'Bloomberg Technology' Full Show (07/12/2023)

>> THIS IS "BLOOMBERG TECHNOLOGY"

WITH CAROLINE HYDE AND ED LUDLOW.

♪

CAROLINE: I'M CAROLINE HYDE AT WORLD

HEADQUARTERS IN NEW YORK, ED LUDLOW IS ON ASSIGNMENT IN SUN

VALLEY. THIS IS BLOOMBERG TECHNOLOGY.

WE WILL HAVE THE LATEST ON A VISION.

SHOT ON WINNING OVER THE U.K. ON ACQUISITION.

THREADS COULD ADD $8 BILLION

PER REVENUE --PER YEAR IN REVENUE FOR THE NEXT YEARS.

AND PARTNERING WITH MICROSOFT WORD A MULTIBILLION-DOLLAR

PARTNERSHIP, TO INCORPORATE GENERATIVE AI INTO ITS BUSINESS.

WE SIT DOWN WITH THE KPMG CEO. MELISSA CHECKED THE MARKETS

WITH ABIGAIL DOOLITTLE. ABIGAIL: WE DO HAVE THE S&P, NASDAQ AND

OTHER INDEXES HIGHER BUT WE ARE OFF THE HIGHS.

1% ON THE COOLER THAN EXPECTED INFLATION REPORT.

YIELDS LOWER, HELPING SOCKS IN TERMS OF A RATION PERSPECTIVE.

LOOK LESS EXPENSIVE, ESPECIALLY TRUE FOR BIG TECH SUCH AS

NVIDIA AND MICROSOFT. BIG TECH NAMES THAT HAVE BEEN

UNDER PRESSURE EARLIER THIS WEEK ON THE UPCOMING SPECIAL

NASDAQ 100 REBALANCING ARE GETTING A DID.

SHOWING ON THE COMMUTE KITCHEN SERVICES SECTOR ON THE YEAR,

THE SECOND-BEST SECTOR ON THE YEAR UP ABOUT 37% AND A COUPLE

OF THE NAMES HELPING OUT TODAY.

META, THREADS, THE COMPETITION TO TWITTER IS GETTING A BOOST.

SOME ANALYSTS THINK IT COULD BE A SIGNIFICANT REVENUE BOOSTER

FOR META. ALPHABET TRADING HIGHER ON THE

DAY.

WE WILL SEE SOME BIG TECH NAMES FLYING.

MICROSOFT, ALPHABET GETTING A BID OFF OF THE LOWER YIELDS.

WE WILL PRAY FOR BIG TECH OVERALL.

WHILE THE S&P 500 AND THE NASDAQ 100 MAY BE AUTHORIZED,

BIG TECH NAMES ARE HANGING ON TO GAINS. CAROLINE:

AND LET'S TALK ABOUT THOSE KEY NAMES. THE U.K., THE ANTITRUST

WATCHDOG HAS SAID THAT A NEW MERGER INVESTIGATION INTO

MICROSOFT'S 69 BILLION ACTIVISION DEAL WOULD BE NEEDED.

TO RESTRUCTURE THE DEAL TO REVERSE THE U.K. VETO.

LET'S BRING IN OUR REPORTER WHO HAS BEEN ALL ACROSS THE

COMPETITION. IS IT GOOD TO GO BACK TO SQUARE

RUN -- SQUARE ONE?

>> IN THIS CASE IT IS. U.K. VETOED MICROSOFT AND ACTIVISION

BEFORE, BLOCKING THE DEAL. BUT A U.S.

COURT SAID THE DEAL CAN MOVE FORWARD AND THE U.K.

AGREED TO GIVE IT A SECOND LOOK, WHICH IS PRETTY

UNHEARD-OF. BUT THIS MICROSOFT AND

ACTIVISION NEED TO RESTRUCTURE SO THEY ARE NOT LOOKING AT

EXACTLY THE SAME THING. MICROSOFT AND ACTIVISION ARE

GOING TO MAKE AN OFFER TO THE U.K.

AND RESTART NEGOTIATIONS OVER WHETHER THEY MIGHT APPROVE THE

DEAL. CAROLINE:

PEOPLE HAVE SAID THE FTC AND REGULATORS HAVE A PLAN BECAUSE

THEY HAVE FORCED CHANGES TO THE WAYS IN WHICH COMPETITORS

ACCESS TO GAINS FOR MICROSOFT. WHAT OTHER WAYS CAN THEY

ALLEVIATE ANXIETY AROUND A LACK OF COMPETITION? LEAH:

THIS WAS ONE THING THE JUDGE IN THE U.S. MADE A POINT OF.

THE REGULATORS THAT ALREADY WON ARE GETTING MICROSOFT OFFER

TENURE DEALS RIVALS. THOSE DEALS WITH NINTENDO, THE

PC GAMING COMPANY, AND TO SOME PEOPLE WHO DO STREAMING GAMES.

THE THING ABOUT THE U.K. AS THEY HATE BEHAVIORAL

REMEDIES, WHEN A COMPANY IS OFFERING TO DO SOMETHING LIKE A

10 YEAR CONTRACT. THEY WANT SOMETHING STRUCTURAL.

WANT MICROSOFT OR ACTIVISION TO OFFER 2000 AND OFF.

MICROSOFT AND ACTIVISION ARE IN THE POSITION OF TRYING TO

DECIDE WHAT IT IS THEY MIGHT BE WILLING TO CLEAVE OFF FROM THE

MAIN DEAL IN ORDER TO PLACATE U.K. REGULATORS. CAROLINE:

DOES THIS FEEL ONCE AGAIN LIKE BIG TECH IS WAITING IN TERMS OF

GETTING THE DEALS THROUGH? LEAH: A GOOD QUESTION.

THE FTC IS EXPECTED TO APPEAL AS SOON AS THIS AFTERNOON.

IT IS NOT TECHNICALLY OVER IN THE U.S..

BUT ANTITRUST LAWS ARE NOT ABLE TO TAKE ON THE TECH STUFF.

HAVE THE FTC LOSING EARLIER

THIS YEAR AND THE META-CASE, ALTHOUGH THE DIFFERENCE WITH

THE U.K. IS THEY HAVE A LITTLE BIT OF A

BETTER LAW THAT IS HARDER TO APPEAL.

YOU HAVE THEM BLOCKING META-GIPHY, SO THERE BLOCKING

THAT EVEN THOUGH THE CNA HAD OPPOSED THE DEAL ALONE.

CAROLINE: INTERESTING, THANK YOU.

WE'RE GOING TO GET INTO META-, WE JUST FINISHED THAT

CONVERSATION AND WE HAVE BEEN ALL OVER THREADS.

WHERE THAN 100 MILLION PEOPLE SIGNING UP.

IT IS SORT OF BECOMING A TWITTER ALTERNATIVE, AND OUT ON.

AND THREADS COULD REACH CLOSER TO 200 MILLION DAILY ACTIVE

USERS AND GENERATE ABOUT $8 BILLION IN ANNUAL REVENUE.

JOINING US IS AN ANALYST, MARK, EVERCORE ISI MANAGING DIRECTOR.

IT IS NO LONGER THE NUMBER ONE TOP PICK BECAUSE OF THE RAMPANT

RAPID RISE IN THE SHAREPRICE WE HAVE SEEN ON THE BACK OF THIS

YEAR. BUT THREADS, $8 BILLION SOUNDS

LIKE A LOT BUT IT IS NOT COMPARED TO THE ANNUAL REVENUE

IN TOTAL. MARK: ALL THAT I AGREE WITH.

I LIKE THE WEIGHT YOU SET IT UP. COULD THEY GIVE YOU A BILLION

DOLLARS IN REVENUE? THE EASIEST PART OF THAT MATH

IS REVENUE THEY COULD GET PER USER. TWITTER HAS A DOCUMENT IN

HISTORY, THEY WERE GENERATING ABOUT $20 IN AD REVENUE PER

USER. FACEBOOK ALSO HAS A DOCUMENT IN

HISTORY. THEY HAVE BEEN ABLE TO GENERATE

LEVELS TWO OR THREE TIMES THAT OF TWITTER.

AND I DON'T THINK IT IS BECAUSE THEY SPAM ADS ALL OVER THE USER

INTERFACE, IT IS MUCH BETTER AT TARGETING AND MATCHING

ADVERTISERS AND USERS. THEY ARE ABLE TO FIND RELEVANT

AUDIENCES FOR ADVERTISERS.

YOU'VE GOT ALMOST 10 MILLION ADVERTISERS -- A LOT OF IT IS

SMALL BUSINESSES. 100 MILLION GRAND IS

OUTSTANDING. CAROLINE:

WHEN DO YOU THINK THE SWITCH WILL HAPPEN?

MARK ZUCKERBERG AND OTHERS HAVE SAID WE ARE NOT GOING TO PUT

THIS OUT THERE UNTIL WE HAVE A LINE OF SIGHT ON USERS.

DO THINK THAT IS WHAT THEY'RE WAITING FOR?

>> I WOULD TAKE THEM ON THEIR WORD. THE NUMBERS WE ARE TALKING

ABOUT, EVEN $8 BILLION SOUNDS LIKE A BIG NUMBER BUT IT IS

ONLY A MID-SINGLE DIGIT PERCENT IMPACT FOR THEM.

IT IS NOT LIKE THEY NEED THE AD REVENUE.

THE GENIUS STRATEGY WOULD BE

SHOW NO ADS, BRING MORE USERS ONTO THREADS AND THE THREADS

EXPERIENCE HAS GOT TO IMPROVE DRAMATICALLY.

I ASSUME IT WILL BE EASIER FOR US TO USE IT FOR THE GREAT

THINGS WE HAVE USED TWITTER FOR IN THE PAST. WHEN THE UBER CFO

NEWS CAME OUT THAT HE MAY BE RESIGNING, IF YOU'D GONE TO

TWITTER, HE WOULD HAVE FOUND PLENTY OF RELEVANT NEWS

ARTICLES. YOU WOULD NOT HAVE SEEN

ANYTHING. A REAL-TIME NEWS OUTLET THAT IS

MAGICAL ABOUT TWITTER. IT NEEDS TO BE BUILT AT THREADS.

WITH THE SET UP FOR META, I THINK TWITTER AS AN ASSET HAS

BEEN UNDERINVESTED IN FOR A COUPLE OF YEARS, NOT JUST SINCE

ELON MUSK TOOK OVER THE COMPANY BUT FOR A COUPLE OF YEARS ON

THE ADVERTISER END USER SIDE. HE CREATED THE OPPORTUNITY FOR

THREADS THAT CAN BRING IN NEW USERS FROM THE EXISTING

DATABASE, EXISTING USER BASE OF 1.5 BILLION USERS. CAROLINE:

THE RACE IS ON AND IT FEELS AS THOUGH TWITTER HAS BEEN MAKING

CHANGES IN TERMS OF BRAND SAFETY.

AT THE SAME TIME, THEY HAVE A WINDOW BEFORE META-TURNS ON THE

ADVERTISING SWITCH. HOW MUCH -- TWITCH--TWITTER IS

SO EMBEDDED IN OUR LIFESTYLE. CAN FRED KEEP IT GOING?

-- THREADS KEEP IT GOING? MARK: WE SHOULD ASSUME THAT TWITTER

WILL BE THE LEADING REAL-TIME NEWS, PUBLIC COUNSELOR FROM A

COMMUNICATIONS PLATFORM FOR THE NEXT FIVE TO 10 YEARS.

THERE WILL PROBABLY MAINTAIN THAT. BUT THERE IS AN OPENING

CREATED. THREADS, IF THEY CAN COME UP

WITH A BETTER PRODUCT, COULD THEY MAKE ONE THAT IS BETTER?

HAVE THE POTENTIAL. THEY COULD BRING IN MORE USERS.

THINK ABOUT THE CHALLENGES TWITTER HAS HAD.

THE ONBOARDING CHALLENGE IS REAL.

WHAT DO I GET IT OUT -- GET OUT OF TWITTER?

THREADS HAS MADE IT EASY FOR PEOPLE TO COME IN, FIND

FOLLOWERS AND PEOPLE TO FOLLOW, FRIENDS, PEOPLE THAT THEY KNOW

AND THEY COME IN IN A WAY THAT NEED -- SEEMS MORE

USER-FRIENDLY AND IS LESS CAUSTIC AS AN ENVIRONMENT.

BUT SO NEEDS TO BE ADDRESSED FOR TWITTER.

A LONG-STANDING BATTLE. SOME OF THAT UNCIVIL COMMENTARY

GETTING OFF THE SITE. IT IS ALL POTENTIAL, BUT THESE

100 MILLION USERS IN LESS THAN A WEEK, WE'VE NEVER SEEN THAT.

CAROLINE: HERE WE HAVE A CONVERSATION

ABOUT COMPETITION BEING ADDED. FOR MANY IT IS ABOUT

COMPETITION BEING TAKEN AWAY. META-IN A CLOSED ROOM TOMORROW

IN THE EU, TRYING TO INDICATE THE MARKETPLACE IN PARTICULAR

AND HOW THEY HAVE NOT REDUCED COMPETITION.

HOW MUCH IS REGULATION A HEADWIND TO BIG TECH NAMES NOW?

MAC -- MARK: IF I SUPPLY, THERE IS MONOPOLY

POWER RELATION, PRIVACY AND SOCIAL HEALTH SORT OF

REGULATION. WHEN IT COMES TO META-, THERE

IS NO MONOPOLY, REGULATORY RISK. IF THERE WAS POWER I FACEBOOK

YOU WOULD NEVER HAVE TO TALK. -- TIKTOK.

THERE'S NOTHING STOPPING PEOPLE FROM GRITTING A NEW SOCIAL

MEDIA OUTLET IN DRIVING SERVICE THERE.

THE OTHER ISSUES ARE SERIOUS, PRIVACY, BUT FACEBOOK HAS COME

AROUND AND HAS REASONABLY ADDRESSED THAT.

WE HAD A POINT WHERE WE OVER DRAMATIZED THE IMPACT OF SOCIAL

MEDIA ON SOCIAL HEALTH.

PLENTY OF PARTS OF SOCIAL MEDIA HAVE POSITIVE IMPACTS.

NOW WE THINK ABOUT THOSE RISKS. MOM STANDING, IT COMES WITH THE

TERRITORY. I'VE INVITED EVERYBODY TO MAKE

A COMMENT AND NOT ALL THOSE WILL BE GOOD. CAROLINE:

MARK MAHANEY, EVERCORE ISI ANALYST. THE UBER PERSPECTIVE,

YOUR TOPIC INTERESTING. THANK YOU SO MUCH.

COMING UP, THE BIG DEAL, KPMG AND MICROSOFT ENTERING A

MULTIBILLION-DOLLAR AI AND CLOUD SERVICES AGREEMENT.

WE DISCUSSED NEXT WITH THE CEO. AND LOOK AT SHOPIFY.

LET'S GO TO THE NITTY-GRITTY, THE FASCINATING STORY OF THIS

COMPANY IS PUTTING A PRICE TAG ON TIME.

A CALCULATOR THAT ESTIMATES THE COST OF ANY MEETING OF THREE OR

MORE PEOPLE. THE COMPANY IS TRYING TO PUSH

YOU TO BE MORE PRODUCTIVE AND TAKE AWAY WITH THE PROJECT TO

BE ROUTED 22,000 HOURS OF MEETINGS BY PUTTING A PRICE TAG

ON IT.

CAROLINE: KPMG HAS ANNOUNCED A MULTIBILLION-DOLLAR COMMITMENT

INTO THE MICROSOFT CLOUD AT AI SERVICES.

OVER THE NEXT FIVE YEARS, IT IS EXPECTED TO BRING IN MORE THAN

$12 BILLION. JOINING US TO DISCUSS THE

PARTNERSHIP IS PAUL KNOPP, CEO.

I ASSUME THIS IS A PROFIT -- PRODUCTIVITY BOOST. PAUL:

YOU THINK ABOUT THE PHILOSOPHY AND THE SPEED OF INNOVATION.

GENERATIVE AI, MANY OF US WERE NOT EVEN TALKING ABOUT NINE

MONTHS AGO AND NOW IT IS ALL ANYBODY TO TALK ABOUT.

IT IS AMAZING THE INNOVATION. TO CODEVELOP SOLUTIONS WITH

MICROSOFT FOR OUR BUSINESSES, ADVISORY, WE CAN BRING TO

MARKET, SOME OF THOSE SOLUTIONS ARE ALREADY UNDER DEVELOPMENT

AND SUMMARY NASCENT STAGES. WE ARE EXCITED ABOUT THE POWER

OF THE PARTNERSHIP THAT WE CAN BRING TO MARKET IN THE FUTURE,

WORKING WITH MICROSOFT. WE WILL SPEND OR INVEST $2

MILLION OVER THE NEXT FIVE YEARS ON AI AND CLOUD AND WE

EXPECT TO GENERATE ABOUT $12 BILLION OF ADDITIONAL REVENUE

OVER THE NEXT SEVERAL YEARS THROUGH CYBERSECURITY, CLOUD

MIGRATION AND NEW APPLICATIONS THAT USE GENERATIVE AI.

CAROLINE: WITH YOUR OWN WORKFORCE HAVING

ACCESS TO THE 365 COPILOT AND THE OPENAI SERVICE, WILL YOU

HAVE A COMPETITIVE EDGE? WILL OTHERS FOLLOW YOUR LEAD

AND DO DEALS WITH MICROSOFT? PAUL: NO DOUBT.

THIS IS NOT EXCLUSIVE AND WE ARE GOING TO INVEST IN

GENERATIVE AI ACROSS THE BOARD. WE ARE LOOKING FOR

OPPORTUNITIES. BUT WE THINK OUR LONG-STANDING

RELATIONSHIP WITH MICROSOFT, WHICH DATES BACK TO 2000, IN

OUR HISTORY OF WORKING WITH THEM AS A PARTNER, EVEN GOING

TO MARKET WITH THEM, WITH OUR CLIENTS AS JOINT CLIENTS, WE

HAVE AN EDGE. WE HAVE THAT LONG, STRONG

HISTORY OF DEVELOPMENT.

WE ARE GOING TO IDEATE THE POWER OF THEIR TECHNOLOGY, OUR

KNOWLEDGE, EXPERIENCE, ADVISORY TAX, AUDITING.

IT IS A GREAT COMBINATION FOR ENSURING WE CAN SOLVE OUR

CLIENTS MOST COMPLEX PROBLEMS AND HELP OUR COMMUNITIES AND

SOCIETY BE BETTER. CAROLINE: HOW ARE YOU SELLING THIS TO

YOUR WORKFORCE? A LOT OF ANXIETIES OUT THERE

SAY AI IS GOING TO TAKE OUR JOBS.

>> IF I LOOK AT THE 40 YEARS I'VE BEEN AT KPMG AND THINK OF

THE HISTORY OF TECHNOLOGY, I HAVE NOT SEEN A DISRUPTION.

THIS IS THE GREATEST IN MANY DECADES.

I HAVE NOT SEEN ONE YET THAT HAS CAUSED A LOSS OF WORKFORCE

ON A GROSS OR NET BASIS.

I BELIEVE WORKFORCES WILL GROW WITH GENERATIVE AI.

WE WILL NEED MORE PEOPLE TO INTERPRET RESULTS AND CODEVELOP

SOLUTIONS.

NO -- WE WILL NEED MORE DATA SCIENTISTS AND CYBER

ASSESSMENTS OF THE INFORMATION THE AI APPLICATIONS PRODUCE.

AS I THINK ABOUT THAT HISTORY OF TECHNOLOGY AND WHAT HAS DONE

TO WORKFORCE, IT HAS GENERATED ECONOMIC ACTIVITY THAT SHOULD

ALLOW US TO GROW OUR WORKFORCES IN THE FUTURE.

AND ALSO PUT SOME OF THOSE ROUTINE TASKS PEOPLE DON'T

ENJOY AND UPSCALE PEOPLE TO DO MORE INTERESTING AND CREATIVE

THINGS. CAROLINE:

YOU HAVE BEEN OUT WITH THE CLIENTS AND THEY AGREE THIS

WILL ADD TO A OUR EMPLOYEES AND PRODUCTIVITY. PAUL:

THAT'S RIGHT. WE CONCLUDED A SURVEY WHERE 80%

OF EXECUTIVES SAID THIS WOULD BE A DISRUPTION.

75% SAID IT WOULD BE THE TOP EMERGING TECHNOLOGY FOR 18

MONTHS. AND THERE IS AGREEMENT THAT IT

WAS GOING TO ADD HEADCOUNT OVER TIME. WE FEEL CONFIDENT IT WILL

REDUCE STRESS BECAUSE SOME OF THESE MUNDANE CAP -- TASKS WILL

NO LONGER HAVE TO BE DONE BY PEOPLE AND THEY CAN PROVIDE

MORE VALUE AND ADVICE, DO MORE CREATIVE THINGS IN THE WORK

ENVIRONMENT. CAROLINE: HERE'S TO MORE EXCITING WORK.

I'M INTERESTED, THE WEIGHT YOU WILL BE USING GENERATIVE AI AND

CYBER. THE WORRIES, THERE HAS BEEN AN

ADOPTION BY COMPANIES TO USE OPENAI WITH MICROSOFT.

BUT THEY DON'T WANT THEIR OWN WORKFORCE USING IT AS THEY ARE

WORRIED ABOUT THEIR DATA ENDING UP IN THE DATA TROVES IN

CHATGPT. HOW HAVE YOU DEALT WITH THE

PRIVACY ANGLE? PAUL: WHEN WE USE A CHATGPT VERSION,

WE USE IT IN OUR OWN SECURE ENVIRONMENT, NOT THE

OPEN-SOURCE APPLICATION. WHICH PROVIDES PROTECTION.

WE VALUE THE INNER PRIZE PROTECTION AND SECURITY

MICROSOFT BRINGS TO US. WE WANT TO USE AI RESPONSE LEE,

ETHICALLY ADDED A SECURE ENVIRONMENT THROUGH WE ARE

GOING TO ENSURE THOSE COMPANIES HAVE THE SAME KIND OF SECURITY

GOVERNANCE AND ARCHITECTURE AROUND THEIR SOLUTIONS.

THAT WILL BE A CONCERN. ALONG WITH CONCERNS AROUND.

AKERS --DATA ACCURACY. CAROLINE: A BIG DISRUPTION.

THANK YOU FOR COMING ON. WE THANK HIM.

SPEAKING OF TAXES, AND AQUATIC LAWMAKERS LED BY ELIZABETH

WARREN HAVE CALLED ON FEDERAL OFFICIALS TO INVESTIGATE

WHETHER TAX COMPANIES FOCUS ON THE CONSUMER LIKE H&R BLOCK AND

TECH GIANTS HAVE A ROLE IN SHARING INFORMATION TAXPAYERS

ENTERED. THEY MIGHT HAVE VIOLENT A

TAXPAYER RIGHTS AND PRIVACY LAWS, BUT IS THERE LIABILITY

ACCORDING TO THE SENATORS? TUNE IN AT FIVE CLOCK P.M.

CAROLINE: IN TALKS WITH NVIDIA TO JOIN

INVESTORS TO ANCHOR THE OFFERING EQUATE TO THE

FINANCIAL TIMES.

EVALUATION OF 35 TO $40 BILLION. ONE MUST WILL HOLD AN EVENT ALL

CAPS ON SPACES FOCUSED ON ARTIFICIAL INTELLIGENCE.

HE HAS INVITED TWO PROMINENT HOUSE LAWMAKERS.

DEMOCRAT AND PUBLIC AND STATE LEADERS WILL SPEAK WITH MUSK

TONIGHT AT 7:00 P.M. TODAY'S BIG TAKE, HOW AI CAN

MAKE POLITICS MORE DANGEROUS. AND AI WITH THE POTENTIAL TO

SUPERCHARGE DISSEMINATION OF MISINFORMATION AMONG OTHER

THINGS. THE HIGHS AND LOWS OF AI,

BLOOMBERG'S EMILY, A GREAT PIECE.

HOW ARE WE ALREADY SEEING AI THE COMING INVOLVED IN

CAMPAIGNS? EMILY: WE ARE.

WE ARE SEEING IT FROM A LOCAL, STATE LEVEL AND AT THE FEDERAL

AND INTERNATIONAL LEVEL.

THERE'VE BEEN INSTANCES OF CONVINCING DEEPFAKES, PICTURES

AND VIDEOS THAT ARE NOT REAL BUT LOOK VERY REAL CIRCULATING

IN CAMPAIGNS. CAROLINE:

WE'RE LSO GOING -- ALSO GOING TO SUPERCHARGE WORKERS.

EMILY: THE PIECE PUBLISHED TODAY,

LAURA DAVIDSON AND I TALKED ABOUT CONGRESSIONAL STAFFERS,

CAMPAIGN STAFFERS, LOBBYISTS AND POLITICIANS.

THE PEOPLE WHO MAKE UP WASHINGTON.

WE ASK HOW THEY ARE USING AI AND IT IS ALREADY BEING USED IN

A WIDESPREAD WAY. LOBBYISTS ARE USING IT TO

CREATE THE FIRST DRAFTS OF CAMPAIGNS.

RATIONAL STAFFERS ARE USING IT TO GET THE FIRST DRAFT ON THE

PAGED OF SPEECHES. GENERATIVE AI IS NOT

SOPHISTICATED ENOUGH TO WRITE THE BILLS BUT WE ARE NOT FAR

OFF. CAROLINE: THERE ARE POSITIVES, BUT

WASHINGTON IS EYEING AI AND REGULATION SERIOUSLY.

CAN THEY TACKLE ITS OWN INFLUENCE WITHIN THEIR SPHERE

OF POLITICAL CAMPAIGNS? EMILY: SENATE MAJORITY LEADER CHUCK

SCHUMER JUST TODAY SAID THIS WILL BE ONE OF THE MOST

DIFFICULT CHALLENGES CONGRESS HAS EVER FACED, TRYING TO

REGULATE THIS COMPLICATED TECHNOLOGY.

THERE IN THE TALKING PHASE, HAVING BRIEFINGS TO GET

LAWMAKERS UP TO SPEED WITH WHAT AI IS AND HOW IT IS BEING USED

BY A FEDERAL AGENCY, HOW IT IS BEING DEPLOYED BY THE TECH

SECTOR. WE ARE STILL EARLY ON.

BUT THEY DON'T WANT TO REPEAT THE MISTAKES THEY MADE WITH

SOCIAL MEDIA, WHERE THEY WERE ASLEEP AT THE WHEEL, SOCIAL

MEDIA GROUP AND NOW IT IS PRETTY MUCH AN UNRELATED SPACE.

CAROLINE: A GREAT TAKE, GO READ IT.

THANK YOU. COMING UP, TALKING AIMING.

MORE ON THE MICROSOFT ACTIVISION DEAL AND WHAT IT

MEANS FOR SONY NEXT. THIS IS BLOOMBERG TECHNOLOGY.

CAROLINE: WELCOME BACK TO "BLOOMBERG

TECHNOLOGY". I'M CAROLINE HYDE IN NEW YORK.

WE ARE FEELING BUOYANT BECAUSE OF THE MACRO PICTURE, INFLATION

COMING IN AT A SLOWER PACE, BACK TO 3%.

SOMEWHAT AT THE BED TARGET BUT IT HAS COME DOWN TO GET ME.

THE NASDAQ HIGHER, .8%. THE TWO YEAR YIELD A

SCREECHING, STARTING TO FACTOR OUT FURTHER RATE HIKES PASSED

IN DATE. -- PAST THAT JULY DATE. WE ARE OFF BY ABOUT ONE THIRD,

IT'S ABOUT THE 30,000 LEVEL PER BITCOIN. -- FOR BITCOIN DOLLAR.

ACTIVISION BLIZZARD, WE GOT NEWS THAT THE U.S.

COURT HAD NOT STALLED ON THE DEAL TO BE PURCHASED BY

MICROSOFT, GIVING AWAY A LITTLE PROFIT TAKEN YESTERDAY.

MICROSOFT A BIG CONTRIBUTOR TO THE NASDAQ.

PALO ALTO NETWORKS INTERESTING, SOME CYBERSECURITY OFFERINGS.

PEOPLE ARE WORRIED ABOUT HOW THAT WILL AFFECT NETWORKS.

UP BY MORE THAN 1.7%. A GROUP UP BY 12%.

THE AMOUNT OF DELIVERIES IN THE PREVIOUS ORDER, THE SECOND

QUARTER, DID NOT LIVE UP TO EXPECTATIONS.

I WANT TO TALK A LITTLE ABOUT MICROSOFT AND ACTIVISION

BLIZZARD. WE WILL START WITH THE WAY

GAMERS ARE BEING AFFECTED. WHO ARE PLAYING THE GAMES?

HISPANIC AND BLACK AMERICANS ARE PLAYING VIDEO GAMES MORE

THAN OTHER ETHNIC GROUPS ACCORDING TO A STUDY.

IT CHANGES THE STEREOTYPE THAT LARGELY IT IS WHITE AMERICANS.

JOINING US ON THE DEAL MORE BROADLY, WE ARE SO PLEASED TO

HAVE YOU IN THE STUDIO. DEBUNK SOME MYTHS.

WHO ARE PLAYING GAMES, WHO IS WORRIED AND ANXIOUS ABOUT HOW

THEY GET ACCESS TO CALL OF DUTY? >> IT IS TRUE, THE STEREOTYPE

IS THAT MOST GAMERS ARE WHITE MEN.

HOWEVER, WHITE AMERICANS ARE NOT THE MOST LIKELY PEOPLE TO

BE PLAYING GAMES IN THE U.S.. A NEW STUDY FROM THE

ENTERTAINMENT SOFTWARE ASSOCIATION SHOWED THAT

AMERICANS WHO ARE LATINO, LACK, ASIAN AMERICAN ARE

SIGNIFICANTLY MORE LIKELY THAN WHITE AMERICANS TO BE PLAYING

GAMES LIKE CALL OF DUTY. CAROLINE:

WE KNOW THAT MORE WOMEN ARE PLAYING, MOBILE OR CONSOLE.

IS THAT BEING REFLECTED IN THE GAMES, IS THERE MORE DIVERSITY

IN THE CHARACTERS? CECELIA: ABOUT HALF OF GAMERS ARE WOMEN.

AND GAMING COMPANIES ARE REALIZING THAT IT IS PRODUCTIVE

TO THEIR BOTTOM LINE TO MAKE GAMES THAT APPEAL TO A WIDER

AUDIENCE THAN TRADITIONAL. WE ARE SEEING MORE PROTAGONISTS

IN TRIPOLI GAMES, HIS BLOCKBUSTER GAMES, WHO ARE

WOMEN AND NONWHITE. IT IS BEEN CELEBRATE AND WIDELY

ACROSS THE GAMING INDUSTRY AND BROUGHT A LOT OF GAMERS INTO

THE BOWL. CAROLINE:

LET'S TALK ABOUT WHO'S CONSOLE YOU MIGHT BE PLAYING.

AS WE GO TO THE TWISTS AND TURNS OF THE ACTIVISION DEAL,

IT SEEMS THAT SONY'S STRANGLEHOLD ON CONSOLES HAS

BEEN WHY MICROSOFT IS ALLOWED TO MAKE THIS DEAL. CECELIA:

IT IS INTERESTING.

MICROSOFT HAS ARGUED IT HAS THE THIRD PLACE, SONY PLAYSTATION,

NINTENDO SWITCH AND THEN XBOX WHICH IS MICROSOFT.

THEY HAVE PC GAMING OFFERINGS, THE XBOX APP ON PC AND CLOUD

GAMING ALLOWS PEOPLE TO PLAY MIKE IS OFF GAMES ACROSS MOBILE

DEVICES, TABLETS, SMART TV IS. AT THE SAME TIME, WHAT THE FTC

DETERMINED YESTERDAY IS THAT ACTUALLY WHEN IT COMES TO CALL

OF DUTY, MICROSOFT IS NOT REALLY INCENTIVIZED TO BLOCK

OFF THE GAME FROM COMPETITORS SONY.

MICROSOFT IN A LARGE WAY RELIES ON SONY CONSUMERS, PLAYSTATION

GAMERS, TO PLAY CALL OF DUTY WITH PEOPLE ON XBOX. CAROLINE:

SO CLEARLY IN THEIR INTEREST. THANK YOU FOR BRINGING IT DOWN,

CECELIA WITH ALL THAT GREAT REPORTING.

LET'S STICK ON THE DEAL AND WHETHER OR NOT MICROSOFT IS

GOING TO BE ABLE TO GET ITS HANDS ON ACTIVISION.

BRITAIN'S ANTITRUST WATCHDOG SAID THAT A NEW INVESTIGATION

INTO THE $69 BILLION DEAL MAY BE NEEDED TO REVERSE A PREVIOUS

VETO. JOINING US FOR MORE IS PUBLIC

KNOWLEDGE POLICY DIRECTOR AND COMPETITION CHARLOTTE.

THANK YOU FOR JOINING US. HAVE A HISTORY OF WORKING WITH

THE FTC AND YOU UNDERSTAND CONCERNS AROUND COMPETITION.

WHEN YOU SAW THE JUDGE IN THE U.S.

AND SAN FRANCISCO HAD GIVEN THE CLEAR FOR NOW, WHAT DID YOU

THINK? CHARLOTTE: IT IS A DISAPPOINTING RESULT

FOR CONSUMERS. ONCE THE FTC BROUGHT THIS CASE,

WE WERE HOPING IT WOULD BE A WIN ON THE PRELIM AREA

INJUNCTION. THEY MIGHT CONTINUE TO FIGHT

THE CASE. BUT THIS IS A LOSS. CAROLINE: INTERESTING.

MANY HAVE FELT THAT EVEN THOUGH THE FTC LOST, THEY HAVE MANAGED

TO FORCE THE HAND OF MICROSOFT TO MAKE SOME CHANGES.

SO HAVE U.K. REGULATORS. WHY DON'T YOU THINK THAT HAS

BEEN ENOUGH?

>> THERE IS ALSO A SETTLEMENT IN THE EUROPEAN UNION WHERE

THEY ARE GOING TO BE GIVING SOME LICENSES FOR OTHER CLOUD

GAMING SERVICES TO BE ABLE TO USE CALL OF DUTY.

THAT IS GREAT, THAT'S PROGRESS. BUT WE WOULD STILL BE CONCERNED

ABOUT THE COMPETITIVE IMPACTS OF THE MERGER.

IT IS NOT JUST ABOUT CALL. IT IS ALSO THE NEXT BIG GAME.

AND I'M CONCERNED ABOUT INDEPENDENT GAMERS, INDEPENDENT

GAME STUDIOS HAVING THE SAME OPPORTUNITY IS TO REACH

CUSTOMERS AND FOR THOSE GAMERS TO HAVE ACCESS TO THOSE GAMES.

THERE ARE GOING TO BE BROADER ANTICOMPETITIVE IMPACTS WE ARE

CONCERNED ABOUT AND I THINK CALL OF DUTY IS NOT THE ONLY

THING THAT NEEDS TO BE FIXED. CAROLINE:

AS YOU MENTIONED, DEALERS IN THE FTC COULD APPEAL. THE U.K.

MIGHT HAVE TO START FROM SCRATCH, COMING WITH DIFFERENT

WAYS THEY COULD ALLEVIATE THE PREVIOUS VETO TO THE DEAL.

WHAT COULD THEY DO TO ALLEVIATE THOSE CONCERNS? CHARLOTTE:

IT WOULD BE DIFFICULT TO ADDRESS THIS MERGER WITH

BEHAVIORAL REMEDIES, WITH A SETTLEMENT.

I THINK THAT IS STILL ON THE TABLE. BUT THOSE SETTLEMENTS ARE

OFTENTIMES LIMITED. THE SETTLEMENT IN THE EUROPEAN

UNION IS FOR 10 YEARS. A LOT COULD HAPPEN.

I THINK ABOUT PAST MERGERS WHERE THEY SEE THE 10 YEAR

SETTLEMENT. IT ENDS UP GOING BY FAST AND

CONSUMERS ARE LEFT WITH A CONSOLIDATED MARKET.

THEY ARE ONLY AGREEING TO A SETTLEMENT THAT WILL SOLVE THE

PROBLEM.

CAROLINE: THEY ARE ALMOST TRYING TO

UNWIND THE SHIFT OF THIS AUTHORITY AND THE WAY IN WHICH

IT VIEWS DEALS AND THE ADVERSE EFFECTS OF MONOPOLIES OR SIZE

AND SCALE.

IT IS NOT ALL ABOUT -- IS LENA CON GOING ABOUT THIS IN THE

RIGHT WAY TO TAKE ON THESE BIG

DEALS, TRYING TO TAKE THESE AND LOSING? CHARLOTTE:

IT WOULD BE BETTER TO WIN. BUT YOU WILL HAVE LOSSES.

IT MAY BE PART OF WHAT ENDS UP BEING IN A LONG PROCESS.

THAT IS WHAT WE REALLY NEED. THE CASES ARE SHOWING THE LAW

IS NOT WHERE IT NEEDS TO BE. WE NEED CONGRESS TO BE ABLE TO

ACT. THERE WAS SO MUCH ATTENTION AND

EXCITEMENT ABOUT ANTITRUST IN CONGRESS LAST YEAR.

IT DID NOT PASS ANY NEW LEGISLATION.

WE NEED STRONGER ANTITRUST LAWS IN THE U.S.

TO HAVE COMPETITIVE MARKETS. CAROLINE:

POTENTIALLY IN THE U.K.. WHAT MODEL DO YOU WANT TO SEE,

WHAT CHANGES FROM A LEGAL PERSPECTIVE? CHARLOTTE:

WITH THIS CASE, IT SEEMS THAT COURT GOT THIS TRIPPED UP ON

THE IDEA OF A VERTICAL MERGER. MAYBE WHERE A GAME STUDIO IS

BUYING A GAME STUDIO. THIS IS A PROVIDER OF CONSOLE,

SOME SERVICES AND BUYING A GAME STUDIO.

THE COURT SAW IT AS A VERTICAL MERGER AND TALKED ABOUT HOW

THEY MAY HAVE COMPETITIVE BENEFITS AND ARE RARELY STOPPED.

THAT IS NOT THE SAME AS HAVING A PRESUMPTION IN THE LAW IN

FAVOR OF VERTICAL MERGERS. THEY CAN BE ILLEGAL UNDER

ANTITRUST LAW. IT IS CLEAR THAT THAT NEEDS TO

BE MORE CLEAR. THE FTC IS WORKING ON NEW

MERGER GUIDELINES. THAT WILL BE AN OPPORTUNITY FOR

THEM TO EDUCATE JUDGES AND MAKE IT MORE CLEAR THAT VERTICAL

MERGERS CAN BE HARMFUL.

BUT THAT IS ALSO AN AREA CONGRESS CAN HELP WITH.

CAROLINE: MANY WOULD SEE THIS AS A

RELATIVELY DEMOCRAT HEAVY FTC. CHARLOTTE:

CERTAINLY THERE ARE NO PUBLICAN COMMISSIONERS AT THE FTC RIGHT

NOW. BUT THAT IS ON THE PEOPLE WHO

NEED TO MOVE FORWARD WITH THAT. BUT THERE HAS BEEN WHY PARTISAN

INTEREST. THERE WERE MULTIPLE BIPARTISAN BILLS THAT PASSED

THROUGH THE JUDICIARY COMMITTEE WITH BIPARTISAN VOTES.

REPUBLICANS ARE ALSO INTERESTED IN THE ENFORCEMENT AND THAT IS

HOW WE GET THE FREE MARKET FUNCTIONING CORRECTLY. CAROLINE:

THANK YOU, YOUR PREVIOUS EXPERTISE WORKING WITH THE FTC

AND NOW DIRECTOR OF PUBLIC POLICY.

COMING UP, HOW AMERICAN EXPRESS IS TRYING TO TAKE ON THE WORLD

WITH THE HELP OF FINTECH, MORE WITH AMERICAN EXPRESS RAYMOND

JOABAR.

CAROLINE: HAS BEEN FOUR YEARS SINCE

AMERICAN EXPRESS CLAIMED ITS CARDS ARE ACCEPTED AT AS MANY

PLACES AS RIVALS VISA MASTERCARD IN THE U.S..

IT IS LOOKING TO DO SOMETHING SIMILAR OVERSEAS AND IS

PARTNERING WITH SOME OF THE BIGGEST FINTECH COMPANIES, THE

LATEST WILL HELP MERCHANTS ACCEPT AMERICAN EXPRESS MORE

BROADLY.

YOU'RE THE ONE GOING AROUND FOR AMEX.

HAS THIS BEEN THE ONE TO ENSURE THAT THE LIKES OF STREIT AND

SQUARE ARE ENABLING MY ABILITY TO USE IT IN THE U.K.?

>> NOT ONLY THE U.K. BUT AROUND THE WORLD.

PARTNERSHIPS WITH PROCESSORS AND FINTECH, THEY HAVE BEEN

HELPING TO FUEL OUR GROWTH.

IT IS GROWING RAPIDLY. THERE FAR MORE CONFIDENCE.

IT IS ALSO BEEN ALONG THE GROUND, GETTING SALES IN FRONT

OF CERTAIN TYPES OF MERCHANTS TO BRING THEM AROUND TO USING

AMEX. HOW IS THAT GONE AND WHAT KIND

OF COMPANIES AND SELLERS ARE COMING TO YOUR PLATFORM ECHO --

PLATFORM?

>> WE STARTED THAT. OUR ORIGINS OUR OWN TRAVEL AND

ENTERTAINMENT. OUR CARDMEMBERS WANTED TO USE

THE CARDS FAR MORE PLACES. WE PROVIDED INCENTIVES AND WE

NEEDED TO MOVE INTO EVERYDAY SPENT CATEGORIES.

A LOT OF SMALLER SHOPS AND RETAIL. AS WE STARTED DOWN THAT

JOURNEY, WE DEPLOYED A HYBRID ACQUIRING MODEL.

OUR PROPRIETARY TEAM SIGN AND MANAGE THIS.

IT ALLOWS PARTNERS AND FINTECHS TO MANAGE THAT.

WE HAVE MORE THAN TRIPLED THE LOCATIONS THAT ARE ACCEPTING

AMERICAN EXPRESS AND THAT GIVES CARD NUMBERS MORE CONFIDENCE TO

PULL OUT THEIR CARD AND WE HAVE THIS DESIRE TO ELIMINATE THE

QUESTION DO YOU ACCEPT AMERICAN EXPRESS. CAROLINE:

NOT JUST IN LUXURY PLACES. WHAT YOU THINK OF A MORE

LUCRATIVE, HIGHER SPENDING USING AMEX.

BUT YOU'RE GOING TO U.K. KEY CODERS--CUTTERS.

BUT HOW MUCH HAS THIS BEEN THE DRIVER OF WHERE YOU GO AND PUT

YOUR RESOURCES TO WORK ECHO -- WORK? RAYMOND:

DATA IS A THING THAT MAKES US UNIQUE.

WE ISSUE MANY OF THE CARDS THAT OUR CARD MEMBERS CARRY, AND WE

HAVE DIRECT RELATIONSHIPS WITH MERCHANTS.

THAT CREATES TREMENDOUS DATA. ONE OF THE UNIVERSAL TRUTHS

THAT ALL BUSINESSES CARE ABOUT IS THAT THEY WANT TO FIND NEW

CUSTOMERS. WE CAN USE THE DATA WE HAVE TO

ALLOW MERCHANTS TO MARKET TO OUR PREMIUM HIGH SPENDING

CARDMEMBERS.

WHETHER IT IS TESCO OR SMALLER MERCHANTS IN EVERYDAY SPEND

CATEGORIES, WE WANT TO MAKE SURE WE HAVE CONFIDENCE

EVERYWHERE WE WANT TO SPEND BUT ALSO WE CAN HELP THEM GROW,

ALLOWING US TO BE AN EFFICIENT MARKETING CHANNEL SO THEY CAN

MARKET INTO OUR PREMIUM CARDMEMBER BASE AND FIND NEW

CUSTOMERS. IT IS SOMETHING WE CALL AMEX

OFFERS. IT IS POWERED BY THE UNIQUE AND

RICH DATA WE HAVE BY BEING THE ISSUER OF THE CARS -- CARDS AT

HAVING THOSE RELATIONSHIPS. CAROLINE:

WHY DO THIS NOW, WHEN WE ARE THINKING ABOUT AN ECONOMY THAT

IS TOUGHER AND WE ARE THINKING ABOUT PEOPLE SPENDING IN A

DIFFERENT MATTER, WHY MAKE THIS COMMITMENT TO BE MORE OVERSEAS?

RAYMOND: TWO THINGS. OUR CARD MEMBERS WANTED TO USE

THEIR CARD IN MORE PLACES. WE STARTED ON THIS JOURNEY IN

THE U.S. TO REACH PARITY. IN THE U.S., 99% OF THAT

MERCHANTS THAT ACCEPT CREDIT CARDS NOW ACCEPT AMERICAN

EXPRESS. AND WE WANTED TO MAKE SURE WE

WERE IN THE PLACES WHERE OUR CARDMEMBERS LIVE, WORK AND

TRAVEL. WE FOCUS THE TEAMS ON INTERNATIONAL CITIES AND WE

HAVE MADE MATERIAL PROGRESS. THEY EXPECT -- ACCEPT AMERICAN

EXPRESS SINCE 2018 AND WE CONTINUE TO HAVE UPSIDE ABOVE

THAT. NOW IS A GREAT TIME TO DO IT.

MAC EXPRESSES BEEN AROUND FOR 173 YEARS.

WE'VE BEEN THROUGH ALL TYPES OF CYCLES.

WE ARE OPERATING IN A CYCLICAL ENVIRONMENT.

BUT ECONOMIES -- GOOD ECONOMIES AND BAD, WE KNOW TO GIVE THEM

CONFIDENCE. CAROLINE: GREAT TO HAVE SOME TIME WITH

YOU. NOW GET BACK TO WORK IN THE U.K., AMERICAN EXPRESS

PRESIDENT OF NETWORK SERVICES. WE WILL ALL GO BACK TO SUN

VALLEY COMING UP, WHERE TECH AND MEDIA EXHIBITED'S BEST

EXECUTIVES ARE SMILING FOR THE CAMERA AND BUT EVERYTHING.

CHIPS, ENTERTAINMENT, DEALS. WHAT THE PARAMOUNT CEO THINKS

ABOUT THE SUMMER BLOCK -- BOX OFFICE THIS YEAR.

>> FEELING GREAT. WE ARE OPENING MY SEVEN THIS