April 11, 2024 • 41 mins
Bloomberg's Ed Ludlow and Caroline Hyde break down Amazon CEO Andy Jassy's annual letter to shareholders. Plus, Jeff Bezos and Tim Cook attend the White House state dinner for Japan's Prime Minister. And, OpenAI CEO Sam Altman looks to build a global coalition on artificial intelligence as he visits the United Arab Emirates.
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Speaker 1 (00:01):
From Marhart where Innovation, Money and Power Collie in Silicon
Vallet NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed loud Love.
Speaker 3 (00:24):
And Caroline Heide Bloomberg's world headquarters in New York and
AURM Ed Lodlow in San Francisco. This is Bloomberg Technology
coming up.
Speaker 4 (00:31):
Amazon CEO Annie Jase He says that general to AI
boom is going to be.
Speaker 5 (00:35):
Built on Amazon Web Services.
Speaker 4 (00:38):
Or we need the takeaways from his annual letters.
Speaker 3 (00:39):
To shareholders class technology heavyweights to send on Washington for
the White House steak dinner with big names like Jeff
Bezos and Tim Kirk attending a lavish event and.
Speaker 4 (00:50):
Open AI CEO Sam Altman pictures a global AI coalition
on his visit to the Middle East.
Speaker 5 (00:56):
Next stop.
Speaker 4 (00:56):
Maybe we see him over on Capitol Hill too. We'll
discuss that and so much more throughout this hour. But Ed,
we start on these markets up a quarter of a
percentage point currently NASDAK managing.
Speaker 5 (01:07):
To put itself off of its lows.
Speaker 4 (01:09):
This is we once again really tackle inflationary pressures. Whether
it's a PPI number coming after the CPI print yesterday,
both showing inflationary pressures just start dialing up that little bit.
And we're seeing though, managing the NASDAK to outperform as bomb.
Speaker 5 (01:21):
Markets actually pull back a little bit. I'm looking at
the two year yield.
Speaker 4 (01:24):
We're outperforming on the front end of the curve, whereas
the back end, the tenure yield, for example, you'll still
pushing higher. But really the big move was yesterday, and
looking at what's happening in the euro it's not just
all about the Federal Reserve. It's about global world banks
at the moment, central.
Speaker 5 (01:37):
Banks that is.
Speaker 4 (01:38):
And we're looking at what the ECB said, look staying
pat as many had anticipated in terms of interest rates,
but signaling that inflationary pressures are dialing down across the Atlantic,
and therefore could we see cuts coming or off by
three tens percent versus the US dollar.
Speaker 5 (01:50):
Moving on, look at what else is performing versus the
US dollar. Crypto I'm down.
Speaker 4 (01:54):
By two tens percent on bitcoin at the moment, just
sub that seventy thousand dollars level.
Speaker 5 (01:57):
But what are you watching on the micro.
Speaker 3 (01:59):
There are a lot of stories to fit in today.
Apple's a name that we're going to look at later
in the program with Bloomberg's Mark German rough eight tens
one percent. Early unionization efforts are kind of the main headline.
But there is a note from JP Morgan analysts that
say that hedge funds are now looking at this stock
and considering what happens next with artificial intelligence in the
context of value add iOS and the handset. Hard to
(02:23):
know what the driver is, if any at all, but
we hire eight tens to one percent, and given its
market capitalization, we always pay attention to Apple because if
its waiting on major indices. There is an annual shareholder
letter plus AI theme in today's show. I am very
excited about it. JP Morgan is down nine tens to
one percent Monday night. I know I wasn't here earlier
(02:43):
in the week. Put the shareholder letter out and says AI,
and we're going to talk about the numbers behind that.
I think it's really interesting, so to Amazon up three
tens to one percent Andy Jasse's annual letter. The focus
about AI is interesting specific aws. Amazon is going to
be a facilitator, a place where AI is built by others,
(03:06):
maybe not building so much generator of AI themselves. That's
the story you and I have told quite a lot
in recent weeks and months.
Speaker 5 (03:13):
We are long shareholder letters.
Speaker 4 (03:15):
Let's dig in with punam Call and BLUEBG Intelligence and
Ed just puts it so eloquently there. Ultimately, they want
to be at the very heart the infrastructure of generative AI. Yes,
they will build a substantial number of GENAI applications ourselves,
but they're looking to others to build.
Speaker 6 (03:31):
Yes, you're absolutely right.
Speaker 7 (03:32):
You know, right now Amazon lags Microsoft when it comes
to AI because Microsoft has access to the open AI. However,
as they build these building blocks going forward, they can
close that gap over time. So we think the investment
is right. We think the time is right, and generator
of AI will not only help fueld the AWS business,
but also it's e commerce marketplace business where it will
(03:54):
help drive sales higher.
Speaker 3 (03:57):
Pun and what we're talking about specifically is I think
and you can go to Bedrock if you're a very
large enterprise player or a smaller startup and build your
own large language model, you can take advantage of a
third party large language model. Caroline and I have spoken
to Anthropic, for example Daniella m O'Day, and she talks
(04:18):
about all the.
Speaker 6 (04:18):
Business they're winning through AWS.
Speaker 3 (04:20):
Bedrock What I don't know is Amazon's cloud business AWS
actually gaining new customers, gaining growth or market share because
of their strategy with Bedrock.
Speaker 7 (04:33):
Yeah, I think you know, over time they will gain
new customers. It's just a matter of getting these large
language models developed and them getting the customers interested. But
we do think their scope for Amazon to continue to
gain in that vertical.
Speaker 4 (04:48):
What's interesting is well Google's event earlier this week, Cloud Event,
and they were really saying that it's startups that are
coming to them for cloud. How much, ultimately do companies.
Speaker 5 (04:59):
Diversify, not go all in with one player.
Speaker 7 (05:02):
I think diversification will happen across the board. It depends
on what you're using and where you want to be.
Amazon has done a great job in attracting not just
the startups but also established businesses, So.
Speaker 5 (05:14):
We think the scope is wide.
Speaker 7 (05:16):
We do think they're in the early innings of this,
and we do think right now they lag, but that
doesn't mean that they'll lag for a long time.
Speaker 6 (05:24):
Let's talk about Andy Jesse.
Speaker 3 (05:26):
He comes from AWS, that was his world, but the
story since he's taken the helm of Amazon has been
about cost discipline. In fact, don't even call it discipline pooa,
let's call it what it is, cutting cost lowering CAPEX.
And when I read the letter, he seems committed to that.
Speaker 6 (05:44):
Still, yes, he does.
Speaker 7 (05:46):
In fact, you know, they've been highlighting since last quarter
about the forty five cent reduction that they've had per
unit in their cost basis, and they think they can
press the pedal harder on that this year, largely as
they base GLEE streamline their inbound fulfillment, and they parse
out packages more efficiently to those regional distribution centers that
(06:07):
allow for SIND delivery.
Speaker 3 (06:11):
Clunamgyle of Bloomberg Intelligence one of our analysts that leaves
coverage of this stock, and we're really grateful to have
you in reaction. Meanwhile, Amazon founder Jeff Bezos joined tech
heavyweights last night at the White House state dinner hosted
by President Biden for Japan's Prime Minister Fumiyo Kashida. Attendees
included Bezos's fiance Lawrence Sanchez, Apple CEO Tim Cook and
(06:36):
executive Lisa Jackson. Microsoft president Brad Smith was Intendants as
a well, and actor Robert de Niro. Even vent capitalists
including Robert Stavius of Bessemer Venture Partners. You also had
Jamie Diamond, Massa Sun and John Gray of Blackstone and Caro.
For me, the story is pretty clear here. Japan important
(06:56):
for technology and the economy and more.
Speaker 4 (07:00):
Broadly for big get togethers of some important players, no
matter where they tend to be based. I mean, this
is where certain conversations had, deals are done. How many
are having intimate conversations with the Prime Minister of Japan.
But more broadly, I liked his Star Trek reference as well.
If you heard some of the commentary coming out of
the Leader of Japan, he was sort of going to
go boldly where no one has been before in terms
(07:22):
of deepening the US Japanese relationship.
Speaker 5 (07:24):
But this is more broad, isn't as well?
Speaker 4 (07:26):
I mean, there's a delightful menu that they managed to
be having triage Raby state not bad. But this is
also about deepening ties. But not just from an economic perspective.
We've got to think of this from a geopolitical perspective,
and notably what's happening with the Philippines coming in at
the moment, and indeed what this means for China US relations.
Speaker 3 (07:42):
Yeah, I go straight to China when the CEOs turn up.
You know that that market is important, right, whether it's
for supply chain or the economy direct.
Speaker 6 (07:50):
So let's bring up menu back up.
Speaker 3 (07:51):
That is contemporary modern American Japanese fusion.
Speaker 6 (07:56):
That looks great.
Speaker 3 (07:57):
But there's also a political element to this as well,
that Biden had a lot of big names in the
White House in an election year.
Speaker 4 (08:04):
Character Yeah, I think that is really notable and ultimately
trying to ensure that the economy is what Biden can
hang his hat on as well. Many worrying about the
inflationary pressures that were garnered yesterday and they did what
this really means for Biden Bidenomics and the lack thereof
but tech heavyweight really clear and present when it comes
to relationships with US and Japan.
Speaker 5 (08:31):
JP Morgan.
Speaker 4 (08:32):
It kicks off earning season Banks they are at the
start of them hammers tomorrow and earlier this week. Just
remember we heard from the CEO Jamie Diamond in his
annual letter to shareholders where he focused mainly on artificial
intelligence joining us now to discuss how banksy utilizing the
technology investing in it.
Speaker 5 (08:48):
Evidence CEO Alexandra was a Visita is with us.
Speaker 4 (08:50):
Evidence is an intelligent platform that really benchmarks attracts AI
adoption across financial services sector.
Speaker 5 (08:56):
And JP Morgan is the standout performer.
Speaker 4 (08:58):
Alexandra, you think that's in some way akin to the
performance of the bank.
Speaker 8 (09:01):
Can it stop more broadly, Yeah, well, thank you so
much for having me on Caroline and ED. But its
performance is incredibly strong in terms of its AI maturity,
its head and shoulders above other banks. It was early
to the game. Jamie Diamond made AI a focus for
the banks six years ago, where he made clear that
(09:23):
it was going to be an AI first organization and
from that followed a lot of initiatives like establishing a
research lab, you know, doubling down on hiring AI talent,
reorganizing the EXAC team, and that really has paid off
and you see, well, according to our measurements, you can
see that they sort of really stand out against other
banks and are incredibly strong on AI capabilities.
Speaker 3 (09:47):
We've been looking at the data behind JP Morgan's AI hiring.
You just made a really interesting point, which is six
years ago this all started.
Speaker 6 (09:56):
Let's show the chart.
Speaker 3 (09:57):
There's the AI hype of twenty two, twenty twenty three,
but if you track the.
Speaker 6 (10:04):
Hiring and what's so interesting.
Speaker 3 (10:05):
The title of that chart is JP Morgan slows AI hiring.
But look how elevated it was in twenty twenty two
and it started back in twenty twenty. What do you
make of that about how ahead of the curve or not?
So to speak, JP Morgan.
Speaker 8 (10:20):
Is Yeah, I mean, I mean, first of all, it's
a really important point that you make it in terms
of the hype in twenty two and twenty three of
AI and sort of what we're heading into is more
of a let's sort of see what gets through production.
Speaker 2 (10:35):
It's much harder.
Speaker 8 (10:36):
Than we think, and sort of the use cases going
from ideation to production just takes a little longer, and
some of that slow down and hiring is also a
little bit of a let's what talent do we actually need?
But when you look at that chart, you can see
that really being on a hiring tear from for the
last sort of six seven years. And you know, the
(10:59):
proportion of AI talent and the caliber of AI talent
in the bank is second to none. So right now
a lot of the banks are looking at like where
you know, the onset of using you know, genitive AI,
Where are we using it in the bank? Which which
platforms are we going to use, whether it's open AI
or Mistral or hugging face, which one of those, How
(11:20):
does it fit into our particular needs and how do
we refine it so so it gives us the best
output possible. So there is a bit of a let's
see what we can use internally of our AI talent
that can you know, can help us, you know, refine
that and before we sort of accelerate again, uh, and
think about what we hire externally. But it should should
(11:41):
also be noted that when you sort of look across
the banking sector, even the banks that have cut employees
have sort of tried to keep the AI talent sort
of relatively steady, if not increasing.
Speaker 4 (11:53):
Talking of talent, of course, within that shareholder letter was
the demonstration and their commitment to elevating almost exs level
the discussion around AI, and they mention the importance in
creating that new position Chief Data and Analytics Officer that
sits in the operating committee. That person over at JP
Morgan is indeed Teresa heightens Ritter, who I was lucky
enough to speak to at an evident event, and it's
(12:16):
notable that she has been galvanizing the focus on sort
of from top down ensuring that all talent are online
with where AI can really bring about a change in productivity,
Where are they seeing it and drive down in costs?
Speaker 5 (12:29):
Where are they passing this on to the user of
JP Morgan.
Speaker 8 (12:32):
Yeah, when it comes to well, first of all, when
it comes to driving the use of AI and where
you sort of look at the letter as really talking
about gaining efficiencies and really making the banks sort of
strong and lean and robust forwithstanding sort of any macro
challenges on you know, in the future, So looking at
(12:54):
driving down the costs and bringing up efficiency and bringing
up productivity, and AI being used to also see where
you can elevate revenues.
Speaker 5 (13:04):
Is it's whereas that it's sort of.
Speaker 8 (13:07):
In every newk and cranny of the bank looking at
sort of the ways that it can create that return
on investment. And then you know, with the AI tools
that then gets passed on to the customer and you
know in better customer management, you know experiences if time and.
Speaker 3 (13:27):
To Alexandra, do you think Jamie Diamond has a good
understanding of artificial intelligence?
Speaker 6 (13:32):
He himself, he is.
Speaker 8 (13:34):
Nick He saw it very early. He knew it was
going to be very impactful. He was one of the
first CEOs bank CEOs to go out and and say
we are changing. We are going to be an AI
company or an AI first company, where many banks would
be we're going to be great banks and using AI
to become a little bit better bank. He was a
(13:54):
visionary with that. I think he has a good understanding.
Speaker 3 (13:57):
Yes, he's more upbeat about it than he is about Bitcoin.
Alex and Mussa Visita. It's great to have you, of evident.
Of course, now EU's top tech regulator, Margareta ves Thea
says AI could be as disruptive as the atomic bomb.
The Executive Vice President of the European Commission joined Bloomberg
earlier today to talk about the current state of AI.
Speaker 9 (14:17):
It's top of mind for us to make sure that
the market stays competitive. When everything gets fueled by artificial intelligence,
it's going to change the marketplace.
Speaker 10 (14:28):
Do you have a timeline at all, Commissioner, when we
could potentially see.
Speaker 11 (14:31):
Some movement on this.
Speaker 6 (14:32):
No, we don't have a fixed timeline.
Speaker 9 (14:34):
Of course, we want to produce results as fast as possible,
also for the involved companies for their benefit. We'll be
getting there soon, I think.
Speaker 12 (14:43):
So we're talking about Microsoft and open Ai, but of
course they're not the only players. To hear, you have
Amazon actually with a big almost three billion dollar investment
into Anthropic, which of course competes with OpenAI.
Speaker 11 (14:57):
What do you make of that?
Speaker 12 (14:58):
Is that something that you're looking at as well?
Speaker 9 (15:00):
Well? We will be having, you know, a vigilant, keen
attention to what is happening in this field. We see
a lot of entrenched market power when it comes to technology,
and it's really important that now when we have technology
which is not just a new technology, it's it's basically
a new world that we're looking into, that we make
(15:22):
sure that it's a competitive new world.
Speaker 10 (15:26):
You just recently under the DMA went after three big
US tech companies, and to be honest, Commissioner, three is
a crowd. I'm really curious to know which of these
you are honing in on. And because a lot of
people really seem to think it's Apple, where the EU
has a lot of problems with.
Speaker 9 (15:41):
Well, what's the point of the Digital Markets Act is
to open the market to make sure that that more
businesses can can get to their customers so customers have
more choice. So obviously we are looking at getting out
of self preferencing so that you do not if your
for instance, have a Google search and you do not
just get a Google products. And we're looking at how
(16:03):
businesses can get a real relationship with their customers. So
to get rid of the ends is staring that we
see quite a lot and people have choice is they
want to stay in the Apple payment environment or they
want to have a direct and sometimes cheaper relationship with
their service provider.
Speaker 12 (16:20):
Well among those three Apple, Google and Meta, do you
have a priority target?
Speaker 9 (16:24):
Well, we have opened these five cases because we think
these are very important.
Speaker 11 (16:29):
We may have more cases in the.
Speaker 9 (16:30):
Pipeline, so we have given retaining orders for what may
be evidence once we're moving forward. These five cases, they
are all priority. We think that they are absolutely key
if our suspicions are confirmed that we get compliance because
this is this is what opens the market, and that's
(16:50):
the basic idea. Are the Digital Markets Act for many
more businesses to have a fair chance to get to
their customers.
Speaker 6 (17:06):
Okay, time for talking tech and first up.
Speaker 3 (17:08):
KKR is said to be reviewing options of a sale
or an IPO for BMC software, which could be worth
as much as fifteen billion dollars including debt. That's according
to sources. While no final decisions have been made, KKR
is favoring an IPO of BMC, which filed confidentially last
year with the SEC for a listing. Plus French chip
(17:30):
materials company Seutech is said to be considering building a
factory in the United States, following in the footsteps of
one of its biggest customers, TSMC, as it expands from
Arizona to Texas. With government incentives, The consideration would mean
that Stech would add to its global factory facilities alongside Singapore, Belgium,
and France, and positions the company for growth outside of
(17:53):
China and Saudi Arabia and the UAE are racing for
AI dominance, rushing to build out expensive data center infrastructure
to help support the technology. Both countries lag behind Western
Europe in terms of data center capacity, with hopes of
closing that gap in.
Speaker 11 (18:09):
A few years.
Speaker 3 (18:10):
In a recent report by PwC, it estimated that AI
will contribute nearly ninety six billion dollars to the UAE
and one hundred and thirty five billion to Saudi Arabia's
economy by twenty thirty.
Speaker 5 (18:23):
Caroline That was a great business sweep piece.
Speaker 4 (18:25):
Meanwhile, let's just talk about employees over in an Apple
store in Shorthills, New Jersey, just petitioned to unionize. It's
marking the first lutch effort that we've seen it in
about a year long lull of news around this. Bloomberg's
Mark German just going to remind us of the context
when it comes to Apple, because they're not the first
store that's looking to unionize.
Speaker 13 (18:42):
Yeah, no, that's a great point.
Speaker 14 (18:44):
The Apple unionization efforts really kicked into high gear right
in the.
Speaker 13 (18:48):
Middle of the COVID pandemic. In twenty twenty two.
Speaker 14 (18:51):
You saw their retail store in the Towson area of
Maryland petition to unionize.
Speaker 13 (18:56):
They successfully unionized.
Speaker 14 (18:58):
Are now recognize is a unionized Apple retail store. The
Penn Station store and a mall in Oklahoma City, Oklahoma
is a unionized store. So those two are the only
two unionized stores. But there have been a few other
stores that attempted, one in Saint Louis, Missouri, one in Atlanta, Georgia.
Speaker 13 (19:16):
Those fell apart.
Speaker 14 (19:17):
One of those unions even chastised the union company and
ended up siding with Apple. Now you have another store
joining in and that is the Short Hills mall store
and upscale area in New Jersey. And at this point
it's still early. They've petitioned, they have one hundred and
four employees that would be part of the union. There
still needs to be a vote. They still need to
get to the bargaining table with Apple.
Speaker 13 (19:39):
But this is the process.
Speaker 14 (19:40):
And so this was a major development petitioning publicly stating hey,
we are trying to unionize.
Speaker 13 (19:46):
So this is a big deal. The fifth store that
we know of to attempt.
Speaker 3 (19:50):
They are trying to unionize. This is a path trodden
by Amazon. You know, Caroline and I've kind of been
through a similar story arc with that company.
Speaker 6 (19:57):
But I guess the next question.
Speaker 3 (19:59):
At all smart, what is Apple's attitude towards unionization the
company's approach.
Speaker 14 (20:05):
Well, the company is completely against unionization. They've been holding
roundtables at the Short Hills, New Jersey store for months
now pushing back on the idea of that team unionizing.
They don't want to have to change their perks, their benefits,
their pay strategy. You know, Apple is a company that
wants things to be consistent and completely under their control.
Speaker 13 (20:26):
Unionization upsets that.
Speaker 14 (20:27):
Finely tuned balance the company has enjoyed for as long
as it has under Tim Cook and Steve Jobs before him,
So certainly this is not something that Apple wants. I
think they're fairly happy that out of the two hundred
and seventy and change retail stores in the US, only
two have successfully unionized, and of those two, they haven't
given them anything.
Speaker 6 (20:47):
Blamebak's chief correspondent Motgum and thank you.
Speaker 3 (20:58):
Welcome back to blame Bags ten Lovelow here in San
Francisco and Caroline Heid and New York.
Speaker 4 (21:03):
I've got to check on the markets for you, Ed,
because right now, no, we're actually seeing NAZAC and tech
stocks outperform on a day where bon yields are still
selling off on the end of the curve, so ten
yure yields are seeing four basis points to the higher.
Speaker 5 (21:14):
We are still trying to.
Speaker 4 (21:14):
Debate the inflatory pressures we have PPI today, CPI yesterday,
still showing inflation is kind of going the wrong direction
for the Federal Reserve. If banking on a cup come June,
people starting to take those bets off the table. We're
seeing Bitcoin under pressure just by two tens percent, where
of sixty nine thousand s.
Speaker 5 (21:29):
It's around sixty five.
Speaker 4 (21:30):
We're basically kind of treading water ahead of earning season
as well, the banks kicking off tomorrow. Moving on to
some individual movers, I mean interesting on the upside, A
lot of the key names are used to Nvidia, Apple, indeed,
even Amazon and a new record high today after its
shareholder letter.
Speaker 5 (21:43):
I want to shine on an Atlassian.
Speaker 4 (21:45):
It's getting an upgrade from analysts thinking that now is
the time to be buying into this enterprise focus software company.
Speaker 5 (21:50):
So up more than three percent. Tesla though once again languishing,
pulling back.
Speaker 4 (21:54):
In fact, you noted that Rivian shares performing as much
as seven percent to a record lows. Some reports that
Ford is cutting its evil prices. Elon Musk apparently looking
at India. Maybe we'll get some updates on supply and
in team demand coming from that country. Adobe, though, want
to watch interesting reporting coming out on basically how expensive
it is sometimes to be training your large language models
(22:14):
and text to video in particular, and where you're getting
some of those videos from.
Speaker 5 (22:19):
We want to dig in on Nado.
Speaker 4 (22:20):
We've just done a pressure by about percentage point today,
but looking like it is really trying to take on
the likes of Saura. Of course open aiyes product when
it comes to AI video generation, apparently offering it's network
of photographers and artists get this one hundred and twenty
dollars to submit videos of people engaged in everyday actions, walking,
expressing emotions, joy, anger, according to documents all seen by Bloomberg.
(22:41):
Let's just get more of our own reporter Brady Ford,
who helped break this story. And it is notable that
they're playing a bit of catch up here with text
to video. But where they don't have to play so
much catch up is where they train their data.
Speaker 5 (22:53):
You'd have thought, but maybe they have to pay a
bit extra.
Speaker 11 (22:55):
Yeah, it's a funny dynamic.
Speaker 15 (22:57):
So they have this giant repository of they've been using
to train their photos. They got like three hundred million photos,
not as big of a deal when it comes to
the video. They don't have quite as much of that
in the stock libraries. So we see now that they're
starting to procure data to be able to train on.
And it's really funny kind of videos, right. It's like
some of the sample videos is people smiling, people frowning,
(23:19):
picking up weights, right, training these AI models on how
people really interact with the world.
Speaker 5 (23:24):
I like them thing we're all really fit.
Speaker 15 (23:26):
Yes, they think we're all very fit, or they don't
even have any videos of us doing it so they
know we're not right. But yeah, so they really need
these videos to help their model understand how the world
works and so that they can, you know, not get
smoked by open AI.
Speaker 3 (23:39):
Mate two dollars sixty two cents per minute or as
high as seven dollars five cents per minute, based on
your reporting good reporting. If you're the CFO or COO
of Adobe, and that's before you facturing compute costs, you're
not going to be thrilled about the cost of training
(24:00):
a model like the Economic Sphere are actually newsworthy.
Speaker 6 (24:04):
This is a surprise.
Speaker 15 (24:05):
So it's not quite as high as it may sound like, right,
because it's one hundred and twenty dollars for one hundred
short videos.
Speaker 9 (24:13):
Right.
Speaker 11 (24:13):
I was trying to do the math of if I wanted.
Speaker 15 (24:15):
To create this, it's going to take you a good
five six hours to make all these videos doing push ups,
then cooking and smiling and frowning. I mean, the actual
amount they're paying ends up being pretty low. And you
could say that all. I mean, they could scrape the
open Internet for free, but we know that there are
issues there with tagging the videos correctly getting the exact
(24:36):
quality you need. So I mean these are things they
might need to procure once, but they can continue to
train on. So, Yes, it is a material amount of
money in the grand scheme. It's not like they're selling
out a ton to every creator though.
Speaker 4 (24:51):
I mean all of this comes within the context of
Sora and where it got data, right, yeah.
Speaker 13 (24:57):
Right.
Speaker 15 (24:57):
We also have that viral clip of the open Aic saying, oh,
we don't know where it was trained, but right, we
all kind of know where it was trained, right, And
I mean that's been Adoby's whole marketing pitch that we're
going to try to do things the right way.
Speaker 11 (25:10):
We're going to only use sources that we have true
access to.
Speaker 5 (25:13):
You're not going to get done in the courts. Basically,
you're going to get sued.
Speaker 13 (25:16):
You're not.
Speaker 15 (25:16):
They literally say, yeah, if you get sued, we're going
to be there with you.
Speaker 11 (25:20):
We'll see you in court, we'll back you up.
Speaker 15 (25:22):
Will that end up holding them back? Will that end
up casting more than it needs to? It is yet
to be seen. But that's at least their public message
at this time.
Speaker 3 (25:32):
Bloomberg's Brady Ford, I think you're always on top of
it when it comes to Adobe, Thank you now. Open
AI CEO Sam Outman has been working to build a
global coalition among government and industry leaders to support boosting
the supply of chips, energy and data center capacity that's
needed to develop artificial intelligence technology. That's according to our
(25:54):
sources and Bloomberg Shreen Gafari broke that story with me
and joined me on set. This is kind of an
evolution of our existing reporting, right. It started with this
idea that Sam Outman was worried about the supply long
term of AI accelerators or the GPUs, the train models,
and later inference it's bigger.
Speaker 6 (26:13):
Now, just recap for audience what.
Speaker 16 (26:15):
You and I have learned, right, So we know now
that Sam Maltman has been in the UAE this week
meeting with government officials, with investors, and the pitch is
to build some kind of global coalition that goes beyond
just manufacturing chips, but actually into also things like energy production,
which is a huge and growing resource for them that
(26:37):
they're quite worried about securing.
Speaker 3 (26:39):
What's interesting here is the players. You know, we have
some understanding that Sam met with UAE officials. G forty
two is a name that gets bandied round, But do
we know who's in this coalition so far?
Speaker 5 (26:53):
So we know the pitch is that it's worldwide.
Speaker 16 (26:56):
Sam is traveling to Washington, DC today right to meet
with people on Capitol Hill, national security leaders, so we
know that, you know, he's talking to US leaders as well,
but we also know that he's talking to He has
in the past talking to leaders of several Western countries
and democracies, and so the pitch goes beyond just the
(27:18):
Middle East.
Speaker 4 (27:18):
For sure, it's going to resonate with law makers. It's
got to resonate with the supply chain more sure. And
we're seeing a lot of money being spent by the
US government trying a law offshore chip makers manufacturers fabs
ultimately coming from TSMC.
Speaker 5 (27:34):
There's much reporting on whether Samsung is going to.
Speaker 6 (27:36):
Be here as well.
Speaker 4 (27:37):
Digging in deeper, how much is he talking to Corporate
America and corporations more broadly as well?
Speaker 16 (27:43):
Just because this doesn't happen even night right, I mean,
I think this conversation is going to go beyond open
an eye to other industries. I don't think you know,
you don't want the pitch to sort of just focus
on one company, but rather on building out the capabilities
for industry as a whole. So that's what I'm under
seeing the discussion to be at these times.
Speaker 4 (28:04):
It's a brilliant reporting from both you and ED and
we'll see what that conversation ends up looking like on
Capitol Hill as well.
Speaker 5 (28:10):
I'm sure you're reporting on that too, Sharon Guffrey. We
thank you so much.
Speaker 4 (28:13):
I meanwhile, coming up, pitch Book out with its latest
report into the health of the VC industry.
Speaker 5 (28:17):
May readging into the pitch Book analyst Kyle Stamford that's next.
Speaker 4 (28:21):
This is Blue made Technology. Let's just talk about private
(28:44):
markets a little bit. Fundraising they're in beginning of twenty
twenty four met with some actual residual optimism, but that
did not translate into meaningful growth in VC activity. That's
all according to Pitchbook's latest Venture Monitor report, and it
highlights the competition for capital remains a fierce two years
into a slowdown, and while stronger companies might still be
able to compel investment, the same is.
Speaker 5 (29:04):
Not true for those that are kind of struggling.
Speaker 4 (29:06):
Carl Stamford with please to say, leads US Venture capital
research over at Pitchbook and joins us. And so it
really feels like a tailor that haves and the have not.
If you're an AI dialing, you're able to reap it in.
If you're not, and you're not managing to grow revenue
and indeed profitability and count yourself out.
Speaker 1 (29:22):
Yeah, but I mean at some point that's where this
market should be, right, I mean, we're looking at high
risk investments, companies that should be growing fast, being able
to get their their product and market and eventually exit
down the line.
Speaker 2 (29:36):
Fifty five thousand companies.
Speaker 1 (29:37):
Are currently VC backed in the US market, you know,
one hundred and twenty thousand or so globally. That's a
huge number of companies that still are fighting through similar trajectory,
similar sectors, and fighting for that capital that's just not
there anymore.
Speaker 6 (29:51):
Okay.
Speaker 3 (29:52):
I am hearing and seeing things that the data doesn't show.
For example, twenty four hours ago, we had Toyota Ventures
on the show. They are a single LP fund granted Toyota,
but they raised even more money from that LP to
invest in physical stuff I'm hearing lots about funds that
are being raised to invest in manufacturing industrialization. Why is
(30:16):
that not showing up in the data?
Speaker 1 (30:18):
Kyle Right, Well, I think first if you start with
Toyota Adventures or these corporate LPs, they have a much
different return profile or ability to get these different returns
than a attraditional VC autritional LP might be looking for. Right,
there's a return on products or ability to integrate new
products into their cars down the road. As the attritional LP, though,
(30:40):
they're looking for that cash on cash return, and we
have not seen that by any means. I mean, all
the last quarter, the entire story was about Reddit and Esterilabs,
which were solid IPOs, but in total in the US
it was just eighteen point six billion dollars in exit
value that was generated. And so if you're an LP
without those returns and those distributions is coming back to you,
(31:01):
there's less incentive to put money back into the market now,
or there's not an ability.
Speaker 16 (31:06):
Right.
Speaker 1 (31:06):
They're looking for that capital would come back to recycle
into new funds and new commitments and make sure that
they're in all these vintage years. But if that's not
coming back, there's just no way for these traditional LPs
to get or to put money back into the venture
market right.
Speaker 4 (31:19):
Now, and you say traditional LPs, and it has been
fascinating to see almost the domination of corporate VC in
the area of AI, certainly compared to the venture capital
arena right now. Who are a new guard of LPs
that aren't corporate. Are we seeing bench capital companies managing
to lure in different types of investors to secure their
(31:41):
next funds?
Speaker 2 (31:42):
Do you think the investor of the LP bas is
going to always be wide ranging?
Speaker 9 (31:45):
Right?
Speaker 1 (31:45):
Pensions obviously are in that you sell CalPERS, read up
their commitment and increase their commitment to VC or the
last quarter.
Speaker 2 (31:53):
I mean, corporates obviously are huge.
Speaker 1 (31:55):
You look at the Japanese corporations and there's trillions of
dollars on their balance sheet they're able to put into
put to work in venture into new businicists. The large
megacaps in the US as well, huge amounts of cash
to be able to put it put to work, and
we've seen that in some of their AI invest some
of the past few years. I think where it really
gets down to struggling for LPs when you look at
(32:15):
the smaller ones, right the high net worth individuals that
maybe are feeling still very wealthy, but not nearly what
they were in twenty twenty one. You look at foundations
or endowments that are finding ways to put capital to work,
but maybe are not as able to take that ten
years of illiquidity that DC is going to bring to
(32:36):
to their cash. So there is still a broad range
in investors. Gps are being very strategic with who they're
going after and how they're positioning their strategy, and BC
fund to those LPs make sure it works for them
as well.
Speaker 3 (32:50):
Kyle, it's been relatively exciting recently, relatively in the IPO market.
You know Reddit as an example. Is there a relationship
between upstream downstream? So when LPs and the firms that
they give money to see activity in the IPO market,
so they regain faith that actually putting something into a
(33:12):
five or ten year horizon is a good idea.
Speaker 1 (33:15):
I mean, I think relative excitement is a really good
way to position Q one, right. I mean, those two
IPOs were great, but there's seven hundred and twenty unicorns
in the market right now or private in the US,
or fourteen hundred globally. Globally, there's a four point eight
trillion dollar market cap on these unicorns, and so a
couple IPOs is great, but until those distributions actually get
(33:36):
going back to LPs again, it's going to be a
slow fundraising market. It's going to be a slow deal
making market. We have our fun distribution data is showing
that distributions over the past four quarters have been as
low as they were in the global financial crisis. And
so again, there is definitely some positives that come out
(33:56):
of a few companies going to public, but there needs to.
Speaker 2 (33:59):
Be many more.
Speaker 1 (34:00):
And the M and A market again too, where a
lot of these returns are also going to get generated,
is non existing. Many of the deals we have from
an M and A perspective this quarter were had no
deal of value attached, right, so their immaterial to the
corporate growth. And so that's a very difficult spot when
you look at returns down the road.
Speaker 3 (34:18):
Hey, Carl, let's tap into your relative excitement. What are
you relatively excited about thematically? Subsector wise?
Speaker 1 (34:25):
Sure, subsector wise, I mean, obviously AI is going to
be the major area going forward. I think we've seen
a lot of unique companies and you need this models
getting started. I think It's interesting dynamic too, with the
incumbents and Microsoft and AI and Microsoft and Google and
Amazon being so heavy into it. I think it's going
to be very quick to what we're talking about, the
(34:46):
bifurcation and have and have nots. Then there's gonna be
a lot of money made in AI and there's a
lot of money loss, and I think it's be relatively
quick over the next few years because of the incumbents
and how they're playing in the market.
Speaker 2 (34:57):
You know, Tech in.
Speaker 1 (34:58):
General, I think is still really strong. Even though it's
a slow market. Like Karen said, strong companies are getting funded.
There's money out there for these companies, and so tech
is going to continue pushing forward in We like what
we've seen, but it's in me a difficult market, I
think for every sector down the road.
Speaker 3 (35:15):
Carl Stamford, lead US Bench Capital Research Analysts at Pitchburg,
Thank you very much.
Speaker 4 (35:26):
More protection for teens on Instagram is coming now. The
social platform, run of course by Meta, is turning to
AI to blur out nude images sent via direct message now.
Instagram announced in a blog post today that the update
aims to protect users from unwanted photos as well as
from potential sextortion scammers. This comes, of course, as US
politicians have been continuing to accuse a platform of damage
(35:49):
to youth mental health.
Speaker 6 (35:52):
Let's stay with Instagram.
Speaker 3 (35:53):
It's recently changed its policies for political content and it
has caused a stir from some users. The move, which
is coming during an election year, has prompted some pushback,
with some like Republican Senator Marsha Blackburn even accusing the
company of censorship. You're looking at the posts that she
made on x Let's break it all down with el Rochford,
(36:16):
senior data senior data and policy specialists with the Crime
and Justice Institute, as well as Jess Natali, creator of
the So Informed Instagram page. Jess, Let's start with you.
You are a user, a well followed user of Instagram.
The policy and its rationale are clear.
Speaker 6 (36:35):
What is your response to it?
Speaker 17 (36:36):
I mean, I think it's quite alarming and quite transparent,
the timing in which this is being rolled out, and
as small things like preparing people for the election, giving
them the educational tools all the way to a genocide
being documented on their platform. I think it's taking away
(36:58):
the authority through people to consume what they want to
be consuming, which is important information, it's news.
Speaker 4 (37:08):
I'm interested in the academic perspective here, l because your
PhD in sociology of the per dou you're focused on
reproductive justice, on racial justice movements in particular. And I'm
wondering if when ultimately Instagram is saying we are not
trying to clamp down on what you have actively decided
you want to watch those that you follow, but it's
more people that you don't follow sort of suddenly getting
(37:30):
into your.
Speaker 5 (37:31):
Reels, into your streams more poorly.
Speaker 4 (37:33):
How much do you think that this does limit, you know, ultimately,
people not wanting to be bombarded with things that they
do want to be seeing, or indeed, does it cut
off an ability to see outside your own bubble right now?
Speaker 18 (37:45):
Sure, I think that's a great question. Opting into seeing
political content is a little bit tricky because a lot
of users weren't aware of this future was being rolled
out at all, so they weren't aware that this rollout
would impact what they were seeing or not seeing.
Speaker 5 (38:05):
But it seems a bit odd the selection criteria.
Speaker 18 (38:08):
So social topics are being filtered out, but how is
that being defined? Social media offers essential infrastructure informational infrastructure
to users and so a lot of young people are
getting their news from social media and this will impact
what they're seeing and what they're not seeing, and they
(38:29):
may not even be aware that there are things being
filtered from their viewing.
Speaker 4 (38:34):
So before we dig in with you all a little
bit more about where the lines are drawn and where
a blurry is to what is seen as political content.
I just want to go to you, Jess, because your
numbers just give us a breakdown. People who opt in
to see your content because they want to be politically
informed by you, are they seeing less of.
Speaker 5 (38:52):
Your content on the back of this.
Speaker 4 (38:54):
You still getting the amount of video engagement, still getting
the amount of people who want to come and build
up your profile.
Speaker 17 (38:59):
Ultimately, there is absolutely a dramatic decrease and the people
I'm reaching and the people who are engaging, which you know,
those go hand in hand. Prior to this being rolled out,
it was also there were censorship in place before this,
and I want to make that clear. Instagram with the
sensoring content well before this new rollout, but this has
(39:21):
caused the dramatic decrease. I have three point one million followers,
so three point one million people who have opted in
to see what I'm posting, and I have been reaching
somewhere between six and eight percent of my own followers
since this went.
Speaker 3 (39:35):
Okay, well, I'm an Instagram user, Caroline's Instagram user. That
there is the policy side, and then there's just the
technology the platform, And I think many people would say
Instagram is not a place you go for news or politics.
Many would just say it's for entertainment value. It is
to share what you're interested in from a passion point
(39:55):
of view. That is an experience I think many people have.
What is your research tell you about the majority of
use case for why people go to Instagram and the
type of content they're trying to get.
Speaker 11 (40:07):
Absolutely so.
Speaker 18 (40:08):
I think there's also many people who would say they
don't go to Instagram to see food content, that they're
sick of seeing food blogs and recipes. Right, So, for
every user who doesn't want to see political content, there
are users who are seeking out political content and news
content on Instagram. The perception that Instagram is not a
political platform is just that it's a perception. There are
(40:31):
plenty of users who use Instagram to follow journalists, to
follow news outlets, to follow political organizations and political organizations
are very active on the platform, so this is going
to harm those organizations in all directions across the political spectrum.
(40:52):
And I think it's a bit shortsighted to say that
Instagram isn't a political platform and that that's not what
users want to see. We have plenty of evidence that
activists are online and that Instagram is being used for
political organization and for entertainment purposes. A lot of political
content is entertaining for people, although that might not be
(41:14):
their primary source of entertainment and often.
Speaker 5 (41:17):
Their passion throughout. You're bringing both of your passions today.
Speaker 4 (41:19):
L Rochford, of course, and Jess Nattel we wish we
had along with both of you.
Speaker 5 (41:23):
This is broom big technology
From Marhart where Innovation, Money and Power Collie in Silicon
Vallet NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed loud Love.
Speaker 3 (00:24):
And Caroline Heide Bloomberg's world headquarters in New York and
AURM Ed Lodlow in San Francisco. This is Bloomberg Technology
coming up.
Speaker 4 (00:31):
Amazon CEO Annie Jase He says that general to AI
boom is going to be.
Speaker 5 (00:35):
Built on Amazon Web Services.
Speaker 4 (00:38):
Or we need the takeaways from his annual letters.
Speaker 3 (00:39):
To shareholders class technology heavyweights to send on Washington for
the White House steak dinner with big names like Jeff
Bezos and Tim Kirk attending a lavish event and.
Speaker 4 (00:50):
Open AI CEO Sam Altman pictures a global AI coalition
on his visit to the Middle East.
Speaker 5 (00:56):
Next stop.
Speaker 4 (00:56):
Maybe we see him over on Capitol Hill too. We'll
discuss that and so much more throughout this hour. But Ed,
we start on these markets up a quarter of a
percentage point currently NASDAK managing.
Speaker 5 (01:07):
To put itself off of its lows.
Speaker 4 (01:09):
This is we once again really tackle inflationary pressures. Whether
it's a PPI number coming after the CPI print yesterday,
both showing inflationary pressures just start dialing up that little bit.
And we're seeing though, managing the NASDAK to outperform as bomb.
Speaker 5 (01:21):
Markets actually pull back a little bit. I'm looking at
the two year yield.
Speaker 4 (01:24):
We're outperforming on the front end of the curve, whereas
the back end, the tenure yield, for example, you'll still
pushing higher. But really the big move was yesterday, and
looking at what's happening in the euro it's not just
all about the Federal Reserve. It's about global world banks
at the moment, central.
Speaker 5 (01:37):
Banks that is.
Speaker 4 (01:38):
And we're looking at what the ECB said, look staying
pat as many had anticipated in terms of interest rates,
but signaling that inflationary pressures are dialing down across the Atlantic,
and therefore could we see cuts coming or off by
three tens percent versus the US dollar.
Speaker 5 (01:50):
Moving on, look at what else is performing versus the
US dollar. Crypto I'm down.
Speaker 4 (01:54):
By two tens percent on bitcoin at the moment, just
sub that seventy thousand dollars level.
Speaker 5 (01:57):
But what are you watching on the micro.
Speaker 3 (01:59):
There are a lot of stories to fit in today.
Apple's a name that we're going to look at later
in the program with Bloomberg's Mark German rough eight tens
one percent. Early unionization efforts are kind of the main headline.
But there is a note from JP Morgan analysts that
say that hedge funds are now looking at this stock
and considering what happens next with artificial intelligence in the
context of value add iOS and the handset. Hard to
(02:23):
know what the driver is, if any at all, but
we hire eight tens to one percent, and given its
market capitalization, we always pay attention to Apple because if
its waiting on major indices. There is an annual shareholder
letter plus AI theme in today's show. I am very
excited about it. JP Morgan is down nine tens to
one percent Monday night. I know I wasn't here earlier
(02:43):
in the week. Put the shareholder letter out and says AI,
and we're going to talk about the numbers behind that.
I think it's really interesting, so to Amazon up three
tens to one percent Andy Jasse's annual letter. The focus
about AI is interesting specific aws. Amazon is going to
be a facilitator, a place where AI is built by others,
(03:06):
maybe not building so much generator of AI themselves. That's
the story you and I have told quite a lot
in recent weeks and months.
Speaker 5 (03:13):
We are long shareholder letters.
Speaker 4 (03:15):
Let's dig in with punam Call and BLUEBG Intelligence and
Ed just puts it so eloquently there. Ultimately, they want
to be at the very heart the infrastructure of generative AI. Yes,
they will build a substantial number of GENAI applications ourselves,
but they're looking to others to build.
Speaker 6 (03:31):
Yes, you're absolutely right.
Speaker 7 (03:32):
You know, right now Amazon lags Microsoft when it comes
to AI because Microsoft has access to the open AI. However,
as they build these building blocks going forward, they can
close that gap over time. So we think the investment
is right. We think the time is right, and generator
of AI will not only help fueld the AWS business,
but also it's e commerce marketplace business where it will
(03:54):
help drive sales higher.
Speaker 3 (03:57):
Pun and what we're talking about specifically is I think
and you can go to Bedrock if you're a very
large enterprise player or a smaller startup and build your
own large language model, you can take advantage of a
third party large language model. Caroline and I have spoken
to Anthropic, for example Daniella m O'Day, and she talks
(04:18):
about all the.
Speaker 6 (04:18):
Business they're winning through AWS.
Speaker 3 (04:20):
Bedrock What I don't know is Amazon's cloud business AWS
actually gaining new customers, gaining growth or market share because
of their strategy with Bedrock.
Speaker 7 (04:33):
Yeah, I think you know, over time they will gain
new customers. It's just a matter of getting these large
language models developed and them getting the customers interested. But
we do think their scope for Amazon to continue to
gain in that vertical.
Speaker 4 (04:48):
What's interesting is well Google's event earlier this week, Cloud Event,
and they were really saying that it's startups that are
coming to them for cloud. How much, ultimately do companies.
Speaker 5 (04:59):
Diversify, not go all in with one player.
Speaker 7 (05:02):
I think diversification will happen across the board. It depends
on what you're using and where you want to be.
Amazon has done a great job in attracting not just
the startups but also established businesses, So.
Speaker 5 (05:14):
We think the scope is wide.
Speaker 7 (05:16):
We do think they're in the early innings of this,
and we do think right now they lag, but that
doesn't mean that they'll lag for a long time.
Speaker 6 (05:24):
Let's talk about Andy Jesse.
Speaker 3 (05:26):
He comes from AWS, that was his world, but the
story since he's taken the helm of Amazon has been
about cost discipline. In fact, don't even call it discipline pooa,
let's call it what it is, cutting cost lowering CAPEX.
And when I read the letter, he seems committed to that.
Speaker 6 (05:44):
Still, yes, he does.
Speaker 7 (05:46):
In fact, you know, they've been highlighting since last quarter
about the forty five cent reduction that they've had per
unit in their cost basis, and they think they can
press the pedal harder on that this year, largely as
they base GLEE streamline their inbound fulfillment, and they parse
out packages more efficiently to those regional distribution centers that
(06:07):
allow for SIND delivery.
Speaker 3 (06:11):
Clunamgyle of Bloomberg Intelligence one of our analysts that leaves
coverage of this stock, and we're really grateful to have
you in reaction. Meanwhile, Amazon founder Jeff Bezos joined tech
heavyweights last night at the White House state dinner hosted
by President Biden for Japan's Prime Minister Fumiyo Kashida. Attendees
included Bezos's fiance Lawrence Sanchez, Apple CEO Tim Cook and
(06:36):
executive Lisa Jackson. Microsoft president Brad Smith was Intendants as
a well, and actor Robert de Niro. Even vent capitalists
including Robert Stavius of Bessemer Venture Partners. You also had
Jamie Diamond, Massa Sun and John Gray of Blackstone and Caro.
For me, the story is pretty clear here. Japan important
(06:56):
for technology and the economy and more.
Speaker 4 (07:00):
Broadly for big get togethers of some important players, no
matter where they tend to be based. I mean, this
is where certain conversations had, deals are done. How many
are having intimate conversations with the Prime Minister of Japan.
But more broadly, I liked his Star Trek reference as well.
If you heard some of the commentary coming out of
the Leader of Japan, he was sort of going to
go boldly where no one has been before in terms
(07:22):
of deepening the US Japanese relationship.
Speaker 5 (07:24):
But this is more broad, isn't as well?
Speaker 4 (07:26):
I mean, there's a delightful menu that they managed to
be having triage Raby state not bad. But this is
also about deepening ties. But not just from an economic perspective.
We've got to think of this from a geopolitical perspective,
and notably what's happening with the Philippines coming in at
the moment, and indeed what this means for China US relations.
Speaker 3 (07:42):
Yeah, I go straight to China when the CEOs turn up.
You know that that market is important, right, whether it's
for supply chain or the economy direct.
Speaker 6 (07:50):
So let's bring up menu back up.
Speaker 3 (07:51):
That is contemporary modern American Japanese fusion.
Speaker 6 (07:56):
That looks great.
Speaker 3 (07:57):
But there's also a political element to this as well,
that Biden had a lot of big names in the
White House in an election year.
Speaker 4 (08:04):
Character Yeah, I think that is really notable and ultimately
trying to ensure that the economy is what Biden can
hang his hat on as well. Many worrying about the
inflationary pressures that were garnered yesterday and they did what
this really means for Biden Bidenomics and the lack thereof
but tech heavyweight really clear and present when it comes
to relationships with US and Japan.
Speaker 5 (08:31):
JP Morgan.
Speaker 4 (08:32):
It kicks off earning season Banks they are at the
start of them hammers tomorrow and earlier this week. Just
remember we heard from the CEO Jamie Diamond in his
annual letter to shareholders where he focused mainly on artificial
intelligence joining us now to discuss how banksy utilizing the
technology investing in it.
Speaker 5 (08:48):
Evidence CEO Alexandra was a Visita is with us.
Speaker 4 (08:50):
Evidence is an intelligent platform that really benchmarks attracts AI
adoption across financial services sector.
Speaker 5 (08:56):
And JP Morgan is the standout performer.
Speaker 4 (08:58):
Alexandra, you think that's in some way akin to the
performance of the bank.
Speaker 8 (09:01):
Can it stop more broadly, Yeah, well, thank you so
much for having me on Caroline and ED. But its
performance is incredibly strong in terms of its AI maturity,
its head and shoulders above other banks. It was early
to the game. Jamie Diamond made AI a focus for
the banks six years ago, where he made clear that
(09:23):
it was going to be an AI first organization and
from that followed a lot of initiatives like establishing a
research lab, you know, doubling down on hiring AI talent,
reorganizing the EXAC team, and that really has paid off
and you see, well, according to our measurements, you can
see that they sort of really stand out against other
banks and are incredibly strong on AI capabilities.
Speaker 3 (09:47):
We've been looking at the data behind JP Morgan's AI hiring.
You just made a really interesting point, which is six
years ago this all started.
Speaker 6 (09:56):
Let's show the chart.
Speaker 3 (09:57):
There's the AI hype of twenty two, twenty twenty three,
but if you track the.
Speaker 6 (10:04):
Hiring and what's so interesting.
Speaker 3 (10:05):
The title of that chart is JP Morgan slows AI hiring.
But look how elevated it was in twenty twenty two
and it started back in twenty twenty. What do you
make of that about how ahead of the curve or not?
So to speak, JP Morgan.
Speaker 8 (10:20):
Is Yeah, I mean, I mean, first of all, it's
a really important point that you make it in terms
of the hype in twenty two and twenty three of
AI and sort of what we're heading into is more
of a let's sort of see what gets through production.
Speaker 2 (10:35):
It's much harder.
Speaker 8 (10:36):
Than we think, and sort of the use cases going
from ideation to production just takes a little longer, and
some of that slow down and hiring is also a
little bit of a let's what talent do we actually need?
But when you look at that chart, you can see
that really being on a hiring tear from for the
last sort of six seven years. And you know, the
(10:59):
proportion of AI talent and the caliber of AI talent
in the bank is second to none. So right now
a lot of the banks are looking at like where
you know, the onset of using you know, genitive AI,
Where are we using it in the bank? Which which
platforms are we going to use, whether it's open AI
or Mistral or hugging face, which one of those, How
(11:20):
does it fit into our particular needs and how do
we refine it so so it gives us the best
output possible. So there is a bit of a let's
see what we can use internally of our AI talent
that can you know, can help us, you know, refine
that and before we sort of accelerate again, uh, and
think about what we hire externally. But it should should
(11:41):
also be noted that when you sort of look across
the banking sector, even the banks that have cut employees
have sort of tried to keep the AI talent sort
of relatively steady, if not increasing.
Speaker 4 (11:53):
Talking of talent, of course, within that shareholder letter was
the demonstration and their commitment to elevating almost exs level
the discussion around AI, and they mention the importance in
creating that new position Chief Data and Analytics Officer that
sits in the operating committee. That person over at JP
Morgan is indeed Teresa heightens Ritter, who I was lucky
enough to speak to at an evident event, and it's
(12:16):
notable that she has been galvanizing the focus on sort
of from top down ensuring that all talent are online
with where AI can really bring about a change in productivity,
Where are they seeing it and drive down in costs?
Speaker 5 (12:29):
Where are they passing this on to the user of
JP Morgan.
Speaker 8 (12:32):
Yeah, when it comes to well, first of all, when
it comes to driving the use of AI and where
you sort of look at the letter as really talking
about gaining efficiencies and really making the banks sort of
strong and lean and robust forwithstanding sort of any macro
challenges on you know, in the future, So looking at
(12:54):
driving down the costs and bringing up efficiency and bringing
up productivity, and AI being used to also see where
you can elevate revenues.
Speaker 5 (13:04):
Is it's whereas that it's sort of.
Speaker 8 (13:07):
In every newk and cranny of the bank looking at
sort of the ways that it can create that return
on investment. And then you know, with the AI tools
that then gets passed on to the customer and you
know in better customer management, you know experiences if time and.
Speaker 3 (13:27):
To Alexandra, do you think Jamie Diamond has a good
understanding of artificial intelligence?
Speaker 6 (13:32):
He himself, he is.
Speaker 8 (13:34):
Nick He saw it very early. He knew it was
going to be very impactful. He was one of the
first CEOs bank CEOs to go out and and say
we are changing. We are going to be an AI
company or an AI first company, where many banks would
be we're going to be great banks and using AI
to become a little bit better bank. He was a
(13:54):
visionary with that. I think he has a good understanding.
Speaker 3 (13:57):
Yes, he's more upbeat about it than he is about Bitcoin.
Alex and Mussa Visita. It's great to have you, of evident.
Of course, now EU's top tech regulator, Margareta ves Thea
says AI could be as disruptive as the atomic bomb.
The Executive Vice President of the European Commission joined Bloomberg
earlier today to talk about the current state of AI.
Speaker 9 (14:17):
It's top of mind for us to make sure that
the market stays competitive. When everything gets fueled by artificial intelligence,
it's going to change the marketplace.
Speaker 10 (14:28):
Do you have a timeline at all, Commissioner, when we
could potentially see.
Speaker 11 (14:31):
Some movement on this.
Speaker 6 (14:32):
No, we don't have a fixed timeline.
Speaker 9 (14:34):
Of course, we want to produce results as fast as possible,
also for the involved companies for their benefit. We'll be
getting there soon, I think.
Speaker 12 (14:43):
So we're talking about Microsoft and open Ai, but of
course they're not the only players. To hear, you have
Amazon actually with a big almost three billion dollar investment
into Anthropic, which of course competes with OpenAI.
Speaker 11 (14:57):
What do you make of that?
Speaker 12 (14:58):
Is that something that you're looking at as well?
Speaker 9 (15:00):
Well? We will be having, you know, a vigilant, keen
attention to what is happening in this field. We see
a lot of entrenched market power when it comes to technology,
and it's really important that now when we have technology
which is not just a new technology, it's it's basically
a new world that we're looking into, that we make
(15:22):
sure that it's a competitive new world.
Speaker 10 (15:26):
You just recently under the DMA went after three big
US tech companies, and to be honest, Commissioner, three is
a crowd. I'm really curious to know which of these
you are honing in on. And because a lot of
people really seem to think it's Apple, where the EU
has a lot of problems with.
Speaker 9 (15:41):
Well, what's the point of the Digital Markets Act is
to open the market to make sure that that more
businesses can can get to their customers so customers have
more choice. So obviously we are looking at getting out
of self preferencing so that you do not if your
for instance, have a Google search and you do not
just get a Google products. And we're looking at how
(16:03):
businesses can get a real relationship with their customers. So
to get rid of the ends is staring that we
see quite a lot and people have choice is they
want to stay in the Apple payment environment or they
want to have a direct and sometimes cheaper relationship with
their service provider.
Speaker 12 (16:20):
Well among those three Apple, Google and Meta, do you
have a priority target?
Speaker 9 (16:24):
Well, we have opened these five cases because we think
these are very important.
Speaker 11 (16:29):
We may have more cases in the.
Speaker 9 (16:30):
Pipeline, so we have given retaining orders for what may
be evidence once we're moving forward. These five cases, they
are all priority. We think that they are absolutely key
if our suspicions are confirmed that we get compliance because
this is this is what opens the market, and that's
(16:50):
the basic idea. Are the Digital Markets Act for many
more businesses to have a fair chance to get to
their customers.
Speaker 6 (17:06):
Okay, time for talking tech and first up.
Speaker 3 (17:08):
KKR is said to be reviewing options of a sale
or an IPO for BMC software, which could be worth
as much as fifteen billion dollars including debt. That's according
to sources. While no final decisions have been made, KKR
is favoring an IPO of BMC, which filed confidentially last
year with the SEC for a listing. Plus French chip
(17:30):
materials company Seutech is said to be considering building a
factory in the United States, following in the footsteps of
one of its biggest customers, TSMC, as it expands from
Arizona to Texas. With government incentives, The consideration would mean
that Stech would add to its global factory facilities alongside Singapore, Belgium,
and France, and positions the company for growth outside of
(17:53):
China and Saudi Arabia and the UAE are racing for
AI dominance, rushing to build out expensive data center infrastructure
to help support the technology. Both countries lag behind Western
Europe in terms of data center capacity, with hopes of
closing that gap in.
Speaker 11 (18:09):
A few years.
Speaker 3 (18:10):
In a recent report by PwC, it estimated that AI
will contribute nearly ninety six billion dollars to the UAE
and one hundred and thirty five billion to Saudi Arabia's
economy by twenty thirty.
Speaker 5 (18:23):
Caroline That was a great business sweep piece.
Speaker 4 (18:25):
Meanwhile, let's just talk about employees over in an Apple
store in Shorthills, New Jersey, just petitioned to unionize. It's
marking the first lutch effort that we've seen it in
about a year long lull of news around this. Bloomberg's
Mark German just going to remind us of the context
when it comes to Apple, because they're not the first
store that's looking to unionize.
Speaker 13 (18:42):
Yeah, no, that's a great point.
Speaker 14 (18:44):
The Apple unionization efforts really kicked into high gear right
in the.
Speaker 13 (18:48):
Middle of the COVID pandemic. In twenty twenty two.
Speaker 14 (18:51):
You saw their retail store in the Towson area of
Maryland petition to unionize.
Speaker 13 (18:56):
They successfully unionized.
Speaker 14 (18:58):
Are now recognize is a unionized Apple retail store. The
Penn Station store and a mall in Oklahoma City, Oklahoma
is a unionized store. So those two are the only
two unionized stores. But there have been a few other
stores that attempted, one in Saint Louis, Missouri, one in Atlanta, Georgia.
Speaker 13 (19:16):
Those fell apart.
Speaker 14 (19:17):
One of those unions even chastised the union company and
ended up siding with Apple. Now you have another store
joining in and that is the Short Hills mall store
and upscale area in New Jersey. And at this point
it's still early. They've petitioned, they have one hundred and
four employees that would be part of the union. There
still needs to be a vote. They still need to
get to the bargaining table with Apple.
Speaker 13 (19:39):
But this is the process.
Speaker 14 (19:40):
And so this was a major development petitioning publicly stating hey,
we are trying to unionize.
Speaker 13 (19:46):
So this is a big deal. The fifth store that
we know of to attempt.
Speaker 3 (19:50):
They are trying to unionize. This is a path trodden
by Amazon. You know, Caroline and I've kind of been
through a similar story arc with that company.
Speaker 6 (19:57):
But I guess the next question.
Speaker 3 (19:59):
At all smart, what is Apple's attitude towards unionization the
company's approach.
Speaker 14 (20:05):
Well, the company is completely against unionization. They've been holding
roundtables at the Short Hills, New Jersey store for months
now pushing back on the idea of that team unionizing.
They don't want to have to change their perks, their benefits,
their pay strategy. You know, Apple is a company that
wants things to be consistent and completely under their control.
Speaker 13 (20:26):
Unionization upsets that.
Speaker 14 (20:27):
Finely tuned balance the company has enjoyed for as long
as it has under Tim Cook and Steve Jobs before him,
So certainly this is not something that Apple wants. I
think they're fairly happy that out of the two hundred
and seventy and change retail stores in the US, only
two have successfully unionized, and of those two, they haven't
given them anything.
Speaker 6 (20:47):
Blamebak's chief correspondent Motgum and thank you.
Speaker 3 (20:58):
Welcome back to blame Bags ten Lovelow here in San
Francisco and Caroline Heid and New York.
Speaker 4 (21:03):
I've got to check on the markets for you, Ed,
because right now, no, we're actually seeing NAZAC and tech
stocks outperform on a day where bon yields are still
selling off on the end of the curve, so ten
yure yields are seeing four basis points to the higher.
Speaker 5 (21:14):
We are still trying to.
Speaker 4 (21:14):
Debate the inflatory pressures we have PPI today, CPI yesterday,
still showing inflation is kind of going the wrong direction
for the Federal Reserve. If banking on a cup come June,
people starting to take those bets off the table. We're
seeing Bitcoin under pressure just by two tens percent, where
of sixty nine thousand s.
Speaker 5 (21:29):
It's around sixty five.
Speaker 4 (21:30):
We're basically kind of treading water ahead of earning season
as well, the banks kicking off tomorrow. Moving on to
some individual movers, I mean interesting on the upside, A
lot of the key names are used to Nvidia, Apple, indeed,
even Amazon and a new record high today after its
shareholder letter.
Speaker 5 (21:43):
I want to shine on an Atlassian.
Speaker 4 (21:45):
It's getting an upgrade from analysts thinking that now is
the time to be buying into this enterprise focus software company.
Speaker 5 (21:50):
So up more than three percent. Tesla though once again languishing,
pulling back.
Speaker 4 (21:54):
In fact, you noted that Rivian shares performing as much
as seven percent to a record lows. Some reports that
Ford is cutting its evil prices. Elon Musk apparently looking
at India. Maybe we'll get some updates on supply and
in team demand coming from that country. Adobe, though, want
to watch interesting reporting coming out on basically how expensive
it is sometimes to be training your large language models
(22:14):
and text to video in particular, and where you're getting
some of those videos from.
Speaker 5 (22:19):
We want to dig in on Nado.
Speaker 4 (22:20):
We've just done a pressure by about percentage point today,
but looking like it is really trying to take on
the likes of Saura. Of course open aiyes product when
it comes to AI video generation, apparently offering it's network
of photographers and artists get this one hundred and twenty
dollars to submit videos of people engaged in everyday actions, walking,
expressing emotions, joy, anger, according to documents all seen by Bloomberg.
(22:41):
Let's just get more of our own reporter Brady Ford,
who helped break this story. And it is notable that
they're playing a bit of catch up here with text
to video. But where they don't have to play so
much catch up is where they train their data.
Speaker 5 (22:53):
You'd have thought, but maybe they have to pay a
bit extra.
Speaker 11 (22:55):
Yeah, it's a funny dynamic.
Speaker 15 (22:57):
So they have this giant repository of they've been using
to train their photos. They got like three hundred million photos,
not as big of a deal when it comes to
the video. They don't have quite as much of that
in the stock libraries. So we see now that they're
starting to procure data to be able to train on.
And it's really funny kind of videos, right. It's like
some of the sample videos is people smiling, people frowning,
(23:19):
picking up weights, right, training these AI models on how
people really interact with the world.
Speaker 5 (23:24):
I like them thing we're all really fit.
Speaker 15 (23:26):
Yes, they think we're all very fit, or they don't
even have any videos of us doing it so they
know we're not right. But yeah, so they really need
these videos to help their model understand how the world
works and so that they can, you know, not get
smoked by open AI.
Speaker 3 (23:39):
Mate two dollars sixty two cents per minute or as
high as seven dollars five cents per minute, based on
your reporting good reporting. If you're the CFO or COO
of Adobe, and that's before you facturing compute costs, you're
not going to be thrilled about the cost of training
(24:00):
a model like the Economic Sphere are actually newsworthy.
Speaker 6 (24:04):
This is a surprise.
Speaker 15 (24:05):
So it's not quite as high as it may sound like, right,
because it's one hundred and twenty dollars for one hundred
short videos.
Speaker 9 (24:13):
Right.
Speaker 11 (24:13):
I was trying to do the math of if I wanted.
Speaker 15 (24:15):
To create this, it's going to take you a good
five six hours to make all these videos doing push ups,
then cooking and smiling and frowning. I mean, the actual
amount they're paying ends up being pretty low. And you
could say that all. I mean, they could scrape the
open Internet for free, but we know that there are
issues there with tagging the videos correctly getting the exact
(24:36):
quality you need. So I mean these are things they
might need to procure once, but they can continue to
train on. So, Yes, it is a material amount of
money in the grand scheme. It's not like they're selling
out a ton to every creator though.
Speaker 4 (24:51):
I mean all of this comes within the context of
Sora and where it got data, right, yeah.
Speaker 13 (24:57):
Right.
Speaker 15 (24:57):
We also have that viral clip of the open Aic saying, oh,
we don't know where it was trained, but right, we
all kind of know where it was trained, right, And
I mean that's been Adoby's whole marketing pitch that we're
going to try to do things the right way.
Speaker 11 (25:10):
We're going to only use sources that we have true
access to.
Speaker 5 (25:13):
You're not going to get done in the courts. Basically,
you're going to get sued.
Speaker 13 (25:16):
You're not.
Speaker 15 (25:16):
They literally say, yeah, if you get sued, we're going
to be there with you.
Speaker 11 (25:20):
We'll see you in court, we'll back you up.
Speaker 15 (25:22):
Will that end up holding them back? Will that end
up casting more than it needs to? It is yet
to be seen. But that's at least their public message
at this time.
Speaker 3 (25:32):
Bloomberg's Brady Ford, I think you're always on top of
it when it comes to Adobe, Thank you now. Open
AI CEO Sam Outman has been working to build a
global coalition among government and industry leaders to support boosting
the supply of chips, energy and data center capacity that's
needed to develop artificial intelligence technology. That's according to our
(25:54):
sources and Bloomberg Shreen Gafari broke that story with me
and joined me on set. This is kind of an
evolution of our existing reporting, right. It started with this
idea that Sam Outman was worried about the supply long
term of AI accelerators or the GPUs, the train models,
and later inference it's bigger.
Speaker 6 (26:13):
Now, just recap for audience what.
Speaker 16 (26:15):
You and I have learned, right, So we know now
that Sam Maltman has been in the UAE this week
meeting with government officials, with investors, and the pitch is
to build some kind of global coalition that goes beyond
just manufacturing chips, but actually into also things like energy production,
which is a huge and growing resource for them that
(26:37):
they're quite worried about securing.
Speaker 3 (26:39):
What's interesting here is the players. You know, we have
some understanding that Sam met with UAE officials. G forty
two is a name that gets bandied round, But do
we know who's in this coalition so far?
Speaker 5 (26:53):
So we know the pitch is that it's worldwide.
Speaker 16 (26:56):
Sam is traveling to Washington, DC today right to meet
with people on Capitol Hill, national security leaders, so we
know that, you know, he's talking to US leaders as well,
but we also know that he's talking to He has
in the past talking to leaders of several Western countries
and democracies, and so the pitch goes beyond just the
(27:18):
Middle East.
Speaker 4 (27:18):
For sure, it's going to resonate with law makers. It's
got to resonate with the supply chain more sure. And
we're seeing a lot of money being spent by the
US government trying a law offshore chip makers manufacturers fabs
ultimately coming from TSMC.
Speaker 5 (27:34):
There's much reporting on whether Samsung is going to.
Speaker 6 (27:36):
Be here as well.
Speaker 4 (27:37):
Digging in deeper, how much is he talking to Corporate
America and corporations more broadly as well?
Speaker 16 (27:43):
Just because this doesn't happen even night right, I mean,
I think this conversation is going to go beyond open
an eye to other industries. I don't think you know,
you don't want the pitch to sort of just focus
on one company, but rather on building out the capabilities
for industry as a whole. So that's what I'm under
seeing the discussion to be at these times.
Speaker 4 (28:04):
It's a brilliant reporting from both you and ED and
we'll see what that conversation ends up looking like on
Capitol Hill as well.
Speaker 5 (28:10):
I'm sure you're reporting on that too, Sharon Guffrey. We
thank you so much.
Speaker 4 (28:13):
I meanwhile, coming up, pitch Book out with its latest
report into the health of the VC industry.
Speaker 5 (28:17):
May readging into the pitch Book analyst Kyle Stamford that's next.
Speaker 4 (28:21):
This is Blue made Technology. Let's just talk about private
(28:44):
markets a little bit. Fundraising they're in beginning of twenty
twenty four met with some actual residual optimism, but that
did not translate into meaningful growth in VC activity. That's
all according to Pitchbook's latest Venture Monitor report, and it
highlights the competition for capital remains a fierce two years
into a slowdown, and while stronger companies might still be
able to compel investment, the same is.
Speaker 5 (29:04):
Not true for those that are kind of struggling.
Speaker 4 (29:06):
Carl Stamford with please to say, leads US Venture capital
research over at Pitchbook and joins us. And so it
really feels like a tailor that haves and the have not.
If you're an AI dialing, you're able to reap it in.
If you're not, and you're not managing to grow revenue
and indeed profitability and count yourself out.
Speaker 1 (29:22):
Yeah, but I mean at some point that's where this
market should be, right, I mean, we're looking at high
risk investments, companies that should be growing fast, being able
to get their their product and market and eventually exit
down the line.
Speaker 2 (29:36):
Fifty five thousand companies.
Speaker 1 (29:37):
Are currently VC backed in the US market, you know,
one hundred and twenty thousand or so globally. That's a
huge number of companies that still are fighting through similar trajectory,
similar sectors, and fighting for that capital that's just not
there anymore.
Speaker 6 (29:51):
Okay.
Speaker 3 (29:52):
I am hearing and seeing things that the data doesn't show.
For example, twenty four hours ago, we had Toyota Ventures
on the show. They are a single LP fund granted Toyota,
but they raised even more money from that LP to
invest in physical stuff I'm hearing lots about funds that
are being raised to invest in manufacturing industrialization. Why is
(30:16):
that not showing up in the data?
Speaker 1 (30:18):
Kyle Right, Well, I think first if you start with
Toyota Adventures or these corporate LPs, they have a much
different return profile or ability to get these different returns
than a attraditional VC autritional LP might be looking for. Right,
there's a return on products or ability to integrate new
products into their cars down the road. As the attritional LP, though,
(30:40):
they're looking for that cash on cash return, and we
have not seen that by any means. I mean, all
the last quarter, the entire story was about Reddit and Esterilabs,
which were solid IPOs, but in total in the US
it was just eighteen point six billion dollars in exit
value that was generated. And so if you're an LP
without those returns and those distributions is coming back to you,
(31:01):
there's less incentive to put money back into the market now,
or there's not an ability.
Speaker 16 (31:06):
Right.
Speaker 1 (31:06):
They're looking for that capital would come back to recycle
into new funds and new commitments and make sure that
they're in all these vintage years. But if that's not
coming back, there's just no way for these traditional LPs
to get or to put money back into the venture
market right.
Speaker 4 (31:19):
Now, and you say traditional LPs, and it has been
fascinating to see almost the domination of corporate VC in
the area of AI, certainly compared to the venture capital
arena right now. Who are a new guard of LPs
that aren't corporate. Are we seeing bench capital companies managing
to lure in different types of investors to secure their
(31:41):
next funds?
Speaker 2 (31:42):
Do you think the investor of the LP bas is
going to always be wide ranging?
Speaker 9 (31:45):
Right?
Speaker 1 (31:45):
Pensions obviously are in that you sell CalPERS, read up
their commitment and increase their commitment to VC or the
last quarter.
Speaker 2 (31:53):
I mean, corporates obviously are huge.
Speaker 1 (31:55):
You look at the Japanese corporations and there's trillions of
dollars on their balance sheet they're able to put into
put to work in venture into new businicists. The large
megacaps in the US as well, huge amounts of cash
to be able to put it put to work, and
we've seen that in some of their AI invest some
of the past few years. I think where it really
gets down to struggling for LPs when you look at
(32:15):
the smaller ones, right the high net worth individuals that
maybe are feeling still very wealthy, but not nearly what
they were in twenty twenty one. You look at foundations
or endowments that are finding ways to put capital to work,
but maybe are not as able to take that ten
years of illiquidity that DC is going to bring to
(32:36):
to their cash. So there is still a broad range
in investors. Gps are being very strategic with who they're
going after and how they're positioning their strategy, and BC
fund to those LPs make sure it works for them
as well.
Speaker 3 (32:50):
Kyle, it's been relatively exciting recently, relatively in the IPO market.
You know Reddit as an example. Is there a relationship
between upstream downstream? So when LPs and the firms that
they give money to see activity in the IPO market,
so they regain faith that actually putting something into a
(33:12):
five or ten year horizon is a good idea.
Speaker 1 (33:15):
I mean, I think relative excitement is a really good
way to position Q one, right. I mean, those two
IPOs were great, but there's seven hundred and twenty unicorns
in the market right now or private in the US,
or fourteen hundred globally. Globally, there's a four point eight
trillion dollar market cap on these unicorns, and so a
couple IPOs is great, but until those distributions actually get
(33:36):
going back to LPs again, it's going to be a
slow fundraising market. It's going to be a slow deal
making market. We have our fun distribution data is showing
that distributions over the past four quarters have been as
low as they were in the global financial crisis. And
so again, there is definitely some positives that come out
(33:56):
of a few companies going to public, but there needs to.
Speaker 2 (33:59):
Be many more.
Speaker 1 (34:00):
And the M and A market again too, where a
lot of these returns are also going to get generated,
is non existing. Many of the deals we have from
an M and A perspective this quarter were had no
deal of value attached, right, so their immaterial to the
corporate growth. And so that's a very difficult spot when
you look at returns down the road.
Speaker 3 (34:18):
Hey, Carl, let's tap into your relative excitement. What are
you relatively excited about thematically? Subsector wise?
Speaker 1 (34:25):
Sure, subsector wise, I mean, obviously AI is going to
be the major area going forward. I think we've seen
a lot of unique companies and you need this models
getting started. I think It's interesting dynamic too, with the
incumbents and Microsoft and AI and Microsoft and Google and
Amazon being so heavy into it. I think it's going
to be very quick to what we're talking about, the
(34:46):
bifurcation and have and have nots. Then there's gonna be
a lot of money made in AI and there's a
lot of money loss, and I think it's be relatively
quick over the next few years because of the incumbents
and how they're playing in the market.
Speaker 2 (34:57):
You know, Tech in.
Speaker 1 (34:58):
General, I think is still really strong. Even though it's
a slow market. Like Karen said, strong companies are getting funded.
There's money out there for these companies, and so tech
is going to continue pushing forward in We like what
we've seen, but it's in me a difficult market, I
think for every sector down the road.
Speaker 3 (35:15):
Carl Stamford, lead US Bench Capital Research Analysts at Pitchburg,
Thank you very much.
Speaker 4 (35:26):
More protection for teens on Instagram is coming now. The
social platform, run of course by Meta, is turning to
AI to blur out nude images sent via direct message now.
Instagram announced in a blog post today that the update
aims to protect users from unwanted photos as well as
from potential sextortion scammers. This comes, of course, as US
politicians have been continuing to accuse a platform of damage
(35:49):
to youth mental health.
Speaker 6 (35:52):
Let's stay with Instagram.
Speaker 3 (35:53):
It's recently changed its policies for political content and it
has caused a stir from some users. The move, which
is coming during an election year, has prompted some pushback,
with some like Republican Senator Marsha Blackburn even accusing the
company of censorship. You're looking at the posts that she
made on x Let's break it all down with el Rochford,
(36:16):
senior data senior data and policy specialists with the Crime
and Justice Institute, as well as Jess Natali, creator of
the So Informed Instagram page. Jess, Let's start with you.
You are a user, a well followed user of Instagram.
The policy and its rationale are clear.
Speaker 6 (36:35):
What is your response to it?
Speaker 17 (36:36):
I mean, I think it's quite alarming and quite transparent,
the timing in which this is being rolled out, and
as small things like preparing people for the election, giving
them the educational tools all the way to a genocide
being documented on their platform. I think it's taking away
(36:58):
the authority through people to consume what they want to
be consuming, which is important information, it's news.
Speaker 4 (37:08):
I'm interested in the academic perspective here, l because your
PhD in sociology of the per dou you're focused on
reproductive justice, on racial justice movements in particular. And I'm
wondering if when ultimately Instagram is saying we are not
trying to clamp down on what you have actively decided
you want to watch those that you follow, but it's
more people that you don't follow sort of suddenly getting
(37:30):
into your.
Speaker 5 (37:31):
Reels, into your streams more poorly.
Speaker 4 (37:33):
How much do you think that this does limit, you know, ultimately,
people not wanting to be bombarded with things that they
do want to be seeing, or indeed, does it cut
off an ability to see outside your own bubble right now?
Speaker 18 (37:45):
Sure, I think that's a great question. Opting into seeing
political content is a little bit tricky because a lot
of users weren't aware of this future was being rolled
out at all, so they weren't aware that this rollout
would impact what they were seeing or not seeing.
Speaker 5 (38:05):
But it seems a bit odd the selection criteria.
Speaker 18 (38:08):
So social topics are being filtered out, but how is
that being defined? Social media offers essential infrastructure informational infrastructure
to users and so a lot of young people are
getting their news from social media and this will impact
what they're seeing and what they're not seeing, and they
(38:29):
may not even be aware that there are things being
filtered from their viewing.
Speaker 4 (38:34):
So before we dig in with you all a little
bit more about where the lines are drawn and where
a blurry is to what is seen as political content.
I just want to go to you, Jess, because your
numbers just give us a breakdown. People who opt in
to see your content because they want to be politically
informed by you, are they seeing less of.
Speaker 5 (38:52):
Your content on the back of this.
Speaker 4 (38:54):
You still getting the amount of video engagement, still getting
the amount of people who want to come and build
up your profile.
Speaker 17 (38:59):
Ultimately, there is absolutely a dramatic decrease and the people
I'm reaching and the people who are engaging, which you know,
those go hand in hand. Prior to this being rolled out,
it was also there were censorship in place before this,
and I want to make that clear. Instagram with the
sensoring content well before this new rollout, but this has
(39:21):
caused the dramatic decrease. I have three point one million followers,
so three point one million people who have opted in
to see what I'm posting, and I have been reaching
somewhere between six and eight percent of my own followers
since this went.
Speaker 3 (39:35):
Okay, well, I'm an Instagram user, Caroline's Instagram user. That
there is the policy side, and then there's just the
technology the platform, And I think many people would say
Instagram is not a place you go for news or politics.
Many would just say it's for entertainment value. It is
to share what you're interested in from a passion point
(39:55):
of view. That is an experience I think many people have.
What is your research tell you about the majority of
use case for why people go to Instagram and the
type of content they're trying to get.
Speaker 11 (40:07):
Absolutely so.
Speaker 18 (40:08):
I think there's also many people who would say they
don't go to Instagram to see food content, that they're
sick of seeing food blogs and recipes. Right, So, for
every user who doesn't want to see political content, there
are users who are seeking out political content and news
content on Instagram. The perception that Instagram is not a
political platform is just that it's a perception. There are
(40:31):
plenty of users who use Instagram to follow journalists, to
follow news outlets, to follow political organizations and political organizations
are very active on the platform, so this is going
to harm those organizations in all directions across the political spectrum.
(40:52):
And I think it's a bit shortsighted to say that
Instagram isn't a political platform and that that's not what
users want to see. We have plenty of evidence that
activists are online and that Instagram is being used for
political organization and for entertainment purposes. A lot of political
content is entertaining for people, although that might not be
(41:14):
their primary source of entertainment and often.
Speaker 5 (41:17):
Their passion throughout. You're bringing both of your passions today.
Speaker 4 (41:19):
L Rochford, of course, and Jess Nattel we wish we
had along with both of you.
Speaker 5 (41:23):
This is broom big technology
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