WEBVTT - Bloomberg Tech Event Special 0:00:02.520 --> 0:00:12.920 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:12.960 --> 0:00:16.759 from coast to coast with Caroline Hide in New York 0:00:17.040 --> 0:00:19.040 and Eva Low in San Francisco. 0:00:22.720 --> 0:00:25.280 Welcome to a special edition of Bloomberg Tech Live from 0:00:25.320 --> 0:00:28.160 the Bloomberg Tech event in San Francisco and leaders. 0:00:28.240 --> 0:00:30.480 They're from tech, they're from business, and they are gathered 0:00:30.520 --> 0:00:34.640 here to discuss how they can navigate economic, geopolitical uncertainty 0:00:34.640 --> 0:00:37.839 and of course multiply the opportunities in today's landscape. 0:00:37.880 --> 0:00:40.280 So we're going to talk about everything from robots to 0:00:40.560 --> 0:00:45.080 data center costs, the race to reach artificial general intelligence, 0:00:45.159 --> 0:00:46.240 and economic impact. 0:00:46.320 --> 0:00:49.159 But look, let's first of all talk about the markets, 0:00:49.200 --> 0:00:51.320 because look they're down today. Look, we're having our worst 0:00:51.360 --> 0:00:53.280 day on the NAST that one hundred since mid May. 0:00:53.320 --> 0:00:55.520 We've lowered it down to the lowest level since the 0:00:55.640 --> 0:00:58.040 end of May. We're under some pressure, we're bouncing off 0:00:58.040 --> 0:00:59.840 of our lows, are off by eighteen percent. But there's 0:00:59.840 --> 0:01:01.880 some anxiety and then that perhaps the market's run up 0:01:01.880 --> 0:01:03.400 too far too fast, particularly ships. 0:01:03.480 --> 0:01:06.520 Yeah, so this is a story about Broadcom and Broadcom's 0:01:06.560 --> 0:01:10.280 earnings and basically they said that in the current period 0:01:10.319 --> 0:01:13.720 they will book, sixteen billion dollars of sales in the 0:01:13.760 --> 0:01:17.600 custom silicon group that we're talking TPUs, we're talking a six. 0:01:17.920 --> 0:01:21.759 The street went into this with very high expectations. Seventeen 0:01:21.800 --> 0:01:26.000 point two billion dollars. That's a big drop right on Broadcom, 0:01:26.040 --> 0:01:27.560 the biggest drop I think since. 0:01:27.400 --> 0:01:28.839 January of twenty twenty five. 0:01:29.480 --> 0:01:32.880 So let's talk about it, because, hey, right place, right time, 0:01:33.520 --> 0:01:36.039 we're gonna have a big conversation today, Bloomberg Global Tech 0:01:36.520 --> 0:01:40.679 Executive Editor Tom Giles, Right place, right time. 0:01:40.920 --> 0:01:41.679 Thank you for having me. 0:01:41.800 --> 0:01:44.759 Yeah, thank you for being here, and later to say 0:01:44.760 --> 0:01:47.160 you will have a conversation with Broadcom CEO pock Ten. 0:01:47.280 --> 0:01:49.760 That's right, the man of the hour, the man whose 0:01:49.880 --> 0:01:53.120 results are moving global markets and not in the in 0:01:53.200 --> 0:01:55.840 the right way. The wait, he hopes, Probably you're if 0:01:55.840 --> 0:01:59.440 you're a ball right. The point here is, as you said, 0:01:59.520 --> 0:02:02.840 there was an expectation for revenue forecast for the current 0:02:02.920 --> 0:02:05.680 quarter at about seventeen point two billion. You come in 0:02:05.720 --> 0:02:09.519 at sixteen billion dollars. Still a pretty impressive number. Let's 0:02:09.560 --> 0:02:13.799 be fair. The demand is there, nobody's worried about things 0:02:13.880 --> 0:02:16.480 dropping off a cliff. But if you this stock is 0:02:16.560 --> 0:02:20.360 priced for perfection, In the run up to these earnings, 0:02:20.440 --> 0:02:23.360 that company added two hundred and seventy billion dollars in 0:02:23.440 --> 0:02:28.040 market capitalization. That is just another reminder of how much 0:02:28.120 --> 0:02:32.840 people are anticipating and expecting this demand to continue. Chips 0:02:32.880 --> 0:02:36.919 are a very cyclical industry. I was on yesterday last night, 0:02:36.919 --> 0:02:39.359 we had cerebra Ceo. We're going to listen to him 0:02:39.480 --> 0:02:42.200 in a little bit. I asked him, you know, are 0:02:42.320 --> 0:02:45.120 basically are we in a bubble? People are concerned about 0:02:45.160 --> 0:02:48.120 the sustainability of this rally, People are concerned about the 0:02:48.160 --> 0:02:52.320 sustainability of demand. His point is we're in the opposite 0:02:52.360 --> 0:02:55.840 of a bubble. We cannot keep up with demand, particularly 0:02:55.880 --> 0:02:58.200 in the hardware space. And I think that that is 0:02:58.240 --> 0:03:01.600 the message that howked han And is trying to bring across. 0:03:01.720 --> 0:03:04.359 We will definitely be asking him, did we miss something? 0:03:04.600 --> 0:03:06.920 Is there a nuance here? What do we need to 0:03:07.000 --> 0:03:09.360 know about your outlook going forward? 0:03:09.480 --> 0:03:09.799 Yeah? 0:03:09.880 --> 0:03:14.600 One thing that reading research this morning, including from Rosenblat, 0:03:14.639 --> 0:03:18.040 my friends at Rosenblatt, we're talking about how now we 0:03:18.120 --> 0:03:20.720 have even greater visibility. He talked about how we have 0:03:20.800 --> 0:03:24.360 visibility into twenty twenty eight, much further out than just 0:03:24.520 --> 0:03:27.040 three months ago. He said, I didn't have that visibility. 0:03:27.240 --> 0:03:30.080 I have it now and he's still sending bullish signs. 0:03:30.280 --> 0:03:32.760 So I think in the longer term, the market is 0:03:32.800 --> 0:03:35.600 going to be encouraged by that kind of visibility further 0:03:35.680 --> 0:03:36.400 and further out. 0:03:36.480 --> 0:03:39.000 And that's on the AI Infrastructure Playbook. 0:03:39.240 --> 0:03:42.119 And it's all because we're using jennitor AI so much more. 0:03:42.320 --> 0:03:44.360 Who are using it through the likes of Anthropic, the 0:03:44.480 --> 0:03:46.200 like of op Ai, the likes of groqu Ai. 0:03:46.280 --> 0:03:49.240 If you're looking over at SpaceX, these companies are about 0:03:49.240 --> 0:03:53.200 to go public and we have the anthropic leader here 0:03:53.280 --> 0:03:53.880 speaking as. 0:03:53.800 --> 0:03:57.480 Well, one of the co founders, Daniella Amaday. She's the president, 0:03:57.560 --> 0:04:01.000 the brother of the CEO. We're excuse me, sister of 0:04:01.000 --> 0:04:04.760 the CECO. We're going to be asking her about what 0:04:04.840 --> 0:04:08.040 it's like to have just gone out with your with 0:04:08.080 --> 0:04:11.280 your secret filing, your confidential filing. What do we have 0:04:11.360 --> 0:04:13.760 to look forward to with this this IPO, one of 0:04:13.800 --> 0:04:14.480 the biggest ever. 0:04:14.920 --> 0:04:16.400 I just want to set the scene for the Bloombo 0:04:16.480 --> 0:04:21.000 tech audience fit. Anthropic literally filed confidentially for an IPO Monday. 0:04:21.000 --> 0:04:21.839 Am I getting that right? 0:04:21.920 --> 0:04:25.040 The world's been wild an illusion last night SpaceX s 0:04:25.120 --> 0:04:29.279 one A the amended filing. They priced the IPO one 0:04:29.320 --> 0:04:31.599 hundred and thirty five dollars a share seek Thrace seventy 0:04:31.600 --> 0:04:34.840 five billion almost one point eight trillion dollar valuation, which 0:04:34.880 --> 0:04:37.440 we were right about. By the way, must tweeted that 0:04:37.480 --> 0:04:40.800 it was false. You remember, Tommy, you edited the story. 0:04:41.480 --> 0:04:42.200 I mean, just wipe that. 0:04:42.839 --> 0:04:46.600 Today's event is astonishing, right, It is astonishing that Daniel 0:04:46.600 --> 0:04:50.479 amoday will be on stage, that we have investors here 0:04:50.520 --> 0:04:53.560 who are across the cap tables of all three companies, Anthropic, 0:04:53.600 --> 0:04:57.160 Open Air SpaceX. We're going to learn something. I mean, 0:04:57.520 --> 0:04:59.440 this is a difficult environment to try and cover. 0:04:59.760 --> 0:05:02.440 Yeah, I think one of the big questions right now 0:05:02.560 --> 0:05:06.480 is this horse race between open AI and Anthropic. And 0:05:06.680 --> 0:05:10.479 open AI had really captured the world's imagination for years, 0:05:10.920 --> 0:05:14.760 since November, that faithful day November twenty twenty two, seen 0:05:14.800 --> 0:05:18.200 as the leader, seen as the one to beat. In 0:05:18.240 --> 0:05:22.920 the last six months, roughly, we've seen Anthropic ascent changed. 0:05:23.040 --> 0:05:27.760 We've seen them capturing people's imagination, whether it's through Mythos, 0:05:27.839 --> 0:05:32.719 their cybersecurity tool that everybody wants to get their hands on, 0:05:32.800 --> 0:05:35.520 that everybody is afraid of but also wants to learn 0:05:35.520 --> 0:05:39.480 how to use and learn from. Right they have They 0:05:39.520 --> 0:05:42.360 got out ahead of open Ai with the confidential filing, 0:05:42.480 --> 0:05:45.120 and they have been shown sending the message to the 0:05:45.160 --> 0:05:48.240 world that we have captured the business market in a 0:05:48.279 --> 0:05:50.640 way that open Ai has it. Now, I've talked to 0:05:50.680 --> 0:05:53.800 some people and they have said, don't count open Ai out. 0:05:54.160 --> 0:05:55.359 This is a horse race. 0:05:55.640 --> 0:05:58.960 Today Anthropic is seen as a head. Tomorrow it's going 0:05:59.040 --> 0:06:00.320 to be you know, they're going to really least a 0:06:00.360 --> 0:06:03.000 new version of chat GPT and it's going to maybe 0:06:03.040 --> 0:06:06.080 blow your mind, and they're going to be seen as 0:06:06.120 --> 0:06:08.840 a sendate and it's this back and forth and we're 0:06:08.839 --> 0:06:11.039 going to see that play out in real time with 0:06:11.200 --> 0:06:15.200 two potentially back to back trillion dollar IPOs. 0:06:15.240 --> 0:06:16.800 And we can play it out in real time with 0:06:17.360 --> 0:06:21.279 a member from Altimito who's backing all three of these courses. 0:06:21.520 --> 0:06:22.560 In terms of the venture. 0:06:22.320 --> 0:06:26.560 Capital space, talk about hedging your bets and get at 0:06:26.920 --> 0:06:28.559 nice hedge behind us as we hedge our bets. 0:06:28.560 --> 0:06:30.360 Tom Charles, we so appreciate. 0:06:30.000 --> 0:06:31.559 You being with us, Thanks very much. 0:06:31.600 --> 0:06:33.960 And look, it's his event that we're here and at 0:06:33.960 --> 0:06:36.480 the moment alongside Emily Chang. And look, stay with it 0:06:36.600 --> 0:06:39.760 because Blueleg Tech later today has a roll con President CEOs. 0:06:39.760 --> 0:06:42.120 We're just talking about hot Tang. What a time to 0:06:42.160 --> 0:06:45.159 be joining this blue leg tech conference. But also coming up, 0:06:45.600 --> 0:06:47.800 we've got the perfect person to be discussing some of 0:06:47.839 --> 0:06:51.080 those market valuations in the private space. CEO Data bricks 0:06:51.240 --> 0:06:54.480 as is the private company as reaching sky high valuations? 0:06:54.800 --> 0:06:56.719 Is it also thinking of a mega tech idea? 0:06:56.800 --> 0:06:59.440 Yeah, you're a CEO. You're reading the yes ones right 0:06:59.480 --> 0:07:01.640 and thinking what do I do? Could this be a 0:07:01.720 --> 0:07:05.600 sign of an AI bubble? Tom mentioned it? No, According 0:07:05.600 --> 0:07:08.400 to Cerebra CEO Andrew Fellman, he sat down with Tom 0:07:08.520 --> 0:07:09.040 last night. 0:07:09.200 --> 0:07:09.560 This is. 0:07:11.360 --> 0:07:15.080 What is unusual about it I right now is the 0:07:15.120 --> 0:07:19.080 builders are so far behind the demand it's absurd. We 0:07:19.160 --> 0:07:22.200 have a backlog of more than twenty five billion dollars 0:07:22.240 --> 0:07:26.200 of demand that there are none of us, not us, 0:07:26.240 --> 0:07:29.200 not AMD, not a video that can keep up with 0:07:29.280 --> 0:07:35.640 the demand that your employees are driving. And that's sort 0:07:35.680 --> 0:07:38.080 of in a lot of ways, the opposite of a bubble. 0:07:46.600 --> 0:07:49.720 Welcome back to our Bloomberg Tech special and look, maybe 0:07:49.800 --> 0:07:52.360 no surprise for anyone, I think so, But an AI 0:07:52.480 --> 0:07:56.280 bubble compute needs sas apocalypse. Some of the key themes 0:07:56.320 --> 0:07:59.400 that will be debated here today at the Bloomberg Tech event. 0:07:59.400 --> 0:08:01.440 Our next go, Well, you can talk about all of them, 0:08:01.480 --> 0:08:03.560 isn't the center. Ali Godzia is with us, the CEO 0:08:03.600 --> 0:08:05.400 and co founder of Data Breaks, one of the. 0:08:05.160 --> 0:08:07.040 Most valuable private companies. 0:08:06.920 --> 0:08:09.880 That has yet to file confidentially with the SEC as 0:08:09.920 --> 0:08:11.720 far as we know. We're going to hold back on 0:08:11.800 --> 0:08:15.400 IPO chat for a minute and ask you about whether 0:08:15.520 --> 0:08:18.800 this moment of all of these companies looking to access 0:08:19.160 --> 0:08:21.880 capital in the public markets, is that an anxiety if 0:08:21.880 --> 0:08:24.240 you could there be oxygen sucked out of Roumans some 0:08:24.440 --> 0:08:26.960 ways to back some companies such as yourselves. 0:08:27.040 --> 0:08:30.440 Well, we're private company, so private invests. They're soon not 0:08:30.560 --> 0:08:32.760 going to have all these companies to deploy their capital on, 0:08:32.800 --> 0:08:34.439 and so there's going to be a lot of capital 0:08:34.480 --> 0:08:36.400 available in private markets. So no, that's not going to 0:08:36.400 --> 0:08:37.360 be a problem with offer us. 0:08:38.000 --> 0:08:38.280 Allie. 0:08:38.280 --> 0:08:40.559 I'm really interested in what life's like for you right 0:08:40.600 --> 0:08:43.120 now as the CEO of a company of Data Breaks 0:08:43.240 --> 0:08:46.240 is evaluation, but also, like you know, I don't mean 0:08:46.240 --> 0:08:49.520 this is sort of flippantly like okay, great big private valuation. 0:08:50.600 --> 0:08:53.560 The company's growing incredibly fast, you know, revenue run rate 0:08:53.920 --> 0:08:56.560 Caro set up at the top everything that's happening in 0:08:56.600 --> 0:09:00.400 software right now. What is it that you are dealing 0:09:00.440 --> 0:09:02.720 with most often? What is it that you are sort 0:09:02.720 --> 0:09:05.000 of I don't know, waking up and going okay, wow, 0:09:05.040 --> 0:09:06.160 this is this is today. 0:09:06.600 --> 0:09:06.800 Yeah. 0:09:06.840 --> 0:09:08.840 My view is that we're in a very special moment 0:09:08.920 --> 0:09:12.120 because I'm a contrarian. I believe we actually already have AGI, 0:09:12.400 --> 0:09:14.160 artificial general intelligence already arrived. 0:09:14.280 --> 0:09:16.480 We already have what's your evidence? Yeah? 0:09:16.520 --> 0:09:18.800 I ask groups all the time. I ask this question. 0:09:18.880 --> 0:09:20.640 I ask how many of you believe we have AGI? 0:09:20.800 --> 0:09:23.280 And roughly ten percent of their audience usually raises their hands. 0:09:23.360 --> 0:09:24.880 Then I ask, how many of you think that the 0:09:24.920 --> 0:09:27.800 AIS that you use, the frontier models are smarter than 0:09:27.800 --> 0:09:29.600 most of the people you work with most of the time. 0:09:29.840 --> 0:09:32.280 And ninety percent of any crowd I've done this like 0:09:32.679 --> 0:09:36.360 twenty thirty times raised their hands. Okay, so it's already 0:09:36.360 --> 0:09:39.280 really plenty smart. We don't need AI to get smarter. 0:09:40.040 --> 0:09:42.520 It just is lacking context. If you could capture all 0:09:42.520 --> 0:09:44.920 the context of all the conversations we're having and everything 0:09:44.960 --> 0:09:45.560 that's happening in. 0:09:45.559 --> 0:09:48.520 The processes data bricks, that's exactly. 0:09:48.240 --> 0:09:49.800 If you could feed that to the AI. 0:09:50.480 --> 0:09:54.240 They already could be extremely productive, but no one's really. 0:09:54.000 --> 0:09:55.040 Focused on that problem. 0:09:55.080 --> 0:09:57.720 Everybody's focused on super intelligence and can we like continue 0:09:57.760 --> 0:10:01.160 the scaling laws And the problem is if we just 0:10:01.200 --> 0:10:02.640 could have that context, we. 0:10:02.600 --> 0:10:03.680 Would have huge breakthrough. 0:10:03.760 --> 0:10:05.640 So that's what database is focused on, you know, that's 0:10:05.760 --> 0:10:08.600 our only focus is how do we infuse that data 0:10:08.600 --> 0:10:12.400 context into this product we have called Genie, which then 0:10:12.720 --> 0:10:14.839 can help answer and automated questions. I think this is 0:10:14.840 --> 0:10:17.760 the most important question that people should focus on right now. 0:10:17.920 --> 0:10:19.640 And we've got plenty of new products. 0:10:19.679 --> 0:10:22.360 Like as you're getting ever higher valuations, you're backing it 0:10:22.400 --> 0:10:24.360 up with new offerings. I think about lik Base, I 0:10:24.360 --> 0:10:25.440 think about some of the M and a that you've 0:10:25.480 --> 0:10:27.800 been doing in the market to beef up the product offerings. 0:10:27.920 --> 0:10:29.080 What's hitting home at the moment? 0:10:29.120 --> 0:10:31.040 Where are the customers demanding of you? 0:10:31.360 --> 0:10:34.640 Yeah, as you said, like base is, you know, it's 0:10:34.720 --> 0:10:38.120 everyone wants these databases. People are not paying attention to databases. 0:10:38.360 --> 0:10:41.640 Everybody's paying attention to software is being commoditized because AI 0:10:41.679 --> 0:10:44.320 can produce software. But what they don't think about is 0:10:44.320 --> 0:10:47.120 that all software needs a database. It's a fact. You 0:10:47.160 --> 0:10:48.839 cannot have a piece of software and it's not using 0:10:48.840 --> 0:10:53.720 a database and Linke Base is really really really tailoring 0:10:53.760 --> 0:10:57.400 to those agents. So you know, firstas product group uses 0:10:57.480 --> 0:11:00.560 like base and their using they put all their KPIs 0:11:00.559 --> 0:11:03.000 in it, and that way the agents can actually start 0:11:03.040 --> 0:11:05.959 answering questions on all the KPIs that they have because 0:11:05.960 --> 0:11:08.040 you know, everybody's using agent stuff or. 0:11:08.600 --> 0:11:09.840 Is everyone using an agent now? 0:11:09.960 --> 0:11:11.679 Is adoption? Is productive activity there? 0:11:11.720 --> 0:11:11.880 Yeah? 0:11:11.920 --> 0:11:12.680 Okay, so that depends. 0:11:12.720 --> 0:11:14.559 So back to that context question, if we could just 0:11:14.600 --> 0:11:17.320 get the data to the agents. People are using agents, 0:11:17.360 --> 0:11:20.120 but they're not using it in its full potential. Maybe 0:11:20.120 --> 0:11:22.360 we've like tapped into one percent of it because it's 0:11:22.360 --> 0:11:25.600 not like autonomous agents are running around, you know, working 0:11:25.679 --> 0:11:28.319 together collaborating with humans and you know, so that's not 0:11:28.520 --> 0:11:31.520 happening yet. Why is that Because they don't have the context. 0:11:31.760 --> 0:11:33.840 So we have to infuse that context into them. So 0:11:34.559 --> 0:11:37.880 giving you another example, noval Artisk, you know they make Ouzempic, 0:11:38.600 --> 0:11:41.360 you know, big customer that actually leverages Genie and they're 0:11:41.360 --> 0:11:44.760 able to infuse a lot of the all the trials 0:11:44.760 --> 0:11:46.920 that they run, they infuse it to the AIS and 0:11:46.920 --> 0:11:48.839 now you can ask questions from the AIS about you know, 0:11:48.920 --> 0:11:51.600 how's that obesity study going. And they were able to 0:11:51.640 --> 0:11:54.640 shorten the time it takes to understand these studies using 0:11:54.720 --> 0:11:58.120 gene and agents from you know, weeks down to a 0:11:58.160 --> 0:11:58.760 few minutes. 0:11:59.320 --> 0:12:02.240 So it is happening. But we're just at the. 0:12:02.559 --> 0:12:05.480 Case study is real, right, and I'm not questioning whether 0:12:05.520 --> 0:12:10.240 it is. But that then jensen Han's equation of more compute, 0:12:10.840 --> 0:12:14.079 more tokens, more revenues, it means that that should put 0:12:14.160 --> 0:12:16.359 them on a trajectory to more profitability. 0:12:16.480 --> 0:12:18.440 Right to many people, it's really simple. 0:12:18.840 --> 0:12:21.199 The other thing that Gentleman outlined at the beginning of 0:12:21.240 --> 0:12:26.320 this week computext Yes, was that it's complete nonsense that 0:12:26.480 --> 0:12:29.920 software is in trouble because his thesis is that the 0:12:30.080 --> 0:12:34.000 agents themselves become the ultimate users of that software. I've 0:12:34.000 --> 0:12:37.439 been finding that concept very hard to understand. You probably 0:12:37.440 --> 0:12:39.360 are in a place where you can evaluate it early, 0:12:39.400 --> 0:12:39.760 aren't you. 0:12:39.920 --> 0:12:41.800 Yeah, So I think that's going to spot on with 0:12:41.840 --> 0:12:45.720 both of those. You know, we actually did the calculation. 0:12:46.040 --> 0:12:48.440 We think in the next nine months, but let's say 0:12:48.440 --> 0:12:50.679 you're around one year or two years, we're going to 0:12:50.760 --> 0:12:53.920 have more software being written than in all history of mankind. 0:12:54.520 --> 0:12:56.360 You know, no matter how you back into it. This 0:12:56.480 --> 0:12:57.200 kind of checks out. 0:12:57.559 --> 0:12:59.839 Okay, with so much software being written, there's going to 0:12:59.880 --> 0:13:02.679 be so much demand for all the other things. Like 0:13:02.720 --> 0:13:04.920 this isn't the ecosystem around software. We happen to do 0:13:05.000 --> 0:13:07.120 lake Base, which is a database, and you know we're 0:13:07.120 --> 0:13:09.000 seeing huge amounts in these database, but there are other 0:13:09.040 --> 0:13:10.240 ones around software. 0:13:10.440 --> 0:13:12.600 So yes, it's this is just continued. 0:13:13.480 --> 0:13:15.920 And therefore I go back to how we started this conversation. 0:13:16.840 --> 0:13:19.520 As you keep on scaling, as you keep driving innovation, 0:13:19.640 --> 0:13:21.280 do you need more private capital? 0:13:21.360 --> 0:13:23.880 Would you look to go for public capital at this moment? 0:13:24.080 --> 0:13:26.079 Yeah, I mean we are always interested and we're always 0:13:26.080 --> 0:13:27.760 talking to investors, and you know, I'm sure we're going 0:13:27.800 --> 0:13:29.240 to do more of that. We will also be a 0:13:29.240 --> 0:13:29.960 public company. 0:13:30.480 --> 0:13:32.800 I just think, but why also, why, like if the 0:13:32.840 --> 0:13:34.520 private markets will keep going with you? 0:13:34.800 --> 0:13:37.200 Yeah, what's your impetus figuring? 0:13:37.280 --> 0:13:39.439 Yeah, because you know, at our scale, you know, I 0:13:39.440 --> 0:13:42.200 think we raised twenty billion dollars. At these scales, we're 0:13:42.480 --> 0:13:46.599 almost trying to create a market transaction mechanism for our employees, 0:13:46.960 --> 0:13:49.120 which you know, it's ten thousand right now, but if 0:13:49.120 --> 0:13:50.800 you take all of them, the prior employees, it's probably 0:13:50.800 --> 0:13:53.640 fourteen thousand or so, you know, So there is a 0:13:53.880 --> 0:13:55.960 thing that can do that. It's called the public markets. 0:13:56.160 --> 0:13:58.680 So I just think this is a terrible year for 0:13:58.960 --> 0:14:00.439 you know, to go public. We're going to just so 0:14:00.520 --> 0:14:03.120 much happened super quickly. How closely did you read the 0:14:03.160 --> 0:14:06.520 space excess one and how closely will you track an 0:14:06.520 --> 0:14:10.640 anthropic IPO to evaluate the future market that you want 0:14:10.679 --> 0:14:12.880 to go into. Yeah, look, we're not really trying to 0:14:12.960 --> 0:14:15.640 time the market. We're trying to really win the market 0:14:15.640 --> 0:14:17.240 in the long run. That's really our progress. 0:14:17.280 --> 0:14:19.240 So I did not go through the S one filing 0:14:19.320 --> 0:14:19.840 one by word. 0:14:20.120 --> 0:14:21.000 It's got other things to do. 0:14:21.200 --> 0:14:23.640 Yep, Ali goes the CEO data breaks a busy guy 0:14:24.240 --> 0:14:25.280 back on Bloomberg Tech. 0:14:25.320 --> 0:14:26.040 Thank you very much. 0:14:34.080 --> 0:14:36.240 We're live from the Bloomberg Tech event, where one of 0:14:36.280 --> 0:14:40.680 the biggest questions facing investors but also founders alike is 0:14:40.680 --> 0:14:44.280 what comes next IPO market, the AI boom, how it's 0:14:44.320 --> 0:14:48.600 reshaping technologies landscape? Joining us right now is a poor Bagarawil, 0:14:48.680 --> 0:14:52.000 partner at L Timater Capital. L Timater, Let me just 0:14:52.000 --> 0:14:55.160 set the scene right so I also understand the context 0:14:55.280 --> 0:14:57.600 view of the world we're in right now is crazy 0:14:58.560 --> 0:15:03.360 and thropic just fold confidentially ultimately leads that round. I 0:15:03.440 --> 0:15:05.120 get that there's a limit to what you can say 0:15:05.160 --> 0:15:07.200 about that, but you're also on the cap table of 0:15:07.520 --> 0:15:12.960 open ai SpaceX. This isn't also about IPOs in isolation. 0:15:13.960 --> 0:15:16.640 Alphabet came out and upsized an eighty four billion dollar 0:15:16.760 --> 0:15:19.840 now equity offering. So actually my question to you right 0:15:19.880 --> 0:15:23.080 now is what is the capital market telling you about 0:15:23.080 --> 0:15:25.040 the state of the world. Is that a good place 0:15:25.040 --> 0:15:27.040 to start, Like, that's a great basis, sir. Thank you 0:15:27.080 --> 0:15:29.080 for having me at Caroline. It's lovely to be here. 0:15:29.600 --> 0:15:31.040 You know, I think at the highest level, I think 0:15:31.080 --> 0:15:34.600 you nailed it. It's like we ai has gone from 0:15:34.640 --> 0:15:37.480 being a technology product cycle to one of the largest 0:15:37.520 --> 0:15:41.200 capital formation cycles. Right on one side, you've got the 0:15:41.280 --> 0:15:45.120 pigs and shovels. You know, this is the compute, memory, optics, networking. 0:15:45.160 --> 0:15:47.680 You go down the list they are selling these products 0:15:47.680 --> 0:15:49.320 to to let's call them the minors. 0:15:49.320 --> 0:15:50.000 These are the labs. 0:15:50.480 --> 0:15:53.720 Google just raised eighty four billion dollars opening eye. It's 0:15:53.720 --> 0:15:56.600 a historicallye one hundred and twenty two billion anthropic of course, 0:15:57.240 --> 0:15:59.480 and you know, you look at the same week and 0:15:59.600 --> 0:16:03.440 video just announce an eighty billion dollar stock buyback program 0:16:03.680 --> 0:16:06.160 ske High next same thing, eight billion dollars of stock 0:16:06.240 --> 0:16:07.600 retired with more dividends coming. 0:16:07.640 --> 0:16:10.760 Those are like sort of contradictions in the function of 0:16:10.800 --> 0:16:11.240 the market. 0:16:11.320 --> 0:16:11.960 They're opposite. 0:16:12.240 --> 0:16:14.360 It's and that's the line that I wanted to highlight. 0:16:14.440 --> 0:16:17.160 On one side, you've got the folks who are helping 0:16:17.200 --> 0:16:20.960 you scale AI. These are receiving the capex, the others 0:16:21.000 --> 0:16:22.280 who are spending the capex. 0:16:22.640 --> 0:16:24.720 And I think that's the line that's. 0:16:24.560 --> 0:16:26.640 The biggest mental bottle I want to leave the folks with, 0:16:26.720 --> 0:16:29.200 which is, as you look at these businesses, are you 0:16:29.520 --> 0:16:32.200 on the side of receiving the capex, which would be 0:16:32.200 --> 0:16:34.040 the compute layer, of the energy layer, the memory layer 0:16:34.080 --> 0:16:35.880 of the networking layer, or are you on the side 0:16:35.880 --> 0:16:40.600 of spending. And I think that's the biggest divide in 0:16:41.320 --> 0:16:41.920 AI right now. 0:16:42.200 --> 0:16:45.400 But at the moment, we have seen rocket ship when 0:16:45.400 --> 0:16:48.920 it comes to AI infrastructure and those who've been receiving 0:16:48.960 --> 0:16:52.760 all the capital expenditure, and then people just so desirous 0:16:52.840 --> 0:16:54.720 to help fund those that are going to be out 0:16:54.720 --> 0:16:56.600 there and raising it. Whether it be open AI, whether 0:16:56.640 --> 0:16:58.440 it be SpaceX, whether it be anthropic, whether it be 0:16:58.480 --> 0:17:01.680 Google alphabet. Is there enough room for all of these 0:17:01.760 --> 0:17:03.960 large language model There's always been this argument that will 0:17:04.000 --> 0:17:07.200 be commoditized when you're sat thinking about being in Rock 0:17:07.240 --> 0:17:10.240 AI and SpaceX and at the same time Open AI 0:17:10.240 --> 0:17:11.879 and a topic should you be. 0:17:12.960 --> 0:17:17.280 You know, I think there's this narrative of companies doing 0:17:17.359 --> 0:17:19.760 a binary thing. Oh, you're the consumer AI company, or 0:17:19.800 --> 0:17:22.760 you're the enterprise AI company, you're the space AI company. 0:17:23.080 --> 0:17:25.960 I think I think the reality is a lot more multifaceted. 0:17:26.160 --> 0:17:27.680 Right, Let's take Opening I for example. 0:17:28.400 --> 0:17:31.560 I think the product, the company's mission is getting AI 0:17:32.359 --> 0:17:35.160 to the market holistically across consumer. You've got just under 0:17:35.160 --> 0:17:38.080 a billion users on chat GPT. On enterprise they've now 0:17:38.160 --> 0:17:40.600 got five million codex users. That was doing really well. 0:17:40.960 --> 0:17:42.719 And then a long series, you know, long tail of 0:17:42.720 --> 0:17:47.000 other bets with hardware, with robotics, with obviously the frontier 0:17:47.160 --> 0:17:52.159 enterprise offering SpaceX, which is you know, the two largest 0:17:52.160 --> 0:17:55.040 markets on the planet Space ANTII, and so I think 0:17:55.160 --> 0:17:59.680 the selling compute and now they're selling compute elon web services. 0:17:59.280 --> 0:18:02.040 Can actually as you about that, you know that there's 0:18:02.080 --> 0:18:06.120 so many directions we could go. But the space business 0:18:06.119 --> 0:18:08.480 of launch and Starlink two trillion in the TAM Get 0:18:08.520 --> 0:18:12.600 it Enterprise AI. You've kind of answered that, but stealthily 0:18:12.640 --> 0:18:13.880 in there they are. 0:18:14.040 --> 0:18:15.160 Becoming a hyperscaler. 0:18:15.800 --> 0:18:18.800 Right, if you think about the ethropic arrangement, they're almost 0:18:19.240 --> 0:18:22.520 hedging by saying in the interim, we're really good at 0:18:22.520 --> 0:18:23.879 building data center. 0:18:24.600 --> 0:18:27.119 Well, I think I think I would say it's a Switzerland, right, 0:18:27.160 --> 0:18:28.159 it's a Switzerland approach. 0:18:28.200 --> 0:18:29.879 You know, for a long time the first person to 0:18:29.920 --> 0:18:30.480 say that to me. 0:18:30.600 --> 0:18:32.919 So for the longest time we were holding re breath 0:18:33.480 --> 0:18:35.760 for hey, that you did this deal with Cursor, and 0:18:35.800 --> 0:18:38.200 the big question was, well, a lot of Cursor revenues 0:18:38.200 --> 0:18:41.000 come from the great anthropic models. Then they got entropic 0:18:41.280 --> 0:18:44.200 on the platform. Then obviously they're building their own models. 0:18:44.200 --> 0:18:46.560 And so I think of the XAI business as the 0:18:46.560 --> 0:18:49.920 Switzerland business. We're now selling compute, we will sell models, 0:18:49.960 --> 0:18:51.840 we'll have a coding product, we'll have other products down 0:18:51.880 --> 0:18:54.600 the line on consumer, et cetera. And again it's a 0:18:54.600 --> 0:18:57.200 holistic approach, and that's why the TAM is so large. 0:18:57.720 --> 0:19:01.280 Look, we love in the media and more broadly to 0:19:01.359 --> 0:19:03.440 be putting anthropic and open AI in. 0:19:03.400 --> 0:19:05.520 Some race against each other. But do you have as 0:19:05.560 --> 0:19:07.160 a private market investor. 0:19:07.359 --> 0:19:10.720 Any pause that maybe there isn't going to be the 0:19:10.760 --> 0:19:13.800 demand for this rule of public offerings, then in many 0:19:13.800 --> 0:19:16.359 ways it's going to be liquidity to your ultimism. 0:19:16.920 --> 0:19:20.240 Look, I think for the longest time, we've had a 0:19:20.320 --> 0:19:22.880 large part of the market waiting finding ways to get 0:19:22.920 --> 0:19:27.520 access to the biggest super cycle in AI right now, 0:19:27.560 --> 0:19:29.240 and I think that that moment has arrived. 0:19:30.359 --> 0:19:31.760 IPOs are cyclical, as we know. 0:19:31.840 --> 0:19:34.240 You know, the last big cycle was four or five 0:19:34.320 --> 0:19:38.000 years ago in twenty twenty one, and based on everything 0:19:38.000 --> 0:19:40.479 we know, there's a lot of demand for these products 0:19:40.480 --> 0:19:42.639 as they go out in terms of the demand for 0:19:42.680 --> 0:19:45.040 the capabilities. Look, I think in December last year we 0:19:45.160 --> 0:19:48.800 crossed a level of capability with coding models in Opus 0:19:48.840 --> 0:19:51.040 four five that has pushed it to the next frontier 0:19:51.600 --> 0:19:54.600 on consumer as everybody's already experienced and then yet to 0:19:54.600 --> 0:19:57.359 be proven as robotics manufacturing the hardware device that I 0:19:57.400 --> 0:20:00.600 open the Eye is working on, and others more to come. 0:20:00.640 --> 0:20:03.400 And I think more participation is better for us. 0:20:04.119 --> 0:20:06.960 You are, you're teaching at Stamford, and you've kindly invited 0:20:07.000 --> 0:20:09.280 me to come and check out a class, and I will, 0:20:09.320 --> 0:20:12.280 and one of the questions that you pose in a 0:20:12.359 --> 0:20:14.600 series of like guest speakers, right, you know everyone in 0:20:14.600 --> 0:20:17.959 industry and your fellow investors on the cap table. You 0:20:18.000 --> 0:20:20.479 asked them like, what's one idea or long one idea? 0:20:20.520 --> 0:20:24.120 You're sure I explain that, But why do you think 0:20:24.160 --> 0:20:26.320 that's a useful mechanism for understanding the world? 0:20:26.960 --> 0:20:29.480 Well, I like to hold the speakers to what they say. 0:20:29.480 --> 0:20:31.159 I'm going to ask them the question next year and 0:20:31.240 --> 0:20:34.399 have a scorecard of what happened to their long short picks. 0:20:34.640 --> 0:20:37.000 It's my favorite game to play with founders. I learn 0:20:37.040 --> 0:20:40.720 a lot as as founders pick their most optimistic idea, 0:20:40.720 --> 0:20:42.240 they're their most bearish idea. 0:20:42.240 --> 0:20:43.040 And I'll give you the theme. 0:20:43.040 --> 0:20:43.240 You know. 0:20:43.280 --> 0:20:46.960 The theme in this class was more than half of 0:20:47.000 --> 0:20:50.600 the speakers were long the let's call them the fix 0:20:50.680 --> 0:20:56.159 and shovels providers compute most common theme. Energy was the 0:20:56.200 --> 0:21:00.600 second most common theme that is ultimately the bottleneck at scale. 0:21:02.240 --> 0:21:04.480 The most common theme on the short side was was 0:21:04.520 --> 0:21:07.000 folks who are not innovating, incumbents were not innovating. 0:21:08.800 --> 0:21:09.960 You know, it's a fun time and. 0:21:12.080 --> 0:21:14.080 Cos are you short. 0:21:13.680 --> 0:21:15.960 Or what are you not looking at? In a startup space? 0:21:16.000 --> 0:21:18.440 As you're thinking about a wall of liquidity coming to altimiter, 0:21:18.840 --> 0:21:21.240 what would you not like to invest in very quickly. 0:21:22.200 --> 0:21:26.040 Well, I'm an optimist by trade, by profession, in my blood, 0:21:26.480 --> 0:21:28.280 so I'm very optimisticing on a lot of things going on. 0:21:28.359 --> 0:21:31.719 I think the simple mental model that I have is 0:21:31.760 --> 0:21:35.000 if there's a business that gets hurt by the scaling laws, 0:21:35.040 --> 0:21:36.920 it's one of the scaling laws. The scaling laws are 0:21:37.320 --> 0:21:40.320 if you provide more compute, more resources, more data, more algorithms, 0:21:40.359 --> 0:21:43.480 intelligence goes higher. If you're a business that is hurt 0:21:44.400 --> 0:21:47.040 by this empirical observation that intelligence is going to go up, 0:21:47.440 --> 0:21:49.480 that's a tough place to be because we believe intelligence 0:21:49.520 --> 0:21:51.280 is going to go up a lot of all. 0:21:51.320 --> 0:21:53.199 If we could speak to you for hours, it's so 0:21:53.600 --> 0:21:57.320 great to have you here at Bloomberg Tech. Above of alcohol, forces, 0:21:57.359 --> 0:22:00.240 of altimeter capital, fascinating conversation. 0:21:59.880 --> 0:22:09.360 With Welcome back to a special edition of Bloomberg Tech. 0:22:09.400 --> 0:22:12.119 We're live from the Bloomberg Tech event in San Francisco 0:22:12.160 --> 0:22:12.920 on Ed Ludlow. 0:22:13.200 --> 0:22:14.280 That's Caroline Hyde. 0:22:14.320 --> 0:22:14.760 I'm here. 0:22:14.840 --> 0:22:17.600 It's beautiful, but look what's not beautiful is a market 0:22:17.640 --> 0:22:19.439 a little bit today. Let's take a look at today's 0:22:19.440 --> 0:22:23.600 big number three hundred billion dollars head that is roughly 0:22:23.640 --> 0:22:26.680 how much market value we've just lost the Broadcast couch 0:22:26.840 --> 0:22:29.480 after the shares plunged today following the company's earned his 0:22:29.520 --> 0:22:31.840 release last night. Look, we were covering it live for 0:22:32.000 --> 0:22:33.639 us last night and it was a sharp drop. And 0:22:33.680 --> 0:22:36.240 it comes as the company's AI chip sales Beforecast just 0:22:36.280 --> 0:22:40.119 missed Wall streets really lofty expectations as while not raising 0:22:40.119 --> 0:22:42.560 long term AI revenue targets either that the stock fell 0:22:42.600 --> 0:22:44.880 by as much as you can see, well, four five 0:22:44.920 --> 0:22:46.640 forteen percent. We were down as much as fifteen percent 0:22:46.640 --> 0:22:48.240 the worst days of January twenty twenty five. 0:22:48.240 --> 0:22:50.200 But Hot Tan, he's speaking of this evently. 0:22:50.480 --> 0:22:52.720 Yeah, and you know he is going to try and 0:22:52.920 --> 0:22:56.760 give something longer term. But this was about incredibly high 0:22:56.880 --> 0:23:02.240 expectations of what's happening in the AI infrastructure build out cycle. 0:23:03.000 --> 0:23:04.120 Let's get to the software space. 0:23:04.160 --> 0:23:06.600 OCTOR delivered a very strong start for the year by 0:23:06.720 --> 0:23:10.199 beating first for expectations last week, but then raised its 0:23:10.200 --> 0:23:13.439 full year guidance basically across the board, joining us to 0:23:13.480 --> 0:23:17.600 discuss basically a platform shift that's happening, but also emerging 0:23:17.680 --> 0:23:21.200 threats from AI is octor CEO co founder Todd McKinnon. 0:23:21.600 --> 0:23:25.000 You know it was so interesting because you know, at 0:23:25.000 --> 0:23:28.000 the end of the day, numbers and numbers, and you 0:23:28.040 --> 0:23:31.240 had the confidence to raise on the outlook. 0:23:31.400 --> 0:23:32.720 There must be a reason why. 0:23:33.119 --> 0:23:34.880 You know, earlier in the show we're talking with Data 0:23:34.920 --> 0:23:37.760 Bricks and Ali Goodsey about how real. 0:23:37.680 --> 0:23:40.520 Is at the deployment of agents. 0:23:40.840 --> 0:23:43.160 You must know the answers to that act was founded 0:23:43.440 --> 0:23:46.160 in the shift of cloud computing and this new shift 0:23:46.160 --> 0:23:48.879 we're in, the shift to AI and AI agents is 0:23:48.920 --> 0:23:51.959 bigger than anything since the Internet, possibly bigger. And so 0:23:52.000 --> 0:23:54.439 what actor's benefiting from is all this change and all 0:23:54.480 --> 0:23:58.760 this technological evolution. It makes identity even more important than ever. 0:23:59.200 --> 0:24:01.520 Are these applicats, all these services, and then you layer 0:24:01.600 --> 0:24:03.840 on top of that a new product cycle for OCTA. 0:24:03.920 --> 0:24:06.719 The new product cycle is OCTA for AI agents. So 0:24:06.840 --> 0:24:09.000 we have a product that is the identity layer, the 0:24:09.040 --> 0:24:12.000 connectivity for all these AI agents in the enterprise. It's 0:24:12.000 --> 0:24:14.720 a powerful combination that's driving the business on all fronts. 0:24:14.880 --> 0:24:18.080 What makes your offering unique different from other peers? There 0:24:18.080 --> 0:24:20.639 are there many want to be the governance rules, the 0:24:20.680 --> 0:24:21.640 protection layer. 0:24:21.440 --> 0:24:21.800 For this port. 0:24:21.800 --> 0:24:24.160 I think it may surprise you. But it's the focus. 0:24:24.480 --> 0:24:28.879 We're focusing on the connections, the connections between AI agents 0:24:28.920 --> 0:24:32.320 and all the databases and data sources and applications they 0:24:32.320 --> 0:24:35.560 need to be most effective, and that connectivity that is 0:24:35.680 --> 0:24:38.520 very important to the functionality of the agents. But it's 0:24:38.520 --> 0:24:41.280 also something that's very risky from a security perspective. Yeah, 0:24:41.320 --> 0:24:43.440 the more you connect to your agents, the more risk 0:24:43.520 --> 0:24:46.600 of information leaking, the agent going rogue and you having 0:24:46.600 --> 0:24:49.199 to shut it down quickly. So that connectivity and we 0:24:49.240 --> 0:24:51.439 have a blueprint for the industry to how to connect 0:24:51.440 --> 0:24:53.960 those agents securely, and that's really resonating with customers. 0:24:54.960 --> 0:24:59.399 Earlier this week, somebody called Jensen Wang when on stage 0:24:59.400 --> 0:25:01.919 and in front of it camera and said that the 0:25:02.000 --> 0:25:06.919 narrative around software is complete nonsense, and he made the 0:25:07.080 --> 0:25:13.400 argument that for legacy software, agents will become the end users, 0:25:13.920 --> 0:25:16.000 and there are more agents than people in the world, 0:25:16.680 --> 0:25:19.119 and your stock, like everyone else is in your space, 0:25:19.160 --> 0:25:20.560 went absolutely bananas. 0:25:21.760 --> 0:25:23.560 Be honest with me, God, is. 0:25:23.520 --> 0:25:26.639 That helpful to have Gensen Wong Way in like that 0:25:27.400 --> 0:25:28.639 or would you just wish you didn't? 0:25:28.720 --> 0:25:32.119 Well, if you zoom out and look what's happening. I 0:25:32.200 --> 0:25:35.000 mentioned earlier the transition of the cloud fifteen years ago. 0:25:35.400 --> 0:25:37.960 The transition to AI is similar in that every layer 0:25:38.000 --> 0:25:40.560 of the stack is being reimagined and reinvented, from the 0:25:40.560 --> 0:25:43.800 hardware layer, to the infrastructure layer, to the platform layer, 0:25:43.840 --> 0:25:46.640 to the development tool layer, to the application layer. And 0:25:46.720 --> 0:25:50.280 so every vendor has an important priority to make sure 0:25:50.280 --> 0:25:54.320 they reinvent themselves with these agentic capabilities and these capabilities 0:25:54.320 --> 0:25:56.719 of automation. But this one is actually different. There's a 0:25:56.760 --> 0:25:59.480 new layer on top of all this. And this new layer, 0:25:59.520 --> 0:26:03.080 which is not hasn't happened in previous generations of technology change. 0:26:03.160 --> 0:26:05.399 There's a new layer, and that's the layer of digital work. 0:26:05.680 --> 0:26:08.520 It's a whole new category, a whole new opportunity that 0:26:08.600 --> 0:26:11.800 everyone's going after in addition to reinventing themselves in their 0:26:11.840 --> 0:26:14.480 own business. And that's I talked about this two pronged 0:26:15.160 --> 0:26:18.119 drivers of our business. We have the reinvention and the 0:26:18.200 --> 0:26:22.960 reprioritization of identity, and this new layer for automated digital work, 0:26:23.240 --> 0:26:26.400 which are octafer AI agents, is powering and playing right into. 0:26:26.400 --> 0:26:29.680 What does it mean for your own workforce, for your 0:26:29.720 --> 0:26:31.080 own human capital? 0:26:31.560 --> 0:26:33.159 Are you're needing as much of it? 0:26:33.880 --> 0:26:36.919 They have to be more effective and more productive, and 0:26:37.000 --> 0:26:39.000 the tools are there to do that, whether it's clog 0:26:39.080 --> 0:26:41.480 code or whether it's the latest marketing tool or support tool. 0:26:41.720 --> 0:26:43.399 They have to be more effective and they have to 0:26:43.400 --> 0:26:44.320 deliver value. 0:26:44.240 --> 0:26:46.120 Keeps the same amount of people working. 0:26:46.240 --> 0:26:46.440 Well. 0:26:46.600 --> 0:26:48.320 This is where I disagree with a lot of people. 0:26:48.440 --> 0:26:50.159 I think in five years Octa is going to have 0:26:50.200 --> 0:26:52.439 far more software engineers that we have now, and you 0:26:52.480 --> 0:26:55.040 want them to be reproducting, you want them to be 0:26:55.200 --> 0:26:57.520 generating tokens. And that's because it's a little bit of 0:26:57.560 --> 0:27:00.679 a trick answer, because the reason we'll have more is 0:27:00.760 --> 0:27:02.840 not because they won't be more efficient. It's because there's 0:27:02.880 --> 0:27:05.360 just so much more capability to build. There's so much 0:27:05.400 --> 0:27:08.160 demand for software, and there's so much power of the automation. 0:27:08.240 --> 0:27:09.200 We're very excited about this. 0:27:09.359 --> 0:27:13.080 So the Bloombo tech audience is in industry, it is sophisticated, 0:27:13.119 --> 0:27:15.240 but lots of people this is so abstract. 0:27:15.320 --> 0:27:15.639 Still. 0:27:16.200 --> 0:27:18.200 The thing that I always get frustrated with with an 0:27:18.240 --> 0:27:21.080 agent is that I just want it to act. So 0:27:21.160 --> 0:27:22.919 if you take this as a random case study, but 0:27:23.000 --> 0:27:25.440 like my flight gets canceled, I have to phone a 0:27:25.520 --> 0:27:28.000 human still, even within Bloomberg, try and. 0:27:27.920 --> 0:27:28.680 Get that resolved. 0:27:28.880 --> 0:27:31.200 But there is a world that you're pitching where they 0:27:31.200 --> 0:27:33.800 have access to my credit card, the flight information. 0:27:33.880 --> 0:27:34.600 It just happened. 0:27:34.600 --> 0:27:36.600 These are the connections I'm talking about the connections of 0:27:36.600 --> 0:27:37.679 the data that has to be secure. 0:27:38.600 --> 0:27:41.320 What is the barrier in the world right now? You know, 0:27:41.440 --> 0:27:45.080 Corporate America, companies around the planet, that is preventing this 0:27:45.280 --> 0:27:45.840 just happening. 0:27:46.240 --> 0:27:49.520 The barrier is people thinking about models, and we herald 0:27:49.560 --> 0:27:52.600 model advancements. The reality is is that the models are 0:27:52.640 --> 0:27:55.359 out of capability now, far surpassed in our ability to 0:27:55.359 --> 0:27:59.560 simply connect the systems together and get practical argentic applications built. 0:28:00.040 --> 0:28:01.680 But that's great because there's a lot of smart people 0:28:01.680 --> 0:28:03.840 in the world working on connecting them, and we're focused 0:28:03.840 --> 0:28:05.360 on making sure they're connected securely. 0:28:05.800 --> 0:28:07.040 And that's why the future is very. 0:28:07.040 --> 0:28:09.159 That's what I meant though, like are we worried about 0:28:09.680 --> 0:28:12.399 how secure that potential transaction is or not? 0:28:12.760 --> 0:28:14.400 We have to be always worried about security. 0:28:14.560 --> 0:28:17.600 You're connecting sensitive data and automating it in new ways 0:28:17.640 --> 0:28:19.600 and there's always risk in that, and that's why I 0:28:19.600 --> 0:28:21.960 think our solutions are resonating so much, just as practical 0:28:21.960 --> 0:28:24.560 focus on we want things to be more automated. We 0:28:24.600 --> 0:28:27.320 want these agents to have more capability. They need more data. 0:28:27.359 --> 0:28:29.639 How do we pragmatically do that in a secure and 0:28:29.640 --> 0:28:31.840 manageable way. And that's what oktafer Ai agents does. 0:28:32.200 --> 0:28:35.080 And so this talk of SaaS pocalypse, I. 0:28:35.000 --> 0:28:38.800 Think it's completely over bloom. It's completely over bloom. I 0:28:38.840 --> 0:28:41.640 think there will be SaaS companies that don't embed these 0:28:41.640 --> 0:28:44.480 capabilities in their offerings. Just like in the revolution and 0:28:44.480 --> 0:28:46.080 the move to the cloud, there were companies that were 0:28:46.120 --> 0:28:49.200 left behind and became legacy vendors and Resolve bought up 0:28:49.240 --> 0:28:52.160 by Oracle. That'll happen too, but there all also be 0:28:52.200 --> 0:28:54.800 mini vendors that make the transition and thrive in the future. 0:28:55.200 --> 0:28:57.480 And that's why you're proving it up to CEO co 0:28:57.640 --> 0:29:00.200 found and Tom McKinnon. It's great to have it here 0:29:00.200 --> 0:29:02.600 at Bloomberg Tech. The live event in San Francisco, and 0:29:02.640 --> 0:29:06.120 coming up we have the personification of the San Francisco economy. 0:29:06.280 --> 0:29:08.600 We've got the San Francisco for Bed president Mary Daily 0:29:08.680 --> 0:29:11.840 joining us live. We're going to discuss AI's economic impact 0:29:11.880 --> 0:29:14.800 on the people, on the productivity, the risks that are 0:29:14.800 --> 0:29:17.120 getting perhaps overlooked god Rails. 0:29:16.880 --> 0:29:18.560 Maybe needed this is BLUEBG Tech. 0:29:27.080 --> 0:29:30.040 We are live from the Bloomberg Tech event in the 0:29:30.080 --> 0:29:32.680 heart of San Francisco, and look, the debate is rich 0:29:32.760 --> 0:29:35.040 around AI's economic disruption. 0:29:35.440 --> 0:29:36.600 Is it growing more intense? 0:29:37.040 --> 0:29:40.240 Some see the technology that can unlock enormous gains and 0:29:40.280 --> 0:29:43.240 productivity and growth, but others that they warn of disruption, 0:29:43.320 --> 0:29:45.760 of unintended consequences. And we want to try and understand 0:29:46.520 --> 0:29:48.080 the sort of messy middle of all of this with 0:29:48.200 --> 0:29:50.720 Mary Daily, President of Federal Reserve. 0:29:50.480 --> 0:29:51.520 Bank of San Francisco. 0:29:51.720 --> 0:29:54.800 Mary Daily, extraordinary the data that you now have to 0:29:54.880 --> 0:29:58.680 lean upon, trying to understand what's fact, what's fiction, what's utopia, 0:29:58.800 --> 0:30:02.480 what sensation? Who do you go to field field dates 0:30:02.520 --> 0:30:04.000 on whether productivity is working. 0:30:04.240 --> 0:30:06.840 I thought of the businesses who were using the technology, 0:30:06.920 --> 0:30:10.520 because you can always encounter enthusiasts or doom sayers, but 0:30:10.600 --> 0:30:12.520 it's really the people in the middle, as you said, 0:30:12.560 --> 0:30:15.760 who are using that technology thinking about it, and I've 0:30:15.800 --> 0:30:19.400 seen tremendous interest in it it last year and now 0:30:19.440 --> 0:30:22.160 I'm seeing tremendous investment in it, thinking about how do 0:30:22.200 --> 0:30:24.960 they train their workforces to be AI ready, how do 0:30:25.040 --> 0:30:27.080 they think about what AI can do, not just in 0:30:27.120 --> 0:30:28.360 the back office but. 0:30:28.280 --> 0:30:30.320 In the front of a house of operations. 0:30:30.360 --> 0:30:33.440 And we're seeing this in small businesses, medium and large, 0:30:33.800 --> 0:30:37.600 in global companies and more regional ones, and importantly in 0:30:37.640 --> 0:30:42.960 everything from agriculture to machining and building things to services. 0:30:43.000 --> 0:30:45.440 And I think that's really the place we haven't seen 0:30:45.800 --> 0:30:49.480 widespread productivity gains yet. The ROI is still to be developed, 0:30:49.680 --> 0:30:52.400 but I'm definitely seeing the enthusiasm and it's picked up 0:30:52.720 --> 0:30:54.720 tremendously in the last year. 0:30:55.120 --> 0:30:58.080 We haven't seen the productivity gains yet. You know, you're 0:30:58.120 --> 0:31:01.000 being very clear on that. As you remember, I asked 0:31:01.000 --> 0:31:04.160 you over and over again for an hour, please show 0:31:04.240 --> 0:31:08.120 me the productivity gains. But in the economic data, whichever 0:31:08.480 --> 0:31:11.120 set of data you want to look at, do you 0:31:11.240 --> 0:31:14.440 see an impact from AI negative or positive? 0:31:14.680 --> 0:31:15.960 It's really hard to take. 0:31:16.240 --> 0:31:18.720 We have had productivity growth that's been outside of the 0:31:18.840 --> 0:31:21.040 historical norm, and I think that's a positive for the 0:31:21.120 --> 0:31:21.880 US economy. 0:31:22.120 --> 0:31:23.680 Everyone wants to say that's AI. 0:31:24.200 --> 0:31:27.600 What I think of it is as sure, it's possible 0:31:27.800 --> 0:31:31.040 that businesses are looking for cost savings and they hire 0:31:31.080 --> 0:31:33.360 fewer workers than they do just as much because they're 0:31:33.480 --> 0:31:37.720 using an LA assistant to help. But we just haven't 0:31:37.760 --> 0:31:42.760 heard from businesses that they're seeing transformative ongoing productivity gains 0:31:43.120 --> 0:31:45.680 yet and they want to always underscore yet. And so 0:31:45.720 --> 0:31:47.840 then I said, well, what's the timeframe and they said 0:31:48.120 --> 0:31:51.600 next year, year after. Because what we know is it 0:31:51.640 --> 0:31:54.280 isn't just about getting a model and using it for 0:31:54.400 --> 0:31:58.280 things or an agent. It's about transforming your business processes 0:31:58.520 --> 0:32:00.600 so that you really take advantage of things we don't 0:32:00.600 --> 0:32:03.320 even think about today, what can be done differently that 0:32:03.360 --> 0:32:07.000 we'll transform the economy. So you can definitely find a 0:32:07.160 --> 0:32:10.520 single business or sectors who are using it and seeing 0:32:10.520 --> 0:32:13.520 the gains, but we haven't seen that across the economy 0:32:13.600 --> 0:32:14.240 going forward. 0:32:14.280 --> 0:32:17.920 But I'm pretty bullish. I see the possibilities. 0:32:17.320 --> 0:32:20.120 And I'm hearing more and more that people are seeing 0:32:20.160 --> 0:32:24.120 early rewards and really recognizing that next year is the 0:32:24.160 --> 0:32:24.840 litmus test. 0:32:25.120 --> 0:32:27.800 But this is an interesting kind of phrase today, putting 0:32:27.880 --> 0:32:32.760 aside the slight dip in the market, the exuberance that 0:32:32.800 --> 0:32:35.680 we have seen in financial markets to want to back 0:32:35.720 --> 0:32:39.440 these companies, and we're about to get more public companies coming, 0:32:39.680 --> 0:32:41.080 more liquidity. 0:32:40.560 --> 0:32:41.520 More money. 0:32:42.200 --> 0:32:45.320 Is that in and of itself a financial stability issue. 0:32:45.480 --> 0:32:47.320 You worried about the market's rioting. 0:32:47.080 --> 0:32:47.520 So high. 0:32:47.640 --> 0:32:50.600 You remember, you know who's doing most of this investment, 0:32:50.720 --> 0:32:54.000 the mag seven who's really there. This is actually something 0:32:54.040 --> 0:32:58.200 they can do and fund, and their enthusiasm is real. 0:32:58.280 --> 0:33:01.720 They see what's possible. But I don't think that we 0:33:01.840 --> 0:33:04.920 should think, oh, there's financial stability concerns just because the 0:33:04.920 --> 0:33:07.959 market's gone up. It could go up or down as 0:33:08.000 --> 0:33:10.800 it has in the past, but a financial stability issue 0:33:10.800 --> 0:33:13.080 would mean it's spread to the banks, it's spread to 0:33:13.160 --> 0:33:17.240 consumers or businesses. Right now, I'm not seeing evidence of that. 0:33:17.440 --> 0:33:20.080 We keep our eye on it for absolute sure, But 0:33:20.160 --> 0:33:23.400 what I am seeing is that companies other than the 0:33:23.960 --> 0:33:29.000 technology enthusiasts, companies outside of technology, are using AI to 0:33:29.080 --> 0:33:32.000 think about how to do their business better in real ways. 0:33:32.040 --> 0:33:35.720 I mean, I was just meeting with some machine machines 0:33:36.000 --> 0:33:39.040 for a living, that's what they do, and they're thinking about, 0:33:39.040 --> 0:33:41.560 how do I scan in fifty years of plans of 0:33:41.600 --> 0:33:44.560 these machines I've built for companies and then use those 0:33:44.600 --> 0:33:48.240 plans in a model to generate innovative new ideas of 0:33:48.480 --> 0:33:51.360 things I can sell that will be faster, better, cheaper 0:33:51.400 --> 0:33:54.400 than things I've sold before. We toured a robotics company 0:33:54.400 --> 0:33:58.040 that builds things that help manufacturers do better in terms 0:33:58.080 --> 0:34:01.400 of shipping and distribution. These are real things that do 0:34:01.520 --> 0:34:04.960 have a capacity to change the economy. So that's why 0:34:05.120 --> 0:34:07.280 that's the underlying part of my bull ish It has 0:34:07.360 --> 0:34:10.279 less to do about the investments that tech companies are 0:34:10.280 --> 0:34:14.840 making and more about the investments that everyday regular companies 0:34:14.880 --> 0:34:16.840 that make things and provide services. 0:34:17.080 --> 0:34:17.960 The things they're. 0:34:17.719 --> 0:34:21.640 Doing president daily inflation is still the biggest risk. 0:34:22.280 --> 0:34:24.680 And you know those are not my words. 0:34:24.680 --> 0:34:26.600 We heard it, you know, all week long at the 0:34:26.600 --> 0:34:30.200 Bloomberg Credit Forum, for example. One of the things that 0:34:30.239 --> 0:34:32.920 you and I have discussed in the past is is 0:34:33.000 --> 0:34:37.759 the massive CAPEX commitment build out of data center in 0:34:37.800 --> 0:34:40.800 conjunction with a bottleneck in some core areas like memory 0:34:41.120 --> 0:34:45.440 inflationary or is it disinflationary? You know, that's the thesis 0:34:45.480 --> 0:34:49.120 that like a utility of pgene would argue disinflationary because 0:34:49.120 --> 0:34:52.480 the big guys are buying and aggregate. I still don't 0:34:52.560 --> 0:34:53.680 understand where we are with that. 0:34:53.880 --> 0:34:56.600 It's a timing issue in my judgment that you know, 0:34:56.680 --> 0:34:59.840 in the beginning of course, when companies want to invest 0:34:59.880 --> 0:35:04.080 in big construction projects a lot of electro electricity demand, 0:35:04.560 --> 0:35:08.200 then the companies that are providing those things or areas 0:35:08.200 --> 0:35:10.880 that are providing those things are going to see competition 0:35:11.120 --> 0:35:13.960 for the limited amount of services they have. But what 0:35:14.000 --> 0:35:18.400 they're building creates the infrastructure. The data centers create the infrastructure. 0:35:18.480 --> 0:35:19.200 Or if the big. 0:35:19.040 --> 0:35:21.480 Guys come in as you just said and help with 0:35:21.560 --> 0:35:26.160 electrical plants that help with electricity generation, that eventually can 0:35:26.200 --> 0:35:28.160 help with the prices of those things. 0:35:28.239 --> 0:35:30.400 Don't hear it now, but you just have to think. 0:35:30.239 --> 0:35:31.040 About the timing. 0:35:31.080 --> 0:35:33.840 And one of the things is really important in policy 0:35:33.880 --> 0:35:36.640 making is that we not assume we know. We actually 0:35:36.680 --> 0:35:38.440 look for the evidence of what are we seeing in 0:35:38.480 --> 0:35:41.120 prices today, what are we seeing in what is the 0:35:41.160 --> 0:35:43.600 forecast of prices tomorrow? And then how do we think 0:35:43.640 --> 0:35:46.799 about policy. So right now I'm focused on you know, 0:35:46.880 --> 0:35:50.280 other energy prices, oil prices, and food prices are driving 0:35:50.360 --> 0:35:53.560 up inflation. What we do know that down the road 0:35:53.719 --> 0:35:57.600 these things could maybe compete for services and costs and 0:35:57.680 --> 0:36:00.399 raise costs, but we haven't seen real evidence that that's 0:36:00.440 --> 0:36:02.640 the limiting factor. The limiting factor seems it's hard to 0:36:02.680 --> 0:36:05.840 get generators, it's hard to get the infrastructure equipment you need, 0:36:06.080 --> 0:36:08.200 and so you see the big tech companies thinking about 0:36:08.520 --> 0:36:10.600 solutions they can provide for themselves. 0:36:10.760 --> 0:36:13.640 The infrationary data must be fascinating here in San Francisco. 0:36:13.680 --> 0:36:16.160 When I think about all these companies potentially going competent, well, 0:36:16.239 --> 0:36:18.080 that means to the employee base, well, that means that 0:36:18.400 --> 0:36:20.560 your health price and the ability to be. 0:36:20.560 --> 0:36:22.719 Able to buy yet more readA state here. What it 0:36:22.760 --> 0:36:25.080 means for the cost of labor as well. Is there an. 0:36:24.960 --> 0:36:28.239 Infrasery pressure that you're seeing in San Francisis I've lived through. 0:36:28.520 --> 0:36:30.759 So I moved to San Francisco in nineteen ninety six 0:36:31.120 --> 0:36:32.960 and then that we have the dot com and I 0:36:33.040 --> 0:36:34.520 know what it feels like to not be able to 0:36:34.520 --> 0:36:37.719 rent a place that's affordable because the people who are 0:36:37.719 --> 0:36:41.279 making milliony more orders of magnitude. And I was in 0:36:41.320 --> 0:36:46.040 a position where that's manageable. But that's what's happening, is 0:36:46.080 --> 0:36:49.120 people feel like they're getting crowded out because other things 0:36:49.120 --> 0:36:51.760 are happening. But that's more about the supply of housing 0:36:52.120 --> 0:36:54.479 than it is about the demand for housing. We want 0:36:54.520 --> 0:36:57.279 people to come and invest in this community. We want 0:36:57.320 --> 0:37:00.840 the city to thrive. We want regional activity and employment 0:37:00.880 --> 0:37:03.279 to grow. But as you said, you know, the more 0:37:03.320 --> 0:37:05.360 interest people have in living in a place. If you 0:37:05.400 --> 0:37:07.719 have limited supply of housing, then you're going to have 0:37:07.840 --> 0:37:10.560 a run up. So those are the things that not 0:37:10.680 --> 0:37:14.360 the FED, but other policymakers, other federal policies makers, and 0:37:14.400 --> 0:37:17.600 local policy makers like the mayor are working on. But 0:37:17.680 --> 0:37:19.880 it looks very you know, you'd see the elements of 0:37:19.960 --> 0:37:24.400 nineteen ninety six already here, where there's productivity, growth, there's enthusiasm, 0:37:24.480 --> 0:37:24.960 et cetera. 0:37:25.239 --> 0:37:27.200 But the data bubble, is there a risk that we're 0:37:27.200 --> 0:37:28.080 in not saying, you know, the. 0:37:28.080 --> 0:37:31.680 Dot com was very different than the AI boom, and 0:37:31.719 --> 0:37:33.799 so I just want to you know, there's a lot 0:37:33.840 --> 0:37:38.080 there that's already being put into businesses and it's very pervasive. 0:37:38.239 --> 0:37:39.720 It's not just the dot com. 0:37:39.760 --> 0:37:42.239 So I don't jump to the conclusion that if it 0:37:42.320 --> 0:37:44.880 has similarities to the nineties, it's going to be the. 0:37:44.960 --> 0:37:48.040 Nine Well, if I may presented, you went out and 0:37:48.080 --> 0:37:50.000 did some of the most important work in that era 0:37:50.040 --> 0:37:53.520 of how the advent of the internet would change the economy. Look, 0:37:53.600 --> 0:37:55.960 so you've kind of established where we sit right now. 0:37:56.719 --> 0:38:01.520 Inflation continues to rise, how like or unlikely would that 0:38:01.680 --> 0:38:04.640 make a rate cut in twenty twenty six? How do 0:38:04.680 --> 0:38:07.480 you tie the two together from this juncture onward. 0:38:07.560 --> 0:38:09.239 You know, I think one of the questions I get 0:38:09.239 --> 0:38:12.960 asked regularly is what's the path. 0:38:12.760 --> 0:38:14.320 For the rates going forward? 0:38:14.400 --> 0:38:16.439 Yeah, And the answer I give, because this is how 0:38:16.840 --> 0:38:19.480 I really think we have to think about it, is 0:38:20.160 --> 0:38:22.800 we don't know how the economy is going to play out. 0:38:23.000 --> 0:38:26.799 We have, as we've been talking about, this tremendous possibility 0:38:26.800 --> 0:38:29.560 with Ai, but we have the same time the war 0:38:29.600 --> 0:38:33.000 in Iran, that is with an uncertain end, which has 0:38:33.040 --> 0:38:36.880 pushed oil prices up and fertilizer prices which have filtered 0:38:36.880 --> 0:38:40.240 into food prices. And right now those are fairly contained. 0:38:40.280 --> 0:38:42.200 And if you look at the futures market for oil, 0:38:42.239 --> 0:38:44.279 it's eighty dollars a barrel by the end of the year. 0:38:44.600 --> 0:38:47.200 But you know, we have to think about that, and 0:38:47.239 --> 0:38:49.640 so right now policy is in a good place. We 0:38:49.800 --> 0:38:53.200 are prepared to respond either way whatever the economy brings. 0:38:53.400 --> 0:38:54.279 But I think give a. 0:38:54.239 --> 0:38:57.680 More forward guidance about what's possible could be misguiding in 0:38:57.719 --> 0:38:59.440 the end, because we just have to wait for the 0:38:59.480 --> 0:39:03.400 economy revolve. Everybody wants to resolve the uncertainty today, but 0:39:03.480 --> 0:39:06.600 I think that's a mistake because it will close off 0:39:06.640 --> 0:39:08.759 our mind about what we really have to look at 0:39:09.080 --> 0:39:12.319 the inflation risk possibility, but also the possibility of the 0:39:12.360 --> 0:39:15.359 war end. Oil prices come back down and we're back 0:39:15.400 --> 0:39:18.040 to the underlying dynamics which some of the positives of 0:39:18.080 --> 0:39:19.400 AI we've been talking about. 0:39:19.920 --> 0:39:21.960 Can I ask you about the labor market as well, 0:39:22.000 --> 0:39:24.000 because you've tried to bring this transparency of how you're 0:39:24.000 --> 0:39:26.239 thinking about things with your blog, for example, and one 0:39:26.280 --> 0:39:28.040 of the really interesting ones that I was reading and 0:39:28.080 --> 0:39:29.959 capture my attention was the idea that we've got zero 0:39:30.040 --> 0:39:34.240 labor growth now immigrations changed the way in which demographics change. 0:39:35.200 --> 0:39:39.440 Are you feeling like we've seen some improvement, some resilience 0:39:39.440 --> 0:39:40.120 in the labor. 0:39:39.880 --> 0:39:42.400 Market again, and will that hold? 0:39:42.600 --> 0:39:43.440 Has it firmed? 0:39:43.680 --> 0:39:44.399 Yeah, you know, I. 0:39:44.360 --> 0:39:46.920 Think that's too early to stay firmed. I think we're 0:39:47.120 --> 0:39:49.840 you know, there's always statistical air, so you can bounce 0:39:49.880 --> 0:39:52.120 around from month to month. But if you you know, 0:39:52.160 --> 0:39:55.480 I was one of the people who policymakers who were 0:39:55.680 --> 0:39:57.600 a little worried about the labor market at the end 0:39:57.600 --> 0:40:00.440 of last year were very supportive of the cuts we 0:40:00.480 --> 0:40:02.640 took to stabilize conditions there. 0:40:02.960 --> 0:40:04.759 So relative to that point. 0:40:04.480 --> 0:40:07.600 I think this is we've really stabilized, and I'm starting 0:40:07.640 --> 0:40:11.919 to see businesses feel a little more cautiously optimistic, which 0:40:11.960 --> 0:40:15.719 we'll feed through to hiring. But they're not being you know, 0:40:15.880 --> 0:40:16.919 they're not just running out. 0:40:16.840 --> 0:40:19.759 To hire people. They are right, I can get an agent. 0:40:19.800 --> 0:40:22.520 They're interrogating how much AI can do for them before 0:40:22.560 --> 0:40:25.480 they hire. And you know, regularly we talk to our 0:40:25.520 --> 0:40:27.200 businesses and they say, we don't want to hire a 0:40:27.239 --> 0:40:30.760 bunch of people. Find out AI can do certain things, 0:40:30.800 --> 0:40:33.000 and we did a different set of skills, so we 0:40:33.040 --> 0:40:35.160 want to wait. We want to be patient on our 0:40:35.239 --> 0:40:38.319 hiring and make sure we're not over hiring, because you know, 0:40:38.320 --> 0:40:41.160 if you ever go through a period of time where 0:40:41.160 --> 0:40:43.720 a business has to lay workers off, it's a painful 0:40:43.760 --> 0:40:46.200 experience for the workers and for them. And so they 0:40:46.280 --> 0:40:49.080 just don't want to get overly confident only to find 0:40:49.120 --> 0:40:50.400 out they have to make adjustments. 0:40:50.400 --> 0:40:52.200 So that caution will be with us for a bit. 0:40:52.400 --> 0:40:55.520 We are live on Bloomberg Television and Bloomberg Radio. We're 0:40:55.520 --> 0:40:58.000 in San Francisco and we're at the Bloomberg Tech event 0:40:58.040 --> 0:41:02.240 and we're speaking with San Francisco that Marry Daily reset 0:41:02.280 --> 0:41:04.799 a little bit. But if I may it's the first 0:41:04.880 --> 0:41:08.319 opportunity we've had to ask you. Have you spoken to 0:41:08.440 --> 0:41:11.719 Chairman wa Wash about how he sees the FED evolving 0:41:12.239 --> 0:41:15.480 about changes to the institution and if you may fold 0:41:15.520 --> 0:41:18.800 in the context of your district San Francisco Fed. Yes, 0:41:19.080 --> 0:41:22.440 much more than that and your role going forward. 0:41:22.760 --> 0:41:24.040 Sure, absolutely so. 0:41:24.040 --> 0:41:26.279 You know, I think what we really want when any 0:41:26.320 --> 0:41:28.799 new chair comes in, and what we want from all 0:41:28.840 --> 0:41:31.319 of our leaders of FEDERALI serve banks and all of 0:41:31.320 --> 0:41:34.680 our governors, is that you're thinking constantly about how can 0:41:34.719 --> 0:41:36.840 the FED be better? How can it better shave the 0:41:36.840 --> 0:41:39.360 American people? How can we do our work more efficiently, 0:41:39.760 --> 0:41:43.840 more effectively, and more resiliently. You know, ultimately everything we 0:41:43.920 --> 0:41:48.080 talk about is put between two bookends. We are fiduciary 0:41:48.080 --> 0:41:51.759 stewarts of public trust, which means we better have services 0:41:51.760 --> 0:41:54.239 that people can depend on and we better work hard 0:41:54.239 --> 0:41:57.720 to achieve our goals. And we're fiduciary stewards of public funds, 0:41:57.840 --> 0:41:59.960 which is we are very careful. 0:41:59.640 --> 0:42:01.680 About how we spend taxpayer dollars. 0:42:01.960 --> 0:42:04.200 So with those two things in mind, you know, I 0:42:04.480 --> 0:42:07.080 mentioned I joined the FED back in the nineties. So 0:42:07.160 --> 0:42:09.319 I joined the FED in the nineties and we had 0:42:09.400 --> 0:42:12.560 check processing. Remember checks, we had check processing. 0:42:12.680 --> 0:42:14.160 I stopped the right legs. 0:42:13.800 --> 0:42:16.400 Everywhere, everywhere in the everywhere. 0:42:16.040 --> 0:42:18.720 We had a location, we had people who process checks. 0:42:18.920 --> 0:42:22.319 But then check demand started to fall, and so we 0:42:22.440 --> 0:42:26.520 consolidated those activities into a few locations. And that level 0:42:26.560 --> 0:42:30.000 of modernizing, constantly thinking about how can you do better? 0:42:30.280 --> 0:42:31.200 Is what I see now. 0:42:31.320 --> 0:42:33.080 So what is the chair's equivalent of that? 0:42:33.560 --> 0:42:35.320 Well, just joined. 0:42:35.520 --> 0:42:37.719 So I'm going to give him the right time he 0:42:37.800 --> 0:42:41.399 has to announce that. He's talked about making sure he's 0:42:41.400 --> 0:42:44.120 holding onto that tradition, and he comes in with a 0:42:44.160 --> 0:42:46.560 lot of ideas. But you know what I've heard him 0:42:46.560 --> 0:42:49.359 say again and again, which I really appreciate because all 0:42:49.480 --> 0:42:50.920 he's the fifth chair I've worked with. 0:42:51.360 --> 0:42:53.400 All of the chairs I've worked with have the same 0:42:53.800 --> 0:42:56.440 basic compass. 0:42:56.800 --> 0:42:59.000 It is to do our best work for the American 0:42:59.040 --> 0:43:02.200 people and work with all the individuals who are earnestly 0:43:02.239 --> 0:43:04.520 doing their work in the FED to do it well. 0:43:04.760 --> 0:43:07.480 And I see that in chair worsh that earnest work 0:43:07.520 --> 0:43:10.520 within the FED. How much of that is being multignized 0:43:10.640 --> 0:43:11.960 to use adult AI. 0:43:12.160 --> 0:43:13.839 How hard or easy is it at the moment when 0:43:13.880 --> 0:43:16.280 you're such a regulated the institution in and of yourself. 0:43:16.280 --> 0:43:20.200 Well, we're careful like all regulated institutions, and importantly like 0:43:20.239 --> 0:43:23.200 all businesses. Businesses, and when I talk to businesses, the 0:43:23.320 --> 0:43:25.680 last thing they want to do is a huge risk 0:43:25.760 --> 0:43:29.120 that destroy their shareholders. They're the value of their company. 0:43:29.360 --> 0:43:32.000 The same is true for us. Good fiduciary stewarts of 0:43:32.000 --> 0:43:35.359 public trust and good fiduciary stuarts of public funds, which 0:43:35.400 --> 0:43:38.200 means we're always driving to adopt new technology to do 0:43:38.239 --> 0:43:40.920 our work more efficiently, but we recognize we have to 0:43:40.960 --> 0:43:42.880 do that safely. You know, people want to know they 0:43:42.880 --> 0:43:44.879 can get their money when they need it. They want 0:43:44.920 --> 0:43:47.359 to know that the banks are well supervised. They want 0:43:47.400 --> 0:43:50.160 to know that Montarry policy is not made by machines. 0:43:50.200 --> 0:43:52.720 It's made by people making judgments not. 0:43:52.640 --> 0:43:56.600 Only about models and rules, but also about the lived 0:43:56.600 --> 0:43:58.360 experiences of people across our country. 0:43:58.440 --> 0:44:01.200 Very quickly, before the show ends, what are you seeing 0:44:01.239 --> 0:44:05.320 in credit? That's a big story for us in how. 0:44:05.440 --> 0:44:08.760 Data centers are financed. For some it's very worrying. 0:44:09.280 --> 0:44:13.120 Well, you know, we're watching that carefully. I watched that carefully. 0:44:13.360 --> 0:44:15.399 What we do see is that there's a lot of 0:44:15.640 --> 0:44:18.680 there's those companies investing a lot of their own resources 0:44:18.719 --> 0:44:21.239 in those So it's something to keep our eye on. 0:44:21.440 --> 0:44:24.360 But at this point, you know, again, if you stack 0:44:24.480 --> 0:44:28.000 rank the things that are worrying today, I'd say getting 0:44:28.000 --> 0:44:31.840 inflation back to target, getting Americans the relief they deserve 0:44:31.920 --> 0:44:34.040 that we've been working on for quite a while. 0:44:33.920 --> 0:44:35.280 That's my number one priority. 0:44:36.000 --> 0:44:37.879 I'm Francisco President, Mary Daddy. 0:44:37.880 --> 0:44:40.280 You've been very generous of your time, and we always 0:44:40.360 --> 0:44:44.359 cover such a broad spectrum of topics. Really grateful to 0:44:44.360 --> 0:44:46.400 have you here with us in San Francisco at the 0:44:46.400 --> 0:44:47.240 bloombo Tech event. 0:44:47.400 --> 0:44:49.799 Yeah, what an event it has been, What an event 0:44:49.880 --> 0:44:50.640 it continues to do. 0:44:50.640 --> 0:44:52.359 We're just getting started, and I know that does there's 0:44:52.360 --> 0:44:53.880 addition to Bloomberg. 0:44:53.440 --> 0:44:55.600 Tech for the TV show. Yeah, but you've. 0:44:55.440 --> 0:44:56.320 Got to stay tuned. 0:44:56.560 --> 0:45:00.360 The rest of Bloomberg Tech event today has some phenomenal conversation. 0:45:00.120 --> 0:45:00.480 Just coming up. 0:45:00.520 --> 0:45:04.080 I'm lucky enough to be speaking again with the San 0:45:04.080 --> 0:45:05.799 Francisco Fed Chair of course, Mary Day. 0:45:05.880 --> 0:45:07.560 But you look for the lineup that what we've got 0:45:07.600 --> 0:45:07.960 coming up. 0:45:08.080 --> 0:45:10.120 Yeah, and I'm going to be speaking to Trey Stevens, 0:45:10.160 --> 0:45:13.359 partner at Founders Fun, chairman of Andreil but Founder's Fund 0:45:13.400 --> 0:45:17.919 is a high single digit percent stakeholder of SpaceX. Don't 0:45:17.920 --> 0:45:21.120 forget SpaceX's IPO pricing June eleven. 0:45:22.440 --> 0:45:23.480 Yeah, that's a big deal. 0:45:24.239 --> 0:45:27.200 Recap the show, a lot of really great conversations on 0:45:27.239 --> 0:45:30.120 the podcast. You guys know where it's at online, Spotify, iHeart, 0:45:30.120 --> 0:45:33.000 and Apple and all the Bloomberg platforms as well. 0:45:33.920 --> 0:45:35.480 Stay tuned. This is Bloomberg Tech.