WEBVTT - AT&T Reports Greater-than-Expected Mobile Subscriber Gains

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 2>Staying with earnings at and T adding more wireless subscribers

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<v Speaker 2>and forecast by roughly one hundred thousand customers. The CEO

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<v Speaker 2>John Stankey joined Bloomberg Surveillance to discuss the rise in subscribers.

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<v Speaker 2>Take a listen.

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<v Speaker 3>We can provide world class networks in both wireless and

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<v Speaker 3>fix that tackle ninety eight percent of what a customer

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<v Speaker 3>needs to do on the Internet. Occasionally they walk off

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<v Speaker 3>one of our networks, and as you look at our

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<v Speaker 3>partnerships that we're working with the satellite industry, by this

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<v Speaker 3>time next year we'll be able to solve that problem.

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<v Speaker 3>And so we're the natural place for people to come

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<v Speaker 3>and meet their needs on the Internet and do it

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<v Speaker 3>easily on one bill, with one set of services and

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<v Speaker 3>one support infrastructure. We think we're in a great position

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<v Speaker 3>as a result of that.

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<v Speaker 2>Kelsey Griffiths is the Bloomberg Telecoms reporter she has been

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<v Speaker 2>tracking the earnings today and she joins us right now

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<v Speaker 2>from Washington. Ke The mobile phone industry is extremely competitive.

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<v Speaker 2>We are bombarded by ads constantly from AT and T, Verizon,

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<v Speaker 2>and Team Mobile trying to undercut each other and offer

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<v Speaker 2>better terms, better deals. How is AT and T able

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<v Speaker 2>to add more monthly wireless subscribers than expected in this

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<v Speaker 2>kind of environment.

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<v Speaker 4>This is a strategy AT and T has put into

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<v Speaker 4>place since about last quarter. So back in March, they

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<v Speaker 4>debuted this new plan that is kind of like an

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<v Speaker 4>all in approach. They were modeling it after Peloton or

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<v Speaker 4>Netflix or one of these sort of like tech lifestyle

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<v Speaker 4>subscriptions where you pay one price and you have access

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<v Speaker 4>to everything that you hope to get out of it.

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<v Speaker 4>So AT and t's version of that is one price,

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<v Speaker 4>you get home internet, you get mobile service, and you

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<v Speaker 4>get a few connected devices like iPads or Apple watches

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<v Speaker 4>thrown in. So that seems like it's been pretty successful.

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<v Speaker 4>They have introduced some price increases on I believe with

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<v Speaker 4>some of the more legacy plans that was about ten

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<v Speaker 4>to twenty dollars per line. But even with those increases,

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<v Speaker 4>it seems like customers are responding to some of these

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<v Speaker 4>newer offers.

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<v Speaker 5>Kelsey talk to us about their return of capital plans

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<v Speaker 5>going forward, because I know that's a big part of

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<v Speaker 5>the investment story.

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<v Speaker 4>Right AT and T has said for a while that

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<v Speaker 4>they are heavily invested in returning back to their shareholders,

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<v Speaker 4>and today they announce that they're pulling that forward a

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<v Speaker 4>little bit. I think they said they're going to buy

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<v Speaker 4>back ten billion instead of just eight billion in shares

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<v Speaker 4>this year. So that's a modest uptick that kind of

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<v Speaker 4>contributes to that optimism that they're expressing in their long

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<v Speaker 4>term strategy and growth.

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<v Speaker 2>I want to just go back to the competitive market

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<v Speaker 2>landscape for AT and T and the other mobile operators

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<v Speaker 2>for a moment here, because there's been taught that SpaceX

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<v Speaker 2>might enter this space. So what's already hyper competitive, we'll

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<v Speaker 2>get even more so what is the latest on that front?

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<v Speaker 4>That's right. We've seen the all three of the big

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<v Speaker 4>telecom carriers stocks take a pretty substantial hit over the

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<v Speaker 4>last several weeks as speculation about what SpaceX might be

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<v Speaker 4>up to has sort of taken off. The telecom carriers

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<v Speaker 4>have all so far made it pretty clear that they

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<v Speaker 4>don't want to do any deals that would offer SpaceX

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<v Speaker 4>access to the market as a peer. But at least

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<v Speaker 4>T Mobile is working with SpaceX to fill in some

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<v Speaker 4>of the gaps in T Mobile's terrestrial network. That was

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<v Speaker 4>kind of what John Stankey suggested today. He didn't say

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<v Speaker 4>specifically that he wants to do a deal with SpaceX,

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<v Speaker 4>but he did say that he sees satellite generally as

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<v Speaker 4>being very compli mentory to the ground based network that

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<v Speaker 4>AT and T has, and it can actually potentially help them,

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<v Speaker 4>you know, make their revenue better because they can fill

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<v Speaker 4>some gaps in their network with satellite and potentially retire

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<v Speaker 4>some parts of the network that are very expensive to maintain.

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<v Speaker 5>CAPEX Kelsey, it's a capital intensive business, is telecom business?

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<v Speaker 5>Did the company mention kind of what they're thinking in

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<v Speaker 5>terms of CAPEX going forward?

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<v Speaker 4>Well, I can tell you that John Sankey is very

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<v Speaker 4>bullish on or at least very aware of how agentic

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<v Speaker 4>ai is changing the network traffic patterns, and so I

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<v Speaker 4>think he said he expects to see nine times enterprise

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<v Speaker 4>growth and agentic AI in by twenty thirty five and

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<v Speaker 4>seven times the volume of aic AI on the consumer side.

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<v Speaker 4>So those massive increases in essentially AI driven traffic are

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<v Speaker 4>things that he's planning for, and they do have a

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<v Speaker 4>strategy right now, and they're not adjusting that strategy necessarily

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<v Speaker 4>to account for in.

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<v Speaker 6>Yeah, in their cap Thanks got it. Stay with us.

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<v Speaker 2>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am Easterned on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

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<v Speaker 6>Stay on the earnings front.

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<v Speaker 5>Super Micro jumps after early results show rising backlog.

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<v Speaker 6>Stock is up twenty four percent today. Just extraorining us.

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<v Speaker 6>It's talk to the analyst covers super Micro. That'd be

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<v Speaker 6>Wu Jinho.

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<v Speaker 5>He's in our Princeton office, which talked to us about

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<v Speaker 5>super Micro. What did they say with the results and

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<v Speaker 5>why is the stock up so much today?

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<v Speaker 7>Yeah, Hey, hey Paul. So essentially it was that stunning

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<v Speaker 7>backlock figure that they posted, right, So, if we think

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<v Speaker 7>about a month ago when they did an equity raise,

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<v Speaker 7>they announced that they had thirty nine billion dollars in

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<v Speaker 7>backlog at the month of At the start of June,

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<v Speaker 7>that increased to about sixty billion as part of the

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<v Speaker 7>pre announcement. So what happens now is that the setup

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<v Speaker 7>for her fiscal twenty twenty seven guidance is going to

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<v Speaker 7>be really, really good. Consensus prior to the backlog guidance

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<v Speaker 7>was at fifty three billion dollars for twenty seven. I'd

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<v Speaker 7>be shocked if they don't exceed that.

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<v Speaker 2>So if super Micro sees this kind of backlog, what

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<v Speaker 2>does it mean for its peers, for its competitors, are

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<v Speaker 2>they getting a similar lift?

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<v Speaker 7>Well, I mean, you know, that's a great question, Scarlett Dell.

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<v Speaker 7>Dell is the market leader in AI server as I

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<v Speaker 7>suspect that Dell is going to see similar demand patterns

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<v Speaker 7>as well, right, because typically these type of mega deals

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<v Speaker 7>AI server deals are dual source. So super Micro is benefiting,

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<v Speaker 7>Della is benefiting as.

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<v Speaker 6>Well, and dellstock is up ten today in sympathy. So

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<v Speaker 6>that probably tells.

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<v Speaker 5>The story there, which how does the memory shortage, the

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<v Speaker 5>way for the chip shortage and all that kind of stuff,

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<v Speaker 5>How does that impact the super micros of the world,

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<v Speaker 5>because it doesn't seem to be Yeah.

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<v Speaker 7>So you know, we did some analysis on that from

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<v Speaker 7>from the AI server front, it's it's clear that the

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<v Speaker 7>given the demand for AI servers and the demand for compute,

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<v Speaker 7>the neo clouds are more than willing to absorb those costs. Now,

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<v Speaker 7>what's happening on the traditional servers right the stuff that

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<v Speaker 7>powers our own enterprise data centers. Customers are desperate for

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<v Speaker 7>comte compute because the rising memory costs. They want to

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<v Speaker 7>avoid the inflation of the server server inflation. So they're

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<v Speaker 7>actually I don't know if they're pre purchasing or pre buying,

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<v Speaker 7>but they are buying. It hasn't affected the server business

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<v Speaker 7>at all. If anything, the vendors have benefited.

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<v Speaker 2>Okay, as we mentioned, micro shares up about twenty four

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<v Speaker 2>percent today, so getting a big lift, but still, you know,

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<v Speaker 2>well below the highs that we saw in early June.

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<v Speaker 2>So Ujin this was a preliminary result. The company will

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<v Speaker 2>actually formally report its quarterly results in mid August. Have

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<v Speaker 2>we seen all the upside here or is there something

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<v Speaker 2>that the company might withhold until the actual results that

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<v Speaker 2>could give this stuck another kick.

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<v Speaker 7>Yeah, So the thing that we're waiting for right now

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<v Speaker 7>is the gross margin guidance for twenty seven Scarlet. Look,

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<v Speaker 7>they gave phenomenal gross more. They expect phenomenal gross margin

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<v Speaker 7>fifteen to seventeen percent for the fiscal fourth quarter, and

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<v Speaker 7>they guide it to previously eight point two to eight

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<v Speaker 7>point four percent. Look, I think it was one mega

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<v Speaker 7>deal that helped them raise that guidance. I do expect

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<v Speaker 7>gross margins to come down in twenty seven, but I

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<v Speaker 7>suspect that there is an uptick in gross margin overall

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<v Speaker 7>from the eight percent that they delivered in twenty six

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<v Speaker 7>to around nine to ten percent. If that's going to

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<v Speaker 7>be the case, given that the leverage of the model,

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<v Speaker 7>you can start seeing a substantial uptick and earnings in

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<v Speaker 7>twenty seven, even with the dilution from the equity raise.

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<v Speaker 5>Thirty second stuff, which what is the revenue visibility for

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<v Speaker 5>a super micro seems seems pretty pretty solid.

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<v Speaker 7>I mean from a quarter to quarter basis, Yeah, Paul,

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<v Speaker 7>they've missed their guidance for the past three to five quarters,

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<v Speaker 7>so their execution has been choppy, but from a full

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<v Speaker 7>year basis, it's actually been up into the right given

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<v Speaker 7>how these data centers have been sprouting up and they've

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<v Speaker 7>been really wanting to get the Nvidia chips in their

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<v Speaker 7>buildings as quickly as possible.

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<v Speaker 2>Stay with US more from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Applecarclay, and Android Auto

0:09:59.760 --> 0:10:03.079
<v Speaker 1>with Bloomberg Business app. Listen on demand wherever you get

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<v Speaker 1>your podcasts, or watch us live on YouTube.

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<v Speaker 6>More earnings here today.

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<v Speaker 5>Philip Marsh thinks Cigarettes p M is the ticker. Some

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<v Speaker 5>numbers out today. Stocks up about one point sixty five percent,

0:10:15.960 --> 0:10:19.040
<v Speaker 5>stocks the fifty two week high, up nineteen percent. Year

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<v Speaker 5>today pltus you get a three percent dividend yield. So

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<v Speaker 5>Philip marsharelder has been quite happy.

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<v Speaker 6>Let's bring Kenshay.

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<v Speaker 5>He's been following this company since the beginning of time

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<v Speaker 5>for Bloomberg Intelligence. He's seen all the iterations of Philip

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<v Speaker 5>Mars and Altree and all that kind of stuff. So

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<v Speaker 5>Ken talk to us about what we saw from Philip

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<v Speaker 5>Marsh today.

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<v Speaker 8>Yeah.

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<v Speaker 9>Hi, Well, if Phillip Morris's numbers today were really good,

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<v Speaker 9>that the headline members top line ten percent, beat five percent, expectations,

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<v Speaker 9>EPs up fifteen percent, expectations were for seven You know,

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<v Speaker 9>initially despite those strong members, initially the stock in the

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<v Speaker 9>pre market was down and I was scratching my head,

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<v Speaker 9>and I guess it was because they lowered their guidance

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<v Speaker 9>on a after currency basis, and this company is very international,

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<v Speaker 9>hence the name, and they said, look, you know, currencies

0:11:09.880 --> 0:11:11.480
<v Speaker 9>are not going to be quite as favorable as we

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<v Speaker 9>saw a last quarter, but are adjusted currency numbers, we're

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<v Speaker 9>still looking for high single digit EPs growth. I think

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<v Speaker 9>investors digested that they got bullish again.

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<v Speaker 2>Right, Philip Morris is basically the international business, right, I mean,

0:11:29.440 --> 0:11:32.000
<v Speaker 2>Autria is the domestic business. And Philip Morris I believe

0:11:32.040 --> 0:11:34.720
<v Speaker 2>sells Marlboro's cigarettes outside the US.

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<v Speaker 9>That's right, Squirrel. It in a late ninety I should

0:11:40.200 --> 0:11:42.480
<v Speaker 9>say two thousand and eight, I believe it was this

0:11:42.559 --> 0:11:46.200
<v Speaker 9>company split. Phillimore's International basically took the Marlborough name and

0:11:46.240 --> 0:11:50.679
<v Speaker 9>the franchise outside the US. Ultria, a holding company, owns

0:11:50.720 --> 0:11:53.800
<v Speaker 9>pm USA, which owns the Marvel name in the US.

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<v Speaker 9>Since that time, though, the two companies have agreed to

0:11:56.960 --> 0:12:00.800
<v Speaker 9>allow pm I to sell non suit You're at tobacco

0:12:00.880 --> 0:12:03.719
<v Speaker 9>products in the US, and that's why you're seeing them

0:12:03.800 --> 0:12:08.040
<v Speaker 9>sell zin you know, the oral, the nicketine products, and

0:12:08.120 --> 0:12:10.520
<v Speaker 9>soon they're going to launch their heat Nott burned vapor

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<v Speaker 9>product in the US, a big potential growth market.

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<v Speaker 6>What is Zin? It's all over social media. Can you

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<v Speaker 6>explain this to me.

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<v Speaker 9>Zin is an oral nicotine product, Paul. It comes in

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<v Speaker 9>those little round cans, maybe plastic containers, but in if

0:12:28.040 --> 0:12:31.480
<v Speaker 9>you have twenty pouches that you can get your nicotine buzz.

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<v Speaker 9>It's a non tobacco product, you know, it's bacco free,

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<v Speaker 9>and you get your nicotine buzz without the ire of

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<v Speaker 9>your neighbor at work or on the subway or whatever

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<v Speaker 9>getting in the way that you're smoking or vaping next

0:12:46.160 --> 0:12:48.120
<v Speaker 9>to them. So it's a very discrete way of getting

0:12:48.160 --> 0:12:50.760
<v Speaker 9>your nicotine and it's doing really well. A lot of

0:12:50.760 --> 0:12:51.960
<v Speaker 9>smokers are switching over.

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<v Speaker 2>Interesting all right, Is it like nicotine gum? Is it

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<v Speaker 2>meant to kind of get you off of smoking? Or

0:12:57.240 --> 0:12:59.920
<v Speaker 2>is it just a flat out replacement. I mean, it's

0:13:00.120 --> 0:13:01.960
<v Speaker 2>the idea like a smoking cessation device.

0:13:03.240 --> 0:13:05.800
<v Speaker 9>It's mostly that, yes, yes, girl, And that's what the

0:13:05.840 --> 0:13:09.080
<v Speaker 9>intent is, and that's why the FDA has granted it

0:13:09.120 --> 0:13:13.600
<v Speaker 9>recently the authorization to promote it as a less harmful

0:13:13.679 --> 0:13:16.319
<v Speaker 9>source of nicotine as opposed to cigarettes. You know, it's

0:13:16.320 --> 0:13:20.120
<v Speaker 9>the inhalation of carbons that causes the harm. The FDA

0:13:20.200 --> 0:13:23.120
<v Speaker 9>acknowledges that if you get your nicotine, you know, through

0:13:23.160 --> 0:13:27.360
<v Speaker 9>your mouth, whatever it's, it's bypassing that harm. Not to

0:13:27.480 --> 0:13:30.160
<v Speaker 9>say nicotine is completely safe, but it's a much less

0:13:30.200 --> 0:13:33.520
<v Speaker 9>harmful form of nicotine ingestion.

0:13:34.600 --> 0:13:37.520
<v Speaker 2>Stay with us. More from Bloomberg Intelligence coming up after this.

0:13:41.720 --> 0:13:45.400
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:13:45.480 --> 0:13:48.559
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:13:48.600 --> 0:13:51.880
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

0:13:51.960 --> 0:13:55.680
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:13:55.880 --> 0:13:59.760
<v Speaker 2>AI very much on our minds right now, and you know,

0:13:59.840 --> 0:14:03.400
<v Speaker 2>we look ahead to some of the bigger picture issues

0:14:03.400 --> 0:14:06.920
<v Speaker 2>that we need to resolve, and regulation is and has

0:14:06.960 --> 0:14:10.360
<v Speaker 2>been coming up quite a bit. Our next guest suggests

0:14:10.360 --> 0:14:13.720
<v Speaker 2>that perhaps we think about regulating AI the way that

0:14:13.760 --> 0:14:17.480
<v Speaker 2>we regulate the airline industry. Gatamconda is lecture at Yale

0:14:17.480 --> 0:14:20.400
<v Speaker 2>School of Management and a Bloomberg Opinion contributor, and this

0:14:20.480 --> 0:14:23.440
<v Speaker 2>is exactly what he's written about. Gotam, just walk us

0:14:23.480 --> 0:14:27.800
<v Speaker 2>through your thesis here about regulating AI using an FAA

0:14:27.960 --> 0:14:28.840
<v Speaker 2>kind of approach.

0:14:29.880 --> 0:14:31.760
<v Speaker 8>Right, So let's think about this from you know what

0:14:31.800 --> 0:14:34.680
<v Speaker 8>the industry itself says is that this is a technology

0:14:34.720 --> 0:14:38.280
<v Speaker 8>that we'll have not just gigantic economic implications, but gigantic

0:14:38.360 --> 0:14:41.840
<v Speaker 8>security implications. Right that they're already finding evidence as a

0:14:41.880 --> 0:14:44.520
<v Speaker 8>technology that can help you do cybersecurity attacks, that can

0:14:44.600 --> 0:14:47.200
<v Speaker 8>help maybe even in the with development of sort of

0:14:47.280 --> 0:14:51.040
<v Speaker 8>chemical or biological weapons. That sounds like something that the

0:14:51.080 --> 0:14:52.800
<v Speaker 8>government needs to step in, right. There needs to be

0:14:52.840 --> 0:14:54.720
<v Speaker 8>some regulation of that when you talk about those kinds

0:14:54.760 --> 0:14:57.080
<v Speaker 8>of risks. So then if you look at the industries

0:14:57.120 --> 0:14:59.720
<v Speaker 8>and the areas where that risk has been successfully managed,

0:14:59.800 --> 0:15:02.120
<v Speaker 8>the aviation just stands out. It's just head and shoulders

0:15:02.120 --> 0:15:04.520
<v Speaker 8>above everyone else. I would saying that if you could,

0:15:04.560 --> 0:15:06.400
<v Speaker 8>you know, you could tell people one hundred you know,

0:15:06.440 --> 0:15:09.160
<v Speaker 8>one hundred years ago that you could go from anywhere

0:15:09.160 --> 0:15:11.960
<v Speaker 8>in the world to anywhere in the world in twenty

0:15:11.960 --> 0:15:16.960
<v Speaker 8>four hours in safety so complete that it is safer

0:15:17.000 --> 0:15:19.040
<v Speaker 8>to be on the airplane than driving to and from

0:15:19.080 --> 0:15:21.280
<v Speaker 8>the airport. And the worst thing that would happen to

0:15:21.320 --> 0:15:23.600
<v Speaker 8>you is you complain about the quality of the pretzels.

0:15:24.480 --> 0:15:26.920
<v Speaker 8>They would say that sounds you know, that's a miracle,

0:15:26.960 --> 0:15:29.760
<v Speaker 8>that is an astonishing achievement, and you cannot separate out

0:15:29.800 --> 0:15:32.720
<v Speaker 8>that level of success and that level of innovation from

0:15:32.800 --> 0:15:36.320
<v Speaker 8>the success of the FAA, the you know, American regulatory agency,

0:15:36.320 --> 0:15:39.080
<v Speaker 8>which has just led the world in regulatory safety. So

0:15:39.080 --> 0:15:41.320
<v Speaker 8>if we've done so well with such an important industry,

0:15:41.560 --> 0:15:42.640
<v Speaker 8>I think we can learn from that.

0:15:43.400 --> 0:15:46.160
<v Speaker 5>Is an argument to be made Gotham, that we that

0:15:46.280 --> 0:15:49.400
<v Speaker 5>we as society it might be too late to regulate AI.

0:15:49.640 --> 0:15:52.520
<v Speaker 6>Maybe it's there are it's already kind of out there.

0:15:53.640 --> 0:15:57.000
<v Speaker 8>So it is out there, but it's not to The

0:15:57.600 --> 0:15:59.640
<v Speaker 8>question is, you know, it might be too late to

0:15:59.680 --> 0:16:02.760
<v Speaker 8>elimit all of the potential harms. But if we're looking

0:16:02.840 --> 0:16:05.360
<v Speaker 8>at the curve and the curve keeps getting steeper and

0:16:05.400 --> 0:16:08.640
<v Speaker 8>moving faster, it's not too late to obviate the worst ones, right,

0:16:08.680 --> 0:16:11.440
<v Speaker 8>So the really big risks aren't there yet. You hear

0:16:11.480 --> 0:16:14.440
<v Speaker 8>people talking about AIS used in biological weapons. That's a

0:16:14.440 --> 0:16:17.320
<v Speaker 8>place where I've published articles, and we're still quite a

0:16:17.360 --> 0:16:20.480
<v Speaker 8>few years away from that, right, So working with biological

0:16:20.480 --> 0:16:23.240
<v Speaker 8>systems still involves a lot of handwork, involves people, It

0:16:23.240 --> 0:16:26.240
<v Speaker 8>involves a lot of sort of tacit skills. That's there.

0:16:26.360 --> 0:16:29.000
<v Speaker 8>It's but it is going away. So we want to

0:16:29.040 --> 0:16:32.680
<v Speaker 8>have these regulatory barriers in place before we lose the

0:16:32.720 --> 0:16:34.640
<v Speaker 8>safety that the safety that we were sort of we

0:16:34.720 --> 0:16:35.440
<v Speaker 8>sort of inherited.

0:16:36.880 --> 0:16:42.000
<v Speaker 2>So China, Chinese company Moonshot released Kimmy K three, and

0:16:42.040 --> 0:16:44.440
<v Speaker 2>we talked about this AI model and how disruptive, potentially

0:16:44.480 --> 0:16:47.040
<v Speaker 2>disruptive it could be. Do we think that China is

0:16:47.080 --> 0:16:49.840
<v Speaker 2>going to move faster than the US on regulating AI?

0:16:51.080 --> 0:16:53.520
<v Speaker 8>So this is a fascinating question, and there's clearly a

0:16:53.560 --> 0:16:55.960
<v Speaker 8>lot of debate in China, and the Chinese regulatory state

0:16:56.000 --> 0:16:59.520
<v Speaker 8>is quite advanced, and you know they have they have

0:16:59.640 --> 0:17:02.600
<v Speaker 8>a deference to sort of technical expertise that we don't

0:17:02.680 --> 0:17:04.760
<v Speaker 8>that might allow them to do that. But when we

0:17:04.800 --> 0:17:07.920
<v Speaker 8>think about these these open weights models that are coming

0:17:07.960 --> 0:17:10.480
<v Speaker 8>out of China, however impressive they are, they are also

0:17:10.640 --> 0:17:13.400
<v Speaker 8>very clearly sort of behind what the United States has,

0:17:13.440 --> 0:17:15.320
<v Speaker 8>and in quite a few cases they seem to be

0:17:15.320 --> 0:17:17.719
<v Speaker 8>heavily based on American models, so much so that if

0:17:17.760 --> 0:17:20.400
<v Speaker 8>you take Kimmy and you ask it what is your name?

0:17:20.960 --> 0:17:24.359
<v Speaker 8>Its answer will be my name is Claude Bianthropic, which

0:17:24.560 --> 0:17:26.440
<v Speaker 8>is kind of a flag as to where they might

0:17:26.440 --> 0:17:29.240
<v Speaker 8>have gotten that data from. Right, And so what I

0:17:29.240 --> 0:17:31.360
<v Speaker 8>would say is in this do allue but what we've

0:17:31.400 --> 0:17:34.879
<v Speaker 8>learned is aviation is an incredibly cooperative space, right, It's

0:17:34.920 --> 0:17:38.720
<v Speaker 8>both competitive and cooperative. Everyone wants to have the world's

0:17:38.760 --> 0:17:42.119
<v Speaker 8>leading airplane makers, it wants to have the world's leading airlines,

0:17:42.400 --> 0:17:44.320
<v Speaker 8>but they also understand that we've all got to work

0:17:44.359 --> 0:17:47.000
<v Speaker 8>together in order to make those safe. And what the

0:17:47.119 --> 0:17:49.720
<v Speaker 8>FAA was able to do was to create international norms

0:17:49.720 --> 0:17:53.960
<v Speaker 8>of collaboration by being the best regulatory agency in the world.

0:17:54.000 --> 0:17:55.359
<v Speaker 8>So every one of the world sort of looked at

0:17:55.359 --> 0:17:58.720
<v Speaker 8>the FAA and took their lead from the FAA. That again,

0:17:58.800 --> 0:18:00.600
<v Speaker 8>is the same model we can do where we can

0:18:00.640 --> 0:18:02.840
<v Speaker 8>get the Chinese and Us to agree on a regulatory

0:18:02.840 --> 0:18:06.119
<v Speaker 8>harma regulatory harmonization that might make it safe for everybody

0:18:06.400 --> 0:18:08.200
<v Speaker 8>because we know they can because we've done it before.

0:18:09.200 --> 0:18:12.280
<v Speaker 5>What has China said on this matter, if anything, as

0:18:12.280 --> 0:18:15.320
<v Speaker 5>it relates to just broadly regulating or controlling AI.

0:18:16.560 --> 0:18:19.040
<v Speaker 8>Yeah, there's been some really interesting discussions, but it hasn't

0:18:19.040 --> 0:18:21.320
<v Speaker 8>come out yet, right, So it's pretty clear that they

0:18:21.359 --> 0:18:24.040
<v Speaker 8>have some concerns about the will AI systems, and they're

0:18:24.040 --> 0:18:26.520
<v Speaker 8>willingness to sort of talk about issues like Tianneman Square.

0:18:26.560 --> 0:18:28.240
<v Speaker 8>They've cracked down on that and made it much more

0:18:28.240 --> 0:18:30.920
<v Speaker 8>difficult for these systems for their systems to do that.

0:18:31.359 --> 0:18:33.200
<v Speaker 8>There are a bunch of other areas where they've talked

0:18:33.200 --> 0:18:36.720
<v Speaker 8>about it, but so far it's been almost a surprisingly

0:18:36.840 --> 0:18:39.119
<v Speaker 8>light touch, I think, at least in part because the

0:18:39.200 --> 0:18:42.360
<v Speaker 8>Chinese attitude towards these systems is very different from ours. Right,

0:18:42.400 --> 0:18:45.480
<v Speaker 8>the Chinese AI community is not consumed with the possibility

0:18:45.840 --> 0:18:48.399
<v Speaker 8>of superintelligence or ending of the world. They're sort of like,

0:18:48.400 --> 0:18:49.720
<v Speaker 8>we're a billding these things. Then we'll be able to

0:18:49.720 --> 0:18:51.840
<v Speaker 8>apply them in factories and make our factories more efficient.

0:18:52.720 --> 0:18:55.280
<v Speaker 8>That is a lot less likely to generate fear, and

0:18:55.359 --> 0:18:57.440
<v Speaker 8>you know, might actually be more likely to generate short

0:18:57.520 --> 0:18:58.760
<v Speaker 8>term economic returns too.

0:18:59.400 --> 0:19:03.120
<v Speaker 2>Okay, is not exactly the leading edge of AI innovation.

0:19:03.280 --> 0:19:05.639
<v Speaker 2>But Europe is very good on regulation. They spend a

0:19:05.680 --> 0:19:08.240
<v Speaker 2>lot of time on that. Has europset or done anything

0:19:08.280 --> 0:19:10.480
<v Speaker 2>that kind of creates a bit of a template.

0:19:11.880 --> 0:19:14.040
<v Speaker 8>So I would say, not yet, And I want to

0:19:14.119 --> 0:19:16.760
<v Speaker 8>sort of push that on. When you say they're very

0:19:16.760 --> 0:19:18.760
<v Speaker 8>good at regulation, what they're they're often are is they

0:19:18.760 --> 0:19:19.880
<v Speaker 8>have a heavier hand.

0:19:19.760 --> 0:19:21.760
<v Speaker 2>Okay, regula, Yeah, maybe that's a better way to put it.

0:19:22.200 --> 0:19:25.600
<v Speaker 8>Yeah, But you know, like I think the American regulatory

0:19:25.600 --> 0:19:28.040
<v Speaker 8>state that we established, you know, up until pretty recently

0:19:28.119 --> 0:19:31.399
<v Speaker 8>with agencies like the FDA, was incredibly successful. We managed

0:19:31.400 --> 0:19:34.120
<v Speaker 8>to get both high levels of safety and high levels

0:19:34.160 --> 0:19:36.840
<v Speaker 8>of innovation at the same time. Those weren't those aren't right,

0:19:36.840 --> 0:19:39.679
<v Speaker 8>Those weren't in conflict. They were together. The reason that

0:19:39.840 --> 0:19:42.119
<v Speaker 8>the airline industry was able to the aviation industry was

0:19:42.119 --> 0:19:45.280
<v Speaker 8>able to progress so quickly was because people trusted that

0:19:45.320 --> 0:19:48.040
<v Speaker 8>the American government would keep it safe. And so this

0:19:48.080 --> 0:19:49.840
<v Speaker 8>is sort of a point that people in the industry

0:19:49.840 --> 0:19:52.720
<v Speaker 8>who sort of keep it weakening the you know, supporting

0:19:52.760 --> 0:19:54.720
<v Speaker 8>the weakening of the federal government or things like that,

0:19:54.880 --> 0:19:59.119
<v Speaker 8>they are fundamentally misunders misunderstanding the situation, and they should

0:19:59.119 --> 0:20:01.840
<v Speaker 8>they should be really careful. They might get what they

0:20:01.880 --> 0:20:04.560
<v Speaker 8>want for what they're asking for, because if they get

0:20:04.600 --> 0:20:06.680
<v Speaker 8>a US government that is too weak to regulate AI,

0:20:07.119 --> 0:20:09.199
<v Speaker 8>what they will get is also an American public that

0:20:09.240 --> 0:20:11.879
<v Speaker 8>rejects AI entirely in an industry that will die on

0:20:11.880 --> 0:20:12.280
<v Speaker 8>the vine.

0:20:12.280 --> 0:20:15.440
<v Speaker 6>Here thirty seconds left. What is the Trump administration set

0:20:15.440 --> 0:20:15.920
<v Speaker 6>on this matter?

0:20:15.960 --> 0:20:20.160
<v Speaker 8>If anything, They've started to talk about banning Chinese open

0:20:20.200 --> 0:20:22.440
<v Speaker 8>weights models, and that's probably gonna be my next column

0:20:22.440 --> 0:20:24.000
<v Speaker 8>because I said, I'm not sure what I think about that,

0:20:24.040 --> 0:20:25.640
<v Speaker 8>but that seems to me that that is walking down

0:20:25.680 --> 0:20:28.600
<v Speaker 8>a very slippery slope because those open weights models are

0:20:28.640 --> 0:20:32.000
<v Speaker 8>a big threat to the economics of our frontier labs,

0:20:32.440 --> 0:20:34.560
<v Speaker 8>but they're pretty great for everyone else, So you're making

0:20:34.600 --> 0:20:35.920
<v Speaker 8>a pretty striking trade there.

0:20:38.119 --> 0:20:42.840
<v Speaker 1>This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,

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