WEBVTT - Tech's Golden Era and Musk's SEC Troubles 0:00:01.600 --> 0:00:05.920 From Marhart where Innovation, Money and Power Collie in Silicon 0:00:06.040 --> 0:00:10.440 Vallet NBN. This is Bloomberg Technology with Caroline Hyde and 0:00:10.680 --> 0:00:11.760 Ed Ludlow. 0:00:25.200 --> 0:00:27.920 And Caroline Heine Bloomberg's world headquarters in New York and 0:00:28.000 --> 0:00:29.560 Amid Lovelow in San Francisco. 0:00:29.720 --> 0:00:31.800 This is Bloomberg Technology coming up. 0:00:31.880 --> 0:00:35.040 It has been the year for Nvidio Ali stocks and 0:00:35.080 --> 0:00:37.559 lofty valuations mean more than as like one hundred and 0:00:37.600 --> 0:00:39.519 nets is sept for his best year in over a decade. 0:00:39.600 --> 0:00:42.760 Can Tech continue its golden earer going into twenty twenty four? 0:00:43.720 --> 0:00:47.200 Plus it's a must for Musk. A San Francisco federal 0:00:47.320 --> 0:00:51.320 judge has signaled that Elon Musk must testify in the 0:00:51.360 --> 0:00:54.360 SEC Twitter stock pro We're gonna have all the details. 0:00:54.000 --> 0:00:56.680 And the outlook for electric vehicles isn't quite as bright 0:00:56.880 --> 0:00:59.360 as it was six months ago, and the US might 0:00:59.400 --> 0:01:01.480 be to blaze. And we talk about how GM four 0:01:01.480 --> 0:01:04.759 and Tesla contribute to the EV sales setback. 0:01:05.080 --> 0:01:06.800 So we're gonna have a big focus in this show 0:01:06.840 --> 0:01:09.800 today on electric vehicles and the outlook for next year 0:01:10.040 --> 0:01:13.720 because it's changing. This is Friday session. Tesla's higher half 0:01:13.720 --> 0:01:15.960 a percentage point the other names in the red. GM 0:01:16.040 --> 0:01:19.880 is cutting thirteen hundred workers across two factories in Michigan. 0:01:20.280 --> 0:01:22.679 But what all of these stocks have in common were 0:01:22.720 --> 0:01:24.520 the top three at least, is that they're all on 0:01:24.680 --> 0:01:28.800 track for six straight weeks of weekly gains. In GM's case, 0:01:29.040 --> 0:01:31.039 that's the best run of weekly gains going back to 0:01:31.080 --> 0:01:34.640 December twenty fourteen. I bring that up because there's been 0:01:34.680 --> 0:01:38.000 so much negative news, all the data about revised outlooks 0:01:38.000 --> 0:01:41.160 for next year, Cruise, the autonomous driving unit of GM 0:01:41.200 --> 0:01:45.040 being in trouble, Tesla's autopilot probe, and the Recoll Soft 0:01:45.120 --> 0:01:48.640 recall and software update this week. But if you extrapolate 0:01:48.680 --> 0:01:50.920 out these ev stocks have been on a tear at 0:01:50.920 --> 0:01:52.720 the same time as the S and P five hundred 0:01:52.840 --> 0:01:54.960 and Nasdaq one hundred are on their longest and best 0:01:54.960 --> 0:01:57.600 streaks in a decade. Then there's in Video. I think 0:01:57.640 --> 0:02:00.000 in Video is still the big focus for this mark. 0:02:00.360 --> 0:02:02.200 The gain is more than two hundred and thirty percent 0:02:02.520 --> 0:02:05.720 year to date. The news in Friday session was a 0:02:05.720 --> 0:02:07.680 block trade of more than a billion dollars on the 0:02:07.720 --> 0:02:10.760 stop that traded at a pretty lofty level. Seems to 0:02:10.760 --> 0:02:13.720 be having an impact on the market, But again two 0:02:13.800 --> 0:02:16.120 hundred and thirty six percent gain year to date. It 0:02:16.160 --> 0:02:18.960 has been a big contributing factor to the rally that 0:02:19.000 --> 0:02:21.040 we've seen in the Nasdaq one hundred and the S 0:02:21.080 --> 0:02:23.760 and P five hundred. And the question is, well, what 0:02:23.919 --> 0:02:28.680 happens if Nvidia just stops in its momentum halts? Would it? 0:02:28.840 --> 0:02:29.280 Should it? 0:02:29.400 --> 0:02:31.720 Nancy Kurtin is the person to be asking, Global COO 0:02:31.880 --> 0:02:36.000 of Ulti tenam and Global. A lot of money under management, 0:02:36.280 --> 0:02:39.320 a lot of working through what has been decades of 0:02:39.600 --> 0:02:41.840 whether we see money and exuberance into tech or not. 0:02:41.919 --> 0:02:45.280 From your perspective, are the valuations of a name like 0:02:45.760 --> 0:02:47.520 in video rational at this moment? 0:02:48.360 --> 0:02:51.520 Look, Caroline, they certainly discount a lot, that's for sure, 0:02:51.680 --> 0:02:54.840 at more than thirty times earnings on average. And I 0:02:54.840 --> 0:02:57.600 think one of the things we're seeing now is competition 0:02:57.760 --> 0:03:01.040 to in video. You know, a copy has an eighty 0:03:01.080 --> 0:03:05.560 five percent monopoly, saw their profits go up seven times 0:03:05.639 --> 0:03:09.920 in a year, and is facing a trillion dollar market opportunity. 0:03:10.160 --> 0:03:13.880 We should expect competition, and so far, I think when 0:03:13.919 --> 0:03:16.920 we look at what Intel an AMD have brought to 0:03:16.960 --> 0:03:21.200 the table from a hardware perspective, it looks pleasing. But 0:03:21.320 --> 0:03:24.320 Nvidia has quite a competitive mode in terms of Kuda 0:03:24.800 --> 0:03:28.800 software developer tools, etc. So you know, there is a 0:03:28.800 --> 0:03:31.880 lot to go for in jen Ai. And don't be 0:03:32.320 --> 0:03:37.280 don't be so quick to do work to put down these. 0:03:37.160 --> 0:03:41.160 Valuations, Nancy. We have covered that competition so deeply on 0:03:41.200 --> 0:03:44.160 the program in the last two weeks, starting with amdsm 0:03:44.200 --> 0:03:46.000 I three hundred X. I was there on the ground 0:03:46.000 --> 0:03:48.680 with Lisa Sue twenty four hours ago. You have Intel 0:03:48.760 --> 0:03:52.960 talking about GUDI three. What is the investment strategy. Do 0:03:53.040 --> 0:03:55.560 you just pick one of those names go with it 0:03:55.680 --> 0:03:57.680 or do you need to have all three in the portfolio. 0:03:58.320 --> 0:03:59.960 Look, I think you're going to have to see how 0:04:00.080 --> 0:04:04.040 this evolves. Remember, neither of these chips are available at 0:04:04.080 --> 0:04:07.720 the moment, So if you're a company building a Genai application, 0:04:08.560 --> 0:04:11.880 it's still h one hundred, it's still the Nvidia chip. 0:04:12.400 --> 0:04:14.400 And by the way, Nvidia is not going to stand 0:04:14.480 --> 0:04:18.240 still here. You know they've got things on the horizon, 0:04:18.400 --> 0:04:21.960 a very aggressive product launch as we head into twenty 0:04:22.000 --> 0:04:26.560 four and twenty five. You know B one hundred aka Blackwell, 0:04:27.160 --> 0:04:30.839 So you know, let's not write off the Nvidia dvantage. 0:04:30.880 --> 0:04:35.280 But as I said, their software ecosystem, Kuda in particular 0:04:35.920 --> 0:04:39.280 is super powerful for in video, moving. 0:04:39.000 --> 0:04:41.479 Away from pats, the picks and the shovels the chips 0:04:41.520 --> 0:04:44.359 to actually who are building the models, who's applying the 0:04:44.360 --> 0:04:48.240 models most efficiently. It's been all about Microsoft ascend degree 0:04:48.400 --> 0:04:51.640 and starting to be alphabet Do you think we need 0:04:51.680 --> 0:04:53.960 to broaden our perspective there as well? How it's starting 0:04:54.040 --> 0:04:56.080 to see Generator AI and PATA business models. 0:04:56.279 --> 0:04:58.359 Do you know? I think there was a lot of 0:04:58.360 --> 0:05:01.880 criticism of Gemini, which course was Google's launch around two 0:05:01.960 --> 0:05:06.200 weeks ago, around latency issues, etc. Okay, put that aside. 0:05:06.279 --> 0:05:08.719 I think it misses the point. What we saw with 0:05:08.800 --> 0:05:13.320 Google was multimodal. I mean that interaction had inference, it 0:05:13.360 --> 0:05:16.719 had text, it had image, it had translation, it had 0:05:16.720 --> 0:05:19.320 coding all at once. So I think it gives you 0:05:19.360 --> 0:05:22.200 a future image of where this jenai is going. As 0:05:22.240 --> 0:05:25.039 you watch that silly thing with the guitar and the duck, 0:05:25.160 --> 0:05:27.240 do see it? If you haven't seen it, you know 0:05:27.320 --> 0:05:30.919 you need to think about the applications and financial services 0:05:30.960 --> 0:05:35.320 in healthcare, in the industrial sector. This is absolutely huge. 0:05:35.480 --> 0:05:38.000 And you know I reckon as I was watching it, Caroline, 0:05:38.080 --> 0:05:41.160 that you know maybe twenty six, twenty seven, maybe twenty eight. 0:05:41.600 --> 0:05:44.680 We're going to look at the mouse, the keyboard. I 0:05:44.680 --> 0:05:47.000 don't know what are those things like as in history, 0:05:47.200 --> 0:05:50.159 prehistoric stuff, right, because you're going to be able to 0:05:50.200 --> 0:05:53.480 interact with the computer in a completely different way and 0:05:53.520 --> 0:05:56.239 the coding language is going to be English, So lots 0:05:56.240 --> 0:05:57.760 of interesting implications. 0:05:58.400 --> 0:06:00.880 Nancy, We're thoroughly enjoying this conversation. One of the things 0:06:00.920 --> 0:06:02.680 I was so interested about you is earlier in your 0:06:02.760 --> 0:06:06.919 career you ran venture capital desks private equity desks, and 0:06:07.000 --> 0:06:10.080 I wonder if that changes your approach as a CIO 0:06:10.200 --> 0:06:13.200 when you look across public equities. Are you kind of 0:06:13.200 --> 0:06:16.000 conscious of what's happening upstream in some of the earliest 0:06:16.000 --> 0:06:20.200 stage companies who might benefit from what Caroline I call 0:06:20.200 --> 0:06:23.520 the picks and shovels, Right, the H one hundred's underpinning 0:06:23.600 --> 0:06:24.520 the work in the R and D. 0:06:25.440 --> 0:06:28.599 You know absolutely. So you know, we have investments in 0:06:28.640 --> 0:06:31.960 both public and private markets, and on the private side, 0:06:32.000 --> 0:06:33.880 I want to share with you a snippet one of 0:06:33.920 --> 0:06:36.960 our private equity managers, so now we're talking about buyout 0:06:37.839 --> 0:06:40.920 reports that every single one of their companies is using 0:06:41.000 --> 0:06:45.120 Jenai in some form and they are seeing productivity enhancements 0:06:45.440 --> 0:06:49.280 of thirty to forty percent. That's huge, okay, and that's 0:06:49.320 --> 0:06:53.039 in private equity buyout and the venture side. Our managers 0:06:53.080 --> 0:06:59.960 are reporting enormously interesting applications, disruptive business models, horizontal u 0:07:00.080 --> 0:07:03.480 U of Genai, vertical uses of Jenai. So there is 0:07:03.680 --> 0:07:06.640 so much more to come here. We're aware of what's 0:07:06.680 --> 0:07:10.040 going on with the infrastructure layer, as you mentioned, but 0:07:10.200 --> 0:07:12.840 once we get past that twenty four and into twenty five, 0:07:13.280 --> 0:07:18.040 expect a whole host of disruptive business models and more importantly, 0:07:18.440 --> 0:07:21.160 business applications. We're going to go to work and this 0:07:21.200 --> 0:07:24.800 will be embedded in business processes, and we're still early 0:07:24.840 --> 0:07:27.200 in that journey so far this year. 0:07:27.640 --> 0:07:32.200 So, boy, when you're thinking about allocating and as global 0:07:32.240 --> 0:07:35.320 CIO of what is sixty seven million dollars worth of money, 0:07:36.000 --> 0:07:38.080 where do you go private versus public? Where do you 0:07:38.120 --> 0:07:40.800 think the valuations and more sustainable? Where has the pain 0:07:40.880 --> 0:07:42.360 been felt? Necessarily? 0:07:42.400 --> 0:07:42.960 So already? 0:07:43.560 --> 0:07:46.640 So, first of all, everything we do is customized to clients, 0:07:46.680 --> 0:07:48.760 and so it has to meet their return, their risk, 0:07:48.840 --> 0:07:52.679 their liquidity preference. Because obviously private equity and venture capital 0:07:52.680 --> 0:07:55.240 come with the longer term time horizon, so it has 0:07:55.280 --> 0:07:58.800 to be appropriate to client circumstance. But having said that, 0:07:58.880 --> 0:08:02.440 we do recommend for those clients that it's appropriate to 0:08:02.560 --> 0:08:05.360 have their foot in both the public and the private markets. 0:08:05.680 --> 0:08:08.440 Remember the public markets today in the United States, thirty 0:08:08.480 --> 0:08:13.080 percent of the index is seven companies, pretty concentrated, pretty 0:08:13.120 --> 0:08:16.440 highly correlated to those seven stocks, etc. Although we think 0:08:16.480 --> 0:08:18.680 the other four hundred and ninety three represent some good 0:08:18.760 --> 0:08:22.760 value here. But nonetheless you're able to play a whole 0:08:22.840 --> 0:08:27.640 host of different parts of the economy, different parts of companies, 0:08:27.920 --> 0:08:33.240 disruptive companies, core businesses. Remember there's forty thousand so called 0:08:33.280 --> 0:08:36.600 private companies in the States today. What do we have 0:08:36.679 --> 0:08:39.400 fifteen hundred public companies? So you can see you're not 0:08:39.480 --> 0:08:42.800 really accessing the full part of the economy. So again, 0:08:43.000 --> 0:08:46.280 for clients where it's appropriate, we do look like both 0:08:46.320 --> 0:08:49.200 public and private markets. Then we do believe that the 0:08:49.240 --> 0:08:53.440 long term return from private equity, buyout, growth and venture 0:08:53.720 --> 0:08:54.960 can be quite substantial. 0:08:55.400 --> 0:08:57.400 Do you come back. It's been great to have you on, Nancy. 0:08:57.559 --> 0:08:58.480 Thank you so much. 0:08:58.640 --> 0:09:02.120 Nasi keasan human global we thank her. I mean, while 0:09:02.160 --> 0:09:05.080 coming up elon Musk's potential AI dominance, We're gonna stick 0:09:05.080 --> 0:09:07.559 on the AI theme and talk about excess grock how 0:09:07.640 --> 0:09:13.760 might overtake chatchipt This is blameleog technology. 0:09:19.640 --> 0:09:20.840 So Elon Musk's. 0:09:20.520 --> 0:09:23.520 Groc Ai platform might actually be a pretty major contender 0:09:23.520 --> 0:09:25.040 in the battle for chatbot dominance. 0:09:25.360 --> 0:09:26.920 Remerg Seth Biingman joins us. 0:09:26.840 --> 0:09:31.400 Now to explain what is perhaps it's outperformance in an 0:09:31.480 --> 0:09:34.000 area of real time news. 0:09:34.559 --> 0:09:35.160 How's it going? 0:09:36.120 --> 0:09:38.800 Yeah, that's right. I think that when this thing first launched, 0:09:38.880 --> 0:09:40.640 no one wanted to take it seriously. I mean a 0:09:40.640 --> 0:09:44.079 lot of the promotion around this was that it was irreverent, profane. 0:09:44.240 --> 0:09:45.960 If you looked on the Twitter account they set up 0:09:46.000 --> 0:09:48.840 for its highlighted post, it was mostly making bad jokes 0:09:48.880 --> 0:09:51.959 about how babies are born. But when we I rolled 0:09:52.000 --> 0:09:53.880 out more broadly this week to anyone willing to pay 0:09:53.880 --> 0:09:56.719 sixteen dollars to X for a premium account, which is 0:09:56.720 --> 0:09:58.800 certainly a limiting factor for how big it'll get, and 0:09:58.800 --> 0:10:00.400 when we looked at it, we saw a quite good 0:10:00.440 --> 0:10:02.960 for a real time news. It has access to Twitter's 0:10:03.040 --> 0:10:05.840 real time pipeline of digga, and Twitter has I should 0:10:05.880 --> 0:10:07.959 keep saying, X has cracked down and access to that 0:10:08.040 --> 0:10:10.640 data for other companies, So it's kind of unique at 0:10:10.679 --> 0:10:12.800 this point. It's when we asked the summarize whether the 0:10:12.840 --> 0:10:17.720 climate debates in Dubai or looking at Opening Eyes data 0:10:17.720 --> 0:10:22.040 licensing partnerships, we saw that it was more accurate up 0:10:22.120 --> 0:10:24.080 full time than chatchy bt mborn. 0:10:25.160 --> 0:10:27.560 So sef I asked a very basic question on grok 0:10:27.640 --> 0:10:30.640 this morning, who am I? Who is Ed Ludlow, and 0:10:30.760 --> 0:10:34.640 GROC does have a more contemporaneous, up to date answer 0:10:34.720 --> 0:10:37.720 than chat GPT, and chat GPT basically said, my data 0:10:37.760 --> 0:10:40.360 is relevant as of jan twenty twenty two. Make sure 0:10:40.400 --> 0:10:42.800 you actually go and check an original source. But it 0:10:42.840 --> 0:10:44.560 doesn't get it all right, because when I asked it 0:10:44.640 --> 0:10:47.360 to tell me about Bloomberg Technology, it told me that 0:10:47.400 --> 0:10:49.960 Emily Chang, dear friend by the way, is still the 0:10:50.000 --> 0:10:53.200 host along with Corey Johnson. That's pretty out of date. 0:10:53.480 --> 0:10:57.360 The point is this is about the how recent the 0:10:57.440 --> 0:10:59.000 data it was trained on is right. 0:10:59.080 --> 0:11:02.200 That's right, kicking myself from not asking it who ed lewis, 0:11:02.320 --> 0:11:04.360 but I'm glad that you got to that question. I 0:11:04.360 --> 0:11:05.800 think the important thing to keep in mind here at 0:11:05.840 --> 0:11:07.400 a higher level, is that there's a real arms where 0:11:07.400 --> 0:11:09.880 he's going on right now, not just for how chadbods 0:11:09.920 --> 0:11:12.880 perform day to day, but how they can access and 0:11:12.920 --> 0:11:16.560 answer questions in real time. It's so central to Google 0:11:16.640 --> 0:11:18.840 and to Microsoft in particular to build a surface real 0:11:18.840 --> 0:11:21.120 time information. And what we're seeing is like, if you're 0:11:21.160 --> 0:11:23.600 built on top of a social media platform, you have 0:11:23.600 --> 0:11:25.480 a better shot at that. The flip side, as you're 0:11:25.480 --> 0:11:28.600 pointing to, is that they're surfacing content from tweets and 0:11:28.640 --> 0:11:31.520 accounts that may not be as authoritive of So that's 0:11:31.559 --> 0:11:33.319 the problem. 0:11:33.440 --> 0:11:36.240 Seth Figmun, who leads our AI coverages editor And as 0:11:36.240 --> 0:11:38.640 we saw in that clip, Lindy Akarinho actually replied to 0:11:38.679 --> 0:11:41.400 my post saying rock for the win, but then she 0:11:41.440 --> 0:11:43.800 didn't see the post where it gave the wrong answer. 0:11:44.200 --> 0:11:47.120 We keep guying Bloomberg. Seth Figmann, thank you so much. Okay. 0:11:47.120 --> 0:11:50.480 Another story in Elon Musk's world, a San Francisco judge 0:11:50.480 --> 0:11:54.400 has signaled that Musk must testify about his Twitter stock 0:11:54.440 --> 0:11:57.120 purchases ahead of the company buy out last year. This 0:11:57.160 --> 0:11:59.680 is part of an SEC investigation in joining us now 0:12:00.040 --> 0:12:03.360 Bloomberg's Austin Weinstein in Washington. The judge is basically saying, 0:12:03.679 --> 0:12:08.120 if you two can't sort out getting together and talking 0:12:08.400 --> 0:12:09.719 then I will intervene. 0:12:11.200 --> 0:12:14.959 Yeah, the judge made it pretty clear that she seemed 0:12:15.040 --> 0:12:16.880 that to be in the position that she was going 0:12:16.920 --> 0:12:19.079 to a way in favor of the SEC here in 0:12:19.200 --> 0:12:22.640 enforcing their subpoena. It's very rare for the SEC to 0:12:23.040 --> 0:12:25.160 get a no show on it subpoena like Elan did 0:12:25.200 --> 0:12:27.400 earlier this year. It's very rare for them to sue 0:12:28.120 --> 0:12:29.160 to enforce that subpoena. 0:12:29.200 --> 0:12:31.359 And it's even more rare for the SEC. 0:12:31.320 --> 0:12:34.320 To lose in court on a bid to enforce a subpoena. 0:12:35.280 --> 0:12:38.360 Okay, so chances perhaps old on his side for this. 0:12:38.600 --> 0:12:40.959 He does feel though that he's already answered an awful 0:12:40.960 --> 0:12:43.720 lot of questions, not once, but twice. Is there any 0:12:43.800 --> 0:12:47.000 sort of well context to this where we've seen people 0:12:47.080 --> 0:12:48.600 have to come in and give evidence time and time 0:12:48.600 --> 0:12:51.800 and time again, there's a lot of. 0:12:51.760 --> 0:12:56.280 Situations when in an SEC investigation they ask more questions 0:12:56.760 --> 0:12:59.160 the facts of this investigation, which is one of a 0:12:59.280 --> 0:13:04.280 number into Elon Musk's companies go back to his purchase 0:13:04.320 --> 0:13:06.600 of Twitter, when he bought up a large stake when 0:13:06.640 --> 0:13:09.320 the company was pot private, and so they interviewed him 0:13:09.400 --> 0:13:11.800 close to his purchase of Twitter and then earlier this year, 0:13:11.840 --> 0:13:14.840 they did their investigation, they talked to a whole lot 0:13:14.840 --> 0:13:16.600 of people, and they wanted to come back to Elon 0:13:16.679 --> 0:13:19.400 and say, hey, we have some more questions. Let's sit 0:13:19.480 --> 0:13:22.559 down and have a conversation and get your testimony here. 0:13:23.080 --> 0:13:28.000 And basically the SEC said that he played you know, 0:13:28.120 --> 0:13:30.600 catch me if you can, and tried to play fast 0:13:30.600 --> 0:13:32.640 and loose with the location and then move the date, 0:13:32.760 --> 0:13:34.840 and the SEC just kind of got sick of it. 0:13:35.160 --> 0:13:37.840 But it's fairly normal for them to go back to 0:13:38.360 --> 0:13:40.920 what they would think is a key witness, you know, 0:13:41.040 --> 0:13:43.920 the CEO, the guy who bought the company eventually and 0:13:43.960 --> 0:13:46.120 asked some more questions after doing that investigation. 0:13:46.640 --> 0:13:50.120 I meanwhile, Musk currently feeling in it's harassment by the SEC. 0:13:50.320 --> 0:13:53.200 According to a filing, Austin weisteeing. 0:13:52.800 --> 0:13:55.480 Me thank you so much for the background on order. 0:13:55.360 --> 0:14:06.320 That time for talking tech and first up in the 0:14:06.320 --> 0:14:10.800 news crew. Trim, an ai startup founded by LA founder 0:14:10.840 --> 0:14:15.240 babvish Agorole, has launched India's first multi lingual LM, which 0:14:15.240 --> 0:14:19.480 can generate text in ten Indian languages. The startup is 0:14:19.520 --> 0:14:22.720 also developing data centers and aims to create servers and 0:14:22.800 --> 0:14:27.120 supercomputers for an AI ecosystem, and Google is changing its 0:14:27.160 --> 0:14:29.920 maps tools so that the company no longer has access 0:14:30.200 --> 0:14:34.840 to users individual location histories. This effectively cuts off its 0:14:34.880 --> 0:14:38.240 ability to respond to law enforcement warrants that ask for 0:14:38.360 --> 0:14:42.520 data on everyone who is in the vicinity of a crime. Plus, 0:14:42.520 --> 0:14:46.120 an examination of FDA records shows the administration is doing 0:14:46.200 --> 0:14:50.080 little to cut down on misleading drug claims on social media, 0:14:50.160 --> 0:14:54.320 despite having the power to oversee prescription drug marketing. For decades, 0:14:54.480 --> 0:14:58.920 the FDA has regulated advertising on television, radio, and in magazines. 0:14:59.160 --> 0:15:01.680 It released guideline into social media in twenty fourteen, but 0:15:01.840 --> 0:15:06.320 since then it's done little to regulate influence influencers sorry, 0:15:06.360 --> 0:15:08.560 who may or may not have had direct ties to 0:15:08.640 --> 0:15:09.840 those manufacturers. 0:15:09.840 --> 0:15:12.120 Caroline, Yeah, that's an interesting one, and we want to 0:15:12.120 --> 0:15:14.520 broaden that sort of a conversation and think about how 0:15:14.520 --> 0:15:17.080 the FTC is tackling it, because it's actually issued a 0:15:17.080 --> 0:15:21.240 warning and some letters to beverage companies and influencers on 0:15:21.280 --> 0:15:24.720 potential violations of the FDC Act in their social posts 0:15:24.720 --> 0:15:28.440 on Instagram and TikTok, where they aren't is accused adequately 0:15:28.440 --> 0:15:31.720 disclosing their payment by the industry and as they promote 0:15:31.720 --> 0:15:35.040 the safety of in particular artificial sweetener or the consumption 0:15:35.120 --> 0:15:38.240 of sugar containing products for example, joining us to discuss 0:15:38.280 --> 0:15:41.120 all of this and what regulation could in fact becoming 0:15:41.160 --> 0:15:44.040 their way when it comes to AI and influencing is 0:15:44.080 --> 0:15:46.120 Mary Angel is just the former Director of the Revision 0:15:46.120 --> 0:15:49.000 of Advertising Practices at the FTC, currently serving as a 0:15:49.040 --> 0:15:52.000 Senior Vice president for the Policy actuble B. That's PBB 0:15:52.280 --> 0:15:53.440 National Programs. 0:15:53.960 --> 0:15:54.280 Mary. 0:15:54.640 --> 0:15:57.840 It's a really interesting one. What weren't influencers doing because 0:15:57.840 --> 0:16:01.000 they seem to be saying hashtag ad or sponsor, But 0:16:01.320 --> 0:16:03.040 is that not enough in this context? 0:16:04.560 --> 0:16:07.040 Yeah, it's really interesting that the FTC was saying here 0:16:07.200 --> 0:16:09.160 that it wasn't enough even if you had a big 0:16:09.240 --> 0:16:13.080 bald ad or sponsored disclaim around your post, because it 0:16:13.120 --> 0:16:15.880 wasn't clear in this case who the sponsor was. Now, 0:16:15.920 --> 0:16:19.200 typically a brand product will appear in a post, so 0:16:19.280 --> 0:16:19.560 you know. 0:16:19.480 --> 0:16:19.960 Who it is. 0:16:20.040 --> 0:16:23.000 But in this case they were talking about sugar artificial 0:16:23.040 --> 0:16:26.000 sweeteners as pertame, and the FDC said, look, consumers don't 0:16:26.000 --> 0:16:27.400 know who the sponsor is, so you've got. 0:16:27.320 --> 0:16:31.160 To say who that is, Okay, So more disclosure and 0:16:31.240 --> 0:16:34.640 ultimately whether a beverage company is behind your post and 0:16:35.160 --> 0:16:39.160 what's led you to do the posting. How ultimately is 0:16:39.200 --> 0:16:41.960 the FTC and others able to keep a track of this, 0:16:42.160 --> 0:16:43.880 How are we going to be monitoring? Is it up 0:16:43.880 --> 0:16:46.880 to individual consumers to be saying that this influencer hasn't 0:16:46.920 --> 0:16:49.760 been clear and or are they going to adopt uses 0:16:49.760 --> 0:16:52.640 of AI for this sort of program. 0:16:53.200 --> 0:16:57.360 That's a good question. I could see the FTC adapting 0:16:57.400 --> 0:17:00.920 AI to kind of scour a social media for a post. 0:17:01.000 --> 0:17:03.560 But typically absolutely. 0:17:03.160 --> 0:17:06.000 The FTC will pay attention if consumers are complaining at 0:17:06.000 --> 0:17:07.000 their aren't disclosures. 0:17:07.680 --> 0:17:09.600 A lot of times it'll be a. 0:17:09.560 --> 0:17:11.480 Media report, and I think in this case it was 0:17:11.520 --> 0:17:14.800 the Washington Post did a report on how these influencers 0:17:14.840 --> 0:17:16.119 were not properly disclosing. 0:17:17.000 --> 0:17:21.840 What ends up being the stick in this particular example, 0:17:21.920 --> 0:17:24.560 as it finds, is it what does the FTC end 0:17:24.640 --> 0:17:25.200 up exerting. 0:17:26.560 --> 0:17:30.359 Yeah, So in this case, the FTC sent warning letters 0:17:30.400 --> 0:17:33.080 to all these influencers and to the American Beverage Association 0:17:33.160 --> 0:17:36.399 and Canadian Sugar Institute and said here, look, this is 0:17:36.400 --> 0:17:38.040 what you should be doing, here's what you didn't do 0:17:38.119 --> 0:17:41.080 it right and put and gave them notice of a 0:17:41.119 --> 0:17:44.159 penalty they're a penalty offense authority, which means that the 0:17:44.240 --> 0:17:47.760 FTC would have the ability to find or impose civil 0:17:47.760 --> 0:17:50.560 penalties if there are future violations, and say. 0:17:50.640 --> 0:17:53.159 I'm the corporate coming to you who you know. They 0:17:53.160 --> 0:17:56.320 haven't always got the most fine detailed control over an influencer. 0:17:56.440 --> 0:17:58.240 How they meant to ensure. 0:17:57.960 --> 0:18:00.360 That the way in which their messaging is going out 0:18:00.359 --> 0:18:02.760 and the influences they used to work with are abiding 0:18:02.800 --> 0:18:04.280 by new FTC regulation. 0:18:05.720 --> 0:18:07.639 So there are three things they should do. First is 0:18:07.680 --> 0:18:10.440 they should have written policies, and the policy should be 0:18:10.480 --> 0:18:11.280 pretty detailed. 0:18:11.560 --> 0:18:12.520 Don't just say. 0:18:12.760 --> 0:18:16.840 Comply with the FTC's endorsement guides. Say that, but also 0:18:17.119 --> 0:18:22.240 highlight the important provisions that are important for influencers, like 0:18:22.359 --> 0:18:25.480 clear and conspicuous disclosures and explain what that means, things 0:18:25.520 --> 0:18:28.919 like don't rely on platform disclosures. And then second, have 0:18:29.040 --> 0:18:33.399 an active monitoring program periodically review what your influencers are 0:18:33.400 --> 0:18:36.520 posting to make sure that they're doing it right. And then, third, 0:18:36.720 --> 0:18:39.639 if they're not doing it right, warn them, and then 0:18:39.720 --> 0:18:43.000 ultimately don't use them anymore if they insist upon posting 0:18:43.040 --> 0:18:44.480 without doing proper disclosures. 0:18:45.119 --> 0:18:48.720 Meanwhile, of course, the FTC has been busy, to say 0:18:48.720 --> 0:18:51.280 the least, and they are trying to wrap their hands 0:18:51.320 --> 0:18:55.720 around ultimately relationships between for example, well Open AI and 0:18:55.800 --> 0:18:58.000 Microsoft and the way in which consumers are going to 0:18:58.040 --> 0:18:59.720 be protected in this new age. 0:18:59.440 --> 0:19:00.960 Of official intelligence. 0:19:01.080 --> 0:19:02.880 How have you been looking at that as a new 0:19:02.960 --> 0:19:04.320 area of focus and concern? 0:19:06.119 --> 0:19:10.040 Yeah, so absolutely there's an opportunity here for responsible businesses 0:19:10.480 --> 0:19:13.440 to get ahead of regulation and come together and to 0:19:13.480 --> 0:19:17.240 exercise independent industry self regulation. And what I mean by 0:19:17.280 --> 0:19:22.600 that is to establish clear standards with monitoring and public 0:19:22.640 --> 0:19:26.920 reporting and to comply with those standards. Industry has a 0:19:26.960 --> 0:19:29.879 good idea of what the government is looking for right now. 0:19:30.040 --> 0:19:32.199 It's going to take some time for there to be 0:19:32.320 --> 0:19:36.160 legislation or regulation, and there's a real opportunity for businesses 0:19:36.200 --> 0:19:40.760 to show leadership by engaging in robust industry self regulation 0:19:40.920 --> 0:19:43.920 with accountability. And there's got to be a third party 0:19:44.359 --> 0:19:48.280 to hold them accountable to complying with their standards. We 0:19:48.320 --> 0:19:50.720 don't want companies to grade their own homework, so we 0:19:50.760 --> 0:19:52.879 need a third party to oversee compliance. 0:19:52.920 --> 0:19:56.159 And is that what BBB National Programs ends up being 0:19:56.280 --> 0:19:59.520 or where at the moment have companies turned to for 0:19:59.640 --> 0:20:02.680 this sort of compliance ahead of regulation becoming formal. 0:20:03.760 --> 0:20:06.880 Absolutely so BBB National Programs. We are a nonprofit that 0:20:07.160 --> 0:20:11.639 promotes marketplace trust by providing those sorts of independent, third 0:20:11.680 --> 0:20:15.960 party self regulatory and accountability programs in all sorts of 0:20:15.960 --> 0:20:20.760 different industries, advertising privacy and Earlier this year we release 0:20:20.880 --> 0:20:24.080 Principles and Protocols for the ethical use of AI in 0:20:24.200 --> 0:20:27.159 hiring and recruiting. We worked with about a dozen and 0:20:27.240 --> 0:20:31.040 a half large employers to come up with principles for 0:20:31.119 --> 0:20:35.320 here is how to use AI ethically to mitigate bias 0:20:35.520 --> 0:20:39.400 and to actually promote inclusion in the workforce. Knowing that 0:20:39.520 --> 0:20:42.720 eventually government may regulate there, but there's lots of companies 0:20:42.760 --> 0:20:45.040 can and should be doing even before that time. 0:20:45.240 --> 0:20:48.760 And look New York already in many ways regulating yes, 0:20:48.880 --> 0:20:50.680 AIS applied to the world of work. 0:20:50.720 --> 0:20:52.399 We thank you so much, Mary angel. 0:20:52.520 --> 0:20:55.520