Speaker 1: From Mahart where Innovation, Money and power colle in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York and San Francisco. This is Bloomberg
Speaker 2: Technology coming up. In Vidia on track for a record
Speaker 2: close shares or bounced back after successfully calming concerns about
Speaker 2: the product delays and its long term growth plans.
Speaker 3: Adobe's Embrace of AI will talk to the company's CEO
Speaker 3: about its new AI video generated tools as it kicks
Speaker 3: off the annual Adobe Max conference.
Speaker 2: And a successful catch. SpaceX celebrates a major milestone over
Speaker 2: the weekend that Starship Rockets successfully catching its booster midair.
Speaker 2: We discussed but first let's check in on these markets
Speaker 2: because we are ramping high. Then now's that one hundred
Speaker 2: is a seat up five tenths of a percent, and
Speaker 2: we were higher up about a percentage point in earlier trade.
Speaker 2: But we see Mood Music once again wanting to plow
Speaker 2: money into some of the major Magnificent seven names, and
Speaker 2: across the board, we're really seeing a risk on feel
Speaker 2: is it whether China stimulus is going to come into play.
Speaker 2: That's what's being eyed by Bitcoin just a quick look
Speaker 2: at what's happening in the world or crypto at the moment,
Speaker 2: we're up now five percent percent now NASDAC and Bitcoin
Speaker 2: at the highest level since July.
Speaker 4: And what are you.
Speaker 3: Watching, Well, I'm going to go straight to Nvidia and
Speaker 3: if you're just waking up, you're just joining us for
Speaker 3: the first time on Bloomberg Television this morning. It is
Speaker 3: a name we're going to watch all day because, as
Speaker 3: you said, Cara, on a closing basis, if we trade
Speaker 3: at that level one hundred and thirty eight, just below
Speaker 3: one hundred and thirty nine dollars a share, and we
Speaker 3: close there, we will clipse that June record or record
Speaker 3: high that we close that in June. Actually, we're probably
Speaker 3: about a dollar away on an intra day basis from
Speaker 3: a record as well, which I know the team in
Speaker 3: Bloomberg Equities are going to be watching very closely. Is
Speaker 3: kind of like in Video's back, and that's going to
Speaker 3: be our folk as much as it has been for
Speaker 3: the last two years, which I'm very excited about.
Speaker 5: As au It's back. Why is it back?
Speaker 2: Why is it up eleven percent over the course of
Speaker 2: the month. Bruly, Meg's around Blastelica is with us, just
Speaker 2: talk us through the determed risk and feel around in video.
Speaker 2: What have they managed to tell the market?
Speaker 4: Hey, good morning, thanks for having me so.
Speaker 6: I'd say that there was recent weakness in and Video
Speaker 6: shares that was largely concerned about the company's Blackwold chips.
Speaker 6: There were some engineering snags, a little bit of the
Speaker 6: delay there. People didn't quite know how to suss out
Speaker 6: the impact that this would have on future growth. However,
Speaker 6: the CEO came out, he talked about how strong demand
Speaker 6: has been. There's been some positive analyst commentary looking at
Speaker 6: the orders for the Blackwold chip, all this has been
Speaker 6: very strong. I think that's helped to ease a lot
Speaker 6: of concerns that people had about the status of this chip,
Speaker 6: the future product roadmap, and just in general the company's
Speaker 6: flowity to continue executing, keep delivering these chips, which are
Speaker 6: at course at the forefront of the whole AI trade.
Speaker 3: Do you know what's interesting about in video, Ryan, is
Speaker 3: that it's kind of constant communication. Jensen Wong does a
Speaker 3: lot of interviews, but he also appears on stage all
Speaker 3: of the time. He is at investor conferences all of
Speaker 3: the time. You cover such a broad range of technology companies.
Speaker 3: Have you ever known a company in vogue or not
Speaker 3: to communicate that much?
Speaker 4: That's a great question.
Speaker 6: Certainly, he is out there a lot, and he is
Speaker 6: obviously an investor favorite, so every time he speaks, everybody listens.
Speaker 6: And of course everything he has been saying lately has
Speaker 6: been pretty positive. It's hard to find too many, you know,
Speaker 6: presidents for this kind of thing. You'd probably have to
Speaker 6: go back to someone like Steve Jobs.
Speaker 2: I guess maybe we'll have to go back to of course,
Speaker 2: companies that are that much in the spotlight, Apple.
Speaker 4: One of them.
Speaker 2: And with Steve Jobs and now in Video, what is
Speaker 2: there still perhaps remaining in terms of concerns. It looks
Speaker 2: as though people feel they've got a runway for the
Speaker 2: next twelve months in terms of orders.
Speaker 6: Yeah, absolutely, I would say that, you know, they're considered
Speaker 6: pretty far ahead of the curve as far as competition goes.
Speaker 6: There's not too many concerns about that. There's a lot
Speaker 6: of optimism about the new chip, and we've I've seen
Speaker 6: a lot of Video's major customers like Microsoft, Meta Alphabet
Speaker 6: and so board. They're all sticking with their capbex plan
Speaker 6: So there's not really a concern that people are going
Speaker 6: to pull back on their spending and that they're going
Speaker 6: to see a drop up in the maand related to that.
Speaker 6: So I would say that outside of maybe valuation, that's
Speaker 6: probably the biggest concern you'll hear. But people are pretty
Speaker 6: positive aboutting video's fundamentals from here yep.
Speaker 3: As a reminder on an inter day basis, but a
Speaker 3: lot more likely on a closing basis. In VideA a
Speaker 3: fresh record Blimbo's Ryan Vasteliga, thank you very much. Another
Speaker 3: top story, TSMC is expanding its global footprint and planning
Speaker 3: more plants in Europe with a focus on the market
Speaker 3: for AI chips. That's according to Taiwan's National Science and
Speaker 3: Technology Council Minister wucheng Wen, who did not specify a
Speaker 3: timeline for the expansion in Europe. This is TSMC just
Speaker 3: broke round in August on a chip fabrication plant in
Speaker 3: Germany's Dresden.
Speaker 4: Listen to this.
Speaker 7: They had started the construction of the first fab. Interesting.
Speaker 7: They are already planning the next feel app in the
Speaker 7: future for different market sectors as well, but of course
Speaker 7: the most important would be the AIM market.
Speaker 2: That's going to invest to take Michael Green is portfolio
Speaker 2: manager at Simplify Asset Management. Manages a suite of ETFs
Speaker 2: about six billion dollars in assets onder management. You've got
Speaker 2: a rich history in terms of thinking through the macro Michael,
Speaker 2: what then, of the exuberance still around chip names, is
Speaker 2: it right to have that reality?
Speaker 8: Well, I think this is a natural challenge, right. This
Speaker 8: is what's called a positive bubble. It effectively is driving
Speaker 8: innovation and investment into a space that absolutely requires it,
Speaker 8: but there's almost no real opportunity for the company's currently
Speaker 8: involved to earn the returns that are actually built into
Speaker 8: these expectations. We may see that not happen in this
Speaker 8: month or in this quarter, but as we look forward,
Speaker 8: there's going to inevitably be a period of disappointment. This is,
Speaker 8: in a lot of ways very similar to the buildout
Speaker 8: around the dot com cycle, in which the Internet ultimately
Speaker 8: exceeded all of our expectations, radically changing how we shop
Speaker 8: and live our lives. But at the same time we
Speaker 8: saw extraordinary disappointment as many of the companies involved were
Speaker 8: unable to realize their potential.
Speaker 3: Michael, that piece of news about TSMC in Europe shows
Speaker 3: there is data center and chip capacity activity here in
Speaker 3: the States, and there's the same in Europe. Is there
Speaker 3: pros and cons to kind of focusing your attentions as
Speaker 3: an investor on just one.
Speaker 8: I'm not really sure that I would emphasize one versus
Speaker 8: the other, because again, this is all data that can
Speaker 8: be transmitted. A lot of the investment in Europe is
Speaker 8: going to be a byproduct of separate and different privacy
Speaker 8: rules and will probably continue to see investment around that.
Speaker 9: The United States stands head and.
Speaker 8: Shoulders above the rest of the world in terms of
Speaker 8: data center capacity. I forget the exact number, but I
Speaker 8: want to say it's roughly ten x its next largest competitor.
Speaker 8: And at the same time, we're seeing extraordinary gains in
Speaker 8: the efficiency of these data centers, which is actually going
Speaker 8: to of course, that the capacity ends up being much
Speaker 8: greater than we thought. The same underlying phenomenon we saw
Speaker 8: again with fiber optic build out in the late nineteen nineties,
Speaker 8: where we expected to have to use tons of dark fiber,
Speaker 8: we ultimately laid that in the ground, and we've used
Speaker 8: only a small fraction of it as other forms of
Speaker 8: technology improved alongside it. In this case, we're starting to
Speaker 8: see those efficiency gains from rewriting algorithms to optimize them
Speaker 8: for AI or data center applications.
Speaker 9: So ultimately, I think in both places.
Speaker 8: We're going to find that we have at least a
Speaker 8: period of access capacity that emerges, and I think investors
Speaker 8: in both locations should be considered of that.
Speaker 9: Europe probably offers.
Speaker 8: A better construction environment, as I said, because they have
Speaker 8: different rules, they're going to need to make their own investments.
Speaker 2: So everyone going all in on basically the infrastructure build out.
Speaker 2: But where else in the stack, where else in the
Speaker 2: value add of AI should you be boarding out to?
Speaker 8: Well, I think we're starting to get to the point
Speaker 8: that you want to start thinking about the implications of this. Right, So,
Speaker 8: financial institutions could benefit tremendously from an improved and the
Speaker 8: ability to run analysis or process components. We're starting to
Speaker 8: see shopping algorithms. Certainly, we're seeing things like support bots
Speaker 8: in terms of the traditional call center type work. The
Speaker 8: efficiency gains there are immens. Again, I think one of
Speaker 8: the real challenges that we're going to face is that disruption.
Speaker 9: We're really uncertain of it.
Speaker 8: Right, People remember the comparisons of Amazon to Barnes and Noble,
Speaker 8: and now they no longer remember Barnes and Noble except
Speaker 8: as a college textbook destination. My hunches is we're going
Speaker 8: to see a lot of the same things. The world
Speaker 8: is changing very rapidly. It's a period of uncertainty. You
Speaker 8: have to price that into effectively the optionality of these
Speaker 8: names once you start to realize that it may turn
Speaker 8: out that they are the vast majority are unable to
Speaker 8: deliver on the opportunity that was in front of them.
Speaker 8: Against that, I think that we're seeing lots of interesting
Speaker 8: opportunities that are being created in more mundane areas like
Speaker 8: fixed income, where we're beginning to recognize that the level
Speaker 8: of interest rates is unlikely to.
Speaker 3: Be what Wen, I'm sorry to interrupt you, then, Michael,
Speaker 3: I just want to say, when we consider the US
Speaker 3: economy on Bloomberg Technology in particular, it's often through the
Speaker 3: lens of infrastructure, and that's kind of end of the economy.
Speaker 3: But interestingly, specifically when it comes to the labor market,
Speaker 3: you've been thinking about the gig economy, and we're going
Speaker 3: to go very deep on that later in the program.
Speaker 3: So I just wondered if you'd outline your thesis for us.
Speaker 8: Yeah, So one of the things that we're really dealing
Speaker 8: with is again this sort of radical change. Two thousand
Speaker 8: and nine with uber was the advent of the app
Speaker 8: based gig economy that initially targeted professional drivers. In twenty twelve,
Speaker 8: that shifted with the introduction of Lyft and uber x
Speaker 8: to effectively allow anyone to use their car to make
Speaker 8: additional money, either as a side job or as a
Speaker 8: substitute for unemployment.
Speaker 9: The interesting thing that's happened is we haven't.
Speaker 8: Really had a normal cycle or period of unemployment, and
Speaker 8: one of the things that we're finding is that the
Speaker 8: gig economy is effectively better destination for people than filing
Speaker 8: for unemployment claims.
Speaker 9: That would imply that the economy is actually the labor
Speaker 9: markets quite a bit weaker than we're.
Speaker 8: Getting in the headline data, and we're seeing this in
Speaker 8: sentiment surveys of consumers.
Speaker 9: And households, but it's not showing up in the official data.
Speaker 8: One of the examples I give is California, for example,
Speaker 8: where if you file for unemployment, your maximum benefit is
Speaker 8: four hundred and fifty dollars a week for a maximum
Speaker 8: of twenty six weeks.
Speaker 9: That puts you at half of.
Speaker 8: The poverty level for a two person household. In contrast,
Speaker 8: if you already have a car and you're going to
Speaker 8: face that depreciation associated with it, driving for Uber allows
Speaker 8: you to replace a much larger fraction of your income
Speaker 8: by utilizing an asset that you are no longer using.
Speaker 9: In commute to work, et cetera.
Speaker 8: That I think is really a key story that we're
Speaker 8: going to have to figure out the reason why it
Speaker 8: becomes an issue, And I want to emphasize I think
Speaker 8: it's better that people are finding alternatives in the private sector,
Speaker 8: but those private sector alternatives have their.
Speaker 9: Own feedback loop.
Speaker 8: Whereas more people find themselves driving for Uber, simultaneously, the
Speaker 8: demand for these ride sharing services and gig economy and
Speaker 8: applications begins to decline and the competition for the revenues
Speaker 8: associated with them increases. Again, we're starting to see the
Speaker 8: signs of that that people who are driving for Uber
Speaker 8: are suddenly discovering that their incomes are beginning to fall significantly.
Speaker 9: So this is going to be a real challenge for
Speaker 9: our time.
Speaker 8: Do we actually understand the data as that's coming in,
Speaker 8: particularly with central bankers choosing to try to be as
Speaker 8: data dependent as they possibly can. That data could change
Speaker 8: very rapidly if we have a misunderstanding of the system.
Speaker 3: Michael Green, portfolio manager at Simplify Asset Management, thank you
Speaker 3: very much. And in line with what Michael was saying
Speaker 3: coming out, we're going to go in detail into a
Speaker 3: Bloomberg investigation which looks into how Uber and Lyft use
Speaker 3: the loophole to deny drivers in New York City millions
Speaker 3: of dollars in pay also taking a real quick look
Speaker 3: at shares. I think of NAP, which got a downgrade
Speaker 3: in the market earlier this morning and has taken a
Speaker 3: little bit of a hit, maybe actually not as severe
Speaker 3: as it was in the market open, but down about
Speaker 3: a percentage point one point one percent. We'll get a
Speaker 3: little bit more on that later in the program. This
Speaker 3: is Bloomberg Technology. This was the Bloomberg Big take over
Speaker 3: the weekend. Uber and Lyft have found a money saving
Speaker 3: loophole in New York City lockouts. By simply preventing drivers
Speaker 3: from logging into the apps, the companies set themselves up
Speaker 3: to save as much as hundreds of millions of dollars
Speaker 3: in driver payouts. That's according to Bloomberg estimates. Listen to this.
Speaker 10: The summer of twenty twenty four was a stressful time
Speaker 10: to be an Uber or Lyft driver in New York City.
Speaker 11: Kill even Ballmark because there's Lackold's currently.
Speaker 10: In May, Uber began preventing drivers from working seemingly at
Speaker 10: random for hours at a time. Lift soon followed Suit.
Speaker 12: They opened their app and normally you would be able
Speaker 12: to click the go button and go online. But when
Speaker 12: you're locked out, when you press go, nothing happens.
Speaker 13: An individual lockout could happen from anywhere from five minutes
Speaker 13: up to eight hours.
Speaker 12: We understood that this stemmed from a six year old
Speaker 12: pay rout.
Speaker 13: I started driving for Uber to be able to work
Speaker 13: at my own schedule because I went through a lot
Speaker 13: of trauma with a divorce. I was a mess emotionally.
Speaker 13: So basically, a lockout is when you cannot go online
Speaker 13: to work, so essentially your micro fire.
Speaker 9: Every day I would get locked out of Uber. It
Speaker 9: was very frustrating.
Speaker 13: It was also affecting my self respect. What am I
Speaker 13: just the I'm a robot? Like getting locked out like
Speaker 13: I'm a person. I have to feed my family.
Speaker 12: Lockouts happen every hour of the day, every day, and
Speaker 12: that's despite Uber saying their particular schedule of open access
Speaker 12: times where people shouldn't be locked out. We found that
Speaker 12: there were more than four hundred instances of lockouts happening
Speaker 12: insert zones. So there's definitely potential impact there on consumer pricing.
Speaker 12: A lot of people. Through our interviews, we learned that
Speaker 12: they are working way beyond their usual hours to try
Speaker 12: to make what they've made before.
Speaker 3: Check out The Big Take Daily podcasts anywhere you get
Speaker 3: your podcasts. I think that is one you definitely want
Speaker 3: to check out.
Speaker 2: Carrac Yeah, more on the sharing economy because cities around
Speaker 2: the world are debating how to regulate short term rentals,
Speaker 2: for some going as far as banning services like Airbnb
Speaker 2: or erbo, others are trying to find a compromise through
Speaker 2: limits and regulations.
Speaker 4: You just saw her in that package.
Speaker 2: We now have Natalie Lung live on sets talk about
Speaker 2: the different approaches with Airbnb and the like and solving
Speaker 2: some of the concerns and if they work. Natalie, what
Speaker 2: are we currently seeing a city like New York trying
Speaker 2: to compromise on.
Speaker 12: Right The New York City had introduced almost a de
Speaker 12: facto ban on short to rentals last year, basically ruling
Speaker 12: out the short to rentals of less than thirty days
Speaker 12: and more than a year into the law, we've seen
Speaker 12: that vacancies have not gone up, so like hosts have
Speaker 12: not released those short to rentals as expected, turning into
Speaker 12: long term rentals, and the rent decreases we've seen in
Speaker 12: the over the past year were attributed to other factors.
Speaker 12: So our Airbnb is arguing that the law is not
Speaker 12: as effective as the city had hoped.
Speaker 3: As we write in the Natalie, there are two sides
Speaker 3: to this story, and in the middle there is compromise.
Speaker 3: Where have the companies and also like the hosts themselves
Speaker 3: because they want to make money and the regulators found compromise.
Speaker 12: Airbnb has introduced something called a city portal back in
Speaker 12: twenty twenty to basically encourage more transparency, sharing more ways
Speaker 12: that cities can access the data own listing, so cities
Speaker 12: can ensure better licensing registration as well as an easier
Speaker 12: way to collect tax revenue. So by increasing the data
Speaker 12: they share, cities can ensure better enforcement.
Speaker 2: Yeah, they need more transparency ultimately about what people are
Speaker 2: making as well right to be able to declare a
Speaker 2: win win with tax revenue going to the government as
Speaker 2: well as to the people are hosting.
Speaker 12: Yeah, that's the argument basically, and Airbnb is saying a
Speaker 12: de facto band, like a blanket band like New York
Speaker 12: City is almost like a cautionary tail, and cities shouldn't
Speaker 12: go that far.
Speaker 3: The question simply is what happens next. You know, in
Speaker 3: New York City is a really interesting example where there's
Speaker 3: a debate about where the laws get changed.
Speaker 5: Natalie.
Speaker 12: Interestingly, about a year, like a month ago, exactly a
Speaker 12: year of this rule coming into effect, Airbnb came out
Speaker 12: with taking stock of the effectiveness of this rule and
Speaker 12: saying they are kind of appealing to the city to
Speaker 12: perhaps adjust some provisions in the laws so that some
Speaker 12: hosts can come back to their platform.
Speaker 3: Bloomberg's Nasty lung across two very important stories in the
Speaker 3: gig economy.
Speaker 5: We really appreciate it. Thank you very much.
Speaker 10: We can see those chats.
Speaker 9: You should want to hurt cover.
Speaker 3: SpaceX caught the attention of the world over the weekend,
Speaker 3: making a first historic catch mid air for one of
Speaker 3: its boosters. For more and what this leap means for
Speaker 3: space exploration, Bloomberg's Lauren Grush joins US and was on
Speaker 3: shift over the weekend covers SpaceX for us. Actually, there
Speaker 3: were two milestones, and we need to talk about the
Speaker 3: kind of Starship component of it.
Speaker 5: But let's start with the booster.
Speaker 3: Why that was significant and the idea of rapid reusability.
Speaker 5: Lauren, right, Yeah, this.
Speaker 14: Was a big hurdle that SpaceX needed to clear in
Speaker 14: the road of development for Starship.
Speaker 9: As you mentioned, Starship's promise.
Speaker 14: Is that it's going to be fully reusable, so both
Speaker 14: portions of the vehicle need to survive after launch.
Speaker 12: But with the booster, you know, when they.
Speaker 14: First proposed this idea, I think a lot of people
Speaker 14: were skeptical. Obviously SpaceX has perfected landing its rockets with
Speaker 14: its Falcon nine, but when this was proposed, catching the
Speaker 14: rocket in midair rather than landing it, I think a
Speaker 14: lot of people were wondering how this would work. But
Speaker 14: it seemed to work just like a charm, at least
Speaker 14: from what we saw. And so I think they've proved
Speaker 14: a lot of skeptics wrong over the weekend.
Speaker 15: And now NASA going is fall to consider that maybe
Speaker 15: we'll be landing on the Moon, maybe using of cool
Speaker 15: Starship as lotly as twenty twenty five, told us through
Speaker 15: what needs to happen to get that on.
Speaker 14: Yeah, I think the current plan is landing in twenty
Speaker 14: twenty six with people, but you know, just to caution,
Speaker 14: there's still quite a long road ahead for Starship. Obviously,
Speaker 14: this was a huge milestone for the company, but next
Speaker 14: they really need to showcase that they can refuel Starship
Speaker 14: in orbit and so that's essentially like filling up at
Speaker 14: the cast tank, but with a lot more engineering challenges.
Speaker 9: But this will be crucial to.
Speaker 14: That because they have to catch and then relaunched the
Speaker 14: booster over and over again with back to back launches
Speaker 14: in order to perform those refueling missions.
Speaker 3: So the other Starship gets up to orbital altitude, orbital speeds,
Speaker 3: goes around the world, and control lands into the Indian Ocean.
Speaker 5: Taught me through that part please. Yeah.
Speaker 14: So during the last flight, you know, Starship struggled when
Speaker 14: it came back from space. We could see it kind
Speaker 14: of burning up and breaking apart when it was plunging
Speaker 14: through the atmosphere. But SpaceX said that they did a
Speaker 14: total revamp on the heat shield on Starship, and from
Speaker 14: what we saw, it seemed to survive relatively intact. I
Speaker 14: think we saw a little burn through, but definitely not
Speaker 14: nearly as significant as the prior play. And then so
Speaker 14: it did survive, and then when they tried to splash
Speaker 14: down in the ocean, they were able to flip and
Speaker 14: kind of do a pretty precise landing. So yeah, it
Speaker 14: really was a big milestone for both the Booster and Starship,
Speaker 14: showcasing that maybe this rocket can be fully reusable, which is,
Speaker 14: to be fair, something that SpaceX hasn't been able to
Speaker 14: achieve yet with its Falcon nine.
Speaker 9: You know, part of the Falcon.
Speaker 14: Nine still goes unused or is destroyed after launch, and
Speaker 14: so this would be a huge paradigm shift for SpaceX
Speaker 14: and the launch industry in general.
Speaker 2: Line crash, Welcome back to bluemog Technology. I'm Caroline Hyde
Speaker 2: in New York.
Speaker 5: Now I med loll in San Francisco.
Speaker 2: Quick check on these market said, because we've got to
Speaker 2: risk and feel that we're dialing back from our previous
Speaker 2: highs on the NASAQ, we're still up some six tenths percent.
Speaker 2: All eyes on earnings, All eyes on, of course, where
Speaker 2: we'll see stimulus coming from China. Now, interestingly, the NASDAT
Speaker 2: Golden Dragon Index, which tracks some of the key tech
Speaker 2: names over in China. Training here in the US is
Speaker 2: down by a percentage point. Even though Chinese stocks managed
Speaker 2: to ramp up higher in their day of trade.
Speaker 4: We maybe call off.
Speaker 2: We're still waiting for that fiscal stimulus coming from China,
Speaker 2: China being factored into crypto more broadly. But once again,
Speaker 2: Bitcoin up five percent, a good strong play for that,
Speaker 2: and we're seeing and it's training gets higher since July.
Speaker 2: That as we also debate what is happening in terms
Speaker 2: of the US economy where interest rates go and the
Speaker 2: like move on, have a look at what's happening in
Speaker 2: terms of overall big names that drivers higher. I'm looking
Speaker 2: at Adobe up two point three percent. We have a
Speaker 2: crucial conversation coming with a CEO, new generator of AI
Speaker 2: in the world of video.
Speaker 5: We'll get that to.
Speaker 2: You in a moment. A SML though one of the
Speaker 2: key points drivers on the nasat one hundred, of course,
Speaker 2: European chip equipment maker is driving up one two point
Speaker 2: six percent. Look all eyes on earnings they come out
Speaker 2: on October the sixteenth, and I'm looking at Video. Look
Speaker 2: once again, this three trillion dollar company is managing to
Speaker 2: help take the benchmarks higher, all based on optimism around
Speaker 2: the Blackwell focus, but also just AI more broadly. But
Speaker 2: we've got an interesting take on.
Speaker 3: AI now ed okay, buckle up. Open ai is going
Speaker 3: to war with a man who owns a trademark and
Speaker 3: website with the name open Ai with a Space. The
Speaker 3: man at the center of the lawsuit filed a trademark
Speaker 3: on the name open space Ai the same day Sam
Speaker 3: Altman and Greg Brockman announced their company Open Ai. This man,
Speaker 3: Guy Ravine, claims to have invented the video sharing technology
Speaker 3: later made famous by Snapchat and TikTok. Evan Ratliff wrote
Speaker 3: about it in Bloomberg BusinessWeek and joins us, Now, it
Speaker 3: is an incredible tale, some incredible reporting. It's probably one
Speaker 3: where chronology is important. So let's start at the beginning.
Speaker 3: Open space AI and open ai were born at the
Speaker 3: same time.
Speaker 5: Take us from there.
Speaker 16: So essentially, this gentleman, Guy Ravine, who is a kind
Speaker 16: of technologist inventor, who was in Silicon Valley, he had
Speaker 16: come up with an idea and he could document this
Speaker 16: for open ai with a Space, and the idea was
Speaker 16: that it would be a nonprofit that would be engaged
Speaker 16: in deep learning research, and the way that they would
Speaker 16: lure researchers away from Google, which was dominating deep learning
Speaker 16: research at the time, was that they would say that
Speaker 16: everything would be open, the research would be open, it
Speaker 16: would all be done for the benefit of humanity. And
Speaker 16: if you know anything about open ai, the company, the
Speaker 16: organization open ai without a space, that is also.
Speaker 1: Their origin story.
Speaker 16: They just launched some months after Ravine can document that
Speaker 16: he was pitching this story around Silicabaluy, so they launched
Speaker 16: in December of twenty eleven.
Speaker 2: The pitching is important because you originally thought Evan might
Speaker 2: be a bit of a scammer, and then he went
Speaker 2: to some of the really key names in Silicum Valley,
Speaker 2: Jan Lukumb for example, and asked like did he come
Speaker 2: to is he legit? And one key person came back
Speaker 2: and said, I think he is.
Speaker 16: He did, And that's to me is what makes this
Speaker 16: story so interesting and different and kind of the story
Speaker 16: that you don't hear about very often, which is that
Speaker 16: it had first seemed like this was kind of what
Speaker 16: they call a trademark troll lawsuit, like he filed at
Speaker 16: the trademark the day that open ai launched like maybe
Speaker 16: he's just trying to usurp it from them. He owns
Speaker 16: the domain open ai. But then it turned out that
Speaker 16: some of the people that he had pitched to, one
Speaker 16: in particular Tom Gruber, who's the co inventor of Siri,
Speaker 16: who used to be at Apple, who's a respected name
Speaker 16: in AI, he's backing guy r v Up. He says, yes,
Speaker 16: he pitched me this idea. Not only did pitch me
Speaker 16: this idea, I can document that he had it before
Speaker 16: open ai the company launched, And so it's not a
Speaker 16: case of someone just claiming something out there in the blue.
Speaker 16: It's actually there are people to whom he pitched the story,
Speaker 16: and there are documents showing that he pitched the idea
Speaker 16: before it launched. Now whether that legally matters is going
Speaker 16: to be decided in the courts.
Speaker 3: If you're just joining us on Bloomberg Technology, this really
Speaker 3: is a must read in the BusinessWeek magazine. There's litigation
Speaker 3: on going here, right, there's the trademark dispute. There's a suit.
Speaker 3: Just update us on the latest on those front seven.
Speaker 16: So essentially, I mean open ai has has really prevailed
Speaker 16: in the arguments so far. I mean they got a
Speaker 16: preliminary injunction against Guy Ravine, so he can no longer
Speaker 16: use open ai the trademark or the domain open dot ai,
Speaker 16: which he again bought well before open ai launched.
Speaker 1: So he can't use either of those right now.
Speaker 16: He filed a countersuit against them, claiming they stole the
Speaker 16: idea from him. That most of that countersuit was dismissed
Speaker 16: and now it's been refiled, so he's had setbacks in court,
Speaker 16: but they're a long way.
Speaker 1: From you know, what would eventually.
Speaker 16: Be likely a jury trial if they ever got that
Speaker 16: far that that would be minimum months.
Speaker 1: If not, you know, over a year away.
Speaker 2: These things always take an awful lot of time. Evan,
Speaker 2: what do you think the response will be from open
Speaker 2: ai to this investigation of yours? How have you been
Speaker 2: talking to the company without a space, Well.
Speaker 16: The company didn't have much interest in commenting. I mean,
Speaker 16: of course they've they've filed a lot of arguments in
Speaker 16: court and so they're sort of their comments are in
Speaker 16: their legal briefs. Their only sort of general comment was,
Speaker 16: you know, we took legal action action to stop the
Speaker 16: intentional use of open ai from confusing and misleading our users.
Speaker 1: Now, I think one of.
Speaker 16: The big questions around the lawsuit is why don't they
Speaker 16: just settle this lawsuit? Because the money that they're spending
Speaker 16: in lawyers is probably, you could guess, already greater than
Speaker 16: they might have settled the lawsuit for it. And the longer
Speaker 16: it goes on, the more that's true. Now, whether they
Speaker 16: want to make an example of Guyravine or with their
Speaker 16: new funding round, it doesn't really matter to them how
Speaker 16: much money they spend.
Speaker 1: I think those will be the questions.
Speaker 16: But I think the pressure always mounts the closer you
Speaker 16: get to actually having a jury trial.
Speaker 2: Extraordinary story. Go read it, Evan Ratliff. We thank you,
Speaker 2: ed what forgot?
Speaker 3: Many more stories in today's Talking Tech and first start
Speaker 3: what are we looking at? Bank of America has folded
Speaker 3: its fintech investment banking team into its tech practice, moving
Speaker 3: about fifty bankers into its roughly two hundred strong tech group.
Speaker 3: According to the Bank's chairman of Global m and A,
Speaker 3: this is a move reflecting an industry wide shift in
Speaker 3: financial service is toward software. Speaking of fintech, so far
Speaker 3: as Reeds to Bild to use two billion dollars of
Speaker 3: Fortress Investment Group funds for the origination of personal loans.
Speaker 3: The online banks in the agreement will expand its loan
Speaker 3: platform business of brokering deals for pre qualified borrowers and
Speaker 3: originating loans on the.
Speaker 5: Behalf of third parties.
Speaker 3: And South Korea's exports of tech products slowed for a
Speaker 3: third straight month, in indication that global demand may be
Speaker 3: peeking out, according to government data that also showed memory
Speaker 3: chip shipments and prices are starting to lose some momentum.
Speaker 2: Caroline, Now, let's talk fast fashion giant. Shean's potential London
Speaker 2: listing has attracted controversy and mere allegations of forced labor.
Speaker 4: Now.
Speaker 2: UK Prime Minister Kirs Starmer addressed these concerns today. The
Speaker 2: Bloomberg's head of economics, Stephanie.
Speaker 17: Flanders, well, I think we've got to get the balance
Speaker 17: right and clearly we've got to have standards, high stands.
Speaker 17: We do have high standards, not least for example in
Speaker 17: rights at work, and I address that in my speech
Speaker 17: here today to say look better rights and protection for
Speaker 17: people in their workplace are.
Speaker 11: Good for growth.
Speaker 17: So we're clear where we stand on standards, but we're
Speaker 17: future looking, we're pragmatic and subject to those standards. Then yes,
Speaker 17: we do want investment into the United Kingdom because we
Speaker 17: desperately need growth in this come. We have had meaningful
Speaker 17: growth in the economy in the United Kingdom for fourteen
Speaker 17: long years. We're determined to turn that around.
Speaker 18: Just to be clear on that, so the government would
Speaker 18: need to be sure that sheeds not using forced labor
Speaker 18: in Hinjang before it could list in the UK.
Speaker 17: I'm not going to get into individual businesses. What I
Speaker 17: will say it and be very clear about it. Standards
Speaker 17: and high standards do matter to us, So of course
Speaker 17: we'll be looking at any issue that goes to high
Speaker 17: standards with a particular feature on the rights of the workforce.
Speaker 17: And we've been really clear that we see that as
Speaker 17: two sides of the same coin when it comes to growth.
Speaker 17: Good employment rights and protections and a lot of drag
Speaker 17: on growth. They're fundamental for growth, and I think pretty
Speaker 17: well all good businesses understand that, which is why in
Speaker 17: many cases they've already put in place some of the
Speaker 17: rights and protections that we are bringing forward in legislation.
Speaker 3: Okay, coming up, Adobe launches a new AI video generator.
Speaker 3: We're going to speak with Adobe CEO Shantanu Naran. That
Speaker 3: is next, what a conversation. This is Bloomberg Technology.
Speaker 2: Adobe makes its AI video debut, announcing new tools allowing
Speaker 2: for video generation now. The company calls it Firefly, and
Speaker 2: it's set to be implemented in its video editing software
Speaker 2: Premiere Pro, taking on, of course, the likes of Open Ai,
Speaker 2: Meta Google a place to say. Adobe CEO Shantanu Orian
Speaker 2: joins us now on the back of the announcement in Miami. Shantanu,
Speaker 2: what's interesting is you're getting it into the hands of
Speaker 2: users faster than rivals. Is it based on what it's
Speaker 2: trained upon? How are you able to give it to
Speaker 2: us so quick?
Speaker 18: Well, Caroline, first, thanks for having me on the show.
Speaker 4: Max.
Speaker 18: As you know, is our biggest creativity event, and it's
Speaker 18: the time that our engineers really take it upon themselves
Speaker 18: to show their magic to the entire creative community.
Speaker 4: As you point out, we have been.
Speaker 18: Hard at work ensuring that our Firefly set of models
Speaker 18: works on things like images and vector in design. But
Speaker 18: today's a big day because we have been releasing our
Speaker 18: Firefly video models. You know, our strategy has always been
Speaker 18: that it's not just about the models that people develop,
Speaker 18: but it's the integration with the apps.
Speaker 4: Where the real magic is.
Speaker 18: And so we've had thirteen billion generations where people have
Speaker 18: used either Photoshop or illustrator to do it, and today
Speaker 18: that magic comes to video in Premiere Pro, will be
Speaker 18: in after effects as well as on firefly dot com Santani.
Speaker 3: The most interesting part is the accessibility. There are no
Speaker 3: usage limits one, but beyond the basic subscription fees, you're
Speaker 3: not charging for the AI tools.
Speaker 5: Will that change.
Speaker 4: Well, Our focus.
Speaker 18: Really first is on ensuring that we develop these great models.
Speaker 18: We're very differentiated, and these models were designed to be
Speaker 18: commercially safe, so they've only been trained on licensed and
Speaker 18: public domain content.
Speaker 4: And you know, we want people to experiment with it.
Speaker 18: So I think clearly on the imaging, vector and design front,
Speaker 18: we have said as part of the subscription we don't
Speaker 18: want you to think about credits. We just want you
Speaker 18: to experience the magic that exists. A video might be
Speaker 18: a little bit different at what we've announced today is
Speaker 18: that it's available in a beta form. The cost of
Speaker 18: producing video is clearly a little bit more expensive, but
Speaker 18: first steps is to just get it in the hands
Speaker 18: of people, have them try it, give us feedback, make
Speaker 18: sure it's specific, and then as I think the amount
Speaker 18: of video that's being generated is expanding. We will probably
Speaker 18: have different pricing models for that.
Speaker 3: One of the features is to take an existing piece
Speaker 3: of video and use generative AI to.
Speaker 5: Extend it, extend beyond actual.
Speaker 3: As someone that trained in their early career on premiere,
Speaker 3: I'm excited.
Speaker 5: To use that.
Speaker 3: How technically difficult was it for Adobe to achieve that
Speaker 3: versus the work you've done in photo.
Speaker 18: Well, every time you show something in photo and people say,
Speaker 18: oh my god, that's magic. To your point, the ability
Speaker 18: to extend that into video across every frame is so
Speaker 18: much more computationally intensive as well as challenging in order
Speaker 18: to do.
Speaker 4: But the use cases are so dramatic. You've had a
Speaker 4: video for some reason.
Speaker 18: Unfortunately it got clipped off and you just want to
Speaker 18: extend it. You have video that you want to align
Speaker 18: with audio, the song is not long enough.
Speaker 4: How do you do it?
Speaker 18: So I think this generative extend concept, which is you know,
Speaker 18: really something that's very pervasive in video editing, is something
Speaker 18: that the customers will really like.
Speaker 4: The Other thing that we've done is because.
Speaker 18: We can now analyze every frame when you want to
Speaker 18: remove something that inadvertently came into the image. You don't
Speaker 18: have to go through the entire process again, you can
Speaker 18: just through post production change it. So some pretty incredible
Speaker 18: stuff and we're really excited to see what our customers
Speaker 18: do with this.
Speaker 2: You talked about the computational feat the intensity, what about GPUs,
Speaker 2: what about your own access to compute?
Speaker 18: You know, well, we've partnered with you know, Nvideo for
Speaker 18: years in making sure all of this stuff is available.
Speaker 18: You know, it was great to hear from Jensen this
Speaker 18: morning when he heard about our new announcements. But you know,
Speaker 18: we're partnering with all of the chip manufacturers as well
Speaker 18: as all of the hyper scalers because our intent is
Speaker 18: not just to make this magic available through you those chips,
Speaker 18: but also increasingly people are talking about how you can
Speaker 18: make this available on a mobile device or in a
Speaker 18: hybrid environment. So, you know, as long as they keep
Speaker 18: performing in terms of what they are doing innovation on
Speaker 18: the chips, we'll take advantage of every single available GPU
Speaker 18: and CPU for our customers.
Speaker 2: That's expensive and also, look, investors have been so excited
Speaker 2: around just generative AI full stop, but they want to
Speaker 2: see the revenue, they want to see the profitability. Chantanouje,
Speaker 2: you feel that you're able to give more light, more
Speaker 2: clarity to the market as to when this really becomes
Speaker 2: very revenue generating.
Speaker 18: You're absolutely right, Carolin, that all of the focus thus
Speaker 18: far has been on training, and people have been creating
Speaker 18: all the models, and so all of the investment that's
Speaker 18: actually happening is on the training side of the equation. However,
Speaker 18: I think Adobe has delivered more generative AI software than
Speaker 18: virtually any other large company that had a traditional business.
Speaker 18: So if you think about what we've done with Acrobat
Speaker 18: AI Assistant or Photoshop, and clearly the emphasis has to
Speaker 18: go on inference because that's where people are seeing value,
Speaker 18: that's where it's getting embedded in the workflows. We will
Speaker 18: have three or four different ways in which we monetize it,
Speaker 18: and we have a financial analyst Q and A where
Speaker 18: we will talk about this as well. But as you
Speaker 18: insight into that, certainly our subscription tier pricing will have
Speaker 18: the ability to lose some of this AI. We will
Speaker 18: have add on services. Firefly services is being used by
Speaker 18: every large enterprise. They want to understand how they create
Speaker 18: a custom model where they can have, for example, Bloomberg
Speaker 18: assets in a custom model where only Bloomberg is allowed
Speaker 18: to generate with that content. So I think we have
Speaker 18: multiple ways in which we monetize it today. Already, performance
Speaker 18: marketers will have a new product today which is called
Speaker 18: gen Studio, so you can increase the agility by which
Speaker 18: you place ads on every advertising system. So, you know,
Speaker 18: we're both excited about the technology and the value, but
Speaker 18: we're also confident that customers will see the value and
Speaker 18: enable us to monetize it.
Speaker 3: Chantonau intense interest in your M and A strategy. Karen
Speaker 3: and I were with the Runway CEO last week. Will
Speaker 3: you look at companies like Runway.
Speaker 4: We're partnering with Runway.
Speaker 18: You know, I think as it relates to models, we
Speaker 18: believe that Adobe for its core domains such as video
Speaker 18: and imaging and design, and we will certainly have our
Speaker 18: own models, but people will want us to support third
Speaker 18: party models in our applications because that is the interface
Speaker 18: that everybody uses. We've demonstrated that for video at IBC
Speaker 18: with Runway, and certainly we will support these customer models.
Speaker 18: As I said, so if your Coke or Nike or
Speaker 18: Bank of America and you're using it within your context,
Speaker 18: you have access to that, so you know this is
Speaker 18: going to.
Speaker 4: Be such an exciting area.
Speaker 18: Each model, I believe ed will have its own personality.
Speaker 18: So rather than you know, try to create one model,
Speaker 18: that's the super said, We're going to support all these
Speaker 18: models because they will do some things differently and better.
Speaker 3: Adobe CEO shantanoon I ran, it's great to finally have
Speaker 3: you here on Bloomberg Technology.
Speaker 5: Thank you for your time.
Speaker 2: President Biden announcing six hundred and twelve million dollars in
Speaker 2: recovery aid for areas stricken by hurricanes Milton and Helene
Speaker 2: as he surveyed the aftermath of Milton and Florida. Biden
Speaker 2: said last week that the damage from Milton alone could
Speaker 2: be about fifty billion dollars based on early assessments. Let's
Speaker 2: talk about access to aid and how technology might be
Speaker 2: able to help here too. FTW Ventures founder and general
Speaker 2: partner brand Frank has joining us, and look, you are
Speaker 2: all about food security. You're all about food safety and
Speaker 2: innovation around that. One innovation is needed in these moments.
Speaker 19: FTW Ventures were early stage venture fund focused on a
Speaker 19: sustainable food system. We believe technology provides the unlocks like
Speaker 19: it has for many other industries, to create safety, security access,
Speaker 19: optimal nutrition.
Speaker 11: And the outcomes.
Speaker 19: We all want to live a healthy and happy life,
Speaker 19: especially in these times of need when we have war
Speaker 19: and disasters that are taking a toll on our food system.
Speaker 3: Brian, are we talking about hardware or are we talking
Speaker 3: about software?
Speaker 11: We're talking about all of it.
Speaker 19: The reality is technology, from biotechnology to hardware and automation
Speaker 19: to AI and mL.
Speaker 11: All of these technologies that have been pioneered for.
Speaker 19: General purpose and for other industries like the automotive industry
Speaker 19: or energy generation can now be applied directly within the
Speaker 19: food system. And so we're talking about replacing plastics with
Speaker 19: sustainable materials. We're talking about biotechnology to grow our next
Speaker 19: generation food. We're talking about AI and mL to speed
Speaker 19: and optimize the supply chain in which food can reach people.
Speaker 19: So it's any and all technologies that can be applied
Speaker 19: directly within the food and agricultural sectors.
Speaker 2: What sort of ey of check you having to be
Speaker 2: writing at the moment, How facing competitive is it in
Speaker 2: this space or not?
Speaker 19: Yeah, it's the venture industry, and as the whole has
Speaker 19: taken a turn in the recent year, we've seen the
Speaker 19: amount of capital deployed down and the valuation of companies
Speaker 19: coming down.
Speaker 11: Slightly as well. However, we're still writing.
Speaker 19: Significant checks of two hundred and fifty thousand dollars to
Speaker 19: a million dollars into early stage startups that are really
Speaker 19: trying to innovate. They're bringing the first science out of
Speaker 19: loud where they're bringing their first technology out of their
Speaker 19: offices to apply it to the food and agricultural sectors.
Speaker 3: Brian, is this US centric or it's happening around the world.
Speaker 11: It's happening around the world.
Speaker 19: We had FTW focus on the North America market, but
Speaker 19: we believe technology and innovation in North America should be
Speaker 19: brought to all corners of the world. So we're working
Speaker 19: with regions like Singapore and Southeast Asia to really bring
Speaker 19: food security and safety to those members of the community
Speaker 19: as well. We're also I'm also personally a advisor to
Speaker 19: the World Food Programs Accelerator, which helps in places of
Speaker 19: Sub Saharan Africa and Latin America with food access, security
Speaker 19: and safety as well.
Speaker 11: And so it's happening.
Speaker 19: Everywhere and we're just trying to bring the best technologies
Speaker 19: played up level this industry. It needs to see ten
Speaker 19: billion people on the planet by twenty fifty Ran.
Speaker 2: Frank, thank you for joining us. FTW Benure's general partner there. Meanwhile,
Speaker 2: for this edition of Bloomberg Technology, we still have all
Speaker 2: eyes on those record highs for Invidia.
Speaker 3: Yeah, a reminder if you're just joining us, keep an
Speaker 3: eye on Nvidia. There may be a fresh record plenty
Speaker 3: to recap on the podcast. You know where to find
Speaker 3: it online on those platforms and on the Bloomberg platforms.
Speaker 3: Shout out my friends and the team in New York City,
Speaker 3: the big team out here in San Francisco.
Speaker 5: One day down, four to go.
Speaker 3: This is Bloomberg Technology.