Bloomberg Technology 10/03/2023
>> 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. ♪ CAROLINE: I'M CAROLINE HYDE IN NEW YORK AND ED LUDLOW IS ON ASSIGNMENT. COMING UP, THE TRIAL OF SAM BANKMAN-FRIED TAKES OFF IN MANHATTAN AS HE FACES CHARGES OF SWINDLING BILLIONS OF DOLLARS FROM HIS TRIP TO PLATFORM. WE WILL HAVE FULL COVERAGE AHEAD.
A BIPARTISAN GROUP OF U.S. SENATORS ARE LOOKING TO VISIT CHINA TO ADDRESS MICRON AND WE WILL HAVE MORE ON THAT PLUS CAN INTELLIGENCE HELP HEDGE FUNDS OUTPERFORM? WE WILL BREAK DOWN THE RESULTS LATER THIS ERROR. LET US CHECK ON THE MARKETS. THE GOOD NEWS IS BAD NEWS TODAY, THE JOB STRENGTH IN JOBS PERFORMS SHOWS JOB OPENINGS WERE HIGHER-THAN-EXPECTED ENEMIES WE ARE DOWN ON THE NASDAQ AT THE MOMENT.
WE SAW A LITTLE BIT OF BUYING YESTERDAY MAYBE SOME PROFIT-TAKING. WE ARE LOOKING AT THE 10 YEAR YIELD HIGHER BY 10 BASIS POINTS. THE 30 YEAR AT THE HIGHEST SINCE 2007, GETTING CALLS FOR A 5% LEVEL AND WE ARE LOOKING AT STRENGTH IN THE U.S. DOLLAR WITH MAYBE A FED HAVING TO REMAIN HAWKISH. THIS IS THE STRONGEST THE DOLLAR INDEX HAS BEEN IN ABOUT 10 MONTHS. WHAT DOES THAT MEAN FOR ANOTHER KEY ASSET ? . WE ARE UP BY 1.1% FOR BITCOIN.
THERE WAS SOME BUYING YESTERDAY SO IS IT PROFIT-TAKING OR IT LOOKING TOWARD THE TRIAL TO SAM BANKMAN-FRIED? WE KNOW HE IS FACING CHARGES THAT HE SWINDLED ALIENS OF DOLLARS FROM HIS CRYPTO PLATFORM. -- HE SWINDLED BILLIONS OF DOLLARS FROM HIS CRYPTO PLATFORM. TELL US EXACTLY THE STATE OF PLAY WE ANTICIPATE TODAY. KAILEY:
TODAY IT'S ALL ABOUT JURY SELECTION. THIS IS JUST ONE STEP IN WHAT COULD BE A TRAIL THAT PLAYS OUT OVER THE COAST OF THE NEXT SIX WEEKS. THEY ARE LOOKING AT POTENTIAL JURORS AND VETTING THEM. THEY HAVE DISMISSED THE NUMBER ALREADY AND WE UNDERSTAND THE JUDGES IS HOPING TO FINISH TODAY. IF NOT, MAYBE TOMORROW AND ONCE THE JURY IS SET, IT WILL GET INTO THE ARGUMENT PHASE OF THIS CASE. HE IS FACING A NUMBER OF
CHARGES RELATED TO FRAUD AND MONEY LAUNDERING, SEVEN IN TOTAL AND IF CONVICTED, HE COULD SPEND THE REST OF HIS LIFE IN PRISON. WE COULD BE LOOKING AT A SENTENCE OF OVER 100 YEARS. HE HAS PLEAD NOT GUILTY BUT OVER THE COURSE OF THIS TRIAL IS WHEN WE WILL SEE A LOT OF THE FACTS OF THE CASE BOTH FROM THE PROSECUTION AND THE DEFENSE. SAM BANKMAN-FRIED SAID IT WAS NEVER HIS INTENT TO COMMIT FRAUD ON ANYONE. CAROLINE: THIS HAS RAMIFICATIONS FOR THOSE WATCHING EXPOSURE WITH FTX.
BUT MORE BROADLY, CRYPTO AS A WHOLE WHICH IS PLAYING OUT. WHAT IS THE INDUSTRY MAKE OF THIS? KAILEY: IN MANY WAYS, THE INDUSTRY ALREADY HAS BEEN GRAPPLING WITH THE AFTEREFFECTS OF FTX AND ALAMEDA RESEARCH IMPLOSION AND THE ALLEGATIONS MADE AGAINST SAM BANKMAN-FRIED. THIS INDIVIDUAL, THIS 31-YEAR-OLD, WAS NOT JUST THE CEO OF FTX BUT HE WAS A LEADING VOICE FOR THE CRYPTO INDUSTRY AS A WHOLE. HE FREQUENTLY APPEARED ON
CAPITOL HILL BEFORE LAWMAKERS RECOGNIZE THE INDUSTRY AND HE WAS SEEN AS ONE OF THE MOST CREDIBLE VOICES IN THE BUSINESS OF WHEN ALL OF THAT IMPLODED, THE CREDIBILITY OF THE WIDER INDUSTRY TOOK A HIT. THIS COULD BE SOMEWHAT OF A CATHARTIC MOMENT FOR THE INDUSTRY ONCE THIS TRIAL IS WRAPPED UP AND THEY CAN PUT THE ISSUE TO BED. IN MANY WAYS, THE INDUSTRY IS STILL DEALING WITH THE AFTEREFFECTS AND TRYING TO RECOVER AND REESTABLISH CREDIBILITY. THERE IS A LOT OF LEGISLATIVE EFFORT UNDERWAY IN WASHINGTON. THE SAM BANKMAN-FRIED AFTERTASTE MAY STILL BE LINGERING AND THIS TRIAL COULD REVIVE A LOT OF THAT DIRTY LAUNDRY. CAROLINE: THANK YOU, WE APPRECIATE THE COVERAGE THROUGHOUT THE DAY.
WE WANT TO BRING YOU SOME EXPERTISE IN TERMS OF WHAT THIS MEANS FOR THE INDUSTRY WITH REGULATION AND CENTRAL BANK OPTIONS. THE CORNELL UNIVERSITY PROFESSOR IS WITH US AND YOU WORK FOR THE IMF BUT ALSO, YOU ARE THE AUTHOR OF THE FUTURE OF MONEY, HOW THE DIGITAL REVOLUTION IS TRANSFORMING CURRENCIES AND FINANCE. WHAT DOES THIS PARTICULAR LAWSUIT, THIS PARTICULAR MOMENT IN HISTORY MEAN FOR THE ADOPTION OF CRYPTO? >> THE INDUSTRY IS HOPING THIS WILL BE A CATHARTIC MOMENT IN THE SENSE OF CLEANING OUT SOME OF THE CHARLATANS AND PERHAPS ALSO PROVIDING SOME REGULATORY CLARITY AND REGULATORS WILL HOPEFULLY MOVE FORWARD. SAM BANKMAN-FRIED WAS SEEN AS A MESSIAH IN SOME OF THESE CIRCLES AND SEEN IS DELIVERING ON SOME OF THE PROMISES OF DECENTRALIZED FINANCE.
WHAT THE COLLAPSE REALLY SHOWS IS HOW FAR BITCOIN AND DECENTRALIZED FINANCE WHICH WAS SUPPOSED TO TURN AWAY FROM TRADITIONAL FINANCIAL INSTITUTIONS, HOW FAR IT HAS STRAYED FROM THAT PROMISE. IN EFFECT, WHAT WE ARE SEEING IS MANY OF THE PROBLEMS OF DECENTRALIZED FINANCE ARE BEING IMPORTED INTO THE CRYPTOCURRENCY WORLD. IN PARTICULAR, CENTRALIZATION IN THE FORM OF FTX WHICH BECOMES SINGLE POINT OF FAILURE. AND THE NOTION THAT WE CAN HAVE THIS DOESN'T SEEM TO BE BEARING OUT. PEOPLE SEEM TO WANT TO HOLD THEIR CRYPTO ASSETS. CENTRALIZED EXCHANGES LIKE FTX WHERE THEY ALSO HAVE TRADING ACTIVITIES. WE SEEM TO BE SEEING MORE CENTRALIZATION RATHER THAN DECENTRALIZATION. CAROLINE: WHERE COULD WE SEE AN
OPTIMIZATION OF DECENTRALIZED EXCHANGES? THEY DO EXIST. HOW ARE WE SEEING A MOVEMENT TOWARD THAT FUTURE OF CRYPTO IF AT ALL? >> I THINK WE ARE BEGINNING TO SEE A BIGGER BIFURCATION. THERE ARE MANY PEOPLE WHO VIEW BITCOIN AND OTHER CRYPTOCURRENCIES AS FINANCIAL ASSETS REALLY. THOSE ARE THE PEOPLE, INCLUDING MANY RETAIL INVESTORS, WHO SEEM TO BE TAKING THE SPECULATIVE APPROACH. THEY ARE HOLDING ONTO THESE ASSETS.
AT THE SAME TIME, THAT IS A RATHER WIDE MARKET FOR DECENTRALIZED FINANCE WHICH SO FAR HAS NOT REALLY DELIVERED ON ITS PROMISE OF DEMOCRATIZING FINANCE. IT HAS CREATED FINANCIAL ENGINEERING'S AND SPECULATION BUT I THINK THE PROMISE THERE WITH BLOCK TECH -- BLOCKCHAIN TECHNOLOGY, WE CAN MOVE AWAY FROM REGULAR FINANCE. IT CAN MAKE FINANCIAL SYSTEMS A LOT MORE EFFICIENT CAROLINE: WHAT IS NECESSARY TO GET THERE? IS IT CLEAR REGULATION GLOBALLY? >> REGULATION IS CERTAINLY GOING TO BE NEEDED.
I THINK REGULATION THAT CREATES GUARDRAILS SO THAT YOU HAVE THE BASIC ELEMENTS OF FINANCIAL STABILITY, INSTITUTIONAL AND SYSTEMIC STABILITY, INVESTMENT PARTICIPATION IS TAKEN CARE OF AND GUARDRAILS TO MAKE SURE WE DON'T HAVE A BIG CONCENTRATION IN THE SPACE OR FINANCE BEING USED ONLY FOR SPECULATION OR FOR ILLICIT TRANSACTIONS. THE NOTION OF THE INDUSTRY POLICING ITSELF THROUGH TECHNOLOGY IS NOT GOING TO WORK. WE ARE GOING TO NEED SOME GUARDRAILS.
HOW BEST DO WE SET UP THOSE GUARDRAILS WITHOUT STIFLING THE INNOVATION? I THINK THERE ARE STEPS BEING TAKEN IN MANY JURISDICTIONS INCLUDING THE U.S. BUT WE ARE A LONG WAY AWAY FROM THE RIGHT SORT OF REGULATORY FRAMEWORK SO WE CAN GET THIS ECOSYSTEM TO FOSTER AND THRIVE WITHOUT NECESSARILY CREATING ILLEGAL AND ILLICIT ACTIVITIES. CAROLINE: GIVE US YOUR GLOBAL EXPERTISE HERE.
ARE THERE AREAS WHERE YOU THINK CRYPTO IS LEADING THE CHARGE IN A BEST FIT REGULATORY ENVIRONMENT? >> NO, EUROPE, THE UNITED KINGDOM AND JAPAN ARE MOVING FORWARD AND TRYING TO DEFINE VARIOUS CATEGORIES OF CRYPTOCURRENCIES AND CRYPTO ASSETS. THAT CERTAINLY IS HELPFUL. I THINK THERE IS A CONCEPTUAL STRUGGLE GOING ON IN TERMS OF DECIDING WHETHER ONE CAN TAKE EXISTING REGULATORY FRAMEWORKS AND FOR THESE NEW PRODUCTS INTO THEM OR DECENT NEW TECHNOLOGIES THAT REQUIRE COMPLETELY DIFFERENT REGULATORY FRAMEWORKS. THESE ARE NOT THE TRADITIONAL SORTS OF PRODUCTS.
THEY HAVE A SPILL OVER TO TRADITIONAL FINANCIAL SYSTEMS AND THEY ARE GOING TO NEED A COORDINATED APPROACH AT THE GLOBAL LEVEL RATHER THAN A FRAGMENTED APPROACH. WE ARE MAKING PROGRESS BUT VERY SLOWLY. CAROLINE: WHAT DOES THE ROLE OF THE CENTRAL BANKS HAVE HERE? BECAUSE OF THE DIGITAL REVOLUTION, HOW IS IT IMPACTING CURRENCIES? >> I THINK THE BIGGEST LEGACY OF CRYPTOCURRENCY IS REALLY THAT THEY HAVE SHOWN A HARSH LIGHT INTO THE INEFFICIENCIES -- INEFFICIENCIES OF TRADITIONAL FINANCIAL SYSTEMS ESPECIALLY PAYMENTS.
THEY ARE FOSTERING BETTER AND MORE EFFICIENT PAYMENTS IN MANY PARTS OF THE WORLD. PAYMENTS ARE LARGELY DIGITAL ALREADY. CENTRAL BANKS ARE MOVING TOWARD CENTRAL DIGITAL CURRENCIES THAT CAN BE USED FOR PAYMENTS.
IN THE U.S., IT IS CATALYZED BY THE FED TO MOVE TOWARD A SUITE OF WHOLESALE AND RETAIL PAYMENTS. A LOT OF NICE CHANGES ARE GROWING IN FINANCIAL SYSTEMS INCLUDING DOMESTIC AND INTERNATIONAL PAYMENTS THANKS TO CRYPTOCURRENCIES. WHETHER CRYPTOCURRENCIES WILL PLAY IN IMPORTANT ROLE IN THIS REMAINS TO BE SEEN. CAROLINE: THERE IS THIS SORT OF TENSION BETWEEN A CENTRALIZED VERSION OF WHAT THE UTOPIA IS OF PURE DECENTRALIZATION.
THEN THERE'S THE NEED FOR REGULATION. WHEN YOU HAVE WRITTEN A BOOK ABOUT THIS, WHEN WE SEE THE HIGHS AND THE LOWS OF EXUBERANCE AROUND CRYPTO DIE OFF, HOW MANY PEOPLE ARE STILL ASKING YOU FOR YOUR GUIDANCE? HOW MAY YEARS DO YOU THINK THIS WILL TAKE ULTIMATELY? >> THAT IS A FUNDAMENTAL SHIFT IN TERMS OF DIGITIZATION OF PAYMENTS. ALSO, THE ABILITY FOR FINANCIAL INSTITUTIONS TO DETECT EFFICIENT FORMS OF BUSINESS BUT TO FOSTER MORE COMPETITION AMONG FINANCIAL SYSTEMS. CERTAINLY, AS WE SEE
CROSS-BORDER FINANCE BECOME MORE FRICTION FREE THANKS TO THESE NEW TECHNOLOGIES WHICH HAVE BEEN ADOPTED EVEN BY TRADITIONAL FINANCE INSTITUTIONS, I THINK WE WILL SEE SIGNIFICANT EFFICIENCY GAINS. THE REAL CONCERN IS WE END UP SEEING MORE CONCENTRATION ON TRADITIONAL FINANCE BECAUSE INCUMBENTS COULD USE THESE TECHNOLOGIES TO THEIR ADVANTAGE AND I THINK THIS IS WHERE REGULATORS WILL PLAY AN IMPORTANT ROLE, TO MAKE SURE REGULATIONS DON'T JUST MAKE AN ENTRY FOR NEW FINANCIAL FIRMS BUT COULD MAKE NEW GUARDRAILS FOR THIS INNOVATION TO TRY. CAROLINE: REALLY GREAT TO GET YOUR EXPERTISE AS AN AUTHOR AND A PROFESSOR AT CORNELL UNIVERSITY. WE THANK YOU. COMING UP, WE WILL TALK ABOUT THE FUTURE OF REGULATIONS SLIGHTLY DIFFERENTLY. U.S. SENATORS WANT TO VISIT WITHXI JIN PING AND TALKS ABOUT MICRON ARE ON THE AGENDA AND WHAT THEY HOPE TO ACCOMPLISH ON THEIR VISIT.
WE ARE LOOKING AT TSMC. THIS STOCK HAS A RAISED $77 BILLION OF ITS MARKET CAP SINK THE JUNE I. IT IS LOST MORE VALUE THAN ANY OTHER ASIA TRADED STOCK. WE ARE BRACING FOR EARNINGS AFTER THAT AND THE PROLONGED WEAKNESS IN THE CHIP SECTOR. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: TIME NOW FOR TALKING TECH. SEVERAL TAIWAN-BASED TECH FIRMS ARE HELPING HUAWEI BUILD A SECRET NETWORK OF CHIP PLANTS ACROSS CHINA.
IT'S UNCLEAR WHETHER THIS VIOLENCE AMERICAN SANCTIONS. HUAWEI DID NOT RESPOND TO REQUESTS FOR COMMENT. JAPAN IS APPROVING AS MUCH AS $1.3 BILLION IN SUBSIDY FOR THE MICRON FACTORY.
IT WILL HELP MICRON IN ITS LITHOGRAPHY EQUIPMENT. IT'S USED TO MAKE ADVANCED CHIPS IN IT MARKS A WIN FOR MICRON. A BIPARTISAN GROUP OF U.S. SENATORS HOPE TO MEET G JINPING IN CHINA NEXT WEEK WITH DISCUSSIONS ABOUT MICRON. THE DELEGATION LED BY CHUCK SCHUMER AND REPUBLICAN MIKE CRAPO WILL RAISE THE ISSUE OF MIKE ROUNDS ABILITY TO DO BUSINESS IN CHINA.
MICRON FACES AN ONGOING PROBE BY THE CHINESE GOVERNMENT ON CYBERSECURITY. WE WANT TO GET MORE ON THIS. ULTIMATELY, HOW LIKELY IS IT THE SENATORS WILL MEET WITH XI JIN PING. ANNMARIE: WE KNOW FROM AN INTERVIEW THAT THAT IS ONE ASKED. AT THIS MOMENT, HIS EASING THING IS NOT GUARANTEED THAT MEETING. THERE WILL BE A FLURRY OF MEETINGS WITH THESE BIPARTISAN GROUP OF SENATORS.
IN 2015, XI JINPING SAT DOWN WITH A NUMBER OF CONGRESSIONAL LEADERS ON A STATE VISIT BUT NORMALLY WHAT YOU WOULD SEE IS SENATORS OR ANY SORT OF LAWMAKERS ARE CABINET MINISTERS WOULD MEET WITH OTHER MINISTERS WITHIN THE CHINESE COMMUNIST PARTY GOVERNMENT APPARATUS BUT NOT XI JINPING HIMSELF. A XI MEETING COULD BE ON THE AGENDA AND THIS COULD OPEN UP THE DOOR FOR THAT BIDEN/XI JINP ING MEETING THAT COULD HAPPEN. SENATOR SCHUMER SAID OTHER THINGS WILL BE BROUGHT UP LIKE HUMAN RIGHTS AND FENTANYL BUT WE KNOW THAT MICRON IS IMPORTANT FOR BOTH -- FOR THIS BIPARTISAN GROUP. NOT JUST WHERE THEY ARE HEADQUARTERED BUT POTENTIALLY WHERE THEY WILL BUILD NEW FACTORIES.
ONE WILL BE PUT IN NEW YORK. MICRON SAID IN THE SUMMER THAT HALF OF THEIR SALES ARE LINKED TO COMPANIES HEADQUARTERED IN CHINA. THIS CYBERSECURITY VIEW HAS BEEN A HUGE DEAL IN THIS COMPANY AND WHETHER THEY CAN DO BUSINESS IN CHINA BUT ALSO ON THEIR REVENUE. CAROLINE:
THEY SAID ABOUT HALF OF ITS CHINA SALES SEEM TO BE AT RISK. YOU'VE GOT CHUCK SCHUMER OF NEW YORK BUT WHITE COALESCE AROUND THIS PARTICULAR COMPANY AND THIS MOMENT? WHAT DOES IT SAY ABOUT U.S.-CHINA TECH RELATIONS? ANNMARIE: IT HAS DISINTEGRATED OVER TIME IN THE CHINESE GOVERNMENT WILL SAY IT'S BECAUSE OF THE EXPORT CONTROLS AND THE OTHER PENALTIES AND SANCTIONS YOU ARE SEEING FROM THIS ADMINISTRATION. THE BIDEN ADMINISTRATION HAS BEEN CLEAR THEY WANT TO TAKE A NARROW APPROACH BUT THEY WANT TO MAKE SURE CHINA IS UNABLE TO GET THEIR HANDS ON CRITICAL TECH THAT POTENTIALLY CHINA COULD USE TO BOLSTER THEIR MILITARY. MANY SEE THAT WHAT CHINA HAS BEEN DOING IN TERMS OF THE CYBERSECURITY ADMINISTRATION, LOOKING AT WHAT'S GOING ON AT MICRON, THEY VIEW THAT AS A TIT-FOR-TAT COMING BACK TO THE UNITED STATS ABOUT -- KNIGHTED STATES ABOUT WHAT THEY DID WHEN IT COMES TO U.S.
TECHNOLOGY COMPANIES WHO WANT TO GET THERE HANDS ON CHINA. IT FEELS LIKE IT'S AT AN ALL-TIME LOW WHICH IS WHY IF THE SENATORS WERE TO MEET WITH THE CHINESE LEADER, IT COULD THAW SOME OF THAT ESPECIALLY MY COMES TO MICRON. CAROLINE: WE THANK YOU SO MUCH. COMING UP, WE TALK ABOUT ARTIFICIAL INTELLIGENCE AND HOW WE CAN HELP HEDGE FUNDS OUTPERFORM.
WE WILL BREAK DOWN THE RESULTS. WATCHING SHARES OF TESLA. IT'S GOT A LOT OF FOCUS ON CHINA BUT SEEING ITS FIRST-QUARTER DELIVERY DECLINE IN MORE THAN A YEAR OVER THERE. IT'S PUTTING BYD CLOSER TO BECOMING THE BIGGEST EV SELLER. THIS IS BLOOMBERG TECHNOLOGY. >> THIS IS GOING TO BE A SUPER HUGE IMPACT.
IT CAN HAVE AN ENORMOUSLY BENEFICIAL PRODUCTIVITY IMPACT. CAROLINE: TALKING ABOUT THE IMPACT OF AI BUT STICKING WITH ARTIFICIAL INTELLIGENCE MORE BROADLY AND HOW IT'S AFFECTING MANY INDUSTRIES. WHEN IT COMES TO HEDGE FUNDS BRIDGEWATER ASSOCIATES, MANY MONEY MANAGERS ARE NOT SEEING THE TECHNOLOGY LEAD TO OUTPERFORMANCE. THAT'S THE SUBJECT OF ERROR BLOOMBERG BIG TAKE. FASCINATING DEEP DIVE THAT YOU DO TO SHOW THAT AT THE MOMENT, WHILE ALL THESE STOCKS ARE GOING HIGHER ON THE BACK OF AI BETS, DEPLOYING AI WITHIN THE STOCKPICKING INDUSTRY IS PRETTY HARD TO DO? >> EXACTLY, IT REALLY IS THE IRONY OF THIS YEAR'S STOCK MARKET. WHAT A LOT OF INVESTORS ARE DISCOVERING IS THAT FINANCIAL DATA IS VERY DIFFERENT FROM A LOT OF OTHER KINDS OF DATA.
IT'S LIKE IF YOU ARE TRAINING CHATGPT IN GIBBERISH, IF YOU LOOK AT WHAT'S MOVING THE S&P 500 EVERY DAY, THERE IS SO MUCH NOISE IN THEIR THAT IF YOU ARE JUST PUSHING ALL THAT DATA THROUGH THE MACHINE, THE MACHINE IS PICKING UP A LOT OF NOISE. IT MIGHT NOT BE THAT HELPFUL IN HELPING YOU PREDICT WHAT HAPPENS TO THE S&P 500 TOMORROW. I THINK THAT IS THE PROBLEM THAT A LOT OF HEDGE FUNDS ARE RUNNING INTO BUT THAT'S NOT STOPPING A LOT OF QUANTITATIVE INVESTORS TO TRY TO CRACK THAT PUZZLE. CAROLINE: AND THEY'VE BEEN TRYING TO CRACK THE PUZZLE LONG BEFORE CHAT GPT BECAME PART OF OUR LANGUAGE. TALK TO US ABOUT THE PEOPLE YOU SPOKE TO IN THE INDUSTRY. ONE WAS UPENDED DURING THE COVID CRISIS BECAUSE THERE IS NO DATA FOR THAT.
>> I THINK THE COVID CRISIS IS A GREAT ILLUSTRATION OF WHITE AI IS HARD TO FINANCE. THE ENGLISH LANGUAGE IS NOT THAT DIFFERENT 100 YEARS AGO FROM NOW. OUR IPHONE CAN RECOGNIZE ANIMALS AS WELL BUT WHEN IT COMES TO FINANCIAL DATA, THERE ARE A LOT OF REGIME CHANGES. THE HOPE FOR MANY PEOPLE LIKE THE COFOUNDER OF RESEARCH AFFILIATES WHO WAS A CONVERT TO USING MACHINE LEARNING IN FINANCE, HE'S HOPING IF YOU FEED THE DATA INTO THE MACHINE, YOU ARE PICKING UP HOW THE ENVIRONMENT IS CHANGING AND THAT WILL MAKE HIS SYSTEMS MORE ADAPTIVE.
I THINK THAT IS THE DREAM OF A LOT OF PEOPLE THAT ARE TRYING TO APPLY MACHINE LEARNING IN FINANCE. CAROLINE: AT THE MOMENT WITH AI AND ALL THE ISSUES WITH THE DATA, ARE WE ABLE TO STILL SEE FUNDS AND AI DRIVEN WAYS OF STOCKPICKING IS KIND OF OK COMPARED TO PEOPLE? ARE WE ALREADY SEEING JOBS BEING LOST? >> I THINK FOR NOW, NOT JUST YET. WE LOOK AT THE TRACK RECORD OF AI HEDGE FUNDS.
THERE IS A HEDGE FUND INDEX AND THEY ARE NOT DOING MUCH BETTER THAN THE HEDGE FUND INDUSTRY OVERALL. IT'S NOT OBVIOUS THEY ARE NECESSARILY BETTER THAN HUMANS. ONE PERSPECTIVE I'VE HEARD IS IN A WAY, THEY DON'T NEED TO BE BETTER THAN HUMANS. IF YOU CAN RUN A PORTFOLIO WITH FAR FEWER HUMANS, THAT MIGHT ALREADY BE MORE EFFICIENT. IT MIGHT LOOK AT THE USE OF AI IN TERMS OF PRODUCTIVITY.
EVERYWHERE ON WALL STREET, WE SEE A LOT OF USES FOR USING CHATGPT TO SUMMARIZE RESEARCH AND THERE ARE EFFORTS IN USING THESE MACHINES TO READ THE NEWS WE READ OR READ TWEETS WE POST AND TRY TO TURN THOSE INTO TRADING SIGNALS. I THINK THERE ARE A LOT OF USES EVEN IF NOT EVERYONE IS USING AI TO BEAT THE MARKET. CAROLINE: WE THANK YOU SO MUCH.
COMING UP, WE WILL HAVE MORE ON THE FTX TRIAL. WE ARE JOINED BY MATT HOGAN. LET'S GET BACK TO SOME OF THE STOCKS ON THE MOVE.
NETFLIX, THEY PLAN TO RAISE PRICES OF ITS AD FREE SERVICE A FEW MONTHS AFTER THE HOLLYWOOD ACTORS STRIKE ENDS. WE ARE CURRENTLY DOWN AND THIS SHARES ARE RALLYING ON THE BACK OF THAT REPORT. FROM NEW YORK, THIS IS BLOOMBERG TECHNOLOGY. CAROLINE:CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY.
IT IS A GOOD DAY TO JUST FOR GOOD NEWS BEING BAD NEWS. THE JOBS NEVER SHOWED THE MORE RESILIENT JOBS MARKET. WHAT DOES THE FED HAVE TO DO TO COOL DOWN THE ECONOMY IN TERMS OF INFLATION PRESSURE? THE NASDAQ IS OFF BY ABOUT 1.5% AND SOME OF THE WORST
PERFORMERS IS DOWNGRADING A PARTICULAR STOCK, THAT'S CURTAILING AND WE HAVE REGULATORY HEADWINDS. AIRBNB IS ON THE DOWNSIDE. H P IS GETTING A DOUBLE UPGRADE, UP BY 2.25%. LET'S LOOK AT WHAT'S HAPPENING IN THE WORLD OF CRYPTO BECAUSE THAT'S THE STORY WHEN IT COMES TO LEGAL IMPLICATIONS FOR THE FTX FOUNDER. IT'S UP BY 1.5%.
KEEPING AN EYE ON ETH AND OTHER MAIN DIGITAL ASSETS. IT'S OFF BY SOME 2% BUT WE SAW A RALLY YESTERDAY. SAM BANKMAN-FRIED IS CHARGED WITH SEVEN COUNTS OF LAUNDERING MONEY WHICH IS A CASE THAT'S BEEN GOING ON FOR YEARS SO HOW DO WE GET HERE? WE HAVE THE BREAKDOWN IN A OF UNFOLDING EVENTS. KAILEY:
IN THE SPAN OF THREE YEARS, SAM BANKMAN-FRIED BECAME ONE OF CRYPTO'S BIGGEST STARS. IN MAY, 2019, HE AND HIS PARTNER FOUNDED FTX. IT'S GOAL WAS TO CREATE A SAFE AND RESPONSIBLE PLATFORM FOR TRADERS. BY OCTOBER, 2021, VENTURE CAPITALIST THAT POURED MILLIONS INTO FTX AND A LIST CELEBRITIES LIKE SHAQUILLE O'NEAL AND OTHERS HAD ENDORSED IT. THE SAME YEAR, THE FIRM WAS
VALUED AT $25 BILLION AND YOU -- AND USERS SWORD TO 5 MILLION GLOBALLY. THE FTX NAME BECAME WELL-KNOWN, PEERING ON T-SHIRTS, COMMERCIALS AND EVEN ON AN NBA ARENA. IN 2022, THE VALUATION SKYROCKETED TO $32 BILLION. FTX HAD BECOME ONE OF THE WORLD'S BIGGEST CRYPTO EXCHANGE IS. HIS NETWORK CLIMBED TO $26
BILLION AND HE SAID HE WANTED TO GOOD TO GOOD WITH HIS MONEY. >> IT'S NOT WHAT I SHOULD DO WITH MY MONEY BUT I'D LIKE TO HELP THE WORLD WITH IT. >> HE BECAME A MAJOR POLITICAL DONOR.
HE CONTRIBUTED TENS OF MILLIONS TO BIPARTISAN POLITICAL ACTION COMMITTEES AND FREQUENTED CAPITOL HILL TO BE A VOICE FOR HIS COMPANY AND THE INDUSTRY. AT THE TIME, HE HAD NO PLANS TO SLOW DOWN. >> I'M GOING TO BE HERE FOR THE LONG TERM. >> IN NOVEMBER OF 2022, THINGS BEGAN TO UNRAVEL. THE CRYPTO HEDGE FUND HE HAD FOUNDED, ALAMEDA RESEARCH, HAD A SIGNIFICANT PORTION OF ITS ASSETS MADE UP OF FTT, A TOKEN THAT FTX CREATED. ON NOVEMBER 6, THE CEO OF THE RIVAL CRYPTO EXCHANGE POSTED TO SOCIAL MEDIA SAYING WE HAVE DECIDED TO LIQUIDATE ANY REMAINING FTT ON HER BOOKS AND IT TRIGGERED A MASSIVE WAVE OF WITHDRAWALS, LIKE A RUN ON THE BANK.
FTX DID NOT HAVE THE FUNDS TO MEET THEM. IN A RESCUE ATTEMPT, FTX REACHED A DEAL WITH BINANCE TO SELL ITSELF BUT BINANCE BACKED OUT. THERE WAS A LOT OF FUNDS MISSING. I COULDN'T TRUST ANY OF THE INFORMATION. >> BY NOVEMBER 11, IT WAS OVER. FTX FILE FOR BANKRUPTCY AND SAM BANKMAN-FRIED RESIGNED AS CEO. THAT SAME MONTH, HE APOLOGIZED
AT A PUBLIC EVENT. >> I MADE A LOT OF MISTAKES, THINGS I WOULD GIVE ANYTHING TO DO OVER AGAIN. I NEVER TRIED TO COMMIT FRAUD ON ANYONE. >> A FEW WEEKS LATER, HE WAS INDICTED, ACCUSED OF MISAPPROPRIATING BILLIONS OF DOLLARS AT THE CRYPTOCURRENCY EXCHANGE. >> IT'S FAIR TO SAY THAT BY ANYONE'S MEASURE, IT'S ONE OF THE BIGGEST FINANCIAL FRAUDS IN HISTORY. CAROLINE: A GREAT BREAKDOWN FROM KAILEY LEINZ. WHAT HAS IT MEANT FOR
INSTITUTIONAL ADOPTION FOR THE HOPE OF CRYPTO MORE BROADLY? LET'S TALK ABOUT IT WITH MATT HOGAN. YOU'VE GOT YOUR OWN NEWS TO BRING TO THE TABLE ABOUT OFFERINGS TO INSTITUTIONS. JUST FOCUS ON THE TRIAL START TODAY. WILL THIS BE A CATHARTIC MOMENT
FOR THE INDUSTRY OR MORE PAIN BEFORE THE SUN COMES OUT AGAIN? >> I THINK IT IS MOSTLY OLD NEWS. WE WORK WITH PRIMARILY INSTITUTIONS AND FINANCIAL ADVISORS AND FROM NOVEMBER-APRIL, THEY WANTED TO TALK ABOUT FTX AND WHAT IT MEANT. EARLIER THIS SUMMER, BLACKROCK SAID IT WAS TRYING TO LAUNCH A SPOT BITCOIN ETF. THE WORLD'S LARGEST AS THAT MINISTER SAYING THE COAST IS CLEAR AND WE ARE READY TO MOVE ON INTO A NEW ERA OF CRYPTO PUT A CAP ON THE FTX CONVERSATION. IT HONESTLY HASN'T COME UP IN THE PAST FEW MONTHS. I THINK THERE WILL BE SOME
LURID COVERAGE OF THE TRIAL BUT THAT IS CRYPTO OF THE PAST. MANY PEOPLE ARE THINKING WHAT HAPPENS NEXT IN CRYPTO AND WHAT'S EXCITING, LET'S MOVE ON. CAROLINE: THERE'S BEEN A RALLY LATELY.
YOU ARE STILL OFFERING ETF ANDETP PRODUCTS FOR THE FIRST TIME. >> WE ARE VERY EXCITED TO EVENTUALLY LAUNCH SPOT ETF'S ON BITCOIN AND A THEORY HIM E -- THEREUM ONCE THE SEC ALLOWS THAT. PEOPLE HAVE THE CHANCE TO INVEST TODAY.
IF YOU THINK ABOUT THE FIRST BITCOIN ETF FILED, IT WAS IN 2013 AND IT WAS BELOW $100 PER COIN. IF YOU BEEN WAITING FOR THE SPOT BITCOIN TO COME, YOU MISSED A LOT OF APPRECIATION. MANY INVESTORS KNOW A SPOT BITCOIN ETF IS COMING. THEY WANT TO GET AHEAD OF THEM AND FOR THOSE INVESTORS, THESE ARE GREAT SOLUTIONS. CAROLINE: WHO ARE THESE INVESTORS? WHAT SORT OF INSTITUTIONS WANT TO GET INTO THE PRODUCT? >> RETAIL GREW INTO THIS TRILLION DOLLAR ASSET CLASS REALLY ON THE BACK OF RETAIL INVESTORS. WE HAVEN'T SEEN FINANCIAL AND VISORS COME IN IN A MAJOR WAY OR INSTITUTIONS COME IN IN A MAJOR WAY BUT AS WE KNOW, THAT'S THE MAJORITY OF THE MARKET, MAYBE 80% OF ALL THE WEALTH IN AMERICA HASN'T REALLY TAPPED INTO CRYPTO YET.
THEY CANNOT INVEST THROUGH AN APP ON THEIR PHONE. THEY NEED REGULATED ETF'S. I THINK THIS IS THE START OF A GAME CHANGER FOR THE CRYPTO INDUSTRY. I THINK WE WILL SEE SIGNIFICANT INFLOWS FOR THE 80% OF THE MARKET AND THEY WILL COME IN AND A YEAR OR TWO FROM NOW, CRYPTO WILL BE A MAINSTREAM ASSET THAT FITS IN PORTFOLIOS ALONGSIDE STOCKS, BONDS, REAL ESTATE AND OTHER COMMODITIES.
IT WILL BE MAINSTREAM IN A MAJOR WAY. CAROLINE: WHAT GIVES YOU THAT CONFIDENCE? WE HEARD THAT A COUPLE OF YEARS AGO AND VOLUMES SLOWED TO A TRICKLE AND INSTITUTIONAL ADOPTION FELL OFF A CLIFF. >> WE NOW HAVE ETF'S. FOR A LONG TIME, PEOPLE CRITICIZED THE SEC FOR BEING SLOW TO APPROVE ETF'S BUT WE HAD NONE UNTIL 2021 AND NOW WE HAVE CLOSE TO A DOZEN AND MORE ARE COMING. THAT BRINGS IT MAINSTREAM. WE ALSO HAVE LARGE ASSET MANAGERS COMING INTO THE SPACE, BLACKROCK, FIDELITY, FRANKLIN TEMPLETON, THE BIG TEAMS ARE COMING AND THAT MEANS ONE MILLION MORE CONVERSATIONS WITH PROFESSIONAL INVESTORS. THE MOST IMPORTANT THING IS WE ARE STARTING TO SEE THE REAL WORLD USE CASES THAT PEOPLE HAVE BEEN ASKING FOR. JUST TODAY, UBS HAS
TOKENIZATION TALKING ABOUT TOKEN RISING BONDS ON THE PUBLIC ETHEREUM BLOCKCHAIN, THE SAME YOU CAN INVEST IN. I THINK WE WILL SEE A BLOSSOMING OF REAL-WORLD APPLICATIONS AND THAT WHAT WILL BRING THE INSTITUTIONS. CAROLINE: EVERYONE IS WAITING FOR THE KILLER APP IN THE RETAIL COMMUNITY BUT THE ONGOING NARRATIVE THAT WE LIKE THE UNDERLYING TECHNOLOGY BUT WE DON'T LIKE THE ASSETS. WHY WOULD THE ADOPTION OF BLOCKCHAIN TECHNOLOGY REALLY BE A CALLING CARD TO BUY INTO AN ETF? >> IF YOU LOOK A FEW YEARS AGO, THERE IS THESE PROJECTS ON PRIVATE BLOCKCHAIN'S. J.P. MORGAN HAD A PRIVATE BLOCKCHAIN AND PEOPLE SAID THAT WILL BE THE FUTURE.
IT'S LIKE THE EARLY DAYS OF THE INTERNET. THE PILOT PROJECT NOW ARE BUILT ON ETHEREUM. THE BOND STRUCTURE BY GOLDMAN SACHS AND JB MORGAN AND UBS BUILT ON ETHEREUM. OFTEN AND TECHNOLOGIES, THESE PRIVATE CONTROLLED ENVIRONMENTS LOOK ATTRACTIVE AT THE BEGINNING LIKE THE INTERNET DID IN THE EARLY DAYS BUT OVER TIME, IT'S THE PUBLIC DECENTRALIZED PLATFORMS THAT WIND IF YOU LOOK AT THAT WHERE THE MAJOR INSTITUTIONS ARE BUILDING OUT, THEY ARE BUILDING ON THINGS LIKE ETHEREUM AND INVESTORS CAN INVEST IN THAT IN AN ETF. CAROLINE: WHAT ARE THE LIMITING FACTORS? THERE IS THE IDEA YOU WOULDN'T HAVE TO HAVE SOME MUCH ENERGY CONSUMPTION. THERE WAS A COMPLAINT OF GAS FEES AND ULTIMATELY THIS IS STILL PRETTY CUMBERSOME.
>> THERE IS STILL A LOT OF GAPS. THE USER INTERFACE NEEDS TO IMPROVE IN THE GAS FEES HAVE COME WAY DOWN. THAT PROBLEM IS AT LEAST 50% SOLVED BUT IT NEEDS TO BE 100% SOLVED. THE THING THAT WILL CAUSE A STEP FUNCTION IS REGULATORY OR LEGISLATIVE CLARITY. I AM OPTIMISTIC. WE HAVE RECENTLY SEEN A NUMBER
OF BIPARTISAN BILLS INTRODUCED, BIPARTISAN LETTERS COMING OUT PUSHING TO APPROVE A SPOT ETF. THERE IS LITTLE -- REAL POLITICAL MOMENTUM IN WASHINGTON AND THAT WILL BE THE FINAL UNLOCK BUT WE ARE ALREADY SEEING THOSE SIGNS AND I POINT TO THE MAJOR INSTITUTIONS BUILDING TODAY. CAROLINE: THERE HAS BEEN A WORRY THAT THE REGULATION IS EVOLVING SLOWER HERE THAN ELSEWHERE. DO YOU SEE SOME OF THAT TALENT SHIFTING ABROAD AND PEOPLE WANTING TO BUILD THINGS NOT IN THE U.S.?
>> WE ARE SEEING A LOT OF THE ATTENTION SHIPPED TO LONDON AND A LOT OF IT SHIFTS TO SINGAPORE. THE CRYPTO ENVIRONMENT IS BLOSSOMING IN A WAY THAT'S NOT HERE IN THE U.S.. THE U.S. ALWAYS FIGURES OUT THE RIGHT THING AFTER TO ALL POSSIBILITIES. I'M CONFIDENT WE WILL DO THAT HERE BUT THERE IS A LOT OF CAPITAL INVESTED IN CRYPTO BUT WE ARE BEHIND. I SEE PROGRESS. I REALLY SEEN A CHANGE OVER THE LAST FEW MONTHS AND IT MAKES ME OPTIMISTIC FOR 2024 AND AFTER. CAROLINE: SOME OPTIMISM AROUND THE CRYPTO SPACE, THANKS FOR COMING IN TO TALK WITH US ABOUT THIS.
COMING UP, LOOK AT THE PULSE OF THE VC INDUSTRY AND IF THERE IS OPTIMISM. THAT'S NEXT, WE ARE CONTINUING TO WATCH INDIVIDUAL COMPANIES TODAY. NOT MUCH ENTHUSIASM AROUND PALANTIR. THIS IS A COMPANY THAT HAS RUN
UP IN RECENT DAYS BECAUSE THEY GOT THAT BIG CONTRACT FROM THE U.S. GOVERNMENT IS DESIGNED TO SEE MORE AI ADOPTION BY KEY GOVERNMENT SO THEY ARE SELLING INTO THE U.S. FOR THE TIME BEING. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: IN TODAY'S VC SPOTLIGHT, THE PARTNER AT A GLOBAL FINTECH PLATFORM IS VERY MUCH IN THE EARLY STAGES. HE DEPLOYED 300 MILLION IN CAPITAL.
WE WERE HAVING A PRETTY OPTIMISTIC CONVERSATION AROUND CRYPTO ADOPTION EVEN IN SPITE OF SVB, SBF. WHAT IS THE INDUSTRY FEELING NOW IN THE WORLD OF FINTECH AND PUTTING MONEY INTO THESE STARTUPS? >> FINTECH HAS BEEN, AS THE ENTIRE SECOND -- TECH SECTOR HAS BEEN, FAIRLY SLOW THROUGH THE YEAR. I WILL SAY THE STORY OF Q2 WAS INFLECTION POINT. ROUND SIZES IS GOING UP FOR THE FIRST TIME. ALSO VALUATIONS HAVE SLOWLY TICKED UP.
IT MIGHT BE THAT Q1 COULD HAVE BEEN THE BOTTOM BOTH HER FINTECH BUT ALSO FOR EARLY-STAGE STARTUP INVESTING IN GENERAL. I'M DEFINITELY SEEING SIGNS OF OPTIMISM IN BOTH FINTECH AND THE BROADER TECH ECOSYSTEM AND ENVIRONMENT. CAROLINE: WHAT DO YOU THINK WAS THE CATALYST FOR THAT BOTTOMING? IS IT THAT THESE COMPANIES HAVE TAKEN BITTER PILLS AND RECTIFIED HOW THEIR REVENUE AND BURN RATE'S ARE OR ARE WE GETTING MORE BROAD IDEAS OF OPTIMISM LIKE EXITS IN THE IPO MARKET? >> I THINK IT'S A COMBINATION OF BOTH. EVERYBODY IS LOOKING AT THE IPO MARKET VERY CAREFULLY. THE STORY OF ARM AND CLAVIO, THE AI STORY IS PRETTY CLEAR. IF YOU HAVE AN AI STORY, YOU WILL TRADE UP IN THE PUBLIC MARKETS AND AT A PREMIUM IN THE PRIVATE MARKETS.
EARLY-STAGE AND LATE STAGE. THE SECOND FACTOR IS LOTS OF COMPANIES DELAYED THEIR RAISES. EVERYONE RAISE A LOT OF MONEY IN 2021 AND THEY DELAYED AND I FEEL LIKE NOW, FOLKS HAVE COME BACK TO MARKET IN 2023 BECAUSE YOU CAN'T WAIT FOREVER. IT'S ESTIMATED THAT UNICORNS WILL NEED TO RAISE 300 BILLION DOLLARS BY THE END OF THIS YEAR. THE THIRD FACTOR I WOULD SAY
HIS FUNDS ARE SITTING ON ALMOST 400 BILLION DOLLARS OF DRY POWDER WHICH WAS RAISED IN 2021-2022. OTHER VCS ARE ITCHING TO GET DEALS DONE SO I THINK IT'S A COMBINATION OF THOSE THREE THINGS THAT ARE DRIVING SOME KIND OF WIDER OPTIMISM IN THE MARKET, NOT ONLY AT THE SEED STAGE. SEED VALUATIONS DID NOT CHANGE THAT MUCH FROM 2020-TO 2023. IT'SA AND ONWARDS WHERE WE ARE
SEEING MORE DEALS GET DONE AND VALUATIONS START TO TICK UP IN 2023. CAROLINE: OUR PEOPLE EXCITED FOR THE DEPLOYMENTS TO GET GOING? >> I THINK LP'S ARE NOT PUTTING PRESSURE ON TO DEPLOY IN SHORT TIME. WE SAW FUNDS DEPLOYING THEIR FULL CAPITAL ALLOCATION WHICH WOULD TYPICALLY HAVE BEEN THREE HAVE FOUR YEARS AND 12 MONTHS. SOMETIMES LESS AND SOMETIMES MORE.
WE HAVEN'T SEEN A PUSH FROM OUR INSTITUTIONAL LP'S TO COME BACK TO MARKET. IT'S BEEN A LITTLE BIT OF THE OPPOSITE BECAUSE IF YOU ARE AN INSTITUTIONAL LP THAT IS A PENSION COME UNITE BE FACING WHAT IS KNOWN -- YOU MIGHT BE FACING THE DENOMINATOR AFFECT WHICH MEANS REBALANCING YOUR PORTFOLIO. AS THE PUBLIC MARKET WENT DOWN, WE SAW THE SHARE OF PRIVATES BE POTENTIALLY LOOK A LITTLE BIT MISALLOCATED SO THERE'S BEEN A SHIFT FROM SOME OF OUR LP'S. I DON'T THINK THERE'S BEEN A PUSH FOR VC FUNDS TO NECESSARILY DEPLOY BUT WE ARE DEALMAKERS AT THE END OF THE DAY SO EVERYBODY IN THIS JOB IS EXCITED ABOUT DOING DEALS. CAROLINE:
WE WILL SEE HOW THE DEALS CONTINUE TO UNFOLD. THANK YOU FOR SHINING A LIGHT ON THELP SIGN OF THE EQUATION. I MANAGED TO CATCH UP WITH ANOTHER FOUNDER, SALLIE KRAWCHECK. I WAS AT THE NASDAQ AND WE TALKED ABOUT HOW HER COMPANY USES TECHNOLOGY TO HELP WOMEN BUILD WELL BEYOND THE TRADITIONAL FINANCIAL TOOLS. TAKE A LISTEN. >> WE WERE THE FIRST WHO SAID WE WILL CHANGE THE UNDERLYING PRODUCT USING TECHNOLOGY. TO YOUR POINT, WHERE THE FIRST TO BUILD A GENDER AWARE INVESTMENT PLATFORM WHICH DOESN'T MATTER IF YOU ARE A GUY BUT IF YOU'RE A WOMAN WHO EARNS LESS, YOUR SALARY PEAKS SOONER AND YOU TAKE MORE CAREER BREAKS AND YOU DIE LATER, IF YOU ASSUME YOUR AVERAGE, YOU RISK RUNNING OUT OF MONEY.
ON TOP OF THAT, WE USE TECHNOLOGY AND LEARNING AND RESEARCH TO CHANGE A ZILLION THINGS ABOUT THE PROJECT. WE LEARNED THAT IT'S NOT THAT WOMEN ARE RISK-AVERSE THAT WHEN THEY GET TO THE POINT OF THE ONBOARDING, WE FOUND THAT WHAT MEN WILL DO IS SAY THAT SEEMS PRETTY IMPORTANT, I WILL TAKE AN EDUCATED GUESS. WOMEN SAY THAT SEEMS PRETTY IMPORTANT BECAUSE I WOULD SOCIALIZE TO BE PERFECT AND LITTLE BOYS ARE SOCIALIZED TO BE BRAVE. I'M GOING TO LEAVE. I'M GOING TO FIGURE THIS OUT AND I'M GOING TO COME BACK. YOU KNOW WHAT IS MORE INTERESTING THAN FIGURING AT YOUR RISK TOLERANCE? EVERYTHING. THEREFORE YOU DON'T COME BACK. IT'S THE SAME WITH JARGON.
>> THEY ARE JUST NOT GETTING ACROSS THAT HURDLE? >> AS IT TURNS OUT, THE ONBOARDING WAS BUILT FOR MEN. WE SAID HOW DO WE GIVE HER THE INFORMATION AND HOW DO WE SOLVE THE PROBLEM IF SHE DOESN'T HAVE A RISK TOLERANCE, WHAT CAN WE DO ABOUT THAT? RATHER THAN SAY IS LOST, WE SAID WE WILL DO THE HARD WORK. TELL US EVERYTHING ABOUT YOU AND WHAT PART OF THE COUNTRY YOU ARE AND HOW OLD YOU ARE AND WHAT INDUSTRY YOU'RE IN SO WE CAROLINE: A NEW ARTIFICIAL INTELLIGENCE STARTUP IS CHALLENGING MORE ESTABLISHED REBELS BITE SOLVING A PROBLEM -- LETTING ANYONE CREATE AN IMAGE OF A CAT ON IT T-SHIRT WITH A SLOGAN YOU CAN READ. RACHEL METZ HAS A GREAT STORY ON IGIOGRAM TODAY.
WHY IS THIS SO HARD FOR OTHERS TO DO IN GENERATIVE AI? >> THESE TYPE OF IMAGE GENERATORS ARE TRAINED ON PAIRS OF IMAGES AND RELATED CORRESPONDING TEXT. OFTEN, THE IMAGES WON'T HAVE TEXT OR THEY WON'T BE TRAINED TO USE THE WIDE VARIETY OF TEXT YOU WOULD USE IF YOU ARE TRAINING A SYSTEM ON PICTURES OF APPLES OR CATS WHERE WE WOULD HAVE THEM FROM DIFFERENT ANGLES AND DIFFERENT LIGHTING. THIS COMPANY, DOESN'T SAY EXACTLY HOW THEY ARE DOING A IT SOUNDS LIKE THEY ARE USING A BIT OF TEXT IN THEIR TRAINING IMAGES WHICH MAY HAVE HELPED IT GET BETTER AT DOING THINGS LIKE GIVING YOU PICTURES OF A CAT WEARING A T-SHIRT THAT HAS A SLOGAN ON IT. CAROLINE: THEY ARE BEAUTIFUL PICTURES. ASK GOOGLERS FOUNDED IT SO HOW ARE THEY COMPETING? >> THEY'VE TAKEN A REALLY DIFFERENT APPROACH THAN MID JOURNEY OR OPENAI OR STABLE DIFFUSION. THERE IS IS A LITTLE MORE LIKE A SOCIAL NETWORK AT THE MOMENT. THE WEBSITE IS FREE TO USE. THEY ARE PLANNING TO HAVE A
PAID SERVICE BUT EVERYTHING YOU GENERATE AT THE MOMENT IS OPEN TO THE PUBLIC. THEY ARE HOPING THAT ACTUALLY HELPS WITH BEHAVIOR LITTLE BIT SO PERHAPS PEOPLE WILL BE A LITTLE BIT KINDER ABOUT WHAT THEY ARE GENERATING AND NOT USE IT AS NASTY AS THEY COULD USE IT PRIVATELY. CAROLINE: TO BE NOTED BEFORE THE ELECTION. READ THE RACHEL METZ STORY ABOUT THE STARTUP WORLD IN AI. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. BLOOMBERG CRYPTO WAS UP NEXT, A DEEP DIVE INTO THE FTX TRIAL AS IT STARTS TO UNFOLD.
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2023-10-05 22:13
