1 00:00:02,520 --> 00:00:13,520 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive 2 00:00:13,560 --> 00:00:17,360 Speaker 1: from coast to coast, with Caroline Hyde in New York 3 00:00:17,640 --> 00:00:23,160 Speaker 1: and Edva Low in San Francisco. 4 00:00:23,440 --> 00:00:24,840 Speaker 2: This is Bloomberg Tech coming up. 5 00:00:24,840 --> 00:00:28,160 Speaker 3: The NASDAQ one hundred falls into correction territory is big 6 00:00:28,200 --> 00:00:32,440 Speaker 3: tech stocks keep falling? The Iran war rattling investor confidence. 7 00:00:32,680 --> 00:00:35,720 Speaker 3: Plus Meta is set to fund the construction of seven 8 00:00:35,800 --> 00:00:39,320 Speaker 3: new natural gas fired energy plants to feel its Hyperian 9 00:00:39,400 --> 00:00:42,800 Speaker 3: data center in Louisiana, and Anthropic is said to be 10 00:00:42,840 --> 00:00:45,800 Speaker 3: looking to IPO as soon as October. This is the 11 00:00:45,840 --> 00:00:49,720 Speaker 3: AI company wins a court order blocking a Trump ban 12 00:00:50,120 --> 00:00:54,360 Speaker 3: on government use of its AI tool. Welcome to the program, 13 00:00:54,480 --> 00:00:58,760 Speaker 3: Happy Friday, but less happy in financial markets where technology 14 00:00:58,800 --> 00:01:02,560 Speaker 3: stocks have entered correction territory. Look at how the nas 15 00:01:02,640 --> 00:01:05,280 Speaker 3: that one hundred is traded over the last six months 16 00:01:05,360 --> 00:01:07,959 Speaker 3: or so, and you can see that as we kind 17 00:01:07,959 --> 00:01:10,160 Speaker 3: of got into the beginning of twenty twenty six, we've 18 00:01:10,160 --> 00:01:12,119 Speaker 3: gone from those highs down to. 19 00:01:12,600 --> 00:01:14,920 Speaker 2: A bit of a trough that's. 20 00:01:14,720 --> 00:01:17,840 Speaker 3: Been driven by partly the war in Iran and geopolitics, 21 00:01:17,880 --> 00:01:21,840 Speaker 3: but also a very deep assessment of AI spending. Capsule 22 00:01:21,880 --> 00:01:25,320 Speaker 3: expenditures and cash flows relating to AI. Case in point 23 00:01:25,360 --> 00:01:29,440 Speaker 3: and a case study is Microsoft. Microsoft is on track 24 00:01:29,680 --> 00:01:32,039 Speaker 3: to have its worst quarter since two thousand and eight, 25 00:01:32,360 --> 00:01:35,040 Speaker 3: the worst quarter since the financial crisis, and a big 26 00:01:35,080 --> 00:01:38,600 Speaker 3: part of that, including the activity we're seeing in this session, 27 00:01:39,040 --> 00:01:42,680 Speaker 3: is the commitment to AI instructure, build out, the financing 28 00:01:42,720 --> 00:01:45,760 Speaker 3: of it, and what's underpinning investor confidence right now. 29 00:01:45,880 --> 00:01:47,200 Speaker 2: Then there's the newsflow in the moment. 30 00:01:47,280 --> 00:01:50,680 Speaker 3: Shares of Meta are also down in this Friday session, 31 00:01:50,880 --> 00:01:52,520 Speaker 3: and honestly, they're having a bit of a tough week, 32 00:01:52,560 --> 00:01:55,200 Speaker 3: on track for the biggest drop since October. The social 33 00:01:55,240 --> 00:01:58,840 Speaker 3: media giant is set to funder construction of seven new 34 00:01:58,920 --> 00:02:03,000 Speaker 3: natural gas fired energy plants to fuel its Hyperion data. 35 00:02:02,760 --> 00:02:04,480 Speaker 2: Center, which is in Louisiana. 36 00:02:04,560 --> 00:02:08,240 Speaker 3: The project is expected to deliver five point two gigawatts 37 00:02:08,240 --> 00:02:12,119 Speaker 3: of electricity, which is a lot. Bloomberg's Ridley Griffin joins 38 00:02:12,200 --> 00:02:15,240 Speaker 3: us on set. This is a big project, So you know, 39 00:02:15,320 --> 00:02:19,480 Speaker 3: you kind of talk about seven natural gas flowered sources 40 00:02:19,520 --> 00:02:22,240 Speaker 3: of energy for a specific project, but give us the 41 00:02:22,280 --> 00:02:25,360 Speaker 3: sum total of the reporting and a bit more about Hyperium. 42 00:02:25,520 --> 00:02:25,720 Speaker 2: Yeah. 43 00:02:25,760 --> 00:02:28,880 Speaker 4: So Hyperion is the crown jewel of Meta's data center. 44 00:02:28,919 --> 00:02:29,160 Speaker 2: Fleet. 45 00:02:29,320 --> 00:02:33,800 Speaker 4: They have in development more than thirty data centers. 46 00:02:33,440 --> 00:02:34,720 Speaker 2: And this is the biggest. 47 00:02:34,760 --> 00:02:37,840 Speaker 4: It's in rural Louisiana, And with today's announcement, we are 48 00:02:37,840 --> 00:02:40,880 Speaker 4: actually going to see a total of ten natural gas 49 00:02:40,919 --> 00:02:45,600 Speaker 4: plants serving this one single data center. It's a massive 50 00:02:45,680 --> 00:02:49,960 Speaker 4: amount of energy from fossil fuels and it is just 51 00:02:50,400 --> 00:02:54,720 Speaker 4: another push forward in this expansion of a major project. 52 00:02:54,840 --> 00:02:57,760 Speaker 3: There isn't any sort of like dollar figure attached to this, 53 00:02:57,919 --> 00:03:00,240 Speaker 3: you know, it's the gigawatt figure. And you know, over 54 00:03:00,240 --> 00:03:01,880 Speaker 3: the course of the war in Iran in particular, we've 55 00:03:01,880 --> 00:03:04,440 Speaker 3: been very focused on the movement in oil prices, but 56 00:03:04,560 --> 00:03:08,120 Speaker 3: actually natural gas is much more relevant to how a 57 00:03:08,200 --> 00:03:11,120 Speaker 3: data center is powered. Explain Meta's footprint here, I guess 58 00:03:11,200 --> 00:03:14,760 Speaker 3: relative to the other big data center operators around the world. 59 00:03:14,880 --> 00:03:18,200 Speaker 4: Yeah, I mean, this is a huge increase just from 60 00:03:18,200 --> 00:03:21,000 Speaker 4: Meta's own fleet when it was five gigawats alone, that 61 00:03:21,040 --> 00:03:25,160 Speaker 4: was about a thirty three x increase from the old 62 00:03:25,320 --> 00:03:29,800 Speaker 4: data center size. This is much bigger than other competitors. 63 00:03:30,080 --> 00:03:32,520 Speaker 4: But I want to say five gigawa is just to 64 00:03:32,560 --> 00:03:36,480 Speaker 4: support the compute. This entire facility is right now expected 65 00:03:36,720 --> 00:03:39,840 Speaker 4: to have seven point five gigawats powering it because it's 66 00:03:39,880 --> 00:03:41,600 Speaker 4: not just the gps that need the power, but the 67 00:03:41,600 --> 00:03:42,320 Speaker 4: broader facility. 68 00:03:42,360 --> 00:03:45,600 Speaker 3: It's an interesting part of your reporting about Hyperia and 69 00:03:45,680 --> 00:03:48,800 Speaker 3: Louisiana in particular, which is META saying, look, where are 70 00:03:48,960 --> 00:03:51,160 Speaker 3: going to cover the cost of the electricity one way 71 00:03:51,240 --> 00:03:53,440 Speaker 3: or the other, one reason being they don't want to 72 00:03:53,480 --> 00:03:56,280 Speaker 3: pass it on to the general population of that zip code. 73 00:03:56,440 --> 00:03:59,120 Speaker 3: That's been a tension in the Great AI buildout. 74 00:03:59,160 --> 00:04:03,960 Speaker 4: Absolutely recently, President Donald Trump, you know, actually require that 75 00:04:04,240 --> 00:04:07,880 Speaker 4: big tech companies pledge to pay those costs. This is 76 00:04:07,880 --> 00:04:09,880 Speaker 4: something META has been saying for quite some time, but 77 00:04:09,920 --> 00:04:12,160 Speaker 4: they don't want to ruffle feathers in a political moment 78 00:04:12,160 --> 00:04:14,680 Speaker 4: that is already bringing a great amount of scrutiny to 79 00:04:14,680 --> 00:04:15,760 Speaker 4: these data centers the. 80 00:04:15,640 --> 00:04:18,920 Speaker 3: Most Riley Griffin, thank you very much. Wall Street's under 81 00:04:18,920 --> 00:04:22,040 Speaker 3: pressure with the tech heavy Nazak one hundred slipping into 82 00:04:22,040 --> 00:04:24,400 Speaker 3: correction territory. We talked about that at the top of 83 00:04:24,440 --> 00:04:28,800 Speaker 3: the show. Rising oil prices, renewed inflation concerns tied to 84 00:04:28,960 --> 00:04:32,360 Speaker 3: escalating tensions in Iran are weighing heavily on the sector. 85 00:04:32,400 --> 00:04:36,400 Speaker 3: It's pressuring valuations and the outlook for big tech this 86 00:04:36,520 --> 00:04:39,080 Speaker 3: is what markets look right now in the moment this Friday. 87 00:04:39,160 --> 00:04:43,640 Speaker 3: Let's speak to Natalie Galla Ball, principal economist and director 88 00:04:44,200 --> 00:04:46,880 Speaker 3: at Board. There is a lot going on in the 89 00:04:46,880 --> 00:04:49,919 Speaker 3: world right now. You know, we focused on the correction 90 00:04:50,000 --> 00:04:52,440 Speaker 3: in the Nasdaq one hundred as being a consequence of 91 00:04:52,720 --> 00:04:54,880 Speaker 3: what's been happening around the world. Actually a lot of 92 00:04:54,920 --> 00:04:57,520 Speaker 3: that still relates to what's happening in Ai. 93 00:04:58,200 --> 00:04:59,279 Speaker 2: But in the here and now. 94 00:04:59,160 --> 00:05:02,000 Speaker 3: This Friday, the war in Iran drives markets, and it 95 00:05:02,080 --> 00:05:05,479 Speaker 3: drives the sentiment of technology investors. Where are we at 96 00:05:05,560 --> 00:05:07,960 Speaker 3: in this global economy? 97 00:05:08,080 --> 00:05:10,479 Speaker 5: You know, from a broad point of view, what we 98 00:05:10,560 --> 00:05:14,000 Speaker 5: have to sort of acknowledge is that economic volatility is 99 00:05:14,080 --> 00:05:18,640 Speaker 5: no longer episodic. It is an embedded part of the 100 00:05:18,720 --> 00:05:21,680 Speaker 5: economic narrative. And we're seeing that in oil prices in 101 00:05:21,720 --> 00:05:26,880 Speaker 5: real time. Monday alone, Brent crude fell ten fourteen percent 102 00:05:26,920 --> 00:05:29,680 Speaker 5: in the matter of five hours. I mean it's back 103 00:05:29,800 --> 00:05:30,960 Speaker 5: up as of today. 104 00:05:31,279 --> 00:05:31,479 Speaker 2: Now. 105 00:05:31,520 --> 00:05:34,200 Speaker 5: If you are at all in an industry that has 106 00:05:34,320 --> 00:05:39,600 Speaker 5: energy sensitivity, this environment feels almost impossible to plan in. 107 00:05:41,200 --> 00:05:43,279 Speaker 2: One industry that is sensitive. 108 00:05:43,400 --> 00:05:46,599 Speaker 3: That Riley Griffin was just talking about it Meta committing 109 00:05:46,640 --> 00:05:52,000 Speaker 3: to invest in seven LNG powered plants for one specific 110 00:05:52,080 --> 00:05:55,000 Speaker 3: data center site. You've been looking at the data of 111 00:05:55,080 --> 00:05:57,720 Speaker 3: how the war in Iran is impacting energ What are 112 00:05:57,720 --> 00:05:58,200 Speaker 3: you seeing? 113 00:05:59,440 --> 00:06:02,720 Speaker 5: Yeah, I mean think just relative to pre conflict, LNG 114 00:06:02,880 --> 00:06:07,280 Speaker 5: prices have swung sixty to eighty percent. Even if part 115 00:06:07,279 --> 00:06:10,200 Speaker 5: of the impact is transitory. Say we get a best 116 00:06:10,200 --> 00:06:13,719 Speaker 5: case scenario and the Strait of Hormuz reopens tomorrow, we 117 00:06:13,760 --> 00:06:16,360 Speaker 5: still have a structural component we have to account for. 118 00:06:16,720 --> 00:06:19,200 Speaker 5: What really comes to mind is the fact that seventeen 119 00:06:19,240 --> 00:06:22,400 Speaker 5: percent of Qatar's LNG production is offline for three to 120 00:06:22,480 --> 00:06:25,640 Speaker 5: five years. So this really has an implication on the 121 00:06:25,720 --> 00:06:27,919 Speaker 5: cost side of the balance sheet for these companies. 122 00:06:29,520 --> 00:06:32,440 Speaker 3: The other side of the conflict in Iran, and something 123 00:06:32,480 --> 00:06:36,320 Speaker 3: specific to that region is the production of helium and 124 00:06:36,480 --> 00:06:42,840 Speaker 3: sulfur based compounds critical components or materials. 125 00:06:42,440 --> 00:06:43,440 Speaker 2: In chip fabrication. 126 00:06:43,640 --> 00:06:48,200 Speaker 3: Both they provide stabilization in the etching process, in the 127 00:06:48,200 --> 00:06:51,839 Speaker 3: deposition process. A lot of that happens in Katar. Again, 128 00:06:51,960 --> 00:06:55,279 Speaker 3: are using data that suggests some kind of long term 129 00:06:55,279 --> 00:06:58,520 Speaker 3: impact or indeed, in the short term a crisis of 130 00:06:58,560 --> 00:06:59,839 Speaker 3: supply in those markets. 131 00:07:01,240 --> 00:07:05,440 Speaker 5: Yes, absolutely, so. Let's take helium for example, thirty four 132 00:07:05,520 --> 00:07:10,120 Speaker 5: percent of global supply comes from one facility in Qatar 133 00:07:10,440 --> 00:07:13,840 Speaker 5: that has been affected by the strikes. It's anticipated to 134 00:07:13,880 --> 00:07:17,240 Speaker 5: be offline in some regard for four to six months. 135 00:07:17,640 --> 00:07:21,960 Speaker 5: Industry estimates are that we have about three months of inventory. Right, 136 00:07:22,000 --> 00:07:24,360 Speaker 5: So you do some back of the Napkin math and 137 00:07:24,440 --> 00:07:27,440 Speaker 5: you realize that the question really isn't will there be 138 00:07:27,480 --> 00:07:30,320 Speaker 5: an impact? There will be an impact? When will it 139 00:07:30,440 --> 00:07:33,360 Speaker 5: hit very likely Q two and to what extent? That 140 00:07:33,440 --> 00:07:37,080 Speaker 5: really depends on the continued path that this conflict takes 141 00:07:37,080 --> 00:07:41,080 Speaker 5: and if there is future escalation or hopefully de escalation. 142 00:07:42,440 --> 00:07:46,000 Speaker 3: Away from I guess the short term in the war 143 00:07:46,080 --> 00:07:50,760 Speaker 3: in Iran, there probably still is a debate around the 144 00:07:50,800 --> 00:07:54,280 Speaker 3: health of the global economy, which in the technology context 145 00:07:54,320 --> 00:07:57,920 Speaker 3: has just been underpinned by massive commitments to spend. The 146 00:07:57,960 --> 00:08:01,760 Speaker 3: impact on raw materials, labor, How close are you tracking 147 00:08:01,840 --> 00:08:06,000 Speaker 3: right now the consistency of capital expenditures that relate to 148 00:08:06,600 --> 00:08:08,320 Speaker 3: data center in particular. 149 00:08:09,600 --> 00:08:11,920 Speaker 5: I would say, right the question we have to ask 150 00:08:11,960 --> 00:08:16,880 Speaker 5: ourselves is what is being impacted by this conflict. The 151 00:08:16,920 --> 00:08:19,440 Speaker 5: cost side of the balance sheet is what's being impacted 152 00:08:19,440 --> 00:08:22,280 Speaker 5: The cost to power these AI data centers, for example, 153 00:08:22,360 --> 00:08:26,520 Speaker 5: the cost to produce these chips. Now, the second question 154 00:08:26,680 --> 00:08:30,240 Speaker 5: is well these hyperscalers continue to meet demand. The answer, 155 00:08:30,240 --> 00:08:32,640 Speaker 5: in my opinion, absolutely yes. So where do we see 156 00:08:32,640 --> 00:08:35,440 Speaker 5: the impact? We see the impact on margin compression that 157 00:08:35,520 --> 00:08:37,840 Speaker 5: seems like almost a given. And when do we see it? 158 00:08:37,880 --> 00:08:40,520 Speaker 2: We see it in Q Two, Natalie. 159 00:08:41,240 --> 00:08:44,120 Speaker 3: People at least on this program have been split on 160 00:08:44,760 --> 00:08:49,160 Speaker 3: drawing parallels between this economic shock that is a war 161 00:08:49,200 --> 00:08:51,679 Speaker 3: in Iran and some of what we saw in the 162 00:08:51,720 --> 00:08:55,040 Speaker 3: early part of the COVID era in its impacts in 163 00:08:55,080 --> 00:09:00,400 Speaker 3: supply chain shipping. For example, are you seeing any similarities 164 00:09:00,480 --> 00:09:02,680 Speaker 3: or parallels? Well, can you tell me why this time? 165 00:09:02,720 --> 00:09:05,199 Speaker 3: For the tech sector in particular, it is different. 166 00:09:06,920 --> 00:09:10,080 Speaker 5: In one way, It's different because we aren't seeing a 167 00:09:10,120 --> 00:09:12,360 Speaker 5: total shutdown of our supply chain network. 168 00:09:12,440 --> 00:09:12,600 Speaker 6: Right. 169 00:09:12,679 --> 00:09:15,640 Speaker 5: We are seeing a very large impact in the Strait 170 00:09:15,640 --> 00:09:18,760 Speaker 5: of Hormuse. We have an ongoing impact in the Red Sea. 171 00:09:18,920 --> 00:09:21,160 Speaker 5: But the good news is right, we can still get 172 00:09:21,200 --> 00:09:21,880 Speaker 5: goods from. 173 00:09:21,880 --> 00:09:22,440 Speaker 6: A to B. 174 00:09:22,640 --> 00:09:25,080 Speaker 5: The bad news is that to do that we add 175 00:09:25,080 --> 00:09:28,439 Speaker 5: thirty five hundred to four thousand nautical miles and about 176 00:09:28,480 --> 00:09:32,199 Speaker 5: one to two point five million dollars in excess fuel costs, 177 00:09:32,200 --> 00:09:35,280 Speaker 5: depending on vessel size and so we can continue to 178 00:09:35,320 --> 00:09:37,520 Speaker 5: meet demand. It's just the fact that the supply chain 179 00:09:38,840 --> 00:09:41,640 Speaker 5: environment is quite stressed and we're very likely to see 180 00:09:41,679 --> 00:09:45,480 Speaker 5: an elevated cost implication, whereas in COVID right even the 181 00:09:45,520 --> 00:09:48,720 Speaker 5: ability to meet demand was quite questionable due to the 182 00:09:48,720 --> 00:09:49,720 Speaker 5: broad based shutdown. 183 00:09:50,840 --> 00:09:51,880 Speaker 2: Not a Gallagher of Board. 184 00:09:51,880 --> 00:09:53,440 Speaker 3: It's great to have you back on the show, and 185 00:09:53,480 --> 00:09:57,080 Speaker 3: it's difficult to look at the impact of what's happening 186 00:09:57,360 --> 00:10:00,920 Speaker 3: from the technology sector to the technology sector with everything 187 00:10:00,960 --> 00:10:02,719 Speaker 3: happening with the war in Iran coming up on the 188 00:10:02,760 --> 00:10:06,319 Speaker 3: show and Thropic as an October IPO, we have the 189 00:10:06,320 --> 00:10:07,640 Speaker 3: Bloomberg reporting next. 190 00:10:08,040 --> 00:10:09,480 Speaker 2: This is Bloomberg Tech. 191 00:10:23,840 --> 00:10:26,719 Speaker 3: And Thropic, the maker of the popular Claude chatbot. It 192 00:10:26,760 --> 00:10:29,600 Speaker 3: is said to be looking to IPO as soon as October. 193 00:10:29,640 --> 00:10:32,760 Speaker 3: That's according to sources. Bloomberg's Bailey Lipshaltz, part of the 194 00:10:32,800 --> 00:10:36,400 Speaker 3: team that broke the story. It's one of the three 195 00:10:36,840 --> 00:10:42,200 Speaker 3: that we've been waiting for, SpaceX, Open AI and Anthropic. 196 00:10:42,240 --> 00:10:44,080 Speaker 3: But I found this interesting, like give us some of 197 00:10:44,080 --> 00:10:47,320 Speaker 3: the detail what we're hearing from sources. October is an 198 00:10:47,320 --> 00:10:48,320 Speaker 3: interesting timeline. 199 00:10:49,160 --> 00:10:50,640 Speaker 7: October is an interesting timeline. 200 00:10:50,679 --> 00:10:53,079 Speaker 8: It also would be right before midterm elections, but it 201 00:10:53,160 --> 00:10:56,280 Speaker 8: certainly is one of those IPO windows that we typically 202 00:10:56,280 --> 00:10:59,440 Speaker 8: see getting hit. We're looking at, you know, normally April 203 00:10:59,600 --> 00:11:01,839 Speaker 8: May and then post labor to our top of mind. 204 00:11:02,040 --> 00:11:03,479 Speaker 7: The thing that's top of mind. 205 00:11:03,200 --> 00:11:06,520 Speaker 8: For Anthropic and Opening Eye from our sourcing is that 206 00:11:06,559 --> 00:11:08,079 Speaker 8: it's a bit of a race to try to go 207 00:11:08,160 --> 00:11:11,480 Speaker 8: public first. Both are ambitiously trying to push ahead and 208 00:11:11,520 --> 00:11:14,400 Speaker 8: forge ahead. We've seen and we've reported a number of updates, 209 00:11:14,440 --> 00:11:16,800 Speaker 8: whether it's talking to bankers, talking to lawyers. 210 00:11:17,000 --> 00:11:17,760 Speaker 7: We've heard that the. 211 00:11:17,679 --> 00:11:20,679 Speaker 8: Big three in Goldman, Sachs, JP, Morgan, and Morgan Stanley 212 00:11:20,840 --> 00:11:24,720 Speaker 8: are closely circling both companies with the expectation that one 213 00:11:24,800 --> 00:11:27,520 Speaker 8: or two of them, hopefully according to Sourcing, will be 214 00:11:27,800 --> 00:11:29,440 Speaker 8: potentially going public later this year. 215 00:11:30,160 --> 00:11:32,800 Speaker 3: As a team, we've been super focused on the SpaceX 216 00:11:32,840 --> 00:11:37,839 Speaker 3: IPO frankly, but Mthhropic. You know, the reported numbers are big, 217 00:11:37,960 --> 00:11:39,200 Speaker 3: they're worth paying attention to. 218 00:11:39,280 --> 00:11:40,959 Speaker 2: What do we know about their goals here? 219 00:11:41,920 --> 00:11:45,480 Speaker 8: Yeah, so the information reported that they could raise sixty 220 00:11:45,520 --> 00:11:47,760 Speaker 8: billion dollars. We haven't put out a number on what 221 00:11:47,840 --> 00:11:50,640 Speaker 8: they would want to raising an IPO. The big focus 222 00:11:50,679 --> 00:11:53,760 Speaker 8: has been what scale can they get to and what 223 00:11:53,920 --> 00:11:56,560 Speaker 8: will investors be willing to underwrite. The big topic for 224 00:11:56,600 --> 00:11:58,880 Speaker 8: both Anthropic and open AI is these are companies that 225 00:11:58,960 --> 00:12:01,320 Speaker 8: spend a lot of money, and so when you talk 226 00:12:01,400 --> 00:12:04,160 Speaker 8: to investors, the big question is how can you solve 227 00:12:04,280 --> 00:12:07,440 Speaker 8: for that need to send and what does that ultimately 228 00:12:07,440 --> 00:12:07,760 Speaker 8: look like? 229 00:12:07,760 --> 00:12:09,200 Speaker 7: From evaluation perspective. 230 00:12:09,720 --> 00:12:12,280 Speaker 8: Tens of billions of dollars is probably easy to raise, 231 00:12:12,320 --> 00:12:14,640 Speaker 8: just given some of the rounds we've seen take place 232 00:12:14,640 --> 00:12:18,560 Speaker 8: in private funding. But the big question will be how 233 00:12:18,600 --> 00:12:21,360 Speaker 8: can the buyside come up with that capital? If we 234 00:12:21,400 --> 00:12:24,480 Speaker 8: do see SpaceX potentially raising seventy five billion and then 235 00:12:24,559 --> 00:12:27,479 Speaker 8: just a number of months later another fifty. 236 00:12:28,080 --> 00:12:32,800 Speaker 3: We're waiting on a SpaceX confidential filing perspectus, but this 237 00:12:33,120 --> 00:12:37,160 Speaker 3: reporting that we put out yesterday that suggests they're still 238 00:12:37,200 --> 00:12:39,440 Speaker 3: working on this. What's happening in the month of April, 239 00:12:39,520 --> 00:12:41,440 Speaker 3: for example, Yeah. 240 00:12:41,280 --> 00:12:43,800 Speaker 8: So our reporting was that they've been working to and 241 00:12:43,840 --> 00:12:46,640 Speaker 8: telling investors to get ready for meetings on the other 242 00:12:46,679 --> 00:12:49,840 Speaker 8: side of that Easter holiday. So April sixth, that week 243 00:12:49,880 --> 00:12:52,480 Speaker 8: and the week following is when investors are being told basically, 244 00:12:52,480 --> 00:12:56,000 Speaker 8: clear your schedules and be ready to interact with SpaceX management. 245 00:12:56,280 --> 00:12:59,360 Speaker 8: The big thing is that confidential filing from our sourcing 246 00:12:59,360 --> 00:13:01,440 Speaker 8: and our undersea and it needs to be submitted to 247 00:13:01,480 --> 00:13:06,120 Speaker 8: the SEC. Before those more fullsome conversations around valuations and 248 00:13:06,200 --> 00:13:09,360 Speaker 8: around ultimate IPO sides can start to take place. So 249 00:13:09,559 --> 00:13:12,680 Speaker 8: the big thing is if and when that confidential filing happens. 250 00:13:12,679 --> 00:13:14,800 Speaker 7: We had reported it could take place as soon as March. 251 00:13:14,840 --> 00:13:16,920 Speaker 8: We're just a few days from the end of the month, 252 00:13:17,200 --> 00:13:19,839 Speaker 8: and then that can tee up some of those what 253 00:13:19,880 --> 00:13:23,199 Speaker 8: we call testing the waters, just formal conversations and engagement 254 00:13:23,400 --> 00:13:26,160 Speaker 8: with investors, just maybe providing a bit more detail on 255 00:13:26,200 --> 00:13:28,320 Speaker 8: a bit more context about some of the numbers that 256 00:13:28,360 --> 00:13:29,880 Speaker 8: could have been submitted to the SEC. 257 00:13:30,640 --> 00:13:34,319 Speaker 3: Bloomberg's baby Lipschaltz, Thank you very much. Now coming up, 258 00:13:34,760 --> 00:13:38,400 Speaker 3: President Trump pronounces a new Council of Advisors on Science 259 00:13:38,440 --> 00:13:41,160 Speaker 3: and Technology. We speak with David Sachs, who has tapped 260 00:13:41,240 --> 00:13:42,600 Speaker 3: us up as co chair. 261 00:13:43,080 --> 00:13:45,440 Speaker 2: That's next. This is Bloomberg Tech. 262 00:13:54,640 --> 00:13:58,520 Speaker 3: President Trump has tapped tech industry titans, including Mark Zuckerberg, 263 00:13:58,600 --> 00:14:02,480 Speaker 3: Larry Ellison, and Jens to a new presidential council that 264 00:14:02,520 --> 00:14:05,960 Speaker 3: will focus on AI policy and other science related issues. 265 00:14:06,000 --> 00:14:09,520 Speaker 3: Co sharing that council with David Sachs, whose role as 266 00:14:09,520 --> 00:14:12,120 Speaker 3: White House cryptos are has now ended. You spoke with 267 00:14:12,160 --> 00:14:15,240 Speaker 3: me yesterday about the group's role in getting federal AI 268 00:14:15,360 --> 00:14:16,120 Speaker 3: rules passed. 269 00:14:16,160 --> 00:14:16,679 Speaker 2: Take a listen. 270 00:14:17,840 --> 00:14:20,400 Speaker 9: Last week we released a National AI Framework, and the 271 00:14:20,480 --> 00:14:23,600 Speaker 9: idea is to create one rule book for AI in 272 00:14:23,760 --> 00:14:26,680 Speaker 9: the US. The problem that we're seeing right now is 273 00:14:26,680 --> 00:14:30,120 Speaker 9: that you've got fifty different states regulating this in fifty 274 00:14:30,160 --> 00:14:32,960 Speaker 9: different ways, and it's creating a patchwork of regulation that's 275 00:14:32,960 --> 00:14:35,200 Speaker 9: difficult for our innovators to comply with. So what the 276 00:14:35,200 --> 00:14:38,320 Speaker 9: President has called for is one rule book. What we 277 00:14:38,360 --> 00:14:41,200 Speaker 9: did is and I worked with Michael Kratzios at OSTP 278 00:14:41,600 --> 00:14:43,680 Speaker 9: and other folks of the White House. We looked at 279 00:14:43,720 --> 00:14:45,400 Speaker 9: all the different things that the states we're doing, and 280 00:14:45,440 --> 00:14:47,680 Speaker 9: we try to find some common denominators, and then we 281 00:14:47,720 --> 00:14:50,360 Speaker 9: published that in a set of principles that we're calling 282 00:14:50,400 --> 00:14:53,440 Speaker 9: the National AI Framework, and we're calling on Congress to 283 00:14:53,480 --> 00:14:57,320 Speaker 9: act on that framework. The framework contains things like child safety. 284 00:14:57,360 --> 00:15:00,280 Speaker 9: That's a very salient issue right now. How do you 285 00:15:00,280 --> 00:15:03,640 Speaker 9: protect kids online? So we want to take care of that. 286 00:15:04,320 --> 00:15:06,560 Speaker 9: There's things like the Raye Pair Protection Pledge, which the 287 00:15:06,560 --> 00:15:09,360 Speaker 9: President's already announced. We want to make sure that these 288 00:15:09,360 --> 00:15:12,800 Speaker 9: new AI data centers don't increase the cost of electricity 289 00:15:13,120 --> 00:15:15,320 Speaker 9: for residential consumers. At the same time, we want to 290 00:15:15,360 --> 00:15:17,760 Speaker 9: make it easier for those AI companies to bring their 291 00:15:17,800 --> 00:15:19,840 Speaker 9: own power. So this is I think a much better 292 00:15:19,840 --> 00:15:23,280 Speaker 9: approach than effectively the ban on new data centers that 293 00:15:23,360 --> 00:15:27,520 Speaker 9: you're seeing from Bernie Sanders and others. There's principles and 294 00:15:27,560 --> 00:15:30,920 Speaker 9: provisions related to content creators and how do you protect 295 00:15:32,120 --> 00:15:36,280 Speaker 9: their new content while allowing for AI models to be trained. 296 00:15:36,680 --> 00:15:40,480 Speaker 9: So there's a lot of different areas here that we've covered, 297 00:15:40,760 --> 00:15:42,480 Speaker 9: and I think you're seeing a very good reception to 298 00:15:42,520 --> 00:15:46,120 Speaker 9: this from Capitol Hill. Even the criticism I thought from 299 00:15:46,240 --> 00:15:49,280 Speaker 9: Democrats was pretty muted. There's some Democrats we've already reached 300 00:15:49,280 --> 00:15:51,040 Speaker 9: out to us. They want to work with us to 301 00:15:51,080 --> 00:15:53,280 Speaker 9: see if we can do something in a biparisan way. 302 00:15:53,800 --> 00:15:55,440 Speaker 9: And so I think there's actually a very good chance 303 00:15:55,440 --> 00:15:58,200 Speaker 9: that you'll see Congress now act on the streamwork and 304 00:15:58,200 --> 00:16:02,640 Speaker 9: we'll get some meaningful AI legislation again, the one rule 305 00:16:02,680 --> 00:16:04,760 Speaker 9: book that President Trump's talking about in the next few. 306 00:16:04,560 --> 00:16:06,040 Speaker 2: Months for November. 307 00:16:06,120 --> 00:16:10,320 Speaker 3: David a bipartisan AI framework before November. 308 00:16:10,720 --> 00:16:12,800 Speaker 9: I think it could happen in the next few months. 309 00:16:12,840 --> 00:16:14,640 Speaker 9: I mean, again, we've gotten a very good reception from 310 00:16:14,680 --> 00:16:17,800 Speaker 9: Capitol Hill. This is an area where I think we're 311 00:16:17,920 --> 00:16:20,400 Speaker 9: willing and happy to work with Democrats, and I think 312 00:16:20,400 --> 00:16:22,440 Speaker 9: there's a lot of Democrats who would like to see 313 00:16:22,680 --> 00:16:25,680 Speaker 9: a single national framework as well. I think they understand 314 00:16:25,720 --> 00:16:30,080 Speaker 9: that it's not feasible or practical to have fifty states 315 00:16:30,120 --> 00:16:32,440 Speaker 9: running in fifty different directions. And I think if we 316 00:16:32,480 --> 00:16:34,440 Speaker 9: can work something out, I think we could get to 317 00:16:34,480 --> 00:16:36,640 Speaker 9: the one rule book that the President's talking about. 318 00:16:37,000 --> 00:16:40,520 Speaker 3: David, looking at the composition of the council, you and 319 00:16:40,600 --> 00:16:43,120 Speaker 3: I have spoken in the past that the definition of 320 00:16:43,160 --> 00:16:47,520 Speaker 3: a China Hawk, for example, and the context of exporting technology, 321 00:16:47,520 --> 00:16:51,600 Speaker 3: it needs some discussion. But on the chip side, the 322 00:16:51,600 --> 00:16:54,240 Speaker 3: infrastructure side, those are a group of CEOs that want 323 00:16:54,240 --> 00:16:57,040 Speaker 3: to sell their technology around the world. Do you see 324 00:16:57,080 --> 00:17:02,400 Speaker 3: that changing the President's current thinking on on exporting cutting 325 00:17:02,480 --> 00:17:05,000 Speaker 3: edge or lead edge chips to China or more generally 326 00:17:05,040 --> 00:17:06,840 Speaker 3: in different jurisdictions around the world. 327 00:17:08,080 --> 00:17:11,520 Speaker 9: Well, I think this administration already has a pro export 328 00:17:11,960 --> 00:17:15,720 Speaker 9: mindset because we understand that the way that American technology 329 00:17:15,800 --> 00:17:18,800 Speaker 9: wins and dominates the globe is through market share. You 330 00:17:18,920 --> 00:17:21,560 Speaker 9: want to have the most market share all over the world. 331 00:17:21,640 --> 00:17:24,760 Speaker 9: You want the American textack to become the global standard. 332 00:17:25,080 --> 00:17:27,280 Speaker 9: That's good for us economically, I think is also good 333 00:17:27,640 --> 00:17:30,720 Speaker 9: in terms of national security and spreading our influence. Now, 334 00:17:30,720 --> 00:17:34,760 Speaker 9: whenever you're talking about countries of concern, China, potential adversaries, 335 00:17:34,800 --> 00:17:37,760 Speaker 9: you have to be more careful and needed more nuanced policy, 336 00:17:38,080 --> 00:17:40,320 Speaker 9: and I think the administration has supported that. But I 337 00:17:40,359 --> 00:17:42,919 Speaker 9: think that in general, we want the world to be 338 00:17:42,960 --> 00:17:45,840 Speaker 9: a place where American technology wins, as it did with 339 00:17:45,920 --> 00:17:46,520 Speaker 9: the Internet. 340 00:17:48,960 --> 00:17:51,600 Speaker 3: That was David Sachs, co chair of the President's Counsel 341 00:17:51,640 --> 00:17:55,000 Speaker 3: of Advisors on Science and Technology and partner at Craft 342 00:17:55,080 --> 00:17:58,679 Speaker 3: Benches the Sex calls for clearer rules around artificial intelligence. 343 00:17:58,880 --> 00:18:02,000 Speaker 3: There's also a growing push to modernize how those rules 344 00:18:02,040 --> 00:18:05,560 Speaker 3: are written and implemented within governments. Joe Schidler, it's the 345 00:18:05,600 --> 00:18:08,960 Speaker 3: CEO of Helios and AI platform designed to help track and 346 00:18:09,080 --> 00:18:12,560 Speaker 3: navigate legislation in real time. Joe was a former advisor 347 00:18:12,600 --> 00:18:15,640 Speaker 3: at the White House and US State Department under President 348 00:18:15,680 --> 00:18:18,520 Speaker 3: Biden and joins US now. Just interest in your thoughts 349 00:18:18,520 --> 00:18:21,119 Speaker 3: in the first instance, on what mister Sachs was saying. 350 00:18:21,560 --> 00:18:25,200 Speaker 3: You know, the trajectory and timeline for a federal level 351 00:18:25,280 --> 00:18:26,320 Speaker 3: set of rules on AI. 352 00:18:27,320 --> 00:18:29,720 Speaker 10: Excuse to be with you, Ed, but yeah, I think 353 00:18:30,320 --> 00:18:33,680 Speaker 10: what David had kind of stated yesterday makes a lot 354 00:18:33,680 --> 00:18:37,720 Speaker 10: of sense. A patchwork of regulations across fifty states is 355 00:18:37,760 --> 00:18:42,560 Speaker 10: not a sustainable structure in a global competitive technology race. 356 00:18:43,200 --> 00:18:46,880 Speaker 10: I think as a builder and somebody who has sat 357 00:18:46,920 --> 00:18:50,400 Speaker 10: inside of government, I can confidently say what we need 358 00:18:50,480 --> 00:18:55,360 Speaker 10: right now as a single national framework that advances this 359 00:18:55,440 --> 00:18:58,240 Speaker 10: critical technology and one of the most consequential times we're 360 00:18:58,280 --> 00:18:59,520 Speaker 10: seeing in modern history. 361 00:19:00,440 --> 00:19:03,359 Speaker 3: Joe, what every day Americans may be confused by is 362 00:19:03,920 --> 00:19:07,320 Speaker 3: the distinction between either there not being enough regulation. In 363 00:19:07,359 --> 00:19:10,119 Speaker 3: other words, we do not have a federal level framework, 364 00:19:10,640 --> 00:19:13,240 Speaker 3: but there is a lot of state by state regulation. 365 00:19:13,320 --> 00:19:17,679 Speaker 3: The point that mister Sachs was making, what is the 366 00:19:17,720 --> 00:19:22,480 Speaker 3: real risk over regulation or under regulation in this context? 367 00:19:23,119 --> 00:19:26,600 Speaker 10: Yeah, I think there is a fundamental mismatch between the 368 00:19:26,640 --> 00:19:31,000 Speaker 10: pace of this technology and the rate at which we're 369 00:19:31,000 --> 00:19:36,280 Speaker 10: trying to regulate this across different states, locality, cities. And 370 00:19:37,280 --> 00:19:40,560 Speaker 10: the issue is this is still a very emerging technology 371 00:19:40,560 --> 00:19:44,359 Speaker 10: in many respects. It's a horizontal technology that cross cuts 372 00:19:44,400 --> 00:19:50,040 Speaker 10: across every sector of vertical industry. And you know, there's 373 00:19:50,119 --> 00:19:54,399 Speaker 10: a question that I think is persisting throughout circles in 374 00:19:54,480 --> 00:19:57,280 Speaker 10: DC in the valley of If not America. 375 00:19:57,240 --> 00:19:57,680 Speaker 2: Then who. 376 00:19:58,720 --> 00:20:02,920 Speaker 10: And we are at a moment right now where we're 377 00:20:02,960 --> 00:20:06,840 Speaker 10: seeing massive productivity gains and key suckers of the economy 378 00:20:06,880 --> 00:20:11,000 Speaker 10: to include government itself. And I think it's far too 379 00:20:11,040 --> 00:20:14,840 Speaker 10: early to be taking an over regulatory approach to a 380 00:20:14,880 --> 00:20:16,879 Speaker 10: technology we're still learning a great deal about. 381 00:20:18,359 --> 00:20:20,440 Speaker 3: There's two specific areas I want to talk to you about. 382 00:20:20,520 --> 00:20:23,879 Speaker 3: The first is the use of AI generally in national 383 00:20:23,920 --> 00:20:27,760 Speaker 3: security and defense, and thropic is the biggest case study 384 00:20:27,800 --> 00:20:30,679 Speaker 3: of late right And just having returned from DC, the 385 00:20:30,720 --> 00:20:32,800 Speaker 3: position of many was it is not up to the 386 00:20:32,840 --> 00:20:37,320 Speaker 3: companies how the government, particularly the defense or arms of 387 00:20:37,320 --> 00:20:39,160 Speaker 3: government use the technology. 388 00:20:39,920 --> 00:20:42,160 Speaker 2: Your viewpoint on that, please, yeah. 389 00:20:42,200 --> 00:20:45,200 Speaker 10: I mean, I would say it's the prerogative of any 390 00:20:45,240 --> 00:20:48,760 Speaker 10: American to express their First Amendment rights. And at the 391 00:20:48,800 --> 00:20:52,280 Speaker 10: same time, we have systems to affect change. We live 392 00:20:52,320 --> 00:20:55,679 Speaker 10: in a democratic, electoral society. If folks are unhappy with 393 00:20:56,920 --> 00:21:00,679 Speaker 10: the position of any given administration or a government composition, 394 00:21:01,560 --> 00:21:05,200 Speaker 10: there are plenty of tools at our disposal to affect change. 395 00:21:05,560 --> 00:21:07,960 Speaker 10: What I would say is these technologies aren't anything new 396 00:21:08,040 --> 00:21:11,600 Speaker 10: to the US military or defense circles. In general. We've 397 00:21:11,600 --> 00:21:17,040 Speaker 10: been using machine learning and AI capabilities for decades, and 398 00:21:17,119 --> 00:21:19,399 Speaker 10: for now it's starting to get a lot of attention 399 00:21:19,480 --> 00:21:24,320 Speaker 10: in the media, particularly because of I think, adjacent stories that. 400 00:21:26,200 --> 00:21:27,480 Speaker 2: Have a tendency to. 401 00:21:29,080 --> 00:21:32,800 Speaker 10: Get a dialogue moving for for for instance, the patch 402 00:21:32,800 --> 00:21:36,600 Speaker 10: shork of regulatory frameworks and the hyperscalers being caught in 403 00:21:36,640 --> 00:21:37,160 Speaker 10: that as well. 404 00:21:38,000 --> 00:21:39,879 Speaker 2: But I would say. 405 00:21:41,119 --> 00:21:46,720 Speaker 10: In general, there's a dangerous notion of allowing boardrooms and 406 00:21:47,280 --> 00:21:53,360 Speaker 10: private executives asserting too much influence in systems of government 407 00:21:53,800 --> 00:21:56,320 Speaker 10: that have clear processes for change. 408 00:21:57,160 --> 00:21:59,240 Speaker 3: Joe, we just have thirty seconds, but the pace of 409 00:21:59,240 --> 00:22:03,199 Speaker 3: innovation in AI agents, genuinely autonomous AI agents, how do 410 00:22:03,240 --> 00:22:04,080 Speaker 3: you regulate for that? 411 00:22:05,400 --> 00:22:07,360 Speaker 10: I mean, I think right now we need to be 412 00:22:07,400 --> 00:22:10,399 Speaker 10: thinking through a verticalized mindset. There are a lot of 413 00:22:10,400 --> 00:22:13,800 Speaker 10: platforms are as included that are trying to close the 414 00:22:13,880 --> 00:22:20,680 Speaker 10: delta between generic models, a trained mixed quality data and 415 00:22:21,119 --> 00:22:25,680 Speaker 10: very sensitive enterprise workflows across private industry and government itself. 416 00:22:26,440 --> 00:22:31,720 Speaker 10: And so I would say applying an over regulatory approach 417 00:22:32,560 --> 00:22:36,640 Speaker 10: to agentic workflows could be short sighted. In the grand 418 00:22:36,680 --> 00:22:38,280 Speaker 10: Skey Global Competitive Race. 419 00:22:39,240 --> 00:22:41,680 Speaker 3: Joe Schidler, Helios. Great to have you on the show. 420 00:22:42,200 --> 00:22:44,880 Speaker 3: Thank you very much. Like coming up, Apple opens its 421 00:22:44,920 --> 00:22:48,680 Speaker 3: doors to outside AI assistance like Google's Gemini and throp 422 00:22:48,760 --> 00:22:51,760 Speaker 3: its Claude. We've got the Bloomberg reporting. Next, it is 423 00:22:51,800 --> 00:23:05,520 Speaker 3: halftime and this is Bloomberg Tech. Welcome back to Bloomberg Tech. 424 00:23:05,600 --> 00:23:07,720 Speaker 3: It's Friday, but it's the end of a difficult week 425 00:23:07,760 --> 00:23:11,000 Speaker 3: for technology stocks. And as that one hundred has fallen 426 00:23:11,040 --> 00:23:15,280 Speaker 3: into correction territory on a technical basis, it has fallen 427 00:23:15,400 --> 00:23:19,200 Speaker 3: ten percent from a recent high. Then there's some movement 428 00:23:19,240 --> 00:23:22,200 Speaker 3: as well in cybersecurity stocks. 429 00:23:22,480 --> 00:23:24,120 Speaker 2: This one is a little less straightforward. 430 00:23:24,160 --> 00:23:27,919 Speaker 3: Cybersecurity stocks fell after a report that Anthropic is testing 431 00:23:27,920 --> 00:23:31,400 Speaker 3: an AI model that has very advanced cyber capabilities, and 432 00:23:31,680 --> 00:23:36,119 Speaker 3: it sparks and fears that actually this model could go 433 00:23:36,160 --> 00:23:39,199 Speaker 3: on the offense. It could present a cyber threat to 434 00:23:39,240 --> 00:23:40,960 Speaker 3: some of those names that are down you see on 435 00:23:41,000 --> 00:23:43,160 Speaker 3: your screen that would provide the defense. 436 00:23:43,440 --> 00:23:44,600 Speaker 2: Go out and read about it. 437 00:23:44,600 --> 00:23:47,520 Speaker 3: It's complicated, but I'm sure we'll be speaking about it again. 438 00:23:47,840 --> 00:23:50,720 Speaker 3: Then there's the big news from Bloomberg. Apple plans to 439 00:23:50,800 --> 00:23:56,000 Speaker 3: open Siri to outside AI assistance. Allowing users to choose 440 00:23:56,160 --> 00:23:59,000 Speaker 3: their own chatpot. The Siri overhaul is set to be 441 00:23:59,000 --> 00:24:02,760 Speaker 3: incorporated in the company upcoming iOS twenty seven update. Bloomberg's 442 00:24:02,760 --> 00:24:06,920 Speaker 3: Apple and Consumer tech editor Mark German once again broke 443 00:24:07,000 --> 00:24:10,800 Speaker 3: the story. This is strategy all over the place, right 444 00:24:10,840 --> 00:24:13,399 Speaker 3: as you know. I just upgraded to iPhone seventeen pro, 445 00:24:13,800 --> 00:24:16,440 Speaker 3: got the latest iOS. I've gone back to using Siri. 446 00:24:16,800 --> 00:24:20,639 Speaker 3: I'm reading your reporting and it seems like Apple's latest 447 00:24:20,680 --> 00:24:24,160 Speaker 3: strategy is to say, whichever chat bought the consumer wants, 448 00:24:24,440 --> 00:24:26,000 Speaker 3: we'll find a way to integrate it. 449 00:24:26,040 --> 00:24:27,000 Speaker 2: Give us the details. 450 00:24:27,920 --> 00:24:30,879 Speaker 11: Yeah, they're going a bit agnostic here. The idea is 451 00:24:31,160 --> 00:24:34,040 Speaker 11: they want all the different AI platforms to be easily 452 00:24:34,080 --> 00:24:37,040 Speaker 11: accessible from their devices, and what that would allow them 453 00:24:37,080 --> 00:24:39,520 Speaker 11: to do is tap into a new app store section 454 00:24:39,560 --> 00:24:42,240 Speaker 11: they're building, and then that would allow them to take 455 00:24:42,280 --> 00:24:45,080 Speaker 11: thirty percent or whatever the slices that they agreed to 456 00:24:45,160 --> 00:24:48,600 Speaker 11: with the AI provider to up their subscriptions to the 457 00:24:48,680 --> 00:24:51,000 Speaker 11: higher end tiers on those devices. So they're going to 458 00:24:51,080 --> 00:24:53,880 Speaker 11: make money there. And so this is them doubling down 459 00:24:53,920 --> 00:24:56,560 Speaker 11: on their hardware as a platform, doubling down on their 460 00:24:56,560 --> 00:25:00,720 Speaker 11: services strategy, really slightly bowing out of the a here 461 00:25:00,840 --> 00:25:02,520 Speaker 11: as they continue to see how this is going to 462 00:25:02,600 --> 00:25:05,439 Speaker 11: end up developing, and as a report earlier this week, 463 00:25:05,680 --> 00:25:08,240 Speaker 11: they're also working on some new first party features like 464 00:25:08,320 --> 00:25:11,399 Speaker 11: that Serie app, the ability to access Siri from the 465 00:25:11,480 --> 00:25:14,760 Speaker 11: keyboard more easily, and so they are continuing to push 466 00:25:14,800 --> 00:25:17,920 Speaker 11: forward there, and as we've talked about numerous times, they 467 00:25:17,960 --> 00:25:21,680 Speaker 11: are rebuilding their underlying models using technology from Gemini. 468 00:25:22,800 --> 00:25:25,960 Speaker 3: You broke another story about Apple, but what's happening internally 469 00:25:25,960 --> 00:25:29,760 Speaker 3: with comp super interesting. There seems to be a return 470 00:25:29,920 --> 00:25:34,679 Speaker 3: to a sort of bonus or incentive structure for the 471 00:25:34,720 --> 00:25:37,320 Speaker 3: teams that work on design. What do we need to 472 00:25:37,359 --> 00:25:39,880 Speaker 3: know here and what are the kind of numbers involved? 473 00:25:40,960 --> 00:25:41,560 Speaker 2: Yeah, one of the. 474 00:25:41,520 --> 00:25:44,959 Speaker 11: Biggest issues Apple is grappling with our company sort of 475 00:25:45,040 --> 00:25:49,640 Speaker 11: circling it like sharks, given the AI situation there and 476 00:25:49,840 --> 00:25:53,800 Speaker 11: the AI crisis they've really been facing and different companies 477 00:25:53,880 --> 00:25:57,560 Speaker 11: open AI in particular wanting to poach their best hardware 478 00:25:57,560 --> 00:26:00,879 Speaker 11: engineering talent, and so what Apple dooing is trying to 479 00:26:00,880 --> 00:26:04,880 Speaker 11: respond to that by giving one time bonuses RSUs these 480 00:26:04,960 --> 00:26:07,760 Speaker 11: vests over four years to some of the key talent. 481 00:26:07,840 --> 00:26:11,080 Speaker 11: Particularly this week it was the iPhone product design team 482 00:26:11,280 --> 00:26:14,879 Speaker 11: within the hardware engineering group, incentivizing them to stay and 483 00:26:14,920 --> 00:26:16,200 Speaker 11: not jump ship to open Ai. 484 00:26:17,600 --> 00:26:20,840 Speaker 3: It's difficult to tie those two stories together because, as 485 00:26:20,880 --> 00:26:23,399 Speaker 3: you've just outlined, the bonuses are going to the iPhone 486 00:26:23,400 --> 00:26:29,359 Speaker 3: design team. But the bigger environmental picture is AI talent. 487 00:26:30,440 --> 00:26:34,440 Speaker 11: What about THOSEIAI talent per se. So what open ai 488 00:26:34,640 --> 00:26:38,720 Speaker 11: is doing they are building hardware, they are building devices, 489 00:26:38,760 --> 00:26:41,240 Speaker 11: and as you know, Apple has some of the best 490 00:26:41,240 --> 00:26:44,199 Speaker 11: hardware engineering talent in the world for building devices, and 491 00:26:44,240 --> 00:26:46,480 Speaker 11: so what open ai wants to do is they want 492 00:26:46,480 --> 00:26:48,840 Speaker 11: to marry that fit and finish of Apple. They want 493 00:26:48,840 --> 00:26:52,440 Speaker 11: to marry that harbor engineering capability of Apple with their 494 00:26:52,480 --> 00:26:55,480 Speaker 11: own AI models that they consider industry leading, and so 495 00:26:55,600 --> 00:26:58,800 Speaker 11: bringing them the two together would be extremely powerful. And 496 00:26:58,840 --> 00:27:02,440 Speaker 11: so they are going after Apple talent. They've been poaching 497 00:27:02,560 --> 00:27:05,520 Speaker 11: several dozen people, i would say even a month over 498 00:27:05,520 --> 00:27:08,119 Speaker 11: the last half a year. And don't forget the hardware 499 00:27:08,119 --> 00:27:11,960 Speaker 11: engineering group at OpenAI is run two of the people 500 00:27:12,000 --> 00:27:15,199 Speaker 11: running it used to run hardware at Apple. So it 501 00:27:15,320 --> 00:27:17,480 Speaker 11: is a pretty interesting situation right now. 502 00:27:18,000 --> 00:27:20,160 Speaker 3: There's actually a third story out of Night from Mark 503 00:27:20,160 --> 00:27:23,919 Speaker 3: about Apple discontinuing the MacPro desktop. But you have to 504 00:27:24,080 --> 00:27:27,200 Speaker 3: go and read that one. Bloomberg's Mark German terrific stuff, 505 00:27:27,200 --> 00:27:30,399 Speaker 3: Thank you very much. It's been a rollercoaster week for 506 00:27:30,600 --> 00:27:34,320 Speaker 3: memory and storage stocks. After Google unveiled an AI breakthrough 507 00:27:34,600 --> 00:27:38,040 Speaker 3: that can cut the memory requirement to run an LLM 508 00:27:38,160 --> 00:27:42,280 Speaker 3: by a factor of six. The market reaction came in waves. First, 509 00:27:42,640 --> 00:27:47,040 Speaker 3: everything in memory sold off around the world. Then investors 510 00:27:47,080 --> 00:27:50,280 Speaker 3: started to realize this might not be doomsday for all 511 00:27:50,359 --> 00:27:53,400 Speaker 3: of them. Let's refresh your memories for a moment. If 512 00:27:53,520 --> 00:27:57,320 Speaker 3: storage for AIDATA is like a warehouse, nand and flash 513 00:27:57,400 --> 00:28:00,879 Speaker 3: are the long term holding area, but HI bandwidth memory, 514 00:28:00,920 --> 00:28:01,880 Speaker 3: on the other hand, is. 515 00:28:01,840 --> 00:28:04,040 Speaker 2: The workbench, the loading dock. 516 00:28:04,920 --> 00:28:07,440 Speaker 3: This is how it was summed up by Bloomberg's man 517 00:28:07,480 --> 00:28:11,479 Speaker 3: Deep Sing of Bloomberg Intelligence of how the market is 518 00:28:11,520 --> 00:28:14,000 Speaker 3: digesting this breakthrough in memory. 519 00:28:15,200 --> 00:28:19,920 Speaker 12: Typically, when something like this happens, everyone would implement those 520 00:28:19,920 --> 00:28:23,879 Speaker 12: sort of efficiencies. Remember deep seek everyone pivoted to a 521 00:28:23,920 --> 00:28:26,439 Speaker 12: reasoning model within the next six months. And guess what 522 00:28:26,880 --> 00:28:31,360 Speaker 12: the demand actually took off because you know, everyone implemented 523 00:28:31,400 --> 00:28:35,520 Speaker 12: that and it helped, you know, drive more usage. So 524 00:28:36,160 --> 00:28:39,280 Speaker 12: if anything, I think it should drive more usage and 525 00:28:39,400 --> 00:28:41,920 Speaker 12: the effect of that would be more memory demand. 526 00:28:43,440 --> 00:28:47,800 Speaker 3: So this isn't the AI trade breaking its investors getting 527 00:28:47,880 --> 00:28:51,440 Speaker 3: much more informed, but more selective about where the demand 528 00:28:51,560 --> 00:28:52,280 Speaker 3: actually is. 529 00:28:52,560 --> 00:28:54,480 Speaker 2: Worth going back and reading that on the Bloomberg terminal. 530 00:28:54,600 --> 00:28:56,479 Speaker 3: Coming up, we're going to hear from Coastler Bench's co 531 00:28:56,560 --> 00:29:00,320 Speaker 3: founder Vinodekostler on his take on the AI race between 532 00:29:00,400 --> 00:29:01,120 Speaker 3: US and China. 533 00:29:01,560 --> 00:29:04,160 Speaker 2: That conversation. Next, this is Bloomberg Tech. 534 00:29:53,160 --> 00:29:55,880 Speaker 3: President Trump is set to travel to China in May 535 00:29:56,080 --> 00:29:59,160 Speaker 3: to meet with the country's leader, Shi Jingping. The AI race, 536 00:29:59,240 --> 00:30:02,560 Speaker 3: conflict in the Middle East, and trade tension are likely 537 00:30:02,600 --> 00:30:05,360 Speaker 3: to be top of the agenda, especially as China launched 538 00:30:05,360 --> 00:30:10,440 Speaker 3: a pair of investigation into US trade practices retaliating against 539 00:30:10,520 --> 00:30:14,120 Speaker 3: Trump's tariffs. Let's get the broader picture with Michelle Guider, 540 00:30:14,200 --> 00:30:17,000 Speaker 3: CEO of the Crack Institute for Tech Diplomacy Perdue. She 541 00:30:17,080 --> 00:30:19,920 Speaker 3: also served as Assistant Secretary of State for Global Public 542 00:30:19,960 --> 00:30:23,760 Speaker 3: Affairs under the first Trump administration. Off camera, we were talking, 543 00:30:23,800 --> 00:30:25,520 Speaker 3: you know, I've tried to make sense this week of 544 00:30:25,560 --> 00:30:29,720 Speaker 3: where the United States currently stands as it relates to 545 00:30:29,800 --> 00:30:32,760 Speaker 3: China in the context of technology. Earlier in the program, 546 00:30:33,000 --> 00:30:36,479 Speaker 3: we spoke with David Sachs about just that your sense 547 00:30:36,560 --> 00:30:40,760 Speaker 3: of the balance right now in closer economic cooperation with 548 00:30:40,880 --> 00:30:44,200 Speaker 3: China while considering them in the technology context to continue 549 00:30:44,200 --> 00:30:46,040 Speaker 3: to be an economic adversary. 550 00:30:46,320 --> 00:30:48,200 Speaker 13: Yeah, there's a lot going on when it comes to 551 00:30:49,160 --> 00:30:53,520 Speaker 13: conversations in DC and in Silicon Valley about the United 552 00:30:53,560 --> 00:30:55,480 Speaker 13: States leading and technology and your right. All of that 553 00:30:55,560 --> 00:30:59,000 Speaker 13: is within the context of making sure that we're winning 554 00:30:59,280 --> 00:31:02,240 Speaker 13: this so called textechnology race with regard. 555 00:31:01,880 --> 00:31:03,360 Speaker 2: To China, and I think that's really important. 556 00:31:03,360 --> 00:31:05,320 Speaker 13: And I think it's important also that we have a 557 00:31:05,320 --> 00:31:08,760 Speaker 13: common picture and an understanding of what winning means. You 558 00:31:08,880 --> 00:31:11,960 Speaker 13: referenced your interview with David Sachs yesterday, and I think 559 00:31:12,000 --> 00:31:15,000 Speaker 13: you put it really well. It's market share for American 560 00:31:15,080 --> 00:31:19,000 Speaker 13: technology or Allied technology, ultimately trusted technology. And I think 561 00:31:19,120 --> 00:31:22,800 Speaker 13: that's really important. However, the big challenge there that I 562 00:31:22,880 --> 00:31:25,920 Speaker 13: think isn't talked about enough is that if you look 563 00:31:25,960 --> 00:31:30,280 Speaker 13: at market share of artificial intelligence, there's a concerning trend 564 00:31:30,360 --> 00:31:34,360 Speaker 13: growing with Chinese models, and specifically their open weight and 565 00:31:34,360 --> 00:31:37,920 Speaker 13: their open source models, which are cheap. They're good enough, 566 00:31:38,480 --> 00:31:41,120 Speaker 13: and if you look at the trend just about a 567 00:31:41,160 --> 00:31:44,560 Speaker 13: year ago, fifteen months ago, Chinese open source models were 568 00:31:44,640 --> 00:31:49,680 Speaker 13: essentially a negligible part of world AI usage. Fast forward 569 00:31:49,720 --> 00:31:53,640 Speaker 13: to fifteen months later, end of twenty twenty five, All 570 00:31:53,640 --> 00:31:56,840 Speaker 13: of a sudden, they're going from one percent to almost 571 00:31:56,880 --> 00:31:59,480 Speaker 13: thirty percent of global token. 572 00:31:59,280 --> 00:32:01,160 Speaker 7: Usage world A usage, all of a sudden. 573 00:32:01,240 --> 00:32:05,040 Speaker 13: And so they're cheaper, they're good enough, and the Chinese 574 00:32:05,240 --> 00:32:08,760 Speaker 13: are very focused, not necessarily on having the best models, 575 00:32:08,800 --> 00:32:11,920 Speaker 13: but on having the most used. And so I think 576 00:32:12,160 --> 00:32:15,680 Speaker 13: the United States, when we're talking about Silicon Valley in Washington, 577 00:32:15,720 --> 00:32:18,200 Speaker 13: d C. Connecting, need to make sure that not only 578 00:32:18,200 --> 00:32:20,280 Speaker 13: do we have an innovation strategy, we've also got a 579 00:32:20,280 --> 00:32:22,080 Speaker 13: really big distribution strategy. 580 00:32:22,960 --> 00:32:25,320 Speaker 3: We're going to hear later in the program from someone 581 00:32:25,440 --> 00:32:29,240 Speaker 3: who is a China Hawk, but maybe a different definition 582 00:32:29,320 --> 00:32:32,120 Speaker 3: of a China Hawk. That's Vinod Kosler. The reason I 583 00:32:32,160 --> 00:32:35,120 Speaker 3: wanted to talk to David Sachs about the Presidential Council 584 00:32:35,120 --> 00:32:37,959 Speaker 3: Advisors for Science and Tech is look at who's on it. 585 00:32:38,360 --> 00:32:41,320 Speaker 3: Those are companies that either at one time had a 586 00:32:41,320 --> 00:32:44,720 Speaker 3: big market share in China or would love to export 587 00:32:44,760 --> 00:32:48,560 Speaker 3: their technology to China with something like pea cast. Is 588 00:32:48,560 --> 00:32:53,080 Speaker 3: it realistic that a sitting president's thinking or the policy 589 00:32:53,120 --> 00:32:55,720 Speaker 3: of the administration of the day actually gets influenced by 590 00:32:55,720 --> 00:32:58,600 Speaker 3: those that they're a part of it. 591 00:33:00,120 --> 00:33:03,160 Speaker 13: Yeah, I think the bridge and the conversation between those 592 00:33:03,200 --> 00:33:06,000 Speaker 13: tech leaders and Silicon Valley leaders in general and Washington, 593 00:33:06,080 --> 00:33:10,040 Speaker 13: d C has increasingly been fortified, and those conversations were 594 00:33:10,040 --> 00:33:12,240 Speaker 13: happening anyway. I think p CAST in that group of 595 00:33:12,280 --> 00:33:16,120 Speaker 13: advisors is now going to accelerate that. But it's not new, 596 00:33:16,200 --> 00:33:19,560 Speaker 13: and that conversation and the back and forth on policy 597 00:33:19,600 --> 00:33:22,720 Speaker 13: has already been taking place, and I think that's really important, 598 00:33:22,840 --> 00:33:25,280 Speaker 13: and that bridge is really important. At the same time, 599 00:33:25,360 --> 00:33:27,600 Speaker 13: let's not forget that we also have to keep in 600 00:33:27,600 --> 00:33:31,080 Speaker 13: mind every American in between Silicon Valley and Washington, DC, 601 00:33:31,440 --> 00:33:33,920 Speaker 13: when it comes to technology, they're focused on jobs. They're 602 00:33:33,920 --> 00:33:37,920 Speaker 13: focused on the energy requirements and data centers being built 603 00:33:37,920 --> 00:33:40,880 Speaker 13: in their backyard. So that's also really important, as are 604 00:33:40,920 --> 00:33:44,680 Speaker 13: our allies because AI ultimately is borderless and the only 605 00:33:44,680 --> 00:33:46,320 Speaker 13: way that the United States is going to lead is 606 00:33:46,320 --> 00:33:48,360 Speaker 13: by working hand in hand with our allies as well. 607 00:33:49,040 --> 00:33:50,160 Speaker 2: Let's go back to Iran. 608 00:33:50,400 --> 00:33:52,920 Speaker 3: You know, we said that when the President travels to China, 609 00:33:53,000 --> 00:33:56,160 Speaker 3: depending on where we are in that process, they will 610 00:33:56,240 --> 00:33:57,320 Speaker 3: likely discuss the. 611 00:33:57,280 --> 00:34:00,520 Speaker 2: War in Iran. Why does it matter? Quickly? The US 612 00:34:00,600 --> 00:34:01,760 Speaker 2: get China's view on this. 613 00:34:03,560 --> 00:34:06,920 Speaker 13: Well, I think, look, they're one of the leading economies. 614 00:34:07,200 --> 00:34:09,080 Speaker 13: They have a lot to do with our own economy, 615 00:34:09,360 --> 00:34:11,640 Speaker 13: oil prices and things like that, and so you know, 616 00:34:11,719 --> 00:34:13,879 Speaker 13: making sure that we're on the same page is good 617 00:34:13,920 --> 00:34:16,359 Speaker 13: for American strategy. And i'd say, you know, we're seeing 618 00:34:16,360 --> 00:34:19,640 Speaker 13: a big role that technology is playing in Iran as well, 619 00:34:19,640 --> 00:34:22,919 Speaker 13: and so all of that is part of American technological 620 00:34:23,000 --> 00:34:26,560 Speaker 13: leadership and dominance and ultimately bringing this war to a 621 00:34:26,640 --> 00:34:28,680 Speaker 13: victorious end as soon as possible. 622 00:34:30,120 --> 00:34:32,640 Speaker 3: Michelle Guide to CEO the Crack Institute for Tech Diplomacy 623 00:34:32,640 --> 00:34:34,160 Speaker 3: It Pard, It's great to have you back on the show, 624 00:34:34,480 --> 00:34:37,040 Speaker 3: Thank you very much. Sticking with China, we discussed the 625 00:34:37,040 --> 00:34:40,800 Speaker 3: AI race between the two world powers with KOs laventus 626 00:34:40,840 --> 00:34:43,000 Speaker 3: Co founda Viino Kosa this week. That was on the 627 00:34:43,040 --> 00:34:45,560 Speaker 3: sidelines of the Hill and Valley Forum, and here's what 628 00:34:45,600 --> 00:34:49,200 Speaker 3: he had to say about Nvidia CEO Jensmong celebrating the 629 00:34:49,239 --> 00:34:52,920 Speaker 3: company's approval to sell AI accelerators to China. 630 00:34:54,360 --> 00:34:58,320 Speaker 14: He is celebrating that it's in his short term economic interest. 631 00:34:58,960 --> 00:35:02,120 Speaker 14: I don't leave it's in the interests of the country 632 00:35:02,160 --> 00:35:06,120 Speaker 14: as a whole to do that. Of course, he's cut 633 00:35:06,200 --> 00:35:08,759 Speaker 14: whatever DLS he can. He's a great guy. He's a 634 00:35:08,880 --> 00:35:13,120 Speaker 14: very visionary guy. But he's good for his business and 635 00:35:13,160 --> 00:35:17,279 Speaker 14: that's his responsibility as CEL. That doesn't mean everything he 636 00:35:17,360 --> 00:35:18,960 Speaker 14: does is good for America. 637 00:35:19,400 --> 00:35:21,160 Speaker 6: It's good for his global business. 638 00:35:21,480 --> 00:35:24,200 Speaker 3: Do you think there's a chance that we changed policy, 639 00:35:24,400 --> 00:35:26,040 Speaker 3: changed tap decide to cut off. 640 00:35:26,680 --> 00:35:29,160 Speaker 6: I think we absolutely should. 641 00:35:29,760 --> 00:35:32,880 Speaker 14: And I'm in the cape of being as hawkish as possible, 642 00:35:33,800 --> 00:35:34,600 Speaker 14: and and it. 643 00:35:34,640 --> 00:35:36,440 Speaker 6: Historic policy for America. 644 00:35:36,520 --> 00:35:41,160 Speaker 14: And I thought this admission administration was on that bandwagon, 645 00:35:41,239 --> 00:35:45,000 Speaker 14: but they seem to have changed course. Uh, don't know 646 00:35:45,040 --> 00:35:49,319 Speaker 14: what the influences were there. They're probably some that I 647 00:35:49,360 --> 00:35:50,239 Speaker 14: don't understand. 648 00:35:51,200 --> 00:35:54,200 Speaker 3: The middle grounds that middle grounds on the right term. 649 00:35:54,520 --> 00:36:00,640 Speaker 3: The other consideration are countries in the middle, principally the 650 00:36:00,680 --> 00:36:04,560 Speaker 3: golf that you export the technology to the golf. If 651 00:36:04,600 --> 00:36:09,520 Speaker 3: you don't, same vacuum China comes in. But equally there 652 00:36:09,520 --> 00:36:13,160 Speaker 3: are still so called diffusion considerations around what would China 653 00:36:13,200 --> 00:36:17,759 Speaker 3: have access to that technology through golf stations? But where 654 00:36:17,760 --> 00:36:19,919 Speaker 3: do you stand on that the node that little ground. 655 00:36:19,960 --> 00:36:24,080 Speaker 14: Now, Look, there's no clear answers to all of these questions. 656 00:36:27,120 --> 00:36:30,600 Speaker 14: That's a place, really if you don't fill the vacuum Bibilla, 657 00:36:31,280 --> 00:36:34,239 Speaker 14: China will and I think it's important to have. 658 00:36:35,800 --> 00:36:39,040 Speaker 6: Global use of hard technologies. So it's a balancing act. 659 00:36:39,400 --> 00:36:41,560 Speaker 3: I would like to talk a little bit about open Ai, 660 00:36:41,719 --> 00:36:44,400 Speaker 3: but in a slightly different context. You wrote the first 661 00:36:44,560 --> 00:36:48,960 Speaker 3: real institutional check into open Ai. If you will, you're 662 00:36:49,000 --> 00:36:51,040 Speaker 3: not an investor in anthropic. 663 00:36:50,600 --> 00:36:53,160 Speaker 6: That's right. If you're not, can investor think put. 664 00:36:53,160 --> 00:36:56,480 Speaker 3: The conversation here at Hill and Valley in part has 665 00:36:56,520 --> 00:37:01,120 Speaker 3: been of course anthropics relationship with the pentag and what 666 00:37:01,200 --> 00:37:04,560 Speaker 3: I had heard from a number of anthropic investors is 667 00:37:04,600 --> 00:37:08,839 Speaker 3: that they actually cheered Dario m Oday, taking not a 668 00:37:08,880 --> 00:37:11,960 Speaker 3: moral high ground per se, but basically saying having that 669 00:37:12,080 --> 00:37:16,799 Speaker 3: niche of having red lines is good commercially. Now, the 670 00:37:16,880 --> 00:37:19,160 Speaker 3: consequence of that action is that open Ai came in 671 00:37:19,200 --> 00:37:22,080 Speaker 3: and had an opportunity to do business with the Pentagon, 672 00:37:22,440 --> 00:37:25,680 Speaker 3: and I'd be grateful, you know, drawing on your experience 673 00:37:25,680 --> 00:37:28,880 Speaker 3: in the Valley and as an investor on how you 674 00:37:28,920 --> 00:37:32,239 Speaker 3: feel Anthropic handled that and then what open Ai did 675 00:37:32,280 --> 00:37:33,000 Speaker 3: coming into it. 676 00:37:33,680 --> 00:37:37,840 Speaker 14: So I had a tweet on Dario's comments and was 677 00:37:38,000 --> 00:37:43,120 Speaker 14: very simple. I said, I admire him for sticking to principles, 678 00:37:43,280 --> 00:37:47,600 Speaker 14: his principles, and I admire anybody who sticks to principles, 679 00:37:48,920 --> 00:37:52,760 Speaker 14: but I think he had the wrong principles. He should 680 00:37:52,800 --> 00:37:57,480 Speaker 14: not be the one deciding what technology the Department. 681 00:37:56,960 --> 00:38:02,680 Speaker 6: Of War should use in the battlefield or anywhere else. 682 00:38:04,239 --> 00:38:08,520 Speaker 14: I think he can mandate things like no illegal uses 683 00:38:08,719 --> 00:38:10,440 Speaker 14: like mass surveillance and others. 684 00:38:11,080 --> 00:38:12,919 Speaker 6: That's a reasonable position to take. 685 00:38:13,760 --> 00:38:19,440 Speaker 14: But to understand what the Department of War can or 686 00:38:19,480 --> 00:38:24,080 Speaker 14: cannot do with the technology should require all the knowledge 687 00:38:24,160 --> 00:38:27,600 Speaker 14: that the Department of War has and their knowledge of 688 00:38:27,640 --> 00:38:31,280 Speaker 14: what President she would do in Taiwan or what President 689 00:38:31,320 --> 00:38:34,880 Speaker 14: Puttin would do. I don't think Dario is in a 690 00:38:34,920 --> 00:38:38,600 Speaker 14: position to do that or judge that, and I think 691 00:38:38,680 --> 00:38:42,080 Speaker 14: so the principle of sticking to principles is great. He 692 00:38:42,320 --> 00:38:43,239 Speaker 14: just happened to have. 693 00:38:43,160 --> 00:38:44,560 Speaker 6: The wrong principles. 694 00:38:44,880 --> 00:38:48,480 Speaker 14: And it's reasonable for him to explain what the technology 695 00:38:48,520 --> 00:38:52,160 Speaker 14: is capable of and not capable of the capabilities which 696 00:38:52,280 --> 00:38:55,520 Speaker 14: is qualified to do qualified to. 697 00:38:55,160 --> 00:38:59,520 Speaker 6: Then judge how that technology is used. That just being arrogant. 698 00:39:01,760 --> 00:39:05,080 Speaker 3: He was coastera Benures co founder Vinode Coostler, and Thropic 699 00:39:05,120 --> 00:39:07,520 Speaker 3: has won a key court order pausing a ban on 700 00:39:07,560 --> 00:39:10,200 Speaker 3: government use of the company's AI tools. It follows the 701 00:39:10,239 --> 00:39:13,120 Speaker 3: dispute between Anthropic and the Pentagon over the use of 702 00:39:13,160 --> 00:39:17,160 Speaker 3: its AI Bloombergs Katrina Mansen covers defense technology and has 703 00:39:17,200 --> 00:39:19,239 Speaker 3: the details. This was a moment in time this week. 704 00:39:19,239 --> 00:39:20,480 Speaker 3: But what do we need to know about it? 705 00:39:22,200 --> 00:39:23,000 Speaker 2: Well, the judge is. 706 00:39:22,920 --> 00:39:27,400 Speaker 15: Saying this looks like illegal retaliation and putting a seven 707 00:39:27,480 --> 00:39:32,080 Speaker 15: day at an injunction, saying that the Pentagon cannot declare 708 00:39:32,160 --> 00:39:35,680 Speaker 15: Anthrotropic in fact a supply chain risk. Now the judge 709 00:39:35,719 --> 00:39:39,040 Speaker 15: put a stay on that injunction, so for seven days. 710 00:39:39,080 --> 00:39:42,000 Speaker 15: The Pentagon now has a chance to appeal. So we're 711 00:39:42,040 --> 00:39:45,439 Speaker 15: really still in this incremental stage of trying to work 712 00:39:45,480 --> 00:39:50,520 Speaker 15: out these very fraught lines between whether the Pentagon can 713 00:39:50,600 --> 00:39:55,279 Speaker 15: claim that Anthropic is essentially usurping chain of command, the 714 00:39:55,400 --> 00:39:59,759 Speaker 15: president's ability to command his own troops, and whether Anthropic 715 00:39:59,920 --> 00:40:05,760 Speaker 15: is is instigating unfair redlines or whether it's absolutely extraordinary, 716 00:40:05,800 --> 00:40:09,000 Speaker 15: which we know it is. It's unprecedented to declare Anthropic 717 00:40:09,080 --> 00:40:12,480 Speaker 15: a supply train risk, treating it as an adversary, a 718 00:40:12,640 --> 00:40:15,480 Speaker 15: US adversary, and a judge at the moment saying no, that. 719 00:40:15,480 --> 00:40:16,240 Speaker 7: Is not okay. 720 00:40:17,440 --> 00:40:19,879 Speaker 3: A lot of people weighed in on this Palenteer has 721 00:40:19,960 --> 00:40:23,840 Speaker 3: been one of the winners of the government's attitude towards 722 00:40:24,200 --> 00:40:26,880 Speaker 3: working with the private sector and opined on it. It's 723 00:40:26,920 --> 00:40:29,280 Speaker 3: been a big week for you as well. A new book, 724 00:40:29,480 --> 00:40:32,840 Speaker 3: Project Maven out in the world. You know, thread that 725 00:40:32,960 --> 00:40:36,880 Speaker 3: together where Palenteer and the story that you're telling fits 726 00:40:36,920 --> 00:40:38,440 Speaker 3: in today. 727 00:40:39,920 --> 00:40:42,160 Speaker 15: Well, it was fascinating the book came out on the 728 00:40:42,200 --> 00:40:46,399 Speaker 15: same day that you, me everybody else was at Hill 729 00:40:46,480 --> 00:40:49,880 Speaker 15: and Valley, and for the founders of Hill and Valley, 730 00:40:50,239 --> 00:40:53,160 Speaker 15: so much of what has been animating them to end 731 00:40:53,239 --> 00:40:57,080 Speaker 15: what they called, to me, this cold war between East 732 00:40:57,120 --> 00:41:01,120 Speaker 15: and West Coast, between Silicon Valley and Washington goes back 733 00:41:01,280 --> 00:41:07,520 Speaker 15: to Project Maven, the moment that Google workers protested discovering 734 00:41:07,560 --> 00:41:10,840 Speaker 15: they were involved in what they called the business of war, 735 00:41:11,440 --> 00:41:15,719 Speaker 15: their cutting edge AI tech being used to identify with 736 00:41:15,800 --> 00:41:21,480 Speaker 15: drone footage identify potential targets in US battle zones. Now 737 00:41:21,600 --> 00:41:25,480 Speaker 15: today we see it playing out slightly differently, but nonetheless 738 00:41:26,000 --> 00:41:29,080 Speaker 15: we are in this key moment where Anthropica the Pentagon 739 00:41:29,400 --> 00:41:32,640 Speaker 15: are now at war again and AI is at the 740 00:41:32,680 --> 00:41:38,440 Speaker 15: heart of another fracture between Silicon Valley and what the 741 00:41:38,480 --> 00:41:40,640 Speaker 15: Pentagon wants to do with AI. 742 00:41:41,080 --> 00:41:44,480 Speaker 3: Bloomberg's Katrina Manson, author of that new book Project Mavin, 743 00:41:44,800 --> 00:41:48,520 Speaker 3: hits the shelves this week, Thank you very much. Now 744 00:41:48,560 --> 00:41:53,600 Speaker 3: coming up, Amazon is coming in after Walmart in rural America. 745 00:41:54,040 --> 00:42:05,400 Speaker 3: We'll discuss why conversations. Next, this is Bloomberg Tech. Amazons 746 00:42:05,400 --> 00:42:10,280 Speaker 3: spent decades perfecting urban and suburban delivery. Now Amazon's expanding 747 00:42:10,360 --> 00:42:14,439 Speaker 3: rapidly in rural America, dooking it out with Walmart over 748 00:42:14,440 --> 00:42:18,680 Speaker 3: the one trillion dollar rural US market. Bloomberg crunched exclusive 749 00:42:18,719 --> 00:42:22,280 Speaker 3: data for this big take. Bloomberg Spenser Sofa covers Amazon 750 00:42:22,480 --> 00:42:25,680 Speaker 3: is behind it all. Interesting battleground. I mean, what's the 751 00:42:25,680 --> 00:42:26,919 Speaker 3: Amazon strategy here? 752 00:42:28,600 --> 00:42:31,719 Speaker 16: Well, Amazon's always tried to sell to rural America, and 753 00:42:31,760 --> 00:42:34,600 Speaker 16: the proposition has always been, look, we'll connect you with 754 00:42:34,640 --> 00:42:37,200 Speaker 16: the broad assortment of goods that it's going to be 755 00:42:37,239 --> 00:42:39,360 Speaker 16: tough for you to find nearby, but you're gonna have 756 00:42:39,400 --> 00:42:40,000 Speaker 16: to wait for them. 757 00:42:40,040 --> 00:42:40,279 Speaker 7: You know. 758 00:42:40,920 --> 00:42:43,480 Speaker 16: Amazon is known for like one two day delivery in 759 00:42:43,520 --> 00:42:45,399 Speaker 16: most of the country, but in rural areas it could 760 00:42:45,440 --> 00:42:48,760 Speaker 16: be four days, six days. It's always been a bit longer, 761 00:42:49,480 --> 00:42:51,760 Speaker 16: and so the challenge there is how do we speed 762 00:42:51,800 --> 00:42:55,000 Speaker 16: that up given a high cost right, it's so expensive 763 00:42:55,040 --> 00:42:58,239 Speaker 16: to deliver to disperse population, so they're trying to crack that, 764 00:42:58,360 --> 00:43:01,160 Speaker 16: and they're bringing in small bus and owners to deliver 765 00:43:01,680 --> 00:43:05,439 Speaker 16: around their businesses for like two dollars and fifty cents 766 00:43:05,440 --> 00:43:07,560 Speaker 16: a pop. So that's really how they're trying to crack 767 00:43:07,600 --> 00:43:10,160 Speaker 16: this code is by bringing in a new kind of 768 00:43:10,280 --> 00:43:14,120 Speaker 16: partner other than the postal service or ups that's willing 769 00:43:14,160 --> 00:43:16,279 Speaker 16: to do these deliveries kind of at like a side 770 00:43:16,320 --> 00:43:17,800 Speaker 16: hustle spender. 771 00:43:17,840 --> 00:43:20,279 Speaker 3: Real quick is the state of play that Walmart still 772 00:43:20,320 --> 00:43:24,080 Speaker 3: dominates in rural areas, and I guess Amazon. 773 00:43:26,080 --> 00:43:27,280 Speaker 7: It's bigger than Amazon. 774 00:43:27,840 --> 00:43:31,000 Speaker 16: It's bigger than Amazon and rural areas, but rural America's 775 00:43:31,160 --> 00:43:34,160 Speaker 16: spending is also very fragmented. About eighty percent of it 776 00:43:34,200 --> 00:43:38,040 Speaker 16: is going to like a huge mix of You've got 777 00:43:38,080 --> 00:43:41,480 Speaker 16: like Dollar General, tractor supply, and any number of regional 778 00:43:41,880 --> 00:43:46,120 Speaker 16: chains and things, so it's wide open. Walmart's definitely bigger 779 00:43:46,160 --> 00:43:49,040 Speaker 16: than Amazon and rural America, and Amazon is its new 780 00:43:49,080 --> 00:43:50,960 Speaker 16: delivery centers are like right on top of it in 781 00:43:51,000 --> 00:43:54,080 Speaker 16: a lot of cases, so there's a fight between those two. 782 00:43:54,080 --> 00:43:56,560 Speaker 16: But there's also a lot of peripheral players that stand 783 00:43:56,600 --> 00:43:58,480 Speaker 16: to lose some share bling bag. 784 00:43:58,520 --> 00:44:01,359 Speaker 3: Spenser Ciper with a big take, Thank you very much. 785 00:44:01,719 --> 00:44:04,080 Speaker 3: One last piece of news, especially if you're planning to 786 00:44:04,080 --> 00:44:07,479 Speaker 3: spend your weekend playing video games. Sony plans to raise 787 00:44:07,520 --> 00:44:10,760 Speaker 3: the price for the PlayStation five console by one hundred dollars, 788 00:44:10,840 --> 00:44:14,000 Speaker 3: citing pressure on the global economy. The hikes take effect 789 00:44:14,080 --> 00:44:16,960 Speaker 3: on April second, with the cost of consumers going up 790 00:44:17,200 --> 00:44:21,640 Speaker 3: around the world. Remember PlayStation hugely popular console in countries 791 00:44:21,840 --> 00:44:25,000 Speaker 3: all over the planet. That does it for this edition 792 00:44:25,160 --> 00:44:28,080 Speaker 3: of Bloomberg Tech, Happy Friday, wishing you a good weekend. 793 00:44:28,400 --> 00:44:30,080 Speaker 2: But there was a lot in the show to recap. 794 00:44:30,160 --> 00:44:31,799 Speaker 3: You can do that on the podcast and you know 795 00:44:31,840 --> 00:44:35,839 Speaker 3: where to find it. From San Francisco, this is Bloomberg Tech.