Speaker 1: From Mahard where Innovations, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Live from Los Angeles and San Francisco.
Speaker 4: This is Bloomberg Technology coming up, cracking down on big tech.
Speaker 4: The DOJ considering a historic breakup of Google.
Speaker 5: More than a dozen US states filing lawsuits against TikTok
Speaker 5: will be joined by New Jersey's Attorney general.
Speaker 4: And we're live from Citadel's Global Macro Conference in New York.
Speaker 4: A conversation with the CEO, Pengzau is coming up.
Speaker 3: First, Let's go to our top story. Shares of alphabet
Speaker 3: are lower.
Speaker 4: Today by one point six percent. That's after the DOJ
Speaker 4: is weighing a breakup of Google over its monopolistic dominance
Speaker 4: of online search.
Speaker 3: Be goes straight to the report. Who's been all over this?
Speaker 4: Bloomberg's Leah Lyle and Leah. You reported this back in
Speaker 4: August that this might be a consideration and the DOJ
Speaker 4: would put this to the judge. What's moved on from
Speaker 4: that reporting, Leah.
Speaker 6: Yes, so now we are actually getting into the revenues phase.
Speaker 6: So last night the Justice Department put its first filing
Speaker 6: in it actually just lead out a framework of various
Speaker 6: things that it's thinking about as it is crafting a
Speaker 6: remedy proposal. They're going to have an official proposal that
Speaker 6: lays out everything that they want Google to do on
Speaker 6: November twentieth. But this was just sort of like, here's
Speaker 6: what we're thinking. These are some of the options. And
Speaker 6: the big one, of course, was the breakup.
Speaker 5: Okay, so let's get into that timeline you mentioned November
Speaker 5: twenty if we'll bring it up on the screen. The
Speaker 5: first is the sort of firming of the proposals. Then
Speaker 5: Google gets a chance next April we'll have a trial,
Speaker 5: and then by August I think of twenty twenty five,
Speaker 5: we might get some sort of decision.
Speaker 7: Explain all of that, please, Leah. Yes.
Speaker 6: So DOJ is going to put its filing in that
Speaker 6: says this is exactly what we want, you know, whether
Speaker 6: that's a breakup, data sharing, all those things, and then
Speaker 6: Google gets a chance to respond. Over the next couple months,
Speaker 6: they're going to be doing a lot more discovery again,
Speaker 6: so they're going to do interviews with Google folks, They're
Speaker 6: going to get more documents all leading up to this
Speaker 6: big two week remedy trial that will take place late
Speaker 6: April in that they're going to have witnesses testify before
Speaker 6: the judge about what would actually happen to Google's business
Speaker 6: if he takes any of these particular actions. And then
Speaker 6: he has promised that he will issue a decision in
Speaker 6: August of next year that officially wraps up the case
Speaker 6: at the trial court, and then Google can start its appeal.
Speaker 6: The appeal, you know, takes like eighteen months to two years,
Speaker 6: so we're looking at like August for the sort of
Speaker 6: like first big deadline, and then we'll go into the
Speaker 6: appeals and then you know, maybe some of this would
Speaker 6: be take place like as eighteen months to two years
Speaker 6: from now.
Speaker 4: From then, Let's just go to Google's own response, because
Speaker 4: the US judge is saying that Google's distribution agreements full
Speaker 4: close a substantial portion of the general search services market
Speaker 4: and impair rivals opportunities to compete.
Speaker 3: That's the judges take.
Speaker 4: Google's take, Is it this is pretty radical right near?
Speaker 7: Yes?
Speaker 6: I mean Google said what you found was illegal is
Speaker 6: these specific contracts. So DOJ should be focusing on the
Speaker 6: contracts and just looking at those.
Speaker 7: They say, you.
Speaker 6: Know that these these things that the Justice Department is
Speaker 6: proposing go way beyond those contracts. They're talking about, you know,
Speaker 6: breaking up our company. They're talking about making us sell
Speaker 6: off Chrome, which wasn't even really part of the case
Speaker 6: that much because Google owns Chrome, and so it is
Speaker 6: pushing back pretty hard on a lot of these remedies,
Speaker 6: the breakup in particular. The other thing that they have
Speaker 6: said is, you know, the Justice Department says that AI
Speaker 6: is a very big issue here because a lot of
Speaker 6: the data that Google uses to build its search results
Speaker 6: is the same data that is used to build its
Speaker 6: AI products. And the Justice Department says that Google shouldn't
Speaker 6: sort of get to benefit from the illegal conduct in
Speaker 6: the search market, in the AI market, and so it
Speaker 6: wants to put some limits on that. And Google says,
Speaker 6: wait a second, we were talking about search, that's not AI.
Speaker 6: You shouldn't get to like make some limits on us
Speaker 6: in this completely other different field. So that will be
Speaker 6: a big issue for the judge to decide next year.
Speaker 5: Bloombos lea nil in a late night for you in
Speaker 5: DC in an early morning too important reporting, but the
Speaker 5: stocks on the move. Meanwhile, Google CEO sind the pitch
Speaker 5: I sat down with David Rubinstein for his show Pid
Speaker 5: to Peer Conversations. He's a reminder about what he had
Speaker 5: to say about the mounting legal woes and antitrust suits
Speaker 5: from the DOJ.
Speaker 8: We definitely disagree with the ruling, but be still in
Speaker 8: the middle of the di remedys phase and you know
Speaker 8: we will appeal. This process will likely take many years,
Speaker 8: and you know, I'm confident given that you know, VR
Speaker 8: focused on innovating using technology will do well in the
Speaker 8: long run.
Speaker 5: You can see that full interview tonight on the David
Speaker 5: Rubinstein Show, Peer to Peer Conversations, nine pm New York Time.
Speaker 4: Caroline, let's just dig into anti trust the risk to
Speaker 4: big tech right now. Jason Bett's and Meerorprice Financial Private
Speaker 4: wealth Advisor is with us. And look, the stock is
Speaker 4: down for alphabet but by one point six percent, the
Speaker 4: biggest move since all October the seventh. It doesn't feel
Speaker 4: like many people are pricing in a breakup to this
Speaker 4: extent right now?
Speaker 3: Is it a risk? Anti trust issues?
Speaker 9: Anti trust issues in general make a very, very an
Speaker 9: eye catching headline. Certainly, it's what all of us are
Speaker 9: talking about right now. We see this play out every
Speaker 9: several years in the technology space and in pharmaceuticals and
Speaker 9: and energy with the anti trust issues. My feeling is
Speaker 9: it is it's such a long timeline and there's so
Speaker 9: many what ifs that we can speculate on. But as
Speaker 9: actual investors looking at fundamentals and trying to navigate this,
Speaker 9: I really don't think there's anything that we should be
Speaker 9: thinking about doing differently as we approach our investment portfolios.
Speaker 5: Well, hold on the stocks down one point six percent
Speaker 5: in a market that's up, and we showed that timeline,
Speaker 5: so you get to August the next year, and a
Speaker 5: hypothetical the judge orders the breakup. Now they'll counter it
Speaker 5: in court, but let's say it happens.
Speaker 7: How do you prepare for that?
Speaker 9: I mean, you prepare for it like you prepare for
Speaker 9: anything else, in my opinion, which is making sure that
Speaker 9: everything within the investment portfolio looks okay under the hood,
Speaker 9: and whether you know, regardless of any individual security, you
Speaker 9: want to make sure that you don't have too much
Speaker 9: exposure in anyone individual secure already.
Speaker 2: Where if the worst case scenario does play out, that it.
Speaker 9: Could have somewhat in reparable consequences on your financial future
Speaker 9: or your wealth other than that, you know, with our firm,
Speaker 9: we take a really holistic approach and we take a
Speaker 9: discipline approach. So while this is a it's a very
Speaker 9: eye catching headline today, it's something that we're going to
Speaker 9: be talking about, certainly for the next couple of days,
Speaker 9: if not for the next few weeks.
Speaker 2: It's going to be a long process.
Speaker 9: And the idea of trying to do anything differently with
Speaker 9: positioning right now other than making sure that your that
Speaker 9: your positions are not overweighted or underweighted for that matter,
Speaker 9: I just don't really see anything else that that that
Speaker 9: requires material attention right now today.
Speaker 5: Well, it's interesting you use the phrase single security, but
Speaker 5: basically most of the megacap tech names have some form
Speaker 5: of antitrust scrutiny on them in multiple jurisdictions, and so
Speaker 5: in aggregate, how much of an anxiety is it then,
Speaker 5: if you think about it through that lens.
Speaker 9: Yeah, I mean, if you're properly diversified, not that much
Speaker 9: much of anxiety. Because if the worst case scenario is
Speaker 9: what you see is some sort of shift in leadership
Speaker 9: within you know, the more specialized technology sectors. So again,
Speaker 9: it's just at these stages right now, Like I said,
Speaker 9: we see this time and time again over my last
Speaker 9: twenty seven years in this industry. Certainly with technology and
Speaker 9: AI these stakes are higher, but we've seed it in
Speaker 9: pharma and energy and technology in the past. Generally speaking,
Speaker 9: we don't see a whole lot of you know, movement
Speaker 9: materially within the markets or sometimes within the sectors as
Speaker 9: a result of these anti trust headlines.
Speaker 2: But time will tell.
Speaker 7: Time will tell.
Speaker 4: The anxiety here and now for the market in many
Speaker 4: ways is what revenue, what profitability looks.
Speaker 3: Like right here, right now for AI.
Speaker 4: I know you've been thinking writing a lot on this, Jason,
Speaker 4: and we actually get another good sign. T SMC's numbers
Speaker 4: come in and they come in strong. We'll be digging
Speaker 4: into that.
Speaker 3: In a moment.
Speaker 4: But what are you getting in terms of a gut
Speaker 4: check on the valuations of these mega caps?
Speaker 1: Yeah?
Speaker 9: Absolutely, My gut check is that valuations are stretched.
Speaker 2: Now.
Speaker 9: Having said that, it's the markets, and the markets do
Speaker 9: things that we don't expect.
Speaker 2: All the time.
Speaker 9: But if I look at the valuations and I look
Speaker 9: at what, in my opinion is kind of a more
Speaker 9: or less a best case scenario that's playing out in
Speaker 9: terms of the expectations on future earnings.
Speaker 2: It's tough to.
Speaker 9: It's tough to see these levels go materially higher without
Speaker 9: continued breakout positive data. That said, we've had that to
Speaker 9: your point, and we may see that moving forward. But
Speaker 9: I would just take it back again to making sure,
Speaker 9: regardless of what happens moving forward, look under the hood
Speaker 9: of the portfolio, make sure that you're not too overweighted
Speaker 9: in any individual names or in any one particular sector.
Speaker 4: What about therefore, the macro picture, if you're thinking about
Speaker 4: anyone sector, Look, it's been impossible not to be overweight
Speaker 4: and to be extraordinarily heavily weighted towards technology because of
Speaker 4: the year valuations.
Speaker 3: Of these companies.
Speaker 4: How do you continue to rebalance, particularly when you're thinking
Speaker 4: about what interest rates are up to?
Speaker 9: Yeah, well, I mean, regardless of interest rates, when we're rebalanced,
Speaker 9: and obviously we need to you know, we want to
Speaker 9: do that. I think investors have actually gotten away from
Speaker 9: that a lot over the last year or two, and
Speaker 9: that's part of the reason why we've probably seen this
Speaker 9: excessive leadership in these megacap technology stocks. But in terms
Speaker 9: of other septors that I may like in the markets
Speaker 9: right now, you know, I've said this for about the
Speaker 9: last six to twelve months that I really like utilities,
Speaker 9: not because I thought utilities would be out performing the
Speaker 9: S and P over the last year year to date,
Speaker 9: but just simply because they were so undervalued and the
Speaker 9: valuations were delicious, and I think they're still attractive and
Speaker 9: there's still room for growth there.
Speaker 2: I like healthcare because of it.
Speaker 9: It's because it has actually underperformed, and I think it
Speaker 9: might be due for some mean reversion. And to your point,
Speaker 9: with interest rates, if and when they continue to come down,
Speaker 9: then that sets the table again for conversation about it.
Speaker 9: More active mergers and acquisitions market that's good for healthcarecter,
Speaker 9: especially good for biotech.
Speaker 7: You mentioned utilities.
Speaker 5: Are you one of many that are now interested in
Speaker 5: this groundbreaking new field called nuclear energy that could be
Speaker 5: powering all of the AI infrastructure investment that we'll see.
Speaker 9: At this moment, I would say I would say no,
Speaker 9: not in any above average fashion. We're obviously looking at
Speaker 9: and considering all the information in the news and the
Speaker 9: data points, but there's not any particular over over the
Speaker 9: level over excitement, for lack of a better way to
Speaker 9: put it, this time concerning that all right?
Speaker 5: Oh, thanks to Jason Betts for Ameror Price. Good to
Speaker 5: catch up and have you here on Bloomberg Technology. Now
Speaker 5: coming up on the show, two DeepMind scientists and now
Speaker 5: no Bell Prize winners for their research using artificial intelligence.
Speaker 5: Fascinating conversation to come. This is Bloomberg Technology to Google
Speaker 5: DeepMind scientists and now Nobel Prize winners. They're sharing the
Speaker 5: twenty twenty four Nobel Prize in Chemistry with US professors
Speaker 5: for their breakthrough research into proteins, which were developed through AI.
Speaker 5: Bloomberg's Mark Bergen reported on it and joins us from London.
Speaker 5: I've never seen you Mark so excited about the intersection
Speaker 5: of science and technology.
Speaker 7: What have you been writing about? Oh, tremendously excited.
Speaker 10: This is you know, this has actually come earlier than
Speaker 10: we expected, but we knew it was something that the
Speaker 10: co founder and CEO deep Mind, Demis Hassabis, who was
Speaker 10: one of the award winners. This morning we've reported this
Speaker 10: to something he's told colleagues.
Speaker 7: This has been an ambition of his.
Speaker 10: Our colleague from the Bloomberg Opinion side, Primie also and
Speaker 10: her great book. It just came out, I think she
Speaker 10: said like he told people he wanted the company to
Speaker 10: win at least three to five over the course in
Speaker 10: the next few years. So perhaps this is the first
Speaker 10: of many.
Speaker 4: Let's just go into John Jumper of deep Mind and
Speaker 4: Demis Haseb.
Speaker 7: What is it.
Speaker 3: It's the Alpha fold work that they did.
Speaker 4: Is that really what's pushed them to this first of
Speaker 4: what maybe Demis hopes will be many Nobel prizes.
Speaker 10: I think so, I mean, this is my understanding of Demosis.
Speaker 10: Priority has been using AI for science. You know, it's
Speaker 10: certainly been overshadowed by chat, Gibt and generative AI. And
Speaker 10: there's some when we've done some reporting about how some
Speaker 10: of this work has been overshadowed inside of Google and
Speaker 10: deep Mind right where they have I think for commercial
Speaker 10: reasons shifted a lot of their research priorities towards Gemini
Speaker 10: and towards generative AI.
Speaker 7: But they obviously I still have as a.
Speaker 10: Team working on on Alpha Fold. They've commercialized or trying
Speaker 10: to commercialize that rather with this new alphabet company Isomorphic
Speaker 10: Labs that Demis and his spare time also runs.
Speaker 7: And that's when we said.
Speaker 10: They did a press conference Demis and John Jumper this
Speaker 10: afternoon about this prize, and you know, one of the
Speaker 10: things they talked about was just was the continued work
Speaker 10: around drug discovery.
Speaker 5: Elsewhere in Nobel Prize winners, Jeffrey Hinton won the prize
Speaker 5: for physics his work on neural nets, and in a
Speaker 5: presser he threw a bit of shade listen to this.
Speaker 11: So I was particularly fortunate to have many very clever students,
Speaker 11: much cleverer than me, who actually made things work. They've
Speaker 11: gone on to do great things. I'm particularly proud of
Speaker 11: the fact that one of my students fired Sam Oltman.
Speaker 5: Particularly proud that one of his students fired Sam Outman.
Speaker 5: You've got a free pass. Just your comment on that, Mark.
Speaker 7: I mean, you know, I guess the karma.
Speaker 10: It would be a great luxury to be one of
Speaker 10: the most senior respected scientists in your field, pretty much
Speaker 10: quite blancheous anything.
Speaker 7: But even then, I think, I mean, he was at Google.
Speaker 10: He has fascinating history, right he left left Google and
Speaker 10: talked about kind of gave a really adamant warning about
Speaker 10: some of the dangers and risks of AI. My sense
Speaker 10: is that, and I haven't actually spoken the jeff hinted
Speaker 10: about this, but like he sees Demis Hasibus as a
Speaker 10: scientist and maybe a certainly researcher, some researchers in the
Speaker 10: field as being a scientist and some being executives and CEOs,
Speaker 10: and maybe putting that to Camp and that's you know,
Speaker 10: we are. Google obviously wants to marry those both those worlds,
Speaker 10: and we'll see there's always going to be tension between
Speaker 10: those two.
Speaker 12: Obviously, AI really cleaning up on these Nobel Prizes, and
Speaker 12: of course Jeffrey Hinton was mentioning about Elias at Skiver,
Speaker 12: of course in his role within the Sam Altman Auster matt.
Speaker 3: Berg and we thank you so much. Also in the
Speaker 3: AI space, let's talk about it.
Speaker 4: Some Alman's Open Ai being accused by even Mask of
Speaker 4: harassment in a legal fight that's unfolding as a startup
Speaker 4: ways a plan to shift to a for profit business model.
Speaker 4: Musk filed a complaint in August claiming that open AI's
Speaker 4: co founders manipulated him into investing in the startup, which
Speaker 4: at the start was a nonprofit. Numbers Multinag now joins
Speaker 4: us to explain that back and forth here because there
Speaker 4: have been other legal wranglings between en Or Musk and
Speaker 4: open Ai and open AI now saying, look, you're harassing us.
Speaker 13: Yes, you know, open AI and Musk are now added again.
Speaker 13: This time open AI is lashing back at Musk's lawsuit
Speaker 13: which was fired in August, and saying, you know this
Speaker 13: is harassment. You know, we've been accused of corruption and
Speaker 13: racketeering here. And what they're seeing is that actually Musk
Speaker 13: is doing this to gain a competitive advantage with this XAI.
Speaker 3: So they're saying we're being.
Speaker 13: Harris chair and they've asked a judge actually to throw
Speaker 13: out this lawsuit. So yeah, this sort of saga continues,
Speaker 13: and we'll have to see what happens in terms of
Speaker 13: whether this suit survives in quote or not.
Speaker 5: Multi So open AI is accusing Elon Mask of harassment,
Speaker 5: and Elon Musk is saying that this is a textbook
Speaker 5: tale of altruism versus greed. The bit that I'm struggling
Speaker 5: with is what is Elon Musk trying to achieve? What
Speaker 5: is his end goal in the suits that he is
Speaker 5: filing against open ai.
Speaker 1: God.
Speaker 13: So what he says is he feels like he's been deceived,
Speaker 13: and you know, his lawsuit talked about deceit of Shakespeare
Speaker 13: in proportions. So I think he appears to be hurt
Speaker 13: here and says I've been deceived. You know, you manipulated
Speaker 13: me into investing here. You started off with this founding
Speaker 13: mission of being this you know, company that would benefit
Speaker 13: human good and here you are now sort of shifting
Speaker 13: to this for profit model. So it definitely seems like
Speaker 13: he appears hurt in seat of the words that are
Speaker 13: being used in the lawsuit. And what openI says is, Hey,
Speaker 13: you're just using legal warfare here to hurt us in benefit.
Speaker 2: Your own company.
Speaker 13: Because this new lawsuit which was filing August, Open thee
Speaker 13: I says, is adding on some extra more intense claim
Speaker 13: such as racketeering and corruption. So yeah, so Open thee
Speaker 13: Eye says, you know you're just doing this for your
Speaker 13: own benefit and trying to court us and using the
Speaker 13: court system to basically get.
Speaker 3: Back at us.
Speaker 7: Bloomberg's multi Nayek, thank you very much. Time now for
Speaker 7: AI and action.
Speaker 5: Let's bring in pre Cyprosord, co founder and general partner
Speaker 5: of the newly founded venture firm Touring Capital, for a
Speaker 5: take on how to identify the best industries for AI
Speaker 5: investment and prayer. A lot of my work has been
Speaker 5: looking at a wide range of let's say tech sector
Speaker 5: subdivisions where AI is having an impact.
Speaker 7: It can be anything from.
Speaker 5: Software to hardware, industrial, ev, robotics, healthcare. And right now
Speaker 5: everyone in anyone is slapping a sticker on themselves saying
Speaker 5: we are somehow AI adjacent. But that can be an
Speaker 5: opportunity for you. You've setting yourselves up to invest where
Speaker 5: do you start.
Speaker 14: Right? Right?
Speaker 15: Definitely, Actually thank you for mentioning that. So you know,
Speaker 15: our thesis at touring is to really partner with entrepreneurs
Speaker 15: who are building AI enabled aidjacent software that really solves
Speaker 15: real world problems and enhancas productivity across different industries. But
Speaker 15: you know the answer is, how do you actually choose
Speaker 15: which industries that are so ripe for AI? And we
Speaker 15: typically look for industries that are general laggards and sort
Speaker 15: of that initial wave of digital transformation and who in
Speaker 15: a lot of cases still rely on pen, paper and excel,
Speaker 15: and we think those are the opportunities for the most advancement,
Speaker 15: at least the low hanging fruit that AI can initially tell.
Speaker 4: Looking at some of the startups that you've already invested in,
Speaker 4: we've got your put Photio up for us. Now, Pixis
Speaker 4: that's marketing, de Looper, that's financial services, car dealership with NUMA.
Speaker 4: I can understand why that's perhaps slow to pick up
Speaker 4: on AI. But why do you feel that these areas are.
Speaker 3: Right for disruption from artificial intelligence?
Speaker 15: Yeah, no, that's a great question. So we typically use
Speaker 15: a framework when we think of whether a particular vertical
Speaker 15: or an industry is right for AI transformation. The first
Speaker 15: thing that we look for is a large total addressable market,
Speaker 15: an actual sort of friction or pain point that's really
Speaker 15: experienced in that market. And then we again prefer relatively
Speaker 15: old school industries who still rely on pen, paper and
Speaker 15: excel for the most part, but are now sort of
Speaker 15: forced to deal head on with the tailwinds from AI
Speaker 15: adoption in order to actually remain competitive in that industry.
Speaker 15: And lastly, we look for sort of immediate ROI that's
Speaker 15: delivered from the product to the end user in that market,
Speaker 15: creating sort of this strong propensity to pay. And I
Speaker 15: always say, the best opportunities an AI often seem niche
Speaker 15: to the industry outsider, but are sort of life changing
Speaker 15: to that end user. And you know, as you pointed out, yeah,
Speaker 15: as you pointed out, our investment in Numa is sort
Speaker 15: of a great example of all of this. It's an
Speaker 15: AI communication platform that's sort of purpose built for service
Speaker 15: professionals like car dealerships to use.
Speaker 5: Really really quick, not just a media ROI. But I
Speaker 5: kind of find that companies are shrinking. You can have
Speaker 5: a five or ten person operation that's doing well. Would
Speaker 5: you invest there.
Speaker 15: A five or ten person company?
Speaker 7: You mean a start? Yeah, yeah, I have with serious money. Yeah, yeah,
Speaker 7: absolutely So.
Speaker 15: We typically are touring invest in Series B companies, so
Speaker 15: companies in that early inflection growth point where you have
Speaker 15: about three to ten million of revenues, right, so you know,
Speaker 15: in a lot of cases it can be companies as
Speaker 15: small as call it, fifteen employees, twenty employees.
Speaker 7: So for sure, absolutely we're.
Speaker 3: Going to have to wrap it up. I'm afraid.
Speaker 4: Pria Cyprisad, thank you so much for your time. Co
Speaker 4: founder and general partner at Touring Capital. Welcome back to
Speaker 4: Blue Meg Technology. I'm Caroline Hyde in Los Angeles.
Speaker 7: And Amed Lovelow in San Francisco.
Speaker 5: A quick check in on the markets we are i'd
Speaker 5: say modestly higher and technology is kind of leading the
Speaker 5: way CPI data is what we're all waiting for. Semiconductors
Speaker 5: doing well the names you'd expect, and that makes alphabet
Speaker 5: the parent of Google's decline all the more pronounced. We've
Speaker 5: gone big on that story in the show the preliminary
Speaker 5: proposal of the DOJ to a judge that one option
Speaker 5: is to break up Google in the context of antitrust.
Speaker 5: Will continue to track it, and as we said, it
Speaker 5: will be over a number of months that that process
Speaker 5: plays out. Another name that I'm looking at is Tesla.
Speaker 5: Earlier today, I broke a story with my colleague Dana
Speaker 5: Holr and Karra Coulson that one of the things that
Speaker 5: Elon Musk will talk about at we robot the Robotaxi
Speaker 5: event is the pathway for FSD to be used with
Speaker 5: semi truck. And if you look at that kind of
Speaker 5: ten am Eastern time mark, the start went from negative
Speaker 5: to positive territory. I think there's a lot of interest
Speaker 5: around that story about the future of semi truck.
Speaker 7: But we're waiting what are we going to get.
Speaker 5: We're going to get a purpose built robotaxi of some
Speaker 5: description that is the markets if you're just joining us elsewhere,
Speaker 5: let's turn our attention to New York where the Citadel
Speaker 5: Securities Global Macro Conference is underway. Bloombergsh and Ali Bassak
Speaker 5: is with Citadel's security CEO, Pengjau.
Speaker 7: Listening.
Speaker 1: Through that are already had in many of these ins listens.
Speaker 1: So I think we will see at least for this
Speaker 1: next period an increased adoption of using AI as productivity
Speaker 1: of tools. Internally, we're still some distance away both farm
Speaker 1: and technological perspective, but also importantly if a regulation and
Speaker 1: even legal perspective, and you have further clarity and perhaps
Speaker 1: wee a few of these cases now would test our
Speaker 1: court system and regulatory system in term of what is
Speaker 1: going to be okay, what is going to be acceptable
Speaker 1: when it comes down to actually bringing in generative via
Speaker 1: technology all the way through to the user. We're still
Speaker 1: some distance away from them.
Speaker 14: I want to get into what would kind of break
Speaker 14: down those limitations, what it would unlock. But before that,
Speaker 14: you mentioned open AI. Another thing about a year ago
Speaker 14: is many financial companies would say we are hesitant to
Speaker 14: work with a third party because of the liability, because
Speaker 14: of the risks, and more and more you've seen more
Speaker 14: financial services companies work with open ai, work with the
Speaker 14: anthropic what have you? Are you working with open ai
Speaker 14: and other players as well.
Speaker 1: We use we partner with most of the top providers
Speaker 1: open ai, you know, I think from our perspective, it's
Speaker 1: they've been valuable partners. And then the other part of
Speaker 1: this is it's crucially important for us to be informed
Speaker 1: on the cutting edge, even if not every upgrade and
Speaker 1: every release every week is necessarily going to lead to
Speaker 1: real changes for us internally, we want to be on
Speaker 1: that releational We want to be examining that. We want
Speaker 1: to stay up today. What is becoming possible and that's
Speaker 1: moving every week, that's moving every week.
Speaker 3: What is becoming possible?
Speaker 14: What does working with open ai do for you that
Speaker 14: you wouldn't have been able to do before.
Speaker 1: I think some of the there's a lot of different examples.
Speaker 1: I think some of the key workflows that was viewed
Speaker 1: as uniquely possible if you had a lot of certain
Speaker 1: type of talent are now being transferred from a heavily
Speaker 1: high value, human labor intensive part of the workflow to
Speaker 1: being heavily optimals automated. Even things like debugging right, things
Speaker 1: like hey cold reviews, Those were things that consume the
Speaker 1: very large amount of high value developer resources today that's
Speaker 1: being somewhat replaced even in core areas of our model building.
Speaker 1: I'm not going to get into a level of details.
Speaker 1: There's a certain part of the workflow that consumes a
Speaker 1: lot of our most valuable researcher time are also becoming
Speaker 1: a much more automated. So again, I come back from
Speaker 1: the perspective, less revolutionary change from the product offering perspective,
Speaker 1: but more of a change from a productivity perspective. If
Speaker 1: I can get if I can take this group of
Speaker 1: thirty of the brightest, smartest, most innovative researchers in capital
Speaker 1: market and get twenty percent of activity getting out of
Speaker 1: these thirty, that's like hiring six international math on empirical
Speaker 1: medalists just like that, and I'll do that every day.
Speaker 2: Incredible.
Speaker 14: So what does this mean in terms of your performance
Speaker 14: as a company. You know that's been rumored forever that
Speaker 14: Citadel Securities would seek an IPO at some juncture, And
Speaker 14: so is this helping you kind of grow your margins
Speaker 14: much much faster into a moment like that?
Speaker 1: So there's two things. So well, first of all, we'll
Speaker 1: make sure Bloomberg is well informed if we ever seriously
Speaker 1: a considered ipel are you seriously considering no, and you
Speaker 1: all will read it Bloomberg first, I'm sure, and putting
Speaker 1: that aside, I like how you slip that in there,
Speaker 1: But putting that aside, I think it goes in both ways.
Speaker 1: I think for companies, there's certainly I would say there's
Speaker 1: a risk for firms to not stay with the speed
Speaker 1: of innovation, and it's not necessarily generative. Ass companies are
Speaker 1: spending time and resources in figuring out how they can
Speaker 1: leverage more automation and technology in increasing their productivity to
Speaker 1: stay on that frontier, right, And the firms that cannot
Speaker 1: keep up in doing that, not only will they not win,
Speaker 1: they will lose. Okay, And I think the top firms
Speaker 1: in every field, including our field, are spending a really
Speaker 1: high quality time being very intentional in thinking about where
Speaker 1: they're going to allocate their resources to keep up with
Speaker 1: that innovation. At the same time, I also believe firms
Speaker 1: like ourselves on the other end of this will win
Speaker 1: based on our understanding of the market, Based on our understanding,
Speaker 1: yet again, on what are the most important and most
Speaker 1: valuable problems our clients want to solve and that market
Speaker 1: want to solve. We are building better tools, but those
Speaker 1: better tools will not be nearly valuable enough unless we
Speaker 1: use them to solve the most valuable problems. And we
Speaker 1: do need those humans going back to that to be
Speaker 1: all things AI.
Speaker 4: We've blue mentioned Ali, Bassek and Beans out of citydel securities.
Speaker 1: Ed studying the market.
Speaker 5: All right, let's get some more news in today's talking
Speaker 5: tech and first up, social media platform X has been
Speaker 5: ordered to release old data from twenty twenty two on
Speaker 5: fake users that Elon Musk tried to use to back
Speaker 5: out of the deal to buy Twitter. A Delaware judge
Speaker 5: has ordered X to file unredacted versions of several documents,
Speaker 5: as well as some Slack messages.
Speaker 7: Plus.
Speaker 5: Shares of chip maker TSMC higher today after the company
Speaker 5: posted a better than expected thirty nine percent rise in
Speaker 5: quarterly revenue. The main chip maker to envis year and
Speaker 5: Apple reported September quarter sales of twenty three point six
Speaker 5: billion dollars, calling analyst concerns that AI spending is tapering off,
Speaker 5: and Nvidio CEO Jensen Jang says the future of AI
Speaker 5: will be in services that can quote reason. Speaking on
Speaker 5: a podcast hosted by arm Holding CEO Rene hass Huang
Speaker 5: says next gent tools will be able to respond to
Speaker 5: queries by searching and reflecting on their own conclusions, but
Speaker 5: prefaces that it all requires.
Speaker 7: The cost of computing to come down.
Speaker 4: First, Caroline coming up the search for more energy maybe
Speaker 4: in space. We speak with the co found Robin hood
Speaker 4: Age that about his new company. He for Flux, that's
Speaker 4: next to Bloomberg Technology. TikTok It has been sued by
Speaker 4: over a dozen states for allegedly deceiving users about its
Speaker 4: safety for children and for using addictive features to keep
Speaker 4: kids on the platform longer to maximize profits. One of
Speaker 4: those states is New Jersey, As Attorney General Matt Platkin
Speaker 4: joins US now for more. Attorney General, why pick this
Speaker 4: particular fight with TikTok It's already being sued by the
Speaker 4: FEDS for child privacy issues. It might even be banned
Speaker 4: in the United States. Tell us the underlying reason for pursuing.
Speaker 16: This, Well, we know we're facing a youth mental health
Speaker 16: crisis in this country, and unfortunately New Jersey is no exception.
Speaker 16: And as we have shown in a number of actions,
Speaker 16: we know that social media companies have knowingly targeted our
Speaker 16: youth in ways that have damaged their mental health and
Speaker 16: caused them real harm. And then, to make matters worse,
Speaker 16: they've told the public that these products are safe when
Speaker 16: they themselves know they are not. So the lawsuits that
Speaker 16: New Jersey and several other states filed yesterday are meaning
Speaker 16: different than the lawsuit that you reference that the Department.
Speaker 7: Of Justices filed.
Speaker 16: It's for violation of our state consumer laws for again
Speaker 16: misleading the public about the safety of their products and
Speaker 16: deliberately treating our youngest residents as nothing more than commodities.
Speaker 4: Let's talk about what's materially different from October twenty fourth
Speaker 4: last year, when New Jersey and other states also sued Meta,
Speaker 4: the parent company of Instagram or Facebook, again to protect children,
Speaker 4: mental health and the like.
Speaker 3: How are the two actions different. What do you see
Speaker 3: in particular with TikTok.
Speaker 16: Well, legally, they're distinct lawsuits, and these investigations have been
Speaker 16: underway for some time, and investigations of these kinds take time.
Speaker 16: But as a general matter, we know that social media
Speaker 16: companies like Meta and TikTok have targeted our youth, have
Speaker 16: deliberately taken steps to keep our youth on their platforms
Speaker 16: for long periods of time, have implemented features like TikTok
Speaker 16: has with respect to body image, features that allow you
Speaker 16: to put yourself on TikTok as if you had plastic
Speaker 16: surgery or extensive makeup that cause real harm to kids'
Speaker 16: mental health. That's created body dysmorphia crises and mental health crises,
Speaker 16: particularly amongst young girls. And so in that sense, the
Speaker 16: lawsuits are similar in that you see similar patterns across them,
Speaker 16: but they are distinct lawsuits and Meta because the Department
Speaker 16: of Justice had not filed a federal claim about children's
Speaker 16: privacy in Meta, we filed a claim there under that law,
Speaker 16: whereas the Department of Justice, as you noted, had stepped
Speaker 16: in on TikTok, so we did not need.
Speaker 7: To file a federal claim.
Speaker 16: But otherwise there are some similarities across the two complaints.
Speaker 5: Well to any general plat kid forgive me for many
Speaker 5: of you'll constituents that that's a fair question.
Speaker 7: What's the point.
Speaker 5: There is a federal suit against TikTok, there's a legislative
Speaker 5: effort to get it banned in this country, and you've
Speaker 5: chosen a long path with this specific initiative, Why do
Speaker 5: it if there are all those others already in place,
Speaker 5: some of which have analogous skulls with what you're trying
Speaker 5: to achieve.
Speaker 16: Well, the federal lawsuit plain and simple covers different conduct. Here.
Speaker 16: We're talking about deliberately misleading the public about the safety
Speaker 16: of their products, about telling people that their product is
Speaker 16: safe when they know it's not, when the United States
Speaker 16: Surgeon General has said publicly it's not that they should
Speaker 16: have a warning label on it. And kids are using
Speaker 16: TikTok in particular, for hours and hours a day, when
Speaker 16: we know just a few hours of TikTok a day
Speaker 16: can cause significant mental health harms to our kids. Now,
Speaker 16: I'm the state's attorney general. I'm the chief law enforcement
Speaker 16: officer for nine point three million people. My job is
Speaker 16: to keep them safe. And when I see a company
Speaker 16: peddling a product targeting our youngest residents, treating them for
Speaker 16: nothing more than dollar signs, and putting profit ahead of
Speaker 16: their mental health, then I have an obligation to step
Speaker 16: in and protect them. And that's what this lawsuit and
Speaker 16: the lawsuit against Meta is doing.
Speaker 7: Mister Patkin. If this proceeds and goes before a jury.
Speaker 5: How will you show that what TikTok does is intentional,
Speaker 5: that it is malicious in your accusation that they are
Speaker 5: profiting off young users.
Speaker 16: Well, I'm not going to speak to what we'd eventually
Speaker 16: show at a trial, but I think our complaint lays
Speaker 16: out very clearly what TikTok knew and the harms that
Speaker 16: their products have caused.
Speaker 7: Including the.
Speaker 16: Result is that we have essentially compulsive users of TikTok
Speaker 16: products ages thirteen to seventeen throughout our state and throughout
Speaker 16: this country, and we know at the same time we're
Speaker 16: experiencing a massive spike in mental health challenges for our youths, suicidal, ideation, depression, anxiety,
Speaker 16: all up at historic levels. So we're very confident in
Speaker 16: the case that we've brought against TikTok. We obviously wouldn't
Speaker 16: bring a lawsuit like this if we didn't feel very
Speaker 16: confident in our case and if we weren't prepared to
Speaker 16: take on what is as with Meta, one of the
Speaker 16: largest companies in the world. And my message is simple,
Speaker 16: we're ready for that fight.
Speaker 5: New Jersey Attorney General Matt Platkin, thank you very much
Speaker 5: for your time. The answer to the world's energy problems
Speaker 5: may be in space. A for Flux is a new
Speaker 5: company with the aims of harnessing solar energy using lasers
Speaker 5: and low Earth orbit satellites in order to deliver renewable globally.
Speaker 5: CEO by Jubart joins us in San Francisco for more.
Speaker 5: It's out of science fiction, but you can kind of
Speaker 5: see it. So explain the basics of the technology, how
Speaker 5: this would work.
Speaker 17: Yeah, so thanks for having me on. Like I said,
Speaker 17: the name of the company is Ether or Flux, and
Speaker 17: the mission is to take this idea of space solar power,
Speaker 17: which is an old NASA Department of Energy idea, and
Speaker 17: make it a real life thing. And the basic concept
Speaker 17: is you collect solar power and orbit and by doing
Speaker 17: so you're able to be met down to locations virtually globally,
Speaker 17: and by doing so address a lot of the limitations
Speaker 17: of renewable energy and the INNERMITZI.
Speaker 5: To address what the audience might be wondering. I know
Speaker 5: you as one of the co founders of Robin Hoods.
Speaker 5: Your background, though, is in physics. You have a family
Speaker 5: tie to NASA. How did this company come about?
Speaker 17: Yeah, so, my love of physics and space industry actually
Speaker 17: goes back really long.
Speaker 7: So I grew up with my.
Speaker 17: Dad studying the United States. He worked at NASA as
Speaker 17: when I was a kid, and I studied physics and
Speaker 17: math at Stanford, And so I've kind of had a
Speaker 17: love of the space industry from childhood and through building robinhood.
Speaker 17: The passion for looking for commercial opportunities in space, how
Speaker 17: can we make space technology useful for people on Earth
Speaker 17: has kind of been a love of mine for a
Speaker 17: long time, and in particular asking the question about how
Speaker 17: can we bring natural resources from space down to Earth?
Speaker 17: And I think energy is one of the natural choices
Speaker 17: for that bringing it.
Speaker 3: Down from space to Earth.
Speaker 4: You said, beam it down, like get into the nity
Speaker 4: and gritty, how does one beam it down?
Speaker 17: Yeah, So the way that we're going to be transferring
Speaker 17: power from space to Earth is actually using a constellation
Speaker 17: of satellites in low Earth orbit, and each one collects
Speaker 17: power and then uses infrared lasers to find a ground
Speaker 17: station and actually transmit power down to it in the
Speaker 17: same way that you know you collect solar power with
Speaker 17: solar power traditional panels. With this, you'll have a bespoke
Speaker 17: ground station that forms a connection with a satellite and
Speaker 17: receives power from space. So where companies like SpaceX have
Speaker 17: launched a constellation of communications satellites, this would be a
Speaker 17: constellation of energy satellites.
Speaker 4: You're financially backing this by you obviously, with the help
Speaker 4: of a very successful startup you were co CEO of previously.
Speaker 4: What is the funding that will be necessary, who will
Speaker 4: you bring on board?
Speaker 3: How much will this cost?
Speaker 17: So right now the company is funded by me, but
Speaker 17: as we grow the company, you know, we're talking about
Speaker 17: building a large number of satellites, so it'll take more
Speaker 17: capital to do that. In terms of the scaling of
Speaker 17: the business. One of the opportunities that we're looking at
Speaker 17: in the near term is going to be how can
Speaker 17: we solve problems that are real on planet Earth today?
Speaker 17: And the stuff that we're focusing on is how can
Speaker 17: we deliver power to places that are either contested or
Speaker 17: difficult to reach. So think military applications like for deployed
Speaker 17: bases or things like remote mining applications.
Speaker 5: Got to ask, sounds amazing, but are we talking theoretical
Speaker 5: physics or are we talking applied physics?
Speaker 17: Yeah, So this was one of the core ideas behind
Speaker 17: this approach, which is we view this as a primarily
Speaker 17: an engineering and economics problem, not a hard science problem.
Speaker 17: So this is not the sort of company where we're
Speaker 17: looking to make a breakthrough in science, but rather, how
Speaker 17: can we take technologies that exist today, where even other
Speaker 17: industries are maturing them, and use those technologies to create
Speaker 17: something that can happen today.
Speaker 7: You will need a launch provider to put you to
Speaker 7: all bit.
Speaker 5: What is your relationship with SpaceX, rocket Lab the other
Speaker 5: providers out there?
Speaker 17: Yeah, so we're talking to launch providers right now. We're
Speaker 17: still in the early stages. We're talking to SpaceX, as
Speaker 17: you mentioned, and we're targeting a launch of our first mission,
Speaker 17: which we'll aim to demonstrate this capability Q four of
Speaker 17: next year, Q one the year after.
Speaker 7: Hey for flux, Sorry car go ahead.
Speaker 3: Great to have some time with them.
Speaker 4: I'm just envisaging lasers beaming down from space Infra red.
Speaker 3: We appreciate it. Thank you for explaining you this edition
Speaker 3: of Bloomberg Technology.
Speaker 5: Ed tomorrow Bloomberg Technology is live from Los Angeles for
Speaker 5: Bloomberg screen time.
Speaker 7: You do not want to miss that. Just stunning lineup
Speaker 7: of guests.
Speaker 5: Pretty stunning lineup of guests Today's show as well, recap
Speaker 5: it on the podcast. You know exactly where to find
Speaker 5: it online, Apple, Spotify, iHeart, and all of the Bloomberg platforms.
Speaker 5: The team is out in La right now. I've got
Speaker 5: to catch a flight and join them. A few big
Speaker 5: days of shows to come. This is Bloomberg Technology.
Speaker 2: When he didn't show, when he didn't he