From the heart where Innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
And Caroline Hyde of Bloomberg's world headquarters in New York. Ed Ludlow, he's off. This is Bluemeg Technology. Coming up.
We'll bring you all the details from Apple's let Loose product launch as a company brings us.
The new AI ready iPads, and we'll hear from the CFO of Disney's shares full hard.
After a cautious outlook for streaming subscribers plus Uber and Instacart, they team up to take on door Dash. Our interview with both of the company's CEOs later this hour.
First, let's check in on these a marngres.
We turned to the green even on the NASDAC after really some strong days that we've had for the last three days.
I mean remember on money we had the best three.
Day run for stocks more broadly that we'd had well since November. I'm going to bring you back to the benchmarks for a moment. I'll get onto these individual players in a moment where we are seeing the NASDAC on the higher side, we've seen bomb markets actually rally as well ahead of that three year auction.
We're also seeing, of course, the world of crypto.
Just keeping an eye on what's happening with the world of bitcoin at the moment, because we have of course seen well in up about one and a quarter of a percent, a little bit of risk appetite there in the crypto land. Now, let's take it onto some of the individual movers that we've had on the day.
Because this has been thick and fast.
Earnings still coming of course after the bell yesterday and also this morning Disney, as we're going to be getting to this company in a moment down more than nine percent. Look, some of the numbers were pretty strong. We're seeing still a focus on bringing about profitability at this business by Bob Byger. However, subscriber numbers looking to be a more cautious outlook and forecast coming from the CFO.
The market falls hard on that.
Palenteer came after the bell yesterday, and look, we're once again seeing some rapid growth, but not as fast as people want to see, particularly with the US commercialization growth that we're seeing for Palenteer. It came after the bell yesterday, and look, we had seen seventy percent in previous quarters were down to just oh but a forty percent increase in the overall sales growth, So a little bit of caution and taking off of the market thereafter the valuation
and run up. I'm looking at Apple though, up four tens percent, the juggernaut unrailing some new products, this one all about the iPad, an AI focused iPad pro and a larger iPad Air. Want to break down the latest of what was just occurring in the last hour or so.
Rumberg's Dana Wellman were we impressed by the lineup. We've been waiting a long time, you know.
It's interesting, as you say, this is the first iPad news we received from the company in almost two years, perhaps a year and a half, and the announcement felt incomplete to me. This announcement was as I think we expected, all about the hardware. The iPads are thinner than before, they're lighter, they're faster as you'd expect, and Apple did
make a hint at the device's AI capabilities. There's so much that is still unanswered, clearly about the software experience, and as I imagine everyone is thinking, the AI capabilities, the company isn't expected to get into any of that until it's annual Software Developer conference, which usually takes place in early June. So right now we've got some promising notes. We know a lot about the hardware. We're still wondering in a sense, what can it do fully with the
software and who is it for? And I only say that because the devices are so increasingly laptop like. Yes, but Apple also sells laptops, which we're not mentioned today.
Yeah, So I.
Mean, for me as a commuter, an iPad makes an awful lot of sense. But if you're a designer, if you're someone who's wanting the power of a Mac, you ever going to be getting this and an iPad?
Or who do you think the overall consumer is?
From real perspective, I think these are perhaps laptop replacements or secondary laptops, if you will. It's interesting to me the higher end iPads here are the first iPads that have o LED screens, and this is just in shorthand a much more advanced screen technology than even the MAX have right now. Some competing PC makers do have laptops that have old screens, but not Max. So if you're
looking for a laptop like experience with a really superior display. Actually, the iPads might be a better choice than some max.
People are liking the stylist, liking the ability with which you can interact with it as well. Overall, though we've been waiting and waiting, do you think ultimately the fact that we've been sort of a drought of new iPads will just galvanize demand going into this product?
Apple would certainly certainly hope. So the most recent quarter was particularly disappointing for Apple in terms of iPad sales, And it would make sense when you remember that the hardware really was so stale, And consumers aren't stupid, They do know, they understand something about the rhythm of iPad
and Apple update cycles in general. And I wouldn't be too keen on buying something that hadn't been updated in over a year, knowing that Apple is likely to have an update around the corner just about any time.
And then we have the handwringing issue of Apple being behind the curve, so to speak, when it comes to artificial intelligence. Many would say, look, just it always comes in a little bit slower, but then comes with strength. Are you feeling from an investor perspective, but from a user perspective that AI on an iPad or AI on device is really going to be a winning formula for Apple.
Yes, I expect Apple to have some interesting news. I don't know what it's going to be, but I do believe Apple is going to be talking quite a bit about AI and it's coming conference. I also think, to some extent, this is a little bit about marketing and the language that Apple has chosen to use. I remember there was a different competing software conference, it may have been Google about a year ago, and they would not stop saying AI. You can choose to say AI over
and over again. Does that make it true that you have invested more in AI and that you're doing a better job. I think a lot of what Apple already has in its products is to an extent AI powered. Even if they're not using the words AI, I do think they have more to share and need to say more, if not to actually catch up, to at least at the very least correct the perception that they have lagged behind the competition.
A bit of pring, a little bit of storytelling here.
When you've already got the M four ship in there, which makes it AI ready. There, we have the stylist that we can currently see. Daniel Woman so great to have you on the same launch day from Bloomberg.
We thank her.
After that board fight, there was one. We now see some money coming off the table of Disney when it comes to its share price because earnings are out and there was some caution ahead when it comes to subscriber growth. But let's dig into where the numbers actually did manage to beat. I'm looking at earnings for share looking strong for Disney overall. We're also seeing the fact that they are on course to mainly focus on profitability come the
fiscal next quarter. Even by the fourth quarter, you can see profit ability in their streaming unit and we're seeing those still by seven point four percent over the last two trading days for Disney, and a lot of this is coming because there's still a lot of weakness and
TV in cable. Of course, they have the twin strikes that impacted the amount of revenue that they're getting overall from their movies, and maybe we're seeing well a steer towards a slowing and insatiable demand to be getting to those parks and on those boats that Disney has as well.
We spoke the CFO Hugh.
Johnston a little bit earlier and just hear his cautious take.
The quarter was really a strong one for US, seventeen percent of I growth, thirty percent EPs growth.
That's what led us to raise guidance.
To twenty five percent EPs growth for the full year, which is obviously quite strong.
Two big stories I think here. Number one, you were just.
Talking about our experiences business was up ten percent on a revenue basis, twelve percent on an a.
Y basis, and the park's.
Business was actually up thirteen percent on OI, So we do feel.
Good about that.
Obviously, I watch other stocks report and seen the value consumer is really struggling a bit and making choices right now.
We're not really seeing as much of that in our portfolio of products.
The other positive for US is obviously the streaming service. Last year we lost about six hundred million dollars. This year we're about break even and we saw twelve percent revenue growth, So we're encouraged by the progress we've made in that business in a relatively short period of time.
Hugh, you said that you're not seeing that kind of price sensitivity. How much could you increase prices in from here?
It's a great question we took prices up a little bit in the beginning of this year and didn't really see much of an impact. So as to what the future brings, we're obviously very judicious with the way that we price. We want to provide access to as many guests as we possibly can, but we do believe that the great experiences we provide people are willing to pay for.
Hugh.
Over the past six months, we've been talking about the cost cutting operations in Disney. Have we finished some of the shrink have we finished the pairing back and are you back on some sort of growth trajectory.
We are definitely back on a growth trajectory. That said, we're always going to be looking hard at our cost structure, in particular looking to reduce costs where perhaps they add less value than they used to, and redeploy some of that money back into the business so that we can actually grow the balance of the business. So I think that's a never ending exercise of looking for ways to be more efficient as a company so that you can invest in your future.
When you talk about growing, where is that growth focused on?
Geographically?
We know that in the US you've got a very strong parks business. In Europe there also is a parks presence. But in Asia, in particular in China, that has been a growth area. Is it still how much can that be a bright spot at a time of increasing geopolitical tensions?
Yeah, I do think not just China, but all of Asia represent growth opportunities for us, both in terms of the streaming service and select markets as well as in terms of the parks and cruises business. So we do see good growth oport tunities there. Europe and Latin America continue to be good growth opportunities. And make no mistake, North America we're not done growing yet. We still think there are terrific opportunities here for us right at home.
When it comes to Asia Pacific, is it domestic demand within those countries, specifically China or is it tourists in the region.
Combination of botho't I wouldn't tie it to one or the other.
I think it's a combination of both.
And when you look at China, to Lisa's point, you know we're going into a very heated political election coming up in November, very hot rhetoric regarding China. Is it becoming more challenging to deal with authorities in Beijing and business on the ground. Given the increased geopolitical tensions, it.
Has not been for us.
You know, one of the benefits of what we do for a living is, you know, we make people smile. We bring them happiness, right, we bring them the most magical place on earth. Candidly, the government's investing in infrastructure to make it easier for guests to get to.
And from the park.
Were containing to invest in that park in order to drive growth.
It's doing better now than it ever has.
So we're the fortunate beneficiaries of bringing people joy in a world that needs it.
Hugh Johnston Disney CFO there coming up. Actually, we're going to be hearing from the former Google CEO, Eric Schmidt on China as well as his think tank holds its first ever AIXPO on competitiveness.
In that field.
Meanwhile, let's just have a little little look on what's happening on the sharefront of Infinian. Now here's a chip focused business that's looking at China as well, looking.
At auto demand.
Basically, it's chips within evs saying China is actually bottoming the seeing healthy demand there.
For Infinian product products. We're not more than twelve percent.
Yet another key chip designer or maker or builder that is showing that maybe we've just seen the botted out in terms of the ev lackluster demand that we've seen of late.
This has greenbod technology time now for talking tech.
First up, Nintendo says a successor to its seven year old Switch game console is on the way now. The announcement is course coming after its forecasts a bigger than expected profit decline for the current fiscal year. Now, in a post on x, the company's president said the new device is set to be announced in the coming year. Fans investors they have long been waiting on this news of a succession plan for the twenty seventeen gadget, which has sold more than one hundred and forty one million
units since his debut. Plus, chip maker Nvidia is investing in UK autonomous driving tech startup Wave in a one point zero five billion dollar funning round. The venture is actually led by SoftBank Group and existing back of Microsoft. Is one of the largest ever for a European AI company. Now, the cash injection underscores that continued DEMANDRAI, especially among the auto's industry. Valuation of Wave not disclosed. Meanwhile, talking of
evs and autonomous vehicles. Tesla faces in July first dead lie to submit information to US regulators our concerns about its autopilot system now the electric car make it issued a recal remember of over two million vehicles back in December or reports of drivers crashing while using the future. The National Highway Traffic Safety Administration says it has opened up a query as to whether it has a software
update was sufficient in preventing crashes. Now today is the Special Competitive Studies Project and it's kicking off its first ever AI Expo for national competitiveness over in Washington. I sat down with the SCSP chair and former Google CEO Eric Schmidt to discuss how the US is going on in the AI race.
Well, the good news is the US is way ahead of China and everybody else, and I think that's going to continue for a while. To me, national competitiveness is the challenge for the next ten or twenty years, because the Chinese are really focused on dominating certain industries and we need to compete with.
Them and make sure we win.
In the case of artificial intelligence, we are well ahead two or three years. Probably we have China, which in my world is in eternity. I think we're in pretty good shape.
And the crazy.
Valuations, all the money, all the new experimentation, this sort of enormous adoption of AI that's occurring. We have a lot of implications on society and very good for business.
What about, well, ultimately the pace of regulating artificial intelligence, is there any risk that we stifle innovation and so doing?
There's always a risk of premature regulation. My simplest example there is Europe. I've spent ten years trying to convince Europe to actually innovate instead of regulate, and they just keep regulating. The current EU ACTAI EU act is essentially regulation, not investment in the future. You can see that Europe is highly unlikely to be relevant. China, of course, is struggling because of chips shortages and so forth. All that they're ready to win if they can get the harder that they need.
And the rest of the world is not focused enough on this.
So the good news from myself my position in terms of America, here we are in DC for national competitiveness.
We're the likely winner if we don't screw it up.
I'm really interested.
You say, perhaps China is being pushed behind because of its lack of access to chips.
Are we currently navigating that new once Well.
Well, the Trump administration followed by the Biden administration did a good job in getting those rules in place.
It's a good.
Example and not a common example of how a targeted intervention has a positive measured outcome from the standpoint of the national security So I think we're good there. It's very important and I led the National Security Commission on Artificial Intelligence a few years ago for the Congress. It's very important that we get more basic money out of the government for basic research.
We're building intelligence.
We're building a new form of non human intelligence that will change the world forever in a good way. Furthermore, it needs to be done with our partner countries. These are the five Eyes of the UK, that sort of thing some of European countries. And also it needs to be done with American values. So using China as the bogeyman, imagine if they were in charge of the Internet and they were in charge of the rules, and you imagine how very different your experience as a user on the
Internet would be today. You can show up, you can be anonymous, you can do whatever you want within reason that kind of freedom is central to the spirit of the Internet, and it's important to be preserved.
Talking about a bogeyman, and a Chinese related bogeyman, TikTok became the bogaman that many are now trying to regulate.
To indeed ban, or to sell.
There's been some reporting that you've been interested, alongside Minution in potentially purchasing us TikTok.
Would you still be.
I'm not currently looking at that. I looked at it for a while.
My personal view on this is you're better off regulating than banning or a judicial action. All the big tech companies are now in the hands of the DOJ in various legal fights. I would prefer to see a regulatory regime that is sort of has the right incentives and the right prohibitions.
For all of these things.
My own view of TikTok is that TikTok is not really social media, it's really television, and that you can regulate television by the equivalent of the equal time rule. But somehow we're not having that conversation.
What's interesting is, of.
Course, you say, many big tech companies are currently well entangled from a time perspective with the DOJ. One of them being where we know you howm from, of course, the previous CEO of Google. Where do you rate from a personal perspective, where Google is in the AI competition race.
Well, it's interesting that almost all of the technology you're seeing today was invented at Google about five to ten years ago. And it's one of the sort of great things that during that period Google had a roughly, in my estimate, two thirds of the world's talent in AI was working at so Google had a very very strong head start. I think Google is a complicated place, is a lot going on. Open Ai in particular, came out with GPT three three point five and four and did.
A fantastic job.
I think that was the competitive nudge that has gotten Google back in the game. What I like now is you have these two huge companies, Microsoft and open Ai together and Google Google Alphabet again operating together, and you have them putting billions of dollars hardware and enormous software teams to invent this new future. This is not to
take away from Anthropic, another competitor. Obviously, whatever Elon is doing with x dot ai, he's raising a huge amount of money, and Meta has recently released a four hundred billion parameter modelers and the.
Process of releading it.
That looks really, really good, So that competition is the right answer to the regulators and to everyone's question. Competition brings out enormous value to consumers. And eventually people will see this and they'll say, oh my god, look at what this does.
And it's free.
And of course all that money was paid out of the markets, billions of dollars that's going in right now, and they'll monetize it somehow.
Omer Google CEO Eric Schmidt there and of course the current chair of the SCSP coming up. We're going to continue the conversation on artificial intelligence competition with the CEO of that organization, the SCSP. Meanwhile, let's just stick with China and national security now. It was likely behind a recent hack into the personal data a British Armed Forces.
Personnel scored into sources.
The hack has breached the payroll system used by Britain's Defense Ministry and obtain the names and bank account details of members of the Army, the Royal Navy, the Royal Air Force and some veterans. This comes as Chinese President Husion Thing is actually visiting Europe this week. To attempt to smooth out relations with the European Union, which has
been adopting a far more hawkish position on Beijing. Now, let's just return to some corporate news for you now and some shares that we want to be watching and currently on the move.
Now, AWS looks.
Like it's we're pouring money into Asia, but it's Singapore where they're focusing. They committing nine billion dollars to double Singapore's cloud push. In particular, the Cloud Operator is the latest global tech company to actually target the Singapore region and it's growing in Southeast Asia to diversify away from guesswhere China. We're upper quarter of a percent on Amazon. This is Bloomberg Technology. Welcome back to Bloomberg Technology. And
Caroline had in New York. Let's check in on these markets because well, after a strong three days of gains, best since November, we're still on a March high and that's that one hundred powering up some three tenths of a percent. This is we still perhaps anticipate room for the FED to cut throughout the rest of the year. We're hearing from Neil Kashkari a little bit later. Tenure yield currently off by six basis points. And when we've got a lot of auctions coming this and we've got
a load of three year debt on the table. Today we're at four point four to two, let's call it on the ten year. Bitcoin managing to turn around nicely. Now we're up nine tens percent. It's eight hundred and seventy seven. Little bit of a scapetite creeping into crypto.
Move on.
Have a look at some of the individual movers that we're looking on the day, and there's been a raft of earnings, some of them slightly more cautious than the market wanted to see, particularly when it came to subscriber growth. For Disney, we're just down about almost ten percent. Maybe some profit taking coming off the table for Disney. We're
seeing Data dog down hard, off by eleven percent. This New York company, again many had anticipated some strong growth because hyperscalers have been showing some growth in their earnings, maybe didn't feed across in the way that the market had anticipated. Were off by some eleven percent. In Video
off by one point seven percent. Chip maker Well, I mean, we're seeing druck and Miller reportedly saying he's actually winding down well, taking off some of his chips, his bets on n video and reducing some of his holding in that particular tech stock. We're off just by one point seven percent, door dash off by two percent. Interesting moves coming from Uber and Instacart to take on doors. We're
seeing restaurant delivery is being folded into Instacart. They're going to be adding Uber its menus and tracking to its apps. Let's talk about that because well, Bloomberg's Emily Chang spoke with the instacut CEO Pretty Simo and Uber CEO Dar Kososhahi on the tactics here.
Take listen.
We have heard from instagralt customers that they come to the instagrat app to order our groceries for the week, but sometimes they also want the NFL the night. And so we wanted to enter restaurants delivery without destructing ourselves from our number one priority, which is grocery, and so we looked for a partner that would allow us to from day one have hundreds of thousands of restaurants available
to instagult customers on the Instagart app. And we're very excited to be doing sponarpship with you.
Berries Dara, instacart is a competitor, given that Uber is pushing into grocery and of course retail, why cross enemy lines.
Well, certainly instacart is a very strong compartit as it relates to grocery. But for us, it was an opportunity to expand essentially the Uber eats business, especially into the suburban markets where instacart is particularly strong, families, et cetera. You know, Uber has historically had a real strength in the cities, the younger affluent customers who are in the cities.
That's where Rocher originally came from. And as we've expanded into Uber Eats, Uber eats is much stronger in city centers than let's say, suburbs, and we thought that the opportunity to put our brand and our service in front of the incredible instarecart customer base in a way that is a terrific experience will be good for business but
also really good for our restaurant partners. You know, what Uber eats is all about is bringing more business to our restaurant partners, bringing more opportunities to earn for our careers. And we're certainly hoping that those instacar customers are big.
Tippers Fiji investors seem to like Uber's push into grocery.
Why give them a foot in the door.
Well, I think there are a lot of companies that compete in one area and collaborate in another, and this is a good example where on the restaurant front we found a lot of alignment and we think that this is going to be a highly beneficial for instagled customers. Now we have the leading selection in grocery fifteen hundred retailers eighty five thousand stores in grocery combined with hundreds of thousands of restaurants thanks to this ownership, and we're
also making our instaglt plus membership more valuable. So we think this is a win win all around. And when we see these kinds of win wins, we jump on them.
So tell us a little bit about the logistics here, how exactly this is all going to work.
Will customers be redirected to Uber Dhara? Part of the order is Uber handling? How are you splitting revenue and fees?
Yeah, I can get started in MPG, can continue. So the experience is an instacart experience. And the way I put Emily is that if you go to the Uber Rides app. Right now, you see kind of a you know, the original rides experience that you have, but there's also an eats experience that is essentially looks like it's built into the Uber Rides app where you can have the
eats experience inside of rides. We've taken that technology that we perfected as part of the platform that we're building an Uber and we're extending it in partnership with Instacart. So the branding is going to be joint branding, but it's the look and the field and the experience is
going to feel a lot like Instacart. So I think the instacr user is going to sit with an Instacart, and I think the experience is going to be an experience that's quite consistent with what those users are accustomed to.
Uber CEO Darakles Forshahi there as well as the cat CEO Fugisimo, along with our own Emily Chang. Let's return to Washington now, though, because the Special Competitive Studies Project is kicking off its first ever AI expo for national competitiveness. I sat down with the SCSP chair and of course the former Google CEO Eric Schmidt to discuss.
To me, national competitiveness is the challenge for the next ten or twenty years because the Chinese are really focused on dominating certain industries and we need to compete with them and make sure we win.
In the case of artificial intelligence.
We are well ahead two or three years probably have China, which in my world is in eternity.
I think we're in pretty good shape.
And pleased to say we can dig in on this conversation with the CEO of a special competitive studies project Eli byrectari eally, thank you for joining us just ahead of the Key expo unveiled Well, and I'm interested in is that, ultimately how optimistic you are of China visa v.
The US, Eric Schmidt. They're saying we are years ahead of China. What makes you so confident of that?
Well, I mean has been pretty clear about we want to They have They're putting the enormous resources, their strategy, they have their national champions and in short, a lot of land. When it comes as I said, we are ahead of China, that makes us, uh slow down.
I think we need to continue investing. We need to continue bring public and try the sector together because otherwise a competitor that has a civil future. In other words, the reality works Landing Love we trate Settler, you know, getting ahead of these technologies.
Ayah, I'm so sorry.
We've got some technical difficulties on the line and we're hearing an echo. Will be back to you in a moment, really, Tari, he's a Special Competitive Studies Project CEO.
This will be my technology. Let's get back to Washington.
But pleased to say the CEO the Special Competitive Studies Project is still with US eally, Tari, thank you Eli for well.
Working through some of these tech issues.
But more broadly, I want to get to the tech issue in the use of generative AI within basically the area of particularly when it comes to intelligence agencies. This is an area that you've got a awful lot of experience in. Are we seeing an adoption of generator AI within our own intelligence agencies in the US?
So, I think, like with any previous technology trus traumative era, I think our intelligence community is adopting. You could argue that two steps forward, one step backward, but I think everybody recognizes these technologies are going to be so powerful that our intelligence cuity needs to adopt Now, as you know, intelligence community runs through a strict codes of how they buy and how they use these technologies. Obviously there are
privacy related issues about using these technologies. So I think everybody recognizes how these are important technologies that we need to adopt for the intelligence missions purposes, and I think everybody's making it some kind of progress in the area of their mission.
Of course, you were a chiefer staff to the National Security Advisor, a master, so someone who has a lot of experience in this field. Going back to more broadly, what the Special Competitive Studies Project is doing right here right now, as you're also trying to find what would stymy the competitiveness of the US. One issue with generative AI is access to energy, access to chips. Where are you thinking of thought leadership of ensuring that US stays ahead when it comes to energy adoption.
Yeah, I mean, look, the chipsidle was the first problem leading legislation in many years in which you had such a bipotisan support that we as a country dedicated fifty two billion dollars to bring back and build in this country some of the manufacturing capabilities that we've lost for the last twenty plus years. So I think hardware and in this instance chips are really important. I think now we are uncovering that energy demand is going to be a true capability that you need to build these next
generation AI technologies. I think there are several paths we can take as a country. You know, there's a lot of energy. There's a lot of energy around the fusion. I would argue, as we have a lot of companies here at AI National Competitives explo in DC that presents some of the key fusion companies. We have other pathway
stores getting through the energy. But I think AI could help us transform also the energy resources we have energy, energy sources and diversify, you know, going forward because of the demands and because of the means you have, you know, to get to the next generational BUFO conations.
When you're bringing together government institutions, you're bringing to other academics, you're bringing together corporates, what outcome ultimately do you want?
Do you think we are firing on all cylinders.
When it comes to discussion of how to harness this leap forward in technology right now?
So I don't think we are. I mean that's why I think we organized this expert because innovation happens in the pockets. You know, we have like most of the innovation happening in the East Coast or West Coast. And then you have in Washington. You know, you have the federal agencies that are doing two things. Both trying to adapt these technologies for the purposes of what they do daily, whether it's Health and Human Services or HUMA or the
Partner of Defense. But also they're all subdrafting policies and how we use these technologies. So the purpose is really to bring as we call Hall of Nation in Nations capital where they can talk, they can exchange ideas, they can exchange business cards, and ultimately here and talk about the benefits and challenges of all these technologies and how do we move fast in adopting all of them for the next five to seven years.
While we wish you well on that bringing together of academics and government and see what the outcome is. Ili Baktari, we thank you so much for your time today, Special Competitive Studies Project CEO over there in Washington, theaix BO. Meanwhile, let's just talk about what Microsoft has been doing. It's deployed a generative AI model entirely divorced from the Internet, saying that US intelligence agencies can now safely harness the
technology to analyze top secret information. Most AI models like CHATGBT rely on the cloud services to learn and infer patterns from data, but this is the first time a major large language model can actually operate fully separated from the Internet, which allows spy agencies to use AI while avoiding the risk that data could leak out into the open. This whole narrative is one we're going to stick with now because we're going to talk more broadly about cybersecurity.
The RSA conference is in full swing over in San Francisco. Bring together the world's top cybersecurity government, business leaders, and they're going to dissect and strategize on the best practices to tackle such new threats. Let's bring in Palo Alto Networks chief product officer Lee Clerch for more and Lee, I can imagine once again, AI is the first topic of conversation.
What's winning out in the battle of.
Well, bad actors adopting it or the cybersecurity contingent adopting it.
Oh, you're absolutely right, the attackers.
You know, when chat GPT first launched, the first thing they started doing was figuring out how they could leverage AI to their advantage, and the first thing we did in cybersecurity is we started figuring out how we could leverage AI to counter that. And today we've had a series of AI security announcements focused on how we bring precision AI to combat these attackers that are going to be using AI everywhere.
So you bring out, ultimately the things that people put in their arsenal to be able to fend off such attacks. Can you just give us a size and scope of how much we are seeing more cybersecurity issues threats amount because of generative AI.
Yeah, it's hard to trace its specifically to generative AI. We see millions of new attacks launched every single day. We see this in our telemetry, we see this in our machine learning models, our AI models that are detecting these attacks in real time, and all of that translates into billions of attacks being blocked every day. Now, how much of that is specifically the results of generative AI
versus more traditional mechanisms. It all starts to kind of blend together, but it definitely points to the increase in scale, and we're also seeing, maybe even more importantly, an increase in sophistication of these attacks where attackers are able to use generative AI to improve their chances of actually carrying out a successful attack.
Of course, regulation has tried to keep a pace of this and disclosure, the SEC in particular mandating basically prompt disclosure of whenever a company a corporate has indeed had a material incident. How are you seeing that prompting the leaders in security within the corporates to come to you to ensure that they've invested in the right product at the right time.
Great question.
Actually, I see a lot of value in some of these new regulations in driving investment towards cybersecurity, the necessary investment quite frankly given the security landscape, and a lot of these measures are oriented toward making sure that organizations have the right security capabilities. Increasingly, that means the need to be real time in their security operations and when something does happen prompt disclosure, which of course is really
good for the industry. It helps everyone understand what's happening so we can all learn from it quickly. It also makes sure that the end consumer understands what's happening and can take necessary actions if needed. So all of that that'll culminates in the sort of the other side of cybersecurity,
which is this is a battle we can win. I'm in cybersecurity, but I'm actually very optimistic about the benefits of AI and other technology benefiting those of us who are all trying to defend organizations around the world, and.
You've been trying to defend it since two thousand and six.
Over with the Palo Alto Networks in the product area, chief product Officer Lee Cleric, leaving us with a bit of optimism there.
We thank you from New York and San Francisco. This is the bluemoid technology.