YouTube Battles With Blurry Lines of Extremist Speech

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Well, when we talk about content moderation, we often think about companies like Facebook and Facebook's Instagram app, and Twitter increasingly. I guess you could say TikTok falls into that conversation as well. But what about YouTube, the video juggernaut that Google bought for a paltry one point six five billion dollars back in two

thousand six. Well, a new book details YouTube's ongoing struggles with the blurry lines of extremist speech. That book written by Mark Berg in our colleague here at Bloomberg News. He's technology reporter for or Bloomberg News. He joins us on the phone from San Francisco. His story is featured in the upcoming issue of Business Week magazine. It's an excerpt from that book. You can read it now though on the Bloomberg terminal and of course online at Bloomberg

dot com slash business Week. The book coming out, by the way on September six. Also joining us this afternoon, Joel Webber, the editor of Bloomberg Business Week. He joins us from the Bloomberg Interactive Broker studio. Joel, when you think about excerpting a book the way you did with with Mark's book, how do you choose which part and

to focus to focus on to actually excerpt in the magazine. Well, we read every single page months in advance of the book, and then we basically grilled him on, you know, the

best thing that we could possibly extract. So pretty collaborative. Uh. And in this case, I think Mark was the one who initially highlighted this and this this particular um excerpt, and we we agree with them because boy, there's like the central tension that I think this article, which again let's hear it up for Mark's forthcoming book, like comment subscribe inside YouTube's chaotic rise to world domination. Um. You

know you tak YouTube is this massive juggernaut. Um. They were successful in fighting off terrorism not so long ago, but as Mark points out in this excerpt, white nationalism has proven to be a different kind of struggle. And you know, Mark, I'm just gonna turn it over to you. Why why could they attack or combat the terrorism that was well, you know, on the platform, Uh, versus what we're seeing now with white nationalism? Why can why can they do one thing but not necessarily the other? Yeah,

I mean, you know, thanks for having me. I think that this is I thought it was a great story because it's it does get at this like very fascinating dilemma. But it's not just um YouTube, it's always it, I think more than any need a company, just given its size. But it's something that it's affected all all major Internet platforms. UM. And partly I think there's there's a couple different reasons.

One is just the nature of the way the government's work that there there's been a lot more in Western government's pressure and willingness to sort of tackle Island Islamness extremism. Uh. And we saw like there are sort of tech collaborations that in mind. There are repositories, there are sorry, there are lists of like known terrorists that that YouTube uses, and they can ban these certain figures. Um, there's YouTube is a is a gigantic digital advertising is very responsive

to its advertisers. The part of the book's opening scene is is this is June and when they're in middle of this major boycott UM over videos some of which were like isis allies that you know, household brands were sponsoring, and these advertisers put pressure on YouTube and kind of force them to act in a way that they hadn't before. UM. And then once they were able to come clean up the system to make it a metabal the the these ads when like weren't sponsoring videos that UH marketers wanted,

there was less pressure for them. UM. So I think there's a combination where it was very easy politically addressing white nationalism is a more complicated, especially in the US contemporary politics UM problem in the thread, and there was less pressure from regulators and and advertisers at the time. Hey, Mark, how do people and machines do this? There's a passage from your book, and indeed from this excerpt in the magazine. UM that includes the phrase use your judgment when talking

content moderation. I mean that's not a necessarily prescript rule, right, yeah, I thought that was. So this was YouTube was really uh it's hard for us to appreciate, but this was in This was in two dozen six starting towards and five does and sixes. And I think when that this as they ran like, um, some of their first sort of policy frameworks. And this was really before content moderation

existed at the size and the internet. Uh and and YouTube had a problem that that you know, Facebook and other sort of text based didn't have, which is they have video, and they have moving images, and they have like complications and and all that brings and so I you know, this was a team that was pretty scrappy and sort of inventing this on the fly. UM. Like a lot of them were pretty well versed in the

like weird dark recesses of the internet. UM. And so use your judgment, uh was there were at the time a lot more of a like human sort of you can call it editorial um, perspective and judgment about where the lines withdrawal. And this was they sort of viewed YouTube as this was a community of users and video broadcasters and they sort of wanted videos that within the

boundaries of that community. You know, fast forward a few years that they become this global platform and moderation is this very complicated process, and that goes down from like decisions and a rule book through you know, teams at YouTube and across the globe to these they largely sort of outsource to contract employees that will screen footage um and you know in the Philippines and India, in Dublin,

in California. Uh. And so it's a complicated process where the company increasingly wants to rely on machine learning systems as much as possible, in part because machine learning systems can just process so much video better faster than humans. Uh. And they're sort of less, They're they're impartial, and they're less. You know that Google cannot be accused of by us more as if they can point and say, like, listen, we have a we have a policy, rule book, and

we have machine systems. We don't have humans with with biases making new sysion decisions. You know that bias uh. Part there is a huge element of where this extra kind of uh culminates, right because there you know, one of one of the things that YouTube Offton says is that dealing with the threat of like Islamist extremism on the platform proved easier because you know, multiple governments agree on those standards, right, whereas with white nationalism there there

isn't that same unanimity. So I'm I'm wondering where does that Where does that leave things? Because it means that there's more reliance on AI and the code. You know, ultimately the code is what what runs everything here? Uh where does that really leave things? As as you know, society continues to have these massive flare ups and with about thirty seconds, Mark, Yeah, I think, I mean, I think that they've made some significant changes and partially because

of some tragedies that they witnessed. Christi shooting. We talked about the story even the most recently Buffalo shooting. Like every time there is an incident like this, um that is like often sometimes these events are like live stifmen live stream on on YouTube. So they have taken action because of like pressure from their employee base and from politicians and from some of these big moments. Well, it's a great read, Mark, It's an important excerpt, and congratulations

on the book. The book is called Like Comments, Subscribe Inside YouTube's Chaotic Rise to World Domination. It comes out September six, but read this excerpt now. It's featured in the upcoming issue of Bloomberg Business Week magazine. You can also read it now on the Bloomberg terminal and at Bloomberg dot com Slash business Week. Mark Bergen, technology reporter for Bloomberg News, along with Joe Weber, the editor of

Bloomberg Business Week. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Twitter shares are lower by more than one point nine percent today, this after Elon Musk is asking a Delaware judge to let him amend his counterclaims against Twitter, after saying earlier that new whistleblower revelations add to his argument to walk away from his forty four billion dollar purchase

of the company. Katie, I don't know about you, but my head's kind of spinning thinking of about the ongoing saga between Elon Musk and Twitter. We have months of content here. Well, I know somebody who's very busy is out in the West Coast. We're talking about Kurt Wagner. He's technology reporter for Bloomberg News. He joins us this

afternoon on the phone from San Francisco. Kurt, I don't know how you're thinking about this in terms of content, but certainly good I think for job security because Elon Musk has got you his he's keeping you busy. Um, what do we need to know? What does our audience need to know? In the latest between Elon Musk and Twitter? Um, there were kind of two things that happened today and they were both versions of things that have already happened,

but with new information. The first is that Elon Musk asked the judge if he could revise his counterclaims against Twitter. So when Twitter sued him, Musk basically sued them back. And now he's saying, I want to update and revise that lawsuit now that I have more information from this whistleblower that I didn't have a month ago, right when I when I sent my original counterclaims. So he's asking

the judge for permission to do that. Secondly, he sent a letter to Twitter confirming that he's trying to walk away from the deal again. He did that already to He did that on July eighth. But this new letter he sent, which is again saying I'm walking away from this deal, now includes more information from the whistleblower, which again he didn't have on July eight. So essentially he's trying to bring all the whistle blower information and incorporate

it into his defense. Um, and he's bringing the whistle blower kind of front and center in this whole thing. And how good is this for Elon Musk? Because actually, Kurt you and I were talking about this on Bloomberg Technology yesterday. A few people have made the argument that this really bolsters Musk's claims when it comes to those

bots and those spam accounts. But does that hold water? See, I'm less convinced that it actually helps him on the bot and spam argument, but I am you know, I think I do think that there might be another argument here, which is that he's essentially saying, this is a company that's you know, hasn't been regular Corry has been compliant with regulatory demands, right, they have a constent degree with the FTC around privacy related stuff, and the whistle blowers

saying the company is not following that and they're not adhering to that. And so where I think the whistle blower's argument doesn't really hold when it comes to the box stuff. You know, if he is telling the truth, and if and if it's proved out that the claims he's making are legit, well then the company could be in other types of financial issues, right, that could be facing fines, that could be facing regulation. And that's the kind of thing that you know, Ellen might say, Hey,

I'm you know now buying a company. I didn't realize there was all this red tape around it. Um, you know, this is this is new information that I didn't know, and therefore it should let me get out of this deal. Well, Curtis, I mean, we can't see the future, but we're gonna ask you to look into your crystal ball and you know, look a few weeks down the line into what the Delawe Delaware Chance to Record is thinking. I mean, I mean,

how does this end? I'm mean Twitter continues to um use quite strong language about their intention, right, which is that they have every intention to enforce the original murder agreement. And to me, I don't think you use that language unless you really do feel that you have a good case here, and so I think from the Twitter side, you know, they want to take this to trial. They want to they think they have a winning hand, and

they want to go and prove that out. Um, I do think there's a realistic chance that these sides settle.

I don't have reporting to back that up. I don't even know if those types of conversations are happening, But I just think about the unknowns of going into a trial, right, you're really saying, you're you're putting all of this at the decision of one person, And I kind of feel like, if you're Twitter or Elon, there's just a lot of incentive to kind of hammer out in agreement before you get there, so that you're not necessarily going for either

a forty four billion dollar deal or a zero dollar deal. You could, you know, maybe make peace somewhere in the middle. And that does seem like a reasonable thing that still could happen. It still could happen, But I mean, what kind of odds would you place on that. I know it's a bit impossible and you don't want to speculate too much, but and by the way, Twitter's market cap

is about thirty billion dollars right now, sorry to jump in, Katie. Yeah, and that's probably inflated some right because people are still you know, holding the stock thinking that this deal in my clothes presumably, so you know, if the full deal walked away, maybe Twitter would be worth uh twenty billion. I don't know, you know, again, I'm kind of I'm kind of guessing here. Um, I'm a little hesitant to to put a number on what the settlement might be

because again I'm just totally totally guessing. But it does feel like something that could happen. I don't know, let's let's put it at a chance. Again, who knows, But it doesn't feel like it's off the table. I guess, k. Just in the last thirty seconds that have with you,

what do we need to be watching for? As the drama continues to unfold ahead of the Chancer record hearing, sure, I mean, the next um kind of milesome that we are aware of is a shareholder vote from Twitter shareholders, and that's going to happen on September I believe, the thirteenth.

And that's essentially you know, Twitter putting forward the initial original deal agreement and saying, hey, shareholders should we do this, it's expected that it will be approved, and if it is, then Twitter can kind of say, hey, we've done everything in our power to get this deal done, and that kind of paved the way for the trial. In October, Kurt Wagner, technology reporter for Bloomberg News, keeping us up to date on the latest from San Francisco in the

Twitter elon musk Saga. You can follow Kurt at Kurt Wagner eight on Twitter. This is Bloomberg, This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. Well as energy costs sore around the world, something curious is happening with increasing free quincy in power grids in certain corners of the US, prices are plunging to zero and below. We're talking about bottlenecks that are preventing cheap wind and solar energy from reaching

high demand areas. Norien Malick writes all about it. She's natural gas and power markets reporter for a Bloomberg News. She joins us this afternoon on the phone from Brooklyn. Noreen. I was talking with Katie about this. It's a little hard to wrap our heads around at a time when energy prices are so high, how power prices can actually be plunging below zero? How does this work? It was

a surprise for me too to see how frequent it is. Okay, that makes me feel better because your natural gas and power markets reporter Sole Fee a little bit better about my confusion here. Um, So, you know, negative prices have been around for a while. You know, when California first started, it's big renewable build out, like about a decade ago.

In Texas, you know, you would you would have like solar and wind come on faster than you can build transmission lines, like in West Texas or like sub Droll part of California. So in those areas, when you'd have like a really you know, bright and sunny day or a windy day, you'd see like those like wind turbines like turning at mac speed and like solar panels producing at max quantity more than the transmission lines can take away.

So you'd have an excess of supply. So anytime you have stranded power that can't get where it needs to or can't get out of it's like little community. It sends prices to negative levels and it's meant to be a signal like from the grid to these you know power suppliers, Hey, back off, we have too much supply. And you know, renewables can keep running at like minus thirty or minus forty five dollars because they get these

tax credits and so. But what's remarkable now is that you are seeing such a gloot of supply and these gluts can last five minutes or sometimes they can last hours. Um, but these gluts can send prices to minus five dollars, my a thousand dollars or you know, sixteen thous dollars, as there was a case in California, um for a moment earlier this year. So is anyone trading this? I mean I hear this and coming from you know, the traditional stock and bond market, sounds like a great sort

of arbitrage trade. But does the power market not work that way? No, it does exactly. You hit it on the nail. It's just that, um, the nail on the head. But like just that the group of people that know the nuances of the power market, like you know, across the US, there's more than like basically ramped in and off the grid. These are like places where like wind farms are supplying the grid or gas plants, and people

are taking it off. So you kind of have to like know like how to play those like local markets. You have to like look at things like weather and everything. But but you're exactly right, like people have noticed this trend and you are seeing um like mattery like developers trying to find those spots where prices are really negative and they would get paid when prices are negative, they would get paid to fill their storage and then they could resell that power in the middle of the day

for like hundreds or thousands of dollars. So that's the ultimate ARB right now, and that is super beneficial to the grid. Like that could help, you know, make sure that we can have a way to store all this excess solar and wind and get it to consumers typically when prices are high, so that in the long run

will help them. So should we be thinking about the grid in a different way based on this, because I mean, look, we look at what happened in Texas last year and then even this summer when the state asked bitcoin miners to stop mining bitcoin because they were concerned about this heat wave and the grid being able to withstand that, what does the story tell us about the resilience of the grid and updates needed to the grid across the US.

I mean, this is definitely a sign of dress that the grid is um needs to be upgraded or changed because for basically a hundred plus years, the grid has been set up to take power from these large power plants like whole nuclear gas and just ship them one way to consumers. But with with renewables, you have thousands and thousands of more sites, so there's more like like the generation is dispersed, it's spread out over bigger geographic regions.

And on top of that, you're having like homeowners and businesses becoming like suppliers themselves, like they're producing their own power by putting rooftop solar and battery, and you're gonna have e v s and so every so you're gonna have power moving from homes onto grids. So everything is becoming more dynamic. And when you have these negative prices, it shows you the real like limitation of like power

getting stranded. And and you know, this is the big debate right now is how do you solve those negative p races? Do we spend billions and billions of dollars on you transmission or like local microgrids. Right. Hey, this is a great story and it also speaks to what we're speaking about in just about an hour's time, when Catherine Blunt, the Wall Street Journal reporter, has her new book out today, California Burning, The Fall of p G and E and what it means for America's power grids.

So have this power theme this afternoon. A big thank you to Noreen Malick, natural gas and power markets reporter for Bloomberg News. She joins us on the phone this afternoon from Brooklyn. Follow her on Twitter at Notorious Journal. Yeah, but you let me drive? Oh no, no, no, no, W's all right? Please revels I don't want to drive. It's a good question. Drive this Drive to the Cloth on Blutberg Radio. Well, we are already there. We got less than ten minutes to go until the close of

trading on this Tuesday, August. Let's drive to the clothes with Amanda Gotti, chief investment officer at p n C Asset Management Group. Amanda joins us once again on the phone from Philadelphia. Amanda, good to have you back with us. How are you. I'm doing great? Thanks so much. For having me. I'm delighted to be here. Well, it's great to have you with us this afternoon. Help us make sense of what's going on here, because Katie and I've been talking about it for the past few days. We

talked about it ahead of Jackson Hole. But it certainly seems like equity markets and bon bond market as well got kind of the wrong idea of what FED your Powell was going to do after that latest FED meeting. Yeah, it's it's been sort of a progression in terms of markets like you here in the last few weeks and leading up to and following the jackson Hole meeting. I have joked on a couple of calls with clients recently that we went from a nothing burger to some burger

too seriously, an impossible burger. There's definitely a pun or a metaphor in there, and I thought a bison burger, well, not quite that would even that would that would make

sense too, I think. But I think it speaks to the challenge the chair Powell finds themselves in as it relates to messaging and forward guidance and how to keep all of the market constituents and participants happy and content, it's really an impossible task at the moment, and so market definitely took away a much more hawkish tone from Powell on Friday, and I think these last couple of days, certainly the hangover effect from that is really taking control

of the narrative. Here. She said it, Katie, she said hangover. She said hangover, that tired feeling was it was a hangover Amanda. I do have a question, though, how do you invest around that now that markets maybe getting on the same page as what we've heard from Powell, what we've heard from other FED governors, does that mean it's

time to fade this move? Well, we definitely felt like even pre Jackson Hole, that this rally from the mid June bottom was kind of exhausting itself, that it was a bit far and a bit too fast, given you know, one maybe two data points coming out of July c p I and p p I that suggested that inflation maybe was taking a pause or at least starting to peak.

And so you know, market ran with that one or two data points and saying, all right, we're gonna claim victory here that the FED is effectively done or basically the past that we're on is the path that it's going to be, and so I think you're seeing the market kind of give back some of that, especially given Powell's contents around We're gonna have to be forceful and there's gonna have to be some pain. Markets hate that in the short run, we're not making meaningful changes to

portfolio allocations. We bent down the hatches a couple of times in the first quarter and then early in the second quarter to try to position for what just continues to be a really high volatility regime. But we're not making any notable changes as a function of what's going on these last few days, because I actually think that we're going to start to see more confirmation and evidence

of inflation rolling over. And while the Fed you know, only has a few data points to go on here so far, I think the market has already adjusted on the equity side in terms of evaluations, but also on the bond market side in terms of you know, futures,

probability of rate hikes and where interest rates have moved to. Like, the markets really already there, and so to the extent that the Fed stays the course here, I think that the market can you know, live with it in air quotes relative to you know, some of the fears that are looming larger out there. I think the market is

already priced for the past. That's the head To the extent that the dot plot changes meaningfully in the terminal rate moves meaningfully higher from where we are to to day, that's going to be a challenge for markets, for sure. But we already have a number of rate hikes baked in, and so it's not so much about what happens in September per se. It's really that final destination that matters for markets. Well, speaking of markets, a headline here that I want to get to. Goldman Sachs will lift all

COVID protocols that have kept some workers away. This, according to The New York Post. Memo sent today obtained by the Post, says that the company will no longer require COVID testing or masks or vaccines as well, Katie, A real sign of the times. We're definitely going to I have COVID right now. It's not over. Yeah, you're a little late to the game, but it did find you.

But in any case, let's go back to the markets, Amanda, because I'm curious about the cross asset signals and this concept of fighting the FED socks maybe getting on the same page as some of the FED officials. But we've been talking a bit about the credit markets. If you look at investment grade and high yield spreads, they're pretty contained, well below their peaks from earlier in the summer. And I love the chart of the spreads because it almost

feels like an ink blot test. Whether that is bearish or bullish for equities, whether you know, we could see spreads crack and start to rise from here, or maybe the fact that they are contained is that bullish for equities that maybe it's not so bad. I'll take the optimistic side of that trade and say that because we haven't seen spreads, you know, blowout in a really concerning way.

I mean, sure they are up on a year over your basis relative to the all time you know, easy or said, they're a little bit differently tight, uh spread levels. We don't see anything that's like meaningfully concerning in terms of spreads right now. And I think that's reflective of even though everybody's really concerned about, you know, what comes next in terms of this economic cycle, we're not in and of itself in a recession, We're in a slowing

expansion phase of growth. There's a lot of policy levers being pulled around that that's adjusting the trajectory of growth. But the canary in the coal mine is usually stress in in spreads and so we're not seeing that. So I think that just reinforces that we're still in a slowing growth path, not you know, on the edge of recession. And Amanda, before we let you go, just in the last thirty seconds that we have with you, the lows of June um, are we going to retest those lows

in the declines that we're seeing right now. I don't think that we'll retest the lows. No. I think we had such depressed sentiment back in mid June, and we've actually seen some positive reading since then. You have Michigan Survey sentiment went off, we had confidence conference board today that went off. We had inflation expectations coming down. So I think from a sentiment perspective, that's going to keep

us from retesting lows alright. Amanda Gotti, chief investment officer at p n Csset Management Group, joining us once again this afternoon from Philadelphia. You can follow her on Twitter at Amanda Agatti, p n C. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News