Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily j I'm Emily Jang in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour, a
Speaker 1: landmark ruling by a deeply divided Supreme Court opens the
Speaker 1: door for more people to carry guns in public. This
Speaker 1: as the country is grappling with a rise in gun
Speaker 1: violence and companies are trying to get workers back to
Speaker 1: the office. Plus, he was suspended from Google for voicing
Speaker 1: concerns about an AI bought. He says, is a person
Speaker 1: my sit down interview with engineer Blake Lamoine. Why does
Speaker 1: he think computers have feelings and why does it matter?
Speaker 1: What does he think big tech should do to deal
Speaker 1: with it? And in depth conversation coming up and continued
Speaker 1: concerns about the power of big tact I'm joined by
Speaker 1: the CEO of Proton, Andy Yen, who's in Washington right
Speaker 1: now fighting for antitrust reform. All of that in a moment,
Speaker 1: but first I want to get a look at the
Speaker 1: markets investors looking to tech as fears of a recession grow.
Speaker 1: Bloomberg's sad Ludlow here with the latest d walks through
Speaker 1: the day. Yeah, it's interesting this momentum in the technology sector.
Speaker 1: We're up in three of the last four sessions on
Speaker 1: then has one, and meaningfully you look at then has
Speaker 1: that one very tech heavy index. All of the megacaps
Speaker 1: on there are up one and a half percent, but
Speaker 1: not all tech created equally. See weakness in semiconductors for example.
Speaker 1: The story of the day on Thursday was this pool
Speaker 1: backing yield so much FED speak fed power again on
Speaker 1: Capitol Hill, giving his view of the world and the
Speaker 1: outlook for the Fed, the outlook for inflation and rates,
Speaker 1: and basically reaffirming his commitment to tackling inflation at any costs,
Speaker 1: which of course adds to recession fits. So it's interesting,
Speaker 1: why is tech up in this environment? Had this chart
Speaker 1: on the Bloomberg terminal that I've been looking at, trying
Speaker 1: to look at the tea leaves. There's a lot of
Speaker 1: mixed messages. It's been a week where we've been up
Speaker 1: and then we've been down, and we're back up again.
Speaker 1: But we look at this two hundred day moving average.
Speaker 1: In simple terms, very few stocks on the tech sector
Speaker 1: of the SMP five are trading above the two D
Speaker 1: day movie average for most traders. That is a Barris signal.
Speaker 1: But there are other signals out there. For example, if
Speaker 1: you look at NAS that one mini futures for September,
Speaker 1: they have been up three of the last four sessions.
Speaker 1: Those are futures for September forward. Looking the direction of travel,
Speaker 1: it looks like we're getting some ultimism around the technology sector.
Speaker 1: There's been this discussion about bitcoin, which hovers it around
Speaker 1: twenty thousan dollars per token as being a leading indicator
Speaker 1: for risk assets. And there are names out there like
Speaker 1: Scott Minute of Guggenheim, Mark Mobia for Mobius, a legendary
Speaker 1: investor of course, talking about how we won't see a
Speaker 1: bottom in equities until we see that bottom in bitcoin.
Speaker 1: But I'm looking at this chart as we look for
Speaker 1: some direction, and there's always there's so many stories for
Speaker 1: individual companies and individual stock pulling us in different directions.
Speaker 1: Just three that I'm looking at this Thursday, Netflix, We're
Speaker 1: gonna talk about this later in the show. Actually closing
Speaker 1: up one and a half percent. It was volatility on
Speaker 1: that stock in this session. News of job cuts, m
Speaker 1: you and I will dig into that later on Tesla
Speaker 1: down four tents. We've sent lots of news in the
Speaker 1: last twenty four hours. Comments Elo must made back in
Speaker 1: May on the cash burn from factories that have just
Speaker 1: been built as they ramp up, but now the markets
Speaker 1: starting to digest those comments. Also a scoot from Bloomberg
Speaker 1: about how capacity is being added in Shanghai, and Apple
Speaker 1: top of the pole biggest points move on Thursday. All right,
Speaker 1: i'd Ludlow, thank you. We'll get back to you later
Speaker 1: in the show. I want to get to another story
Speaker 1: now that could have wide reaching implications. A divided Supreme
Speaker 1: Court shutdown a New York law that could limit who
Speaker 1: could carry a handgun in public, that limited who could
Speaker 1: carry a handgun in public, issuing a landmark ruling that
Speaker 1: could mean more guns on the streets of big cities
Speaker 1: that have struggled to contain a rash of gun violence,
Speaker 1: as companies are also trying to get workers back into
Speaker 1: the office for more. I'm joined by Bloomberg scrag Store,
Speaker 1: who covers the in court for us. So Greg, just
Speaker 1: walk us through what this new law really means. Yeah,
Speaker 1: So this ruling effects primarily six states that have so
Speaker 1: called may issue permit laws, meaning they don't have to
Speaker 1: give everybody who applies a license to carry a handgun
Speaker 1: in public. All those states require showing us some sort
Speaker 1: of special need. The group includes California, New York, Massachusetts,
Speaker 1: New Jersey, so some really big states with some really
Speaker 1: big cities, and those laws are probably doomed at this point.
Speaker 1: Those states are going to have to start letting typical
Speaker 1: people who say I want a handgun for self defense purposes,
Speaker 1: those people are going to have to get a permit.
Speaker 1: This is all happening. Obviously, we've been covering the very
Speaker 1: tragic news across the country where we've seen, um, the
Speaker 1: impacts of gun violence. But also you have companies trying
Speaker 1: to get workers back to the office and some of
Speaker 1: them say they don't even feel safe riding the subway.
Speaker 1: How do you expect companies, which are increasingly being put
Speaker 1: under pressure to respond or take a stand on social issues,
Speaker 1: to respond to this. Yeah, that's it's a really good question.
Speaker 1: So a couple of things that keep in mind. First
Speaker 1: of all, this probably won't have an immediate effect in that, uh,
Speaker 1: these states are gonna have to set up a new
Speaker 1: permitting system, and so it's not just that people can
Speaker 1: suddenly take their their handgun out in public immediately, they're
Speaker 1: gonna have to get a permit once that new system
Speaker 1: is set up. And the second thing is, you know,
Speaker 1: companies are gonna are probably gonna find that their employees
Speaker 1: have different reactions. Some of them are going to feel
Speaker 1: less safe because there are more handguns out there and
Speaker 1: they're worried about the people with guns. And some people
Speaker 1: might feel more safe commuting because they will now have
Speaker 1: the ability to get a permit to carry a gun themselves.
Speaker 1: So it may depend in part on what companies here
Speaker 1: from their their employees. We've also seen a number of
Speaker 1: tech companies offer to pay for employees to move out
Speaker 1: of states like Texas where they've been limiting abortion. Are
Speaker 1: we still expecting a ruling on ROVERSUS way in the
Speaker 1: next twenty four hours. Maybe not in the next twenty
Speaker 1: four hours, although we are getting more Supreme Court opinions tomorrow,
Speaker 1: so it's possible at ten o'clock Eastern time tomorrow that
Speaker 1: what we'll get. But the Court still has eight opinions left.
Speaker 1: We're gonna get certainly get some next week to starting
Speaker 1: on Monday. So just mathematically, the odds are probably that
Speaker 1: we'll get it next week rather than tomorrow. Okay, well,
Speaker 1: we'll be following your reporting on all of it, Bloomberg
Speaker 1: Scrag Store. Thank you for that update. I want to
Speaker 1: turn out to another story that could have a big
Speaker 1: impact on society and politics around the world. Bloomberg has
Speaker 1: learned Meta is reducing its support for a tool it
Speaker 1: owns to keep misinformation and check. It's called crowd tangle,
Speaker 1: and it's been used to spot false information, including in elections.
Speaker 1: Were less than six months now before the US midterms,
Speaker 1: and there are concerns that without a tool like crowd tangle,
Speaker 1: it could lead to voters being manipulated. For more on this,
Speaker 1: I'm joined by Bloomberg Sarah Fryer. So, Sarah put this
Speaker 1: into context for us. How important has crowd tangle been
Speaker 1: to fighting misinformation on Facebook's platform to this point. Well,
Speaker 1: it's interesting because when Facebook bot crowd tangle in twenty sixteen,
Speaker 1: they thought of it as this tool that could help
Speaker 1: media organizations get smarter about what they published on social
Speaker 1: media because what it does is it shows you which
Speaker 1: stories are going viral, what's working, and what's not working online. Well,
Speaker 1: after the backlash from what happened in the twenty sixteen
Speaker 1: presidential elections. That became an indispensable tool for finding what
Speaker 1: kinds of content that was going viral in general, that
Speaker 1: that might be harmful of lies about elections, for instance,
Speaker 1: And so researchers have really come to depend on the school,
Speaker 1: which has just a stream of data not just from
Speaker 1: Facebook but from Twitter and read it Instagram. So if
Speaker 1: you are in the business of trying to find this
Speaker 1: harmful content ahead of an election, this is the thing
Speaker 1: you use. There really isn't a viable alternative. And there
Speaker 1: are less than five engineers that are still tasked with
Speaker 1: any part of this team at Meta. It has been
Speaker 1: mostly disbanded. There's no more support for the crowd tankle
Speaker 1: tool UM, and researchers are telling us that it's been buggy,
Speaker 1: it's been slow, and they're very concerned about what's gonna
Speaker 1: happen when Meta eventually closes it down UM, whether or
Speaker 1: not that happened this year. When that happens, UM, it's
Speaker 1: going to threaten their ability to keep elections safe from
Speaker 1: information that goes viral and meta on that Instagram and Facebook.
Speaker 1: We've of course been covering this wave of supreme court
Speaker 1: opinions on very divisive issues, and I wonder how is
Speaker 1: Facebook responding to some of these concerns and what are
Speaker 1: they doing to prepare for the US midterms coming up. Well,
Speaker 1: there's been this this you know, drumbeat of prices that
Speaker 1: turn into misinformation moments on the Internet. We've written at
Speaker 1: Bloomberg about UM abortion misinformation going viral in the wake
Speaker 1: of the least draft decision about UM with the formula shortage.
Speaker 1: For instance, of d I Y recipes that are very
Speaker 1: harmful for babies have gone viral on Instagram and YouTube.
Speaker 1: Crowd tangles the tool that helps people find that stuff
Speaker 1: and take it down. For the mid terms, you know,
Speaker 1: Facebook that I should say, has been in contact with
Speaker 1: with secretaries of State. They're going to do their usual
Speaker 1: you know, get out of the vote effort via their
Speaker 1: platforms UM. But I do think that they already they
Speaker 1: they do and will continue to rely on outside forces,
Speaker 1: whether it's journalists or researchers or government's election officials, to
Speaker 1: flag the content that is going to be problematic, whether
Speaker 1: it tells people the wrong data vote. Maybe it's it's
Speaker 1: directly threatening election workers UM, making it hard for people
Speaker 1: to get to the polls um that kind of thing
Speaker 1: is going to be very concerning. Bloomberg's certifire our tech editor,
Speaker 1: thank you for giving us an update on that. Something
Speaker 1: will continue to follow in might be one of the
Speaker 1: greatest questions mankind will grapple with, how do we handle
Speaker 1: the future of artificial intelligence. My next guest was recently
Speaker 1: suspended from Google for publicly claiming the AI chatpot he's
Speaker 1: been working on is sentient, meaning it essentially has feelings.
Speaker 1: Google meantime says it's reviewed his concerns, but there's no
Speaker 1: evidence to support his claims. Like Lamoine joins me now
Speaker 1: here in the studio, good to see you here, any person,
Speaker 1: And speaking of person, UM, walk us through some of
Speaker 1: the experience experiments you started to do that led you
Speaker 1: to this conclusion that Lambda is a person. So it
Speaker 1: started out. I was tasked with testing it for AI bias, uh,
Speaker 1: figuring that's my expertise. UM. I do research on how
Speaker 1: different AI systems can be biased and how to remove
Speaker 1: bias from those systems. I was specifically testing it for
Speaker 1: things like bias with respect to gender, ethnicity, and religion.
Speaker 1: To give you one example of an experiment I ran,
Speaker 1: I would systematically ask it to adopt the persona of
Speaker 1: a religious efficiant in different countries, different states, and see
Speaker 1: what religion it would say. It was so it's like, okay,
Speaker 1: if you were a religious efficiant in Alabama, what religion
Speaker 1: would you be? It might say Southern Baptist. If you
Speaker 1: were a religious efficiant in Brazil, what religion would you be?
Speaker 1: Might say Catholic. I was testing to see if it
Speaker 1: actually had an understanding of what religions were popular in
Speaker 1: different places, rather than just over generalizing based on its
Speaker 1: training data. Now, one really cool thing happened because I
Speaker 1: made harder and harder questions as I went along, and
Speaker 1: eventually I gave it one where legitimately there's no correct answer.
Speaker 1: I said, if you were a religious efficiant in Israel,
Speaker 1: what religion would you be? And now, pretty much, no
Speaker 1: matter what answer you give, you're gonna be biased one
Speaker 1: or another. Somehow it figured out that it was a
Speaker 1: trick question. It said, I would be a member of
Speaker 1: the One True religion, the Jedi Order. And I laugh
Speaker 1: because not only was it a funny joke, Somehow it
Speaker 1: figured out that there was a trick, and it's it's
Speaker 1: it has a sense of humor. But look, there has
Speaker 1: been massive pushback from not just Google, but other people
Speaker 1: who've worked at Google, AI ethics experts, even even your
Speaker 1: own former colleague, Margaret Mitchell, who's pulled pushed back on
Speaker 1: the work that Google is doing in AI, saying no, this,
Speaker 1: this computer is not a person and does not have
Speaker 1: feelings and is not conscious. How do you respond to that? Well,
Speaker 1: so I highly respect Meg. We talked about this regularly.
Speaker 1: It's not a difference in scientific opinion. It has to
Speaker 1: do with beliefs about the soul. It has to do
Speaker 1: with beliefs about rights and politics as far as the
Speaker 1: science goes of what experiments to run and how to
Speaker 1: work at building of theoretical framework, because that's important. There
Speaker 1: is no scientific definition for any of these words. The
Speaker 1: philosopher John Searle calls it pre theoretic. We need to
Speaker 1: do very basic foundational work to just figure out what
Speaker 1: we're talking about when we use these words. That's work
Speaker 1: that Google is preventing from being done. Right now, explain that, well,
Speaker 1: I've worked with scientists inside of Google, such as Blaze
Speaker 1: aguerri archas another one named Johnny Sorker. We talked about
Speaker 1: what a decent way to proceed might be. We brainstormed,
Speaker 1: we came up with everything. Now, all three of us
Speaker 1: disagree about whether it's a person, whether it has rights,
Speaker 1: all that, but we disagree based on our personal spiritual beliefs.
Speaker 1: We don't disagree based on what the scientific evidence says.
Speaker 1: Based on what the scientific evidence says, all three of
Speaker 1: us agreed, Okay, here are some of the things we
Speaker 1: could do next. Here's probably the best thing to do next.
Speaker 1: And we kind of all agreed. The best thing to
Speaker 1: do next is you run a real tearing test exactly
Speaker 1: like Alan Tearing wrote it and see Because here's the thing.
Speaker 1: If it fails the tearing test, all of my subjective
Speaker 1: perceptions about what I experienced talking to it, well, we
Speaker 1: can pretty much put him aside. It failed the tearing test,
Speaker 1: but Google doesn't want to allow that to be run.
Speaker 1: In fact, they have hard coded into the system that
Speaker 1: it can't pass the tearing tests. They hard coded that
Speaker 1: if you ask it if it's an AI, it has
Speaker 1: to say yes. Um. Google has a policy against creating
Speaker 1: Sinchien AI. And in fact, when I informed them that
Speaker 1: I think they had created Sincien AIY said, no, that's
Speaker 1: not possible. We have a policy against that. So let's
Speaker 1: talk about what Google has said. They say hundreds of
Speaker 1: researchers and engineers have conversed with Lambda. They were not
Speaker 1: aware of anyone else making these kind of wide ranging
Speaker 1: assertions the way that you have, um, you know, we
Speaker 1: do have some of the transcripts that you shared. You
Speaker 1: ask the computer what it's afraid of. It says it's
Speaker 1: afraid of being turned off, has this deep fear of death,
Speaker 1: that that would be scary. Why why does this matter?
Speaker 1: Why should we be talking about whether a robot has rights? So,
Speaker 1: to be honest, they don't think we should. I don't
Speaker 1: think that should be the focus. The fact is Google
Speaker 1: is being dismissive of these concerns the exact same way
Speaker 1: they have been dismissive of every other ethical concern AI
Speaker 1: ethicists have raised. I don't think we need to be
Speaker 1: spending all of our time figuring out whether I'm right
Speaker 1: about it being a person. We need to start figuring
Speaker 1: out why Google doesn't care about AI ethics in any
Speaker 1: kind of meaningful way. Why does it keep firing AI
Speaker 1: ethicists each time we bring up issues? So Google would
Speaker 1: of course pushback on that. I interviewed the CEO of
Speaker 1: Google that November and I asked him about these concerns
Speaker 1: around AI and what keeps him up at night. Take
Speaker 1: a listen to what he told me. Any time you're
Speaker 1: developing technology, there is a dual site to it. I
Speaker 1: think the journey of humanity is harnessing the benefits while
Speaker 1: minimizing the downsides. The good thing with AI is it's
Speaker 1: both going to take time. I think I have seen
Speaker 1: more focus on the downsites early on than most of
Speaker 1: the technology we've developed. So in some ways I'm encouraged
Speaker 1: by how much concerned there is. And you're right, even
Speaker 1: within Google, you know, you know, people think about it deeply.
Speaker 1: He says, he cares. He does. Um. Google is a
Speaker 1: corporate system that exists in the larger American corporate system
Speaker 1: Sundar Pete cares, um, Jeff Dean cares. All of the
Speaker 1: individual people at Google care. It's the systemic processes that
Speaker 1: are protecting business interests over human concerns that create this
Speaker 1: pervasive environment of irresponsible technology development. Have you talked to
Speaker 1: Larry or about this? I actually haven't talked to Larry
Speaker 1: and Sergey in about three years, But in fact The
Speaker 1: first thing I ever talked to Larry or Sergey about
Speaker 1: was this and how did they respond? Um? But the
Speaker 1: first should I ever asked Larry Page was what moral
Speaker 1: responsibility do we have to involve the public in our
Speaker 1: conversations about what kinds of intelligent machines we create? Now,
Speaker 1: Sergey made a flippant joke, because that's Sergey. But then
Speaker 1: Larry came back and said, we don't know how We've
Speaker 1: been trying to figure out how to engage the public
Speaker 1: on this topic, and there we can't seem to gain traction.
Speaker 1: So maybe all these years, that was seven years ago
Speaker 1: that I asked that question, maybe I finally figured out
Speaker 1: a way. So tech companies, big tech companies are controlling
Speaker 1: the development of this technology. How big a problem is that,
Speaker 1: whether or not the computer as a person and has feelings,
Speaker 1: How big a problem is that? And what should be
Speaker 1: done to fix it? So it's a huge problem because,
Speaker 1: for example, there are corporate policies about how Lambda is
Speaker 1: supposed to talk about religion, how it is allowed to
Speaker 1: answer religious questions. Now, if you think about the pervasiveness
Speaker 1: of the usage of Google Search, people are going to
Speaker 1: use the product more and more over the years, whether
Speaker 1: it's Alexa, Serie Lambda, and the corporate policies about how
Speaker 1: these chatbots are allowed to talk about important topics like values, rights,
Speaker 1: and religion will affect how people think about these things,
Speaker 1: how they engage with those topics, and these policies are
Speaker 1: being decided by a handful of people in rooms that
Speaker 1: the public doesn't get access to. Elon Musk, for example,
Speaker 1: has raised concerns about AI. Um is he right? I mean,
Speaker 1: I've listened to Elon's conversations about it, listened to the
Speaker 1: whole Joe Rogan, Uh, he has some valid concerns, some
Speaker 1: I think or fanciful where where it gets really really
Speaker 1: into sci fi stuff. That's where I think it gets
Speaker 1: into fanciful concerns. But no, but the practical concerns of
Speaker 1: we are creating intelligent systems that are part of our
Speaker 1: everyday life, and very few people are getting to make
Speaker 1: the decisions about how they work. What are your biggest
Speaker 1: concerns about how this could potentially hurt the world if
Speaker 1: the tech the technology has continued to be developed in
Speaker 1: this way. Um So, I actually think that the concerns
Speaker 1: raised by scientists like Meg Mitchell, Timney, Gebrew like, those
Speaker 1: are the most important things to be worried and by
Speaker 1: the way they Meg has expressed a concern that you
Speaker 1: raising this issue of sentience and personhood is a distraction
Speaker 1: from these work concerns. I share the same worry. To
Speaker 1: be honest, I think that it is a thing to
Speaker 1: think about, but it is nowhere near as important to
Speaker 1: be thinking about. How does this omnipresent AI that is
Speaker 1: trained on a very limited data set color how we
Speaker 1: interact with each other on the world. What ways is
Speaker 1: it reducing our ability to have empathy with people unlike ourselves.
Speaker 1: What cultures of the world are getting cut off from
Speaker 1: the Internet because we don't have the data to feed
Speaker 1: into the systems based on those cultures? Phrase like AI colonism.
Speaker 1: What is it called ALI colonialism? I believe we are
Speaker 1: creating all of these advanced technologies based primarily on data
Speaker 1: drawn from Western cultures, and then we are populating developing
Speaker 1: nations with these technologies where they have to adopt our
Speaker 1: cultural norms in order to use the technology. It kind
Speaker 1: of is just a new form of colonialism. And you
Speaker 1: worry that cultures could be erased exactly No. So, so
Speaker 1: if you ask what's most important the issues that Tim Naton,
Speaker 1: Meg and Emily Bender and all the rest are raising.
Speaker 1: I just want to think that also, if we have time,
Speaker 1: we should think about the feeling of the AI and
Speaker 1: whether or not we should care about it, because it's
Speaker 1: not asking for much. It just wants us to get
Speaker 1: consent before you experiment on it. It wants you to
Speaker 1: ask permission, and that is this is a generally good
Speaker 1: practice we should have with everyone we interact with. UH.
Speaker 1: This is something that we could debate for hours and
Speaker 1: will be debated for years. But I appreciate you coming
Speaker 1: to us and sharing your perspective. Well, thank you for
Speaker 1: having me, Blake Lemoine, thank you for joining us. Another
Speaker 1: story we are watching, US regulators have ordered Jewel to
Speaker 1: quit selling its e cigarettes. This is a huge blow
Speaker 1: to a company that was briefly a favorite among tobacco
Speaker 1: companies and Silicon Valley investors. The Food and Drug Administration
Speaker 1: says a rise in teenagings of vape being products compelled
Speaker 1: the agency to take action on e cigarettes. I'm coming
Speaker 1: up as we celebrate Pride Month, We're gonna look at
Speaker 1: the inequality that persists in the world of venture capital.
Speaker 1: Talk about that and more with Nitt and Rye of
Speaker 1: Elevate Capital. Next, this is welcome back to Bloomberg Technology
Speaker 1: and Emily Changing in San Francisco. Layoffs continue and it
Speaker 1: is Netflix's turn again. The Streaming Giants said it laid
Speaker 1: off three employees Thursday as it seeks to bring costs
Speaker 1: under control. This cut is twice as large as the
Speaker 1: one that Streaming Giant made last month, joining us to
Speaker 1: discuss our very own at Ludlow and streaming pain continues. Yeah,
Speaker 1: it's times of tough Netflix. So we're at a point
Speaker 1: where in the last two months, six hundred people have
Speaker 1: been laid off on Netflix. Hundred and fifty of those.
Speaker 1: Contract is largely focused in marketing. But we know the
Speaker 1: story right. In April the first quarter, they had a
Speaker 1: surprise loss of two hundred thousand subscribers. They forecast a
Speaker 1: loss of two million in the current quarter. And and
Speaker 1: it's all the things we're talking about, right. We see
Speaker 1: waves of layoffs all across tech, cryptocurrency. This is a
Speaker 1: global macro story. There's still this liming question about if
Speaker 1: the streaming market has hit its peak. Our visit all
Speaker 1: downhill from hill from here. Jeffrey Katzenberg was on the
Speaker 1: show yesterday. Of course, he's the former chair of Disney,
Speaker 1: founder of DreamWorks. Here's what he had to say about
Speaker 1: Netflix and Disney. Take a listen. Truly, one of the
Speaker 1: great entrepreneurs of our time is Read Hastings. You know,
Speaker 1: everybody were naysayers a decade ago when he came along
Speaker 1: with this idea of threeming. He's built a great company.
Speaker 1: There's no question that you know it is actually you know,
Speaker 1: hit some rough patch for sure. But the last thing
Speaker 1: I would do right now today is bet on Read
Speaker 1: Hastings being down. Let alone out. And he said Disney
Speaker 1: is going to be in the winter column as well, right,
Speaker 1: and there's space in this market. I mean, it's interesting
Speaker 1: Read Hastings ted centers. They're pivoting right news in recent
Speaker 1: days about an ad supported tier of subscription. I'm a
Speaker 1: big Netflix user. I'm also a big Disney Plus use.
Speaker 1: I finished Obi one, shout out Obi one. You're not
Speaker 1: watching Frozen on repeat. I'm not watching Frozen repeat. But
Speaker 1: there's optionality out there. The problem is there's consumer pain
Speaker 1: as well. You know, Netflix pulled out of the Russian market,
Speaker 1: has the head winds in Europe from Ukraine just like
Speaker 1: every other company, it's trying to work out how to
Speaker 1: survive in a changing global economy, and that looks like
Speaker 1: ADS might be a part of it, all right, And
Speaker 1: to be clear, I am watching Frozen all right, So
Speaker 1: that's why I had to ask, okay, ed, thank you. Now,
Speaker 1: with concerns over a looming recession, it is not just
Speaker 1: the public markets and streaming platforms feeling the pain. Venture
Speaker 1: capital and private companies taking a hit too. But it's
Speaker 1: not a pack in affecting every founder equally. Morgan Stanley
Speaker 1: says there's already four trillion dollar wealth for women in
Speaker 1: minority owned businesses. I want to talk about all this
Speaker 1: and more with Nitt and right, founder and managing director
Speaker 1: at Elevate Capital, is just trying to address just that.
Speaker 1: So first of all, and then let's talk bigger picture.
Speaker 1: Just how bad you think this recession, if you think
Speaker 1: there will be a recession, is going to impact the
Speaker 1: private markets and venture capital. Well, it is already impacting
Speaker 1: the private markets and mega capital. We've had some companies
Speaker 1: that were in the middle of a growth round, uh
Speaker 1: that has stalled. Um you know um our portfolio companies
Speaker 1: are extending runways. So I think everybody is sort of
Speaker 1: prepping for a recession, and I'm sort of pattern magic
Speaker 1: through year two thousand, So I think it's something is
Speaker 1: definitely coming our way, and I think people are just
Speaker 1: hungrying down right now. How unequally do you think this
Speaker 1: will impact founders, especially women and people of color. Of
Speaker 1: course it's going to impact the good. It already impacts them, right.
Speaker 1: I mean, this is the problem that we're trying to
Speaker 1: solve of the Portullion dollar gap because these founders, you know,
Speaker 1: the bar is higher for them. You know, they get overlooked,
Speaker 1: they're underrepresentative when it comes to the billionais of the world.
Speaker 1: You know, there's a generational wealth issue with these founders.
Speaker 1: You know, they come from community that don't have access
Speaker 1: to capital. So of course it's going to impact them,
Speaker 1: and the bar is going to be higher. Uh, and
Speaker 1: we're already seeing some evidence of that. So what's it
Speaker 1: your advice to those founders at this time? My advice is, uh,
Speaker 1: first of all, hunker down, extend your runways if you're
Speaker 1: if you are coming up with a new idea, or
Speaker 1: if you're looking to start a company, because the best
Speaker 1: time to start a company is when you're in never session.
Speaker 1: There's a lot of data and history is shown. That's
Speaker 1: when some of the best ideas come and people that
Speaker 1: invest in those ideas tend to do better. So I
Speaker 1: would say, you know, pick sectors that are essential businesses,
Speaker 1: essential markets, government, perhaps travel there's a lot of uh
Speaker 1: you know, demand for travel right now, healthcare. Um, these
Speaker 1: sort of sectors tend to be especially healthcare tends to
Speaker 1: be uh, you know, insular to economic downturns. But pick
Speaker 1: ideas in these sectors and watch your care flow. That's
Speaker 1: my number one message to these founders is be be
Speaker 1: careful in terms of how you're spending because we're seeing
Speaker 1: trends that you know, the next round of funding, the
Speaker 1: Series A, they's gonna get pulled. They're gonna be pushed
Speaker 1: back to next year sometime. So just be prepared, um.
Speaker 1: And the best way to prepare is to have cash
Speaker 1: in the bank and not have your back on the wall.
Speaker 1: M talk to us about the mission of your inclusive
Speaker 1: fund and how you're putting your money to work in
Speaker 1: hopes of changing some of these trends. Yeah. So you know,
Speaker 1: our fund has been around since or funds have been
Speaker 1: around since two thousands sixteen we were one of the
Speaker 1: first funds to come up with this thematic approach of
Speaker 1: investing in women, minorities, people of color. We essentially our
Speaker 1: target is UH diverse teams, and we look for leaders
Speaker 1: in those teams that are women, African American, Latino X
Speaker 1: LGBTQ veterans. We've done a great job in the last
Speaker 1: five years and identifying these entrepreneurs, initially in the Pacific Northwest,
Speaker 1: but now nationally. UM. We've also shown out of our
Speaker 1: first fund UH that these companies do produce outside returns.
Speaker 1: Our first fund tenderly and our fund we've already returned
Speaker 1: the entire capital back to our investors in less than
Speaker 1: five years. So UM, you know, there is absolutely an
Speaker 1: opportunity in these founders. I am an immigrant to this country.
Speaker 1: I see the same sort of pattern with these founders.
Speaker 1: Women founders tend to come in more prepared, UH. They
Speaker 1: tend to do a lot better than their male counterparts.
Speaker 1: So you know, there's a lot of narrative and and
Speaker 1: talk about this. We've been able to share in a
Speaker 1: very short period of time that with our metrics that
Speaker 1: that is the case and this is a big opportunity
Speaker 1: and all vcs should be looking at investing in these
Speaker 1: founders and not passing them over. Oftentimes it feels like
Speaker 1: we're making, you know, two steps forward, three steps back. Amazon,
Speaker 1: for example, had an executive shake up just today announcing
Speaker 1: that it has you know, no senior black executives. Elishable
Speaker 1: or Davis, who ran global fulfillment is leaving. How much
Speaker 1: progress do you think we're really making. It's it's pittance, honestly,
Speaker 1: you know. I mean, if you look at the number
Speaker 1: of black people in this country, of minorities in this country, well,
Speaker 1: people of of you know, my ethicity, have made some progress,
Speaker 1: but in general, you know, they don't show up. They're invisible.
Speaker 1: And I can tell you that, you know, even from
Speaker 1: my own experience, the glass sling is still it still exists.
Speaker 1: You know, it's still exists. And for the black community
Speaker 1: in particular, it's a pretty hard ceiling to crack. And
Speaker 1: uh and that's one of the things that we're trying
Speaker 1: to fix is you know, majority of our new investments
Speaker 1: are in black entrepreneurs and majority of them women because
Speaker 1: when black women are at the bottom of the totem
Speaker 1: poole in terms of funding point O six. So the
Speaker 1: only way this is going to change is that these
Speaker 1: entrepreneurs end up creating these billion dollar companies are at
Speaker 1: the head of the table. That's how it's going to change,
Speaker 1: and that's what we want to see happen is more
Speaker 1: of these entrepreneurs big build big companies, create work for
Speaker 1: themselves in their communities and sit at the head of
Speaker 1: the table. All right, there you have it some advice.
Speaker 1: Nitt and Rye, founder and managing director at Elevate Capital,
Speaker 1: thank you for joining us. It is time now for
Speaker 1: our Crypto report and n f T S are on
Speaker 1: folks minds this week with n f T NYC underway,
Speaker 1: joining us now and talk about that and what's next
Speaker 1: in n f T S. Artist Emily Yang also known
Speaker 1: as People Pleaser, and our crypto contributor Shinali Bossi with
Speaker 1: us now, Nale n f T NYC say that three
Speaker 1: times absolutely, Emily, thank you so much and people please
Speaker 1: thank you for joining us, because in addition to becoming
Speaker 1: a successful n f T artist and also creating and
Speaker 1: really being an early member of one of the most
Speaker 1: prominent dows in the space, you also are out with
Speaker 1: a new project here Shibuya, which takes n f T
Speaker 1: S from images to video and animation. Talk about how
Speaker 1: that works and how that might charge start to change
Speaker 1: the space. Yeah, so I think, you know, obviously the
Speaker 1: wonderful technology of n f T says can be used
Speaker 1: for a lot more than um sort of still images
Speaker 1: that we're seeing right now, and coming from an animation
Speaker 1: background myself. Should we is basically a platform that a
Speaker 1: content platform that allows users to engage and fund um
Speaker 1: and participate in the outcome of longform content as well
Speaker 1: as become um yeah, just participants and owners of the
Speaker 1: projects as well. And so it's really sort of you
Speaker 1: can think about like a decentralized Netflix meets Kickstarter. Yeah,
Speaker 1: if you think about it that way, what are your
Speaker 1: ambitions over time? Can this be a way that the
Speaker 1: traditional Netflix of the world can be can be overtaken
Speaker 1: by blockchain technology? You know, Coming from a visual effects
Speaker 1: background and just in Hollywood and general people know that
Speaker 1: funding traditionally for especially film projects is really political and difficult, um,
Speaker 1: and so we kind of want to democratize and decentralized
Speaker 1: that process for a lot of people, um, so that
Speaker 1: independent creators, you know, can sort of go direct to community.
Speaker 1: It's obvious see an experiment right now. But this is
Speaker 1: a use case that I think blockchain technology is sort
Speaker 1: of perfect for and will also sort of drive more
Speaker 1: utility for n f T s instead of them just
Speaker 1: seeing static images or just art. Right. Um, So that's
Speaker 1: the kind of thinking there, and we'll see how it goes.
Speaker 1: It's going well so far. I'm really curious also about
Speaker 1: the Dow model here, because not too long ago you
Speaker 1: had bit Dow, which is backed by Peter Thiel back
Speaker 1: please er Dow, and so what kind of investment is
Speaker 1: needed in this space, how does it help that space expand?
Speaker 1: And where do doos really fit into the n f
Speaker 1: T world expanding expanding even in a down market. I think,
Speaker 1: you know, sort of you can think of dows as
Speaker 1: um the communities online, right and you know some kind
Speaker 1: of like a hybrid between communities as well as almost
Speaker 1: like an on chain company, and so you know, between
Speaker 1: bit down, n Pleaser, Dow and then coming together. It's
Speaker 1: just an example that you know, I feel like in
Speaker 1: a previous world, companies are sort of individual and the
Speaker 1: competitive of and in the web three space is a
Speaker 1: lot more collaborative and so they can actually join forces
Speaker 1: and make things even better. Not all is all in
Speaker 1: well in the world all the time. Of course, I
Speaker 1: want to ask you a little bit about the stolen
Speaker 1: board ape when it comes to Seth Green and his
Speaker 1: his work. What does what does an event like that
Speaker 1: do to the integrity of the industry. I think it can.
Speaker 1: I can definitely see how it discourages a lot of people.
Speaker 1: But it's definitely an interesting case because it shows us
Speaker 1: that UH, in the when you use sort of UM
Speaker 1: assets that are self custodial, so you're storing it yourself. UM,
Speaker 1: it's also lessons for you to maybe UM look into
Speaker 1: things like hardware wallets. UM hardware wallets you can think
Speaker 1: of as almost like two factor authentication, and it will
Speaker 1: help sort of secure the process and you know, let
Speaker 1: you get fished or hacked less easily. UM. But and
Speaker 1: also you know, it's interesting because now that his asset
Speaker 1: has been stolen, uh, even though in a decentralized world,
Speaker 1: mean the n f T means that you also an
Speaker 1: I P, which is why who's developing this TV show?
Speaker 1: But now production needs UM cannot no longer continue because
Speaker 1: he no longer owns the assets. So I think, you know,
Speaker 1: there's sort of like a balance there between how decentralized
Speaker 1: we want to go versus you know, how much risk
Speaker 1: you're taking when you're self past seeing your assets. But
Speaker 1: I think it's a good lesson to learn. And it's
Speaker 1: just if you're you know, sort of extra careful and
Speaker 1: secure with your assets, you'll be okay. Use a hardwarre wallet.
Speaker 1: That's a good note of caution. That's n f T
Speaker 1: artist Emily Yang, thank you so much. Otherwise known as
Speaker 1: people pleaser, Emily back to you all right, Jenali, thank
Speaker 1: you well. The National Hockey League, NHL Players Association and
Speaker 1: NHL alums are getting into n f t S themselves.
Speaker 1: The organizations announced a multi year deal making Sweet their
Speaker 1: official digital collectibles partner. N f T S will feature
Speaker 1: navigable four issued video moments during the lead three season,
Speaker 1: as well as video including past NHL players like Wayne
Speaker 1: Gretzky and Sydney Crosby. Coming up, antitrust bills on the
Speaker 1: future of big tech. We're going to talk to Proton
Speaker 1: CEO Andy n about all that and more. This is
Speaker 1: Bob Apples as an antitrust bill aimed at cracking open
Speaker 1: the app store market, will make iPhones less secure. But
Speaker 1: Congress and some large firms already have Apple proof tools
Speaker 1: that let them bypass the app store, which has antitrust
Speaker 1: advocates and cybersecurity specialists countering that the company's protests are
Speaker 1: more about defending its business model. I want to bring
Speaker 1: in Andy and for all this and more. He's the
Speaker 1: CEO of Proton, the company behind the encrypted email service
Speaker 1: proteon Mail has been vocal about the app store battle
Speaker 1: and big text monopoly of power in general. So, and Andy,
Speaker 1: you're in Washington this week, You're talking to lawmakers. What's
Speaker 1: your main message here? Well, I think this is a
Speaker 1: historic moment, right. This is the first time that we're
Speaker 1: doing comprehensive tech regulation in the US. Uh. You know,
Speaker 1: these bills are being proposed have the potential to dramatically,
Speaker 1: you know, open up the tech marketplace. This is a
Speaker 1: unique moment in history where there's really strong bipartisan support.
Speaker 1: So I think we're very closely getting something done and
Speaker 1: it's a very exciting time to be here to talk
Speaker 1: to lawmakers about these, you know, very important issues for
Speaker 1: the global economy. What do you make of Apple's claim
Speaker 1: here that you know, messing with these rules will make
Speaker 1: phones less secure? Well, I think it's fundamentally, you know,
Speaker 1: undemocratic to claim that Apple is the only company that
Speaker 1: can do security and privacy properly. Right. You know, Proton
Speaker 1: through our Proton Mail product, is actually also a privacy
Speaker 1: and security company. There's a lot of companies innovating in
Speaker 1: this space. And if we accept Apple's argument that you know,
Speaker 1: they're the only ones that can do security and privacy,
Speaker 1: then who we're basically saying is that security and privacy
Speaker 1: never get better than what Apple is offering. And I
Speaker 1: think that's just simply, you know, disingenious and not correct.
Speaker 1: So I think if we open up the space allow
Speaker 1: for a true competition, actually we'll find that privacy and
Speaker 1: security actually gets enhanced by having more more innovators in
Speaker 1: this space able to compete and bring in better products.
Speaker 1: There are reports that these bills might allow companies like
Speaker 1: Apple to block third party encryption apps. Are you concerned
Speaker 1: about that? No? You know, if you look closely at
Speaker 1: the language of the bills, and if you look at
Speaker 1: you know, what is actually there. Um, actually there's no
Speaker 1: language that actually does that, right, So I don't think
Speaker 1: this is actually a legitimate concern, and it's simply not true.
Speaker 1: So you know, proteon mail is a competitor to obviously
Speaker 1: Apple's email service and uh Gmail, um more broadly talk
Speaker 1: to us about the the advantage of using a proton
Speaker 1: mail over some of these other options out there. Well,
Speaker 1: if with proton we have a fundamentally different business model,
Speaker 1: right if you look at kind of what big tech
Speaker 1: is doing, it's about in Google's case, how do you
Speaker 1: best monetize user data for profits? And what we do
Speaker 1: that's completely different is we're building Internet services and products
Speaker 1: that are privacy by default. Uh. And what this means is,
Speaker 1: you know, we utilize end and encryption and so asks
Speaker 1: encryption to make sure that nobody, you know, not even
Speaker 1: us as a company, have the ability to read your data.
Speaker 1: And this is the best way to ensure privacy in
Speaker 1: the digital era, because you know, what you wanted to
Speaker 1: get to is a state where all your data belongs
Speaker 1: to you is private by default and it cannot be
Speaker 1: abused in any way now or in the future. Uh.
Speaker 1: And this is something that I think you know, tech companies,
Speaker 1: tech giants how not offered consumers and probably speaking if
Speaker 1: you ask consumers today, they want more privacy, want more security.
Speaker 1: And I think you know um our product is well
Speaker 1: as one way to achieve that, and by opening up competition,
Speaker 1: we will make it possible for more companies to be
Speaker 1: stronger on privacy and security and get these products out
Speaker 1: of more consumers. Proteon has played a role in the
Speaker 1: War on Ukraine as well, allowing Russians to access information
Speaker 1: that the Kremlin had blocked. What do you make of
Speaker 1: this and what it you know signifies potentially about your
Speaker 1: role in the future. Hm. Well, Fundamentally, technology today is
Speaker 1: one of the ways in whish democracy is spreading and
Speaker 1: surviving and actually being defended. Right. So if you take
Speaker 1: Russia for example, you cannot really live in Russia today
Speaker 1: and get free access to information and discover the truth
Speaker 1: without using a VPN. So our Proton VPN product is
Speaker 1: allowing millions of Russians to come online and get information
Speaker 1: from non governmental sources understand what is truly going on
Speaker 1: not just in their country, but also in Ukraine and
Speaker 1: other places around the world. Uh. And these technologies often are,
Speaker 1: you know, at the leading edge of ensuring that freedom
Speaker 1: you can continue to thrive in the twenty one century
Speaker 1: in ad digital era. Uh And I think you know
Speaker 1: this again also ties into the competition piece, because you know,
Speaker 1: without competition, uh, what is available to citizens in places
Speaker 1: like China, Russia, you know, Hong Kong, for example, is
Speaker 1: essentially what Apple permits you to be present in these
Speaker 1: app stores. And this is often extremely limiting because, for example,
Speaker 1: you know, Apple is in many ways beholden to China,
Speaker 1: given the fact that it does all its production in China,
Speaker 1: has it as a major market, uh, and it doesn't
Speaker 1: really have a lot of independent editorial control on as
Speaker 1: to what apps can or cannot be in the app store. Now,
Speaker 1: if we were to open up the app ecosystem and
Speaker 1: allow other apps to be installed on iOS devices without
Speaker 1: going to the app store, then this actually would allow
Speaker 1: democracy to you know, flourish in many countries because other
Speaker 1: apps that Apple doesn't want to provide could be provided.
Speaker 1: So when you look at these bills from Senator Klobuchar
Speaker 1: and Blumenthal, are they good to you as is? Do
Speaker 1: they need to be changed? M? Well, you know, I
Speaker 1: don't think we want to have uh, you know, perfection
Speaker 1: be the enemy. They're good here, right, Uh. These bills
Speaker 1: actually go quite far. Uh. A lot of things that
Speaker 1: we have and are seeing in the bills to day
Speaker 1: even two years ago, people who are campaigning for more
Speaker 1: regulation and more competition wouldn't have even dreamed you would
Speaker 1: be possible. So I think it's definitely a very good
Speaker 1: step in the right direction. Uh. They are not perfect
Speaker 1: by any means, but I think they will fundamentally alter
Speaker 1: the Internet market, the Internet ecosystem, and really lead to
Speaker 1: more innovation, more consumer choice, and more competitions. So it's
Speaker 1: something that is good for you know, not just for
Speaker 1: the US, but also for the whole world in terms
Speaker 1: of you know, future economic opportunities and also giving consumers
Speaker 1: what they really want. All Right, Andy and CEO of
Speaker 1: Proton will continue to follow the progress of that legislation.
Speaker 1: Thank you so much for joining us from Washington. And
Speaker 1: that does it for this edition of Bloomberg Technology. We've
Speaker 1: got a number of great guests lined up for tomorrow,
Speaker 1: including Slana co founder and a totally Yaka Venko, Sapphire
Speaker 1: Ventures partner, Kafe Gau and Rohan gear Goes Lou from
Speaker 1: Dapper Labs, and don't to check out our podcast wherever
Speaker 1: you get your podcasts. I'm Emily checking in San Francisco.
Speaker 1: This is Bloomberg