WEBVTT - Apple Hit with EU Fine 0:00:02.960 --> 0:00:07.280 Bloomberg Audio Studios, podcasts, radio news. 0:00:09.960 --> 0:00:13.840 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:00:13.920 --> 0:00:17.000 weekdays at ten am Eastern on Apple Car, playing Android 0:00:17.040 --> 0:00:20.120 Auto with the Bloomberg Business app. Listen on demand wherever 0:00:20.200 --> 0:00:24.040 you get your podcasts, or watch us live on YouTube. 0:00:25.000 --> 0:00:28.520 Looking about Apple here, stocks down two point seven percent. 0:00:28.760 --> 0:00:32.040 The European Union, who has always been tough on US 0:00:32.080 --> 0:00:34.520 technology I think twenty twenty five years ago with Microsoft 0:00:34.520 --> 0:00:38.159 in this scene called Windows, and they're still beating up 0:00:38.200 --> 0:00:42.440 on US tech companies. So another fine come along. Let's 0:00:42.479 --> 0:00:45.520 check in with anarag Rana. He covers all things technology 0:00:45.560 --> 0:00:50.840 for Bloomberg Intelligence. So put into context, what's what happened 0:00:50.840 --> 0:00:52.839 to Apple here from a regulatory standpoint and what it 0:00:52.880 --> 0:00:53.360 means for them. 0:00:53.400 --> 0:00:55.600 Just explain kind of what the fine is for. 0:00:56.800 --> 0:00:59.200 Yeah, this has been, you know, going on for a while, 0:00:59.240 --> 0:01:01.880 and tbxtions were that they were going to be fined 0:01:01.880 --> 0:01:04.920 about five hundred million euros. Now the more important thing 0:01:05.000 --> 0:01:08.840 is on March seven, the Digital Market Act goes live, 0:01:09.280 --> 0:01:12.160 and Apple's already made concessions in terms of all the 0:01:12.200 --> 0:01:15.080 things the European Union wants to do. I think the 0:01:15.120 --> 0:01:17.959 surprise to our analyst Hamblin, who is based in Europe, 0:01:18.120 --> 0:01:20.399 was the size of it. It's not you know, when 0:01:20.400 --> 0:01:22.759 we rumored was five hundred when it came to around 0:01:22.760 --> 0:01:25.280 one point eight billion. One thing is for clear at 0:01:25.319 --> 0:01:27.640 this point that Apple is not going to just you know, 0:01:27.959 --> 0:01:30.959 pay this fine and walk away with the DMA or 0:01:31.000 --> 0:01:34.040 the Digital Markets Act. It's possible that the app store, 0:01:34.560 --> 0:01:37.160 you know, policies are going to be under more scrutiny, 0:01:37.360 --> 0:01:40.080 and I think that's what's driving the stock down. I mean, 0:01:40.120 --> 0:01:42.600 two billion dollars is not that big of a deal 0:01:42.640 --> 0:01:46.040 for Apple, but I think the twenty one billion dollars 0:01:46.080 --> 0:01:49.080 of revenue that the app store generates, I think that's 0:01:49.240 --> 0:01:50.360 that's a bigger issue. 0:01:51.760 --> 0:01:54.080 So here's my thing, though, is that the stock is 0:01:54.080 --> 0:01:56.840 down over ten percent since it's January high for this year. 0:01:57.280 --> 0:01:59.960 So clearly something else was going on, just not this fine, 0:02:00.000 --> 0:02:02.360 and that's just adding fuel to the fire here. What 0:02:03.400 --> 0:02:04.360 is happening to Apple? 0:02:05.320 --> 0:02:07.240 Yeah, I mean if you think about it, all the 0:02:07.640 --> 0:02:09.880 bad things that can happen to Apple are happening all 0:02:09.919 --> 0:02:12.840 at once. I mean, frankly speaking, it right now when 0:02:12.880 --> 0:02:15.320 you look at their iPhone sales that are slowing down, 0:02:15.480 --> 0:02:20.640 China competition, a lot of supply chain dependency on China. 0:02:21.000 --> 0:02:23.840 On top of that app store stuff. They are not 0:02:23.960 --> 0:02:26.720 a player in Jenei right now. So a lot of 0:02:26.720 --> 0:02:30.000 good things happening for Apple, and it's going to be 0:02:30.040 --> 0:02:31.920 a slow year for them. It's probably going to be 0:02:31.960 --> 0:02:34.520 another slow year next year. So Apple has to come 0:02:34.560 --> 0:02:37.760 out but in June when they do their developer conference 0:02:38.120 --> 0:02:41.880 and put some fresh I would say air or life 0:02:41.880 --> 0:02:44.200 into the company by saying that, Okay, we do have 0:02:44.240 --> 0:02:46.800 a generative AI strategy and this is how we are 0:02:47.400 --> 0:02:49.880 thinking of achieving it. I think other than that, it's 0:02:49.880 --> 0:02:53.400 going to be a be a difficult year for them. 0:02:54.080 --> 0:02:56.520 I think this June conference that you reference on Oki 0:02:56.560 --> 0:02:58.680 it's usually the conference maybe where they introduce a new 0:02:58.720 --> 0:03:01.359 cool product or something like that. But I feels like 0:03:01.440 --> 0:03:04.119 the pressure on the company this year is as great 0:03:04.120 --> 0:03:06.120 as I can ever remember it because they're either going 0:03:06.200 --> 0:03:08.680 to come out with something really cool as it relates 0:03:08.720 --> 0:03:10.840 to AI, or they're just going to come out and 0:03:10.880 --> 0:03:12.840 say no, we're not rushing into it, in which case 0:03:12.880 --> 0:03:15.960 the stock is going to presumably, you know, be challenging. 0:03:16.000 --> 0:03:17.080 What do you think is going to happen? 0:03:18.000 --> 0:03:19.880 Yeah, the June conference is going to be a lot 0:03:19.880 --> 0:03:23.320 of the software updates the Worldwide Developer Conference, and you 0:03:23.400 --> 0:03:25.640 do give you know, they are bound to give a 0:03:25.680 --> 0:03:28.400 lot more detail about what are the five, six, seven 0:03:28.440 --> 0:03:30.800 things that they're going to be updating on their software 0:03:30.960 --> 0:03:34.360 that has more Generator VII capabilities. I think it's not 0:03:34.440 --> 0:03:37.080 going to be that big just because these things take time. 0:03:37.440 --> 0:03:39.680 We just heard from Mark them and you know, not 0:03:39.880 --> 0:03:42.320 that long ago that they're shutting down the car and 0:03:42.480 --> 0:03:47.040 allocating that headcount to generative AI. But you know, it's 0:03:47.120 --> 0:03:48.480 what are you going to do in three months? I 0:03:48.480 --> 0:03:50.040 think it's going to be a little longer than that. 0:03:50.080 --> 0:03:53.080 They're going to make some promises, but frankly speaking, I mean, 0:03:53.120 --> 0:03:57.920 they do have a distribution network, so you know, maybe 0:03:58.040 --> 0:04:01.240 maybe we should give them some some points at this 0:04:01.280 --> 0:04:03.520 point to see if they can pull this off. It's 0:04:03.560 --> 0:04:05.800 going to lead to an iPhone refash cycle that we 0:04:05.840 --> 0:04:08.880 haven't seen before, but I think, but you know, I'm 0:04:08.880 --> 0:04:10.600 not betting on anything big at this point. 0:04:12.560 --> 0:04:14.600 So go to the AI strategy. If you had to 0:04:14.720 --> 0:04:18.320 articulate what Apple's AI strategy is, what would you say. 0:04:18.880 --> 0:04:21.120 Yeah, so let's think about all the different things that 0:04:21.160 --> 0:04:23.840 we do on our phone. So for example, City by itself, 0:04:24.520 --> 0:04:27.000 you know, could be far more sophisticated than what it 0:04:27.080 --> 0:04:30.520 is today. Imagine what all different things you can do 0:04:30.600 --> 0:04:33.880 with open AI or check GPT. Imagine if you could 0:04:33.880 --> 0:04:37.039 do that just on the phone itself without having to 0:04:37.320 --> 0:04:40.159 go to a third party and do it now. Apple 0:04:40.240 --> 0:04:43.080 has the whereworth in terms of dollars to do it, 0:04:43.279 --> 0:04:46.000 whether they actually have the capacity from a technology point 0:04:46.040 --> 0:04:48.280 of view, If they can embed a lot of those 0:04:48.320 --> 0:04:50.640 features like you asking a question to your phone and 0:04:50.680 --> 0:04:54.039 you getting the answer right there, they have the distribution 0:04:54.120 --> 0:04:57.440 network of over one billion connected devices, then what happens 0:04:57.520 --> 0:04:59.120 is you don't really need to go into an app 0:04:59.120 --> 0:05:01.240 to do a lot of that stuff. We also heard 0:05:01.279 --> 0:05:03.560 that they're going to develop a software that can write 0:05:03.560 --> 0:05:06.039 itself a little quicker. That's not going to help a 0:05:06.080 --> 0:05:08.560 consumer as much that they're going to help more developers. 0:05:08.920 --> 0:05:10.760 But you know, the thing that we want to see 0:05:10.839 --> 0:05:13.680 is what can be done on the phone itself that 0:05:13.720 --> 0:05:16.120 would force me not to tap into an app and 0:05:16.160 --> 0:05:20.320 I can get those answers immediately, And. 0:05:20.560 --> 0:05:23.960 That to me seems like something that Apple can absolutely do. 0:05:24.200 --> 0:05:27.240 If I were a long term investor, should I be 0:05:27.279 --> 0:05:32.400 buying the stock here. I mean, Ai, I'm going to 0:05:32.440 --> 0:05:33.919 get a monster bumped. 0:05:33.600 --> 0:05:34.240 In the multiple. 0:05:35.120 --> 0:05:39.039 I am absolutely on the same camp with you, you 0:05:39.080 --> 0:05:41.480 know at this point, Paul. But frankly, they have to 0:05:41.520 --> 0:05:44.640 prove it. Right now, things haven't worked for them in 0:05:44.760 --> 0:05:47.000 terms of, you know, the being on the edge of 0:05:47.040 --> 0:05:50.440 any technology at this point, so I think they have 0:05:50.520 --> 0:05:52.480 to prove it in order to get it. Remember, they 0:05:52.520 --> 0:05:55.880 have over eight hundred million phones that people have in 0:05:55.920 --> 0:06:00.440 their hand in terms of the cellular connection, so at 0:06:00.480 --> 0:06:02.640 any given year they sell roughly about two hundred and 0:06:02.640 --> 0:06:06.520 twenty million phones. If this thing really takes off, there 0:06:06.560 --> 0:06:09.040 are over forty percent of phones that are iPhone twelve 0:06:09.160 --> 0:06:12.839 and below or that is very low processing power, low memory, 0:06:13.440 --> 0:06:16.120 a lot that gets upgraded and that leads to a 0:06:16.200 --> 0:06:19.120 next big you know, cycle and iPhone. I think that 0:06:19.279 --> 0:06:22.440 can be done, but I think they'll have to prove it. Remember, 0:06:22.760 --> 0:06:25.080 for a company that grows that two to five percent, 0:06:25.279 --> 0:06:27.640 they're still trading at like twenty five times earning, So 0:06:27.680 --> 0:06:30.000 it's not it's not cheap from even you know, that 0:06:30.080 --> 0:06:30.720 point of view. 0:06:32.360 --> 0:06:34.800 But Anuraga, I thought that Apple wanted to eventually become 0:06:35.520 --> 0:06:38.200 primarily services revenue, Like, they didn't want to be dependent 0:06:38.240 --> 0:06:41.039 on hardware. They wanted to have people pay them stuff 0:06:41.080 --> 0:06:43.280 on like a monthly or yearly basis. How would that 0:06:43.360 --> 0:06:46.080 AI integration do that? 0:06:47.480 --> 0:06:50.360 So the services revenue is an important piece, but it's 0:06:50.440 --> 0:06:53.240 nothing without the hardware. You have to have the hardware 0:06:53.279 --> 0:06:53.760 to get there. 0:06:53.720 --> 0:06:55.159 Right, But don't they want it to be Don't they 0:06:55.200 --> 0:06:56.920 want it to be about that and not the hardware. 0:06:57.960 --> 0:07:00.119 Yeah? Yeah, But at the same time, you know, if 0:07:00.160 --> 0:07:03.000 you are able to drive these higher value services, your 0:07:03.040 --> 0:07:06.839 ecosystem becomes stronger. People who have these older iPhones, let's 0:07:06.839 --> 0:07:09.080 say four years old, five years old, six years old, 0:07:09.240 --> 0:07:11.280 you're not going to be able to run those operations 0:07:11.280 --> 0:07:13.040 on it because it's going to be either too slow 0:07:13.240 --> 0:07:15.200 or your battery is going to die around very quickly. 0:07:15.320 --> 0:07:17.720 So you need to upgrade the hardware. Now I just 0:07:17.760 --> 0:07:20.560 talked about iPhones, but you can extend that to iPads, 0:07:20.760 --> 0:07:24.200 to watches, to any other product that they have. It 0:07:24.280 --> 0:07:27.400 is the critical portion of it. Anybody who controls a 0:07:27.520 --> 0:07:30.920 large portion of these large language models will have an 0:07:31.000 --> 0:07:32.800 edge down the road. So they really want to be 0:07:32.840 --> 0:07:35.160 a player in that market. You don't want to be 0:07:35.240 --> 0:07:36.120 left behind. 0:07:38.400 --> 0:07:40.560 So let's just go back to where we started here, 0:07:40.600 --> 0:07:43.360 which is some of the regulatory issues. Is this like 0:07:43.720 --> 0:07:47.400 twenty five years ago when the EU came after Microsoft 0:07:47.440 --> 0:07:49.400 for Windows and bundling all that stuff and they just 0:07:49.480 --> 0:07:51.720 kind of write some checks and you go away. Or 0:07:51.760 --> 0:07:54.760 is this something more of a challenge, more of a 0:07:54.800 --> 0:07:56.280 headwind for Apple do you think? 0:07:57.320 --> 0:07:58.960 I think it's more of a headline risk for the 0:07:59.040 --> 0:08:01.160 next several years. A lot of these things is not 0:08:01.200 --> 0:08:03.720 going to be just you know, they can't go out 0:08:03.760 --> 0:08:06.360 and tell them to reduce these fees. But having said that, 0:08:06.400 --> 0:08:08.000 there is going to be an overhang of the stock. 0:08:08.120 --> 0:08:10.440 But we think that they can do so much. They 0:08:10.440 --> 0:08:13.560 can really boost the advertising revenue that they really haven't 0:08:13.640 --> 0:08:16.360 played that lever. They can take iCloud pricing up, they 0:08:16.360 --> 0:08:18.680 can do Apple Care. I mean, Apple has a lot 0:08:18.720 --> 0:08:21.960 of levers to pull, and it's going to be interesting 0:08:22.000 --> 0:08:25.080 to see how different governments around the world approach this 0:08:25.160 --> 0:08:28.239 issue because Apple, I mean, they wrote a phenomenal piece 0:08:28.240 --> 0:08:33.400 today about fighting this particular you know, they're fine. I 0:08:33.440 --> 0:08:36.200 think if you read that the entire piece as it 0:08:36.240 --> 0:08:38.720 relates to Spotify, I think they make a very good 0:08:38.760 --> 0:08:41.959 case of why their ecosystem is important for developers and 0:08:42.000 --> 0:08:45.040 why they should have you know, at least some you know, 0:08:45.600 --> 0:08:47.719 you know, skin in the game in terms of what 0:08:47.760 --> 0:08:49.600 they bring to the party. 0:08:50.920 --> 0:08:53.240 All Right, Honor Rock, thanks so much. We super appreciate it. 0:08:53.320 --> 0:08:54.920 The best person to go to when it comes to Apple. 0:08:54.960 --> 0:08:56.480 I should I have an iPhone fourteen? 0:08:56.559 --> 0:08:56.959 I forgot? 0:08:57.400 --> 0:08:57.679 Really? 0:08:57.760 --> 0:09:01.280 Yeah? Yeah, yeah, I eleven switched my switch from Verizon 0:09:01.280 --> 0:09:02.920 to T Mobile. I got a free phone. 0:09:02.960 --> 0:09:05.640 And how's upen, Oh, it's okay. 0:09:05.760 --> 0:09:08.560 The Wi Fi is a lot better, really, yes, but 0:09:08.720 --> 0:09:11.960 sometimes about the Wi Fi, it's a little Spottierka, It's interesting. 0:09:12.040 --> 0:09:14.719 It's interesting little trade off there. On Magrana joining us 0:09:14.840 --> 0:09:17.840 Bloomberg Intelligence a senior technology analyst. 0:09:18.960 --> 0:09:22.840 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:09:22.920 --> 0:09:26.440 weekdays at ten am Eastern on applecar Play and Android 0:09:26.480 --> 0:09:29.240 Auto with the Bloomberg Business app. You can also listen 0:09:29.360 --> 0:09:32.480 live on Amazon Alexa from our flagship New York station 0:09:32.840 --> 0:09:36.640 Just say Alexa playing Bloomberg eleven thirty. 0:09:36.640 --> 0:09:38.600 It's Alex Steels pulsewhen you We're live here at the 0:09:38.600 --> 0:09:42.600 New Jersey Institute of Technology here in Newark, New Jersey, 0:09:42.679 --> 0:09:44.400 and we're also on that YouTube things ahead over to 0:09:44.440 --> 0:09:48.720 YouTube dot com search a Bloomberg I think Yank Bloomberg Radio, 0:09:48.720 --> 0:09:50.280 Bloomberg Podcast of all things. 0:09:50.280 --> 0:09:51.440 I'll tell you know you've made it. 0:09:51.480 --> 0:09:55.080 When Donna Russo was in the house bringing it here, 0:09:55.160 --> 0:09:57.360 she's kind of running everything over here. So we appreciate 0:09:57.679 --> 0:10:00.840 don having us over here. Let's talk AI. Michael Johnson 0:10:00.880 --> 0:10:05.000 joint Is. He's the president of New Jersey Innovation Institute. Michael, 0:10:05.000 --> 0:10:07.320 thanks so much for joining us here. What is the 0:10:07.400 --> 0:10:09.439 New Jersey Innovation Institute. 0:10:09.559 --> 0:10:12.240 It's a great question. So in the US, we have 0:10:12.280 --> 0:10:15.160 lots of research universities and there's lots of smart people, 0:10:15.280 --> 0:10:19.320 lots of great resources, but there's this fundamental problem in academia, 0:10:19.360 --> 0:10:21.480 which is it's tough for the outside world actually leverage 0:10:21.480 --> 0:10:25.120 those resources. So for governmental organizations, for industry, they want 0:10:25.160 --> 0:10:27.680 access to the cutting edge of AI, for example, but 0:10:27.720 --> 0:10:29.800 it's tough for them to actually make those connections and 0:10:29.800 --> 0:10:33.280 interact with faculty. So NJI is an organization. It's a 0:10:33.360 --> 0:10:36.080 five oh one C three wholly owned by NNGT, and 0:10:36.120 --> 0:10:38.600 the idea is that we are a standalone corporation that's 0:10:38.600 --> 0:10:41.880 a conduit between the outside world and NGT. So we 0:10:41.960 --> 0:10:45.080 make those facilitations, we create unique business models to work 0:10:45.080 --> 0:10:49.160 with faculty, and we're a quick moving organization, unlike academia, 0:10:49.200 --> 0:10:50.880 which is you know, tends to be slower and more 0:10:50.960 --> 0:10:53.240 difficult to work with. So we're that conduit between them 0:10:53.280 --> 0:10:55.400 the outside world and roughly have about one hundred and 0:10:55.440 --> 0:10:58.320 twenty folks out of organization and we're focused on that can. 0:10:58.240 --> 0:10:59.760 Just say it's really cool his three year old son, 0:10:59.800 --> 0:11:02.760 is he? I mean, what three year old is going 0:11:02.800 --> 0:11:04.680 to come and talk about AI? I feel like that 0:11:04.800 --> 0:11:06.640 just says it all at the end of the day, right, 0:11:06.840 --> 0:11:09.280 that is the future. So am I a company that 0:11:09.360 --> 0:11:11.080 goes to you and then you pair me up with 0:11:11.120 --> 0:11:13.720 something or is it sort of the technology that you're evolving, 0:11:13.720 --> 0:11:15.280 and then you go pitch it to companies. How does 0:11:15.280 --> 0:11:15.680 that work? 0:11:15.760 --> 0:11:17.560 It's a bit of inside out and outside in. So 0:11:17.600 --> 0:11:19.240 we can go to corporations and try and find out 0:11:19.240 --> 0:11:21.199 what their problems are, what their pain points are, and 0:11:21.200 --> 0:11:23.320 then go and find faculty you can help out. Or 0:11:23.360 --> 0:11:25.000 we might have a few faculty that have a very 0:11:25.040 --> 0:11:27.160 specific problem. They need access to software, they need to 0:11:27.200 --> 0:11:29.599 access the resources, and we go externally and find a 0:11:29.640 --> 0:11:31.760 way to work with corporations on that, but it's pairing 0:11:31.800 --> 0:11:34.640 the two with each other. And faculty are really smart, 0:11:34.640 --> 0:11:36.640 they're really focused on their research, but they don't always 0:11:36.679 --> 0:11:38.360 have the mind to go out and actually execute on 0:11:38.440 --> 0:11:41.280 consultant type projects for industry. So we help form that 0:11:41.320 --> 0:11:43.560 framework and along the way, we're trying to help with 0:11:43.640 --> 0:11:46.480 tech transfers. So getting technology out of the university into 0:11:46.480 --> 0:11:49.040 products and services was always a pain point, and also 0:11:49.120 --> 0:11:53.040 just generally accelerating innovation and also helping upskilled workers. 0:11:53.640 --> 0:11:56.400 You know, over the last several quarters, Bloomberg does this analysis. 0:11:56.400 --> 0:11:59.640 It shows you know, what are companies talking about on 0:11:59.679 --> 0:12:02.280 their totally conference calls, And for the last several quarters, 0:12:02.520 --> 0:12:04.760 every single company in Y S and P five hundred 0:12:04.920 --> 0:12:07.880 has talked about AI, with the exception of Apple last 0:12:07.920 --> 0:12:10.240 quarter and I mentioned AI, which is interesting. 0:12:10.280 --> 0:12:11.680 What a company that's not doing? Now? 0:12:11.800 --> 0:12:16.400 Yeah, what are companies most commonly asking you for help with? 0:12:17.360 --> 0:12:17.560 Oh? 0:12:17.600 --> 0:12:19.880 Man, that goes all over the place. It depends in 0:12:19.880 --> 0:12:21.880 the companies. We have some small mom and pop businesses 0:12:21.920 --> 0:12:25.200 that just want help with trying to move towards technology. 0:12:24.640 --> 0:12:25.479 Towards computers. 0:12:25.720 --> 0:12:27.280 We have other companies, for example, that want to be 0:12:27.320 --> 0:12:30.200 the bleeding edge of some sword and fields. So for example, 0:12:30.200 --> 0:12:32.440 it might be life sciences, it might be AI for example, 0:12:32.679 --> 0:12:35.000 and they're asking us to help improve something that they're 0:12:35.000 --> 0:12:37.280 already doing, or it's a very specific project they're pushing 0:12:37.360 --> 0:12:39.400 us to find faculty to help out with. So it 0:12:39.440 --> 0:12:42.480 kind of depends. We have other folks. For example, Picatinny 0:12:42.600 --> 0:12:45.000 Arsenal and Department of Defense are looking for just workers, 0:12:45.200 --> 0:12:48.200 so helping us upscale workers for advanced manufacturing and all 0:12:48.240 --> 0:12:50.520 sorts of different programs they need help finding talent for 0:12:50.679 --> 0:12:52.080 so we're trying to help that with that as well. 0:12:52.280 --> 0:12:53.760 So JPM, we're going to know if you saw this, 0:12:54.080 --> 0:12:56.080 they had a great piece out that said that some 0:12:56.120 --> 0:12:59.199 of its corporate customers are slashing manual work by almost 0:12:59.320 --> 0:13:03.520 ninety percent with its cash flow management tool that runs 0:13:03.559 --> 0:13:06.760 on AI. And that's the fear, right that we're going 0:13:06.760 --> 0:13:08.560 to use AI and replace all the workers and those 0:13:08.600 --> 0:13:10.880 workers don't have any jobs. Is there any truth to that? 0:13:11.679 --> 0:13:14.200 It's a great question. So whenever you have technologies, they 0:13:14.200 --> 0:13:16.480 are disruptive, there are going to be jobs certainly that 0:13:16.520 --> 0:13:18.160 are going to go away. But if you look back 0:13:18.160 --> 0:13:20.679 to when Excel first came out, or when computers first 0:13:20.720 --> 0:13:22.760 came out. You look at accounting as a great use case. 0:13:23.080 --> 0:13:25.560 Accountants didn't go away because we were going from a 0:13:25.640 --> 0:13:27.720 ledger that was literally on paper to a computer based system. 0:13:27.760 --> 0:13:29.520 We found new questions to answer, new ways that we 0:13:29.520 --> 0:13:31.359 could look at our accounting and finances. 0:13:31.600 --> 0:13:32.199 So I think the. 0:13:32.240 --> 0:13:34.520 Jobs are going to change, But the overall number of 0:13:34.600 --> 0:13:36.679 jobs in that net, I don't know if it will 0:13:36.720 --> 0:13:39.160 actually reduce. It might increase in some cases. But we're 0:13:39.160 --> 0:13:41.200 going to answer different questions. We're going to do things 0:13:41.280 --> 0:13:43.079 much more quickly than we did in the past, for sure. 0:13:43.679 --> 0:13:46.880 You know, I guess my I guess my lack of 0:13:46.920 --> 0:13:49.240 knowledge of full appreciation of AIS is. I'm just not 0:13:49.280 --> 0:13:51.760 sure if it's something completely new or is it just 0:13:51.800 --> 0:13:55.199 the next next iteration of what the smart people NJIT 0:13:55.840 --> 0:13:59.160 typically do. Is I'm just not sure what's new about 0:13:59.160 --> 0:14:02.199 it other than man, everybody's talking about it. And it 0:14:02.360 --> 0:14:05.240 was a theme for Why the Stock One of the 0:14:05.240 --> 0:14:07.360 themes that drove the stock market in twenty twenty three 0:14:07.640 --> 0:14:09.680 was a concept of AI and the average trader across 0:14:10.200 --> 0:14:12.960 the river in New York has no idea what AI is, 0:14:13.040 --> 0:14:15.320 but he's buying stocks because he thinks they're an AI play. 0:14:15.480 --> 0:14:18.120 It's been around for decades, right, but we have a 0:14:18.120 --> 0:14:19.720 couple of technology that came out in the last two 0:14:19.760 --> 0:14:21.760 years that have really transformed the way we see AI. 0:14:21.800 --> 0:14:23.280 And while we're talking about we were talking about it 0:14:23.360 --> 0:14:25.960 last night at my family's Sunday dinner, and the reason 0:14:26.040 --> 0:14:29.040 is because now it's accessible. So, for example, two years ago, 0:14:29.040 --> 0:14:30.520 if I go into Google and I type how do 0:14:30.600 --> 0:14:33.120 I make chicken Palm? I got all these ads, I 0:14:33.160 --> 0:14:35.080 get all these things that tell me about chicken parm. 0:14:35.080 --> 0:14:36.560 I go in to chat ept and I typed that 0:14:36.600 --> 0:14:38.280 for example, and I got a perfect recipe on how 0:14:38.320 --> 0:14:41.200 to actually make that, so it becomes very accessible to anyone. 0:14:41.240 --> 0:14:43.040 And I think that go to market strategy. The open 0:14:43.120 --> 0:14:45.960 I had of making accessible is what really changed the game. 0:14:46.280 --> 0:14:49.160 And also the same time computing power is exponentially increasing, 0:14:49.240 --> 0:14:51.840 it's more accessible. We're now able to use it everywhere 0:14:51.880 --> 0:14:54.000 from making chicken palm to try and do research. 0:14:54.520 --> 0:14:56.480 So what kind of cool stuff are you guys working 0:14:56.520 --> 0:14:58.320 on right now? Like, what were you most excited about? 0:14:58.720 --> 0:14:59.200 For us? 0:14:59.280 --> 0:15:01.400 As ANGI, what we're very focused on is trying to 0:15:01.440 --> 0:15:03.400 get things out of the university into the real world. 0:15:03.520 --> 0:15:06.200 And one specific project that we're working on is actually 0:15:06.200 --> 0:15:09.200 on law enforcement and body cams. So bodycams is there 0:15:09.240 --> 0:15:12.200 a sensor that generates a huge amount of data, and 0:15:12.320 --> 0:15:15.000 from those those data sets, we're usually looking at them 0:15:15.440 --> 0:15:17.640 after the fact, so after something bad happens, we're trying 0:15:17.640 --> 0:15:20.160 to review that situation. What we're trying to do is 0:15:20.160 --> 0:15:22.560 can we look at that data and predict something bad 0:15:22.640 --> 0:15:24.480 is going to happen before it happens. So if we 0:15:24.520 --> 0:15:28.080 see a pattern between some behaviors, running back time for a. 0:15:28.000 --> 0:15:30.440 Second, so you have a buye So you're tracking behavior 0:15:30.520 --> 0:15:32.720 to then model behavior later. 0:15:33.480 --> 0:15:35.560 Yes, So for example, let's say we see an officer 0:15:35.640 --> 0:15:38.560 is running more frequently, they're yelling more frequently. That is 0:15:38.560 --> 0:15:41.560 probably correlated to some behavior outcomes such as excessive use 0:15:41.600 --> 0:15:44.240 of force. So for example, we might identify this officer 0:15:44.280 --> 0:15:46.160 as at a much higher likelihood of excessive use of 0:15:46.240 --> 0:15:48.520 force in the future. Let's intervene and get them training 0:15:48.520 --> 0:15:50.840 before something bad happens. So we're trying to build that 0:15:50.880 --> 0:15:53.800 a software we can actually put onto the hardware and 0:15:53.840 --> 0:15:56.640 help with law enforcement and help with de escalating situations. 0:15:56.680 --> 0:16:00.640 Wow, that's really cool. What other stuff like, what are 0:16:00.680 --> 0:16:03.160 the thing you excited about Oh man, there's so many 0:16:03.760 --> 0:16:04.560 we'll think your second best. 0:16:04.880 --> 0:16:07.000 My second best would definitely be in the drone space. 0:16:07.080 --> 0:16:09.680 So drones are another sensor. We're collecting huge amounts of 0:16:09.720 --> 0:16:11.720 imagery data, and today a lot of that work is 0:16:11.720 --> 0:16:14.280 actually a person looking at videos, scrolling through video like 0:16:14.280 --> 0:16:16.560 you would from a VHS tape, and we're using computer 0:16:16.640 --> 0:16:19.440 vision and AI to actually analyze that data and try 0:16:19.440 --> 0:16:22.000 to predict what's happening, try to classify certain imagery and 0:16:22.000 --> 0:16:24.760 answer very specific questions like is a power line going 0:16:24.760 --> 0:16:27.240 to fail based upon a single picture from a simple drone? 0:16:27.280 --> 0:16:29.000 Oh, now that could be really helpful depually all the 0:16:29.000 --> 0:16:31.360 wildfires and stuff that we've had. And then as all 0:16:31.360 --> 0:16:34.000 the utilities are kind of grappling with like old infrastructure 0:16:34.080 --> 0:16:35.800 that is not easy to replace, kind of how you 0:16:35.840 --> 0:16:40.480 manage that? Is it expensive for these companies to use this? 0:16:41.280 --> 0:16:44.240 Usually the bottleneck today is data generation and data annotation 0:16:44.360 --> 0:16:46.240 because there's lots of data, but we have to annotate 0:16:46.240 --> 0:16:48.400 the data to be actually able to use it. So, 0:16:48.440 --> 0:16:50.360 for example, with the body cams, we have to know 0:16:50.400 --> 0:16:52.640 what those events are that we're trying to predict and 0:16:52.680 --> 0:16:54.840 actually classifying them ahead of time. So that's the real 0:16:54.960 --> 0:16:56.480 the bottleneck for it in a lot of cases. 0:16:57.320 --> 0:16:59.360 All right, Michael, thanks so much. It was really great. 0:16:59.360 --> 0:17:01.080 This is really fun. Get your perspective. Is your son 0:17:01.120 --> 0:17:01.640 gonna stay. 0:17:01.520 --> 0:17:02.880 Or is he gonna he's don't listen all day? 0:17:03.600 --> 0:17:07.320 Well, awesome, we like that future generation. Michael Johnson, president 0:17:07.359 --> 0:17:11.560 of New Jersey Innovation Institute, and Ji, I thanks very much. 0:17:11.600 --> 0:17:14.439 It was really great to get that perspective. That's really interesting. 0:17:14.480 --> 0:17:19.040 I think the bodycam situation too, like it's not a 0:17:19.080 --> 0:17:21.320 profiling and profiling thing. It's like you're gonna get the 0:17:21.320 --> 0:17:23.560 help that you need down the road, which I think 0:17:23.640 --> 0:17:25.320 is really cool. And it's good to hear these actual 0:17:25.440 --> 0:17:27.840 use cases because it's easy to just say AI is cool, 0:17:27.920 --> 0:17:29.560 is going to do stuff, But to get an actual 0:17:29.640 --> 0:17:32.119 use case that you can do is quite interesting. 0:17:32.200 --> 0:17:32.920 Yeah. Absolutely. 0:17:35.320 --> 0:17:39.200 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:17:39.280 --> 0:17:42.000 weekdays at ten am Eastern on Apple card Playing and 0:17:42.119 --> 0:17:45.000 broid Otto with the Bloomberg Business app. Listen on demand 0:17:45.040 --> 0:17:49.320 wherever you get your podcasts, or watch us live on YouTube. 0:17:50.000 --> 0:17:52.159 Paul and I are here broadcasting live from the campus 0:17:52.160 --> 0:17:54.840 of the New Jersey Institute of Technology n J. It 0:17:55.000 --> 0:17:57.000 where we're talking about all things AI and sort of 0:17:57.000 --> 0:18:00.000 how you create the thing and then move it outside 0:18:00.200 --> 0:18:02.200