WEBVTT - Apple Launches New iPad Air; Uber and Instacart Team Up 0:00:01.760 --> 0:00:05.440 From the heart where Innovation, money and power Collie in 0:00:05.559 --> 0:00:07.040 Silicon Valley, NBN. 0:00:07.400 --> 0:00:11.600 This is Bloomberg Technology with Caroline Hyde and Ed lud Love. 0:00:24.560 --> 0:00:26.960 And Caroline Hyde of Bloomberg's world headquarters in New York. 0:00:27.080 --> 0:00:30.160 Ed Ludlow, he's off. This is Bluemeg Technology. Coming up. 0:00:30.200 --> 0:00:32.800 We'll bring you all the details from Apple's let Loose 0:00:32.840 --> 0:00:35.600 product launch as a company brings us. 0:00:35.520 --> 0:00:38.720 The new AI ready iPads, and we'll hear from the 0:00:38.760 --> 0:00:40.760 CFO of Disney's shares full hard. 0:00:40.880 --> 0:00:45.000 After a cautious outlook for streaming subscribers plus Uber and Instacart, 0:00:45.200 --> 0:00:48.040 they team up to take on door Dash. Our interview 0:00:48.080 --> 0:00:50.760 with both of the company's CEOs later this hour. 0:00:51.560 --> 0:00:53.159 First, let's check in on these a marngres. 0:00:53.200 --> 0:00:55.520 We turned to the green even on the NASDAC after 0:00:55.920 --> 0:00:58.400 really some strong days that we've had for the last 0:00:58.440 --> 0:00:58.960 three days. 0:00:59.000 --> 0:01:01.320 I mean remember on money we had the best three. 0:01:01.160 --> 0:01:04.839 Day run for stocks more broadly that we'd had well 0:01:04.880 --> 0:01:06.640 since November. I'm going to bring you back to the 0:01:06.640 --> 0:01:09.000 benchmarks for a moment. I'll get onto these individual players 0:01:09.040 --> 0:01:10.840 in a moment where we are seeing the NASDAC on 0:01:10.880 --> 0:01:13.200 the higher side, we've seen bomb markets actually rally as 0:01:13.240 --> 0:01:14.800 well ahead of that three year auction. 0:01:15.160 --> 0:01:17.040 We're also seeing, of course, the world of crypto. 0:01:17.440 --> 0:01:19.199 Just keeping an eye on what's happening with the world 0:01:19.200 --> 0:01:21.559 of bitcoin at the moment, because we have of course 0:01:21.600 --> 0:01:24.040 seen well in up about one and a quarter of 0:01:24.080 --> 0:01:25.920 a percent, a little bit of risk appetite there in 0:01:25.959 --> 0:01:28.040 the crypto land. Now, let's take it onto some of 0:01:28.080 --> 0:01:30.000 the individual movers that we've had on the day. 0:01:29.880 --> 0:01:31.720 Because this has been thick and fast. 0:01:31.760 --> 0:01:34.520 Earnings still coming of course after the bell yesterday and 0:01:34.560 --> 0:01:36.880 also this morning Disney, as we're going to be getting 0:01:36.920 --> 0:01:39.960 to this company in a moment down more than nine percent. Look, 0:01:40.280 --> 0:01:42.520 some of the numbers were pretty strong. We're seeing still 0:01:42.560 --> 0:01:45.160 a focus on bringing about profitability at this business by 0:01:45.160 --> 0:01:48.720 Bob Byger. However, subscriber numbers looking to be a more 0:01:48.760 --> 0:01:51.200 cautious outlook and forecast coming from the CFO. 0:01:51.480 --> 0:01:52.600 The market falls hard on that. 0:01:52.640 --> 0:01:55.360 Palenteer came after the bell yesterday, and look, we're once 0:01:55.360 --> 0:01:58.240 again seeing some rapid growth, but not as fast as 0:01:58.240 --> 0:02:01.800 people want to see, particularly with the US commercialization growth 0:02:01.800 --> 0:02:04.320 that we're seeing for Palenteer. It came after the bell yesterday, 0:02:04.440 --> 0:02:06.600 and look, we had seen seventy percent in previous quarters 0:02:06.600 --> 0:02:08.920 were down to just oh but a forty percent increase 0:02:09.240 --> 0:02:11.600 in the overall sales growth, So a little bit of 0:02:11.600 --> 0:02:14.040 caution and taking off of the market thereafter the valuation 0:02:14.120 --> 0:02:16.399 and run up. I'm looking at Apple though, up four 0:02:16.440 --> 0:02:20.160 tens percent, the juggernaut unrailing some new products, this one 0:02:20.240 --> 0:02:23.760 all about the iPad, an AI focused iPad pro and 0:02:23.800 --> 0:02:27.200 a larger iPad Air. Want to break down the latest 0:02:27.320 --> 0:02:29.120 of what was just occurring in the last hour or so. 0:02:29.400 --> 0:02:32.440 Rumberg's Dana Wellman were we impressed by the lineup. We've 0:02:32.440 --> 0:02:34.280 been waiting a long time, you know. 0:02:34.400 --> 0:02:36.840 It's interesting, as you say, this is the first iPad 0:02:36.880 --> 0:02:39.600 news we received from the company in almost two years, 0:02:39.639 --> 0:02:43.120 perhaps a year and a half, and the announcement felt 0:02:43.120 --> 0:02:47.079 incomplete to me. This announcement was as I think we expected, 0:02:47.120 --> 0:02:50.120 all about the hardware. The iPads are thinner than before, 0:02:50.160 --> 0:02:53.480 they're lighter, they're faster as you'd expect, and Apple did 0:02:53.480 --> 0:02:57.960 make a hint at the device's AI capabilities. There's so 0:02:58.160 --> 0:03:01.800 much that is still unanswered, clearly about the software experience, 0:03:01.880 --> 0:03:05.560 and as I imagine everyone is thinking, the AI capabilities, 0:03:06.280 --> 0:03:08.320 the company isn't expected to get into any of that 0:03:08.520 --> 0:03:12.120 until it's annual Software Developer conference, which usually takes place 0:03:12.240 --> 0:03:16.000 in early June. So right now we've got some promising notes. 0:03:16.000 --> 0:03:18.400 We know a lot about the hardware. We're still wondering 0:03:18.440 --> 0:03:20.760 in a sense, what can it do fully with the 0:03:20.760 --> 0:03:23.720 software and who is it for? And I only say 0:03:23.720 --> 0:03:27.160 that because the devices are so increasingly laptop like. Yes, 0:03:27.320 --> 0:03:29.840 but Apple also sells laptops, which we're not mentioned today. 0:03:30.040 --> 0:03:30.720 Yeah, So I. 0:03:30.639 --> 0:03:33.680 Mean, for me as a commuter, an iPad makes an 0:03:33.720 --> 0:03:36.640 awful lot of sense. But if you're a designer, if 0:03:36.640 --> 0:03:38.560 you're someone who's wanting the power of a Mac, you 0:03:38.640 --> 0:03:41.080 ever going to be getting this and an iPad? 0:03:41.120 --> 0:03:43.720 Or who do you think the overall consumer is? 0:03:43.720 --> 0:03:50.240 From real perspective, I think these are perhaps laptop replacements 0:03:50.320 --> 0:03:53.720 or secondary laptops, if you will. It's interesting to me 0:03:54.200 --> 0:03:57.960 the higher end iPads here are the first iPads that 0:03:58.120 --> 0:04:01.560 have o LED screens, and this is just in shorthand 0:04:01.640 --> 0:04:04.680 a much more advanced screen technology than even the MAX 0:04:04.720 --> 0:04:08.320 have right now. Some competing PC makers do have laptops 0:04:08.320 --> 0:04:10.560 that have old screens, but not Max. So if you're 0:04:10.600 --> 0:04:14.040 looking for a laptop like experience with a really superior display. Actually, 0:04:14.080 --> 0:04:16.880 the iPads might be a better choice than some max. 0:04:17.279 --> 0:04:19.560 People are liking the stylist, liking the ability with which 0:04:19.560 --> 0:04:22.720 you can interact with it as well. Overall, though we've 0:04:22.760 --> 0:04:25.360 been waiting and waiting, do you think ultimately the fact 0:04:25.360 --> 0:04:28.480 that we've been sort of a drought of new iPads 0:04:28.520 --> 0:04:30.960 will just galvanize demand going into this product? 0:04:31.320 --> 0:04:34.280 Apple would certainly certainly hope. So the most recent quarter 0:04:34.360 --> 0:04:37.240 was particularly disappointing for Apple in terms of iPad sales, 0:04:37.920 --> 0:04:39.600 And it would make sense when you remember that the 0:04:40.200 --> 0:04:44.200 hardware really was so stale, And consumers aren't stupid, They 0:04:45.160 --> 0:04:48.800 do know, they understand something about the rhythm of iPad 0:04:49.200 --> 0:04:52.800 and Apple update cycles in general. And I wouldn't be 0:04:52.880 --> 0:04:55.320 too keen on buying something that hadn't been updated in 0:04:55.920 --> 0:04:58.960 over a year, knowing that Apple is likely to have 0:04:59.000 --> 0:05:01.280 an update around the corner just about any time. 0:05:01.720 --> 0:05:04.120 And then we have the handwringing issue of Apple being 0:05:04.160 --> 0:05:06.000 behind the curve, so to speak, when it comes to 0:05:06.040 --> 0:05:09.880 artificial intelligence. Many would say, look, just it always comes 0:05:09.880 --> 0:05:12.960 in a little bit slower, but then comes with strength. 0:05:13.480 --> 0:05:16.200 Are you feeling from an investor perspective, but from a 0:05:16.320 --> 0:05:19.000 user perspective that AI on an iPad or AI on 0:05:19.040 --> 0:05:21.040 device is really going to be a winning formula for Apple. 0:05:22.160 --> 0:05:26.040 Yes, I expect Apple to have some interesting news. I 0:05:26.040 --> 0:05:27.960 don't know what it's going to be, but I do 0:05:28.000 --> 0:05:30.839 believe Apple is going to be talking quite a bit 0:05:30.880 --> 0:05:34.200 about AI and it's coming conference. I also think, to 0:05:34.240 --> 0:05:37.960 some extent, this is a little bit about marketing and 0:05:38.000 --> 0:05:41.239 the language that Apple has chosen to use. I remember 0:05:41.320 --> 0:05:44.279 there was a different competing software conference, it may have 0:05:44.279 --> 0:05:46.560 been Google about a year ago, and they would not 0:05:46.640 --> 0:05:50.200 stop saying AI. You can choose to say AI over 0:05:50.279 --> 0:05:52.480 and over again. Does that make it true that you 0:05:52.520 --> 0:05:54.400 have invested more in AI and that you're doing a 0:05:54.400 --> 0:05:58.200 better job. I think a lot of what Apple already 0:05:58.240 --> 0:06:00.839 has in its products is to an extent AI powered. 0:06:00.880 --> 0:06:03.720 Even if they're not using the words AI, I do 0:06:03.720 --> 0:06:07.679 think they have more to share and need to say more, 0:06:07.760 --> 0:06:11.240 if not to actually catch up, to at least at 0:06:11.240 --> 0:06:14.360 the very least correct the perception that they have lagged 0:06:14.360 --> 0:06:15.240 behind the competition. 0:06:15.440 --> 0:06:17.640 A bit of pring, a little bit of storytelling here. 0:06:17.800 --> 0:06:19.680 When you've already got the M four ship in there, 0:06:19.800 --> 0:06:21.919 which makes it AI ready. There, we have the stylist 0:06:21.920 --> 0:06:24.520 that we can currently see. Daniel Woman so great to 0:06:24.560 --> 0:06:27.400 have you on the same launch day from Bloomberg. 0:06:27.480 --> 0:06:28.000 We thank her. 0:06:35.480 --> 0:06:37.880 After that board fight, there was one. We now see 0:06:37.880 --> 0:06:40.440 some money coming off the table of Disney when it 0:06:40.440 --> 0:06:43.080 comes to its share price because earnings are out and 0:06:43.120 --> 0:06:46.120 there was some caution ahead when it comes to subscriber growth. 0:06:46.120 --> 0:06:48.119 But let's dig into where the numbers actually did manage 0:06:48.120 --> 0:06:50.200 to beat. I'm looking at earnings for share looking strong 0:06:50.240 --> 0:06:53.160 for Disney overall. We're also seeing the fact that they 0:06:53.200 --> 0:06:56.960 are on course to mainly focus on profitability come the 0:06:56.960 --> 0:06:59.520 fiscal next quarter. Even by the fourth quarter, you can 0:06:59.560 --> 0:07:02.560 see profit ability in their streaming unit and we're seeing 0:07:02.600 --> 0:07:04.719 those still by seven point four percent over the last 0:07:04.720 --> 0:07:06.920 two trading days for Disney, and a lot of this 0:07:06.960 --> 0:07:08.680 is coming because there's still a lot of weakness and 0:07:08.720 --> 0:07:11.440 TV in cable. Of course, they have the twin strikes 0:07:11.520 --> 0:07:13.840 that impacted the amount of revenue that they're getting overall 0:07:13.880 --> 0:07:16.880 from their movies, and maybe we're seeing well a steer 0:07:16.960 --> 0:07:20.240 towards a slowing and insatiable demand to be getting to 0:07:20.280 --> 0:07:23.120 those parks and on those boats that Disney has as well. 0:07:23.200 --> 0:07:24.680 We spoke the CFO Hugh. 0:07:24.600 --> 0:07:27.640 Johnston a little bit earlier and just hear his cautious take. 0:07:28.800 --> 0:07:31.200 The quarter was really a strong one for US, seventeen 0:07:31.200 --> 0:07:33.720 percent of I growth, thirty percent EPs growth. 0:07:34.040 --> 0:07:36.120 That's what led us to raise guidance. 0:07:35.760 --> 0:07:38.360 To twenty five percent EPs growth for the full year, 0:07:38.360 --> 0:07:39.800 which is obviously quite strong. 0:07:40.760 --> 0:07:43.600 Two big stories I think here. Number one, you were just. 0:07:43.600 --> 0:07:47.720 Talking about our experiences business was up ten percent on 0:07:47.760 --> 0:07:50.160 a revenue basis, twelve percent on an a. 0:07:50.320 --> 0:07:52.240 Y basis, and the park's. 0:07:52.000 --> 0:07:55.840 Business was actually up thirteen percent on OI, So we 0:07:55.920 --> 0:07:56.640 do feel. 0:07:56.360 --> 0:07:57.080 Good about that. 0:07:57.600 --> 0:08:00.880 Obviously, I watch other stocks report and seen the value 0:08:00.880 --> 0:08:04.600 consumer is really struggling a bit and making choices right now. 0:08:04.880 --> 0:08:07.480 We're not really seeing as much of that in our 0:08:07.560 --> 0:08:09.080 portfolio of products. 0:08:09.760 --> 0:08:12.640 The other positive for US is obviously the streaming service. 0:08:13.520 --> 0:08:16.320 Last year we lost about six hundred million dollars. This 0:08:16.440 --> 0:08:18.960 year we're about break even and we saw twelve percent 0:08:19.040 --> 0:08:22.080 revenue growth, So we're encouraged by the progress we've made 0:08:22.120 --> 0:08:24.800 in that business in a relatively short period of time. 0:08:25.080 --> 0:08:27.000 Hugh, you said that you're not seeing that kind of 0:08:27.000 --> 0:08:30.040 price sensitivity. How much could you increase prices in from here? 0:08:30.400 --> 0:08:33.480 It's a great question we took prices up a little 0:08:33.520 --> 0:08:37.120 bit in the beginning of this year and didn't really 0:08:37.160 --> 0:08:39.800 see much of an impact. So as to what the 0:08:39.840 --> 0:08:42.800 future brings, we're obviously very judicious with the way that 0:08:42.840 --> 0:08:45.760 we price. We want to provide access to as many 0:08:46.240 --> 0:08:49.560 guests as we possibly can, but we do believe that 0:08:49.400 --> 0:08:53.200 the great experiences we provide people are willing to pay for. 0:08:53.520 --> 0:08:53.679 Hugh. 0:08:53.760 --> 0:08:55.800 Over the past six months, we've been talking about the 0:08:55.840 --> 0:08:59.520 cost cutting operations in Disney. Have we finished some of 0:08:59.559 --> 0:09:02.160 the shrink have we finished the pairing back and are 0:09:02.160 --> 0:09:04.240 you back on some sort of growth trajectory. 0:09:04.360 --> 0:09:07.240 We are definitely back on a growth trajectory. That said, 0:09:07.840 --> 0:09:10.560 we're always going to be looking hard at our cost structure, 0:09:10.720 --> 0:09:14.160 in particular looking to reduce costs where perhaps they add 0:09:14.240 --> 0:09:16.800 less value than they used to, and redeploy some of 0:09:16.840 --> 0:09:19.160 that money back into the business so that we can 0:09:19.200 --> 0:09:21.760 actually grow the balance of the business. So I think 0:09:21.760 --> 0:09:24.520 that's a never ending exercise of looking for ways to 0:09:24.559 --> 0:09:26.600 be more efficient as a company so that you can 0:09:26.600 --> 0:09:27.640 invest in your future. 0:09:27.960 --> 0:09:30.679 When you talk about growing, where is that growth focused on? 0:09:30.760 --> 0:09:31.520 Geographically? 0:09:31.559 --> 0:09:33.120 We know that in the US you've got a very 0:09:33.160 --> 0:09:37.360 strong parks business. In Europe there also is a parks presence. 0:09:37.360 --> 0:09:40.360 But in Asia, in particular in China, that has been 0:09:40.480 --> 0:09:43.040 a growth area. Is it still how much can that 0:09:43.080 --> 0:09:45.960 be a bright spot at a time of increasing geopolitical tensions? 0:09:46.440 --> 0:09:48.920 Yeah, I do think not just China, but all of 0:09:48.960 --> 0:09:52.880 Asia represent growth opportunities for us, both in terms of 0:09:52.920 --> 0:09:55.760 the streaming service and select markets as well as in 0:09:55.880 --> 0:09:58.760 terms of the parks and cruises business. So we do 0:09:58.800 --> 0:10:02.080 see good growth oport tunities there. Europe and Latin America 0:10:02.120 --> 0:10:05.040 continue to be good growth opportunities. And make no mistake, 0:10:05.120 --> 0:10:07.559 North America we're not done growing yet. We still think 0:10:07.559 --> 0:10:09.760 there are terrific opportunities here for us right at home. 0:10:09.880 --> 0:10:12.520 When it comes to Asia Pacific, is it domestic demand 0:10:12.559 --> 0:10:15.920 within those countries, specifically China or is it tourists in 0:10:15.960 --> 0:10:16.440 the region. 0:10:17.080 --> 0:10:19.920 Combination of botho't I wouldn't tie it to one or 0:10:19.920 --> 0:10:20.160 the other. 0:10:20.200 --> 0:10:21.440 I think it's a combination of both. 0:10:21.920 --> 0:10:24.400 And when you look at China, to Lisa's point, you 0:10:24.400 --> 0:10:29.800 know we're going into a very heated political election coming 0:10:29.880 --> 0:10:33.560 up in November, very hot rhetoric regarding China. Is it 0:10:33.760 --> 0:10:38.400 becoming more challenging to deal with authorities in Beijing and 0:10:38.520 --> 0:10:43.360 business on the ground. Given the increased geopolitical tensions, it. 0:10:43.280 --> 0:10:44.439 Has not been for us. 0:10:44.480 --> 0:10:46.960 You know, one of the benefits of what we do 0:10:47.040 --> 0:10:49.680 for a living is, you know, we make people smile. 0:10:49.760 --> 0:10:52.280 We bring them happiness, right, we bring them the most 0:10:52.280 --> 0:10:56.319 magical place on earth. Candidly, the government's investing in infrastructure 0:10:56.320 --> 0:10:58.079 to make it easier for guests to get to. 0:10:58.120 --> 0:10:58.920 And from the park. 0:10:59.480 --> 0:11:02.120 Were containing to invest in that park in order to 0:11:02.440 --> 0:11:03.120 drive growth. 0:11:03.320 --> 0:11:04.920 It's doing better now than it ever has. 0:11:05.000 --> 0:11:09.280 So we're the fortunate beneficiaries of bringing people joy in 0:11:09.280 --> 0:11:10.120 a world that needs it. 0:11:11.280 --> 0:11:14.720 Hugh Johnston Disney CFO there coming up. Actually, we're going 0:11:14.800 --> 0:11:17.360 to be hearing from the former Google CEO, Eric Schmidt 0:11:17.559 --> 0:11:20.640 on China as well as his think tank holds its 0:11:20.679 --> 0:11:24.720 first ever AIXPO on competitiveness. 0:11:23.840 --> 0:11:24.559 In that field. 0:11:25.240 --> 0:11:27.480 Meanwhile, let's just have a little little look on what's 0:11:27.520 --> 0:11:31.400 happening on the sharefront of Infinian. Now here's a chip 0:11:31.440 --> 0:11:34.800 focused business that's looking at China as well, looking. 0:11:34.520 --> 0:11:35.840 At auto demand. 0:11:36.000 --> 0:11:39.240 Basically, it's chips within evs saying China is actually bottoming 0:11:39.280 --> 0:11:40.880 the seeing healthy demand there. 0:11:40.720 --> 0:11:43.440 For Infinian product products. We're not more than twelve percent. 0:11:43.520 --> 0:11:47.960 Yet another key chip designer or maker or builder that 0:11:48.080 --> 0:11:50.080 is showing that maybe we've just seen the botted out 0:11:50.240 --> 0:11:52.640 in terms of the ev lackluster demand that we've seen 0:11:52.640 --> 0:11:53.000 of late. 0:11:53.679 --> 0:12:10.199 This has greenbod technology time now for talking tech. 0:12:10.240 --> 0:12:13.280 First up, Nintendo says a successor to its seven year 0:12:13.320 --> 0:12:15.280 old Switch game console is on the way now. The 0:12:15.280 --> 0:12:18.360 announcement is course coming after its forecasts a bigger than 0:12:18.400 --> 0:12:21.319 expected profit decline for the current fiscal year. Now, in 0:12:21.360 --> 0:12:23.480 a post on x, the company's president said the new 0:12:23.520 --> 0:12:25.600 device is set to be announced in the coming year. 0:12:26.040 --> 0:12:29.000 Fans investors they have long been waiting on this news 0:12:29.040 --> 0:12:31.240 of a succession plan for the twenty seventeen gadget, which 0:12:31.240 --> 0:12:32.800 has sold more than one hundred and forty one million 0:12:32.920 --> 0:12:37.080 units since his debut. Plus, chip maker Nvidia is investing 0:12:37.160 --> 0:12:40.080 in UK autonomous driving tech startup Wave in a one 0:12:40.120 --> 0:12:43.040 point zero five billion dollar funning round. The venture is 0:12:43.040 --> 0:12:45.680 actually led by SoftBank Group and existing back of Microsoft. 0:12:46.040 --> 0:12:48.680 Is one of the largest ever for a European AI company. Now, 0:12:48.720 --> 0:12:52.319 the cash injection underscores that continued DEMANDRAI, especially among the 0:12:52.400 --> 0:12:56.719 auto's industry. Valuation of Wave not disclosed. Meanwhile, talking of 0:12:56.960 --> 0:12:59.880 evs and autonomous vehicles. Tesla faces in July first dead 0:12:59.880 --> 0:13:03.480 lie to submit information to US regulators our concerns about 0:13:03.480 --> 0:13:05.800 its autopilot system now the electric car make it issued 0:13:05.880 --> 0:13:08.400 a recal remember of over two million vehicles back in 0:13:08.440 --> 0:13:11.439 December or reports of drivers crashing while using the future. 0:13:11.679 --> 0:13:14.960 The National Highway Traffic Safety Administration says it has opened 0:13:15.040 --> 0:13:17.160 up a query as to whether it has a software 0:13:17.200 --> 0:13:22.040 update was sufficient in preventing crashes. Now today is the 0:13:22.160 --> 0:13:25.920 Special Competitive Studies Project and it's kicking off its first 0:13:26.000 --> 0:13:30.559 ever AI Expo for national competitiveness over in Washington. I 0:13:30.679 --> 0:13:34.320 sat down with the SCSP chair and former Google CEO 0:13:34.520 --> 0:13:37.800 Eric Schmidt to discuss how the US is going on 0:13:38.200 --> 0:13:39.120 in the AI race. 0:13:40.120 --> 0:13:42.040 Well, the good news is the US is way ahead 0:13:42.040 --> 0:13:44.080 of China and everybody else, and I think that's going 0:13:44.160 --> 0:13:47.800 to continue for a while. To me, national competitiveness is 0:13:47.920 --> 0:13:50.720 the challenge for the next ten or twenty years, because 0:13:50.760 --> 0:13:55.000 the Chinese are really focused on dominating certain industries and 0:13:55.480 --> 0:13:56.600 we need to compete with. 0:13:56.720 --> 0:13:57.920 Them and make sure we win. 0:13:58.720 --> 0:14:01.720 In the case of artificial intelligence, we are well ahead 0:14:02.200 --> 0:14:04.599 two or three years. Probably we have China, which in 0:14:04.679 --> 0:14:07.360 my world is in eternity. I think we're in pretty 0:14:07.400 --> 0:14:07.839 good shape. 0:14:08.520 --> 0:14:10.400 And the crazy. 0:14:10.120 --> 0:14:14.120 Valuations, all the money, all the new experimentation, this sort 0:14:14.160 --> 0:14:17.959 of enormous adoption of AI that's occurring. We have a 0:14:18.040 --> 0:14:21.280 lot of implications on society and very good for business. 0:14:21.760 --> 0:14:26.840 What about, well, ultimately the pace of regulating artificial intelligence, 0:14:26.960 --> 0:14:29.800 is there any risk that we stifle innovation and so doing? 0:14:31.560 --> 0:14:35.440 There's always a risk of premature regulation. My simplest example 0:14:35.520 --> 0:14:38.800 there is Europe. I've spent ten years trying to convince 0:14:38.840 --> 0:14:41.320 Europe to actually innovate instead of regulate, and they just 0:14:41.440 --> 0:14:46.840 keep regulating. The current EU ACTAI EU act is essentially regulation, 0:14:47.080 --> 0:14:50.440 not investment in the future. You can see that Europe 0:14:50.520 --> 0:14:53.520 is highly unlikely to be relevant. China, of course, is 0:14:53.560 --> 0:14:57.040 struggling because of chips shortages and so forth. All that 0:14:57.120 --> 0:14:59.600 they're ready to win if they can get the harder 0:14:59.640 --> 0:15:00.440 that they need. 0:15:00.880 --> 0:15:02.920 And the rest of the world is not focused enough 0:15:03.000 --> 0:15:03.200 on this. 0:15:03.840 --> 0:15:07.400 So the good news from myself my position in terms 0:15:07.440 --> 0:15:10.360 of America, here we are in DC for national competitiveness. 0:15:10.760 --> 0:15:12.920 We're the likely winner if we don't screw it up. 0:15:12.960 --> 0:15:13.640 I'm really interested. 0:15:13.720 --> 0:15:16.000 You say, perhaps China is being pushed behind because of 0:15:16.040 --> 0:15:17.400 its lack of access to chips. 0:15:17.640 --> 0:15:20.200 Are we currently navigating that new once Well. 0:15:20.480 --> 0:15:23.520 Well, the Trump administration followed by the Biden administration did 0:15:23.560 --> 0:15:25.960 a good job in getting those rules in place. 0:15:26.440 --> 0:15:27.640 It's a good. 0:15:27.480 --> 0:15:31.120 Example and not a common example of how a targeted 0:15:31.200 --> 0:15:34.840 intervention has a positive measured outcome from the standpoint of 0:15:34.920 --> 0:15:40.080 the national security So I think we're good there. It's 0:15:40.480 --> 0:15:43.360 very important and I led the National Security Commission on 0:15:43.920 --> 0:15:47.840 Artificial Intelligence a few years ago for the Congress. It's 0:15:48.000 --> 0:15:51.240 very important that we get more basic money out of 0:15:51.280 --> 0:15:52.560 the government for basic research. 0:15:52.640 --> 0:15:54.040 We're building intelligence. 0:15:54.080 --> 0:15:57.040 We're building a new form of non human intelligence that 0:15:57.080 --> 0:16:00.720 will change the world forever in a good way. Furthermore, 0:16:00.840 --> 0:16:02.960 it needs to be done with our partner countries. These 0:16:03.000 --> 0:16:05.680 are the five Eyes of the UK, that sort of 0:16:05.760 --> 0:16:08.560 thing some of European countries. And also it needs to 0:16:08.680 --> 0:16:13.080 be done with American values. So using China as the bogeyman, 0:16:13.480 --> 0:16:15.600 imagine if they were in charge of the Internet and 0:16:15.680 --> 0:16:17.920 they were in charge of the rules, and you imagine 0:16:17.960 --> 0:16:20.440 how very different your experience as a user on the 0:16:20.480 --> 0:16:23.120 Internet would be today. You can show up, you can 0:16:23.240 --> 0:16:25.480 be anonymous, you can do whatever you want within reason 0:16:26.240 --> 0:16:28.520 that kind of freedom is central to the spirit of 0:16:28.560 --> 0:16:30.480 the Internet, and it's important to be preserved. 0:16:31.160 --> 0:16:34.880 Talking about a bogeyman, and a Chinese related bogeyman, TikTok 0:16:35.000 --> 0:16:39.000 became the bogaman that many are now trying to regulate. 0:16:38.720 --> 0:16:40.600 To indeed ban, or to sell. 0:16:40.680 --> 0:16:45.000 There's been some reporting that you've been interested, alongside Minution 0:16:45.600 --> 0:16:48.560 in potentially purchasing us TikTok. 0:16:48.600 --> 0:16:49.280 Would you still be. 0:16:51.920 --> 0:16:54.200 I'm not currently looking at that. I looked at it 0:16:54.280 --> 0:16:54.800 for a while. 0:16:55.640 --> 0:16:59.640 My personal view on this is you're better off regulating 0:16:59.720 --> 0:17:04.240 than banning or a judicial action. All the big tech 0:17:04.280 --> 0:17:06.639 companies are now in the hands of the DOJ in 0:17:06.720 --> 0:17:09.760 various legal fights. I would prefer to see a regulatory 0:17:09.880 --> 0:17:12.080 regime that is sort of has the right incentives and 0:17:12.160 --> 0:17:13.800 the right prohibitions. 0:17:13.240 --> 0:17:14.040 For all of these things. 0:17:14.560 --> 0:17:16.920 My own view of TikTok is that TikTok is not 0:17:17.040 --> 0:17:19.879 really social media, it's really television, and that you can 0:17:19.960 --> 0:17:22.600 regulate television by the equivalent of the equal time rule. 0:17:22.760 --> 0:17:24.359 But somehow we're not having that conversation. 0:17:25.520 --> 0:17:26.439 What's interesting is, of. 0:17:26.480 --> 0:17:30.080 Course, you say, many big tech companies are currently well 0:17:30.400 --> 0:17:32.960 entangled from a time perspective with the DOJ. One of 0:17:33.000 --> 0:17:35.600 them being where we know you howm from, of course, 0:17:35.720 --> 0:17:38.639 the previous CEO of Google. Where do you rate from 0:17:38.680 --> 0:17:42.200 a personal perspective, where Google is in the AI competition race. 0:17:43.520 --> 0:17:46.760 Well, it's interesting that almost all of the technology you're 0:17:46.760 --> 0:17:51.040 seeing today was invented at Google about five to ten 0:17:51.160 --> 0:17:54.680 years ago. And it's one of the sort of great 0:17:54.760 --> 0:17:57.600 things that during that period Google had a roughly, in 0:17:57.720 --> 0:18:00.480 my estimate, two thirds of the world's talent in AI 0:18:00.640 --> 0:18:02.640 was working at so Google had a very very strong 0:18:02.720 --> 0:18:06.280 head start. I think Google is a complicated place, is 0:18:06.280 --> 0:18:10.119 a lot going on. Open Ai in particular, came out 0:18:10.160 --> 0:18:12.880 with GPT three three point five and four and did. 0:18:12.800 --> 0:18:13.920 A fantastic job. 0:18:14.359 --> 0:18:17.440 I think that was the competitive nudge that has gotten 0:18:17.640 --> 0:18:20.159 Google back in the game. What I like now is 0:18:20.240 --> 0:18:23.880 you have these two huge companies, Microsoft and open Ai 0:18:24.040 --> 0:18:28.399 together and Google Google Alphabet again operating together, and you 0:18:28.520 --> 0:18:33.200 have them putting billions of dollars hardware and enormous software 0:18:33.240 --> 0:18:35.879 teams to invent this new future. This is not to 0:18:35.960 --> 0:18:40.800 take away from Anthropic, another competitor. Obviously, whatever Elon is 0:18:40.840 --> 0:18:43.040 doing with x dot ai, he's raising a huge amount 0:18:43.040 --> 0:18:45.880 of money, and Meta has recently released a four hundred 0:18:45.920 --> 0:18:47.800 billion parameter modelers and the. 0:18:47.840 --> 0:18:48.720 Process of releading it. 0:18:48.800 --> 0:18:52.560 That looks really, really good, So that competition is the 0:18:52.720 --> 0:18:57.440 right answer to the regulators and to everyone's question. Competition 0:18:57.760 --> 0:19:03.000 brings out enormous value to consumers. And eventually people will 0:19:03.000 --> 0:19:05.280 see this and they'll say, oh my god, look at 0:19:05.320 --> 0:19:05.800 what this does. 0:19:05.840 --> 0:19:06.400 And it's free. 0:19:06.800 --> 0:19:09.200 And of course all that money was paid out of 0:19:09.240 --> 0:19:11.800 the markets, billions of dollars that's going in right now, 0:19:11.880 --> 0:19:13.320 and they'll monetize it somehow. 0:19:14.200 --> 0:19:16.800 Omer Google CEO Eric Schmidt there and of course the 0:19:16.880 --> 0:19:19.440 current chair of the SCSP coming up. We're going to 0:19:19.480 --> 0:19:23.160 continue the conversation on artificial intelligence competition with the CEO 0:19:23.440 --> 0:19:26.920 of that organization, the SCSP. Meanwhile, let's just stick with 0:19:27.040 --> 0:19:29.639 China and national security now. It was likely behind a 0:19:29.720 --> 0:19:32.880 recent hack into the personal data a British Armed Forces. 0:19:32.600 --> 0:19:34.320 Personnel scored into sources. 0:19:34.600 --> 0:19:37.159