X's Advertiser Problem and ChatGPT's One-Year Anniversary

From Mahart where Innovation, money and power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.

I'm Caroline Heine Bluemug's World headquarters in New York, and I'm Ed Ludlow in San Francisco.

This is Bloombay Technology.

Coming up full earnings coverage ahead salesforce and jumps after forecasting profit the top estimates and showing signs of momentum in cost cutting.

And Elon Musk says the advertiser boycotton X may kill the platform. Will break down his comments and look at the rollout of Tesla's cyber truck plus.

Today marks one year since the public rollout of chat GPT, bringing AI into the spotlight and sparking a wave of investment and hiring. Will dig in to what that one year anniversary red means. But first that's checking on these markets because while we're coming to the end of the month here and what a month it has been, but in the short term we just perhaps give off some of those profits. We see off about nine ten percent

The market had anticipated.

So they're already priced in the good news and maybe we sell the fact we'll look at the ten yure YELD actually just bouncing up a little bit after what has been a roaring November for the bomb market as well.

To It's been a really busy twenty four hours in the earnings context with Technology Snowflakes strong outlook boosting that stock up almost five percent. HPEU graded at Morgan Stanley which is adding to a two day rally. It posted results Wednesday night, you'll remember, but it is showing real strength. Then a thriller for you in the story's face, pure story is giving a weak sales outlook that really hammering the stock. And then elsewhere, big rival Newtoni's actually upgrading

Is this the Mark Benioff effect?

Is this him listening to the investors and acting while the stock seems to be reacting such that it is.

Yeah, I mean, look at that up more than six percent. Let's get to it with our own Salesforce reporter bringing Brody Ford, and.

It does seem to be this new era of cost discipline that really benefits Salesforce. Is there underlying revenue generation going on?

Hit to you, that's everybody's fear, right.

I mean, it was a year ago, about a year ago today that Salesforce said that their co CEO is stepping down. It kicked off as kind of unprecedented wave of chaos.

Right over the period of a quarter or two.

We saw executive resignations, activists, investors.

Taylor is right, right, but yeah, and ultimately though they raised their profits incredibly, it made people very happy, but then it made them very scared because then revenue growth started slowing down.

What we saw last night is that as long as revenue growth stays stable and profit keeps going up, well that's good enough for now.

Hey Brady, how does AI play into that story? I know it's something that any off flights to talk about.

Yep.

Yeah, so they're really big hope here with AI is that it can help bring revenue growth back up. That's immaterial for the current year, but they're hoping that when it comes to next year, it'll help, you know, upsell

Doomber's brady for busy earning season. For you covering Snowflake as well, Thank you very much, all right. The other top story. Ever since Musk agreed with an anti semitic post on his social platform X earlier this month, that was November fifteenth, the billionaire has been under fire Caro

Yeah, he's not apologizing to them.

He might be apologizing to the media, to the user base, to those that he feels have perhaps misunderstood his messaging along and certainly once again time and time again saying he's not antisemitic, but many will point to the way in which he interacts on his own social media platform as not being clear and consistent with that thought.

But putting to that to one side, the fact that.

He can basically bring Bob Iger's name into the conversation on stage explutive least as you say, and basically saying, look, you're the ones that are killing X. Meanwhile, I mean many would say is he the one killing X in the respect that it's his own actions that perhaps push away some of these advertisers, but also he's the guy who could perhaps sustain it.

He's got the money.

Yeah, I think you know.

There are the debt equation of Twitter and X and how he bought it. There are the equity holders in X, the platform formerly known as Twitter. That basically what he said, and it's fair to point out. On November fifteenth, he regretted that post, but he said he immediately followed up with the clarification that the media ignored in his words, and as for Bob Byger, he basically said, hey, Bob,

Yeah, and probably they'd been together in the green room perhaps before of that, because Bobbigo had been speaking at the same conference as well.

But all of this basically is noise around what.

Is going to be a big main event for one of his key companies, Tesla. We just referenced how some investors have been concerned about the way he's been behaving on his social media platform, and we want to be bringing in Craig Trudell now on the fact that actually what he wants to dominate the headlines today is a cyber truck unveiling RNE.

I don't think I'll have any trouble doing that. Of course, it's a pickup that made an awful lot of headlines going back four years now. Right, So, this was a truck that they showed very famously or infamously, I guess, depending on your view through the metal ball at the windows they cracked.

You know.

I think a lot of people.

Who were in the room sort of gasp when this truck was first shown and you know, some weren't really sure how serious it was.

It's dead serious.

It's finally ready for deliveries a couple of years late. But it's no question that this one's sort of a head turner and you know, sort of as polemic a vehicle as they come, you.

Know, Craig, the pickup category, be it electric, hall combustion engine, is just sacred in North America. And you know, donah Hole has written really smartly about how Musk has been signposting for like years that this is really ambitious, is not going to be easy to build.

Yeah, and I think she did a great story this week, you know, really drawing parallels between you know, this is their first pick up. They had a first suv years ago, the Model X. That there's a lot of similarities in the way Musk has talked about these two, you know, with the Model X, you know, he talked about, you know, regretting the fact that they sort of overloaded it with technology, and then he's gone on to say that he's overloaded

Craig, we thank you. Bliombo's craigtured all On.

Sam Altman is officially reinstated as CEO of open Ai, and it has a new initial board of directors, with Microsoft now joining as a non voting observer. All of this happening one year to the day after chat GPT was released and made it accessible to the public. Let's bring in Bloombo's Rachel Metz. Lots of news out overnight, and you had an interview with Sam Altman.

He did, Yeah, there's a lot going on at OPENINGI A lot of it is rubber stamping in a sense of things that we had already learned that Sam Altman is now officially back at the company as a CEO, and and Greg Brackman, who had been president, is also back at the company. Miramrati, who was very very briefly interim CEO, is now back as a chief Technology officer, and a bunch of other things that you just recount.

I'm a whole bunch of other things.

I mean, notably, Microsoft comes on as a non voting observer. Still a lack of diversity at the interim board level as we can currently see, but I'm interested that they are saying is certainly Brett Taylor was writing alongside some Mountman in a post that look, prepare yourself. We are going to be diverse, and we're also going to look into why any of this upheaval happen to begin with.

Yes, absolutely so on the first point, diversity and just enlarging the board. When I spoke to Sam yesterday, and also I got to speak briefly to Larry Summers, who's one of the new board members. They both said that they're planning to enlarge the board significantly. Wouldn't give a number on how many people will be in it eventually, but they're definitely planning to add people. Or as to the other point that you were making, now I'm blinking on what that was.

Go back now.

I mean, it's so what you have covered and the amount that you have covered over the last few days, no wonder you're going to be blanking. But really, Larry Summer's coming on board, many feeling is sort of like the experienced board director and himself thinking about the way in which this board can be expanded and thought upon. And he says, like, give us a minute. We've only been in the board of interim board for about half an hour. I think, what's the coak that he gave you.

Right? No, So, I started working with OpenAI back in twenty eighteen when it was still the nonprofit, and then in twenty nineteen it became the for profit. I've but I think as the company it's really almost only a year old because it was so formative in that time. Between twenty fifteen and twenty twenty two, most people hadn't

It's incredible to track how far we've come in the space of the year. But much of the last two events put the spotlight on what's to come next, the next generation of large language model on the board issue this is what Brett Taylor, whose interim chair of Open Aiyes Board, said, we will build a qualified, diverse board of exceptional individuals reflecting open ais message from technology to policy.

Yeah. I think what we saw in those two weeks, in these last two weeks was just that kind of tug of war on was between the two visions of what AI should look like. And there have been a lot of discussions about how much of that was just kind of a myth and outsiders reading things that weren't there. But it does seem like there are these two real philosophies about how quickly to move, and that the philosophy

And of course much of the hand wringing around AI and safety has been a worry about bias. That is why many people are saying, you need to have minor at the table. You need to ensure that all voices are heard. Here we re established at the interim board as it stands, looks pretty undiverse, one of them being Larry Summers the course, a paid contributor of Bloomberg. I'm interested as to what you think, Sarah will be the next situation. Will open AI be able to be as

Has to be a real goal and I think for them and in general, the diversity is not an end in itself, but it does give you different perspectives. Some of the early versions of AI really did, I think, warrant some criticism about bias and discrimination. So I think there is a lot of attentiveness to that. So it's important for that board to be able to read team

Sarah As, Professor of Government and Director of the Technolicy Institute at Cornell University.

Thank you so much.

This is Bloomberg Technology.

It's time to turn to the intersection of artificial intelligence and healthcare. Phillips is exploring the technologies potential in when of course, when it comes to wearables, imaging, hospital task automation.

We're pleased to welcome to the show.

Roy Yakovs is Phillips CEO, marking one year at the helm of the company, a company that is now fully focused on the medical use and healthcare applications, and AI is a key driver in that. Just tell us how already you're working with well the departments in some ways of those that are looking at tracking using an or ring or whether it be a garment watch, how are you already working with governments and indeed consumers.

So we are in un monitoring business.

We have a wrong collaboration where we can actually include all the data from any Apple devices or rings devices that you're using in the house or in the home to insert that into a patient context to understand how that actually makes a better diagnosis or full patient picture. Were also remotely monitoring in the home, for example, for cardiac rhythm problems to early pick up signals that can

So that's where AI can come.

To the rescue to really make a productivity difference.

I think of how I use my connected wearables, and some of that's to track my sleep. Now I want to shift gears a little bit because there has been a safety issue involving your dream Station two. This is about sleep apnea and the machine there. The FDA having a certain reports of overheating, worrying about fire smoke burns. There's also been other concerns around just sleep at near products. How are you tackling that as the CEO right now?

Yeah, when I came into the office, I said, first priority is patient safety quality, so I put a world class team on it to work through the challenges. We also said we need to get very proactive and identifying what is out here so that actually we can.

Address it and put the quality on up.

So it's about how we identify and then make sure that we across the company provide the best quality care and make sure that in the daily practices when we work with customers and in the context that they have, we can make sure that actually they can rely on our products, so that's something we have doing in our strategy. You also have seen that from the recent quarters we have been seeing quite an uptake in the performance of the company because we have.

Been able to start growing again. Now we have four quarters of growth. We have up the guidance twice.

But also that what's under the premise that basic safety and quality, supply chain improvements and simplification of the organization are really important to drive better impact for care.

Mister Jacob's good morning from San Francisco. That issue, the most recent was on the thermal issue of your current generation, but it's kind of brought back the discussion about the recall of two years ago over the polyphone deterioration.

There's a large body.

Of academic work that shows a latency in the cancers that arise from exposure to deteriorating polyphone periods of twenty to forty years down the road. Is Phillip's conscious of that latency.

So we have done extensive testing towards the health risk of degradation of the p perform. We've also come forward with our testing which actually shown that there's no peaceable harm from the usage of our devices. So that's something that we have done over three period with very strong evidence created together with the best scientific bodies, external bodies and toxicologists to make sure that actually we have no

The actives set aside one point one billion for remediation and half a billion for law suits. Is that sufficient or we have to add to that.

So we have been dealing with it. We call we made great progress. We actually have now we mediated the sleep patients and actually we are getting back into providing sleep products outside of the US to our patients. So we have provided for that that actually is also been sufficient to date. We took economic loss provision early this year that actually also will be evactuated next year. And then if you look to how we are getting the

Roy Jakobs, Solips CEO. Should we have more time? This is Bloomberg Technology.

Welcome back to Bloomberg Technology. Ed Ludlow here in San Francisco, cal and hired in New York.

Let's get a check on these markets, because halfway through this training day, look.

A little bit of profit taking.

Maybe after we come off a stellar month and as back had its best month since January, we're up about ten percent. We pull back a little bit, but not quite a percentage point, and then as that one hundred off by nine ten seven percent, we're seeing the bond market seeing significant action on the day at seven basis points.

But remember how far how fast.

We've come, basically the best month for the bond market since the nineteen eighties. And therefore you're seeing this sort of everything rally, risk assets pushing higher as everyone anticipates a federal's that just cools down on its rate hiking path, indeed starts cutting as soon as May. We're looking at what's happening in the risk asset of choice in the technology market, which is bitcoin. It's currently off by just about a tenth of a percent as the dollar just

Over g those are the public market moves. There are big moves in private markets. Big Series A together AI research driven AI company working for more open source models and data sets, just raised one hundred and two point five million dollars in a Series A round led by Klina Perkins. Other investors who've participated in the round, including Nvidia, Luxe Capital, Greycroft, and a few others you can see

What are you trying to build?

First? Thank you so much for having us here together. We believe open source is a big part of the ICs future. So what we've built is a very optimized out platform for buildings some data AI applications on open and custom models. You know, we provide APIs where if we have hundreds of models to feed packaged the user's going to use, and we provide for best in class tools to allow companies to build their models from scratch or take an open model and bap them with find doing for their purposes.

Bucky, it's a big check, a few checks for a series A. You know this space better than many you're taking on the hyper scalas and you're trying to offer something at a better price than they are. But you're confident that this gather AI can do that.

So you've been covering this space for a reason. This is a fundamentally new form of computing that is going to be as disruptive as internet and mobile and with respect it together like an OS basically absolutely and with respect it together. What we're seeing as enterprises are now leaning in and wanting to build on these open source and custom models, and to do that, they're going to need a platform upon which these models can run, and we think Together's that platform.

I'm interested from your perspective, what we like to categorize perhaps in the media is this tension between open source and closed models. And I mean, the open source movement is as old as software itself Forbell, but I am interested in the perhaps car crash of a story that we had a couple of weeks ago around open AI. Suddenly corporates are thinking about business continuity, about ensuring that perhaps they're not dependent on one particular LL and provider.

With corporates, I would say it certainly illustrates the need for a choice. You know, companies that are building the strategies around and radio AI want control of their models. They want to own the output of their efforts, and open source is.

It's a great way of doing that.

Okay, from your perspective, can be more resource intentive though, to sort of manage your open source code in some way. And I'm interested in how companies are really going to end up aligning when it comes to their own proprietary data and building on these open source models.

So, first of all, open source AI is really history repeating itself. Business has been leveraging open source in the form of databases and other core underpaintings of how they develop their software for decades. So again, this is history repeating itself. And in that sense, yes, there is some operational burden that a company has to take on to leverage open source relative to a managed service, but this

Vivo, You've got Nvideo as an investor, fantastic, but have you got them as a technology partners? You have a big old bag of h one hundreds that you can sling over the shoulder.

And call it a day.

Everyone wants that, right, you know, the other technology partner and Ridia is really a leading company the space. I would say they have the platform today for AI everywhere.

Well, what are there er options to you?

I mean, I guess considering what you're trying to build right the whole business offering from you, were there any alternatives other than Nvidia to get the compute needed to build a platform like that?

To day?

We get a lot about price performance. So the services we provide for our infant service are six times cheaper than Opening Eyes, our training services are four times cheaper than AWS, and we're able to do.

More times cheaper than AWS. Can you absolutely guarantee.

That, absolutely guarantee that yes. And this is both a combination of our hardware stack as well as the software that we have both on it make training and infence more.

Efficient, Buckie.

There has been much said about the hype dare we call it?

Around artificial intelligence? What draws you to a team like People's. Is it talent?

Is it what they've already been putting out there in terms of innovation? Isn't how they look there to be using a very large check that you've all managed to put together.

So Caroline, when we've thought through what it takes to emerge as the leading provider of platform infrastructure for all of these businesses who we believe will be leaning in on open source and custom models, we really think it requires this unique combination of systems engineering and research talent, and both of those have to come together in a world class way to really build that market leading product.

Fiple the money, what will be allocated towards talent? How expensive is talent at the moment and is it all being brought together to bear where you sit now over on the West coast or are you're looking more geographically?

You know?

The capital one we are going to do deep investments and product.

You know what as.

Keeper is saying, we have a very deep research effort. We have a research company. We invest a lot, you know, corea research to build better models, build better model architectures, build better data sets, and a little better platform. So that will be a known investment. And yes, I think the talent.

Market is you know, very tight today. But we have some of.

The sort of leading researchers in the space are our co founders and part of the company and that really helps bring together the research community and have them attached to the company.

But you always find interesting is the rationale of making investment based on what's put in front of you right with the greatest respects together. AI is not a massive company. How much weight do you put on the individuals they have? From a talent perspective, everyone's got GPUs. There are very few data scientists or engineers that can actually make them work from what I understand.

So look at this stage, startups are all about the people behind them, and this is a world class team. As I said, that brings together this unique combination of systems engineering and research talent that we think is the most potent combination to go and build a market leading company in this space. And that's what we're excited about here.

I just asked you both very quickly.

It is one year to the date day since chatjept was released. For Paul, how has the last twelve months changed or accelerated what you've tried to do in AI?

I think it has act beautiful a moment that made it very clear with a power of foundation models and their applicability, and that's really sort of you know, created a huge market around and interest in large and rated models.

Fascinating from both of you.

Always bucking more with your seeing around corners when it comes to infrastructure in the future thereof particularly when it comes to the world of AI. We thank you Kleine Perkins partner there and vivill Read Pracash of course CEO and co found together AI with that one hundred point to five million Series A. Meanwhile, coming up, let's talk about the social media and well got to think about

At I'm taking a quick check on shares of Meta down more than two percent. The whole market kind of took a weird turn at some point in the session. But the company plans to appeal a district court decision rejecting its attempt to block the FTC from modifying a twenty twenty settlement with the agency that required the company to update its privacy practices. Something that's playing out in court and drawing no cause or link, but it is

All right.

Time for talking at tech. First up, move over Ali Barber. It's lost its spot as China's most valuable e commerce company to Pinned wod Woe, best known for its opping apps Timu and pinned Woad wide. The eight year old PDD has gained more traction with investors, while growth for Jack Mars Ali Baba has softened. A big story of the week and if you're a fan of NASCAR, you'll

A former Sky CEO, carro.

Let's take a turn and talk about some of the other executives across the technology at large right now, but in particularly the CEO is a matter of ex a TikTok, a snap of disc They've all just been summoned dead by the Senate Judiciary Committee to testify at a hearing on child sexual exploitation that's now been given the date of January. This comes just a few weeks after Meta, of course, was sued by California group of more than thirty states have a claims that its social media platforms

I think what we're seeing right now is that we are absolutely at an inflection point, which is what you just described. Whether it's research that has been done by whistleblowers, researchers themselves, whether it's the lawsuits from ags, from parents, school districts, we are just seeing overwhelming kind of support for these platforms to take on much more responsibility, for them to be accountable to their actions, and for them

When we think of the testimonies, we think, if Judge von Rogers has allowed them to proceed in some way, many would say, actually, the decisions that they've made means that.

Much business model disruption won't happen.

The fact that the endless scrolling isn't going to be something that's focused on but it will be more about protection and ultimately oversight from parents.

Is that going to be enough? And how do you think if you think about.

The other side, what Meta and other companies would say is what we're building isn't wrong.

It's the way in which you mounted to use is it that is wrong?

How can we get a better balance between the two.

So I think the most important thing is to look at the incentives. Right These companies right now are incentivized to design their products with profits first. But we have tons of legislative solutions out there. We have COSA at the federal level that has over fifty bipartisan co sponsors. We have the Age Appropriate Design Code that's been in place in the UK was introducing California you mentioned Judge von Rogers. These solutions look at actually changing the way

Camille.

Your position, and it's shared by others, is that social media platforms are deliberately designed as pieces of technology to be addictive to children and teenagers.

Have I got that right?

Yes.

TikTok is an example, set out a policy in March. That policy was that you have to be age thirteen or a different age at least depending on local law restrictions to use the platform. Aside from legislation and the policies of companies like TikTok, what fixes would you recommend to safeguard teens and children? What technological solutions are there?

Yeah, this is a great question, and TikTok has this policy as well as Facebook and many other platforms. But what we're learning from many of these disclosures related to the Attorney's general investigation is, for instance, Meta actually knows that they have millions of underage users. They have millions of users under the age of thirteen, which is in violation of that are a law that they are collecting

In January, on January.

The thirty first, I believe a number of CEOs will go to Capitol Hill for a Senate hearing. When executives go before lawmakers. What is it that you hope comes out of public hearings like that? How does it move the agenda forward?

I think that this is a really big opportunity for policymakers to push these executives on the fact that they know they have users that are on their platform that are not supposed to be the fact that we now have evidence that they are intentionally designing products in ways

Camilla, I'm sure we will go forth to these companies' leadership and say as to how they have been responding, because I'm sure they'd like to say a response to us to all whether or not indeed they have been trying to make it more or less difficult for these sorts of things to be reported. But Camille Carston, we thank you so much for your insights the Center of Humane Technology, of course, and we'd.

Potentially like to be getting back ahead of that. January the thirty first up on Capitol.

Hill, Robin Hood's making its international debut, launching commission free stock trading in the UK. The firm has started rolling out trading of more than six thousand US listed stocks and other securities to British retail investors. CEO of vlad Tenev spoke to Bloomberg's Tom McKenzie.

So we have products for customers that who have low risk appetite for financial risk as well, and I think we can serve their needs. But I think there's two things we do exceptionally well in the US that carry over in the UK despite any cultural differences. People in the UK love easy to use, compelling mobile interfaces and they love getting the best possible economics on investing in other financial services. And I think these two things have

As crypto bottom do you think and is it what's still being in the crypto space given what's happened with the likes of Finance and an FTX, or is that an opportunity for robin Hood to take market share.

I think in the long run, it's certainly an opportunity and it's good for the industry to have unscrupulous actors weeded out and kind of falling off, because I think in order for the industry and the technology to become truly globally accepted, there has to be a foundation of regulatory compliance and it has to be integrated more and more into the traditional financial system and help solve real problems for people. So Robinhood continues to build crypto technology

How does it for this edition of Bloomberg Technology.

Yet Bloomberg Technology Podcast. Check it out wherever you get your podcasts. From New York City and SF. This is Bloomberg Technology