May 7, 2024 • 36 mins
Bloomberg's Caroline Hyde breaks down all the details from Apple's 'Let Loose' product launch as the company launches new iPads. Plus, Disney shares fall amid its profit outlook and subscriber miss, and Uber and Instacart team up to take on DoorDash.
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Speaker 1 (00:01):
From the heart where Innovation, money and power Collie in
Silicon Valley, NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 3 (00:24):
And Caroline Hyde of Bloomberg's world headquarters in New York.
Ed Ludlow, he's off. This is Bluemeg Technology. Coming up.
Speaker 4 (00:30):
We'll bring you all the details from Apple's let Loose
product launch as a company brings us.
Speaker 3 (00:35):
The new AI ready iPads, and we'll hear from the
CFO of Disney's shares full hard.
Speaker 4 (00:40):
After a cautious outlook for streaming subscribers plus Uber and Instacart,
they team up to take on door Dash. Our interview
with both of the company's CEOs later this hour.
Speaker 3 (00:51):
First, let's check in on these a marngres.
Speaker 4 (00:53):
We turned to the green even on the NASDAC after
really some strong days that we've had for the last
three days.
Speaker 3 (00:59):
I mean remember on money we had the best three.
Speaker 4 (01:01):
Day run for stocks more broadly that we'd had well
since November. I'm going to bring you back to the
benchmarks for a moment. I'll get onto these individual players
in a moment where we are seeing the NASDAC on
the higher side, we've seen bomb markets actually rally as
well ahead of that three year auction.
Speaker 3 (01:15):
We're also seeing, of course, the world of crypto.
Speaker 4 (01:17):
Just keeping an eye on what's happening with the world
of bitcoin at the moment, because we have of course
seen well in up about one and a quarter of
a percent, a little bit of risk appetite there in
the crypto land. Now, let's take it onto some of
the individual movers that we've had on the day.
Speaker 3 (01:29):
Because this has been thick and fast.
Speaker 4 (01:31):
Earnings still coming of course after the bell yesterday and
also this morning Disney, as we're going to be getting
to this company in a moment down more than nine percent. Look,
some of the numbers were pretty strong. We're seeing still
a focus on bringing about profitability at this business by
Bob Byger. However, subscriber numbers looking to be a more
cautious outlook and forecast coming from the CFO.
Speaker 3 (01:51):
The market falls hard on that.
Speaker 4 (01:52):
Palenteer came after the bell yesterday, and look, we're once
again seeing some rapid growth, but not as fast as
people want to see, particularly with the US commercialization growth
that we're seeing for Palenteer. It came after the bell yesterday,
and look, we had seen seventy percent in previous quarters
were down to just oh but a forty percent increase
in the overall sales growth, So a little bit of
caution and taking off of the market thereafter the valuation
(02:14):
and run up. I'm looking at Apple though, up four
tens percent, the juggernaut unrailing some new products, this one
all about the iPad, an AI focused iPad pro and
a larger iPad Air. Want to break down the latest
of what was just occurring in the last hour or so.
Speaker 3 (02:29):
Rumberg's Dana Wellman were we impressed by the lineup. We've
been waiting a long time, you know.
Speaker 5 (02:34):
It's interesting, as you say, this is the first iPad
news we received from the company in almost two years,
perhaps a year and a half, and the announcement felt
incomplete to me. This announcement was as I think we expected,
all about the hardware. The iPads are thinner than before,
they're lighter, they're faster as you'd expect, and Apple did
make a hint at the device's AI capabilities. There's so
(02:58):
much that is still unanswered, clearly about the software experience,
and as I imagine everyone is thinking, the AI capabilities,
the company isn't expected to get into any of that
until it's annual Software Developer conference, which usually takes place
in early June. So right now we've got some promising notes.
We know a lot about the hardware. We're still wondering
(03:18):
in a sense, what can it do fully with the
software and who is it for? And I only say
that because the devices are so increasingly laptop like. Yes,
but Apple also sells laptops, which we're not mentioned today.
Speaker 3 (03:30):
Yeah, So I.
Speaker 4 (03:30):
Mean, for me as a commuter, an iPad makes an
awful lot of sense. But if you're a designer, if
you're someone who's wanting the power of a Mac, you
ever going to be getting this and an iPad?
Speaker 3 (03:41):
Or who do you think the overall consumer is?
Speaker 5 (03:43):
From real perspective, I think these are perhaps laptop replacements
or secondary laptops, if you will. It's interesting to me
the higher end iPads here are the first iPads that
have o LED screens, and this is just in shorthand
a much more advanced screen technology than even the MAX
(04:04):
have right now. Some competing PC makers do have laptops
that have old screens, but not Max. So if you're
looking for a laptop like experience with a really superior display. Actually,
the iPads might be a better choice than some max.
Speaker 4 (04:17):
People are liking the stylist, liking the ability with which
you can interact with it as well. Overall, though we've
been waiting and waiting, do you think ultimately the fact
that we've been sort of a drought of new iPads
will just galvanize demand going into this product?
Speaker 5 (04:31):
Apple would certainly certainly hope. So the most recent quarter
was particularly disappointing for Apple in terms of iPad sales,
And it would make sense when you remember that the
hardware really was so stale, And consumers aren't stupid, They
do know, they understand something about the rhythm of iPad
and Apple update cycles in general. And I wouldn't be
(04:52):
too keen on buying something that hadn't been updated in
over a year, knowing that Apple is likely to have
an update around the corner just about any time.
Speaker 4 (05:01):
And then we have the handwringing issue of Apple being
behind the curve, so to speak, when it comes to
artificial intelligence. Many would say, look, just it always comes
in a little bit slower, but then comes with strength.
Are you feeling from an investor perspective, but from a
user perspective that AI on an iPad or AI on
device is really going to be a winning formula for Apple.
Speaker 5 (05:22):
Yes, I expect Apple to have some interesting news. I
don't know what it's going to be, but I do
believe Apple is going to be talking quite a bit
about AI and it's coming conference. I also think, to
some extent, this is a little bit about marketing and
the language that Apple has chosen to use. I remember
there was a different competing software conference, it may have
(05:44):
been Google about a year ago, and they would not
stop saying AI. You can choose to say AI over
and over again. Does that make it true that you
have invested more in AI and that you're doing a
better job. I think a lot of what Apple already
has in its products is to an extent AI powered.
Even if they're not using the words AI, I do
think they have more to share and need to say more,
(06:07):
if not to actually catch up, to at least at
the very least correct the perception that they have lagged
behind the competition.
Speaker 3 (06:15):
A bit of pring, a little bit of storytelling here.
Speaker 4 (06:17):
When you've already got the M four ship in there,
which makes it AI ready. There, we have the stylist
that we can currently see. Daniel Woman so great to
have you on the same launch day from Bloomberg.
Speaker 3 (06:27):
We thank her.
Speaker 4 (06:35):
After that board fight, there was one. We now see
some money coming off the table of Disney when it
comes to its share price because earnings are out and
there was some caution ahead when it comes to subscriber growth.
But let's dig into where the numbers actually did manage
to beat. I'm looking at earnings for share looking strong
for Disney overall. We're also seeing the fact that they
are on course to mainly focus on profitability come the
(06:56):
fiscal next quarter. Even by the fourth quarter, you can
see profit ability in their streaming unit and we're seeing
those still by seven point four percent over the last
two trading days for Disney, and a lot of this
is coming because there's still a lot of weakness and
TV in cable. Of course, they have the twin strikes
that impacted the amount of revenue that they're getting overall
from their movies, and maybe we're seeing well a steer
towards a slowing and insatiable demand to be getting to
(07:20):
those parks and on those boats that Disney has as well.
Speaker 3 (07:23):
We spoke the CFO Hugh.
Speaker 4 (07:24):
Johnston a little bit earlier and just hear his cautious take.
Speaker 6 (07:28):
The quarter was really a strong one for US, seventeen
percent of I growth, thirty percent EPs growth.
Speaker 2 (07:34):
That's what led us to raise guidance.
Speaker 6 (07:35):
To twenty five percent EPs growth for the full year,
which is obviously quite strong.
Speaker 2 (07:40):
Two big stories I think here. Number one, you were just.
Speaker 6 (07:43):
Talking about our experiences business was up ten percent on
a revenue basis, twelve percent on an a.
Speaker 2 (07:50):
Y basis, and the park's.
Speaker 6 (07:52):
Business was actually up thirteen percent on OI, So we
do feel.
Speaker 2 (07:56):
Good about that.
Speaker 6 (07:57):
Obviously, I watch other stocks report and seen the value
consumer is really struggling a bit and making choices right now.
Speaker 2 (08:04):
We're not really seeing as much of that in our
portfolio of products.
Speaker 6 (08:09):
The other positive for US is obviously the streaming service.
Last year we lost about six hundred million dollars. This
year we're about break even and we saw twelve percent
revenue growth, So we're encouraged by the progress we've made
in that business in a relatively short period of time.
Speaker 7 (08:25):
Hugh, you said that you're not seeing that kind of
price sensitivity. How much could you increase prices in from here?
Speaker 6 (08:30):
It's a great question we took prices up a little
bit in the beginning of this year and didn't really
see much of an impact. So as to what the
future brings, we're obviously very judicious with the way that
we price. We want to provide access to as many
guests as we possibly can, but we do believe that
the great experiences we provide people are willing to pay for.
Speaker 2 (08:53):
Hugh.
Speaker 7 (08:53):
Over the past six months, we've been talking about the
cost cutting operations in Disney. Have we finished some of
the shrink have we finished the pairing back and are
you back on some sort of growth trajectory.
Speaker 6 (09:04):
We are definitely back on a growth trajectory. That said,
we're always going to be looking hard at our cost structure,
in particular looking to reduce costs where perhaps they add
less value than they used to, and redeploy some of
that money back into the business so that we can
actually grow the balance of the business. So I think
that's a never ending exercise of looking for ways to
(09:24):
be more efficient as a company so that you can
invest in your future.
Speaker 7 (09:27):
When you talk about growing, where is that growth focused on?
Speaker 2 (09:30):
Geographically?
Speaker 7 (09:31):
We know that in the US you've got a very
strong parks business. In Europe there also is a parks presence.
But in Asia, in particular in China, that has been
a growth area. Is it still how much can that
be a bright spot at a time of increasing geopolitical tensions?
Speaker 6 (09:46):
Yeah, I do think not just China, but all of
Asia represent growth opportunities for us, both in terms of
the streaming service and select markets as well as in
terms of the parks and cruises business. So we do
see good growth oport tunities there. Europe and Latin America
continue to be good growth opportunities. And make no mistake,
North America we're not done growing yet. We still think
(10:07):
there are terrific opportunities here for us right at home.
Speaker 8 (10:09):
When it comes to Asia Pacific, is it domestic demand
within those countries, specifically China or is it tourists in
the region.
Speaker 6 (10:17):
Combination of botho't I wouldn't tie it to one or
the other.
Speaker 2 (10:20):
I think it's a combination of both.
Speaker 8 (10:21):
And when you look at China, to Lisa's point, you
know we're going into a very heated political election coming
up in November, very hot rhetoric regarding China. Is it
becoming more challenging to deal with authorities in Beijing and
business on the ground. Given the increased geopolitical tensions, it.
Speaker 2 (10:43):
Has not been for us.
Speaker 6 (10:44):
You know, one of the benefits of what we do
for a living is, you know, we make people smile.
We bring them happiness, right, we bring them the most
magical place on earth. Candidly, the government's investing in infrastructure
to make it easier for guests to get to.
Speaker 2 (10:58):
And from the park.
Speaker 6 (10:59):
Were containing to invest in that park in order to
drive growth.
Speaker 2 (11:03):
It's doing better now than it ever has.
Speaker 6 (11:05):
So we're the fortunate beneficiaries of bringing people joy in
a world that needs it.
Speaker 4 (11:11):
Hugh Johnston Disney CFO there coming up. Actually, we're going
to be hearing from the former Google CEO, Eric Schmidt
on China as well as his think tank holds its
first ever AIXPO on competitiveness.
Speaker 3 (11:23):
In that field.
Speaker 4 (11:25):
Meanwhile, let's just have a little little look on what's
happening on the sharefront of Infinian. Now here's a chip
focused business that's looking at China as well, looking.
Speaker 3 (11:34):
At auto demand.
Speaker 4 (11:36):
Basically, it's chips within evs saying China is actually bottoming
the seeing healthy demand there.
Speaker 3 (11:40):
For Infinian product products. We're not more than twelve percent.
Speaker 4 (11:43):
Yet another key chip designer or maker or builder that
is showing that maybe we've just seen the botted out
in terms of the ev lackluster demand that we've seen
of late.
Speaker 3 (11:53):
This has greenbod technology time now for talking tech.
Speaker 4 (12:10):
First up, Nintendo says a successor to its seven year
old Switch game console is on the way now. The
announcement is course coming after its forecasts a bigger than
expected profit decline for the current fiscal year. Now, in
a post on x, the company's president said the new
device is set to be announced in the coming year.
Fans investors they have long been waiting on this news
of a succession plan for the twenty seventeen gadget, which
(12:31):
has sold more than one hundred and forty one million
units since his debut. Plus, chip maker Nvidia is investing
in UK autonomous driving tech startup Wave in a one
point zero five billion dollar funning round. The venture is
actually led by SoftBank Group and existing back of Microsoft.
Is one of the largest ever for a European AI company. Now,
the cash injection underscores that continued DEMANDRAI, especially among the
(12:52):
auto's industry. Valuation of Wave not disclosed. Meanwhile, talking of
evs and autonomous vehicles. Tesla faces in July first dead
lie to submit information to US regulators our concerns about
its autopilot system now the electric car make it issued
a recal remember of over two million vehicles back in
December or reports of drivers crashing while using the future.
The National Highway Traffic Safety Administration says it has opened
(13:15):
up a query as to whether it has a software
update was sufficient in preventing crashes. Now today is the
Special Competitive Studies Project and it's kicking off its first
ever AI Expo for national competitiveness over in Washington. I
sat down with the SCSP chair and former Google CEO
Eric Schmidt to discuss how the US is going on
(13:38):
in the AI race.
Speaker 9 (13:40):
Well, the good news is the US is way ahead
of China and everybody else, and I think that's going
to continue for a while. To me, national competitiveness is
the challenge for the next ten or twenty years, because
the Chinese are really focused on dominating certain industries and
we need to compete with.
Speaker 10 (13:56):
Them and make sure we win.
Speaker 9 (13:58):
In the case of artificial intelligence, we are well ahead
two or three years. Probably we have China, which in
my world is in eternity. I think we're in pretty
good shape.
Speaker 10 (14:08):
And the crazy.
Speaker 9 (14:10):
Valuations, all the money, all the new experimentation, this sort
of enormous adoption of AI that's occurring. We have a
lot of implications on society and very good for business.
Speaker 4 (14:21):
What about, well, ultimately the pace of regulating artificial intelligence,
is there any risk that we stifle innovation and so doing?
Speaker 9 (14:31):
There's always a risk of premature regulation. My simplest example
there is Europe. I've spent ten years trying to convince
Europe to actually innovate instead of regulate, and they just
keep regulating. The current EU ACTAI EU act is essentially regulation,
not investment in the future. You can see that Europe
is highly unlikely to be relevant. China, of course, is
(14:53):
struggling because of chips shortages and so forth. All that
they're ready to win if they can get the harder
that they need.
Speaker 10 (15:00):
And the rest of the world is not focused enough
on this.
Speaker 9 (15:03):
So the good news from myself my position in terms
of America, here we are in DC for national competitiveness.
Speaker 10 (15:10):
We're the likely winner if we don't screw it up.
Speaker 3 (15:12):
I'm really interested.
Speaker 4 (15:13):
You say, perhaps China is being pushed behind because of
its lack of access to chips.
Speaker 3 (15:17):
Are we currently navigating that new once Well.
Speaker 9 (15:20):
Well, the Trump administration followed by the Biden administration did
a good job in getting those rules in place.
Speaker 10 (15:26):
It's a good.
Speaker 9 (15:27):
Example and not a common example of how a targeted
intervention has a positive measured outcome from the standpoint of
the national security So I think we're good there. It's
very important and I led the National Security Commission on
Artificial Intelligence a few years ago for the Congress. It's
(15:48):
very important that we get more basic money out of
the government for basic research.
Speaker 10 (15:52):
We're building intelligence.
Speaker 9 (15:54):
We're building a new form of non human intelligence that
will change the world forever in a good way. Furthermore,
it needs to be done with our partner countries. These
are the five Eyes of the UK, that sort of
thing some of European countries. And also it needs to
be done with American values. So using China as the bogeyman,
imagine if they were in charge of the Internet and
(16:15):
they were in charge of the rules, and you imagine
how very different your experience as a user on the
Internet would be today. You can show up, you can
be anonymous, you can do whatever you want within reason
that kind of freedom is central to the spirit of
the Internet, and it's important to be preserved.
Speaker 4 (16:31):
Talking about a bogeyman, and a Chinese related bogeyman, TikTok
became the bogaman that many are now trying to regulate.
Speaker 3 (16:38):
To indeed ban, or to sell.
Speaker 4 (16:40):
There's been some reporting that you've been interested, alongside Minution
in potentially purchasing us TikTok.
Speaker 3 (16:48):
Would you still be.
Speaker 10 (16:51):
I'm not currently looking at that. I looked at it
for a while.
Speaker 9 (16:55):
My personal view on this is you're better off regulating
than banning or a judicial action. All the big tech
companies are now in the hands of the DOJ in
various legal fights. I would prefer to see a regulatory
regime that is sort of has the right incentives and
the right prohibitions.
Speaker 10 (17:13):
For all of these things.
Speaker 9 (17:14):
My own view of TikTok is that TikTok is not
really social media, it's really television, and that you can
regulate television by the equivalent of the equal time rule.
But somehow we're not having that conversation.
Speaker 3 (17:25):
What's interesting is, of.
Speaker 4 (17:26):
Course, you say, many big tech companies are currently well
entangled from a time perspective with the DOJ. One of
them being where we know you howm from, of course,
the previous CEO of Google. Where do you rate from
a personal perspective, where Google is in the AI competition race.
Speaker 9 (17:43):
Well, it's interesting that almost all of the technology you're
seeing today was invented at Google about five to ten
years ago. And it's one of the sort of great
things that during that period Google had a roughly, in
my estimate, two thirds of the world's talent in AI
was working at so Google had a very very strong
head start. I think Google is a complicated place, is
(18:06):
a lot going on. Open Ai in particular, came out
with GPT three three point five and four and did.
Speaker 10 (18:12):
A fantastic job.
Speaker 9 (18:14):
I think that was the competitive nudge that has gotten
Google back in the game. What I like now is
you have these two huge companies, Microsoft and open Ai
together and Google Google Alphabet again operating together, and you
have them putting billions of dollars hardware and enormous software
teams to invent this new future. This is not to
(18:35):
take away from Anthropic, another competitor. Obviously, whatever Elon is
doing with x dot ai, he's raising a huge amount
of money, and Meta has recently released a four hundred
billion parameter modelers and the.
Speaker 10 (18:47):
Process of releading it.
Speaker 9 (18:48):
That looks really, really good, So that competition is the
right answer to the regulators and to everyone's question. Competition
brings out enormous value to consumers. And eventually people will
see this and they'll say, oh my god, look at
what this does.
Speaker 10 (19:05):
And it's free.
Speaker 9 (19:06):
And of course all that money was paid out of
the markets, billions of dollars that's going in right now,
and they'll monetize it somehow.
Speaker 4 (19:14):
Omer Google CEO Eric Schmidt there and of course the
current chair of the SCSP coming up. We're going to
continue the conversation on artificial intelligence competition with the CEO
of that organization, the SCSP. Meanwhile, let's just stick with
China and national security now. It was likely behind a
recent hack into the personal data a British Armed Forces.
Speaker 3 (19:32):
Personnel scored into sources.
Speaker 4 (19:34):
The hack has breached the payroll system used by Britain's
Defense Ministry and obtain the names and bank account details
of members of the Army, the Royal Navy, the Royal
Air Force and some veterans. This comes as Chinese President
Husion Thing is actually visiting Europe this week. To attempt
to smooth out relations with the European Union, which has
been adopting a far more hawkish position on Beijing. Now,
(19:55):
let's just return to some corporate news for you now
and some shares that we want to be watching and
currently on the move.
Speaker 3 (20:01):
Now, AWS looks.
Speaker 4 (20:03):
Like it's we're pouring money into Asia, but it's Singapore
where they're focusing. They committing nine billion dollars to double
Singapore's cloud push. In particular, the Cloud Operator is the
latest global tech company to actually target the Singapore region
and it's growing in Southeast Asia to diversify away from
guesswhere China. We're upper quarter of a percent on Amazon.
This is Bloomberg Technology. Welcome back to Bloomberg Technology. And
(20:38):
Caroline had in New York. Let's check in on these
markets because well, after a strong three days of gains,
best since November, we're still on a March high and
that's that one hundred powering up some three tenths of
a percent. This is we still perhaps anticipate room for
the FED to cut throughout the rest of the year.
We're hearing from Neil Kashkari a little bit later. Tenure
yield currently off by six basis points. And when we've
(20:58):
got a lot of auctions coming this and we've got
a load of three year debt on the table. Today
we're at four point four to two, let's call it
on the ten year. Bitcoin managing to turn around nicely.
Now we're up nine tens percent. It's eight hundred and
seventy seven. Little bit of a scapetite creeping into crypto.
Speaker 2 (21:12):
Move on.
Speaker 4 (21:13):
Have a look at some of the individual movers that
we're looking on the day, and there's been a raft
of earnings, some of them slightly more cautious than the
market wanted to see, particularly when it came to subscriber growth.
For Disney, we're just down about almost ten percent. Maybe
some profit taking coming off the table for Disney. We're
seeing Data dog down hard, off by eleven percent. This
New York company, again many had anticipated some strong growth
because hyperscalers have been showing some growth in their earnings,
(21:35):
maybe didn't feed across in the way that the market
had anticipated. Were off by some eleven percent. In Video
off by one point seven percent. Chip maker Well, I mean,
we're seeing druck and Miller reportedly saying he's actually winding
down well, taking off some of his chips, his bets
on n video and reducing some of his holding in
that particular tech stock. We're off just by one point
seven percent, door dash off by two percent. Interesting moves
(21:58):
coming from Uber and Instacart to take on doors. We're
seeing restaurant delivery is being folded into Instacart. They're going
to be adding Uber its menus and tracking to its apps.
Let's talk about that because well, Bloomberg's Emily Chang spoke
with the instacut CEO Pretty Simo and Uber CEO Dar
Kososhahi on the tactics here.
Speaker 3 (22:16):
Take listen.
Speaker 11 (22:17):
We have heard from instagralt customers that they come to
the instagrat app to order our groceries for the week,
but sometimes they also want the NFL the night. And
so we wanted to enter restaurants delivery without destructing ourselves
from our number one priority, which is grocery, and so
we looked for a partner that would allow us to
from day one have hundreds of thousands of restaurants available
(22:42):
to instagult customers on the Instagart app. And we're very
excited to be doing sponarpship with you.
Speaker 4 (22:47):
Berries Dara, instacart is a competitor, given that Uber is
pushing into grocery and of course retail, why cross enemy lines.
Speaker 1 (22:57):
Well, certainly instacart is a very strong compartit as it
relates to grocery. But for us, it was an opportunity
to expand essentially the Uber eats business, especially into the
suburban markets where instacart is particularly strong, families, et cetera.
You know, Uber has historically had a real strength in
(23:20):
the cities, the younger affluent customers who are in the cities.
That's where Rocher originally came from. And as we've expanded
into Uber Eats, Uber eats is much stronger in city
centers than let's say, suburbs, and we thought that the
opportunity to put our brand and our service in front
(23:41):
of the incredible instarecart customer base in a way that
is a terrific experience will be good for business but
also really good for our restaurant partners. You know, what
Uber eats is all about is bringing more business to
our restaurant partners, bringing more opportunities to earn for our careers.
(24:02):
And we're certainly hoping that those instacar customers are big.
Speaker 4 (24:06):
Tippers Fiji investors seem to like Uber's push into grocery.
Speaker 3 (24:11):
Why give them a foot in the door.
Speaker 11 (24:14):
Well, I think there are a lot of companies that
compete in one area and collaborate in another, and this
is a good example where on the restaurant front we
found a lot of alignment and we think that this
is going to be a highly beneficial for instagled customers.
Now we have the leading selection in grocery fifteen hundred
(24:35):
retailers eighty five thousand stores in grocery combined with hundreds
of thousands of restaurants thanks to this ownership, and we're
also making our instaglt plus membership more valuable. So we
think this is a win win all around. And when
we see these kinds of win wins, we jump on them.
Speaker 12 (24:52):
So tell us a little bit about the logistics here,
how exactly this is all going to work.
Speaker 3 (24:56):
Will customers be redirected to Uber Dhara? Part of the
order is Uber handling? How are you splitting revenue and fees?
Speaker 1 (25:07):
Yeah, I can get started in MPG, can continue. So
the experience is an instacart experience. And the way I
put Emily is that if you go to the Uber
Rides app. Right now, you see kind of a you know,
the original rides experience that you have, but there's also
an eats experience that is essentially looks like it's built
(25:29):
into the Uber Rides app where you can have the
eats experience inside of rides. We've taken that technology that
we perfected as part of the platform that we're building
an Uber and we're extending it in partnership with Instacart.
So the branding is going to be joint branding, but
(25:49):
it's the look and the field and the experience is
going to feel a lot like Instacart. So I think
the instacr user is going to sit with an Instacart,
and I think the experience is going to be an
experience that's quite consistent with what those users are accustomed to.
Speaker 4 (26:06):
Uber CEO Darakles Forshahi there as well as the cat
CEO Fugisimo, along with our own Emily Chang. Let's return
to Washington now, though, because the Special Competitive Studies Project
is kicking off its first ever AI expo for national competitiveness.
I sat down with the SCSP chair and of course
the former Google CEO Eric Schmidt to discuss.
Speaker 9 (26:27):
To me, national competitiveness is the challenge for the next
ten or twenty years because the Chinese are really focused
on dominating certain industries and we need to compete with
them and make sure we win.
Speaker 10 (26:40):
In the case of artificial intelligence.
Speaker 9 (26:42):
We are well ahead two or three years probably have China,
which in my world is in eternity.
Speaker 10 (26:48):
I think we're in pretty good shape.
Speaker 4 (26:50):
And pleased to say we can dig in on this
conversation with the CEO of a special competitive studies project
Eli byrectari eally, thank you for joining us just ahead
of the Key expo unveiled Well, and I'm interested in
is that, ultimately how optimistic you are of China visa v.
Speaker 3 (27:05):
The US, Eric Schmidt. They're saying we are years ahead
of China. What makes you so confident of that?
Speaker 13 (27:12):
Well, I mean has been pretty clear about we want
to They have They're putting the enormous resources, their strategy,
they have their national champions and in short, a lot
of land. When it comes as I said, we are
ahead of China, that makes us, uh slow down.
Speaker 12 (27:36):
I think we need to continue investing. We need to
continue bring public and try the sector together because otherwise
a competitor that has a civil future. In other words,
the reality works Landing Love we trate Settler, you know,
getting ahead of these technologies.
Speaker 3 (27:52):
Ayah, I'm so sorry.
Speaker 4 (27:53):
We've got some technical difficulties on the line and we're
hearing an echo. Will be back to you in a moment, really, Tari,
he's a Special Competitive Studies Project CEO.
Speaker 3 (28:01):
This will be my technology. Let's get back to Washington.
Speaker 4 (28:20):
But pleased to say the CEO the Special Competitive Studies
Project is still with US eally, Tari, thank you Eli
for well.
Speaker 3 (28:26):
Working through some of these tech issues.
Speaker 4 (28:27):
But more broadly, I want to get to the tech
issue in the use of generative AI within basically the
area of particularly when it comes to intelligence agencies. This
is an area that you've got a awful lot of
experience in. Are we seeing an adoption of generator AI
within our own intelligence agencies in the US?
Speaker 12 (28:45):
So, I think, like with any previous technology trus traumative era,
I think our intelligence community is adopting. You could argue
that two steps forward, one step backward, but I think
everybody recognizes these technologies are going to be so powerful
that our intelligence cuity needs to adopt Now, as you know,
intelligence community runs through a strict codes of how they
(29:06):
buy and how they use these technologies. Obviously there are
privacy related issues about using these technologies. So I think
everybody recognizes how these are important technologies that we need
to adopt for the intelligence missions purposes, and I think
everybody's making it some kind of progress in the area
of their mission.
Speaker 4 (29:23):
Of course, you were a chiefer staff to the National
Security Advisor, a master, so someone who has a lot
of experience in this field. Going back to more broadly,
what the Special Competitive Studies Project is doing right here
right now, as you're also trying to find what would
stymy the competitiveness of the US. One issue with generative
AI is access to energy, access to chips. Where are
(29:43):
you thinking of thought leadership of ensuring that US stays
ahead when it comes to energy adoption.
Speaker 12 (29:49):
Yeah, I mean, look, the chipsidle was the first problem
leading legislation in many years in which you had such
a bipotisan support that we as a country dedicated fifty
two billion dollars to bring back and build in this
country some of the manufacturing capabilities that we've lost for
the last twenty plus years. So I think hardware and
in this instance chips are really important. I think now
(30:11):
we are uncovering that energy demand is going to be
a true capability that you need to build these next
generation AI technologies. I think there are several paths we
can take as a country. You know, there's a lot
of energy. There's a lot of energy around the fusion.
I would argue, as we have a lot of companies
here at AI National Competitives explo in DC that presents
(30:32):
some of the key fusion companies. We have other pathway
stores getting through the energy. But I think AI could
help us transform also the energy resources we have energy,
energy sources and diversify, you know, going forward because of
the demands and because of the means you have, you know,
to get to the next generational BUFO conations.
Speaker 4 (30:51):
When you're bringing together government institutions, you're bringing to other academics,
you're bringing together corporates, what outcome ultimately do you want?
Speaker 3 (31:00):
Do you think we are firing on all cylinders.
Speaker 4 (31:01):
When it comes to discussion of how to harness this
leap forward in technology right now?
Speaker 12 (31:08):
So I don't think we are. I mean that's why
I think we organized this expert because innovation happens in
the pockets. You know, we have like most of the
innovation happening in the East Coast or West Coast. And
then you have in Washington. You know, you have the
federal agencies that are doing two things. Both trying to
adapt these technologies for the purposes of what they do daily,
whether it's Health and Human Services or HUMA or the
(31:29):
Partner of Defense. But also they're all subdrafting policies and
how we use these technologies. So the purpose is really
to bring as we call Hall of Nation in Nations
capital where they can talk, they can exchange ideas, they
can exchange business cards, and ultimately here and talk about
the benefits and challenges of all these technologies and how
do we move fast in adopting all of them for
(31:51):
the next five to seven years.
Speaker 4 (31:53):
While we wish you well on that bringing together of
academics and government and see what the outcome is. Ili Baktari,
we thank you so much for your time today, Special
Competitive Studies Project CEO over there in Washington, theaix BO. Meanwhile,
let's just talk about what Microsoft has been doing. It's
deployed a generative AI model entirely divorced from the Internet,
(32:13):
saying that US intelligence agencies can now safely harness the
technology to analyze top secret information. Most AI models like
CHATGBT rely on the cloud services to learn and infer
patterns from data, but this is the first time a
major large language model can actually operate fully separated from
the Internet, which allows spy agencies to use AI while
(32:33):
avoiding the risk that data could leak out into the open.
This whole narrative is one we're going to stick with
now because we're going to talk more broadly about cybersecurity.
The RSA conference is in full swing over in San Francisco.
Bring together the world's top cybersecurity government, business leaders, and
they're going to dissect and strategize on the best practices
to tackle such new threats. Let's bring in Palo Alto
(32:54):
Networks chief product officer Lee Clerch for more and Lee,
I can imagine once again, AI is the first topic
of conversation.
Speaker 3 (33:01):
What's winning out in the battle of.
Speaker 4 (33:03):
Well, bad actors adopting it or the cybersecurity contingent adopting it.
Speaker 2 (33:09):
Oh, you're absolutely right, the attackers.
Speaker 14 (33:13):
You know, when chat GPT first launched, the first thing
they started doing was figuring out how they could leverage
AI to their advantage, and the first thing we did
in cybersecurity is we started figuring out how we could
leverage AI to counter that. And today we've had a
series of AI security announcements focused on how we bring
precision AI to combat these attackers that are going to
(33:35):
be using AI everywhere.
Speaker 4 (33:37):
So you bring out, ultimately the things that people put
in their arsenal to be able to fend off such attacks.
Can you just give us a size and scope of
how much we are seeing more cybersecurity issues threats amount
because of generative AI.
Speaker 14 (33:51):
Yeah, it's hard to trace its specifically to generative AI.
We see millions of new attacks launched every single day.
We see this in our telemetry, we see this in
our machine learning models, our AI models that are detecting
these attacks in real time, and all of that translates
into billions of attacks being blocked every day. Now, how
(34:13):
much of that is specifically the results of generative AI
versus more traditional mechanisms. It all starts to kind of
blend together, but it definitely points to the increase in scale,
and we're also seeing, maybe even more importantly, an increase
in sophistication of these attacks where attackers are able to
use generative AI to improve their chances of actually carrying
(34:36):
out a successful attack.
Speaker 4 (34:38):
Of course, regulation has tried to keep a pace of
this and disclosure, the SEC in particular mandating basically prompt
disclosure of whenever a company a corporate has indeed had
a material incident. How are you seeing that prompting the
leaders in security within the corporates to come to you
to ensure that they've invested in the right product at
the right time.
Speaker 2 (35:00):
Great question.
Speaker 14 (35:01):
Actually, I see a lot of value in some of
these new regulations in driving investment towards cybersecurity, the necessary
investment quite frankly given the security landscape, and a lot
of these measures are oriented toward making sure that organizations
have the right security capabilities. Increasingly, that means the need
(35:22):
to be real time in their security operations and when
something does happen prompt disclosure, which of course is really
good for the industry. It helps everyone understand what's happening
so we can all learn from it quickly. It also
makes sure that the end consumer understands what's happening and
can take necessary actions if needed. So all of that
(35:43):
that'll culminates in the sort of the other side of cybersecurity,
which is this is a battle we can win. I'm
in cybersecurity, but I'm actually very optimistic about the benefits
of AI and other technology benefiting those of us who
are all trying to defend organizations around the world, and.
Speaker 3 (36:02):
You've been trying to defend it since two thousand and six.
Speaker 4 (36:05):
Over with the Palo Alto Networks in the product area,
chief product Officer Lee Cleric, leaving us with a bit
of optimism there.
Speaker 3 (36:11):
We thank you from New York and San Francisco. This
is the bluemoid technology.
From the heart where Innovation, money and power Collie in
Silicon Valley, NBN.
Speaker 2 (00:07):
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 3 (00:24):
And Caroline Hyde of Bloomberg's world headquarters in New York.
Ed Ludlow, he's off. This is Bluemeg Technology. Coming up.
Speaker 4 (00:30):
We'll bring you all the details from Apple's let Loose
product launch as a company brings us.
Speaker 3 (00:35):
The new AI ready iPads, and we'll hear from the
CFO of Disney's shares full hard.
Speaker 4 (00:40):
After a cautious outlook for streaming subscribers plus Uber and Instacart,
they team up to take on door Dash. Our interview
with both of the company's CEOs later this hour.
Speaker 3 (00:51):
First, let's check in on these a marngres.
Speaker 4 (00:53):
We turned to the green even on the NASDAC after
really some strong days that we've had for the last
three days.
Speaker 3 (00:59):
I mean remember on money we had the best three.
Speaker 4 (01:01):
Day run for stocks more broadly that we'd had well
since November. I'm going to bring you back to the
benchmarks for a moment. I'll get onto these individual players
in a moment where we are seeing the NASDAC on
the higher side, we've seen bomb markets actually rally as
well ahead of that three year auction.
Speaker 3 (01:15):
We're also seeing, of course, the world of crypto.
Speaker 4 (01:17):
Just keeping an eye on what's happening with the world
of bitcoin at the moment, because we have of course
seen well in up about one and a quarter of
a percent, a little bit of risk appetite there in
the crypto land. Now, let's take it onto some of
the individual movers that we've had on the day.
Speaker 3 (01:29):
Because this has been thick and fast.
Speaker 4 (01:31):
Earnings still coming of course after the bell yesterday and
also this morning Disney, as we're going to be getting
to this company in a moment down more than nine percent. Look,
some of the numbers were pretty strong. We're seeing still
a focus on bringing about profitability at this business by
Bob Byger. However, subscriber numbers looking to be a more
cautious outlook and forecast coming from the CFO.
Speaker 3 (01:51):
The market falls hard on that.
Speaker 4 (01:52):
Palenteer came after the bell yesterday, and look, we're once
again seeing some rapid growth, but not as fast as
people want to see, particularly with the US commercialization growth
that we're seeing for Palenteer. It came after the bell yesterday,
and look, we had seen seventy percent in previous quarters
were down to just oh but a forty percent increase
in the overall sales growth, So a little bit of
caution and taking off of the market thereafter the valuation
(02:14):
and run up. I'm looking at Apple though, up four
tens percent, the juggernaut unrailing some new products, this one
all about the iPad, an AI focused iPad pro and
a larger iPad Air. Want to break down the latest
of what was just occurring in the last hour or so.
Speaker 3 (02:29):
Rumberg's Dana Wellman were we impressed by the lineup. We've
been waiting a long time, you know.
Speaker 5 (02:34):
It's interesting, as you say, this is the first iPad
news we received from the company in almost two years,
perhaps a year and a half, and the announcement felt
incomplete to me. This announcement was as I think we expected,
all about the hardware. The iPads are thinner than before,
they're lighter, they're faster as you'd expect, and Apple did
make a hint at the device's AI capabilities. There's so
(02:58):
much that is still unanswered, clearly about the software experience,
and as I imagine everyone is thinking, the AI capabilities,
the company isn't expected to get into any of that
until it's annual Software Developer conference, which usually takes place
in early June. So right now we've got some promising notes.
We know a lot about the hardware. We're still wondering
(03:18):
in a sense, what can it do fully with the
software and who is it for? And I only say
that because the devices are so increasingly laptop like. Yes,
but Apple also sells laptops, which we're not mentioned today.
Speaker 3 (03:30):
Yeah, So I.
Speaker 4 (03:30):
Mean, for me as a commuter, an iPad makes an
awful lot of sense. But if you're a designer, if
you're someone who's wanting the power of a Mac, you
ever going to be getting this and an iPad?
Speaker 3 (03:41):
Or who do you think the overall consumer is?
Speaker 5 (03:43):
From real perspective, I think these are perhaps laptop replacements
or secondary laptops, if you will. It's interesting to me
the higher end iPads here are the first iPads that
have o LED screens, and this is just in shorthand
a much more advanced screen technology than even the MAX
(04:04):
have right now. Some competing PC makers do have laptops
that have old screens, but not Max. So if you're
looking for a laptop like experience with a really superior display. Actually,
the iPads might be a better choice than some max.
Speaker 4 (04:17):
People are liking the stylist, liking the ability with which
you can interact with it as well. Overall, though we've
been waiting and waiting, do you think ultimately the fact
that we've been sort of a drought of new iPads
will just galvanize demand going into this product?
Speaker 5 (04:31):
Apple would certainly certainly hope. So the most recent quarter
was particularly disappointing for Apple in terms of iPad sales,
And it would make sense when you remember that the
hardware really was so stale, And consumers aren't stupid, They
do know, they understand something about the rhythm of iPad
and Apple update cycles in general. And I wouldn't be
(04:52):
too keen on buying something that hadn't been updated in
over a year, knowing that Apple is likely to have
an update around the corner just about any time.
Speaker 4 (05:01):
And then we have the handwringing issue of Apple being
behind the curve, so to speak, when it comes to
artificial intelligence. Many would say, look, just it always comes
in a little bit slower, but then comes with strength.
Are you feeling from an investor perspective, but from a
user perspective that AI on an iPad or AI on
device is really going to be a winning formula for Apple.
Speaker 5 (05:22):
Yes, I expect Apple to have some interesting news. I
don't know what it's going to be, but I do
believe Apple is going to be talking quite a bit
about AI and it's coming conference. I also think, to
some extent, this is a little bit about marketing and
the language that Apple has chosen to use. I remember
there was a different competing software conference, it may have
(05:44):
been Google about a year ago, and they would not
stop saying AI. You can choose to say AI over
and over again. Does that make it true that you
have invested more in AI and that you're doing a
better job. I think a lot of what Apple already
has in its products is to an extent AI powered.
Even if they're not using the words AI, I do
think they have more to share and need to say more,
(06:07):
if not to actually catch up, to at least at
the very least correct the perception that they have lagged
behind the competition.
Speaker 3 (06:15):
A bit of pring, a little bit of storytelling here.
Speaker 4 (06:17):
When you've already got the M four ship in there,
which makes it AI ready. There, we have the stylist
that we can currently see. Daniel Woman so great to
have you on the same launch day from Bloomberg.
Speaker 3 (06:27):
We thank her.
Speaker 4 (06:35):
After that board fight, there was one. We now see
some money coming off the table of Disney when it
comes to its share price because earnings are out and
there was some caution ahead when it comes to subscriber growth.
But let's dig into where the numbers actually did manage
to beat. I'm looking at earnings for share looking strong
for Disney overall. We're also seeing the fact that they
are on course to mainly focus on profitability come the
(06:56):
fiscal next quarter. Even by the fourth quarter, you can
see profit ability in their streaming unit and we're seeing
those still by seven point four percent over the last
two trading days for Disney, and a lot of this
is coming because there's still a lot of weakness and
TV in cable. Of course, they have the twin strikes
that impacted the amount of revenue that they're getting overall
from their movies, and maybe we're seeing well a steer
towards a slowing and insatiable demand to be getting to
(07:20):
those parks and on those boats that Disney has as well.
Speaker 3 (07:23):
We spoke the CFO Hugh.
Speaker 4 (07:24):
Johnston a little bit earlier and just hear his cautious take.
Speaker 6 (07:28):
The quarter was really a strong one for US, seventeen
percent of I growth, thirty percent EPs growth.
Speaker 2 (07:34):
That's what led us to raise guidance.
Speaker 6 (07:35):
To twenty five percent EPs growth for the full year,
which is obviously quite strong.
Speaker 2 (07:40):
Two big stories I think here. Number one, you were just.
Speaker 6 (07:43):
Talking about our experiences business was up ten percent on
a revenue basis, twelve percent on an a.
Speaker 2 (07:50):
Y basis, and the park's.
Speaker 6 (07:52):
Business was actually up thirteen percent on OI, So we
do feel.
Speaker 2 (07:56):
Good about that.
Speaker 6 (07:57):
Obviously, I watch other stocks report and seen the value
consumer is really struggling a bit and making choices right now.
Speaker 2 (08:04):
We're not really seeing as much of that in our
portfolio of products.
Speaker 6 (08:09):
The other positive for US is obviously the streaming service.
Last year we lost about six hundred million dollars. This
year we're about break even and we saw twelve percent
revenue growth, So we're encouraged by the progress we've made
in that business in a relatively short period of time.
Speaker 7 (08:25):
Hugh, you said that you're not seeing that kind of
price sensitivity. How much could you increase prices in from here?
Speaker 6 (08:30):
It's a great question we took prices up a little
bit in the beginning of this year and didn't really
see much of an impact. So as to what the
future brings, we're obviously very judicious with the way that
we price. We want to provide access to as many
guests as we possibly can, but we do believe that
the great experiences we provide people are willing to pay for.
Speaker 2 (08:53):
Hugh.
Speaker 7 (08:53):
Over the past six months, we've been talking about the
cost cutting operations in Disney. Have we finished some of
the shrink have we finished the pairing back and are
you back on some sort of growth trajectory.
Speaker 6 (09:04):
We are definitely back on a growth trajectory. That said,
we're always going to be looking hard at our cost structure,
in particular looking to reduce costs where perhaps they add
less value than they used to, and redeploy some of
that money back into the business so that we can
actually grow the balance of the business. So I think
that's a never ending exercise of looking for ways to
(09:24):
be more efficient as a company so that you can
invest in your future.
Speaker 7 (09:27):
When you talk about growing, where is that growth focused on?
Speaker 2 (09:30):
Geographically?
Speaker 7 (09:31):
We know that in the US you've got a very
strong parks business. In Europe there also is a parks presence.
But in Asia, in particular in China, that has been
a growth area. Is it still how much can that
be a bright spot at a time of increasing geopolitical tensions?
Speaker 6 (09:46):
Yeah, I do think not just China, but all of
Asia represent growth opportunities for us, both in terms of
the streaming service and select markets as well as in
terms of the parks and cruises business. So we do
see good growth oport tunities there. Europe and Latin America
continue to be good growth opportunities. And make no mistake,
North America we're not done growing yet. We still think
(10:07):
there are terrific opportunities here for us right at home.
Speaker 8 (10:09):
When it comes to Asia Pacific, is it domestic demand
within those countries, specifically China or is it tourists in
the region.
Speaker 6 (10:17):
Combination of botho't I wouldn't tie it to one or
the other.
Speaker 2 (10:20):
I think it's a combination of both.
Speaker 8 (10:21):
And when you look at China, to Lisa's point, you
know we're going into a very heated political election coming
up in November, very hot rhetoric regarding China. Is it
becoming more challenging to deal with authorities in Beijing and
business on the ground. Given the increased geopolitical tensions, it.
Speaker 2 (10:43):
Has not been for us.
Speaker 6 (10:44):
You know, one of the benefits of what we do
for a living is, you know, we make people smile.
We bring them happiness, right, we bring them the most
magical place on earth. Candidly, the government's investing in infrastructure
to make it easier for guests to get to.
Speaker 2 (10:58):
And from the park.
Speaker 6 (10:59):
Were containing to invest in that park in order to
drive growth.
Speaker 2 (11:03):
It's doing better now than it ever has.
Speaker 6 (11:05):
So we're the fortunate beneficiaries of bringing people joy in
a world that needs it.
Speaker 4 (11:11):
Hugh Johnston Disney CFO there coming up. Actually, we're going
to be hearing from the former Google CEO, Eric Schmidt
on China as well as his think tank holds its
first ever AIXPO on competitiveness.
Speaker 3 (11:23):
In that field.
Speaker 4 (11:25):
Meanwhile, let's just have a little little look on what's
happening on the sharefront of Infinian. Now here's a chip
focused business that's looking at China as well, looking.
Speaker 3 (11:34):
At auto demand.
Speaker 4 (11:36):
Basically, it's chips within evs saying China is actually bottoming
the seeing healthy demand there.
Speaker 3 (11:40):
For Infinian product products. We're not more than twelve percent.
Speaker 4 (11:43):
Yet another key chip designer or maker or builder that
is showing that maybe we've just seen the botted out
in terms of the ev lackluster demand that we've seen
of late.
Speaker 3 (11:53):
This has greenbod technology time now for talking tech.
Speaker 4 (12:10):
First up, Nintendo says a successor to its seven year
old Switch game console is on the way now. The
announcement is course coming after its forecasts a bigger than
expected profit decline for the current fiscal year. Now, in
a post on x, the company's president said the new
device is set to be announced in the coming year.
Fans investors they have long been waiting on this news
of a succession plan for the twenty seventeen gadget, which
(12:31):
has sold more than one hundred and forty one million
units since his debut. Plus, chip maker Nvidia is investing
in UK autonomous driving tech startup Wave in a one
point zero five billion dollar funning round. The venture is
actually led by SoftBank Group and existing back of Microsoft.
Is one of the largest ever for a European AI company. Now,
the cash injection underscores that continued DEMANDRAI, especially among the
(12:52):
auto's industry. Valuation of Wave not disclosed. Meanwhile, talking of
evs and autonomous vehicles. Tesla faces in July first dead
lie to submit information to US regulators our concerns about
its autopilot system now the electric car make it issued
a recal remember of over two million vehicles back in
December or reports of drivers crashing while using the future.
The National Highway Traffic Safety Administration says it has opened
(13:15):
up a query as to whether it has a software
update was sufficient in preventing crashes. Now today is the
Special Competitive Studies Project and it's kicking off its first
ever AI Expo for national competitiveness over in Washington. I
sat down with the SCSP chair and former Google CEO
Eric Schmidt to discuss how the US is going on
(13:38):
in the AI race.
Speaker 9 (13:40):
Well, the good news is the US is way ahead
of China and everybody else, and I think that's going
to continue for a while. To me, national competitiveness is
the challenge for the next ten or twenty years, because
the Chinese are really focused on dominating certain industries and
we need to compete with.
Speaker 10 (13:56):
Them and make sure we win.
Speaker 9 (13:58):
In the case of artificial intelligence, we are well ahead
two or three years. Probably we have China, which in
my world is in eternity. I think we're in pretty
good shape.
Speaker 10 (14:08):
And the crazy.
Speaker 9 (14:10):
Valuations, all the money, all the new experimentation, this sort
of enormous adoption of AI that's occurring. We have a
lot of implications on society and very good for business.
Speaker 4 (14:21):
What about, well, ultimately the pace of regulating artificial intelligence,
is there any risk that we stifle innovation and so doing?
Speaker 9 (14:31):
There's always a risk of premature regulation. My simplest example
there is Europe. I've spent ten years trying to convince
Europe to actually innovate instead of regulate, and they just
keep regulating. The current EU ACTAI EU act is essentially regulation,
not investment in the future. You can see that Europe
is highly unlikely to be relevant. China, of course, is
(14:53):
struggling because of chips shortages and so forth. All that
they're ready to win if they can get the harder
that they need.
Speaker 10 (15:00):
And the rest of the world is not focused enough
on this.
Speaker 9 (15:03):
So the good news from myself my position in terms
of America, here we are in DC for national competitiveness.
Speaker 10 (15:10):
We're the likely winner if we don't screw it up.
Speaker 3 (15:12):
I'm really interested.
Speaker 4 (15:13):
You say, perhaps China is being pushed behind because of
its lack of access to chips.
Speaker 3 (15:17):
Are we currently navigating that new once Well.
Speaker 9 (15:20):
Well, the Trump administration followed by the Biden administration did
a good job in getting those rules in place.
Speaker 10 (15:26):
It's a good.
Speaker 9 (15:27):
Example and not a common example of how a targeted
intervention has a positive measured outcome from the standpoint of
the national security So I think we're good there. It's
very important and I led the National Security Commission on
Artificial Intelligence a few years ago for the Congress. It's
(15:48):
very important that we get more basic money out of
the government for basic research.
Speaker 10 (15:52):
We're building intelligence.
Speaker 9 (15:54):
We're building a new form of non human intelligence that
will change the world forever in a good way. Furthermore,
it needs to be done with our partner countries. These
are the five Eyes of the UK, that sort of
thing some of European countries. And also it needs to
be done with American values. So using China as the bogeyman,
imagine if they were in charge of the Internet and
(16:15):
they were in charge of the rules, and you imagine
how very different your experience as a user on the
Internet would be today. You can show up, you can
be anonymous, you can do whatever you want within reason
that kind of freedom is central to the spirit of
the Internet, and it's important to be preserved.
Speaker 4 (16:31):
Talking about a bogeyman, and a Chinese related bogeyman, TikTok
became the bogaman that many are now trying to regulate.
Speaker 3 (16:38):
To indeed ban, or to sell.
Speaker 4 (16:40):
There's been some reporting that you've been interested, alongside Minution
in potentially purchasing us TikTok.
Speaker 3 (16:48):
Would you still be.
Speaker 10 (16:51):
I'm not currently looking at that. I looked at it
for a while.
Speaker 9 (16:55):
My personal view on this is you're better off regulating
than banning or a judicial action. All the big tech
companies are now in the hands of the DOJ in
various legal fights. I would prefer to see a regulatory
regime that is sort of has the right incentives and
the right prohibitions.
Speaker 10 (17:13):
For all of these things.
Speaker 9 (17:14):
My own view of TikTok is that TikTok is not
really social media, it's really television, and that you can
regulate television by the equivalent of the equal time rule.
But somehow we're not having that conversation.
Speaker 3 (17:25):
What's interesting is, of.
Speaker 4 (17:26):
Course, you say, many big tech companies are currently well
entangled from a time perspective with the DOJ. One of
them being where we know you howm from, of course,
the previous CEO of Google. Where do you rate from
a personal perspective, where Google is in the AI competition race.
Speaker 9 (17:43):
Well, it's interesting that almost all of the technology you're
seeing today was invented at Google about five to ten
years ago. And it's one of the sort of great
things that during that period Google had a roughly, in
my estimate, two thirds of the world's talent in AI
was working at so Google had a very very strong
head start. I think Google is a complicated place, is
(18:06):
a lot going on. Open Ai in particular, came out
with GPT three three point five and four and did.
Speaker 10 (18:12):
A fantastic job.
Speaker 9 (18:14):
I think that was the competitive nudge that has gotten
Google back in the game. What I like now is
you have these two huge companies, Microsoft and open Ai
together and Google Google Alphabet again operating together, and you
have them putting billions of dollars hardware and enormous software
teams to invent this new future. This is not to
(18:35):
take away from Anthropic, another competitor. Obviously, whatever Elon is
doing with x dot ai, he's raising a huge amount
of money, and Meta has recently released a four hundred
billion parameter modelers and the.
Speaker 10 (18:47):
Process of releading it.
Speaker 9 (18:48):
That looks really, really good, So that competition is the
right answer to the regulators and to everyone's question. Competition
brings out enormous value to consumers. And eventually people will
see this and they'll say, oh my god, look at
what this does.
Speaker 10 (19:05):
And it's free.
Speaker 9 (19:06):
And of course all that money was paid out of
the markets, billions of dollars that's going in right now,
and they'll monetize it somehow.
Speaker 4 (19:14):
Omer Google CEO Eric Schmidt there and of course the
current chair of the SCSP coming up. We're going to
continue the conversation on artificial intelligence competition with the CEO
of that organization, the SCSP. Meanwhile, let's just stick with
China and national security now. It was likely behind a
recent hack into the personal data a British Armed Forces.
Speaker 3 (19:32):
Personnel scored into sources.
Speaker 4 (19:34):
The hack has breached the payroll system used by Britain's
Defense Ministry and obtain the names and bank account details
of members of the Army, the Royal Navy, the Royal
Air Force and some veterans. This comes as Chinese President
Husion Thing is actually visiting Europe this week. To attempt
to smooth out relations with the European Union, which has
been adopting a far more hawkish position on Beijing. Now,
(19:55):
let's just return to some corporate news for you now
and some shares that we want to be watching and
currently on the move.
Speaker 3 (20:01):
Now, AWS looks.
Speaker 4 (20:03):
Like it's we're pouring money into Asia, but it's Singapore
where they're focusing. They committing nine billion dollars to double
Singapore's cloud push. In particular, the Cloud Operator is the
latest global tech company to actually target the Singapore region
and it's growing in Southeast Asia to diversify away from
guesswhere China. We're upper quarter of a percent on Amazon.
This is Bloomberg Technology. Welcome back to Bloomberg Technology. And
(20:38):
Caroline had in New York. Let's check in on these
markets because well, after a strong three days of gains,
best since November, we're still on a March high and
that's that one hundred powering up some three tenths of
a percent. This is we still perhaps anticipate room for
the FED to cut throughout the rest of the year.
We're hearing from Neil Kashkari a little bit later. Tenure
yield currently off by six basis points. And when we've
(20:58):
got a lot of auctions coming this and we've got
a load of three year debt on the table. Today
we're at four point four to two, let's call it
on the ten year. Bitcoin managing to turn around nicely.
Now we're up nine tens percent. It's eight hundred and
seventy seven. Little bit of a scapetite creeping into crypto.
Speaker 2 (21:12):
Move on.
Speaker 4 (21:13):
Have a look at some of the individual movers that
we're looking on the day, and there's been a raft
of earnings, some of them slightly more cautious than the
market wanted to see, particularly when it came to subscriber growth.
For Disney, we're just down about almost ten percent. Maybe
some profit taking coming off the table for Disney. We're
seeing Data dog down hard, off by eleven percent. This
New York company, again many had anticipated some strong growth
because hyperscalers have been showing some growth in their earnings,
(21:35):
maybe didn't feed across in the way that the market
had anticipated. Were off by some eleven percent. In Video
off by one point seven percent. Chip maker Well, I mean,
we're seeing druck and Miller reportedly saying he's actually winding
down well, taking off some of his chips, his bets
on n video and reducing some of his holding in
that particular tech stock. We're off just by one point
seven percent, door dash off by two percent. Interesting moves
(21:58):
coming from Uber and Instacart to take on doors. We're
seeing restaurant delivery is being folded into Instacart. They're going
to be adding Uber its menus and tracking to its apps.
Let's talk about that because well, Bloomberg's Emily Chang spoke
with the instacut CEO Pretty Simo and Uber CEO Dar
Kososhahi on the tactics here.
Speaker 3 (22:16):
Take listen.
Speaker 11 (22:17):
We have heard from instagralt customers that they come to
the instagrat app to order our groceries for the week,
but sometimes they also want the NFL the night. And
so we wanted to enter restaurants delivery without destructing ourselves
from our number one priority, which is grocery, and so
we looked for a partner that would allow us to
from day one have hundreds of thousands of restaurants available
(22:42):
to instagult customers on the Instagart app. And we're very
excited to be doing sponarpship with you.
Speaker 4 (22:47):
Berries Dara, instacart is a competitor, given that Uber is
pushing into grocery and of course retail, why cross enemy lines.
Speaker 1 (22:57):
Well, certainly instacart is a very strong compartit as it
relates to grocery. But for us, it was an opportunity
to expand essentially the Uber eats business, especially into the
suburban markets where instacart is particularly strong, families, et cetera.
You know, Uber has historically had a real strength in
(23:20):
the cities, the younger affluent customers who are in the cities.
That's where Rocher originally came from. And as we've expanded
into Uber Eats, Uber eats is much stronger in city
centers than let's say, suburbs, and we thought that the
opportunity to put our brand and our service in front
(23:41):
of the incredible instarecart customer base in a way that
is a terrific experience will be good for business but
also really good for our restaurant partners. You know, what
Uber eats is all about is bringing more business to
our restaurant partners, bringing more opportunities to earn for our careers.
(24:02):
And we're certainly hoping that those instacar customers are big.
Speaker 4 (24:06):
Tippers Fiji investors seem to like Uber's push into grocery.
Speaker 3 (24:11):
Why give them a foot in the door.
Speaker 11 (24:14):
Well, I think there are a lot of companies that
compete in one area and collaborate in another, and this
is a good example where on the restaurant front we
found a lot of alignment and we think that this
is going to be a highly beneficial for instagled customers.
Now we have the leading selection in grocery fifteen hundred
(24:35):
retailers eighty five thousand stores in grocery combined with hundreds
of thousands of restaurants thanks to this ownership, and we're
also making our instaglt plus membership more valuable. So we
think this is a win win all around. And when
we see these kinds of win wins, we jump on them.
Speaker 12 (24:52):
So tell us a little bit about the logistics here,
how exactly this is all going to work.
Speaker 3 (24:56):
Will customers be redirected to Uber Dhara? Part of the
order is Uber handling? How are you splitting revenue and fees?
Speaker 1 (25:07):
Yeah, I can get started in MPG, can continue. So
the experience is an instacart experience. And the way I
put Emily is that if you go to the Uber
Rides app. Right now, you see kind of a you know,
the original rides experience that you have, but there's also
an eats experience that is essentially looks like it's built
(25:29):
into the Uber Rides app where you can have the
eats experience inside of rides. We've taken that technology that
we perfected as part of the platform that we're building
an Uber and we're extending it in partnership with Instacart.
So the branding is going to be joint branding, but
(25:49):
it's the look and the field and the experience is
going to feel a lot like Instacart. So I think
the instacr user is going to sit with an Instacart,
and I think the experience is going to be an
experience that's quite consistent with what those users are accustomed to.
Speaker 4 (26:06):
Uber CEO Darakles Forshahi there as well as the cat
CEO Fugisimo, along with our own Emily Chang. Let's return
to Washington now, though, because the Special Competitive Studies Project
is kicking off its first ever AI expo for national competitiveness.
I sat down with the SCSP chair and of course
the former Google CEO Eric Schmidt to discuss.
Speaker 9 (26:27):
To me, national competitiveness is the challenge for the next
ten or twenty years because the Chinese are really focused
on dominating certain industries and we need to compete with
them and make sure we win.
Speaker 10 (26:40):
In the case of artificial intelligence.
Speaker 9 (26:42):
We are well ahead two or three years probably have China,
which in my world is in eternity.
Speaker 10 (26:48):
I think we're in pretty good shape.
Speaker 4 (26:50):
And pleased to say we can dig in on this
conversation with the CEO of a special competitive studies project
Eli byrectari eally, thank you for joining us just ahead
of the Key expo unveiled Well, and I'm interested in
is that, ultimately how optimistic you are of China visa v.
Speaker 3 (27:05):
The US, Eric Schmidt. They're saying we are years ahead
of China. What makes you so confident of that?
Speaker 13 (27:12):
Well, I mean has been pretty clear about we want
to They have They're putting the enormous resources, their strategy,
they have their national champions and in short, a lot
of land. When it comes as I said, we are
ahead of China, that makes us, uh slow down.
Speaker 12 (27:36):
I think we need to continue investing. We need to
continue bring public and try the sector together because otherwise
a competitor that has a civil future. In other words,
the reality works Landing Love we trate Settler, you know,
getting ahead of these technologies.
Speaker 3 (27:52):
Ayah, I'm so sorry.
Speaker 4 (27:53):
We've got some technical difficulties on the line and we're
hearing an echo. Will be back to you in a moment, really, Tari,
he's a Special Competitive Studies Project CEO.
Speaker 3 (28:01):
This will be my technology. Let's get back to Washington.
Speaker 4 (28:20):
But pleased to say the CEO the Special Competitive Studies
Project is still with US eally, Tari, thank you Eli
for well.
Speaker 3 (28:26):
Working through some of these tech issues.
Speaker 4 (28:27):
But more broadly, I want to get to the tech
issue in the use of generative AI within basically the
area of particularly when it comes to intelligence agencies. This
is an area that you've got a awful lot of
experience in. Are we seeing an adoption of generator AI
within our own intelligence agencies in the US?
Speaker 12 (28:45):
So, I think, like with any previous technology trus traumative era,
I think our intelligence community is adopting. You could argue
that two steps forward, one step backward, but I think
everybody recognizes these technologies are going to be so powerful
that our intelligence cuity needs to adopt Now, as you know,
intelligence community runs through a strict codes of how they
(29:06):
buy and how they use these technologies. Obviously there are
privacy related issues about using these technologies. So I think
everybody recognizes how these are important technologies that we need
to adopt for the intelligence missions purposes, and I think
everybody's making it some kind of progress in the area
of their mission.
Speaker 4 (29:23):
Of course, you were a chiefer staff to the National
Security Advisor, a master, so someone who has a lot
of experience in this field. Going back to more broadly,
what the Special Competitive Studies Project is doing right here
right now, as you're also trying to find what would
stymy the competitiveness of the US. One issue with generative
AI is access to energy, access to chips. Where are
(29:43):
you thinking of thought leadership of ensuring that US stays
ahead when it comes to energy adoption.
Speaker 12 (29:49):
Yeah, I mean, look, the chipsidle was the first problem
leading legislation in many years in which you had such
a bipotisan support that we as a country dedicated fifty
two billion dollars to bring back and build in this
country some of the manufacturing capabilities that we've lost for
the last twenty plus years. So I think hardware and
in this instance chips are really important. I think now
(30:11):
we are uncovering that energy demand is going to be
a true capability that you need to build these next
generation AI technologies. I think there are several paths we
can take as a country. You know, there's a lot
of energy. There's a lot of energy around the fusion.
I would argue, as we have a lot of companies
here at AI National Competitives explo in DC that presents
(30:32):
some of the key fusion companies. We have other pathway
stores getting through the energy. But I think AI could
help us transform also the energy resources we have energy,
energy sources and diversify, you know, going forward because of
the demands and because of the means you have, you know,
to get to the next generational BUFO conations.
Speaker 4 (30:51):
When you're bringing together government institutions, you're bringing to other academics,
you're bringing together corporates, what outcome ultimately do you want?
Speaker 3 (31:00):
Do you think we are firing on all cylinders.
Speaker 4 (31:01):
When it comes to discussion of how to harness this
leap forward in technology right now?
Speaker 12 (31:08):
So I don't think we are. I mean that's why
I think we organized this expert because innovation happens in
the pockets. You know, we have like most of the
innovation happening in the East Coast or West Coast. And
then you have in Washington. You know, you have the
federal agencies that are doing two things. Both trying to
adapt these technologies for the purposes of what they do daily,
whether it's Health and Human Services or HUMA or the
(31:29):
Partner of Defense. But also they're all subdrafting policies and
how we use these technologies. So the purpose is really
to bring as we call Hall of Nation in Nations
capital where they can talk, they can exchange ideas, they
can exchange business cards, and ultimately here and talk about
the benefits and challenges of all these technologies and how
do we move fast in adopting all of them for
(31:51):
the next five to seven years.
Speaker 4 (31:53):
While we wish you well on that bringing together of
academics and government and see what the outcome is. Ili Baktari,
we thank you so much for your time today, Special
Competitive Studies Project CEO over there in Washington, theaix BO. Meanwhile,
let's just talk about what Microsoft has been doing. It's
deployed a generative AI model entirely divorced from the Internet,
(32:13):
saying that US intelligence agencies can now safely harness the
technology to analyze top secret information. Most AI models like
CHATGBT rely on the cloud services to learn and infer
patterns from data, but this is the first time a
major large language model can actually operate fully separated from
the Internet, which allows spy agencies to use AI while
(32:33):
avoiding the risk that data could leak out into the open.
This whole narrative is one we're going to stick with
now because we're going to talk more broadly about cybersecurity.
The RSA conference is in full swing over in San Francisco.
Bring together the world's top cybersecurity government, business leaders, and
they're going to dissect and strategize on the best practices
to tackle such new threats. Let's bring in Palo Alto
(32:54):
Networks chief product officer Lee Clerch for more and Lee,
I can imagine once again, AI is the first topic
of conversation.
Speaker 3 (33:01):
What's winning out in the battle of.
Speaker 4 (33:03):
Well, bad actors adopting it or the cybersecurity contingent adopting it.
Speaker 2 (33:09):
Oh, you're absolutely right, the attackers.
Speaker 14 (33:13):
You know, when chat GPT first launched, the first thing
they started doing was figuring out how they could leverage
AI to their advantage, and the first thing we did
in cybersecurity is we started figuring out how we could
leverage AI to counter that. And today we've had a
series of AI security announcements focused on how we bring
precision AI to combat these attackers that are going to
(33:35):
be using AI everywhere.
Speaker 4 (33:37):
So you bring out, ultimately the things that people put
in their arsenal to be able to fend off such attacks.
Can you just give us a size and scope of
how much we are seeing more cybersecurity issues threats amount
because of generative AI.
Speaker 14 (33:51):
Yeah, it's hard to trace its specifically to generative AI.
We see millions of new attacks launched every single day.
We see this in our telemetry, we see this in
our machine learning models, our AI models that are detecting
these attacks in real time, and all of that translates
into billions of attacks being blocked every day. Now, how
(34:13):
much of that is specifically the results of generative AI
versus more traditional mechanisms. It all starts to kind of
blend together, but it definitely points to the increase in scale,
and we're also seeing, maybe even more importantly, an increase
in sophistication of these attacks where attackers are able to
use generative AI to improve their chances of actually carrying
(34:36):
out a successful attack.
Speaker 4 (34:38):
Of course, regulation has tried to keep a pace of
this and disclosure, the SEC in particular mandating basically prompt
disclosure of whenever a company a corporate has indeed had
a material incident. How are you seeing that prompting the
leaders in security within the corporates to come to you
to ensure that they've invested in the right product at
the right time.
Speaker 2 (35:00):
Great question.
Speaker 14 (35:01):
Actually, I see a lot of value in some of
these new regulations in driving investment towards cybersecurity, the necessary
investment quite frankly given the security landscape, and a lot
of these measures are oriented toward making sure that organizations
have the right security capabilities. Increasingly, that means the need
(35:22):
to be real time in their security operations and when
something does happen prompt disclosure, which of course is really
good for the industry. It helps everyone understand what's happening
so we can all learn from it quickly. It also
makes sure that the end consumer understands what's happening and
can take necessary actions if needed. So all of that
(35:43):
that'll culminates in the sort of the other side of cybersecurity,
which is this is a battle we can win. I'm
in cybersecurity, but I'm actually very optimistic about the benefits
of AI and other technology benefiting those of us who
are all trying to defend organizations around the world, and.
Speaker 3 (36:02):
You've been trying to defend it since two thousand and six.
Speaker 4 (36:05):
Over with the Palo Alto Networks in the product area,
chief product Officer Lee Cleric, leaving us with a bit
of optimism there.
Speaker 3 (36:11):
We thank you from New York and San Francisco. This
is the bluemoid technology.
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