answer was that the ramp is the hard part and that Airbus is proving it too, having pushed back the date for reaching 75 A320s a month more than once.
Getting to 47 a month has been a struggle on its own, which is what makes the path to 52 and then 63 look different than it did.
"It does. And it sort of shows that the turnaround is far from complete. And it's basically a much more challenging turnaround than the market expects because there are big challenges at Boeing and including ramping up production." — Sid Philip
"And so for investors who were expecting them to sort of go from 47 to 52 to 63, that's been something that's been a bit of a jolt for them." — Sid Philip
2. Wings Are the Pacing Item
The second host asked the fair question: why is anyone surprised, when a chief executive has earnings calls and an air show to manage expectations with? Philip said the company had talked about 47 and then 52 without talking about what stood in the way, and that Ortberg has now named it.
The financial consequence is direct, because the 737 is where Boeing's cash comes from. Philip said the company had guided to between $1 billion and $3 billion of free cash flow this year and that the finance chief said a day earlier it would land near the midpoint, on fewer deliveries.
"And so Kelly Ortberg talked about how wings were a pacing item and how they were struggling to produce enough wings for the aircraft." — Sid Philip
"That is, and you can't really build a plane without those wings." — Sid Philip
3. Supply Chain Since COVID
Asked why the industry still has not fixed logistics, Philip pointed back to the shutdown. Production stopped, suppliers scaled down, and when demand returned they could not scale back up at the same speed. He said Airbus had told Bloomberg a couple of months earlier that an aircraft carries hundreds of thousands of parts, and one missing part stops a delivery.
"And so we were talking to Airbus a couple of months ago, and they were talking about how there's hundreds of thousands of parts on an aircraft. And if you have one part missing, you can't deliver those aircraft." — Sid Philip
"And so for the plane makers, they have a sort of whack-a-mole where you have one issue being sorted out and another issue dropping up." — Sid Philip
4. The China Order Shrinks
With a US-China summit in Washington about a week and a half away, the expectation had been an announcement. Philip said Ortberg spent time lowering it. The deal President Trump cited in May covered 200 aircraft, and the market had been told before that Chinese airlines might take as many as 500.
Reopening the market is not the same as booking the order. Philip said any purchase now gets negotiated with individual airlines in pieces, which he described as a setback for sentiment rather than for the underlying demand.
"And Kelly Ortberg said that while the market had been reopened for aircraft in China, it's still not going to materialize into this one massive mega order." — Sid Philip
5. 777X Slips Again
With half a minute left, the host asked about the 777X. Philip said certification moves into next year, on a program already seven years behind, and that the airlines buying it do not fully believe the new date either.
"The 777X certification will slip into next year, is what Kelly Ortberg said yesterday. And that plane has been seven years late." — Sid Philip
6. Regulatory Capture
The second segment turned to whether the rollout of artificial intelligence needs guardrails. John Donish, a physician who now runs Resilient Health and works as an AI researcher, said he holds the contrarian position. His reading is that when the large labs call for pacing they mean slowing releases rather than slowing training, and that the motive is competitive rather than protective.
He compared it to regulatory capture, where an industry shapes the rules that govern it in a way that protects the companies already inside. He said he recognizes the pattern from health care.
"Look, I'm originally from healthcare, right? So I know what regulatory capture looks like. And this looks and smells like regulatory capture." — John Donish
"They're worried about the rise of open source." — John Donish
7. Open Source Is the Threat
Donish's evidence is usage data. On OpenRouter, a platform that lets a user run many different models in one place, he said the share of tokens going to the large labs is falling and the share going to open models is climbing, both faster than anyone expected. He read Nvidia's purchase of Hugging Face as confirmation of where the pressure is coming from.
His second argument is about model size. Scaling laws still hold, he said, but not in the way the labs expected: narrower models trained on a single sector's data, and the harnesses built around them, are beating general ones on specific work. He was also dismissive of recursive self-improvement, the idea of a model that improves itself, which he said has been around for more than twenty years and still does not work well, citing a recent Google paper that conceded the results do not generalize.
"Tokens for the big labs are dropping faster than anyone expected. And open source is rising faster than anyone expected." — John Donish
"That explains why Nvidia acquired Hugging Face for a record deal." — John Donish
"We've had that for 20 plus years, but it doesn't work that well." — John Donish, on recursive self-improvement
8. Acceleration, Not Pacing
Asked how to think about the United States against China, Donish said that framing is the right one and that China has committed to open source, with models he rates highly. He credited the administration and Jensen Huang with getting this call right.
What he wants regulated is use, not development. Ahead of the Xi-Trump meeting he said he would like international standards covering defense, biology and gain-of-function work, on the grounds that the safety harnesses around current models are not mature enough to carry decisions that consequential, which he said is visible in health care now.
"This is not the moment for pacing. This is the moment for acceleration." — John Donish
"We really need to be careful about allowing the corporate interests of a few large labs driving the decision-making for the entire country." — John Donish
"And so I think that's what I'm hoping for is actually more guardrails on what AI can touch versus guardrails on the actual development of the models themselves." — John Donish
9. GTA VI and Take-Two
The third segment opened with the host's figure that video games generate roughly $214 billion a year worldwide, more than film and music. Nathan Naidu said the investment case for Take-Two is one product. Grand Theft Auto VI launches November 19, thirteen years after the last one, and the premiere ran on Netflix at about 26 minutes and was the most watched film globally there that week.
The stock is down 18% this year even so. Naidu put that down to expectations already in the price meeting a run of leaked gameplay footage close to launch. He noted the previous installment sold 230 million units and has added $300 million to $400 million a year to the top line in each of the thirteen years since.
"That game is a juggernaut. It has sold half a billion copies of games in that franchise's entire lifetime." — Nathan Naidu
"Some sales estimates are expecting 85 million unit sales within two months of launch." — Nathan Naidu
"Because the last game alone, the fifth installment sold 230 million units." — Nathan Naidu
10. Mobile Versus Console
Mobile is roughly half the global market, Naidu said, and the two halves make money differently. Console and PC carry the higher spend per player because that is where committed players are. Mobile wins on count: he put downloads at about thirty times console and PC combined in 2025.
Reaching that audience is not something a console publisher does on its own. The usual route is a partnership with a studio that already makes mobile games, and Naidu pointed to Take-Two putting the GTA trilogy on the Netflix app, where it performed well, as a preview of what the Netflix premiere might lead to.
"The average spend per gamer on console and PC are always going to be higher because these are where your hardcore gamers reside." — Nathan Naidu
"But mobile is where you have volume. It's essentially a volume game." — Nathan Naidu
"More than half of these people are actually in emerging markets." — Nathan Naidu
Bonus Insights
Naidu placed most mobile players in China, the Middle East, Brazil, Latin America and Southeast Asia, with markets where more than 90% of players are on phones, and said the revenue per player is still why publishers keep investing in the United States
The host cited 3.2 billion to 3.6 billion people playing games across mobile, console and PC, and said he had looked the numbers up in a search engine's AI summary that morning
Naidu quoted Take-Two's chief executive describing the level of expectation around the launch as terrifying
Donish said he respects Dario Amodei and still thinks his approach taken literally would have put guardrails on GPT-2
Philip's least comfortable note on Boeing was about belief rather than schedule: the airlines waiting on the 777X have been skeptical about when the planes actually arrive
Philip's bottom line is that Boeing's recovery is a manufacturing problem before it is a demand problem, and until the wings arrive the delivery rate, the cash flow and the China order all wait on the same constraint.
Products, Companies & Tools Mentioned
Boeing (The 737 MAX ramp, the wing shortage, free cash flow guidance and the 777X delay are the whole first segment)
Airbus (Cited as the counterexample that is not a counterexample: it has pushed back its own A320 rate target more than once)
OpenRouter (The usage data Donish cites for open-source models gaining token share on the large labs)
Nvidia and Hugging Face (The acquisition Donish reads as proof of where the competitive pressure is)
Take-Two Interactive and Rockstar Games (The publisher and studio behind Grand Theft Auto VI, down 18% this year into a November 19 launch)
Netflix (Carried the GTA VI premiere and previously the GTA trilogy, which Naidu treats as a template for reaching mobile players)
Resilient Health (Donish's company; he speaks as a physician as well as an AI researcher)
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