Speaker 1: From Marhart where Innovation of Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline hein And at Blouemog's world headquarters in New York, and.
Speaker 4: I met Ludlow in San Francisco. This is Bloomberg Technology
Speaker 4: coming up.
Speaker 5: A new bidder emerges for TikTok.
Speaker 3: We sit down with the Project Liberty founder Frank McCourt
Speaker 3: to discuss us.
Speaker 4: Will bring you the takeaways from Google's annual IO Developers Conference, an.
Speaker 3: Open a eyed chief scientist who played a key role
Speaker 3: in Sam Altman's Auster Pole's departing the company. We'll discuss
Speaker 3: that and so much more throughout the hour. At first,
Speaker 3: that's checking on these markets. There is a macro playbook happening,
Speaker 3: and it is a cooler CPI print being digestif by
Speaker 3: the market that sends stockston record highs, record highs on
Speaker 3: the NASAC, recordize on global stocks. More broadly, the SMP,
Speaker 3: the stock six one hundred over in Europe also getting
Speaker 3: a lift because people start.
Speaker 5: To factor in that. Maybe we'll we'll get those rate.
Speaker 3: Cups from from the rev Federal reserve tenure yield, therefore
Speaker 3: diving down seven basis points.
Speaker 5: Bond's rally yields full.
Speaker 3: Move on because the dollar is down, and what does
Speaker 3: that mean Crypto is higher? We're seeing a real risk
Speaker 3: on field to today's trade. We're up almost five percent
Speaker 3: on bitcoin, but ed, what are you looking at on
Speaker 3: the micro Okay?
Speaker 4: So Google alphabet shares higher for a second day. We
Speaker 4: will go later in the show to our reporter that
Speaker 4: was on the ground, new AI, back search, new iterations
Speaker 4: of the models. Clearly investors like something in there, so
Speaker 4: we'll unpack all the new technology. There's a few other
Speaker 4: things that I'm watching, some movies to the downside in
Speaker 4: the megacaps that are a drag on the Nazak one hundred,
Speaker 4: both Amazon and Tesla lower Amazon interesting because lower for
Speaker 4: a second day after the news that Adams Lipsky is
Speaker 4: leaving his AWS CEO and Matt Garman goes into the
Speaker 4: Ado s CEO c and in.
Speaker 6: Microsoft hier percentage one.
Speaker 4: I put it in there as a proxy for open AI,
Speaker 4: which we'll discuss later in the show. But it is
Speaker 4: higher Caroline by a percentage point, very big AI focus
Speaker 4: in a crowded field.
Speaker 5: Right now, it is crowded.
Speaker 3: And there also we're being crowded for newsflow right now,
Speaker 3: particularly when we think about this world of social media,
Speaker 3: the future ownership of social media, and a key player
Speaker 3: of course that needs to be divested or indeed be
Speaker 3: banned from the US.
Speaker 5: We want to discuss TikTok now.
Speaker 3: Welcome our Bloomberg TV and radio audiences worldwide to join
Speaker 3: the project. Liberty founder and m Court Global Executive chairman
Speaker 3: and billionaire Frank McCourt, who is building a consortium to
Speaker 3: bid for social media at TikTok's US business.
Speaker 5: Frank, welcome to the show.
Speaker 3: And how much money do you actually have to be
Speaker 3: offering to TikTok.
Speaker 7: Well, it's too early to know how much the TikTok
Speaker 7: is going to be sold for or if it's going
Speaker 7: to be sold. We happen to believe it will be
Speaker 7: sold and we're betting on that. We don't have the
Speaker 7: information yet though on what exactly they're selling or peak
Speaker 7: as the financial statements, so we can't really tell what
Speaker 7: the price will be. But one thing that's important, Caroline,
Speaker 7: is we're not interested in the algorithm, so we're interested
Speaker 7: in actually an alternative web where people own and control
Speaker 7: their data, own and control their identity. So we're not
Speaker 7: interested in byte algorithm, which I think makes our bid
Speaker 7: particularly unique.
Speaker 6: Frank we will discuss later on that.
Speaker 4: I think the technology plan that's important given that the
Speaker 4: algorithm is essentially put on an export ban list by China.
Speaker 4: But I'd be grateful in the first instance just to
Speaker 4: go through some of the mechanics here if that's okay.
Speaker 4: For example, have you spoken to TikTok or Bite Dance.
Speaker 4: Have you spoken to the US government about this bid?
Speaker 7: Yeah, we have not spoken to Byte Dance or TikTok.
Speaker 7: We have spoken to a number of other actors in
Speaker 7: this and have been encouraged to move forward with this approach.
Speaker 7: Remember this is this is putting forward an alternative vision
Speaker 7: for how the Internet operates right now, whether it's bytown,
Speaker 7: whether it's TikTok rather or our own US platforms. Our information,
Speaker 7: our data, our personhood actually is scraped from us aggregated
Speaker 7: by these big platforms and they apply algorithms to it.
Speaker 7: I think it's time pastime, really that we have an
Speaker 7: alternative version of the Internet where we each own and
Speaker 7: control our identity, owning control our data and we have
Speaker 7: all the benefits of the Internet and the wonderful technology
Speaker 7: that's there connecting all of us, but we're in charge
Speaker 7: of us, so agency has returned to individuals. That's the
Speaker 7: technology we've been building over the last almost five years.
Speaker 7: I greenlit this project in December of twenty nineteen, so
Speaker 7: the tech works. We actually have a proof of concept.
Speaker 7: There's almost a million users now on this new protocol,
Speaker 7: so now it's time to scale it up and give
Speaker 7: people a real choice.
Speaker 6: Frank, you mentioned other actors.
Speaker 4: I'm conscious that the sequoiir in general Atlanta take, for example,
Speaker 4: our US based firms that sit on the cat table
Speaker 4: of byte Dance.
Speaker 6: Do you have their support in your bid?
Speaker 7: It's too early for me to make these statements. We've
Speaker 7: retained Google Tyme Securities as our advisor, along with Kirklin
Speaker 7: and Ellis as an advisor to put together all the
Speaker 7: pieces of this bid. But let's be realistic. This is
Speaker 7: early in a process. It's still very noisy. We don't
Speaker 7: know exactly what byite Dance will be selling. They've filed
Speaker 7: a lawsuit reso lay, so they're fighting this, but I
Speaker 7: am confident at the end of the day, they'll either
Speaker 7: have to sell or shut it down, and we don't
Speaker 7: want to see TikTok shut down. There's one hundred and
Speaker 7: seventy million users enjoying TikTok. We want to see them
Speaker 7: continue to enjoy it. But again we're not interested in
Speaker 7: the algorithm, which I think makes our bid very, very unique.
Speaker 7: And we can migrate these users over to a new
Speaker 7: version of the Internet where the one hundred and seventy
Speaker 7: million users actually participate in the value they create and
Speaker 7: are in charge of their data. Imagine a version of
Speaker 7: TikTok where the version is clicking on the terms of
Speaker 7: use of each of the one hundred and seventy million users,
Speaker 7: rather than the one hundred and seventy million users clicking
Speaker 7: on the.
Speaker 8: Terms of use of one platform.
Speaker 7: I don't think this data should be in the control
Speaker 7: of any one person, one company, or a Chinese communist party.
Speaker 7: I think it's important that we shift our mindset now
Speaker 7: and shift the paradigm from the Internet we've been living with,
Speaker 7: which is doing real harms and it's undermining democracy, it's
Speaker 7: ripping society apart, and of course we're hearing more and
Speaker 7: more about the harms toed children. Let's build a better version.
Speaker 3: We are with Frank mccaun of course, a project and
Speaker 3: Liberty found I'm a Cork Global executive chairman and across
Speaker 3: radio and TV. We're discussing your potential bid for TikTok
Speaker 3: if indeed TikTok is to be sold, and that is
Speaker 3: a big if. But all of this sounds philanthropic. Want
Speaker 3: any money back if you're going to be raising billions
Speaker 3: millions of your own potentially on the line here, Yeah.
Speaker 7: Of course, I think it's interesting that it sounds philanthropical
Speaker 7: to you, because I do think it does have the
Speaker 7: potential of being one of the biggest impact projects of
Speaker 7: our lifetime. But this has to have commercial components to
Speaker 7: it to be realistic. I mean, this can't be some
Speaker 7: alternative internet that is, you know, better, better architected and
Speaker 7: healthier for people, but no.
Speaker 5: One uses advertising. How will you make money back? Is
Speaker 5: this subscription based all of the above?
Speaker 7: Let's think of it this way. Once you unleash the
Speaker 7: power and the innovation and the invention of a data
Speaker 7: sharing economy, we're going to see ideas and models that
Speaker 7: far exceed what we have today. Right now, all of
Speaker 7: this is tied up in just a few companies just
Speaker 7: a few platforms. Let's unleash the innovation of everyone and
Speaker 7: unleash and have the value sharing proposition be a bit different. So,
Speaker 7: of course there'll be commercial users limited only by our imagination,
Speaker 7: and maybe there'll be some advertising models. Maybe there'll be
Speaker 7: some saying subscription models, but it has to be highly commercial.
Speaker 4: Frank, sorry to interrupt you. There's a recurring question. I
Speaker 4: think Caroline would back me up that I've been very
Speaker 4: consistent in asking it, which is, there are one hundred
Speaker 4: and seventy million US users of TikTok, and most of
Speaker 4: them quite like using it as it is. Is there
Speaker 4: anything you can tell me about the product plan or
Speaker 4: your engagement with the existing user base that would convince
Speaker 4: that one hundred and seventy million that they'll want to
Speaker 4: continue using it whatever happens.
Speaker 8: Yeah, of course.
Speaker 7: This is the key to the transaction, is for them
Speaker 7: to be excited about migrating to this new model of
Speaker 7: the Internet, let's call it, where they own and control
Speaker 7: their data and where they participate in the value. So
Speaker 7: the user experience has to be every bit as easy,
Speaker 7: polished and fun as it is now. But we wouldn't
Speaker 7: users be excited about actually being in charge and actually
Speaker 7: participating in the value.
Speaker 6: And so this has to.
Speaker 7: Be seamless in terms of the user experience, but the
Speaker 7: underlying technology will be far far better the design of
Speaker 7: the technology putting them in charge of themselves. So of
Speaker 7: course it needs to be done in a way and
Speaker 7: where the users are are as excited or more excited
Speaker 7: about the new version. But remember right now there's a
Speaker 7: risk there will be shut down. So we don't want
Speaker 7: to see it shut down. We want to see the
Speaker 7: one hundred and seventy million users continue to be on
Speaker 7: a platform that our government is comfortable with and that
Speaker 7: that byitedance quite frankly, is comfortable in selling it.
Speaker 4: Frank we use wheres like consortium or even like coalition.
Speaker 4: There are a number of people people who have raised
Speaker 4: their hand about doing something with TikTok's US assets. Steve Minuchin,
Speaker 4: former Treasury secretary, and Eric Schmidt, one of the Google founders,
Speaker 4: kind of top of mind. Have you spoken to them
Speaker 4: and proposed, for example, that you will just get together,
Speaker 4: bring your intellectual capital together in one bid.
Speaker 7: No, I have not, and I do want to distinguish
Speaker 7: our bid from what at least I understand their bids
Speaker 7: to be about we don't need Saudi money to do
Speaker 7: this bid. Right, We're not talking about the same type
Speaker 7: of architecture where we just replace you know, Chinese ownership
Speaker 7: with another ownership and then we have a continue to
Speaker 7: have a centralized, autocratic, surveillance based technology where we're users,
Speaker 7: data is scraped and aggregated.
Speaker 8: And so forth.
Speaker 7: This is not Our version is not a top down approach.
Speaker 7: Our version is empower the users. Empower people and make
Speaker 7: this a people's bick. Make this something where individuals have
Speaker 7: agency and choice and power return to them. The harms
Speaker 7: that we're seeing with the Internet. And this is not
Speaker 7: limited to TikTok right. Our own platforms are built with
Speaker 7: the same model of scraping data and exploiting it. Isn't
Speaker 7: it time we have a better model? And I see
Speaker 7: this opportunity as a fantastic opportunity to take proven technology
Speaker 7: and scale it and give people a choice, an alternative.
Speaker 3: And frank, you've got people who are at the forefront
Speaker 3: of that argument about the harms of social media, height
Speaker 3: being one of them. With the anxious generation, it's all
Speaker 3: I see on social media at the moment. David Clark,
Speaker 3: so Tim Berners Lee who helped create the World Wide Web.
Speaker 5: However, this sounds like.
Speaker 3: You need crowdfunding Ultimately, how if you don't need Saudi money,
Speaker 3: what money will you need when you get a price point.
Speaker 7: I think there'll be a combination of private capital, public
Speaker 7: what i'll call it public capital, and people's capital, so.
Speaker 5: It will be crowdfunded.
Speaker 7: Well, crowdfunding has an implication, right, I don't think we're
Speaker 7: necessarily raising money on the Internet, so that's not.
Speaker 6: What we're talking about.
Speaker 7: But look, we've brought in Google tem securities to help
Speaker 7: organize how we raise money. This should be the investors here,
Speaker 7: should be abroad, should should really reflect the broad coalition
Speaker 7: we're trying to create here about reclaiming the Internet right
Speaker 7: and using this as an opportunity to do that. So
Speaker 7: I would imagine in addition to private capital, there would
Speaker 7: be pension funds, endowments, foundations, philanthropies that are interested in
Speaker 7: a return, but not only a return on their capital.
Speaker 7: They have a longer term horizon and they would like
Speaker 7: to see the Internet re architected so it's better for
Speaker 7: all of us. And it supports democracy, right, It supports
Speaker 7: civil society, It protects young children and The book I
Speaker 7: wrote recently called Our Biggest Fight gets into some detail
Speaker 7: on the harms that the current version of the Internet
Speaker 7: are doing to all of us. It's not limited to children,
Speaker 7: but especially children, and I think our number one obligation
Speaker 7: is to protect.
Speaker 3: Kitchen an impact thought leadership there from Frank mccork, Project
Speaker 3: Liberty founder and a Cork Global executive chairman, with thank
Speaker 3: him for his time and his views on the.
Speaker 9: Bid bleep blop, bleep blop rap peop blue people bop.
Speaker 9: Time to get up, you silly little nerds way out.
Speaker 4: That was DJ Ribia at the IO Developers Conference, testing
Speaker 4: out Google's DJ mode that Google recently added to his
Speaker 4: Generative AI Texts.
Speaker 6: To Music tool.
Speaker 4: Google also rolled out a new search engine that includes
Speaker 4: responses written by AI.
Speaker 6: Bloomberg's Judy of.
Speaker 4: Love was at the Google Developers Conference under the Big
Speaker 4: tent at that rave and joins us for more. Let's
Speaker 4: put the DJ performance to one side for now. The
Speaker 4: big news I think was AI powered search.
Speaker 10: That's absolutely right, and this is a real seed change
Speaker 10: in goodle search. For the past year, Doodle has been
Speaker 10: experimenting with generative AI overviews, but that wasn't a special
Speaker 10: test version of the product. Now they're rolling out generative
Speaker 10: AI overviews in mainstream search, so all users in the
Speaker 10: United States will begin seeing them this week.
Speaker 3: Julia Love, who was inhaling and all the hype man
Speaker 3: and all when it comes to Google Io, we thank
Speaker 3: you so much for joining us and setting us up
Speaker 3: into a conversation.
Speaker 5: Now from the investor.
Speaker 3: Perspective, Ioka, Yoshioka is with us Port Radio manager and
Speaker 3: Wealth Enhancement Group, and Ioka, what did you make of
Speaker 3: ultimately Google wanting to basically outshine what open ai I
Speaker 3: put out there yesterday?
Speaker 5: Did they manage to do that?
Speaker 3: Have they managed to convince us that they're not in
Speaker 3: some way behind in this race but actually leaving it?
Speaker 4: Sure?
Speaker 11: I think they did a great job this year showcasing
Speaker 11: their capabilities with artificial intelligence, and really, you know, all
Speaker 11: the different types of ways that they are redefining what
Speaker 11: search really is for all of us, whether it's the
Speaker 11: overview portion within the traditional part of search, or just
Speaker 11: being able to use your phone and the video screen
Speaker 11: in order to do a search music, and all the
Speaker 11: other ways that search is evolving, I think is what
Speaker 11: was on display yesterday.
Speaker 4: Okay, the stakes are pretty high right. You know, I
Speaker 4: was reflecting earlier in the show that the stock is
Speaker 4: up for a second day. But I think back to
Speaker 4: kind of some of the gaffs that the alphabets had
Speaker 4: as well in demoing it's generative are tools, and how
Speaker 4: that's impacted the stock. Do you think they've done enough
Speaker 4: to convince investors for the long term that that, yeah,
Speaker 4: we got this on a consumer facing or business facing AI.
Speaker 11: You know, I think the landscape is rapidly evolving, and
Speaker 11: so I think it's difficult to say whether or not
Speaker 11: this is whether Alphabet or Google is really in that
Speaker 11: poll position. At this point. With AI, it's clearly got
Speaker 11: a much bigger competitive landscape than what was traditional searches
Speaker 11: competitive landscape, and so we'll have to see how this
Speaker 11: evolves over the coming months and years.
Speaker 3: Many feeling on the street that they've regained the AI
Speaker 3: initiative here, many a consumer excited by how much better
Speaker 3: Gmail is going to become, for example, and many excited
Speaker 3: that maybe Google Glass is coming.
Speaker 5: For a reiteration and a modern day take.
Speaker 12: But I'm interested ultimately as to whether this actually adds
Speaker 12: to revenue, adds to future profitability for a business when
Speaker 12: they're undercutting on a price perspective significantly, open a eyes.
Speaker 11: Offering absolutely, and then you know, the cost of all
Speaker 11: of this AI integrating it into all the different programs
Speaker 11: that they will have, all the different offerings that they'll have,
Speaker 11: is still going to continue to increase, and we saw
Speaker 11: that with the most recent quarter and their increase in
Speaker 11: capital spending for A twenty twenty four. So we'll have
Speaker 11: to see how this really shapes up from a financial perspective,
Speaker 11: both on the top line side, from a revenue perspective,
Speaker 11: as well as just the overall impact to earnings.
Speaker 4: Kuren mentioned something really interesting, which is hardware's kind of
Speaker 4: back and Meta and the ray bands is coming up
Speaker 4: every week on the show. If you're an investor in
Speaker 4: a portfolio manager, do you sit your desk in the
Speaker 4: morning and go, you know what, I've got to get
Speaker 4: the research desk on this hardware thing.
Speaker 6: On the hardware use case of AI.
Speaker 11: I'm not sure if I'm cool enough to you know,
Speaker 11: you get all of the hardware, whether it's Google Glass
Speaker 11: or metas Arabians. But you know, I think everybody's looking
Speaker 11: for that next killer sort of technology, whether it's hardware
Speaker 11: or software, and you know, that's the portion that I
Speaker 11: think everybody's still looking for when it comes to generative AI.
Speaker 3: Also, I think many forget that there is a weight
Speaker 3: on Google's shoulders here. They cannot roll out products in
Speaker 3: quite the same fast pace as a more startup version
Speaker 3: of a generative AI bid is at the moment because
Speaker 3: they've got billions of users and.
Speaker 5: Already we've seen them rush.
Speaker 3: Many would say the image generation side of the equation
Speaker 3: and look at the well, the backlash they got for
Speaker 3: that with Gemini.
Speaker 5: How much are you.
Speaker 3: Frustrated though, by the fact that they're talking up a
Speaker 3: lot of things that then sort of leave for our
Speaker 3: imagination as and when they're going to be in our hands.
Speaker 11: You know, it is a level of frustration when it
Speaker 11: comes to the overall communication from Google. I think they
Speaker 11: are in a rush because they're in a position to
Speaker 11: sort of protect what they have and the pole position
Speaker 11: that they're in regarding search.
Speaker 5: So, you know, we'll.
Speaker 11: See if they've kind of been able to refine some
Speaker 11: of that going forward. I think the most recent Google
Speaker 11: Io yesterday really showed that they were at least able
Speaker 11: to refine it from last year, and so we'll see
Speaker 11: if that continues next year.
Speaker 4: Yako Yoshioka, portfolio manager at Welfare Enhancement Group, I think
Speaker 4: you are cool enough come back on the show.
Speaker 6: Bring you Meta ray bands with you. Thank you?
Speaker 4: All right, We'll watching shares of Sony as we had
Speaker 4: to break investor friendly policies coming out overnight, authorization of
Speaker 4: a buyback plan that's been universally around the world. Something
Speaker 4: investors have cheered stock at one point nine percent overnight.
Speaker 6: This is Bloomberg Technology.
Speaker 4: It's time for talking tech and first up, the Yemeni
Speaker 4: government says they're holding back repairs on a key internet
Speaker 4: cable that's been damaged in the Red Sea.
Speaker 6: This comes as the.
Speaker 4: Government conducts an investigation into the cable owner's alleged ties
Speaker 4: to Huthi militia. The cable operators, Telly Yemen, controlled much
Speaker 4: of the damaged cables that connect Europe to Southeast Asia.
Speaker 4: The Yemeni government has notified twenty Global Group members of
Speaker 4: the probe into Tell Yemen's supposed associations with that group.
Speaker 4: Plus Alphabet's YouTube has blocked videos of a Hong Kong
Speaker 4: protest song in the city, just days after a local
Speaker 4: court approved the injunction. Google's video Network said it will
Speaker 4: follow the court's ruling and block thirty two versions of
Speaker 4: the video titled Glory to Hong Kong. While existing laws
Speaker 4: already punish people for playing the song on charges of sedition,
Speaker 4: the Chinese government has sought to erase it from all platforms,
Speaker 4: and PC maker russree Pie says it's considering an IPO
Speaker 4: in London, in what would be the first sizable.
Speaker 6: Listing for the city since February.
Speaker 4: The company says it intends to publish a registration dock
Speaker 4: with the London Stock Exchange, but did not disclose how
Speaker 4: much it plans to raise CARROC.
Speaker 3: Meanwhile, let's just shift our attention towards well a key
Speaker 3: founder Andreill founder Palmer Lucky about how his AI and
Speaker 3: autonomous systems are actually changing on the battlefield. We've been
Speaker 3: speaking to him, not only here on the show just
Speaker 3: last week, but Bloomberg Original's host Emily Chang caught up
Speaker 3: with him to discuss his mission to tackle legacy defense
Speaker 3: contractors and the challenges of scaling a defense teching in Nicorn.
Speaker 5: Just take a listen.
Speaker 2: Right now. He Androl's very much in a high growth stage.
Speaker 2: We've done a lot of things that I'm very, very
Speaker 2: proud of but I'm very aware of the fact that
Speaker 2: we are not a profitable business. We are living on
Speaker 2: borrowed time, and so it's hard for me to come
Speaker 2: and feel like I've made it when I know that
Speaker 2: anyone can raise money from vcs, buy a really big
Speaker 2: office and feel a full of people. The question is
Speaker 2: are those people building the right things and will those
Speaker 2: things pay off?
Speaker 3: You can catch more of that conversation on the circuit
Speaker 3: with them any chang tonight six pm ET on Bloomberg
Speaker 3: Television or go stream it at eight pm.
Speaker 5: On Bloomberg Originals from New York.
Speaker 3: From San Francisco, It's the Bloomberg Technology.
Speaker 4: Welcome back to Bloomberg Technology. Ed love Low in San Francisco.
Speaker 5: And I Hied in New York.
Speaker 3: Let's get you a quick check on these markets, because
Speaker 3: we are at record highs votes and that is because
Speaker 3: the macro picture is one of inflation, somewhat calling the
Speaker 3: CPI print was what the market wanted to see and
Speaker 3: we're likely to see therefore record highs. The close for
Speaker 3: at the moment, then ask that one hundred the NASGAC
Speaker 3: and indeed the S and P five hundred global benchmarks
Speaker 3: at record highs two the sci Or World Country World
Speaker 3: Index up nine tenths.
Speaker 5: Of a percent and a new record.
Speaker 3: And I'm looking at bitcoin, all risk assets doing well
Speaker 3: in the idea that the Fed might actually cut this year,
Speaker 3: that being factored back in by the market, and we're
Speaker 3: up more than five percent on bitcoin as the dollar
Speaker 3: goes lower.
Speaker 5: And move on to some of the individual movers.
Speaker 3: Well, A key player that's helping the benchmarks from their
Speaker 3: key points perspective is in video. We're up more than
Speaker 3: three percent. Helps when you're worth more than two three
Speaker 3: trillion dollars. But it's also notable that we're actually gaking
Speaker 3: some thirty F filings this morning and a lot of
Speaker 3: more people actually upping their stakes in in video. Remember
Speaker 3: their earnings come out next week Monday. Dot Com you
Speaker 3: Sean and on this ed on the call. It's a
Speaker 3: small company, but it's a big move. So we used
Speaker 3: to highlight up more than twenty percent. This is about
Speaker 3: building APIs for work projects, in particular software that's doing well.
Speaker 3: It would seem from a demand perspective at the moment
Speaker 3: and Telecometalia.
Speaker 5: Maybe just maybe we're going to be bought.
Speaker 3: By KKR they're putting in their twenty two billion euro bid.
Speaker 3: They're trying to get the EU on board with this.
Speaker 3: This is all about sort of the phone network ultimate
Speaker 3: of Telecometalia. So at the close, we're up more than
Speaker 3: two percent over there in Europe for this particular player.
Speaker 5: But what are you looking at?
Speaker 4: Ed A big story that broke pretty late yesterday, and
Speaker 4: that is open ai chief scientist and co founder Ilia
Speaker 4: Sutskiva is leaving the artificial intelligence company, a departure that
Speaker 4: basically ends months of speculation in Silicon Valley about the
Speaker 4: future of who is a top AI researcher, someone that
Speaker 4: played a key role in the brief ouster of Sam
Speaker 4: Outman last year joining us More is Bloomberg, Serene Gafari Scherene. Okay,
Speaker 4: this is complicated because Ilia was at the center of
Speaker 4: that mad weekend that you and I worked for forty
Speaker 4: eight hours straight to work out what.
Speaker 6: Was going on.
Speaker 4: But he's one of the original founder's, former board member
Speaker 4: of open ai, and he's saying I'm leaving the company.
Speaker 4: I guess do we know why? Specifically he's leaving open ai.
Speaker 13: So he didn't say much about exactly why he's leaving.
Speaker 13: But you know, we know that basically since the brief
Speaker 13: ouster of Sam Maltman, Ilia Satskuber, who was once you know,
Speaker 13: a very.
Speaker 14: Common figure in the office, has not been.
Speaker 15: Seen as much.
Speaker 14: There is a lot of speculation, rumors about well, what's
Speaker 14: going to happen with Ilia?
Speaker 15: Is he going to leave the company?
Speaker 14: And so, you know, internally, I think it wasn't so
Speaker 14: much of a big surprise to many people that eventually
Speaker 14: Ilia would leave. Now what he's going to do next,
Speaker 14: he said, going to he has a new project and
Speaker 14: he'll share details in due time.
Speaker 15: So we're all waiting to see.
Speaker 3: Ultimately this comes down what was thought was a difference
Speaker 3: in opinion of the ultimate way you build generative artificial
Speaker 3: intelligence and artificial general intelligence for the good of humanity.
Speaker 3: Is that what's underlying here a philosophical philosophical difference, or
Speaker 3: ultimately that there's other things that need to be built
Speaker 3: at this moment of great exuberance around the technology.
Speaker 14: You know, I think it's really hard to say. What
Speaker 14: we do know is that Ilia Setskiv is someone who
Speaker 14: was working at these issues kind of at the intersection
Speaker 14: right of ethics and AI. He co led the super
Speaker 14: Alignment Team is what they call it there, which is
Speaker 14: all about how to make sure that AI is aligned
Speaker 14: with human values. So you know, of course, this is
Speaker 14: someone who's interested in the social implications of the technology
Speaker 14: that he's building. Now, whether ultimately his decision to leave
Speaker 14: is just because he'd rather do something else or because
Speaker 14: he may have some deeper conflicts that are unsettled with
Speaker 14: the company, I think is still very much a big question.
Speaker 3: And also others leaving in his wake will have more
Speaker 3: to report out throughout the day. I'm sure Blueberg's Sharan
Speaker 3: KAfari thank you for breaking it down on that key
Speaker 3: departure coming from open AI. Now, let's just stick with
Speaker 3: artificial intelligence and turn to the growing legal backlash against
Speaker 3: companies as they experience rapid growth. Now, also how you
Speaker 3: can harness generator AI in the legal sphere too. We
Speaker 3: can have both of these conversations at the same time
Speaker 3: with Gila Hyatt, CTO, co founder of Darrowner. It's an
Speaker 3: aipower legal intelligence platform back by y Combinator.
Speaker 5: Your platform is used by some of the top US
Speaker 5: law firms. It connects with a three thousand gators with
Speaker 5: new cases.
Speaker 3: Basically, you're facilitating over ten million dollars in litigation HeLa
Speaker 3: as if lawyers weren't busy enough, you're finding ways in
Speaker 3: which there can be well group lawsuits. Broad interesting at
Speaker 3: the moment that we've just seen one versus the US
Speaker 3: government on the behalf of TikTok happening great.
Speaker 1: First of all, it's great to be here, and I
Speaker 1: also want to say about justice intelligence in general. So
Speaker 1: the question regarding where their lawyers are busy enough. Our
Speaker 1: mission is to identify impactful cases that have a lot
Speaker 1: of both social and an legal impact around issues that
Speaker 1: are basically harming consumers, businesses, and employees. We're mostly focused
Speaker 1: around privacy issues, consumer protection, climate, environmental protection, which is
Speaker 1: super super important, and we're harnessing AI to do.
Speaker 15: So to identify socially impactful.
Speaker 6: Data. How does the AI technology work?
Speaker 1: Yeah, So we are in a very interesting intersection between
Speaker 1: looking at legal data and event data, which is pretty
Speaker 1: much anything that can happen on social media or events
Speaker 1: happening online. And the way we do so is we
Speaker 1: look at tremendous amounts of legal data, which are cases,
Speaker 1: case law, regulations, new laws are coming in and understanding
Speaker 1: what are the fact patterns that the case law is
Speaker 1: talking about.
Speaker 15: And how those events take action on everyday life.
Speaker 4: Is this underpinned by specific LLM or someone else's AI
Speaker 4: model or is it something you built yourself.
Speaker 1: Yeah, So the process is heavily infused in LMS, which
Speaker 1: is agnostic to what kind of LLMS that we're using,
Speaker 1: because it's a multi process. It's a multi step process
Speaker 1: which takes into consideration, ingesting the data, understanding what it is,
Speaker 1: and basically extracting the type of legal story or the
Speaker 1: legal phenomena that we're taking into action. So a lot
Speaker 1: of people assume that legalies is basically a different dialect
Speaker 1: of English, and they're correct to do so.
Speaker 15: And this is the kind of intersection that we're looking at.
Speaker 1: Where it's.
Speaker 4: Yeah, sorry, I mean to interrupt, Guila. I I suffered
Speaker 4: three three years of law school and legal went in
Speaker 4: one air and out the other.
Speaker 6: Please continue your answeert Yeah. Yeah.
Speaker 1: And and as a non lawyer myself, just as a
Speaker 1: tech person, I am fascinated by by what kind of
Speaker 1: how can we align this type of language and make
Speaker 1: it usable for for consumers and for the people where
Speaker 1: often most of the legal violations that happened to them,
Speaker 1: they can happen pretty much in every kind of type
Speaker 1: of service or or or product or business that you're
Speaker 1: interacting with, And there is a constant fight over our attention.
Speaker 15: Yeah, and this is and and this is what we're
Speaker 15: trying and trying to.
Speaker 1: Build where we were consumers don't have to be worried
Speaker 1: about their rights being vito later or even the quality
Speaker 1: of air around them is deteriorating because there's not enough
Speaker 1: focus and not enough there's not enough power to the
Speaker 1: consumer to understand.
Speaker 15: And to ingest that amount of data.
Speaker 1: And on the other side, lawyers, the lawyers are only
Speaker 1: now starting to develop the intelligence gathering skills that are
Speaker 1: required in order trying to stand the full picture supported
Speaker 1: by facts and generally create more impactful cases.
Speaker 3: Yes, we've already heard some of the issues of hallucination
Speaker 3: when it comes to looking back at previous contracts, previous
Speaker 3: cases via the use of generative AI and sometimes and
Speaker 3: making them up. But Gila, I'm also interested that I
Speaker 3: can't imagine there's too many lawyers out there, too many
Speaker 3: companies out there upset that their contracts are.
Speaker 5: Being used as training data.
Speaker 3: There's an awful lot of artists out there right now,
Speaker 3: an awful lot of creatives out there right now who
Speaker 3: worried about their own creations being used in large language models.
Speaker 3: How much you're seeing that as an area you're waiting into.
Speaker 1: So I think the discourse around AI and the concept
Speaker 1: of originality and the owners of the content is a
Speaker 1: hot topic and we should discuss it from multiple angles
Speaker 1: in a way that we want to keep encouraging originality
Speaker 1: and humanity and content creation around that so people will
Speaker 1: keep innovating rather than just replicating replicating content.
Speaker 15: That is doesn't have much impact.
Speaker 1: I think that also from from the legal perspective, a
Speaker 1: lot of high margin task work, just like contracts, will
Speaker 1: be scarce and the focus will have to shift to
Speaker 1: different kinds of tasks that require the core human impact
Speaker 1: and the core human.
Speaker 15: Seed that is required to create such a task.
Speaker 1: So I think in the next in upcoming years, we're
Speaker 1: going to see maybe different ways to compensate content creators
Speaker 1: and having a more more clear and transparent way of
Speaker 1: how this data is going to be used in terms
Speaker 1: of hallucination. How we solved it at Darrow is that
Speaker 1: first of all, we are validating we're being the content
Speaker 1: that we're creating, because we are very, very focused on
Speaker 1: creating a trustworthy insight based on our sources, and also
Speaker 1: we are also providing the sources for our clients to
Speaker 1: understand how we got to this decision. So we're not
Speaker 1: talking for place decision ranking at its core rather than
Speaker 1: empower empower our client to understand how we got to
Speaker 1: this conclusion.
Speaker 4: Heila Hiatt, CEO and co founder Darrow and Darrow named
Speaker 4: after Clarence Darrow, the nineteenth century lawyer from the Midwest
Speaker 4: who represented trade unions in all those whole profile cases.
Speaker 6: Thank you so much.
Speaker 4: Now coming up, we're going to be joined by the
Speaker 4: CEO of Chime talking a little bit about fintech and
Speaker 4: discuss the company's new offering.
Speaker 6: More details than that next carot.
Speaker 3: Yeah. Meanwhile, I just want to shine a light on
Speaker 3: some Lucashaw reporting ed because Netflix apparently going after some
Speaker 3: key NFL game around the Christmas time.
Speaker 5: Once again there's foray into live events. This time live
Speaker 5: sports is an interesting take.
Speaker 3: We're just down five ten percent interestingly on Netflix on
Speaker 3: the day, but they're likely to air two NFL games
Speaker 3: this Christmas Day and its largest push into live events.
Speaker 16: That's something of their technology.
Speaker 4: Chime the fintech, known for its fee free banking services,
Speaker 4: is now offering consumers the option of accessing as much
Speaker 4: as five hundred dollars of their paycheck before they arrive.
Speaker 4: Let's get more on this with Chime CEO Chris Britt,
Speaker 4: who joins me here in San Francisco. So it's interesting
Speaker 4: because you're offering the option to do this for free
Speaker 4: or if you want it instantly, two dollars, and you'd
Speaker 4: imagine that those that take up the offer would veer
Speaker 4: to the free side.
Speaker 6: Maybe not. What's in it for you, guys?
Speaker 17: Well, Chime is all about helping everyday people unlock financial progress.
Speaker 8: We do that with a fee free checking.
Speaker 17: Account and a host of services that help people with
Speaker 17: short term liquidity and credit building. And what's in it
Speaker 17: for us with this new service called my pay is
Speaker 17: that consumers would sign up for Chime get direct deposit
Speaker 17: and then, you know, if you think about the way
Speaker 17: payroll works in America, most people will get paid every
Speaker 17: two weeks, and so with this service, now any point
Speaker 17: along that journey towards your next paycheck, you can access
Speaker 17: a portion of your paycheck up to five hundred dollars.
Speaker 17: So what's in it for us is that we really
Speaker 17: want to get people to sign up and use Chime
Speaker 17: as their primary bank account. This is just another reason
Speaker 17: why people would.
Speaker 4: Bring them into a broader sort of ecosystem. Things are
Speaker 4: difficult right now to read on the consumer. So if
Speaker 4: you think about those that might be inclined to take
Speaker 4: advantage of my pay they may also be under financial duress. Right,
Speaker 4: So is there a technology in place that you guys
Speaker 4: use for risk as esment for example, if somebody's eligible
Speaker 4: to do.
Speaker 17: This, oh for sure, and I couldn't agree more. You know,
Speaker 17: it's something like sixty percent of Americans live paycheck to paycheck,
Speaker 17: so that doesn't mean everyone's under financial duress. But usually
Speaker 17: around the next time that your paycheck is coming to
Speaker 17: your account, you probably have a low balance situation. That's
Speaker 17: where banks oftentimes take advantage of consumers.
Speaker 8: So for us, giving people access to.
Speaker 17: Their payroll at an earlier clip is just a huge
Speaker 17: unlock for them and is extremely helpful with them getting,
Speaker 17: you know, getting through the next paycheck.
Speaker 3: It's a new area of banking services that has been
Speaker 3: popular elsewhere. Chris And has sort of fallen into a
Speaker 3: legal gray area from a consumer protection perspective. How are
Speaker 3: you working with consumer rights screups, how are you working
Speaker 3: with government to.
Speaker 5: Ensure that you are above board at all times?
Speaker 8: That's a great point.
Speaker 17: Actually, this this whole category, it's referred to as Earned
Speaker 17: Wage access or EWA.
Speaker 8: It's an emerging area.
Speaker 17: There's a number of companies that have popped up, and
Speaker 17: the regulation in the area is still still sort of
Speaker 17: a work in progress. So we are sort of monitoring
Speaker 17: that closely. We are in regular contact with regulators. But
Speaker 17: we've actually launched this product not as an EWA product,
Speaker 17: but actually as a credit product, and we've done it
Speaker 17: in coordination with our bank partners. So the legal construct
Speaker 17: for a credit product is fully articulated, and we've been
Speaker 17: able to design a product that complies with all the
Speaker 17: rules and regulations the same way that we do with
Speaker 17: all of our products at Chime.
Speaker 3: Something else that is still work in progress is potentially
Speaker 3: you becoming a public company.
Speaker 15: Now.
Speaker 3: You said back into some of the company was is
Speaker 3: IPO ready as it can be? And you're assessing how
Speaker 3: the markets look for the first half of twenty twenty four,
Speaker 3: So Chris, how do they look?
Speaker 5: Are you coming soon?
Speaker 17: The I think the market's actually looked pretty good, and
Speaker 17: the business looks pretty good.
Speaker 9: You know.
Speaker 17: We ended Q four of last year is the number
Speaker 17: one most downloaded banking app in America. We have over
Speaker 17: million monthly transacting actives in the account and using our
Speaker 17: Chime accounts, and the majority of our members are using
Speaker 17: us as a primary direct deposit and every day spending cards.
Speaker 17: So the business is performing extremely well. We actually had
Speaker 17: a profitable Q one. We don't have IPO plans to
Speaker 17: announce in this meeting today, but I would say that
Speaker 17: an IPO is not too far out on the horizon,
Speaker 17: probably not twenty four, but definitely something that we're thinking
Speaker 17: a lot about.
Speaker 6: So Chime's been really interesting to me.
Speaker 4: Some of your team know that they're here with us,
Speaker 4: but you had this twenty five billion dollar valuation in
Speaker 4: twenty twenty one, and the valuations come down. That's not
Speaker 4: unique for your story. Are you kind of happy about that?
Speaker 4: We've seen down rounds or low evaluations set you up
Speaker 4: quite well for whatever future you decide well.
Speaker 17: Valuations are always a moment in time, right, and they
Speaker 17: always fluctuate to some extent. We haven't done a new
Speaker 17: financing since twenty twenty one, so it's clear, you know.
Speaker 6: What the market reported valuation to be fat right.
Speaker 8: You know, we don't think too much about that.
Speaker 17: We're sort of heads down, just focused on executing and
Speaker 17: not thinking too much about a specific valuation. But I
Speaker 17: do think that the overall reset in the fintech category
Speaker 17: has been a great opportunity for us.
Speaker 8: Well, some companies are trying to.
Speaker 17: You know, figure out where they might land or you know,
Speaker 17: merger opportunities or needing to raise money.
Speaker 8: We're extremely well capitalized.
Speaker 17: We have close to a billion dollars of cash on
Speaker 17: the balance sheet, so we've been able to work not
Speaker 17: over but close to a billion dollars of cash.
Speaker 8: So we've been able to stay.
Speaker 17: Aggressive and grow market share in a period of you know,
Speaker 17: disruption for the category, and I think that's been good
Speaker 17: for us as a market leader.
Speaker 4: Chime see, Chris Breys. Just great to have you back
Speaker 4: in the studio here in San Francisco. I really appreciate it.
Speaker 3: Talk art for a moment because Christy has just managed
Speaker 3: to pull off a one hundred and fifteen million dollar
Speaker 3: sale despite a cyber attack. It's an apparent hack that
Speaker 3: actually hobbled the company's website in the days leading up
Speaker 3: to the all important May sales, and Christy's website is
Speaker 3: actually still redirecting to a temporary site as a sale began,
Speaker 3: and prompting questions around whether or not this New York
Speaker 3: auction could would happen at all, But around the company's
Speaker 3: handling the private client confidential information, there were some concerns.
Speaker 5: Now, a spokesperson told Bloomberg.
Speaker 3: That Christie's continues to work with an additional team of
Speaker 3: technology experts.
Speaker 5: We're determining the scope and the impact of this incident.
Speaker 4: Ed okay, and who better to talk about cybersecurity than
Speaker 4: Steve Stone, head of Rubrics zero Labs, which recently put
Speaker 4: out its latest report called the State of Data Security
Speaker 4: Measuring Your Data Risks. And I take this very seriously, Steve,
Speaker 4: because so many CSOs, CISOs CIOs watched this program, and
Speaker 4: the conclusion of the report of those you surveyed is
Speaker 4: that almost all of them are suffering direct emotional psychological
Speaker 4: in from cyber attacks.
Speaker 6: I found that to be astonishing.
Speaker 9: Yeah.
Speaker 18: Well, first, thank you for having me. I'm really excited
Speaker 18: to be here and excited to engage their audience. And
Speaker 18: I think the emotional impact was one of the things
Speaker 18: that really jumped out at us, and I think it
Speaker 18: makes sense.
Speaker 6: What are we talking about here, emotional impacts. So I
Speaker 6: think there's a few things.
Speaker 18: I think the first is the vast majority of more
Speaker 18: than sixteen hundred senior leaders both in IT and security
Speaker 18: we engaged with, you know, more than ninety percent of
Speaker 18: them reported having an emotional or psychological impact that ranged
Speaker 18: from losing sleep, fear over losing their job, or fear
Speaker 18: of their teams losing trust in them. And so we
Speaker 18: see that consistently year over year, and I think it
Speaker 18: really speaks to how this affects us as individuals and
Speaker 18: not just as businesses.
Speaker 3: Let's talk about how it affects businesses, to though, Steve,
Speaker 3: and how these cso CIOs are trying to get a
Speaker 3: little bit of bed, better sleep by putting precautions in place.
Speaker 6: So I think that's the great question. That's the endpoint.
Speaker 18: We can talk about the problems all day long, but
Speaker 18: the real goal is reducing risk. And as we did
Speaker 18: this research, a few things jumped out at us that
Speaker 18: really impact that risk reduction and change that dynamic. First,
Speaker 18: organizations have to be prepared for a contested recovery. You
Speaker 18: see it in the news all the time. We've seen
Speaker 18: it for years, really consistent touch point. You've got to
Speaker 18: recover your data. You have to be resilient, and the
Speaker 18: attackers know that and they'll do their best to stop it.
Speaker 18: And the second part is when we look at this
Speaker 18: from a data perspective, you have to involve a high
Speaker 18: number of teams. This is not a seesoll problem, this
Speaker 18: is not a CIO problem.
Speaker 6: This is everyone's problem.
Speaker 4: State very quickly, we're to stand the show there must
Speaker 4: be a growing threat. Therefore what are they facing from
Speaker 4: the other side of the table.
Speaker 18: I think the growing threat comes down to we're creating
Speaker 18: a risk surface area that we're not paying attention to,
Speaker 18: and that comes down to sensitive data.
Speaker 6: So if we look at healthcare, healthcare is in the news.
Speaker 18: There's not a unique threat to healthcare, but we see
Speaker 18: outsized impacts of ransomwa against healthcare. Four hundred percent more
Speaker 18: sensitive data is impacted in a healthcare intrusion than in
Speaker 18: other industries. And that's not because it's different. It's not
Speaker 18: because the threats are novel. It comes down to sensitive data.
Speaker 18: And so when we look at how we change this,
Speaker 18: we've got to start with where those impacts actually are.
Speaker 3: Very briefly, Steve, is it many the US where you're
Speaker 3: seeing the anxiety?
Speaker 5: Is this global phenomenon.
Speaker 6: We're seeing it globally.
Speaker 18: There are really consistent trends across all regions, all industries
Speaker 18: from a threat perspective, where we see the changes in
Speaker 18: impacts really come down to industry unique aspects.
Speaker 3: Steve Stone taking us through the industries implicated, the individuals implicated.
Speaker 5: We thank you so much for some of.
Speaker 3: The tactics to deploy Steve Stone's head of Rubric Zero
Speaker 3: Labs on.
Speaker 5: All things cyber.
Speaker 3: Meanwhile, that's all things done on this addition of Blue
Speaker 3: med technology.
Speaker 7: ED.
Speaker 6: I know I should be paying attention.
Speaker 4: I am, but during that conversation a load of CIOs
Speaker 4: and CSO has added me on LinkedIn, so we know
Speaker 4: they're watching. And if you have any reaction to Seeve,
Speaker 4: get in touch with us or recap the conversation in
Speaker 4: the show ED with your social I don't get distracted.
Speaker 6: This is on the ground reporting.
Speaker 4: Check out the podcast recap that conversation with Steve and
Speaker 4: all the others, particularly with Frank McCourt Jr. And his
Speaker 4: new bid for TikTok's US assets. You know where to
Speaker 4: find the pod. So many of you listening to us
Speaker 4: on your way to work, on your way home, and
Speaker 4: your lunch break, all around the world, and we really
Speaker 4: appreciate it. From SF and New York City, this is
Speaker 4: Bloombo technology