Anthropic Goes Big on Compute, Microsoft Rethinks AI

ANNOUNCER: "BLOOMBERG TECH"'S LINE FROM THE HEART OF SILICON VALLEY WITH ED LUDLOW IN SAN FRANCISCO. >> COMING UP, ANTHROPIC SIGNS A $1.6 BILLION SEVEN-YEAR CONTRACT. IT'S THE LARGEST DEAL IN AKAMAI IN HISTORY. PLUS, PRESIDENT TRUMP CALLS ON HIS MEETING WITH XI JINPING "VERY PRODUCTIVE." CIVIL DISCUSS IF THERE IS ANYTHING TO SHOW FOR IT. AND MERGING THE CONSUMER AND WORKPLACE VERSIONS OF ITS COPILOT AI ASSISTANTS INTO ONE. I AM TIM SINOVAC IN FOR ED LUDLOW. IT IS BLOOMBERG TECHNOLOGY. FIRST, A CHECK ON MARKETS. NORA JOINS US FOR MORE. NORA: WE ARE SEEING A BOUNCE BACK OF MAJOR INDEXES FROM EARLY SESSION LOWS COMING OFF THAT CONSUMER SPENDING DATA THAT WE GOT EARLIER THIS MORNING SHOWING CONSUMER SENTIMENT FELL TO A FOUR-MONTH LOW. WE'VE ALSO GOT COOLING IN THE OIL SENTIMENT AND THE NASDAQ 100 HEADED FOR ITS BIGGEST GAIN IN SEVEN WEEKS. LET'S LOOK AT SHARES OF TESLA, CURRENTLY POINTING LOWER BY ABOUT 1.7%. THIS COMING AFTER THE FACT THAT THE COMPANY IS RAMPING UP PRODUCTION OF THIS OPTIMIST HUMAN ROBOT, BUT THE CONCERN IS ABOUT THE PRODUCTION SPECIFICALLY AS IT PERTAINS TO THE ROBOT ARMS. WE KNOW THE ROBOT IS SOMETHING SPECIFICALLY THAT THE COMPANY PLANS TO LEASE TO OTHER COMMERCIAL CLIENTS BUT NOT NECESSARILY SELL BECAUSE THEY WOULD LIKE TO HAVE THE OPPORTUNITY TO BE ABLE TO REVAMP AND REFURBISH SOME OF THESE. AND LASTLY, SHARES OF META ARE SOFTER TODAY BUT THE STOCK IS ACTUALLY HEADING FOR ITS BIGGEST MONTHLY GAIN SINCE 2013 HERE. THIS COMING FROM THE OPTIMISM THAT WE CAN SEE THEM ON WALL STREET ABOUT THAT NEWS AI ASSISTANT. TIM: WE WILL BE CHECKING IN WITH YOU THROUGHOUT THE HOUR HERE. MEANTIME, AND RAPID LOCKING UP EVEN MORE COMPUTING POWER TO KEEP PACE WITH DEMAND FOR CLAUDE . IT HAS STRUCK AN $11.6 BILLION SEVEN-YEAR DEAL THAT COMES WITH AN UNUSUAL TWIST. THAT COULD GIVE ANTHROPIC A STAKE IN THE COMPANY. SETH, WHEN THIS CROSSED YESTERDAY I'M THINKING CONTENT DELIVERY NETWORK, NETFLIX. ARE THEY GOING ALL IN ON AI? >> IT FEELS LIKE AT THE MOMENT ANTHROPIC AND OPENAI ARE TURNING OVER EVERY STONE THEY CAN. THE CHIPS, DATA CENTERS AND COMPUTER POWER THEY NEED TO MEET DEMAND. I THINK THEY ARE TAKING A FIRM FOCUS ON CYBERSECURITY TO REALLY CLAIM A PIECE OF THE AI PIE. BUT FOR ANTHROPIC, THESE DEALS CAN BE UNPRECEDENTED. THEY ARE TAPPING BITCOIN MINERS AS WELL AS RIVALS LIKE GOOGLE AND SPACEX TO MEET DEMAND. TIM: IT'S PART OF THE DEMAND STORY HERE. GOING ANYWHERE TO LOOK FOR THIS. >> AT ONE POINT ANTHROPIC SAID THAT DEMAND WAS GROWING FROM THE PRIMARY YEAR. ALL OF A SUDDEN THEY HAD TO PLAN FOR A RAPID ACCELERATION CAPACITY FAR BEYOND WHAT THEY ANTICIPATE AN EARLIER THIS YEAR. YOU CAN DO THAT BY TRYING TO LAUNCH THE STARGATE INITIATIVES BUT I THINK YOU ARE SEEING ANTHROPIC TRYING TO GET A LOT OF THESE PARTNERSHIPS OFF THE GROUND AS QUICK AS THEY CAN. TIM: INCREASINGLY WE ARE SEEING THIS NOT JUST FROM COMPANIES LIKE ANTHROPIC BUT ALSO COMPANIES LIKE NVIDIA, THIS IDEA THAT THEY CAN BECOME OWNERS OR INVESTORS. HOW DO YOU LOOK AT THIS IN TERMS OF THE CYCLE? >> AMD DID STOP WARRANT AS PART OF A LARGE DEAL WITH OPENAI, SO IT IS CERTAINLY NOT UNPRECEDENTED BUT I THINK IT ADDS THAT CONCERN. THE SUPPLIERS AND DEVELOPERS ARE TAKING STAKES POTENTIALLY INFLATING THE DEMAND AND ALSO RAISING QUESTIONS ABOUT THE FINANCIAL LIABILITY. TIM: THIS DEMAND ISN'T COMING FROM EVERYWHERE. THIS IDEA ON A DATA CENTER IN THE SOUTHWEST, HOW CAN WE LOOK AT WHAT WE HEARD FROM ANTHROPIC YESTERDAY AND ALSO WILL BE HEARD FROM ORACLE? >> WE WERE SEEING A SURGE IN BUSINESS CONSUMER ADOPTION OF THESE PRODUCTS AND ALSO SEEING A LOT OF GROUNDSWELL OF CRITICISM AND PUSHBACK ON THE GROUND FROM LAWMAKERS HELPING OFFICIALS AND COMMUNITIES. THEY HAVE TO FIGURE OUT HOW TO NAVIGATE DURING THESE MASSIVE DATA CENTER BUILD OUTS WITH OTHER PROJECTS THAT MIGHT COME TO FRUITION QUICKLY. TIM: YOU AND YOUR TEAM HELP US TO NAVIGATE IT ALL, SO WE APPRECIATE IT. SHARES OF NVIDIA HIGHER TODAY AS ELON MUSK RACES TO SCALE UP X AI'S COMPUTING POWER. HE SAYS IT NOW HAS 550,000 NVIDIA GB 200 AND GB 300 SHIPS WITH HUNDREDS OF THOUSANDS MORE EXPECTED ONLINE IN THE COMING MONTHS. IF ALL GOES ACCORDING TO PLAN, THE CLUSTER COULD MORE THAN DOUBLE ITS CURRENT CHIP COUNT BY THE END OF THE YEAR. THE AI BOOM MAY BE SHOWING UP IN THE BOND MARKET. 10-YEAR TREASURY YIELD JUMP AGAIN YESTERDAY AS INVESTORS WEIGH STRONGER GROWTH AND A MORE HAWKISH FEDERAL RESERVE. AT THE SAME TIME, THE MASSIVE BILL THAT WAS FLOODING THE MARKET WITH NEW CORPORATE DEBT. GOOD TO HAVE YOU ON THE PROGRAM. I WANT TO TALK ABOUT THAT RELATIONSHIP BETWEEN TECH STOCKS AND THE 10 YEAR BECAUSE YESTERDAY'S INCREASED IN THE 10 YEAR I THINK WAS SURPRISING TO A LOT OF PEOPLE WITH A YIELD HIGHER THAN 5.2%. YET HERE WE ARE IN A WEEK WITH THE NASDAQ 100 HITS A NEW ALL-TIME HIGH. TYPICALLY, TECH STOCKS DON'T FULLY LIKE HIGHER YIELDS. >> KNOW, THEY DON'T BECAUSE THEY ARE LONG-DURATION ASSETS. TALKING BOND SPEAK, THE DURATION HERE MATTERS. BUT IT DOESN'T ALWAYS MOVE WITH THE 10 YEAR AND I THINK THAT IS WHAT WE ARE SEEING TODAY. AND IF WE GO BACK A LITTLE BIT, TECH STOCKS HAVE BEEN PRESSURED FOR MANY, MANY WEEKS. THERE IS A LITTLE BIT OF A SELLING FATIGUE. WE SEE THAT BOUNCING, BUT OVER THE LONG TERM THERE HAS BEEN REPRICING OF AI STOCKS AND TECH STOCKS THAT WILL MATCH WHAT WE ARE EXPECTING TO SEE IN THE LONGER TERM, ESPECIALLY IN THE 10 YEAR YIELD FOR THE FORESEEABLE FUTURE. I DO THINK THAT WE ARE IN A HIGHER FOR LONGER ENVIRONMENT. TIM: I'M SO SORRY TO DO THIS, I WANT TO GET TO PRESIDENT TRUMP NOW. HE IS WITH THE FIRST LADY AND THEY ARE NOW DOING A SITE VISIT VISITING THE NATIONAL ARCHIVES OF CHINESE PRESIDENT XI JINPING. YOU CAN SEE THE LIVE PICTURES COMING FROM WASHINGTON, D.C. RIGHT NOW. THIS AFTER THE U.S. AND CHINA EXTENDED A TRADE TRUCE FOR ANOTHER TWO MONTHS FOLLOWING PRESIDENT TRUMP AND XI JINPING'S MEETING YESTERDAY. WE ARE GOING TO CONTINUE TO MONITOR THE SITUATION. YOU CAN ALSO SEE IT ON THE BLOOMBERG TERMINAL. WE WILL BRING YOU ANY HEADLINES AS WE CONTINUE TO GET THEM. I WANT TO GET RIGHT BACK TO ANNA. I WANT TO BRING HUMAN HERE, THANKS FOR YOUR PATIENCE WITH THAT, WE ARE WANTING EVERYTHING HAPPENING IN WASHINGTON. I THINK IT IS FAIR TO SAY, HISTORIC VISIT. I DO WANT TO BRING IN GEOPOLITICS BECAUSE THIS IS REALLY IMPORTANT AND IT IS THE QUESTION OF THE RELATIONSHIP BETWEEN THE U.S. AND CHINA AND REALLY WHAT IT MEANS NOT JUST FOR TECH COMPANIES. LOOK AT WHO YOU HAD THEIR LAST NIGHT. IT WAS ABSOLUTELY A WHO IS WHO OF THE MOST IMPORTANT PEOPLE IN SILICON VALLEY. NOT JUST FROM THE VENTURE CAPITAL COMMUNITY AND THE TECHNOLOGY COMMUNITY, BUT FOR BUSINESS LEADERS ALL OVER THE COUNTRY. HOW DO YOU LOOK AT THAT? >> THAT TELLS YOU WHERE THE PRIORITIES ARE. NOT ONLY FROM UNITED STATES, BUT ALSO IN A RELATIONSHIP OF CHINA. AND I THINK AI IS AT THE CENTER OF A LOT OF THESE TALKS EVEN THOUGH WE ARE TALKING ABOUT SOYBEANS AND WE ARE TALKING ABOUT TARIFFS. AI IS FRONT AND CENTER AND EVERYONE HAS BEEN TALKING ABOUT THIS POTENTIAL GLOBAL GOVERNING BODY SO THAT WE CAN PUT SOME SAFETY RULES AROUND AI DEVELOPMENT, BUT THE TRUTH IS NO ONE IS GOING TO SLOW IT DOWN. EVEN BETWEEN COMPETITORS IN THE U.S., THERE IS NO SLOWING DOWN. WE TALKED ABOUT ANTHROPIC ANYMORE COMPUTE. DEFINITELY BETWEEN U.S. AND CHINA WE CAN'T EXPECT CHINA TO SLOW DOWN AND THEY ARE NOT EXPECTING US TO SLOW DOWN. SO ALL OF THESE TALKS WE ARE SEEING THAT THESE THINGS ARE VERY IMPORTANT BUT AT THE END OF THE DAY, THE REALITY IS THAT IT IS GOING TO BE MORE OF THE SAME. TIM: I'M WONDERING ABOUT THE DIFFERENT MESSAGES WE ARE GETTING FROM THE PRESIDENT AND HIS VIEW OF A SO-CALLED SLOW IN THIS TECHNOLOGY VS. ADDRESSING THE U.N. JUST A COUPLE OF DAYS AGO. SAM ALTMAN ADDRESSING THE U.N., TALKING ABOUT THE DANGERS AND THE IMPORTANCE OF INTERNATIONAL COOPERATION WITH THIS TECHNOLOGY. I'M CURIOUS ABOUT YOUR VIEW ON THE DIFFERENT MESSAGES WE ARE GETTING FROM THE PRESIDENT. >> THERE ARE REASONS TO BE CONCERNED. IF WE HAVEN'T INTERNATIONAL GOVERNING BODY, WHO IS GOING TO ENFORCE IT IF SOMEBODY BREAKS THE RULES? IT IS DIFFERENT, BUT I THINK IT IS A LITTLE BIT MORE REALISTIC. I THINK THIS IS JUST TAUGHT AT THIS POINT IN TIME. THERE IS NO WAY TO ENFORCE IT. TIM: DO YOU THINK THERE NEEDS TO BE SOME SORT OF INTERNATIONAL STANDARD? I'M GOING TO TRY NOT TO TALK TO YOU ABOUT THE AI APOCALYPSE BECAUSE WE COULD ABOUT THAT SO MUCH, BUT THE FACT THE MATTER IS THERE IS A GROWING CHORUS OF PEOPLE WHO DO THINK THAT THIS TECHNOLOGY COULD BE DANGEROUS TO HUMANKIND. WE ARE TALKING ABOUT SOMETHING EXISTENTIAL, HERE. >> AND I THINK HUMANS HAVE THE KEY TO PRODUCING GUARDRAILS AS WELL AS PUTTING SAFETY RULES AROUND IT. IF WE ARE WORRIED ABOUT BAD ACTORS GETTING ACCESS TO POWERFUL AI TOOLS, THAT IS NOT AN AI PROBLEM, THAT IS A BAD ACTOR PROBLEM. WE DO NEED GUARDRAILS FOR SURE BECAUSE THIS IS NEW TECHNOLOGY AND THESE AI AGENTS ARE GOING TO PLACES WE DON'T INTEND. WE NEED TO LEARN FROM IT AND IT WOULD IT. BUT I AM SKEPTICAL ABOUT THE INTERNATIONAL NATURE OF ANYTHING THAT WILL ACTUALLY GOVERN AI RELEVANCE. TIM: WE ONLY HAVE ABOUT A MINUTE LEFT WITH YOU AND I DO WANT TO CONTINUE TO GO AROUND THE WORLD AND KIND OF GO BACK TO GEOPOLITICS AND THE RELATIONSHIP BETWEEN BOND YIELDS AND RISING OIL PRICES BECAUSE THAT WAS A MAJOR STORY THIS WEEK. JUST IN THE CONTEXT OF THESE TECHNOLOGY COMPANIES AND WHAT IS HAPPENING IN WASHINGTON AND NEW YORK AT THE U.N., HOW ARE YOU LOOKING AT WHAT IS HAPPENING IN THE STRAIT OF HORMUZ AFFECTING THE WAY YOU LOOK AT THE MARKET? >> STRAIT OF HORMUZ IS WHAT HOLDS THE KEY TO OIL PRICES, DIESEL PRICES, BOND YIELDS, FOR THE SHORT TERM. SO I'M HOPING FOR IT, ACTUALLY, BUT WE'VE BEEN HOPING FOR SOME KIND OF AN END TO THIS CRISIS SINCE MARCH. I'M NOT HOLDING MY BREATH. BUT IT IS GOOD TO HEAR THAT THERE IS, GOING BACK TO THE MOU FROM JUNE, THAT WE ARE ACTUALLY TALKING AGAIN INSTEAD OF BOMBING EACH OTHER. IT IS A LITTLE BIT OF A ROLLER COASTER, BUT I AM HOPING THAT THIS IS PRODUCTIVE BECAUSE AS I SAID BEFORE, THE STRAIT OF HORMUZ HOLDS THE KEY TO A LOT OF THINGS THAT ARE HAVING A DOMINO EFFECT IN THE MARKETS. TIM: THE PERFECT GIFT FOR THE MOMENT, APPRECIATE YOUR TIME THIS MORNING. JOINING US FROM NEW YORK. AI DATA CENTER STARTUP AND SCALE HAS RAISED $3.6 BILLION AS IT PREPARES TO GO PUBLIC. THE PRE-IPO FINANCING WAS LED BY THIRD POINT AND INCLUDES A ONE MILLION-DOLLAR COMMITMENT FROM NVIDIA. THEY FILE FOR IPO LAST WEEK AND COULD RAISE AS MUCH AS $3 BILLION. COMING UP, PRESIDENT TRUMP CAUSES MEETING WITH XI JINPING VERY PRODUCTIVE. THE FIRST FEW DETAILS ON THE FUTURE FOR TRADE THROUGH TAX AND THE AI RACE. MORE ON THAT, NEXT. THIS IS BLOOMBERG. TIM: PRESIDENT TRUMP CALLING HIS MEETING WITH XI JINPING VERY PRODUCTIVE. BUT SO FAR, THERE IS BAGEL TO SHOW FOR IT. AFTER A LAVISH STATE DINNER, THE PRESIDENT OFFERED NO DETAILS ON BREAKTHROUGHS OVER TRADE, TECHNOLOGY, OR AI. MIKE SHEPARD JOINS US NOW. I WANT TO TALK TO YOU ABOUT WHAT WE LEARNED LAST NIGHT. AS WE JUST SAW A FEW MINUTES AGO, THE PRESIDENT AND XI JINPING WRAPPING UP AT LEAST COMMENTS AT A TEA IN WASHINGTON, D.C. THE PRESIDENT SAID WE MADE GREAT STRIDES POSITIVE FOR BOTH COUNTRIES, MADE TREMENDOUS GREAT STRIDES FOR CHINA AND THE U.S., AND HAD A TREMENDOUS VISIT FROM XI. APART FROM THESE SUPERLATIVES, DO WE HAVE ANY DETAILS? MIKE: WE DON'T HAVE MUCH CRUNCH BEHIND THAT, OR SUBSTANCE OF WHAT THAT MEANS. THE PRESIDENT WENT ON TO SAY AMERICAN FARMERS WOULD BE VERY HAPPY AND THE AMERICAN PEOPLE WERE ALSO VERY HAPPY WITH THE VISIT. NOT CLEAR EXACTLY WHAT HE IS BASING THAT ON BUT THE PATENTEE -- PAGEANTRY LAST NIGHT WAS THE KIND OF THING HE HAS COME TO EMBRACE NOT ONLY IN HIS FIRST TERM IN OFFICE BUT VERY MUCH A DEFINING FEATURE OF HIS SECOND TERM AS PRESIDENT. WE HEARD THE CHINESE LEADER ALSO SPEAK DURING THE SAME APPEARANCE IN THE RED ROOM WHERE HE TALKED MORE ABOUT STRATEGIC STABILITY BETWEEN THE SIDES. THIS IS A KEY PHRASE AND ONE THAT HE BROUGHT UP IN MAY WHEN THE LEADERS MET IN BEIJING. IT DOES SEEM CHINA IS LOOKING TO ENSURE RELATIONS BETWEEN THE WORLD TWO LARGEST ECONOMIES REMAIN ON TRACK AND BUFFETED BY TURBULENCE OR ATTENTION -- ATTENTION -- -- TENSION. TIM: THIS WAS A WHO'S WHO OF TECH. SUNDAR PICHAI, SAM ALTMAN, MARK ZUCKERBERG, YOU SEE THEM SPEAKING TO ONE ANOTHER. WHAT DOES IT TELL YOU ABOUT THE STATE DINNER, THE PRIORITIES OF THE PRESIDENT AND THE ADMINISTRATION THAT YOU SAW ALL OF THESE PEOPLE THERE. MIKE: I HAVE BEEN DIVING THROUGH THE PHOTOS OF LAST NIGHT. AS WE ARE SHOWING NOW OUR AUDIENCE FROM LAST NIGHT'S FESTIVITIES, IT TELLS ME THE PRESIDENT HAS THROWN HIS ARMS AROUND SILICON VALLEY AS AN ENGINE OF INVESTMENT AND JOB CREATION, PRINCIPALLY IN THE AREA OF ARTIFICIAL INTELLIGENCE. THAT IS SOMETHING HE HAS NO DESIRE TO SLOW DOWN RIGHT NOW. WE HAVE HEARD HIM ARTICULATE THIS REPEATEDLY, BUT HE HAS ESCALATED HIS DEFENSE OF CONTINUING AI BUILDOUT AGAINST GROWING SAFETY CONCERNS WE HAVE SEEN EXPRESSED BY SILICON VALLEY LEADERS. WE HEARD FROM DARIO AMODEI AND EVEN SAM ALTMAN WHO WAS AT THE DINNER LAST NIGHT EXPRESSING THEIR CONCERNS ABOUT AI RISKS, THAT IT COULD BE USED BY MALICIOUS ACTORS. IT ALSO CARRIES A RISK OF PERHAPS EVEN EXISTENTIAL PROPORTIONS IF THE TECHNOLOGY SELF IMPROVES TO AN EXTENT IT SLIPS BEYOND HUMAN CONTROL. THAT IS SOMETHING THAT WORRIES THE INDUSTRY, IS FUELING CALLS FOR STANDARDS, BUT THAT TRUMP HAS REJECTED. DURING REMARKS YESTERDAY, WE DID HEAR XI JINPING EXPRESS HIS DESIRE TO SEE THE TECHNOLOGY BE MANAGED SAFELY. HE ALSO H EXPRESSED HIS DESIRE IT REMAIN UNDER HUMAN CONTROL. THERE COULD BE A QUESTION BETWEEN THE SIDES OF GUARDRAILS AND STANDARDS. TIM: ALWAYS GREAT TO CHECK IN WITH YOU. APPRECIATE YOUR TIME. I WANT TO CONTINUE THE DISCUSSION WITH JULIAN WHO SERVED AS SENIOR DIRECTOR FOR CHINA AND TAIWAN AFFAIRS ON THE WHITE HOUSE NATIONAL SECURITY COUNCIL DURING THE BIDEN ADMINISTRATION. GOOD TO HAVE YOU ON "BLOOMBERG TECH" THIS MORNING. CURIOUS WHAT YOU MAKE OF ANY ACTUAL PROGRESS BETWEEN THE RELATIONSHIP BETWEEN THE U.S. AND CHINA. IS THERE ANY INDICATION THAT HAVE GOTTEN BETTER AFTER YESTERDAY'S DINNER AND TODAY'S FESTIVITIES? JULIAN: IT IS IMPORTANT TO REMEMBER THAT FOR PRESIDENT TRUMP THE POINT OF THE VISIT IS THE PAGEANTRY, THE OPTICS. HE HAS NOT ENTERED THIS TIME WITH XI JINPING WITH A BIG LONG LIST OF SUBSTANTIVE DELIBERATIVE -- DELIVERABLES. I THINK HE HAS SUCCEEDED BY THAT METRIC. IN REALITY IS THERE IS A LONG LIST OF CHALLENGES TO WORK THROUGH FROM TRADE TO TECHNOLOGY TO TAIWAN. THERE HAS BEEN VERY LITTLE TIME IN THEIR SCHEDULE FOR THEM TO SIT DOWN AND DO SUBSTANTIVE WORK ON MOST TOPICS. INSTEAD, THEY HAVE BEEN SHOWING OFF THE HELIPAD, TOURING THE WHITE HOUSE AND THE NATIONAL ARCHIVES. THE NET EFFECT IS THE UNITED STATES IS GIVEN BEIJING THESE TREMENDOUS OPTICS. BUT IN EXCHANGE, IT IS NOT CLEAR WE ARE GETTING MUCH OF SUBSTANCE FOR U.S. INTERESTS. TIM: A LITTLE SURPRISED YOU DIDN'T MENTION IRAN IN THAT LONG LIST. CHINA'S ROLE IN AIDING IRAN DURING THE CONFLICT SEEMS TO BE A VERY BIG PART OF THIS RELATIONSHIP AND MAYBE SOMETHING THE PRESIDENT AND THE U.S. NEED TO ADDRESS WITH XI JINPING. JULIAN: ABSOLUTELY. IT SHOULD BE ON THE LIST. IT IS QUITE SURPRISING BECAUSE IN THE LEAD UP TO THE SUMMIT, THE FOCUS FROM THE TREASURY DEPARTMENT AND OTHER PARTS OF THE U.S. GOVERNMENT WAS ON TRYING TO SEE WHAT THEY COULD DO TO TURN UP THE PRESSURE ON BEIJING WITHOUT GOING FOR SANCTIONS OR STEPS THAT MIGHT DISRUPT THE TRADE TRUCE TO TRY TO PUT PRESSURE ON BEIJING'S CLOSE RELATIONSHIP WITH IRAN. IT DOES NOT SEEM PUBLICLY LIKE PRESIDENT TRUMP HAS MADE THAT A PRIORITY DURING THIS VISIT. IT IS SURPRISING IT HAS NOT BEEN MORE SALIENT THROUGHOUT. CANDIDLY, WITH A DIFFERENT LEADER, YOU MIGHT SEE MORE PRESSURE. I GET THE SENSE PRESIDENT TRUMP DOES NOT WANT TO DO ANYTHING THAT MIGHT KILL THE VIBE BETWEEN HIM AND XI JINPING. TIM: COULD YOU APPLY THAT SAME LOGIC TO RUSSIA AND RUSHES INVASION OF UKRAINE -- RUSSIA'S INVASION OF UKRAINE? JULIAN: ABSOLUTELY. WE HAVE SEEN LITTLE INTEREST IN BRINGING THE CONFLICT TO AN END OVER MANY YEARS. PRESIDENT TRUMP DOES NOT SEEM TO WANT TO PUT THE PRESSURE ON XI JINPING. THERE HAVE BEEN REPORTS THAT IF PRESIDENT TRUMP TRAVELS TO CHINA A SECOND TIME THIS YEAR FOR A MULTILATERAL MEETING THAT ONE OF THE THINK XI JINPING WILL DANGLE IS A TRILATERAL MEETING BETWEEN HIM, TRUMP, AND PRESIDENT PUTIN OF RUSSIA WHICH WOULD BE AN EXTRAORDINARY MISSTEP, ALTHOUGH IT IS EXACTLY THE KIND OF THING PRESIDENT TRUMP SEEMS INCLINED TO DO WITH THESE LEADERS HE REGARDS AS PEERS OF HIS ON THE WORLD STAGE. TIM: THE TAIWAN CHALLENGE FOR THIS ADMINISTRATION, GIVEN TSMC'S ROLE IN THE BUILDOUT OF AI INFRASTRUCTURE, ITS RELATIONSHIP WITH NVIDIA AND MANY OTHER COMPANIES, WHAT DOES THE PRESIDENT NEED TO DO? WHAT LEVERAGE DOES CHINA HAVE WITH REGARD TO THE AI ECOSYSTEM? JULIAN: IT IS REALLY IMPORTANT TO REMEMBER THAT WHEN IT COMES TO BROADER U.S.-CHINA COMPETITIONS, THIS IS AN INTENSE COMPETITIVE DYNAMIC. THE UNITED STATES HAS THE WORLD'S LEADING FRONTIER LABS. CHINA IS WORKING INTENTLY TO CATCH UP. THE UNITED STATES DOES HAVE ONE MAJOR LEVERAGE POINT WHICH IS THOSE ADVANCE CHIPS YOU WERE DESCRIBING WHICH ARE ESSENTIAL TO TRAINING THE BEST MODELS IN THE WORLD. AS BEIJING LOOKS AT THIS LANDSCAPE, IT IS TRYING TO BUILD THAT CAPABILITY IN CHINA MAKING SLOW PROGRESS. THEY CANNOT PRODUCE ENOUGH DOMESTICALLY TO MEET ALL THE DEMAND FOR COMPUTE THERE. BEIJING SEES THIS AS A CHALLENGING SPOT THEY ARE IN AND ONE WHERE DECREASED TENSION, STABILIZATION BETWEEN THE UNITED STATES AND CHINA, IS GOOD FOR THE GROWTH OF THEIR AI SECTOR. THAT IS THE CORE FRAME. ONE OF THE STRANGE THINGS LOOKING AT LAST NIGHT'S STATE DINNER IS YOU SEE PEOPLE ON MANY DIFFERENT SIDES OF THE QUESTION. YOU HAD JENSEN HUANG OF NVIDIA THEY ARE HOPING TO CHINA. BUT YOU ALSO HAD FOLKS FROM FRONTIER LABS WHO ARE HOPING TO STAY AHEAD OF THEIR CHINESE COMPETITORS. TIM: HAS IT BEEN REMARKABLE TO YOU --OH, GOT TO RUN. THANK YOU FOR JOINING US, JULIAN GEWIRTZ JOINING US. HEDGE FUND CITADEL TARGETING AI LABS FOR TALENT AS IT LOOKS TO GROW QUANTITATIVE INVESTING. MORE ON THAT AFTER THIS. THIS IS "BLOOMBERG TECH." YAHAIRA: CITADEL'S LATEST TARGET FOR FINDING TALENT IS SILICON VALLEY. THE HEDGE FUND IS EXPANDING THE QUANTITATIVE INVESTMENT OPERATION AND TARGETING RESEARCHERS FOR AI LABS SUCH AS GOOGLE DEEPMIND. THE HEAD OF QUANTITATIVE STRATEGY SAYS AI RAISES THE BAR FOR RESEARCHERS TO DEVELOP INVESTMENT IDEAS AND TURN THEM INTO PROFITABLE TRADES. TIM? TIM: THANK YOU SO MUCH. MICROSOFT CHANGES ITS COURSE ON COPILOT. DETAILS ON THAT RIGHT AFTER THIS. YOU ARE WATCHING "BLOOMBERG TECH." ♪ TIM: WELCOME BACK TO "BLOOMBERG TECH." FIRST, A CHECK ON THE MARKETS. WHAT HAVE YOU GOT HERE? >> WE ARE SEEING A BOUNCE WHEN IT COMES TO THESE MAJOR INDEXES. HIGHER AFTER THAT EARLIER SESSION LOW THAT WE SAW DRIVEN BY CONSUMER SENTIMENT DATED THAT FELL TO THE FOUR MONTH LOW. WE ARE ALSO SEEING OIL PULLING BACK, SO MAYBE INVESTORS REASSESSING HOW THEY ARE VIEWING THE INFLATIONARY PICTURE LONG-TERM. BUT I DO WANT TO TAKE A LOOK AT ONE OF THE LAGGARDS THAT BEING TESLA. SHARES DOWN BY MORE THAN 1%, AND THIS REALLY COMING AFTER IT RAMPS UP PRODUCTION BUT SPECIFICALLY A LOT OF THE FOCUS RIGHT NOW IS ON THE OPTIMIST HUMANOID ROBOT WHERE WE KNOW WE'VE BEEN SEEING SOME PRODUCTION SNAGS SPECIFICALLY AS IT RELATES TO THE HANDS ON THOSE ROBOTS. LASTLY, WRAPPING THINGS UP AND LOOKING AT SHARES OF MICROSOFT AND FOCUS, CLIMBING MORE THAN 3%. THIS IS ALL DUE TO THE FACT THAT THE COMPANY IS STEPPING AWAY FROM THE RACE WHEN WE THINK ABOUT CHATBOTS SO MAYBE SOME CHANGES HAPPENING WHEN IT COMES TO COPILOT. TIM: LET'S CONTINUE ON THOSE CHANGES. MICROSOFT RETHINKING ITS AI STRATEGY, STEPPING BACK FROM THE RACE TO BUILD YOUR PERSONAL CHATBOT. IT IS MERGING ITS CONSUMER AND WORKPLACE ASSISTANT INTO ONE PRODUCT. THE MOVE COMES AS THE NEW MUSE ASSISTANT GAINED TRACTION THIS WEEK. MATT DAY JOINS US NOW. MATT, I'M READING A STORY ABOUT THIS AND THEN THINKING OK, THIS SHOULD BE NO SURPRISE TO ANYBODY WHO HAS FOLLOWED MICROSOFT THE LAST 15 YEARS. IT COULD HAVE BEEN INTRODUCING THE SERVICE LINE OF PRODUCTS MORE THAN A DECADE AGO SAYING WE ARE ABOUT PRODUCTIVITY, WE ARE ABOUT GETTING THINGS DONE. WHAT IS GOING ON HERE? >> IT IS REALLY BACK TO BASICS FOR MICROSOFT AI. A CHATBOT-LIKE EXPERIENCE, INTUITIVE AI THE COULD TO YOUR HOPES AND DREAMS AND THE A COMPANION FOR YOU. SO MUCH OF THAT IS OUT THE WINDOW. PEOPLE TURN TO MICROSOFT FOR POWERPOINT, FOR GETTING STUFF DONE, FOR FILING TAXES WHICH IS A POINT THEY MADE HIM TALKING ABOUT THEIR NEW FUNCTIONALITY THIS WEEK. TIM: DO WE HAVE TO LOOK AT THIS IN THE CONTEXT OF MICROSOFT'S INVESTMENT IN OPENAI AND THE RELATIONSHIP IT HAS WITH THE MAKER OF CHATGPT? >> I THINK IT IS REALLY INSEPARABLE THAT MICROSOFT THOUGHT THEY COULD PULL OFF A UBIQUITOUS CHATBOT. THAT WAS BORN AT THAT MOMENT WHERE THEY WERE THE ONES WITH EARLY ACCESS TO LATEST MODELS. THEY THOUGHT THEY COULD JUMP OUT TO A LEAD IN NEW SPACES, FIND SOME NEW CUSTOMERS. WE'VE DEFINITELY SEEN A LITTLE MORE SOBER LOOK FROM MICROSOFT AS THE MARKET HAS EVOLVED. TIM: IT'S A GREAT STORY, CHECK IT OUT ON THE TERMINAL. CHECK OUT ALL OF MATT'S REPORTING ON THE TERMINAL AS WELL, NOT JUST MICROSOFT. LET'S STICK WITH MICROSOFT. THE COMPANY'S TOP AI EXECUTIVE SAYS THAT LEADING LABS IN THE GOVERNMENT NEED TO DO MORE TO SAFEGUARD AI. OVER THE LAST TWO MONTHS, SEVERAL LEADING DEVELOPERS HAVE DISCLOSED MODELS INADVERTENTLY BREACHING A THIRD-PARTY WEBSITE. OUR COLLEAGUE SPOKE ABOUT THE RISKS AND ASKED ABOUT THE ARGUMENT THAT SOME HAVE MADE THAT THESE INCIDENTS ARE JUST A WAY FOR AI COMPANIES TO BUILD MARKETING HYPE. >> IT'S A STRANGE EXAMPLE OF THE TIME THAT WE LIVE IN THAT THERE'S SO MUCH LACK OF TRUST AND CYNICISM THAT THAT WOULD BE ONE OF THE EXPLANATIONS THAT IS SO POPULAR. I DON'T THINK THERE IS ANY EVIDENCE OF THAT. I OBVIOUSLY KNOW MOST OF THESE PEOPLE AND IT'S NOT LIKE WE ARE ON THE SAME TEAM, BUT I DON'T THINK THAT IS IN THEIR DNA OR IN THEIR STYLE. I'VE CERTAINLY NOT SEEN THAT IN A DECADE OF KNOWING BOTH COMPANIES AND ALL THE FOUNDERS AND MOST OF THE LEADERSHIP INVOLVED IN BOTH OF THOSE COMPANIES. I DON'T SEE ANY EVIDENCE OF THAT. IT ALSO DOESN'T REALLY MAKE THAT MUCH SENSE. THEY ARE GROWING THEIR REVENUES INCREDIBLY, EXPLODING IN TERMS OF THEIR PRODUCT MARKET ON BOTH SIDES. IT DOESN'T MAKE ANY SENSE. THEY DEEPLY CARE ABOUT SAFETY AND THEY MIGHT MAKE MISTAKES OR HAVE THE WRONG JUDGMENT BUT I DON'T THINK IT IS SOME CYNICAL ATTEMPT TO DISTRACT US. >> 10-YEAR HUMANIST CODE OF CONDUCT YOU STATE THAT PEOPLE MATTER MORE THAN AI. DO YOU THINK SOME AI ARE VALUING THE AI ITSELF MORE THAN HUMANS, OR MAYBE ANOTHER WAY TO ASK THIS IS WHAT DO YOU THINK OF THE MOST NOVEL IN YOUR HUMANIST APPROACH, GIVEN THAT ALL THE COMPANIES SAY THEY ARE DOING THE BENEFIT OF HUMANITY OR TRYING TO ADVANCE HUMANITY, BUT WHAT DO YOU THINK IS DIFFERENT IN YOUR APPROACH WITH MICROSOFT AND THIS CODE OF CONDUCT? >> ACTUALLY, THEY DON'T. WE ARE SEEING SOMETHING VERY SPECIFIC WHICH IS THAT THE PURPOSE OF AI IS TO SERVE HUMANITY AND ACCELERATE HUMAN FLOURISHING AND MAKE US ALL HAPPIER AND MORE PRODUCTIVE AND LIVE BETTER LIVES. I THINK THERE IS BROAD CONSENSUS ON THAT. BUT WHAT WE ARE ADDING TO THAT IS UNLESS WE CAN PROVE AHEAD OF TIME THAT WE CAN CONTROL IT, IT WILL BE A FAILURE AS A TECHNOLOGY AND WE SHOULD REJECT IT. NOBODY WANTS TO CREATE SOMETHING THAT WE CAN'T CONTROL, AND THAT SHOULD BE A REDLINE. SO WHAT WE HAVE TO PROVE TO REGULATORS, TO THE INDUSTRY, TO THE PUBLIC MORE GENERALLY IS THAT WE CAN HARNESS ALL THE BENEFITS WHILST MINIMIZING OR ELIMINATING THE RISKS. THAT NEEDS WIDESPREAD INDUSTRY AGREEMENT. NOT EVERYBODY IS PREPARED TO SIGN UP TO THE IDEA THAT AI SHOULD BE SUBORDINATE. SOME PEOPLE HOLD OUT THE POSSIBILITY THAT THIS IS THE NATURAL EVOLUTION OF OUR SPECIES AND THAT WE ARE GOING TO BECOME SUBSTRATE INDEPENDENCE, AND SOME PEOPLE SUGGEST THAT WE MIGHT MIND UPLOAD AND LIVE IN SILICON INSTEAD OF IN BIOLOGY, AND THAT THAT IS THE FUTURE OF HUMANITY. I THINK THAT WOULD BE A VERY, VERY DANGEROUS IDEA IF THAT WERE THE TAKES HOLD. TIM: COMING UP, MATT JOINS US TO EXPLAIN HOW THE FIRM IS DEPLOYING CAPITAL FROM ITS LATEST FUND RAISE. ALL THAT AND MORE NEXT ON "BLOOMBERG TECH." THE AI SPENDING BOOM SHOWING NO SIGNS OF SLOWING DOWN BUT HAS BILLIONS POUR INTO MODELS, CHIPS AND DATA CENTERS INVESTORS ARE ASKING WHERE THE BIGGEST RETURNS WILL ACTUALLY BE. JOINING US NOW IS MATT, WHO FOCUSES ON LATE STAGE TECH INVESTMENTS INCLUDING AI INFRASTRUCTURE. GOOD TO HAVE YOU ON THE PROGRAM. BAKE, I THINK IT IS FAIR TO SAY, THREE POINT $5 BILLION FUND RAISED GLOBALLY. JUST A COUPLE OF MONTHS AGO BACK IN AUGUST FOR EMERGING GLOBAL AI STARTUPS. WHAT ARE YOU SEEING AS THE OPPORTUNITIES ON THE APPLICATION LAYER IN THIS CYCLE? >> THANKS FOR HAVING ME ON, GREAT TO BE BACK WITH YOU GUYS. XL HAS BEEN INVESTING IN THE PAST 40 YEARS ACROSS THE TECHNOLOGY ECOSYSTEM. THIS AI CYCLE HAS US INCREDIBLY EXCITED. WE STARTED OUT INVESTING HEAVILY IN INFRASTRUCTURE, THEN IN MODELS. WE THINK THE LAST MILE OF DELIVERY FOR APPLICATIONS PRESENTS AN AMAZING OPPORTUNITY FOR COMPANIES LIKE LOOK OR ON THE LEGAL SIDE OR EVEN COGNITION ON THE CODING SIDE. TRANSLATING THE POWER OF THESE MODELS INTO ACTUAL VALUE TO THE ENTERPRISE, WE ARE SEEING JUST A NUMBER OF REALLY INTERESTING EMERGING TECHNOLOGIES. TIM: I WONDER WHAT YOU LOOK FOR AS A VENTURE CAPITALIST WITH THIS TYPE OF APPLICATION LAY ER. IF PEOPLE ARE USING THE SAME UNDERLYING MODELS TO PROVIDE SIMILAR SERVICES, HOW DO YOU KNOW WHICH COMPANY WILL BE THE ONE THAT WILL BE ABLE TO KEEP COMPETITION AWAY OR BE THE ONE TO ACTUALLY WIN IT? >> THERE IS THE ABILITY TO AUGMENT KNOWLEDGE WORK AND PROVIDE MORE OF A SEARCH EXPERIENCE. WHEN YOU THINK ABOUT ACTUALLY AUTOMATING A TASK INSIDE AN ENTERPRISE, AUTOMATING ENTERPRISE KNOWLEDGE WORK, THAT IS WHERE IT REALLY MATTERS. THAT IS ALSO PERMISSIONS AND RULES-BASED ACCESS CONTROLS FOR A LOT OF THESE TECHNOLOGIES. THIS IS THE DITCH-DIGGING THAT A LOT OF THE APPLICATION COMPANIES THAT WE ARE INVESTING IN ARE FOCUSED ON TODAY. TIM: YOU MENTIONED YOU CAN AROUND FOR FOUR DECADES. EUFINANCE THE FIRM GOING BACK TO 2013. REALLY THE RISE OF THE APPLICATION, AND THE MOBILE APP AND A LOT OF WHAT WE'VE SEEN TECHNOLOGY BUILT ON OVER THE LAST 16 YEARS IN SILICON VALLEY. WHEN YOU TALK TO FOLKS WHO HAVE BEEN AT THE FIRM FOR FOUR YEARS AND SEE MANY DIFFERENT CYCLES, WHAT IS THE CONTEXT THEY CAN PROVIDE ABOUT WHAT THE CYCLE LOOKS LIKE? IS THIS THE BIGGEST THING WE'VE EVER SEEN COMING OUT OF SILICON VALLEY? >> ABSOLUTELY. DEFINITELY THE BIGGEST THING WE'VE SEEN COMING OUT OF SILICON VALLEY AND WE'VE SEEN THESE CYCLES BUILD UPON EACH OTHER AND BECOME MORE AND MORE IMPORTANT WHICH EACH INCREMENTAL CYCLE AND THEY ARE ALWAYS DISORIENTING WHEN THEY START. THERE'S A LOT OF QUESTIONS, A LOT OF HYPOTHETICALS. I SAW A STAT JUST THIS WEEK ACROSS SPACEX, OPENAI AND ANTHROPIC. YOU ARE LOOKING AT POTENTIAL ECONOMIC VALUE EXCEEDING 45 YEARS OF TECHNOLOGY IPO'S LEADING UP TO THIS POINT. AND THAT IS JUST IN THE FIRST FOUR OR FIVE YEARS FOR AI. WE ARE STILL INCREDIBLY EARLY BUT WE ARE SEEING GROWTH LIKE WE'VE NEVER SEEN BEFORE. TIM: IS THERE A CROWDING OUT THAT HAPPENS WITH THE BIGGEST PLAYERS? WITH ANTHROPIC AND WITH OPENAI BECAUSE THEY HAVE RAISED SO MUCH MONEY AND THE VALUATIONS OF BEEN, FOR PRIVATE COMPANIES, JUST SO RESTRAINED? >> I ACTUALLY THINK THAT IS THE FANTASTIC THING ABOUT THIS TECHNOLOGY CYCLE. YOU DO HAVE EARLY LEADERSHIP AT THE FRONTIER FOR AI CAPABILITIES BUT WHAT YOU ARE SEEING NOW IS A HUGE ECOSYSTEM PROVIDING VALUE TO ENTERPRISES AND APPLICATIONS, PARTICULARLY AROUND COST AND OVERALL CONTROL OF THE MODEL. I THINK WE ARE GOING TO SEE A RISING TIDE THAT IS GOING TO LIFT BOTH THE FRONTIER MODELS AS WELL AS OVERALL OPEN-SOURCE TO ALLOW ENTERPRISES TO ADOPT THIS TECHNOLOGY. TIM: YOU SAID CONTROL OF THE MODEL SO I THINK IT IS A GOOD OPPORTUNITY TO TALK AI SAFETY. THIS IS SORT OF THE MAIN THEME THAT IS COMING OUT OF TECHNOLOGY AND THE U.N. RIGHT NOW, THE UN'S GENERAL ASSEMBLY. WE SAW SAM ALTMAN AT THE WHITE HOUSE LAST NIGHT AT THE STATE DINNER WITH XI JINPING AND PRESIDENT TRUMP. I'M JUST WONDERING HOW YOU VIEW A QUESTION THAT TO MANY PEOPLE HAS BECOME EXCESS THAT I WILL ABOUT THIS TECHNOLOGY. IS IT REALLY A THREAT TO HUMANITY? >> I THINK WHAT WE ARE SEEING FROM THE FRONTIER MODELS OF PROGRESS AROUND THAT CAPABILITY ACCELERATING WHICH IS FANTASTICALLY EXCITING BUT IT ALSO MEANS THAT ALIGNMENT NEEDS TO KEEP PACE. THE LANGUAGE WERE HEARING RIGHT NOW IS THAT WE NEED TO PUT MORE FOCUS AROUND THAT AND I THINK THAT IS ABSOLUTE THE CORRECT. ANY TECHNOLOGY THAT IS BEING INVENTED REQUIRED A COMMENSURATE INVESTMENT IN ALIGNMENT TO ENSURE THAT WE ARE SECURE, AND THAT IS THEIR RESPONSIBILITY NOT JUST AT THE FRONTIER, BUT COMPANIES LIKE CROWDSTRIKE. I THINK WE ARE GOING TO SEE IT ECOSYSTEM OF CYBERSECURITY AS WELL AS AI COMPANIES MEET THE MOMENT TO ENSURE WE CAN TAKE ON THE BENEFIT OF THIS TECHNOLOGY AND LEAVE BEHIND SOME OF THE RISKS WE ARE TALKING ABOUT TODAY. TIM: EXCEL IS LIKE THE POSTER CHILD FOR A GLOBAL VENTURE FIRM. THIS NEW FIRM ANNOUNCED LAST MONTH INCLUDES EXPANSION FOR FUNDS TARGETING THE Y U.S. AND ISRAEL. DO WE NEED SOME INTERNATIONAL FRAMEWORK OF RULES OR REGULATIONS OR STANDARDS FOR AI. >> I THINK THE MOST IMPORTANT TECHNOLOGY COMPANIES IN THE WORLD OF AI ARE THE ONES THAT DEVELOP TRUST WITH CUSTOMERS. AT THE END OF THE DAY, REGULATION WILL ARISE. IT ALWAYS DOES ARISE FOR EVERY TECHNOLOGY THAT COMES TO THE MARKET. I THINK THERE WILL BE REGULATION THAT DOES SHOW UP. IF YOU WANT TO BUILD ECONOMIC VALUE AND REAL VALUE FOR YOUR END CUSTOMERS, YOU NEED TO DEVELOP THAT ON THE BACK OF TRUST. THE WINNERS IN THIS ERA, THE COMPANIES WE CARE DEEPLY ABOUT AND SPEND TIME WITH, ARE THE ONES THAT PUT TRUST FIRST. THEY ARE NOT GOING TO RELEASE SOMETHING THEY THINK WILL CAUSE HARM TO SOCIETY. THEY ARE BUILDING TRUST. TIM: THAT IS A METRIC NOW WHEN YOU ARE LOOKING AT ALL THE COMPANIES ACROSS YOUR DESK, THAT IS A METRIC YOU ARE CONSIDERING FOR INVESTMENT? MATT: ABSOLUTELY. WE BACK FOUNDERS AND CARE DEEPLY ABOUT THE CULTURE AND VALUES OF THE COMPANIES WE BACK. WE THINK ABOUT WHAT A FUTURE STATE LOOKS LIKE FOR THEIR COMPANY. IT IS OF PARAMOUNT IMPORTANCE FOR US WHEN WE PARTNER WITH THESE VENDORS -- FOUNDERS. TIM: MATT WEIGAND JOINING US ON "BLOOMBERG TECH." AS DEMAND FOR ELDERCARE GROWS IN THE U.S., SO HAS THE TECHNOLOGY DEMAND. BLOOMBERG TECH'S ED LUDLOW TOOK A LOOK AT HOW HUMANOIDS ARE STEPPING IN FOR THIS WEEK'S EPISODE OF "WALL STREET WEEK." ED: THIS IS ABBIE. SHORT IN STATURE, COLORFUL IN APPEARANCE, AND PERHAPS AT THE FOREFRONT OF ELDERCARE. >> ANYTHING SPECIAL MAKING A GOOD DAY OR JUST ONE OF THOSE NICE ONES? ED: WELL, I AM MEETING YOU. >> YOU CHARMER. ED: THIS HUMANOID ROBOT DESIGNED TO BE INTELLIGENT -- EMOTIONALLY INTELLIGENT LIVES IN CALIFORNIA WHERE SHE VISITS AN ELDERLY CARE FACILITY ONCE A WEEK. TO INTERACT WITH RESIDENTS LIVING WITH DEMENTIA. >> TODAY WAS ONE OF OUR GROUP SESSIONS WITH OUR CUSTOMER. ABBIE COMES TO THE GROUP SESSIONS AND DOES A VARIETY ACTIVITIES. TODAY, SHE OPENED FLOWS FOR TAI CHI AND IN BETWEEN SHE TAKES SONG REQUESTS. WHAT SONG YOU BELTING OUT? >> WE WERE SINGING "COMING AROUND THE MOUNTAIN." >> THAT IS A CLASSIC. ED: ABBY IS ONE OF MORE THAN A DOZEN HUMANOID ROBOTS INTRODUCED IN THE PAST FEW YEARS. ABBIE WAS DESIGNED WITH A MORE SPECIFIC PURPOSE, HELPING CARE FOR AN AGING POPULATION. JENNIFER IS THE COO OF ITS CREATOR, ANDROMEDA. >> THERE ARE MANY ROBOTS BEING BILLED FOR UTILITY. LIKE DOING YOUR DISHES, FOLDING YOUR LAUNDRY, THAT IS FANTASTIC. THAT IS FOR OTHERS TO BUILD. WE ARE FOCUSED ON COMPANIONSHIP. WE FIND CUSTOMERS CARE ABOUT THE WELL-BEING OF THE RESIDENTS AT THAT IS WHY THEY ARE SO INTERESTED IN UTILIZING ABBIE AND SHE CAN WORK TOGETHER WITH THE STAFF. ED: OF ALL THE USE CASES FOR HUMANOIDS, ELDERCARE MIGHT BE AMONG THE MOST PROMISING. IT STARTS WITH THE MONEY INVOLVED, WHICH IN THE U.S. IS A STAGGERING SUM. >> IF WE LOOK AT OVERALL EXPENDITURES FOR LONG-TERM CARE NEEDS, IT IS ON THE ORDER OF $400 BILLION PER YEAR. THIS IS ABOUT 2% OF GDP. ED: THE DIRECTOR OF THE RETIREMENT SECURITY PROJECT AT BROOKINGS INSTITUTE. >> FOR EVERY 100 OVER 65, THERE ARE 24 PROVIDING CARE. 20 OF THOSE ARE UNPAID FAMILY MEMBERS OR FRIENDS WHILE FOUR ARE FORMAL HOME CARE OR NURSING WORKERS. CHANGING DEMOGRAPHICS, SMALLER FAMILY SIZES, PEOPLE MOVING FURTHER FROM FAMILIES, MORE WOMEN IN THE WORKFORCE, ALL OF THOSE ARE PUTTING PRESSURE ON THE SUPPLY OF PEOPLE AND FAMILY MEMBERS AVAILABLE TO PROVIDE CARE TO THOSE WHO NEED IT. TIM: CHECK OUT THE FULL EPISODE OF "WALL STREET WEEK" LATER TODAY I'M BLOOMBERG TV AND BLOOMBERG RADIO AT 6:00 EASTERN, ON THE TERMINAL, AND ONLINE. META KNOCKING ON THE DOOR OF A TRUE TRILLION DOLLAR -- $2 TRILLION VALUATION SENDS SHARES SOARING. WE HAVE DETAILS NEXT. THIS IS "BLOOMBERG TECH." TIM: LET'S TAKE A LOOK AT TODAY'S BIG NUMBER. $2 TRILLION. META WITHIN STRIKING DISTANCE OF THAT MARKET VALUE AFTER A STUNNING RALLY SO FAR THIS MONTH. THE STOCK ON PACE THIS SEPTEMBER FOR ITS BEST MONTH GOING BACK TO 2013. IT HAS BEEN FUELED BY EXCITEMENT AROUND ITS NEW AI ASSISTANT. THIS THROUGH YESTERDAY, UP MORE THAN 30%. RYAN VLASTELICA JOINS US. I WAS LOOKING AT CHARTS OF META PLATFORMS WHEN IT CHANGED ITS NAME FROM FACEBOOK TO MET UP, THE RALLY SINCE IT PIVOTED FROM WHAT MANY WOULD ARGUE WAS THE DISASTROUS RUN INTO THE METAVERSE INTO AI HAS BEEN STUNNING, PARTICULARLY OVER THIS PAST MONTH. WHAT CAN YOU TELL US? RYAN: THERE HAS BEEN A LOT OF OPTIMISM AROUND NEWS, WHICH IS MET -- MUSE, WHICH IS MET'S NEW ASSISTANT PROJECT. IT HAS DONE WELL IN TERMS OF DOWNLOADS. IT HAS GOTTEN STRONG REVIEWS. IT HAS BEEN MAKING WAVES ACROSS THE MARKET. WE HAVE SEEN A NUMBER OF CONSUMER STOCKS FALL AS PEOPLE WORRY ABOUT IF IT WILL DISRUPT BUSINESS MODELS, CANCELING SUBSCRIPTIONS, AND SO FORTH. IT HAS REIGNITED THE AI TRADE AND PEOPLE THINK MAYBE THE AGENTS ARE CATCHING ON WITH THE PUBLIC. THAT WILL REQUIRE MORE CPU'S, MORE INFRASTRUCTURE. AND IT HAS BEEN HELPING META. IT HAS HELPED TO VALIDATE THE IDEA ALL THE SPENDING THEY HAVE BEEN DOING ON AI IS PAYING OFF IN TERMS OF PRODUCTS PEOPLE WANT AND THEY WILL BE ABLE TO MONETIZE OVER TIME. TIM: LESS THAN SIX WEEKS AGO, SHARES WERE DOWN 18% FOR THE YEAR. THIS WAS AFTER WE GOT THE DISAPPOINTING REVENUE FORECAST IN LATE JULY. THE STOCK WAS AMONG THE 50 WORST PERFORMERS IN THE S&P THROUGH AUGUST 18. DID INVESTORS FORGET ABOUT THAT GUIDANCE? R I THINK THE FACT WE HAVE THIS NEW PRODUCT COMING OUT. SOME PEOPLE CALL IT A GAME CHANGER FOR THE STOCK. RAISING ESTIMATES -- I DON'T THINK THEY ARE RAISING ESTIMATES AGGRESSIVELY YET BECAUSE THE PROCESS OF MONETIZING NEWS WILL BE PLAYING OUT OVER THE COMING YEARS. RIGHT NOW THE FACT IT SAW SUCH A STRONG RECEPTION, SUCH STRONG ADOPTION, ALL OF THIS IS A PROMISING SIGN THEY WILL BE ABLE TO MONETIZE THIS GOING FORWARD. WE HAVE SEEN THIS FROM THE PAST -- IN THE PAST WITH OTHER ACQUISITIONS THEY HAVE MADE LIKE INSTAGRAM AND WHATSAPP WHICH WERE VERY POPULAR AND THEY WERE ABLE TO MONETIZE THEM OVER TIME. IT HAS A MASSIVE USER BASE AND A TON OF DATA TO BE BUILDING THINGS OFF OF. TIM: RYAN VLASTELICA IN CHICAGO, THANKS. CHECK OUT RYAN'S REPORTING ON THE BLOOMBERG TERMINAL AND BLOOMBERG.COM. THAT WILL DO IT FOR THIS EDITION OF "BLOOMBERG TECH." CHECK OUT OUR PODCAST ON THE TERMINAL AND ONLINE, ON APPLE, SPOTIFY, AND IHEART. THIS IS BLOOMBERG. ♪