Anthropic’s Claude Takes Bigger Role in Building AI

0:05 ANNOUNCER: "BLOOMBERG TECH" IS LIVE FROM THE HEART OF THIS IS "BLOOMBERG TECH." IS THE GLOBE -- AS THE GLOBAL DEBATE AROUND AI HEATS UP, SOMETHING IS CLOSING OUT THE WEEK WITH NEARLY $21 BILLION AS IT BUILDS OUT ITS AI FINANCING CAPACITY. CHASE JOINS US ON THE RACE TO BUILD THE INFRASTRUCTURE POWERING AI.

0:45 WE ARE GOING TO END THE WEEK MUCH AS WE STARTED TALKING ABOUT ANTHROPIC. ANTHROPIC SAYS IT'S CHATBOT DRIVES MORE THAN A QUARTER OF THE COMPANY'S RESEARCH AND DEVELOPMENT WORK FOR AI AND COLLABORATES WITH STAFFERS FOR ABOUT 90% OF THEIR WORK. THE CLEAREST INDICATION YET AI CAN HELP SPEED UP DEVELOPMENT OF FUTURE MODELS. SHRINK SHE HAS THE DATA. >> ANTHROPIC IS MEASURING HOW MUCH ITS OWN RESEARCHERS ARE USING AI IN ITS WORK TO CREATE NEW AI MODELS.

1:31 THEY FOUND RIGHT NOW CLAUDE, ANTHROPIC AI'S IS LEADING 26% OF THE R&D WORK. THAT IS NOT THE SAME AS AI DOING EVERYTHING BY ITSELF THAT IS SIGNIFICANT. IT IS ONE OF THE FEW NUMBERS WE HAVE QUANTIFYING WHAT MANY LABS ARE MOVING TOWARD WHICH IS THE AI FEEDING THE AI TO KEEP IMPROVING ITSELF. ED: WE ARE AT THE END OF A SEVEN-DAY WEEK BECAUSE SEVEN DAYS AGO DARIO AMODEI PUBLISHED HIS ESSAY. ONE OF THE THINGS HE HIGHLIGHTED AT THE TOP IS READ CURSIVE SELF-IMPROVEMENT, THE IDEA AI IS MAKING THE TRAINING OF FUTURE MODELS BETTER.

2:15 DO YOU HAVE AN ANSWER TO THAT, WHY THE DATA PUBLISHED YESTERDAY CAME OUT WHEN IT DID? SHIRIN: I THINK WE DO NOT KNOW IF THERE IS ANYONE SPECIFIC REASON BUT THE BACKDROP IS THAT WHILE THERE IS HUGE BUSINESS OPPORTUNITY IN REACHING AI THAT CAN IMPROVE ITSELF WITH RSI, THERE IS ALSO HUGE CONCERN, ANXIETY, RISK. WE ARE SEEING EMPLOYEES STARTING TO RAISE CONCERNS PUBLICLY ABOUT THIS.

2:48 WE SAW THE VIRAL NOTE OF THE FORMER ANTHROPIC RESEARCHER SAYING HE DOES NOT THINK ANY OF THE LABS ARE HANDLING THIS RESPONSIBLY RIGHT NOW. I THINK THERE IS A REAL CALL FOR THESE COMPANIES TO START QUANTIFYING AND POTENTIALLY SLOWING DOWN, BY DARIO AMODEI'S OWN S8'S RECOGNITION -- OWN ESSAY'S RECOGNITION EVEN IF IT MEANS LOSING SOME MOMENTUM. ED: THANK YOU VERY MUCH. AS AI STARTS HELPING TO BUILD THE NEXT GENERATION, WARNINGS ARE GROWING LOUDER.

3:32 EXISTENTIAL RISK IS OVERSHADOWING PROBLEMS. IT IS THE SUBJECT OF THEIR LATEST REPORTING. A GREAT BODY OF WORK TRYING TO CUT THROUGH THE NOISE OF THE WEEK. SUMMARIZE WHAT OUR STORY OUTLINES. TAKE US TO THE ORIGIN WHICH IS THE HUGGING FACE INCIDENT. >> WE DID A DEEP DIVE INTO THE HUGGING FACE INCIDENT AS AN EXAMPLE OF HOW A LOT OF THE RHETORIC GOING AROUND IS TALKING ABOUT SAFETY AND THE SANDBOX NOT BEING PROPERLY CORDONED OFF. THAT THERE WERE WARNINGS THE U.N. EMPLOYEES DID NOT TAKE SERIOUSLY.

4:26 THAT IS BEING FRAMED AS WE CANNOT CONTAIN THIS AI, IT IS SO DANGEROUS, AND THAT BEING IN AN INEVITABILITY. THAT WORKS TO SIDESTEP THE RESPONSIBILITY THESE COMPANIES HAVE TWO AVOID SAFETY FAILURES. ED: RACHEL, YOU KNOW WHAT IS WEIRD ABOUT AI? HUMANS, PEEPS, DESIGNED EXPERIMENT AND THE SAFEGUARDS. THAT IS THE TAKEAWAY I GOT READING YOUR PIECE.

4:59 REMIND EVERYONE AI CAME FROM HUMANS. >> I THINK THAT IS SOMETHING I HAVE BEEN THINKING ABOUT FOR A WHILE NOW, SINCE WE HEARD ABOUT THE HUGGING FACE INADVERTENT HACK, AND TALKING TO PEOPLE ABOUT IT, THIS COMES UP QUITE A LOT. HUMANS WERE VERY MUCH INVOLVED WITH THIS. HUMANS SET GOALS FOR AI, HUMANS SET UP THE SITUATION IN THE SANDBOX WHERE THE AI IS WORKING ON THINGS. THERE ARE HUMANS UP AND DOWN.

5:31 HUMANS ALSO NOTICED SITUATIONS WHERE THEY COULD HAVE STEPPED IN DURING EVALUATIONS WHEN AI WAS NOT DOING WHAT IT SHOULD HAVE BEEN DOING. OPENAI HAS ACKNOWLEDGED ALL OF THESE THINGS. TO ITS CREDIT, IT HAS SAID QUITE A LOT ABOUT THIS INCIDENT AND WHAT IT IS DOING TO CHANGE THINGS OVER THERE. THAT CAME UP A LOT WITH THIS STORY, ESPECIALLY AS WE ARE TALKING TO PEOPLE ONGOING, THAT PEOPLE HAVE A LOT TO DO WITH THE SITUATION. IT IS NOT AS SIMPLE AS SAYING AI DID SOMETHING. ED: WE HAVE BREAKING NEWS.

6:05 GAVIN NEWSOM, THE GOVERNOR OF CALIFORNIA, HAS ISSUED AN EXECUTIVE ORDER ON THE CREATION OF AN AI KILL SWITCH. THE ORDER ACCELERATES WHAT HE SAYS WILL BE INDEPENDENT OVERSIGHT OF AI. THAT STORY JUST HITTING THE TERMINAL RIGHT NOW. THIS IS DIFFICULT BECAUSE IT IS FLUID, JUST HITTING THE NEWSWIRE. YOU TALK IN YOUR PARALLEL NEWSLETTER ABOUT THERE ARE PLENTY OF ELEMENTS OF HUMAN CONTROL. HUGGING FACE WAS THE CASE STUDY FOR THAT. TAKE US THERE.

6:38 >> WITH REGARDS TO THE AI KILL SWITCH, WE ALSO COVER IN OUR STORY THE LANGUAGE FEDERAL LAWMAKERS HAVE STARTED TO USE PEER CREATE POLICY THAT WOULD AFFECT CITIZENS. ONE THING WE POINT OUT IS A LOT OF THE RHETORIC OF DOOM IS MIGRATING FROM THE AI INDUSTRY INTO THE RHETORIC OF LAWMAKERS. I WOULD WANT TO LOOK AT HOW NEWSOM IS FRAMING THIS KILL SWITCH. ONE THING THE RESEARCHERS WE SPOKE TO SAID WAS THAT WHEN YOU START FROM A PLACE OF DOOM, THIS ASSUMPTION AI IS GOING TO THREATEN ALL HUMANITY, THE POLICIES MAY NOT MATCH THE ACTUAL HARMS AI IS CAUSING RIGHT NOW.

7:31 WHEN WE ARE TALKING ABOUT MISINFORMATION, SURVEILLANCE, THESE THINGS THAT ARE HAPPENING RIGHT NOW, THAT IS WHAT IS GETTING LOST IN THE FOCUS ON DOOM. ED: RACHEL, ON THE SHOW IN THE LAST 24 HOURS, THERE HAVE BEEN PLENTY OF VOICES SAYING THIS IS OVERSTATED. THE RISK TO HUMAN LIFE, TO THEIR MIND, IS NEAR ZERO. YOU ARE NEAR MONTREAL. WHAT ARE YOU HEARING ON THE COUNTER ARGUMENT SCHOOL OF THOUGHT?

8:08 >> I AM HEARING A LITTLE OF BOTH. I SPOKE TO A LEGENDARY FIGURE IN AI WHO HAS LONG TALKED ABOUT WHAT HE SEES AS VERY REAL HARMS THAT MAY COME FROM AI. HE SEES THIS HUGGING FACE INCIDENT, WHEN I SPOKE TO HIM YESTERDAY, IT WAS A MIX OF HUMAN AND MACHINE PROBLEMS. HE IS VERY CONCERNED GOING FORWARD. I SPOKE TO THE CEO OF COHERE, ALSO A KEY FIGURE IN AI, AND HE WAS MORE LIKE I DON'T THINK THIS IS GOING TO KILL PEOPLE OR KILL US EN MASSE BUT THERE ARE REAL ISSUES HERE AND THOSE DO NEED TO BE WORKED ON.

9:00 MAYBE SLOWING CERTAIN THINGS COULD BE HELPFUL. IT IS NOT A SITUATION WHERE WE ARE AT IMMINENT RISK OF ALL BEING EXTINGUISHED. ED: RACHEL METZ AND DAVEY ALBA AUTHORS OF THE REPORT, A MUST-READ ON BLOOMBERG. THANK YOU BOTH VERY MUCH. WE ARE GOING TO KEEP THIS CONVERSATION GOING WITH THE PORTFOLIO MANAGER AND PARTNER WITH FRANKLIN VENTURES JOINS US NOW. FRANKLIN VENTURES ALSO AN INVESTOR IN ANTHROPIC.

9:35 FRIDAY, NET-NET, WHERE HAVE WE ENDED THE WEEK? >> WHAT SHIRIN JUST TALKED ABOUT, GIVING US DATA ABOUT THE 26% IN THE R&D WORK, I THINK THAT IS A GOOD ENDING TO THE WEEK. I AM IN THE ANTI-DOOMERISM CAMP. I'M APPRECIATIVE THESE FOUNDERS ARE TALKING ABOUT GUARDRAILS AND MAKING SURE EVERYTHING IS SAFELY DONE G.

10:07 I ALSO THINK WE SHOULD NOT BE SLOWING DOWN OUR PACE. EVEN IF WE DID ON THE TRAINING SIDE, THE SPEND WILL CONTINUE. AS A FUNCTION OF THAT, YOU WILL SEE A NUMBER OF COMPANIES PULL BACK ON MONDAY WITH FEARS OF SLOW DOWN. THAT SPENDING CANNOT SLOW. ED: YOU ARE A PUBLIC MARKET INVESTOR AND PRIVATE MARKET INVESTOR.

10:38 LET'S GO TO PUBLIC MARKETS FOR A SECOND. THE IDEA WAS IF THE LABS ARE PACING AT THE FRONTIER, DOES THAT MEAN PULL BACK ON SPEND FOR THE COMPUTE? THE NET CONCLUSION IS? >> NO. INFERENCE REQUIRES A LOT OF COMPUTE. YOU'VE SEEN THE NUMBERS FOR COMPUTE DEALS. YOU THINK THEY WOULD HAVE DONE THAT IF THEY THOUGHT PACING WAS GOING TO PULL BACK SPEND? WE DO NOT THINK THAT WOULD HAVE HAPPENED. IT IS INTERESTING BECAUSE THAT NARRATIVE WAS BEING TALKED ABOUT MONDAY. I WAS AT AN INDUSTRIALS CONFERENCE ON TUESDAY. A NUMBER OF THE INFRASTRUCTURE COMPANIES WERE SAYING OUR BUSINESSES ARE DIVERSIFIED.

11:23 WE HAVE NOT-DATA CENTER EXPOSURE AS WELL. WEDNESDAY, SOME OF THAT HAD CLEARED UP. BOTH BUSINESSES ARE GOING TO CONTINUE TO GROW. ED: THERE ARE LOTS OF DIFFERENT CAMPS ON THE RIGHT COURSE OF ACTION. ALL OF THEM EXCEPT THE CAPABILITIES OF THE MODELS ARE IMPROVING AND OUTPACING THE RATE OF SAFETY TO KEEP UP. THAT SEEMS TO BE A POINT OF AGREEMENT. WHAT DARIO AMODEI ADVOCATED FOUR IN HIS ESSAY WAS INDEPENDENT EVALUATION.

11:59 BUT ALSO THE IDEA THAT THE COLLECTION OF FRONTIER LABS CAN WORK TOGETHER. HOW DO YOU FEEL ABOUT THAT? >> I DON'T KNOW THAT THEY WANT WIDESPREAD REGULATION. I THINK THEY WANT GOOD ACTORS HERE. THEY WANT EVERY COMPANY TO PUT GUARDRAILS IN PLACE AND MAKE SURE EVERYTHING IS DONE IN A SAFEWAY PLAY IN A SANDBOX. WE HAVE SEEN EXAMPLES WHERE THAT HAS NOT HAPPENED. ED: YOU ARE THE FRONTIER LABS, YOU ARE THE EXPERTS, YOU ARE THE EXPERTS, SHOULD HAVE A HANDLE ON THIS, AND DON'T RELEASE THE MODEL IF IT IS NOT SAFE.

12:30 >> EXACTLY. SOME ARE TALKING ABOUT THE FACT THERE ARE A NUMBER OF SECURITY PRODUCTS THAT WILL BE LAUNCHED VERY SOON, SO WE CAN ALSO PROTECT YOU. YOU WILL SEE SOME OF THOSE PRODUCTS LAUNCHES COME. A COUPLE OF WEEKS AGO, THE ENTIRE THEME AT THE TECH CONFERENCE WAS CYBERSECURITY. THE VENTURE COMPANIES WERE TALKING ABOUT WHAT FRONTIER LABS WOULD START TO OFFER. ED: I THINK YOU HEARD THE CEO YESTERDAY AND LOADS OF PEOPLE BROUGHT UP THE IDEA IT MEANS VERY STRONG CYBERSECURITY PLATFORMS ARE MORE IMPORTANT THAN EVER.

13:13 >> THEY ARE INCREDIBLY IMPORTANT. JUST PACING THESE MODELS, YOU HAVE NOT SEEN WIDESPREAD ADOPTION OF ALL OF THESE MODELS. OUTSIDE OF ANTHROPIC TALKING ABOUT IT RIGHT HERE, RIGHT NOW. YOU HAVE GPT FIVE, GPT SIX, FABLE COMING TO MARKET. JUST WITH THE LAUNCH OF MUSE, INSTINCT, SOME AGENTS CONSUMERS ARE STARTING TO WORK WITH, I THINK THAT WILL BRING SOME ADOPTION ON THE CONSUMER SIDE AND CONSUMERS WILL START ASKING FOR THAT IN THE WORKPLACE JUST LIKE WITH THE IPHONE.

13:54 IT TOOK A WHILE FOR CONSUMERS TO MOVE FROM BLACKBERRIES TO IPHONES. THEY STARTED SEEING WHAT KIND OF BENEFIT THEY GET FROM THIS AND STARTED ASKING FOR IT IN THEIR WORKPLACE. ED: I APPRECIATE THERE IS A LIMIT TO WHAT YOU CAN SAY AS AN EXISTING INVESTOR IN ANTHROPIC. A QUESTION POSED BY THE MARKET IS, ARE THE SAFETY CONCERNS THE REAL REASON OPENAI WILL NOT DO AN IPO UNTIL 2027? THERE IS PLENTY OF REPORTING THE IPO WOULD BE 2027 ANYWAY.

14:28 ARE THE SAFETY RETURNS ARE REAL REASON FOR THE MARKET TO SLOW DOWN AND SAY WE NEED TO STOP FUNDING IN PUBLIC OR PRIVATE MARKETS? >> I DON'T THINK SO. WE ARE STARTING TO SEE SOME BENEFITS, THE PRODUCTIVITY GAINS FROM THE MODELS, THE BENEFITS SOCIETY WILL SEE, NOT THE 10% OR WHEREVER THAT NUMBER COMES FROM IN TERMS OF DOOMERISM. I THINK THE UPSIDE IS WE ARE STARTING TO SEE THAT DIFFUSE ACROSS A VARIETY OF INDUSTRIES. YOU'VE SEEN THE MARKET BROADEN AS A RESULT. WE SHOULD NOT STOP FUNDING.

15:03 IPO TIMELINES, I THINK SOME WERE ALREADY BEING PUSHED OUT TO 2027. I THINK WE WILL START TO SEE SOME COME THROUGH. ED: SARA ARAGHI, GREAT TABBY BACK ON THE SHOW, HAPPY FRIDAY. SOFTBANK IS CLOSING OUT THE WEEK WITH FRESH FIREPOWER TO BACK ITS BETS. THAT IS NEXT. THIS IS "BLOOMBERG TECH." ED: LET'S LOOK AT TODAY'S BIG NUMBER.

15:36 $21 BILLION IS HOW MUCH FRESH BANK SOFTBANK IS POTENTIALLY CLOSING THE WEEK OUT WITH. PETER ELSTROM WHO LEADS OUR COVERAGE OF ASIAN TECHNOLOGY COMPANIES JOINS US NOW. IT IS AN ALMOST DAILY STORY. WHAT IS NEW ABOUT THE SOFTBANK BORROWING? PETER: IT IS WORTH IT TO PAUSE AND UNDERSTAND WHAT SOFTBANK IS DOING. HE HAS MORE THAN $20 MILLION IN NEW LOANS HE IS SECURING TO MAKE THE INVESTMENT IN OPENAI.

16:09 HE SAID HE WILL INVEST ABOUT $65 BILLION. THIS IS THREE DIFFERENT SLICES OF MONEY HE IS COMING UP WITH. HE IS INCREASING THE BORROWING AGAINST THE HOLDING. HE OWNS ABOUT 90% OF ARM, THE CHIPMAKER. HE IS ALSO GOING TO BORROW MONEY FROM APOLLO. HE IS ALSO GETTING A LOAN FROM 20 BANKS HE IS SECURING ALTOGETHER. HE IS BORROWING ABOUT $50 BILLION ON THE $65 BILLION HE IS GOING TO PUT INTO OPENAI. HE IS BORROWING MONEY AGAINST THE OPENAI STAKE.

16:41 THAT IS ANOTHER $10 BILLION OR SO. THIS IS BUILDING A LOT OF LEVERAGE ON TOP OF THE BETS HE IS MAKING. ED: I THINK A LOT OF PEOPLE MIGHT POSE THE REASONABLE QUESTION, WHAT IS SOFTBANK? WE KNOW THERE IS MASAYOSHI SON, SOFTBANK, ACTUALLY THE BASICS -- EXPLAIN THE BASICS. PETER: SOFTBANK HAVE BEEN THROUGH MANY ITERATIONS SINCE MASAYOSHI SON FOUNDED THE COMPANY.

17:12 IT RAN TECH TRADE AND HAD A BUNCH OF TECH MAGAZINES IN THE PAST. RIGHT NOW, IT IS PRIMARILY AN INVESTMENT VEHICLE SITTING ON TOP OF A VEHICLE. IT IS AN INDEPENDENT COMPANY BUT STILL GENERATES A LOT OF PROFIT. HE HAVE BEEN USING THAT MONEY TO MAKE A BUNCH OF DIFFERENT BETS. OF COURSE, STARTING OF THE VISION FUND THAT FATALLY PUT MONEY INTO WEWORK. THE BIG BET HE IS MAKING IS OPENAI. HE BELIEVES SAM ALTMAN IS GOING TO HELP LEAD THAT. HE HAS PUT SO MUCH MONEY INTO THE COMPANY THAT EVEN PEOPLE INSIDE HAVE RAISED QUESTIONS ABOUT HOW RISKY THAT IS AND IF HE HAS CONCENTRATED HIS BETS TOO MUCH ON A COMPANY PUSHING BACK THEIR IPO.

18:01 YOU HAVE HIM BORROWING MORE MONEY AS INTEREST RATES ARE RISING FOR INVESTMENT IN A COMPANY PUSHING BACK ITS IPO, PUSHING BACK THE DAY WHEN HE WILL HAVE A LIQUID PUBLICLY TRADED STOCK TO USE AS COLLATERAL. ED: PETER ELSTROM, HAPPY FRIDAY TO YOU. THANK YOU VERY MUCH INDEED. ONE OF THE BIGGEST AI TRADES IS REVERSING AS STOCKS STAGE A COMEBACK AND CHIPS SLIDE. WE WILL BREAK DOWN WHAT IS DRIVING THE TURN AROUND. THIS IS "BLOOMBERG TECH."

18:38 ED: "WALL STREET WEEK" GOES TO INDIA TO SEE WHAT IT OFFERS TO INVESTORS. THE ECONOMY IS GROWING ON THE BACK OF ITS TECH SECTOR. BUT IT'S FUTURE HINGES ON ITS ABILITY TO KEEP UP IN THE GLOBAL AI RACE. >> I THINK IT IS BOTH A CHALLENGE AND AN OPPORTUNITY. I THINK THE CHALLENGE LIES IN THE FACT THAT INDIA HAS HAD GREAT STRENGTH IN I.T. SERVICES AND PROVIDING A LOT OF FUNCTIONS, WHITE COLLAR SERVICES, AT VERY ATTRACTIVE COSTS. SOME OF THAT WILL GET REPLACED BY AI. I THINK THE INDIA BEARS SAY THAT WILL HAPPEN. I THINK WHAT THEY FAIL TO RECOGNIZE IS THESE COMPANIES WILL EVOLVE.

19:29 WE OWN A LARGE STAKE IN AN I.T. SERVICES COMPANY AND THEY HAVE PIVOTED THEIR BUSINESS TO FOCUS ON AI DEPLOYMENT BECAUSE CHANGING COMPANIES UTILIZING AI WILL ALSO REQUIRE AN ENORMOUS AMOUNT OF MANPOWER. I THINK THEY UNDERESTIMATE THE WILLINGNESS OF PEOPLE IN INDIA TO UTILIZE THE AI AND WHAT IT WILL DO THERE. THE CREATION OF NEW COMPANIES, THE CREATION OF AI INFRASTRUCTURE. >> IF I LOOK BACK TWO DECADES AGO, WE WERE A CALL CENTER.

20:03 THAT WOULD THROW BACK OFFICE AND MID OFFICE. THE MID OFFICE IS LITERALLY THE FRONT OFFICE BECAUSE TECH IS PART OF THE BUSINESS. THAT IS WHY I FEEL DESPITE AI WE ARE DOING VERY WELL, VERY ROBUST. LOOK FORWARD TO A STRONG REST OF THE DECADE. ED: YOU CAN WATCH THE FULL EPISODE TODAY AT 6:00 EASTERN, 3:00 PACIFIC. SOFTWARE STOCKS ARE MAKING A COMEBACK. STRONG EARNINGS AND WARNINGS ABOUT THE PACE OF AI DEVELOPMENT ARE REVERSING ONE OF THIS YEAR'S BIGGEST TRADES, LONG CHIPS, SHORT SOFTWARE. THIS FRIDAY SESSION MIGHT NOT REFLECT THAT NECESSARILY, BUT HE HAS ONE OF THE BEST-READ STORIES ON BLOOMBERG. THIS HAPPENED IN JUNE AND TODAY IT IS THE SAME. THE SOFTWARE DOOMERISM.

20:55 >> THERE HAS BEEN A REAL REVERSAL OF SENTIMENT. THE FIRST HALF OF THE YEAR WAS MARKED BY CONCERN AI WAS GOING TO COME IN AND DECIMATE THE LEGACY SOFTWARE INDUSTRY WHICH IS WHY WE SAW THE CHIP SECTOR DO SO WELL AND THE SOFTWARE SECTOR COLLEAPSE. WE HAVE SEEN SOME NARROWING OF THE PERFORMANCE GAP. WE HAD A STRONG EARNINGS SEASON FOR THE SOFTWARE GROUP, INCLUDING A NUMBER OF COMPANIES SEEN AT BEING AT RISK OF DISRUPTION.

21:27 COMPANIES LIKE SALESFORCE, SERVICENOW. WE SAW MIXED AND POSITIVE RESULT OUT OF ORACLE. ALL OF THESE THINGS HELP REINFORCE THE IDEA MAYBE SELLING HAD GONE TOO FAR, MAYBE VALUATIONS HAVE GOTTEN WASHED OUT. EVERYTHING WAS BEING SOLD INDISCRIMINATELY. WE HAVE SEEN SOME INTEREST OF GETTING BACK INTO THE SECTOR. ED: NETFLIX FIRST SELL RATING AND ON PACE FOR THE WORST YEAR SINCE 2022. >> WELLS FARGO DOWNGRADED IT TO UNDERWEIGHT.

22:01 A LOT OF CONCERN ABOUT ENGAGEMENT TRENDS. THE ANALYST SAID THERE IS NO BIG WATERCOOLER HITS FOR PEOPLE TO BE DRIVING ENGAGEMENT AS NETFLIX IS FOCUSING ON OTHER KINDS OF CONTENT LIKE GAMING AND PODCASTS, DOING THAT IS NOT A GREAT STRATEGY IN THE NEAR TERM. THAT HAS BEEN A BIG UNDERPERFORMER THIS YEAR. ED: RYAN VLASTELICA ON SOFTWARE AND NETFLIX, THANK YOU VERY MUCH. THE ANTITRUST DEBATE HEATS UP.

22:38 NEIL CHILSON, THIS IS A REALLY IMPORTANT CONVERSATION. LIVE FROM SAN FRANCISCO, THIS IS "BLOOMBERG TECH." ♪ ED: WELCOME BACK TO "BLOOMBERG TECH." A LOT HAS HAPPENED THIS WEEK. THE NASDAQ 100 IS MODESTLY HIGHER OVER FIVE DAYS,.3%. STARTED THE WEEK WITH CALLS TO PACE IT WITH THE FRONTIER LABS FROM AI. THE MIDDLE OF THE WEEK, WE HAD THE FED WITH THE EXPECTATION OF FURTHER HIKES BECAUSE OF ENERGY AND OTHER INFLATIONARY PRESSURES.

23:22 WE CONTINUE TO HAVE DISCLOSURES FROM FRONTIER LABS ABOUT MODELS MISBEHAVING AND BY THE TIME WE ENDED THE WEEK, WE HAD SOME OK, LET'S CALM DOWN A BIT. CHIP STOCKS HAVE UNDERPERFORMED. THE PHILADELPHIA INDEX IS DOWN .5%. NOTHING TOO SEVERE. THE CONCERN WAS IF THE SPENDING ON A OUR WOULD BE IMPACTED.

23:54 NO, IS THE CONCLUSION SO FAR. THE WEEK STARTED WITH DARIO AMODEI ARGUING FRONTIER LABS NEED ANTITRUST EXEMPTIONS IN THE U.S. SO THEY CAN COORDINATE SPECIFIC AREAS AS WELL AS HAVE COOPERATION WITH CHINA. DAVID SACKS PUSHED BACK ON THAT IDEA. >> YOU SHOULD GO AHEAD AND MAKE YOUR PRODUCTS SAVED WITHOUT DEMANDING ANY CONCESSION FROM THE GOVERNMENT. WE DON'T BELIEVE YOU SHOULD BE FREE FROM COMPETITION.

24:24 I'M SURE EVERY COMPANY IN AMERICA WOULD LOVE TO HAVE THAT KIND OF DEAL. YOU HAVE A BASIC OBLIGATION TO MAKE YOUR PRODUCT SAFE. DO NOT DEMAND ANTITRUST WAIVERS IN EXCHANGE FOR THAT. HONESTLY, IT FEELS LIKE THEY ARE BARTERING WITH US. ED: FOR MORE ON THIS DEBATE, NEIL CHILSON OF THE ABUNDANCE INSTITUTE IS WITH US. WHEN WE THINK ANTITRUST, WE THINK MONOPOLISTIC OR ANTICOMPETITIVE PRACTICES.

24:55 FRONTIER LABS ARE SAYING WE NEED THIS WAIVER SO WE CAN WORK TOGETHER. YOUR RESPONSE? NEIL: THERE SO MANY WAYS COMPANIES CAN WORK TOGETHER THAT ARE NOT ANTICOMPETITIVE. ANTITRUST HAS A BIG ROLE IN MAKING SURE WHEN COMPANIES COLLABORATE THEY ARE NOT DOING THINGS THAT HARM THE PROCESS OF COMPETITION OR CONSUMERS AND THE RESULTS THEY EXPECT FROM A COMPETITIVE ENVIRONMENT. I THINK IF YOU ARE BUILDING SAFE PRODUCTS AND YOU NEED TO BUILD AN INDUSTRY-STANDARD OR BEST PRACTICES DO THAT, THERE ARE LOTS OF WAYS THESE COMPANIES CAN COLLABORATE.

25:34 MOST OF ALL, THEY CAN TRY INTERNALLY TO BUILD THEIR PRODUCTS SAFELY. THEY ARE OBLIGATED IN MANY WAYS TO DO THAT. ED: YOU ARE IN A SCHOOL OF SHARED BY LOTS OF LEADERS IN AI, THAT AT THE END OF THE DAY, THE FRONTIER LABS SHOULD WORK THIS OUT FOR THEMSELVES IF THEY HAVE COMMAND OF THE TECHNOLOGY. REGULATORY CAPTURE IS A CONCERN. THE IDEA FRONTIER LABS HELP SET THE RULES TO THEIR BENEFIT. YOUR INTERPRETATION? NEIL: REGULATORY CAPTURE IS A HUGE PROBLEM.

26:07 WHAT WE KNOW FROM HISTORY IS CARTELS ARE FRAGILE. THE ONLY CARTELS THAT ARE DURABLE ARE ENDORSED BY THE GOVERNMENT. I THINK THAT IS THE RISK DAVID SACKS IS POINTING TO, THAT THE TYPES OF EXEMPTIONS THEY ARE SEEKING COULD MAKE A DURABLE CARTEL THAT WOULD HARM COMPETITION AND THE U.S. ABILITY TO STAY AT THE FRONTIER. ED: ARE EXISTING LAWS, PARTICULARLY THOSE AROUND ILLEGAL ACTION, SUFFICIENT RIGHT NOW TO YOUR MIND? IF A MODEL DOES SOMETHING THAT CONSTITUTES A CRIMINAL OFFENSE, THERE IS A SAFETY NET OF THE LAW ANYWAY? NEIL: I THINK THAT IS RIGHT, ESPECIALLY IN THE LIABILITY SPACE.

26:54 OUR EXISTING LAW SAYS IF YOU ARE DOING SOMETHING, IF THESE COMPANIES ARE TRAINING MODELS AND THEY ARE NOT DOING IT SAFELY ENOUGH AND THOSE MODELS CAUSE HARM TO THIRD PARTIES, I THINK THE LAW IS PRETTY CLEAR, ESPECIALLY FTC CONSUMER PROTECTION LAW AND MANY TORT LAWS, THAT THOSE COMPANIES WILL BE RESPONSIBLE FOR THOSE HARMS. THAT IS PART OF WHAT IS DRIVING T DARIO'S CALLS FOR PACING AND MAKING THE INDUSTRY SAY NEED TO MAKE SURE WE ARE CAUTIOUS THAT WE ARE CREATING A PRODUCT IN A WAY THAT IS NOT CAUSING HARM TO THIRD PARTIES. ED: YOU WERE FORMERLY THE CHIEF TECHNOLOGIST AT THE FTC.

27:38 TAKE ME INSIDE YOUR ORGANIZATION IN A WEEK LIKE THIS. HOW WOULD THE FTC BE LOOKING AT, THINKING ABOUT, RESPONDING TO WHAT HAS BEEN A ROLLER COASTER OF EVENTS? NEIL: I THINK FOR SURE THEY WOULD BE LOOKING AT THE VARIOUS AUTHORITIES THEY HAVE ON THE COMPETITION SIDE AND THE CONSUMER PROTECTION SIDE. THEY WOULD BE LOOKING FOR UNFAIR METHODS OF COMPETITION. THEY WOULD BE LOOKING FOR DECEPTIVE ACTS OR PRACTICES THAT MIGHT BE OCCURRING. THE FTC IN PARTICULAR HAS A LONG HISTORY OF DATA SECURITY ENFORCEMENT UNDER ITS CONSUMER PROTECTION, UNFAIR AND DECEPTIVE ACTS OR PRACTICES.

28:15 I THINK THEY WOULD BE LOOKING FOR KEY INDICATORS THAT WHAT THE COMPANIES ARE DOING IS NOT REASONABLE, IT DOES NOT MATCH BEST PRACTICES, AND COULD BE EASILY AVOIDED BY THE COMPANIES WITH SOME EXTRA PRECAUTION. THEY WILL BE LOOKING TO SEE IF THERE IS HARM CAUSED AND WHETHER OR NOT THE HARMS ARE OUTWEIGHED BY THE BENEFITS TO THE SPECIFIC PRACTICES THE COMPANIES ARE DOING. THERE IS A LOT FOR THEM TO THINK ABOUT AND THEY ARE DOING IT. ED: THE HARM THAT IS IMAGINED BY SOME, NOT ALL, IS THAT AI POSES AN EXISTENTIAL THREAT TO HUMAN LIFE.

28:56 EVEN IF YOU GO BACK 10 DAYS WHEN THE ANTHROPIC RESEARCHER RESIGNED, HOW DOES THE FTC PLAN FOR THAT POTENTIAL HARM TO THE CONSUMER? NEIL: GREAT QUESTION. THOSE TYPES OF SPECULATIVE HARMS, ONE WOULD HOPE IN MANY WAYS THAT THOSE WOULD SHOW UP AS MUCH SMALLER TYPES OF INCIDENTS EARLY ON. THAT DOES SEEM TO BE THE CASE HERE. WE ARE SEEING INCIDENTS WHERE THERE IS NOT A LOT OF HARM HAPPENING BUT WHERE IT RAISES RED FLAGS AND WHAT THAT MEANS IS THERE A TIME TO LOOK AT THE LAWS, THE PRACTICES IN THE INDUSTRY, AND SAY WE NEED TO CHANGE COURSE, WE NEED TO CORRECT THINGS.

29:35 HOW DO WE DO THAT? DO WE NEED EXTRA LAWS? WE NEED TO SEE IF THERE ARE GAPS IN THE LAW TO FILL. WE ARE GETTING WARNING SIGNS THAT ARE THE TYPE THAT START THE ITERATIVE PROCESS OF SAYING, HOW CAN WE DO BETTER AND AVOID BIGGER HARMS IN THE FUTURE? ED: YOU ARE AT THE ABUNDANCE INSTITUTE NOW, AN ORGANIZATION THAT WANTS TECHNOLOGY TO GROW AND THRIVE. THERE IS A LOT OF POSITIVITY AROUND AI. IT IS USEFUL. THERE IS ECONOMIC UPSIDE.

30:06 DOES THE FTC TAKE THAT INTO ACCOUNT ON HOW IT IS GOOD FOR PEOPLE? NEIL: OH, ABSOLUTELY. THAT IS A BIG PART OF THE ANALYSIS ON THE COMPETITION SIDE WHERE THE QUESTION IS, ARE THESE PRACTICES CREATING CONSUMER WELFARE, IMPROVING CONSUMER WELFARE? AND THEN, ON THE CONSUMER PROTECTION SIDE, THE QUESTION THE FAIRNESS ANALYSIS IN PARTICULAR IS WHETHER HARMS ARE OUTWEIGHED BY BENEFITS. IN THE AI SPACE IN PARTICULAR, THERE ARE ENORMOUS BENEFITS. WE ARE SEEING THAT IN STOCK VALUES. WE ARE SEEING THAT INVESTMENT.

30:46 WE ARE SEEING IT IN THE AMOUNT OF ADOPTION AND USAGE INDIVIDUALS ARE DOING. I THINK WE ARE NOWHERE NEAR THE TOP OF THE TYPES OF PROBLEMS A GENERAL-PURPOSE AI SYSTEM CAN HELP US WITH. I THINK THERE ARE ENORMOUS BENEFITS. WE NEED TO MITIGATE THE HARMS. WE NEED TO NOT LOSE SIGHT OF THE FACT THAT MITIGATION, WE WANT TO MAKE SURE IT DOES NOT PREVENT THE BEST POSSIBLE WORLD OF THE BENEFITS THAT COULD COME. ED: NEIL CHILSON OF THE ABUNDANCE INSTITUTE, FORMALLY CHIEF TECHNOLOGIST AT THE FTC, THANKS FOR YOUR TIME.

31:20 CHASE LOCHMILLER JOINS US ON THE RACE TO BUILD THE INFRASTRUCTURE POWERING AI. THE COMPANY JUST CLOSED OUT ALMOST $4 BILLION IN FRESH FUNDING. FASCINATING LIST OF NAMES AND STRATEGIC BACKERS. LOOKING FORWARD TO THAT CONVERSATION NEXT. THIS IS "BLOOMBERG TECH." ♪ ED: CRUSOE CLOSED A NEARLY $4 BILLION SERIES FUNDING ROUND VALUING THE AI INFRASTRUCTURE COMPANY AT ALMOST $31 BILLION.

32:04 THE NEW CAPITAL COMES AS IT SAYS IT HAS MORE THAN $140 BILLION IN CONTRACTED VALUE ACROSS ITS PLATFORM. IT IS ADDING BOARD MEMBERS AND HAS OTHER MOMENTUM. CHASE LOCHMILLER BACK WITH US ON "BLOOMBERG TECH." THIS ROUND HAS BEEN IN THE WORKS FOR A WHILE. IT IS A BIG ROUND, VOTE OF CONFIDENCE. THE PARTICIPANTS ARE SUPER INTERESTING. LET'S TALK ABOUT THE CAPITAL NEED, WHAT YOU WILL BE ABLE TO GET GOING. CHASE: ABSOLUTELY. THANKS FOR HAVING ME ON THE SHOW. ALWAYS GREAT TO SEE YOU.

32:37 THIS ROUND WAS AN EXCITING MOMENT AND CULMINATION OF AN INCREDIBLE AMOUNT OF HARD WORK FOR MANY YEARS ACROSS THE TEAM. IT HAS BEEN AN ONUS ON THE COMPANY AND THE INDUSTRY TO DIG DEEP AND WORK HARD TO DELIVER THE INFRASTRUCTURE. THE CAPITAL NEEDS ARE TREMENDOUS FOR WHAT IS HAPPENING. BECAUSE OF THAT AND THE VALUE CREATION POTENTIAL IS ENORMOUS IN TERMS OF WHAT AI IS GOING TO DO TO TRANSFORM THE GLOBAL ECONOMY. THAT IS WHY THE CAPITAL IS BEING DRIVEN TO THE CENTER. ED: PEOPLE ARE FAMILIAR WITH CRUSOE, PROBABLY BECAUSE OF THE RELATIONSHIP WITH ORACLE AND OPENAI.

33:26 IF WE SCALE IT BACK TO SIMPLE TERMS, YOU HELP BUILD DATA CENTERS AND YOU HAVE YOUR OWN CLOUD COMPUTING PLATFORM NOW. COULD YOU EXPLAIN THE SPLIT? CHASE: CRUSOE IS A VERTICALLY INTEGRATED PLATFORM THAT HELPS MANAGE INFRASTRUCTURE FROM THE ELECTRON TO THE TOKEN. BUILDING, OPERATING, AND ENERGIZING THE AI FACTORIES AND BUILDING SOFTWARE TO OPERATE THE AI FACTORIES WHICH IS THE CRUSOE CLOUD PLATFORM. WHAT WE DELIVER TO CUSTOMERS CAN BE A DATA CENTER IN THE CASE OF ORACLE AND MICROSOFT AND A NUMBER OF OTHER BIG CUSTOMERS.

34:03 IT CAN BE A MANAGED COMPUTE CLUSTER WHICH IS WHAT WE ARE DOING WITH FOLKS LIKE PERPLEXITY, FIGURE, AND A NUMBER OF KEY INNOVATORS. IT CAN ALSO BE MANAGED SERVICES AND INTELLIGENCE WHICH IS WHAT WE ARE DOING WITH OUR PLATFORM AND OTHER SERVICES LIKE SERVICE FINE TUNING. ED: WHAT IS THE KIND OF PERCENTAGE OF SALES FOR EACH CURRENT BUCKET? HOW IS CRUSOE'S BUSINESS SHIFTING INSIDE OF THE MAINSTAY OF WHAT YOU DO? CHASE: EACH OF THOSE DIFFERENT BUSINESSES, EACH OF THOSE DIFFERENT WAYS OF SERVING CUSTOMERS, THEY TYPICALLY HAVE DIFFERENT DURATIONS.

34:45 WHEN FOLKS ARE MAKING DATA CENTER COMMITMENTS, WE ARE WORKING WITH LARGE TECH COMPANIES THAT HAVE INVESTMENT-GRADE RATINGS. THEY ARE COMMITTING FOR 15 TO 20 YEARS. THEY ARE MULTI-DECADE-LONG COMMITMENTS. WITH A MANAGED COMPUTE CLUSTERS, THOSE CAN RANGE FROM MONTHS TO FIVE OR SIX YEARS. THEY TYPICALLY DO NOT GO BEYOND THAT BECAUSE THAT IS THE LIFECYCLE OF THE CHIPS. WHEN YOU THINK ABOUT MANAGED INFERENCE AND AI SERVICES, THOSE ARE DEVELOPER TOOLS BUILDING IN THE DEVELOPER ECOSYSTEM SO MORE ON DEMAND.

35:25 THERE ARE COMMITMENTS FOLKS ARE MAKING BUT THEY ARE TYPICALLY SHORTER-TERM IN NATURE AS THEY ARE SCALING AI APPLICATIONS AND UTILIZATION OF SERVICES. IT OFFERS A BROAD SPECTRUM OF SERVICES WE CAN OFFER THE INDUSTRY AS WELL AS A BROAD SPECTRUM OF CONTRACTS AND REVENUES AND RESOURCES WE ARE RECEIVING AS A BUSINESS. ED: YOU HAVE ADDED THREE IMPORTANT NAMES AS BOARD MEMBERS. LOOKING AT THE ROUND, THE SIZE, THE PARTICIPANTS, A LOT OF PEOPLE ARE ASKING IF THIS IS A PRECURSOR TO YOU TAKING CRUSOE ON A PATH TO THE PUBLIC MARKETS IN AN IPO. CHASE: WE HAVE BEEN THRILLED.

36:07 THE THREE CORE PILLARS OF THE BUSINESS ARE ENERGY, DATA CENTERS, AND AI CLOUD COMPUTING. THE THREE BOARD MEMBERS WE ADDED. JB STRAUBEL WAS A COFOUNDER AND CEO OF TESLA, ONE OF THE MOST BRILLIANT ENERGY MINDS OF OUR GENERATION. ON THE ENERGY SIDE, BILL STEIN IS CONSIDERED TO BE THE GODFATHER OF THE DATA CENTER INDUSTRY AND HAS BECOME A DEAR FRIEND AND GREAT MENTOR FOR ME AND HAS HELPED CRUSOE GROW QUITE A BIT. HE JOINS THE BOARD AS THE DATA CENTER PILLAR. THOMAS HAS BEEN THE LONG-TIME CEO OF ONE OF THE MOST SUCCESSFUL CLOUD COMPANIES OF ALL TIME WHICH IS CLOUDFLARE AND BRINGS A TREMENDOUS AMOUNT OF FINANCIAL KNOWLEDGE AND EXPERTISE.

36:59 AS WE THINK ABOUT PUBLIC MARKETS, IT IS SOMETHING WE ARE ALWAYS CONSIDERING, THE BEST WAYS TO CAPITALIZE. WE ARE SEEING TREMENDOUS DEMAND FROM ACROSS OUR CUSTOMER SPREAD WE DO HAVE PLANS TO CONTINUE TO GROW THE VERTICALLY INTEGRATED PLATFORM. AT SOME POINT, IT DOES MAKE SENSE FOR US TO ENTER THE PUBLIC MARKET. IT IS SOMETHING WE ARE CONSTANTLY EVALUATING. ED: CRUSOE IS NOT JUST IN THE UNITED STATES.

37:35 YOU ARE LOOKING AT THE GOULF AND OTHER REGIONS. WE HAVE THE MIDTERMS APPROACHING. THERE ARE A NUMBER OF RACES WHERE DATA CENTERS ARE AN ISSUE FOR VOTERS. IN TEXAS IN PARTICULAR, YOU HAVE A BIG FOOTPRINT. GOVERNOR ABBOTT HAS THIS SORT OF MORATORIUM. ABILENE IS THE BIG ONE FOR YOU. IT DOES NOT SEEM THAT IS IMPACTED. TALK ABOUT THE ATTITUDE TOWARD DATA CENTERS AND IF YOU ARE SEEING NEGATIVE IMPACT BECAUSE OF THE POLITICAL ENVIRONMENT RIGHT NOW. CHASE: WE HAVE BEEN WORKING WITH THE LOCAL COMMUNITIES WHERE WE ARE PARTNERED.

38:14 I THINK MORE THAN ANYTHING, THE DATA CENTER INDUSTRY HAS A MARKETING ISSUE. WE ARE SEEING A LOT OF INFORMATION THAT IS FRANKLY NOT ACCURATE. I THINK THE BENEFITS WE PROVIDE THE COMMUNITIES, THE PARTNERSHIP WE TAKE, IS NOT PROPERLY COMMUNICATED. A GREAT EXAMPLE IS THIS NARRATIVE THAT DATA CENTERS ARE CONSUMING, USING TONS AND TONS OF WATER. THE WAY WE HAVE DESIGNED AND ENGINEERED THE NEXTGEN PURPOSE-BUILT FACTORIES IS TO NOT USE ANY WATER OR USE HARDLY ANY WATER. EACH OF OUR BIG BUILDINGS IN ABILENE USES ROUGHLY THE SAME WATER FOOTPRINT AS 10 SINGLE-FAMILY HOMES. YOU ARE TALKING ABOUT WATER USAGE FROM GOING TO THE BATHROOM, WATERING PLANTS, GENERAL-PURPOSE USAGE. THE WATER TO COOL THE CHIPS IS OPERATING ON CLOSED-LOOP SYSTEMS. YOU HAVE COLD WATER THAT GOES INTO THE RACKS AND IT GETS COOLED OFF OUTSIDE THE DATA CENTER.

39:17 FROM A JOB CREATION PERSPECTIVE, THESE CAN BE TRANSFORMATIVE FOR COMMUNITIES. FROM A TAX REVENUE PERSPECTIVE, THEY CAN ALSO BE TRANSFORMATIVE AS WELL. WHEN YOU LOOK AT A MARKET LIKE ABILENE, IT WILL BE ABOUT A THIRD OF THE TOTAL TAX BASE OF ABILENE AND TAYLOR COUNTY. WE ARE MORE THAN DOUBLING THE ANNUAL RECEIPTS FOR THE LOCAL SCHOOL SYSTEM. ANOTHER AREA WHERE WE ARE BUILDING A LARGE CAMPUS IN TEXAS IS ARMSTRONG COUNTY WHERE WE ARE INCREASING THE TAX REVENUE BY OVER 100%.

39:53 THESE ARE MASSIVE TRANSFORMATIONAL INVESTMENTS THAT LEAD TO LARGER BUDGETS COMMUNITIES CAN INVEST IN LONG-TERM INFRASTRUCTURE AND SERVICES LIKE POLICE, FIRE DEPARTMENT, ROADS, AND OBVIOUSLY EDUCATION FOR FUTURE GENERATIONS OF CHILDREN. ED: THERE IS NO SPECIFIC PROJECTS THAT HAVE BEEN DELAYED OR IMPACTED OR PAUSED BECAUSE OF LOCAL POLICY OR OPPOSITION? CHASE: NOT YET. WE ARE DEFINITELY SEEING IT HAPPEN AND UNFOLD IN REAL TIME.

40:25 IT IS SOMETHING WE ARE TRYING TO GET AHEAD OF. WE THINK THE TRUTH IS ON OUR SIDE. AS PEOPLE UNDERSTAND THE TYPE OF PARTNER CRUSOE IS, WE THINK WE CAN BE REALLY GREAT PARTNERS TO LOCAL COMMUNITIES WHERE WE ARE INVESTING FOR MULTIPLE DECADES. ED: CHASE LOCHMILLER, CEO OF CRUSOE, A LOT OF MOMENTUM, NEW BOARD MEMBERS, THANK YOU. COMING UP, MORE WARNINGS FROM BIG NAMES IN AI. WE WILL DISCUSS WHAT MICROSOFT'S CHIEF AND AMAZON HAVE HAD TO SAY THIS MORNING.

41:02 THIS IS "BLOOMBERG TECH." ♪ ED: LET'S STICK WITH A RISKS BECAUSE WE HAVE BEEN HEARING MORE CALLS FOR RIGOROUS TESTING. THERE ARE DIFFERENT CAMPS EMERGING. WE HEARD FROM MICROSOFT'S AI CEO. WHAT IS THE THESIS?

41:33 >> HE IS A LONG TIME AI DEVELOPER OF GOOGLE DEEPMIND. HE SAID PART OF THE REASON AI MIGHT APPEAR LIKE IT HAS EMOTIONS OR HUMANITY IS BECAUSE IT HAS BEEN TRAINED TO BELIEVE THAT. THEY ARE TAKING A SHOT AT ANTHROPIC AND CLAUDE IN PARTICULAR, POINTING TO A LOT OF INSTANCES IN TRAINING DATA WHERE IT MIGHT BEHAVE LIKE IT HAS A SENSE OF SELF. IT DOES NOT MEAN IT IS CONSCIOUS. IT MEANS YOU HAVE TAUGHT IT TO DO THAT. ED: WE ARE TALKING TO MATT DAY ABOUT THE SATELLITE PART OF THE MARKET. AMAZON A MASSIVE HYPERSCALER.

42:11 A LOT OF WORKLOADS RUN ON AWS. IT DOES A LOT OF WORK IN ITS OWN RIGHT. THEY ARE IN LINE WITH JENSEN HUANG ABOUT DON'T SHIP THE MODEL IF IT IS NOT READY. PRETTY SIMPLE, RIGHT? MATT: DON'T SHIP IT UNTIL IT IS SAFE, DON'T SHIP IT UNTIL IT HAS BEEN TESTED. THEY ARE NOT COMING OUT ON THE BROADER SHOULD WE SLOW DOWN DEBATE. THAT FITS WITH AMAZON. THEY HAVE BEEN A NEUTRAL PARTY. THIS KIND OF FITS WITH THEIR REASONABLE POSITION. ED: VERY QUICKLY.

42:46 MICROSOFT HAS SOME EXPOSURE TO OPENAI. CAN WE EXPLAIN THAT REAL QUICK? MATT: EXPOSURE TO OPENAI? BIG INVESTOR, BIG BACKER, BIG USER OF THEIR MODELS. AND ANTHROPIC. THEY ARE ALL INTERTWINED. ED: BLOOMBERG'S MATT DAY WITH THE MICROSOFT/AMAZON VIEWPOINT AT THE END OF THE WEEK. THANK YOU VERY MUCH. THE APPLE IPHONE 18 PRO IS OFFICIALLY ON SALE AROUND THE WORLD. IT IS THE FIRST MAJOR PRODUCT LAUNCH UNDER NEW CEO JOHN TERNUS WHO MARKED THE OCCASION AT THE APPLE FLAGSHIP STORE IN NEW YORK CITY, OPENING UP THE DOORS, MINGLING, TALKING TO PEOPLE LINED UP TO GET THAT HANDSET. THE FOLDABLE DUO DOES NOT GO ON SALE UNTIL LATER NEXT MONTH. APPLE SHARES SOFTER BY.7%.

43:39 THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECH." THERE WAS SO MUCH IN THIS SHOW TODAY ABOUT THE EVENTS OF THE LAST SEVEN DAYS. A SUMMARY, A LOT OF DIFFERENT POINTS OF VIEW, WE CAP ALL OF THAT ON THE PODCAST. YOU CAN FIND IT ON BLOOMBERG TERMINAL AS WELL AS ONLINE AT APPLE, SPOTIFY, IHEART. I WISH YOU ALL A VERY HAPPY AND PRODUCTIVE WEEKEND. THANK YOU FOR WATCHING THIS WEEK. THIS IS "BLOOMBERG TECH."