Speaker 1: I'm Caroline hired at Bloomberg's world headquarters in New York.
Speaker 1: This is Bloomberg Technology coming up. Apple making headway bringing
Speaker 1: its latest Moonshot style project to reality with a focus
Speaker 1: on glucose tracking. We'll bring you our Bloomberg exclusive. Meanwhile,
Speaker 1: a California company again, Tesla announces it's chosen Palo Alto
Speaker 1: for the company's global engineering headquarters. Will have more on
Speaker 1: Elon's improving relations with a Golden State class. We stick
Speaker 1: with autos for an exclusive conversation with the CEO of
Speaker 1: Mercedes from evs to automos driving will cover it. All
Speaker 1: that and so much more coming up, including earnings that
Speaker 1: finally come from Nvidia. Let's get into Apple because as
Speaker 1: when we saw some gyrations throughout the stock on the day,
Speaker 1: look at this peak high at about two o'clock that
Speaker 1: was New York time. Why because we've got a scoop.
Speaker 1: We got indeed some exclusive reporting coming from Markman, who
Speaker 1: broke a story all regarding the next Moonshot coming from Apple,
Speaker 1: the focus on glucose tracking. Mark German, you're with us,
Speaker 1: just talk us through what indeed this is going to be.
Speaker 1: It's all about the watch, right all about the watch,
Speaker 1: all about healthcare, all about glucose tracking. Really the holy
Speaker 1: grail for a smart watch to be able to tell
Speaker 1: you all of your health metrics. And one of the
Speaker 1: most important health metrics, as we all know, is blood
Speaker 1: sugar or blood glucose monitoring. You want to know how
Speaker 1: much glucose is in your body because that's an indicator
Speaker 1: of pre diabetes or type two diabetes or other health conditions.
Speaker 1: And today getting that data requires the prick of a skin,
Speaker 1: right or a blood draw from your veins. What Apple
Speaker 1: wants to do is it wants to create a system
Speaker 1: using chips, sensors, software, algorithms built into the Apple Watch
Speaker 1: to get a read on how much glucose you have
Speaker 1: in your blood without needing a blood sample. Okay, everyone
Speaker 1: that views this show wants to understand the innovation, the
Speaker 1: actual technology behind this. What is new? How is this
Speaker 1: different from what's already on the market. Well, two terms,
Speaker 1: I'll give you one, optical spectroscopy right in the other
Speaker 1: silicon photonics. Those are some pretty hardcore types of technologies
Speaker 1: that Apple's working on to make this happen. Right. This
Speaker 1: means that the technology will use a chip that can
Speaker 1: output light or lasers right into your skin and read
Speaker 1: how much glucose is in your what's known as interstitial fluid.
Speaker 1: That's the fluid that comes out of your blood capillaries,
Speaker 1: and everyone has that fluid across their body. And it
Speaker 1: could use lasers shoote to your skin, and then it
Speaker 1: has sensors that could read right the concentration of light
Speaker 1: in your skin to know how much glucose is there
Speaker 1: in order to get that reading innovation hit right there
Speaker 1: for US mark interesting JP Morgan saying, for now, this
Speaker 1: isn't a threat to device makers, but what about the
Speaker 1: people behind this mark he's building it. Yeah, it's definitely
Speaker 1: not a threat device makers right now because this is
Speaker 1: not going to hit the market probably for another three
Speaker 1: to five years. So I would agree with JP Morgan
Speaker 1: that if something is not hitting for three years, it's
Speaker 1: not going to have an impact. And also after it arrives,
Speaker 1: right there is such a big market share already from Abbott,
Speaker 1: index Com and other providers, and it's going to take
Speaker 1: time for Apple to penetrate that market and get the
Speaker 1: regulation they're looking for. So you know, I would agree,
Speaker 1: at least in the short term in terms of who's
Speaker 1: behind this. Apple has a secret moonshots team called the
Speaker 1: Exploratory Design Group, and this is the team developing this moonshot,
Speaker 1: along with other projects, as well as Apple's health team
Speaker 1: and hardware engineering and software engineering teams. Fascinating. One of
Speaker 1: the most read on the Terminal dot com. Mark German,
Speaker 1: as always, we thank you. Let's get to the breaking
Speaker 1: news that just came. Finally, we've been tracking in videos, earnings,
Speaker 1: postmarket reaction as well to deep dive on the analysis
Speaker 1: of why it's rising after as bloomugg intelligence, as man
Speaker 1: Leap saying, is here with us more than seven percent rally.
Speaker 1: We like the forecast well, so clearly the data center
Speaker 1: was the focus and they did quite well. Although it
Speaker 1: was below consensus, the guidance suggests the data centers spend
Speaker 1: will hold up. And remember data centers directly tied to
Speaker 1: the enterprise tex spending and their CAPEX spend. If all
Speaker 1: the cloud providers are investing, you know, in building more
Speaker 1: cloud capacity, a lot of that spending is going towards
Speaker 1: in videos data centers spend, and I think that's where
Speaker 1: market is excited that, you know, you're not seeing the
Speaker 1: sort of inventory correction we see on the PC side
Speaker 1: with Intel, you know, cutting their forecasts. That's not the
Speaker 1: case with enterprise chips, and so far, enterprise tex spending
Speaker 1: has held up across the board, even when it comes
Speaker 1: to you know, software side, and that's what you see
Speaker 1: on the chip side as well. So so when I
Speaker 1: think data centers, I think artificial intelligence. I look at
Speaker 1: the statement and it says AI is at an inflection
Speaker 1: point setting up a broad adoption reaching into every industry.
Speaker 1: How much is the video set to benefit? Well, so
Speaker 1: they are the leaders when it comes to developing these
Speaker 1: chips for whether it's for chatchee PT or for automotive
Speaker 1: or anything that has to do with you know, parallel processing.
Speaker 1: A GPU type of chip, you can find a lot
Speaker 1: of use cases and that's what they've done well in
Speaker 1: terms of diversifying that top line. I think Intel's biggest
Speaker 1: problem is the fact that they were never able to
Speaker 1: go beyond PCs. Guess what, Nvidia has done that very well,
Speaker 1: and they're able to find these new use cases for
Speaker 1: their GPU chips. Even the gaming segment actually did better
Speaker 1: than expected. Yes, it declined, but you can see once
Speaker 1: the market has a cyclical rebound. Their position very well
Speaker 1: on the gaming side, So that's why you see that
Speaker 1: stock reaction. Although I don't know if Nvidia should be
Speaker 1: trading at five times market cap of Intel, even though
Speaker 1: Intel's revenue is two times bigger. So time will tell
Speaker 1: if evaluation could be a question. Valuations mandy, but notable
Speaker 1: the Intel today. The news was the slashing of the
Speaker 1: dividend at a time that we are worried about boom
Speaker 1: bust cycles. Anything in Nvidia that caused you cause for concern, Well,
Speaker 1: so one is gross margins is very important. This quarter
Speaker 1: they went back to mid sixty percent. Anytime you see
Speaker 1: a chip company trading at mid sixty percent ross margin,
Speaker 1: I'm worried because guess what. As a sector, chip sector
Speaker 1: doesn't command those high gross margins, those high ESPs. Over time,
Speaker 1: it gets commodit highs other players catch up, and it's
Speaker 1: very hard for a chip company to sustain those kind
Speaker 1: of gross margins without layering on software, which is what
Speaker 1: NVIDIAs plays. They want more software on their chips. Interesting,
Speaker 1: we've got breaking news coming from the coal The CFO
Speaker 1: currently sagment Invidios saw orders pause as a timing issue.
Speaker 1: This is to do with the cloud service providers pausing
Speaker 1: orders in the fourth quarter. What does that signal to you?
Speaker 1: That is direct CAPEX spend from the cloud providers. And
Speaker 1: that's the other risk with Nvidia is the customer concentration.
Speaker 1: A lot of that data center revenue, which is a
Speaker 1: fifteen billion dollars run rate, is driven by these hyperscalers,
Speaker 1: which are four or five customers. They are the ones
Speaker 1: who are building cloud capacity. And we all expect a
Speaker 1: digestion phase and it comes to cloud spending. It's not
Speaker 1: as if it's not going to come back, but because
Speaker 1: these companies have been spending, you know, CAPEX, growing it
Speaker 1: at elevated levels, there will be a pause and it
Speaker 1: could be a two quarter pause, it could be four quarters.
Speaker 1: I think that's where they're talking about. Probably order growth sline.
Speaker 1: We'll let you get back to the cool and everyone
Speaker 1: will digest it. Always great to get your remedia analysis
Speaker 1: for the man intelligence is man deep sing well. The
Speaker 1: challenge for the industry in the next three to four
Speaker 1: years is to absorb the additional cost of electrification, to
Speaker 1: protect affordability and make sure that middle classes can buy
Speaker 1: pure evs at an affordable price. Does that mean job cuts?
Speaker 1: It means that we are not excluding anything from the
Speaker 1: task of absorbing the cost of electrification. The Lantis see
Speaker 1: Carlos Tebreras saying that the company that makes jeeps makes
Speaker 1: them as a raalties may have to further adapt its
Speaker 1: industrial footprint in the United States and indeed in Europe
Speaker 1: as a consequence of the expensive shift to evs. That's
Speaker 1: nothing off the table, of course, even additional job cuts
Speaker 1: to further cut down on costs. So now let's talk
Speaker 1: to another key player in the industry. Probe plea to say, ed,
Speaker 1: you're standing by with the leader of Mercedes. Yeah, we
Speaker 1: joined by all the Collonne as chairman of the management
Speaker 1: board is of Mercedes. We're here in the heart of
Speaker 1: Silicon Valley in Sunnyvale. Why why have you come all
Speaker 1: this way to talk to me about software? Where we're
Speaker 1: here at the tech center in Suny Vale from Mercedes
Speaker 1: pans that we have had now for more than twenty
Speaker 1: five years. So we have always been here in the
Speaker 1: valley working with innovative tech partners, and we thought it
Speaker 1: was a fitting place to actually describe what the future
Speaker 1: of software and the corres corresponding hardware looked like. In Mercedes,
Speaker 1: we have a lot of grounds to cover. But I
Speaker 1: want to start by asking you how high does software
Speaker 1: rank as a priority for messees and all of the
Speaker 1: things that you're trying to achieve broadly and electrification, but
Speaker 1: also in autonomous driving. Software is absolutely a core competence
Speaker 1: for the car of the future. So we have been
Speaker 1: building up our software competence gradually over the last years.
Speaker 1: But this is a space that is so broad that
Speaker 1: even if you make yourself the architect of your own
Speaker 1: operating system, you don't have to do everything yourself. You
Speaker 1: need partnering as well. Well, let's jump into that. So
Speaker 1: you have announced a deeper relationship with Google, and it's
Speaker 1: a license agreement. You pay Google for help in building
Speaker 1: out your operating system. Why did you do that instead
Speaker 1: of taking advantage of open source software or just doing
Speaker 1: it yourself. The core of the relationship with Google, the
Speaker 1: strategic partnership that we have formed, is our joint vision
Speaker 1: of taking technology to the next level. Everybody knows Google Maps,
Speaker 1: Google Navigation, and of course YouTube on the entertainment side,
Speaker 1: where we said, what do our customers want? It's all
Speaker 1: about delivering a superior customer experience. So we sat down
Speaker 1: with a Google team and sent what can we do together,
Speaker 1: how can we make navigation in the car go to
Speaker 1: the next level? And that sparked a deeper conversation, and
Speaker 1: here we are announcing a partnership today. Marcus Schaefer, your
Speaker 1: CTO set out the ultimate goal, which is to have
Speaker 1: no screen mirroring, no need to plug in the phone.
Speaker 1: The operating system is all you ever need. But you
Speaker 1: can't get away from the fact that Google through Android
Speaker 1: Auto or Apple through car Play, they are making their
Speaker 1: own moves into this market. How do you reconcile that
Speaker 1: Google's own ambitions with your partnership and your kind of
Speaker 1: want to take control of the software architecture. If you
Speaker 1: take the look at the Mercedes now what it's going
Speaker 1: to be in the future. First of all, you have
Speaker 1: this mind boggling wide screen in the car, and you
Speaker 1: can present anything and everything on that screen. And this
Speaker 1: is where we shouldn't make the mistake of just looking
Speaker 1: at entertainment alone, but think about across domains entertainment interacting
Speaker 1: with the assistance system and automated driving. So you can
Speaker 1: marry navigation with driving assistance and automated driving and create
Speaker 1: whole new use cases and only a vehicle manufacturer is
Speaker 1: in the position to integrate all the different pieces of
Speaker 1: the vehicle down to immersive experiences is music and entertainment
Speaker 1: where you even use the climate control, the scent in
Speaker 1: the car, the subwoofers in the seat to create four
Speaker 1: D sound. All of those things make it a compelling
Speaker 1: argument to go for an integrated approach. But we don't
Speaker 1: have an antagonistic relationship with any one of these tech players.
Speaker 1: We work with them to take their valuable assets digital
Speaker 1: assets and put it into our system. So this is
Speaker 1: really a win win as part of that software strategy.
Speaker 1: Are you actively hiring you know, Google is one example
Speaker 1: of many names in Silicon Valley that have done layoffs recently.
Speaker 1: There is a lot of software engineering talent on the
Speaker 1: market at the moment we are actively hiring. And whereas
Speaker 1: we work with software for many many years, these last
Speaker 1: three or four or five years have really been a
Speaker 1: paradigm shift for us where we're going for partial vertical
Speaker 1: integration and we set out the target a few years
Speaker 1: ago to add another three thousand software engineers to the
Speaker 1: Mercedes team, and we have almost accomplished that already. But
Speaker 1: if we find the right talent in the market, that
Speaker 1: supplements our team. Yes, we are hiring. How much of
Speaker 1: a competitive mode do you feel Mercedes has in the
Speaker 1: theater of software. Do you think that you are actually
Speaker 1: going to be able to do this on your own
Speaker 1: two feet? Absolutely? As an architect of the operating system, yes,
Speaker 1: we have laid out what the whole system is supposed
Speaker 1: to do and it's going to be capable of doing.
Speaker 1: But when you build a software house, you don't have
Speaker 1: to lay every single brick yourself or put up every
Speaker 1: single pile in the bathroom. And that's why you leverage
Speaker 1: tech partnerships. You've got to be in control, asked the architect.
Speaker 1: But leverage tech partnerships and make sure that you work
Speaker 1: with the best to deliver the ultimate customer experience. Self
Speaker 1: driving was another part of today. Thank you for the ride.
Speaker 1: This morning, I went out and took a Level three
Speaker 1: ride using drive pilot on the freeway. It was limited
Speaker 1: to a certain extent. What caught my ear during the
Speaker 1: presentations was fifty percent of net sales for autonomous software
Speaker 1: will go to your partner. And Vidia taught me through
Speaker 1: that relationship and why you went that route to develop
Speaker 1: the compute. We are the first manufacturer that certified a
Speaker 1: Level three system that you drove today, So actually true
Speaker 1: autonomy in this case on the highway in heavy traffic.
Speaker 1: So now we're taking the first few steps here for
Speaker 1: individual mobility where really the car is going to give
Speaker 1: you back the most valuable gift of all time. In
Speaker 1: the relationship within video that we formed about three years ago,
Speaker 1: both parties said, here, okay, listen, let's take this to
Speaker 1: the next level. But let's find another business model where
Speaker 1: both parties invest into the partnership. Yes, but also in
Speaker 1: an intelligent and equitable way, can reap benefits from the partnership.
Speaker 1: So this is a combined risk and reward partnership that
Speaker 1: we think not only technologically but economically is going to
Speaker 1: work really well for both parties. And you know it's
Speaker 1: available in Nevada at the moment, you have a permit,
Speaker 1: you're awaiting California. You talk about this goal of a
Speaker 1: billion euros of EBIT by I think mid decade, generated
Speaker 1: in part from autonomous software. How big is the market
Speaker 1: here in the United States for that or is this
Speaker 1: large You're going to be driven out of Europe. Now,
Speaker 1: United States going to be an important market for US,
Speaker 1: and it's a growing market, so it's about increasing the
Speaker 1: envelope and writing more and more use cases in the
Speaker 1: automated drive space all the way up then to autonomous
Speaker 1: drive level three, drive on highway, on the interstate, and
Speaker 1: in fact the system that we're working on for the
Speaker 1: next generation, we want to take that well above a
Speaker 1: hundred kilometers an hour and then it starts becoming really
Speaker 1: really relevant if you're going on a longer trip, and
Speaker 1: do we believe that we can monetize that absolutely. Tesla
Speaker 1: has a very clear approach of how they package full
Speaker 1: self driving an autopilot. They've had their own use today.
Speaker 1: Of course, how do you decide, Mercedes what you charge
Speaker 1: for and what you don't charge for. You put a
Speaker 1: lot of emphasis throughout the whole day on the customer experience,
Speaker 1: this having to be what the customer wants. But ultimately,
Speaker 1: if you draw up the list, it's a long list
Speaker 1: of things that you pay for on top of your car.
Speaker 1: The good thing with MBOs is that the whole car,
Speaker 1: every single aspect of the car in terms of electric
Speaker 1: electronic architecture, it's digital backbone, will be over the air reachable,
Speaker 1: so we can make your car actually become better with time,
Speaker 1: it doesn't age, it actually gets more functionality over time.
Speaker 1: Some of the functions they're going to be base functions,
Speaker 1: which is just embedded in the basic price of the vehicle,
Speaker 1: but much of the additional stuff, and especially in the
Speaker 1: ultimated driving space, we feel are so attractive that they
Speaker 1: can be monetized or local Ennius, Chairman of the management Board, Mercedes,
Speaker 1: thank you for having us here in Sunny Vale releasing
Speaker 1: your news out here in California, Caroline. Big emphasis on software,
Speaker 1: which they say could reach up to ten billion dollars
Speaker 1: of sales from a software aspected by the end of
Speaker 1: the decade, is something you just got to keep an
Speaker 1: eye on. I know you will. I know we will,
Speaker 1: thanks to Ed And of course we've got to keep
Speaker 1: an eye on what's happening over with Tesra as well.
Speaker 1: Today we're focusing on California. We'll bring in the details
Speaker 1: of the company's new engineering headquarters in the Golden State,
Speaker 1: and then let's have a quick check on some of
Speaker 1: the earnings that come aftermarket and the aftermarket movement therefore
Speaker 1: in stocks eBay. The one we shine a light on now,
Speaker 1: that's Tesla after hours. I want to flick it on
Speaker 1: to what's happening with eBay after Hours, because we did
Speaker 1: see fourth cornernet revenue beating expectations, therefore looking guidance also
Speaker 1: beating expectations, but not enough seven straight quarters of active
Speaker 1: buyers on the downside. And even though this looks sign
Speaker 1: might be a pivot point in terms of its sales,
Speaker 1: it's not enough for investors. We're currently falling for eBay
Speaker 1: after Hours. We're bringing those shares In a moment from
Speaker 1: New York, from San Francisco, the sib Blomberg Tech meets Politics,
Speaker 1: Elon Musk and Gammon Newsome and out saying a new
Speaker 1: Tesla Global Engineering headquarters in Palo Alto, California earlier today
Speaker 1: a sign of well, at least some corporation between the
Speaker 1: electric vehicle maker and the state it once called home.
Speaker 1: Joining us for more s Bloomberg's Dana Hall and is
Speaker 1: this a sort of thoring of relations because I thought
Speaker 1: Tesla hot footed it out of California in twenty twenty one.
Speaker 1: Well that's what everyone thinks. I mean, the company moved
Speaker 1: its corporate headquarters to Austin, Texas, but it still has
Speaker 1: over forty seven thousand employees in California, including many engineers
Speaker 1: it's auto pilot team. And then the announcement today is
Speaker 1: just kind of a proofpoint that, like, you know, Tesla's
Speaker 1: still very much a California company, even if their corporate
Speaker 1: headquarters and their new factory is in Texas. Exactly what
Speaker 1: Gavin Newsom said, it's a California company, forty seven thousand
Speaker 1: employees still here. But he has been known to criticize
Speaker 1: in a musk the tax system, the liberal politics. Will
Speaker 1: he continue to do that. I'm sorry Newsom has not
Speaker 1: criticized Musk directly, but the two have definitely had a
Speaker 1: bit of you know, there was definitely it was definitely
Speaker 1: a big blow to California when Tesla moved its headquarters
Speaker 1: to Texas, and Newsom has been very careful not to
Speaker 1: criticize Musk directly. But you know, we're sort of at
Speaker 1: this point in the culture wars where California and Texas
Speaker 1: are often pitted against each other, and I think what
Speaker 1: we're seeing today is that Tesla and Musk himself somewhat
Speaker 1: rarely are making a point that they are still very
Speaker 1: much here in California. They are hiring in California, they're
Speaker 1: engineering headquarters as in Palo Alto, And it was kind
Speaker 1: of a weird announcement. It was relatively short, very few details,
Speaker 1: but significant. Nonetheless, the first time that I can recall
Speaker 1: seeing Newsome and Musk together in the same place in
Speaker 1: like over a decade. Yeah, sorry to make play a
Speaker 1: sort of Musk has been the critique, the criticizer, and
Speaker 1: not Gammon Newsom. In fact, he was sort of praising
Speaker 1: the CEO right, calling him a visionary spirit and for
Speaker 1: his record of innovation. What more are we expecting out
Speaker 1: of California from Tesla at the moment? Well, Tesla is
Speaker 1: expanding here. I mean, they have this huge megapac facility
Speaker 1: in lay Thrip where they're building their massive batteries that
Speaker 1: they're selling to utilities. This engineering headquarters, you know, it's
Speaker 1: basically Tesla is kind of moving its engineering team to
Speaker 1: be old Hewlett Packard offices in Palo Also. I mean,
Speaker 1: I think you're just going to continue to see the
Speaker 1: company grow and expand both here and in Texas. And
Speaker 1: you know, Musk is very sort of adroitly playing both
Speaker 1: sides of the aisle in terms of the politics and
Speaker 1: an optics of all this. It's always about politics and
Speaker 1: optics sometimes and Dana Hall breaks it over town for us.
Speaker 1: We thank you so much. I'm X and from this
Speaker 1: moment on, I'm going to be your own personal AI
Speaker 1: DJ on Spotify. Let's go move over chat Gypt. Here's
Speaker 1: the generative AI. You've been waiting for, your own personalized DJ.
Speaker 1: Spotify is leaning into generative AI. Just as the trend
Speaker 1: is hot. Think how good you're Weekly Discover mixtape is
Speaker 1: or your year wrapped bos new. Is this generative AI
Speaker 1: part because the DJ's gonna be able to give you
Speaker 1: context and commentary as to why you like a song
Speaker 1: and harp in on your own likes and move away
Speaker 1: from it dislikes. All right, Max, let's get you out
Speaker 1: of your fields and switch up to five. The voice
Speaker 1: that the DJ uses authentic. The actual voice is based
Speaker 1: upon the head of Cultural Partnership. Spotify was my dream
Speaker 1: company to work for and now to be the voice
Speaker 1: for so many people and give context to how they listen,
Speaker 1: give them fun facts about the artists and about how
Speaker 1: they listen, and and just serve it up for him.
Speaker 1: For me is a dream come true. What it did
Speaker 1: was create an additional opportunity. So I see this as
Speaker 1: creating a lot more opportunities for creators such as myself
Speaker 1: to be heard and for your talent to be used
Speaker 1: in with AI. You need the human inputs into AI
Speaker 1: to really do it right, where you can connect and
Speaker 1: be authentic and have that sincerity. So for me, I
Speaker 1: think it presents more opportunities as opposed to taking them away.
Speaker 1: This really could be the future. So discoverability in terms
Speaker 1: of music, welcome back to being back technology. I'm Carline,
Speaker 1: Hide in New York and well Spotify there. Crout sounded
Speaker 1: pretty optimistic about its AI DJ, but generative AI has
Speaker 1: had its share of blunders. Perhaps For instance, some journalists
Speaker 1: recently encountered some strange behavior men interacting Microsoft's preview release
Speaker 1: of its own chatbot this month, and it turns out
Speaker 1: look that Microsoft has already spent months trying to fix
Speaker 1: the disturbing responses, which apparently many data as far back
Speaker 1: as November, and it seems to center on a version
Speaker 1: of Microsoft that dubbed Sydney, an older model of the
Speaker 1: Being chatbot that the company tested prior to its release
Speaker 1: this month. Some of those strange interactions were posted on
Speaker 1: the company's online forum. In some instances, Sidney responded with
Speaker 1: comments like you're either desperate or disdilusional. Or in response
Speaker 1: to your query asking how to give feedback about its performance,
Speaker 1: the bond is said to have answered, I do not
Speaker 1: learn or change from your feedback. I am perfect and superior.
Speaker 1: How worrying is that? Let's dig into all of it.
Speaker 1: Emily Bender is with US professor Linguistics at the University
Speaker 1: of Washington fotcusing in many ways on artificial intelligence on
Speaker 1: big data. You of course have a real focus point,
Speaker 1: in particular on computational linguistics. And therefore, professor, what do
Speaker 1: you make of this? Some call it hype, some call
Speaker 1: it panic and worry, some call it just investigative journalism?
Speaker 1: What do you make as some of the encounters that
Speaker 1: people seem to be having with being so? I think
Speaker 1: there's two things to keep in mind. When you have
Speaker 1: a disturbing encounter as one of these chatbuts, you can
Speaker 1: worry that the chatbut itself is malevolent or sinister, or
Speaker 1: you can take a step back and see that the
Speaker 1: real issue is that people might be taking it as
Speaker 1: something that has communicat of intent and can be trying
Speaker 1: to convey meaning, when in fact, when the output of
Speaker 1: a chatbot seems to make sense, it's because we're the
Speaker 1: ones making sense of it. It has no meaning, it
Speaker 1: has no mind. It's just spitting back language based on
Speaker 1: the patterns in its training data. So it's a reflection
Speaker 1: of us in some ways. What then, could Microsoft be
Speaker 1: doing to better educate us on that? So I think
Speaker 1: there's some design choices that could be made. The fact
Speaker 1: that they have this machine speaking with a first person
Speaker 1: is problematic because that really encourages people to see it
Speaker 1: as an entity, as a mind when it's not. And
Speaker 1: the second thing I think is to really think about
Speaker 1: when is it appropriate to allow synthetic text out into
Speaker 1: the world. Do you want as a company to take
Speaker 1: responsibility for the confabulations of these chatbots? In many ways,
Speaker 1: they've tried to highlight their limitations. The fact also this
Speaker 1: is kind of embeter it's being worked through the original
Speaker 1: few people have been selected to work with it in
Speaker 1: a preview format. Do you think ultimately it's embedding in
Speaker 1: search is a good thing. I really don't. I think
Speaker 1: that chatbots are not what we need for search. There
Speaker 1: might be what we think we want. We've been trained
Speaker 1: by decades of science fiction to imagine that there's a
Speaker 1: future where there's an all knowing computer that we can
Speaker 1: just ask questions out and get the answers. But fact,
Speaker 1: what I learned from my colleagues and the information school
Speaker 1: is that what we really need, or we have an
Speaker 1: information need, is a system that will help us find
Speaker 1: information sources, but give us those sources directly so that
Speaker 1: we can evaluate them and also progressively increase our own
Speaker 1: information literacy. There is a startup. Actually, we've interviewed Niva
Speaker 1: who always sort of tells you where the information is
Speaker 1: originally from. Can that be an easy fix? Do you
Speaker 1: think ultimately a way in which that brings transparency and
Speaker 1: where the information is arising. It depends a lot on
Speaker 1: the design of the system. So if the system is
Speaker 1: we're going to go get some documents and then produce
Speaker 1: a summary with pointers to those documents, that's better, although
Speaker 1: those summaries can still have very strange artifacts in them
Speaker 1: and people aren't always going to go double check in
Speaker 1: the source documents. If on the other hand, it's we're
Speaker 1: going to prevent this, present this answer and then oh,
Speaker 1: by the way, generates some citations, those ones can be
Speaker 1: fake and made up and not where the information is
Speaker 1: really coming from, and so that absolutely doesn't solve the problem.
Speaker 1: You're putting out a lot of research, you're also putting
Speaker 1: out a fair few takedowns on various form social media ones. Professor,
Speaker 1: is anyone coming to you for advice from these companies?
Speaker 1: You know? Surprisingly few. I do sometimes get people asking
Speaker 1: me if I can help them design their system. Usually
Speaker 1: that request comes as if I would do it for
Speaker 1: free instead of as a consultant. So my answer is no.
Speaker 1: But I really do hope that by putting information out there,
Speaker 1: both in published research and in my social media activity,
Speaker 1: I'm helping people ask these questions for themselves and take
Speaker 1: a critical view so called AI technology. What about a
Speaker 1: critical view coming from the government? Is that where we
Speaker 1: should be having some of them monitoring. I think we
Speaker 1: really do need to develop some good regulations as a society.
Speaker 1: What guardrails do we want on this technology? What do
Speaker 1: we want to allow in terms of massive collections of data,
Speaker 1: in terms of systems that can just output texts that
Speaker 1: we might encounter and not know that it was synthetic.
Speaker 1: There's a real risk to pollution of our information ecosystem,
Speaker 1: and I think that that's a societal concern that demands
Speaker 1: viable action coming from the UK, I've seen sort of
Speaker 1: discussions being brought from private and public partnership basis. They've
Speaker 1: tried to have government involved from an early day. Do
Speaker 1: you think ultimately some of the viewpoints from innovation can
Speaker 1: be heard at the same time as having the guardrails
Speaker 1: and a necessary particularly from an ethics perspective. I think
Speaker 1: we do want to have a broad conversation as we're
Speaker 1: designing regulations, and we don't want to put ourselves in
Speaker 1: a situation where you can't build anything new. On the
Speaker 1: other hand, I think that we also need to be
Speaker 1: able to say before something is put out into the world,
Speaker 1: even as BEATA, what requirements do we have about transparency
Speaker 1: about how it's been evaluated so far, transparency about where
Speaker 1: its data comes from, and so on. And I think
Speaker 1: that there is a happy medium to be found there,
Speaker 1: and it is one that is probably best served by
Speaker 1: having a broadly educated public so that we can all
Speaker 1: contribute to this discussion. Thanks for educating us now how
Speaker 1: many vendor Whistick profressor at the University of Washington. We
Speaker 1: thank you. And of course there's some more news that
Speaker 1: we've been seeing out there from JP Morgan, Chase restricted
Speaker 1: its staff's use of chat chypt. According to a person
Speaker 1: familiar with the matter, now, the move impacts employees across
Speaker 1: the firm and reflects normal controls around third party software,
Speaker 1: rather than being triggered by any specific incident. And interestingly,
Speaker 1: we took it to you, our own audience. We asked
Speaker 1: you whether you believe this will become more standard across industries.
Speaker 1: You said no, companies should embrace the new technology. So no,
Speaker 1: fifty three percent think ultimately companies should be using CHATCHYBT.
Speaker 1: I'm afraid JP Morgan. Meanwhile, coming up, we continue our
Speaker 1: conversation on AI and speak with Isabel Friedheim, confounder of
Speaker 1: Magnify and artificial intelligence and machine learning company. And as
Speaker 1: we look towards the break, let's take a look Abetsy,
Speaker 1: another company that's just reported after hours fourth quarter revenue
Speaker 1: showing growth up more than five percent after hours the
Speaker 1: Siblingberg Welcome back to blin Beg Technology. I'm Caroline Hide
Speaker 1: in New York. Let's have a little look what's happening
Speaker 1: with the world of Nvidia right now, Because of course,
Speaker 1: numbers did well show some relief. In particular, this is
Speaker 1: a company that's talking up its game in artificial intelligence.
Speaker 1: They're seeing overall that the results using concerns over inventory levels,
Speaker 1: but also the data center still perhaps showing ultimate weakness
Speaker 1: from here over year, but showing that this is a
Speaker 1: company that continues to thrive from an enterprise sales perspective.
Speaker 1: We were hearing that from our very own mandat sing
Speaker 1: So this is a company that really does continue to
Speaker 1: fire on cylinders when it comes to the ultimate enterprise
Speaker 1: part of the business. Artificial intelligence at a turning point
Speaker 1: according to the CEO, and definitely wanting to be leaning
Speaker 1: into that part of the equation. We're up eight percent
Speaker 1: after hours has stop this already up forty percent since January.
Speaker 1: Now let's continue our conversation. Actually, we've got a bit
Speaker 1: of an AI expert with us. She co founded an
Speaker 1: artificial intelligence machine learning fintech company called Magnify, Isabelle Friedheim.
Speaker 1: But also what's really interesting as well, she's well the
Speaker 1: founder of one of the only all women led spack
Speaker 1: that special purpose acquisition company Networks. Please to say she
Speaker 1: joins us now and it's well, I'm not going to
Speaker 1: spend long on it, but considering artificial intelligence it's just
Speaker 1: everything the market is discussing to hype the reality. How
Speaker 1: much have actually you've been building an AI already? Yeah,
Speaker 1: I think so many companies are using AI now. And
Speaker 1: there's one thing that's really irrefutable. It is a corporate
Speaker 1: America really sets upon antiquated technology. And by that I
Speaker 1: mean that if you look at across almost any industry,
Speaker 1: legacy companies that are the market leaders are incredibly ascid
Speaker 1: heavy and have yet to adopt technological innovation. So you
Speaker 1: see that by looking at successful new market entrance like
Speaker 1: magnifying others and how I said lights they are and
Speaker 1: you see that new companies leverage and capitalize their efficiencies
Speaker 1: on technologies that are available, and they do that in
Speaker 1: their business models, they do that in their go to
Speaker 1: market strategy. And there's tremendous value to be created by
Speaker 1: investing wisely on that convergence. You've been investing. I'm sure wisely,
Speaker 1: but certainly you think wisely when you're a VC. Of course,
Speaker 1: castle VC. I'm interested in why special purpose acquisition companies
Speaker 1: are a way to invest in this moment, considering the
Speaker 1: amount of well hits they've taken From a PR perspector,
Speaker 1: shall I call it. Yeah, I mean, look, we as
Speaker 1: a spack, we look for for great companies that have
Speaker 1: what I described earlier scalable and innovative technologies. They have
Speaker 1: attractive business models and attractive go to market strategies that
Speaker 1: they're going to prove to be really wonderful investments by
Speaker 1: virtue of the differentiated value that they're going to provide,
Speaker 1: and by the way, a lot of those companies contributes
Speaker 1: to the standard of living. And this is what we
Speaker 1: invest in in our spacks. Okay, so Anthena, you're supported
Speaker 1: by an advisory board women lad founders operated as bench
Speaker 1: capitalist investment bankers. Who is in your network and why
Speaker 1: do they want to help? Yeah, we are all women.
Speaker 1: But frankly, my approach has been that the fact that
Speaker 1: we are all women is neither here nor there. But
Speaker 1: what we have done is we have put together what
Speaker 1: we believe is the most formidable spack platform with thirty
Speaker 1: or so executives across vehicles that have been on boards
Speaker 1: of companies such as Citygroup, Oracle, Comcast, and Johnson and
Speaker 1: Johnson American Airlines. We work black Rock and many more
Speaker 1: public and private companies. We've had founders of companies we
Speaker 1: had the co founder of Guilds, the co founder of Shift,
Speaker 1: the company that also went public through SPAC, A dozen
Speaker 1: of founders of companies whose names you would recognize. And
Speaker 1: we've had multiple vehicles. For example, we had a vertical
Speaker 1: consumer vehicle where we had the former US CEO of
Speaker 1: the Beers, former president of gi Venshi, former CEO of
Speaker 1: Stein Martz, former president of Old Navy, former CEO of
Speaker 1: Pepod grocery delivery company. They had a billion revenues, We
Speaker 1: had regulators. So these are all accomplished leaders that help
Speaker 1: our combination partners and who are on our boards and
Speaker 1: really create long term value and provide a full platform
Speaker 1: that the combination partners can leverage on. How hard has
Speaker 1: that been to persuade public market investors in SPACs, I mean,
Speaker 1: looked the spack market has been. First, you have to
Speaker 1: understand the specific market environment that created where we are,
Speaker 1: the environment where we are now, the proliferation of spects,
Speaker 1: and particularly three years ago, interest rates were low and
Speaker 1: investors were seeking yields, and we saw a number of
Speaker 1: spects that came to market. Yet many have liquidated in
Speaker 1: the last twelve months. One hundred and fifty eight spacts
Speaker 1: have liquidated, that's a lot. Now today we're facing again
Speaker 1: fear of inflation, rising interest rates, FED that had its
Speaker 1: credibility somewhat tarnished, and equity markets that really took a
Speaker 1: hit and particularly corrected were the risks on investments that
Speaker 1: investors are willing to take. So half of the SPAC
Speaker 1: deals that closed in twenty twenty twenty one had very
Speaker 1: little revenues or if no revenues for some, and they
Speaker 1: got crushed. And that's not unique to spects. If you
Speaker 1: look at IPOs same you know, IPOs and Spects that
Speaker 1: went public in twenty twenty and twenty twenty one are
Speaker 1: all down forty five percent. So that doesn't mean that
Speaker 1: we're bad companies, but the investment community he moved from
Speaker 1: risk on to risk off. So do you have to
Speaker 1: wait for the pendulum to swing back or how can
Speaker 1: you now look for new targets, new companies that you think,
Speaker 1: even in a more difficult macroeconomic environment, can thrive. Yeah,
Speaker 1: I mean, I think I think this is this is
Speaker 1: what we're going to continue to see in twenty twenty three,
Speaker 1: and we're going to continue to see a lot of liquidations.
Speaker 1: And because we still have this volume of SPACs, I
Speaker 1: think we're going to seem to continue to see a
Speaker 1: pickup in the pace of announce steals, and we're starting
Speaker 1: to see that right now in our own SPACs and
Speaker 1: for others because there's a backlog of companies that wants
Speaker 1: to access capital, and relative to private equity and venture capital,
Speaker 1: SPACs are providing really an opening of a window into
Speaker 1: what is the largest poll of investors in the world.
Speaker 1: So if you look at twenty twenty two, for example,
Speaker 1: there were under twenty IPOs, but two hundred SPACK deals,
Speaker 1: about one hundred that closed and about one hundred that
Speaker 1: we're announced, So it remains a way to go public.
Speaker 1: So I anticipate that this will continue fascinating around the
Speaker 1: world of special purpose acquisition companies as well. Freedheim, thank
Speaker 1: you for coming on discussing all the work of Athena
Speaker 1: and of course your background. Some news about predicting no
Speaker 1: more layoffs over at the parent of Facebook, but Meta
Speaker 1: is apparently planning another round of job cuts and we're
Speaker 1: shuffling thousands of employees. That's all according to reporting from
Speaker 1: the Washington Post. We might add Meta plans to push
Speaker 1: some leaders into lower level roles without direct reports, flattening
Speaker 1: the layers of management between Meta CEO Mark Zuckerberg and
Speaker 1: their companies. In terms, that's a Washington Post report. Meanwhile,
Speaker 1: staying with social media and turning to the stream courts
Speaker 1: hearings over Section two thirty, please to say we can
Speaker 1: dig in a little bit more to what's being heard
Speaker 1: in terms of Twitter today. Yesterday, of course, it was
Speaker 1: Google versus Gonzalez. We're joined now by a former tech
Speaker 1: executive who currently teaches privacy, data and CyberSecure over the
Speaker 1: UCLA School of Law. Welcome, Professor Alex Alban. Thank you
Speaker 1: very much indeed for joining us, Alex, and just remind
Speaker 1: us it's been day two that we've been hearing questions
Speaker 1: around really to Section two thirty, the protection it gives
Speaker 1: technology companies and in many ways against anti terrorism laws.
Speaker 1: In particular, the argument today was what that Twitter should
Speaker 1: have been taking down certain content to prevent what happened
Speaker 1: in Istanbul. That's correct. The argument in the court today
Speaker 1: was that Twitter was not vigorous enough in taking down content.
Speaker 1: And I kind of find that somewhat amusing because a
Speaker 1: lot of the criticism of Twitter and the other social
Speaker 1: media companies over the past year or so has been
Speaker 1: the base censor content that is available on those media platforms.
Speaker 1: So the fact that they are now being criticized for
Speaker 1: not being vigorous enough to me really points out how
Speaker 1: difficult this whole area of content moderation is on social media,
Speaker 1: and to that end, it's become politicized. Two broad brushstrokes
Speaker 1: here on the right. On the Republican side, there's an
Speaker 1: argument that they don't want conservative viewpoints taken down. On
Speaker 1: the Democrat side, it's more about that they shouldn't be
Speaker 1: putting leaving certain content up and should be putting it
Speaker 1: down quickly, harassment, hate speech, And they're like, how much
Speaker 1: has the Supreme Court been weighing in and should they be?
Speaker 1: They've been asking pretty good questions, And I would say,
Speaker 1: if you had to read Tea Leaves right now, I
Speaker 1: think the Court as a whole is skeptical that you
Speaker 1: can just rip out this layer of Internet recommendations and
Speaker 1: the world would function normally. When you think about it,
Speaker 1: if you took out the recommendations that are really based
Speaker 1: on the user's own preferences and the users own viewing habits,
Speaker 1: then what will we be left with? Just every time
Speaker 1: a user comes to a page they have to do
Speaker 1: in new search, and they don't know what kind of
Speaker 1: content will come up. Talk to us about Silicon Valley
Speaker 1: or social media company's largest response to this, many have argued,
Speaker 1: we need this protection obviously because there'd be a flood
Speaker 1: of legal issues that they'd face, but not just big companies,
Speaker 1: more ones too. You know. Section two thirty came about
Speaker 1: in nineteen ninety five ninety six, and it was in
Speaker 1: response to a case where a Prodigy you remember that
Speaker 1: far back was an online network and they were held
Speaker 1: liable for a defamatory post that was made on the
Speaker 1: Prodigy service. And it occurred to Congress at the time,
Speaker 1: and I think this was a correct decision that an
Speaker 1: Internet ISSP or a big web platform is really more
Speaker 1: like a newsstand or a bookstore. They're not publishing the content,
Speaker 1: they're making it available. Now, the really interesting aspect of
Speaker 1: this case is that YouTube has a recommendation algorithm, as
Speaker 1: many other services do, and so when you search for something,
Speaker 1: it's going to recommend videos and the string of videos.
Speaker 1: But those recommendations are not actually technically made by an
Speaker 1: editor at YouTube. They are based on what the user
Speaker 1: has looked at before, and then they're based on what
Speaker 1: the most popular videos have been on that subject. So
Speaker 1: I think it's really not an editorial function per se.
Speaker 1: But can't anything be done? We look to Europe, we
Speaker 1: see some of the rules that are going to come
Speaker 1: into place in twenty twenty four. Ultimately, is there something
Speaker 1: that the Supreme Court or d Congress could do to
Speaker 1: make searching less involved in hate speech? Well, what I
Speaker 1: think we could do is have more transparencies to how
Speaker 1: the algorithm actually works. That would be good, and then
Speaker 1: we could actually give users more control. Let's say you
Speaker 1: could have settings that said I want to hear more
Speaker 1: of the things that I like, or I want to
Speaker 1: hear more of the things that I don't like, or
Speaker 1: just give me a random news feed. Facebook actually does
Speaker 1: a version of this in the news feed, where you
Speaker 1: can highlight certain friends and de emphasize other friends. And
Speaker 1: I think the giving users control over the content that's
Speaker 1: recommended is the way to go. Great to speak with you,
Speaker 1: Professor Alex Elvin, of course of UCLA law that does
Speaker 1: it for this tradition. Thank you of Bloomberg Technology. Do
Speaker 1: not forget to check us out a podcast. You can
Speaker 1: go cross platform. Of course, we're on various of the
Speaker 1: social media platforms, but check us out on our podcast.
Speaker 1: We've got on Apple, on Spotify, on iHeart. There'll be
Speaker 1: plenty more. In terms of the digestion of the stock mark.
Speaker 1: It moves after hours too, from New York to Subloomberg