The future of artificial intelligence. Caroline social capital fires to partners after a probe citing an undisclosed situation. What could be behind the decision. First a check in on these publicly traded markets, a more records to be had. We ease back a little bit. Instead we just digest where the Federal Reserve might go and what the inflationary pressures are. A bit of profittaking being had. Managing to fight off some of the doom and gloom scenarios happening in the u. S. We are up 2 10 of 1 . Some key ai fervor across the atlantic. Maybe this dictates trade in the United States. We see the bond market 30 year auction lackluster demand yesterday. Moving on from that into the world where we just dont catch a break in terms of the runup. Powering up two Percentage Points on the day braided eclipsing that 73,000 handle. What are you watching on the micro . Ed social media names, over the last seven days. But the moment the house did to the divest or ban tiktok bill there was a significant leg higher in rumble and met up. The conversation will now change. We are going to discuss whether the divest or ban tiktok bill will have success in the senate but we are people already say its a foregone conclusion we say whos get a benefit from the tiktok ban in the u. S. Or who is going to buy tiktoks u. S. Operations. Rumbles gain much of it in the weight that they are looking theres a lot to discuss with the big step in the house has been taken and now we moved to the senate. Caroline still much potential pushback from the senate and notably the ceo went endo to lobby the senators yesterday. Alex, according to people they were looking to target senators in particular. Alex he was prayed the tiktok team saw this bill potentially flying through the house like it did today getting that majority vote in the past few minutes. The next hurdle will be the senate. Chuck schumer in the senate has so far not said he would take up this bill. Tiktok put out a Statement Today appealing to senators saying this process was secret and the bill was jammed through for one reason. We are hopeful the senate will consider the facts and realize the impact of the economy. The tiktok ceo who was down in d. C. Is going to be spending his time in the senate hoping while this is the furthest and antitiktok bill has gone in the u. S. Government that it ends here. Its not just the Chuck Schumer has not endorsed the bill, its that there is a bigger concern here as well. Bloomberg is reporting this idea that even on the republican side of the aisle they look at this bill more big picture, why do we handle these powers to the administration and give them such a blanket power for censorship to make a decision on tiktok. Thats there in the background but im think im right in saying tiktok will always will mount a legal challenge to the idea would have to divest or sell its u. S. Operations anyway. Alex i think it was summed up pretty simply to our d. C. Colleagues by thom tillis who said yesterday hes worried about the unintended consequences of a bill like this. Its been fascinating to watch the battle with tiktok in d. C. Because republicans rate large have been some of the biggest agitators against to talk. Some of that changed when we had donald trump himself, the president who put the First Executive order forward to ban tiktok came out and said a few days ago maybe we should not do that because it would give metatoo much power so we have some rain billing here not only over whether or not this bill addresses concerns or if National Security concerns have been made clear to the lawmakers but how much power this would give the government, this would give the executive branch in ruling over the private sector. Ed in that moment, the house passed the bill, there was a big spike in meta. But of course, tiktoks use or base and its platform is highly analogous. Alex as done a wonderful job of covering all of that. An immediate pullback. So sources say tiktok intends to exhaust all legal challenges before it considers any kind of divestiture from its chinese Parent Company. Lets bring in the institute of World Politics professor and strategy and statecraft and share of International Communication for his point of view. For many this was a foregone conclusion. Divest or be banned. Is it as simple in your mind . From the National Security community it is Pretty Simple issue. It is a potential threat to National Security because of its reach. Where the software is, the potential to influence but also the close relations, it is a Chinese Company and there was a report that came out on monday on threats assessment and china was prominently featured in that. Chinas activities in the last few years have been much more aggressive. They have been working with adversaries like russia and iran more closely and so theres real concerns from the National Security community it shouldve been done probably years ago. Caroline we know this has been considered for a long time in terms of the worries of chinese influence. Tiktok has said we can alleviate that. Project texas insuring oracle is facilitating the way in which data is not transferred to china. How much have you read into the ability for that to ease any concerns. The fact it is a Chinese Company that still has to abide by chinese laws which would require data transfers. The other concern is their algorithm and the ability to potentially push influence messaging that we wouldnt be able to detect in real time. It would be really difficult to detect some of their longerterm influence activities if they were to shift their algorithm for more malign purposes. Thats a real concern for the National Security community. 170 million americans use tiktok and many of them like it. Are they being represented in this process . David i think the senate will have its say, the fact its been delayed for a number of years and there hasnt been action, thats a testament there has been a voice for those folks in the process. So i think we have a system of laws and rules and ways to appeal and theres a lot of different avenues for people to have their voices heard. Thats a strength of the u. S. From the National Security community at least. It sort of a nobrainer the action shouldve happened a while ago. If this doesnt go through, what does that mean for china and the u. S. . David im a little concerned. If the Chinese Government thinks it can block policy action on important issues by appealing to domestic political factions or special interests, then i think that makes a more dangerous world. That may embolden the chinese to be more aggressive and it decreases the potential increase the potential for more direct conflict in the years ahead. Institute of World Politics professor of strategy and statecraft. We thank you. Coming up, more regulation. This time from the eu passing a landmark set of ai rules. This is bloomberg technology. Caroline the European Union passed the worlds most extensive rules on artificial intelligence. The landmark set of rules could set the tone for how ai in the western world. Many would say some of the lawmakers have never been lobbied as hard as they have been over this particular ai act. Whats the take away for companies trying to build . Right now its a celebratory day in brussels. Last time i was speaking to you it was after a most 40 hours of negotiations in middecember. Fast forward three months and we have them signing off on this act. We are getting a lot of concerns from companies, theyve been sounding alarm bells about overregulation. Concerns the european continent will be behind because they are regulating much more ahead then there u. S. Counterparts. We also have this concern from European Tech companies saying we want to compete with u. S. And you can over regulate us, we will never have a chance to actually compete. Caroline ed im building Large Language Models and based in europe. Now that this has passed, what is it that i actually have to do to comply . Jillian its good to look at the eus approach and riskbased approach. Describing the use of the technology and not technology itself. This means in practice they would be banning the worst possible uses of ai so they can be used to perform recognition in workplaces or schools, social scoring, giving a score based on their behavior. When it comes to highrisk situations there are more tricky ones. Ai systems being used for migration applications or certain job applications. A lot of companies will have to perform a lot more checks in order to prove they are safe. The one exception a lot of companies are lobbying hard against our these additional controls to generative ai. Especially regulating the technology itself. In the end with these companies will have to do is prove to regulators energy consumption, a proof they are complying with copyright laws and theres a new ai office based in brussels and the eu is setting up. This will operate almost like a police force where they can say hey we want more data on how youve trained your large language model. And can ban an application if its performing poorly. Caroline theyve partnered with microsoft and one expert saying eu lawmakers got played in this particular situation. How and why will this not be a read across to how the rest of the world adopts ai legislation . Last year we saw a lot of these Companies Pushing per regulation. We had sam altman in congress pushing for regulation. We had that in brussels but well arguing they have also been lobbying against some of the strictest controls theyve seen in brussels. Last year they were really effective in getting the french government pushing these government saying we will be able to compete with u. S. Companies. They were rbc partnered with microsoft so that left a bad taste in a lot of lawmakers mouths but also affects other companies signing on for voluntary commitments trying to prove to governments they are taking this seriously. I think more and more to Tech Companies might be selfserving. Caroline jillian, we thank you so much braid what if you got coming up . The other top tech stories, first off the pentagon pulling out of plans to spend as much as 2. 5 billion on a chip grant to intel according to sources. The move threatens the total amount of federal funding intel was expecting to receive it now puts the onus on the Commerce Department to make up the shortfall. It was part of a package that allocated 3. 5 billion to intel to produce defense. Shares arch climbing the most in almost two years after the australian finance review reported they were in discussions to sell off carrier optics. Singapores largest carrier responding to the report saying there was no impending deal to offload optus as reported. Google is curbing its genai chatbot from responding to questions directly to the indian general elections. This follows similar controls set up in the u. S. And other Countries Holding elections this year in an effort to combat concerns over misinformation and conspiracies. Google collaborating with the Election Commission of india to enable easier discovery of vital voting information with google search. Caroline so much more in the world. Social capital firing to partners after a probe citing an undisclosed situation. Meanwhile checking in on some publicly traded stocks. Flat on the day but with a little bit of volatility, of the pharmaceutical giant teaming up with amazon to expand its popular weight loss drugs directly to patients. We sat down with the ceo of eli lilly who discussed the innovations they have been doing and how they are tackling supply chain constraints. Its not a protein, it is chemistry and its not in an injectable device, its a tablet. The world is awash in those capacities so should it be successful i think we will be able to tap into more supply which is good for the u. S. But even better for places like brazil, mexico or china. Get help reaching your goals with j. P. Morgan wealth plan, a digital money coach in the chase mobile® app. Use it to set and track your goals, big and small. And see how changes you make today. Could help put them within reach. From your first big move to retiring poolside and the other goals along the way. Wealth plan can help get you there. J. P. Morgan wealth management. Ed social capital, the Venture Capital firm fired two of its partners citing an undisclosed situation. Thats according to a letter sent to its investors by blum according to bloomberg. In the last hour youve updated the story with more information particularly about one of the partners terminated because you heard from his lawyer. Yes, so yesterday morning the former facebook executive who is on the all in podcast sent a letter to investors and social capital to say the two of their top partners were fired. They hired a bigtime law firm to review and probe the situation and after the probe, they were terminated on sunday. The situation in question happened last tuesday and in the letter all he did was call the situation. Theres been a lot of injury within social capital in the investment and Venture Capital communities about what happened here. Theres been salt sorts of speculation but weve learned this comes down to an ai start the social capital invested in five or six years ago. This had to do with the partners being involved and offering a special Purpose Vehicle related to outside investors. This happened after they were worth maybe 60 million a few years ago. A special Purpose Vehicle related to that and all the money to be earned there. The company said the two men violated Company Policy but did not go beyond that and weve heard from lawyers for both of the men terminated saying there is no wrongdoing. And once they show their case the public will know they have done nothing wrong. And social capital has not responded to those. Caroline the spokesman saying it was undeserved. They say its being used as a pretext to fire him. How unusual is it to get such Little Information when such a step is taken. How unusual is it to lose such partners from a firm . People are fired from firms all the time but it is ready unusual especially showing between, what theyve done thereby saying employee specific circumstances and say no further comments at this time not even naming them in the initial tweet. All they did was create intrigue over what happened. If they have said initially what had happened maybe it wouldnt have been such a significant new cycle but they handled this poorly from the getgo. It was a three sentence email to a bunch of outside Investment Partners but got this though it going. He said if you want more information give me a call. So a lot of intrigue here. So when unusual situation. Ed social capital is basically not saying anything, but we know this has something to do with ai startup, explain the basics of that . Theres a lot of speculation on what it means. This ai startup, the valuation went through the roof and i guess there were some concerns potentially about that investment and how it was handled and how outside investors have been dragged into that. We are still trying to gather more information and whats happening here. Our hope is the lawyers from both sides present their cases to the public and perhaps send us more information on whats happening here so we can understand. It seems really abrupt having this situation appear on tuesday hiring a law firm on thursday, having partners on sunday and then this announcement within one week. It seems like something that was done very quickly. Something that may have been done in a rash manner. We will need to know more information to determine who is in the right and wrong here. Caroline weve invited social capital onto the show to get more information. We thank you so much for breaking it all down. Thus far social capital has not responded. We discuss all things crypto. The market still trading higher. The ceo of edge and node coming up next. Keep an eye on whats happening with disney. The ongoing issues with certain investors trying to push back on nelson peltz in particular. We see overall this is a Company Looking to be responding overall. Jamie dimon is backing bob iger in a proxy battle. But thus far we will keep an eye with whats happening with disney with what has been a very active investor. Up 6 10 of 1 this is bloomberg technology. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future. A future where you grew a dream into a reality. Its waiting for you. Mere minutes away. The future is nothing but power and its all yours. The all new godaddy airo. Get your Business Online in minutes with the power of ai. Ed welcome back to bloomberg technology. Caroline lets get you a quick check on these markets. May be a little bit of a test off by 8 10 of percent. Draw down in particular when it comes to some of the key chip names. Nvidia under pressure. Looking at the u. S. Also perhaps dictating the path of trade for equities, when you see yields pushing up a little bit on the end of the curve in particular on a 30 year auction, a bit of lackluster demand yesterday. Bond yields go higher, quite often we see tech stocks go lower. Bitcoin managing to carve its own path. Up 72, moving on some of the individual movers to the tech names. The chip stocks have been pushing generally on the pressure of the nasdaq. Tesla as well seeing another day of losses. This as we see analysts going negative on the stock. Im showing some companies outperforming. Chinese names are the highest. Some mixed reviews with certain analysts saying by this stock. Up another almost 5 on the day even as we digest u. S. China tensions going back to the tiktok story in a moment. Le