Hardware, innovation, money and power
collide in Silicon Valley and beyond. This is Bloomberg Technology with
Caroline Hyde and Ed Ludlow. I'm Caroline Hyde at Bloomberg's world
headquarters in New York. And I'm Ed Ludlow in san francisco.
This is Bloomberg Technology. Coming up, Microsoft to invest one and a
half billion dollars in a UAE top firm. It's g 42 that says the US government
pushes the Abu Dhabi business to end all cooperation with China.
We analyze the business on the political drivers.
Europe has its eye on fintech and crypto.
We sit down with the EU's Commissioner for Financial Services on her visit to
Silicon Valley. Is AI is all the rage in banker earnings
and we digest a $250 million fundraise for a Silicon Valley chip developer
reveals, which is yet to bring about its first product.
We discuss the race for infrastructure and so much more throughout this hour.
We focus, though, just on the public markets, which in the United States are
relatively sanguine right now. The Nasdaq is off just by about a
quarter of a percent. The action is actually what's happening
in Asia and Europe, trading both those benchmarks under a lot of pressure,
following some sell off that we see in the US.
But really what's happening happening also in the bond market yields up three
basis points on a two year yield that at one point was very close to the 5%
level. We're all eyes on Jay Powell, what he
sees for the future of Fed policy when we still got such a resilient US economy
and inflationary pressures. Moving on, have a look at what's
happening in the world of as a dollar that rises for five straight days and
having the best run in at least a year. The Bitcoin on the flip side versus the
US dollar is down 1.7%. We're at $62,000.
So there's still some risk aversion in this market when it comes to certain
risk assets. We'll look again on the micro.
I'm continuing to look at Tesla. This is a two day chart.
The stock down another 4%. We broke the news yesterday that the job
cuts at Tesla will be nearer to 20%. Elon Musk's memo said more than 10%.
We will separate the story that Drew Baglino, an 18 year veteran and one of
four named executives have resigned. He then confirmed it on social media.
The milestone is that Tesla's now below $500 billion of market cap.
There's a lot of questions we're going to ask some of them throughout this
week, throughout this quarter about what comes next for the name.
Also, looking at Microsoft, up half a percentage point, had a slow start to
the session. The headline on news is the $1.5 billion
investment in G 42. There's a back story which is you know,
I've been looking into for a few months gee 42 really likes what Sam Altman and
open they are doing. I think they want a piece of that they
now have a relationship with Microsoft. I wonder if that helps.
And the back story is a political one as well.
That G 42 is now safe for a US company to invest in.
It's very complicated, but it's a name we're going to hear more and more about,
certainly. And let's get straight to it.
Microsoft and the deal. Bloomberg's Dean Bass, you come of this,
of course, with the Microsoft expertise covering all things of that business.
But just take a step back. I mean, what had to happen first, what
led to the divestment of China, the move away from China
store? So what about your Bloomberg reporting,
including my other problems have been tracking for a while, is that there have
been these behind the scenes secret talks between the US government and G
42. And what we reported last night is that
that resulted in kind of a secret pact that was reached
in which 40 agreed to divest from China. Remember, G 42 was under a lot of
criticism from US government, from some members of Congress for its close ties
to some Chinese companies, including far away.
And they were under threat that they might not be able to continue to have
access to the key and video chips that they need for their API work.
This kind of, you know, secret pact resolves all of that and used the way
that this Microsoft deal. You.
I think it's worth explaining to our audience what G42 is.
It's essentially an investment firm. But in all the conversations I have, G42
comes up a lot in the context of the Sam Altman CHIP initiative.
We've reported that, you know, Sam Altman is met with G42 that G42 wants to
give him lots of money. But I don't think we've ever stopped and
said, What's g42? It's essentially the biggest AI company
in that region, the UAE, large parts of that part of the world.
It's a holding company that's focused on AI, but it has its hands in a lot of
different parts of Asia. There's significant health care
initiatives that it's working on in artificial intelligence.
For Microsoft, this is a multi-stage deal and they want to take advantage of
several parts of what G42 offers them, including Microsoft president Brad Smith
told us yesterday In a later stage of the deal.
They're hoping to put Microsoft services in G42 data centers and use that as a
way to access markets in Central Asia and Africa, where Microsoft doesn't
really have a presence, doesn't have its own data center.
So that's another role. The g42 ways of using this speed of
cloud and AI into some of those regions where U.S.
companies don't really have access. That's part of the reason why the Biden
administration wanted to make sure that it removed G42 from the Chinese sphere
of influence and got closer to US companies in the US technology industry.
Bloomberg's Dana Bash. One of the bylines on what is one of the
most read stories and important pieces of reporting on Bloomberg this Tuesday.
We've had the reporting and the details. Let's get some more analysis and
reaction with Dan Ives of Wedbush. And Dan, you know, you covered this from
Microsoft's perspective, but you've written a few notes about the bigger
picture as well with what's happening with open air and infrastructure build
out. Just give us your kind of scorecard on
this Redmond, UAE, tie up. I mean, this is a massive strategic bet.
It's another flex the muscles for Redmond in the down because really for
G42, they had a choice. China or U.S.
and Redmond. And you're going to take Microsoft every
day of the week right now, along with Nvidia and from Microsoft, it's just
another doubling down. They're playing chess.
Others are playing checkers. Then Microsoft is forming a lot of
relationships with a lot of different people.
Are they just making sure they're covered, basically?
Well, look, they know they're way ahead. So what they're doing is they're putting
the guardrails up really around the world.
So any blind spot, Middle East being one of them.
They're going to bet on the big horse right here.
And they ought to be even had to divest the Chinese keys.
Also making sure that within the Beltway, two or two area code, there's
no issues there. So for Microsoft, this is an example.
They're miles ahead. They're just further and further gaining
share from an AI perspective, given this A.I.
revolution, where them all men, the golden child, they AI resides.
Don What's interesting is in this case, US government played a role in other
areas. I think of just what happened last week
with the UK CMA worrying from a regulatory perspective about certain key
players having a web of relationships and then crossing over to much in the
world of AI. Will this be regulated from a
competition perspective? Well, I think what Brad Smith knows and
as well as anyone, he's going to proactively Microsoft make sure us and
Beltway are good with this because they don't want all of a sudden a year, 18
months, and that this becomes a bigger issue.
And they checked all those boxes. The Chinese divestiture, I think, was
important from a g42 perspective. And now it's a green light going ahead
at the same time where Amazon and Google.
So trying to play catch up and this is Nadella just continuing to make
aggressive bets and we'll see it again, earnings where they continue to be the
lead from an AI response phenomenal game of chess as we sort of
referenced. And what is on many players minds right
now is where are the bottlenecks. Time and time again from Sam Altman and
many that it's to do with energy and it's to do with access to AI
infrastructure. Is that what you hear from the leaders
of these companies and how much more investment are we likely to see to try
to see a solution globally for that? Yeah, and I think Ed nailed it.
When you talk about on the chip side, there's a two parter here because I
think this is ultimately going to lead from a chip perspective to more and more
investment from Middle East towards some of the all men in chip ventures that's
now going on within open Microsoft. Of course, energy continues to be the
constraint, but use cases are exploding across the board.
And now this fourth industrial revolution here being led by Nadal and
of course, the godfather of AI Jensen, a video.
Love having the perspective deniers who can make it a global conversation.
We thank you from Wedbush. Meanwhile, let's just go to another key
player that many and keep an eye on. Apple has pledged to buy more components
and accessories for its devices from Vietnam suppliers.
Now, the move is a big boost for the Southeast Asian country as it emerges as
a global electronics hub. Apple is exploring ways to shift
production, of course, of its covet gadgets away from China.
That's to minimize those geopolitical risks.
And the iPhone maker is exploring India and indeed Vietnam, which has seen about
a fourfold increase in companies assembling Apple products over the past
decade. Meanwhile, coming up.
Well, let's talk about global regulation for a moment.
We're joined by the European Commission of Financial Services to discuss all
things digital finance and regulation there.
Ed, I'm taking a quick look at shares of the Swedish company Ericsson.
This is the Swedish shares, 2% higher. As it stands, the US ADR is actually a
little bit higher even still than that beat on earnings.
And it's really interesting is the company going through restructuring at a
time where the mobile phone or cell carriers are just not spending on 5G
network infrastructure, but the market likes what it what it sees.
Stock up 2%. This has been by technology. Okay.
The European Union is back in Silicon Valley, and this time the focus is
payments, crypto and the impact of artificial intelligence on banks.
European Commissioner for Financial Services Maria McGuinness has met with
Coinbase and Plaid and has meetings lined up with Apple and Stripe.
I'm delighted to say the Commissioner joins me now on set.
Welcome. Yeah, delighted to be here in person.
It's been a while since I was this side of the country, so it's good.
It's interesting the ongoing relationship between the commission and
Silicon Valley based companies. You forget there are more than 400
million people in Europe who have access to these companies and their products.
Just summarize the purpose of your visit and your objectives.
Well, it's always good to meet colleagues.
You can talk to them by phone, but being here in person matters.
We're at a critical stage. So this commission is coming towards the
end of its mandate. There's been an awful lot of change
around finance, digitalisation. We have artificial intelligence and
really we're here to exchange views and to listen to what's happening on the
ground here because it's a fast moving area.
Even since my taking up this role, we've seen a huge evolution in banking Covid
accelerated the use of digital payments and we want payments to be instant.
We've got legislation around that. So basically what we're trying to do is
harness the benefits of all of these technologies, but all the while looking
at the risks that might be involved in them.
And our idea is not to stifle innovation.
And this is a place where innovation flourishes.
So it's good just to exchange. We have a lot to discuss.
I'd like to very quickly just tick off crypto Coinbase from the show with me
last week, and they had a number of grievances, particularly about
legislating for regular regulation instead of going through courts.
What were the grievances they brought up to you?
Well, in the context of Europe, the grievances are didn't arise because
actually they feel comfortable that Europe has provided certainty with our
markets and crypto assets legislation. And while there might be minor issues
within that, at least they know how they will be regulated and licensed at the
European level. I think here it's different.
So we were able to talk about the benefits of certainty.
Very often Europe can be accused of being a rules based, which I think is
actually a good accusation because rules matter, but sometimes overregulating.
I was very interested to hear how certainty is important for a company
like Coinbase, and I was also interested that maybe a few years ago this was an
area of concern. But actually when you listen to that
company and its vision for what could come next in terms of innovation and how
they believe regulation is important, I was very encouraged by that.
So we didn't have so much of the grievances.
I mean, there are issues that they will talk to us about and we're very open to
talking with and to those who are using our legislation who need clarification.
Commissioner McGuinness, Can I push back a little bit because I'm reading a
report from Tether, for example, now nowhere near as much oversight as a
previous business we're just talking about, but key player within a
Stablecoins the player in Stablecoins many would say, and they've gone on the
record saying the message being sent is that Europe does not want crypto
regulation is had. That is largely limiting access,
especially for retail investors. Brussels effect for many feels like a
cooling effect. Well, look, everyone has a different
opinion on this and I think we had three options when it came to crypto.
Ignore us and let things evolve banished because we couldn't control it.
Or and this is the approach we have taken regulated so that those that are
in the industry have certainty about when they're dealing with clients within
the European Union. And I think we took the right course.
Now it's a fast moving area and equally many who are in that space originally
came to it because they didn't want to be in the regulated zone, if you like.
But I do think there's more maturity now that those who want to have a lifetime
in this business which will evolve over that time want certainty in terms of
their dealing in the European Union. And we have provided that certainty.
And I think that's all to the good of the industry itself.
It's, in one sense has overtaken some of the conversations around crypto because
crypto has been around for some time. It looks like it will prevail.
There are different views in Europe about whether crypto is an asset or not,
and we have all of these conversations. What we do in the Commission is bear in
mind, you know, the greater good. So is the balance of regulation better
than allowing things evolve without any guardrails?
Let's review those got regulated moment Commissioner.
Apologies to drum pin, but the guardrails, for example, they asked how
much you think is a concern in terms of, well, financial stability right now?
Well, I mean, that's a very big question.
I think the issue of a big question. Yeah, but it's such a big question that
when you listen to some of the scary stories around, they are you would
really want to stop it immediately. But it is not something that you can
actually continue. What we can do is try and look in a
measured way of what are the risks, because not only is high risk, in fact,
some of it is extremely useful. And again, our approach and it sounds
dull, but it's important to say it, it's about balance.
Allow the industry evolve, but allow those who are, you know, if you like, in
charge of watching these things like the commission and our parliament to have a
say in how it evolves and we want it to do good.
So we again look at the risks involved rather than allow an unfettered
evolution of artificial intelligence which is already being used in the
financial system. In any event, I gather I have one who
talks to me on my my banking app. We get on sometimes, not all the time.
And I think behind all of this is a desire to harness technology, but not
remove the human dimension around technology.
And I think there's a risk that that could happen.
So we've been mindful of all of these things and we have been careful to
categorize where the risks are conscious also that this will evolve.
You know, it is evolving before our very eyes.
It is, Commissioner, and that's why you've got plenty of conversations still
be had. We wish we had longer with you.
All right. Well, it is wonderful to have you on the
show. European commissioner for Financial
Services. Meanwhile, coming up, reports that
raises more than $250 million in its latest funding round.
It's a company trying to take on the likes of engineering, renamed with maybe
a bit of a cheaper option. More on that next.
This is pretty big technology. Rivas is a Silicon Valley chip developer
without a product on offer yet, but it's raised more than $250 million in an
oversubscribed funding round with Matrix Capital Management, the largest investor
in the round. Joining the board, delighted to bring in
Revil CEO Puneet Kumar for more. This isn't a chip based on risk five
architecture. I hear a lot about that at the moment as
an alternative to NVIDIA, but let's go back to the idea that that is in design.
You're in the R&D phase. That's correct.
The 250 million, where does it get you? Okay.
So first of all, thank you for having me on the show.
It's a it's an honor to be here. What we plan to do with this fundraise
that we are announcing today is to really primarily support our increasing
customers. We have huge demand coming at us,
increase customers if you haven't got anything to give them yet.
So we've been speaking with a lot of potential customers already and they're
very intrigued by our design. What we have to offer and what we are
going to do today is use this money that we have raised to expand our operations
globally, increase our hiring, increase our engineering efforts, get to
production of our parts and really get to trials.
I hear increasingly there is a market for risk five based accelerator here.
It's a point of differentiation from NVIDIA and preparing for upcoming
generations. But it doesn't seem like that markets
here in America, no one's taking it seriously.
That's right. Is it in China?
Actually, that's not true. It is here, too.
If you in the last few days, you saw an announcement, for example, from one of
the big air drivers that they are using risk five and they're in their chips
already. So we definitely see a place for risk
five in the air market. And there's several companies in this
market space already. For those who aren't as well versed in
risk, five Buzz is our architecture breakdown.
What alternative it offers. Is this about cost?
Is this about ability efficiency? It's actually a combination of many
factors. Cost is just, you know, saving in
licence fee, for example, rather than paying somebody else.
But the really the biggest thing I think is drives a lot of innovation because
it's a brand new architecture. It's open.
So that allows anybody to do research with that architecture.
And this is where we kind of see innovation happening in the next 5 to 10
years and eventually we think will displace
many of the other players in the market, the existing incumbents.
This really is the Linux moment. We think risk free brings a Linux moment
to instruction set architectures for CPU designs.
Therefore, there is this hand-wringing going on about the access to
infrastructure need for energy. We talked a lot about just the teaming
up of Microsoft and G42 the the obvious global conversation going on around
access to chips. Who would be your customer?
Are you going after Nvidia's customers or are you going after ones that can't
access NVIDIA? Okay, so I think first of all, we are
going after any customer that is really using a lot of data.
That's our biggest thing is any data driven business that needs more hardware
support is our potential customer. Now we know that the big three or four
players in the market, obviously NVIDIA is the biggest.
There's AMD, there's Intel and there's many other startups in the area that are
building hardware for A.I.. We think the field is growing fast
enough that we have ample opportunity to address any of the players who can't get
access to inferior hardware or who want to look for an alternative, whether it's
cheaper, whether it's more power efficient.
There's many factors that would go into the decision making process if you were
associated with a company, a semi, that that company was sold to Apple.
Yes, there has been a piece of legal proceeding or litigation that's now been
settled, which came before this funding round.
Could you just explain that and where we sit with it?
You know, what we're celebrating today is our fundraise.
What we are really trying to do here is keep out our product.
Yes, there was a litigation and it is behind us.
But what we really are trying to do today is focus on our product going
forward. We've been beavering away at this for
about three years, laser focused on getting what we where we want to get to
and we really look forward to our product being announced in the next six
months to a year, come back when the product is ready to show.
Absolutely. All right.
We're delighted to reveal CEO Puneet Kumar, thank you so much.
Coming up here on Bloomberg Technology, going to break down all of those bank
earnings we referenced earlier and what they told us about the story in the
world of banking. That's coming out next.
From San Francisco, this is Bloomberg Technology. Welcome back to Bloomberg Technology.
I'm Caroline Hyde in new York. And I'm Ed in San Francisco markets
Kyra. Yeah, a quick check on them because
we've seen perhaps a little bit more stability in the U.S.
that you've seen abroad. Certainly the Nasdaq 100 actually
managing to turn green at the moment. The benchmark seeing a little bit of
inbound as we await Jay Powell speaking a little bit later.
All important for the bond market, which has seen a sell off earlier and two year
yields near a 5% handle. But nevertheless, we see some money
going back into big tech MSCI all country world index.
So under pressure. Europe sold off hard.
So did Asia. In fact, playing a little bit of catch
up to some of the risk aversion we've seen in the U.S..
Bitcoin off by 1.3% as the U.S. dollar just marches higher.
What will we hear on the inflationary pressure from Power City 2000 and
Bitcoin versus US dollar? Move over.
Have a look at some of the individual names.
Now I said that Europe was under pressure.
I start with a name over in the UK wise, transfer wise, and many would know it.
Basically sending money abroad down almost 9%.
That revenue was up 24% for this particular fintech darling just speaking
to the European Commissioner all around digital finance, but it was not as much
as the market wanted to see and were under pressure significantly, Tesla off
by more than 2%. You all reporting add front and center
as they see executives lead and of course leave and indeed potentially as
much as 20% had cut and cuts in certain areas the business.
Netflix though your outperformer today we brace ourselves for earnings at the
end of the week. We're getting some upgrades to the price
targets coming from various analysts. Today we're at 620 for Netflix.
But what are you looking at on other earnings areas?
Well, banks and banks are big. This Tuesday has been changing the game.
I just want you to listen to a soundbite from PJM CEO David Hunt, who joined us
earlier. Here's what he said.
Technology now is allowing us to move data to the cloud and then to do things
with artificial intelligence that we never could do before.
And so it now is actually being used by our investors.
It's actually being used by the front line to make decisions.
That's a very different use of technology than it was before.
And I think that's very exciting. Let's bring in Glenn Beck Sonali Basak.
The key Wall Street name Bank of America is what's moving in the markets and
Jim's thoughts on the story. And banks could have put it better than
I ever could. Just summarize what's happening this
Tuesday morning. There are a few things happening at the
same time. When you think about Bank of America, it
is their propensity to bring new clients in, lend them money, and also keep a
handle on costs. One thing being asked of CEO Brian
Moynihan was if there's further investment in digitization of the bank
would help bring their efficiency ratio down below 60%.
And you had CEO Brian Moynihan say they're really pushing to get that done.
Now, some interesting statistics for you here, Ed, when you think about how
quickly things are going digital, it's that this quarter alone, Zelle
transactions at Bank of America passed the combined number of checks written,
plus the amount of cash withdrawals from tellers and from ATMs.
So that is how quickly money is moving online at Bank of America.
Now, the faster they can get this done, they believe that they would be able to
create cost savings not just for themselves, but for their customers as
well. That's one side of things, how the banks
themselves are using digitization and AI to really drive efficiency.
The other end of things here, I want to pull up a quote from David Solomon,
Goldman Sachs CEO just a day ago about how the significant demand for AI
related infrastructure and as a result, financing would be a tailwind to their
business a day later just today. Now we have Morgan Stanley saying that
it had the top amount in equity underwriting fees so far this year.
The more that people are raising money in these markets, the more you can fuel
some progress in terms of fee generation for these banks.
Isn't that fascinating because AI is almost a driver on both fronts.
We got the cost efficiency. We've also got the fact that anything
with air in its name is looking to go public at the moment or indeed try and
spin that story. How much resilience is that coming from
some of these CEOs playing catch up ultimately to Jamie Dimon, who seems to
have led the pack when it comes to A.I.? Well, one thing that's interesting is
you look at the bottom line here and you look at how much they're spending on
technology. You have costs rising in every bank,
particularly in terms of compensation, even with headcount falling.
But for many of these banks, including Bank of America, Morgan Stanley, you're
seeing technology really be on the rise as well when you look at the costs
rising at these firms. So they are competing not just to invest
in talent, but also to invest in the way of automating these banks as quickly as
humanly possible. Because at the end of the day, they
believe it will help their bottom line. It's an interesting, though, Bank of
America having its worst day since, well, the Silicon Valley Bank collapsed
back in March 2023, which is all about money moving a bit too fast to
everyone's pleasant relationships with it.
Sonali Basak, we're pleased to have you on the show today to break down.
Look, I in tech and banking and let's stick with that because over at
Jefferies, I know a private Internet conference is on us shoulders.
We've got Santa monica is where it's being held.
500 tech leaders are going to be meeting to discuss guess what are emerging
opportunities the next cycle, the growth in tech.
Gaurav Kishor is with us. He's Jefferies Global, co-head of
internal Internet investment banking joining us.
And Gaurav, congratulations on the event that's coming today.
What is front of mind from the private allocation of money right now?
Is it trying to pick the winners in this environment?
Firstly, thank you for having me and thank you for covering our event over
the next couple of days. What we have here this week is a
collection, as you mentioned, of about four 500 company company execs as well
as investors in tech and in consumer tech in particular.
This year we have a team around AI, as we as you've been talking about, and
it's hard to not get excited about what the prospects are from an AI
perspective, especially in private company.
And I think there's two elements to this that we are looking for this week.
One is the first company. So think about, you know, companies that
are trying to disrupt existing monopolies, existing large industries,
whether that be everything from financial services to nursing to the
search and so on and so forth. There's a whole universe of those
companies. And then you've got the large consumer
Internet companies that are using AI today in their business, both
perspective of new services as well as from taking out costs.
And so that will be a big theme across both of those sectors.
Do you expect M&A to be driven by this wave?
You know, not in a meaningful way yet. And what I mean by that is at least a
lot of the companies that we have here right now are still relatively early in
their evolution. Yes, there is a lot of hype.
Yes, they are getting a lot of investment from early stage and late
stage investors, but they're still early in where they sit in the revenue profile
of their companies in the maturation. Of business models.
And so I think everyone is monitoring it.
I've talked to several companies, large company executives that are here, that
are doing meetings with some of these companies that are monitoring how this
is going to impact their own business. But I think acquiring something is hard.
These are these trade valuations that, as you noted, and acquiring for a big
company to acquire something for billions of dollars when it's not really
generating meaningful revenue, I think is going to be really hard.
So I don't think it's going to be a big M&A theme from that perspective.
I think it's going to be a big investment theme today.
And by the way, these companies can get very big, very quickly.
I think that's the one thing to look out for.
This is there's not been as interesting of a time in consumer tech in particular
as there is today, because a lot of the companies that are in the room today
could be breakout companies in the next one to 2 to 3 years.
Right. These could be household names very,
very quickly. It's the same in the IPO market.
September or the little Reddit pop of late, you needed to have an AI story.
You called them frontline names or names that needed an AI story, even if they
had nothing to do with I. What I'm interested from you is in
attendance this week. What's the proportion of what you'd call
genuine A.I.
companies, builders of large language models versus those that just know in
the shop window? They need the letters and AI to get some
funding. Yeah, Yeah, it's a good question.
You know, I would say probably about, you know, 25, 30% of the companies that
are here are what I would say, AI first businesses.
So, you know, we have, you know, companies like perplexity and gleam and
entropic and duckbill and live and labs and so on and so forth.
Yeah, Quora and with Poe, AI, etc.. It's, you know, I first companies that's
probably about 25 30% of it there. For the rest though there will this team
is still front and center. I'll give you examples you know we've
got a number of companies in travel tech businesses like you know Hopper and a
company out of Korea, you know, and so on and so forth.
They're going to talk about how A.I. is transforming their business.
So it is not a you're right that it's a little bit you know, they have to talk
about it, but in many cases, it is truly what is driving their business, you
know, similarly will have, you know, companies on the music side and
companies in fintech and in health tech. And this will be a big theme across all
of those as well. Gaurav Kita Jefferies, Global co-head of
Internet Investment Banking and Carry. He mentioned one of those names that's
coming up. Yeah, I cannot wait to bring you all the
highlights from the Jefferies Conference.
We're going to be joined by the CEO of Perplexity.
That's coming up next. Meanwhile, let's just go back to the
public markets for a moment because we are also keeping a close eye on Live
Nation. The Justice Department may file an
antitrust complaint as soon as next month aimed at forcing Live Nation to
spin off its ticket markets. Ticketmaster Ticketing Business.
The Power of Taylor Swift, which has a 6.8%.
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technology's live event in San Francisco.
Check out the QR code for the details. This is Bloomberg. Time for talking tech.
First up, Google. DeepMind CEO Demis Hassabis says the
company will spend more than $100 billion over time developing A.I.
technology. The comment comes as Hassabis was also
at an event in Vancouver about a potential $100 billion supercomputer
dubbed Stargate, which is being planned by Microsoft and Open A.I., which was
reported in the information last month. Plus, crypto com is in the middle of a
hiring drive that could see its headcount grow by a total of 1400
people. It's the latest sign of an improved
employment outlook in the sector. Now, remember, Crypto.com cut a fifth of
its staff in early 2023 to control costs.
Following a market rout, the firm began hiring again.
Tokens including Bitcoin rallied rival such as Coinbase, Kraken and Binance
have also been adding to their staff, and matter's oversight board is
investigating the company's handling of AI generated deepfakes earlier this
year. Sexually explicit Deepfake images of
Taylor Swift flooded Facebook and other social platforms, prompting an outcry
from the White House experts and other advocacy groups.
According to a statement made by the board, It will evaluate whether two
separate A.I. created images depicting nude women
posted on Facebook should have been removed under matter's content policies.
Caroline I want to focus a bit more on some of Metters business models and
indeed what's been happening with our big tech today in the age of social
media. It's very easy to be deceived, but the
latest scam is proving to be deadly. It's exploiting the shame and
embarrassment of teenage boys. Joining us now, Fleabag's Olivia Covell.
And I'm not ashamed to say that I cried several times reading the story on the
train this morning. What Businessweek and what your
reporting does so well so often as you shine a light on a few key individual
stories, you make the story real. Jordan Dray is one of them.
Can you just articulate what happened to him and ultimately how many more numbers
of people this was happening to? Jordan, to me, fell victim to what is
known as a sextortion scam. This is sexual extortion.
Essentially, he was contacted by what he thought was a teenage girl on Instagram
and she turned the conversation flirtatious.
She sent him a naked photo of herself and asked for one in return.
When Jordan complied and sent a nude photo back to this individual through
Instagram. Immediately he was blackmailed for
money. So what actually unfolded and what he
had no idea of is that who was behind that account was actually con men or
scammers based in Lagos, Nigeria, who had been contacting hundreds of teen
boys across the U.S., reaching out to them to try and elicit a nude photo from
them to then blackmail them. This crime, sextortion, is now the
fastest growing crime in the U.S. The FBI has been sending out pieces
because, sadly, it's resulted in the suicide of more than two dozen teen
boys, including Jordan Dumais and a guilty plea coming from two very young
boys themselves. Ultimately, and you just adults in Lagos
who are now here and in the US. SNAP did respond to your reporting
saying they're ramping up our tools to combat sextortion and we have extra
safeguards for teens to protect against unwanted contact and indeed matters.
Global head of safety you've been speaking to saying that sextortion is a
horrific crime and we spent years building technology to combat it and
support law enforcement investigating and prosecuting the criminals behind it.
Ultimately, you're saying this is still growing.
What more are stories are you hearing or indeed ways in which.
Is it technology that ends up being able to be a force against this?
Yeah, I think it's a great question. I mean, for the social media platforms,
they don't want this occurring. You know, they are these individuals,
these bad actors are hacking into Instagram accounts to pretend to be
these teen girls in order to coerce these nude photos.
So for the platforms, it becomes how do we prevent this from the outside?
So they're using artificial intelligence to do things like to speak to detect
suspicious activity on the platform. Mixer is now sending sextortion focused
safety notices to teens saying, you know, this is what sextortion is.
Be wary. Be careful of who you're talking to.
And just last week, they announced that they're going to be automatically
blurring nude images that are sent through the platform.
So all of these steps are being taken in an effort to try and curb this crime.
But from the FBI's perspective and law enforcement perspective, it's just
growing too big. It's moving too fast and the scammers
are too ruthless. And how they blackmail the teens, they
push them to the edge and beyond to try and get as much money as they possibly
can from these young boys. Olivia, this is the latest in a series
of investigations you've done across quite a broad domain.
Of air generated content on social media.
Deepfake pornography. And now this piece you talked about the
efforts there, but also the challenges. Is there one outcome from your
investigation since publishing this story that you can talk about anything
that happened in response to your reporting?
Well, I was surprised to see Mr. announced just last week that they're
going to be blurring nude images since through the platform.
I think that is a great step in the right direction.
And you're right, I tend to focus these stories on, you know, the dark sides of
social media. And there's obviously so much good that
social media gives to children and young people as well.
These are the image cases. And I think it's really important for
our viewers and our readers to know about the risks of social media and
specifically in this story for young teen boys to understand.
Maybe the person that you're messaging isn't actually who they say they are.
Maybe you need to be more cautious about how you behave on social media, what you
put out there to the public, and how you talk to individuals who are ultimately
strangers, people you don't know. I urge everyone out there to go read
your reporting and indeed the implications of it.
Olivia Calvo, thank you so much for spending time with us today to talk
through it. Meanwhile, coming up, we're going to do
a bit of a heart pivot. I'm sorry.
It's never easy to do, but going back to the Jefferies Conference and we're going
to be talking with the CEO perplexity. That's next.
This is Bloomberg Technology. Let's get back to the Jeffries private
Internet conference. One major theme, the theme is I perplex
you. I have been Sreenivasan is joining us
now from that conference and perhaps see, of course, the developer of an AI
based search engine platform. And I hear the name perplexity a lot.
I know a lot of people use perplexity and a lot of people talk about
perplexity. Why are you at Jeffrey's?
What do you want to get out of it this week?
I'm excited to meet people here. And, you know, perplexity is still not a
household name yet. I want it to be used by every person,
every organization, and it always helps to spread awareness and then get more
people excited about perplexity. There have been reports that you are now
a $1 billion valued startup. There is a lot of interest in your
capability. Talk to us about the financial health of
perplexity right now. I think like what we announced was, you
know, when I when I was the last time here with you, the Jeff Bezos, around
$120 million valuation. We haven't made an official announcement
on a new round yet. We have more to share soon.
Very shortly. Oh, come back.
Talk to us about that for now. What strives are you making?
Are people switching from, say, Google as a search engine to you?
What do your customers say are and what they see is like they are viewing
us as like, Oh, I either use you or Google.
They're still happy to use Google for like quickly getting on to like a
website. Like they didn't want to go to
Bloomberg.com. They're just happy to use Google for
that. But let's say they want to know, like
what? What is the latest thing going on?
Jeffrey So like, like who are the speakers at this conference that I
should be aware of for my business? Like, these are things are what
perplexities more useful for. So they are beginning to see us as a
different to an answer engine that is very useful for directly coming in,
asking questions and doing your research and our growth in the United States.
Ever since we announced the funding round last time, along with you guys,
has been really good. And that's also translated a lot to
growing our revenue because we always wanted to be a tool that's used by
people in the high income countries. Yeah, that's beginning to show up in our
numbers too. What am I, a business model?
There's a lot of interesting talk of how well Google itself might start charging
for its offerings within its enterprise. Are you seeing enterprise adoption for
you and your thinking about charging? Definitely.
We're considering it. And there will be something which we
will be sharing soon, something more than that.
And the way I see it is like a lot of companies, a lot of people told me that,
you know, I wish I could use perplexity at work, but my company is abandoned.
Yes. You know, so that's a problem to solve
and we are going to work on it. RV.
What's the challenge right now for a company that is building lands and
working at this level? What is your day to day that you're
facing? I mean, the biggest challenge is
honestly, the the pace. I wish this field keeps changing every
week, right? One point we were all the charity for is
the motto. And it's like there's nothing else that
matters. And everyone was like, Oh, you cannot
build on top of them because, like, they're eventually going to do all the
product and it doesn't matter. There's no independence from owning the
AI. And then Anthropic puts our clock three
and the clock three is even better than before for at least the Opus model.
And they're like models much better than 3.5.
Cheaper, faster. Open source is moving fast.
Databricks released a model. The SEC better than 3.5.
Mr. Housekeeper.
It's just the pace and the pace of the show went too fast as well.
We wish we had time with you. Our universe Perplexity CEO.
Wonderful to have his thoughts. Let's Bloomberg Technology.
