Microsoft and the UAE's G42 | Bloomberg Technology
Hardware, innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. I'm Caroline Hyde at Bloomberg's world headquarters in New York.
And I'm Ed Ludlow in san francisco. This is Bloomberg Technology. Coming up, Microsoft to invest one and a half billion dollars in a UAE top firm. It's g 42 that says the US government pushes the Abu Dhabi business to end all cooperation with China. We analyze the business on 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 AI is all the rage in banker earnings and we digest a $250 million fundraise for a Silicon Valley chip developer reveals, which is yet to bring about its first product. We discuss the race for infrastructure and so much more throughout this hour. We focus, though, just on the public markets, which in the United States are relatively sanguine right now.
The Nasdaq 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 see in the US. But really what's happening 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 5% level. We're all eyes on Jay Powell, what he sees for the future of Fed policy when we still got such a resilient US economy and inflationary 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 1.7%.
We're at $62,000. So there's still some risk aversion in this market when it comes to certain risk assets. We'll look again on the micro. I'm continuing to look at Tesla. This is a two day chart. The stock down another 4%. We broke the news yesterday that the job cuts at Tesla will be nearer to 20%.
Elon Musk's memo said more than 10%. We will separate the story that Drew Baglino, an 18 year veteran and one of four named executives have resigned. He then confirmed it on social media. The milestone is that Tesla's now below $500 billion 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 name. Also, looking at Microsoft, up half a percentage point, had a slow start to the session.
The headline on news is the $1.5 billion investment in G 42. There's a back story which is you know, I've been looking into for a few months gee 42 really likes what Sam Altman and open they are doing. I think they want a piece of that they now have a relationship with Microsoft. I wonder if that helps. And the back story is a political one as
well. That G 42 is now safe for a US company to invest in. It's very complicated, but it's a name we're going to hear more and more about, certainly. And let's get straight to it. Microsoft and the deal.
Bloomberg's Dean 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, the move away from China store? So what about your Bloomberg reporting, including my other problems have been tracking for a while, is that there have been these behind the scenes secret talks between the US government and G 42. And what we reported last night is that that resulted in kind of a secret pact that was reached in which 40 agreed to divest from China. Remember, G 42 was under a lot of criticism from US government, from some members of Congress for its close ties to some Chinese companies, including far away. And they were under threat that they might not be able to continue to have access to the key and video chips that they need for their API work. This kind of, you know, secret pact resolves all of that and used the way that this Microsoft deal.
You. I think it's worth explaining to our audience what G42 is. It's essentially an investment firm. But in all the conversations I have, G42 comes up a lot in the context of the Sam Altman CHIP initiative. We've reported that, you know, Sam Altman is met with G42 that G42 wants to give him lots of money. But I don't think we've ever stopped and said, What's g42? It's essentially the biggest AI company in that region, the UAE, large parts of that part of the world. It's a holding company that's focused on
AI, but it has its hands in a lot of different parts of Asia. There's significant health care initiatives that it's working on in artificial intelligence. For Microsoft, this is a multi-stage deal and they want to take advantage of several parts of what G42 offers them, including Microsoft president Brad Smith told us yesterday In a later stage of the deal. They're hoping to put Microsoft services in G42 data centers and use that as a way to access markets in Central Asia and Africa, where Microsoft doesn't really have a presence, doesn't have its own data center. So that's another role.
The g42 ways of using this speed of cloud and AI into some of those regions where U.S. companies don't really have access. That's part of the reason why the Biden administration wanted to make sure that it removed G42 from the Chinese sphere of influence and got closer to US companies in the US technology industry. Bloomberg's Dana Bash. 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 Wedbush.
And Dan, you know, you covered this from Microsoft's perspective, but you've written a few notes about the bigger picture as well with what's happening with open air and infrastructure build out. Just give us your kind of scorecard on this Redmond, UAE, tie up. I mean, this is a massive strategic bet. It's another flex the muscles for
Redmond in the down because really for G42, they had a choice. China or U.S. and Redmond. And you're going to take Microsoft every day of the week right now, along with Nvidia and from Microsoft, it's just another doubling 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, they know they're way ahead.
So what they're doing is they're putting the guardrails up really around the world. So any blind spot, Middle East being one of them. They're going to bet on the big horse right here. And they ought to be even had to divest the Chinese keys. Also making sure that within the Beltway, two or two area code, there's no issues there.
So for Microsoft, this is an example. They're miles ahead. They're just further and further gaining share from an AI perspective, given this A.I. revolution, where them all men, the golden child, they AI resides. Don 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 to much in the world of AI.
Will this be regulated from a competition perspective? Well, I think what Brad Smith knows and as well as anyone, he's going to proactively Microsoft make sure us and Beltway are good with this because they don't want all of a sudden a year, 18 months, and that this becomes a bigger issue. And they checked all those boxes. The Chinese divestiture, I think, was important from a g42 perspective. And now it's a green light going ahead at the same time where Amazon and Google. So trying to play catch up and this is Nadella just continuing to make aggressive bets and we'll see it again, earnings where they continue to be the lead from an AI response 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 are we likely to see to try to see a solution globally for that? Yeah, and I think Ed nailed it. When you talk 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 in chip ventures that's now going on within open Microsoft. Of course, energy continues to be the constraint, but use cases are exploding across the board. And now this fourth industrial revolution here being led by Nadal and of course, the godfather of AI Jensen, a video. Love having the perspective deniers who
can make it a global conversation. We thank you from Wedbush. Meanwhile, let's just go to another key player that many and keep an eye on. Apple has 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 as it emerges as a global electronics hub. Apple is exploring ways to shift production, of course, of its covet gadgets away from China. That's to minimize those geopolitical
risks. And the iPhone maker is exploring India and indeed 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 joined by the European Commission of Financial Services to discuss all things digital finance and regulation there. Ed, I'm taking a quick look at shares of the Swedish company Ericsson. This is the Swedish shares, 2% higher.
As it stands, the US ADR is actually a little bit higher even still than that beat on earnings. And it's really interesting is the company going through restructuring at a time where the mobile phone or cell carriers are just not spending on 5G network infrastructure, but the market likes what it what it sees. Stock up 2%. This has been by technology. Okay. The European Union is 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 Maria McGuinness 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, delighted to be here in person. It's been a while since I was this side
of the country, so it's good. It's interesting the ongoing relationship between the commission and Silicon Valley based companies. You forget there are more than 400 million people in Europe who have access to these companies and their products. Just summarize the purpose of your visit and your objectives. Well, it's always good to meet
colleagues. 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, digitalisation. 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 and 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 while looking 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 Coinbase from the show with me last week, and they had a number of grievances, particularly about legislating for regular regulation instead of going through courts. What were the grievances they brought up to you? Well, in the context of Europe, the grievances are 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 Coinbase, 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 who need clarification. Commissioner McGuinness, Can I push back a little bit because I'm reading a report from Tether, for example, now nowhere near as much oversight as a previous business we're just talking about, but key player within a Stablecoins the player in Stablecoins many would say, and they've gone on the record saying the message being sent is that Europe does not want crypto regulation is 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 us and let things evolve banished 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 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 Commission is bear in mind, you know, the greater good. So is the balance of regulation better than allowing things evolve without any guardrails? Let's review those got regulated moment Commissioner. Apologies to drum pin, but the
guardrails, for example, they asked how much you think 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 a big question. Yeah, but it's such a big question that when you listen to some of the scary stories around, they are you would really want to stop it immediately. But it is not something that you can actually continue. What we can do is try and look in a measured way of what are the risks, because not only is high 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 like, in charge of watching these things like the commission and our parliament to have a say in how it evolves and we want it 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 talks to me on my 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 I think 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. You know, it is evolving before our very eyes. It is, Commissioner, and that's why you've got plenty of conversations still be had. We wish we had longer with you. All right. Well, it is wonderful to have you on the show.
European commissioner for Financial Services. Meanwhile, coming up, reports that raises more than $250 million in its latest funding round. It's a company trying to take on the likes of engineering, renamed with maybe a bit of a cheaper option. More on that next. This is pretty big technology. Rivas is a Silicon Valley chip developer without a product on offer yet, but it's raised more than $250 million in an oversubscribed funding round with Matrix Capital Management, the largest investor in the round.
Joining the board, delighted to bring in Revil CEO Puneet Kumar for more. This isn't a chip based on risk five architecture. I hear a lot about that at the moment as an alternative to NVIDIA, but let's go back to the idea that that is in design. You're in the R&D phase. That's correct. The 250 million, where does it get you? Okay. So first of all, thank you for having me
on the show. It's a it's an honor to be here. What we plan to do with this fundraise that we are announcing today is to really primarily support our increasing customers. We have huge demand coming at us, increase customers if you haven't got anything to give them 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 are going to do today is use this money that we have raised to expand our operations globally, increase our hiring, increase our engineering efforts, get to production of our parts and really get to trials. I hear increasingly there is a market
for risk five based accelerator here. It's a point of differentiation from NVIDIA and preparing for upcoming generations. But it doesn't seem like that markets 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 air drivers that they are using risk five and they're 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. For those who aren't as well versed in risk, five Buzz is our architecture breakdown. What alternative it offers. Is this about cost? Is this about ability efficiency? It's actually a combination of many factors.
Cost is just, you know, saving in licence fee, for example, rather than paying somebody else. But the 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 5 to 10 years and 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 free brings a Linux moment to instruction set architectures for CPU designs. Therefore, there is this hand-wringing going on about the access to infrastructure need for energy. We talked a lot about just the teaming up of Microsoft and G42 the the obvious global conversation going on around access to chips. Who would be your customer? Are you going after Nvidia's customers or are you going after ones that can't access NVIDIA? 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 any data driven business that needs more hardware support is our potential customer.
Now we know that the big three or four players in the market, obviously NVIDIA is the biggest. There's AMD, there's Intel and there's many other startups in the area that are building hardware for A.I.. We think the field is growing fast enough that we have ample opportunity to address any of the players who can't get access to inferior 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 if you were associated with a company, a semi, 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 out our product. Yes, there was a litigation and it is 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 to a year, come back when the product is ready to show. Absolutely.
All right. We're delighted to reveal CEO Puneet Kumar, thank you so much. Coming up here on Bloomberg Technology, going to break down all of those bank earnings we referenced earlier and what they told us about the story in the world of banking.
That's coming out next. From San Francisco, this is Bloomberg Technology. Welcome back to Bloomberg Technology. I'm Caroline Hyde in new York. And I'm Ed in San Francisco markets Kyra. Yeah, a quick check on them because we've seen perhaps a little bit more stability in the U.S. that you've seen abroad.
Certainly the Nasdaq 100 actually managing to turn green at the moment. The benchmark seeing a little bit of inbound as we await Jay Powell speaking a little bit later. All important for the bond market, which has seen a sell off earlier and two year yields near a 5% handle. But nevertheless, we see some money going back into big tech MSCI all country world index. So under pressure.
Europe sold off hard. So did Asia. In fact, playing a little bit of catch up to some of the risk aversion we've seen in the U.S.. Bitcoin off by 1.3% as the U.S. dollar just marches higher. What will we hear on the inflationary pressure from Power City 2000 and Bitcoin versus 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 9%. That revenue was up 24% for this particular fintech darling 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, Tesla off by more than 2%. You all reporting add front and center as they see executives lead and of course leave and indeed potentially as much as 20% had cut and cuts in certain areas the business. Netflix though your 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 analysts. Today we're at 620 for Netflix. But what are you looking at on other
earnings areas? Well, banks and banks are big. This Tuesday has been changing the game. I just want you to listen to a soundbite from PJM 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 front
line to make decisions. That's a very different use of technology than it was before. And I think that's very exciting. Let's bring in Glenn Beck Sonali Basak. The key Wall Street name Bank of America is what's moving in the markets and Jim's thoughts on the story.
And banks could have put it better than I ever could. 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 there's further investment in digitization of the bank would help bring their efficiency ratio down below 60%. And you had CEO Brian Moynihan say they're 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, Zelle transactions at Bank of America passed the combined number of checks written, plus the amount of cash withdrawals 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 cost savings not just for themselves, 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 CEO just 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. Isn't that fascinating because AI is almost a driver on both fronts. We got the cost efficiency. We've also got the fact that anything with air in its name is looking to go public at the moment or indeed try and spin that story. How much resilience is that coming from some of these CEOs playing catch up ultimately to Jamie Dimon, who seems to have led the pack when it comes to A.I.? Well, one thing that's interesting is you look at the bottom line here and you look at how much they're spending on technology. You have costs rising in every bank, particularly in terms of compensation, even with headcount falling. 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 costs 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. It's an interesting, though, Bank of America having its worst day since, well, the Silicon Valley Bank collapsed back in March 2023, which is all about money moving a bit too fast to everyone's pleasant relationships with it. Sonali Basak, we're pleased to have you on the show today to break down. Look, I in tech and banking and let's stick with that because over at Jefferies, I know a private Internet conference is on us shoulders. We've got Santa monica is where it's
being held. 500 tech leaders are going to be meeting to discuss guess what are emerging opportunities the next cycle, the growth in tech. Gaurav Kishor is with us. He's Jefferies Global, co-head of internal Internet investment banking joining us. And Gaurav, 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? 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 500 company company execs as well as investors in tech and in consumer tech in particular. This year we have a team around AI, as we 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. And I think there's two elements to this that we are looking for this week. One is the 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 perspective of new services as well as from taking out costs. And so that will be a big theme across both of those sectors. Do you expect M&A to be driven by this 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 late 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 companies, 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 are these trade valuations that, 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 is going to be really hard. So I don't think it's going to be a big
M&A theme from that perspective. I think it's going to be a big investment theme 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 2 to 3 years. Right. These could be household names very, very quickly. 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 names or names that needed an AI story, even if they had nothing to do with I.
What I'm interested from you is in attendance this week. What's the proportion of what you'd call genuine A.I. companies, builders of large language models versus those that just know in the shop window? They need the letters and AI to get some funding. Yeah, Yeah, it's a good question. You know, I would say probably about,
you know, 25, 30% 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 gleam and entropic and duckbill and live and labs and so on and so forth. Yeah, Quora and with Poe, AI, etc.. It's, you know, I first companies that's probably about 25 30% of it there. For the rest though there will this team is still front and center.
I'll give you examples you know we've got a number of companies in travel tech businesses like you know Hopper and a company out of Korea, you know, and so on and so forth. They're going to talk about how A.I. 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 will have, you know, companies on the music side and companies in fintech and in health tech. And this will be a big theme across all of those as well.
Gaurav Kita Jefferies, 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 Jefferies 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 are 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. Ticketmaster Ticketing Business. The Power of Taylor Swift, which has a 6.8%. This is Bloomberg Technology. You are looking at a live shot of the principal room. We are less than a month out from remote technology's live event in San Francisco. Check out the QR code for the details.
This is Bloomberg. Time for talking tech. First up, Google. DeepMind CEO Demis Hassabis says the company will spend more than $100 billion over time developing A.I. technology. The comment comes as Hassabis was also at an event in Vancouver about a potential $100 billion supercomputer dubbed Stargate, which is being planned by Microsoft and Open A.I., which was reported in the information last month.
Plus, crypto com is in the middle of a hiring drive that could see its headcount grow by a total of 1400 people. It's the latest sign of an improved employment outlook in the sector. Now, remember, Crypto.com cut a fifth of its staff in early 2023 to control costs. Following a market rout, the firm began
hiring again. Tokens including Bitcoin rallied rival such as Coinbase, Kraken and Binance have also been adding to their staff, and matter's oversight board is investigating the company's handling of AI generated deepfakes earlier this year. Sexually explicit Deepfake images of Taylor Swift flooded Facebook and other social platforms, prompting an outcry from the White House experts and other advocacy groups. According to a statement made by the board, It will evaluate whether two separate A.I. created images depicting nude women posted on Facebook should have been removed under matter's content policies. Caroline I want to focus a bit more on some of Metters business models and indeed what's been happening with our big tech today in the age of social media.
It's very easy to be deceived, but the latest scam is proving to be deadly. It's exploiting the shame and embarrassment of teenage boys. Joining us now, Fleabag's Olivia Covell. 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 individual stories, you make the story real. Jordan Dray 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, to me, 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 U.S., reaching out to them to try and elicit a nude photo from them to then blackmail them. This crime, sextortion, is now the fastest growing crime in the U.S. The FBI has been sending out pieces because, sadly, it's resulted in the suicide of more than two dozen teen boys, including Jordan Dumais and a guilty plea coming from two very young boys themselves. Ultimately, and you just adults in Lagos who are now here and 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 teens 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 investigating and prosecuting the criminals behind it. Ultimately, you're saying this is still growing. What more are stories are you 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. You know, they are 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 outside? So they're using artificial intelligence to do things like to speak to detect suspicious activity on the platform. Mixer 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.
And 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 air generated content on social media. Deepfake pornography.
And now this piece you talked about the efforts there, but also the challenges. Is there one outcome from your investigation since publishing this story that you can talk about anything that happened in response to your reporting? Well, I was surprised to see Mr. announced just last week that they're going to be blurring nude images since 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, you know, 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 image 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 urge everyone out there to go read your reporting and indeed the implications of it. Olivia Calvo, thank you so much for spending time with us today to talk through it.
Meanwhile, coming up, we're going to do a bit of a heart pivot. I'm sorry. It's never easy to do, but going back to the Jefferies Conference and we're going to be talking with the CEO perplexity. That's next. This is Bloomberg Technology. Let's get back to the Jeffries private Internet conference. One major theme, the theme is I perplex you.
I have been Sreenivasan is joining us now from that conference and perhaps see, 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 Jeffrey's? 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 it to be used by every person, every organization, and it always helps to spread awareness and then get more people excited about perplexity. There have been reports that you are now a $1 billion 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 when I was the last time here with you, the Jeff Bezos, around $120 million valuation. We haven't made an official announcement on a new round yet. We 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 are and what they see is like they are viewing us as like, Oh, I either use you or Google. They're still happy to use Google for
like quickly getting on to like a website. Like they didn't want to go to Bloomberg.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? Jeffrey So like, like who are the speakers at this conference that I should be aware of for my business? Like, these are things are what perplexities more useful for. So they are beginning to see us as a different to an answer engine that is very useful for directly coming in, asking questions and doing your research and our growth in the United States. Ever since we announced the funding round last time, along with you guys, has been 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. Yeah, that's beginning to show up in our numbers too. What am I, a business model? There's a lot of interesting talk of how well Google itself might start charging for its offerings within its enterprise. Are you seeing enterprise adoption for you and your thinking about charging? Definitely. We're considering it.
And there will be something which we will be sharing soon, something more than that. And the way I see it is like a lot of companies, a lot of people told me that, you know, I wish I could use perplexity at work, but my company is abandoned. Yes. You know, so that's a problem to solve and we are going to work on it. RV. What's the challenge right now for a company that is building lands and working at this level? What is your day to day that you're facing? I mean, the biggest challenge is honestly, the the pace.
I wish this field keeps changing every week, right? One point we were all the charity for is the motto. And it's like there's nothing else that matters. And everyone was like, Oh, you cannot build on top of them because, like, they're eventually going to do all the product and it doesn't matter.
There's no independence from owning the AI. And then Anthropic puts our clock three and the clock three is even better than before for at least the Opus model. And they're like models much better than 3.5. Cheaper, faster. Open source is moving fast. Databricks released a model.
The SEC better than 3.5. Mr. Housekeeper. It's just the pace and the pace of the show went too fast as well. We wish we had time with you. Our universe Perplexity CEO. Wonderful to have his thoughts.
Let's Bloomberg Technology.
2024-04-17 15:46
