Speaker 1: From Mahard where Innovation, money and power collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline Hyde at Bloomberg's world headquarters in New York.
Speaker 4: I'm Ed Lovelow in San Francisco. This is Bloomberg Technology
Speaker 4: coming up.
Speaker 3: Microsoft to invest one and a half billion dollars in
Speaker 3: a UAE top AI firm.
Speaker 5: It's G forty two.
Speaker 3: That's the US government pushes the Abu Dhabi business to
Speaker 3: end all cooperation with China. We analyze the business and
Speaker 3: the political drivers.
Speaker 4: Europe has its eye on fintech and crypto. We sit
Speaker 4: down with the EU's Commissioner for Financial Services on her
Speaker 4: visit to Silicon Valley. Is ais all the rage in
Speaker 4: bank earnings, and.
Speaker 3: We digest a two hundred and fifty million dollar fundraise
Speaker 3: for a Silicon Valley chip developer, Revos, which is yet
Speaker 3: to bring about its first product. We discussed the race
Speaker 3: for AI infrastructure and so much more. Throughout this hour,
Speaker 3: we focus, though, just on the public markets, which in
Speaker 3: the United States relatively sanguine right now, and the NASDAC
Speaker 3: is off just by about.
Speaker 5: A quarter of a percent.
Speaker 3: The action is actually what's happening in Asia and Europe,
Speaker 3: trading both those benchmarks under a lot of pressure following
Speaker 3: some sell off that we've seen in the US. But
Speaker 3: really what's been happening also in the bond market, yields
Speaker 3: up three basis points on a two year yield that
Speaker 3: at one point was very close to the five percent level.
Speaker 5: We're all eyes on j Powell what.
Speaker 3: He sees for the future of FED policy when we've
Speaker 3: still got such a resilient US economy and inflatory pressures.
Speaker 3: Moving on, have a look at what's happening in the
Speaker 3: world of as a dollar that rises for five straight
Speaker 3: days and having the best run in at least a year.
Speaker 3: The bitcoin on the flip side versus the US dollar
Speaker 3: is down one point seven percent. We're at sixty two
Speaker 3: thousand dollars, so there's still some risk aversion in this
Speaker 3: market ed when it comes to certain risk assets.
Speaker 5: Well, looking in on the micro I'm.
Speaker 4: Continuing to look at Tesla. This is a two day chart,
Speaker 4: the stockdown and another four percent. We broke the news
Speaker 4: yesterday that the job cuts at Tesla will be nearer
Speaker 4: to twenty percent. Elon Musk's memo said more than ten percent.
Speaker 4: We also broke the story that Drew Baglino, an eighteen
Speaker 4: year veteran and one of four named executives, had resigned.
Speaker 4: He then confirmed it on social media. The milestone is
Speaker 4: that Tesla's now below five hundred billion dollars of market cap.
Speaker 4: There's a lot of questions we're going to ask some
Speaker 4: of them throughout this week, throughout this quarter about what
Speaker 4: comes next for the ev name. Also looking at Microsoft
Speaker 4: up half a percentage point, had a slow start to
Speaker 4: the session. The headline on news is the one point
Speaker 4: five billion dollar investment in G forty two.
Speaker 6: There's a backstory which.
Speaker 4: Is, you know, I've been looking into for a few months.
Speaker 4: G forty two really likes what Sam Outman and OpenAI
Speaker 4: are doing. I think they want a piece of that.
Speaker 4: They now have a relationship with Microsoft. I wonder if
Speaker 4: that helps. And the backstory is a political one as well,
Speaker 4: that G forty two is now safe for a US
Speaker 4: company to invest in. It's very complicated, but it's an
Speaker 4: we're going to hear.
Speaker 5: More and more about, certainly, and let's get straight to it.
Speaker 3: Microsoft and the deal Blue Magatinea Bass you come of
Speaker 3: this of course with the Microsoft expertise covering all things
Speaker 3: of that business. But just take a step back, I mean,
Speaker 3: what had to happen first? What led to the divestment
Speaker 3: of China to move away from China?
Speaker 7: Sure, so, what a bunch of Bloomberg reporters in Doting
Speaker 7: and some of my other colleagues has been tracking for
Speaker 7: a while is that there have been is behind the
Speaker 7: scenes secret talks between the US government and G forty two,
Speaker 7: And what we reported last night is that that resulted
Speaker 7: in kind of a secret pack that was reached in
Speaker 7: which G forty two agreed to divest from China.
Speaker 8: Remember.
Speaker 7: G forty two was under a lot of criticism from
Speaker 7: US government from some members of Congress where its close
Speaker 7: ties to some Chinese companies, including Parkway, and they were
Speaker 7: under threat that they might not be able to continue
Speaker 7: to have access to the key in video chips that
Speaker 7: they need for their AI work. This kind of you know,
Speaker 7: secret pack result of it and used the way to
Speaker 7: this Microsoft deal.
Speaker 4: Did I think it's worth explaining to our audience what
Speaker 4: G forty two is. It's essentially an investment firm. But
Speaker 4: in all the conversations I have G forty two comes
Speaker 4: up a lot in the context of the Sam Outman
Speaker 4: chip initiative. We've reported that, you know, Sam Outman has
Speaker 4: met with G forty two, that G forty two wants
Speaker 4: to give him lots of money, But I don't think
Speaker 4: we've ever stopped and said, what's G forty two.
Speaker 7: Sure, it's essentially, you know, the biggest AI company in
Speaker 7: that region, in the UAE and large parts of that.
Speaker 9: Part of the world.
Speaker 7: It's a wholding company that's focused on AI, but it
Speaker 7: has its hands in a lot of different parts of AI.
Speaker 7: There's significant healthcare initiatives than talking on in artificial intelligence.
Speaker 7: For Microsoft, this is a multi stage deal and they
Speaker 7: want to take advantage of several parts of what G
Speaker 7: forty two offers them, including Microsoft President Brent Smith told
Speaker 7: us yesterday. In the later stage of the deal, they're
Speaker 7: hoping to put Microsoft services in G forty Tuesday data
Speaker 7: centers and use that as a way to access markets
Speaker 7: in Central Asia and Africa where Microsoft doesn't really have
Speaker 7: a presence and doesn't have its own data center. So
Speaker 7: that's another role the G forty two plays, sort of,
Speaker 7: you know, easing the speed of cloud and AI into
Speaker 7: some of those regions where US companies don't really have access.
Speaker 7: That's part of the reason why the Biden administration wanted
Speaker 7: to make sure that it removed gboty two from the
Speaker 7: Chinese sphere influence and you know, got closer to the
Speaker 7: US techology companies in the US technology industry.
Speaker 4: Bloomberg's Dina Bass one of the bylines on what is
Speaker 4: one of the most read stories and important pieces of
Speaker 4: reporting on Bloomberg this Tuesday.
Speaker 6: We've had the reporting and the details. Let's get some.
Speaker 4: More analysis and reaction with Dan Ives of Webbersion. Dan,
Speaker 4: you know, you kind of cover this from Microsoft's perspective,
Speaker 4: but you've written a few notes about the bigger picture
Speaker 4: as well with what happening with open AI and AI
Speaker 4: infrastructure build out. Just give us your kind of scorecard
Speaker 4: on this Redmond UAE tie up.
Speaker 9: Oh, I mean, this is a massive strategic bet.
Speaker 10: It's another flex the muscle. It's for redmen and the
Speaker 10: Dalla because really for G forty two, they had a
Speaker 10: choice China or US and Redmen and you're gonna take
Speaker 10: Microsoft every day of the week.
Speaker 9: Right now along with Nvideo.
Speaker 10: And for Microsoft, it's just another doubling it down.
Speaker 9: They're playing chess. Others are playing checkers.
Speaker 4: Then Microsoft is forming a lot of relationships with a
Speaker 4: lot of different people. Are they just making sure they're
Speaker 4: covered basically well look ed.
Speaker 9: They know their way ahead. So what they're doing is
Speaker 9: they're putting the.
Speaker 10: Guardrails up really around the world Joinny blind Spot Middle
Speaker 10: East being.
Speaker 9: One of them.
Speaker 10: They're gonna bet on the big Horus right here, and
Speaker 10: they ultimately even had to invest the Chinese piece. Also
Speaker 10: making sure that within the Beltway to or two area
Speaker 10: could there's no issues there. So from Microsoft, this is
Speaker 10: an example they're miles ahead. They're just further and further
Speaker 10: gaining share from an AI perspective, given this AI revolution
Speaker 10: where them all mean the golden child of AI resides Dan.
Speaker 3: What's interesting is in this case US government played a
Speaker 3: role in other areas. I think of just what happened
Speaker 3: last week with the UK CMA worrying from a regulatory
Speaker 3: perspective about certain key players having a web of relationships
Speaker 3: and then crossing over too much in the world of AI.
Speaker 3: Will this be regulated from a competition perspective?
Speaker 10: Well, I think what Brad Smith knows it as well
Speaker 10: as anyone. He's going to proactively in Microsoft make sure
Speaker 10: US and Beltware are good with this because they don't
Speaker 10: want all of a sudden a year eighteen months from
Speaker 10: now this becomes a bigger issue. And they checked all
Speaker 10: those boxes. The Chinese divestiture I think was important from
Speaker 10: a G forty two perspective, and now it's a green
Speaker 10: light going ahead at the same time where Amazon and
Speaker 10: Google still trying to play catch up, and this is
Speaker 10: Nedella just continuing to make aggressive bets and we'll see
Speaker 10: it again earnings.
Speaker 9: Where they continue to be the lead from an AI perspective.
Speaker 3: Phenomenal game of chess, as we sort of referenced, And
Speaker 3: what is on many players' minds right now is where
Speaker 3: are the bottlenecks? Time and time again from Sam Altman
Speaker 3: and many that it's to do with energy and it's
Speaker 3: to do with access to AI infrastructure. Is that what
Speaker 3: you hear from the leaders of these companies and how
Speaker 3: much more investment and we likely to see to try
Speaker 3: to see a solution globally for that.
Speaker 10: Yeah, And I think ed now that when you was
Speaker 10: talking about on the chip side, there's a two parter
Speaker 10: here because I think this is ultimately going to lead
Speaker 10: from a chip perspective to more and more investment from
Speaker 10: Middle East towards some of the all men and chip
Speaker 10: ventures that's now going on within Open AI and Microsoft.
Speaker 10: Of course, energy continues to be the constraint, but use
Speaker 10: cases are.
Speaker 9: Exploding across the board.
Speaker 10: And now this fourth industrial revolutions here being led by
Speaker 10: the Dell and of course the godfather of AI, Jensen
Speaker 10: Na Vidio.
Speaker 3: I love having the perspective Dan Ives, who can make
Speaker 3: it a global conversation.
Speaker 5: We thank you for web Bush.
Speaker 3: Meanwhile, let's just go to another key player that many
Speaker 3: in human eye on Apple, It's pledged to buy more
Speaker 3: components and accessories for its devices from Vietnam suppliers. Now
Speaker 3: the move is a big boost for the Southeast Asian country,
Speaker 3: says it emerges as a global electronics hub. Apple is
Speaker 3: exploring ways to shift production, of course of its GAVET
Speaker 3: gadgets away from China. That's to minimize those geopolitical risks.
Speaker 3: And the iphonemaker is exploring India and in Vietnam.
Speaker 5: Which has seen about a fourfold.
Speaker 3: Increase in companies assembling Apple products over the past decade. Meanwhile,
Speaker 3: coming up, well, let's talk about global regulation for a moment.
Speaker 3: We're joining the European Commission of Financial Services to discuss
Speaker 3: all things digital finance and regulation.
Speaker 5: There at.
Speaker 4: I'm taking a quick look at shares of the Swedish
Speaker 4: company Ericsson. This is the Swedish SES two percent higher
Speaker 4: as it stands. The USA dr is actually a little
Speaker 4: bit higher even still than that beat on earnings, and
Speaker 4: it's really interesting there's a company going through restructuring at
Speaker 4: a time where the mobile phone or cell carriers are
Speaker 4: just not spending on five G network infrastructure, but the
Speaker 4: market likes what it sees. Stock up two percent. This
Speaker 4: is Bloomberg Technology.
Speaker 8: Okay.
Speaker 4: The European Unions back in Silicon Valley, and this time
Speaker 4: the focus is payments, crypto and the impact of artificial
Speaker 4: intelligence on banks. European Commissioner for Financial Services Marade McGinnis
Speaker 4: has met with coinbase and Plaid, and has meetings lined up.
Speaker 6: With Apple and Stripe.
Speaker 4: I'm delighted to say the Commissioner joins me now on set.
Speaker 6: Welcome.
Speaker 8: Yeah, to be here in person.
Speaker 1: It's been a while since I was this side of
Speaker 1: the countries.
Speaker 8: So it's good.
Speaker 4: It's interesting that the ongoing relationship between the Commission and
Speaker 4: Silicon Valley based companies. You forget there are more than
Speaker 4: four hundred million people in Europe who have access to
Speaker 4: those companies and their products. Just summarize the purpose of
Speaker 4: your visit and your objectives.
Speaker 1: Well, it's always good to meet colleagues and you can
Speaker 1: talk to them by phone, but being here in person matters.
Speaker 1: We're at a critical stage, so this commission is coming
Speaker 1: towards the end of its mandate. There's been an awful
Speaker 1: lot of change around finance, digitalization, we have artificial intelligence,
Speaker 1: and really we're here to exchange views and to listen
Speaker 1: to what's happening on the ground here because it's a
Speaker 1: fast moving area. Even since my taking up this role,
Speaker 1: we've seen a huge evolution in banking. COVID accelerated the
Speaker 1: use of digital payments. We want payments to be instant.
Speaker 1: We've got legislation around that. So basically, what we're trying
Speaker 1: to do is harness the benefits of all of these technologies.
Speaker 8: But all the way I look at the risks that
Speaker 8: might be.
Speaker 1: Involved in them, and our idea is not to stifle innovation,
Speaker 1: and this is a place where innovation flourishes, so it's
Speaker 1: good just to exchange.
Speaker 4: We have a lot to discuss I'd like to very
Speaker 4: quickly just tick off crypto coinbased from the show with
Speaker 4: me last week, and they had a number of grievances,
Speaker 4: particularly about legislating for regulation.
Speaker 6: Instead of going through courts.
Speaker 4: What were the grievances they brought up to you in
Speaker 4: the context of Europe.
Speaker 1: The grievance where it didn't arise because actually they feel
Speaker 1: comfortable that Europe has provided certainty with our markets and
Speaker 1: crypto assets legislation, and while there might be minor issues
Speaker 1: within that, at least they know how they will be
Speaker 1: regulated and licensed at the European level.
Speaker 8: I think here it's different.
Speaker 1: So we were able to talk about the benefits of certainty.
Speaker 1: Very often Europe can be accused of being a rules
Speaker 1: based which I think is actually a good accusation because
Speaker 1: rules matter, but sometimes overregulating. I was very interested to
Speaker 1: hear how certainty is important for a company like coin base,
Speaker 1: and I was also interested that maybe a few years
Speaker 1: ago this was an area of concern, but actually when
Speaker 1: you listen to that company and its vision for what
Speaker 1: could come next in terms of innovation and how they
Speaker 1: believe regulation is important. I was very encouraged by that.
Speaker 1: So we didn't have so much of the grievances. I mean,
Speaker 1: there are issues that they will talk to us about,
Speaker 1: and we're very open to talking with and to those
Speaker 1: who are using our legislation and who need clarification.
Speaker 3: Commissioner again, it's can I push back a little bit
Speaker 3: because I'm reading a report from Tether, for example, now
Speaker 3: nowhere near as much oversight as the previous business we're
Speaker 3: just talking about, but key player within stable coins, the
Speaker 3: player and stable coins, many would say, and they've gone
Speaker 3: on the record saying the message being sent is that
Speaker 3: Europe does not want crypto regulation has had that is
Speaker 3: largely limiting access, especially for retail investors. Brussels effect for
Speaker 3: many feels like a cooling effect.
Speaker 1: Well, look, everyone has a different opinion on this, and
Speaker 1: I think we had three options when it came to crypto,
Speaker 1: ignore it and let things evolve, ban it because.
Speaker 8: We couldn't control it.
Speaker 1: Or and this is the approach we have taken regulated
Speaker 1: so that those that are in the industry have certainty
Speaker 1: about when they're dealing with clients within the European Union,
Speaker 1: and I think we took the right course. Now, it's
Speaker 1: a fast moving area and equally many who are in
Speaker 1: that space originally came to it because they didn't want
Speaker 1: to be in the regulated zone, if you like. But
Speaker 1: I do think there's more maturity now that those who
Speaker 1: want to have a lifetime in this business, which will
Speaker 1: evolve over that time, want certainty in terms of their
Speaker 1: dealing in the European Union, and we have provided that certainty.
Speaker 1: And I think that's all to the good of the
Speaker 1: industry itself. It's in one sense AI has overtaken some
Speaker 1: of the conversations around crypto because crypto has been around
Speaker 1: for some time.
Speaker 8: It looks like it will prevail. There are different views.
Speaker 1: In Europe about whether crypto is an asset or not,
Speaker 1: and we have all of these conversations. What we do
Speaker 1: in the permission is bear in mind, you know that
Speaker 1: the greater good, so is the balance of regulation better
Speaker 1: than allowing things evolved without any guardrails.
Speaker 3: Commissioner apologies to drump in, but the AI guardrails, for example,
Speaker 3: the AI Act. How much you think AI is a
Speaker 3: concern in terms of well financial stability right now?
Speaker 1: Well, I mean that's a very big question. I think
Speaker 1: the issue of AI. Yeah, but it's such a big
Speaker 1: question that when you listen to some of the scary
Speaker 1: stories around AI, you would really want to stop it immediately,
Speaker 1: but it is not something that you can actually contain.
Speaker 1: What we can do is try and look in a
Speaker 1: measured way of what.
Speaker 8: Are the risks, because not only AI.
Speaker 1: Is higher risk, In fact, some of it is extremely useful.
Speaker 8: And again our approach, and it sounds dull, but it's
Speaker 8: important to say it. It's about balance.
Speaker 1: Allow the industry evolve, but allow those who are you know,
Speaker 1: if you're like in charge of watching these things, like
Speaker 1: the Commission and our Parliament, to have us say in
Speaker 1: how it evolves. And we wanted to do good, so
Speaker 1: we again look at the risks involved rather than allow
Speaker 1: an unfettered evolution of artificial intelligence, which is already being
Speaker 1: used in the financial system in any event, I gather
Speaker 1: I have one who who talks to me on my
Speaker 1: banking app. We get on sometimes not all the time,
Speaker 1: and I think behind all of this is a desire
Speaker 1: to harness technology but not remove the human dimension around technology,
Speaker 1: and there's a risk that that could happen. So we've
Speaker 1: been mindful of all of these things and we have
Speaker 1: been careful to categorize where the risks are. Conscious also
Speaker 1: that this will evolve. It is evolving before our very eyes.
Speaker 3: It is commissioner, and that's why you've got plenty of conversations.
Speaker 3: Still we had, we wish we had longer with you, right,
Speaker 3: We get as wonderful to have you on the show.
Speaker 3: Europeing Commissioner for Financial Services.
Speaker 4: Revos is a Silicon Valley AI chip developer without a
Speaker 4: product on offer yet, but it's raised more than two
Speaker 4: hundred and fifty million dollars in an oversubscribed funding round,
Speaker 4: with Matrix Capital Management, the largest investor in the round,
Speaker 4: joining the board. Delighted to bring in Rivos CEO Punic
Speaker 4: Kumar for more. This is an AI chip based on
Speaker 4: Risk five architecture. I hear a lot about that at
Speaker 4: the moment as an alternative to a video.
Speaker 6: But let's go back to the idea that it is
Speaker 6: in design.
Speaker 4: You're in the R and D phase, that's correct. The
Speaker 4: two hundred and fifty million, where does it get you?
Speaker 11: Okay? So first of all, thank you for having me
Speaker 11: on the show. An honor to be here. What we
Speaker 11: plan to deal with this fundraise that we are announcing
Speaker 11: today is to really primarily support our increasing customers. We
Speaker 11: have huge demand coming at.
Speaker 4: Us increased customers if you haven't got anything to give
Speaker 4: him yet.
Speaker 11: So we've been speaking with a lot of potential customers
Speaker 11: already and they're very intrigued by our design. What we
Speaker 11: have to offer and what we're going to do today
Speaker 11: is use this money that we eraised to expand our
Speaker 11: operations globally, increase our hiring, increase our engineering efforts, get
Speaker 11: to production of our parts, and really get to trial.
Speaker 4: I hear increasingly there is a market for Risk five
Speaker 4: based AI accelerator or AI chip. It's a point of
Speaker 4: differentiation from Nvidia and prior for cupcoming generations. But it
Speaker 4: doesn't seem like that market's here in America. No one's
Speaker 4: taking it seriously, that's right, is it in China?
Speaker 11: Actually that's not true. It is here too. If you
Speaker 11: in the last few days, you saw an announcement, for example,
Speaker 11: from one of the big AI drivers that they are
Speaker 11: using risk five in their in their chips already. So
Speaker 11: we definitely see a place for Risk five in the
Speaker 11: air market, and there's several companies in this market space already.
Speaker 3: BENI for those who aren't as well versus and Risk
Speaker 3: five versus our architecture break.
Speaker 5: Down, what alternative offers.
Speaker 3: Is this about cost? Is this about ability efficiency?
Speaker 11: It's actually a combination of many factors. Cost is just
Speaker 11: saving a license fee, for example, rather than paying somebody else.
Speaker 11: But really the biggest thing I think is drives a
Speaker 11: lot of innovation because it's a brand new architecture. It's open,
Speaker 11: so that allows anybody to do research with that architecture.
Speaker 11: And this is where we kind of see innovation happening
Speaker 11: in the next five to ten years, and it'll eventually,
Speaker 11: we think, will displace many of the other players in
Speaker 11: the market, the existing incumbents. This really is the Linux moment.
Speaker 11: We think risk Fribe brings a Linux moment to instruction
Speaker 11: set architectures for CPU designs Perny.
Speaker 3: Therefore, there is this handringing going on about the access
Speaker 3: to AI infrastructure, a need for energy. We've talked a
Speaker 3: lot about just the teaming up a Microsoft and G
Speaker 3: forty two, the obvious global conversation going on around access
Speaker 3: to chips.
Speaker 5: Who would be your customer?
Speaker 3: Are you going after in video's customers or are you
Speaker 3: going after ones that can't access in video?
Speaker 11: Okay, so I think first of all, we are going
Speaker 11: after any customer that is really using a lot of data.
Speaker 11: That's our biggest thing is that any data driven business
Speaker 11: that needs more hardware support is a potential customer. Now
Speaker 11: we know that the big three or four players in
Speaker 11: the market of the cnvideo is the biggest. There's AMD,
Speaker 11: there's Intel, and there's many other startups in the area
Speaker 11: that are building hardware for AI. We think the field
Speaker 11: is growing fast enough that we have ample opportunity to
Speaker 11: address any other players who can't get access to in
Speaker 11: video hardware or who want to look for an alternative.
Speaker 11: Whether it's cheaper, whether it's more power efficient, there's many
Speaker 11: factors that would go into the decision making process.
Speaker 4: You were associated with a company called Paseemi that that
Speaker 4: company was sold to Apple. Yes, there has been a
Speaker 4: piece of legal proceeding or litigation that's now been settled
Speaker 4: which came before this funding round.
Speaker 6: Could you just explain that and where we sit with it.
Speaker 11: You know, what we're celebrating today is our fundraise. What
Speaker 11: we are really trying to do here is keep at
Speaker 11: our product. Yes, it was a litigation and it's behind us,
Speaker 11: but what we really are trying to do today is
Speaker 11: focus on our product going forward. We've been beavering away
Speaker 11: at this for about three years, Laser focused on getting
Speaker 11: what we where we want to get to and we
Speaker 11: really look forward to our product being announced in the
Speaker 11: next six months two.
Speaker 6: Year come back when the product's ready to show.
Speaker 4: Absolutely all right, We're delighted to real CEO Kuma, thank
Speaker 4: you so much.
Speaker 3: Welcome back to MENWBG technology and how I had in
Speaker 3: New York and I met Lovelow in San Francisco.
Speaker 6: Markets carac Yeah, quick check.
Speaker 3: On them because we've I've seen perhaps a little bit
Speaker 3: more stability in the US that you've seen abroad, certainly,
Speaker 3: and then as that one hundred actually managing to turn
Speaker 3: green at the moment, the benchmark seeing a little bit
Speaker 3: of inbound as we await J.
Speaker 5: Powell speaking a little bit later.
Speaker 3: All important for the one market which has seen a
Speaker 3: sell off earlier and two year yels near a five
Speaker 3: percent handle. But nevertheless we see some money going back
Speaker 3: into big tech, m sci or country world innex so
Speaker 3: under pressure. Europe sold off hard, so did the Asia
Speaker 3: in fact, playing a little bit of catch up to
Speaker 3: some of the risker version we've seen in the US,
Speaker 3: Bitcoin off by one point three percent as the US
Speaker 3: dollar just March is higher. What will we hear on
Speaker 3: the inflationary pressure from chair power at sixty two thousand
Speaker 3: bitcoin versus the US dollar move over. Have a look
Speaker 3: at some of the individual names now, I said that
Speaker 3: Europe was under pressure. I start with a name over
Speaker 3: in the UK Wise transfer Wise and many would know
Speaker 3: it basically sending money abroad down almost nine percent. Look,
Speaker 3: revenue was up twenty four percent for this particular fintech Darling.
Speaker 3: We're just speaking to the European Commissioner all around digital finance,
Speaker 3: but it was not as much as the market wanted
Speaker 3: to see and were under pressure significantly. TESL off by
Speaker 3: more than two percent. Europort ed front and center as
Speaker 3: they see executives lead and of course leave and indeed
Speaker 3: potentially as much as twenty percent headcut and cuts in
Speaker 3: certain areas of the business. Netflix, though you're outperformer today,
Speaker 3: we brace ourselves for earnings at the end of the week.
Speaker 3: We're getting some upgrades to the price targets coming from
Speaker 3: various as. Today we're six hundred and twenty for Netflix,
Speaker 3: But what are you looking at on other earnings areas well?
Speaker 4: Banks and banks are big this Tuesday. AI has been
Speaker 4: changing the game. I just want to use to listen
Speaker 4: to a SoundBite from PGM CEO David Hunt, who joined
Speaker 4: us earlier.
Speaker 6: Here's what he said.
Speaker 12: Technology now is allowing us to move data to the
Speaker 12: cloud and then to do things with artificial intelligence that
Speaker 12: we never could do before. And so it now is
Speaker 12: actually being used by our investors, it's actually being used
Speaker 12: by the frontline to make decisions. That's a very different
Speaker 12: use of technology that it was before. And I think
Speaker 12: that's very exciting.
Speaker 4: Let's bring in Bloomberg Snari Bass like the Keywell Street name.
Speaker 4: Bank of America is what's moving in the markets and
Speaker 4: pgim's thoughts on the AI story and banks could have
Speaker 4: put it better than I have a kid just summarize
Speaker 4: what's happening this Tuesday morning.
Speaker 13: There are a few things happening at the same time.
Speaker 13: When you think about Bank of America, it is their
Speaker 13: propensity to bring new clients in, lend them money, and
Speaker 13: also keep a handle on costs. One thing being asked
Speaker 13: of CEO Brian moynihan was if this further investment in
Speaker 13: digitization of the bank would help bring their efficiency ratio
Speaker 13: down below sixty percent, And you had CEO Brian Monahan
Speaker 13: say they were really pushing to.
Speaker 5: Get that done.
Speaker 13: Now, some interesting statistics for you here, ed when you
Speaker 13: think about how quickly things are going digital, it's that
Speaker 13: this quarter alone, Zell transactions at Bank of America past
Speaker 13: the combined number of checks written plus the amount of
Speaker 13: cash withdrawalers from tellers and from ATMs. So that is
Speaker 13: how quickly money is moving online at Bank of America. Now,
Speaker 13: the faster they can get this done, they believe that
Speaker 13: they would be able to create cross savings not just
Speaker 13: for them, but for their customers as well. That's one
Speaker 13: side of things, how the banks themselves are using digitization
Speaker 13: and AI to really drive efficiency. The other end of
Speaker 13: things here, I want to pull up a quote from
Speaker 13: David Solomon Goldman Sachs, a CEO ES a day ago
Speaker 13: about how the significant demand for AI related infrastructure and
Speaker 13: as a result financing would be a tailwind to their business.
Speaker 5: A day later, just today.
Speaker 13: Now we have Morgan Stanley saying that it had the
Speaker 13: top amount in equity underwriting fees so far this year.
Speaker 13: The more that people are raising money in these markets,
Speaker 13: the more you can fuel some progress in terms of
Speaker 13: fee generation for these banks.
Speaker 3: It isn't that fascinating thing because AI is almost a
Speaker 3: driver on both fronts. We got the cost efficiency, We've
Speaker 3: also got the fact that anything with AI in its
Speaker 3: name is looking to go public at the moment, or indeed.
Speaker 5: Try to spin that story.
Speaker 3: How much resilience is there coming from some of these
Speaker 3: CEOs playing catch up ultimately to Jamie Dimond, who seems
Speaker 3: to have led the pack when it comes to AI.
Speaker 13: Well, one thing that's interesting is you look at the
Speaker 13: bottom line and you look at how much they're spending
Speaker 13: on technology. You have cost rising at every bank, particularly
Speaker 13: in terms of compensation, even with headcount following. But for
Speaker 13: many of these banks, including Bank of America, Morgan Stanley,
Speaker 13: you're seeing technology really be on the rise as well
Speaker 13: when you look at the cost rising at these firms.
Speaker 13: So they are competing not just to invest in talent,
Speaker 13: but also to invest in the way of automating these
Speaker 13: banks as quickly as humanly possible, because at the end
Speaker 13: of the day, they believe it will help their bottom line.
Speaker 5: Isn't it interesting though?
Speaker 3: Bank of America having its worst day since well, the
Speaker 3: Silicon Valley bank collapse back in March twenty twenty three,
Speaker 3: which is all about money moving a bit too fast,
Speaker 3: for everyone's pleasant relationships with it. Shanali Bassett, we please
Speaker 3: to have you on the show today to break down
Speaker 3: look AI and tech and banking, and let's stick with
Speaker 3: that because over at jeffries An your private Internet conferences
Speaker 3: on our shoulders. We've got Santa Monica is where it's
Speaker 3: being held. Five hundred tech leaders are going to be
Speaker 3: meeting to discuss guess what AI emerging opportunities in the
Speaker 3: next cycle of the growth in tech Go with us.
Speaker 3: He's Jeffrey's global co head of Internal Internet Investment Banking
Speaker 3: joining us and Gore of congratulations on the event that's
Speaker 3: coming today. What is front of mind from the private
Speaker 3: allocation of money right now? Is it trying to pick
Speaker 3: the winners in this environment?
Speaker 8: Sure?
Speaker 14: Firstly, thank you for having me and thank you for
Speaker 14: covering our event over the next couple of days. What
Speaker 14: we have here this week is a collection, as you mentioned,
Speaker 14: of about four to five hundred company execs as well
Speaker 14: as investors in tech and in consumer tech in particular.
Speaker 14: This year, we have a team around AI as you've
Speaker 14: been talking about, and it's hard to not get excited
Speaker 14: about what the prospects are from an AI perspective. Especially
Speaker 14: in private company land. I think there's two elements to
Speaker 14: this that we are looking for this week. One is
Speaker 14: the AI first company. So think about you know, companies
Speaker 14: that are trying to disrupt existing monopolies, existing large industries,
Speaker 14: whether that be everything from financial services to nursing to
Speaker 14: the search and so on and so forth. There's a
Speaker 14: whole universe of those companies. And then you've got the
Speaker 14: large consumer internet companies that are using AI today in
Speaker 14: their business, both from the perspective of news services as
Speaker 14: well as from taking out costs, and so that will
Speaker 14: be a big team across both of those sectors.
Speaker 3: Do you expect M and A to be driven by
Speaker 3: this AI wave.
Speaker 14: You know, not in a meaningful way yet. And what
Speaker 14: I mean by that is at least a lot of
Speaker 14: the companies that we have here right now are still
Speaker 14: relatively early in their evolution. Yes, there is a lot
Speaker 14: of hype. Yes they are getting a lot of investment
Speaker 14: from early stage and lead stage investors, but they're still
Speaker 14: early in where they sit in the revenue profile of
Speaker 14: their companies, in the maturation of business models, and so
Speaker 14: I think everyone is monitoring it. I've talked to several
Speaker 14: company large company executives that are here that are doing
Speaker 14: meetings with some of these companies that are monitoring how
Speaker 14: this is going to impact their own business. But I
Speaker 14: think acquiring something is hard these these trade high valuations
Speaker 14: as you noted, and acquiring for a big company to
Speaker 14: acquire something for billions of dollars when it's not really
Speaker 14: generating meaningful revenue, I think it's going to be really hard.
Speaker 14: So I don't think it's going to be a big
Speaker 14: em andity team from that perspective. I think it's going
Speaker 14: to be a big investment team today. And by the way,
Speaker 14: these companies can get very big, very quickly.
Speaker 15: I think that's the.
Speaker 14: One thing to look out for this is there's not
Speaker 14: been as interesting of a time in consumer tech in
Speaker 14: particular as there is today because a lot of the
Speaker 14: companies that are in the room today could be breakout
Speaker 14: companies in the next one to two.
Speaker 15: To three years.
Speaker 14: Right, These could be household names very very quickly.
Speaker 4: Gorev It's the same in the IPO market September or
Speaker 4: the little Reddit pop of late. You needed to have
Speaker 4: an AI story, you called them frontline AI names or
Speaker 4: names that needed in AI store, or even if they
Speaker 4: had nothing to do with AI. What I'm interested from
Speaker 4: you is in attendance this week. What's the proportion of
Speaker 4: what you'd call genuine AI companies builders of large language
Speaker 4: models versus those that just know in the shop window
Speaker 4: they need the letters A and I to get some funding.
Speaker 15: Yeah.
Speaker 14: Yeah, it's a good question. You know, I would say
Speaker 14: probably about you know, twenty five thirty percent of the
Speaker 14: companies that are here are what I would say AI
Speaker 14: first businesses. So you know, we have you know, companies
Speaker 14: like Perplexity and glean and and Tropic and duck Bill
Speaker 14: and eleven Labs and so on and so forth, Quora
Speaker 14: with Poe, AI, et cetera. So you know, AI first companies,
Speaker 14: that's probably about twenty five thirty percent of it. For
Speaker 14: the rest, though, there will this team is so front
Speaker 14: and central.
Speaker 6: I'll give you examples.
Speaker 14: You know, we've got a number of companies and travel
Speaker 14: tech businesses like you know, Harper and a company out
Speaker 14: of Korea, Younolgia and so on and so forth. They're
Speaker 14: going to talk about how AI is transforming their business.
Speaker 14: So it is not a you're right that it's a
Speaker 14: little bit you know, they have to talk about it.
Speaker 14: But in many cases, it is truly what is driving
Speaker 14: their business.
Speaker 8: You know.
Speaker 14: Similarly, we'll have you know, companies on the music side,
Speaker 14: and companies in fintech and in health tech, and this
Speaker 14: will be a big team across all.
Speaker 6: Of those as well.
Speaker 4: Could Sir Jeffrey's Global co head of Internet Investment, Banking
Speaker 4: and carry He mentioned one of those names that's coming up.
Speaker 3: Yeah, I cannot wait to bring you all the highlights
Speaker 3: from the Jeffreys conference. We're going to be joined by
Speaker 3: the CEO of Perplexity that's coming up next. Meanwhile, let's
Speaker 3: just go back to the public markets for a moment,
Speaker 3: because we're also keeping a close eye on Live Nation.
Speaker 5: The Justice Department may file.
Speaker 3: An antitrust complaint as soon as next month aimed at
Speaker 3: forcing Live Nation to spin off its ticket markets ticket
Speaker 3: Master ticketing business the power of Taylor Swift without a
Speaker 3: six point percent This is relybot technology.
Speaker 6: Time for talking tech.
Speaker 4: First up, Google DeepMind CEO Demis Hasbis says the company
Speaker 4: will spend more than one hundred billion dollars over time
Speaker 4: developing AI technology. The comment comes as a service was
Speaker 4: asked at an event in Vancouver about a potential one
Speaker 4: hundred billion dollars supercomputer dubbed Stargate, which is being planned
Speaker 4: by Microsoft and OpenAI, which was reported in The Information
Speaker 4: last month. Plus, Crypto dot Com is in the middle
Speaker 4: of a hiring drive that could see its head count
Speaker 4: grow by a total of fourteen hundred people. It's the
Speaker 4: latest sign of an improved employment outlook in the sector.
Speaker 4: Now remember, Crypto dot Com cut a fifth of its
Speaker 4: staff in early twenty twenty three to control costs. Following
Speaker 4: a market route, the firm began hiring again. Tokens including
Speaker 4: bitcoin rallied rivals such as coinbased Cracking and Binance have
Speaker 4: also been adding to their staff, and Meta's oversight board
Speaker 4: is investigating the company's handling of AI generated deep fakes.
Speaker 4: Earlier this year, sexually explicit deep fake images of Taylor
Speaker 4: Swift flooded Facebook and other social platforms, prompting an outcry
Speaker 4: from the White House, AI experts and other advocacy groups.
Speaker 4: According to a statement made by the board, it will
Speaker 4: evaluate whether two separate AI created images depicting nude women
Speaker 4: posted on Facebook should have been removed under Meta's content policies.
Speaker 3: Caroline, Now, I want to focus a bit more on
Speaker 3: some of Meta's business models, and indeed, what's been happening
Speaker 3: with our big take today. In the age of social media,
Speaker 3: it's very easy ed to be deceived, but the late
Speaker 3: scam is proving to be deadly. It's exploiting the shame
Speaker 3: and embarrassment of teenage boys joining us now Bloomberg's Olivia Carville,
Speaker 3: and I'm not ashamed to say that I cried several
Speaker 3: times reading the story on the train this morning. What
Speaker 3: BusinessWeek and what your reporting does so well? So often
Speaker 3: as you shine a light on a few key inter
Speaker 3: vial stories, you meet the story real. Jordan DeMay is
Speaker 3: one of them. Can you just articulate what happened to him?
Speaker 3: And ultimately how many more numbers of people this was
Speaker 3: happening to.
Speaker 16: Jordan de Maay fell victim to what is known as
Speaker 16: a sextortion scam. This is sexual extortion.
Speaker 5: Essentially.
Speaker 16: He was contacted by what he thought was a teenage
Speaker 16: girl on Instagram and she turned the conversation flirtatious. She
Speaker 16: sent him a naked photo of herself and asked for
Speaker 16: one in return. When Jordan complied and sent a nude
Speaker 16: photo back to this individual through Instagram, immediately, he was
Speaker 16: blackmailed for money. So what actually unfolded and what he
Speaker 16: had no idea of is that who was behind that
Speaker 16: account was actually con men or scammers based in Lagos,
Speaker 16: Nigeria who had been contacting hundreds of teen boys across
Speaker 16: the US, reaching out to them to try and elicit
Speaker 16: a nude photo from them to then blackmail them. Crime
Speaker 16: sextortion is now the fastest growing crime in the US.
Speaker 16: The FBI has been sending out PSAs because sadly, it's
Speaker 16: resulted in the suicide of more than two dozen teen boys,
Speaker 16: including Jordan de May and a guilty plea coming from
Speaker 16: two very young boys themselves ultimately and just adults in
Speaker 16: Lagos who are now here in the US. SNAP did
Speaker 16: respond to your reporting saying they're ramping up our tools
Speaker 16: to combat sextortion and we have extra safeguards for teams
Speaker 16: to protect against unwanted contact, and indeed matters global head
Speaker 16: of Safety you've been speaking to saying that sextortion is
Speaker 16: a horrific crime and we spent years building technology to
Speaker 16: combat it and support law enforcement in investigating and prosecuting
Speaker 16: their criminals behind it.
Speaker 5: But ultimately you're saying this is still growing.
Speaker 3: What more are stories You're hearing or indeed ways in
Speaker 3: which is it technology that ends up being able to
Speaker 3: be a force against this.
Speaker 16: Yeah, I think it's a great question. I mean, for
Speaker 16: the social media platforms, they don't want this occurring. These individuals,
Speaker 16: these bad actors are hacking into Instagram accounts to pretend
Speaker 16: to be these teen girls in order to coerce these
Speaker 16: nude photos. So for the platforms, it becomes how do
Speaker 16: we prevent this from the outset? So they're using artificial
Speaker 16: intelligence to do things like suspect or detect suspicious activity
Speaker 16: on the platform. Meta is now sending sextortion focused safety
Speaker 16: notices to teens saying, you know, this is what sextortion is.
Speaker 16: Be wary, be careful of who you're talking to. And
Speaker 16: just last week they announced that they're going to be
Speaker 16: automatically blurring nude images that are sent through the platform.
Speaker 16: So all of these steps are being taken in an
Speaker 16: effort to try and curb this crime. But from the
Speaker 16: FBI's perspective and law enforcement perspective, it's just growing too big,
Speaker 16: it's moving too fast, and the scammers are too ruthless
Speaker 16: in how they blackmail the teens. They push them to
Speaker 16: the edge and beyond to try and get as much
Speaker 16: money as they possibly can from these young boys.
Speaker 6: Olivia.
Speaker 4: This is the latest in a series of investigations you've
Speaker 4: done across quite a broad domain of AI generated content
Speaker 4: on social media, deep fake pornography, and now this piece.
Speaker 4: You talked about the efforts there, but also the challenges.
Speaker 4: Is there one outcome from your investigation since publishing the
Speaker 4: story that you can talk about anything that happened in
Speaker 4: response to your reporting.
Speaker 16: Well, I was surprised to see Meta announced just last
Speaker 16: week that they're going to be blurring neod images sent
Speaker 16: through the platform. I think that is a great step
Speaker 16: in the right direction, and you're right. I tend to
Speaker 16: focus these stories on the dark sides of social media,
Speaker 16: and there's obviously so much good that social media gives
Speaker 16: to children and young people as well. These are the
Speaker 16: edge cases, and I think it's really important for our
Speaker 16: viewers and our readers to know about the risks of
Speaker 16: social media, and specifically in this story, for young teen
Speaker 16: boys to understand maybe the person that you're messaging isn't
Speaker 16: actually who they say they are. Maybe you need to
Speaker 16: be more cautious about how you behave on social media,
Speaker 16: what you put out there to the public and how
Speaker 16: you talk to individuals who are ultimately strangers, people you
Speaker 16: don't know.
Speaker 3: I've urged everyone out there to go read your reporting
Speaker 3: and indeed the implications of it. Olivia Carville, thank you
Speaker 3: so much for spending time with us today to talk
Speaker 3: through it.
Speaker 4: Let's get back to the Jeffries Private Internet Conference. One
Speaker 4: major theme the theme is AI Perplexity. CEO arab Inshrinibas
Speaker 4: is joining us now from that conference and Perpexity, of
Speaker 4: course the developer of an AI based search engine platform.
Speaker 4: And I hear the name perplexity a lot. I know
Speaker 4: a lot of people use perplexity and a lot of
Speaker 4: people talk about perplexity. Why are you at Jeffries. What
Speaker 4: do you want to get out of it this week?
Speaker 2: I'm excited to meet people here, and you know, Perplexity
Speaker 2: is still not a household name yet. I want to
Speaker 2: be used by every person, every organization, and it always
Speaker 2: helps to spread awareness and get more people excited about Perplexity.
Speaker 4: There have been reports that you are now a one
Speaker 4: billion dollar valued startup. There is a lot of interest
Speaker 4: in your capability. Talk to us about the financial health
Speaker 4: of Perplexity right now.
Speaker 2: I think like what we announced was, you know, when
Speaker 2: I was there last time here with you with the
Speaker 2: Jeff Bezos, around five hundred and twenty million dollar evaluation.
Speaker 2: We haven't made an official announcement on a new around yet.
Speaker 2: We'll have more to share soon very shortly.
Speaker 5: Oh, come back talk to us about that for now.
Speaker 5: What strives are you making?
Speaker 3: Are people switching from say Google as a search engine
Speaker 3: to you?
Speaker 5: What do your customers say.
Speaker 15: Eravan, What is is like?
Speaker 2: They're not viewing us as like, oh, I either use
Speaker 2: you or Google. They're still happy to use Google for
Speaker 2: like quickly getting onto like a website, like say they
Speaker 2: just want to go to.
Speaker 15: Bloomberg dot com. They're just happy to use Google for that.
Speaker 2: But let's say they want to know like what what
Speaker 2: is the latest thing going on at Jeff Freeze, or
Speaker 2: like like who are the speakers at this conference that
Speaker 2: I should be aware of for my business. I think
Speaker 2: these are things are what Perplexity is more useful for.
Speaker 2: So they are beginning to see us as a different too,
Speaker 2: an answer engine that's very useful for directly coming and
Speaker 2: asking questions and doing your research and our growth in
Speaker 2: the United States. Since we announced the funding around last
Speaker 2: time along with you guys has been like really good.
Speaker 2: And that's also translated a lot to growing our revenue
Speaker 2: because we always wanted to be a tool that's used
Speaker 2: by people in the high income countries and that's beginning
Speaker 2: to show up in our numbers too.
Speaker 5: What am I a business model?
Speaker 3: Is a lot of interesting talk of how wele Google
Speaker 3: itself might start charging for its AI offerings within its enterprise.
Speaker 3: Are you seeing enterprise adoption for you and you're thinking
Speaker 3: about charging?
Speaker 15: Definitely considering it.
Speaker 2: And that would be something we should We'll be sharing
Speaker 2: soon something more on that. And the way I see
Speaker 2: it is like a lot of companies, a lot of
Speaker 2: people tell me that, you know, I wish I could
Speaker 2: use perplexity at work, but my company is banded.
Speaker 15: Yes, you know, so that's a problem to solve and
Speaker 15: we're going to work on that.
Speaker 4: I remember, what's the challenge right now for a company
Speaker 4: that is building lllms and working at this level.
Speaker 6: What is your day to day that you're facing.
Speaker 2: I mean, the biggest challenge is honestly the pace I
Speaker 2: which this field keeps changing every week. Right one point,
Speaker 2: we were all like GPT for is D model and
Speaker 2: it's like there's nothing else that matters, and everyone was like,
Speaker 2: oh yeah, and you cannot build on top of them
Speaker 2: because like they're eventually going to do all the product
Speaker 2: and like it doesn't matter.
Speaker 15: There's no independence from open AI.
Speaker 2: And then Anthropic puts out clock three and then clock
Speaker 2: three is even better than GPT four, at least the
Speaker 2: Opus model, and they're like models much better than three
Speaker 2: point five, cheap, faster, open sources, moving fast data breaks.
Speaker 15: Release the model that's like better than three point five.
Speaker 15: Mistrals keeps using.
Speaker 3: It's just the pace, and the pace of the show
Speaker 3: went too fast as well. We wish we had time
Speaker 3: with you, Aravens, turn of us perplexity, CEO, wonderful to
Speaker 3: have his thoughts.
Speaker 5: Let's bring my technology