Speaker 1: From Mahard. We're Innovations, Money and Power Collie in Silicon
Speaker 1: Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow
Speaker 2: and Karen hide A Bloomberg's World headquarters in New York,
Speaker 2: and Ludlow is off on a well earned vacation as
Speaker 2: a Bloomberg Technology Coming up, TikTok banned in Montana. It
Speaker 2: marks the first US state to sign a law banning
Speaker 2: the social media app across all phones. Will discuss the
Speaker 2: legal and logistical implications of the move past. In today's
Speaker 2: VC Spotlight, we speak with a speak with an early
Speaker 2: AI investor, Serilgo, the founder at VC firm Conviction and
Speaker 2: former general partner at Graylock, and we bring you all
Speaker 2: the tech stocks. Moving on earnings, we take a deep
Speaker 2: dive into Ali Barbara as the e commerce grant pans
Speaker 2: as spinoff for its club business.
Speaker 3: And much more.
Speaker 2: First, let's check in on these public markets, because once
Speaker 2: again there's real risk on sentiment around the Nasdaq. We're
Speaker 2: off more than a percentage point at the moment to
Speaker 2: the races one hundred and thirty four points to the upside.
Speaker 2: Maybe a bit of a relief, it seems as though
Speaker 2: maybe that debt ceiling debarcle. We're inching closer to some
Speaker 2: sort of respite to that with. Of course, though, have
Speaker 2: a strong jobs number coming out, and that is what's
Speaker 2: affecting the two year yield up some five six basis points.
Speaker 2: We're still thinking about whether the Federal Reserve really has
Speaker 2: to curtail the overall strength of the economy, the inflation
Speaker 2: some FED speak speaking to that today, we're looking at
Speaker 2: Bitcoin currently off by nine tens and percent. That's because
Speaker 2: basically every single currency pair in FX is also down
Speaker 2: versus the US dollars. We think about where the Federal
Speaker 2: Reserve has to go, let's move it on. It's like
Speaker 2: at some individual movers because ED is out, I'm going
Speaker 2: to play on the micro today. Cisco off by three
Speaker 2: tens percent as they really show some of the draw
Speaker 2: down in spending. Remember this is the company that provides
Speaker 2: equipment for basically networking all our Internet access, and they're
Speaker 2: seeing more than a twenty percent drop in recent business.
Speaker 2: We're seeing Ali Barbar also off by four percent. Doesn't
Speaker 2: manage to ignite that optimist particularly after the reopening of China.
Speaker 2: To a certain degree, they're not managing harnessing that growth,
Speaker 2: particularly in the cloud area, even as we get more
Speaker 2: detail on where they will spin off the groceries unit
Speaker 2: the cloud business as well. We'll dig into that later
Speaker 2: in the show. Netflix interesting look at this rally up
Speaker 2: basically to ten percent. We know why they gave us
Speaker 2: some evidence of the growth that they're seeing in the
Speaker 2: advertising part of the model. They're going out to upfronts
Speaker 2: for the first ever time, basically where they pitch to
Speaker 2: advertise as the where's the content they're coming and people
Speaker 2: really liked what they heard. Relief were up almost ten percent. Meanwhile, though,
Speaker 2: let's really dig into what is the top news agenda
Speaker 2: today in terms of tech. TikTok now officially from January
Speaker 2: first band in Montana setting up a legal battle in
Speaker 2: the state, and the social media company is already facing
Speaker 2: some heavy scrutiny from the United States more broadly in
Speaker 2: terms of its lawmakers joining us some more bluemegs, Alex Borinka,
Speaker 2: and just first dig in on what Montana has said,
Speaker 2: this is going to be incredibly difficult to.
Speaker 4: Enforce, incredibly difficult to enforce. So Montana has said governor
Speaker 4: signed into law a bill that would basically restrict or,
Speaker 4: they say, restrict use of the app, but the owners
Speaker 4: would actually be on TikTok and the app stoor so Google,
Speaker 4: Apple app stores, who would, as they say, be fined
Speaker 4: ten thousand dollars a day for every day that TikTok
Speaker 4: is made available. But it's really unclear from this bill
Speaker 4: how they're actually going to enforce it, and certainly, Caroline
Speaker 4: this bill will face a legal battle. This is a
Speaker 4: state basically kind of making a decision to limit an
Speaker 4: app only within its borders, while the federal government itself
Speaker 4: has been looking at it. But something like this is
Speaker 4: pretty unprecedented. The company has told us that this is
Speaker 4: a regulation on a free speech they have pushed back
Speaker 4: on it. We've actually already seen a group of creators too,
Speaker 4: because this bill was signed in the late hours of
Speaker 4: last night. So certainly a really interesting move by some
Speaker 4: who are pro banning TikTok would say, good job Governor
Speaker 4: of Montana for restricting this on national security concerns. But
Speaker 4: critics of this bill would probably say, hey, why is
Speaker 4: this state kind of getting involved in what should be
Speaker 4: a federal move.
Speaker 2: And maybe this puts the onus back on a federal
Speaker 2: move Alex, but remind us the ways in which TikTok
Speaker 2: has tried to alleviate concerns from a national security perspective
Speaker 2: is by saying, look, we're working with Oracle, We're ensuring
Speaker 2: that the data is in any way being accessed by China.
Speaker 2: Just tell us you did some really deep dive analysis
Speaker 2: on what that deal is with Oracle in the moment.
Speaker 4: Right a callig and I wrote about where it stands
Speaker 4: this deal called Project Texas. Basically, TikTok has put Oracle
Speaker 4: up as this American partner who's going to wall off
Speaker 4: the data for US users to alleviate national security concerns,
Speaker 4: and that process has already started. But what we broke
Speaker 4: this morning is that a large chunk of the really
Speaker 4: ambitious work of Oracle actually reviewing TikTok's code, which is
Speaker 4: pretty unprecedented and being the entity that submits the app
Speaker 4: to the app stores, that work has not yet started,
Speaker 4: even though TikTok has eluded that it has. This is
Speaker 4: all according to a person familiar, and Oracle will not
Speaker 4: start that work unless there's a final agreement in place
Speaker 4: that the government has signed off on. You'll recall there
Speaker 4: is a national security review going on. It's an interagency
Speaker 4: review in DC, and that has stalled because the Justice
Speaker 4: Department has not been happy. So without that moving forward,
Speaker 4: without a final sealed, done dusted, US stamped proposal in
Speaker 4: place or legislation that forces some kind of move, oracle
Speaker 4: will not start doing that really in depth work that
Speaker 4: TikTok has really used to say, Hey, look your stuff
Speaker 4: is safe because we have an American partner actually making
Speaker 4: sure there's no backdoors here for the Chinese government.
Speaker 2: Fascinating. Alex Blerinka, thank you for bringing us the latest.
Speaker 2: It's great reporting and the breaking of that NEUS today.
Speaker 2: Go read it on the terminal and on dot com. Mean, well,
Speaker 2: we've got to dig a little deeper here, Kyl Zavos
Speaker 2: with us. He's George Mason, Professor of the Internet Law
Speaker 2: and also vice president and general council at net Choice.
Speaker 2: Now that's a lobbying group aimed at making the Internet
Speaker 2: safe for free enterprise and free expression. So and hazard
Speaker 2: a guess here, Carl that you're pretty anti what we're
Speaker 2: hearing from the governor and Montanamo broadly today. Yeah, thanks
Speaker 2: for having me on.
Speaker 5: This is something that should scare all of us, because
Speaker 5: this is exactly what we don't want the government to
Speaker 5: do and what the government can't do. It can't decide
Speaker 5: what websites we can visit and what apps we can download.
Speaker 5: Imagine if this government of Montana came out and said
Speaker 5: you can no longer go to Bloomberg dot com. Of
Speaker 5: course everyone would be apoplectic. But that's exactly what we're
Speaker 5: seeing here with TikTok. At the end of the day,
Speaker 5: what we are ultimately going to see is a legal
Speaker 5: challenge on this because this is a clear violation of
Speaker 5: the First Amendment. The government can't ban speech, which is
Speaker 5: exactly what this is. Simultaneously is a clear violation and
Speaker 5: of something called a bill of attainer. It's a legal
Speaker 5: term that we use rarely where you can't criminalize an individual,
Speaker 5: and that's exactly what you're seeing here. So this is
Speaker 5: a slammed don case of unconstitution. But more importantly, it's
Speaker 5: a dangerous precedent against free speech, free expression, and free
Speaker 5: enterprise in the freest nation in the world.
Speaker 2: Remind us why thus far they've been able to ban
Speaker 2: them on government phones.
Speaker 5: Yeah, the bands on government phones. I actually don't have
Speaker 5: any issue with. I'm an employer many employers are watching
Speaker 5: this program right now, and we all have rules and
Speaker 5: restrictions on what our employees can and cannot do on
Speaker 5: their own company devices, and we can say, well, you
Speaker 5: can't go to this website, you can't unload that app,
Speaker 5: And so the government is perfectly free to do that
Speaker 5: for their own employees, federal employees, state employees, local employees.
Speaker 5: In fact, as a taxpayer, I don't see any reason
Speaker 5: why government employees should have TikTok on their government devices,
Speaker 5: because when I'm paying their salaries as a taxpayer, I
Speaker 5: expect them to be working, not producing TikTok videos, not
Speaker 5: watching entertainment videos. So that's why the government can do
Speaker 5: it on their own devices. But it is very different
Speaker 5: from the government then coming and telling me, telling you,
Speaker 5: telling everyone else out there what websites they can visit
Speaker 5: and what apps they can download on their own personal devices.
Speaker 2: So, as you say, and you've come out saying this
Speaker 2: is unconstitutional, TikTok has come out saying that it's against
Speaker 2: free speech. Legal arguments abound, but it does put the
Speaker 2: owners back on the federal government. And what is currently
Speaker 2: being debated by the administration to either ensure that national
Speaker 2: security is preserved or indeed courtail TikTok within the United States.
Speaker 2: More broadly, is there any way that the federal government
Speaker 2: could anactis do you think.
Speaker 5: The thing at the federal level is TikTok is kind
Speaker 5: of a distraction, it's fig leaf. A lot of lawmakers
Speaker 5: don't want to have an important, necessary discussion on the
Speaker 5: US dependency on China, national security, cybersecurity, or privacy. But
Speaker 5: there is legislation today before Congress that they could look
Speaker 5: to do. They could create a national standard on cybersecurity,
Speaker 5: they could look to create a national standard on privacy laws.
Speaker 5: And what this will do is it will protect all
Speaker 5: Americans regardless of whether an attack is coming from outside
Speaker 5: the US or from within. Let's remember some of the
Speaker 5: biggest data breaches in US history came from inside the US,
Speaker 5: whether it's solar winds in Texas, whether it is the
Speaker 5: hack last month of the health information of members of Congress,
Speaker 5: or whether it was a government employee deciding to dump
Speaker 5: all of our secrets about Ukraine under the Internet to
Speaker 5: impress their friends. So we need to harden our critical
Speaker 5: infrastructure regardless and focusing on one business, one entity, one
Speaker 5: nation distracts us from the important work that Congress must
Speaker 5: do to harden these critical infrastructures and make us all safe.
Speaker 2: More broadly, when you're looking abroad at what's occurring, we
Speaker 2: are seeing other countries UK, for example, also banning on
Speaker 2: government devices. Is there anywhere that is thinking that they
Speaker 2: have to curtail certain social media apps because in this,
Speaker 2: of course discussion that's been leveled by Montana, they don't
Speaker 2: just mention TikTok, they also mention other bytedn BITEDOWNCE owned apps,
Speaker 2: capcut Lemonade, but also there's Telegram, which they sort of
Speaker 2: for see having a link to Russia.
Speaker 5: So there is certainly one nation that is in the
Speaker 5: business of deciding what websites and what apps it citizens
Speaker 5: can use, and that's China. They have the Great Firewall
Speaker 5: where if the CCP doesn't like what you're saying, the
Speaker 5: citizens can't see it. It's a horrible model for the
Speaker 5: rest of the world. It is the antithesis of what
Speaker 5: America stands for. So I expect the US to lead
Speaker 5: the way to reject bands on speech, reject bands on apps,
Speaker 5: and push the notion that citizens and free people should
Speaker 5: be able to decide what is or is not appropriate
Speaker 5: for them, because at the end of the day, if
Speaker 5: I have concerns about TikTok, I just don't.
Speaker 2: I just won't use it. I'll use something else.
Speaker 5: And that's the freedom of choice. That's the freedom that
Speaker 5: we have here in America, and unfortunately, in Montana, that
Speaker 5: freedom is being taken away from its citizens.
Speaker 2: Very briefly, of course, your associate association members are TikTok,
Speaker 2: but they also Amazon, Airbnb, etc. Meta a number do
Speaker 2: your association members currently feel that regulation in the US
Speaker 2: is working for them or against them?
Speaker 5: You know, across the board, Netchoice is out there fighting
Speaker 5: every single day to plow the field for free expression,
Speaker 5: free enterprise, and we are all behind the notion of
Speaker 5: creating a national standard on things like privacy law or
Speaker 5: cybersecurity law because at the end of the day, what
Speaker 5: that will do is secure Americans and more importantly, it
Speaker 5: will make it easier for Americans to know how their
Speaker 5: privacy is treated, how their data is treated, and for
Speaker 5: businesses out there, it gives them a simple, easy, one
Speaker 5: standard to follow, which drives down costs of compliance and
Speaker 5: makes it easier to spend that money on innovation. We
Speaker 5: need innovation at the speed of technology. Not at the
Speaker 5: speed of government. And that's what we all agree on, and.
Speaker 2: It would say that as we look at AI and
Speaker 2: plan the other things being discussed. Kul so Bo great
Speaker 2: To has some time with the George Mason, Professor of
Speaker 2: Internet Law and of course of net choice.
Speaker 6: This uniquely American innovation ecosystem is still the world's envy,
Speaker 6: and I want us to make it stronger. I've never
Speaker 6: seen rapid gains that we're seeing now with frontier language models.
Speaker 6: As fast we lead, the world is trying to catch up.
Speaker 6: We're still ahead. Let's continue.
Speaker 2: Of course you recognize him. Former Google CEO there, Eric Schmidt,
Speaker 2: testifying a house hearing yesterday which fun Love was focused
Speaker 2: on China's embrace of AI for warfare. He also warned that, look,
Speaker 2: while the US still has an edge in the key
Speaker 2: areas like AI and quantum computing, China is likely having
Speaker 2: more people working on strategic AI and advises that the
Speaker 2: US must redesign its military to respond to that threat.
Speaker 2: Let's talk more broadly about artificial intelligence, about what feels
Speaker 2: like a race, whether it's between US and China, or
Speaker 2: indeed company versus company here within the United States as well,
Speaker 2: particularly when it comes to generative AI. Zerogo, Perfect Voice,
Speaker 2: founder of Conviction. It's an AI focused VC firm built
Speaker 2: to serve software three point zero companies as you call them,
Speaker 2: And of course you've got a long history with gray
Speaker 2: Lock and sitting on plenty of boards there. I'm interested
Speaker 2: at the moment as to where you're seeing the most
Speaker 2: value being attributed to AI companies.
Speaker 7: Thanks for having me. We are very early in the
Speaker 7: AI revolution, and I think it's a very general technology.
Speaker 7: It's huge potential to improve people's lives and productivity and
Speaker 7: contribute to complex problems in climate and education and science.
Speaker 2: In the near term.
Speaker 7: Some of the areas we're seeing the most immediate value
Speaker 7: include democratization of creative capabilities, so giving everyone the ability
Speaker 7: to generate image and voice and video where you used
Speaker 7: to need to develop creative skills. And trying to give
Speaker 7: experts leverage. So think of companies that enable lawyers to
Speaker 7: do their work more quickly, or data scientists to leverage
Speaker 7: their work for a broader business audience. So we've invested
Speaker 7: in companies like Seek and Harvey.
Speaker 2: In this vein, we're looking at some of your portfolio
Speaker 2: companies there more broadly, and there is of course, the
Speaker 2: minute you start to say leveling the playing field, democratization,
Speaker 2: when it comes to image to voice, copyright concerns come
Speaker 2: to the full How are you seeing the founders that
Speaker 2: you're working with really get ahead of the curve of
Speaker 2: where regulation could come.
Speaker 4: Yeah.
Speaker 7: Absolutely, I think there's a series of tricky issues that
Speaker 7: companies playing in this field need to consider, and that
Speaker 7: includes copyright, includes disinformation, and it includes abuse of these
Speaker 7: technologies by malicious actors, as you'll see with every technology
Speaker 7: tool like the Internet, of course, and so we expect
Speaker 7: when we invest in companies means for founders to think
Speaker 7: about these issues from a responsible AI perspective from the
Speaker 7: very beginning.
Speaker 2: And it's interesting, of course you've been someone who thought
Speaker 2: a lot about Web three and indeed the democratization of
Speaker 2: finance in that way, crypto immediately comes to mind. Some
Speaker 2: people are trying to compare and contrast the way in
Speaker 2: which the AI ecosystem is looking to get ahead of
Speaker 2: regulation or lead start asking for it sooner visa the cryptosphere.
Speaker 2: But is that our own naivety to realize how AI
Speaker 2: has been being built, you know, for decades a lot
Speaker 2: of these big companies and certainly the startups as well.
Speaker 2: We all suddenly feel like it's brand new and shiny
Speaker 2: because we're now touching it as a consumer. But are
Speaker 2: we behind the curve when it comes to regulation or
Speaker 2: we're managing to be at a better pace this time.
Speaker 7: So this may not be a very popular view, but
Speaker 7: I think we actually need to be going faster on
Speaker 7: the regulatory front. That doesn't necessarily mean licensing, for example,
Speaker 7: to train models. I'd be cautious about cementing the concentration
Speaker 7: of power to the few organizations today in allowing them
Speaker 7: to decide who has access. But in terms of the
Speaker 7: governance questions that come about when you have a technology
Speaker 7: that is so general progressing at a rapid speed, that
Speaker 7: justifies anxiety, and it should justify investment from both the
Speaker 7: private sector and academia and policy makers to understand and
Speaker 7: get ahead of the changes that will come in society.
Speaker 7: So I think we're going to need very strong partnership
Speaker 7: between industry and policymakers to reap the benefits of AI
Speaker 7: and mitigate some of the concerns. And we're committed to
Speaker 7: engaging to inform and contribute to that process.
Speaker 2: Yeah, how are you contributing? Do you feel the administration
Speaker 2: and those in power off speaking with the right people
Speaker 2: within this field.
Speaker 7: I think there is a rapid acceleration of engagement from
Speaker 7: both sides over the last few months, and so we've
Speaker 7: been participants in that these are complex issues, right, Managing
Speaker 7: the misuse of AI is something that must be a
Speaker 7: arrived at through an inclusive and democratic process. And it's
Speaker 7: hard because it's also technical, right, if people are hurting
Speaker 7: a lot. But I do think there's an opportunity for
Speaker 7: perhaps pro technology policy making that is, for lack of
Speaker 7: a better term, not just defensive right, protecting against against
Speaker 7: some of the issues that we discussed, but also really
Speaker 7: goes on the offensive, right in that you just showed
Speaker 7: a clip from Eric Schmidt. I think that this is
Speaker 7: relevant from a national security perspective, relevant from a sort
Speaker 7: of economic stability perspective, and also relevant in that, you know,
Speaker 7: be a real shame if some of the sort of
Speaker 7: more ambitious applications of AI in for example, science or
Speaker 7: education were not reached because we didn't get regulation right.
Speaker 7: I'm very excited about there are some companies in our
Speaker 7: portfolio that are in small ways today already contributing to that.
Speaker 7: We have a company called co Rise that uses AI
Speaker 7: to reduce the cost of reskilling for workers, And so
Speaker 7: I think there are a lot of benefits that we
Speaker 7: also want to support here.
Speaker 2: Yeah, where do you fall on that general optimism pessimism
Speaker 2: viewpoint on whether this can ultimately be beneficial to society
Speaker 2: from a we will get more time to do more
Speaker 2: impactful work or is there a worry that jobs will
Speaker 2: be reduced and people won't be reskilled at the rate
Speaker 2: that they need to be.
Speaker 7: Yeah, I think it would be intellectually dishonest for a
Speaker 7: technologist working in this field to not have that worry, right,
Speaker 7: And so you know, I founded the firm because I
Speaker 7: believe it AI is a technology of abundance, but that
Speaker 7: won't happen the distribution of that abundance will not happen automatically, right,
Speaker 7: And so this is why I think there's a real
Speaker 7: room for you know, nuanced policy making here. And so
Speaker 7: the technology is only good as good as the guardrails
Speaker 7: we give it. But I think like the magic of
Speaker 7: the American innovation system is like technology drives wealth creation
Speaker 7: every There are so many things that are much cheaper
Speaker 7: for everyday Americans than they were ten years ago. Because
Speaker 7: of advancements in productivity and technology, and like one of
Speaker 7: my greatest hopes for the AI revolution is that a
Speaker 7: few of the fields that have been quite resistant to
Speaker 7: decreasing in class, like health and education, we can make
Speaker 7: some inpotes.
Speaker 2: On Sarah, I wish I could speak too much longer.
Speaker 2: And of course you've got a great podcast we can
Speaker 2: listen to you, founder of Conviction. We thank you for
Speaker 2: your time today. Meanwhile, coming up, the UK's biggest telecom
Speaker 2: operator is planning to cut tens of thousands of jobs
Speaker 2: by twenty thirty. Well digain. Meanwhile, let's just check in
Speaker 2: on Micron. You might have seen the story scoop here
Speaker 2: every body, but we're receiving about one and a half
Speaker 2: billion dollars in financial incentives from the Japanese government because
Speaker 2: all about helping to make the next generation of memory
Speaker 2: hips in that country. This is about global supply chain
Speaker 2: and ensuring that it's closer to home. For many from
Speaker 2: New York, there is a Bloomberg Welcome back to Blueberg Technology.
Speaker 2: I'm Caroline Hied in New York. Now, let's get a
Speaker 2: check on these markets. Halfway through the trading day. We're
Speaker 2: currently seeing actually some more buoyant signs, particularly in big tech.
Speaker 2: Once again, we're up more than a percentage point in
Speaker 2: the moment in terms of the Nasdaq. Some big tech
Speaker 2: on top will dive into the individual moves in a moment,
Speaker 2: but maybe some anxiety draining out when it comes to
Speaker 2: the debt relief and the debt ceiling debarcle that seems
Speaker 2: to be spiraling towards us. That Lexie anxiety is dialing
Speaker 2: back a little bit, maybe closer to the end as
Speaker 2: we hope, and currently also seeing the jobless claims coming
Speaker 2: in strong. The overall resilience of this US economy means,
Speaker 2: but it also means inflatory pressure is there. It also
Speaker 2: means the US dollar is going higher as the Federal
Speaker 2: Reserve might just have to keep on thinking about tightening
Speaker 2: its grip on inflation. We're looking at Bitcoin off by
Speaker 2: more than a percentage point as the dollar rises. Turn
Speaker 2: your attention though to some individual names, because I do
Speaker 2: want to look at some of the higher siders in
Speaker 2: video up three point eight percent. Again, this company just
Speaker 2: continues to benefit from of course the ai A law,
Speaker 2: but also remember it's still bringing us new GPUs and
Speaker 2: some of its new trips are going to be serving
Speaker 2: the gaming community in particular people liking that Apple up
Speaker 2: more than nine tenser percent. I'm thinking of gaming. We
Speaker 2: think about that mixed reality headset. We're expecting that June fifth,
Speaker 2: We're going to dig into that with Mark Germ and Cisco. Though,
Speaker 2: on the downside, and one of the biggest point drags
Speaker 2: on the overall NASDAC today. We know why they of
Speaker 2: course seeing lackluster orders for some of their equipment of late.
Speaker 2: Let's talk about other perhaps lackluster areas when it comes
Speaker 2: to earnings and Ali Barbar are really not managing to
Speaker 2: show much strength. It's shown in fact weak at e
Speaker 2: commerce sales and perhaps have been expected. We're down by
Speaker 2: four point eight almost five percent on the ADRs. Here
Speaker 2: how the company has been approving, how it's basically restructure itself,
Speaker 2: particularly spin off of its cloud services division. Please to
Speaker 2: say MATCHI, MATCHI Today, Thursday is the day to where
Speaker 2: plum is One Isabelle Lee, and please to say that
Speaker 2: we've got the memo. Uh, talk to me a little
Speaker 2: bit about what's happening in terms of these earnings, because
Speaker 2: it looks as though we thought China's reopening was gonna
Speaker 2: galvanize and revenue is up a bit, but not enough.
Speaker 8: Yeah, so shares are tanking and investors are really unhappy
Speaker 8: because they thought this is the quarter that, you know,
Speaker 8: after China was closed for several years, it's a big reopening.
Speaker 8: We're going to bank on this and we're going to
Speaker 8: see growth. But it was a bit disappointing. So a
Speaker 8: couple of takeaways. Quarterly sales miss estimates. That's due to
Speaker 8: a shrinking commerce business. We also have cloud revenue declined
Speaker 8: for the first time on record, and that's a big
Speaker 8: deal because Ali Baba Cloud is the largest cloud provider
Speaker 8: in China.
Speaker 2: It's a multi billion business.
Speaker 8: And of course the bread and butter, which is a
Speaker 8: customer management fees that also shrank for the fourth straight quarter.
Speaker 8: So that's really of a China reopening have gone south
Speaker 8: because we've found the Chinese consumers have preferred eating out,
Speaker 8: going on trips, going to karaoka rooms, and seeing their
Speaker 8: hearts out rather than shopping online, which they have been
Speaker 8: doing for the past two years when they were stuck at.
Speaker 2: Home, like us, a little bit more into their experiences
Speaker 2: at the moment, what about the disrestructuring any people holding
Speaker 2: their breath for really the details coming from Jane Ziyng
Speaker 2: here and well, the focus is on the cloud right
Speaker 2: and the spin off their roll of and some of
Speaker 2: the other logistics businesses.
Speaker 8: So many people were really looking at these earnings halls
Speaker 8: because that's what they wanted to do. In fact, some
Speaker 8: were saying that this is what we care more about
Speaker 8: rather than the earnings, because it's the future. It's a
Speaker 8: historic change. It's been around seven weeks since this was
Speaker 8: announced and a lot of people are speculating this is
Speaker 8: of course with the approval of the Chinese government or
Speaker 8: with their blessing and some takeaways. They did give some
Speaker 8: details which made a lot of people happy. Look, for instance,
Speaker 8: Cloudnesses to your point, it's going to be an independent,
Speaker 8: publicly listed company likely in the next year. They also
Speaker 8: have their logistics business infront Ipo twelve to eighteen months.
Speaker 8: The grocery chain is also seeking to listen the next
Speaker 8: six to twelve months, and the international commerce business will
Speaker 8: seek external funding. So many changes there. I still love
Speaker 8: the Bloomberg opinion callist Tim Culplan calling at six Baby
Speaker 8: Baba's and now the Baba is really unique on its
Speaker 8: own because it's one of the few, if not the
Speaker 8: only one that people look at as a sum of
Speaker 8: fits parts basis, So they look at the little parts
Speaker 8: and that's how they value the company, especially with this
Speaker 8: big historic breaking up happening, and.
Speaker 2: They're going to have sort of rotating caster characters and
Speaker 2: the earning statements going on. Right when they speak to analysts,
Speaker 2: it will be one of the other leaders and one
Speaker 2: of the baby barber's coming on, So that's interesting.
Speaker 8: Are they going to have one or are they going
Speaker 8: to be really treated as an independent company? And one
Speaker 8: important point is yes, they will be split into six,
Speaker 8: but there will be some favorites. Obviously, some businesses will
Speaker 8: be better and stronger than the others. So we're going
Speaker 8: to see the winners and the losers down the line.
Speaker 2: Great to have you on, thank you breaking it all
Speaker 2: down as Vallee. Meanwhile, let's just stick with the e
Speaker 2: commerce a little bit more consumer jant Walmart. Look, it's
Speaker 2: reporting earnings today, really lifting its annual profit forecast after
Speaker 2: its discount model Walmart Plus it's powering new market share
Speaker 2: gains in the United States, so we see a pop
Speaker 2: and the shares just coming back from their highs. At
Speaker 2: the moment, we're coming up all things. You guessed it
Speaker 2: artificial intelligence, founder of landing ai, Deep Learning dot Ai,
Speaker 2: co founder of CASERA. That's gonna be next. Where are
Speaker 2: we in terms of the education front? And let's all
Speaker 2: just keep an eye also on the shares of Panel
Speaker 2: because they trade. The Tesla supplier plans to roughly quadruple
Speaker 2: annual battery production capacity to two hundred gigor what hours
Speaker 2: by March twenty thirty one, a sign that it anticipates
Speaker 2: greater demand for electric vehicles. It has a performed over
Speaker 2: the last couple of days. This Bloomberg. This is a
Speaker 2: good one. A new exchange traded fund and ETF tracking
Speaker 2: companies that benefit from the rise of artificial intelligence is
Speaker 2: hitting the market looking to tap into what is a
Speaker 2: growing frenzy for the technology. The Roundhall Generative AI and
Speaker 2: Technology ETF. We're in trading under the aptly named ticker
Speaker 2: chat on Thursday. The actively managed fund will invest mostly
Speaker 2: in companies that derive portions of their revenue or profit
Speaker 2: from generative AI. There are stick on that theme, perfect
Speaker 2: Voice for now. Andrew is joining US general partner at
Speaker 2: AI Fund, also chairman, founder and CEO of Landing Ai.
Speaker 2: Also founded Deep learning dot AI is also the co
Speaker 2: founder of cor Sarah and also, of course a junk
Speaker 2: professor at Stanford University's Computer Science department. Whoh titles and
Speaker 2: a half. And it's let's start on the AI fund
Speaker 2: in particular, doctor, because it's a venture studio, which particular applications,
Speaker 2: Which businesses? What industries do you want to disrupt? What
Speaker 2: you grow there?
Speaker 1: AI is like electricity one hundred years ago. I think
Speaker 1: it there's a position to transform all industries. My friends
Speaker 1: used to challenge each other and name an industry that
Speaker 1: AI will not transform, and where actually struggle with that.
Speaker 1: I went sit on stage and said, maybe hairdressing. Can
Speaker 1: the AI cut someone's hair? But my friend, who was
Speaker 1: a robotic professor suit of data and pointed in my
Speaker 1: head and she said, Andrew, most AI can't. Most people's
Speaker 1: hair can't get AI to cut their hairstyle. But you're here, Andrew,
Speaker 1: a robot could totally do that. So I think we're
Speaker 1: actually going to all sorts of industries today.
Speaker 2: Brutal, your hair looks very nice today. Look, what's so
Speaker 2: interesting about your background is not only the wider range
Speaker 2: of companies that you found in, but look, you were
Speaker 2: a Google Brain team for example, really at the very
Speaker 2: beginnings of AI within that particular source of buy do
Speaker 2: I'm interested as to.
Speaker 1: How I started to let the Google Bran team was
Speaker 1: a great fun and my team built a lot of
Speaker 1: Google's you know, modernly I capabilities. Yeah.
Speaker 2: So with that, how do you worry about big companies,
Speaker 2: big corporates having so much talent having basically ability to
Speaker 2: you know, maybe even negotiate agencies that require licenses. Going forward,
Speaker 2: do you think that we will see a democratization in
Speaker 2: how AI has grown or do you think it will
Speaker 2: be owned by some big, big companies that already exist.
Speaker 1: There are opportunities for both large companies and for new startups.
Speaker 1: This is where I see the value being generated. There's
Speaker 1: the hardware layer companies and video, Intel, A m D.
Speaker 1: You know, maybe new entrants as well though that that
Speaker 1: would create a lot of value. There's the infrastructure layer,
Speaker 1: including the clouds as was the AI tool builders. That
Speaker 1: looks quite competitive, but also opportunities there. And then the
Speaker 1: massive untaped opportunity that most people don't realize is the
Speaker 1: application layer. So I think that AI is a general
Speaker 1: purpose technology. That means it's not just useful for one thing,
Speaker 1: you know, a built AI AD systems that moves massive
Speaker 1: amounts of dollars. It's some of the large add tech
Speaker 1: advertising platforms. But yeah, isn't just useful ads. It's useful
Speaker 1: for robotic process automation, medical diagnosis, and agriculture and manufacturing.
Speaker 1: And I think it's actually very difficult for any one
Speaker 1: company to simultaneously build businesses and everything maritime shipping to education,
Speaker 1: to healthcare to financial services, and so I think the
Speaker 1: most efficient way to actually realize all of these diverse
Speaker 1: use cased art cross economy is to build multiple startups
Speaker 1: to attack these different opportunities. And actually that's what my
Speaker 1: adventure firm AI Fund does. And I think the application
Speaker 1: layer has love untapped opportunities, not just.
Speaker 2: So no one company can own all those fields. But
Speaker 2: what about one country? Everyone needs to have deep anxiety
Speaker 2: about the so called race US versus China. As someone
Speaker 2: who is a by do, how do you how does
Speaker 2: your expertise instruct that view?
Speaker 1: You know, we'out speaking to any one country. I feel
Speaker 1: like most countries at this point in time are prioritly
Speaker 1: under investing in AI. Ten years ago, we saw the
Speaker 1: explosion in deep learning machine learning basically labeling things. You know,
Speaker 1: label what's the text transfer for this label? When someone
Speaker 1: click on this, that label this medical linosis. Ten years later,
Speaker 1: we're not yet sold. We're not yet finished sorting out
Speaker 1: all the valuable use cases where this is going to
Speaker 1: be applied. And in the last few years we now
Speaker 1: have generative AI, which is another general purpose technology, which
Speaker 1: again is useful all sorts of things. And that means
Speaker 1: that the number of applications to which we can apply
Speaker 1: AI is even BARSI greater than before. This means that
Speaker 1: for most nations, the next decade will have a lot
Speaker 1: of opportunities to figure out a lot more country use cases,
Speaker 1: to create a lot of value for everyone. And I
Speaker 1: think thank in most countries invest more in the tech
Speaker 1: and in research and in education around AI.
Speaker 2: You wrote quite a strongly worded response rebuttal, shall we
Speaker 2: say to what had been the proposal? The letter the
Speaker 2: signatory is saying, look, put a wholt, put a pause,
Speaker 2: particularly on generative AI development at the moment in the
Speaker 2: big large language models. You said, in particular it advise
Speaker 2: largely because you know the genie's out the bottle, but
Speaker 2: ultimately that you know they were unrealistic in the way
Speaker 2: in which AI could upend humanity. But also we don't
Speaker 2: want to slow down innovation. Where are you on just
Speaker 2: how powerful AI could become, or at least where the
Speaker 2: regulatory landscape is moving at the pace at which the
Speaker 2: innovation is two So.
Speaker 1: I think AI does have risk. There is bias, fairness,
Speaker 1: concentration of power, amplifying toxic speech, generating toxic speech, job displacement.
Speaker 1: There are real risks that the AI community takes seriously
Speaker 1: working on hopefully actually for the most part, working really
Speaker 1: hard to make things better. Then there is the overhyped
Speaker 1: existential risk or AI wipe out humanity. I am less
Speaker 1: worried about that for a couple of reasons. One the
Speaker 1: heart takeoff scenario where AI isn't working that well yet today,
Speaker 1: but suddenly overnight May thirty first, twenty twenty three, we
Speaker 1: suddenly have sent in superintelligence and then forty hours later
Speaker 1: is taken over the world. Technology doesn't work like that,
Speaker 1: It actually grows gradually associated coming, and humanity has lots
Speaker 1: of experience controlling entities any more more powerful than a
Speaker 1: single human. Corporations in nations states are much more powerful
Speaker 1: than one person. But we feel for the most part,
Speaker 1: managed to steal them for the common good. And then lastly,
Speaker 1: I think humanity does have existential risk. Maybe an asteroid
Speaker 1: will do to us, whether it did to the dinosaurs,
Speaker 1: or climate change leading to massive depopulation, and I think
Speaker 1: or the next pandemic, you know, fingers crossed. When the
Speaker 1: look the actual existential risks that face humanity, I think
Speaker 1: AI will get large part of the solutions. So if
Speaker 1: you want a humanity to survive and thrive for the
Speaker 1: next thousand years, I would rush much rather make AI
Speaker 1: go faster to help us solve these problems, rather than
Speaker 1: slow AI down.
Speaker 2: Well, let's talk about thriving. It's really interesting that one
Speaker 2: particular sort of public market capitalization that's been up and
Speaker 2: it is the education companies that we see listed. I
Speaker 2: think of CHEG and how much they started to reference
Speaker 2: that chat GIPT might be slowing their own growth. You
Speaker 2: are a man who knows and understands online education thoroughly.
Speaker 2: You're already developing a way in which you can perhaps
Speaker 2: retrain reskill to make engineers prompt engineering developers. How are
Speaker 2: you seeing the landscape change for tech talent right now?
Speaker 1: I think that in the tech talent landscape. I want
Speaker 1: to share one thing that is really obvious that AI
Speaker 1: insiders but it's not widely known, which is the rise
Speaker 1: of AI things like chat GPT. Not there's a consumer too,
Speaker 1: but there's a developer two. So many people have tried
Speaker 1: chat GPT having yet go try it or Bard or
Speaker 1: the Microsoft Edge of being searched. Fantastic consumer too. What
Speaker 1: many people do not yet understand is that these tools
Speaker 1: are very powerful developer twos as well. And so there
Speaker 1: were AI systems that used to take teams like a
Speaker 1: year to build. They can now be built in a
Speaker 1: day or two. And so a few weeks ago, a
Speaker 1: couple of weeks ago, Collaborative Open AI my team deep
Speaker 1: lamed the AI launched a free online costs juptpro program
Speaker 1: for developers to teach people how they use this to
Speaker 1: program a capabilities really fast, really quickly. And we actually
Speaker 1: had half a millionaire romans in about two weeks. Maybe
Speaker 1: don know. It was the fastest growing cause the history
Speaker 1: of honor education. But I think that this massive wave
Speaker 1: of new applications that can now build much more cheaply
Speaker 1: and much more quickly is we're just at the start
Speaker 1: of that. And I think most people have not realized
Speaker 1: how big a flood of innovation does it cause an.
Speaker 2: AI fascinating Thank you for coming on. Hope to have
Speaker 2: you on again soon, Doctor Andrew of course, founder and
Speaker 2: CEO of Lanning Ai. Of course, the AI Fund is
Speaker 2: where he's currently helping grow startups. Time now for what's
Speaker 2: going viral. Apple's long awaited mixed reality headset. That's what is.
Speaker 2: It's finally becoming a reality. Bloomberg's Mark Gumm and you've
Speaker 2: got a great piece out today and June fifth, we
Speaker 2: hold our breath.
Speaker 9: Yeah, don't hold your breath much longer. On June fifth,
Speaker 9: Apple will be introducing its next big thing. We actually
Speaker 9: first wrote about the headset in twenty seventeen, that this
Speaker 9: is something Apple was working on. We've been reporting on
Speaker 9: it for a number of years now. All sorts of
Speaker 9: details you can find on Bloomberg dot com and power
Speaker 9: on our later story today in BusinessWeek. Details to products development,
Speaker 9: how the initial Dream was standalone augmented reality glasses, lots
Speaker 9: of technical challenges and compromises needed to be made, and
Speaker 9: now we're going to be getting something that's sort of
Speaker 9: in between a classic VR headset and the Dream of
Speaker 9: AAR glasses. This is a mixed reality headset. It's going
Speaker 9: to be quite light and slim with an external battery,
Speaker 9: very powerful with an M two macgrade processor. The idea
Speaker 9: being this device would replace many of the tasks done
Speaker 9: today on an iPhone, macro iPad. Focus on gaming, virtual reality,
Speaker 9: video conferencing, collaboration remotely through different applications, productivity. Gaming will
Speaker 9: be a big focus, meditating, working out at some point
Speaker 9: as well. So this is going to be a pretty
Speaker 9: jam packed and expensive product.
Speaker 2: Yes, it better be. For three thousand dollars, Mark Gumman,
Speaker 2: absolutely brilliant, Go readers pieces. We thank you so much
Speaker 2: for giving us that setup. And let's dig into well.
Speaker 2: Someone who's helping build these new augmented and virtual realities,
Speaker 2: whether it be meditation, whether it be online learning. Emma
Speaker 2: rig just stadders with us, co founder and CEO of
Speaker 2: warp In. It's a Swedish vir training company that's helped businesses.
Speaker 2: Of course, it's initial creator with Magic Leak, with Meta,
Speaker 2: even Disney and Ferrari they trained staff and market products.
Speaker 2: Emma just the possibilities here. It is a big price
Speaker 2: tag for Apple's product. We know that Meta perhaps has
Speaker 2: struggled a little bit with the sales of its oculus,
Speaker 2: and they're like, what are you seeing about the the
Speaker 2: overall desire of people to want to interact in this way.
Speaker 3: Well, let's start off by saying that we are the
Speaker 3: beginning of the next technological revolution, right, So for the
Speaker 3: first time, we're seeing a lot of new technologies developing
Speaker 3: at the same time. We have augmented reality, virtual reality,
Speaker 3: artificial intelligence, everything coming at the same time, creating new
Speaker 3: opportunities that we haven't seen before. I mean, Apple, they
Speaker 3: stand for quality and they have been working on this
Speaker 3: headset for many years obviously, so everyone is of course
Speaker 3: very excited, exciting of what they're going to release. But
Speaker 3: what we are seeing from our point of view is
Speaker 3: the benefits that we're seeing with these technologies are a
Speaker 3: greater shift, I think than with the smart form phone
Speaker 3: or the internet.
Speaker 2: What needs to happen. Does a price point need to
Speaker 2: be more accessible for this really to go mainstream?
Speaker 3: Well, I think you know right now we are in
Speaker 3: the business to business where we're seeing the real results.
Speaker 8: Right.
Speaker 3: If you're using virtual reality for training and education, for example,
Speaker 3: you can lower your tough with eighty percent, have a
Speaker 3: retention of seventy percent, and you learn four times faster
Speaker 3: than any other training method out there. So I mean
Speaker 3: for this to become more mainstream, we need a headset
Speaker 3: that is more fashionable, that is a little bit cheaper,
Speaker 3: and of course content is king. It has to add
Speaker 3: value to us. It has to make sense for us
Speaker 3: to put on a headset instead of using our phone.
Speaker 2: And I think that's the point emmer is many many
Speaker 2: would feel that actually, until you've tried it, you can't
Speaker 2: knock it. But the trying of it is going to
Speaker 2: be the hard thing. How do you get out there
Speaker 2: and market these products? How do you ensure that everyone
Speaker 2: can see the benefits?
Speaker 3: Well, I think that to your point, the content is
Speaker 3: king here. We need to have experiences that rarely showcases
Speaker 3: what these technologies can do, because instead of being on
Speaker 3: the internet or just looking at the internet, we're going
Speaker 3: to be inside the internet, using all of our senses
Speaker 3: and engaging in a whole new way. And I think
Speaker 3: when we can see content and apps that will really
Speaker 3: show how these technologies will change our life, then I
Speaker 3: think it will become much more mainstream. And I think
Speaker 3: gaming and social media and those areas are really exciting
Speaker 3: and fun, but the greatest benefits for humanity will be
Speaker 3: in training, education, And just like the first Internet revolutionize
Speaker 3: these areas, so will Web three point zero and a mataverse.
Speaker 2: Of course, there's lots of hand ringing about that. There's
Speaker 2: worries in the same way you mentioned alificient intelligence. We're
Speaker 2: worrying about the regulation of that, the safe and ethical
Speaker 2: use of it. We're worried about people will live in
Speaker 2: too much of their lives in a virtual or augmented reality.
Speaker 2: How are you thinking about that? Because I know over
Speaker 2: in Sweden there as much thought to this.
Speaker 8: Well.
Speaker 3: I think that we have almost lost the whole generation
Speaker 3: for a two D world, right, we miss when we
Speaker 3: had the smartphones to actually educate people on how to
Speaker 3: communicate with each other. I see this actually as a
Speaker 3: window opportunity unity where we're leaving this is very limited
Speaker 3: to the world behind us and entering a more natural
Speaker 3: state of the treaty world. And I think when we're
Speaker 3: entering these worlds, we also we're going to see how
Speaker 3: we spend our time and how we can use this
Speaker 3: to feel better and to connect with each other. You
Speaker 3: are three point seventy five times more emotional connected to
Speaker 3: the content that you can experience. So I think that
Speaker 3: we can use these technologies to kind of bridge those.
Speaker 2: Gaps that we have built. And when we first introduced you,
Speaker 2: we heard of all the companies you've been working with
Speaker 2: in the economic environment, realities of it. Our companies as
Speaker 2: willing to venture into this field. Yes, and I think.
Speaker 3: That what we need to solve are problems that we're
Speaker 3: facing at the moment. So I mean, by the year
Speaker 3: twenty twenty five, fifty percent of everyone on the planet
Speaker 3: we'll be needing reskilling or upskillings. So and the method
Speaker 3: is that we're using are costly and very and consuming.
Speaker 3: So companies are looking at new ways to solve problems
Speaker 3: that we're facing. And I think that if you're a
Speaker 3: company today within the production line, retail or those types
Speaker 3: of areas, you need to have a look at a
Speaker 3: metaverse strategy.
Speaker 2: I'm a great to spend some time with you. Thanks
Speaker 2: for saying late. I'm Stockholm for us. Emma Ritaistance, co
Speaker 2: founder and CEO of Warping. Meanwhile, that does it for
Speaker 2: this edition of Bloomberg Technology. You do not want to
Speaker 2: forget about our podcast catch up if you can't catch
Speaker 2: us Live provide on the terminal, as well as online
Speaker 2: on Apple, Spotify, and iHeart This is Bloomberg.