WEBVTT - SEC's Gary Gensler and an AI Future 0:00:01.440 --> 0:00:05.760 From Mahart where Innovation, Money and power Collie in Silicon 0:00:05.840 --> 0:00:10.280 Vallet NBN. This is Bloomberg Technology with Caroline Hyde and 0:00:10.520 --> 0:00:11.600 Ed Ludlow. 0:00:25.840 --> 0:00:29.120 Live from London and San Francisco. This is Bloomberg Technology 0:00:29.200 --> 0:00:33.640 coming up ASML's CEO on how the US China relationship 0:00:33.880 --> 0:00:35.360 could shape the chip industry. 0:00:36.400 --> 0:00:39.400 The future of sec Oversight will be joined live by 0:00:39.520 --> 0:00:41.320 chair Gary Gensler. 0:00:42.000 --> 0:00:44.760 And SAP shares saw to a new record thanks to 0:00:44.800 --> 0:00:48.280 AI driving cloud revenue. We have that and many more 0:00:48.280 --> 0:00:51.280 earnings for you. But first, let's just check on these markets. 0:00:51.280 --> 0:00:53.600 We shine a light on the Nasdaq, which is currently 0:00:53.640 --> 0:00:55.120 off by about a tenth per percent. The S and 0:00:55.160 --> 0:00:57.400 P five founded off for two straight days. That's the 0:00:57.440 --> 0:00:59.840 first back to back losses we've seen in six weeks. 0:01:00.160 --> 0:01:02.560 There's some caution about where the Federal Reserve goes from here. 0:01:02.640 --> 0:01:04.280 Does it continue to cut rates in the face of 0:01:04.319 --> 0:01:07.120 resilient US economy even as the IMF warns of a 0:01:07.200 --> 0:01:10.160 global slow down ed? But we see tech just off 0:01:10.200 --> 0:01:12.679 a little bit. What's risk sentiment like for some of. 0:01:12.600 --> 0:01:13.440 The names you're watching? 0:01:14.000 --> 0:01:17.360 Yeah, interesting, I'm probably top story is ASML, the Dutch 0:01:17.400 --> 0:01:20.280 producer of chip making equipment. We're about to get right 0:01:20.319 --> 0:01:23.240 to a critical interview with the CEO. But the shares 0:01:23.240 --> 0:01:25.640 are worth looking at because at the high of the 0:01:25.680 --> 0:01:27.920 session in Europe they are up more than three percent. 0:01:27.959 --> 0:01:30.720 They've paired that gain to one percent, but it's worth 0:01:30.760 --> 0:01:34.560 noting we're down still more than fifteen percent since that 0:01:34.680 --> 0:01:37.400 kind of fateful early release of earnings that we covered 0:01:37.400 --> 0:01:40.600 so deeply last week. Intense focus on this name in 0:01:40.640 --> 0:01:43.600 the context of AI and what's happening with chip investment 0:01:43.640 --> 0:01:44.280 around the world. 0:01:44.400 --> 0:01:45.720 Bring us the details, Carra. 0:01:46.680 --> 0:01:49.880 Yeah, let's get to the ASML CEO Christal Fouquet, who 0:01:49.960 --> 0:01:53.320 spoke this morning at the Bloomberg Tech Summit with our 0:01:53.360 --> 0:01:55.960 own Tom Giles. It was right here in London. He 0:01:56.000 --> 0:01:58.520 discussed the future of the chip industry more broadly in China, 0:01:58.520 --> 0:02:01.960 in particular the future revenues and the impact of US regulation. 0:02:02.120 --> 0:02:02.680 Just take a lessen. 0:02:04.520 --> 0:02:08.960 The focus of China is on mainstream semiconductor. The demand 0:02:09.000 --> 0:02:13.000 for that has boomed in twenty twenty one twenty two. 0:02:13.520 --> 0:02:15.240 As a resource, the demand we. 0:02:15.160 --> 0:02:17.320 Had in China in twenty twenty one twenty two has 0:02:17.320 --> 0:02:20.440 boomed as well, and twenty one twenty two was the 0:02:20.520 --> 0:02:25.640 time if you recall where the demand was extremely high 0:02:25.960 --> 0:02:32.000 and SMR was struggling to deliver tools to everyone. Therefore 0:02:32.040 --> 0:02:35.000 we couldn't deliver a large part of the demand in China. 0:02:35.600 --> 0:02:40.480 Backlog in China grew twenty twenty three the rest of markets, 0:02:40.480 --> 0:02:43.840 so offten we got tools we could ship to China, 0:02:44.840 --> 0:02:48.040 same in twenty twenty four. So the level of business 0:02:48.080 --> 0:02:50.480 we had with Chine twenty three twenty four was more 0:02:50.720 --> 0:02:54.040 of a resource of the non delivered capacity in twenty 0:02:54.040 --> 0:02:58.200 two twenty one than anything else. And we've always explained that, 0:02:58.280 --> 0:03:02.400 you know, our fifty percent of the business in China, 0:03:02.520 --> 0:03:05.320 or most fifty percent, this was not normal. This was 0:03:05.320 --> 0:03:09.200 a peak resulting from basically. 0:03:09.520 --> 0:03:11.040 A lack of a bittervery before. 0:03:11.720 --> 0:03:14.840 The normal business in China is around twenty twenty five percent, 0:03:15.200 --> 0:03:19.440 and that's the normal demand related to mainstreams to be conductor, 0:03:19.480 --> 0:03:20.919 and I think we're going to go back to those 0:03:21.000 --> 0:03:21.800 number over time. 0:03:22.040 --> 0:03:25.320 But there is something artificial about the way we think 0:03:25.360 --> 0:03:29.240 about China as a as a purchaser of equipment like asmls, 0:03:29.480 --> 0:03:33.760 in the sense that many countries around the world US 0:03:33.800 --> 0:03:41.080 principally have have have been exerting export controls on the country. 0:03:41.160 --> 0:03:45.640 Are those controls going to become even more stringent? For example, 0:03:47.720 --> 0:03:50.200 China is not able to buy your most advanced machines. 0:03:50.320 --> 0:03:54.200 Is it possible that those restrictions could extend to the 0:03:54.280 --> 0:03:59.360 DUV level, which is used for more mainstream products. 0:04:00.320 --> 0:04:00.520 Yeah. 0:04:00.600 --> 0:04:03.880 So if you go back to the root cause of 0:04:03.960 --> 0:04:07.200 the say, the prime motivation of export ConTroll it to 0:04:07.280 --> 0:04:10.080 us to prevent China to have access to advanced technology. 0:04:11.160 --> 0:04:12.360 EWE is not in China. 0:04:13.320 --> 0:04:18.400 By not having you in China, we pretty much stop 0:04:18.720 --> 0:04:22.760 the ability of China to go beyond the five maybe 0:04:22.800 --> 0:04:26.719 three nonometer note may be able to do a few chips. 0:04:26.920 --> 0:04:28.240 You may see some of that in. 0:04:28.200 --> 0:04:31.440 The press because of of course everyone is watching very carefully. 0:04:32.120 --> 0:04:37.719 But fundamentally, by not having EUV, we have placed China. 0:04:38.120 --> 0:04:40.800 The regulation have placed China I would say ten to 0:04:40.839 --> 0:04:44.919 fifteen years behind when it comes to advanced technology. We 0:04:44.960 --> 0:04:48.599 always talk about China. We usually forget to mention the 0:04:48.680 --> 0:04:52.120 fact that while those restrictions have applied on China and UV, 0:04:52.920 --> 0:04:57.159 a lot of work has been done with other player 0:04:57.200 --> 0:05:02.240 and industry Intel, TSMC, Samsung on the most advanced EUV 0:05:02.400 --> 0:05:05.720 technology as we know it today, et. 0:05:05.720 --> 0:05:06.279 Cetera, et cetera. 0:05:06.440 --> 0:05:08.960 So there's been a lot of work down every single 0:05:09.080 --> 0:05:13.400 day to continue to widen if you want this technology gap. 0:05:13.279 --> 0:05:17.080 Based on your interaction with the Prime Minister of the 0:05:17.120 --> 0:05:22.080 Netherlands with the Foreign Ministry, is it your expectation that 0:05:22.160 --> 0:05:28.120 the restrictions will become even more limiting on China's ability 0:05:28.160 --> 0:05:30.960 to purchase machinery like asmls. 0:05:31.520 --> 0:05:35.720 Well, if you look at the geopolitic landscape, I think 0:05:35.760 --> 0:05:38.719 it's clear that the United States will continue to apply 0:05:38.839 --> 0:05:43.240 pressure on their life for more restriction. Now, the question 0:05:44.000 --> 0:05:47.200 the discussion we have with the Dutch Prime minister, I 0:05:47.240 --> 0:05:51.800 would say the European political leader, because at the end 0:05:51.839 --> 0:05:56.320 of the day, we are technology champion company, right, So 0:05:56.480 --> 0:05:59.480 these other people we have this discussion with, and the 0:05:59.560 --> 0:06:03.480 question is what is right for the Netherlands, what is 0:06:03.560 --> 0:06:06.160 right for Europe and as a results, what is right 0:06:06.200 --> 0:06:06.800 for SML. 0:06:07.640 --> 0:06:10.159 So what restriction makes sense when. 0:06:10.040 --> 0:06:13.200 It comes to national security, which has been the prime argument, 0:06:14.480 --> 0:06:17.440 and where does it stop right because, like I said, 0:06:17.440 --> 0:06:19.440 a lot of the focus in China today is on 0:06:19.520 --> 0:06:25.520 mainstream semiconductor and this is very different from you know AI. 0:06:26.160 --> 0:06:28.200 So that's the discussion we have is if the pressure 0:06:28.240 --> 0:06:31.359 will continue to be there because you know, if you 0:06:31.400 --> 0:06:34.680 look at the landscape, that's what it is. But I 0:06:34.680 --> 0:06:38.440 think that the discussion will get more sophisticated over time, 0:06:39.279 --> 0:06:40.680 the stake will become higher. 0:06:43.279 --> 0:06:47.400 That was asmlco Crystal fuqu earlier today at the Bloomberg 0:06:47.640 --> 0:06:50.000 Summer in London. Let's discuss this a bit more. Ioko 0:06:50.080 --> 0:06:54.760 Yoshioka is portfolio consulting director a wealth Enhancement group. I 0:06:54.800 --> 0:06:56.640 took a quick glance down at my Bloomberg terminal. 0:06:56.720 --> 0:06:57.240 I think you. 0:06:57.160 --> 0:07:01.600 Guys have a small exposure to the ADRs of ASML. 0:07:02.200 --> 0:07:05.920 But listening to that intense conversation, the themes are clear, right. 0:07:06.279 --> 0:07:06.960 Will there be. 0:07:07.000 --> 0:07:10.600 More export controls from the US to China when it 0:07:10.600 --> 0:07:13.560 relates to the lead edge of chips? Will there be 0:07:13.640 --> 0:07:16.760 increased tensions in the supply chain? When you listen to 0:07:16.760 --> 0:07:20.400 that interview, how do you think about a name like ASML? 0:07:20.520 --> 0:07:22.040 Good morning, Good morning ED. 0:07:22.520 --> 0:07:24.840 So you know, when we think about just the overall 0:07:24.880 --> 0:07:29.000 semiconductor chip equipment industry, you know, I think one of 0:07:29.040 --> 0:07:32.560 the key things that the CEO of ASML focus on 0:07:32.680 --> 0:07:36.080 is the mainstream versus AI. You know, we are seeing 0:07:36.120 --> 0:07:40.040 that growth on the AI side. We like names like 0:07:40.160 --> 0:07:43.440 LAM Research as well, which has you know, some etching 0:07:43.480 --> 0:07:46.840 tools for DRAM, which is used a little bit more 0:07:46.840 --> 0:07:49.560 on the AI side, So you know, one area is 0:07:49.960 --> 0:07:53.080 growing a lot more. I think the mainstream side is 0:07:53.080 --> 0:07:55.720 trying to normalize a little bit, especially with everything that's 0:07:55.760 --> 0:07:58.000 going on in China, and you just have to find 0:07:58.040 --> 0:08:01.120 a balance between the two as we look at what 0:08:01.160 --> 0:08:03.680 the chip industry is going to look like going forward. 0:08:05.400 --> 0:08:08.440 Looking at it going forward, do you have any view 0:08:08.480 --> 0:08:13.640 that it'll change post November the fifth, sixth, when we 0:08:13.720 --> 0:08:16.440 have a different outcome from an election and post January 0:08:16.480 --> 0:08:18.320 when we have a different administration in the US. 0:08:18.760 --> 0:08:22.000 You know, it's definitely something that we and our clients 0:08:22.040 --> 0:08:24.080 talk about a lot in terms of what are the 0:08:24.080 --> 0:08:27.760 potential regulatory issues as well as what are the policies 0:08:27.760 --> 0:08:31.240 that might get put in place, whether it's tariffs and whatnot. 0:08:31.360 --> 0:08:35.160 And it can change things going forward, but we have 0:08:35.240 --> 0:08:37.959 to wait and see what the actual details will be 0:08:38.840 --> 0:08:41.320 once we know who's in office and what types of 0:08:41.360 --> 0:08:44.080 policies they're going to be able to get past, just 0:08:44.160 --> 0:08:47.760 also depending on the composition of Congress. 0:08:48.200 --> 0:08:51.680 What has been so abundantly clear is that there is 0:08:51.760 --> 0:08:55.199 the AI perspective of chips, and then there's everything else, 0:08:55.679 --> 0:08:58.520 And from your perspective, is it investable in the everything 0:08:58.520 --> 0:09:00.760 else at the moment when we are still seeing inventory 0:09:00.800 --> 0:09:04.280 weigh so heavily, whether it's the auto exposure, whether it's 0:09:04.320 --> 0:09:05.319 consumer exposure. 0:09:06.040 --> 0:09:07.760 So in the near term, I think it's a little 0:09:07.800 --> 0:09:10.439 bit tougher. You know, in the near term we are 0:09:10.480 --> 0:09:14.480 seeing an oversupply of autos and some of the industrials 0:09:14.520 --> 0:09:18.120 are still sort of struggling. So in market wise, you know, 0:09:18.280 --> 0:09:20.720 it's not as great as it was back in twenty 0:09:20.760 --> 0:09:23.720 twenty year, twenty twenty one. But you know, I think 0:09:23.760 --> 0:09:26.720 going forward, as rates come down and as we see 0:09:26.760 --> 0:09:29.559 the economy continue to stay strong, I think you can 0:09:29.600 --> 0:09:32.240 see a lot of that continuing to grow over the 0:09:32.280 --> 0:09:36.280 long term. You know, these cyclical industries go through these 0:09:36.280 --> 0:09:38.040 ebbs and flows and you just have to kind of 0:09:38.240 --> 0:09:38.880 play through that. 0:09:39.720 --> 0:09:42.640 So that's why Caroline's question is so interesting, The conversation 0:09:42.760 --> 0:09:47.280 is so interesting. They are historically cyclical industries, and forget 0:09:47.400 --> 0:09:50.240 sort of the equity market portion of this. You know, 0:09:50.520 --> 0:09:53.240 the impact of the Chips Act, what's happening in Europe, 0:09:53.240 --> 0:09:56.720 all the money in capex commitment, is there a risk 0:09:56.800 --> 0:09:59.199 that it's overdone, over invested. 0:10:00.120 --> 0:10:02.120 So I think the big risk is that some of 0:10:02.120 --> 0:10:05.840 these hyperscalers do pause and take a little bit of 0:10:05.880 --> 0:10:09.400 their foot off the pedal when it comes to overall 0:10:09.640 --> 0:10:13.400 capax investing on the AI side, because then you have 0:10:13.760 --> 0:10:17.840 the cyclical low on the mainstream side and a pause 0:10:18.000 --> 0:10:21.959 potentially on the AI side. So that would be the 0:10:22.000 --> 0:10:24.319 biggest concern. But I think when you look at it 0:10:24.559 --> 0:10:27.360 in a three to five year outlook, it will all 0:10:27.400 --> 0:10:30.640 sort of equal out and provide growth on both sides. 0:10:31.520 --> 0:10:33.839 You know what we don't talk as much about sometimes 0:10:33.920 --> 0:10:37.840 oko is the technology bit. I'm pretty sure that Monsieur 0:10:37.880 --> 0:10:42.040 Fouquet would say that ASML is at the absolute cutting 0:10:42.120 --> 0:10:44.959 edge of extreme ultra violet lithography. And I bring that 0:10:45.040 --> 0:10:47.240 up because he'd probably also say that there is no 0:10:47.360 --> 0:10:51.000 company in China that could do what they do. So 0:10:51.040 --> 0:10:53.160 in all of this, all the risk and the chaos 0:10:53.240 --> 0:10:56.480 and the politics, is that not something worth considering if 0:10:56.520 --> 0:10:58.480 you're an investor in the technology sector. 0:10:59.000 --> 0:11:02.960 Absolutely, And you know, these chip equipment makers are down 0:11:03.000 --> 0:11:06.120 substantially from their highs, and so I believe that they 0:11:06.280 --> 0:11:09.760 are providing at least the stocks are providing an opportunity 0:11:09.840 --> 0:11:12.960 to get in for investors, and the near term might not, 0:11:13.200 --> 0:11:16.040 you know, be as rewarding as you might think right away, 0:11:16.080 --> 0:11:18.320 but I think over the long term you can see 0:11:18.320 --> 0:11:21.160 that benefit of these chip makers. There are not a 0:11:21.160 --> 0:11:23.360 lot of them out there. There's only a few of 0:11:23.400 --> 0:11:27.400 them that can do what they do from a technological standpoint. 0:11:28.400 --> 0:11:32.240 And there in lies the heart of ultimately competition, which 0:11:32.240 --> 0:11:34.880 is what Ed's getting at. And what's so interesting is 0:11:34.920 --> 0:11:38.000 not just competition coming from chip makers against chip makers, 0:11:38.000 --> 0:11:42.440 but eventually these hyperscalers, whether we see them remain committed 0:11:42.520 --> 0:11:45.080 to purchasing in vidio chips at the rate that they are, 0:11:45.400 --> 0:11:47.760 what about making their own chips? What that means to 0:11:47.800 --> 0:11:48.800 the ecosystem? 0:11:48.840 --> 0:11:49.319 How are you. 0:11:49.400 --> 0:11:51.960 Trying to see that out over the next three to 0:11:52.000 --> 0:11:52.760 five years as well? 0:11:52.880 --> 0:11:55.360 Okay, sure, I think you have to, you know, keep 0:11:56.320 --> 0:11:58.680 your pulse on all of it, because you know, from 0:11:58.960 --> 0:12:01.920 the hyper scalers perspective, I don't think anybody wants to 0:12:01.960 --> 0:12:05.800 be solely reliant on in Nvidia, and especially given some 0:12:05.840 --> 0:12:08.600 of the supply issues that they've had as well, So 0:12:09.000 --> 0:12:11.360 you know, it's it's something that we continue to monitor 0:12:11.400 --> 0:12:14.959 on a quarter by quarter basis and do our research on. 0:12:16.520 --> 0:12:17.440 On your research. 0:12:17.640 --> 0:12:21.080 The invitations the CES have started going out this week 0:12:21.400 --> 0:12:23.480 and heading into the U. I just wondered if you 0:12:23.520 --> 0:12:27.480 suspect we'll be talking about exactly the same stuff in January, 0:12:27.800 --> 0:12:29.600 or if we might have moved on to something new 0:12:29.640 --> 0:12:32.160 that you've found through your research. 0:12:33.040 --> 0:12:35.120 I think we're going to continue to be talking a 0:12:35.120 --> 0:12:38.040 lot about AI for quite some time. I think there's 0:12:38.040 --> 0:12:41.840 still a lot of areas to, you know, unfold. There 0:12:41.840 --> 0:12:46.200 could be a killer app that potentially surprises us at CES. 0:12:47.040 --> 0:12:49.200 You know, we never know, and I think that's why 0:12:49.280 --> 0:12:50.640 you have to keep your finger. 0:12:50.400 --> 0:12:50.960 On the pulse. 0:12:52.200 --> 0:12:54.400 Oh, We're only gonna be talking about quantum them, I'm sure. 0:12:54.600 --> 0:12:57.320 I Oka, yes, Ka, We thank you so much. Portfolio 0:12:57.360 --> 0:12:59.320 Consulting director over at Wealthy Enhancement Group. 0:12:59.480 --> 0:13:00.080 We need to have. 0:13:00.480 --> 0:13:03.439 Coming up we're going to be hearing from the essay PCFO. 0:13:03.480 --> 0:13:08.560 That's Dominique Assam. What's now Europe's biggest software company with 0:13:08.640 --> 0:13:09.439 some stellar numbers. 0:13:09.440 --> 0:13:10.960 This is bluem Meg Technology. 0:13:25.320 --> 0:13:28.520 SAP shares jumping to a record after the company announced 0:13:28.520 --> 0:13:31.480 a twenty five percent increase in cloud revenue over the year. 0:13:31.880 --> 0:13:35.160 The company's CFO Dominique Assam spoke with Bloomberg earlier. 0:13:35.200 --> 0:13:35.760 Take a listen. 0:13:36.320 --> 0:13:40.400 We had actually, if you adjust for currency fluctuation, constant 0:13:40.400 --> 0:13:44.800 currency cloud revenue growth of twenty seven percent, and by 0:13:44.840 --> 0:13:48.520 now have actually more cloud revenues in our total revenue 0:13:48.559 --> 0:13:51.880 base than any other source of revenue. So we can 0:13:51.920 --> 0:13:55.440 say after four years of heavy transformation towards the cloud, 0:13:55.480 --> 0:13:58.520 our strategy is paying off handsomely. If you look at 0:13:58.520 --> 0:14:02.000 the composition where that comes from, eighty four percent of 0:14:02.040 --> 0:14:05.400 that cloud revenue is generated but by what we call 0:14:05.480 --> 0:14:08.080 Cloud year Peace feed, which is the core cloud offering 0:14:08.160 --> 0:14:11.760 of SAP, that has actually growing thirty six percent in 0:14:11.840 --> 0:14:15.520 constant currency terms, and that's the eleventh quarter where that 0:14:15.559 --> 0:14:18.520 growth has exceeded the thirty percent growth mark. So that's 0:14:18.559 --> 0:14:21.440 really the core engine powering our growth. And what is 0:14:21.600 --> 0:14:25.240 even better, our so called CCB current cloud backlog, which 0:14:25.280 --> 0:14:30.560 is the twelve months ahead committed subscription revenue is roaring 0:14:30.640 --> 0:14:34.600 at twenty nine percent, so there's also good visibility on 0:14:34.680 --> 0:14:35.800 the growth lying ahead. 0:14:37.200 --> 0:14:39.200 When it comes to the market, to the market cap, 0:14:39.360 --> 0:14:41.000 the stock is up about fifty percent a little over 0:14:41.040 --> 0:14:43.120 fifty percent year today, so you can you can take 0:14:43.640 --> 0:14:45.680 something of a victory lap on that front. The market 0:14:45.680 --> 0:14:47.720 cap is up about one hundred billion US or one 0:14:47.760 --> 0:14:51.840 hundred billion euros since this time last year. It means 0:14:51.880 --> 0:14:54.680 that on your listing you're bumping up against that fifteen 0:14:54.760 --> 0:14:58.320 percent cap. Is Germany still a good place to be listed? 0:14:58.600 --> 0:15:00.600 That is a bit of a challenge for at this point, 0:15:00.640 --> 0:15:00.920 is it not? 0:15:02.080 --> 0:15:03.320 Well, you're right, we. 0:15:03.280 --> 0:15:05.400 Would like to see that kind of fifteen percent cap 0:15:05.480 --> 0:15:08.680 disappear because it constrains a little bit the demand in Germany. 0:15:08.960 --> 0:15:11.880 But we are really focusing on the large pools of 0:15:11.960 --> 0:15:14.240 capital available in the United States. There are still a 0:15:14.240 --> 0:15:16.120 lot of runway, a lot of room for us to 0:15:16.240 --> 0:15:19.800 grow and attract new investors. We would like not to 0:15:19.840 --> 0:15:23.200 exit Germany, but to the country attract capital into Germany, 0:15:23.320 --> 0:15:25.480 and on that front, I have to agree the fifteen 0:15:25.480 --> 0:15:28.440 percent cap in the decks is not very helpful. There's 0:15:28.520 --> 0:15:31.400 other regulation in Europe, for instance, on so called use 0:15:31.400 --> 0:15:34.480 its funds which are actively managed. Many of them are 0:15:34.520 --> 0:15:36.680 actively managed, which are also a little bit constraining, and 0:15:36.720 --> 0:15:39.960 we are currently trying to convince those who run these indecs, 0:15:40.200 --> 0:15:44.400 those in charge of legislation, to reconsider that cap. 0:15:46.240 --> 0:15:50.200 There was sap CFO Dominique Assam earlier on Bloomberg also 0:15:50.240 --> 0:15:53.760 speaking say m CEO Rene Haas, who says he's open 0:15:53.960 --> 0:15:56.360 to a secondary listener listing listen to this. 0:15:57.320 --> 0:16:00.400 We listed in New York over a year ago, and 0:16:00.480 --> 0:16:03.000 at that time are comments where we would look at 0:16:03.000 --> 0:16:06.440 a secondary listening. We're still open to it. It's not 0:16:06.520 --> 0:16:09.920 something that's top of mind right now quite candidly, but 0:16:10.440 --> 0:16:12.680 will continue to have discussions with both stakeholders and the 0:16:12.720 --> 0:16:14.480 government and in the local change. 0:16:16.800 --> 0:16:20.720 Another conversation we had was with tech investment Giant Process, 0:16:20.760 --> 0:16:24.640 the CEO Fabricio Bluisi. We talked about the current roadblocks 0:16:24.680 --> 0:16:28.120 facing adopting generative AI and where he will continue to 0:16:28.160 --> 0:16:29.240 invest in the technology. 0:16:29.280 --> 0:16:32.480 He's just part of our conversation the leaders. 0:16:32.960 --> 0:16:35.000 The leaders have to stop being the guy that say 0:16:35.480 --> 0:16:37.360 or the woman that's say I'm going to invest a 0:16:37.400 --> 0:16:39.520 billion dollars or one hundred million dollars and be the 0:16:39.520 --> 0:16:43.640 person that leads using spend time understanding what is the technology, 0:16:43.680 --> 0:16:46.640 spend time understanding that we are just starting that is 0:16:46.720 --> 0:16:48.040 so much development ahead. 0:16:48.640 --> 0:16:49.640 They should lead. 0:16:49.760 --> 0:16:53.760 They should show how they use AI to be more productive, 0:16:54.120 --> 0:16:57.200 to distribute more in the company. 0:16:57.240 --> 0:17:00.080 Will follow. Actually, the younger people, they. 0:17:00.280 --> 0:17:02.400 Even at the state why we're having this discussion, They 0:17:02.480 --> 0:17:05.280 use share, GPT or other things every day or week 0:17:05.560 --> 0:17:11.760 to study. More So leaders lead showing what is a 0:17:11.800 --> 0:17:16.000 good usage of AI instead of just writing mayuse about 0:17:17.280 --> 0:17:18.640 how much you are investing on that. 0:17:18.800 --> 0:17:21.920 You're going to invest in anymore General to AI companies, we. 0:17:21.920 --> 0:17:23.560 Are going to invest a lot. 0:17:23.840 --> 0:17:26.680 Process has a very big investment capacity, and we want 0:17:26.760 --> 0:17:30.040 to help the own emerging market and growth markets to 0:17:30.320 --> 0:17:33.080 lead this new revolution happening right now. 0:17:33.119 --> 0:17:34.840 We can't afford to be out of that. 0:17:37.240 --> 0:17:40.960 Process. And aspecy of Abricia Luisi there of course biggest 0:17:41.000 --> 0:17:43.960 holder of Tencent as a stockholder, but have so many 0:17:44.000 --> 0:17:46.720 investments said across the emerging market. So really a conversation 0:17:46.760 --> 0:17:49.840 about how in Africa, South Africa, how also in Poland 0:17:49.840 --> 0:17:52.040 they're adopting general to AI. In fact they say, look 0:17:52.080 --> 0:17:55.080 they're cutting costs by some thirty percent thanks to the implementation. 0:17:56.119 --> 0:17:59.360 YEP also exposure in not just ten Cent but other 0:17:59.440 --> 0:18:02.280 parts in year Southeast Asia. And he's a CEO to 0:18:02.320 --> 0:18:06.320 watch why moonshot package worth tracking his progress. 0:18:06.600 --> 0:18:07.240 Another story that. 0:18:07.240 --> 0:18:10.199 We're watching here on Bloomberg Technology, Chipotle rolling out an 0:18:10.280 --> 0:18:15.920 artificial intelligence assistant aimed at improving efficiency. It's called Avocado 0:18:16.560 --> 0:18:20.040 and will cover many administrative tasks in the recruiting process. 0:18:20.359 --> 0:18:22.000 The chain hopes will cut the time it takes to 0:18:22.119 --> 0:18:25.159 hire workers by as much as seventy five percent. It 0:18:25.160 --> 0:18:28.880 will be powered by conversational AI from tech firm Paradox. 0:18:37.040 --> 0:18:41.080 Meta is fighting back against fake celebrity scams, deploying facial 0:18:41.119 --> 0:18:45.600 recognition technology to weed out the imposters bloombers Kirkwagner joins 0:18:45.680 --> 0:18:47.600 us with the details, and I guess what is the 0:18:47.640 --> 0:18:50.600 kind of malicious activity that Meta is trying to counter 0:18:50.680 --> 0:18:52.960 here in terms of celebrity image. 0:18:53.840 --> 0:18:57.919 Yeah, so sometimes scammers will run that links to like 0:18:57.960 --> 0:19:00.520 a scammy website right where they'll try to steal your data, 0:19:00.560 --> 0:19:02.719 they'll try to get you to, you know, send money, 0:19:03.200 --> 0:19:05.720 and they will use as part of the ad pictures 0:19:05.760 --> 0:19:08.120 of real celebrities to try and make it seem more 0:19:08.200 --> 0:19:09.560 authentic or more legitimate. 0:19:09.640 --> 0:19:09.720 Right. 0:19:09.880 --> 0:19:12.639 Oftentimes people will see an image of a celebrity and 0:19:12.680 --> 0:19:14.879 therefore think, oh, it's an endorsement by them, or it's 0:19:14.880 --> 0:19:17.280 someone they're familiar with, and they're more likely to click. 0:19:17.600 --> 0:19:19.879 And so in this case, Meta saying, hey, we notice 0:19:19.920 --> 0:19:22.359 these ads are happening. We know these scams are happening, 0:19:22.680 --> 0:19:25.919 and so they're now going to use facial recognition software 0:19:26.000 --> 0:19:28.439 to try and match is there a celebrity in this 0:19:28.560 --> 0:19:31.479 ad doesn't match up with the celebrity on the service, 0:19:31.480 --> 0:19:33.800 and if Stowe, you know, maybe that's a scam. We 0:19:33.840 --> 0:19:35.160 should try to take that ad down. 0:19:36.480 --> 0:19:38.560 And then for anyone who's ever been locked out of 0:19:38.600 --> 0:19:41.840 their accounts many of us have, you're no longer going 0:19:41.880 --> 0:19:44.160 to have to suddenly get your passport ready. They might 0:19:44.240 --> 0:19:46.440 use the technology for that as well. 0:19:46.560 --> 0:19:48.679 That's right, So they're going to start testing this idea 0:19:48.720 --> 0:19:51.520 of sending in a video sell fie right, So it's 0:19:51.520 --> 0:19:53.399 pretty much exactly what it sounds like. You hold up 0:19:53.440 --> 0:19:56.760 your phone, take a short video of your face, send 0:19:56.840 --> 0:20:00.359 it into Meta. They will then match that video two 0:20:00.359 --> 0:20:03.720 photos associated with the account. If there's a match, they'll say, okay, 0:20:03.720 --> 0:20:05.960 this is indeed you know Kurt's account. 0:20:06.080 --> 0:20:07.080 And you can get back in. 0:20:07.119 --> 0:20:09.320 They said the whole thing could take about a minute, 0:20:09.359 --> 0:20:12.320 and they'll delete the video and any data associated with 0:20:12.359 --> 0:20:15.359 it immediately after. This is something that they're trying to 0:20:15.400 --> 0:20:18.200 do to expedite this process because as you mentioned, Caroline, 0:20:18.240 --> 0:20:20.359 right now, they have other ways to verify identity, but 0:20:20.400 --> 0:20:22.120 it's a lot more cumbersome. You might have to send 0:20:22.119 --> 0:20:24.480 in a picture of your ID or a passport or 0:20:24.520 --> 0:20:26.600 something like that. And so they're thinking that this could 0:20:26.640 --> 0:20:29.679 be a faster way of getting people back into their 0:20:29.680 --> 0:20:31.840 accounts automatically if they do get locked out. 0:20:32.760 --> 0:20:36.359 Kurt, why does Meta do this? What's the motivation for them? 0:20:37.119 --> 0:20:39.959 Well, I think think of the scale that met operates on, right, 0:20:40.000 --> 0:20:45.680 there's almost, I believe three point three billion users across Instagram, Facebook, WhatsApp, 0:20:45.680 --> 0:20:48.399 all of their different services, and so people are getting 0:20:48.400 --> 0:20:50.919 locked out every single day. They can't keep up with 0:20:50.960 --> 0:20:54.560 this from a human standpoint, right, they need to automate 0:20:54.600 --> 0:20:56.400 these things, and I think as AI has gotten better 0:20:56.440 --> 0:20:58.840 as their technology has gotten better, they're seen, hey, here's 0:20:58.880 --> 0:21:01.080 a way to do this much quicker. Presumably in the 0:21:01.119 --> 0:21:03.400 future you've been much cheaper, you don't need humans involved, 0:21:04.119 --> 0:21:05.639 and so, you know, I think it's just part of 0:21:05.640 --> 0:21:08.560 their overall push toward AI and these advancements and technology 0:21:08.560 --> 0:21:09.520 to help people out. 0:21:10.600 --> 0:21:11.719 In just thirty seconds. 0:21:11.720 --> 0:21:15.160 Though, Kat, there is a complex relationship with facial recognition 0:21:15.200 --> 0:21:16.040 technology and META. 0:21:16.080 --> 0:21:19.119 In the past well, MET has been sued several times 0:21:19.160 --> 0:21:22.200