Speaker 1: From Bahard where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Luod Love.
Speaker 2: I'm Caroline Heide of Bloomberg's world headquarters in New York,
Speaker 2: and I'm Met Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology.
Speaker 2: Coming up. We'll give you the key takeaways from Apple's
Speaker 2: scary fast unveil, which featured new chips, laptops, so much more.
Speaker 4: Plus we'll speak to an AI advisor to the White
Speaker 4: House as President Biden takes the most significant step to
Speaker 4: date in regulating artificial intelligence technology.
Speaker 2: Meanwhile, in Vidia, it dips below one trillion dollars today
Speaker 2: as concerns linger over US curbs on China and how
Speaker 2: that may impact billions of dollars of existing orders. We'll
Speaker 2: have that and so much more, but first let's just
Speaker 2: check on on these marks. It is the end of
Speaker 2: the month. We all know there's plenty of candy being
Speaker 2: eyed for the day, but it is the end of
Speaker 2: October and it was down, down, down, if you see
Speaker 2: for the Really the Nasdaq currently off by some three
Speaker 2: point three percent end the month, but it's the third
Speaker 2: straight months of losses as we see for some of
Speaker 2: the key big benchmarks across the US at the moment
Speaker 2: ed and that as we worry about earnings, we worry
Speaker 2: about of course geopolitics as well. This is the worst
Speaker 2: therefore three month loss set of three months or so
Speaker 2: that we've seen since back in what June twenty twenty two. Overall,
Speaker 2: though this isn't as bad as September was. That's moving
Speaker 2: on to some of the other benchmarks that we're keeping
Speaker 2: an eye on. I'm looking the Nasdaq one hundred on
Speaker 2: the day basically flat, which is pushing off of those
Speaker 2: loads for the day, but the tenure yield is coming
Speaker 2: down a little bit, so we've got a little bit
Speaker 2: of buying head of the all important FED meeting that
Speaker 2: comes tomorrow, and of course how much the Treasury Department
Speaker 2: will actually be issuing a new debt. We've got a
Speaker 2: little bit of a bid, but we're seeing the dollar
Speaker 2: having a big bid against the Japanese end. This is
Speaker 2: the key macro story of the day, really, the fact
Speaker 2: that the back of Japan with Japan was not going
Speaker 2: to be changing any of those yield curve controls, but
Speaker 2: into the micro particularly the tech focus micro ed Yeah.
Speaker 3: And earnings is still a story.
Speaker 4: Pinterest a real surprise up more than eighteen percent, on
Speaker 4: track for its biggest jump since August of twenty twenty two.
Speaker 4: Top and bottom line beat, but a record monthly active
Speaker 4: user base. We will get a key analyst conversation later
Speaker 4: in the show on that name. Tesla's moving to the
Speaker 4: upside modestly four tens and one percent, but it's kind
Speaker 4: of rebounding from this slump since October eighteenth, and earnings
Speaker 4: where it's down more than twenty percent. There's a lot
Speaker 4: of concern about interest rates and how that's impacting EV demand.
Speaker 4: We will have that conversation later in the program. And
Speaker 4: on Semi we had the CEO on the show twenty
Speaker 4: four hours ago, a tepid forecast for the fourth quarter,
Speaker 4: a mystery OEM customer they wouldn't name that dragged down
Speaker 4: results and the stock a second day of pressure.
Speaker 1: There.
Speaker 4: The key name that we're looking keeping it real this
Speaker 4: Halloween is Apple.
Speaker 3: They're scary fast event.
Speaker 4: We got what we expected because of Bloomberg's Mark German
Speaker 4: in his reporting. And I'm at a trio of Matt
Speaker 4: book pros and the first volume may curve PCs with
Speaker 4: a three nanometer processor, the M three, M three Pro
Speaker 4: and M three Max chip.
Speaker 3: What does this mean?
Speaker 4: Does it put the mac back on track? We're joining
Speaker 4: us now is Carolina Milianacy Creative Strategies, President and principle,
Speaker 4: And listen, you just heard me Carolina. Does this put
Speaker 4: the MacBook back on track?
Speaker 5: I think it certainly puts Mac and ARM back on track.
Speaker 5: I think coming out of the snap Dragon qualcom event
Speaker 5: last week and seeing what they're able to do with
Speaker 5: their platform and now having Apple with the N three
Speaker 5: clearly puts the ARM architecture as a whole in a
Speaker 5: much better place compared to Intel an X eighty six.
Speaker 5: So I think that's what we're looking at, the excitement
Speaker 5: around what this opportunity brings to the PC market.
Speaker 2: What did you make at the price points?
Speaker 5: Krolena, It was very interesting to see that the entry
Speaker 5: level MacBook Pro was dropped in price visits. The one that,
Speaker 5: together with the Mac Bugere as being the volume maker
Speaker 5: and one that now at a lower price of one
Speaker 5: five ninety nine starting point is going to really worry
Speaker 5: the pcoems. You know the power that Apple has to
Speaker 5: convince people that now that they own every from the
Speaker 5: silicon to the harder to the software, and Tim Cook
Speaker 5: pointed to that in the event yesterday, is really reassuring
Speaker 5: customers that basically they're buying something that is in full
Speaker 5: control of Apple and not like before at the mercy
Speaker 5: of the Intel silicon, it.
Speaker 2: Really was Apple silicon that was a selling point here, Carolina,
Speaker 2: is that enough to drive significant well desire to be
Speaker 2: buying in particularly as we had towards the holidays, You think.
Speaker 5: Well, I think if the silicon doesn't convince you, the
Speaker 5: black collar will was a lot of assignment on the
Speaker 5: black color for the higher end s Q of the
Speaker 5: book pro and I think that where Apple is pointing
Speaker 5: is really upgrading current Intel based Mac owners and then
Speaker 5: m one owners to really get into the newest and
Speaker 5: fastest of their silicon product based. But you know, from
Speaker 5: a holiday perspective, we are still in a tough economic
Speaker 5: environment and that needs to be reconciled with We're looking
Speaker 5: at also enterprise, not only consumers for Apple though, and
Speaker 5: so there's definitely more opportunity there as we get into
Speaker 5: the new year.
Speaker 4: By the way, Caroline and Carolina, the entire event, according
Speaker 4: to a blog post that Apple posted six minutes ago,
Speaker 4: was shot on an i phone fifteen Promax the entire thing,
Speaker 4: and it was edited on Max, So they're trying to
Speaker 4: flex their product line across the board. What I think
Speaker 4: is interesting, Carolina, is how they compare the performance of
Speaker 4: M three and there's kind of an arc, right, M three,
Speaker 4: M three Pro, M three Max relative to M one,
Speaker 4: but also Intel, right, the top tier MacBook Pro they
Speaker 4: said was eleven times faster than the most powerful Intel
Speaker 4: Power PC.
Speaker 3: So who are they going after here?
Speaker 6: Right?
Speaker 4: Are they going after just the high end PC market Intel,
Speaker 4: you know, users that want an upgrade, or are they
Speaker 4: just trying to keep refreshing those existing install base of
Speaker 4: Apple devices.
Speaker 5: Both is really trying to capture market share in the
Speaker 5: higher end of a PC market, getting as many people
Speaker 5: as possible off of Intel so they can experience the
Speaker 5: higher seamless workflows that comes from owning all the pieces
Speaker 5: of the equation and continue to vent upgrade from there.
Speaker 5: I do think that, as you said, there's a lot
Speaker 5: of flex there on. They had actually footnotes at the
Speaker 5: end of the event about being shot on iPhone and
Speaker 5: editor on Max, so they are really talking to creators.
Speaker 5: By the same time, without ever mentioning jen Ai. They
Speaker 5: were talking to AI developers two very high demanding workflows,
Speaker 5: so there's definitely an attention there to where the conversation
Speaker 5: is today.
Speaker 3: Carolyn E.
Speaker 4: MILNECI of Creative Strategies. Great to catch up here on
Speaker 4: Bloomberg Technology.
Speaker 3: Thank you.
Speaker 4: Another Apple story that we've been tracking, the company could
Speaker 4: be forced to scale back its app store fees for
Speaker 4: developers after one of the EU's antitrust watchdogs said its
Speaker 4: commissions violate the block's rules. The Dutch Authority for Consumers
Speaker 4: and Market's ruled that Apple's commission on certain app subscriptions
Speaker 4: are an abuse of the company's market power.
Speaker 2: Caroc ongoing with the Dutch agency. Meanwhile, let's talk about
Speaker 2: pinterest shares absolutely rallying today after reporting sales that men
Speaker 2: expectations and mid of course, a push by the company
Speaker 2: to make the platform basically a more shoppable. Tom Forte
Speaker 2: da Davison, senior research analyst is with us and I mean, boy,
Speaker 2: you had a by rating you reierated. This is the
Speaker 2: best day for the stock since three years ago.
Speaker 7: Tom, Yeah, they'd certainly delivered the treats that Pinterest Halloween.
Speaker 7: So what you're seeing is the company's making it easier
Speaker 7: for advertisers to prove that they're able to get conversion
Speaker 7: or sales off of their platform. This is having a
Speaker 7: huge positive impact to their revenue. You're seeing accelerating revenue
Speaker 7: top line growth, and at the same time, like other
Speaker 7: big tech companies, they have very much you know, belt
Speaker 7: tightening going on managing expenses. So the combination of accelerating
Speaker 7: revenue growth with belt tightening is tremendous revenue and tremendous earnings.
Speaker 4: What was interesting Tom was monthly active uses hit a record,
Speaker 4: or another way of looking at it is they eclipse
Speaker 4: their pandemic peage. What was the more important metric for
Speaker 4: you that monthly active use number or the fineinantals where
Speaker 4: they beat top and bottom line.
Speaker 7: What's very important on the monthly active users is they're
Speaker 7: generating gen Z interest. So when you think about having
Speaker 7: more engagement than they had in the early stages of
Speaker 7: the pandemic, that's wonderful. How are they able to do
Speaker 7: it so they stop trying to be TikTok. You've seen
Speaker 7: meta platforms and others basically come up with metso products
Speaker 7: to stay on parity with TikTok and they leaned into
Speaker 7: what made pinterest unique and what made pinterest special, and
Speaker 7: that's driven use in gen Z and it's had a
Speaker 7: halo effect to the extent that the gen z's posting
Speaker 7: content that other generations are liking as well. So very
Speaker 7: impressive engagement growth for Pinterest.
Speaker 3: Tom help us out with this one.
Speaker 4: The CFO is saying that the investments they've made are
Speaker 4: increasing shopability.
Speaker 3: What is that? What does that mean?
Speaker 7: The simple way to think about it is they have
Speaker 7: a third party advertising initiative with Amazon. So let's say
Speaker 7: you went to pinterest in the search for a green dress.
Speaker 7: Among the many pictures you would see would be items
Speaker 7: from Amazon. You could then click on those items and
Speaker 7: buy those items.
Speaker 6: So think about it.
Speaker 7: In the past, you would see wonderful pictures on Pinterest,
Speaker 7: but it wasn't always easy. Not easy to buy the sofa,
Speaker 7: not easy to buy the apparel. They made it a
Speaker 7: lot easier. That's improved the shoppability of Pinterest.
Speaker 2: I mean, that's really what Bill Ready has been saying
Speaker 2: since it's come aboard a little over a year ago.
Speaker 2: It's about people come to Pinterest with intent. So clearly
Speaker 2: advertiser seeing that for now, Tom Forte. Great to have
Speaker 2: some time with you, Thank you, Da Davison.
Speaker 8: Then one thing is clear. To realize the promise of
Speaker 8: AI and avoid the risk, we need to govern this technology.
Speaker 8: We face a genuine inflection point in history, one of
Speaker 8: those moments where the decisions we make in the very
Speaker 8: near term are going to set the course for the
Speaker 8: next decade.
Speaker 2: President Biden there after signing an Executive Order on Artificial Intelligence,
Speaker 2: the most significant step to date in regulating the technology.
Speaker 2: Joining us for more on all of this is doctor
Speaker 2: Joey Bolowini, founder of the Algorithmic Justice League and author
Speaker 2: of Unmasking AI. My Mission to Protect What is Human
Speaker 2: in a World of Machines is published today. Congratulations spending
Speaker 2: some time with us as well. It's great to have
Speaker 2: you here. Equitable and Accountable AI, that's all about what
Speaker 2: your Algorithmic Justice League is about. Does this EO get
Speaker 2: us there in some way? Absolutely?
Speaker 1: I will actually say this is a commendable step forward.
Speaker 1: And part of this is because the EO that's been
Speaker 1: issued includes teeth when it comes to government agencies using AI.
Speaker 1: So once you're tying federal dollars too, who can procure
Speaker 1: particular systems? Then we're actually starting to see something that's
Speaker 1: going to compel change. So I am excited to see
Speaker 1: the civil rights peace within this EO.
Speaker 2: It's interesting you talk about teeth and there's sort of
Speaker 2: the carrot teeth situation the US is using. There's the
Speaker 2: teeth of finds. The EUAI Act has been talking about.
Speaker 2: Everyone wants in on this pile of regulation or talking
Speaker 2: about it. We've got the UKI Summit about to happen.
Speaker 2: One of the critiques of that AI Summit is there's
Speaker 2: not enough actual people from civil society at that summit.
Speaker 2: How much do you think the US and lawmakers are
Speaker 2: engaging with civil society on this.
Speaker 1: I think that is a fair critique. I am glad
Speaker 1: to share that a member of the Algorithmic Justice League
Speaker 1: will be there, But when we look at the overall roster,
Speaker 1: we don't want the tech companies writing the regulations, and
Speaker 1: so I certainly think there's more work to be done,
Speaker 1: and I also do think it's a good step forward
Speaker 1: to have the AI Safety Summit at this time.
Speaker 3: Doctor Joy.
Speaker 4: The main mechanism or tool that the Executive Order puts
Speaker 4: in place is big technology companies having to hand over
Speaker 4: an LLM or foundation model for safety review before it
Speaker 4: is released to the wider public. Just explain how you
Speaker 4: think that will work as a safeguard as we develop
Speaker 4: next generations of large language models.
Speaker 1: I think it could go one of two ways. If
Speaker 1: you actually have the companies themselves setting what the safety
Speaker 1: measures are and what the safety test will be, will
Speaker 1: have a situation of grading your own homework, which I
Speaker 1: don't necessarily think is going to get us where we
Speaker 1: want to go. If it is a situation where you
Speaker 1: actually have third parties that are establishing what the standards
Speaker 1: are and the guidelines are, then I think you actually
Speaker 1: have a situation where the companies will have to meet
Speaker 1: specific regulations that they themselves are not setting. So it
Speaker 1: remains to be seen. I am cautiously optimistic, but companies
Speaker 1: cannot be grading their own homework and then.
Speaker 3: Turning in, Sorry to interrupt you.
Speaker 4: The executive order kind of gives power to the agencies.
Speaker 4: Twenty four hours ago, we had doctor faith A Lee
Speaker 4: of Stanford on the show, and she basically said, I
Speaker 4: want to see a more even distribution of funding and
Speaker 4: control across academia, industry, and the public sector. Where do
Speaker 4: you stand on that balance of who is working on
Speaker 4: AI and who has the power to regulate it.
Speaker 1: I think I would give more power to the government
Speaker 1: and then to companies. But I do think it's commendable
Speaker 1: to see increased AI capacity for academics. As we know,
Speaker 1: a lot of the compute power and a lot of
Speaker 1: the data access does go mainly to the large tech company,
Speaker 1: so it does make it difficult for researchers and outsiders
Speaker 1: to even have a sense of how to assess the
Speaker 1: risk if you don't have that access. So that's a
Speaker 1: good step forward.
Speaker 2: Your whole Mighty thesis methodology basically showed the level of
Speaker 2: bias whether it comes racial agenda within sort of AI
Speaker 2: services from certain companies in the US. You are going
Speaker 2: out on your book tour and talking to some of
Speaker 2: the most notable names in technology, some Lpment for example
Speaker 2: being one of them. How much they wanted to engage
Speaker 2: with you. How much have they been trying to well
Speaker 2: improve their homework before turning it in and having someone
Speaker 2: else market I think it's a mixed bag.
Speaker 1: I will say for Open AI, they have reached out
Speaker 1: to the Algorithmic Justice League multiple times and when they
Speaker 1: had their bug bounty program to try to look at
Speaker 1: AI vulnerabilities, they mention one of our white papers and
Speaker 1: so forth. So I think there is a good faith
Speaker 1: effort to reach out, but I certainly don't think it's enough,
Speaker 1: and we certainly have different views. For example, how do
Speaker 1: you credit and compensate artist? I do think many companies
Speaker 1: have gotten a free pass on building llms with data
Speaker 1: that's been collected without consent and without compensation yourself.
Speaker 2: Being an artist, a poet, not only just researcher and
Speaker 2: policy guidance is important. Rate the media for a minute,
Speaker 2: because I think there is this desire sometimes to go
Speaker 2: for the biggest headline, which often is you know, terminator style,
Speaker 2: AI is going to end us all. But much of
Speaker 2: the criticism has been in the here and the now.
Speaker 2: We need to tackle the bias in the real data
Speaker 2: the application. Where we are today, are we managing to
Speaker 2: move away from hyperboley and get to actually what really
Speaker 2: is the risk when it comes to AI?
Speaker 1: It depends on the outlet, right, and so I commend
Speaker 1: news outlets that actually bring in voices like the Algorithmic
Speaker 1: Justice League CDT and others. So we're getting a different perspective.
Speaker 1: But I still think there is a lot of fear
Speaker 1: mongering and numerism, and that's one of the concerns I
Speaker 1: have even with the framing of the AI Safety Summit,
Speaker 1: and so I certainly want to make sure we are
Speaker 1: focused on immediate and emerging harms. It's not to say
Speaker 1: we don't want to be forward looking, but we don't
Speaker 1: want to be so distracted that we don't attend to
Speaker 1: the thing things we already know how to address.
Speaker 4: Doctor Joy bolh and Weeni, founder of the Algorithmic Justice League.
Speaker 4: Great to have you here on Bloomberg Technology. Thank you
Speaker 4: so much. Now coming up on the program in video.
Speaker 4: Shares taking a hit today on reports they may have
Speaker 4: to cancel billions of dollars worth of advanced chip sales
Speaker 4: to China. More on how those new US export rules
Speaker 4: are putting the company in a state of limbo. The
Speaker 4: stockdown about one percent, more than two percent in the session.
Speaker 4: This is Bloomberg Technology. Okay, it's time for talking tech
Speaker 4: and first up, Vodaphone is agreeing to sell its Spanish
Speaker 4: unit to Zagonda Communications. The deal is said to be valued
Speaker 4: at roughly five point three billion dollars including debt. The
Speaker 4: European Commission is currently examining that deal, which would shift
Speaker 4: the telecommunications and open the door to more consolidation across Europe.
Speaker 4: And Bunge, the Sony owned game studio behind the popular
Speaker 4: Destiny Too franchise, has let go of an undisclosed number
Speaker 4: of its workforce. This comes after Bungee delayed the upcoming
Speaker 4: expansion of Destiny to, pushing it out of Sony's current
Speaker 4: fiscal year. The move is part of a wider restructuring
Speaker 4: at the company and reflects a recent bout of layoffs
Speaker 4: across the gaming industry. Plus, Samsung is seeing encouraging signs
Speaker 4: of recovery in the chips market after reporting profit for
Speaker 4: the third quarter, which was well ahead of estimates. The
Speaker 4: South Korean giant raked in more than four billion dollars
Speaker 4: of net income in the September quarter, more than double
Speaker 4: what was expected. Executives say that artificial intelligence is driving
Speaker 4: demand and it plans increased spending on advanced chip making.
Speaker 2: Caroline, Meanwhile, let's look at the fresh US curbs on
Speaker 2: the advanced chip making that's going on to China. They're
Speaker 2: presenting a new risk to in video. We understand now
Speaker 2: a deep and dim in the shares that you've currently
Speaker 2: see to push the market value just below that one
Speaker 2: trillion dollar mark. So all off of the Wall Street
Speaker 2: Journal reported, well, well that potentially in Video might have
Speaker 2: to cancel five billion dollars worth of sales to China.
Speaker 2: But please to welcome Conjan Zivani. He's been bag intelligence
Speaker 2: analyst covering all things semiconductors. And was this in some
Speaker 2: way obvious that they were going to have to pull
Speaker 2: back from selling China sooner than some had anticipated.
Speaker 9: Yeah, I mean the cancelation of the grace periods was
Speaker 9: definitely a surprise for them, and we think now it
Speaker 9: is the restrictions have reached a point where this does
Speaker 9: start having some long term impacts. So when we look
Speaker 9: at long term impacts next year, which is fiscal twenty five,
Speaker 9: which is equal on to Calnar twenty four for them,
Speaker 9: you know, we estimate about five to eight billion that
Speaker 9: they would have shipped to China, so you can put
Speaker 9: a five billion threshold baseline impact that it will have
Speaker 9: to the top line. However, there are some avenues we
Speaker 9: think where Nvidia can offset that loss, one being shipping
Speaker 9: to other customers outside of because they're still as of
Speaker 9: right now and things can change. Given the uncertain macro
Speaker 9: there are still but there are still demand for Nvidia chips.
Speaker 9: And second, there might be ways that n Media can
Speaker 9: still get exposure to the Chinese market through alternate means.
Speaker 4: What we're talking about in the AI chick context is
Speaker 4: GPUs that are basically assemble components that go into data centers,
Speaker 4: and for China that's always been twenty to twenty five
Speaker 4: percent of its data center business right but their supply constrained,
Speaker 4: and they never talk about it. Is it just simply
Speaker 4: that they can sell to other nations, other startups around
Speaker 4: the world the same product that they would have otherwise
Speaker 4: sent to China.
Speaker 9: Well, not exactly the same product, but a version of
Speaker 9: the same product.
Speaker 1: Yes.
Speaker 9: And then the second key point is when we look
Speaker 9: at these cloud providers, their CAPEX is not only the
Speaker 9: only avenue that n media can get exposure. For example,
Speaker 9: Microsoft has a compute offload through open AI, so when
Speaker 9: we look at Microsoft Capex, that's not the only piece
Speaker 9: that n media gets, but also through open AI. You
Speaker 9: have the same thing going on with Alibab announcing that
Speaker 9: they are going to offer Meda's large language models. So
Speaker 9: there are still different avenues that sort of Nvidia can
Speaker 9: get an indirect exposure to the Chinese market.
Speaker 4: Counjen Savannia, Bloomberg Intelligence, the other mister chip out here
Speaker 4: in San Francisco, Caroline.
Speaker 2: Welcome back to Bloomberg Technology. I'm Caroline had in New York.
Speaker 3: And I'm ed Louvelow in San Francisco.
Speaker 4: Let's go to check on European markets which have just
Speaker 4: closed all this week. Will bring you the European market
Speaker 4: closed and the stock six hundred Europe kind of this
Speaker 4: continent wide gauge of equities rising for a second straight day.
Speaker 4: But we're ending the month of October, and this has
Speaker 4: been the worst October going back to two thousand and four.
Speaker 4: European stocks. A bright spot with Stilantis and their earnings.
Speaker 4: That stock in its European trading up three point six percent.
Speaker 3: Oil rebounding modesty.
Speaker 4: Brent, which is kind of more of the global benchmark
Speaker 4: as opposed to WTI, have been moving lower Monday over
Speaker 4: the weekend due to the activity in the Israel hamass war,
Speaker 4: rebounding modestly four tenths of one percent in euro dollar
Speaker 4: one oh five six two softer the euro by half
Speaker 4: a percentage point against the dollar.
Speaker 2: Caroline tell you also, what's a little bit softer today
Speaker 2: has been the Nasdaq and the NaSTA one hundred and
Speaker 2: we're down by another tenth of a percent, but actually
Speaker 2: all told, on the month of October we're down more
Speaker 2: than three percent, not as bad as it was the
Speaker 2: five percent sell off back in September, but it's three
Speaker 2: straight months of losses for the NASDAK at the moment,
Speaker 2: worse set of losing streets that we've seen all the
Speaker 2: way back to, of course about June of last year.
Speaker 2: So clearly pressure is on some of these big tech
Speaker 2: naus A mid earnings amid these geopolitical stories that you
Speaker 2: talk us through ed looking in in video, of course,
Speaker 2: we're just talking about the JYMP politics there, the sales
Speaker 2: into China and the issue with well maybe not being
Speaker 2: able to put some of those orders through to that country.
Speaker 2: So stock under pressure there. It just only tests that
Speaker 2: up what about tenth of percent, two tens of percent,
Speaker 2: let's call it. What a painful two weeks that's been
Speaker 2: the wed dof You see the story at what one
Speaker 2: hundred and forty five billion dollars wiped off in terms
Speaker 2: of its market capitalization over the course of those two weeks.
Speaker 2: That does seem to be in some way to do
Speaker 2: with its earnings.
Speaker 4: Yeah, I think if we go back to October eighteenth
Speaker 4: when they reported earnings, until this point, we're down twenty
Speaker 4: percent on Tesla's shares. The other way looking at it, though,
Speaker 4: is that Tesla's up more than sixty percent year to date,
Speaker 4: while the S and P five hundred is up much
Speaker 4: more modestly.
Speaker 3: But the concern is interest rates.
Speaker 4: You know Elon Musk talking about the impact of interest
Speaker 4: rates and they've used price cuts earlier in the year
Speaker 4: to unlock demand. How much do we put emphasis on
Speaker 4: high rate environment hurting consumers hitting that ev demand? But yeah,
Speaker 4: that's a pretty telling chart, isn't it. The story at
Speaker 4: least in the last two weeks has changed that we're
Speaker 4: a little modestly higher.
Speaker 2: It's Tuesday, and it has been interesting, hasn't it? Ultimately
Speaker 2: that they've had pressure from China as well byd But
Speaker 2: I don't know if you noticed overall that there was,
Speaker 2: of course, well, the idea that we're going to be
Speaker 2: seeing Elon Musk flying over to the UK. I think
Speaker 2: he's actually just touched down. This is all about not
Speaker 2: Tesla but art Intelligence, which of course, is a long
Speaker 2: term theme for Tesla.
Speaker 4: Yeah, it is a long term theme because the ultimate
Speaker 4: business model is to have a fleet of robotaxis, which
Speaker 4: are Tesla vehicles centrally controlled by Tesla.
Speaker 3: The training of that is.
Speaker 4: Done on Dojo, their supercomputer, and the neural network they're
Speaker 4: building is their version of AI, which they have high
Speaker 4: degree of confidence on. And AI is really top of
Speaker 4: mind for mister Mask right.
Speaker 2: Now, instantly is as he touches down for the UKAI Summit,
Speaker 2: and of course all things AI have just been happening
Speaker 2: right here in the United States with that Executive Order
Speaker 2: as well, I speak to someone who's been there helping
Speaker 2: craft what a NEO might look like with the President.
Speaker 2: You are at this signing of the Executive Order, credo
Speaker 2: a CEO Laverena singh Laverna. Really important to have some
Speaker 2: time with you today because you're in the business of governance,
Speaker 2: governance of AI systems. Ultimately, this Executive Order, I feel,
Speaker 2: leaves a lot still yet to be ironed out when
Speaker 2: it comes to actual guardrails, actual benchmarks, actual well really auditing.
Speaker 2: How do you see this EO doing.
Speaker 10: Thank you so much for having me here today. It
Speaker 10: truly is a historic moment, and I am reporting here
Speaker 10: life from DC. You know, this Executive Order was one
Speaker 10: of the most comprehensive and expansive commitments to responsible AI
Speaker 10: that we've seen from the federal government. And something that
Speaker 10: I've stated in the past is we need to be
Speaker 10: okay with adaptive policy making, and that's not exactly what
Speaker 10: we are seeing at this moment in time. This year
Speaker 10: is so comprehensive. I've barely made it through half of
Speaker 10: it right now, but this is a strong signal from
Speaker 10: the government that now it is not about just talking
Speaker 10: about responsible AI, but making sure that not only the
Speaker 10: US agencies but also private sector is showing success against
Speaker 10: what those guardrails are. So Carolyn, absolutely, this is a
Speaker 10: starting point.
Speaker 2: There's a lot to unpack.
Speaker 10: In this executive Order, but I think they're going to
Speaker 10: see ripple effects across the world with this historic executive
Speaker 10: order from the President the Vice President Navarna.
Speaker 4: Of the fifty percent of the extensive EO that you
Speaker 4: have read, what's your biggest criticism of the final form?
Speaker 4: Where would you have liked to have seen the administration
Speaker 4: do more?
Speaker 11: So?
Speaker 10: Ed, I think this goes back to we always want
Speaker 10: more and especially as technologists, we want it to be precise.
Speaker 10: But I think let's focus on what is so great
Speaker 10: about the CEO. I think this EO think about it
Speaker 10: as not a rule of the law, but this is
Speaker 10: a work plan that is providing a very compressed timeline
Speaker 10: for US agencies as well as the private sector to
Speaker 10: start not only defining what does good look like in
Speaker 10: terms of benchmarking and evaluation of these powerfolised systems, but
Speaker 10: also holding them accountable in a very short timeframe to
Speaker 10: come up with a game plan as to how we
Speaker 10: are going to make sure that that whatever is defined
Speaker 10: as good is actually adhere to. So two things that
Speaker 10: I would like to call out in the EO that
Speaker 10: we are very excited about is first and foremost, you know,
Speaker 10: creation of standards led by NEST, especially for benchmarking and
Speaker 10: auditing of artificial intelligence systems. We have about you know,
Speaker 10: two hundred and seventy days for NEST to actually start
Speaker 10: building a game plan for that. And then secondly, the
Speaker 10: United States government agencies, you know, we're looking for the
Speaker 10: OMB guidance which is going to come out any day,
Speaker 10: which is going to put further focus on how procurement
Speaker 10: of AI systems by US government and the agencies happen.
Speaker 10: So I would say that right now we should be
Speaker 10: focusing on all the great things that are in this
Speaker 10: ear and then yes, there's lots more work ahead of us,
Speaker 10: and we're going to continuously see over the coming months
Speaker 10: more and more getting defined in terms of what is
Speaker 10: really possible.
Speaker 2: MIST being the national standard strategy for critical and Emerging
Speaker 2: Technology in AVRENA. I'm interested that they're setting basically benchmark guidelines.
Speaker 2: Your company already is kind of a private sector addition
Speaker 2: that could be taken if you suddenly got a lot
Speaker 2: of inbound from this, because when you're helping companies basically
Speaker 2: build AI accountablity.
Speaker 10: Yes, Carolyn so crew DOOAI is an AI governance platform
Speaker 10: that provides continuous oversight and accountability of artificial intelligence systems.
Speaker 10: I would say, not only because of this executive action,
Speaker 10: but the need for trust, which is so critical as
Speaker 10: companies are adopting building using artificial intelligence at scale, that
Speaker 10: has really propelled and increased the need for CREDOI in
Speaker 10: the market as well. And I think just to underscore
Speaker 10: in CREDOAI, we are operationalizing what does good look like?
Speaker 10: These might come from standards like nisst AI rmf ISO standards.
Speaker 10: It could come from regulations like New York City Low
Speaker 10: number one forty four. It can come from company policies
Speaker 10: or industry best practices, and CREDOAI already has been at
Speaker 10: the front of it. So now I would say the
Speaker 10: companies as well as US government agencies are really requiring
Speaker 10: creed OI as a core platform that's going to enable
Speaker 10: trust with their consumers.
Speaker 3: Nevrina.
Speaker 4: In that light and in pursuit of a range of views,
Speaker 4: I want to ask you the same question I've asked
Speaker 4: all our guests in the last twenty four hours. The
Speaker 4: main mechanism that the EO spells out and the Defense
Speaker 4: Procurement Act empowers them to do, is to require makers
Speaker 4: of large language models to offer them up for government
Speaker 4: safety review before they are released to the wider public.
Speaker 4: If a startups building in LM, is that a good mechanism.
Speaker 4: Will that help the industry move forward?
Speaker 2: I think that's a great question.
Speaker 10: I am concerned about regulatory capture, and I think we
Speaker 10: have to really focus on how do we bring this
Speaker 10: entire startup innovation ecosystem forward, And something that we are
Speaker 10: actively focused on at CREED OAI where executive orders as
Speaker 10: well as reads are not a barrier for startups, especially
Speaker 10: not the well capitalized startups, but it's an enabler for them.
Speaker 10: So in terms of that, what the EO is spelling
Speaker 10: out that the foundation model providers have to provide test
Speaker 10: results to the government before releasing these models, especially for
Speaker 10: government use. I think it's a good step, but it's
Speaker 10: not comprehensive. And this is where I am encouraged to
Speaker 10: see more action in the coming months, where we are
Speaker 10: going to provide that oversight as well as benchmarking and
Speaker 10: testing requirements across the entire value chain, the foundation model developers,
Speaker 10: the application developers, the enterprises, and the consumers.
Speaker 2: So you know, that's the.
Speaker 10: Ripple effect of this executive order that I'm really excited
Speaker 10: to see coming in the few months.
Speaker 2: Everynessing Credo, AI CEO, thanks for making time with us
Speaker 2: for of course you're at that White House event. And
Speaker 2: of course one of the things that executive orders discussed
Speaker 2: is well water marking, being able to understand when something
Speaker 2: is fake or indeed created by AI. Well, we're going
Speaker 2: to talk about investing in watermarking when it comes to
Speaker 2: the art world. VC spotlights upnext, Christie's Ventures global head
Speaker 2: Devan Thaka is going to be joining us on its
Speaker 2: portfolio expansion. This is Blombog Technology in today's Ventures Spotlight.
Speaker 2: We're going to sort of fuse art and VC with
Speaker 2: Christie's Ventures of course, held at seventh edition of Art
Speaker 2: and Tech Summit earlier this year, announcing a fair few
Speaker 2: investments Manifold Technologies, Lay Zero Labs for example, Proto Hologram. Today,
Speaker 2: Christie's Ventures is back expanding its portfolio, adding Eco Mark
Speaker 2: and Atomic Form. Global head Divan Thacker joins us. Now,
Speaker 2: I think from rather late in Hong Kong, where you're
Speaker 2: on the road speaking to well companies building things, talk
Speaker 2: to us about some of these investments. What is the
Speaker 2: thesis behind ventures? Where are you backing? It looks as
Speaker 2: though you're backing sort of authenticity in so large part.
Speaker 2: We talk about that with AI at the moment.
Speaker 11: Thank you for having me back, Carol and Ed and
Speaker 11: hello from Hong Kong for us, like we take a
Speaker 11: very principled approach on investing. As we mentioned last time,
Speaker 11: we're early stage investors. We only invest in seed and
Speaker 11: Series A companies, and Echomark for us is one of
Speaker 11: those personally very near and dear to my heart company
Speaker 11: based in Seattle, Washington that is looking to create deterrence
Speaker 11: technology by adding invisible watermarks and AI based watermarks, something
Speaker 11: that you just discussed with your prior panelists into documents.
Speaker 6: To deter people from leaking them.
Speaker 11: Whether it's the Supreme Court league that we saw a
Speaker 11: few few quarters ago, or more recently things we've seen
Speaker 11: from other corporate as well as government branches. Leaks are
Speaker 11: a big problem, and echo Mark is attempting to use
Speaker 11: state of the art technology to solve them, so that
Speaker 11: even if you take a picture with your phone of
Speaker 11: a little corner of a document, we're able to sort
Speaker 11: of detect that and catch who leaked the document. And
Speaker 11: Echomark just raised Series seed in collaboration Craft Ventures and
Speaker 11: Chriss is proud to.
Speaker 6: Be part of that round.
Speaker 11: So for us, we see this technology applying directly to
Speaker 11: our business because we have some of the most sensitive
Speaker 11: client information in our business globally right who has what
Speaker 11: art and who is looking to buy and.
Speaker 6: Sell what art? So for us, this is critical data
Speaker 6: to protect.
Speaker 4: Well den That's what caught my eye and what's interesting
Speaker 4: about echo Mark that Christie's auction House was one of
Speaker 4: the first users of the echo mark technology. It came
Speaker 4: out of stealth like a month ago. Just in very
Speaker 4: simple terms, explain how the auction house uses it with
Speaker 4: its client communications as a case study.
Speaker 6: Yeah, no, absolutely.
Speaker 11: So to take the example of a deal term and
Speaker 11: say you have a piece of art which is iconic
Speaker 11: and very expensive, and it's based in say some part
Speaker 11: of the world, in your home in Hong Kong, for example,
Speaker 11: the terms of that deal often exchanged in PDFs and
Speaker 11: email attachments. Those could accidentally or non accidentally leak to
Speaker 11: the public. Ecomark allows us to create another layer of
Speaker 11: protection so that that document is personalized for the recipient.
Speaker 11: So if you, as a recipient get this document and
Speaker 11: accidentally leak it or maliciously leak it, we can immediately
Speaker 11: know where the source of the leak comes from, so
Speaker 11: that deters people from taking some malicious activity against sensitive data.
Speaker 11: So that's the prototype, or that's the first use case
Speaker 11: that we're working on. But I think the implications of
Speaker 11: this are widespread. We can see that applying to all
Speaker 11: forms of communication, including this call that we're having, could
Speaker 11: also have invisible marks, so that if I took a
Speaker 11: screenshot or a picture from my phone and leaked the
Speaker 11: conversation that we were having.
Speaker 6: I could immediately get caught.
Speaker 11: So the implications of what ecomark is building are deeply
Speaker 11: rooted in sort of better stewardship of documents, and that's
Speaker 11: what we're using it in our business.
Speaker 2: It's interesting that your other investment, atomic Form is still
Speaker 2: a back on web three, is still a back on
Speaker 2: non fungible tokens. Of course, I think back to the
Speaker 2: b pal sixty nine million dollar auction that made sort
Speaker 2: of put NFTs on the map with Christie's Why still
Speaker 2: support this ecosystem when so many people.
Speaker 6: Question, no great question.
Speaker 11: We first met atomic Form very early in the days
Speaker 11: of NFTs as a company that provided beautiful displays for
Speaker 11: these pieces of digital art. I think my belief is
Speaker 11: that in the long run, NFTs other sort of nomenclature,
Speaker 11: whatever you want to call it, in the end, it's
Speaker 11: all digital art, and what we've seen through the progression
Speaker 11: of Christie's three point zero and investments we've made there,
Speaker 11: digital art is here to stay. That's just our belief.
Speaker 6: The bid that interested us.
Speaker 11: In an atomic form is in addition to the hardware
Speaker 11: bit they're also a great software company, which I believe
Speaker 11: in software as a business model, as a scalable business model,
Speaker 11: so traditional introdditional businesses. If you take comics books for example,
Speaker 11: or comic books for example, there's a rating system. Right
Speaker 11: when you go into a comic book store, you can
Speaker 11: see a blue box that says the six star, seventh star.
Speaker 6: No one's doing that for digital assets.
Speaker 11: So tomic Form is one of those companies that's doing
Speaker 11: innovative things with software, whether it's ratings, whether it's applying
Speaker 11: physical activation data back to the blockchain.
Speaker 6: For example, if I loaned.
Speaker 11: You an NFT that happens in a physical world at
Speaker 11: MoMA for example, that doesn't get captured back into the
Speaker 11: NFT itself, this company is sort of adding that metadata
Speaker 11: back to the NFT, really connecting the Web two and
Speaker 11: Web three worlds. And we believe that whether it's Web
Speaker 11: three in its current iteration or Web three with AI augmented,
Speaker 11: we're going to live in a very fast and connected
Speaker 11: universe where companies.
Speaker 6: Like this are going to be very important. Hence the
Speaker 6: support all.
Speaker 4: Right devunk cekr Christy's ventures searching for startups at in
Speaker 4: Hong Kong. Thank you for joining us here. X, the
Speaker 4: platform formerly known as Twitter, is worth less than half
Speaker 4: of what Elon must pay for it just a year
Speaker 4: ago when he bought the company for forty four billion dollars.
Speaker 4: According to a Bloomberg source, restrictive stock units awarded to
Speaker 4: employees value the company at nineteen billion dollars based on
Speaker 4: ursus of forty five dollars apiece joining us here in
Speaker 4: SF Bloomberg's Asia accounts. You and I reported this story together,
Speaker 4: and part of it is a drop off in sales.
Speaker 4: Part of it is the debt burden, and part of
Speaker 4: it is that this is a work in progres shall
Speaker 4: we say.
Speaker 2: It's so many things.
Speaker 12: It's all the things that you just mentioned, right, I mean,
Speaker 12: this is such a steep drop in valuation. Part of
Speaker 12: it is the advertising revenue. In September it was down
Speaker 12: sixty percent. And you think about advertising revenue historically for
Speaker 12: X has been eighty ninety percent of the revenue, so
Speaker 12: that's already huge, as you mentioned. And then you have
Speaker 12: thirteen billion dollars of debts, so now you have to
Speaker 12: pay one point two billion dollars in interest every year.
Speaker 12: So you add all that up and they're in a
Speaker 12: really tough smart financially and so it sort of makes
Speaker 12: sense that the valuation is so well.
Speaker 4: The other thing we reported in the last week or
Speaker 4: so is like what the end result might look like.
Speaker 4: Elon must saying we're going after LinkedIn and we're going
Speaker 4: after YouTube in this all hands of employees.
Speaker 3: What does that tell us about what X might be
Speaker 3: in the future.
Speaker 12: It's that everything ap idea, right that Elon has talked
Speaker 12: about over and over again, But it could be interesting
Speaker 12: if it sort of turns.
Speaker 3: Out that way, right.
Speaker 12: It's the idea of being able to do things like
Speaker 12: areio and video calling. You mentioned LinkedIn, so they have
Speaker 12: a hiring service doing more video aka YouTube and then
Speaker 12: even having a wire service that they're planning the launch
Speaker 12: for it for PR So it could be all those things.
Speaker 4: And the lesson learned of covering test and SpaceX for
Speaker 4: the last six years is don't discount Elon Musk because
Speaker 4: they've been highly successful, but rocky adventures, bliebizhu accounts, thank
Speaker 4: you Carrot, Yeah, and.
Speaker 2: They're betting big maybe on being a payments focus as well.
Speaker 2: Let's go back to the world of fintech. FTX co
Speaker 2: founder Sam amun Fried just finished testifying in his criminal
Speaker 2: fraud trial today, megs Max Chafkin, who was actually in
Speaker 2: the court queuing for hours and the rain, you join
Speaker 2: us for the latest, And I mean he was trying
Speaker 2: to convinced that he didn't know as much as he
Speaker 2: should have known.
Speaker 13: Yes, and this testimony has been going on since Friday.
Speaker 13: We've seen two and a half days of Sam Bankman Freed,
Speaker 13: essentially the defense trying to paint a picture of a
Speaker 13: well meaning but perhaps slightly out of touch executive, someone
Speaker 13: with competence and at least a rough understanding of his responsibilities.
Speaker 13: What we saw from the prosecution was kind of a
Speaker 13: methodical portrayal of Sam Bankman Freed as essentially a professional liar.
Speaker 13: We saw repeated instances or accusations of deception deceit, as
Speaker 13: well as a refusal by the defendant to sort of
Speaker 13: admit to any of it. And as it played out
Speaker 13: in court, particularly yesterday and this morning, it was tough.
Speaker 2: It was tough, perhaps less tough, obviously under friendly fare
Speaker 2: from defense. Then when it came to the prosecutors, did
Speaker 2: he lose his ground somewhat? What was the demeanor of
Speaker 2: him in court?
Speaker 13: His demeanor was extremely subdued, you know, very very voicing,
Speaker 13: smaller than it had And as I was watching this,
Speaker 13: I just kept thinking about the way that this performance
Speaker 13: was playing, you know, during the rise of FTX, when
Speaker 13: we had Crypto soaring and we saw him as this
Speaker 13: kind of genius guy who was part of this like
Speaker 13: story movement. As things have fallen apart, that affect has
Speaker 13: not worked as well, and we've seen somebody who has seemed,
Speaker 13: even even when under questioning from his own lawyers, somewhat
Speaker 13: out of his depth. And then, you know, under fire
Speaker 13: from a very adept federal prosecutor, you know, it only
Speaker 13: got worse.
Speaker 4: So now is this story of psychology and process because
Speaker 4: the government could cool to other witnesses and it's about
Speaker 4: the loss.
Speaker 3: The impression of the jury. What do you reconmac say
Speaker 3: does this go from here? Well, the government has rested
Speaker 3: its case.
Speaker 13: In fact, they were they had talked about a rebuttal case,
Speaker 13: but that is not going to happen. They, it seems,
Speaker 13: feel confident with the case they presented, which, as we've
Speaker 13: talked about on this show before, it's been pretty comprehensive.
Speaker 13: We've seen multiple close friends, former colleagues of Sam magun
Speaker 13: freed testify to financial crimes as well as a not
Speaker 13: especially inspiring performance by the defendant. On the other hand,
Speaker 13: you know, this is a complicated case, seven counts. The
Speaker 13: business FTX was in has a lot of financial nuance,
Speaker 13: so you never know how it's going to play with
Speaker 13: a jury, and we're just gonna have to wait and see.
Speaker 13: I think it's possible the jury iful you get the
Speaker 13: case as early as tomorrow, certainly some point this week.
Speaker 2: We wait, We watched. We thank you for standing out
Speaker 2: in the cold and getting inside that courtroom for us.
Speaker 2: Smacks traffickin and do go see Ruin as well, which
Speaker 2: he's currently in the original's piece on the undoing of FTX.
Speaker 2: But that does it for this edition of BlueBag Technology yet.
Speaker 4: Yeah, thanks to everyone that's been tuning into the podcast.
Speaker 4: We had some pretty deep conversations around AI today, So
Speaker 4: recap the show wherever you get your podcasts, Apple, Spotify, iHeart,
Speaker 4: and of course we published the podcast to all of
Speaker 4: the bloombag platforms as well. Two days in megaweek ahead
Speaker 4: from San Francisco and New York City.
Speaker 3: This is Bloomberg Technology