WEBVTT - FOMC Rate Decision and VC Interest in AI 0:00:01.400 --> 0:00:06.720 From Marhart where Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.280 --> 0:00:28.280 I'm Caroline Hyde at Bloomberg's World headquarters in New York. 0:00:28.440 --> 0:00:31.160 And I'm Ed Ludlow in San Francisco. This is Bloomberg 0:00:31.200 --> 0:00:32.360 Technology coming up. 0:00:32.440 --> 0:00:35.280 We count you down to the FED rate decision and 0:00:35.680 --> 0:00:37.720 get a real look of you on the state of 0:00:37.800 --> 0:00:40.479 the banking system and the FinTechs have helped speed up 0:00:40.520 --> 0:00:42.880 deposit flight adding to crisis concerns. 0:00:43.760 --> 0:00:45.479 We're going to dive deep into the world at Venture 0:00:45.479 --> 0:00:49.040 Capital and speak with Sequoia general partner Constantine Beula and 0:00:49.120 --> 0:00:51.280 Coastladventures founder Vinode Coastler. 0:00:51.560 --> 0:00:55.880 Plus how malware operators are caching in on the AI height. 0:00:55.880 --> 0:00:57.320 To target your businesses. 0:00:57.680 --> 0:01:00.400 We'll talk CHATCHYPT and cybersecurity with let Us. 0:01:00.360 --> 0:01:02.320 Head of Security later this hour. 0:01:02.760 --> 0:01:04.920 Let's turn towards, of course, what else the Federal Reserve 0:01:04.959 --> 0:01:06.920 is really trying to navigate how you can hight rates 0:01:06.920 --> 0:01:10.000 amid what is an ongoing banking crisis in part brought 0:01:10.000 --> 0:01:13.320 through of course higher interest rates. Also, though, is there 0:01:13.360 --> 0:01:15.520 a bit of an acceleration of some of these crises 0:01:15.800 --> 0:01:17.800 because of the ease with which we can pull cash 0:01:17.880 --> 0:01:20.080 out of our deposits. Joining us now to discuss all 0:01:20.120 --> 0:01:22.800 of this cannis known us OURGP management consultant. 0:01:22.880 --> 0:01:23.319 You've got what. 0:01:23.360 --> 0:01:26.760 Sixteen years in career of risk management, you worked at 0:01:26.800 --> 0:01:29.160 the FDIC. Canis I put it to you of how 0:01:29.240 --> 0:01:32.800 much of a worry is at the moment fintech is 0:01:32.840 --> 0:01:36.880 the ability with which we can withdraw our deposits from banks. 0:01:36.920 --> 0:01:38.760 Does that sort of speed up some of the anxiety 0:01:38.800 --> 0:01:40.160 and the crisis cycles we're seeing? 0:01:41.319 --> 0:01:45.479 Yeah, thanks for having me. It certainly plays a role. 0:01:46.240 --> 0:01:49.920 I think we have fintech technology to pull out our 0:01:50.400 --> 0:01:53.680 deposits very quickly. But what really is the problem with 0:01:53.840 --> 0:01:59.520 this particular banking crisis is the high concentration of uninsured 0:01:59.560 --> 0:02:03.840 deposits we have banks. Silicon Valley Bank had over ninety 0:02:03.880 --> 0:02:08.360 percent exposure to uninsured deposits. And by their very nature, 0:02:08.480 --> 0:02:13.320 uninsured deposits are not sensitive to the FED insurance, the 0:02:13.360 --> 0:02:18.000 FDIC insurance. Rather, they're very opportunistic, so they move fast 0:02:18.480 --> 0:02:21.640 on to a better opportunity, or they get spooked, and 0:02:21.680 --> 0:02:23.920 they kind of all move in tandem. And that's what 0:02:23.960 --> 0:02:27.080 we saw in this most recent banking crisis. 0:02:27.120 --> 0:02:30.840 Are you expecting a change to whether all deposits end 0:02:30.880 --> 0:02:32.440 up being ensured by the FDIC. 0:02:34.080 --> 0:02:36.960 Well, if all deposits end up being insured by the FDIC, 0:02:37.240 --> 0:02:41.119 that means that the FDIC bank fees. The fees that 0:02:41.440 --> 0:02:44.960 the FDIC charges for deposit insurance is going to have 0:02:45.120 --> 0:02:48.400 to increase and is going to have to be distributed 0:02:48.480 --> 0:02:53.239 differently among banks. I mean, I suppose that's an option, 0:02:53.720 --> 0:02:56.920 but I think that there are so many more prudent 0:02:56.960 --> 0:03:01.359 decisions that can be made beforehand to improve revision, including 0:03:01.400 --> 0:03:05.040 the use of technology and supervision, such that we don't 0:03:05.040 --> 0:03:08.040 have to ensure all deposits. It kind of really doesn't 0:03:08.120 --> 0:03:10.639 make sense when there are so many other interim things 0:03:10.680 --> 0:03:11.400 that you can do. 0:03:11.800 --> 0:03:12.880 The regulators can do. 0:03:12.919 --> 0:03:15.079 And if you've read their most recent reports by both 0:03:15.120 --> 0:03:18.360 the FED and the FDIC, they admitted their shortfalls. They 0:03:18.360 --> 0:03:20.560 admitted their short but I think that that can be 0:03:20.600 --> 0:03:24.480 ameliorated with the use of technology, among other things. 0:03:24.480 --> 0:03:26.760 Interesting ed almost technology at the heart of this, but 0:03:26.800 --> 0:03:28.560 also what's at the heart is the fact that we 0:03:28.600 --> 0:03:32.640 have neobanks fintech able to offer higher returns. ED to 0:03:32.639 --> 0:03:34.239 that extent, we're seeing a bit of a stampede. It 0:03:34.320 --> 0:03:35.200 keeps being the watchword. 0:03:36.080 --> 0:03:39.160 Yeah, stampede or herd mentality. I mean, kend this. I 0:03:39.200 --> 0:03:41.400 go back to what happened with SVB and more recently 0:03:41.400 --> 0:03:45.040 with First Republic, that it's an issue of confidence, right, 0:03:45.120 --> 0:03:49.240 Depositors lose confidence and pull their money. The point that 0:03:49.320 --> 0:03:51.560 Caroline raised this morning is so smart that now you 0:03:51.640 --> 0:03:56.200 have so many means technologically speaking to transfer funds. I 0:03:56.280 --> 0:03:58.600 just want you to try and give us some granularity 0:03:58.680 --> 0:04:01.840 on how much that has changed the game. How much 0:04:01.960 --> 0:04:04.560 is contributed through the risk of a bank run. 0:04:05.960 --> 0:04:08.240 Oh, I think it's contributed greatly to the risk. I 0:04:08.280 --> 0:04:10.360 mean you can have a bank run from your cell phone, 0:04:10.360 --> 0:04:13.320 as kind of what you're suggesting. Back in the olden days, 0:04:13.360 --> 0:04:15.600 people stood in line and waited for the banks to 0:04:15.680 --> 0:04:18.400 open in order to pull out their physical cash. Now 0:04:18.440 --> 0:04:20.680 you can have a bank run from your living room. 0:04:21.160 --> 0:04:24.320 So I don't think payments are not going to slow down. 0:04:24.360 --> 0:04:28.919 Payment technology, fintech technology, that's not going to slow down. 0:04:29.320 --> 0:04:32.200 I think as a result of that, risk managers need 0:04:32.240 --> 0:04:36.160 to be more prudent with regard to their concentration and 0:04:36.200 --> 0:04:40.600 their distribution to exposures of things like uninsured deposits, so 0:04:41.080 --> 0:04:43.640 you're going to continue to have advances and payments. I 0:04:43.640 --> 0:04:46.520 think they're healthy for the economy in a lot of ways. 0:04:46.560 --> 0:04:50.880 They make our lives as consumers very convenient. But that's 0:04:50.960 --> 0:04:53.560 not going to change, and we're still going to be 0:04:53.600 --> 0:04:57.080 exposed to the risk of rapid withdrawals from bank and 0:04:57.160 --> 0:05:00.280 financial institutions, given our ease with which we can do it. 0:05:00.520 --> 0:05:03.880 Candice, what have you been advising your clients since Silicon 0:05:04.000 --> 0:05:07.320 Valley collapse, since First Republic was acquired by JP Morgan. 0:05:07.400 --> 0:05:10.600 What have you told them to do from a tech perspective. 0:05:11.680 --> 0:05:15.320 Yeah, I think that you know, this is unlike our 0:05:15.440 --> 0:05:18.320 last crisis, where it was a credit crisis. This is 0:05:18.400 --> 0:05:23.120 an asset liability mismatch. And we always advise our clients 0:05:24.000 --> 0:05:27.080 even despite this, and admittedly we've worked with the more 0:05:27.600 --> 0:05:31.320 larger and mid size clients in my particular space, but 0:05:31.400 --> 0:05:35.200 we always advise them to stay on top of stress 0:05:35.240 --> 0:05:38.480 testing and be very prudent about managing your risk and 0:05:38.520 --> 0:05:43.360 managing your exposures to shift in the macroeconomic market. Look 0:05:43.400 --> 0:05:47.359 for macro hedges to whatever it is that you're taking 0:05:47.400 --> 0:05:51.200 exposure to. We're still giving the same good risk management 0:05:51.440 --> 0:05:55.560 advice despite what's going on here in the market, because 0:05:55.600 --> 0:05:59.920 these things were foreseen and they continue to be able 0:05:59.920 --> 0:06:02.599 to you can you can gauge them, and that's what 0:06:02.640 --> 0:06:04.479 we're revising our big clients to do. 0:06:05.680 --> 0:06:05.800 Right. 0:06:05.880 --> 0:06:08.359 Candice, knowness of our GP, thank you so much for 0:06:08.400 --> 0:06:11.320 your time. Now coming up what to make of the 0:06:11.440 --> 0:06:14.880 rapid evolution in the generative AI space, will bring you 0:06:14.920 --> 0:06:19.120 that conversation with Sequoia Capital partner an AI expert, Constantine Buler. 0:06:19.560 --> 0:06:20.200 Caroline. 0:06:20.480 --> 0:06:22.520 Yeah, and of course we have got to keep our 0:06:22.520 --> 0:06:25.400 eyes on all things chips, on all things MD. After 0:06:25.640 --> 0:06:27.719 a really tepid set of numbers coming out of what 0:06:27.839 --> 0:06:30.480 is the second biggest PC chip maker, and we know 0:06:30.560 --> 0:06:32.839 the woes, we know the concern about the PC market 0:06:32.839 --> 0:06:34.520 we saw in an Intel. We move it to AMD, 0:06:34.680 --> 0:06:37.040 but all eyes there from Qualcom after the bells, as 0:06:37.080 --> 0:06:40.280 that particular chip maker has really diversified, perhaps away. 0:06:40.000 --> 0:06:41.600 From just PCs. We're off by more than eight and 0:06:41.600 --> 0:06:42.159 a half percent. 0:06:42.360 --> 0:07:00.800 As a Bloomberg, let's talk artificial intelligence with AI. Jeffrey 0:07:00.839 --> 0:07:03.960 hidden Hinton leaving Google and adding his voice to a 0:07:04.000 --> 0:07:07.440 growing chorus of experts really warning about the dangers of AI. 0:07:07.800 --> 0:07:08.600 What does this mean? 0:07:08.720 --> 0:07:11.559 His departure for Alphabet's efforts and its Deep Mind AI 0:07:11.680 --> 0:07:14.840 lab or Deep Mind CEO Demis Hasabis sat down with 0:07:14.960 --> 0:07:17.520 Bluemberg Originals and talked about how the industry is not 0:07:17.600 --> 0:07:20.360 just losing people but also attracting a lot of talents. 0:07:20.360 --> 0:07:24.679 To take a listen, it's an incredibly dynamic field right now, 0:07:25.600 --> 0:07:29.800 all sorts of new things happening, research going on, you know, literally, 0:07:29.840 --> 0:07:31.920 I would say in the last six months, probably hundreds 0:07:31.920 --> 0:07:34.880 of thousands of people, very talented engineers and others, have 0:07:34.920 --> 0:07:38.680 got into the field. You know. I think they've come 0:07:38.720 --> 0:07:41.160 from many other fields and they've decided maybe they weren't 0:07:41.560 --> 0:07:44.280 interest in AI for long, you know, until very recently, 0:07:44.440 --> 0:07:46.360 but they've decided this is a this is a great 0:07:46.360 --> 0:07:49.600 growth point. And so that's brought in a lot of 0:07:49.720 --> 0:07:53.440 energy into the space and a lot of dynamic ideas. 0:07:53.880 --> 0:07:56.120 And so even for us, who are you know, right 0:07:56.160 --> 0:07:58.200 in the middle of it, it's hard to keep track. 0:07:58.080 --> 0:07:59.560 Of all of that at once. 0:07:59.600 --> 0:08:01.360 So you have to try and take into account and 0:08:01.840 --> 0:08:04.560 look at the main trends and the main threads and 0:08:04.680 --> 0:08:07.640 sort of focus on that. I would say, but it's 0:08:08.120 --> 0:08:10.080 almost like you need an AI system to help you 0:08:10.400 --> 0:08:12.920 keep track of all of the developments that are going on. 0:08:15.080 --> 0:08:18.040 Google deep Mind CEO Demis Hasavis and you can watch 0:08:18.200 --> 0:08:22.160 more of that interview on Bloomberg's Originals AI IRL and 0:08:22.200 --> 0:08:25.679 stream new episodes Wednesdays eight thirty pm Eastern five thirty 0:08:25.920 --> 0:08:26.640 Pacific time. 0:08:26.960 --> 0:08:27.520 Let's keep the. 0:08:27.440 --> 0:08:31.080 Conversation going about AI with Sequoia Capital partner Constantine Buler, 0:08:31.400 --> 0:08:33.720 who's been immersed in the world of AI for a 0:08:33.760 --> 0:08:36.440 decade already. We've got some catching up to do with you. 0:08:37.120 --> 0:08:39.880 That was an interesting move because the history of AI 0:08:40.280 --> 0:08:42.760 is very closely tied with deep Mind. They've kind of 0:08:42.880 --> 0:08:45.760 brought Google and deep Mind together. You heard Demis there. 0:08:45.840 --> 0:08:48.600 Can I just get your reaction to the landscape and 0:08:48.640 --> 0:08:50.400 that in particular. 0:08:50.480 --> 0:08:53.839 Absolutely, First, thanks for having us to pleasure to be 0:08:53.880 --> 0:08:57.480 here always. So we are in the middle of an 0:08:57.480 --> 0:09:01.880 incredible revolution in AI. It is probably most similar to 0:09:02.000 --> 0:09:05.560 the personal computer revolution of forty years ago, and Demis 0:09:05.679 --> 0:09:08.240 alludes to this briefly in his comment when he says 0:09:08.320 --> 0:09:10.680 we're in the middle of something very big here. Why 0:09:10.720 --> 0:09:14.160 do I say personal computer revolution because of the impact 0:09:14.160 --> 0:09:17.960 it's having. Imagine, right before the personal computer revolution, you 0:09:18.040 --> 0:09:20.679 were a typist and every time you made a mistake 0:09:20.960 --> 0:09:22.880 or you had to make a change, you'd throw away 0:09:22.880 --> 0:09:27.400 the paper. You have to put the type exactly exactly. 0:09:27.480 --> 0:09:29.480 You throw away the paper, you have to put a 0:09:29.480 --> 0:09:31.800 new one in and you have to start all over again. 0:09:32.240 --> 0:09:37.040 And then the personal computer comes around and everything is faster, 0:09:37.720 --> 0:09:42.920 it's easier, it's way more streamlined. But there are some changes, 0:09:42.960 --> 0:09:45.320 there's some retraining that needs to be done. You have 0:09:45.400 --> 0:09:48.760 to learn this new technology. Same kind of thing is 0:09:48.760 --> 0:09:53.040 happening here in AI. So there's this massive potential. We're 0:09:53.080 --> 0:09:55.400 right in the middle of it. It's been the cornerstone 0:09:55.400 --> 0:09:58.760 of my career for thirteen years. Sequoya, it's been a 0:09:58.760 --> 0:10:02.720 cornerstone for us for thirty years, and it is just 0:10:02.840 --> 0:10:05.000 the early innings of what's going to be very. 0:10:04.920 --> 0:10:06.120 Brings us to hear in now though. 0:10:06.160 --> 0:10:10.120 So you are principally a seed stage and series A investor. Yes, 0:10:10.280 --> 0:10:12.880 you know there are many that echo your sentiments. How 0:10:12.920 --> 0:10:16.200 do you actually invest? Yes in that moment. 0:10:16.760 --> 0:10:20.720 So the first thing is founder driven, Okay. 0:10:21.000 --> 0:10:24.240 Founders are always the lifeblood of the venture capital industry, 0:10:24.440 --> 0:10:27.720 the technology industry at large, and definitely the AI industry. 0:10:27.960 --> 0:10:32.400 So think back to when Sequoia started its venture in ai, 0:10:32.480 --> 0:10:35.480 which was nineteen ninety two when we backed at the 0:10:35.520 --> 0:10:39.520 Series A, the first investment in arguably, if not the 0:10:39.559 --> 0:10:43.319 most important AI hardware company in the world in Nvidia. 0:10:43.880 --> 0:10:46.880 That was a founder driven investment. That was a founder 0:10:46.960 --> 0:10:50.920 driven investment because Jensen Wang was an exceptional engineer from 0:10:50.920 --> 0:10:54.680 a previous Sequoia company, So founder driven as always with Sequoia, 0:10:54.800 --> 0:10:57.760 and then in nineteen ninety nine, arguably the most important 0:10:57.960 --> 0:11:02.360 at maturity AI company, Google was also a Sequoia investment, 0:11:02.480 --> 0:11:04.520 and that brings us all the way to today, which 0:11:04.559 --> 0:11:07.320 is a lot of great AI companies that are coming up, 0:11:07.559 --> 0:11:10.800 hundreds at this point that we're meeting. We're excited to 0:11:10.800 --> 0:11:13.120 get to know and finding the most brilliant founders for 0:11:13.160 --> 0:11:15.520 what they're building in the future is what Sequoia is 0:11:15.679 --> 0:11:16.200 all about. 0:11:16.400 --> 0:11:19.840 You know, Caroline's Constantine's point. We see that activity on 0:11:19.880 --> 0:11:23.319 the show every single day, the hundreds of new companies 0:11:23.320 --> 0:11:24.080 that he's talking about. 0:11:24.120 --> 0:11:24.680 That energy. 0:11:25.240 --> 0:11:27.720 It came from open Ai in November of last year, 0:11:28.000 --> 0:11:30.320 and then Microsoft's investment at the beginning of the year. 0:11:30.240 --> 0:11:32.000 And of course the Quoia backs open Ai. 0:11:32.120 --> 0:11:34.280 But I'm interested to dig in hugging Face and then 0:11:34.320 --> 0:11:37.400 others in your portfolio. Constantine, it feels as though the 0:11:37.440 --> 0:11:40.360 rest of the VC community is rushing. It feels that 0:11:40.440 --> 0:11:43.240 regulators are having to be forced to rush. It feels 0:11:43.280 --> 0:11:45.480 as though this has taken us all by complete surprise. 0:11:45.840 --> 0:11:48.640 But you've been studying at Stanford AI. As you say, 0:11:48.679 --> 0:11:51.439 it's been Cornerstone for thirteen years. Why have we suddenly 0:11:51.640 --> 0:11:53.600 been sort of had the rug pulled a bit? 0:11:54.480 --> 0:11:57.599 Okay, so you're exactly right, Caroline. 0:11:57.720 --> 0:12:01.360 This is actually decades in the making, and for us, 0:12:01.400 --> 0:12:05.079 it's sekoya for me, for our team. 0:12:04.360 --> 0:12:04.840 There's. 0:12:06.240 --> 0:12:09.000 This is something that we've been training for and excited 0:12:09.040 --> 0:12:12.480 for for decades. But there is a big, exciting change 0:12:12.520 --> 0:12:15.200 and it is exactly what you described, which is this 0:12:15.400 --> 0:12:19.320 new user interface. When I talk about the user interface, 0:12:19.760 --> 0:12:22.920 I'm harkening back to the personal computer when you had 0:12:22.960 --> 0:12:26.800 the graphical user interface come out, and that was the 0:12:26.880 --> 0:12:30.960 advent of the first Microsoft Windows, that was the advent 0:12:31.000 --> 0:12:33.680 of a lot of the first Apple computers. And the 0:12:33.800 --> 0:12:37.920 point of the first graphical user interface in the personal 0:12:37.960 --> 0:12:42.840 computer revolution is that anyone could just use their mouse 0:12:42.880 --> 0:12:46.560 and click, as opposed to the old terminal based MS 0:12:46.600 --> 0:12:51.320 doss that only engineers could use. Similarly, the lms that 0:12:51.400 --> 0:12:54.520 open Ai and others have introduced make it so that 0:12:54.720 --> 0:12:55.880 anyone can use AI. 0:12:56.000 --> 0:12:57.520 You don't have to be an AI engineer. 0:12:57.960 --> 0:13:01.760 That's why we're in an incredibly important moment because all 0:13:01.760 --> 0:13:05.199 of a sudden, AI is accessible to everyone, and that's 0:13:05.240 --> 0:13:05.720 what shows. 0:13:06.480 --> 0:13:09.360 The data which it runs on is still in many 0:13:09.400 --> 0:13:13.040 ways not perfect. BI sees within how are you thinking 0:13:13.080 --> 0:13:17.360 about the startups you invest in and the overall regulatory 0:13:17.440 --> 0:13:19.200 environment that's going to have to play catch up in 0:13:19.240 --> 0:13:19.800 some way. 0:13:20.559 --> 0:13:25.320 Yes, no doubt, it's the data and you're referring to 0:13:25.520 --> 0:13:28.920 hallucination is the term that's often used. This is absolutely 0:13:29.000 --> 0:13:31.480 top of mind for the enterprises that we're talking to, 0:13:31.600 --> 0:13:35.000 and there's several ways that are currently being addressed from 0:13:35.040 --> 0:13:38.760 an engineering and a company building perspective to improve that. 0:13:39.360 --> 0:13:42.560 And in terms of policy, there's a couple responses. One 0:13:42.600 --> 0:13:46.320 is to step back and say hey, too powerful, too dangerous, 0:13:46.640 --> 0:13:49.439 not me. Another is to just say hey, let it run. 0:13:49.920 --> 0:13:52.840 And the third way, which is what we take at Sequoia, 0:13:53.040 --> 0:13:56.280 what I believe is the right approach, is to say, hey, 0:13:56.640 --> 0:14:01.760 this is incredibly powerful, let's be in evolved let's take 0:14:01.920 --> 0:14:05.720 actions to help form it safely. Let's let's be a 0:14:05.760 --> 0:14:08.320 part of this evolution of this technology so that it 0:14:08.360 --> 0:14:11.120 can be a powerful force of good for humanity. 0:14:11.480 --> 0:14:14.200 You're sounding positive, you're sounding optimistic. In fact, we went 0:14:14.200 --> 0:14:16.920 to our own viewers. We did a Twitter poll, as 0:14:16.960 --> 0:14:19.160 we tend to do every single day, conserting. Just take 0:14:19.160 --> 0:14:20.800 a look at the results, because we ask them whether 0:14:20.800 --> 0:14:24.760 they're pessimist or optimists around AI great for humanity. 0:14:24.840 --> 0:14:25.520 Actually, Ed. 0:14:27.200 --> 0:14:30.320 Said yes, yeah, yeah, And look, they're too early to tell. 0:14:30.360 --> 0:14:32.400 We hear it so often, so constant. You've been in 0:14:32.440 --> 0:14:35.520 this field for a long time. Broadly society is catching up. 0:14:35.560 --> 0:14:38.160 His guest Caroline's point. There's a parallel I want to 0:14:38.240 --> 0:14:41.640 draw with crypto because you are been an active investor 0:14:41.680 --> 0:14:45.200 in the crypto industry. I think the latest was edX markets, right, 0:14:45.960 --> 0:14:50.640 that is a froth and bubble burst cycle. Why will 0:14:50.680 --> 0:14:53.480 we not see the same thing play out here in AI? 0:14:54.040 --> 0:14:56.960 Yes, so first I am a believer in crypto as well, 0:14:57.240 --> 0:15:00.480 But that is a separate trend for you know, further discussion, 0:15:00.480 --> 0:15:03.600 because there's a lot of depth there too on AI. 0:15:03.920 --> 0:15:08.000 This too early to tell point is a critical point, 0:15:08.040 --> 0:15:12.280 and I encourage your audience to use AI and to 0:15:12.320 --> 0:15:15.360 actually start making it a part of their lives. You know, 0:15:15.400 --> 0:15:20.080 there's this kind of trite quote which is AI is 0:15:20.120 --> 0:15:21.080 not going to take your job. 0:15:21.320 --> 0:15:22.400 A human using. 0:15:22.200 --> 0:15:25.000 AI will, and I think that is a lot of 0:15:25.120 --> 0:15:27.840 there's a lot of truth to that. The action that 0:15:27.880 --> 0:15:30.600 should be taken is to start harnessing the power of AI. 0:15:30.960 --> 0:15:34.040 If you're not using AI tools, try them out, see 0:15:34.040 --> 0:15:36.560 how they can make you better internally. 0:15:36.520 --> 0:15:37.040 It's aquoia. 0:15:37.160 --> 0:15:41.080 We talk a lot about augmented intelligence as opposed to 0:15:41.280 --> 0:15:42.560 artificial intelligence. 0:15:44.080 --> 0:15:47.280 Constantine absolutely great to have you. Thank you, Saquiah Capital 0:15:47.320 --> 0:15:50.640 partner Constantine Bula with the optimistic point of view. 0:15:50.400 --> 0:15:54.560 There. 0:15:58.600 --> 0:15:59.600 Time for Tokien tech. 0:15:59.600 --> 0:16:03.360 Across the pond, the United Kingdom's Competition of Markets Authority 0:16:03.400 --> 0:16:07.080 has officially started a merger inquiry into Adobe's twenty billion 0:16:07.120 --> 0:16:10.320 dollar purchase of startup Figma. The agency set a June 0:16:10.400 --> 0:16:13.960 thirtieth deadline for its phase one decision. The deal, of course, 0:16:14.000 --> 0:16:17.440 also ander scrutiny from regulators here in the US. Now, 0:16:17.480 --> 0:16:19.960 TSMC is drawing up plans to build its first chip 0:16:19.960 --> 0:16:23.440 fabrication plant in Europe. According to sources, the chip maker 0:16:23.680 --> 0:16:25.600 is in talks with partners to spend as much as 0:16:25.640 --> 0:16:28.400 eleven billion dollars on the new plant, which would be 0:16:28.400 --> 0:16:32.680 based in Saxony, Germany. And finally, Goldman Sachs is just 0:16:32.760 --> 0:16:36.600 named Kim Posnet as Global head of TMT Banking. According 0:16:36.600 --> 0:16:38.960 to a company memo, she is a veteran deal maker 0:16:39.120 --> 0:16:42.960 whose recent work includes Endeavors Group Indeavor Group's nine point 0:16:43.000 --> 0:16:46.400 three billion dollar takeover of WWE Carrot. 0:16:46.800 --> 0:16:48.440 A great array of news there. 0:16:48.480 --> 0:16:51.080 Meanwhile, let's dig into another part of the news agenda 0:16:51.120 --> 0:16:53.040 that we've got to touch. Because the latest in the 0:16:53.040 --> 0:16:55.520 war on Ukraine, Russia actually saying it is able to 0:16:55.560 --> 0:16:58.000 avert an attack by a pair of drones aimed to 0:16:58.040 --> 0:17:01.080 hit President Vladimir Putin's residence in Most Tuesday night, and 0:17:01.400 --> 0:17:04.720 blame was immediately placed on Ukraine, but without providing evidence. 0:17:04.920 --> 0:17:08.520 State Department Secretary Anthony Blincoln said that he couldn't validate 0:17:08.520 --> 0:17:11.120 the reports and warned to take any Kremlin claims with. 0:17:11.119 --> 0:17:14.000 A large shaker of salt. For now. 0:17:14.320 --> 0:17:25.399 Selinsky has said that this is untrue. Welcome back to 0:17:25.400 --> 0:17:27.360 Blue Blow Technology. I'm Caroline Hyde and New. 0:17:27.359 --> 0:17:29.639 York and I met Lovelo in San Francisco. 0:17:29.800 --> 0:17:32.800 Turning back now to AI ed, of course, we've got 0:17:32.840 --> 0:17:35.080 to do it. Microsoft chief, in fact, the chief economist 0:17:35.160 --> 0:17:37.639 for that particular company, Michael Schwartz, was out with a 0:17:37.720 --> 0:17:40.960 warning about the extent to which artificial intelligence will actould 0:17:40.960 --> 0:17:43.000 be dangerous in the hands of bad actors. He spoke 0:17:43.040 --> 0:17:45.280 earlier at the World Economic Forum panel in Geneva. 0:17:45.960 --> 0:17:51.240 I'm quite confident that yes, AI will be used by 0:17:51.320 --> 0:17:56.600 bad actors, and yes it will cause real damage, and 0:17:56.760 --> 0:17:59.960 yes we have to be very careful and very big 0:18:00.520 --> 0:18:05.639 to avoid they all the means possible, we have to 0:18:05.640 --> 0:18:06.680 put saveguards. 0:18:07.960 --> 0:18:11.280 Let's talk about that mix of cyber and AI. Meta 0:18:11.520 --> 0:18:14.200 out with its quarterly threat report, which showed that malware 0:18:14.240 --> 0:18:19.320 operations using for example, chat GPT, AI help tools as 0:18:19.560 --> 0:18:22.320 phishing links to target businesses and consumers. Joining us now 0:18:22.400 --> 0:18:25.119 as metas head of Security Policy, Nathaniel Gleischer, I just 0:18:25.160 --> 0:18:28.160 want to dig into how new malware strains you're finding 0:18:28.480 --> 0:18:34.359 are basically including posing as chatchypts, browser extensions or productivity tools. 0:18:34.440 --> 0:18:37.040 It builds as though malware bad actors are getting in 0:18:37.080 --> 0:18:38.040 on the AI hype. 0:18:39.480 --> 0:18:41.720 Yeah, thank you so much for having me. I'm here 0:18:41.760 --> 0:18:44.840 today because we are releasing a series of threat reports 0:18:44.840 --> 0:18:48.240 on threats we've countered around the world will help keep 0:18:48.280 --> 0:18:50.359 people safe. One of the threats that I think is 0:18:50.400 --> 0:18:53.159 particularly useful for this business audience is malware, and to 0:18:53.200 --> 0:18:56.359 be thinking about malware are malicious tools that are designed 0:18:56.359 --> 0:19:00.000 to look innofant, but focus on compromising personal devices, compromise 0:19:00.119 --> 0:19:02.639 in your accounts, and we know that they target businesses. 0:19:03.000 --> 0:19:06.400 And as you say, malware developers always try to get 0:19:06.400 --> 0:19:09.320 it on buzzwords. They're looking for ways to trick people 0:19:09.359 --> 0:19:12.120 into downloading malware. We've seen to do it with cryptocurrency 0:19:12.160 --> 0:19:14.000 in twenty twenty two. They try to get people to 0:19:14.000 --> 0:19:16.320 click on links suggesting that you would get access to 0:19:16.320 --> 0:19:19.560 new cryptocurrency apps. Today they're trying to use generative AI, 0:19:19.720 --> 0:19:21.720 suggesting you could click on a link, you might get 0:19:21.760 --> 0:19:24.480 access to chat, GPT or another genderate AI tool, and 0:19:24.640 --> 0:19:26.320 actually you'd be downloading malware. 0:19:26.520 --> 0:19:30.240 Fascinating just who within a business is the most vulnerable, 0:19:30.280 --> 0:19:32.199 who are going to be being sent these links. 0:19:33.400 --> 0:19:37.600 I think businesses should be conscious that malware actors target indiscriminately. 0:19:37.760 --> 0:19:40.320 They will target across the business, including maybe people who 0:19:40.320 --> 0:19:44.000 are connected to prominent leaders or individuals that might just 0:19:44.560 --> 0:19:47.080 be operating in the business and for example, maintaining or 0:19:47.119 --> 0:19:50.480 administering the businesses social media pages. The good news for 0:19:50.520 --> 0:19:53.120 all of this, though, is that there's a number of things, 0:19:53.200 --> 0:19:56.159 fairly simple things that people can do and businesses can 0:19:56.160 --> 0:19:58.560 do to keep themselves safe, whether that's turning on two 0:19:58.600 --> 0:20:02.440 factor authentication or using strong and unique passwords across their 0:20:02.480 --> 0:20:05.560 online accounts. And we are rolling out a series of 0:20:05.600 --> 0:20:09.000 new protections for businesses to help them strengthen their defenses 0:20:09.320 --> 0:20:12.600 on meta and also to help them protect against malware 0:20:12.640 --> 0:20:15.280 wherever it might target them, whether that's on their devices, 0:20:15.560 --> 0:20:18.399 on their other online accounts, or on our platforms. 0:20:19.640 --> 0:20:22.000 The fact out this is a story about bad actors 0:20:22.160 --> 0:20:26.800 posting ururls that purport to take you to attract GPT 0:20:27.080 --> 0:20:30.240 like product. Right, that's what you've detected. What I want 0:20:30.240 --> 0:20:34.240 to know is have you detected threat actors who are 0:20:34.280 --> 0:20:38.399 actually using the technology using generative AI to make the 0:20:38.400 --> 0:20:41.600 content they post on your platforms harder to detect. 0:20:43.840 --> 0:20:48.520 We haven't seen significant sophisticated campaigns relying on genitive AI today. 0:20:48.960 --> 0:20:52.560 We do know that bad actors try to abuse every 0:20:52.600 --> 0:20:55.480 new piece of technology, so we expect that they're going 0:20:55.520 --> 0:20:58.160 to try to abuse generative AI, just like they've tried 0:20:58.200 --> 0:21:01.400 to abuse other innovations in recent years. That's why it's 0:21:01.400 --> 0:21:05.040 particularly important that defender teams at Meta and at other 0:21:05.040 --> 0:21:08.360 companies around the world, including in government and civil society, 0:21:08.400 --> 0:21:11.719 are thinking about how these abuses might happen and steps 0:21:11.760 --> 0:21:14.880 we can take that protect people and counter the bad actors. 0:21:16.440 --> 0:21:21.639 Cisco warned that AI would make phishing attacks harder to detect. 0:21:21.840 --> 0:21:23.479 Do you share Cisco's concern. 0:21:25.880 --> 0:21:29.920 We've seen some limited examples of people using AI based 0:21:30.000 --> 0:21:35.520 tools to, for example, create profile pictures that of people 0:21:35.560 --> 0:21:38.560 who don't exist but look realistic. We've seen some cases 0:21:38.560 --> 0:21:40.960 of people trying to use generative AI tools to produce 0:21:40.960 --> 0:21:44.040 deep fake videos. So these threats are certainly out there, 0:21:44.280 --> 0:21:47.120