From Mahard. We're Innovation, Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
I'm Caroline Hyde at Bloomberg's world headquarters in New York and I.
Had other in San Francisco. We're back Carrow.
This is Bloomberg Technology.
And guess what we're still talking about it coming up in video hitting one trillion dollars. It's the ninth company to ever reach the valuation. We're going to bring you all things AI throughout the show and despite the.
AI rally, industry leaders warning the technology poses the risk of extinction. Will discuss a letter out from the heads of Open Ai, Google, DeepMind, Anthropic and others calling for caution.
Class Elon Musk touches down in Beijing. We'll bring you the latest of his visit as a Tesla. CEO emphasises the importance of ties with China and let's get a global look on these markets right now, because actually the Chinese economy is actually still a key caution of concern for many and that is why we're seeing the Golden Dragon. That's, of course the Nasdak Golden Dragon in it's just off by more than three percent. Look, the Nasdaq is your
outperformer today. The technology sector is your outperformer. Is Actually the rest of the world is still worrying about recession risks or worried about inflation. So we see the nasdak up sixtens percent, but not the other key US benchmarks. On the day ed we're seeing there a big rally in the US debt market. Ten year we see yields coming down some nine to ten basis points. For the reason,
wellb deal relief. Yet to seal the deal, but certainly some sort of an agreement coming from across the aisles. We'll see whether that manages to push through and we avoid the vault here in the United States that really affected the crypto market. Just take a look at where we were earlier in terms of bitcoin. We managed to rally. It was the highest in a couple of months actually, but we've now dipped back down. We're currently trading flat on the day twenty seven, six hundred and seventy two
is where we trade. But like dive into the micro because this is a day for microintech.
A lot happening in the newsflow, a lot around AI but.
Start with Tesla up pretty much at its high level in around two months four percent.
Elon Musk is in China.
In a statement issued by the Chinese government, Elon Musk is quoted as saying, Tesla against the decoupling with China and will continue to invest and grow its business in that market. The narrative around that boosting shares broadcome a really interesting move to the upside up four point seven percent. A couple of names out on the cell side boosting their price targets upgrading the stock because they see it as a beneficiary in the aihight cycle that's playing out right now.
In Nvidia.
Let's talk about in Nvidia, the stock absolutely staring up five point seven percent as well, one trillion dollar market cap, the first chip maker or semiconductor name to reach a trillion dollars in market value, the ninth stock ever to do so. It joins that exclusive club alongside Apple, Amazon, Alphabet, the parent of Google, and Microsoft one point zero two
to one trillion. As it stands, we'll see if we can maintain the current gains on the stock carriers we head towards the close, but it's a really big moment. So this company founded here on the West Coast nineteen ninety three. Jensen Wang, this founder CEO, has been out in Taiwan for the last forty eight hours or so, speaking often and really driving momentum around those shares. I want to bring in Blue Legs in King and talk more about in video because we actually got product announcements
as well. Right in What have we learned about in Vidia's latest offering in the field of AI?
Well, are you ready for the list? We've got a super chip, a supercomputer. I think at least two new data centers networking for AI to speed things up in the data center. I mean a number of tie ups. I mean the list goes on and on and on and on in terms of what they announced this weekend and over the last few days.
I mean he said it himself, didn't he it's too much. I know it's too much, but his sense of urgency, this run don't walk mentality. Is it only something an in video, a founder led business could do in the chip market. Are we seeing other announcements coming from other players in this respect?
I mean we'll see plenty of announcements for seeing, plenty of road maps, but nothing like the intensity that's being shown by this company. I mean, let's face it, we're at the beginning stages. If you believe in video, we're at the beginning stages. And there are a lot of problems, a lot of technical issues, a lot of fundamental design issues that need to be solved in order for this
to move forward. The company that's addressing these the company that's utually saying, hey, look, this is what we're going to do.
That's in video right now, I mean in video where it's at it feels like. But actually, when I turn on my terminal, everything was coming out of type A. Over the course of the weekend. You saw Qualcom trying to be in on the game. You saw so many other announcements pouring from this really important meetup.
It seems to be happening.
Yeah, you know, Jenson, I'm clearly taking advantage of gathering of minds. You know, he's kind of this rock Star figure now, leather jacket clad with his specs on stage.
Remember it's tattoo, the Invidia tattoo.
With the Nvidia tattoo on the shoulder. But like, how much does this story che changed?
Right?
The days of Elon Musk being the rock Star technology executive in a rover Jensen Wuang. I believe he was born in in Taiwan. He was educated here on the West coast. He's kind of really central to the story, and his own wealth is really ballooned.
Right, Yeah, I mean, you know, he left Taiwan when he was four years old.
He founded this company.
He still runs it and as Caroline said, this is it's him, right, he still runs it day to day. Everything revolves around him. And that's really you know, a company that lives or dies in terms of the direction that their CEO gives.
And there is news flow also from global not just chips makers, but chip designers in get us up to speed as to who took some of the other oxygen, the tiny bit that was left.
Outside of Tensen.
I mean, ARM were trying to make some announcements as well.
Yeah, ARM was with mobile related. Qualcomm was talking about, you know, mobile related. One of the things that Qualcom is saying is like, look, you can't do this all over wireless, over the Internet because data centers are too far away. If you want that instant response, if you want your chat GPT to actually tell you something meaningful in aful amount of time, when you're on the run. You need a phone that's capable of doing this. So
there's a lot going on. There's a lot of opportunities if you believe the hype.
Let's dig into the hype.
Next, Ian King, we thank you so much for giving us a healthy dose of what is reality and what is and let's look at the ultimate opportunity. Here is Zeno Mercer. Here's research analysts over at metify Robo Global Indices three point four billion dollars in assets under management, someone who's been quoted, been thinking of for decades in the world of AI and its applications and its investibilities.
You know, I'm interested in your perspective as to whether, really in Vidio is the pixel shovels you want to be and they were for it for crypto.
They've been it for gaming.
Is in VideA the really place to be when you want to be in a ground level for AI.
It's a great question, and thanks for having me on.
I mean, on one hand, of course, Nvidia has the picks and shovels, and they're not just picks and shovels. They're actually generating applications that are being used both enterprise currently and in recently B to B, so they're not just chips anymore, which is kind of making their own self fulfilling virtuous super cycle for themselves.
Yeah, however, no, yeah, we can pause.
Yeah, I mean just dig into the supercomputer element of all of this and what else is trying to.
Be Yeah, so they're getting into you know, they've got their omniverse where they're actually trying to simulate reality. There ass different you know, so that can be used for manufacturing, that can be used for proteins, and just generally helping simulate physics or at least empowering other companies to do that, which is very fundamental to improving any type of product design, designing cities, kind of any type of motion or physical interaction in the world.
World. It's not just this digital back end.
And language that people are excited about. The other ecosystems that they're going to be empowering alongside other players in the ecosystem, both infrastructure and you know, companies that specialize in those areas, such as physics, design, et cetera.
Just what's fascinating amid all of this, of course, ED is Yes, there's real application, there's real tangible need you and I playing with it on a daily basis. But you can't get away from the fact that what you're saying, this is a six hundred billion dollar overall market ed we've now got a one trillion dollar company on the back of this.
It feels like it's a valuation question, right that. The whole point of Roboglobal is to give investors, through different index and research, some exposure to developments in AI. But this is a stock trading at around two hundred times forward earnings.
Right now, that's a good point.
I mean, it's definitely run pretty far ahead of what it had been trading at. And if you think about what's happened over even the last year, you had a chip shortage with the supply chain, you had the chips as past, then you had people concerned about gaming and PC slowing down, and so last October the semiconductor market overall, even AI market had been that valuations had really dropped dramatically,
and now they're starting to pick back up. So kind of a year of a year basis, it looks a little less run up, ye if you will, rather than the dramatic drop off there. But the rest of the AI ecosystem a lot of these companies are definitely not trading anywhere near in videos levels, and you know, you'll look at you know, the Think Index for example, where.
We track infrastructure and applications.
It's trading more along the lines of six point five x ford ev sales and forty x price to earnings on a floor looking basis.
So that's a pretty dramatic step up.
And we think a lot of these other players are either smaller and not getting the same attention. Of course you're watching this dramatic one up within video, but some of them will also maybe they'll appreciate and see these earnings triple in over time.
Right, so you've got you know, cloud infrastructure.
Edge automotive areas are going to benef as more people deploy and utilized AI, not just.
In training but in practice. I kind of as what Ian.
Was saying was like having these edge compute on device with computer vision being able to do it, not just in.
The cloud like we're doing right now viewers or AI cloud, which will continue to be valuable and continue to be deployed.
But it's going to saturate and deploy and empower many other different parts of the ecosystem, not just you know, in Vidia and the chips like it needs other player to survive. It's not a standalone, single unit player in the economy and an economy where it is going to take even more percentage of GDP and potentially go GDP, there could be deflationary pressure in some areas, but those are some of the area That's kind of how we're thinking about it here.
At Grobo Global.
Let's let's bring up that terminal chart showing in Vidia's market cap for just a second. You look at the spike on the right hand side of the screen that is showing that outlook. They gave basically growth which was fifty percent above what analysts were expecting. What's the story here is, you know, what did you learn from Nvidia's outlook about the demand right now for its products?
I mean, it's really not surprising.
We've been expecting more demand and more interest to happen
for a while. It was more of when the the meander would shift over and what catalyst it would take, whether it was, uh, you know, autonomous vehicles, but in this case, it was getting AI out of kind of super enterprise research areas but actually into the hands of people where they're actually thinking business leaders are thinking, governments are thinking, hey, this is real and we need to figure out how to use this across not you know, every fastive society.
You know, healthcare in the US is very expensive.
You know, the US is thinking how can we deploy AI to improve healthcare outcomes, reduce medicare fraud.
And just kind of all these different areas where you're seeing issues.
This can be used to help solve and improve the processes and outcomes across all these different areas.
What's interesting, there's one player who thought and realized that in video was cool before many others was buying it in twenty fourteen and has missed this rally. And it's Kathy Wood because she's got some concerns about the business, about competition, about valuation. Just kin of listened to you know what she said to us on Friday.
In Vidia has become a check the box stock. That's where the valuation is where it is. But we are looking for those plays that have not only the vision from management team point of view and broad distribution, but also proprietary data and AI expertise.
So you know, where are you looking for opportunities? Who else can you buy in at a better valuation than is going to ride this AI wave.
It's a great question.
You know, I agree and disagree with their approach and her approach in one hand. Yes, data and software plays are great, they are amazing. It's not just the video I already mentioned in video is not just hardware anymore.
But there's lots of players.
You know, don't don't really like to dive into specific names, but if you look at companies like Simsara, they're helping digitize and analyze real world analytics the vehicles and fleets around the world for utilities, for you know.
Mining, like many different subsectors. So there's companies like that.
Uh, you know, there are other semiconductor companies like Global Unitchen which is you know, partially owned by Taiwan Semiconductor. They're trading you know, more like forty x I think, or fifty x for pe So and the and their A six are being used in AI. So I think there's more picks and shovels to the ecosystem than software.
Also, there's cybersecurity.
There's cloud and networking compute companies like Arista and pure Storage where you know, demand and utilization and AI will require more storage. Both in the cloud and and you know on on premise on device, especially as we get more in the mold modal AI, which is not just TX but video, well that's going to.
Require a lot more storage.
And you know, somebody like companies like Pure Storage haven't really taken off.
In fact, you know, she kind of like a temporary pain point. But you know it's hard to imagine that with this up tack and demand.
Uh, that's kind of kind of tail along with it and grow with the rising kind.
Yes, Cino massa robo Globo, someone that lives and breathes artificial intelligence and does so with a smile on their face.
Caroline, thank you for you your times.
You know, the company that gets a person in an autonomous vehicle from a point A to point B as quickly and safely as possible is probably going to get the lion's share of the market. And that company will in the United States, we believe be Tesla.
That was a part of our interview of kafy woodscussing Tesla and sticking with the EV maker. Elon Musk is in China for the first time since the pandemic, where he met with the nation's foreign minister and emphasized the importance of maintaining ties with China. Let's bring in Bloomberg's Global Auto's editor Cray Trudel for more.
This was a meeting with Ching Gang.
What were the key kind of messages that came out of Elon Musk's visits to Beijing.
Yeah, I think per your intro, I mean, that was one of the things that was sort of you know, universal in this readout from both sides, right, an emphasis on the need for US China collaboration. And it's sort of no wonder that that's a major point of emphasis on the part of the Foreign ministry, given what's been happening with chips, what's been happening with electric vehicle batteries.
You've had Joe Biden and other leaders, you know, really make a concerted effort to wean the global auto industry off of the reliance on China for batteries, which you know, the country just absolutely dominates supply of not only and
battery cells, but the raw materials and also chips. Right, a big emphasis on, you know, building up semiconductor supply outside of Asia, and whether it's in the US or Germany, and some real challenges on the part of whether Biden or ol Off Schultze in terms of getting companies to sort of agree to this change in approach.
Well precisely because well, he's not alone in an musk. You've had the Mercedes CEO, We've just heard from Mary Barrow of GM, You've heard from other companies saying these ties need to remain despite leadership from a government perspective thinking otherwise.
Yeah, and I think there is some sort of realism on the part of these government leaders of talking about de risking as opposed to decoupling. And I think there is going to be that sort of, you know, debate as to whether or not it is really realistic to
completely decouple us from China or Germany from China. And if you ask, you know, the CEO of Mercedes Benz, he says it's it's not realistic, right, So whether or not, you know, it's it's possible to really cut these companies off from this market that's been a huge source of profits for them, a huge source of exports. If you're if you're Tesla, you know this, after all, was supposed to be a plant in Shanghai that was going to be for the domestic market. But it's really turned into
this massive export base for Tesla to wear. Last year, you know, more than half of the cars they produced globally came out of that plant in Shanghai.
Craig on Kafiwidd's point on autonomy, I believe the Bloomberg's source has told us that Elon Musk may meet with Chinese Premierliche Yang on autonomous driving in particular.
Yeah, I think that's going to be a really interesting to watch play out because we've seen recently Tesla have to do a recall that they were able to address an over the air software update in China. There's obviously a lot of attention anytime Teslas get into any sort of safety issues in China, and to the extent that we start to see some of the same things that have happened in the US over the years of crashes, some of them fatal involving autopilot or full self driving.
You know, to this point that's really been sort of isolated to North America, and you know, Elon Musk, we know, really wants to sort of you know, make that more global technology that that Tesla is able to deploy, and to the extent that you know, the government is willing to go along with that is a big question I think going forward.
Great Dal thanks for keeping it global for us and all things elon Musk we thank you. Meanwhile, coming up, we're talking China. Some more lived off from China, how the country is narrowing the gap in the head to head space race in the United States, and this most recent launch, this is to bring back.
Time for talking tech.
First up, China making good on its goal for more prominence in the global space race, launching the Sheenzhu sixteen mission from a military controlled space center on Tuesday morning.
The Schanzo sixteen mission is sending three astronauts to the Chinese Space Station, including the first civilian, a professor at Beijing based Beihang University. It's part of Beijing's plan to have a continuous presence at its space station. The Chinese Space Station is just one of several achievements that China has made in recent years as it tries to catch up to the US and space China has a also landed a craft on the far side of the Moon,
the only country that's managed to do that. The next big project sending Chinese astronauts to the Moon a Chinese Space Agency official on Monday said the goal is to land on the Moon with a crude mission by twenty thirty. The US is also working to send astronauts back to
the Moon part of its Artemis program. The US is so far more successful than China in winning international support for its space plans, with two dozen countries supporting the Artemis Accords, a Washington backed agreement to regulate activity on the Moon and elsewhere in space. China is seeking more space allies and offering more access to things like the Hunzo sixteen launch could help by showing Chinese confidence in its space capabilities.
China's as it plans to send its astronauts to the Moon by twenty thirty, and Guita is expanding its presence in the US is it seeks to build a cheaper and less risky robot workforce for space missions. Fresh off raising thirty million dollars in funding, the Tokyo based startup told Bloomberg TV or we use the funds to recruit
engineers and further develop its robots. Guitars, robotic arms and rovers can remotely perform routine construction work ranging from solar panel installation to welding plus Noise, the Indian based maker of smart watches and other gadgets, is in talks for its first ever fundraising round. Sources say the Noise is hoping to raise forty to fifty million dollars to gain
dominance in India's fast growing wearables market. Last year, Noise accounted for more than half of the sales in the market, which screw forty seven percent overall thanks to its more affordable models.
Welcome back to bloom meg Technology. I'm Carolinehid in New York and.
Am Ed Lovelow in San francisc. We're going to check in on these markets. Carry I think some of the enthusiasm earlier in the session that was fueled by a I is kind of worn.
Off a little bit.
You look at the SMP five hundred, we're kind of flat in that main gage of US equities for outperformance in tex You look at then as that one hundred six tens and one percent. Some of the big movers to the upside are AI related. We'll get into that in just a second. Or the US tenure yield see kind of a pullbacking yield three point seven percent on the ten year treasury. Some of that around hopes that we will find resolution in the US debt ceiling negotiations.
And also quick look at Bitcoin that's trading at around twenty seven thousand, seven hundred US dollars Partoker, we're basically back to where we were at the end of March. We kind of traded it in this range of between twenty six thousand and thirty thousand US dollars over the last two to three months or so. In terms of single names, there is really only one story out there, which is in Nvidia hitting a one trillion dollar market cat the first chipmaker to do so. Only nine stocks
have ever hit that milestone. You see it up three point five percent, moving to the upside. Interesting to contrast with Alphabet, the parent company of Google, off by four tens of one percent, had been down much more significantly earlier in the session. This is another name that if you actually bring up a longer term chart, it has seen a run up and its shares fueled by its announcements,
particularly in the field of AI. Thinking back to when I was at Google Io and what they're doing in some of the other mediums beyond text like photo, images, video as well. So that seems to be some selling in inverse what we're seeing in a.
Video care well, great setup because we want to stick with exactly the alphabet family right now, turn to well YouTube you know you use it's got multiple platforms in the streaming era and look they're going to be disrupted and also embrace the world of artificial intelligence. So please to be discussing more of this with Lori Conkling, Wish's YouTube's global header, TV Films, Sports Partnerships. Wonderful to have you here in the studio, New York.
Thanks coming, very nice to be here.
L How much are you having this conversation with the media partners that you work with, with those within YouTube thinking how can you harness artificial intelligence right now to give us the comment we want.
So we're having many conversations as you would imagine, around AI and how it can be applied in the media space and in the sports world. We a YouTube have been using it for years in terms of matching content and recommending content, looking at our roadmap and how we really create that personalization. Our content partners have their own plans and we collaborate with them. Obviously all of us are being very responsible in our approach but we're excited about the potential applications.
And sharing that because you are, as you say in constant conversation with the media partners, would you ever give data to them? How do you think about the relationship and how it flourishes both of you at the same time.
So Google obviously has very strict privacy policies and.
We are always adhering to those.
They're negotiated as part of our contracts, and so we're sensitive to that, but we're also very open to optimizing experiences within those parameters.
Laurie good often into you. Good Morning, San Francisco.
When I think about YouTube, I think about content creators and bringing their content to the platform. But increasingly the questions we're getting asked from our audience on the show is what YouTube's going to use in the field of generative AI texts to images? Is that something that YouTube's working on.
So again, we're just exploring many different things. We see a lot of potential. We see potential with our own company, we see potential with our partners, and obviously YouTube is a composition of creator content, media content, music content, sports content, so there are many different partners that have ideas around it and again, it's ultimately all about the consumer and how we use technology in many different ways to optimize the experience every time they come.
To YouTube, Laurie, we always want to give our audience the opportunity to ask questions. So when I tweeted that you were coming on the show, there was a lot of interest from Twitter users about the recommendation engine. And when you think about sports highlights, live events, short form video, what are you guys doing around the recommendation engine driven by AI.
So a lot of what we do for our viewers is make sure that every time they come to YouTube, the format of content that they're interested in watching, as well as the business model that they'd like to consume that content under is available on our platform. So, as has been mentioned, we have ad supported video on demand, long form short form shorts, we have transactional VOD, we have pay television, we have primetime channels which we launched
last year subscription ad supported. So it's really about creating that ecosystem where every time they come they find what they want, and of course there's an algorithm that as people continue to visit frequently, that algorithm is able to know what they would be likely interested in watching, and that content will be served up.
I mean, that's why you're growing, while most live TV isn't growing, even Moffitt nathaness is, and I think shown in a light that YouTube is.
I'm interested in.
The reason also you're growing is the content you're serving NFL NFL Sunday Ticket in particular. How are you starting to lure in those people who want to be watching those sorts of games from DirecTV? Is it about the right price point? How are you deciding where you tackle those people for that content?
So many of those people have already been watching highlights and clips of the NFL on YouTube on our ad supported platform. What we're doing for the first time ever is offering Sunday Ticket under two different platforms. So on YouTube Maine you can buy it through primetime channels and you can also buy it through.
YouTube TV as an add on.
And under DirecTV's model, you had to be a DirecTV subscriber in order to purchase Sunday Ticket. You do not have to be a YouTube TV subscriber in order to purchase Sunday Ticket from YouTube.
You can do it off of YouTube.
What about the well, if people want to get inside information on their favorite players on basically the content creates that are out there surrounding NFO.
How do you think the world.
Of influences is going to meet suddenly the world of life TV and the way that you can probably bundle it.
So this is one of the areas we're most excited about because we recognize that creators are a really really interesting way to present sports content, TV film content, and in fact, with Sunday Ticket and with the NFL, we've seen a great opportunity to integrate. So at the NFL Draft we had thirty two creators there and do Perfect actually announced one of the draft picks, which.
Was very well received.
Our audience excus younger than other PayTV platforms, and that younger audience watches creators in addition to watching TV, film and sports content, So it's an integration that they embrace and it's a way for us to really bring all of the power of YouTube together.
Laurie our colleagues at Blomberg News reporting over the weekend that Apple Netflix are looking at the long term of MBA rights, and one of the things they reported is that Fox, for example, if they entered the FRAY, could be interested in offering a stream through someone else's platform. How does YouTube think about the NBA going forward.
So we are very very very strong partners with the NBA, again on platforms such as avod where we have clips and highlights, but also on YouTube TV, where we carry all of the networks that currently have the rights for the NBA. We carry NBA League Pass on primetime channels. We were the first streaming service to offer WMBA League Pass and offer that on a subscription basis to consumers, So we have that partnership in place.
You know.
Obviously we are looking to sports, as we.
Just discussed with NFL Sunday Ticket, as an opportunity to continue to deliver rights and games to are viewers who are very very sports centered. But at the same time, there's nothing you know, to announce in regards to rights discussions with the NBA, but we do value their partnership and we'll continue to keep our sports fans top of mind.
Those media partners that you now work with, you've worked for in your previous lives. You were the Disney with any I'm also noting that we're NBC Universal. What's interesting is recently a key executive of an NBC Universal has moved across to Go and had Twitter. Who do you see as your competition? You must have worked with Linda at some point. How do you see sort of this
ending up? Who will win out or indeed can everyone from an offering of sports, of content and the way that we want to be consuming it.
So basically, I think there's room for many platforms. And I did work with Linda, and obviously you know she has moved to Twitter, and there's value in the Twitter platform, There's value in the YouTube platform. There's value in Netflix and Disney, plus in all of these services. What I really like about YouTube is that we distribute many of these services and we make it easier for consumers to
find them and to transact on them. And so I think people are very interested in different types of content under different business models, and we always put the customer at the center of the equation. And it goes back to what I said earlier. If they come to YouTube and they want to watch any of that content you just mentioned from Disney or NBCUniversal on an ad support basis, we have that. If they want to subscribe to a
director consumer channel, we have that. If they want to watch a linear TV channel, we have that and so that is the value we bring to the media space that does have a lot of players who we consider to be great partners.
We want five million at least eyeballs as well, So that's one to watch. We thank you, of course said we want to give a piece of thanks as well.
Yeah.
Laur Conkling, YouTube, Global head of TV, Film and Sports Partnership. Also note Caroy like how many live events are being hosted on YouTube as well. You think about earnings calls right through to the events that Tesla and Elon Musk are holding ironically now that they are on Twitter.
Very interesting.
Now coming up AI's impact on the fintech space, we'll discuss all that and more with Cambrian Ventures Rex Salisbury.
That's next. This is Bloomberg.
Now.
In today's VC Spotlight, we take a look at the world of fintech. Well just kidding, I mean probably artificial intelligence. But we welcome Rex Sullisbury, general partner and founder of Cambrian Ventures, backing Findeck, founders, the Angel pre Seed and
Seed levels twenty million dollars in assets under management. Rex also founding member of Andresent Horwitz, a sixteen's owned fintech team back in the day, I said, just kidding, but actually, whether you're in fintech or not, AI is touching everything.
And anything right now. How's impacting the world that you operate in?
Absolutely, AI is definitely a big trend going on in financial services right now. But I want to talk about kind of separating the hype in the reality. I like to think about AI and financial services as.
A platform shift.
So we are now call it eighteen years into the transformation that cloud has had in technology. More broadly, cloud computing AWS. Two thousand and five, they launched a simple storage solution S three, their very first cloud platform financial service, very slow to a top cloud technology right.
Last year, JP.
Morgan announced their very first cloud computing partnership with thought Machine, a London based company. So that is to say, we will see a lot of adoption of AI within financial services, but it may take may take it.
Look at some of your Port Friday companies right, some of consumer wallets, some are B to B lending platforms. What is it that AI is doing, the changes they're offering, or the value proposition from your perspective, yet, to put.
It simply lets them build better software more quickly with fewer resources a lot like cloud did. With cloud computing, you didn't have to own the servers anymore. You could get a product in the market more quickly.
Now with AI, you.
Can use very basic tools like gethubs copilot to rate write code more quickly. You can also use it to do process heavy workloads, which for anyone who's closed to mortgage or done anything else in finance knows there are a lot of very heavy process flows within financial services. And having these new AI tools let you write more code more quickly to do more things at lower cost.
Will it therefore be more democratizing? From where these founders are coming from, Rex, Where do you look as it purely US, as it purely West Coast?
Are you looking internationally?
So?
I focus on the US, and I specialize particularly in B to B or business to business fintech.
But fintech is very much a.
Global phenomenon, and I think there is a tremendous amount of exciting opportunity for investors globally. As a solo GP, I tend to play towards my strengths, and I think the US also has a lot of opportunity remaining. We're one of the largest unified markets with a really rich
venture capital ecosystem. The Bay Area in particular has an incredibly deep set of networks and some of the best founders in the country I think tend to be out here, although I have back founders everywhere, so fintech very much a global phenomenon, but I am personally focused on backing the best US companies.
It's interesting, Rex, your model is basically taking checks from previous fintech founders, putting it into an overall fund to then go and see new ideas. How much more jostling is there in the very early stage to see the very early checks being written at the moment because people are more worried about writing large checks in this economic environment.
That's right, Caroline. I do focus on the preceed and seed. Now that's as stage that I'm very excited about because I've built out networks over decades, and you're right, we do have a bunch of founders who are investors or limited partners in the fund. My goal is to provide the founder's I support with access from the best networks in fintech. So we have founders from places like Plaid, Betterment so Far and other places. Sometimes they come along
as angel investors in the deals I'm investing in. Often they end up being advisors or just episodically engaged, provide a channel, partnership, connectivity, et cetera. One of the cool things about the fintech ecosystem is just how integrated and networked it is. Because it's highly regulated, you often need to have partners who are doing various aspects of the complete solution you're building out. So having access to great founders is one of the key differentiators that I bring
and then tends to benefit the portfolio companies. You had a question too about the extent to which it's competitive. So a lot of the multi stage firms have pulled back a little bit from the preceed and seed. I tend to focus very early on and I am intentionally a non lead investor and try to be very collaborative with other funds that may lead preseater seed rounds.
Rex.
How much of tailwind remains from svb's collapse for fintech.
Yeah, so I think for certain growth stage fintech companies, especially business banks, it's been a huge tailwind. If you look at deposit inflows to companies like Row and Mercury Mercury alans all about two billion dollars of deposit inflows just a few weeks after the collapse of SVB. For those of you who aren't familiar with SVB or their business banking footprint, they had about an eighty percent market share of tech enabled or tech startups. Now they pulled
out Mercury, which has about one hundred thousand customers. Most of their companies are also in the tech ecosystem, although they also support e commerce to other places. Now the biggest in company is out, and Mercury therefore is a great place for founders to go to to get access to great business banking services.
Camry Inventions GP and founder. We thank you Mike sels Free. Oh it's time now for what's going viral. Guess what artificial intelligence is? But it's the risks potentially, and this is being pointed out as potentially a risk of extinction. It's not coming from a conspiracy theorist. That's a warning from a group of industry leaders from Open Ai, Google, Deep Mind, other AI labs joining us now to weigh in on these concerns if they should be the ones
in the near term or not. Doctor Sasha Nuccioni research scientists that hugging Face which did not sign this latest letter coming from CASE, the Center for AI Safety. What do you make of these worries about longer term extinction visa some of the realities of AI right here right now.
I think it's a way of controlling the narrative.
So we should be talking about things.
Like legislation, things like the risks of bias, the ways in which AI is being used, maybe in ways that isn't very isn't very a good persons side at large, But instead of we're focusing on these hypothetical risks. And I think the comparison, especially to pandemics provokes a really
visceral reaction. So people really, you know, gets them in the gut when you compare things to COVID, and so we can talk about that instead and focus on that, instead of thinking about the things that are impacting our daily lives.
Sasha, when you look at the list of signatories to this latest letter or statement on AI risks, what do you think is their motivation for doing this?
I personally see it a bit as a magic trick, as misdirection, right. I care very very strongly about for example, data consent, for example, disclosing data sources, dis disclosing transparency and model documentation, and instead of focusing on that, we're being directed towards these unsolvable risks, right, because what can we really do if AI is a global threat to humanity?
What does that really mean?
And there was already a previous open letter about stopping all AI research for six months, which was equally unrealistic, I would say, And so I think that these companies are are kind of stalling, are stalling real regulation, are stalling real measures in AI deployment, in limiting how AI is deployed in society. So it's a bit of yeah, it's a bit of a hat trick.
You wrote a great op ed in Why back when that first letter by a different organization was put out, and you called the call to Holt dangerous. AI research ignores the simple truth ultimately, that simple truth being that you know that's you can't just halt it, but also the fact that you need to improve transparency in the here and now, accountability in the here and now, and developing guidelines in the here and now? Is anyone doing
that and you leading it? How do you see real impact being made in how AI is disrupting our life.
There's definitely a lot of people doing impactful work.
As as I looked.
At list this morning, I realized that none of them signed this letter. So the people working on AI ethics, on making sure that you know, predictive policing doesn't get deployed.
In across the world, things like that.
The people are doing very impactful work in this field, and they don't necessarily get their say in things, right. For example, when when the US Senate asks for experts in AI, they ask for for example, Sam Altman from open Ai, who has a vested interest in AI succeeding right.
And so we're really seeing.
A select people controlling the narrative and leading it towards this kind of existential risk, future risk, hypothetical risk. And the people calling upon the dangers of AI now and regulating AI and documenting and you know, transparency, they're not being given a seat at the table in many in many places, you know, I.
Think there are those out there that say, I've seen the Terminator films, and for me, that's the embodiment of the potential risk. I think your point, Sash, is that they're many more near term risks hugging Face research scientist Sasha Lucciani. Thank you, Caro, We're back together. But that does it for this edition of bloom Day Technology.
One fascinating conversation to end it on ED and Look, these AI conversations keep coming up. The short term impact, the longer term, the investing implications, the way it's up ending business models. Check it out on our podcast from New York from San Francisco, Thiss Bloomberg