Israel-Hamas War Latest and Klarna's AI-Powered Tools

From Marhard.

We're Innovation, Money and Power Collie in Silicon Vallet Nbon.

This is Bloomberg Technology with Caroline Hide.

And Ed Ludlow.

I met Ludlow in San Francisco. Caroline Hides off today. This is Bloomberg Technology coming up. We'll bring you the latest updates in the Israel Hamas war and speak to a range of guests on the ground to discuss the state of technology, the industry, it's communities in the region, and we'll sit down with the CEO of payments firm

Thank you Ed for having me here.

So whenever we are talking about tech, as we are living in the West Bank, we cannot ignore that Palestinians are living on their surveillance state where different kinds of surveillance technologies have been developed. And this said on Palestinians in an open liberatory in the occupied Palestinian tertory in the West Bank and Gaza Strip and to stay, but

That like what part of that? Yeah, go ahead say no, I'm sorry to interrupt human.

I mean, one reason we've asked you onto the program is your expertise in cyber security and emerging technologies.

That's some of the work that you do.

THEMEI, based on what you just outlined to us, is what you think is happening. How operational are technology startups in the West Bank? Has their day to day and ability to do business, whether they're a software focused company or a hardware focused company been impacted.

Well, whenever we're talking about tech industries in the West Bank, it's different than the tech industry industries and Israel because I've started talking about cyber technologies like surveillance technologies that have been used. None of those technologies are basically developed or developed by Palestinians or in the Palestinian territory. All

It's more about services.

We've seen like delivery companies, is shopping companies, among other kinds of companies that are more about service, not exactly about developing technologies such as like surveillance technologies as I mentioned, whether it's hardware or software.

Amona, you namechecked and mentioned Microsoft. We will reach out to Microsoft comment on that issue of cybersecurity surveillance in the region.

Bear with me.

I want to bring our audience another story which broke on Wednesday morning, and that is the European Union writing to Mark Zuckerberg, the chief executive officer of Meta and asking the company Meta parent of Facebook of course, to look into disinformation around the situation in Israel and what is happening on the ground. You'll remember as well, Mona that the EU and Tel e Breton had already written to Elon Musk and asked X to explain what it

So social media platforms are reflecting what's happening on the ground as soon as the escalations on the ground are starting, or we can witness more activism on social media platforms as well as more hate speech, insights for incitement, violent speech, as well as misinformation and propaganda speech on the social media platforms. In the current secuation, we can clearly see an increase and hate speech, violent speech and incitement against

Now while we.

Are speaking, while I'm speaking with you, there are is early settlers or are based in the illegal settlements in the West Bank are attacking some Palestinians and some cities, and earlier this year they were burning certain cities such as Hawaii. Are based on this incitement and hate speech on the social media platforms.

And Bloomberg has not verified the incidents that you just outlined what I would just say, and we showed it a moment ago.

We can show it again.

Is that Ex's CEO Linda Yakarino senter memos the entire company overnight saying we are reminded of our consequential responsibility to protect the public. Conversation and action that shows that they are looking into this and taking it seriously.

Mona.

Finally, I want to ask you this question that's been debated on this program by technology industry participants in Israel, in the West Bank elsewhere, and it's the.

Sort of symbiosis.

Between Israeli tech and Palestinian tech. In other words, they're very closely tied. Is that something that you recognize that they actually act as a much broader but single industry.

Yes, of course, because Ezra lc in the Palestinian workers as cheap vapor for them, so they could sometimes subcontract their certain works for Palestinians. And as you know, like with the limited, with the limited working opportunities for Palestinian young people as well as with the limited also access to the epayment services which basically affect Palestinians from accessing

Mena Schteier, a non resident fellow at the Career Institute for Middle East Policy coming us to us live from Ramala in the Central West Bank.

Thank you.

Coming up on Bloomberg Technology, we will continue the conversation on the Israel Hamas conflict and speak to a venture capitalist who's focused on bringing Palestinian graduates into Israeli tech companies, an issue that Mona just touched on there. We're also looking at shares of Microsoft. This is a company that's put out a statement on Wednesday morning saying they have three thousand staff or personnel in Israel that they say are impacted by events. It's not doing anything to support

It turns into why the conflicts, say and that causes oil prices to go up. That does have an effect on the economies. When you look at the numbers, suppose oil prices it went up by around ten percent. Then for twelve months later you see inflation going up by around zero point four percentage points.

Global outputs is low world by.

Point one five percentage points, So it can have these kinds of effects, but again it's too early to tell.

Exactly what's going to happen.

That was the IMF's first Deputy Managing Director, Geita Goopinaff, discussing the economic implications of the Israel hamas War. I want to turn to an Israeli entrepreneur who spent the last decade devoted to helping build a stronger Palestinian economy

And Yadin, let's start there.

Your basic aim has been to take Palestinian graduates or professionals as we said, and put them into jobs in the Israeli tech sector. In the first instance, how have you been impacted by the weekend's attack and your ability to do that?

Okay, well, the first thing, the first thing I want to say, just before we get into those specifics, is you know, I think, like every Israeli have been very impacted by what's happened here since about morning, since Saturday morning, and it's been an absolutely terrible time here. As you know, twelve hundred people killed, most of them civilians, Terrible atrocities committed, hostage, many hostages taken, and just absolute atrocities committed. So it's

And I'm happy to.

Talk more about the programs, but you know, I think it's important to distinguish between the immediate term and the somewhat longer term, and of course that depends greatly on whether this conflict remains limited to the events of these past few days. The terrible events of these past few days, or whether it escalates to involve a broader regional war and then all bets are off.

Yeah, Dean.

Twenty four hours ago, we were joined by somebody called Mahmood kuoas he's the CEO of a company called tech Clinic based in East Jerusalem. But what he told us was that while he had operations in Jerusalem and Ramala, he did have a number of staff working from home in the Gaza strip, and he was explaining to us how they were impacted in their ability to do their day job.

I just put that.

To you so that I can ask about the talent pools, the Palestinian technology talent pools that you work with, principally, where do they come from and in what kind of roles are you placing them into.

Okay, so again let's distinguish between the West Bank and East Jerusalem on the one hand, and Gaza on the other hand. Look, the Palestinian tech sector is still very very small. It's bigger and more advanced than it was when I and others started working on this, you know, fifteen years ago or so, but it's still very small. You can't think of it in terms of the Israeli startup nation, which is you know, one of the leading

Yadin Kaufman, founder of the Palestinian Internship Program, thank you for your time today, much appreciated here on Bloomberg Technology. Welcome back to Bloomberg Technology, Ed Ludlow here in San Francisco. Today we're going to take a look at the rise of AI image recognition tools and how it's impacting our

Of staff impacted.

Please, could you just explain the company's re response and how it has impacted Klana?

Well, I think you know, it's obviously terrible sad news. I was in shock myself on Saturday morning. And but I mean since we unfortunately don't have an office in Israela anymore, but we do have fantastic colleagues, many of us who joined us at the time we had an local presence. Obviously, the only thing I think we can have done is tried to extend you know, our you know, try to extend our the sadness and express the support

Especially and thank you for discussing that with me. We're here to talk about AI and this is a big move because not just on the lens product.

Google is going for it.

It's sort of consumer facing generative AI applications across multiple software use case is why.

Did you do this? Why you so confident in doing it well?

I think, first of allmost like, it's interesting to observe that in the US market, search for products has basically primarily been dominated by Amazon really not even Google to that extent. Google Shopping has had some more success in some European countries, but in twenty twenty one we acquired what is one of or maybe the leading and largest European comparison Product comparison website helps you find, you know, pricing the right price to right product with the right chipping.

Time, et cetera.

And ever since then we've been exploring this opportunity. And now with the acceleration of AI, we think that the gap between the content itself, I mean you watching a Netflix movie, are you seeing something in a newspaper ad or you seeing something in the physical world can actually now,

But we see that the technologies.

There, we have you know, over fifteen million SKUs and products in our in our data basis, So there is now a fantastic opportunity to create a very different experience than what has been available and really close that distance between I see something I like and I have it in my main box.

You're actually releasing thirteen different AI powered products. Are you building the foundation model large language models the power that yourselves or from a top technology perspective, you're agnostic and kind of going to established LM builders.

Well, look, we've had a close relationship with open Ai that you know. I had a privilege to speak to Sam Laid back in February and since then we've had a great partnership. But we also obviously explore and look at the other Claude and other opportunities out there.

We looked at Glubus as well. I think we are at Klana very like pragmatic.

I see, if we think that we can do something better than somebody else than we do it ourselves. If we think that somebody else is doing it better, we much rather build on that and use that.

And when it comes to a lot of the lms.

I mean, the things that Opening, as an example, you know, allows us to do is amazing. What we are thinking about, like, how do we bring that to consumers to something that actually creates value for consumers on a day to day basis, combining the amazing technology that OPENINGI and others have developed with you know, the amazing technology that we have internally.

So that's really been our focus primarily. Like there may be something.

Where you know, you want to build your own LEM eventually or you know, specialized, but right now, what can we bring to consumers to help their lives become better?

Like that's that's the key objective.

Here, Sebastian.

One of the data points that Klan is putting forward is that seventy six percent of consumers are still shopping in store. I would say there's probably a number of third party data sets that are all over the place in terms of how many people go to a store.

But how high risk is that for you?

What if people just return to online shopping and lens isn't needed.

Oh well, I think that Like what we've seen is like you know, for a while there during COVID, we thought that nobody was going to return to physical stores.

And now we've kind of seen that they have to a large degree.

I think you'll have these fluctuations, but I think over time more and more so those two experiences will basically, you know, they will merge to some degree.

Right.

I think the more and more we see what's happening in retail but also with product and brands, is that you will have pop up stores, you will have brand representation. A lot of brand stores are really also have amazing marketing capabilities for those brands, so you'll see more and more of that presence, just like Apple have been one of the amazing companies.

To show the way.

I mean Apple store is as much as marketing investment as it is an actual store itself, even though it's obviously one of the most successful retailers in that sense.

But I think that, like so, we think those will merge.

The point is that what we wanted to make sure we clon is that whether you're in physical store and using our photo lemths to basically either gone to scan the barcode or just take an image of the image of the item itself, or whether you're scanning and looking at something on your screen, on those two should really lead to the same opportunity of comparing alternatives, understanding who can shift that product fastest, at what price, what are the options that you have, and then allow us to

Think about it to some degree.

This was kind of the promise of the AMEX card, right you were supposed to weigh this card of a platinum whatever, and as a consequence, you know, your restaurant owner would say, oh my god, it's a platinum, so I'll bring you this wine or that you know, this kind of service. So like back that the payments company signals to the retailer, to the seller, who is this customer, what are their preferences, what could they be interested in?

It feels like a very natural thing.

But now with AI we can do it at a very different level than what was possible back in the amics days.

Clan I C.

Sebastian Simiyakovski. Greates, catch up, thank you for coming on the show. Much more ahead This is Bloomberg Technology. The largest public pension fund in the US, the California Public Employees Retirement System or KALPERS, is looking for a new chief investment Officer. I sat down with klper's CEO, Marcy Frost to talk about the pension funds investment strategy as

Have listen anton Orlik who is the head of our private equity team. That has been part of the playbook for him bringing in venture deals. Some of those checks can be smaller, but when you're pairing up with other funds, you can write a sizable check and still expect a nice return over time. But coming back into venture, we believe is the right strategy for the portfolio.

We want to stay in the world aventure capital, but turn back see ongoing and developing situation in Israel. We're joined now by John Medved, the founder and CEO of our crowd global venture investment platform, Big scale in in the Israeli tech ecosystem. John, We've covered a lot of sort of the near term what's happening on the ground, But from your perspective, could you kindly give me the kind of bigger picture on what this does for venture back deals in the tech Israeli system over a matter.

Of months or years going forward. Will this have a lasting effect?

Well, if you actually take that sort of a frame of reference and you look several years down the road, there will be no question that will be bigger, stronger, more money invested. Israel has developed, as you know and been covering this incredible tech investment ecosystem. It's hard to find any significant venture players who aren't active in terms of backing Israeli companies. You know, Israel huge delegation of companies traded in New York Today, one hundred unicorns are

So clearly, over.

The next couple of weeks and months, depending up on how long these hostilities last, we're going to be facing challenges. But unfortunately we have a lot of experience doing this and successfully and if you look at the past performance, every time we've gone through this unfortunate episodes and such as a war, it's hard to call it an episode.

And I appreciate the sort of unique structure of our crowd how investors can get access to private startups four hundred and twenty seven direct pull photo companies, and then there are fund companies as well. Has there been a need for cash injection this week because of what's happened to continue to be operational?

It's not, no, it's not like that kind of either send me money this week or in trouble. As you know, there's been a you know, quite market retraction in the amount of venture money committed by funds into venture.

Backed startups worldwide.

It's been fifty sixty seventy percent down year to year, depending upon which area Israel shares that downturn. So the problem we're facing is that, you know, we are already in a capital constrained environment where companies are cutting their costs, letting people go, you know, trying very very hard to make sure that they can you know, get to break even or close and then make sure they can continue to develop their businesses.

Then this comes along, and this is.

Not great in terms of a capital raising environment, but we're stepping it up. Okay, We're going to be you know, launching many new deals and bringing more capital in.

And we're heartened by.

What we've seen is the response of the global venture community to the Israeli tech community during the last several days.

It's incredible.

There's a site called tech Condemning Terror where they're simply this huge list of people who are supporting Israel and making actual commitments into the nonprofit sector to help families that have been stricken by this or people who are in need, and you know, leading funds like Inside or a General Catalyst, big companies, an Israeli company like Mobili are making in some cases multimillion dollar commitments okay, to Israel.

John just very quickly, based on what you just said. It is worth noting that Hamas has been designated a terrorist organization by the US in the European Union. I want to end on asking what's unique about Israel's tech talent. I note that in Nvidia was due to hold its AI summit Sunday Monday of next week in Tel Aviv and canceled for obvious reasons. But from the AI perspective, what is it that Israel has that other countries or regions don't.

We have resilience right In other words, today we're facing a crisis, but there are crises all over the world in the Ukraine and Asia, there's a food crisis, a climate crisis. But we are skilled at navigating through difficult times and we don't take no for an answer. We're pretty aggressive people, we're sweet, and we're loyal.

We work really hard.

And in terms of the AI area in particular, we have remarkable companies who are not only developing generative AI or broad platforms, but we have companies that are also developing incredible expertise in these vertical areas as the one such you've just spoke about in terms of AI for shopping, and I'm going to call Sebastians with some really interesting

Okay, in the Israel alone, in the cloud, in sports.

Deck, in mobility, and I think that this will continue to grow. We're going to get through this war successfully as we have for the last seventy five years.

And we look forward to working with our global partners.

John Medved, founder and CEO of Our Crowd, Thank you for your time here on Bloomberg Technology.

Okay.

Social media platforms like x and metas, Facebook and Instagram are facing criticism for the handling of misinformation amid.

The Israel mass war.

Joining for more and writing about it in Bloomberg BusinessWeek columnist Max Chafkin and Sarah Fryar, our editor here in SF the byline on this one, but outline what the Business Week article discusses.

Max.

Yeah, So the BusinessWeek article discusses the way that social media historically has been very useful both for journalists and for outside observers and even for people on the ground in sort of gathering information, uh, you know, either mid

Max. Bear with me on two things.

The first is that sources at X tell me they're working out how to respond to Thierry Breton, the EU Tech chief, who asked them what they're doing about misinformation. But also in the last ten minutes or so, we've heard from Meta pairent of Facebook, and they have responded to Thierry Breton's same request to them. This is what

Yeah.

Absolutely, So two things have happened. One is that both of these platforms Meta and X have been under pressure are from TikTok. TikTok's model is not news, it's you know, engaging videos, and we've essentially seen these platforms move towards that.

That's why when you open up Instagram.

These days, you'll often see posts that are weeks, if not months old. Even on Twitter, which has been known as kind of you know, real time news network, you'll see stuff that's from yesterday, the day before, last week, or whatever, and that makes it just much much more difficult to.

Figure out what's going on.

The Other thing is there are fewer journalistic players on these platforms. Used to have a lot of kind of

And that is also gone.

So it's not just that the companies have disinvested the community has disengaged.

Thank yous.

Bloomers, Max chaff Kid and X would point out that community notes is now in sort of tens of thousands of posts monitoring this. Starting tonight, Bloomberg's screen Time will bring together industry leaders at the intersection of Hollywood and Silicon Valley. Here's a preview of what to expect screen Time Hollywood. Bloomberg's bringing together leaders, entrepreneurs, celebrities, and moguls to speak about the future of the business of culture.

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