From Mahard where Innovation, money and power collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Caroline Hyde at Bloomberg's world headquarters in New York.
I'm Ed Lovelow in San Francisco. This is Bloomberg Technology coming up.
Microsoft to invest one and a half billion dollars in a UAE top AI firm.
It's G forty two.
That's the US government pushes the Abu Dhabi business to end all cooperation with China. We analyze the business and the political drivers.
Europe has its eye on fintech and crypto. We sit down with the EU's Commissioner for Financial Services on her visit to Silicon Valley. Is ais all the rage in bank earnings, and.
We digest a two hundred and fifty million dollar fundraise for a Silicon Valley chip developer, Revos, which is yet to bring about its first product. We discussed the race for AI infrastructure and so much more. Throughout this hour, we focus, though, just on the public markets, which in the United States relatively sanguine right now, and the NASDAC is off just by about.
A quarter of a percent.
The action is actually what's happening in Asia and Europe, trading both those benchmarks under a lot of pressure following some sell off that we've seen in the US. But really what's been happening also in the bond market, yields up three basis points on a two year yield that at one point was very close to the five percent level.
We're all eyes on j Powell what.
He sees for the future of FED policy when we've still got such a resilient US economy and inflatory pressures. Moving on, have a look at what's happening in the world of as a dollar that rises for five straight days and having the best run in at least a year. The bitcoin on the flip side versus the US dollar is down one point seven percent. We're at sixty two thousand dollars, so there's still some risk aversion in this market ed when it comes to certain risk assets.
Well, looking in on the micro I'm.
Continuing to look at Tesla. This is a two day chart, the stockdown and another four percent. We broke the news yesterday that the job cuts at Tesla will be nearer to twenty percent. Elon Musk's memo said more than ten percent. We also broke the story that Drew Baglino, an eighteen year veteran and one of four named executives, had resigned. He then confirmed it on social media. The milestone is that Tesla's now below five hundred billion dollars of market cap.
There's a lot of questions we're going to ask some of them throughout this week, throughout this quarter about what comes next for the ev name. Also looking at Microsoft up half a percentage point, had a slow start to the session. The headline on news is the one point five billion dollar investment in G forty two.
There's a backstory which.
Is, you know, I've been looking into for a few months. G forty two really likes what Sam Outman and OpenAI are doing. I think they want a piece of that. They now have a relationship with Microsoft. I wonder if that helps. And the backstory is a political one as well, that G forty two is now safe for a US company to invest in. It's very complicated, but it's an we're going to hear.
More and more about, certainly, and let's get straight to it.
Microsoft and the deal Blue Magatinea Bass you come of this of course with the Microsoft expertise covering all things of that business. But just take a step back, I mean, what had to happen first? What led to the divestment of China to move away from China?
Sure, so, what a bunch of Bloomberg reporters in Doting and some of my other colleagues has been tracking for a while is that there have been is behind the scenes secret talks between the US government and G forty two, And what we reported last night is that that resulted in kind of a secret pack that was reached in which G forty two agreed to divest from China.
Remember.
G forty two was under a lot of criticism from US government from some members of Congress where its close ties to some Chinese companies, including Parkway, and they were under threat that they might not be able to continue to have access to the key in video chips that they need for their AI work. This kind of you know, secret pack result of it and used the way to this Microsoft deal.
Did I think it's worth explaining to our audience what G forty two is. It's essentially an investment firm. But in all the conversations I have G forty two comes up a lot in the context of the Sam Outman chip initiative. We've reported that, you know, Sam Outman has met with G forty two, that G forty two wants to give him lots of money, But I don't think we've ever stopped and said, what's G forty two.
Sure, it's essentially, you know, the biggest AI company in that region, in the UAE and large parts of that.
Part of the world.
It's a wholding company that's focused on AI, but it has its hands in a lot of different parts of AI. There's significant healthcare initiatives than talking on in artificial intelligence. For Microsoft, this is a multi stage deal and they want to take advantage of several parts of what G forty two offers them, including Microsoft President Brent Smith told
us yesterday. In the later stage of the deal, they're hoping to put Microsoft services in G forty Tuesday data centers and use that as a way to access markets in Central Asia and Africa where Microsoft doesn't really have a presence and doesn't have its own data center. So that's another role the G forty two plays, sort of, you know, easing the speed of cloud and AI into some of those regions where US companies don't really have access.
That's part of the reason why the Biden administration wanted to make sure that it removed gboty two from the Chinese sphere influence and you know, got closer to the US techology companies in the US technology industry.
Bloomberg's Dina Bass one of the bylines on what is one of the most read stories and important pieces of reporting on Bloomberg this Tuesday.
We've had the reporting and the details. Let's get some.
More analysis and reaction with Dan Ives of Webbersion. Dan, you know, you kind of cover this from Microsoft's perspective, but you've written a few notes about the bigger picture as well with what happening with open AI and AI infrastructure build out. Just give us your kind of scorecard on this Redmond UAE tie up.
Oh, I mean, this is a massive strategic bet.
It's another flex the muscle. It's for redmen and the Dalla because really for G forty two, they had a choice China or US and Redmen and you're gonna take Microsoft every day of the week.
Right now along with Nvideo.
And for Microsoft, it's just another doubling it down.
They're playing chess. Others are playing checkers.
Then Microsoft is forming a lot of relationships with a lot of different people. Are they just making sure they're covered basically well look ed.
They know their way ahead. So what they're doing is they're putting the.
Guardrails up really around the world Joinny blind Spot Middle East being.
One of them.
They're gonna bet on the big Horus right here, and they ultimately even had to invest the Chinese piece. Also making sure that within the Beltway to or two area could there's no issues there. So from Microsoft, this is an example they're miles ahead. They're just further and further gaining share from an AI perspective, given this AI revolution where them all mean the golden child of AI resides Dan.
What's interesting is in this case US government played a role in other areas. I think of just what happened last week with the UK CMA worrying from a regulatory perspective about certain key players having a web of relationships and then crossing over too much in the world of AI. Will this be regulated from a competition perspective?
Well, I think what Brad Smith knows it as well as anyone. He's going to proactively in Microsoft make sure US and Beltware are good with this because they don't want all of a sudden a year eighteen months from now this becomes a bigger issue. And they checked all
those boxes. The Chinese divestiture I think was important from a G forty two perspective, and now it's a green light going ahead at the same time where Amazon and Google still trying to play catch up, and this is Nedella just continuing to make aggressive bets and we'll see it again earnings.
Where they continue to be the lead from an AI perspective.
Phenomenal game of chess, as we sort of referenced, And what is on many players' minds right now is where are the bottlenecks? Time and time again from Sam Altman and many that it's to do with energy and it's to do with access to AI infrastructure. Is that what you hear from the leaders of these companies and how much more investment and we likely to see to try to see a solution globally for that.
Yeah, And I think ed now that when you was talking about on the chip side, there's a two parter here because I think this is ultimately going to lead from a chip perspective to more and more investment from Middle East towards some of the all men and chip ventures that's now going on within Open AI and Microsoft. Of course, energy continues to be the constraint, but use cases are.
Exploding across the board.
And now this fourth industrial revolutions here being led by the Dell and of course the godfather of AI, Jensen Na Vidio.
I love having the perspective Dan Ives, who can make it a global conversation.
We thank you for web Bush.
Meanwhile, let's just go to another key player that many in human eye on Apple, It's pledged to buy more components and accessories for its devices from Vietnam suppliers. Now the move is a big boost for the Southeast Asian country, says it emerges as a global electronics hub. Apple is exploring ways to shift production, of course of its GAVET gadgets away from China. That's to minimize those geopolitical risks. And the iphonemaker is exploring India and in Vietnam.
Which has seen about a fourfold.
Increase in companies assembling Apple products over the past decade. Meanwhile, coming up, well, let's talk about global regulation for a moment. We're joining the European Commission of Financial Services to discuss all things digital finance and regulation.
There at.
I'm taking a quick look at shares of the Swedish company Ericsson. This is the Swedish SES two percent higher as it stands. The USA dr is actually a little bit higher even still than that beat on earnings, and it's really interesting there's a company going through restructuring at a time where the mobile phone or cell carriers are just not spending on five G network infrastructure, but the market likes what it sees. Stock up two percent. This is Bloomberg Technology.
Okay.
The European Unions back in Silicon Valley, and this time the focus is payments, crypto and the impact of artificial intelligence on banks. European Commissioner for Financial Services Marade McGinnis has met with coinbase and Plaid, and has meetings lined up.
With Apple and Stripe.
I'm delighted to say the Commissioner joins me now on set.
Welcome.
Yeah, to be here in person.
It's been a while since I was this side of the countries.
So it's good.
It's interesting that the ongoing relationship between the Commission and Silicon Valley based companies. You forget there are more than four hundred million people in Europe who have access to those companies and their products. Just summarize the purpose of your visit and your objectives.
Well, it's always good to meet colleagues and you can talk to them by phone, but being here in person matters. We're at a critical stage, so this commission is coming towards the end of its mandate. There's been an awful lot of change around finance, digitalization, we have artificial intelligence, and really we're here to exchange views and to listen to what's happening on the ground here because it's a fast moving area. Even since my taking up this role,
we've seen a huge evolution in banking. COVID accelerated the use of digital payments. We want payments to be instant. We've got legislation around that. So basically, what we're trying to do is harness the benefits of all of these technologies.
But all the way I look at the risks that might be.
Involved in them, and our idea is not to stifle innovation, and this is a place where innovation flourishes, so it's good just to exchange.
We have a lot to discuss I'd like to very quickly just tick off crypto coinbased from the show with me last week, and they had a number of grievances, particularly about legislating for regulation.
Instead of going through courts.
What were the grievances they brought up to you in the context of Europe.
The grievance where it didn't arise because actually they feel comfortable that Europe has provided certainty with our markets and crypto assets legislation, and while there might be minor issues within that, at least they know how they will be regulated and licensed at the European level.
I think here it's different.
So we were able to talk about the benefits of certainty. Very often Europe can be accused of being a rules based which I think is actually a good accusation because rules matter, but sometimes overregulating. I was very interested to hear how certainty is important for a company like coin base, and I was also interested that maybe a few years ago this was an area of concern, but actually when you listen to that company and its vision for what could come next in terms of innovation and how they
believe regulation is important. I was very encouraged by that. So we didn't have so much of the grievances. I mean, there are issues that they will talk to us about, and we're very open to talking with and to those who are using our legislation and who need clarification.
Commissioner again, it's can I push back a little bit because I'm reading a report from Tether, for example, now nowhere near as much oversight as the previous business we're just talking about, but key player within stable coins, the player and stable coins, many would say, and they've gone on the record saying the message being sent is that Europe does not want crypto regulation has had that is
largely limiting access, especially for retail investors. Brussels effect for many feels like a cooling effect.
Well, look, everyone has a different opinion on this, and I think we had three options when it came to crypto, ignore it and let things evolve, ban it because.
We couldn't control it.
Or and this is the approach we have taken regulated so that those that are in the industry have certainty about when they're dealing with clients within the European Union, and I think we took the right course. Now, it's a fast moving area and equally many who are in that space originally came to it because they didn't want
to be in the regulated zone, if you like. But I do think there's more maturity now that those who want to have a lifetime in this business, which will evolve over that time, want certainty in terms of their dealing in the European Union, and we have provided that certainty. And I think that's all to the good of the industry itself. It's in one sense AI has overtaken some of the conversations around crypto because crypto has been around for some time.
It looks like it will prevail. There are different views.
In Europe about whether crypto is an asset or not, and we have all of these conversations. What we do in the permission is bear in mind, you know that the greater good, so is the balance of regulation better than allowing things evolved without any guardrails.
Commissioner apologies to drump in, but the AI guardrails, for example, the AI Act. How much you think AI is a concern in terms of well financial stability right now?
Well, I mean that's a very big question. I think the issue of AI. Yeah, but it's such a big question that when you listen to some of the scary stories around AI, you would really want to stop it immediately, but it is not something that you can actually contain. What we can do is try and look in a measured way of what.
Are the risks, because not only AI.
Is higher risk, In fact, some of it is extremely useful.
And again our approach, and it sounds dull, but it's important to say it. It's about balance.
Allow the industry evolve, but allow those who are you know, if you're like in charge of watching these things, like the Commission and our Parliament, to have us say in how it evolves. And we wanted to do good, so we again look at the risks involved rather than allow an unfettered evolution of artificial intelligence, which is already being used in the financial system in any event, I gather I have one who who talks to me on my
banking app. We get on sometimes not all the time, and I think behind all of this is a desire to harness technology but not remove the human dimension around technology, and there's a risk that that could happen. So we've been mindful of all of these things and we have been careful to categorize where the risks are. Conscious also that this will evolve. It is evolving before our very eyes.
It is commissioner, and that's why you've got plenty of conversations. Still we had, we wish we had longer with you, right, We get as wonderful to have you on the show. Europeing Commissioner for Financial Services.
Revos is a Silicon Valley AI chip developer without a product on offer yet, but it's raised more than two hundred and fifty million dollars in an oversubscribed funding round, with Matrix Capital Management, the largest investor in the round, joining the board. Delighted to bring in Rivos CEO Punic Kumar for more. This is an AI chip based on Risk five architecture. I hear a lot about that at the moment as an alternative to a video.
But let's go back to the idea that it is in design.
You're in the R and D phase, that's correct. The two hundred and fifty million, where does it get you?
Okay? So first of all, thank you for having me on the show. An honor to be here. What we plan to deal with this fundraise that we are announcing today is to really primarily support our increasing customers. We have huge demand coming at.
Us increased customers if you haven't got anything to give him yet.
So we've been speaking with a lot of potential customers already and they're very intrigued by our design. What we have to offer and what we're going to do today is use this money that we eraised to expand our operations globally, increase our hiring, increase our engineering efforts, get to production of our parts, and really get to trial.
I hear increasingly there is a market for Risk five based AI accelerator or AI chip. It's a point of differentiation from Nvidia and prior for cupcoming generations. But it doesn't seem like that market's here in America. No one's taking it seriously, that's right, is it in China?
Actually that's not true. It is here too. If you in the last few days, you saw an announcement, for example, from one of the big AI drivers that they are using risk five in their in their chips already. So we definitely see a place for Risk five in the air market, and there's several companies in this market space already.
BENI for those who aren't as well versus and Risk five versus our architecture break.
Down, what alternative offers.
Is this about cost? Is this about ability efficiency?
It's actually a combination of many factors. Cost is just saving a license fee, for example, rather than paying somebody else. But really the biggest thing I think is drives a lot of innovation because it's a brand new architecture. It's open, so that allows anybody to do research with that architecture. And this is where we kind of see innovation happening in the next five to ten years, and it'll eventually, we think, will displace many of the other players in
the market, the existing incumbents. This really is the Linux moment. We think risk Fribe brings a Linux moment to instruction set architectures for CPU designs Perny.
Therefore, there is this handringing going on about the access to AI infrastructure, a need for energy. We've talked a lot about just the teaming up a Microsoft and G forty two, the obvious global conversation going on around access to chips.
Who would be your customer?
Are you going after in video's customers or are you going after ones that can't access in video?
Okay, so I think first of all, we are going after any customer that is really using a lot of data. That's our biggest thing is that any data driven business that needs more hardware support is a potential customer. Now we know that the big three or four players in the market of the cnvideo is the biggest. There's AMD, there's Intel, and there's many other startups in the area
that are building hardware for AI. We think the field is growing fast enough that we have ample opportunity to address any other players who can't get access to in video hardware or who want to look for an alternative. Whether it's cheaper, whether it's more power efficient, there's many factors that would go into the decision making process.
You were associated with a company called Paseemi that that company was sold to Apple. Yes, there has been a piece of legal proceeding or litigation that's now been settled which came before this funding round.
Could you just explain that and where we sit with it.
You know, what we're celebrating today is our fundraise. What we are really trying to do here is keep at our product. Yes, it was a litigation and it's behind us, but what we really are trying to do today is focus on our product going forward. We've been beavering away at this for about three years, Laser focused on getting what we where we want to get to and we really look forward to our product being announced in the next six months two.
Year come back when the product's ready to show.
Absolutely all right, We're delighted to real CEO Kuma, thank you so much.
Welcome back to MENWBG technology and how I had in New York and I met Lovelow in San Francisco.
Markets carac Yeah, quick check.
On them because we've I've seen perhaps a little bit more stability in the US that you've seen abroad, certainly, and then as that one hundred actually managing to turn green at the moment, the benchmark seeing a little bit of inbound as we await J.
Powell speaking a little bit later.
All important for the one market which has seen a sell off earlier and two year yels near a five percent handle. But nevertheless we see some money going back into big tech, m sci or country world innex so under pressure. Europe sold off hard, so did the Asia in fact, playing a little bit of catch up to some of the risker version we've seen in the US, Bitcoin off by one point three percent as the US
dollar just March is higher. What will we hear on the inflationary pressure from chair power at sixty two thousand bitcoin versus the US dollar move over. Have a look at some of the individual names now, I said that Europe was under pressure. I start with a name over in the UK Wise transfer Wise and many would know it basically sending money abroad down almost nine percent. Look, revenue was up twenty four percent for this particular fintech Darling.
We're just speaking to the European Commissioner all around digital finance, but it was not as much as the market wanted to see and were under pressure significantly. TESL off by more than two percent. Europort ed front and center as they see executives lead and of course leave and indeed potentially as much as twenty percent headcut and cuts in certain areas of the business. Netflix, though you're outperformer today, we brace ourselves for earnings at the end of the week.
We're getting some upgrades to the price targets coming from various as. Today we're six hundred and twenty for Netflix, But what are you looking at on other earnings areas well?
Banks and banks are big this Tuesday. AI has been changing the game. I just want to use to listen to a SoundBite from PGM CEO David Hunt, who joined us earlier.
Here's what he said.
Technology now is allowing us to move data to the cloud and then to do things with artificial intelligence that we never could do before. And so it now is actually being used by our investors, it's actually being used by the frontline to make decisions. That's a very different use of technology that it was before. And I think that's very exciting.
Let's bring in Bloomberg Snari Bass like the Keywell Street name. Bank of America is what's moving in the markets and pgim's thoughts on the AI story and banks could have put it better than I have a kid just summarize what's happening this Tuesday morning.
There are a few things happening at the same time. When you think about Bank of America, it is their propensity to bring new clients in, lend them money, and also keep a handle on costs. One thing being asked of CEO Brian moynihan was if this further investment in digitization of the bank would help bring their efficiency ratio down below sixty percent, And you had CEO Brian Monahan say they were really pushing to.
Get that done.
Now, some interesting statistics for you here, ed when you think about how quickly things are going digital, it's that this quarter alone, Zell transactions at Bank of America past the combined number of checks written plus the amount of cash withdrawalers from tellers and from ATMs. So that is how quickly money is moving online at Bank of America. Now, the faster they can get this done, they believe that they would be able to create cross savings not just
for them, but for their customers as well. That's one side of things, how the banks themselves are using digitization and AI to really drive efficiency. The other end of things here, I want to pull up a quote from David Solomon Goldman Sachs, a CEO ES a day ago about how the significant demand for AI related infrastructure and as a result financing would be a tailwind to their business.
A day later, just today.
Now we have Morgan Stanley saying that it had the top amount in equity underwriting fees so far this year. The more that people are raising money in these markets, the more you can fuel some progress in terms of fee generation for these banks.
It isn't that fascinating thing because AI is almost a driver on both fronts. We got the cost efficiency, We've also got the fact that anything with AI in its name is looking to go public at the moment, or indeed.
Try to spin that story.
How much resilience is there coming from some of these CEOs playing catch up ultimately to Jamie Dimond, who seems to have led the pack when it comes to AI.
Well, one thing that's interesting is you look at the bottom line and you look at how much they're spending on technology. You have cost rising at every bank, particularly in terms of compensation, even with headcount following. But for many of these banks, including Bank of America, Morgan Stanley, you're seeing technology really be on the rise as well when you look at the cost rising at these firms.
So they are competing not just to invest in talent, but also to invest in the way of automating these banks as quickly as humanly possible, because at the end of the day, they believe it will help their bottom line.
Isn't it interesting though?
Bank of America having its worst day since well, the Silicon Valley bank collapse back in March twenty twenty three, which is all about money moving a bit too fast, for everyone's pleasant relationships with it. Shanali Bassett, we please to have you on the show today to break down look AI and tech and banking, and let's stick with that because over at jeffries An your private Internet conferences on our shoulders. We've got Santa Monica is where it's
being held. Five hundred tech leaders are going to be meeting to discuss guess what AI emerging opportunities in the next cycle of the growth in tech Go with us. He's Jeffrey's global co head of Internal Internet Investment Banking joining us and Gore of congratulations on the event that's coming today. What is front of mind from the private allocation of money right now? Is it trying to pick the winners in this environment?
Sure?
Firstly, thank you for having me and thank you for covering our event over the next couple of days. What we have here this week is a collection, as you mentioned, of about four to five hundred company execs as well as investors in tech and in consumer tech in particular. This year, we have a team around AI as you've been talking about, and it's hard to not get excited about what the prospects are from an AI perspective. Especially in private company land. I think there's two elements to
this that we are looking for this week. One is the AI first company. So think about you know, companies that are trying to disrupt existing monopolies, existing large industries, whether that be everything from financial services to nursing to the search and so on and so forth. There's a
whole universe of those companies. And then you've got the large consumer internet companies that are using AI today in their business, both from the perspective of news services as well as from taking out costs, and so that will be a big team across both of those sectors.
Do you expect M and A to be driven by this AI wave.
You know, not in a meaningful way yet. And what I mean by that is at least a lot of the companies that we have here right now are still relatively early in their evolution. Yes, there is a lot of hype. Yes they are getting a lot of investment from early stage and lead stage investors, but they're still early in where they sit in the revenue profile of their companies, in the maturation of business models, and so
I think everyone is monitoring it. I've talked to several company large company executives that are here that are doing meetings with some of these companies that are monitoring how this is going to impact their own business. But I think acquiring something is hard these these trade high valuations as you noted, and acquiring for a big company to acquire something for billions of dollars when it's not really generating meaningful revenue, I think it's going to be really hard.
So I don't think it's going to be a big em andity team from that perspective. I think it's going to be a big investment team today. And by the way, these companies can get very big, very quickly.
I think that's the.
One thing to look out for this is there's not been as interesting of a time in consumer tech in particular as there is today because a lot of the companies that are in the room today could be breakout companies in the next one to two.
To three years.
Right, These could be household names very very quickly.
Gorev It's the same in the IPO market September or the little Reddit pop of late. You needed to have an AI story, you called them frontline AI names or names that needed in AI store, or even if they had nothing to do with AI. What I'm interested from you is in attendance this week. What's the proportion of what you'd call genuine AI companies builders of large language models versus those that just know in the shop window they need the letters A and I to get some funding.
Yeah.
Yeah, it's a good question. You know, I would say probably about you know, twenty five thirty percent of the companies that are here are what I would say AI first businesses. So you know, we have you know, companies like Perplexity and glean and and Tropic and duck Bill and eleven Labs and so on and so forth, Quora with Poe, AI, et cetera. So you know, AI first companies, that's probably about twenty five thirty percent of it. For the rest, though, there will this team is so front and central.
I'll give you examples.
You know, we've got a number of companies and travel tech businesses like you know, Harper and a company out of Korea, Younolgia and so on and so forth. They're going to talk about how AI is transforming their business. So it is not a you're right that it's a little bit you know, they have to talk about it. But in many cases, it is truly what is driving their business.
You know.
Similarly, we'll have you know, companies on the music side, and companies in fintech and in health tech, and this will be a big team across all.
Of those as well.
Could Sir Jeffrey's Global co head of Internet Investment, Banking and carry He mentioned one of those names that's coming up.
Yeah, I cannot wait to bring you all the highlights from the Jeffreys conference. We're going to be joined by the CEO of Perplexity that's coming up next. Meanwhile, let's just go back to the public markets for a moment, because we're also keeping a close eye on Live Nation.
The Justice Department may file.
An antitrust complaint as soon as next month aimed at forcing Live Nation to spin off its ticket markets ticket Master ticketing business the power of Taylor Swift without a six point percent This is relybot technology.
Time for talking tech.
First up, Google DeepMind CEO Demis Hasbis says the company will spend more than one hundred billion dollars over time developing AI technology. The comment comes as a service was asked at an event in Vancouver about a potential one hundred billion dollars supercomputer dubbed Stargate, which is being planned by Microsoft and OpenAI, which was reported in The Information last month. Plus, Crypto dot Com is in the middle of a hiring drive that could see its head count
grow by a total of fourteen hundred people. It's the latest sign of an improved employment outlook in the sector. Now remember, Crypto dot Com cut a fifth of its staff in early twenty twenty three to control costs. Following a market route, the firm began hiring again. Tokens including bitcoin rallied rivals such as coinbased Cracking and Binance have also been adding to their staff, and Meta's oversight board is investigating the company's handling of AI generated deep fakes.
Earlier this year, sexually explicit deep fake images of Taylor Swift flooded Facebook and other social platforms, prompting an outcry from the White House, AI experts and other advocacy groups. According to a statement made by the board, it will evaluate whether two separate AI created images depicting nude women posted on Facebook should have been removed under Meta's content policies.
Caroline, Now, I want to focus a bit more on some of Meta's business models, and indeed, what's been happening with our big take today. In the age of social media, it's very easy ed to be deceived, but the late scam is proving to be deadly. It's exploiting the shame and embarrassment of teenage boys joining us now Bloomberg's Olivia Carville, and I'm not ashamed to say that I cried several times reading the story on the train this morning. What
BusinessWeek and what your reporting does so well? So often as you shine a light on a few key inter vial stories, you meet the story real. Jordan DeMay is one of them. Can you just articulate what happened to him? And ultimately how many more numbers of people this was happening to.
Jordan de Maay fell victim to what is known as a sextortion scam. This is sexual extortion.
Essentially.
He was contacted by what he thought was a teenage girl on Instagram and she turned the conversation flirtatious. She sent him a naked photo of herself and asked for one in return. When Jordan complied and sent a nude photo back to this individual through Instagram, immediately, he was
blackmailed for money. So what actually unfolded and what he had no idea of is that who was behind that account was actually con men or scammers based in Lagos, Nigeria who had been contacting hundreds of teen boys across the US, reaching out to them to try and elicit a nude photo from them to then blackmail them. Crime sextortion is now the fastest growing crime in the US.
The FBI has been sending out PSAs because sadly, it's resulted in the suicide of more than two dozen teen boys, including Jordan de May and a guilty plea coming from two very young boys themselves ultimately and just adults in
Lagos who are now here in the US. SNAP did respond to your reporting saying they're ramping up our tools to combat sextortion and we have extra safeguards for teams to protect against unwanted contact, and indeed matters global head of Safety you've been speaking to saying that sextortion is a horrific crime and we spent years building technology to combat it and support law enforcement in investigating and prosecuting their criminals behind it.
But ultimately you're saying this is still growing.
What more are stories You're hearing or indeed ways in which is it technology that ends up being able to be a force against this.
Yeah, I think it's a great question. I mean, for the social media platforms, they don't want this occurring. These individuals, these bad actors are hacking into Instagram accounts to pretend to be these teen girls in order to coerce these nude photos. So for the platforms, it becomes how do we prevent this from the outset? So they're using artificial intelligence to do things like suspect or detect suspicious activity
on the platform. Meta is now sending sextortion focused safety notices to teens saying, you know, this is what sextortion is. Be wary, be careful of who you're talking to. And just last week they announced that they're going to be automatically blurring nude images that are sent through the platform. So all of these steps are being taken in an
effort to try and curb this crime. But from the FBI's perspective and law enforcement perspective, it's just growing too big, it's moving too fast, and the scammers are too ruthless in how they blackmail the teens. They push them to the edge and beyond to try and get as much money as they possibly can from these young boys.
Olivia.
This is the latest in a series of investigations you've done across quite a broad domain of AI generated content on social media, deep fake pornography, and now this piece. You talked about the efforts there, but also the challenges. Is there one outcome from your investigation since publishing the story that you can talk about anything that happened in response to your reporting.
Well, I was surprised to see Meta announced just last week that they're going to be blurring neod images sent through the platform. I think that is a great step in the right direction, and you're right. I tend to focus these stories on the dark sides of social media, and there's obviously so much good that social media gives
to children and young people as well. These are the edge cases, and I think it's really important for our viewers and our readers to know about the risks of social media, and specifically in this story, for young teen boys to understand maybe the person that you're messaging isn't
actually who they say they are. Maybe you need to be more cautious about how you behave on social media, what you put out there to the public and how you talk to individuals who are ultimately strangers, people you don't know.
I've urged everyone out there to go read your reporting and indeed the implications of it. Olivia Carville, thank you so much for spending time with us today to talk through it.
Let's get back to the Jeffries Private Internet Conference. One major theme the theme is AI Perplexity. CEO arab Inshrinibas is joining us now from that conference and Perpexity, of course the developer of an AI based search engine platform. And I hear the name perplexity a lot. I know a lot of people use perplexity and a lot of people talk about perplexity. Why are you at Jeffries. What do you want to get out of it this week?
I'm excited to meet people here, and you know, Perplexity is still not a household name yet. I want to be used by every person, every organization, and it always helps to spread awareness and get more people excited about Perplexity.
There have been reports that you are now a one billion dollar valued startup. There is a lot of interest in your capability. Talk to us about the financial health of Perplexity right now.
I think like what we announced was, you know, when I was there last time here with you with the Jeff Bezos, around five hundred and twenty million dollar evaluation. We haven't made an official announcement on a new around yet. We'll have more to share soon very shortly.
Oh, come back talk to us about that for now. What strives are you making?
Are people switching from say Google as a search engine to you?
What do your customers say.
Eravan, What is is like?
They're not viewing us as like, oh, I either use you or Google. They're still happy to use Google for like quickly getting onto like a website, like say they just want to go to.
Bloomberg dot com. They're just happy to use Google for that.
But let's say they want to know like what what is the latest thing going on at Jeff Freeze, or like like who are the speakers at this conference that I should be aware of for my business. I think these are things are what Perplexity is more useful for. So they are beginning to see us as a different too, an answer engine that's very useful for directly coming and asking questions and doing your research and our growth in
the United States. Since we announced the funding around last time along with you guys has been like really good. And that's also translated a lot to growing our revenue because we always wanted to be a tool that's used by people in the high income countries and that's beginning to show up in our numbers too.
What am I a business model?
Is a lot of interesting talk of how wele Google itself might start charging for its AI offerings within its enterprise. Are you seeing enterprise adoption for you and you're thinking about charging?
Definitely considering it.
And that would be something we should We'll be sharing soon something more on that. And the way I see it is like a lot of companies, a lot of people tell me that, you know, I wish I could use perplexity at work, but my company is banded.
Yes, you know, so that's a problem to solve and we're going to work on that.
I remember, what's the challenge right now for a company that is building lllms and working at this level.
What is your day to day that you're facing.
I mean, the biggest challenge is honestly the pace I which this field keeps changing every week. Right one point, we were all like GPT for is D model and it's like there's nothing else that matters, and everyone was like, oh yeah, and you cannot build on top of them because like they're eventually going to do all the product and like it doesn't matter.
There's no independence from open AI.
And then Anthropic puts out clock three and then clock three is even better than GPT four, at least the Opus model, and they're like models much better than three point five, cheap, faster, open sources, moving fast data breaks.
Release the model that's like better than three point five. Mistrals keeps using.
It's just the pace, and the pace of the show went too fast as well. We wish we had time with you, Aravens, turn of us perplexity, CEO, wonderful to have his thoughts.
Let's bring my technology