Speaker 1: From Mahard where Innovation of Money and Power colle in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Hyde at Blomberg's World headquarters in New.
Speaker 4: York and I'm Ed Ludlow in San Francisco. This is
Speaker 4: Bloomberg Technology coming up.
Speaker 3: Former Ali Baba heavyweights return to the company as the
Speaker 3: technology giant prepares for its six way restructuring and spin off.
Speaker 3: Will it stand? We discussed with Brian Wong himself of
Speaker 3: previously at Ali Baba, an author of the Tao of
Speaker 3: Ali Baba.
Speaker 4: Plus we'll discuss AI regulation and investing in the technology
Speaker 4: as President Biden prepares to meet with leaders here in
Speaker 4: California this week, and.
Speaker 3: We'll bring you updates on the missing titan submarine as
Speaker 3: search as a race to find the diving vessel with
Speaker 3: five people aboard that when missing on an expedition to
Speaker 3: view the Titanic shipwreckord There.
Speaker 4: Is one big technology story in the world and it
Speaker 4: is Ali Barba. A shake up in Ali Barba management overnight.
Speaker 4: You can see what it's doing to the ADRs down
Speaker 4: five percent. That's the biggest decline in around a month.
Speaker 4: What we see is Daniel Jung moves out of the
Speaker 4: CEO role. He will head the cloud unit. Then you
Speaker 4: have Jozai moving from being executive vice chair to being
Speaker 4: chairman of the board. And they bring in Eddie Wu
Speaker 4: who's basically led the core e commerce units and now
Speaker 4: he becomes the CEO in this kind of split structure.
Speaker 4: Lot's happening here is Ali Barba thinks about a complete
Speaker 4: restructuring and hiving off of various businesses.
Speaker 3: Caraen, it really is one to be watching. We've got
Speaker 3: to dig in more with Wow, someone who's served for
Speaker 3: a long time at the business has written about it.
Speaker 3: Bran Wang and Plica says with us, author of The
Speaker 3: Tower of Ali Baba, he was in fact the fifty
Speaker 3: second employee to join the Ali Baba Group. Real focus
Speaker 3: on globalization, very close relationship with that of Jack Maher.
Speaker 3: And what's so interesting is well, when you look at
Speaker 3: the analysts reviewing these moves, they feel as though the
Speaker 3: spirit of Jack Maher is here, his lieutenants for years
Speaker 3: come back. What do you think the signal is here?
Speaker 5: Brian, Yeah, I do think. Well, first of all, it's
Speaker 5: great to be with all of you and thank you
Speaker 5: for having me. I think this decision is really an
Speaker 5: important one and also a strong signal to the market
Speaker 5: but also to the company that yes, it's back to
Speaker 5: the roots of Ali Baba, the culture, the original sort
Speaker 5: of drivers of what motivates the business and bringing in
Speaker 5: those who really have a strong understanding of where that
Speaker 5: all started and also individuals who contributed to building what
Speaker 5: the company is today from the very start.
Speaker 4: Brian, how closely did you work with Josiah Edi Wu
Speaker 4: and Daniel Jung during your time at Ali Baba.
Speaker 5: Well, Joe is actually the individual who hired me back
Speaker 5: in nineteen ninety nine, and Jack I served as a
Speaker 5: special assistant for globalization for a number of years. Daniel
Speaker 5: I've known since the time he joined. So all of
Speaker 5: these individuals our people, and Eddie Wu as well.
Speaker 6: Eddie has been there from the start. He's one of
Speaker 6: the co founders of the company.
Speaker 5: He actually worked with Jack before Jack even started Ali
Speaker 5: Baba when he was at the company at China Page's
Speaker 5: Jack's first internet company. So I've known all these individuals
Speaker 5: during my time at the company.
Speaker 3: Let's dig in bron Therefore, with Eddie in particular, he
Speaker 3: moves really to a focus to leadership. What do you
Speaker 3: think at this moment we will be seeing from a
Speaker 3: CEO when we are still thinking of the restructuring of
Speaker 3: this business. Does that still stand as it had been
Speaker 3: outlined by Daniel previously.
Speaker 5: Yeah, obviously I think the decision to split the company
Speaker 5: in six parts remains the plan.
Speaker 6: The question is who would need the.
Speaker 5: Holding company Ali Baba Group, which now is more of
Speaker 5: an investment holding company than an operation operational comp company.
Speaker 5: Eddie brings a number of strengths to the company today
Speaker 5: in the leadership role. Obviously, he has a very strong
Speaker 5: technology background. He's played the CTO role or tech technology
Speaker 5: sort of leader for companies ranging from Alibaba dot Com
Speaker 5: to Ali pay Ali Mama, which was the key driver
Speaker 5: for the AD system for Talbo back in the day.
Speaker 5: He's run all of these and also served on the
Speaker 5: boards of companies like Ali Health.
Speaker 6: But he also has a strong business acumen.
Speaker 5: I mean to be able to construct this AD network
Speaker 5: under Ali Mama and serve as general manager.
Speaker 6: He also during his time has done investments.
Speaker 5: He has his own fund that he set up in
Speaker 5: twenty fifteen, so he's he's seen virtually every angle of
Speaker 5: the business. But also not just in China, but he's
Speaker 5: also seen the world outside of China from a technology standpoint,
Speaker 5: from a business standpoint, I think Eddie has really gained
Speaker 5: the skill that are required for a CEO in this
Speaker 5: sort of role, and at the same time he brings
Speaker 5: an understanding of Ali Baba's culture, which is so important
Speaker 5: in terms of the longevity of the business.
Speaker 4: Yeah, Brian woe coming to us from Shanghai, Caroline fifty
Speaker 4: second employee at Ali Baba, I find Daniel Jung the
Speaker 4: most interesting. He gets to take the lead of the
Speaker 4: crown jewel, the cloud business. Do we read that as
Speaker 4: a demotion, Brian?
Speaker 5: I would actually see that as a vote of confidence.
Speaker 5: I think that any individual who would be the CEO
Speaker 5: and chairman of the most important business within this sort
Speaker 5: of organization and try and run the holding company at
Speaker 5: the same time is a superhuman and probably it's an
Speaker 5: inhuman task to expect them to do both. I think
Speaker 5: Daniel himself had suggested that he really focus on the
Speaker 5: most important.
Speaker 6: Operations, that being Ali Cloud and you know, managing that
Speaker 6: business to success.
Speaker 5: He's done that, improved he could do that in the
Speaker 5: other businesses that he's run, so I.
Speaker 6: Would not look at it as a demotion. I would
Speaker 6: look at it as a vote of confidence and.
Speaker 5: Allowing Daniel to really help the company take what is
Speaker 5: most important forward and become successful, particularly when they're spinning
Speaker 5: out the company.
Speaker 4: Of those three individuals who can navigate the political landscape
Speaker 4: of China most capably.
Speaker 6: Well, you know, I think that in today's market, what's
Speaker 6: really important is being able.
Speaker 5: To build a business amidst a changing regulatory environment.
Speaker 6: I think that requires skill.
Speaker 5: And competency and understanding the technology, but also being able
Speaker 5: to kind of work within the system. And I think
Speaker 5: that's going to be a group effort, not one individual,
Speaker 5: but probably a team as a whole that has.
Speaker 6: Expertise in understanding different aspects of the fact is involved.
Speaker 5: And I think Eddie, as I mentioned, has a collection
Speaker 5: of those skills. But I think this also comes into
Speaker 5: play where where the larger organization will assist in guiding
Speaker 5: and also the six business unit heads, each of them
Speaker 5: will be responsible for the individual units, and each of
Speaker 5: those industries has unique regulatory considerations.
Speaker 3: Let's focus in on the man who hired you, Joe Side,
Speaker 3: because he really understands the relationship between the US and China.
Speaker 3: Many know him here more aphably as the Brooklyn Nets owner,
Speaker 3: as an owner of some significant real estate here in
Speaker 3: New York City brand And I'm interested as to what
Speaker 3: he does his relationship with investors, but also his relationship
Speaker 3: navigating political and geopolitics at large when it comes to
Speaker 3: the tensions between the US and China.
Speaker 5: Yeah, I think Joe as chairman is a fantastic choice.
Speaker 5: He's a consummate investor. That's where his or sort of
Speaker 5: original sort of you know focus was prior to Ali Baba.
Speaker 5: But he's also a trained lawyer who has an understanding
Speaker 5: of good governance and you know, how to navigate these
Speaker 5: regulatory systems. And he's, like you mentioned international, you know,
Speaker 5: he's educated in the United States, worked you know, all
Speaker 5: over the world, and he has the sensitivity and understanding
Speaker 5: of how to kind of balance these things. I think
Speaker 5: in a chairman role, that's exactly what an organization is
Speaker 5: big as Ali Baba needs, and one that has international aspirations.
Speaker 5: You know, he's in a very good position given his
Speaker 5: background and skills to kind of play that role and
Speaker 5: really help bridge the company from China to the world
Speaker 5: and vice versa, the world to China.
Speaker 4: Brian wog Or for of the Tao of Ali Baba
Speaker 4: Ali Baba, employee number fifty two live from Shanghai.
Speaker 6: Thank you so much for your time.
Speaker 4: Now coming out, we get to that other big story
Speaker 4: AI regulation. President Biden's in town here in San francisc
Speaker 4: go meeting execs and academics from the field of artificial intelligence.
Speaker 6: We'll discuss next.
Speaker 4: This is Bloomberg, President Biding heading to California for a
Speaker 4: meeting with business leaders and experts on artificial intelligence. As
Speaker 4: later today here in San Francisco. The meeting comes is
Speaker 4: his administration pushes companies to develop new security and privacy
Speaker 4: safeguards for the technology. For more spring in Bloomberg's and
Speaker 4: Edgerson in Washington, we have another meeting. We had one
Speaker 4: six weeks ago, hosted by Vice President Harris. We had
Speaker 4: some frameworks in the interim. Does this mean we might
Speaker 4: get some concrete rules from this administration on the field
Speaker 4: of AI.
Speaker 7: Well, concrete rules are going to be up to Congress.
Speaker 7: So what this administration has been very good at is
Speaker 7: kind of gathering information like the President is doing today,
Speaker 7: you know, talking to industry leaders, talking to the companies,
Speaker 7: talking to civil society and trying to understand what we
Speaker 7: hear all the time in Washington, risks and opportunities associated
Speaker 7: with AI. And we've seen that in the framework from
Speaker 7: the National Institute of Standards and Technology, from the White
Speaker 7: House's very own Bill of Rights on AI. So you
Speaker 7: see how they're kind of using this information to frame
Speaker 7: the policies they're putting out. But this is all guiding documents.
Speaker 7: It's going to in order to pass binding rules that
Speaker 7: will obligate the companies to certain practices. That's going to
Speaker 7: be up to Congress.
Speaker 3: And what's interesting is sort of the agitation over AI
Speaker 3: regulation in many ways has the ghost of social media
Speaker 3: policy really in it. And I'm interested as to how
Speaker 3: much Congress, lawmakers, regulators have got up that hill of
Speaker 3: really what artificial intelligence is, how in ways in which
Speaker 3: it perhaps poses risks and indeed might be regulated.
Speaker 8: Really that is so true.
Speaker 7: I mean, you definitely see lawmakers kind of haunted by
Speaker 7: the ghosts of social media failures where they haven't been
Speaker 7: able to pass even the most basic underlying data privacy
Speaker 7: standard at.
Speaker 9: The federal level.
Speaker 7: And the Senators will be the first to say that
Speaker 7: we haven't even done the most basic necessary to regulate
Speaker 7: the Internet.
Speaker 9: Since nineteen ninety six.
Speaker 7: So there is this kind of defeat US attitude going
Speaker 7: into discussions about AI technology and where they are now
Speaker 7: is really at the education phase.
Speaker 6: You know.
Speaker 7: Senate Majority Leader Chuck Schumer has scheduled three briefings for
Speaker 7: this summer to just explain to lawmakers what AI is,
Speaker 7: where we are, the race of the innovation race, and
Speaker 7: how it could we be used in military settings. So
Speaker 7: we're really just still in this kind of information gathering
Speaker 7: phase a lawmakers try to get a grasp on this
Speaker 7: new technology.
Speaker 3: Anna Edgerton, thank you for bringing us sort of some
Speaker 3: of the sticking points for Congress and the White House.
Speaker 3: Let's talk about ltificial intelligence a little bit more. Soft
Speaker 3: Bank in particular, the found mss.
Speaker 10: On Well's company is in the position to win, he says,
Speaker 10: the race to master AI, thanks to of course of
Speaker 10: dollars a tech investment, some of which some would say
Speaker 10: have gone a little sour.
Speaker 3: In fact, Soft bangaling won't be deterred by a few
Speaker 3: short term losses. He says, we will rule the world
Speaker 3: in the end. Fighting talk, Let's talk about if you
Speaker 3: can ever rule the world, and thus far, who's been
Speaker 3: ruling it in terms of investment. Hillary Fish is with
Speaker 3: US senior research analyst Technology Software at Clearbridge.
Speaker 9: You know, it's great to.
Speaker 3: Have you here in the studio and the height cycle
Speaker 3: is clear. Everyone's getting into various AI related names from
Speaker 3: an investment thesis. How much you're thinking about future regulation
Speaker 3: within that investment opportunity.
Speaker 11: Sure, thanks, Caroline, It's so good to be here, thinks said,
Speaker 11: it's a really terrific question.
Speaker 8: We think about it quite a bit.
Speaker 11: We're very early in the stages of discovering what regulation
Speaker 11: will look like and how that will impact the sector. However,
Speaker 11: I think in this particular case, there's going to be
Speaker 11: quite a bit of help to the government provided to
Speaker 11: the government by the companies that are actually the major
Speaker 11: providers AI services and products Microsoft for one, Open Ai
Speaker 11: for another, in conjunction with Microsoft, or big proponents for
Speaker 11: government regulation. So I think you're going to see a
Speaker 11: somewhat symbiotics situation between commercial and government entities in terms
Speaker 11: of bringing proper, appropriate and.
Speaker 8: Effect of regulation to AI.
Speaker 3: But of course it's a global question, and as Masioshi
Speaker 3: son of soft Bag, saying, we're going to rule the
Speaker 3: world in terms of AI, I mean, a large part
Speaker 3: of his investment is in Armholdings, a UK company. Like
Speaker 3: all of these things are global in nature. Is there
Speaker 3: sort of a race that's going on or is us
Speaker 3: the dominant force? Does it matter from your investment thesis perspective,
Speaker 3: I would.
Speaker 11: Say there is a race going on, and I would
Speaker 11: say that's going to form part of how that guides
Speaker 11: regulation in terms of how it oversees AI's development. But
Speaker 11: at the end of the day, a regulation is global
Speaker 11: in nature as well as we're seeing in a variety
Speaker 11: of instances. So I think we'll see the various governing
Speaker 11: bodies come together to figure out how how to oversee AI,
Speaker 11: at least in terms of Western nations, and then we'll
Speaker 11: see who's leading.
Speaker 8: In the end.
Speaker 4: Hillary, good morning from San Francisco. Good Afsen into you
Speaker 4: in New York. Does your research point you to any
Speaker 4: single one name or couple of names that you think
Speaker 4: are best positioned to win this AI race?
Speaker 8: It's another great question, ed.
Speaker 11: I think we think they are going to be a
Speaker 11: variety of names who benefit. We are early on in
Speaker 11: the process, and so far, clearly Nvidia and Microsoft have
Speaker 11: stood out in terms of AI leaders positioning their product
Speaker 11: lines early on for embedding AI services throughout and capitalizing
Speaker 11: on the AI opportunity. But there are a variety of
Speaker 11: them who are going to benefit up and down the chain.
Speaker 11: And I think what it comes down to is if
Speaker 11: a company has a unique and important data set, if
Speaker 11: they're embedded in their customers customers processes and workflows, and
Speaker 11: if they're equipped to actually help customers deploy in a
Speaker 11: safe and efficient manner, they should win. And this is
Speaker 11: going to involve all hyperscale platforms, including clearly Microsoft, Amazon
Speaker 11: because of its incumbency in corporate networks, Google because of
Speaker 11: its deep history, and AIML and also Oracle, who has
Speaker 11: an interesting place on AI.
Speaker 6: Hillary.
Speaker 4: We actually talk about Oracle much less than any of
Speaker 4: those names on this program Blombow Technology, and it has
Speaker 4: just also hit a fresh record high. So play that
Speaker 4: scenario out for us. Why is Oracle kind of a
Speaker 4: winner in this AI debate?
Speaker 11: Well, Oracle has re architected its cloud, offering its infrastructure
Speaker 11: cloud as a next generation cloud, taking many of the
Speaker 11: best practices that the original cloud providers learned during their process,
Speaker 11: and it has a unique take on how it's architectur
Speaker 11: that infrastructure with some i'd call it network heavy capabilities,
Speaker 11: which should actually be quite valuable in because I think
Speaker 11: we're going to have a period of proliferation of need
Speaker 11: of base infrastructure build out to accommodate the very high
Speaker 11: data volumes that AI will bring to us. I think
Speaker 11: Oracle will be well equipped to handle that along with
Speaker 11: Microsoft and others. And Oracle also recently announced some important
Speaker 11: AI partnerships with an LLM model company called Cohere and
Speaker 11: with Nvideo, which I think will bring big dividends to
Speaker 11: them over time. So there are a more recent but
Speaker 11: important emerging beneficiary.
Speaker 3: I mean, not many people want to talk about how
Speaker 3: expensive everything is, and we won't want to talk about
Speaker 3: how expensive stalks are. We don't want to talk about
Speaker 3: how expensive it is to run these large language models,
Speaker 3: the amount of GPUs everyone's having to be buying. All
Speaker 3: these companies pricing it right at the moment that seemed
Speaker 3: to be making it up as they go on.
Speaker 8: Well, it's such an interesting question.
Speaker 11: They're thinking quite a bit about how to price it,
Speaker 11: and we're starting to see emerging and pricing coming out
Speaker 11: in the marketplace.
Speaker 8: I think so far.
Speaker 11: They're doing a good job in terms of pricing for
Speaker 11: AI enabled services is actually quite high. In the case
Speaker 11: of APIs on Azure op ai, they were multiples of
Speaker 11: what a traditional AAPI would be to actually access marry
Speaker 11: the data with the models and AI enabled applications or
Speaker 11: priced anywhere from thirty to eighty plus percent what a
Speaker 11: traditional application would be. But there's real value in them
Speaker 11: because of the productivity benefits which will.
Speaker 8: Accrue to the users.
Speaker 11: So at the end of the day, I think they're
Speaker 11: starting to do a good job of providing the opportunity
Speaker 11: for profit as well as revenue. Acceleration is due to
Speaker 11: the uptake of as a result of the uptake of AI. Similarly,
Speaker 11: Salesforce just introduced their pricing of their AI enabled applications
Speaker 11: last week and those applications are going to have a
Speaker 11: perceipt component.
Speaker 8: As well as a usage component.
Speaker 11: I think you're going to see more and more creative
Speaker 11: models around AI, and where there are productivity benefits to
Speaker 11: be cornered, customers will pay for them.
Speaker 4: Hilly Fresh clear Bridge just deep research in AI. Time
Speaker 4: for talking tech. First up, the can Lines International Festival
Speaker 4: of Creativity is underway, and while it usually attracts the
Speaker 4: most influential executives in advertising and platforms. Two Notebaule names
Speaker 4: will not be in attendance. Elon Musk and Twitter's new CEO,
Speaker 4: Linda Yakarino this is the social network works to win
Speaker 4: back spending on the platform. However, on Tuesday, Twitter announced
Speaker 4: that it will explore solutions from companies that specialize in
Speaker 4: tracking the quality of ads and sticking with Musk, according
Speaker 4: to sources, he's likely to meet with India's Prime Minister
Speaker 4: Arendramodi today on a visit to the US. The private
Speaker 4: meeting is expected to take place early evening in New York.
Speaker 4: Who comes after Tesla and India revived dialogue in May
Speaker 4: following a year long standoff. Plus, Germany will funk a
Speaker 4: finance a subsidy package worth ten point nine billion dollars
Speaker 4: for a planned Intel facility in Magdeburg via it's Special
Speaker 4: Climate and Transformation Fund that, according to people, formil of
Speaker 4: the plans for more. Let's bring in Bloomberg's Aggie Cantrell
Speaker 4: out in Berlin. Aggie, what's the latest on this one?
Speaker 2: Yes?
Speaker 12: So this this investment of billion ten billion euros in
Speaker 12: subsidies from the German government is going to be also
Speaker 12: brought forward by thirty billion thirty billion euros as a
Speaker 12: direct investment, the largest foreign direct investment in Germany's history
Speaker 12: from any company. And Intel is going to be putting
Speaker 12: forward thirty billion euros of its own money into this investment.
Speaker 12: And that is also critical because actually this is a
Speaker 12: project that has been a long time in the works
Speaker 12: and it was put on pause because Intel said the
Speaker 12: costs were getting too high. Originally they committed to seventeen
Speaker 12: billion dollars with subsidies of seventeen billion euros was six
Speaker 12: point eight billion euros in subsidies from the German government,
Speaker 12: and they went back to the negotiation table this year
Speaker 12: because they were saying that it is costing them too much.
Speaker 12: Economic headwinds are hitting the company and so they needed
Speaker 12: more in terms subsidies. This is a question as well
Speaker 12: for how much Germany is willing to front for these
Speaker 12: companies to onshore a lot of this chip production.
Speaker 3: Aggie, great round about. Thank you, Aggie Cantrell Baron Berlin for.
Speaker 4: US, Welcome back to Bloomberg Technology. I'm Ed Lovelow in San.
Speaker 3: Francisco, and I'm Caroline Hider, New Yord.
Speaker 4: Let's stick with the geopolitical. US Secretary of State Anthony
Speaker 4: Blincoln says he expects to see more communications between Washington
Speaker 4: and Beijing following his visit to China, where he did
Speaker 4: meet with President Jijingping. He spoke about it at a
Speaker 4: press conference in London.
Speaker 13: The relationship and the communication between the two leaders, between
Speaker 13: President Biden and President she is most important of all.
Speaker 13: That's why they've had a number of communications and meetings
Speaker 13: to date, and that's why I expect you'll see more
Speaker 13: of that in the time ahead.
Speaker 4: There's a lot to go over in the context of
Speaker 4: foreign relations. Also the regulatory angle to all of this
Speaker 4: that ties in, of course artificial intelligence and joining us
Speaker 4: now for more is Andrew Bradford, professor at Columbia Law
Speaker 4: School and author of the upcoming book Digital Empires, The
Speaker 4: Global Battle to Regulate Technology, coming out this September. Professor Bradford,
Speaker 4: thank you for your time. I think we start with
Speaker 4: technology at the heart of what's happening between the US
Speaker 4: and China. What do you make of mister b Lincoln's
Speaker 4: visit to China and what it may or may not
Speaker 4: have achieved.
Speaker 9: So thank you Ed for having me here.
Speaker 14: And obviously it's a good sign that at least the
Speaker 14: US and China are talking, but the gaps between the two,
Speaker 14: the interest and the ideologies surrounding technology.
Speaker 9: Are very part to bridge.
Speaker 14: So there are fundamental differences, for instance, when it comes
Speaker 14: to AI. So first there's an AI race, the battle
Speaker 14: for technological supremacy, but there's also a battle on how
Speaker 14: we should think about building digital societies by deploying AI.
Speaker 14: So the US and the EU are very concern of
Speaker 14: China's use of AI for digital surveillance and also the
Speaker 14: exportation of those surveillance technologies around the world that then
Speaker 14: increases China's influence and pushes the world towards potentially create
Speaker 14: a digital authoritarianism.
Speaker 9: So that is certainly one tension.
Speaker 3: The other tension is how to regulate and protect people
Speaker 3: in their own communities at a time where you also
Speaker 3: don't want to stifle innovation as usual. It feels like
Speaker 3: the EU is getting their first in terms of thinking
Speaker 3: about and processing actual regulation. We're anticipating the AI Act
Speaker 3: later this week. I mean, can you bring us up
Speaker 3: to speed with just how aggressive they are about not
Speaker 3: only regulating the application of AI, but the underlying models
Speaker 3: the building of artificial intelligence too.
Speaker 14: So that is exactly right, Caroline so as expected, the
Speaker 14: EU is ahead of the game and much more willing
Speaker 14: than the US to regulate AI. So the EO wants
Speaker 14: to also be ahead and try to make sure that
Speaker 14: innovation takes place. But there are some really deep concerns
Speaker 14: about how the AI potentially has harmful implications, how it
Speaker 14: might compromise the fundamental rights, how it might then have
Speaker 14: an adverse effect on democracy. So the EO has now
Speaker 14: moved along with a very ambitious I'm not sure if
Speaker 14: I use the word aggressive, but very ambitious AI Act.
Speaker 14: It was approved by the European Parliament this past week
Speaker 14: and it's now up for a negotiations between the key legislators,
Speaker 14: the Council and the Parliament and the Commission, and potentially
Speaker 14: we might see that law be finalized by the end
Speaker 14: of the year. But the big challenge, as you noted,
Speaker 14: was that when we were already far along in the
Speaker 14: legislative process, the CHAT, GPT and generative AI really to
Speaker 14: the center stage in the conversations, and the legislative template
Speaker 14: wasn't exactly designed for the kind of technology that generative
Speaker 14: AI represents, so that the focus was really that we
Speaker 14: look at how risky the application of the AI is
Speaker 14: and then we adjust the regulatory applications accordingly. But obviously
Speaker 14: these large language models can be used in very risky
Speaker 14: settings or then in completely safe settings. And that is
Speaker 14: now going to be one of the main conversations that
Speaker 14: will be I believe, dominating the last steps in this
Speaker 14: legislative process. But there will be a legislation forthcoming, and
Speaker 14: the generative AI will not get a free pass.
Speaker 3: I mean, and you and I are Europeans, even though
Speaker 3: maybe it's not part of the EU. But Professor Bravn
Speaker 3: wrote before the current book that's about to come up
Speaker 3: about the Brussels effect, about the fact that Brussels getting
Speaker 3: their first in times of regulation does set the standard,
Speaker 3: doesn't I just think of GDPR.
Speaker 4: Yeah, I spent many years in Brussels, Professor. It always
Speaker 4: starts at a lower level. Twenty eighteen, the Expert Group
Speaker 4: starts its work on AI. By comparison, your President Biden
Speaker 4: flying into town this afternoon to San Francisco hosting a
Speaker 4: meeting with these industry leaders. Which pathway is more effective
Speaker 4: to getting actual oversight of the technology.
Speaker 14: So I think whether there is an effective pathway that
Speaker 14: would exclude the governments of the tech company so I
Speaker 14: don't see that one way exclusively can necessarily work. But
Speaker 14: the Europeans certainly are convinced that any governance of the
Speaker 14: AI needs to be entrenched in legislation, in rule of law,
Speaker 14: in democratic governance, and we certainly need to have transparency
Speaker 14: and accountability so that we can have a democratic conversation
Speaker 14: on how these companies are developing their models, how we
Speaker 14: are deploying AI, so that it's consistent with our laws
Speaker 14: and values. But at the same time, even the EU
Speaker 14: is painfully aware of the challenges ahead the EU in
Speaker 14: trying to legislate and to implement effectively this legislation, and
Speaker 14: for that it does need the partnership of tech companies.
Speaker 9: So I was encouraged to see.
Speaker 14: That even now, when we don't yet have the AI
Speaker 14: Act in force, the Europeans and Americans are having a
Speaker 14: conversation together with the tech industry trying to come up
Speaker 14: with the kind of code of conduct that we already
Speaker 14: have some guardrails that we all agree upon. And hopefully
Speaker 14: that dialogue will then continue as the eel's legislative process
Speaker 14: moves forward, and.
Speaker 3: We'll see if that dialogue in any way starts to
Speaker 3: drift between China and the US and Europe as well.
Speaker 3: Ernie Bradford, fascinating comeback pieceing. We thank you, professor at
Speaker 3: Columbia Law School. And we're coming up from FTX Ventures
Speaker 3: to Menlo Ventures. Partner Amy Wu tries us to talk
Speaker 3: about her big move, where she's investing, and how the
Speaker 3: consumer and AI are and twining moment. This is bringing
Speaker 3: back It's that time BC Spotlight and I'm very pleased
Speaker 3: to welcome to the show today. Amy Wu, you know,
Speaker 3: of course, a former head of Ftxpensures and as of
Speaker 3: last week, partner at Menlo Ventures, planning the flag of
Speaker 3: one of Silicon Valley's oldest bench firms right here in
Speaker 3: New York City, although ironically today Amy are over there
Speaker 3: on the West Coast, and I'm interested therefore your thesis
Speaker 3: where you're looking for founders, what kind of companies or
Speaker 3: where you want them to be based.
Speaker 15: Yeah, I recently started at Menlo Ventures, very excited, and
Speaker 15: I'm going to be covering consumer and gaming investments over here.
Speaker 15: Is actually you know, Menlo doubling down and consumer investments, interestingly,
Speaker 15: at a time when a lot of funds for the
Speaker 15: last few years have been rotating out of the category.
Speaker 15: And and so you know, whether blockchain or non blockchain
Speaker 15: ar VR, you know, it's a it's it's constantly an
Speaker 15: area with new platforms and an innovation, new customer and
Speaker 15: user experiences.
Speaker 16: So I'm really excited to be focused on the space.
Speaker 4: I guess Amy, it takes me to the why be
Speaker 4: the GP for consumer and gaming. I'm assuming there will
Speaker 4: be crossover in your previous work looking at blockchain. You know,
Speaker 4: but I think about video games, as we know on
Speaker 4: this program, video games is life. I think about collectibles
Speaker 4: in games, tokens, things that you buy, security around that,
Speaker 4: and blockchain technology is that kind of how you're thinking.
Speaker 16: It's one of the areas.
Speaker 15: So I would say that, you know, if you look
Speaker 15: at the history of consumer and gaming investing, particularly consumer investing,
Speaker 15: it's been driven new experiences have been driven.
Speaker 16: By platform shifts. And I would say that, you know,
Speaker 16: mobile was the last very large one.
Speaker 15: A lot of the you know, most you know, interesting
Speaker 15: companies of like the last ten years.
Speaker 16: So if you look at Uber and in Airbnb, et cetera, I.
Speaker 15: Really were created with you know, technology and innovations and mobile. Uh,
Speaker 15: Bloching is a promising you know, platform shift I would say.
Speaker 16: And still early.
Speaker 15: There's been companies experimenting on you know, on chain, but
Speaker 15: I think you know, it's said to be seen in
Speaker 15: terms of mainstream adoption, and of course, you know, everyone
Speaker 15: is very excited about the promises of Jenny I right
Speaker 15: now as well.
Speaker 4: I think about your background, because Menlo is a different
Speaker 4: firm and you firm, you know, reflecting on what's happened
Speaker 4: in recent years, how much of the conversation with Menlo
Speaker 4: was about what happened to FTX ventures. Was it sort
Speaker 4: of any kind of barrier to moving forward working with them?
Speaker 15: The short answer is no, I think that you know
Speaker 15: they they know that you know myself, and to be honest,
Speaker 15: like most employees, uh, you know, unfortunately we're we're misled
Speaker 15: by the founder and and so most of our conversation
Speaker 15: frankly was in terms of what I will be covering
Speaker 15: and uh in my thesis areas for the future.
Speaker 3: You were actually only there for ten months. What do
Speaker 3: you feel you've learned from the experience? An emotional one,
Speaker 3: I'm sure, and one of great hurt. But how ultimately
Speaker 3: do you feel you will do business differently post FT extensions?
Speaker 15: You know, I've been I've been a venture investor for
Speaker 15: a long time. You know, I previously spent a few
Speaker 15: years at lf Speed and before that at Insight, and
Speaker 15: so in terms of being an investor, you know, I
Speaker 15: haven't lost any passion for that. Uh and uh and
Speaker 15: you know, excited to continue working with great founders and
Speaker 15: and I think you know, there's been a lot of
Speaker 15: learnings from FTX. I mean, first and foremost, it was
Speaker 15: a very fast growing company that did real revenues and
Speaker 15: uh and you know profits in the years that it
Speaker 15: was in operation. But I think, you know, there's a
Speaker 15: lot of uncertainty and tech and in you.
Speaker 16: Know, none of us really expected that to happen.
Speaker 3: What's interesting is we find ourselves in a new AI
Speaker 3: hype cycle. It feels like Crypto was the hype cycle previously.
Speaker 3: AI is the new one, and you of course were
Speaker 3: there within. Some of the savvy investments being made with
Speaker 3: FTX Adventures was Yuga Labs, I think Aboard eight Yacht
Speaker 3: Club and just how that sort of became the number
Speaker 3: one NFT. Anyone could really think of Sober Studios, the
Speaker 3: webinary platform to build your own games. Are you thinking
Speaker 3: this feels like a hype cycle? Again, how do you
Speaker 3: make sure you have long term investments in the world
Speaker 3: of artificial intelligence and where that value rises Right now.
Speaker 16: It's a really great question.
Speaker 15: I mean, AI has been a technology and development for
Speaker 15: decades at this point, and it certainly had its iPhone moment,
Speaker 15: I would saying the last fall with the with the
Speaker 15: launch of chat GBT, and so you know, when I
Speaker 15: was at Less, we had long time been invested in
Speaker 15: investing in AI, and Millow has also been as well well,
Speaker 15: and so I would say that really the investment cycle continues.
Speaker 15: You know, with with jen AI, there is uh sort
Speaker 15: of new surface area I would say in terms of
Speaker 15: both increasing productivity of workers for example artists and gaming,
Speaker 15: but then also in terms of defining a new way
Speaker 15: that people interact with computers and also you know converse
Speaker 15: with computers, which is really interesting and has a lot
Speaker 15: of ramifications.
Speaker 16: And consumer experiences.
Speaker 15: So those are all areas, Those are all areas that
Speaker 15: will be really really interesting.
Speaker 9: To track.
Speaker 6: Amy within video games?
Speaker 4: Are you interested in startups and companies that that want
Speaker 4: to use generative AI progress on the content side? Where's
Speaker 4: the opportunity in gaming?
Speaker 15: So a lot of tech actually I think originates from
Speaker 15: gaming as a use case and the concepts of I
Speaker 15: would say, like two areas of a lot of intense interests,
Speaker 15: which is procedure generation of content and games. And also uh,
Speaker 15: you know, nvcs or interactions with bought players in the
Speaker 15: game has actually been you know, in development for for
Speaker 15: a couple of decades with the first Yablo game, you know,
Speaker 15: with MMOs and uh. And so it's a concept that
Speaker 15: I would say gaming founders and gamers know quite well.
Speaker 15: And and as such, you know, they're both sort of
Speaker 15: wary about the hype cycle right now and gen Ai
Speaker 15: investing and the promises of that, but also very very
Speaker 15: keen to I would say, experiment with the technology.
Speaker 16: And at a higher level, I.
Speaker 15: Think that you know, in these gaming studios have always
Speaker 15: been uh disadvantage compared to incumbent large gaming companies when
Speaker 15: it comes to budget, in in in sort of game design, marketing,
Speaker 15: et cetera.
Speaker 16: And so if gen Ai tooling is able to help, I.
Speaker 15: Would say, like, you know, augment what they are able
Speaker 15: to create from a content perspective at cheaper costs than
Speaker 15: levels of playing ground. I think it allows a lot
Speaker 15: more games to be a release of a really high
Speaker 15: quality and that's a that's a net plus for players.
Speaker 4: I love that your your mind went to non player characters.
Speaker 4: There's a lot of discussion around how let's just make
Speaker 4: games better and more challenging and dream up worlds to
Speaker 4: play in. Gotta gotta are gonna get too involved in
Speaker 4: this video game chat. Got to get to your take
Speaker 4: on consumer You kind of start this conversation saying you're
Speaker 4: kind of pivoting into something that others have pulled back on.
Speaker 6: Is there a risk there?
Speaker 16: So there's two things that are someone thinking has well.
Speaker 16: The first is if you look.
Speaker 15: At you know, just the Nasdaq and S and P,
Speaker 15: you know, some of the largest market cap companies or
Speaker 15: consumer tech companies. On the other hand, you know, if
Speaker 15: you look at the last i would say six seven
Speaker 15: years or there hasn't been a lot of I would
Speaker 15: say very large consumer tech companies that were newly founded
Speaker 15: that has reached you know the scale Facebook and Amazon
Speaker 15: and others. And I think one of the reasons is
Speaker 15: because you know, incumbents were founded with pretty deep network
Speaker 15: effects that are very difficult, and they have massive distribution,
Speaker 15: and it's difficult for a new company to compete, and
Speaker 15: so it remains to be seen whether you know, jen
Speaker 15: Ai as a platform in new technology is going to actually,
Speaker 15: you know, benefit incumbents.
Speaker 16: More or new startups.
Speaker 15: And I generally believe that for a new consumer tech company,
Speaker 15: you really need a dream about a very new surface
Speaker 15: of consumer experience to compete against incumbents.
Speaker 16: Otherwise it's it's pretty difficult even today.
Speaker 4: All right, Menlo Benures partner Amy will thank you so
Speaker 4: much for your time in telling us about your new role,
Speaker 4: Caroline pivoting to another story a little bit AI related,
Speaker 4: Bloomberg's reporting that Spotify is bringing out a premium tier
Speaker 4: dubbed Sue Premium internally. According to sources, there will be
Speaker 4: an element that includes Hi Fi audio, not doing much
Speaker 4: though to support the shares down to percentage points or so.
Speaker 4: It's taken over the web. A submersible carrying five people
Speaker 4: to tour the wreck of this Titanic on the Atlantic seabed,
Speaker 4: missing on Sunday, and extensive rescue operations are still underway.
Speaker 4: Bloombog's John Gilterson joins us, John, what is the latest
Speaker 4: on this search?
Speaker 1: Well, the latest on the search is that there are
Speaker 1: more aircraft being dispatched to the region that are capable
Speaker 1: of searching below the surface. They've explored a lot of
Speaker 1: the surface with radar, with other search capabilities, but they
Speaker 1: haven't found any sign of it. So now they're looking
Speaker 1: deeper under the surface for this missing submersible.
Speaker 3: Has this happened before and could there be a chance
Speaker 3: that satellite starlink is reconnected in some way?
Speaker 1: I mean, I suppose there could be a chance. The
Speaker 1: craft itself has between seventy and ninety six hours of
Speaker 1: oxygen from when it went down. We're now more than
Speaker 1: forty eight hours into it, so the clock is definitely ticking.
Speaker 3: I mean, that's the key thing is, like.
Speaker 1: Can they locate this craft if it's still you know,
Speaker 1: a viable craft and bring the people back up to
Speaker 1: the surface and you have to unscrew.
Speaker 2: All the.
Speaker 6: Port from the outside.
Speaker 1: Those people inside, even if they floated at the top,
Speaker 1: couldn't open it themselves.
Speaker 4: John, A big part of this story is who is
Speaker 4: inside the submersible. That's why so many people are talking
Speaker 4: about it online on social media.
Speaker 6: Who this crew is?
Speaker 1: Yeah, well it's a really you know, interesting international group.
Speaker 1: There's a guy named Hamish Harding who's a jet aircraft
Speaker 1: broker from He's from the UK, but he lives in Dubai.
Speaker 1: He also flew on Jeff Bezos's Blue Origin trip once. He's,
Speaker 1: you know, big explorer guy, the head of the company
Speaker 1: that runs this diver Oceangate expeditions. His name is Stockton Rush.
Speaker 1: He's like a pilot of this crew. There's a Frenchman
Speaker 1: Paul Enri Narjalais, who is like under sea explorer guy.
Speaker 1: And then there's a couple of two people from Pakistan,
Speaker 1: a father and son, Shizada and Suleiman Daoud, who are
Speaker 1: a prominent wealthy Pakistani family.
Speaker 3: It's a story we're going to continue to track. We
Speaker 3: thank you for taking some time out to join us
Speaker 3: on television. Sean Girlson, thank you. And let's note that
Speaker 3: the Coast Guard is scheduled to hold a press briefing
Speaker 3: involved the search efforts said in just a few minutes
Speaker 3: from now over in Boston. Meanwhile, and that does it
Speaker 3: for this addition of technology.
Speaker 4: Yeah, a lots of recap from the show. Global technology
Speaker 4: stories from around the world. Check out the podcast Apple, Spotify,
Speaker 4: iHeart and on Bloomberg from New York and here in
Speaker 4: San Francisco.
Speaker 2: This is Bloomberg