Speaker 1: From Bahard where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: I'm Caroline Hyde and Bloomberg's world headquarters in New York
Speaker 2: and our Meed Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology.
Speaker 2: Coming up the reality of artificial intelligence. It's disruption, hits hiring,
Speaker 2: it hits business models and more. We're going to discuss
Speaker 2: it all with Apple co founder Steve Wozniak later.
Speaker 3: This hour, and we'll sit down with the CEO of
Speaker 3: Uber as the right sharing company post solid earnings on
Speaker 3: strong demand for rides and deliveries.
Speaker 2: Plus we'll speak with the CEO of so Far I
Speaker 2: mean the banking system termil is the personal finance company
Speaker 2: partners with travel john Expedia to create a rewards program
Speaker 2: for its customers.
Speaker 3: The main earnings mover is certainly Uber. We're looking at
Speaker 3: the biggest jumps into around November. You look at asedy
Speaker 3: bit DAR outperforming in the quarter, gong strong outlook for
Speaker 3: adjusted ebit DAR in the second quarter, gross booking slightly
Speaker 3: below estimates, but their strength in riding and strength in delivery,
Speaker 3: and we will get into that Emily later in the show.
Speaker 3: Lift modesty higher had been lower on some of the
Speaker 3: outperformance by Uber because of course they're so closely linked
Speaker 3: as market competitors.
Speaker 2: Let's just for a moment, Ed, though, talk about one
Speaker 2: particular company that you didn't mention in the micro. We're
Speaker 2: going to talk about chat GPT. How is up ending
Speaker 2: the ed tech industry seems to be a concern in
Speaker 2: particular for Check, absolute extraordinary move for this online education company,
Speaker 2: down more than fifty percent at one point. It's following
Speaker 2: the company warning that chatbot tool is really threatening its
Speaker 2: homework health services. Check CEO says they've noticed a quote
Speaker 2: significant spike in student interest in chatchbt since March, which
Speaker 2: is impacting their new customer growth rate. So what does
Speaker 2: AI and education look like going forward? But how do
Speaker 2: they harness each other? How does upend each other? And
Speaker 2: stick into the impact of generative AI in particular on
Speaker 2: ed tech space.
Speaker 4: How do you putovies with us?
Speaker 2: His CEO of co dot August, an ed tech nonprofit
Speaker 2: which just launched teach ai along with karn Academy, the
Speaker 2: World Economic Forum and others. Teach ai is look an
Speaker 2: initiative dedicated to helping educators teach with AI about AI,
Speaker 2: but HARDI how much already is AI teaching kids instead
Speaker 2: of teachers?
Speaker 5: I don't know by the AI teaching kids instead of teachers.
Speaker 5: But what every parent, every school student, and teacher recognize
Speaker 5: is that since the moment that chat GBT in these
Speaker 5: chatbots came out, kids are wondering can I use this
Speaker 5: for homework? Teachers are wondering how do I need to
Speaker 5: adjust my classroom now that this technology is out there?
Speaker 5: And you know, one of the best questions when I
Speaker 5: show this to my kids, he also asked, am I
Speaker 5: allowed to use this for school? But then he also asked,
Speaker 5: what's the point of school if this can do all
Speaker 5: this stuff well perposely?
Speaker 3: Right?
Speaker 5: And so these are questions that nobody has firm answers to.
Speaker 5: And part of the issue is that the technology creators
Speaker 5: aren't saying how schools should be using it, and school
Speaker 5: leaders are just receiving this technology is coming out, wondering
Speaker 5: how do we react and it's moving so fast. The
Speaker 5: goal of teach AI is to bring together tech leaders
Speaker 5: such as OpenAI, Microsoft and Amazon who are creating these technologies,
Speaker 5: together with education leaders such as code dot Org, con Academy,
Speaker 5: the College Board, and then global education leaders all across
Speaker 5: this country and all six continents to answer these questions
Speaker 5: about how should education evolve for an age of AI?
Speaker 2: I mean, will this erode many a business model you're
Speaker 2: currently looking at incorporating AI curriculum, you say, and tools
Speaker 2: into your platform to reach one hundred and fifty million
Speaker 2: students by twenty thirty. But what is education prophesied for us?
Speaker 2: What is education going to look like by twenty thirty?
Speaker 2: Will they really be using online tools?
Speaker 5: Well, one thing I could say is the current education
Speaker 5: system we use, where students spend most of their time
Speaker 5: reading in books and sort of filling their heads with
Speaker 5: knowledge from books, was designed based on the invention the
Speaker 5: printing press six hundred years ago, and so we need
Speaker 5: to rethink how we do education in a time when
Speaker 5: information is available at your fingertips and AI can synthesize
Speaker 5: and create for you. And so our goal isn't just
Speaker 5: to get students who know how to memorize a lot
Speaker 5: of information and practice repetitive road tasks, but helping students
Speaker 5: become creators and problem solvers using AI as a superpower.
Speaker 2: Yeah, are you on the side that AI augments rather
Speaker 2: than competes again or are you already thinking, wow, education
Speaker 2: is going to have to so pivot because the job
Speaker 2: market is going to so have to pivot.
Speaker 5: I think both of those are true. AI absolutely augments,
Speaker 5: but we need to teach students not just the skills
Speaker 5: of the past, but also the skills of the future.
Speaker 5: Every workplace is asking its workers figure out how this
Speaker 5: can make you more productive, whereas today many schools are
Speaker 5: banning AI because it's considered cheating. The heating that people
Speaker 5: are trying to stop in schools is what employers want
Speaker 5: their employees to do. They're like, oh, if this makes
Speaker 5: you work faster, please do it. If it reduces the
Speaker 5: time spent on any kind of task.
Speaker 3: Howdey does code to org Good morning. By the way,
Speaker 3: have any sort of granular insight into how students, either
Speaker 3: at the high school level or college level are actually
Speaker 3: using generatord AI tools.
Speaker 5: How they're using it. It's much broader than what code
Speaker 5: dot org sees. And honestly, the best way to see
Speaker 5: that is what is listening to parents, students, and teachers,
Speaker 5: and it's much more anecdotal. You know, as one example,
Speaker 5: my neighbor's daughter just got an f on a homework
Speaker 5: assignment because the teacher accused her of using chat GPT,
Speaker 5: and she's insisting I didn't use it, I wrote it myself.
Speaker 5: And that's a kind of story that's happening all around
Speaker 5: the world. It's not easy to keep track of because,
Speaker 5: first of all, students when they use these tools, they
Speaker 5: use them at home, and they also know to change
Speaker 5: up the writing and to personalize it as well. But
Speaker 5: the real issue we need to talk about is not
Speaker 5: to view using of new technology as cheating, but to
Speaker 5: figure out how do we move the goalposts of education.
Speaker 5: How do we teach creativity, communication skills, problem solving skills,
Speaker 5: and technological fluency so students learn the stuff that we
Speaker 5: want them to learn, including how to use these tools
Speaker 5: to be more productive.
Speaker 3: So, in Cheke's case, their shares are plunging because they
Speaker 3: gave evidence that their offering is being displaced by chat GBT.
Speaker 3: It's a free service principally that anyone can access as
Speaker 3: long as they get past the wait list. Is that
Speaker 3: what you're seeing that generative AI tools are displacing traditional
Speaker 3: online education tools.
Speaker 5: What's definitely true is that tools like chat GPT can
Speaker 5: help a students do almost all of what their current
Speaker 5: homework looks like today. And so once that's out there,
Speaker 5: students wonder, can I use this for my homework? And
Speaker 5: of course teachers classroom schools wonder, how do we change
Speaker 5: what homework is? Because what's the point if a student
Speaker 5: just plugs it in and gets an answer and doesn't
Speaker 5: actually use their heads and their brains very much. And
Speaker 5: so there's going to be great disruption within education technology
Speaker 5: and also in classrooms as we rethink not only the
Speaker 5: tools for education, but even how teaching has done and
Speaker 5: even the purpose of education.
Speaker 2: You've been in the for profit side, studying your career
Speaker 2: at Microsoft and other tech giants, and then when you're
Speaker 2: now in a nonprofit focus, how much are you talking
Speaker 2: with government?
Speaker 4: How much are you thinking about the ethical.
Speaker 2: Repercussions of where artificial intelligence is leading us, whether it
Speaker 2: be from children, whether it be more broadly about the
Speaker 2: way in which we use it as humankind and what
Speaker 2: it ultimately means.
Speaker 4: For all of us in our productivity.
Speaker 5: That is a fantastic question. It's the purpose of what
Speaker 5: we're announcing today with Teachai, which is to bring together
Speaker 5: for profit and private corporate leaders basically the technology creators
Speaker 5: with the education leaders, many of which are basically governments,
Speaker 5: to have this dialogue to figure out how to safely
Speaker 5: and ethically and equitably into rad AI And I'm not
Speaker 5: put it.
Speaker 4: Back in its boxing. You don't think we should slow down?
Speaker 5: Yeah, there's two extremes, which is just release the technology,
Speaker 5: see what happens, and the other extremes ban it, slow
Speaker 5: it down, stop it. The middle ground is to figure
Speaker 5: out how do we use it and harness it, but
Speaker 5: with safety and ethics as part of that conversation. And
Speaker 5: that's why we're bringing together not only tech leaders and
Speaker 5: education leaders, but government leaders. There's numerous ministries from around
Speaker 5: the world, ministries of education that are participating in this
Speaker 5: work because they want to basically be at the forefront
Speaker 5: of how we change education.
Speaker 2: For good hopefully. Co dot com, quote dot org. In fact,
Speaker 2: CEO Hardiputovi, we thank you so much for being with us.
Speaker 4: Meanwhile, and more on the global sphere.
Speaker 3: Right now, Yeah, Infinian Technology is breaking ground on a
Speaker 3: five billion euros new chip factory in Dresden, Germany, as
Speaker 3: part of its largest investment in chips. The German company's
Speaker 3: aiming to get another billion euros worth of funding from
Speaker 3: the European Union as the block seeks to double European
Speaker 3: chip output by twenty thirty. CEO Yoch and Hannabak also
Speaker 3: spoke about the Chips Act and self reliance in the
Speaker 3: semiconductor industry. Have a listen.
Speaker 6: I would appreciate some alignment in the liberal democratic world
Speaker 6: on the Chips Act. I think no country will achieve
Speaker 6: self sufficiency. It's all about reducing one sided dependencies, and
Speaker 6: therefore some alignment would be for the better good of
Speaker 6: the whole industry and the economy.
Speaker 3: Coming up, Uber out with earnings at the top testaments.
Speaker 3: We sit down with Uber's CEO Dara Kota Shahi next.
Speaker 3: This is thing, though, on a.
Speaker 2: Day where tech stops are on the downside, there's a
Speaker 2: significant apperform. We've got to turn our attention to Uber
Speaker 2: out with earnings and absolutely rocketing in terms of its
Speaker 2: share price, best day since November, revenue beat record profitability
Speaker 2: for the company, free cash flow as well, and even
Speaker 2: promise that they're going to be expanding profitability ed into
Speaker 2: this second quarter. All of this, though, as monthly active
Speaker 2: users are actually perhaps a little less than expected but
Speaker 2: those users, they are active, they're riding more, we're ordering
Speaker 2: more freight. A little bit of weakness, but look, I
Speaker 2: took a drive from the airport yesterday and when I
Speaker 2: checked out Lift versus Uber, Uber still has a lower
Speaker 2: price point. But that's the interesting thing, isn't it. As
Speaker 2: the moment ends to how much the competition, the focus
Speaker 2: on prices that coming down, whether that will ultimately impact
Speaker 2: some of the business models out there. For now, Uber
Speaker 2: really managing to show its pos post its earnings ed.
Speaker 3: Yeah, Look, we're judging Uber on an adjusted ebit DAR
Speaker 3: basis strong in the quarter, gong strong outlook going into
Speaker 3: the second quarter, eight hundred to eight hundred and fifty
Speaker 3: million dollars above what the street was looking for. They
Speaker 3: had that twenty twenty four goal when it comes to
Speaker 3: adjusted ebit DA coming up. We welcome our bloombag TV
Speaker 3: and radio audiences worldwide joining us now the CEO of Uber,
Speaker 3: Dara Kostrashahi, and of course Emily Chang of Bloomberg News
Speaker 3: here with me and take it away.
Speaker 7: Thank you so much, and Dara, thank you so much
Speaker 7: as always for joining us. Obviously, we're seeing strong reaction
Speaker 7: in the stock today, strong on mobility, strong on delivery.
Speaker 7: I want to focus on delivery first because that's more discretionary,
Speaker 7: and obviously times are tough right now, people are being
Speaker 7: more picky about what they spend on. Are you expecting
Speaker 7: any pullback in delivery in particular?
Speaker 4: Why or why not?
Speaker 1: Well, first of all, thank you for having me. It's
Speaker 1: great to be here, and obviously it's great to be
Speaker 1: here within the context of super strong results overall for Uber.
Speaker 1: As it relates to our delivery growth, we saw a
Speaker 1: really solid growth this last quarter in terms of constant currency,
Speaker 1: growing about twelve percent. Are gross bookings on a year
Speaker 1: on your basis, and we're seeing the habit of frequency.
Speaker 1: For example, frequency for a delivery consumers was up on
Speaker 1: a you're on your basis, Basket size continues to be higher,
Speaker 1: and we actually saw our growth bookings growth accelerate from
Speaker 1: Jen to feb to March. So we expect Q two
Speaker 1: delivery growth to be higher than what it was in
Speaker 1: Q one. So we're not seeing any kind of a
Speaker 1: signal at this point of a slowdown. And while there
Speaker 1: may be a slowdown going on in terms of the economy,
Speaker 1: I think generally the consumer remains strong. Generally the consumer
Speaker 1: spending more money on experiences, and I think food is
Speaker 1: a part of that experience set. And we as a company,
Speaker 1: because of our global scale and size and our brand
Speaker 1: and our tech prowess so to speak, are generally going
Speaker 1: faster than the delivery category. I think if you put
Speaker 1: that all together, along with profitable growth, you get to
Speaker 1: good outcomes regardless of the environment.
Speaker 7: All Right, Lift has a new CEO. They've made it
Speaker 7: clear they're going to lean into lower prices to compete.
Speaker 7: They want to call back market share. What's the risk
Speaker 7: of a price.
Speaker 1: For well, you never know, and you can't predict the future,
Speaker 1: but from what we have seen in terms of the
Speaker 1: statements coming out from Lyft is that they want to
Speaker 1: compete based on competitive pricing and what we're seeing in
Speaker 1: the marketplace. You know you mentioned at the beginning, which
Speaker 1: is Uber pricing is quite competitive in the in the marketplace.
Speaker 8: And I think if you have Uber.
Speaker 1: And Lyft competing not on who can have the lowest price,
Speaker 1: but who's got the best experience, who's got the best brand,
Speaker 1: who's got the better reliability or breadth of products out there,
Speaker 1: I think that you know, we can both do fine
Speaker 1: in this marketplace. The fact is that the mobility marketplace
Speaker 1: is growing. People are going out more, They're going to restaurants,
Speaker 1: they're returning to work, they're returning to the office. We
Speaker 1: are definitely seeing those tailwinds and I wouldn't be surprised
Speaker 1: if left us two going forward.
Speaker 3: Welcome to our Bloomberg radio and television audiences worldwide. We're
Speaker 3: with the CEO of Uber, Dara Kshrashahi Dara on that
Speaker 3: outlook on consumer strength. How long does it last? I mean,
Speaker 3: are you seeing any price pressure on the consumer or
Speaker 3: any sort of granular data you can give about how
Speaker 3: you see the rest of the year.
Speaker 1: We're not seeing any kind of pressure as it relates
Speaker 1: to consumer spend at this point, and I think part
Speaker 1: of it is because of our supply situation and generally
Speaker 1: supplying the marketplace getting better. We are seeing drivers talk
Speaker 1: about inflation more and about seventy percent of drivers who
Speaker 1: are coming onto the platform have said that inflation, the
Speaker 1: affordability of groceries, et cetera, has played a part in
Speaker 1: their decision to come onto the platform and to join
Speaker 1: Uber in order to augment their earnings or just bring
Speaker 1: in a healthy earning set. As it relates to the marketplace.
Speaker 1: Right now, we are seeing some signs on the enterprise
Speaker 1: side of weakness in terms of pickup, for example of
Speaker 1: Uber for Business. So when we look at Uber for
Speaker 1: Business new client signings, they're a bit slower than what
Speaker 1: they were pacing before. So I think you're seeing in
Speaker 1: the environment companies are being more careful, they are cutting
Speaker 1: cost often they're kind of cutting personnel. But that weakness
Speaker 1: has definitely not translated into the consumer, and the consumer
Speaker 1: we see being very strong and we don't see any
Speaker 1: signal of weakness there at all.
Speaker 3: The other enterprise facing business is freight, which you fund separately.
Speaker 3: But what metrics would guide a timeline to sell or
Speaker 3: spin off Uber Freight Darra Well.
Speaker 1: At this point, the focus for freight is to really
Speaker 1: operate the business in an optimal way. Right now, the
Speaker 1: freight brokerage business and the transportation business is readjusting pricing significantly.
Speaker 1: Prices were sky high two years ago. They have come
Speaker 1: down significantly for two years now, and I think what
Speaker 1: we're going to see is essentially pricing bottoming out sometime
Speaker 1: in the next couple of months. As we see that
Speaker 1: pricing bondoming out, then we can get in a position
Speaker 1: to grow our freight business use or digital acumen and
Speaker 1: the data advantage that we have in order to provide
Speaker 1: a better service for shippers and to be the best
Speaker 1: best platform for truckers out there. That's really the focus
Speaker 1: of freight right now. Ultimately, we will look to optimize,
Speaker 1: whether freight's inside of Uber or outside of Ubert, et cetera,
Speaker 1: to maximize shareholder value.
Speaker 9: That's what we're here for.
Speaker 1: But today the focus is on building the best digital
Speaker 1: freight business that we can.
Speaker 7: Tens of thousands of folks have been laid off across
Speaker 7: the tech industry, Dara. You've continued to say no company
Speaker 7: wide layoffs, but you have done some more targeted layoffs.
Speaker 7: You've done some performance related cuts. How are you thinking
Speaker 7: about headcount right now and are you considering potentially a
Speaker 7: broader riff if things continue to get worse, you know,
Speaker 7: looking across the broader landscape.
Speaker 1: Well, I just don't think that companies should all of
Speaker 1: a sudden get discipline about headcount because they have to.
Speaker 1: I think that you've got to have discipline on heackcount
Speaker 1: and cost as a continuing way that you operate going forward, daily, weekly, monthly, yearly,
Speaker 1: and you've seen that discipline for us. So if you
Speaker 1: look at our heaccaunt growth from call it twenty nineteen
Speaker 1: to where we are now for the base business, for
Speaker 1: our mobility and delivery business, total heacaut growth over that
Speaker 1: period is up about ten percent versus a bookings growth
Speaker 1: that is approaching seventy percent. So we have always been
Speaker 1: very disciplined in terms of how we manage costs. We
Speaker 1: talked about this year, even though we're showing huge top
Speaker 1: line growth and huge profitability growth, we're not letting go
Speaker 1: of that discipline, and we're saying that headcount is going
Speaker 1: to be flatted down. And I think that kind of
Speaker 1: discipline in the rhythm allows the company to focus on executing,
Speaker 1: on innovating, and not looking around, you know, over your
Speaker 1: shoulder as to whether you're going to be one of
Speaker 1: those people who's fired or not. So right now, the
Speaker 1: business is executing well. If we keep executing well, we're
Speaker 1: not going to have a riff. If we don't, then
Speaker 1: we're going to adjust, and we've always adjusted at Uber
Speaker 1: in a very timely way.
Speaker 7: All Right, you're listening to Uber CEO Dara kosra Shahi.
Speaker 7: You've seen so many economic cycles. Dara, you ran a
Speaker 7: travel company through nine to eleven, through the financial crisis.
Speaker 7: But look, you know, we just saw First Republic sell
Speaker 7: in a fire sale to JP Morgan. How are you
Speaker 7: thinking about what's ahead? What's your outlook and how long
Speaker 7: does this last?
Speaker 1: Yeah, I could not tell you how long this lasts,
Speaker 1: but I think as a company you've got to be prepared.
Speaker 1: I do think that the cost of capital for the
Speaker 1: banking system that tends to be a higher leverage, but
Speaker 1: for the startup ecosystem is getting much more dear. I
Speaker 1: don't think we are close to the end of that road.
Speaker 1: I think that rates are going to stay higher for
Speaker 1: long because despite people predicting recession and predicting recession, it's
Speaker 1: not there yet. So I think that companies across the board,
Speaker 1: whether you're a bank or you're technology company, you've got
Speaker 1: to be super conservative as it relates to your balance sheet.
Speaker 1: You've got to be incredibly disciplined in terms of capital allocation.
Speaker 1: And I think that environment is going to help the
Speaker 1: larger global players who are more diversified, and we are
Speaker 1: exactly that, and that's why we're showing higher than category
Speaker 1: growth and much stronger than category margin expansion and now
Speaker 1: significant pre cash flows as well. We think that's a
Speaker 1: great combination and we're prepared to deliver on that promise
Speaker 1: whether the environment's strong, medium or weak.
Speaker 3: Dara I went through the earnings transcript with a fine
Speaker 3: tooth comb no mention in the prepared remarks, But the
Speaker 3: first question was about AI. Are you going to accelerate
Speaker 3: your investments in AI? And are you an AI company?
Speaker 1: We have been in AI since I've been here the company.
Speaker 1: You think about our pricing algorithms, routing algorithms when we
Speaker 1: decide to let's say batch a delivery order or not.
Speaker 1: Even technologies such as recognition of your license or your
Speaker 1: insurance card, etc. All of these are AI driven and
Speaker 1: they have been a part of how we operate as
Speaker 1: a company. What we're seeing now is that as these
Speaker 1: models get more capable and larger, you can train them
Speaker 1: over much larger data sets. So we would have let's say,
Speaker 1: an AI algorithm that is pricing for city by city
Speaker 1: by city. Now our AI algorithms current priced globally and
Speaker 1: the efficacy in terms of pricing and matching is incredibly powerful.
Speaker 1: And because we have more data than anyone else across
Speaker 1: a multitude of businesses. We think AI is going to
Speaker 1: be a very very powerful tale one for.
Speaker 3: Us Derek Quick, yes or no? Are you a chat
Speaker 3: GPT user?
Speaker 1: I am a chat GPT users. I'm trying to get
Speaker 1: better at it. There's a I've got my skills as
Speaker 1: a prompt engineer or not what I want them to be?
Speaker 8: All right?
Speaker 3: Oh, thanks to the CEO Dara Koshra Shah and of
Speaker 3: course our own Emily chang back to you.
Speaker 2: Care what a great question to ask, like to leave
Speaker 2: it on ED. We thank you so much. It's time
Speaker 2: now for some talking tech. I'm going to stick with
Speaker 2: the theme of artificial intelligence. IBM, CEO of Vin Krishna
Speaker 2: says that technology is prompting Big Blue to stop or
Speaker 2: slow hiring for jobs it believes will be replaced.
Speaker 4: By artificial intelligence.
Speaker 2: That amounts, to get this, about thirty percent of its
Speaker 2: twenty six thousand workers in non customer facing roles.
Speaker 4: That's over just the next five years alone.
Speaker 2: As Samsung said this week, it would ban employees from
Speaker 2: using so called generitor AI tools such as chat gipt now.
Speaker 4: The company is concerned that data sent.
Speaker 2: To AI platforms could be stored on external servers, making
Speaker 2: it difficult to delete, putting it at risk disclosed to
Speaker 2: other users.
Speaker 3: Welcome back to Bloomberg Technology. I'm Ed Lovelow in San.
Speaker 2: Francisco and I'm Caroline Hied in New York.
Speaker 3: There's a huge discussion to have around artificial intelligence, and
Speaker 3: we welcome now our Bloomberg TV and radio audiences worldwide
Speaker 3: and bring in Apple co founder. Steve Wozniak, active in
Speaker 3: the field of artificial intelligence, added his name to the
Speaker 3: thousands of signatories of that open letter calling for a
Speaker 3: six month pause on training AI systems more powerful than
Speaker 3: GPT for the follow up to chat GPT, to give
Speaker 3: researchers time to get a better grasp on the technology. Steve,
Speaker 3: good morning and welcome.
Speaker 9: Thank you glad to be here.
Speaker 3: You're a signatory. Did that effort work?
Speaker 10: Effort work? Are we actually delaying the development of AI? No,
Speaker 10: you really can't delay the development of technology. And there
Speaker 10: are people that are motivated for various reasons, largely financial,
Speaker 10: that are you know, going to push it no matter what,
Speaker 10: not to say, oh, we're going to give up the effort.
Speaker 10: You know that we're on and the path we're on
Speaker 10: not really but new technology brings the pluses and the minuses,
Speaker 10: and we're seeing so many examples of that in the
Speaker 10: news in presentations that are being made about it. And
Speaker 10: when new technology brings big changes, sometimes it's be responsible,
Speaker 10: you know, think about both the pluses and the minuses,
Speaker 10: because I really fear, I believe more than anything else,
Speaker 10: the apex of everything that's good in the world is
Speaker 10: truth and.
Speaker 3: What is minus is Why did you sign that open
Speaker 3: letter and petition?
Speaker 10: Well, largely it was, you know what, I'm a human
Speaker 10: being and I'm more less influenced by what I can
Speaker 10: things I can read about does this and that example,
Speaker 10: but by people. Certain people that I trusted and the
Speaker 10: people I trusted were actually going in this direction, and
Speaker 10: I wanted to be a part of it.
Speaker 9: And I do believe just in responsibility.
Speaker 10: Not that I'm scared of the bad sides of AI,
Speaker 10: which there are plenty to be shown, or it's going
Speaker 10: to really be helpful for us, which it is, but
Speaker 10: it's just boy in new technology you should brings responsibilities.
Speaker 3: One of the co signatories was Elon Musk. Elon Musk
Speaker 3: then founded x ai and has been hiring in the
Speaker 3: field for his own AI startup. Following the petition, what
Speaker 3: do you make of that?
Speaker 9: I hope great comes from it.
Speaker 10: I hope that basically holding it back from being used
Speaker 10: by bad people or just doing bad things on its
Speaker 10: own because of the influence it gets one's training. I mean,
Speaker 10: you know, this hallucigenic and doesn't know what it's doing.
Speaker 10: I always think of dreams and a lot of the
Speaker 10: things that comes by there are dreams. They kind of
Speaker 10: make some sense, they could be partly real, But dreams,
Speaker 10: to me are schizophrenia. They talk about hallucinations coming out
Speaker 10: of AI schizophrenia. If you had dreams and you thought
Speaker 10: it was real, you experienced those things in life in
Speaker 10: real life, you didn't know it was a dream, That's
Speaker 10: what That's one possible explanation for schizophrenia. So I'm I'm
Speaker 10: just I don't know. I'm just on the side of
Speaker 10: truth with the the fact that the bad people in
Speaker 10: the world and ones that want to spam us and
Speaker 10: get our passwords and take over our lives, they've got
Speaker 10: a new tool, and how are they going to be
Speaker 10: able to use it? And how can you be skeptical
Speaker 10: when you don't even know if it's coming from AI?
Speaker 4: Steve, those users a phrase hallucinating. Many say we're making
Speaker 4: it more powerful.
Speaker 2: We're encouraging people to think that AI is going to
Speaker 2: be more terrifying because we keep making it out to
Speaker 2: be sort of human in this manner. Do we need
Speaker 2: to change our turn of phrase? Do we need to
Speaker 2: sort of understand that this, at the end of the
Speaker 2: day is still just technology.
Speaker 10: Oh no, it's taken us a little further in what
Speaker 10: we can do as humans. If I'm fed a lot
Speaker 10: of good source information from AI, and I'm a human
Speaker 10: editor and know how to use it and pass it on,
Speaker 10: oh it's given. It's a great tool in our lives.
Speaker 10: But with a lot of good. Look at the social
Speaker 10: network and the movie of Social Dilemma, and you know,
Speaker 10: a lot of good can bring a lot of also
Speaker 10: bad and being tracked and traced and spammed and de seated.
Speaker 10: What if we had developed the Internet with protocols in
Speaker 10: place that you could always identify anybody and that spam
Speaker 10: was almost impossible. What if we have that chance to
Speaker 10: sit back and think about AI a little before it's here.
Speaker 10: We don't really have the chance, But it's it's that
Speaker 10: sort of responsibility that I want to take the sight of.
Speaker 2: Steve wasn'tak of course, who is the Apple co founder
Speaker 2: for our radio audience and TV audiences, Steve. People have
Speaker 2: anticipated this coming, not just since November when CHATCHIBT sort
Speaker 2: of came into all of our consumer lives. But you've
Speaker 2: seen round corners when it comes to technology yourself. Why
Speaker 2: weren't you worrying about this a year ago? Why when
Speaker 2: wasn't it on chatchbt GBT version three that that started
Speaker 2: to make it all the more powerful? Why now start
Speaker 2: to go to the administration? Why now start to go
Speaker 2: to companies to self regulate?
Speaker 10: It's basically based on news cycles. Now good five years
Speaker 10: ago at least. I mean the book Singularity came out,
Speaker 10: and I was going around given speeches for about three
Speaker 10: years about how this new tech technology he was going
Speaker 10: to take over the intelligence and humans and really be
Speaker 10: you know, we'd have companies running with no humans at all.
Speaker 10: And I've backed off of that. You know, I got
Speaker 10: scared of that. For one thing comes out always negative. Okay,
Speaker 10: technology AI is going to take care of me, So
Speaker 10: I will have all my food and all my clothing
Speaker 10: and all my shelter, and my kids and my family
Speaker 10: and a lot of entertainment, and I'll just be like
Speaker 10: a family pet, totally taken care of. Sounds like a
Speaker 10: good thing. So if I'm going to be a pet someday,
Speaker 10: I thought about it, how do I want to be treated?
Speaker 10: So that's when I started feeding my dogs for lace
Speaker 10: steaks and rotor tessery chicken and stuff.
Speaker 9: No, it's honestly true. And this was a long time ago.
Speaker 9: For five years.
Speaker 10: It was a couple of years before I finally switched
Speaker 10: directions based on what one of my brilliant kids said
Speaker 10: to me. And you know what, all this great stuff
Speaker 10: and the world lets us do more as humans when
Speaker 10: we found it happily in those early days, one of
Speaker 10: my primary purposes was a person is only so capable.
Speaker 10: Give them the ability to use a computer and they
Speaker 10: can do more. They can be more in charge of
Speaker 10: where their life goes and be more capable. So I'm
Speaker 10: all for that, and I'm for change, but I'm also
Speaker 10: against things that we use dishonestly like that, like the
Speaker 10: woman who got a phone call and it was you know,
Speaker 10: deep fake. It was her daughter's voice, you know, pleading
Speaker 10: for money. And we you know, some of us have
Speaker 10: already been hit up in the past with ransomware attacks
Speaker 10: and all that.
Speaker 3: Steve I tweeted that you were coming on the show.
Speaker 3: A lot of questions from our audience. Thank you for
Speaker 3: sending those in Why do we not talk more about
Speaker 3: Apple and artificial intelligence?
Speaker 9: You know, I don't know there's a.
Speaker 10: I don't know what's going on side of Apple any
Speaker 10: more than anyone else. Apple may have some very deep
Speaker 10: programs going on artificial intelligence. Also, Apple is such a
Speaker 10: rich company that they kind of look around when there's
Speaker 10: something that may change the world that we're not developing,
Speaker 10: we can usually assimilate it. We can you know, acquire
Speaker 10: those those people that are doing that. And you know,
Speaker 10: I mean what Microsoft did with the open Ai.
Speaker 3: Who do you think leads the charge in that respect?
Speaker 3: Then you know, Microsoft pretty much put us on the
Speaker 3: map at the beginning of this year because of the
Speaker 3: investment additional into open ai, then the integration of open Ai.
Speaker 3: Do you see megacap companies leading the way?
Speaker 10: Oh, I don't try to pick a winner a loser.
Speaker 10: The next one round that could come out next week
Speaker 10: from somebody unknown, you know, and be sort.
Speaker 9: Of a leaser check.
Speaker 10: GPT from open ai is really what turned us on
Speaker 10: into it as people and you know what, companies and
Speaker 10: all that. They don't move ahead because of knowledge, move
Speaker 10: ahead because of motivation and emotions. And we should do this,
Speaker 10: We should do that. This will fit in with our
Speaker 10: life and our and our competitors and all that. And
Speaker 10: AI just comes from stuff that's already been published.
Speaker 9: They don't create.
Speaker 10: Creation is the way forward, and they don't really create
Speaker 10: new stuff. They just apply it, speak it very well,
Speaker 10: put it all together in a way that makes sense,
Speaker 10: and a human can use it to move forward and
Speaker 10: be creative and create new things.
Speaker 9: New products.
Speaker 10: Like when is an AI going to sit down and say, oh,
Speaker 10: what should I create next? That makes sense for the
Speaker 10: world of people, And it's always going to be in
Speaker 10: the end for people. You know, some people like to say,
Speaker 10: oh I will be ahead of us.
Speaker 9: Yeah.
Speaker 2: What then you've almost admitted at the very start of
Speaker 2: this conversation that it can't be bad.
Speaker 4: Get put back in its box.
Speaker 2: The signing of the letter sort of hasn't done anything
Speaker 2: to slow the rerection of travel and technology.
Speaker 4: Would you like to see regulation and is it self
Speaker 4: regulation or government regulation?
Speaker 9: Okay, Mira mccott or whatever.
Speaker 10: The CTO of Open AI and and Jeffrey what's the
Speaker 10: name that won the Touring Prize, the Nobel Prize and
Speaker 10: computers like both say yes, there should be regulation and
Speaker 10: we should be very cautious about what's common because you
Speaker 10: don't know how to handle such big change. I'm more
Speaker 10: worried than anything else about just like the spam and
Speaker 10: taking advantage of people points.
Speaker 9: Of view, the evil use of it. And I hope we.
Speaker 10: Brought attention to the fact that AI has some issues.
Speaker 10: And I would like to know everything I read did
Speaker 10: it come from AI? Then I can be skeptical. And
Speaker 10: you know, because I like sureness. I like to read something.
Speaker 10: Can I really believe this? I'm already, you know, old
Speaker 10: enough to be very skeptical.
Speaker 3: Anyway, Steve, before we lose you, what do you make
Speaker 3: of the Apple of twenty twenty three, the company that
Speaker 3: once you founded thirty years ago. How do you assess
Speaker 3: its health?
Speaker 10: Well, I don't assess business health. I usually look at products,
Speaker 10: and there's a product line from Apple is very good,
Speaker 10: it's well supported, it's maintained. But I also look at
Speaker 10: the people that run a company. And you know, Tim
Speaker 10: Cook especially has been a long time a favorite of
Speaker 10: mine because of his cares for diversity among clients and
Speaker 10: employees and partners.
Speaker 3: All right, Apple co founder Steve moresneak, thank you. Now
Speaker 3: coming up, Hollywood writers are a fish forming a picket
Speaker 3: line after weeks of negotiations with studios fell through. Next
Speaker 3: word more and what the writers are demanding and the
Speaker 3: role that generative AI plays in Hollywood.
Speaker 11: This is Bloomberg.
Speaker 2: In today's going viral, a bit of deja vu for
Speaker 2: those of us who are perhaps consumed television regularly in
Speaker 2: the late two thousands, remembers of the Writers' Guild of America.
Speaker 2: They're officially on strike again as of this morning. It's
Speaker 2: the first writer's strike in roughly about fifteen years. Bloomberg's
Speaker 2: Felix Jillette is joining us now for really the impact
Speaker 2: not only on the media companies, but more broadly, this
Speaker 2: is going to impact the economy of la Remind us
Speaker 2: why they're striking and why it's so much about streaming.
Speaker 12: Yeah, it all comes down to these changes in how
Speaker 12: people have been consuming television and how television is being
Speaker 12: made as we've switched from this traditional broadcast cable world
Speaker 12: to the new streaming world, and during that transition, a
Speaker 12: lot of the ways in which writers were compensated changed,
Speaker 12: and the writers are essentially saying all of the value
Speaker 12: that was in the traditional TV market, you know, has
Speaker 12: been stripped out and we're not being fairly compensated. And
Speaker 12: a lot of that comes down to things like how
Speaker 12: long seasons are in the streaming world. You know, typically
Speaker 12: streamers will make eight to ten episodes for a season
Speaker 12: of a show, as opposed to twenty in the broadcast world,
Speaker 12: So there's less writers working on a show, there are
Speaker 12: less seasons typically made. All of that means less money
Speaker 12: to the writers. You know, residuals that were you know, people,
Speaker 12: if you had a successful show in the broadcast world,
Speaker 12: you could live off your residuals for the rest of
Speaker 12: your life. Streaming, all of that has been pretty much
Speaker 12: stripped out.
Speaker 3: Felix artificial intelligence was did among the concerns and demands.
Speaker 3: They're not against using chat GPT full stop. There are
Speaker 3: just some parameters that they want to set.
Speaker 12: What are they I think the issue is they don't
Speaker 12: want residuals going to people who created you know, generative
Speaker 12: AI to create scripts, and they want some you know,
Speaker 12: control about how that technology is being employed in the
Speaker 12: writer's room. I think a lot of that, again just
Speaker 12: comes down to how many writers are working on these shows,
Speaker 12: how much time they're getting, how the money is carved up.
Speaker 12: I think that's one of the concerns that's a little
Speaker 12: bit further out in the future, but definitely on everybody's
Speaker 12: mind right now. I think a lot of it is more,
Speaker 12: you know, sort of prosaic concerns, like, you know, how
Speaker 12: many writers are minimum, you know, for a show that's
Speaker 12: a pre development, what's the minimum for the number of
Speaker 12: writers on the show that's in development that's been green lid.
Speaker 12: So those are the issues they're really fighting back and forth.
Speaker 3: On Felix to let Bloomberg News, thank you so much. Now,
Speaker 3: coming up, we're going to return to the volatility in
Speaker 3: the banking system and speak to the CEO of Sofi,
Speaker 3: Anthony Noto. That's next. This is Bloomberg.
Speaker 2: Look, we're still all thinking about the banking terminal. It
Speaker 2: continues today, in particular after the First Republic seizure as
Speaker 2: regional banks they're taking a hit in terms of stock price.
Speaker 2: We want to talk about well the ecosystem of finance,
Speaker 2: but also some micro news. The CEO of online lender
Speaker 2: Sofi Anthony noto. He's here, of course. The company just
Speaker 2: announcing it's partnering with Expedia to bring exclusive travel benefits
Speaker 2: to its customers. You're thinking about how to set yourself
Speaker 2: apart from other online lenders, Anthony, But first and foremost,
Speaker 2: I've got to get your take. What do you make
Speaker 2: of the financial stability in the US at the moment,
Speaker 2: the worry over regional lenders.
Speaker 13: Yeah, I'd say what's happening is on the back of
Speaker 13: the challenges at Silicon Valley Bank and First Republic, consumers
Speaker 13: are really you know, it's a movement to quality, it's
Speaker 13: a movement to trust. They want to go places that
Speaker 13: they can trust the brand, trust the company.
Speaker 8: You know.
Speaker 13: One of the things that we've seen at SOFAR is
Speaker 13: that our members trust us greatly, not just just with
Speaker 13: their checking in savings needs, but their needs more broadly,
Speaker 13: was their credit card or their brokerage account, or buying
Speaker 13: a home, or paying for college education or refinancing. We
Speaker 13: just posted our eighth consecutive quarter of revenue in yesterday
Speaker 13: with forty six percent year of year growth four and
Speaker 13: sixty million dollars of revenue. Those eight consecutive quarters of
Speaker 13: record revenue performance reflect the trust and reliability that we're
Speaker 13: delivering for our members. That said, we've also continued to
Speaker 13: increase the benefit that they have. We now provide two
Speaker 13: million dollars of FDIC insurance through a partnership, so that
Speaker 13: not only are we providing trust, but we want to
Speaker 13: continue to increase their liability and the confidence that people have,
Speaker 13: and that's what's leading to such our strong results across
Speaker 13: the board, both in revenue and EBADOD growth, as well
Speaker 13: as positive margins.
Speaker 2: Anthony, they're worried about your forward looking guidance on EBITDA
Speaker 2: growth and is that competition in any way because you
Speaker 2: have a banking license, but a lot of the other
Speaker 2: online lenders neo banks are doing well with just banking partnerships.
Speaker 2: What do you make of the space you've made for
Speaker 2: so far when the market is worried or maybe it's
Speaker 2: just profit taking.
Speaker 13: We raised our outlook. Actually we increased our revenue guidance
Speaker 13: for the year. We also increased our EBADAD guidance for
Speaker 13: the year and reinforced our view that will be gap
Speaker 13: profitable by the fourth quarter. Our bank, which is a
Speaker 13: subset of our overall company, is already gap profitable and
Speaker 13: We had really strong margins there of twenty percent, really
Speaker 13: strong return on tangible equity of over twenty percent. As well,
Speaker 13: the outperformance that we had in Q one on revenue,
Speaker 13: we passed through and raised it for the full year.
Speaker 8: We also raised ibadah. We have a lot of leverage
Speaker 8: in the business.
Speaker 13: Our incremental margins, which is the change in revenue that
Speaker 13: drops to the bottom line, was forty plus percent for
Speaker 13: net income on a gap basis.
Speaker 8: And it was also they.
Speaker 4: All worried about your EBITDT.
Speaker 8: Yeah, it's growing quite dramatically.
Speaker 13: We had sixteen percent ebida margins in the quarter, up
Speaker 13: from six percent a year ago, and our ebadah is
Speaker 13: now greater than our stock based compensation for the first time.
Speaker 13: And we're on the track to be gap profit by
Speaker 13: the fourth quarter and generate really strong returns.
Speaker 3: And today let's go back to the travel news. Is
Speaker 3: this you trying to win business from American Express in
Speaker 3: the Chase card business.
Speaker 10: Yeah.
Speaker 13: Our value proposition is that we want to be there
Speaker 13: for every one of the major fincial decisions in your
Speaker 13: life and all the decisions in between every day. So
Speaker 13: we want to help people get their money right by
Speaker 13: helping them borrow better, save better, invest better, protect, and
Speaker 13: spend better. So this is our first foray into helping
Speaker 13: people spend better outside of just finding will services products.
Speaker 8: So we launched.
Speaker 13: Sofi Travel with e Speed to give our members great
Speaker 13: value in their travel choices, great selection, great ease of use,
Speaker 13: and most importantly, great prices, prices that are even better
Speaker 13: when they pay with SOFAR and they use their reward
Speaker 13: points and they actually generate reward points with us, so
Speaker 13: we're providing what they could typically get someplace else at
Speaker 13: an even better price, so they're spending better with us.
Speaker 13: We'll look to do this in other categories like entertainment
Speaker 13: and other types of things like sporting events, etc. That
Speaker 13: are high ticket purchases, to give them a better way
Speaker 13: to buy with a better currency of our reward points
Speaker 13: and our partners that are providing discounted inventory.
Speaker 3: And Toony Bloomberg is tracking closely the litigation against the
Speaker 3: Biden administration's decision to pause the student loan program. I
Speaker 3: know that has had some financial impact to you. What's
Speaker 3: the latest there.
Speaker 13: What's really happening is in the courts and not we
Speaker 13: can't really comment much on it, but it will go
Speaker 13: through the typical process of the course, with different filings
Speaker 13: and different motions.
Speaker 8: We think it's the right thing to do for our country.
Speaker 13: It obviously is something that would benefit so Far as
Speaker 13: a business as well, but I actually think it's the
Speaker 13: right thing to do for the student loan program. College
Speaker 13: is not going to be free, whether student loans are forgiven,
Speaker 13: and we're supportive of targeted forgiveness of student loans or not.
Speaker 8: People that are going to.
Speaker 13: College today still have to pay significant amount of tuition
Speaker 13: and they're going to need financing. SOFI is one of
Speaker 13: the companies that can provide that. But there's a number
Speaker 13: of companies in the ecosystem that haven't been able to
Speaker 13: withstand what's happened over the last three years, and they've
Speaker 13: dropped out in helping people.
Speaker 8: Pay for their college or refinance the college.
Speaker 13: As I mentioned, we've had eight record quarters a revenue
Speaker 13: in a row, three record quarters of EVA Dana Row
Speaker 13: our bank is profitable and driving great returns. That said,
Speaker 13: we'd be doing even better if we could provide our
Speaker 13: members with the right types of services to pay for
Speaker 13: their college education or to refinance it. And what the
Speaker 13: administration has done is put that on hold without a
Speaker 13: necessary amount of spending about five billion dollars a month
Speaker 13: that could be better used on people that need it
Speaker 13: and that are in despair, which is where it should
Speaker 13: be as opposed to those that can.
Speaker 2: Pay Anthony thirty seconds. No more is it worth a
Speaker 2: pr hit because people say you're just profiteering.
Speaker 13: Doing the right thing the harder rate or the easier
Speaker 13: wrong is always the way we're going to go, even
Speaker 13: though it may be viewed and scrutinized. It's the right
Speaker 13: thing that we needed to do for our company and
Speaker 13: what we think is the right thing for our country.
Speaker 3: So Fi CEO, Anthony Noso, thank you so much for
Speaker 3: your time.
Speaker 8: Thank you Grey.
Speaker 3: That does it for this edition of Bloomberg Technology.
Speaker 2: Caroline, Yeah, You've got so much to catch up on
Speaker 2: throughout this week.
Speaker 4: Every day. Remember you can just go and do that.
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Speaker 8: Would sip would be a fit and you did a
Speaker 8: bit ap