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Tech Stocks Plunge as Traders Dump Everything With AI Exposure · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios.
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  Speaker 2: Podcasts.
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  Speaker 3: Radio. News.
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  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
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  Speaker 4: you get your podcasts or watch us live on YouTube.
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  Speaker 5: We are holding right around session lows right now for
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  Speaker 5: the major U.S. stock indexes. The Nasdaq Composite down 4.4%.
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  Speaker 5: Investors kind of reassessing what the change in the political
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  Speaker 5: landscape means for the semiconductor industry, for the AI industry.
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  Speaker 5: Let's bring in Matt Bloxham. He's our senior media and
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  Speaker 5: tech analyst based in London. And we're going to talk
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  Speaker 5: about Qualcomm's earnings as well. But I do want to
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  Speaker 5: get your take, Matt, on how investors are trying to
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  Speaker 5: suss out what the change in power in Washington means
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  Speaker 5: for the AI industry and therefore for semiconductors. The Philadelphia
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  Speaker 5: Semiconductor Index is tanking today. And as we were looking earlier,
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  Speaker 5: the best performing stock in there is down about now 5.2%.
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  Speaker 5: And the worst performing stock, yeah, is Astera Labs down 16%.
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  Speaker 5: This is on a daily basis. This is just today.
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  Speaker 5: What are you seeing, Matt?
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  Speaker 6: Yeah, I mean, you'll see that kind of the big
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  Speaker 6: takeaway initially is that the pace of data center build
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  Speaker 6: out in the U.S. is going to slow quite significantly
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  Speaker 6: as a result of the midterm election result. And that's
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  Speaker 6: going to primarily affect the builders and suppliers of components
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  Speaker 6: into those data centers and particularly markets. the semiconductor names,
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  Speaker 6: which is, I think, why you're seeing such focus there.
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  Speaker 6: But on the flip side, and maybe it seems a
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  Speaker 6: little bit counterintuitive, but the consumers of that capacity, particularly
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  Speaker 6: the hyperscalers and the neoclouds, benefiting because I think we
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  Speaker 6: got into this position where investors felt that The investments
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  Speaker 6: they were making were slightly disconnected from the reality of
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  Speaker 6: business economics, and they weren't necessarily going to make a
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  Speaker 6: good return on those investments. So the fact that you've
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  Speaker 6: got an external factor like a circuit breaker, if you like,
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  Speaker 6: slowing the pace at which they can make those investments
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  Speaker 6: is making investors feel more comfortable about the outlook that
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  Speaker 6: the squeeze on cash flow isn't going to be so great,
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  Speaker 6: and the risk of having stranded assets isn't so great either.
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  Speaker 6: So You know, I think there's probably going to be
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  Speaker 6: a few more chapters of this story and lots of
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  Speaker 6: nuance in it. But that's the kind of trade right now.
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  Speaker 7: How do you or how do investors, I guess, think
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  Speaker 7: about the risk of the U.S. falling behind maybe in
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  Speaker 7: some of these investments to the extent that there is
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  Speaker 7: this temporary or potential roadblock here to construction? Because It
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  Speaker 7: is competitive out there and maybe just simply between the U.S.
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  Speaker 1: And China, for example. How do we weigh that, do
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  Speaker 1: you think?
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  Speaker 6: Yeah, you know, I don't think, I personally think that
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  Speaker 6: that's too much of a worry. For a start, the U.S.
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  Speaker 6: is already well ahead of lots of other regions, particularly Europe.
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  Speaker 6: And actually, Europe is an environment that has quite heavy
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  Speaker 6: policy constraints around creation of new data centers. And I
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  Speaker 6: guess to some degree, the U.S. is potentially moving ahead
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  Speaker 6: in that direction. So I don't think it's necessarily going
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  Speaker 6: to be a disadvantage. And I think you potentially kind
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  Speaker 6: of create just a kind of second iteration of innovation.
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  Speaker 6: The kind of first wave of AI has been around
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  Speaker 6: kind of raw capacity. And I think what you might
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  Speaker 6: see is that the kind of frontier model developers now
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  Speaker 6: sort of say, okay, well, if if capacity is going
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  Speaker 6: to be constrained, I need to make frontier models that
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  Speaker 6: are more efficient in their consumption of compute and power.
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  Speaker 6: We may see that innovation come through and I still
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  Speaker 6: think that the big US frontier model developers and some
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  Speaker 6: of the Cloud providers are in the best position to
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  Speaker 6: innovate those new product offerings so that their end customers
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  Speaker 6: can make the most out of what's actually available.
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  Speaker 5: Matt, I mentioned how chip makers are down big today.
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  Speaker 5: Qualcomm is among them. It's down about 13%. This is
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  Speaker 5: after its latest earnings report. A lackluster profit forecast. Like
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  Speaker 5: so many others, households and companies, Qualcomm is dealing with
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  Speaker 5: higher costs, and that's proving to be a weight on
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  Speaker 5: its bottom line.
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  Speaker 6: Yeah, that's right. So, obviously, historically, Qualcomm heavily exposed to
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  Speaker 6: the smartphone market, which has been growing much more slowly
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  Speaker 6: in the last year or two, and now also suffering
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  Speaker 6: from higher input costs because memory is a massive part
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  Speaker 6: of the bill of materials for a smartphone. And obviously,
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  Speaker 6: memory chip prices have been going up massively. So, I
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  Speaker 6: think that's where the margin pressure is really coming from,
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  Speaker 6: both in the numbers they reported and the forward outlook.
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  Speaker 6: I think also what they've been doing to try to
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  Speaker 6: kind of make people feel more optimistic about the business
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  Speaker 6: outlook is make a hard pivot towards AI and supporting
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  Speaker 6: AI build-outs in data centers. Up until the midterms, that
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  Speaker 6: seemed like a great strategy and people kind of saw
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  Speaker 6: a positive road ramp on there. Now, obviously, even though
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  Speaker 6: they're still talking positively about the rate of growth for
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  Speaker 6: that part of their business over the next year or two,
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  Speaker 6: I think investors are now thinking, well, we're going to
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  Speaker 6: kind of pare back how much growth they're going to
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  Speaker 6: get from that. So you're kind of now in this
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  Speaker 6: kind of tricky situation where you've got cost inflation, which
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  Speaker 6: isn't going to go away anytime soon on their core
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  Speaker 6: smartphone business, and perhaps slower growth on data centers.
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  Speaker 1: What is the outlook for memory chips?
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  Speaker 7: The shortage here, as we hear it across a whole
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  Speaker 7: swath of companies, how long is that supposed to last?
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  Speaker 6: I think it's going to last well into 2027. I
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  Speaker 6: think certainly the last couple of weeks we've had indications
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  Speaker 6: that the squeeze is going to last until at least
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  Speaker 6: into the second half of next year. And there is
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  Speaker 6: a lag, quite a big lag, on how even a
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  Speaker 6: big change in, say, data center build-outs would flow through
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  Speaker 6: to a more normalized balance between demand and supply areas.
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  Speaker 6: in the chip market. They've all indicated they're sold out
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  Speaker 6: probably to the end of next year. Everything they can
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  Speaker 6: make has already been ordered and contracts agreed at certain
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  Speaker 6: price points. So, I think it's going to take quite
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  Speaker 6: some time for us to see an easing of price
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  Speaker 6: pressure in that market. But it may well, and I
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  Speaker 6: guess maybe a lot of investors are hoping, that it
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  Speaker 6: will make the chip manufacturers who've all indicated huge investment
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  Speaker 6: plans to expand capacity that they'll make some adjustments to
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  Speaker 6: that so that they're not in a situation that we've
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  Speaker 6: seen before where they've got a glut of capacity a
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  Speaker 6: year or two.
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  Speaker 3: Down the line.
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  Speaker 5: Before we let you go, Matt, very quickly, you think
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  Speaker 5: Anthropic is still moving ahead with its IPO as planned
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  Speaker 5: for later this month?
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  Speaker 6: You know, I was just talking about this with a
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  Speaker 6: colleague before I came on. You know, obviously, every day
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  Speaker 6: you see the market under pressure. It looks like a
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  Speaker 6: harder and harder sell. But I'm sure they will go
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  Speaker 6: with it until the very last moment and, you know,
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  Speaker 6: take a decision once they see what the book of
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  Speaker 6: demand looks like.
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  Speaker 1: Stay with us.
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  Speaker 8: More from Bloomberg Intelligence coming up after this.
• 7:32
  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
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• 7:42
  Speaker 4: you get your podcasts or watch us live on YouTube.
• 7:47
  Speaker 7: Next guest writes, with Democrats winning control of Congress, policy
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  Speaker 7: risk for U.S. companies may increase as incentives grow for
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  Speaker 7: President Donald Trump to rely on public pressure, executive power
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  Speaker 7: and federal leverage to advance White House goals. Nathan Dean,
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  Speaker 7: senior policy analyst for Bloomberg Intelligence down in D.C. What
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  Speaker 7: do we know from President Trump here? Because he likes
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  Speaker 7: his executive orders. He likes his executive power. You think
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  Speaker 7: we may see more of that?
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  Speaker 3: Absolutely. It's been reported that the White House is going
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  Speaker 3: to actually do more executive orders over the next couple
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  Speaker 3: of weeks. And let's just think about it from a
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  Speaker 3: lame duck perspective. If President Trump doesn't have the ability
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  Speaker 3: to work with Congress, they're going to go to other
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  Speaker 3: areas where the power of the presidency is more powerful.
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  Speaker 3: So geopolitical matters, tariffs, et cetera. And presidents in the
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  Speaker 3: second half of their second term, when Congress largely says, look,
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  Speaker 3: we don't want to work with you because you're not
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  Speaker 3: going to be around. They try and stick to this area.
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  Speaker 3: So from an investing standpoint, we're looking at the energy
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  Speaker 3: sector in particular, just because not only of their exposure
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  Speaker 3: to what's going on with Iran, but Venezuela is a
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  Speaker 3: good example as well. When President Trump says, look, I
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  Speaker 3: want access to Venezuela, we need those companies down there
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  Speaker 3: building up infrastructure, these companies are going to come back
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  Speaker 3: and say, well, Mr. President, do we have a guarantee
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  Speaker 3: that we'll have a financial, physical security after January 20th, 2029?
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  Speaker 3: That's a lot of billions of dollars they have to
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  Speaker 3: commit without having that type of guarantee after President Trump leaves.
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  Speaker 5: We should note, by the way, oil prices are rising
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  Speaker 5: about two and a half percent today and energy stocks
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  Speaker 5: are the best performing group in the S & P,
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  Speaker 5: up eight tenths of one percent. Nathan, I also want
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  Speaker 5: to get your take on what the changing landscape in
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  Speaker 5: Washington means for defense companies, defense contractors. They looked like
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  Speaker 5: they were going to have a good run with President
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  Speaker 5: Trump and a unified government behind them. But now with
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  Speaker 5: the Democrats taking control of Congress, what does spending on
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  Speaker 5: defense look like?
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  Speaker 3: So we're telling our clients that when it comes to
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  Speaker 3: defense spending, it's generally going to be around status quo,
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  Speaker 3: maybe a small increase over where we are right now.
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  Speaker 3: The Department of Defense slash war budget is around $ 800,
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  Speaker 3: $ 900 billion. You're not going to get that $ 1. 5 trillion
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  Speaker 3: that President Trump asked for. But what the Department of
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  Speaker 3: Defense is going to have to get used to is
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  Speaker 3: the Democrats, and this is largely simplified here, are going
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  Speaker 3: to make the Department of Defense slash war really justify
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  Speaker 3: their actions through congressional hearings and appropriations. The good news
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  Speaker 3: is for investors is that while this isn't going to
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  Speaker 3: dramatically change defense level spending, we should get additional information
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  Speaker 3: and we should get a greater timeline of knowing where
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  Speaker 3: these programs are going to go. Because, look, Democrats also
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  Speaker 3: view defense spending as a jobs program. And also there's
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  Speaker 3: a lot of armaments that the United States has to replenish,
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  Speaker 3: not for just the Iranian conflict, but potential conflicts with
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  Speaker 3: other countries.
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  Speaker 1: Nathan.
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  Speaker 7: I think in a lot of states across the country,
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  Speaker 7: the electorate spoke loud and clear that they either don't
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  Speaker 7: want data centers or the data center push needs to
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  Speaker 7: slow down. Yet President Trump is out there saying he's
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  Speaker 7: all in on AI and he thinks.
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  Speaker 1: That just go, go, go.
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  Speaker 7: How does he react, do you think, to maybe changing
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  Speaker 7: feelings amongst folks in this country?
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  Speaker 3: Yeah, so there's really three ways to think about artificial
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  Speaker 3: intelligence slash data center and policy. Now, when it comes
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  Speaker 3: to federal policy, President Trump, like he says, let data reign.
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  Speaker 3: If it's legislation, you need a signature. If it's regulation,
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  Speaker 3: you need his blessing. And he's very much going to
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  Speaker 3: be a light touch towards artificial intelligence because of his
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  Speaker 3: desire to be competitive with China. When it comes to
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  Speaker 3: the states, it's going to be extremely difficult for these
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  Speaker 3: data center operators. It's not going to change overall data
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  Speaker 3: center spending in our view, but if you get significant
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  Speaker 3: roadblocks in Texas, can you take a project and move
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  Speaker 3: to New Mexico or move somewhere else? It's going to
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  Speaker 3: be a lot of trying to figure out project by
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  Speaker 3: project where it goes. But one of the biggest risks
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  Speaker 3: for artificial intelligence is the 2028 presidential cycle. Because as
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  Speaker 3: you noted, in this election, there was a lot of
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  Speaker 3: populism views coming out from the American people maybe not
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  Speaker 3: trusting data centers, maybe not trusting artificial intelligence. If a
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  Speaker 3: 2028 presidential candidate takes up that mantra and runs with it,
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  Speaker 3: we could see significant AI regulations, significant AI legislation brewing
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  Speaker 3: that could potentially play out in 2029.
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  Speaker 1: Stay with us.
• 11:58
  Speaker 8: More from Bloomberg Intelligence coming up after this.
• 12:04
  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 12:08
  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 12:11
  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
• 12:14
  Speaker 4: you get your podcasts or watch us live on YouTube.
• 12:19
  Speaker 5: All right, let's go now to what this means, the
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  Speaker 5: change in the political landscape for data centers and hyperscalers.
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  Speaker 1: We've seen big moves in these companies.
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  Speaker 5: Justin Teresi is our Bloomberg Intelligence Antitrust Litigation and Policy Analyst.
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  Speaker 5: And I want to start with Texas, where most people
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  Speaker 5: expected Greg Abbott to hang on and to win re-election.
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  Speaker 1: I was one of them. You were one of them.
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  Speaker 6: I was, yeah.
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  Speaker 5: I remember reading your research, and you're like, this is
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  Speaker 5: not really what we're anticipating. Now that you have a
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  Speaker 5: new governor, now that you have a break on data
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  Speaker 5: center development, in Texas. How does that make you rethink
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  Speaker 5: your thesis?
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  Speaker 1: Yeah, definitely.
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  Speaker 9: So I think this is a story we obviously saw
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  Speaker 9: replicated in so many different states on Tuesday night. But look,
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  Speaker 9: when it comes to Texas, I think really the devil
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  Speaker 9: is going to be in the details here. We have
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  Speaker 9: Governor Hinojosa, Governor-elect Hinojosa coming in, who's promised this moratorium
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  Speaker 9: on new data centers. And like all of these other states,
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  Speaker 9: that's the question. What is a new data center? Are
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  Speaker 9: we talking about a data center That's in its earliest stages,
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  Speaker 9: maybe just being talked about right now. Are we talking
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  Speaker 9: about a facility that might have some permitting already done,
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  Speaker 9: but not all of it yet? That's really the big
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  Speaker 9: question mark here as to how this rolls out. What's
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  Speaker 9: the language on things as they're proposed?
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  Speaker 7: I think part of this is the tech industry and
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  Speaker 7: whoever builds these things have done a terrible job pitching
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  Speaker 7: them to.
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  Speaker 1: To the country, to local municipalities. They didn't have to, right?
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  Speaker 2: Yeah.
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  Speaker 1: They didn't have to for so long. I don't think so, yeah.
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  Speaker 1: Because initially it was like build, build, build, build.
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  Speaker 3: It's jobs.
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  Speaker 1: It's tax revenue.
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  Speaker 7: But is that part of the issue that it's simply
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  Speaker 7: a messaging issue that this industry needs to– figure out
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  Speaker 7: how to do something?
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  Speaker 9: Look, 100%, that's been a huge problem, Paul, right? I
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  Speaker 9: think we're talking about an industry that when we're looking
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  Speaker 9: at maybe government intervention over the past couple of decades,
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  Speaker 9: it's an industry that really hasn't been told.
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  Speaker 1: No very much with regard to a lot of things, right?
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  Speaker 9: And I think maybe that's baked into the equation a
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  Speaker 9: little bit too. But look, I think, you know, today
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  Speaker 9: you saw an announcement by OpenAI, they've launched a community compact, right?
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  Speaker 9: Where they're talking about involving communities more in these rollouts,
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  Speaker 9: you know, when they're proposing things at the earliest stages, right?
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  Speaker 9: But look, to your point, a lot of these things
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  Speaker 9: probably are things that should have been said already before
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  Speaker 9: we got to Tuesday. Things like not entering non-disclosure agreements
• 14:36
  Speaker 9: with public officials. Nobody wants to feel like they've been,
• 14:39
  Speaker 9: you know, they've been had by somebody coming into their community.
• 14:42
  Speaker 9: So those aspects of these community compacts and the things
• 14:45
  Speaker 9: we're going to see rolling out the next month or two,
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  Speaker 9: I'm sure, you know, these are probably things that should
• 14:49
  Speaker 9: have happened well before Election Day as well.
• 14:51
  Speaker 5: In the meantime, before the new elected officials take office,
• 14:55
  Speaker 5: is there going to be a frenzy of activity between
• 14:57
  Speaker 5: now and year end for whatever projects are kind of
• 15:01
  Speaker 5: in whatever stage to kind of move forward and get
• 15:04
  Speaker 5: as locked tight as you can?
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  Speaker 9: I think definitely there's going to be an attempt. And
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  Speaker 9: I think, you know, we might see this conversation about
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  Speaker 9: community involvement for the future. But right now, If I'm
• 15:12
  Speaker 9: speaking with my lobbyists, I'm probably thinking about how can
• 15:14
  Speaker 9: we expedite a permit before a governor-elect takes office in January?
• 15:18
  Speaker 9: It remains to be seen. Will this moratorium by Governor
• 15:21
  Speaker 9: Abbott be lifted in some way before he leaves office
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  Speaker 9: in January? That's a big question mark. New Mexico is
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  Speaker 9: another prime example. Governor-elect Holland coming in, she's been very
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  Speaker 9: firm about data center moratorium, but there's a huge Oracle
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  Speaker 9: project that still needs a few more permits before things
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  Speaker 9: can really get moving out there, too. it's a big
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  Speaker 9: question mark, but I think we're going to see a
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  Speaker 9: lot of activity to try to secure those port permits
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  Speaker 9: before January.
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  Speaker 7: And part of the discussion needs to be, you want
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  Speaker 7: the U.S. to remain competitive in AI? We got to
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  Speaker 7: figure out a solution here, people, you know, because these
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  Speaker 7: things have to be built. And it's just a question
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  Speaker 7: of how do we do it that, you know, is beneficial.
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  Speaker 1: To everybody to some degree. I don't know how you
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  Speaker 1: get there, but that's That's the simple pitch, I think.
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  Speaker 1: I think you're right.
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  Speaker 9: And I'll just say as well, look, the good news here,
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  Speaker 9: the silver lining is that, look, most of these state legislatures,
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  Speaker 9: they're coming back in January. The political will is there
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  Speaker 9: right now. If there's going to be activity, it's going to.
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  Speaker 1: Be this session.
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  Speaker 9: They're mostly done by June, right? So I think this
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  Speaker 9: is the window. We're going to have a clearer picture
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  Speaker 9: of what the landscape is in most of these states
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  Speaker 9: between now and the close of 1H27. That's our timeline.
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  Speaker 9: that's when the focus will happen on these issues. And
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  Speaker 9: I think we actually understand what everything looks like by
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  Speaker 9: mid-year 27.
• 16:32
  Speaker 1: Stay with us.
• 16:33
  Speaker 8: More from Bloomberg Intelligence coming up after this.
• 16:40
  Speaker 4: You're listening to the Bloomberg Intelligence Podcast. Catch us live
• 16:44
  Speaker 4: weekdays at 10 a.m. Eastern on Apple CarPlay and Android
• 16:47
  Speaker 4: Auto with the Bloomberg Business App. Listen on demand wherever
• 16:50
  Speaker 4: you get your podcasts or watch us live on YouTube.
• 16:55
  Speaker 1: Let's go to Ryan Gallagher, Bloomberg investigative reporter. He's got
• 16:57
  Speaker 1: the big take story. He's got the story. I think
• 16:59
  Speaker 1: it could make people a little concerned.
• 17:01
  Speaker 7: Ads in popular apps give police a powerful tool to
• 17:04
  Speaker 7: spy on users.
• 17:06
  Speaker 1: Ryan, this does not sound good. It's a big take story,
• 17:09
  Speaker 1: so we know it's important. Tell us what you found.
• 17:12
  Speaker 2: Yeah, we basically dug deep on it.
• 17:15
  Speaker 3: It's a U.S.
• 17:16
  Speaker 2: Company based out of Nebraska that has a very interesting
• 17:19
  Speaker 2: technology that essentially is repurposing data the advertising ecosystem to
• 17:26
  Speaker 2: harvest location data from hundreds of millions of mobile phones
• 17:31
  Speaker 2: all around the world and then selling that to law
• 17:33
  Speaker 2: enforcement and intelligence agencies internationally, including many agencies that you
• 17:39
  Speaker 2: would be familiar with in the United States, including Immigrations
• 17:42
  Speaker 2: and Customs Enforcement and departments of the Department of Defense,
• 17:48
  Speaker 2: several like the U.S. Army, for example, using it, as
• 17:51
  Speaker 2: well as local agencies and state-level law enforcement agencies that
• 17:55
  Speaker 2: are using this tool essentially to track people's phones. And
• 17:58
  Speaker 2: what's very interesting is that it circumvents the Fourth Amendment
• 18:02
  Speaker 2: predictions that are usually associated with monitoring people's phones. The
• 18:06
  Speaker 2: authorities don't need to go and get a search warrant
• 18:08
  Speaker 2: to access this data. So it's a kind of contentious
• 18:11
  Speaker 2: topic that we're delving into.
• 18:13
  Speaker 6: All right.
• 18:14
  Speaker 5: This is frightening if you value your privacy.
• 18:16
  Speaker 1: How come we didn't know about this before? We don't
• 18:18
  Speaker 1: know about a lot of things.
• 18:19
  Speaker 5: And I guess part of it is because they are
• 18:21
  Speaker 5: collecting data from when your smartphone is using different apps.
• 18:27
  Speaker 5: What are some of the apps we're talking about? Are
• 18:28
  Speaker 5: these specialized apps or are these apps that Paul and
• 18:31
  Speaker 5: I would use without even thinking twice?
• 18:33
  Speaker 2: Well, they're commonly used apps. What we found, we were
• 18:37
  Speaker 2: able to identify... I mean, first of all, this is
• 18:39
  Speaker 2: very secretive. The company won't tell you which apps they're
• 18:43
  Speaker 2: harvesting this data from. And there's like a whole sort
• 18:48
  Speaker 2: of grey marketplace around buying and selling this data. But
• 18:52
  Speaker 2: we did identify a few examples. One of them was...
• 18:55
  Speaker 2: There's a popular weather app called AccuWeather. There was another
• 19:00
  Speaker 2: one called Multimaze, which is just a game that people
• 19:04
  Speaker 2: use on Android or iOS devices. downloaded hundreds of times
• 19:09
  Speaker 2: some of these apps and there was another one that's
• 19:12
  Speaker 2: a popular app among Muslims which is called Muslim Pro
• 19:16
  Speaker 2: and it's an app that people use to set their
• 19:18
  Speaker 2: prayer times and again this is an app that's actually
• 19:21
  Speaker 2: been downloaded used by millions of people and they're harvesting
• 19:25
  Speaker 2: location data off of these types of apps there's also
• 19:28
  Speaker 2: we know about email apps that people are using So,
• 19:32
  Speaker 2: you know, widely commonly used apps, and people have no
• 19:35
  Speaker 2: idea that the location data is being pulled out of
• 19:38
  Speaker 2: there and repurposed for law enforcement and intelligence agencies internationally
• 19:44
  Speaker 2: in some cases.
• 19:46
  Speaker 1: I'll ask the dumb question of the day. Is this legal?
• 19:51
  Speaker 2: Well, some people, including some of the people at the
• 19:54
  Speaker 2: ACLU in the US, believe, know that it should be,
• 19:57
  Speaker 2: that there need to be new laws passed to regulate it.
• 20:01
  Speaker 2: What's really interesting about this technology, like I said at
• 20:04
  Speaker 2: the start, is that it's kind of a grey area.
• 20:07
  Speaker 2: There actually isn't clear regulation around how the authorities can
• 20:12
  Speaker 2: use this information. And it's one of these cases where
• 20:16
  Speaker 2: the technology's moved faster than the law. So it's basically
• 20:21
  Speaker 2: a giant loophole and there's numerous senators and representatives in
• 20:28
  Speaker 2: the House as well who are trying to actively legislate
• 20:31
  Speaker 2: this to close the loophole because they're concerned about how
• 20:34
  Speaker 2: this data could be potentially abused by people if it's
• 20:38
  Speaker 2: not properly overseen by a judge, for example. So it's
• 20:43
  Speaker 2: a great area in answer to your question and people
• 20:46
  Speaker 2: are trying to shut those loopholes now.
• 20:48
  Speaker 6: Okay.
• 20:48
  Speaker 5: While you're talking to us, I'm looking through my phone
• 20:50
  Speaker 5: to see if I can turn off the location services
• 20:52
  Speaker 5: for all these different apps I.
• 20:53
  Speaker 1: Might be using.
• 20:55
  Speaker 5: How do people protect themselves against this? Is there a
• 20:57
  Speaker 5: way to do so?
• 20:59
  Speaker 2: Yeah, I mean, well, because this technology essentially exploits the
• 21:06
  Speaker 2: advertising trackers that are within these apps, one quite effective
• 21:11
  Speaker 2: way that can work is actually to use, there are
• 21:14
  Speaker 2: like ad blocking, special apps you can get for ad
• 21:18
  Speaker 2: blocking that block ads from getting onto your phone in
• 21:21
  Speaker 2: the first place. Those can actually work to shut out
• 21:24
  Speaker 2: some of this stuff And there are also ways that
• 21:28
  Speaker 2: you can, for example, on an iPhone or an Android phone,
• 21:31
  Speaker 2: reset what's called an advertising ID. And it's basically a
• 21:36
  Speaker 2: unique code that every phone has. And this is the
• 21:39
  Speaker 2: code that they use to track the phones. And you
• 21:41
  Speaker 2: can actually... delete your advertising id or reset it sort
• 21:46
  Speaker 2: of frequently and it makes it basically very difficult for
• 21:50
  Speaker 2: them to use this method to track your phone um
• 21:53
  Speaker 2: so there are ways to to defend against it but
• 21:56
  Speaker 2: part of the issue is that people really are are
• 21:59
  Speaker 2: just unaware that this is happening and it's happened in
• 22:02
  Speaker 2: secrecy so part of what we're doing is just trying
• 22:04
  Speaker 2: to educate people around this issue because the hundreds of
• 22:08
  Speaker 2: millions of people are implicated in it because you're just
• 22:11
  Speaker 2: skipping up the data indiscriminately.
• 22:15
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• 22:24
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• 22:29
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• 22:32
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