WEBVTT - EU's Digital Markets Act, Lucid's Lifeline 0:00:01.720 --> 0:00:05.360 From Mahard where Innovation of Money and Power Collie in 0:00:05.480 --> 0:00:10.640 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde. 0:00:10.440 --> 0:00:27.840 And Ed Ludlove a Meed Ludlow in San Francisco. Caroline 0:00:27.880 --> 0:00:30.760 Hyde is off. This is Bloomberg Technology coming up on 0:00:30.800 --> 0:00:35.960 the program. Facing mega fines, the European Union opens investigations 0:00:36.000 --> 0:00:40.040 into Apple, Google and Meta in the first probes under 0:00:40.080 --> 0:00:43.440 the Block's Digital Markets Act. We go live to Brussels 0:00:43.800 --> 0:00:46.720 Plus will take a deep dive into the Justice Department's 0:00:46.800 --> 0:00:50.280 lawsuit against Apple as her own. Mark German argues the 0:00:50.360 --> 0:00:55.000 case is missing an opportunity to address more pressing concerns, 0:00:55.520 --> 0:00:58.520 and Lucid getting a one billion dollar cash injection from 0:00:58.560 --> 0:01:02.000 its biggest investor provide the troubled electric car maker with 0:01:02.040 --> 0:01:05.320 a needed lifeline. Will discuss that and so much more 0:01:05.520 --> 0:01:07.360 through the hour. Let's get right to Lucid. Look at 0:01:07.440 --> 0:01:10.160 Lucid shared in the US session, now up eight percent 0:01:10.240 --> 0:01:13.160 that had been as high as around twenty percent following 0:01:13.160 --> 0:01:17.800 the market open. This is a private placement of convertible stock. 0:01:18.400 --> 0:01:22.440 It takes the Saudi PIF and its affiliates investments and 0:01:22.520 --> 0:01:25.880 Lucid to six and a half billion dollars all told. 0:01:26.160 --> 0:01:28.880 A lot more to discuss on that later in the program. 0:01:29.040 --> 0:01:32.240 These are the meggacap technology shares that we're watching in 0:01:32.280 --> 0:01:35.640 a session this Monday. They are all moving to the downside. 0:01:35.760 --> 0:01:39.039 Apple down a percentage point, It's down twelve percent year 0:01:39.080 --> 0:01:41.560 to date, Alphabet pairent of Google down more than a 0:01:41.560 --> 0:01:44.319 percentage point, Meta down seven ten to one percent. We 0:01:44.520 --> 0:01:48.400 have an EU probe of each of those companies under 0:01:48.400 --> 0:01:51.200 the Digital Markets Act. This is what EU Anti Trust 0:01:51.280 --> 0:01:53.880 chief Margreta Vesta said earlier today. 0:01:54.960 --> 0:01:58.320 These are serious cases. We've been able to solve that 0:01:58.800 --> 0:02:02.200 with merely a discuss. It would have been resolved by now. 0:02:02.320 --> 0:02:05.160 So we opened for good reasons because we find that 0:02:05.200 --> 0:02:10.280 if this invertise come at compliance solutions, if they persist, 0:02:10.919 --> 0:02:14.120 then consumers will not have the choice that they were 0:02:14.160 --> 0:02:16.160 promised by the Digital Markets Act. 0:02:18.280 --> 0:02:21.560 Let's go to Brussels and Bloomberg Samuel Stalton, Sam just 0:02:21.639 --> 0:02:25.600 outline the basics of these probes under the Digital Markets 0:02:25.639 --> 0:02:28.400 Act and how they relate to those US technology companies. 0:02:29.400 --> 0:02:33.480 Yeah, good afternoon here from Brussels, ED and indeed we're 0:02:33.480 --> 0:02:37.200 back here again the EU facing up to the dominance 0:02:37.360 --> 0:02:40.040 of big tech. And this is the news today that 0:02:40.120 --> 0:02:44.400 the European Commission has opened five Yes, that's five investigations 0:02:45.000 --> 0:02:49.359 under its new Digital Markets Act rules targeting Apple, Google 0:02:49.840 --> 0:02:53.480 and Meta. Now how serious is this really? Well, it's 0:02:53.480 --> 0:02:57.079 certainly a statement of intent from Brussels, but it clearly 0:02:57.080 --> 0:03:01.359 wants to enforce as robust as possible these new digital 0:03:01.360 --> 0:03:04.720 competition rules, which only took hold just eighteen days ago 0:03:04.960 --> 0:03:06.080 on March seventh. 0:03:07.480 --> 0:03:09.400 So we played that click from vest there and one 0:03:09.400 --> 0:03:11.440 of the questions she got in the press conference, which 0:03:11.480 --> 0:03:13.959 I'm assuming you were in, was is this a bit 0:03:15.240 --> 0:03:18.520 front run? Is this you moving quickly? And she basically said, no, 0:03:19.480 --> 0:03:23.560 you know, we are moving in a timely fashion. We're 0:03:23.560 --> 0:03:27.760 also showing the potential risks to these technology companies. This 0:03:27.880 --> 0:03:31.919 explain what finds if they were to be fined, these 0:03:31.960 --> 0:03:34.640 tech companies could be facing under an EU action. 0:03:35.840 --> 0:03:39.360 Yeah, So from today, the Commission will aim to conclude 0:03:39.400 --> 0:03:43.400 these investigations into Apple, Google and Meta within a period 0:03:43.400 --> 0:03:46.360 of about twelve months. At the end of that twelve 0:03:46.360 --> 0:03:49.600 month period it will adopt what's called a non compliance decision, 0:03:50.040 --> 0:03:53.280 and with that power, it has the capacity to find 0:03:53.360 --> 0:03:57.440 these companies up to ten percent of its global turnover 0:03:57.840 --> 0:04:01.840 for those types of breaches under the and also it 0:04:01.880 --> 0:04:05.440 has these additional powers in the case of repeated infringements 0:04:05.680 --> 0:04:09.240 to find these firms up to twenty percent of their 0:04:09.280 --> 0:04:13.800 global annual revenue or even mandates the breakup of some 0:04:13.840 --> 0:04:16.359 of these companies. So it's a very very serious matter. 0:04:16.640 --> 0:04:18.640 We're not quite at that stage yet. As I say, 0:04:18.720 --> 0:04:21.480 there's this twelve month period to go through and til 0:04:21.520 --> 0:04:24.760 the Commission comes to a decision, but that kicks off today. 0:04:25.960 --> 0:04:28.960 And for a little size and scope, Apple's revenue in 0:04:29.000 --> 0:04:32.799 twenty twenty three was three hundred and eighty three billion dollars, 0:04:32.839 --> 0:04:35.000 so twenty percent of that is a hefty chunker change. 0:04:35.000 --> 0:04:38.680 But in Samuel Stalton in Brussels, terrific reporting. Thank you. 0:04:39.160 --> 0:04:42.040 The euprobe isn't the only anti trust story coming out 0:04:42.040 --> 0:04:45.080 of Apple last week. The DOJ here in the US 0:04:45.200 --> 0:04:49.920 father suit accusing Apple of violating antitrust laws and suppressing 0:04:49.960 --> 0:04:52.760 competition in the culmination of what was a five year 0:04:52.839 --> 0:04:56.320 probe into the company. I want to speak to John Bergmeyer, 0:04:56.440 --> 0:04:59.680 legal director at Public Knowledge, and go a bit deeper 0:04:59.760 --> 0:05:02.080 on this. We were reflecting last week this was a 0:05:02.080 --> 0:05:05.880 big story. You know, from a market's perspective, it's rare 0:05:06.000 --> 0:05:09.960 that a stock shows the pressure of an antitrust action. 0:05:10.680 --> 0:05:13.359 What is your assessment of how strong the DOJ case 0:05:13.480 --> 0:05:14.719 is against Apple? 0:05:16.040 --> 0:05:17.200 I think it's very strong. 0:05:17.360 --> 0:05:21.760 They listed about five behaviors that are not intended to 0:05:21.800 --> 0:05:24.640 gather up all the different complaints that people have about Apple, 0:05:24.680 --> 0:05:27.200 but rather the five behaviors that they think most probably 0:05:27.279 --> 0:05:28.039 violate the law. 0:05:30.240 --> 0:05:32.440 So tho you know, God. 0:05:32.760 --> 0:05:34.520 No, I'm sorry, John, Please continue your thought. 0:05:35.800 --> 0:05:36.000 Yeah. 0:05:36.960 --> 0:05:41.039 Those include using the app store monopoly to prevent certain 0:05:41.080 --> 0:05:44.599 categories apps from competing, blocking banks from accessing the NFC 0:05:45.279 --> 0:05:49.200 chip and other matters, and those classic exclusionary behaviors where 0:05:49.200 --> 0:05:52.760 companies that have a dominant market share, market power, monopoly power, 0:05:52.800 --> 0:05:54.960 whatever you want to call it, they're usually prevented from 0:05:55.040 --> 0:05:57.360 doing things that block out competitors. I think the DJ 0:05:57.520 --> 0:05:59.760 put forward a very compelling narrative showing how Apple, for 0:05:59.800 --> 0:06:00.840 you US, has done just that. 0:06:02.960 --> 0:06:08.240 The Apple argument in this is essentially that the consumer 0:06:08.279 --> 0:06:12.159 does have choice right that they Apple are the maker 0:06:12.279 --> 0:06:16.159 of a creative market. Do you think that that a 0:06:16.240 --> 0:06:20.640 competitive market right in that they offer developers the opportunity 0:06:20.760 --> 0:06:23.719 to make a living, to make apps that are competitive 0:06:23.760 --> 0:06:27.280 with one another. Does that give them any chance of 0:06:27.440 --> 0:06:30.200 warding off this fight from the DOJ, I don't. 0:06:31.200 --> 0:06:31.839 I don't think so. 0:06:32.000 --> 0:06:33.760 If you're a developer, you have no choice but to 0:06:33.800 --> 0:06:36.960 develop for both iOS and Android. And I really doubt 0:06:36.960 --> 0:06:40.960 that the majority of iPhone customers buy iPhones because specifically 0:06:41.000 --> 0:06:44.640 of these exclusive practices. Apple makes excellent products. No one's 0:06:44.640 --> 0:06:46.640 denying that I have an iPhone and I love it. 0:06:47.200 --> 0:06:49.640 The question is not whether Apple makes good products and 0:06:49.640 --> 0:06:51.800 whether it competes, but whether it can use its product 0:06:51.880 --> 0:06:56.240 to control other markets like smartwatches or payment apps. 0:06:57.800 --> 0:07:00.800 John, you work at public knowledge, and I'm summarizing that 0:07:00.800 --> 0:07:03.040 the goal of public knowledge is to make sure that 0:07:04.000 --> 0:07:06.760 each part of the technology and its stakeholders have a 0:07:06.880 --> 0:07:08.120 say in the future. 0:07:08.240 --> 0:07:08.440 Right. 0:07:08.720 --> 0:07:12.840 One of the things that gets debated in the antitrust 0:07:12.880 --> 0:07:16.120 context is who is it serving? Who is it protecting? 0:07:16.800 --> 0:07:20.240 And the argument from the DOJ is that it is 0:07:20.280 --> 0:07:23.040 protecting the consumer. Right, it is making sure that it 0:07:23.560 --> 0:07:26.800 ends in a policy change at Apple that would allow 0:07:26.880 --> 0:07:29.680 for the consumer to have greater choice. But does that 0:07:29.760 --> 0:07:33.239 actually ever happen? Does that actually ever become the end result? 0:07:34.840 --> 0:07:37.400 I think it does very frequently with anti trust cases, 0:07:37.520 --> 0:07:41.120 they do take a long time to litigate, and antitrust 0:07:41.160 --> 0:07:44.280 is not the only tool that policymakers have to protect consumers. 0:07:44.640 --> 0:07:47.440 But here, you know, I repeat again Apple, The DOJ 0:07:47.640 --> 0:07:50.200 is not suing Apple for having products that are too 0:07:50.280 --> 0:07:53.760 good or too integrated. It's suing Apple for blocking competitors 0:07:53.760 --> 0:07:56.240 from doing the same thing on the Apple platform, which 0:07:56.320 --> 0:07:58.880 is so dominant that if you're a competitor, if you're 0:07:58.880 --> 0:08:00.760 a competitor, or if you're an Apple developer, you simply 0:08:00.840 --> 0:08:03.960 have no choice but to develop for the iPhone. 0:08:04.400 --> 0:08:06.800 You just mentioned there that it's not the only tool. 0:08:06.800 --> 0:08:10.160 We often talk about regulating through the courts, but there 0:08:10.240 --> 0:08:14.080 is also, of course lawmaking on Capitol Hill. Is there 0:08:14.120 --> 0:08:16.280 an avenue do you think for Apple to reach some 0:08:16.400 --> 0:08:19.040 kind of settlement with the DOJ where they could just 0:08:19.080 --> 0:08:20.720 work this out behind closed doors? 0:08:22.280 --> 0:08:24.400 You know, I really couldn't predict whether to be a settlement. 0:08:24.720 --> 0:08:27.160 Apple's going to file an answer to the DOJ's complaint. 0:08:27.200 --> 0:08:29.000 That's going to set forth east side of the story. 0:08:29.040 --> 0:08:32.400 And like I say, litigation often takes years to develop. 0:08:32.520 --> 0:08:34.960 In the meantime, though Congress is not sitting on its hands, 0:08:35.559 --> 0:08:37.800 and other regulators around the world are not sitting on 0:08:37.840 --> 0:08:41.280 their hands. Congress introduced a bill it did not pass 0:08:41.320 --> 0:08:43.800 a while ago, called the Access Act, which would have 0:08:43.960 --> 0:08:46.679 opened up the app store monopoly just a little bit. 0:08:47.280 --> 0:08:50.040 And as you've just reported in Europe, you know Europe 0:08:50.120 --> 0:08:50.720 is taking action. 0:08:50.800 --> 0:08:52.240 There's litigation in Australia. 0:08:52.640 --> 0:08:54.920 So it's going to be a very complicated situation, I 0:08:54.960 --> 0:08:58.079 think globally for Apple, and ultimately maybe it isn't their 0:08:58.080 --> 0:08:59.560 interest to try to settle and try. 0:08:59.400 --> 0:09:01.559 To resolve some of these disputes. 0:09:01.600 --> 0:09:03.520 But Apple so far has shown that it just wants 0:09:03.559 --> 0:09:06.840 to fight tooth and nail and resist any attempt to 0:09:06.880 --> 0:09:08.240 regulate over changes behavior. 0:09:08.840 --> 0:09:11.480 It is getting complicated. As you point out, Apple is 0:09:11.520 --> 0:09:14.439 facing antitrust scrutiny on two fronts, the DOJ in the 0:09:14.520 --> 0:09:17.319 US and under the digital market apps in Europe. And 0:09:17.360 --> 0:09:19.000 I just want to say, because it was REMISSI of 0:09:19.000 --> 0:09:21.680 me not to that. If you read the Bloomberg story, 0:09:21.720 --> 0:09:25.080 each of the companies Apple, Alphabet and Meta gave a 0:09:25.080 --> 0:09:28.199 pretty full response saying we are compliant with the DMA. 0:09:28.480 --> 0:09:30.760 So I encourage our audience to go and look at 0:09:30.760 --> 0:09:34.199 those responses. John Bergmeyer, legal director at Public Knowledge. Thank 0:09:34.280 --> 0:09:36.760 you very much now, sticking with Apple for a second, 0:09:36.760 --> 0:09:40.840 Apple CEO Tim Cook has revealed plans to invest further 0:09:40.920 --> 0:09:45.120 in supply chain, stores and research in China. State Media 0:09:45.160 --> 0:09:47.200 says he also made the promise in a meeting with 0:09:47.720 --> 0:09:51.439 Beijing's Commerce Minister. Cook also spoke at the annual China 0:09:51.520 --> 0:09:55.520 Development Forum, saying AI will be an essential tool for 0:09:55.640 --> 0:09:59.160 helping businesses reduce their carbon footprints. 0:10:00.240 --> 0:10:03.440 We would not be able to recover the level of 0:10:03.520 --> 0:10:08.320 material that we do today for recycling without AI. I 0:10:08.320 --> 0:10:13.480 mean it's already fundamental in our calculation, and I think 0:10:13.600 --> 0:10:18.640 it provides an enormous tool and the toolkit for every 0:10:18.720 --> 0:10:23.040 company that's wishing to be carbon neutral or to lower 0:10:23.080 --> 0:10:27.800 their emissions by substantial amount. 0:10:35.360 --> 0:10:39.040 Okay, So, Lucid trading up around five to six percent 0:10:39.200 --> 0:10:42.040 right now at its session. Higher have been up twenty 0:10:42.160 --> 0:10:45.720 one percent as the company received a one billion dollar 0:10:45.760 --> 0:10:49.040 cash injection from its biggest investor, in affiliate of Saudi 0:10:49.080 --> 0:10:53.960 Arabia's public Investment Fund, providing electric car maker Frankly with 0:10:54.360 --> 0:10:58.120 a further lifeline. Here to discuss his Bloomberg's Global Auto's 0:10:58.240 --> 0:11:00.560 editor Craig Throudew and London, I mean you and I 0:11:00.559 --> 0:11:04.520 have been following Lucid a long time, well before the 0:11:04.920 --> 0:11:07.840 reverse merger with this fact that took them public. But 0:11:07.960 --> 0:11:10.240 the point of that is that we've also tracked the 0:11:10.280 --> 0:11:14.000 billions of dollars that the PI, the PITH, PIF and 0:11:14.040 --> 0:11:15.839 its affiliates have put in. Just bring us on to 0:11:15.880 --> 0:11:19.120 speed on how much cash Saudis have put into Lucid 0:11:19.160 --> 0:11:19.520 so far. 0:11:21.000 --> 0:11:23.240 Yeah, I mean this is you know, people talk about 0:11:23.240 --> 0:11:26.080 the Federal Reserve put, you know, the FED put. This 0:11:26.160 --> 0:11:29.320 is the PITH put, if you will. This is another 0:11:29.360 --> 0:11:33.680 billion that the Saudis are putting into Lucid. This is 0:11:33.760 --> 0:11:36.920 on top of a five point four billion that that 0:11:37.040 --> 0:11:40.520 Lucid has said has already been put in by their 0:11:40.520 --> 0:11:44.360 biggest shareholder, and it really was necessary. I mean, it's 0:11:44.520 --> 0:11:47.080 it may be the case that this is not the 0:11:47.200 --> 0:11:50.640 last capital race that we see this year, because this 0:11:50.760 --> 0:11:54.080 is a company that, you know, going into twenty twenty 0:11:54.080 --> 0:11:56.960 four had only a little bit over four billion on 0:11:57.000 --> 0:12:00.000 its balance sheet and there were some expectations among animal 0:12:00.120 --> 0:12:02.120 us that you know, roughly all of that could be 0:12:02.160 --> 0:12:04.880 accounted for in cash burn this year. And so you know, 0:12:05.200 --> 0:12:07.880 Lucid has been a company that you know, when it 0:12:08.400 --> 0:12:11.280 was going public through a reverse merger was looked at 0:12:11.320 --> 0:12:15.199 as you know, a potential Tesla challenger. It's really struggled 0:12:15.200 --> 0:12:18.800 to live up to those expectations and get you know, 0:12:19.280 --> 0:12:22.160 manufacturing going right. I think it let a lot of 0:12:22.200 --> 0:12:26.160 investors down, with their outlook for this year being really 0:12:26.200 --> 0:12:28.559 just a small increase from last year's production. 0:12:29.320 --> 0:12:31.280 Yeah, that seems to be the story of Lucid, right. 0:12:31.280 --> 0:12:33.960 I think they're guiding to nine thousand units this year. 0:12:33.960 --> 0:12:36.520 It's a premium price point they needed eighty five hundred 0:12:36.640 --> 0:12:41.240 last year. But at the same time, there's an EV 0:12:41.559 --> 0:12:44.240 problem generally. Where does Lucid sit within that? 0:12:45.720 --> 0:12:48.000 Yeah, I mean I think there is some hope that 0:12:48.080 --> 0:12:51.880 maybe moving into a new segment into sport utility vehicles 0:12:51.880 --> 0:12:56.200 with the gravity would be you know, a big help 0:12:56.240 --> 0:12:58.800 for them. They to your point, are playing at the 0:12:58.840 --> 0:13:03.960 higher end, and the level of competition there is particularly high. 0:13:04.000 --> 0:13:04.480 In the US. 0:13:04.520 --> 0:13:07.720 I think we've seen you know, so much more you know, 0:13:07.800 --> 0:13:11.120 fighting up at the upper ends of the market where 0:13:11.120 --> 0:13:14.520 we haven't really seen as we have in China, you know, 0:13:14.960 --> 0:13:19.440 cutthrough competition among you know, cheap evs, and so you know, 0:13:19.520 --> 0:13:21.880 when you have when you have to go up against 0:13:21.880 --> 0:13:25.400 more established players like the Mercedes you know and BMW's 0:13:25.440 --> 0:13:28.840 of the world. It's really tough, and Lucid has compelling 0:13:28.880 --> 0:13:31.640 product that the issue that they've had is not being 0:13:31.679 --> 0:13:34.320 able to make enough of it and to be able 0:13:34.360 --> 0:13:37.280 to to make U you know, their their evs without 0:13:37.280 --> 0:13:40.040 losing a ton of money. Uh, you know, the more 0:13:40.320 --> 0:13:42.520 they're making, the more they're losing. And that's not a 0:13:42.520 --> 0:13:44.040 trend that can be sustained. 0:13:45.240 --> 0:13:47.760 As Elon Musk has teased them about in the past, 0:13:48.160 --> 0:13:52.040 prose types of easy production is hard. Overnight, Bloomberg News 0:13:52.040 --> 0:13:55.319 spoke to the CEO c at L, the world's biggest 0:13:55.360 --> 0:13:58.720 maker of batteries for evs. What were the main takeaways 0:13:58.840 --> 0:13:59.680 from that interview. 0:14:00.880 --> 0:14:03.040 I think one of the big ones, of course, was 0:14:03.080 --> 0:14:06.319 an exclusive that ed you were a part of earlier 0:14:06.320 --> 0:14:09.520 this year. This idea that c at L did have 0:14:09.960 --> 0:14:12.920 some equipment that was idle in China that Tesla is 0:14:12.960 --> 0:14:15.840 going to make use of by making more batteries at 0:14:15.880 --> 0:14:19.720 its factory in Nevada. I think this is a company that, 0:14:19.840 --> 0:14:22.560 you know, is really sort of pressing ahead in spite 0:14:22.560 --> 0:14:25.280 of the fact that we're seeing an ev slowdown and 0:14:25.520 --> 0:14:29.120 you know, sort of vowing to continue to add capacity, 0:14:29.200 --> 0:14:31.880 and I think we're seeing this sort of you know, 0:14:31.960 --> 0:14:34.440 broader trend, whether it's c at L on the battery 0:14:34.480 --> 0:14:38.120 side or by D which makes both EV's and batteries. 0:14:38.440 --> 0:14:41.120 You know, the real dominant players in China are sort 0:14:41.160 --> 0:14:44.320 of pressing their advantages over the others and you know, 0:14:44.880 --> 0:14:49.360 continuing to add capacity, cut price, and you know, the 0:14:49.440 --> 0:14:52.040 question is going to be, you know, how much longer 0:14:52.200 --> 0:14:55.600 some of the you know, lesser companies in China can 0:14:55.640 --> 0:14:58.680 sustain themselves, you know, in the face of the big 0:14:58.720 --> 0:15:01.880 getting bigger and getting all the more aggressive to sort of, 0:15:01.920 --> 0:15:04.360 you know, drive out the players who can't keep up. 0:15:05.760 --> 0:15:08.360 Bloomberg's Global Cars editor Craive Trudell. Great to have you 0:15:08.400 --> 0:15:10.120 on the program. Thank you. Now coming up here on 0:15:10.120 --> 0:15:14.800 Bloombog technology, a shakeup at Stability AI and it's c suite, 0:15:14.840 --> 0:15:19.040 more on the resignation of CEO m A. Musqut. Next, 0:15:19.520 --> 0:15:21.960 we're also taking a look at shares of Boeing. You 0:15:22.120 --> 0:15:25.440 must have seen this story up eight ten to one percent, 0:15:25.520 --> 0:15:29.600 way off session highs. CEO Dave Calhoun will step down 0:15:29.640 --> 0:15:31.840 at the end of this year. There are pretty sweeping 0:15:31.880 --> 0:15:35.960 overhauls of leadership Larry Kellner will not stand for reelection 0:15:37.040 --> 0:15:40.000 as chairman and stand deal the guy on the right 0:15:40.000 --> 0:15:41.840 hand side of you the screen, the guy that led 0:15:41.920 --> 0:15:46.360 the commercial business in the commercial airplane division is also 0:15:46.520 --> 0:15:51.200 departing with immediate effect. That is the big story out 0:15:51.200 --> 0:16:13.960 of the aerospace industry this Monday. This is Bloomberg Technology. Okay, 0:16:14.000 --> 0:16:16.200 it's time for talking tech and in the news. Match 0:16:16.240 --> 0:16:19.640 Group is naming two directors to its board following talks 0:16:19.640 --> 0:16:22.840 with activist investors. Elliott Management, the owner of dating apps 0:16:22.840 --> 0:16:26.360 Tender and Hinge, will add Instacart chief marketing officer Laura 0:16:26.480 --> 0:16:31.040 Jones and Zillo co founder Spencer Raskoff to its board immediately. 0:16:31.080 --> 0:16:34.520 Match also said its signed an information sharing agreement with 0:16:34.640 --> 0:16:39.320 Elliott in an effort to quote facilitate ongoing collaboration towards value. 0:16:39.440 --> 0:16:42.640 The company plans to update shareholders on its strategy at 0:16:42.640 --> 0:16:47.120 an upcoming investor day. Plus AI chips startup Elian raises 0:16:47.200 --> 0:16:50.160 sixty million dollars in a Series B funding round led 0:16:50.200 --> 0:16:54.160 by Samsung and Tiger Global. The company provides tech that 0:16:54.480 --> 0:16:58.480 unifies semiconductors to work more smoothly and faster. The funding 0:16:58.520 --> 0:17:01.360 comes as the leader of a semi conductors in Nvidia 0:17:01.680 --> 0:17:05.000 put forward its path of combining chips to work as one, 0:17:05.080 --> 0:17:08.240 relying on the work of companies like Elian to help 0:17:08.320 --> 0:17:11.199 realize their goals, and this is a big one. Stability 0:17:11.280 --> 0:17:15.560 AI CEO M. A. Mustik has resigned. The move comes 0:17:15.600 --> 0:17:19.480 amid quarrels with investors and waves of senior staff departures 0:17:19.640 --> 0:17:22.720 at the British AI startup. In a blog post released Friday, 0:17:22.960 --> 0:17:26.680 Stability AI said it's COO and CTO will serve as 0:17:26.760 --> 0:17:30.159 interim co CEOs. The company's best known for his image 0:17:30.200 --> 0:17:33.920 generation tool Stable Diffusion, and it helped kick off the 0:17:33.960 --> 0:17:38.159 AI frenzy, reaching a value of one billion dollars in 0:17:38.200 --> 0:17:40.680 twenty twenty two. I want to bring in somebody who 0:17:40.760 --> 0:17:43.399 was at the heart of the reporting on this story, 0:17:43.440 --> 0:17:46.399 Bloomberg's Rachel Metz, and I don't say that lightly. You 0:17:46.520 --> 0:17:51.240 covered every single step in this story. But ultimately Emmad 0:17:51.359 --> 0:17:52.119 has resigned. 0:17:52.520 --> 0:17:56.600 What do we know well, we know that he said 0:17:56.600 --> 0:18:01.600 that he is stepping down to work on solving the 0:18:02.040 --> 0:18:03.280 concentration of. 0:18:03.280 --> 0:18:04.400 Power in AI. 0:18:05.920 --> 0:18:08.600 We had been thinking for a while that he may 0:18:08.600 --> 0:18:12.199 be stepping down, and we'd heard rumors about it. We 0:18:12.200 --> 0:18:15.240 were aware that some of the people behind the original 0:18:15.320 --> 0:18:18.680 version of stable Diffusion, who had been in the company 0:18:18.680 --> 0:18:22.639 for quite a while, we're leaving the company. So perhaps 0:18:22.720 --> 0:18:26.200 this helped shift his decision. It's a little bit unclear 0:18:26.200 --> 0:18:27.120 at this point. 0:18:27.760 --> 0:18:30.679 What I've learned over the last few months of you're reporting, Rachel, 0:18:30.720 --> 0:18:34.399 is that there's the company that can all cannot be 0:18:34.520 --> 0:18:36.920 well known, and then there's the tool, right, the generative 0:18:36.960 --> 0:18:40.600 AI tool. In this case, stable diffusion works well, doesn't 0:18:40.600 --> 0:18:44.600 it It isn't well known and leading piece of technology. 0:18:45.920 --> 0:18:47.880 That's correct. It is well known. 0:18:48.000 --> 0:18:50.639 It is a leading piece of technology. It was originally 0:18:50.680 --> 0:18:56.320 developed by a handful of researchers in Germany, and imaed 0:18:56.640 --> 0:19:01.080 stepped in and offered to pay for compute to further 0:19:01.200 --> 0:19:04.280 train this existing model. Previously it was called latent diffusion. 0:19:04.320 --> 0:19:09.760 They renamed it stable diffusion, and IMA decided to spread 0:19:09.760 --> 0:19:12.720 it far and wide, essentially through Stability AI, and that 0:19:12.840 --> 0:19:15.640 helped bring it to the public and popularize it and 0:19:16.200 --> 0:19:18.200 really touched off a lot of what we're seeing now 0:19:18.200 --> 0:19:20.240 in terms of the generative AI boom. 0:19:21.480 --> 0:19:24.600 So, what's left at Stability AI, or should I say 0:19:24.640 --> 0:19:26.399 who is left at Stability AI? 0:19:27.680 --> 0:19:30.520 This is a good question, and we're trying to figure 0:19:30.560 --> 0:19:31.680 out some of this now. 0:19:31.800 --> 0:19:34.560 I mean in terms of like top. 0:19:34.400 --> 0:19:38.560 Tier researchers, I'm not sure if there are that many 0:19:38.640 --> 0:19:39.920 people left there. 0:19:39.920 --> 0:19:41.879 Some of the best best people just left. 0:19:42.440 --> 0:19:44.359 Trying to we have, like you know, we're trying to 0:19:44.359 --> 0:19:47.479 figure out, like who on this list of names from 0:19:47.760 --> 0:19:50.840 some of their biggest research papers is actually still there. 0:19:51.760 --> 0:19:54.240 We're going to have to take a look and see 0:19:54.240 --> 0:19:55.640 what's happening very soon. 0:19:56.960 --> 0:19:59.080 You have to remember who put the companies in these 0:19:59.119 --> 0:20:01.239 positions right used to get their name out there. Here 0:20:01.240 --> 0:20:04.159 are some of the investors behind stability AI. 0:20:05.359 --> 0:20:08.760 CO two and light Speed, and then there's also a 0:20:08.800 --> 0:20:13.600 bunch of smaller and individual investors as well that went 0:20:13.640 --> 0:20:16.960 through like multiple rounds. I mean, it's important to remember 0:20:17.000 --> 0:20:21.159 also that stability AI didn't just emerge fully formed in 0:20:21.200 --> 0:20:22.720 the summer of twenty twenty two. 0:20:22.840 --> 0:20:25.280 It was originally created. 0:20:25.200 --> 0:20:29.520 As a way to use I think it was AI 0:20:29.800 --> 0:20:34.320 to help with COVID related research or rounding up COVID 0:20:34.320 --> 0:20:37.639 related research, if memory serves, and then it sort of 0:20:37.680 --> 0:20:39.359 shifted gears at a. 0:20:39.240 --> 0:20:42.640 Certain point, probably in early twenty twenty two. 0:20:43.480 --> 0:20:45.520 All right, Bloonbose, Rachel Mets who as I say, you 0:20:45.560 --> 0:20:48.720 have been all across the spilid Tai story for months, 0:20:48.720 --> 0:20:50.879 and we appreciated reporting. 0:20:58.480 --> 0:21:01.760 After years in the making, the United States Department of 0:21:01.960 --> 0:21:07.159 Justice has filed its antitrust lawsuit against Apple, threatening its 0:21:07.320 --> 0:21:11.360 underlying business model. The government is taking aim at Apple's 0:21:11.400 --> 0:21:17.600 policies surrounding super apps, cloud gaming services, messaging, tap to pay, 0:21:18.000 --> 0:21:20.760 and support on the iPhone for third party smart watches. 0:21:20.960 --> 0:21:24.280 While Apple has clearly had a negative impact on partners 0:21:24.680 --> 0:21:28.520 like component suppliers and app developers, the first iteration of 0:21:28.560 --> 0:21:30.840 the DOJ's case doesn't really. 0:21:30.840 --> 0:21:32.679 Prove about Apple has harmed consumers. 0:21:33.000 --> 0:21:37.800 Apple has already addressed several of the DOJ's complaints, pledging 0:21:37.840 --> 0:21:41.679 to adopt rcs to enable better texting between iPhones and 0:21:41.680 --> 0:21:44.760 Android devices, and the company has shown that it will 0:21:44.800 --> 0:21:48.159 add new features for developers in the cloud gaming in 0:21:48.240 --> 0:21:51.320 super app spaces. The DOJ is right that the Apple 0:21:51.359 --> 0:21:54.639 Watch is favored over third party smart watches and that 0:21:54.800 --> 0:21:58.240 Apple blocks third party apps from using the NFC chip 0:21:58.359 --> 0:21:59.560 in the iPhone. 0:21:59.240 --> 0:22:00.119 For tap to pay. 0:22:00.640 --> 0:22:04.399 Apple should absolutely address both concerns, but for now it 0:22:04.480 --> 0:22:07.000 seems likely that the entire lawsuit will take a few 0:22:07.040 --> 0:22:11.480 years to result in major changes. Still, I ultimately expect 0:22:11.560 --> 0:22:14.880 Apple to crack the iPhone open in the same vein 0:22:14.960 --> 0:22:17.399 as it is doing in the European Union because of 0:22:17.440 --> 0:22:20.439 the Digital Markets Act. All of that being said, the 0:22:20.520 --> 0:22:24.440 DOJ is still distracting from some real issues by focusing 0:22:24.440 --> 0:22:29.080 on result matters, including making frivolous claims that Apple is 0:22:29.160 --> 0:22:32.399 behind the downfall of the Amazon firephone. 0:22:32.160 --> 0:22:33.240 A decade ago. 0:22:33.720 --> 0:22:37.880 Still, things can change quickly, especially when new evidence emerges 0:22:37.960 --> 0:22:41.080 in a trial. Ultimately, the lawsuit seems a bit frivolous, 0:22:41.440 --> 0:22:43.760 But there is a lot that Apple has changed, and 0:22:43.800 --> 0:22:46.760 there's a lot that it can still change. I'm Markerman 0:22:46.960 --> 0:22:48.280 for Bloomberg News. 0:22:52.119 --> 0:22:54.919