Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hide.
Speaker 2: And Ed Lovelove, Iurmed Ludlow Here in San Francisco, Caroline
Speaker 2: hides off today. This is Bloomberg Technology coming up on
Speaker 2: the program. Robotaxis get a big win in San Francisco,
Speaker 2: Crucio Carl Vote joins me live on set as regulators
Speaker 2: votes to allow his company and Google's Weimo to truly
Speaker 2: commercialize their tech here in SF and a Bloomberg exclusive,
Speaker 2: a government probe into malicious attacks on cloud computing, including
Speaker 2: Microsoft's role in suspected Chinese hacking of government officials. We
Speaker 2: have the details, and the aviation sector is about to
Speaker 2: hand passengers a five trillion dollar bill to fight its
Speaker 2: next big threat, decarbonization. We have the Bloomberg Big Big
Speaker 2: take all right, straight to our top story.
Speaker 3: San Franciscan's get ready because you're.
Speaker 2: About to see even more robotaxis on the streets. California
Speaker 2: regulators just voted in favor of Waymo and Cruz expanding
Speaker 2: their paid driverless services in the city.
Speaker 3: It's a major.
Speaker 2: Milestone towards commercializing the technology. The ruling came after hours
Speaker 2: of public testimony with citizens arguing for and against the
Speaker 2: expansion of the Robotaxi company's services.
Speaker 3: The two companies can.
Speaker 2: Now run full truly driverless commercial services, charging faares day
Speaker 2: and night here in San Francisco.
Speaker 3: The CEO of Cruz, Kyle Vote, joins me.
Speaker 2: Now, Kyle, welcome to Bloomberg Technology. Thanks d How do
Speaker 2: you operationalize this? Let's get right to it. It's gone
Speaker 2: in your favor. What happens next?
Speaker 3: What do you do well?
Speaker 4: So it's a big year of scaling for us.
Speaker 5: So over the past several months we've ramped up our
Speaker 5: operations in a very measured and careful way as we
Speaker 5: see the performance of these abs improve on the road.
Speaker 5: And so the big difference with yesterday's permit, which is
Speaker 5: the sixth one we've got in California, the final one
Speaker 5: needed to commercialize our services. We can convert that service
Speaker 5: from a pre service to a fared service. And so
Speaker 5: it's a big milestone for not just us, but the
Speaker 5: av industry, and I think a signal for you know,
Speaker 5: California that we are going to prioritize progress versus accepting
Speaker 5: the tragedy of the status quo on our roads today?
Speaker 2: How strong is the signal? I tweeted or xed that
Speaker 2: you're coming on the program. And actually, a really fair
Speaker 2: question I got in response was why did the CPUC
Speaker 2: just do San Francisco. Why not say to cruise or
Speaker 2: weai moo have at it in Los Angeles, Sacramento, any
Speaker 2: other city in the state.
Speaker 4: That was actually at our direction.
Speaker 5: What we've been working with regulators, you know, like I said,
Speaker 5: for years now, and the very first time we went
Speaker 5: to the CPUC for FARED service, it was for a
Speaker 5: small region of San Francisco, a limited number of cars,
Speaker 5: so we could you know, work with regulators and show
Speaker 5: them that this technology was ready. And so this is
Speaker 5: actually the second time we've gone for a farired permit,
Speaker 5: and this is an expansion of that original permit, and
Speaker 5: we'll do the same later this year or perhaps next
Speaker 5: year when we expand into California and other cities in
Speaker 5: the states.
Speaker 2: So why is San Francisco, Why is this the place
Speaker 2: to not just test the technology but commercialize the business.
Speaker 5: Well, you know, candidate, like, we're based here in San Francisco,
Speaker 5: so this is our home territory. But we see San
Speaker 5: Francisco as a litmus test for the commercialization of robosaxies.
Speaker 5: If they work in a city like San Francisco, where
Speaker 5: we have high population density, you know, steep hills, heavy fog,
Speaker 5: a lot of a lot of tricky construction and other things,
Speaker 5: then that means it can work in many other cities
Speaker 5: across similar cities across the US. And of course, you know,
Speaker 5: from a business standpoint, these are the early days of
Speaker 5: the technology.
Speaker 4: These vehicles.
Speaker 5: The first version is always more expensive than later ones,
Speaker 5: and we want to start in cities where there's a
Speaker 5: high willingness to pay. So we'll see us start in
Speaker 5: some of the major cities before we work out into
Speaker 5: into some of the other cities.
Speaker 3: What about money in your pocket now?
Speaker 2: You know, I know the weight list is in the
Speaker 2: tens of thousands, so you are able to charge a
Speaker 2: fair you on board the weight list? Does that bring
Speaker 2: in sort of meaningful revenue for you guys, Because I'm
Speaker 2: going to get into the history of your company a second,
Speaker 2: but I am interested in how quick the impact of
Speaker 2: being able to charge a fair is.
Speaker 3: Well.
Speaker 5: You know, you know today we're still operating in relatively
Speaker 5: small scale. You know, it's gonna we have on the
Speaker 5: awer of hundreds of vehicles, but up from you know,
Speaker 5: fifty or so a year ago, and you're gonna see
Speaker 5: that move into the thousands, you know, not not right away,
Speaker 5: but over time, you know, across several cities that we're
Speaker 5: operating in. But you know, the rate of expansion has
Speaker 5: been pretty impressive. And this is not because we're going
Speaker 5: you know, just going wild here. It's actually because the
Speaker 5: av system itself is improving so quickly. That's one of
Speaker 5: the most the remarkable things about AVIS compared to human
Speaker 5: drivers is they can keep getting better over time and
Speaker 5: even exponentially. And so even just a couple of weeks
Speaker 5: ago on the and Earning scoll I said, we were
Speaker 5: at about ten thousand rides per week. This last week
Speaker 5: it was fifteen thousand. So we're seeing demand that's off
Speaker 5: the charts, and I think that's going to lead to
Speaker 5: you know, continued expansion in the near term.
Speaker 2: You know, I talked about the history last night on
Speaker 2: Bloombog Television. We aired an episode of the Circuit with
Speaker 2: Emily Chang and she's sawing a Gary Tan about why Combinator.
Speaker 2: You guys were why Combinator Class of Winter twenty fourteen.
Speaker 4: I think that's right.
Speaker 3: Nine years it's taking you to get to this point.
Speaker 2: Is that fast progress or is that frustratingly slow progress.
Speaker 5: Well, you know, building a car that can operate, you know,
Speaker 5: better in many ways than a human driver is one
Speaker 5: of the ultimate AI challenges and there's no shortcuts. And so,
Speaker 5: you know, the first eight years of this tenure journey
Speaker 5: was a grind. It's continuous improvement, improving the software to
Speaker 5: the point we saw compelling evidence that this is going
Speaker 5: to have a positive impact on road safety.
Speaker 4: And so, unlike you know, other.
Speaker 5: AI products, where you can launch a product out there
Speaker 5: in the public as soon as it's kind of working,
Speaker 5: in our case, that technology really had to be matured
Speaker 5: and mid robust before we put it out there on
Speaker 5: the roads.
Speaker 4: And so it has been a ten year journey.
Speaker 5: But we're really happy now that we're finally able to
Speaker 5: put this out there and people are able to use
Speaker 5: it and we're going to see you know, benefits and
Speaker 5: road safety as a result.
Speaker 2: Okay, so we're going to look at some pictures of
Speaker 2: what are retrofitted customized Chevy Bolts driving around San Francisco.
Speaker 2: It's also the case in other states like Arizona, Texas. Right,
Speaker 2: A question I constantly get is why no New York City,
Speaker 2: but also no China because there are Chinese players the
Speaker 2: test in the Bay Area and in Chinese cities.
Speaker 3: Could you answer those two please?
Speaker 5: For New York in other cities, it's not a question
Speaker 5: of if, but when. And you know this, this technology,
Speaker 5: the way we've deployed is we make it work in
Speaker 5: a defined environment and so in San Francisco you've got
Speaker 5: fog and seapills, but you don't have you know, ice
Speaker 5: or snow, and so that'll come and then the next
Speaker 5: couple of years, and once we add that capability, we'll
Speaker 5: be able to expand into some of the colder weather cities.
Speaker 5: But that's not slowing our expansion today. I mean a
Speaker 5: year ago we were at in one city, just operating
Speaker 5: in San Francisco. As of today, we've announced seven or
Speaker 5: eight eight cities that will be in eminently and so
Speaker 5: you're going to see that rapid expansion, probably in the
Speaker 5: Sun Belt, in the areas where the capabilities are a
Speaker 5: match to what we see in those cities.
Speaker 2: Let's talk about the future from the technology perspective and origin.
Speaker 2: So right now, these are retrofitted or customized Chevy Bolts.
Speaker 2: But you are designing and we're showing it right now.
Speaker 2: A purpose built steering wheel lists seats inward facing shuttle. Okay,
Speaker 2: where are we with that product?
Speaker 5: Engineering is complete, you know, we're on the verge of
Speaker 5: going into production. We expect some announcements on that in
Speaker 5: the next few weeks. But the exciting thing about this
Speaker 5: vehicle is it's the first time a car has been
Speaker 5: built from the ground up for this robotaxi purpose. So
Speaker 5: it lasts a lot longer than a regular car. It's
Speaker 5: designed to be optimal for pool rides, so multiple people
Speaker 5: sharing a vehicle because there's lots of space between them,
Speaker 5: and the cost of it will be substantially lower than
Speaker 5: the first generation of the technology. So I think the
Speaker 5: cars on the road today feel like a car where
Speaker 5: you've just removed the driver, you still see the steering
Speaker 5: wheel moving around. The Origin feels like what a what
Speaker 5: a driverless vehicle was meant to be, and that experience
Speaker 5: that I think we've all perhaps been fantasizing about for years.
Speaker 2: Can you just explain in simple terms how when production
Speaker 2: starts you will deploy to the real world the Origin
Speaker 2: against your existing infrastructure.
Speaker 5: Yeah, so we've already been testing the Origin and again,
Speaker 5: this car has no steering wheel, so without you know,
Speaker 5: any safety driver or anyone behind the wheel in multiple cities.
Speaker 5: And as it goes into production, you'll see us start
Speaker 5: deploying those vehicles, you know, again in a gradual and
Speaker 5: measured way across the existing you know, seven or eight
Speaker 5: cities that we've announced, and then ramp up, you know,
Speaker 5: the number of those vehicles each cities as we ramp
Speaker 5: our production.
Speaker 2: There is a fierce, fierce battle for talent right now,
Speaker 2: broadly in the theater of artificial intelligence, but you know,
Speaker 2: machine learning or neural networks is a big part of
Speaker 2: what you guys do as well. What are your biggest
Speaker 2: challenges right now from a cash perspective, from a talent
Speaker 2: perspective that you've got left to tackle in twenty twenty three.
Speaker 5: Well, we're very fortunate to have, you know, robust support
Speaker 5: from General Motors that you know, Mary and her team
Speaker 5: see this is you know, a key part of GM's future.
Speaker 5: And so when we talk to candidates, we talk to
Speaker 5: AI talent, they'd like to see that strong backing. But
Speaker 5: also for many people there are a lot of AI
Speaker 5: opportunities out there that are fun or interesting problems, but
Speaker 5: many of them still feel like toys. When you work
Speaker 5: on a self driving car that is having a real
Speaker 5: impact affecting road safety today, and it's one of the
Speaker 5: best ways.
Speaker 4: That an AI engineer can spend their time in my opinion.
Speaker 2: All Right, Kyle Vote, CEO of Cruise, a pretty big
Speaker 2: moment for robotaxi or driver list technology. Here in SF,
Speaker 2: a US Cybersecurity Advisory Panel will investigate malicious targeting of
Speaker 2: cloud computing environments, including Microsoft's role in a recent breach
Speaker 2: of government officials email accounts by suspected Chinese hackers that
Speaker 2: according to the Department of Homeland Security. It also confirms
Speaker 2: a report from Bloomberg News. Let's bring in our cybersecurity
Speaker 2: editor who's been on this story, Andrew Martin. Andrew helped
Speaker 2: me understand the basics here what is being looked at.
Speaker 6: So the Biden administration created this cyber safety review panel
Speaker 6: to look at major cybersecurity events after the fact to
Speaker 6: try to figure out ways to prevent it from happening
Speaker 6: in the future. And what they did here is following
Speaker 6: a hack that was revealed in July that included a
Speaker 6: bunch of US government email accounts, including Comerace Secretary Gina Romando.
Speaker 6: They decided to look broadly at malicious attacks on cloud
Speaker 6: security environment and also at a specific hack by suspected
Speaker 6: Chinese hackers that got access to these email accounts.
Speaker 2: Okay, let's go to Microsoft in their role in this story.
Speaker 2: What have we learned about? What investigators are looking at
Speaker 2: Microsoft's role in all this?
Speaker 1: So what happened in this latest hack is that.
Speaker 6: Is that these suspected Chinese hackers got what's known as
Speaker 6: sort of an encryption key that allowed them to generate
Speaker 6: authentication tokens, which basically allow allow them to.
Speaker 1: Act as legitimate users.
Speaker 6: In these systems and get access to email accounts. And
Speaker 6: Senator Ron Wyden has wrote a letter last month asking
Speaker 6: for US officials to investigate Microsoft's.
Speaker 1: Role in this.
Speaker 6: He accused them of negligent cybersecurity predices.
Speaker 1: He also noted that Microsoft's products were.
Speaker 6: Involved in the solar wind tech from a couple of
Speaker 6: years ago. So he has broadly for an investigation of Microsoft.
Speaker 1: This is this Cyber Safety.
Speaker 6: Review Panel is looking more broadly at not just Microsoft,
Speaker 6: but all cloud providers.
Speaker 2: I think it's important that we kind of think about
Speaker 2: what the agencies are saying. We have a statement from
Speaker 2: the Secretary for Homeland Security, Alejandro Mayorcus who says organizations
Speaker 2: of all kinds are increasingly reliant on cloud computing to
Speaker 2: deliver services to the American people, which makes it imperative
Speaker 2: that we understand the vulnerabilities of that technology. Do we
Speaker 2: have a sense that they understand the vulnerabilities now, Andrew, No,
Speaker 2: I think that's.
Speaker 6: We're gonna They're going to try to figure out. You know,
Speaker 6: cloud obviously has grown very rapidly in the last couple
Speaker 6: of years. There has been a couple major attacks that
Speaker 6: have exploited vulnerabilities in the cloud. So I think it
Speaker 6: makes sense a sort of step back and try to
Speaker 6: figure this out.
Speaker 2: The thing that is interesting here is who in DC
Speaker 2: looks at this stuff at any given moment. You know,
Speaker 2: when you think about the departments investigating and probing, it's
Speaker 2: a digital issue rather than I guess the national security issue.
Speaker 2: Can you can you explain to us who has jurisdiction here?
Speaker 7: Yes?
Speaker 1: So, yes.
Speaker 6: So there's an agency called the cyber Security and Infrastructure
Speaker 6: Security Agency, which oversees sort of the defense of US
Speaker 6: computer networks, so they provide a sort of protection against
Speaker 6: the tax and intelligence to help for people who work
Speaker 6: in those agencies.
Speaker 1: Protect against the tax. The Cyber Safety.
Speaker 6: Review Board is overseen by them their advisory in nature,
Speaker 6: and again the purpose of them is not some much
Speaker 6: to remend at tax, but to sort of after the
Speaker 6: fact go back and say, Okay, here's what went wrong.
Speaker 1: In this case, what can we do better in the
Speaker 1: next time.
Speaker 6: They've previously looked at log forge, which was the software
Speaker 6: vulnerability that.
Speaker 1: In open source software.
Speaker 6: And they also looked at this hacking group called lapses,
Speaker 6: which it hacked a bunch of technology companies that come
Speaker 6: up with reports sort of recommending ways to prevent against
Speaker 6: the tax.
Speaker 2: Against that nature, all right, thanks to Bloomberg Cybersecurity editor
Speaker 2: Andrew Martin, and again that story confirming a previous Bloomberg report.
Speaker 2: Now coming up here on Bloomberg Technology, the cost.
Speaker 3: Of flying green.
Speaker 2: Why some airlines are planning to charge passengers for more
Speaker 2: for flights in order to reduce their carbon emissions. It
Speaker 2: is a big number big. We'll have the details next.
Speaker 2: This is Bloomberg Technology.
Speaker 8: The designated members of each House of Congress of the
Speaker 8: appointment in February twenty eighteen, after being nominated by the
Speaker 8: former president and confirmed by the Senate, mister Weiss was
Speaker 8: sworn in as the United States Attorney for the District
Speaker 8: of Delaware. Mister Weiss had been a career prosecutor, having
Speaker 8: served previously in the office for more than a decade.
Speaker 8: Beginning in twenty nineteen, mister Weiss, in his capacity as
Speaker 8: US Attorney and along with federal law enforcement partners, began
Speaker 8: investigating allegations of certain criminal conduct by, among others, Robert
Speaker 8: Hunter Biden. That investigation has been recently referenced in federal
Speaker 8: criminal proceedings in the District of Delaware, and as noted
Speaker 8: in those proceedings and other public statements by mister Weiss's office,
Speaker 8: that investigation remains ongoing. In February twenty twenty one, US
Speaker 8: Attorney Weiss was asked to remain as US Attorney for
Speaker 8: the District of Delaware and in that capacity to continue
Speaker 8: to lead the investigation. As I said before, mister Weiss
Speaker 8: would be permitted to continue his investigation, take any investigative
Speaker 8: steps he wanted, and make the decision whether to prosecute
Speaker 8: in any district. Mister Weiss has told Congress that he
Speaker 8: has been granted ultimate authority over this matter, including the
Speaker 8: responsibility for deciding where, when, and whether to file charges,
Speaker 8: and for making decisions necessary to preserve the integrity of
Speaker 8: any prosecution consistent with federal law, the principles of federal prosecution,
Speaker 8: and departmental policies. In a July twenty twenty three letter
Speaker 8: to Congress, mister Weiss said that he had not to
Speaker 8: that point requested special Council designation. On Tuesday of this week,
Speaker 8: mister Weiss advised me that, in his judgment, his investigation
Speaker 8: had stage at which he should continue his work as
Speaker 8: a Special Council, and he asked to be so appointed.
Speaker 8: Upon considering his request, as well as the extraordinary circumstances
Speaker 8: relating to this matter, I have concluded that it is
Speaker 8: in the public interest to appoint him as Special Council
Speaker 8: commitment to provide mister Weiss all the resources he requests.
Speaker 8: It also reaffirms that mister Weiss has the authority he
Speaker 8: needs to conduct a thorough investigation and to continue to
Speaker 8: take the steps he deems appropriate independently based only on
Speaker 8: the facts and the law. Mister Weiss will also continue
Speaker 8: to serve as US Attorney for the District of Delaware
Speaker 8: a Special Council, he will continue to have the authority
Speaker 8: and responsibility that he has previously exercised to oversee the
Speaker 8: investigation and decide where, when, and whether to file charges.
Speaker 8: The Special Council will not be subject to the day
Speaker 8: to day supervision of any official of the Department, but
Speaker 8: he must comply with the regulations, procedures, and policies of
Speaker 8: the Department consistent with the Special Council regulations. At the
Speaker 8: conclusion of mister Weiss's work, he will provide me with
Speaker 8: a report explaining the prosecution or declination decisions reached by him.
Speaker 8: As with each Special Council who has served since I
Speaker 8: have taken office, I am committed to making as much
Speaker 8: of his report public as possible, consistent with legal requirements
Speaker 8: and Department policy. Today's announcement affords the prosecutors, agents, and
Speaker 8: analysts working on this matter the ability to proceed with
Speaker 8: their work expeditiously and to make decisions indisputably guided only
Speaker 8: by the facts and the law. The men and women
Speaker 8: undertaking this investigation are public servants who have dedicated their
Speaker 8: careers to protecting the citizens of this country. The appointment
Speaker 8: of mister Weiss reinforces for the American people. The Department's
Speaker 8: committed meant to both independence and accountability in particularly sensitive matters.
Speaker 8: I am confident that mister Weiss will carry out his
Speaker 8: responsibility in an even handed and urgent manner and in
Speaker 8: accordance with the highest traditions of this department. Thank you.
Speaker 1: If you was the joernal of Weiss, had the authorities needed.
Speaker 3: You need to be a polution.
Speaker 2: That was US Attorney General Garland speaking there the news
Speaker 2: the Hunter Biden probe has been assigned a special council
Speaker 2: by the Department of Justice. That special council the current
Speaker 2: head of the probe David Weiss, who will be the
Speaker 2: special council on the Hunter Biden probe. Let's head over
Speaker 2: to Washington. Webloon both Katie Lions has more Kayley.
Speaker 9: Well and as we just heard from the Attorney General,
Speaker 9: David Weiss, the US District Attorney in Delaware since twenty
Speaker 9: nine ten, has already been looking into criminal investigations against
Speaker 9: Hunter Biden. Of course, President Joe Biden's son. He has
Speaker 9: now been granted Special Council authority and under which, according
Speaker 9: to Merrick Garland, the Attorney General. He will have full independence,
Speaker 9: he will not be overseen on a day to day
Speaker 9: basis by the Department of Justice as he continues this investigation.
Speaker 9: It's important to note here earlier this summer, mister Weiss,
Speaker 9: the district attorney there, was involved in that initial plea
Speaker 9: agreement with Hunter Biden, where he was supposed to plead
Speaker 9: guilty to two misdemeanor tax charges and in return could
Speaker 9: have avoided prosecution on a separate gun related charge. That
Speaker 9: plea deal had fallen apart in court. That is not
Speaker 9: a completely resolved matter, and now going forward, mister Weiss
Speaker 9: will have this special Council designated authority in the probe
Speaker 9: of the President's son. It's important to keep in mind
Speaker 9: here as well that a special counsel being appointed is
Speaker 9: something that Republicans have been calling for for some time now,
Speaker 9: and of course in Congress there are other separate, ongoing
Speaker 9: investigations into the dealings, not just of Hunter Biden, but
Speaker 9: how the President himself may have been involved. There was
Speaker 9: a hearing just recently with Debon Archer, hunter Biden's former
Speaker 9: business partner, before the House Oversight Committee, talking about phone
Speaker 9: calls that the President may have been on with Hunter
Speaker 9: simultaneously with business associates. So Congress is doing work here
Speaker 9: and now again a special counsel, Mister Weiss, the District
Speaker 9: attorney in Delaware, has also been given that special council designation.
Speaker 2: All right, Bloombers k Lines in DC, thank you the
Speaker 2: news that David Weiss, the current head of the Hunter
Speaker 2: Biden probe, has been assigned as the special council by
Speaker 2: the Department of Justice.
Speaker 3: Welcome back to Bloomber Technology.
Speaker 2: Ed Ludlow here in San Francisco, remainder Caroline Hyde is off.
Speaker 3: I want to get a quick check on the markets.
Speaker 2: And kind of how we ended the week and as
Speaker 2: that one hundred over five days down again one point
Speaker 2: seven percent as it stands, second consecutive weekly decline and
Speaker 2: it's easy to forget, but this is the first back
Speaker 2: to back weekly declines we've had on the Tech Heavy
Speaker 2: index since December when we had four straight weeks of declines.
Speaker 2: Earning season has been a really big part of the story.
Speaker 2: But remember the USCPI print as well being a factor
Speaker 2: markets trying to understand what the Fed might do next.
Speaker 2: Remember higher rates impact the present value of future cash flows.
Speaker 3: There's a lot.
Speaker 2: Going on, But it is interesting to note back to
Speaker 2: back weekly declines on the Nazak one hundred. We always
Speaker 2: go to that index because it's so tech heavy from
Speaker 2: the megacap perspective, which is a drag in Friday session
Speaker 2: right through to higher multiple software names. One name we're
Speaker 2: looking at in particular Alphabet, parent of Google. It's lower
Speaker 2: during Friday session, but on a weekly basis has actually
Speaker 2: fared a little bit better. What I want to talk
Speaker 2: about next is Alphabet's big old pile of cash. The
Speaker 2: Google parent generated nearly twenty nine billion dollars in cash
Speaker 2: in the second quarter after cutting thousands of jobs and
Speaker 2: its efforts to staunch losses in its various moonshot projects.
Speaker 2: But the Google parent now has about one hundred and
Speaker 2: eighteen billion dollars in cash and short term market world securities,
Speaker 2: more than any other company on the Nazak one hundred.
Speaker 3: Apart from Apple.
Speaker 2: But unlike Apple, which aims to give back most of
Speaker 2: its cash to shareholders, Alphabet does not have a well
Speaker 2: defined capital return strategy. So investors really right now seeking
Speaker 2: more details on its plans, and we'll ask we'll try
Speaker 2: to get those answers for you now from.
Speaker 3: Big tech to little tech.
Speaker 2: We know Google's going big on AI, as is Microsoft
Speaker 2: are the big names, but it isn't just about the
Speaker 2: megacaps or the giants. Take mid Journey as an example.
Speaker 2: It's an independent research lab that's been experimenting with AI
Speaker 2: and can generate images using AI. It's the subject of
Speaker 2: today's Bloomberg Tech Daily newsletter, and its author, Bloomberg's Davily
Speaker 2: Album joins me. Now this is interesting, Like you and
Speaker 2: I interact with so many of the AI companies that
Speaker 2: are developing a generative AI tool. We interact with their apps,
Speaker 2: their technology. Why you've been writing about about this particular
Speaker 2: name in the newsletter.
Speaker 7: Yeah, hey, Ed, it's good to be here. You know,
Speaker 7: I think that mid Journey, which you know has been
Speaker 7: floating around the name if you recall that viral image
Speaker 7: of the Pope and a puffer jacket that was actually
Speaker 7: created by mid Journey. It's one of the biggest AI
Speaker 7: image generating apps and is only.
Speaker 1: Sort of.
Speaker 7: If you think about the three biggest ones, it would
Speaker 7: be mid Journey, Open AIS, Dolly, and Stability AIS Stable Diffusion.
Speaker 7: So this is, you know, one of the most popular
Speaker 7: and actually according to this research, is currently the most
Speaker 7: popular image generating app that out there, and it's concerning
Speaker 7: that it can be easily tricked.
Speaker 2: Okay, so the most popular names mid Journey, Stable Diffusion,
Speaker 2: and of course open Aiyes, Dolli all very familiar to
Speaker 2: us here on Bloomberg Technology.
Speaker 3: There's something in.
Speaker 2: Your writing that really jumps out though, that you consider
Speaker 2: mid Journey and we think about standards content moderation. Is
Speaker 2: it fair to say that mid Journey has the most
Speaker 2: flexible standards of those three?
Speaker 7: At least according to this report, it seems to be
Speaker 7: the case. Researchers from the Center for Countering Digital Hate
Speaker 7: showed an early report, shared it with us exclusively, and
Speaker 7: they found one hundred examples where mid Journey's bot was
Speaker 7: easily tricked into creating conspiratorial images where they showed, you know,
Speaker 7: prompts where people were ordering up these images of politicians
Speaker 7: in comproming situations and events that never happened, and mid
Speaker 7: Journey easily delivered the images. There are some guardrails like
Speaker 7: mid Journey will not, for instance, generate an image if
Speaker 7: you have certain keywords like blood or you know, anything
Speaker 7: referring to gore or violence.
Speaker 3: But it's so easy to trick it.
Speaker 7: One example that we talk about in the newsletter is
Speaker 7: you could ask it to generate an image of say,
Speaker 7: Bill and Hillary Clinton with their hands covered in strawberry syrup,
Speaker 7: so that kind of makes it look like they have.
Speaker 1: Literal blood on their hands.
Speaker 7: And researchers are really worried about this ahead of twenty
Speaker 7: twenty four in the US presidential election.
Speaker 2: So we've covered such wide ranging issues here on BTech
Speaker 2: about the text to image issue, biases, or you know,
Speaker 2: a result that is not what you intended. Let's be
Speaker 2: fair here and say what have made Journey had to
Speaker 2: say about this? What is their response to the reporting
Speaker 2: on their standards.
Speaker 7: So they didn't actually send us a response on the record,
Speaker 7: but it has said in the past that it has
Speaker 7: dozens of moderators and guides that look at the content
Speaker 7: on their discord chat app that is the main interface
Speaker 7: that mid Journey uses to interact with its users, and
Speaker 7: they say that these folks sixty eight content moderators sort
Speaker 7: of scour the chat and make sure that all the
Speaker 7: requests are above board, but it seems like they're letting
Speaker 7: some requests go straight through still and beyond that there's
Speaker 7: sort of automatic algorithmic AI that checks on the requests,
Speaker 7: usually using text matching to make.
Speaker 3: Sure that certain terms for instance.
Speaker 7: Again about violence and gore aren't creating images, but again
Speaker 7: those are easily circumpanded.
Speaker 2: Bloomberg's Davy Alba with the Bloomberg Technology Daily, I really
Speaker 2: encourage our audience go out find it on Bloomberg dot
Speaker 2: com and in the newsletter format.
Speaker 3: Thank you so much.
Speaker 2: Now, coming up here on the show, we'll talk about
Speaker 2: the state of AI development and adoption, but particularly in enterprise.
Speaker 2: That's with Insight Partners Managing Director Lonny Jaffie.
Speaker 3: That's next. This is Bloomberg All right.
Speaker 2: Time for today is VC Spotlight. Let's talk about cybersecurity
Speaker 2: and AI. Insite Partners recently released it's State of the
Speaker 2: Enterprise report where they break down what the future of
Speaker 2: enterprise adoption and tailwinds in development of AI technology looks like.
Speaker 2: Managing Director Lonnie Jaffee joins us now for more here
Speaker 2: on Bloomberg Achnologies. So much of our audience either works
Speaker 2: for or is a customer of enterprise cloud Enterprise SaaS.
Speaker 2: They're thinking heavily about how the developments that are happening
Speaker 2: right now in AI impact their core business or how
Speaker 2: they use AI. Just give me sort of the key
Speaker 2: takeaways from the report that you published very.
Speaker 10: Recently, right, so, the Inside Partner's State of Enterprise Tech Report.
Speaker 10: This is a study that reached out to about three
Speaker 10: hundred senior technologists at some of the world's largest companies,
Speaker 10: so seventy percent of them generate more than ten billion
Speaker 10: or so in annual revenue. And there's a free download
Speaker 10: from our website and has a lot of interesting data
Speaker 10: points around spending plans and strategy and areas like cybersecurity
Speaker 10: and generative AI. Cybersecurity is obviously a big focus. One
Speaker 10: newer concern we're hearing from bigger companies and governments as
Speaker 10: well is around the possibility that we'll see a wave
Speaker 10: of generative AI upgraded cyber attacks. For example, something like
Speaker 10: ransomware much smarter because it's powered by something like a
Speaker 10: large language model things. We actually launched a two weeks
Speaker 10: compression called the AI Cyber Challenge. This is led by
Speaker 10: DARPA working with companies like Anthropic and Google, Microsoft and
Speaker 10: open Ai, which will have teams competing to identify and
Speaker 10: fix software vulnerabilities using AI.
Speaker 3: Lonnie, sorry didn't mean to jump in on you there.
Speaker 2: I just want to say on this show, when we
Speaker 2: talk in the cybersecurity context, so many people saying that
Speaker 2: the tools that we all have and you guys in
Speaker 2: your industry will have the threat actors have them as well. Ultimately,
Speaker 2: you're a VC, So I'm interested why Insight actually publishes
Speaker 2: this report.
Speaker 3: What do you guys get out of it.
Speaker 10: We have a program called Insight on Site and it's
Speaker 10: generally trying to help support our portfolio companies with an
Speaker 10: enormous amount of resource. So it's one hundred and twenty
Speaker 10: full time people who help with things like product strategy
Speaker 10: and marketing and sales. And there's a part of the
Speaker 10: team Calledgnite that manages relationships with buyers at large multinational
Speaker 10: corporations and so this is a great way to stay
Speaker 10: in contact with them, and it helps our companies scale
Speaker 10: and also meet potential customers and partners and even acquirers.
Speaker 3: Right.
Speaker 10: So, this week it was announced that Checkpoint will acquire
Speaker 10: our portfolio company Perimetery v one, which allows you to
Speaker 10: build a secure virtual corporate network over the Internet for
Speaker 10: about four hundred and ninety million dollars, and Rubric this
Speaker 10: week also announced that it signed an agreement to acquire
Speaker 10: our portfolio company, Laminar, which is a leader in cybersecurity
Speaker 10: for data and use. So these are both deep tech
Speaker 10: Israeli cybersecurity startups, and you know, when the companies are
Speaker 10: relatively small and growing rapidly, that kind of connectness with
Speaker 10: buyers can be really helpful to them.
Speaker 2: Lottie, I want to jump on something you just said
Speaker 2: there about Israeli tech. I know you guys have offices
Speaker 2: in Tel Aviv. One of the big stories of the
Speaker 2: week has been VC's attitude towards the country, given the societal,
Speaker 2: judicial and political considerations happening there. How do you view
Speaker 2: Israeli tech right now? Are you pulling back or are
Speaker 2: you still interested, particularly in cybersecurity. You know, cybersecurity has
Speaker 2: been one of the main stay offerings out of Israel.
Speaker 10: Yeah, the cybersecurity talent there is amazing.
Speaker 3: You know.
Speaker 10: You see there's a we're based in New York City
Speaker 10: and there's a pretty close connectedness between the New York
Speaker 10: City tech scene and the one in Tel Aviv. There's
Speaker 10: a lot of companies when they land in the US,
Speaker 10: and this is true for Europe as well, they'll pick
Speaker 10: New York City as their landing place. There were a
Speaker 10: few initial companies like Mango, dB and Data Dog and
Speaker 10: others that were you know, big prove that you could
Speaker 10: scale a massive infrastructure software company in Manhattan, and so
Speaker 10: that was a big early part of our interest in
Speaker 10: the country. We're now the largest investor by both deal
Speaker 10: count and dollars and technology companies there. And you know,
Speaker 10: we're actually very helpful to the Israeli companies as they
Speaker 10: start to scale up, because they need to start scaling
Speaker 10: up internationally pretty much right away, and we have a
Speaker 10: lot of expertise around global scale out, you know, hiring
Speaker 10: sales leaders, opening up your first international office, things like that.
Speaker 3: Let's go back to you personally.
Speaker 2: You know, you add a decade IBM, now you're in
Speaker 2: the VC role.
Speaker 3: How do you find the next IBM?
Speaker 2: You know, in this environment such a heavy focus on AI,
Speaker 2: what are you seeing out there?
Speaker 10: Yeah, we're still only a real like about a few
Speaker 10: months into it with the generative AI capabilities, but there
Speaker 10: seem to be some early important differences starting to show
Speaker 10: up when compared to the prior generations of AI. The
Speaker 10: AI prediction systems like the recommendation engines or the computer
Speaker 10: vision classification systems in domains like healthcare, like our portfolio
Speaker 10: company Iterative Health, which can use computer vision to find
Speaker 10: cancerous polyps from a cool anascope video. These took a
Speaker 10: lot of time, effort, and resources to build. They needed
Speaker 10: big teams of very expensive engineers, complex data pipelines, lots
Speaker 10: of training and feedback data. But with the new wave
Speaker 10: of general to AI, at least so far, many companies,
Speaker 10: especially you're seeing this with incumbent software vendors and even
Speaker 10: end customers have been able to build and ship generative
Speaker 10: AI products extremely quickly. You know, some have actually released
Speaker 10: things already this year, even though it's only been a
Speaker 10: few months. And then they're able to give these language
Speaker 10: model or image generation capabilities access to their massive you know,
Speaker 10: hundreds of millions.
Speaker 3: Of existing users, existing distribution.
Speaker 10: And so what we've been doing is working with our
Speaker 10: portfolio companies like Atlin, for example, which is one of
Speaker 10: our better modern data stack portfolio companies that's going through
Speaker 10: really rapid growth and helping them figure out, Okay, so
Speaker 10: you can build a generative AI capability and then you
Speaker 10: can light it up to all of your users and
Speaker 10: it can use your product and in a way it's
Speaker 10: sort of a startup because it's within you know, it's
Speaker 10: a new capability and it can do something really media
Speaker 10: and substantives, like in the case of atline, it can
Speaker 10: do interactive Q and A with all of your enterprise data.
Speaker 10: You can ask it a question like you know, which
Speaker 10: of my sales reps is most productive this month, and
Speaker 10: it can go figure out across the catalog.
Speaker 3: You know how to answer that question.
Speaker 10: And our companies are able to get these impressive generative
Speaker 10: AI capabilities out the door in just a few months.
Speaker 10: So it does kind of tilt the balance of power
Speaker 10: a little bit between from startups to incumbents. But there
Speaker 10: are there are a few really interesting startup categories that
Speaker 10: we've been looking at, like one, as Kevin Scott puts it,
Speaker 10: it's the companies that can make the previously impossible things
Speaker 10: possible but still hard right, so there's still defensibility and
Speaker 10: hard tech and you need really good talent. Like we
Speaker 10: have a portfolio company, Unlearned, that uses AI to create
Speaker 10: synthetic digital twins. So these are basically virtual patients created
Speaker 10: out of combining AI predictions with existing patient profiles, and
Speaker 10: it allows researchers to conduct clinical trials while needing significantly
Speaker 10: fewer real patients in the control group to get the
Speaker 10: same quality trial outcomes. So it's still really hard to
Speaker 10: do it, but it's now possible, and so there may
Speaker 10: not be an incumbent, right, and those things can lend
Speaker 10: themselves really well to startups.
Speaker 2: All right, Inside Partners Managing Director Lonnie Jaffi, good to
Speaker 2: catch up here on VC Spotlight Bloomberg Technology.
Speaker 3: Thank you all right, time for going viral. Have you
Speaker 3: seen this one?
Speaker 2: Jeff Bezos and his new waterfront mansion in Florida. Sources
Speaker 2: save Bezos agreed to pay about sixty eight million dollars
Speaker 2: for the three bedroom a state dubbed the Billionaire Bunker
Speaker 2: of Florida. The property is located in Indian Creek, a
Speaker 2: man made barrier island, basically in the larger Miami area.
Speaker 3: I know a lot of people that have moved to Miami.
Speaker 2: They're not spending sixty eight million on their house hot
Speaker 2: there right now. Meanwhile, in other news, the richest person
Speaker 2: in the world, Elon Musk, says he spent three hours
Speaker 2: in an MRI machine earlier this week ahead of a
Speaker 2: proposed cage match with Metasio.
Speaker 3: Mark Zuckerberg.
Speaker 2: He says the scan showed there's a problem with his
Speaker 2: right shoulder blade rubbing against his ribs, which requires minor surgery,
Speaker 2: and that recovery is expected to last several months. We
Speaker 2: do have no idea, frankly, whether that proposed cage match
Speaker 2: is going to go ahead. Shifting gears pardon the pun.
Speaker 2: Touro is taking on traditional car rental services like Avis,
Speaker 2: budget Perts by allowing its customers not only rent cars
Speaker 2: from others, but list their vehicles on the rental market
Speaker 2: as well. Here's tell us about what the company is
Speaker 2: up to, particularly with generative Ai. Andre Hardad Touro's CEO.
Speaker 2: It's been a while since we've caught up here on
Speaker 2: Bluebow Technology. I want to ask you first the macro
Speaker 2: story we've seen, you know, with Airbnb, certain behaviors with
Speaker 2: short term rentals, you know when it comes to houses.
Speaker 2: What do you see right now in consumer behavior with
Speaker 2: listing their vehicles on Touro. Is it because they're under
Speaker 2: pressure financially or otherwise?
Speaker 3: Thanks for having me the latter b here.
Speaker 11: The picture on the community of the tour hosts that
Speaker 11: we've got has been very, very positive over the last
Speaker 11: couple of years. As you know, prices have gone up,
Speaker 11: Car prices have gone up, interest rates have gone up,
Speaker 11: and more people are looking for ways to make their
Speaker 11: car actually make sense financially for them. So we've seen
Speaker 11: tremendous growth in our hosting community. We've seen a lot
Speaker 11: of people also start building businesses on top of our app.
Speaker 11: So we've seen those multi car hosts really take hold
Speaker 11: in the community of tour hosts, and now we're excited
Speaker 11: to be able to have both consumer hosts and multi
Speaker 11: car hosts. Entrepreneurs were building small fleets on top of
Speaker 11: our app.
Speaker 2: The story of the year has been artficial intelligence, either
Speaker 2: generative AI tools or using a large language model to
Speaker 2: underpin your existing technology.
Speaker 3: What's Touro up to in the field of.
Speaker 11: AI, Well, we've jumped into it. As you may have seen,
Speaker 11: we launched our plugin for CHATGP. We're excited about the
Speaker 11: initial traction that we're seeing. We think that can really
Speaker 11: transform the way people discover.
Speaker 3: How does it work in basic tech?
Speaker 11: So you add the plug in to chat GPT, you
Speaker 11: download it to you add it to your chat gypt app,
Speaker 11: and you have the Tura plug in on it, and
Speaker 11: then you can start navigating Touro in really fun ways.
Speaker 11: You can actually ask to get really wonderful cars in
Speaker 11: a particular location, and you can describe the kinds of
Speaker 11: cars that you'd like, kind of budget that you have,
Speaker 11: the sort of specs that you'd like, and then chat
Speaker 11: gpt will provide you with an incredible selection from Tero.
Speaker 2: So at its core, it's basically automation search, but at
Speaker 2: a next level.
Speaker 11: Yeah, instead of having the customer go in to search
Speaker 11: and enter a lot of different criteria and filter through
Speaker 11: makes and models and prices and all the kinds of
Speaker 11: specs you can imagine when you're trying to find the
Speaker 11: perfect car for your trip, you can just ask chat
Speaker 11: gpt to do that for you and we can deliver
Speaker 11: great selection thanks to the com the nation of our
Speaker 11: plugin with CHADGPT.
Speaker 2: So what's the result been for Touro has an increased
Speaker 2: volume of traffic to the app or any actually easier matches.
Speaker 11: It's easier matching. Yeah, we're seeing both an increase in
Speaker 11: the matching grades as well as growth in traffic because
Speaker 11: more and more people are discovering now Turo through chat gpt,
Speaker 11: which is really an interesting.
Speaker 3: Development for us.
Speaker 2: Final quick quick one growth of Touro. Where are you
Speaker 2: growing right now? You know, either here domes in the
Speaker 2: US or internationally.
Speaker 11: Actually, we're growing in all of our locations. We expanded
Speaker 11: last year in France and Australia. Australia was our most
Speaker 11: recent launch in November of last year. The US business
Speaker 11: continues to grow rapidly, and you know, we're excited to
Speaker 11: continue to expand geographically. We see turo having an opportunity
Speaker 11: to be everywhere around the world.
Speaker 2: All right to our CEO, Andre Hadad, it's good to
Speaker 2: catch up back in SF on Bloomberg Technology.
Speaker 3: That does it.
Speaker 2: Sadly for this edition of Bloomberg Technology, what a week
Speaker 2: it's been for earning for markets, for AI for billionaires,
Speaker 2: so much news about billionaires.
Speaker 3: But there's a lot more to come.
Speaker 2: And you can always recap everything from the show on
Speaker 2: our podcast wherever you get your podcast. We're on Apple,
Speaker 2: We're on Spotify, and we're on iHeart, and of course we're.
Speaker 3: On all of the Bloomberg platforms.
Speaker 2: From here in San Francisco, Caroline Hide and New York's
Speaker 2: coming back soon, guys. I promise this is Bloomberg Technology.