WEBVTT - Trump's Big Tech Influence 0:00:00.800 --> 0:00:05.039 From the heart of where innovation, money and power collide 0:00:05.360 --> 0:00:10.640 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.800 --> 0:00:32.240 Caroline Hyde and Ed Lovelow. 0:00:27.400 --> 0:00:31.640 Live from New York. I'm Caroline Hyde. 0:00:30.280 --> 0:00:33.760 And I'm Mike Sheppard in Washington. This is Bloomberg Technology 0:00:33.800 --> 0:00:34.199 coming up. 0:00:34.280 --> 0:00:38.159 Tech CEO's flock to the inauguration of Donald Trump in Washington. 0:00:38.680 --> 0:00:42.640 Plus President Trump gives a temporary reprieve to TikTok, granting 0:00:42.640 --> 0:00:45.919 a seventy five day delay from a US ban. And 0:00:46.000 --> 0:00:48.519 live from the World Economic Forum in Davos. We'll hear 0:00:48.560 --> 0:00:51.600 from Bag of America Ceo'brian Wynihan later this hour, but 0:00:51.720 --> 0:00:54.080 first we check in on these markets. 0:00:54.320 --> 0:00:56.520 Look some anxiety. 0:00:55.960 --> 0:00:59.440 Being shaken off as we see President Trump take office, 0:00:59.600 --> 0:01:01.960 then as that pushing up, and indeed the NASAK one 0:01:02.040 --> 0:01:03.920 hundred up about a tenth of a percent as many 0:01:03.920 --> 0:01:08.040 looked perhaps the economic potential of this next administration. However, 0:01:08.120 --> 0:01:11.200 on the downside hasn't been some key names. Bitcoin is 0:01:11.200 --> 0:01:13.080 at one point three percent one hundred and three thousand 0:01:13.160 --> 0:01:15.600 absolutely took off ahead of the inauguration. We'll get into 0:01:15.680 --> 0:01:17.840 some of those mun coins in a moment, but let's 0:01:17.880 --> 0:01:20.399 move on to some of the individual points drags or 0:01:21.080 --> 0:01:23.119 indeed Apple being the key one. I want to focus 0:01:23.120 --> 0:01:24.920 in on TSMC for a moment though. We're at one 0:01:24.920 --> 0:01:28.480 point nine percent on its ADRs. This is its restored operations, 0:01:28.480 --> 0:01:31.920 that factories it evacuated after a six point four magnitude 0:01:31.959 --> 0:01:34.640 earthquake struck at the island's south look at injured four people, 0:01:34.760 --> 0:01:36.360 key chip maker. 0:01:36.240 --> 0:01:39.920 Fabricator, to Nvidia and indeed to Apple. But Apple being drag. 0:01:39.680 --> 0:01:43.039 Lower the worst day we've seen since September of last year, 0:01:43.040 --> 0:01:44.720 in fact, three point eight percent lower. 0:01:44.800 --> 0:01:47.680 Why this is yet more downgrades. 0:01:47.160 --> 0:01:50.360 Coming from Jeffrey's, coming from Luke Capital analyst worrying about 0:01:50.400 --> 0:01:54.120 sales of the iPhone and in particular Chinese weakness. Look, 0:01:54.120 --> 0:01:56.000 this is going to be top of mind for Tim Cook, 0:01:56.040 --> 0:01:58.760 who yesterday was one of the who's who are. 0:01:58.640 --> 0:02:02.360 The world's wealthiest people in hech elite surrounding President Donald 0:02:02.400 --> 0:02:04.600 Trump as he took the oath of office, all gathering 0:02:04.640 --> 0:02:07.960 and combined get this, Mike net Worth exceeding one point 0:02:08.000 --> 0:02:12.360 three trillion dollars for the occasion, all sprinkled in among 0:02:12.400 --> 0:02:13.320 Trump's own family. 0:02:14.919 --> 0:02:17.480 They were not just sprinkled in, they were seated ahead 0:02:17.520 --> 0:02:20.720 of Trump's incoming cabinet. It was striking to see how 0:02:20.800 --> 0:02:26.600 prominently Elon Musk and others were occupying that space in 0:02:26.680 --> 0:02:29.840 such a moment, and it really signals how much tech 0:02:29.880 --> 0:02:34.519 has arrived with this new administration. And really something else 0:02:34.520 --> 0:02:38.560 of note from yesterday was President Donald Trump scrapping the 0:02:38.560 --> 0:02:44.080 Biden administration sweeping executive order regulating artificial intelligence. Let's bring 0:02:44.120 --> 0:02:47.160 in Bloomberg's balance of how our co host Kelley Lines 0:02:47.240 --> 0:02:49.840 to discuss this. Kelly, thanks for joining us and for 0:02:49.880 --> 0:02:53.600 all the great reporting yesterday on the inauguration. Trump started 0:02:53.600 --> 0:02:56.600 this with some shock and awe on the regulatory front. 0:02:56.880 --> 0:03:00.440 Talk about the direction of travel that we see in 0:03:00.520 --> 0:03:01.799 undoing this AI order. 0:03:01.960 --> 0:03:04.560 Well, the direction of travel certainly is fast. Trump yesterday 0:03:04.600 --> 0:03:07.040 sent a modern day record for a number of executive 0:03:07.080 --> 0:03:09.000 orders in one day. There were twenty six plus four 0:03:09.000 --> 0:03:11.640 presidential memoranda, and of course as part of that, he 0:03:11.720 --> 0:03:15.639 rescinded seventy eight executive actions from President Biden. The executive 0:03:15.680 --> 0:03:18.920 action regulating AI. The sweeping order was one that was 0:03:18.960 --> 0:03:21.240 part of it. This, of course, during the Biden administration, 0:03:21.360 --> 0:03:25.360 was intended to create safety and transparency guidelines around companies 0:03:25.400 --> 0:03:29.000 developing this technology. It also created the AI Safety Institute 0:03:29.080 --> 0:03:32.680 under the Department of Commerce that was essentially setting voluntary 0:03:32.720 --> 0:03:35.360 guidelines for how the development of this technology should work. 0:03:35.520 --> 0:03:36.640 And now that goes away. 0:03:36.680 --> 0:03:39.280 The thing is the President, while repealing this, did not 0:03:39.400 --> 0:03:41.520 say what is going to be replacing it, leaving a 0:03:41.560 --> 0:03:44.360 bit of a question mark. Certainly, we could expect David Zachs, 0:03:44.360 --> 0:03:46.720 the venture capitalist who is now the AI cryptos are 0:03:47.000 --> 0:03:49.000 in this White House, could be playing a role in 0:03:49.040 --> 0:03:51.000 what happens next. But it also could speak to buy 0:03:51.040 --> 0:03:53.800 and large a kind of hands off regulatory approach this 0:03:53.920 --> 0:03:56.720 administration seems to take. And certainly that was a message 0:03:56.800 --> 0:03:59.640 frequently by Donald Trump yesternight and throughout the campaign. 0:04:00.040 --> 0:04:02.960 And let's just talk about someone who's key to AI's 0:04:03.000 --> 0:04:05.760 future is Elo Musk. And indeed it feels as though 0:04:05.800 --> 0:04:08.000 he's been cementing his power over the last couple of 0:04:08.080 --> 0:04:10.240 days as well well. 0:04:10.280 --> 0:04:12.920 Absolutely, in fact, it is now solidified through one of 0:04:12.920 --> 0:04:15.200 these executive orders, Caroline, that he will be leading this 0:04:15.240 --> 0:04:17.440 Department of Government efficiency, and he will be doing so 0:04:17.640 --> 0:04:20.000 by himself, as the person who was intended to be 0:04:20.120 --> 0:04:22.560 his co head of vag Ramaswami is bowing out to 0:04:22.600 --> 0:04:25.320 instead run for governor of Ohio in twenty twenty six. 0:04:25.360 --> 0:04:26.880 There's been some reporting that there was a bit of 0:04:26.880 --> 0:04:29.760 consternation between Ramaswami and mar A Lago that may have 0:04:29.800 --> 0:04:31.479 played a factor, But it does clear the road for 0:04:31.520 --> 0:04:34.599 Elon Musk to essentially have the greatest degree of control 0:04:34.680 --> 0:04:37.919 over this agency, which will actually be part of the 0:04:37.960 --> 0:04:40.960 federal government. That was not the intent originally outlined by 0:04:40.960 --> 0:04:43.520 Donald Trump back in November, but through the EO yesterday, 0:04:43.800 --> 0:04:46.760 he made this part of the Executive Office of the President. 0:04:46.800 --> 0:04:50.040 Through an executive order that will rename the US Digital Service, 0:04:50.080 --> 0:04:52.880 something that was created during the Obama administration back in 0:04:52.920 --> 0:04:55.960 twenty thirteen, to the United States Dode Service. That means 0:04:56.000 --> 0:04:59.039 Elon Musk is getting an actual White House email address 0:04:59.080 --> 0:05:01.920 space in the eisenhow Our office building. It raises some 0:05:01.960 --> 0:05:05.360 ethics concerns given Elon Musk, of course, and his companies 0:05:05.440 --> 0:05:08.320 do contract with the United States government, and already this 0:05:08.360 --> 0:05:11.440 is drawing lawsuits Caroline, including from the largest union representing 0:05:11.480 --> 0:05:14.920 federal workers, saying that the Office Budget and Management Management 0:05:15.000 --> 0:05:18.440 Budget and the White House here are violating different rules 0:05:18.440 --> 0:05:20.799 that are supposed to govern this. But certainly Elon Musk 0:05:21.200 --> 0:05:23.320 is going to have a close year of the president 0:05:23.400 --> 0:05:25.000 as this administration gets going. 0:05:25.080 --> 0:05:27.359 A controversial weekend for Edol Musk, which we'll get to 0:05:27.480 --> 0:05:28.560 a little bit later in the show. 0:05:28.600 --> 0:05:31.600 But Blue most Kaylee lines spectacular, thank you for joining us. 0:05:31.600 --> 0:05:35.840 Meanwhile, TikTok Whiplash Fight Dances US services were restored after 0:05:35.839 --> 0:05:38.599 Donald Trump acted to delay the band by seventy five days, 0:05:38.839 --> 0:05:42.840 proposing a US China joint venture, though it's unclear if 0:05:42.839 --> 0:05:45.480 the APPS Chinese parent can or even wants to secure 0:05:45.520 --> 0:05:47.880 a US backer. Not to mention if this is enough 0:05:47.880 --> 0:05:52.240 to appease Congress's national security concerns, Well, let's bring in 0:05:52.279 --> 0:05:56.479 a US representative, Jake Olkinlass from Massachusetts. Now, you served 0:05:56.480 --> 0:05:59.080 on the House China Select Committee last Congress, and we're 0:05:59.520 --> 0:06:02.640 original co lead to the TikTok divestment legislation. So I 0:06:02.640 --> 0:06:05.200 ask you this, what do you make of the extension? 0:06:06.960 --> 0:06:10.159 The extension appears to be illegal. The law allows for 0:06:10.240 --> 0:06:13.520 one ninety day extension if the President can demonstrate that 0:06:13.800 --> 0:06:16.400 a sale is underway and there needs to be more 0:06:16.440 --> 0:06:19.479 time for the negotiations. In the administration, that is not 0:06:19.520 --> 0:06:21.640 what's happened here. What's happened here is Trump has just 0:06:22.000 --> 0:06:25.719 declared seventy five days of a free pass for TikTok, 0:06:26.480 --> 0:06:28.840 and there does not seem to be any statutory support 0:06:28.880 --> 0:06:33.560 for that. This is an example of how the social 0:06:33.600 --> 0:06:39.200 media corporations have really come to plunder the American town square. 0:06:39.320 --> 0:06:41.880 There's an old saying in tech that if you're not paying, 0:06:41.920 --> 0:06:46.680 you're the product. Well, big tech has productized Americans attention 0:06:46.760 --> 0:06:49.279 spans and our social lives for the last fifteen years, 0:06:49.320 --> 0:06:52.640 and both parties have failed to rain them in. And 0:06:52.680 --> 0:06:56.799 now TikTok. Excuse me, now, Trump is not only inviting 0:06:56.800 --> 0:07:00.400 American corporate abuse of the town square, he's all allowing 0:07:00.480 --> 0:07:01.800 Chinese communist abuse of it. 0:07:03.520 --> 0:07:08.000 Congressman, the order that Trump signed yesterday called for a 0:07:08.120 --> 0:07:10.840 review of the intelligence surrounding. 0:07:10.240 --> 0:07:11.800 The risk posed by TikTok. 0:07:12.000 --> 0:07:15.400 Are you concerned at all that the incoming administration might 0:07:15.480 --> 0:07:19.440 be glossing over or prepared to gloss over those risks 0:07:19.520 --> 0:07:21.920 in its eagerness to try to strike a deal and 0:07:22.000 --> 0:07:22.840 keep the app going. 0:07:23.720 --> 0:07:26.880 Yes, And there's two core risks. One is, of course, 0:07:27.240 --> 0:07:31.880 american's personal data, geolocation data, personal contact information than a 0:07:31.960 --> 0:07:34.600 social graph of their lives. But the second, I think 0:07:34.600 --> 0:07:38.360 more concerningly actually is control over the algorithm itself. What 0:07:38.520 --> 0:07:42.400 content is suppressed, what content is amplified, That is ultimately 0:07:42.400 --> 0:07:44.440 dictated by the Chinese Communist Party, And we need to 0:07:44.440 --> 0:07:46.160 be very clear about this. There's a lot of handwaving 0:07:46.200 --> 0:07:50.560 around this. Xijingping makes those decisions, and what that means 0:07:50.640 --> 0:07:54.360 is that Chinese kids see very different content, mostly educational, 0:07:54.480 --> 0:07:57.520 than American kids do. And I don't know why the 0:07:57.600 --> 0:08:01.040 United States would want to outsource the education and ideological 0:08:01.080 --> 0:08:04.560 cohesion of an entire generation to our greatest adversary. Now 0:08:04.680 --> 0:08:08.840 you underlay this ignorance of that core risk with the 0:08:08.840 --> 0:08:13.640 fact that Trump just issued a meme coin that basically 0:08:13.720 --> 0:08:17.000 is the equivalent of him opening up a Swiss bank account, 0:08:17.560 --> 0:08:21.400 inviting foreign adversaries and foreign individuals and corporate interests to 0:08:21.440 --> 0:08:24.120 deposit money into it secretly and then show him the receipts. 0:08:24.520 --> 0:08:27.520 That opens up the way for monumental corruption in the 0:08:27.520 --> 0:08:28.280 sale of TikTok. 0:08:29.600 --> 0:08:32.959 We'll talk about Trump Coin and indeed Milania's meme coin 0:08:33.040 --> 0:08:36.200 two a little bit later. But Congressman, I go back 0:08:36.240 --> 0:08:38.079 to the fact that you said that this extension is 0:08:38.160 --> 0:08:42.800 ultimately illegal. Now you've also said that there's hand waving 0:08:43.040 --> 0:08:44.040 now bite dance in. 0:08:44.000 --> 0:08:44.560 And of itself. 0:08:44.600 --> 0:08:48.559 Would say, look, control does not lie in China or Shijiping, 0:08:48.720 --> 0:08:52.400 but up to TikTok in and of itself. But going 0:08:52.440 --> 0:08:54.719 back to if indeed we did see some sort of 0:08:54.800 --> 0:08:58.120 joint venture more US ownership of TikTok, with that in 0:08:58.160 --> 0:09:00.520 any way a piece some of your national security consents. 0:09:01.960 --> 0:09:04.160 As with many things, he says, I have no idea 0:09:04.200 --> 0:09:06.760 what Trump was talking about when he said like the 0:09:06.880 --> 0:09:09.360 US government would have a fifty percent stake or something 0:09:09.400 --> 0:09:13.040 like that. There's about seventy five unanswered questions in between 0:09:13.040 --> 0:09:16.200 that statement and the actuality of it. Here's what we want, though, 0:09:16.360 --> 0:09:18.000 Here is the goal of the bill. First of all, 0:09:18.200 --> 0:09:20.040 we don't want to ban TikTok. We don't want to 0:09:20.040 --> 0:09:21.720 ban any of the social media. They're here to stay, 0:09:21.800 --> 0:09:24.800 just like radio and TV before them. But what we 0:09:24.840 --> 0:09:27.640 do want to do is reclaim control of the digital 0:09:27.679 --> 0:09:31.240 town square from this Chinese communist and American corporate malfeasance. 0:09:31.520 --> 0:09:33.640 And to do that we need TikTok to answer to 0:09:33.760 --> 0:09:36.640 US law. And then the second step is Congress needs 0:09:36.640 --> 0:09:39.680 to pierce Section two thirty and establish a duty of 0:09:39.720 --> 0:09:43.120 care for all of these social media corporations. That means 0:09:43.480 --> 0:09:46.840 that we can allow them to host things like deep 0:09:46.880 --> 0:09:51.120 fake pornography, which ninety eight percent of online deep fake 0:09:51.200 --> 0:09:55.280 videos or pornographic content targeting women non consensually. These tech 0:09:55.320 --> 0:09:57.280 CEOs don't care. They don't have to care. They're not 0:09:57.360 --> 0:09:59.040 liable for it. Congress needs to end that. 0:10:01.240 --> 0:10:04.520 When we're thinking therefore about the next steps. 0:10:04.200 --> 0:10:05.440 You seem to be going more broadly. 0:10:05.480 --> 0:10:09.680 We've had steps being taken by the CEO of Matter 0:10:09.760 --> 0:10:13.000 as well to reduce fact checking here in the United States. 0:10:13.280 --> 0:10:15.079 How has that been a cause of anxiety for you 0:10:15.200 --> 0:10:17.840 or is that something that you feel. Ultimately, yes, we 0:10:17.920 --> 0:10:23.200 could see more community focus on preserving what is said 0:10:23.280 --> 0:10:24.200 on the internet or not. 0:10:25.840 --> 0:10:30.280 So, I'm actually sympathetic to Zuckerberg's claim that fact checking 0:10:30.360 --> 0:10:32.959 was not proving effective. Now we can debate how accurate 0:10:32.960 --> 0:10:34.720 the fact checking was, but the point is that people 0:10:34.720 --> 0:10:37.800 didn't believe the fact checking, and ultimately truth has to 0:10:37.840 --> 0:10:41.720 be communally acknowledged and so moving towards community notes, if 0:10:41.760 --> 0:10:44.440 he can demonstrate that that's more effective and building trust 0:10:44.480 --> 0:10:49.520 and building shared consensus about the facts, I'm receptive to that. 0:10:49.800 --> 0:10:52.040 But the underlying point here is that any Web two 0:10:52.120 --> 0:10:55.000 point zero approach to doing this is ultimately going to 0:10:55.000 --> 0:10:58.520 be ineffectual because these are walled gardens controlled by corporations, 0:10:58.520 --> 0:11:02.439 and ultimately, these corporations monetize the attention span of Americans 0:11:02.679 --> 0:11:06.080 and sell off that product to the highest advertising bidder. 0:11:06.200 --> 0:11:08.040 And for so long as that is the case, they're 0:11:08.080 --> 0:11:10.480 always going to amplify the seven Deadly sins, things that 0:11:10.520 --> 0:11:13.680 foment pride and greed and lust and end be because. 0:11:13.480 --> 0:11:14.440 That's what people click on. 0:11:14.800 --> 0:11:17.439 We need a Web three point zero transition where people 0:11:17.480 --> 0:11:19.800 have more custody of their personal data and where the 0:11:19.840 --> 0:11:23.760 algorithms are answerable to communities in a pluralistic fashion, the 0:11:23.760 --> 0:11:26.120 way that Taiwan has done so under the leadership of 0:11:26.160 --> 0:11:26.920 the Digital Minister. 0:11:28.480 --> 0:11:31.480 Congressman, do you see any role for government in trying 0:11:31.520 --> 0:11:34.680 to help in this area of moderation? We've seen the 0:11:34.760 --> 0:11:38.120 direction of travel in Washington move far away from that. 0:11:38.360 --> 0:11:39.560 What do you see. 0:11:41.720 --> 0:11:46.120 Government needs to revoke Section two thirty so the tech 0:11:46.240 --> 0:11:49.720 industry will claim that Section two thirty protects free expression, 0:11:50.000 --> 0:11:53.360 and it's just laughable. James Madison did not write Section 0:11:53.400 --> 0:11:55.600 two thirty. It was wrapped in the nineteen nineties, and 0:11:55.679 --> 0:11:59.000 it is an industry specific shield for the social media 0:11:59.040 --> 0:12:03.319 corporations and not be liable for toxicity, for defamation, for cyberstocking, 0:12:03.320 --> 0:12:04.800 and intimate privacy violations. 0:12:04.840 --> 0:12:06.200 Things that are already illegal. 0:12:06.200 --> 0:12:07.440 I want to be clear about this, things that are 0:12:07.440 --> 0:12:10.480 already towards under civil and criminal law. They are not 0:12:10.520 --> 0:12:13.560 susceptible for a duty of care. To prevent them, we 0:12:13.640 --> 0:12:16.679 need to make them liable for it. And then we 0:12:16.760 --> 0:12:21.920 need to bring in the blockchain industry under regulatory clarity 0:12:22.200 --> 0:12:24.160 so that we can transition to a Web three point 0:12:24.200 --> 0:12:27.440 zero approach to social media governance. Because what's working in 0:12:27.480 --> 0:12:30.240 Web two point zero has worked well for the tech CEOs, 0:12:30.240 --> 0:12:31.960 it has not worked well for American children. 0:12:33.320 --> 0:12:36.160 Those are both pretty ambitious goals. Congressmen, do you see 0:12:36.240 --> 0:12:39.680 enough of a consensus in this Congress between Democrats and 0:12:39.760 --> 0:12:43.440 Republicans to be able to get both of those things done, 0:12:43.559 --> 0:12:47.120 Especially with respect to Section two thirty, which we've been 0:12:47.280 --> 0:12:48.360 hearing about for so long. 0:12:50.040 --> 0:12:52.160 You're certainly right to the tech lobby has been effective 0:12:52.160 --> 0:12:56.319 at crushing even marginal steps towards revoking Section two thirty. 0:12:56.320 --> 0:12:59.240 I will note, though, that last Congress the chair and 0:12:59.320 --> 0:13:01.760 ranking member of the Energy and Commerce Committee on which 0:13:01.760 --> 0:13:04.600 I said, and which has jurisdiction over the tech industry, 0:13:04.880 --> 0:13:07.079 jointly wrote an outbed in The Wall Street Journal calling 0:13:07.120 --> 0:13:08.960 for the sun setting of Section two thirty. Now it 0:13:08.960 --> 0:13:11.720 didn't happen last term, but that is a significant step 0:13:11.760 --> 0:13:15.040 forward where you see bipartisan leadership towards revoking it. I 0:13:15.120 --> 0:13:17.720 think we are hitting an inflection point where Americans are 0:13:17.760 --> 0:13:21.439 tired of having toxicity pumped into the national discourse by 0:13:21.440 --> 0:13:24.040 people who get richer the more time their kids spend 0:13:24.040 --> 0:13:26.400 scrolling on their smartphones. It is time for us to 0:13:26.440 --> 0:13:28.959 move away from this phone based childhood towards a play 0:13:29.000 --> 0:13:31.880 based childhood. But to do that, we've got to reclaim 0:13:31.920 --> 0:13:35.120 ownership over how we talk to each other. Section two 0:13:35.200 --> 0:13:37.199 thirty is the first step, and I do think we're 0:13:37.200 --> 0:13:38.760 building bipartisan support for it. 0:13:39.440 --> 0:13:41.400 I hate you, but there was a lot of bipartisan 0:13:41.960 --> 0:13:44.560 support to ban TikTok, and then suddenly, as the hour 0:13:44.640 --> 0:13:47.960 drew near, we saw some real one eighties from across 0:13:48.000 --> 0:13:50.960 the aisle. Congressman and I go back to the TikTok case, 0:13:50.960 --> 0:13:53.600 in particular because the fact they keep on talking about 0:13:53.600 --> 0:13:57.160 web three point zero. You're talking about decentralization here, Well, 0:13:57.160 --> 0:13:59.160 we've heard that from a pitch of one of the 0:13:59.160 --> 0:14:02.880 wanna be owners, Frank McCourt, and indeed, working with Kevin O'Leary, 0:14:02.920 --> 0:14:07.440 they want to be seeing potentially this project liberty. What 0:14:07.440 --> 0:14:10.440 are you thinking more broadly about their particular offer, because 0:14:10.480 --> 0:14:13.560 they don't want the algorithm. 0:14:14.000 --> 0:14:14.200 Yeah. 0:14:14.240 --> 0:14:17.439 Web three point zero fundamentally is about open governance. It's 0:14:17.480 --> 0:14:22.200 about creating pluralism and creating a sense of community ownership 0:14:22.280 --> 0:14:25.320 over this. In the same way that Americans insist that 0:14:25.360 --> 0:14:29.680 our actual town squares are places where communities have an 0:14:29.720 --> 0:14:34.160 interest in upholding order and providing freedom of expression, we 0:14:34.240 --> 0:14:36.200 need the same thing for our digital town square, because 0:14:36.200 --> 0:14:38.760 that's where Americans are spending four to six hours every 0:14:38.800 --> 0:14:41.560 day taking in news, information, and entertainment. 0:14:41.760 --> 0:14:43.160 I think too many Americans just. 0:14:43.120 --> 0:14:45.720 Assume that the status quo over the last fifteen years 0:14:46.360 --> 0:14:49.400 is all that we can expect from social media. But 0:14:49.400 --> 0:14:51.720 if you look back at every other media innovation from 0:14:51.720 --> 0:14:54.200 the printing press in the fifteen hundreds all the way 0:14:54.240 --> 0:14:56.440 through TV and radio, you will see that there was 0:14:56.480 --> 0:14:59.400 a moment of disruption and then new norms, conventions, and 0:14:59.480 --> 0:15:03.880 laws where established to help bring some harmony to this 0:15:04.720 --> 0:15:08.800 new way of disseminating information. The challenge here with social 0:15:08.880 --> 0:15:11.520 media is that we've had to digest this tech innovation 0:15:11.680 --> 0:15:13.480 in a much shorter amount of time. We've had less 0:15:13.520 --> 0:15:15.400 than half a generation to do it, and so the 0:15:15.440 --> 0:15:18.200 disruption has been even greater. But I do think that 0:15:18.240 --> 0:15:19.960 we are hitting an inflection point where we're going to 0:15:19.960 --> 0:15:22.320 start to adopt new roles in governance structures. 0:15:24.200 --> 0:15:29.520 US Representative Jacocinclaus from Massachusetts, Thank you. Coming up, we'll 0:15:29.560 --> 0:15:33.320 hear from Bank of America's CEO, Brian moynihan out of Davos. 0:15:33.400 --> 0:15:35.280 Next, this is Bloomberg. 0:15:37.280 --> 0:15:40.280 Bloomberg is live at Davos, and Bloomberg's Jonathan Faraoh and 0:15:40.280 --> 0:15:43.600 Lisa Bromwitz are sat down with the Bank of America's CEO. 0:15:45.400 --> 0:15:47.600 Hey guys, great to be with you, day two of 0:15:47.680 --> 0:15:50.960 the World Economic Forum here in Davos, Switzerland, minds firmly 0:15:50.960 --> 0:15:52.520 elsewhere in Washington, d C. 0:15:52.800 --> 0:15:53.200 Isn't that right? 0:15:53.320 --> 0:15:55.840 Least twenty four hours of conversations about how great America 0:15:55.960 --> 0:15:57.680 is and how the rest of the world will struggle 0:15:57.880 --> 0:15:59.360 with the incoming President Donald Trump. 0:15:59.440 --> 0:16:03.080 Yeah, station here at Davos has been what's America going 0:16:03.120 --> 0:16:05.960 to do? How can I leverage myself to be in 0:16:05.960 --> 0:16:09.240 the best position possible? And oh yeah, what's the latest headline? 0:16:09.280 --> 0:16:12.240 Brom Monahan alongside us, the chairman of CEO of Bank 0:16:12.240 --> 0:16:14.200 for America. We're going to cover all of that through 0:16:14.200 --> 0:16:16.400 the next eight minutes or so. There's an important occasion 0:16:16.440 --> 0:16:19.000 to mark fifteen years at the top of Bank for America. 0:16:19.080 --> 0:16:20.840 Now, it's been an honor lead to company and we've 0:16:20.840 --> 0:16:23.920 had some fun and it was interesting to start. For 0:16:23.960 --> 0:16:26.120 the last ten years or so, we've been on a 0:16:26.160 --> 0:16:28.320 role just producing responsible growth and the team does a 0:16:28.320 --> 0:16:30.400 great job and we can take pride we've put the 0:16:30.440 --> 0:16:30.880 company to. 0:16:30.880 --> 0:16:32.760 Where it should be. Is one of the great companies 0:16:32.760 --> 0:16:33.200 in the world. 0:16:33.360 --> 0:16:34.440 Beyond interesting. 0:16:34.480 --> 0:16:37.280 Fifteen years ago it was the absorption of Countrywide Financial. 0:16:37.360 --> 0:16:38.000 It was Meyril. 0:16:38.000 --> 0:16:40.040 It's a very very different bank and a very very 0:16:40.040 --> 0:16:42.200 different moment. That phrase you use is one you've used 0:16:42.200 --> 0:16:45.600 so many times, responsible growth. There is a feeling that 0:16:45.640 --> 0:16:47.600 maybe we moved towards something house in the world of 0:16:47.640 --> 0:16:49.560 banking over the next few years. Some might say it's 0:16:49.560 --> 0:16:51.440 sort of reckless growth, which is going to go for it? 0:16:51.480 --> 0:16:52.800 How would you describe the future. 0:16:53.200 --> 0:16:56.920 So what you're hearing is enthusiasm for in the investment 0:16:56.920 --> 0:16:59.400 banking side, it particularly transactions. Right, for a long time, 0:16:59.560 --> 0:17:02.000 for last couple of years, it's been hard to get 0:17:02.040 --> 0:17:04.960 a transaction through. And what stops a seller from selling 0:17:05.000 --> 0:17:07.160 or buyer from buying is this thing is delayed. 0:17:07.200 --> 0:17:09.280 I'm exposed and so what they'll do is they'll push 0:17:09.320 --> 0:17:10.119 it through. So there's a lot of. 0:17:10.160 --> 0:17:12.760 Enthusiasm that they'll be better growth United States. There a 0:17:12.840 --> 0:17:15.199 lot of enthusiasm by the bankers saying these deals can 0:17:15.240 --> 0:17:17.200 get done, so I can go have this future conversation. 0:17:17.480 --> 0:17:19.960 It's just not another idea that goes through the system 0:17:20.000 --> 0:17:22.240 and everybody says, that's a great idea, But that can 0:17:22.240 --> 0:17:24.159 be a great idea, let's go do it, or a 0:17:24.160 --> 0:17:25.000 great idea, I don't. 0:17:24.880 --> 0:17:25.280 Want to do it. 0:17:25.320 --> 0:17:27.159 But it's a more of a substance space than it 0:17:27.200 --> 0:17:29.160 is more of a worry about the environment. 0:17:29.200 --> 0:17:29.400 Right. 0:17:29.600 --> 0:17:31.880 Are you basically saying that there's more enthusiasm, that there 0:17:31.920 --> 0:17:34.000 is conviction and will to actually get stuff done. 0:17:34.119 --> 0:17:36.399 Yeah, I think you saw some deals getting announced and 0:17:36.440 --> 0:17:38.840 you'll see more deals getting announced in our sector in banking, 0:17:39.000 --> 0:17:42.400 especially in the United States. The consolidation is still far 0:17:42.440 --> 0:17:43.400 away from being. 0:17:45.160 --> 0:17:45.560 Done. 0:17:45.880 --> 0:17:47.880 They'll always be big banks or always be small banks, 0:17:47.920 --> 0:17:49.840 but you'll let people make a decision what they. 0:17:49.680 --> 0:17:49.960 Want to do. 0:17:49.960 --> 0:17:51.679 And there haven't been a lot of bank deals done. 0:17:51.880 --> 0:17:54.240 Bank to bank deals we can't do them, it's not legal, 0:17:54.280 --> 0:17:57.040 but as investment banking we can help other people do them, 0:17:57.040 --> 0:17:58.679 and it haven't been a lot done because just uncertain 0:17:58.720 --> 0:18:01.280 you're getting caught in a transaction and having issues. So 0:18:01.320 --> 0:18:04.480 the belief that they should promote the banks consolidate and 0:18:04.480 --> 0:18:06.680 getting more efficient, passing that through to customers, passing that 0:18:06.800 --> 0:18:10.280 through to small businesses, et cetera is different. 0:18:10.320 --> 0:18:11.080 Will be a change. 0:18:11.119 --> 0:18:13.800 Well, there's the banking sector specifically and some of the 0:18:13.840 --> 0:18:16.520 deregulation and whether some of these mergers and consolidation will 0:18:16.560 --> 0:18:17.480 be a looted, and. 0:18:17.440 --> 0:18:18.760 Then there's a broader corporate sector. 0:18:18.760 --> 0:18:20.800 As some of the enthusiasm we've seen and we've heard 0:18:20.840 --> 0:18:23.639 from the cities, a head of banking from JP Morgan, 0:18:24.920 --> 0:18:27.520 how much do you see that being maybe a little 0:18:27.720 --> 0:18:31.080 premature based on some of the policies coming down the 0:18:31.119 --> 0:18:34.480 pike and the uncertainty around debt, deficit and rates. 0:18:34.920 --> 0:18:37.720 Well, I think you have to divorce a little bit 0:18:37.800 --> 0:18:40.560 some of the fiscal work that has to be done, 0:18:40.560 --> 0:18:43.080 and in coming Treasury or Secretary and others have to 0:18:43.080 --> 0:18:45.080 take very seriously this question of how do we manage 0:18:45.240 --> 0:18:47.720 the revenue stream, the expense stream, and the amount of 0:18:47.760 --> 0:18:50.560 debt and get it all to work out. That one 0:18:50.600 --> 0:18:52.240 of the ways that that becomes easier if you have 0:18:52.320 --> 0:18:55.119 more activity and more things going on. 0:18:55.240 --> 0:18:56.920 So I think the enthusiasm. 0:18:56.600 --> 0:18:59.399 Here from the bankers is more structurally. The belief is 0:18:59.600 --> 0:19:04.359 that even starting yesterday, you don't have you don't have 0:19:04.400 --> 0:19:06.360 the constraint that you have, so you can go. If 0:19:06.400 --> 0:19:10.080 there's more that enables more, that's good stuff, but right 0:19:10.119 --> 0:19:12.240 now it'll stop it going in the wrong direction and 0:19:12.480 --> 0:19:16.280 look hard. Medium small sized businesses their biggest complaint last summer. 0:19:16.359 --> 0:19:18.280 Last time I was here and we. 0:19:18.400 --> 0:19:22.160 Talked to the administration about it was the biggest complaint 0:19:22.200 --> 0:19:24.800 was you're in my pocket. You're slow me down. I 0:19:24.840 --> 0:19:27.080 can't get things done. I want to permit to do something, 0:19:27.080 --> 0:19:30.040 it takes forever. I want your labor rules. All this 0:19:30.040 --> 0:19:31.680 stuff was going on just over and over, and small 0:19:31.760 --> 0:19:34.320 medium sized business don't have the thousands of people that 0:19:34.359 --> 0:19:36.440 big companies have to figure it all out and they're 0:19:36.480 --> 0:19:38.800 figuring out their own The same person's running the business 0:19:38.920 --> 0:19:40.960 at nice sitting Anders say, so, what does this new 0:19:40.960 --> 0:19:43.439 taxation strategy on so security mean to me? 0:19:44.080 --> 0:19:45.520 How does it apply? How I have to change all 0:19:45.560 --> 0:19:46.080 my systems? 0:19:46.119 --> 0:19:48.800 And so they're just saying, if you just stop, you know, 0:19:49.359 --> 0:19:50.120 things will get better. 0:19:50.200 --> 0:19:52.240 So you're on the number one lene to small businesses 0:19:52.359 --> 0:19:54.760 in the United States, give us the read on things 0:19:54.960 --> 0:19:57.400 right now? Are they already making those decisions to make 0:19:57.440 --> 0:19:59.280 a move to make those investments that they were on 0:19:59.600 --> 0:20:02.159 hold over the last four years doing? Are they already 0:20:02.160 --> 0:20:03.000 making that most so. 0:20:02.960 --> 0:20:04.920 If you come over the last say, six eight months 0:20:05.000 --> 0:20:08.760 or so that it went from regulation and inflation, the 0:20:08.800 --> 0:20:11.360 inflation has kind of come down as their worry. Right now, 0:20:11.640 --> 0:20:14.600 what's actually interesting is they're going back to labor shortages 0:20:14.840 --> 0:20:17.240 and rightly now the interesting thing about that that has 0:20:17.600 --> 0:20:19.840 a question about immigration and all this stuff going on. 0:20:20.200 --> 0:20:21.560 But what they're feeling that is demand. 0:20:21.800 --> 0:20:24.880 I need people to do things, and so they're starting 0:20:24.920 --> 0:20:28.320 to feel the demand steady. They remember when the Fed 0:20:28.440 --> 0:20:30.520 was raising rates high, their cost of barring went up 0:20:30.560 --> 0:20:33.280 a lot. They went from three hundred basis points over 0:20:33.320 --> 0:20:35.280 an index that went up by five hundred basis points. 0:20:35.320 --> 0:20:38.000 That's a big number, and so that caused them to say, 0:20:38.080 --> 0:20:40.879 let me be careful and then if as the rates 0:20:40.880 --> 0:20:42.520 come download but they feel a little better and now 0:20:42.600 --> 0:20:44.760 let's say, Okay, I have the opportunity to grow, but 0:20:45.119 --> 0:20:46.800 can I get the people? And remember that was the 0:20:46.840 --> 0:20:50.200 twenty twenty one twenty two timeframe, so in there there's 0:20:50.200 --> 0:20:53.080 got to be a solution this immigration. It doesn't constrain 0:20:53.119 --> 0:20:54.960 those small medium sized business for growing or they're going 0:20:55.000 --> 0:20:55.600 to start letting. 0:20:55.640 --> 0:20:57.040 Would you say, just to jump in, would you say 0:20:57.080 --> 0:20:59.320 we are supply constrained? Do you think we are prone 0:20:59.440 --> 0:21:00.520 to have these in flight? 0:21:02.240 --> 0:21:03.360 Yes? And no, And. 0:21:04.960 --> 0:21:09.200 We don't know honestly because because the stimulus after the pandemic, 0:21:09.640 --> 0:21:11.320 there was so much more than there maybe had to 0:21:11.400 --> 0:21:14.960 be by technical economic discussion, you know, it's hard to 0:21:15.000 --> 0:21:17.320 say whether we're supply constrained and other things. 0:21:17.480 --> 0:21:18.800 And it were supply constraints because it. 0:21:18.800 --> 0:21:22.480 Cut off a supply and the stoppage of goods coming 0:21:22.480 --> 0:21:24.199 in a country and shipping and all that stuff that 0:21:24.240 --> 0:21:26.040 we went through. So you haven't gotten to a real 0:21:26.119 --> 0:21:29.080 normalized side of that yet. But that's the blame for 0:21:29.080 --> 0:21:32.800 the current thing. I think the supply shortages can mitigate. 0:21:33.240 --> 0:21:34.639 If you know, we got to be a little care 0:21:34.760 --> 0:21:36.399 about labor supply, We've got to be a little care 0:21:36.440 --> 0:21:37.360 for about the. 0:21:37.359 --> 0:21:39.040 Terriffs impacting supply and things. 0:21:39.040 --> 0:21:41.680 But I think people the second sourcing's gone on, people 0:21:41.680 --> 0:21:42.919 are finding places to get stuff. 0:21:43.160 --> 0:21:45.639 So I'm not quite sure that's going to be the issue. 0:21:45.760 --> 0:21:47.359 But a lot of what we think it was the 0:21:47.400 --> 0:21:50.000 issue is actually the pandemic, the stimulus and the impact 0:21:50.000 --> 0:21:52.560 the pandemic on supply that's worth the sort of system. 0:21:52.680 --> 0:21:54.399 So John started with the fact that you've been in 0:21:54.440 --> 0:21:57.320 Bank of America for fifteen years. We keep hearing about 0:21:57.320 --> 0:22:00.480 succession plans in different places. What's your success should plan? 0:22:00.880 --> 0:22:02.720 But you're trying to throw me out, No. 0:22:02.640 --> 0:22:03.120 Not at all. 0:22:03.200 --> 0:22:05.200 I'm just wondering because this is something that we. 0:22:08.560 --> 0:22:08.800 Lost. 0:22:08.880 --> 0:22:13.520 Questions the way, the fascination with all this is interesting, 0:22:13.600 --> 0:22:15.359 and one just means we're all getting older. 0:22:15.400 --> 0:22:18.160 So what they're out is we run. 0:22:18.400 --> 0:22:20.600 We run across in our company through the top three layers, 0:22:20.600 --> 0:22:24.040 including for the CEO succession. Every six months, we go 0:22:24.080 --> 0:22:26.680 through everything who the media successors for every one of 0:22:26.680 --> 0:22:29.040 our teammates jobs, and we have a slate, and we 0:22:29.640 --> 0:22:31.160 go from a slip because if we run a company, 0:22:31.240 --> 0:22:35.359 people leave for a whole, they retire, they get another job, whatever, 0:22:35.440 --> 0:22:36.560 and you're always filling jobs. 0:22:36.560 --> 0:22:38.280 And so with the way the board will make a 0:22:38.359 --> 0:22:38.840 choice at. 0:22:38.720 --> 0:22:41.960 Some point, I'm not going anywhere unless they throw me out. 0:22:41.960 --> 0:22:43.080 They know that. 0:22:43.280 --> 0:22:45.359 But my job, and one of the biggest jobs I have, 0:22:45.560 --> 0:22:48.800 is preparing people for the what it would be like 0:22:48.840 --> 0:22:52.040 to run this company out there and and and then 0:22:52.240 --> 0:22:53.960 and and that's important. So we do a lot with 0:22:54.000 --> 0:22:55.879 our team to get them used to experiences and get 0:22:55.920 --> 0:22:57.639 them to learn more about the trade offs you have 0:22:57.640 --> 0:22:58.960 to make at the top of the house, because if 0:22:58.960 --> 0:23:01.119 you come through a business or come through a function, 0:23:01.359 --> 0:23:03.760 you haven't made those trails. That's part of our general strategy. 0:23:03.760 --> 0:23:05.680 And so we talked to our board. But you'll never 0:23:05.680 --> 0:23:08.239 hear us discuss A is in and B is not. 0:23:08.800 --> 0:23:10.359 That to me is the worst thing you can do. 0:23:10.400 --> 0:23:12.119 I went through that process in the end of two 0:23:12.119 --> 0:23:14.800 thousand and nine. Whether it's day to day speculation, that's. 0:23:14.600 --> 0:23:15.360 Not the way to do it. 0:23:15.480 --> 0:23:16.560 Well, thank you for that very much. 0:23:16.680 --> 0:23:17.520 You'll be the first first one. 0:23:17.560 --> 0:23:18.159 Okay, thank you. 0:23:18.240 --> 0:23:19.080 I appreciate that. 0:23:19.080 --> 0:23:21.080 We only have about thirty seconds. You said something to 0:23:21.160 --> 0:23:23.639 us when we were at Bank of America that AI 0:23:24.040 --> 0:23:27.160 would basically keep the staff the same size but increase 0:23:27.400 --> 0:23:28.440 the footprint of business. 0:23:28.640 --> 0:23:29.439 Do you stand by that? 0:23:29.920 --> 0:23:33.119 Yeah, there are two facts I'll give you. One is 0:23:33.160 --> 0:23:34.280 we run the company. 0:23:33.960 --> 0:23:36.520 On the nominal amount of dollars of expenses we did 0:23:36.640 --> 0:23:39.640 ten years ago almost now, nominal or not not inflation 0:23:39.760 --> 0:23:41.879 just and we run it on thirty thousand less people. 0:23:42.000 --> 0:23:46.200 That is all digitization, and AI is an extension of automation, 0:23:46.320 --> 0:23:50.880 digitization models, et cetera, automating work, taking out work and automated. 0:23:50.920 --> 0:23:53.080 Therefore you don't need and I think AI keeps going. 0:23:53.480 --> 0:23:56.200 The idea is, if we're good, we'll keep adjusting where 0:23:56.320 --> 0:23:58.000 the teammates end up. So it might not be the 0:23:58.000 --> 0:24:00.800 same two hundred twelve thousand people two hundred and thirteen 0:24:00.800 --> 0:24:03.000 thousand people doing the same thing ten years from now. Yeah, 0:24:03.040 --> 0:24:04.920 but my guess is that our employment levels will stay 0:24:04.960 --> 0:24:07.320 relatively said if you work towards stuff that can't be 0:24:07.400 --> 0:24:08.480 replicated near turn by. 0:24:08.440 --> 0:24:10.760 Air Bran and you've been super generous with your time, 0:24:10.800 --> 0:24:12.280 and you show me up every year because you always 0:24:12.280 --> 0:24:14.080 come out here with a suit jacket on and I'm 0:24:14.119 --> 0:24:16.840 sitting here with like a winter jacket. Yeah, but yeah, 0:24:16.840 --> 0:24:18.760 I know, I know you've been influenced by Brian. 0:24:18.880 --> 0:24:21.439 No, it's actually just a lot more Thanks for. 0:24:21.440 --> 0:24:23.920 America CEO and chairman. Bye, Thank you guys Banks. 0:24:23.920 --> 0:24:27.879 See you ending in artificial intelligence. We so appreciate it 0:24:28.080 --> 0:24:39.080 out in Davos. Fantastic conversation. Welcome back to bluemog Technology. 0:24:39.119 --> 0:24:41.560 I'm Caroline Hyde in New York and. 0:24:41.480 --> 0:24:42.880 I'm Mike Sheppard in Washington. 0:24:43.080 --> 0:24:45.680 Quick check on these markets, Mike, because look, we've got 0:24:45.720 --> 0:24:47.879 a little bit of a reprieve in the markets as 0:24:48.000 --> 0:24:50.960 we try to digest a whole host of executive orders 0:24:50.960 --> 0:24:54.440 and moves made by the new administration as Trump takes office. 0:24:54.440 --> 0:24:56.800 We're currently up two ten percent on the NASAK one hundred, 0:24:56.880 --> 0:24:59.760 investors wanting to see the growth potential rather than some 0:24:59.840 --> 0:25:02.679 of the the trade hindrances for now. But Apple in 0:25:02.760 --> 0:25:05.679 the spotlight down more than four point three percent. This 0:25:05.720 --> 0:25:09.320 is the worst day since August of last year. It's 0:25:09.320 --> 0:25:12.560 currently training in the lowest September twenty twenty four. This 0:25:12.640 --> 0:25:16.920 again is China anxiety. Apple intelligence not really feeding through 0:25:16.920 --> 0:25:20.080 in demand for the iPhone as much as analyst anticipated, 0:25:20.119 --> 0:25:24.280 Loop Capital and Jeffrey's cut their overall view of Apple 0:25:24.600 --> 0:25:27.119 from a hold or indeed one indeed saying to a 0:25:27.240 --> 0:25:29.200 cell let's move on and have a look at what's 0:25:29.480 --> 0:25:29.960 happening in the. 0:25:29.960 --> 0:25:32.080 World of crypto as well, because no executive order. 0:25:32.080 --> 0:25:33.919 When it comes to bitcoin, I'm afraid we're up two 0:25:33.960 --> 0:25:36.320 point nine percent, but we're still above one hundred and 0:25:36.320 --> 0:25:38.160 five thousand dollars micro strategy. 0:25:38.160 --> 0:25:40.080 On the downside, a lot of the crypto exposed. 0:25:39.800 --> 0:25:41.600 Names are on the fact that maybe we didn't get 0:25:41.640 --> 0:25:44.040 an EO out the gate when it comes to the 0:25:44.119 --> 0:25:48.280 approval of bitcoin and cryptocurrencies more broadly by. 0:25:48.160 --> 0:25:49.000 The new administration. 0:25:49.040 --> 0:25:52.000 Microstratuy, you're by two when it's buying yet more bitcoin 0:25:52.080 --> 0:25:55.119 as we know an eleventh consecutive week. But there was 0:25:55.160 --> 0:25:58.080 good news over the weekend into the inauguration for many 0:25:58.119 --> 0:26:02.640 crypto holders. Let's go to it, Blu MiGs Isabelle Lee, 0:26:02.760 --> 0:26:06.800 is here an extraordinary announcement coming from the incoming at 0:26:06.800 --> 0:26:10.320 that point President Trump. Now is President Trump and Milania 0:26:10.440 --> 0:26:13.720 both having a mean coin? What does this mean for 0:26:13.760 --> 0:26:14.199 the space? 0:26:14.280 --> 0:26:15.760 I really thought it was a joke when I saw 0:26:15.760 --> 0:26:17.800 it online, because you see a lot of parodies, but 0:26:17.880 --> 0:26:19.520 then it was real. I mean, now we don't know 0:26:19.600 --> 0:26:21.760 yet if this is related to Trump or not. His 0:26:21.840 --> 0:26:23.960 team is behind it, but we have his son Eric 0:26:24.000 --> 0:26:26.560 Trump saying that this is quote, the greatest digital meme 0:26:26.760 --> 0:26:28.679 on earth. So what to make of this? 0:26:28.800 --> 0:26:29.359 Two things? 0:26:29.400 --> 0:26:33.280 Really, On one hand, it's a great thing. It's really 0:26:33.320 --> 0:26:35.879 signifies a new regime, the fact that you have a 0:26:35.920 --> 0:26:39.639 coin named after Trump and also Milania. When Milanna was 0:26:39.720 --> 0:26:42.040 launch launch, by the way, it sucked some of the 0:26:42.080 --> 0:26:43.879 air out of the Trump point, but still at one 0:26:43.880 --> 0:26:45.800 point it was as high as sixty billion. 0:26:46.160 --> 0:26:46.720 That's great. 0:26:46.840 --> 0:26:48.159 But on the other you have if you're long in 0:26:48.160 --> 0:26:49.840 the space, it's great, yes, yes, But. 0:26:49.840 --> 0:26:53.240 On the other you have people saying this highlights the 0:26:53.280 --> 0:26:56.600 memification of the industry. How will the traditional finance people 0:26:56.840 --> 0:26:58.919 take us seriously? Because what is a meme coin? What 0:26:59.000 --> 0:27:01.520 is a meme style? It's just really a joke. So 0:27:01.640 --> 0:27:05.960 it has no underlying asset. They're speculative, they're volatile, it's 0:27:06.119 --> 0:27:09.000 like what is doage coin? You know, but still the 0:27:09.040 --> 0:27:11.480 whole market is one hundred million in valuation, so it's 0:27:11.520 --> 0:27:14.960 an expensive joke. But well this last who knows? So 0:27:15.040 --> 0:27:19.000 it's really interesting, but lots of activity and billions of 0:27:19.000 --> 0:27:20.200 dollars changing hands at. 0:27:20.080 --> 0:27:24.560 That Isabelle, Are you sensing any bruise feelings in the 0:27:24.640 --> 0:27:27.880 industry from not seeing an executive order on day one 0:27:28.040 --> 0:27:32.080 from Trump on crypto or even a mention during his 0:27:32.119 --> 0:27:33.960 inaugural address after being sworn in. 0:27:34.200 --> 0:27:34.680 Absolutely. 0:27:34.760 --> 0:27:37.080 We have bitcoin soaring to a record high on Monday, 0:27:37.080 --> 0:27:38.959 and then it paired back some of those gains from 0:27:39.000 --> 0:27:41.120 one hundred and nine plus thousand, it became one hundred 0:27:41.160 --> 0:27:42.720 and three. And I asked some of that analysts because 0:27:42.720 --> 0:27:44.399 I was on on Monday. I was like, why is 0:27:44.440 --> 0:27:47.320 bitcoin pairing its games? And they were like, because Trump 0:27:47.320 --> 0:27:48.000 didn't mention. 0:27:47.880 --> 0:27:48.720 It in this speech. 0:27:48.840 --> 0:27:49.680 But take note of that. 0:27:49.760 --> 0:27:53.960 The fact that bitcoin faithful, their crypto enthusiasts are expecting 0:27:53.960 --> 0:27:56.440 Trump and the incoming president at that point, the president 0:27:56.440 --> 0:27:58.959 of the United States, they're expecting him to mention it 0:27:59.280 --> 0:28:02.399 in his inaugural speech is already one thing that really 0:28:02.440 --> 0:28:04.800 just means that crypto is becoming mainstream, or if it 0:28:04.880 --> 0:28:06.280 isn't mainstream, t you just yet. 0:28:06.480 --> 0:28:07.560 So it's really something. 0:28:07.600 --> 0:28:09.879 But you know, with Trump focused on tarriffs and energy 0:28:09.920 --> 0:28:13.000 and trade, but they were really hoping and banking on 0:28:13.040 --> 0:28:15.280 the fact that Trump will say something about bitcoin. 0:28:16.640 --> 0:28:18.680 Bloomberg isabell ye, thank you. 0:28:19.320 --> 0:28:22.800 Heading back to Dabos Now, where mistraw AI CEO Arthur 0:28:22.920 --> 0:28:26.680 Mench spoke with Bloomberg TV's Frendcine Lac about the company's 0:28:26.720 --> 0:28:30.719 expansion plans and about his thoughts on Europe's regulatory and 0:28:30.800 --> 0:28:32.240 competitive landscape. 0:28:32.920 --> 0:28:34.760 I like to look at it from a positive point 0:28:34.760 --> 0:28:37.200 of view. Europe has a lot of strength. In particular, 0:28:37.359 --> 0:28:39.520 the talent poolt has access to. The people that are 0:28:39.520 --> 0:28:42.480 building AI, including in the US, are actually mostly Europeans, 0:28:42.760 --> 0:28:45.040 and so the opportunity we had, and that's also the 0:28:45.080 --> 0:28:47.920 thing that we provide to our customers, is the expertise. 0:28:48.240 --> 0:28:51.480 And I think Europe can come together today and realize 0:28:51.520 --> 0:28:54.680 that we've been innovators. We're continent of innovators. We need 0:28:54.720 --> 0:28:58.120 to keep being innovators, and AI is an opportunity to 0:28:58.160 --> 0:29:01.080 continuously innovate. There's a lot of other companies that are 0:29:01.120 --> 0:29:03.400 building that. I'm thinking of ace Email and thinking of 0:29:03.760 --> 0:29:05.600 all of the AI startups that we're working with in 0:29:05.640 --> 0:29:08.960 France and in London, and so let's not look at 0:29:09.120 --> 0:29:11.440 the bad things. Effectively, we have a tendency to play 0:29:11.480 --> 0:29:14.040 a little too much referee in the trillion dollar raise. 0:29:14.840 --> 0:29:17.960 But we have the strength and we just need to 0:29:17.960 --> 0:29:21.800 have the will to create in Europe and to innovate 0:29:21.800 --> 0:29:22.640 and create value there. 0:29:22.960 --> 0:29:25.040 Do you think that there's a first mover advantage in 0:29:25.080 --> 0:29:28.560 this industry or is it really execution and innovation. 0:29:28.200 --> 0:29:28.800 That will win. 0:29:29.120 --> 0:29:31.360 I mean, as in any industry, you have first move 0:29:31.480 --> 0:29:35.680 or advantage. But the AI is going to be a revolution. 0:29:35.760 --> 0:29:37.600 It's going to be long lasting revolution. It's going to 0:29:37.640 --> 0:29:40.680 take decades to actually be rolled fully to enterprises role 0:29:40.720 --> 0:29:43.000 fully to the way we actually behave and the way 0:29:43.000 --> 0:29:46.680 we actually deal with computers, so and a lot of things. 0:29:46.680 --> 0:29:49.160 And we are realizing that enterprises are a bit struggling 0:29:49.200 --> 0:29:51.959 with realizing the value of AI. And that's where you 0:29:52.000 --> 0:29:54.320 need to partner deeply with someone that can help you 0:29:54.760 --> 0:29:58.800 get the expertise, distill the expertise of your company into 0:29:58.880 --> 0:30:01.480 AI systems that can then help you drive the productivity 0:30:01.480 --> 0:30:04.640 that you're expecting. So the we're only we're only five 0:30:04.680 --> 0:30:07.760 percent there, and so everything that is sitting on top 0:30:07.800 --> 0:30:10.080 of model, all of the orchestration part, all of the 0:30:10.440 --> 0:30:12.800 managing data, all of the customization part of things that 0:30:12.800 --> 0:30:14.440 we still need to figure out, and I think we 0:30:14.440 --> 0:30:15.960 have a very good headstart there. 0:30:17.440 --> 0:30:21.880 I was mis Rasieo Arthur Mench along with Francin Laqua. Meanwhile, 0:30:21.880 --> 0:30:24.440 another closely watched interview at Davos was the Open AI 0:30:24.600 --> 0:30:28.160 CFO Sarah Fry. She's spent with Bluemoks showing Fari about 0:30:28.360 --> 0:30:31.040 rising enterprise use of chatchipt and the company's growth. 0:30:31.040 --> 0:30:31.480 Take listen. 0:30:32.520 --> 0:30:35.200 We have had to do an extraordinary amount of fundraising. 0:30:35.800 --> 0:30:38.840 Luckily we also have a business model that supports it. 0:30:39.160 --> 0:30:42.400 I already talked about chat ChiPT for consumer over three 0:30:42.480 --> 0:30:46.800 hundred million users today and it's a workhourse when it 0:30:46.840 --> 0:30:50.800 comes to revenue, revenue growth and ultimately profitability. But we 0:30:50.880 --> 0:30:56.600 are seeing now enterprises of every size embraces technology, and 0:30:56.640 --> 0:31:00.400 we really see ourselves also as the enterprise company. There's 0:31:00.400 --> 0:31:04.680 a really good symbiosis between those two areas because often 0:31:05.040 --> 0:31:06.840 when I meet customers, and I'm meeting a lot of 0:31:06.920 --> 0:31:09.840 them here in Davas, it's actually their personal experience they 0:31:09.880 --> 0:31:11.680 start with. When I say, hey, how are you using 0:31:11.720 --> 0:31:15.520 chat GPT, They'll actually give me a personal anecdote first. 0:31:15.880 --> 0:31:18.480 And for those of you who sell into enterprises, you 0:31:18.560 --> 0:31:21.200 know that if you've won your customer heart in just 0:31:21.240 --> 0:31:23.360 their day to day, being able to go in and 0:31:23.360 --> 0:31:26.680 then sell them into their enterprise environment gets an awful 0:31:26.720 --> 0:31:30.080 lot easier. And so that enterprise model is really building 0:31:30.200 --> 0:31:33.320 across every sector of the economy, every type of company, 0:31:33.320 --> 0:31:35.920 every scale of company, And I'd be happy to talk 0:31:35.960 --> 0:31:39.920 through examples. Morgan Stanley is a great example, since we're 0:31:39.920 --> 0:31:42.360 talking financing, and they're also a good partner in that front, 0:31:42.680 --> 0:31:45.360 but they're using our technology and areas like wealth management, 0:31:46.120 --> 0:31:48.320 in areas like even their investment banking, and they've been 0:31:48.320 --> 0:31:51.920 doing it now for multiple years. So in terms of 0:31:51.960 --> 0:31:55.080 the future from a financing perspective, I suspect we will 0:31:55.160 --> 0:31:58.000 continue to have to finance at pace, but we will 0:31:58.000 --> 0:32:00.720 do that on the merits of our business as well. 0:32:02.080 --> 0:32:05.200 How about an IPO, what would that look like for 0:32:05.240 --> 0:32:05.720 open ai? 0:32:06.960 --> 0:32:09.440 You mentioned profitability? You know, how far do you think 0:32:09.480 --> 0:32:11.080 we are from that? What are you know? You're someone 0:32:11.080 --> 0:32:14.240 who's taken two companies public. What would the steps be 0:32:14.320 --> 0:32:16.080 for open ai to get there? And how far are 0:32:16.120 --> 0:32:17.120 we from profitability? 0:32:17.480 --> 0:32:17.800 Yeah? 0:32:17.840 --> 0:32:20.880 So, as I've told every company I've been associated with 0:32:21.080 --> 0:32:25.280 on an IPO, it's it's not a destination. An IPO 0:32:25.520 --> 0:32:27.680 is just a marker on a journey, and if you 0:32:27.720 --> 0:32:30.880 get wrapped around the idea that the IPO is a destination, 0:32:31.400 --> 0:32:33.360 is a very kind of dangerous world to live in 0:32:33.360 --> 0:32:37.560 because there's a feeling of finality and maniland, going public 0:32:37.680 --> 0:32:41.960 is just the beginning of another very interesting part of 0:32:42.000 --> 0:32:43.880 your journey, like what are the positives? 0:32:43.880 --> 0:32:45.040 And IPO number one. 0:32:45.080 --> 0:32:48.200 I think it's a very strong credentializing moment for any company. 0:32:48.560 --> 0:32:50.920 I love that moment of sunlight, of being able to 0:32:50.960 --> 0:32:54.560 show your financials externally, to show how your business is building. 0:32:55.360 --> 0:32:59.320 It's the best disinfectant in any room. It's a great 0:32:59.320 --> 0:33:02.680 way to fundraise because it opens the door not just 0:33:02.880 --> 0:33:06.440 to equity and selling your equity in that moment, but 0:33:06.560 --> 0:33:09.440 it also starts opening the door to many more areas 0:33:09.520 --> 0:33:13.440 of financing, starting with mezzanine debt, structured debt, and so 0:33:13.520 --> 0:33:15.440 on and again. In a world where we're buying a 0:33:15.480 --> 0:33:18.080 lot of compute, we need to get there fast because 0:33:18.360 --> 0:33:21.320 equity is an expensive way to raise capital and to 0:33:21.400 --> 0:33:23.960 deploy capital. We need to make sure we continue to 0:33:23.960 --> 0:33:26.600 bring down that weighted average cost of capital. 0:33:28.360 --> 0:33:37.520 That was open AICFO Sarah Freyer from Davos. 0:33:39.520 --> 0:33:40.960 So one of the things that we shared, as you 0:33:41.000 --> 0:33:42.960 said at the beginning, is that we are moving away 0:33:43.000 --> 0:33:46.240 from the way that we were utilizing third party independent 0:33:46.320 --> 0:33:48.760 fact checkers and moving now to much more of a 0:33:48.800 --> 0:33:52.680 community notes program. We're starting that in the US and 0:33:52.720 --> 0:33:54.760 then we'll see how that goes as we move it 0:33:54.760 --> 0:33:56.680 out over the years. So nothing changing in the rest 0:33:56.680 --> 0:33:58.720 of the world at the moment. We're still working with 0:33:58.760 --> 0:34:01.080 those fact checkers around the world, but in the US 0:34:01.200 --> 0:34:02.400 that's that's the direction of. 0:34:02.360 --> 0:34:05.320 Travel to start with Meta's head of Global Business Group, 0:34:05.440 --> 0:34:08.120 Nikola Mendelson in Davos, and as is, the company is 0:34:08.120 --> 0:34:10.719 gearing up to remove third party fact checking here in 0:34:10.760 --> 0:34:11.440 the United States. 0:34:11.440 --> 0:34:14.040 But Blue Mugs Kat Wagner is joining us now to talk. 0:34:13.920 --> 0:34:16.320 About the timing of all of this, because just last 0:34:16.320 --> 0:34:19.520 week a lawyer representing Meta quit accusing the CEO, Mark 0:34:19.600 --> 0:34:22.719 Zuckerberg of what he called a descent into toxic masculinity 0:34:23.040 --> 0:34:26.680 and neo Nazi madness. Then there's a controversy swirling around 0:34:26.840 --> 0:34:29.759 gestures made by Elon Musk this inauguration. We can this 0:34:29.920 --> 0:34:33.120 feels as though conspiracy theories are kind of running wild 0:34:33.160 --> 0:34:34.840 at the same time as fact checking is taking a 0:34:34.880 --> 0:34:35.439 stand back. 0:34:36.960 --> 0:34:39.480 Yeah, and that's just unfortunately the reality of what's going 0:34:39.520 --> 0:34:41.480 to happen. When you take away fact checking, you sort 0:34:41.480 --> 0:34:45.040 of open the door for you know, inaccurate information to 0:34:45.080 --> 0:34:48.600 spread pretty wildly on the platform, right, And so I 0:34:48.600 --> 0:34:50.719 don't think that's going to be a coincidence. I don't 0:34:50.719 --> 0:34:54.399 think this is the end of that reality for us, right, 0:34:54.480 --> 0:34:56.520 I don't. I think community notes is sort of an 0:34:56.520 --> 0:35:00.319 interesting concept. I don't think it is a fool proof 0:35:00.360 --> 0:35:02.799 concept when it comes to fact checking at scale, and 0:35:02.880 --> 0:35:04.719 so I'm sure the metal will learn that, you know, 0:35:05.160 --> 0:35:08.520 if not already then certainly over time. I think the 0:35:08.600 --> 0:35:12.040 interesting thing about this fact checking timing for them is 0:35:12.080 --> 0:35:15.600 that you know, clearly they usually test things outside of 0:35:15.640 --> 0:35:17.440 the US and then bring them to the US when 0:35:17.440 --> 0:35:19.440 they are ready for prime time, because this is the 0:35:19.440 --> 0:35:22.279 most valuable market. It's interesting that in this case they're 0:35:22.280 --> 0:35:24.200 doing the test here in the US and leaving it 0:35:24.200 --> 0:35:25.600 in the rest of the world. To me, that's a 0:35:25.640 --> 0:35:28.400 signal that this is more of a political decision for 0:35:28.440 --> 0:35:31.200 them right to appease the Trump administration than it is 0:35:31.280 --> 0:35:34.000 a reality that the fact checking was a major problem 0:35:34.040 --> 0:35:36.040 to begin with I see this more as you know, 0:35:36.120 --> 0:35:40.000 something that they're doing to appease the Trump administration more 0:35:40.040 --> 0:35:43.200 so than this was a huge ding or knock on 0:35:43.280 --> 0:35:46.920 the you know, the platform's ability to thrive. 0:35:48.480 --> 0:35:52.480 Bloomberg's Kurt Wagner, thank you. Sticking with Meta. Remember this 0:35:52.600 --> 0:35:55.720 moment from a Facebook town hall back in twenty eleven. 0:35:57.200 --> 0:36:00.520 My name is Barack Obama, and I'm the guy who got. 0:36:00.239 --> 0:36:02.640 Mark to wear a jacket and time. 0:36:06.920 --> 0:36:10.640 That was former President Barack Obama joking with Meta CEO 0:36:10.760 --> 0:36:14.600 Mark Zuckerberg. Things certainly have changed for the Facebook founder 0:36:14.719 --> 0:36:18.080 and other tech leaders, as we saw during yesterday's inauguration. 0:36:18.520 --> 0:36:21.480 For more in the industry's relationship with politicians, we are 0:36:21.560 --> 0:36:25.200 joined now by Margaret O'Mara, Professor of American History at 0:36:25.239 --> 0:36:28.520 the University of Washington. Margaret, I have to ask you, 0:36:28.600 --> 0:36:31.360 how are we going to look back at this moment 0:36:31.480 --> 0:36:35.600 yesterday where we saw such a lineup of tech leaders 0:36:35.600 --> 0:36:40.640 and billionaires at the inauguration, seated so prominently, what. 0:36:40.760 --> 0:36:41.839 Was really extraordinary? 0:36:42.080 --> 0:36:44.600 I mean, it remains to be seen how the relationship 0:36:44.600 --> 0:36:48.560 between tech and the Trump administration will evolve over time, 0:36:49.080 --> 0:36:52.720 but we have never in American history seen a lineup 0:36:52.880 --> 0:36:57.920 of business tycoons occupying a place of honor at a 0:36:57.960 --> 0:37:01.560 presidential inauguration like we did yesterday. 0:37:01.800 --> 0:37:04.600 Silicon Valley has long had ties. 0:37:04.200 --> 0:37:08.040 With Washington and different presidential administrations, but this does feel 0:37:08.080 --> 0:37:09.320 like uncharted territory. 0:37:10.840 --> 0:37:13.759 And how does this translate into the priority list that 0:37:13.840 --> 0:37:17.439 each of these CEOs may be bringing to the administration. 0:37:17.640 --> 0:37:19.600 How much does that proximity count. 0:37:21.480 --> 0:37:22.319 It counts a lot. 0:37:23.000 --> 0:37:26.400 And look, we've again we've seen Silicon Valley leaders have 0:37:26.600 --> 0:37:30.520 very close relationships with the Obama administration, the Clinton administration, 0:37:30.760 --> 0:37:33.560 with other administrations other than Trump. 0:37:33.920 --> 0:37:40.480 So this again is not entirely unknown, but there are really. 0:37:40.400 --> 0:37:45.400 High stakes, and we see both on the regulatory side 0:37:45.480 --> 0:37:47.120 and in the spending and. 0:37:47.239 --> 0:37:48.200 Tax policy side. 0:37:48.280 --> 0:37:50.640 On the regulatory side, the promise to have a light 0:37:50.719 --> 0:37:55.240 hand on AI regulation, as well as Trump's boosting of crypto, 0:37:55.560 --> 0:38:00.640 underscored by his and the First Lady's personal involvement issuance 0:38:00.680 --> 0:38:02.120 of their own coins in. 0:38:02.080 --> 0:38:05.400 The last couple of days, is something. 0:38:05.040 --> 0:38:08.160 That is a real sea change for the industry, of 0:38:08.239 --> 0:38:12.360 real difference in attitude than what the Biden administration had approached. 0:38:12.400 --> 0:38:13.719 And then also we. 0:38:13.760 --> 0:38:17.600 Have the promise of tax policy being corporate friendly generally, 0:38:17.680 --> 0:38:22.240 and also things like defense contracting, which is the Defense 0:38:22.280 --> 0:38:24.799 Department and the National Security Establishment does a lot of 0:38:24.840 --> 0:38:28.720 business with Silicon Valley companies, and that only seems poised. 0:38:28.360 --> 0:38:32.480 To increase Margaret, take us back from a historical perspective, 0:38:32.960 --> 0:38:36.239 have there been as many ethical questions when we've seen 0:38:36.360 --> 0:38:40.800 such relationships, perhaps not so flamboyantly demonstrated, but certainly close 0:38:40.840 --> 0:38:45.040 and previous administrations there haven't. 0:38:45.040 --> 0:38:47.080 Well, there have been questions, but they have been resolved. 0:38:47.120 --> 0:38:49.480 And let me point to a really interesting example from 0:38:49.560 --> 0:38:54.120 Silicon Valley's past. David Packard, the founder of Hewlett Packard 0:38:54.120 --> 0:38:58.000 now HP, kind of a legendary Silicon Valley founder. He 0:38:58.080 --> 0:39:01.960 actually joined the Nixon administry as Deputy Secretary of Defense 0:39:02.200 --> 0:39:05.480 in nineteen sixty nine, and he was a very wealthy man, 0:39:06.160 --> 0:39:09.080 and he famously put his wealth in a blind trust 0:39:09.200 --> 0:39:12.800 while he was in office to resolve any ethical questions 0:39:12.840 --> 0:39:16.960 there might be about HP profiting from defense contracts. 0:39:16.520 --> 0:39:19.680 Which it did have while he was at the Defense Department. 0:39:20.560 --> 0:39:21.279 Let's just I. 0:39:21.200 --> 0:39:23.960 Mean, thinking of what you've written, in particular, the code 0:39:24.000 --> 0:39:27.840 Silicon Valley and the remaking of America is Silicon Valley 0:39:28.320 --> 0:39:32.839 aren't the tech leaders that we see remaking America from 0:39:32.840 --> 0:39:35.560 a political perspective right now, Margaret, I say that with 0:39:35.800 --> 0:39:38.520 the words of the previous administration still bringing on O 0:39:38.760 --> 0:39:40.279 is that this is some sort of oligarchy. 0:39:41.800 --> 0:39:44.839 Yeah, I think that they are trying to. 0:39:44.920 --> 0:39:47.399 I mean, what certainly is the case and hasn't been 0:39:47.400 --> 0:39:50.200 the case in the past, is that the platforms that 0:39:50.239 --> 0:39:53.439 they control just thinks solely about the people who were 0:39:53.440 --> 0:39:58.680 on the inaugural dais yesterday in the Capitol rotunda, Mark Zuckerberg, Sunderbushai, 0:39:59.360 --> 0:40:03.759 Jeff bezo Elon Musk, that they have such an outsized 0:40:03.840 --> 0:40:09.960 influence over online communication, on online commerce, that there already 0:40:09.960 --> 0:40:12.680 is such an immense consolidation of power that again there 0:40:12.680 --> 0:40:15.840 have been you know, big power structures and successful companies 0:40:15.920 --> 0:40:17.600 in the valley before, but this. 0:40:17.520 --> 0:40:21.719 Is the next level. You know, the influence is tremendous. 0:40:22.920 --> 0:40:26.600 Margaret, last question thirty seconds. These companies have a position 0:40:26.719 --> 0:40:29.759 to shape history as we will be reading it later. 0:40:29.920 --> 0:40:32.960 Talk about that unique role they. 0:40:32.840 --> 0:40:36.160 Do, just as the history textbooks now have Andrew Carnegie 0:40:36.200 --> 0:40:38.360 and John Rockefeller and them, and people around the world 0:40:38.400 --> 0:40:40.960 know those names, you know, regardless of what happens next 0:40:41.080 --> 0:40:43.960 we a century from now, probably people are going to 0:40:44.000 --> 0:40:46.280 be reading about Mark Zuckerberg and Jeff Bezos and Elon 0:40:46.360 --> 0:40:50.200 Musk And I think with great power comes from great responsibility. 0:40:50.280 --> 0:40:52.680 This is part of the criticism that has been levied 0:40:52.719 --> 0:40:56.080 at tech over the last decade about what the you know, 0:40:56.080 --> 0:40:57.759 the ripple effects of their platforms might be. 0:40:57.920 --> 0:41:00.040 Now, again, these are businesses, these. 0:40:59.880 --> 0:41:02.680 Are people in the you know, these are for profit companies, 0:41:02.719 --> 0:41:05.360 and I think there also is a very important public 0:41:05.440 --> 0:41:08.320 sector government regulatory role that has been absent. 0:41:08.440 --> 0:41:10.080 So that's one of the reasons that they have become 0:41:10.160 --> 0:41:10.680 this large. 0:41:10.719 --> 0:41:12.600 So I think it needs to be a balance and 0:41:12.640 --> 0:41:16.240 we need to think more broadly about how this shakes out. 0:41:16.640 --> 0:41:19.880 Margaret Omara, Professor of American History at the University of Washington. 0:41:20.160 --> 0:41:23.880 So appreciate your time coming up streaming jant Netflix and 0:41:23.920 --> 0:41:26.360 set to report it results after the closing bell, and 0:41:26.440 --> 0:41:28.960 look at what we can expect next, there's a bluemog 0:41:29.000 --> 0:41:41.879 technology Netflix. Oh, it's set to report earnings after the bell. 0:41:42.160 --> 0:41:45.439 What can we expect? Let's bring in Lucas Shaw and 0:41:45.680 --> 0:41:48.120 the shares had a phenomenal twenty twenty four. How was 0:41:48.200 --> 0:41:50.920 Q four from a profit and revenue perspective. 0:41:51.520 --> 0:41:53.439 Well, we'll find out at the end of the day, 0:41:53.480 --> 0:41:55.279 but people are expecting. 0:41:55.000 --> 0:41:56.080 A very strong quarter. 0:41:56.280 --> 0:41:58.680 You know, they had the Mike Tyson Jake Paul fight 0:41:58.719 --> 0:42:00.879 in the quarter, which was the big live event they've 0:42:00.880 --> 0:42:03.160 ever done, one of the most watched things they've ever 0:42:03.200 --> 0:42:05.719 put out, and I believe due to according to some 0:42:05.760 --> 0:42:08.440 third party researchers, led to the biggest one day of 0:42:08.719 --> 0:42:09.120 spike and. 0:42:09.160 --> 0:42:10.600 New customers they've had in years. 0:42:10.920 --> 0:42:13.560 You know, they also had NFL on Christmas Day, they 0:42:13.560 --> 0:42:15.760 had season two of Squid Game, they had new seasons 0:42:15.800 --> 0:42:17.919 for a bunch of other hit shows. So most people 0:42:17.960 --> 0:42:20.080 are expecting it to be a very strong quarter, which 0:42:20.120 --> 0:42:22.680 will be, unfortunately for us, the last one in which 0:42:22.719 --> 0:42:24.200 they report their subscriber numbers. 0:42:24.640 --> 0:42:26.600 Yeah, we suddenly have to read Teelee's in a whole 0:42:26.640 --> 0:42:30.680 new way. We are expecting strength coming from the live 0:42:30.760 --> 0:42:33.560 side of the equation, and I mean the market capitalization 0:42:33.640 --> 0:42:34.440 reflects that. 0:42:34.880 --> 0:42:36.600 How much more strings. 0:42:36.160 --> 0:42:39.120 Do they have to pull to outperform going into what 0:42:39.440 --> 0:42:41.440 analysts are pretty buoyant on the company. 0:42:42.080 --> 0:42:44.600 Yeah, I mean it's pretty crazy to think that Netflix 0:42:44.680 --> 0:42:47.439 is now worth almost four hundred million dollars it's more 0:42:47.480 --> 0:42:51.920 than Disney and several other big media companies combined, and 0:42:52.120 --> 0:42:54.759 you have to figure that there should be some kind 0:42:54.840 --> 0:42:57.400 of ceiling on this. But look, the Netflix position is 0:42:57.400 --> 0:43:00.160 going to be you know, these live events were going 0:43:00.160 --> 0:43:02.239 big into that area and it's going to boost our 0:43:02.280 --> 0:43:04.560 advertising business, which is one of the reasons that they 0:43:04.560 --> 0:43:07.279 want to stop reporting subscriber numbers because they believe that 0:43:07.280 --> 0:43:09.759 their revenue growth and their profits are going to look 0:43:09.800 --> 0:43:12.919 really good going forward. It just won't be as many 0:43:13.000 --> 0:43:14.759 new subscribers quarter after quarter. 0:43:15.360 --> 0:43:20.080 And how technically robust has the live offering been. 0:43:21.280 --> 0:43:24.600 Well, Look, they had well documented problems during the Tyson 0:43:24.640 --> 0:43:28.440 Paul fag that was largely due to too much demand, 0:43:28.560 --> 0:43:31.240 which is a good thing if you're trying to attract 0:43:31.280 --> 0:43:34.240 an audience. They didn't have a lot of problems during 0:43:34.280 --> 0:43:37.080 the NFL match. I think, you know, these live events 0:43:37.080 --> 0:43:39.919 on streaming tend to have the same life cycle where 0:43:39.960 --> 0:43:42.840 there are issues early on where the company is newer 0:43:42.880 --> 0:43:45.920 to it and they have some issues usually when they 0:43:45.920 --> 0:43:47.960 put on something that people really want to watch, and 0:43:48.000 --> 0:43:49.439 then they figure it out over time. 0:43:49.520 --> 0:43:51.280 Right, you know, we stream all sorts. 0:43:51.080 --> 0:43:54.120 Of things live these days, so I think long term, 0:43:54.160 --> 0:43:55.680 it's going to be fine for them. The question is 0:43:55.800 --> 0:43:58.040 what are the events that they are going to collect 0:43:58.200 --> 0:44:01.239 that deliver or attract a big enough audience if they're 0:44:01.280 --> 0:44:03.600 not a major buyer of sports rights because they're trying 0:44:03.640 --> 0:44:05.920 to create their own events. But look, they just had 0:44:05.960 --> 0:44:08.719 the WWE debut. Everyone at Netflix is really happy with 0:44:08.760 --> 0:44:11.759 it so far. We'll see in three, six, nine months 0:44:11.760 --> 0:44:12.760 if that remains the case. 0:44:12.920 --> 0:44:15.640 Don't even get our producers started on her love for 0:44:15.719 --> 0:44:17.960 all blimogs, Lucas Shaw brilliant. 0:44:17.640 --> 0:44:18.319 Thank you very much. 0:44:18.320 --> 0:44:21.320 Indeed, meanwhile, look and unlikely win it in the TikTok 0:44:21.360 --> 0:44:24.000 band saga of late has been JEWELINGO. Here's what the 0:44:24.000 --> 0:44:26.120 CEO had to say earlier on belie their open interest. 0:44:26.640 --> 0:44:28.920 We do have a good number of people learning Manderin. 0:44:29.200 --> 0:44:31.800 It's not our most popular language, but but it's definitely 0:44:31.840 --> 0:44:34.000 a popular language. Is among the top eight languages that 0:44:34.120 --> 0:44:38.040 people are learning, and we did see a huge spikes, 0:44:38.080 --> 0:44:42.120 and it's mainly because people who are When they thought 0:44:42.160 --> 0:44:44.200 that TikTok was going to be banned, they started trying 0:44:45.040 --> 0:44:46.880 some Chinese apps like red Note, and as soon as 0:44:46.880 --> 0:44:49.440 they showed up, most of the things were in Chinese, 0:44:49.719 --> 0:44:52.520 so they came and wanted to learn Chinese undoolingo because 0:44:52.560 --> 0:44:54.640 of that jewelingo CEO. 0:44:54.680 --> 0:44:56.480 There are a reminder that many of the apps that 0:44:56.560 --> 0:44:59.680 TikTok uses flocked to during the quick US ban and 0:44:59.719 --> 0:45:04.320 turn around Mandarin based, so Luis van Hahn optimistic that 0:45:04.440 --> 0:45:08.160 actually the users will stick around even though TikTok back online. 0:45:08.400 --> 0:45:10.200 We start with TikTok, we end with TikTok. That does 0:45:10.280 --> 0:45:12.440 it for this edition of Bloomberg Technology. Don't forget to 0:45:12.520 --> 0:45:14.480 check out our podcast. You can find it on the 0:45:14.520 --> 0:45:17.280 terminal as well as online on Apple, Spotify, an iHeart. 0:45:17.520 --> 0:45:18.680 This is Bloomberg Technology.