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Speaker 1: From Marhart where Innovation, Money and Power Collie in Silicon

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Speaker 1: Vallet Nbon. This is Bloomberg Technology with Caroline Hyde and

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Speaker 1: Ed lud Love.

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Speaker 2: I'm Caroline Heindel Bloomberg's World headquarters in New York, and

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Speaker 2: I'm Ed Lovelo in San Francisco.

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Speaker 3: This is Bloomberg Technology.

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Speaker 2: Coming up, we'll preview what to expect from Meta's connect

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Speaker 2: as analysts watch for the company's generator AI and v

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Speaker 2: ARE plans.

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Speaker 4: Plus, we'll have more reaction to the FTC's landmark antitrust

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Speaker 4: suit against Amazon, and hear from Chair Lena Kahan.

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Speaker 2: Herself and as Sir Altman's open AI seeks up to

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Speaker 2: a ninety billion dollar valuation. Will discuss the state of AI,

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Speaker 2: the regulation of it with the co chair of the

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Speaker 2: UK government's AI review. All that and so much more

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Speaker 2: coming up. First, we check in on these markets, which

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Speaker 2: are map dictated. We're flip flopping between gains and losses

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Speaker 2: on the NASAC at the moment, currently underwater by two

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Speaker 2: tens percent. It seems to be being moved by this

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Speaker 2: particular market.

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Speaker 5: The bond market.

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Speaker 2: We're seeing yields back up four basis points. Look for

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Speaker 2: it sort of decade long highs at the moment four

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Speaker 2: point five to seven on the tenure. At the moment

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Speaker 2: we're seeing above five percent on a two year We're.

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Speaker 5: Worried about the direction of travel for the Federal.

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Speaker 2: Reserve and indeed a potential government start shut down here

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Speaker 2: in the United States. Interesting though, then we see the dollar,

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Speaker 2: of course still pushing higher. Is that as we expect

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Speaker 2: the Fed to have to push back on currently where

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Speaker 2: some of the inflatory pressures have been, we're seeing the

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Speaker 2: Bloomberg Dollar Index are for a six straight day, longest

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Speaker 2: winning street that we've seen since the beginning of the year.

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Speaker 2: Let's move on and see that actually in the face

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Speaker 2: of a stronger dollar, Bitcoin higher up five ten percent,

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Speaker 2: we saw a sudden bount of buying in European trading.

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Speaker 2: So actually managing to tread some water here, ed, But

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Speaker 2: get back to the micro that's involved today.

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Speaker 4: Yeah, there's kind of some themes in the show from

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Speaker 4: sort of consumer electronics to augmented reality playing out in

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Speaker 4: the new cycle markets as well. So Snap up two

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Speaker 4: point three percent. They're shuttering the unit of their business

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Speaker 4: that does augmented reality for enterprise one hundred and seventy

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Speaker 4: jobs going with that job's being cut as well, it's

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Speaker 4: kind of a question about the long term commitment of

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Speaker 4: Snap two org maintor reality. Later in the show, we

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Speaker 4: will talk to our Bloomberg Intelligence and list about that

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Speaker 4: consumer electronics hardware. Peloton now down nine ten to one percent.

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Speaker 4: Tom Cortes, the last remaining founder of Peloton, is leaving

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Speaker 4: the company. So of the five that started the company,

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Speaker 4: he was the last DOMINODA four. He has left but

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Speaker 4: will remain on as an advisor. The stock kind of

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Speaker 4: traded sideways for most of the session. It is now down.

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Speaker 4: The big one, as you said, is Meta Connect. Meta

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Speaker 4: Connect is the company's annual developers conference. When we think

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Speaker 4: about developers conferences, we do think software, but there's going

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Speaker 4: to be a big hardware component. We know that quest

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Speaker 4: the next generation of will be a topic of conversation.

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Speaker 4: Of course, alongside AI, we are treading water on Meta

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Speaker 4: the parent of Facebook. Upper tenth of one percent. How

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Speaker 4: much focus is going to be on the software side,

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Speaker 4: how much focus is going to be on the latest

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Speaker 4: generation of hardware metaverse versus artificial intelligence? What is the priority?

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Speaker 4: These are the great questions we have to ask.

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Speaker 2: And indeed the ones that we've been asking day in,

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Speaker 2: day out, in fact with executives of Meta. Of course,

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Speaker 2: last week I got to sit down with the head

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Speaker 2: of Global affairs to discuss how the company is utilizing

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Speaker 2: generative AI.

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Speaker 5: Just take a listen.

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Speaker 6: We're announcing next Wednesday on the twenty seven new applications

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Speaker 6: of generative AI in our products. Things like you'll be

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Speaker 6: able to communicate with businesses on WhatsApp and Messenger, the

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Speaker 6: sort of really really extraordinary aipowered bots that will transform

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Speaker 6: the way that all of us as consumers interact with businesses,

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Speaker 6: and many other things that will announce next Wednesday.

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Speaker 5: Let's weigh up what investors want to hear.

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Speaker 2: Jeffrey's seen it Internet Analyst is with us Brinville ahead

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Speaker 2: of the all important Meta connect and Brent to that end,

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Speaker 2: how much do you want to be hearing about generative AI?

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Speaker 2: How much do you want to be hearing about chatbots?

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Speaker 2: About therefore, the desire of people younger generation in particular

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Speaker 2: to remain committed to instagramed Messenger, to the other offerings.

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Speaker 7: I think AI is front center for every tech company, Google, Amazon,

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Speaker 7: the whole industry. This is this is the majority of

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Speaker 7: the topics that we're having with our investors, So I

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Speaker 7: think that's what investors want to hear. Obviously at software,

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Speaker 7: they don't love the hardware side of this, so they'd

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Speaker 7: like to hear more about this than the quest and

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Speaker 7: the hardware side, which again I think most investors are

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Speaker 7: skeptical about obviously a more expensive endeavor, higher margin building

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Speaker 7: software and AI than hardware, So I think we want

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Speaker 7: to hear more around that. Mark Zuckerberg, you know, did

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Speaker 7: a story yesterday as Instagram about Jarvis.

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Speaker 8: Back in twenty sixteen.

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Speaker 7: He showed Jarvis was his AI bought at his house

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Speaker 7: that could turn on the lights and do things like

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Speaker 7: make his toast at home. Right, So that was back

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Speaker 7: in twenty sixteen, and he kind of re posted that.

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Speaker 7: So we believe, you know, this concept of Jarvis for

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Speaker 7: the home comes to the mass market in AI.

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Speaker 8: Obviously Microsoft and Google are.

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Speaker 7: Doing this meta also as an incredible opportunity given given

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Speaker 7: what they have with What's App, Messenger and the global

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Speaker 7: platforms that they have that can help us, you know,

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Speaker 7: find the right goods. We want help help surface ideas,

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Speaker 7: maybe pass along photos or other ideas or our friends.

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Speaker 7: So I think this is going to be for us,

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Speaker 7: the most exciting part of it. I think the sideshow

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Speaker 7: will be, you know, Meta Quest three and the price point.

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Speaker 8: Everyone's all below out of the vision prow at thirty

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Speaker 8: five hundred dollars.

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Speaker 7: So the differentiation there and what's going to happen in

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Speaker 7: the next generation of the Metaversese brand.

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Speaker 4: Meta is building large language models, a heavy emphasis on

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Speaker 4: open source when developing that technology, and it's kind of

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Speaker 4: hinted at how that translates to generative AI tools and

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Speaker 4: their existing properties. Right I think we're focusing on AI agents.

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Speaker 4: Do you see a clear path to Meta ever making

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Speaker 4: any money from all of the things that they are

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Speaker 4: working on the R and D side?

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Speaker 8: We do.

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Speaker 7: They've been very clear they're not making money now or

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Speaker 7: don't believe that this will be a big revenue initiative

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Speaker 7: in the short term. Long term, we do believe that

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Speaker 7: they can make money on Lama, and they're obviously a

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Speaker 7: consumer focused company, not as much enterprise, and so this

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Speaker 7: is you know, going to take them time to figure

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Speaker 7: this out.

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Speaker 8: But we think given the quality of the feedback.

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Speaker 7: From the channel about Lama and how they're using it,

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Speaker 7: how they're the the open source community loving what they're doing.

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Speaker 7: There's no doubt there's an opportunity to monetize that this.

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Speaker 8: This isn't in the numbers. Uh, this isn't in the

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Speaker 8: valuation today.

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Speaker 7: So two three, four years from now, could this could

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Speaker 7: we have a discussion around you know, is this going

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Speaker 7: to be a material revenue engine where they could they

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Speaker 7: could potentially license this model to companies to use and

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Speaker 7: they would get a royalty for the answer is yes,

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Speaker 7: one hundred percent. What the details look like, they're still

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Speaker 7: trying to iron those out. Those aren't in our model,

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Speaker 7: but certainly we do believe that they can monetize it

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Speaker 7: going forward.

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Speaker 4: Brent, quickly, it sounds to me like you're not that

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Speaker 4: excited about augmented in virtual reality.

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Speaker 3: Is that fair?

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Speaker 8: Yes, that's fair.

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Speaker 3: Okay, Okay.

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Speaker 4: Here's the thing that it's either a metaverse story or

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Speaker 4: it's an AI story. Do you see a world in

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Speaker 4: which meta can convince investors that we can have both.

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Speaker 7: I think we can have both, but I think that

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Speaker 7: is the lass they've talked about the metaverse. The higher

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Speaker 7: the stock is gone, so form an investor perspective, they

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Speaker 7: if they keep talking about the software world and what's

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Speaker 7: going on the social networking side. That's great. This is

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Speaker 7: an advertising driven story, right. The majority of the revenue

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Speaker 7: is driven off for advertising. So at this point, I

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Speaker 7: think everyone the jury is out whether the metaverse is

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Speaker 7: going to be exciting or not. I think most people

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Speaker 7: are saying it's not going to be as exciting and

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Speaker 7: taking the height because there's real world productivity measures that

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Speaker 7: we can see and how it's impacting our lives, Like

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Speaker 7: putting a headset on and being claustrophobic and playing a

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Speaker 7: game with my kids for ten minutes is not going

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Speaker 7: to change my life, right, So I'm I think right

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Speaker 7: now we're not We're probably the biggest bear on the metaverse.

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Speaker 7: We're very foolish about the position and what they can

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Speaker 7: do with the other side of their franchise, and so

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Speaker 7: we're very clear about what we like we don't like.

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Speaker 2: Interestingly, many an executive is trying to lean into what

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Speaker 2: investors and analysts such as yourself like, and look we

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Speaker 2: had and flipski on earlier in the week just talking

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Speaker 2: about how generative AI is becoming such a focus for AWS.

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Speaker 2: On the flip side of all of this is the

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Speaker 2: regulatory environment and look Amazon Meta all of them being

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Speaker 2: eyed from regulators in particularly the FTC.

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Speaker 5: We just heard.

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Speaker 2: Yesterday of course Amazon under fire there. What are you

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Speaker 2: making of this landscape? How do you expect the FTC

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Speaker 2: some of these legal wranglings to unfold for is In,

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Speaker 2: for example, brand.

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Speaker 7: The government has been trying to tackle big tech for

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Speaker 7: a long time, and we've said this that the government,

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Speaker 7: the government or oversight is the right thing to help

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Speaker 7: protect all of us as consumers. But the big tech

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Speaker 7: is being big is not bad, right, Being bad is bad.

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Speaker 7: So as long as they find the middle ground. We've

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Speaker 7: said this repeatedly, investors, anytime a regulatory scare comes in,

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Speaker 7: you buy these stocks.

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Speaker 8: Just look at the charts of.

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Speaker 7: Meta, Google, Amazon or over the course of the last

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Speaker 7: five years, any any regulatory scare, these need these names

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Speaker 7: need to be bought.

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Speaker 8: Clearly.

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Speaker 7: Uh, there's been multiple attempts for the government to take

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Speaker 7: down tech.

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Speaker 8: It hasn't happened.

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Speaker 7: They find a way out, stocks recover, Investors make money.

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Speaker 7: So I'm all for regulation and doing the right thing

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Speaker 7: to protect all of us. But I think what's happened

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Speaker 7: is they've overstepped their boundaries and they've gone after things

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Speaker 7: that they don't necessarily have good footing or educate it

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Speaker 7: on and then that's caused the proms.

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Speaker 8: So I think ultimately these are comedies that have.

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Speaker 7: Both one and then end goal, and I think they

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Speaker 7: can meet in the middle. And we've said this repeatedly,

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Speaker 7: like any regulatory scaring, Internet has not really done anything

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Speaker 7: that he stocks. Just pull up the chart at Google

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Speaker 7: for the last five years and you can just see

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Speaker 7: it's an amazing up into the right chart.

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Speaker 8: So respected believe in it.

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Speaker 7: Don't believe they're going to have a mass of consequence

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Speaker 7: or businesses.

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Speaker 1: Brent.

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Speaker 4: When you outlined that ten minutes with an ar v

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Speaker 4: I headset playing with your kids at the weekend wouldn't

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Speaker 4: change your life, there were parents in the San Francisco

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Speaker 4: studio team here that tickled them a lot. I think

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Speaker 4: they probably share that view of you. Jeffrey, Senior Internet Analysts,

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Speaker 4: Brent Hill, thank you very much. Sticking with devices, Amazon

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Speaker 4: has lured away longtime Microsoft executive Panos Pana to head

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Speaker 4: the company's devices and services business after device's chief Dave

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Speaker 4: limp announced his plans to retire. He most recently was

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Speaker 4: Microsoft's chief product officer, overseeing Windows as well as the

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Speaker 4: company's hardware teams, and of course Dave Limpoff to head

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Speaker 4: up Blue Origin carr Lots.

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Speaker 5: Of Revolving Doors.

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Speaker 4: FTC chair Lena Kahan is seeking to end what she

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Speaker 4: calls Amazon's illegal conduct, but didn't go as far as

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Speaker 4: to call for a breakup of Amazon. We sat down

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Speaker 4: with her at our Bloomberg office in Washington, DC.

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Speaker 3: This is the conversation. Have listen.

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Speaker 9: This is a.

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Speaker 10: Case about a set of unlawful tactics that Amazon has

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Speaker 10: used to maintain its monopolies. We note in the complaint

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Speaker 10: both a set of anti discounting tactics that Amazon uses

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Speaker 10: to punish any seller or retailer that dares to discount,

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Speaker 10: and ultimately these sets of tactics deter sellers and retailers

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Speaker 10: from lowering prices and closes off an entire dimension of

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Speaker 10: price competition.

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Speaker 9: The other set of tactics.

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Speaker 10: We note, is a coercive scheme that Amazon uses to

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Speaker 10: effectively require sellers use its fulfillment service, and this in

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Speaker 10: turn ends up stunting the development of independent fulfillment providers

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Speaker 10: and ultimately also deprives actual and potential rivals of scale.

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Speaker 9: And that's really the core theme here.

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Speaker 10: These are a set of tactics, but ultimately Amazon has

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Speaker 10: pursued them to deprive actual and potential competitors of the

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Speaker 10: ability to gain the scale and momentum needed to effectively

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Speaker 10: compete online. And having achieved and protected its monopoly power,

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Speaker 10: our complaint details how Amazon is now exploiting that monopoly

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Speaker 10: power in ways that harm customers, both the sellers, the

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Speaker 10: tens of millions of American families that use Amazon to

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Speaker 10: do their shopping, but also the.

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Speaker 9: Sorry, both the shoppers, but also the sellers.

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Speaker 10: The hundreds of thousands and tens of thousands of sellers

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Speaker 10: use Amazon to access those shoppers, and it's done that

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Speaker 10: through actively raising prices. Amazon takes close to one out

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Speaker 10: of every two dollars from sellers that they use its platform.

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Speaker 9: It's also degraded its.

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Speaker 10: Service by adding a whole set of pay to play

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Speaker 10: ads that make it more difficult for consumers to find

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Speaker 10: what they're looking for and steers them to higher price products.

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Speaker 10: So really encourage everybody to read the complaint. It details

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Speaker 10: all of this conduct in great detail, and we're really

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Speaker 10: looking forward to moving forward with it.

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Speaker 9: So one of the things in the complaint is.

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Speaker 10: This phrase structural relief that you're seeking structural relief in

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Speaker 10: this case, which implies a breakup.

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Speaker 5: What would that look like.

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Speaker 10: So at this stage the complaint is really focused on

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Speaker 10: the issue of liability. We lay out a scheme that

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Speaker 10: we believe violates the US antitrust laws.

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Speaker 9: What we note in.

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Speaker 10: The complaint is that these different aspects of Amazon's scheme have.

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Speaker 9: An aggregated effect.

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Speaker 10: So the harm is accumulating their feedback loops between the harms,

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Speaker 10: and so the net exclusionary effect of Amazon's conduct is

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Speaker 10: quite significant. Ultimately, we'll want to make sure that any

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Speaker 10: remedy is halting the illegal conduct, preventing a recurrence, and

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Speaker 10: ensuring that Amazon is not able to profit and benefit

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Speaker 10: from its illegal behavior. So right now we're squarely focused

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Speaker 10: on the question of liability, But when we get to

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Speaker 10: the issue of remedy, those are going to be the

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Speaker 10: principles we'll be focused on.

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Speaker 2: FTC Chair Lena Calm there and look, Amazon has responded

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Speaker 2: to this lawsuit, with the company's Global Council writing that

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Speaker 2: if the FTC were to be successful, the result would

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Speaker 2: be actually anti competitive, anti consumer. Let's stick in to

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Speaker 2: all of this with Charlotte's lame and competition Policy Director

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Speaker 2: of Policy.

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Speaker 5: At public Knowledge.

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Speaker 2: And also you previously worked in the Anti competitive Practices

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Speaker 2: division of the FTZ investigating, litigating, and Charlotte, if you

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Speaker 2: were there now, how much confidence would you have that

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Speaker 2: this would be a winnable action.

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Speaker 11: I think there's a reason that the antitrust attorneys at

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Speaker 11: the FTC tried not to answer those kinds of questions.

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Speaker 11: It's really hard to say at this early stage, but

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Speaker 11: I think they feel confident, right. I watched that interview

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Speaker 11: with Lena Khan yesterday, and it's so important to highlight

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Speaker 11: this problem for people. It seems clear, even though Amazon

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Speaker 11: has built their reputation on having the best prices, that

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Speaker 11: that didn't come from being a really efficient competitor. It

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Speaker 11: came from pushing those third party sellers to raise prices

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Speaker 11: everywhere else. That's not fair competition and if that's what's

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Speaker 11: going on, it needs to step Charlotte.

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Speaker 2: What's interesting is sort of investor an analyst reaction to

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Speaker 2: all of this, and one particular analyst saying that this

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Speaker 2: is a benign scenario for Amazon over at BED, and

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Speaker 2: in fact they said that they were surprised the narrowness

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Speaker 2: of the overall case, saying that there isn't sort of

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Speaker 2: a reference to disallowing vertical integration. Do you think the

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Speaker 2: outcome should be some sort of breakup or has it

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Speaker 2: got to be something else?

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Speaker 11: So certainly I think stopping the conduct is not going

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Speaker 11: to be sufficient.

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Speaker 5: This has been.

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Speaker 11: Going on for a long time and replacing the competition

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Speaker 11: that has been lost is really difficult. So step one

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Speaker 11: is going to be to stop the conduct, but more

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Speaker 11: will be needed. And I heard Chair con yesterday sort

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Speaker 11: of demurring that this is going to be a decision

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Speaker 11: that happens far in the future, and that's absolutely right.

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Speaker 11: The remedy stage of litigation is later and separate. But

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Speaker 11: it may be that, you know, separating off the fulfilled

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Speaker 11: by Amazon part of the business is the only way

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Speaker 11: to address that lost competition, in which case the court

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Speaker 11: would have to take that seriously, Charlotte.

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Speaker 4: Some news in the last hour. The FTC has issued

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Speaker 4: an order saying that it will continue its internal case

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Speaker 4: against Activision and Microsoft steal that when that deal closes,

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Speaker 4: they could then after the fact, try to unwind it.

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Speaker 4: This is what Activision had to say in response via

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Speaker 4: a spokesperson. We're focused on working with Microsoft toward closing

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Speaker 4: how the FTC uses limited taxpayer dollars.

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Speaker 3: Is its decision.

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Speaker 4: Given your CV that Caroline outline, What is your response

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Speaker 4: to this situation.

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Speaker 11: Well, they're drying on an important point, which is that

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Speaker 11: the FTC has limited resources and there are so many

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Speaker 11: important cases that we want them to bring with those

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Speaker 11: limited resources. But this case against Microsoft and Activision is

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Speaker 11: a really important case. So if they think that that

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Speaker 11: has the opportunity to help so many consumers, as I

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Speaker 11: believe it would, that might be an important priority to

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Speaker 11: spend those limited resources. But they're absolutely right. We do

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Speaker 11: need to increase funding for these agencies so that they

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Speaker 11: can take on all of these important cases.

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Speaker 4: Charlotte quickly, it is Lena Khan picking too many fights.

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Speaker 11: No, we need to pick these fights. And she spoke

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Speaker 11: yesterday about the deterrence strategy which can make this more

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Speaker 11: efficient use of resources. Right, if businesses out there can

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Speaker 11: see this is not going to be an opportunity for

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Speaker 11: you to try something risky because there is a really

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Speaker 11: fierce enforcer here that can actually be a way of

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Speaker 11: saving resources. So I think that's part of the strategy

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Speaker 11: and that can work over time.

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Speaker 4: Charlott's Lane and competition policy director at public knowledge. Thank

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Speaker 4: you so much for your time. This is Bloomberg Technology.

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Speaker 2: Time now for work shifting when we look at the

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Speaker 2: changing landscape of the labor market amid advances in technology.

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Speaker 5: Big breakthrough for Hollywood.

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Speaker 2: The Writers Guild of America approved a new contract with

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Speaker 2: the studios, ending it strike after months of intense negotiations.

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Speaker 5: Now one of the biggest wins in the deal is.

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Speaker 2: Some assurance that artificial intelligence well won't replace their jobs.

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Speaker 2: Glomberg's Felix Jillet is here with us with more details

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Speaker 2: and before we move to what's next to occur in

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Speaker 2: all of this, Yeah, AI, how have they won any

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Speaker 2: sort of protection here?

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Speaker 12: Well, they got what they wanted basically, which is that

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Speaker 12: the Hollywood studios agreed that they're not going to you know,

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Speaker 12: feed a bunch of scripts into the AI machine and

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Speaker 12: come back and credit a movie to an AI that

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Speaker 12: you know, the humans are still going to get the credit,

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Speaker 12: and that was what was really important. Now, the studios

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Speaker 12: did retain the right to experiment a little bit with AI,

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Speaker 12: so you know, it remains to be seen a little

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Speaker 12: bit how this is going to play out, But for

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Speaker 12: the time being, the writers are declaring victory.

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Speaker 2: And read across therefore to actors because they too, particularly

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Speaker 2: perhaps you know, the extras that are used, worried about

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Speaker 2: AI replacing them in some way.

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Speaker 5: Is this an issue?

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Speaker 12: Yeah, I think they had similar concerns. And now there's

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Speaker 12: a template for these protections. So I think, you know,

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Speaker 12: there's optimism to believe that the writers, having made this pack,

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Speaker 12: well now the actors will make some real progress quickly.

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Speaker 4: Some of the numbers bind this felix are incredible, the

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Speaker 4: loss of the economy based on the strike. But the

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Speaker 4: whole point here is that the cost of contents getting higher.

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Speaker 4: Did the studios feel good about this outcome?

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Speaker 12: Their reaction has been notably more muted than the writers.

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Speaker 12: I mean, the writers have been very exuberant, very you know,

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Speaker 12: declaring victory.

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Speaker 3: The studios gave up a lot.

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Speaker 12: I think they gave up more than they thought they

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Speaker 12: would have to five months ago in terms of compensation,

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Speaker 12: in terms of minimum staff in on shows, and also

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Speaker 12: in terms of the AI protections.

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Speaker 4: Okay, so the other thing you're writing about is Lachlan Murdock.

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Speaker 4: Daddy's gone metaphorically speaking, what's next?

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Speaker 12: Well, it's interesting, you know, at this announcement, last week's

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Speaker 12: stepping back as chairman of the two companies, you know,

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Speaker 12: talking to all the Murdoch kremlinologists about what this all means.

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Speaker 12: Very unclear to everybody, Like does this change anything? What

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Speaker 12: does this mean a lot of unanswered questions. I mean,

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Speaker 12: I think clearly it was framed as another vote of

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Speaker 12: confidence by Rupert In his chosen successor, Lachlan, his eldest son.

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Speaker 12: But at the same time, you know, the issues of

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Speaker 12: what's going to happen to the company down the road

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Speaker 12: remained fairly unresolved. And you know, they tried to recombine

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Speaker 12: Fox and News Corporation earlier this year. Investors balked at

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Speaker 12: that idea. So what comes next?

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Speaker 3: You know, they have.

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Speaker 12: Been pretty quiet on the M and A front for

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Speaker 12: the past couple of years, really since acquiring it. To

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Speaker 12: be yeah, that looks like a successful deal for them,

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Speaker 12: but there's still basically a minno in this world of giants.

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Speaker 2: An extraett. It's a great wad go do it? This

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Speaker 2: has been the technology Welcome back to Blue Meg Technology.

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Speaker 2: I'm Caroline Hyde, New York.

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Speaker 4: Now I med Lovelow in San Francisco. A quick check

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Speaker 4: in on the markets. There's not a lot of kind

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Speaker 4: of big action at the macro level, at the index level,

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Speaker 4: and now's that one hundred down three tenths of one percent.

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Speaker 4: There's still a lot of focus right on economic data,

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Speaker 4: what the Federal Reserve will do, and before you know it,

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Speaker 4: Caroline Earning season will be back and we will get

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Speaker 4: for I know, I just cannot believe it. There are

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Speaker 4: two names that we're looking at specifically right now, and

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Speaker 4: this has been a theme of the show, right Artificial

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Speaker 4: intelligence and hardware. It is Metaconnect today the developers conference.

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Speaker 4: We're up three tens of one percent. We will go

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Speaker 4: even further later in the show on what we expect,

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Speaker 4: why we do or don't care about the hardware side,

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Speaker 4: and we will focus on the AI side. Microsoft softer

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Speaker 4: four tens of one percent. You're about to bring us

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Speaker 4: a story that makes this move surprising to me because

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Speaker 4: you think about the news flow. Would Microsoft be higher

444
00:23:04,400 --> 00:23:06,080
Speaker 4: on what you were about to bring our audience.

445
00:23:06,400 --> 00:23:09,040
Speaker 2: You would have thought so, because on paper they have

446
00:23:09,119 --> 00:23:12,440
Speaker 2: made a pretty penny on a thirteen billion dollar investment

447
00:23:12,520 --> 00:23:15,680
Speaker 2: in one company, ed Open AI. We are talking about,

448
00:23:15,760 --> 00:23:18,399
Speaker 2: of course, the fact that company, the AI company, is

449
00:23:18,400 --> 00:23:21,000
Speaker 2: in talking to its investors about a potential share sale

450
00:23:21,320 --> 00:23:25,080
Speaker 2: that would value it up to eighty to ninety billion dollars. Now,

451
00:23:25,080 --> 00:23:26,399
Speaker 2: this at the moment ed is all according to the

452
00:23:26,440 --> 00:23:30,960
Speaker 2: Wall Street Journal reporting sources, But the deal would allow employees,

453
00:23:31,000 --> 00:23:33,680
Speaker 2: most crucially, to look sell some of their existing shares

454
00:23:33,720 --> 00:23:36,359
Speaker 2: to be able to access some of the monetary value

455
00:23:36,359 --> 00:23:38,840
Speaker 2: of the work that they've been doing without.

456
00:23:38,600 --> 00:23:41,640
Speaker 5: The company actually having to issue or raise fresh capital.

457
00:23:42,040 --> 00:23:45,960
Speaker 2: This exact valuation extraordinary when you think that actually open

458
00:23:46,000 --> 00:23:47,879
Speaker 2: Ai was only just starting in our lexicon at the

459
00:23:47,880 --> 00:23:48,760
Speaker 2: beginning of this year.

460
00:23:49,520 --> 00:23:51,960
Speaker 4: Yeah, and when they did issue shares in April that

461
00:23:52,080 --> 00:23:54,520
Speaker 4: was at a twenty nine billion dollar valuation. It's a

462
00:23:54,520 --> 00:23:56,720
Speaker 4: hell of a jump. A big part of the story

463
00:23:56,800 --> 00:24:00,520
Speaker 4: is employee liquidity, right, it's a big frustration when you're

464
00:24:00,520 --> 00:24:03,440
Speaker 4: in a private startup for decade and you can't sell

465
00:24:03,520 --> 00:24:06,680
Speaker 4: that your RSUs or your stock. And then did you

466
00:24:06,720 --> 00:24:09,160
Speaker 4: see the revenue numbers that the journal reported and weird

467
00:24:09,240 --> 00:24:09,919
Speaker 4: that might be it?

468
00:24:10,280 --> 00:24:11,960
Speaker 2: Yeah, I mean the fact that Bloomberg knows that they're

469
00:24:11,960 --> 00:24:14,200
Speaker 2: going to be bringing in about a billion in a year.

470
00:24:14,359 --> 00:24:17,199
Speaker 2: I mean everyone's been questioning, how do you monetize the

471
00:24:17,280 --> 00:24:18,639
Speaker 2: generative AI opportunity?

472
00:24:18,680 --> 00:24:21,240
Speaker 5: Well, clearly open ai is already doing that solely with enterprise.

473
00:24:21,280 --> 00:24:24,720
Speaker 2: They're still evolving in terms of multimodal ways in which

474
00:24:24,760 --> 00:24:27,280
Speaker 2: we can interact with generative AI. It's also notable though,

475
00:24:27,400 --> 00:24:29,000
Speaker 2: what I thought was interesting is the fact that what

476
00:24:29,000 --> 00:24:32,440
Speaker 2: they're number three now behind TikTok, but also behind SpaceX

477
00:24:32,440 --> 00:24:34,280
Speaker 2: and who was a co founder of open ai.

478
00:24:35,280 --> 00:24:37,720
Speaker 4: Yeah, very interesting the wrap around with mister Elon Musk,

479
00:24:37,720 --> 00:24:39,640
Speaker 4: who's doing his own thing now and a lot of AI.

480
00:24:40,080 --> 00:24:42,480
Speaker 2: Let's dive into all of this look in authority in

481
00:24:42,520 --> 00:24:45,040
Speaker 2: the space, particularly when it comes to the impact of

482
00:24:45,080 --> 00:24:47,919
Speaker 2: generative AI, maybe regulation of it. Dame Wendy Halls with US,

483
00:24:47,960 --> 00:24:50,600
Speaker 2: Professor of Computer Science at the University of Southampton, also

484
00:24:50,640 --> 00:24:52,800
Speaker 2: as a co chair of the UK Government's AI Review

485
00:24:52,840 --> 00:24:55,960
Speaker 2: published back in twenty seventeen. And boy has the narrative

486
00:24:56,320 --> 00:24:59,320
Speaker 2: kind of changed accelerated, Wendy since twenty seventeen. And we've

487
00:24:59,359 --> 00:25:01,479
Speaker 2: had you on the show for just talk about the

488
00:25:01,480 --> 00:25:04,240
Speaker 2: exuberance that you still see around the space and ultimately

489
00:25:04,520 --> 00:25:07,000
Speaker 2: whether we're wringing our hands about the opportunity but also

490
00:25:07,080 --> 00:25:07,480
Speaker 2: the risks.

491
00:25:07,560 --> 00:25:10,359
Speaker 13: Enough, well we should have ring our hands about the opportunities.

492
00:25:10,400 --> 00:25:13,040
Speaker 13: The opportunities are there. There's a hype wave at the moment,

493
00:25:13,720 --> 00:25:16,840
Speaker 13: and I remember the web dot com crash. I'm just

494
00:25:16,920 --> 00:25:21,280
Speaker 13: saying that putting it out there when everyone piled into

495
00:25:21,400 --> 00:25:24,760
Speaker 13: web companies and the technology wasn't mature enough and we

496
00:25:24,840 --> 00:25:29,440
Speaker 13: had a crash. The generative AI people may be buying

497
00:25:29,480 --> 00:25:31,800
Speaker 13: into it, but it's not proven yet as a thing

498
00:25:31,840 --> 00:25:34,880
Speaker 13: that business can use. Is it really I'm not saying

499
00:25:34,920 --> 00:25:39,800
Speaker 13: it won't be, but at the moment, is it reliable enough?

500
00:25:40,240 --> 00:25:44,399
Speaker 13: And there's a lot of competition. We don't really know

501
00:25:44,480 --> 00:25:46,840
Speaker 13: what the business models are. There's still to be explored,

502
00:25:47,400 --> 00:25:50,679
Speaker 13: and so there's a terrible I personally wouldn't be buying

503
00:25:50,720 --> 00:25:52,680
Speaker 13: shares in AI companies at the member. Then I'm not

504
00:25:52,720 --> 00:25:55,120
Speaker 13: a stocks and shares person, so I'm not in the.

505
00:25:55,119 --> 00:25:57,399
Speaker 3: Contrad style, Wendy.

506
00:25:57,440 --> 00:26:01,200
Speaker 4: We appreciate the perspective that will go commercialization. A second

507
00:26:01,240 --> 00:26:04,639
Speaker 4: today is Meta connect and we will hear from the

508
00:26:04,680 --> 00:26:07,320
Speaker 4: parent company of Facebook what they are doing in the

509
00:26:07,320 --> 00:26:10,639
Speaker 4: world of artificial intelligence. But broadly they have stuck to

510
00:26:10,920 --> 00:26:15,440
Speaker 4: the doctrine of open source development. What is your position

511
00:26:15,600 --> 00:26:17,000
Speaker 4: on open source development?

512
00:26:18,080 --> 00:26:19,480
Speaker 14: Well, I'm a circular academic.

513
00:26:19,560 --> 00:26:21,840
Speaker 13: I love it for the innovation it provides, but I

514
00:26:22,000 --> 00:26:26,240
Speaker 13: worry about the risks and who's responsible is the world

515
00:26:26,280 --> 00:26:30,520
Speaker 13: of responsible AI if you get you know who's responsible

516
00:26:30,560 --> 00:26:34,359
Speaker 13: for the use of that open source and who's responsible

517
00:26:34,440 --> 00:26:38,320
Speaker 13: for whether it goes to the bad actors or the good.

518
00:26:38,160 --> 00:26:39,800
Speaker 14: Actors down the line.

519
00:26:39,840 --> 00:26:41,960
Speaker 13: As we talk about regulation, we have to talk about

520
00:26:41,960 --> 00:26:44,960
Speaker 13: regulation of open source as well as the regulation of

521
00:26:45,040 --> 00:26:47,080
Speaker 13: the core generators of the technology.

522
00:26:48,200 --> 00:26:51,800
Speaker 2: I've seem to recall when Meta first announced Lama Too

523
00:26:52,240 --> 00:26:55,560
Speaker 2: and Nick Kleagg was out there discussing about the why

524
00:26:55,600 --> 00:26:57,160
Speaker 2: they're focused on open sourcing.

525
00:26:57,800 --> 00:27:01,000
Speaker 5: You said, and I think it was you saying, look, this.

526
00:27:00,880 --> 00:27:04,920
Speaker 2: Is potentially like giving people the instructions for a nuclear

527
00:27:04,960 --> 00:27:07,720
Speaker 2: bomb here. Do you still stand by that that it

528
00:27:07,760 --> 00:27:10,919
Speaker 2: could be as impactful? And you think Meta and the

529
00:27:10,920 --> 00:27:14,080
Speaker 2: rest of the regulatory community are reacting to that.

530
00:27:15,440 --> 00:27:18,040
Speaker 13: Well, I yes, I stand by what I said in

531
00:27:18,040 --> 00:27:20,400
Speaker 13: these sense, and it makes people think about what we're

532
00:27:20,400 --> 00:27:24,160
Speaker 13: doing right if the say are the AI companies are

533
00:27:24,160 --> 00:27:26,760
Speaker 13: saying we can't explain how this stuff works, but we're

534
00:27:26,760 --> 00:27:29,240
Speaker 13: putting it out there anyway, you know, we've I'm not

535
00:27:29,320 --> 00:27:30,199
Speaker 13: a doom sir about this.

536
00:27:30,280 --> 00:27:31,720
Speaker 14: I think generative AI is going to.

537
00:27:31,640 --> 00:27:35,200
Speaker 13: Be a profoundly positive technology if used well and responsibly.

538
00:27:35,640 --> 00:27:37,840
Speaker 13: But lots of people are pulling Jeffrey Hinton and people

539
00:27:37,880 --> 00:27:40,879
Speaker 13: have pulled out of it. They're also it's dangerous, it's dangerous,

540
00:27:40,920 --> 00:27:42,960
Speaker 13: We've got to be careful. But then they're giving away

541
00:27:43,000 --> 00:27:46,199
Speaker 13: the open source versions. It just seems so contradictory in

542
00:27:46,240 --> 00:27:49,440
Speaker 13: my mind. If you think something is so dangerous, shouldn't

543
00:27:49,480 --> 00:27:52,440
Speaker 13: you be making sure very sure about who the people

544
00:27:52,480 --> 00:27:54,040
Speaker 13: you're giving it to and what they're.

545
00:27:53,840 --> 00:27:54,600
Speaker 14: Going to do with it.

546
00:27:55,720 --> 00:27:58,680
Speaker 2: Also what's interesting is an inn Video executive has since

547
00:27:58,800 --> 00:28:00,760
Speaker 2: left the business and as it's two thousand and one,

548
00:28:00,760 --> 00:28:03,840
Speaker 2: claiming that their biggest concern is the fact that it

549
00:28:03,920 --> 00:28:06,919
Speaker 2: is being dominated by big tech players and then there

550
00:28:06,960 --> 00:28:08,959
Speaker 2: isn't enough of the startups being able to come in

551
00:28:09,000 --> 00:28:11,080
Speaker 2: and other players being able to be at the table.

552
00:28:11,280 --> 00:28:12,320
Speaker 5: Do you agree with that narrative?

553
00:28:12,320 --> 00:28:14,520
Speaker 2: I mean, we're about to have yet another summit occurring

554
00:28:14,520 --> 00:28:15,600
Speaker 2: where you are in the UK.

555
00:28:16,480 --> 00:28:18,640
Speaker 13: Well, I won't be at the summit right the people

556
00:28:18,680 --> 00:28:21,760
Speaker 13: at the It's at Bletchley Park, which is tiny. There's

557
00:28:21,760 --> 00:28:24,000
Speaker 13: about one hundred and twenty seats you can get into

558
00:28:24,040 --> 00:28:26,320
Speaker 13: the conference room and a number of country if I

559
00:28:26,359 --> 00:28:29,120
Speaker 13: had that by the number of countries attending, there won't

560
00:28:29,119 --> 00:28:32,560
Speaker 13: be many reps from every country. We mainly diplomats people

561
00:28:32,600 --> 00:28:35,040
Speaker 13: from the intelligence agencies because it's all about.

562
00:28:34,880 --> 00:28:36,320
Speaker 14: Cybersecurity and national security.

563
00:28:36,880 --> 00:28:40,480
Speaker 13: And it'll be the tech grows, the people running the

564
00:28:40,480 --> 00:28:41,600
Speaker 13: tech companies that will be there.

565
00:28:41,600 --> 00:28:45,560
Speaker 14: There won't be a diversity of thought of any.

566
00:28:45,440 --> 00:28:49,960
Speaker 13: Type there, and so I really worry that this whole

567
00:28:49,960 --> 00:28:53,880
Speaker 13: conversation is being run by the tech companies and they're

568
00:28:54,400 --> 00:28:59,680
Speaker 13: being effectively asked to regulate themselves and they're giving away

569
00:28:59,680 --> 00:29:02,520
Speaker 13: stuff to you know, here's the open source guys. You

570
00:29:02,640 --> 00:29:05,960
Speaker 13: do do this is who's responsible in this food chain?

571
00:29:06,600 --> 00:29:08,600
Speaker 14: Where is the responsibility? That's what wiries me.

572
00:29:09,600 --> 00:29:11,320
Speaker 3: Well, Wendy, let's talk about the nation.

573
00:29:12,440 --> 00:29:14,240
Speaker 4: That's why I want to ask you, though, Wendy, about

574
00:29:14,240 --> 00:29:16,000
Speaker 4: the nation state level action.

575
00:29:16,440 --> 00:29:16,600
Speaker 3: Right.

576
00:29:16,680 --> 00:29:18,760
Speaker 4: We had Joe White on the show last week, the

577
00:29:18,880 --> 00:29:22,160
Speaker 4: UK Technology Ambassador, and he was telling Caroline and I

578
00:29:22,200 --> 00:29:24,720
Speaker 4: about all the meetings he's having with the tech companies

579
00:29:25,120 --> 00:29:30,440
Speaker 4: to secure the compute, the chip makers, the hyperscale cloud providers.

580
00:29:30,720 --> 00:29:33,120
Speaker 4: So I understand your concerns, but do you at least

581
00:29:33,120 --> 00:29:37,520
Speaker 4: see the UK trying to get itself at a national

582
00:29:37,640 --> 00:29:40,000
Speaker 4: level in a position of leadership in what is a

583
00:29:40,040 --> 00:29:41,080
Speaker 4: nascent technology.

584
00:29:41,720 --> 00:29:43,560
Speaker 13: Yes, of course I do, and a lot of the

585
00:29:43,600 --> 00:29:47,760
Speaker 13: things they're doing is totally applaud We have to put

586
00:29:47,800 --> 00:29:49,480
Speaker 13: more money into this the UK does.

587
00:29:49,560 --> 00:29:50,600
Speaker 14: I mean we don't.

588
00:29:50,640 --> 00:29:51,920
Speaker 13: We are never going to be able to put the

589
00:29:51,960 --> 00:29:54,360
Speaker 13: amount of money the US and China puts in. The

590
00:29:54,360 --> 00:29:56,760
Speaker 13: EU's bigger than us, it could put more in. We

591
00:29:56,800 --> 00:29:58,920
Speaker 13: don't have the companies in Europe, of course, they're all

592
00:29:58,960 --> 00:30:02,360
Speaker 13: in Washington, in Washington or in shen Zen in China,

593
00:30:03,040 --> 00:30:07,280
Speaker 13: and so we can only lead by regulating, governing. And

594
00:30:07,320 --> 00:30:10,040
Speaker 13: I've always said that that's the right thing for us

595
00:30:10,080 --> 00:30:11,760
Speaker 13: to do, because we're good at that sort of stuff.

596
00:30:11,800 --> 00:30:14,920
Speaker 13: But just at the moment, since chat GPT came out,

597
00:30:15,320 --> 00:30:18,920
Speaker 13: everything has flipped in the UK. It's really turned so

598
00:30:19,000 --> 00:30:21,160
Speaker 13: that it is all about the technology at the moment

599
00:30:21,240 --> 00:30:26,520
Speaker 13: and the safety risks, and it's not about very little

600
00:30:26,520 --> 00:30:27,680
Speaker 13: about how you you know.

601
00:30:27,600 --> 00:30:29,400
Speaker 14: The good things that this can be used for and.

602
00:30:29,360 --> 00:30:32,360
Speaker 13: How it's going to be used by society evolving the

603
00:30:32,400 --> 00:30:35,520
Speaker 13: wider community in those debates.

604
00:30:36,680 --> 00:30:37,480
Speaker 3: Day Mighty Hall.

605
00:30:37,560 --> 00:30:40,440
Speaker 4: On that note, then, let me ask you then in

606
00:30:40,480 --> 00:30:45,160
Speaker 4: your research, what are you most excited about about artificial

607
00:30:45,200 --> 00:30:46,880
Speaker 4: intelligence bringing to society.

608
00:30:47,840 --> 00:30:50,760
Speaker 13: Well, I'm excited about the things that the day I

609
00:30:50,880 --> 00:30:53,920
Speaker 13: can do that will give us answers to questions we

610
00:30:53,920 --> 00:30:55,280
Speaker 13: couldn't possibly.

611
00:30:55,040 --> 00:30:57,000
Speaker 14: Work out without it. So example, in health.

612
00:30:57,040 --> 00:31:01,560
Speaker 13: Everyone talks about health, but the breakthroughs are already. It

613
00:31:01,600 --> 00:31:03,800
Speaker 13: will relieve people in the judgeries of some of the

614
00:31:03,800 --> 00:31:06,440
Speaker 13: boring jobs, create new jobs. It will help us with

615
00:31:06,600 --> 00:31:09,040
Speaker 13: solving the big ground challenges of the world like the

616
00:31:09,160 --> 00:31:12,920
Speaker 13: climate change and energy and food security. And you know,

617
00:31:12,960 --> 00:31:15,760
Speaker 13: we'll be able to do things with AI and data

618
00:31:15,800 --> 00:31:20,640
Speaker 13: we couldn't possibly have done without without it, and that's

619
00:31:20,720 --> 00:31:23,440
Speaker 13: you know, it's just and it's going to change. Generative

620
00:31:23,440 --> 00:31:25,440
Speaker 13: AI is going to change how we do everything. It

621
00:31:25,480 --> 00:31:28,400
Speaker 13: will change how you work, how I work, how students work.

622
00:31:28,720 --> 00:31:29,200
Speaker 14: You know it will.

623
00:31:29,440 --> 00:31:31,360
Speaker 13: It will be as profound as the introduction of the

624
00:31:31,360 --> 00:31:34,360
Speaker 13: calculator and the computer back in the seventies. We will

625
00:31:34,400 --> 00:31:38,479
Speaker 13: all approach the creation of things differently. But it doesn't

626
00:31:38,520 --> 00:31:40,880
Speaker 13: mean that generative AI is going to wipe us out

627
00:31:40,880 --> 00:31:43,760
Speaker 13: of existence as it is now. So that there's such

628
00:31:43,800 --> 00:31:48,800
Speaker 13: a hype around the existential threat and that we've got

629
00:31:48,840 --> 00:31:52,040
Speaker 13: to of course talk about that and global but it's

630
00:31:52,120 --> 00:31:56,520
Speaker 13: not the immediate threats are you know, more about misinformation

631
00:31:56,800 --> 00:31:59,800
Speaker 13: and threats to the democratic process.

632
00:32:00,760 --> 00:32:03,200
Speaker 14: How AI might be used in the.

633
00:32:03,200 --> 00:32:05,760
Speaker 13: Campaign's next year and that and that's those are the

634
00:32:05,760 --> 00:32:06,600
Speaker 13: things that worry me.

635
00:32:07,920 --> 00:32:11,040
Speaker 4: Dame Wendy Hall, Professor of computer science at the University

636
00:32:11,080 --> 00:32:14,320
Speaker 4: of Southampton. Robust conversation as always, Thank you.

637
00:32:14,960 --> 00:32:15,360
Speaker 14: Okay.

638
00:32:16,080 --> 00:32:19,520
Speaker 4: Now coming up here from Bloomberg Technology the future of

639
00:32:19,680 --> 00:32:24,240
Speaker 4: marine transportation? Can the marine transportation industry go electric? We'll

640
00:32:24,240 --> 00:32:26,560
Speaker 4: talk all about that more with ARC co founder Ryan

641
00:32:26,600 --> 00:32:28,960
Speaker 4: Cook and Eclipse Sventure's founder Lee or Susan.

642
00:32:29,000 --> 00:32:29,840
Speaker 3: That's coming up next.

643
00:32:30,040 --> 00:32:49,640
Speaker 4: This is Bloomberg Technology. Okay, time for talking tech. First

644
00:32:49,640 --> 00:32:52,320
Speaker 4: stop can How's planned IPO will be Keith for gauging

645
00:32:52,360 --> 00:32:56,200
Speaker 4: demand in Hong Kong's sluggish deals market, companies have raised

646
00:32:56,240 --> 00:32:59,000
Speaker 4: just under three billion dollars so far in twenty twenty three.

647
00:32:59,240 --> 00:33:02,640
Speaker 4: That's on track for the least since the nineteen nineties.

648
00:33:02,680 --> 00:33:04,000
Speaker 3: What a stat can now.

649
00:33:04,040 --> 00:33:06,840
Speaker 4: The logistics unit of Aali Barber is expected to raise

650
00:33:06,880 --> 00:33:10,000
Speaker 4: at least one billion dollars, and Binance says it's doing

651
00:33:10,040 --> 00:33:13,800
Speaker 4: business in Russia as it recognizes that quote operating in

652
00:33:13,880 --> 00:33:17,240
Speaker 4: Russia is not compatible with its compliance strategy. The crypto

653
00:33:17,280 --> 00:33:21,120
Speaker 4: exchange platform is selling its units to comes a service

654
00:33:21,200 --> 00:33:24,360
Speaker 4: launch just one day before the deal was announced. Binance

655
00:33:24,400 --> 00:33:27,560
Speaker 4: and its founder Chang Peng Jao have been the subjects

656
00:33:27,760 --> 00:33:31,080
Speaker 4: of regulatory reviews this year in the US, plus TikTok

657
00:33:31,160 --> 00:33:34,080
Speaker 4: Shop is dealing with a major setback to its growth

658
00:33:34,080 --> 00:33:37,720
Speaker 4: in ambitions. In Indonesia, officials implemented a ban that prohibits

659
00:33:37,760 --> 00:33:42,080
Speaker 4: social commerce companies from facilitating direct e commerce payments on

660
00:33:42,120 --> 00:33:44,960
Speaker 4: their platforms. The new policies aimed at ensuring local e

661
00:33:45,000 --> 00:33:48,760
Speaker 4: commerce services such as Tokopedia won't be squeezed out.

662
00:33:48,920 --> 00:33:49,520
Speaker 3: Caroline.

663
00:33:50,120 --> 00:33:53,360
Speaker 2: Yeah, well, now you've got a real focus today in

664
00:33:53,400 --> 00:33:55,280
Speaker 2: the VC spotlight right where we're going to be talking

665
00:33:55,520 --> 00:33:57,400
Speaker 2: electric boat snow less take it away.

666
00:33:58,400 --> 00:34:01,520
Speaker 4: Yes, So two interesting people coming up on the program. First,

667
00:34:01,760 --> 00:34:05,840
Speaker 4: ARC's co founder and CTO joins us Ryan Cook alongside

668
00:34:05,920 --> 00:34:08,600
Speaker 4: Lee or Susan, one of the partners over it at clips.

669
00:34:09,239 --> 00:34:13,040
Speaker 4: Electric Boat Companies raised seventy million dollars to expand its

670
00:34:13,080 --> 00:34:16,880
Speaker 4: operations electrify more of the marine industry. This is like

671
00:34:17,239 --> 00:34:20,600
Speaker 4: the Tesla playbook to go mass market in boats. So

672
00:34:20,680 --> 00:34:22,880
Speaker 4: let's bring this conversation in and Ryan I want to

673
00:34:22,880 --> 00:34:26,520
Speaker 4: start with you. You had a limited number, fewer than

674
00:34:26,560 --> 00:34:30,440
Speaker 4: twenty of these three hundred thousand dollars battery electric boats.

675
00:34:30,640 --> 00:34:33,080
Speaker 4: The next gen model is going to come next year,

676
00:34:33,120 --> 00:34:35,560
Speaker 4: twenty twenty four, but we don't know anything about it.

677
00:34:35,640 --> 00:34:38,120
Speaker 4: So tell us where do these funds go to develop

678
00:34:38,160 --> 00:34:39,040
Speaker 4: this next gen model?

679
00:34:40,280 --> 00:34:40,480
Speaker 9: Yeah?

680
00:34:40,520 --> 00:34:43,719
Speaker 15: Thanks, Ed, Yeah, I mean these funds really go to

681
00:34:43,800 --> 00:34:48,239
Speaker 15: us expanding production into a more mass market vehicle. The

682
00:34:48,360 --> 00:34:52,239
Speaker 15: ARC one was limited edition, we completely sold out, but

683
00:34:52,280 --> 00:34:54,839
Speaker 15: we really want to focus our attention now on electrifying

684
00:34:55,760 --> 00:34:58,400
Speaker 15: everything else on the water, everything up in the marine industry.

685
00:35:00,040 --> 00:35:02,560
Speaker 15: A lot of gas boats out there, and ourxsmission is

686
00:35:02,600 --> 00:35:05,920
Speaker 15: to convert all of them to electric. These funds really

687
00:35:05,960 --> 00:35:08,719
Speaker 15: help us accelerate that mission. We're going to be using

688
00:35:08,760 --> 00:35:11,680
Speaker 15: it to expand our footprint here in Los Angeles, and

689
00:35:11,760 --> 00:35:13,640
Speaker 15: we're going to be using it too, as you mentioned,

690
00:35:13,960 --> 00:35:17,719
Speaker 15: work on our next more mass market product, which we

691
00:35:17,760 --> 00:35:21,000
Speaker 15: will unveil more details in the next couple of months.

692
00:35:21,120 --> 00:35:24,280
Speaker 2: Oh, you leave us hanging, but or on that respect,

693
00:35:24,400 --> 00:35:27,600
Speaker 2: what is the ultimate total addressable market here?

694
00:35:27,640 --> 00:35:28,600
Speaker 5: From your mind's eye?

695
00:35:28,640 --> 00:35:31,280
Speaker 2: Why are you so excited to commit more capital here?

696
00:35:32,600 --> 00:35:34,520
Speaker 1: Yeah, it's great to be here again.

697
00:35:34,640 --> 00:35:38,440
Speaker 16: Caroline, and I think you know, like many other physical industries,

698
00:35:38,480 --> 00:35:41,040
Speaker 16: the marinetime industries is being here for I don't know,

699
00:35:41,440 --> 00:35:42,600
Speaker 16: five thousand years.

700
00:35:43,560 --> 00:35:44,319
Speaker 1: It's a gay game.

701
00:35:44,400 --> 00:35:47,160
Speaker 16: Think industry of multi hundreds of billions of dollars that's

702
00:35:47,200 --> 00:35:52,600
Speaker 16: still being run by generally gas, a combustant engine. That's

703
00:35:52,600 --> 00:35:57,280
Speaker 16: all going to change by electlification, with batteries, with electronics.

704
00:35:57,480 --> 00:35:59,880
Speaker 1: You guys mentioned in the previous section AI.

705
00:36:00,320 --> 00:36:02,719
Speaker 16: We love seeing AI in a physical industries and the

706
00:36:02,800 --> 00:36:06,640
Speaker 16: impact in society and climate, and of course building what

707
00:36:06,719 --> 00:36:08,240
Speaker 16: we believe will be the next Testla.

708
00:36:08,320 --> 00:36:09,080
Speaker 1: Here with dog.

709
00:36:10,920 --> 00:36:14,040
Speaker 4: Ryan, we talked about your CV. You had seven years

710
00:36:14,040 --> 00:36:18,160
Speaker 4: of engineering at SpaceX, some of your investors at Tesla alum,

711
00:36:18,520 --> 00:36:21,040
Speaker 4: some of your staff a Tesla alum. And you seem

712
00:36:21,080 --> 00:36:23,880
Speaker 4: to be replicating this idea like Tesla started with the Roadster,

713
00:36:24,000 --> 00:36:26,640
Speaker 4: then the Model Less than the Model three. Is it

714
00:36:26,680 --> 00:36:29,440
Speaker 4: fair to say that you're kind of replicating that path forward.

715
00:36:30,719 --> 00:36:32,000
Speaker 1: Yeah, I think that's fair to say.

716
00:36:32,200 --> 00:36:34,840
Speaker 15: I mean, we really think that's the smartest way to

717
00:36:34,840 --> 00:36:37,920
Speaker 15: go about doing this. The hardest part about working on

718
00:36:37,960 --> 00:36:41,880
Speaker 15: a hardware startup is really scaling that production. Starting with

719
00:36:41,920 --> 00:36:44,520
Speaker 15: something that's a smaller batch field kind of like the

720
00:36:44,640 --> 00:36:48,839
Speaker 15: ARC one. It allows you to learn a lot where

721
00:36:48,880 --> 00:36:51,680
Speaker 15: the risks are minimized because you have fewer products out there.

722
00:36:51,920 --> 00:36:55,000
Speaker 15: We can take all of those learnings and honestly move

723
00:36:55,080 --> 00:36:57,480
Speaker 15: faster as we move into the next product, rather than

724
00:36:57,520 --> 00:37:00,920
Speaker 15: trying to jump straight to something else mass market. And

725
00:37:01,080 --> 00:37:04,840
Speaker 15: the other point here that we're only two and a

726
00:37:04,880 --> 00:37:08,680
Speaker 15: half years old, we've already sold and delivered orc ones

727
00:37:08,719 --> 00:37:12,319
Speaker 15: to customers. That's incredible speed for a hardware company, and

728
00:37:12,360 --> 00:37:14,759
Speaker 15: it really speaks to the engineering team that we have

729
00:37:15,040 --> 00:37:18,000
Speaker 15: and this kind of first principles approach that you know

730
00:37:18,040 --> 00:37:20,279
Speaker 15: we bring from space accent as well to be able

731
00:37:20,320 --> 00:37:21,400
Speaker 15: to execute that quickly.

732
00:37:22,719 --> 00:37:25,680
Speaker 4: Leo, You've put a lot of dollars into real world startups,

733
00:37:25,719 --> 00:37:28,840
Speaker 4: companies that actually make stuff. But it was interesting to

734
00:37:28,920 --> 00:37:32,680
Speaker 4: note the expansion of US manufacturing here and not going overseas.

735
00:37:33,000 --> 00:37:34,120
Speaker 3: What do you make of that, Leo?

736
00:37:36,320 --> 00:37:40,640
Speaker 16: I think there is a new industrial renaissance in this country.

737
00:37:41,160 --> 00:37:43,719
Speaker 1: I just came back from Washington, d C. Two weeks ago.

738
00:37:44,239 --> 00:37:48,360
Speaker 16: The government is very serious to help this country build again.

739
00:37:48,920 --> 00:37:52,560
Speaker 16: I think we understanding what that means from a geopolitics

740
00:37:52,600 --> 00:37:55,839
Speaker 16: point of view and the needs to secure and resilience,

741
00:37:55,880 --> 00:37:59,280
Speaker 16: our supply chain and manufacturing, and that's mean building companies

742
00:37:59,320 --> 00:38:02,799
Speaker 16: like RC locally when you're putting on top of it,

743
00:38:02,920 --> 00:38:06,799
Speaker 16: automation and software the other two biggest move that we

744
00:38:06,840 --> 00:38:10,640
Speaker 16: are seeing in physical industries. You now can build the

745
00:38:10,680 --> 00:38:13,080
Speaker 16: most sophisticated boat in Los Angeles.

746
00:38:13,719 --> 00:38:17,320
Speaker 1: Uh, that would be just not something you could do before.

747
00:38:18,640 --> 00:38:20,960
Speaker 16: And it's very exciting because I think we are seeing

748
00:38:20,960 --> 00:38:23,800
Speaker 16: companies like Tesla and s Basics and ARC and others

749
00:38:24,960 --> 00:38:27,920
Speaker 16: building a new industrial regime here in this country.

750
00:38:28,440 --> 00:38:31,680
Speaker 2: Ron Therefore, what is the headache for you as you

751
00:38:31,800 --> 00:38:34,560
Speaker 2: want to take on this money to accelerate in a

752
00:38:34,560 --> 00:38:36,960
Speaker 2: big way. Is it supply chain that remains a concern?

753
00:38:37,040 --> 00:38:39,200
Speaker 2: Is it talent pool? What is it that hinders you

754
00:38:39,200 --> 00:38:39,719
Speaker 2: if at all?

755
00:38:43,239 --> 00:38:47,560
Speaker 15: Yeah, it's it's probably a combination of both of those.

756
00:38:49,080 --> 00:38:51,480
Speaker 15: You know, talent is really the most important. Talent is

757
00:38:51,520 --> 00:38:54,760
Speaker 15: what lets you, you know, accelerate move quickly. We invest

758
00:38:54,760 --> 00:38:56,960
Speaker 15: a lot in our people. We have a great engineering

759
00:38:57,040 --> 00:39:00,160
Speaker 15: team with a great background from you know Tueslee be

760
00:39:00,200 --> 00:39:05,720
Speaker 15: in SpaceX, all those companies. The supply chain is definitely

761
00:39:05,719 --> 00:39:07,800
Speaker 15: the top of mind as well. That's actually where CLIPS

762
00:39:07,840 --> 00:39:10,680
Speaker 15: is incredibly helpful. They have a great portfolio of companies.

763
00:39:10,680 --> 00:39:13,400
Speaker 15: They have a lot of experience operating in the hardware space.

764
00:39:15,320 --> 00:39:18,040
Speaker 15: Our main focus though, is really just execution.

765
00:39:17,800 --> 00:39:19,560
Speaker 1: On production ramp.

766
00:39:20,320 --> 00:39:23,240
Speaker 15: Anyone who's started a hardware company knows trying to scale

767
00:39:23,280 --> 00:39:27,120
Speaker 15: production is the hardest possible thing. Building one of something

768
00:39:27,200 --> 00:39:31,160
Speaker 15: is easy, Building hundreds thousands of something is incredibly difficult.

769
00:39:32,120 --> 00:39:33,640
Speaker 1: So that's really you know, the next.

770
00:39:34,000 --> 00:39:37,080
Speaker 15: Year, two years being our entire focus is building the

771
00:39:37,120 --> 00:39:38,360
Speaker 15: production line itself.

772
00:39:38,880 --> 00:39:40,319
Speaker 2: Well here, so hope you don't have to sleep there

773
00:39:40,360 --> 00:39:44,280
Speaker 2: too much as well, Elan did arc CTO co founder

774
00:39:44,360 --> 00:39:46,399
Speaker 2: Ryan Cook, great has some time you an Eclipse founder

775
00:39:46,440 --> 00:39:56,680
Speaker 2: and managing partner ner Sisan, Thank you very much. Now, look,

776
00:39:56,760 --> 00:39:58,479
Speaker 2: all eyes are going to be trained on the Meta

777
00:39:58,520 --> 00:40:01,359
Speaker 2: Connect event, which is slee to start relatively shortly about

778
00:40:01,360 --> 00:40:03,440
Speaker 2: half a last time, but we've got to touch on

779
00:40:03,480 --> 00:40:05,800
Speaker 2: the news out of Snap, the company closing a division

780
00:40:05,800 --> 00:40:09,560
Speaker 2: focused on making augmented reality services for businesses, putting the

781
00:40:09,560 --> 00:40:12,319
Speaker 2: plug on its latest attempt just try and diversify this

782
00:40:12,400 --> 00:40:15,040
Speaker 2: business mandate. Seeing a place to say cover both of

783
00:40:15,040 --> 00:40:17,880
Speaker 2: these key companies, Bloombag Intelligence and you already wrote to

784
00:40:17,920 --> 00:40:19,800
Speaker 2: react to what was a great piece coming out of

785
00:40:19,800 --> 00:40:22,640
Speaker 2: our own Alex Bernka, what do you make of really

786
00:40:22,640 --> 00:40:24,839
Speaker 2: the decision quite hard nose decision here to just pull

787
00:40:24,840 --> 00:40:25,240
Speaker 2: the plug.

788
00:40:25,960 --> 00:40:28,879
Speaker 17: I think in case of all these companies that are

789
00:40:28,920 --> 00:40:34,120
Speaker 17: relying on hyperscalers to give them the cloud capacity. I mean, look,

790
00:40:34,480 --> 00:40:38,240
Speaker 17: investing in generative AI isn't cheap, and that's what every

791
00:40:38,360 --> 00:40:41,400
Speaker 17: small company is realizing. It's hitting their growth margin. In

792
00:40:41,400 --> 00:40:44,200
Speaker 17: the case of Snap, clearly they have a problem with

793
00:40:44,280 --> 00:40:47,799
Speaker 17: top line growth. And I think AR, even though it

794
00:40:47,920 --> 00:40:49,920
Speaker 17: was touted as the next big thing a couple of

795
00:40:50,040 --> 00:40:53,640
Speaker 17: years back, clearly isn't the thing that investors are focused on.

796
00:40:53,680 --> 00:40:57,080
Speaker 17: They're more focused on generative AI, and that's why they're

797
00:40:57,120 --> 00:41:00,600
Speaker 17: trying to cut their costs here. And look, Snap, compared

798
00:41:00,600 --> 00:41:03,880
Speaker 17: to their peers has a very high R and D intensity,

799
00:41:03,920 --> 00:41:07,360
Speaker 17: it's about forty percent, So compare that to all their peers,

800
00:41:07,400 --> 00:41:09,520
Speaker 17: it's more twenty to twenty five percent is more than

801
00:41:09,560 --> 00:41:13,400
Speaker 17: norm So I'm not surprised they're cutting that line.

802
00:41:13,960 --> 00:41:17,320
Speaker 4: Mandy, Meta connect and the keynote from Zark coming up shortly.

803
00:41:17,840 --> 00:41:21,440
Speaker 4: What's the AI story that you want to hear from Meta?

804
00:41:22,239 --> 00:41:25,600
Speaker 17: Yeah, Look, I think we've seen a clear strategy from

805
00:41:25,719 --> 00:41:29,920
Speaker 17: Microsoft using copilots to monetize GENI as well as the

806
00:41:29,920 --> 00:41:33,720
Speaker 17: cloud capacity. Same thing with Google, you know, monetizing cloud

807
00:41:33,840 --> 00:41:38,600
Speaker 17: and then they're launching copilots do it, and also they're

808
00:41:38,640 --> 00:41:41,399
Speaker 17: integrating it in search. In the case of Meta, yes,

809
00:41:41,480 --> 00:41:44,799
Speaker 17: they have a large anguage model, they have open source it. Well,

810
00:41:44,800 --> 00:41:47,040
Speaker 17: we still don't know how they are going to monetize it,

811
00:41:47,320 --> 00:41:50,080
Speaker 17: and a lot of the GPU capacity that they're buying

812
00:41:50,440 --> 00:41:53,040
Speaker 17: it's more for internal use. Yes, it will help with

813
00:41:53,160 --> 00:41:56,719
Speaker 17: at targeting, but I think investors are more focused on

814
00:41:56,840 --> 00:42:01,080
Speaker 17: external forms of monetization, and that's fair. They can integrate

815
00:42:01,120 --> 00:42:06,319
Speaker 17: their large ANGLID model and build an ecosystem that's tied

816
00:42:06,360 --> 00:42:09,920
Speaker 17: to the API. I think that would be huge in

817
00:42:10,000 --> 00:42:11,120
Speaker 17: terms of monetization.

818
00:42:12,000 --> 00:42:15,160
Speaker 2: We'll see how that all unfolds, and also those agent bots,

819
00:42:15,280 --> 00:42:19,239
Speaker 2: chatbots and how all the different variations are discussed. Man

820
00:42:19,280 --> 00:42:21,360
Speaker 2: keep saying Bloomberg technology will let him get back to

821
00:42:21,400 --> 00:42:23,560
Speaker 2: get ready for the meta connective and meanwhile, now that

822
00:42:23,640 --> 00:42:25,640
Speaker 2: does it for this addition of Bloomberg technology today.

823
00:42:26,560 --> 00:42:27,640
Speaker 3: Yeah, so much to recap.

824
00:42:27,680 --> 00:42:30,040
Speaker 4: There will be people out there that are excited about

825
00:42:30,320 --> 00:42:31,239
Speaker 4: ARVR headsets.

826
00:42:31,280 --> 00:42:32,720
Speaker 3: Recap our discussion.

827
00:42:32,280 --> 00:42:35,839
Speaker 4: On that on the podcast Apples, Spotify, n iHeart. Of course,

828
00:42:35,840 --> 00:42:38,279
Speaker 4: it's on all the Bloomberg platforms as well. Big show

829
00:42:38,280 --> 00:42:40,640
Speaker 4: coming up in twenty four hours time from SFA New York.

830
00:42:41,000 --> 00:42:43,760
Speaker 4: This is Bloomberg Technology.