Speaker 1: Bloomberg Audio Studios, podcasts, radio news from.
Speaker 2: The Heart where innovation, money and power. Collie in Silicon
Speaker 2: Valley and beyond.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Loved Love.
Speaker 4: Live.
Speaker 3: This is Broomberg Technology.
Speaker 5: Now we get to direct TV in the dish, become
Speaker 5: the PTV provider in the United States. Plus, Beijing steps
Speaker 5: up pressure on domestic companies to ditch in video chips,
Speaker 5: and California Governor gab Newson Brooks proposed AI safety bill
Speaker 5: Center West the bill. But first, let's check in on
Speaker 5: these markets at the moment, because as I battle perhaps
Speaker 5: some technical issues with my microphone will crently seeing the
Speaker 5: Nasdaq one hundred off by a quarter of a percent
Speaker 5: at the moment that we're all awaiting fedshare Pal what
Speaker 5: he will be saying regarding the economy post of course
Speaker 5: those FED cuts. We're looking at the Dragon, Golden Dragon Inecks.
Speaker 5: Over in China though, up another four percent. Tech stocks
Speaker 5: on fire amid the stimulus and of course a feeling
Speaker 5: of fomo continuing to perpetuate in the market. We are
Speaker 5: the highest on these Chinese related names in more than
Speaker 5: a year. Look at some individual movers though, because We
Speaker 5: have got a merging Monday on our hands, and a
Speaker 5: lot of stocks are being impacted. AT and T for one,
Speaker 5: only up about a tenth of a percent. But this
Speaker 5: has been long in the making, DirecTV and Dish combining
Speaker 5: to create the biggest PATV provider in the United States.
Speaker 5: AT and T is part of the deal while it's
Speaker 5: selling its seventy percent stake in Direct Tv to TPG. Meanwhile,
Speaker 5: that earns seven point six billion dollars Echo Star, as
Speaker 5: you'll see, under pressure, the owner of Dish and Sling
Speaker 5: especially dodging bankruptcy here according to BlueBag Intelligence, by offloading
Speaker 5: the debt associated with PayTV assets, and is set to
Speaker 5: sell more shares itself.
Speaker 3: Let's discuss all of this.
Speaker 5: Shell Davis, who throughout has been following this deal. You
Speaker 5: take a victory lap because you're ahead of the curve
Speaker 5: on this. This is why AT and T isn't moving
Speaker 5: that much, because we'd anticipated it's offloading of Direct TV.
Speaker 5: But just remind us what they're creating here by merging
Speaker 5: the two companies.
Speaker 6: So, as you just said, you know, this deal has
Speaker 6: been a long time coming, and there's a lot happening here.
Speaker 3: The news all came out this morning.
Speaker 6: Through a series of five six press releases filings, and
Speaker 6: what's happening is that Dish and direct TV are going
Speaker 6: to combine. Direct TV is acquiring Dish to form if
Speaker 6: it gets approved, the biggest paid TV provider in the US,
Speaker 6: and the way they're doing that is Direct TV is
Speaker 6: paying one dollar in equity and then assuming ten billion
Speaker 6: dollars of Dish debt in order to acquire the business.
Speaker 6: As part of that, though, Dish or Direct TV has
Speaker 6: to get Dish bondholders to agree to take a haircut
Speaker 6: on some of their debts.
Speaker 3: So if this goes through, it.
Speaker 6: Will mean a stronger balance sheet, you know, behind those
Speaker 6: lenders that are agreeing to this, But the bondholders have
Speaker 6: to agree to take that haircut.
Speaker 5: And that is why some of these bond prices are
Speaker 5: significantly under pressure today. It's not just a stock of
Speaker 5: Echo style. For example, EchoStar meanwhile is going more into
Speaker 5: the infrastructure side, into the five G side, and into
Speaker 5: selling about five billion dollars worth of stock. That's why
Speaker 5: it shares full on the day. There are some of
Speaker 5: the outstanding debt that's involved in this dead exchange. But
Speaker 5: why then at and T exit it's holding of DirecTV,
Speaker 5: does it not see the future potential of a bigger deal.
Speaker 3: So this is all.
Speaker 6: Part of a bigger theme that we're seeing in M
Speaker 6: and A and in corporate America, where companies are increasingly
Speaker 6: looking to simplify their businesses. AT and T has done
Speaker 6: a bit of.
Speaker 3: A three sixty years ago, they.
Speaker 6: Got into the content game, and you'll remember a couple
Speaker 6: of years ago they spun out and sold Warner Brothers
Speaker 6: to Discovery. Now with DirecTV, you know, they're looking to
Speaker 6: exit that and they say that this is all about
Speaker 6: them wanting to focus on what their core is, which
Speaker 6: is wireless broadband. They don't see you know, value in
Speaker 6: content the way that they had before.
Speaker 3: And under TPG.
Speaker 6: With this this TV that they have, DirecTV has done
Speaker 6: really well because TPG has been able to cut costs
Speaker 6: and so the thought is maybe it's better in their
Speaker 6: hands than a split you know deal.
Speaker 5: I like the fact that you're saying this is all
Speaker 5: part of a trend to simplify, because you're also on
Speaker 5: the byline for Verizon's story today where we're seeing a
Speaker 5: three point three billion dollar deal to basically sale and
Speaker 5: then lease back access to its towers.
Speaker 3: Why do that for a Verizon?
Speaker 6: So it's a way for a Verizon to get some cash.
Speaker 6: They announced a deal themselves a couple a couple of
Speaker 6: weeks ago to buy Frontier, which is a big broadband
Speaker 6: internet player. And we're seeing just a big theme of
Speaker 6: the wireless players tapping out on kind of you know,
Speaker 6: cell phone and seeing we need to find ways to
Speaker 6: get more customers and the way to do that is
Speaker 6: by offering internet access. So this is a way for
Speaker 6: them to pay for that without you know, boosting their
Speaker 6: average as much. It gives them a little bit of cash.
Speaker 5: Michelle, which has been busy, we appreciate it. Meanwhile, let's
Speaker 5: talk about this in the broader market context. Empower's chief
Speaker 5: investment strategist, Martin Norton is here for more and Marta, look,
Speaker 5: we do have a feeling of m and a Monday
Speaker 5: on our hands. Are we going to see more deals
Speaker 5: go through as we see rates get lower?
Speaker 1: Well, listen, I mean we have seen some pickup in
Speaker 1: deals this year, and I think one of the challenges
Speaker 1: has been higher rates. And so the expectation that you know,
Speaker 1: as if FED enters a definitive cutting cycle, we're going
Speaker 1: to see some shifts broadly, and that can impact the
Speaker 1: M and A environment as well. There's also the regulatory
Speaker 1: angle and of course getting deals through and that's been
Speaker 1: harder in recent years, and so that remains something that
Speaker 1: you know, is something that investors and companies are going
Speaker 1: to have to continue to contend with. But certainly lower
Speaker 1: rates are a bit of a tailwind.
Speaker 5: What's interesting is when you felt perhaps M and A
Speaker 5: and indeed IPOs there, we say it are all going
Speaker 5: to be held back until post the political anxiety that
Speaker 5: is the US election, That doesn't seem to be holding
Speaker 5: it back right now. Is that your view?
Speaker 3: Marta?
Speaker 1: Well, you know, I do think that regulatory impact has
Speaker 1: been felt. That doesn't mean that companies aren't going to
Speaker 1: engage in deals when it makes strategic sense. I think
Speaker 1: that's what we're seeing with the Dish Direct TV deal.
Speaker 1: But I do think that there's potentially been less activity
Speaker 1: than there otherwise would be, and so I think that
Speaker 1: as we turn the elective corner and start to have
Speaker 1: some clarity on what that looks like, we may start
Speaker 1: to see a pickup in activity on the M and
Speaker 1: A front.
Speaker 5: What about activity and ownership of big tech right now?
Speaker 5: Because we're down on the day on the NASDAC. There
Speaker 5: is talk that hedge funds are selling out of technology
Speaker 5: names to get into lumberhold Chinese companies. How are we
Speaker 5: seeing that play out in terms of people's desire to
Speaker 5: stay committed to the Magnificent seven?
Speaker 1: You know, it's such an interesting question because a lot
Speaker 1: of times when we're talking about the environment that we're in,
Speaker 1: there's really been two drivers of returns in twenty two.
Speaker 1: For of course, there's been the AI theme, and of
Speaker 1: course that's really benefited the big tech space. And there's
Speaker 1: also been this soft landing theme, and now we're adding
Speaker 1: the cunning cycle to the mix. So I think that's
Speaker 1: really within the US broadening out the trade, not necessarily
Speaker 1: meaning that folks need to abandon big tech. I mean,
Speaker 1: lower rates aren't necessarily bad for big tech, but it
Speaker 1: certainly brings other areas, like the small cap area into
Speaker 1: the front of investors' minds. Now what's happening in China
Speaker 1: is so fascinating because this has been an area that
Speaker 1: has been under pressure, it's had multiple false dawns, and now,
Speaker 1: as Bloomberg has recorded, so clearly there's the monetary and
Speaker 1: the fiscal side coming together to push these stocks higher,
Speaker 1: and so I think that's giving a lot of investor
Speaker 1: enthusiasm to assets that have been really depressed. You can
Speaker 1: find some very healthy, big tech names in China, but
Speaker 1: the overhang there has just been made it very difficult
Speaker 1: for investors to want to get involved.
Speaker 5: We've already seen the Faumo kick in the rallying of
Speaker 5: the names we can only have on the screen the
Speaker 5: Ali Baba's, the JD dot COM's, the by Dos. Is
Speaker 5: there still juice to go hair or do you wait
Speaker 5: to see how bigger impact the stimulus actually has.
Speaker 3: From a fundamental perspective.
Speaker 1: I'd argue that the valuations are still there. I mean
Speaker 1: when you take a look at something like Crane shares
Speaker 1: etf that's shocking the China market, and you look at
Speaker 1: where it peaked in February twenty twenty one, it was
Speaker 1: around one hundred and thirty and it's come down all
Speaker 1: the way down to about eighteen at one point now
Speaker 1: in the thirties. It potentially won't go all the way
Speaker 1: back up to something like one thirty, but you can
Speaker 1: see a little bit room left on the valuation side
Speaker 1: because the sentiment has been so bleak. I mean, there's
Speaker 1: been numerous seal side research pieces out over the past
Speaker 1: several years saying that this is a no go space.
Speaker 1: And so now that you have kind of the support
Speaker 1: for the demand side, I'm not saying there aren't still issues.
Speaker 1: There are plenty of issues left, but I think that's
Speaker 1: take at least some of the concerns away from investors' minds.
Speaker 5: And we have had such a US is the only
Speaker 5: game in town for technology trade?
Speaker 3: Is that still the case?
Speaker 1: Well, it's hard to find similar opportunities from kind of
Speaker 1: a financial resilience or health or dominance perspective in what
Speaker 1: you have in Silicon Valley. There is a lot of
Speaker 1: uniqueness to those types of names. But the closest corollary
Speaker 1: that I see really is in China, where you have
Speaker 1: some of these similar types of companies with really healthy
Speaker 1: balance sheet. So I think that this is the competitive trade.
Speaker 1: But of course they have, you know, concerns around the
Speaker 1: regulatory environment, there are geopolitical risks, there are a number
Speaker 1: of other things that kind of spoil the apple cart
Speaker 1: a little bit there. But from an asset perspective, they're
Speaker 1: pretty competitive.
Speaker 5: I just want to double click on that in terms
Speaker 5: of regulatory concerns, because they're actually geopolitical regulatory concerns as well.
Speaker 5: With China pushing back against the video chips, that's benefited
Speaker 5: Chinese chip makers today. We've got to talk about it
Speaker 5: much more in a moment, Marta. But how much are
Speaker 5: you factoring in for your investors the idea that China
Speaker 5: US tensions will continue.
Speaker 1: I mean, I think that is one of the kind
Speaker 1: of exaginous events that's out there and affects a course tech,
Speaker 1: but it also affects the broader market. And you know,
Speaker 1: we have talks of tariffs and the like as well,
Speaker 1: so there's a lot of questions around kind of the
Speaker 1: cooperation of different countries and how they'll play well. And
Speaker 1: then something like AI and thinking about kind of the
Speaker 1: security risk how that factors into things. So I think
Speaker 1: there is you know, something of a when folks are
Speaker 1: thinking about these assets to think about the valuation and
Speaker 1: whether it's accounting for that type of risk. And as
Speaker 1: we're taking a look at big tech today, even post
Speaker 1: summer storm, I'd argue that valuations are a bit high
Speaker 1: and they're not really taking into account some of these
Speaker 1: outside events that could be problematic for.
Speaker 2: Some of these companies.
Speaker 5: Empower's chief investment strategist Martin Norton. Great to get your take.
Speaker 3: Thank you.
Speaker 5: Now let's turn our attention to US and China. Now,
Speaker 5: Bloomberg has learned that Beijing is stepping up pressure on
Speaker 5: domestic companies to ditch in Vidia processes for lo called
Speaker 5: alternatives that are cent shares of China chip maker camanicn
Speaker 5: technology is absolutely soaring today. Let's discuss more with bluemg's
Speaker 5: Mackenzie Hawkins, who help break this story on Friday evening
Speaker 5: around the pushback against Nvidia. This is today's market reaction.
Speaker 5: Mackenzie just remind us as to why they are trying
Speaker 5: to curtail these not the most powerful chips from video,
Speaker 5: that's for sure.
Speaker 4: So Beijing for years has been aiming for self sufficiency
Speaker 4: in semi conductors, which are the critical electronic building blocks
Speaker 4: of every advanced technology, including artificial intelligence, and Chinese chip
Speaker 4: makers have been trying to make strides against their foreign
Speaker 4: rivals but have struggled to keep up. And videos chips
Speaker 4: are still the gold standard, even the slightly less powerful
Speaker 4: ones that the company is allowed to sell to China
Speaker 4: under US restrictions. So Beijing, on the one hand, wants
Speaker 4: to prop up these domestic companies and encourage Chinese AI
Speaker 4: developers to use Chinese chips. On the other hand, they
Speaker 4: don't want to handicap these Chinese AI startups, so they're
Speaker 4: not fully banning them from buying the best chips on
Speaker 4: the market, which are in Vidias, but saying if you
Speaker 4: can please buy local.
Speaker 5: Interestingly, I think a quote on camera was Jensen Hwang
Speaker 5: on Friday as well in Washington. He's doing all he can,
Speaker 5: he says, to support sales in China.
Speaker 4: China is an incredibly important market market for Nvidia and
Speaker 4: pretty much every other chip maker. The US restricted sales
Speaker 4: of advanced ships made with any type of American technology
Speaker 4: to China in twenty twenty two and has been increasingly
Speaker 4: cracking down on those sales over the past couple of years.
Speaker 4: But in Nvidia and other companies responded by trying to
Speaker 4: design new chips for the Chinese market, which the US
Speaker 4: Commerce Department then cracked down on those, and Nvidia designed
Speaker 4: even less powerful chips. And this is still a huge
Speaker 4: electronics market. Obviously, an enormous amount of manufacturing happens there,
Speaker 4: and companies are trying to bide buy restrictions from Washington
Speaker 4: while maintaining access to a critical customer base.
Speaker 3: Mackenzie Hawkins, thanks so much.
Speaker 5: Meanwhile, sticking with China manufacturers, there selling the fewest electric
Speaker 5: cars in eighteen months to customers across Europe, registration is
Speaker 5: actually falling by nearly half in August from a year earlier.
Speaker 5: Pett the most credudel here for us from London. This
Speaker 5: is a continuing theme, Craig.
Speaker 3: Yeah, that's right.
Speaker 7: I think this is a case where we still have
Speaker 7: yet to see tariffs come into place and actually be implemented.
Speaker 7: You know, there's been a provisional additional charge put on vehicles,
Speaker 7: but it won't actually be charged until November, so you know,
Speaker 7: this is maybe a little bit of an early taste
Speaker 7: of the impact that these additional tariffs could have on
Speaker 7: Chinese manufacturers and you know, international car companies like Tesla
Speaker 7: that are facing you know, additional tariffs as a result
Speaker 7: of the fact that the EU is concerned about you know,
Speaker 7: just how much lower costs are in China and how
Speaker 7: much you know, companies exporting out of China maybe have
Speaker 7: a leg up over local manufacturers.
Speaker 5: MG and Brown that had a lot of success that's
Speaker 5: feeling the heat byd as well. We're currently looking at
Speaker 5: some American auto companies as well, though, because all of
Speaker 5: this comes in the context Craig of a very tough
Speaker 5: environment for automakers.
Speaker 3: Still Antos the latest.
Speaker 7: Today, Yeah, that's right, and stillentis. The profit warning today
Speaker 7: was really dramatic. They went from seeing a more than
Speaker 7: ten percent profit margin for the year to five to
Speaker 7: seven and a half percent margin for them to lower
Speaker 7: that and also really dramatically reduce their expectation for free
Speaker 7: cash flow. Initially they were seeing that to be positive.
Speaker 7: Now they're saying a negative five billion to negative ten billion.
Speaker 7: That is really something that has caught the market off guard.
Speaker 7: I think it was well understood that this company was
Speaker 7: having some real issues and particularly with their inventory getting
Speaker 7: a bit out of whack in North America. They've been
Speaker 7: making way more cars than they have man for. But
Speaker 7: for them to come out and really have this sort
Speaker 7: of clearing event and you know, worn in a very
Speaker 7: dramatic way, I think has really alarmed investors and analysts
Speaker 7: today the context.
Speaker 5: Thank you from Craig Rudell. Meanwhile, coming up, we're going
Speaker 5: to be joined by orchestro CEO Neil Lustig for his
Speaker 5: insights on the potential East Coast port strikes, what the
Speaker 5: impact is likely to be on the supply chain. More broadly,
Speaker 5: we'll bring you that next. This is buly Meg Technology.
Speaker 8: I urge us MX and the ILA to come in
Speaker 8: an agreement. It respects workers, that ensures the flow of
Speaker 8: commerce through our ports, and the stake are very high.
Speaker 8: The potential for disruption is significant.
Speaker 5: New York Governor Kathy Hokeel earlier this hour union workers
Speaker 5: along the East Coast and Gulf Coast ports threatening strike
Speaker 5: tomorrow over a new contract. Bloomberg's Danny Berger joins us
Speaker 5: now from right outside Newark Shipping Port and New Jersey
Speaker 5: on the latest, And Danny, we're hearing actually in a
Speaker 5: Facebook post from the ISLA that USMX continues to block
Speaker 5: the path forward to a settlement.
Speaker 3: They currently are saying, and this.
Speaker 5: Coming from the International Longshoreman's Association, it feels like a
Speaker 5: deal is not near done.
Speaker 9: No, they are still a long ways away. And given
Speaker 9: that post, it seems like the strike will likely be
Speaker 9: on twelve am, one minute past midnight on Tuesday is
Speaker 9: when the contract expires and when a strike will happen.
Speaker 9: Forty five thousand members to this union. That is some
Speaker 9: thirty six ports. It's about half of the goods imported
Speaker 9: into the US. The sticking points are two very big ones. Caroline,
Speaker 9: it is one pay. They want a some eighty percent
Speaker 9: pay rise over the next six years. Say the current
Speaker 9: offer that they are being given is quote stingy. They
Speaker 9: also want language drafted into the contract that prevents more
Speaker 9: automation on these sports. Automation I should say that is
Speaker 9: very prevalent elsewhere. It is in Asia, it is in
Speaker 9: places like Amsterdam. But they don't want that over fear
Speaker 9: of losing their job. So the head of the Longshoremen's Association,
Speaker 9: the union representing them, saying that come Tuesday morning, they
Speaker 9: are ready to in his words, awaken a sleeping giant.
Speaker 5: And we saw that awakened on the West coast, but
Speaker 5: a year or so ago, Danny, and a lot of
Speaker 5: that came down to technology, to innovation, as we say,
Speaker 5: alliance and container Carries, direct Employers and Port Association basically
Speaker 5: the United States Maritime Alliances who they're up against anything
Speaker 5: from that side in terms of their talks with the ISLA.
Speaker 9: Well, I mean this is a problem that we've heard
Speaker 9: from many unions. I mean, you can even refer to
Speaker 9: what's happening, what happened in the Hollywood strike over fear
Speaker 9: of technology. And when it comes to the West Coast,
Speaker 9: it is a separate union, so these talks are different.
Speaker 9: Now you could look at the West Coast and say
Speaker 9: if this is a model for how talks can go
Speaker 9: and even abroad of how talks can go to incorporate automation. Essentially,
Speaker 9: they want guarantees put in that workers will be protected.
Speaker 9: That's the kind of language they want it. More automation
Speaker 9: does come. Now, there has been some hope that maybe
Speaker 9: if goods can't come through the East Coast, they can
Speaker 9: come through. The West Coast is still open. Unfortunately, the
Speaker 9: capacity there is not enough, and the head of the
Speaker 9: unions on the East Coast has said that there's been
Speaker 9: solidarity and that some of the workers there won't accept
Speaker 9: the shipments coming in. So, yes, it is that sticking
Speaker 9: point of technology. But many people say, look, this is
Speaker 9: a tide that cannot be stopped. It is automation that
Speaker 9: is necessary. It makes a job easier, quicker, and yes
Speaker 9: some jobs will be lost, but it's not reskilling. That's
Speaker 9: really necessary to make sure that that doesn't happen and
Speaker 9: people stay employed even if there is automation.
Speaker 3: Dotty Baga live from York. We thank you.
Speaker 5: Meanwhile, let's talk more ultimation technology helping us in this
Speaker 5: current supply chain issue.
Speaker 3: Neil Lusting joins us. He's the CEO of kestro so predict.
Speaker 5: Procurement platform powered by AI gain theory, which helps companies
Speaker 5: proactively reroot those shipments and secure alternative supplies before well,
Speaker 5: perhaps these disruptions are.
Speaker 3: Going to be felt.
Speaker 5: I have a feeling you're getting a few calls.
Speaker 10: It's a tough time to be a supply chain executive
Speaker 10: this week, and I think most of our customers right
Speaker 10: now are focused on alternatives. Right there where you find
Speaker 10: new routes, how we're going to move things through air.
Speaker 10: This is something they would have been focused on for
Speaker 10: a few days already at this point. If you haven't
Speaker 10: figured this out, you're a bit late, and longer term,
Speaker 10: your job is to figure out how to make yourself
Speaker 10: more resilient. Software like Orchestro can't predict black swan events
Speaker 10: like this, but they can't help you become more adaptable
Speaker 10: respond much faster. So our customers can reach out to
Speaker 10: hundreds and thousands of contractors suppliers in order of magnitude faster,
Speaker 10: And really, this is what this is about, is from
Speaker 10: our customer's perspective, is adapting to the issue. Our customers
Speaker 10: aren't going to be involved in the labor discussions. But
Speaker 10: how do you adapt and adjust quicker than you did
Speaker 10: in the past, and more importantly, quicker than your competitors.
Speaker 5: Will they likely though, be feeling money lost. We're expecting
Speaker 5: a big economic impact from this.
Speaker 10: Absolutely, there's no question this is going to be damaging
Speaker 10: to everyone. There is enough alternative There are enough alternative
Speaker 10: suppliers or alternative channels. This is not the capacity. So
Speaker 10: this makes it twice as important for you to be
Speaker 10: the first one to move. Yes, and if you move,
Speaker 10: as I said, this is kind of like the joke
Speaker 10: with the bear in the woods. You don't have to
Speaker 10: outrun the bear, you have to run your buddy. And
Speaker 10: if you can adapt faster than your competitors, you can
Speaker 10: find those alternative roots. You can arrange airshipping for critical imports.
Speaker 10: It's a short term bit, but speed matters.
Speaker 5: Well, let's talk about the speed and how machine learning
Speaker 5: or how game theory are raging your client puts them
Speaker 5: able to front run hand right.
Speaker 10: So AI is good at a few things in the
Speaker 10: enterprise market. AI is good at sifting through large amounts
Speaker 10: of data. And AI is good at automating things that
Speaker 10: otherwise a human being would have had to do, like
Speaker 10: reaching out and managing a code process for finding an
Speaker 10: alternative ship or finding alternative supplier, and so being able
Speaker 10: to take that and shrink that time to twenty percent
Speaker 10: of what it was before means you can now do
Speaker 10: this just more five times as much as you could before.
Speaker 10: Our customers are finding For example, we had a customer
Speaker 10: who a few months ago went out to the entire
Speaker 10: North American trucking market at once four thousand lanes, three
Speaker 10: hundred and fifty carriers. A job that would have taken
Speaker 10: nine months and a dozen people was collapsed into three
Speaker 10: people three weeks.
Speaker 3: And so this is the.
Speaker 10: Kind of nimbleness that AI gets you broadly, and what
Speaker 10: our customers delivering for our customers in supply.
Speaker 5: Chain, how do you respond to a sudden wave of
Speaker 5: demand on your end? Does anything get stressed or stretched?
Speaker 5: Do you have to think about investing in your own platform?
Speaker 10: So We're lucky. We use a set of cloud based
Speaker 10: platforms that do it's called auto scaling, so our infrastructure
Speaker 10: is able to expand and contract dynamically. So for us,
Speaker 10: this is actually not a crisis. It's an opportunity.
Speaker 5: This is what you're built for. Orchestra Ceo, Nil Lastig.
Speaker 5: Great to have you here on a very busy day. Meanwhile,
Speaker 5: coming up, we're going to be joined by California Senator
Speaker 5: Scott Wiener to weigh in on the AI Safety Bill,
Speaker 5: which was just vetoed by California Governor Gavin Newsom.
Speaker 3: That's next. This is Blue Big Technology.
Speaker 11: This is an AIPC, a new generation of personal computer
Speaker 11: with specialized processors for AI tasks. It also has an
Speaker 11: AI assistant software that's pre installed. We tried out Adell
Speaker 11: XPS thirteen and a Microsoft Surface Pro. They both run
Speaker 11: Windows eleven on Quodcom chips, a combination of CPU, GPU
Speaker 11: and NPU or neural processing unit. That's the new bit.
Speaker 11: There's also a button or key specifically for Microsoft's Copilot
Speaker 11: Tap and boop upcomes the AI assistant. Copilot acts like
Speaker 11: a chatbot, fielding questions, it creates images, and it can
Speaker 11: quickly draft schedules or summarize dense text in web browsers.
Speaker 11: Copilot answers questions about web page or summarizes news articles.
Speaker 11: The AI tech still has a lot of limitations, but
Speaker 11: battery life that was great in both PCs three or
Speaker 11: four days on a full charge, chatting with copilot, rendering
Speaker 11: images even if you push the limits with gaming. In
Speaker 11: the Dell's case, that's thanks to Snapdragon's MPU, it can
Speaker 11: run forty five trillion operations per second, so multiple AI
Speaker 11: apps simultaneously without a hit to performance or battery life.
Speaker 11: Like pieces of old, there's gremlins, but on the whole
Speaker 11: it does what you'd want from a PC. There's still
Speaker 11: a question, how do aipcs change how we work and.
Speaker 3: Play more on AI?
Speaker 5: Because California Governor Gavin Newsom has vetoed what would have
Speaker 5: become one of the most comprehensive policies governing the safety
Speaker 5: of AI in the United States. The bill, which would
Speaker 5: have held AI developers accountable for any severe harm caused
Speaker 5: by their technologies. It drew strong criticism from the likes
Speaker 5: of Open Ai, VC firm and Recent Horowitz and many more,
Speaker 5: who warned it could stall innovation in the States.
Speaker 3: Democratic California Senator.
Speaker 5: Scott Wiener, who introduced the bill, called Newsom's veto a
Speaker 5: setback and a missed opportunity. In a statement on X, says, quote,
Speaker 5: we are all less safe as a result.
Speaker 3: He joins US now for more.
Speaker 5: Along with Bloomberg Showene Gafari and Senator I start you
Speaker 5: you'll reaction disappointment, But why less safe?
Speaker 12: Sure?
Speaker 13: Yes, the governor's veto was very disappointing. This was a
Speaker 13: very thoughtful, focused piece of legislation that would have addressed
Speaker 13: catastrophic risk from only the largest, most powerful models, and
Speaker 13: what it did was very basic. It would require the
Speaker 13: largest AI companies, the largest HEAD companies, to perform safety
Speaker 13: evaluations on massive powerful models before they release them, and
Speaker 13: also to be able to shut down those models if
Speaker 13: something goes awry. They've all committed to perform these safety evaluations.
Speaker 13: But instead of just trust us, we want to put
Speaker 13: it in statute. So there was nothing extreme or unreasonable
Speaker 13: about this, and the veto unfortunately sends a very bad
Speaker 13: message about the future of AI safety.
Speaker 12: And Senator what do you make of Governor Newsom's rationale
Speaker 12: for vetoing this bill? He said that he's worried it
Speaker 12: would provide a false sense of security that smaller models
Speaker 12: could be exempt. We also saw Nancy Pelosi put out
Speaker 12: a statement about how she's happy to beat bill has
Speaker 12: been meted to what do you make of their rationales?
Speaker 13: Well, respectfully to the governor, I'm first of at least
Speaker 13: the governor acknowledged that these risks are real, because some
Speaker 13: of the opposition throughout we're saying, oh, this is just
Speaker 13: science fiction. It's not science fiction. These are very, very real,
Speaker 13: tangible risks that these models could help facilitate. So the
Speaker 13: governor did acknowledge that, which is good. I didn't fully
Speaker 13: understand the governor's VETO message. It said, well, the bill
Speaker 13: is too broad, but the bill is also too narrow,
Speaker 13: So the veto message, it's unclear what the governor actually wants,
Speaker 13: and we'll see with this working group that he's setting
Speaker 13: up what comes out of that. But I and many
Speaker 13: others are committed to really moving forward to support AI
Speaker 13: innovation because AI can make the world a better place,
Speaker 13: but trying to get ahead of the risks posed by
Speaker 13: this very powerful technology.
Speaker 12: Right and talking about that working group, So the governor
Speaker 12: has said that he's consulting with outside experts, including Faith
Speaker 12: A Lee and some others, to potentially come up with guardrails,
Speaker 12: maybe even new legislation. It sounds like in a future session,
Speaker 12: what do you make of that? Do you think those
Speaker 12: are the right people for this group? Some people have
Speaker 12: brought up that Faith A Lee does have funding for
Speaker 12: a startup from Interries and Horowitz, the VC firm, which
Speaker 12: has been very vocal against a SB ten forty seven.
Speaker 12: What do you make of that group? Are they the
Speaker 12: right people to be addressing this well?
Speaker 13: They also he put a Tino Quaar on there, who's
Speaker 13: a former California Supreme Court justice who I admire greatly,
Speaker 13: and I have a lot of respect for Faith A.
Speaker 4: Lee.
Speaker 13: She's an incredibly smart, talented person. And it's also important
Speaker 13: that folks who technologists who so ported the bill also
Speaker 13: be involved because we had some of the greatest minds
Speaker 13: in AI who were supporting the bill. I hope that
Speaker 13: they are included as well.
Speaker 5: Right, Senator, What of the influence though, of those that
Speaker 5: were against?
Speaker 3: What of the lobbying did it make an impact?
Speaker 13: Well, it did not have significant impact in the legislative process.
Speaker 13: The legislature with very strong votes in both the Senate
Speaker 13: and the Assembly passed this. So Democrats overwhelmingly supported this
Speaker 13: legislation despite the intense lobbying by large tech companies and
Speaker 13: by large venture capital firms. You know, the governor went
Speaker 13: through his own process, and I am confident was hearing
Speaker 13: a lot both support and opposition and ultimately made his decision.
Speaker 13: I strongly disagree with the governor's decision, but again, at
Speaker 13: least he acknowledged that these risks are real and that
Speaker 13: they're not made up.
Speaker 5: When you reintroduce SP ten forty seven in the next session.
Speaker 13: We're going to evaluate next steps. We certainly want to
Speaker 13: engage with the Governor and with others. This issue is
Speaker 13: not going away. It's important. Congress has shown no signs
Speaker 13: of acting. Congress could not even get it together to
Speaker 13: pass an election deep fakes bill before this election. So California,
Speaker 13: as the heartland of tech and AI innovation, has a
Speaker 13: responsibility to lead on AI safety.
Speaker 12: So, Senator, while this bill didn't pass, it did spark
Speaker 12: a national even international conversation about AI legislation. What do
Speaker 12: you think the impact has been, As it surprised you
Speaker 12: how big this is. The debate over this bill became
Speaker 12: and how much a divided the tech community.
Speaker 13: Yeah, I knew this bill would be controversial, any tech
Speaker 13: regulation bill is. I did not anticipate the scale of
Speaker 13: the conversation. But I have to say it's always disappointing
Speaker 13: when a bill fails or gets vetoed, But sometimes you
Speaker 13: have to introduce a big, controversial bill to spark a
Speaker 13: long overdue conversation. I've seen that happen in some of
Speaker 13: the housing work that we've done, where you pass, you
Speaker 13: introduced a huge bill, it doesn't pass, but it moves
Speaker 13: the conversation forward, and I think the same is true here.
Speaker 13: The fact that the governor issued a very, very lengthy
Speaker 13: and detailed veto message, the fact that he acknowledged that
Speaker 13: the risks were real, and the fact that he committed
Speaker 13: to forming not just forming a working group, but saying
Speaker 13: specifically who's going to be on it and what it's
Speaker 13: going to focus on. That's a big step forward. And so, yes,
Speaker 13: it's disappointing that this veto happened, but this issue isn't
Speaker 13: going away, and we're going to get the job done.
Speaker 5: California Senator Scott Reena, we thank you, Amblubos Sharene Gafari
Speaker 5: I think Gaines is expanding its anti trust fight with Google.
Speaker 5: Now the gaming john is accusing the Android with conspiring
Speaker 5: with some Sung go this to block rival apps on
Speaker 5: its marketplace by default globally.
Speaker 3: For more, multi Nac is here with it.
Speaker 5: And this is yet further anti trust fight with Alphabet,
Speaker 5: the parent company of Google. And of course the Android
Speaker 5: offering's a stake here for Epic.
Speaker 14: So this is very interesting because you know, the fight
Speaker 14: is coming after last year's trial where Epic fought against
Speaker 14: Google's app store policies, challenged them, and then one jury
Speaker 14: trial where you know, the jurors found that Google Play policies.
Speaker 2: Were anti competitive.
Speaker 14: So now we have this new move, the latest move
Speaker 14: where Google says sorry.
Speaker 2: Epic says that while.
Speaker 14: Google, a judge in the Google case, is figuring out
Speaker 14: remedies on how to fix Google Play policies, it wants
Speaker 14: Google wants Samsung to sort of block gamers from finding
Speaker 14: their games easily. So it's sort of an interesting sort
Speaker 14: of a new effort, you know, that's happening while a
Speaker 14: judge is actually about a rule anytime on how to
Speaker 14: change Google Play policies to make them, you know, less
Speaker 14: of a monopoly. Which which was which is what a
Speaker 14: jury found. Ury jury found last year that that the
Speaker 14: Google Play Store was a.
Speaker 5: Monopoly multi Samsung in July said all of its phones
Speaker 5: will have this default setting.
Speaker 3: They say it's basically.
Speaker 5: To prevent what malware, but ultimately it blocks downloads of
Speaker 5: Android apps that compete with the Google Play Store. So
Speaker 5: what is Samsung saying that it's actually doing here? What
Speaker 5: does Google say that it's actually doing here? Not constraining competition?
Speaker 2: Sure, so the lawsuit was.
Speaker 14: Just file this morning, and Samsung says this auto blocker
Speaker 14: feature that Epic says is now blocking gamers from downloading
Speaker 14: Epic games and Epic products is actually something that Samsung says.
Speaker 2: Users have an option to turn it on or turn
Speaker 2: it off. It's up to them.
Speaker 14: But according to Epic, in July, Samsung turned this feature
Speaker 14: into a default. There was a default setting after an
Speaker 14: update where now every time you know, you turn on
Speaker 14: your phone, auto blocker is automatic, automatically on, So it's
Speaker 14: not up to the user anymore.
Speaker 2: And that's what Epic says is anti competitive.
Speaker 14: So Samsung says, hey, you know, our users can still
Speaker 14: turn off this feature if they want, and we haven't
Speaker 14: heard from Google. Yet the lawsuits file just this morning,
Speaker 14: so waiting to hear their response. It shouldn't be interesting
Speaker 14: because you know, this is sort of the next fight
Speaker 14: after a fight that is already ongoing, so it'll sort
Speaker 14: of be interesting to see what happens.
Speaker 5: Representative from Google decline to comment, and we plan to
Speaker 5: vigorously contest if it gains basis claims, so says Samsung
Speaker 5: Malty Nayak. Thank you so much for bringing us the
Speaker 5: latest in the antitrust fight. Meanwhile, how does it for
Speaker 5: this edition of Bloomberg Technology.
Speaker 3: Do not forget to check out our podcast.
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Speaker 3: From New York, this is Bloomberg Technology.