'Bloomberg Technology' Full Show (05/31/2023)

from the heart of where Innovation money and power Collide in Silicon Valley and Beyond this is Bloomberg technology with Caroline Hyde and Ed Ludlow [Music] I'm Caroline Hyde at blumug's world headquarters in New York and I'm Ed Ludlow in San Francisco this is Bloomberg technology coming up we break down the market action as equities trade in the red and Nvidia drops for the first time since its blowout earnings report plus we'll talk artificial intelligence as the Biden Administration weighs how aggressively to regulate new artificial intelligence tools like chat GPT and amid recent turmoil in the U.S banking system one fintech startup that saw Revenue surge we'll discuss why plus so much more throughout the show including where public markets are currently trading Ed we're seeing a little bit of a dismal feel to the NASDAQ today we're dropping about seven tenths of a percent nervousness nervousness out there that maybe some of the economic data in the US is just too strong the Federal Reserve is still going to have to call this economy the jolts data basic job openings looking much better than any single Economist out there have anticipated but what's interesting is you weave in there for perhaps the sell-off well the buying that we see in two-year yields actually just dipping a little bit that's all around where we go in terms of the debt ceiling as well whether we get some sort of agreement finally push forward we're hearing from Kenny lines just at the end of the previous show on that but what's notable is also the fact that yes economic data in the US perhaps signing too much on the positive side and over in China and Europe that PMI that manufacturing data looking weak so we sell off once again in terms of those U.S listed Chinese stocks let's move on and see what's happening elsewhere in the world of technology I'm looking at what's happening in the world of crypto because what a dire amount month we end up the month of May down more than eight percent this is the worst since November when FTX collapsed of course so there's significant perhaps pullback in some of the games we've seen going on in the crypto world but dig into some of the micro names that we're seeing on the move today Ed yeah some of that nervousness you're talking about certainly coming from earnings Hewlett-Packard Enterprise the maker of networking or office infrastructure tools down seven percent pretty big decline it's forecast for the current period really coming in below expectations HP Inc not to be confused with the maker of laptops missing sales in the quarter just gone the fiscal second quarter that giving some concern around demand for PC but Bloomberg intelligence our colleagues there saying actually there was evidence that the market for PCs bottoming out based on what HP Inc had to say Tesla down two percent Elon Musk over in China giving back some of its recent games coming off a two-month High Elon Musk photographed having dinner at a restaurant in China he eats at restaurants just like the rest of us not sure that's having much waiting on the stock but a lack of news for us mere mortals driving tester action in the chip space actually really interesting Intel making significant gains now up four percent have been up significantly higher after the CFO said Revenue in the current period will come at the upper half of its previously guided uh projection or range that giving investors some confidence and then Nvidia down 3.7 it's actually its biggest drop since February but remember we're coming off of record close uh uh Tuesday evening and of course 24 hours after Nvidia touched a one trillion dollar market cap for the first time some profit taking perhaps yeah maybe just maybe and we've got to think about the profit taking more broadly because an awful lot of the rally that we've seen so far this year has been Thanks to just the very few names and that's highlighted by the recent report coming from Joanne Feeney we're pleased to welcome her to the show Ed partner and portfolio manager over at Advisors Capital Management and I read your note with real interest is we were of course still trying to muddy through the macro what's happening in terms of debt ceilings and the like but talk to us at just how important are certain few names of ultimately tech stocks have been to the rally so far this year yeah Caroline you know we got a lot of inquiries from our clients about how much the market has gone up this year and is this a good time to get into equities and when you break it down there are really two stock markets there's the super seven the biggest Tech and consumer companies like Amazon Tesla Microsoft Apple Google obviously Nvidia that have surged on average as of Friday's close they are up 67 year-to-date whereas the rest of the market was only up 0.3 percent and and that really does tie into two narratives one the the growth opportunity related to AI on the one hand and then the rest of the market which is all about recession risks interest rate risk inflation risk as we're seeing materialized today let's dig deeper into the AI equation because yes Nvidia now back below that one trillion but still basically what a surge are we putting too many eggs in just a very few baskets are you on the sort of Kathy Wood side of the equation that there are other companies that are going to win here and you should start looking at better valuations out there yeah Caroline it's hard to tell how much uh we're going to get out of AI over the long term but it's pretty clear that the companies that are me that are enabling AI whether it's through the chips like Nvidia provides or whether it's the software and deployment like Amazon web services Google Microsoft are enabling what I think investors recognize is that even though we don't know all the details we know that Ai and it's spread across the economy is going to provide years of growth for these companies and that's a step change in what we expected these companies to be able to do you know just some months ago and so I think that that's warranted it isn't to say that there aren't opportunities out there and you know investors can look for those but we think these are solidly in the middle of this and it's a less risky way I think to play the AI move over time and then you can look beyond that into companies adopting AI in in Industrials in healthcare there are plenty of opportunities out there we'll learn more about them as time goes on Joanne Kathy word joined our programming our colleagues in Asia overnight she's moved her focus on from Nvidia Tesla to the next big bet have a listen to what you had to say we are really happy that you know investors who uh own uh benchmarks like the NASDAQ and and QQQ still own Nvidia they own it in some of our portfolios but we're on to the next thing Nvidia is a hardware stock and sure it has some software but uh the history of hardware and software is the bigger beneficiary over time is going to be software is going to be software I think you know that investors are looking to move money into software which can mean a broad range of things right Cloud SAS Enterprise what are the corners of that sub sector that interest you oh yeah and there there are going to be many I mean the the adoption of of AI into software tools uh across you know multiple uh and markets I think is significant you know we own a company for example called Splunk in our growth strategy they are a big data analytics company and AI is going to play an increasingly important role there from nvidia's perspective you know the tying of Hardware to software is actually pretty critical to what they're enable uh enabling their customers to do it's also why their gross margins are going up and so you know we see in hardware and software to be more and more tied over time which I think is why you know Nvidia is such an interesting opportunity here not to say one should potentially take a little bit of profits at this time which we did for clients actually after they reported but going forward yeah they're going to be plenty of opportunities in software as well yeah Carrie the point that I make as well is like this obsession with a small group of U.S domiciled names right the mega cap Tech but if you look at the commentary of the broader Market particularly the bond market when we think about this economy and Global inflation everyone's got an eye on China and well Elon Musk is there in the moment isn't he as well that you're just highlighting a bit earlier I mean Joanne to that point how much when you're looking in the macro when you're looking at What's Happening Here in the US and everyone's seeing the seven winners the rest leaving behind when we think about where inflation's at how much are you looking for your investor base at oh China Europe being opportunities or being just there is you need to stay well away from at the moment you know there's always a role for international exposure in in portfolios we have actually separate International strategies in addition to some strategies owning some International names China clearly has become more of a concern I think investors were overly optimistic about how much the reopening will be able to drive demand in the near term uh which isn't to say that China is not going to be a very important source of consumer demand they have you know massively moved a big chunk of their population into the middle class and that's going to be a foundation for buying over many many years so you know overall there are some attractive valuations our approach is to look for companies uh in countries as opposed to investing in countries as a whole and that way we can hand select as we do in all of our strategies you know back to the hardware side the advantage we're seeing that that Ed mentioned the focus on U.S I think comes from the deep modes right that our companies have created around this technology you know as a semiconductor analyst for 10 years and one of the key things there was digging into the technology advantage that companies like Nvidia and and Google teaming up with broadcom to develop an alternative uh big chip to be able to do these AI training computations it shows that mode is very deep it supports their margin so I think it's not wrong for investors to recognize that the source right of a lot of the gains are going to be in these U.S companies you know we we learned that that one morning a market does not make but it is interesting that there's more emphasis right now on current risks rates recession how much is that going to impact the technology sector going forward do you think from this moment right now yeah great great thought there Ed you know as I said we have two stock markets right now we have the investor focus on which companies out there can actually provide years of growth with or without a recession right that's secular growth and now it's been revealed uh in AI that that's going to be significant and then you have the rest of the market and I think that's the market where they're going to be really focused on those recession risks and rightly so right this the joltz data this morning suggests that the fed's going to have to raise rates uh again instead of pausing and it really throws into doubt the FED being able to cut rates uh towards the end of the year and that makes investors worry that those higher rates are going to constrain lending that's actually going to trigger a recession the FED obviously would like to avoid that so there's just a massive amount of uncertainty right now and we're seeing it in the prices of stocks in the rest of the market where secular growth isn't as big a driver where the cyclical concerns are far more important but the patient investor should really look Beyond this inequities do a terrific job over the long term of delivering the ability to build wealth so it's an opportunity potentially to get some of those companies in the rest of the in the rest of the market and build those positions now while risks are are high and if you're a long-term investor you can look beyond that and build really solid Diversified portfolios and take profit in the seven names that have driven us thus far we've done some of that absolutely you know we're actually slightly now underweight Nvidia we've been overweight for the last year and I think it's appropriate to make sure that the risk exposure you have in a portfolio is balanced against you know how the potential return from here is now confronting uh the the level of risk that we see you know across the global economy partner portfolio manager Advisors Capital Management one morning a market does not make but it's good to get the snapshot view thank you very much now coming up fintech startup brex seeing Revenue surge following the banking turmoil in the US we'll discuss why next this is Bloomberg [Music] thank you [Music] [Applause] credit card startup brex has seen a surge in usage of its products following this year's Regional banking term or The Thinker tech company on track to reach roughly 500 million in recurring Revenue over the next 12 months of its cut if its current pace of growth continues joining us now to discuss is brex co-founder Enrique dubegra Enrique what's driving this that's a pretty big build up in in forward-looking Revenue right yeah first thank you so much for having me here um so we're actually announcing that there's two products that crossed over 100 million in Revenue which is our Empower product which is um replacing concur for travel and expense for most businesses and also our business accounts right which can do operational you know payments uh deposit checks all the kind of like traditional banking activities for a business in one place and both of them crossed over 100 million so now we have over three products that crossed 100 million revenue and that's something that we're like really really excited about so the 100 million in annual recurring revenue for the business accounts unit and Empower Bloomberg sources saying that company-wide annual recurring revenue on track for about 500 million what is it that makes brex so attractive to startups that you've done business with since the Fallout of svb so I think there are two kind of mean growth drivers the first one uh is are actually our Enterprise segment of the business so in power which is our system management solution has been serving customers such as doordash coinbase indeed that has Glassdoor lemonade Etc and um I think both startups mid-sized companies in a large Enterprises have been attracted for a product because it's super easy to use for employees you know you can just swipe your card and your expenses are done it's extremely Global so it works all over the world for all your subsidiaries all over the world and that's been like growing a lot as remote work rows and people are hiring internet a lot of focus on experience the second one is our banking product um and I would say that yes the regional banking crisis definitely had um we didn't know if it was going to be net positive or not negative for bricks we got that question a lot now we know it wasn't a positive customers did come and stay with Brax and that also drove a lot of growth for the company you know Caroline I think you and I will never forget that Friday where the svb story unfolded we did that special program but we learned so much about how startups manage their finances the type of funding that they seek Beyond just raising capital from VCS and what was interesting was Silicon Valley Bank was so intertwined with the startup sector because not only was it offering lending but offering Men new ways Venture debt and yeah Enrique that's an area that you've been working in as well how much are you seeing startups getting into Cash burn needing to get further money to deploy but don't want to raise Equity is Venture debt still a big part of your business I would say that um Venture that is a very small part of um you know it's definitely an experiment that we try and continue to do in small amounts but it's it's not mainly why customers come to us the main way our business account customers come to us is because of their operational banking so running payroll wires ACH checks making their kind of day-to-day banking it's a lot of startups they keep up a lot of their funds in some of the big Banks but they keep you know one two three four months of money with us to be their day-to-day partner that really understands them and where are these companies coming from you're obviously focused on allowing these companies to be Global to travel to to grow but are they largely us-based companies are you seeing this becoming much more of an international play these are a lot of them are global companies so over 50 of the companies that we serve uh have Global employees um all of them have U.S employees we only serve you if you have some sort of U.S operation for a bunch of regulatory reasons but a lot of them are global companies and we serve as I said from startups that just were born to you know customers that were from Seb also to kind of like larger Enterprises like in the door adopting coinbase I have a sneaky suspicion there's a few more AI players looking to bank or being born at the moment and Ed I mean every day we're discussing the exuberance around that yeah it reflects the conversation we had 24 hours ago right Rex Salisbury it's about what AI can do for existing fintech players and I guess Enrique that's my my question for you how is AI going to boost your offering where are you investing uh to jump on the bandwagon so to speak I think AI is going to completely transform our industry um and I would say there's a couple different places right you can think about it some in the employee experience how can you make it even easier for employees to do their expenses or not have to do them at all you know make all of that all automated we also announced earlier this year kind of like uh you know a CFO for everyone where if anyone has any questions you know you can just ask this chat bot and they will respond to you so you don't have to waste Finance teams time those questions they already know the answer to all the way to like accounting and operations I think it's to get a completely revolutionize and transform our industry and we're investing very very heavily into the development the new capabilities and and you know I think we're we're over the next few months you'll see a lot of very Innovative things coming out of brex Enrique when does brex go public we don't have a timeline yet we're not against being a public company uh you know in any shape or form um that being said I would love to be a low volatility public company uh we're not yet profitable so we'll probably wait for that um to happen before we go public other thing to remember is we're a 60 year old company we were started in 2017 so I would say you know we don't we don't have any pressure to go public yes uh we're still quite young for a startup and we understand you don't have any pressure to raise new bench Capital yourself I'm interested though whether where you are in terms of the focus on being profitable being capex positive and all this sort of good stuff are you are you still trying to hire because you seem to be talk about developing leaning into AI how are you managing those costs yeah I would say that you know um we're still investing a lot uh in one our go to market organization because the product is having so much traction that you know I think it is higher or why for us to invest in sales and marketing um to acquire you know more customers faster so we are investing there and our investors are really excited about it and then in the second area is AI I do believe this is going to be transformation on a step function change so um I think uh if you know if you're a company and you're not willing to invest in AI you know you're probably missing the next big shift that being said we do have a good business of a good business model I think we can we have a plan to being you know cash flow positive without raising any more money Enrique great to have some time with you again thank You Enrique du progresses the brexit code CEO meanwhile coming up we're going to talk about Elon Musk the Tesla CEO he's been making the rounds over in Beijing more on who he met with than any projects that he's mulling that's next meanwhile we've got to remember we still got earnings coming dripping through the system Salesforce investors going to be watching that one closely today after the Bell company gonna update us on its own cost cutting campaign look how is it going to provide us with the long run Revenue goals that it set itself let's bring back [Music] [Music] [Applause] it's time now for talking Tech first up iPhone maker Foxconn technology says it expects to more than double its Revenue in the second half of the year thanks in large part two sales of guess what artificial intelligence and the servers thereof is part of a move to generate revenue from other fields such as electric cars and AI hon High that's the listed vehicle for Foxconn technology also working with Nvidia on autonomous driving applications and Baidu is looking to beef up China's AIC and the internet company has set aside roughly 140 million dollars to fund Chinese startups that specialize in generative AI Baidu and its VC Partners will accept pictures from prospective Founders who will use its Ernie bot to build their own large language model before Baidu determines well who gets the seed funding plus day two of Elon musk's visit to China and he's already met with more government officials that says he looks to bolster opportunities in the country musk met earlier with China's minister of industry and information technology and stop by the ministry of Commerce he also met with the head of the Battery Giant catl sparking rumors of a potential collaboration and musk arrived in Beijing Tuesday where he met with foreign minister Quinn Gan and I mean Ed overall this is a focus another CEO we've heard from Mercedes we've heard from GM we've heard from well Jamie dimon really having to talk up that look these are still focused on China despite some of the trade tensions the tech tensions yeah and in the statement issued by the Chinese government Elon Musk is quoted as saying that he is against a decoupling from China they'll continue to invest in China it's a really interesting two-way situation fifty percent of Tesla's output was in outer Shanghai globally last year and you know the the Chinese government have given Tesla the freedom to operate there as an independent U.S company which is rare but again it's a chorus of names as you point out and interesting that potential rumoring around the big battery maker because that's of course a big part of trying to have supply chain in the US rather than depending on chinese-made Goods right well when Ford announced that it was going to make batteries in Michigan Licensing catl technology there was a big Fallout particularly from the Republican party that relationship really closely watched yeah one to keep an eye on I'm sure we'll get more photos as his continued Journey yep so coming up we're going to keep with the conversation dozens of AI industry leaders and academics calling for greater Global attention to the possible threat of Extinction from AI Dan Hendricks Center for AI safety joins us next this is Bloomberg [Music] [Music] [Applause] thank you welcome back to Bloomberg technology I'm Ed Ludlow in San Francisco I'm Caroline Hyde in New York let's check in on these markets halfway through the show halfway through the training day they're in and we're looking at a slightly lower NASDAQ 100 at the moment we're off by eight tenths of a percent a bit of a concern profit taking call it after those massive run-up that we've seen in this particular Benchmark but also the worries that basically we're running too hot in the US the Federal Reserve is still going to have to tame the growth the jolt status showing that people are still really hiring we see a little bit of movement in the two-year yield on the back of that data that came roaring through but remember tepid growth coming from China in terms of pmis and Manufacturing data there you're up to interestingly taking the wind out of the sales of Bitcoin once again we're actually off by more than eight percent over the course of this month the worst month since when FTX collapsed let's move on and have a little look at what's happening in terms of individual movers because we do still have earnings we do still have real news but we also have perhaps the first fall in Nvidia since it's roaring earnings that we saw last week we're off by about five percent call it profit taking after it hit that one trillion dollar Mark we also though see Intel on the back seeing an uptick at mobile 3.8 percent higher as we see the CFO speaking at a TD Karen event really discussing how maybe they're going to manage to be at the top end of the range when it comes to their forward-looking guidance Hewlett Packard Enterprises though that disappoints in the back of its numbers Ed down by some seven percent are we worried about compute spending at the moment we are still in a very difficult macroeconomic environment we've got to remember that but AI is still a big factor in those markets now the US and EU are meeting up this week at the U.S EU trade and Technology Council gathering in Sweden where the EU is discussing plans to subject generative AI to additional rules this is bigger than Europe U.S is important but it is bigger than the us but if the two of us take the leads with close friends I think we can push something that will make us all much more comfortable with the fact that generative AI is now in the world and is developing at amazing speed meanwhile Biden Administration officials have been divided over how aggressively new AI tools should be regulated a dissonance that has left the US without a coherent response to the eu's proposals let's bring in Bloomberg's and Anna Edgerton to break it down and I thought we were in a place where the US and EU are on the same page you regulate the use case the tool rather than the underlying technology itself where have we gone wrong well we were kind of on the same page near the last TTC meeting came out with this joint road map that kind of agreed to pursue this risk-based approach like you said focusing on the use of the technology rather than the development of the technology so AI used for things like critical infrastructure would be subject to higher levels of compliance now chat gbt changed everything and that really showed us how a general purpose AI product you know something that's not inherently high risk can become very risky on a societal level when it's used by hundreds of millions people every month for everything from you know helping with homework to you know more nefarious purposes so that's what policymakers are grappling right with right now is how to treat these generative AI products and how to classify the risk of those at the moment though Anna doesn't even really matter if the US for example certain parts of the administration are divided because to me it feels like the EU is going to be the first mover here with the AI Act well and that's why the EU act the eu's AI Act is most important is because U.S companies are going to have to comply with us if they want to operate in Europe so much like the gdpr did for privacy the AI Act is going to kind of set a de facto floor for compliance so that's what U.S companies are worried about is as they develop these Foundation models that underpin this generative AI technology if they want to operate in Europe they're going to have to comply with those rules whether or not the U.S has passed its own policy and these companies are really looking for a champion in the Biden Administration to go to the EU and say listen we don't think this policy is going to work the way it's imagined when it's implemented eventually you know so the reason why it matters that the byte Administration is divided is that these companies don't have that champion they don't have anyone going to these multilateral discussions and really expressing their point of view there was a time where we thought that vice president Kamala Harris was the champion right she hosted that meeting with Sam Altman such as at Nadella the Administration has made noises about they want to do something but I'll go back to one point you made policy we haven't really heard any arguments for either side of where to focus regulation particularly from this White House that's right well I mean I will give the administration credit for putting forward some very well received Frameworks you know we have the risk management framework from the National Institute of Standards and technology that had a lot of input from industry from civil society as a very well thought out document you had the White House putting forth their Bill of Rights for people who use AI products but we don't have binding policy in the United States and that's because the US Congress is just now starting to you know hold their initial hearings to educate lawmakers and what AI even is so while the bite Administration has done a lot of work to kind of set non-binding guidelines actually binding regulation is going to come from Europe once again Anna Edgerton we thank you giving us for the global perception of AI risks let's dive into some of the perceptions here in the United States because there's been another open letter signed by a group of Industry leaders warning of this time the risks of Extinction due to artificial intelligence it was published by the center for AI safety which has mission to reduce societal scale risks from artificial intelligence joining us now to deeper dive on all of this and explain Center's own thinking this is executive director tan Hendricks it's great to have you thank you Dan I'm just interested in how this first started this whole mission statement that you put out there about summer mitigating the risks in line with potentially a nuclear war or indeed well a global pandemic how did you have first half conversations with Sam Altman and Demis of of deepmind did they come to you you go to them so we created the letter largely because I knew that many people had concerns that AI could lead to Extinction and that we should not just be treating it like every other Tech issue but instead as a global priority so we created this letter to succinctly convey the shared concern and then we disseminated it among some profs and from there it sort of spread organically and so there are some surprises in that uh open AI signed it Google deepmind signed it Microsoft signed it as well as many of the scientists that built the current wave of artificial intelligence what's interesting is I'm trying to understand also how you were born as a center for AI safety are you so were you funded by any of these businesses what is the ultimate way in which you continue to deliver and do your research so we started we started a while ago and we're largely funded by a philanthropy we're not funded by uh Elon Musk or things like that so we're just trying to reduce the risks from AI I've been when I was or as a graduate student at Berkeley I've been researching safety for a very long time so this has been a concern uh that I've had for many years and now finally the AI Technologies are getting to the point where it's becoming a lot more obvious to the scientific community that this is a large concern a letter like this probably could not have existed six months ago but given the rapid developments a lot of people are changing their minds a lot of experts are changing their minds of just about how severe the risks can be done I actually want to go back to Caroline's previous question quickly have you taken money from any AI Executives that were signatories to that letter the previous letter basically key names in the field of AI there I'd have to check if we're having any uh funding from any employees that are also concerned about safety the AI Community is particularly large 90 plus percent of our funding is from open philanthropy which is an independent philanthropy one question that arose quite quickly when you put out the statement 24 hours ago is the rationale or motivations behind the signatories why are they doing this I get it there's a long-term broad concern about the risks from AI but why do you think these leading names who want the field to advance signed the letter that you organized well so many of them were on the boat we got to move as quickly as possible developing AI would be a generally good thing but a lot of the scientists who signed this have recently changed their tune Jeff Hinton of course helps create artificial intelligence modern artificial intelligence so did yahshua benjio but in recent months now there's substantially more concerned about there being Rogue behavior that these these AIS could potentially lead to human extinction as they get more advanced so for that reason uh I think that it's just because people are starting to see that this is moving extremely quickly we don't understand how these Technologies work it's difficult to steer them and so that could potentially they could be misused those things could potentially lead to catastrophic risks or potentially in a longer term Extinction very quickly in response to your letter there were those that know present and much more near-term basic risks have a listen to such a lucioni of hugging face who joined us yesterday I personally see it a bit as a magic trick as as misdirection right um I I care very very strongly about for example uh data consent for example disclosing data sources disclosing disclosing transparency and model documentation and instead of focusing on that we're being directed towards these unsolvable risks are we paying enough attention to more near-term and immediate risks from AI I should certainly hope that the risk of Extinction is not unsolvable or else we're in big trouble so I think it's important as a society to manage multiple different risks I think we can certainly do it I I also think that many of the risks from that currently affect us can take on more extreme forms later on for instance if the people developing these AI technologies have decisive control over them that gives them extremely high power and power inequality with respect to AI is a concern that could potentially get out of control where a few people are calling the shots in society so I think that it's important any competent form of risk management will address current ongoing harms as well as tail risks so I think we need to have a complementary approach yeah and Dr Hendricks the outcome from this you've certainly stirred a lot of interest people perhaps either aligning themselves thinking that this is too much or indeed that you need to shine a light on this how do you think we ultimately take on these risks you're very good at highlighting what the risks are is it regulation is it self-regulation what do you think the outcome will be well I think that self-regulation would be a useful start but we wouldn't trust something like a pandemic or nuclear technology just to the scientists we wouldn't say solve the AI or the nuclear arms race scientists it's not necessarily completely their purview there are technical aspects to this problem but they're also social aspects to this problem so we wanted to just make sure that the public is aware that many of the AI scientists we have ai scientists from all the top universities and many of the people who created it are concerned that it could even lead to Extinction so then policy tends to be more of a negotiation process and so hopefully we can get those conversations started recognizing that there are severe effects on the horizon such as potentially Extinction so I think we need to treat as a global priority and we need to work toward cooperating domestically but also internationally so that we're not caught in an AI arms race between different countries the nuclear arms race brought us to the brink of catastrophe and we don't want another arms race where we build extremely powerful technologies that that could potentially destroy us all and we just keep stockpiling them that was not a good outcome for Humanity that could have gone substantially worse I don't want the same to happen with AI so hopefully we can cooperate starting today have you seen decent self-regulation thus far on some of the more near-term immediate societal damage we're seeing as many have referenced you know the bias already baked into some of the data that this being built upon the worries that the wrong people are being potentially stopped by police the worries that the wrong misinformation is already circulating have you seen that tackle before we even get on to the much larger and more significant concern that you have about Extinction yes I think we ought to be if we can't address many of those current risks then I don't have much hope for us addressing some of these these larger risks as well I should say that um the there's a bit of a mix in uh whether companies have been successful at making their AI Technologies safe there's some you know notable uh failures like with Bing's initial rollout where it was threatening users but uh some other technologies have been useful in uh being relatively reliable and mitigating their amount of bias so there are fortunate signs that there's some progress being made I'm concerned though that since the AI companies are competing with each other and are locked in in arms race with each other that there won't be enough time for safety that they're going to prioritize development over safety because if they if they don't prioritize development and making it as powerful as quickly as possible then we won't be able to make it safe and bring the risks down to a negligible level is it a risk that by regulating self-regulating or otherwise we start to stifle out the new competitors the smaller players the academics that you're talking to within Labs rather than a large players such as a a being or a Bard or a or an open AI I think that uh well if we're concerned about academics I think that that would largely be the government to be taking care of that I think that we can definitely Target some of these catastrophic risks um uh for models that are at a certain level of capability that seems like a possible proposal so um we'll basically have to see with with these negotiations I'm largely just pushing for us and initiating this process and trying to have broader societal cooperation including International cooperation on these issues Dan how does the public reconcile that the signatories to your petition your initiative were the leaders in the field of AI the AI evangelists for want of a better expression who are now apparently the AI doomers how have we moved so quickly from leadership to concern in that field I think that this is a natural part in any industry where initially it's move fast and break things be risk seeking Tinker throw stuff at the wall see what sticks but then we start shifting over to a more risk-averse regime where when the technology starts affecting Society on a larger scale now people are actually using these AI Technologies and so we ought to be substantially more cautious with their potential outcomes as well it's getting a lot closer to human level intelligence so earlier two years ago they really weren't intelligent at all but it's quite conceivable that in the next few years that in many cognitive domains we have AIS that are as good as us or better so I think that's one of the main things shifting this underlying change in tone because this air arms race is making it move so quickly people are starting to think we need to rethink our priorities Center for AI safety executive and research director Dan Hendricks thank you for your time now Elizabeth Holmes turned herself in at a minimum security prison in Texas yesterday to begin her 11-year three-month sentence the disgraced Tech founder had been convicted of defrauding investors at her failed blood testing startup theranos and she in her former business partner Ramesh balwani must together pay 452 million dollars in restitution to investors Cara well let's get back to it Ed because we've got more to discuss on artificial intelligence if you can believe it but we're going to talk about it on Wall Street how hedge funds are actually dipping their toes into the pool of AI tools to handle all the boring stuff the grant work we're on that next there's a Bloomberg [Music] [Applause] Wall Street it's already filled with quants with computer wizards but because not stopping hedge funds from utilizing the powers of Chachi BT for the basics you're better to discuss all of this Bloomberg News at Wall Street reporter shanani basak and so what is it Junior hedge fund analysts real Alleluia you don't have to do the basics the grunt work here yeah there's a reason that it only really works for the basics I don't normally like to use personal examples but I had gotten my degree in Quant finance and down over at n by NYU for the MBA program what they do is they take all the students they have them run through all this data they put it through code under different Market scenarios and what they show you is that the code the models don't always work the point here being is two things one sometimes the data doesn't work sometimes it's just wrong and the other times the market is just unpredictable it's why there's limitations to how chat gbt could be used but Caroline there are more things about chat gbt that make this kind of rendition of quantitative Finance different than before and that is natural language processing generative AI that'll make it easier to read company reports research reports news filings and even company transcripts to hopefully make it easier to parse through investing signs down to Fed minutes to to get signals on how dovish or hawkish something is so it feels for now it's about productivity and workflow rather than perhaps getting an edge when it actually comes to your investing short sweet but always to the point we love it meanwhile and more on the VCS area for you yeah let's get the VC Spotlight and first up Canadian Venture Capital investors have about 10 billion dollars of dry powder to spend on cash hungry startups they're going to need it soon according to a report by The Business Development Bank of Canada's Venture Capital unit It also says many VC funded companies face the risk of running out of money in the next 12 months without new financing despite efforts to slow down their rate of cash burn an early door Dash backup pair VC has closed a new 432 million dollar fund for early stage investing the fund is the firm's fourth and will continue its generalist strategy investing across sectors including Life Sciences Healthcare consumer climate and artificial intelligence of course the firm raised 160 million dollars for its last Fund in 2019 plus the Japanese government plans to double financial support for startup companies in Innovative technology Fields such as space development and artificial intelligence Nick a reporting Japan's cabinet will formally decide on the move as soon as early June that's your VC Spotlight this is Bloomberg [Music] [Music] [Applause] and what is going viral is the finale Zed of succession and Ted lasso Warner Brothers discovery which of course owns HBO so close to three million people watch the succession finale on TV and it's streaming app HBO Max in the US a 68 improvement over the last episode of season three according to the company and meanwhile it's the top trending topic on Google Trends Ted lasso's own finale telesa has been born a boon of course to Apple TV breaking into the Nielsen weekly streaming ranking in sixth place during the last week of April with this third and last season meanwhile though our Brits aren't watching it much right it's unbelievable I mean Apple doesn't disclose numbers but it's all everyone's talking about on social succession is on fin twit three million doesn't seem like a lot in a country of 330 100 330 million people but as you know we're both big fans that does it for this Edition Carol of Bloomberg technology don't forget so much to recap well it's been a short week packed with news on our podcast Apple Spotify I heart wherever you get your podcast from New York and San Francisco this is Bloomberg [Music] foreign

Channel: Bloomberg Television

Views: 2,388

Keywords: Bloomberg

Id: OnwOuq3Kp-Q

Length: 44min 26sec (2666 seconds)

Published: Thu Jun 01 2023