'Bloomberg Technology' Full Show (05/23/2023)

>> FROM THE HEART OF WORK INNOVATION, MONEY AND POWER

COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG

TECHNOLOGY WITH CAROLINE HYDE AND KEN LUDLOW.

♪

SCARLET: I AM SCARLET FU IN FROM CAROLINE HYDE A BLOOMBERG'S

WORLD HEADQUARTERS IN NEW YORK. ALEX:

I'M IN FOR ED LUDLOW IN SAN FRANCISCO, THIS IS BLOOMBERG

TECHNOLOGY. COMING UP, WE WILL HEAR FROM

THE CEO OF TIKTOK AS THEY SUE MONTANA FOLLOWING STATE

DECISION TO END THE POPULAR APP, WHAT STEPS ARE THEY TAKING

TO ALLEVIATE U.S. SCRUTINY? PLUS, WE WILL SET THEM OF THE

CFO OF ZOOM AS THE COMPANY FACES GROWTH HURDLES WHEN IT

COMES TO ENTERPRISE CUSTOMERS. SCARLET:

AND WE WILL SPEAK TO EXECUTIVES FROM AMAZON AND ADOBE TO

DISCUSS PRODUCT LAUNCHES, GENERATIVE AI IN THE STATE OF

THE CONSUMER. ALL THAT AND MORE COMING UP.

FIRST, LET'S CHECK THE FINANCIAL MARKETS.

IT'S ANOTHER DAY OF MODEST MOVES IN U.S.

EQUITIES BECAUSE IT'S GROUNDHOG DAY WHEN IT COMES TO THE BIG

THEMES, DEBT CEILING TALKS, NO AGREEMENT YET EVEN THOUGH WE

ARE ABOUT NINE DAYS AWAY FROM THE JUNE 1 X DATE WHEN

WASHINGTON RUNS OUT OF CASH. PRESIDENT BIDEN AND KEVIN

MCCARTHY, THE SPEAKER OF THE HOUSE ARE SCHEDULED TO SPEAK

AND MEET DAILY. OF COURSE, THERE IS A BIG

QUESTION OF WHETHER WE WILL GET A RECESSION OR NOT.

THE DATA SHOWED TODAY THAT BUSINESS ACTIVITY GREW THE MOST

IN A YEAR. THAT'S POINTING TO PERHAPS A

SOFT LANDING. WHEN YOU ADD IT ALL UP, WE ARE

LOOKING AT THE YIELD MOVING UP TOWARDS 4.4%.

THE NASDAQ 100 IS DOWN A QUARTER OF 1%.

IT'S STILL NEAR ITS 13 MONTH HIGH.

THE EURO IS LOSING GROUND AFTER DATA SHOWED MANUFACTURING IN

EUROPE CONTRACTED THE MOST IN THREE YEARS.

I INCLUDED THE TOP BROAD MARKET INDEX IN JAPAN DOWN BY TWO

THIRDS OF 1% AFTER CHIP-RELATED NAMES LED THE DROP NOW THAT THE

COUNTRY IS TIGHTENING ITS EXPORT CONTROLS STARTING IN

LATE JULY. IF YOU PUT EVERYTHING INTO

CONTEXT, WE KNOW THE RALLY IN BIG TECH HAS MADE THE NASDAQ

100 A STAR PERFORMER AND YOU CAN SEE IT'S UP 26% THIS YEAR

ALONE.

THAT NEEDS TO BE PUT INTO CONTEXT BECAUSE YOU GO BACK TO

THE END OF 2021 AND THE START OF 2022 AND THE BLUE LINE

REALLY PLAYING CATCH-UP WITH THE BROADER MARKET WHICH IS THE

WHITE LINE. AT THE START OF 2023 AROUND

HERE, FUND MANAGERS WERE UNDERWEIGHT TECH BECAUSE OF

THEIR BIG LOSSES LAST YEAR INCREASE THEIR EXPOSURE.

THEN IN MARCH WHEN THE BANKING CRISIS BEGAN, SMALL CAPS WHICH

IS THE YELLOW LINE BROKE APART FROM THE BROADER MARKET.

INVESTORS FOUND SAFETY, THEY FOUND A HAVEN IN BIG TECH

BECAUSE OF THEIR DOMINANT MARKET SHARE AND FREE CASH FLOW

AND ROBUST BALANCE SHEETS. ALEX: I'M LOOKING AT THE BIGGEST

MOVERS ON THE DAY TODAY.

ZOOM IS SLIDING IT AND ABOUT SICK -- ABOUT 7%.

IT REALLY DISAPPOINTED THE STREET.

THEIR CONSUMER CUSTOMERS, THEIR BUSINESS CUSTOMERS, GROWTH

THERE HAS PLATEAUED IN THEIR BIG PLAN TO GROW SALES WITH BIG

ENTERPRISE CUSTOMERS MIGHT NOT HAPPEN AS SOON AS THE MARKET

EXPECTED. MORE ON THAT LATER.

NEXT IS ALIBABA DOWN 1.5 PERCENT. EARLIER LOSSES.

THE COMPANY IS CUTTING 7% OF ITS STAFF IN ITS CLOUD BUSINESS.

THIS IS A COMPANY THAT'S PLANNING TO SPLIT ITSELF UP SIX

WAYS. THIS WOULD BE ONE OF THE BUSINESS UNITS THAT THEY ARE

PLANNING ON SPINNING OFF AND TAKING PUBLIC.

WE HAVE A RECORD HIGH FOR BROADCOM, THE THIRD STOCK I'M

WATCHING. IT HAS TICKED UP 2.5% TODAY.

IT'S AN ALL-TIME HIGH BECAUSE THIS CHIPMAKER HAS INKED A

MULTIBILLION-DOLLAR DEAL FOR 5G RADIOFREQUENCY FOR APPLE'S

IPHONE. LET'S GO TO OUR BIGGEST RISE ON

THE DAY THAT WOULD BE YELP, FLIRTING WITH 10% WHICH IS A

SIX-MONTH HIGH. IT'S CLIMBING AND REPORT THAT

AN ACTIVIST HAS COME KNOCKING. TCS PLANS TO DELIVER A LETTER

TO THE YELP OR URGING THE SITE TO POTENTIALLY SELL IT SELF OR

LOOK INTO STRATEGIC OPTIONS. INVESTORS SEEM TO BE DOWN WITH

THAT IDEA. IT'S NOT THE FIRST TIME YELP

HAS SEEN AN ACTIVIST. BACK IN 2019, THE EARTH MANAGEMENT TO

TAKE -- TO MAKE CHANGES AND THEY DID AND PERHAPS THERE IS

BULLISHNESS ON ATTENTION FOR CHANGE. SCARLET:

GREAT CONTEXT THERE.

AROUND THE GLOBE, TH QATAR ECONOMIC FORUM IS UNDERWAY.

CAROLINE HYDE SAT DOWN WITH THE CEO OF TIKTOK AND HE SPOKE

ABOUT HOW IT'S WORKING WITH ORACLE TO REVIEW ITS CODE IN

OVERSEE U.S. USER DATA ANY TALKED ABOUT THE

RECENT BILL BLENDING -- BANNING THE PLATFORM IN MONTANA.

>> WE BELIEVE THAT THE MONTANA BILL THAT WAS PASSED IS SIMPLY

UNCONSTITUTIONAL. AS YOU POINTED OUT, WE VERY

RECENTLY FELT THAT WE SAW THE CHALLENGES IN THE COURT AND WE

ARE CONFIDENT WE WILL PREVAIL. SEPARATELY, I'VE NOTICED THAT

SOME OF THEIR CREATORS OF ALSO FILED A SEPARATE LAWSUIT

CHALLENGING THE SAME BILL IN THE COURTS.

I WANT TO SAY THAT THEY CARE BECAUSE TIKTOK IS REALLY

IMPORTANT TO THEM. THIS IS THE PART OF THE STORY I

THINK IS MOST IMPORTANT.

NOW THAT WE HAVE MORE THAN 150 MILLION AMERICANS ON OUR

PLATFORM ON AN ACTIVE BASIS, MORE THAN ONE BILLION AROUND

THE WORLD, THE PEOPLE WHO USE TIKTOK AS THE PLACE FOR

EXPRESSION, IT'S A VERY DIFFERENT EXPERIENCE FROM THE

OTHER APPS AVAILABLE IN THE MARKET.

THIS IS ONE FOR DISCOVERY, FOR EXPRESSION, FREE EXPRESSION AND

A LOT OF OUR USERS USE TIKTOK TO FIND THEIR COMMUNITIES,

DISCOVER AND EXPRESS THEMSELVES. MOREOVER, THERE ARE 5 MILLION

SMALL BUSINESSES IN THE UNITED STATES THAT DEPEND ON TIKTOK.

AND MILLIONS MORE AROUND THE WORLD INCLUDING OF THIS COUNTRY

AND THE REGION.

ULTIMATELY, IT IS ABOUT PROVIDING VALUE TO THESE USERS

AND MAKING SURE THAT WE CONTINUE TO PROVIDE THEM A

GREAT SERVICE THAT BENEFITS THEM AND THEIR DACHSHUND THAT

IS THEIR KEY FOCUS. CAROLINE:

WAS IT HARD TO EXPRESS YOURSELF MOST RECENTLY WHEN YOU ARE IN

CONGRESS HAVING TO TRY TO TELL YOUR STORY OF WHY TIKTOK IS

IMPORTANT TO THE UNITED STATES?

>> I THINK IT WAS AN IMPORTANT PROCESS.

I'M VERY GRATEFUL FOR THE OPPORTUNITY TO SHOW UP AND TO

TELL OUR SIDE OF THE STORY. CAROLINE:

DID YOU TELL YOUR SIDE OF THE STORY?

>> THROUGHOUT THE FIVE HOURS, I BELIEVE I HAD TIME TO DO THAT.

I THINK IT'S A GOOD OPPORTUNITY FOR US TO ASK PLANE OURSELVES.

THERE ARE SOME MISCONCEPTIONS ABOUT OUR COMPANY OUT THERE.

CAROLINE: THE KEY ISSUE THAT MANY WOULD

HAVE IS DATA. AND THERE IS CONCERN AND

ANXIETY THAT ULTIMATELY THE CHINESE GOVERNMENT CAN HAVE

ACCESS TO U.S. USER DATA. THAT IS WHY MONTANA WANTS TO

BAN TIKTOK. WHAT DO YOU WISH YOU COULD HAVE

SAID TO MAKE CLEAR THAT THAT WAS NOT GOING TO HAPPEN.

I FELT AS IF YOU DIDN'T MANAGED TO PROVE THAT POINT.

>> TIKTOK IS NOT AVAILABLE ON MAINLAND CHINA TODAY.

THE CHINESE GOVERNMENT IS NEVER ASKED US FOR U.S. USER DATA.

WE WILL NOT PROVIDED EVEN IF ASKED.

BEYOND THAT, WE HAVE BUILT OVER THE LAST TWO YEARS, SOMETHING

WE CALL INTERNAL PROJECT TEXAS AND ITS TO ENSURE THAT AMERICAN

DATA IS STORED ON AMERICAN SOIL BY AN AMERICAN COMPANY AND

OVERSEEN BY AMERICAN PERSONNEL. THIS IS TRULY AN UNPRECEDENTED

PROJECT THAT NONE OF THE OTHER COMPANIES IN OUR INDUSTRY HAVE

EVER ATTEMPTED. WE BELIEVE WE HAVE TAKEN STEPS

ABOVE AND BEYOND WHAT OUR INDUSTRY HAS DONE TO PROTECT

THE SAFETY OF U.S. USER DATA WHICH IS IMPORTANT.

CAROLINE: WHERE ARE YOU WITH PROJECT

TEXAS? YOU'VE COME OUT AND SAID VERY

SOON ORACLE WILL HAVE UNPRECEDENTED ACCESS TO OUR

DATA OR INDEED, TO THE WAYS IN WHICH YOUR SOURCE CODE WORKS

BUT THAT'S NOT NOW. WHEN WILL ORACLE BE ABLE TO

ENACT THIS UNPRECEDENTED OVERSEEING AND TRANSPARENCY OF

YOUR COMPANY?

>> PROJECT TEXAS IS A COMPLICATED PROJECT.

A LOT OF THE ELEMENTS OF THE PROJECT IS IN PLACE AND

OPERATIONAL. FOR EXAMPLE, TODAY, BY DEFAULT,

ALL U.S. DATA IS STORED IN THE ORACLE

CLOUD SERVICE. IT'S NO LONGER IN OUR OWN

SERVICE IN VIRGINIA. CAROLINE: YOU'VE ALREADY DONE THE

TRANSFER?

>> IT'S ALREADY BEEN DONE. SEPARATELY, ORACLE HAS BEGUN

THE REVIEW OF THE CODE.

AS YOU MAY UNDERSTAND, IT'S A PROJECT THAT WOULD TAKE TIME

FOR US TO FINISH THE DETAILS. IT'S ON TRACK.

ORACLE AND OURSELVES ARE WORKING TOGETHER WITH THE U.S.

GOVERNMENT TO FINALIZE PROJECT TEXAS. ALEX:

CAROLINE IS STANDING BY. WHAT WAS YOUR BIG TAKE AWAY

FROM YOUR CONVERSATION? CAROLINE:

I WAS PRESSING HIM ON YOUR REPORTING BECAUSE IT WAS YOUR

STORY THAT REALLY INSTIGATED THIS STORY AS TO WHETHER THE

ORACLE DEAL WAS REALLY IN PLACE. HE DID TRY TO PUSH BACK THAT'S

ON TRACK AS YOU HEARD IN THE FACT THAT THEY MOVED THAT DATA

FROM THEIR SERVERS TO ORACLE. THE TAKE AWAY FOR ME WAS THIS

IS COMING AT A MOMENT WHERE META- WHERE HE WAS AN INTERN IS

ALSO BEING FIND A RECORD AMOUNT BY THE EU REGULATORS BECAUSE

THE U.S. MAY BE ABLE TO ACCESS EU DATA.

THEY ARE WORRIED ULTIMATELY OF IT EXACTLY WHAT THE U.S.

IS WORRIED ABOUT CHINA. THIS IS A GLOBAL ISSUE THAT'S

ONGOING AND THAT'S WHY THEY HAVEN'T JUST GOT PROJECT TEXAS

BUT PROJECT CLOVER IN EUROPE HOW THEY CAN PROTECT USER DATA.

THIS FEELS LIKE A MOMENT OF DEGLOBALIZATION AT ANOTHER

LEVEL WHEN IT COMES TO TECHNOLOGY AND HIS KEY POINT

WAS HOW CAN WE DO THIS, HOW CAN WE ENSURE WE HAVE DATA

SOVEREIGNTY WITHOUT ULTIMATELY BREAKING THE INTERNET AND

WITHOUT BREAKING HIS BUSINESS. HE REALLY DIDN'T SEEM TO SAY

THAT THEY HAVE A PLAN B IF THEY GET BENT.

HE FEELS THEY ARE HERE TO STAY WHEN IT COMES TO THE UNITED

STATES PRESENCE FOR TIKTOK. SCARLET:

YOU DID A GREAT JOB IN PUSHING HIM ON WHETHER HE ACTUALLY GOT

THE CHANCE TO TELL HIS STORY.

NOW THAT YOU ARE IN QTAATAR WHO ELSE WERE YOU TALKING WITH?

CAROLINE: GLOBALIZATION ISSUE, THE WORRY

ABOUT INVESTMENT IN CHINA IS RINGING THROUGHOUT.

I WAS SPEAKING WITH PETERCHE WHON CONTENT.

HE NOW OWNS THE PRODUCTION COMPANY BEHIND LOVE IS BLIND

AND RAN FOX FOR 14 YEARS. WE WERE TALKING ABOUT HOW HE IS

TRYING TO BE MORE GLOBALIZED AND TRYING TO BUY PRODUCTION

AND CONTENT IN MEXICO AND TURKEY TO ENSURE THAT THE

STREAMING COMPANIES THAT HAVE BECOME MORE POWERFUL, HE THINKS

CABLE IS DUST, THEY WOULD BE ABLE TO HAVE NATURAL LANGUAGE,

NEW LANGUAGE AND ACCESS THE EMERGING MARKETS.

AI HAS BEEN FRONT AND CENTER AND I SPOKE TO THE CEO OF

TIKTOK ABOUT ARTIFICIAL INTELLIGENCE AND LARGE LANGUAGE

MODELS BUT HE DIDN'T SAY WHETHER THEY ARE ALREADY

CREATING ONE FOR TIKTOK BUT HE THINKS IT WILL GALVANIZE VIDEO

PRODUCTION.

I ALSO SPOKE WITH THE FIRST AFRICAN-AMERICAN WOMAN TO RUN A

FORTUNE 500 COMPANY. SHE RAN A TECH COMPANY BUT IS

NOW THE CHAIR OF TANEO AND A PRIVATE INVESTOR.

SHE IS REALLY EXCITED BY THE OPPORTUNITIES IN AI AND THINKS

IT CAN BE A REAL FORCE FOR PRODUCTIVITY BUT ALSO WORRIED

ABOUT THE RATE -- REGULATORY ENVIRONMENT.

>> THIS IS A TECHNOLOGY THAT'S DEVELOPING.

WE KNOW IF WE JUST LEAVE IT TO EVERYONE WE LEAVE IT TO, THERE

WILL BE A HUGE AMOUNT OF HAVE-NOTS AND A SMALL AMOUNT OF

HAVES.

WE SHOULD HAVE A COMMUNITY WORKING TOGETHER, TECHNICAL

COMMUNITY, GOVERNMENT COMMUNITIES, EDUCATION, ON THIS

UNBELIEVABLE GIFT THAT WE HAVE IN TRYING TO FIGURE OUT A WAY

TO MAKE IT GOOD FOR ALL.

CAROLINE: THE HAVES AND HAVE-NOTS IS

SOMETHING THAT IS CORE TO HER. SHE'S GOT A KEY FOCUS ON

DIVERSITY AT THE BOARD LEVEL AND WE GOT A KEY FOCUS ON AI

AND HOW MAYBE THAT AMPLIFIES THE SYSTEM SO THIS IS WHERE --

WHAT SHE IS LOOKING AT BUT THAT SEEMS TO BE ON A POSITIVE SIDE.

SCARLET: GREAT REPORTING, CAROLINE HYDE

AT THE QATAR ECONOMIC FORUM AND SHE WILL BE BACK IN NEW YORK

LATER THIS WEEK. WE WILL CONTINUE WITH BLOOMBERG

TECHNOLOGY BECAUSE COMING UP, ZOOM POST FIRST-QUARTER

EARNINGS AND SAYS IT WILL JUMP ON THE AI BANDWAGON.

THE ZOOM CFO WILL JOIN US TO BREAK IT DOWN.

TAKING A LOOK AT ZOOM SHARES AFTER THE COMPANY POSTED MIXED

RESULTS FOLLOWING YESTERDAY'S MARKET CLOSE, IT BOOSTED

REVENUE GUIDANCE FOR THE FULL YEAR BUT THE STOCK IS UP BY

MORE THAN A PERCENT OF THE MOMENT.

WE GOT MORE ON THAT NEXT, THIS IS BLOOMBERG.

♪

ALEX: MOVING ON TO ZOOM WHICH RELEASED ITS FIRST-QUARTER

EARNINGS YESTERDAY, SENDING SHARES DOWN AFTER POSTING MIXED

RESULTS. LET'S BRING IN THE CFO OF ZOOM

FOR MORE. WHEN I LOOK AT THE MARKET

REACTION TODAY, IT SEEMS LIKE FOLKS ARE READING INTO THE

GUIDANCE THAT THERE IS SOME PRESSURE ON THE IMPORTANT

ENTERPRISE BUSINESS FOR YOU.

WHAT SEEMS TO BE PUTTING A DENT IN THE CORE SELLING INTO

ENTERPRISE CUSTOMERS?

>> NICE TO SEE YOU. WE WERE REALLY PLEASED WITH OUR

RESULTS WE ANNOUNCED LAST NIGHT. WE EXCEEDED BOTH THE HIGH END

OF OUR REVENUE GUIDANCE AS WELL AS OUR PROFITABILITY METRICS

AND WE WERE ABLE TO RAISE OUR OUTLOOK FOR THE FULL YEAR ON

BOTH THE TOP AND BOTTOM LINE. SOME OF THE KEY HIGHLIGHTS OF

THE QUARTER WAS WE SAW STABILIZATION IN OUR ONLINE

BUSINESS EARLIER THAN WE EXPECTED THIS YEAR AS WELL AS

PEAK GROSS MARGINS AT 80.5% AND

A RESUME PHONE -- OUR ZOOM PHONE CROSS THE 10% OF REVENUE

THRESHOLD. WE TALKED ABOUT THE FACT THAT

WE HAD A REDUCTION AS WELL AS A RESTRUCTURING IN OUR DIRECT

SALES ORGANIZATION. WHILE WE SAW SOME TRACTION IN

THE S&P PORTION OF THAT TEAM, IT WILL TAKE A LITTLE BIT

LONGER FOR THE REST OF THE ORGANIZATION AS EXPECTED WHEN

YOU HAVE A SIGNIFICANT TRANSITION TO RETURN TO FULL

PRODUCTIVITY. ALL OF THAT IS REFLECTED IN OUR

GUIDANCE AND WHAT YOU ARE REFERRING TO. ALEX:

DURING THE PANDEMIC, ZOOM HAD A GROWTH MOMENT, I THINK THE

MARKET LOOKED AT YOU AS A GROWTH STOCK UNDER THOSE

CONDITIONS. AS YOU TALK ABOUT THE ONLINE

CONSUMER PIECE OF YOUR BUSINESS, AND SOME OF THE

PRESSURE THROUGH THE SALES WORK ON YOUR ENTERPRISE BUSINESS, DO

YOU LOOK FOR GROWTH ELSEWHERE LIKE AN ACQUISITION OR

SOMETHING YOU WOULD CONSIDER TO JUICE THE TOP LINER FIND GROWTH

OUT OF THOSE BUSINESS UNITS?

>> WE HAVE REALLY BEEN INVESTING IN INNOVATING ACROSS

THE PLATFORM. WE ARE SO EXCITED WHEN YOU LOOK

FORWARD TO NOT ONLY THE PHONE BUT ALSO ZOOM CONTACT CENTER

THAT WAS RELEASED LAST YEAR. WE ANNOUNCED IN MARCH A NEW

BETA FEEDER AROUND SOON IQ WHICH IS LEVERING AI TO BE A

SMART COMPANION AND DO THINGS LIKE CHAT OR EMAIL COMPOSITION

AND DO MEETING SUMMARIES OR EVEN THINK ABOUT SUMMARIZING A

LONG CHAT THREAD THAT MAYBE YOU MISSED EARLIER IN THE DAY.

WE HAVE ALSO ANNOUNCED AN ACQUISITION WHICH WILL BRING

FRONT AND CENTER, A COLLABORATIVE EMPLOYEE DATA HUB

THAT LEVERAGES BOTH THE SOCIAL AS WELL AS THE INTERNET.

WE HAVE AN AMAZING PLATFORM THAT HAS CONTINUED TO GROW AND

THAT IS WHAT WE ARE LOOKING FORWARD TO DRIVE THE FUTURE

GROWTH OF THE COMPANY. ALEX:

JUST A FOLLOW-UP ON, SCARLET: IT LOOKS LIKE YOU'VE MADE TWO

ACQUISITIONS THIS YEAR.

LAST YEAR, SIX ACQUISITIONS IN THE BIGGEST WAS $125 MILLION.

PERHAPS INVESTORS ARE LOOKING FOR A BIGGER, TRANSFORMATIVE

PURCHASE. HOW DO THINK ABOUT THAT?

>> WE ALWAYS WATCH WHAT'S AVAILABLE IN THE MARKET.

AS YOU INDICATED, WE'VE DONE TWO DEALS THIS YEAR WHICH HELPS

US ACCELERATE THE DEVELOPMENT OF PARTS OF HER PLATFORM.

THERE ARE THREE CRITERIA BUT LOOK FOR, TECHNOLOGY WITH A

HIGH BAR AND WE LOOK FOR CULTURE IS WANT TO MAKE SURE IT

WILL BE A GREAT ADDITION TO OUR TEAM AND THEN WE LOOK TO

VALUATION WHICH GIVEN WHAT'S HAPPENING IN THE MARKET HAS

BECOME MORE ATTRACTIVE OVER TIME.

WE WANT TO MAKE SURE THAT ANY ACQUISITION WE WOULD DO WOULD

BENEFIT OUR CUSTOMERS AND THAT'S WHAT WE LOOK FOR.

HOW WOULD TRANSFORM THE CUSTOMER EXPERIENCE AND WE KEEP

WATCHING FOR THOSE OPPORTUNITIES? SCARLET:

I HAVE TO ASK ABOUT THE COMPETITION BECAUSE WE HEAR

MORE ABOUT COMPANIES CONSOLIDATING THEIR SOFTWARE

ONTO MICROSOFT TEAMS, DOES THIS CONCERN YOU AND DO YOU COUNTER

THAT?

>> MICROSOFT IS A GREAT PARTNER TO US.

WE ALWAYS THINK ABOUT THINGS THROUGH THE CUSTOMER'S

VIEWPOINT.

WE WORK WITH THEIR CUSTOMERS TO HELP THEM LEVERAGE WHATEVER

PRODUCT THEY WANT.

SOMETIMES THEY WANT TO USE THE CONTACT CENTER IN MEETINGS AND

COUPLE THAT WITH POTENTIALLY ANOTHER MICROSOFT PRODUCT SO WE

HAVE SEQUENCE IMMIGRATE -- INTEGRATION WITH THEM.

ONE OF THE WAYS I MEASURE THE STRENGTH OF OUR BUSINESS IS

THROUGH RENEWALS.

Q1 IS OUR LARGEST RENEWAL PERIOD GOING BACK TO THE EARLY

STAGES OF THE PANDEMIC. WE SAW A STRONG RENEWAL IN Q1.

THERE IS VERY LITTLE LOGO TRIM WHICH TELLS ME CUSTOMERS MIGHT

BE RIGHTSIZING BUT THEY ARE STICKING WITH ZOOM. SCARLET:

REALLY APPRECIATE YOU JOINING US.

SHE IS THE CFO OF ZOOM, THANK YOU SO MUCH. ALEX:

COMING UP, WE ARE WATCHING SHARES OF APPLE AND BROADCOM

AFTER THEY SIGN A MULTIBILLION-DOLLAR DEAL, MORE

DETAILS NEXT. SCARLET: THIS IS BLOOMBERG.

SCARLET: JAY POWELL, THE CHAIRMAN OF

FEDERAL RESERVE, HAS ARRIVED ON CAPITOL HILL TO MEET WITH HOUSE

DEMOCRATS. THIS WAS A LONG PLANNED MEETING

AND ACCORDING TO THE ORGANIZATION, IT IS NOTHING TO

DO WITH THE DEBT LIMIT DISCUSSIONS.

JAY POWELL IS ON CAPITOL HILL AND WE WILL KEEP YOU POSTED IF

THERE ANY DEVELOP INSTEAD OF THAT MEETING.

THAT'S A BACK TO THE TECH SECTOR BECAUSE WE LOOK AT APPLE

AND IT HAS JUST SIGNED A MULTI-BILLION-DOLLAR DEAL WITH

BROADCOM TO DEVELOP 5G RADIOFREQUENCY COMPONENTS.

THE STOCK IS LOWER ON THE DAY AND BROADCOM IS MOVING UP 2.5%.

LET'S GET MORE PERSPECTIVE ON THIS. WHAT'S INTERESTING IS THAT

APPLE HAS A RELATIONSHIP WITH BROADCOM.

IT IS ONE OF THEIR BIGGEST CUSTOMERS BUT THEY HAVE A

CONTENTIOUS RELATIONSHIP. WHAT DOES THIS DEAL DO WHEN IT

COMES TO THAT CONTENTIOUS RELATIONSHIP?

>> WHEN YOU LOOK AT APPLE, THIS IS MORE DIVERSIFIED AWAY FROM

QUALCOMM.

FOUR APPLE'S CASE, IT NEEDS TO DIVERSIFIED NACHES FROM ONE

MARKET WHICH IS ASIA BUT BROADEN ITS PARTNERSHIP NETWORK.

THEY WANT TO SOURCE PARTS ACROSS THE WORLD. ALEX:

I HAVE TO THINK ABOUT APPLES BIG PUSH TO BRING IN HOMEGROWN

CHIPS AND ASK THE QUESTION -- DOES THIS MEAN THESE

RADIOFREQUENCY CHIPS FOR 5G, THAT APPLE IS CONSIDERING

BRINGING IN HOUSE FOR THE CREATION.

DOES THAT MEAN MAYBE THE EFFORT BY APPLE IS NOT NECESSARILY

GOING AS WELL AS THEY HAD INITIALLY THOUGHT?

>> APPLE IS NEVER GOING TO DO THESE THINGS JUST FOR COST

ALONE. THEY WILL GO FOR THE BEST PART

THAT'S OUT THERE. AT THE SAME TIME, NOT FOR A

COST REASON BUT PERFORMANCE, IT IS DESIGNING ALL SORTS OF PARTS

SO THE NEXT GENERATION OF PHONES OR DEVICE COMING UP CAN

ACHIEVE WHAT IT WANTS TO ACHIEVE.

SOMETIMES THE PARTNERS CANNOT PROVIDE THAT.

I CANNOT SAY WHETHER THE IN-HOUSE EFFORTS ARE NOT GOING

AS PLANNED.

AS I SAID, IT'S JUST A PLANNED WAY OF LOOKING AT THINGS AND

SAYING I DON'T WANT TO BE DEPENDENT ON ONE SUPPLIER FOR

ALL MY NEEDS. I WANT TO GO ACROSS THE BOARD.

ALEX: THANK YOU SO MUCH FOR BREAKING

THAT DOWN.

COMING UP, WE WILL SPEAK TO THE AMAZON DEVICE EXECUTIVE ON THE

LAUNCH OF ITS FIRST TABLET IN DECADE AND KEEPING AN EYE ON

THE SHARES OF THE COMPANY. YOU CAN SEE THEY ARE TICKING UP

ON THE DAY SO MAYBE SOME EXCITEMENT THERE.

1.3% AMAZON IS UP AND WE WILL GET TO THAT AFTER THE BREAK.

THIS IS BLOOMBERG.

SCARLET: WELCOME BACK TO BLOOMBERG

TECHNOLOGY. ALEX: AND I'M IN SAN FRANCISCO.

SCARLET: 3.5 HOURS TO GO BEFORE THE

MARKET CLOSE IN NEW YORK SO LET'S CHECK WHAT'S GOING ON

DEBT CEILING DEBATE TALKS ARE ONGOING STILL WEIGHING ON THE

MARKET WITH THE S&P 500 LOSING ONE THIRD OF 1% LED BY TECH

COMPANIES. OIL PRICES ARE MOVING HIGHER.

WTI IS UP BY 1.8% AFTER THE SAUDI ENERGY MINISTER ISSUED A

WARNING TO SHORT-SELLERS TO WATCH OUT.

BECAUSE OF THE RISING OIL PRICES, WE ARE LOOKING ATXLE

THAT TRACKS BIG CAP ENERGY NAMES MOVING UP BY 2%.

A COUPLE OF INDIVIDUAL COMPANY NAMES TO HIGHLIGHT BECAUSE WE

ARE AT THE TAIL END OF THE U.S. EARNINGS SEASON WHEN RETAILERS

REPORT ON THE RESULTS. WE ARE SEEING LOWS MOVING UP BY

2.4% EVEN THOUGH IT CUT ITS FULL YOUR OUTLOOK SAYING IT

SEIZES SLOWING IN HOME-IMPROVEMENT.

IT'S REPORTING GAINS AMONG PROFESSIONAL CONTRACTORS.

IN SOME WAYS, DOING BETTER IN ITS LARGER RIVAL HOME DEPOT

WHICH LAST WEEK SAID THE SAME THING.

IT'S LOWERING ITS FULL-YEAR FORECAST BECAUSE BROAD-BASED

SPENDING CUTBACKS BY CAN SAID -- BY ITS CUSTOMERS IN HOME

DEPOT AND LOWE'S UP BY AT LEAST 2% ON THE DAY. ALEX:

10 YEARS AFTER THE FIRST TABLET, AMAZON IS SEEING ITS

NEWEST AND WHAT THE COMPANY'S CALLING ITS BIGGEST AND MOST

POWERFUL TABLET YET. JOINING US IS DAVID LIMP,

SENIOR VICE PRESIDENT. YOU GUYS HAVE BEEN PRETTY

STRONG IN THE LOWER PRICE POINT MARKET FOR TABLETS AND THIS HAS

UP HIGHER PRICE POINT AND FEELS MORE PREMIUM.

WHO ARE YOU TRYING TO CAPTURE WITH HIS LATEST TABLET?

>> WE HAVE REALLY FOUND THE PLACE WITH OUR TABLET PRODUCTS.

WE BUILD PREMIUM TABLETS BUT IT NON-PREMIUM PRICES.

AS CUSTOMERS HAVE DEMANDED MORE FROM TABLETS, THE INCREASINGLY

SAID THEY WANT LARGER SCREENS. WE HAD TENANTS RANGE FOR A

WHILE BUT BRINGING OUT THE 11 INCH NOW, IT'S A BIG DIFFERENCE

FOR US BECAUSE WE WENT TO AN ALL ALUMINUM DESIGN THAT'S

THINNER. IT'S A GREAT OPPORTUNITY FOR

CUSTOMERS TO HAVE A LARGER TABLET THAT CAN BE USED FOR

PRODUCTIVITY AS WELL AS ENTERTAINMENT.

ALSO BE ABLE TO DO IT AT AN AFFORDABLE PRICE, IT'S ONLY

$229. SCARLET: THIS SEEMS TO BE GEARED TO

PRODUCTIVITY FOR WORKERS BUT A LOT OF YOUR PRODUCTS HAVE A

KIDS VERSION.

HOW DO YOU THINK ABOUT INCORPORATING AND BUILDING OUT

GENERATIVE AI AND LLM WHEN IT COMES TO SERVING KIDS BECAUSE

THERE IS A PRIVACY FACTOR THAT IS CRITICAL TO RETAINING AND

BUILDING AND PRESERVING THE TRUST WITH YOUR CUSTOMER BASE.

>> WE'VE HAD A VERSION OF OUR KIDS PRODUCTS FOR A LONG TIME.

WE HAVE IT FOR KINDLE AND ARE TABLETS AND ECHOS AND RTV'S.

WE REALLY TRY TO BUILD A SANDBOX THAT THE PARENTS CAN

ENSURE THEY FEEL SAFE PUTTING THEIR KIDS IN THAT ENVIRONMENT.

ON ERROR TABLETS, ALL THE APPS AVAILABLE FOR KIDS PLUS DON'T

HAVE ANY EMBEDDED ADVERTISING. THE SAME THING IS TRUE WITH

ALEXA AND GENERATIVE EIGHT. AI HAS TO BE AWARE OF THE AGE

GROUP IT IS TALKING TO. IF A CHILD THAT IS SIX YEARS

OLD ASKED WHERE THE BABIES COME FROM, IT WILL GIVE A MORE

PARENT FRIENDLY ANSWER THAN IF AN ADULT ASKED THAT QUESTION.

ALEX: CHATBOTS ARE HAVING THEIR MOMENT AND GENERATIVE AI SEEMS

TO BE THE PHRASE THAT WE CAN'T STOP TALKING ABOUT.

CHATBOTS HAVE BEEN AROUND FOR A MINUTE.

WHAT DO YOU THINK ABOUT ALL THE CALLS FOR REGULATION AROUND

GENERATIVE AI AND CHATBOTS? YOU HAVE BEEN IN THIS BUSINESS

AND I THINK I REMEMBER AMAZON ASKING FOR REGULATION AROUND

FACIAL RECOGNITION SOFTWARE. WHAT IS YOUR TAKE ON AI THESE

DAYS?

>> I THINK THERE IS A WIDE SPECTRUM OF WHAT AI CAN DELIVER.

WHEN YOU START TALKING ABOUT THE GENERATIVE AI TECHNIQUES

AND ASSISTANCE IN THINGS LIKE THAT, I THINK THERE IS ROOM FOR

REGULATION. WE THINK WE WANT THAT TO HAPPEN.

THERE ARE OTHER SIDES THAT ARE JUST NOT AS RISKY.

THINK ABOUT THINGS LIKE FRAUD DETECTION.

YOU PROBABLY WANT TO HAVE LESS REGULATION SO YOU CAN KEEP THE

SPEED OF INVENTION HAPPENING AND PROTECT CONSUMERS WITH

THOSE TECHNIQUES.

IN THE LONG RUN, FOR THE MORE COMPLICATED USED SCENARIOS, WE

THINK REGULATION IS NEEDED AND WILL GET SUPPORTERS. SCARLET:

LET'S GO BACK TO PRODUCTS FIX AM GLAD THAT ALEX BROUGHT UP

ALEXA. WHEN YOU TALK ABOUT GENERATIVE

AI, CAN YOU GIVE US A SENSE OF WHAT CAPABILITIES WILL BE

THROUGH THE DOOR AS YOU TRY TO UPGRADE ALEXA AND MAKE IT MORE

PREVALENT IN PEOPLE'S LIVES? WHAT ARE YOU DOING TO MAKE

ALEXA SMARTER?

>> WE HIT A BIG MILESTONE AND OF NOW SOLD OVER HALF A BILLION

ALEXA ENABLED DEVICES. LAST WEEK, WE ANNOUNCE THE ECHO

POP. MY DAUGHTER SAID IT WAS ADORABLE SO I'M PROUD OF THE

TEAM'S ABILITY TO DO THAT. WITH OVER HALF A BILLION

ENDPOINTS, WE HAVE A GREAT ACCESS TO CUSTOMERS AND WE ARE

USING GENERATIVE AI TECHNIQUES TO IMPROVE IT EVERY DAY.

ON THE BACK END, WE HAVE A LARGER LANGUAGE MODEL THAT

TAKES MULTIPLE PIECES OF INFORMATION FROM VARIOUS PARTS

OF THE WEB IN OUR OWN REPOSITORIES AND COMES UP WITH

A CONCISE ANSWER. IF A CHILD ASKED A HOMERS

QUESTION OR PARENT ASKS A QUESTION, WE GIVE A DEBTOR

ANSWER THAN WE DID JUST WEEKS AGO.

THIS IS BECAUSE OF THE POWER OF THESE LARGE LANGUAGE MODELS.

YOU WILL SEE US ROLL OUT EVEN MORE AND ALEXA WILL GET MORE

PROACTIVE AND CONVERSATIONAL. ALEX:

I HAVE TO ASK ABOUT ASTRO, THE ADORABLE HOME ROBOT.

WILL EVERYONE BE ABLE TO GET THEIR HANDS ON IT?

>> WE CONTINUE TO MAKE PROGRESS ON ASTRO.

WE SHIP A LOT OF THEM EVERY WEEK NOW.

WE HAVE RAMPED UP MANUFACTURING BUT THERE ARE STILL A FEW AREAS

WE ARE WORKING ON IN TERMS OF NAVIGATION.

IT SEEMS LIKE IT'S A PRETTY TRACKABLE PROBLEM RIGHT NOW.

I WOULD ANTICIPATE IT TO GO INTO WIDE RELEASE OVER THE

COURSE OF THE NOT-TOO-DISTANT FUTURE. CUSTOMERS ARE LOVING THE

PRODUCT. WE HAVE OVER 300,000 PEOPLE

REQUESTING BITES INNER SHIPPING LOTS EVERY WEEK AND CUSTOMERS

-- IF THERE WERE A SPECTRUM OF PRODUCTS IN YOUR PHONE WAS ON

ONE END AND A PET WAS ON THE OTHER, ASTRO IS CLOSER TO THE

PET END OF THE SPECTRUM SCARLET: SCARLET: THAN THE IPHONE.

REALLY APPRECIATE IT, TALKING PRODUCTS.

WE TALKED ABOUT ASTRO AND THE ECHO AND THE NEW FIRE TABLET AS

WELL.

COMING UP, GENERATIVE AI AND THE CLOUD CAN WE WILL SPEAK

WITH THE ADOBE PRESIDENT OF BUSINESS FOR ITS NEW FEATURE OF

BUSINESS FOR PHOTOSHOP. LET'S TAKE A LOOK AT HOW ADOBE

SHARES ARE PERFORMING NOW. LITTLE CHANGED ON THE DAY, OFF

MARGINALLY. THIS IS BLOOMBERG.

♪

ALEX: IT'S TIME FOR TALKING TECH.

YELP SHARES ARE ON TRACK TO RISE MOST SINCE AUGUST. AN

ACTIVIST INVESTOR HAS CALLED FOR THE COMPANY TO LOOK INTO A

SALE AND OTHER STRATEGIC OPTIONS.

TCS CAPITAL MANAGEMENT TENDS TO DELIVER A LETTER TO THEIR BOARD

TO MAKE THE CASE FOR A SALE. THEY SAY THE FIRM COULD FETCH

MORE THAN A -- THEN DOUBLE'S SHARE PRICE.

THE ALIBABA CLAD DIVISION HAS BEGUN A RENT OF JOB CUTS THAT

REDUCED STAFF BY 7%. IT'S PART OF ITS OVERHAUL OF

THE BUSINESS AND PREPARING THE ONCE FAST-GROWING UNIT OR A

SPINOFF AND EVENTUAL IPO. CHINA'S LARGEST CLOUD SERVICE

HAS BEGUN INFORMING STAFF OF LAYOFFS AND IS OFFERING

SEVERANCE TO EMPLOYEES OR TRANSFERS TO OTHER PARTS OF THE

ALIBABA EMPIRE. APPLE IS CLASHING WITH THE

EUROPEAN UNION OVER A 14 BILLION DOLLAR TAX DEAL.

THEY ARE HEADING BACK AT THE ANTITRUST LAW SAY THEY MAKE

LEGAL ERRORS WHEN THEY CONCLUDED APPLE WAS GIVEN VAST

AMOUNTS OF UNFAIR TAX EIGHT FROM IRELAND AND ISSUED AN

ORDER TO REPAY THAT MONEY. SCARLET: LET'S TALK ABOUT ADOBE.

IT IS TAKING HIS GENERATIVE AI MODELS TO THE NEXT LEVEL BY

INTEGRATING THE GENERATIVE FILL TOOL INTO PHOTOSHOP.

USERS WILL NOW HAVE A CREATIVE COPILOT TO HELP WITH PRECISION

AND SPEED OF PRODUCTION WHEN THE USE PHOTOSHOP.

WE ARE JOINED BY THE ADOBE PRESIDENT OF DIGITAL MEDIA

BUSINESS. GOOD TO SPEAK WITH YOU.

LET'S START WITH THE GENERATIVE FILL TOOL AND IF YOU CAN TELL

US HOW IN PRACTICE THAT WOULD WORK AND HOW IT MEANINGFULLY

CHANGES THE END PRODUCT AND CREATE DEMAND FOR NEW USES OF

THE SOFTWARE.

>> THANK YOU FOR HAVING ME ON. THIS IS A BIG DAY FOR ADOBE

WITH THE INTRODUCTION OF GENERATIVE TECHNOLOGY GOING

INTO PHOTOSHOP FOR THE FIRST TIME. WE LOST FIREFLY WHICH IS

EVERCORE GENERATIVE CAPABILITIES SEVEN WEEKS AGO AS

A STANDALONE CAPABILITY SO PEOPLE COULD CREATE IMAGES AND

CREATE TEXT EFFECTS. TODAY, THE MASSIVE STEP FORWARD

FOR US IN THE INDUSTRIES THAT WE HAVE TAKEN THAT AND WE HAVE

NATIVELY INTEGRATED IT INTO OUR CREATIVE CLOUD APPLICATION

STARTING WITH PHOTOSHOP FIRST. NOW SOMEONE WORKING IN

PHOTOSHOP CAN START TO AFFECT THE IMAGES AND SAVE HOURS OF

WORK SIMPLY BY USING TEXT TO HELP GENERATE AND FILL

INFORMATION AROUND IT. WE DO THAT IN A WAY THAT

LEVERAGES ALL OF THE ALTERING CAPABILITIES INCLUDING ITS

LAYERS OF THE WORK ENABLES MORE ITERATION AND EXPLORATION AND

MORE PRODUCTIVITY BECAUSE OF THE WAY PEOPLE ARE ABLE TO USE

IT IN THEIR EXISTING WORKFORCE. SCARLET:

ADOBE IS ALL ABOUT SERVING THE CREATIVE COMMUNITY AND ADOBE

AND NIGHT -- IGNITED FROM POTENTIALLY TRADING AI FILES.

WHAT DID YOU LEARN FROM THAT EPISODE?

>> COMMUNICATION IS KEY. WE HAVE NEVER TRAINED ON USER

FILES THAT ARE PART OF CREATIVE CLOUD.

WE'VE BEEN INCREDIBLY TRANS BOARDED THROUGH -- TRANSPARENT

THROUGH THIS PROCESS.

EVERYTHING WE USED TO TRAINER MODELS, WE HAVE ABSOLUTE RIGHT

TO USE IT. AND WE HAVE THE COMPLETE ORIGIN

OF THAT CONTEXT. WE BEEN TRANSPARENT WITH

EVERYONE. WE'VE ALSO BEEN ABLE TO

ANNOUNCE THAT BECAUSE WE KNOW WHERE THE CONTENT IS COMING

FROM, PRINCIPALLY ADOBE STOCK, WE ARE ALSO GOING TO BE

COMPENSATING THE CONTRIBUTORS FOR THE BENEFITS THAT WE GET IN

THE INDUSTRY GETS FROM THE CONTENT.

WE ARE EXCITED HOW THIS CAN BE POSITIVE FOR CREATORS. ALEX:

I THINK THAT INCIDENT IS A GOOD EXAMPLE OF HOW SENSITIVE FOLKS

ARE APPROACHING THE USE OF AI IN CREATION OF ASSETS.

WHEN I THINK ABOUT THE IMPACT OUTSIDE OF ADOBE OF WHAT YOUR

CUSTOMERS ARE USING YOUR PRODUCTS FOR, I HAVE TO ASK

THIS QUESTION -- WHEN I COME TO AI MISINFORMATION AND TOOLS

AGREEING THAT MISINFORMATION, WHERE IS THE ROLE OF FOLKS LIKE

YOURSELVES AND MAKING SURE THAT WE DON'T HAVE AI GENERATED

MISINFORMATION IN THE WORLD.

HOW WAS IT TOBY -- HOW IS ADOBE THINKING ABOUT THIS GETTING

INTO THE HANDS OF PEOPLE AT LARGE?

>> IN THE TECH INDUSTRY, WE ALL NEED TO TAKE A LENIENT POSITION

ON WORKING WITH GOVERNMENTS AND REGULATORS TO ADDRESS THIS

ISSUE. OUR POSITION IN WORKING WITH

THE WHITE AND CAPITOL HILL AND AT BEEN INVOLVED WITH EU AND

THEIR AI BILL OF RIGHTS, WE BELIEVE THAT THE RIGHT APPROACH

YEAR IS TO DO SOMETHING CALLED CONTENT CREDENTIALS.

IT IS A DO TRISH AND LABEL FOR EVERY PIECE OF CONTENT YOU SEE

ONLINE. WE MAKE SURE ANYTHING THAT

FLOWS THROUGH AIR PRODUCTS, WHETHER IS THE AI GENERATED

CAPABILITIES OF FIREFLY WHETHER IT'S EVERCORE FLAGSHIP

APPLICATIONS LIKE PHOTOSHOP HAVE THE PROVENANCE OR ORIGIN

OF THAT CONTENT SO WHEN SOMEONE SEES IT, ULTIMATELY ON A

WEBSITE, THEY CAN LOOK AT IT AND SAY WHAT WAS THIS AND HOW

WAS IT GENERATED? THEY CAN USE THEIR OWN JUDGMENT

ABOUT WHETHER THIS IS CONTENT THEY WANT TO DEPEND ON OR

CONTENT THEY DON'T TRUST. ALEX: I SPENT A LOT OF TIME IN THE

SOCIAL MEDIA SPACE WITH CREATORS AND ADVERTISERS.

THEY ARE LOOKING AT THINGS LIKE SOME OF YOUR COMPETITORS.

THERE IS A SLEW OF NEW STARTUPS PUSHING IN AND SEEMINGLY TRYING

TO TAKE SOME OF ADOBE'S TRADITIONAL CREATION.

HOW ARE YOU FACING COMPETITION FROM THESE YOUNGER PLAYERS WHO

ARE PERHAPS NOT PROVIDING THE PROVENANCE OF YOUR USED TO.

>> THE ADOBE CORE BUSINESS OVERALL CONTINUES TO GROW.

AS YOU SAW IN OUR LAST EARNINGS CALL, WE HAD A GREAT QUARTER

AND BEAT AND THEN RAISE OUR GUIDANCE FOR THE YEAR.

THE CORE MACHINERY CONTINUES TO GROW IN TERMS OF WHAT WE ARE

DOING FOR CREATIVE PROFESSIONALS BUT ALSO THIS

MASSIVE AND GROWING POPULATION OF CREATIVITY FOR ALL.

EVERYONE THAT'S PART OF THE CREATOR ECONOMY, THE YOUNGER

GENERATION AND STUDENTS LOOKING TO ADD MORE CONTENT THAT STANDS

UP, STANDS OUT, WE ARE BENEFITING FROM ALL THAT.

WE THINK INNOVATION IS KEY IN THE WAY THAT WORKS IS HAVING A

SET OF PRODUCTS FROM FIREFLY WHICH YOU CAN USE JUST FOR FUN

AND ENJOY YOURSELF TO ADOBE EXPRESS WHICH IS PERFECT FOR

KNOWLEDGE WORKERS AND A CREATOR ECONOMY ALL THE WAY TO

PHOTOSHOP AND ENABLE EVERYONE TO CREATE ALONG THAT CONTINUING

AND ENABLE THEM TO WORK TOGETHER.

WE FEEL GOOD ABOUT THIS AND THE USER SATISFACTION. SCARLET:

F YOU LEADIGMA NOT SO LONG AGO BUT THE U.S.

IS CREATING A LAWSUIT TO BLOCK IT. YOUR CEO HAS SAID EARLIER TO

CONVINCE AUTHORITIES IS NOT ANTICOMPETITIVE.

HOW IS THAT GOING?

>> WE ARE COOPERATING AND SHARING ALL THE INFORMATION WE

HAVE WITH THE REGULATORS AROUND THE WORLD.

OUR CORE BELIEF CONTINUES TO BE THAT THE SUBSTANCE OF THE CASE

IS THAT THIS IS AN ADJACENCY THAT'S GOOD FOR THE INDUSTRY

AND GOOD FOR CONSUMERS. WE SEE A LOT OF POTENTIAL

BENEFITS AND WE ARE CONFIDENT IN THE CASE MAY HAVE TO LET THE

PROCESS PLAY OUT. ALEX: PRESIDENT OF DIGITAL MEDIA FOR

ADOBE, THANK YOU. MORE NEXT, THIS IS BLOOMBERG.

>> TIKTOK IS NOT AVAILABLE IN MAINLAND CHINA TODAY.

THE CHINESE GOVERNMENT HAS NEVER ASKED US FOR U.S.

USER DATA AND WE WILL NOT PROVIDED EVEN IF ASKED. ALEX:

THAT WAS THE TIKTOK CEO SPEAKING DURING A BLOOMBERG

INTERVIEW AT THE QTATAR ECONOMIC FORUM.

LET'S TALK ABOUT MORE TECH.

WHEN I THINK ABOUT THE DIALOGUE BETWEEN THE U.S.

AND CHINA, IT HAS VERGE FROM TENSION TO TECHNO-NATIONALISM.

AT THE END OF THE DAY, I THE BIG QUESTION AS TO WHEN WILL WE

SEE SOME KIND OF REGULATION HAPPEN THAT PROTECTS THE U.S.

IF THAT'S WHAT LAWMAKERS WANT?

>> ON AI, FEDERAL POLICYMAKERS AND STATE POLICYMAKERS ARE

WORKING THAT OUT NOW. WE WORK CLOSELY WITH THEM AND

OUR MEMBER COMPANIES TO MAKE SURE THEY UNDERSTAND THAT THE

TECHNOLOGY CAN BE ROLLED OUT IN A SAFE AND RESPONSIBLE WAY.

WE SAW AN INSTANCE YESTERDAY THAT WAS UNFORTUNATE.

WE WANT TO AVOID THAT ANYTIME GOING FORWARD.

I THINK TWITTER LEARN FROM THAT INCIDENT AND WE SHOULD SAY FOR

GOING FORWARD. ALL THE COMPANIES I WORK WITH

AND FEDERAL POLICYMAKERS UNDERSTAND THE POTENTIAL OF AI

ESPECIALLY IN THE MEDICAL REALM. WE DON'T WANT TO NOT TAKE

ADVANTAGE OF THAT. YOU CAN HELP SOLVE A LOT OF

ISSUES AND PROBLEMS WE FACE. IT WILL TAKE SOME TIME FOR

LAWMAKERS FOOT REGULATIONS IN PLACE. WE SHOULD SEE THAT IN THE

COMING YEAR.

ALEX: CONGRESS HAS BEEN REACTIVE WHEN

IT COMES TO REGULATION. IN SOCIAL MEDIA, WE'VE SEEN

WHISTLEBLOWER AFTER EXECUTIVE TOUTED DOWN TO CAPITOL HILL BIG

CONCERNS BUT NO ACTUAL REGULATION.

DO WE NEED A BIG MOMENT, BIG SCARY MOMENT FOR THAT KIND OF

FACT-FINDING MODE TO EDIT ACTUAL REGULATION TO TAKE PLACE?

>> POLICYMAKERS OF THE FEDERAL LEVEL ARE BEING VERY WISE IN

THAT THEY DON'T KNOW ALL THEY NEED TO KNOW ABOUT THE

TECHNOLOGY. I THINK THEY TAKE THAT

SERIOUSLY AND WE SEEN A HUGE UPTICK IN HEARINGS AND PEOPLE

APPEARING IN CONGRESS. SAM ALTMAN RECENTLY AND OTHERS

WE WILL MEET WITH LIKE CHUCK SCHUMER AND OTHER COMMITTEE

MEMBERS AND THE WHITE HOUSE AGENCIES ARE PUTTING FORWARD

THEIR OWN TASKFORCES.

I HOPE IT'S NOT A BIG SCARY MOMENT THAT CAUSES EVERYONE TO

CLAMP ON THIS. ALL OF OUR AMERICAN TECHNOLOGY

COMPANIES ARE VERY FOCUSED ON SAFE, RESPONSIBLE ROLLOUT OF

ARTIFICIAL INTELLIGENCE. IT'S ALREADY BEING USED WELL IN

MANY INSTANCES WE WANT TO INCREASE THAT ACTIVITY AND

APPLY TO DIFFERENT GREAT APPLICATIONS AND POLICYMAKERS

ARE WISELY TRYING TO UNDERSTAND WHAT THEY DON'T RIGHT NOW ABOUT

HOW IT CAN BE USED WELL. SCARLET:

WE CERTAINLY NEED THE RIGHT POLICIES IN PLACE.

SOMETIMES IT'S DIFFICULT TO IDENTIFY THE RIGHT POLICIES ARE

WHAT'S AN EXAMPLE OF THE WRONG POLICY WHEN IT COMES TO

POTENTIALLY REGULATING AI?

>> IN SOME INSTANCES, IF YOU SAW IT COMPLETE CLAMPDOWN THAT

THERE WILL BE NO USE OF AI AT ALL AND WE WILL BE LOOKING FOR

COMPANIES TO PROSECUTE. THAT'S AN EXTREME SITUATION.

I DON'T SEE THAT HAPPENING.

POLICYMAKERS VERY MUCH UNDERSTAND THE WONDERFUL

POTENTIAL OF AI, HOW IS BEING USED RIGHT NOW TO INCREASE

OUTPUT.

THE MODERNA VACCINE FOR COVID, THAT WAS FOUND SO RAPIDLY

BECAUSE AI CAN FIND SO MANY TESTS AND SOLUTIONS TO A

PROBLEM. THERE ARE WONDERFUL APPLICATIONS OF THIS TECHNOLOGY

AND POLICYMAKERS ARE WISELY UNDERSTANDING THAT AND WANT TO

TAKE IT SLOW AND MAKE SURE THEY UNDERSTAND ALL THE THINGS THEY

DON'T KNOW GOOD AND BAD FOR HOW IT CAN BE USED.

AMERICAN TECHNOLOGY COMPANIES TAKE THAT VERY SERIOUSLY.

YOU SEEN ALL KINDS OF FRAMEWORK PUT OUT ESPECIALLY BY GOOGLE

AND MICROSOFT THAT LAYS OUT THE RESPONSIBLE AND SAFE USE OF

ARTIFICIAL INTELLIGENCE. I THINK THAT'S THE RIGHT WAY TO

GO. SCARLET: THERE IS A LOT OF TALK OF

PERHAPS PUTTING TOGETHER A FEDERAL DATA PRIVACY LAW THAT

WILL PROTECT THE DATA OF CONSUMERS AND BUSINESSES GET

PEOPLE SOME CERTAINTY. HOW IS EUROPE A MODEL FOR WHAT

TO DO AND WHAT NOT TO DO?

>> THERE ARE MANY GOOD THINGS TO LEARN FROM THE EUROPEAN

MODEL. THEY MADE SURE THERE WAS ONE

NATIONAL STANDARD FOR THE CONTINENT.

WE HAVE NINE STATES THAT HAVE ALREADY ENACTED THEIR OWN

PRIVACY LAWS. CALIFORNIA WAS THE FIRST BUT

EIGHT OTHERS HAVE FOLLOWED.

WE HAD 28 STATES THIS YEAR THAT INTRODUCED 56 DIFFERENT PRIVACY

LAWS. TECHNET IS VERY INVOLVED IN A

DAILY BASIS TO COME UP WITH ONE NATIONAL STANDARD.

WE WANT ONE NATIONAL PRIVACY LAW THAT WILL GIVE ALL

BUSINESSES IN AMERICA THE RULES OF THE ROAD THEY NEED TO ADHERE

TO. ALSO SOME CONSUMERS ANOTHER DATA IS PROTECTED AND THEY KNOW

EXACTLY WHAT TO EXPECT. SCARLET: THANK YOU SO MUCH.

THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. ALEX:

CHECK OUT THE BLOOMBERG TECHNOLOGY PODCAST ON THE

TERMINAL, ONLINE AND APPLE. THIS IS BLOOMBERG.