Gary Gensler on 'Bloomberg Technology 03/02/2023
CAROLINE: I AM CAROLINE HYDE NOT IN NEW YORK. ED: BOTH OF US ARE IN SAN FRANCISCO. AND PUBLIC MARKET RELATIVELY IS HITTING A SMACK IN THE FACE -- VOLATILITY IS HITTING US SMACK IN THE FACE. CAROLINE: TESLA SHEDDING TENS OF BILLIONS OF DOLLARS OF MARKET VALUE. ED: AND WHY THE COMMERCE SECRETARY TOLD US U.S. CONCERNS OVER CHINESE APPS GO BEYOND TIKTOK. CAROLINE:
AND A CONVERSATION WITH GARY GENSLER ABOUT HIS CONCERNS OVER ARTIFICIAL INTELLIGENCE. SILVER GATE CONTINUES TO PLUNGE AFTER CONCERNS. FIRST, LET US LOOK PUBLIC MARKETS. I WANT TO DIVE IN ON THE MACRO,
NOT JUST CRIB GO. THE NASDAQ IS UP. THIS IS SO MACRO FOCUSED. ONE OF THE KEY FED VOICES HAS COME OUT AND SAID WE COULD TO SEE A PAUSE IN INTEREST RATE HIKES. CHINA WAS A LITTLE BIT OF A DRAWBACK.
THE TWO YEAR YIELD IS FLAT. LET'S GET TO THE WORLD OF CRYPTO. THE DOLLAR RESOLUTELY HIGHER AGAINST MOST TODAY BUT IN THE LAST COUPLE OF DAYS CRYPTO HELD ONTO A GAIN. RELATIVE STABILITY BUT PLAYERS WITHIN THE SPACE ARE GETTING ATTENTION. ED: EVERYONE IS USING SPECIFIC
ASSETS AS A LENS. WE WILL TALK ABOUT MACY'S LATER. WE HAD SOME BIG TECHNOLOGY NAMES REPORT AFTER THE BELL. DELL DOWN 3.24 PERCENT AFTER BEING SIGNIFICANTLY HIGHER AGAINST EXPECTATIONS IN THE FOURTH QUARTER. THEY ANNOUNCED A NEW CAO. -- CEO.
NARRATIVE IS DRIVING THE STOCK UP ALMOST 19% FOR C3 J. THERE IS DEMAND AND OUTPERFORMANCE RELATIVE TO WHAT WE SEE SOME INDUSTRY PEERS. AND OUTPERFORMER. WE ARE UP MODESTLY HIGHER. GIVING A BULLISH REVENUE FORECAST THAT SHOWS AND MARKETS MIGHT STILL BE SPENDING. CAROLINE: NOTABLY THE LEADER OF THIS BUSINESS IS RESOLUTE IN HOW THEY MANAGE SUPPLY, REFUSING TO BOW TO THE USUAL GLUT AND THE WORRY WE GET AN OVERSUPPLY. AT THE MOMENT WE SEE IT RELYING ON STRICT POLICIES. ED:
THAT IS WHAT THEY WERE LOOKING FOR, THE BACKLOG. NOTHING ON THE ACQUISITION THEY ARE TRYING TO GET DONE. CAROLINE: LET'S GET TO ANOTHER KEY STOCKS, TESSLER. NOT MUCH LOVE FROM SHAREHOLDERS FOLLOWING YESTERDAY'S EVENT. WE INCLUDED A THIRD MASTER PLAN ON THIS TIME THE TRANSITION TO CLEAN ENERGY.
IT FEELS LIKE WE SAW NEWS ON THIS. >> I THINK PEOPLE WERE EXPECTING MORE SPECIFICS ON THE PUBLIC SIDE. ELON MUSK SAID THE NEXT GENERATION PLATFORM WOULD BE A BIG FOCUS AND WHILE WE GOT SOME SHAPE OF IT AND SOME OF WHAT IT WILL GO INTO -- WILL GO INTO IT BUT ON THE EFFICIENCY SIDE WE DID NOT GET SPECIFICS, JUST A TEASE THAT WE WILL HAVE TO WAIT FOR A LATER DATE TO SEE MORE.
ED: FOR FOUR HOURS WE FOLLOWED ALONG. WHICH HEADLINES DID WE GET, WHAT DID WE LEARN FROM THE PRESENTATION? >> I THINK ONE OF THE BIG THINGS FOR ME HERE IN TEXAS IS THEY CONFIRMED THEY BROKE GROUND ON A LITHIUM REFINERY NEAR CORPUS CHRISTI. MUSK CONFIRMED IN OCTOBER ON A CALL BUT IT HAS BEEN QUIET EVER SINCE. LOCAL SOURCES IN THE LAST COUPLE OF WEEKS HAVE SAID THEY ARE IN LOCAL GOVERNMENT AND HAVE NOT HEARD ANYTHING FROM TESLA AND I DID NOT SEE MUCH WORK WAS BEING DONE ON THE SITE. SO THEY WERE A BIT AFRAID IT WAS NOT GOING TO HAPPEN BUT THIS IS THEIR FIRST BIG STEP INTO THE LITHIUM SUPPLY CHAIN THAT IS MAY BE ON THE WAY TO A POTENTIAL MINING ACQUISITION.
WE HAVE GOTTEN SOME REPORTS ABOUT THAT BUT THIS IS A HANDS DIRTY SORT OF THING AND THEY WILL MOVE QUICKLY BECAUSE THEY WANT TO HAVE PRODUCT COMING OUT OF THE FACILITY, REFINED LITHIUM GOING TO OTHER FACTORIES BY THE END OF THIS YEAR OR EARLY 2024. ED: TERRIFIC REPORTING. I WANT TO BRING IN FUTURE FUNDS MANAGING PARTNER GARY BLACK WHO WAS AT THE EVENT LAST NIGHT IN AUSTIN AND THE MARKET SELLING THE NEWS. ARE YOU AS DISAPPOINTED AS THE MARKET WAS? >> THERE ARE A COUPLE OF THINGS. IT WAS GOING TO GO DOWN ANYWAY. GOING INTO TODAY, TESLA WAS UP 100%. WITH HEDGE FUNDS PLAYING THE GAME BECAUSE OF THIS EVENT, IT WAS GOING TO GO DOWN REGARDLESS. BUT I THINK THE INVESTOR DATA
ITSELF WAS ASPIRATIONAL BUT SHORT ON DETAIL AND THAT IS WHAT YOU SEE WITH TODAY'S MOVE. I WOULD SAY THE THIRD PROBLEM, THERE WAS NO PRODUCT UNVEILED, EVEN THOUGH THERE WERE A LOT OF RUMORS THAT THERE WOULD BE ONE, AND THERE WAS NO FINANCIAL TARGET. YOU PUT THOSE THINGS TOGETHER AND I THINK THAT IS WHY STOP WAS OFF 6% IN A 1% DAY ED:. I NOTICED ON YOUR TWITTER YOU WERE WITH ROSS KERBER DURING THE EVENT AND HE MADE A FRIENDLY ACTIVIST BID WHICH WAS DROPPED. HIS GRIEVANCE WAS LACK OF OTHER EXECUTIVES. WERE YOU CONVINCED BY THE 16
NAMES YOU HEARD FROM THAT THERE ARE OTHERS AT THE COMPANY LEADING THE CHARGE? >> THERE ARE A FEW THINGS TO GIVE TESLA CREDIT FOR WHAT THEY ACCOMPLISHED, I THINK THEY MADE A CONVINCING CASE, THEY HAVE A DEEP TEAM. I TOOK A PICTURE OF THE KEY ONE DAY, THERE WERE 18 PEOPLE LINED UP AND -- -- A TOOK A PICTURE OF THE QUESTION AND ANSWER, THEY HAD 18 PEOPLE LINED UP IN A ROW ON THE STAGE WITH ELON MUSK IN THE MIDDLE OF COURSE. BUT THEY DID NOT GIVE A TIMEFRAME ON THEIR NEW PLATFORM.
THAT IS ONE OF THE DATA POINTS THAT WOULD'VE BEEN HELPFUL TO HAVE. THE OTHER THING THAT WAS HELPFUL IS THEY SAID -- IS COMING THIS YEAR. THAT IS A BIG CATALYST THAT COULD ADD A DOLLAR A SHARE NEXT YEAR IN EARNINGS IF THEY GOT UP TO 100,000 DELIVERED. SO THOSE THINGS WERE POSITIVE BUT THERE WAS NOT A LOT OF DATA TO CONNECT THE DOTS. THEY MADE THE CASE THAT VOLUMES WILL GO FROM 1.8 MILLION THIS YEAR TO 20 MILLION BY 2030 AND
THAT IS A BOLD ASSERTION BUT THERE WERE NOT A LOT OF DEMAND ELEMENTS TO SUPPORT IT. THOSE ARE THE THINGS THAT WOULD WORRY AND IT INSTITUTIONAL INVESTOR. CAROLINE: THEY ARE SHOWING A DEEP BENCH FOR EXECUTIVES AND A DESIRE TO HAVE MORE IN-HOUSE TECHNOLOGY. THERE WAS A BIG MOVE IN
SUPPLIERS TODAY. >> I LIKE THAT THEY ARE TRYING TO DO A LOT OF IT INTERNALLY. THEY ARE DOING IT THEMSELVES. WE OWN WOLF AND THEY MADE THE POINT THEY WILL CUT SILICONE BY 60%. TESLA MAKES A LOT OF CLAIMS. SOMEONE SAID LAST NIGHT, YOU CANNOT ALWAYS TAKE THOSE CLAIMS LITERALLY BECAUSE IT TAKES THEM A LONG TIME.
SO IT COULD OR COULD NOT HAPPEN. IF I AM A SUPPLIER, SOME SUPPLIERS GOT HURT TODAY, I WOULD NOT GET TOO WORKED UP ABOUT IT BECAUSE A LOT OF TIME THESE CLAIMS OF TESLA DO NOT MATERIALIZE. TO ME, WE THINK WOLF IS STILL A CHEAP STOCK AND WE THINK IT WILL BE FINE OVER TIME. CAROLINE: DO YOU GET FRUSTRATED WITH MASTER PLANS AND THE FACT THAT PERHAPS THEY ARE NOT EXECUTED AND WE ARE ALREADY TALKING ABOUT THE NEXT ONE? >> ELON IS BRILLIANT BUT UNPREDICTABLE AND AS AN INVESTOR YOU DON'T LIKE THAT. WE GET FRUSTRATED WITH IT.
WHEN HE BOUGHT TWITTER WE WERE FRUSTRATED BECAUSE IN MY EXPERIENCE IT IS HARD TO RUN TO COMPANIES AND HE RUNS THREE OR FOUR. TWITTER IS A WHOLE DIFFERENT ANIMAL. SPACEX AND OTHERS THAT HE BUILT FROM SCRATCH. TWITTER IS A TOTAL REBUILD SO THAT IS FRUSTRATING. IT IS FRUSTRATING THAT HE OFTEN DOES A 180.
THAT IS WHAT MAKES HIM SKILLED AND SUCCESSFUL. ONE THING IS WHEN HE REALIZES HE IS WRONG, HE WILL IMMEDIATELY TURN AND GO IN THE RIGHT DIRECTION. WE SEE THAT OVER AND OVER WITH TESLA. FOR EXAMPLE THEY TOOK RADAR OUT OF THE FSD AND YOU REALIZED HIGH DEATH RADAR -- HIGH DEFINITION RADAR, YOU ARE NEVER PUTTING IT BACK IN. HE ADDS A LOT OF VALUE AND HE IS BRILLIANT AND ADDS TREMENDOUS VALUE FROM A STOCK STANDPOINT, BUT AT TIMES YOU HAVE TO BE READY TO TILT WHEN HE TILTS. CAROLINE: GARY BLACK, GREAT TO HAVE TIME WITH YOU.
COMING UP, WITH RISING PRESSURE FROM THE U.S. GOVERNMENT AND OTHERS, WE DIG INTO THE POTENTIAL THREAT ASSOCIATED WITH TIKTOK AND WILL TALK WITH DAVID KENNEDY, AND ETHICAL HACKER, NEXT. ED: CHECK OUT SHARES FROM ACTIVISION BLIZZARD. WE LEARNED MICROSOFT LAWYERS MET WITH COMPETITION IN MARKETS AUTHORITY WHICH IS SAID A MERGER COULD RESULT IN HIGHER PRICES AND FEWER CHOICES FOR GAMERS. THE STOCK OPTIMISTIC SOMETHING WILL GET DONE. THIS IS BLOOMBERG. ♪
>> WHAT WE ARE WORRIED ABOUT IS CHINESE BACKED COMPANIES BEING ON TENS OF MILLIONS OF AMERICAN PHONES, INCLUDING MEMBERS OF THE MILITARY, AND PRIVACY CONCERNS, DATA CONCERNS, MISINFORMATION CONCERNS. THAT DOES NOT JUST APPLY TO TIKTOK. ED: THAT WAS U.S. COMMERCE SECRETARY TALKING ABOUT HER CONCERNS AROUND TIKTOK AND OTHER CHINESE SOCIAL MEDIA AT THAT ARE SAID TO THREATEN NATIONAL SECURITY. A FORMER NSA HACKER IS WITH US. DAVID, WHERE IS THE VULNERABILITY? WHY IS THE COVER SECRETARY CONCERNED ABOUT OTHER CHINESE OPS AS WELL? >> WE HAVE SEEN FOR YEARS THAT CHINA HAS CREATED ONE OF THE LARGEST SURVEILLANCE SYSTEMS GLOBALLY. CYBER WARFARE, THEY ARE ONE OF OUR COMPETITORS IN THE CYBERSPACE.
THEY YIELD TRILLIONS OF DOLLARS OF INTELLECTUAL PROPERTY THEFT PER YEAR. THEY DO NOT PLAY BY ANY RULES. THE BIG CONTRAST FROM SOCIAL MEDIA COMPANIES IN THE UNITED STATES VERSUS CHINA IS THEY CONTROL THE CONTENT THAT IS DELIVERED TO THE ENDPOINT FOR THE PHONE OR DEVICE LOOKING AT TIKTOK, AS WELL AS THE INFORMATION THAT IS COLLECTED THAT COULD BE USED BY THE GOVERNMENT. GOVERNMENT EMPLOYEES, LOCATIONS, INFORMATION ABOUT INDIVIDUALS, THEY USE THIS AS ANOTHER SOURCE AND THEY ARE ONE OF THE BEST WHEN IT COMES TO LARGE BIG DATA ANALYTICS AND WHAT THEY ARE DEALING WITH TRACKING PEOPLE ACROSS THE WORLD IS A MAJOR CONCERN. ED: YOU ARE A HACKER. THE FRIENDLY KIND, AS I UNDERSTAND IT. WHAT I DO NOT UNDERSTAND IS, IS THIS A SORT OF SYSTEMS VULNERABILITY, OR IS THIS AN ISSUE OF WHO HAS ACCESS TO DATA? >> IT IS A COMBINATION OF BOTH. IF YOU LOOK AT BYTEDANCE, WHICH
IS A SUBSIDIARY COMPANY OUT OF BEIJING, THEY CONTROL THE CODE THAT GOES INTO THE DEVICES. APPLE HAS A PRETTY STRINGENT POLICY AROUND INSPECTING SOURCE CODE. GOOGLE -- GOOGLE IS A LITTLE MORE OPEN. THE COLLECTION OF THE DATA ASPECT AND WHERE THE DATA GOES IS THE MOST CONCERNING PART. COULD THEY INTRODUCE CODE THAT COULD EAVESDROP ON U.S. CITIZENS, ABSOLUTELY.
BUT THE MAIN CONCERN IS THE AMOUNT OF INFORMATION THEY ARE COLLECTING AND THEN USING TO GO AGAINST KEY PERSONNEL THEY WOULD LOOK TO TARGET OR PEOPLE OF INTEREST TO THE CHINESE GOVERNMENT. SCIENTISTS, MEDICAL RESEARCHERS, CONTRACTORS THAT FOCUS ON WEAPONS SYSTEMS, MISSILE DEFENSE, AS WELL AS THE ABILITY TO CONTROL CONTENT THAT GOES TO INDIVIDUALS. SO WHAT IS MOST IMPORTANT TO UNDERSTAND IS THEY CAN HONE IN AND FOCUSED CONTENT ON INDIVIDUALS AND CHANGE THEIR PERCEPTION OF WHAT IS REAL. WE LOOK THROUGH OUR DEVICES, WE LIVE THROUGH TIKTOK AND FACEBOOK AND TWITTER AND VARIOUS ONLINE NEWS SOURCES SO WHAT IS PRESENTED AS CONTENT IS OUR WORLD VIEW OF WHAT IS HAPPENING.
SO CAN YOU CURVE PUBLIC OPINION BASED ON THE CONTENT ON TIKTOK? ABSOLUTELY POSSIBLE. CAROLINE: THERE IS MUCH TALK FROM THE ADMINISTRATION ABOUT DOING SOMETHING WITH TIKTOK. STATES ARE STARTING TO STEP IN, OR PARTICULAR INSTITUTIONS. IS THAT THE RIGHT WAY TO DEAL WITH THIS? >> BANNING TIKTOK OUT RIGHT IS INTERESTING. WHAT RECENTLY HAPPENED WITH BANNING IT FOR GOVERNMENT EMPLOYEES IS SOLID. WE REMOVED HUAWEI FROM BEING ABLE TO BE PURCHASED FOR THE MILITARY.
AND THERE IS EVIDENCE THAT HUAWEI HAS WORKED WITH THE CHINESE GOVERNMENT. BUT DOES THE FEDERAL GOVERNMENT PLAY A ROLE ON -- IN WHAT U.S. CITIZENS CAN DO? THEY HAVE LARGELY STAYED AWAY FROM IT AND STATES ARE LOOKING AT PERSONAL INFORMATION BEING IMPORTANT. NOT JUST TIKTOK. YOUR PERSONAL DATA STORED IN CORPORATIONS. THE EU DOES THIS WELL WITH PROTECTING PERSONAL INFORMATION. SO STATES ARE LOOKING AT THIS AND SAYING, CAN WE LOOK AT THIS AS A PRIVACY ISSUE AND CAN WE PUT CONTROLS IN PLACE THAT HOLD BYTEDANCE ACCOUNTABLE FOR WHERE THE DATA IS STORED AND HOW IT IS PROTECTED? NOT NECESSARILY BANNING IT.
I THINK THAT IS A BETTER APPROACH. CAROLINE: WE WILL CONTINUE TO KEEP COMMUNICATIONS OPEN. THANK YOU SO MUCH, DAVID. WE HAVE TALKED ABOUT THE CYBERSECURITY INDUSTRY AND HOW IT IS SEEING HIGH LABOR SHORTAGES IN THE FACE OF ALL THE WORK TO BE DONE.
BUT IT IS AN ISSUE ACROSS THE BOARD IN AMERICA, THE LABOR SECRETARY. HERE IS WHAT WAS SAID EARLIER ABOUT TOP CONCERNS FROM CEO. >> WORKFORCE. IT IS UNBELIEVABLE.
WE CANNOT HIRE ENOUGH, WE CANNOT HIRE FAST ENOUGH, WE CANNOT HIRE PEOPLE WITH THE SKILLS WE NEED. CAROLINE: SO WE WENT TO YOU AND ASKED HER AUDIENCE, DOES THIS APPLY TO TECHNOLOGY? THE LABOR TIGHTNESS SHE TALKS TO ABOUT IS IT HERE? ED: IT IS A DIVISIVE SUBJECT IN THE TECH SECTOR. CAROLINE: 57 PERCENT SAY THE MAIN CONCERN IS TALENT. ED: COMING UP, SALESFORCE CEO ON THEIR PIVOT TOWARD PRIVATIZATION . THE RESTRAINT -- THE CHANGE IN
STRATEGIES SEEMS TO BE PAYING OFF FOR INVESTORS. THAT IS NEXT. >> AS WE REALLY FOCUS ON OUR PERFORMANCE, PROFITABILITY, REPORTING TO ORGANIZATION, -- PRIOR TO ORGANIZATION, IT WAS IMPORTANT TO FOCUS MORE ON OUR CORE AND THE TRANSPORTATION -- TRANSFORMATION I PUT INTO THE COMPANY IN THE LAST FEW DAYS. CAROLINE: LET'S BRING IN OUR ANALYST. AS IT RE-PRIORITIZES, WHAT SHOULD
HE BE THINKING OF IF IT IS NOT M&A? >> ORGANIC GROWTH RATE IS VERY IMPORTANT FOR THIS COMPANY. THEY'VE BEEN DECELERATING FOR A WHILE AND IT NEEDS TO GO UP. THE BIG THING IS THEY SPEND WAY TOO MUCH ON SALES AND MARKETING. EVERYONE IS LOOKING AT A COMPANY LIKE THIS. EVERYONE KNOWS SALESFORCE.
WHY IS IT SPENDING 40% ON SALES AND MARKETING COMPARED TO MICROSOFT, WITH 11%? THEY'VE BEEN AROUND FOR 25 YEARS. ED: YOU SAY EVERYONE KNOWS SALESFORCE. THIS IS THE NEW SALESFORCE. WHAT IS ATTRACTIVE ABOUT IT? >> PHILOSOPHICALLY, EVERY GOOD COMPANY SHOULD TAKE CARE OF SALES, MARKETING, PROFIT. BUT THEY HAVE TO ALSO TAKE CARE
OF GROWTH. BUT THEY HAVE NOT BEEN FOCUSED ON GROWTH FOR THE LAST DECADE. THERE HAS TO BE A BALANCE. I'M NOT SAYING IT HAS TO BE ONE SIDE OR THE OTHER BUT NEW SALESFORCE WILL BE VERY PROFITABLE FROM THE OLD POINT OF VIEW, THE QUESTION IS IF WE CAN SEE A DECENT AMOUNT OF GROWTH WHEN THE ECONOMY TURNS. ED: IS MARK DANIELS STILL UNDER
PRESSURE? >> I THINK HE HAD HAS A COUPLE OF YEARS WITHOUT ANY PROBLEM NOW BECAUSE I IMAGINE HIS MARGIN TARGETS ARE WELL AHEAD SO I DO NOT THINK IT WILL BE AN ISSUE. ED: THANK YOU VERY MUCH. COMING UP, A CONVERSATION WITH GARY GENSLER ON CONCERNS OVER AI, CRYPTO CUSTODY, AND PLANS TO OVERHAUL THE EQUITY MARKET STRUCTURE. WE WILL DIG DEEP AND HIT HIM WITH SOME DIFFICULT QUESTIONS. TUNE IN. THIS IS BLOOMBERG. ♪ CAROLINE: THE SECURITY AND EXCHANGE COMMISSION HAS BEEN LOOKING AT POTENTIAL CONFLICTS OF INTEREST WITH ASSET MANAGERS USING AI. THIS AS THE SEC IS WEIGHING SOME OF THE BIGGEST CHANGES TO EQUITY MARKET STRUCTURE IN TWO DECADES AND CONTINUE TO CRACKDOWN FOLLOWING THE FALL OF FTX. JOINING US TO DISCUSS IS SEC
CHAIR, GARY GENSLER. WE ARE SO PLEASED TO HAVE YOU ON THE SHOW. LET'S START WITH SILVER GATE. SHARES UNDER DURESS AT THE MOMENT BECAUSE IT COULD NOT HAND IN A 10K FILING TO YOU IN TIME, NOTING IT WAS WORRIED ABOUT -- HAVE YOU WORRIED ABOUT THE SPILLOVER EFFECT? ARE YOU TALKING WITH COLLEAGUES AT OTHER INSTITUTIONS? >> LET ME STEP BACK FROM ANYONE COMPANY. FOR YOUR VIEWERS, WE PLAY A ROLE IN OVERSEEING THE MARKETS, RESTAURANTS, AND WE HAVE A SORT OF COP ON THE BEAT. SO I AM NOT GOING TO COMMENT ON ANY ONE COMPANY HERE.
BUT IN TERMS OF THE OVERALL QUESTION ABOUT CRYPTO TOKENS AND THE CRYPTO MARKETS, WHILE THEY ARE GIVE OR TAKE $1 TRILLION OF WORLDWIDE MARKET VALUE, IN THE U.S. THE VALUE IS OVER $100,000. IT IS IMPORTANT SO MUCH OF THE FIELD, THE CRYPTO FIELD, IS HIGHLY SPECULATIVE, IT IS NOT NECESSARILY COMPLIANCE CURRENTLY WITH THE APPROPRIATE LAWS OF OUR NATION TO PROTECT YOU, THE INVESTING PUBLIC, TO GET FAIR TRUTHFUL DISCLOSURES TO UNDERSTAND WHAT IS HAPPENING WITH THESE PLATFORMS. SO THAT
BEING THE CASE, TRADITIONAL FINANCE, MUCH OF IT, BEING COMPLIANT HAS SOME QUESTIONS AND IS ADVERSE IN DEALING WITH WHAT MAY WELL BE DEALING IN HIGHLY SPECULATIVE ASSETS THAT ARE NOT NECESSARILY COMPLIANT WITH THE LAWS. CAROLINE: LET'S TALK BROADLY ABOUT YOUR FOCUS AND ENFORCEMENT. I'M GOING TO BRING UP ONE BUILDER AND ECOSYSTEM. >> THE SEC IS PLAYING OFFENSE AND ATTACKING THE WHOLE INDUSTRY. IT'S NOT A HEALTHY WAY TO REGULATE. REGULATING THROUGH ENFORCEMENT RATHER THAN LIKE IN OTHER COUNTRIES WHERE THEY CODIFY AND DO THE FRAMEWORK THAT ALLOWS INDUSTRY TO GROW WHILE PROTECTING CONSUMERS.
I THINK THAT IS WHAT THE U.S. IS LACKING. CAROLINE: WHAT ABOUT SOME OF THE PLAYERS, PART OF PREVIOUS ADMINISTRATIONS, WHO ARE NOW WORRIED ABOUT THE HOLISTIC NATURE OF TRYING TO REGULATE AND THAT IT IS NOT RULES OF THE ROAD AT THE MOMENT? >> THERE IS NOTHING INCOMPATIBLE , CRYPTO'S AND OUR SECURITIES LAWS, SECURITY LAWS WERE BROUGHT ABOUT TO PROTECT THE INVESTING PUBLIC AGAINST FRAUD, SCHEMES, AND MANIPULATION AND IT WAS THROUGH THIS IDEA OF FULL, FAIR, TRUTHFUL DISCLOSURE, REGISTERING WITH THE SEC WHEN YOU ARE RAISING MONEY FROM THE PUBLIC AND THE PUBLIC IS ANTICIPATING A PROFIT. IT IS A PRETTY STRAIGHTFORWARD APPROACH OF HELPING THE PUBLIC WITH INVESTING SO THIS BROAD FIELD, WE HAVE ONE GOAL AT THE SEC. FOR THEM TO COME INTO COMPLIANCE. WHETHER IT IS THE TOKENS, BASICALLY PEOPLE RAISING MONEY OR OFFERING TOKENS, AND IT IS ALSO WHAT I CALL STOREFRONTS.
CRYPTO EXCHANGE'S, LENDING, STICKING AS A SERVICE TO COME INTO COMPLIANCE AND ENSURE THAT THEY DO NOT MISLEAD THE PUBLIC OR CO-MINGLE FUNDS AND TAKE PUBLIC'S FUNDS AND DO THINGS WE DO NOT ALLOW IN OUR FINANCIAL MARKETS. WE DO NOT ALLOW THE NEW YORK STOCK EXCHANGE TO ALSO PLAY WITH CUSTOMERS FUNDS AND MAKE MARKETS, RUN A HEDGE FUNDS, BE IN THE CLEARING BUSINESS. WE SEPARATE OUT THE CONFLICTS. ED: MR. GENSLER, THANK YOU FOR YOUR TIME. YOU SET OUT THE GOAL. WHAT ABOUT THE RESULTS OF YOUR ACTIONS? YOU HAVE ASKED A NUMBER OF NAMES IN THE CRYPTO INDUSTRY TO REGISTER THEIR PRODUCTS WITH THE SEC AND VERY FEW HAVE. IN PARTICULAR, THE BIGGER NAMES IN THE INDUSTRY. WHY ARE THEY NOT ACTING ON YOUR
REQUESTS? >> THE LAW IS THE LAW AND THEY NEED TO COME IN AND PROPERLY FOLLOW THE LAWS. AND WE WILL WORK WITH THEM TO DO THAT. BUT IN THE MEANTIME, WE WILL ALSO LOOK OUT FOR THE INVESTING PUBLIC. WE HAVE BEEN VERY CLEAR, FOR INSTANCE, ABOUT WHAT IS CALLED CRYPTO LENDING. AND WHAT THE REQUIREMENTS ARE ABOUT STAKING AS A SERVICE. WE HAVE ALSO BEEN RATHER CLEAR
ABOUT CUSTODY AND CUSTOMER FUNDS . WE WILL CONTINUE TO DO THIS. MOST -- WE MOST SUGGEST THAT THEY COME INTO COMPLIANCE. ED: ARTIFICIAL INTELLIGENCE SUBJECT MATTER IS CROSSING YOUR DECKS. -- DESK. CAROLINE AND I HAVE BEEN TALKING ABOUT THIS FOR A WEEK.
WHAT ARE YOUR CONCERNS ABOUT ARTIFICIAL INTELLIGENCE AND CONFLICTS OF INTEREST AND ASSET MANAGEMENT INDUSTRY, FOR EXAMPLE? >> I THINK THIS IS ONE OF THE MOST TRANSFORMATIVE TECHNOLOGIES OF OUR TIME. WHEN I WAS AT M.I.T. I TAUGHT AND DID RESEARCH ON ARTIFICIAL INTELLIGENCE AND IT IS CHANGING HOW WE DRIVE AND HOW FINANCE HAPPENS. OUR PARTICULAR FOCUSES OUR ROBO ADVISING. 51 MILLION ACCOUNTS IN AMERICA, BROKERAGE APPLICATIONS, MILLIONS OF AMERICANS, THAT THE APPLICATIONS ARE USING ARTIFICIAL INTELLIGENCE AND PREDICTIVE DATA ANALYTICS WHERE THEY MIGHT BE PUTTING THEIR REVENUES, THE PLATFORMS REVENUES, AHEAD OF THE CLIENTS INTEREST. AND HOW TO DEAL WITH THOSE CONFLICTS WHERE THEY ARE SCOOPING UP DATA ON OUR LIVES, POTENTIALLY FROM HOW WE DRIVE OUR CARS TO OUR FITBITS TO THE PROGRAMS WE WATCH, AND THEN MARKETING TO US DIFFERENTIALLY, RATHER THAN PUTTING US, THE CLIENTS, FIRST. WHICH IS I THINK REALLY WHAT FINANCE IS MEANT TO BE ABOUT. CAROLINE:
FINANCE IS ALSO HOPEFULLY ABOUT TRANSPARENCY AND LIFTING. AT THE MOMENT YOU ARE TRYING TO TRANSFORM REGULATION IN MANY WAYS, MAKING SURE WE HAVE AN OVER FALL -- OVERHAUL OF REGULATORY PROFILE. I'M INTERESTED IN SOME RESPONSES YOU ARE GETTING TO THE PROPOSAL YOU PUT OUT IN DECEMBER. THE NATIONAL ASSOCIATION OF BUSINESS PROFESSIONALS IS REPRESENTING WOMEN AND MINORITIES. I AM WORRIED -- I'M WONDERING ABOUT SOME WORRIES THEY HAVE WITH THE ABILITY OF MINORITIES TO PARTICIPATE IN EQUITY MARKETS.
>> WE PUT OUT FOR PROPOSALS IN DECEMBER ADDRESSING FOUR DIFFERENT PROBLEMS IN THE MARKET AND IT WAS REALLY TO MAKE THE MARKETS WORK BETTER FOR ALL AMERICANS. WORKING AMERICANS OF OUR GREAT DIVERSE NATION. MEN AND WOMEN ALIKE. PEOPLE OF ALL RACIAL AND ETHNIC BACKGROUNDS. IT IS REALLY ABOUT THEM. THEY ARE OUR CLIENTS. WHEN THEY SUBMIT AN ORDER, THE MARKETS WORK TOWARD BEST EXECUTION.
WE TRIED TO LEVEL THE PLAYING FIELD BECAUSE SO MUCH OF THE MARKET NOW, IF YOU ARE A WORKING FAMILY ON TRYING TO INVEST, YOU PUT AN ORDER IN, IT'S NOT GOING TO THE TRANSPARENT MARKET, BUT IT HAS BEEN ROUTED OFF TO WHOLESALERS IN WHAT IS CALLED THE DARK MARKET. AND TRYING TO LEVEL UP THAT COMPETITION. CAROLINE: HOPEFULLY THAT DOES GUARANTEE WE SEE CONTINUED INCLUSION. GARY GENSLER, GREAT TO HAVE SOME TIME WITH YOU. THANK YOU SO MUCH. ED:
FASCINATING CONVERSATION. A GREAT POINT, MORE NASCENT INDUSTRIES ARE NOT NECESSARILY THE LAWS OF THE NATION. WE PUT TO HIM WHY ARE MANY PLAYERS NOT FOLLOWING AND I AM NOT SURE WE GOT A FULL ANSWER. COMING UP, HOW THE RISE OF AI IS IMPACTING EVERY AGENT -- EVERY INDUSTRY, IT INCLUDING GAMING. THIS IS BLOOMBERG. >> AS WE SOLVE REAL-WORLD AI, I DON'T THINK THERE IS ANYONE CLOSE TO TESLA SOLVING REAL-WORLD AI. ED: GENERATIONS OF AI FEVER HAVE TAKEN STORM.
IN MANY INDUSTRIES, INCLUDING GAMING. SONY RELEASED THEIR OWN SOPHIE GAME THAT FEATURES AN IMPROVED AI RAISING AGENT. THE CHIEF OPERATION OFFICER JOINS US. I'VE BEEN PLAYING VIDEO GAMES MY WHOLE LIFE. I LOVE THE IDEA THAT THE BOT YOU ARE PLAYING AGAINST IS INCREDIBLY HARD OR INCREDIBLY EASY, DEPENDING ON HOW GOOD A GAMER YOU ARE. >> IT IS A RACING AGENT THAT WAS TRAINED TO BE COMPETITIVE WITH REAL RACERS. WE DID THAT LAST YEAR AND THIS
MONTH WE RELEASED IT INTO THE GAME IN VARYING LEVELS OF DIFFICULTY. YOU CAN DRIVE AND IT WILL REBALANCE THE PERFORMANCE OF THE CAR. YOU CAN ALSO RACE AGAINST A FULLY BLOWN SUPERHUMAN RACING AGENT THAT WE RELEASED LAST YEAR AND WE HOPE THIS WILL INSPIRE PEOPLE TO LEARN FROM THE AGENT. IT'S AN IMPORTANT STEP FROM THE GAME BECAUSE IF YOU ARE AN EXPERT, IT WILL TAKE SOME TIME FOR YOU. YOU NEED FRIENDS AT THE SAME LEVEL TO COMPETE AGAINST AND THAT IS WHAT THE AGENT ADDRESSES. ED:
A FEW WEEKS AGO WE HAD A GUEST WHO HAS A THESIS THAT BY 2030 GENERATIVE AI TOOLS WILL BE SO GOOD THEY WILL JUST BE USED TO DREAM UP VIDEO GAMES. I WONDER WHAT THE PICTURE WORKED IS SONY DOING TO THAT EFFECT IN THE VIDEOGAME SPACE. >> GAMING HAS ALWAYS BEEN TECH DRIVEN. SO WE LOOK AT NEW TECHNOLOGY. THERE'S BEEN A LOT OF CHAT AROUND MID JOURNEY AND OTHER MODELS. FOR US IT IS IMPORTANT THAT THE TECHNOLOGY IS THERE FOR THE CREATOR. WE ARE INTERESTED IN WHAT IT
DOES TO GAMING CREATORS AND HOW IT HELPS THEM FULFILL THEIR CREATIVE VISIONS. THERE ARE A LOT OF THINGS THAT STILL NEED TO HAPPEN IN TECHNOLOGY FOR THIS TO BE REALLY USEFUL FOR GAMING BUT PEOPLE ARE ALREADY STARTING TO USE IT AND THAT IS REALLY IMPORTANT FOR US BECAUSE FOR US, WE ARE A CREATOR CENTRIC COMPANY AND IT IS REALLY ABOUT WHAT CREATORS ARE DOING WITH THE TECHNOLOGY. CAROLINE: WHAT MORE NEEDS TO BE DONE TO THE TECHNOLOGY TO MAKE IT REALLY USEFUL FOR SONY? >> WHAT WE SEE TODAY IS A LOT AROUND 2D IMAGE BUT GAMES ARE 3D. THAT IS SOMETHING THAT WOULD NEED TO BE ADDRESSED FOR THIS TO BE REALLY IMPACTFUL IN THE GAMING PIPELINE. BUT I THINK THE TECHNOLOGY DEVELOPED EXTREMELY PACKED -- EXTREMELY FAST. THE CYCLES FROM A LEVEL TECHNOLOGY BREAKTHROUGHS TO BRINGING IT TO USERS AROUND THE WORLD IS VERY FAST. ONE THING I WOULD SAY IS WHAT IS IMPORTANT TO US IS THE
ETHICAL ASPECTS. WE WANT TO MAKE SURE THAT TECH IS DEVELOPED IN A RESPONSIBLE WAY FROM THE DATA THAT GOES INTO IT TO BE FAIR AND TRANSPARENT. CREATORS OF RIGHTS THAT NEED TO BE RESPECTED.
AI ETHICS IS AT THE CORE AT SONY. WE HAVE A DEDICATED TEAM THAT LOOKS AT ALL OF THE PROJECTS FROM A -- AND ETHICS PERSPECTIVE. CAROLINE: DO YOU NEED TO BE HAND-IN-HAND WITH GOVERNMENTS AROUND THAT? THE SEC CHAIR WANTS TO SEE SOME RULES OF THE ROAD IN PLACE. DO YOU NEED GOVERNMENTS ON SITE TO BUILD THIS ETHICAL ROADMAP? >> I THINK IT IS IMPORTANT FOR GOVERNMENT TO PAYROLL BUT IT IS ALSO BEYOND GOVERNMENT. SONY HAS A RESPONSIBILITY FOR OUR CREATORS. THEY ARE PART OF THE COMPANY.
WE WORK WITH THEM DAILY. IT'S NOT JUST ABOUT GOVERNMENT REGULATION. IT IS ABOUT MAKING TECHNOLOGY FOR THE CREATORS SO THEY CAN UNLEASH THEIR IMAGINATION.
BUT OF COURSE GOVERNMENTS PLAY A ROLE IN THIS. BUT IT IS ALSO COMPANIES THAT HAVE TO STEP UP. ED: CAROLINE AND I ARE HAVING A LOT OF PEOPLE FROM THE WORLD OF AI ON LATELY. HOW CAN WE KNOW HOW CONFIDENT SONY AI IS AT THE CRAFT? WHAT MAKES YOU STAND OUT FROM THE OTHER AI PLAYERS? >> WE HAVE EXTREMELY HIGH IMPACT PROJECTS AND AIM FOR TECH CONTRIBUTIONS THAT ARE RECOGNIZED.
IT IS AN IMPORTANT PART, TO RAISE AWARENESS ABOUT TECHNOLOGY AND SHOW WE ARE ABLE TO DO IT. ALSO FOR SONY IT IS IMPORTANT WE FOCUS ON PEOPLE AND HOW THEY USE TECHNOLOGY GOING FORWARD TO FULFILL CREATIVE VISION. I THINK THAT SETS US APART AND OUR VOICE SHOULD BE HEARD IN THIS SPACE. CAROLINE: THANK YOU FOR SUCH A GLOBAL CONVERSATION COMING TO US FROM TOKYO.
REALLY FASCINATING APPLICATIONS WITHIN GAMING. NOW LET'S TALK ABOUT ARTIFICIAL INTELLIGENCE AND MORE. I SPOKE WITH MACY'S CEO TODAY ABOUT HOW HE SEES AI IMPACTING HIS BUSINESS AND THE COMPANY IS EXPANDING DIGITAL FOOTPRINT IN THE MACY'S MARKETPLACE. >> IN THE FOURTH QUARTER WE LAUNCHED A MACY’'S MARKETPLACE.
WE HAVE ADDED 20 NEW CATEGORIES AND 500 NEW BRANDS AS A RESULT OF MARKETPLACE. IT GIVES CUSTOMERS A LOT MORE CHOICES. DURING THE FOURTH QUARTER, TWO OF THE HOTTEST CATEGORIES IN MARKETPLACE THAT WE DID NOT HAVE BEFORE WAS VIDEO GAMES AND ELECTRONICS.
THAT IS WHERE CUSTOMERS, THEY TRUST MACY'S AS A BRAND AND THEY ARE READY TO WORK WITH US -- TRANSACT WITH US IF WE HAVE THE RIGHT BRENT. A CUSTOMER DOES NOT KNOW IF IT IS MARKETPLACE OR OTHER INVENTORY, BUT THEY KNOW WHEN THEY COME TO MACY'S THEY CAN GET A BROAD RANGE OF CATEGORIES AT GREAT VALUE. THAT IS WHAT WE ARE ENCOURAGED BY. SO WE WILL BE ADDING 2000 NEW BRANDS THIS YEAR ON THE MACY'S SIDE AND ADDING A BLOOMINGDALE'S MARKETPLACE AND THE SECOND HALF OF 2023. IT GIVES US FLEXIBILITY BECAUSE WE ARE A DEPARTMENT STORE WITH MANY CATEGORIES AND ABOUT TO HAVE A LOT MORE. CAROLINE: AND YOU UNDERSTOOD THE BALANCE. I WILL ASK YOU FOR A CURVEBALL.
ARTIFICIAL INTELLIGENCE. IT SEEMS TO BE SOMETHING YOUR COMPETITORS ARE TALKING UP. IT IS IT SOMETHING -- IS IT SOMETHING YOU EMBRACE FOR MACY'S? >> ABSOLUTELY. WHEN YOU LOOK AT THE TECHNOLOGY WE HAVE AND HAVE INVESTED IN AND THE SCIENCE WE HAVE THAT WE ARE PUTTING AGAINST THE ART OF THE BUSINESS, THE COMBINATION MAKES A GREAT RETAILER. ART AND SCIENCE ARE SO
IMPORTANT . YOU CANNOT ALWAYS SEE THE TRENDS IN AN ALGORITHM BUT YOU CAN AGGREGATE THE SIGNALS IN REAL TIME ABOUT WHAT IS GOING ON IN THE BALANCE OF THE INDUSTRY. HOW PEOPLE ARE RESPONDING TO NEW TRENDS. WHAT WE SEE FOR OUR CUSTOMERS IN BLOOMINGDALE'S, THEY ARE UPFRONT WITH TRENDS AND WHEN THEY MOVE OFF OF A TREND, YOU CAN SEE WHERE IT MIGHT COOL ON THE MACY'S SIDE. SO WE ARE USING ALL OF THE DATA -- DATA WE HAVE. WHEN YOU LOOK AT DYNAMIC PRICING , TO BE ABLE TO LOOK AT THE INTERNET ABOUT THE PRICES IN COMMODITIES AND MAKE REAL-TIME ADJUSTMENTS ONLINE AND IN SOME RESPECTS, IN THE STORES. SO IT ALLOWS US TO BETTER
RESPOND TO A CUSTOMER WHO HAS SO MANY CHOICES AND WHO WAS LOOKING FOR THE BEST COMBINATION OF PRODUCTS, VALUE, AND EXPERIENCE AND WE HAVE A HUGE OPPORTUNITY TO GET IT RIGHT. TO DO IT IN REAL TIME IS AN IMPORTANT HOME -- AN IMPORTANT COMPONENT OF WHO WILL WIN IN RETAIL. ED: COMING UP, ELON MUSK. HIS CARBON FOOTPRINT APPEARS TO
BE MASSIVE. WE WILL LOOK AT HIS PRIVATE JET ED: ELON MUSK WHILE HITTING CLIMATE FRIENDLY COMPANIES MADE A TON OF TRIPS ON HIS PRIVATE JET, SOME FLIGHTS AS SHORT AS 13 MINUTES. HE TOOK MORE THAN 170 FLIGHTS. THAT AMOUNTS TO A DOZEN TRIPS AROUND THE EARTH.
55 THOUSAND MILES. LOOK AT HOW HE RANKS AGAINST THE TECH GREATS. CAROLINE: WHAT IS AMAZING IS THE SHORT DISTANCES. AT ONE POINT HE WENT FROM -- HE FLEW SIX MILES. ED:
THAT IS IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY.
2023-03-07 03:50
