WEBVTT - Yellen Sends Default Warning If Congress Fails 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:19.000 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.600 --> 0:00:23.360 As you know, President Biden and congressional leaders they are 0:00:23.360 --> 0:00:25.599 planning to resume discussions on the debt ceiling next week. 0:00:25.640 --> 0:00:28.159 They had been scheduled to meet today, but session was 0:00:28.200 --> 0:00:32.880 postponed as Republican and Democratic staff members continue to negotiate. Meantime, 0:00:32.920 --> 0:00:36.040 as you've been hearing on Bloomberg, are Henry Horden catching 0:00:36.080 --> 0:00:39.800 up with US Treasury Secretary Jenny Yellen an exclusive from 0:00:39.800 --> 0:00:42.800 the G seven summit in Japan, and she says there's 0:00:42.840 --> 0:00:46.040 no satisfactory solution to solving the debt limit other than 0:00:46.080 --> 0:00:49.360 Congress basically acting to do just that, raise the debt ceiling. 0:00:49.680 --> 0:00:51.000 Here's some of that conversation. 0:00:53.080 --> 0:00:58.400 There is no satisfactory solution for the United States. A 0:00:58.520 --> 0:01:04.119 solution will be good for the economy and financial markets. 0:01:04.600 --> 0:01:09.600 Other than Congress acting to raise the debt ceiling. There 0:01:09.600 --> 0:01:13.679 are potential different paths that could be taken. If that 0:01:13.840 --> 0:01:18.240 doesn't happen. But there is not a single thing that 0:01:18.400 --> 0:01:22.520 can be done that will save the United States from 0:01:22.680 --> 0:01:27.039 considerable economic and financial damage. 0:01:27.480 --> 0:01:30.880 But this plan was outlined back in twenty eleven, and 0:01:30.920 --> 0:01:33.399 you were there at the FMC meeting about it, and 0:01:33.440 --> 0:01:37.279 it said that treasury principles and securities would be paid. 0:01:38.000 --> 0:01:40.760 Is this something that at least for contingency plan has 0:01:40.800 --> 0:01:42.160 been discussed with the president. 0:01:42.880 --> 0:01:47.480 So my understanding i was at the FED in twenty 0:01:47.520 --> 0:01:51.560 eleven is that this plan was never presented to the 0:01:51.600 --> 0:01:53.640 President and never approved. 0:01:54.200 --> 0:01:56.000 And would you present it now? 0:01:56.720 --> 0:02:04.440 Look, we would. You're working full time to work with 0:02:04.560 --> 0:02:08.040 Congress to raise the debt sealing. That's where our focus is. 0:02:08.560 --> 0:02:12.920 We know that the only good outcome is one in 0:02:12.960 --> 0:02:18.920 which Congress act acts, as it has many times, almost 0:02:18.960 --> 0:02:24.400 eighty times since nineteen sixty, to raise the debt ceiling. 0:02:25.120 --> 0:02:31.000 What global markets and American households and businesses need to 0:02:31.040 --> 0:02:36.160 see is that we have a Congress that's committed to 0:02:36.280 --> 0:02:39.679 paying the bills that we have incurred as a consequence 0:02:39.720 --> 0:02:43.799 of our legislation, that we're not a deadbeat country. And 0:02:44.240 --> 0:02:47.960 if Congress fails to do that, it really impairs our 0:02:48.040 --> 0:02:52.400 credit rating. We have to default on some obligation, whether 0:02:52.440 --> 0:02:58.320 it's treasuries or payments to Social security recipients. That's something 0:02:58.360 --> 0:03:03.119 America hasn't done since seventeen eighty nine, and we shouldn't 0:03:03.120 --> 0:03:08.960 start now. So we've not discussed what to do if 0:03:09.000 --> 0:03:12.000 that doesn't occur with the president. Our focus is on 0:03:12.360 --> 0:03:13.240 getting it done. 0:03:13.120 --> 0:03:15.519 Because, as you know, treasuries are the bedrock of a 0:03:15.560 --> 0:03:19.440 global financial system, and the asset managers I speak to 0:03:19.520 --> 0:03:23.120 the investors, they don't have the luxury of not contingency planning, 0:03:23.560 --> 0:03:26.600 So at this point should they assume that debt may 0:03:26.680 --> 0:03:27.840 not be serviced if. 0:03:27.760 --> 0:03:28.480 There's no deal. 0:03:29.480 --> 0:03:36.960 Look, if Congress doesn't raise the debt ceiling, we face 0:03:37.120 --> 0:03:40.200 economic and financial catastrophe. 0:03:39.760 --> 0:03:40.760 One way or the other. 0:03:41.400 --> 0:03:45.200 And that's why our focus is on making sure that 0:03:45.360 --> 0:03:49.880 Congress does raise the debt sealing. I feel that that's 0:03:49.880 --> 0:03:53.440 something we're going to succeed at doing, and we're working 0:03:53.520 --> 0:03:56.760 hard to make sure that that gets done. 0:03:56.960 --> 0:03:59.120 That, of course, is the voice of US Treasury Secretary 0:03:59.200 --> 0:04:02.760 Johnny Yellen, speaking exclusively with Bloomberg's and Mary Horden earlier 0:04:02.760 --> 0:04:07.040 today from the sidelines of the G seventh summit in Japan. Hey, 0:04:07.080 --> 0:04:09.200 we want to get more on the dead ceiling, the 0:04:09.200 --> 0:04:12.280 looming deadline. We can just kind of get a handle 0:04:12.360 --> 0:04:15.680 of the US government's finances, especially by those people we 0:04:15.720 --> 0:04:16.320 pay to do. 0:04:16.520 --> 0:04:17.359 Just exactly that. 0:04:17.480 --> 0:04:20.600 Miami Gindus is with US President of the Committee for 0:04:20.640 --> 0:04:21.880 a Responsible Federal Budget. 0:04:21.880 --> 0:04:23.320 She's on Zoom in Washington, d C. 0:04:23.480 --> 0:04:23.760 Maya. 0:04:23.839 --> 0:04:25.680 It's been a while, but great to have you here 0:04:26.279 --> 0:04:29.800 with Matt and myself. I feel like we are constantly 0:04:29.839 --> 0:04:32.120 fighting for a responsible federal. 0:04:31.720 --> 0:04:34.320 Budget and never getting it, and we never get it. 0:04:35.440 --> 0:04:38.080 What you feel right, that is. 0:04:38.120 --> 0:04:40.280 It has been a long long time since we've had 0:04:40.320 --> 0:04:44.119 a responsible federal budget. The fiscal environment is getting worse, 0:04:44.240 --> 0:04:47.000 and it is in great, great connection with the fact 0:04:47.000 --> 0:04:49.360 that the political environment is getting worse. And we now 0:04:49.360 --> 0:04:53.040 have two parties that are so busy fighting against each 0:04:53.080 --> 0:04:57.719 other trying to either maintain or gain leadership majorities, that 0:04:57.760 --> 0:05:01.039 they aren't willing to do the hard work of budgeting, 0:05:01.120 --> 0:05:04.839 which means deciding what you want to do and deciding 0:05:04.880 --> 0:05:06.840 how you want to pay for it, And so we're 0:05:06.880 --> 0:05:09.719 borrowing for pretty much everything. It's contributing to a bad 0:05:09.760 --> 0:05:14.279 fiscal situation, a bad economic situation, a bad national security situation, 0:05:14.960 --> 0:05:17.520 and UH it's it's tough to see what's going to 0:05:17.640 --> 0:05:19.640 turn this around in any meaningful way. 0:05:19.920 --> 0:05:22.480 So when was the last time we had, you know, 0:05:22.520 --> 0:05:26.800 a balanced budget. Is it just because of COVID that 0:05:26.839 --> 0:05:29.000 we're doing this tremendous deficit spending. 0:05:30.040 --> 0:05:33.120 No, it's been a long time sort of constant deterioration. 0:05:33.279 --> 0:05:36.600 So you'll recall that President Bush and then President Clinton 0:05:36.960 --> 0:05:41.080 put forth packages and President Clinton worked with Republicans in 0:05:41.120 --> 0:05:45.960 Congress put forth packages on track and Nu Gingrich and 0:05:46.000 --> 0:05:49.320 I mean there's a lot of dominici. Things were different 0:05:49.320 --> 0:05:51.279 back then. They did work together. They might not have 0:05:51.360 --> 0:05:53.680 enjoyed it, but they got some things done and they 0:05:53.839 --> 0:05:58.000 got budget surpluses. But quickly after that we entered a 0:05:58.040 --> 0:06:00.240 period where we had wars that weren't paid for or 0:06:00.720 --> 0:06:04.479 unpaid for, tax cuts and recessions, all of which made 0:06:04.480 --> 0:06:08.960 the situation worse. Surpluses turned to deficits, But now things 0:06:08.960 --> 0:06:11.480 are much worse. We borrowed a lot during the Great 0:06:11.480 --> 0:06:14.840 Financial Crisis and COVID, and we should have Those were 0:06:14.880 --> 0:06:17.680 exactly when we should have borrowed. But we also borrow 0:06:17.720 --> 0:06:20.760 when the economy is strong. For instance, the past few years, 0:06:20.920 --> 0:06:23.279 the economy has been so strong that we are plagued 0:06:23.279 --> 0:06:25.920 with inflation, the opposite of what you should be doing 0:06:25.960 --> 0:06:28.840 borrowing more. But we have borrowed for every single piece 0:06:28.880 --> 0:06:31.920 of legislation other than the Inflation Reduction Act, and that 0:06:31.960 --> 0:06:35.480 fiscal policy has exacerbated the inflationary situation. 0:06:35.839 --> 0:06:40.279 Well, so crisis problems in crisis are management or is 0:06:40.279 --> 0:06:42.680 it more I'm a big follow the money, and when 0:06:42.680 --> 0:06:45.400 I follow the money in Congress, it's all about election 0:06:45.920 --> 0:06:51.520 and making sure that you are playing to the right individuals, institutions, organizations, 0:06:51.560 --> 0:06:54.880 sectors to make sure you are back in Congress. And 0:06:54.920 --> 0:06:57.119 so then I always feel like we're not necessarily getting 0:06:57.120 --> 0:07:00.200 the smartest policy. We're just trying to do whatever we 0:07:00.279 --> 0:07:03.719 can do to make sure we get reelected, and that 0:07:03.880 --> 0:07:05.800 means not ticking off anybody. 0:07:06.920 --> 0:07:08.440 So how do that? 0:07:08.520 --> 0:07:08.760 To me? 0:07:08.880 --> 0:07:11.520 Is an incredibly broken system, and I don't know how 0:07:11.520 --> 0:07:12.800 we ever get around it. 0:07:13.760 --> 0:07:18.000 You have articulated the reason for my ongoing despair, which 0:07:18.080 --> 0:07:20.440 is I am not at all convinced that we are 0:07:20.480 --> 0:07:22.120 going to turn the ship around. As I watch the 0:07:22.160 --> 0:07:25.920 growing polarization and all the additional factors that are contributing 0:07:25.920 --> 0:07:28.800 to that polarization in this country, I think debt and 0:07:28.800 --> 0:07:32.160 deficits are one of the casualties of the fact that 0:07:32.200 --> 0:07:34.080 we used to have politicians who knew what they had 0:07:34.080 --> 0:07:37.240 to get done, put in place savings packages, lift the 0:07:37.280 --> 0:07:39.560 debt ceiling. They'd fight about it, but they wouldn't threaten 0:07:39.640 --> 0:07:42.400 default in a way that where they work together enough 0:07:42.400 --> 0:07:45.160 to get things done. But importantly, some of those things 0:07:45.200 --> 0:07:51.200 were difficult. And the truth is political pandering works. So 0:07:51.320 --> 0:07:53.560 just I'll give you an example, social Security and Medicare. 0:07:53.960 --> 0:07:57.680 They both face insolvency. We have to make changes. It's 0:07:57.680 --> 0:08:00.320 not a political statement. Anyone can read the trustee. We 0:08:00.400 --> 0:08:03.840 have to make changes. There's nothing to disagree there. There 0:08:03.920 --> 0:08:05.880 is plenty disagree on what changes we should make, and 0:08:05.920 --> 0:08:08.880 that's where the policy disagreement should be. But instead first 0:08:08.880 --> 0:08:11.760 President Trump, now President Biden. After the State of the Union, 0:08:11.800 --> 0:08:15.160 pretty much everyone as out there promising not to touch 0:08:15.200 --> 0:08:19.400 those programs instead of using their important platforms to let 0:08:19.440 --> 0:08:21.400 the country know that we have to make changes so 0:08:21.440 --> 0:08:23.480 we can pay the benefits that we've promised and not 0:08:23.720 --> 0:08:26.360 face insolvency and not have across the board benefit cuts 0:08:26.440 --> 0:08:30.040 or provider cuts. But the politics of demagogue and Social 0:08:30.040 --> 0:08:34.760 Security and medicare are so successful. I am deeply concerned 0:08:34.800 --> 0:08:37.200 about the presidental potential election. We're about to see where 0:08:37.240 --> 0:08:39.640 everyone is going to be tripping over themselves promising what 0:08:39.679 --> 0:08:42.160 they won't do instead of how they would actually fix 0:08:42.160 --> 0:08:43.480 the programs, and that's damaging. 0:08:43.920 --> 0:08:46.080 Maya, Why don't they I mean, we knew when the 0:08:46.120 --> 0:08:48.040 last budget was passed that we were going to have 0:08:48.080 --> 0:08:49.800 to lift the debt ceiling to pay for it, right, 0:08:50.200 --> 0:08:52.320 Why don't they just make that? Why don't they work 0:08:52.360 --> 0:08:53.760 that into the budget. 0:08:53.440 --> 0:08:54.880 And just got about forty five seconds? 0:08:54.880 --> 0:08:56.480 Maya, Yeah, Well. 0:08:56.320 --> 0:08:58.720 First, there has been no budget. The budget committees failed 0:08:58.720 --> 0:09:00.520 to do budgets, and we don't have a bugudget ready 0:09:00.520 --> 0:09:03.280 for next year and that's quite common. And second, I 0:09:03.360 --> 0:09:05.400 believe part of this deal that they have to lift 0:09:05.440 --> 0:09:07.520 the debt ceiling, which has to be lifted without drama, 0:09:07.760 --> 0:09:10.720 should include a commission that does two things. Reforms our 0:09:10.760 --> 0:09:13.480 structural and balances everything's on the table, look at socialcurity, 0:09:13.480 --> 0:09:16.079 to look at medicare, look at taxes, and second, reforms 0:09:16.080 --> 0:09:17.959 the debt ceiling so it becomes an actual part of 0:09:17.960 --> 0:09:20.760 the budget process. Because we can't continue this way. It's 0:09:20.800 --> 0:09:23.280 too dangerous for the country and it's not effective. We 0:09:23.280 --> 0:09:25.079 need to fix our broken budget process. 0:09:25.200 --> 0:09:26.160 All right, Gonna leave it there. 0:09:26.160 --> 0:09:28.520 Hey, Maya, great to talk with you once again, Miam 0:09:28.559 --> 0:09:31.720 again as president of the Committee for a Responsible Federal Budget. 0:09:31.800 --> 0:09:34.000 Joining us via zoom from Washington, DC. Let's just go 0:09:34.040 --> 0:09:36.880 home to our spouses. Hey, debt ceiling, Let's just raise it. 0:09:37.000 --> 0:09:38.840 Yeah, we have no debt ceiling. 0:09:39.080 --> 0:09:42.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:42.679 --> 0:09:46.040 live weekday afternoons from three to six Eastern Listen on 0:09:46.080 --> 0:09:50.120 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 0:09:50.400 --> 0:09:52.120 or watch us live on YouTube. 0:09:53.480 --> 0:09:55.439 You know, all week we've been talking a lot about AI. 0:09:55.760 --> 0:09:59.000 The world is a wash in artificial intelligence. We had Google, 0:09:59.040 --> 0:10:02.959 we had ibmvolunteer this week, and I gotta say, Matt, ever, 0:10:03.000 --> 0:10:06.600 since Microsoft announced that ten billion dollar investment in Open 0:10:06.840 --> 0:10:09.320 AI's chat GPT, it's just been like off and running. 0:10:09.960 --> 0:10:13.520 Yeah. I don't know if we knew at that time 0:10:13.960 --> 0:10:16.400 what we were going to get, right, it was a 0:10:16.400 --> 0:10:18.600 massive amount of money, and I remember thinking, Wow, that's 0:10:18.600 --> 0:10:21.319 a lot that they're paying for this because until then 0:10:21.480 --> 0:10:24.760 AI I had never had a great experience with it. 0:10:24.800 --> 0:10:28.559 But now I'm obsessed with AI powered being. And by 0:10:28.559 --> 0:10:31.120 the way, I was also someone who I couldn't be 0:10:31.480 --> 0:10:35.200 far enough away from being previously. Like if Being accidentally 0:10:35.240 --> 0:10:37.679 popped up on my computer, I changed it to Google 0:10:37.720 --> 0:10:40.320 as quickly as I could, and I'm made Chrome, like 0:10:40.360 --> 0:10:43.520 you know, my default. But now AI powered being is 0:10:43.559 --> 0:10:45.520 so much more useful to me than Google Search. 0:10:45.640 --> 0:10:47.240 All right, so this is good to know. So it's 0:10:47.320 --> 0:10:51.440 changing impacting your behavior. Let's see how it's changing things 0:10:51.559 --> 0:10:53.320 in our next guest life back with us. As the 0:10:53.320 --> 0:10:55.920 co founder and CEO of the three point eight billion 0:10:55.920 --> 0:10:58.480 dollar market cap content and file sharing company we're talking 0:10:58.480 --> 0:11:01.560 about Box. Aaron Levy is with us on Zoom from 0:11:01.600 --> 0:11:06.599 Redwood City, California, and Box just announcing its own integration 0:11:06.720 --> 0:11:10.280 of open ais chatchypt that was earlier this month. Eron anyway, 0:11:10.520 --> 0:11:11.960 nice to have you here with us. 0:11:12.080 --> 0:11:13.360 How are you house? Business? 0:11:14.040 --> 0:11:14.319 Good? 0:11:14.360 --> 0:11:16.560 Good, good to be here, and thanks for thanks for 0:11:16.600 --> 0:11:19.480 having me. We definitely are are extremely excited about AI 0:11:19.559 --> 0:11:20.960 and the role that it's going to have and how 0:11:21.040 --> 0:11:25.080 companies work with all of their most important content and information. 0:11:25.200 --> 0:11:27.680 And you know, really the big opportunity is when you 0:11:27.679 --> 0:11:29.760 think about how much data we have in the enterprise. 0:11:30.200 --> 0:11:32.920 That is sort of what we call unstructured data. So 0:11:33.040 --> 0:11:35.520 structured data is you know, stuff that goes into a database. 0:11:35.559 --> 0:11:40.240 It's CRM information, it's financial data. Well, inside of your documents, 0:11:40.240 --> 0:11:43.760 it's all unstructured. It's your marketing materials, it's your contracts, 0:11:43.800 --> 0:11:46.480 it's your financial wait wait wait wait wait. 0:11:46.360 --> 0:11:50.040 Wait, So how is tell us how AI generative? AI 0:11:50.200 --> 0:11:52.920 is going to change things dramatically for. 0:11:52.960 --> 0:11:55.480 You, especially for customers, which I mean when I see, 0:11:56.320 --> 0:11:59.320 first of all, the utility of your company is undeniable, 0:11:59.440 --> 0:12:03.040 So I'm not downplaying it. But it's a box, right, 0:12:03.080 --> 0:12:05.040 we put stuff in and we take stuff out. How 0:12:05.080 --> 0:12:06.000 does AI help? 0:12:07.120 --> 0:12:10.959 Yeah, So, well, we store tens of billions of documents 0:12:10.720 --> 0:12:13.760 for customers, and so with AI, we can actually unlock 0:12:13.920 --> 0:12:16.480 what's actually inside of that data for the first time ever. 0:12:16.920 --> 0:12:19.280 So you can ask questions of your documents. You can 0:12:20.000 --> 0:12:22.000 you can look inside of a contract and figure out 0:12:22.000 --> 0:12:24.760 what terms in that contract might have the highest amount 0:12:24.760 --> 0:12:26.640 of risk. You can look at a marketing asset and 0:12:26.720 --> 0:12:29.400 ask AI to improve that marketing asset. You can look 0:12:29.400 --> 0:12:32.199 inside of an HR document and ask questions. So it's 0:12:32.200 --> 0:12:34.240 a complete transformation of what we can do with all 0:12:34.280 --> 0:12:36.199 of the data we have in an enterprise. 0:12:36.440 --> 0:12:39.120 How does it move the needle for top and bottom line? 0:12:39.120 --> 0:12:41.920 So basically, how does it for you guys move the 0:12:41.920 --> 0:12:44.680 needle financially in terms of growth of users and or usage. 0:12:45.640 --> 0:12:47.760 Yeah, so we think it's going to just unlock the 0:12:47.800 --> 0:12:49.840 potential of what you can do with your content, so 0:12:49.880 --> 0:12:52.559 we can speed up productivity and an enterprise, we can 0:12:52.600 --> 0:12:55.960 make employees be able to have instant expert analysis on 0:12:56.000 --> 0:12:59.079 top of their data on demand. So again, imagine being 0:12:59.120 --> 0:13:02.360 able to talk to a lawyer instantly about the contract 0:13:02.360 --> 0:13:05.040 you're looking at, or a marketing expert about your marketing 0:13:05.080 --> 0:13:07.920 asset that you're creating. And so all of a sudden 0:13:08.160 --> 0:13:10.240 you get all of the power of these advanced AI 0:13:10.400 --> 0:13:12.840 models and you can start to understand your data in 0:13:12.840 --> 0:13:13.800 completely new ways. 0:13:15.600 --> 0:13:18.120 So how do you think this is going to improve 0:13:18.160 --> 0:13:20.400 your your revenue? I mean, what's this going to add 0:13:20.480 --> 0:13:22.360 to to the top line or is it a bottom 0:13:22.400 --> 0:13:22.920 line booster? 0:13:24.200 --> 0:13:24.400 Yeah? 0:13:24.440 --> 0:13:27.120 I think it's ultimately going to be a major tailwind 0:13:27.160 --> 0:13:30.400 for enterprise software in general. We haven't, you know, you know, 0:13:30.559 --> 0:13:33.040 sort of finalized exactly how we're going to monetize or 0:13:33.040 --> 0:13:36.400 commercialize the product. We've we've first introducing the technology to 0:13:36.400 --> 0:13:38.840 a select set of customers. There will be some elements 0:13:38.880 --> 0:13:41.040 that we likely do charge for and you know that 0:13:41.080 --> 0:13:43.400 could provide a top line boost over the long term. 0:13:43.800 --> 0:13:45.160 But we also think that this is going to be 0:13:45.160 --> 0:13:47.240 incorporated into all software. I don't think you're going to 0:13:47.320 --> 0:13:50.840 expect to use sort of, you know, less intelligent software 0:13:50.880 --> 0:13:53.400 in the future, and so I think all the enterprise 0:13:53.440 --> 0:13:57.480 software that we leverage is going to fundamentally be infused 0:13:57.600 --> 0:14:00.599 with artificial intelligence. And that's just going to be expectation 0:14:00.679 --> 0:14:02.640 that people have about their software going forward. 0:14:02.920 --> 0:14:05.600 Is it cheap or is expensive to use? I mean, 0:14:05.600 --> 0:14:07.400 how do I don't know, do you pay like a 0:14:07.400 --> 0:14:10.320 one time thing or license every time someone uses it? 0:14:10.520 --> 0:14:11.880 How's it going to work out in terms of what 0:14:11.960 --> 0:14:12.679 you pay for it? 0:14:13.320 --> 0:14:16.600 Yeah, well, we pay for the underlying usage of the 0:14:16.640 --> 0:14:19.640 GPUs that the AI models run on top of. And 0:14:19.720 --> 0:14:22.040 so every time you ask a question that has to 0:14:22.080 --> 0:14:25.080 go into a set of computers that that go and 0:14:25.160 --> 0:14:27.720 you know, process that data. That can be kind of 0:14:27.760 --> 0:14:30.480 relatively expensive, you know, more so than the usage of 0:14:30.560 --> 0:14:33.640 just a core CPU, but it's it's pretty manageable, and 0:14:33.680 --> 0:14:35.480 so we're going to you know, find an efficient way 0:14:35.520 --> 0:14:36.920 to price that into the product. 0:14:39.320 --> 0:14:42.720 Safe to say, there's still a lot to be learned, 0:14:42.840 --> 0:14:45.600 a lot to be developed, a lot to be fine tuned. 0:14:45.760 --> 0:14:46.840 When we're talking about. 0:14:46.600 --> 0:14:50.720 All of this eron, Yeah, I think there's Uh. What 0:14:50.760 --> 0:14:53.480 we've worked on is is fundamentally focusing on things like 0:14:53.520 --> 0:14:56.080 the accuracy and the reliability of the answers that you're 0:14:56.120 --> 0:14:58.520 getting back. So you know, you know that that sometimes 0:14:58.520 --> 0:15:01.040 you'll go ask chatchapt a question and it can do 0:15:01.080 --> 0:15:03.480 this thing called hallucination, which is it sort of makes 0:15:03.560 --> 0:15:06.280 up the answer in some cases. We've worked to ensure 0:15:06.320 --> 0:15:08.520 that doesn't happen with corporate data. And the reason for 0:15:08.560 --> 0:15:11.520 that is we're telling the AI model to only answer 0:15:11.560 --> 0:15:14.040 the question based on the limited set of data that 0:15:14.040 --> 0:15:18.320 we're giving it, which dramatically improves its ability to answer accurately. 0:15:18.920 --> 0:15:20.160 And so these are the kind of things that we've 0:15:20.160 --> 0:15:23.920 worked on. Data privacy, data security, data integrity. Working with 0:15:24.000 --> 0:15:27.080 these AI models. We don't have any of the AI 0:15:27.160 --> 0:15:30.600 models being trained on the data that we're leveraging. So 0:15:30.800 --> 0:15:33.840 we're building really a safe and securing compliance solution for 0:15:34.000 --> 0:15:37.160 enterprises to bring AI into their organizations. 0:15:37.480 --> 0:15:41.400 You know, what's very cool. Throughout the year, I get 0:15:41.760 --> 0:15:46.000 various tax documents in the mail, and I guess I 0:15:46.120 --> 0:15:48.480 put them in a file in my filing cabinet, a 0:15:48.560 --> 0:15:51.000 paper filing cabinet, right, okay. But if I could put 0:15:51.000 --> 0:15:54.240 them in box and then just forget about them, and 0:15:54.360 --> 0:15:56.800 at the beginning of the next year, hook up my 0:15:58.040 --> 0:16:00.480 tax software to box and say, hey, go find all 0:16:00.480 --> 0:16:03.280 of my tax documents, and then you have this AI setup, 0:16:03.400 --> 0:16:04.640 I wouldn't have to do anything. 0:16:04.720 --> 0:16:04.960 Right. 0:16:06.200 --> 0:16:09.680 That is certainly, you know, the potential of this exactly 0:16:09.760 --> 0:16:11.640 what you've just you know, thought about. 0:16:11.960 --> 0:16:12.160 You know. 0:16:12.200 --> 0:16:15.560 One of the things that's incredibly exciting is imagine you're 0:16:16.080 --> 0:16:18.640 inside of a sales organization of a large company and 0:16:18.640 --> 0:16:21.480 there's you know, hundreds or thousands of documents that have 0:16:21.600 --> 0:16:24.320 the answers to critical questions you might have. Now you 0:16:24.320 --> 0:16:26.080 can just ask the question. You could say, what's the 0:16:26.080 --> 0:16:28.600 price of this product or what's the best way that 0:16:28.640 --> 0:16:32.000 we sell this technology to our customers, and AI will 0:16:32.000 --> 0:16:34.640 give you an answer back based on the existing assets 0:16:34.640 --> 0:16:37.160 that you have in the enterprise, as opposed to you know, 0:16:37.240 --> 0:16:40.760 waiting around for some expert inside the organization to hopefully 0:16:40.760 --> 0:16:43.000 be able to answer your question right at the right moment. 0:16:43.240 --> 0:16:44.480 And so these are the kind of things that we're 0:16:44.480 --> 0:16:45.600 going to be able to do with all of the 0:16:45.640 --> 0:16:47.800 data we have leveraging AI. 0:16:48.000 --> 0:16:50.040 I don't think my pitch was juicy enough for Aaron. 0:16:50.120 --> 0:16:53.520 I think he's he's looking at a much bigger, scalable 0:16:53.640 --> 0:16:56.320 enterprise issues and I would just worry about. 0:16:56.080 --> 0:16:58.320 Doing my tim I do wonder Aaron, that where is 0:16:58.360 --> 0:17:00.520 it when you look at industries that you think will 0:17:00.520 --> 0:17:03.200 be the most uptick and most growth potential for you 0:17:03.200 --> 0:17:04.359 guys specifically? 0:17:05.040 --> 0:17:08.240 Yeah, I think industries that are very information heavy, so 0:17:08.560 --> 0:17:14.199 financial services, consulting, professional services, global manufacturing, lots of supply 0:17:14.320 --> 0:17:17.840 chain data. You know, these are these healthcare, government, you know, 0:17:17.880 --> 0:17:20.200 these are industries where there's a lot of documents. There's 0:17:20.240 --> 0:17:23.720 a lot of value that is trapped inside of those 0:17:23.760 --> 0:17:27.000 documents right now, A tremendous amount of intellectual property within 0:17:27.080 --> 0:17:30.800 these you know, organizations are trapped inside of files, and 0:17:30.920 --> 0:17:33.840 AI lets us actually go and leverage that data. For 0:17:33.880 --> 0:17:36.960 the first time, we were talking to a customer within 0:17:37.000 --> 0:17:39.560 the media and entertainment industry and they had this great 0:17:39.680 --> 0:17:42.080 use case that literally you could not have been done 0:17:42.119 --> 0:17:45.439 before without AI, which is they have a sponsor that 0:17:45.520 --> 0:17:48.439 wants to be able to sponsor certain projects, you know, 0:17:48.480 --> 0:17:51.880 within the organization, and right now they rely on kind 0:17:51.880 --> 0:17:56.080 of you know, fortuitous luck that the advertising person happens 0:17:56.119 --> 0:17:58.480 to know all of the projects that might be possible 0:17:58.480 --> 0:18:01.400 across the entire organization. They don't have a database where 0:18:01.440 --> 0:18:03.640 that knowledge is sort of kept inside of But now 0:18:03.680 --> 0:18:06.160 you can actually just ask the documents. You can say, well, 0:18:06.680 --> 0:18:10.600 which projects would be the most relevant to this particular sponsor. 0:18:10.640 --> 0:18:12.880 And so this actually is going to create new revenue 0:18:12.920 --> 0:18:16.440 generating opportunities for customers by being able to leverage what's 0:18:16.480 --> 0:18:18.160 actually inside of the data. 0:18:17.960 --> 0:18:18.280 That they have. 0:18:19.280 --> 0:18:21.800 All Right, good to check in with you, Aaron Levy. 0:18:21.880 --> 0:18:24.959 He is, of course, the co founder and CEO of Box, 0:18:25.040 --> 0:18:27.879 joining us on Zoom from Redwood City, California. One thing 0:18:27.920 --> 0:18:30.040 I would argue a Matt is that we're still kind 0:18:30.040 --> 0:18:30.880 of figuring this out. 0:18:31.000 --> 0:18:33.680 I just think there's so many use cases for it. 0:18:33.800 --> 0:18:36.359 I mean, it is a juicy, juicy technology. 0:18:37.600 --> 0:18:41.200 You're listening to the Bloomberg Business Week podcast. Catch us 0:18:41.200 --> 0:18:45.240 live weekday afternoons from three to six Easter on Bloomberg Radio, 0:18:45.440 --> 0:18:48.720 the Bloomberg Business app, and YouTube. You can also listen 0:18:48.800 --> 0:18:51.920 live on Amazon Alexa from our flagship New York station, 0:18:52.359 --> 0:18:55.159 Just Say Alexa, play Bloomberg eleven thirty. 0:18:57.000 --> 0:18:59.360 We are going to talk a little bit about Twinkies 0:18:59.400 --> 0:19:02.800 and Hostess cakes, maybe some Big Texas Cinnamon Rolls and 0:19:02.840 --> 0:19:05.080 clover Hill Honeymuns, kind of hungry. 0:19:05.240 --> 0:19:06.000 These are all the. 0:19:05.880 --> 0:19:09.040 Brands and more that are under the Hostess brand's umbrella. 0:19:09.359 --> 0:19:12.760 They did report, by the way, early this week earlier 0:19:13.359 --> 0:19:15.480 some earnings. The stock initially popping on the news as 0:19:15.560 --> 0:19:17.240 much as five percent, but it did lose most of 0:19:17.280 --> 0:19:20.680 the gains by day's end following the report. Stock though 0:19:20.760 --> 0:19:23.720 up about seventeen percent so far in twenty twenty three. 0:19:23.840 --> 0:19:25.280 So let's get a look at the business I know. 0:19:25.320 --> 0:19:28.720 Matt also talked with our next guest earlier in the week, 0:19:28.720 --> 0:19:32.119 Hostess Brands President CEO Andy Callahan, joining us on Zoom 0:19:32.200 --> 0:19:33.040 in Chicago. 0:19:33.240 --> 0:19:34.119 Andy, how are. 0:19:34.000 --> 0:19:37.320 You, Carol? I'm doing great, Thanks for having me well. 0:19:37.240 --> 0:19:38.400 Nice to have you here with us. 0:19:38.720 --> 0:19:41.840 Matt has been eating Twinkies and some other things heading 0:19:41.840 --> 0:19:43.760 into this interreparation. 0:19:44.840 --> 0:19:47.040 Can I just say I love the intro. Don't forget 0:19:47.080 --> 0:19:50.520 our boart Man cookie franchise as well. But we're proud 0:19:50.560 --> 0:19:51.480 of all of our brands. 0:19:51.640 --> 0:19:55.480