Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:18):
Of course, the big news this week as we sit
here in the studio. The US and Israel have been
engaging in coordinated attacks against Iran, and Iran, for its part,
has been retaliating with attacks across the region.
Speaker 3 (00:31):
We're talking about a conflict that is very quickly spilling
over into the rest of the Middle East. According to
Iran's Red Crescent, there have been a huge number of casualties,
including nearly two hundred children under the age of ten
killed one thousand people. Here is Defense Secretary Pete Hegsath
speaking to the press on Wednesday, March fourth.
Speaker 4 (00:51):
Iran cannot outlast us. We're going to ensure through violence
of action and our offensive capabilities and our defensive capabilities.
As I said that, we at the tone and the
tempo of this fight, and that's why we don't talk
about We can say four weeks, but it could be six,
it could be eight, it could be three. Ultimately, we
set the pace in the tempo. The enemy is off
(01:12):
balance and we're going to keep them off balance.
Speaker 2 (01:15):
The results of these attacks have been absolutely massive.
Speaker 5 (01:18):
Across the globe.
Speaker 2 (01:19):
Oil and gas prices if skyrocketed, travel out of the
Middle East has essentially been halted, and countries all over
the region have been holding their breath to see basically
how this conflict is going to roll out and affect
their economies and their daily lives.
Speaker 3 (01:35):
Yeah, and there are two pieces of this ongoing war
that we here at everybody's business haven't fallen closely. The
first is a resource we all need to survive, and
the second is a technology that our society is increasingly
relying on.
Speaker 6 (01:52):
Oil is very important and fundamental, But did you think
about the well being of the one hundred million people
that live on the east side of the Persian Gulf
Water is what really makes or break it.
Speaker 7 (02:04):
There was a ton of people deleting chat GPT, So
the consumer public says, we like it when you say
we don't want to surveil the general public in this
way or decide where missiles go.
Speaker 2 (02:18):
That was Javier Blast and Amanda Mule talking about drinking
water and AI two aspects that will make or break
further escalations between the US, Israel, and Iran.
Speaker 5 (02:33):
From Bloomberg Business Week. This is everybody's business.
Speaker 2 (02:35):
I'm Max Chafkin and I'm Stacey manack Smith. Stay with
us because At the end of the show, we have
a special guest joining us to share their underrated story
for the week and an essential weekend listen.
Speaker 3 (02:48):
But first, Stacy, let's take a look at the headlines. Obviously,
we have the war in Iran, which we will get to,
but also it is an electioneer. It's a midterm season.
As of Tuesday, the midterms have begun. We had our
first primary Texas and North Carolina, and we got some results.
Speaker 2 (03:06):
Yes, I've been hearing you making phone calls and reporting
about this, so walk us through what is going on.
Speaker 3 (03:12):
Okay, So, in terms of what happened on Tuesday, the
big news was out of Texas, and I just want
to say, first of all, long election season, it is
very easy to get wrapped up into any of this stuff.
Speaker 5 (03:24):
But the bottom line is.
Speaker 3 (03:26):
Number one, big turnout numbers for the Democrats. So I've
been saying this on the podcast. There's a lot of
Democratic enthusiasm. You know, Democrats really don't like Trump. Also,
as we've talked about pretty much continuously, a lot of
Trump's sort of most popular issues have begun to backfire,
particularly on the economy. But also, you know Iran, like
(03:47):
this conflict is not popular. So in Texas, you know,
red state, you were seeing Democratic turnout ahead of Republican turnout.
On the on the Democratic side, James tallerco beat Jasmine
by about five percent.
Speaker 5 (04:02):
She's constantly sort.
Speaker 3 (04:03):
Of trolling, pushing the envelope, but her politics are not
that far left.
Speaker 5 (04:08):
Talla Rico is the opposite.
Speaker 3 (04:10):
He's like, he reads as very different, as sort of
more like a uniter or something like that, but his
politics are actually further probably a little bit further to
the left of Crockett.
Speaker 5 (04:20):
But Democrats in.
Speaker 3 (04:21):
General, I think are probably more optimistic in Texas than
they've been a long time because they're running against a
Republican field that is divided. You had John Corden, the
current center running against Ken Paxton, who is a very
controversial figure to say the least.
Speaker 5 (04:36):
They're going to a runoff. That should be.
Speaker 2 (04:38):
Interesting, Yeah, sounds like it.
Speaker 3 (04:40):
The other thing worth keeping an eye on are voting issues.
So in Texas there was this thing in Dallas County,
of course, one of the population center is also really
important center for Democrats, where a bunch of voters basically
showed up at the wrong precinct because there had been
a a change of rules with the state Republicans and
(05:03):
people got confused. It went all the way to the
Supreme Court, and you have basically an ongoing fight about
people's votes being counted. That fight looks like it will
not decide the Democratic primary. It looks like it's getting
ironed out. But I do think it's kind of a
preview of what.
Speaker 5 (05:22):
Is to come.
Speaker 3 (05:23):
The Republicans are including Donald Trump and Elon Musk, are
pushing this thing called the Save Act. It is a
voting like basically a voter ID law. It would require
voters to prove their citizenship when they register and have
photo ID when they vote. Republicans have traditionally pushed these
things because I think the view, well, there are two reasons.
(05:46):
One is they argue that, you know, we have to
stop non citizens, we have to stop voter fraud. But
there is a more cynical explanation, which has long been
that they are trying to suppress democratic turnout because historically
Democrats draw from more like working class people who don't
necessarily have their birth certificates, driver's licenses, et cetera handy,
(06:07):
and maybe also are not the most like regular voters.
So you have like high motivated voters, they've got their
voter card, they know their precinct, they know everything. They
show up no matter what the rules are. And then
you have this other coarter people who are like, ah,
I'll vote, but you know, I'm not gonna like go
way out of my way. And the thinking has been
that if you throw up a bunch of barriers, maybe
(06:30):
that affects the turnout. Now, one thing that's fascinating about
the Save Act is the voter makeup of the Republican
Party is shifting, and it is not clear that if
this thing passed, which it does not it got through
the House, I think it's chances in the Senate are unlikely.
Speaker 5 (06:44):
Despite what Donald Trump.
Speaker 3 (06:45):
Is doing, there is some chance it would hurt Republicans
more than Democrats because under Donald Trump, there is a
the Republicans have a higher percentage of you know, basically
people who do not vote every time. The kinds of
voters that traditionally voted Democrat, some of them have moved
over to Donald Trump. So it's kind of unclear how
this would play out, but I think it is absolutely
(07:07):
guaranteed that this will be an issue. We also have,
you know, in Kansas, the state is invalidating trans driver's licenses,
which could also impact voting. So there's just like a lot,
there's a lot of stuff here. It's going to be
a whole thing.
Speaker 2 (07:23):
Well, we'll have to keep our eyes on it. About
the war in Iran, there is a lot of talk
about oil being completely central to how this conflict unfolds
and completely central to the impact this conflict is going
to have on all of us. But recently opinion columnist Bloomberg'
(07:44):
Javier Blass, who is the author of the World for Sale, Money, Power,
and the Traders who Barter the Earth's resources, makes the
case that there is actually a different commodity. We should
be keeping our eye on drinking water.
Speaker 3 (07:58):
Well, right, and not only drinking water, but kind of
drinking water as a frame to understand just how significant
this conflict could be for the entire region and maybe
even the entire world. We have Javier piping in from
London to talk about this awesome, really fascinating take.
Speaker 5 (08:15):
Javier, Welcome to everybody's business.
Speaker 6 (08:18):
Thank you for having me.
Speaker 3 (08:19):
All right, so just to start, you want to just
take us through the argument, like why is water more
important than oil when you're looking at this conflict because
like if you're reading the news on a day to
day basis, it is entirely about straight up horn moves,
oil price, global markets, and so on.
Speaker 5 (08:37):
But give us your perspective here.
Speaker 6 (08:39):
Look, oil is very important and it's absolutely fundamental to
the well being of the global economy. But did you
think about the well being of the one hundred million
people that live on the eastern side of the person Golf.
I'm thinking about Kubeit, Saudi Arabia, Qatar, the United Bahrain.
For them, water is what really makes or break it,
(09:02):
and all of those countries, the majority of the water
consumption doesn't come from aquifers or rivers. It comes from
the salinization. It's seawater, It goes through different physical processes.
They are very energy intensive. But if anything those countries
have is energy, cheap gas and cheap oil, and they
get water, drinking water, possable water. Without it, there is
(09:27):
no way to sustain live. Those countries don't expore oil
for a few days, a couple of weeks, say four weeks,
they can make it. They run out of water for
more than two or three days, they cannot make it.
And those water the salinization plants, they are spread all
around the Persian goals, about four hundred and fifty of them,
and they are absolutely key to destroy them. You have
(09:50):
a massive geopolitical problem that potentially could change I think
that it will change the conflict. I think that everyone
is looking at at a liquid in this world, and
I think that they're looking at one that makes a
lot of sense. Oil and I think that is very important.
Don't get me wrong, I spend my day writing about oil,
but I think that no attention is paide out water,
(10:10):
and I think that that could be critical.
Speaker 2 (10:12):
There's been a lot of bombing of different countries around
the Gulf and different kinds of buildings, and you point
out one very important desalinization plant that feeds Saudi Arabia
and I think is responsible for something like ninety percent
of the country's drinking water. This does seem like a
very like a major point of vulnerability that Iran likely
(10:35):
knows about.
Speaker 6 (10:36):
So Iran has already bombed two power plants that they
are associated with the salinization plants. So the typical desalinization
plan in the Middle East will have one power plant
that it will generate electricity, and then you have the
desalination plant Iran has already attacked two of those power
plants that they are literally attached wall against wall. The
(10:58):
plan that you are talking about is in the Persian
Gulf coast of Saudi Arabia. It is called the Jubail
the Salinization Plan, and it supplies around ninety percent of
the water needs of REACT, the Saudi capital. The water
goes from the coast five hundred kilometers app into REACT
(11:18):
via a very complex pipeline system. And according we know
some of these details because there was a memo, a
diplomatic cable from the US embassy in REACT that got
disclosed on that massive release of documents, that the massive
leak of documents that was WikiLeaks, and in two thousand
(11:38):
and eight, the memo from the US embassy says an
I quote, REACT will have to evacuate within a week
if the plan, his pipelines or associated power infrastructure were
seriously damaged or destroyed. The current structure of the Saudi
government could not exist without the Jubaile Salinisasian plan. That's
(12:01):
not a conspiracy theory. That's not someone writing a blog
on the Internet. That is a cable from the US
Embassy in Saudi Arabia in two thousand and eight. That
is how central the Salinisasian plans are for not only
Saudi Arabia, have had other countries in the region. And
my aim was to highlight that we are reaching a
(12:25):
point in the war where we need to start thinking
about the unthinkable. And this was one of those unthinkables
that I am trying to put into the minds of everyone.
Speaker 3 (12:36):
Says and I what was it like nine months ago
when Israel Bombaran in June? Had John author Is our
colleague gone, and he raised what sounded like the worst
case scenario, the worst case scenario at that point, because
of course the US had not really entered the war.
Trump was threatening regime change but not doing the regime change.
(12:58):
He was just truth so about it. But the worst
case scenario is laid out by Jean was like the
strait of horror moves is closed. You have Iran because
it's cornered, lashing out at its neighbors, shooting missiles at Dubai,
at basically US military bases in the region, trying to
create a sort of regional conflict rather than this than
(13:19):
one that's focused in Iran.
Speaker 5 (13:21):
And of course like that's what's happening.
Speaker 3 (13:22):
That's now that worst case scenario has come, and you're
laying out this even worst case scenario where you go
from scattered bombings to real attack on almost like trying
to create civilian casualties. And there are even worse outcomes
that you could contemplate, right, you could contemplate a civil
war in Iran and a massive refugee crisis, and on
(13:43):
and on. What do you make of the strategy here, Like,
insofar as there is a strategy, what do you see
as the strategy and are they achieving it?
Speaker 6 (13:53):
I think that these they have a spend on the
run up to this talking to a lot of word
espers and Middle East and esper on a strategy, and
I think that everyone was expecting something similar to this.
I mean, to my surprise is that the White House
is surprise that Iran is playing the war like this.
I mean, it makes sense. That's the only way that
(14:14):
it can survive is it cannot really prevail on a
military base. His air force has no match whatsoever against
the American air force. Is at some point we are
beginning we're seeing Iran fighting the United States, which is
deploying the weapons of twenty twenty five, twenty twenty six
(14:34):
against planes that they were the science in the sixties.
It's just no much whatsoever. So they need to basically
increase economic costs, go after soft targets, et cetera. I
don't think that we are even remotely close to world
cases scenario. My worldt cases scenario is really somber. I'm
a kind of half class, empty kind of guy, so
I'm always thinking what can go wrong? And you know,
(14:57):
so Estrala Hormus has been closed, it has been six days.
What if it's closed sixty Iran has attack soon energy facilities,
but not anything important and not really with intensity. You know,
it's not attacking is not just one or two drones.
It will be like sending five hundred against oil fields,
oil terminals, et cetera, et cetera. My concern is that
(15:19):
these really properly escalate and then it's when you know,
the price of oil goes much higher, when the countries
can see troubles. You know, what if they attack the
water supplies readd itself is a city of seven million people.
It is one of the largest metropolis in the Middle East.
What if they lose supply? How do you evacuate a
city of seven million people today. Those are the kind
(15:41):
of things that I worry. I mean, when when when
a water starts, all old plants us basically have to
be thrown away, and we don't know how how that's
going to play out. On the other hand, we are
on day six.
Speaker 2 (15:55):
You know, it's going feels like way longer.
Speaker 6 (15:58):
It does, but is not going I mean, you look
at it. Iran is put in a good fight and
a good defense. It's not gonna win. I don't have
any question whatsoever that the US prevails here is how
much damage Iran can inflat in the neighboring countries before
(16:18):
that happens. And also, let's not forget President Trump has
a lot of rams at his hand. I mean, he
has achieved. You may agree or disagree with the White House,
but you look from a non political position what he
has achieved already. It has crushed the nuclear program of
(16:39):
Iran completely. It has significantly degraded the ability of Iran
to lounge ballistic missiles, and the stockpile of ballistic missiles
of Iran has been reduced. And he killed the Supreme
Leader and around forty to fifty other people of the
Iranian leadership. I mean President Trump can turn around any
(17:02):
day and say mission accomplished, we are gone, major combat
operations are over, and we're going to keep a watchful
eye Iran. Don't do anything silly because we will hit
you back. But this is over.
Speaker 2 (17:15):
It struck me the idea of like what if the
Straits of Hormos are closed for sixty days? If that happens,
I know that the US and Europe are in kind
of different positions, Like what what does that look like
for the US and for Europe if the Strait of
Hormos is closed for sixty days?
Speaker 5 (17:33):
Is it a.
Speaker 2 (17:33):
Different I mean the US produces a lot of its
own oil. Europe is mostly a net importer. I don't
know what does that? How does that play out?
Speaker 6 (17:40):
The US produces a lot of oil is another sported actually,
but the price of oil is set on the global market,
and a crisis anywhere is a crisis everywhere. Everyone is
going to feel the pain and the price is going
to go up for everyone. The oil market is not
really thinking about sixty days. I think thinking more about
six days. At the moment. It will mean a significant
(18:03):
oil shock. People say, oh, world cases scenario is one
hundred dollars oil. Truly worst cases scenario, what I will
call it, really worst cases scenario. I think that we
go north of two hundred dollars, we will need massive
demand destruction. It will it will imply an economic shock
of the size that the central banks will have to intervene,
(18:24):
et cetera. Ac It's very ugly, but that's one of
the reasons that I cannot see these lasting sixty days.
I think that the White House will will call it
over a lot earlier. And that's not like, you know,
there is a lot of cynicism on on Wall Street,
and there's all that will be Taco, you know, you know.
Speaker 5 (18:45):
I think Taco's out the window here.
Speaker 3 (18:48):
I mean Taco was he doesn't, you know, he doesn't
knock out the Supreme Leader. That was kind of where
we were nine months ago.
Speaker 6 (18:55):
But that's that's what I That's why I said a
lot of citizens, I don't think I will be Taco.
I mean, like, you know, having achieved killing the Supreme Leader,
I think that President Trump can turn around and say
I'm done any day, and I still claim that he
achieved a lot. Again, we can't use questions whether actually
was achieved. Whether killing the Supreme Leader actually brings us
closer to have a prosperous, democratic and a stable Iran,
(19:17):
which I don't think it has, But I do believe
that the White House has a lot of rams that
they can't take. This really gets ugly, and they decided
that the economic price is not worth anymore.
Speaker 5 (19:32):
Ja your blast, Thank you so much for being here.
We will have to stay in.
Speaker 3 (19:35):
Touch as this conflict continues and check in with you
down the road.
Speaker 5 (19:41):
Thanks a lot for the time.
Speaker 6 (19:42):
Thank you, hopefully not in sixty days.
Speaker 5 (19:53):
Say see.
Speaker 3 (19:53):
One of the kind of interesting side alleys of what
is happening Iran is a question of a and in
particular these big AI companies that are now defense contractors,
and even the use of some of these chatbots, as
crazy as it sounds, in the planning and prosecution of
the war itself. But luckily we've got somebody great to
(20:17):
talk about it. It's a man and Mall Bloomberg columnist.
You know, Amanda normally writes about brand perceptions. But there
was this dispute between Anthropic, which one of the two
big chatbots, and the Pentagon. You want to just talk
us through what happened as well as the backlash that's
been brewing.
Speaker 7 (20:31):
So Anthropic, up until quite recently was a active government contractor.
It had DoD contracts to allow the government to use
its AI models Claude.
Speaker 5 (20:42):
I call them Claude Yes, Claude, yes.
Speaker 7 (20:44):
Sir Claude in different types of defense applications. So and
Anthropic CEO and peteg Seth and their respective organizations have
been feuding for a little bit over exactly the details
of how those models were going to be used. Hegseth
and the DoD wanted to use them for quote unquote
all lawful purposes, and Anthropic wanted a slightly different implementation.
(21:08):
They specifically, they did not want to agree to allow
mass surveillance of American citizens, and they didn't want claud
to be used in the deployment of fully autonomous weapons.
And the DoD in Hegseth were arguing that this is
a lawful use and you can't tell us what to
do with your tools once we've bought your tools. At
the end of last week this sort of exploded. Anthropic
(21:30):
got dropped as a government contractor. The DoD labeled them
a supply chain threat, which means that other government contractors.
Other defense contractors are not allowed to use or do
business with Anthropic, which is a problem because all of
the tech companies are intermingled in their use of each
other's services, So Google, Amazon, et cetera can't be involved
(21:53):
with Anthropic anymore theoretically, And into this sort of vacuum
of government contracting came open AI and say Altman, and
essentially what he said is we'll do it, you know,
and because these companies are both consumer face.
Speaker 2 (22:08):
It's okay with mass surveillance and we're okay with like
direct drones.
Speaker 7 (22:13):
That's the thing. Nobody really knows exactly what open ayes
agreement with the Department of Defense is. We know what
Sam Altman has said publicly.
Speaker 3 (22:21):
We also don't really know how these tools are being used.
I feel like anytime this comes up, I have to say, reminder,
these are tools for summarizing emails, like that is their
main use. That is how the Pentagon is using them.
That they're using them more or less the same way
that everybody else is using them. And even in the
back and forth with the Pentagon, there were Defense Apartment
(22:42):
sources saying essentially, we're not using it in the ways
that Anthropic is worried about we just want to keep
our options.
Speaker 7 (22:49):
We just want to be able to do that in
the future if we feel like it, basically.
Speaker 3 (22:52):
But there is an interesting brand perception here, right, Amanda.
Speaker 7 (22:56):
With these AI companies, you have sort of an interesting
case where you know, open ai and Anthropic in particular,
are sort of hungry for revenue. They've got these very
expensive companies with very expensive data needs, very expensive development needs.
They've borrowed a lot of money, and they are looking
for ways to apply the technology they have in ways
(23:19):
that earn them revenue. So you've got them government contracting,
doing corporate contracting, doing consumer applications, and which means that
they are oddly exposed both to government whims and to
consumer perception, which is not the case with most government contractors.
Speaker 3 (23:36):
But let's talk about the backlash because open ai steps
into the breach, says yeah, we'll do it, sure, and
immediately people start deleting Chatchiputa.
Speaker 5 (23:47):
Yeah.
Speaker 7 (23:47):
This is where it gets real funny to be both
a defense contractor and a consumer company that is trying
to cultivate the sort of like warm, cudly friendly, maybe sycophantic,
depending on the attitude of the particular chat model. We're
talking about presence toward the general public. So Sam Altman said, yeah,
we'll do it, and what is it, we don't know,
but he sort of jumped into the breach with the company.
(24:09):
He leads to say that we'll take this revenue, you
can use our toles. And so the general public, having
many of them having some sort of financial relationship with
chat GPT, even if it's just a twenty dollars a
month user subscription, said we don't like that.
Speaker 2 (24:23):
We don't want to be mass surveilled by our government.
Speaker 6 (24:25):
In this way.
Speaker 5 (24:26):
It's a new hot thingia.
Speaker 7 (24:29):
Yeah, So there was a ton of backlash online, people
posting screenshots of themselves deleting chat GPT, getting rid of
their their subscription, and then downloading anthropics Claude. Basically, Claude
jumped to the top of the Apple app Store download list.
It remains there as of me talking right now. I
just checked it. Yeah, there was a huge surgeon downloads,
a huge surgeon subscriptions. So the consumer public says, we
(24:53):
like it when you say we don't want to surveil
the general public in this way or decide where missiles go.
Speaker 3 (25:01):
We wanted to maybe take a broader view of this.
We sent producer Jasmine J. T Green out into New
York City just to ask some people if they had
grocked this controversy.
Speaker 6 (25:13):
Do y'all use AI currently?
Speaker 8 (25:15):
Not?
Speaker 6 (25:16):
Really?
Speaker 9 (25:16):
Yes, I do.
Speaker 5 (25:17):
I'll come.
Speaker 1 (25:18):
If we teach the AI how to do things, it's
not going to do them as well as.
Speaker 2 (25:22):
Like people could do it.
Speaker 3 (25:23):
I use it when it first came out, like a
little bit, and I was like, this is ass like
with the art stuff. Everything I can create, I can
create by myself.
Speaker 9 (25:32):
I use it a lot when I'm traveling trying to
figure out where I am, what's happening today.
Speaker 3 (25:37):
AI was like originally made to do menial tasks and
now it's going the other way around, And I don't.
Speaker 6 (25:44):
Want to be part of that.
Speaker 5 (25:45):
Open AI just took a contract with the Department of Defense.
Were you guys like following any of that?
Speaker 3 (25:50):
And I was following, But it's more like, why are
we using the robot to kill people?
Speaker 5 (25:56):
AI should not be used for human surveillance? Really, we
shouldn't have as human surveillance as we already have. It's
kind of like a whole crazy thing.
Speaker 7 (26:04):
I'm gonna misread what humans are doing, so then it's gonna.
Speaker 2 (26:09):
Missfire a lot, and in like trials.
Speaker 4 (26:12):
Of like it thinking that it's doing the correct thing,
it's gonna it could just do a lot of damage.
Speaker 9 (26:18):
I've been following the story and I'm kind of interested
in it in the sense that AI unsupervised without human
intervention is no better than a coin operated machine that
you used to get a candy ball out of and
it would get stuck. What happens when it gets stuck.
There's no way to record it.
Speaker 6 (26:37):
I've never really seen the need for it.
Speaker 5 (26:41):
Have we not read any dystopian like shit like It's
just this doesn't sound very good.
Speaker 3 (26:47):
We are like halfway to like really good science fiction
story there, I feel. I mean, Amanda, do you think
there's the question about these chatbots and then becoming politicized?
And I was surprised. I started looking for this where
this quit GPT trend started actually started a month ago
(27:07):
during the just after the Alex Pretti killing, where you
had a bunch of liberals basically looking for conservative Trump
aligned companies to boycott and finding this one, which is
a pretty good target because the CEO, Greg Brockman has
given a large amount of money to Donald Trump in
this cycle, something like twenty five million dollars, and so
(27:28):
you could see why this is happening. I'm curious do
you think that any of these boycotts have any kind
of effect? Do they have a political effect? Do they
potentially have a business effect? Because it really hurt open AI.
Speaker 7 (27:41):
I think that there's two interesting questions with public perception
of AI. Here you've got like public perception of AI
as like a class of tool and as like a
class of business, and how we want to integrate or
not integrate those tools into society, and how we want
to regulate those businesses long term. And then you've also
got the question of like how these particular companies are viewed.
(28:01):
And AI companies are in an interesting spot when it
comes to like brand perception because usually companies that become
as large as they are do so over like a
long period of time. Companies that have you know, the
amount of economic influence and social influence that these companies
have cultivated. Usually they've been around for a while, and
there's a lot of evidence of their political alignment, of
how their tools are used, what their products do, and
(28:24):
like what like particular political valence they might have with
Open AI and Anthropic and other large AI companies. We're
sort of figuring that out in real time after they've
already gained all of this influence. So I think consumers
have like an interesting opportunity to react to these companies
and like reward or punish them accordingly because they are
still building their place in public perception. And more broadly,
(28:49):
I think it's important to these companies like long term
viability how AI in general is perceived. So it might
be good for Anthropic in its perception that it has
said no in some form to the Trump administration on things,
on things that are broadly unpopular with the public.
Speaker 3 (29:04):
You know who work with large data sets, and this
is where the mass surveillance comes in, right is intelligence analysts.
And I think that like people, people read these stories
and I think they imagine like Rock or it will
be Rock by the way, because now that Anthropics not
outs like Elon Musk's chatbody is.
Speaker 5 (29:22):
The lane is open? Yeah exactly?
Speaker 3 (29:23):
Yeah, there no like you imagine like Rock, like telling
the missile like where to go?
Speaker 5 (29:29):
But what's what? What is actually? I think what is
more realistic is massive data sets.
Speaker 3 (29:34):
Whether you're asking, you're asking the LM to look at
a satellite photograph and say where are the targets? Or
you're just asking it to look over a bunch of
phone records or stuff.
Speaker 5 (29:44):
And you can see why that's a little bit scared.
Speaker 7 (29:46):
And I think that it's important to remember that whether
or not the models are like good at these functions
doesn't necessarily determine whether or not those functions are dangerous.
Speaker 2 (29:54):
They're dangerous.
Speaker 7 (29:55):
It's dangerous when they're not good at it, too, because
then you get all kinds of mistakes that her or
kill people potentially.
Speaker 3 (30:01):
Yeah, we should say, like, there's still this ongoing question
over how this Iranian school was destroyed, and I don't
know if it would make us feel better or worse
to know if AI had been involved, but it kind
of highlights just how high the stakes are.
Speaker 7 (30:17):
Right, It's dangerous when the AI is great at these tasks,
and it's dangerous in a different way when it's terrible
at them but used anyway.
Speaker 3 (30:24):
Stacy, you had asked about the businesses, like how big
a factor are consumers in a given AI platform?
Speaker 5 (30:30):
And I think the answer is it depends on the
AI platform.
Speaker 3 (30:33):
So one reason this matters a lot to open AI
is open AI, unlike Anthropic, has a ton of consumer
use because of the way that it happened. Right, they
made this free demo called CHATCHYBT available to the public.
Speaker 5 (30:47):
Lots of people signed up.
Speaker 3 (30:48):
They have significant just normal people using it. Apps like
Claude and co Pilot are much more on the sort.
Speaker 5 (30:56):
Of water tool thing. Grock is all the way over.
Speaker 3 (31:00):
If there's a continue in between friend and colleague. Groc
is such a good friend that you're having sex with it,
and like co Pilot is not having.
Speaker 5 (31:09):
Sex with you.
Speaker 3 (31:10):
It's just like searching your emails and open Aiyes, somewhere
in the middle, and there's something more uncomfortable if you're
friends with your chatbot. There's something weird about your friend
also surveilling gazillions of Americans, whereas if your chatbot is
just helping you summarize your emails, I don't know that
it bothers you so much.
Speaker 5 (31:26):
If they're working with the Pentagon.
Speaker 7 (31:28):
Right, I think that Anthropic, in showing like a modicum
of backbone, I think did risk something real for the company.
Speaker 2 (31:35):
It's quite refreshing, honestly.
Speaker 7 (31:37):
Yeah, And I think that was like why you saw
this surge in public sort of like desire to support
this company because there have been so few like major
companies that have been willing to publicly tech companies, yes,
especially chech companies, that have been willing to break with
the Trump administration on literally anything. And Anthropic is not
a boy scout like it partners with palenter, which does
a lot of data analysis and surveillance. It's my underlie
(32:00):
a lot of Palenteer's capabilities. It earlier this year, while
feuding with the Department of Defense, according to one of
our colleagues at Bloomberg News, put in a bid to
develop an autonomous drone swarm.
Speaker 5 (32:10):
System for the Pentagon.
Speaker 7 (32:11):
So like Anthropic does want to do some of this stuff,
it just doesn't want to do like a.
Speaker 5 (32:16):
Couple very particular things.
Speaker 7 (32:18):
One thing that I've been sort of waiting to see
happen is for some of these businesses, these big like
consumer exposed businesses in particular, till decide that they see
which way the wind is blowing, and like right now
it's blowing away from a bunch of these like highly
controversial Trump administration policies and toward more moderate, more progressive
ideas of how that some of this stuff should be handled.
(32:39):
We see that in issue polling, you see it in
how elections have gone thus far during the Trump presidency.
So I think that, like, if you're a company that
has consumer exposure and you have a brand name to burnish,
and you're looking at the long term, it might be
time to start taking the temperature on some of this
stuff and start taking what feel like short term risks
(32:59):
for long term avoidance of litigation or congressional hearings.
Speaker 3 (33:04):
All right, Amanda, we're gonna let you go. We're gonna
keep following this listeners. If you have changed chatbots, if
you are now a grock person or a cheek person,
let us know everybody. Everybody's at Bloomberg dot net.
Speaker 5 (33:22):
And Amanda, thank you for being here. We'll have you
back soon.
Speaker 7 (33:24):
Thanks so much for having me.
Speaker 3 (33:31):
Stacey, it is that time. It's the time we talk
about under and we have a special guest. Fellow member
of the Bloomberg Audio Travers Drake Bennett, tech reporter at
Bloomberg and more importantly, co host of the new limited
series The six Bureau It Is Awesome, co hosted with
Jordan Robertson.
Speaker 5 (33:50):
Is another reporter. Drake welcome to everybody's business.
Speaker 8 (33:53):
Thanks guys.
Speaker 2 (33:54):
So tell us about the sixth Bureau.
Speaker 8 (33:57):
It's about the MSS, which is basically the the most
important intelligence agency that you've never heard of. It's a
Ministry of State Security, or most people have never heard of.
It's China's Ministry of State Security. It's sort of like
China's CIA and FBI combined. And we don't really know
a lot about it in the West. The guys who
work there are sort of like these ghosts. But we
(34:18):
were able to basically find out all this amazing detail
about this one MSS officer, and so we tell his story,
his rise and his fall.
Speaker 2 (34:25):
Is he based in the US or in China?
Speaker 8 (34:27):
Or he was based in China and if he had
stayed in China he would have been fine, but he
sort of makes a faithful decision to leave China at
a certain point.
Speaker 3 (34:36):
Wait, let's just hear a little bit a little clip
from the show, just to give people a taste of
what they can look forward to.
Speaker 10 (34:44):
This is Special Agent Regal Special Agent Bradley Hall. The
time is approximately eleven fifteen am, about to start consensual
telephone call with doctor Daiza.
Speaker 2 (35:00):
Oh my gosh, what is happening in this call like set.
Speaker 8 (35:02):
The scene, Okay, So, Mike Riegel is one of the
two FBI agents who are at the center of this case,
and Daiwa Jong is an engineer at ge Aviation who's
basically going about his business working on these very proprietary
technologies to make GE jet engines when the MSS reaches
out to him and says, we saw your LinkedIn page.
(35:25):
You look like a super prestigious smart guy. We'd like
you to come give a talk in China about what
you do, and that's often how these relationships start. So
he goes over, he gives this talk. They asked some
sensitive questions. He's very conscientious about it, not answering anything
he shouldn't answer, but he did kind of like take
a couple of files with him. It's just something he
shouldn't have done. He didn't tell his bosses about it,
(35:47):
also something he shouldn't have done. So he comes back
and basically the FBI kind of like he pops onto
their radar. They've also already been kind of interested in
Shu Yun June, who's our main guy back in China
for a little while, so they see this as an
opportunity to try to put in a double agent. So
they basically use this g engineer. They sort of have
(36:08):
him seem really interested in working with the MSS and
giving up all these secrets, and so that's the lure
they use, and this call is kind of like part
of the process of trying to get Shoe the MSS
officer interested and hooked.
Speaker 5 (36:23):
Fifth episode comes.
Speaker 8 (36:24):
Out tomorrow and then then there's two more weeks that
people can catch up before the sixth episode.
Speaker 2 (36:31):
And it sounds like very It's like a Spine novel.
Speaker 5 (36:34):
It is like a Spye novel.
Speaker 8 (36:35):
I mean, the sort of amount of detail that we
were able to get about Shoe Yan June and recordings
in Recordings amazing. He sort of seems to have compulsively
kept track of all the stuff in his life, stupidly
sort of secret stuff, but also like very personal stuff
about his like his gripes about his boss, like rejecting
(36:55):
his expense reports, his kind of like feelings about his marriage.
It's just it's like all it's a very deep portrait
that we're able to sort of draw on Drake.
Speaker 3 (37:06):
No one is underrating the sixth Bureau. Everyone's got to
go listen to that y hopefully by now their soul.
Speaker 5 (37:11):
What is your underrated story for the week?
Speaker 8 (37:13):
My underrated story, and it's partly because I have been
marinating in China stuff, is that there is this summit
meeting coming up supposedly at the end of March between
Chijin paying and Donald Trump, and it's gotten kind of
lost in all the Iran news, but it is a
really big deal and it's kind of an interesting summit
because Donald Trump is kind of not a president that
(37:36):
kind of fought like normally for these things. There's this
whole kind of like pre process that happens with these
career foreign service officers are sort of like laying the
groundwork for this, and that's not doesn't seem to be
exactly happening. I mean, Scott, I think it's Bessett. I
think it's best in't and the Vice Premier of China
are sort of talking about stuff, but it's like it's
very focused on sort of trade stuff at the moment
(37:58):
for me like understandable reason, but there are other issues
like Taiwan, and you know, Trump kind of like freaked
everyone out in the kind of China foreign policy world
in the US recently where he said, because it's all
about these kind of very carefully modulated half things you say,
and so someone like he basically said like, yes, I'm
consulting with China on whether to do this arms deal
(38:21):
with Taiwan, which is like this huge no no, And
so he's just.
Speaker 2 (38:23):
Sort of like, why is that a no no?
Speaker 8 (38:25):
Because you don't want to give China like a veto
over your relationship with Taiwan, Like it's you kind of
don't want to let them tell us how we should
be with Taiwan. And so that was seen as kind
of this victory. But the other thing about Trump, obviously,
is like the outcome of these summit meetings is often
like some very carefully modulated statement, but Trump doesn't really
do that, and also like he'll say something.
Speaker 2 (38:47):
Not a carefully modulated guy.
Speaker 5 (38:49):
Go back on it.
Speaker 8 (38:49):
So it's just like the whole summit apparatus is kind
of like, in this interesting moment right now, what are some.
Speaker 2 (38:55):
Of the possible outcomes that make this an underrated story?
Speaker 8 (38:58):
Well, he could, you know, this arms deal that Taiwan
is like it's kind of unclear what's going to happen
with that. I mean, I think the things that people
are talking about more? Are these are the tariffs? You know?
Are these sort of chip restrictions soybeans? People talking about soybeans.
That's like a big market for US farmers.
Speaker 2 (39:16):
Yeah, yeah, well definitely check out the sixth Bureau. So
already five of the six episodes are up, so check
it out. Drake. Thank you so much for joining us,
and thank you for your underrated story.
Speaker 5 (39:26):
Thanks guys.
Speaker 2 (39:34):
This show is produced by Stacy Wong and Jasmine J. T.
Speaker 5 (39:37):
Breen.
Speaker 2 (39:37):
Magnus Hendrickson is our supervising producer, Sam Rogan, Handle's engineering
and Dave Purcell factchecks. Special thanks to Jeff Muscus, Julia Rubin,
and Maria Ling. If you have a minute, please rate
and review the show. It means a lot to us.
And if you have a story that should be our business,
email us. Everybody's at Bloomberg dot net. That's everybody's with
the nests at Bloomberg dot net. Thank you for listening,
(39:59):
See you next week.
Speaker 3 (40:01):
The st