♪ >>>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: LIVE FROM NEW YORK AND SAN FRANCISCO, BLOOMBERG TECHNOLOGY. TECH STOCKS ARE ON A ROLL FOR ANOTHER GAIN AS POWELL SAYS IT'S TIME FOR MORE RATE CUTS. ED: HARRIS BACKING AMERICA AND AI WITH THE SPACE RACE, REACTION FROM CHICAGO. CAROLINE: OPENAI OPPOSITION, SCOTT WIENER JOINS US AS INDUSTRY LEADERS PUSH BACK AGAINST HIS PROPOSED AI LEGISLATION. FIRST, CHECKING IN ON THE MARKETS, IT'S ALL ABOUT FED CHAIR POWELL AND AN INCREASE WITH THE NASDAQ COMING OFF OF

THE HIGHS OF EARLIER TRADING, SHOWING THAT THERE IS A REBOUND OR HOPE FOR THESE RATE CUTS TO KICK IN IN SEPTEMBER. BUT WE SAW, TURNING OUR EYE TO FRENCH COMPANIES HERE IN THE POUND OVERALL, THE FACT THAT CRYPTO HAS BEEN ON THE HIGHER SIDE. WHAT ARE YOU WATCHING ON THE MICRO BASIS? ED: NVIDIA. WE TALKED ABOUT HOW THEIR EARNINGS WILL BE A MACROLEVEL EVENT. AND WE WILL TALK A BIT MORE ABOUT THE MARKETS, RIGHT? ON THE HEELS OF THE HIGHLY ANTICIPATED POWELL STATEMENT. CAROLINE: IT CERTAINLY WAS. WE WERE ALL THINKING ABOUT WHAT IT MEANT FOR THE TECH SECTOR. LOOK, NO SURPRISE THAT ONCE AGAIN WHEN YOU LOOK AT THE NASDAQ AND NASDAQ 100, THE KEY PLAYERS WERE LEADING IS HIGHER.

AND THAT MAYBE THAT IS THE MACRO EVENT FOR THE MARKET AT THE MOMENT WHERE ALL EYES ARE ON NVIDIA EARNINGS COMING AND WHAT IT MEANS FOR THE INVESTMENT PICTURE FOR AI. NOT MUCH OF THAT COMING FROM JACKSON HOLE TODAY. MUCH MORE A SIGNAL FROM THE FED CHAIR ABOUT THE FACT THAT THE TIME HAS COME FOR RATE CUTS. THAT WE ARE SEEING WEAKNESS IN THE LABOR MARKET THAT HE DOESN'T WANT TO ACCENTUATE FURTHER. WEAVING THAT NARRATIVE AROUND WHAT COMES FROM A MACRO POLICY PERSPECTIVE AND HOW IT HITS THE MICRO IN TERMS OF INDIVIDUAL MOVERS, WE CAN BRING IN JUST. COMING OFF THE HIGHS, BUT CERTAINLY WHAT THE FED CHAIR POWELL SAID FUELED THE MARKET, OFFSETTING SOME OF THE DAYS

WEAKNESS BUT ONLY SOME. >> THAT'S RIGHT BUT STILL THE S&P 500 IS A WHISKER AWAY FROM THE ALL-TIME HIGH OF JULY 10. THE NASDAQ 100 IS 4% AWAY. WE WANT TO SEE UNDER THE HOOD WHEN IT COMES TO WHAT IS RALLYING. IT'S THE UNPROFITABLE COMPANIES LIKE GOLDMAN SACHS THAT ARE TRACKING THAT. YOU HAVE OTHER CORNERS OF THE STOCK MARKET BENEFITING FROM EASING POLICY, LIKE THE RUSSELL 2000 SMALL CAPS TAKING OFF OVER 2% AND COMPANIES WITH WEAKER BALANCE SHEETS WITH DIFFERENT BASKETS BEING TRACKED, THEY ARE OUTPERFORMING. ED: I ALWAYS GO STRAIGHT TO NI I GO ON THE TERMINAL, ASKING HOW THEY USUALLY FEEL ABOUT IT AND THEY CALL IT THE POWELL PIPIT.

IT'S MORE LIKE A FED VICTORY LAP, THAT SOME OF THE JACKSON HOLE NARRATIVE. GOING BACK TO NVIDIA, WE KNOW THE -- WE SORT OF KNEW THIS WAS GOING TO HAPPEN. >> TODAY OUR EQUITIES TEAM DID THE TAKING STOCK THIS MORNING BUT WHEN YOU LOOK AT THE POTENTIAL SWING IN THE OPTIONS MARKET BEDDING, TO YOUR POINT, NVIDIA REPORTS AFTER THE VALVE. THE FOLLOWING DAY DURING INTRADAY TO TRADING, THE SWING COULD BE 10% IN EITHER DIRECTION, WHICH IS ABOVE THE LONGER-TERM AVERAGE OF 7.5%. THAT MEANS -- WHAT IS IT LIKE FOR OTHER CHIP STOCKS? A LOT OF THEM CAME DOWN AFTER THE SELLOFF WHERE THEY PEAKED FOR THE JULY BUT WE HAVE SEEN A BOUNCE BACK HERE SO IT WILL BE INTERESTING TO SEE THAT AS

VALUATIONS CAME DOWN A BIT. IT WENT BACK UP SLIGHTLY BECAUSE OF THE REBOUND OF THE LAST COUPLE OF WEEKS, SHAPING THE DIRECTION EVEN THOUGH VOLATILITY IS EXPECTED TO FADE FOR THE NEXT COUPLE OF WEEKS BECAUSE HEADING INTO LABOR DAY. THAT'S A VOLATILE MOVE NEXT THURSDAY AFTER WE HEAR FROM NVIDIA ON WEDNESDAY. ED: NVIDIA, OFF SESSION HIGHS, UP SIGNIFICANTLY. HAPPY FRIDAY. WITH THE U.S. MARKET HEAVILY CONCENTRATED IN TECH, HARDWARE IN PARTICULAR, INVESTORS ARE LOOKING AHEAD TO THOSE QUARTERLY RESULTS. AS WE SAID, AUGUST 28, WEDNESDAY AFTER MARKET. LET'S BRING IN ALLISON, PORTFOLIO MANAGER AT JANICE COVERING GLOBAL TECHNOLOGY.

LEADERS AND SUSTAINABLE TECHNOLOGY FUNDS. THAT'S THE STATE OF PLAY. JACKSON HOLE HAS BEEN AND GONE. NVIDIA IS NEXT WEDNESDAY. WHICH IS TOP OF MIND FOR YOU, ALLISON? ALLISON: I FOCUS ON THE BOTTOM UP, WHERE THE KEY FOCUS IS GOING TO BE ON EARNINGS NEXT WEEK. SEEING AS THE ENTERPRISE DEMAND PICKS UP, WE SAW SIGNS OF THAT FROM LENOVO. IN RECENT WEEKS IF IT CARRIES THROUGH IT'S NOT TEMPERED, BUT WE HAVE DELL, NETWORK APPLIANCES, PURE STORAGE NEXT WEEK AS WELL. CAROLINE: I LOVE HOW YOU ARE GOING BOTTOM UP, ALLISON. DOES ANY CONVERSATION AROUND THE DINNER TABLE OR AT BIG CONFERENCES YOU ARE GOING TO AT THE MOMENT END UP WITH PEOPLE

SAYING THAT YOUR INDUSTRY IS JUST SUCKING UP THE OXYGEN AND ALL THE PASSIVE MONEY. IS THERE A WORRY ABOUT INDEXES HAVING TO REBALANCE IN SOME WAY? >> WE ALWAYS COME BACK TO FUNDAMENTALS IN THE FOCUS ON RESULTS AND ROTATION INTO SMALLER CAPS. I THINK THAT IF YOU LOOK BACK EVEN TO 1990, WHEN YOU SEE TRILLION DOLLAR COMPANIES, THE PACE AT WHICH THEY REACHED 2 TRILLION WAS FASTER AND MORE LIKELY THAN COMPANIES AT 100 BILLION GOING TO TWO HUNDRED BILLION. TECHNOLOGY ALWAYS TENDS TO BE SIZE AGNOSTIC. LARGE CAP WINNERS HAD KEY COMPETITIVE ADVANTAGES AND CAN CONTINUE TO GROW ON THAT. IN SPITE OF THE INTEREST RATE ENVIRONMENT RISING WITH FALLING RATES, WE ARE QUITE AGNOSTIC ABOUT THE SIZE OF COMPANIES.

AND, YOU KNOW, THE INDEXES, THERE ARE JUST NOW WINNERS AND LOSERS IN THE LARGE CAP NAMES. PRIOR CYCLES, NOT ALL THE PAST LEADERS BECOME THE LEADER IN THE NEXT CYCLE. WE THINK IT'S A GREAT TIME TO CHOOSE WHICH COMPANIES ARE GOING TO LEAD NEXT WEEK. ED: DOES -- CAROLINE: DOES NVIDIA JUST STAY AS THE PICKS AND SHOVELS INVESTMENT? WHEN DO THE HYPERSCALER INVESTMENTS PAY OFF? >> WE HAD MANY OF THE SAME QUESTIONS ABOUT APPLE DURING THE MOBILE ERA AND IT LOOKED LIKE THE MAJORITY OF THE VALUE IN PARALLEL PROCESSING IS ACCRUING TO NVIDIA. BUT THAT'S THE MAJORITY AND NOT ALL. AS WE HAVE SEEN PREVIOUSLY, THERE WILL BE A BROADENING OUT OF BENEFICIARIES.

ON THE RETURN ON INVESTMENTS ON AI, JUST AS RECENTLY AS A FEW DAYS AGO WE HAD WAL-MART TALKING ABOUT HUGE BENEFITS TO THEIR PRODUCT CATALOG, BEING ABLE TO PUT 800 50 MILLION PIECES OF DATA. IT WOULD HAVE TAKEN 100 TIMES THE HEADCOUNT BEFORE THEY SAW THE GAINS COMING FROM THE AI SPEND. WE HEARD ON THE ALREADY CHASSE BLOG TODAY SIMILARLY WHAT THEY CAN SAY WITH FASTER CODING. THAT WILL CONTINUE TO ENCOURAGE SPEND. THE BROADENING OF SPEND TO THE HYPERSCALERS AND ENTERPRISES AS WELL. ED: TO THAT POINT, LET'S BRING BACK THE CHART YOU HAD A MOMENT AGO, MEGA CAPS AND THAT PERFORMANCE. ALLISON, THESE ARE ALL NAMES THAT YOU HOLD. MICROSOFT, AMAZON, ALPHABET,

META-.
WHEN ALL IS SAID AND DONE ON AUGUST 29, WHAT WOULD NEED TO HAPPEN FOR THE NVIDIA EARNINGS FOR YOU TO RETHINK ALLOCATION TO THOSE GOING FORWARD? >> I THINK THAT IF YOU LOOK BACK AT LAST YEAR, WE DON'T REACT JUST TO ONE QUARTER OF EARNINGS, THERE IS A LOT OF POSITIONING COMING INTO THAT. BUT WE HAVE ALREADY SEEN EVIDENCE FROM ALL OF THE REPORTS FROM THOSE COMPANIES THAT YOU JUST SAW THAT THEY ARE COMMITTED TO CONTINUING TO SPEND WHERE THEY SEE A RETURN. WE THINK THAT THE NVIDIA RESULTS WILL JUST CONTINUE TO SHOW THAT THEY ARE SEEING STRONG VISIBILITY, BROADENING. WE DON'T REALLY SEE THAT AS BEING ANYTHING FROM NVIDIA THAT WILL MATERIALLY CHANGE A VIEW ON ANY MEGA CAPS. ED:

ANYTHING THAT EXCITES YOU OUTSIDE THE U.S. MEGA CAP NAMES? ANYWHERE ELSE IN THE WORLD? >> LOTS OF EXCITING NEW COMPANIES WITH EMERGING TECHNOLOGY LEADERS, LIKE IN INDIA. WE ALSO SEE THROUGH THE U.S. MARKET THAT THERE ARE SEVERAL AREAS JUST EMERGING IN TERMS OF PRODUCTIVITY GAINS TO BE HAD FROM ARTIFICIAL INTELLIGENCE, APPRECIATING IT EVEN IN SOME OF THE CONTRACT MANUFACTURERS, WHERE WE SEE TRENDS TOWARDS DEGLOBALIZATION, TOWARDS A FOCUS ON HIGHER SUPPLY CHAINS. SOME OF THE BEST AI SPEND IS ACTUALLY TRICKLE-DOWN TO SOME OF THE COMPANIES THAT WILL HAVE TO MANUFACTURE. THAT'S NOT JUST TSMC FOR NVIDIA, BUT THE SERVERS, THE STORAGE THAT WILL BE MADE FOR MANY OF THESE HYPERSCALERS.

WE THINK YOU WILL START TO SEE THAT ACCRUE TO CERTAIN NAMES FURTHER DOWN IN THE MARKET CAP. CAROLINE: THAT'S INTERESTING. AGAIN, WE ARE TALKING ABOUT THE INFRASTRUCTURE LAYER. WHERE WILL THE MONEY GO FOR THE APPLICATION LAYER, AT SOME POINT, DO YOU THINK? >> IT JUST TAKES TIME. WHEN APPLE LAUNCHED THE IPHONE IN 2008, AND THEN YOU HAD THE IPO OF UBER, THOSE YEARS OF DEVELOPING THE APP STORE, APPLICATIONS, WE TEND TO SEE, AND IT HAS FOLLOWED A SIMILAR PATTERN FROM AI, YOU TEND TO SEE ADVERTISING BENEFIT FIRST, AND THEN WE SEE E-COMMERCE, WERE GETTING UP FROM WALMART. NOW WE ARE SEEING EMPHASIZING ON THE PRODUCTIVITY GAINS THAT FILTERS INTO OTHER NEW APPLICATIONS, MANY OF WHICH WE

WOULDN'T HAVE THOUGHT OF FIRST. THIS HAPPENS OVER MULTIPLE YEARS WITH TECHNOLOGY, PROPER WAVES. THIS TAKES FIVE TO SEVEN YEARS TO PLAY OUT. YOU SHOULD NECESSARILY LOOK AT THE INVESTMENTS THAT HAVE TO BE WITH THE APPLICATIONS TO DATE, MANY OF THEM STILL HAVE TO EMERGE AS WE START TO SEE THE INTERFACE FOR AI AND THE CONSUMERS WHO ARE SOMEWHAT STILL INVOLVED. CAROLINE: ALWAYS SO GREAT TO HAVE YOU ON THE SHOW, ALLISON. HAPPY WEEKEND IN EDINBURGH. GLOBAL TECHNOLOGY LEADERS ON SUSTAINABLE FUTURE TECHNOLOGY FUNDS. THERE'S MORE AHEAD. STICK WITH US, THIS IS BLOOMBERG SURVEILLANCE. -- BLOOMBERG TECHNOLOGY. ED: FIRST UP, ALIBABA SHAREHOLDERS

APPROVED A PLAN TO UPGRADE THEIR HONG KONG LISTING TO PRIMARY STATUS, A MOVE THAT IS EXPECTED TO ATTRACT BILLIONS IN INVESTMENT FROM MAINLAND CHINA. THESE ARE SHARES OF THE ONLINE RETAILER TRAILING KEY RIVALS LIKE TENCENT. IT GOES INTO EFFECT AUGUST 28. UBER IS SET TO START OPERATING -- OFFERING SELF-DRIVING CRUISE VEHICLES NEXT YEAR. THIS COMES AS CRUISE IS TRYING TO REGAIN TRACTION AFTER LOSING GROUND, GROUNDING ITS FLEET LAST YEAR FOLLOWING THE MISHANDLING OF A COLLISION WITH A PEDESTRIAN. AND FORGING AHEAD WITH THE REVISED PLANS FOR AN IPO OF A CHIPMAKER THAT COULD RAISE 500 MILLION DOLLARS ACCORDING TO BLOOMBERG SOURCES. BANE IS SAID TO BE WORKING WITH

INVESTMENT BANKS FOR THE IPO KICKOFF IN THE COMING WEEKS. CAROLINE: COMING UP, WE DEBATE THE AI REGULATION DEAL BEING DEBATED IN CALIFORNIA, FACING BACKLASH FROM NONE OTHER THAN ITS OWN ELITE IN SILICON VALLEY. FROM SAN FRANCISCO AND NEW YORK, THIS IS BLOOMBERG SURVEILLANCE. -- BLOOMBERG TECHNOLOGY. >>>> I WILL MAKE SURE THAT WE LEAVE THE WORLD -- LEAD THE WORLD INTO THE FUTURE IN SPACE, ARTIFICIAL INTELLIGENCE, THAT AMERICA AND NOT CHINA WINS THE COMPETITION FOR THE 21ST CENTURY AND THAT WE STRENGTHEN AND NOT ABDICATE OUR GLOBAL LEADERSHIP. CAROLINE: VICE PRESIDENT HARRIS, EXCEPTING THE DEMOCRATIC NOMINATION FOR PRESIDENT LAST NIGHT.

ANNMARIE HORDERN IS ON THE GROUND IN CHICAGO. IT WAS AN IMPORTANT SPEECH. I HAVE A FEELING YOU MIGHT BE A LITTLE TIRED AFTER YESTERDAY. AND MARIE ABSOLUTELY, VERY IMPORTANT SPEECH -- ANNMARIE: ABSOLUTELY. VERY IMPORTANT SPEECH, HISTORIC SPEECH, AS SHE ACCEPTS THE NOMINATION TO BE THE TOP OF THE TICKET. WE HAVE TO SAY, CANNOT OVERSTATE THIS, WHAT A 180. STANDING HERE TODAY, FROM A MONTH AGO. A TREMENDOUS AMOUNT OF ENERGY HAS BEEN INFUSED INTO THIS CAMPAIGN AND NOW COMES POTENTIALLY THE HARD PART. WE HEARD FROM THE VICE PRESIDENT LAST NIGHT, TALKING BROADLY ABOUT ISSUES. THE ECONOMY, FOREIGN POLICY, RELIEVED CHERRY PICKING THE

PARTS OF THE BIDEN PLAN SHE WAS A PART OF. NOW SHE WILL POTENTIALLY HAVE TO GO INTO DETAILS ON THOSE POLICIES. AT BOTH RESEARCH, THEY ARE SAYING THAT THE CAMPAIGN IS USING STRATEGIC AMBIGUITY. WHAT THEY WANT TO BASICALLY DO IS CONNECT WITH SWING STATE VOTERS USING POPULIST RHETORIC WITHOUT GOING INTO THE DETAILS OF THOSE POLICY PROPOSALS. THEY HAVE 74 DAYS NOW TO GET THE JOB DONE. WILL THEY CONTINUE TO TRY TO POTENTIALLY PUT A GAP BETWEEN THEM IN THE ACTUAL DETAILS OF THE POLICY AND TALK BROADLY ABOUT THE ISSUES? THAT IS GOING TO BECOME MUCH HARDER COME SEPTEMBER 10, WHEN YOU HAVE HARRIS FACING OFF DONALD TRUMP IN THEIR FIRST DEBATE. ED:

ANNMARIE, THANK YOU VERY MUCH. FROM CHICAGO. A STATE BILL PROPOSAL IN CALIFORNIA TO PLACE SAFETY REQUIREMENTS ON AA COMPANIES, LIKE A FAILSAFE SHUTDOWN OF SYSTEMS OR COMPLIANCE DISCLOSURES. THE STARTUP JOINING A LONG LIST OF ACADEMIC, TECH INDUSTRY LEADERS, AND POLITICIANS ARGUING THAT THE MEASURE COULD STIFLE INNOVATION. THE AUTHOR OF THE BILL, SCOTT WIENER, JOINS US NOW IN SAN FRANCISCO ALONG WITH SHAREEN, WHO BROKE THE STORY THAT OPENAI HAD OUTLINED THEIR CONCERNS. OPENAI IS BASED IN SAN FRANCISCO, CALIFORNIA. PROBABLY THE LEADING AI NAME OR STARTUP IN THE WORLD. THEY THINK THAT FEDERAL LEGISLATION IS A BETTER PATH.

THAN STATE. YOUR REACTION TO THAT? SCOTT: I WILL START BY SAYING THAT ANOTHER AI LAB IN SAN FRANCISCO, ANTHROPIC, WITH THE LARGEST MODEL IN THE WORLD, ISSUED A LETTER YESTERDAY STATING THAT ON BALANCE, SB 1047 IS GOOD AND IT IS IMPLEMENTABLE AND CONGRESS IS UNLIKELY TO ACT. ED: TO BE CLEAR, YOU'RE TALKING ABOUT ANTHROPIC? SCOTT: YES, SAYING THE BILL IS GOOD AND THAT CONGRESS IS UNLIKELY TO ACT. I HAVE A LOT OF RESPECT FOR OPENAI, BUT TO BE CLEAR, THAT LETTER DOES NOT ACTUALLY CRITICIZE ANY PORTION OF THE BILL, DOESN'T CRITICIZE ANYTHING IN THE BILL. IT JUST SAYS THAT THIS SHOULD BE HANDLED AT THE FEDERAL LEVEL. TO BE CLEAR, I AGREE THAT IT SHOULD BE HANDLED AT THE

FEDERAL LEVEL THAT HERE IT IS, 2024 AND CONGRESS HAS STILL NOT PASSED A DATA PRIVACY LAW, DONE NOTHING AROUND SOCIAL MEDIA OTHER THAN BANNING TIKTOK, HAS NOT CODIFIED NET NEUTRALITY. CONGRESS HAS A VERY POOR RECORD IN TERMS OF REGULATING THE TECH SECTOR AND I DON’T SEE THAT CHANGING. SO, CALIFORNIA SHOULD LEAD. >> SHOULD WE TRUST -- THERE'S BEEN A LONG LINE OF ACADEMICS CRITICIZING THE BILL. SHOULD WE BE TRUSTING THE VOICES AGAINST THAT? ARE THERE OTHER MOTIVATIONS AT PLAY HERE? SCOTT: TO BE CLEAR, THERE ARE FOLKS CRITICIZING THE BILL IN GOOD FAITH, PEOPLE I RESPECT A LOT. OTHERS ARE MAKING IN, EXTREME, EXAGGERATED ATTACKS ON THE BILL. THIS IS A LIGHT TOUCH SMART

PIECE OF REGULATION AROUND SAFETY, REGULATING ONLY THE LARGEST MODELS. TO ASK THESE DEVELOPERS TO PERFORM SAFETY TESTING SO THAT WE CAN REDUCE THE RISK OF THINGS LIKE SHUTTING DOWN THE ELECTRIC GRID OR ATTACKING THE BANKING SYSTEM OR CREATING A CHEMICAL OR BIOLOGICAL WEAPON. SOME OF THE LEADING MINDS IN AI, LIKE JEFF HINTON, FORMERLY OF GOOGLE, LAWRENCE LESSIG AND STUART RUSSELL, THEY ALL SUPPORT THE BILL. IN ADDITION TO A SIGNIFICANT LIST OF STARTUPS SAYING THIS IS A GOOD IDEA. SO YES, THERE ARE SOME PEOPLE IN GOOD FAITH WHO HAVE CRITICISMS OF THE BILL AND WE HAVE BEEN WORKING WITH THEM TO GET THEIR FEEDBACK. OTHERS ARE JUST OPPOSED TO ANY AND ALL REGULATION OF TECHNOLOGY AND I JUST DON'T

AGREE WITH THAT. >> WHISTLEBLOWER PROTECTION HAS RECEIVED LESS ATTENTION. TODAY, TWO FORMER AI EMPLOYEES CAME OUT IN SUPPORT OF THE BILL AND ADVOCATED FOR WHISTLEBLOWER PROTECTIONS. WHY IS IT IMPORTANT FOR THE PEOPLE WHO WORK FOR THESE AI COMPANIES TO BE ABLE TO SPEAK OUT ON SAFETY? SCOTT: TO BE CLEAR, I'M A HUGE FAN OF AI. I THINK IT HAS SO MUCH POTENTIAL TO MAKE THE WORLD A BETTER PLACE, SOLVE WHAT WE HAVE VIEWED AS UNSOLVABLE PROBLEMS AROUND CERTAIN HEALTH CONDITIONS OR CLIMATE CHANGE. SO, I'M A FAN. BUT AS WITH ANY EXTREMELY POWERFUL TECHNOLOGY, THERE ARE RISKS, AND WE SHOULD TRY TO GET AHEAD OF THOSE RISKS. AND WE KNOW HOW TO DO THAT. NOT TO ELIMINATE THE RISK, BUT

TO REDUCE IT, SOMETHING CATASTROPHIC HAPPENING. WHEN YOU HAVE PEOPLE WORKING IN AI LAB'S BUILDING SOME OF THE MOST POWERFUL TECHNOLOGY IN THE HISTORY OF THE WORLD, THEY SHOULD BE ABLE TO SPEAK UP AND HAVE LEGAL PROTECTIONS TO SPEAK UP IF THEY SEE SOMETHING INAPPROPRIATE OR DANGEROUS HAPPENING. CAROLINE: SENATOR, HAVING DONE THIS AMOUNT OF RESEARCH, ARE YOU YOURSELF NERVOUS OR EVEN SCARED AROUND ARTIFICIAL INTELLIGENCE? SCOTT: I WOULDN'T SAY SCARED. I WOULD SAY THAT AI IS -- HAS THE POTENTIAL TO HELP SOME OF THE BIGGEST PROBLEMS FACING US BUT IT WOULD BE IRRESPONSIBLE TO ALLOW IT TO SPIRAL WITHOUT IN ANY WAY THINKING ABOUT THE SAFETY ISSUES. THAT IS ALL THE BILL DOES.

IT REQUIRES SAFETY PROTOCOLS AND EVALUATIONS, THE ABILITY TO SHUT DOWN MODELS IN YOUR POSSESSION. THESE ARE REASONABLE THINGS AND I WANT TO BE CLEAR, EVERY SINGLE LARGE AI LAB, INCLUDING OPENAI, GOOGLE, THEY HAVE ALREADY COMMITTED REPEATEDLY AND PUBLICLY TO PERFORM THE SAFETY EVALUATIONS. WE ARE JUST ASKING THEM TO DO IT IN AN OBLIGATORY WAY. IT SHOULD CAUSE US ALL CONCERNED WHEN YOU HAVE AN INDUSTRY THAT SAYS WE PROMISE WE WILL DO THIS, BUT DON'T REQUIRE US TO DO IT, JUST TRUST US. VOLUNTARY COMMITMENTS IN THE INDUSTRY HAVE A HISTORY OF GOING AWRY. CAROLINE: YOU HAVE LISTENED HARD TO THESE CONCERNS AND MADE CHANGES. WHAT SEEMS TO BE THIS ONGOING NARRATIVE IS THE OPEN SOURCE

NARRATIVE AND THE WAY IN WHICH PERHAPS IT MIGHT SUDDENLY BECOME LESS AVAILABLE, LESS INNOVATIVE. HOW CAN YOU CHANGE TO ENABLE SMALLER COMPANIES AND OPEN SOURCE TO THRIVE UNDER THIS REGULATION? SCOTT: I'M A HUGE FAN OF OPEN SOURCE IN THE AI SPACE. STARTUPS ARE NOT COVERED, ONLY LABS SPENDING MORE THAN 100 MILLION DOLLARS TO TRAIN THE MODELS. OPEN SOURCE AI PLAYS AN INCREDIBLY IMPORTANT ROLE. WE HAVE WORKED INTENSIVELY WITH GITHUB AND OTHER ADVOCATES TO MAKE SIGNIFICANT CHANGES TO THE BILL TO MAKE VERY CLEAR THAT THIS BILL IS NOT ABOUT BEING NEGATIVE WITH OPEN SOURCE. YES, A LOT OF PEOPLE RELY ON MAMA, AND I KNOW I SOUND LIKE A BROKEN RECORD BUT I WILL SAY IT AGAIN, META-IS ONE OF THE LABS

THAT HAS REPEATEDLY COMMITTED TO PERFORM SAFETY EVALUATIONS. SO, THAT IS WHAT WE HAVE PUT INTO THE BILL. SO, WHEN YOU MAKE THAT COMMITMENT, AND META MADE THE COMMITMENT CLEARLY BELIEVING IT WOULDN'T UNDERMINE THEIR ABILITY TO OPEN SOURCE. ED: WHEN WE POSTED THAT YOU WERE COMING OUT OF THE PROGRAM, WE INEVITABLY GOT A NUMBER OF QUESTIONS FROM PEOPLE ALL OVER THE STATE. ONE OF THEM WAS FROM A PROFESSOR, PREVIOUSLY AN EMPLOYEE AT NVIDIA. SHE WANTS TO FOCUS ON ACADEMIA, SAYING IN THE QUESTION TO YOU THAT YOU'RE PRETTY FIXATED ON BILLIONAIRES OPPOSING THE BILL AND HOW MUCH YOU TAKE INTO ACCOUNT THE INPUT OF ACADEMIA, NOTING THAT SHE IS NOT ALONE IN THAT. A NUMBER OF ACADEMICS CAME

FORWARD WHEN THEY SAID YOU JOINED THE PROGRAM. SCOTT: I SAW THAT TWEET AND I HAVE NO IDEA WHAT SHE'S TALKING ABOUT. AT NO POINT DID I SAY ONLY BILLIONAIRES ARE CONCERNED ABOUT THE BILL. I ALSO WANT TO SAY THAT THERE ARE LARGE VENTURE CAPITAL FIRMS, PARTICULARLY ANDREESSEN HOROWITZ, THAT HAVE TAKEN THE LEAD IN SPREADING AT TIMES, AND THEY HAVE DONE THIS, MISINFORMATION ABOUT THE BILL. THAT SAID, WE KNOW THERE ARE ACADEMICS WHO HAVE EXPRESSED CONCERN ABOUT THE OPEN SOURCE ASPECT. SO, I MET WITH VARIOUS OF THOSE ACADEMICS AND WE MADE SIGNIFICANT AMENDMENTS TO THE BILL TO ADDRESS CONCERNS FROM THE OPEN SOURCE COMMUNITY. AND THERE ARE SIGNIFICANT ACADEMICS, LIKE STUART RUSSELL WHO SUPPORT THE BILL.

>> ONE OF YOUR MAIN DEFENSES HAS BEEN THAT THERE ARE ALREADY LAWS, TORT LAW, YOU SAID, THEY COULD FIND COMPANIES LIABLE OF MASS HARM, AND YOU ALSO SAID THERE IS THIS VOLUNTARY COMMITMENT. IF THOSE ALREADY EXIST, COMPANIES, THEY CAN ALREADY GET IN TROUBLE, WHY DO WE NEED THIS LAW? SCOTT: THAT'S IMPORTANT BECAUSE ONE OF THE INACCURATE REPRESENTATIONS AROUND THE BILL IMPLIES OR STATES THAT THE BILL CREATES LIABILITY FOR AI DEVELOPERS WHEN THEY HAD NO LIABILITY BEFORE. CURRENTLY TODAY, AN AI DEVELOPER, IF YOU OPEN SOURCE IN AND SOMEONE USES THAT TO SHUT DOWN THE ELECTRIC GRID, YOU CAN BE SUED TODAY. SO, OUR BILL ALLOWS THE ATTORNEY GENERAL TO GET INVOLVED. WHAT IT DOES IS IT CREATES A

SPECIFIC OBLIGATION NOT TO CREATE LIABILITY, BUT TO TELL THE DEVELOPERS THAT THIS IS WHAT WE EXPECT YOU TO DO. TEST THE MODEL, HAVE A SAFETY PROTOCOL, BE ABLE TO SHUT DOWN THE MODEL. IN A SPECIFIC WAY WE PROVIDED THE ATTORNEY GENERAL WITH A NARROW ABILITY TO INTERVENE BEFORE HARM OCCURS TO AVOID CATASTROPHIC HARM IN EXTREME CIRCUMSTANCES. THIS BILL COMPLEMENTS EXISTING LAW. ED: IT'S A CALIFORNIA STATE BILL AND ULTIMATELY THIS MIGHT COME DOWN TO GOVERNOR NEWSOM. YOUR EXPECTATION ON WHAT THE GOVERNOR MAY OR MAY NOT DO IN A VETO? SCOTT: OR A SIGNATURE. ED: OR A SIGNATURE. SCOTT: THE GOVERNOR HAS NOT STATED A POSITION ON THE BILL AND I HAVE LEARNED THE HARD WAY OVER YEARS

NOT TO ASSUME WHETHER THE GOVERNOR WILL SIGN OR VETO. HE AND GOVERNOR BROWN HAVE SURPRISED ME IN BOTH DIRECTIONS IN THE PAST. THE GOVERNOR IS A STRONG SUPPORTER OF TECH INNOVATION, AS MI. HE'S ALSO MADE IT CLEAR THAT WHEN IT COMES TO AI, REGULATION IS APPROPRIATE AND WE HAVE TO STRIKE THE RIGHT BALANCE. I HOPE THAT THE GOVERNOR WILL HAVE AN OPEN MIND AND I BELIEVE THAT HE WILL HAVE AN OPEN MIND ABOUT THE BILL AND WE WILL CONTINUE TO MAKE THE CASE. THIS BILL HAS BEEN GETTING VERY BROAD SUPPORT, PARTICULARLY AMONG DEMOCRATS IN THE LEGISLATURE. ED: YOUR CONSTITUENCY IS VERY BIG, GIVEN SAN FRANCISCO. WHO ELSE ARE YOU MEETING WITH TO TRY TO CONVINCE? WHO HAVE YOU NOT MET WITH? SCOTT:

WE HAVE MET WITH ANYONE WHO WILL MEET WITH US. WE HAVE MET WITH, YOU KNOW, WITH FOLKS FROM STARTUPS, WITH LARGE TECH COMPANIES, FOLKS FROM ACADEMIA. JUST FRONT LINE TECH WORKERS. BY THE WAY, WHEN YOU PULL THE BILL, IT PULLS OFF THE CHARTS WITH THE PUBLIC. HIGHER AMONG TECH WORKERS. IT WAS FRONTLINE GRASSROOTS TECH WORKERS CAME TO ME ORIGINALLY WITH SOME OF THESE IDEAS, THESE ARE FOLKS WORKING IN THE AI SPACE THAT HAD CONCERNS ABOUT SAFETY. ED: THANK YOU BOTH FOR BEING HERE IN STUDIO IN SAN FRANCISCO. CAROLINE? CAROLINE: GREAT CONVERSATION. MARKETS BRIEFLY, WE ARE PUSHING HIGHER, A POWER PUSH IS GOING ON. HE SAID THE TIME IS RIPE FOR A

CHANGE IN POLICY. RATES GOING LOWER. WE ARE UP AND UP FOR THE WEEK AS WELL, 10-YEAR YIELD'S ARE DOWN. BORROWING COSTS FALLING, CRYPTO AT THE MOMENT AT 1.6 PERCENT. MOVING TO THE INDIVIDUAL MOVERS, ALL EYES ARE ON NVIDIA AUGUST 8. IT'S A MACRO MOVE THAT IS A MICRO-SET OF EARNINGS FROM NVIDIA. ACROSS THE NASDAQ 100, THE BEST PERFORMER FROM A PERCENTAGE POINT OF VIEW IS EARNINGS. SAYING IN THE LONGER TERM WE WILL NOT BE OPTIMISTIC. ED: COMING UP, AMAZON WEB SERVICES IS ANNOUNCING A JOINT PLATFORM THEY SAY WILL HELP SMALL DEVELOPERS SCALE RESPONSIBLE AI. THAT'S NEXT. THIS IS BLOOMBERG TECHNOLOGY. CHECK OUT THE BLOOMBERG TECHNOLOGY PODCAST ON APPLE,

TECHNOLOGY -- ON APPLE AND I HEART. THIS IS BLOOMBERG. CAROLINE: AMAZON WEB SERVICES AND ACCENTURE ANNOUNCED A PARTNERSHIP THEY SAID WOULD HELP AI DEVELOPERS SCALE RESPONSIBLY. YOU ARE BASICALLY PUTTING INTO PRACTICE AHEAD OF REGULATION IN MANY CASES HOW COMPANIES CAN NAVIGATE. WE JUST HAD A CONVERSATION ABOUT SP 10 47. HOW DO YOU GUIDE GROWTH WITHOUT LAWS IN PLACE? >> THANK YOU FOR HAVING ME. LET ME START BY SAYING THAT. AS WELL AS I WANTED TO START OFF THAT BY SAYING RESPONSIBLE AI IS AN IMPERATIVE. WHEN YOU TALK ABOUT THE OPPORTUNITY TO SCALE THE USE OF AI AND ORGANIZATIONS THINKING ABOUT THE WAYS THEY WANT TO BUILD LEVERAGING AI, WELL THIS

PLATFORM, ACCENTURE, THE RESPONSIBLE AI PLATFORM POWERED BY AWS IS THE MEANS FOR THEM TO DO IT. WHEN WE THINK ABOUT RESPONSIBLE AI, WE THINK ABOUT THAT AS THE PRACTICE OF DESIGNING AND DEPLOYING SAFELY AND BEING ABLE TO MITIGATE THE RISK AND UNMITIGATED IMPACT. THIS PLATFORM IS PROVIDING THEM THE VISIBILITY AND CONTROL FOR WAYS TO ASSESS THAT RISK, MITIGATE AND PREPARE STRATEGIES AND HAVE THAT SENSIBILITY ACROSS THE ORGANIZATION SO THAT THEY CAN ENSURE THEY HAVE THE RIGHT KINDS OF GUARDRAILS AND SAFEGUARDS IN THE SYSTEMS IN THE TECHNOLOGY THAT THEY BUILD. ED: DOES AWS HAVE A POSITION ON THE CALIFORNIA BILL? DIYA: I CAN'T SPEAK TO THAT SPECIFIC BILL BUT I CAN SAY WE ARE COMMITTED TO CONTINUING TO

COLLABORATE WITH POLICYMAKERS AND THE INDUSTRY, RESEARCHERS, ACADEMIA, AND THE COMMUNITY TO ADVANCE THE RESPONSIBLE USE OF AI. AS ONE OF THE WORLD'S LEADING DEVELOPERS AND EMPLOYERS OF THOSE TOOLS AND SERVICES, AMAZON SUPPORTS A SAFE, RESPONSIBLE, EFFECTIVE DEVELOPMENT OF THAT TECHNOLOGY AND IS DEDICATED TO DRIVING INNOVATION ON BEHALF OF CUSTOMERS, GIVING THEM THE CAPABILITY TO DO SO AS WELL. CAROLINE: YESTERDAY WE HEARD HARRIS ACCEPTING THE NOMINATION FOR PRESIDENT, SAYING SHE WANTS TO SUPPORT AI IN THE UNITED STATES. HOW DO YOU SEE YOUR CLIENTS OR THE CUSTOMERS THAT YOU SERVE WORRYING -- OR NOT -- ABOUT GROWTH IN AI? DIYA: I'M NOT SURE THAT I WOULD CALL IT A WORRY.

OVER THE COURSE OF THE LAST COUPLE OF YEARS, WE HAVE SEEN SOME GREAT EXCITEMENT IN THE TECHNOLOGY SPACE, IN PARTICULAR WITH GENERATIVE AI, AND ARE FIELDING MORE REQUESTS THAN WE HAVE IN THE PAST ABOUT WAYS IN WHICH ORGANIZATIONS CAN DO THAT RESPONSIBLY. I BELIEVE WE HAVE MOMENTUM. JUST AS I MENTIONED AT THE BEGINNING THAT I BELIEVE THAT RESPONSIBLE AI IS A BUSINESS IMPERATIVE, BY THE SHEER NUMBER OF THE INCREASE IN INTEREST, CONVERSATION, DISCOURSE AROUND RESPONSIBLE AI, SAYING THAT ORGANIZATIONS THINKING ABOUT ADOPTING AI ARE THINKING ABOUT THE WAYS IN WHICH THEY CAN DO THAT WITH SAFEGUARDS AND GUARDRAILS TO ENSURE THAT THE DEVELOPMENT DELIVERS SAFETY SYSTEMS. ED: THANK YOU VERY MUCH. A LOT MORE TO COME ON

BLOOMBERG TECHNOLOGY. THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: AFTER DAYS OF SEARCHING THROUGH THE RATCHET -- WRECKAGE OF A SUNKEN YACHT OFF THE COAST OF SICILY, AUTHORITIES HAVE CONFIRMED THE DEATH OF ITALIAN TECH ENTREPRENEUR MIKE LYNCH. MANY ARE TRYING TO GRAPPLE WITH WHAT HE MEANT FOR A TECHNOLOGY INDUSTRY IN WHICH AT ONE POINT HE WAS DEEMED THE BILL GATES OF BRITAIN. TELL US ABOUT HIS IMPACT. >> THAT'S RIGHT, AND BEFORE HE PASSED HE WAS HAILED AS ONE OF THE MOST SUCCESSFUL TECH ENTREPRENEURS THE U.K. HAD EVER SEEN. HE FOUNDED AND RAN ONE OF THE LARGEST BRITISH TECHNOLOGY COMPANIES TO EVER HAVE BEEN

TAKEN OVER IN AN M&A DEAL, PROPULSING HIS NAME AND STATUS NOT JUST IN THE U.K., BUT ACROSS EUROPE MORE BROADLY. IT WAS QUITE THE BLOW TO HIS REPUTATION AND HIS EGO WHEN HP, WHICH BOUGHT HIS COMPANY, TURNED AROUND AND ENDED UP ACCUSING HIM OF INFLATING THE SUCCESS OF THE BUSINESS AFTER TAKING IT OVER. HE HAD SPENT YEARS BEFORE HIS PASSING WORKING TO CLEAR HIS NAME AND TO BE ACQUITTED OF CHARGES ON THAT FRONT. CAROLINE: ONLY 30 SECONDS. HE MADE AN IMPACT IN TERMS OF THE CAMBRIDGE CLUSTER? >> HE DID, EXTREMELY INFLUENTIAL. IN THE AFTERMATH OF SELLING HIS COMPANY, HE ENDED UP INVESTING A LOT OF THAT MONEY THAT HE MADE AS A PART OF THAT DEAL INTO A TON OF OTHER TECHNOLOGY STARTUPS.

A LOT OF THEM ARE NOW RUN BY FORMER AUTONOMY EXECUTIVES. IT REALLY WAS AN OUTPOURING OF CONDOLENCES AND AN OUTPOURING OF GRIEF FROM THOSE FORMER AUTONOMY EXECUTIVES. CAROLINE: THANK YOU. MIKE LYNCH, ACADEMIC, INVESTOR,

Tech Gains Ahead of Nvidia Results, OpenAI Regulation | Bloomberg Technology

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