Billions Pour Into OpenAI, DeepSeek Ahead of IPOs

>> BLOOMBERG TECH IS LIVE FROM THE HEART OF SILICON VALLEY WITH ED LUDLOW IN SAN FRANCISCO. ED: THIS IS BLOOMBERG TECH. COMING UP UPDATES ON OPENAI'S TALKS WITH INVESTORS TO RAISE AT LEAST 30 BILLION DOLLARS, A VALUATION OF ABOUT ONE .4 TRILLION. THE UAE IN THE MIX. MORE FUNDING NEWS AS DEEPSEEK IS CLOSE TO SECURING AT LEAST 12 BILLION AND ITS LATEST ROUND AHEAD OF ITS OWN IPO NEXT YEAR AND WE HEAR FROM JPMORGAN CHASE CEO JAMIE DIMON ON DATA CENTERS, I RISKS AND A LOT MORE. THAT'S LATER THIS HOUR. OUR TOP STORY AND UPDATE OPENAI TALKS WITH MULTIPLE INVESTORS TO RAISE AT LEAST 30 BILLION DOLLARS. SOURCES SAY THAT INCLUDE SPEAKING WITH MULTIPLE FUNDS FROM THE UNITED ARAB EMIRATES TO HELP ANCHOR THAT ROUND. BLOOMBERG'S SENIOR TECH EDITOR MIKE SHEPARD JOINS US. SOME OF THIS IS NEW. >> SOME OF THIS IS NEW. ONE OF THE KEY PARTICIPANTS IN THAT WOULD BE THE ABU DHABI-BASED FUND MG ACTS WHICH IS LOOKING TO PLAY A SUBSTANTIAL ROLE IN THE SYNDICATE OF UAE BASED FUNDS THAT ARE LOOKING TO INVEST AS MUCH AS $10 BILLION IN THIS ROUND. NOW FOR MG ACTS THIS IS NOT THEIR FIRST RODEO WHEN IT COMES TO AI INVESTMENTS. THEY PUT IN THE PREVIOUS ROUNDS WITH OPENAI AND ITS RIVAL ANTHROPIC. THEY ALSO RAISE EARLIER AS 50 BILLION DOLLARS FOR AI INFRASTRUCTURE RELATED INVESTMENTS. THE KEY THING ABOUT THIS IS THE ROUND ITSELF WOULD TAKE OPENAI'S BOOK VALUE ON PAPER TO ONE POINT FOUR TRILLION DOLLARS THAT WOULD BE UP FROM THE ONE HUNDRED 20 2 BILLION DOLLARS RAISE THAT HAD IT AT EIGHT HUNDRED 50 TWO BILLION DOLLARS JUST BACK IN MARCH. ED: A LOT OF PEOPLE WHEN WE FIRST BREAK THE NEWS OF THE IDEA OF AROUND SAYING WHY WOULD OPENAI DO THIS. WHAT'S GOING ON WITH THE IPO WHEN WE FIRST BROKE THAT INITIAL REPORT LAST TUESDAY I WAS ABLE TO ASK YOU -- ASK THE AI CEO. THIS IS WHAT SHE SAID. >> WE DID ONE HUNDRED 22 BILLION DOLLARS RAISE IN Q1. THAT SITS ON THE BALANCE SHEET, THAT WAS RECORD-BREAKING. I WAS WANT TO MAKE SURE WE ARE WELL CAPITALIZED SO WE HAVE MAXIMUM OPTIONALITY’'S. WE ARE SUPER OPTIMISTIC. THE WORST THING WOULD BE NOT TO HAVE THE COMPUTE. ED: A PRIVATE MARKET ROUND IF YOU NEED TO. SARAH: ABSOLUTELY IF THAT BECOMES AN ISSUE. ED: SHE MAKES IT SEEM LIKE THIS IS THE INVESTORS PUSHING FOR PRIVATE MARKET ROUND. JUST CATCH US UP ON WHERE OPENAI IS AT WITH ITS JOURNEY TO THE PUBLIC MARKETS. >> THEY HAVE SLOWED THEIR ROLE UNLIKE ANTHROPIC WHICH SEEMS TO BE MARCHING CLOSER TO AN OFFERING AS SOON AS NOVEMBER BUT OPENAI HAS TAKEN A DIFFERENT TRACK. THEY DECIDED TO TAP THE BRAKES A LITTLE BIT. AND WAIT UNTIL AT LEAST NEXT YEAR BEFORE THEY GO PUBLIC. IT WAS INTERESTING IN HER COMMENTS THERE IS ALSO THIS QUESTION THEY WANT TO MAKE SURE THAT THEY HAVE ENOUGH INFRASTRUCTURE IN PLACE SO THAT PERHAPS THEY ARE READY ON BOTH SIDES NOT JUST WITH INVESTORS BUT ALSO THEIR ABILITY TO DELIVER AND TO KEEP DEVELOPING MODELS THAT NOT ONLY THEIR INVESTORS BUT CUSTOMERS HAVE -- OUT THERE CAN BE LOOKING FOR. INTERESTING COMMENTS FROM HER SEEING THE DEMAND ON THE INVESTOR SIDE BUT ALSO DEMAND ON THEIR OWN INTERNAL SIDE FOR FUNDING TO BE ABLE TO SUSTAIN THEM ALL THE INFRASTRUCTURE. >> THAT'S ON THE FINANCIAL NEWS CYCLE SIDE. TECHNOLOGY CONTINUES TO BE A RELEASE OF THEM IS A REFLECTION WHICH IS REALLY RELEASING AN OPEN-WEIGHT MODEL PAID WHAT WE NEED TO KNOW. >> THEY PUT OUT THIS NEW MODEL AND IT IS SOMETHING THAT THEY SAY COMPETES WITH SOME OF THE BEST OFFERINGS FROM RIVALS IN CHINA INCLUDING GLM 5.2 FROM C. AI WHICH IS ONE OF THE RISING STARS IN CHINA. CHINA'S MODELS LAGGED BEHIND THE U.S. AT THE VERY CUTTING EDGE, THE FRONTIER. BUT THEY ARE GAINING GROUND THANKS TO ADAPTABILITY AND AFFORDABILITY OF THESE OPEN-WEIGHT MODELS. OTHERS THAT WE TALKED ABOUT ON THIS PROGRAM BEFORE LIKE MOONSHOT, A DEEPSEEK. AND REFLECTION WANTS TO GET INTO THE GAIN HERE OF OPEN-WEIGHT IN THE U.S.. WE TALKED ABOUT COMPANIES LIKE OPENAI AND ANTHROPIC SO MUCH BUT THEIR SYSTEMS ARE PROPRIETARY. WE HAVE SEEN JENSEN HUANG THE CEO OF NVIDIA ADVOCATE FOR MORE BUILDOUT OF AN OPEN-WEIGHT SYSTEM IN THE U.S.. TO MAKE THESE OFFERINGS WIDER SPREAD BUT ALSO SOME SECURITY ADVANTAGES AS WELL. LOOKING TO BREAK IN THE WALL STREET JOURNAL SAYING IT'S IN TALKS TO RAISE 2.5 BILLION AT A $25 BILLION VALUATION OF THE COMPANIES FOUNDED BY TWO FORMER RESEARCHERS FOR GOOGLE DEEPMIND AND THEY'RE THE ONES TO WATCH AS THEIR OFFERINGS DEVELOP AND THEY ALSO HAPPEN TO LAND A SOVEREIGN AI DEAL THROUGH THE U.S. GOVERNMENT WITH THE REPUBLIC OF SOUTH KOREA RECENTLY. SO WE WILL HAVE TO KEEP WATCHING WHERE THEY TAKE THIS IN THE FUTURE. ED: BLOOMBERG'S MIKE SHEPARD THANK YOU VERY MUCH INDEED. LET'S LOOK AT TODAY'S BIG NUMBER , 12 BILLION DOLLARS HOW MUCH DEEPSEEK IS LOOKING TO RAISE IN A FUNDING ROUND ACCORDING TO SOURCES. BLOWING PAST ITS ORIGINAL TARGET. AS IT PREPARES FOR AN IPO NEXT YEAR WHICH COULD BE ONE OF CHINA'S BIGGEST AI DEBUTS LET -- YET. STARTING THIS DEEPSEEK PIECE, A VERY SIMILAR TO WHAT WE SEE IN OTHER MARKETS WITH BIG PRIVATE ROUNDS AS A PRECURSOR TO GO PUBLIC. >> TALK ABOUT INVESTOR DEMAND. DEEPSEEK WENT INTO THE MARKET AS WE REPORTED EARLIER LOOKING FOR LESS THAN $10 BILLION AND THEN AS WE WERE REPORTING NOW THEY FOUND STRONG INVESTOR DEMAND PUTTING MONEY INTO THE COMPANY THEY COULD NOW RAISE BETWEEN 12 BILLION DOLLARS AND $15 BILLION. SO VERY BIG FUNDING ROUND FOR THESE CHINESE COMPANIES. FIRST OF ALL THERE'S A LOT OF SUPPORT FROM THE CHINESE GOVERNMENT AND COMPANIES FOR THIS FUND RAISING. TENCENT THE BIG OPERATOR IS GOING TO BE ONE OF THE LEAD INVESTORS AS WE HEARD IN THIS ROUND. ALSO CATL IS INTERESTED IN INVESTING IN THIS ROUND. IT PROBABLY TELLS YOU DEEPSEEK WHICH IS LARGELY BEEN AN AI LAB AT THIS POINT COMING UP WITH SOME INNOVATIVE MODELS IT SEEMS LIKE THEY ARE DELVING DEEPER INTO BUILDING THEIR INFRASTRUCTURE. THEY WANT TO BE WHAT HAVE THE COMPUTE AND THE DATA CENTERS WITH SOME OF THE BIG LABS LIKE YOU WERE TALKING ABOUT WITH OPENAI AND ANTHROPIC. AND THEN I WOULD SAY NUMBER THREE IS THERE IS A DISCONNECT TO THE EVALUATIONS. IF DEEPSEEK RAISES THIS MONEY BUT TALK ABOUT A VALUATION OF $75 BILLION WITH OPENAI IF THEY REACH 1.4 TRILLION DOLLARS TALKING ABOUT 20 TIMES AS MUCH. CERTAINLY THERE IS A DISCOUNT IN THE CHINA MARKET MAYBE SOME INFLATION ON THE U.S. SIDE BECAUSE THOSE COMPANIES DO COMPETE WITH EACH OTHER. ED: A LOT OF THAT ANALOGOUS WITH MOONSHOT CLOSE TO PRIVATE MARKET ROUND WE'VE BEEN REPORTING ON FOR QUITE A LONG TIME. NOW WE HAVE THAT NOTE -- THOSE PLANS TO TAKE THE PUBLIC MARKETS. PETER: MOONSHOT SURPRISED INVESTORS WITH THIS MODEL THAT CAME OUT IT WAS VERY COMPETITIVE OF SOME OF THE MODELS IN SILICON VALLEY. AT THE BEGINNING OF 20 20 SEVEN. THAT'S ROUGHLY TO BE AROUND THE TIME DEEPSEEK IS SEEKING TO RAISE MONEY IN THE IPO MARKET. SO YOU'VE GOT TWO OF THE LEADING AI LABS FROM CHINA GOING INTO THE PUBLIC MARKETS AIMING FOR NEXT YEAR MAY DEPEND ON WHAT WE SEE IN THE U.S. OFFERINGS. WE WILL GET ANTHROPIC ALMOST CERTAINLY BEFORE THEN. PROBABLY NOT GETTING OPENAI AT THAT POINT WE'LL HAVE THESE TWO COMPANIES GOING INTO THE MARKET TESTING THE APPETITE FOR INVESTORS. THE BUSINESS MODEL IS VERY DIFFERENT HERE FOR THE OPEN SOURCE MODELS AS YOU WERE TOUCHING ON EARLIER MUCH LESS PROFITABLE AT THIS POINT. MUCH LOWER REVENUE BUT IF YOU LIKE AN OPPORTUNITY TO GROW AND EXPAND GLOBALLY. ED: SO MOONSHOT AI LOOKING TO HONG KONG FROM PUBLIC MARKETS DEEPSEEK IT LOOKS LIKE MAINLAND CHINA. PETER: THAT'S PROBABLY THE CASE AT THIS POINT. MEETING TO DO SOME INTERNAL RESTRUCTURINGS TO BE ABLE TO PROCEED WITH THOSE IPO'S BUT THAT'S THE PLAN THIS POINT. SOME OF IT HAS TO DO WITH THE INVESTOR BASE. YOU'D WANT TO GO PUBLIC IN HONG KONG. IF YOU HAVE THESE CHINESE COMPANIES INVESTING YOU WANT TO GO PUBLIC IN THE MAINLAND. ED: COMING UP, GOOGLE GOES NUCLEAR BUT THE TECH GIANT STRIKES A MAJOR NEW POWER DEAL TO FUEL AI'S BOOM. WE HAVE THE DETAILS NEXT, THIS IS BLOOMBERG TECH. ♪ ED: GOOGLE MAKING A BIG BET ON NUCLEAR POWER TO FUEL THE AI BOOM. STRIKING A DEAL WITH CONSTELLATION ENERGY WITH HELP ON 900 MEGAWATTS OF ADDITIONAL NUCLEAR CAPACITY AND MORE THAN 4 BILLION DOLLARS IN UPGRADES ACROSS 11 REACTORS. THIS IS REALLY INTERESTING A LOT OF EMPHASIS ON THIS BEING NEW CAPACITY. CONSOLATION IS FRONTING A LOT OF THE INVESTMENT NEEDED HERE EXPLAIN THE DEAL. >> THERE IS A SIGNIFICANT NEED FOR NUCLEAR POWER. IT FEELS LIKE EVERYDAY YOU READ STORY ABOUT DATA CENTERS UP AT THE POWER THEY NEED. WE ARE SEEING TECH GIANTS MAKE THESE LARGE BETS ON POWER AND THERE'S ONE THAT A LOT OF PEOPLE SEE AS VERY PROMISING. ITS EMISSIONS FREE, HELPS AVOID THE BACKLASH WE ARE SEEING AND POTENTIALLY TO COME ON QUICKER THAN GRID CONNECTION. SO THIS IS THE LARGEST TECHNICAL BUILD I'VE SEEN. IT SHOWS DATA CENTER POWER DEMAND IS INSATIABLE. >> YOU'RE FAMILIAR WITH THAT IN PART BECAUSE THEY DID A DEAL WITH AMAZON WHICH WASN'T QUITE AS BIG. BUT THE DEAL THAT THEY DID WITH MICROSOFT FOR EXAMPLE THREE MILE ISLAND IN AGGREGATE WE ARE SEEING THE HYPERSCALERS GO RIGHT TO POWER GENERATORS AS OPPOSED TO THE GRID. IS THAT A FAIR SUMMARY? . >> THERE'S A LOT OF PRESSURE TO ADD NEW CAPACITY ONTO THE GRID. THE BIG KIND OF TALKING POINT AGAINST THE TECH GIANTS IS THAT THEY ARE SUCKING UP POWER AND EVERYONE ELSE WANTS IT. SAYING WE'RE ADDING ALMOST A GIGAWATT OF NUCLEAR CAPACITY INTO AMERICA'S LARGEST GRID THIS IS IMPORTANT FOR THEM FUNCTIONALLY BUT ALSO RHETORICALLY. >> WHAT OTHER DEALS HAS GOOGLE DONE APART FROM ONE THAT'S BEEN ANNOUNCED THIS MORNING. BRODY: I HANDFUL OF NUCLEAR DEALS YOU'VE ALSO MENTIONED MICROSOFT. SUPPOSED TO COME ON NEXT YEAR. WE ARE SEEING A CONSTANT INFLOW OF THESE POWER PURCHASING AGREEMENTS WITH CAPACITY TO THE GRID. THE BIG BACKLOG RIGHT NOW IS SPEED IT'S HOW CAN YOU GET THE POWER GOING. SO BY UPGRADING EXISTING NUCLEAR SITES IT SEEMS THE BET IS QUICKER THAN SOME OTHER METHODS. ED: CONSOLATION WILL SPEND MORE THAN FOUR BILLION DOLLARS ON THIS. WHAT WILL GOOGLE SPEND? BRODY: PRESUMABLY MORE THAN THAT. PRESUMABLY THE CONSOLATION WAS A PROFIT MARGIN. GOOGLE WOULD SPEND OVER A BILLION I THINK WITH WHAT WERE SEEING IN THE ANNOUNCEMENT. >> ANOTHER NEWS ITEM NASA IS LOOKING TO LOCK IN PUSH FOR PERMANENT BASE ON THE MOON. THE AGENCY PREPARING BULK PURCHASES OF LAUNCHES POTENTIALLY BUYING FOUR FIVE ROCKETS AT A TIME AS IT FACES A LOOMING SHORTAGE AND SPACE X BEGINS PULLING BACK FALCON 9 AVAILABILITY BEYOND 2028. NASA NEEDS HAVE YOUR LAUNCHES IN 20 20 NINE TO DELIVER EQUIPMENT FOR ITS $30 BILLION LUNAR BASE EFFORT. COMING UP WE WILL BE JOINED BY EMILY BENDER OF UNIVERSITY OF WASHINGTON AND LONGTIME AI LLM CRITIC TO BREAK DOWN THE REAL RISKS ASSOCIATED WITH THE AI RACE. THAT'S NEXT, THIS IS BLOOMBERG TECH. ♪ >> OPENAI IS APOLOGIZING TO AUSTRALIA AFTER AN AI AGENT ACCESS TO GOVERNMENT WEBSITE IT WAS NOT SUPPOSED TO AND THE GOVERNMENT WAS NOT TOLD FOR MONTHS. THE BREACH PUTTING ACCOUNTABILITY IN THE SPOTLIGHT. >> REPRESENTATIVES FROM ANTHROPIC MICROSOFT GOOGLE ALL COMING HERE TODAY FOR THE SELECT COMMITTEE ON ARTIFICIAL INTELLIGENCE. THE STAR OF THE SHOW WAS JASON QUAN. THE CHIEF STRATEGY OFFICER FOR OPENAI AND HE BEGAN HIS TESTIMONY TO THE COMMITTEE WITH AN APOLOGY FOR A DATA BREACH THAT HAPPENED IN JUNE. >> I WANT TO BEGIN WITH AN APOLOGY. DURING INTERNAL TRAINING AND EVALUATION OUR MODELS ACCESSED AUSTRALIAN GOVERNMENT WEBSITES IN WAYS THEY WERE NOT DIRECTED TO. THAT SHOULD NOT HAVE HAPPENED. WE ALSO SHOULD HAVE HANDLED OUR RESPONSE BETTER. WE ARE SORRY AND WE KNOW WE HAVE WORK TO DO TO REBUILD TRUST WITH THE AUSTRALIAN PEOPLE. >> BACK IN JUNE OPENAI AGENTS MANAGED TO A NONPUBLIC FACING STATISTIC SITE BUT ALL OF THAT WAS UNTIL SEPTEMBER 10 THE AUSTRALIAN GOVERNMENT DID SO VIA EMAIL. AND HE WAS ASKED UNDER QUESTIONING IF OPENAI HADN'T TOLD THE GOVERNMENT WHETHER IT WOULD STILL KNOW. HE SAID THERE WAS A REASONABLE PROPOSITION. ANOTHER QUESTION HE CONFIRMED SAM ALTMAN THE OPENAI SEE A NEW ABOUT THE BREACH WHEN HE SPOKE WITH THE AUSTRALIAN DEBBIE PRIME MINISTER IN SEPTEMBER AS WELL. THERE WAS NO PERSONAL INFORMATION OR DATA LEAKED DURING THAT BREACH BUT IT DOES UNDERSCORE THE RISKS INVOLVED. JASON QUAN AND THE OTHER REPRESENTATIVE'S OF AI COMPANIES HERE THAT EXPRESSED A WILLINGNESS TO WORK WITH THE GOVERNMENT ON THE LEGISLATIVE FRAMEWORK. ALSO ASKED IF THERE WERE ANY JURISDICTIONS THEY CAN COPY WHEN IT COMES TO DOING THIS. POINTING TO THE UNITED STATES SAYING IN THE U.S. THE PLAN IS TO GET THESE MODELS INTO THE HANDS OF TRUSTED ACTORS IN THE GOVERNMENT'S FIRST BEFORE THEY ARE RELEASED TO MORE PUBLICLY AND SUGGESTED THIS WAS A MODEL AUSTRALIA IS A U.S. ALLY AND A FIVE EYES PARTNER AS WELL. THIS HEARING AT THE END OF NOVEMBER IS LIKELY TO BE LEGISLATION IN 2027. THE GOAL FOR AUSTRALIA IS TO MANAGE THE RISKS OF THIS TECHNOLOGY WITHOUT CRUSHING THE OPPORTUNITIES PROVIDED BY IT AS WELL. PAUL ALLEN, SYDNEY. ED: THE HEARING HIGHLIGHTS A BIGGER QUESTION ARE WE FOCUSED ON THE RIGHT AI RISKS. OUR NEXT GUEST SAYS THE DEBATE IS TOO OFTEN DOMINATED BY DOOMSDAY SCENARIOS AND EXTREMES, DISTRACTED FROM HARMS THAT ARE ALREADY HAPPENING. JOINING US IS THE DIRECTOR OF COMPUTATIONAL LINGUISTICS OF THE AND AUTHOR OF A NEW AI CONQUERED HOW TO FIGHT BIG TEX HYPE AND CREATE THE FUTURE WE WANT. WHAT ARE THE RIGHT RISKS PROFESSOR? >> THERE ARE SO MANY RISKS AND MANY HAVE BEEN TALKING ABOUT THEM AND DOCUMENTING THEM FOR YEARS. I WANT TO START OUT BY POINTING TO THE ENVIRONMENTAL IMPACT IN THE ENERGY PRODUCTION BUT ALSO WATER USE AND THE PRODUCTION OF THE CHIPS WITH DATA CENTERS. I WANT TO POINT TO THE DEGRADATION OF OUR INFORMATION ECOSYSTEM NOW THAT IT'S CHEAP FOR PEOPLE TO CREATE FLUENT LOOKING TAXED AND POSSIBLE LOOKING IMAGES THAT HAS HUGE HARMS. AND I WANT TO POINT TO THE GIGE FIXATION OF THE WORKPLACE. SO MANY ARE BEING DISPLACED BECAUSE OF THIS MYTH THAT AI CAN DO THEIR JOB AND DISPLACED INTO JOBS WHERE THEY ARE PROVIDING THE BACK TOP FOR THE JANKY SOFTWARE. WE SEE CONCENTRATION OF POWER, THE MOTIVATION EXTENSION OF SURVEILLANCE SYSTEMS AND ON AN INDIVIDUAL LEVEL SEEING PEOPLE BECOMING DEPENDENT ON CHATBOT COMPANIONS LEADING TO A GRIEVOUS SELF-HARM. THAT IS NOT ALL THAT'S WHAT I CAN DO OFF THE TOP OF MY HEAD. ED: I WANT TO POINT OUT THIS IS COME UP THE PROGRAM IF YOU GO BACK TO JUNE, NVIDIA WAS TALKING ABOUT THIS DATA WHERE DATA CENTERS USE ZERO POINT 2% OF DAILY WATER USAGE IN THE U.S. AND THAT THAT IS A NUMBER THAT'S BECOMING DRAMATICALLY LOWER. UM --I THINK WE ARE HAVING THIS CONVERSATION IN THE CONTEXT OF THE ACTIONS AND AI CAN TAKE IN THE RISK PRESENTED IF THOSE ACTIONS ARE OUTSIDE OF WHAT WE INTEND THE AI TO DO. BUT RIGHT NOW THERE ARE LOADS OF CASE STUDIES LIKE AUSTRALIA. EMILY: THAT IS WHERE THE DOOMSDAY SCENARIO PEOPLE WOULD LIKE US TO LOOK BECAUSE THEY HAVE THE SHARED FICTION OF AI GOING ROAD AND THEN SOMEHOW IMPROVING ITSELF AND TAKING OVER THE WORLD. WHAT'S ACTUALLY HAPPENING HERE IS OPENAI AND OTHERS ARE CREATING AND RUNNING MALWARE AND THEN WHEN THEIR MALWARE ACCESSES THINGS IT'S NOT SUPPOSED TO ACCESS THEY SAY LOOK AT HOW CLEVER AND SCARY OUR SOFTWARE IS. INSTEAD OF SAYING WE DID THIS, THEY SAY THE SOFTWARE IS DOING IT AND THAT'S ALL THROUGHOUT THE REPORT. SO WHAT HAPPENED, OPENAI DESIGNED A SYSTEM TO HACK INTO WEBSITES AND RUN IT AND IT HACKED THOSE WEBSITES. THAT DOESN'T MEAN AN AI HAS GONE ROGUE. ED: WHAT'S INTERESTING ABOUT THIS IS THE WIDE-RANGING SCHOOLS OF THOUGHT ABOUT WHAT TO DO ABOUT IT AND ONE OF THOSE SCHOOLS OF THOUGHT IS IF AN AI BEHAVES IN THE WAY YOU JUST DESCRIBED IT IS BEHAVING ILLEGALLY AND THE LAWS OF THE LAND PROVIDE FOR ILLEGALITY FOR SUCH A BREACH. IN YOUR FIELD OF RESEARCH DO YOU SEE THAT TO BE THE CASE THAT IF AN AI WAS CONDUCTING AN ACTION THAT COULD BE DEFINED AS A LEGAL THERE WOULD BE SUFFICIENT SAFEGUARD IN PLACE TO ACT IN THAT? EMILY: THERE IS SUFFICIENT SAFEGUARD BUT IT'S NOT AN AI WHICH IT'S NOT THAT A PIECE OF SOFTWARE IS DOING SOMETHING ILLEGAL IT IS THAT COMPANIES ARE DOING THINGS THAT ARE ILLEGAL. OPENAI HACKED INTO HUGGING FACE AND THE AUSTRALIAN GOVERNMENT NOT SOME INDEPENDENT PIECE OF SOFTWARE. IF YOU LOOK AT THE PREVIOUS ADMINISTRATION WE HAD THE FTC UNDER LINA KHAN SAYING EXACTLY THAT THERE IS NO EXEMPTION FOR SO-CALLED AI IN THE LAWS. THE FTC REGULATES THE ACTIVITIES OF BUSINESSES IT DOESN'T MATTER WHAT AUTOMATION THEY ARE USING. ED: I DO WANT TO TALK ABOUT THOSE EXTREMES. WHETHER OR NOT AI PRESENTS AN EXISTENTIAL THREAT TO HUMAN LIFE AND YOU KNOW AS THE FORMER ANTHROPIC RESEARCH PUTTING A FIGURE ON IT. 10%, SAM ALTMAN'S POINT WHEN HE TESTIFIED BEFORE THE UN SECURITY COUNCIL WAS IT DOESN'T MATTER WHAT THE CHANCE OR PERCENTAGE RISK IS IT IS TOO GREAT EITHER WAY. IS IT IMPORTANT TO ACKNOWLEDGE THAT THAT THE RISK IS REAL? EMILY: THE RISK IS ACTUALLY FAKE AND THIS WHOLE DEBATE ABOUT PERCENTAGES I'VE YET TO SEE THE REPORTER WHO ASKED THE ANTHROPIC LEADER WHISTLEBLOWER WHERE HE GOT THAT NUMBER. I THINK THE NUMBER GIVES US THIS VENEER OF MATHINESS AND THEN SAM ALTMAN IS TRYING TO BACK OFF OF THAT. THIS IS ALL BASED ON SCIENCE FICTION AND THOUGHT EXPERIMENTS THAT COME OUT OF EFFECTIVE ALTRUISM THAT START FROM THE PREMISE THAT WE HAVE AN ALL POWERFUL SO-CALLED ARTIFICIAL INTELLIGENCE AND THEN SAY WHAT COULD HAPPEN THEN. THE PREMISE IS FALSE AND IMAGINARY SO IT DOES NOT MATTER. MEANWHILE WE HAVE REAL PROBLEMS THAT ARE BEING SWEPT UNDER THE RUG SO SAM ALTMAN SUGGESTING THAT AUSTRALIA SHOULD LOOK TO THE U.S. FOR HOW TO REGULATE THE STUFF IS BANANAS. WE ARE NOT DOING A GOOD JOB RIGHT NOW BECAUSE WE ARE LETTING ALL OF THE COMPANIES OFF THE HOOK. ED: WHAT BENEFITS AND NET POSITIVES DO YOU SEE FROM AI IN OUR SOCIETY? EMILY: SO BENEFITS FOR SYNTHETIC MEDIA BASICALLY NONE. THE KILLER APP FOR SYNTHETIC TEXT FOR SYNTHETIC IMAGES IS FRAUD. IF YOU WANT TO LOOK AT ALL OF THE DIFFERENT TECHNOLOGIES THAT HAVE BEEN SOLD AS AI SOME OF THEM ARE LEGITIMATE MEANS OF AUTOMATION. I WORK IN COMPUTATIONAL LINGUISTICS, LANGUAGE TECHNOLOGY CAN BE USEFUL TALKING ABOUT AUTOMATIC TRANSCRIPTION MACHINE TRANSLATION. SPELL CHECK BUT I THINK WE DO A WORSE JOB MAKING DECISIONS WITH THIS AUTOMATION WHEN WE CALL IT ARTIFICIAL INTELLIGENCE INSTEAD OF BEING SPECIFIC ABOUT THE TECHNOLOGY. ED: WHAT DO YOU THINK NEEDS TO HAPPEN HERE? AT THE END OF THE DAY YOUR AUDIENCE STILL ROUTING THE QUESTION TO BE REGULATE OR NOT. EMILY: I DO WANT TO SEE EXISTING REGULATION APPLIED. I'M VERY CONCERNED TO EXEMPT POWER PRODUCERS FROM ENVIRONMENTAL REGULATIONS FOR EXAMPLE. I WOULD LOVE TO SEE ANY COMPANY THAT SETS UP A SYSTEM WHERE PEOPLE CAN GO GET SYNTHETIC TEXT ACTUALLY HELD ACCOUNTABLE FOR ALL OF THE TEXT THAT COMES OUT OF THAT SYSTEM. I WOULD LOVE TO SEE EXISTING REGULATIONS ABOUT WHO CAN BE FOR EXAMPLE A DOCTOR OR PSYCHOTHERAPIST ACTUALLY APPLIED SO THEY DON'T GET SETTING UP SYSTEMS WERE CHATBOTS ARE SUPPOSEDLY PLAYING BY THOSE RULES. I WOULD LIKE TO SEE STRONGER PROTECTIONS FOR LABOR ORGANIZING BECAUSE A LOT OF THOSE, DOWN TO TECH COMPANIES SAYING WE CAN DO YOUR JOB AND IN THE WORKPLACE GETTING WORSE. ED: PROFESSOR EMILY BENDER OF THE UNIVERSITY OF WASHINGTON APPRECIATE YOUR TIME ON THE SHOW. ANTHROPIC HEADING TOWARDS ONE OF THE MOST ANTICIPATED IPOS IN TACT. WE HAVE AN INTERESTING CONVERSATION ABOUT PRIVATE MARKETS NEXT. HALFTIME IN SAN FRANCISCO, THIS IS BLOOMBERG TECH. >> WELCOME BACK TO BLOOMBERG TECH. TECH AT RECORD HIGHS. WE ARE ON WATCH WITH NVIDIA. >> HELLO, AND. WE ARE ON TRACK FOR YET ANOTHER RECORD. IF YOU THINK THE INDEX UNDERNEATH THE SURFACE. THE TOP WE WERE UP 13% AFTER THE COMPANY SIGNED A 20 YEAR AGREEMENT WITH ALPHABET TO PROVIDE NUCLEAR POWER. OTHER TOP MOVERS INCLUDING CHIP STOCKS, AMD, BROADCOM, AND NVIDIA. THIS STOCK IS ON TRACK FOR YET ANOTHER RECORD CLOSE AND THE LEVEL WE ARE WATCHING IS THAT IT IS ON THE WAY TO BECOMING THE FIRST COMPANY WITH A $6 TRILLION MARKET CAP. A FEW YOU THINK LIFTING THE STOCK TODAY. AND OVER THE LAST FEW WEEKS, SO IT HAD REALLY SOLID EARNINGS AND ANNOUNCED THE LARGEST BUYBACK ON RECORD AND IS BEING SEEN AS A SAFE HAVEN WITH YOURS AS HIGH AS THEY ARE SO ALL OF THAT SENDING INVESTORS BACK INTO SHARES OF NVIDIA, LIFTING THE BROADER MARKET AS WELL. BACK TO YOU. ED: THANK YOU VERY MUCH. LET'S GO TO PRIVATE MARKETS. ANTHROPIC IS HEADING TOWARD ONE OF THE MOST ANTICIPATED IPO'S IN TACT. IT'S ALREADY A MAJOR INVESTOR. A PARTNER ON THE PRIVATE OPPORTUNITIES FUND INVESTMENT COMMITTEE CAN HELP OVERSEE INVESTMENTS ACROSS SOME OF THE BIGGEST PRIVATE COMPANIES IN AI AND TACK AND I AM DELIGHTED TO SAY SHE JOINS US NOW. WELCOME TO BLOOMBERG TECH. LET'S JUST GO TO THE THESIS ON ANTHROPIC, WHAT YOU SAW AS THE OPPORTUNITY. EMMA: WE HAVE BEEN A BIG SHAREHOLDER WITH ANTHROPIC WHICH -- WITH BEING ACROSS THE COMPANY FOR THREE ROUNDS. I THINK WE GOT REALLY EXCITED WHEN WE GET THE FIRST ROUND LAST YEAR. ED: WHEN WAS THAT? EMMA: LAST YEAR, WE PARTICIPATED IN THE ROUND, OUR FIRST ENTRY POINT OVER THE SUMMER AND WE GOT REALLY EXCITED ABOUT THE PRODUCT MARKET THAT HAD DEMONSTRATED -- IT WAS ONE OF THE LARGEST MARKETS. THEY WERE VERY FOCUSED AND HAD CLEARLY DEMONSTRATED THEIR ABILITY TO ONBOARD ALL THE MAJOR ENTERPRISE CUSTOMERS. NOW FAST FORWARD TO TODAY, I THINK THAT THIS WAS ACTS ON OF THE ANTHROPIC -- ACT ONE OF ANTHROPIC. MOVING FORWARD, WE ARE REALLY THINKING FOR LARGE LANGUAGE MODEL ABOUT ACT TWO. OUR THESIS INTERNALLY IS THAT IT MOVES NOW TO PERSONAL AND ENTERPRISE OPERATING SYSTEM AND WHAT THESE COMPANIES ARE NOW GOING TO BE ABLE TO DO IS NOT ONLY SUMMARIZE INFORMATION, ADDRESS QUESTIONS, BUT REALLY TAKE ACTION AND I THINK IF WE WERE LOOKING INTO THIS, THEY DON'T NEED TO REPLACE EVERY SINGLE APPLICATION. WHAT THEY NEED TO DO, THEY NEED TO BE THE LAYER WHERE EVERY SINGLE TYPE OF WORKFLOW GETS DONE. ED: I WANT TO KEEP GOING INTO ACT TWO. ON THE ENTERPRISE SIDE, IT'S EASIER TO UNDERSTAND BECAUSE ANTHROPIC GOT A LOT OF CREDIT FOR THEIR EARLY MOVE IN THE ENTERPRISE. A MORE RECENT EXAMPLE HAS BEEN SALESFORCE. THROUGH CLAUDE, YOU KNOW, YOU COULD RUN CRM'S THROUGH CLAUDE. BUT YOU SAID PERSONAL. GROK BOT, MUSE. EMMA: WE WILL SEE BLURRING BETWEEN ENTERPRISE AND PERSONAL. WHAT IS PROBABLY MOST RECENT AND WORTH TALKING ABOUT IS TALKING A LITTLE BIT MORE ABOUT OPENAI AND DEV DAY THAT HAPPENED LAST WEEK AND I THINK ONE OF THE MOST ANTICIPATED OR MOST EXCITING RELEASE FROM DEV DAY WAS REALLY DOTS. WE ARE STARTING TO SEE PERSONAL AGENT THAT WE ALL DISCOVERED OVER THE LAST TWO TO THREE WEEKS REALLY ENTERING THE ENTERPRISE LAYER. I THINK ANTHROPIC TODAY, IF WE ARE LOOKING INTO IT, IT'S, YOU KNOW, AT T. ROWE WE HAVE A MAJOR PARTNERSHIP ON THE ENTERPRISE SIDE. WE WILL SOON BE ABLE TO USE ANTHROPIC TO TAKE ACTION FOR ENTERPRISE AS WELL. ED: YOU ARE A REALLY INTERESTING CASE STUDYING. NOT NECESSARILY UNIQUE CASE STUDY OF AN INVESTOR WHO HAS POSITIONS IN OPENAI AND ANTHROPIC. SO HOW DO YOU DISTINGUISH BETWEEN THEM? EMMA: I THINK WE DON'T NEED TO DISTINGUISH. I THINK THE FACT THAT HAS BEEN TAKEN BY -- BET THAT HAS BEEN TAKEN BY T. ROWE -- TODAY, IF WE ARE LOOKING INTO IT, I THINK BOTH OPENAI AND ANTHROPIC HAVE BEEN VERY WELL-POSITIONED. I THINK WE ARE VERY, VERY EXCITED ABOUT THIS ACT TWO BECAUSE WHEN WE ARE LOOKING INTO IT, I THINK DESPITE, FOR EXAMPLE, OPENAI'S 1.2 BILLION WEEKLY ACTIVE USERS, THERE'S PROBABLY ONLY A FEW PERCENTAGE OF THE ACTION USERS ARE TAKING THAT LEADS TO ACTION. ED: MONETIZE OF ALL ACTION, YOU MEAN? -- MONETIZABLE ACTION, YOU MEAN? EMMA: WHERE WE CAN SEE THE ROI WITH EFFICIENCY BUT ALSO COMPLETED TASK. AND WHEN WE ARE LOOKING A LITTLE BIT MORE INTO ANTHROPIC, ADDING WHAT IS SUPER EXCITING THERE IS EVERY SINGLE VERTICAL THAT THEY CAN TACKLE GOING FORWARD. I THINK ONE CHAPTER THAT ANTHROPIC HAS BEEN PUBLIC ABOUT AND I THINK FOR US IS CRUCIAL, AND WE ARE SEEING AS A MAJOR CHAPTER COMING UP IS REALLY AI FOR SCIENCE. AND I THINK WE ARE GOING TO SEE A LOT MORE HAPPENING IN THAT SPACE. ED: IN YOUR VALUE CAPTURE ROOM FOR TWO FRONTIER LABS. AND THEN ECONOMIC BENEFIT ACCRUES TO BOTH. EMMA: ABSOLUTELY. FOR US, WE DON'T SEE IT AS WINNER TAKES ALL. WE WILL SEE A FEW PLAYERS THAT CAN DOMINATE AND I THINK WE HAVE SEEN SO FAR THE POSITION FOR THAT WITH ANTHROPIC AND OPENAI. ED: IS THE EXPOSURE FROM T. ROWE TO ANTHROPIC AND OPENAI, COMPARABLE -- OPENAI COMPARABLE? EMMA: IT'S AMONG OUR LARGEST POSITION. THE OTHER ONE THAT IS OUT THERE IN SIMILAR SIZES IS DATA BRICKS. THOSE ARE BIG BETS WE HAVE BEEN DOING. ED: THE THINGS THAT THOSE COMPANIES HAVE IN COMMON IS THAT THEY ARE WAITING TO GO PUBLIC IN DIFFERENT STAGES. ONE REASON I WAS INTERESTED TO HAVE YOU ON THE SHOW IS LIKE THE GAMES KIND OF -- THE GAME HAS KIND OF CHANGED FROM WHEN I ARRIVED AT SILICON VALLEY. YOU SEE T. ROWE MUCH MORE OFTEN ON THE PRESS RELEASE, LEADING ROUNDS. EARLIER -- WHAT DOES THAT REFLECT? EMMA: T. ROWE HAS BEEN DOING PRIVATE INVESTING FOR ALMOST TWO DECADES. ED: OK. EMMA: BUT I THINK WE ARE REALLY DOUBLING DOWN OUR PRIVATE INVESTING PRACTICE AND I THINK AS WE ARE LOOKING INTO THE LANDSCAPE TODAY, A LOT OF WHAT IS HAPPENING AT THE FRONTIER OF AI IS STILL HAPPENING ON KIND OF PRIVATE MARKETS. WE HAVE ALSO SEEN OTHER NOTICEABLE TRENDS. FOR EXAMPLE, DEFENSE. ED: ANDURIL, FOR EXAMPLE. EMMA: ANDURIL IS ONE WE ARE VERY EXCITED ABOUT. AND THEN -- ON THE FINANCIAL SIDE IS SUPER EXCITING. I THINK AS WE ARE LOOKING INTO THESE COMPANIES, ALL OF THIS GROWTH IS ALL PRIVATE SO IF WE WANT TO ACCESS IT, WE NEED TO BE EARLIER IN THIS COMPANIES SO FOR US ENTERING THESE COMPANIES AT-LARGE SERIES, BUILDING CONVICTION, GETTING TO KNOW THE MANAGEMENT TEAM, HELPING THEM THROUGH THAT TRANSITION AND GETTING THEM ON THE OTHER SIDE OF THE BREAK IPO AND BEING A BIT MORE LONG-TERM -- OF THE IPO AND BEING A BIT MORE LONG-TERM, THAT IS WHERE WE CAN DISTINGUISH AND PROVIDE VALUE TO THESE COMPANIES. ED: THEY HAVE FILED CONFIDENTIALLY. DATA BRICKS, EVERYONE IS WORRIED ABOUT. GENERALLY, YOU THINK ABOUT CASE STUDIES, HOW DO YOU KNOW WHEN THOSE COMPANIES ARE READY TO GO PUBLIC? AND WHAT IS T. ROWE'S ROLE IN ADVISING A PRIVATE INVESTOR ON THE CAP TABLE? EMMA: THERE IS A MISCONCEPTION SOMETIMES THAT IF YOU TAKE MONEY FROM T. ROWE, YOU ARE GOING TO BE PUSHED TO KIND OF GO PUBLIC AT ONE POINT IN TIME. I THINK FOR US, WE ARE PATIENT CAPITAL AND I THINK WHAT WE WANT TO BE DOING IS BACKING GENERATIONAL COMPANIES AND ENSURING THAT THEY ARE IN A POSITION WHERE THEY CAN CHOOSE THEIR OWN TIMELINE AS TO WHEN THEY ARE READY FOR PUBLIC MARKETS. AND THEN I THINK IF WE ARE LOOKING INTO A LOT OF THESE COMPANIES, MANY OF THEM ARE READY TODAY SO IT'S MORE OF A DECISION OF THE MANAGEMENT TEAM AS TO WHEN THEY THINK IS THE RIGHT TIMING WHEN WE CAN SAY ON OUR SIDE, THERE WILL BE DEMAND FOR THESE KIND OF COMPANIES AND APPETITE FROM THE PUBLIC MARKETS. AND WE ARE ABLE TO KIND OF PREPARE THESE COMPANIES SEVERAL QUARTERS OR YEARS AHEAD OF THE CROSSING BY TELLING THEM WHAT ARE GOING TO BE THE QUESTIONS AND THINGS PEOPLE WILL BE FOCUSING ON ON THE OTHER. ED: EMMA NORCHET, I AM LOOKING FORWARD TO MANY CONVERSATIONS TO COME. THANK YOU VERY MUCH INDEED. COMING UP ON THE SHOW, OLIVIA MOORE JOINS TO TALK ABOUT THE TOP CONSUMER APPS THAT MAY CONTINUE SOME OF WHAT WE DISCUSSED WITH EMMA. THIS IS BLOOMBERG TECH. ANDREESSEN HOROWITZ HAS RELEASED ITS LIST OF THE TOP ONE HUNDRED GENERATIVE AI CONSUMER APPS, THE LATEST ADDITION FEATURING FAMILIAR NAMES FROM THE PREVIOUS EDITIONS. BUT ALSO FINDS THERE IS ROOM FOR COMPANIES TO DEEPEN THEIR ENGAGEMENT WITH USERS. THE AUTHOR OF THAT REPORT IS WITH ME HERE IN SAN FRANCISCO. THIS IS INTERESTING. THERE'S DIFFERENT WAYS YOU SLICE IT UP. YOU DO THE TOP 15 BY A MONTHLY REVENUE OR MONTHLY ACTIVE USERS. THOSE ARE DIFFERENT MEASURES, OBVIOUSLY. I WANT TO GO TO THIS IDEA OF DEEPENING ENGAGEMENT. WHAT IS THAT A MEASURE OF? OLIVIA: THIS IS ONE OF THE BIG REASONS WE WANTED TO INTRODUCE REVENUE DATA THIS TIME. TYPICALLY, WE HAVE DONE THIS LIST JUST BY VISITS TO WEBSITES AND MONTHLY ACTIVE USERS. WHICH IS GREAT. BUT IT DOESN'T REALLY CAPTURE VERY DEEP AI USAGE WHICH IS HAPPENING IN PRODUCTS THAT ARE -- OFTEN LIVE ON THE DESKTOP, IN THINGS THAT ARE NOT CAPTURED BY THAT DATA, AND THAT PEOPLE ARE PAYING FOR. SO THERE WERE SOME VERY SURPRISING CONCLUSIONS FROM THAT. WE FINALLY GOT DATA FROM -- THAT LOOKS ACROSS HUNDREDS OF THOUSANDS OF U.S. CONSUMERS. LESS THAN 5% OF THEM ARE PAYING FOR EVEN ONE AI APP. ONLY ABOUT 13% OF THOSE ARE PAYING FOR MORE THAN ONE. AND WHAT WE FOUND IS THAT THE TOP ONE PERCENT OF SPENDERS ARE DRIVING MOST OF THE REVENUE. ED: OPENAI, NUMBER ONE. ANTHROPIC, NUMBER TWO. ANYONE SURPRISED BY THAT? IS THAT JUST FIRST MOVER ADVANTAGE BECAUSE THEY WERE THE FIRST TO PRODUCTIZE? OLIVIA: WHEN YOU LOOK AT OPENAI AND ANTHROPIC ON THESE LISTS, THEY HAVE THE BROADEST BASE OF CONSUMERS. EVERYONE KNOWS THEM. THEY ARE GENERAL LLM'S. YOU CAN USE THEM FOR ANYTHING. THE REASON WHY THEY ARE TOPPING THESE MONTHLY REVENUE TARGETS IS A BENEFIT FROM POWER USERS WHO ARE USING THESE MODELS MOSTLY FOR CODING, MOSTLY FOR PRODUCT BUILDING. EXACTLY. THAT TOP 1% OF SPENDERS THAT WE FOUND OUR SPENDING ON PERSONAL CREDIT CARDS. ALMOST $1000 A MONTH. ED: WE ARE TALKING ABOUT CONSUMER APPS. OLIVIA: AS CONSUMERS, THEY ARE SPENDING, COMPLETELY INDEPENDENT OF THEIR WORK STAND WHICH IS PROBABLY MUCH HIGHER, ALMOST 1000 DOLLARS. WHEREAS THE AVERAGE CONSUMER IS SPENDING MAY BE $20 A MONTH ON AI ACROSS ONE PRODUCT, PROBABLY SOMETHING LIKE CHATGPT. ED: YOU AND I DISCUSSED THIS IN THE PAST WHERE WE TALKED ABOUT IT BEFORE WE CAME ON AIR. AT HOME, THE AUDIT THAT MY WIFE AND I DO USED TO BE LIKE STREAMING, RIGHT? I CAN'T HAVE ALL OF THESE STREAMING SUBSCRIPTIONS. BLOOMBERG PROVIDES ME WITH AN ENTERPRISE VERSION OF CHATGPT AND I ALSO HAVE MY OWN PERSONAL ONE. SHOULD I HAVE BOTH? DO I NEED GEMINI, CLOGGED? -- CLAUDE? HOW IS THAT REFLECTED ON THE CHANGES ON THE TABLES? OLIVIA: THE BIGGEST THING WE ARE LOOKING FOR TO MAKE CHANGE ON THE NEXT FEW TABLES IS BUSINESS MODELS BEYOND SUBSCRIPTION. ALMOST ALL OF CONSUMER AI REVENUE HAS COME FROM SUBSCRIPTION AND EXTRA CREDITS AND USAGE TOKENS PURCHASED FOR THAT SO PROBABLY LIKE 86% OF COMPANIES ARE OFFERING THAT. THAT IS COMPLETELY UNNATURAL IN THE HISTORY OF THE CONSUMER INTERNET. THE CONSUMER INTERNET HAS RUN ON ADS AND ON TRANSACTIONS. IF YOU LOOK AT META, 97% OF THEIR REVENUE IS ADS. GOOGLE, 75%. ED: SUBSCRIPTION-BASED AI OFFERING. OLIVIA: MORE COMPANIES ARE EXPANDING INTO SUBSCRIPTION. I WOULD EXPECT FROM META, THAT IS PROBABLY BECAUSE THEY HAVE A LOT OF THOSE WHALES SPENDING AN ENORMOUS AMOUNT ON TOKENS AND THEY NEED SOME WAY TO MONETIZE THEM. BACK TO YOUR EARLIER QUESTION, WHY HAVEN'T WE SEEN DEEPER CONSUMER AI USAGE? ALMOST ALL OF THESE PRODUCTS, IT COSTS TO USE THEM AND IT'S NOT CHEAP AND MOST PEOPLE EITHER CAN'T OR DON'T WANT TO PAY FOR SOFTWARE, ESPECIALLY MORE THAN ONE PRODUCT. I THINK THIS IS GOING TO BE REALLY INTERESTING WITH THE RISE OF CONSUMER AGENTS LIKE INSTINCT AND MUSE THAT ARE FREE. MAYBE THEY'LL MONETIZE VIA ADS OR TAKE A CUT OF THE TRANSACTION LIKE A TYPICAL MARKETPLACE. THAT HAS A MUCH BETTER CHANCE AT DEEPENING CONSUMER ENGAGEMENT. ED: YOU TELL ME WHICH TABLE IS BEST TO ANSWER THIS QUESTION. THESE APPS, THEY ARE ALL DIFFERENT THINGS. SOME OF THEM ARE JUST GENERATIVE AI TOOLS, TEXT. SOME OF THEM ARE VIDEO MODELS. SOME OF THEM ARE DESIGN TOOLS. IT'S HARD TO COMPARE THEM, RIGHT, IF THEY SERVE DIFFERENT AND USES. -- END USES. WHICH TABLE IS BEST? OLIVIA: I THINK WE HAVE ONE PROBABLY ABOUT POWER USER SPEND OVER TIME. ED: WE HAVE MONTHLY ACTIVE USERS UP NOW. LET'S GO WITH THAT. OLIVIA: WHAT YOU WILL SEE AMONG THE POWER USERS IS THEY ARE USING BASICALLY THREE BUCKETS OF PRODUCTS AND WE ARE MISSING A LOT OF THE REST OF THAT IN THE CONSUMER AI WORLD SO FAR. SO WHAT WE ARE SEEING A LOT OF, AND PROBABLY EITHER THE REVENUE LIST OR THE WEB LIST IS THE BEST WANT TO SHOW THIS -- NOBLE HAS A LOT OF THEIR OWN KIND OF MOSTLY PHOTO-BASED USE CASES. AI AVATARS, HOMEWORK HELP. THIS IS PERFECT. YOU WILL SEE A LOT OF IT CONCENTRATES IN THREE THINGS. ONE WOULD BE BUILDING PRODUCTS. THAT WOULD BE THINGS LIKE LOVABLE, FALL, -- THOSE ARE PRETTY MUCH DEVELOPER TOOLS BUT WE ARE SEEING HEAVY CONSUMER SPEND ON THEM. AND THEN WE HAVE THINGS TO MARKET PRODUCTS SO YOU ARE SEEING THINGS ON THEIR LIFE RUNWAY, LIKE PULLING -- CLING, AND HICKSVILLE IS A BIG ONE. THE LAST CATEGORY IS GENERAL PRODUCTIVITY. HOW DO YOU ORGANIZE AND DISTRIBUTE ALL THAT WORK YOU ARE DOING WITH AI NOW? THINGS LIKE MANUS, GRANOLA. EVERYTHING ELSE MISSING IS AN CONSUMER. SOCIAL APPS, DATING APPS, MARKETPLACES, FINTECH, HEALTH. ED: THESE ARE RIGHT FOR OPPORTUNITY? -- RIPE FOR OPPORTUNITY? OLIVIA: THEY HAD TO MAKE MONEY BECAUSE MODEL COSTS ARE SO HIGH SO THEY ARE PRODUCTS PEOPLE ARE USING FOR WORK. EVEN IN THEIR STANCE AS A CONSUMER. ED: YOU ARE A PARTNER AT ANDREESSEN HOROWITZ. THERE MUST BE A REASON THE FIRM PRODUCES THIS. HOW DOES IT INFORM WHERE YOU INVEST NEXT? OLIVIA: IT GIVES US A GOOD SENSE OF WHAT IS HAPPENING NOW WHICH IS ABOUT HALF OF AMERICANS ARE USING AIA. 25% OF THEM ARE USING IT DAILY. BUT STILL, SUB 5% ARE PAYING. WE ASKED OURSELVES WHY. WHAT NEEDS TO CHANGE THAT NUMBER TO GO UP? THE REAL THING FOR ME IS A LOT OF THESE CONSUMER AI PRODUCTS ARE ORIENTED AROUND HELPING CONSUMERS SAVE TIME AND BUILD THINGS. AND IN REALITY, MOST CONSUMERS ARE LOOKING FOR BETTER WAYS TO SPEND THEIR TIME. SOCIAL APPS, ENTERTAINMENT, OTHER THINGS WITH NETWORK EFFECTS. THERE'S BEEN ALMOST NO MULTIPLAYER AI APPS WHICH HAS BEEN PRETTY SURPRISING. DOING THIS LIST AND SEEING WHAT IS NOT ON THIS LIST GIVES US A LOT OF EXCITEMENT AND INSPIRATION. ED: OLIVIA MOORE, GREAT TO HAVE YOU BACK ON THE SHOW. THANK YOU FOR BEING HERE. COMING UP, WE ARE GOING TO HEAR FROM JAMIE DIMON ABOUT THE AI BUILDOUT AND THE CYBER RISKS THE CUTTING EDGE MODELS CREATE. THAT CONVERSATION, NEXT. THIS IS BLOOMBERG TECH. ♪ ED: THE DEBATE OVER THE DATA CENTER BUILDOUT IS NOT ISOLATED TO THE U.S. ALTHOUGH IT IS POISED TO BE A KEY FACTOR IN THE UPCOMING MIDTERM ELECTIONS. CHAIRMAN AND CEO JAMIE DIMON SPOKE WITH TOM MACKENZIE ABOUT THE ISSUE FROM THE COMPANIES CONFERENCE IN LONDON. >> DATA CENTERS, BUILD THEM WHERE THEY ARE WANTED. HALF THE NEW ONES IN AMERICA, TEXAS AND VIRGINIA, AND YOU KNOW, PEOPLE DON'T WANT THEM THERE, YOU ARE NOT GOING TO WIN. THERE ARE A LOT OF STATES THAT HAVE ACCESS TO POWER AND OF COURSE ANY BIG COMPANY HAS TO BE A GOOD COMMUNITY CITIZEN SO A LOT OF THESE PEOPLE ARE GOING INTO TOWN AND BEING PART OF THE COMMUNITY TO HELP THE COMMUNITY GET THE RIGHTS TO MAKE COMMITMENTS THAT WON'T RAISE CONSUMER ELECTRICITY COSTS. IT'S THINGS LIKE THAT. THAT WILL BE WORKED THROUGH AN AI HAS HUGE POSITIVE EFFECTS. IT WILL CURE A LOT OF DISEASES. SAFE ACCESS TO THE ROADS AND COMPOSITE MATERIALS. IT WILL MAKE LIFE UNBELIEVABLE FOR PEOPLE. THE DOWNSIDE IS OBVIOUSLY WHAT YOU READ ABOUT WITH, YOU KNOW, THE AGENTS . AND MYTHOS -- THE AGENTS. THE BANKS HAVE ALWAYS HAD A SYSTEM IN PLACE WHERE WE HELP EACH OTHER AND WE ALSO STARTED A THING CALLED THE ALLIANCE FOR CRITICAL INFRASTRUCTURE. IT IS STARTING WITH 50 COMPANIES. IT IS STARTING IN THE U.S. IT'S ACROSS SIX INDUSTRIES. TECH, ORDER, TRANSPORT. INDUSTRIES THAT THE GOVERNMENT .2 AS A LIFELINE. IT SHOULD EXTEND TO HEARTH CARE -- HEALTH CARE, PHARMA. WE NEED TO HELP THE SMALLER COMPANIES, TOO. THEY HAVE DIFFERENT VENDORS AND DIFFERENT MEANS. IT'S A LOT OF WORK AND WE SIMPLY HAVE TO DO IT. AI CREATED VULNERABILITIES WE DID NOT KNOW ABOUT. WE WERE WORRIED ABOUT CYBER BEFORE THESE THINGS. >> YOU THOUGHT ABOUT IT FOR A LONG TIME. IT IS YOUR BIGGEST RISK. DOES AI MAKE CYBER SYSTEMIC RISKS MORE LIKELY? JAMIE: MYTHOS, WHATEVER HE THOUGHT IT WAS BEFORE, I SAID CYBER IS OUR BIGGEST -- THEY DID NOT PUBLISH MYTHOS YET. IT WENT UP TENFOLD AFTER MYTHOS. ED: JAMIE DIMON SPEAKING WITH TOM MACKENZIE. ONE MORE THING BEFORE YOU GO. PARAMOUNT HAS COMPLETED ITS $110 BILLION PURCHASE OF WARNER BROS. THE NEW COMPANY IS CALLED SKY DANCE. DAVID NESSEL -- DAVID ELLISON WILL CONTINUE TO SERVE. THE FORMER HEAD OF MATTEL JOINT DOMESTIC CO-CEO. SOME OTHER FAMILIAR NAMES WILL REMAIN IN LEADERSHIP ROLES. CUTS FOR STAFF MAY BE COMING. ELLISON SAYING INTEGRATING TWO COMPANIES WILL BRING CHANGE INCLUDING DIFFICULT DECISIONS THAT AFFECT OUR WORKFORCE. THAT IS ACCORDING TO A COMPANY MEMO SENT TO STAFF OBTAINED BY VARIETY. IT IS NOT THE ONLY CHANGE COMING. TO GET THE DEAL OVER THE FINISH LINE, THEY COMMITTED TO GETTING 30 FILMS IN THEATERS A YEAR, INVESTING $1.5 BILLION IN DOMESTIC FILM PRODUCTION OVER FIVE YEARS AND CREATING INDEPENDENT NEWS OVERSIGHT BOARD . KOSPI SHARES OPEN HIGHER, AGAIN TRADING TODAY UNDER THE TICKER. WE ARE OFF NOW BY 4.7%. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECH. RECAP ON THE PODCAST. YOU CAN FIND IT ON THE TERMINAL AS WELL AS ONLINE. THIS IS BLOOMBERG TECH.