WEBVTT - OpenAI Debacle and Nvidia Earnings 0:00:00.200 --> 0:00:01.040 From Mahart. 0:00:01.040 --> 0:00:05.440 We're Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:05.800 --> 0:00:09.840 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:23.440 --> 0:00:26.440 I'm Caroline Heiner Bloomberg's World headquarters in New York, and 0:00:26.440 --> 0:00:28.120 I'm Ed Ludlow in San Francisco. 0:00:28.200 --> 0:00:30.240 This is Bloomberg Technology coming up. 0:00:30.320 --> 0:00:33.320 Of course, full coverage of Open Ai ahead, as investors 0:00:33.360 --> 0:00:37.040 seek to reinstate Oltman as CEO while the company tries 0:00:37.040 --> 0:00:38.680 to prevent an employee exodus. 0:00:38.680 --> 0:00:42.240 More ahead, and we'll preview what to expect from chip 0:00:42.320 --> 0:00:46.040 giant Nvidia, with AI accelerators expected to drive a sales 0:00:46.080 --> 0:00:48.360 surge for the company. We have all the details. 0:00:48.440 --> 0:00:51.680 Plus Elomsqu's x IT sues Media Matters in a lawsuit 0:00:51.680 --> 0:00:55.080 of maliciously trying to drive away advertisers from the social 0:00:55.120 --> 0:00:58.160 media platform. I want to discuss that and so much 0:00:58.200 --> 0:01:01.080 more throughout this hour. Let's get right to it. The situation. 0:01:01.240 --> 0:01:04.200 It just continues to unfold, and it's chaotic, certainly has 0:01:04.240 --> 0:01:06.399 been for the last few days of boardroom coup investors 0:01:06.480 --> 0:01:10.240 pushing for Altman's return, Microsoft hiring Alman and to lead 0:01:10.280 --> 0:01:12.800 a new AI research team, and in a show supporting 0:01:12.800 --> 0:01:15.839 nearly all of open AI's employees, threatening to quit enjoying 0:01:15.880 --> 0:01:19.800 Microsoft unless Altman is reinstated and the board resigns look. 0:01:19.800 --> 0:01:22.560 An open Ai memo viewed by Bloomberg says that the 0:01:22.560 --> 0:01:26.720 company is in quote intense discussions to unify once again. 0:01:27.160 --> 0:01:30.199 Look whatever the outcome ends up being, Microsoft CEO Saturn 0:01:30.240 --> 0:01:33.959 Nadella emphasized the company fully backs Sam Alman and former 0:01:34.000 --> 0:01:36.759 open ai chair Greg Bockman. Just take a listen. 0:01:37.600 --> 0:01:40.280 We are leading in this next generation of AI technology. 0:01:40.959 --> 0:01:43.200 We continue to be committed to open ai, and we 0:01:43.240 --> 0:01:46.000 continue to be committed to Sam and Greg and the 0:01:46.080 --> 0:01:48.160 team irrespect your where they. 0:01:48.000 --> 0:01:50.920 Are joining us now to break it all down, Bloomberg's 0:01:50.960 --> 0:01:54.680 Sharon Gafari and Sharon, you had up to the moment 0:01:54.720 --> 0:01:57.880 reporting on what's happening internally at those left at open ai, 0:01:58.000 --> 0:02:00.560 and really it feels as though we could even see 0:02:00.560 --> 0:02:02.760 a reinstatement or reunification. 0:02:05.320 --> 0:02:05.840 That's right. 0:02:05.960 --> 0:02:07.520 So there is still hope. 0:02:08.800 --> 0:02:11.480 With buyo employees and management at the company that they 0:02:11.520 --> 0:02:14.560 will be able to reach some kind of agreement with management. 0:02:14.840 --> 0:02:18.480 But at around eight thirty last night, management sense a 0:02:18.680 --> 0:02:22.000 memo to staff saying that you know they're going to 0:02:22.040 --> 0:02:25.520 call it a night and in the morning, you today Tuesday, 0:02:25.880 --> 0:02:28.040 when people have a little more sleep, they'll pick back 0:02:28.120 --> 0:02:29.120 up for sure and. 0:02:29.120 --> 0:02:30.840 Grab aable supper water, because I know it was a 0:02:30.919 --> 0:02:33.200 late night for you just as much as it was 0:02:33.240 --> 0:02:37.799 for me. This memos come from Anna MacAndrew, who's basically 0:02:37.880 --> 0:02:41.000 this was, as I understood it, the global affairs chief. 0:02:41.400 --> 0:02:43.480 I think what the audience doesn't have a sense of 0:02:43.960 --> 0:02:46.440 is who is inside open AI actually doing any of 0:02:46.440 --> 0:02:49.600 this negotiating, at least on the open AI side. 0:02:50.320 --> 0:02:52.160 Yeah, so there's kind of a you know, a core 0:02:52.320 --> 0:02:56.040 management team. It's it's kind of like almost you know, 0:02:56.160 --> 0:02:59.520 government in exile, you could call it, right, It's sort 0:02:59.520 --> 0:03:02.760 of a group of people who are trying to act 0:03:02.760 --> 0:03:05.640 as a bridge right between this new board and the 0:03:05.720 --> 0:03:08.600 old guard, and of course their goal is to try 0:03:08.639 --> 0:03:11.600 to get Sam Altman, Greg Brockman, the old leaders of 0:03:11.600 --> 0:03:12.880 open AI back in place. 0:03:13.600 --> 0:03:16.399 There's a difference between the reporting that we've done, which 0:03:16.440 --> 0:03:19.080 is basically Satya Nadela is behind the scenes being the 0:03:19.120 --> 0:03:22.760 peace broker bringing the investors to the table. The board 0:03:22.840 --> 0:03:25.120 wasn't talking for a while, are they now talking? And 0:03:25.120 --> 0:03:27.080 then there's what he said on camera, which is we 0:03:27.200 --> 0:03:30.400 back Sam either way. Do we have a real sense 0:03:30.440 --> 0:03:32.680 of what Sam's position is in all of this. 0:03:34.680 --> 0:03:38.040 I mean, look, we know that Sam has said he's 0:03:38.120 --> 0:03:41.440 going to go to Microsoft right with his old colleague 0:03:41.440 --> 0:03:46.600 Greg Brockman and start an AI leader AI department there. However, 0:03:47.280 --> 0:03:48.840 at the end of the day, we also know that 0:03:48.880 --> 0:03:52.520 Sam's goal is ultimately you know, Opening is a company 0:03:52.520 --> 0:03:55.200 that he built, right, So if he's being offered an 0:03:55.240 --> 0:03:57.680 executive position to go lead again back there, it's hard 0:03:57.680 --> 0:03:59.720 to imagine him not taking that. And that's definitely what 0:03:59.840 --> 0:04:02.360 inmployees rallying for him right now. 0:04:02.360 --> 0:04:03.520 We're pushing for all. 0:04:03.480 --> 0:04:06.320 Right, bloom Mosteringforry, late night for you, late night for 0:04:06.360 --> 0:04:08.480 the team. Once again, Let's keep a conversation going on 0:04:08.560 --> 0:04:11.360 the story though, and we're excited to say. Josh Wolfe, 0:04:11.400 --> 0:04:15.040 co founder and managing partner of Lux Capital, joins us 0:04:15.080 --> 0:04:18.240 on the program. Josh, just as a scene setter, you 0:04:18.279 --> 0:04:21.880 are not an investor in open Ai, as I understand it, 0:04:22.120 --> 0:04:25.160 there's this tender that was due to happen in the background. 0:04:25.520 --> 0:04:28.680 Start by asking you would you invest in open ai 0:04:28.880 --> 0:04:31.960 right now if you could through a tender mechanism or otherwise. 0:04:33.320 --> 0:04:36.040 Right now, I would not just because of the instability. 0:04:36.360 --> 0:04:38.360 You could see that as an opportunity. I will say, 0:04:38.360 --> 0:04:40.440 I actually think that they should, once they get this 0:04:40.520 --> 0:04:43.360 as sorted out, immediately file to go public. I think 0:04:43.400 --> 0:04:46.360 that the demand and the outpouring and interest that you've 0:04:46.360 --> 0:04:49.960 seen and the support for SAM is just absolutely unprecedent 0:04:50.000 --> 0:04:52.040 in the tech company. It's almost like an unintended pre 0:04:52.200 --> 0:04:56.120 IPO roadshow to shill the overwhelming demand. So while we're 0:04:56.160 --> 0:04:59.479 not an investor in Opening Eye, I do think that 0:04:59.760 --> 0:05:01.960 if them and I was the ultimate board, which I 0:05:02.000 --> 0:05:04.440 think has to be a restructured, real governance board, I 0:05:04.440 --> 0:05:05.360 would file for IPO. 0:05:05.920 --> 0:05:09.640 I'm digging in there, Josh, because that is a contrarian view. 0:05:09.960 --> 0:05:14.560 When ultimately it looks like the entire company is destroying itself. 0:05:15.200 --> 0:05:18.320 What would the governance have to look like if a 0:05:18.360 --> 0:05:19.919 company was to go public. 0:05:21.000 --> 0:05:22.720 I think it's the kind of traditional governance that you 0:05:22.760 --> 0:05:24.479 want to see. You want to have checks and balances. 0:05:24.760 --> 0:05:27.680 There's a big difference between giving founders control, which has 0:05:27.880 --> 0:05:30.159 actually worked we know in tech from Google and Meta 0:05:30.160 --> 0:05:32.920 and many others, and then just having basic governance checks 0:05:32.920 --> 0:05:35.600 and balances that you can avoid these sort of capricious 0:05:35.640 --> 0:05:38.120 whims of just a handful of individuals around a table. 0:05:38.839 --> 0:05:41.200 You want the judgment to avoid, As you said, this 0:05:41.560 --> 0:05:44.840 sort of making devastating mistakes that can be very hard 0:05:44.880 --> 0:05:47.200 to recover from. And the really important thing here we're 0:05:47.240 --> 0:05:50.159 seeing is this wasn't because of absence of GPUs, This 0:05:50.240 --> 0:05:53.280 wasn't because of absence of compute, This wasn't because of algorithms. 0:05:53.600 --> 0:05:55.240 You know, the great irony is people are so worried 0:05:55.240 --> 0:05:57.680 about AI destroying all this stuff. It was human nature. 0:05:58.040 --> 0:06:00.400 It was a bunch of people in a room and 0:06:00.440 --> 0:06:03.880 the emotions that drove the sort of whimsical and capricious 0:06:03.880 --> 0:06:07.240 decision to say we're going to oust this beloved leader 0:06:07.279 --> 0:06:07.640 in tech. 0:06:09.279 --> 0:06:12.760 We just showed a graphic with some of your portfolio companies. 0:06:12.839 --> 0:06:17.640 You guys are investing in AI, either AI native IAI 0:06:17.680 --> 0:06:21.600 adjacent companies. What does this do for the competitive landscape? 0:06:21.680 --> 0:06:25.160 Right there are dozens of companies building large language models. 0:06:25.160 --> 0:06:28.640 We all recognize that open AI was the sort of 0:06:28.640 --> 0:06:33.400 technological leader and in some sense the commercial leader. What 0:06:33.440 --> 0:06:36.160 opportunity does this present to those you're backing. 0:06:36.920 --> 0:06:38.920 Well, start generally and just remember that the one thing 0:06:38.920 --> 0:06:41.200 that open ai had was this pole position, and I 0:06:41.279 --> 0:06:43.720 believe that they can recover it. But they had predictability, 0:06:43.720 --> 0:06:45.760 they had stability, they had reliability, and all of that 0:06:45.760 --> 0:06:48.760 gives confidence, and confidence gives trust, and trust is the 0:06:48.839 --> 0:06:50.880 ultimate currency. The reason that I watch Bloomberg, the reason 0:06:50.880 --> 0:06:53.080 that people watch you every day is because they trust you. 0:06:53.279 --> 0:06:55.640 People partner with a company because they trusted and this 0:06:55.680 --> 0:06:58.880 weekend trust blew up. So it could take ten years 0:06:58.880 --> 0:07:01.599 to build a reputation, ten to build trust, and ten 0:07:01.680 --> 0:07:03.840 seconds to lose it. So a week prior, you had 0:07:03.880 --> 0:07:06.000 all of these startups that basically with the open Aide 0:07:06.400 --> 0:07:09.000 demo day thought all right, they just killed our latest 0:07:09.000 --> 0:07:11.440 product or our latest feature. Now they have a second chance. 0:07:11.480 --> 0:07:14.480 Because any company that's working with a hospital system, or 0:07:14.520 --> 0:07:17.920 a government group or a major corporation, all those entities, 0:07:17.920 --> 0:07:19.720 all those customers want to know that they're working with 0:07:19.760 --> 0:07:22.840 someone who is reliable and predictable and stable. Now you 0:07:22.840 --> 0:07:24.640 look at some of our companies hugging face on the 0:07:24.680 --> 0:07:27.080 open source. We are huge believers in open source. We 0:07:27.120 --> 0:07:30.480 think that this is probably like exhibit A of why 0:07:30.520 --> 0:07:33.920 you want open source systems as opposed to closed siloed 0:07:33.920 --> 0:07:36.640 concentrated systems. If you care truly about humanity, if you 0:07:36.680 --> 0:07:41.920 care about AI really getting out into the far reaches 0:07:41.960 --> 0:07:44.560 of the industry, you want open systems. So, whether it's 0:07:44.640 --> 0:07:48.560 hugging face together, doing distributed compute Mosaic mL, which we 0:07:48.600 --> 0:07:52.520 sold to Data Bricks, Runway mL, they're all the fastest 0:07:52.560 --> 0:07:55.720 growing and well positioned companies in these spaces because they 0:07:55.760 --> 0:07:58.760 are very heavily geared towards open. 0:07:58.520 --> 0:08:04.640 Source, marked to being safe, and to ultimately ensuring that 0:08:04.720 --> 0:08:07.960 in some way that aligns if not. In open AI's case, 0:08:08.320 --> 0:08:11.840 came first above profitability, and I'm interested in that tension 0:08:11.880 --> 0:08:14.680 that we continue to see around artificial intelligence and ultimately 0:08:14.920 --> 0:08:18.880 whether or not we can see absolutely monumental valuations and 0:08:18.920 --> 0:08:23.040 profitability at the same time as well ethical use and deployment. 0:08:24.680 --> 0:08:25.200 I do think so. 0:08:25.240 --> 0:08:27.720 I think that the ethics and the safety are just 0:08:27.800 --> 0:08:29.680 basic good judgment. You know what we saw here in 0:08:29.680 --> 0:08:32.240 this board coup and all this craziness was just bad judgment. 0:08:32.520 --> 0:08:35.640 Now you just want good people making good decisions. And 0:08:35.720 --> 0:08:37.400 whenever I hear anybody say, oh, I'm just trying to 0:08:37.400 --> 0:08:39.320 do this to save the world, that actually really gets 0:08:39.320 --> 0:08:41.480 my spidey sense going I actually find it quite cynical. 0:08:41.520 --> 0:08:42.680 I don't trust that. 0:08:42.920 --> 0:08:44.160 But when you have somebody that's. 0:08:43.960 --> 0:08:45.400 Just like I want to build this thing. I want 0:08:45.400 --> 0:08:47.320 to solve problems. I want to get every student a 0:08:47.360 --> 0:08:50.080 teacher in a tutor. I want to help reduce hospital 0:08:50.120 --> 0:08:52.920 bills and get people better differential diagnoses. I want to 0:08:52.960 --> 0:08:55.320 help discover new drugs. Those are the things that you 0:08:55.360 --> 0:08:57.000 really want to be backing. Most of those people are 0:08:57.000 --> 0:08:59.800 thinking what could go wrong. I always say that failure 0:09:00.200 --> 0:09:02.720 from a failure to imagine failure, and if you are 0:09:02.760 --> 0:09:05.720 adequately thinking about the downsides, what can go wrong? 0:09:05.960 --> 0:09:07.199 Without just a pure. 0:09:07.160 --> 0:09:09.800 Techno optimist view, we're going full speed of had without 0:09:09.800 --> 0:09:11.880 looking to the sides and looking through this year rear 0:09:11.960 --> 0:09:14.360 view mirrors. You don't have to have regulation, you don't 0:09:14.400 --> 0:09:17.120 have to have intense scrutiny. It should just be self 0:09:17.120 --> 0:09:20.720 reflection and good leadership to anticipate the failure points so 0:09:20.840 --> 0:09:23.600 as to avoid them. What happened this weekend with open 0:09:23.640 --> 0:09:27.080 AI and what's still happening was a failure of imagination. 0:09:27.200 --> 0:09:29.400 People did not imagine that this was possible, that so 0:09:29.480 --> 0:09:32.000 much risk could be concentrated in just a handful of 0:09:32.600 --> 0:09:35.000 people's hands. To make a decision on what the future 0:09:35.040 --> 0:09:38.600 would be. There's one big winter here. There's one big 0:09:38.600 --> 0:09:41.080 winter gear, which, as you noted just in the prior comms, 0:09:41.559 --> 0:09:43.400 is Microsoft. Microsoft. 0:09:43.440 --> 0:09:45.440 I mean people are forgetting this ten. 0:09:45.520 --> 0:09:49.640 Really, Josh really, because ultimately they now have regulatory exposure, 0:09:49.679 --> 0:09:52.280 they now have a cost exposure. They also don't have 0:09:52.360 --> 0:09:55.280 that arm's length protection of seeing hallucination built on their 0:09:55.320 --> 0:09:56.840 own brand type. 0:09:57.640 --> 0:10:00.000 I will trade that if I was a Microsoft shareholder 0:10:00.080 --> 0:10:01.800 or a board member or employee there, I would trade 0:10:01.840 --> 0:10:04.640 that every time they put ten billion dollars of committed capital, 0:10:04.640 --> 0:10:06.760 how much actually has gone in whatnot? And what did 0:10:06.760 --> 0:10:10.440 they get in marketcap value? A trillion dollars. That is 0:10:10.520 --> 0:10:14.160 one of the best trades in technology history. Ten billion 0:10:14.200 --> 0:10:18.040 dollars to create a trillion dollars of market value. So 0:10:18.080 --> 0:10:19.640 I think that they can afford, whether it's one hundred 0:10:19.640 --> 0:10:22.200 million dollars of regulatory costs, whether it's Bradsmith going and 0:10:22.200 --> 0:10:24.480 trying to get regulatory capture, which I don't approve of. 0:10:24.520 --> 0:10:26.560 I think it's wrong for this industry. I think that 0:10:26.640 --> 0:10:31.160 it's really disingenuous in its attempt. But Microsoft has won 0:10:31.320 --> 0:10:33.840 ten billion dollars to yield. The trillion dollars of market 0:10:33.960 --> 0:10:35.920 value is a coup of epic proportions. 0:10:36.320 --> 0:10:37.920 Boy, are we going to talk about that a little 0:10:37.960 --> 0:10:40.520 bit more perfect? Start to the show, Josh Warfe, We 0:10:40.559 --> 0:10:42.400 thank you so much, co found a managing partner of 0:10:42.440 --> 0:10:44.920 Lux Capital, and of course an investor in hugging face. 0:10:45.000 --> 0:10:46.360 Just to warn you a little bit later, of course, 0:10:46.520 --> 0:10:48.439 you have Margaret Mitchell joining us on the show. She's 0:10:48.480 --> 0:10:50.880 hugging face, chief ethics scientist, so a little bit more 0:10:50.920 --> 0:10:53.120 there on the ethics side of the equation. Meanwhile, they're 0:10:53.120 --> 0:10:55.400 coming up. We push ahead to the big earnings after 0:10:55.440 --> 0:10:57.840 the bell calls. We're talking AI. Of course, we're talking 0:10:57.880 --> 0:11:00.359 in videos results as a bloom make technology. 0:11:14.960 --> 0:11:17.600 In Video's earnings are the big one coming after the bell. 0:11:17.640 --> 0:11:20.280 Here's what to watch for. Analyst expects sales to jump 0:11:20.440 --> 0:11:23.240 one and seventy one percent from a year ago, driven 0:11:23.320 --> 0:11:27.760 by demand for its AI accelerators. Profit also expected to jump. 0:11:27.920 --> 0:11:30.760 Wall Street also sees a leap in profit three dollars 0:11:30.760 --> 0:11:33.800 thirty six cents of earnings per share, and Video already 0:11:33.880 --> 0:11:36.440 leads the market with its h one hundred GPU used 0:11:36.440 --> 0:11:40.720 to train artificial intelligence models. Investors will want an update 0:11:40.840 --> 0:11:43.520 on the GH two hundred or Great Shopper super chip, 0:11:43.640 --> 0:11:46.840 the next gen accelerator that started shipping last quarter. An 0:11:46.880 --> 0:11:50.480 improved version with HMB three E memory supposed to go 0:11:50.960 --> 0:11:53.640 out in the second quarter of next year. Those are 0:11:53.640 --> 0:11:56.200 the numbers. Let's get the analysis with Bloomberg Intelligence and 0:11:56.240 --> 0:11:59.680 this Kunjan Sabani high bar going into earnings, what do 0:11:59.720 --> 0:12:00.200 you look for. 0:12:01.200 --> 0:12:04.080 A significantly higher beaten Race. I mean, look, the expectations 0:12:04.120 --> 0:12:06.520 have been climbing up and up. Everyone expect them to 0:12:06.559 --> 0:12:09.000 beaten race. But it's going to come down to how 0:12:09.120 --> 0:12:11.599 much more can they keep repeating the performance that is 0:12:11.720 --> 0:12:12.720 in the last two quarters. 0:12:13.360 --> 0:12:16.679 A part of the repeat performance is that their supply constraint, right, 0:12:16.800 --> 0:12:19.760 So wherever you look those demand for AI accelerators, how 0:12:19.800 --> 0:12:21.000 does that factor into your model. 0:12:21.559 --> 0:12:23.760 I think they're going to definitely ship a lot more 0:12:23.960 --> 0:12:27.520 H one hundreds. Based on our estimates, the first half 0:12:27.679 --> 0:12:30.520 H one hundred contribution would be thirty to forty percent 0:12:30.559 --> 0:12:34.079 of the total GPU volumes server GPU volumes. We expect 0:12:34.120 --> 0:12:36.600 that to significantly increase in the second half because with 0:12:36.720 --> 0:12:38.640 each H one hundred they get a lot more ASP 0:12:39.840 --> 0:12:40.640 fascinating Counji. 0:12:40.760 --> 0:12:42.120 We thank you so much you'll be glued to the 0:12:42.160 --> 0:12:46.680 screens after the bell Conjensibani bluemeg Intelligence. We appreciate it 0:12:46.760 --> 0:12:49.000 joining us now to think more broadly about AI and 0:12:49.040 --> 0:12:51.480 indeed where we're currently trading across the board for the 0:12:51.559 --> 0:12:54.280 nasdac Heni fishes with us senior research analyst of Technology 0:12:54.320 --> 0:12:57.760 software at Clearbridge and really do deep dive insights into 0:12:57.800 --> 0:13:00.239 certain names out there that have been powered and benefiting 0:13:00.240 --> 0:13:06.160 from artificial intelligence. Have we seen valuations exceed ultimately the 0:13:06.200 --> 0:13:08.760 growth trajectory the monetization options here? 0:13:10.000 --> 0:13:11.800 It's good to be here. Thank you care lyon think 0:13:11.800 --> 0:13:16.600 you had no, I don't think so. I think we've 0:13:16.600 --> 0:13:19.160 been playing a little bit of push and pull between 0:13:19.240 --> 0:13:23.200 valuations and fundamentals coming through. But fundamentals are only just 0:13:23.240 --> 0:13:26.920 starting to come through. AI monetization is just in the 0:13:27.040 --> 0:13:29.760 earliest stages. We're just on the cusp of seeing what 0:13:29.880 --> 0:13:32.840 these companies will garner from their GENAI offerings. 0:13:33.240 --> 0:13:37.800 What has been so disruptive, largely to sleep of journalists 0:13:37.840 --> 0:13:40.040 and those working in open AI, but also just the 0:13:40.080 --> 0:13:43.160 ecosystem more broadly, has been this sort of self destruction 0:13:43.240 --> 0:13:45.160 path that open air has been on. More generally now 0:13:45.160 --> 0:13:46.760 this is a private company, not one that you'll be 0:13:46.800 --> 0:13:49.319 doing deep dive research on too much. But what they 0:13:49.360 --> 0:13:53.480 have done has created fierce competition and exuberance ever since 0:13:53.640 --> 0:13:57.320 the launch of originally CHATCHYPT back in November of last year. 0:13:58.200 --> 0:14:01.559 Is it more competitive now the space? Do you think the. 0:14:01.520 --> 0:14:04.920 Space is more competitive? And it will become increasingly competitive. 0:14:05.240 --> 0:14:08.680 But the opportunity set continues to rise with each week, 0:14:08.840 --> 0:14:12.640 each month, meaning companies are figuring out more and more 0:14:12.679 --> 0:14:16.040 ways to utilize AI. Vendors are figuring out more and 0:14:16.120 --> 0:14:19.160 more applications to which to apply it. And I think 0:14:19.920 --> 0:14:23.520 we're we're just in the infancy of all that. So yes, 0:14:23.560 --> 0:14:24.800 it will become more competitive. 0:14:24.840 --> 0:14:25.360 Absolutely. 0:14:25.680 --> 0:14:27.280 Has it been a worry for you for the companies 0:14:27.280 --> 0:14:29.720 that you do monitor or those that more broadly that 0:14:29.920 --> 0:14:33.720 your company holds, that are based upon the large language 0:14:33.760 --> 0:14:34.720 models of open ai? 0:14:34.880 --> 0:14:37.000 Do you think I'm sorry with your painting? 0:14:37.040 --> 0:14:40.880 Well, ultimately, many companies have been building around the architecture 0:14:40.880 --> 0:14:42.800 that open ai has built. Oh yeah, and now everyone 0:14:42.840 --> 0:14:45.520 suddenly is worrying about that architecture, about its resiliency. 0:14:45.800 --> 0:14:50.880 Sure, is that a concern? Well, none of the situation 0:14:51.000 --> 0:14:54.320 at open ai has introduced some level of near trum uncertainty. 0:14:54.320 --> 0:14:58.080 But Microsoft just gave every open Ai employee big bear hug. 0:14:58.320 --> 0:15:02.000 Sam Altman has apparently joined Microsoft in a research fashion. 0:15:02.360 --> 0:15:07.080 I think it's too soon to call this a major issue. 0:15:07.160 --> 0:15:10.160 I think Microsoft has had exclusive access to the technology, 0:15:10.440 --> 0:15:12.840 So I think what Microsoft needs to do is actually 0:15:12.960 --> 0:15:16.840 just to draw this situation to some form of conclusion. 0:15:17.000 --> 0:15:20.920 Either they can help stabilize open Ai. They could encourage 0:15:20.960 --> 0:15:23.520 sam Altman to go back to a I to open AI, 0:15:23.720 --> 0:15:27.120 or they could actually take on the majority of the 0:15:27.160 --> 0:15:29.840 employee base of open Ai or the employees which they like, 0:15:30.160 --> 0:15:33.400 which they certainly can do. So I think I think 0:15:33.400 --> 0:15:36.840 we're going to see conclusion before not too long, and 0:15:37.320 --> 0:15:41.520 then we can look forward. Other companies are certainly competing. 0:15:42.000 --> 0:15:45.120 I'm not sure that this gives them a major leg up, 0:15:45.400 --> 0:15:47.320 yet there seems to be some loyalty on the part 0:15:47.360 --> 0:15:49.800 of that team. They would like to stay together if 0:15:49.840 --> 0:15:53.120 they can. Microsoft just clearly gave signals that they're making 0:15:53.120 --> 0:15:53.760 that possible. 0:15:54.360 --> 0:15:56.720 We always have having you on because you like stocks 0:15:56.800 --> 0:15:59.960 like Microsoft, Hype Scalers, CRM, Snow, and Oracle, to name, 0:16:00.000 --> 0:16:02.360 but a few really appreciate you coming on this holiday 0:16:02.400 --> 0:16:13.080 shorten week, It's called Hillary Fish of Clearbridge time now 0:16:13.120 --> 0:16:16.480 for talking tech. First up crypto exchange platform Craken is 0:16:16.520 --> 0:16:18.960 in some hot water with the USSCC, the Securities in 0:16:19.000 --> 0:16:22.280 Exchange Commission. Now, the SEC is saying Cracken com mingled 0:16:22.320 --> 0:16:25.200 client assets with its own, even going as far as 0:16:25.280 --> 0:16:27.760 to pay expenses from bank accounts that held customer cat. 0:16:28.000 --> 0:16:30.960 Craghan said it disagreed with the SEC cleans and planned 0:16:30.960 --> 0:16:35.120 to vigorously defend its position. Meanwhile, President Biden and Vice 0:16:35.160 --> 0:16:38.680 President Kamala Harris are officially on threads. White House officials 0:16:38.720 --> 0:16:41.080 also open accounts for the First Lady and second and Gentlemen, 0:16:41.320 --> 0:16:43.160 and the move, of course, comes just days after the 0:16:43.160 --> 0:16:46.680 White House condemned enol Musk's endorsement of anti Semitic posts 0:16:46.720 --> 0:16:49.840 on x Fulling known as Twitter plus. The US Senate 0:16:49.880 --> 0:16:52.800 Judiciary Committee is calling a number of social media executors 0:16:52.880 --> 0:16:56.120 to testify at a Decembiner sixth hearing regarding online child 0:16:56.200 --> 0:17:00.480 sexual exploitation. Those subpoenad include Jason Citron of Discord Snaps, 0:17:00.480 --> 0:17:04.600 Evan Spiegel, an X CEO, Ninda Yakarina at more on X. 0:17:05.160 --> 0:17:07.960 Yeah More on X, the platform formerly known as Twitter 0:17:08.160 --> 0:17:12.560 is suing watchdog group Media Matters, claiming it quote maliciously 0:17:12.640 --> 0:17:16.040 drove advertisers away from the social media platform. Let's bring 0:17:16.080 --> 0:17:19.520 in Bloomberg's ashaccounts. Who's been all across this. Musk has 0:17:19.560 --> 0:17:22.440 been very vocal on X. Yakarino has been quite vocal 0:17:22.480 --> 0:17:25.600 on X. What is it that they're accusing Media Matters of. 0:17:26.240 --> 0:17:30.080 Well, they're essentially saying that Media Matters mischaracterize some of 0:17:29.920 --> 0:17:31.240 the content on the platform. 0:17:31.320 --> 0:17:33.600 Right, This is in a report a week ago exactly, 0:17:33.680 --> 0:17:34.359 a Matters report. 0:17:34.440 --> 0:17:36.760 Yes, the Media Matters report came out and basically said 0:17:36.800 --> 0:17:40.560 they found ads from huge advertisers like IBM and Apple 0:17:40.640 --> 0:17:43.720 next to pro nazi content. And so what Yakarino and 0:17:43.800 --> 0:17:46.520 Musk and the Right Association X are arguing is that 0:17:46.520 --> 0:17:48.280 that's not the case. It was only a small number 0:17:48.280 --> 0:17:50.879 of people that saw it that Media Matters sort of 0:17:50.920 --> 0:17:53.200 manipulated their feed to do that. So they have all 0:17:53.200 --> 0:17:56.720 these sorts of arguments against why they don't think that's 0:17:56.760 --> 0:17:57.680 exactly accurate. 0:17:58.160 --> 0:18:02.399 Meanwhile, Media Matters says they stand by their reporting and 0:18:02.920 --> 0:18:07.600 ultimately think that this is well a mistrodden path for 0:18:07.640 --> 0:18:09.280 them to be being sued right now. 0:18:10.560 --> 0:18:13.840 Yeah, Medium Matters is saying that, look, we see the ads. 0:18:13.840 --> 0:18:15.879 We looked at them, we saw the ads next to 0:18:15.920 --> 0:18:19.520 pronati content. And unfortunately this is not something that is new, right. 0:18:19.600 --> 0:18:21.760 Advertisers have seen this over the past year. This has 0:18:21.800 --> 0:18:24.680 been an ongoing saga of advertisers finding their ads next 0:18:24.680 --> 0:18:27.199 to content that they don't like, and so media managers saying, look, 0:18:27.240 --> 0:18:29.680 we've done the research, we saw the ads, here's examples 0:18:29.760 --> 0:18:32.080 of it, and so they stand by what they put. 0:18:33.640 --> 0:18:38.960 At the heart of this is the pervasiveness of fake 0:18:39.040 --> 0:18:42.960 content on the platform and the exposure of the advertisers. 0:18:43.840 --> 0:18:50.480 You and I reported that Yakarino has acknowledged broadly advertiser flight. 0:18:51.480 --> 0:18:54.040 What has she said about addressing the issue at heart, 0:18:54.080 --> 0:18:57.160 which is the pervasiveness of content on that platform. 0:18:57.280 --> 0:18:59.320 I mean, again, they sort of continue to go back 0:18:59.320 --> 0:19:01.480 to their part. They said they've taken a number of 0:19:01.520 --> 0:19:05.080 steps to combat anti submitic content on the platform. They 0:19:05.119 --> 0:19:07.439 stand by some of the policies that they have, but 0:19:07.520 --> 0:19:09.840 it's just hard because they continue to say that, but 0:19:09.880 --> 0:19:12.240 then advertisers are continuing to see their ads next to 0:19:12.280 --> 0:19:15.960 this content, and agency executives at this point are pretty 0:19:15.960 --> 0:19:17.520 fed up with a lot of the stuff that they're seeing, 0:19:17.560 --> 0:19:20.119 and so they've consistently pointed to their policies into the 0:19:20.160 --> 0:19:22.919 actions that they're taking. But from the advertiser perspective, it 0:19:22.920 --> 0:19:24.720 doesn't seem to be making a difference, which is why 0:19:24.760 --> 0:19:27.440 we're seeing Apple and IBM and Comcast and all these 0:19:27.440 --> 0:19:29.560 companies pull their ads off the platform or at least 0:19:29.560 --> 0:19:30.600 suspend temporarily. 0:19:31.119 --> 0:19:33.679 And she counts busier is always We thank you so 0:19:33.800 --> 0:19:34.919 much for the date dive, the. 0:19:42.880 --> 0:19:45.919 Welcome back to Bloomberg Technology. I'm Ed Loveler in San Francisco. 0:19:46.040 --> 0:19:48.119 I'm Caroline Heid in New York. We had some breaking 0:19:48.160 --> 0:19:50.600 news earlier this hour, the Wall Street Journal reporting that 0:19:50.640 --> 0:19:53.440 the CEO of Binance and it is founder Ceazy, has 0:19:53.440 --> 0:19:56.040 a step down and plead guilty to violating US anti 0:19:56.040 --> 0:19:59.560 money laundering requirements. Now, the cryptocurrency exchange will also pay 0:19:59.760 --> 0:20:02.080 some four point three billion dollars in fines, but no 0:20:02.119 --> 0:20:04.000 mention Oni bus I is here with the breakdown. This 0:20:04.080 --> 0:20:07.159 is in of course, the DOJ's investigation, not the SEC. 0:20:07.359 --> 0:20:10.359 But what caught your attention from this line from the 0:20:10.400 --> 0:20:11.119 Wall Street Channel. 0:20:11.200 --> 0:20:13.440 Well, we've already reported that the fines could be more 0:20:13.480 --> 0:20:15.440 than four billion dollars. We now know that it will 0:20:15.480 --> 0:20:18.560