WEBVTT - BlockFi's Potential Bankruptcy and NY Fed's Digital Dollar 0:00:13.400 --> 0:00:16.159 I'm Karen Heinder Bloomberg's world headquarters in New York, and 0:00:16.200 --> 0:00:19.480 I made Ludlow in San Francisco. This is Bloomberg Technology 0:00:19.760 --> 0:00:22.959 coming up. Yet more layoffs, this time at Google's parent 0:00:23.320 --> 0:00:25.680 That means more than a hundred thousand tech workers have 0:00:25.800 --> 0:00:30.040 been laid off since the start of two and Elon 0:00:30.160 --> 0:00:33.640 Musk is testifying under oath right now in a multibillion 0:00:33.640 --> 0:00:37.440 dollar trial where the claims he misled shareholders in tight 0:00:37.640 --> 0:00:41.040 tweets about taking the company private. And we asked the 0:00:41.159 --> 0:00:45.000 FTC Commissioner Christie Goldsmith Romero, how she suggests the government 0:00:45.200 --> 0:00:49.080 regulate digital assets, but first a check in on those 0:00:49.080 --> 0:00:51.640 markets will get to digital markets in just a moment. 0:00:51.720 --> 0:00:53.199 Let's have a little look what's happening in terms of 0:00:53.240 --> 0:00:55.880 your nastack. What a day, what a risk on trade? 0:00:55.880 --> 0:00:58.200 What a desire to get into technology stocks? Helped of 0:00:58.240 --> 0:01:00.440 course by some single names and or point out and 0:01:00.480 --> 0:01:02.800 then as that crushing it up two points seven and 0:01:02.840 --> 0:01:06.280 really managing to shirk off some of those red screens 0:01:06.319 --> 0:01:07.560 that we were used to in the rest of the week, 0:01:07.600 --> 0:01:09.640 so actually ends on a high note and brings the 0:01:09.680 --> 0:01:12.960 weekly move as four days. Of course, the shortened holiday 0:01:13.000 --> 0:01:15.880 trading week into the green. The MSCI or Country World 0:01:15.880 --> 0:01:17.760 Index was also up on the day, so we saw 0:01:18.000 --> 0:01:20.440 risk assets rally over in Europe and indeed over in 0:01:20.520 --> 0:01:24.720 Asia as well. Interesting move that we've seen such lockstep 0:01:24.720 --> 0:01:26.840 moves in terms of bonds and stocks in fact, all 0:01:26.880 --> 0:01:30.360 country world innext and your overall global and bond indext 0:01:30.640 --> 0:01:34.280 they are basically working together. We haven't seen such correlations 0:01:34.440 --> 0:01:37.560 going back to the nineties. Today they split direction. Will 0:01:37.560 --> 0:01:39.240 this be more of a turn of events or the 0:01:39.280 --> 0:01:42.600 sixty work once again with bonds actually falling, yields higher 0:01:42.800 --> 0:01:45.240 up almost nine basis points, while of course stocks they 0:01:45.319 --> 0:01:47.319 lift on the highest side too. It's all about the 0:01:47.319 --> 0:01:49.800 Federal Reserve, it's all about macro picture, it's all about 0:01:49.840 --> 0:01:52.160 hoping that they won't be quite so hawkish. Let's look 0:01:52.240 --> 0:01:55.160 it on because well, what has managed to stay in 0:01:55.200 --> 0:01:57.920 the risk on rally throughout this week and actually now 0:01:58.000 --> 0:02:01.440 hitting the highest in September is bitcoin. We're currently up 0:02:01.480 --> 0:02:03.200 once again about seven percent on the week, We're up 0:02:03.240 --> 0:02:05.360 about seven percent on the day, and bitcoin longer the 0:02:05.440 --> 0:02:07.240 course of the six months. What a torrid time we've been, 0:02:07.240 --> 0:02:10.320 but we're about more than of those lows hit back 0:02:10.360 --> 0:02:13.600 in November. Yeah, it's interesting. Over on my side, earning 0:02:13.639 --> 0:02:15.280 is a big part of the story, and the feel 0:02:15.320 --> 0:02:18.160 good in public markets. Actually layoffs a big part of 0:02:18.160 --> 0:02:20.320 the equity feel good story as well. Bear with me 0:02:20.360 --> 0:02:22.800 on that one. Going to start with Netflix biggest jumps 0:02:22.800 --> 0:02:27.120 since November April high Why, well, they really reacted positively, 0:02:27.160 --> 0:02:30.079 not just to the management changes in read Hastings going 0:02:30.160 --> 0:02:33.880 upstairs to executive chair Greg Peters becoming co CEO, but 0:02:33.919 --> 0:02:35.920 a lot of the streets seeing a path forward when 0:02:35.960 --> 0:02:38.640 it comes to profitability and liking what they're hearing from 0:02:38.720 --> 0:02:41.880 Netflix about the story for this year despite that change 0:02:41.960 --> 0:02:45.600 changes and always positive. You see f B Financial my screen. 0:02:45.639 --> 0:02:47.320 Carry It's not one you and I talked about often, 0:02:47.360 --> 0:02:50.120 but this is the parent company of Silicon Valley Bank, 0:02:50.120 --> 0:02:52.760 and name that lends to a lot of startups important 0:02:52.760 --> 0:02:55.160 in our world. But it forecast net income of nine 0:02:55.280 --> 0:02:58.640 hundred to nine fifty five million dollars to the fiscal 0:02:58.720 --> 0:03:00.880 first quarter, which in this just really cheered. I think 0:03:00.880 --> 0:03:02.560 it was the biggest jump on the stock since two 0:03:02.600 --> 0:03:05.560 thousand eighteen, Tesla up five pc. I only point that 0:03:05.639 --> 0:03:08.519 there because Elon Musk is testifying here in San Francisco 0:03:08.760 --> 0:03:12.959 in that take Tesla private tweet trial. Gosh, that was 0:03:13.000 --> 0:03:15.520 a mouthful. The stock really not trading on that, but 0:03:15.919 --> 0:03:18.720 interesting to see upward trajectory on that shares highest level 0:03:18.720 --> 0:03:20.200 in a month. And then this is what I was 0:03:20.240 --> 0:03:23.919 talking about. Alphabet, the parent company Google, announces it's laying 0:03:23.919 --> 0:03:27.360 off six percent of staff globally. Investors cheer that. You 0:03:27.520 --> 0:03:30.600 always hear me say carry layoffs are not pleasant. But 0:03:31.120 --> 0:03:32.920 if you're an investor in this company and you look 0:03:32.960 --> 0:03:34.960 at this chart next to me about the slowing top 0:03:35.000 --> 0:03:39.480 line growth and the narrative around the tech sector protecting EPs, 0:03:39.480 --> 0:03:43.240 protecting the bottom line throughout three, that's what investors want 0:03:43.240 --> 0:03:45.720 to hear. I know it's painful, but if you're an 0:03:45.720 --> 0:03:48.280 investor in the company seeking returns, this is what you 0:03:48.280 --> 0:03:51.280 want them seeing, see them doing in a changing and 0:03:51.320 --> 0:03:54.200 difficult environment. Yeah, let's talk about, of course, the layoff 0:03:54.200 --> 0:03:57.400 that will affect six percent of Google's pair and company 0:03:57.440 --> 0:04:01.200 Alphabet twelve tho jobs. And overall, this is a global 0:04:01.520 --> 0:04:04.520 layoff from the company, and the tech giant is retrenching 0:04:04.600 --> 0:04:07.840 like many others are after let's call it, years of 0:04:07.840 --> 0:04:11.680 abundant growth of abundant hirings. Julia Love is here to 0:04:11.680 --> 0:04:13.800 talk about more of it, and Julia, we need to 0:04:13.800 --> 0:04:16.599 put it in perspective. Twelve thousand is a lot of people, 0:04:16.760 --> 0:04:19.839 and it hurts individuals, we know, but ultimately they're basically 0:04:19.880 --> 0:04:22.480 shedding jobs that only take us back to basically kind 0:04:22.480 --> 0:04:24.839 of a year ago. They just fueled up so much 0:04:24.839 --> 0:04:30.080 in terms of personnel over COVID. Absolutely, it's really quite tremendous. 0:04:30.320 --> 0:04:33.839 Google's headcount has been growing about twenty pcent a year 0:04:34.400 --> 0:04:38.560 since twenty seventeen, and so um investors have really been 0:04:38.560 --> 0:04:42.000 clamoring for them to start hitting the brakes, and they've 0:04:42.040 --> 0:04:45.320 begend to do that with these layoffs. Hey Jude, you 0:04:45.320 --> 0:04:48.239 know you do such an amazing job covering the Google 0:04:48.279 --> 0:04:51.440 alphabet beat because it's such a diverse company. Now you 0:04:51.440 --> 0:04:54.039 know it's not just Google Search. And what was interesting 0:04:54.040 --> 0:04:57.839 about your reporting is some of the specific areas where 0:04:57.880 --> 0:05:02.600 Google is cutting back which teams are mo impacted. Absolutely, 0:05:02.680 --> 0:05:04.760 we're still trying to get to the bottom of that. 0:05:04.839 --> 0:05:08.520 It does seem that the cats have been broad based. However, 0:05:08.760 --> 0:05:13.240 it seems that Area one twenty, the famous New Idea incubator, 0:05:13.680 --> 0:05:17.120 has been all but shattered um. There are three projects 0:05:17.160 --> 0:05:20.440 that are graduating that will be folded into Doodle. But 0:05:20.520 --> 0:05:24.200 it seems that virtually all other employees, with the exception 0:05:24.200 --> 0:05:28.080 of the managing director, have been laid us. Of course, 0:05:28.120 --> 0:05:30.880 investors had in some ways been asking for this, but 0:05:31.080 --> 0:05:34.000 previous earnings have been talking about needing a focus on 0:05:34.480 --> 0:05:38.200 on margins and having to look more share buy backs 0:05:38.200 --> 0:05:41.320 and laying people off. But Julia, what was interesting for 0:05:41.400 --> 0:05:43.360 me and I think Edwards sort of hinting in this too, 0:05:43.440 --> 0:05:46.320 is well, actually they're laying off all reorganizing, shall we say, 0:05:46.320 --> 0:05:49.240 the AI part of the business. That's quite notable, given 0:05:49.360 --> 0:05:52.760 everyone SEMs to be so excited about that focus on 0:05:52.839 --> 0:05:58.200 artificial intelligence. Absolutely, you know, it's a really interesting storyline 0:05:58.279 --> 0:06:01.320 because Google has given the world, you know, much of 0:06:01.360 --> 0:06:05.640 the cutting edge technology and artificial intelligence. But the release 0:06:05.680 --> 0:06:10.160 of chat GPT has really has really cast a lot 0:06:10.160 --> 0:06:13.160 of concern or really that Google might be left behind 0:06:13.240 --> 0:06:16.520 in this technological waves that it helped start. And so 0:06:16.640 --> 0:06:19.440 the company does really appear to be doing everything it 0:06:19.560 --> 0:06:22.200 can to droll down and make sure it's not left behind. 0:06:23.880 --> 0:06:25.320 You heard me at the top of the shows. You 0:06:25.440 --> 0:06:28.840 you're talking about the reaction, right, Why are these tech 0:06:28.880 --> 0:06:31.560 companies doing this? And part of it is a changing environment. 0:06:31.920 --> 0:06:34.040 You've gone very quickly from mega growth to a little 0:06:34.040 --> 0:06:36.720 bit slower growth. I'm bringing back up that chart from 0:06:36.720 --> 0:06:41.120 the Bloomberg terminal year on year revenue gains hit by 0:06:41.160 --> 0:06:45.919 that advertising slowdown, in particular, the stock rose. What is 0:06:45.920 --> 0:06:48.400 it that investors like about this? How does this help 0:06:49.040 --> 0:06:54.360 protect or impact earnings for Alphabet? M hm, Well, it's 0:06:54.400 --> 0:07:00.159 interesting because Google's search advertising business is pretty resilient, but 0:07:00.240 --> 0:07:03.040 the last quarters showed that they were no longer immune. 0:07:03.160 --> 0:07:06.400 They had disappointing results, and so if the top line 0:07:06.440 --> 0:07:09.240 is no longer growing, as you said, then the only 0:07:09.240 --> 0:07:11.520 way for them to give investors the members they want 0:07:11.560 --> 0:07:14.920 to see is to cut casts. Julia Love, thank you 0:07:15.000 --> 0:07:17.360 so much keeping us up to speen what's happening over 0:07:17.400 --> 0:07:20.120 at Alphabet. And it was interesting, wasn't it? Overall? As well? 0:07:20.600 --> 0:07:24.000 The ways in which companies to protect their own data. 0:07:24.040 --> 0:07:26.120 When we spoke about this earlier in the week, Some 0:07:26.160 --> 0:07:29.120 ways have to act really abruptly, and there was so 0:07:29.240 --> 0:07:32.000 much on Twitter, in particular about people not having seen 0:07:32.000 --> 0:07:34.160 the email that was sent earlier this morning. Maybe trying 0:07:34.160 --> 0:07:36.680 to badge in suddenly realizing they couldn't. It's a really 0:07:36.720 --> 0:07:39.080 tough navigation, isn't it. But it felt like sin a 0:07:39.120 --> 0:07:41.840 picture at least really tried to own and take responsibility 0:07:41.880 --> 0:07:44.000 for the layoffs. Yeah, I mean, as you know, carried. 0:07:44.040 --> 0:07:46.200 The question I've had is the timing around all of 0:07:46.240 --> 0:07:48.200 this in the space of a single week, and it's 0:07:48.240 --> 0:07:51.200 as if various peers in the sector were waiting and 0:07:52.000 --> 0:07:55.320 that the other players to go first. You know, it 0:07:55.400 --> 0:07:57.480 was a strange week in that respect that you take 0:07:57.520 --> 0:08:00.800 it on aggregate, it's forty odd thousand obbs, you know, 0:08:01.040 --> 0:08:04.520 confirmed in the space of five days. Pretty astonishing, it 0:08:04.520 --> 0:08:07.080 really is, in the numbers they rack up. Meanwhile, what's 0:08:07.120 --> 0:08:10.240 also racking up is what's happening with Elon Mask. We've 0:08:10.320 --> 0:08:13.800 just been understanding that he's wrapped up testifying and a 0:08:13.880 --> 0:08:17.120 multibillion dollar securities forward trial. Of course, it all stems 0:08:17.160 --> 0:08:20.200 from the claim that he misled shareholders in tweets about 0:08:20.240 --> 0:08:23.880 taking the company private at four twenty per share. Musk 0:08:23.920 --> 0:08:26.640 told the jury that he's aware that after heat tweets 0:08:27.080 --> 0:08:29.480 the stock price move up or down, but that there 0:08:29.600 --> 0:08:32.760 is no causal relationship. He then advocated for the value 0:08:32.800 --> 0:08:35.240 of being a private company, stating that being private doesn't 0:08:35.240 --> 0:08:37.760 prevent you from raising money. We'll have more on that 0:08:37.880 --> 0:08:40.280 later this hour. And this is one I know that 0:08:40.320 --> 0:08:43.120 you keep on following, and the fact that he was 0:08:43.160 --> 0:08:48.880 there in being examined by his own side. We're going 0:08:48.960 --> 0:08:50.240 to have to wait for the weekend to see what 0:08:50.240 --> 0:08:53.800 cross the examination looks like. Yeah, I find this fascinating 0:08:53.840 --> 0:08:55.920 because of his character. You know, you and I weren't 0:08:55.920 --> 0:08:58.040 in the courtroom in San Francisco, but we have colleagues 0:08:58.080 --> 0:08:59.800 that were. And I cannot wait to hear about st 0:09:00.040 --> 0:09:03.160 to g because Elon Musk often can't help himself in 0:09:03.240 --> 0:09:06.560 going to broader issues talking about short sellers, you know, 0:09:06.640 --> 0:09:09.920 talking about regulators, and that was part of what you know, 0:09:10.000 --> 0:09:12.640 leagual academics thought would be the strategy to get him 0:09:12.679 --> 0:09:14.640 rolled up on the stand. I guess we'll find out 0:09:23.440 --> 0:09:27.000 Amazon's cloud unit AWS will spend thirty five billion dollars 0:09:27.040 --> 0:09:30.720 on new data centers in Virginia by wanting to stay 0:09:30.720 --> 0:09:33.920 ahead of rivals Microsoft and Alphabet, a big win for 0:09:33.960 --> 0:09:36.840 the state of Virginia. Here's what Governor Glenn Allen youn 0:09:36.920 --> 0:09:39.160 Kin had to say about that earlier today in an 0:09:39.160 --> 0:09:46.160 exclusive conversation, m this is big and thirty five billion 0:09:46.200 --> 0:09:49.800 dollar financial commitments, the largest ever made to the Commonwealth 0:09:49.800 --> 0:09:54.160 of Virginia. Our partnership with AWS started back in two 0:09:54.240 --> 0:09:57.440 thousand and six and has only grown. You know, Virginia 0:09:57.640 --> 0:10:00.680 is the largest market for data centers in the world. 0:10:01.160 --> 0:10:04.280 And what's most exciting about this is the long term 0:10:04.360 --> 0:10:07.640 nature of this commitment. Not only is it thirty five 0:10:07.640 --> 0:10:11.760 billion dollars, but they're going They're going to expand their 0:10:11.800 --> 0:10:16.040 footprint across the Commonwealth of Virginia. It's gonna bring the 0:10:16.080 --> 0:10:21.360 benefits that come with these jobs, the the multiplier effects 0:10:21.360 --> 0:10:24.080 that with these jobs, to the ecosystem that's created, the 0:10:24.160 --> 0:10:28.840 over a hundred businesses that will support the construction of 0:10:28.880 --> 0:10:33.240 these data centers to localities outside of Northern Virginia directly, 0:10:33.320 --> 0:10:36.240 and that's great for the Commonwealth of Virginia to see 0:10:36.240 --> 0:10:40.559 it expand our footprint and data centers and maintain our 0:10:40.640 --> 0:10:45.360 market leading position. AWS saying a thousand new jobs created 0:10:45.400 --> 0:10:47.840 directly from this. What I find fascinating, Governor is if 0:10:47.880 --> 0:10:50.840 you look at the history of the state's relationship with 0:10:50.880 --> 0:10:53.960 a WS, as you say, I think between two thousand 0:10:54.440 --> 0:10:57.920 and eleven, and they had already invested thirty five billion 0:10:58.000 --> 0:11:01.520 into your state. And yet in end tips through the 0:11:01.920 --> 0:11:05.559 form of grants and tax exemptions is still at play. 0:11:05.600 --> 0:11:11.880 Here was this a difficult negotiation, But there's there's a negotiation. 0:11:11.960 --> 0:11:15.240 It's never difficult or or easy. There's just a negotiation 0:11:15.320 --> 0:11:19.720 to represent the taxpayers of Virginia adequately and appropriately. That's 0:11:19.760 --> 0:11:23.240 my job. And I think I think we have struck 0:11:23.280 --> 0:11:26.720 a very good deal. UM. I think that the Virginia 0:11:26.760 --> 0:11:30.920 will benefit mightily. You know, the ecosystems that develop around 0:11:30.960 --> 0:11:35.920 the data center infrastructure are enormous. UH. There are thousands 0:11:35.920 --> 0:11:39.160 and thousands of jobs that will be that will be created. 0:11:39.200 --> 0:11:43.240 In addition to the direct jobs for aws. UH, there 0:11:43.240 --> 0:11:47.640 are contractors and and supportive companies UM that will that 0:11:47.720 --> 0:11:50.800 will be developed in order to support the construction but 0:11:50.840 --> 0:11:53.959 the operation. UH. And this will add to the locality 0:11:54.120 --> 0:12:00.040 substantial funding for schools and services and infrastructure. UH. This 0:12:00.160 --> 0:12:03.680 is this is really important to the long term economic 0:12:03.720 --> 0:12:06.920 development of the commonwealth. It's big, as I said, But 0:12:07.040 --> 0:12:11.560 on top of that, it continues Virginia's leading position in 0:12:11.800 --> 0:12:14.440 this industry of the future, and it's one that we 0:12:14.520 --> 0:12:17.319 continue to want to not only lead in but expand 0:12:17.320 --> 0:12:21.760 our lead in you know, Caro Virginia becoming a real 0:12:21.960 --> 0:12:25.160 data center, server powerhouse in the East coast. It has 0:12:25.200 --> 0:12:30.320 been for some time interesting person as well, potential presidential candidate, 0:12:31.360 --> 0:12:34.000 you know, it's background Carlisle Group. And I was asking 0:12:34.040 --> 0:12:36.679 about we'll hold on, why are you doing all these incentives, 0:12:36.679 --> 0:12:38.800 why jet to work so hard for that deal? And 0:12:38.880 --> 0:12:41.280 his point is net net great win for the state 0:12:41.280 --> 0:12:43.679 of Virginia and why they've been having them since two 0:12:43.720 --> 0:12:46.880 thousand and six. It's a great win, but also what's enticing, Yes, 0:12:47.000 --> 0:12:49.520 some of the tax breaks, but also the cheap electricity, right, 0:12:49.600 --> 0:12:52.400 and these things are just so hungry for that sort 0:12:52.400 --> 0:12:54.400 of power to be able to keep us all connected. 0:12:54.679 --> 0:12:56.920 And I think it details nicely with the conversation we're 0:12:56.920 --> 0:12:59.040 having in terms of layoffs, because of course Amazon's one 0:12:59.040 --> 0:13:00.560 of them. Of course they having to of eighteen tho, 0:13:01.040 --> 0:13:02.760 but they're still having to double down on where it 0:13:02.800 --> 0:13:05.200 makes sense to where to invest. And clearly Bank of 0:13:05.240 --> 0:13:08.240 America and Story wrote really making clear that this is 0:13:08.280 --> 0:13:10.160 an area that they're going to continue to spend on 0:13:10.200 --> 0:13:13.000 in terms of R and D. Yeah, and I asked 0:13:13.000 --> 0:13:14.880 about the layoffs, and he said, look, I'm always concerned 0:13:14.880 --> 0:13:17.319 about any layofs. My understanding is that Amazon did make 0:13:17.400 --> 0:13:20.240 some small cuts broadly in the state of Virginia, but 0:13:20.400 --> 0:13:22.880 AWS as a unit, continues to grow. That was the 0:13:22.920 --> 0:13:26.000 story of the day. The story longer term has been 0:13:26.040 --> 0:13:28.960 about the governor walking away from a potential deal with 0:13:29.080 --> 0:13:33.240 Ford and c A t L because essentially he felt 0:13:33.280 --> 0:13:35.160 that it was not in the best interests of the state. 0:13:35.440 --> 0:13:37.319 But he went further than that in the interview, carry 0:13:37.360 --> 0:13:40.760 take a lesson. We have a great site in in 0:13:40.880 --> 0:13:42.800 that part of Virginia, and I look forward to bringing 0:13:42.800 --> 0:13:45.800 a great company there, but it won't be one that 0:13:45.840 --> 0:13:48.679 it won't be one that uses a kind of a 0:13:48.720 --> 0:13:52.120 trojan horse relationship with the Chinese Communist Party in order 0:13:52.200 --> 0:13:57.280 in order to gain m That was kind of fascinating 0:13:57.320 --> 0:13:59.360 what he was saying about what ultimately this is a 0:13:59.440 --> 0:14:01.720 Chinese come any that he said, what was it a 0:14:01.760 --> 0:14:05.400 trojan horse? Was the turn of phrases. Yes, so you 0:14:05.440 --> 0:14:09.280 know his logic is that Ford partnering with c at L, 0:14:09.400 --> 0:14:11.880 the biggest maker of battery cells in the world, is 0:14:12.320 --> 0:14:15.320 contrary to the spirit of the Inflation Reduction Acts, which 0:14:15.360 --> 0:14:18.360 looks to establish the US supply chain, and he you know, 0:14:18.440 --> 0:14:21.240 he called c at L, you know, a puppet of 0:14:21.240 --> 0:14:24.920 the Chinese Communist Party, a front for the Chinese Communist Party, 0:14:25.320 --> 0:14:28.360 and that was his whole logic for saying, no, Ford 0:14:28.400 --> 0:14:30.360 cannot do this deal for the site in our state. 0:14:30.400 --> 0:14:32.680 And he said they had many other interested parties. He'd 0:14:32.800 --> 0:14:36.480 rather do it with something that was not embroadened controversy 0:14:36.600 --> 0:14:38.560 was the way we put it. It It was a wide 0:14:38.640 --> 0:14:43.640 ranging but intense but interesting conversation with Governor Young Can. Yeah, 0:14:43.720 --> 0:14:46.480 fascinating all the ways in which we weave it together 0:14:46.520 --> 0:14:48.440 with your focus on evs and cars head as well 0:14:48.480 --> 0:14:51.000 as your love of all things to do with data centers. Mean, 0:14:51.040 --> 0:14:52.640 while coming up what we've got to return to a 0:14:52.760 --> 0:14:54.520 I right with the story of the day. But Google's 0:14:54.520 --> 0:14:57.560 ARE unit is actually being swept up in the company's 0:14:57.560 --> 0:15:00.280 twelve thousand job cuts, as we mentioned, even though Pauson 0:15:00.440 --> 0:15:03.040 Pitcher himself is saying AI is still a key investment 0:15:03.120 --> 0:15:05.200 area for the company. We're going to discuss all of that, 0:15:05.400 --> 0:15:08.800 how it's impacting AI research and much more with an expert, 0:15:08.920 --> 0:15:36.960 an AI expert, Wendy Hall. This is Bloomberg now at 0:15:36.960 --> 0:15:40.280 a time where AI research is booming. Alphabet's Treasure to 0:15:40.280 --> 0:15:43.400 AI unit is actually not escaping the wave of laos. Indeed, 0:15:43.480 --> 0:15:45.520 it will be reorganized, the company said, as part of 0:15:45.520 --> 0:15:48.440 the company's swooping job cuts that are announced today. According 0:15:48.520 --> 0:15:51.840 to a memo scene by Bloomberg, let's bring in about 0:15:51.880 --> 0:15:54.240 the focus on AI, about the ethics that swept up 0:15:54.280 --> 0:15:57.000 in that, and indeed how government's oversee it all. Wendy 0:15:57.080 --> 0:15:59.520 Hall for her insight on all of this. She has, 0:15:59.560 --> 0:16:02.560 of course festeral computer Science the University of Southampton, ever 0:16:02.640 --> 0:16:04.320 in the United Kingdom, so she's staying up late for 0:16:04.400 --> 0:16:06.400 us because she was the co chair and the UK 0:16:06.560 --> 0:16:09.880 Government's AI review published back in and I think as 0:16:09.880 --> 0:16:11.840 a brit that's always what so interested me is that 0:16:11.920 --> 0:16:14.480 the UK, in many ways, due to deep mind, due 0:16:14.520 --> 0:16:16.440 to some of the real AI p r s, has 0:16:16.520 --> 0:16:19.000 thought about the way in which you need to oversee this, 0:16:19.160 --> 0:16:22.480 the ethics involved, had government relationships, academics as well such 0:16:22.480 --> 0:16:25.920 as yourself, and when it ultimately this all stems are 0:16:25.960 --> 0:16:30.200 exuberance or interest around chat GPT at the heart of 0:16:30.280 --> 0:16:32.880 it at the moment, are we are you worried or exciting? 0:16:32.960 --> 0:16:35.000 What can you balance that is one more than the 0:16:35.040 --> 0:16:39.160 other academic answer, hello, and thank you for inviting me 0:16:39.240 --> 0:16:45.120 on tonight. It's fine, it's both. Has shown people who 0:16:45.120 --> 0:16:48.680 don't understand anything about AI what the possibilities are and 0:16:48.800 --> 0:16:53.120 what the potentially negative consequences are. So I think it's 0:16:53.200 --> 0:16:55.960 open a lot of people's eyes to what the issues 0:16:56.000 --> 0:16:57.760 are around the AI that we, you know, many of 0:16:57.840 --> 0:16:59.920 us have been talking about for a number of years. 0:17:01.120 --> 0:17:03.960 We have to get governments to think about how best 0:17:04.000 --> 0:17:09.760 to regulate this new, very vast, emerging industry. Ultimately, that 0:17:09.960 --> 0:17:13.320 review that you published back in ten has it turned 0:17:13.400 --> 0:17:16.640 into anything tangible? Do have to say? The UK political 0:17:16.720 --> 0:17:19.760 situation has been well, tumultuous at best, but has there 0:17:19.840 --> 0:17:25.200 in any movements towards ensuring there is the right overseeing? Well, yes, 0:17:25.840 --> 0:17:28.760 we actually are about to produce a regulation paper, a 0:17:28.800 --> 0:17:32.320 white paper will be coming out in this roll. This 0:17:32.600 --> 0:17:36.800 this spring from the Office Rail which all happen that 0:17:36.960 --> 0:17:39.520 that was created as a result of the review we 0:17:39.600 --> 0:17:42.440 did in twenty seventeen. I'm on the A Council which 0:17:42.480 --> 0:17:46.000 was created as a result of the review seventeen. We've 0:17:46.040 --> 0:17:48.760 had a lot of money put into AI. You know, 0:17:48.840 --> 0:17:52.920 a small country, our size. We hit way above our weight. 0:17:53.800 --> 0:17:56.840 We can't ever be Google or Stamford or m I T. 0:17:57.440 --> 0:18:00.200 But you know we we we have found has a 0:18:00.320 --> 0:18:02.840 university's doing amaintenance and training. We put a lot of 0:18:02.880 --> 0:18:06.040 money into training people for this new industry. And the 0:18:06.160 --> 0:18:09.240 AI regulation papers I said, is due out this this quarter, 0:18:09.880 --> 0:18:13.800 which will be the government's the UK governments take on 0:18:13.920 --> 0:18:18.040 how we begin to regulate AI. UM. It will be 0:18:18.160 --> 0:18:22.920 different to the EU Act. We won't go distattory law straightaway, 0:18:23.440 --> 0:18:26.440 and it will be sector based as well to start with. 0:18:28.119 --> 0:18:30.520 Because this well, but it's all very early, you know. 0:18:30.600 --> 0:18:34.720 We have just GtC has shown people the complexity of 0:18:34.880 --> 0:18:37.159 what you've got to break it. And it's not just 0:18:37.240 --> 0:18:40.600 about what governments do, it's what industry does itself. It's 0:18:40.720 --> 0:18:42.600 very interesting to hear the news from Google because I 0:18:42.680 --> 0:18:45.760 imagine their open A eyes quite a threat to Google, 0:18:46.359 --> 0:18:50.439 and I imagine the restructuring big time in that they 0:18:50.520 --> 0:18:53.520 want different types of people because they're going to have 0:18:53.680 --> 0:18:57.160 to take that open AI threat very seriously. And because 0:18:57.160 --> 0:19:01.920 it's Microsoft that's back in open AY. I now very 0:19:02.119 --> 0:19:06.320 interesting a I was coming up between the tech companies 0:19:07.200 --> 0:19:10.359 UM and of course the UK and Europe that we 0:19:10.480 --> 0:19:14.080 don't want all everything happening outside of our countries. You know, 0:19:14.200 --> 0:19:17.240 we have all sorts of issues, which would be we 0:19:17.359 --> 0:19:20.800 need to worry about data sovereignary sovereignty, we need to 0:19:20.840 --> 0:19:24.200 worry about digital ideas. Um. You know, there's so many 0:19:24.280 --> 0:19:27.240 things to think about. Well, Wendy, I wanted to ask 0:19:27.280 --> 0:19:30.159 you about that point because essentially what the current tools do, 0:19:30.240 --> 0:19:32.560 if you think about chat, GPT or DALLY, is they 0:19:32.680 --> 0:19:36.560 take existing content texts or commands. In the case of 0:19:36.640 --> 0:19:39.240 chat GPT, images and his DALLY. I don't know if 0:19:39.280 --> 0:19:41.199 you saw it, but there was a deep dive by 0:19:41.240 --> 0:19:43.399 my colleagues at Bloomberg Law about the first U S 0:19:43.480 --> 0:19:46.600 copyright lawsuit, and I guess the inference is, how does 0:19:46.640 --> 0:19:49.320 that limit what you can put in to the language 0:19:49.359 --> 0:19:52.000 models in order to get something out? What's your key 0:19:52.119 --> 0:19:55.080 to that that piece that your your team sent me 0:19:55.480 --> 0:19:58.560 about an hour ago. It's fascinating because we're going to 0:19:58.640 --> 0:20:02.560 see a lot more of those types of legal challenges 0:20:02.960 --> 0:20:07.399 because if you take chat GPT, it is effectively effectively 0:20:07.520 --> 0:20:10.520 trained on any text that is available on the Internet. 0:20:11.119 --> 0:20:14.280 So that's anything that you get from Google, from Wikipedia, 0:20:14.520 --> 0:20:17.200 from anything people have put up on their own sites 0:20:17.720 --> 0:20:21.680 and dally in the same in images. Now with what 0:20:21.840 --> 0:20:24.919 it shows us is that these a I tools at 0:20:24.960 --> 0:20:32.120 the moment don't create right. They copy, they predict, They 0:20:32.480 --> 0:20:37.480 very cleverly merge ideas, integrate ideas somatically, which is one 0:20:37.520 --> 0:20:41.080 of the things I've been interested in. They don't create right. 0:20:41.160 --> 0:20:44.000 So I think it's absolutely when you think about the 0:20:44.000 --> 0:20:45.959 effect on the music industry, which has had a lot 0:20:46.000 --> 0:20:50.359 of bashing from technology generally. Anyway, let to learn the poets, 0:20:50.440 --> 0:20:52.680 I mean, lots of people have got chat GPT to 0:20:52.800 --> 0:20:55.080 write poetry. Well a lot of that is based on 0:20:55.280 --> 0:20:58.840 styles of poetry that that Jack Gputy has been trained on. 0:20:59.000 --> 0:21:02.800 And the Internet and the other thing to remember also 0:21:03.000 --> 0:21:05.920 with things like chap Upoty and Daddy, they are dally 0:21:07.200 --> 0:21:11.320 very very very expensive to run. They have huge supercomputers 0:21:11.920 --> 0:21:16.119 and that produced this, um you know, do the the 0:21:16.920 --> 0:21:19.960 looking over the Internet and do the harvesting of the 0:21:20.000 --> 0:21:23.159 information on the Internet and doing the natural average personsing 0:21:23.200 --> 0:21:25.040 and all the work they have to do. This won't 0:21:25.080 --> 0:21:28.440 stay free forever. It can't do. It cannot stay free forever. 0:21:28.560 --> 0:21:31.119 And the really interesting thing I think the chat GBT 0:21:31.320 --> 0:21:33.719 they were very clever because they've probably driven the prices 0:21:33.800 --> 0:21:36.359 of the company up with that doesn't make any sense 0:21:36.400 --> 0:21:40.960 to do. So Microsoft is looking to invest money into it, 0:21:41.320 --> 0:21:43.400 and I, you know, I sort of like to say 0:21:44.080 --> 0:21:45.680 there was a time where Mikeson was the bad guy. 0:21:45.760 --> 0:21:48.640 Laws might trust Microsoft to be careful with what they're doing. 0:21:48.720 --> 0:21:52.800 They're investing huge amounts of money, um, and it worked 0:21:52.920 --> 0:21:58.119 free forever. Wendy Hall, Professor of Computer Science, University of Southampton. 0:21:58.200 --> 0:21:59.280 We are going to have to get you back on 0:21:59.320 --> 0:22:02.080 the program. We did need descript to surface this time around. 0:22:02.160 --> 0:22:13.360 Thank you so much. Welcome back to bloom Bag Technology 0:22:13.400 --> 0:22:15.159 and Caroline Hide in New York. And let's turn to 0:22:15.160 --> 0:22:17.440 the crypto world, because not only is bitcoin on a tear, 0:22:17.680 --> 0:22:20.640