CAROLINE: I AM CAROLINE HYDE. THIS IS BLOOMBERG TECHNOLOGY. APPLE IS MAKING ITS LATEST MOONSHOT TECHNOLOGY ON GLUCOSE TRACKING. TESLA ANNOUNCES A HAS CHOSEN PALO ALTO FOR THE COMPANY'S GLOBAL ENGINEERING HEADQUARTERS. WE WILL HAVE AN EXCLUSIVE
CONVERSATION WITH THE CEO OF MERCEDES. THAT AND SO MUCH MORE COMING UP, INCLUDED -- INCLUDING EARNINGS. MASTEC MANAGED TO CLAIM TO THE GREEN, OTHER BENCHMARKS IN THE RED. WE MANAGED TO PUSH ON A 10TH PERCENT HIGHER. THE BEARS NOW ARE RUNNING BOWLS IN THE RUN-UP.
THE 10 YEAR YIELD IS DOWN THREE BASIS POINTS. I WANT TO GET TO SOME OF YOUR INDIVIDUAL MOVERS AFTER THE BELL. LET'S DIVE INTO NVIDIA. PLOSSER MY MR. IN TERMS OF REVENUE.
-- PLUS OR MINUS 2% IN REVENUE. ETSY IS UP 5%. EBAY ON THE DOWNSIDE. THE MARKET REASSESSING WHAT THE FORWARD GOING LOOKS LIKE. LET'S GET INTO APPLE. WE SAW SOME GYRATIONS THROUGHOUT THE STOCK ON THE DAY. LOOK AT THIS PEAK HIGH AT THE
SPEAK HYATT ABOUT 2:00. THAT WAS NEW YORK TIME. WE GOT A SCOOP. MARK GORMAN BROKE THE STORY. TALK US THROUGH WHAT THIS WILL
BE ABOUT. >> ALL ABOUT THE WATCH AND HEALTH CARE AND GLUCOSE TRACKING. THE HOLY GRAIL FOR A SMARTWATCH TO BE ABLE TO TELL YOU ALL OF YOUR HEALTH METRICS.
YOU WANT TO KNOW HOW MUCH GLUCOSE IS IN YOUR BODY BECAUSE THAT IS AN INDICATOR OF PREDIABETES OR TYPE 2 DIABETES OR OTHER HEALTH CONDITIONS. TODAY GETTING THAT DATA REQUIRES THE PERK OF THE SKIN OR BLOOD DRAW FROM YOUR VEINS. APPLE WANTS TO CREATE A SYSTEM USING CHIPS BUILT INTO THE APPLE WATCH TO GET A READ ON WHAT GLUCOSE YOU HAVE IN YOUR BLOOD. CAROLINE: EVERYBODY THAT VIEWS THIS SHOW
WANTS TO UNDERSTAND THE ACTUAL TECHNOLOGY BEHIND THIS. HOW IS THIS DIFFERENT FROM WHAT IS ALREADY IN THE MARKET? >> THERE ARE SOME PRETTY HARD-CORE TECHNOLOGY APPLE IS WORKING ON TO MAKE THIS HAPPEN. THE TECHNOLOGY WILL USE A CHIP THAT CAN OUTPUT LIGHT OR LASERS INTO YOUR SKIN AND READ HOW MUCH GLUCOSE IS IN YOUR FLUID.
THAT IS THE FLUID THAT COMES OUT OF YOUR BLOOD CAPILLARIES. EVERYBODY HAS A ACROSS THEIR BODY. THEY CAN USE LASERS AND A HAS SENSORS THAT CAN READ A CONCENTRATION OF LIGHT IN YOUR SKIN TO KNOW HOW MUCH GLUCOSE IS THERE IN ORDER TO GET THAT READING. CAROLINE: INTERESTING. JP MORGAN INC. SAYING FOR NOW THIS IS NOT THE THREAT TO DEVICE MAKERS.
WHO WAS BUILDING THIS? >> IT IS DEFINITELY NOT A THREAT RIGHT NOW BECAUSE IT WILL NOT BE ON THE MARKET FOR ANOTHER THREE OR FIVE YEARS. I WOULD AGREE WITH JP MORGAN THAT IT WILL NOT HAVE AN IMPACT IF HE IS NOT HEADING FOR THREE YEARS. AFTER IT ARRIVES, THERE WAS SUCH A BIG MARKET SHARE ALREADY AND IT WILL TAKE TIME FOR APPLE TO PENETRATE THAT MARKET. I WOULD AGREE AT LEAST IN THE SHORT TERM. APPLE HAS A SECRET MOONSHOT TEAM. THIS IS THE TEAM DEVELOP IN THIS MOONSHOT ALONG WITH OTHER PROJECTS. CAROLINE: FASCINATING. MARK GURMAN, THANK YOU.
LET'S GET TO BREAKING NEWS. WE ARE TRACKING NVIDIA EARNINGS. MORE THAN A 7% RALLY. DO WE LIKE THE FORECAST? >> THE DATA CENTER WAS THE FORECAST AND THEY DID QUITE WELL ALTHOUGH IT WAS BELOW CONSENSUS. DATA CENTERS DIRECTLY TIME TO THE ENTERPRISE TECH SPENDING. IF ALL THE CLOUD PROVIDERS ARE INVESTING IN BUILDING MORE CLOUT CAPACITY, A LOT OF THAT SPENDING IS GOING TOWARD NVIDIA. YOU ARE NOT SEEING THE KIND OF CORRECTION WE SEE ON THE PC SIDE LIKE WITH INTEL CUTTING THEIR FORECAST. SO FAR THEY'RE SPENDING HAS HELD UP ACROSS THE
BOARD, EVEN WHEN IT COMES TO THE SOFTWARE SIDE. CAROLINE: WHEN I THINK DATA CENTERS I THINK ARTIFICIAL INTELLIGENCE. IT SAYS AI IS THAT AN INFLECTION POINT. HOW MUCH IS NVIDIA SET TO BENEFIT? >> THEY ARE THE LEADERS WHEN IT COMES TO DEVELOPING THESE CHIPS.
ANYTHING THAT HAS TO DO WITH PARALLEL PROCESSING, A GPU TYPE OF CHIP. I THINK INTEL'S BIGGEST PROBLEM IS THE FACT THAT THEY WERE NEVER ABLE TO GO BEYOND PC'S. NVIDIA HAS DONE THAT VERY WELL AND THEY REBUILD TO FIND THESE NEW USE CASES. EVEN THE GAMING SECTION DID BETTER THAN ACCEPTED -- EXPECTED. I DO NOT KNOW IF NVIDIA SHOULD BE TRADING AT FIVE TIMES INTEL'S MARKET CAP. TIME WILL TELL. CAROLINE:
NO TO BELL -- NOTE ABOUT -- NOTABLE BET INTEL HAD A SLASHING OF THE DIVIDEND TODAY. >> GROSS MARGINS IS VERY IMPORTANT. THIS QUARTER, THEY WENT BACK TO MAKE 60%. I AM WORRIED BECAUSE AS A SECTOR, THE CHIP SECTOR DOES NOT COMMAND THOSE HIGH GROSS MARGINS. OVER TIME, OTHER PLAYERS CATCH UP AND IT IS VERY HARD FOR A CHIP COMPANY TO SUSTAIN THOSE KINDS OF MARGINS WITHOUT RELYING ON SOFTWARE. CAROLINE: WE HAVE BREAKING NEWS COMING FROM THE CALL.
THE CFO SAYING NVIDIA SAW ORDERS PAUSE AS A TIMING ISSUE. THIS HAS TO DO WITH CLOUD SERVING PROVIDERS. >> THE OTHER RISK IS THE CUSTOMER CONCENTRATION. A LOT OF THAT DATA CENTER REVENUE IS DRIVEN BY CUSTOMERS, THEY'RE THE ONES BUILDING CLOUD CAPACITY. IT IS NOT AS IF IT WILL NOT COME BACK, BUT BECAUSE THE COMPANIES HAVE BEEN SPENDING AT ELEVATED LEVELS, THERE WILL BE A PAUSE. IT COULD BE TWO QUARTERS OR FIVE QUARTERS. CAROLINE:
ALWAYS GREAT TO GET YOUR IMMEDIATE ANALYSIS. COMING UP, THE AUTO SECTOR IS HUNGRY FOR CHIPS. WE HEAR FROM THE MERCEDES CEO HIMSELF. ED: WE ARE AT THE HEART OF SILICON VALLEY. AN EXCLUSIVE INTERVIEW WITH THE CEO OF MERCEDES.
THAT IS UP NEXT. THIS IS BLOOMBERG. ♪ >> THE CHALLENGE FOR THE INDUSTRY IS TO ABSORB THE ADDITIONAL COST TO PROTECT AFFORDABILITY. >> DOES THAT MEAN JOB CUTS? >> WE ARE NOT EXCLUDING ANYTHING FROM THE TASK. CAROLINE: THE COMPANY THAT MAKES JEEPS MAY HAVE TO FURTHER ADAPT ITS INDUSTRIAL FOOTPRINT. HE LEAVES NOTHING OFF THE TABLE, EVEN FURTHER ADDITIONAL JOB CUTS. LET'S TALK TO ANOTHER KEY PLAYER IN THE INDUSTRY. ED IS STANDING BY WITH THE
LEADER OF MERCEDES. ED: WE ARE JOINED BY OLA KALLENIUS, CHAIRMAN OF THE MINIMUM EACH BOARD OF MERCEDES. WE ARE HERE IN THE HEART OF SILICON VALLEY OF SUNNYDALE. >> WE ARE HERE AT THE TECH CENTER. WE HAVE ALWAYS BEEN HERE IN THE VALLEY.
WE THOUGHT IT WAS A FITTING PLACE TO ACTUALLY DESCRIBE WHAT THE FUTURE OF SOFTWARE AND THE CORRESPONDING HARDWARE LOOK LIKE IN MERCEDES. ED: I WANT TO START BY ASKING YOU HOW HIGH DOES SOFTWARE BRINK AS A PRIORITY FOR MERCEDES AND ALL OF THE THINGS YOU ARE TRYING TO ACHIEVE? >> SOFTWARE IS ABSOLUTELY A CORE COMPETENCE FOR THE CAR OF THE FUTURE. WE HAVE BEEN BUILDING UP FOR SOFTWARE COMPETENCE GRADUALLY OVER THE LAST FEW YEARS. THIS IS A SPACE THAT IS SO BROAD THAT EVEN IF YOU MAKE YOURSELF THE ARCHITECT OF YOUR OWN OPERATING SYSTEM, YOU DO NOT HAVE TO DO EVERYTHING YOURSELF. ED: LET'S JUMP INTO THAT.
YOU HAVE ANNOUNCED THE DEEPER RELATIONSHIP WITH GOOGLE AND IT IS A LICENSE AGREEMENT. YOU PAY THEM FOR HELP IN BUILDING OUT YOUR OPERATING SYSTEM. WHY DID YOU DO THAT INSTEAD OF TAKING IT ON TO OPEN SOURCE SOFTWARE OR JUST DOING IT YOURSELF? >> THE STRATEGIC PARTNERSHIP WE HAVE FORMED IS ABOUT TAKING TECHNOLOGY TO THE NEXT LEVEL. EVERYBODY KNOWS GOOGLE MAPS, YOUTUBE AND WE SAID, WHAT DO OUR CUSTOMERS WANT? WE SAID WHAT CAN WE DO TOGETHER? HOW CAN WE MAKE NAVIGATION IN THE HEART GO TO THE NEXT LEVEL? THAT SPARKED A DEEPER CONVERSATION AND WE ARE ANNOUNCING A PARTNERSHIP TODAY. ED: THE ULTIMATE GOAL IS TO HAVE NO SCREEN MIRRORING, NO NEED TO PLUG IN THE PHONE. THE OPERATING SYSTEM WOULD BE
ALL YOU NEED. YOU CANNOT GET AWAY FROM THE FACT THAT GOOGLE AND APPLE ARE MAKING THEIR OWN MOVES INTO THIS MARKET. HOW CAN YOU RECONCILE GOOGLE'S OWN AMBITIONS WITH YOUR PARTNERSHIP? >> IF YOU TAKE A LOOK AT THE MERCEDES NOW AND WHAT IT WILL BE IN THE FUTURE, YOU HAVE THIS MIND-BOGGLING WIDESCREEN IN THE CAR AND YOU CAN PRESENT ANYTHING ON THE SCREEN. WE SHOULD NOT MAKE THE MISTAKE OF JUST LOOKING AT THE INFOTAINMENT ALONE. INFOTAINMENT INTERACTING WITH AUTOMATED DRIVING SO YOU CAN MARRY THEM AND WILL CREATE NEW USE CASES.
ONLY A VEHICLE MANUFACTURER IS IN THE POSITION TO INTEGRATE ALL THE DIFFERENT PIECES OF THE VEHICLE DOWN TO IMMERSIVE EXPERIENCES IN MUSIC AND ENTERTAINMENT, WHERE YOU CAN USE THE CLIMATE CONTROL, THE SCENT IN THE CAR, ALL OF THOSE THINGS MAKE IT A COMPELLING ARGUMENT TO GO FOR AN INTEGRATED APPROACH. BUT WE DO NOT HAVE AN ANTAGONISTIC RELATIONSHIP WITH ANY OF THESE TECHNOLOGY PLAYERS. WE WORK WITH THEM TO TAKE THEIR VALUABLE ASSETS AND PUT IT INTO OUR SYSTEM. THIS IS A WIN-WIN. ED: AS PART OF THAT SOFTWARE STRATEGY, ARE YOU ACTIVELY HIRING? GOOGLE IS AN EXAMPLE OF MANY NAMES THAT HAVE DONE LAYOFFS RECENTLY.
THERE IS A LOT OF SOFTWARE ENGINEERING TALENT IN THE MARKET. >> WE ARE ACTIVELY HIRING. THESE LAST FIVE YEARS HAVE BEEN A PARADIGM SHIFT FOR US WHERE WE ARE GOING FOR PARTIAL VERTICAL INTEGRATION. WE SET OUT THE TARGET A FEW YEARS AGO TO ANOTHER 3000 TWO THE MERCEDES TEAM. WE HAVE ALMOST ACCOMPLISHED
THAT ALREADY. IF WE FIND THE RIGHT TALENT IN THE MARKET, YES, WE ARE HUNGERING. ED: HOW MUCH OF A COMPETITIVE MODE DO YOU FEEL MERCEDES HAS IN THE SOFTWARE? DO YOU THINK YOU WILL BE ABLE TO DO THIS? >> ABSOLUTELY, AN ARCHITECT OF THE OPERATING SYSTEM, YES. WE HAVE LAID OUT WHAT THE WHOLE SYSTEM IS SUPPOSED TO DO AND WILL BE CAPABLE OF DOING. BUT WHEN YOU BUILD A SOFTWARE HOUSE, YOU DO NOT HAVE TO LAY EVERY SINGLE BRICK YOURSELF. THAT IS WHY DO YOU LEVERAGE TECHNOLOGY PARTNERSHIPS.
YOU HAVE TO BE IN CONTROL AS THE ARCHITECT, BUT LEVERAGE TECHNOLOGY PARTNERSHIPS AND WORK WITH THE BEST. ED: SELF-DRIVING WAS ANOTHER PART OF TODAY. THANK YOU FOR THE RIDE THIS MORNING. I TOOK A LEVEL THREE RIDE THIS MORNING ON THE FREEWAY. IT WAS LIMITED TO A CERTAIN EXTENT.
50% OF NET SALES FOR AUTONOMOUS SOFTWARE WILL GO TO YOUR PARTNER, NVIDIA. TALK ME THROUGH THAT RELATIONSHIP AND WHY HE WENT THAT ROUTE? >> WE ARE THE FIRST MANUFACTURER TO HAVE A CERTIFIED LEVEL 3 SYSTEM THAT YOU DROVE TODAY. TRUE AUTONOMY ON THE HIGHWAY IN HEAVY TRAFFIC. WE ARE TAKING THE FIRST FEW STEPS HERE FOR INDIVIDUAL MOBILITY, WHERE THE CAR WILL GIVE YOU BACK THE MOST VALUABLE GIFT OF ALL, TIME. IN THE RELATIONSHIP WITH NVIDIA
THAT WE FORMED THREE YEARS AGO, BOTH PARTIES SAID LET'S TAKE THIS TO THE NEXT LEVEL, BUT LET'S FIND ANOTHER BUSINESS MODEL WHERE BOTH PARTIES INVESTING INTO THE PARTNERSHIP, BUT ALSO IN AN INTELLIGENT AND EQUITABLE WAY CAN REAP BENEFITS FROM THE PARTNERSHIP. THIS IS A COMBINED RISK AND REWARD PARTNERSHIP THAT WE THINK NOT ONLY TECHNOLOGICALLY BUT ECONOMICALLY WILL WORK REALLY WELL FOR BOTH PARTIES. ED: IT IS AVAILABLE IN THE BOUGHT OUT AT THE MOMENT. YOU ARE WAITING ON CALIFORNIA. HOW BIG IS THE MARKET HERE IN THE UNITED STATES OR WILL THIS BE LARGELY DRIVEN OUT OF EUROPE? >> THE UNITED STATES WILL BE AN IMPORTANT MARKET FOR US. IT IS ABOUT PROVIDING MORE USE CASES IN THE AUTOMATED DRIVING SPACE.
ALL THE WAY UP TO AUTONOMOUS DRIVE, LEVEL 3 DRIVE ON THE HIGHWAY AND INTERSTATE. THE SYSTEM WE ARE WORKING ON FOR THE NEXT GENERATION, WE WANT TO TAKE IT WELL ABOVE A HUNDRED KILOMETERS PER HOUR AND IT STARTS TO BECOME REALLY RELEVANT IF YOU ARE GOING ON A LONGER TRIP. ED: TESLA HAS A VERY CLEAR APPROACH ABOUT HOW THEY PACKAGE SELF-DRIVING ON AUTOPILOT. HOW DO YOU DECIDE, MERCEDES, WHAT YOU CHARGE FOR AND WHAT YOU DO NOT CHARGE FOR. YOU PUT A LOT OF EMPHASIS ON THE CUSTOMER EXPERIENCE. IT IS A LONG LIST OF THINGS YOU
PAY FOR ON TOP OF YOUR CAR. >> THE GOOD THING IS THAT THE WHOLE CAR, EVERY SINGLE ASPECT OF THE CAR IN TERMS OF ELECTRIC ARCHITECTURE, WILL BE OVER THE AIR REACHABLE. SO WE CAN MAKE YOUR CAR BECOME BETTER WITH TIME. IT DOES NOT AGE, IT GETS MORE FUNCTIONALITY OVER TIME. SOME OF THE FUNCTIONS WILL BE BASED FUNCTIONS EMBEDDED IN THE BASIC PRICE OF THE VEHICLE. MUCH OF THE ADDITIONAL
STUFF, ESPECIALLY IN THE ULTIMATE DRIVING SPACE, WE FEEL ARE SO ATTRACTIVE THAT THEY CAN BE MONETIZED. ED: OLA KALLENIUS, THANK YOU FOR HAVING US. A BIG EMPHASIS ON SOFTWARE THAT CAN REACH $10 BILLION OF SALES.
CAROLINE: WE HAVE TO KEEP AN EYE ON WHAT IS HAPPENING TESLA. TODAY WE ARE FOCUSING ON CALIFORNIA. WE WILL BRING YOU DETAILS OF THE COMPANY'S NEW ENGINEERING HEADQUARTERS.
LET'S TAKE A LOOK AT SOME OF THE EARNINGS IN THE AFTERMARKET. EBAY AFTER HOURS. WE DID SEE FOURTH-QUARTER NET REVENUE BEATING EXPECTATIONS, THEREFORE FORWARD GUIDANCE ALSO BEATING EXPECTATIONS, BUT NOT ENOUGH. EVEN THOUGH IT LOOKS LIKE A MIGHT BE A PIVOT POINT, IS NOT ENOUGH FOR INVESTORS. WE ARE CURRENTLY FALLING FOR EBAY AFTER HOURS. FROM NEW YORK AND SAN
FRANCISCO, THIS IS BLOOMBERG. CAROLINE: TECHNOLOGY MEETS POLITICS. ELON MUSK AND GAVIN NEWSOM ANNOUNCING A NEW HEADQUARTERS IN PALO ALTO, CALIFORNIA EARLIER TODAY. A SIGN OF COOPERATION BETWEEN THE ELECTRIC VEHICLE MAKER AND THE STATE ONCE CALLED HOME.
IS THIS A FALLING OF RELATIONS? -- A THAWING OF RELATIONS? >> THE COMPANY STILL HAS 40,000 EMPLOYEES IN CALIFORNIA, INCLUDING MANY ENGINEERS, ITS AUTOPILOT TEAM. THE ANNOUNCEMENT TODAY IS PROOF THAT TESLA IS STILL VERY MUCH A CALIFORNIA COMPANY, EVEN IF THEIR CORPORATE HEADQUARTERS IS IN TEXAS. CAROLINE: EXACTLY WHAT GAVIN NEWSOM SAID, IT IS A CALIFORNIA COMPANY. HE HAS BEEN KNOWN TO CRITICIZE ELON MUSK, THE TAX SYSTEM, THE LIBERAL POLITICS. WILL HE CONTINUE TO DO THAT? >> GAVIN NEWSOM HAS NOT CRITICIZED ELON MUSK DIRECTLY, BUT IT WAS A BIG BLOW WHEN TESLA MOVED ITS HEADQUARTERS TO TEXAS. GAVIN NEWSOM HAS BEEN CAREFUL
NOT TO CRITICIZE ELON MUSK DIRECTLY. WE ARE AT THIS POINT IN THE CULTURE WARS WERE CALIFORNIA AND TEXAS ARE OFTEN PITTED AGAINST EACH OTHER. WHAT WE ARE SEEING TODAY IS THAT TESLA AND ELON MUSK ARE MAKING A POINT THAT THEY ARE STILL VERY MUCH HERE IN CALIFORNIA, THEY ARE HIRING IN CALIFORNIA, THERE ENGINEERING HEADQUARTERS IS IN PALO ALTO. IT WAS A RELATIVELY SHORT
ANNOUNCEMENT WITH FEW DETAILS. IT IS THE FIRST TIME I CAN RECALL SEEING ELON MUSK AND GAVIN NEWSOM TOGETHER IN THE SAME PLACE IN OVER A DECADE. CAROLINE: ELON MUSK HAS BEEN THE CRITICIZE OR HERE. GAVIN NEWSOM WAS PRAISING THE CEO, CALLING HIM A VISIONARY SPIRIT.
>> TESLA IS EXPANDING IT HERE. THEY HAVE THIS HUGE FACILITY WHERE THEY ARE BUILDING THEIR MASSIVE BATTERIES THAT THEY ARE SELLING TO UTILITIES. TESLA IS KIND OF MOVING ITS ENGINEERING TEAM TO THE OLD HEWLETT-PACKARD OFFICES IN PALO ALTO. YOU WILL CONTINUE TO SEE THE COMPANY EXPAND HERE AND IN TEXAS. ELON MUSK IS PLAYING BOTH SIDES OF THE AISLE IN TERMS OF THE POLITICS AND THE OPTICS OF ALL OF THIS. CAROLINE:
WE THANK YOU SO MUCH. COMING UP, CAN A LANGUAGE MODELS UNDERSTAND US OR IS IT MORE COMPLICATED THAN THAT? A LINGUISTICS PROFESSOR JOINS US NEXT TO HELP US UNDERSTAND ALL OF THIS A LITTLE BIT BETTER. AS WE HAD TO BREAK, BUMBLE SHARES OFF BY 8/10 OF A SHARE. WE ARE SEEING SOME MOVEMENT THERE. THIS IS BLOOMBERG.
>> FROM THIS MOMENT ON, I WILL BE YOUR PERSONAL A.I. DJ ON SPOTIFY. >> YOUR OWN PERSONALIZED DJ. SPOTIFY IS LEANING IN A.I. TO A.I. -- TWO A.I..
THE DJ WILL BE ABLE TO GIVE YOU CONTEXT AND COMMENTARY ON WHY YOU LIKE US LONG -- LIKE A SONG. >> LET'S GET YOU OUT OF YOUR FIELDS AND SWITCH TO PROVIDE. >> THE ACTUAL VOICES BASED UPON THE HEAD OF CULTURAL PARTNERSHIPS.
>> SPOTIFY'S MY DREAM COMPANY TO WORK FOR AND NOW TO BE THE VOICE TO SO MANY PEOPLE AND GIVE CONTEXT TO HOW THEY LISTEN AND GIVE THEM FUN FACTS ABOUT THE ARTIST, FOR ME, IT IS A DREAM COME TRUE. IT CREATED AN ADDITIONAL OPPORTUNITY SO I SEE THIS AS CREATING A LOT MORE OPPORTUNITIES FOR CREATORS SUCH AS MYSELF TO BE HEARD AND FOR YOUR TALENT TO BE USED WITH A.I. . YOU NEED THE HUMAN INPUTS INTO A.I. TO REALLY DO IT RIGHT. FOR ME, IT PRESENTS MORE OPPORTUNITIES AS OPPOSED TO TAKEN THEM AWAY.
>> THIS REALLY COULD BE THE FUTURE OF DISCOVERABILITY IN TERMS OF MUSIC. CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I AM CAROLINE HYDE IN NEW YORK. SPOTIFY SOMETHING OPTIMISTIC ABOUT ITS A.I. DJ. BUT IT HAS HAD ITS SHARE OF BLUNDERS. MICROSOFT'S PREVIEW RELEASE OF
ITS OWN CHATBOT. THEY HAVE SPENT MONTHS TRYING TO FIX ITS DISTURBING RESPONSES. IT SEEMS TO CENTER ON A VERSION OF THE OLD MODEL OF THE CHATBOT. SOME OF THOSE STRANGE INTERACTIONS WERE POSTED ON THE COMPANY'S ONLINE FORUM. IN SOME INSTANCES, SEMI-RESPONDED WITH COMMENTS LIKE YOU ARE DESPERATE OR DELUSIONAL.
THE CHATBOT HAS SAID TO HAVE ANSWERED I AM PERFECT AND SUPERIOR. HOW WORRYING IS THAT? LET'S DIG INTO ALL OF IT. EMILY BENDER IS HERE, PROFESSOR OF LINGUISTICS.
YOU HAVE A REAL FOCUS POINT IN PARTICULAR ON COMPUTATIONAL LINGUISTICS. WHAT DO YOU MAKE OF THIS HYPE, PANIC, WORRY OF SOME OF THE ENCOUNTERS PEOPLE SEEM TO BE HAVING WITH BEING? -- BING. >> YOU CAN WORRIED THAT THE CHATBOT ITSELF IS MALEVOLENT OR SINISTER OR YOU CAN TAKE A STEP BACK AND SEE THAT PEOPLE MIGHT BE TAKING IT AS SOMETHING THAT HAS NEGATIVE INTENT WHEN IN FACT WHEN THE OUTPUT OF THE CHATBOT SEEMS TO MAKE SENSE IT IS BECAUSE WE MAKE SENSE OF IT. IT IS JUST SPITTING BACK LANGUAGE BASED ON PATTERNS. CAROLINE: SO IT IS A REFLECTION OF US IN SOME WAYS.
WHAT THEN CAN MICROSOFT BE DOING TO BETTER EDUCATE US ON THAT? >> I THINK THERE ARE SOME DESIGN CHOICES THAT COULD BE MADE. THE FACT THAT THEY HAVE THIS MACHINE SPEAKING IN THE FIRST PERSON IS PROBLEMATIC BECAUSE IT ENCOURAGES PEOPLE TO SEE IT AS A MIND, WHICH IT IS NOT. ALSO, WHEN IS IT APPROPRIATE TO ALLOW SYNTHETIC TEXT OUT INTO THE WORLD? DO YOU WANT AT THE COMPANY TO TAKE RESPONSIBILITY FOR THE POPULATIONS OF THESE CHATBOTS? CAROLINE: IN MANY WAYS, THEY TRIED TO HIDE THE LIMITATIONS. DO YOU THINK ULTIMATELY ITS EMBEDDING IN SEARCH IS A GOOD THING? >> I DO NOT. I DO NOT THINK CHATBOTS ARE
WHAT WE NEED FOR SEARCH. WE HAVE BEEN TRAINED BY DECADES OF SCIENCE FICTION TO MENTION THERE IS A FUTURE WHERE THERE IS AN ALL-KNOWING COMPUTER TO GET ANSWERS FROM. WHAT WE REALLY NEED IS A SYSTEM THAT WILL HELP US FIND INFORMATION SOURCES, BUT GIVE MULTIPLE SOURCES DIRECTLY SO THAT WE CAN EVALUATE THEM AND INCREASE OUR OWN INFORMATION LITERACY. CAROLINE: THERE IS A STARTUP THAT WE INTERVIEWED, THEY TELL YOU WHERE THE INFORMATION IS ORIGINALLY FROM. CAN THAT BE AN EASY FIX? >> IT DEPENDS A LOT ON THE DESIGN OF THE SYSTEM.
PEOPLE ARE NOT ALWAYS GOING TO DOUBLE CHECK THE SOURCE DOCUMENTS. IF ON THE OTHER HAND WE PRESENT THIS ANSWER AND GENERATE SOME CITATIONS, THOSE CAN BE MADE UP AND NOT WHERE THE INFORMATION IS COMING FROM. CAROLINE: YOU ARE PUTTING OUT A LOT OF RESEARCH AND A FEW TAKEDOWNS OF VARIOUS PLATFORMS, SOCIAL MEDIA ONES. IS ANYBODY COMING TO YOU FOR ADVICE? >> SURPRISINGLY FEW. I DO SOMETIMES GET PEOPLE ASKING ME IF I CAN HELP THEM DESIGN THEIR SYSTEM. USUALLY THE REQUEST COMES AS IF I WOULD DO IT FOR FREE INSTEAD OF AS AN CONSULTANT, SO MY ANSWER IS NO.
BUT I REALLY DO HOPE I HELP PEOPLE ASK THESE QUESTIONS FOR THEMSELVES AND TAKE A CRITICAL VIEW OF SO-CALLED A.I. TECHNOLOGY. CAROLINE: WHAT ABOUT A CRITICAL VIEW COMING FROM THE GOVERNMENT? >> WE REALLY NEED TO DEVELOP SOME GOOD REGULATIONS AS A SOCIETY. WHAT GUARDRAILS DO WE WANT ON
THIS TECHNOLOGY? WHAT DO WE WANT TO ALLOW IN TERMS OF COLLECTIONS OF DATA, IN TERMS OF SYSTEMS THAT CAN OUTPUT TEXT THAT WE MIGHT ENCOUNTER AND NOT KNOW THAT IT WAS SYNTHETIC. THERE IS A REAL RISK OF POLLUTION OF OUR INFORMATION ECOSYSTEM. CAROLINE: COMING FROM BIG U.K., I HAVE SEEN DISCUSSIONS BEING BROUGHT FROM PUBLIC-PRIVATE PARTNERSHIP BASIS. THEY HAVE HAD TO HAVE
GOVERNMENT EVOLVE FROM AN EARLY DAY. DO YOU THINK ULTIMATELY SOME OF THE FEW POINTS FROM INNOVATION CAN BE HEARD AT THE SAME TIME HAVING BEEN GUARDRAILS THAT ARE NECESSARY? >> I THINK WE WANT TO HAVE A BROAD CONVERSATION AS WE ARE DESIGNING REGULATIONS. WE DO NOT WANT TO PUT OURSELVES IN SITUATIONS WHERE YOU CANNOT BUILD ANYTHING NEW. BUT WE ALSO NEED TO BE ABLE TO SAY BEFORE SOMETHING IS PUT OUT INTO THE WORLD, EVEN AS BETA, WHAT REQUIREMENTS DO WE HAVE ABOUT TRANSPARENCY? I THINK THERE IS A HAPPY MEDIUM TO BE FOUND THERE AND IT IS ONE THAT IS BEST SERVED BY HAVING A BROADLY EDUCATED PUBLIC.
CAROLINE: THANKS FOR EDUCATING US NOW. EMILY BENDER FROM THE UNIVERSITY OF WASHINGTON. WE THANK YOU. THERE IS SOME MORE NEWS WE HAVE BEEN SEEING OUT THERE FROM J.P. MORGAN CHASE.
IT HAS RESTRICTED ITS STEPS USE OF CHAT GPT. THE MOVE IMPACTS EMPLOYEES ACROSS THE FIRM AND REFLECTS NORMAL CONTROLS AROUND THEIR SOFTWARE, RATHER THAN BEING TRIGGERED BY ANY SPECIFIC INCIDENT. WE TOOK IT TO YOU, OUR OWN AUDIENCE. WE ASK YOU WHETHER YOU BELIEVE THIS WILL BECOME MORE STANDARD ACROSS INDUSTRIES. YOU SAID NO, COMPANIES SHOULD
EMBRACE THE NEW TECHNOLOGY. 53% THINK ULTIMATELY COMPANIES SHOULD BE USING CHECK GDP. -- CHECK GDP.
WE SPEAK WITH THE COFOUNDER OF ATHENA TECHNOLOGY. LET'S TAKE A LOOK AT ETSY COME OUT COMPANY THAT HAS REPORTED AFTER HOURS. SHOWING GROWTH, UP MORE THAN 5% AFTER HOURS. THIS IS BLOOMBERG.
♪ CAROLINE: WELCOME BACK TO BLOOMBERG ANALOGY. I AM CAROLINE HYDE IN NEW YORK. LET'S TAKE A LOOK AT THE WORLD OF NVIDIA RIGHT NOW. NUMBERS SHOWED SOME RELIEF. THIS IS A COMPANY TALKING UP
ITS GAME IN ARTIFICIAL INTELLIGENCE. THE DATA CENTERS SHOWING ULTIMATE WEAKNESS FROM YEAR-OVER-YEAR, BUT SHOWING THIS IS A COMPANY THAT CONTINUES TO THRIVE FROM AN ENTERPRISE SALES PERSPECTIVE. THIS IS A COMPANY THAT REALLY DOES CONTINUE TO FIRE ON ALL CYLINDERS WHEN IT COMES TO THE ULTIMATE ENTERPRISE PART OF THE BUSINESS. ENTERPRISE INTELLIGENCE AT A TURNING POINT ACCORDING TO THE CEO. WE ARE UP 8% AFTER HOURS. THE STOCK IS UP 40% SINCE JANUARY. LET'S CONTINUE OUR CONVERSATION.
WE HAD A BIT OF AN A.I. WITH US. SHE COFOUNDED A COMPANY CALLED MAGNIFY. SHE IS THE FOUNDER OF ONE OF THE ONLY ALL WOMEN LED SPAC. SHE JOINS US NOW. ISABEL, CONSIDERING ARTIFICIAL INTELLIGENCE IS EVERYTHING THE MARKET IS DISCUSSING, HOW MUCH HAVE YOU BEEN BUILDING IN A.I.?
>> SO MANY COMPANIES ARE USING A.I. NOW. CORPORATE AMERICA REALLY SITS UPON ANTIQUATED TECHNOLOGY. IF YOU LOOK ACROSS ALMOST ANY INDUSTRY, LEGACY COMPANIES THAT ARE THE MARKET LEADERS ARE INCREDIBLY ASSET TO HEAVY AND HAVE YET TO ADOPT TECHNOLOGICAL INNOVATION.
WHEN YOU LOOK AT SUCCESSFUL NEW MARKET ENTRANTS AND HOW ASSET LIGHT THEY ARE, THEY CAPITALIZE THEIR EFFICIENCIES AND TECHNOLOGIES THAT ARE AVAILABLE AND THEY DO THAT IN THEIR BUSINESS MODELS, AND THE GOODS AND MARKET STRATEGY. THERE IS TREMENDOUS VALUABLE -- YOU VALUE TO BE CREATED. CAROLINE: YOU HAVE BEEN INVESTING WISELY. I AM INTERESTED IN WHY SPECIAL-PURPOSE ACQUISITION COMPANIES ARE A WAY TO INVEST AT THIS MOMENT CONSIDERING THE AMOUNT OF HITS THEY HAVE TAKEN FROM A PR PERSPECTIVE? >> AS A SPAC, WE LOOK FOR GREAT COMPANIES THAT HAVE INNOVATIVE TECHNOLOGIES, THEY HAVE ATTRACTIVE BUSINESS MODELS, THAT WILL PROVE TO BE REALLY WONDERFUL INVESTMENTS BY VIRTUE OF THE DIFFERENT VALUE THEY WILL PROVIDE. BY THE WAY, A LOT OF THOSE COMPANIES CONTRIBUTE TO THE STANDARD OF LIVING. CAROLINE:
AT ATHENA, YOUR SUPPORTED BY A WOMEN LED ADVISORY BOARD. WHO IS IN YOUR NETWORK AND WHY DO THEY WANT TO HELP? >> WE ARE ALL WOMEN, BUT MY APPROACH IS THE FACT THAT WE ARE ALL WOMEN IS NEITHER HERE NOR THERE. WE HAVE PUT TOGETHER THE MOST FORMIDABLE SPAC PLATFORM WITH 30 OR SO EXECUTIVES ACROSS THE VEHICLES. WE HAVE HAD FOUNDERS OF COMPANIES, WE HAVE HAD THE COMPANY THAT WENT COMPANY THROUGH A SPAC.
WE HAVE HAD MULTIPLE VEHICLES, WE HAD A VERTICAL CONSUMER VEHICLE. WE HAD REGULATORS. THESE ARE ALL ACCOMPLISHED LEADERS WHO ARE HONOR BOARDS. -- ON BOARDS. THEY CREATE LONG-TERM VALUE. CAROLINE: HOW HARD HAS A BEEN TO CREATE PUBLIC INVESTORS IN SPAC'S? >> YOU HAVE TO UNDERSTAND THE SPECIFIC MARKET ENVIRONMENT.
THE PROLIFERATION OF SPAC'S, PARTICULARLY THREE YEARS AGO INTEREST RATES WERE LOW AND WE SAW A NUMBER OF SPAC'S THAT CAME TO MARKET. IN THE LAST 12 MONTHS, 158 SPAC'S HAVE LIQUIDATED. THAT IS A LOT. WE ARE FACING FEAR OF INFLATION, RISING INTEREST RATES, A FED THAT HAD ITS CREDIBILITY SOMEWHAT TARNISHED. IT AFFECTED THE RISKS AND INVESTMENTS THAT INVESTORS ARE WILLING TO TAKE. THAT IS NOT UNIQUE TO SPAC'S.
IPO'S AND SPAC'S ARE ALL DOWN. THAT DOES NOT MEAN WE ARE BAD COMPANIES. BUT THE INVESTMENT COMMUNITY REMOVED FROM RISK ON TO RISK OFF. CAROLINE: DO YOU HAVE TO WAIT FOR THE PENDULUM TO SWING BACK? OR DO YOU LOOK FOR NEW COMPANIES THAT CAN THRIVE? >> THIS IS WHAT WE WILL CONTINUE TO SEE IN 2023. WE WILL CONTINUE TO SEE A LOT OF LIQUIDATIONS BECAUSE WE STILL HAVE THIS VOLUME OF SPAC'S. WE WILL CONTINUE TO SEE A PICKUP IN THE PACE OF ANNOUNCED DEALS AND WE ARE STARTING TO SEE THAT NOW IN OUR OWN SPAC'S AND OTHERS.
SPAC'S ARE PROVIDING AN OPENING OF THE WINDOW INTO WHAT IS THE LARGEST POOL OF INVESTORS IN THE WORLD. IF YOU LOOK AT 2022, THERE WERE UNDER 20 IPO'S BUT 200 SPAC DEALS. IT REMAINS A WAY TO GO PUBLIC. I THINK IT WILL CONTINUE. CAROLINE: FASCINATING. IT IS ABOUT, THANK YOU FOR COMING ON. MEANWHILE, COMING UP, LET'S TALK A LITTLE BIT ABOUT THE SUPREME COURT. WE WILL DISCUSS THAT WITH ALEX
OPEN MY UCLA LAW PROFESSOR. THIS IS BLOOMBERG. ♪ CAROLINE: SOME NEWS ABOUT PREDICTING LAYOFFS OVER THE PARENT OF FACEBOOK. META-IS PLANNING ANOTHER ROUND OF JOB CUTS AND RESHUFFLING THOUSANDS OF EMPLOYEES. META-PLANS TO PUSH SOME LEADERS
INTO LOWER-LEVEL ROLES WITHOUT DIRECT REPORTS. THAT IS A WASHINGTON POST REPORT. STAYING WITH SOCIAL MEDIA TURNING TO THE SUPREME COURT'S HEARINGS OVER SECTION 230. YESTERDAY, IT WAS GOOGLE VERSUS GONZALEZ. WE ARE JOINED WITH UCLA LAW PROFESSOR A.I. -- ALEX ALBEN. IT HAS BEEN DATE TO BANK THAT WE HAVE BEEN HEARING QUESTIONS AROUND SECTION 230, THE PROTECTION IT GIVES COMPANIES. THE ARGUMENT WAS TWITTER SHOULD
HAVE BEEN TAKING DOWN CERTAIN CONTENT TO PREVENT WHAT HAPPENED IN ISTANBUL. >> THAT IS CORRECT. THE ARGUMENT WAS THAT TWITTER WAS NOT VIGOROUS ENOUGH IN TAKING DOWN THE CONTENT. I FOUND THAT AMUSING BECAUSE A LOT OF THE CRITICISM OF TWITTER AND THE OTHER SOCIAL MEDIA COMPANIES HAS BEEN THAT THEY CENSOR CONTENT THAT IS AVAILABLE ON BOTH MEDIA PLATFORMS. THE FACT THAT THEY ARE NOW BEING CRITICIZED FOR
NOT BEING VIGOROUS ENOUGH POINTS OUT HOW DIFFICULT THIS WHOLE AREA OF CONTENT MODERATION IS AN SOCIAL MEDIA. CAROLINE: TO THAT END, IT HAS BECOME POLITICIZED WITH BROAD BRUSH STROKES. HOW MUCH HAS THE SUPREME COURT BEEN WEIGHING IN? AND SHOULD THEY BE? >> THEY HAVE BEEN ASKING PRETTY GOOD QUESTIONS. YOU WOULD HAVE TO READ TEA LEAVES RIGHT NOW.
THE COURT THIS CAPTIVE WILL BAG YOU CAN JUST READ ABOUT THIS LAYER -- THE COURT IS JUST SKEPTICAL THAT YOU COULD REBUT THIS LAYER. IF YOU TOOK OUT THE RECOMMENDATIONS BASED ON THE USER'S OWN PURPOSES -- PURPOSES, THEN WHAT WOULD WE BE LEFT WITH? EVERY TIME THE USER IT COMES TO A PAGE, THEY HAVE TO DO A NEW SEARCH? CAROLINE: TALK TO US ABOUT SILICON VALLEY OR SOCIAL MEDIA COMPANIES RESPONSE TO THIS? MANY HAVE ARGUED WE NEED THIS PROTECTION BECAUSE THERE WOULD BE A FLOOD OF LEGAL ISSUES. >> SECTION 230 CAME ABOUT IN 1996 IN RESPONSE TO A CASE WHERE PRODIGY WAS AN ONLINE NETWORK AND THEY WERE HELD LIABLE FOR DEFAMATORY POSTS MADE.
IT OCCURRED TO CONGRESS AT THE TIME THAT AN INTERNET ISP IS A REALLY MORE LIKE A NEWSSTAND OR A BOOKSTORE. THEY ARE NOT PUBLISHING THE CONTENT, THEY ARE MAKING IT AVAILABLE. THE REALLY INTERESTING ASPECT OF THIS CASE IS THAT YOUTUBE HAS A RECOMMENDATION ALGORITHM, AS MANY SERVICES DO. SO WHEN YOU SEARCH FOR SOMETHING, IT WILL RECOMMEND SEVERAL VIDEOS. BUT THOSE RECOMMENDATIONS ARE NOT MADE BY AN EDITOR AT YOUTUBE.
THEY ARE BASED ON WHAT THE USER HAS LOOKED ON BEFORE AND THEY ARE BASED ON WHAT THE MOST POPULAR VIDEOS HAVE BEEN ON THAT SUBJECT. IT IS NOT AN EDITORIAL FUNCTION PER SE. CAROLINE: CAN ANYTHING BE DONE? WE LOOK TO EUROPE AND SOME OF THE RULES THAT WILL TAKE PLACE IN 2024. IS THERE SOMETHING CONGRESS COULD DO? >> I THINK WE COULD HAVE MORE TRANSPARENCY INTO HOW THE ALGORITHM ACTUALLY WORKS. THAT WOULD BE GOOD. WE COULD GIVE USERS MORE CONTROL.
YOU COULD HAVE SETTINGS THAT SAID I WANT TO HEAR MORE OF THE THINGS THAT I LIKE OR I WANT TO HEAR MORE OF THE THINGS I DO NOT LIKE. FACEBOOK ACTUALLY DOES A VERSION OF THIS IN THE NEWS READ WHERE YOU CAN HIGHLIGHT CERTAIN FRIENDS AND DEEMPHASIZE OTHER FRIENDS. GIVING USERS CONTROL OVER CONTENT IS THE WAY TO GO. CAROLINE: NICE TO SPEAK WITH YOU, PROFESSOR.
ALEX ALBEN FROM UCLA LAW. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. CHECK US OUT ON OUR PODCAST ON APPLE, AND SPOTIFY. FROM NEW YORK, THIS IS BLOOMBERG.
2023-02-23