WEBVTT - Fed’s Waller Needs Several More Good Inflation Prints to Cut 0:00:02.920 --> 0:00:10.719 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business 0:00:10.720 --> 0:00:13.960 Wait inside, from the reporters and editors who bring you 0:00:14.000 --> 0:00:18.360 America's most trusted business magazine, plus global business, finance and 0:00:18.400 --> 0:00:22.680 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:23.040 --> 0:00:25.800 and Tim Stenebek from Bloomberg Radio. 0:00:27.040 --> 0:00:29.240 All Right, everybody, Yes, TikTok, We're in a wait and 0:00:29.280 --> 0:00:30.400 see mode. 0:00:30.440 --> 0:00:30.720 We know. 0:00:30.800 --> 0:00:33.199 Also, hi for longer. We've heard this from a lot 0:00:33.200 --> 0:00:35.559 of FED speakers. The latest to weigh in on all 0:00:35.560 --> 0:00:38.600 of this, Federal Reserve Governor Christopher Waller, in a speech 0:00:38.720 --> 0:00:42.519 today at the Peterson Institute for International Economics. 0:00:42.560 --> 0:00:45.640 In the absence of significant weakening in the labor market, 0:00:46.040 --> 0:00:48.479 I need to see several more months of good inflation 0:00:48.600 --> 0:00:52.440 data before I would be comfortable supporting and easing in 0:00:52.479 --> 0:00:54.120 the stance of monetary policy. 0:00:55.000 --> 0:00:58.480 Again, that's Federal Reserve Governor Christopher Waller, a wash in 0:00:58.600 --> 0:01:01.920 FED speak and talking FED president's firsthand is our own 0:01:02.040 --> 0:01:05.600 Michael McKee, Mike's Bloomberg News International economics and policy correspondent. 0:01:05.800 --> 0:01:08.640 He's joining us from Amelia Island in Florida, where the 0:01:08.680 --> 0:01:13.039 Atlanta Fed hosts its annual Financial Markets conference, where'd everybody go, Mike, Are. 0:01:13.000 --> 0:01:14.800 You get any time outside, Mike, or is it just 0:01:14.840 --> 0:01:16.240 are you in a conference room the whole time? 0:01:16.240 --> 0:01:19.800 I mean the pictures, I'm not getting much time outside. 0:01:20.040 --> 0:01:22.520 Everybody's in the conference room right behind me. 0:01:22.600 --> 0:01:24.759 Right now. They're talking about the future of. 0:01:24.760 --> 0:01:28.000 The US dollar overseas, which of course everybody has on 0:01:28.080 --> 0:01:31.240 their minds because the FED has higher interest rates than 0:01:31.280 --> 0:01:31.960 the rest of the world. 0:01:32.040 --> 0:01:33.680 The dollar keeps getting stronger. 0:01:34.640 --> 0:01:37.920 But it's been interesting because there really isn't a whole 0:01:37.959 --> 0:01:40.160 lot of disagreement from FED officials. 0:01:40.720 --> 0:01:43.959 Some of them, like Grafael Bostik, put a number on how. 0:01:43.880 --> 0:01:46.440 Many cuts we might get this year, maybe one, he says, 0:01:46.680 --> 0:01:49.639 And others don't even have a number. They're just saying, well, 0:01:49.840 --> 0:01:51.800 we think we might be able to cut rates, but 0:01:51.840 --> 0:01:55.000 we're going to watch those inflation numbers as they come in. 0:01:55.640 --> 0:01:58.360 Well, as Carol mentioned, she's got a countdown going. We're 0:01:58.360 --> 0:02:01.920 eleven days away from the black period beginning for the FED. 0:02:02.200 --> 0:02:04.560 That's ahead of course of the next FED meeting. And 0:02:04.560 --> 0:02:08.680 I'm wondering what taken this taken today and yesterday and 0:02:08.720 --> 0:02:11.839 all the FED speakers that we've heard in various locations 0:02:12.040 --> 0:02:14.320 around the country. What it all means for that next 0:02:14.320 --> 0:02:16.560 policy meeting, which does come out on June. 0:02:16.400 --> 0:02:19.799 Twelfth, Well, it probably means we're not going to see 0:02:19.800 --> 0:02:22.080 any kind of move at all, because they all want 0:02:22.120 --> 0:02:25.280 more time and more data. What will be interesting is 0:02:25.440 --> 0:02:28.200 the summary of economic projections, what they think is going 0:02:28.240 --> 0:02:32.280 to happen in terms of inflation, growth and unemployment. And 0:02:32.320 --> 0:02:35.160 then of course the infamous dot plot. They've got to 0:02:35.200 --> 0:02:37.160 put some dots on the plot, so they'll have to 0:02:37.160 --> 0:02:39.800 put some numbers to it. We won't know who exactly 0:02:40.000 --> 0:02:41.960 is whom, except. 0:02:41.560 --> 0:02:42.799 That if. 0:02:44.160 --> 0:02:46.839 Rafael Bastik is just going to do one cut, maybe 0:02:46.840 --> 0:02:49.720 we can figure his out. But it will be interesting 0:02:49.720 --> 0:02:52.240 to see how far they back off of what they 0:02:52.280 --> 0:02:55.240 put out in March, which was for three cuts. And 0:02:55.320 --> 0:02:59.320 as Laurenamester said yesterday to us on Bloomberg, that's off 0:02:59.360 --> 0:02:59.960 the table. Now. 0:03:00.240 --> 0:03:02.040 Yeah, I mean this is what's interesting, right Mike, and 0:03:02.040 --> 0:03:04.480 their commentary they can kind of come in haul a 0:03:04.480 --> 0:03:06.840 little bit or be a little bit vague, but you know, 0:03:06.880 --> 0:03:08.600 it's like pin the tail and donkey. At some point 0:03:08.600 --> 0:03:10.520 you got to stick a pin in the dot plot 0:03:10.600 --> 0:03:11.880 and like make your projections. 0:03:13.320 --> 0:03:16.160 Yeah, and they know it's a problem because they know 0:03:16.560 --> 0:03:19.520 they don't know what they're going to do. They're waiting 0:03:19.680 --> 0:03:23.160 for this data now. Chris Waller made the point today 0:03:23.240 --> 0:03:27.040 that the FED is not overly dated dependent, as someone 0:03:27.040 --> 0:03:31.240 on Wall Street have argued, because the FED is looking 0:03:31.360 --> 0:03:35.360 at the data but not doing anything yet they haven't 0:03:35.560 --> 0:03:36.360 bounced around. 0:03:36.440 --> 0:03:37.960 It's the markets that have. 0:03:38.000 --> 0:03:41.400 Been overly data dependent, going up and down and pricing 0:03:41.440 --> 0:03:44.760 in and pricing out FED moves, while the FED has 0:03:44.840 --> 0:03:47.920 just sat there waiting for evidence that would enable it 0:03:47.960 --> 0:03:51.320 to move. So he doesn't think that they're guilty of 0:03:52.120 --> 0:03:56.000 being too data and driven, but that's the situation. They're 0:03:56.000 --> 0:03:58.560 not going to move until they see the right kind 0:03:58.560 --> 0:04:00.600 of data. So even what we get out of a 0:04:00.680 --> 0:04:04.000 dot plot in June may not mean that much. 0:04:04.440 --> 0:04:07.000 Mike, you mentioned that a lot of the folks on 0:04:07.080 --> 0:04:09.400 the Federal Reserve who we've heard from in recent days 0:04:09.520 --> 0:04:11.520 haven't had a lot of variation when it comes to 0:04:11.520 --> 0:04:14.560 their opinions about the path of interest rates or high 0:04:14.600 --> 0:04:17.240 for longer, or when to move rates lower. And I'm 0:04:17.240 --> 0:04:20.360 wondering if, in your years of covering the FED and 0:04:20.680 --> 0:04:24.159 covering monetary policy, if it's pretty atypical to have this 0:04:24.279 --> 0:04:25.440 much widespread agreement. 0:04:27.279 --> 0:04:29.160 It depends on the situation totally. 0:04:29.560 --> 0:04:32.400 We had this kind of agreement in the early two 0:04:32.480 --> 0:04:36.040 thousands when the FED raise interest rates seventeen times by 0:04:36.080 --> 0:04:38.960 twenty five basis points at a time. Everybody knew what 0:04:39.000 --> 0:04:41.360 they were going to do, and they had pretty much 0:04:41.440 --> 0:04:45.120 telegraphed it, so it wasn't a surprise. And obviously when 0:04:45.160 --> 0:04:47.560 you have a crisis like the pandemic or even the 0:04:47.560 --> 0:04:51.080 Great Financial Crisis, when they cut rates dramatically. 0:04:50.560 --> 0:04:53.000 Everybody knew that they'd all be on board for that. 0:04:53.400 --> 0:04:57.279 The real dissents came in the days maybe back in 0:04:57.320 --> 0:05:00.839 the nineteen nineties and earlier, when there were questions about 0:05:00.920 --> 0:05:04.800 how much and whether they should move given inflation. We 0:05:04.839 --> 0:05:08.240 haven't had significant inflation since then, so it hasn't been 0:05:08.279 --> 0:05:09.480 a huge issue. 0:05:09.920 --> 0:05:14.080 Hey, Mike, listen, you have seen lots of market cycles, 0:05:14.120 --> 0:05:17.200 and you have talked to tons of different of FED 0:05:17.240 --> 0:05:21.320 speakers over the years, and you've talked to them before crises, 0:05:21.400 --> 0:05:26.480 post crises, you know, Pandemic, GFC, Great Financial Crisis. So 0:05:26.560 --> 0:05:28.839 I do wonder, as you like, is there a mood, 0:05:28.920 --> 0:05:30.680 Is there a tone that you are feeling at this 0:05:30.760 --> 0:05:32.560 time from all of these folks are kind of where 0:05:32.560 --> 0:05:35.119 we are. They kind of like, listen, guys, we're almost there, 0:05:35.240 --> 0:05:37.480 Like we got this. It's you know, things are kind 0:05:37.520 --> 0:05:39.440 of moving along like we wanted. I don't know, how 0:05:39.440 --> 0:05:41.119 do you characterize. 0:05:40.480 --> 0:05:43.240 It, Well, it may be a little bit Carol. 0:05:43.600 --> 0:05:45.640 As a mommy, you'll understand this when you tell your 0:05:46.000 --> 0:05:49.359 daughter I got this, but you're not really sure. But 0:05:49.520 --> 0:05:52.440 you're the authority figure, so you have to say. 0:05:52.200 --> 0:05:52.800 I got this. 0:05:53.279 --> 0:05:56.840 That's kind of the situation they're in. I haven't seen 0:05:56.880 --> 0:06:00.800 this much uncertainty about the economy among FED officials in 0:06:00.839 --> 0:06:02.480 a very long time, if ever. 0:06:02.680 --> 0:06:04.960 Because the pandemic up ended all of. 0:06:04.960 --> 0:06:07.960 Their models and all of the prior history that they 0:06:08.080 --> 0:06:10.440 used to draw from and try to figure out where 0:06:10.480 --> 0:06:10.880 they are. 0:06:10.920 --> 0:06:14.440 And they admit it's still kind of that way. They 0:06:14.520 --> 0:06:15.280 think they. 0:06:15.080 --> 0:06:17.080 Know what's going to happen, but they have a great 0:06:17.920 --> 0:06:21.400 deal of humility about it because they've been wrong before 0:06:21.520 --> 0:06:24.640 coming out of this pandemic, because they get a misleading 0:06:24.720 --> 0:06:25.640 view of the economy. 0:06:25.720 --> 0:06:28.280 I still hope my daughter isn't listening because Mike, that's 0:06:28.360 --> 0:06:31.600 kind of figure out. Yeah, yeah, I got this. Hey, 0:06:31.640 --> 0:06:34.599 one last question, there are those some economic data points 0:06:34.680 --> 0:06:36.520 or what are the economic data points to keep an 0:06:36.520 --> 0:06:38.360 eye on ahead of that June meeting. 0:06:39.839 --> 0:06:42.599 Well, on May thirty, first, we're going to get the 0:06:42.760 --> 0:06:46.440 PCE inflation numbers, and those will be important because obviously. 0:06:46.040 --> 0:06:48.120 That's the indicator that the Fed follows. 0:06:48.720 --> 0:06:52.320 Interesting thing is the nerds who go into this stuff 0:06:52.800 --> 0:06:55.680 have a pretty good track record of forecasting EZE and 0:06:55.720 --> 0:06:56.600 they think it's going to. 0:06:56.560 --> 0:07:00.719 Come down a little more than CPI. That would be 0:07:00.720 --> 0:07:01.200 good news. 0:07:01.200 --> 0:07:04.200 But then we get CPI again on the day of 0:07:04.320 --> 0:07:06.960 the Fed meeting, so if there were some disaster in 0:07:07.000 --> 0:07:09.360 those numbers, they could make a last minute change in 0:07:09.800 --> 0:07:12.320 their plans. Of course, Jobs Day, we get Jobs Day 0:07:12.320 --> 0:07:15.200 the first week of June, and that's always a fun time. 0:07:15.360 --> 0:07:17.120 Well, don't look over your shoulder, but the nerds are 0:07:17.160 --> 0:07:19.520 coming for you, so just be careful there, all right. 0:07:19.520 --> 0:07:21.840 Michael McKee always great to check in with you, of course, 0:07:21.840 --> 0:07:25.640 our Michael McKee, international Economics and Policy correspondent there at 0:07:25.680 --> 0:07:27.160 Amelia Island in Florida. 0:07:28.000 --> 0:07:31.520 You're listening to the Bloomberg Business Week podcast. Catch us 0:07:31.560 --> 0:07:34.800 live weekday afternoons from two to five pm Eastern Listen 0:07:34.840 --> 0:07:37.000 on Apple card Play and then brout Auto with a 0:07:37.040 --> 0:07:41.200 Bloomberg Business app or watch us live on YouTube. 0:07:42.240 --> 0:07:45.560 She played an AI virtual assistant in the twenty thirteen 0:07:45.640 --> 0:07:49.240 film Her declined an offer from open ai CEO Sam 0:07:49.280 --> 0:07:51.960 Altman that was back in September about voicing an audio 0:07:52.000 --> 0:07:56.280 feature for the company's popular chat GPT chatbot, only tim 0:07:56.360 --> 0:08:00.520 to be shocked, angered, and in disbelief her words, when 0:08:00.600 --> 0:08:03.600 last week open ai released new audio tools and stage 0:08:03.640 --> 0:08:07.680 demonstrations that included a voice called Sky that sounded a 0:08:07.720 --> 0:08:08.480 lot like her. 0:08:08.720 --> 0:08:11.600 That her that Carol is referring to as actress Scarlett Johansson, 0:08:11.640 --> 0:08:14.120 who says she was quote forced to hire legal counsel 0:08:14.560 --> 0:08:17.160 to demand the removal of an AI voice from open 0:08:17.200 --> 0:08:20.240 ais chatbot that sounded too much like her own voice. 0:08:20.440 --> 0:08:23.239 Tracking this for us is Bloomberg News AI reporter Rachel Metz. 0:08:23.280 --> 0:08:26.800 She's in our San Francisco bureau. Okay, Rachel. It's a 0:08:26.840 --> 0:08:29.680 specific story of what happened to Scarlett Johansson, and that's 0:08:29.720 --> 0:08:31.760 a story that you write about. But there's also the bigger, 0:08:31.800 --> 0:08:34.920 broader story that matters about what and who can be 0:08:35.000 --> 0:08:38.160 manipulated in the AI world. So before we get to 0:08:38.200 --> 0:08:40.600 that part, walk us through what happened to Scarlet Johansson 0:08:40.760 --> 0:08:43.040 and then open AI's reaction to it, and then we'll 0:08:43.040 --> 0:08:45.280 get to how this illustrates things moving forward. 0:08:46.200 --> 0:08:51.080 Sure, so Scarlett Johansson sent a very angry or she 0:08:51.120 --> 0:08:55.880 put set out a very angry statement yesterday saying that 0:08:56.200 --> 0:08:59.440 she had been asked back in September if she would 0:08:59.440 --> 0:09:03.120 be interested in voicing a voice for an audio feature 0:09:03.160 --> 0:09:06.640 for Chat GPT. She was not interested in doing that, 0:09:06.679 --> 0:09:08.400 and she told the company she was not interested in 0:09:08.440 --> 0:09:11.880 doing that. The company also put out a voice feature 0:09:12.000 --> 0:09:15.920 that same month, and so these voices Sky is one 0:09:15.960 --> 0:09:19.800 of five that they released in September, and it's been available. 0:09:19.920 --> 0:09:23.160 For instance of using the Chat GPT app on an iPhone, 0:09:23.240 --> 0:09:26.200 you could use this voice. I think it kind of 0:09:26.280 --> 0:09:28.480 was a little bit under the radar to the average 0:09:28.480 --> 0:09:32.720 person until just this past week when Openingye released its 0:09:32.840 --> 0:09:37.040 new flagship model and much of its demo centered on 0:09:37.240 --> 0:09:40.319 voice interaction and they used this same Sky voice. I 0:09:40.360 --> 0:09:43.200 think a lot of people, perhaps including Scarlett Johansson, hadn't 0:09:43.240 --> 0:09:45.720 really thought, wait a minute, that sounds a lot like 0:09:45.760 --> 0:09:47.840 Scarlett Johansson until just recently. 0:09:48.000 --> 0:09:51.440 And then there was the tweet last week which we're 0:09:51.480 --> 0:09:53.839 going to put up on the screen from sam Alt. 0:09:53.840 --> 0:09:57.040 Then can I call it a tweet? The post on 0:09:57.280 --> 0:10:01.240 X you a post just one word Rachel and it's 0:10:01.320 --> 0:10:05.720 her there it is. I think that might have done something. 0:10:05.760 --> 0:10:08.640 No, I I think so. I mean it's kind of 0:10:08.640 --> 0:10:11.920 hard to say that you that that didn't refer to 0:10:11.960 --> 0:10:14.280 the movie her, to the voice from the movie her, 0:10:14.760 --> 0:10:17.120 to the her in her right, which we all know 0:10:17.160 --> 0:10:20.720 is Scarlett Johanson. I mean, different people can have different 0:10:20.760 --> 0:10:23.400 opinions about who this sky voice sounds like. And to 0:10:23.480 --> 0:10:28.120 be clear, OpenAI did say this was a voice and 0:10:28.360 --> 0:10:31.640 like our other voices, came from voice actors that we hired. 0:10:31.960 --> 0:10:34.480 It is not Scarlet Johansson's voice. But I think a 0:10:34.480 --> 0:10:36.320 lot of people do think that it sounds like her, 0:10:36.360 --> 0:10:38.679 and she clearly thinks it sounds quite a lot like her. 0:10:38.760 --> 0:10:42.000 And I think that that is really really important that 0:10:42.280 --> 0:10:45.360 Scarlet Johansson thinks it sounds like Scarlet Johansson. 0:10:45.080 --> 0:10:46.840 And Rachel they yanked it right. 0:10:47.559 --> 0:10:50.120 Yeah, so what they did the other day. It's weird 0:10:50.120 --> 0:10:51.680 to wake up to things like this, but this is 0:10:51.800 --> 0:10:52.240 this is how. 0:10:52.200 --> 0:10:53.720 It goes so new reality. 0:10:54.240 --> 0:10:56.240 I know, I was like, wait, what's happening? 0:10:56.600 --> 0:10:58.000 But so is this dream. 0:10:58.320 --> 0:11:03.080 Just yeah, exactly, just yesterday, the sky voice was paused. 0:11:03.200 --> 0:11:06.000 They said, so basically and right now, like if I 0:11:06.160 --> 0:11:09.520 open up the chat GBT app on my iPhone, what 0:11:09.600 --> 0:11:11.400 will happen is I'll see it if I want to 0:11:11.480 --> 0:11:14.320 choose a voice. But if you choose it, you won't 0:11:14.320 --> 0:11:16.360 actually get to use it. You'll be using another voice. 0:11:16.360 --> 0:11:18.479 I think right now it's another voice called Juniper. 0:11:18.800 --> 0:11:22.240 Okay, So I said that we'll talk about the bigger 0:11:22.240 --> 0:11:23.720 picture here, and that's what I want to get too, 0:11:24.080 --> 0:11:26.640 because it's sort of to me as emblematic of this 0:11:26.679 --> 0:11:31.000 world where computers and humans are becoming closer together, this 0:11:31.120 --> 0:11:34.280 idea of living in a world where maybe what we 0:11:34.400 --> 0:11:37.120 hear in an audiobook or what we see on a 0:11:37.200 --> 0:11:41.440 screen isn't necessarily the person who it's portraying it to be. 0:11:41.559 --> 0:11:42.679 So talk a little bit about that. 0:11:44.440 --> 0:11:47.000 I mean, I think that we're seeing and we have 0:11:47.080 --> 0:11:49.600 seen over the years quite a number of companies roll 0:11:49.640 --> 0:11:54.600 out assistant type devices. This would be the latest. And 0:11:55.280 --> 0:11:58.880 what is interesting, regardless of the voice about what Opening 0:11:58.880 --> 0:12:00.480 the Eye is trying to do now is with their 0:12:00.559 --> 0:12:04.080 latest model, they're saying, these voices are going to respond 0:12:04.240 --> 0:12:07.400 in essentially real time, so in a number in order 0:12:07.440 --> 0:12:10.520 of milliseconds, just like you and I would talk to 0:12:10.559 --> 0:12:12.720 each other. And we saw this on display in the demo, 0:12:13.080 --> 0:12:16.160 and that really changes the dynamics I think between a 0:12:16.240 --> 0:12:20.360 person and the technology if the technology is going back 0:12:20.360 --> 0:12:22.559 and forth with you and also is sort of adjusting 0:12:22.720 --> 0:12:25.240 in real time to the way that you're sounding, which 0:12:25.240 --> 0:12:26.600 open Aye says that it can do. 0:12:27.679 --> 0:12:29.480 But I mean, isn't there going to be Like Tim 0:12:29.480 --> 0:12:31.160 and I were talking before we get on air, I'm like, 0:12:31.240 --> 0:12:34.400 aren't there going to be images things generated? If they're 0:12:34.400 --> 0:12:37.200 pulling in all this information that's out there, that there's 0:12:37.240 --> 0:12:39.200 going to be something that looks like Tim one day 0:12:39.320 --> 0:12:42.000 or you or me, it's just going to kind of happen. 0:12:42.200 --> 0:12:45.280 Is that going to be kind of just it's just 0:12:45.320 --> 0:12:47.360 going to happen or sounds. 0:12:47.000 --> 0:12:49.640 Like us, you mean, like an avatar of you. 0:12:49.880 --> 0:12:52.480 Yeah, or something, but maybe not intentional only if you're 0:12:52.480 --> 0:12:55.520 on Fumble, I think is what we learned last week 0:12:55.520 --> 0:12:59.200 at the Bloomberg Technologies on it. That's true, But you know, 0:12:59.240 --> 0:13:03.240 if it's pulling it existing data that's out there, visual 0:13:03.360 --> 0:13:07.080 or other audio, like, isn't it going to eventually create 0:13:07.320 --> 0:13:09.760 things that look like all of us sound like all 0:13:09.760 --> 0:13:11.040 that I mean, I mean. 0:13:10.960 --> 0:13:15.800 These companies are making really intentional decisions to create voice models. 0:13:15.920 --> 0:13:16.199 There. 0:13:16.320 --> 0:13:19.440 You would for something that's gonna specifically sound like a person, 0:13:20.200 --> 0:13:22.880 you would be recording like a real voice actor's voice. 0:13:22.920 --> 0:13:25.199 This is what Opening Eye said that they did. Yeah, 0:13:25.360 --> 0:13:27.760 and this is pretty common. You would record somebody saying 0:13:27.960 --> 0:13:30.480 certain things, and then you would use that to build 0:13:30.520 --> 0:13:32.440 your voice model, and that's how you end up with 0:13:32.480 --> 0:13:34.520 like a bunch of different voices that people can choose. 0:13:34.880 --> 0:13:37.200 It is true that it is getting increasingly easy to 0:13:38.200 --> 0:13:41.000 build a like a deep fake voice of you or 0:13:41.040 --> 0:13:45.199 of I mean, someone could use this audio and build 0:13:45.200 --> 0:13:48.079 something like that pretty easily. But I mean, I think 0:13:48.080 --> 0:13:49.600 a lot of this sort of what we're sort of 0:13:49.600 --> 0:13:52.520 going around here is this issue of consent. Should people 0:13:52.559 --> 0:13:54.120 be able to do that? I think a lot of 0:13:54.200 --> 0:13:58.480 us would argue not under most circumstances unless someone explicitly 0:13:58.679 --> 0:13:59.640 approves of it, right. 0:14:00.400 --> 0:14:00.760 Yeah. 0:14:00.960 --> 0:14:03.360 The reason one of the reasons I thought of this 0:14:03.640 --> 0:14:06.440 is so interesting is because just a few months ago, 0:14:06.480 --> 0:14:09.880 back in September, we saw the union in Hollywood that 0:14:09.960 --> 0:14:14.120 represents actors come to an agreement that included limiting the 0:14:14.200 --> 0:14:17.720 use of AI and recreating performances, And I thought to myself, well, 0:14:18.040 --> 0:14:21.240 this is a situation where, you know, the likeness of 0:14:21.280 --> 0:14:25.240 Scarlett Johansson was asked for by one of the AI 0:14:25.320 --> 0:14:28.480 companies that's a leader when it comes to this technology, 0:14:28.960 --> 0:14:31.760 and it's sort of emblematic. I think Rachel of the 0:14:31.880 --> 0:14:35.560 idea that in the future, maybe we could see these 0:14:35.600 --> 0:14:41.520 representations of folks who are maybe on a screen or 0:14:41.840 --> 0:14:45.680 in some other media that are generated by machine, like 0:14:45.680 --> 0:14:47.280 that world is not too far away. 0:14:48.640 --> 0:14:51.160 I mean, I would argue we're already there. Of there 0:14:51.200 --> 0:14:55.360 are certainly representations of people's voices, people who are still 0:14:55.400 --> 0:14:58.640 alive whose voices may not work very well on like 0:14:58.720 --> 0:15:02.920 Val Kilmer. There are representations of people who are no 0:15:03.000 --> 0:15:07.360 longer alive on either video or voice or some combination 0:15:07.440 --> 0:15:09.680 of the two. I mean, in several cases these are 0:15:09.680 --> 0:15:13.120 controlled and licensed by like the estates of these people. 0:15:13.240 --> 0:15:17.120 But certainly something I think is just getting better and better, 0:15:17.120 --> 0:15:18.320 and we're going to be saying more of in the 0:15:18.400 --> 0:15:21.800 years to come. Yeah, she's probably why Scarlett wanted to 0:15:21.800 --> 0:15:23.640 say something about it. She knows this is not the 0:15:23.720 --> 0:15:24.040 end of. 0:15:23.960 --> 0:15:26.320 This, right, Like we've done commercials, whether it was with 0:15:26.400 --> 0:15:30.040 Marilyn Monroe, Row or other celebrities. Right, Like, we've sure 0:15:30.160 --> 0:15:32.360 put there, but you do wonder, like how much further 0:15:33.320 --> 0:15:35.520 this can get? Anyway, Like you said, you wake up. 0:15:35.720 --> 0:15:38.360 This is especially for your world below. You're like, Okay, 0:15:38.360 --> 0:15:40.400 this is what's going on. It's a little crazy, but 0:15:40.400 --> 0:15:43.280 it's interesting and it gives us a chance to talk 0:15:43.320 --> 0:15:45.840 with you, which we so appreciate. Rachel, thanks so much. 0:15:46.280 --> 0:15:47.880 It is one of the stories that we're talking about 0:15:47.880 --> 0:15:50.480 a lot in the newsroom. It's like wild on social 0:15:51.280 --> 0:15:54.160 We're just kind of watching different media outlets. Everybody's covering, 0:15:54.200 --> 0:15:56.400 including us, because just trying to make spense. Since, of 0:15:56.480 --> 0:15:59.920 course Rachel Matt's Bloomberg News AI reporter there in San Francisco. 0:16:01.480 --> 0:16:05.360 You're listening to the Bloomberg Business Week podcast. Listen live 0:16:05.440 --> 0:16:08.240 each weekday starting at two pm Eastern on Apple car 0:16:08.360 --> 0:16:11.320 Play and Android Auto with the Bloomberg Business app. You 0:16:11.360 --> 0:16:14.640 can also listen live on Amazon Alexa from our flagship 0:16:14.680 --> 0:16:19.760 New York station, Just say Alexa play Bloomberg eleven thirty. 0:16:23.360 --> 0:16:27.440 Let's some marvelous night for moon Dance with the Star. 0:16:28.000 --> 0:16:31.320 Okay, so you heard of Alphabet's self proclaimed at Moonshot Factory. 0:16:31.320 --> 0:16:33.720 It's the research lab X within what was then Google 0:16:33.800 --> 0:16:37.440 was founded back in twenty ten. It's the idea that 0:16:37.520 --> 0:16:40.000 it would capture the public's imagination with visions of a 0:16:40.040 --> 0:16:43.080 techno utopian world. It would help invent Think of Way 0:16:43.160 --> 0:16:47.080 mo think of Google Glass or Project Loon, which were 0:16:47.120 --> 0:16:50.720 these high altitude balloons that would beam Internet's remote locales. 0:16:50.760 --> 0:16:53.320 Love it right? It just not to love yeah wow, 0:16:53.320 --> 0:16:57.080 except for Google Lass exactly. Well, Alphabet self proclaimed moonshot 0:16:57.200 --> 0:16:59.760 Factory is coming back down to Earth servites Bloomberg News 0:16:59.760 --> 0:17:02.440 techne ledge of reporter Julia Love. She joins us now 0:17:02.480 --> 0:17:04.560 from San Francisco. Her story, by the way, one of 0:17:04.560 --> 0:17:07.240 the most read on the Bloomberg terminal today. It is 0:17:07.280 --> 0:17:10.280 also the Bloomberg Big Take on this Tuesday and available 0:17:10.280 --> 0:17:12.720 in the upcoming issue of Bloomberg Business Week. So be 0:17:13.000 --> 0:17:15.400 on the watch for that. Julia, All right, break it down. 0:17:15.440 --> 0:17:16.399 What is going on? 0:17:18.119 --> 0:17:20.560 Well, thank you so much for having me today. It's 0:17:20.560 --> 0:17:24.600 a really interesting crossroads for Google acts. They were founded 0:17:24.640 --> 0:17:27.720 with big hopes. It was the place where goodle was 0:17:27.720 --> 0:17:31.160 going to take these big swings and funnel its profits 0:17:31.200 --> 0:17:34.920 from the search business into finding the next bid hit 0:17:35.000 --> 0:17:38.879 in a totally unrelated industry. They made self driving cars, 0:17:38.880 --> 0:17:42.560 they launched internet connected balloons. But now it's been fourteen 0:17:42.680 --> 0:17:45.439 years and the money is starting to run dry. The 0:17:45.520 --> 0:17:48.199 lab's budget has been cut and they're shifting to a 0:17:48.240 --> 0:17:50.160 model on which they're going to be spinning out these 0:17:50.200 --> 0:17:53.359 moonshots as independent startups, which is a big change. 0:17:53.800 --> 0:17:57.240 Are these independent startups? What is their connection to Google 0:17:57.240 --> 0:17:59.080 at this point? Because the whole idea with this was 0:17:59.080 --> 0:18:02.199 that this was a within Google and it would create something. 0:18:02.640 --> 0:18:04.360 And I think a good example of this, I don't 0:18:04.400 --> 0:18:07.679 know was over at Amazon Aws for example, Like that 0:18:07.760 --> 0:18:10.520 became an incredible business at Amazon, and it was started 0:18:10.720 --> 0:18:13.159 as like a side project at Amazon. But if we 0:18:13.160 --> 0:18:15.639 think about it from Google's perspective, this was supposed to 0:18:15.640 --> 0:18:19.080 be the thing that you know, Sergey Brinn was imagining 0:18:19.760 --> 0:18:23.520 in his like techno utopia of the future. What is 0:18:23.520 --> 0:18:25.560 the connection that the company will have to these startups? 0:18:27.800 --> 0:18:30.879 Yeah, absolutely so. I think they will remain within the 0:18:31.119 --> 0:18:34.359 Alphabet family in a certain sense. In many cases, X 0:18:34.400 --> 0:18:36.640 will take the state in these startups, so it will 0:18:36.640 --> 0:18:40.520 still profit if they succeed, but they will no longer 0:18:40.600 --> 0:18:45.120 be Alphabet owned companies, And I think that the benefit 0:18:45.200 --> 0:18:48.760 of that for Alphabet is that building these businesses in 0:18:48.960 --> 0:18:52.239 far out industries takes a lot of patients. They've been 0:18:52.280 --> 0:18:55.160 at it with way Mo for well over a decade, 0:18:55.280 --> 0:18:59.360 and that BET's business model has really yet to pan out. 0:18:59.440 --> 0:19:01.320 So I think that they were kind of reaching a 0:19:01.400 --> 0:19:05.120 crossroads in which they were ready to headge their risks 0:19:05.119 --> 0:19:08.399 a little bit and find opportunities to cash in on 0:19:08.440 --> 0:19:09.040 their investment. 0:19:09.440 --> 0:19:11.800 Well, and how much of this is also kind of 0:19:12.000 --> 0:19:17.160 sharpening their financial pencils and making way kind of rating 0:19:17.200 --> 0:19:20.600 in some of the costs because of increasingly how much 0:19:20.640 --> 0:19:23.479 we've been talking about AI and the importance for this 0:19:23.560 --> 0:19:27.639 company to be positioned clearly and strongly when it comes 0:19:27.680 --> 0:19:30.520 to gen AI and all that's maybe to come. 0:19:32.320 --> 0:19:34.600 Yes, I think that is a huge part of the story. 0:19:34.640 --> 0:19:38.640 We have seen belt tightening across Goodle and X has 0:19:38.680 --> 0:19:41.439 been no exception. I think there's a feeling that the 0:19:41.480 --> 0:19:45.320 company really needs to drill down on its strengths and 0:19:45.680 --> 0:19:50.959 X projects increasingly are focused on either AI or climate change, 0:19:51.520 --> 0:19:55.440 and the lab really has been feeling budget cuts. It 0:19:55.560 --> 0:19:58.199 used to have a project to celebrate, or it used 0:19:58.240 --> 0:20:00.639 to have a party to celebrate the project that had 0:20:00.840 --> 0:20:04.720 been eliminated, and even that party has been cut sadly. 0:20:05.160 --> 0:20:08.919 Julie's what's lost here for alphabet for Google? 0:20:11.640 --> 0:20:14.679