Speaker 1: This is Bloomberg business Week inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week.
Speaker 2: Carol Masser is off this week. We're coming off of
Speaker 2: hotter than hoped CPI and PPI readings, while August retail
Speaker 2: sales also surprise to the upside. And on Capitol Hill,
Speaker 2: a slew of tech titans, including Elon Musk and Mark Zuckerberg,
Speaker 2: met with lawmakers to discuss the potential risks of artificial
Speaker 2: intelligence technology. Tech will be a big theme on this program,
Speaker 2: as we'll be talking everything from cybersecurity, space exploration, AI
Speaker 2: in the retail space, and crypto. We begin with the
Speaker 2: Ladder in this week's Bloomberg Business Week cover story about
Speaker 2: the mom and dad behind the man accused of one
Speaker 2: of the biggest crypto related frauds ever. Bloomberg Business Week
Speaker 2: Call Max Chafkin and Bloomberg News Digital Currencies reporter Hannah
Speaker 2: Miller joined me and Simone Foxman to explain how Sam
Speaker 2: Bankman Freed's elite parents helped make the rise of FTX possible.
Speaker 2: Also with US is Bloomberg BusinessWeek editor Joe Weber.
Speaker 3: We're a couple of weeks away from SBF's trial beginning
Speaker 3: October second. I think that Joe Bankman and Barbara Freed
Speaker 3: will have some revelations about them will come out at
Speaker 3: that trial. I think that they are have been an
Speaker 3: underappreciated element of the SBF story.
Speaker 1: Max.
Speaker 3: Why is that?
Speaker 4: Well?
Speaker 5: I think, I mean, one thing is that you know,
Speaker 5: this is a massive alleged fraud. You know, if prosecutes
Speaker 5: are right, it's one of the biggest frauds in US history.
Speaker 5: And I think you know, in some sense properly we're
Speaker 5: focusing on Sam Bankman Freed in his inner circle. The
Speaker 5: thing about the parents that is so interesting is tim
Speaker 5: as you said, they are these really towering figures in academia.
Speaker 5: They're sort of famous for being like ethical and they
Speaker 5: both teach at Stanford Law School. There there it's almost
Speaker 5: like the least likely parents of an alleged crook, and
Speaker 5: that's kind of what makes them so interesting. The second
Speaker 5: thing that makes them really interesting, and the reason I
Speaker 5: think you played that clip is because they were more
Speaker 5: involved in this company than they have said that than
Speaker 5: Sam MCMANFRIEDE said, And you actually heard Joe Bankman's voice
Speaker 5: in that ad?
Speaker 2: Yeah, hold on, I thought that was Larry David.
Speaker 3: There was Larry David. But Hannah to walk us through
Speaker 3: what else.
Speaker 6: Happened in there?
Speaker 7: All right, I could not believe that Joe Bankman had
Speaker 7: been in that commercial. Right under our noses, we know
Speaker 7: that Sam bankman Fried's brother Gabriel requested a role for
Speaker 7: Joe in the commercial. I think it was kind of
Speaker 7: fitting that he played a founding father when he is
Speaker 7: the father of an FTX co founder. And yeah, he
Speaker 7: had that single line, but it was an effective one.
Speaker 7: So it just shows you that this was a family affair.
Speaker 8: Well, take me through Max the details here. How exactly
Speaker 8: were they tied to this business in a true business way,
Speaker 8: because part of the story really focuses on how they
Speaker 8: were sort of these intangible help to SBF and then
Speaker 8: there are some actual clear ties.
Speaker 5: Yeah, and I think those first of all, I think
Speaker 5: the intangibles matter here. And when you go back and
Speaker 5: kind of look at one of the big you know,
Speaker 5: enduring mysteries I think of this case is like, why
Speaker 5: did people go for this? You know, there were so
Speaker 5: many red flags. This is a guy who refused to
Speaker 5: wear pants, you know, was he was local. He's running
Speaker 5: this massive financial services company, you know, in a place
Speaker 5: that is kind of considered a tax haven. A lot
Speaker 5: of his business was not allowed. And you know, one
Speaker 5: of the things that people would point to, including investors,
Speaker 5: including you know, in one case, for as we report
Speaker 5: in the story, a former Securities and Exchange commissioner would
Speaker 5: point to the parents. These were people with a big reputation. Now,
Speaker 5: the other thing that happened is that FTX and Alameda,
Speaker 5: which was like the precursor to FTX, It was Sam
Speaker 5: Becinfried's hedge fund. They were both those companies were really
Speaker 5: operating kind of on the edges of what was legal.
Speaker 5: Right that crypto was is a novel field. They're walking,
Speaker 5: working across different countries, and Sam Megmnfreed needed lawyers, and
Speaker 5: his dad, you know, is a pretty good lawyer, or
Speaker 5: at least you know, was seen that way at the time.
Speaker 5: And his dad, you know, from the very beginning, as
Speaker 5: we report in this story, was involved. And and what
Speaker 5: has been previously said is that Oh, well, he was
Speaker 5: you know, maybe helped a little bit and he mostly
Speaker 5: worked on philanthropy. But no, as we talk about, you know,
Speaker 5: he was involved in the issuing of FTT, which was
Speaker 5: kind of like the you know, funny money that Sam
Speaker 5: Magmnfreed created to raise money for FTX. The creation of FTX,
Speaker 5: this ad and you know, it's basically numerous other areas
Speaker 5: of the business people you know we spoke to, you know,
Speaker 5: knew him. They they saw him in the office, and
Speaker 5: so you know, he was he was part of the team, uh,
Speaker 5: formally starting you know at the beginning of twenty twenty two,
Speaker 5: but going back to the to the very very beginning.
Speaker 3: Hannah, can you enlighten us about another key element of
Speaker 3: the reporting, which is the importance that the parents represented
Speaker 3: in terms of just their reputations vetting basically Sam's idea
Speaker 3: for the business right Sequoia Capital played a huge part
Speaker 3: in that too.
Speaker 7: Yeah, we know, you know that they were known figures
Speaker 7: both in the Stanford community and outside of it. You know,
Speaker 7: I live in the Bay Area. I came across many
Speaker 7: people who knew of them and interviewed them for this story,
Speaker 7: and they had influence, you know, they gave their stamp
Speaker 7: of approval, you know, to their family friend who then
Speaker 7: went to Sequoia and you know, gave the recommendation that
Speaker 7: you know, this was a company that they should be
Speaker 7: looking at. That he knew Sam Bank mcfreed's parents that
Speaker 7: these were people who were well respected, well known. So yeah,
Speaker 7: they you know, they kind of helped pave the way
Speaker 7: for their son.
Speaker 5: There's also the political element, you know, a big part
Speaker 5: of Sam bankman Freed. It's both his kind of like
Speaker 5: actual business strategy and when you look at like what's
Speaker 5: the mythology around him was as a political player. He
Speaker 5: was donating huge sums of money to especially the Democratic Party,
Speaker 5: but as we've learned throughout the case, to both parties.
Speaker 5: Officially he was trying to like for these like effective
Speaker 5: altruism related causes, mostly around pandemics. But of course, I
Speaker 5: think all along there was a bit of a wink wink, hey,
Speaker 5: and it would be pretty nice if there were some
Speaker 5: good crypto policy too. Now, his mother, Barbara Fried, in
Speaker 5: addition to being this you know, famous ethicist, she's I mean,
Speaker 5: she's a really impressive person. She's written kind of like
Speaker 5: a seminal paper on the trolley problem, which is the
Speaker 5: if you've watched The Good Place, it's kind of like
Speaker 5: a famous ethical quandary. She in twenty sixteen came this
Speaker 5: major figure on the left as a kind of Democratic
Speaker 5: Party fundraiser, funneling money from like Eric Schmidt and these
Speaker 5: big time Silicon Valley folks. That gives, of course, gives
Speaker 5: the family a bunch of connections. It also allows Sam
Speaker 5: Bankman Freed to kind of slot right in right. He
Speaker 5: starts donating money in twenty in twenty twenty and almost
Speaker 5: immediately is like on the inner circle of Democratic Party fundraising.
Speaker 5: And it's in part by giving through this network. Joe
Speaker 5: Bankman also had and has, you know, real connections. He's
Speaker 5: he's worked, he's advised political figures on tax policies. He's
Speaker 5: he's done a lot of advocacy for tax reform. And
Speaker 5: so he knew people, you know, they were both Barbara's
Speaker 5: networks and then and then Joe's contacts. I think we're
Speaker 5: helpful on both fronts and allowed Sam Bankment Freed to,
Speaker 5: you know, out of almost nowhere to be you know,
Speaker 5: really really on the inner circle in Washington, DC, where
Speaker 5: all of a sudden you have like major political figures
Speaker 5: taking seriously the idea that like this again, guy who
Speaker 5: refused to wear pants and you know, based in some
Speaker 5: kind of jurisdiction that no one really knows for sure,
Speaker 5: no one knows what he does, that he is going
Speaker 5: to be like the guru to tell us how to
Speaker 5: you know, reform digital currencies.
Speaker 2: A guy who said we should note who didn't want
Speaker 2: a yacht. Though, as the reporting shows from Max and Hannah,
Speaker 2: FTX and people associated with FTX did end up buying
Speaker 2: some sort of yacht. Hannah to that point, talk to
Speaker 2: us a little bit about how Sam BigMan Fried's parents
Speaker 2: benefited financially from their relationship with FTX and with their son.
Speaker 2: What did you guys uncover?
Speaker 7: Well, we know that they frequently visited the FTX campus
Speaker 7: and the Bahamas, that they sometimes even flew private to
Speaker 7: get there. They would frequently stay at a sixteen million
Speaker 7: dollar beach side apartment that FTX had purchased. They considered
Speaker 7: it to be the company's property, not their home. But
Speaker 7: they also you know, really helped him gain footing. They
Speaker 7: you know, we as Snacks mentioned, you know, Joe would
Speaker 7: go with him to meet with elected officials. You know,
Speaker 7: they got a taste of the nice life with their son,
Speaker 7: and it's it was very interesting to report about their
Speaker 7: presence at FTX.
Speaker 5: Yeah, that house, by the way, I mean, it's so
Speaker 5: so they're what they say and we should we should
Speaker 5: say this is you know, they did not see it
Speaker 5: as theirs. They thought it was you know, company property. Essentially,
Speaker 5: there were a lot of wonderful perks to working for FTX,
Speaker 5: you know, like the people were flying private and they
Speaker 5: were in fact flying their Amazon packages private. But Bloomberg
Speaker 5: uncovered a bill of sale that has their names on it,
Speaker 5: so so legally, you know, they own the home. And
Speaker 5: the other thing is they received quite a bit of money.
Speaker 5: And in early twenty twenty two, Sam mcminfrey gave his
Speaker 5: father ten million dollars. And the way he did that was,
Speaker 5: as we report in the piece, is he borrowed money
Speaker 5: from Alameda. Those are accounts that, according to prosecutors, contain
Speaker 5: customer funds, transfer to himself, transferred the money to Joe.
Speaker 5: According to court documents, he asked Joe for advice on this,
Speaker 5: asked his dad for advice, and then sent this ten
Speaker 5: million dollar check. And court documents have alleged that they're
Speaker 5: using that money, you know, to pay for the defense, because,
Speaker 5: of course, a massive criminal defense is not cheap.
Speaker 2: Our thanks to Bloomberg's Max Chafkin and Hannah Miller for
Speaker 2: breaking down the cover story with me and Simone Foxman
Speaker 2: for the entire conversation. Head on over to our BusinessWeek
Speaker 2: podcast feed and read the article in the magazine as well.
Speaker 2: It's on newsstands, now online, and on the Bloomberg terminal.
Speaker 2: Joe Weber will be back with us a bit later.
Speaker 2: Coming up, We talked to a man who's spent the
Speaker 2: past two years investigating SBF along with many other players
Speaker 2: and ponds in the Crypto universe. Bloomberg Investigations reporter Zeke
Speaker 2: Fox explains the ultimate financial bubble and the gut wrenching
Speaker 2: scams it's helped to foster across the globe. You're listening
Speaker 2: to Bloomberg BusinessWeek. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business This Week Podcast. Catch
Speaker 1: us live weekday afternoons from three to six Eastern Listen.
Speaker 9: On Bloomberg dot com, the iHeartRadio app, and the.
Speaker 1: Bloomberg Business App, or watch us live on YouTube.
Speaker 2: In twenty twenty one, Crypto went mainstream, with celebrity endorsements
Speaker 2: from the likes of Tom Brady to Matt Damon. Investment
Speaker 2: funds were buying it. TV ads hailed it as the
Speaker 2: future of money, and retail traders were making a fortune
Speaker 2: from dogecoin, which was originally created as a joke. Back
Speaker 2: in twenty thirteen, A new book from Bloomberg News financial
Speaker 2: investigations reporter Zeke Fox tries to help us decide whether
Speaker 2: there's anything behind these unusual alternative assets or if it's
Speaker 2: all just a confidence game of epic proportions. Zeke's book
Speaker 2: is called Number Go Up. Inside Crypto's Wild Rise and
Speaker 2: Staggering Fall. He joined me and Bloomberg News Deputy team
Speaker 2: leader for US Equities Jess Metton in our New York
Speaker 2: studios to explain his motivation for taking a two year
Speaker 2: journey around the globe, chasing both true believers and outright fraudsters.
Speaker 10: Ever since I was like a I wanted to write
Speaker 10: like a crazy nonfiction story like I loved like John
Speaker 10: Krackours Into Thin Air or Ben Mezrich's Bringing Down the
Speaker 10: House about the MT Blackjack Kids. But I never found
Speaker 10: a story crazy enough to turn into a whole book.
Speaker 10: Because the last thing I want to do is bore anyone.
Speaker 10: And I got once. I was kind of resistant to crypto,
Speaker 10: but as once I jumped in, I started meeting all
Speaker 10: these like wild billionaires and hustlers and conment and scammers
Speaker 10: and like at some point, maybe when I found myself
Speaker 10: on one crazy crypto billionaire's yacht off the Bahamas, I
Speaker 10: was like, wait, this is the adventure, Like, you're on
Speaker 10: it right now, this is what you got to write about.
Speaker 10: And I've ended up spending two years going down this
Speaker 10: rabbit hole.
Speaker 1: Yeah.
Speaker 10: I don't know that the world will ever see a
Speaker 10: financial mania like this like ever again.
Speaker 2: And we're still in the midst of it too. I mean,
Speaker 2: we see big moves in crypto, not like we saw
Speaker 2: a couple of years ago, zeek. But you know, we're
Speaker 2: we're not done talking about crypto at this point. There's
Speaker 2: a lot that sticks out to me from the book,
Speaker 2: but there's this one quote that I want to read
Speaker 2: to our audience. From the beginning, I had thought that
Speaker 2: crypto was pretty dumb, and it turned out to be
Speaker 2: even dumber than I imagined. So even after spending years
Speaker 2: working on this book talking to crypto billionaires, diving into
Speaker 2: these cryptocurrencies. You still think crypto's dumb.
Speaker 10: I think that if you anyone who's lived through like
Speaker 10: these last couple of years, I don't think we can
Speaker 10: just like memory hole that like all I went to.
Speaker 10: The one of the first places I went was Bitcoin
Speaker 10: twenty twenty one, this big conference in me at Miami,
Speaker 10: right after COVID.
Speaker 2: Restrictions, the one where everybody got COVID.
Speaker 10: Yes, not me. I became convinced after that that I
Speaker 10: was immune to COVID and I would never get COVID.
Speaker 10: But pretty soon after that, I did get COVID. But
Speaker 10: like I'm meeting, some of these guys were really legit
Speaker 10: at the time. Like I met Celsius's Alex Mathshinski. He
Speaker 10: was like talking to everybody and he was promising eighteen
Speaker 10: percent yields if you deposited your savings with his company.
Speaker 10: And he told me when we met, somebody's lying. Either
Speaker 10: the banks are lying that they can only pay zero
Speaker 10: percent or Celsius is lying that we can safely deliver
Speaker 10: eighteen percent. And like a couple of weeks ago, he
Speaker 10: got arrested. Just like a huge number of the founders
Speaker 10: that I met are now facing lawsuits or bankruptcy or
Speaker 10: criminal charges. So well, I do think there probably is
Speaker 10: some good cryptocurrency company out there. I'm not going to
Speaker 10: be the one to spend the effort to sift through
Speaker 10: like another giant pile of scammers to find it.
Speaker 11: Something that struck me too, because you did travel to
Speaker 11: all these different hotspots, from you're in Manhattan to Miami,
Speaker 11: you're in Bahamas, like you mentioned earlier, El Salvador to
Speaker 11: the Philippines, and so you were talking about how that
Speaker 11: you did see a lot of empty hype and a
Speaker 11: lot of scams, And what struck me was this new
Speaker 11: kind of yesmind fraud that you found were it often
Speaker 11: started with a text and it was a scame called
Speaker 11: pig butchering. Explain what that is and how that actually
Speaker 11: ended up happening to you.
Speaker 10: So pig butchering is when someone approaches you with the
Speaker 10: spam text, like we all get them, and it's like, hey, Dave,
Speaker 10: did you get the milk for the cat on your
Speaker 10: way home? Like they don't. They're like a little off right,
Speaker 10: But if you write back, they'll try to make friends
Speaker 10: with you and they'll often the person at the other
Speaker 10: end will pretend to be like an attractive young Asian woman,
Speaker 10: and they'll start dropping hints about they didn't have a
Speaker 10: rich uncle who's able to make these really profitable crypto trades.
Speaker 10: And I started I got one of these texts and
Speaker 10: started playing along and developed a pen pal friendship with
Speaker 10: this person who was saying their name was Vicky Hoe.
Speaker 10: And she eventually told me, hey, buy one hundred tethers,
Speaker 10: which are like a mainstream stable coin you can get
Speaker 10: on coin base or Crypto or any of the like
Speaker 10: normal crypto apps, and send them to this other crypto
Speaker 10: app called zbxs. And Vicky promised me that if I
Speaker 10: did that, she was going to introduce me to profitable
Speaker 10: short term node trades that would generate reliable thirty percent returns.
Speaker 10: And like, we all know this is nonsense, but in
Speaker 10: this like crypto world, like where for a couple of
Speaker 10: years it seemed like anything was possible, a lot of
Speaker 10: people were falling for this. People sent in hundreds of thousands,
Speaker 10: millions of dollars. One expert that I spoke to estimated
Speaker 10: that ten billion dollars have been lost to these crypto
Speaker 10: romance scams. And the crypto plays two roles in it.
Speaker 10: One is It's like it's the story that gets people
Speaker 10: to send their money. And the other thing is that
Speaker 10: you can go on crypto exchanges, acquire these tether tokens
Speaker 10: very easily, and then zap them over and you'll never
Speaker 10: get them back. It's anonymous. There's no way for the
Speaker 10: authorities to trace them.
Speaker 2: This portion of the book that Jessica it just is
Speaker 2: referring to is from was in the book, but we
Speaker 2: also were able to get you to talk to us
Speaker 2: about it. A couple of weeks ago, Zeke was featured
Speaker 2: in the August twenty first issue of Bloomberg Business Week.
Speaker 2: Excerpted in there, you also you know, I got to
Speaker 2: tell you. After our conversation and reading that excerpt, Zeke
Speaker 2: I stopped. I started thinking about those spam texts in
Speaker 2: a completely different way because it's really ugly the truth there.
Speaker 2: I mean, you spoke to somebody who had escaped from
Speaker 2: essentially prison or slavery indentured servitude by cobbling together an iPhone,
Speaker 2: making an iPhone work by essentially hotwiring it.
Speaker 10: Yeah, So that is the really dark part is that
Speaker 10: the people on the other end of these texts are often.
Speaker 2: It's not vicky.
Speaker 10: Yeah, they're like Vicky disappeared, never never found out who
Speaker 10: she was. But what I did find out is that
Speaker 10: a lot of the people sending these messages there are
Speaker 10: people from Southeast Asia who've been tricked into traveling to
Speaker 10: Cambodia and then trapped And like, legitimately sounds like a
Speaker 10: conspiracy theory, but I've seen it with my own eyes,
Speaker 10: huge like office towers filled with floor after a floor
Speaker 10: of people who are sending these spam text messages around
Speaker 10: the clock. So that the person that sent you that
Speaker 10: kind of nonsense text, like, it's not a bot. It
Speaker 10: could be someone who is being threatened with beatings of
Speaker 10: the torture, who would have who can't leave this job
Speaker 10: without paying a ransom And like you said, yeah, well,
Speaker 10: I spoke to Twee, who was victimized in this way
Speaker 10: and had raised money for the ransom from a YouTuber
Speaker 10: And when I spoke to him, he returned to Ho
Speaker 10: Chi Minh City and Vietnam and he told this crazy
Speaker 10: yeah mcguiverage story about how he was able to get
Speaker 10: an iPhone and charge it using no tools and a fluorescent.
Speaker 2: Lamp and he had to smuggle the iPhone in.
Speaker 10: He's so His story was that he had stolen it
Speaker 10: from the guards, but not the charger. He had secreted
Speaker 10: it inside himself, a trick that he learned in prison,
Speaker 10: and that he when he was alone, he took this
Speaker 10: iPhone apart and peeled out the battery and then hotwired
Speaker 10: it to afforest lamp and so very respectfully. When we
Speaker 10: were together in Vietnam, I was like, tweet, I don't
Speaker 10: think you can do that. Like You're like, I'm very
Speaker 10: sorry for what you went through, but like, are you shit?
Speaker 10: Is that really true? And he was like, I'll show
Speaker 10: you right now. We bought an iPhone. He took it
Speaker 10: apart with no tools, took apart a led lamp in
Speaker 10: my hotel room, wired the battery to this lamp, charged
Speaker 10: it and turned it right on. U. Yeah, I was floored.
Speaker 2: That was Bloomberg News Financial Investigations reporter Zeke Fox. Pick
Speaker 2: up a copy of his new book, Number Go Up
Speaker 2: Inside Crypto's Wild Rise and Staggering Fall, And you can
Speaker 2: also get his thoughts on the poort Ape Yacht Club
Speaker 2: by just heading over to our podcast feed. Jess Menton
Speaker 2: sticking with us for the rest of the program still
Speaker 2: had on Bloomberg Business Week. Even if you've been able
Speaker 2: to avoid crypto related fraud up to now, there are
Speaker 2: still some other to be aware of in the digital world,
Speaker 2: especially when it comes to AI.
Speaker 4: Cyber professionals have to be right one hundred percent of
Speaker 4: the time, and bad guys only have to be right
Speaker 4: once in order to get inside of your defenses.
Speaker 2: We'll break it down when we come back. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business app, and YouTube. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 12: The reason that I've been such a pretty cool AI
Speaker 12: safety in advance of sort of anything terrible happening is
Speaker 12: that I think the consequences of AI going wrong are
Speaker 12: our sphere, so we have to be proactive rather than reactive.
Speaker 2: That was the voice of Elon Musk. He's been among
Speaker 2: the people calling for regulatory guidelines when it comes to
Speaker 2: artificial intelligence, and he was on Capitol Hill this past
Speaker 2: week to discuss the potential society risks posed by the
Speaker 2: nascent technology. The world's richest man was among more than
Speaker 2: twenty tch and civil society leaders attending a closed door
Speaker 2: Senate summit on Wednesday that focused on AI. Meantime, many
Speaker 2: companies are trying to gauge its impact on cybersecurity in
Speaker 2: the workplace, especially since generative AI applications continue to evolve.
Speaker 2: Jess Menton and I have the perfect guest with us
Speaker 2: to help answer these burning questions.
Speaker 11: Dana zimbercov chief Risk, Privacy and Information Security officer at
Speaker 11: a Point, joining us on Zoom from New Hampshire to
Speaker 11: explain why the cybersecurity industry isn't ready for the AI
Speaker 11: boom and what guardrails companies should use to protect their
Speaker 11: employees data. Thanks so much for joining us. As always,
Speaker 11: I want to get your thoughts on that, because when
Speaker 11: we are discussing, like Tim and myself about this AI boom,
Speaker 11: why is it that cybersecurity companies may not be ready
Speaker 11: for this just yet?
Speaker 4: I think AI is just yet another obstacle in the
Speaker 4: road to looking for that perfect security solution that just
Speaker 4: doesn't at this out there honestly so. Artificial intelligence and
Speaker 4: sort of the deep learning that is coming through technologies
Speaker 4: like GBT really puts cyber professionals on edge, because this
Speaker 4: is just one more ripple in the world we live
Speaker 4: in where cyber professionals have to be right one hundred
Speaker 4: percent of the time and bad guys only have to
Speaker 4: be right once in order to get inside of your defenses.
Speaker 2: And there's a shortage of bad guys out there, Dana,
Speaker 2: as we as we certainly know. So what's the worst
Speaker 2: case scenario here? I mean, describe for us what kind
Speaker 2: of keeps you up at night, what makes you scared?
Speaker 4: Well, I think that really the secret to building a
Speaker 4: good program and addressing this is really to go back
Speaker 4: to cyber hygiene basics, doing what we do every day,
Speaker 4: which is making sure that we have good data governance
Speaker 4: in place within our companies and across our partner ecosystems.
Speaker 4: Because if you know what information you're handling, if you
Speaker 4: know what it is, where it is, who can access it,
Speaker 4: and how it's being shared, then you can largely mitigate
Speaker 4: some of the risks that are associated with AI. It
Speaker 4: does come down to people, policy and technology. So there
Speaker 4: really is no bad technology, just bad use of technology.
Speaker 11: And when you're talking about cybersecurity, are there particular sub
Speaker 11: industries or companies that you think might potentially be more
Speaker 11: vulnerable than others.
Speaker 4: Well, I certainly think that the ability for again those
Speaker 4: malicious bad actors to use AI to potentially perpetrate cybercrime
Speaker 4: take advantage of insiders inside of a company to really
Speaker 4: accelerate the process of cyber attacks. We've already seen through
Speaker 4: phishing and smishing where somebody receives a phone call or
Speaker 4: a text message saying that they are an executive that
Speaker 4: need help right away. Just imagine that amplified with the
Speaker 4: ability to actually fake person over video, these deep fakes
Speaker 4: that we've been hearing about, where a person's image voice
Speaker 4: could be easily replicated.
Speaker 2: H Dana, I'm you said phishing. We all know about phishing.
Speaker 2: Did you say smishing smishing?
Speaker 4: Yes, that's smishing is using using a text message or
Speaker 4: some kind of social media. So whether it's WhatsApp, your
Speaker 4: own or you know, just pretending to be somebody that
Speaker 4: you're not and using technology to get to an intended target.
Speaker 4: And this is really common. We see it a lot
Speaker 4: both inside of our company, as you know, as we
Speaker 4: build our own cyber defenses, but also across our customer
Speaker 4: ecosystem where it really isn't just what you know, but
Speaker 4: who you are that makes you a target potentially within
Speaker 4: a company.
Speaker 2: Yeah, I didn't know that what it was. That's what
Speaker 2: it was called. We had a great cover story an
Speaker 2: excerpt from Zeke Fox's book Number Go Up that talked
Speaker 2: all about where those text messages actually come from. I
Speaker 2: also encourage everybody listening who's interested to go check that
Speaker 2: one out. It was just a couple of weeks ago.
Speaker 2: Uh okay, So, Dana, what about when it comes to
Speaker 2: I mean, when I think about the worst case scenario,
Speaker 2: I mean I understand, like I consider myself pretty savvy
Speaker 2: when it comes to uh not answering those phishing emails.
Speaker 2: And we certainly get trained pretty well here at Bloomberg,
Speaker 2: and I think a lot of companies do that in
Speaker 2: this day and age.
Speaker 11: It's into some trick emails at times.
Speaker 2: Just if we get caught, yeah they do. You got
Speaker 2: to you got to be vigilant. I think my concern, though,
Speaker 2: is is is how generative AI sort of changes that,
Speaker 2: and it makes it so it's like really not possible
Speaker 2: to distinguish what is real and what isn't real. So
Speaker 2: so let's say that the weakest link is always the person.
Speaker 2: Where do companies like as point come in to to
Speaker 2: try to stop that from happening.
Speaker 4: Well, I think at the end of the day, it
Speaker 4: really is going to come down to not only identity,
Speaker 4: but also technology and what we allow individuals to do. So,
Speaker 4: just in the same way we've been talking over the
Speaker 4: last really couple of years with covid about now the
Speaker 4: borderless office, where employs are working really from anywhere in
Speaker 4: the world, their home, Starbucks, you know, the office. That
Speaker 4: means that there's no perimeter around the office that you
Speaker 4: can protect, and so identity really has become that new
Speaker 4: perimeter to a great extent, and making sure that you
Speaker 4: know who you're talking to and who you are is
Speaker 4: going to be critical. And limiting the ability for somebody
Speaker 4: to move either horizontally or vertically within a company if
Speaker 4: they are impersonated, is going to really help sort of
Speaker 4: fill that gap and protect against that kind of risk.
Speaker 11: We actually did hear from z Scaler and I did
Speaker 11: report earnings and their forecast for EPs did beat estimates.
Speaker 11: But of course, when it comes to a cloud cybersecurity
Speaker 11: company like this, how does cloud play into this And
Speaker 11: when it comes to AI as well and some of
Speaker 11: your concerns.
Speaker 4: Well, cloud is both an opportunity and a risk. That
Speaker 4: certainly a point as a as a cloud first company
Speaker 4: providing services to you know, millions of our customers around
Speaker 4: the world, takes advantage of a lot of the build
Speaker 4: in security controls that exist through our partners like Microsoft
Speaker 4: and others. There's also real opportunity with AI and the
Speaker 4: cloud to benefit from, you know, the kind of machine
Speaker 4: learning and intelligence that could also be used to fight cybercrimes.
Speaker 4: So I think there are tremendous opportunities that the cloud
Speaker 4: brings are really at the end of the day at
Speaker 4: somebody else's computer, and so that good data hygiene data
Speaker 4: governance is going to be critical to making sure that
Speaker 4: whether you're in the cloud or on premise, that you're
Speaker 4: really doing the right things to protect your business and
Speaker 4: your data.
Speaker 2: Is there a future for on premise or is it
Speaker 2: all in the cloud?
Speaker 4: Well, hard to say. I think, you know, the cloud
Speaker 4: is certainly the future. It's the wave, it's the direction
Speaker 4: that we see companies moving more and more. I think
Speaker 4: that there will likely always be some hybrid environments, and
Speaker 4: depending on your industry, depending on the kind of information
Speaker 4: you have cloud is not always possible, but we'll see now.
Speaker 4: You never say never, and I think it's always good
Speaker 4: to head your bets.
Speaker 11: Whenever you speak to companies, what is their biggest concern
Speaker 11: right now?
Speaker 4: Well, again, I think it is knowing where that data is.
Speaker 4: It's that unknown, that risk of not knowing is never better.
Speaker 4: And so you know, the challenge for AI is clearly
Speaker 4: that you can have a machine outpacing you rapidly. We
Speaker 4: now see that our computers regularly are asking us to
Speaker 4: prove that we're human by answering thinks like captures when
Speaker 4: you go to websites, will computers outpace humans at some point?
Speaker 9: Maybe?
Speaker 4: I think again, for cybersecurity and privacy professionals, it's building
Speaker 4: accountability into the way that we use data, making sure
Speaker 4: that there's good transparency with our customers, and making sure
Speaker 4: that we're really, you know, doing the right thing to
Speaker 4: maximize the opportunity for businesses to do what they should
Speaker 4: be doing while protecting the rights of individuals and data subjects.
Speaker 2: I don't know, just do you have any ever have
Speaker 2: a problem with those captures. I feel like they're they're
Speaker 2: already the captures have already outsmarted me. You know, I'm
Speaker 2: talking about wright those things.
Speaker 9: Yeah, yeah, come.
Speaker 11: On, I mean, I mean, I honestly like one time
Speaker 11: I got one of those Bloomberg emails and accidentally clicked
Speaker 11: it on something. Then I had to go back through
Speaker 11: and do all of the training. So I'm super vigilant now.
Speaker 12: And not to bust it.
Speaker 2: You only make that mistake once, I.
Speaker 11: Know exactly, so never again after doing that.
Speaker 13: Well, that's that's good.
Speaker 4: That's good hyber training.
Speaker 2: That was Dana Simbercoff, chief Risk, Privacy and Information Security
Speaker 2: officer at AFPOINT. You're listening to Bloomberg Business Week Up next.
Speaker 2: Apple just unveiling the iPhone fifteen this week, but not
Speaker 2: before Chinese telecom giant Huawei released its own advanced mobile
Speaker 2: phone that uses tech the US has sought to keep
Speaker 2: out of Beijing's hands.
Speaker 14: They have been able to make some sort of breakthroughs
Speaker 14: to tech levels that the US was trying to avoid
Speaker 14: them to getting. And just to be clear, this isn't
Speaker 14: just so much that they don't want them necessarily compete
Speaker 14: with the iPhone or Apple or other US manufacturers or
Speaker 14: allies in terms of selling phones. It's really a concern
Speaker 14: about economic security as well with military security. Worried that
Speaker 14: some of these tips and some of this technology that
Speaker 14: they could make breakthroughs on will be used in a
Speaker 14: way they could be quite competitive militarily insecurity wise.
Speaker 2: With the US, we go from cybersecurity concerns at the
Speaker 2: corporate level to a technological arms race on a global scale.
Speaker 2: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons for from three to six Eastern Listen.
Speaker 9: On Bloomberg dot com, the iHeartRadio app, and.
Speaker 1: The Bloomberg Business app, or watch US Live on YouTube.
Speaker 2: The excitement surrounding the iPhone fifteen's unveiling this past week
Speaker 2: was palpable for Apple loyalists around the world. Accepted one
Speaker 2: key market, China. Officials there are claiming to have experienced
Speaker 2: so called security incidents with prior models. Bloomberg News reported
Speaker 2: this month that China plans to widen a ban on
Speaker 2: the use of iPhones to a number of state backed
Speaker 2: companies and agencies. The White House says it's a retaliatory
Speaker 2: move against the US, and even before Apple's latest product launch,
Speaker 2: Huawei had already begun pre sales of its new Mate
Speaker 2: sixty pro phone, which uses technology the US has sought
Speaker 2: to keep out of Beijing's hands. Jess Menton and I
Speaker 2: spoke with Bloomberg News senior editor Ramsey Albercabi and Businessweeks
Speaker 2: Joe Weber for a read on the Chinese telecom giants'
Speaker 2: surprise development.
Speaker 3: All this news came from a Bloomberg teardown of a
Speaker 3: Wadwei phone that revealed China had made significant advances on
Speaker 3: the chip front, and it put some attention on sanctions,
Speaker 3: which have been obviously a huge weapon that the US
Speaker 3: has used not just to perhaps try and slow China down,
Speaker 3: but also in Russia and in Ramsey, the thing that
Speaker 3: came to mind was just that perhaps the sanctions were
Speaker 3: an inevitable thing that would only work for a while, right.
Speaker 11: Yeah.
Speaker 14: The timing of it was really noteworthy to because it
Speaker 14: came just on the end of a visit by the
Speaker 14: Commerce Secretary Tina Romando and her department, particularly the Bureau
Speaker 14: of Industry and Security, are the ones that manage all
Speaker 14: of the tech control tech export controls that are put
Speaker 14: in place to try to keep this sort of technology
Speaker 14: out of China's hands. So the day that she's taking off,
Speaker 14: they quietly start selling this phone, which they'll send a
Speaker 14: clear message that they have been able to make some
Speaker 14: sort of breakthroughs to tech levels that the US was
Speaker 14: trying to avoid them to getting. And just to be clear,
Speaker 14: this isn't just so much that they don't want them
Speaker 14: necessarily compete with the iPhone or Apple or other US
Speaker 14: manufacturer or allies in terms of selling phones. It's really
Speaker 14: a concern about economic scurity as well with military security.
Speaker 14: Worried that some of these tips and some of this
Speaker 14: technology that they could make breakthroughs on will be used
Speaker 14: in a way they can be quite competitive militarily insecurity
Speaker 14: wise with the US.
Speaker 11: Ramsey, I'm curious, how could this potentially escalate some of
Speaker 11: the tensions when we're thinking about what's already there right
Speaker 11: now between the US and China.
Speaker 14: The thing is that I get back to Raymondo. She
Speaker 14: was on the tail end of a series of visits.
Speaker 14: There was Blinkeln had gone, Yellen had gone, John Carry
Speaker 14: had gone, There was there was an effort by the
Speaker 14: Bido administration to sort of ease some of the tensions.
Speaker 14: And what happens though once it comes out, you're going
Speaker 14: to have a lot of pressure domestically to do more
Speaker 14: of the particularly in the House the GOP, with like
Speaker 14: McCall and gallagher calling for stronger sanctions, stronger reactions, the
Speaker 14: stronger response from the administration clamp down on some of
Speaker 14: the experts that are still allowed to some of these companies.
Speaker 14: So that kind of uh can can kind of heat
Speaker 14: up those tensions again on the commerce side of things
Speaker 14: that I think the the White House is hoping could
Speaker 14: could uh it could keep a keep a lid on.
Speaker 3: Okay, So what about uh uh the chips that came
Speaker 3: from like South Korea that ended up in the phone,
Speaker 3: what what is the what's the US feel about that?
Speaker 14: Well? I think the the s K high next memory
Speaker 14: chip took x K hinex by by surprise too. I
Speaker 14: don't I think that they don't know how Huawei got
Speaker 14: a hold of those. Uh So that's a that's a
Speaker 14: question I have to look into, and the and the
Speaker 14: in the U S is you know, investigating the where
Speaker 14: these chips came from on the China side, on the
Speaker 14: on the Korea side, and we had Jakes all have
Speaker 14: been quite recently saying that a matter of time, they're
Speaker 14: gonna they're looking into this and talk to their their
Speaker 14: They said, consult their partners. I'm assuming they mean South
Speaker 14: Koreans as well as the Dutch and the Japanese who
Speaker 14: who sort of who build some of the technology needed
Speaker 14: to make these chips and uh, and then they'll said,
Speaker 14: we'll make decisions accordingly. So I think, uh, you know
Speaker 14: this topic here. Yeah, they're trying to try to figure
Speaker 14: out where, you know, what's out there, what's happening. And
Speaker 14: then they'll also try to hopefully wait for this domestic
Speaker 14: political heat to cool off before they decide their next step.
Speaker 2: That was Bloomberg News Senior editor Ramsey Albracabbi with me
Speaker 2: and Jess Metton. Joe Webber will be sticking with us
Speaker 2: for our next couple of stories, and that wraps up
Speaker 2: the first hour of the weekend edition of Bloomberg Business
Speaker 2: Week from Bloomberg Radio. Coming up in our next hour,
Speaker 2: we'll detail the remarkable true story of America's first women astronauts,
Speaker 2: plus the CEO of J. C. Penny talks renewal and
Speaker 2: reinvestment at the previously bankrupt retailer, and how MSG boss
Speaker 2: James Dolan turned his notepad sketch into a multi billion
Speaker 2: dollar entertainment venue in the heart of Las Vegas. This
Speaker 2: is Bloomberg Business Week. I'm Tim Stenovec. Stay with us.
Speaker 2: Today's top stories and global business headlines are coming up.
Speaker 1: Right now, you're listening to the Bloomberg Business Week Podcast.
Speaker 1: Catch us live weekday afternoons from three to six Easter
Speaker 1: on Bloomberg Radio, the Bloomberg Business app and you. You
Speaker 1: can also listen live on Amazon Alexa from our flagship
Speaker 1: New York station Just Say Alexa Play Bloomberg eleven thirty.
Speaker 2: Tim Stenevic and Jess metting with you plenty ahead in
Speaker 2: our second hour of the weekend edition of Bloomberg Business Week,
Speaker 2: including the CEO of J. C. Penny on bringing the
Speaker 2: embattled retailer back from near extinction and James Dolan's ten
Speaker 2: figure bid to leave his mark on the future of entertainment.
Speaker 2: First up this hour, a bit of history. Back in
Speaker 2: nineteen seventy seven, more than eight thousand applied and six
Speaker 2: were chosen. The six Sally Rye, Judy Resnick Anna Fisher,
Speaker 2: Kathy Sullivan, Shannon Lucid and Rhea Seddin were America's first
Speaker 2: women astronauts, and they're the subject of a new book
Speaker 2: from Bloomberg News space reporter Lauren Grush. It's called The
Speaker 2: Six The Untold Story of America's First Women Astronauts. An
Speaker 2: excerpt of the book was published in the August twenty
Speaker 2: eighth issue of the magazine, and this past week, Jess
Speaker 2: and I welcomed BusinessWeek editor Joe Weber and Lauren into
Speaker 2: our New York studios to discuss the project, along with
Speaker 2: the author's unique background.
Speaker 15: So, I'm actually a bit of a NASA baby. Both
Speaker 15: of my parents worked on the Space Shuttle program, which
Speaker 15: is you know, makes a big appearance in the book.
Speaker 15: My mother was the deputy orbiter chief engineer, and then
Speaker 15: my father helmed up the propulsion branch before he retired.
Speaker 15: And so I very much, you know, I grew up
Speaker 15: with the Space Shuttle. I lived outside of Houston. It
Speaker 15: really was like a full circle moment getting to report
Speaker 15: on it and go back to kind of my childhood roots.
Speaker 3: The part that we wanted to talk about in the
Speaker 3: book was specifically about Sally Ride, and when you worked
Speaker 3: on that part of the book, like, I'm curious, like
Speaker 3: there's an element that still resonates today, and I'm curious,
Speaker 3: like walk us through why Sally Ride matters all these
Speaker 3: years later.
Speaker 15: Absolutely, I think right now it's more relevant than ever.
Speaker 15: You know, NASA is working to go back to the
Speaker 15: Moon with its Artemis program, and one of the stated
Speaker 15: goals of that program is to send the first woman
Speaker 15: and the first person of color to the lunar surface.
Speaker 15: And I really think that is a first for NASA
Speaker 15: to actually have that a stated goal. Normally in their programs,
Speaker 15: they really don't specify who would go. It's really just
Speaker 15: we're going to get there, and we'll send the right
Speaker 15: people for the job when we do. So this is
Speaker 15: a bit of a first, and so it's interesting that
Speaker 15: they're clarifying that before they go. And I think Sally's
Speaker 15: story is really pertinent right now because obviously, when Sally
Speaker 15: was going up to space, you know, it was such
Speaker 15: a novel concept for the country, even though you know
Speaker 15: it really shouldn't have been. You know a lot of
Speaker 15: journalists in the media, we're asking questions about her, and
Speaker 15: you know, we're just so curious how that women and
Speaker 15: men could possibly fly into space together. So, you know,
Speaker 15: Sally kind of took on that burden when she was
Speaker 15: the first one, and so hopefully, you know, as we
Speaker 15: move forward and try to fix these you know, errors
Speaker 15: in our space history. By sending the first woman and
Speaker 15: the first person of color to the moon, those people
Speaker 15: have it a little bit easier. And the press will
Speaker 15: you know, I'll be a member of the press, so
Speaker 15: I won't ask those questions of those people when they fly.
Speaker 3: Let's talk about the American competition, right, and that was
Speaker 3: like a fascinating competition because it was like a moment
Speaker 3: of equality and yet like was it.
Speaker 15: Well, I mean, you have to understand when you have
Speaker 15: a group of competitive astronauts, as you had with the
Speaker 15: class of astronauts that Sally was in, you know, they're
Speaker 15: an extremely competitive group of individuals. So obviously their sole
Speaker 15: ambition was to fly into space.
Speaker 5: I hear.
Speaker 15: That is the sole ambition of every astronaut obviously, and
Speaker 15: so you know, obviously they all wanted to be the first,
Speaker 15: and I think with the women, obviously there was that
Speaker 15: added pressure of being the first American woman. And so
Speaker 15: the issue they had though was they really had no
Speaker 15: idea what the terms of this quote unquote competition, where
Speaker 15: obviously NASA wasn't saying there was a competition, but everybody
Speaker 15: was asking about it. The media all knew about it.
Speaker 15: They were all kind of picking their favorites by who
Speaker 15: they liked to cover and who you know, they they
Speaker 15: thought maybe fit the best feminine architetye. You know, that
Speaker 15: was kind of playing out and the press before they
Speaker 15: were chosen.
Speaker 2: Well, talk a little bit more about the press coverage
Speaker 2: at the time, and I kept having to remind myself,
Speaker 2: this isn't that long ago. I mean we're talking like
Speaker 2: just before the nineteen eighties, which you know, was the
Speaker 2: decade I was born in, Like, this is not that
Speaker 2: long ago.
Speaker 15: Yeah, I mean even when they first came on board,
Speaker 15: when the first six women came on board, you know,
Speaker 15: a reporter asked during the initial press conference that announced them,
Speaker 15: you know, was Shannon's three kids taken into account? And
Speaker 15: it's you know, we've been flying with men who had
Speaker 15: children for many, many years by that point, and still,
Speaker 15: you know, they were concerned about whether or not a
Speaker 15: mother could handle this role. And so that was just
Speaker 15: reflected in many of the questions that were asked. Sally
Speaker 15: probably got the worst of them, just because she was
Speaker 15: the first. You know, famously, she was asked if she
Speaker 15: wept in the simulator when it broke down. There were
Speaker 15: some other I mean there was another one. I actually
Speaker 15: have the video of that press conference before she would
Speaker 15: you have to watch in person because she her facial
Speaker 15: expressions are just so good. She handled it very gracefully,
Speaker 15: but you can tell, you know, she's hurting inside. And
Speaker 15: there was another question that was asking her, you know,
Speaker 15: you know you quit tennis. She used to be a
Speaker 15: tennis player before she came to the Space program, and
Speaker 15: it was you quit tennis because you didn't think you
Speaker 15: had the ability to go pro? Would you have quit
Speaker 15: the Space program if you hadn't been the first American
Speaker 15: woman picked? So, you know, just kind of terrible questions
Speaker 15: like that. You know, they asked if she'd be the
Speaker 15: first mom in space. One anchor asked if she wished
Speaker 15: she were a man? You know, just truly. You wonder
Speaker 15: how I keep saying during these interviews, you know, I
Speaker 15: apologize for our press ancestors because I feel like we've come.
Speaker 7: A long way.
Speaker 1: I'm with you.
Speaker 11: These six women had a pretty diverse professional background. Talk
Speaker 11: to us about that.
Speaker 15: Yeah, That's what I loved most about the cohort is
Speaker 15: they are so illustrated of how there's just no one
Speaker 15: true path to space. You know, we had two medical doctors,
Speaker 15: an astrophysicist and tennis player, an electric electrical engineer, an
Speaker 15: oceanographer and geologist, and a chemist. And not only were
Speaker 15: they diverse in the types of fields that they worked in,
Speaker 15: but also in terms of whether or not they always
Speaker 15: wanted to be astronauts. You know, some half of them
Speaker 15: had dreamed about it their whole lives or had secretly
Speaker 15: harbored this ambition, while the other half didn't even think
Speaker 15: about it until they saw that NASA was opening up
Speaker 15: the selection process. And I just think that's a really
Speaker 15: great illustration of you know, when you make things more
Speaker 15: diverse and accessible for people, those who would be great
Speaker 15: in those roles would realize that they could actually do
Speaker 15: it when they wouldn't have before.
Speaker 3: Okay, there's also this subtle thing that comes up in
Speaker 3: the book that astronauts seem to have a chemical attraction
Speaker 3: to one another. How many different relationships were there were?
Speaker 6: Yeah, there was.
Speaker 15: There were three of the women did marry other astronauts,
Speaker 15: and some one they married, you know, before they became astronauts,
Speaker 15: but secretly harvard that ambition. Others met through the program,
Speaker 15: And I think that's just it's indicative of the fact
Speaker 15: that they spent a lot of time together. You know,
Speaker 15: this was a very close, tight net group of astronauts,
Speaker 15: the tfng's you know, the men actually say this in
Speaker 15: the book. You know, what was described to me is
Speaker 15: the women weren't exactly you know, the bestest of friends,
Speaker 15: you know, which you might think they were being, you know,
Speaker 15: very similar in how you know, how they were picked
Speaker 15: and the things that were asked of them, but it
Speaker 15: was really the men that they spent most of their
Speaker 15: time with. For instance, they had to stay current in
Speaker 15: NASA's fleet of T thirty eight jets, and so since
Speaker 15: the women weren't able to fly the planes themselves, they
Speaker 15: had to be in the back seat, and so they
Speaker 15: spent a lot of time with male pilots, and so
Speaker 15: they would start to gravitate towards the pilots that they
Speaker 15: like the most. So I think it just goes to
Speaker 15: show that when you put a lot of you know,
Speaker 15: very accomplished, good looking people together and you make them
Speaker 15: spend a lot of time together, you know, romance is bloom.
Speaker 2: How are things at NASA today in terms of gender breakdown?
Speaker 2: Because if you look at the airline industry, it's still
Speaker 2: relatively rare to actually have a female captain.
Speaker 15: Yeah, I mean, there's still quite a long way to go.
Speaker 15: While each of the astronauts selections since the six were
Speaker 15: chosen have had women, you know, they all haven't been equal.
Speaker 15: And in terms of the women who've gone to space,
Speaker 15: I think we're still below one six of the people
Speaker 15: who've gotten to space have actually been women, and the
Speaker 15: women of the statistics for women of color are just
Speaker 15: even more abysmal. We have such a long way to
Speaker 15: go to really reach that equality. So it's that, you know,
Speaker 15: I just think that when you put up societal barriers
Speaker 15: in place, it takes quite a long time to break
Speaker 15: them down. So, you know, think of the criteria that
Speaker 15: it takes to become an astronaut. We had to really
Speaker 15: like encourage women and people of color to go in
Speaker 15: stem fields because they were discouraged from going into those
Speaker 15: fields for so long, and it just takes a while
Speaker 15: to you know, break those barriers down. So and when
Speaker 15: it comes to space, things take a really long time.
Speaker 15: Developmental time takes, you know, it's we're talking on the
Speaker 15: order of years and decades. But to that point, it's
Speaker 15: probably safe to say that we could be doing more.
Speaker 15: You know, there's better ways to you know, encourage a
Speaker 15: more diverse set of people to get into the program.
Speaker 15: So it's just something to keep top of mind.
Speaker 2: Our thanks to Bloomberg News Space reporter Lauren Grush, her
Speaker 2: new book is just out. It's called The Six, The
Speaker 2: Untold Story of America's first women Astronauts. You can catch
Speaker 2: the full conversation on the business Week podcast feed. You're
Speaker 2: listening to Bloomberg business Week coming up. While billionaire James
Speaker 2: Dolan has compiled a massive sports and entertainment portfolio that
Speaker 2: includes two New York sports teams and a variety of
Speaker 2: arenas in theaters, his latest project could redefine his legacy.
Speaker 6: You know, some people call him Madison Square Garden, you know,
Speaker 6: the most famous venue in the world. Yet he has
Speaker 6: this idea he wants to disrupt I have entertainment.
Speaker 2: Our BusinessWeek team takes you inside the sphere in the
Speaker 2: heart of Sin City. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen.
Speaker 9: On Bloomberg dot com. The iHeartRadio app and the Bloomberg
Speaker 9: Business app, or watch us live on YouTube.
Speaker 2: For the last several years, people visiting Las Vegas might
Speaker 2: have been puzzled as they gazed westward from the Strip.
Speaker 2: Looming in the distance was a three hundred and sixty
Speaker 2: six foot tall sphere. The Dark orb bore a familial
Speaker 2: resemblance to the Death Star, but lacked any signage offering
Speaker 2: a clue to its purpose. Devin Leonard is out with
Speaker 2: a new feature that delves into the convoluted history and
Speaker 2: promise of what's known as the Sphere. It's in the
Speaker 2: latest issue of Bloomberg BusinessWeek magazine, available now on newsstands,
Speaker 2: online and on the terminal. Devin and Joe Weber are
Speaker 2: with me and Jess mett In to detail the one
Speaker 2: of a kind venue and the man behind the project,
Speaker 2: New York Nixon Rangers owner and CEO of MSG Entertainment,
Speaker 2: James Dolan.
Speaker 3: He's actually kind of fascinating in that he has other interests.
Speaker 3: Music's a big one, and he saw this opportunity to
Speaker 3: basically build something in Vegas that had never been built before,
Speaker 3: and he had a vision that I think originated more
Speaker 3: or less with him and he went and like did it,
Speaker 3: and now it's like gonna open and there has never
Speaker 3: been a music venue like this, So yeah, it's really
Speaker 3: easy to hate on James Dolan and the guy may
Speaker 3: have pulled off like what's basically the perhaps a world
Speaker 3: class music venue unlike any other. And it shaped like
Speaker 3: a sphere, and that's what it's called, right Devin, the sphere.
Speaker 6: Yeah, I mean, I mean, look, you know this, this
Speaker 6: is a guy he embarks on this thing. You know,
Speaker 6: he's he's past sixty, he's got, you know, all the
Speaker 6: money he needs. He's the son of a son of
Speaker 6: a billionaire, Charles doll And, a cable you know, cable
Speaker 6: TV pioneer. His family controls, you know, some of the
Speaker 6: world's most you know, famous venues. You know, some people
Speaker 6: call Madison Square Garden, you know, you know, the most
Speaker 6: famous venue in the world. Yet he has this idea
Speaker 6: he wants to disrupt live entertainment by building you know
Speaker 6: what's basically what is it? You know, it's around it's
Speaker 6: an orb like you know, sphere, and it's it's sort
Speaker 6: of three different things.
Speaker 1: You know.
Speaker 6: At night, it's going to be a concert hall where
Speaker 6: this sort of state of the art sound system and
Speaker 6: also this huge LED screen that's as big as bigger
Speaker 6: than I should say, three football fields, and you know
Speaker 6: the high they're calling it the highest resolution LED screen
Speaker 6: in the world. In the daytime, it's going to be
Speaker 6: sort more of a tourist attraction, immersive entertainment.
Speaker 2: You've got to see pictures and videos of this thing
Speaker 2: to actually do it justice. I mean, you hearing about
Speaker 2: it is one thing totally, but this thing is actually
Speaker 2: really really cool.
Speaker 6: No, I mean that. That's something that really kind of
Speaker 6: blew my mind was that when I went out to
Speaker 6: Vegas to go take a tour, I actually I stayed
Speaker 6: in the west and you know, which is sort of
Speaker 6: overlooking it, and I asked them, you know, hey, can
Speaker 6: I can I I want to look out at the
Speaker 6: sphere because it was it was one hundred and fourteen degrees.
Speaker 3: I got to do it.
Speaker 6: I'm not going to go outside. But but no, but
Speaker 6: but I got in there and just looked at it
Speaker 6: out the window. I couldn't believe it. I mean that
Speaker 6: that's when you know, again, as I say in the story,
Speaker 6: a lot of people, you know, were doubting of people
Speaker 6: were saying, this is you know, this is never going
Speaker 6: to work. This is the death star. And then they
Speaker 6: turned it on and you know everybody had you know,
Speaker 6: people just kind of went nuts.
Speaker 11: So why is spear? What was the inspiration behind it?
Speaker 6: You know, that's a really good question. You know, in
Speaker 6: twenty sixteen, you know, his family just sold Cable Vision.
Speaker 6: They just they just sold it for eighteen billion dollars,
Speaker 6: you know. And I make a joke in the story
Speaker 6: the guy plays in the band. I mean he could
Speaker 6: have gone off and played and played in the band,
Speaker 6: and he's like he drew a picture, you know, on
Speaker 6: on a notepad and you know, and told this guy,
Speaker 6: but the chief technology officer of a Cable Vision, this
Speaker 6: is the venue of the future. Let's go out and
Speaker 6: disrupt the live entertainment is I don't actually know where,
Speaker 6: no where he got that idea.
Speaker 3: But it turns out that from an engineering standpoint, it
Speaker 3: is incredibly difficult, No, it's insane to playing music in.
Speaker 3: So how did they go about solving that?
Speaker 6: Well, it's an acoustical nightmare because everything just echoes inside
Speaker 6: of Speercally. They found a company in called Hollaplot in
Speaker 6: Germany that's that basically beams audio to using algorithms to
Speaker 6: different places, and you know, to where wherever you're sitting
Speaker 6: that the algorithm set up so they're basically measured. They're
Speaker 6: creating these beats, you know, sound and and and they're measured,
Speaker 6: so everybody sort of here's the same thing. But that way,
Speaker 6: since you're sending the audio right to the people you're
Speaker 6: everything isn't just bouncing all around and echoing. And that's
Speaker 6: just one of the sort of crazy, crazy and and
Speaker 6: and I think ultimately expensive things they did, and and
Speaker 6: helps explain why this thing went from one point two
Speaker 6: billion dollars you know price tag to uh two point
Speaker 6: three billion.
Speaker 3: That's the thing.
Speaker 6: Who's counting?
Speaker 3: So so wait, there's gonna be a big act that's
Speaker 3: gonna open this up. And because this is gonna happen,
Speaker 3: and I mean, it's already in Vegas, it's built. They're
Speaker 3: already doing weird stuff on the strip.
Speaker 6: Who's opening a little band from Ireland called a You
Speaker 6: two of them?
Speaker 3: Yeah, I think if you're gonna be there, yeah, if
Speaker 3: you're gonna make if you're gonna make a splash like
Speaker 3: launch with with with YouTube, how long are they going
Speaker 3: to be opening there?
Speaker 6: They're good, they're they're gonna be playing for twenty five
Speaker 6: twenty five nights, and tickets are how much, you know,
Speaker 6: I think they started around one hundred and fifty dollars.
Speaker 3: Yeah, but I mean I'm going, well, I.
Speaker 6: Mean they're almost all sold out, so I think if
Speaker 6: you want to go, Joel, you're gonna have to look
Speaker 6: at them stuff up and those prices are right. Yeah.
Speaker 2: I mean it's a good point though, Joel, that you
Speaker 2: bring up. If it's good enough for Bono, all right,
Speaker 2: then you know it's good enough for other musicians.
Speaker 9: Right.
Speaker 3: I also just think this is this is the future,
Speaker 3: right like live event We know that live events are
Speaker 3: where artists make their money. If you can make an
Speaker 3: artist a venue unlike any other what happens, you can
Speaker 3: get anybody you want.
Speaker 6: Well, they don't have to travel, so so I mean,
Speaker 6: these these bands have like these caravans of trucks that
Speaker 6: you know they carry there. They're they're they're you know,
Speaker 6: all the equipment around all that, they take their led
Speaker 6: lighting around, they take their sounds just to surround all
Speaker 6: these concert halls and and and in this is from
Speaker 6: what I'm told with you too and other bands, they
Speaker 6: actually have two sets. You know two caravans that you
Speaker 6: know that you know that that move in between in
Speaker 6: between venues, So when they're so the one to the
Speaker 6: next one, you know, they're setting up the next venue
Speaker 6: walk while they're breaking down the first. Anyway, I mean,
Speaker 6: it's it sounds, it's enormously expensive and it's a huge headache.
Speaker 6: And I guess if they can spend you know, a
Speaker 6: couple of months in Vegas, you know, some people are
Speaker 6: definitely gonna want to do that. And some of the bands,
Speaker 6: by the way that they're talking about a cold Play
Speaker 6: and Fish, Harry Styles is.
Speaker 2: All the relationship with Fish they're doing.
Speaker 3: Yeah you packed that house?
Speaker 6: Yeah, okay.
Speaker 3: So there's also a possibility that Vegas won't be the only.
Speaker 6: Place that has a sphere, not if Jim Dog can help.
Speaker 6: But yeah, no, they're they're, they're they're they're trying to
Speaker 6: get permission to build one in London and there's they're
Speaker 6: scouting other locations. But after spending two point three billion dollars,
Speaker 6: they want to change their plans to get partners because
Speaker 6: he's not going to want to do that again. Well
Speaker 6: he's already said he says he's not going to do
Speaker 6: that again.
Speaker 2: Okay, So Joel, you mentioned that, you know, with live
Speaker 2: music in this day and age, the world of Beyonce,
Speaker 2: the world of Taylor Swift, people will pay for certain
Speaker 2: acts and certain experiences more.
Speaker 3: Than one hundred and fifty dollars.
Speaker 2: Oh for sure. Yeah, he didn't see me going to
Speaker 2: beyoncere Taylor Swift as concerts, even though I wanted to, Devin,
Speaker 2: it was hard to see this coming, like the post
Speaker 2: pandemic surge and especially the high prices that people would pay.
Speaker 2: Talk about the construction of this and the way that
Speaker 2: the pandemic derailed it, because this thing was in the
Speaker 2: works before the summer of twenty twenty three.
Speaker 6: No, because that's I mean, that's the whole thing. They
Speaker 6: basically they least eighteen acres of land from from Las
Speaker 6: Vegas sands and they started to build this thing, and
Speaker 6: then in twenty twenty the pandemic hits and it just
Speaker 6: dry up the cost of you know, steel, computer chips,
Speaker 6: you know, basically, you know, just saying the story just
Speaker 6: about anything you need, you know, for a multi billion
Speaker 6: dollar development.
Speaker 2: LEDs were more yeah.
Speaker 9: Yeah, yeah, those.
Speaker 6: Yeah, no, yes, especially for the inside and the outside
Speaker 6: of the excessphere but so so so that effect and
Speaker 6: also halted construction. They were initially going to open in
Speaker 6: twenty twenty one, so that set them back three years.
Speaker 6: But but but it was also just all this advanced technology,
Speaker 6: all these things they're experimenting with. They had to create
Speaker 6: an entirely new camera just to be able to capture
Speaker 6: images large enough to fit, you know, that screen. They
Speaker 6: were stitching images together for multiple cameras.
Speaker 3: Camera and they had to patent this thing because it's
Speaker 3: like the quality in size of this image is so big.
Speaker 3: And then like, I think this is like there's like
Speaker 3: some feats of engineering that they passed.
Speaker 6: A lot of stuff. I came. I think there's I
Speaker 6: think the numbers on like sixty patents overall, and not
Speaker 6: just that the camera is just you know, like eight
Speaker 6: or something.
Speaker 2: So our thanks to senior Global business writer for the magazine,
Speaker 2: Devin Leonard and once again the editor of Bloomberg BusinessWeek,
Speaker 2: Joel Weber. Still to come. On Bloomberg Business Week, we
Speaker 2: turn our attention to the retail sector and the resurrection
Speaker 2: of j C. Penny. CEO Mark Rosen stops by to
Speaker 2: explain the strategy and why it's paying off. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
Speaker 1: the Bloomberg Business app, and YouTube. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station,
Speaker 1: Just Say Alexa play Bloomberg eleven.
Speaker 2: Thirty Tim Stenek along with Bloomberg News Deputy team leader
Speaker 2: for US Equities Jess Menton, Who's in for Carrol Master
Speaker 2: this week? Our next guest is a veteran of Walmart
Speaker 2: and Levi Strauss, who's facing perhaps his toughest challenge yet
Speaker 2: reviving the storied brand of j C. Penny, which dates
Speaker 2: back more than one hundred and twenty years. The department
Speaker 2: store chain filed for bankruptcy shortly after the start of
Speaker 2: the pandemic in twenty twenty. Then in November of twenty
Speaker 2: twenty one, a new leader took the helm. Just last month,
Speaker 2: the company announced a one billion dollar reinvestment plan that
Speaker 2: focuses on digital and in store experiences. This past week,
Speaker 2: we caught up with Mark Rosen, the CEO of the
Speaker 2: now privately held Jcpenny. He joined us from the company's
Speaker 2: headquarters in Plano, Texas.
Speaker 16: We are a private company, but what I can share
Speaker 16: is we now have sales that are over eight billion dollars.
Speaker 16: We have just over six hundred and fifty stores across
Speaker 16: the country, and we also operate jcp dot com, So
Speaker 16: we're serving customers everywhere right now, and the business is
Speaker 16: really You mentioned that we emerge from bankruptcy, and we
Speaker 16: emerged with a very very clean balance sheet, in a strong,
Speaker 16: strong financial position with less than half a billion dollars,
Speaker 16: with less than five hundred million dollars of debt on
Speaker 16: the balance sheet, so really financially positioned to drive forward
Speaker 16: and really reinvigorate this brand and re establish our relationship
Speaker 16: and our relevance with our consumers, which is really the
Speaker 16: core of America.
Speaker 2: You might have heard just a little earlier talking about
Speaker 2: over the weekend visiting a mall, seeing a jcpenny that
Speaker 2: was no longer operating, and even having the conversation with
Speaker 2: his family about whether or not the store still exists.
Speaker 2: How do you change that narrative and let people know
Speaker 2: that yes, jcpenny is here and we've got six hundred
Speaker 2: and fifty stores across the country.
Speaker 5: How do you do it?
Speaker 16: Well, that's actually part of so you mentioned that we
Speaker 16: just announced an over a billion dollar investment back into
Speaker 16: the business, and that that investment is focused on remodeling
Speaker 16: our stores and reinvesting in the store platform, putting new technology,
Speaker 16: a new point of sale, in in revitalizing our online
Speaker 16: shopping experience and really improving THEJCP dot com shopping experience,
Speaker 16: and then also our supply chain. But I would say
Speaker 16: we're a retailer, and so it all really starts out
Speaker 16: with product. And over the last couple of years, what
Speaker 16: we've done is reintroduce over twenty five of our brands,
Speaker 16: Brands like Stafford that ever customer knows and loves, and
Speaker 16: a lot of customers grew up with brands like Liz
Speaker 16: Clayborn and brands like Cooks in our homes, in our
Speaker 16: home area, and so we've reintroduced that product. And now
Speaker 16: what we're investing in also along with that a billion
Speaker 16: dollars is what we're calling a brand reinvigoration that is
Speaker 16: centered around really helping our customers make it count. And
Speaker 16: when we look at our customer, I set our customers
Speaker 16: the core of America. It's the school teachers that teach
Speaker 16: our children it's the construction workers that build our homes
Speaker 16: in the buildings we work in. It's medical workers who
Speaker 16: take care of our families. And that customer is looking
Speaker 16: for a sense of belonging there, looking for a place
Speaker 16: where they can find accessible fashion that they can still
Speaker 16: get at a great value, because that customer is making
Speaker 16: trade of us every day in their life. And so
Speaker 16: what we're introducing also is a campaign to reinvigorate the brand,
Speaker 16: centering around how we help our customers make every moment
Speaker 16: in their lives, whether it's a big moment like their
Speaker 16: daughter's wedding, or whether it's a smaller moment like getting
Speaker 16: their kids ready for school in the morning. But how
Speaker 16: do they use the products that we have at jcpenny
Speaker 16: to make that count but be able to make account
Speaker 16: but still have money left to put breakfast on the
Speaker 16: table for the kids.
Speaker 11: Hey, Mark, whenever you're talking about middle income shoppers, and
Speaker 11: especially with this inflation dynamic, how do you sort of
Speaker 11: view that as far as how to get shoppers back
Speaker 11: in when they are trying to figure out where to
Speaker 11: sort of shift their spending.
Speaker 16: At this point, right inflation is an issue for our customer.
Speaker 16: We look right now, we see that our customer is
Speaker 16: spending over seven hundred dollars a month more just for
Speaker 16: rent or mortgage, for groceries, for gas, and that means
Speaker 16: that every dollar is even more important to them, and
Speaker 16: it's more important that they make every dollar count. And
Speaker 16: that's really what we're here for is to help them
Speaker 16: do that. And I think the unique thing that we
Speaker 16: can bring to the table is we can bring great
Speaker 16: fashion and great product at a really accessible price to
Speaker 16: our customers. And that's what they're that's what they need,
Speaker 16: that's what they're looking for right now in their lives.
Speaker 11: When you talk about technology upgrades to some of these stores,
Speaker 11: kind of build on that. What more specifically are.
Speaker 5: You doing.
Speaker 16: Within the stores. It's a lot of it's mobile and
Speaker 16: it's point of sale or checkout technology. So we'll be
Speaker 16: within the stores centralizing the checkout, but we'll also be
Speaker 16: putting in the hand of hands of all of our
Speaker 16: associates in the stores mobile devices that will help them
Speaker 16: manage inventory better. It'll help them ship and fulfill online orders,
Speaker 16: it'll help them check inventory and order online. For a
Speaker 16: customer or I've talked about centralized checkout, what it really
Speaker 16: will do is move check out anywhere so that they
Speaker 16: can mobile check out a customer anywhere in the store.
Speaker 2: Sales of over eight billion dollars. Where do more sales
Speaker 2: happen right now at the six hundred fifty stores across
Speaker 2: the country or jcpenny dot com.
Speaker 16: So it's about a seventy thirty split with stores the
Speaker 16: seventy percent and with the online business about thirty.
Speaker 2: And where are you more bullish?
Speaker 16: So both are actually growing, and we're focused on growing both.
Speaker 16: But I do believe that right now we've done a
Speaker 16: significant amount of of reimagining our online experience and investing
Speaker 16: in JCP dot com, and we think there's significant growth there.
Speaker 2: So do you think that it is it growing at
Speaker 2: a faster rate in like yell eclips store sales with
Speaker 2: JCP dot com in a number.
Speaker 16: Of years, the JCP dot com business is growing faster
Speaker 16: than the store business. I don't believe that it's ever
Speaker 16: going to eat clips. I think you could reach, like,
Speaker 16: you know, a forty sixty point or something like that.
Speaker 16: But the reality is what we're seeing is that customers
Speaker 16: still want to shop in stores. They still want to
Speaker 16: come in, they want to have that try and experience,
Speaker 16: they want to get help from an associate to put
Speaker 16: together an outfit, and in important areas like we reintroduce beauty,
Speaker 16: a customer is looking to come in and get help
Speaker 16: and try product.
Speaker 11: When you look at this portfolio, whether it's fashion, apparel, home,
Speaker 11: beauty as well as jewelry, where are you seeing spending
Speaker 11: the strongest and where do you see people pulling back
Speaker 11: the most.
Speaker 16: It's interesting because if we look across the business, we're
Speaker 16: really pleased with the growth that we've seen in our
Speaker 16: home business and in our men and women's apparel business,
Speaker 16: and we believe we've gained share in all of those
Speaker 16: areas because customers are spending there. Our jewelry business is
Speaker 16: another one that continues to be really strong right now.
Speaker 16: I think rather than seeing people reduce spending in particular areas,
Speaker 16: we're actually seeing that within an area, they're being a
Speaker 16: little bit more selective about what they're choosing, and we
Speaker 16: are seeing some more growth come from some of our
Speaker 16: private label brands. For example, in home, we're seeing products
Speaker 16: like Cooks, which is a private label opening price point,
Speaker 16: small small appliance think like blenders and toasters and things
Speaker 16: like that, and cookwear. We're seeing customers choose that product
Speaker 16: in some cases because they realize it's great value and
Speaker 16: they can save money by going for that product.
Speaker 2: So are you going to stay a private company forever?
Speaker 2: Is there an IPO on the horizon.
Speaker 16: So right now we're really actually focused on just driving sustainable,
Speaker 16: profitable customer growth within the business and we're very fortunate
Speaker 16: that we have an ownership group that is aligned with
Speaker 16: doing that and focused on the long term. And right
Speaker 16: now the focus is building that relationship with customers, driving
Speaker 16: customers back to the brand, and then we'll see where
Speaker 16: it goes from there.
Speaker 2: That was Mark Rosen, CEO of j C.
Speaker 9: Penny.
Speaker 2: You're listening to Bloomberg business Week coming up, we stick
Speaker 2: with the retail theme and examine how AI is increasingly
Speaker 2: becoming part of the shopping experience.
Speaker 13: That's what lily Ai does. We are using AI to
Speaker 13: bridge the gap between retailers speak and consumers speak in retail,
Speaker 13: and this is the perfect type of problem that AI
Speaker 13: can come in and help solve. To understand the language
Speaker 13: of the consumer, use AI to extract those attributes out
Speaker 13: of the images of the product catalog and then help
Speaker 13: the consumer experiences.
Speaker 2: The CEO of lily Ai breaks down her company's unique
Speaker 2: data driven tools designed to help streamline product discovery in
Speaker 2: the world of e commerce. This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on
Speaker 1: Bloomberg dot com, the iHeartRadio app and the Bloomberg Business App,
Speaker 1: or watch us live on YouTube.
Speaker 2: Tim Stanibek with Bloomberg'sjess Mattin. Who's in for Carol and Jess.
Speaker 2: We've got yet another use for everybody's favorite type of tech.
Speaker 11: So the hype in artificial intelligence, as we know is everywhere.
Speaker 11: But what about when it comes to the intersection of
Speaker 11: AI and retailers. Well, there is a company that is
Speaker 11: powered by AI that is aiming to bridge that gap
Speaker 11: and makes selling easier for companies, especially when you're talking
Speaker 11: about Bloomingdale's, Macy's, the gap back to school purchases obviously
Speaker 11: starting up right now and then also ahead of the
Speaker 11: holiday shopping season. Joining us now is Perva Gupta, co
Speaker 11: founder and chief executive officer at Lilyai, joining us on
Speaker 11: Zoom from Palo Alto, California. Thank you so much for
Speaker 11: joining us. Talk to us about what your company is
Speaker 11: and what you do. Just to set the scene here.
Speaker 13: My company is called lily Ai. We are working with
Speaker 13: some of the largest brands and retailers. But let me
Speaker 13: ask you a question. I'm sure you shop online all
Speaker 13: the time and I've gone through an experience when you're
Speaker 13: looking for something as simple as a navy blue sweatshirt
Speaker 13: and you are getting no results, or you're getting even
Speaker 13: worse red lipsticks and slippers. It's not that they don't
Speaker 13: have navy blue sweatshirts, but the reason why that's happening
Speaker 13: is because the way that the products are described at
Speaker 13: retailers are in the language of midnight French terry at
Speaker 13: leisure like. That's why you're not finding it because it's
Speaker 13: not called navy blue sweatshirt. It's not labeled in the
Speaker 13: language that us as consumers use, and so that's what
Speaker 13: lily ai does. We are using AI to bridge the
Speaker 13: gap between retailers speak and consumers speak in retail and
Speaker 13: this is the perfect type of problem that AI can
Speaker 13: come in and help solve. To understand the language of
Speaker 13: the consumer, use AI to extract those attributes out of
Speaker 13: the images of the product catalog and then help the
Speaker 13: consumer experiences.
Speaker 2: Okay, so you got to explain to me, like I'm
Speaker 2: a five year old, how AI is being used here
Speaker 2: and how it's training itself. It's retraining itself. Take us
Speaker 2: through the basics.
Speaker 13: AI is being used for years now. It literally started
Speaker 13: in nineteen fifties, and fundamentally AI is when machines are
Speaker 13: mimicking human intelligence, right and recently, generative AI is all
Speaker 13: the hype everybody's heart of chat GPD. That's one type
Speaker 13: of AI. There are so many other types of AI
Speaker 13: like computer vision, natural language processing, all of those types
Speaker 13: of things. And so now coming back to your question
Speaker 13: around how we use AI, we have basically built we
Speaker 13: use a type of AI called discriminative AI where we
Speaker 13: have created a lot of clean training data where merchants
Speaker 13: on our team over the last few years have manually
Speaker 13: labeled all of the products and added a lot of
Speaker 13: the language of the consumer on every single product.
Speaker 11: How long does it take to do that kind of process?
Speaker 13: Seems very painful. It's a very very difficult process where
Speaker 13: you almost have to create the definitions in fashion in
Speaker 13: a very very clean mathematical way, where our merchants know
Speaker 13: the difference between boho and boho chic for example. Right,
Speaker 13: it needs to be really really clean data for AI
Speaker 13: to understand all of the different types of language that
Speaker 13: our consumers use or just over our consumers use. And
Speaker 13: so it's it's not an easy thing. It's a very
Speaker 13: very difficult labors process that we've gone through to be
Speaker 13: able to create all this clean training data which we
Speaker 13: then fed to our AI engines which now which are
Speaker 13: now doing a really good job of predicting all of
Speaker 13: these attributes on these products, which is basically the images.
Speaker 13: So in short, we have built the technology that can
Speaker 13: extract attributes in the language that consumers understand out of images.
Speaker 2: That was perfect good to a co founder and CEO
Speaker 2: at LILYAI. And that wraps up the weekend edition of
Speaker 2: Bloomberg Business Week from Bloomberg Radio. Thanks so much for
Speaker 2: joining us. Be sure to tune into Bloomberg Business Week
Speaker 2: Monday through Friday starting at three pm Wall Street Time
Speaker 2: on Bloomberg Radio and on Sirius XM channel one nineteen.
Speaker 2: You can also watch your daily broadcast on YouTube just
Speaker 2: search Bloomberg Global News and we're simulcast on Bloomberg Originals
Speaker 2: available at Bloomberg dot com Slash Originals and streaming platforms
Speaker 2: like Roku, Amazon, fireTV, Samsung TV Plus and more. Find
Speaker 2: our Bloomberg BusinessWeek podcast at Bloomberg dot com, Apple, or
Speaker 2: wherever you get your podcasts. The latest edition of the
Speaker 2: magazine is available on newsstands now, at Bloomberg dot com
Speaker 2: and always on the Bloomberg Terminal. Have a good and
Speaker 2: safe weekend everyone. For Jess Matton and Simone Foxman. I'm
Speaker 2: Tim Stenovic. Stay with us. Today's top stories and global
Speaker 2: business headlines are coming up right now.
Speaker 1: This is the Bloomberg Business Week Podcast. I'll a little
Speaker 1: on Apple, Spotify, and anywhere else you get your podcast.
Speaker 1: Listen live weekday afternoons from three to six Eastern on
Speaker 1: Bloomberg dot com, the iHeartRadio app, tune In, and the
Speaker 1: Bloomberg Business App. You can also watch us live every
Speaker 1: weekday on YouTube and always on the Bloomberg Terminal.