businesses. i hear firsthand of their critical need for their access to capital, the concern they have with regulations that could threaten their businesses. i question vice chair bar before this committee about the risk weighting and public listing requirements in the basal three in game proposal -- endgame proposal. astonishingly, he claimed small businesses would be better off under the proposed scheme than they are now despite the fact that less than 1/10 of 1% of businesses are publicly listed and would qualify for the lower risk weighting. mr. dimon, can you speak to how the endgame proposal would impact her ability to lead critical funds to small business and what trickling -- trickle-down effects we might expect if this were implemented?

>> thank you for the question. these questions should not wait for what was coming out. they should happen before. the work is complex. the work should have been done. the details should have been done. that means we will have to charge more. and a lot of unintended consequences. we have to charge more locally to make sure we get a return. like the operational risk capital, it would increase the cost of a checking account or making alone, so all of these things are a cumulative effect and it will affect our ability to finance your local community bank where the montana pension plan, so all of these things will trickle through and become more expensive, and there will be some unintended consequences. also how we deal with customers. i think some people may drop a few customers and it may lead to more concentration in certain

ways because you have to get more revenues from clients to justify the loan. sen. daines: thank you. any comments or thoughts on that? >> i agree with what he said. sen. daines: thank you. i want to shift to the issue of oil and gas investment. this last year and a half since russia's invasion of ukraine, i have had the opportunity to travel extensively throughout europe where i met with leaders in virtually all the countries that border ukraine, particularly on the west side. i happen to the baltics and the balkans as well as ukraine border countries. one thing i heard that is nearly universal is they have let the whims of the day dictate their energy policy and moved too quickly away from reliable baseload forms of energy like natural gas, coal, hydropower, and nuclear. i was struck as they took me out to their facility. by the way, when the

re-gasification, the floating ships parked there, it is fittingly called the independence. lng has really been key coming often from the united states to get europe back on its feet to a certain extent as it were its two energy, but asked the folks running the plant, what were you doing before lng? i was curious. they said, we used to run the nuclear plant in lithuania. i said, what do you mean you used to run? they said, we used to supply 70% of lithuanians electricity through a nuclear plant. but in 2009, it was shut down. why was it shut down? as a condition of joining the eu, they made them shut it down and listen when you went from being a net energy exporter to an energy importer. this is just a warning for all of us. the whim of the moment come some

particular segment of a green movement at that time that was very anti-nuclear, and to his credit, he was an old chernobyl type reactor that needed to be changed. they were going to build a new japanese state-of-the-art reactor but that shut it down and are paying a severe price for it. the need for fossil fuels is not going to dissipate in the near term i am very concerned the biden administration has an all-out assault on the oil and gas industry of the u.s. to further their green fantasy and hallucination. we can do this the safest and most environmentally sound way to have a balanced energy portfolio that includes of course renewables and the exciting future we have in the transition, but we better make sure we think about expanding our portfolio when the world will be 50% more energy than it does today in the next 25 years. can you discuss -- chair brown: very briefly, 30

seconds. sen. daines: can you discuss the common sense as it relates to capital requirements, lending in the oil and gas industry? mr. dimon: we have a tradition that means safe and secure and affordable oil to do that. if you don't have affordable cheaper energy, the cost on poor people and poor nations will be dramatic. we can get it done right as long as we are thoughtful about it. chair brown: senator smith is recognized from minnesota. se. smithn -- sen. smith: good afternoon to have you all with the spaghetti i want to start and talk about the community reinvestment act. i think this is a really important tool for making sure people and businesses and low and moderate income communities have access to capital and lending in financial services. i one m encouraged by the new cra rulemaking -- five for one m encouraged by the new cra

rulemaking that it mixed up with changes to realign the cra with this core purpose and to give banks and financial institutions clear direction on what activities qualify for a cra credit, so could you tell me how uss the final rulemaking for the cra, and do you think these changes will better enable banks to meet their cra obligations? >> senator, i very much agree with your sentiment of both the importance of cra and the need to make changes in existing cra legislation to ensure the ultimate goals are actually achieved through the actual legislation. i think when you look at the changes that happened made, there are certainly many items taken into account which are supportive of what i just said. we have given some comments to the regulators about some of the specifics we would like them to reconsider as they work towards that goal.

but directionally rethinking cra and doing it in a way all the regulators come together is extremely helpful. sen. smith: thank you. i think having everybody on the same page was an extremely important part of this as well. another thing i think is true is the updates to the cra regulations were decades overdue, so do you think it will be helpful for regulators to update these rules more regularly to have a more rapid cycle? not talking about changing rules all the time but learning from our experience and your experience to make sure they are working well? >> yes, it absolutely makes sense to look at these things and make sure they have the intended consequences and at the same time realize all of those changes filter through a lot of work we have to do, and so striking that right balance is also i think very important. sen. smith: thank you. mr. solomon, good afternoon. it is good to see you. many of us are giving thought

ai, artificial intelligence, is being deployed and how we should be setting guardrails for its use and understanding ai has been in use for many years. i think it is true generative ai has gotten a lot of attention over this last year at city ands the limitations that have been on full view -- over this last year for the capacity and limitations that have been on full view the last year. that was chatbot experienced a severe hallucination and least confidential data, so my question for you as the leader of goldman sachs is, how do you see using this? i know you probably have been using ai tools for quite a long time, but could you talk a little bit about how the generative ai projects you are working on, how you see these being deployed internally, and how you are thinking about the appropriate guardrails? >> thank you for the question,

senator. obviously, something we are very focused on, and as you highlight, there are super offensive productivity things that can be done with knology's as technology accelerates. we have been using artificial intelligence in our business for quite some time, but the largely which models accelerate the ability to use very highly paid people more effectively with clients by giving them access to information and giving our clients access to information that is sorted and organized more quickly. those are the positives. the negatives in defense of the technology, can be used to disrupt activities, markets, and that falls into cyber protection and guardrails, so we have an enormous amount of focused and thinking through how these tools can be used to attack our systems, platforms, etc. i think the acceleration of this technology will continue. the pace is quite robust, and there are opportunities, but we also have to be vigilant to recognize there are things that

will develop we cannot see. we have to make sure we have the right protections in place. sen. smith: miss fraser, i have a couple seconds left. you and i spoke about this recently. tell me about how you think of this. >> four years ago, we put principles in place for how to use ai and topics such as fairness and transparency and how it is used for making sure you can understand and trace the different algorithms that are in place, elements like that, making sure there are human beings governing this, and make sure the protections are there so we get the opportunities realized from it and also use it to defend against threats. sen. smith: thank you. chair brown: senator fetterman from pennsylvania is recognized. sen. fetterman: thank you, mr. chairman. thank you. back in 2008, the bank of america, your bank did not have

enough capital to cushion the bad investments decisions that you made any be bailed out, and in 2023 of this year, silicon valley bank did not have maintaining enough capital and had $20 billion over from the fdic. so let me ask you, should we believe you that you have the batman we got this kind of an issue, or should we be able to have intervention to adjust this? mr. moynihan: senator, i think since the financial crisis, this body along with congress and the president passed the dodd frank act there have been -- which changed the capital rules. there is adoption of standards. on top of that, there have been 13 stress tests, each one of those more severe, and even the last five years, we probably have 10%, 15% were capital

required for those tests so there has been a significant amount of regime change made. the question is for the institutions that failed earlier this year, none of them captured with that scrutiny and overview is we had to go in and do two things, keep them alive long enough, and 2.2 billion dollars to the fdic to pay for the cleanup -- $2.1 billion to $2.2 billion to the fdic to pay for the cleanup. that is why you saw us being a source of strength this year. sen. fetterman: if you felt we supported those kinds of changes after the crash, how come we have what happened at the silicon valley bank now some 15

years later and if there was not the kind of intervention, there would have been another kind of a crash, so have we gotten it right yet? should we have to make any more changes? are you ok with this idea that a relatively small bank, especially compared to the size of all of you today in front of us could cause a crash systemwide unless the president had to quickly intervene and make sure we addressed this? any changes? anything else? what is ok to worry a small bank could actually imperil our entire financial system? >> i think 4000 banks have failed over the source of time. that is what the ftse was greeted to help. sen. fetterman: but have any of them almost crushed their entire economy or financial system? >> in 2007, 2 thousand eight, the system was outside of that

so many people appear when not bank holding companies at that time. that was the convention of the broader preview of that aching regulatory net. the invention of stress testing, all of these things and the measures to move to a advanced methodology using metals of other things to measure risk as opposed to standardized methodologies, which we are going to delegate all of that was made to change the system. silicon valley did not threaten the u.s. economy. it could have been resolved and was resolved. sen. fetterman: why did the president actually swiftly if there was not such a concern? that is amazing that you can get on the phone and so quickly for that kind of money if there really was not such a significant rest. i was not right about the other 4000 banks that crushed that required the president to react in such a swift manner. >> you would have to ask the people.

we did not think all that could happen resolved a different way. many of us got involved in the first republic transaction, but you have to ask other people why they did what they did. it is not us. sen. fetterman: ok. but again, no changes are necessary despite now that we seem to have this enduring kind of a risk that bad behavior or bad investments could actually crash our whole financial systems. >> there were specific things that happened that should be addressed by regulations and the most important one is the interest rate risk. that has nothing to do with basil three, the issue here. the american public should know that banks pay for the fbi seeping that is not government money. that is a neutral company and i would love to take it off your hands and manage it ourselves. sen. fetterman: all due respect, i don't think it matters who is paying for it but the fact that anyone has to pay because of these choices are necessary. mr. dimon was next in my

questioning. chair brown: quickly. sen. fetterman: outstanding. you claim that it will increase costs and reduce lending. chase has done $5.7 billion in share buybacks and i billion dollars in dividends so far this year, so wouldn't it be easier to hold onto a lot of that money and lend it out? for why would you want to give it away to the shareholders and other things that are buying back your own stock? mr. dimon: it is the shareholders's money, and we do all the proper lending we can and should do. it will reduce the profit ability to bank of doing business. i don't think we should be asking people to do stuff that is for profit for their shareholders. that is like a charity. happy to talk about that in more detail. chair brown: thank you, senator fetterman. the committee will take under advisement the proposal to take over the fdic. sen. fetterman: i would have

loved to have more time because i would love to have you explain why we should -- why democrats should support nikki haley for president. chair brown: thank you, mr. . the senator from georgia is recognized. sen. warnock: thank you so much, mr. chair. before i asked the questions i set out to ask, i have to respond to the senator from ohio , who apparently takes great voltage to the words or letters sent by the leaders of these institutions responding to the voter suppression bill that was passed in georgia. i know a little something about

voter suppression in georgia. today is in fact the one year anniversary of my election in georgia. but my election should not give people the false impression that there is no voter suppression in georgia. it should not give us any misunderstanding about how bad the law is. in fact, i had to sue the state of georgia because at the beginning of my run off ago, they decided folks would not be able to vote the first saturday of the runoff, claiming that this was the clear letter of the law, you could not vote a couple days after a holiday, that holiday being thanksgiving, a day that used to honor the anniversary of confederate general robert e. lee so i have to to sue them an appeal again just so georgia voters could vote, so i think the people in

your position have a corporate responsibility, and i hope you will certainly feel the freedom to lead in and the places and spaces where it is necessary. i want to ask you about the safer banking act legislation recently considered by this committee on cannabis banking. many of your banks have lobbied for this bill. and the american bankers association of which you all our members supports the bill as well. i'm going to ask you to raise your hand if you support the safer banking act. none of you support the safer banking act. i am going to ask you a question. raise your hand if you support the safer banking act. >> we all support the intent of it. sen. warnock: let me ask my next

question. raise your hand if you believe passing the safer banking act will reduce the racial wealth gap. so this is interesting. we should have some conversation about this. the american bankers association of which all of you are a part, this legislation will provide legal and regulatory clarity for banks and would help facilitate access to financial services. my question is, legal and regulatory clarity for whom and what are we making safer? since the war on drugs began over 50 years ago, communities across america have been decimated, hollowed out. communities all across our country in the wake of the explosion of mass incarceration they can gusty mass incarceration capital of the

world, missing bodies, and abandoned buildings. the war on drugs has been a war on communities of color. i want to be clear that i am open to safer banking and more regulatory clarity around cannabis, but my fear is that if we pass this bill right now, your banks and other powerful voices will be missing in action when it comes time to address the broader harms of the war on drugs. so i support safer banking. you all seem reluctant to say whether you support it or not. i am concerned about equity. and whether we will get that in the process. so let me ask you this. will each of you coming to ensuring your banks will uphold the standards in the community reinvestment act, that is, which will soon have another

opportunity to address goodwill you support standards to increase equity as we move forward perhaps on safer banking? >> yes, senator. >> yes, sir. mr. dimon: we support the attempt but i would have to send the archewell -- i would have to see the actual words in the actual law. sen. warnock: would you support efforts about being intentional about supporting equity and addressing the awful impact of 40 years of the war on drugs, which in many ways has been a war on black and brown communities. mr. dimon: yes but i would like to see the actual detail down to the last word before i agree to something. ms. fraser: i think we support the intent. with the details, we would look at it and work with your office if we had concerns. >> we support the intent.

>> similar to my colleagues, we would want to see the detail. >> i would want to understand the detail more. we will continue to do things to support investment in underserved communities. >> exactly the same. same. sen. warnock: thank you very much. i think this is critical. there is nothing in history that suggests to me if we leave behind these communities that are marginalized as we make banking safer for powerful banks and people in positions who sit here and sit there there is nothing that suggests to be we will go back and get those folks, so i hope i can continue to engage you as good, corporate, responsible citizens that you will take an active interest in this, recognizing it is not only the right thing to do for the future of our economy , but it is the smart thing to do. thank you. chair brown: thank you for setting the record straight on

the georgia election law. senator lummis. sen. lummis: welcome. there has been able of talk today about basel three. we know what it means for your banks. i would like to explore for a little bit means for small community banks. wyoming and other rural states rely on small community banks, and while the capital requirements apply to the systemically important banks, i would like to know if there are additional impacts on smaller community banks and their customers, so i will address the question to mr. dimon and ask anybody else wants to take a swing at this to weigh in as well. mr. dimon: thank you, senator. the smaller community banks would say they are not directly affected by this, but since a lot of us appear bank their

banks, retirement funds, cities, other small businesses, local schools, cities, states, hospitals, it will trickle down to higher costs to them in one way or another. it also changes the competitive landscape and in some ways make it harder for them to compete as opposed to less hard. sen. lummis: would anyone else like to take a swing at that one? thank you. americans interact with a financial institution through their banks and save for kids college education with mutual funds and protect their families with insurance. can you explain why ultimately these changes will impact families planning for the future? my question is, what are the impacts of basel three on pensions, mutual funds, insurance companies, and other users of derivatives who hedge? hedging in my industry of

agriculture is very important, so i am interested in the implications for hedging and the other entities i mentioned perhaps this fraser, do address this? ms. fraser: yes, hedging plays a very important role for protecting against rest and helping mitigate risk, particularly when we are in volatile times at the moment. it is important for providing stability and income flows. d hedging is a critical piece for any farmer, so the increasing capital associated with the basel three rule have an impact on the cost of that hedging and potentially even the provision of that hedging, and as you say, it permeates many different parts of our economy and society. it is not just for the most sophisticated players. sen. lummis: i want anyone who

is interested in responding to this question to take it. one of the things my staff observed is that one of the most poorly thought out parts of basel three is how public listings are used as a proxy for counterparty risk in derivatives. counterparty credit risks in derivatives. so it looks like this will harm at a minimum nearly 70 million households who invest in mutual funds. i would like to know if you agree with my staff's concern and how we might address that. this is for anyone who wishes to take it. yes, sir? -- yes, sir? >> is a crude measure of risk does not take into effect at some of the biggest and most complicated companies in america are public. it is just putting in one basket

saying that by definition if you are not public, and if you look at the trends come fewer and fewer companies are public these days. that is a whole different kind of debate we can get into some other time, but it is a terribly corrupt measure. sen. lummis: do you know why they chose to make public versus private companies different and treat them different in terms of using them as a proxy for counterparty credit risk and derivatives? anyone? well, we don't know either, so we are all in the dark. ok. question. why is it -- and this again is for anyone who wishes to weigh in. why is it so important that the u.s. have a bigger tory framework that allows our financial institutions to compete on the global stage? as we see the rise of china asserting the influence of the yuan all over the world.

help me understand why we have to stay competitive. >> i speak as an immigrant to the states. america plays a critical role around the world in terms of supporting supply chains, in terms of the risk management tools it provides committee stability and provides populations all over the world investment flows, we account for over 50% of all of the capital activity and investment activity in the world. that is a strategic asset for america, something we should be incredibly proud of, and it is something we need to defend. sen. lummis: anyone else? chair brown: anybody else want to answer? sure. when you are next to the last, people are getting tired. sen. lummis: thank you so much. chair brown: senator butler, the newest member of this to become an psalm sit there.

sen. butler: i am number 100. when you are number 100, you stand between the panelists and lunch so i appreciate the time you put into talking with me knowing i would be the last person to ask you questions, but because most of you have a significant footprint in the state of california, i thought it important on behalf of the 40 million california residents to sit here the entire time and represent their interests across this industry. i am glad our ranking member made his way back as the newest member of the senate, and i am still getting to know my colleagues and i wanted a ranking member to know that i agree with him on a key point he made in his opening remarks. that is the majority of the american people who are watching this broadcast, particularly who are still watching, are not talking about nor have any interest in basel three endgame.

they are talking about fairness and fees and affordability. that is where i want to add my two questions. i want to -- and it is honestly not to pick on anyone, but really in the space and intention of moving things along , i want to pick up on senator smith's point about all the rhythms and algorithmic deployment. this fraser -- miss frazier, you and i spoke about this as it relates to customer account closures. we talked specifically about the november 5 new york times article in which citi specifically mentioned. a customer of yours who owned a bar and who was making bar like deposits, end of day cash deposits in roundabouts so they could actually keep petty cash on hand to be able to make change at the bar, and found

themselves the victim of an account closure due to what the algorithm determined was suspicious activity. can you talk more about the process that you have deployed across citi to give customers confidence that when you are doing your due diligence as a significant global investment institution, when you are doing your due diligence to provide an enhanced national security, how do those american people who are still watching and listening who will hear this, how can i have confidence their credit is not going to be negatively impacted, that you will return their whatever remaining balance that they may have on time in a way they could actually get their bills paid due to no wrongdoing of the round? ms. fraser: thank you very much

for the question. thank you also for sitting through the entirety of the hearings today. you raised a really important point. all of us want to protect our customers. there is a tremendous amount of fraud. cyber keeps us awake at night. we want to do a good job for our customers. we want to look after them and enable them to live their lives and their financial lives securely. we have money laundering requirements that are very significant in which we are not allowed to go and then tell the customer why it is we have closed that account. i think all of us appreciate how frustrating that is for our customers, but we must follow the law. you and i have also talked about when it is found out a customer's account has been closed in error or for some other reason or there has been fraud blocks, how we then help them recover their funds quickly.

there is no bank ceo on this table that does not want to help a customer to do that. we are very happy to follow up with you on different ways that can be achieved. thank you. sen. butler: thank you, and thank you for extending that opportunity to continue to figure out ways this body can act to protect not only california customers, but people who are banking with you institutions around the country. my last question, you and i talked about this as the representative from california. it is critical i represent the voices on affordability and hope affordability. in particular, your institution has done an incredible amount on this issue, and i want to applaud and recognize you for that. on the other hand, the other issue that i raised with you is just a concern of this intersection of both a declaration and a support for

investing in affordable housing and making mortgages more affordable for low and middle income families and the practice of financial institutions in buying real estate development purely for the purposes of putting it up for rent. those two things seem to be in opposite and contrast to me, and there is a report of jp specifically in california about this behavior. i would love to give you the opportunity to talk to californians about how you are meeting both of those obligations, the obligation to provide more affordable housing, helped to create more access to the american dream, and at the same time buying more and more single-family residential properties that they are only going to be available for venting. chair brown: be brief.

mr. dimon: i have been dying to work on that for 10 years now. i think we financed a company building homes, i think 200 homes for rental. rental is appropriate for some people, so i understand your concern and will look into the specific thing come up and building more homes is good for affordable housing. chair brown: thank you. senator butler, thank you. thanks to the eight of you for joining us today. for senators who would wish to submit questions, those questions are due one week from today. to the banks, please submit your responses to these questions for the record no more than 40 days from the date you received them. thank you again. the hearing is adjourned. >> gap and watching the senate banking committee on capital help get this is "bloomberg technology." let's get straight to the takeaways from those hearings. sonali basak has been standing

by on capitol hill the takeaways you think in terms of actually approaching basel three endgame. sonali: listen, on one hand, lawmakers, some of them have heard their cry. they heard the bank ceos's faces and they would have to go to the regular and make sure the regulators waited to implement these rules and pushed this offer get on the other hand, one senator i spoke to was j.d. vance, the ohio republican who was a venture capitalist himself. i asked him whether the private fund industry would face their own regulation, and he said that it very high likely. he could see things going that way. so the push and pull between the banking industry and their biggest clients are going to be very highly watched because of course we know that of course the meeting is ending now and you are seeing the banks about to walk behind me as well, probably, but you see the push

up between the biggest banks and their biggest clients at this point in time given the tension behind the capital rules. caroline: let's talk about ai. the questioning there, crypto, the questioning there. what did you take away from the thoughts of senator elizabeth warren in particular? sonali: succumb of the feelings that happen left over -- listen, the feelings that have been left over from the crypto curse, and agreeing with big bang and their biggest ceos never happens this way, but you had them agreed crypto companies should be facing the anti-money laundering rules the companies had to face for decades, so that was someplace they had agreement. elizabeth warren has turned her attention from the bank ceos to the crypto industry. it has been made pretty clear today. the rest of the senators are worried not just about crypto but ai and whether you are in an area which are calling a break and you don't know whether you are speaking artificial intelligence or a person with your personal financial

information. caroline: we will let you start running after the bank ceos and senators behind you. thank you very much forget meanwhile, let's talk the democratization of finance. we tell accents -- retail access in particular. they will be able to buy slices of corporate bonds like they do with stocks, bringing in a wider buyer based to a fixed income market. joining us now is the public come ceo and cofounder and ultimately, it is a more illiquid accept cost and equities. you are wanting to try to bring some liquidity ability to buy directly on your platform. why? >> with this unprecedented rise we are seeing rates, that we took of unity has grown a large appetite for yield and we discovered a whole world of bonds. we have seen that firsthand in march of this year. we announced the ability to buy six-month t-bills. an instance when with aunt to be the most bought asset on the platform you today.

when you look at the experience around buying corporate bonds, the full universe of treasuries and b disciplines, it is still quite antiquated i would say. the last time rates were this time is literally before the iphone, so it is old, he little clunky, difficult to use, and what we are announcing today is we are building a modern alternative for fixed income to really bring the experience of finding, evaluating, and investing in bonds into the first century. caroline: tell us what technology is necessary to break it into the 21st century. the reason you are able to bring this is because of the way your platform is bringing in apex for example. what are some difficulties of providing such optionalities? jannick: back in 2019, we were the first to launch the ability to buy fractional stocks. they were today similar way here, and it is a partner on the

stocks business so after we sold a huge part of our product, we reached out to them and partnered on building this kind of solution where as we are the broker-dealer and they are more infrastructure and regulatory reporting and so forth, but it works in a similar way in that the the could be around buying these fractions if it comes out of inventory is actually much better than if you have to go to the market every time come at all beastly the bond market is a little different than the equity markets in terms of how the liquidity works. one could argue this potentially even more interesting. caroline: come back and tell us whether this outstrips the demand you see for the t-bills. thank you for your patience out the hearing we sat through. sticking with the theme of the artificial intelligence question going on at the banking hearing, ai is dominating the tech

you slow today. amd in particular will flesh out a strategy for its high-powered ai accelerator. ed is standing by on the ground ahead of an interview with the ceo of amd what is the anticipation? what are we going to be hearing from her about the excitement of the product? ed: it is really about the pentagon for the market for ai accelerators, those high-powered gpu's that go into data centers, and right now trading largely which models and tradition models. powering generative ai. this is really a side-by-side comparison. the video versus the mi three 300 x -- 300 index is it has the latest generation of high-bandwidth memory. that is a technology got to lincoln to products until the second quarter when they come to

market with 200 but they have the market incumbent title. there is a lot of market hype around this because it is a big potential for the market that analysts think amd can take some share in. caroline: no updates on the financials but suitably about the specifics of this particular product lodge. we cannot wait for your interview a little later. make sure you tune in life to his sit down with the amd ceo soon. thanks. speak to you later. apple seeking to reverse a decline in mac and ipad sales, preparing several new bottles and upgrades early next year. mark gurman is joining us to discuss and bring us the latest of what they are planning to macbook air, ipad models as well? mark: yes, we have a bunch coming out in the coming months, likely to happen in the march timeframe so in the spring just a few months from now. and little early in the typical

apple product calendar. on the ipad side, there is going to be a new strategy. bigger displays at lower prices. there will be two new ipad air models. these will have the chip that came to the ipad pro at the end of last year, and you will get a 12 point finance for the first time on a cheaper ipad. potentially spending maybe $500 to $700 less to get the 13 inch display on ipad. at the high-end, new ipad pros with oled's screens and new external keyboards that make the i can't like laptops. the new macbook air is coming in the spring. new 13 inch and 15 inch models to muscle the macbook air updated for the first time the 13 size after a year and a half. the 15 inch model being updated after nine months, and the big change, moving from the m2 ship to the m3 chip.

caroline: regulations will be front and center for the rest of the show. i am interested in what is happening in the eu. apple managing to get a carveout for insight messaging. mark: we reported earlier this morning there is a carveout in the digital markets act where apple is not going to have to make eye message interoperable is part of the new regulations. this is an overhaul to help iphones and ipads will function in europe, but this is super interesting because just a couple weeks ago, apple announced it will support rich communication services. this is a google sponsored or something led by google and provided by google that allows i message to allow phones to text on a single protocol. essentially making it interoperable, and it shows apple made the right move. they got ahead of the digital markets act, and now europe is letting them off easy on messaging. caroline: the blue versus the

green. thank you so much. let's talk about regular ship in the european union probably when it comes to ai. they are bracing to reach a deal on the world's first major set of ai rules. representative's meeting to try to hammer out the act that was first proposed into the 21, but the technology has changed beneath their feet. i would guess joins us now to see whether or not we get any sort of agreement as of today because it is supposed to get difficult, right? >> this is a really big night and possibly a very late night in brussels as we see negotiators come together and try to finalize this ai act, which has been in the works since 2021. while this technology has been moving so fast, regulators are trying to keep up the debate around generative ai in particular has thrown the conversation into disarray. today was supposed to be the day they walk out and easily have some kind of a deal but we are not sure they will come out with

one. we have lots of you countries were made about regulation possibly killing off competitors to openai have lawmakers who say this technology is too powerful and risky to not put clear guardrails around. caroline: having lots of conversations around a similar discussion happening in capitol hill as well. thank you so much. we will see whether we get a deal later. meanwhile, let's talk about venture capital right now. america's frontier fund, aff, i started to make his first investments through a new vc firm. it is a nonprofit investment platform focused on tech breakthroughs and deems to be in the national interest. nonprofit sponsor is part of a broader mission to boost tech innovation in the united states. one of those is roadrunner venture studios. the roadrunner co-founder joins us now for more on how you are looking to allocate money to

disruptive research. you are bringing on board your first three companies to join the studio to not only get money, which i think you raised not only from new mexico in particular, but you are also looking at basically handholding them through their growth, right? >> that is right. we are on emission to partner with brilliant scientists, innovators, entrepreneurs to build new disruptive companies in america, for america come into your point about what is unique about our bottle as we are not only providing capital, we are providing lab space, product management, talent resources, and we will make sure every company rebuild is mapped to a first customer. caroline: let's talk about the swiss customers at the about the commercialization of these three companies. you have hydroponics, cleantech, biotech, manufacturing. how soon do you think these companies will find customer product market for? >> we are on a pathway to make sure they have their first customer within the next year.

we built a proprietary method of commercialization at roadrunner. we have key partners in government and the private sector that we work closely with to ask, what are your hardest problems, and how can we be building products and companies to solve those? caroline: what is so interesting is not only our model but where you are based on how you are raising the money. you want the studio concept to go outside of new mexico. where else would you like? who have you been having discussions with? >> that's right, this movement starts in new mexico but will not end here. we are privileged to be part of this long tapestry of innovation and history in new mexico and building upon it, but we are headed national next to looking at places like new jersey and north dakota and florida and tulsa and texas and taking this to different regions and in areas where if you like so many untapped resources that we can come in, build companies for those local communities and make sure they have the destructive potential that is important for american competitiveness. caroline: what is interesting as we name some of the big tech

players who are behind the nonprofit side of aff, thinking of eric schmidt and peter thiel. have you spoken to them about some of the allegations about the companies you will be back in? >> certainly have a lot of supportive. eric is a friend and mentor who i used to work for but we try to make sure we have partners in venture capital community and in government and the private sector. a lot of the technology we are building is critical tech. it is really important for the u.s. to be on these for national security and competitiveness. we are making sure to share those deals, what we are building, shopping ahead of time with venture capital partners that are friends of ours come and make sure each of these companies and founders are lined up for success. caroline: you previously were the managing director and head of strategy at schmidt futures. you brought on others that have worked there, those that have really technology

knowledge. who else are you bringing on and what expertise are you looking for for roadrunner venture studios? adam: we are privileged to have a great season to team up to -- team here. people that know how to translate deep tech to building products, which is hard work so a lot of commercialization experience. plenty of brilliant ideas if they don't have a champion or ceo behind them dies so we are building a tele-infrastructure and have a head of talent studio. will you will be building with his continue to bring in product managers, continuing to bring in scientists and folks that can help us bring the business development around deep tech. caroline: great to have some thoughts with you today. thank you very much. meanwhile, let's go back to the world of ai because google is opening access to gemini and what is called its largest and most capable ai model.

they are turned to catch up to companies like openai with gpt-4. they have three versions including one that can run directly on smartphones, not just data centers. meanwhile, the application of ai is something tech leaders and civil society advocates i try to get their hands around in terms of how you regulate it. on capitol hill this week, they are there and discussing ai's implications for national security and the potential threats posed by the rapidly benching tools. a ceo is joining us now. you are an academic yourself. what did you make of the statements being made on capitol hill with other leaders, and where it atlanta for those trying to regulate and what was your message today? >> the meeting just ended 20 minutes ago. i am speaking to you from the senate house where we were just

debating this for two hours. i feel like there is a wide range of opinions. and i think the ai doomsday scenario thoughts are overblown when i look at the common arguments, it comes to three things. one is it could happen. we are not sure how, but it could happen. you cannot disprove a negative. you cannot prove a negative. some people think it could happen. there is a fantastic productivity to it. if you like we are still falling short in terms of quantifying what are realistic. how should we think about regulating? caroline: so you are almost renter take outcome, draw out, rationalize some of the so-called hype around the doom of aia, but i the same time, how do you practically think the

u.s. and as we wait for the eu to potentially have some initial deal on the eu-ai act, how should take form? should they only regulate the application of ai? andrew: i think those are great insights. one thing that is important to know is it is a general-purpose technology, meaning it is useful for so many things, chatting to people, answering questions, customer support, so the core technology being regulated is difficult. regulating high power which can be used for also to things but once you take the electric motor and turn it into a electric vehicle or vendor to make and think about the rest of the applications. when you take this technology and build it into a medical device, less make sure the medical device is safe. in a self-driving car, let's make sure the self-driving car essay. but i worry all of the

regulation is slowing down the hundred thousand even more but official applications we could and should be using ai for. caroline: we turn to you because of the expertise you not only have at stanford university as an academic but also as an innovator in and of yourself. and funding innovations through learning ai for example. i am interested in if you think innovation is being stifled by preempting regulation that is not actually there. companies are having to give advice and turn into consultants and make sure they build the right way ahead of any rules coming into place. andrew: the ai regulation space has been remarkable. a lot of fears about long-term sentience. one of the things discussed today was to ask what you have hopes for with ai and where you think ai will lead to a much

better future for everyone? give estimates. ai has a 7% chance of helping us build a 70% chance of helping us build a better world and regulations to hold us back from that would be a problem. there was concern of regulatory capture. to avoid favoring big tech companies well stifling patient, take a tiered risk approach to ai where we regulate the more risky things. i think if you are a social media company with 100 million users, there is a hierarchy's information risk that a small board. that allows us to protect citizens while also avoiding regulatory capture. caroline: andrew just came out of the meeting. we thank you so much for spending time with us. you are a co-founder of course sarah and are up at capitol hill and thank you. meanwhile, that does it for a

rather shortened edition of "bloomberg technology." we raced through a whole host of types of conversations around ai. do not miss the important interview ed has with amd later and do not miss our podcast. you can get it on apple, spotify, add i heart. this is bloomberg. ♪

♪ >> welcome to bloomberg markets. let's start with a quick check of the markets. the s&p picking up on declines now as crude oil declines even further as you can see down a 10th of a percent but having reversed from earlier gains. it is all about oil today trading below $70 a barrel after inventories came in and shrank having been building the last several weeks. also, exports showed a decline. traders skeptical of the data however. there is a big selloff in