Speaker 1: From Marhart where Innovation, Money and power Collie in Silicon
Speaker 1: Vallet NBN. This is Bloomberg Technology with Caroline Hyde and
Speaker 1: Ed Ludlow.
Speaker 2: I'm Caroline Heindet Bluemog's world headquarters in New York, and
Speaker 2: I'm Ed Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology coming up.
Speaker 2: Micron it's warning on its China sales again amid those
Speaker 2: geopolitical tensions, sending the shares lower. We are going to
Speaker 2: discuss chip companies. Are they diversifying their supply chains.
Speaker 4: We'll discuss.
Speaker 5: Plus we'll speak to the head of the Dblow Universe
Speaker 5: Activision Blizzard as the video game maker sees its best
Speaker 5: debut of all time.
Speaker 2: I'm Billionaires at lunch in a musque, Bernard, Anna. They
Speaker 2: hit town for a power lunch in Paris with their families.
Speaker 2: We'll break down exactly what we've learned from their day out.
Speaker 2: But first let's check in on these markets because we've
Speaker 2: got some nervousness, whether it's around geopolitics China US related
Speaker 2: when it comes to Micron nuclear, when it comes to
Speaker 2: Russia and Belarus. We just have enough to take the
Speaker 2: steam out of this market. As we head towards the
Speaker 2: weekend and what has been, of course a key run
Speaker 2: up post of the FED. I think it's been one
Speaker 2: of the best weeks for global stocks in months, at
Speaker 2: least since March. We're see NASA currently down tenth of
Speaker 2: a percent at the moment, the socks, the chips under pressure.
Speaker 2: As we talk Micron a little bit more in a moment, ED,
Speaker 2: I know you've got your eye on that, and interesting
Speaker 2: moves that we have in the bond market. We seem
Speaker 2: to be rebounding. We had yields pull lower yesterday. Today
Speaker 2: the march back hires. We have a couple of FED
Speaker 2: speak out. They're really saying, look, we've still got to
Speaker 2: focus on inflation.
Speaker 4: Maybe we do still need to tighten. Moving on, have
Speaker 4: a look.
Speaker 2: At what's happening to our risk assid a choice when
Speaker 2: it comes to the tech sector. We are looking at
Speaker 2: Bitcoin and look, has had quite the volatile week, particularly
Speaker 2: in the fourteenth and the fifteenth, but we've rerounded. Still
Speaker 2: under some pressure, we're some that twenty six thousand dollars level,
Speaker 2: but relatively sanguine when we think about all the regular
Speaker 2: focus on this particular asset.
Speaker 5: Then I'm hitting the earning story with Adobe, and yes
Speaker 5: it's about generative AI as well, raising its four year
Speaker 5: outlook for profit and revenue. But we're starting to get
Speaker 5: a censor of management about how we go from the
Speaker 5: headline and the hype to how this is impacting a
Speaker 5: company like Adobe's demand.
Speaker 3: Right for its software offerings.
Speaker 5: We're going to get more details later in the show
Speaker 5: and the Bloomberg Intelligence react.
Speaker 3: But look at the shares.
Speaker 5: We're up two and a half percent since that commentary
Speaker 5: overnight trading at a February high. This is a stock
Speaker 5: that's up fifty percent year to date. Part of that
Speaker 5: is the hype. We will give you the granular detail
Speaker 5: and analysis from bi Otherwise, I'm looking at a tale
Speaker 5: of two chip stocks. In the first instance, Intel is
Speaker 5: now down half a percentage point.
Speaker 3: It had been markedly higher.
Speaker 5: Two reports out of Europe, the first that it's going
Speaker 5: to invest five billion dollars in a facility in Poland,
Speaker 5: the second being that it will get around eleven billion
Speaker 5: dollars of subsidy from Germany. We're going to get into
Speaker 5: that very shortly. This idea that Gelsing is playing with
Speaker 5: the smart capital approach. You use Capex, you use co investment,
Speaker 5: but you also look at publicly available money as well.
Speaker 5: That stock has turned a corner. And then micro un
Speaker 5: down one point six percent. It's warning that sales from
Speaker 5: its customers that have Chinese headquarters that fifty percent of
Speaker 5: it's under risk, and we're going to talk about why.
Speaker 5: But basically, this is China looking at a cybersecurity crackdown
Speaker 5: and that could hurt mic run in the long run.
Speaker 5: We're going to actually go straight to this, I think, Kara,
Speaker 5: We've got a good guest with you on set.
Speaker 2: Yeah, our very own Paula Pencar of Bloomberg Intelligence. You
Speaker 2: can really break down ultimately how much Micron's already tried
Speaker 2: to pivot, already tried to tell the market, tell the street,
Speaker 2: how much exposure they have from the geopolitics it can't control.
Speaker 2: But why this addition, what else is happening at the moment.
Speaker 6: Well, first of all, Mark Murphy, CFO of Micron recently
Speaker 6: said at a Golden SAS conference on May thirty first
Speaker 6: that even though they provided this guidance, that they were
Speaker 6: still uncertain because China never really defined what they were
Speaker 6: looking at and what this critical infrastructure security risk really entailed.
Speaker 7: So it really doesn't come as a huge surprise to me.
Speaker 6: Yet the market was sort of like relying on Micron's
Speaker 6: guidance of low single digit to high single digit percent
Speaker 6: impact on revenue.
Speaker 7: Higher than that.
Speaker 6: Now it's low double digits, twelve thirteen percent.
Speaker 2: And ultimately, what can it do when it's so dependent.
Speaker 2: Still from a client perspective on China, how are you
Speaker 2: seeing trying to diversify, Because yes, you can diversify your
Speaker 2: supply chains, but how do you pivot away from dependence
Speaker 2: on setting certain gear to certain customers.
Speaker 6: Micron's in a really tough spot because they don't want
Speaker 6: to give up the huge China market. It's significant and
Speaker 6: when they recover and when the Chinese start buying smartphones
Speaker 6: again and when all that picks up, I mean, Micron
Speaker 6: wants to be a part of that. Yet we've got
Speaker 6: this whole drive in the US to decouple. So they're
Speaker 6: trying really hard to sort of keep relations good with China,
Speaker 6: yet at the same time diversify to other regions.
Speaker 7: So I think that there will be diversification. We're seeing
Speaker 7: it happen.
Speaker 6: We're seeing capital going into other regions in the world away.
Speaker 7: From China and Southeast Asia.
Speaker 6: But if you look at what we saw announced just today,
Speaker 6: Micron is putting six hundred million dollars into a test
Speaker 6: and packaging facility in China. Is China pushing them to
Speaker 6: do that, coercing them to do that using a ban
Speaker 6: on their product as some leverage I don't know, or
Speaker 6: is it Micron basically saying, you know, at some point
Speaker 6: tensions with China will go away. This is a huge market.
Speaker 6: We want to keep our finger, you know, we want
Speaker 6: to stay in there in that.
Speaker 5: Market, Paula, let's stay global. But recap some of the
Speaker 5: other headlines from the top of the show. Bloomberg reporting
Speaker 5: that Intel will get about eleven billion dollars of subsidies
Speaker 5: from the German government for a chip plant in that nation.
Speaker 5: This is part of the smart capital approach that Pat
Speaker 5: Gelsinger has been telling me about CAPEX. Get some co investors,
Speaker 5: but get as much money that's available from the public
Speaker 5: sector as possible.
Speaker 3: What's your reaction to that reporting.
Speaker 7: Look, Pat Gelsinger is being really smart.
Speaker 6: He is angling in every way he can to get
Speaker 6: as much money as he can, to keep his costs
Speaker 6: down and to widen and broaden his reach in the market.
Speaker 6: I mean, Germany is a great market to be in
Speaker 6: and partnering with the government is a smart move. And
Speaker 6: Pat continue Gelsinger continues to just make really smart you know,
Speaker 6: chessboard moves.
Speaker 5: All right, PAULA pen called Bloomberg Intelligence. Great to have
Speaker 5: you on set with New York. Let's continue the conversation
Speaker 5: the global narrative around security chips of Chris Rulin. Now
Speaker 5: he's the CEO and founder of Phosphorus Cybersecurity, but also
Speaker 5: served as an advisor to the US government on cybersecurity
Speaker 5: issues for the last three decades. So Micron and this
Speaker 5: story Chris warning about the impact of revenue, but the
Speaker 5: cause is a clamp down by the Chinese government in
Speaker 5: the context of cybersecurity.
Speaker 3: What do you make of that?
Speaker 8: Well, what we see here is the planning field big
Speaker 8: set for really a next generation of economic warfare that's
Speaker 8: happening right now. The Chinese have been stealing ideas from
Speaker 8: American companies for years, and in the case of Micron,
Speaker 8: Micron might need to think about what type of technologies
Speaker 8: they can actually export and build in China, knowing that
Speaker 8: they're at the risk of being taken to reproduce.
Speaker 2: Yeah, I mean what's fascinating Chris is actually it was
Speaker 2: but a day or so ago Bloomberg had a story
Speaker 2: that Micron is still investing. They're investing six hundred million
Speaker 2: dollars in terms of trying to still build out in China,
Speaker 2: still trying to think about a packaging plant in particular.
Speaker 4: Paula said it so right.
Speaker 2: They don't want to lose out on an economy that
Speaker 2: is still eventually going to rebound post COVID And as
Speaker 2: a key consumer, how will we ultimately be separate? Will
Speaker 2: we have one technology economy versus another.
Speaker 8: Well, when we have a situation where foreign state actors
Speaker 8: are actively rewarded and hacking into United States companies, American
Speaker 8: CEOs are actually going head to head with these state intelligence.
Speaker 1: Agencies, and it's a serious challenge.
Speaker 8: And I think there will always be risk management in
Speaker 8: how much of our technology we have built and share
Speaker 8: overseas versus in the United States, and I do think
Speaker 8: we see a pullback there and some more conservative behaviors
Speaker 8: across the board.
Speaker 3: In the world of technology.
Speaker 5: We also see Bill Gates in China, Chris meeting with
Speaker 5: President g and reports from the media saying that g
Speaker 5: in the conversation would welcome USAI companies to China and
Speaker 5: have their technology in that nation. From a cybersecurity perspective,
Speaker 5: how does that work in practice?
Speaker 8: Well, the United States is great at cybersecurity.
Speaker 1: Our government has eyewater in capabilities in cybersecurity. The Chinese
Speaker 1: are ahead of us in AI.
Speaker 8: TikTok has been the biggest experiment and successful adventure in
Speaker 8: our official intelligence. So the thought of our artificial intelligence technologies.
Speaker 1: Shipping them to China, I don't think it is a very.
Speaker 8: Good idea until we either alter this behavior or really
Speaker 8: lock ourselves down and take this threat seriously. China plays
Speaker 8: the long game. They don't want to take our ideas.
Speaker 8: They don't want to make iPhones for us. They want
Speaker 8: to be Apple, they want to be Micron. That is
Speaker 8: the long game. The other adversaries, Russia, other state actors
Speaker 8: where they're more interested in near term economic game like ransomware,
Speaker 8: have different motivations than the Chinese were a point one
Speaker 8: game on intellectual progress.
Speaker 5: Serve Chris bear with us, Caroline, I think we've got
Speaker 5: some breaking news on the subject of China.
Speaker 9: Yeah.
Speaker 2: Anthony Blincoln of course currently set to be on a
Speaker 2: trip soon enough to China. Currently telling us a new
Speaker 2: news conference, he looks forward to his Beijing trip overall,
Speaker 2: and then he wants open communications with China. Chris to
Speaker 2: that end when miss seeing such breaking news. When it
Speaker 2: comes to a geobilic political narrative, that we remember that
Speaker 2: Anthony B. Lincoln was meant to be with Jijingping, or
Speaker 2: indeed in China, and then a so called spy balloon
Speaker 2: up ended that back in February Today, how much more
Speaker 2: risk is there from a cyber perspective, from a technological
Speaker 2: exchange perspective, can we ever really see sort of bridges
Speaker 2: being built from your perspective, from a political perspective, and
Speaker 2: then indeed from an economic one, Well, yeah, I.
Speaker 1: Think that's really a cultural issue.
Speaker 8: The Chinese don't feel it's wrong to take other people's
Speaker 8: ideas and implement them.
Speaker 1: They will keep doing this.
Speaker 8: Not much has changed in the cyber landscape in the
Speaker 8: last three months, other than the fact that in the
Speaker 8: last week we've seen three major cyber attacks, two of
Speaker 8: them attributed to China.
Speaker 1: For this visit going on, if you.
Speaker 8: Were having lunch with someone who had just broken into
Speaker 8: your house, you might want to talk to them about it.
Speaker 2: One way of putting it fosphorous cybersecurity CEO, We thank
Speaker 2: you so much. Co founder there, Chris Ruland with some
Speaker 2: perspective on or the ever growing geopolitical headaches certainly swelling
Speaker 2: around Micron, and we look towards that meeting between Anthony
Speaker 2: Blincoln and indeed the Chinese leader. Meanwhile, another story, we're
Speaker 2: watching jd dot Com on track to emerge from a
Speaker 2: record sales funk as a bounce back in parts of
Speaker 2: Chinese economy begins to revive the once booming online's commerce sector.
Speaker 2: Retail CEO actually joined the program shin Legion, expecting that
Speaker 2: the commerce revenue will grow starting from the second quarter
Speaker 2: after a two percent decline in January to March period.
Speaker 4: Spoke exclusively to Bloomberg.
Speaker 10: Well, you guess, I think our service revenue will grow
Speaker 10: relatively steadily in the second and third quarters. It's still
Speaker 10: hard to say how much it will grow, but it
Speaker 10: is part of the overall ecosystem for marketplace merchants. So
Speaker 10: long as we do a good job in the infrastructure
Speaker 10: of the ecosystem, the growth will remain healthy.
Speaker 2: Let's talk about Adobe after its numbers shares actually on
Speaker 2: the app after the company raised its full year revenue
Speaker 2: and profits a bit, and the outlooks of course surrounding
Speaker 2: the optimism of generative AI, the features that they've been
Speaker 2: introducing when he spurring demand for the software, huaranteed for
Speaker 2: the shares what they're up about fifty percent so far
Speaker 2: in the month, and our r A bringbag Intelligence joins us.
Speaker 2: Now fascinating how much this company seems to have swung
Speaker 2: from what many felt was behind the curve and AI
Speaker 2: to really leading it.
Speaker 9: Yeah, you know, one of the things I would say is,
Speaker 9: going back six to nine months ago, there was a
Speaker 9: lot of discussion around you know, increased competition in the
Speaker 9: creative space, and frankly, Adobe was facing very tough comparisons
Speaker 9: in that segment for this year. But they have shown
Speaker 9: that they can still grow that segment in low double
Speaker 9: digits despite you know, tougher comparison, more competition. And I
Speaker 9: think that's the key reason why we are seeing you know,
Speaker 9: the Stoker reacting the way it is today.
Speaker 5: An Rak, Why are you shining a light on Adobe's
Speaker 5: creative tools in a tough macro environment.
Speaker 9: Well, the reason is because it makes over for more
Speaker 9: than seventy percent of their sales and the rest of
Speaker 9: the business, which is the digital experience business, which is
Speaker 9: tied to more enterprise spending.
Speaker 1: You know, they actually pulled back.
Speaker 9: Guidance for that particular segment, which is what we were
Speaker 9: expecting going in. But to our surprise that the one
Speaker 9: that is you know, tied with SMBs and consumers that's
Speaker 9: holding up very nice new users coming in. They are
Speaker 9: you know, spending a lot more for those products, whether
Speaker 9: that's you know, Acro, Acrobat or Photoshop illustrator, which basically
Speaker 9: says that everything that has to do with you know,
Speaker 9: creating more you know, digital imprints, whether it's pictures, videos,
Speaker 9: or even digital documents, that's remains very strong.
Speaker 5: A reminder, Adobe raised the outlook for its profit and
Speaker 5: revenue in response to what they're seeing with generatord Ai
Speaker 5: demand do you buy management's optimism annorag that that translates
Speaker 5: into top and bottom line growth.
Speaker 3: See, that's going to take some time.
Speaker 9: It's probably going to take one to two years before
Speaker 9: we really see a big push into that. But the
Speaker 9: one thing you have to think about is in this
Speaker 9: particular area, who are going to be the winners? You know,
Speaker 9: in our view, there are two distinct categories of companies
Speaker 9: that are going to, you know, be the winners. One
Speaker 9: that has a lot of capital that they can invest
Speaker 9: in to create new products, and the second one the
Speaker 9: ones that have a lot of data. And there is
Speaker 9: nobody out there that has more data on digital documents
Speaker 9: than Adobe. There is nobody out there that has more
Speaker 9: data on the number of pictures and videos somebody is creating.
Speaker 9: So from that point, Adobe does have an advantage that
Speaker 9: it can commercialize some of that underlying data with new technologies.
Speaker 2: Some of the overhang remains Figma, the deal, whether it
Speaker 2: gets done, the regulation that still needs to be jumped through,
Speaker 2: and argue, does it matter ultimately how important is this
Speaker 2: enormous deal for them?
Speaker 9: You know, it's actually very funny. When the deal was announced,
Speaker 9: everybody hated it, and then in six months everybody is
Speaker 9: worried that if the deal doesn't go through, Adobe is
Speaker 9: going to be in trouble. But I actually differ from
Speaker 9: that particular thesis. We think Adobe should be fine with
Speaker 9: or without Figma. If anything, the last two to three
Speaker 9: quarters of results have shown that they can still grow
Speaker 9: the creative business with aug Figma, And you know, to
Speaker 9: be honest, that size of a business growing thirteen to
Speaker 9: fourteen percent organically in constant currency is pretty impressive in
Speaker 9: our view.
Speaker 5: All right, Bloomberg Intelligence, Anna rag Rhana with the react
Speaker 5: to those aderby ownings, Thank you so much, a story
Speaker 5: that we're also following.
Speaker 3: Karo.
Speaker 5: FTC chair Lena Khan has declined to recuse herself from
Speaker 5: a case against Meta, despite the advice of the agency's
Speaker 5: top ethics official. That's according to internal agency documents. The
Speaker 5: FTC's ethics official recommended that Khan remove herself from the
Speaker 5: case to avoid the appearance of bias, but left it
Speaker 5: up to Khan to decide, concluding it wasn't an ethics
Speaker 5: violation if she took part. Meta had sought to disqualify
Speaker 5: Khan from participating in the case over the company's proposed
Speaker 5: acquisition of a popular virtual reality startup.
Speaker 3: Within now coming.
Speaker 5: Up, Elon Musk Bernard Arnault, the two richest people in
Speaker 5: the world. They go out to lunch. The big question
Speaker 5: who picks up the chair? More on that next and
Speaker 5: really quickly, Caroline, it's been a weird twenty four hours.
Speaker 5: We're watching shares of Nikola. They're on track for a
Speaker 5: record weekly game. I'm at my desk last night Trevor Milton,
Speaker 5: the founder who has been charged and found guilty of
Speaker 5: securities fraud, breaks a three year social media silence to
Speaker 5: tell investors to vote against all company proposals at the
Speaker 5: upcoming AGM. Shares now down two point eighty three percent
Speaker 5: in the session.
Speaker 3: It's been a wild ride. This is bloomberg time for
Speaker 3: talking tech. First up.
Speaker 5: International cooperation is needed to properly regulate crypto firms. That's
Speaker 5: according to France Central bankhead Francois Villeroi, who spoke earlier
Speaker 5: at Viva Tech in Paris. Is stressed that the European
Speaker 5: Union was ahead in cryptoregulation. He noted that a new
Speaker 5: version of the EU regulation MIKA two, would be needed
Speaker 5: to tackle crypto conglomerates. Also at Viva Tech, AI is
Speaker 5: bursting onto the scene. A French startup called mistral Ai
Speaker 5: has already raised a whopping one hundred and five million
Speaker 5: euros in funding despite being barely a month old. French
Speaker 5: President Emmanuel Macran is pushing to make the nation more
Speaker 5: attractive to tech and AI businesses. Plus the world's two
Speaker 5: richest people, Tesla CEO Elon Musk and Bernard Arnault of
Speaker 5: LVMH together they got together for what we're calling a
Speaker 5: power lunch. The meeting follows a fever tech event which
Speaker 5: Mush spoke at. Both men share a combined wealth of
Speaker 5: about four hundred and twenty six billion dollars that according
Speaker 5: to the Bloomberg Billionaires Index.
Speaker 2: Caroline, that's stick on that, because well we know that
Speaker 2: in Omsk went on to take to the stage at
Speaker 2: France's tech event, Viva techsir conference they hold each.
Speaker 4: Year, had a lot to say about AI. Take listen.
Speaker 11: I'm in favor of AI regulation because I think advanced
Speaker 11: AI is a risk to the public, and anything that's
Speaker 11: the risk to the public, there needs to be.
Speaker 12: Some kind of referee.
Speaker 13: That referee is the regulator.
Speaker 11: And so I think that my strong recommendation is to
Speaker 11: have some regulation for AI.
Speaker 2: Is the old time in Paris for a Friday Bloommegg's
Speaker 2: bro chief. I'm very pious to say, staying a bit
Speaker 2: late for us, Alan Catz. So what do we make
Speaker 2: first of Elon Musk, even being their present, he was
Speaker 2: of course meeting with the wealthiest man as well, but
Speaker 2: also meeting with Macron too.
Speaker 4: This is about bringing technology to France.
Speaker 14: So Elon Musk has talked about creating a battery factory
Speaker 14: in Europe, and he's got sort of lots of European
Speaker 14: politicians essentially begging him to do so. So he met
Speaker 14: with as you mentioned, with French President Demandor Macron earlier
Speaker 14: today and maxconn gave a tweet of him shaking Musk's
Speaker 14: hands saying let's work together. He met yesterday with the
Speaker 14: Italian leader Georgia Maloney and who and he's apparently talked
Speaker 14: about potentially putting the battery of factory there. People have
Speaker 14: talked about Tesla putting this battery factory in Spain, and
Speaker 14: so he's sort of got, as sometimes happens with these
Speaker 14: kinds of investments, sort of politicians desperately trying to get
Speaker 14: him to invest in their country and is using that
Speaker 14: as a way to sort of, you know, gather.
Speaker 3: Them around him.
Speaker 14: And he has made himself the center of attention in
Speaker 14: that respect.
Speaker 5: Thousands of people alan at Viva tech elon Musk walks
Speaker 5: on stage. There's a big reaction taught to us about
Speaker 5: kind of the star power of this man in France
Speaker 5: in particular.
Speaker 14: So it's a funny thing because France is not a
Speaker 14: very pro business environment.
Speaker 1: In many respects.
Speaker 14: I mean, it's become much more so under under Manual
Speaker 14: mack Home, but still sort of in terms of popular
Speaker 14: public opinion, business people are not generally heroes here in
Speaker 14: the way that they can be in the US specifically,
Speaker 14: but Elon Musk has managed to really transcend that, you know.
Speaker 14: In addition to meeting with politicians, as he pointed out,
Speaker 14: he had lunch with bah I know who. By the way,
Speaker 14: even though again their their relative wealth goes back and
Speaker 14: forth on who's the richest man in the world, I'll
Speaker 14: know it is not like a star like Musk is.
Speaker 14: I mean, he walked into this room. You could feel
Speaker 14: the energy and the desire that people had for Musk
Speaker 14: to be there. They had to move it from you know,
Speaker 14: their original venue to a new place where they had
Speaker 14: four thousand seats so they could fit all the people
Speaker 14: who wanted to come see him. When at the end
Speaker 14: of this of this sort of forty five minute session,
Speaker 14: when when Musk agreed to take questions, it was like
Speaker 14: pandemonium in the hall.
Speaker 3: It was real.
Speaker 14: He really is like a rock show, which is very
Speaker 14: surprising here.
Speaker 5: And Musk has just retweeted that Macron tweet are thanks
Speaker 5: to Bloomberg's Alan Katz, bureau chief out in Parison.
Speaker 2: Welcome back to Bloomberg Technology. I'm Caroline Hyde in New
Speaker 2: York and I.
Speaker 3: Met Loved in San Francisco.
Speaker 5: Carry for the final time this week, it's going to
Speaker 5: check in on these market's.
Speaker 3: Interesting.
Speaker 5: Were kind of treading water, chopping and changing between gains
Speaker 5: and losses on the NAZAK one hundred, up of ten
Speaker 5: to one percent, but we are on track for our
Speaker 5: best week since March. A little bit of FED sprinkled
Speaker 5: in there. A lot about artificial intelligence. Some of the
Speaker 5: megacaps on a points basis have pushed that index higher
Speaker 5: throughout the week. We'll get to in a second. The
Speaker 5: socks moving to the downside, off by two tens and
Speaker 5: one percent, a lot of negative headlines for those chip
Speaker 5: makers that we can pass through. US ten yield higher
Speaker 5: by six basis points three point seven eight percent, and
Speaker 5: Bitcoin actually pushing higher by a percentage point around twenty
Speaker 5: five eight hundred US dollars per token. But we actually
Speaker 5: have kind of seen it above that in terms of
Speaker 5: levels in recent days and weeks, specific movers. So much
Speaker 5: of this is to do with AI. When you think
Speaker 5: about the single names moving in both directions of mister director,
Speaker 5: you'll do your magic, thank you very much. Intel hire
Speaker 5: by three tens of one percent, another name bouncing around.
Speaker 5: Bloomberg Exclusive reporting about eleven billion dollars of subsidies in
Speaker 5: for a new chip plant there.
Speaker 3: According to sources.
Speaker 5: Microsoft coming off that fresh record high Thursday, off by
Speaker 5: four tens percent, and then Nvidia continues to see gains.
Speaker 5: When will this end the momentum in this AI related
Speaker 5: stock because everyone wants the GPUs more near term, Adobe
Speaker 5: pushing higher February high up fifty percent year to date,
Speaker 5: raising its outlook for profit and revenue because of the
Speaker 5: demand for its generative AI offering character.
Speaker 4: And there is the exuberance.
Speaker 2: But on the flip side of the exuberance when it
Speaker 2: comes to AI, of course, is some of the concerns,
Speaker 2: the nervousness and therefore the policy making that needs to come.
Speaker 2: And in fact, look policymakers around the world trying to
Speaker 2: grapple with this. They're harping on about how to better
Speaker 2: regulate artificial intelligence. But there are concerns that some fundamental
Speaker 2: aspects are being overlooked. In particular, we're pleased to look
Speaker 2: for insight from Jennifer Polker, founder, former executive director of
Speaker 2: Code for America, the author of Recoding America. Why government
Speaker 2: is failing in the Digital Age and how we can
Speaker 2: do better. Jennifer, your book is fascinating, and it's not
Speaker 2: only about thinking about to regulate AI and technology in
Speaker 2: the here and now, but ultimately also how to implement
Speaker 2: it and how we're failing to implement regulation at large.
Speaker 4: And that's a technology solve that could be there.
Speaker 2: But first, just give us your thoughts as we look
Speaker 2: ahead to next week, the EU might indeed bring us
Speaker 2: the AI Act. How do you think policy make is
Speaker 2: a doing looking at artificient intelligence?
Speaker 13: Well, the good news is that they're paying a lot
Speaker 13: more attention than they have in the past, and actually
Speaker 13: that Congress has gotten a lot smarter about tech over
Speaker 13: the past couple of years, in part due to efforts
Speaker 13: with Tech Congress and organizations like pop Fox Foundation, where
Speaker 13: they're really out there helping get people with great tech
Speaker 13: skills in and around Congress to help them be able
Speaker 13: to have just a more deeper understanding of the core
Speaker 13: technology and the kinds of things they're going to do
Speaker 13: to our society. There's some bad news too, which is
Speaker 13: that this is going to be a lot harder than
Speaker 13: some of the tech challenges that have come at our
Speaker 13: government in the past. AI is just going to be
Speaker 13: far more disruptive, and the truth is that we really
Speaker 13: don't know what it's going to do to us. We
Speaker 13: don't understand it the way that we at least are
Speaker 13: starting to understand things like social media.
Speaker 2: Okay, So when we think about also the immediacy of
Speaker 2: the issues, what we've heard on one front is the
Speaker 2: anxiety about ultimately AI causing mass extinction. That seems to
Speaker 2: be some of the issues being proposed by or some
Speaker 2: outman the guy leading the charge when it comes to
Speaker 2: open AI. But then there's people who try to really
Speaker 2: remind us of the here, the now. The issues are bias,
Speaker 2: the issues of already using facial recognition in AI in
Speaker 2: when it comes to recognizing crime. What do you think
Speaker 2: policymakers need to be looking at from a short term
Speaker 2: and longer term perspective.
Speaker 13: They need to understand that there's different types of threats
Speaker 13: that come with AI. They're certainly societal type threats. There's yes,
Speaker 13: certainly existential threats like this, and then there's the threats
Speaker 13: of what humans might do with it, what bad actors
Speaker 13: might do, and the kinds of policies that will address
Speaker 13: these different types are going to have to be quite distinct.
Speaker 13: So you're going to need people who understand what the
Speaker 13: technology can do today, more importantly, what it is likely
Speaker 13: to be able to do tomorrow.
Speaker 7: But you're also going to have to have.
Speaker 13: Really smart policy people who understand how to create policy
Speaker 13: that's adaptable as we learn what these technologies can do
Speaker 13: in these areas. And of course, with each of these
Speaker 13: areas of real threat also comes real potential benefit, And
Speaker 13: we need policy makers who are going to understand not
Speaker 13: just how to mitigate the downsides, but how to make
Speaker 13: sure that we as a society get the advantages of
Speaker 13: what upsides these things can bring.
Speaker 5: Jennifer, it seems like a lifetime ago, but it was
Speaker 5: only six weeks when Vice President Kamala Harris gathered the
Speaker 5: great and the good of the world of AI and
Speaker 5: said that the White House would do something.
Speaker 3: Have they done something? You know?
Speaker 13: The executive branch has its own special relationship to technology,
Speaker 13: much like.
Speaker 5: The find that special relationship for us. What do you
Speaker 5: mean by a special relationship?
Speaker 13: You know, my book looks takes a sort of historical
Speaker 13: look at government's relationship to technology, going all the way
Speaker 13: back to the sixties. When we define technology as something commercial,
Speaker 13: it would be something that government would buy, and therefore
Speaker 13: powerful people in government would need to really understand how
Speaker 13: it works just be something you buy the way you
Speaker 13: buy pencils or cars. And over time we've had attempts
Speaker 13: by the legislative branch, like in the nineteen nineties with
Speaker 13: the Cleaner Cohenact, to say this is something more than
Speaker 13: just a tool of the mechanicals here in government the
Speaker 13: people who implement things. It's actually fundamental to our society.
Speaker 13: We need people in government who understand it. So in
Speaker 13: nineteen ninety six, Senator Cleaner, Senator Cohen and Representative Cleaner
Speaker 13: asked the White House to take responsibility for a digital strategy,
Speaker 13: and in fact they said no, they said, that's inconsistent
Speaker 13: with the policy nature of this institution. It's operational and
Speaker 13: therefore not something we should do.
Speaker 7: So in that case you.
Speaker 13: Had Congress actually being more forward looking saying this is
Speaker 13: something we need as a core competency in our government,
Speaker 13: and the executive branch saying nope, we're not going to
Speaker 13: do it. Now, sometimes we've seen that in the reverse,
Speaker 13: where you have the executive branch really having things like
Speaker 13: the Office of Science and Technology Policy trying to have
Speaker 13: people who understand technology in the building able to participate
Speaker 13: in critical conversations, and you had Congress behind for a while,
Speaker 13: so they kind of, you know, weave in and out
Speaker 13: of having the competences they need. But I think both
Speaker 13: now really see that you can't separate technology from governing.
Speaker 13: You really must have people who understand it at the
Speaker 13: table when policy is being made.
Speaker 5: Jennifer, how important is education. I'm talking about children at
Speaker 5: high school, any level in the AI story in this
Speaker 5: country and globally.
Speaker 13: You know, our kids today are sort of growing up
Speaker 13: in a very different world than we did. They're getting
Speaker 13: an education just in their daily lives. I do think
Speaker 13: they need to understand how these algorithms are going to
Speaker 13: affect them. As you said earlier, that there may be
Speaker 13: bias in them, and the degree to which AI is
Speaker 13: so hard to actually see what is going on under
Speaker 13: the hood needs to be part of just a basic
Speaker 13: literacy that our kids get and that needs to be
Speaker 13: built into policy as well.
Speaker 5: Oh thanks to Jennifer Polker, author of recoding America right.
Speaker 5: Another story that we're tracking, a new lawsuit is accusing
Speaker 5: ex Corps formerly known as Twitter, of profiting copyright violations
Speaker 5: by using music on its platform without permission. A slew
Speaker 5: of music publishers presented the suit in the Tennessee Federal Court,
Speaker 5: alleging that Twitter routinely ignored or dragged its feet on
Speaker 5: takedown notices. Twitter is one of the only major social
Speaker 5: media platforms that does not pay music rights to holders
Speaker 5: for licenses to their work. All right, coming up back
Speaker 5: to it, generative AIS impact on customer service. We talk
Speaker 5: all about that with may have been co founder and
Speaker 5: CEO of AI platform writer.
Speaker 3: That's next. This is Bloomberg.
Speaker 11: Seventy percent of customer facing time is wasted on non
Speaker 11: productive work.
Speaker 1: We can now automate a wide variety of interactions.
Speaker 15: When you think about the ability for businesses to serve
Speaker 15: customers in lower cost, more efficient ways, AI is a
Speaker 15: huge accelerant to what they're trying to do.
Speaker 11: Our users a lot of that they don't have to
Speaker 11: do this drudgery. They can spend more time with customers.
Speaker 1: We believe in a human augmented AI.
Speaker 14: Customer AI is really the intersection of all these new
Speaker 14: capabilities of generative and predictive.
Speaker 1: AI, in combining that with the customer journey.
Speaker 9: Think of this new world where your employees can become
Speaker 9: even more productive where they don't have to do the
Speaker 9: mundane boarding routine tasks.
Speaker 11: So it doesn't necessarily mean like limiting their jobs, mean
Speaker 11: limiting the drudgery from our day to day.
Speaker 5: Those are just some of the thoughts of our guests
Speaker 5: from this week when it comes to how AI can
Speaker 5: improve everything from customer service to how employees do their
Speaker 5: daily jobs. Let's bring him write a CEO and co
Speaker 5: founder may be for her take on that, because that's
Speaker 5: what you do, but so does everyone else. Apparently, what
Speaker 5: is Right's point of differentiation?
Speaker 16: Yeah, thanks Ed, thanks for having me.
Speaker 12: So we are a full stock generitive AI platform. So
Speaker 12: what that means is we are both the foundation models
Speaker 12: as well as the application layer on top, and what
Speaker 12: we allow enterprises to do is build their own generative
Speaker 12: AI use cases. A lot of the AI that is
Speaker 12: being built into the applications that are used across the
Speaker 12: enterprise don't have the enterprise's own data or brand or context,
Speaker 12: and so the information that is being put in front
Speaker 12: of folks is just not good enough, and there is
Speaker 12: a lot of talk about how AI can help people
Speaker 12: and reduce the drudgery of work. I saw the segment earlier,
Speaker 12: But professionals don't look at their day as drudgery, and
Speaker 12: so we are really helping enterprises figure out what are
Speaker 12: the use cases that bring people and AI together to
Speaker 12: make everybody just a lot more productive.
Speaker 5: We had my Lund Thompson Bukavec, who's aws Cloud VP
Speaker 5: on yesterday. Bedrock essentially offers the same thing. What do
Speaker 5: you make of that argument?
Speaker 12: Sure, so we've got an announcement coming around where our
Speaker 12: foundation models will be offered, But regardless of that, what
Speaker 12: we are seeing is this need to connect the output
Speaker 12: from the generative models to the actual use cases. Right now,
Speaker 12: at a lot of companies, we have executives almost like
Speaker 12: deer in the headlights, yes right, really frozen, kind of
Speaker 12: panicked because you've got AI and AI associated risk being
Speaker 12: built into a lot of the tools that their employees
Speaker 12: are using every day.
Speaker 16: They don't really know what to make of it.
Speaker 12: They've got APIs that they can use to access foundation models,
Speaker 12: but then there's this huge gulf between the technology and
Speaker 12: how you actually operationalize that.
Speaker 16: And that's where we come in.
Speaker 12: It's the technology and the methodology to actually roll out
Speaker 12: use cases functioned by function, team by team in ways
Speaker 12: that actually get adopted.
Speaker 4: Okay, may it's teasing us, what's the announcement?
Speaker 12: So our models can be hosted on prem and in
Speaker 12: private clouds of enterprises. So it is a really exciting,
Speaker 12: real jump in the ability for enterprises to control their
Speaker 12: generative AI rollout. Nobody wants another shadow it apocalypse here
Speaker 12: with one hundred tools being used across their companies, all
Speaker 12: of them accessing different models that all have to be
Speaker 12: risk assessed.
Speaker 16: Nobody wants that.
Speaker 2: Okay, So on prem that's just sort of winning formula
Speaker 2: visa via cloud offering. It really speaks to me the
Speaker 2: whole deer in headlights. I feel like most consumers, most
Speaker 2: people are ultimately deer in headlights at the moment, trying
Speaker 2: to understand how their world gets upended, how their job
Speaker 2: gets us upended, but.
Speaker 4: How they ensure that they got the right skill set.
Speaker 2: How are you thinking about your own team, how are
Speaker 2: you thinking about enterprising you're working with getting their workers
Speaker 2: into that line of skill set totally.
Speaker 16: The first thing is we've been doing AI since before.
Speaker 12: It was the start of the entire you know, the
Speaker 12: center of the world's conversation. And so we are not
Speaker 12: going into enterprises like a hammer looking for a nail.
Speaker 16: We actually start with the workflows themselves.
Speaker 12: So what are your people doing in marketing, in comms,
Speaker 12: in service, in R and D that has really bottlenecked,
Speaker 12: and how can AI be used to reinvent the workflow.
Speaker 12: It's a radically different approach because we are thinking about
Speaker 12: AI enablement of the individual employee versus here's a shining
Speaker 12: new tool.
Speaker 16: How can we implement it day to day?
Speaker 5: Wright to raise series A November twenty twenty one, twenty
Speaker 5: one million dollars hasn't raised any fun since you're making money. Look,
Speaker 5: we'll have you back on when you're ready to do around.
Speaker 5: I know you're getting a lot of phone calls from vcs.
Speaker 3: We'll have you back on.
Speaker 5: Mayhabe, writer, co founder and CEO, Thank you for your time.
Speaker 5: Activision's Blizzard Entertainment unit seeing its biggest launch ever with
Speaker 5: the release of Diablo four. The action role playing game
Speaker 5: has already surpassed six hundred and sixty six million dollars
Speaker 5: in sales, and that was in the first five days,
Speaker 5: the best opening for a game in Blizzard's history. Delighted
Speaker 5: to say that joining us now is Rod Ferguson, Blizzard's
Speaker 5: general manager, but we're basically the head of the entire
Speaker 5: Diablou universe. So the game comes out June first, and
Speaker 5: in the first four days, ninety three million hours of gameplay,
Speaker 5: which is equivalent to ten thousand human years. What is
Speaker 5: the latest number of gameplay?
Speaker 17: Two weeks later, we're up to three hundred and fifty
Speaker 17: million hours now players, So it's pretty exciting.
Speaker 5: I think what's so interesting about this is the widespread
Speaker 5: adoption of the game. Can you tell us which console
Speaker 5: or platform is Diablo four been played on most?
Speaker 17: Well, I mean it's sort of The Diablo franchise is
Speaker 17: a long history, has a long history. It's twenty six
Speaker 17: years old, and it started its roots for really in PC,
Speaker 17: and so it's kind of that's been its main platform
Speaker 17: throughout its history. But that's one of the things we
Speaker 17: really focused on with Diablo four is we wanted to
Speaker 17: bring Diablo to a wider audience, and as part of that,
Speaker 17: we really wanted to embrace console and controller play, because
Speaker 17: you can play with controller on PC. So while PC
Speaker 17: is the predominant platform that you can play on, we've
Speaker 17: seen a lot of growth in our console and in fact,
Speaker 17: Xbox said it was Blizzard's fastest selling Xbox game as well,
Speaker 17: and so we're really excited about that new audience for
Speaker 17: bringing in.
Speaker 5: So on that note, I have to then ask, when
Speaker 5: you think about the Activision Microsoft deal, what is the
Speaker 5: benefit to the blow universe, how does it help you grow?
Speaker 17: Well, I mean that's all still ongoing, and so you know,
Speaker 17: we think that the deal is great for competition in
Speaker 17: the marketplace, and there's a lot of great things that
Speaker 17: come out of that. But I'm not really the one
Speaker 17: best to speak to the acquisition.
Speaker 5: Rods that there are already two expansions in development, I
Speaker 5: believe ye without getting ahead of ourselves, do we and
Speaker 5: when do we see a Diablo five.
Speaker 1: No, you're definitely getting ahead of yourself.
Speaker 8: You know.
Speaker 17: That's one of the things that we're really excited about is,
Speaker 17: you know, this is just representing the beginning of the
Speaker 17: Diablo four experience. You know, this is when we launched this,
Speaker 17: it was after many years of development, but it really
Speaker 17: is a game that when we think of the launch
Speaker 17: as the beginning and not the end. And so what
Speaker 17: we're seeing is like we're continuing to invest in years
Speaker 17: and years of live service. So we're going to have
Speaker 17: quarterly seasons, We're going to have expansions that I talked about.
Speaker 17: We already have to in flight as I talk to
Speaker 17: you today, and so we're really focused on making sure,
Speaker 17: you know, we have all the content that players want.
Speaker 17: Is players now are very consumptive. They really want to
Speaker 17: have new content all the time. And it's quite a
Speaker 17: different mob and making games for you know, twenty four
Speaker 17: years and it's really changed into gaming as a hobby
Speaker 17: and as a lifestyle where they always want to know
Speaker 17: what's next, what's the next thing I get to do
Speaker 17: in your game? And so we've been really focused at
Speaker 17: building this great foundation that we can now support for
Speaker 17: years to come.
Speaker 2: It is about bringing different people into gaming. And indeed
Speaker 2: you said diversifying the way which you access it.
Speaker 3: What about Max?
Speaker 4: I mean you've had a rather.
Speaker 2: Famous player will Be Goldberg coming out and saying, you know,
Speaker 2: how can I access it? And ultimately, look at the
Speaker 2: moment she's wanting what some fully fledged port, which is unlikely.
Speaker 4: How do people play it if they're in a map.
Speaker 1: I think there are ways to do it.
Speaker 17: Like, I don't know that I can officially sanction them,
Speaker 17: but with some you know, proper searches, I'm sure you
Speaker 17: can find a way to make that happen. Yeah, it's
Speaker 17: about you know, when you look at different platforms, you
Speaker 17: have to look at not only the cost of doing it,
Speaker 17: but just the opportunity costs about where you're spending your time,
Speaker 17: and when you think about how many more platforms you
Speaker 17: support and all the testing you have to do and
Speaker 17: how you you know, one of the things that have
Speaker 17: been a live service is we have to be able
Speaker 17: to update the game really quickly. And the more platforms
Speaker 17: and the sort of the broader you go, the harder
Speaker 17: it is to be agile and responsive. And so you know,
Speaker 17: we never say never. It's something you know, you're always
Speaker 17: aware of, but like right now, that's that's not one
Speaker 17: of our supportive platforms.
Speaker 2: Whereas disruption or indeed headaches for you at the moment,
Speaker 2: rod I think of just the amount of people, talent,
Speaker 2: new material that you want to bring in to your sphere.
Speaker 4: Thinking of the upending of.
Speaker 2: Content production that's currently happening in the world of movie making,
Speaker 2: or script writing and people wanting to see more benefits
Speaker 2: and worried also about generative AI.
Speaker 4: We think about how that's going to eventually be.
Speaker 2: Influencing the world of gaming. How do you lean into that?
Speaker 2: How do you ensure this macro environment isn't stopping you
Speaker 2: from growing at the pace you need and want to.
Speaker 17: Yeah, it's really about sort of understanding what your demands
Speaker 17: are for the content that you have, in the team
Speaker 17: size you need. Because as I was saying, you know,
Speaker 17: twenty years ago, when I made a game, you finished
Speaker 17: it and you went on vacation because there's nothing.
Speaker 1: Else you could do about it.
Speaker 17: And today you finish a game and the next day
Speaker 17: the players want to know what's new and.
Speaker 3: So you.
Speaker 17: So you have to keep you know, you have.
Speaker 1: To be able to have your team size.
Speaker 17: And your team processes and organizational structure to be that
Speaker 17: you can work sustainably like you And that's the big
Speaker 17: focus for us, you know, when you're working on a
Speaker 17: game like this. We're working on the main game right now,
Speaker 17: but Season one is finishing up development. Season two development
Speaker 17: is almost done, Expansion one, Expansion two, so we have
Speaker 17: these parallel teams.
Speaker 5: Well, I'm sorry, I've got to jump in. I've got
Speaker 5: to ask you about endgame. There are lots of people
Speaker 5: not happy about tweaking of endgame the process and that
Speaker 5: your response very quickly.
Speaker 17: We're day ten, right, and so like I said, we're
Speaker 17: going to be recording this game for years to come.
Speaker 17: So there's going to be when you have three hundred
Speaker 17: and fifty million player hours applied to the game, you're
Speaker 17: going to find some things that aren't working quite the
Speaker 17: way you want them to. So we're taking these early
Speaker 17: times to build a solid foundation and that we can
Speaker 17: then grow on top of.
Speaker 1: So there's lots of great stuff.
Speaker 17: We're actually doing a devstream this afternoon that we're going
Speaker 17: to be talking to our players directly about it.
Speaker 5: Now that this interview's done, I will be playing on
Speaker 5: PlayStation five. By the way, Rod Ferguson, general manager, head
Speaker 5: of the Avlo Universe, Thank you so much, Caroline.
Speaker 4: What a fully fledged edition of Bloomberg Technology Ed.
Speaker 3: There's more to come, Yeah, so much more.
Speaker 5: Recap the whole week on the podcast wherever you get it, Apple, Spotify,
Speaker 5: iHeart Twitter, spaces thirty minutes time on the Big take
Speaker 5: on AI.
Speaker 3: This is Bloomberg