WEBVTT - AT&T's Massive Cyber Attack and Tesla's Robotaxi Delay 0:00:01.440 --> 0:00:05.120 From the heart where innovation, money and power Collie in 0:00:05.240 --> 0:00:06.720 Silicon Vallet NBN. 0:00:07.080 --> 0:00:11.520 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.320 --> 0:00:27.480 Live from San Francisco and New York. This is Bloomberg 0:00:27.520 --> 0:00:30.800 Technology coming up at and T. It reveals a massive 0:00:30.880 --> 0:00:31.840 new cyber attack. 0:00:31.960 --> 0:00:35.480 Details ahead, and we'll bring you the details on Tesla's 0:00:35.520 --> 0:00:38.199 Robotaxi on veil delay plus. 0:00:38.080 --> 0:00:41.760 Amazon and General Catalyst. They bet on an AI robotics startup. 0:00:42.159 --> 0:00:44.360 But first, Ed, what have you got on the AT 0:00:44.479 --> 0:00:44.960 and T hack? 0:00:45.640 --> 0:00:48.280 Yeah, this is our big breaking technology news story this 0:00:48.360 --> 0:00:51.040 Friday morning. AT and T, in a regulatory filing has 0:00:51.040 --> 0:00:55.400 disclosed a major hack of customer data. It relates to 0:00:55.440 --> 0:00:58.680 basically all of their cell phone customers for a period 0:00:58.720 --> 0:01:00.920 of time in twenty twenty two to the beginning of 0:01:00.960 --> 0:01:03.840 May to the end of October. It is a broad 0:01:03.920 --> 0:01:07.120 spectrum of customer data. But right now the belief is 0:01:07.120 --> 0:01:11.640 that that data that has been obtained by malicious actors 0:01:11.720 --> 0:01:15.080 is not publicly available. We're actually way off session lows 0:01:15.080 --> 0:01:17.440 on the sock down seven tenths of a percent. We 0:01:17.560 --> 0:01:20.240 had been down kind of the most in about a month. 0:01:21.200 --> 0:01:24.280 You know, it's kind of hard to gauge situation. I 0:01:24.319 --> 0:01:27.399 think the main point is that we're still assessing, Caroline, 0:01:27.440 --> 0:01:30.760 the vulnerability of that customer data. But the context, I 0:01:30.760 --> 0:01:33.920 think is that this is a big hack. This is 0:01:33.959 --> 0:01:36.640 something that and it's different from a hack a year ago, 0:01:36.800 --> 0:01:38.440 which we already talked about. 0:01:38.680 --> 0:01:41.880 Well said, the context is this has happened quite recently. 0:01:41.920 --> 0:01:45.160 Before we get straight to John Butler of Bloomberg Intelligence 0:01:45.160 --> 0:01:47.480 on the hack. As Ed mentioned, John AT and T 0:01:47.560 --> 0:01:49.520 has said it currently doesn't believe that the data is 0:01:49.560 --> 0:01:51.560 publicly available. What is the damage. 0:01:53.360 --> 0:01:56.720 Well, I think the damage for eight and two could 0:01:56.720 --> 0:01:59.520 be to their brand image in the nearer term. The 0:01:59.600 --> 0:02:02.040 one thing I'd say, Caroline, when you think about it 0:02:02.080 --> 0:02:04.760 is think of all the hacks that have happened with 0:02:04.920 --> 0:02:09.120 Fortune five hundred companies over the past year. It's become 0:02:09.760 --> 0:02:13.760 quite common, and so I think from a consumer standpoint, 0:02:14.480 --> 0:02:18.360 people maybe more whole hum about it than they would 0:02:18.360 --> 0:02:21.560 have been, say, five years ago, are given how common 0:02:21.639 --> 0:02:25.000 hacks have become. Having said that, this is bad news 0:02:25.040 --> 0:02:28.200 for AT and T in the sense that, as Ed 0:02:28.360 --> 0:02:31.800 just mentioned, it's the second big hack announced in less 0:02:31.840 --> 0:02:32.440 than a year. 0:02:33.600 --> 0:02:35.480 I want to bring some of the latest News. We've 0:02:35.480 --> 0:02:37.840 got John to you and our audience just before we 0:02:37.880 --> 0:02:40.600 came on air. To be expected, but we started to 0:02:40.600 --> 0:02:43.160 hear from regulatory agencies and bodies, and AT and T 0:02:43.240 --> 0:02:45.920 had already said they were in touch with law enforcement. 0:02:46.200 --> 0:02:48.720 But the FBI says it's been contacted by AT and 0:02:48.760 --> 0:02:52.760 T about this. The FCC is investigating the massive hack 0:02:52.800 --> 0:02:56.920 of AT and T customer data. The question is what 0:02:57.040 --> 0:02:59.360 is the vulnerability to AT and T. What is the 0:02:59.440 --> 0:03:04.080 risk to the company from this point. 0:03:04.639 --> 0:03:08.239 So I think regulators are going to look into how 0:03:08.240 --> 0:03:09.639 it's handling its data. 0:03:09.800 --> 0:03:11.040 So to be clear, this. 0:03:11.120 --> 0:03:15.360 Hack was not on AT and t's network. It's to 0:03:15.400 --> 0:03:18.280 be clear, it's network was not breached. It was housing 0:03:18.400 --> 0:03:22.080 data with a third party cloud provider. So it generates 0:03:22.800 --> 0:03:25.680 massive amounts of data through call logs. 0:03:25.800 --> 0:03:26.600 Right when you. 0:03:26.520 --> 0:03:31.600 Call someone, it logs your number and the number being called. 0:03:31.720 --> 0:03:34.880 That's the type of data that was stored on, as 0:03:34.920 --> 0:03:40.000 Bloomberg reported, Snowflake's data platform, and that's where the breach was. 0:03:40.080 --> 0:03:43.840 So I think data regulators or telecom regulators are going 0:03:43.880 --> 0:03:48.080 to look into data storage practices, and of course AT 0:03:48.200 --> 0:03:51.960 and T will be open to potentially consumer lawsuits from this. 0:03:53.000 --> 0:03:55.560 To that point. We reached out to Snowflake as well, 0:03:55.680 --> 0:03:58.360 John and the company saying we have not identified evidence 0:03:58.400 --> 0:04:03.440 suggesting this activity was caused by vulnerability misconfigurational breach of 0:04:03.560 --> 0:04:07.440 snowflakes platform. Is there any read across to more broadly, 0:04:07.520 --> 0:04:11.360 how companies like AT and T do work with third parties. 0:04:13.560 --> 0:04:16.560 So I think, like a lot of Fortune five hundred companies, 0:04:16.680 --> 0:04:20.280 a lot of data now is moving into cloud storage 0:04:20.440 --> 0:04:23.320 because it just isn't practical in the age of data 0:04:23.360 --> 0:04:28.000 to store everything on premise. So I'm sure AT and 0:04:28.040 --> 0:04:30.760 T is going to do a reevaluation of its vendors. 0:04:30.760 --> 0:04:34.520 I'm sure a lot of companies do that routinely. And 0:04:34.680 --> 0:04:38.960 for Snowflake, I think they are probably having spoken with 0:04:39.040 --> 0:04:42.560 our analyst here who covers the company, They're probably going 0:04:42.600 --> 0:04:47.920 to lean much more heavily into securing their platform and 0:04:48.080 --> 0:04:51.360 augmenting the level of security around the data that's housed 0:04:51.400 --> 0:04:52.719 on the Snowflake network. 0:04:53.720 --> 0:04:56.440 John Butler, I've bing meg Intelligence. Thanks for breaking all 0:04:56.480 --> 0:04:58.400 down for us. We appreciate it. Meanwhile, we follow on 0:04:58.480 --> 0:05:01.440 from an incredible scoop from our own ed Ludlow and 0:05:01.560 --> 0:05:05.640 Dana Hull yesterday than Tesla has been of course, delaying 0:05:05.680 --> 0:05:08.200 that roll out, that unrailing of its robotax that was 0:05:08.240 --> 0:05:09.960 set for August the eighth by a couple of months. 0:05:10.080 --> 0:05:11.839 Now we're down on a two day basis, but we 0:05:11.880 --> 0:05:15.160 have recovered somewhat on the trading today, Dan ivesand police 0:05:15.200 --> 0:05:18.159 to say managing director senior ecty analyst at Wembush joined 0:05:18.200 --> 0:05:20.119 for more and you put out a note very quickly 0:05:20.200 --> 0:05:22.760 on this reporting saying the delay did not change ultimately 0:05:22.800 --> 0:05:25.400 your bullish call on Tesla. Why not. 0:05:25.880 --> 0:05:28.480 Look, I mean, it's two months when we're not talking 0:05:28.720 --> 0:05:33.479 nine months a year. You'd rather than be what I 0:05:33.560 --> 0:05:36.000 view as kind of a jaw dropper event, and that's 0:05:36.040 --> 0:05:38.680 what really needs to happen in terms in October. And 0:05:38.880 --> 0:05:41.359 obviously the delay is not what you want to see. 0:05:41.440 --> 0:05:44.080 So no one's popping champagne when you hear that there's 0:05:44.080 --> 0:05:46.719 gonna be deayed. You know, congrats to Ed and Dana 0:05:46.760 --> 0:05:50.560 on the story. But in terms of the AI story FSD, 0:05:50.920 --> 0:05:54.839 the next phase of Tesla that's unchanged. That's why, in 0:05:54.880 --> 0:05:59.120 our opinion, this is just more an air pocket period 0:05:59.600 --> 0:06:01.280 to get on to what I view as gold at 0:06:01.279 --> 0:06:02.159 the end of the rainbow. 0:06:03.080 --> 0:06:04.719 Let's talk about some of the calls at the end 0:06:04.760 --> 0:06:07.719 of the Rainbow ed. I mean we had seen a 0:06:07.839 --> 0:06:11.080 run up in Tesla's stock previous week, up twenty seven percent. 0:06:11.440 --> 0:06:13.480 We did see a fall yesterday. 0:06:13.600 --> 0:06:16.560 Yeah, and look what really surprised me overnight was all 0:06:16.600 --> 0:06:19.800 of the retail investor community are very publicly on x 0:06:19.839 --> 0:06:22.080 saying to Elon Musk, like, can you confirm this? Can 0:06:22.120 --> 0:06:24.880 you confirm this? Like Bloomberg stands by its reporting, and 0:06:24.920 --> 0:06:27.080 we always reach out to Elon Musk and any other 0:06:27.120 --> 0:06:31.560 avenue at Tesla to ask for comment and verify. But Dan, 0:06:32.200 --> 0:06:34.720 what was it then? I know that you remain bullish 0:06:34.760 --> 0:06:36.760 on Tesla, But when I said you were coming on 0:06:36.800 --> 0:06:39.120 the show, a lot of folks in that community were saying, 0:06:39.400 --> 0:06:43.159 we'll explain that the eight point four percent drop that 0:06:43.240 --> 0:06:46.120 happened in Thursday session. Is that just because the run 0:06:46.200 --> 0:06:48.200 up in the stock that preceded it, or is it 0:06:48.200 --> 0:06:49.440 because of genuine concern? 0:06:50.120 --> 0:06:51.840 No, I think it's more the run up. 0:06:51.839 --> 0:06:52.119 Book. 0:06:52.200 --> 0:06:54.360 This is going to be an historical day, whether a 0:06:54.480 --> 0:06:57.560 dated or TENAID or whatever day it's going to be 0:06:57.640 --> 0:07:01.760 in October. While anticipation going in here, and in my opinion, 0:07:02.360 --> 0:07:06.240 Tessa's more of an AI robotics play than just an 0:07:06.240 --> 0:07:09.720 auto company and investors, they don't like the lease because 0:07:09.760 --> 0:07:12.520 then it feeds into that narrative. And obviously the Bears, 0:07:12.760 --> 0:07:15.800 you know, they focus on in terms of empty promises. 0:07:15.880 --> 0:07:19.240 And I think it's important, and this is the most 0:07:19.280 --> 0:07:22.800 important thing that when they have this event in October, 0:07:23.080 --> 0:07:27.480 it doesn't disappoint. It shows the path for robotaxies, shows 0:07:27.520 --> 0:07:31.240 our time, as shows the AI vision and monization two 0:07:31.320 --> 0:07:34.880 months away. That's arounding our relative to where we see 0:07:35.000 --> 0:07:37.880 longer term. As we've said, I think the AI story 0:07:37.920 --> 0:07:41.600 alone is worth a trillion dollars for Tessa. 0:07:42.320 --> 0:07:45.120 Mister Ives, we always appreciate having you on this program 0:07:45.120 --> 0:07:49.560 going back technology. You are unwaveringly bullish on everything, and 0:07:49.600 --> 0:07:53.160 we just show you a graphic with your coverage right 0:07:53.240 --> 0:07:57.360 all the stocks that you are across thirty buys, three 0:07:57.440 --> 0:08:02.800 holds and zero cells. So again I kind of think, Caroline, 0:08:02.920 --> 0:08:05.800 what would it take to make mister Ives a little 0:08:05.840 --> 0:08:08.120 more cautious on Tesla White? What is it that he 0:08:09.000 --> 0:08:11.440 would see that would make him rethink it's cool? 0:08:11.520 --> 0:08:15.600 Carra, I don't know, Yeah, I mean what i'd say 0:08:16.040 --> 0:08:18.800 to that point, Look, we've talked. I mean, for the 0:08:18.920 --> 0:08:21.840 last almost twenty five years. I mean really pound the 0:08:21.880 --> 0:08:24.360 table on tech and of course we've had bad calls 0:08:24.400 --> 0:08:27.600 in there as well, but our view, especially where we 0:08:27.640 --> 0:08:29.840 are in the last decade, but especially the last what 0:08:29.880 --> 0:08:34.040 I called eighteen months, this AI revolutions just starting. So 0:08:34.840 --> 0:08:37.640 when I look at Tesla and what would make us negative. 0:08:37.960 --> 0:08:40.720 We talked about a quarter or two ago that must 0:08:40.720 --> 0:08:42.439 need to step it up right in terms of adult 0:08:42.480 --> 0:08:43.360 in the point I think, and. 0:08:43.320 --> 0:08:44.280 I think he did that. 0:08:44.960 --> 0:08:47.760 I think deliveries was important for two Q and I 0:08:47.800 --> 0:08:49.680 think you know, you saw a lot of the Bears 0:08:49.679 --> 0:08:52.400 going back into their kids for that. But you need 0:08:52.440 --> 0:08:56.400 to continue to see demand stabilization, no more major price 0:08:56.480 --> 0:09:00.920 cuts and October you gotta deliver in terms of this 0:09:01.000 --> 0:09:01.920 next phase of the store. 0:09:01.920 --> 0:09:04.960 In terms of ROBOTAXI, I'm really interested by the today 0:09:04.960 --> 0:09:07.520 that you're like, this is an AI robotics play. More broadly, 0:09:07.559 --> 0:09:11.360 that's certainly what we've heard from Elon. Apple suddenly has 0:09:11.400 --> 0:09:13.880 got on the AI bandwagon as well. They're also talking 0:09:13.960 --> 0:09:16.360 up production at least for their suppliers. That's what we 0:09:16.440 --> 0:09:19.320 reported yesterday. How are you feeling about the AI play 0:09:19.360 --> 0:09:21.920 for that big company that you're also an outperformance, and we've. 0:09:21.800 --> 0:09:26.319 Talked the consumer AI revolution goes through Apple. So when 0:09:26.360 --> 0:09:30.200 you think about WWDC and I'll compare it a little 0:09:30.480 --> 0:09:34.000 to maybe a Robotaxiday, that was a historical day, and 0:09:34.080 --> 0:09:37.199 I think that's where investors started to recognize the keys 0:09:37.280 --> 0:09:40.199 to that kingdom is Apple. And we've talked about a 0:09:40.320 --> 0:09:42.320 huge part of what I think not just the valuation, 0:09:42.920 --> 0:09:46.280 but catalyzing this next upgrade cycle is going to be 0:09:46.880 --> 0:09:49.160 Apple intelligence and AI and that just speaks to a 0:09:49.240 --> 0:09:52.720 broader view and tech and we see with Google, Amazon, 0:09:52.880 --> 0:09:55.440 of course in the Dell and Microsoft and godfather of AI, 0:09:55.559 --> 0:09:58.080 Jens in a video, Dan. 0:09:58.040 --> 0:10:00.560 I want to just remind you specific points to our 0:10:00.600 --> 0:10:02.839 audience that we reported. One is that part of the 0:10:02.960 --> 0:10:06.439 Robotaxi delay was because I think Elon Musk wanted more 0:10:06.520 --> 0:10:09.400 to show. We said via sources that they wanted to 0:10:09.440 --> 0:10:12.760 have more prototypes, but they also had some design rethink. 0:10:13.440 --> 0:10:16.720 And in the same moment, Uber and Lyft jumped five 0:10:16.760 --> 0:10:19.920 percent in the session. What did that tell you about 0:10:19.960 --> 0:10:24.880 how seriously investors in the market take Tesla in basically 0:10:25.200 --> 0:10:29.200 an app based ride hailing platform that Tesla might introduce. 0:10:29.440 --> 0:10:31.200 Yeah, and I also i'd say, I mean you get 0:10:31.240 --> 0:10:34.000 in England when and that scoop it was a good 0:10:34.080 --> 0:10:36.920 day for a world war right, And I think when 0:10:37.000 --> 0:10:39.760 you when you talk about the AI piece, yeah, I 0:10:39.800 --> 0:10:43.160 mean I think there's worries about this fleet and what 0:10:43.320 --> 0:10:45.719 that could ultimately look like for Uber and WEPT. So 0:10:45.920 --> 0:10:48.680 that negative for Tasos views the paths of Uber and WEPT. 0:10:49.040 --> 0:10:50.880 I don't view a zero some game. I think some 0:10:51.000 --> 0:10:54.320 of the negative specific when Uber is overdone in terms 0:10:54.320 --> 0:10:56.679 of what this is going to mean from a robotaxi 0:10:56.800 --> 0:11:00.720 fleet perspective. And I ultimately believe that something where they're 0:11:00.720 --> 0:11:03.360 going to have partnerships as well Tessa when it comes 0:11:03.400 --> 0:11:06.719 to Ride shair but three five years from them, I 0:11:06.760 --> 0:11:09.640 mean there's going to be a decent percentage, whether it's 0:11:09.679 --> 0:11:12.960 ten percent or twenty percent, that that Ride Shairing will 0:11:13.040 --> 0:11:14.120 not have a driver. 0:11:15.400 --> 0:11:17.079 Be interesting to see if way most still in that 0:11:17.160 --> 0:11:20.120 conversation as well, Dan ives of Webbush, thank you, Happy Friday, 0:11:20.480 --> 0:11:21.640 Grateful to have you on set. 0:11:29.200 --> 0:11:30.840 It's got a bit of a macro picture right now. 0:11:30.920 --> 0:11:33.160 In the markets, there is risk on for tech names. 0:11:33.520 --> 0:11:35.559 The NASDAT goes higher more than one point two percent, 0:11:35.679 --> 0:11:38.280 volumes higher on this benchmark as well, and that is 0:11:38.360 --> 0:11:40.880 perhaps we get a feel good music coming back in 0:11:41.000 --> 0:11:43.760 when we're looking at consumer expectations for inflation dialing down 0:11:43.840 --> 0:11:46.800 to two point nine percent. Yes, US producer prices were 0:11:47.080 --> 0:11:49.000 climbing a little, but actually if you dig into the 0:11:49.080 --> 0:11:52.240 personal consumption expenditship price IndX, that didn't look bad two 0:11:52.280 --> 0:11:54.760 yr yels they four. We're seeing actually Europe on fire 0:11:55.000 --> 0:11:58.160 stock markets more broadly around the world doing well, albeit 0:11:58.360 --> 0:12:01.440 maybe summon age your sell off Japan intervening once again. 0:12:01.559 --> 0:12:03.719 But we want to get to the macro pics and 0:12:03.760 --> 0:12:05.719 what it means the tech stocks on a Rathbun's with 0:12:05.840 --> 0:12:09.080 us cioc bused investment advisory services and look, this tech 0:12:09.160 --> 0:12:12.360 market has been what's dragged us higher on a Can 0:12:12.440 --> 0:12:13.280 it continue to do so? 0:12:14.920 --> 0:12:16.559 I think it can. And here's why. 0:12:17.520 --> 0:12:20.080 There are some weaknesses in the economy, as we've been 0:12:20.160 --> 0:12:22.280 talking about I think for the last month or so. 0:12:22.960 --> 0:12:25.520 And when there are weaknesses, there's bound to be cost 0:12:25.679 --> 0:12:29.079 reduction and cost management as well as margin pressure. So 0:12:29.160 --> 0:12:32.880 if you look at it from that perspective, the cyclical 0:12:33.040 --> 0:12:35.840 areas of the markets are going to continue to be pressured. 0:12:35.920 --> 0:12:38.880 What does that mean for tech sucks. We have believed 0:12:38.920 --> 0:12:41.160 that the tech stock rally has not just been an 0:12:41.200 --> 0:12:45.960 AI phenomenon, it is also a quality phenomenon. So when 0:12:46.040 --> 0:12:48.960 you have tech sucks running, really the companies that are 0:12:49.040 --> 0:12:51.120 at the MAC seven companies that have given us more 0:12:51.160 --> 0:12:55.120 than fifty percent your year earnings growth in Q one, 0:12:55.920 --> 0:12:59.120 there's a reason to be in those stocks other than AI. 0:13:00.040 --> 0:13:02.600 You continue to see economic pressure, we think there's more 0:13:02.720 --> 0:13:04.360 room for quality stocks to do well. 0:13:05.720 --> 0:13:08.160 And a single session a market does not make. But 0:13:08.240 --> 0:13:11.640 I found yesterday very interesting, you know, the moment that 0:13:12.080 --> 0:13:16.080 Dana and I and Caroline reported that the Tesla news 0:13:16.360 --> 0:13:18.839 it clearly had an impact on the index level, and 0:13:18.920 --> 0:13:21.360 we all reflected that it was the worst performer on 0:13:21.360 --> 0:13:23.559 the S and P five hundred and the NASDAT one hundred, 0:13:23.720 --> 0:13:26.360 But the biggest points drags were in Nvidia and other 0:13:26.520 --> 0:13:29.520 names relating to aib it on the software side, like Microsoft. 0:13:29.559 --> 0:13:31.800 I think is there a lesson to be taken from 0:13:31.840 --> 0:13:33.319 that in yesterday's session. 0:13:33.800 --> 0:13:36.640 Well, I think the lesson is that investors had been 0:13:36.720 --> 0:13:40.400 flocking to them because they're heavy, heavy with flush with cash, 0:13:40.840 --> 0:13:43.120 little debt, and that is the place to be. 0:13:43.640 --> 0:13:47.960 And when the FED is it lowers interest rates, as. 0:13:48.000 --> 0:13:51.920 The CPI number seemed to suggest yesterday, we're going to 0:13:51.960 --> 0:13:54.840 have a rotation into more cyclical areas that had been 0:13:54.880 --> 0:13:58.360 really pressured downward. And so I think the lesson yesterday 0:13:58.720 --> 0:14:01.360 it was a confirmation for me actually that a lot 0:14:01.440 --> 0:14:04.280 of the reasons for the Tech Magnificent seven going up 0:14:04.400 --> 0:14:08.000 had also been quality, and that the reason for believing 0:14:08.080 --> 0:14:10.120 that Max seven can continue to do well. 0:14:11.559 --> 0:14:13.640 Going forward. It was a confirmation. 0:14:15.240 --> 0:14:18.880 Well, therein lies the question of earnings and proof of fundamentals. 0:14:19.120 --> 0:14:22.880 The banks today not looking good, Anna, but all eyes 0:14:23.160 --> 0:14:26.200 continue to be Netflix as they come first. But then 0:14:26.280 --> 0:14:28.400 some of the Max seven, as you mentioned, can they 0:14:28.440 --> 0:14:31.680 support the valuations with the earnings growth that manufacturing in. 0:14:32.760 --> 0:14:35.400 Yeah, the valuation component is the sticking point. 0:14:36.520 --> 0:14:39.479 The question is how much of the valuation is reflective 0:14:39.680 --> 0:14:42.240 of earnings, how much of it is reflective of AI, 0:14:42.640 --> 0:14:45.600 and how much of it is just investors flocking to quality. 0:14:45.640 --> 0:14:47.480 And that's very difficult to tease out. 0:14:48.040 --> 0:14:50.360 On the AI component, It's like, how do you even 0:14:50.440 --> 0:14:54.080 price hope because frankly, I mean, we are seeing AI 0:14:54.200 --> 0:14:58.880 kind of filtering into the consumer life through I guess 0:14:59.000 --> 0:15:02.480 rufus was in use today to fetch, you know, information 0:15:02.640 --> 0:15:05.440 from Amazon, but we still don't know exactly how it's 0:15:05.480 --> 0:15:10.520 going to be expressed in the productivity component the labor market. 0:15:11.200 --> 0:15:13.920 So that is the sticking point and that's why we're 0:15:14.280 --> 0:15:16.920 pretty much balanced in terms of our investing. 0:15:17.040 --> 0:15:19.960 We're very, very diversified. When the market seem to. 0:15:20.000 --> 0:15:24.400 Be irrational irrational, we write it and then we rebalance 0:15:24.440 --> 0:15:26.560 it taking the gains, and that has been our strategy 0:15:26.640 --> 0:15:27.120 year today. 0:15:28.320 --> 0:15:31.120 Anna, the world was watching last night in the context 0:15:31.240 --> 0:15:35.560 of NATO summit, press conferences, and a US presidential election. 0:15:35.760 --> 0:15:39.200 If you are an investor operating in the technology sector, 0:15:40.240 --> 0:15:42.600 do you look at it as well and think about 0:15:42.640 --> 0:15:45.680 what might happen to the areas you put money depending 0:15:45.720 --> 0:15:46.920 on the outcome in November. 0:15:49.120 --> 0:15:51.920 Well, so, the big threat I think to big tech 0:15:52.160 --> 0:15:55.360 is regulation. And I know there's been a lot of 0:15:55.440 --> 0:15:59.000 talk about one party rule in Washington, and that's really 0:15:59.680 --> 0:16:02.160 it's way too early, but I think there is a 0:16:02.240 --> 0:16:04.120 fear of that. If we do have a one party rule, 0:16:04.120 --> 0:16:06.080 it's not so much just about the White House, right, 0:16:06.160 --> 0:16:09.240 It's about passing of laws. And if that's the case, 0:16:09.320 --> 0:16:12.200 then it changes the landscape for not only tech but 0:16:12.320 --> 0:16:15.160 definitely for AI because there's a lot of fear around it. 0:16:15.520 --> 0:16:17.640 So I would say that that's the uncertainty that is 0:16:17.760 --> 0:16:18.840 facing us in the future. 0:16:19.880 --> 0:16:23.760 Anna Rathband, COEO of CBIZ Investment Advisory Services, Thank you 0:16:23.880 --> 0:16:26.480 very much. Now, coming up on Bloomberg Technology, there are 0:16:26.560 --> 0:16:30.160 growing calls on the Hill for a probe into Microsoft's 0:16:30.200 --> 0:16:33.720 AI deal with the Amorati company G forty two. We 0:16:33.840 --> 0:16:36.200 have some more details next, this is Blomberg Technology. 0:16:54.840 --> 0:16:57.560 Now ken you Republican lawmakers. They are now calling for 0:16:57.680 --> 0:17:01.200 a formal intelligence probe into the outing AI partnership between 0:17:01.280 --> 0:17:05.560 Microsoft and Abadabai from G forty two, with a focus 0:17:05.640 --> 0:17:08.639 on the emeranti companies ties to China. That's bring abey 0:17:08.680 --> 0:17:12.040 Meg's Mackenzie Halkins. We've had murmurings, wiries, now it's more formal. 0:17:12.440 --> 0:17:14.119 What is key the risk here of them? 0:17:15.040 --> 0:17:19.240 So we have yesterday House Foreig Affairs Committee Chairman Mike 0:17:19.359 --> 0:17:22.520 McCall and the chairman of the China Select Committee calling 0:17:22.640 --> 0:17:26.080 for a formal Biden Administration intelligence probe into this partnership 0:17:26.080 --> 0:17:28.960 between Microsoft and G forty two, This deal which has 0:17:29.040 --> 0:17:31.720 Microsoft investing one and a half billion dollars in the 0:17:31.800 --> 0:17:34.520 hottest AI startup in the Gulf has attracted a lot 0:17:34.560 --> 0:17:37.359 of scrutiny in Washington on issues ranging from human rights 0:17:37.400 --> 0:17:40.080 to the risk of sensitive American type being diverted to China. 0:17:40.560 --> 0:17:43.040 And folks in Congress have been frustrated for a long 0:17:43.119 --> 0:17:45.160 time about what they see as a lack of transparency 0:17:45.200 --> 0:17:48.760 from the Biden administration. They haven't gotten a comprehensive briefing, 0:17:49.119 --> 0:17:51.399 and they're now saying it's not enough for the US 0:17:51.560 --> 0:17:54.760 government to be working on sort of general frameworks behind 0:17:54.800 --> 0:17:57.640 closed doors. They want to see the intelligence community prepare 0:17:57.680 --> 0:18:00.639 a formal assessment and evaluate all of the national security 0:18:00.720 --> 0:18:01.760 risks that they've identified. 0:18:02.600 --> 0:18:04.760 Mackenzie, you and I've been through a similar story together 0:18:04.840 --> 0:18:08.760 with CATL, the Chinese battery maker and its relationships with 0:18:08.880 --> 0:18:12.080 US auto makers, and it was kind of the China 0:18:12.160 --> 0:18:16.480 Hawks that were doing this in DC. How analogous is 0:18:16.560 --> 0:18:20.440 this G forty two and Microsoft. 0:18:20.040 --> 0:18:24.679 Tie So we're looking at two different types of investments. 0:18:25.160 --> 0:18:29.640 The CTL thing that you mentioned has a partnership between 0:18:29.720 --> 0:18:33.280 CTL and Ford for a battery plant in Michigan, but 0:18:33.400 --> 0:18:36.920 it's not actually a direct investment by Ford into a 0:18:37.040 --> 0:18:40.000 Chinese company. And in G forty two's cases, is a 0:18:40.080 --> 0:18:43.280 Chinese company. The concern actually is that if the US 0:18:43.359 --> 0:18:47.720 allows sensitive American technology everything from AI model weights to 0:18:48.000 --> 0:18:50.640 the Nvidia H one hundred ships that would be necessary 0:18:50.720 --> 0:18:53.640 to actually stand up a data center that China would 0:18:53.640 --> 0:18:56.600 be able to use G forty two, and the UAE 0:18:56.640 --> 0:18:59.240 as a country as a backdoor to access technology that 0:18:59.320 --> 0:19:02.439 the US has cut China off from. So these are 0:19:02.640 --> 0:19:06.440 sort of different situations, but a similar tide of concern 0:19:06.600 --> 0:19:09.119 in Washington that's been consistent over the past couple of 0:19:09.240 --> 0:19:13.080 years that any deal between a US company and a 0:19:13.240 --> 0:19:15.920 Chinese company, or a company with links to sanction of 0:19:16.040 --> 0:19:19.000 Chinese companies, poses an inherent national security risk. 0:19:20.080 --> 0:19:23.679 Bloomberg's Mackenzie Hawkins always on it really appreciate your reporting. 0:19:23.760 --> 0:19:26.840 This Friday, thank you. Open Ai has come up with 0:19:27.000 --> 0:19:30.680 a set of five levels to track its progress toward 0:19:30.760 --> 0:19:35.040 building AI software capable without performing humans. It's the startup's 0:19:35.119 --> 0:19:39.160 latest effort to help people better understand its thinking about 0:19:39.240 --> 0:19:42.080 safety and the future of AI. Bloomberg Rachel Mets is 0:19:42.080 --> 0:19:44.080 here with the details. I saw you put this out 0:19:44.160 --> 0:19:45.720 last night on social media, and I think for like 0:19:46.160 --> 0:19:50.240 the everyday person right through to investors and AI industry participants. 0:19:50.720 --> 0:19:52.960 This is kind of a set of codified rules that 0:19:53.040 --> 0:19:55.720 might be helpful. What are they So? 0:19:56.000 --> 0:19:59.600 The company has these five levels, and they also told 0:20:00.000 --> 0:20:03.280 employees that they believe they're on level one, which is 0:20:03.440 --> 0:20:07.760 chatbots similar to GPT, which is probably their most popular product. 0:20:08.200 --> 0:20:10.080 There are sort of on the cost between level one 0:20:10.320 --> 0:20:13.359 and level two, which they call reasoners. This would be 0:20:13.480 --> 0:20:17.680 machines that have more of the reasoning type capabilities similar 0:20:17.760 --> 0:20:21.359 to what humans today can only do They put this 0:20:21.480 --> 0:20:23.200 out in part because they want people to be a 0:20:23.240 --> 0:20:25.560 little bit more aware of how they're thinking about this 0:20:26.000 --> 0:20:30.520 process of trying to build artificial general intelligence, which has 0:20:30.600 --> 0:20:32.200 long been the company's stated goal. 0:20:32.280 --> 0:20:34.040 Whether or not they will get there is another story. 0:20:34.080 --> 0:20:36.359 But they've been working on this for quite a long time, and. 0:20:36.520 --> 0:20:40.320 Rachel and to that point, Somemman himself have said maybe 0:20:40.400 --> 0:20:43.239 we get to AGI in the next decade. Hasn't been 0:20:43.280 --> 0:20:46.560 any whisperings of ultimately how far along how quickly we 0:20:46.680 --> 0:20:49.920 could get to the ultimate level five. 0:20:50.800 --> 0:20:53.480 I mean, I think everybody has a different opinion on this. 0:20:53.600 --> 0:20:54.960 I mean, one of the things we have to think 0:20:54.960 --> 0:20:57.560 about is like this is a very rough draft in 0:20:57.680 --> 0:21:00.520 progress thing that they're working on here as as they 0:21:00.600 --> 0:21:02.879 were very clear about saying, and they're going to be 0:21:02.960 --> 0:21:05.320 taking feedback from a lot of different kinds of people. 0:21:06.119 --> 0:21:08.320 But nobody can really agree on what it even would 0:21:08.400 --> 0:21:13.359 mean to have artificial general intelligence AI that can outperform 0:21:13.480 --> 0:21:15.040 humans or do a lot of the things do all 0:21:15.080 --> 0:21:17.160 the things that humans stay can currently do. So maybe 0:21:17.200 --> 0:21:19.399 we need to work on that to you know, figure 0:21:19.400 --> 0:21:21.359 out what do we mean when we talk about that, 0:21:21.600 --> 0:21:22.520 like what would that look like? 0:21:23.720 --> 0:21:26.879 Bloomberg Rachel mets all over trying to gauge the risks 0:21:26.920 --> 0:21:37.680 that is to artificial intelligence. I'll come back to Bluembag technology. 0:21:37.760 --> 0:21:40.080